Document:

Joint Development Agreement

 Exhibit 10.1 

EXECUTION VERSION 

JOINT DEVELOPMENT AGREEMENT 

BY AND AMONG 

BG PRODUCTION COMPANY (PA), LLC 

BG PRODUCTION COMPANY (WV), LLC 

EXCO PRODUCTION COMPANY (PA), LLC 

EXCO PRODUCTION COMPANY (WV), LLC 

AND 

EXCO RESOURCES (PA), LLC 

DATED JUNE 1, 2010 

 TABLE OF CONTENTS 

 

					
	 ARTICLE 1    DEFINITIONS; INTERPRETATION; JOINT ENTITIES
	  	1
	 Section 1.1
	    	Definitions	  	1
	 Section 1.2
	    	Interpretation	  	2
	 Section 1.3
	    	Entity Members and Joint Entities	  	2
		
	 ARTICLE 2     CERTAIN OBLIGATIONS
	  	2
	 Section 2.1
	    	Funding by the Company	  	2
	 Section 2.2
	    	Carry of Eligible Costs	  	3
	 Section 2.3
	    	Payment Procedure	  	4
	 Section 2.4
	    	Development Costs	  	6
	 Section 2.5
	    	Guarantees	  	7
		
	 ARTICLE 3    SCOPE; JDA INTERESTS AND PARTICIPATING INTERESTS; OPERATIONS
	  	7
	 Section 3.1
	    	Scope	  	7
	 Section 3.2
	    	JDA Interests and Participating Interests	  	7
	 Section 3.3
	    	Operating Agreements	  	8
	 Section 3.4
	    	Appointment and Removal of Party Operator	  	9
	 Section 3.5
	    	Joint Development Operator	  	12
	 Section 3.6
	    	Technical Services	  	16
	 Section 3.7
	    	Appalachian Overhead	  	16
		
	 ARTICLE 4    OPERATING COMMITTEE; DEVELOPMENT WORK PROGRAM; ANNUAL WORK PROGRAM AND BUDGETS

	  	17
	 Section 4.1
	    	Operating Committee	  	17
	 Section 4.2
	    	Development Work Program	  	24
	 Section 4.3
	    	Initial Annual Work Plan and Budgets	  	25
	 Section 4.4
	    	Subsequent Annual Work Plan and Budgets	  	25
	 Section 4.5
	    	Statements of Estimated Expenditures	  	31
	 Section 4.6
	    	AFEs	  	31
	 Section 4.7
	    	Area-Wide Operations	  	32
	 Section 4.8
	    	Third Party Operators	  	32
	 Section 4.9
	    	Participation by the Company	  	32
		
	 ARTICLE 5    DEFAULT
	  	33
	 Section 5.1
	    	Default	  	33
	 Section 5.2
	    	Certain Consequences of Default	  	34
	 Section 5.3
	    	Right to Costs of Enforcement	  	37
	 Section 5.4
	    	Cumulative and Additional Remedies	  	37
	 Section 5.5
	    	Remedies for Failure to Pay Carried Costs	  	37
		
	 ARTICLE 6    TRANSFERS
	  	38
	 Section 6.1
	    	Maintenance of Uniform Interest; Tag-Along Right; Minimum Participating Interest; Transfers by Defaulting Parties	  	38
	 Section 6.2
	    	Requirements for Transfer	  	40

  

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	 Section 6.3
	  	Liability of Transferor/Transferee	  	41
	 Section 6.4
	  	Encumbrances by Parties	  	42
		
	 ARTICLE 7    CONSENT TO ASSIGNMENT
	  	42
	 Section 7.1
	  	Certain Transfers during Initial Three Year Period	  	42
	 Section 7.2
	  	Other Transfers	  	43
	 Section 7.3
	  	Additional Consent Requirements	  	43
	 Section 7.4
	  	Consents for Transfer of Joint Development or Party Operatorship	  	43
		
	 ARTICLE 8    PREFERENTIAL RIGHT TO PURCHASE; CHANGES IN EQUITY OWNERSHIP
	  	44
	 Section 8.1
	  	Preferential Right to Purchase	  	44
	 Section 8.2
	  	Changes in Equity Ownership	  	47
		
	 ARTICLE 9    AREA OF MUTUAL INTEREST; CERTAIN RENTALS; JOINT ENTITIES
	  	49
	 Section 9.1
	  	Creation of Area of Mutual Interest	  	49
	 Section 9.2
	  	Area of Mutual Interest Procedures	  	49
	 Section 9.3
	  	Payment of Certain Rentals	  	54
		
	 ARTICLE 10    TAXES
	  	55
	 Section 10.1
	  	Tax Partnership	  	55
	 Section 10.2
	  	Tax Information	  	56
	 Section 10.3
	  	Responsibility for Taxes	  	56
		
	 ARTICLE 11    TERM
	  	56
		
	 ARTICLE 12    RELATIONSHIP OF THE PARTIES
	  	57
		
	 ARTICLE 13    GOVERNING LAW; DISPUTE RESOLUTION; EXPERT PROCEEDINGS
	  	57
	 Section 13.1
	  	Governing Law	  	57
	 Section 13.2
	  	Dispute Resolution	  	57
	 Section 13.3
	  	Expert Proceedings	  	59
		
	 ARTICLE 14    MISCELLANEOUS
	  	60
	 Section 14.1
	  	Counterparts	  	60
	 Section 14.2
	  	Notices	  	60
	 Section 14.3
	  	Expenses	  	62
	 Section 14.4
	  	Waivers; Rights Cumulative	  	62
	 Section 14.5
	  	Entire Agreement; Conflicts	  	62
	 Section 14.6
	  	Amendment	  	63
	 Section 14.7
	  	Parties in Interest	  	63
	 Section 14.8
	  	Successors and Permitted Assigns	  	63
	 Section 14.9
	  	Confidentiality	  	63
	 Section 14.10
	  	Publicity	  	64
	 Section 14.11
	  	Preparation of Agreement	  	65
	 Section 14.12
	  	Conduct of the Parties; Business Principles	  	65
	 Section 14.13
	  	Severability	  	65
	 Section 14.14
	  	Non-Compensatory Damages	  	66
	 Section 14.15
	  	Excluded Assets	  	66

  

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	APPENDICES AND EXHIBITS
		
	Appendix I	  	Definitions
		
	Exhibit “A”	  	Form of BG JDA Guaranty
	Exhibit “B”	  	Form of Joint Development Operating Agreement
	Exhibit “C”	  	[Intentionally Omitted]
	Exhibit “D”	  	Development Work Program
	Exhibit “E”	  	Calendar Year 2010 Annual Work Program and Budget
	Exhibit “F”	  	Form of Assumption Agreement
	Exhibit “G”	  	Tax Partnership Agreement
	Exhibit “H”	  	Form of EXCO JDA Guaranty
	Exhibit “I”	  	Form of Joint Entity Ratification
	Exhibit “J”	  	Form of Power of Attorney for Acquisitions

  

 iii 

 JOINT DEVELOPMENT AGREEMENT 

THIS JOINT DEVELOPMENT AGREEMENT is signed this 1st day of June, 2010 (the “Closing Date”) by and among BG Production
Company (PA), LLC, a limited liability company organized and existing under the Laws of Delaware (“BGPA”), BG Production Company (WV), LLC, a limited liability company organized and existing under the Laws of Delaware
(“BGWV” and, together with BGPA and any other Affiliate of BGPA that becomes a Party to this Agreement, “BG”), EXCO Production Company (PA), LLC, a limited liability company organized and existing under the Laws of
Delaware (“EXCOPA”), EXCO Production Company (WV), LLC, a limited liability company organized and existing under the Laws of Delaware (“EXCOWV” and, together with EXCOPA and any other Affiliate of EXCOPA that
becomes a Party to this Agreement, “EXCO”), and EXCO Resources (PA), LLC, a limited liability company organized and existing under the Laws of Delaware (the “Company”). BG, EXCO and the Company shall sometimes be
referred to herein together as the “Parties”, and individually as a “Party”. BG and EXCO shall sometimes be referred to herein together in their capacities as working interest owners in the Development Assets and
owners (directly or through an Affiliate) of the Membership Interests of the Joint Entities as the “Development Parties”, and each individual grouping of Affiliates (BG or EXCO) as a “Development Party”. 

RECITALS 

WHEREAS, on the Closing Date, BG US Production Company, LLC, a limited liability company organized and existing under the Laws (as
hereinafter defined) of Delaware (“BG Parent”), and EXCO Holding (PA), Inc., a corporation organized and existing under the Laws of Delaware (“EXCO Parent”), consummated certain transactions contemplated in the
Transfer Agreement (as hereinafter defined), which transactions included the transfer to BG Parent by EXCO Parent of all of the outstanding membership interests of BGPA and BGWV and the purchase by BG Parent and sale by EXCO Parent of fifty percent
(50%) of the outstanding membership interests of the Company; and  
 WHEREAS, the Development Parties desire to
develop the Subject Oil and Gas Assets (as hereinafter defined) located in the Appalachian Area (as hereinafter defined) in a coordinated manner using the Company as operator; and 

WHEREAS, the Parties now desire to set forth their respective rights and obligations with respect to all such arrangements. 

NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL AGREEMENTS HEREIN CONTAINED, THE PARTIES HEREBY AGREE AS FOLLOWS: 

ARTICLE 1 

DEFINITIONS; INTERPRETATION; JOINT ENTITIES 

Section 1.1 Definitions. In addition to the terms defined in the introductory paragraph and the Recitals of this
Agreement, for purposes hereof, the capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in Appendix I. 
  

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 Section 1.2 Interpretation. All references in this Agreement to Exhibits,
Appendices, Articles, Sections, subsections and other subdivisions refer to the corresponding Exhibits, Appendices, Articles, Sections, subsections and other subdivisions of or to this Agreement unless expressly provided otherwise. Titles appearing
at the beginning of any Articles, Sections, subsections and other subdivisions of this Agreement are for convenience only, do not constitute any part of this Agreement, and shall be disregarded in construing the language hereof. The words “this
Agreement,” “herein,” “hereby,” “hereunder” and “hereof,” and words of similar import, refer to this Agreement as a whole and not to any particular Article, Section, subsection or other subdivision unless
expressly so limited. The words “this Article,” “this Section,” and “this subsection,” and words of similar import, refer only to Article, Section or subsection hereof in which such words occur. The word
“including” (in its various forms) means including without limitation. All references to “$” or “dollars” shall be deemed references to United States dollars. Each accounting term not defined herein will have the
meaning given to it under GAAP as interpreted as of the date of this Agreement. Pronouns in masculine, feminine or neuter genders shall be construed to state and include any other gender, and words, terms and titles (including terms defined herein)
in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires. Appendices and Exhibits referred to herein are attached to and by this reference incorporated herein for all purposes. References to
any Law or agreement shall mean such Law or agreement as it may be amended from time to time. Each set of Development Parties that are Affiliates shall be considered a single Development Party for purposes of this Agreement except as otherwise
expressly provided. 
 Section 1.3 Entity Members and Joint Entities. In the event that the Development
Parties or their Affiliates acquire or have acquired a Joint Entity (other than the Company) by operation of Section 9.2 or otherwise, such Joint Entity, while not a party to this Agreement, and the Entity Members thereof (even if not a party
to this Agreement), shall be bound hereby and have rights hereunder (to the extent provided herein), and, on the date that the Development Parties close their acquisition of such Joint Entity, each Development Party shall cause (a) its
affiliated Entity Members of such Joint Entity to, and to cause such Joint Entity to, execute a ratification of this Agreement in a form substantially similar to Exhibit “I” attached hereto and (b) its affiliated Entity Members of
such Joint Entity to cause such Joint Entity to execute a power of attorney substantially in the form of Exhibit “J” attached hereto. In the event that this Agreement is amended in accordance with Section 14.6, all then-existing Joint
Entities (other than the Company), while not parties to this Agreement, and the Entity Members thereof (even if not a party to this Agreement), shall be bound by this Agreement as so amended without further action by any such Person. 

ARTICLE 2 

CERTAIN OBLIGATIONS 

Section 2.1 Funding by the Company. The Development Parties shall cause their respective affiliated Entity Members of
the Company to pay (according to such Entity Members’ respective Percentage Interests in the Company) Capital Contributions to the Company with respect to the Company’s share of the Development Costs for those Development Operations in
which the Company is a Participating Party. All such payments shall be made in the same manner and at the same time as each Development Party and Entity Member pays its share of billings and requests for advances or Capital Contributions, as
applicable, pursuant to Section 2.3. 
  

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Should a Development Party fail to cause its affiliated Entity Member(s) of the Company to pay any such amount when due, such Development Party shall be in default under the terms of Article 5,
and each other Development Party shall be obligated to pay its share of such amount as required by Section 5.2(e). 

Section 2.2 Carry of Eligible Costs. 
  

	 	(a)	From and after the Closing Date and until the Carry Termination Event, and notwithstanding the terms of any Applicable Operating Agreement to the contrary, (i) BG
shall pay seventy-five and three hundred seventy-seven thousandths percent (75.377%) of EXCO’s or any EXCO Member’s share under each Applicable Operating Agreement of all Eligible Costs incurred in accordance with an approved Annual
Work Program and Budget or pursuant to a Sole Risk Development Operation undertaken by EXCO or a Farmout Sole Risk Entity Operation undertaken by an EXCO Member or EXCO and (ii) with respect to each Joint Entity other than the Company, BG shall
cause the BG Members to pay, without duplication of clause (i), seventy-five and three hundred seventy-seven thousandths percent (75.377%) of each EXCO Member’s Percentage Interest share of all Capital Contributions under the applicable
Joint Entity Agreement with respect to such Joint Entity’s share under each Applicable Operating Agreement of Eligible Costs incurred (A) in accordance with an approved Annual Work Program and Budget or (B) pursuant to a Sole Risk
Entity Operation undertaken by such Joint Entity on behalf of any EXCO Member (all such Eligible Costs that BG is obligated to pay or cause the BG Members to pay pursuant to this Section 2.2, “Carried Costs”). As used herein,
“Carry Termination Event” means the time at which the aggregate amount of Carried Costs paid by BG and the BG Members equals the Carried Costs Obligation. Joint Development Operator shall maintain an accurate record of the Carried Costs
paid by BG and the BG Members from time to time, and shall provide each Development Party with a monthly statement showing the Calendar Month and inception to date payments by BG and the BG Members. 

 

	 	(b)	 Until the Carry Termination Event, BG shall pay, and shall cause the BG Members to pay, all Carried Costs in the same manner and at the same time as
each Development Party and Entity Member pays its share of billings or requests for advances or Capital Contributions pursuant to Section 2.3. BG may make any such payments on behalf of the BG Members as provided in Section 2.3(a). BG and
each such BG Member shall be entitled to exercise (or, in the case of a Sole Risk Development Operation undertaken by EXCO, a Farmout Sole Risk Entity Operation undertaken by an EXCO Member or EXCO or a Sole Risk Entity Operation undertaken by any
Joint Entity on behalf of any EXCO Member, cause EXCO or the EXCO Member to exercise on its behalf) all rights available to the parties under the Applicable Operating Agreements or applicable Joint Entity Agreements to contest charges and audit the
accounts of the operator thereunder with respect to such payments. Any reimbursements for any Carried Costs paid by BG or any BG Members shall be paid by EXCO, the applicable EXCO Member, the applicable Joint Entity or the applicable reimbursing
party to BG or 

  

 3 

	 	
such BG Member, as directed by BG, promptly after the determination thereof (and, to the extent reimbursable by a Person other than EXCO, an EXCO Member or a Joint Entity and paid to EXCO, such
EXCO Member or such a Joint Entity, after receipt by EXCO, such EXCO Member or such Joint Entity of such amounts), provided that any amounts so reimbursed to BG or such BG Member shall be deducted from the calculation of the Carried Costs paid by BG
and the BG Members for purposes of this Agreement, including the determination of the Carry Termination Event. In the event EXCO, an EXCO Member or a Joint Entity receives a credit in respect of Carried Costs paid by BG or any BG Member, at the
request of BG, EXCO, such EXCO Member or such Joint Entity shall request that such credit be paid directly to BG or such BG Member, as directed by BG (and any such credit actually paid to BG or such BG Member shall be deducted from the calculation
of Carried Costs paid by BG and the BG Members pursuant to this Agreement). 

 Section 2.3 Payment
Procedure. 
  

	 	(a)	Each Development Party has initially paid, or has caused its affiliated Entity Members to pay, to Joint Development Operator the following sums with respect to
Development Operations by wire transfer to the Joint Operations Account: 

  

				
	 BG
	  	$	54,020,000.00
	 EXCO
	  	$	32,780,000.00

 The Parties
agree that the amounts deposited by the Development Parties and their respective affiliated Entity Members into the Joint Operations Account pursuant to this Section represent the BG Deposit and the EXCO Deposit for the three Calendar Months
following the Closing Date, each as calculated on the Closing Date, plus the amount necessary to cover each Development Party’s and its affiliated Entity Members’ shares of Permitted Expenses for the remainder of the Calendar Month in
which the Closing Date falls. On the first Business Day of each Calendar Month following the Closing Date, each Development Party shall, and shall cause each of its affiliated Entity Members to, deposit by wire transfer directly into the Joint
Operations Account such Development Party’s and its affiliated Entity Members’ Additional Deposit as set forth in the Monthly Statement provided by Joint Development Operator pursuant to Section 2.3(f). Any Development Party may make
such payments on behalf of its Affiliated Entity Members provided that the amounts to be credited to each Entity Member are designated at the time payment is made. 
  

	 	(b)	Except with respect to amounts deposited by any Entity Member for expenditures attributable to Farmout Sole Risk Entity Operations performed by such Entity Member, all
amounts deposited into the Joint Operations Account by an Entity Member shall be deemed to be Capital Contributions of such Entity Member to its Joint Entity under the applicable Joint Entity Agreement. Each Joint Entity shall be deemed to have
deposited into the Joint Operations Account, simultaneously with receipt from the applicable Entity Member, the deemed Capital Contributions of each of its Entity Members as payment for its share of Development Costs. 

 

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	 	(c)	All money on deposit in the Joint Operations Account shall be held for the benefit of the Development Parties and the Joint Entities (and, if applicable, each Entity
Member participating in a Farmout Sole Risk Entity Operation), with each Development Party and Joint Entity (and, if applicable, Entity Member, with respect to funds deposited in connection with a Farmout Sole Risk Entity Operation) deemed to have a
share of such funds equal to the share of funds deposited by it or deemed deposited by it (including, in the case of EXCO or any EXCO Member, Carried Costs paid on its behalf by BG or any BG Member, other than those contributed as Capital
Contributions to Joint Entities) into the Joint Operations Account less funds expended for its account for Development Costs, plus its share of interest earned on the balance from time to time in the Joint Operations Account. When amounts are
withdrawn from the Joint Operations Account, they shall be debited to each Development Party or Joint Entity (or, if applicable, an Entity Member in connection with a Farmout Sole Risk Entity Operation) based upon its share of the Permitted Expenses
or other amounts to be satisfied by the withdrawal. The Joint Development Operator may commingle other funds held by it, including Third Party Expense Funds, and the earnings thereon, in the Joint Operations Account. 

 

	 	(d)	The Joint Development Operator shall use amounts held in the Joint Operations Account for the benefit of each Development Party or Joint Entity (or, if applicable, an
Entity Member in connection with a Farmout Sole Risk Entity Operation) as follows: 

  

	 	(i)	As necessary to pay any Permitted Expenses for the then-current Calendar Month attributable to such Development Party or Joint Entity (or, if applicable, an Entity
Member in connection with a Farmout Sole Risk Entity Operation). 

  

	 	(ii)	Upon termination of this Agreement, any Development Party or Joint Entity (or, if applicable, an Entity Member in connection with a Farmout Sole Risk Entity Operation)
shall be entitled to request the release of all remaining funds held for its benefit in the Joint Operations Account. Each Development Party and Joint Entity (or, if applicable, an Entity Member in connection with a Farmout Sole Risk Entity
Operation) shall be entitled to that portion of the remaining funds in the Joint Operations Account it deposited or was deemed to have deposited, as applicable and as determined pursuant to Section 2.3(c). All distributions of funds shall be
made to the banks and accounts designated by such Development Party, Joint Entity or Entity Member, as applicable. 

  

 5 

 Any Development Party, Joint Entity or Entity Member, as applicable, providing an
instruction for release of funds pursuant to Section 2.3(d)(ii) shall provide a copy to each other Development Party and each Joint Entity simultaneously with providing such instruction to the Joint Development Operator, along with detailed,
itemized information showing how the amounts requested in the applicable instruction were calculated. 
  

	 	(e)	Each Participating Party shall have the right to audit the Joint Development Operator’s and its Affiliates’ accounts with respect to Development Operations in
which such Participating Party participates or is a non-consenting party on the same basis as is provided in Exhibit C to the Joint Development Operating Agreement. For the avoidance of doubt, this audit right shall extend to accounts maintained by
the Joint Development Operator and its Affiliates with respect to the Joint Operations Account and other accounts maintained by the Joint Development Operator and its Affiliates with respect to Development Operations. 

 

	 	(f)	At least five (5) days prior to the end of each Calendar Month, Joint Development Operator shall reconcile (i) the Permitted Expenses paid by the Joint
Development Operator since the date of the proceeding Monthly Statement against (ii) (A) any funds drawn from the Joint Operations Account on behalf of the Development Parties and/or the Joint Entities (and/or, if applicable, Entity Member
in connection with a Farmout Sole Risk Entity Operation) during such period and (B) any joint interest billings, cash calls and other invoices sent to the Development Parties and the Joint Entities (and/or, if applicable, Entity Member in
connection with a Farmout Sole Risk Entity Operation) with respect to such period and deliver to each Development Party and Joint Entity a statement setting forth such reconciliations (the “Monthly Statement”). Each Monthly
Statement shall also include (1) a calculation of the Additional Deposit each Development Party and its affiliated Entity Members are required to deposit into the Joint Operations Account on the first day of the upcoming Calendar Month (after
taking into account the reconciliation set forth above) and (2) a calculation of the Permitted Expenses for which each Development Party and/or Joint Entity (and/or, if applicable, Entity Member in connection with a Farmout Sole Risk Entity
Operation) is expected to be responsible for during the upcoming Calendar Month, which calculation shall be based upon the Development Work Program and applicable Annual Work Program and Budget, previously issued AFEs, and the actual cash calls or
statements issued pursuant to the Applicable Operating Agreements. 

 Section 2.4 Development
Costs. Except as set forth in Section 2.2, each (a) Development Party shall (i) bear and pay its proportionate share of all Development Costs incurred from and after the Closing Date in accordance with, and subject to, the
terms and conditions of this Agreement and the Applicable Operating Agreements, (ii) cause each of its affiliated Entity Members to bear and pay its proportionate share of all Capital Contributions to each Joint Entity with respect to
Development Costs incurred by such Joint Entity from and after the Closing Date in accordance with, and subject to, the terms and conditions of this Agreement and the applicable Joint Entity Agreements, and (iii) cause each of its Entity
Members participating in a Farmout Sole Risk Entity Operations to bear 
  

 6 

 
and pay such Entity Member’s proportionate share of all Development Costs with respect to Farmout Sole Risk Entity Operations incurred from and after the Closing Date in accordance with, and
subject to, the terms and conditions of this Agreement and the Applicable Operating Agreements, and (b) Joint Entity shall bear and pay its proportionate share of all Development Costs incurred from and after the Closing Date in accordance
with, and subject to, the terms and conditions of this Agreement and the Applicable Operating Agreements. 
 Section 2.5
Guarantees. Simultaneously with the execution and delivery of this Agreement, (a) BG Guarantor has executed and delivered the BG JDA Guaranty and (b) EXCO Guarantor has executed and delivered the EXCO JDA Guaranty. 

ARTICLE 3 

SCOPE; JDA INTERESTS AND PARTICIPATING INTERESTS; OPERATIONS 

Section 3.1 Scope. This Agreement shall govern the respective rights and obligations of the Development Parties with
respect to the funding, development and operation of the Subject Oil and Gas Assets. This Agreement does not govern: (a) the funding, development or operation of any equipment, fixtures or other assets located downstream of the outlet flange of
the relevant custody transfer meter (or, in the case of Hydrocarbon liquids, downstream of the outlet flange in the tanks) located on or in the vicinity of the Leases in the Subject Oil and Gas Assets; or (b) the marketing or sale of oil and
gas products from the Subject Oil and Gas Assets, all of which are outside the scope of this Agreement. 
 Section 3.2
JDA Interests and Participating Interests. 
  

	 	(a)	As of the Closing Date, the JDA Interests of the Development Parties are as follows: 

 

			
	 Party
	  	JDA Interest
(%)
	 BG
	  	50.000
	 EXCO
	  	50.000

  

	 	(b)	As of the Closing Date, the Participating Interests of the Development Parties and the Company are as follows: 

 

			
	 Party
	  	Participating
Interest (%)
	 BG
	  	49.7500
	 EXCO
	  	49.7500
	 Company
	  	00.5000

  

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	 	(c)	If a Development Party Transfers all or any undivided percentage of its Joint Development Interest pursuant to the provisions of this Agreement, the JDA Interests and
the Participating Interests of the Development Parties shall be, if necessary, revised accordingly. 

Section 3.3 Operating Agreements. 
  

	 	(a)	All Leases in the Appalachian Area: (i) in which only the Development Parties and/or Joint Entities hold interests as of the Closing Date and which are not subject
to a Third Party Operating Agreement; (ii) in which the Development Parties and/or a Joint Entity hereafter acquires interests, in which no third party holds a working interest and which are not subject to a Third Party Operating Agreement at
the time of such acquisition; or (iii) in which a Joint Entity that is hereafter acquired by the Development Parties holds interests as of the date that the applicable Joint Entity is acquired, in which no third party holds a working interest
and which are not subject to a Third Party Operating Agreement upon such date, shall be deemed to be subject to and governed by an operating agreement in the form attached hereto as Exhibit “B”, subject to any modifications required by
Section 3.4(g) (each a “Joint Development Operating Agreement”). 

  

	 	(b)	In addition, the Parties agree to use all commercially reasonable efforts to have the form attached hereto as Exhibit “B” adopted as the operative operating
agreement by all working interest owners for any Leases in the Appalachian Area in which (i) the Development Parties and/or a Joint Entity, and (ii) other Persons hold working interests, but which are not presently subject to a Third Party
Operating Agreement. 

  

	 	(c)	A separate Joint Development Operating Agreement shall be deemed to cover each drilling and production unit now or hereafter designated by the Joint Development
Operator or a Party Operator, or by order or rule of a Governmental Authority having jurisdiction in the Appalachian Area for which the Development Parties and/or a Joint Entity (and/or, if applicable, an Entity Member in connection with a Farmout
Sole Risk Entity Operation) holds the entirety of the working interest for such unit, provided that in the event any Person that is not a Development Party or a Joint Entity (and/or, if applicable, an Entity Member in connection with a Farmout Sole
Risk Entity Operation) is to acquire a working interest in any such unit or this Agreement terminates, the Development Parties and/or Joint Entity (and/or Entity Member in connection with a Farmout Sole Risk Entity Operation), as applicable, holding
a working interest in such unit, and Party Operator shall execute a Joint Development Operating Agreement for such unit (or, in the case of termination of this Agreement, all such units) prior to such acquisition or termination.

