Document:

Subscription Agreement - Hall-Houston

    Exhibit
      10.7

    

    

      
        	
                Subscriber:

              	
                Petro
                  Resources Corporation

              	 
	 	
                dba
                  PRCT, Inc.

              	 

      

    

    
 

    

     

    
      

      

    

     

    

    HALL-HOUSTON
      EXPLORATION II, L.P.

    

    SUBSCRIPTION
      AGREEMENT

    
 

    

    
      

      

    

     

     

     

     

    

    THE
      LIMITED PARTNERSHIP INTERESTS OF HALL-HOUSTON EXPLORATION II, L.P. HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
      THE SECURITIES LAWS OF ANY STATE OR ANY OTHER SECURITIES LAWS AND ARE BEING
      OFFERED IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT AND SUCH LAWS. SUCH LIMITED PARTNERSHIP INTERESTS MUST BE
      ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED,
      HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE
      WITH (I) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS, AND ANY
      OTHER APPLICABLE SECURITIES LAWS; AND (II) THE TERMS AND CONDITIONS OF THE
      AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF HALL-HOUSTON
      EXPLORATION II, L.P., AS AMENDED FROM TIME TO TIME. THEREFORE, PURCHASERS OF
      SUCH LIMITED PARTNERSHIP INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR
      INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

     

    Page

    
      	
              ARTICLE
                I

              SUBSCRIPTION
                FOR INTERESTS; CLOSING CONDITIONS AND DELIVERIES

            	 
	
              1.1

            	
              DEFINED
                TERMS

            	
              1

            
	
              1.2

            	
              SUBSCRIPTION

            	
              1

            
	
              1.3

            	
              ACCEPTANCE
                OF SUBSCRIPTION

            	
              2

            
	
              1.4

            	
              CLOSING

            	
              2

            
	 	 
	
              ARTICLE
                II

            	 
	
              PARTNERSHIP
                AGREEMENT

            	 
	
              2.1

            	
              PARTNERSHIP
                AGREEMENT

            	
              2

            
	 	 
	
              ARTICLE
                III

            	 
	
              REPRESENTATIONS
                AND COVENANTS OF THE SUBSCRIBER

            	 
	
              3.1

            	
              REPRESENTATIONS
                AND COVENANTS

            	
              3

            
	
              3.2

            	
              EFFECT
                AND TIME OF REPRESENTATIONS AND COVENANTS

            	
              8

            
	 	 
	
              ARTICLE
                IV

            	 
	
              REPRESENTATIONS
                AND COVENANTS OF THE PARTNERSHIP AND GENERAL
                PARTNER

            	 
	
              4.1

            	
              REPRESENTATIONS
                AND COVENANTS

            	
              8

            
	
              4.2

            	
              EFFECT
                AND TIME OF REPRESENTATIONS

            	
              10

            
	 	 
	
              ARTICLE
                V

            	 
	
              POWER
                OF ATTORNEY

            	 
	
              5.1

            	
              POWER
                OF ATTORNEY

            	
              10

            
	
              5.2

            	
              OTHER
                PROVISIONS

            	
              11

            
	 	 
	
              ARTICLE
                VI

            	 
	
              MISCELLANEOUS

            	 
	
              6.1

            	
              AMENDMENTS

            	
              12

            
	
              6.2

            	
              NOTICES

            	
              12

            
	
              6.3

            	
              GOVERNING
                LAW; JURISDICTION; VENUE

            	
              12

            
	
              6.4

            	
              ASSIGNMENT;
                BINDING EFFECT

            	
              13

            
	
              6.5

            	
              ENTIRE
                AGREEMENT

            	
              13

            
	
              6.6

            	
              CONSTRUCTION

            	
              13

            
	
              6.7

            	
              COUNTERPARTS;
                FACSIMILE

            	
              13

            
	
              6.8

            	
              TERMINATION;
                EFFECT OF TERMINATION

            	
              13

            
	 	 	 
	
              Appendices:

            	 
	 	 	 
	
              Appendix
                I

            	
              -    
                Accredited Investor Certificate and Forms W-8 and W-9

            	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SUBSCRIPTION
      AGREEMENT

    

    This
      Subscription Agreement (this “Agreement”),
      effective as of the Closing Date (as defined below), is made by and among
      Hall-Houston Exploration II, L.P., a Delaware limited partnership (the
“Partnership”),
      HHEP
      GP II, L.P., a Delaware limited partnership and the Partnership's general
      partner (the “General
      Partner”),
      and
      the subscriber specified on the signature page hereof (the “Subscriber”).
      

    

    W
      I T N E S S E T H:

    

    WHEREAS,
      the Subscriber desires to purchase a limited partner interest in, and to become
      a limited partner in the Partnership, and the Partnership desires to sell the
      Subscriber a limited partner interest in, and to admit the Subscriber as a
      limited partner in, the Partnership, in each case, subject to the terms and
      conditions of this Agreement;

    

    NOW,
      THEREFORE, in consideration of the foregoing and of the mutual covenants and
      agreements herein, the parties hereto agree as follows:

    

    AGREEMENTS:

    

    ARTICLE
      I

    Subscription
      for Interests; Closing Conditions and Deliveries

    

    1.1 Defined
      Terms.
      Capitalized terms used in this Agreement that are not defined herein shall
      have
      the meanings specified in the Amended and Restated Agreement of Limited
      Partnership of the Partnership (as further amended from time to time, the
“Partnership
      Agreement”),
      a copy
      of which has been provided to Subscriber together with this
      Agreement.

    

    1.2 Subscription.
      Subject
      to the terms and conditions set forth in this Agreement, the Subscriber hereby
      agrees to (a) subscribe for and purchase from the Partnership an Interest in
      the
      Partnership, (b) subject to Section 1.3, make a Commitment to the Partnership
      with respect to such Interest equal to the “Commitment” set forth on the
      signature page hereto, which Commitment shall be at least $1,000,000 (unless
      waived by the General Partner in its sole discretion), (c) become a Limited
      Partner and (d) subject to the further terms and conditions set forth in the
      Partnership Agreement, make Capital Contributions to the Partnership from time
      to time. Notwithstanding the foregoing, the Subscriber understands that the
      Commitment set forth on the signature page hereto is merely a maximum amount
      and
      that, in connection with any acceptance of Subscriber’s subscription, the
      General Partner may, in its sole discretion, reduce the amount of such
      Commitment. 

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    

    1.3 Acceptance
      of Subscription.
      The
      Subscriber understands and acknowledges that the Partnership and the General
      Partner will rely on this Subscription Agreement and that the Subscriber has
      no
      right to cancel, assign, terminate or revoke this Subscription Agreement
      (including as a result of any reduction in the Subscriber’s Commitment as
      provided in Section 1.2), but that the General Partner will have a right to
      refuse to accept this Subscription Agreement for any reason or no reason,
      including if, in its sole discretion, the General Partner believes that (i)
      the
      Subscriber is not an Accredited Investor (as defined in Rule 501 of the rules
      promulgated under the Securities Act of 1933, as amended (the “Securities
      Act”)),
      (ii)
      the issuance of the Partnership Interest to the Subscriber would require the
      Partnership to register as an investment company under the Investment Company
      Act of 1940, as amended (the “Investment
      Company Act”)
      (iii)
      the issuance of the Partnership Interest to the Subscriber would require the
      Partnership, the General Partner or Hall-Houston Exploration Partners, L.L.C.,
      the general partner of the General Partner (the “GP
      Company”),
      to
      register as an investment adviser under the Investment Advisers Act of 1940,
      as
      amended (the “Investment Advisers Act”), (iv) the Subscriber is a “benefit plan
      investor,” as such term is defined in 29 C.F.R. §2510.3-101(f)(2) or (v) the
      Partnership Interest is otherwise determined not to be a suitable investment
      for
      the Subscriber. If not accepted, this Subscription Agreement will be null and
      void and all funds deposited by the Subscriber will be returned. The Subscriber
      also understands that this Subscription Agreement will not be binding on the
      Partnership or the General Partner until accepted, that the acceptance or
      rejection of subscriptions in whole or in part will be in the sole discretion
      of
      the General Partner and that subscriptions need not be accepted in the order
      received. If the General Partner accepts the Subscriber’s subscription in whole
      or in part, the General Partner will execute the two copies of this Subscription
      Agreement that the Subscriber executed and submitted to the Partnership and
      will
      return one executed copy to the Subscriber.

    

    1.4 Closing.
      The
      closing (the “Closing”)
      of the
      sale and purchase of the Subscriber’s Partnership Interest will occur as of the
      date the Subscriber’s subscription is accepted by the General Partner as
      evidenced on the General Partner’s signature page hereto (the “Closing
      Date”),
      which
      acceptance may occur on or before April 30, 2006, subject to the General
      Partner’s right to extend such date for up to an additional 60 days in its sole
      discretion. The Closing shall be held at the offices of the General Partner
      in
      Houston, Texas, or at such other place as the General Partner may
      designate.

    

    ARTICLE
      II

    Partnership
      Agreement

    

    2.1 Partnership
      Agreement.
      From and
      after the Closing Date, the Subscriber shall be admitted as a Limited Partner
      and shall (and hereby does) adopt, accept, and agree to be bound by the terms
      and conditions of the Partnership Agreement, including, without limitation,
      the
      obligation to make Capital Contributions as required by the Partnership
      Agreement.

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      III

    Representations
      and Covenants of the Subscriber

    

    3.1 Representations
      and Covenants.
      The
      Subscriber hereby represents and warrants to, and agrees with, the General
      Partner and the Partnership as follows:

    

    (a) Power
      and Authority.
      The
      Subscriber has all requisite power, authority and legal capacity (i) to enter
      into this Agreement, the Partnership Agreement, any side letters, and such
      other
      agreements, certificates, or other instruments as are executed and delivered
      by
      the Subscriber hereunder and thereunder (collectively, the “Subscriber
      Agreements”),
      (ii)
      to perform its obligations under each Subscriber Agreement, and (iii) to
      consummate the transactions that are the subjects of any Subscriber Agreement.
      This Agreement has been duly authorized, executed and delivered by the
      Subscriber and, upon due authorization, execution and delivery by the General
      Partner, will constitute the valid and legally binding agreement of the
      Subscriber enforceable in accordance with its terms against the Subscriber,
      except as such enforceability may be limited by (A) bankruptcy, insolvency,
      reorganization, fraudulent conveyance, moratorium or other laws of general
      application relating to or affecting the enforcement of creditors’ rights and
      remedies, as from time to time may be in effect, (B) application of equitable
      principles (regardless of whether such enforceability is considered in a
      proceeding in equity or at law) and (C) considerations of public
      policy.

    

    (b) Compliance
      with Laws and Other Instruments.
      The
      execution and delivery of the Subscriber Agreements by the Subscriber and the
      consummation of the transactions contemplated by the Subscriber Agreements
      do
      not conflict with or result in any violation of or default under any provision
      of any charter, bylaws, trust agreement, partnership agreement, or other
      organizational document, as the case may be, of the Subscriber or any agreement,
      certificate, or other instrument to which the Subscriber is a party or by which
      the Subscriber or, to Subscriber’s knowledge, any of its properties is bound, or
      any permit, franchise, judgment, decree, statute, rule, regulation, or other
      law
      applicable to the Subscriber or the business or properties of the
      Subscriber.

    

    (c) No
      Litigation.
      There
      is no litigation, investigation or other proceeding pending or, to the
      Subscriber’s knowledge, threatened against the Subscriber or any of the
      Subscriber’s Affiliates which, if adversely determined, would adversely affect
      the Subscriber’s business or financial condition or the Subscriber’s ability to
      perform the Subscriber’s obligations under this Agreement or the Partnership
      Agreement.

    

    (d) Consents.
      No
      consent, approval or authorization of, or filing, registration or qualification
      with, any court or governmental or regulatory department, agency or authority
      having jurisdiction over the Subscriber or its business or properties is
      required for the execution and delivery of this Agreement or the Partnership
      Agreement by the Subscriber or the performance of the Subscriber’s obligations
      and duties hereunder or thereunder.

     

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    (e) Accredited
      Investor.
      The
      Subscriber is an “accredited investor” as defined in Rule 501(a) of
      Regulation D promulgated under the Securities Act, and the certifications
      made, and information furnished, by the Subscriber in Appendix
      I in
      connection with this subscription are true and complete.

    

    (f) Investment
      Intent.
      The
      Subscriber is acquiring the Interest for its own account for investment, and
      not
      with a view to any distribution, resale, subdivision, or fractionalization
      thereof in violation of the Securities Act or any other applicable domestic
      or
      foreign securities law, and the Subscriber has no present plans to enter into
      any contract, undertaking, agreement, or arrangement for any such distribution,
      resale, subdivision, or fractionalization.

     

    (g) Access.
      The
      Subscriber has carefully reviewed and is familiar with the terms of each
      Subscriber Agreement and the confidential Informational Memorandum relating
      to
      Interests in the Partnership (the “Informational
      Memorandum”),
      a
      copy of each of which has been provided to the Subscriber. The General Partner
      has made available to the Subscriber or its representatives all agreements,
      documents, records, and books that the Subscriber or its representatives have
      requested relating to an investment in the Partnership. The Subscriber has
      had a
      full opportunity to ask questions of and receive answers from the Partnership
      or
      a Person acting on behalf of the Partnership, or the General Partner, concerning
      the terms and conditions of this investment, and all questions asked by the
      Subscriber have been adequately answered to the full satisfaction of the
      Subscriber.

     

    (h) Illiquidity.
      The
      Subscriber understands that substantial restrictions exist on transferability
      of
      the Interest and any portion thereof in the Partnership, that no market for
      resale of any such interest exists or is expected to develop, and that the
      Subscriber may not be able to liquidate its investment in the Partnership.
      The
      Subscriber represents and warrants further that it has no contract,
      understanding, agreement or arrangement with any person to sell or transfer
      or
      pledge to such person or anyone else any of the Interest for which the
      Subscriber hereby subscribes (in whole or in part); and the Subscriber
      represents and warrants that it has no present plans to enter into any such
      contract, undertaking, agreement or arrangement. The Subscriber understands
      that
      the Interests cannot be sold or transferred without the prior written consent
      of
      the General Partner, which consent may be withheld in its sole and absolute
      discretion and which consent will be withheld if any such transfer could cause
      the Partnership to become subject to regulation under federal law as an
      investment company or would subject the Partnership to adverse tax consequences.
      The Subscriber understands that any instruments representing the Interest will
      bear legends restricting the transfer thereof. 

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    (i) Awareness
      of Risks; Taxes.
      The
      Subscriber understands that investment in the Partnership entails a very high
      degree of risk and understands fully the risks associated with the operation
      of
      the Partnership and the Subscriber's investment in the Partnership and has
      received and carefully reviewed all of the risk factors and other information
      contained in the Informational Memorandum. The Subscriber represents and
      warrants that it is aware (i) that the Partnership has no operating history;
      (ii) that the Interests involve a substantial degree of risk of loss of the
      Subscriber’s entire investment and that there is no assurance of any return on
      such investment; and (iii) that any federal and/or state income tax benefits
      which may be available to the Subscriber may be lost through the adoption of
      new
      laws or regulations, to changes to existing laws and regulations and to changes
      in the interpretation of existing laws and regulations. The Subscriber further
      represents that it is relying solely on its own conclusions or the advice of
      its
      own counsel or investment representative with respect to tax aspects of any
      investment in the Partnership. 

     

    (j) Capacity
      to Contract.
      If the
      Subscriber is an individual, the Subscriber represents that he or she is over
      21
      years of age and has the capacity to execute, deliver and perform this
      Subscription Agreement and the Partnership Agreement. If the Subscriber is
      not
      an individual, the Subscriber represents and warrants that it is a corporation,
      partnership, association, joint stock company, trust or unincorporated
      organization, and was not formed for the specific purpose of acquiring an
      Interest.

    

    (k) Economic
      Loss, Suitability and Sophistication.
      The
      Subscriber (i) is able to bear the economic risk of losing its entire investment
      in the Partnership and (ii) is able to bear such risk for an indefinite period
      of time. The Subscriber has evaluated the risks involved in investing in the
      Interest and has determined that the Interest is a suitable investment for
      the
      Subscriber. The Subscriber's overall commitment to investments which are not
      readily marketable is not disproportionate to its net worth. The Subscriber's
      investment in the Partnership will not cause such overall commitment to become
      excessive. The Subscriber has such knowledge and experience in financial and
      business matters that it is capable of evaluating the risks and merits of this
      investment.

    

    (l) Transfer
      and Transferability.
      The
      Subscriber acknowledges and agrees that, based in part upon its representations
      contained herein and in reliance upon applicable exemptions, the purchase and
      sale of the Interest has not been and will not be registered under the
      Securities Act or the securities laws of any other domestic or foreign
      jurisdiction. Accordingly, the Interest may not be offered for sale, sold,
      pledged, hypothecated, or otherwise transferred in whole or in part except
      in
      compliance with all applicable laws, including securities laws. The Subscriber
      acknowledges that it has been advised that the Partnership has no obligation
      and
      does not intend to cause the Interest to be registered under the Securities
      Act
      or any other securities laws or to comply with any exemption under the
      Securities Act or any other securities law which would permit the Subscriber
      to
      sell the Subscriber's interest in the Partnership. The Subscriber also
      understands that sales or transfers of the Interest are further restricted
      by
      the provisions of the Partnership Agreement.

    

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    (m) Principal
      Place of Business.
      The
      address set forth on the Subscriber's signature page to this Agreement is the
      Subscriber's principal place of business (or residence if a natural Person),
      and
      the Subscriber has no present intention of moving its principal place of
      business (or residence if a natural Person) to any other domestic or foreign
      jurisdiction.

    

    (n) Benefit
      Plan Investor Status.
      The
      Subscriber is not a “benefit plan investor” (as such term is defined in 29
      C.F.R. §2510.3-101(f)(2)). 

    

    (o) Investment
      Company Act. (i)
      The
      Subscriber understands that the Partnership has not been registered as an
      investment company under the Investment Company Act in reliance upon an
      exemption from registration thereunder, and it agrees that the Interest that
      it
      is acquiring may not be sold, offered for sale, transferred, pledged,
      hypothecated, or otherwise disposed of in any manner that would require the
      Partnership to register as an investment company under the Investment Company
      Act. The Subscriber has been advised that the Partnership has no obligation
      and
      does not intend to register any Interests under the Investment Company Act.
      The
      investment of the Subscriber in the Partnership will not represent more than
      40%
      of the Subscriber’s total assets or its committed capital. The Subscriber will
      not maintain a separate investment account with respect to its investment in
      the
      Partnership whereby each of its partners, shareholders, trustees or other owners
      will have the right to elect not to participate in such investment, except
      where
      such election will require the consent of all persons or the consent of the
      Subscriber’s general partner (or other controlling person).

    

    (ii) Beneficial
      ownership by the Subscriber of its Interest does not constitute beneficial
      ownership by more than one person for purposes of Section 3(c)(1) of the
      Investment Company Act. The Subscriber shall deliver promptly to the General
      Partner any information or documents that the General Partner may reasonably
      request to verify the foregoing and to ensure compliance with the Investment
      Company Act and the availability of an exemption of the Partnership from
      registration thereunder.

    

    (p) Investment
      Advisers Act.
      The
      Subscriber understands that neither the Partnership, the General Partner nor
      the
      GP Company has registered as an investment adviser under the Investment Advisers
      Act in reliance upon an exemption from registration provided by Section
      203(b)(3) thereunder. In particular and without limitation, the Subscriber
      is
      not an investment company registered under the Investment Company Act or any
      entity that has elected to be a business development company (as defined in
      Section 202(a)(22) of the Investment Advisers Act) pursuant to Section 54
      of the Investment Company Act (and has not withdrawn such election), and the
      Subscriber covenants that it will not transfer, pledge, hypothecate or otherwise
      dispose of its Interest to any such investment company or business development
      company.

     

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    (q) No
      Investment Advice.
      The
      Subscriber acknowledges and agrees that, pursuant to the Partnership Agreement,
      the General Partner has the exclusive power and discretion to make all
      investment decisions on behalf of the Partnership, subject to the terms of
      the
      Partnership Agreement. Accordingly, the Subscriber acknowledges that neither
      the
      General Partner nor any Affiliate thereof has rendered or will render any
      investment advice or securities valuation advice to the Subscriber, and that
      the
      Subscriber is neither subscribing for nor acquiring any interest in the
      Partnership in reliance upon, or with the expectation of, any such
      advice.

    

    (r) Tax
      Year.
      Unless
      otherwise specified on the Subscriber's signature page to this Agreement, the
      Subscriber's tax year ends on December 31 of each year.

    

    (s) Withholding.
      The
      information provided by the Subscriber on Form W-8 or Form W-9, as applicable,
      in Appendix
      I
      and
      delivered to the General Partner in connection with this Agreement is true
      and
      complete.

    

    (t) Publicly
      Traded Partnerships.
      Either
      the Subscriber is not a partnership, S corporation, or grantor trust for U.S.
      federal income tax purposes, or, if the Subscriber is a partnership, S
      corporation, or grantor trust, the Subscriber was not formed with, and will
      not
      be used for, a principal purpose of permitting the Partnership to satisfy the
      100 partner limitation contained in Section 1.7704-1(h)(1)(ii) of the Treasury
      Regulations promulgated under the Code.

    

    (u) Compliance
      with Anti-Terrorism and Anti-Money Laundering Laws and
      Regulations.
      The
      Subscriber does hereby represent and warrant to the Partnership and to the
      General Partner that it and all of its beneficial owners (if the Subscriber
      is
      an entity) are in compliance with all laws, statutes, rules and regulations
      relating to anti-terrorism or anti-money laundering laws of any federal, state
      or local government in the United States of America applicable to such person(s)
      or entity(ies), including without limitation, the USA PATRIOT Act, Pub. L,
      No.
      107-56 (October 26, 2001), Executive Order No. 13224, 66 Fed. Reg. 49079
      (Sept. 23, 2001) and all other similar requirements contained in the rules
      and regulations of the Office of Foreign Asset Control (“OFAC”),
      the
      Department of Treasury and in any enabling legislation or other Executive Orders
      in respect thereof. The Subscriber further represents and warrants to the
      Partnership and the General Partner that neither it nor any of its beneficial
      owners (if the Subscriber is an entity) is listed on the Specially Designated
      Nationals and Blocked Persons List maintained by OFAC and/or on any other lists
      of terrorists or terrorist organizations maintained and made publicly available
      by any governmental department, agency, or other entity.

    

    (v) Eligibility
      and compliance with federal oil and gas lease
      regulation. The
      Subscriber is eligible to acquire and hold an interest in federal oil and gas
      leases and is in compliance with the certification requirements under 43 CFR
      Parts 12 and 18 to the extent applicable to it.

     

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    3.2 Effect
      and Time of Representations and Covenants.
      The
      Subscriber's representations and agreements set forth in this Agreement herein
      (including the information set forth on the signature page hereto) and the
      representations and information furnished in Appendix I
      are
      true, and have been complied with, as of the date of the Subscriber's execution
      of this Agreement and shall be true, and shall have been complied with, as
      of
      the Closing Date. The Subscriber acknowledges that the Partnership, the General
      Partner and each respective partner thereof, has relied and will rely upon
      the
      representations and agreements of, and information furnished by, the Subscriber
      set forth in this Agreement and Appendix
      I
      and that
      all such representations, agreements, and furnished information shall survive
      the Closing Date and the execution of the Partnership Agreement.

    

    ARTICLE
      IV

    Representations
      and Covenants of the Partnership and General Partner

    

    4.1 Representations
      and Covenants.
      The
      Partnership and the General Partner hereby jointly and severally represent
      and
      warrant to, and agree with, the Subscriber as of the Closing Date as
      follows:

    

    (a) Power
      and Authority.
      The
      Partnership and the General Partner have all requisite power, authority and
      legal capacity to enter into each Subscriber Agreement to which it is a party,
      to perform its respective obligations under each such Subscriber Agreement,
      and to consummate the transactions that are the respective subjects of each
      such Subscriber Agreement. The signature of the respective individual signing
      any Subscriber Agreement on behalf of the Partnership or the General Partner
      is
      binding upon the Partnership or the General Partner, as the case may be. All
      actions required hereunder to be taken by the General Partner and the
      Partnership as a condition to the issuance and sale of the limited partnership
      interests purchased by the Subscriber have been taken; and each Limited Partner
      has been admitted as a limited partner of the Partnership in compliance with
      the
      Act and is entitled to all the benefits of a limited partner under the
      Partnership Agreement on the terms set forth in the Partnership Agreement.
      This
      Agreement has been duly authorized, executed and delivered by the Partnership
      and the General Partner and, upon due authorization, execution and delivery
      by
      the Subscriber, will constitute the valid and legally binding agreement of
      the
      Partnership and the General Partner, enforceable in accordance with its terms
      against the Partnership and the General Partner, except as such enforceability
      may be limited by (A) bankruptcy, insolvency, reorganization, fraudulent
      conveyance, moratorium or other laws of general application relating to or
      affecting the enforcement of creditors’ rights and remedies, as from time to
      time may be in effect, (B) application of equitable principles (regardless
      of
      whether such enforceability is considered in a proceeding in equity or at law)
      and (C) considerations of public policy.

     

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    (b) Compliance
      with Laws and Other Instruments.
      Neither
      the General Partner nor the Partnership is in violation or in default (nor
      has
      any event occurred that with notice, lapse of time, or both, would constitute
      a
      default) in the performance of any obligation, agreement or condition contained
      in the Subscriber Agreements, or any other agreement or any license, permit,
      franchise, certificate or mortgage to which any of them is a party or by which
      any of them is bound or to which the properties of any of them are subject.
      The
      execution and delivery of the Subscriber Agreements by or on behalf of the
      Partnership or the General Partner and the consummation by the Partnership
      or
      the General Partner of the transactions contemplated by the Subscriber
      Agreements (including without limitation the offer and sale of Interests) do
      not
      and will not (i)
      conflict with or result in any violation of or default under any provision
      of
      the respective certificate of limited partnership, partnership agreement, or
      other organization document of the Partnership or the General Partner or any
      agreement, certificate, or other instrument (including without limitation any
      indenture, mortgage, deed of trust, credit agreement, note or other evidence
      of
      indebtedness, lease, or license) to which the Partnership or the General Partner
      is a party or by which the Partnership or any of its properties is bound, or
      any
      permit, franchise, order, writ, judgment, decree, statute, rule, regulation,
      or
      other law applicable to the Partnership or the General Partner or their
      respective business or properties, (ii)
      except
      as provided under the terms of the Partnership Agreement, result in the creation
      of any mortgage, lien, encumbrance or charge upon any of the properties or
      assets of the General Partner or the Partnership or (iii) assuming the
      representations set forth in Section 3.1 and those made by any other
      subscriber in any other subscription agreement for the purchase of an Interest
      are true, require the filing or registration with, or the approval,
      authorization, license, or consent of, any court or governmental or regulatory
      department, agency, or authority having jurisdiction over the Partnership or
      its
      business or properties which has not already been duly and validly given or
      obtained or which is required in accordance with the next sentence. As soon
      as
      practicable following the Closing Date, but in all events within the periods
      prescribed by applicable law, the Partnership and the General Partner will
      file
      a Form D with the Securities and Exchange Commission and any applicable state
      securities regulatory authorities and will file such other notices and reports
      as are required to be filed under applicable state securities laws in order
      to
      qualify for exemptions applicable to the offer or sale of interests in the
      Partnership.

