Document:

Exhibit 10.3

 

FIRST AMENDMENT TO CREDIT AGREEMENT

FIRST AMENDMENT TO CREDIT
AGREEMENT (hereinafter referred to as the “Amendment”) dated as of
October 2, 2006, by and among EXCO RESOURCES, INC. (“Borrower”), CERTAIN
SUBSIDIARIES OF BORROWER, as Guarantors (the “Guarantors”), the LENDERS
party hereto (the “Lenders”), and JPMORGAN CHASE BANK, N.A., as
Administrative Agent (“Administrative Agent”).  Unless the context otherwise requires or
unless otherwise expressly defined herein, capitalized terms used but not
defined in this Amendment have the meanings assigned to such terms in the
Credit Agreement (as defined below).

WITNESSETH:

WHEREAS, Borrower, Guarantors,
Administrative Agent and Lenders have entered into that certain Amended and Restated Credit Agreement dated as
of March 17, 2006 (as amended, supplemented or otherwise modified
from time to time, the “Credit Agreement”); and

WHEREAS, Borrower has requested that, in
connection with the formation of EXCO Partners, LP a Delaware limited
partnership (the “MLP”), the Administrative Agent and the Lenders amend
the Credit Agreement to permit the Borrower to (a) designate certain newly
formed Subsidiaries as Unrestricted Subsidiaries, (b) designate certain
existing Restricted Subsidiaries as Unrestricted Subsidiaries and (c) permit up
to $500,000,000 of assets and properties of the Borrower and its Restricted
Subsidiaries, including the Equity Interests of certain Restricted
Subsidiaries, to be transferred to the MLP and, in connection with such
transfer, to release each Restricted Subsidiary transferred to the MLP from its
Guarantee of the Obligations and release the Liens securing the Obligations on
such transferred assets and properties (including the Liens on the Equity
Interests of the transferred Restricted Subsidiaries), and Administrative Agent
and Lenders have agreed to do so on the terms and conditions hereinafter set
forth; 

NOW, THEREFORE, for and in consideration of
the mutual covenants and agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, Borrower, Guarantors, Administrative Agent and the
Lenders hereby agree as follows:

SECTION 1. 
Amendments to Credit Agreement.  Subject to the satisfaction or waiver in
writing of each condition precedent set forth in Section 5 hereof, and
in reliance on the representations, warranties, covenants and agreements
contained in this Amendment, the Credit Agreement shall be amended in the
manner provided in this Section 1.

1.1          Additional Definitions.  Section 1.01
of the Credit Agreement shall be and it hereby is amended by inserting the
following definitions in appropriate alphabetical order:

“CapEx Reimbursement” means the right
of Borrower to receive from the MLP Subsidiaries pursuant to the terms of the
MLP Contribution Agreement up to $150,000,000 of the proceeds of certain Indebtedness incurred by
certain

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Subsidiaries(1) of
the MLP in connection with the Winchester Acquisition and intended to reimburse
the Borrower for certain capital expenditures incurred to acquire,
develop and operate the Transferred Oil and Gas Properties.

“Excluded Properties” means certain
Oil and Gas Interests acquired by the Borrower or its MLP Subsidiaries in
connection with the Winchester Acquisition and located in Adams County,
Mississippi and Montague, Foard, Runnels, Garza and Nacogdoches Counties,
Texas.

“First Amendment” means that certain
First Amendment to Credit Agreement, dated October 2, 2006, by and among the
Borrower, certain Subsidiaries of the Borrower, Lenders and Administrative
Agent.

“Interestholder Subsidiary” means any
Subsidiary that owns or holds MLP Interests or any other Equity Interests of
the MLP.

“Merger Sub” means Winchester
Acquisition, LLC, a Delaware limited liability company, and its successors. 

“MLP” means EXCO Partners, LP, a
Delaware limited partnership.

“MLP Agreements” means, collectively,
(i) that certain Administrative Services Agreement, dated as of October 2,
2006, by and among the Borrower, the MLP General Partner and certain of the MLP
Subsidiaries, (ii) that certain Omnibus Agreement, dated as of October 2, 2006,
by and among the Borrower and certain of the MLP Subsidiaries, and (iii) the
other agreements, certificates and instruments executed and delivered in
connection with the agreements described in the foregoing clauses (i) and (ii),
all as amended, supplemented or modified 
from time to time as permitted by this Agreement.

“MLP Contribution Agreement” means
that certain Contribution, Conveyance and Assumption Agreement, dated as of
October 2, 2006, among the Borrower, the MLP General Partner, the MLP and
certain other parties, together with the additional conveyance documents and
instruments contemplated or referenced thereunder and pursuant to which the
Transferred Subsidiaries and the Transferred Oil and Gas Interests are
transferred to the MLP or certain of its Subsidiaries.

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

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“MLP Contribution Date” means the date
on which the transactions contemplated by the MLP Contribution Agreement are
consummated including the transfer of the Transferred Subsidiaries and the
Transferred Oil and Gas Interests to the MLP 
Subsidiaries in accordance with the MLP Contribution Agreement. 

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

“MLP Interests” means the limited
partnership interest in the MLP.

“MLP Partnership Agreement” means the
Agreement of Limited Partnership of the MLP, as the same may be amended or
restated from time to time.

“MLP Public Offering” means a sale by
the MLP of MLP Interests in an underwritten (firm commitment) initial public
offering registered under the Securities Act of 1933, resulting in the listing
of MLP Interests on a nationally recognized stock exchange, including without
limitation, the NASDAQ National Market System or the New York Stock Exchange. 

“MLP Rights” means the rights to
purchase MLP Interests issued to Borrower by the MLP in connection with the
transfer of the Transferred Subsidiaries and the Transferred Oil and Gas
Interests to the MLP  Subsidiaries. 

“MLP Subsidiaries” means, collectively,
the MLP and its Subsidiaries.

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

“ROJO Pipeline” means ROJO Pipeline,
Inc. a Texas corporation, and its successors.

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

“Transferred Oil and Gas Interests”
means, collectively, (i) the Oil and Gas Interests of the Transferred
Subsidiaries, including all legal and beneficial interests in such Oil and Gas
Interests, and (ii) the Oil and Gas Interests owned or held by the Borrower or
any of its Restricted Subsidiaries and located in Cherokee, Houston, Polk,
Limestone, Rusk or Smith Counties, Texas or Desoto Parish, Louisiana and, in
each case, transferred to certain of the MLP Subsidiaries on the MLP
Contribution Date.

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“Transferred Subsidiaries” means,
collectively, Merger Sub, ROJO Pipeline and TXOK Resources Holdings and its
Subsidiaries. 

“TXOK Resources Holdings” means TXOK
Energy Resources Holdings, L.L.C., a Delaware limited liability company and its
successors. . 

“Winchester Acquisition” means the
acquisition of all of the issued and outstanding Equity Interests of Winchester
Energy Company, Ltd., from Progress Fuels Corporation pursuant to that certain
Agreement and Plan of Merger dated as of July 22, 2006, as amended though the
date hereof.

1.2          Amended Definitions.  Section 1.01 of the Credit Agreement
shall be and it hereby is amended by amending and restating the following
definitions to read in their entirety as follows:

“Borrowing Base Properties” means all
Oil and Gas Interests of the Borrower and the Restricted Subsidiaries evaluated
by the Lenders for purposes of establishing the Borrowing Base; provided that,
from and after the MLP Contribution Date, neither the Transferred Oil and Gas
Interests nor any Oil and Gas Interests owned by any MLP Subsidiary shall
constitute Borrowing Base Properties.