  

 8 

	 	(d)	There shall be no retroactive adjustment of expenses incurred or revenues received with respect to any separate Joint Development Operating Agreement which is deemed to
come into existence as a consequence of the designation of a new unit. 

  

	 	(e)	Each Joint Development Operating Agreement in which no third party participates and, as between the Parties only, each Joint Development Operating Agreement in which a
third party participates, and each Third Party Operating Agreement, shall be subject to the provisions of Exhibit “G” hereto unless and until the applicability of such provisions to the Subject Oil and Gas Assets covered by such operating
agreement terminates in accordance with the terms of Exhibit “G” or unless, pursuant to Section A.5 of the terms of Exhibit “G,” the Development Parties agree to the contrary with respect to a Joint Entity.

 Section 3.4 Appointment and Removal of Party Operator. 

 

	 	(a)	Subject to Section 3.4(g), the Company is hereby designated and agrees to serve as the initial operator under each Joint Development Operating Agreement and to
operate the Subject Oil and Gas Assets covered by such Joint Development Operating Agreement in accordance with the terms and conditions thereof, subject (in each case) to the terms of this Agreement. To the extent the Company serves as operator
under any Third Party Operating Agreement, the Company is hereby retained as and agrees to serve as operator under such Third Party Operating Agreement and to operate the Subject Oil and Gas Assets covered by such Third Party Operating Agreement in
accordance with the terms and conditions thereof, subject (in each case) to the terms of this Agreement. The designations set forth in this Section 3.4(a) are personal to the Company, as a consequence of the specific skills it holds with
respect to shale operations, and operations in the Marcellus shale in particular. For the avoidance of doubt, a Party Operator shall conduct each Sole Risk Development Operation and Sole Risk Entity Operation conducted pursuant to a Joint
Development Operating Agreement for which it is operator on behalf of all of the parties participating in such operation, unless otherwise agreed by such participating parties in accordance with the terms of such Joint Development Operating
Agreement, and provided that in the event of a Sole Risk Entity Operation that is undertaken by any Joint Entity on behalf of any Entity Member or Entity Members under Section 4.1(i)(ii), the Entity Member or Entity Members causing the Joint
Entity to conduct such operation shall make such determination on behalf of the Joint Entity. In the event an operator other than the Joint Development Operator is chosen for a Sole Risk Development Operation or Sole Risk Entity Operation, or the
Joint Development Operator is removed as Party Operator under any Applicable Operating Agreement pursuant to this Section 3.4, the payment procedures in Section 2.3 shall not apply with respect to such Sole Risk Development Operation or
Sole Risk Entity Operation or operations under such Applicable Operating Agreement, and the Participating Parties shall instead pay the applicable Development Costs (and, if applicable, Carried Costs) directly to such operator, in accordance with
the terms of the Applicable Operating Agreement. 

  

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	 	(b)	In addition to any provisions of a Joint Development Operating Agreement regarding the removal of the operator, a Party Operator may be removed as operator under any
Joint Development Operating Agreement, or if any Person that is not a Development Party or a Joint Entity (or, if applicable, an Entity Member in connection with a Farmout Sole Risk Entity Operation) is party to such Joint Development Operating
Agreement, then a Party Operator may be required to resign as operator under such Joint Development Operating Agreement by the affirmative vote of the Development Parties, the Joint Entities and the Entity Members that are parties to such Joint
Development Operating Agreement, other than such Party Operator and its Affiliates, holding a majority of the working interest held by such parties under the Joint Development Operating Agreement, for good cause, provided that in the case of removal
or a required resignation for good cause, such vote shall not be deemed effective until a written notice has been delivered to such Party Operator by another Development Party, Joint Entity or Entity Member that is a party to such Joint Development
Operating Agreement detailing the alleged default and such Party Operator has failed to cure the default within thirty (30) days from its receipt of the notice or, if the default concerns an operation then being conducted, within forty-eight
(48) hours of its receipt of the notice. 

 For purposes hereof, “good cause” shall mean not only
gross negligence and willful misconduct, but also a material failure or inability of a Party Operator to perform its obligations under the relevant Joint Development Operating Agreement. As used herein, “gross negligence” and “willful
misconduct” shall include material unlawful acts committed by an operator of which such operator had actual knowledge at the time in question. Notwithstanding anything to the contrary herein, if there is a dispute as to whether a condition
resulting in good cause to remove a Party Operator has occurred, or whether such condition has been cured, such Party Operator shall continue to serve and discharge its duties in such capacity until the dispute has been resolved in accordance with
Section 13.2. 
 Where a Joint Entity (other than the Joint Development Operator) is party to the Joint Development
Operating Agreement, the Entity Member or Entity Members other than the Party Operator and Affiliates of the Party Operator shall make the determination as to whether a notice is delivered by the Joint Entity, and as to the vote of the Joint Entity,
under this Section 3.4(b). 
  

	 	(c)	Upon the occurrence of a Material Event with respect to a Party Operator, it shall be deemed to have resigned as operator under each Joint Development Operating
Agreement for which it serves as operator, or if any Person that is not a Development Party or a Joint Entity (or, if applicable, an Entity Member in connection with a Farmout Sole Risk Entity Operation) is party to such Joint Development Operating
Agreement, then a Party Operator shall be required to resign as operator under such Joint Development Operating Agreement, without any action by the other Parties, except the selection of a successor pursuant to the terms and conditions of the
relevant Joint Development Operating Agreement. 

  

 10 

	 	(d)	Following any resignation or removal of the Company as operator under any Applicable Operating Agreement, if any other Joint Entity holds working interests in the
affected Leases, the Development Parties, any Joint Entities and any Entity Members that are party to the Applicable Operating Agreement shall vote for such other Joint Entity to serve as the successor operator under such Applicable Operating
Agreement. If no other Joint Entity holds working interests in the affected Leases, and the Participating Parties are able to cause the Company to transfer its working interest in the affected Leases to another Joint Entity without loss of rights
and to thereafter appoint the other Joint Entity as successor operator under the Applicable Operating Agreement, they shall do so, and the Company shall cooperate in such transfer. In the event the Participating Parties are unable to effectuate such
transfer and appointment pursuant to the preceding sentence, the Participating Parties will mutually agree upon a successor Party Operator for such Applicable Operating Agreement and the standards of operation applicable thereto.

  

	 	(e)	Any successor Party Operator must agree to adhere to the standards, principles, plan and management system, as amended from time to time, adopted by the Company
pursuant to Section 2.13 of the Joint Entity Agreement for the Company, and shall also perform the obligations and be subject to the requirements set forth in Sections 2.15, 2.16, and 2.17 and Article 3 of the Joint Entity Agreement for the
Company as of the date the Company ceases to be Party Operator, as if such obligations and requirements were set forth herein and specifically referenced such successor Party Operator, in each case to the extent relevant to duties performed by the
Party Operator and subject to any modifications thereafter approved by the Operating Committee. In addition, if the Company ceases to be Party Operator, the terms of Section 2.18 of the Joint Entity Agreement for the Company shall be deemed to
be incorporated herein by reference and shall apply as if the references to “Members” were references to “Development Parties”, the references to “Management Board” were references to “Operating Committee”,
the references to the “Company” were references to the “Party Operator” and references to the Company participating were references to all Development Parties participating. 

 

	 	(f)	Each Party Operator shall conduct all operations in accordance with and subject to the terms of Article 4, Section 3.3 and this Section 3.4, in addition to
any terms set forth in the relevant Applicable Operating Agreements. 

  

	 	(g)	 In the event that the Joint Entity or Joint Entities other than the Company would be the only parties to a Joint Development Operating Agreement, such
Joint Entity or Joint Entities shall appoint the Company as the operator with respect to such Joint Development Operating Agreement; provided that any such Joint Development Operating Agreement shall be modified to permit the operator thereunder to
not own any interests in the contract area covered thereby and such other modifications as reasonably necessary from the form set forth in Exhibit “B” hereto to account for the fact that the Company will not own any interests in such
contract area and any other applicable difference, such modifications to be 

  

 11 

	 	
agreed to by the Operating Committee working in good faith. In the event that (i) one or more Joint Entities other than the Company are parties to a Third Party Operating Agreement or a
Joint Development Operating Agreement to which a third party is a party, (ii) the Company is not a party to such Third Party Operating Agreement or Joint Development Operating Agreement, and (iii) a Joint Entity other than the Company is
the operator of such Third Party Operating Agreement or Joint Development Operating Agreement at the time that such Joint Entity is acquired or subsequently becomes operator under such agreement, then such Joint Entity shall remain operator and, if
permitted under the terms of the Applicable Operating Agreement, shall delegate operational responsibility to the Company as a Contract Operator through a contract operating agreement in a form to be approved by the Operating Committee working in
good faith (a “Contract Operating Agreement”). 

  

	 	(h)	In the event an Entity Member undertakes a Farmout Sole Risk Entity Operation, and the applicable Joint Entity has been operating the relevant Oil and Gas Assets, then
unless the Entity Member exercises its rights to replace the Party Operator for such Sole Risk Entity Operations pursuant to Section 3.4(a), the Entity Member, if permitted under the terms of the Applicable Operating Agreement, shall vote to
cause the Joint Entity to remain the operator of the relevant Oil and Gas Assets following the farmout, or, if that is not possible, if permitted under the terms of the Applicable Operating Agreement, such Entity Member shall seek to become operator
for such Farmout Sole Risk Entity Operation and delegate operational responsibility to the Company as a Contract Operator under a Contract Operating Agreement. 

Section 3.5 Joint Development Operator. 

 

	 	(a)	The Company is hereby designated and agrees to serve as the initial Joint Development Operator in accordance with the terms and conditions of this Agreement. The
designation set forth in this Section 3.5(a) is personal to the Company, as a consequence of the specific skills it holds with respect to shale operations, and operations in the Marcellus shale in particular. 

 

	 	(b)	Joint Development Operator may resign at any time by giving at least ninety (90) days’ prior written notice to the other Development Parties.

  

	 	(c)	Joint Development Operator may be removed by the affirmative vote of the Development Parties, other than Joint Development Operator and its Affiliates, holding a
majority of the JDA Interests held by such Development Parties, for good cause, provided that in the case of removal for good cause, such vote shall not be deemed effective until a written notice has been delivered to Joint Development Operator by
another Party detailing the alleged default and Joint Development Operator has failed to cure the default within thirty (30) days from its receipt of the notice or, if the default concerns an operation then being conducted, within forty-eight
(48) hours of its receipt of the notice. 

  

 12 

 For purposes hereof, “good cause” shall mean not only gross negligence or
willful misconduct but also a material failure or inability to perform its obligations under this Agreement. Notwithstanding anything to the contrary herein, if there is a dispute as to whether a condition resulting in good cause to remove Joint
Development Operator has occurred, or whether such condition has been cured, Joint Development Operator shall continue to serve and discharge its duties in such capacity until the dispute has been resolved in accordance with Section 13.2.

  

	 	(d)	Upon the occurrence of a Material Event with respect to Joint Development Operator, it shall be deemed to have resigned without any action by the other Parties, except
the selection of a successor pursuant to Section 3.5(e). If a petition for relief under the federal bankruptcy laws is filed by or against Joint Development Operator, and the removal of Joint Development Operator is prevented by the terms of
the Bankruptcy Code or actions of the federal bankruptcy court, then, to the extent allowed by Law, the Operating Committee shall serve as Joint Development Operator until Joint Development Operator has elected to reject or assume this Agreement
pursuant to the Bankruptcy Code, and an election to reject this Agreement by Joint Development Operator as a debtor in possession, or by a trustee in bankruptcy, shall be deemed a resignation as Joint Development Operator without any action by the
other Parties, except the selection of a successor. 

  

	 	(e)	Following any resignation or removal of the Company as Joint Development Operator, the Development Parties shall seek to appoint another Joint Entity to become
successor Joint Development Operator. Should the Development Parties fail to appoint another Joint Entity, a successor Joint Development Operator shall be selected by the Development Parties by the affirmative vote of Development Parties holding
collectively at least seventy-five percent (75%) of the JDA Interests held by Development Parties and eligible to vote. If Joint Development Operator has been removed for cause or is deemed to have resigned or votes only to succeed itself, it
and its Affiliates shall not be entitled to vote for the successor Joint Development Operator (but any non-Affiliate transferee of all or any part of the Joint Development Operator’s JDA Interest shall be entitled to vote for the successor
Joint Development Operator). The Joint Development Operator’s resignation or removal shall not become effective until 7:00 o’clock am on the first day of the Calendar Month following the expiration of ninety (90) days after the giving
of notice of resignation by the Joint Development Operator, the deemed resignation of the Joint Development Operator or action by the non-operators to remove Joint Development Operator, unless a successor Joint Development Operator has been selected
and assumes the duties of Joint Development Operator at an earlier date. 

  

	 	(f)	 Any successor Joint Development Operator must agree to adhere to the standards, principles, plan and management system, as amended from time to time,
adopted by the Company pursuant to Section 2.13 of the Joint Entity Agreement for the Company, and shall also perform the obligations and be subject to the 

 

 13 

	 	
requirements set forth in Sections 2.15, 2.16, 2.17 and Article 3 of the Joint Entity Agreement for the Company as of the date the Company ceases to be Joint Development Operator, as if such
obligations and requirements were set forth herein and specifically referenced such successor Joint Operator, in each case to the extent relevant to duties performed by the Joint Development Operator and subject to any modifications thereafter
approved by the Operating Committee. In addition, if the Company ceases to be Joint Development Operator, the terms of Section 2.18 of the Joint Entity Agreement for the Company shall be deemed to be incorporated herein by reference and shall
apply to the extent relevant to the Joint Development Operator rather than a Party Operator as if the references to “Members” were references to “Development Parties”, the references to “Management Board” were
references to “Operating Committee”, the references to the “Company” were references to the “Joint Development Operator” and references to the Company participating were references to all Development Parties
participating. 

  

	 	(g)	Subject to the terms and conditions of this Agreement, in addition to those certain other duties and responsibilities expressly set forth herein, Joint Development
Operator shall: 

  

	 	(i)	notwithstanding the terms of any Applicable Operating Agreement to the contrary, at the option of any Development Party or Joint Entity (or, if applicable, Entity
Member in connection with a Farmout Sole Risk Entity Operation), pay such party’s share of: (A) rentals, shut-in well payments and minimum royalties required to be paid to lessees under the Leases included in the applicable Subject Oil and
Gas Assets or Excluded Interests; (B) royalties, overriding royalties and other burdens required to be paid to lessees and holders of overriding royalties and other burdens on the Leases included in the applicable Subject Oil and Gas Assets or
Excluded Interests; and (C) severance and other production taxes attributable to the Subject Oil and Gas Assets or Excluded Interests; provided that each applicable Development Party shall pay or advance (and, as applicable, cause its
affiliated Entity Members to pay or advance) such amounts in accordance with Section 2.3; 

  

	 	(ii)	at the option of any Development Party or Joint Entity (or, if applicable, Entity Member in connection with a Farmout Sole Risk Entity Operation), pay such Development
Party’s, Joint Entity’s or Entity Member’s, as applicable, share of joint interest billings and cash calls (including, in the case of BG, any BG Member and any Joint Entity, Carried Costs) from third party operators relating to wells
in the Appalachian Area not operated by a Party Operator; provided that each applicable Development Party shall pay or advance (and, as applicable, cause its affiliated Entity Members to pay or advance) such amounts in accordance with
Section 2.3; 

  

 14 

	 	(iii)	notwithstanding the terms of any Applicable Operating Agreement to the contrary, at the option of any Development Party or Joint Entity (or, if applicable, Entity
Member in connection with a Farmout Sole Risk Entity Operation), at such Development Party’s, Joint Entity’s or Entity Member’s, as applicable, expense, secure any title curative matters and pooling amendments or agreements required
of such Development Party, Joint Entity or Entity Member, as applicable, under the Applicable Operating Agreement in connection with Leases or other rights to oil and gas included in the applicable Subject Oil and Gas Assets or Excluded Interests;
provided that each applicable Development Party shall pay or advance (and, as applicable, cause its affiliated Entity Members to pay or advance) such amounts in accordance with Section 2.3; and 

 

	 	(iv)	prepare and provide on a monthly basis for each Development Party or Joint Entity the following financial and operating data, reports and notices listed below; prepared
using the accrual basis of accounting and relating to such Development Party’s or Joint Entity’s interests in Development Operations and Subject Oil and Gas Assets (excluding Excluded Interests and any operations related thereto):

  

	 	(A)	revenues from oil and natural gas sales; 

  

	 	(B)	Operating Expenses; 

  

	 	(C)	Company Overhead and Technical Services Costs; 

  

	 	(D)	Development Costs, with separate breakout for Acquisition costs; 

  

	 	(E)	sufficient management operating information to support the items listed above (including volumes of produced and sold oil and natural gas); 

 

	 	(F)	a report comparing actual costs, expenses, production, revenues, and other operating information, to the extent included in any Annual Work Program and Budget, against
the amounts estimated by the Annual Work Program and Budget to have been incurred or realized to date; and 

  

	 	(G)	underlying financial statement records (at a minimum revenue, expenses and working capital balances, where such revenue, expenses and working capital relate to the
operational assets covered by this Agreement), whether through accounting system interfaces or otherwise, to facilitate each Development Party’s preparation of consolidated financial statements in line with applicable GAAP of the Development
Party (where applicable GAAP is the GAAP utilized by the Development Party). 

  

	 	(h)	The Parties authorize the Joint Development Operator to market all Hydrocarbons production from the Subject Oil and Gas Assets on behalf of each of them, provided that
any Development Party may revoke this authorization with respect to any or all of its interest in the Development Assets for sales starting at the end of the Calendar Month next following thirty (30) days after delivery of notice to the Joint
Development Operator. 

  

 15 

 Section 3.6 Technical Services. 

 

	 	(a)	The Joint Development Operator or any Party Operator may request Technical Services from the Development Parties in connection with Development Operations pursuant to
service contracts entered into with each Development Party. A Development Party providing such Technical Services shall be entitled to charge the Joint Development Operator or Party Operator for any Technical Services Costs incurred in connection
therewith in accordance with the terms of such services contracts. 

  

	 	(b)	All Technical Services Costs chargeable with respect to Development Operations shall be chargeable to the applicable Joint Development Operator or Party Operator on a
Calendar Month basis. 

  

	 	(c)	All employees and contract personnel of the Development Parties providing Technical Services to Development Operations that do not work solely on Development Operations
shall record their time, and the time sheets of such employees and contract personnel shall identify the time spent providing Technical Services to Development Operations, and only that portion of their time spent providing Technical Services to
Development Operations shall be chargeable as Technical Services Costs to the Development Parties and the Joint Entities. All such time sheets and related work records shall be subject to audit by the Company, and any Entity Member of the Company
(other than the Development Party providing such time sheets and work records and its Affiliates) shall be entitled to cause the Company to exercise such audit rights. Notwithstanding the foregoing, from time to time the Development Parties and the
Company may agree in writing upon an allocation of time for certain employees in lieu of requiring such employees to record their time. 

Section 3.7 Appalachian Overhead. 
  

	 	(a)	The Development Parties and Joint Entities shall not be charged overhead under Article III of Exhibit C to any Joint Development Operating Agreement or any similar
provision of any Third Party Operating Agreement in any Joint Development Operation where the Joint Development Operator or any Party Operator is the operator; in lieu of such charges, each Development Party shall pay its JDA Interest share of the
Appalachian Overhead as part of its Additional Deposit in accordance with Section 2.3. 

  

	 	(b)	 Where the Joint Development Operator is the operator of any Sole Risk Development Operation or Sole Risk Entity Operation, the Participating Parties in
any such Sole Risk Development Operation or Sole Risk Entity Operation shall pay all overhead amounts chargeable under Article III of Exhibit C to the Joint 

 

 16 

	 	
Development Operating Agreement (or any similar provision under any Third Party Operating Agreement) applicable to such Sole Risk Development Operation or Sole Risk Entity Operation in proportion
to their respective Working Interests in such Sole Risk Development Operation or Sole Risk Entity Operation, as applicable. 

  

	 	(c)	If any Technical Services Costs or overhead chargeable under Article III of Exhibit C to any Joint Development Operating Agreement or any similar provision of any Third
Party Operating Agreement are paid to the Joint Development Operator or any Party Operator by (i) any Participating Party in a Sole Risk Development Operation, (ii) any Development Party, Entity Member or Joint Entity undertaking a Sole
Risk Entity Operation, or (iii) any Person other than a Development Party, Entity Member or Joint Entity, then any such amount received by Joint Development Operator or a Party Operator in connection therewith will be shared by the Development
Parties in accordance with their respective JDA Interests (and Joint Development Operator or the Party Operator, as applicable, shall credit to each Development Party the proportionate share to which such Development Party is entitled with respect
to such amount received by such Joint Development Operator or Party Operator). 

 ARTICLE 4 

OPERATING COMMITTEE; DEVELOPMENT WORK PROGRAM; 

ANNUAL WORK PROGRAM AND BUDGETS 

Section 4.1 Operating Committee. 
  

	 	(a)	To facilitate the creation, approval and amendment of the Development Work Program and Annual Work Program and Budgets, and the approval of certain other matters set
forth herein, there is hereby established an Operating Committee composed of representatives of each Development Party. Each Development Party shall appoint one (1) representative and one (1) alternate representative to serve on the
Operating Committee, and shall appoint its initial representative and alternate representative by notice to the others on or prior to the first meeting of the Operating Committee. All actions of a Development Party taken with respect to the
Operating Committee shall be taken through its representative or alternate representative. 

  

	 	(b)	Each Development Party shall have the right to change its representative and alternate at any time by giving notice of such change to the other Parties.

  

	 	(c)	The Operating Committee shall have the powers and duties expressly ascribed to it in this Agreement. 

 

	 	(d)	 The representative of a Development Party, or in his absence his alternate representative, shall be authorized to represent and bind such Development
Party with respect to any matter which is within the powers of the Operating Committee and is properly brought before the Operating Committee. Each such 

 

 17 

	 	
representative shall have a vote equal to the JDA Interest of the Development Party that appointed such representative. Each alternate representative shall be entitled to attend all Operating
Committee meetings but shall have no vote at such meetings except in the absence of the representative for whom he is the alternate. In addition to the representative and alternate representative, each Development Party may also bring to any
Operating Committee meetings such advisors as it may deem appropriate. 

  

	 	(e)	Joint Development Operator may call a meeting of the Operating Committee by giving notice to the Development Parties at least fifteen (15) days in advance of such
meeting. Any Development Party may request a meeting of the Operating Committee by giving notice to the other Development Parties and Joint Development Operator, which notice shall include any proposals being proposed by such Development Party for
consideration at the meeting (including appropriate supporting information not previously distributed to the Development Parties). Upon receiving such request, Joint Development Operator shall call such meeting for a date not less than fifteen
(15) days nor more than twenty (20) days after receipt of the request. 

  

	 	(f)	The Operating Committee may establish such subcommittees as the Operating Committee may deem appropriate. The functions of such subcommittees shall be to serve in an
advisory capacity only. Each Development Party shall have the right to appoint a representative to each subcommittee. 

  

	 	(g)	Each notice of a meeting of the Operating Committee as provided by Joint Development Operator shall contain: (i) the date, time and location of the meeting;
(ii) an agenda of the matters and proposals to be considered and/or voted upon; and (iii) copies of all proposals to be considered at the meeting (including appropriate supporting information not previously distributed to the Development
Parties). A Development Party, by notice to the other Development Parties and Joint Development Operator, which notice shall include any additional proposals being proposed by such Development Party to be considered at the meeting (including
appropriate supporting information not previously distributed to the Development Parties), given not less than five (5) Business Days prior to a meeting, may add additional matters to the agenda for a meeting. On the request of a Development
Party, and with the unanimous consent of all Development Parties, the Operating Committee may consider at a meeting a proposal not contained in such meeting agenda. 

 

	 	(h)	There shall be at least one (1) but not more than three (3) meetings of the Operating Committee per each Calendar Quarter unless all Development Parties agree
in writing to the contrary. The restriction on number of meetings contained in this Section shall not restrict the number of proposals that may be submitted without a meeting pursuant to Section 4.1(m). Meetings of each subcommittee shall take
place as often as the Operating Committee shall determine. All meetings of the Operating Committee and each subcommittee shall be held in the offices of Joint Development Operator, or elsewhere as the Operating Committee or such subcommittee may
mutually decide. 

  

 18 

	 	(i)	Except as provided otherwise in this Section 4.1(i) and in Section 5.2, all decisions, approvals and other actions of the Operating Committee on all proposals
coming before it that are within its powers to approve or disapprove, shall be decided by the affirmative vote of Development Parties holding collectively at least seventy-five percent (75%) of the JDA Interests of the Development Parties
entitled to vote on such proposals, provided that: 

  

	 	(i)	any Development Operation proposed to the Operating Committee to be conducted for the account of the Development Parties and the Company that is not approved by the
Operating Committee and that may be proposed and conducted as a Sole Risk Development Operation under the terms of the Applicable Operating Agreement may be so proposed and conducted by any Development Party or Development Parties desiring to
participate in such Development Operation and holding a Participating Interest of at least twenty-five percent (25%); 

  

	 	(ii)	any Development Operation proposed to the Operating Committee to be conducted for the account of a Joint Entity that is not approved by the Operating Committee and that
may be proposed and conducted as a Sole Risk Entity Operation under the terms of the applicable Entity Agreement (and, if applicable, as a sole risk operation under the Applicable Operating Agreement) may be so proposed and conducted by any Entity
Member or Entity Members desiring to participate in such Development Operation and holding a Percentage Interest in such Joint Entity of at least twenty-five percent (25%) as follows: 

 

	 	(A)	 if a farmout by the Joint Entity of the applicable Subject Oil and Gas Interests underlying the proposed Development Operation to the participating
Entity Members or their affiliated Development Parties would not trigger any preferential purchase rights or material required consents to assignment that cannot be waived or otherwise obtained through the commercially reasonable efforts of the
Joint Entity, then the Sole Risk Entity Operation will be performed by a farmout to such participating Entity Member or Entity Members or their affiliated Development Parties of one hundred percent (100%) of the Joint Entity’s Working
Interest in the drilling unit agreed to by the Participating Parties for such Sole Risk Entity Operation (using the same principles as used for drilling units for Joint Development Operations), which farmout will (1) provide that the Joint
Entity’s entire interest in the applicable drilling unit shall automatically revert to it effective as of 7:00 am on the day following the day upon which the Participating Parties recover out of the proceeds of the sale of the non-participating
Entity Members’ indirect Percentage Interest 

  

 19 

	 	
share of the production to which the Joint Entity would have been entitled if it had not farmed-out, or market value thereof if such share is not sold (after deducting applicable ad valorem,
production, severance, and excise taxes, royalty, overriding royalty and other interests not excepted by the applicable Joint Entity Agreement payable out of or measured by the production from the applicable well, and costs of gathering,
compression, treating and marketing, in each case accruing with respect to such interest until it reverts) the total of (I) one hundred percent (100%) of the non-participating Entity Members’ indirect Percentage Interest share of the
Joint Entity’s share of the cost of any newly acquired surface equipment beyond the wellhead connections (including but not limited to stock tanks, separators, treaters, pumping equipment and piping), plus 100% of the non-participating Entity
Members’ indirect Percentage Interest share of the Joint Entity’s share of the cost of operation of the well commencing with first production and continuing until the Joint Entity’s relinquished interest shall revert to it, it being
agreed that the Joint Entity’s share of such costs and equipment shall be that interest that would have been charged to such Joint Entity, had it not farmed-out, and (II) five hundred percent (500%) of the non-participating Entity
Members’ indirect Percentage Interest share of (a) that portion of the costs and expenses of drilling, reworking, sidetracking, deepening, plugging back, testing, completing and recompleting, after deducting any cash contributions received
from third parties, and of (b) that portion of the cost of newly acquired equipment in the well (to and including the wellhead connections), (in each case) which would have been chargeable to the Joint Entity if it had not farmed-out and
(2) be subject to such other terms as are set forth in the applicable Joint Entity Agreement; or 

  

	 	(B)	if a farmout by the Joint Entity of the applicable Subject Oil and Gas Interests underlying the proposed Development Operation to the participating Entity Members or
their affiliated Development Parties, as applicable, would trigger a preferential purchase right or a material required consent to assignment that cannot be waived or otherwise obtained through the commercially reasonable efforts of the Joint
Entity, the Sole Risk Entity Operation will be performed by the Joint Entity on behalf of and for the sole risk and cost of such participating Entity Member or Entity Members on the terms set forth in the applicable Joint Entity Agreement; and

 any Joint Entity whose Entity Members are contemplating a Sole Risk Entity Operation shall use its commercially
reasonable efforts to obtain or have waived all material required consents to assignment affecting the Subject Oil and Gas Assets underlying such proposed Sole Risk Entity Operation; and 

 

 20 

	 	(iii)	any Area-Wide Operation proposed to the Operating Committee which is not approved by the Operating Committee may be conducted by those Development Parties desiring to
participate in such Development Operation and holding a JDA Interest of at least twenty-five percent (25%) at their sole risk and expense. 