    

    (c) Offer
      of Interests.
      Assuming the representations set forth in Section 3.1 and those made by any
      other subscriber in any other subscription agreement for the purchase of an
      Interest are true, neither the Partnership nor the General Partner nor anyone
      acting on their respective behalves has taken or will take any action that
      would
      subject the issuance or sale of any interest in the Partnership acquired by
      the
      Subscriber to the registration and prospectus delivery provisions of the
      Securities Act.

    

    (d) Investment
      Company Act.
      Assuming the representations set forth in Section 3.1 and those made by any
      other subscriber in any other subscription agreement for the purchase of an
      Interest are true, the Partnership is not an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment
      Company Act. 

     

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    (e) Jurisdictions.
      Each of
      the Partnership and the General Partner is duly qualified to transact business,
      and is in good standing, in every jurisdiction in which the character of the
      business respectively conducted by it or permitted to be conducted by it makes
      such qualification necessary, except where the failure to be so qualified would
      not have a material adverse effect on the operations, business, or affairs
      of
      the Partnership.

    

    (f) Proceedings.
      No
      action, proceeding, or investigation is pending or, to the knowledge of the
      General Partner, threatened against the Partnership, the General Partner, any
      Affiliate of the General Partner, or the Management Principal that
      (i) questions or challenges the validity or purpose of the Partnership,
      (ii) could reasonably be expected to have a material adverse effect on the
      operations, business, or affairs of the Partnership, or (iii) claims or
      alleges any fraud or misrepresentation under, or any violation of, any federal
      or state securities law, rule, or regulation. There are no other actions,
      proceedings, or investigations pending or, to the knowledge of the General
      Partner, threatened against or affecting the Partnership or the General
      Partner.

    

    4.2 Effect
      and Time of Representations.
      The
      representations and agreements of the Partnership and the General Partner set
      forth in this Agreement are true, and have been complied with, as of the Closing
      Date. The Partnership and the General Partner acknowledge that the Subscriber
      has relied and will rely upon the representations and agreements of the
      Partnership or the General Partner set forth in this Agreement, and that all
      such representations and agreements shall survive the Closing Date and the
      execution of the Partnership Agreement.

    

    ARTICLE
      V

    Power
      of Attorney

    

    5.1 Power
      of Attorney.
      The
      Subscriber hereby irrevocably constitutes and appoints the General Partner,
      with
      full power of substitution, the true and lawful attorney-in-fact and agent
      of
      the Subscriber, to execute, acknowledge, verify, swear to, deliver, record
      and
      file, in its or its assignee’s name, place and stead, all in accordance with the
      terms of this Agreement, all instruments, documents and certificates that may
      from time to time be required by the laws of the United States of America,
      the
      State of Delaware, any other jurisdiction in which the Partnership conducts
      or
      may conduct its affairs in the future, or any political subdivision or agency
      thereof to effectuate, implement and continue the valid existence and affairs
      of
      the Partnership, including, without limitation, the power and authority to
      verify, swear to, acknowledge, deliver, record and file:

    

    (a)  all
      certificates and other instruments, including any amendments to the Certificate
      of Limited Partnership, that the General Partner deems necessary or appropriate
      to form, qualify or continue the Partnership as a limited partnership (or a
      partnership in which the limited partners have limited liability) in the State
      of Delaware and all other jurisdictions in which the Partnership conducts or
      plans to conduct its affairs;

     

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    (b)  the
      Partnership Agreement and any amendments to the Partnership Agreement or any
      other agreement or instrument that the General Partner deems necessary or
      appropriate to (i) effect the addition, substitution or removal of any
      Limited Partner or General Partner pursuant to the Partnership Agreement or
      (ii) effect any other amendment or modification to the Partnership
      Agreement, but only if such amendment or modification is duly adopted in
      accordance with the terms of the Partnership Agreement;

    

    (c)  all
      conveyances and other instruments that the General Partner deems necessary
      or
      appropriate to reflect the dissolution and termination of the Partnership
      pursuant to the terms of the Partnership Agreement, including the writing
      required by the Act to cancel the Certificate of Limited
      Partnership;

    

    (d)  all
      instruments relating to Transfers of Interests of Limited Partners or to the
      admission of any substitute Limited Partner; 

    

    (e)  certificates
      of assumed name and such other certificates and instruments as may be necessary
      or appropriate under the fictitious or assumed name statutes from time to time
      in effect in the State of Delaware and all other jurisdictions in which the
      Partnership conducts or plans to conduct its affairs;

    

    (f)  any
      amendment to or modification or restatement of the Partnership Agreement, and
      any other action, agreement, certificate, report, consent, instrument, filing,
      or writing made by or relating to the Partnership, as the General Partner or
      its
      legal counsel deems reasonably necessary to ensure that the Partnership remains
      qualified for any applicable exemption under the Investment Company Act,
      provided such actions are taken in compliance with the terms and conditions
      of
      the Partnership Agreement; and

    

    (g)  any
      agreement, certificate, report, consent, instrument, filing, or writing that
      the
      General Partner or its legal counsel deems necessary, desirable or appropriate
      for pursuing or effecting any rights or remedies available under the Partnership
      Agreement or otherwise with respect to a Defaulting Limited
      Partner.

    

    5.2 Other
      Provisions.
      This
      power of attorney shall terminate upon the bankruptcy or dissolution of the
      General Partner. The power of attorney granted herein shall be deemed to be
      coupled with an interest, shall be irrevocable, shall survive and not be
      affected by the death, liquidation, dissolution, bankruptcy or legal disability
      of the Subscriber or the transfer of all or any part of the Subscriber’s
      interest in the Partnership and shall extend to its successors and assigns;
      and
      may be exercisable by such attorney-in-fact and agent for the Subscriber by
      listing the Subscriber’s name on any such instrument and executing such
      instrument acting as attorney-in-fact. Any person dealing with the Partnership
      may conclusively presume and rely upon the fact that any instrument referred
      to
      above, executed by such attorney-in-fact and agent, is authorized, regular
      and
      binding, without further inquiry. If required, the Subscriber shall execute
      and
      deliver to the General Partner within five days after the receipt of a request
      therefor, such further designations, powers of attorney or other instruments
      as
      the General Partner shall reasonably deem necessary to accomplish the purposes
      of this Article V.

     

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    ARTICLE
      VI

    Miscellaneous

    

    6.1 Amendments.
      Except
      as provided in Section 1.2 hereof with respect to a reduction of the
      Subscriber’s Commitment by the General Partner, this Agreement may be modified
      or amended only with the written consent of the Partnership, the General
      Partner, and the Subscriber.

    

    6.2 Notices.
      All
notices,
      requests, demands and other communications hereunder shall be in writing and
      shall be deemed to have been duly given to any party when delivered in person,
      by registered or certified mail, overnight mail or courier or by facsimile
      or
      other electronic means (i) to the Subscriber to such Subscriber’s address,
      electronic mail address or telecopy number set forth on the signature page
      of
      this Subscription Agreement, or to such other address, electronic mail address
      or telecopy number as the Subscriber shall have furnished to the Partnership
      in
      writing, with copies to such other address or addresses or telecopy number
      or
      numbers as the Subscriber shall have furnished to the General Partner in
      writing, and (ii) to the Partnership to the General Partner at 4605 Post
      Oak Place, Suite 100, Houston, Texas 77027, Attn: Brad Bynum, telecopy number
      (713) 333-0976, or to such other address or addresses, telecopy number or
      numbers, as the Partnership shall have furnished to the Subscriber in writing,
      provided that any notice to either party shall be effective only if and when
      received by such party.

    

    6.3 Governing
      Law; Jurisdiction; Venue.
      This
      Agreement shall be enforced, governed, and construed in all respects in
      accordance with the laws of the State of Delaware , excluding any
      conflict-of-laws rule or principle that might refer the construction or
      interpretation of this Agreement to the laws of another State. Any action or
      proceeding against the parties relating in any way to this Agreement may be
      brought and enforced in the courts of the State of Texas located in Harris
      County and, to the extent subject matter jurisdiction exists therefor, in the
      courts of the United States for the Southern District of Texas, and the parties
      irrevocably submit to the exclusive jurisdiction of the foregoing courts in
      respect of any such action or proceeding. The parties irrevocably waive, to
      the
      fullest extent permitted by law, any objection that they may now or hereafter
      have to the laying of venue of any such action or proceeding in the courts
      of
      the State of Texas located in Harris County or the United States District Court
      for the Southern District of Texas, and any claim that any such action or
      proceeding brought in any such court has been brought in an inconvenient
      forum.

     

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    6.4 Assignment;
      Binding Effect.
      This
      Agreement and the rights and obligations set forth herein shall be binding
      upon,
      and shall inure to the benefit of, the Subscriber, the Partnership, the General
      Partner, and their respective successors and permitted assigns. Each provision
      of this Agreement shall be considered severable and if for any reason any
      provision that is not essential to the effectuation of the basic purposes of
      this Agreement is determined by a court of competent jurisdiction to be invalid
      or unenforceable under applicable law, such invalidity shall not impair the
      operation of or affect those provisions of this Agreement that are valid. In
      that case, this Agreement shall be construed so as to limit any term or
      provision so as to make it enforceable or valid within the requirements of
      any
      applicable law, and in the event such term or provision cannot be so limited,
      this Agreement shall be construed to omit such invalid or unenforceable
      provisions. The Subscriber may not assign any of its rights or obligations
      under
      this Agreement without the prior written consent of the General
      Partner.

    

    6.5 Entire
      Agreement.
      This
      Agreement, Appendix
      I
      hereto,
      and any other agreements between the General Partner or the Partnership and
      the
      Subscriber constitute the entire agreement, and supersedes all prior agreements
      or understandings, among the parties hereto with respect to the subject matter
      hereof.

    

    6.6 Construction.
      

    

    (a) Headings.
      Unless
      the context requires otherwise: (i) references to Articles and Sections
      refer to Articles and Sections of this Agreement; and (ii) references to
      Appendices are to the Appendices attached to this Agreement, each of which
      is
      made a part hereof for all purposes. As used in this Agreement, the words
“herein,” “hereof,” “hereto,” or derivatives shall refer to this entire
      Agreement.

    

    (b) Gender
      and Number.
      Wherever from the context it appears appropriate, each term stated in either
      the
      singular or the plural shall include the singular and the plural, and pronouns
      stated in either the masculine or the neuter gender shall include the masculine,
      the feminine and the neuter. As used in this Agreement, the word “or” shall mean
“and/or.”

    

    6.7 Counterparts;
      Facsimile.
      This
      Agreement may be executed in one or more counterparts, all of which shall
      constitute one and the same instrument. Any counterparts of this Agreement
      or
      any signatures thereon delivered by facsimile transmission shall be deemed
      an
      original executed document for all purposes hereof.

    

    6.8 Termination;
      Effect of Termination.
      At
      Subscriber’s election, the obligations of Subscriber will terminate if the
      Closing Date has not occurred on or before April 30, 2006; provided, Subscriber
      will be deemed to have waived its right to terminate under this Section 6.8
      unless the General Partner has received Subscriber’s written election to
      terminate within the 30-day period following such date. Notwithstanding the
      foregoing, termination will not affect any obligation or liability arising
      from
      a willful breach of representation or breach of covenant that exists or occurs
      prior to such termination.

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the Subscriber has executed this Subscription Agreement as
      of
      this 6 day of April, 2006.

    

    

      
        	
                Commitment:

              	 
	 	
                PETRO
                  RESOURCES CORPORATION

              
	
                U.S.$8,000,000

              	
                dba
                  PRCT, Inc.

              
	 	 
	 	 
	 	
                By: /s/
                  Wayne P.
                  Hall                                                 
                  

              
	 	
                Wayne
                  P. Hall

              
	 	
                President
                  & Chief Executive Officer

              
	 	 
	 	
                Address
                  of Subscriber:

              
	 	
                5100
                  Westheimer

              
	 	
                Suite
                  200

              
	 	
                Houston,
                  Texas 77056

              
	 	 
	 	
                Telephone:
                  (713) 968-9282

              
	 	
                Email:
                  whall@petroresourcescorp.com

              
	 	
                Fax:
                  (713) 968-9283

              
	 	
                Attn:
                  Wayne P. Hall

              
	 	 
	 	
                Name
                  and address of trustee, if applicable:

              
	 	
                _______________________________________

                _______________________________________

                _______________________________________

                _______________________________________
 

      

    

    
      	
              Tax
                year end if not December 31 
                __________________________________________     

            	 
	 	 
	
              Check
                box if Subscriber is not
                a
                resident of the United States:

            	
              o

            
	 	 
	
              If
                Subscriber is not a resident of the United States, state the residence
                of
                the Subscriber: 

              __________________________________

            	 
	 	 

    

     

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned have executed and accepted this Subscription
      Agreement as of this 21st
      day of
      April, 2006.

     

    

      The
        Partnership:

      

      
        	
                Hall-Houston
                  Exploration II, L.P.

              
	 	 	 
	
                By:

              	
                HHEP
                  GP II, L.P.,

              
	 	
                its
                  General Partner

              
	 	 	 
	 	
                By:

              	
                Hall-Houston
                  Exploration Partners,

              
	 	 	
                L.L.C.,
                  its
                  General Partner

              
	 	 	 
	 	
                By:

              	
                /s/
                  Gary L. Hall

              
	 	
                Name:

              	
                Gary
                  L. Hall

              
	 	
                Title:

              	
                President

              

      

      

      

      The
        General Partner:

      

      
        	
                HHEP
                  GP II, L.P.

              
	 	 	 
	
                By:

              	
                Hall-Houston
                  Exploration Partners, L.L.C.,

              
	 	
                its
                  General Partner

              
	 	 	 
	 	
                By:

              	
                /s/
                  Gary L. Hall

              
	 	
                Name:

              	
                Gary
                  L. Hall

              
	 	
                Title:

              	
                President

              

      

      
 

    

    Address
      of the Partnership and General Partner:

    

    4605
      Post
      Oak Place, Suite 100

    Houston,
      Texas 77027

    Fax:
      (713) 333-0976

    Attn:
      Brad Bynum

    

    With
      copy
      to:

    

    Vinson
      & Elkins L.L.P.

    1001
      Fannin

    2300
      First City Tower

    Houston,
      Texas 77002-6760

    Fax:
      713-615-5531

    Attn:
      T.
      Mark Kelly, Esq.

     

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    APPENDIX
      I

    

    Accredited
      Investor Certificate

    and
      Forms W-8 and W-9

    

    PETRO
      RESOURCES CORPORATION dba PRCT, INC.

    (Print
      or
      Type Subscriber's Name)     

    

    

    CERTIFICATION
      OF STATUS 

    

    The
      undersigned (“Undersigned”)
      is a
      party to the Subscription Agreement (the “Subscription
      Agreement”)
      among
      Hall-Houston Exploration II, L.P.
      (the
“Partnership”),
      HHEP
      GP II, L.P.
      (the
“General
      Partner”),
      and
      the subscriber identified above (“Subscriber”)
      and
      hereby certifies, that1 :

    

    1. Regulation
      D Matters

    

    Undersigned
      is an “Accredited Investor” as such term is defined in Rule 501(a) of
      Regulation D promulgated under the Securities Act of 1933, (the
“Act”).
      Undersigned meets each of the following “Accredited Investor” categories marked
      with an “X”:

    

    
      	 	
              _____

            	
              (i)

            	
              a
                bank as defined in Section 3(a)(2) of the Act, or a savings and loan
                association or other institution as defined in Section 3(a)(5)(A)
                of the
                Act, whether acting in its individual or fiduciary
                capacity;

            

    

    

    
      	 	
              _____

            	
              (ii)

            	
              a
                broker or dealer registered pursuant to Section 15 of the Securities
                Exchange Act of 1934;

            

    

    

    
      	 	
              _____

            	
              (iii)

            	
              an
                insurance company as defined in Section 2(13) of the
                Act;

            

    

    

    
      	 	
              _____

            	
              (iv)

            	
              an
                investment company registered under the Investment Company Act of
                1940
                (the “Investment
                Company Act”);

            

    

    

    
      	 	
              _____

            	
              (v)

            	
              a
                business development company as defined in Section 2(a)(48) of the
                Investment Company Act;

            

    

    

    
      	 	
              _____

            	
              (vi)

            	
              a
                Small Business Investment Company licensed by the U.S. Small Business
                Administration under Section 301(c) or (d) of the Small Business
                Investment Act of 1958, as amended;

            

    

    

     

    ______________

     1Terms
      not
      otherwise defined herein shall have the same meanings specified in the
      Subscription Agreement.

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        Appendix
          I

        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    
      	 	
              _____

            	
              (vii)

            	
              a
                plan established and maintained by a state, its political subdivisions,
                or
                any agency or instrumentality of a state or its political subdivisions,
                for the benefit of its employees, if such plan has total assets in
                excess
                of $5,000,000;

            

    

    

    
      	 	
              _____

            	
              (viii)

            	
              an
                employee benefit plan within the meaning of Title I of the Employee
                Retirement Income Security Act of 1974, as amended (“ERISA”),
                if either

            

    

    

    
      	 	 	
              _____

            	
              (A)

            	
              the
                investment decision is made by a plan fiduciary, as defined in Section
                3(21) of ERISA, which is either a bank, savings and loan association,
                insurance company or registered investment
                adviser,

            

    

    

    
      	 	 	
              _____

            	
              (B)

            	
              the
                employee benefit plan has total assets in excess of $5,000,000,
                or

            

    

    

    
      	 	 	
              _____

            	
              (C)

            	
              the
                plan is a self-directed plan with investment decisions made solely
                by
                Persons that are Accredited
                Investors;

            

    

    

    
      	 	
              _____

            	
              (ix)

            	
              a
                private business development company as defined in Section 202(a)(22)
                of the Investment Advisers Act of
                1940;

            

    

    

    
      	 	
                  X   

            	
              (x)

            	
              an
                organization described in Section 501(c)(3) of the Internal Revenue
                Code
                of 1986, as amended (the “Code”),
                a corporation, a Massachusetts or similar business trust, or a
                partnership, in each case, not formed for the specific purpose of
                making
                an investment in the Partnership, and in each case, with total assets
                in
                excess of $5,000,000;

            

    

    

    
      	 	
              _____

            	
              (xi)

            	
              a
                director, executive officer, or general partner of the issuer of
                the
                limited partnership interests being offered or sold, or a director,
                executive officer, or general partner of a general partner of that
                issuer;

            

    

    

    
      	 	
              _____

            	
              (xii)

            	
              a
                natural Person whose individual net worth, or joint net worth with
                his or
                her spouse, at the time of his or her purchase exceeds
                $1,000,000;

            

    

     

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        Appendix
          I

        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    
      	 	
              _____

            	
              (xiii)

            	
              a
                natural Person who has an individual income in excess of $200,000
                in each
                of the two most recent years or joint income with that Person's spouse
                in
                excess of $300,000 in each of those years and has a reasonable expectation
                of reaching the same income level in the current
                year;

            

    

    

    
      	 	
              _____

            	
              (xiv)

            	
              a
                trust, with total assets in excess of $5,000,000, not formed for
                the
                specific purpose of making an investment in the Partnership whose
                purchase
                of the limited partnership interests offered is directed by a
                sophisticated Person as described in Rule 506(b)(2)(ii) of
                Regulation D; or

            

    

    

    
      	 	
              _____

            	
              (xv)

            	
              an
                entity in which all of the equity owners are Accredited
                Investors.

            

    

    

    2. Qualified
      Purchaser Status.
      (Please
      check either (a) or (b) below).

    

    
      	 	
              _____

            	
              (a)

            	
              Undersigned
                is a "Qualified Purchaser" as such term is defined in Section 2(a)(51)
                of
                the Investment Company Act and the rules thereunder. Undersigned
                meets
                each of the following "Qualified Purchaser" categories marked with
                an "X"
                (please mark all
                categories that apply):

            

    

    

    
      	 	 	
              _____

            	
              (i)

            	
              a
                natural person (including any person who holds a joint, community
                property, or other similar shared ownership interest in an issuer
                that is
                excepted under Section 3(c)(7) of the Investment Company Act with
                that
                person's Qualified Purchaser spouse) who owns not less than $5,000,000
                in
                investments2 ;

            

    

     

    ________________

            2The
        term
        "investments" means:

      
        	 	
                (1)

              	
                Securities
                  (as defined in Section 2(a)(1) of the Securities Act), other than
                  securities of an issuer that controls, is controlled by, or is
                  under
                  common control with, the Undersigned that owns such securities,
                  unless the
                  issuer of such securities is:

              

      

      
        	 	
                (a)

              	
                an
                  investment company, a company that would be an investment company
                  but for
                  the exclusion provided by Sections 3(c)(1) through 3(c)(9) of the
                  Investment Company Act or Rule 3a-6 or 3a-7 under the Investment
                  Company
                  Act, or a commodity pool;

              

      

      
        	 	
                (b)

              	
                a
                  company that files periodic reports under Section 13 or 15(d) of
                  the
                  Exchange Act, or has a class of securities listed on a "designated
                  offshore securities market" as defined in Regulation S under the
                  Securities Act; or

              

      

      
        	 	
                (c)

              	
                a
                  company with shareholders' equity of not less than $50,000,000
                  (determined
                  in accordance with generally accepted accounting principles) as
                  reflected
                  on the company's most recent financial statements, provided that
                  such
                  financial statements present the information as of a date within
                  16 months
                  preceding the date on which the Subscriber acquires an interest
                  in the
                  Partnership.

              

      

      
      

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Subscription
            Agreement

          Appendix
            I

          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

      _________________

      
        	 	
                (2)

              	
                Real
                  estate held for investment purposes. Real estate shall not be considered
                  to be held for investment purposes if it is used by the Undersigned
                  or a
                  sibling, spouse or former spouse, or a direct lineal descendant
                  or
                  ancestor by birth or adoption of the Undersigned, or a spouse of
                  the
                  descendent or ancestor (a "Related
                  Person"),
                  or by any owner of the Undersigned if the Undersigned is a company
                  described in item 2(a)(ii) of this Appendix or any Related Person
                  of such
                  owner, for personal purposes or as a place of business, or in connection
                  with the conduct of the trade or business of the Undersigned or
                  a Related
                  Person (including an owner of the Undersigned or any Related Person
                  of
                  such owner), provided
                  that real estate owned by the Undersigned may be deemed to be held
                  for
                  investment purposes if the Undersigned is engaged primarily in
                  the
                  business of investing, trading or developing real estate. Residential
                  real
                  estate shall not be deemed to be used for personal purposes if
                  deductions
                  with respect to such real estate are not disallowed by Section
                  280A of the
                  Code.

              

      

      
        	 	
                (3)

              	
                Commodity
                  futures contracts, options on commodity futures contracts, and
                  options on
                  physical commodities that are traded on or subject to the rules
                  of any
                  contract market designated for trading such transactions under
                  the
                  Commodity Exchange Act or of any board of trade or exchange outside
                  the
                  United States contemplated in Part 30 of the rules under the Commodity
                  Exchange Act ("Commodity
                  Interests")
                  that are held for investment purposes. A Commodity Interest owned,
                  or a
                  financial contract entered into, by the Undersigned may be deemed
                  to be
                  held for investment purposes if the Undersigned is engaged primarily
                  in
                  the business of investing, reinvesting or trading in Commodity
                  Interests,
                  Physical Commodities or financial contracts in connection with
                  such
                  business.

              

      

      
        	 	
                (4)

              	
                Physical
                  commodities with respect to which a Commodity Interest is traded
                  on a
                  contract market designated as specified in the preceding paragraph
                  (3)
                  ("Physical
                  Commodities")
                  and that are held for investment purposes. Physical Commodities
                  owned, or
                  a financial contract entered into, by the Undersigned may be deemed
                  to be
                  held for investment purposes if the Undersigned is engaged primarily
                  in
                  the business of investing, reinvesting or trading in Commodity
                  Interests,
                  Physical Commodities or financial contracts in connection with
                  such
                  business.

              

      

      
        	 	
                (5)

              	
                To
                  the extent not securities, financial contracts (as defined in Section
                  3(c)(2)(B)(i) of the Securities Act) entered into for investment
                  purposes.

              

      

      
        	 	
                (6)

              	
                Any
                  amounts payable to the Undersigned pursuant to a firm agreement
                  or similar
                  binding commitment pursuant to which a person has agreed to acquire
                  an
                  interest in, or make capital contributions to, the Undersigned
                  upon demand
                  of the Undersigned, but only if the Undersigned is a company that
                  would be
                  an investment company but for the exclusion provided by Section
                  3(c)(1) or
                  Section 3(c)(7) of the Investment Company Act, or if the Undersigned
                  is a
                  commodity pool.

              

      

      
        	 	
                (7)

              	
                Cash
                  and cash equivalents (including non-U.S. currencies) held for investment
                  purposes. Cash and cash equivalent include bank deposits, certificates
                  of
                  deposit, bankers acceptances and similar bank instruments held
                  for
                  investment purposes and the net cash surrender value of an insurance
                  policy.

              

      

    

    
      

      Valuation
        of Investments:
        The
        value of an investment is its fair market value on the most recent practicable
        date or its cost, provided
        that the
        value of Commodity Interests shall be the value of the initial margin or
        option
        premium deposited in connection with the Commodity Interest.

      

      Deductions
        from Valuation:
        The
        amount of any outstanding indebtedness incurred to acquire or for the purpose
        of
        acquiring the investments of the Undersigned shall be deducted from the amounts
        of the Undersigned's investments. In addition, with respect to companies
        described in item 2(a)(ii) of this Appendix, the amount of any outstanding
        indebtedness incurred by an owner of the company to acquire company's
        investments shall be deducted.

      

      Special
        Rules: 

      

      Joint
        Investments:
        If the
        Undersigned is a natural person, the Undersigned may include in the amount
        of
        his or her investments any investments held jointly with the Undersigned's
        spouse, or investments in which the Undersigned shares with his or her spouse
        a
        community property or similar shared ownership interest. In determining whether
        spouses who are making a joint investment in the Partnership are Qualified
        Purchasers, there may be included in the amount of each spouse's investments
        any
        investments owned by the other spouse (whether or not such investments are
        held
        jointly). In each case, there shall be deducted from the amount of any such
        investments the amounts specified in the first sentence of "Deductions from
        Valuation" incurred by each spouse.

      

      Subsidiary
        Investments:
        If the
        Undersigned is a company, then for purposes of determining the amount of
        investments owned by the Undersigned under item 2(a)(iv) of this Appendix,
        there
        may be included investments owned by majority-owned subsidiaries of the
        Undersigned and investments owned by a company (a parent company) of which
        the
        Undersigned is a majority-owned subsidiary, or by a majority-owned subsidiary
        of
        the Undersigned and other majority owned subsidiaries of the parent
        company.

      

      Certain
        Retirement Plans and Trusts:
        If the
        Undersigned is a natural person, he or she may include in the amounts of
        his or
        her investments any investments held in an individual retirement account
        or
        similar account, the investments of which are directed by and held for the
        benefit of the Undersigned.