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

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

 “Material
Domestic Subsidiary” means any Domestic Subsidiary (other than the MLP
Subsidiaries) that owns or holds assets, properties or interests (including Oil
and Gas Interests but excluding Equity Interests in the MLP, whether owned
directly or indirectly) with an aggregate fair market value, on a

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consolidated basis, greater than five percent
(5%) of the aggregate fair market value of all of the assets, properties and
interests (including Oil and Gas Interests but excluding Equity Interests in
the MLP, whether owned directly or indirectly) of the Borrower and the
Restricted Subsidiaries, on a consolidated basis. 

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

1.3          Commitment Reductions.  Section 2.02(d)
of the Credit Agreement shall be and it hereby is amended by replacing the
reference to “Section 7.04(a)(vi)” in such
Section with “Section 7.03(a)(vi)”.

1.4          Mandatory Prepayment.  Section 2.12
of the Credit Agreement shall be and it hereby is amended by amending
subsection (b) in its entirety to read as follows and inserting the following
clause (c) at the end of such Section:

(b)          If
the Borrower or any Restricted Subsidiary sells, transfers or otherwise disposes
of any Borrowing Base Properties at any time a Borrowing Base Deficiency exists
or would exist after giving effect to such sale, transfer or disposition, the
Borrower shall prepay the Borrowings in an amount equal to the Net Cash
Proceeds received from such sale, transfer or other disposition on the date it
or any Restricted Subsidiary receives such Net Cash Proceeds; provided,
however that amounts applied to the payment of Borrowings pursuant to this
Section may be reborrowed subject to and in accordance with the terms of this
Agreement.  Amounts applied to the
prepayment of Borrowings pursuant to this Section shall be first applied to
Swingline Borrowings then outstanding and upon payment in full of all outstanding
Swingline Borrowings, second, ratably to ABR Revolving Borrowings then
outstanding and, upon payment in full of all outstanding ABR Revolving
Borrowings, third, to Eurodollar Revolving Borrowings then outstanding, and if
more than one Eurodollar Revolving Borrowing is then outstanding, to each such
Eurodollar Revolving Borrowing beginning with the Eurodollar Revolving
Borrowing with the least number of days remaining in the Interest Period
applicable thereto and ending with the Eurodollar Revolving Borrowing with the
most number of days remaining in the Interest Period applicable thereto,
subject to the payment of any funding

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indemnification amounts required by Section
2.17 but without penalty or premium.

(c)           On
the MLP Contribution Date, Borrower shall cause the MLP Subsidiaries to pay in
full the CapEx Reimbursement to Borrower and Borrower shall use the proceeds of
the CapEx Reimbursement to prepay the Borrowings in an amount equal to the
amount of the CapEx Reimbursement; provided, however, that
amounts applied to the payment of Borrowings pursuant to this Section  2.12(c) may be reborrowed subject to and in
accordance with the terms of this Agreement. 
Amounts applied to the prepayment of Borrowings pursuant to this Section
2.12(c) shall be first applied to Swingline Borrowings then outstanding and
upon payment in full of all outstanding Swingline Borrowings, second, ratably
to ABR Revolving Borrowings then outstanding and, upon payment in full of all
outstanding ABR Revolving Borrowings, third, to Eurodollar Revolving Borrowings
then outstanding, and if more than one Eurodollar Revolving Borrowing is then
outstanding, to each such Eurodollar Revolving Borrowing beginning with the
Eurodollar Revolving Borrowing with the least number of days remaining in the
Interest Period applicable thereto and ending with the Eurodollar Revolving
Borrowing with the most number of days remaining in the Interest Period
applicable thereto, subject to the payment of any funding indemnification
amounts required by Section 2.17 but without penalty or premium. 

1.5          Financial Statements.  Paragraphs (a) and (b) of Section 6.01 of the
Credit Agreement shall be and they hereby are amended and restated in their
entirety to read as follows:

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

(b)          within
45 days after the end of each fiscal quarter of the Borrower, the consolidated
(and consolidating) balance sheet and related consolidated (and with respect to
statements of operations, consolidating) statements of operations and cash
flows of the Borrower and its Consolidated Subsidiaries as of the end of and
for such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous

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fiscal year, all certified by a Responsible
Officer as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its Consolidated Subsidiaries on
a consolidated and consolidating basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;

1.6          Maintenance of Certain Swap
Agreements.  Section
6.11 of the Credit Agreement shall be and it hereby is amended and restated
in its entirety to read as follows:

6.11        Swap
Agreements.  Except as otherwise
provided in Section 7.05, the Borrower will, and will cause each Restricted
Subsidiary to, maintain the Existing Swap Agreements and none of the Existing
Swap Agreements may be amended, modified or cancelled without the prior written
consent of the Required Lenders.  Upon
the request of the Required Lenders, the Borrower and each Restricted
Subsidiary shall use their commercially reasonable efforts to cause each Swap
Agreement to which the Borrower or any Restricted Subsidiary is a party (i) to
permit the Lenders to cure any  default
or event of default and assume the obligations of each Credit Party under such
agreement or contract and (ii) to prohibit the termination of such
agreement or contract by the counterparty thereto if the Lenders cure such
defaults or events of default  and assume
such obligations.  Upon the request of
the Administrative Agent, the Borrower shall, within thirty (30) days of such
request, provide to the Administrative Agent and each Lender copies of all
agreements, documents and instruments evidencing the Swap Agreements not
previously delivered to the Administrative Agent and Lenders, certified as true
and correct by a Responsible Officer of the Borrower, and such other
information regarding such Swap Agreements as the Administrative Agent and
Lenders may reasonably request.

1.7          Indebtedness.  Section 7.01 of the Credit Agreement
shall be and it hereby is amended by deleting “and”
at the end of clause (h) of such Section and amending and restating the
remainder of such Section in its entirety to read as follows:

(i)           Indebtedness
consisting of contingent obligations with respect to the investment permitted
under Section 7.04(h); and

(j)            Other
unsecured Indebtedness of the Credit Parties in an aggregate principal amount
not exceeding $5,000,000 at any time outstanding.

1.8          Investments.  Section 7.04
of the Credit Agreement shall be and it hereby is amended by deleting “and” at the end of clause (f)
of such Section and amending and restating the remainder of such Section in its
entirety to read as follows:

(g)          investments
in the MLP Subsidiaries on the MLP Contribution Date consisting of the Equity
Interests of the Transferred Subsidiaries and the Transferred Oil and Gas
Interests in exchange for MLP Interests representing not less than 100% of the
issued and outstanding MLP Interests on the MLP Contribution Date, the MLP
Rights and the payment of the CapEx

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Reimbursement, in each case, in accordance
with the MLP Contribution Documents and without waiver or amendment of any
material term thereof;

(h)          at
any time after April 2, 2008, investments in the MLP Subsidiaries consisting of
cash or Permitted Investments; provided that (i) the MLP Public Offering has
not been consummated prior to the date of such investment, (ii) no Default has
occurred and is continuing or would result from the making of such investment,
(iii) after giving effect to such investment, the Borrowing Base exceeds  Aggregate Credit Exposure by an amount equal
to or greater than 10% of the Borrowing Base and (iv) the amount of investments
made pursuant to this clause (h) of Section 7.04 (in each case with respect to
Permitted Investments, determined based on the fair market value of such
Permitted Investment at the time of such investment) does not exceed in the
aggregate $150,000,000;

(i)           the
purchase of the Excluded Properties; and

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

1.9          Swap Agreements.  Section 7.05
of the Credit Agreement shall be and it hereby is amended by inserting the
following at the end of such Section:

Notwithstanding the foregoing, on the MLP Contribution Date, the Swap
Agreements and related transactions described on Annex A to the First Amendment
may be transferred and assigned to any one or more of the MLP Subsidiaries,
whether by transfer of the Transferred Subsidiaries or otherwise; provided that
the Borrower and any Restricted Subsidiary which is a party to any such Swap
Agreements as of the MLP Contribution Date (other than the Transferred
Subsidiaries) is released from all liability with respect to such Swap
Agreements effective as of the MLP Contribution Date on terms and conditions
acceptable to the Administrative Agent. 