Notwithstanding the preceding, any proposal to reduce the quantity of work to be conducted under the Development Work Program or any
Annual Work Program and Budget (to the extent relating to any Development Operations included in any Development Work Program) with respect to any period prior to the Carry Termination Event shall also require the affirmative vote of EXCO. For the
avoidance of doubt, the preceding sentence shall not prevent any Development Party or Development Parties from voting against an AFE in accordance with Section 4.6. 

 

	 	(j)	With respect to meetings of the Operating Committee and each subcommittee, Joint Development Operator’s duties shall include: (i) timely preparation and
distribution of the agenda; (ii) organization and conduct of the meeting; and (iii) preparation of a written record or minutes of each meeting. 

  

	 	(k)	EXCO shall have the right to appoint the chairman of the Operating Committee and each subcommittee for an initial term ending at 11:59 pm on December 31, 2011, and
each other Development Party holding at least a twenty-five percent (25%) JDA Interest shall in turn have a right to appoint such chairman and the chairman of each subcommittee for a subsequent one year term, in rotation, until each have
appointed such positions once, and the annual rotation shall thereafter continue, beginning again with EXCO. For the avoidance of doubt, the chairman shall have no special casting or deciding vote on any matter presented to the Operating
Committee. The chairman of the Operating Committee shall appoint a secretary who shall make a record of each proposal voted on and the results of such voting at each Operating Committee meeting. Each Development Party shall sign and be
provided a copy of such record at the end of such meeting, and it shall be considered the final record of the decisions of the Operating Committee. 

  

	 	(l)	The secretary shall provide each Development Party with a copy of the minutes of each Operating Committee meeting within fifteen (15) Business Days after the end
of the meeting. Each Development Party shall have fifteen (15) days after receipt of such minutes to give notice to the secretary of any objections to the minutes. A failure to give notice specifying objection to such minutes within said
fifteen (15) day period shall be deemed to be approval of such minutes. In any event, the votes recorded under Section 4.1(j) shall take precedence over the minutes described above. 

 

	 	(m)	 In lieu of a meeting, any Development Party may submit any proposal that is within the Operating Committee’s powers to approve or disapprove to
the Operating Committee for a vote by notice. The proposing Development Party or Development Parties shall notify Joint Development Operator with written 

 

 21 

	 	
materials describing the proposal and Joint Development Operator shall provide a copy of such proposal to each Development Party. Any such proposal by a proposing Development Party shall include
with such proposal adequate documentation to enable the other Development Parties to make a decision. Each Development Party (including the proposing Development Party) shall communicate its vote on the proposal by notice to Joint Development
Operator and the other Development Parties within fifteen (15) days after receipt of the proposal from the Joint Development Operator, unless such proposal, together with any other increases to an approved Annual Work Program and Budget for a
Calendar Year, if accepted, would result in aggregate spending pursuant to such Annual Work Program and Budget of more than ten percent (10%) in excess of the original amount of the Annual Work Program and Budget approved pursuant to
Section 4.4 (or, in the case of the Annual Work Program and Budget for Calendar Year 2010, attached hereto as Exhibit “E”) or, once amended to increase the amount of the Annual Work Program and Budget ten percent (10%) above the
then existing amount in accordance with Section 4.4(g), the amended amount of the Annual Work Program and Budget, in which case each Development Party (including the proposing Development Party) shall communicate its vote on the proposal by
notice to Joint Development Operator and the other Development Parties within sixty (60) days after receipt of the proposal from the Joint Development Operator. Any Development Party failing to communicate its vote in a timely manner shall be
deemed to have voted against such proposal. Within five (5) Business Days following the expiration of the relevant time period, Joint Development Operator shall give each Development Party a confirmation notice stating the tabulation and
results of the vote on such proposal. 

  

	 	(n)	All decisions taken by the Operating Committee pursuant to this Section 4.1 shall be conclusive and binding on all Parties and, where applicable, any Joint
Entities. 

  

	 	(o)	All notices and communications required or permitted to be given under this Article 4 to the Development Parties or a Party Operator or the members of the Operating
Committee shall be sufficient in all respects if given in writing and delivered personally, or sent by bonded overnight courier, or mailed by U.S. Express Mail or by certified or registered United States Mail with all postage fully prepaid, or sent
by telex, facsimile transmission or by pdf via email (provided any such telex, facsimile or email transmission is confirmed either orally or by written confirmation), or sent by pdf via email, addressed to the appropriate Person at the address for
such Person shown below or at such other address as such Party shall have theretofore designated by written notice delivered to the Party giving such notice: 

  

 22 

 If to EXCO or any EXCO Member: 

 

			
	EXCO Holding (PA), Inc.
	12377 Merit Drive, Suite 1700
	Dallas, Texas 75251
	Attention:	  	Harold L. Hickey
	Telephone:	  	(214) 368-2084
	Fax:	  	(214) 368-8754
	E-mail:	  	hhickey@excoresources.com
	
	With copies to:
	
	EXCO Resources, Inc.
	12377 Merit Drive, Suite 1700
	Dallas, Texas 75251
	Attention:	  	Stephen F. Smith
	Telephone:	  	(214) 368-2084
	Fax:	  	(214) 706-3409
	Email:	  	ssmith@excoresources.com

 If to BG
or any BG Member: 
  

			
	BG US Production Company, LLC
	5444 Westheimer, Suite 1200
	Houston, Texas 77056
	Attention:	  	Jon Harris
	Telephone:	  	(713) 599-4000
	Fax:	  	(713) 599-4250
	E-mail:	  	Jon.Harris@bg-group.com
	
	BG US Production Company, LLC
	5444 Westheimer, Suite 1200
	Houston, Texas 77056
	Attention:	  	Bill Way
	Telephone:	  	(713) 599-4000
	Fax:	  	(713) 599-4250
	E-mail:	  	Bill.Way@bg-group.com

  

 23 

 If to the Company or any Joint Entity: 

 

			
	EXCO Resources (PA), LLC
	3000 Ericsson Dr., Suite 200
	Warrendale, Pennsylvania 15086
	Attention:	  	President and General Manager
	Telephone:	  	(724) 720-2500
	Fax:	  	(724) 720-2505
	
	With a copy to:
		
	Attention:	  	Vice President, Legal
	Telephone:	  	(724) 720-2500
	Fax:	  	(724) 720-2505

 Any notice given in
accordance herewith shall be deemed to have been given when delivered to the addressee in person, or by courier, or transmitted by facsimile transmission or email during normal business hours, or upon actual receipt by the addressee after such
notice has either been delivered to an overnight courier or deposited in the United States Mail, as the case may be. The Parties may change the address, telephone numbers, facsimile numbers and email addresses to which such communications are to be
addressed by giving written notice to the other Parties in the manner provided in this Section 4.1(o). 

Section 4.2 Development Work Program. 
  

	 	(a)	The Operating Committee shall adopt, and modify from time to time, a multi-year work program for Development Operations (the “Development Work
Program”) as follows: 

  

	 	(i)	The Operating Committee shall approve, within ninety (90) days after the Closing Date, a work program for Development Operations through Calendar Year 2013,
similar in form to the draft attached hereto as Exhibit “D”. Such work program shall constitute the Development Work Program applicable through Calendar Year 2013 except as otherwise revised, amended or modified by the Operating Committee.

  

	 	(ii)	 On or before August 15 of each Calendar Year, commencing in Calendar Year 2012, Joint Development Operator shall prepare and submit to the
Operating Committee a revised Development Work Program setting forth the Development Operations to be carried out during the following two Calendar Years. Such proposed Development Work Program shall automatically include any Development Operations
which were approved for such period as part of the prior Development Work Program unless the Operating Committee determines to the contrary. Within sixty (60) days after distribution of the proposed Development Work Program (or such later date
as may agreed by the Operating Committee), the Operating 

  

 24 

	 	
Committee shall meet to consider, modify (if necessary) and approve or reject the proposed Development Work Program. If the Operating Committee does not approve any such Development Work Program
on or prior to the first day of the following Calendar Year (for purposes of this Section 4.2(a)(ii), the “current Calendar Year”), then the Development Work Program for the then-current Calendar Year shall be the Development
Work Program, if any, approved for the then-current Calendar Year in the preceding Calendar Year. 

  

	 	(b)	Except as otherwise agreed in writing by the Operating Committee, the Annual Work Program and Budget for each Calendar Year shall contain not less than those
Development Operations to be performed during such Calendar Year as set forth in the Development Work Program. 

Section 4.3 Initial Annual Work Plan and Budgets. The Annual Work Program and Budget for the remainder of Calendar
Year 2010 is hereby approved by the Operating Committee and is attached hereto as Exhibit “E”. 
 Section 4.4
Subsequent Annual Work Plan and Budgets. For each Calendar Year during the term of this Agreement commencing with Calendar Year 2011, each Annual Work Program and Budget shall be adopted as follows: 

 

	 	(a)	On or before August 15 in the Calendar Year immediately preceding the relevant Calendar Year, Joint Development Operator shall prepare and submit to the Operating
Committee a proposed Annual Work Program and Budget for such applicable Calendar Year. Each such proposed Annual Work Program and Budget shall contain at least the following: 

 

	 	(i)	all Development Operations that are to be conducted during such Calendar Year pursuant to the Development Work Program, except with the approval of the Operating
Committee to the contrary; 

  

	 	(ii)	all lease maintenance costs and expenditures required under the terms of existing Leases or existing third party contracts held by Joint Development Operator for the
benefit of Joint Development Operations (including each Development Party’s and Joint Entity’s share thereof), except with the approval of the Operating Committee to the contrary; 

 

	 	(iii)	subject to Section 4.4(c) below, costs for proposed joint Acquisitions on behalf of the Development Parties and Joint Entities during the Calendar Year, subject to
the other terms hereof; 

  

	 	(iv)	an itemized estimate of the Appalachian Overhead and Operating Expenses for such Calendar Year (including each Development Party’s and Joint Entity’s share
thereof); 

  

 25 

	 	(v)	itemized estimates of the Development Costs (including each Development Party’s and Joint Entity’s share thereof) for Joint Development Operations covered by
the proposed Annual Work Program and Budget by budget category (including separate categories for Required Asset Upgrades and Standards Asset Upgrades) and allocated between Shallow Rights, Deep Rights, Outside AMI Rights and Area-Wide Operations,
containing sufficient detail (to the extent available) to afford the ready identification of the nature, scope and duration of the activity in question; 

  

	 	(vi)	the number of wells to be drilled as part of the Joint Development Operations in each of the Shallow Rights, the Deep Rights and the Outside AMI Rights during such
Calendar Year, the proposed locations of such wells (to the extent reasonably ascertainable at the time such Annual Work Program and Budget is proposed), and the estimated Development Costs (including each Development Party’s and Joint
Entity’s share thereof) associated therewith; 

  

	 	(vii)	estimates of the schedule pursuant to which the Development Parties’ and Joint Entities’ share of Development Costs for Joint Development Operations included
in the Annual Work Program and Budget are anticipated to be incurred by the Development Parties and the Joint Entities, as applicable; and 

  

	 	(viii)	any other information requested in writing by a Development Party that can reasonably be provided by the Joint Development Operator. 

 

	 	(b)	Itemized expenditures in an Annual Work Program and Budget may extend over more than one Calendar Year because such itemized expenditures represent activities or
operations that require commitments in excess of one Calendar Year. Once itemized expenditures are approved, Joint Development Operator shall not be required to resubmit them for approval of the Operating Committee on an annual or other periodic
basis, but instead all such items shall be automatically included in future Annual Work Program and Budgets as items which have already been approved. 

  

	 	(c)	 Itemized expenditures in an Annual Work Program and Budget may include acquisition costs for proposed joint Acquisitions of (i) a direct interest
in any Undeveloped Lease in the AMI Area and (ii) other Oil and Gas Assets in which the Development Parties and/or a Joint Entity already own a Working Interest, on behalf of the Development Parties (and, if specifically approved by the
Operating Committee, on behalf of a Joint Entity or Joint Entities) during the Calendar Year, provided that no such Acquisition (or series of related Acquisitions) may exceed five million dollars ($5,000,000) without the separate prior approval of
each Development Party. To facilitate such Acquisitions, each Development Party and Joint Entity shall execute and deliver to Joint Development Operator a power of attorney substantially in the form of Exhibit “J” authorizing Joint
Development Operator to make such Development Party’s and/or Joint Entity’s Working Interest share of such Acquisitions on its behalf in its name, provided that Joint

  

 26 

	 	
Development Operator shall not be entitled to make representations (other than existence, qualification, power, due authorization, execution and delivery, enforceability and no conflicts
representations) on behalf of any such Development Party and/or Joint Entity, or to grant any indemnity, or to incur any financial obligation in excess of such Development Party’s and/or Joint Entity’s Working Interest share of such five
million dollar ($5,000,000) limit, on behalf of any such Development Party and/or Joint Entity. For the avoidance of doubt, the Company shall also participate, according to its Working Interest share, in any such Acquisition of any Undeveloped Lease
or Oil and Gas Assets by all of the Development Parties. No such power of attorney shall be transferable to any successor or assign of the Joint Development Operator at the time issued and each such power of attorney shall automatically be revoked
should the Joint Development Operator cease to be a Joint Entity. 

  

	 	(d)	The line item in the Annual Work Program and Budget for Standards Assets Upgrades shall automatically include any Standards Asset Upgrades deemed adopted for the
applicable Calendar Year under Section 2.18 of the Joint Entity Agreement for the Company. 

  

	 	(e)	 Joint Development Operator shall regularly consult with the Operating Committee during the preparation of each proposed Annual Work Program and Budget.
Following receipt of Joint Development Operator’s proposed Annual Work Program and Budget, each Development Party shall furnish to Joint Development Operator and the other Development Parties any comments, suggestions or proposed amendments it
may have respecting the proposed Annual Work Program and Budget as soon as may be reasonably practicable, and Joint Development Operator shall consider and discuss such comments, suggestions and proposed amendments with the Operating Committee.
Unless otherwise extended by the Operating Committee, within sixty (60) days after distribution of the proposed Annual Work Program and Budget for a Calendar Year, the Operating Committee and Joint Development Operator shall meet to consider,
modify (if necessary) and approve or reject the proposed Annual Work Program and Budget. Subject to Section 4.4(f), approval of an Annual Work Program and Budget shall require the approval of the Operating Committee. Inclusion of an operation
in an approved Annual Work Program and Budget or an approved amendment thereof shall, subject to the terms of Section 4.6: (i) bind all applicable Development Parties and Joint Entities to participate in such operation, and no Development
Party or Joint Entity shall have the right to make any nonconsent election under an Applicable Operating Agreement with respect to such operation; and (ii) authorize Joint Development Operator or the applicable Party Operator to conduct such
operation for the account of all of the applicable Development Parties and Joint Entities under the relevant Applicable Operating Agreement (provided that, to the extent any third parties are party to such Applicable Operating Agreement, Joint
Development Operator shall propose such operation to such third parties in accordance with the terms of such Applicable Operating Agreement, though, for the avoidance of doubt, Joint Development Operator need not re-propose such operation to the
Development Parties and Joint 

  

 27 

	 	
Entities), subject to the budgetary provisions of such Annual Work Program and Budget and Sections 4.4(j), 4.4(k) and 4.7, without further authorization from the Operating Committee. Each
Development Party and Joint Entity agrees to provide such notices, make such elections and take such actions as may reasonably be required under any Applicable Operating Agreement to implement this provision. 

 

	 	(f)	In the event that an Annual Work Program and Budget is not approved on or prior to the first day of the Calendar Year to which such Annual Work Program and Budget
pertains (for purposes of this Section 4.4(f), the “relevant Calendar Year”), the Operating Committee shall be deemed to have approved an Annual Work Program and Budget for such relevant Calendar Year that includes the
following: (i) the Development Operations scheduled to be performed during the relevant Calendar Year as set forth in the Development Work Program, if any, and associated Development Costs reasonably required to implement such Development
Operations, but excluding costs for any Acquisitions; (ii) Operating Expenses equal to the product of the amount of Operating Expenses approved in the preceding Calendar Year’s Annual Work Program and Budget and the Operating Expense
Multiplier for the relevant Calendar Year; (iii) Appalachian Overhead equal to the amount of Appalachian Overhead approved in the preceding Calendar Year’s Annual Work Program and Budget, with such adjustments as are necessary to reflect
previously approved changes in staffing or facilities costs of the Company or Technical Services to be performed that will be implemented during the Calendar Year in question; (iv) those multi-year expenditures previously approved by the
Development Parties pursuant to Section 4.4(b) that are attributable to the relevant Calendar Year; (v) existing payment commitments to third parties under Leases and contracts binding with respect to the Subject Oil and Gas Assets; and
(vi) taxes payable with respect to the Subject Oil and Gas Assets by any operator under the terms of any Applicable Operating Agreement. 

  

	 	(g)	Any Development Party may propose to amend the Development Work Program or an Annual Work Program and Budget by notice to the Operating Committee and Joint Development
Operator. Approval of any such amendment shall require the approval of the Operating Committee. Notwithstanding any provision of Section 4.1 to the contrary, each Development Party shall have sixty (60) days to consider any proposed
amendment that would increase the estimated costs of the Development Work Program for any Calendar Year or any Annual Work Program and Budget by more than ten percent (10%). To the extent that such amendment is approved by the Operating Committee,
the Development Work Program and relevant Annual Work Program and Budget shall, subject to any required approvals under any Applicable Operating Agreement, be deemed amended accordingly, provided that any such amendment shall not invalidate any
commitment or expenditure already made by an operator under an Applicable Operating Agreement in accordance with any previous authorization given pursuant hereto. In addition to any amendment adopted as provided above, the Annual Work Program and
Budget shall automatically be amended to include any Required Asset Upgrade that is deemed approved by the Company under the terms of the Company’s Joint Entity Agreement, without the need for Operating Committee approval.

  

 28 

	 	(h)	Notwithstanding anything to the contrary in this Section 4.4, any Development Party or Development Parties holding at least a twenty-five percent (25%) JDA
Interest may propose to the Operating Committee Development Operations that are not included in the Development Work Program or a then-current approved Annual Work Program and Budget (a “Non-Budgeted Operation”). Any such
Non-Budgeted Operation which receives sufficient votes in the Operating Committee to be adopted as an amendment to the Annual Work Program and Budget shall automatically be added to the Development Work Program and the applicable approved Annual
Work Program and Budget(s) and shall cease to be a Non-Budgeted Operation. Any such Non-Budgeted Operation which receives insufficient votes in the Operating Committee (i) that may be undertaken as a Sole Risk Development Operation under the
terms of the relevant Applicable Operating Agreement, (ii) that may be undertaken as a Sole Risk Entity Operation under the terms of the applicable Joint Entity Agreement (and, if applicable, as sole risk operation under the Applicable
Operating Agreement) or (iii) that is an Area-Wide Operation may be proposed and conducted as a Sole Risk Development Operation or a Sole Risk Entity Operation, as applicable. Notwithstanding the preceding, if a Development Program is approved
through Calendar Year 2013 pursuant to Section 4.2(a)(i), then until December 31, 2013, no Non-Budgeted Operation may be performed as a Sole Risk Development Operation or Sole Risk Entity Operation for the benefit of a Development Party or
Entity Member if the sum of the estimated costs of conducting such Non-Budgeted Operation for the account of such Development Party or Entity Member, together with costs incurred or to be incurred by or for the account of such Development Party or
Entity Member and its Affiliates with respect to other Sole Risk Development Operations and Sole Risk Entity Operations performed or to be performed in such Calendar Year, together with all Joint Development Operations performed or to be performed
in such Calendar Year, exceeds one hundred twenty percent (120%) of the total amount of the approved Annual Work Program and Budget for such Calendar Year. 

 

	 	(i)	 Any Development Operation proposed by a third party pursuant to an Applicable Operating Agreement shall be subject to the terms and conditions of such
Applicable Operating Agreement and shall be submitted by the Joint Development Operator for a vote of the Operating Committee prior to the response deadline in the Applicable Operating Agreement. Any such Development Operation which receives
sufficient votes in the Operating Committee to be adopted as an amendment to the Annual Work Program and Budget shall automatically be added to the Development Work Program and the applicable approved Annual Work Program and Budget(s). Any such
Development Operation related to Development Assets which receives insufficient votes in the Operating Committee that may be undertaken as a Sole Risk Development Operation under the terms of the relevant Applicable

  

 29 

	 	
Operating Agreement may be so proposed and conducted. Any such Development Operation related to Joint Entity Assets which receives insufficient votes of the Operating Committee that may be
undertaken as a Sole Risk Entity Operation under the terms of the relevant Joint Entity Agreement (and, if applicable, as sole risk operation under the Applicable Operating Agreement) may be so proposed and conducted. 

 

	 	(j)	Approval by the Operating Committee of an Annual Work Program and Budget shall constitute the Operating Committee’s deemed approval for any Party Operator to
expend up to ten percent (10%) in excess of the authorized amount applicable to its operations within each Annual Work Program and Budget category, not to exceed in the aggregate ten percent (10%) of the aggregate amount applicable to its
operations in such Annual Work Program and Budget, less, in each case, any amounts included as line items for contingencies and overruns with respect to such operations in such category or Annual Work Program and Budget. Each Party Operator
shall promptly notify the Operating Committee of any expenditure made by it in the exercise of its rights pursuant to this Section 4.4(j). The ten percent (10%) deemed approval levels set forth in this Section 4.4(j) shall be
calculated with respect to the original amount of an Annual Work Program and Budget or, once amended, the amended amount of the Annual Work Program and Budget, provided that no expenditures incurred pursuant to Section 4.4(k) shall be deemed to
be included in an approved Annual Work Program and Budget for purposes of calculating the ten percent (10%) deemed approvals pursuant to this Section 4.4(j), nor shall any such expenditures be considered to be amounts expended in excess of
the authorized amount of any Annual Work Program and Budget for purposes of calculating the ten percent (10%) deemed approval levels. 

  

	 	(k)	Notwithstanding anything to the contrary in this Agreement, any Party Operator is expressly authorized to make expenditures and incur liabilities without prior
authorization or approval when necessary or advisable, in such Party Operator’s good faith judgment, to deal with emergencies, including well blowouts, fires, oil spills, or any other similar event, which may endanger property, lives, or the
environment. Each Party Operator shall as soon as practicable report to the Development Parties and any affected Joint Entity the nature of any such emergency which arises, the measures it intends to take in respect of such emergency and the
estimated related expenditures. 

  

	 	(l)	To the extent reasonably within the control of any Party Operator or the other Development Parties or Joint Entities conducting or participating in any Joint
Development Operation, the Joint Development Operation shall be conducted at the time prescribed in the applicable Annual Work Program and Budget. 

  

	 	(m)	For the avoidance of doubt, any reference in this Agreement to an approved Annual Work Program and Budget shall include an Annual Work Program and Budget that is deemed
to have been approved by the Operating Committee, and shall incorporate all approved amendments thereto and all modifications to Annual Work Program and Budgets described herein that require no action on the part of the Parties.

  

 30 

 Section 4.5 Statements of Estimated Expenditures. Not later than twenty
(20) days prior to the commencement of each Calendar Quarter during the term of this Agreement, Joint Development Operator shall provide the Development Parties and Joint Entities a statement of the estimated Development Costs to be incurred in
such Calendar Quarter pursuant to this Agreement, including Development Costs associated with Joint Development Operations. Such statement shall be for informational purposes only, and, except as otherwise provided in Section 4.6, no approval
of the Operating Committee shall be required for any of the Development Costs identified therein to the extent such Development Costs are included in an approved Annual Work Program and Budget, or are covered by Section 4.4(j). 

Section 4.6 AFEs. 
  

	 	(a)	Prior to: (i) spudding any well as a Joint Development Operation, (ii) making any material expenditures or incurring any material commitments for work on any
Wellbore Operation to be conducted as a Joint Development Operation that is estimated to cost in excess of five hundred thousand dollars ($500,000), or (iii) making any material expenditures or incurring any material commitments for work on any
Area-Wide Operation to be conducted as a Joint Development Operation that is estimated to cost in excess of one million dollars ($1,000,000), the Party Operator or Joint Development Operator, as the case may be, shall submit for the approval of the
Operating Committee an AFE. Where the necessary information is available, such AFE may be submitted and approved for designated wells and Wellbore Operations as part of the proposed Annual Work Program and Budget for a Calendar Year, in which case
no separate subsequent AFE shall be required. 

  

	 	(b)	Each Development Party shall communicate an Operating Committee vote to approve or reject the AFE within fifteen (15) days following receipt of the AFE (or
forty-eight (48) hours (exclusive of Saturday, Sunday and legal holidays) in the event of a Wellbore Operation when a drilling rig is on location). Any Development Party failing to communicate its vote within the applicable time period shall be
deemed to have voted against the AFE. 