       

    

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        Appendix
          I

        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

    
      	 	 	
              _____

            	
              (ii)

            	
              a
                company that owns not less than $5,000,000 in investments3
                and that is owned directly or indirectly by or for two or more natural
                persons who are related as siblings or spouse (including former spouses),
                or direct lineal descendants by birth or adoption, spouses of such
                persons, the estates of such persons, or foundations, charitable
                organizations, or trusts established by or for the benefit of such
                persons;

            

    

    

    
      	 	 	
              _____

            	
              (iii)

            	
              a
                trust that is not covered by clause (ii) of this Section 2(a) and
                that was
                not formed for the specific purpose of making an investment in the
                Partnership, as to which the trustee or other person authorized to
                make
                decisions with respect to the trust, and each settlor or other person
                who
                has contributed assets to the trust, is a person described in clause
                (i),
                (ii), or (iv) of this Section 2(a);

            

    

    

    
      	 	 	
              _____

            	
              (iv)

            	
              a
                person (entity or natural person), acting for its own account or
                the
                accounts of other Qualified Purchasers, who in the aggregate owns
                and
                invests on a discretionary basis, not less than $25,000,000 in
                investments3;
                or

            

    

    

    
      	 	 	
              _____

            	
              (v)

            	
              a
                "qualified institutional buyer" as defined in paragraph (a) of Rule
                144A
                of the Securities Act, acting for its own account,3 
                the account of another qualified institutional buyer, or the account
                of a
                Qualified Purchaser; provided
                that if the Undersigned is a dealer, it also owns and invests on
                a
                discretionary basis not less than $25,000,000 in securities of issuers
                that are not affiliated with the
                dealer.

            

    

    

    
      	 	
                  X   

            	
              (b)

            	
              Undersigned
                is not a "Qualified Purchaser" as that term is defined in Section
                2(a)(51)
                of the Investment Company Act and the rules
                thereunder.

            

    

    

    3. Investment
      Company Status.
      (Please
      check all applicable statements if the Undersigned is an “issuer” as defined in
      Section 11 of the Investment Company Act.)

     

     

    ________________
     3Each
      of
      the following plans will not be deemed to be acting for its own account if
      investment decisions with respect to the plan are made by the beneficiaries
      of
      the plan, except with respect to investment decisions made solely by the
      fiduciary, trustee or sponsor of such plan: (a) Any plan established and
      maintained by a state, its political subdivisions, or any agency or
      instrumentality of state or its political subdivisions, for the benefit of
      its
      employees; (b) any employee benefit plan within the meaning of Title I of ERISA;
      or (c) any trust fund whose trustee is a bank or trust company and whose
      participants are exclusively plans of the types identified in the preceding
      clauses (a) and (b) (except trust funds that include as participants individual
      retirement accounts or H.R. 10 plans) that holds the assets of such a
      plan.

    
      
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          Exploration II, L.P.

        Subscription
          Agreement

        Appendix
          I

        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

    
      	 	
              _____

            	 	
              (a)

            	
              Undersigned
                is an “investment
                company”
                as defined in Section 3 of the Investment Company Act. [Answer
                item 5.]

            

    

    

    
      	 	
              _____

            	 	
              (b)

            	
              Undersigned
                is not an “investment
                company”
                as defined in Section 3 of the Investment Company Act because it
                is
                relying on the exception from the definition of an “investment company” in
                Section 3(c)(1) of the Investment Company Act. [Answer
                item 5.]

            

    

    

    
      	 	
              _____

            	 	
              (c)

            	
              Undersigned
                is not an “investment
                company”
                as defined in Section 3 of the Investment Company Act because it
                is relying
                on the exception from the definition of an “investment company” in Section
                3(c)(7) of the Investment Company Act. [Answer
                item 5.]

            

    

    

    
      	 	
                  X   

            	 	
              (d)

            	
              Undersigned
                is not an “investment
                company”
                as defined in Section 3 of the Investment Company Act for reasons
                other
                than the exceptions from the definition of an “investment company” in
                Section 3(c)(1) and Section 3(c)(7) of the Investment Company Act.
                If
                applicable, please discuss the exception relied on with the General
                Partner.

            

    

    

    4. Non-U.S.
      Companies.
      (Please
      check all applicable items if the Undersigned is a company, plan or other entity
      (but not a natural person) organized under the laws of a jurisdiction other
      than
      the United States of America or one of its states.)

    

    
      	 	
              _____

            	 	
              (a)

            	
              The
                Undersigned is or holds itself out as being engaged primarily, or
                proposed
                to engage primarily, in the business of investing, reinvesting, or
                trading
                in securities. [Answer
                item 5.]

            

    

    

    
      	 	
              _____

            	 	
              (b)

            	
              The
                Undersigned is engaged or proposes to engage in the business of issuing
                face-amount certificates of the installment type, or has been engaged
                in
                such business and has any such certificate outstanding. [Answer
                Item 5.]

            

    

    

    
      	 	
              _____

            	 	
              (c)

            	
              The
                Undersigned owns or proposes to acquire investment securities4 
                having a value exceeding 40 per centum of the value of the Undersigned’s
                total assets (exclusive of government securities5 
                and cash items (on an unconsolidated basis). [Answer
                item 5.]

            

    

     

     

    ________________

    4As
      used in this question, "investment securities" includes all securities except
      (a) government securities, (b) securities issued by employees' securities
      companies, and (c) securities issued by majority-owned subsidiaries of the
      Undersigned which are not investment companies.

     

    5"Government
      security" means any security issued or guaranteed as to principal or interest
      by
      the United States, or by a person controlled or supervised by and acting as
      an
      instrumentality of the government of the United States pursuant to authority
      granted by the Congress of the United States; or any certificate of deposit
      for
      any of the foregoing.

     

    
      
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          Exploration II, L.P.

        Subscription
          Agreement

        Appendix
          I

        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

    
      	 	
              _____

            	 	
              (d)

            	
              The
                Undersigned is primarily engaged, directly or through a wholly-owned
                subsidiary or subsidiaries, in a business or businesses other than
                that of
                investing, reinvesting, owning, holding or trading in
                securities.

            

    

    

    5. Ownership
      Information.
      (If the
      Undersigned checked any of items 3(a), 3(b), 3(c), 4(a), 4(b), or 4(c), please
      provide the following information.)

    

    
      	 	 	
              (a)

            	
              The
                Undersigned has the following number of beneficial owners6 
                of
                its outstanding securities (other than short-term paper):
                ________

            

    

    

    
      	 	 	
              (b)

            	
              The
                following number of companies beneficially own at least 10% of the
                Undersigned’s outstanding securities (other than short-term paper):
                ________

            

    

    

    (c) The
      Undersigned is (please check applicable box):

    

    
      	 	 	
              _____

            	 	
              (i)

            	
              a
                company organized under the laws of the United States or any state
                thereof.

            

    

    

    
      	 	 	
              _____

            	 	
              (ii)

            	
              a
                company organized under the laws of a country, territory, or other
                jurisdiction other than the United States or a state thereof, and
                no
                beneficial owner of the Undersigned’s outstanding securities (other than
                short-term paper) is a U.S. person.7 

            

    

     

     

    ________________

    
      6Beneficial
        ownership means the right to vote or dispose of a security. In determining
        the
        number of beneficial owners, the Undersigned should deem beneficial ownership
        by
        a company to be beneficial ownership by one person, except that, if such
        company
        owns 10 per centum or more of the outstanding voting securities of the
        Undersigned, and is or, but for the exception provided for in Section 3(c)(1)
        or
        Section 3(c)(7) of the Investment Company Act, would be an investment company,
        then the beneficial ownership shall be deemed to be that of the holders of
        such
        company's outstanding securities (other than short-term
        paper).

      

      7A
        "U.S. person" generally means (i) any natural person resident in the United
        States; (ii) any partnership or corporation organized or incorporated under
        the
        laws of the United States; (iii) any estate of which any executor or
        administrator is a U.S. person; (iv) any trust of which the trustee is a
        U.S.
        person; (v) any agency or branch of a foreign entity located in the United
        States; (vi) any non-discretionary account or similar account (other than
        an
        estate or trust) held by a dealer or other fiduciary for the benefit or account
        of a U.S. person; (vii) any discretionary account or similar account (other
        than
        an estate or trust) held by a dealer or other fiduciary organized, incorporated,
        or (if a natural person) resident in the United States; and (viii) any
        partnership or corporation if (a) organized or incorporated under the laws
        of
        any non-U.S. jurisdiction and (b) formed by a U.S. person principally for
        the
        purpose of investing in securities not registered under the Securities Act,
        unless it is organized or incorporated, and owned, by Accredited Investors
        who
        are not natural persons, estates or trusts.

    

    
      
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          Exploration II, L.P.

        Subscription
          Agreement

        Appendix
          I

        
        

      

      
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              _____

            	 	
              (iii)

            	
              a
                company organized under the laws of a country, territory, or other
                jurisdiction other than the United States or a state thereof, and
                the
                Undersigned has the following number of U.S. persons who beneficially
                own
                outstanding securities (other than short-term paper) of the Undersigned
                (please provide
                number):_________________

            

    

    

    6. Qualified
      Client.
      (Please
      check all applicable statements.)

     

    
      	 	
              _____

            	 	
              (a)

            	
              Undersigned
                is a natural person whose net worth (together with assets held jointly
                with a spouse) exceeds $1,500,000.

            

    

     

    
      	 	
              _____

            	 	
              (b)

            	
              Undersigned
                is an entity whose ultimate equity owners each, individually, has
                a net
                worth (together with assets held jointly with a spouse) of more than
                $1,500,000.

            

    

     

    
      	 	
                  X   

            	 	
              (c)

            	
              Undersigned
                is an entity that has a net worth of more than $1,500,000 and that
                is not
                (1) an investment company registered under the Investment Company
                Act, or
                (2) a business development company as defined in Section 202(a)(22)
                of the
                Investment Company Act, or (3) a company that would be defined as
                an
                investment company under Section 3(a) of the Investment Company Act,
                but
                for the exception provided from that definition by Section 3(c)(1)
                of the
                Investment Company Act.

            

    

     

    
      	 	
              _____

            	 	
              (d)

            	
              Undersigned
                is a natural person who is (1) an executive officer, director, trustee,
                general partner, or person serving in a similar capacity of the General
                Partner; or (2) an employee of the General Partner (other than an
                employee
                performing solely clerical, secretarial or administrative functions
                with
                regard to the General Partner) who, in connection with his or her
                regular
                functions or duties, participates in the investment activities of
                the
                General Partner, and has been performing such functions and duties
                for or
                on behalf of the General Partner, or substantially similar functions
                or
                duties for or on behalf of another similar company, for at least
                12
                months.

            

    

    

    Undersigned
      hereby represents and warrants that all statements and information set forth
      in
      this Certificate are true and correct on the date hereof and will be true and
      correct on the Closing Date of the purchase of the limited partnership interest
      in the Partnership in connection with which this Certificate is being executed.
      Undersigned will notify the Partnership promptly (but in all events within
      10
      days after the applicable change) of any change in the information set forth
      herein.

    

    *
      * * *

    
      
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          Exploration II, L.P.

        Subscription
          Agreement

        Appendix
          I

        
        

      

      
        A-8

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Undersigned has executed this Certificate on the date
      set
      forth below.

    

    Dated:  
      April 6, 2006

    PETRO
      RESOURCES CORPORATION

    dba
      PRCT, INC.    

    (Print
      or
      type Undersigned's name)

    

    By: /s/
      Wayne P.
      Hall                                
   

    Wayne
      P.
      Hall

    President
      & Chief Executive Officer

     

    
      
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          Exploration II, L.P.

        Subscription
          Agreement

        Appendix
          I

        
        

      

      
        A-9

        
          

        

      

      
        
        

      

    

    FORM
      W-8

    

    
      
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          Exploration II, L.P.

        Subscription
          Agreement

        Appendix
          I

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    FORM
      W-9

     

    
      
        	 	 	 
	
                SUBSTITUTE

                Form
                  W-9

                Department
                  of the Treasury

                Internal
                  Revenue Service

                 

                Request
                  for Taxpayer

                Identification
                  Number (TIN)

                and
                  Certification

              	
                Name:        
                  Petro
                  Resources Corporation

                dba
                  PRCT, Inc.

                Address:   
                  5100
                  Westheimer

                Suite
                  200

                Houston,
                  Texas 77056

              	
                Individual
                  o

                Partnership
                  o

                Corporation
                  x

                Other
                  (specify) o

              

      

      

        
          	
                  Part
                    I.

                	
                  Please
                    provide your taxpayer identification number in the space at right
                    and
                    

                  certify
                    by signing and dating below. If awaiting TIN, write “Applied
                    For.”

                	
                  SSN:____________________

                  or

                  EIN:
                    86-0879278

                   

                
	
                  Part
                    II.

                	
                  For
                    Payees exempt from backup withholding, see the enclosed “Guidelines for
                    Certification of Taxpayer Identification Number on Substitute
                    Form
                    W-9.”

                

        

      

       

      
        	
                CERTIFICATION
                  -- Under
                  penalties of perjury, I certify
                  that:

              

      

       

      
        	
                (1)

              	
                The
                  number shown on this form is my correct Taxpayer Identification
                  Number (or
                  I am waiting for a number to be issued to me);
                  and

              

      

      
         

        
          	
                  (2)

                	
                  I
                    am not subject to backup withholding either because: (a) I am
                    exempt from
                    backup withholding, or (b) I have not been notified by the IRS
                    that I am
                    subject to backup withholding as a result of a failure to report
                    all
                    interest 

                  or
                    dividends, or (c) the IRS has notified me that I am no longer subject
                    to backup withholding; and

                

        

         

        
          
            	
                    (3)

                  	
                    I
                      am a U.S. person (including a U.S. resident alien).

                     

                  

          

           

        

      

      
        	
                CERTIFICATION
                  INSTRUCTIONS
                  --
                  You must cross out item (2) above if you have been notified by
                  the IRS
                  that you are subject to backup withholding because of underreporting
                  interest or dividends on your tax return. However, if after being
                  notified
                  by the IRS that you were subject to backup withholding you received
                  another notification from the IRS that you are no longer subject
                  to backup
                  withholding, do not cross out item (2).

                 

                The
                  IRS does not require your consent to any provision of this document
                  other
                  than the certifications required to avoid backup
                  withholding.

                 

                Signature
                  /s/ Wayne P. Hall 

                Date:
                  4/6/06

                 

              

      

    

    
      
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          Exploration II, L.P.

        Subscription
          Agreement

        Appendix
          I

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      
        	 
	
                 

                CERTIFICATE
                  OF AWAITING TAXPAYER IDENTIFICATION NUMBER

                 

                I
                  certify under penalties of perjury that a taxpayer identification
                  number
                  has not been issued to me, and either (i) I have mailed or delivered
                  an
                  application to receive a taxpayer identification number to the
                  appropriate
                  Internal Revenue Service Center or Social Security Administration
                  Office,
                  or (ii) I intend to mail or deliver an application in the near
                  future. I
                  understand that if I do not provide a taxpayer identification number
                  by
                  the time of payment, 30% percent of all reportable payments made
                  to me
                  will be withheld until I provide a taxpayer identification number
                  to the
                  Depositary.

                 

                                                                                             

                __________________________________

                Signature

                _______________________________________                                                                                           
                  Date: _______________________

                Name
                  (Please Print)

              

      

    

    
 

    
      
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          Exploration II, L.P.

        Subscription
          Agreement

        Appendix
          I

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    GUIDELINES
      FOR CERTIFICATION OF TAXPAYER IDENTIFICATION 

    NUMBER
      ON SUBSTITUTE FORM W-9

     

    Guidelines
      for Determining the Proper Identification Number for the Payee (You) to Give
      the
      Payer.-Social
      Security numbers have nine digits separated by two hyphens: e.g., 000-00-0000.
      Employer identification numbers have nine digits separated by only one hyphen:
      e.g., 00-0000000. The table below will help determine the number to give the
      payer.

     

    

    
      	 	 	 	 	 	 	 
	
               

              For
                this type of account:

               

            	 	
               

              Give
                the

              SOCIAL
                SECURITY

              number
                of-

               

            	 	
               

              For
                this type of account:

               

            	 	
               

              Give
                the

              EMPLOYER

              IDENTIFICATION

              number
                of-

               

            
	
               

              1. Individual

               

            	 	
               

              The
                individual

               

            	 	
               

              6. Sole
                proprietorship

               

            	 	
               

              The
                owner (3)

               

            
	
              2. Two
                or more individuals (joint account)

               

            	 	
              The
                actual owner of the account or, if combined funds, the first individual
                on
                the account (1)

               

            	 	
              7. A
                valid trust, estate, or pension trust

               

            	 	
              Legal
                entity (4)

               

            
	
              3. Custodian
                account of a minor (Uniform Gift to Minors Act)

               

            	 	
              The
                minor (2)

               

            	 	
              8. Corporate
                

               

            	 	
              The
                corporation

               

            
	
              4. a.
                The usual revocable savings trust (grantor is also trustee)

               

              b.
                So-called trust account that is not a legal or valid trust under
                state
                law

               

            	 	
              The
                grantor-trustee (1)

               

               

               

              The
                actual owner (1)

               

            	 	
              9. Association,
                club, religious, charitable, educational, or other tax-exempt organization
                

               

            	 	
              The
                organization

               

            
	
              5. Sole
                proprietorship

               

            	 	
              The
                owner (3)

               

            	 	
              10. Partnership

               

            	 	
              The
                partnership

               

            
	 	 	 	 	
              11. A
                broker or registered nominee

               

            	 	
              The
                broker or nominee

               

            
	 	 	 	 	
              12. Account
                with the Department of Agriculture in the name of a public entity
                (such as
                a state or local government, school district, or prison) that receives
                agricultural program payments

               

            	 	
              The
                public entity

               

            

    

     

    __________________

    
      	
               

              (1)

               

            	
               

              List
                first and circle the name of the person whose number you furnish.
                If only
                one person on a joint account has a social security number, that
                person’s
                number must be furnished. 

               

            
	
              (2)

               

            	
              Circle
                the minor’s name and furnish the minor’s social security number.
                

               

            
	
              (3)

               

            	
              You
                must show your individual name,
                but you may also enter your business or “DBA” name. You may use either
                your social security number or employer identification number (if
                you have
                one).

               

            
	
              (4)

               

            	
              List
                first and circle the name of the legal trust, estate, or pension
                trust.
                (Do not furnish the taxpayer identification number of the personal
                representative or trustee unless the legal entity itself is not designated
                in the account title.) 

               

            
	
              Note:

               

            	
              If
                no name is circled when more than one name is listed, the number
                will be
                considered to be that of the first name listed.

               

            

    

     

    
      
        Hall-Houston
          Exploration II, L.P.

        Subscription
          Agreement

        Appendix
          I

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    GUIDELINES
      FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

    NUMBER
      ON SUBSTITUTE FORM W-9

     

    Page
      2

     

    

      
        	
                Obtaining
                  a Number

                 

                If
                  you don’t have a taxpayer identification number (“TIN”) or you don’t know
                  your number, obtain Form SS-5, Application for a Social Security
                  Number
                  Card, or Form SS-4, Application for Employer Identification Number,
                  at the
                  local office of the Social Security Administration or the Internal
                  Revenue
                  Service and apply for a number.

                 

                Payees
                  Exempt From Backup Withholding

                 

                Payees
                  specifically exempted from backup withholding on all dividend and
                  interest
                  payments and on broker transactions include the
                  following:

                ·   
                  A
                  corporation.

                ·   
                  A
                  financial institution.

                ·   
                  An
                  organization exempt from tax under Section 501(a) of the Internal
                  Revenue
                  Code of 1986, as amended (the “Code”), 

                or
                  an individual retirement plan or a custodial account 

                under
                  Section 403(b)(7), if the account satisfies the

                requirements
                  of Section 401(f)(2).

                ·   
                  The
                  United States or any of its agencies or instrumentalities. 

                ·   
                  A
                  state, the District of Columbia, a possession of the United States,
                  or any
                  of their political subdivisions or instrumentalities.

                ·   
                  A
                  foreign government or any of its political subdivisions, agencies,
                  or
                  instrumentalities.

                ·   
                  An
                  international organization or any of its agencies or instrumentalities.
                  

                ·   
                  A
                  dealer in securities or commodities registered in the United States,
                  the
                  district of Columbia, or a possession of the United States.

                ·   
                  A
                  real estate investment trust.

                ·   
                  A
                  common trust fund operated by a bank under Section 584(a) of the
                  Code.
                  

                ·   
                  An
                  entity registered at all times during the tax year under the Investment
                  Company Act of 1940.

                ·   
                  A
                  foreign central bank of issue.

                 

                Payments
                  of dividends and patronage dividends not generally subject to backup
                  withholding include the following:

                 

                ·   
                  Payments
                  to nonresident aliens subject to withholding under Section 1441
                  of the
                  Code.

                 

                Note:
                  You may be subject to backup withholding if this interest is $600
                  or more
                  and is paid in the course of the payer’s trade or business and you have
                  not provided your correct taxpayer identification number to the
                  payer.

                 

                
                  ·  Payments
                    of tax-exempt interest (including exempt-interest

                  dividends
                    under Section 852 of the Code).

                

              	 	
                
                  ·  Payments
                    described in Section 6049(b)(5) of the Code to

                  nonresident
                    aliens.
·  Payments
                  on tax-free covenant bonds under Section 1451

                of
                  the Code. 

                ·  Payments
                  made by certain foreign organizations.

                ·  Mortgage
                  or student loan interest paid to you.

                 

                Exempt
                  payees described above should file the substitute Form W-9 to avoid
                  possible erroneous backup withholding. Complete
                  the substitute Form W-9 as follows:

                 

                Enter
                  your Taxpayer Identification Number in Part I, write “EXEMPT” in Part II,
                  and sign and date the form.

                 

                Certain
                  payments that are not subject to information reporting are also
                  not
                  subject to backup withholding. For details, see Sections 6041,
                  6041A,
                  6042, 6044, 6045, 6050A and 6050N of the Code and their regulations.
                  

                 

                Privacy
                  Act Notice.-Section
                  6109 of the Code requires you to provide your correct taxpayer
                  identification number to payers who must report the payments to
                  the IRS.
                  The IRS uses the number for identification purposes and may also
                  provide
                  this information to various government agencies for tax enforcement
                  or
                  litigation purposes. Payers must be given the numbers whether or
                  not
                  recipients are required to file tax returns. Payers must generally
                  withhold 30% of taxable interest, dividend, and certain other payments
                  to
                  a payee who does not furnish a taxpayer identification number to
                  a payer.
                  Certain penalties may also apply.

                 

                Penalties

                 

                (1)
                  Penalty for Failure to Furnish Taxpayer Identification
                  Number.-If
                  you fail to furnish your correct taxpayer identification number
                  to a
                  payer, you are subject to a penalty of $50 for each such failure
                  unless
                  your failure is due to reasonable cause and not to willful
                  neglect.

                 

                (2)
                  Civil Penalty for False Information with Respect to
                  Withholding.-If
                  you make a false statement with no reasonable basis which results
                  in no
                  imposition of backup withholding, you are subject to a penalty
                  of $500.
                  

                 

                (3)
                  Criminal Penalty for Falsifying Information.-Willfully
                  falsifying certifications or affirmations may subject you to criminal
                  penalties including fines and/or imprisonment.

                 

                (4)
                  Misuse of Taxpayer Identification Numbers.-If
                  the payer discloses or uses taxpayer identification numbers in
                  violation
                  of Federal law, the payer may be subject to civil and criminal
                  penalties.

                 

                FOR
                  ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
                  REVENUE
                  SERVICE.

                 

              

      

    

     

     

    Hall-Houston
      Exploration II, L.P.

    Subscription
      Agreement

    Appendix
      IAmended and Restated Agreement

    

      Exhibit
        10.8

      

      

       

      

      
        

        

      

       

      

      

      HALL-HOUSTON
        EXPLORATION II, L.P.

