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Exhibit 10.4  

 
 

ADMINISTRATIVE SERVICES AGREEMENT  
    
    AMONG  
    
    EXCO PARTNERS GP LP, LLC,  
    
    EXCO GP PARTNERS, LP,  
    
    EXCO PARTNERS,
 LP,  
    
    EXCO PARTNERS OLP GP, LLC,  
    
    EXCO PARTNERS OPERATING, LP,  
    
    AND  
    
    EXCO RESOURCES, INC.  

  

	Table of Contents
	
ARTICLE I
	

DEFINITIONS
	

Section 1.1	

Definitions.	
 	

1
	Section 1.2	Construction.	 	4
	

ARTICLE II
	

RETENTION OF EXCO; SCOPE OF SERVICES
	

Section 2.1	

Retention of EXCO	
 	

4
	Section 2.2	Scope of Services.	 	4
	Section 2.3	Modification of Services.	 	4
	Section 2.4	Performance of Services by Affiliates and Third Parties.	 	4
	Section 2.5	Intellectual Property.	 	5
	Section 2.6	License Agreement	 	5
	Section 2.7	Confidential Information.	 	6
	Section 2.8	Appointment of Independent Registered Public Accounting Firm and Independent Petroleum Engineer.	 	6
	Section 2.9	No Effect on Partnership Agreement.	 	6
	

ARTICLE III
	

BOOKS, RECORDS AND REPORTING
	

Section 3.1	

Books and Records.	
 	

6
	Section 3.2	Audits.	 	7
	

ARTICLE IV
	

ADMINISTRATIVE SERVICE FEE
	

Section 4.1	

Administrative Service Fee and Payment Amount.	
 	

7
	Section 4.2	Set Off.	 	8
	Section 4.3	EXCO Employees.	 	8
	Section 4.4	Approval of Payment Amount.	 	9
	

ARTICLE V
	

FORCE MAJEURE
	

Section 5.1	

Force Majeure.	
 	

9
	

ARTICLE VI
	

ASSIGNMENT
	

Section 6.1	

Assignments.	
 	

9
	Section 6.2	Other Requirements.	 	9
	

ARTICLE VII
	

TERMINATION
	

Section 7.1	

Termination by the Partnership on behalf of the Partnership Group.	
 	

10
	Section 7.2	Termination by EXCO.	 	10
	Section 7.3	Effect of Termination.	 	10
	 	 	 	 

i

 

	

ARTICLE VIII
	

GENERAL PROVISIONS
	

Section 8.1	

Liabilities and Indemnification.	
 	

11
	Section 8.2	Relationship of Parties.	 	11
	Section 8.3	No Warranty.	 	11
	Section 8.4	Notices.	 	12
	Section 8.5	Further Action.	 	12
	Section 8.6	Binding Effect.	 	12
	Section 8.7	Integration.	 	12
	Section 8.8	Creditors.	 	12
	Section 8.9	Waiver.	 	12
	Section 8.10	Counterparts.	 	13
	Section 8.11	Applicable Law.	 	13
	Section 8.12	Invalidity of Provisions.	 	13
	Section 8.13	Amendment or Modification.	 	13
	Section 8.14	Directly or Indirectly.	 	13
	Section 8.15	Rights of Limited Partners.	 	13

ii

 
 

ADMINISTRATIVE SERVICES AGREEMENT    
    

        THIS ADMINISTRATIVE SERVICES AGREEMENT is entered into on, and effective as of [            ], 2008 (the
"Effective Date"), among EXCO Partners GP LP, LLC, a Delaware limited liability company
("GP LLC"), EXCO GP Partners, LP, a Delaware limited partnership (the "General Partner"), EXCO Partners,
LP, a Delaware limited partnership (the "Partnership"), EXCO Partners OLP GP, LLC, a Delaware limited liability company ("OLP GP
LLC"), EXCO Partners Operating, LP, a Delaware limited partnership (the "Operating Partnership"), and EXCO
Resources, Inc., a Texas corporation ("EXCO," and collectively with the General Partner, the Partnership and the Operating Partnership, the
"Parties" and each, a "Party"). 

 
 

RECITALS    
    

        A. The Partnership is the owner, directly or indirectly, of the Business (as hereinafter defined); 

        B.
The Partnership Group (as hereinafter defined) requires certain services to operate and manage the Business and to fulfill other general and administrative functions relating to the
Business; and 

        C.
The Partnership Group desires to engage EXCO to provide such services, and EXCO is willing to undertake such engagement, subject to the terms and conditions of this Agreement; 

        NOW,
THEREFORE, the Parties agree as follows: 

 
 

ARTICLE I
  
    DEFINITIONS    
    

        Section 1.1 Definitions.

        (a)   The
following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement. 

        "Administrative Service Fee" is defined in Section 4.1. 

        "Affiliate" means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls,
is controlled by or is under common control with, the Person in question. As used herein, the term "control" means the possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise; provided,  however, that no member of the
Partnership Group shall be deemed to be an Affiliate of EXCO for purposes of this Agreement. This definition shall not be
controlling for tax purposes. 

        "Agreement" means this Administrative Services Agreement, as it may be amended, supplemented or restated from time to time. 

        "Business" means the business of the Partnership Group, as conducted from time to time, and which includes, but is not limited to, the
business of the Partnership Group described in the Prospectus. 

        "Bankrupt" with respect to any Person means such Person shall generally be unable to pay its debts as such debts become due, or shall so
admit in writing or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against such Person seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property and, in the case
of any such proceeding instituted against it (but not instituted by it), shall remain undismissed or unstayed for a period of 30 days; or such Person shall take any action to authorize any of
the actions set forth above. 

 

        "Confidential Information" means non-public information about the disclosing Party's or any of its Affiliates' business or
activities that is proprietary and confidential, which shall include, without limitation, all business, financial, technical, seismic and other information, including software (source and object code)
and programming code, of a Party or its Affiliates marked or designated "confidential" or "proprietary" or by its nature or the circumstances surrounding its disclosure it should reasonably be
regarded as confidential. Confidential Information includes not only written or other tangible information, but also information transferred orally, visually, electronically or by any other means.
Confidential Information does not include information that (i) is in or enters the public domain without breach of this Agreement, or (ii) the receiving Party lawfully receives from a
third party without restriction on disclosure and to the receiving Party's knowledge without breach of a nondisclosure obligation. 

        "Conflicts Committee" is defined in the Partnership Agreement. 

        "Contribution Agreement" means that certain Contribution, Conveyance, Assumption and Indemnification Agreement dated            ,
2008, by and among EXCO, the Partnership, the GP LLC, the General Partner, EXCO Partners MLP LP, LLC, OLP GP LLC, the Operating Partnership, North Coast, and North Coast Energy Eastern, LLC. 

        "Damages" is defined in Section 8.1. 

        "Default Rate" means an interest rate (which shall in no event be higher than the rate permitted by applicable law) equal to 250 basis
points over LIBOR. 

        "Effective Date" is defined in the introductory paragraph. 

        "EXCO" is defined in the introductory paragraph. 

        "General Partner" is defined in the introductory paragraph. 

        "Governmental Authority" means any court or tribunal in any jurisdiction or any federal, state, tribal, municipal or local government or
other governmental body, agency, authority, department, commission, board, bureau, instrumentality, arbitrator or arbitral body or any quasi-governmental or private body lawfully exercising any
regulatory or taxing authority. 

        "GP LLC" is defined in the introductory paragraph. 

        "Intellectual Property" is defined in Section 2.5. 

        "Laws" means any applicable statute, common law, rule, regulation, judgment, order, ordinance, writ, injunction or decree issued or
promulgated by any Governmental Authority. 

        "Licensees" means, for purposes of Section 2.6 hereof, the Partnership Group. 

        "Licensor" means, for purposes of Seciton 2.6 hereof, EXCO. 

        "Limited Partners" is defined in the Partnership Agreement. 

        "Marks" means all trademarks, tradenames, logos and/or service marks identified on Annex
Aattached hereto. 

        "Master Operating Agreement" means the master operating agreement entered into on an even date herewith by EXCO, the Partnership and the
other parties thereto with respect to operation of the Partnership Properties. 

        "North Coast" means North Coast Energy, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Partnership. 

        "OLP GP LLC" is defined in the introductory paragraph. 

2

 

        "Operating Partnership" is defined in the introductory paragraph. 

        "Parties" is defined in the introductory paragraph. 

        "Partnership" is defined in the introductory paragraph. 

        "Partnership Agreement" means the Amended and Restated Agreement of Limited Partnership of the Partnership dated as of date hereof, as the
same may be amended or restated from time to time. 

        "Partnership Group" means GP LLC, the General Partner, the Partnership, OLP GP LLC, the Operating Partnership and all of their respective
Subsidiaries. 

        "Partnership Properties" means all properties contributed to the Partnership by EXCO pursuant to the Contribution Agreement. 

        "Payment Amount" is defined in Section 4.1. 

        "Payment Default" shall mean the failure of the Partnership to pay the Payment Amount described in Section 4.1 on or before the
45th day following the end of each month. 

        "Person" means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or other entity. 

        "Services" is defined in Section 2.2. 