  

	 	(c)	 If the Operating Committee approves an AFE for the operation within the applicable period, the Party Operator or Joint Development Operator shall be
authorized to conduct the operation under the terms of this Agreement. If the Operating Committee fails to approve an AFE for the operation within the applicable time period, the operation shall be deemed rejected. The Party Operator or Joint
Development Operator shall promptly notify the Development Parties and Joint Entities if the operation has been rejected, and, subject to Section 4.4(h), (i) with respect to a Development Operation related to Development Assets that may be
undertaken as a Sole Risk Development Operation under the terms of the relevant Applicable Operating Agreement, any Development Party may thereafter conduct the operation as a Sole Risk Development Operation

  

 31 

	 	
under the terms of the Applicable Operating Agreement, and (ii), with respect to a Development Operation related to Joint Entity Assets that may be undertaken as a Sole Risk Entity Operation
under the terms of the applicable Joint Entity Agreement (and, if applicable, as sole risk operation under the Applicable Operating Agreement), the applicable Entity Member(s) or their affiliated Development Parties may thereafter conduct the
operation as a Sole Risk Entity Operation under the terms of the applicable Joint Entity Agreement. 

  

	 	(d)	For purposes of any Applicable Operating Agreement that contains a casing point election, approval of an AFE that includes the costs associated with completing a well
shall be deemed to be an election to participate in the completion of such well pursuant to the relevant provisions of such Applicable Operating Agreement. 

 

	 	(e)	When an operation is approved for greater or lesser amounts than those provided for in the applicable line items of the approved Annual Work Program and Budget, the
Annual Work Program and Budget shall be deemed to be revised and amended accordingly. 

 Section 4.7
Area-Wide Operations. 
  

	 	(a)	Joint Development Operator shall conduct Area-Wide Operations on behalf of the Development Parties (and, if specifically approved by the Operating Committee, a Joint
Entity or Joint Entities) pursuant to the applicable approved Annual Work Program and Budget. 

  

	 	(b)	All costs and liabilities incurred in Area-Wide Operations shall be borne and paid, and all assets acquired in such operations owned, by the Participating Parties in
proportion to the Participating Interests held by such Participating Parties and such amounts shall be billed to or advanced by, as the case may be, such Participating Party in accordance with Section 2.3. 

 

	 	(c)	Where a Joint Entity is not a participant in Area Wide Operations, the Joint Entity Assets held by that Joint Entity shall nonetheless be subject to any Area-Wide
Operation that is approved by the Development Parties in accordance with this Agreement and any such Area-Wide Operation may be conducted on such Joint Entity Assets without the need for any consent by any applicable Joint Entity, subject to any
required third party consents and applicable Law. 

 Section 4.8 Third Party Operators. For the
avoidance of doubt, the Parties agree that the Development Work Program, Annual Work Program and Budget and other terms of Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7 and 4.9 shall, though binding as between the Development Parties and the Joint
Entities, not be binding upon any operator or non-operator that is not a Development Party or a Joint Entity. 

Section 4.9 Participation by the Company. Except with respect to a Farmout Sole Risk Entity Operation, if a
Development Party or Entity Member has voted in favor of any Development Operation in which the Company or other Joint Entity serving as Party Operator has a right to participate under the terms of the Applicable Operating Agreement, then the
Company or such Joint Entity, as applicable, shall be deemed to have voted in favor of, and will participate in, such Development Operation. 
  

 32 

 ARTICLE 5 

DEFAULT 

Section 5.1 Default. 
  

	 	(a)	Any Development Party and/or any of its affiliated Entity Members or other Affiliates that fails to pay in full when due any amounts owed and undisputed under the terms
of this Agreement or any Associated Agreement (including any amount included in an approved Annual Work Program and Budget), which failure is not cured within fifteen (15) days of such Development Party’s receipt of a Default Notice, shall
be in default under this Agreement and all Associated Agreements, and shall be referred to herein as a “Defaulting Party”. Each Affiliate of a Defaulting Party that is a Development Party, an Entity Member or a party to any other
Associated Agreement shall also be a Defaulting Party. Joint Development Operator shall (or any Affected Party may) give notice of such default (a “Default Notice”) to the Defaulting Party(ies) and each of the other non-Defaulting
Parties. Any Defaulting Party shall be considered in default for all purposes under all applicable Associated Agreements. 

  

	 	(b)	For purposes of this Article 5, “Default Period” means the period beginning fifteen (15) days from the date of receipt of a Default Notice by a
Defaulting Party and its Credit Facility Secured Parties, if such Defaulting Party remains in default under Section 5.1(a), and ending when all of the Defaulting Party’s defaults have been remedied in full. 

 

	 	(c)	All amounts in default and not paid when due under this Agreement or any Associated Agreement shall bear interest at the Default Interest Rate from the due date to the
date of payment. 

  

	 	(d)	For the avoidance of doubt (i) EXCO shall not be in default with respect to the payment of its share of Development Costs or any EXCO Member’s Percentage
Interest share of Capital Contributions to a Joint Entity to the extent that BG or any BG Member is responsible for such Development Costs or Capital Contributions as required by Section 2.2 and BG fails to pay, or cause a BG Member to pay, as
applicable, its Carried Costs when due, and (ii) in the event BG fails to pay, or cause a BG Member to pay, as applicable, its Carried Costs when due and BG and/or such BG Member has not exercised its rights under Section 5.1(e) with
respect to such Carried Costs (if applicable), then BG and such BG Member, as applicable, shall be in default under this Agreement upon its receipt of a Default Notice and its failure to so cure such default as provided in Section 5.1(a).
Except as set forth in Section 5.1(e), no default by EXCO under this Agreement shall affect BG’s obligation to pay, or cause a BG Member to pay, as applicable, the Carried Costs when due as required by Section 2.2.

  

 33 

	 	(e)	Notwithstanding anything to the contrary herein, at any time upon which EXCO is a Defaulting Party hereunder and prior to the Carry Termination Event, BG and the BG
Members shall have the right but not the obligation to, upon notice to EXCO, make payments into the Joint Operations Account toward all or a portion of the Total Amount in Default of EXCO and its Affiliates and to set off such payments against their
respective obligations to pay Carried Costs and, upon such payment and set off, such obligation to pay such Carried Costs (to the extent of the amount so paid and set off) shall be deemed satisfied. 

Section 5.2 Certain Consequences of Default. 

 

	 	(a)	Notwithstanding any other provision in this Agreement or any Associated Agreement to the contrary, during the Default Period, a Defaulting Party shall be subject to all
rights and remedies available to the Affected Parties under the relevant Applicable Operating Agreements, Joint Entity Agreements and other Associated Agreements and in addition, a Defaulting Party shall have no right to: 

 

	 	(i)	make or elect to participate in, directly or through an affiliated Entity Member, any proposal under this Agreement or any Applicable Operating Agreement;

  

	 	(ii)	vote on any matter with respect to which approval is required under the express terms of this Agreement or any Associated Agreement (excluding any amendment or waiver
of the terms of any such agreement); 

  

	 	(iii)	call any (A) Operating Committee or subcommittee meeting or (B) any meeting of the Management Board or any subcommittee of the Management Board;

  

	 	(iv)	vote on any matter coming before the (A) Operating Committee or any subcommittee (except for any amendment to the Development Work Program pursuant to
Section 4.1) or (B) the Management Board or any subcommittee of the Management Board (excluding any amendment of the applicable Joint Entity Agreement or waiver of the terms of such agreement); 

 

	 	(v)	access any data or information relating to any operation conducted under this Agreement or any Associated Agreement (except to the extent (i) that the Defaulting
Party is Joint Development Operator or is a Party Operator, or (ii) such Defaulting Party or any of its Affiliates is providing services to a Joint Entity pursuant to a services agreement, and in either case such data is necessary for such
Person to perform its responsibilities in such capacity); 

  

	 	(vi)	 Transfer all or any part of its interests in its Joint Development Interest or Encumber all or any part of its Joint Development Interest except in a
case of (A) a Transfer (or a transfer pursuant to a Credit Facility Foreclosure) of a Joint Development Interest to a Person or Encumbrance in favor of a 

 

 34 

	 	
Person who simultaneously with such Transfer (or transfer) or Encumbrance satisfies in full the Total Amount in Default of such Defaulting Party and its Affiliates, or (B) a Credit Facility
Encumbrance granted pursuant to a borrowing for which all or a portion of the proceeds thereof are used to pay the entire amount of the Total Amount in Default of such Defaulting Party and its Affiliates; 

 

	 	(vii)	withhold consent to any Transfer of all or an undivided portion of the Joint Development Interest (including a Material Interest), or a Change in Equity Ownership, of
an Affected Party pursuant to this Agreement or the applicable Associated Agreement, or exercise its preferential purchase right provided for in this Agreement or the applicable Associated Agreement in the event of such a Transfer by an Affected
Party or in the event of a Change in Equity Ownership of an Affected Party; or 

  

	 	(viii)	elect to acquire any portion of an Acquired Interest pursuant to Article 9. 

 

	 	(b)	In addition to the other remedies available to the Affected Parties under this Agreement and any other rights available to each Affected Party to recover its share of
the Total Amount in Default, from and after the later to occur of the thirtieth (30th) day of the Default Period or the time upon which the Defaulting Party’s and its Affiliates’ collective balance in the Joint Operations Account is
equal to zero (0), (i) a Defaulting Party shall have no right to receive its Entitlement from the Leases included in the Development Assets, and the Affected Parties shall have the right to collect such Entitlement and (b) a Defaulting
Party shall have no right to receive distributions from any Joint Entity, and such distributions shall instead be made to the Affected Parties who are Entity Members of the relevant Joint Entity, in each case until the expiration of the Default
Period. Amounts received by the Affected Parties from the sale of such Entitlement and from such distributions shall be applied toward the Total Amount in Default as provided in Section 5.2(f). 

 

	 	(c)	Furthermore, during the Default Period, the Defaulting Party shall be deemed to have approved, and shall join with the non-defaulting Development Party in taking, any
actions approved by the non-defaulting Development Parties during the Default Period which cannot be conducted as Sole Risk Development Operations under the terms of any Applicable Operating Agreement or Sole Risk Entity Operations under the terms
of any Joint Entity Agreement. 

  

	 	(d)	Any Default Notice shall include a statement of the amount of money that the Defaulting Party has failed to pay. 

 

	 	(e)	 The commencement of a Default Period shall not impair the Joint Development Operator’s right to use amounts held in the Joint Operations Account
for the benefit of the Defaulting Party and its Affiliates for the purpose of paying Permitted Expenses for the account of such Defaulting Party and its Affiliates, and the Joint Development Operator shall continue to apply funds so held for this

  

 35 

	 	
purpose until all funds held in the Joint Operations Account for the benefit of the Defaulting Party and its Affiliates have been exhausted. Upon the commencement and continuation of the Default
Period, beginning on the first Business Day of the Calendar Month preceding the Calendar Month during which the amounts held in the Joint Operations Account for the benefit of the Defaulting Party and its Affiliates will no longer be sufficient to
pay the Defaulting Party’s and its Affiliates’ shares of Permitted Expenses (other than, if applicable, Carried Costs), and monthly thereafter until sufficient funds have been restored to the Joint Operations Account for the benefit of the
Defaulting Party and its Affiliates to pay the Defaulting Party’s and its Affiliates’ shares of the following Calendar Month’s Permitted Expenses, Joint Development Operator, or if Joint Development Operator or any Affiliate of Joint
Development Operator is the Defaulting Party, any Affected Party or Affected Parties, shall send the non-defaulting Development Parties and non-defaulting Entity Members a statement of the sum of money that such parties are required to pay with
respect to the Defaulting Party’s and its Affiliates’ share of Permitted Expenses for the following Calendar Month, and, except to the extent such amounts have been satisfied by (i) payments by BG and any BG Member pursuant to
Section 5.1(e) or (ii) by amounts paid to restore the amounts held in the Joint Operations Account for the benefit of the Defaulting Party and its Affiliates pursuant to Section 5.2(f), the non-defaulting Development Parties or Entity
Members shall pay such amount within fifteen (15) days following receipt of the statement in accordance with the terms of Section 2.3. If any non-defaulting Development Party or Entity Member fails to timely satisfy such obligations, such
non-defaulting Development Party or Entity Member and its Affiliates shall thereupon be Defaulting Parties subject to the provisions of this Article 5. If all non-defaulting Development Parties or non-defaulting Entity Members, as applicable, fail
to timely satisfy such obligations, the Development Parties or Entity Members shall be deemed to have unanimously determined not to make such expenditure and the Defaulting Party shall no longer be deemed to be in default with respect to such
expenditure. 

  

	 	(f)	 All amounts collected with respect to a Defaulting Party and its Affiliates pursuant to Section 5.2(b), any other payments by or on behalf of a
Defaulting Party or its Affiliates prior to satisfaction of the Total Amount in Default, and all amounts collected under any Joint Entity Agreement with respect to such Defaulting Party and its Affiliates shall, during the continuation of the
default, be aggregated and applied to satisfy the Total Amount in Default with respect to such Defaulting Party and its Affiliates, ratably in proportion to the portion of the Total Amount in Default owed by each. Amounts received with respect to
any component of the Total Amount in Default shall be paid first to the non-defaulting Development Parties or non-defaulting Entity Members, as applicable, in proportion to the amounts paid by each pursuant to Section 5.2(e) and (if applicable)
under the applicable Joint Entity Agreement with respect to such component and second to restore the amount held in the Joint Operations Account for the benefit of the Defaulting Party and its Affiliates to the amount that would be required under
Section 2.3. The non-defaulting Development Parties and 

  

 36 

	 	
Entity Members shall be entitled to enforce any and all security available to them under the Applicable Operating Agreements, Joint Entity Agreements and other Associated Agreements with respect
to such Defaulting Party’s and its Affiliates’ Total Amount in Default, regardless of the specific agreement or particular Affiliate to which any particular component of the Total Amount in Default relates. For any Joint Entity Agreement
that provides for reduction of a defaulting Entity Member’s Membership Interest based upon Capital Contributions made by such Entity Member when compared to those made by all Entity Members, the non-defaulting Entity Members shall be entitled,
at their option, to make the calculation using the aggregates of all payments made by the defaulting Entity Member and its Affiliates pursuant to this Agreement and of all payments made by all Entity Members and their Affiliates pursuant to this
Agreement, in lieu of using Capital Contributions made under the Joint Entity Agreement alone. 

Section 5.3 Right to Costs of Enforcement. Each Affected Party shall be entitled to recover from the Defaulting Party
all reasonable attorneys’ fees and other reasonable costs sustained in the collection of amounts owed by the Defaulting Party. 

Section 5.4 Cumulative and Additional Remedies. The rights and remedies granted to an Affected Party in this Article 5
shall be cumulative, not exclusive, and shall be in addition to any other rights and remedies that may be available to the Affected Party, at Law, in equity or otherwise. Each right and remedy available to an Affected Party may be exercised from
time to time and so often and in such order as may be considered expedient by an Affected Party in its sole discretion. 

Section 5.5 Remedies for Failure to Pay Carried Costs. 

 

	 	(a)	If BG or any BG Member becomes a Defaulting Party with respect to any Carried Costs, (a “Carried Cost Default”), then in addition to a Default Notice
with respect thereto, EXCO will give notice of such Carried Cost Default (a “Carried Cost Default Notice”) to BG (and, if applicable, such BG Member). If BG fails to pay, or cause such BG Member to pay, such owed and undisputed
Carried Costs within fifteen (15) days of BG’s (and, if applicable, such BG Member’s) receipt of a Carried Cost Default Notice, then, at the option of EXCO (exercisable at any time prior to the cure of such Carried Cost Default),
which option shall be exercised by notice to BG (and, if applicable, such BG Member) (the “Carried Cost Election Notice” ), BG shall pay, or shall cause the BG Members to pay, to EXCO: (i) the Carried Cost Balance, plus
(ii) interest on the past due portion of the Carried Cost Balance at the Default Interest Rate from the date of such non-payment of Carried Costs until such payment is made. Such payment of the Carried Cost Balance, plus applicable interest,
shall be made within fifteen (15) days following BG’s and/or the BG Member’s receipt of the Carried Cost Election Notice. 

  

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	 	(b)	If EXCO elects to exercise its rights pursuant to this Section 5.5, BG and/or such BG Member shall be deemed to no longer be in default of its obligations to pay
Carried Costs in accordance with the terms of Section 2.2 of this Agreement, and such obligation to pay Carried Costs shall be deemed to be fully satisfied and, at EXCO’s option (exercised by notice to BG within fifteen (15) days
following BG’s and/or the BG Member’s receipt of the Carried Cost Election Notice), this Agreement shall terminate. EXCO shall be entitled to exercise any and all rights and remedies that may be available to EXCO to enforce its rights
under this Section 5.5, whether set forth in this Agreement, the Applicable Operating Agreement, at Law, in equity (including specific performance of this Agreement) or otherwise. 

ARTICLE 6 

TRANSFERS 

Section 6.1 Maintenance of Uniform Interest; Tag-Along Right; Minimum Participating Interest; Transfers by Defaulting
Parties. 
  

	 	(a)	For the purpose of maintaining uniformity of ownership in the AMI Area as among the Development Parties, from and after the Closing Date, no Development Party shall,
and each Development Party shall cause each of its affiliated Entity Members not to, Transfer any portion of its Joint Development Interest unless such Transfer covers (1) the entirety of such Development Party’s and its Affiliates’
(including its affiliated Entity Members’) Joint Development Interests, or an equal undivided percentage of all of such Development Party’s and its Affiliates’ Joint Development Interest, (2) a Material Interest or (3) an
Other Interest. Furthermore, no Development Party shall undergo, or shall permit its affiliated Entity Members to undergo, a Change in Equity Ownership unless such Change in Equity Ownership covers the entirety of the Equity Ownership in such
Development Party and its affiliated Entity Members or an equal undivided percentage of the Equity Ownership of each of the Development Party and its affiliated Entity Members. The requirement in this Section 6.1(a) is intended to ensure, among
other things, that each Entity Member of the Company has an Affiliate that is a Development Party, and that each Development Party has an Affiliate that is an Entity Member of the Company. 

 

	 	(i)	Any Transfer by a Development Party or Entity Member of a Joint Development Interest (other than a Material Interest or Other Interest) shall also transfer a
proportionate share of the Transferring Development Party’s and its Affiliates’ interests in this Agreement and all of the Associated Agreements other than Secondment Agreements. 

 

	 	(ii)	A Development Party or Entity Member may select which of its and its Affiliates’ interests in each Development Asset and Joint Entity comprise the Transferred
undivided interest where interests in any such Development Asset or Joint Entity are owned by more than one Affiliate. 

  

	 	(iii)	Except in the case of a Development Party transferring all of its Joint Development Interest, no Transfer of its Joint Development Interest (other than a Material
Interest or Other Interest) shall be made by a Development Party which results in the transferor or transferee holding a JDA Interest of less than ten percent (10%). 

 

 38 

	 	(iv)	For the avoidance of doubt, nothing in this Section 6.1(a) shall prevent a Development Party from Transferring a Material Interest or an Other Interest in
accordance with the terms and conditions of this Agreement. 

  

	 	(b)	In the event any Development Party (the “Tag Offeror”) proposes to Transfer its leasehold, working or mineral fee interest and obligations with respect
to Outside AMI Rights (the “Tag Assets”) to a third party other than an Affiliate of such Tag Offeror (such Person, a “Tag Transferee”), it shall, once the final terms and conditions of such Transfer (the
“Tag-Along Transaction”) have been fully negotiated, send an offer notice (a “Tag Notice”) to the Company and each other Development Party (each, a “Tag Offeree”) granting such Tag Offerees the
opportunity to join in the Tag-Along Transaction on a pro rata basis in proportion to each Tag Offeree’s Participating Interest in the Tag Assets and on the same terms and conditions. A Tag-Along Transaction shall not provide the Tag Transferee
with any Tag Right related to any leasehold, working or mineral fee interest and obligations with respect to any Development Assets inside of the AMI Area. 

 

	 	(i)	The Tag Notice shall disclose all the final terms and conditions of the Tag-Along Transaction (including the purchase price thereof expressed in U.S. dollars) and be
accompanied by a copy of all instruments or relevant portions of instruments establishing such terms and conditions. 

  

	 	(ii)	Each Tag Offeree shall have the right (a “Tag Right”), exercisable by delivery of notice to the Tag Offeror at any time within ten (10) days after
receipt of the Tag Notice, to sell pursuant to such Tag-Along Transaction and upon the terms and conditions set forth in the Tag Notice, up to such Tag Offeree’s pro rata portion of the Tag Assets; provided, however, that if the proposed Tag
Transferee is unwilling to purchase all of the Tag Assets requested to be included by all exercising Tag Offerees and the Tag Assets held by the Tag Offeror subject to the Tag-Along Transaction, then each Tag Offeree shall have the right to sell
pursuant to such Tag-Along Transaction, at the offer price and upon the terms and conditions set forth in the Tag Notice, a portion of such Tag Offeree’s Tag Assets as provided in the next succeeding sentence. If any Tag Offeree has exercised
its Tag Right and the proposed Tag Transferee is unwilling to purchase all of the Tag Assets proposed to be transferred by the Tag Offeror and all exercising Tag Offerees (determined in accordance with the first sentence of this
Section 6.1(b)(ii)) then the Tag Offeror and each exercising Tag Offeree shall reduce, on a pro rata basis based on their respective Participating Interests in such Tag Assets, the amount of such Tag Assets that each otherwise would have sold
so as to permit the Tag Offeror and each exercising Tag Offeree to sell the portion of the Tag Assets (determined in accordance with such reduced Participating Interests) that the proposed Tag Transferee is willing to purchase (the “Tag
Purchased Assets”). 

  

 39 

	 	(iii)	The Tag Offerees and such Tag Offeror shall sell to the proposed Tag Transferee all the Tag Assets proposed to be Transferred by the Tag Offerees and such Tag Offeror,
or at the option of the proposed Tag Transferee, the Tag Purchased Assets, upon the same terms and conditions, individually and in the aggregate (adjusted as necessary to reflect the Tag Purchased Assets), as those in the Tag-Along Transaction and
the Tag Notice and at the time and place of the closing of the Tag-Along Transaction as provided for in the Tag Notice (subject to extension to the extent necessary to pursue any required regulatory approvals), or on such other terms and conditions
and at such other time and place as the Tag Offerees, such Tag Offeror and the proposed Tag Transferee shall agree in writing. 

  

	 	(c)	No Defaulting Party may Transfer all or any part of its Joint Development Interest or any other Development Asset unless and until the Total Amount in Default is paid
by such Defaulting Party or its transferee or any other Person on behalf of such Defaulting Party. 

Section 6.2 Requirements for Transfer. 

 

	 	(a)	Any Transfer or Encumbrance of all or any portion of a Joint Development Interest (excluding any Material Interest or Other Interest) must expressly be made subject to
this Agreement and, to the extent applicable, the Associated Agreements. Notwithstanding the foregoing, no Credit Facility Encumbrance shall be subject to the terms and conditions of this Agreement or any Associated Agreement, except that
Credit Facility Encumbrances granted at or after the Closing Date (other than Credit Facility Encumbrances granted pursuant to the Existing EXCO Credit Facility) shall be subject to Section 3.4 (excluding Section 3.4(f)) and Article 8 of
this Agreement and all Joint Development Operating Agreements. 

  

	 	(b)	 A transferee of any Transfer of a Joint Development Interest in the Development Assets shall have no rights under this Agreement or the Associated
Agreements unless and until such transferee (i) provides the non-transferring Development Parties and Joint Development Operator executed counterparts of the instrument or instruments providing for such Transfer, (ii) expressly undertakes
to be bound by the terms of this Agreement and the Associated Agreements through the execution and delivery of an instrument in substantially the form attached hereto as Exhibit “F” (the “Assumption Agreement”) and
(iii) either (A) delivers (1) where EXCO is the transferor, a guarantee from a direct or indirect parent company of such transferee of comparable or better credit quality to the credit quality on the Closing Date of the guarantor for
the Joint Development Interest being transferred or (2) where BG is the transferor, a guarantee from a direct or indirect parent company of such transferee that has a long-term credit rating from

  

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Standard & Poor’s Ratings Group of not less than “BB-” or a long-term credit rating from Moody’s Investors Service, Inc. of not less than “Ba3”, in each
case in favor of each of the other Parties in substantially the form of Exhibits “A” and “H” or (B) delivers written confirmation from the transferor that the guarantee furnished by the transferor with respect to the Joint
Development Interest being transferred will remain in full force and effect with respect to that interest following the Transfer. 

  

	 	(c)	Any transferee of any Membership Interests in a Joint Entity shall have no rights under this Agreement or the Associated Agreements unless and until it complies with
all conditions precedent of a Membership Interest transfer in the applicable Joint Entity Agreement. 

  

	 	(d)	Any Affiliate of a Development Party that is not a Development Party and that receives a Transfer of a Membership Interest in a Joint Entity other than the Company,
must execute a ratification of this Agreement in a form substantially similar to Exhibit “I”. 

Section 6.3 Liability of Transferor/Transferee. With respect to any Transfer of a Joint Development Interest (other
than a Material Interest or Other Interest): 
  

	 	(a)	a transferring Party shall, notwithstanding such Transfer, be liable to the other Parties, including the Joint Development Operator, for its obligation to fund its
share (as of the time of the Transfer) of (i) the Development Operations in which it is participating included in approved Annual Work Program and Budgets (including multi-year expenditures included in more than one Annual Work Program and
Budget) as of the date of the Transfer and (ii) Sole Risk Development Operations in which such Development Party is participating; 

  

	 	(b)	a transferring Entity Member shall, notwithstanding such Transfer, be liable to its Joint Entity, the other Entity Members and Joint Development Operator for its
obligation to fund its share (as of the time of the Transfer) of (i) Capital Contributions to its Joint Entities with respect to Development Operations in which such Joint Entities are participating included in approved Annual Work Program and
Budgets (including multi-year expenditures included in more than one Annual Work Program and Budget) as of the date of the Transfer and (ii) Sole Risk Entity Operations in which such Entity Member is (directly, through an affiliated Development
Party, or by participation of the Joint Entity on its behalf) participating; 

  

	 	(c)	each transferring Party and Entity Member shall also be liable for its share of all other obligations, in each case, accrued under this Agreement or any Associated
Agreement (including, in the case of any Entity Member, its share of Capital Contributions required to fund its Joint Entity’s share of obligations accrued under an Applicable Operating Agreement entered into by the Joint Entity) on or prior to
such Transfer; 

  

 41 

	 	(d)	Upon compliance of its transferee with the terms of Section 6.2, each transferring Party and Entity Member (and, if a replacement guarantee complying with
Section 6.2(b)(iii) is furnished, each guarantor of its obligations under this Agreement and any Associated Agreement) shall be released from any other obligations accruing after the date of the Transfer under this Agreement or any Associated
Agreement with respect to the Joint Development Interest being Transferred and for which it is not liable under Section 6.3(a), (b) or (c) above, except in the case where the Transfer at issue is made to an Affiliate or where there is
a Credit Facility Foreclosure on all or any part of a Party’s Joint Development Interest, in which cases the transferring Party or Party subject to the foreclosure, as applicable, shall remain primarily liable for all such obligations; and

  

	 	(e)	for purposes of this Section 6.3, costs of plugging and abandoning wells and decommissioning facilities in which the transferring Party or an applicable Joint
Entity has participated (or has paid a share of the costs under the preceding sentence) shall be considered to accrue at the time when applicable operator cash calls such amounts or the Parties or the Joint Entities are required to provide security
for such amounts under the terms of this Agreement or the Associated Agreements, whichever is earlier. 