      

      Amended
        and Restated

      

      Agreement
        of Limited Partnership

      

      Dated
        as of April 21, 2006

      

      

       

      

      
        

        

      

      

      

       

      

      

      

      THE
        LIMITED PARTNERSHIP INTERESTS OF HALL-HOUSTON EXPLORATION II, L.P. HAVE NOT
        BEEN
        REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
        THE SECURITIES LAWS OF ANY STATE OR ANY OTHER SECURITIES LAWS IN RELIANCE
        UPON
        EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH
        LAWS. SUCH LIMITED PARTNERSHIP INTERESTS MUST BE ACQUIRED FOR INVESTMENT
        ONLY
        AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR
        TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT,
        ANY APPLICABLE STATE SECURITIES LAWS, AND ANY OTHER APPLICABLE SECURITIES
        LAWS;
        AND (II) THE TERMS AND CONDITIONS OF THIS AMENDED AND RESTATED AGREEMENT OF
        LIMITED PARTNERSHIP, AS AMENDED FROM TIME TO TIME. THEREFORE, PURCHASERS
        OF SUCH
        LIMITED PARTNERSHIP INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR
        INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE
        OF CONTENTS

      Page

      

      
        	
                ARTICLE
                  I

              	 
	
                DEFINITIONS
                  AND CONSTRUCTION

              	 
	
                1.1

              	
                DEFINITIONS;
                  GLOSSARY OF TERMS

              	
                1

              
	
                1.2

              	
                CONSTRUCTION

              	
                1

              
	 	 
	
                ARTICLE
                  II

              	 
	
                GENERAL
                  PROVISIONS

              	 
	
                2.1

              	
                CONTINUATION

              	
                2

              
	
                2.2

              	
                NAME

              	
                2

              
	
                2.3

              	
                ORGANIZATIONAL
                  CERTIFICATES AND OTHER FILINGS

              	
                2

              
	
                2.4

              	
                PURPOSE;
                  SIZE LIMITATION

              	
                2

              
	
                2.5

              	
                PRINCIPAL
                  OFFICE

              	
                2

              
	
                2.6

              	
                REGISTERED
                  OFFICE AND REGISTERED AGENT

              	
                3

              
	
                2.7

              	
                TERM

              	
                3

              
	
                2.8

              	
                ADMISSION

              	
                3

              
	
                2.9

              	
                CO-INVESTMENTS

              	
                3

              
	 	 
	
                ARTICLE
                  III

              	 
	
                COMMITMENTS;
                  CAPITAL CONTRIBUTIONS

              	 
	
                3.1

              	
                COMMITMENTS

              	
                4

              
	
                3.2

              	
                CAPITAL
                  CONTRIBUTIONS

              	
                4

              
	
                3.3

              	
                SUBSEQUENT
                  CLOSINGS

              	
                6

              
	
                3.4

              	
                DEFAULTING
                  LIMITED PARTNER

              	
                7

              
	 	 
	
                ARTICLE
                  IV

              	 
	
                CAPITAL
                  ACCOUNTS; ALLOCATIONS; DISTRIBUTIONS; RETURN
                  OF DISTRIBUTIONS

              	 
	
                 

              	 
	
                4.1

              	
                CAPITAL
                  ACCOUNTS

              	
                10

              
	
                4.2

              	
                ALLOCATIONS
                  FOR ACCOUNTING PURPOSES

              	
                11

              
	
                4.3

              	
                ALLOCATION
                  FOR INCOME TAX PURPOSES

              	
                14

              
	
                4.4

              	
                DISTRIBUTIONS
                  -- GENERAL PRINCIPLES

              	
                16

              
	
                4.5

              	
                AMOUNTS
                  AND PRIORITY OF DISTRIBUTIONS

              	
                17

              
	
                4.6

              	
                TAX
                  DISTRIBUTIONS

              	
                18

              
	 	 
	
                ARTICLE
                  V

              	 
	
                MANAGEMENT
                  OF THE PARTNERSHIP

              	 
	
                5.1

              	
                GENERAL
                  PARTNER

              	
                18

              
	
                5.2

              	
                LIMITED
                  PARTNERS

              	
                21

              
	
                5.3

              	
                ADVISORY
                  COMMITTEE; RESOLUTION OF CONFLICTS OF INTEREST

              	
                21

              
	
                5.4

              	
                TRANSACTIONS
                  WITH AFFILIATES

              	
                22

              
	
                5.5

              	
                OUTSIDE
                  ACTIVITIES

              	
                23

              
	 	 
	
                ARTICLE
                  VI

              	 
	
                EXPENSES;
                  INSURANCE

              	 
	
                6.1

              	
                GP
                  EXPENSES

              	
                23

              
	
                6.2

              	
                PARTNERSHIP
                  EXPENSES AND ORGANIZATIONAL EXPENSES

              	
                23

              
	
                6.3

              	
                INSURANCE
                  COVERAGE

              	
                25

              

      

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -i-

          
            

          

        

        
           

        

      

      

      
        	
                ARTICLE
                  VII

              	 
	
                BOOKS
                  AND RECORDS; REPORTS AND OTHER FINANCIAL, LEGAL AND TAX
                  MATTERS

              	 
	
                7.1

              	
                BOOKS
                  AND RECORDS

              	
                25

              
	
                7.2

              	
                FINANCIAL
                  REPORTS AND TAX INFORMATION

              	
                25

              
	
                7.3

              	
                PARTNER
                  MEETINGS; VOTING AND CONSENT

              	
                26

              
	
                7.4

              	
                FISCAL
                  YEAR

              	
                26

              
	
                7.5

              	
                TAX
                  ELECTIONS

              	
                27

              
	 	 
	
                ARTICLE
                  VIII

              	 
	
                TRANSFERS
                  AND WITHDRAWALS

              	 
	
                8.1

              	
                TRANSFERS
                  BY THE GENERAL PARTNER

              	
                27

              
	
                8.2

              	
                TRANSFERS
                  BY THE LIMITED PARTNERS

              	
                28

              
	
                8.3

              	
                WITHDRAWALS
                  GENERALLY

              	
                29

              
	
                8.4

              	
                REMOVAL
                  OF THE GENERAL PARTNER

              	
                29

              
	 	 
	
                ARTICLE
                  IX

              	 
	
                DISSOLUTION,
                  WINDING UP AND TERMINATION OF THE PARTNERSHIP

              	 
	
                9.1

              	
                DISSOLUTION

              	
                30

              
	
                9.2

              	
                WINDING
                  UP

              	
                31

              
	
                9.3

              	
                FINAL
                  DISTRIBUTION

              	
                31

              
	
                9.4

              	
                TERMINATION
                  OF THE PARTNERSHIP

              	
                31

              
	 	 
	
                ARTICLE
                  X

              	 
	
                EXCULPATION
                  AND INDEMNIFICATION

              	 
	
                10.1

              	
                EXCULPATION

              	
                32

              
	
                10.2

              	
                INDEMNIFICATION

              	
                32

              
	 	 
	
                ARTICLE
                  XI

              	 
	
                MISCELLANEOUS

              	 
	
                11.1

              	
                AMENDMENTS

              	
                34

              
	
                11.2

              	
                ENTIRE
                  AGREEMENT

              	
                35

              
	
                11.3

              	
                SEVERABILITY

              	
                35

              
	
                11.4

              	
                NOTICES

              	
                35

              
	
                11.5

              	
                GOVERNING
                  LAW

              	
                36

              
	
                11.6

              	
                JURISDICTION;
                  VENUE

              	
                36

              
	
                11.7

              	
                SUCCESSORS
                  AND ASSIGNS

              	
                36

              
	
                11.8

              	
                COUNTERPARTS

              	
                36

              
	
                11.9

              	
                INTERPRETATION

              	
                36

              
	
                11.10

              	
                HEADINGS

              	
                36

              
	
                11.11

              	
                CONFIDENTIALITY

              	
                37

              
	
                11.12

              	
                EMPLOYEES

              	
                37

              
	
                11.13

              	
                LEGAL
                  COUNSEL

              	
                37

              

      

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -ii-

          
            

          

        

        
           

        

      

      Schedules:

      

      Schedule
        A - Partners
        and Commitments

      

      Exhibits:

      

      Exhibit
        A - Defined
        Terms

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -iii-

          
            

          

        

        
           

        

      

      GLOSSARY
        OF DEFINED TERMS

       

      The
        location of the definition of each capitalized term used in this agreement
        is
        set forth in this Glossary of Defined Terms if it is not defined in Exhibit
        A
        hereto.

       

      

        
          	
                  Additional
                    Amount

                	
                  3.3(b)(i)

                
	
                  Advisory
                    Committee

                	
                  5.3(a)

                
	
                  Advisory
                    Committee Member

                	
                  5.3(a)

                
	
                  Agreement

                	
                  Recitals

                
	
                  Assumed
                    Tax Liability

                	
                  4.6

                
	
                  Certificate

                	
                  Recitals

                
	
                  Combined
                    Interest

                	
                  8.4(b)

                
	
                  Defaulting
                    Limited Partner

                	
                  3.4(a)

                
	
                  Distributable
                    Cash

                	
                  4.5

                
	
                  Effective
                    Date

                	
                  2.7

                
	
                  Event
                    of Dissolution

                	
                  9.1

                
	
                  Final
                    Closing Date

                	
                  3.3(a)

                
	
                  Final
                    Distribution

                	
                  9.3

                
	
                  Fiscal
                    Year

                	
                  7.5

                
	
                  GP
                    Expenses

                	
                  6.1

                
	
                  Indemnified
                    Party

                	
                  10.1(a)

                
	
                  Legal
                    Counsel

                	
                  11.13

                
	
                  Original
                    Agreement

                	
                  Recitals

                
	
                  Partnership

                	
                  Recitals

                
	
                  Partnership
                    Expenses

                	
                  6.2(a)

                
	
                  Prior
                    Funding Amounts

                	
                  3.3(b)(ii)

                
	
                  Purchase
                    Price

                	
                  3.4(d)(i)

                
	
                  Subsequent
                    Closing

                	
                  3.3(a)

                
	
                  Tax
                    Distribution Date

                	
                  4.6

                
	
                  Tax
                    Payments

                	
                  4.4(d)(i)

                

        

      

      

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -iv-

          
            

          

        

        
           

        

      

      AMENDED
        AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

       

      OF

       

      HALL-HOUSTON
        EXPLORATION II, L.P.

       

       

      This
        AMENDED AND RESTATED AGREEMENT of LIMITED PARTNERSHIP (including the Exhibits
        and Schedules hereto and as further amended or restated from time to time,
        this
“Agreement”)
        of
        Hall-Houston Exploration II, L.P., a Delaware limited partnership (the
“Partnership”),
        is
        entered into as of the Effective Date by and among HHEP GP II, L.P., a Delaware
        limited partnership, as the General Partner, and the Limited
        Partners.

       

      WHEREAS,
        the Partnership was formed pursuant to (a) a Certificate of Limited Partnership,
        dated February 16, 2006, which was executed by the General Partner and filed
        for
        recordation in the office of the Secretary of State of the State of Delaware
        on
        February 16, 2006 (the “Certificate”)
        and
        (b) an Agreement of Limited Partnership dated as of February 16, 2006 (the
        “Original
        Agreement”)
        between the General Partner and Gary L. Hall (the “Initial
        Limited Partner”);
        and

       

      WHEREAS,
        the parties hereto desire to enter into this Agreement to reflect the admission
        of the Persons, other than the General Partner and the Initial Limited Partner
        (who were each previously admitted to the Partnership), as Limited Partners
        in
        the Partnership and to amend and restate the Initial Agreement in its entirety
        as follows:

       

      ARTICLE
        I

      Definitions
        and Construction

       

      1.1 Definitions;
        Glossary of Terms.
        Capitalized terms used in this Agreement (including the Exhibits and Schedules
        hereto) but not defined in the body hereof shall have the meanings assigned
        to
        them in Exhibit A.
        The
        Glossary of Defined Terms, which follows the Table of Contents, sets forth
        the
        location in this Agreement of the definition of each capitalized term used
        herein that is not defined in Exhibit
        A.

       

      1.2 Construction.
        Unless
        the context requires otherwise: (a) references to Articles and Sections
        refer to Articles and Sections of this Agreement; (b) references to
        Exhibits and Schedules are to the Exhibits and Schedules attached to this
        Agreement, each of which is made a part hereof for all purposes; (c) any
        pronoun
        used in this Agreement shall include the corresponding masculine, feminine
        or
        neuter forms, and the singular form of nouns, pronouns and verbs shall include
        the plural and vice versa; and (d) the term “include” or “includes” means
        includes, without limitation, and “including” means including, without
        limitation. All accounting terms not specifically defined herein shall be
        construed in accordance with generally accepted accounting principles, applied
        on a consistent basis.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -1-

          
            

          

        

        
           

        

      

       

      ARTICLE
        II

      General
        Provisions

       

      2.1 Continuation.
        The
        Partnership was formed by the filing of the Certificate and the Partnership
        is
        hereby continued as a limited partnership pursuant to the Act.

       

      2.2 Name.
        The
        name of the Partnership shall be “Hall-Houston Exploration II, L.P.” The General
        Partner is authorized to make any variations in the Partnership’s name that the
        General Partner may deem necessary or advisable; provided that (a) such
        name shall contain the words “Limited Partnership” or the letters “LP” or the
        equivalent translation thereof and any other designation required by applicable
        law and (b) the General Partner shall promptly give notice of any such
        variation to the Limited Partners.

       

      2.3 Organizational
        Certificates and Other Filings.
        If
        requested by the General Partner, the Limited Partners shall promptly execute
        all certificates and other documents consistent with the terms of this Agreement
        necessary for the General Partner to accomplish (a) all filing, recording,
        publishing and other acts as may be appropriate to comply with all requirements
        for (i) the formation and operation of a limited partnership under the laws
        of the State of Delaware or (ii) the operation of the Partnership as an
        entity in which the Limited Partners have limited liability in all jurisdictions
        where the Partnership proposes to operate and (b) all other filings
        required to be made by the Partnership.

       

      2.4 Purpose;
        Size Limitation.

       

      (a) Purpose.
        The
        purposes of the Partnership are to (i) acquire, own, develop, operate,
        maintain, renew, explore and equip Oil and Gas Interests in the Onshore U.S.
        Gulf Coast and Offshore U.S. Gulf of Mexico areas, (ii) produce, collect,
        store,
        treat, deliver, market, sell or otherwise dispose of production from such
        Oil
        and Gas Interests, (iii) farm-out, sell, abandon and otherwise dispose of
        any
        such Oil and Gas Interests and other Partnership assets, (iv) acquire, own,
        license, develop and dispose of geological and geophysical data related to
        such
        Oil and Gas Interests and (v) otherwise engage in any other business or activity
        that now or hereafter may be necessary, incidental, proper, advisable or
        convenient to accomplish the foregoing purposes (including obtaining financing
        therefor as contemplated by this Agreement) and that is not forbidden by
        the
        laws of the jurisdictions in which the Partnership engages in such
        businesses.

       

      (b) Size
        Limitation.
        Notwithstanding
        anything to the contrary in this Agreement, the Partnership shall not accept
        Commitments, pursuant to the Subscription Agreements or otherwise, in excess
        of
        $150,000,000 in the aggregate, excluding the Commitment of the General
        Partner.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -2-

          
            

          

        

        
           

        

      

      2.5 Principal
        Office.
        The
        Partnership shall maintain its principal office at, and its affairs shall
        be
        conducted from 4605 Post Oak Place, Suite 100, Houston, Texas 77027, or such
        place or places within the United States as the General Partner may
        decide.

       

      2.6 Registered
        Office and Registered Agent.
        The
        address of the Partnership’s registered office in the State of Delaware is
        Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
        The name and address of the Partnership’s registered agent for service of
        process in the State of Delaware is The Corporation Trust Company,
        1209 Orange Street, Wilmington, Delaware 19801. Such registered office and
        registered agent may be changed by the General Partner.

       

      2.7 Term.
        Unless
        earlier dissolved and terminated pursuant to Article IX or otherwise, the
        Partnership shall continue in business from the date that this Agreement
        is
        executed by the General Partner (the “Effective
        Date”)
        through the close of business on the 10th anniversary of the Effective Date;
        provided, the General Partner may extend the term of the Partnership beyond
        the
        10th anniversary of the Effective Date for an additional five-year period
        and,
        with the approval of a Majority in Interest of the Limited Partners (which
        will
        not be unreasonably withheld), for successive five-year periods and, in each
        case, shall give notice of any such extension to the Limited
        Partners.

       

      2.8 Admission.
        The
        General Partner and the Initial Limited Partner have been previously admitted
        as
        Partners in the Partnership. As of the Effective Date, each of the Persons
        listed on Schedule
        A
        under
        the heading “Limited Partners” is hereby admitted as a Limited
        Partner.

       

      2.9 Co-Investments. 
        Subject
        to strategic reasons for involving other investment partners, fiduciary duties
        of the General Partner to the Partnership and other reasonable considerations
        such as legal and administrative matters, the General Partner may, in its
        sole
        discretion, allow one or more Limited Partners to invest, on a
        Pro Rata Basis (or such other basis as is agreed to by the General
        Partner and each of the Limited Partners that elect to participate in such
        investment), in any Co-Investment Opportunity. The General Partner may condition
        any Limited Partner’s participation in any Co-Investment Opportunity on that
        Limited Partner bearing its pro rata share of out-of-pocket expenses incurred
        by
        the General Partner or the Partnership in analyzing, negotiating, documenting,
        administering and otherwise pursuing such Co-Investment Opportunity. The
        General
        Partner may require each Limited Partner desiring to participate in a
        Co-Investment Opportunity to become a limited partner in a special purpose
        limited partnership or other pooled investment vehicle formed to make such
        co-investment. 

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -3-

          
            

          

        

        
           

        

      

      The
        General Partner or an affiliate thereof may serve as the general partner
        of any
        such specially formed partnership. The limited partners shall reimburse the
        general partner of any such special purpose limited partnership for all
        out-of-pocket expenses incurred in such capacity. In addition, the General
        Partner may in its sole discretion give certain Persons, including one or
        more
        of the Limited Partners, an opportunity to co-invest directly in a particular
        Co-Investment Opportunity alongside the Partnership and not through any
        co-investment vehicle. The General Partner shall adopt such procedures as
        it
        deems reasonable to administer the foregoing co-investment provisions, including
        provisions relating to notice, accredited investor eligibility and other
        suitability representations, election response times, funding mechanics and
        default provisions; provided, however, that any agreement among the General
        Partner, the Partnership and any Limited Partners with respect to any
        Co-Investment Opportunity shall be on terms that are no less favorable to
        the
        Partnership than those available from unaffiliated parties in arm’s length
        transactions. No investment by any Partner in any Co-Investment Opportunity
        shall reduce such Partner’s Commitment.

       

      ARTICLE
        III

      Commitments;
        Capital Contributions

       

      3.1 Commitments.

       

      (a) Commitments.
        Pursuant
        to separate Subscription Agreements between the Partnership and each Limited
        Partner, each Limited Partner has made the Commitment set forth opposite
        such
        Partner’s name on Schedule A hereto. The General Partner’s Commitment shall
        equal .01% of the Commitments of all of the Partners, and the General Partner
        shall increase its Commitment at each Subsequent Closing so that its Commitment
        represents .01% of all Commitments. 

       

      (b) Early
        Termination of Commitments.
        

       

      (i) The
        Management Principal shall be actively involved in consulting with and advising
        the General Partner with respect to the business of the Partnership at all
        times. If at any time the requirement provided in the preceding sentence
        is not
        complied with or at any time any Person (other than Persons who directly
        or
        indirectly own economic interests of the General Partner as of the Effective
        Date or who are Affiliates of the GP Company or the Management Principal)
        acquires more than 50% of the economic interests of the General Partner or
        the
        GP Company (directly or indirectly), a Required Interest of Limited Partners
        may, by written consent delivered to the General Partner within 60 days after
        such non-compliance becomes known to the Limited Partners, elect to terminate
        the Commitment Period. 

       

      (ii) Notwithstanding
        anything in this Agreement to the contrary, the General Partner may, by written
        notice delivered to the Limited Partners, terminate the Commitment Period
        at any
        time in its sole discretion.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      (iii) Following
        the receipt of any consent or notice pursuant to this Section 3.1(b) by the
        General Partner or the Limited Partners, as applicable, the Partnership shall
        cease making any investments except for (i) Portfolio Investments that are
        pending at the time and (ii) Follow-On Investments. Nothing in this Section
        3.1(b) shall be construed to restrict the Partnership from incurring any
        additional costs or expenses following the early termination of the Commitment
        Period that are related to any Follow-On Investment or any Portfolio Investment
        that was pending or held by the Partnership at the time of such early
        termination of the Commitment Period.

       

      3.2 Capital
        Contributions.

       

      (a) Limited
        Partner Capital Contributions.
        Each
        Limited Partner agrees to make contributions to the capital of the Partnership
        in cash from time to time payable in United States Dollars, in installments
        as
        follows:

       

      (i) Portfolio
        Investments.
        With
        respect to amounts to be contributed for Portfolio Investments, at any time
        and
        from time to time on or prior to the expiration or early termination of the
        Commitment Period (or following the expiration or early termination of the
        Commitment Period to the extent necessary to consummate a Portfolio Investment
        with respect to which the Partnership had, prior to the expiration or early
        termination of the Commitment Period, committed to invest), each Limited
        Partner
        shall, on any Payment Date, contribute to the Partnership its Pro Rata Share
        of
        the aggregate amount to be contributed by all Limited Partners for such
        Portfolio Investment, but a Limited Partner in no event shall be required
        to
        make a Capital Contribution to the Partnership pursuant to this
        Section 3.2(a)(i) on any date in an amount greater than its Unfunded
        Commitment as of such date. 

       

      (ii) Partnership
        Expenses and Organizational Expenses.
        With
        respect to Partnership Expenses and Organizational Expenses, at any time
        and
        from time to time during the term of the Partnership, on any Payment Date,
        each
        Limited Partner shall contribute to the Partnership its Pro Rata Share of
        the
        aggregate amount to be contributed by all Limited Partners on such date for
        Partnership Expenses and Organizational Expenses; provided, that a Limited
        Partner in no event shall be required to make Capital Contributions to the
        Partnership on any date pursuant to this Section 3.2(a)(ii) in an amount
        greater than its Unfunded Commitment as of such date.

       

      (b) General
        Partner Contributions.
        The
        General Partner shall make Capital Contributions on each Payment Date in
        an
        amount equal to .01% of all of the Capital Contributions to be made on such
        date
        by all Partners. 

       

      (c) Funding
        Mechanics.
        The
        amount that a Limited Partner is required to contribute on any Payment Date
        shall be specified by the General Partner in a Payment Notice delivered to
        such
        Limited Partner in respect of such Payment Date; provided, that a Limited
        Partner in no event shall be required to make Capital Contributions to the
        Partnership on any date in an amount greater than its Unfunded Commitment
        as of
        such date. Capital Contributions shall be made by wire transfer of immediately
        available funds to the account specified in the related Payment Notice or
        by
        such other method as the General Partner specifies in such Payment
        Notice.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -5-

          
            

          

        

        
           

        

      

      (d) Interest;
        Advances. Except
        as
        expressly provided in this Agreement, no Partner shall be entitled to any
        interest or compensation by reason of its Capital Contributions or by reason
        of
        serving as a Partner. No Partner shall be required to lend any funds to the
        Partnership.

       

      (e) Certain
        Expenditures Preceding the Effective Date.
        Notwithstanding anything in this Agreement to the contrary, to the extent
        that
        the GP Company has made expenditures on behalf of the Partnership in respect
        of
        Organizational Expenses, Partnership Expenses or Portfolio Investments prior
        to
        the Effective Date then, in the sole discretion of the General Partner, the
        GP
        Company shall be reimbursed by the Partnership for the actual amount of such
        expenditures.

       

      (f) No
        Third-Party Beneficiaries.
        The
        provisions of this Agreement relating to Capital Contributions shall not
        confer
        on any Person other than the General Partner (such as creditors of the
        Partnership) the right to make any Payment Notice or other Capital Contribution
        call.

       

      3.3 Subsequent
        Closings.

       

      (a) Generally.
        Subject
        to Section 2.4(b), the General Partner may, in its sole discretion, admit
        additional Limited Partners, or permit any existing Limited Partner to increase
        its Commitment, at one or more subsequent closings that occur after the
        Effective Date (each, a “Subsequent
        Closing”);
        provided, no Subsequent Closing shall occur after the date that is 180 days
        after the Effective Date (the “Final
        Closing Date”).

       

      (b) Capital
        Contributions at Subsequent Closings.

       

      (i) Each
        Limited Partner that is admitted or that increases its Commitment at a
        Subsequent Closing shall make, at such Subsequent Closing, Capital
        Contributions:

       

      (A) for
        Organizational Expenses in an amount such that such Limited Partner’s aggregate
        Capital Contributions for Organizational Expenses incurred as of the date
        of
        such Subsequent Closing are equal to its Pro Rata Share of all such
        Organizational Expenses;

       

      (B) for
        Partnership Expenses in an amount such that such Limited Partner’s aggregate
        Capital Contributions for Partnership Expenses incurred as of the date of
        such
        Subsequent Closing are equal to its Pro Rata Share of all such Partnership
        Expenses; and

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -6-

          
            

          

        

        
           

        

      

      (C) for
        all
        Portfolio Investments in an amount such that such Limited Partner’s aggregate
        Capital Contributions for such Portfolio Investments made by the Partnership
        as
        of the date of such Subsequent Closing and still retained by the Partnership
        as
        of the date of such Subsequent Closing are equal to its Pro Rata Share of
        such
        Portfolio Investments made by the Partnership as of the date of such Subsequent
        Closing and still retained by the Partnership as of the date of such Subsequent
        Closing;

       

      plus
        an
        additional amount (“Additional
        Amount”)
        on
        each amount described in clauses (A), (B) and (C) above at the Reference
        Rate from the first Payment Date relating to the Capital Contributions made
        to
        discharge or fund the particular expense described under clause (A), (B)
        or (C)
        above to such Subsequent Closing date, pro rated based upon the actual number
        of
        days elapsed; provided, however, that no Additional Amount shall be payable
        by
        any Limited Partner in connection with any Subsequent Closing that occurs
        on or
        before the 28th day following the Effective Date. 

       

      (ii) Upon
        receipt of any Capital Contribution referred to in Sections 3.3(b)(i)(A),
        (B) and (C) and any Additional Amount required thereon in connection with
        a
        particular Subsequent Closing, within 30 days after such Subsequent Closing,
        the
        General Partner shall distribute such amounts pro rata among the Limited
        Partners that were admitted at prior closings based on their respective Prior
        Funding Amounts. As used herein, the term “Prior
        Funding Amounts”
means,
        with respect to each Limited Partner that was admitted at a prior closing,
        the
        difference between the Capital Contributions that such Limited Partner has
        already made for Organizational Expenses, Partnership Expenses and Portfolio
        Investments (but, for these purposes, disregarding any Additional Amounts
        paid
        by such Limited Partner at any prior closing), as the case may be, and such
        Limited Partner’s Pro Rata Share of Organizational Expenses, Partnership
        Expenses and Portfolio Investments, as the case may be, of all Limited Partners
        redetermined after giving effect to the admission of additional Limited Partners
        or increase in Commitments of any Limited Partners, in each case, at all
        Subsequent Closings. Such amounts, pending their distribution to Partners,
        shall
        be invested in Temporary Investments. Any amounts (other than Additional
        Amounts) distributed to a Limited Partner pursuant to this
        Section 3.3(b)(ii) shall be added to such Limited Partner’s Unfunded
        Commitment and thereafter shall be treated for all purposes of this Agreement
        as
        if such refunded amount had never been contributed to the Partnership.
        Additional Amounts paid to the Partnership on the payments described in
        Sections 3.3(b)(i)(A), (B) and (C) shall be treated solely for purposes of
        this Agreement as though paid directly to existing Limited Partners by the
        Limited Partners making such payment.

       

      (iii) Notwithstanding
        the foregoing provisions of this Section 3.3, if the General Partner
        determines in its reasonable discretion that value of the Portfolio Investments
        has materially increased prior to any Subsequent Closing, the General Partner
        may elect to admit additional Limited Partners or accept increased Commitments
        at such Subsequent Closing on terms more favorable to the Partnership and
        to the
        then existing Partners than those set forth in Sections 3.3(b)(i) and
        3.3(b)(ii). In the event the General Partner admits additional Limited Partners
        or accepts increased Commitments on such more favorable terms, the General
        Partner shall modify the distributions due to the then existing Partners
        so long
        as such modified distributions are made on a pro rata basis as in
        Section 3.3(b)(ii) and are not less than the distributions the then
        existing Partners would have received pursuant to Sections 3.3(b)(ii) if
        the
        General Partner did not rely on this Section 3.3(b)(iii). 

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -7-

          
            

          

        

        
           

        

      

      3.4 Defaulting
        Limited Partner

       

      (a) If
        any
        Limited Partner fails to make, when due, any portion of a Capital Contribution
        required to be contributed by such Limited Partner pursuant to this Agreement
        or
        to make any other payment required to be made by it hereunder when required
        to
        be made, then the Partnership shall promptly provide written notice of such
        failure to such Limited Partner. If such Limited Partner fails to make such
        Capital Contribution or such other payment within five Business Days after
        receipt of such notice, then the Partnership shall promptly provide a subsequent
        written notice of such failure to such Limited Partner. If such Limited Partner
        fails to make such Capital Contribution or such other payment within 20 Business
        Days after receipt of such subsequent written notice, then, for so long as
        such
        Limited Partner fails to make such Capital Contribution or such other payment,
        such Limited Partner shall be deemed a “Defaulting
        Limited Partner”
and
        the
        remaining provisions of this Section 3.4 shall apply.

       

      (b) Any
        Defaulting Limited Partner may, in the sole discretion of the General Partner
        and in addition to any other remedy contained herein, be charged an additional
        amount on the unpaid balance of any Capital Contributions or other payments
        at
        the Past Due Rate from the date such balance was due and payable through
        the
        date full payment for such balance is actually made, and to the extent such
        additional amount is not otherwise paid such additional amount may be deducted
        from any distribution to the Limited Partner. Any such additional amount
        paid to
        the Partnership (or retained by the Partnership from distributions otherwise
        payable to such Defaulting Limited Partner) shall be allocated and distributed
        to the other Partners pro rata on the basis of their respective
        Commitments.