        "Service Standard" shall mean, with respect to the performance of the Services, the good faith undertaking, on a commercially reasonable
basis, to perform the Services in all material respects in compliance with applicable Laws and prudent industry practices. 

        "Subsidiary" means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled
(without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination,
by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at
the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of
the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof, or
(c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of
determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person
(without regard to the occurrence of any contingency). 

        (b)   Other
terms defined herein have the meanings so given them. 

3

 

        Section 1.2
Construction.

        Unless
the context requires otherwise: (a) 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; (b) references to Articles and Sections refer to Articles and Sections of this Agreement; (c) references to Exhibits refer to
the Exhibits attached to this Agreement, each of which is made a part hereof for all purposes; (d) the terms "include," "includes," "including" and words of like import shall be deemed to be
followed by the words "without limitation"; (e) the terms "hereof," "herein" and "hereunder" refer to this Agreement as a whole and not to any particular provision of this Agreement; and
(f) references to money refer to legal currency of the United States of America. The table of contents and headings contained in this Agreement are for reference purposes only, and shall not
affect in any way the meaning or interpretation of this Agreement. 

 
 

ARTICLE II
  
    RETENTION OF EXCO; SCOPE OF SERVICES    
    

        Section 2.1
Retention of EXCO

        The
Partnership hereby engages EXCO to perform the Services for the benefit of the Partnership Group on behalf of, and as directed by, the GP LLC, and to provide all personnel and any
facilities, goods and equipment not otherwise provided by the Partnership Group that are necessary to perform the Services in accordance with the Service Standard. EXCO hereby accepts such engagement
and agrees to perform the Services requested by the General Partner and to provide any personnel, facilities, goods and equipment not otherwise provided by the Partnership Group that are necessary to
perform the Services in accordance with the Service Standard.    EXCO hereby agrees and warrants that all Services will be performed in accordance with the Service Standard. 

        Section 2.2  Scope of Services.

        The
"Services" shall consist of such services that the General Partner determines from time to time are reasonable and necessary to manage
and operate the Business. The initial Services shall include those services described on Schedule I attached hereto. 

        Section 2.3
Modification of Services.

        The
GP LLC may increase or decrease or otherwise modify the scope of the Services from time to time upon 60 days prior written notice to EXCO, which notice shall include an
amended Schedule I reflecting such modification. In connection with any such modification, the Administrative Services Fee may be adjusted in
accordance with Section 4.1(b). Upon the effectiveness of any such modification, such amended Schedule I shall replace the existing  Schedule I and shall be deemed a part of this Agreement for all purposes. 

        Section 2.4  Performance of Services by Affiliates and Third Parties.

        The
Parties hereby agree that in discharging its obligations hereunder, subject to the restrictions in the Master Operating Agreement or any other operating agreements applicable to the
Partnership Properties, EXCO may engage any of its Affiliates or any qualified third party to perform the Services (or any part of the Services) on its behalf and that the performance of the Services
(or any part of the Services) by any such Affiliate or third party shall be treated as if EXCO performed such Services itself. Notwithstanding the foregoing, nothing contained herein shall relieve
EXCO of its obligations hereunder. 

4

 

        Section 2.5
Intellectual Property.

        (a)   Any
(i) inventions, whether patentable or not, developed or invented, or (ii) copyrightable material (and the intangible rights of copyright therein)
(collectively, "Intellectual Property") developed, by EXCO, its Affiliates or its or their employees in connection with the performance of the Services
shall be the property of EXCO; provided, however, that the Partnership Group shall be granted an irrevocable, royalty-free,
non-exclusive and non-transferable right and license to use such Intellectual Property; and provided further, however, that the
Partnership Group shall only be granted such a right and license to the extent such grant does not conflict with, or result in a breach, default, or violation of a right or license to use such
inventions or material granted to EXCO by any Person other than an Affiliate of EXCO. Notwithstanding the foregoing, EXCO will use all commercially reasonable efforts to grant such right and license
to the Partnership Group. 

        (b)   Each
member of the Partnership Group hereby grants to EXCO and its Affiliates an irrevocable, royalty-free, non-exclusive and
non-transferable right and license to use, during the term of this Agreement, any Intellectual Property provided by the Partnership Group to EXCO or its Affiliates, but only to the extent
such use is necessary for the performance of the Services; provided, however, that EXCO and its Affiliates shall only be granted such a right and
license to the extent such grant does not conflict with, or result in a breach, default, or violation of a right or license to use such Intellectual Property provided to the Partnership Group by any
Person other than an Affiliate of EXCO. EXCO agrees that it and its Affiliates will utilize such Intellectual Property solely in connection with the performance of the Services. 

        Section 2.6  License Agreement

        (a)   Grant of License. Subject to the terms and conditions herein, Licensor hereby grants to Licensees the right and license
to use the Marks solely in connection with the Licensees' businesses and the services performed therewith within the United States during the term of this Agreement. 

        (b)   Restrictions on Marks. In order to ensure the quality of uses under the Marks, and to protect the goodwill of the Marks,
Licensees agree as follows: 

        (i)    Licensees
will only use the Marks in formats approved by Licensor and only in strict association with the Licensees' businesses and the services performed therewith; and 

        (ii)   Licensees
shall not use any other trademarks, service marks, trade names or logos in connection with the Marks or use the Marks or any trademark or service mark
confusingly similar to the Marks after the termination of this Agreement. Licensor will not use the Marks in such a manner so as to impair the validity or enforceability or in any way disparage or
dilute the Marks. 

        (c)   Ownership. Licensor shall own all right, title and interest, including all goodwill relating thereto, in and to the
Marks, and all trademark rights embodied therein shall at all times be solely vested in Licensor. Licensees have no right, title, interest or claim of ownership in the Marks, except for the licenses
granted in this Agreement. All use of the Marks shall inure to the benefit of Licensor. Licensees agree that they will not attack the title of Licensor in and to the Marks. 

        (d)   Estoppel. Nothing in this Agreement shall be construed as conferring by implication, estoppel, or otherwise upon
Licensees (a) any license or other right under the intellectual property rights of Licensor other than the license granted herein to the Marks as set forth expressly herein or (b) any
license rights other than those expressly granted herein. 

        (e)   Warranties; Disclaimers. 

        (i)    The
Licensor represents and warrants that (i) it owns and has the right to license the Marks licensed under this Agreement and (ii) the Marks do not
infringe upon the rights of any third parties. 

5

 

        (ii)   EXCEPT
FOR THE WARRANTIES AND REPRESENTATIONS DESCRIBED IN SECTION 2.6(E), LICENSOR DISCLAIMS ANY AND ALL WARRANTIES, CONDITIONS OR REPRESENTATIONS (EXPRESS OR IMPLIED,
ORAL OR WRITTEN) WITH RESPECT TO THE SUBJECT MATTER HEREOF, OR ANY PART THEREOF, INCLUDING ANY AND ALL IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS OR SUITABILITY FOR
ANY PURPOSE (WHETHER ANY LICENSEE KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE) WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM OR USAGE IN THE
TRADE OR BY COURSE OF DEALING. 

        Section 2.7
Confidential Information.

        (a)   Each
Party hereby agrees that (i) it will not disclose to any third party or use any Confidential Information disclosed to it by the other except as expressly
permitted in this Agreement, and (ii) it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other Party in its possession or control, which
will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar type and importance. 

        (b)   Notwithstanding
clause (a) above, each Party may disclose Confidential Information (i) to the extent required by any Governmental Authority or otherwise as
required by applicable Laws, including, without limitation, disclosure obligations imposed under the federal securities laws, provided that such Party has given the other Party prior notice of such
requirement when legally permissible to permit the other Party to take such legal action to prevent the disclosure as it deems reasonable, appropriate or necessary, or (ii) to its consultants,
legal counsel, Affiliates, accountants, banks and other financing sources and their advisors. 

        Section 2.8  Appointment of Independent Registered Public Accounting Firm and Independent Petroleum Engineer.

        Notwithstanding
anything to the contrary in this Agreement, the Parties hereby recognize and agree that the General Partner shall have the exclusive authority to appoint an independent
registered public accounting firm to audit the financial statements of the Partnership and an independent petroleum engineer to provide reports to the Partnership relating to estimates of proved
reserves for Securities and Exchange Commission and other reporting purposes. 

        Section 2.9  No Effect on Partnership Agreement.

        Notwithstanding
anything to the contrary in this Agreement, no provision of this Agreement, the Master Operating Agreement or the Contribution Agreement shall relieve the General Partner
of any obligation or duty to the Partnership, or otherwise modify or amend such obligation or duty, provided for in the Partnership Agreement, the Master Operating Agreement or the Contribution
Agreement. 

 
 

ARTICLE III
  
    BOOKS, RECORDS AND REPORTING    
    

        Section 3.1 Books and Records.

        EXCO
shall maintain accurate books and records regarding the performance of the Services and its calculation of the Payment Amount, and shall maintain such books and records for the
period required by applicable Laws or accounting practices. 

6

 

        Section 3.2
Audits.