1.10        Restricted Payments.  Section 7.06 of the Credit Agreement
shall be and it hereby is amended and restated in its entirety to read as
follows:

Section 7.06.        Restricted
Payments.  The Borrower will not, nor
will it permit any of its Restricted Subsidiaries to, declare or make, or agree
to pay or make, directly or indirectly, any Restricted Payment, except that (a)
the Borrower may declare and pay dividends and distributions with respect to
its Equity Interests payable solely in additional shares of its common stock,
(b) the Borrower may make Restricted Payments pursuant to and in accordance
with stock option plans or other benefit plans for management or employees of
the Borrower and its Restricted Subsidiaries in an aggregate amount not to
exceed

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$2,000,000 in any fiscal year, (c) so
long as no Default has occurred and is continuing, the Borrower may declare and
make distributions of the MLP Rights, and (d) any Restricted Subsidiary may
make Restricted Payments to the Borrower or any Guarantor.

1.11        Affiliate Transactions.  Section 7.07
of the Credit Agreement shall be and it hereby is amended and restated in its
entirety to read as follows:

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

1.12        Amendment of Certain Agreements.  Section 7.10
of the Credit Agreement shall be and it hereby is amended and restated in its
entirety to read as follows:

Section 7.10         Amendments
of Certain Agreements.  The Borrower
will not, nor will it permit any of its Restricted Subsidiaries to, enter into
or permit any material modification or amendment of, or waive any material
right or obligation of any Person under its Organizational Documents, or the MLP Contribution Documents.  The Borrower will not, nor will it permit any
of its Restricted Subsidiaries to, enter into or permit any modification or
amendment of the Senior Note Documents the effect of which is to (a) increase
the maximum principal amount of the Senior Notes or the rate of interest on any
of the Senior Notes (other than as a result of the imposition of a default rate
of interest in accordance with the terms of the Senior Note Documents), (b)
change or add any event of default or any covenant with respect to the Senior
Note Documents if the effect of such change or addition is to cause any one or
more of the Senior Note Documents to be more restrictive on the Borrower or any
of its Subsidiaries than such Senior Note Documents were prior to such change
or addition, (c) change the dates upon which payments of principal or interest
on the Senior Notes are due, (d) change any redemption or prepayment provisions
of the Senior Notes, (e) alter the subordination provisions, if any, with
respect to any of the Senior Note Documents, (f) change any of Sections
4.07(a), 10.06, 10.07 or 12.03 of the Indenture or the penultimate paragraphs
of each of Sections 9.01 or 9.02 of the Indenture, (g) grant any Liens in any
assets of the Borrower or any of its Subsidiaries, or (h) permit any Subsidiary
to Guarantee the Senior Notes unless

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such Subsidiary is (or concurrently with any
such Guarantee becomes) a Guarantor.

1.13        Interestholder Subsidiaries.  ARTICLE VII
of the Credit Agreement shall be and it hereby is amended by inserting the
following at the end of such Article as Section 7.13:

Section 7.13         Interestholder
Subsidiaries.  At all times prior to
the consummation of the MLP Public Offering, the Borrower will not, nor will it
permit any Interestholder Subsidiary to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of the Borrower or any
Interestholder Subsidiary to create, incur or permit to exist any Lien upon any
of its property or assets, or (b) the ability of any Interestholder Subsidiary
to pay dividends or other distributions with respect to any of its Equity
Interests or to make or repay loans or advances to the Borrower, any Restricted
Subsidiary or any Interestholder Subsidiary or to Guarantee Indebtedness of the
Borrower, any Restricted Subsidiary or any Interestholder Subsidiary; provided
that the foregoing shall not apply to restrictions and conditions imposed by
law, the Indenture or by this Agreement. 
At all times prior to the consummation of the MLP Public Offering,  the Borrower will not permit any
Interestholder Subsidiary to, directly or indirectly, (i) create, incur, assume
or permit to exist any Indebtedness or (ii) create, incur, assume or permit to
exist any Lien on any property or asset now owned or hereafter acquired by any
Interestholder Subsidiary, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof.  At all times prior to the consummation of the
MLP Public Offering, the Interestholder Subsidiaries shall own and hold 100% of
the issued and outstanding Equity Interests of the MLP.

1.14        Notices.  Clauses (ii) and (iii) of Section 11.01
of the Credit Agreement shall be and they hereby are amended and restated in
its entirety to read as follows:

(ii)          if
to the Administrative Agent or Issuing Bank, to JPMorgan Chase Bank, N.A., JPMorgan Loan Services, 21
South Clark St., 19th Floor, Chicago, Illinois 60603-2003, Telecopy No.: (312)
385-7096, Attention: Jose Rodriguez, with a copy to JPMorgan Chase Bank, N.A.,
1717 Main Street, TX1-2448, Dallas, Texas 75201, Telecopy No. (214) 290-2332,
Attention:  Wm. Mark Cranmer, Senior Vice
President;

(iii)         if
to the Swingline Lender, JPMorgan Chase Bank, N.A., JPMorgan Loan Services, 21
South Clark St., 19th Floor, Chicago, Illinois 60603-2003, Telecopy No.: (312)
385-7096, Attention:  Jose Rodriguez, with a copy to JPMorgan Chase Bank,
N.A., 1717 Main Street, Mail Code TX1-2448, Dallas, Texas 75201, Telecopy No.
(214) 290-2332, Attention:  Wm. Mark
Cranmer, Senior Vice President; and

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1.15        Rate Management Transactions.  Section 11.16 of the Credit Agreement
shall be and it hereby is amended by replacing the term “Rate Management
Obligations” with the term “Rate Management Transactions.”

1.16        Borrowing Base and Aggregate Commitment.  Notwithstanding anything to the contrary in
the Credit Agreement, (a) on the MLP Contribution Date and until but not
including the next date as of which the Borrowing Base is redetermined, the
Borrowing Base shall be $600,000,000 and (b) on the MLP Contribution Date the
Aggregate Commitment shall be $400,000,000.

SECTION 2. 
Unrestricted Subsidiaries.  The Subsidiaries of Borrower listed on Annex B
have been designated as Unrestricted Subsidiaries by the Board of Directors of
Borrower effective as of the MLP Contribution Date.