       

      (c) The
        General Partner shall have the right to determine, in its sole discretion,
        whether or not any Defaulting Limited Partner shall be entitled to participate
        in any vote or consent, or decision with respect to any vote, consent or
        decision required or permitted by such Defaulting Limited Partner under this
        Agreement. If the General Partner determines that such Limited Partner shall
        not
        be entitled to participate in any such vote, consent or decision, such vote,
        consent or decision shall be tabulated or made as if such Defaulting Limited
        Partner were not a Partner (and the terms “Required Interest” and “Majority in
        Interest” shall be calculated without regard to the Interests of such Defaulting
        Limited Partner).

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      (d) i) In
        accordance with the other provisions of this Section 3.4(d), the General
        Partner, in its sole discretion, shall have the right, but not the obligation,
        to allow the Partners (other than the Defaulting Limited Partner) to purchase,
        and to cause the Defaulting Limited Partner to sell (without any action required
        of the Limited Partner), the Defaulting Limited Partner’s Interest for a price
        equal to the lesser of (A) 75% of the fair market value of such Defaulting
        Limited Partner’s Interest and (B) 75% of the capital account balance of
        such Defaulting Limited Partner existing as of the date of the General Partner’s
        notice to such Defaulting Limited Partner of its delinquent Capital Contribution
        or other amounts owed; provided, in no event shall the amount described in
        this
        clause (B) be less than zero (such amount, either (A) or (B), being
        referred to as the “Purchase
        Price”).
        To
        the extent that the Partners (other than the Defaulting Limited Partner)
        have
        elected not to purchase the Defaulting Limited Partner’s Interest, then the
        General Partner may, in its sole discretion, allocate such portion of the
        Defaulting Limited Partner’s Interest not then elected to be purchased to the
        Partnership for purchase in accordance with Section 3.4(d)(iii). For the
        purposes of this Section 3.4(d), the fair market value of the Defaulting
        Limited Partner’s Interest shall be determined by the General Partner in good
        faith. In determining such fair market value, the General Partner may, but
        shall
        not be obligated to, obtain an evaluation or appraisal from an independent
        appraiser, investment advisor or investment banking firm with reasonable
        experience in the oil and gas industry, all fees and expenses of which shall
        be
        borne by the Defaulting Limited Partner, provided that the Partnership shall
        have the right to pay such fees and expenses and deduct the amount from amounts
        payable to the Defaulting Limited Partner under this Section 3.4(d). At any
        time
        within 60 days following the determination of the fair market value of the
        Defaulting Limited Partner’s Interest, the Partners may purchase the Defaulting
        Limited Partner’s Interest in accordance with the provisions of Section
        3.4(d)(ii). Upon tender of the consideration as set forth above to the
        Defaulting Limited Partner, the Partners or the Partnership, as applicable,
        shall be deemed to have purchased the Defaulting Limited Partner’s Interest and
        the General Partner shall amend Schedule A to reflect such Defaulting Limited
        Partner’s Commitment as zero. The payment of the Purchase Price to be made to
        the Defaulting Limited Partner pursuant to Sections 3.4(d)(ii) or
        3.4(d)(iii), as applicable, is, and shall be conclusively deemed to be, in
        complete liquidation and satisfaction of all the rights and interest of the
        Defaulting Limited Partner (and all Persons claiming by, through or under
        the
        Defaulting Limited Partner) in and with respect to the Partnership including
        any
        interest in the Partnership, any rights to specific Partnership property
        and
        (insofar as the affairs of the Partnership are concerned) against the Partners
        and shall constitute a compromise to which all Partners have agreed pursuant
        to
        section 17-502(b) of the Act.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -9-

          
            

          

        

        
           

        

      

      (ii) Subject
        to Section 3.4(d)(i), the General Partner shall allocate the Defaulting Limited
        Partner’s Interest to the Partners (other than the Defaulting Limited Partner)
        on a pro rata basis (based on their relative Commitments) for purchase if
        such
        Partners (other than the Defaulting Limited Partner) so elect. The provisions
        of
        the preceding sentence shall be repeated until the entire Interest of the
        Defaulting Limited Partner shall have been allocated to the purchasing Partners
        (other than the Defaulting Partner). Any Limited Partner electing to purchase
        a
        portion of the Defaulting Limited Partner’s Interest shall be deemed to have
        increased its Commitment by a proportionate share of the Defaulting Limited
        Partner’s Commitment. Each Partner purchasing a portion of the Defaulting
        Limited Partner’s Interest shall, as consideration for such purchase, tender to
        such Defaulting Limited Partner either (as elected by such purchasing Partner
        at
        the time of such purchase) (A) cash in the amount of the Purchase Price for
        such portion of the Defaulting Limited Partner’s Interest (pro-rated for the
        portion of the Interest purchased by such Partner) or (B) a non-interest
        bearing promissory note of such purchasing Partner (containing an express
        provision that the holder of the promissory note would have recourse only
        against the portion of the Interest purchased from such Defaulting Limited
        Partner and not against the purchasing Partner for repayment of such promissory
        note) in the original principal amount of the Purchase Price for such portion
        of
        the Defaulting Limited Partner’s Interest (pro-rated for the portion of the
        Interest purchased by such Partner), due and payable on the date of the Final
        Distribution. 

       

      (iii) Subject
        to Sections 3.4(d)(i) and 3.4(d)(ii), the General Partner shall allocate
        to the
        Partnership for purchase such portion of the Defaulting Limited Partner’s
        Interest that the Partners (other than the Defaulting Limited Partner) have
        elected not to purchase. The Partnership may purchase such portion by tendering
        to such Defaulting Limited Partner a non-interest bearing promissory note
        of the
        Partnership (containing an express provision that the holder of the promissory
        note would have recourse only against the Defaulting Limited Partner’s Interest
        and not against the Partnership or any of the Partnership’s assets for repayment
        of such promissory note) in the original principal amount of the Purchase
        Price,
        due and payable on the date of the Final Distribution.

       

      (e) No
        right,
        power or remedy conferred upon the General Partner in this Section 3.4
        shall be exclusive, and each such right, power or remedy shall be cumulative
        and
        in addition to every other right, power or remedy whether conferred in this
        Section 3.4 or now or hereafter available at law or in equity or by statute
        or otherwise. No course of dealing between the General Partner and any
        Defaulting Limited Partner and no delay in exercising any right, power or
        remedy
        conferred in this Section 3.4 or now or hereafter existing at law or in
        equity or by statute or otherwise shall operate as a waiver or otherwise
        prejudice any such right, power or remedy.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -10-

          
            

          

        

        
           

        

      

      ARTICLE
        IV

      Capital
        Accounts; Allocations; Distributions; 

      Return
        of Distributions 

       

      4.1 Capital
        Accounts.

       

      (a) The
        Partnership shall maintain for each Partner a Capital Account in accordance
        with
        the rules of Treasury Regulation section 1.704-1(b)(2)(iv). Such Capital
        Account
        shall be increased by (i) the cash amount or the Net Agreed Value of all
        Capital Contributions made by such Partner to the Partnership pursuant to
        this
        Agreement and (ii) all items of Partnership income and gain (including
        income and gain exempt from tax) computed in accordance with Section 4.1(b)
        and allocated to such Partner pursuant to Section 4.2, and decreased by
        (x) the amount of cash or Net Agreed Value of all actual and deemed
        distributions of cash or property made to such Partner pursuant to this
        Agreement and (y) all items of Partnership deduction and loss computed in
        accordance with Section 4.1(b) and allocated to such Partner pursuant to
        Section 4.2.

       

      (b) For
        purposes of computing the amount of any item of income, gain, loss or deduction
        to be reflected in the Partners' Capital Accounts, the determination,
        recognition and classification of any such item shall be the same as its
        determination, recognition and classification for federal income tax purposes
        (including any method of depreciation, cost recovery or amortization used
        for
        that purpose), provided, that:

       

      (i) except
        as
        otherwise provided in Treasury Regulation section 1.704-1(b)(2)(iv)(m), the
        computation of all items of income, gain, loss and deduction shall be made
        without regard to any election under section 754 of the Code which may be
        made
        by the Partnership and, as to those items described in section 705(a)(1)(B)
        or
        705(a)(2)(B) of the Code, without regard to the fact that such items are
        not
        includable in gross income or are neither currently deductible nor capitalized
        for federal income tax purposes;

       

      (ii) any
        income, gain or loss attributable to the taxable disposition of any Partnership
        property shall be determined as if the adjusted basis of such property as
        of
        such date of disposition were equal in amount to the Partnership's Carrying
        Value with respect to such property as of such date; and

       

      (iii) upon
        an
        adjustment pursuant to Section 4.1(d) to the Carrying Value of any
        Partnership property subject to depreciation, cost recovery, depletion or
        amortization, any further deductions for such depreciation, cost recovery,
        depletion or amortization attribut-able to such property shall be determined
        as
        if the adjusted basis of such property were equal to the Carrying Value of
        such
        property immediately following such adjustment. 

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -11-

          
            

          

        

        
           

        

      

      (c) A
        transferee of an Interest shall succeed to a pro rata portion of the Capital
        Account of the transferor relating to the Interest transferred. If the transfer
        causes a termination of the Partnership under section 708(b)(1)(B) of the
        Code,
        the Partnership's assets and liabilities shall be deemed to have been
        transferred to a successor Partnership in exchange for the interests in the
        successor Partnership and immediately thereafter, the Partnership shall be
        deemed to have distributed the interests in the successor Partnership to
        the
        transferee and the remaining Partners in accordance with their respective
        interests in the Partnership in the manner specified by Treasury Regulation
        section 1.708-1(b)(4). In such event, the Carrying Values of the Partnership’s
        assets shall not be adjusted immediately prior to such deemed transfer pursuant
        to Section 4.1(d)(ii). The Capital Accounts of such successor Partnership
        shall be maintained in accordance with the provisions of this
        Section 4.1.

       

      (d) ii) In
        accordance with the provisions of Treasury Regulation section
        1.704-1(b)(2)(iv)(f), upon a Partner's contribution to the Partnership of
        cash
        or properties in exchange for an Interest, the Capital Accounts of all Partners
        and the Carrying Values of all Partnership assets shall, immediately prior
        to
        such issuance, be adjusted upward or downward to reflect any Unrealized Gain
        or
        Unrealized Loss attributable to the Partnership’s assets, as if such Unrealized
        Gain or Unrealized Loss had been recognized on an actual sale of each such
        property immediately prior to such issuance and had been allocated to the
        Partners at such time pursuant to Section 4.2. In determining such
        Unrealized Gain or Unrealized Loss, the fair market value of all Partnership
        assets (including cash or cash equivalents) immediately prior to the issuance
        of
        an Interest shall be determined by the General Partner, using such reasonable
        method of valuation as it may adopt.

       

      (ii) In
        accordance with the provisions of Treasury Regulation section
        1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed distribution
        to
        a Partner of any Partnership asset (other than a distribution of cash that
        is
        not in redemption or retirement- of an Interest), the Capital Accounts of
        all
        Partners and the Carrying Value of such Partnership asset shall be adjusted
        upward or downward to reflect any Unrealized Gain or Unrealized Loss
        attributable to such Partnership asset, as if such Unrealized Gain or Unrealized
        Loss had been recognized in a sale of such asset immediately prior to such
        distribution for an amount equal to its fair market value, and had been
        allocated to the Partners, at such time, pursuant to Section 4.2. In
        determining such Unrealized Gain or Unrealized Loss, the fair market value
        of
        each such distributed asset as of any date of determination shall be determined
        by the General Partner, using such reasonable method of valuation as it may
        adopt.

       

      4.2 Allocations
        for Accounting Purposes.
        For
        accounting purposes, all items of income, gain, loss, deduction and credit
        of
        the Partnership (except as provided in Section 9.3) shall be allocated
        among the Partners as follows:

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
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      (a) Except
        as
        may be required by the Code, Net Income and Net Loss shall be allocated among
        the Partners as follows: 

       

      (i) Net
        Income shall be allocated

       

      (A) First,
        100% to the General Partner until the cumulative amount allocated pursuant
        to
        this Section 4.2(a)(i)(A) for the current and each prior taxable year is
        equal to the cumulative amount of Net Losses allocated to such Partner pursuant
        to Section 4.2(a)(ii)(C);

       

      (B) Second,
        100% to the Partners until the cumulative amount of Net Income allocated
        pursuant to this Section 4.2(a)(i)(B) for the current and each prior
        taxable year is equal to the cumulative amount of Net Losses allocated to
        such
        Partners pursuant to Section 4.2(a)(ii)(B); and

       

      (C) Thereafter,
        30% to the General Partner and 70% to such Limited Partner.

       

      (ii) Net
        Loss
        shall be allocated

       

      (A) First,
        30% to the General Partner and 70% to such Limited Partner until the cumulative
        amount of Net Losses allocated pursuant to this Section 4.2(a)(ii)(A) for
        the current and each prior taxable year is equal to the cumulative amount
        of Net
        Income allocated to such Partner pursuant to
        Section 4.2(a)(i)(C);

       

      (B) Second,
        100% to the Partners in proportion to and to the extent of their Adjusted
        Capital Account balances; and

       

      (C) Thereafter,
        100% to the General Partner.

       

      (b) Simulated
        Depletion with respect to each separate oil and gas property shall be allocated
        to the Partners in the same proportion that the Partners (or their predecessors
        in interest) were allocated the adjusted tax basis of such property under
        Section 4.3(b). Simulated Gain attributable to the sale or other
        disposition of an oil or gas property shall be allocated to the Partners
        in the
        same manner as the amount realized from such sale or other disposition in
        excess
        of the Carrying Value of such property is allocated to Partners pursuant
        to
        Section 4.3(c)(ii). Simulated Loss attributable to the sale or disposition
        of an oil or gas property shall be allocated to the Partners in the same
        proportion that the partners (or their predecessors in interest) were allocated
        the adjusted tax basis of such property under Section 4.3(b).

       

      (c) Gains
        and
        losses arising from the sale or other disposition of Partnership assets (other
        than oil or gas properties) after the receipt by the Limited Partners of
        their
        respective Preferred Return Amounts under Section 4.5(a)(ii) shall be allocated
        to the Partners in such a manner that, to the maximum extent possible, the
        Capital Accounts of the Partners shall be in proportion to the percentage
        amounts set forth in Section 4.5(a)(iii).

       

      
        
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            Exploration II, L.P.

          Amended
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      (d) Notwithstanding
        any other provisions of this Section 4.2, the following special allocations
        shall be made for each taxable period:

       

      (i) Notwithstanding
        any other provision of this Section 4.2, if there is a net decrease in
        Partnership Minimum Gain during any Partnership taxable period, each Partner
        shall be allocated items of Partnership income and gain for such period (and,
        if
        necessary, subsequent periods) in the manner and amounts provided in Treasury
        Regulation section 1.704-2(f)(6),(g)(2), and (j)(2)(i). For purposes of this
        Section 4.2(d)(i), each Partner's Capital Account shall be determined and
        the allocation of income or gain required hereunder shall be effected, prior
        to
        the application of any other allocations pursuant to this Section 4.2 with
        respect to such taxable period. This Section 4.2(d)(i) is intended to
        comply with the Partnership Minimum Gain chargeback requirement in Treasury
        Regulation section 1.704-2(f) and shall be interpreted consistently
        therewith.

       

      (ii) Notwithstanding
        the other provisions of this Section 4.2 (other than (i) above), if there
        is a net decrease in Partner Nonrecourse Debt Minimum Gain during any
        Partnership taxable period, any Partner with a share of Partner Nonrecourse
        Debt
        Minimum Gain at the beginning of such taxable period shall be allocated items
        of
        Partnership income and gain for such period (and, if necessary, subsequent
        periods) in the manner and amounts provided in Treasury Regulation section
        1.704-2(i)(4) and (j)(2)(ii). For purposes of this Section 4.2(d) each
        Partner's Adjusted Capital Account balance shall be determined, and the
        allocation of income and gain required hereunder shall be effected, prior
        to the
        application of any other allocations pursuant to this Section 4.2, other
        than Section 4.2(d)(i) above, with respect to such taxable period. This
        Section 4.2(d)(ii) is intended to comply with the Partner Nonrecourse Debt
        Minimum Gain chargeback requirement in Treasury Regulation section 1.704-2(i)(4)
        and shall be interpreted consistently therewith.

       

      (iii) Except
        as
        provided in (i) and (ii) above, in the event any Partner unexpectedly receives
        any adjustments, allocations or distributions described in Treasury Regulation
        section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Partnership income
        and
        gain shall be specially allocated to such Partner in an amount and manner
        sufficient to eliminate, to the extent required by such Treasury Regulation,
        the
        deficit balance, if any, in its Adjusted Capital Account created by such
        adjustments, allocations or distributions as quickly as possible unless such
        deficit balance is otherwise eliminated pursuant to (i) or (ii)
        above.

       

      (iv) In
        the
        event any Partner has a deficit balance in its Adjusted Capital Account at
        the
        end of any Partnership taxable period, such Partner shall be specially allocated
        items of Partnership gross income and gain in the amount of such excess as
        quickly as possible; provided, that an allocation pursuant to this
        Section 4.2(d)(iv) shall be made only if and to the extent that such
        Partner would have a deficit balance in its Adjusted Capital Account after
        all
        other allocations provided in this Section 4.2(d) have been tentatively
        made as if this Section 4.2(d)(iv) were not in this Agreement.

       

      (v) Nonrecourse
        Deductions for any taxable period shall be allocated to the Partners in
        accordance with their respective Percentage Interests in the
        Partnership.

       

      
        
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            Exploration II, L.P.

          Amended
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      (vi) Partner
        Nonrecourse Deductions for any taxable period shall be allocated 100% to
        the
        Partner that bears the Economic Risk of Loss with respect to the Partner
        Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable
        in accordance with Treasury Regulation section 1.704-2(i). If more than one
        Partner bears the Economic Risk of Loss with respect to a Partner Nonrecourse
        Debt, Partner Nonrecourse Deductions attributable thereto shall be allocated
        between or among such Partners in accordance with the ratios in which they
        share
        such Economic Risk of Loss.

       

      (vii) To
        the
        extent an adjustment to the adjusted tax basis of any Partnership asset pursuant
        to sections 734(b) or 743(b) of the Code is required, pursuant to Treasury
        Regulation section 1.704-1(b)(2)(iv)(m), to be taken into account in determining
        Capital Accounts, the amount of such adjustment to the Capital Accounts shall
        be
        treated as an item of gain (if the adjustment increases the basis of the
        asset)
        or loss (if the adjustment decreases such basis), and such item of gain or
        loss
        shall be specially allocated to the Partners in a manner consistent with
        the
        manner in which their Capital Accounts are required to be adjusted pursuant
        to
        such provisions.

       

      (viii) Notwithstanding
        any other provision of this Section 4.2 other than the Required
        Allocations, the Required Allocations shall be taken into account in making
        the
        Agreed Allocations so that, to the extent possible, the net amount of items
        of
        income, gain, loss and deduction allocated to each Partner pursuant to the
        Required Allocations and Agreed Allocations, together, shall be equal to
        the net
        amount of such items that would have been allocated to each such Partner
        under
        the Agreed Allocations if the Required Allocations had not otherwise been
        provided for in this Section 4.2.

       

      (e) Upon
        winding up of the Partnership, gain or loss from the sale of Partnership
        Properties (including Net Income or Net Loss, Simulated Gains and Simulated
        Losses and Unrealized Gain and Unrealized Loss inherent in Partnership assets
        described in Section 9.3) shall be allocated among the Partners, to the
        extent possible, in such amounts as will make the balance in each Partner’s
        Capital Account equal the amount such Partner would be entitled to receive
        if
        the proceeds resulting from such sales (including any proceeds which would
        have
        resulted from the sale of Partnership assets described in Section 9.3) were
        distributable under Section 4.5. If there is insufficient gain to so
        balance the General Partner’s capital account, the amount of such deficit shall
        be paid to the General Partner upon such winding up as a guaranteed payment
        (within the meaning of section 707(c) of the Code) and the related deduction
        shall be allocated wholly to the Limited Partners.

       

      4.3 Allocation
        for Income Tax Purposes.

       

      (a) Except
        as
        provided in this Section 4.3, each item of income, gain, loss and deduction
        of the Partnership for federal income tax purposes shall be allocated among
        the
        Partners in the same manner as such items are allocated for book purposes
        under
        Section 4.2.

       

      
        
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            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      (b) The
        deduction for depletion with respect to each separate oil and gas property
        (as
        defined in section 614 of the Code) shall, in accordance with
        section 613A(c)(7)(D) of the Code, be computed for federal income tax
        purposes separately by the Partners rather than the Partnership. Except as
        provided in Section 4.3(d), for purposes of such computation, the
        proportionate share of the adjusted tax basis of each oil and gas property
        allocated among the Partners shall be determined in accordance with the
        following principles:

       

      (i) In
        the
        case of a property acquired or developed prior to the receipt by the Limited
        Partners of cumulative distributions under Section 4.5(a)(i) equal to the
        aggregate of their respective Capital Contributions, to the Partners in
        accordance with the percentage amounts set forth in Section
        4.5(a)(i).

       

      (ii) In
        the
        case of property acquired or developed prior to the receipt by the Limited
        Partners of their respective Preferred Return Amounts under Section 4.5(a)(ii),
        to the Partners in accordance with the percentage amounts set forth in Section
        4.5(a)(ii).

       

      (iii) In
        all
        other cases to the Partners in accordance with the percentage amounts set
        forth
        in Section 4.5(a)(iii).

       

      Each
        Partner, with the assistance of the General Partner, shall separately keep
        records of its share of the adjusted tax basis in each separate oil and gas
        property, adjust such share of the adjusted tax basis for any cost or percentage
        depletion allowable with respect to such property and use such adjusted tax
        basis in the computation of its cost depletion or in the computation of its
        gain
        or loss on the disposition of such property by the Partnership. Upon the
        request
        of the General Partner, each Limited Partner shall advise the General Partner
        of
        its adjusted tax basis in each separate oil and gas property and any depletion
        computed with respect thereto, both as computed in accordance with the
        provisions of this subsection. The General Partner may rely on such information
        and, if it is not provided by the Limited Partner, may make such reasonable
        assumptions as it shall determine with respect thereto.

       

      (c) Except
        as
        provided in Section 4.3(d), for the purposes of the separate computation of
        gain or loss by each Partner on the sale or disposition of each separate
        oil and
        gas property (as defined in section 614 of the Code), the Partnership’s
        allocable share of the “amount realized” (as such term is defined in
        section 1001(b) of the Code) from such sale or disposition shall be
        allocated for federal income tax purposes among the Partners as
        follows:

       

      (i) first,
        to
        the extent such amount realized constitutes a recovery of the Simulated Basis
        of
        the property, to the Partners in the same percentages as the depletable basis
        of
        such property was allocated to the Partners pursuant to
        Section 4.3(b);

       

      (ii) second,
        the remainder of such amount realized, if any, to the Partners so that, to
        the
        maximum extent possible, the total amount realized allocated to each Partner
        under this Section 4.3(c)(ii) will equal such Partner’s distributive share
        under Section 4.5(a) of the proceeds derived by the Partnership from such
        sale
        or disposition.

       

      
        
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            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      (d) The
        Partners recognize that with respect to a Contributed Property and an Adjusted
        Property, there may be a difference between the Carrying Value of such property
        at the time of contribution or revaluation, as the case may be, and the adjusted
        tax basis of such property at such time. In the case of a Contributed Property
        or an Adjusted Property, all items of tax depreciation, cost recovery,
        amortization, and gain or loss with respect to such Contributed or Adjusted
        Properties (referred to as “Section
        704(c) Items”)
        shall
        be allocated among the Partners to take into account the disparities between
        the
        Carrying Values and the adjusted tax basis with respect to such properties
        in
        accordance with the provisions of sections 704(b) and 704(c) of the Code
        and the
        Treasury Regulations under those sections; provided, however, that any tax
        items
        not required to be allocated under sections 704(b) or 704(c) of the Code
        shall
        be allocated in the same manner as such gain or loss would be allocated for
        book
        purposes under Section 4.2.

       

      (e) All
        items
        of income, gain, loss, deduction and credit allocated to the Partners in
        accordance with the provisions hereof and basis allocations recognized by
        the
        Partnership for federal income tax purposes shall be determined without regard
        to any election under section 754 of the Code which may be made by the
        Partnership; provided, however, such allocations, once made, shall be adjusted
        as necessary or appropriate to take into account the adjustments permitted
        by
        sections 734 and 743 of the Code.

       

      (f) If
        any
        deductions for depreciation, cost recovery or depletion are recaptured as
        ordinary income upon the sale or other disposition of Portfolio Investments,
        the
        ordinary income character of the gain from such sale or disposition shall
        be
        allocated among the Partners in the same ratio as the deductions giving rise
        to
        such ordinary income character were allocated.

       

      4.4 Distributions
        -- General Principles.

       

      (a) Generally. Except
        as
        otherwise expressly provided in this Agreement, no Partner or Assignee shall
        have the right to withdraw capital from the Partnership or to receive any
        distribution or return of its Capital Contribution. Distributions of Partnership
        assets that are provided for in Section 4.5 or in Article IX shall be
        made only to persons who, according to the books and records of the Partnership,
        are as of the date determined by the General Partner, the holders of record
        of
        the Interests with respect to which distributions are to be made.

       

      (b) Restrictions
        on Distributions.
        Notwithstanding anything in this Agreement to the contrary, no distribution
        shall be made pursuant to Section 4.5(a): (i) during the Commitment Period,
        it being understood that all cash available to the Partnership during the
        Commitment Period shall be either invested in Portfolio Investments or used
        to
        pay Partnership Expenses and Organizational Expenses; (ii) if such
        distribution would violate any contract or agreement to which the Partnership
        is
        then a party or any law, rule, regulation, order or directive of any
        Governmental Authority then applicable to the Partnership; (iii) to the
        extent that the General Partner reasonably determines that any amount otherwise
        distributable should be retained by the Partnership to pay, or to establish
        a
        reserve for the payment of, any Partnership Expenses or any other expense,
        liability or obligation of the Partnership, whether liquidated, fixed,
        contingent or otherwise, including any abandonment liability with respect
        to any
        Oil and Gas Interest or (iv) to the extent that the General Partner
        determines in its reasonable discretion that the cash available to the
        Partnership is otherwise insufficient to permit such distribution.

       

      
        
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            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      (c) Withholding.
        Notwithstanding any other provision of this Agreement, the General Partner
        is
        authorized to take any action that it reasonably determines to be necessary
        or
        appropriate to cause the Partnership to comply with any United States federal,
        state or local withholding requirement with respect to any allocation, payment
        or distribution by the Partnership to any Partner or other Person. All amounts
        so withheld, and, in the manner determined by the General Partner, amounts
        withheld with respect to any allocation, payment or distribution by any Person
        to the Partnership, shall be treated as distributions to the applicable Partners
        under Section 4.5. If any such withholding requirement with respect to any
        Partner exceeds the amount distributable to such Partner under Section 4.5,
        or if any such withholding requirement was not satisfied with respect to
        any
        amount previously allocated or distributed to such Partner, such Partner
        and any
        successor or assignee with respect to such Partner’s Interest in the Partnership
        hereby indemnifies and agrees to hold harmless the other Partners and the
        Partnership for such excess amount or such withholding requirement, as the
        case
        may be.