        The
Partnership shall have the right, upon reasonable notice, and at all reasonable times during usual business hours, to audit, examine and make copies of the books and records referred
to in Section 3.1. Such right may be exercised through any agent or employee of the Partnership Group, including, but not limited to, any member of the Audit Committee or the Conflicts
Committee of the board of directors of the GP LLC, designated in writing by it or by an independent public accountant, engineer, attorney or other agent so designated. The Partnership shall bear all
costs and expenses incurred in any inspection, examination or audit. EXCO shall review and respond in a timely manner to any claims or inquiries made by the Partnership regarding matters revealed by
any such inspection, examination or audit. 

 
 

ARTICLE IV
  
    ADMINISTRATIVE SERVICE FEE    
    

        Section 4.1 Administrative Service Fee and Payment Amount.

        (a)   As
remuneration for the provision by EXCO to the Partnership Group of the Services, the Partnership shall on a monthly basis (i) pay EXCO an administrative
services fee of $1,600,000 plus any applicable sales or use taxes, which amount represents EXCO's good-faith estimate of the actual time to be spent by its personnel performing the
Services, plus related expenses (the "Administrative Services Fee") and (ii) reimburse EXCO for all third-party expenses that EXCO incurs on
behalf of the Partnership Group, excluding any expenses that are directly chargeable to wells under the applicable joint operating agreements and the Master Operating Agreement (the
"Expense Reimbursements", together with the Administrative Services Fee, the "Payment Amount"). For the
avoidance of doubt, EXCO will pay all expenses that are directly chargeable to wells under their respective joint operating agreements and the Master Operating Agreement and the Partnership will
reimburse EXCO for such expenses pursuant to the provisions of the Master Operating Agreement. 

        (b)   The
Administrative Services Fee paid EXCO pursuant to Section 4.1 of this Agreement shall be revised in the following circumstances: 

        (i)    If
the Partnership or any other member of the Partnership Group acquires additional assets or disposes of existing assets (including any acquisition or disposition of
the equity of any entity), then EXCO or the Partnership may propose a revised Administrative Services Fee that covers the provision of Services following such acquisition or disposition. With respect
to any revised Administrative Services Fee proposed by EXCO, if the General Partner, on behalf of the Partnership Group and with the concurrence of the Conflicts Committee agrees to such revised
Administrative Services Fee, then the new estimate of the Administrative Services Fee shall become part of this Agreement and replace the existing Administrative Services Fee. With respect to any
revised Administrative Services Fee proposed by the Partnership, if EXCO agrees to such revised Administrative Services Fee, then the new estimate of the Administrative Services Fee shall become part
of this Agreement and replace the existing Administrative Services Fee. The Administrative Services Fee will remain in effect until such time as a new Administrative Services Fee is approved in
accordance with the provisions of this Section 4.1(b) and EXCO shall continue to provide Services pursuant to the terms set forth herein. 

7

 

        (ii)   EXCO
shall review the Administrative Services Fee on an annual basis and propose a new Administrative Services Fee to the extent necessary to reflect any changes in the
scope of Services, changes in personnel who are performing the Services, changes in the cost of such Services, including changes in compensation of such personnel, and changes in EXCO's good faith
estimate of the time such personnel will spend performing Services on behalf of the Partnership Group. Once approved by the General Partner and with the concurrence of the Conflicts Committee, then
the new estimate of the Administrative Services Fees shall become part of this Agreement and replace the existing Administrative Services Fee until such time as a new Administrative Services Fee is
approved in accordance with the provisions of this Section 4.1(b) and EXCO shall continue to provide Services pursuant to the terms set forth herein. 

        (c)   If
EXCO and the Conflicts Committee are unable to agree on the amount of any revised Administrative Services Fee proposed pursuant to Section 4.1(b), EXCO and the
Partnership will engage a mutually agreed upon independent registered public accounting firm to determine the Administrative Services Fee based on its estimate of the fair value of the Services
provided to the Partnership by EXCO. Such independent registered public accounting firm will determine the revised Administrative Services Fee within 30 days of its engagement and furnish the
Partnership and EXCO its determination, which shall be binding on all Parties. The fees of the independent registered public accounting firm will be split equally between EXCO and the Partnership. 

        Section 4.2
Set Off.

        In
the event that EXCO owes the Partnership a sum certain in an uncontested amount under any other agreement, then any such amounts shall be aggregated and the Partnership and EXCO shall
discharge their respective obligations by netting those amounts against any amounts owed by the Partnership to EXCO under this Agreement. If the Partnership or EXCO owes the other Party a greater
aggregate amount, then that Party shall pay to the other Party the difference between the amounts owed. 

        Section 4.3
EXCO Employees.

        The
obligations of the Partnership under Sections 4.1, to the extent they relate to Services provided by employees of EXCO or its Affiliates, shall be limited to the Administrative
Services Fee, and the Partnership shall not be obligated to pay directly to EXCO's or its Affiliates' employees any compensation, salaries, wages, bonuses, benefits, social security taxes, workers'
compensation insurance, retirement and insurance benefits, training or other expenses; provided,  however, that the Partnership may, at its option,
compensate such employees under any long-term incentive plan of the Partnership for the
provision of Services hereunder; and provided further, however, that if EXCO fails to pay any employee
providing Services hereunder within 30 days of the date such employee's payment is due: 

        (a)   The
Partnership may (i) pay such employee directly or (ii) employ such employee directly; and 

        (b)   EXCO
shall reimburse the Partnership for the portion of the Administrative Services Fee representing employee compensation that the Partnership paid to EXCO with respect
to such employee but that EXCO did not pay to such employee. 

8

 

        Section 4.4
Additional Review and Approvals.

        EXCO
acknowledges that all Expense Reimbursements assessed by EXCO and included in the Payment Amount must be approved by the persons authorized to approve such charges pursuant to the
Partnership's governance processes. Additionally, EXCO acknowledges that the Conflicts Committee may direct the General Partner to modify the scope of Services pursuant to Section 2.3 or to
revise the Administrative Services Fee pursuant to Section 4.1(b). In addition to the information EXCO is obligated to maintain and provide pursuant to Article III, EXCO shall provide
such other information as reasonably necessary to determine the accuracy of any estimate relating to the Payment Amount hereunder. 

 
 

ARTICLE V
  
    FORCE MAJEURE    
    

        Section 5.1 Force Majeure.

        If
any party is rendered unable, wholly or in part, by force majeure to carry out its obligations under this Agreement, other than the obligation to indemnify or make money payments or
furnish security, that party shall give to all other parties prompt written notice of the force majeure with reasonably full particulars concerning it; thereupon, the obligations of the party giving
notice, so far as they are affected by the force majeure, shall be suspended during, but no longer than, the continuance of the force majeure. The term "force majeure", as here employed, shall mean an
act of God, strike, lockout, or other industrial disturbance, act of the public enemy, war, blockade, public riot, lightning, fire, storm, flood or other act of nature, explosion, governmental action,
governmental delay, restraint or inaction, unavailability of equipment, and any other cause, whether of the kind specifically enumerated above or otherwise, which is not reasonably within the control
of the party claiming suspension. The affected party shall use all reasonable diligence to remove the force majeure situation as quickly as practicable. The requirement that any force majeure shall be
remedied with all reasonable dispatch shall not require the settlement of strikes, lockouts, or other labor difficulty by the party involved, contrary to its wishes; how all such difficulties shall be
handled shall be entirely within the discretion of the party concerned. 

 
 

ARTICLE VI
  
    ASSIGNMENT    
    

        Section 6.1 Assignments.

        (a)   Without
the prior consent of EXCO, no member of the Partnership Group may sell, assign, transfer or convey any of its rights, or delegate any of its obligations, under
this Agreement to any Person; provided that any member of the Partnership Group may assign all of its rights, title and interests under this Agreement to secure debt for borrowed money and other
obligations, including guarantees of such debt. 

        (b)   Without
the prior consent of the Partnership, EXCO may not sell, assign, transfer or convey any of its rights, or delegate any of its obligations, under this Agreement
to any Person, other than the delegation of performance of Services to an Affiliate of EXCO or a qualified third party as permitted by Section 2.4 and the sale, assignment, transfer or
conveyance of its rights and obligations hereunder to any such Affiliate. 

        Section 6.2
Other Requirements.

        EXCO
shall exercise reasonable diligence to obtain the most favorable terms or warranties available from vendors, suppliers and other third parties, and where appropriate, EXCO shall
assign such warranties to the Partnership. 

9

 

 
 

ARTICLE VII
  
    TERMINATION    
    

        Section 7.1 Termination by the Partnership on behalf of the Partnership Group.

        (a)   Upon
the occurrence of any of the following events, the GP LLC, on behalf of the Partnership Group, may terminate this Agreement by giving written notice of such
termination to EXCO: 

        (i)    EXCO
becomes Bankrupt; 

        (ii)   EXCO
dissolves and commences liquidation or winding-up; or 

        (iii)  EXCO
ceases to be an Affiliate of the Partnership. 

Any
termination under this Section 7.1(a) shall become effective immediately upon delivery of the notice first described in this Section 7.1(a), or such later time (not to exceed the
first anniversary of the delivery of such notice) as may be specified by the Partnership. 