SECTION 3. 
Consent to Termination and Release. 
Effective upon the MLP Contribution Date, the Lenders hereby
consent to the release of each Transferred Subsidiary from its obligations
under the Loan Documents, including the Guarantee of the Obligations of each
Transferred Subsidiary under Article VIII of the Credit Agreement; and to the
release of the Transferred Oil and Gas Interests and the Equity Interests of
the Transferred Subsidiaries from the Liens securing the Obligations provided
that, in exchange for such Transferred Subsidiaries and the Transferred Oil and
Gas Interests, the Interestholder Subsidiaries receive MLP Interests
representing 100% of the issued and outstanding MLP Interests on the MLP
Contribution Date and the Borrower receives the MLP Rights and payment of the
CapEx Reimbursement on the MLP Contribution Date, all in accordance with the
MLP Contribution Documents without the waiver or amendment of any material term
thereof.

SECTION 4.  Release of
Transferred Subsidiaries.  Effective on the MLP Contribution Date and
subject to the consummation of the transactions contemplated by the MLP
Contribution Documents, (a) the Administrative Agent, on behalf of the Lenders
and for valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, shall execute and deliver to the Transferred Subsidiaries a
Termination Agreement and Release in substantially the form attached hereto as
Annex C and (b) Administrative Agent shall release all liens and security interest
held by Administrative Agent, for the benefit of the Lenders, in all assets and
properties granted to the Administrative Agent by the Transferred Subsidiaries
and all such Liens and security interest granted by any holder of the Equity
Interests of any Transferred Subsidiaries in such Equity Interests.

SECTION 5. 
Conditions.  The
amendments to the Credit Agreement contained in Section 1 of this
Amendment and the consent of the Lenders to the termination of certain
Guarantees and the release of certain Collateral set forth in Section 3
of this Amendment shall be effective upon the satisfaction of each of the
conditions set forth in this Section 5.

5.1          Execution and Delivery.  Each Credit Party, each Lender and the
Administrative Agent shall have executed and delivered this Amendment.

5.2          MLP Contribution Documents.  The Administrative Agent shall have received
copies of all of the MLP Contribution Documents executed and delivered in
connection with the

 11
 

 

transfer of the
Transferred Subsidiaries and the Transferred Oil and Gas Interests and the
formation of the MLP Subsidiaries.

5.3          No Default.  No Default shall have occurred and be
continuing.

5.4          Other Documents.  The Administrative Agent shall have received
such other instruments and documents incidental and appropriate to the
transaction provided for herein as the Administrative Agent or its special
counsel may reasonably request, and all such documents shall be in form and
substance satisfactory to the Administrative Agent.

SECTION 6. 
Representations and Warranties of Borrower.  To induce the Lenders to enter into this
Amendment, each Credit Party hereby represents and warrants to the Lenders as
follows:

6.1          Reaffirmation of Representations and
Warranties/Further Assurances.  After giving effect to the amendments,
consents, terminations and releases herein, each representation and warranty of
such Credit Party contained in the Credit Agreement or in any other Loan
Document is true and correct in all material respects on the date hereof
(except to the extent such representations and warranties relate solely to an
earlier date).

6.2          Corporate Authority; No Conflicts.  The execution, delivery and performance by
such Credit Party of this Amendment and all documents, instruments and
agreements contemplated herein are within such Credit Party’s corporate or
other organizational powers, have been duly authorized by necessary action,
require no action by or in respect of, or filing with, any court or agency of
government and do not violate or constitute a default under any provision of
any applicable law or other agreements binding upon such Credit Party or result
in the creation or imposition of any Lien upon any of the assets of such Credit
Party except for Liens permitted under Section 7.02 of the Credit Agreement.

6.3          Enforceability.  This Amendment constitutes the valid and
binding obligation of such Credit Party enforceable in accordance with its
terms, except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditor’s rights generally, and (ii) the
availability of equitable remedies may be limited by equitable principles of
general application. 

SECTION 7. 
Miscellaneous.

7.1          Reaffirmation of Loan Documents and
Liens.  Any and
all of the terms and provisions of the Credit Agreement and the Loan Documents
shall, except as amended and modified hereby, remain in full force and
effect.  Each Credit Party hereby agrees
that the amendments and modifications herein contained shall in no manner
affect or impair the liabilities, duties and obligations of any Credit Party
under the Credit Agreement and the other Loan Documents or the Liens securing
the payment and performance thereof.  

7.2          Parties in Interest.  All of the terms and provisions of this
Amendment shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns.

 12
 

 

7.3          Legal Expenses.  Each Credit Party hereby agrees to pay all
reasonable fees and expenses of special counsel to the Administrative Agent
incurred by the Administrative Agent in connection with the preparation,
negotiation and execution of this Amendment and all related documents.

7.4          Counterparts.  This Amendment may be executed in one or more
counterparts and by different parties hereto in separate counterparts each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.  However,
this Amendment shall bind no party until each Credit Party, the Lenders (or at
least the required percentage thereof), and the Administrative Agent have
executed a counterpart.  Delivery of
photocopies of the signature pages to this Amendment by facsimile or electronic
mail shall be effective as delivery of manually executed counterparts of this
Amendment.

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

7.6          Headings.  The headings, captions and arrangements used
in this Amendment are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify or modify the terms of this Amendment,
nor affect the meaning thereof.

[Signature Pages Follow]

 13

 

IN WITNESS WHEREOF, the parties have caused
this First Amendment to Credit Agreement to be duly executed as of the date
first above written.

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  EXCO
  RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /S/ J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  
	
   

  	
  Title:

  	
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  	
   

  
	
   

  	
  EXCO Resources, Inc.

  
	
   

  	
  12377 Merit Drive, Suite 1700

  
	
   

  	
  Dallas, Texas 75251

  
	
   

  	
  Facsimile No. 214-368-2087

  
	
   

  	
  Attn:

  	
  Douglas H. Miller

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  and

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attn:

  	
  J. Douglas Ramsey

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
  EXCO OPERATING, LP

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  EXCO Investment II, LLC,

  
	
   

  	
   

  	
  its sole general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  EXCO Resources, Inc.,

  
	
   

  	
   

  	
   

  	
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /S/ J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President and Chief Financial

  Officer

  
										

 

 

	
  

  	
  NORTH COAST ENERGY, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Title:

  	
  Vice President and Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NORTH COAST ENERGY EASTERN, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Title:

  	
  Vice President and Chief Financial Officer 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PINESTONE RESOURCES, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Title:

  	
  Vice President and Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TXOK ACQUISITION, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Title:

  	
  Vice President and Chief Financial Officer

  	
   

  
									

 

 

	
  

  	
  TXOK ENERGY RESOURCES COMPANY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Title:

  	
  Vice President and Chief Financial Officer

  	
   

  
					

 

 

 

	
  

  	
  TXOK ENERGY RESOURCES HOLDINGS,
  L.L.C.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Title:

  	
  Vice President and Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TXOK TEXAS ENERGY HOLDINGS, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
  Title:

  	
  Vice President and Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TXOK TEXAS ENERGY RESOURCES, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  TXOK Texas Energy Holdings, LLC,

  	
   

  
	
   

  	
   

  	
  as general partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
   

  	
  Name:

  	
  J. Douglas Ramsey, Ph.D.

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Chief Financial

  Officer

  	
   

  
							

 

 

 

	
  

  	
  JPMORGAN CHASE BANK, N.A.,

  	
   

  
	
   

  	
  as a Lender and as Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Wm. Mark Cranmer

  	
   

  
	
   

  	
  Name:

  	
  Wm. Mark Cranmer

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
					

 

 

	
  

  	
  KEY BANK, NA,

  	
   