       

      4.5 Amounts
        and Priority of Distributions.

       

      (a) General
        Distributions. Subject
        to the restrictions set forth in Section 4.4(b), from time to time
        following the expiration or early termination of the Commitment Period (but
        at
        least once each calendar quarter) the General Partner shall determine in
        its
        reasonable discretion to what extent (if any) the Partnership’s cash on hand
        exceeds the sum of (i) its current expenses and other obligations and (ii)
        any
        reserves established by the General Partner in accordance with Section
        4.4(b)(iii) (the amount of such excess being referred to herein as “Distributable
        Cash”).
        Within 15 days following each such determination, the General Partner shall
        cause the Partnership to distribute all Distributable Cash to the Partners
        in
        accordance with this Section 4.5. All Distributable Cash shall, prior to
        the distribution thereof, be allocated to the Partners in proportion to each
        of
        their respective Percentage Interests. The amount allocated to the General
        Partner pursuant to the preceding sentence shall be distributed to the General
        Partner. Amounts allocated to each Limited Partner pursuant to the third
        sentence of this Section 4.5(a) shall be further allocated and distributed
        between such Limited Partner, on the one hand, and the General Partner, on
        the
        other hand, as follows:

       

      (i) first,
        10% to the General Partner and 90% to such Limited Partner until such Limited
        Partner has received pursuant to this clause (i) cumulative distributions
        in an
        amount equal to the aggregate of such Limited Partner’s Capital Contributions;

       

      (ii) second,
        20% to the General Partner and 80% to such Limited Partner until such Limited
        Partner has received pursuant to this clause (ii) an amount equal to such
        Limited Partner’s Preferred Return Amount; and  

       

      (iii) thereafter,
        30% to the General Partner and 70% to such Limited Partner.

       

      
        
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            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      (b) Distributions
        in connection with Subsequent Closings.
        Notwithstanding anything in this Agreement to the contrary, upon receipt
        of any
        Capital Contribution at a Subsequent Closing as referred to in clauses (A),
        (B) or (C) of Section 3.3(b)(i) and any Additional Amount thereon, the
        General Partner shall distribute such amounts among the Limited Partners
        that
        were admitted at prior closings in accordance with
        Section 3.3(b)(ii).

       

      4.6 Tax
        Distributions.
        Prior
        to
        making distributions pursuant to Section 4.5, to the extent the General
        Partner determines in its reasonable discretion that the Partnership has
        funds
        on hand available for distribution, on or prior to April 1 of each year
        (the “Tax
        Distribution Date”),
        the
        Partnership shall distribute to the Partners an amount equal to such Partner’s
        Assumed Tax Liability, if any. “Assumed
        Tax Liability”
means
        an amount, as determined in good faith by the General Partner, that is equal
        to
        (a) the cumulative amount of state and federal income taxes (including any
        applicable estimated taxes) that would be due from such Partner as of such
        Tax
        Distribution Date, assuming such Partner were an individual resident of the
        State of Texas and who earned solely the items of income, gain, deduction,
        loss,
        and/or credit allocated to such Partner pursuant to Section 4.3, reduced by
        (b) all previous distributions made pursuant to this Section 4.6.
        Distributions made pursuant to this Section 4.6 shall be treated as
        advances of distributions to be made under Section 4.5 and shall be
        credited against and shall reduce future distributions to be made to the
        recipient Partner pursuant to that section.

       

      ARTICLE
        V

      Management
        of the Partnership

       

      5.1 General
        Partner.

       

      (a) General
        Powers of the General Partner.
        The
        management and operation of the Partnership shall be vested exclusively in
        the
        General Partner, which shall have the power by itself and shall be authorized
        and empowered on behalf and in the name of the Partnership to carry out any
        and
        all of the objectives and purposes of the Partnership and to perform all
        acts
        and enter into and perform all contracts and other undertakings that it may
        in
        its sole discretion deem necessary or advisable or incidental thereto, all
        in
        accordance with and subject to the other terms of this Agreement.

       

      (b) Specific
        Powers of the General Partner.
        Without
        limiting the generality of Section 5.1(a), and in addition to any other
        power or authority of the General Partner provided for elsewhere in this
        Agreement, the General Partner is hereby authorized and empowered on behalf
        and
        in the name of the Partnership, or on its own behalf and in its own name,
        or
        through agents, as may be appropriate, all in accordance with and subject
        to the
        limitations contained elsewhere in this Agreement, to:

       

      
        
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            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      (i) make
        all
        decisions concerning the origination, investigation, selection, negotiation,
        acquisition, structuring, financing, operation, monitoring, disposition or
        abandonment of Portfolio Investments;

       

      (ii) enter
        into mineral leases, farm-outs, farm-ins, exploration agreements, operating
        agreements, drilling contracts, participation agreements, royalty agreements
        and
        other agreements relating to the ownership and operation of Oil and Gas
        Interests; 

       

      (iii) market
        or
        exchange the oil, gas and liquids production accruing to the Partnership
        or
        otherwise acquired by the Partnership and to execute transfer orders, division
        orders, gas sales agreements, gas processing agreements, product sales
        agreements, exchange agreements, transportation agreements and any other
        agreements in connection with such marketing, exchange, sale and transportation
        of production;

       

      (iv) enter
        into commodity price hedging agreements with respect to any oil, gas or liquids
        production , but only as a strategy of risk management (and not for speculative
        purposes) in order to minimize the risk associated with the fluctuation of
        prices to be received by the Partnership with respect to the Partnership’s
        future oil, gas and liquids production;

       

      (v) amend,
        modify or rescind, or make elections, waivers or other decisions under, any
        of
        the agreements described in this Section 5.1(b) (in whole or in part) and
        to
        settle any disagreement arising under any of the same;

       

      (vi) operate
        and maintain any oil and gas wells, injection and disposal wells, production
        equipment, pumps, compressor stations, pipelines and other assets relating
        to
        Oil and Gas Interests;

       

      (vii) pay
        delay
        rentals, bonus payments, shut-in gas royalty payments, property taxes, surface
        damages, rights of way, easements and any other amounts the General Partner
        deems necessary or appropriate for the maintenance or operation of any Oil
        and
        Gas Interest;

       

      (viii) explore
        and prospect by geological, geophysical or other methods for the location
        of
        anomalies or other indications favorable to the accumulation of oil and gas,
        including specifically the power to contract with third parties for such
        purpose;

       

      (ix) purchase,
        acquire, lease, construct and operate equipment and any other type of personal
        property in connection with the development, exploration, operation or
        maintenance of any Oil and Gas Interest;

       

      (x) purchase,
        acquire, license and develop geological and geophysical data relating to
        any Oil
        and Gas Interest;

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      (xi) contract
        for the services of employees, agents, independent contractors, brokers,
        consultants, engineers, attorneys, accountants and management
        companies;

       

      (xii) open,
        maintain and close bank accounts, to designate and change signatories on
        such
        accounts and to draw checks and other orders for the payment of
        monies;

       

      (xiii) invest
        Partnership funds that, from time to time, are not required for the operation
        of
        the business of the Partnership in Temporary Investments;

       

      (xiv) collect
        all sums due the Partnership;

       

      (xv) sue,
        complain and defend in connection with any action, dispute or
        liability;

       

      (xvi) appear
        and represent the Partnership before any governmental authority or regulatory
        agency and make all necessary or appropriate filings before such authority
        or
        agency;

       

      (xvii) prepare
        and file all Partnership tax returns and, consistent with Article VII, to
        make
        all elections for the Partnership thereunder;

       

      (xviii) pay
        all
        Partnership Expenses and Organizational Expenses; 

       

      (xix) subject
        to the approval of a Required Interest of the Limited Partners, merge or
        consolidate the Partnership with or into any other Person; and

       

      (xx) enter
        into and perform all other contracts, agreements and undertakings binding
        upon
        the Partnership, and to take any and all other action in connection with
        the
        Partnership, all as may be deemed by the General Partner to be necessary,
        appropriate or advisable in furtherance of the Partnership’s business and
        purpose as set forth in Section 2.4.

       

      (c) Borrowing
        and Guarantees.
        The
        General Partner may, in its sole discretion, cause the Partnership to (i)
        borrow
        money from any Person, including the General Partner and its Affiliates,
        (ii)
        guarantee loans
        or
        other extensions of credit to any Person, including the General Partner and
        its
        Affiliates (provided that no such guarantee shall extend beyond the term
        of the
        Partnership) and (iii) pledge or otherwise encumber any Partnership asset
        in
        connection with any such loan or guarantee, in each case for the purpose
        of
        covering Partnership Expenses and Organizational Expenses or making Portfolio
        Investments; provided that the General Partner shall provide the Limited
        Partners with prior written notice and disclosure of any borrowings from
        a
        Partner or its Affiliates and any such borrowings shall otherwise comply
        with
        the applicable provisions of Section 5.4. Notwithstanding anything in this
        Agreement to the contrary, the aggregate amount of any outstanding indebtedness
        for borrowed money incurred or guaranteed by the Partnership shall not exceed
        $30,000,000. In connection with any indebtedness of the Partnership, the
        General
        Partner may, in its sole discretion, enter into interest rate hedging agreements
        on behalf of the Partnership, but only as a strategy of risk management (and
        not
        for speculative purposes) in order to minimize the risk associated with the
        fluctuation of interest rates to be paid by the Partnership with respect
        to any
        such indebtedness.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      (d) Nothing
        in this Article V shall be construed to alter or modify the characterizations
        and allocations of GP Expenses and Partnership Expenses set forth in Article
        VI.

       

      

      5.2 Limited
        Partners.
        Except
        as expressly provided in this Agreement, no Limited Partner in its capacity
        as
        such shall have the right or power to participate in the management or affairs
        of the Partnership, nor shall any Limited Partner in its capacity as such
        have
        the power to sign for or bind the Partnership. The exercise by any Limited
        Partner of any right conferred herein shall not be construed to constitute
        participation by such Limited Partner in the control of the business of the
        Partnership so as to make such Limited Partner liable as a general partner
        for
        the debts and obligations of the Partnership for purposes of the
        Act.

       

      5.3 Advisory
        Committee; Resolution of Conflicts of Interest.
        

       

      (a) The
        Partnership shall, within three months of the date of this Agreement, form
        an
        advisory committee which shall consist of not less than three nor more than
        seven members, none of whom may be an Affiliate of the General Partner (the
        “Advisory
        Committee”).
        The
        members (each, an “Advisory
        Committee Member”)
        shall
        be persons nominated by the General Partner and approved by a Majority in
        Interest of the Limited Partners. Additional Advisory Committee Members and
        replacement Advisory Committee Members shall be nominated by the General
        Partner
        and shall be approved by a Majority in Interest of the Limited Partners.
        Any
        Advisory Committee Member may be removed at any time, with or without cause,
        by
        resolution of, or by written consent signed by, at least a Majority in Interest
        of the Limited Partners. Notwithstanding the foregoing, for so long as a
        Limited
        Partner holds a Percentage Interest of 15% or greater, such Limited Partner
        shall be an Advisory Committee Member and shall not be subject to the approval
        or removal by the Limited Partners.

       

      (b) The
        Advisory Committee shall meet at such times and from time to time as the
        members
        may determine. The Advisory Committee shall provide notice of each meeting
        to
        the General Partner. Advisory Committee Members shall receive from the
        Partnership reimbursement for any out-of-pocket expenses reasonably incurred
        in
        connection with carrying out their functions for the Partnership.

       

      (c) To
        the
        extent permitted under §17-303 of the Act for persons who are not deemed to
        participate in the control of the business, the functions of the Advisory
        Committee shall be (i) to
        resolve any potential conflicts of interest between the Partnership, on the
        one
        hand, and the General Partner and its Affiliates, other than the Partnership,
        on
        the other hand, that may be presented to the Advisory Committee from time
        to
        time by the General Partner in its sole discretion;
        (ii) to
        perform such other functions and duties as are expressly provided by this
        Agreement; and (iii) to review and discuss with the General Partner such
        other matters as the General Partner shall request from time to time. All
        approvals, disapprovals and other actions taken by the Advisory Committee
        shall
        be authorized by a majority of the Advisory Committee Members then holding
        office. For purposes of Section 5.4 of this Agreement, the approval of a
        majority of the Advisory Committee Members then holding office shall constitute
        the approval of a Majority in Interest of Limited Partners.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      (d) The
        Advisory Committee shall have the authority to adopt rules and procedures,
        not
        inconsistent with this Agreement, relating to the conduct of its
        affairs.

       

      (e) The
        Advisory Committee Members shall exercise their best judgment in carrying
        out
        their functions for the Partnership. Each Advisory Committee Member shall
        be
        indemnified to the extent set forth in Section 10.2 of this
        Agreement.

       

      (f) The
        General Partner shall be authorized but not required in connection with the
        resolution of any conflict of interest to seek approval of the Advisory
        Committee of any such resolution, and the General Partner may also adopt
        a
        resolution or course of action (including engaging in any transaction) that
        has
        not received approval of the Advisory Committee, so long as the General Partner
        determines that the resolution or course of action taken with respect to
        a
        conflict of interest satisfies either of the standards set forth in Sections
        5.4(b)(i) or (b)(ii). 

       

      5.4 Transactions
        with Affiliates.

       

      (a) Restrictions
        on Certain Transactions with Affiliates.
        Without
        the prior approval of a Majority in Interest of Limited Partners, except
        (i) for
        the reimbursement by the Partnership to Fund I of up to $250,000 of legal,
        accounting and other organizational expenses incurred by Fund I from which
        the
        Partnership has derived or will derive a significant benefit, (ii) for any
        acquisition, farm-in, operating agreement or similar arrangement between
        the
        Partnership and Fund I with respect to any Oil and Gas Interest owned by
        Fund I,
        (iii) for the licensing or acquisition by the Partnership of, or reimbursement
        of costs by the Partnership to Fund I with respect to, geological and
        geophysical data licensed or acquired by Fund I or its Affiliates but to
        be used
        by the Partnership in connection with its Portfolio Investments and (iv)
        as
        otherwise expressly permitted or contemplated by this Agreement, the Partnership
        shall not invest in, acquire assets from, or sell assets to (A) the General
        Partner or its Affiliates or (B) any entity in which the General Partner or
        its Affiliates (other than the Partnership) holds an investment of more than
        5%
        of the outstanding equity of such entity or is in a position of control.
        Notwithstanding anything to the contrary in this Agreement, the transactions,
        including the existence of any related conflicts of interest, described in
        clauses (i) through (iv) of this Section 5.4(a) are hereby approved by all
        Partners.

       

      (b) Standards
        for Transactions with Affiliates.
        Notwithstanding anything in this Agreement to the contrary, all transactions
        between the General Partner and its Affiliates (other than the Partnership),
        on
        the one hand, and the Partnership, on the other hand, shall be (i) on terms
        that
        are no less favorable to the Partnership than those available from unaffiliated
        parties in arm’s length transactions, or (ii) fair and reasonable to the
        Partnership, taking into account the totality of the relationships between
        the
        parties involved (including other transactions that may be particularly
        favorable or advantageous to the Partnership). The terms of any transaction
        approved by a Majority in Interest of
        Limited Partners shall be conclusively deemed to be permitted by all Partners
        and shall not constitute a breach of this Agreement or of any duty stated
        or
        implied by law or equity. 

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      (c) No
        Other Restrictions.
        Except
        to the extent expressly prohibited by Sections 5.4(a) and (b), this Agreement
        shall not be construed in any manner to preclude the General Partner, the
        Management Principal, the GP Company or any of their respective Affiliates
        from
        possessing any business interest and engaging in any activity whatsoever
        for
        their own account and not the account of the Partnership, including business
        interests and activities in direct competition with the
        Partnership.

       

      5.5 Outside
        Activities. 

       

      (a) Notwithstanding
        anything in this Agreement to the contrary, neither the General Partner,
        the GP
        Company, the Management Principal nor any of their respective Affiliates
        have
        any duty or obligation to present any Oil and Gas Interest or other investment
        opportunity to the Partnership for consideration as a Portfolio Investment
        and
        shall be free to invest in any such Oil and Gas Interest or other investment
        opportunity for their or their respective Affiliates’ own accounts and not the
        account of the Partnership.

       

      (b) Subject
        to the confidentiality provisions in Section 11.11 and except as otherwise
        expressly prohibited by this Agreement, a Limited Partner shall be entitled
        to
        and may have business interests and engage in activities in addition to those
        relating to the Partnership, including business interests and activities
        in
        direct competition with the Partnership and may engage in transactions with,
        and
        provide services to, the Partnership. Neither the Partnership, any Partner
        nor
        any Person shall have any rights by virtue of this Agreement in any business
        ventures of any Limited Partner.

       

      

      ARTICLE
        VI

      Expenses;
        Insurance

       

      6.1 GP
        Expenses.
        The
        General Partner, but not the Partnership or any Limited Partner, shall bear
        and
        be charged with all bonuses and other incentive compensation to the Management
        Principal and the employees of the General Partner and the GP Company
        (collectively, “GP
        Expenses”). 

       

      6.2 Partnership
        Expenses and Organizational Expenses. 

       

      (a) The
        Partnership shall bear and be charged with the following costs and expenses
        of
        the Partnership and shall promptly reimburse the General Partner or the GP
        Company, as the case may be, to the extent that any of such costs and expenses
        are paid by such entities (the “Partnership
        Expenses”):

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      (i) all
        expenses of the General Partner and the GP Company, other than GP Expenses,
        incurred in managing and controlling the business and affairs of the
        Partnership, including the relevant portion of salaries, employee benefits
        and
        other compensation of the Management Principal and other employees of the
        General Partner and the GP Company;

       

      (ii) all
        administrative expenses of the Partnership incurred in the ordinary course
        of
        business, including the cost of the preparation of the annual audit, financial
        and tax returns and tax reports required for Partners or the Partnership,
        cash
        management expenses and routine legal and accounting expenses;

       

      (iii) all
        out-of-pocket costs and expenses incurred in originating, investigating,
        selecting, negotiating, acquiring, structuring, financing, operating,
        monitoring, disposing of or abandoning of Portfolio Investments or transactions
        that, if consummated, would constitute Portfolio Investments;

       

      (iv) all
        third-party expenses in connection with Portfolio Investments, including
        any
        financing, legal, accounting, management and consulting fees or expenses
        as well
        as any administrative expenses of any Prospect Generating Entity incurred
        in the
        ordinary course of business;

       

      (v) all
        premiums, deductibles and other costs associated with obtaining and maintaining
        any insurance coverage with respect to the business and activities of the
        Partnership, the General Partner and the GP Company;

       

      (vi) interest
        on and fees and expenses arising out of all borrowings made by the Partnership,
        including the arranging thereof;

       

      (vii) out-of-pocket
        costs of any litigation, director and/or officer liability or other insurance
        and indemnification or extraordinary expense or liability relating to the
        affairs of the Partnership;

       

      (viii) expenses
        of liquidating the Partnership;

       

      (ix) registration
        expenses and any taxes, fees or other governmental charges levied against
        the
        Partnership and all expenses incurred in connection with any tax audit,
        investigation, settlement or review of the Partnership, 

       

      (x) expenses
        of any meetings of the Partners; and

       

      (xi) expenses
        of any meetings of the Advisory Committee and out-of-pocket expenses reasonably
        incurred by members of the Advisory Committee in carrying out their functions
        for the Partnership.

       

      (b) In
        addition to all Partnership Expenses, the Partnership shall bear and be charged
        with all Organizational Expenses and shall promptly reimburse the General
        Partner or the GP Company, as the case may be, to the extent that any
        Organizational Expenses are paid by such entities.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      6.3 Insurance
        Coverage.
        The
        Partnership shall obtain and maintain insurance coverage with respect to
        the
        business and activities of the Partnership, the General Partner and the GP
        Company in such amounts as the General Partner determines in its sole
        discretion. 

       

      

      ARTICLE
        VII

      Books
        and Records; Reports and Other Financial, Legal and Tax
        Matters

       

      7.1 Books
        and Records.

       

      (a) The
        General Partner shall keep or cause to be kept, until the third anniversary
        of
        the dissolution of the Partnership, complete and appropriate records and
        books
        of account. Except as otherwise expressly provided herein, such books and
        records shall be maintained on a basis which allows for the proper preparation
        of the Partnership’s financial statements and tax returns.

       

      (b) The
        names
        of all Persons admitted as Partners and their status as General Partner or
        a
        Limited Partner shall be maintained in the records of the
        Partnership.

       

      (c) Any
        Limited Partner or its duly authorized representatives shall be permitted,
        upon
        reasonable advance notice to the General Partner, to inspect the books and
        records of the Partnership for any proper purpose and make copies thereof
        and
        obtain any information reasonably requested by such Limited Partner consistent
        with reasonable confidentiality restrictions imposed by the General Partner
        during normal business hours.

       

      7.2 Financial
        Reports and
        Tax Information.
        

       

      (a)
        Within 45 days after the end of each of the first three Fiscal Quarters of
        each
        Fiscal Year of the Partnership, and within 90 days after the end of each
        Fiscal
        Year of the Partnership (subject in both cases to reasonable delays in the
        event
        of the late receipt of any necessary financial statements), the General Partner
        shall send, or cause to be sent, to each Person who was a Partner during
        such
        period the following financial statements for the Partnership prepared in
        accordance with generally accepted accounting principles, consistently
        applied,

       

      (i) a
        balance
        sheet as of the end of such period;

       

      (ii) a
        statement of income or loss and a statement of Partners’ capital for such
        period;

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      (iii) a
        statement of cash flows; and

       

      (iv) a
        statement of changes in Partners’ equity; and

       

      (b) Within
        90
        days after the end of each Fiscal Year of the Partnership (subject to reasonable
        delays in the event of the late receipt of any necessary financial statements),
        the General Partner shall send, or cause to be sent, to each Person who was
        a
        Partner during such period any tax information necessary for the Partners’
completion of their respective U.S. federal, state and local tax returns,
        including copies of Schedule K-1 (Partner’s Share of Income, Credits,
        Deductions, etc.).

       

      7.3 Partner
        Meetings; Voting and Consent.

       

      (a) The
        General Partner may in its sole discretion call a meeting of the Partnership
        and
        it shall promptly call a special meeting if a Required Interest of Limited
        Partners so request. The General Partner shall give at least 21 days’ notice
        (but not more than 60 days’ notice) of the time and place of any meeting to each
        Limited Partner, which notice shall set forth the agenda for such meeting;
        provided, if the General Partner fails to provide such notice within
        15 days after the Limited Partners request for a special meeting in
        accordance with the foregoing, any Limited Partner who was party to such
        request
        may give notice of such special meeting to each Partner.

       

      (b) Any
        action required to be, or which may be, taken at any meeting by the Partners
        may
        be taken in writing without a meeting if consents thereto are given by the
        General Partner and Limited Partners holding Interests in an amount not less
        than the amount that would be necessary to take such action at a
        meeting.

       

      (c) A
        Limited
        Partner may vote at any meeting either in person or by a proxy which such
        Limited Partner has duly executed in writing. The General Partner may permit
        Persons other than Partners to participate in any meeting; provided, no such
        Person shall be entitled to vote.

       

      (d) The
        chairman of any meeting of the Partners shall be a Person affiliated with
        and
        designated by the General Partner. A Person designated by the General Partner
        shall keep written minutes of all of the proceedings and votes of any
        meeting.

       

      (e) The
        General Partner may set in advance a record date for determining the Limited
        Partners entitled to notice of and to vote at any meeting or entitled to
        express
        consent to any action in writing without a meeting. No record date shall
        be less
        than 10 nor more than 60 days prior to the date of any meeting to which such
        record date relates nor more than 10 days after the date of any notice by
        the
        General Partner seeking any action by written consent.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      7.4 Fiscal
        Year.
        The
        fiscal year (“Fiscal
        Year”)
        of the
        Partnership shall be the calendar year or, in the case of the first and last
        fiscal years of the Partnership, the fraction thereof commencing on the
        Effective Date or ending on the date on which the winding up of the Partnership
        is completed, as the case may be. The taxable year of the Partnership shall
        be
        determined under section 706 of the Code. The General Partner shall have
        the authority to change the ending date of the Fiscal Year if the General
        Partner shall determine that such change is reasonably necessary or appropriate,
        provided that the General Partner shall promptly give notice of any such
        change
        to the Limited Partners.

       

      7.5 Tax
        Elections.
        The
        Partnership shall make the following elections on the appropriate tax
        returns:

       

      (a) to
        adopt
        the calendar year as the Partnership’s fiscal year;

       

      (b) to
        adopt
        the accrual method of accounting and to keep the Partnership’s books and records
        on the income-tax method;

       

      (c) if
        a
        distribution of Partnership property as described in Section 734 of the
        Code occurs or if a transfer of a Partnership Interest as described in
        Section 743 of the Code occurs, on request by notice from any Partner, to
        elect, pursuant to Section 754 of the Code, to adjust the basis of
        Partnership properties;

       

      (d) to
        elect
        to amortize the organizational expenses of the Partnership ratably over a
        period
        of 60 months as permitted by Section 709(b) of the Code; and

       

      (e) any
        other
        election the General Partner may deem appropriate and in the best interests
        of
        the Partners.

       

      Neither
        the Partnership nor any Partner or Assignee may make an election for the
        Partnership to be excluded from the application of the provisions of
        Subchapter K of Chapter 1 of Subtitle A of the Code or any
        similar provisions of applicable state law. Upon the transfer of all or a
        portion of a Partner’s Interest in accordance with the terms of this Agreement,
        the General Partner shall file on behalf of the Partnership, upon any affected
        Partner’s request, an election under section 754 of the Code and in accordance
        with applicable Treasury Regulations to cause the basis of the Partnership
        property to be adjusted for federal income tax purposes as provided by section
        743 or 734 of the Code. 

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      ARTICLE
        VIII

      Transfers
        and Withdrawals

       

      8.1 Transfers
        by the General Partner.
        Without
        the consent of a Required Interest of the Limited Partners, the General Partner
        shall not have the right to Transfer its interest as the general partner
        of the
        Partnership; provided that, without the consent of any of the Limited Partners,
        the General Partner may Transfer its interest as the general partner of the
        Partnership to one of its Affiliates so long as such Affiliate is controlled,
        directly or indirectly, by the same Person or Persons that control the General
        Partner immediately prior to such Transfer. In the event of an assignment
        or
        other Transfer of all of its interest as a general partner of the Partnership
        in
        accordance with this Section 8.1, the General Partner’s assignee or
        transferee shall be substituted in its place as general partner of the
        Partnership and immediately thereafter the General Partner shall withdraw
        as a
        general partner of the Partnership.