        (b)   In
addition to its rights under Section 7.1(a), if at any time the General Partner determines that EXCO has not performed the Services in accordance with the
Service Standard, the Partnership may give written notice of termination to EXCO, which notice shall set forth in reasonable detail the Services in question and the related deficiency in such Services
as compared to the Service Standard. EXCO shall have 90 days following the date of such notice in which to reperform such Services in accordance with the Service Standard or otherwise cure such
deficiency to the reasonable satisfaction of the General Partner. If EXCO fails to reperform such Services or otherwise cure such deficiency in accordance with the immediately preceding sentence, then
termination under this Section 7.1(b) shall become effective on the 90th day after the date of such notice, or such later time (not to exceed the first anniversary of the delivery
of such notice) as may be specified in such notice. 

        Section 7.2  Termination by EXCO.

        (a)   EXCO
may terminate this Agreement by giving written notice of such termination to the Partnership in the event that EXCO ceases to be an Affiliate of the Partnership.
Any termination under this Section 7.2 shall become effective 90 days after delivery of such notice. 

        (b)   In
addition to its rights under Section 7.1(a), if at any time a Payment Default has occurred and is continuing for a period of more than 30 days, EXCO may
give written notice of termination to the Partnership, which notice shall set forth in reasonable detail the Payment Default. The Partnership shall have 15 days following the date of such
notice in which to cure such Payment Default. If the Partnership fails to cure such Payment Default in accordance with the immediately preceding sentence, then termination under this
Section 7.1(b) shall become effective on the 30th day after the date of such notice, or such later time (not to exceed the first anniversary of the delivery of such notice) as may
be specified in such notice. 

        Section 7.3
Effect of Termination.

        This
Agreement may not be terminated by any Party except as provided in Sections 7.1 or 7.2 or upon the mutual agreement of the Parties with the prior approval of the Conflicts
Committee. If this Agreement is terminated in accordance with Section 7.1 or 7.2, all rights and obligations under this Agreement shall cease except for (a) obligations that expressly
survive termination of this Agreement; (b) liabilities and obligations that have accrued prior to such termination, including the obligation to pay any amounts that have become due and payable
prior to such termination, and (c) the obligation to pay any portion of the Administrative Service Fee that has accrued prior to such termination, even if such portion has not become due and
payable at that time. 

10

 

 
 

ARTICLE VIII
  
    GENERAL PROVISIONS    
    

        Section 8.1 Liabilities and Indemnification.

        (a)   IN
NO EVENT, OTHER THAN FOR LIABILITY ARISING FROM THE BAD FAITH OR WILLFUL MISCONDUCT OF EXCO, SHALL EXCO BE LIABLE TO THE PARTNERSHIP GROUP, DIRECTLY OR INDIRECTLY,
FOR ANY CLAIMS, DEMANDS, SUITS, LOSSES, LIABILITIES, OBLIGATIONS, PAYMENTS, COSTS, EXPENSES OR DAMAGES, WHETHER DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE, OR ANY LOST REVENUES OR PROFITS
(COLLECTIVELY, "DAMAGES"), RESULTING FROM EXCO'S PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT, OR THE FURNISHING, PERFORMANCE OR USE OF
SERVICES PROVIDED HEREUNDER, WHETHER DUE TO BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE OR OTHERWISE, REGARDLESS OF WHETHER OR NOT EXCO WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN
ADVANCE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING IN ANY RESPECT, EXCO SHALL FURTHERMORE NOT BE RESPONSIBLE OR LIABLE TO THE PARTNERSHIP GROUP FOR ANY DAMAGES RESULTING OR ARISING FROM ANY
ACTUAL OR ALLEGED INFRINGEMENT OF ANY THIRD PARTY INTELLECTUAL PROPERTY (INCLUDING, WITHOUT LIMITATION, SERVICES, SOFTWARE, HARDWARE OR EQUIPMENT) USED TO PROVIDE SERVICES. 

        (b)   The
Partnership shall indemnify and hold harmless EXCO, its subsidiaries and affiliates and their employees, officers, directors and agents (each, an
"EXCO Indemnified Party") from and against any all third party claims for Damages, as incurred by any EXCO Indemnified Party, relating to or arising out
of the provision of Services by EXCO pursuant to this Agreement, except to the extent that it is finally judicially determined that such Damages resulted from the bad faith or willful misconduct of
such EXCO Indemnified Party. The Partnership shall also reimburse each EXCO Indemnified Party promptly upon request for all reasonable expenses (including reasonable attorneys' fees and expenses) as
they are incurred in connection with the investigation of, preparation for, defense of, or providing evidence in, any action, claim, suit, proceeding or investigation (each and collectively, an
"Action"), directly or indirectly, arising out of, or relating to, this Agreement or the Services, whether or not pending or threatened and whether or
not any EXCO Indemnified Party is a party to such Action. 

        Section 8.2
Relationship of Parties. 

        EXCO
shall perform the Services as an independent contractor and no relationship of partnership, joint venture, employment, franchise, agency or similar arrangement is being created
pursuant to or by virtue of this Agreement. 

        Section 8.3  No Warranty. 

        EXCEPT
AS EXPRESSLY PROVIDED IN THIS AGREEMENT, ALL SERVICES CONTEMPLATED BY THIS AGREEMENT WILL BE PROVIDED BY EXCO "AS IS," WITH NO WARRANTIES OR REPRESENTATIONS OF ANY KIND
WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THOSE RELATING TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, TITLE, PERFORMANCE OR RESULTS. 

11

 

        Section 8.4  Notices.

        All
notices or other communications required or permitted under, or otherwise in connection with, this Agreement must be in writing and must be given by depositing same in the mail,
addressed to the Person to be notified, postpaid and registered or certified with return receipt requested or by transmitting by national overnight courier or by transmitting by national overnight
courier or by delivering such notice in person or by facsimile to such Party. Notice given by mail, national overnight courier or personal delivery shall be effective upon actual receipt. Notice given
by facsimile shall be effective upon confirmation of receipt when transmitted by facsimile if transmitted during the recipient's normal business hours or at the beginning of the recipient's next
business day after receipt if not transmitted during the recipient's normal business hours. All notices to be sent to a Party pursuant to this Agreement shall be sent to or made at the address, in
each case as follows: 

if
to any member of the Partnership Group: 

c/o
EXCO GP Partners, LP

12377 Merit Drive, Suite 1700

Dallas, TX 75251

Attention: General Counsel

Fax: (214) 706-3409 

if
to EXCO: 

EXCO
Resources, Inc.

12377 Merit Dr., Suite 1700

Dallas, TX 75251 

Attention: General Counsel 

Fax: (214) 706-3409 

        Section 8.5
Further Action.

        The
Parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this
Agreement. 

        Section 8.6
Binding Effect.

        This
Agreement shall be binding upon and inure to the benefit of the Parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns. 

        Section 8.7
Integration.

        This
Agreement and the Master Operating Agreement constitute the entire Agreement among the Parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto. 

        Section 8.8
Creditors.

        Except
for permitted assignees, none of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership. 

        Section 8.9
Waiver.

        No
failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach
thereof shall constitute waiver of any such breach of any other covenant, duty, agreement or condition. 

12

 

        Section 8.10
Counterparts.

        This
Agreement may be executed in counterparts, all of which together shall constitute an agreement binding on all the Parties hereto, notwithstanding that all such Parties are not
signatories to the original or the same counterpart. Each Party shall become bound by this Agreement immediately upon affixing its signature hereto. 

        Section 8.11  Applicable Law.

        This
Agreement shall be construed in accordance with and governed by the Laws of the State of Texas, without regard to the principles of conflicts of law. 

        Section 8.12
Invalidity of Provisions.

        If
any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein
shall not be affected thereby. 

        Section 8.13
Amendment or Modification.

        This
Agreement may be amended or modified from time to time only by the written agreement of all the Parties hereto; provided, however, that, if at the time of such amendment or
modification the limited partner interests of the Partnership are listed or traded on an "exchange" as defined in Section 3(a)(1) of the Securities Exchange Act of 1934, as amended, such
amendment or modification must be approved by the Conflicts Committee unless the General Partner determines in good faith that such amendment or modification will not adversely affect the Limited
Partners in any material respect. 

        Section 8.14
Directly or Indirectly.

        Where
any provision of this Agreement refers to action to be taken by any Party, or which such Party is prohibited from taking, such provision shall be applicable whether such action is
taken directly or indirectly by such Party, including actions taken by or on behalf of any Affiliate of such Party. 

        Section 8.15  Rights of Limited Partners.

        The
provisions of this Agreement are enforceable solely by the Parties to this Agreement, and no Limited Partner shall have the right, separate and apart from the Partnership, to enforce
any provision of this Agreement or to compel any Party to this Agreement to comply with the terms of this Agreement. 

13

        IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the Effective Date. 

	

 	
 	
EXCO PARTNERS GP LP, LLC
	

 	
 	

 	
 	

By:	
 	

 Name:

Title:
	

 	
 	
EXCO GP PARTNERS, LP
	

 	
 	

By:	
 	

EXCO PARTNERS GP LP, LLC,

its general partner
	

 	
 	

By:	
 	

 Name:

Title:
	

 	
 	
EXCO PARTNERS, LP
	

 	
 	

By:	
 	

EXCO GP Partners, LP,

its general partner
	

 	
 	

By:	
 	

EXCO PARTNERS GP LP, LLC,

its general partner
	

 	
 	

 	
 	

By:	
 	

 Name:

Title:
	

 	
 	
EXCO PARTNERS OLP GP, LLC
	

 	
 	

 	
 	

By:	
 	

 Name:

Title:
	

 	
 	
EXCO PARTNERS OPERATING, LP
	

 	
 	

By:	
 	

EXCO Partners OLP GP, LLC,

its general partner
	

 	
 	

 	
 	

By:	
 	

 Name:

Title:
	

 	
 	
EXCO RESOURCES, INC.
	