  
	
   

  	
  as a Lender and as Syndication Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Thomas Rajan

  	
   

  
	
   

  	
  Name:

  	
  Thomas Rajan

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
						

 

 

	
  

  	
  CITIBANK, N.A.,

  	
   

  
	
   

  	
  as a Lender and as Syndication Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Angela McCracken

  	
   

  
	
   

  	
  Name:

  	
  Angela McCracken

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
						

 

 

	
  

  	
  SCOTIABANC INC.,

  	
   

  
	
   

  	
  as a Lender and as Documentation Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ William E. Zarrett

  	
   

  
	
   

  	
  Name:

  	
  William E. Zarrett

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  
						

 

 

	
  

  	
  BNP PARIBAS,

  	
   

  
	
   

  	
  as a Lender and as Documentation Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ David Dodd

  	
   

  
	
   

  	
  Name:

  	
  David Dodd

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Polly Schott

  	
   

  
	
   

  	
  Name:

  	
  Polly Schott

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
							

 

 

	
  

  	
  WACHOVIA BANK, NATIONAL

  	
   

  
	
   

  	
  ASSOCIATION,

  	
   

  
	
   

  	
  as a Lender and as Senior Managing Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Russell Clingman

  	
   

  
	
   

  	
  Name:

  	
  Russell Clingman

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
						

 

 

	
  

  	
  BANK OF AMERICA, NA,

  	
   

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Jeffrey H. Rathkamp

  	
   

  
	
   

  	
  Name:

  	
  Jeffrey H. Rathkamp

  	
   

  
	
   

  	
  Title:

  	
  Principal

  	
   

  
						

 

 

 

	
  

  	
  FORTIS CAPITAL CORP.,

  	
   

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Michele Jones

  	
   

  
	
   

  	
  Name:

  	
  Michele Jones

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Darrell Holley

  	
   

  
	
   

  	
  Name:

  	
  Darrell Holley

  	
   

  
	
   

  	
  Title:

  	
  Managing Director

  	
   

  
							

 

 

	
  

  	
  BANK OF SCOTLAND,

  	
   

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Karen Welch

  	
   

  
	
   

  	
  Name:

  	
  Karen Welch

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

 

	
  

  	
  SUNTRUST BANK,

  	
   

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Sean Roche

  	
   

  
	
   

  	
  Name:

  	
  Sean Roche

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

 

	
  

  	
  UNION BANK OF CALIFORNIA, N.A.,

  	
   

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Kendell L. Osterborg

  	
   

  
	
   

  	
  Name:

  	
  Kendell L. Osterborg

  	
   

  
	
   

  	
  Title:

  	
  Sr. Vice President – US Marketing Manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Alison Fuqua

  	
   

  
	
   

  	
  Name:

  	
  Alison Fuqua

  	
   

  
	
   

  	
  Title:

  	
  Investment Banking Officer

  	
   

  
						

 

 

 

	
  

  	
  COMERICA BANK,

  	
   

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Rebecca L. Harper

  	
   

  
	
   

  	
  Name:

  	
  Rebecca L. Harper

  	
   

  
	
   

  	
  Title:

  	
  Corporate Banking Officer

  	
   

  
						

 

 

	
  

  	
  TORONTO DOMINION (TEXAS) LLC,

  	
   

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Debbi Brito

  	
   

  
	
   

  	
  Name:

  	
  Debbi Brito

  	
   

  
	
   

  	
  Title:

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

 

	
  

  	
  CREDIT SUISSE, Cayman Islands Branch,

  	
   

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Vanessa Gomez

  	
   

  
	
   

  	
  Name:

  	
  Vanessa Gomez

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Nupur Kamar

  	
   

  
	
   

  	
  Name:

  	
  Nupur Kammar

  	
   

  
	
   

  	
  Title:

  	
  Associate

  	
   

  
							

 

 

	
  

  	
  GENERAL ELECTRIC CAPITAL CORPORATION,

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Matthew A. Toth

  	
   

  
	
   

  	
  Name:

  	
  Matthew A. Toth

  	
   

  
	
   

  	
  Title:

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  	
   

  
							

 

 

	
  

  	
  NATEXIS BANQUES POPULAIRES,

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Donovan C. Broussard

  	
   

  
	
   

  	
  Name:

  	
  Donovan C. Broussard

  	
   

  
	
   

  	
  Title:

  	
  Vice President & Group Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Louis P. Laville, III

  	
   

  
	
   

  	
  Name:

  	
  Louis P. Laville, III

  	
   

  
	
   

  	
  Title:

  	
  Vice President & Group Manager

  	
   

  
						

 

 

	
  

  	
  BARCLAYS BANK PLC,

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Nicholas Bell

  	
   

  
	
   

  	
  Name:

  	
  Nicholas Bell

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
						

 

 

	
  

  	
  SOCIÉTÉ GÉNÉRALE,

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Stephen W. Warfel

  	
   

  
	
   

  	
  Name:

  	
  Stephen W. Warfel

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
					

 

 

	
  

  	
  WESTLB AG, NY BRANCH,

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Duncan Robertson

  	
   

  
	
   

  	
  Name:

  	
  Duncan Robertson

  	
   

  
	
   

  	
  Title:

  	
  Executive Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Juan KruetzExhibit
10.4

AMENDED
AND RESTATED EQUITY CONTRIBUTION AGREEMENT (this “Agreement”), dated as
of October 4, 2006, among EXCO RESOURCES, INC., a Texas corporation (the “Equity
Contributor”), EXCO PARTNERS OPERATING PARTNERSHIP, LP, a Delaware limited partnership
(the “Borrower”), and JPMORGAN CHASE BANK, N.A., as Administrative Agent
(in such capacity, the “Administrative Agent”) for the banks and other
financial institutions or entities (the “Lenders”) from time to time
parties to the Senior Term Credit Agreement, dated as of October 2, 2006 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, the Guarantors party thereto, the Lenders,
certain other entities and the Administrative Agent.

W
I T N E S S E T H :

WHEREAS, the Equity
Contributor owns, indirectly, 100% of the partners equity of the Borrower;

WHEREAS, pursuant to the
Credit Agreement, the Lenders have severally agreed to make extensions of
credit to the Borrower upon the terms and subject to the conditions set forth
therein;

WHEREAS, the Equity
Contributor will derive substantial benefit from the making of the extensions
of credit under the Credit Agreement; and

WHEREAS, the parties hereto
entered into an Equity Contribution Agreement dated as of October 2, 2006, and
wish to amend and restate such Agreement pursuant to this Agreement;

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

SECTION
1.  DEFINITIONS

1.1           Defined Terms and
Principles of Construction.  (a)  Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement (such definitions to be equally applicable to both the singular and
plural forms of the terms defined), and the following terms shall have the
following meanings:

“Administrative Agent”:  as defined in the preamble hereto.

“Agreement”:  as defined in the preamble hereto.

“Credit Agreement”:  as defined in the preamble hereto.

“Debt Incurrence Amount”:  as defined in Section 2.1(a) hereof.

“Equity Contribution”:  as defined in Section 2.1 hereof.

“Equity Contributor”:  as defined in the preamble hereto.

“Equity Contribution Date”:  the date that is eighteen months after the
Effective Date.

“Limitation Sentence”:  as defined in Section 2.1(a) hereof.

 

“Measurement Date”:  as defined in Section 2.1(a) hereof.

“Option”:  as defined in Section 2.1(b) hereof.