       

      8.2 Transfers
        by the Limited Partners.

       

      (a) A
        Limited
        Partner may not Transfer its Interest in whole or in part to any Person without
        the prior written consent of the General Partner, which consent, solely in
        the
        case of a proposed Permitted Transfer, shall not be unreasonably withheld,
        and
        in other cases may be withheld in the sole discretion of the General Partner;
        provided, the General Partner may withhold its consent to any Permitted Transfer
        (and any such withholding of consent shall be deemed to have been reasonably
        withheld) (i) if, in the General Partner’s reasonable judgment the
        creditworthiness of the proposed Permitted Transferee is unsatisfactory in
        light
        of the obligations under this Agreement, (ii) if the General Partner
        reasonably believes that such Transfer would not be within (or would cause
        the
        Partnership to fail to qualify for) one or more of the safe harbors described
        in
        paragraphs (e), (f), (g), (h), or (j) of Treasury Regulation
        section 1.7704-1 or otherwise poses a material risk that the Partnership
        will be treated as a “publicly traded partnership” within the meaning of
        section 7704 of the Code and the regulations promulgated thereunder,
        (iii) if such proposed Permitted Transferee’s ownership of the Limited
        Partner’s Interest is reasonably likely to constitute beneficial ownership by
        more than one Person for purposes of Section 3(c)(1) of the 1940 Act, (iv)
        if the General Partner reasonably believes such proposed Permitted Transfer
        may
        cause all or any portion of the assets of the Partnership to constitute “plan
        assets” under ERISA or the Code or (v) if such proposed Permitted
        Transferee is not able to make the representations, warranties and covenants
        substantially similar to those made by the subscribers in the Subscription
        Agreements. Any such Transfer for which the General Partner has given consent
        (including those to Affiliates) shall be effected by the execution and delivery
        (by the transferor and transferee) of an instrument requiring (A) the
        transferor and transferee to make representations, warranties and covenants
        similar to those made by the subscribers in the Subscription Agreements,
        (B) a legal opinion in form and from counsel reasonably acceptable to the
        General Partner as to certain customary matters including (I) that such
        Transfer is in compliance with applicable federal and state securities laws,
        (II) that such proposed Transfer does not cause the Partnership to fail to
        qualify for one or more of the safe harbors described in paragraphs (e),
        (f),
        (g), (h), or (j) of Treasury Regulation Section 1.7704-1 or otherwise pose
        a material risk that the Partnership will be treated as a “publicly traded
        partnership” within the meaning of section 7704 of the Code and the
        regulations promulgated thereunder, (III) that such Transfer does not
        result in more beneficial owners under Section 3(c)(1) of the 1940 Act than
        existed before giving effect to the Transfer, (IV) that such Transfer would
        not cause all or any portion of the assets of the Partnership to constitute
        “plan assets” under ERISA or the Code and (V) that such Transfer would not
        cause the Partnership to lose its status as a partnership for federal income
        tax
        purposes; provided, the General Partner may, in its sole discretion, waive
        or
        alter the opinions required to be given and (C) the proposed transferee to
        assume all obligations of the proposed transferor including all obligations
        with
        respect to Unfunded Commitments. 

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
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      (b) Each
        Transferring Limited Partner agrees that it will pay, or it will cause the
        transferee to pay, all reasonable expenses, including attorneys’ fees, incurred
        by the Partnership in connection with Transfer of an Interest by such Limited
        Partner.

       

      (c) The
        General Partner shall prohibit any Transfer or Admission (and shall not
        recognize any such Transfer or Admission) if the General Partner reasonably
        believes that such Transfer or Admission would not be within (or would cause
        the
        Partnership to fail to qualify for) one or more of the safe harbors described
        in
        paragraphs (e), (f), (g), (h), or (j) of Treasury Regulation
        Section 1.7704-1 or otherwise poses a material risk that the Partnership
        will be treated as a “publicly traded partnership” within the meaning of
        section 7704 of the Code and the regulations promulgated
        thereunder.

       

      (d) A
        Transfer that is made in violation of this Section 8.2 shall be null and
        void ab initio
        and, if
        not cured to the satisfaction of the General Partner within 10 days after
        notice
        from the General Partner, the transferring Partner shall be deemed a Defaulting
        Partner and the provisions of Section 3.4 shall apply as if the
        transferring Partner had failed to make a Capital Contribution.

       

      8.3 Withdrawals
        Generally.

       

      (a) The
        General Partner may, in its sole discretion, allow any Limited Partner (other
        than the General Partner) to withdraw from the Partnership and, upon such
        withdrawal, the General Partner may terminate such Partner’s Commitment and may
        cause the Partnership to distribute to such Limited Partner an amount of
        cash
        equal to the positive balance, if any, of such Limited Partner’s Capital
        Account.

       

      (b) Except
        as
        expressly provided in this Agreement, no Partner shall have the right to
        withdraw from the Partnership or to withdraw any part of its Capital Account
        or
        Capital Contributions.

       

      8.4 Removal
        of the General Partner.

       

      (a) At
        any
        time after the General Partner ceases to be an Affiliate of the GP Company
        or
        the Management Principal, the General Partner may be removed with the written
        consent of the greater of a Required Interest of Limited Partners or a majority
        in interest of Limited Partners as specified in Internal Revenue Service
        Revenue
        Procedure 94-46 (or any successor thereto). Any such action for removal also
        must provide for the selection of a new General Partner. The new General
        Partner
        so selected shall be admitted to the Partnership as a General Partner with
        such
        Percentage Interest and such other rights and interests in the Partnership
        as
        the Limited Partners making such selection may specify, but only if such
        new
        General Partner shall have made such Capital Contribution as such Limited
        Partners may specify and only if such new General Partner shall have executed
        and delivered to the Partnership a document including such new General Partner’s
        acceptance of all the terms and provisions of this Agreement, an agreement
        to
        perform and discharge timely all of its obligations and liabilities hereunder
        and its address for notice hereunder. Such removal shall be effective only
        immediately subsequent to such admission.
        In
        addition, the new General Partner shall cause this Agreement to be amended
        to
        reflect that, from and after the date of such new General Partner’s admission,
        the new General Partner’s interest in all Partnership distributions and
        allocations shall be its Percentage Interest. Except
        as
        expressly set forth in this Section 8.4(a), the Limited Partners shall have
        no
        right to remove the General Partner.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -30-

          
            

          

        

        
           

        

      

      (b) Immediately
        following the admission of the new General Partner in accordance with Section
        8.4(a), the removed General Partner shall become a Limited Partner and its
        general
        partner interest and all of its other rights and interests in Partnership
        allocations and distributions (collectively, the “Combined
        Interest”)
        shall
        be
        converted into an Interest, without reduction in such Combined Interest (but
        subject to proportionate dilution by reason of the admission of the new General
        Partner). The Percentage Interest attributable to such Interest shall be
        determined by mutual agreement of the removed General Partner and the Advisory
        Committee. If the removed General Partner and the Advisory Committee cannot
        so
        agree, then such Percentage Interest shall be determined by an independent
        investment advisor or investment banker with reasonable experience in the
        oil
        and gas exploration and production industry that is selected by mutual agreement
        of the removed General Partner and the Advisory Committee. In
        making
        its determination, such independent investment advisor or investment banker
        may
        consider any factors it may deem relevant and its determination shall be
        final
        and binding on the removed General Partner and the Limited Partners. The
        costs
        and expenses of such independent investment advisor or investment banker
        shall
        be borne by the Partnership. For
        purposes of this Agreement, conversion of the Combined Interest of the removed
        General Partner to an Interest will be characterized as if the removed General
        Partner contributed its Combined Interest to the Partnership in exchange
        for the
        newly issued Interest. The new General Partner shall indemnify the removed
        General Partner as to all debts and liabilities of the Partnership arising
        on or
        after the date on which the removed General Partner becomes a Limited
        Partner.

       

      

      ARTICLE
        IX

      Dissolution,
        Winding Up and Termination of the Partnership

       

      9.1 Dissolution.
        The
        existence of the Partnership shall continue until the Partnership is dissolved
        and subsequently terminated, which dissolution shall occur upon the first
        to
        occur of any of the following events (each, an “Event
        of Dissolution”):

       

      (a) the
        expiration of the term of the Partnership set forth in
        Section 2.7;

       

      (b) after
        the
        Commitment Period, at the time all of the Portfolio Investments have been
        Disposed of; 

       

      (c) at
        any
        time upon the determination by the General Partner in its sole discretion;
        or

       

      (d) at
        any
        time after the General Partner ceases to be an Affiliate of the Management
        Principal or the GP Company, upon the approval of a Required Interest of
        the
        Limited Partners.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -31-

          
            

          

        

        
           

        

      

      9.2 Winding-up.
        Upon
        the occurrence of an Event of Dissolution, the Partnership shall be wound
        up and
        liquidated. The General Partner or, if there is no general partner, a liquidator
        appointed by a Majority in Interest of the Limited Partners, shall proceed
        with
        the Dissolution Sale and the Final Distribution. In the Dissolution Sale,
        the
        General Partner or such liquidator shall use its commercially reasonable
        efforts
        to reduce to cash and cash equivalent items such assets of the Partnership
        as
        the General Partner or such liquidator shall deem it advisable to sell, subject
        to obtaining fair value for such assets and any tax or other legal
        considerations (including legal restrictions on the ability of a Limited
        Partner
        to hold any assets to be distributed in kind).

       

      9.3 Final
        Distribution.
        After
        the Dissolution Sale, the proceeds thereof and all other assets of the
        Partnership shall be distributed (the “Final
        Distribution”)
        in one
        or more installments in the following order of priority:

       

      (a) to
        the
        payment of the expenses of the winding-up, liquidation and dissolution of
        the
        Partnership;

       

      (b) to
        pay
        all creditors of the Partnership, including, in accordance with the terms
        agreed
        among them and otherwise on a pro rata and pari passu basis, Partners who
        are
        creditors; 

       

      (c) to
        establish reserves, in amounts reasonably established by the General Partner
        or
        such liquidator, to meet other liabilities of the Partnership other than
        to the
        Partners or former Partners in respect of distributions owing to them
        hereunder.

       

      The
        remaining proceeds, if any, plus any remaining assets of the Partnership,
        shall
        be applied and distributed to the Partners as soon as practicable, in accordance
        with the positive balances of the Partners’ Capital Accounts, as determined
        after taking into account all adjustments to Capital Accounts for the
        Partnership taxable year during which the liquidation occurs. For purposes
        of
        the application of this Section 9.3 and determining Capital Accounts on
        liquidation, all Unrealized Gain, Unrealized Loss and accrued income and
        deductions of the Partnership shall be treated as realized and recognized
        immediately before the date of distribution. 

       

      9.4 Termination
        of the Partnership.
        Upon
        the completion of the dissolution and winding-up of the Partnership and the
        distribution of all Partnership assets, the Partnership’s affairs shall
        terminate and the Partnership shall cause to be executed and filed a Certificate
        of Cancellation of the Certificate pursuant to the Act, as well as any and
        all
        other documents required to effectuate the termination of the
        Partnership.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -32-

          
            

          

        

        
           

        

      

      ARTICLE
        X

      Exculpation
        and Indemnification

       

      10.1 Exculpation.

       

      (a) The
        General Partner shall be subject to all of the liabilities of a general partner
        in a partnership without limited partners; provided, however that to the
        fullest
        extent permitted by law, none of the General Partner, the Management Principal,
        the GP Company, the Advisory Committee Members and any members, partners,
        officers, directors, shareholders or managers of same and any individual
        acting
        on behalf of any other Person at the request of the General Partner in any
        capacity similar to the foregoing (each, an “Indemnified
        Party”),
        shall
        be liable to the Partnership or to any Limited Partner for any act or
        omission taken or suffered by such Indemnified Party in connection with the
        conduct of the affairs of the Partnership or the General Partner or otherwise
        in
        connection with this Agreement or the matters contemplated herein, except
        to the
        extent such act or omission constituted bad faith or willful misconduct or,
        in
        the case of a criminal matter, such Indemnified Party acted with knowledge
        that
        such act or omission was criminal.

       

      (b) Except
        as
        expressly set forth in this Agreement, neither the General Partner nor any
        other
        Indemnified Party shall have any duties or liabilities, including fiduciary
        duties, to the Partnership or any Limited Partner or Assignee and the provisions
        of this Agreement, to the extent that they restrict, eliminate or otherwise
        modify the duties and liabilities, including fiduciary duties, of the General
        Partner or any other Indemnified Party otherwise existing at law or in equity,
        are agreed by the Partners to replace such other duties and liabilities of
        the
        General Partner or such other Indemnified Party.

       

      (c) To
        the
        extent that, at law or in equity, an Indemnified Party has duties (including
        fiduciary duties) and liabilities relating thereto to the Partnership or
        to the
        Partners, the General Partner and any other Indemnified Party acting in
        connection with the Partnership’s business or affairs shall not be liable to the
        Partnership or to any Partner for its good faith reliance on the provisions
        of
        this Agreement. 

       

      (d) The
        General Partner may consult with legal counsel and accountants selected by
        it
        and any act or omission suffered or taken by it on behalf of the Partnership
        or
        in furtherance of the interests of the Partnership in good faith in reliance
        upon and in accordance with the advice of such counsel or accountants shall
        be
        full justification for any such act or omission, and the General Partner
        shall
        be fully protected and held harmless in so acting or omitting to act provided
        that such counsel or accountants were selected with reasonable
        care.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -33-

          
            

          

        

        
           

        

      

      10.2 Indemnification.

       

      (a) To
        the
        fullest extent permitted by law, the Partnership shall indemnify, defend
        and
        hold harmless each of the Indemnified Parties from and against any and all
        claims (including derivative claims brought by or in the right of the
        Partnership), liabilities, damages, losses, costs and expenses (including
        amounts paid in satisfaction of judgments, in compromises and settlements,
        as
        fines and penalties and legal or other costs and reasonable expenses of
        investigating or defending against any claim or alleged or threatened claim)
        of
        any nature whatsoever, known or unknown, liquidated or unliquidated, that
        are
        incurred by any Indemnified Party and arise out of or in connection with
        the
        affairs of the Partnership, or the performance by such Indemnified Party
        of any
        of the General Partner’s responsibilities hereunder or otherwise in connection
        with the matters contemplated herein; provided that an Indemnified Party
        shall
        be entitled to indemnification hereunder only to the extent that such
        Indemnified Party’s conduct does not constitute bad faith or willful misconduct
        or, in the case of a criminal matter, such Indemnified Party did not act
        with
        knowledge that such conduct was criminal. The termination of any proceeding
        by
        settlement, judgment, order, conviction, or upon a plea of nolo contendere
        or its
        equivalent shall not, of itself, create a presumption that such Indemnified
        Party’s conduct constituted bad faith or willful misconduct. The satisfaction of
        any indemnification and any holding harmless pursuant to this
        Section 10.2(a) shall be from and limited to Partnership assets, and no
        Partner shall have any personal liability on account thereof beyond the amount
        of its Unfunded Commitment.

       

      (b) In
        addition, in the sole discretion of the General Partner, the Partnership
        may
        indemnify and hold harmless any Person to the same extent provided in the
        first
        sentence of Section 10.2(a) by reason of such Person’s status as (i) an
        employee, agent, trustee or other Affiliate of the Partnership, the General
        Partner or the GP Company or (ii) a Person serving at the request of the
        General
        Partner in another Person in a capacity similar to those referred to in clause
        (i) of this sentence, provided that in each case such Person’s conduct does not
        constitute bad faith or willful misconduct or, in the case of a criminal
        matter,
        such Person did not act with knowledge that such conduct was criminal. Any
        Person so indemnified and held harmless pursuant to the immediately preceding
        sentence shall be deemed an “Indemnitee” for purposes of this Section
        10.2.

       

      (c) Expenses
        reasonably incurred by an Indemnified Party in defense or settlement of any
        claim that may be subject to a right of indemnification hereunder shall be
        advanced by the Partnership prior to the final disposition thereof upon receipt
        of an undertaking by or on behalf of the Indemnified Party to repay such
        amount
        to the extent that it shall be determined ultimately that such Indemnified
        Party
        is not entitled to be indemnified hereunder.

       

      (d) The
        right
        of any Indemnified Party to the indemnification provided herein shall be
        cumulative of, and in addition to, any and all rights to which such Indemnified
        Party may otherwise be entitled by contract or as a matter of law or equity
        and
        shall extend to such Indemnified Party’s heirs, successors, assigns and legal
        representatives. 

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -34-

          
            

          

        

        
           

        

      

      (e) Except
        as
        provided below in this Section 10.2(d), each Indemnified Party shall be
        permitted to engage counsel of its choice, at the Partnership’s expense, which
        counsel shall be reasonably acceptable to the Partnership, in connection
        with
        any matter covered by the Partnership’s indemnity obligations described in
        Section 10.2(a). In any action, suit or proceeding against multiple
        Indemnified Parties, such Indemnified Parties shall jointly employ, at the
        expense of the Partnership, counsel of the Indemnified Parties’ choice, which
        counsel shall be reasonably satisfactory to the Partnership, in such action,
        suit or proceeding; provided, that if retention of joint counsel by such
        Indemnified Parties would create a conflict of interest, each Indemnified
        Party
        whose participation in such joint representation would cause such a conflict
        shall have the right to employ, at the expense of the Partnership, separate
        counsel of the respective Indemnified Party’s choice, which counsel shall be
        reasonably satisfactory to the Partnership in such action, suit or proceeding;
        provided further, that if any indemnitor shall acknowledge in writing its
        liability to the Indemnified Party for any action, suit or proceeding brought
        by
        a third party in connection with which any Indemnified Party is seeking
        indemnification, then such indemnitor shall be entitled to select the counsel
        to
        defend such action, suit or proceeding, subject to the approval of the
        Indemnified Party, which approval shall not be unreasonably
        withheld.

       

      (f) If
        this
        Article X or any portion hereof shall be invalidated on any ground by any
        court of competent jurisdiction, then the Partnership shall nevertheless
        indemnify and hold harmless each Person indemnified pursuant to this Article
        X
        as to costs, charges and expenses (including attorneys’ fees), judgments, fines
        and amounts paid in settle-ment with respect to any action, suit or proceeding,
        whether civil, criminal, administrative or investigative to the full extent
        permitted by any applicable portion of this Article X that shall not have
        been
        invali-dated and to the fullest extent permitted by law.

       

      ARTICLE
        XI

      Miscellaneous

       

      11.1 Amendments.

       

      (a) Except
        as
        required by law, this Agreement (including the Exhibits hereto) may be amended
        or supplemented by the written consent of the General Partner and a Majority
        in
        Interest of the Limited Partners; provided that, other than as expressly
        provided in this Agreement, no such amendment shall:

       

      (i) increase
        any Limited Partner’s Commitment, reduce its share of the Partnership’s
        distributions, income and gains, or increase its share of the Partnership’s
        losses, without, in each case, the written consent of each Limited Partner
        so
        affected;

       

      (ii) change
        the percentage of interests of Limited Partners necessary for any consent
        required hereunder to the taking of an action unless such amendment is approved
        by Limited Partners who then hold interests equal to or in excess of such
        percentage interest for the subject of such proposed amendment; or

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -35-

          
            

          

        

        
           

        

      

      (iii) amend
        this Section 11.1 without the consent of each Limited Partner.

       

      (b) Notwithstanding
        anything in Section 11.1(a) to the contrary, this Agreement may be amended
        by the General Partner without the consent of the Limited Partners to
        (i) change the name of the Partnership pursuant to Section 2.2 hereof,
        (ii) correct any printing, stenographic or clerical error or omissions,
        provided that such amendment does not materially adversely affect the Interests
        of any of the Limited Partners (other than those Limited Partners who approve
        such amendment), or (iii) reflect (A) additional Limited Partners
        admitted and additional Commitments made at any Subsequent Closing,
        (B) changes to any Commitments and the identity of the Partners as a result
        of a Transfer of an Interest made in accordance with this Agreement and
        (C) changes to the Commitments or identity of the Parties as a result of
        the default of any Partner to make a Capital Contribution when required under
        this Agreement or under the circumstances described in
        Section 3.4(d).

       

      (c) Notwithstanding
        anything in Section 11.1(a) to the contrary, the General Partner shall have
        the right to amend this Agreement without the approval of any other Partner
        to
        the extent the General Partner reasonably determines, based upon written
        advice
        of tax counsel to the Partnership, that the amendment is necessary to provide
        assurance that the Partnership will not be treated as a “publicly traded
        partnership,” because it is entitled to “safe harbor” treatment under
        section 7704 of the Code and the regulations promulgated thereunder;
        provided, (i) such amendment shall not change the relative economic
        interests of the Partners, reduce any Partner’s share of distributions, or
        increase any Partner’s Commitment or its liability hereunder and (ii) the
        General Partner provides a copy of such written advice and amendment to the
        Limited Partners at least ten days prior to the effective date of any such
        amendment and a Majority in Interest of the Limited Partners shall not have
        made
        a reasonable objection to such amendment prior to the effective date of such
        amendment.

       

      11.2 Entire
        Agreement.
        This
        Agreement, the Subscription Agreements, and the other agreements referred
        to
        herein constitute the entire agreement among all of the Partners with respect
        to
        the subject matter hereof and supersede any prior agreement or understanding
        among or between them with respect to such subject matter. The representations
        and warranties of the Limited Partners in, and the other provisions of, the
        Subscription Agreements shall survive the execution and delivery of this
        Agreement.

       

      11.3 Severability.
        Each
        provision of this Agreement shall be considered severable and if for any
        reason
        any provision which is not essential to the effectuation of the basic purposes
        of this Agreement is determined by a court of competent jurisdiction to be
        invalid or unenforceable and contrary to the Act or existing or future
        applicable law, such invalidity shall not impair the operation of or affect
        those provisions of this Agreement which are valid. In that case, this Agreement
        shall be construed so as to limit any term or provision so as to make it
        enforceable or valid within the requirements of any applicable law, and in
        the
        event such term or provision cannot be so limited, this Agreement shall be
        construed to omit such invalid or unenforceable provisions.

       

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -36-

          
            

          

        

        
           

        

      

      11.4 Notices.
        All
        notices, requests, demands and other communications hereunder shall be in
        writing and shall be deemed to have been duly given if (a) delivered or
        mailed, registered mail, first-class postage paid or (b) transmitted via
        facsimile, if to any Partner, at such Partner’s address, or to such Partner’s
        facsimile number, set forth on such Partner’s Subscription Agreement, and if to
        the Partnership, to the General Partner at 4605 Post Oak Place, Suite 100,
        Houston, Texas 77027, Attention: Brad Bynum, facsimile number (713) 333-0976,
        or
        to such other person or address as any Partner shall have last designated
        by
        notice to the Partnership, and in the case of a change in address by the
        General
        Partner, by notice to the Limited Partners. Any notice shall be deemed to
        have
        been duly given if personally delivered or sent by the mails or by facsimile
        transmission confirmed by letter and will be deemed received, unless earlier
        received, (i) if sent by certified or registered mail, return receipt
        requested, when actually received, (ii) if sent by overnight mail or
        courier, when actually received, (iii) if sent by facsimile transmission,
        on the date sent if receipt is confirmed by telephone, and (iv) if
        delivered by hand, on the date of receipt.

       

      11.5 Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of Delaware, excluding any conflict-of-laws rule or principle that
        might
        refer the construction or interpretation of this Agreement to the laws of
        another State. In particular, the Partnership is formed pursuant to the Act,
        and
        the rights and liabilities of the Partners shall be as provided therein,
        except
        as herein otherwise expressly provided.

       

      11.6 Jurisdiction;
        Venue.
        Any
        action or proceeding against the parties relating in any way to this Agreement
        may be brought and enforced in the courts of the State of Texas located in
        Harris County and, to the extent subject matter jurisdiction exists therefor,
        in
        the courts of the United States for the Southern District of Texas, and the
        parties irrevocably submit to the exclusive jurisdiction of the foregoing
        courts
        in respect of any such action or proceeding. The parties irrevocably waive,
        to
        the fullest extent permitted by law, any objection that they may now or
        hereafter have to the laying of venue of any such action or proceeding in
        the
        courts of the State of Texas located in Harris County or the United States
        District Court for the Southern District of Texas, and any claim that any
        such
        action or proceeding brought in any such court has been brought in an
        inconvenient forum.

       

      11.7 Successors
        and Assigns.
        Except
        with respect to the rights of Indemnified Parties hereunder, none of the
        provisions of this Agreement shall be for the benefit of or enforceable by
        the
        creditors of the Partnership or any other Person, and, subject to compliance
        with the transfer restrictions contained in this Agreement, this Agreement
        shall
        be binding upon and inure to the benefit of the Partners, and their legal
        representatives, heirs, successors and permitted assigns.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -37-

          
            

          

        

        
           

        

      

      11.8 Counterparts.
        This
        Agreement may be executed in one or more counterparts, all of which shall
        constitute one and the same instrument.

       

      11.9 Interpretation.
        Wherever from the context it appears appropriate, each term stated in either
        the
        singular or the plural shall include the singular and the plural, and pronouns
        stated in either the masculine or the neuter gender shall include the masculine,
        the feminine and the neuter.

       

      11.10 Headings.
        The
        section headings in this Agreement are for convenience of reference only,
        and shall not be deemed to alter or affect the meaning or interpretation
        of any
        provisions hereof.

       

      11.11 Confidentiality.
        Each
        Limited Partner will maintain the strict confidentiality of information that
        is
        non-public information furnished by the General Partner regarding the General
        Partner and the Partnership (including (a) information regarding any
        Portfolio Investment and (b) the identity of any Limited Partner) received
        by such Limited Partner pursuant to this Agreement, except (i) as otherwise
        reasonably requested or required by governmental regulatory agencies,
        self-regulating bodies, law, legal process, or litigation in which such Limited
        Partner is a defendant, plaintiff or other named party and (ii) as such
        Limited Partner furnishes to its Affiliates, legal, accounting and other
        professional advisors; provided that such Limited Partner shall be liable
        to the
        Partnership and the General Partner for any such Affiliate’s or any such legal,
        accounting or other professional advisor’s failure to comply with the terms of
        this Section 11.11. 

       

      11.12 Employees.
        Notwithstanding anything to the contrary in this Agreement, the General Partner
        may, in its discretion, waive in whole or in part for the benefit of any
        Qualified Employee the provisions of this Agreement that would burden such
        Qualified Employee’s distributions with any distributions to the General Partner
        pursuant to Sections 4.5(a)(i), (ii) or (iii). If the General Partner waives
        in
        whole or in part any of such provisions, all other provisions of this Agreement
        shall be construed in a manner that takes into account such waiver.  

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -38-

          
            

          

        

        
           

        

      

      11.13 Legal
        Counsel.
        Vinson
& Elkins L.L.P. (“Legal
        Counsel”)
        is
        counsel to the General Partner and the GP Company. The General Partner may
        execute on behalf of the Partnership any consent to the representation of
        the
        Partnership that Legal Counsel may request pursuant to the rules of professional
        conduct or similar rules in any jurisdiction. Each Limited Partner acknowledges
        that Legal Counsel does not represent any Limited Partner in its capacity
        as a
        Limited Partner and that Legal Counsel shall owe no duties directly to a
        Limited
        Partner in its capacity as such. Each Limited Partner further acknowledges
        that,
        whether or not Legal Counsel has in the past represented or is currently
        representing such Limited Partner with respect to other matters, Legal Counsel
        has not represented the interests of any Limited Partner in the preparation
        and
        negotiation of this Agreement or any agreement delivered in connection herewith.
        Each Limited Partner hereby consents to Legal Counsel representing the
        Partnership, the General Partner, the GP Company or any of their respective
        Affiliates in any matter relating to the governance and affairs of the
        Partnership.

       

      

      [signature
        page follows]

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

           

        

        
          -39-

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
        as
        of April 21, 2006.

       

      GENERAL
        PARTNER:

       

      
        	
                HHEP
                  GP II, L.P.