 	
 	

By:	
 	

 Name:

Title:

  

SCHEDULE I  

 
  Services    
    

	1.
	Financial
Reports (including SEC reporting and accounting)

	2.
	Information
Technology

	3.
	Land
Management

	4.
	Legal

	5.
	Operations/Reservoir
Engineering/Geology/Geophysics, including any such services to be provided the Master Operating Agreement or any third party operating agreement applicable to the
Partnership Properties.

	6.
	Risk
Management

	7.
	Corporate
Development

	8.
	Treasury

	9.
	Tax

	10.
	Audit

	11.
	Sarbanes-Oxley
Compliance

	12.
	Investor
Relations

	13.
	General
Management, Administrative and Other 

I-1

QuickLinks

ADMINISTRATIVE SERVICES AGREEMENT AMONG EXCO PARTNERS GP LP, LLC, EXCO GP PARTNERS, LP, EXCO PARTNERS, LP, EXCO PARTNERS OLP GP, LLC, EXCO PARTNERS OPERATING, LP, AND EXCO RESOURCES, INC.

ADMINISTRATIVE SERVICES AGREEMENT

RECITALS

ARTICLE I DEFINITIONS

ARTICLE II RETENTION OF EXCO; SCOPE OF SERVICES

ARTICLE III BOOKS, RECORDS AND REPORTING

ARTICLE IV ADMINISTRATIVE SERVICE FEE

ARTICLE V FORCE MAJEURE

ARTICLE VI ASSIGNMENT

ARTICLE VII TERMINATION

ARTICLE VIII GENERAL PROVISIONS

ServicesQuickLinks
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Exhibit 10.6  

 
 

FORM OF
  EXCO PARTNERS, LP
  2008 LONG-TERM INCENTIVE PLAN    
    

        SECTION
1.    Purpose of the Plan. 

        The
EXCO Partners, LP 2008 Long-Term Incentive Plan (the "Plan") has been adopted by EXCO Partners GP LP, LLC, a Delaware limited liability company (the "Company"), the
managing general partner of EXCO Partners, LP, a Delaware limited partnership (the "Partnership"). The Plan is intended to promote the interests of the Partnership, the Company and their Affiliates by
providing to employees, consultants and directors of the Partnership, the Company and their Affiliates incentive compensation awards based on Units to encourage superior performance. The Plan is also
contemplated to enhance the ability of the Partnership, the Company and their Affiliates to attract and retain the services of individuals who are essential for the growth and profitability of the
Company, the Partnership and their Affiliates, and to encourage them to devote their best efforts to advancing the business of the Company, the Partnership and their Affiliates. 

        SECTION
2.    Definitions. 

        As
used in the Plan, the following terms shall have the meanings set forth below: 

        "Affiliate"
means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries' controls, is controlled by or is under common control
with, the Person in question. As used herein, the term "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise. 

        "Award"
means an Option, UAR, Restricted Unit, Phantom Unit, Other Unit-Based Award, Unit Award or Replacement Award, and shall also include any tandem DERs granted with
respect to an Option, UAR or Phantom Unit. 

        "Award
Agreement" means the written or electronic agreement by which an Award shall be evidenced. 

        "Board"
means the Board of Directors of the Company. 

        "Change
of Control" means, and shall be deemed to have occurred upon the occurrence of one or more of the following events: 

          (i)  any
"person" or "group" within the meaning of those terms as used in Sections 13(d) and 14(d)(2) of the Exchange Act shall acquire beneficial ownership, by way of
merger, consolidation, recapitalization, reorganization or otherwise, of 50% or more of the combined voting power of the equity interests in EXCO, the Company, the General Partner or the Partnership;  provided, however, that notwithstanding the foregoing, an acquisition shall not constitute a Change in
Control hereunder if the acquirer is (x) a trustee or other fiduciary holding securities under an employee benefit plan of EXCO or the Company and acting in such capacity or (y) a
Subsidiary of EXCO or a corporation owned, directly or indirectly, by the stockholders of EXCO in substantially the same proportions as their ownership of voting securities of EXCO; 

         (ii)  any
transaction resulting in any of the Partnership, the Company or the General Partner (or their respective successors or survivors by way of merger, consolidation, or
some other transaction, or a parent or subsidiary thereof) ceasing to be an Affiliate of EXCO or the Partnership (or their respective successors or survivors by way of merger, consolidation, or some
other transaction, or a parent or subsidiary thereof); 

        (iii)  the
limited partners of the Partnership approve, in one or a series of transactions, a plan of complete liquidation of the Partnership; 

 

        (iv)  the
sale, lease or other disposition by either the Company, the Partnership or the General Partner of all or substantially all of its assets in one or more transactions
to any Person other than the Company or an Affiliate of the Company; 

         (v)  a
transaction resulting in a Person other than the Company or an Affiliate of the Company being the managing general partner of the Partnership; 

        (vi)  a
transaction resulting in a Person other than the General Partner or an Affiliate of the General Partner being the general partner of the Partnership; 

       (vii)  any
consolidation, merger or share exchange of EXCO or the Partnership in which EXCO or the Partnership, as applicable, is not the continuing or surviving corporation
or partnership, as applicable, pursuant to which shares of EXCO's common stock or the Units, as applicable, would be converted into cash, securities or other property, other than a consolidation,
merger or share exchange of EXCO or the Partnership in which the holders of EXCO's common stock or Units, as applicable, immediately prior to such transaction have the same proportionate ownership of
common equity of the surviving entity immediately after such transaction or the merger of EXCO or the Partnership into one of its subsidiaries; or 

      (viii)  the
cessation of control (by virtue of their not constituting a majority of directors) of EXCO's Board of Directors by the individuals who (x) at the date of
adoption of this Plan were directors or (y) become directors after the date of the adoption of this Plan and whose election or nomination for election by EXCO's shareholders was approved by a
vote of at least two-thirds of the directors then in office who were directors at the date of adoption of this Plan or whose election or nomination for election was previously so approved. 

        Notwithstanding
the foregoing, the Committee may elect in an Award Agreement to specify a different definition of "Change in Control" for purposes of complying with Section 409A
of the Code or for any other reason as deemed appropriate by the Committee. 

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

        "Committee"
means the Audit Committee of the Board or, if none, the Board or such committee of the Board, if any, as may be appointed by the Board to administer the Plan. 

        "Consultant"
means an independent contractor, other than a Director, who performs services for the benefit of the Company, the Partnership or an Affiliate of either. 

        "DER"
or "Distribution Equivalent Right" means a contingent right, granted in tandem with a specific Option, UAR or Phantom Unit, to receive an amount in cash equal to the cash
distributions made by the Partnership with respect to a Unit during the period such DER is outstanding. 

        "Director"
means a member of the Board or a board of directors of an Affiliate who is not an Employee or a Consultant (other than in that individual's capacity as a Director). 

        "Employee"
means any employee of the Company, the Partnership or an Affiliate of either who performs services for the benefit of the Company, the Partnership or an Affiliate of either. 

        "Exchange
Act" means the Securities Exchange Act of 1934, as amended. 

        "EXCO
means EXCO Resources, Inc., Texas corporation. 

2

 

        "Fair
Market Value" means the closing sales price of a Unit on the principal national securities exchange or other market in which trading in Units occurs on the applicable date (or if
there is no trading in the Units on such date, on the next preceding date on which there was trading) as reported in The Wall Street Journal (or other
reporting service approved by the Committee). If Units are not traded on a national securities exchange or other market at the time a determination of fair market value is required to be made
hereunder, the determination of fair market value shall be made in good faith by the Committee. Notwithstanding the foregoing, with respect to an Award granted on the effective date of the initial
public offering of Units, Fair Market Value on such date shall mean the initial offering price per Unit as stated on the cover page of the S-1 for such offering. 

        "General
Partner" means EXCO GP Partners, LP, a Delaware limited partnership. 

        "Option"
means an option to purchase Units granted under the Plan. 

        "Other
Unit-Based Award" means an award granted pursuant to Section 6(f) of the Plan. 

        "Participant"
means an Employee, Consultant or Director granted an Award under the Plan. 

        "Person"
means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, governmental agency or political
subdivision thereof or other entity. 

        "Phantom
Unit" means a phantom (notional) unit granted under the Plan which entitles the Participant to receive, at the time of settlement, an amount of cash equal to the Fair Market
Value of one Unit; however, the Committee, in its discretion, may elect to pay such vested Phantom Unit with a Unit in lieu of cash. 

        "Replacement
Award" means an Award granted pursuant to Section 6(g) of the Plan. 

        "Restricted
Period" means the period established by the Committee with respect to an Award during which the Award remains subject to forfeiture and is not either exercisable by or
payable to the Participant, as the case may be. 