Section 6.4 Encumbrances by Parties. Nothing contained in this Article 6 or in Articles 7 or 8 shall prevent a Party
from Encumbering all or any undivided share of its Joint Development Interest or any other interest in the Development Assets to a third party after the Closing Date, provided that: 

 

	 	(a)	such Party shall remain liable for all obligations relating to such Joint Development Interest except as provided in Section 6.3; and 

 

	 	(b)	other than with respect to a Credit Facility Encumbrance, such Encumbrance shall be expressly subordinated to the rights of the other Parties under this Agreement,
including any mortgage or security interest provided for herein or in the Associated Agreements, which subordination shall be expressly for the benefit of the other Parties. 

ARTICLE 7 

CONSENT TO ASSIGNMENT 

Section 7.1 Certain Transfers during Initial Three Year Period. From and after the Closing Date and until the third
anniversary of the Closing Date (such period, the “Initial Three Year Period”), no Development Party shall, and no Development Party shall permit any of its affiliated Entity Members to, Transfer all or any part of its Joint
Development Interest (except an Other Interest) or undergo a Change in Equity Ownership without the prior written consent of each other Development Party, which consent may be withheld for any reason in the sole discretion of such other Development
Party, provided that no such consent shall be required for any Transfer of all or any part of a Development Party’s or affiliated Entity Member’s Joint Development Interest to an Affiliate of such Development Party, provided that any
subsequent 
  

 42 

 
Transfer of a Joint Development Interest (except an Other Interest) by such Affiliate of such Development Party to a Person that is not an Affiliate of such Development Party during the Initial
Three Year Period shall require the prior written consent of the other Development Parties, which consent may be withheld for any reason in the sole discretion of such other Development Parties. Further, during the Initial Three Year Period, no
Affiliate of a Development Party that has been Transferred a Joint Development Interest (unless limited to an Other Interest) may undergo a Change in Equity Ownership without the prior written consent of each other Development Party, which consent
may be withheld for any reason in the sole discretion of such other Development Party. 
 Section 7.2 Other
Transfers. A Development Party or its affiliated Entity Member shall be permitted to Transfer all or any part of its Joint Development Interest after the Initial Three Year Period, provided that a transferee must with its Affiliates have the
financial ability to perform its future payment obligations hereunder and under the Associated Agreements and the technical ability to participate in the planning of future operations. 

Section 7.3 Additional Consent Requirements. For the avoidance of doubt, any Transfer of a Joint Development Interest
(except an Other Interest) shall also be subject to any restrictions on Transfer set forth in the Associated Agreements applicable thereto in addition to those set forth in this Agreement; provided that to the extent any such Associated Agreement
contains a right to withhold consent to Transfer or a preferential purchase right in favor of another Development Party, as between the transferring Development Party and the other Development Parties that are parties to such Associated Agreement,
any such consent right or preferential purchase right in such Associated Agreement shall not apply so long as this Agreement remains in effect; and, provided further that, to the extent any Joint Entity Agreement contains any right to withhold
consent to Transfer or any preferential purchase right in favor of another Entity Member, as between the transferring Entity Member and the other Entity Members that are parties to such Joint Entity Agreement, any such consent right or preferential
purchase right in such Joint Entity Agreement shall not apply so long as this Agreement remains in effect. 

Section 7.4 Consents for Transfer of Joint Development or Party Operatorship. Except as may be expressly required by
the terms of this Agreement, neither Joint Development Operator nor any Party Operator may transfer all or any part of its rights or obligations as Joint Development Operator hereunder or as Party Operator under any Applicable Operating Agreement
without the prior written consent of each Development Party, which consent may be withheld for any reason in the sole discretion of such Development Party. 
  

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 ARTICLE 8 

PREFERENTIAL RIGHT TO PURCHASE; CHANGES IN EQUITY OWNERSHIP 

Section 8.1 Preferential Right to Purchase. Any Transfer of all or a portion of a Development Party’s or Entity
Member’s Joint Development Interest, other than a Transfer thereof to a Wholly-Owned Affiliate or a Transfer of an Other Interest shall be subject to the following procedure. 

 

	 	(a)	Once the final terms and conditions of such Transfer have been fully negotiated and are binding upon the parties thereto, the transferring Development Party or Entity
Member and all its Affiliates who are also proposing to Transfer shall jointly disclose all such final terms and conditions as are relevant to the acquisition of the Joint Development Interest (and, if applicable, the determination of the Cash Value
of the Joint Development Interest) in a notice to the non-transferring Development Parties and Entity Members with Membership Interests in the applicable Joint Entity(ies), which notice shall be accompanied by a copy of all instruments or relevant
portions of instruments establishing such terms and conditions. Each non-transferring Development Party and its affiliated Entity Members, as applicable, shall have the right to acquire the Joint Development Interest subject to such proposed
Transfer from the transferring Development Party and Entity Member(s) on the terms and conditions described in Sections 8.1(c) and 8.1(d), as applicable, if, within sixty (60) days of the transferring Development Party’s or Entity
Member’s notice, the non-transferring Development Party and its affiliated Entity Members deliver to the transferring Development Party or Entity Member a counter-notification that they accept such terms and conditions without reservations or
conditions (subject to the other provisions of this Section 8.1, where applicable). If no non-transferring Development Party and its affiliated Entity Members deliver such counter-notification within such time, such Transfer to the proposed
transferee may proceed without further notice, subject to the other provisions of this Agreement, under terms and conditions no more favorable to the transferee than those set forth in the notice to the non-transferring Development Parties and
Entity Members, provided that such Transfer shall be concluded within one hundred twenty (120) days from the date of the notice. If such Transfer fails to be concluded within such period and the parties thereto desire thereafter to proceed with
such proposed Transfer, the transferring Development Party and Entity Members shall be required to re-offer the Joint Development Interest subject to the Transfer to the non-transferring Development Parties and their affiliated Entity Members in
accordance with the terms and conditions of this Section 8.1. No Development Party or Entity Member shall have a right under this Section 8.1 to acquire any asset other than a Joint Development Interest, nor shall a Development Party or
Entity Member be required to acquire any asset other than a Joint Development Interest, regardless of whether other properties are included in the Transfer at issue. 

 

 44 

	 	(b)	If more than one non-transferring Development Party and its affiliated Entity Members counter-notify that they intend to acquire the transferring Development
Party’s and Entity Members’ Joint Development Interest that is subject to the proposed Transfer, then each such Development Party and its affiliated Entity Members shall acquire a proportion of the Joint Development Interest to be
transferred equal to the ratio of its own Participating Interest or Percentage Interest, as applicable, to the total Participating Interests or Percentage Interests of all counter-notifying Development Parties or Entity Members, unless the
counter-notifying Development Parties or Entity Members otherwise agree. In the event that a Person other than the Development Parties or their Affiliates validly exercises a preferential right to acquire all or a part of the transferring
Development Party’s or Entity Member’s Joint Development Interest that is subject to the proposed Transfer, then the rights of the non-transferring Development Party or Entity Members shall be limited to the portion of the Joint
Development Interest being transferred that is not acquired by such other Person. 

  

	 	(c)	In the event of a Cash Transfer that does not involve other properties as part of a wider transaction, each non-transferring Development Party or Entity Member shall
have a right to acquire the Joint Development Interest subject to the proposed Transfer on the same final terms and conditions as were negotiated with the proposed transferee. 

 

	 	(d)	In the event of a Transfer of all or a portion of a Joint Development Interest that is not a Cash Transfer or involves other properties included in a wider transaction
(package deal), the transferring Development Party or Entity Member shall include in its notification to the non-transferring Development Parties and Entity Members with Membership Interests in the applicable Joint Entity(ies) a statement of the
proposed Cash Value of the Joint Development Interest subject to the proposed Transfer, and each non-transferring Development Party or Entity Member shall have a right to acquire such Joint Development Interest on the same final terms and conditions
as were negotiated with the proposed transferee except that it shall pay the Cash Value in immediately available funds at the closing of the Transfer in lieu of the consideration payable in the third party offer, and the terms and conditions of the
applicable instruments shall be modified as necessary to reflect the acquisition of a Joint Development Interest for cash. In the case of a package sale, the non-transferring Development Parties and Entity Members may not acquire the Joint
Development Interest subject to the proposed package sale unless and until the completion of the wider transaction (as modified by the exclusion of properties subject to preemptive rights or excluded for other reasons) with the package sale
transferee. If for any reason the package sale terminates without completion, the non-transferring Development Parties’ and Entity Members’ rights to acquire the Joint Development Interest subject to the proposed package sale shall also
terminate. 

  

	 	(e)	 For purposes of Section 8.1(d), the Cash Value proposed by the transferring Development Party or Entity Member in its notice shall be conclusively
deemed correct unless any non-transferring Development Party or Entity Member gives notice to the transferring Development Party or Entity Member within thirty (30) days of receipt of the transferring Development Party’s or Entity
Member’s notice 

  

 45 

	 	
stating that it does not agree with the statement of the Cash Value, stating the Cash Value it believes is correct, and providing any supporting information that it believes is helpful. In such
event, the Development Parties or Entity Members, as applicable, shall have fifteen (15) days in which to attempt to negotiate an agreement on the applicable Cash Value. If no agreement has been reached by the end of such fifteen (15) day
period, any affected Development Party or Entity Member shall be entitled to refer the matter to an independent expert as provided in Section 13.3 for determination of the Cash Value, provided that the transferring Development Party and Entity
Members may elect to terminate the proposed Transfer, and any non-transferring Development Party and its affiliated Entity Members may elect to revoke their notice of intention to purchase, in either case by notice to the other Development Parties
or Entity Members at any time prior to the time that the independent expert is retained pursuant to such provision. The Cash Value to be submitted to the independent expert by the transferring Development Party or Entity Member shall be the Cash
Value provided by such Development Party or Entity Member in the notice provided to the non-transferring Development Parties and Entity Members pursuant to Section 8.1(d), and the Cash Value to be submitted to the independent expert by each
non-transferring Development Party and its affiliated Entity Members shall be the Cash Value provided by such Development Party or its affiliated Entity Member in the notice provided to the transferring Development Party or Entity Member pursuant to
this Section 8.1(e). 

  

 46 

	 	(f)	In the event that any Person other than a Development Party or an Affiliate of a Development Party validly exercises after the Closing Date a preferential right to
purchase with respect to any Development Assets in connection with the transactions conducted under the Transfer Agreement or in connection with any subsequent Transfer subject to this Agreement, any such Development Assets and all other remaining
interests of the Development Parties and Joint Entities in the same Oil and Gas Assets shall, following the closing of such preferential right acquisition, be deemed to be Excluded Interests, and the Participating Parties in such Development
Interests shall be entitled to exercise the rights with respect thereto that are set forth in Sections 3.5(g) and 9.2(h). 

Section 8.2 Changes in Equity Ownership. 

 

	 	(a)	Any Change in Equity Ownership of a Development Party or an Entity Member shall be subject to the terms and conditions of this Section 8.2. For purposes of this
Section 8.2, the term “Acquired Party” shall refer to each Development Party or Entity Member that is subject to a Change in Equity Ownership, “Other Development Parties” shall refer to, in the case of a
Development Party that is subject to a Change in Equity Ownership, all other Development Parties not subject to the Change in Equity Ownership and, in the case of an Entity Member that is subject to Change in Equity Ownership, all other Entity
Members that are not subject to the Change in Equity Ownership, and “Acquiror” shall refer to the third party proposing to acquire an equity interest in the Acquired Party in the Change in Equity Ownership. 

 

	 	(b)	 Once the final terms and conditions of a Change in Equity Ownership have been fully negotiated and are binding upon the parties thereto, all affiliated
Acquired Parties shall disclose all such final terms and conditions as are relevant to the acquisition of such Acquired Parties’ Joint Development Interest and other interests in the Development Assets and the determination of the Cash Value of
that Joint Development Interest and other interests in a notice to the Other Development Parties, which notice shall be accompanied by a copy of all instruments or relevant portions of instruments establishing such terms and conditions. Each Other
Development Party shall have the right to acquire the Acquired Parties’ Joint Development Interests and other interests in the Development Assets on the terms and conditions described in Section 8.2(d) if, within sixty (60) days of
the Acquired Parties’ notice, the Other Development Party delivers to the Acquired Party a counter-notification that it accepts such terms and conditions without reservations or conditions (subject to the other provisions of this
Section 8.2, where applicable). If no Other Development Party delivers such counter-notification, the Change in Equity Ownership may proceed without further notice, subject to the other provisions of this Article 8, under terms and conditions
no more favorable to the Acquiror than those set forth in the notice to the Other Development Parties, provided that the Change in Equity Ownership shall be concluded within one hundred twenty (120) days from the date of the notice. If the
Change in Equity Ownership fails to be concluded within such period and the direct or indirect owners, as the case may be, of the 

 

 47 

 
Acquired Parties desire thereafter to proceed with such proposed Change in Equity Ownership, the Acquired Parties shall be required to re-offer the Joint Development Interest and other interests
in the Development Assets subject to the Change in Equity Ownership to the Other Development Parties in accordance with the terms and conditions of this Section 8.2. No Other Development Party shall have a right under this Section 8.2 to
acquire any asset other than a Joint Development Interest, nor shall any Other Development Party be required to acquire any asset other than a Joint Development Interest and other interests in the Development Assets, regardless of whether other
properties are subject to the Change in Equity Ownership. 
  

	 	(c)	If more than one Other Development Party counter-notifies that it intends to acquire the Acquired Parties’ Joint Development Interest and other interests in the
Development Assets that are subject to the proposed Change in Equity Ownership, then each such Other Development Party shall acquire a proportion of the Joint Development Interest subject to the Change in Equity Ownership equal, in the case of
Development Assets, to the ratio of its own Participating Interest to the total Participating Interests of all counter-notifying Other Development Parties, and, in the case of Membership Interests in any Joint Entity, to the ratio of its own
Percentage Interest to the total Percentage Interests of all counter-notifying Other Development Parties, unless the counter-notifying Other Development Parties otherwise agree. 

 

	 	(d)	The Acquired Party shall include in its notification to the Other Development Parties a statement of the proposed Cash Value of the Joint Development Interest subject
to the proposed Change in Equity Ownership, and each Other Development Party shall have a right to acquire such Joint Development Interest and other interests in the Development Assets for the Cash Value, on the final terms and conditions negotiated
with the Acquiror that are relevant to the acquisition of a Joint Development Interest and other interests in the Development Assets for cash. No Other Development Party may acquire the Acquired Parties’ Joint Development Interest and other
interests in the Development Assets pursuant to this Section 8.2 unless and until completion of the Change in Equity Ownership. If for any reason the Change in Equity Ownership agreement terminates without completion, the Other Development
Parties’ rights to acquire the Joint Development Interest and other interests in the Development Assets subject to the proposed Change in Equity Ownership shall also terminate. 

 

	 	(e)	 For purposes of Section 8.2(d), the Cash Value proposed by the Acquired Party in its notice shall be conclusively deemed correct unless any Other
Development Party gives notice to the Acquired Parties within thirty (30) days of receipt of the Acquired Parties’ notice stating that it does not agree with the Acquired Parties’ statement of the Cash Value, stating the Cash Value it
believes is correct, and providing any supporting information that it believes is helpful. In such event, the Development Parties shall have fifteen (15) days in which to attempt to negotiate an agreement on the applicable Cash Value. If no
agreement has been reached by the end of such fifteen (15) day period, any affected Development Party shall be 

 

 48 

 
entitled to refer the matter to an independent expert as provided in Section 13.3 for determination of the Cash Value, provided that the Acquired Parties may elect to terminate the proposed
Change in Equity Ownership, and any Other Development Party may elect to revoke its notice of intention to purchase, in either case by notice to the other Development Parties at any time prior to the time that the independent expert is retained
pursuant to such provision. The Cash Value to be submitted to the independent expert by the Acquired Parties shall be the Cash Value provided by such Acquired Parties in the notice provided to the non-transferring Development Parties pursuant to
Section 8.2(d), and the Cash Value to be submitted to the independent expert by each Other Development Party shall be the Cash Value provided by such Other Development Party in the notice provided to the Acquired Parties pursuant to this
Section 8.2(e). 
 ARTICLE 9 

AREA OF MUTUAL INTEREST; CERTAIN RENTALS; JOINT ENTITIES 

Section 9.1 Creation of Area of Mutual Interest. The Development Parties agree that the AMI Area shall be an area of
mutual interest. 
 Section 9.2 Area of Mutual Interest Procedures. 

 

	 	(a)	 If, during the period commencing on January 1, 2010 and ending on January 1, 2020, a Development Party or any Affiliate thereof (such
Development Party, whether it or its Affiliate is the acquiror, an “Acquiring Development Party”) completes an Acquisition in the AMI Area or an Equity Acquisition relating to an entity holding Oil and Gas Assets in the AMI Area
from a non-Affiliate (a “Selling Party”), the Acquiring Development Party shall provide written notice (an “Offer Notice”) to the other Development Parties (each, a “Non-Acquiring Development
Party”), which notice shall disclose all final terms and conditions relevant to the Acquisition or Entity Acquisition and be accompanied by a copy of all instruments or relevant portions of instruments establishing such terms and
conditions; provided that (i) where EXCO or any of its Affiliates is the Acquiring Development Party (A) it shall not be required to deliver any Offer Notice with respect to the Additional Interests, and the Additional Interests shall be
subject to the provisions of the Transfer Agreement and not the provisions of this Article 9 and (B) it shall not be required to deliver any Offer Notice relating to any such Acquisition or Entity Acquisition by EXCO or any of its Affiliates
occurring on or after the tenth day prior to the Closing Date up the Closing Date until five (5) Business Days after the Closing Date, and (ii) where BG or any of its Affiliates is the Acquiring Development Party, it shall not be required
to deliver any Offer Notices relating to any Acquisition or Equity Acquisition by BG or any of its Affiliates occurring on or after January 1, 2010, but prior to the Closing Date until five (5) Business Days after the Closing Date. Subject
to the rights of any third parties under any relevant Applicable Operating Agreement, each Non-Acquiring Development Party shall have the right (but not the obligation) to acquire its undivided Participating Interest share (the “Offered
Interest”) in the Oil and Gas Assets (or, in the case of an Entity Acquisition, if the direct or indirect interests of 

 

 49 

	 	
the acquired entity in Oil and Gas Assets in the AMI Area make up more than seventy-five percent (75%) of the total Cash Value of the interest acquired or to be acquired, at the option of
the Non-Acquiring Development Parties, to be determined by a majority in interest based on their Participating Interests, the right (but not the obligation) to acquire its Offered Interest in the entity itself) (as applicable, the “Acquired
Interest”) upon the same terms and conditions on which the Acquiring Development Party or its Affiliate acquired the Acquired Interest, and effective on the same date on which the Acquiring Development Party’s or its Affiliate’s
Acquisition was effective, subject to the Non-Acquiring Development Party assuming its Participating Interest share of all duties and obligations with respect to the Acquired Interest and paying the Acquiring Development Party the Non-Acquiring
Development Party’s Participating Interest share of any consideration paid by the Acquiring Development Party or its Affiliate (and, in the case of Acquired Interests including Leases, any lease broker costs incurred in acquiring such Leases).
Notwithstanding anything to the contrary in the preceding sentence, in the event that one or more Non-Acquiring Development Parties elect not to acquire their Offered Interests, each Non-Acquiring Development Party’s Offered Interest shall be
that portion of the Acquired Interest that such Non-Acquiring Development Party’s Participating Interest bears to the aggregate Participating Interests of the Acquiring Development Party and the Non-Acquiring Development Parties electing to
participate in such Acquisition or Equity Acquisition of the Acquired Interest. An Acquiring Development Party shall use commercially reasonable efforts to assign a share of its or its Affiliate’s rights and obligations under the acquisition
documents to the Non-Acquiring Development Parties, provided that the Acquiring Development Party shall not be required to pay cash or otherwise surrender value or incur any liability to the Selling Party to obtain such a right. Within fifteen
(15) days of the delivery of an Offer Notice, the Acquiring Development Party shall provide the Non-Acquiring Development Parties with access to complete well files and all geological and geophysical, title, environmental, contract and other
information about the applicable Oil and Gas Assets (and if applicable, the entity holding them) to which the Acquiring Development Party has access, and until the earlier of (i) the expiration of the sixty (60) day election period in
Section 9.2(b) or (ii) an election by the Non-Acquiring Development Party to acquire its Offered Interest, the Acquiring Development Party shall notify each Non-Acquiring Development Party of any material developments (positive or adverse)
that may occur with respect to the Offered Interest. 

  

	 	(b)	 Each Non-Acquiring Development Party shall have a period of sixty (60) days after receipt of the Offer Notice to notify the Acquiring Development
Party in writing whether it elects to acquire its Offered Interest. Failure to give timely notice of such election shall be deemed an election not to acquire its Offered Interest. If a Non-Acquiring Development Party timely elects to acquire its
Offered Interest, then the Acquiring Development Party and such Non-Acquiring Development Party shall, as promptly as commercially practicable, enter into agreements for the Transfer of the Non-Acquiring Development Party’s Offered Interest on
substantially the same terms as provided in the agreements between 

  

 50 

	 	
the Selling Party and the Acquiring Development Party or its Affiliate (with such changes as may be necessitated by the differences in parties, the transfer of only a Participating Interest
share, the inclusion of lease broker costs to the extent required by Section 9.2(a), and, if applicable, the apportionment of rights from an Equity Acquisition or package deal or the payment of Cash Value in lieu of other consideration),
provided that the Acquiring Development Party shall in no event have liability to the Non-Acquiring Development Party for representations, warranties or indemnities with respect to the Acquired Interest in excess of the Non-Acquiring Development
Party’s Offered Interest share of amounts that the Acquiring Development Party or its Affiliate actually recovers under the third party acquisition agreement and related documents for the same matters. Subject to the foregoing, the Parties
shall execute and deliver the applicable documents and take such other actions as shall be reasonably required to accomplish the transfer promptly after the Non-Acquiring Development Party’s exercise of its option, and the Non-Acquiring
Development Party shall pay its Offered Interest share of any consideration paid by the Acquiring Development Party or its Affiliate, or the Cash Value in lieu thereof, as provided for herein; provided, however, that such execution and delivery of
the mutually agreed instruments of transfer (in recordable form if applicable) by the Selling Party or Acquiring Development Party, as applicable, transferring ownership of the Offered Interest to such Non-Acquiring Development Party and payment of
such consideration shall occur simultaneously and each such action shall be contingent upon the other. Should the Non-Acquiring Development Party fail to tender payment in full on the date due under the instruments of transfer, interest will accrue
at the Default Interest Rate on the purchase price for the Offered Interests until such payment is made or, at the option of the Acquiring Development Party, to be exercised by notice to the Non-Acquiring Development Party prior to the cure of the
default, the Non-Acquiring Development Party shall be deemed to have elected not to acquire its Offered Interest. 

  

	 	(c)	If the Acquired Interest arises out of a farmout agreement or similar agreement requiring the drilling of a well or the performance of other similar obligations (or is
an interest in an entity that is subject to a similar obligation), the election by a Non-Acquiring Development Party to acquire its Offered Interest shall also constitute an election by such Non-Acquiring Development Party to join the Acquiring
Development Party in all operations and obligations required to earn such Offered Interest (or, if the acquired interest is an interest in an entity, the applicable interest in such entity’s Oil and Gas Assets) under such an agreement and to
bear its proportion of the cost thereof (including, if applicable, any Carried Costs relating thereto and such operations shall automatically be added to the Development Work Program and the relevant Annual Work Program and Budget). However, nothing
in this Section 9.2(c) shall be construed to prevent any Development Party from electing not to join in a completion attempt of an earning or obligation well drilled under the terms of a farmout agreement or similar agreement if such
Development Party (or the applicable entity) is not obligated to do so under the terms of such farmout agreement or similar agreement. 

  

 51 

	 	(d)	In the event an Acquired Interest is not acquired pursuant to a Cash Transfer or is acquired with other properties included in a wider transaction (package deal) or,
subject to the election by the Non-Acquiring Development Parties pursuant to Section 9.2(a), is an Entity Acquisition, the Acquiring Development Party shall include in its notification to the Non-Acquiring Development Parties a statement of the
Cash Value of the Acquired Interest (excluding the drilling of wells or performance of other obligations included as part of the consideration), and each Non-Acquiring Development Party shall have a right to acquire its Offered Interest on the same
final terms and conditions as were negotiated with the proposed transferor except that it shall pay the Cash Value in immediately available funds to the Acquiring Development Party at the time of its acquisition of the Offered Interest in lieu of
the consideration (excluding the drilling of wells or performance of other obligations included as part of the consideration) payable in the third party offer, and the terms and conditions of the applicable instruments shall be modified to reflect
the acquisition of the Offered Interest for cash. In the case of a package sale or an Entity Acquisition, the Non-Acquiring Development Parties may not acquire an interest in the Acquired Interest subject to the proposed package sale unless and
until the completion of the wider transaction (as modified by the exclusion of properties subject to preemptive rights or excluded for other reasons) with the package sale or Entity Acquisition transferor. If for any reason the package sale or
Entity Acquisition terminates without completion, the Non-Acquiring Development Parties’ rights to acquire the Acquired Interest subject to the proposed package sale shall also terminate. 

 

	 	(e)	For purposes of Section 9.2(d), the Cash Value proposed by the Acquiring Development Party in its notice shall be conclusively deemed correct unless any
Non-Acquiring Development Party gives notice to the Acquiring Development Party within thirty (30) days of its receipt of the Offer Notice stating that it does not agree with the Acquiring Development Party’s statement of the Cash Value,
stating the Cash Value (excluding the drilling of wells or performance of other obligations included as part of the consideration) it believes is correct, and providing any supporting information that it believes is helpful. In such event, the
Development Parties shall have fifteen (15) days in which to attempt to negotiate an agreement on the applicable Cash Value. If no agreement has been reached by the end of such fifteen (15) day period, any affected Development Party shall
be entitled to refer the matter to an independent expert as provided in Section 13.3 for determination of the Cash Value, provided that the Acquiring Development Party may elect to terminate the proposed Acquisition or Entity Acquisition of the
Acquired Interest, and any Non-Acquiring Development Party may elect to revoke its notice of intention to purchase, in either case by notice to the other Development Parties at any time prior to the time that the independent expert is retained
pursuant to such provision. The Cash Value to be submitted to the independent expert by the Acquiring Development Party shall be the Cash Value provided by such Acquiring Development Party in the notice provided to the Non-Acquiring Development
Parties pursuant to Section 9.2(d), and the Cash Value to be submitted to the independent expert by each Non-Acquiring Development Party shall be the Cash Value provided by such Non-Acquiring Development Party in the notice provided to the
Acquiring Development Party pursuant to this Section 9.2(e). 