“RP Baskets”:  the baskets described in Section 4.05(a) or
4.05(b)(1) of the Senior Note Indenture, in each case as in effect on the date
hereof.

“Senior Credit Agreement”:  the Credit Agreement dated as of March 17,
2006 among the Equity Contributor, certain of its Subsidiaries, the Lenders
party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, as
amended by the First Amendment thereto dated as of October 2, 2006.

“Senior Note Indenture:  the Senior Note Indenture dated as of January
20, 2004 among the Equity Contributor, certain of its Subsidiaries and
Wilmington Trust Company, as trustee, as supplemented by the First Supplemental
Indenture thereto dated as of January 27, 2004, pursuant to which the Senior
Notes were issued.

“Senior Notes”:  the Equity Contributor’s 7-1/4% Senior Notes
due 2011.

(b)           The words “hereof”, “herein”, and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.

SECTION
2.  OBLIGATIONS OF THE EQUITY CONTRIBUTOR

2.1           Equity
Contribution.  (a)  Subject in all respects to the next sentence
hereof (the “Limitation Sentence”), if any
Loans shall remain outstanding on the Equity Contribution Date, the Equity Contributor
hereby agrees, for the benefit of the Borrower and the Secured Parties, to make
a cash common equity contribution to the Borrower on the Equity Contribution
Date in an amount equal to the lesser of (i) $150,000,000 and (ii) the
aggregate principal amount of the Loans then outstanding (the “Equity
Contribution”).  Notwithstanding the foregoing, the
agreement of the Equity Contributor in
this Section 2.1(a) shall be of
no force or effect, and shall not constitute an obligation of any nature, in an
amount that exceeds, on each day from and after the date hereof (each, a “Computation
Day”), the highest Interim Contribution Amount computed on any day during
the period from the date hereof to such Computation Day.  As used herein, “Interim Contribution Amount”
means, on each Computation Day, the lesser of (i) the amount available under
the RP Baskets on such Computation Day and (ii) the amount of Indebtedness that
may be incurred under Section 4.04(a) of the Senior Note Indenture as of the
most recent Measurement Date (as defined below) occurring on or prior to such
Computation Day (the “Debt Incurrence Amount”).  The Debt Incurrence Amount shall
be calculated on the date hereof, on the Equity Contribution Date and, whether
before or after the Equity Contribution Date, on each date on which quarterly
or annual financial statements of the Equity Contributor become available and
on each date on which any amount becomes available under any RP Basket (each
such calculation date, a “Measurement Date”).  On the Equity Contribution Date, the amount
of the Equity Contribution required to be made shall equal the lesser of (i)
the full amount of the Equity Contribution and (ii) the highest Interim
Computation Amount as of any Computation Day occurring on or prior to the
Equity Contribution Date.   If, due to the Limitation Sentence,
the full amount of the Equity Contribution cannot be made on the Equity
Contribution Date, then, on each subsequent Measurement Date, the Equity
Contributor shall make an additional portion of the Equity Contribution in an
amount equal the lesser of (i) the
theretofore unfunded portion of the Equity Contribution, (ii) the amount
available under the RP Baskets on such Measurement Date and (iii) the Debt
Incurrence Amount as of such Measurement Date. 
The Limitation Sentence shall
cease to be applicable if the Senior Notes are redeemed or defeased.  For avoidance of 

 

doubt, it is understood that, if (i) the Senior Note
Indenture does not permit the funding of the full amount of the Equity Contribution
on the Equity Contribution Date and (ii) the Equity Contributor has
not redeemed or defeased all of the Senior Notes on or prior to the Equity
Contribution Date, then the Equity Contributor will be in violation of
Section 4.2(e) hereof.  Notwithstanding
anything to the contrary in this Section 2.1(a), all or a portion of the Equity
Contribution may be funded by the Borrower’s parent, EXCO Partners, LP (the “Parent”)
so long as (i) the proceeds thereof are contributed to the Borrower in the form
of common equity and (ii) no more than 25% of the direct or indirect voting or
economic interest in the Parent may be issued or sold in connection therewith.

(b)           If
the Required Lenders so determine (the “Option”), then, in lieu of
complying with Section 2.1(a) hereof, on the Equity Contribution Date, (i) the
Equity Contributor shall be required to add the Borrower and its Subsidiaries
as “Restricted Subsidiaries” under as defined in the Senior Credit Agreement
and the Senior Note Indenture and (ii) the Equity Contributor shall provide,
and cause the Restricted Subsidiaries as so defined to provide, guarantees and
collateral in respect of the Loans on terms substantially consistent with the
guarantees and collateral provided under the Credit Agreement, in each case
pursuant to documentation reasonably satisfactory to the Administrative Agent.  Notwithstanding the foregoing, the Option
shall be available only if compliance with this Section 2.1(b) is permitted by
the Senior Credit Agreement (if still in effect).  The Equity Contributor agrees to use
commercially reasonable efforts, promptly after the date hereof, to seek the
requisite consent of lenders under the Senior Credit Agreement to the exercise
of the Option.  If the Option is
exercised, then any provision of this Agreement specifically relating to the
Equity Contribution shall cease to be effective.

2.2           Application of
the Cash Equity Contribution.  The
proceeds of the Equity Contribution shall be used by the Borrower to prepay the
Loans in accordance with the terms of Section 2.10 of the Credit Agreement.

2.3           Obligations
Unconditional; Waiver of Defenses.

(a)           Except as provided
in Section 2.1, the obligations of the Equity Contributor to make, and the
Borrower’s right to receive, the Equity Contribution pursuant to Section
2.1(a), and, if applicable, the obligation of the Equity Contributor to comply
with Section 2.1(b), are irrevocable, absolute and unconditional.  The Equity Contributor hereby unconditionally
waives notice of acceptance hereof, of any action taken or omitted in reliance
hereon and of any defaults by the Borrower or any other Person in the payment
of any amounts due under any Loan Document, and further unconditionally waives
diligence, protest, presentment, filing of claims with a court in the event of
the bankruptcy of the Borrower or any other Person, any right to require a
proceeding against the Borrower or any other Person or that the Borrower or any
other Person be joined in any proceeding, any marshaling of assets of the
Borrower or any other Person, the Borrower’s or any other Person’s providing
security for any of the obligations hereunder or any notice of default with
respect thereto, or any other act or omission or requirement or delay to do any
other act or thing which might in any manner or to any extent operate as a
discharge of any of the obligations of the Equity Contributor hereunder.  The Equity Contributor agrees that this
Agreement shall remain in full force and effect without regard to, and shall
not be affected or impaired by, any invalidity, irregularity or
unenforceability in whole or in part of, or any default under, any Loan
Document which may now or hereafter be caused or imposed in any manner
whatsoever, or the bankruptcy or insolvency of the Borrower or any other
Person.

(b)           The obligations of
the Equity Contributor under this Agreement shall not be subject to (and the
Equity Contributor hereby unconditionally waives) any notice of non-payment,
demand, abatement, reduction, limitation, impairment, termination, set-off,
defense, counterclaim or recoupment whatsoever or any right to any thereof, and
shall not be released, discharged or in any way affected by any reorganization,
arrangement, compromise, composition or plan affecting the Borrower or any
other Person, or by any compromise, settlement, release, amendment, waiver,
addition, modification, 

 

or
termination of any or all of the obligations, conditions, covenants or
agreements of the Borrower or any other Person under or in respect of any Loan
Document or by the taking or omission of any action referred to in any Loan
Document (including, without limitation, the enforcement, assertion or exercise
of any such right, power or remedy), or by the exchange, surrender,
substitution or modification of any security for the Obligations, whether or
not the undersigned shall have notice or knowledge of any of the foregoing.