        "Restricted
Unit" means a Unit granted under the Plan that is subject to a Restricted Period. 

        "Rule 16b-3"
means Rule 16b-3 promulgated by the SEC under the Exchange Act, or any successor rule or regulation thereto as in effect from time to
time. 

        "SEC"
means the Securities and Exchange Commission, or any successor thereto. 

        "Subsidiary"
means (i) any corporation in an unbroken chain of corporations beginning with EXCO, if each of the corporations other than the last corporation in the unbroken chain
owns stock possessing a majority of the total combined voting power of all classes of stock in one of the other corporations in the chain, (ii) any limited partnership, if EXCO or any
corporation described in item (i) above owns a majority of the general partnership interest and a majority of the limited partnership interests entitled to vote on the removal and replacement
of the general partner, and (iii) any partnership or limited liability company, if the partners or members thereof are composed only of EXCO, any corporation listed in item (i) above or
any limited partnership listed in item (ii) above. "Subsidiaries" means more than one of any such corporations, limited partnerships, partnerships or limited liability companies. 

3

 

        "Total
and Permanent Disability" means a Participant is qualified for long-term disability benefits under the Company's or Affiliate's disability plan or insurance policy;
or, if no such plan or policy is then in existence or if the Participant is not eligible to participate in such plan or policy, that the Participant, because of a physical or mental condition
resulting from bodily injury, disease, or mental disorder, is unable to perform his or her duties of employment for a period of six (6) continuous months, as determined in good faith by the
Committee. Notwithstanding the foregoing, in the event an Award issued under the Plan is subject to Section 409A of the Code, then, to the extent necessary to comply with the requirements of
Section 409A of the Code, in lieu of the foregoing definition, the definition of "Total and Permanent Disability" for purposes of such Award shall be the definition of "disability" provided for
under Section 409A of the Code and the regulations or other guidance issued thereunder. 

        "Unit"
means a common unit of the Partnership. 

        "UAR"
or "Unit Appreciation Right" means an Award that, upon exercise, entitles the holder to receive the excess of the Fair Market Value of a Unit on the exercise date over the exercise
price established for such Unit Appreciation Right. Such excess may be paid in cash, Units or any combination thereof, as determined by the Committee in its discretion. 

        "Unit
Award" means the grant of a Unit that is not subject to a Restricted Period. 

        "UDR"
or "Unit Distribution Right" means a right to receive distributions made by the Partnership with respect to a Restricted Unit. 

        SECTION
3.    Administration. 

        (a)   Governance. The Plan shall be administered by the Committee. 

        (b)   Delegation. Subject to the following and applicable law, the Committee, in it sole discretion, may delegate any or all of
its powers and duties under the Plan, including the power to grant Awards under the Plan, to the Chief Executive Officer of the Company or the Chief Financial Officer of the Company (the "Officer"),
subject to limitations on such delegated powers and duties as the Committee may impose, if any. Upon any such delegation, all references in the Plan to the "Committee", other than in Section 7,
shall be deemed to include the Officer to whom such delegation has been made; provided, however, that such delegation shall not limit the Chief Executive Officer's or Chief Financial Officer's right
to receive Awards under the Plan. Notwithstanding the foregoing, the Officer may not grant Awards to, or take any action with respect to any Award previously granted to, a person who is an officer
subject to Rule 16b-3 or a member of the Board. 

4

 

        (c)   Authority and Powers. Subject to the terms of the Plan and applicable law, and in addition to other express powers and
authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be
granted to a Participant; (iii) determine the number of Units to be covered by Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent,
and under what circumstances Awards may be vested, settled, exercised, canceled, or forfeited; (vi) interpret and administer the Plan and any instrument or agreement relating to an Award made
under the Plan; (vii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and
(viii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. The Committee may correct any defect, supply
any omission or reconcile any inconsistency in the Plan or an Award Agreement in such manner and to such extent as the Committee deems necessary or appropriate. Unless otherwise expressly provided in
the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any
time and shall be final, conclusive, and binding upon all Persons, including the Company, the Partnership, any Affiliate, any Participant, and any beneficiary of any Participant. 

        SECTION
4.    Units. 

        (a)   Limits on Units Deliverable. Subject to adjustment as provided in Section 4(c), the number of Units that may be
delivered with respect to Awards under the Plan may not exceed 14,700,000 Units; provided, however, if any Award (including Restricted Units) is terminated, cancelled, forfeited or expires for any
reason without the actual delivery of Units covered by such Award or Units are withheld from an Award to satisfy the exercise price or the employer's tax withholding obligation with respect to such
Award, such Units shall again be available for delivery pursuant to other Awards granted under the Plan. In the event that previously acquired Units are delivered to the Company in full or partial
payment of the exercise price for the exercise of an Option granted under the Plan, the number of Units available for future Awards under the Plan shall be reduced only by the net number of Units
issued upon the exercise of the Option. Notwithstanding the foregoing, (i) there shall not be any limitation on the number of Awards that may be granted under the Plan and paid in cash, and
(ii) any Units allocated to an Award shall, to the extent such Award is paid in cash, be again available for delivery under the Plan with respect to other Awards. 

        (b)   Sources of Units Deliverable Under Awards. Any Units delivered pursuant to an Award shall consist, in whole or in part,
of Units acquired in the open market or from any Affiliate, the Partnership or any other Person, or any combination of the foregoing, as determined by the Committee in its sole discretion. 

5

 

        (c)   Anti-Dilution Adjustments. With respect to any "equity restructuring" event that could result in an
additional compensation expense to the Company or the Partnership pursuant to the provisions of Statement of Financial Accounting Standards No. 123 ("FAS 123R") if adjustments to Awards
with respect to such event were discretionary, the Committee shall equitably adjust the number and type of Units covered by each outstanding Award and the terms and conditions, including the exercise
price and performance criteria (if any), of such Award to equitably reflect such restructuring event and shall adjust the number and type of Units (or other securities or property) with respect to
which Awards may be granted after such event. With respect to any other similar event that would not result in a FAS 123R accounting charge if the adjustment to Awards with respect to such
event were subject to discretionary action, the Committee shall have complete discretion to adjust Awards in such manner as it deems appropriate with respect to such other event. In the event the
Committee makes any adjustment pursuant to the foregoing provisions of this Section 4(c), the Committee shall make a corresponding and proportionate adjustment with respect to the maximum
number of Units that may be delivered with respect to Awards under the Plan as provided in Section 4(a) and the kind of Units or other securities available for grant under the Plan. 

        SECTION
5.    Eligibility. 

        Any
Employee, Consultant or Director shall be eligible to be designated a Participant and receive an Award under the Plan. 

        SECTION
6.    Awards. 

        (a)   Options. The Committee shall have the authority to determine the Employees, Consultants and Directors to whom Options
shall be granted, the number of Units to be covered by each Option, whether DERS are granted with respect to such Option, and the conditions and limitations applicable to the exercise of the Option,
including the following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not inconsistent with the provisions of the Plan. 

          (i)  Exercise Price. The exercise price per Unit under an Option shall be determined by the Committee at the time the Option
is granted and, except with respect to a Replacement Award, may not be less than its Fair Market Value as of the date of grant. 

         (ii)  Time and Method of Exercise. The Committee shall determine (a) the time or times at which an Option may be
exercised in whole or in part, which may include, without limitation, accelerated vesting upon the achievement of specified performance goals or other events, and, (b) in its discretion, the
method or methods by which payment of the exercise price with respect thereto may be made or deemed to have been made, which may include, without limitation, cash, check acceptable to the Company, a
"cashless-broker" exercise through a program approved by the Company, with the consent of the Company, the withholding of Units that would otherwise be delivered to the Participant upon the exercise
of the Option, other securities or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price. 

        (iii)  Forfeitures. Except as otherwise provided in the terms of the Award Agreement, upon termination of a Participant's
employment or consulting with the Company, the Partnership and their Affiliates or membership as a Director, whichever is applicable, for any reason during the applicable Restricted Period, all
Options shall be forfeited by the Participant. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant's Options. 

6

 

        (iv)  DERs. To the extent provided by the Committee, in its discretion, a grant of Options may include a tandem DER grant,
which may provide that such DERs shall be paid directly to the Participant, be credited to a bookkeeping account (with or without interest in the discretion of the Committee) subject to the same
vesting restrictions as the tandem Award, or be subject to such other provisions or restrictions as determined by the Committee in its discretion. Absent such a restriction on the DERs in the Award
Agreement, DERs shall be paid promptly to the holder of the Options with respect to which these were granted without vesting restrictions. 

        (b)   UARs. The Committee shall have the authority to determine the Employees and Directors to whom Unit Appreciation Rights
shall be granted, the number of Units to be covered by each grant, whether DERs are granted with respect to such Unit Appreciation Right, the exercise price therefor and the conditions and limitations
applicable to the exercise of the Unit Appreciation Right, including the following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not
inconsistent with the provisions of the Plan. 

          (i)  Exercise Price. The exercise price per Unit Appreciation Right shall be determined by the Committee at the time the Unit
Appreciation Right is granted but may not be less than the Fair Market Value of a Unit as of the date of grant. 