  

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	 	(f)	If a Non-Acquiring Development Party elects not to acquire or fails to make a timely election to acquire the Offered Interest, such Non-Acquiring Development Party
shall have no further rights whatsoever with regard to the Acquired Interest and such Acquired Interest shall be excluded for all purposes from this Agreement and the Associated Agreements and the provisions thereof, except that the Acquiring
Development Party and any Non-Acquiring Development Parties who elect to acquire their Offered Interests shall be entitled to (i) elect to have the Joint Development Operator acquire a one-half of one percent (0.5%) interest in (if necessary to
act on as operator thereof) and serve as Party Operator of the Acquired Interest pursuant to Section 9.2(h) and (ii) request that the Joint Development Operator perform those functions elected pursuant to Section 3.5(g) (such Acquired
Interest, when so excluded, shall be an “Excluded Interest”). 

  

	 	(g)	Notwithstanding anything to the contrary herein, this Article 9 shall not be applicable to: (i) Transfers among a Development Party and its Wholly-Owned
Affiliates; (ii) acquisitions of interests in any entity or entities directly or indirectly owning Oil and Gas Assets if the direct or indirect interest in Oil and Gas Assets makes up less than twenty-five percent (25%) of the total Cash
Value of the interest acquired or to be acquired, (iii) Joint Acquisitions, (iv) any Excluded Assets, or (v) any transfer pursuant to any Farmout Sole Risk Entity Operation. 

 

	 	(h)	 If all Non-Acquiring Development Parties elect to acquire their Offered Interest in any Acquired Interest pursuant to this Section 9.2, then,
unless the Acquiring Development Party and each Non-Acquiring Development Party have agreed to acquire their shares of the Acquired Interest in the form of equity interests in a Joint Entity, in which event Section 3.4(g) shall apply if
applicable, the Parties shall be deemed to have determined that the Company or any other Joint Entity serving as Joint Development Operator shall acquire a one-half of one percent (0.5%) share of the Oil and Gas Assets within the Acquired Interest,
and each Development Party’s undivided interest, including the Acquiring Development Party’s (or, if it has made an Entity Acquisition, its acquired entity’s) interest, in such Oil and Gas Assets shall be reduced by the proportion of
such one-half of one percent (0.5%) share that its Participating Interest bears to the Participating Interests of all Development Parties. In the case of any Excluded Interest, the Participating Parties may, by an affirmative vote of seventy-five
percent (75%) of the Participating Interests, determine that (i) if necessary in order for the Company or other Joint Entity serving as Joint Development Operator to act as operator or contract operator of any Oil and Gas Asset included in
the Excluded Interests, the Company or any other Joint Entity serving as Joint Development Operator shall acquire a one-half of one percent (0.5%) share of such Oil and Gas Asset, and each Development Party’s undivided interest, including the
Acquiring Development Party’s (or, if it has made an Entity Acquisition, its acquired entity’s) interest, in such Oil and Gas Asset shall be reduced by the proportion of

  

 53 

	 	
such one-half of one percent (0.5%) share that its Participating Interest bears to the Participating Interests of all Development Parties and (ii) to the extent no third party is serving as
operator of any Oil and Gas Assets included in the Excluded Interest, the Company or any other Joint Entity serving as Joint Development Operator shall operate such Oil and Gas Assets as Party Operator on the same basis as if all activities with
respect to such Oil and Gas Assets were Sole Risk Development Operations by the Participating Parties and subject to the terms of Article 3. 

  

	 	(i)	The Development Parties shall use commercially reasonable efforts to cause the Joint Development Operator, and not a third party, to serve as operator of any Acquired
Interest other than any Excluded Interest. With respect to Excluded Interests, if the Participating Parties elect for the Company or any other Joint Entity serving as Joint Development Operator to operate such Excluded Interests, then the
Participating Parties shall use their commercially reasonable efforts to cause the Joint Development Operator to serve as operator or contract operator pursuant to Section 9.2(h) under a mutually agreeable operating agreement covering such
Acquired Interests which includes provisions for the payment of fees to the Joint Development Operator to compensate it for acting as a operator thereunder. 

 

	 	(j)	The Development Parties agree to use good faith efforts to keep each other informed of any prospective Acquisitions or Entity Acquisitions being pursued by each
Development Party or its Affiliates within the AMI Area prior to the time that an Offer Notice is required under Section 9.2(a). Such obligation shall be subject to confidentiality agreements entered into with third parties; provided that each
Development Party shall use good faith efforts to (i) provide notice of the prospective opportunity prior to entering into any confidentiality agreement and (ii) have an exception included in such agreement allowing disclosure to the other
Development Parties and their Affiliates subject to their execution of a substantially similar confidentiality agreement. 

  

	 	(k)	Each Development Party agrees to cause its Affiliates to comply with this Article 9. 

Section 9.3 Payment of Certain Rentals. If, at any time within the period that is thirty (30) days prior to the
expiration of any Lease included in the Subject Oil and Gas Assets, no approved Annual Work Program and Budget contemplates commencement of drilling operations or payment of delay rentals as may be necessary to maintain such Lease in existence, a
Development Party with an interest in such Lease or an affiliated Entity Member holding an interest in the Joint Entity having an interest in such Lease shall have the right to pay such delay rental in order to maintain such Lease in existence (any
Development Party or Joint Entity paying such delay rental, a “Maintaining Party”), and within ten (10) days of the payment of any such delay rental, shall provide notice of such payment (a “Delay Rental
Notice”) to the other Parties (and, if applicable, the Joint Entity) with an interest in such Lease. Each other Development Party with an interest in such Lease shall have the right (but not the obligation) to reimburse the Maintaining
Party that portion of such delay rental that its or its affiliated Entity 
  

 54 

 
Member’s direct or indirect working interest in the Lease bears to the aggregate direct or indirect working interest of all Development Parties and Entity Members in such Lease (or, if there
are Releasing Parties, that portion of such delay rental that its direct or indirect working interest in such Lease bears to the aggregate direct or indirect working interests in such Lease of the Non-Releasing Parties) by notice to the other
Parties (and, if applicable, the Joint Entity) with an interest in such Lease and reimbursement of the Maintaining Party within ten (10) days of its receipt of the Delay Rental Notice. Failure of a Development Party to so reimburse the
Maintaining Party (any such entity, a “Releasing Party”) shall result in (i) in the case of a Development Asset, such Releasing Party being deemed to have Transferred its interest in the applicable Lease to the Maintaining
Party and the Development Parties with an interest in such Lease paying a portion of such delay rental (all such entities, the “Non-Releasing Parties”) and (ii) in the case of a Joint Entity Asset, the Joint Entity being deemed
to have Transferred its interest in the applicable Lease to the Non-Releasing Parties, in each case in the proportions that each such Non-Releasing Party’s direct or indirect working interests in such Lease bears to the aggregate direct or
indirect working interests in such Lease of all such Non-Releasing Parties, effective as of the first day of the Calendar Month in which such delay rental is paid. A Releasing Party, and if the interest in the Lease is owned by a Joint Entity, the
Joint Entity, shall, without delay following any request from any Non-Releasing Party, do any act required to be done by applicable Law or any applicable contract in order to Transfer an affected Lease to the Non-Releasing Parties, including
obtaining all necessary consents and approvals, and shall execute any document and take such other actions as may be necessary in order to effect a prompt and valid Transfer. The Releasing Party or Joint Entity, as applicable, shall be obligated to
promptly remove any Encumbrances which may exist on the affected Lease. In the event required consents and approvals are not timely obtained, the Releasing Party or Joint Entity, as applicable, shall hold the Transferred Lease in trust for the
Non-Releasing Parties. Following any such Transfer, the Transferred Lease shall be deemed to be an Excluded Interest and the Non-Releasing Parties shall be entitled to exercise the rights with respect thereto that are set forth in Sections 3.5(g)
and 9.2(h). 
 ARTICLE 10 

TAXES 

Section 10.1 Tax Partnership. The Development Parties intend and expect that the transactions contemplated by the
Transfer Agreement, this Agreement and the Associated Agreements, taken together, will be treated, for purposes of federal income taxation and for purposes of certain state income tax laws that incorporate or follow federal income tax principles, as
resulting in (a) the sale to BG Parent by EXCO Parent of fifty percent (50%) of the outstanding member interests in the Company and Appalachia Midstream, LLC, which, under Rev. Rul. 99-5, 1999-1 C.B. 434, is treated for federal income tax
purposes as a sale by EXCO Parent of an undivided fifty percent (50%) interest in the assets of the Company and Appalachia Midstream, LLC, followed by the contribution by each of EXCO Parent and BG Parent of undivided fifty percent
(50%) interests in such assets to newly formed partnerships corresponding in legal form to the Company and Appalachia Midstream, LLC; (b) the creation of a partnership (the “Tax Partnership”) in which BG Parent, EXCO
Parent and the Company are treated as partners, with the Tax Partnership being treated for tax purposes as holding the Non-Operating Assets and engaging in all activities of the Development Parties with respect to the Non-Operating Assets,
(c) a contribution by EXCO Parent of an undivided ninety nine and one 
  

 55 

 
half percent (99.5%) interest in the Non-Operating Assets to the Tax Partnership and a commitment to fund the expenditures allocated to it under this Agreement in exchange for a forty nine
and three fourths percent (49.75%) interest therein; (d) a contribution by the Company of an undivided one half of one percent (.5%) interest in the Non-Operating Assets to the Tax Partnership and a commitment to fund the expenditures
allocated to it under this Agreement in exchange for a one half of one percent (.5%) interest therein; (e) a contribution of the Newco Consideration and a commitment to fund the expenditures allocated to it under this Agreement to the Tax
Partnership by BG Parent in exchange for a forty-nine and three fourths percent (49.75%) interest therein, (f) a distribution to EXCO Parent of the Newco Consideration (i) as a reimbursement of EXCO Parent’s preformation
expenditures with respect to the Non-Operating Assets within the meaning of Treasury Regulations Section 1.707-4(d) to the extent applicable and (ii) in a transaction subject to treatment under Section 707(a) of the Internal Revenue
Code of 1986, as amended, and its implementing Treasury Regulations as in part a sale, and in part a contribution, of the Non-Operating Assets to the Tax Partnership to the extent that Treasury Regulations Section 1.707-4(d) is inapplicable,
and (g) the realization by the Tax Partnership of all items of income or gain and the incurrence by the Tax Partnership of all items of cost or expense attributable to the ownership, operation or disposition of the Non-Operating Assets and
other similar interests in oil and gas properties that may be acquired by the Party pursuant to Article 9, notwithstanding that such items are realized, paid or incurred by the Parties individually. The governing terms and conditions of the Tax
Partnership are set forth in Exhibit “G” hereto. 
 Section 10.2 Tax Information. Joint Development
Operator and each Party Operator shall provide each Development Party, in a timely manner and at each Development Party’s sole expense, with information with respect to Development Operations as such Development Party may reasonably request for
preparation of its tax returns or responding to any audit or tax proceeding with respect to Asset Taxes. 
 Section 10.3
Responsibility for Taxes. Each Party shall be responsible for reporting and discharging its own tax measured by the income of the Party attributable to it from the Tax Partnership and the satisfaction of such Party’s share of all
contract obligations under this Agreement and the Associated Agreements. Each Party shall protect, defend, and indemnify each other Party from and against any and all losses, costs, and liabilities arising from the indemnifying Party’s failure
or refusal to report and discharge such taxes or satisfy such obligations. 
 ARTICLE 11 

TERM 

This Agreement shall terminate on January 1, 2020, unless earlier terminated pursuant to Section 5.5 or by the written
agreement of all of the Parties; provided that (a) except as provided in Section 5.5 (in the event that this Agreement is terminated pursuant to such Section), the termination of this Agreement or any provision thereof shall not relieve
any Party, Entity Member or Joint Entity from any expense, liability or other obligation or remedy therefor which has accrued or attached prior to the date of such termination, (b) except in connection with a termination of this Agreement
pursuant to Section 5.5, as among BG and EXCO and any other Person who becomes a Development Party or Entity Member hereunder prior to the termination 

 

 56 

 
of this Agreement (but not as to any successor or assign or such Person following the termination of this Agreement) and any Joint Entity, the provisions of each of (i) Sections 3.5(f), 4.9
and 9.3, and (ii) Articles 8, 10, 12, 13 and 14, in each case to the extent applicable to such Person, shall survive such termination and remain in full force and effect with respect to each of those Leases in which more than one of such
Persons jointly holds an interest or a Joint Entity holds an interest until only one such Person, and no Joint Entity, holds an interest in such Lease (unless earlier terminated by the written agreement of all of the Parties), and (c) the
provisions of each of (i) Section 3.3 (other than Section 3.3(b)) and (ii) Exhibit “G” shall survive such termination and remain in full force and effect with respect to each of those Leases in which more than one of
such Persons jointly holds an interest or a Joint Entity holds an interest until only one such Person, and no Joint Entity, holds an interest in such Lease (unless earlier terminated by the written agreement of all of the Parties). 

ARTICLE 12 

RELATIONSHIP OF THE PARTIES 

The rights, duties, obligations and liabilities of the Parties under this Agreement shall be individual, not joint or collective. It is
not the intention of the Parties to create, nor shall this Agreement be deemed or construed to create, a mining or other partnership (other than the Tax Partnership created pursuant to Section 10.1), joint venture or association or a trust.
This Agreement shall not be deemed or construed to authorize any Party to act as an agent, servant or employee for any other Party for any purpose whatsoever except as explicitly set forth in this Agreement. In their relations with each other under
this Agreement, the Parties shall not be considered fiduciaries except as expressly provided in the next to last sentence of Section 9.3. 

ARTICLE 13 

GOVERNING LAW; DISPUTE RESOLUTION; EXPERT PROCEEDINGS 

Section 13.1 Governing Law. THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE THAT MIGHT REFER CONSTRUCTION OF SUCH PROVISIONS TO THE LAWS OF ANOTHER JURISDICTION. ALL OF THE PARTIES HERETO CONSENT TO THE EXERCISE OF
JURISDICTION IN PERSONAM BY THE COURTS OF THE STATE OF TEXAS FOR ANY DISPUTE. EACH PARTY HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY DISPUTE. 

Section 13.2 Dispute Resolution. 
  

	 	(a)	Except for matters that are expressly made subject to the dispute resolution procedures set forth in Section 13.3, any Dispute among the Parties shall be resolved
through final and binding arbitration. 

  

	 	(b)	The arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “AAA”) in effect at
the time the arbitration of the Dispute is initiated (the “AAA Rules”). 

  

 57 

	 	(c)	The arbitration shall be conducted by three (3) arbitrators and conducted in Dallas, Texas. Within thirty (30) days of any Party providing notice to the other
Parties of a Dispute, if there are two Parties or two groups of Parties to a Dispute, each Party or group of Parties to such Dispute shall appoint one arbitrator, and the two (2) arbitrators so appointed shall select the third and presiding
arbitrator within thirty (30) days following appointment of the second party-appointed arbitrator. If either Party or group of Parties fails to appoint an arbitrator within the permitted time period, then the missing arbitrator(s) shall be
selected by the AAA as appointing authority in accordance with the AAA Rules. In the event that there are more than two (2) Parties or groups of Parties to an arbitration, the Parties to the arbitration shall endeavor to agree on the
appointment of the three (3) arbitrators within thirty (30) days of the written request for arbitration. In the event the Parties cannot reach agreement on the selection of three (3) arbitrators within the time permitted, all
arbitrators not yet appointed shall be appointed by the AAA in accordance with the AAA Rules. Any arbitrator appointed by the Party-appointed arbitrators or the AAA shall be a member of the Large, Complex Commercial Case Panel of the AAA or a member
of the Center of Public Resources Panel of Distinguished Neutrals. All arbitrators shall be and remain at all times independent and impartial, and, once appointed, no arbitrator shall have any ex parte communications with any of the Parties
concerning the arbitration or the underlying Dispute other than communications directly concerning the selection of the presiding arbitrator, when applicable. All arbitrators shall be qualified by education, training, or experience to resolve the
Dispute. No arbitrator shall have been an employee or consultant to any Party or any of its Affiliates within the five (5) year period preceding the arbitration, or have any financial interest in the Dispute. 

 

	 	(d)	All decisions of the arbitral tribunal shall be made by majority vote. The award of the arbitral tribunal shall be final and binding, subject only to grounds and
procedures for vacating or modifying the award under the Federal Arbitration Act. Judgment on the award may be entered and enforced by any court of competent jurisdiction hereunder. 

 

	 	(e)	Notwithstanding the agreement to arbitrate Disputes in this Section 13.2, any Party may apply to a court for interim measures pending appointment of the
arbitration tribunal, including injunction, attachment, and conservation orders. The Parties agree that seeking and obtaining such court-ordered interim measures shall not waive the right to arbitration. Additionally, the arbitrators (or in an
emergency the presiding arbitrator acting alone in the event one or more of the other arbitrators is unable to be involved in a timely fashion) may grant interim measures including injunctions, attachments, and conservation orders in appropriate
circumstances, which measures may be immediately enforced by court order. Hearings on requests for interim measures may be held in person, by telephone or video conference, or by other means that permit the Parties to present evidence and arguments.
The arbitrators may require any Party to provide appropriate security in connection with such measures. 

  

 58 

	 	(f)	The arbitral tribunal is authorized to award costs, attorneys’ fees, and expert witness fees and to allocate them among the Parties. The award may include
interest, at the Default Interest Rate, from the date of any default, breach, or other accrual of a claim until the arbitral award is paid in full. The arbitrators may not award indirect, consequential, special or punitive damages. Unless otherwise
directed by the arbitral tribunal, each Party shall pay its own expenses in connection with the arbitration. 

  

	 	(g)	All negotiations, mediation, arbitration, and expert determinations relating to a Dispute (including a settlement resulting from negotiation or mediation, an arbitral
award, documents exchanged or produced during a mediation or arbitration proceeding, and memorials, briefs or other documents prepared for the arbitration) are confidential and may not be disclosed by the Parties, their respective Affiliates and
each of their respective employees, officers, directors, counsel, consultants, and expert witnesses, except to the extent necessary to enforce any settlement agreement, arbitration award, or expert determination, to enforce other rights of a Party,
as required by law or regulation, or for a bona fide business purpose, such as disclosure to accountants, shareholders, or third-party purchasers, provided, however, that breach of this confidentiality provision shall not void any settlement, expert
determination, or award. 

  

	 	(h)	Any papers, notices, or process necessary or proper for an arbitration hereunder, or any court action in connection with an arbitration or an award, may be served on a
Party in the manner set forth in Section 14.2. 

  

	 	(i)	If the subject matter of any Dispute among the Parties arises from facts or issues materially related to the subject matter of a Dispute (as defined in the Joint Entity
Agreement for any Joint Entity) among the Entity Members of the Joint Entity, then the two proceedings shall be consolidated into a single arbitration proceeding pursuant to the terms of this Agreement. 

Section 13.3 Expert Proceedings. For any decision referred to an expert under this Agreement, the Parties hereby agree
that such decision shall be conducted expeditiously by an expert selected unanimously by the Development Parties. The expert is not an arbitrator of the dispute and shall not be deemed to be acting in an arbitral capacity. The expert shall not
(without the written consent of the Development Parties) be appointed to act as an arbitrator or as adviser to any Development Party arbitrated pursuant to Section 13.2, provided that nothing in this sentence shall preclude any Development
Party from using the expert as a witness regarding the proper conduct of the expert procedure. The Development Party desiring an expert determination shall give the other Development Party written notice of the request for such determination. If the
Development Parties are unable to agree upon an expert within ten (10) days after receipt of the notice of request for an expert determination, then, upon the request of any of the Development Parties, the AAA shall appoint such expert. The
expert, once appointed, shall have no ex parte communications with the Development Parties concerning the expert determination or the underlying dispute. All communications between any Development Party and the expert shall be conducted in writing,
with copies sent simultaneously to the other Development Party in the same manner, or at a meeting to which all Development Parties have 

 

 59 

 
been invited and of which such Development Parties have been provided at least five (5) Business Days notice. Within thirty (30) days after the expert’s acceptance of its
appointment, the Development Parties shall provide the expert with a report containing their proposal for the resolution of the matter and the reasons therefor, accompanied by all relevant supporting information and data. Within sixty (60) days
of receipt of the above-described materials and after receipt of additional information or data as may be required by the expert, the expert shall select the proposal which it finds more consistent with the terms of this Agreement. The expert may
not propose alternate positions or award damages, interest or penalties to any Party with respect to any matter. The expert’s decision shall be final and binding on the Development Parties. Any Party that fails or refuses to honor the decision
of an expert shall be in default under this Agreement. 
 ARTICLE 14 

MISCELLANEOUS 

Section 14.1 Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart
hereof shall be deemed to be an original instrument, but all of such counterparts shall constitute for all purposes one agreement. Any signature hereto delivered by a Party by facsimile transmission shall be deemed an original signature hereto.

 Section 14.2 Notices. All notices and communications required or permitted to be given hereunder,
excluding any notices under Article 4 hereof (which notices shall be governed by the provisions of Section 4.1(o) hereof), shall be sufficient in all respects if given in writing and delivered personally, or sent by bonded overnight courier, or
mailed by U.S. Express Mail or by certified or registered United States Mail with all postage fully prepaid, or sent by telex or facsimile transmission (provided any such telex or facsimile transmission is confirmed either orally or by written
confirmation), addressed to the appropriate Party at the address for such Party shown below or at such other address as such Party shall have theretofore designated by written notice delivered to the Party giving such notice: 

If to EXCO: 
  

					
		 	EXCO Holding (PA), Inc.
		 	12377 Merit Drive, Suite 1700
		 	Dallas, Texas 75251
		 	Attention:	 	Rick Hodges, Vice President of Land
		 	Telephone:	 	(214) 368-2084
		 	Fax:	 	(214) 706-3424

  

 60 

			
	with a copies to:
	
	EXCO Resources, Inc.
	12377 Merit Drive, Suite 1700
	Dallas, Texas 75251
	Attention:	  	William L. Boeing, Vice President,
		  	General Counsel, and Secretary
	Telephone:	  	(214) 368-2084
	Fax:	  	(214) 706-3409
		
	and	  	
	
	Vinson & Elkins L.L.P.
	2500 First City Tower
	1001 Fannin Street
	Houston, Texas 77002-6760
	Attention:	  	Stephen C. Szalkowski
	Telephone:	  	(713) 758-2312
	Fax:	  	(713) 615-5084

If to BG: 
  

					
		 	BG US Production Company, LLC
		 	5444 Westheimer, Suite 1200
		 	Houston, Texas 77056
		 	Attention:	  	Jon Harris
		 	Telephone:	  	(713) 599-4000
		 	Fax:	  	(713) 599-4250
		
		 	with copies to:
		
		 	BG US Production Company, LLC
		 	5444 Westheimer, Suite 1200
		 	Houston, Texas 77056
		 	Attention:	  	Bill Way
		 	Telephone:	  	(713) 599-4000
		 	Fax:	  	(713) 599-4250
			
		 	and	  	
		
		 	BG US Production Company, LLC
		 	5444 Westheimer, Suite 1200
		 	Houston, Texas 77056
		 	Attention:	  	Chris Migura, Principal Counsel
		 	Telephone:	  	(713) 599-4000
		 	Fax:	  	(713) 599-4250

  

 61 

 If to the Company: 

 

			
	EXCO Resources (PA), LLC
	3000 Ericsson Dr., Suite 200
	Warrendale, Pennsylvania 15086
	Attention:	  	President and General Manager
	Telephone:	  	(724) 720-2500
	Fax:	  	(724) 720-2505
	
	With a copy to:
		
	Attention:	  	Vice President, Legal
	Telephone:	  	(724) 720-2500
	Fax:	  	(724) 720-2505

 Any notice given in accordance herewith
(including any notice given to a Credit Facility Secured Party) shall be deemed to have been given when delivered to the addressee in person, or by courier, or transmitted by facsimile transmission during normal business hours, or upon actual
receipt by the addressee after such notice has been deposited in the United States Mail, as the case may be. The Parties may change the address, telephone numbers, and facsimile numbers to which such communications are to be addressed by giving
written notice to the other Parties in the manner provided in this Section 14.2. Notice given to a Development Party shall be deemed to be notice to its affiliated Entity Members for all purposes under this Agreement. Notice to any Joint Entity
shall be accomplished by notice to each of its Entity Members. 
 Section 14.3 Expenses. Except
as otherwise specifically provided, all fees, costs and expenses incurred by the Parties in negotiating this Agreement shall be paid by the Party incurring the same, including legal and accounting fees, costs and expenses. 

Section 14.4 Waivers; Rights Cumulative. Any of the terms, covenants, or conditions hereof may be waived only by a
written instrument executed by or on behalf of the Party waiving compliance. No course of dealing on the part of any Development Party, or their respective officers, employees, agents, or representatives, nor any failure by a Development Party to
exercise any of its rights under this Agreement shall operate as a waiver thereof or affect in any way the right of such Party at a later time to enforce the performance of such provision. No waiver by any Party of any condition, or any breach of
any term or covenant contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of any breach of any other
term or covenant. The rights of the Development Parties under this Agreement shall be cumulative, and the exercise or partial exercise of any such right shall not preclude the exercise of any other right. 

Section 14.5 Entire Agreement; Conflicts. THIS AGREEMENT, THE EXHIBITS HERETO, THE TRANSFER AGREEMENT AND THE
ASSOCIATED AGREEMENTS COLLECTIVELY CONSTITUTE THE ENTIRE AGREEMENT AMONG THE DEVELOPMENT PARTIES PERTAINING TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ALL PRIOR AGREEMENTS, UNDERSTANDINGS, NEGOTIATIONS, AND

  

 62 

 
DISCUSSIONS, WHETHER ORAL OR WRITTEN, OF THE PARTIES PERTAINING TO THE SUBJECT MATTER OF THIS AGREEMENT. THERE ARE NO WARRANTIES, REPRESENTATIONS, OR OTHER AGREEMENTS AMONG THE PARTIES RELATING
TO THE SUBJECT MATTER OF THIS AGREEMENT EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, AND NO DEVELOPMENT PARTY SHALL BE BOUND BY OR LIABLE FOR ANY ALLEGED REPRESENTATION, PROMISE, INDUCEMENT, OR STATEMENTS OF INTENTION NOT SO SET FORTH. IN THE
EVENT OF A CONFLICT BETWEEN: (A) THE TERMS AND PROVISIONS OF THIS AGREEMENT AND THE TERMS AND PROVISIONS OF ANY EXHIBIT HERETO; OR (B) THE TERMS AND PROVISIONS OF THIS AGREEMENT AND THE TERMS AND PROVISIONS OF ANY ASSOCIATED AGREEMENT, THE
TERMS AND PROVISIONS OF THIS AGREEMENT SHALL GOVERN AND CONTROL, PROVIDED, HOWEVER, THAT THE INCLUSION IN ANY OF THE EXHIBITS HERETO OR ANY ASSOCIATED AGREEMENT OF TERMS AND PROVISIONS NOT ADDRESSED IN THIS AGREEMENT SHALL NOT BE DEEMED A CONFLICT,
AND ALL SUCH ADDITIONAL PROVISIONS SHALL BE GIVEN FULL FORCE AND EFFECT, SUBJECT TO THE PROVISIONS OF THIS SECTION 14.5. 