2.4           Overdue Amounts.  From the date the Equity Contribution shall
be due and payable under this Agreement until the date the Equity Contributor
shall have paid the Equity Contribution in full, interest shall accrue on the
unpaid amount thereof at a rate per annum equal to the rate then applicable to
ABR Loans plus 2% and shall be payable by the Equity Contributor to the
Borrower upon demand by the Administrative Agent.

SECTION
3.  SPECIFIC PROVISIONS

3.1           Subrogation.  The Borrower will not exercise any rights
which it may have acquired by way of subrogation under this Agreement, by any
payment made hereunder or otherwise, or accept any payment on account of any
such subrogation rights, unless and until all Obligations shall have been paid
in full.

3.2           Reinstatement.  This Agreement and the obligations of the
Equity Contributor hereunder shall automatically be reinstated if and to the
extent that for any reason any payment made pursuant to this Agreement is
rescinded or must otherwise be restored to the Equity Contributor by any
beneficiary of this Agreement, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise with respect to the Borrower or any
other Person or as a result of any settlement or compromise with the Borrower
or any other Person (including the Equity Contributor) in respect of such
payment, and the Equity Contributor shall indemnify the Administrative Agent
and each other Secured Party on demand for all costs and expenses (including,
without limitation, fees of counsel) incurred by the Administrative Agent or
any other Secured Party in connection with such rescission or restoration.

3.3           Specific
Performance.  The Equity Contributor
hereby irrevocably waives, to the extent it may do so under applicable law, any
defense based on the adequacy of a remedy at law that may be asserted as a bar
to the remedy of specific performance in any action brought against the Equity
Contributor or any of them for specific performance of this Agreement by the
Administrative Agent, the Borrower or any successor or assign thereof or for
their benefit by a receiver, custodian or trustee appointed for the Borrower or
in respect of all or a substantial part of their respective assets, under the
bankruptcy or insolvency laws of any jurisdiction to which the Borrower or its
assets are subject.

3.4           Bankruptcy Code
Waiver.  The Equity Contributor
hereby irrevocably waives, to the extent it may do so under applicable law, any
protection it may be entitled to under Sections 365(c)(1) and 365(c)(2) of
Title 11 of the U.S. Code (11 U.S.C. § 101 et seq.) (the “Bankruptcy Code”),
or any successor provision of law of similar import, in the event of any
voluntary or involuntary bankruptcy, insolvency, reorganization, liquidation or
arrangement, proceeding or case with respect to the Borrower (a “Bankruptcy”).  Specifically, in the event that the trustee
in bankruptcy or the debtor-in-possession takes any action (including, without
limitation, the institution of any action, suit or other proceeding in a Bankruptcy
for the purpose of enforcing the obligations of the Borrower under this
Agreement), the Equity Contributor shall not assert any defense, claim or
counterclaim denying liability hereunder on the basis that this Agreement is an
executory contract that cannot be assumed, assigned or enforced or on any other
theory directly or indirectly based on Section 365(c)(1) or 365(c)(2) of the
Bankruptcy Code or any successor provision of law of similar import.  If a Bankruptcy shall occur, the Equity
Contributor agrees, after the occurrence of the Bankruptcy, to reconfirm in
writing, to the extent permitted by applicable law, its pre-petition waiver of
any protection it may be entitled to under Sections 365(c)(1) and 365(c)(2) of
the Bankruptcy Code and, to give effect to such waiver, the Equity Contributor
consents to the

 

assumption and enforcement of each provision of this
Agreement by the debtor-in-possession or the Borrower’s trustee in bankruptcy,
as the case may be.

3.5           No Commencement
of Bankruptcy Proceedings.  The
Equity Contributor shall not commence or join with any other Person (other than
the Secured Parties) in commencing any proceeding against the Borrower under
any bankruptcy, reorganization, liquidation or insolvency law or statute now or
hereafter in effect in any jurisdiction.

3.6           Actions by the
Administrative Agent.  The Equity
Contributor agrees that the Administrative Agent (acting for the benefit of the
Secured Parties) and any assignee thereof shall be entitled to enforce this
Agreement in its own name and to exercise any and all rights of the Borrower
under this Agreement in accordance with the terms hereof (either in its own
name or in the name of the Borrower, as the Administrative Agent may elect),
and the Equity Contributor and the Borrower agree to comply and cooperate in
all respects with such exercise.  Without
limiting the generality of the foregoing, the Administrative Agent and any
assignee thereof shall have the full right and power to enforce directly
against the Equity Contributor all obligations of the Equity Contributor under
this Agreement, and otherwise to exercise all remedies available to the
Borrower hereunder and to make all demands and give all notices and make all
requests (either in its own name or in the name of the Borrower, as the
Administrative Agent may elect) required or permitted to be made or given by
the Borrower under this Agreement, including without limitation the right to
make demand for payment of the Equity Contribution pursuant to Section 2 hereof
and to directly apply such payment to prepay the Loans, and the Equity
Contributor acknowledges and agrees that any such action taken by the
Administrative Agent shall be deemed effective for all purposes of this
Agreement to the same extent as if such action had been taken directly by the
Borrower.  If the Equity Contributor
shall receive inconsistent directions from the Borrower and the Administrative
Agent, the directions of the Administrative Agent shall be deemed the effective
directions, and the Equity Contributor shall accordingly comply with such
directions of the Administrative Agent.

3.7           Set-Off.  In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the failure of the Equity Contributor to perform any of its
obligations hereunder, each Secured Party is hereby authorized at any time or
from time to time, without presentment, demand, protest or other notice of any
kind to or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Secured
Party (including, without limitation, by branches and agencies of such Secured
Party wherever located) to or for the credit or the account of the Equity
Contributor, against and on account of the obligations of the Equity
Contributor under this Agreement, irrespective of whether or not such Secured
Party shall have made any demand hereunder and although said obligations, or
any of them, shall be contingent or unmatured.

SECTION
4.  REPRESENTATIONS AND WARRANTIES; COVENANTS

4.1           Representations
and Warranties.  The Equity
Contributor represents and warrants that:

(a)           The Equity
Contributor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas. 
The Equity Contributor has all corporate or other necessary power and
authority, and legal right, to enter into this Agreement and to perform its obligations
hereunder and consummate the transactions contemplated hereby, and has by
proper action duly authorized the execution and delivery of this
Agreement.  Neither the execution and
delivery by the Equity Contributor of this Agreement nor the consummation of
the transactions contemplated herein, nor performance by the Equity Contributor
of and compliance with the terms and provisions hereof will (i) violate or
conflict with, or cause or result in a default under, any provision of any
organizational documents or by-laws of the Equity Contributor, (ii) violate any
material law, regulation, order, writ,

 

judgment,
injunction, decree or permit applicable to it, (iii) violate or conflict with
contractual provisions of, or cause an event of default under, any indenture,
loan agreement, mortgage, deed of trust, contract or other agreement or
instrument to which it is a party or by which it may be bound (other than the
Senior Credit Agreement, which includes conditions to the funding of the Equity
Contribution as specified in the First Amendment thereto), or (iv) result in or
require the creation of any Lien upon or with respect to the Equity Contributor’s
properties. No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority or
other Person is required in connection with the execution, delivery or
performance by the Equity Contributor of this Agreement, except to the extent
obtained and in full force and effect.. 
This Agreement has been duly executed and delivered by the Equity
Contributor and constitutes the legal, valid and binding obligation of the
Equity Contributor, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in proceedings
in equity or at law.