         (ii)  Time of Exercise. The Committee shall determine the Restricted Period, i.e., the time or times at which a Unit
Appreciation Right may be exercised in whole or in part, which may include, without limitation, accelerated vesting upon the achievement of specified performance goals. 

        (iii)  Forfeitures. Except as otherwise provided in the terms of the Award Agreement, upon termination of a Participant's
employment with the Company and its Affiliates or membership as a Director, whichever is applicable, for any reason during the applicable Restricted Period, all outstanding unvested Unit Appreciation
Rights awarded the Participant shall be automatically forfeited on such termination. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant's
Unit Appreciation Rights. 

        (iv)  Unit Appreciation Right DERs. To the extent provided by the Committee, in its discretion, a grant of Unit Appreciation
Rights may include a tandem DER grant, which may provide that such DERs shall be paid directly to the Participant, be credited to a bookkeeping account (with or without interest in the discretion of
the Committee) subject to the same vesting restrictions as the tandem Unit Appreciation Rights Award, or be subject to such other provisions or restrictions as determined by the Committee in its
discretion. Absent such a restriction on the DERs in the Award Agreement, DERs shall be paid promptly to the holder of the Unit Appreciation Rights with respect to which they were granted without
vesting restrictions. 

7

 

        (c)   Phantom Units. The Committee shall have the authority to determine the Employees, Consultants, and Directors to whom
Phantom Units shall be granted, the number of Phantom Units to be granted to each such Participant, the Restricted Period, the time or conditions under which the Phantom Units may become vested or
forfeited, which may include, without limitation, the accelerated vesting upon the achievement of specified performance goals or other events, and such other terms and conditions as the Committee may
establish with respect to such Awards, including whether DERs are granted with respect to such Phantom Units. 

          (i)  DERs. To the extent provided by the Committee in its discretion, a grant of Phantom Units may include a tandem DER
grant, which provides that such DERs shall be credited to a bookkeeping account (without interest) and shall be paid to the Participant in cash upon the vesting of the tandem Phantom Unit. However,
the Committee, in its discretion, may provide such other terms, including different vesting and payment forms and mediums and the "investment" of such DERs in additional Phantom Units, as it may
choose with respect to DERs. Absent any vesting restrictions or "investment" requirements on the DERs in the Award Agreement, DERs shall be paid in cash promptly to the holder of the Phantom Units
with respect to which they were granted without such restrictions or requirements. 

         (ii)  Forfeitures. Except as otherwise provided in the terms of the Award Agreement, upon termination of a Participant's
employment or consulting arrangement with the Company, the Partnership and their Affiliates or membership as a Director, whichever is applicable, for any reason during the applicable Restricted
Period, all outstanding Phantom Units awarded the Participant, and any outstanding tandem DERs credited to such Participant, shall be automatically forfeited on such termination. The Committee may, in
its discretion, waive in whole or in part such forfeiture with respect to a Participant's Phantom Units and DERs. 

        (iii)  Lapse of Restrictions. Upon or as soon as reasonably practical following the vesting of each Phantom Unit, subject to
the provisions of Section 8(b), the Participant shall be entitled to settlement of such Phantom Unit and shall receive from the Company cash equal to the Fair Market Value of one Unit as of the
vesting date; however, the Committee, in its discretion, may elect to pay such vested Phantom Unit in the form of one Unit in lieu of cash. 

        (d)   Restricted Units. The Committee shall have the authority to determine the Employees, Consultants and Directors to whom
Restricted Units shall be granted, the number of Restricted Units to be granted to each such Participant, the Restricted Period, the conditions under which the Restricted Units may become vested or
forfeited, which may include, without limitation, the accelerated vesting upon the achievement of specified performance goals or other events, and such other terms and conditions as the Committee may
establish with respect to such Awards. 

          (i)  UDRs. To the extent provided by the Committee, in its discretion, a grant of Restricted Units may provide that
distributions made by the Partnership with respect to the Restricted Units shall be subject to such forfeiture and other restrictions as the Committee may choose and, if so restricted, such
distributions shall be held, without interest, until the UDR vests or is forfeited. In addition, the Committee may provide that such distributions be used to acquire additional Restricted Units for
the Participant. Such additional Restricted Units may be subject to such vesting and other terms as the Committee may prescribe. Absent such a restriction on the UDRs in the Award Agreement, UDRs
shall be paid promptly to the holder of the Restricted Unit without restriction. 

8

 

         (ii)  Forfeitures. Except as otherwise provided in the terms of the Award Agreement, upon termination of a Participant's
employment or consulting with the Company, the Partnership and their Affiliates or membership on the Board, whichever is applicable, for any reason during the applicable Restricted Period, all
outstanding unvested Restricted Units awarded the Participant, and any unpaid UDRs credited to the Participant, shall be automatically forfeited on such termination. The Committee may, in its
discretion, waive in whole or in part such forfeitures with respect to a Participant's Restricted Units and UDRs. 

        (iii)  Lapse of Restrictions. Upon or as soon as reasonably practical following the vesting of each Restricted Unit, subject
to the provisions of Section 8(b), the Participant shall be entitled to have the restrictions removed from his or her Award so that the Participant then holds an unrestricted Unit. 

        (e)   Unit Awards. Unit Awards may be granted under the Plan to such Employees, Consultants and/or Directors and in such
amounts as the Committee, in its discretion, may select. 

        (f)    Other Unit-Based Awards. Other Unit-Based Awards may be granted under the Plan to such Employees,
Consultants and/or Directors as the Committee, in its discretion, may select. An Other Unit-Based Award shall be an award denominated or payable in, valued in or otherwise based on or
related to Units, in whole or in part. The Committee shall determine the terms and conditions, if any, of any such Other Unit-Based Award. Upon or as soon as reasonably practical following
vesting, an Other Unit-Based Award may be settled, as determined by the Committee in its sole discretion in cash, Common Units (including Restricted Units) or any combination thereof as
determined by the Committee, in its discretion. 

        (g)   Replacement Awards. Awards may be granted under the Plan in substitution or replacement for similar equity awards
cancelled or forfeited by Employees, Consultants and Directors as a result of a merger or acquisition by the Partnership or an Affiliate of an entity or the assets of an entity. Such Replacement
Awards may have such terms and conditions as the Committee may determine and the exercise price of an Option may be less than the Fair Market Value of a Unit on the date of such substitution or
replacement. 

        (h)   General. 

          (i)  Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or
in addition to, in tandem with, or in substitution for any other Award granted under the Plan or any award granted under any other plan of the Company, the Partnership or any Affiliate. Awards granted
in addition to or in tandem with other Awards or awards granted under any other plan of the Company, the Partnership or any Affiliate may be granted either at the same time as or at a different time
from the grant of such other Awards or awards. 

         (ii)  Limits
on Transfer of Awards. 

        (A)  Except
as provided in paragraph (C) below, each Option and Unit Appreciation Right shall be exercisable only by the Participant during the Participant's lifetime,
or by the person to whom the Participant's rights shall pass by will or the laws of descent and distribution. 

        (B)  Except
as provided in paragraphs (C below), no Award and no right under any such Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company, the Partnership or any
Affiliate. 

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        (C)  To
the extent specifically provided by the Committee with respect to an Award, an Award may be transferred by a Participant without consideration to immediate family
members or related family trusts, limited partnerships or similar entities or on such terms and conditions as the Committee may from time to time establish. 

        (iii)  Term of Awards. The term of each Award shall be for such period as may be determined by the Committee. 

        (iv)  Issuance of Units. The Units purchased or delivered pursuant to an Award may be evidenced in any manner deemed
appropriate by the Committee in its sole discretion, including but not limited to, in the form of a certificate issued in the name of the Participant or by book entry, electronic or otherwise, subject
to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the SEC, any stock exchange upon which such
Units or other securities are then listed, and any applicable federal or state laws, and the Committee may cause a legend or legends to be inscribed on any certificates to make appropriate reference
to such restrictions. 

         (v)  Consideration for Grants. Awards may be granted for such consideration, including services, as the Committee determines. 

        (vi)  Delivery of Units or other Securities and Payment by Participant of Consideration. Notwithstanding anything in the Plan
or any Award Agreement to the contrary, if the Company is not reasonably able to obtain Units to deliver pursuant to such Award without violating the rules or regulations of any applicable law or
securities exchange, no delivery shall occur until such time as the Committee, in good faith, determines that the delivery of Units may be made without violating applicable law or the applicable rules
or regulations of any governmental agency or securities exchange. No Units or other securities shall be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant
to the Plan or the applicable Award Agreement (including, without limitation, any exercise price or tax withholding) is received by the Company. 