Section 14.6 Amendment. This Agreement may be amended only by an instrument in writing executed by all of the Parties
and expressly identified as an amendment or modification. The written approval of the Entity Members or the Joint Entities shall not be required to amend this Agreement. 

Section 14.7 Parties in Interest. Nothing in this Agreement shall entitle any Person other than the Parties to any
claim, cause of action, remedy or right of any kind, except that the Member Entity and Joint Entities shall be entitled to enforce, in accordance with Article 13, the rights expressly applicable to them. 

Section 14.8 Successors and Permitted Assigns. This Agreement shall be binding upon and inure to the benefit of the
Parties and their successors and permitted assigns. 
 Section 14.9 Confidentiality. 

 

	 	(a)	The Parties agree that all information related to Development Operations in which any Development Party or Joint Entity is participating shall be considered
confidential, shall be kept confidential and shall not be disclosed during the term of this Agreement to any Person that is not a Party, except: 

  

	 	(i)	to an Affiliate of a Party; 

  

	 	(ii)	to the extent such information is required to be furnished in compliance with applicable Law, or pursuant to any legal proceedings or because of any order of any
Governmental Authority binding upon a Party; 

  

	 	(iii)	to prospective or actual attorneys engaged by any Party where disclosure of such information is essential to such attorney’s work for such Party;

  

 63 

	 	(iv)	to prospective or actual contractors and consultants engaged by any Party where disclosure of such information is essential to such contractor’s or
consultant’s work for such Party; 

  

	 	(v)	to a bona fide prospective transferee of a Party’s Joint Development Interest, a Material Interest or an Other Interest to the extent appropriate in order to allow
the assessment of such Joint Development Interest, Material Interest or Other Interest (including a Person with whom a Party and/or its Affiliates are conducting bona fide negotiations directed toward a merger, consolidation or the sale of a
majority of its or an Affiliate’s shares); 

  

	 	(vi)	to a bank or other financial institution to the extent appropriate to a Party arranging for funding; 

 

	 	(vii)	to the extent such information must be disclosed pursuant to any rules or requirements of any stock exchange having jurisdiction over such Party or its Affiliates;
provided that if any Party desires to disclose information in an annual or periodic report to its or its Affiliates’ shareholders and to the public and such disclosure is not required pursuant to any rules or requirements of any stock exchange,
then such Party shall comply with Section 14.10; 

  

	 	(viii)	to its respective employees for the purpose of conducting Development Operations, subject to each Party taking customary precautions to ensure such information is kept
confidential; and 

  

	 	(ix)	any information which, through no fault of a Party, becomes a part of the public domain. 

 

	 	(b)	Disclosure as pursuant to Sections 14.9(a)(iv), (v) and (vi) shall not be made unless prior to such disclosure the disclosing Party has obtained a written
undertaking from the recipient to keep the information strictly confidential for the term of this Agreement and to use the information for the sole purpose described in Sections 14.9(a)(iv), (v) and (vi), whichever is applicable, with respect
to the disclosing Party. 

 Section 14.10 Publicity. 

 

	 	(a)	Without reasonable prior notice to the other Parties, no Party will issue, or permit any agent or Affiliate of it to issue, any press releases or otherwise make, or
cause or permit any agent or Affiliate of it to make, any public statements with respect to this Agreement, the Associated Agreements or the activities contemplated hereby or thereby, except where such release or statement is deemed in good faith by
the releasing Party to be required by Law or under the rules and regulations of a recognized stock exchange on which shares of such Party or any of its Affiliates are listed, and in any case, prior to making any such press release or public
statement, the releasing Party shall provide a copy of the press release or public statement to the other Parties. 

  

 64 

	 	(b)	Notwithstanding anything to the contrary in Section 14.9 or Section 14.10(a), any Party or Affiliate of a Party may disclose information regarding Development
Operations in investor presentations, industry conference presentations or similar disclosures, provided that not less than twenty-four (24) hours, or forty-eight (48) hours, if practicable, excluding in each case Saturday and Sunday,
prior to so disclosing any such information, the releasing Party shall provide a copy of the presentation or other disclosure document containing such information to the other Parties. 

 

	 	(c)	Notwithstanding anything to the contrary in Section 14.9 or Section 14.10(a), in the event of any emergency endangering property, lives or the environment,
Joint Development Operator may issue such press releases or public announcements as it deems necessary in light of the circumstances and shall promptly provide each Party with a copy of any such press release or announcement.

 Section 14.11 Preparation of Agreement. Both EXCO and BG and their respective counsel
participated in the preparation of this Agreement. In the event of any ambiguity in this Agreement, no presumption shall arise based on the identity of the draftsman of this Agreement. 

Section 14.12 Conduct of the Parties; Business Principles. 

 

	 	(a)	Each Party warrants that it and its Affiliates have not made, offered, or authorized and agrees that it will not make, offer, or authorize with respect to the matters
which are the subject of this Agreement, any payment, gift, promise or other advantage, whether directly or through any other Person, to or for the use or benefit of any public official (being any person holding a legislative, administrative or
judicial office, including any person employed by or acting on behalf of a public agency, a public enterprise or public international organization) or any political party or political party official or candidate for office, where such payment, gift,
promise or advantage would violate any applicable Law. 

  

	 	(b)	Prior to the Closing Date, each Development Party provided the others with a copy of its business principles governing its general conduct of operations and business
dealings, and each Development Party acknowledges receipt and awareness of the other Development Party’s business principles. Within one hundred twenty (120) days from the Closing Date, the Development Parties agree to use reasonable
efforts to meet and agree a common set of general principles governing the conduct of operations under this Agreement. 

Section 14.13 Severability. If any term or other provision of this Agreement is invalid, illegal, or incapable of
being enforced by any rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not
affected in any adverse manner to any Party. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible. 
  

 65 

 Section 14.14 Non-Compensatory Damages. None of the Parties shall be
entitled to recover from any other Party, or such Parties respective Affiliates, any indirect, consequential, punitive or exemplary damages or damages for lost profits of any kind arising under or in connection with this Agreement, the Associated
Agreements or the transactions contemplated hereby or thereby, except to the extent any such Party suffers such damages (including costs of defense and reasonable attorney’s fees incurred in connection with defending of such damages) to a third
party, which damages (including costs of defense and reasonable attorney’s fees incurred in connection with defending against such damages) shall not be excluded by this provision as to recovery hereunder. Subject to the preceding sentence,
each Development Party, on behalf of itself and each of its Affiliates, waive any right to recover punitive, special, exemplary and consequential damages, including damages for lost profits, arising in connection with or with respect to this
Agreement, the Associated Agreements or the transactions contemplated hereby and thereby. 
 Section 14.15 Excluded
Assets. For the avoidance of doubt, no Excluded Asset shall be subject to the terms of this Agreement or any Joint Development Operating Agreement. 

[Signature Page Follows] 
  

 66 

 IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly authorized
representatives on the Closing Date. 
  

			
	BG PRODUCTION COMPANY (PA), LLC
		
	By:	 	 /s/ WILLIAM L. BOEING

	Name:	 	William L. Boeing
	Title:	 	Vice President and Secretary
	
	BG PRODUCTION COMPANY (WV), LLC
		
	By:	 	 /s/ WILLIAM L. BOEING

	Name:	 	William L. Boeing
	Title:	 	Vice President and Secretary
	
	EXCO PRODUCTION COMPANY (PA), LLC
		
	By:	 	 /s/ WILLIAM L. BOEING

	Name:	 	William L. Boeing
	Title:	 	Vice President and Secretary
	
	EXCO PRODUCTION COMPANY (WV), LLC
		
	By:	 	 /s/ WILLIAM L. BOEING

	Name:	 	William L. Boeing
	Title:	 	Vice President and Secretary
	
	EXCO RESOURCES (PA), LLC
		
	By:	 	 /s/ WILLIAM L. BOEING

	Name:	 	William L. Boeing
	Title:	 	Vice President and Secretary

 ATTACHED TO AND MADE
PART OF THE JOINT DEVELOPMENT AGREEMENT BY AND AMONG BG PRODUCTION COMPANY (PA),
LLC, BG PRODUCTION COMPANY (WV), LLC, EXCO PRODUCTION COMPANY (PA), LLC, EXCO PRODUCTION COMPANY (WV), LLC AND EXCO RESOURCES
(PA), LLC 
 APPENDIX I 

DEFINITIONS 

“AAA” has the meaning set forth in Section 13.2(b). 

“AAA Rules” has the meaning set forth in Section 13.2(b). 

“Acquired Interest” has the meaning set forth in Section 9.2(a). 

“Acquired Party” has the meaning set forth in Section 8.2(a). 

“Acquiring Development Party” has the meaning set forth in Section 9.2(a). 

“Acquiror” has the meaning set forth in Section 8.2(a). 

“Acquisition” means any lease, sublease, purchase, farmout, farmin or other acquisition of Oil and Gas Assets, but excluding any Equity
Acquisition. 
 “Additional Deposit” means, with respect to each Development Party and Entity Member, an amount equal to the
EXCO Deposit or the BG Deposit, as applicable, as determined by the Joint Development Operator for the first day of such Calendar Month, minus the estimated amount of Deposit Funds in the Joint Operations Account attributable to such Person (after
taking into consideration the reconciliations provided for in Section 2.3(f)) as determined by the Joint Development Operator for the first day of such Calendar Month. 

“Additional Interests” has the meaning set forth in the Transfer Agreement. 

“AFE” means an authorization for expenditure. 

“Affected Party” means any (a) non-defaulting Development Party who either operates or owns an interest in the Development
Assets affected by a default by another Development Party and which is not itself in default (either under the terms of this Agreement or any Associated Agreement) and (b) any non-defaulting Entity Member that owns an interest in a Joint Entity
affected by a default by another Entity Member of such Joint Entity and which is not itself in default (either under the terms of this Agreement or any Associated Agreement), in each case at the time in question.  

“Affiliate” means, with respect to any Person, a Person that directly or indirectly, through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such Person. 
 “Agreement” means this Amended and Restated Joint Development
Agreement. 
  

 I-1 

 “AMI Area” means the lands (and subsurface) included in the States of New York,
Pennsylvania and West Virginia, provided that the AMI Area shall not include any Lease or other property that is an Excluded Asset.  

“Annual Work Program and Budget” means, for any Calendar Year, the work program and budget for Joint Development Operations during such
Calendar Year. 
 “Appalachian Area” means the lands (and subsurface) included in the States of Kentucky, New York,
Ohio, Pennsylvania, Tennessee, Virginia and West Virginia, provided that the Appalachian Area shall not include any Lease or other property that is an Excluded Asset.  

“Appalachian Overhead” means (a) all Technical Services Costs and (b) the Company Overhead.  

“Applicable BG Deposit Period” means, with respect to the relevant Calendar Month, the period beginning on the first day of the
succeeding Calendar Month and ending on the last day of the third Calendar Month following such succeeding Calendar Month. 

“Applicable EXCO Deposit Period” means, with respect to any relevant Calendar Month, the period beginning on the first day of the
succeeding Calendar Month and ending on the last day of the third Calendar Month following such succeeding Calendar Month. 

“Applicable Operating Agreements” means, collectively, the Joint Development Operating Agreements and all Third Party Operating
Agreements, and “Applicable Operating Agreement” means any of them. 
 “Area-Wide Operation” means a
seismic or other geophysical data acquisition operation, or other similar operation, including geophysical surveys, microseismic monitoring and core sampling and analysis conducted by the Development Parties in accordance with this Agreement with
respect to the Appalachian Area and covering areas subject to more than one Applicable Operating Agreement, or areas subject presently to no Applicable Operating Agreement.  

“Asset Taxes” means ad valorem, property, excise, severance, production or similar taxes (including any interest, fine, penalty or
additions to tax imposed by Governmental Authorities in connection with such taxes) based upon operation or ownership of the Non-Operating Assets or the production of hydrocarbons therefrom, but excluding, for the avoidance of doubt, income, capital
gains and franchise taxes. 
 “Associated Agreements” means, collectively, the Applicable Operating Agreements, the
Joint Entity Agreements, the Secondment Agreements and any other agreements entered into by all Development Parties or any Joint Entity with any third parties in furtherance of the conduct of Joint Development Operations, and “Associated
Agreement” means any of them.  
 “Assumption Agreement” has the meaning set forth in Section 6.2(b).

  

 I-2 

 “Bankruptcy Code” means Title 11 of the United States Code. 

“BG” has the meaning set forth in the Preamble. 

“BGPA” has the meaning set forth in the Preamble. 

“BGWV” has the meaning set forth in the Preamble. 

“BG Deposit” means, as of any given time, an amount equal to (a) BG’s share, and each BG Member’s Percentage Interest
share of any Joint Entity’s share, of the estimated amount of expenditures anticipated to be incurred in respect of Development Operations (other than Appalachian Overhead and Operating Expenses) during the Applicable BG Deposit Period, based
upon the Development Work Program, the applicable Annual Work Program and Budget, previously issued AFEs and any Sole Risk Development Operation or Sole Risk Entity Operation in which BG or a BG Member participates; provided that, prior to the Carry
Termination Event, BG’s share, and each BG Member’s share of any Joint Entity’s share, shall include the Estimated Carried Costs for such period, and (b) BG’s JDA Interest share of the estimated Appalachian Overhead and
Operating Expenses for the Applicable BG Deposit Period. 
 “BG Group Assets” means, at any time, the interests of BG and its
Affiliates in (a) BGPA and BGWV, (b) any Oil and Gas Assets, (c) any Membership Interests and (d) Appalachia Midstream LLC. 

“BG Guarantor” means BG North America, LLC, a Delaware limited liability Company. 

“BG JDA Guaranty” means the Guaranty made by BG Guarantor in favor of EXCO and any successors-in-interest in substantially the form of
Exhibit “A”. 
 “BG Member” means the Entity Member of a Joint Entity that is BG or an Affiliate of BG. 

“BG Parent” has the meaning set forth in the Recitals. 

“Business Day” means a day (other than a Saturday or Sunday) on which commercial banks in Texas are generally open for business,
provided that if Business Days are used to calculate periods in which a Party must make a payment hereunder, “Business Day” shall mean a day (other than a Saturday or Sunday) on which commercial banks in Texas and London are
generally open for business. 
 “Calendar Month” means any of the months of the Gregorian calendar. 

“Calendar Quarter” means a period of three (3) consecutive Calendar Months commencing on the first day of January, the first day of
April, the first day of July and the first day of October in any Calendar Year. 
  

 I-3 

 “Calendar Year” means a period of twelve (12) consecutive Calendar Months commencing
on the first day of January and ending on the following 31st day of December, according to the Gregorian calendar. 
 “Capital
Contributions” means, with respect to any Entity Member, amounts contributed, or to be contributed, by such Entity Member to a Joint Entity under the terms of the Joint Entity Agreement for such Joint Entity (subject to the terms of this
Agreement). 
 “Carried Cost Default” has the meaning set forth in Section 5.5(a). 

“Carried Cost Default Notice” has the meaning set forth in Section 5.5(a). 

“Carried Cost Election Notice” has the meaning set forth in Section 5.5(a). 

“Carried Costs” has the meaning set forth in Section 2.2. 

“Carried Costs Balance” means, as of any time, the difference between the Carried Costs Obligation and the aggregate Carried Costs paid
by BG and the BG Members as of such time. 
 “Carried Costs Obligation” means one hundred fifty million dollars
($150,000,000), as such amount may be decreased from time to time pursuant to Article XI and/or Article XII of the Transfer Agreement.  

“Carry Termination Event” has the meaning set forth in Section 2.2. 

“Cash Transfer” means any Transfer of any Joint Development Interest where the sole consideration (other than the assumption of
obligations relating to the transferred Joint Development Interest) takes the form of cash, cash equivalents, promissory notes or retained interests (such as production payments) in the Joint Development Interest being transferred. 

“Cash Value” means the market value (expressed in U.S. dollars) of all or a portion of a Joint Development Interest subject to the
proposed Transfer or Change in Equity Ownership, based upon the amount that a willing buyer would pay a willing seller in an arm’s length transaction. 

“Change in Equity Ownership” means any direct or indirect change in Equity Ownership of a Person (whether through merger, sale of shares
or other equity interests, or otherwise), through a single transaction or series of related transactions, from one or more transferors to one or more transferees; provided, however, that for purposes hereof, a “Change in Equity Ownership”
shall not include a change in Equity Ownership of a Person (a) resulting from a management-led buyout of the public share ownership of such Person and conversion of such Person to a privately-held company, (b) resulting in ongoing Equity
Ownership by a Wholly-Owned Affiliate that is wholly-owned by the ultimate parent company of such Person, (c) created by a change in Equity Ownership of the ultimate parent company of such Person, or (d) for purposes of Article VII and
Article VIII, resulting from a Credit Facility Foreclosure. For the avoidance of doubt, as of the 
  

 I-4 

 
Closing Date, the ultimate parent company of BG is BG Group plc, a public limited company organized and existing under the Laws of England and Wales, and the ultimate parent company of EXCO is
EXCO Resources, Inc., a corporation organized and existing under the Laws of Texas. 
 “Closing Date” has the meaning set forth
in the Preamble. 
 “Company” has the meaning set forth in the Preamble. 

“Company Overhead” means (a) all costs of the Company pursuant to any Secondment Agreement, (b) all costs attributable
to salaries, wages and benefits of the employees of the Company and (c) general corporate overhead costs of the Company, including taxes, insurance, financing costs and overhead costs attributable to its corporate and field offices (but only
those located within the Appalachian Area).  
 “Contract Operating Agreement” has the meaning set forth in
Section 3.4(g). 
 “Contract Operator” means the operator under any Contract Operating Agreement.

 “Control” and its derivatives with respect to any Person means the possession, directly or indirectly, of the
power to exercise or determine the voting of more than fifty percent (50%) of the voting rights in a corporation, and, in the case of any other type of entity, the right to exercise or determine the voting of more than fifty percent
(50%) of the equity interests having voting rights, or otherwise to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise, provided that no Person shall be deemed to “Control” a
Joint Entity unless such Person has the power to exercise or determine the voting of equity interests having voting rights sufficient to determine annual expenditures of such Joint Entity and to appoint and remove the officers of such Joint
Entity. 
 “Credit Facility Encumbrance” means Encumbrances created pursuant to any material borrowing arrangement
entered into by any Development Party and/or its Affiliates with a third party that is not an Affiliate of such Development Party or its Affiliates, as such arrangement may be amended, restated, amended and restated, modified, refinanced,
supplemented or replaced from time to time. For the avoidance of doubt, as of the Closing Date, the only Credit Facility Encumbrances burdening the Joint Development Interests are those Encumbrances created pursuant to the Existing EXCO Credit
Facility (provided that such Encumbrances shall not burden the BG Group Assets, the Operating Assets or any other assets of the Company, any assets of any other Joint Entity, or the Gathering Assets or any other assets of Appalachia Midstream LLC).

 “Credit Facility Foreclosure” means any transfer or other disposition of (a) the interests of a Development
Party and its Affiliates in the Joint Development Interests or (b) the Equity Ownership of a Development Party or its Affiliates pursuant to a Credit Facility Encumbrance and any related mortgages, pledge agreements, security agreements and
other agreements evidencing such Credit Facility Encumbrances following the occurrence and continuation of a default or event of default under the borrowing arrangement secured thereby.  

 

 I-5 

 “Credit Facility Secured Party” means any Person, other than an Affiliate of a Development
Party, that is identified in a written notice to the Development Parties by such Person or a Development Party as the holder or beneficiary of a Credit Facility Encumbrance. 

“Deep Rights” means (a) with respect to the Commonwealth of Pennsylvania, those subsurface depths that are below the base of (but
excluding) the Haskill Sandstone Formation (Base of Elk Sequence) formation at a measured depth of 2,758’, as identified by the Litho Density Compensated Neutron Array Induction Temperature Log dated June 7, 2005 of the Seneca Resources
operated Fee PGS SGL No. 44 (API 37-047-23649) located in Elk County, Pennsylvania, (b) with respect to the State of West Virginia, those subsurface depths that are below the base of (but excluding) the Brallier Formation (Base of Elk
Sequence) formation at a measured depth of 6,612’, as identified by the Litho Density Compensated Neutron Array Induction Temperature Log dated October 8, 2008 of the EXCO – North Coast Energy, Inc. operated Wentz 4HS (API
47-001-02982) located in Barbour County, West Virginia and (c) with respect to the State of New York, those subsurface depths that are below the base of (but excluding) the Genesee Formation at a measured depth of 2,548’, as identified by
the Density/Neutron, Gamma/Temperature Log dated May 6, 2005 of the Fortuna Energy, Inc. operated Cotton-Hanlon #1 well (API 31-107-23185) located in Tioga County, New York, recognizing that actual depths will vary across the AMI Area.

 “Deep Rights Gathering Assets” means any gathering or pipeline system or related asset used to gather or transport gas
produced from the Deep Rights of New York, Pennsylvania or West Virginia. 
 “Default Interest Rate” means the three month
London Inter-Bank Offer Rate (as published in the “Money Rates” table of the Wall Street Journal, eastern edition) plus an additional five percentage points (5%) applicable on the first Business Day prior to the due date of
payment and thereafter on the first Business Day of each succeeding Calendar Month (or, if such rate is contrary to any applicable usury Law, the maximum rate permitted by such applicable Law). 

“Default Notice” has the meaning set forth in Section 5.1(a). 

“Default Period” has the meaning set forth in Section 5.1(b). 

“Defaulting Party” has the meaning set forth in Section 5.1(a). 

“Delay Rental Notice” has the meaning set forth in Section 9.3. 

“Deposit Funds” mean the money (along with interest accrued thereon) deposited or deemed deposited by the Development Parties, Entity
Members (in connection with Farmout Sole Risk Entity Operations) and Joint Entities into and held in the Joint Operations Account (along with any interest accrued thereon). 

 

 I-6 

 “Development Assets” means all right, title and interest of the Development Parties within
the Appalachian Area in and to the Oil and Gas Assets in which all Development Parties hold an interest, whether held on, or acquired at or after the Closing Date. 

“Development Costs” means costs and expenses incurred in the conduct of Development Operations, including capital costs, Operating
Expenses and other costs and expenses. 
 “Development Operation” means any operation conducted pursuant to any Applicable
Operating Agreement, an Area-Wide Operation conducted pursuant to this Agreement, or the activities represented by Appalachian Overhead. 

“Development Operations Contract” means any contract (or confirm relating to any such contract) to which Joint Development Operator, any
Party Operator or any Contract Operator is a party for which services thereunder are to be used primarily for the conduct of Development Operations. 

“Development Party” and “Development Parties” have the meanings set forth in the Preamble, and following any Transfer
in accordance with this Agreement (other than the Transfer of a Material Interest or Other Interest), the successor or assign of such Transferring Party. 

“Development Work Program” has the meaning set forth in Section 4.2(a). 

“Dispute” means any dispute, controversy, or claim (of any and every kind or type, whether based on contract, tort, statute, regulation,
or otherwise) arising out of, relating to, or connected with this Agreement or Associated Agreement, or the transactions contemplated hereby or thereby, including but not limited to any dispute, controversy or claim concerning the existence,
validity, interpretation, performance, breach, or termination of this Agreement or any Associated Agreement or the relationship of the Parties arising out of this Agreement or the Associated Agreements or the transactions contemplated hereby or
thereby; provided that the term “Dispute” shall not include any disagreement among the Operating Committee with respect to decisions to be made by the Operating Committee. 

“Eligible Costs” means all costs and expenses incurred in accordance with an Applicable Operating Agreement in conducting (a) Joint
Development Operations with respect to the Deep Rights for the drilling, testing, completing, deepening, recompleting, sidetracking, reworking and plugging back of wells, the plugging and abandoning of dry holes or wells no longer capable of
producing in paying quantities, and the equipping of wells for production, and (b) Sole Risk Development Operations or Sole Risk Entity Operations with respect to the Deep Rights conducted by EXCO or an EXCO Member or Sole Risk Entity
Operations by a Joint Entity on behalf of an EXCO Member pursuant to Section 4.1(i) for the drilling, testing, completing, deepening, recompleting, sidetracking, reworking and plugging back of wells, the plugging and abandoning of any dry hole
resulting from such operation or any such well no longer capable of production in paying quantities, and the equipping of such wells for production, in each case including costs of mobilizing and demobilizing drilling and workover rigs to and from
the wellsite if not 
  

 I-7 

 
charged to another operation, and overhead charged under the Applicable Operating Agreement with respect to the costs specifically described above, provided that “Eligible Costs” shall
not include liabilities, losses, claims and damages associated with such activities or otherwise, and related costs of investigation, litigation, arbitration, administrative proceedings, judgment, award and settlement (including court and
arbitration costs and reasonable attorneys’ fees), to the extent attributable to actual or claimed personal injury, illness or death, property damage (other than damage to structures, fences, irrigation systems and other fixtures, crops,
livestock and other personal property in the ordinary course of business), environmental damage or contamination, other torts, breach of contract, violation of Law (or private rights of action under any Law), casualty or condemnation. 

“Encumbrance” means a mortgage, lien, pledge, charge, or other encumbrance. “Encumber” and other derivatives shall be
construed accordingly. 
 “Entitlement” means that quantity of oil and gas from the Development Assets for which a Development
Party has the right to take delivery pursuant to the terms of any Applicable Operating Agreement, any other applicable agreement or applicable Law. 

“Entity Member” means a Development Party or an Affiliate of a Development Party that owns a Membership Interest in an applicable Joint
Entity. 
 “Equity Acquisition” means any acquisition or shares or other equity interests in an entity directly or indirectly
owning Oil and Gas Assets, but excluding any lease, sublease, purchase, farmout, farmin or other similar acquisition. 
 “Equity
Ownership” with respect to any Person means any shares or other equity rights and any other rights to, directly or indirectly, exercise or determine the voting of any percentage of the voting rights in a corporation, and, in the case of any
other type of entity, to exercise or determine the voting of any percentage of the equity interests having voting rights. 
 “Estimated
Carried Costs” means an amount equal to the estimated amount of Carried Costs to be paid by BG or any BG Member in respect to EXCO’s and any EXCO Member’s share, and each EXCO Member’s Percentage Interest share of Capital
Contributions to pay any Joint Entity’s share (other than the Company’s share), of the estimated amount of expenditures anticipated to be incurred in respect of Development Operations (other than Operating Expenses and Appalachian
Overhead) during the Applicable EXCO Deposit Period. 
 “Excluded Asset” has the meaning set forth in the Transfer Agreement.

 “Excluded Interest” means Oil and Gas Assets that are deemed to be “Excluded Interests” pursuant to the terms of
Section 8.1(f), 9.2(f) or 9.3. 
 “EXCO” has the meaning set forth in the Preamble. 