              
	 	 	 
	
                By:

              	
                Hall-Houston
                  Exploration Partners, L.L.C.,

              
	 	
                its
                  General Partner

              
	 	 	 
	 	
                By:

              	
                /s/
                  Gary L. Hall

              
	 	
                Name:

              	
                Gary
                  L. Hall

              
	 	
                Title:

              	
                President
                  and Chief
                  Executive
                  Officer

              

      

    

    
               

      

      LIMITED
        PARTNERS:

      

      

      By
        the
        General Partner as attorney-in-fact for all Limited Partners

      now
        and
        hereafter admitted pursuant to powers of attorney now 

      and
        hereafter granted to the General Partner in the Subscription 

      Agreement
        between each such Limited Partner and the Partnership:

       

      
        
          	
                  HHEP
                    GP II, L.P.

                
	 	 	 
	
                  By:

                	
                  Hall-Houston
                    Exploration Partners, L.L.C.,

                
	 	
                  its
                    General Partner

                
	 	 	 
	 	
                  By:

                	
                  /s/
                    Gary L. Hall

                
	 	
                  Name:

                	
                  Gary
                    L. Hall

                
	 	
                  Title:

                	
                  President
                    and Chief
                    Executive Officer

                

        

        

          
            
              Hall-Houston
                Exploration II, L.P.

              Amended
                and Restated Agreement of Limited Partnership

              
                Signature
                  Page

              

            

            
               

              
                

              

            

            
               

            

          

      

      SCHEDULE
        A

      

      PARTNERS
        AND COMMITMENTS

      

      [OMITTED]

      

      

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

          
            Schedule
              A - Partners and Commitments

          

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
        A

       

      DEFINED
        TERMS

       

      “1940
        Act”
        means
        the Investment Company Act of 1940, as amended, as the same may be further
        amended from time to time.

       

      “Act”
        means
        the Delaware Revised Uniform Limited Partnership Act, 6 Del. Code § 17-101
et seq.,
        as the
        same may be amended from time to time.

       

      “Adjusted
        Capital Account”
means
        the Capital Account maintained for each Partner as of the end of each fiscal
        year of the Partnership, (a) increased by any amounts that such Partner is
        obligated to restore under the standards set by Treasury Regulation section
        1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under Treasury
        Regulation sections 1.704-2(g) and 1.704-2(i)(5)) and (b) decreased by
        (i) the amount of all deductions in respect of depletion that, as of the
        end of the fiscal year, are expected to be made to such Partner’s Capital
        Account in respect of the oil and gas properties of the Partnership,
        (ii) the amount of all losses and deductions that, as of the end of such
        fiscal year, are reasonably expected to be allocated to such Partner in
        subsequent years under sections 704(e)(2) and 706(d) of the Code and Treasury
        Regulation section 1.751-1(b)(2)(ii), and (iii) the amount of all
        distributions that, as of the end of such fiscal year, are reasonably expected
        to be made to such Partner in subsequent years in accordance with the terms
        of
        this Agreement or otherwise to the extent they exceed offsetting increases
        to
        such Partner's Capital Account that are reasonably expected to occur during
        (or
        prior to) the year in which such distributions are reasonably expected to
        be
        made (other than increases as a result of a minimum gain chargeback pursuant
        to
        Sections 4.2(d)(i) or 4.2(d)(ii)). The foregoing definition of Adjusted
        Capital Account is intended to comply with the provisions of Treasury Regulation
        section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
        therewith.

       

      “Adjusted
        Property”
means
        any property the Carrying Value of which has been adjusted pursuant to
        Section 4.1(d)(i) or 4.1(d)(ii).

       

      “Admission” means
        the
        admission of an Assignee as a Limited Partner.

       

      “Affiliate”
        means,
        with respect to any Person, (a) any Person directly or indirectly
        controlling, controlled by or under common control with such Person and
        (b) any Person who, from time to time, is (i) an officer or director
        of such Person or (ii) a spouse, a parent, a sibling or a child of such
        Person, and (c) any Person that, directly or indirectly, is the beneficial
        owner of 25% or more of any class of equity securities or other ownership
        interests of such Person or of which such Person is directly or indirectly
        the
        owner of 25% or more of any class of equity securities or other ownership
        interests. 

       

      “Agreed
        Allocation”
means
        any allocation, other than a Required Allocation, of an item of income, gain,
        loss or deduction pursuant to the provisions of Section 4.1. 

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

          Exhibit
            A – Defined Terms

           

        

        
          A-1

          
            

          

        

        
           

        

      

      “Agreed
        Value”
of
        any
        Contributed Property means the fair market value of such property at the
        time of
        contribution as agreed by the Partners.

       

      “Assignee”
        means
        any Person that receives any Interest in connection with an Involuntary
        Transfer; provided, such Person shall cease to be an Assignee if such person
        is
        admitted as a Limited Partner by the General Partner.

       

      “Assumed
        Tax Liability”
        has the
        meaning given to such term in Section 4.6.

       

      “Business
        Day”
        means a
        day which is not a Saturday, Sunday or a day on which banks in Houston, Texas
        are generally closed.

       

      “Capital
        Account”
means
        the capital account maintained for a Partner pursuant to
        Section 4.1.

       

      “Capital
        Contribution”
        means as
        to any Partner at any time, the aggregate amount of capital actually contributed
        (or deemed contributed in the case of the General Partner or the Initial
        Limited
        Partner) to the Partnership by such Partner pursuant to Sections 3.2(a),
        3.2(b) and 3.3 on or prior to such time.

       

      “Carrying
        Value”
means
        (a) with respect to a Contributed Property, the Agreed Value of such
        property reduced (but not below zero) by all depreciation, depletion,
        amortization and cost recovery deductions charged to the Partners’ Capital
        Accounts in respect of such Contributed Property, and (b) with respect to
        any other Partnership assets, the adjusted basis of such property for federal
        income tax purposes, all as of the time of determination. The Carrying Value
        of
        any property shall be adjusted from time to time in accordance with Sections
        4.1(d)(i) and 4.1(d)(ii) and to reflect changes, additions or other
        adjustments to the Carrying Value for dispositions and acquisitions of
        Partnership assets.

       

      “Code”
        means
        the Internal Revenue Code of 1986, as the same may be amended from time to
        time.

       

      “Co-Investment
        Opportunity”
        means
        the portion of any Portfolio Investment, or any potential transaction that,
        if
        consummated, would constitute a Portfolio Investment, that the General Partner
        elects not to pursue for the Partnership’s account.

       

      “Commitment”
        means,
        as to any Partner, the amount set forth in Schedule
        A
        hereto
        as its “Commitment,” as such amount may be increased from time to time by such
        Partner at a Subsequent Closing or reduced by reason of a Transfer of all
        or
        part of an Interest or by reason of actions taken pursuant to
        Section 3.4.

       

      “Commitment
        Period”
        means
        the period from the Effective Date through the earlier of (a) the
        Expiration Date and (b) the date on which the obligation of Limited
        Partners to make Capital Contributions for Portfolio Investments is terminated
        as provided in Section 3.1(b).

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

          Exhibit
            A – Defined Terms

           

        

        
          A-2

          
            

          

        

        
           

        

      

      “Contributed
        Property”
means
        each property or other asset, but excluding cash, contributed to the
        Partnership. Once the Carrying Value of a Contributed Property is adjusted
        pursuant to Section 4.1(d), such property shall no longer constitute a
        Contributed Property, but shall be deemed an Adjusted Property.

       

      “Curative
        Allocation”
means
        any allocation of an item of income, gain, deduction, loss or credit pursuant
        to
        the provisions of Section 4.2(d)(viii).

       

      “Dispose,”
        “Disposing”
and
        “Disposition”
shall
        mean a sale, assignment, transfer, gift, exchange, mortgage, pledge, grant
        of a
        security interest or other disposition or encumbrance, or the acts thereof,
        whether voluntarily or by operation of law.

       

      “Dissolution
        Sale”
        means
        all sales and liquidations by or on behalf of the Partnership of its assets
        in
        connection with or in contemplation of the winding-up of the
        Partnership.

       

      “Economic
        Risk of Loss”
has
        the
        meaning set forth in Treasury Regulation section 1.752-2(a).

       

      “ERISA”
        means
        the Employee Retirement Income Security Act of 1974, as amended.

       

      “Expiration
        Date”
        means
        the third anniversary of the Effective Date, unless extended by the General
        Partner in accordance with this Agreement.

       

      “Fiscal
        Quarter”
        means
        the calendar quarter or, in the case of the first and last fiscal quarters
        of
        the Partnership, the portion thereof commencing on the Effective Date or
        ending
        on the date on which the winding up of the Partnership is completed, as the
        case
        may be.

       

      “Follow-On
        Investment”
        means
        any investment in an existing Oil and Gas Interest held by the Partnership.
        For
        purposes of this definition, the term “investment” shall include any investment
        of the type described in the second sentence of the definition of “Portfolio
        Investment.”

       

      “Fund
        I”
        means
        Hall-Houston Exploration, L.P., a Delaware limited partnership.

       

      “General
        Partner”
        means
        HHEP GP II, L.P., a Delaware limited partnership, and any general partner
        substituted therefor in accordance with this Agreement but does not include
        any
        Person who has ceased to be a General Partner in the Partnership.

       

      “GP
        Company”
means
        Hall-Houston Exploration Partners, L.L.C, a Delaware limited liability company
        and the general partner of the General Partner, and any successor thereto.
        

       

      “Interest”
        means
        the entire limited partnership interest owned by a Limited Partner or Assignee
        in the Partnership at any particular time, including the right of such Limited
        Partner or Assignee to any and all benefits to which a Limited Partner or
        Assignee may be entitled as provided in this Agreement, together with the
        obligations of such Limited Partner or Assignee to comply with all the terms
        and
        provisions of this Agreement.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

          Exhibit
            A – Defined Terms

           

        

        
          A-3

          
            

          

        

        
           

        

      

      “Involuntary
        Transfer”
        means a
        Transfer resulting from the death, incompetence, insolvency, bankruptcy,
        involuntary termination, involuntary dissolution or liquidation of any
        Person.

       

      “Limited
        Partners”
        means
        the parties shown as limited partners on the books and records of the
        Partnership, including any Person who has been admitted to the Partnership
        as a
        substituted or additional Limited Partner in accordance with this Agreement
        but
        does not include any Person who has ceased to be a Limited Partner in the
        Partnership.

       

      “Majority
        in Interest”
        means,
        with respect to any group of specified Partners, those of such Partners holding
        more than 50% of the total Commitments of all such Partners. 

       

      “Management
        Principal”
means
        Gary L. Hall.

       

      “Net
        Agreed Value”
means,
        (a) in the case of any Contributed Property, the Agreed Value of such
        property reduced by any liabilities either assumed by the Partnership upon
        such
        contribution or to which such property is subject when contributed, and
        (b) in the case of any property distributed to a Partner by the
        Partnership, the Partnership's Carrying Value of such property (as adjusted
        pursuant to Section 4.1(d)(ii)) at the time such property is distributed,
        reduced by any indebtedness either assumed by such Partner upon such
        distribution or to which such property is subject at the time of distribution,
        in either case, as determined under section 752 of the Code.

       

      “Net
        Income”
means,
        for any taxable period, the excess if any, of the Partnership’s items of income
        and gain for such taxable period over the Partnership’s items of loss and
        deduction for such taxable period. The items included in the calculation
        of Net
        Income shall be determined in accordance with Section 4.1 and shall not
        include any items allocated under Sections 4.2(d)(i) - 4.2(d)(viii). Once
        an
        item of income, gain, loss or deduction that has been included in the initial
        computation of Net Income is subjected to a Required Allocation or a Curative
        Allocation, Net Income or Net Loss, whichever the case may be, shall be
        recomputed without regard to such item.

       

      “Net
        Loss”
means,
        for any taxable period, the excess if any, of the Partnership’s items of loss
        and deduction for such taxable period over the Partnership’s items of income and
        gain for such taxable period. The items included in the calculation of Net
        Loss
        shall be determined in accordance with Section 4.1 and shall not include
        any items allocated under Sections 4.2(d)(i) - 4.2(d)(viii). Once an item
        of
        income, gain, loss or deduction that has been included in the initial
        computation of Net Loss is subjected to a Required Allocation or a Curative
        Allocation, Net Income or Net Loss, whichever the case may be, shall be
        recomputed without regard to such item.

       

      “Nonrecourse
        Deductions”
means
        any and all items of loss, deduction or expenditures (described in section
        705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury
        Regulation section 1.704-2(b), are attributable to a Nonrecourse
        Liability.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

          Exhibit
            A – Defined Terms

           

        

        
          A-4

          
            

          

        

        
           

        

      

      “Nonrecourse
        Liability”
has
        the
        meaning set forth in Treasury Regulation section 1.752-1(a)(2).

       

      “Offshore
        U.S. Gulf of Mexico”
means
        the federal waters of the Gulf of Mexico.

       

      “Oil
        and Gas Interest”
        means
        any right, title, or interest (or contractual right to acquire any right,
        title,
        or interest) in, to and under any oil, gas, or other mineral lease or any
        other
        interest in oil and gas, including prospects, leases, wells, mineral rights,
        working interests, royalties, overriding royalties, net profits interests,
        production payments, farm-ins, rights-of-way, easements, licenses and permits
        and also including any right, title or interest (or contractual right to
        acquire
        and right, title or interest) in any geological or geophysical data related
        to
        any of the foregoing.

       

      “Onshore
        U.S. Gulf Coast”
means
        the States of Texas, Louisiana, Mississippi, Alabama and Florida and the
        State
        waters adjacent thereto.

       

      “Organizational
        Expenses”
        means
        all out-of-pocket costs and expenses in connection with the formation and
        organization of the Partnership and any related entities (including any
        reimbursements to Fund I as contemplated by Section 5.4(a)(i)) and the offering
        of interests in the Partnership, including any related legal and accounting
        fees.

       

      “Partner
        Nonrecourse Debt”
has
        the
        meaning set forth in Treasury Regulation section 1.704-2(b)(4).

       

      “Partner
        Nonrecourse Debt Minimum Gain”
has
        the
        meaning set forth in Treasury Regulation section 1.704-2(i)(2).

       

      “Partner
        Nonrecourse Deductions”
means
        any and all items of loss, deduction or expenditure (including any expenditure
        described in section 705(a)(2)(B) of the Code) that, in accordance with the
        principles of Treasury Regulation section 1.704-2(i), are attributable to
        a
        Partner Nonrecourse Debt.

       

      “Partners”
        means
        the General Partner and the Limited Partners.

       

      “Partnership
        Minimum Gain”
means
        that amount determined in accordance with the principles of Treasury Regulation
        section 1.704-2(d).

       

      “Past
        Due Rate”
        means
        the lesser of (a) the per annum prime rate published in the Wall
        Street Journal
        or, if
        no such rate is published therein, the rate quoted from time to time by a
        New
        York money center bank selected by the General Partner plus 4% and (b) the
        maximum non-usurious rate of interest permitted by applicable law.

       

      “Payment
        Date”
        means a
        date on which the Partners are required to make Capital Contributions to
        the
        Partnership, which date (a) shall be specified in a Payment Notice
        delivered to each Limited Partner from which a Capital Contribution is required
        on such date, and (b) shall be at least 10 Business Days after the date of
        delivery of a Payment Notice.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

          Exhibit
            A – Defined Terms

           

        

        
          A-5

          
            

          

        

        
           

        

      

      “Payment
        Notice”
        means a
        written notice requiring Capital Contributions to the Partnership, which
        notice
        shall:

       

      (a) specify
        the amount required from the Limited Partner;

       

      (b) specify
        the purpose for which the Capital Contributions are required to be made;
        and

       

      (c) the
        applicable Payment Date.

       

      “Percentage
        Interest”
        means
        with respect to any Partner, the ratio of such Partner’s aggregate Capital
        Contributions (or deemed contribution in the case of the General Partner
        or the
        Initial Limited Partner) to the total Capital Contributions of all Partners;
        provided that for these purposes (but not for the purpose of determining
        Unfunded Commitments) the Capital Contribution of each Partner shall be adjusted
        to reflect any changes to the Capital Account of such Partner as a result
        of any
        sale of a Defaulting Limited Partner’s Interest pursuant to
        Section 3.4(d).

       

      “Permitted
        Transfer”
        means
        (a) with respect to any Partner, any Transfer to (i) any member of
        such Partner’s immediate family, (ii) any trust, limited partnership,
        limited liability company or other business entity having as its principal
        beneficiaries or owners, such Partner or any other persons described in clause
        (i); and (b) any Transfer by any trust or other entity described in clause
        (a)(ii) preceding to its beneficiaries or owners.

       

      “Permitted
        Transferee”
        means
        any Person that receives all or any portion of an Interest pursuant to a
        Permitted Transfer.

       

      “Person”
        means
        any individual, partnership, corporation, limited liability company,
        unincorporated organization or association, trust (including the trustees
        thereof, in their capacity as such) or other entity.

       

      “Portfolio
        Investment”
        means
        any investment by the Partnership in any Oil and Gas Interest. For purposes
        of
        this definition, the term “investment” shall include any: (i) purchase price,
        brokerage fees, recordation costs, title examination, title curative, reserve
        evaluation, environmental review and other similar fees, costs and expenses
        incurred in connection with any Oil and Gas Interest; (ii) costs, expenses
        and
        liabilities in connection with (a) acquiring, licensing, processing,
        reprocessing and evaluating geological and geophysical data regarding any
        Oil
        and Gas Interest, (b) drilling, sidetracking, deepening, completing, plugging
        back, recompleting and equipping any well relating to any Oil and Gas Interest,
        (c) plugging and abandoning any such well that is a dry hole or that otherwise
        is not completed as a well capable of producing in paying quantities and
        (d)
        acquiring and installing platforms, production facilities, gathering systems,
        pipelines and other facilities necessary to develop and operate any Oil and
        Gas
        Interest and produce, collect, store, treat, process, deliver, market, sell
        or
        otherwise dispose of production from the wells located thereon; and (iii)
        other
        costs, expenses and liabilities related to any Portfolio Investment that
        are
        capital in nature, as determined in accordance with generally accepted
        accounting principles. 

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

          Exhibit
            A – Defined Terms

           

        

        
          A-6

          
            

          

        

        
           

        

      

      “Preferred
        Return Amount” means,
        with respect to any Limited Partner, an amount of cumulative distributions
        under
        Section 4.5(a)(ii) that achieves a thirty percent (30%) internal rate of
        return on the aggregate Capital Contributions made by such Limited Partner
        through the particular date of determination, such internal rate of return
        to be
        calculated through the date of determination as if each such distribution
        (taking into account all distributions of any portion of the Preferred Return
        Amount) and Capital Contribution had been paid or made on the last day of
        the
        month during which it was actually paid or made. The Partners acknowledge
        that
        internal rate of return calculation methodologies differ and that different
        internal rate of return calculation methodologies may result in different
        internal rate of return results.  Accordingly, the Partners agree that the
        internal rate of return methodology to be used for purposes of this definition
        shall be the methodology that would result in the same amount as if the “IRR”
function in Microsoft Excel were used. 

       

      “Pro
        Rata Basis”
means,
        for purposes of determining co-investment allocations pursuant to
        Section 2.9, with respect to any Qualified First Closing Investor that
        elects to participate in a co-investment opportunity, a fraction the numerator
        of which is such Partner’s Commitment and the denominator of which is the sum of
        the Commitments of all Qualified First Closing Investors that elect to
        participate in such co-investment opportunity. 

       

      “Pro
        Rata Share”
        means,
        determined separately for each Limited Partner:

       

      (a) for
        purposes of determining each Limited Partner’s Capital Contribution required to
        be made under Sections 3.2 or 3.3, (i) until the time that all of the
        Limited Partners’ (other than Qualified Employees with respect to whom the
        General Partner grants a waiver pursuant to Section 11.12) Unfunded
        Commitments have been reduced to zero, the percentage represented by the
        proportion that such Limited Partner’s Unfunded Commitment bears to the Unfunded
        Commitments of all of the Partners and (ii) from and after the time all of
        the Limited Partners’ (other than Qualified Employees with respect to whom the
        General Partner grants a waiver pursuant to Section 11.12) Unfunded
        Commitments have been reduced to zero, the percentage represented by the
        proportion that such Limited Partner’s Commitment bears to the Commitments of
        all of the Partners; and

       

      (b) for
        purposes of determining the Capital Contribution requirement under
        Section 3.3(b)(i) of each Partner that is admitted as a Limited Partner at
        a Subsequent Closing or who increases its Commitment at a Subsequent Closing,
        the percentage that such Limited Partner’s Commitment (if such Limited Partner
        was first admitted as a Partner at such Subsequent Closing) or the incremental
        increase of such Limited Partner’s Commitment made at such Subsequent Closing
        (if such Limited Partner had previously been admitted as a Partner) represents
        of the sum of (i) the aggregate Commitments of each Limited Partner
        admitted to the Partnership at such Subsequent Closing and (ii) with
        respect to each Limited Partner admitted to the Partnership prior to such
        Subsequent Closing, the increase in the aggregate Commitments of each such
        Limited Partner that arises at such Subsequent Closing.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

          Exhibit
            A – Defined Terms

           

        

        
          A-7

          
            

          

        

        
           

        

      

      “Prospect
        Generating Entity”
        means
        any Person that presents oil and gas exploration prospects to the Partnership
        for consideration by the Partnership as potential Portfolio
        Investments.

       

      “Qualified
        Employee”
        means
        any Limited Partner that is an employee of the General Partner or the GP
        Company.

       

      “Reference
        Rate”
        means
        the lesser of (a) 10% per annum and (b) the maximum non-usurious rate
        of interest permitted by applicable law.

       

      “Required
        Allocations”
means
        any allocation (or limitation imposed on any allocation) of an item of income,
        gain, deduction or loss pursuant to Sections 4.2(d)(i) - 4.2(d)(vii)), such
        allocations being directly or indirectly required by the Treasury Regulations
        promulgated under section 704(b) of the Code.

       

      “Required
        Interest” means,
        with respect to any group of specified Partners, those of such Partners holding
        at least 75% of the total Commitments of all of such Partners. 

       

      “Section
        704(c) Items”
has
        the
        meaning given that term in Section 4.3(d). 

       

      “Securities
        Act”
        means
        the Securities Act of 1933, as amended.

       

      “Simulated
        Basis”
shall
        mean the Carrying Value of any oil and gas property (as defined in
        Section 614 of the Code).

       

      “Simulated
        Depletion”
shall
        mean, with respect to each oil and gas property, a depletion allowance computed
        in accordance with federal income tax principles (as if the Simulated Basis
        of
        the property were its adjusted tax basis) and in the manner specified in
        Treasury Regulation section 1.704-1(b)(2)(iv)(k)(2). For purposes of
        computing Simulated Depletion with respect to any property, the Simulated
        Basis
        of such property shall be deemed to be the Carrying Value of such property,
        and
        in no event shall such allowance, in the aggregate, exceed such Simulated
        Basis.

       

      “Simulated
        Gain”
shall
        mean the excess of the amount realized from the sale or other disposition
        of an
        oil or gas property over the Carrying Value of such property.

       

      “Simulated
        Loss”
shall
        mean the excess of the Carrying Value of an oil or gas property over the
        amount
        realized from the sale or other disposition of such property.

       

      “Subscription
        Agreement”
        means
        each Subscription Agreement entered into among the Partnership, the General
        Partner and each Limited Partner pursuant to which such Limited Partner
        subscribes to acquire an Interest and is admitted to the
        Partnership.

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

          Exhibit
            A – Defined Terms

           

        

        
          A-8

          
            

          

        

        
           

        

      

       

      “Temporary
        Investments” means:

       

      (a) direct
        obligations of, or obligations the principal of and interest on which are
        unconditionally guaranteed by, the United States of America (or by any agency
        thereof to the extent such obligations are backed by the full faith and credit
        of the United States of America), in each case maturing within nine months
        from
        the date of acquisition thereof;

       

      (b) without
        limiting the provisions of paragraph (d) below, investments in commercial
        paper
        maturing within nine months from the date of acquisition thereof and having,
        at
        such date of acquisition, the highest credit rating obtainable from Standard
        & Poor’s Corporation or from Moody’s Investors Service, Inc.;

       

      (c) investments
        in certificates of deposit, banker’s acceptances and time deposits maturing
        within nine months from the date of acquisition thereof issued or guaranteed
        by
        or placed with, and money market deposit accounts issued or offered by, any
        domestic office of any commercial bank organized under the laws of the United
        States of America or any State thereof and that has a combined capital and
        surplus and undivided profits of not less than $250,000,000;

       

      (d) investments
        in commercial paper maturing within nine months from the date of acquisition
        thereof and issued by the holding company of any commercial bank organized
        under
        the laws of the United States of America or any State thereof that has
        (i) a combined capital and surplus in excess of $1,000,000,000 and a rating
        of at least AA or the equivalent thereof by Standard & Poor’s Corporation or
        at least AA or the equivalent thereof by Moody’s Investors Service, Inc. and
        (ii) commercial paper rated at least A-1 or the equivalent thereof by
        Standard & Poor’s Corporation and at least P-1 or the equivalent thereof by
        Moody’s Investors Service, Inc.;

       

      (e) investments
        in repurchase obligations with a term of not more than seven days for underlying
        securities of the types described in paragraph (a) above entered into with
        any
        office of any commercial bank meeting the qualifications specified in paragraph
        (c) above; and

       

      (f) other
        short-term investments selected by the General Partner, provided they are
        of at
        least the quality of the investments specified in (a)-(e) above.

       

      “Temporary
        Investment Proceeds”
        means
        income from sources other than Portfolio Investments, net of Partnership
        Expenses and reserves therefor allocable to such income in accordance with
        Section 6.3(b). 

       

      
        
          Hall-Houston
            Exploration II, L.P.

          Amended
            and Restated Agreement of Limited Partnership

          Exhibit
            A – Defined Terms

           

        

        
          A-9

          
            

          

        

        
           

        

      

       

      “Transfer”
        including the correlative terms “Transferring,”
        or
“Transferred”
        means
        any direct or indirect transfer, assignment, sale, gift, pledge, hypothecation
        or other encumbrance, or any disposition (whether voluntary or involuntary
        or by
        operation of law), or the acts of the foregoing.

      “Unfunded
        Commitment”
        means,
        as to any Partner as of any date, an amount equal to:

       

      (a) such
        Partner’s Commitment, minus

       

      (b)
         the
        aggregate amount of such Partner’s Capital Contributions (but not Additional
        Amounts) made on or prior to such date, plus

       

      (c) any
        amounts distributed to such Partner pursuant to Section 3.3(b)(ii)
        (excluding Additional Amounts), plus

       

      (d) any
        Commitment assumed by such Partner in connection with the purchase of all
        or a
        portion of another Partner’s Interest.

       

      “Unrealized
        Gain”
        attributable to any item of Partnership property means, as of any date of
        determination, the excess, if any, of (a) the fair market value of such
        property as of such date (as determined under Section 4.1(d) over
        (b) the Carrying Value of such property as of such date (prior to any
        adjustment to be made pursuant to Section 4.1(d) as of such
        date).

       

      “Unrealized
        Loss”
        attributable to any item of Partnership property means, as of any date of
        determination, the excess, if any, of (a) the Carrying Value of such
        property as of such date (prior to any adjustment to be made pursuant to
        Section 4.1(d) as of such date) over (b) the fair market value of such
        property as of such date (as determined under Section 4.1(d)).

       

       

      Hall-Houston
        Exploration II, L.P.

      Amended
        and Restated Agreement of Limited Partnership

      Exhibit
        A – Defined Terms

    
       

      A-10

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