       (vii)  Change in Control, Similar Events. Upon the occurrence of a Change of Control, a recapitalization, reorganization,
merger, consolidation, combination, exchange or other relevant change in capitalization of or involving the Partnership, any change in applicable law or regulation affecting the Plan or Awards
thereunder, or any change in accounting principles affecting the financial statements of the Partnership, the Committee, in its sole discretion, without the consent of any Participant or holder of the
Award, and on such terms and conditions as it deems appropriate, may take any one or more of the following actions in order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or an outstanding: 

        (A)  provide
for either (i) the cancellation and termination of any Award in exchange for an amount of cash, other property or securities, if any, equal to the amount
that would have been attained upon the exercise of such Award or realization of the Participant's rights or if the Participant were a unitholder as of the date of the occurrence of such event (and,
for the avoidance of doubt, if as of the date of the occurrence of such transaction or event the Committee determines in good faith that no amount would have been attained upon the exercise of such
Award or realization of the Participant's rights, then such Award may be terminated by the Company without payment) or (ii) the replacement of such Award with or the conversion of such Award
into cash or other securities, rights or property selected by the Committee in its sole discretion; 

10

 

        (B)  provide
that such Award be assumed by the successor or survivor entity, or a parent or subsidiary thereof, or be exchanged for similar options, rights or awards covering
the equity of the successor or survivor, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of equity interests and prices; 

        (C)  make
adjustments in the number and type of Units (or other securities or property) subject to outstanding Awards, and in the number and kind of outstanding Awards or in
the terms and conditions of (including the exercise price), and the vesting and performance criteria included in, outstanding Awards, or both; 

        (D)  provide
that such Award shall be exercisable or payable, notwithstanding anything to the contrary in the Plan or the applicable Award Agreement; and 

        (E)  provide
that the Award cannot be exercised or become payable after such event, i.e., shall terminate upon such event. 

Notwithstanding
the foregoing, (i) with respect to an above event that is an "equity restructuring" event that would be subject to a compensation expense pursuant FAS 123R if a
discretionary change were made, the provisions in Section 4(c) shall control to the extent they are in conflict with the discretionary provisions of this Section 6. 

Further,
notwithstanding the foregoing, the Committee shall not take any action pursuant to this Section 6(h)(vii) that would result in a Participant becoming subject to the adverse tax
consequences imposed by a violation of Section 409A of the Code as a result of such action. 

        SECTION
7.    Amendment and Termination. Except to the extent prohibited by applicable law: 

        (a)   Amendments to the Plan. Except as required by the rules of the principal securities exchange or inter-dealer quotation
system on which the Units are traded or listed, by the Code, by the Exchange Act or other applicable law, and subject to Section 7(b) below, the Board or the Committee may amend, alter,
suspend, discontinue, or terminate the Plan in any manner, including increasing the number of Units available for Awards under the Plan without the consent of any partner, Participant, other holder or
beneficiary of an Award, or any other Person. Notwithstanding the foregoing, no amendment, alteration, suspension, discontinuance, or termination of the Plan will modify the time at which a payment
related to an award that provides for the deferral of compensation within the meaning of Section 409A of the Code shall be made to any Participant except to the extent such a modification is
permitted by, and in compliance with, Section 409A and the applicable guidance issued thereunder. 

        (b)   Amendments to Awards. Subject to Section 7(a), the Committee may waive any conditions or rights under, amend any
terms of, or alter any Award theretofore granted, provided no change, other than pursuant to Section 6(f)(vii) or, as determined by the Committee, in its sole discretion, as being
necessary or appropriate to comply with applicable law, in any Award shall materially reduce the benefit of a Participant without the consent of such Participant. Notwithstanding the foregoing, if the
terms of an Award would result in the imposition of the additional tax under Section 409A of the Code, the Award will be reformed, if possible, to avoid imposition of such tax in a manner that
will result in the least adverse economic impact on the Participant and, for purposes of the Plan, such reformation shall be deemed not to reduce the Participant's rights thereunder and shall not
require the Participant's consent. 

        SECTION
8.    General Provisions. 

        (a)   No Rights to Award. No Person shall have any claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Participants. The terms and conditions of Awards need not be the same with respect to each recipient. 

11

 

        (b)   Tax Withholding. Unless other arrangements have been made that are acceptable to the Company, the Company or any
Affiliate is authorized to withhold from any Award, from any payment due or transfer made under any Award or from any compensation or other amount owing to a Participant the amount (in cash, Units,
other securities or property, or Units that would otherwise be issued or delivered pursuant to such Award) of any applicable taxes payable in respect of the grant or settlement of an Award, its
exercise, the lapse of restrictions thereon, or any payment or transfer under an Award or under the Plan and to take such other action as may be necessary in the opinion of the Company to satisfy its
withholding obligations for the payment of such taxes. 

        (c)   No Right to Employment or Services. The grant of an Award shall not be construed as giving a Participant the right to be
retained in the employ of the Company, the Partnership or any Affiliate or to remain as a Director or continue to provide services as a Consultant, as applicable. Further, the Company, the Partnership
or an Affiliate may at any time dismiss a Participant from employment or services, free from any liability or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement or other agreement. 

        (d)   Governing Law. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan
shall be determined in accordance with the laws of the State of Texas without regard to its conflicts of laws principles. 

        (e)   Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or
unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect. 

        (f)    Other Laws. The Committee may refuse to issue or transfer any Units or other consideration under an Award if, in its sole
discretion, it determines that the issuance or transfer of such Units or such other consideration might violate any applicable law or regulation, the rules of the principal securities exchange on
which the Units are then traded, or entitle the Partnership or any Affiliate to recover the same under Section 16(b) of the Exchange Act, and any payment tendered to the Company by a
Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary. 

        (g)   No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund
of any kind or a fiduciary relationship between the Company or any participating Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments
from the Company or any participating Affiliate pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the Company or any participating Affiliate. 

        (h)   No Fractional Units. No fractional Units shall be issued or delivered pursuant to the Plan or any Award, and the
Committee shall determine in its sole discretion whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Units or whether such fractional Units or any
rights thereto shall be terminated or otherwise eliminated, with or without consideration. 

        (i)    Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference.
Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. 

12

 

        (j)    Facility Payment. Any amounts payable hereunder to any person under legal disability or who, in the judgment of the
Committee, is unable to properly manage his financial affairs, may be paid to the legal representative of such person, or may be applied for the benefit of such person in any manner which the
Committee may select, and the Company shall be relieved of any further liability for payment of such amounts. 

        (k)   Participation by Affiliates. In making Awards to Employees employed by an entity other than the Company, the Committee
shall be acting on behalf of the Affiliate, and to the extent the Partnership has an obligation to reimburse the Company for compensation paid for services rendered for the benefit of the Partnership,
such payments or reimbursement payments may be made by the Partnership directly to the Affiliate, and, if made to the Company, shall be received by the Company as agent for the Affiliate. 

        (l)    Gender and Number. Words in the masculine gender shall include the feminine gender, the plural shall include the singular
and the singular shall include the plural. 

        (m)  Compliance with Section 409A. Nothing in the Plan or any Award Agreement shall operate or be construed to cause
the Plan or an Award, to the extent subject to Section 409A, to fail to comply with the requirements of Section 409A of the Code. With respect to any Award that is subject to
Section 409A of the Code, the applicable provisions of Section 409A the Code and the regulations thereunder are hereby incorporated by reference and shall control over any provision of
the Plan or any Award Agreement that is in conflict therewith. For purposes of such compliance, in the event that an Award that is subject to Section 409A of the Code is payable in connection
with a Participant's termination of service as an Employee, Consultant or Director, such payments shall be made only in connection with a "separation from service" within the meaning of
Section 409A of the Code and the regulations thereunder (a "Separation from Service"). Further, notwithstanding anything to the contrary in this Plan, in the event an Award issued under the
Plan is subject to Section 409A of the Code, (i) if upon a Participant's Separation from Service, the Participant is a "specified employee" within the meaning of Section 409A of
the Code, and the deferral of any amounts or benefits otherwise payable or to be provided under any Award made pursuant to this Plan as a result of the Participant's Separation from Service is
necessary in order to prevent any accelerated or additional tax to the Participant under Section 409A of the Code, then the Company will delay the payment of any such amounts or the provision
of any such benefits hereunder until the earliest of (x) the date that is six (6) months following the date of the Participant's Separation from Service and (y) the date of the
Participant's death following such Separation from Service. Upon the expiration of the applicable deferral period, any delayed amounts will be paid to the Participant in a single lump sum, with
interest from the date otherwise payable, at the prime rate as published in The Wall Street Journal on the Participant's Separation from Service, and any delayed benefits will be provided on such
date. 

        SECTION
9.    Term of the Plan. 

        The
Plan shall become effective on the date of its approval by the Board and shall terminate on, and no Awards may be granted after, the earliest of (i) the date established by
the Board or the Committee, (ii) the 10th anniversary of the date the Plan was adopted by the Company (or such earlier anniversary, if any, required by the rules of the exchange
on which Units are traded) or (iii) the date Units are no longer available for delivery pursuant to Awards under the Plan. Unless otherwise expressly provided in the Plan or in an applicable
Award Agreement, any Award granted prior to any Plan termination, and the authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive
any conditions or rights under such Award, shall extend beyond such termination date. 

13

 

        IN
WITNESS WHEREOF, the Company has caused this instrument to be executed as of                        , 2007, by its Chief Executive
Officer pursuant to prior action taken by the Board. 

	 	 	 	EXCO PARTNERS GP LP, LLC
	

 	

 	
 	

By:	

  
 Douglas H. Miller
 Chairman and Chief Executive Officer
	

ATTEST:	
 	

 	

 
	

By:	

  
 William L. Boeing
 Vice President and Secretary	
 	

 	

 

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QuickLinks

FORM OF EXCO PARTNERS, LP 2008 LONG-TERM INCENTIVE PLAN

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