(b)           The Equity
Contributor is not aware of any event or condition that could reasonably be
expected to have an adverse effect on the ability of the Equity Contributor to
perform its obligations under this Agreement (other than the Senior Credit
Agreement, which includes conditions to the funding of the Equity Contribution
as specified in the First Amendment thereto).

(c)           No litigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best of its knowledge, threatened against or affecting the Equity
Contributor or against or affecting any of its properties, rights, revenues or
assets or the transactions contemplated by this Agreement.

(d)           The Equity
Contributor is not an “investment company” or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940, as amended.

4.2           Covenants.  The Equity Contributor hereby covenants and
agrees that, so long as this Agreement is in effect:

(a)           The Equity
Contributor will not take any action that could reasonably be expected to
impair the obligations of the Equity Contributor hereunder, including, without
limitation, by entering into any agreement, or any amendment or other
modification to an existing agreement, if, after giving effect thereto, the
Equity Contributor would not be able to make the representations and warranties
set forth in Section 4.1 hereof.

(b)           The Equity
Contributor will preserve and maintain its existence as a validly existing
corporation under the laws of the State of Texas.

(c)           The Equity
Contributor will not enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or dispose of all or a majority of its property or business
(determined on a consolidated basis including its Subsidiaries), provided
that this paragraph (c) shall not prohibit a merger of the Equity Contributor
with any other Person if the surviving Person (if not the Equity Contributor)
assumes all liabilities of the Equity Contributor under this Agreement pursuant
to such documentation as shall be reasonably satisfactory to the Administrative
Agent.

(d)           Whether or not the
Senior Note Indenture is then in effect, the Equity Contributor will not make,
and will not permit any Restricted Subsidiary (as defined in the Senior Note
Indenture as in effect on the date hereof) to make, any Restricted Payment (as
defined in the Senior Note Indenture as in effect on the date hereof) that
would constitute utilization of any of the RP Baskets, other than (i)

 

payments in respect of the Equity Contribution and
(ii) other Restricted Payments not to exceed $5,000,000 in the aggregate during
the term of this Agreement.

(e)           The Equity
Contributor will (i) redeem or defease all of the Senior Notes on or prior to
the Equity Contribution Date (x) if the Senior Note Indenture would not permit
the funding of the full amount of the Equity Contribution on such date or (y)
in the event that the Option is selected, if the Senior Note Indenture would
not permit the exercise of the Option and (ii) use its best efforts to obtain
any necessary consents under the Senior Credit Agreement on or prior to the
Equity Contribution Date in the event that the conditions to the funding of the
full amount of the Equity Contribution on such date, as specified in the First
Amendment to the Senior Credit Agreement, cannot be satisfied.  In the event that the Option is selected, the
Equity Contributor will not, and will not permit any of its Subsidiaries to,
incur Indebtedness to redeem or defease the Senior Notes pursuant to the preceding
sentence unless such Indebtedness either (i) is incurred pursuant to a
borrowing base revolving credit facility or (ii) has a weighted average life to
maturity longer than the maturity of the Loans and is either unsecured or, if
secured, is secured on a pari passu basis with the Loans.

SECTION
5.  MISCELLANEOUS

5.1           Termination.  This Agreement shall terminate upon the
earliest date on which (i) funds then sufficient to satisfy the obligations
hereunder shall have been contributed to the Borrower pursuant to Section 2.1
(or, if the Option is selected, when the requirements thereof have been
complied with) or (ii) the Loans have been paid in full; provided that
the agreements contained in Sections 3.2 and 5.8 hereof shall survive any such
termination.

5.2           No Waiver; Course
of Dealing; Separate Causes of Action. 
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any other Secured Party, any right, remedy, power or
privilege provided herein or by statute or at law or in equity shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right,
remedy, power or privilege preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.  No course of dealing between the Equity
Contributor, on the one hand, and the Borrower or the Administrative Agent or
any other Secured Party, on the other hand, shall operate as a waiver of any
right, power or privilege hereunder of the Administrative Agent or any other
Secured Party.  Each and every default by
the Equity Contributor in payment hereunder shall give rise to a separate cause
of action hereunder, and separate suits may be brought hereunder as each cause
of action arises.

5.3           Remedies
Cumulative.  Each and every right and
remedy of the Administrative Agent hereunder shall be cumulative and shall be
in addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity or by statute.

5.4           Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.

5.5           Succession.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, provided that neither the Equity Contributor nor the Borrower may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Administrative Agent.

5.6           Amendments, Etc.
 This Agreement may not be amended,
modified or supplemented except in a writing signed by each of the parties
hereto.

 

5.7           GOVERNING LAW,
ETC.  THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

5.8           Expenses, Etc.  The Equity Contributor agrees to pay or
reimburse the Administrative Agent and each other Secured Party for all its
costs and expenses incurred in enforcing or preserving any rights under this
Agreement, including, without limitation, the fees and disbursements of counsel
to the Administrative Agent. The Equity Contributor agrees, to the extent not
reimbursed by the Borrower within five Business Days after demand therefor
pursuant to Section 11.03 of the Credit Agreement, to (i) pay, and to save the
Administrative Agent and the other Secured Parties harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
taxes which may be payable or determined to be payable with respect to any of
the transactions contemplated by this Agreement and (ii) pay, and to save the
Administrative Agent and the other Secured Parties harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement.

5.9           Notices.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand or, in the case of notice
given by mail, private courier, overnight delivery service or telecopy, when
received, addressed as follows in the case of the Equity Contributor and in
accordance with the Credit Agreement in the case of the Borrower and the
Administrative Agent.

Equity
Contributor:                                         EXCO Resources, Inc.

12377 Merit Drive, Suite 1700

Dallas, Texas 75251

Attention:  Douglas H. Miller, Chief
Executive Officer

Telecopy No. (214) 368-2087

Any party hereto may change
its address for notices, requests and demands by notice to the other parties in
the manner provided in this Section 5.9.

5.10         Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

5.11         Submission to
Jurisdiction; Waivers.  Each of the
Borrower, the Administrative Agent and the Equity Contributor hereby
irrevocably and unconditionally:

(a)   submits
for itself and its property in any legal action or proceeding relating to this
Agreement, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;

(b)   consents
that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim the same;

(c)   agrees
that nothing herein shall affect the right to effect service of process in any
manner permitted by law or shall limit the right to sue in any other
jurisdiction; and

 

(d)   waives,
to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.

5.12         WAIVER OF JURY
TRIAL.  THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE EQUITY CONTRIBUTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

IN
WITNESS WHEREOF, the parties hereto, by their officers duly authorized,
intending to be legally bound, have caused this Agreement to be duly executed
and delivered as of the date first above written.

	
  

  	
  EXCO RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William L. Boeing

  
	
   

  	
   

  	
  Name:

  	
  William L. Boeing

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXCO PARTNERS OPERATING PARTNERSHIP, LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William L. Boeing

  
	
   

  	
   

  	
  Name:

  	
  William L. Boeing

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A., as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

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