“EXCOPA” has the meaning set forth in the Preamble. 

 

 I-8 

 “EXCOWV” has the meaning set forth in the Preamble. 

“EXCO Deposit” means, as of any given time, an amount equal to (a) EXCO’s share, and each EXCO Member’s Percentage
Interest share of any Joint Entity’s share, of the estimated amount of expenditures anticipated to be incurred in respect of Development Operations (other than Appalachian Overhead and Operating Expenses) during the Applicable EXCO Deposit
Period, based upon the Development Work Program, the applicable Annual Work Program and Budget, previously issued AFEs and any Sole Risk Development Operation or Sole Risk Entity Operation in which EXCO or any EXCO Member participates; provided
that, prior to the Carry Termination Event, EXCO’s share, and each EXCO Member’s share of any Joint Entity’s share, shall exclude the Estimated Carried Costs for such period, and (b) EXCO’s JDA Interest share of the
estimated Appalachian Overhead and Operating Expenses for the Applicable EXCO Deposit Period. 
 “EXCO Guarantor” means EXCO
Resources, Inc., a Texas corporation. 
 “EXCO JDA Guaranty” means the Guaranty made by EXCO Guarantor in favor of BG
and any successors-in-interest in substantially the form of Exhibit “H”. 
 “EXCO Member” means an Entity
Member of a Joint Entity that is EXCO or an Affiliate of EXCO. 
 “EXCO Parent” has the meaning set forth in the Recitals.

 “Existing EXCO Credit Facility” means the Credit Agreement, dated April 30, 2010, among EXCO Parent, as borrower,
JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto, as the same may be amended, restated, amended and restated, modified or supplemented from time to time. 

“Farmout Sole Risk Entity Operation” means a farmout from a Joint Entity to an Entity Member or its affiliated Development Parties where
such Entity Member has elected to participate on a sole risk basis in a Development Operation as permitted under this Agreement. 

“GAAP” means the generally accepted accounting principles in the United States of America, as promulgated or adopted by the Financial
Accounting Standards Board and its predecessors and successors from time to time. 
 “Gathering Assets” has the meaning set
forth in the Transfer Agreement. 
 “Governmental Authority” means any federal, state, local, municipal, tribal or other
government; any governmental, regulatory or administrative agency, commission, body or other authority exercising or entitle to exercise any administrative, executive, judicial, legislative, regulatory or taxing authority or power; and any court or
governmental tribunal, including any tribal authority having or asserting jurisdiction. 
  

 I-9 

 “Hydrocarbons” means oil and gas and other hydrocarbons produced or processed in
association therewith (whether or not any such item is in liquid or gaseous form), or any combination thereof, and any minerals produced in association therewith. 

“Initial Three Year Period” has the meaning set forth in Section 7.1. 

“JDA Interest” means each Development Party’s undivided share of the aggregate rights and obligations of the Development Parties
(other than with respect to Sole Risk Development Operations and Sole Risk Entity Operations) under the terms of this Agreement. 

“Joint Acquisition” means any Oil and Gas Asset acquired by the Joint Development Operator as an Acquisition in the names of the
Development Parties pursuant to an authorization in an Annual Work Program and Budget, as described in Section 4.4(c). 
 “Joint
Development Interest” means, with respect to a Development Party, (a) all of such Development Party’s interest in the Development Assets located within the AMI Area, which shall include for the avoidance of doubt in Articles 6, 7
and 8 proposed Transfers of Material Interests and Other Interests unless otherwise indicated, and (b) any Membership Interest in a Joint Entity owned by the Development Party or an Affiliate of the Development Party. 

“Joint Development Operating Agreement” has the meaning set forth in Section 3.3(a). 

“Joint Development Operations” means Development Operations in which all Development Parties participate and/or in which a Joint Entity
participates. 
 “Joint Development Operator” means the operator appointed pursuant to Section 3.5. 

“Joint Entity” means any corporation, company, partnership, limited partnership, limited liability company, trust, estate, or any
other entity in which each Development Party (or its Affiliates) owns an interest and which owns Oil and Gas Assets in the Appalachian Area, including for avoidance of doubt the Company, but excluding Appalachia Midstream, LLC.  

“Joint Entity Agreement” means the organizational document of a Joint Entity that sets out the rights and obligations of the Entity
Members with respect to the Joint Entity. 
 “Joint Entity Assets” means all right, title and interest of a Joint Entity within
the Appalachian Area in and to the Oil and Gas Assets in which a Joint Entity holds an interest, whether held on, or acquired at or after the Closing Date. 

“Joint Operations Account” means an account established by the Joint Development Operator into which payments of the Development Parties
pursuant to Section 2.3 are to be deposited. 
 “Laws” means any constitution, decree, resolution, law, statute, act,
ordinance, rule, directive, order, treaty, code or regulation and any injunction or final non-appealable judgment or any interpretation of the foregoing, as enacted, issued or promulgated by any Governmental Authority. 

 

 I-10 

 “Lease” means any oil and gas lease, oil, gas and mineral lease or sublease, royalty,
overriding royalty, production payment, net profits interest, mineral fee interest, carried interest, mineral servitude or other right to oil and gas in place. 

“Maintaining Party” has the meaning set forth in Section 9.3. 

“Management Board” means the governing body of any Joint Entity. 

“Material Event” means, with respect to Joint Development Operator, that Joint Development Operator or any direct or indirect
Controlling parent of Joint Development Operator: (a) is dissolved (other than pursuant to an internal reorganization in the ordinary course of business which does not result in a Change in Equity Ownership of such entity); (b) becomes
insolvent or is unable to pay its debts or fails to pay or admits in writing its inability generally to pay its debts as they become due; (c) makes a general assignment, arrangement or composition with or for the benefit of its creditors;
(d) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented
for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (i) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or
the making of an order for its winding-up or liquidation or (ii) is not dismissed, discharged, stayed or restrained in each case within thirty (30) days of the institution or presentation thereof; (e) has a resolution passed for its
winding up, official management pursuant to an applicable statutory remedy or liquidation (other than pursuant to an internal reorganization in the ordinary course of business which does not result in a Change in Equity Ownership of such entity);
(f) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or a substantial portion of its assets; (g) has a secured
party take possession of all or a substantial portion of its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or a substantial portion of its assets and such secured
party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within thirty (30) days thereafter; or (h) causes or is subject to any event with respect to it which, under the applicable
laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (a) through (g). 
 “Material
Interest” means, with respect to any Development Party, any overriding royalty interest, production payment, net profits interest or similar non-possessory interest that is carved out of such Development Party’s mineral, working or
leasehold interests constituting Joint Development Interests in the Development Assets, the Transfer of which interest would convey a material portion of the value of the Development Party’s Joint Development Interest in such Development
Assets. 
  

 I-11 

 “Membership Interest” means the equity ownership interest in a Joint Entity held by an
Entity Member. 
 “Monthly Statement” has the meaning set forth in Section 2.3(f). 

“Newco Consideration” has the meaning set forth in the Transfer Agreement. 

“Non-Acquiring Development Party” has the meaning set forth in Section 9.2(a). 

“Non-Budgeted Operation” has the meaning set forth in Section 4.4(h). 

“Non-Operating Assets” has the meaning set forth in the Transfer Agreement. 

“Non-Releasing Party” has the meaning set forth in Section 9.3. 

“Offered Interest” has the meaning set forth in Section 9.2(a). 

“Offer Notice” has the meaning set forth in Section 9.2(a). 

“Oil and Gas Assets” means all of the following, to the extent located within the Appalachian Area: 

 

	 	(a)	oil, gas and/or mineral leases, subleases, fee interests, fee mineral interests, mineral servitudes, royalties, overriding royalties, production payments, net profits
interests, carried interests, reversionary interests and other interests in oil, gas and/or minerals in place (collectively, “Oil and Gas Interests”), the leasehold estates created by Oil and Gas Interests, lands covered by Oil and
Gas Interests (“Lands”), and interests in any pooled acreage, communitized acreage or units arising on account of Oil and Gas Interests or Lands pooled, communitized or unitized into such units (“Units”);

  

	 	(b)	oil and gas wells and injection wells located on Oil and Gas Interests, Lands or Units (“Wells”), and all Hydrocarbons produced therefrom or allocated
thereto (Oil and Gas Interests, Lands, Units and Wells being collectively referred to hereinafter as “Properties”); 

  

	 	(c)	equipment, machinery, fixtures, and other real, immovable, personal, movable and mixed property primarily used or held for use in connection with Properties, including
saltwater disposal wells, water sourcing and disposal facilities and systems, well equipment, casing, rods, tanks, boilers, buildings, tubing, pumps, motors, fixtures, machinery, compression equipment, flow lines, and separation facilities,
structures, materials, and other items used or held for use in the operation thereof and located upstream of the outlet flange of the relevant custody transfer meter (or, in the case of Hydrocarbon liquids, upstream of the outlet flange in the
tanks); 

  

 I-12 

	 	(d)	surface fee interests, surface leases, easements, rights-of-way, permits, licenses, servitudes, and other surface rights; 

 

	 	(e)	water withdrawal and disposal and other permits, licenses, orders, approvals, variances, waivers, franchises, rights and other authorizations issued by any Governmental
Authority; 

  

	 	(f)	Shallow Rights Gathering Assets; 

  

	 	(g)	contracts primarily relating to any of the other items identified in this definition; 

 

	 	(h)	imbalances at wellheads; 

  

	 	(i)	files, records, maps, information, and data, whether written or electronically stored, relating to any of the other items identified in this definition, including:
(i) land and title records (including abstracts of title, title opinions, and title curative documents); (ii) contract files; (iii) correspondence; (iv) operations, environmental, production, and accounting records and
(v) production, facility and well records and data (including logs and cores); 

  

	 	(j)	geophysical and other seismic and related technical data and information; 

  

	 	(k)	liens and security interests securing payment for the sale or other disposition of Hydrocarbons produced from or allocated to Properties; and 

 

	 	(l)	rights, claims and causes of action to the extent, and only to the extent, that such rights, claims or causes of action are associated with other items identified in
this definition; 

 provided that “Oil and Gas Assets” shall not include any Deep Rights Gathering Assets. 

“Operating Assets” has the meaning set forth in the Transfer Agreement. 

“Operating Committee” means the committee created pursuant to Section 4.1. 

“Operating Expense Multiplier” means, in the case of any Calendar Year (for purposes of this definition, the “relevant
Calendar Year”), the amount obtained by dividing: (a) the number of active wells included in Joint Development Operations as of the end of the preceding Calendar Year, plus the number of wells anticipated to be drilled as Joint
Development Operations in the relevant Calendar Year, minus the number of wells anticipated to be plugged and abandoned pursuant to Joint Development Operations in the first half of the relevant Calendar Year; by (b) the number of active wells
included in Joint Development Operations as of the end of the preceding Calendar Year.  
 “Operating Expenses”
means costs and expenses reasonably necessary to continue operating, maintaining and producing wells and related surface equipment included in the Subject Oil and Gas Assets in a manner consistent with past practices, industry standards and
applicable Law.  
  

 I-13 

 “Other Development Parties” has the meaning set forth in Section 8.2(a). 

“Other Interest” means, with respect to any Development Party, any overriding royalty interest, production payment, net profits interest
or similar non-possessory interest that is carved out of such Development Party’s mineral, working or leasehold interests constituting Joint Development Interests in the Development Assets, the Transfer of which interest would not convey a
material portion of the value of the Development Party’s Joint Development Interest in such Development Assets. 
 “Outside AMI
Rights” means the subsurface depths within the Appalachian Area that are not within the AMI Area. 
 “Participating
Interest” means each Development Party’s, the Company’s and each other Joint Entity’s undivided share of the aggregate rights and obligations of the Development Parties, the Company and each other Joint Entity in any
Development Operation (other than with respect to Sole Risk Development Operations or Sole Risk Entity Operations) under the terms of this Agreement and under the terms of each Applicable Operating Agreement and in any Area-Wide Operation under the
terms of this Agreement. 
 “Participating Party” means with respect to any Development Operation, a Development Party
or a Joint Entity (or, in connection with any Farmout Sole Risk Entity Operation, an Entity Member or its affiliated Development Party) that is participating in such Development Operation, and with respect to any Development Operations Contract, a
Development Party or a Joint Entity (or, in connection with any Farmout Sole Risk Entity Operation, an Entity Member) that is responsible, whether directly or indirectly, for any amounts payable under such Development Operations Contract. 

 “Party” and “Parties” have the meanings set forth in the Preamble. 

“Party Operator” means the Company or any Joint Entity serving in the role of operator under any Applicable Operating Agreement, or as a
Contract Operator or any Person mutually agreed to by the Development Parties pursuant to Section 3.4(d). 
 “Percentage
Interest” means, with respect to each Entity Member, the percentage Membership Interest of such Entity Member in the applicable Joint Entity from time to time. 

“Permitted Expenses” means (a) the funding of costs of (i) Joint Development Operations in which the Development
Parties and/or Joint Entities participate, (ii) Sole Risk Development Operations by one or more Development Parties, and (iii) Sole Risk Entity Operations by or on behalf of any Entity Member or its affiliated Development Parties, in each
case as authorized by the applicable Annual Work Program and Budget(s), the Applicable Operating Agreement or otherwise by the terms of this Agreement; and (b) to fund any other costs authorized to be charged to the applicable Development
Party, Entity Member or Joint Entity for whose account the withdrawn funds were held under the terms of this Agreement.  
  

 I-14 

 “Person” means any individual, corporation, company, partnership, limited partnership,
limited liability company, trust, estate, Governmental Authority or any other entity or organization. 
 “Releasing Party” has
the meaning set forth in Section 9.3. 
 “Required Asset Upgrade” shall have the meaning given to that term in the Joint
Entity Agreement for the Company. 
 “Secondee” means any employee of a Party seconded into the organization of Joint
Development Operator through a Secondment Agreement, which employee shall not be considered an employee of a Development Party providing Technical Services under this Agreement. 

“Secondment Agreement” has the meaning given such term in the Joint Entity Agreement of the Company. 

“Selling Party” has the meaning set forth in Section 9.2(a). 

“Shallow Rights” means those subsurface depths within the AMI Area that are above the Deep Rights. 

“Shallow Rights Gathering Assets” means any gathering or pipeline system or related asset used to gather or transport gas produced in:
(a) New York, Pennsylvania or West Virginia from subsurface depths that are above the Deep Rights; or (b) Kentucky, Ohio, Tennessee, or Virginia. 

“Sole Risk Development Operation” means a Development Operation in which not all Development Parties entitled to a Working Interest in
the applicable Development Operation participate. For the avoidance of doubt, a Development Operation in which no Development Parties own direct Working Interests is not eligible to be considered to be a Sole Risk Development Operation. 

“Sole Risk Entity Operation” means a Development Operation (a) in which a Joint Entity is entitled to participate for a
Working Interest share, (b) which requires approval of either the Entity Members of the Joint Entity or a management board or similar governance body action on their behalf under the terms of the applicable Joint Entity Agreement,
(c) which is proposed for such approval and which fails to receive such approval and (d) in which an Entity Member or Entity Members elect to participate on a sole risk basis as permitted under this Agreement and the applicable Entity
Agreement, either by a Farmout Sole Risk Entity Operation by or by causing the Joint Entity to participate in such operation for the sole account and at the sole risk of such Entity Member or Entity Members, as permitted pursuant to this
Agreement. 
  

 I-15 

 “Standards Asset Upgrade” shall have the meaning given to that term in the Joint Entity
Agreement for the Company. 
 “Subject Oil and Gas Assets” means all Development Assets, all Joint Entity Assets and any
former Joint Entity Assets that are farmed out pursuant to a Farmout Sole Risk Entity Operation.  
 “Tag Assets” has
the meaning set forth in Section 6.1(b). 
 “Tag Notice” has the meaning set forth in Section 6.1(b). 

“Tag Offeree” has the meaning set forth in Section 6.1(b). 

“Tag Offeror” has the meaning set forth in Section 6.1(b). 

“Tag Purchased Assets” has the meaning set forth in Section 6.1(b). 

“Tag Right” has the meaning set forth in Section 6.1(b). 

“Tag Transferee” has the meaning set forth in Section 6.1(b). 

“Tag-Along Transaction “ has the meaning set forth in Section 6.1(b). 

“Tax Partnership” has the meaning set forth in Section 10.1. 

“Technical Services” means, subject to any further description in services agreements between the Company and each Development
Party, (a) services providing specific engineering, geoscience, land, or other exploration, development and/or producing professional skills, such as those performed by engineers, geologists, geophysicists, landmen, and technicians, required to
handle specific operating conditions and problems, and (b) human resources, tax, information technology, legal, HSSE and other administrative services (including those services performed outside of the Appalachian Area), in each case for the
benefit of Development Operations; provided, however, Technical Services shall not include general corporate overhead activities, including senior management, provisions of office space, utilities, insurance, computers and office equipment, and
similar items. 
 “Technical Services Costs” means (a) salaries, wages, mandatory government payroll
burdens, benefits and personal expenses of employees of the Development Parties and their Affiliates providing Technical Services and (b) in the case of human resources, information technology and HSSE, costs associated with providing such
services, but excluding general corporate overhead costs. 
 “Third Party Expense Funds” means, as of any given time,
the balance of funds deposited by the Joint Development Operator into the Joint Operations Account with respect to the payment of any third party expenses after taking into consideration all amounts deposited by the Joint Development Operator into
the Joint Operations Account with respect to such expenses and all payments made from the Joint Operations Account with respect to such expenses. 
  

 I-16 

 “Third Party Operating Agreements” means those operating agreements, other than the Joint
Development Operating Agreement, to which Persons other than the Development Parties, the Joint Entities and Joint Development Operator are parties and which burden the Subject Oil and Gas Assets within the Appalachian Area. 

“Total Amount in Default” means, as of any time, the following amounts: (a) the aggregate amounts that the Defaulting Party and any
applicable Affiliate of a Defaulting Party have failed to pay under the terms of this Agreement and the Associated Agreements as of such time; and (b) any interest at the Default Interest Rate accrued on the amount under (a) from the date
such amount is due by the Defaulting Party until paid in full by the Defaulting Party or any Affiliate of the Defaulting Party. 

“Transfer” means any sale, assignment, or other disposition by a Development Party or an Entity Member of all or any part of its
Joint Development Interest or any other interest in the Development Assets excluding (a) any disposition resulting from a direct or indirect Change in Equity Ownership of a Party, or a change in Equity Ownership created by a change in Equity
Ownership of the ultimate parent company of such Party, (b) any disposition resulting from a Credit Facility Foreclosure, (c) any Encumbrance, and (d) any Farmout Sole Risk Entity Operation. 

“Transfer Agreement” means that certain Membership Interest Transfer Agreement by and between EXCO Parent and BG Parent, dated as of
May 9, 2010. 
 “Treasury Regulations” means the regulations promulgated by the United States Department of the Treasury
pursuant to and in respect of provisions of the Internal Revenue Code of 1986, as amended. All references herein to sections of the Treasury Regulations shall include any corresponding provision or provisions of succeeding, similar, substitute,
proposed or final Treasury Regulations. 
 “Undeveloped Lease” means any oil and gas lease, oil, gas and mineral lease or
sublease, royalty, overriding royalty, production payment, net profits interest, mineral fee interest, carried interest, mineral servitude or other right to oil and gas in place (in each case) with respect to which no oil and gas development
activities have taken place. 
 “Wellbore Operation” means, as such terms are defined or used in the Applicable Operating
Agreement, the sidetracking, deepening, plugging back or recompleting of a wellbore. 
 “Wholly-Owned Affiliate” means, with
respect to any Person, an Affiliate of such Person that is wholly owned, directly or indirectly, by the ultimate parent of such Person. 

“Working Interest” means with respect to any Development Party or any Joint Entity and any Development Operation in which such
Development Party or Joint Entity is participating, such Development Party’s or Joint Entity’s working interest (to the 8/8ths) in such Development Operation. 
  

 I-17Second Amended and Restated Limited Liability Company Agreement

 Exhibit 10.2 

EXECUTION VERSION 

SECOND AMENDED AND RESTATED 

LIMITED LIABILITY COMPANY AGREEMENT 

of 

EXCO RESOURCES (PA), LLC 

Dated as of June 1, 2010 

 TABLE OF CONTENTS 

 

					
	 	  	 	  	Page
	 ARTICLE 1
	  	GENERAL PROVISIONS	  	2
			
	 1.1
	  	Definitions	  	2
			
	 1.2
	  	Formation as a Delaware Limited Liability Company	  	19
			
	 1.3
	  	Name; Registered Agent and Registered Office	  	19
			
	 1.4
	  	Term	  	19
			
	 1.5
	  	Purpose of the Company; Power	  	19
			
	 1.6
	  	Fiscal Year	  	19
			
	 1.7
	  	Title to Company Property	  	19
			
	 1.8
	  	Membership Interests Uncertificated	  	19
			
	 1.9
	  	Qualification in Other Jurisdictions	  	19
			
	 1.10
	  	Principal Office	  	20
			
	 1.11
	  	No State Law Partnership	  	20
			
	 ARTICLE 2
	  	MANAGEMENT	  	20
			
	 2.1
	  	Management under Direction of Management Board	  	20
			
	 2.2
	  	Unanimous Votes	  	20
			
	 2.3
	  	Seventy Five Percent Votes	  	22
			
	 2.4
	  	Number, Tenure and Qualification	  	25
			
	 2.5
	  	Voting Proxies; Quorum; Meetings of Management Board; No Fiduciary Duties	  	26
			
	 2.6
	  	Resignation of Board Members	  	31
			
	 2.7
	  	Removal of Board Members	  	31
			
	 2.8
	  	Vacancies	  	31
			
	 2.9
	  	Fees and Expenses of Board Members	  	31
			
	 2.10
	  	No Power of Members to Bind Company	  	32
			
	 2.11
	  	Delegation of Authority; Officers	  	32
			
	 2.12
	  	Provision of Services by the Members	  	35
			
	 2.13
	  	Standard of Conduct; Health, Safety, Security and the Environment	  	35
			
	 2.14
	  	Conflict of Interest Policy	  	36
			
	 2.15
	  	Certain Reports	  	37
			
	 2.16
	  	Contractor Requirements and Access Rights	  	38
			
	 2.17
	  	Insurance	  	39

  

 -i- 

 TABLE OF CONTENTS 

(continued) 
  

					
	 	  	 	  	Page
	 2.18
	  	Asset Upgrades	  	40
			
	 ARTICLE 3
	  	CONTRACT AWARDS	  	41
			
	 3.1
	  	Contract Awards	  	41
			
	 3.2
	  	Annual Work Program and Budget	  	44
			
	 ARTICLE 4
	  	MEMBERS	  	47
			
	 4.1
	  	Member Information	  	47
			
	 4.2
	  	Opportunities; Activities of the Members	  	47
			
	 ARTICLE 5
	  	CAPITALIZATION	  	47
			
	 5.1
	  	No Withdrawal of Capital Accounts	  	47
			
	 5.2
	  	Initial Capital Contributions	  	47
			
	 5.3
	  	Additional Capital Contributions	  	47
			
	 5.4
	  	Statement of Estimated Expenditures	  	48
			
	 5.5
	  	Default: Failure to Fund Additional Capital Contributions	  	48
			
	 5.6
	  	Certain Consequences of Default	  	49
			
	 5.7
	  	No Interest on or Return of Capital	  	51
			
	 5.8
	  	Limitations upon Liability of Members	  	51
			
	 ARTICLE 6
	  	ALLOCATIONS OF PROFITS AND LOSS	  	51
			
	 6.1
	  	Allocations Generally	  	51
			
	 6.2
	  	Special Allocations	  	52
			
	 6.3
	  	Tax Allocations	  	53
			
	 ARTICLE 7
	  	DISTRIBUTIONS	  	55
			
	 7.1
	  	Declaration and Payment of Distributions	  	55
			
	 7.2
	  	Limitations on Distributions	  	55
			
	 7.3
	  	Amounts of Tax Paid or Withheld	  	56
			
	 7.4
	  	Distribution in Kind	  	56
			
	 7.5
	  	Delaware Act Limitations	  	56
			
	 ARTICLE 8
	  	INDEMNIFICATION	  	56
			
	 8.1
	  	No Liability of Members for Company Obligations	  	56
			
	 8.2
	  	Exculpation	  	56
			
	 8.3
	  	Indemnification	  	57

  

 -ii- 

 TABLE OF CONTENTS 

(continued) 
  

					
	 	  	 	  	Page
	 8.4
	  	Expenses	  	58
			
	 8.5
	  	Insurance	  	58
			
	 8.6
	  	Primary Obligation	  	58
			
	 ARTICLE 9
	  	TRANSFERABILITY	  	59
			
	 9.1
	  	Transfer	  	59
			
	 9.2
	  	Conditions Precedent to a Membership Interest Transfer	  	60
			
	 9.3
	  	Applicability of Joint Development Agreement	  	61
			
	 9.4
	  	Right of First Refusal	  	61
			
	 9.5
	  	Admission as a Member	  	63
			
	 9.6
	  	Encumbrances	  	63
			
	 9.7
	  	Recordation Tax	  	63
			
	 9.8
	  	Resignation/Withdrawal	  	63
			
	 ARTICLE 10
	  	DISSOLUTION AND TERMINATION	  	63
			
	 10.1
	  	Dissolution	  	63
			
	 10.2
	  	Method of Liquidation	  	64
			
	 10.3
	  	Distribution in Kind	  	64
			
	 10.4
	  	Continued Liability for Capital Contributions	  	64
			
	 10.5
	  	Date of Dissolution	  	64
			
	 ARTICLE 11
	  	BOOKS; REPORTS TO MEMBERS; TAX MATTERS	  	64
			
	 11.1
	  	Books of Account; Records	  	64
			
	 11.2
	  	Financial Statements and Reports	  	65
			
	 11.3
	  	Tax Treatment of the Company	  	66
			
	 11.4
	  	Tax Matters Member	  	66
			
	 11.5
	  	Tax Returns and Elections	  	66
			
	 ARTICLE 12
	  	GOVERNING LAW; DISPUTE RESOLUTION	  	67
			
	 12.1
	  	Governing Law	  	67
			
	 12.2
	  	Dispute Resolution	  	67
			
	 12.3
	  	Expert Proceedings	  	69
			
	 ARTICLE 13
	  	MISCELLANEOUS	  	70
			
	 13.1
	  	Investment Representation	  	70

  

 -iii- 

 TABLE OF CONTENTS 

(continued) 
  

					
	 	  	 	  	Page
	 13.2
	  	Counterparts	  	70
			
	 13.3
	  	Notices	  	70
			
	 13.4
	  	Expenses	  	72
			
	 13.5
	  	Waivers; Rights Cumulative	  	72
			
	 13.6
	  	Entire Agreement; Conflicts	  	72
			
	 13.7
	  	Amendments	  	73
			
	 13.8
	  	Parties in Interest	  	73
			
	 13.9
	  	Successors and Permitted Assigns	  	73
			
	 13.10
	  	Confidentiality	  	73
			
	 13.11
	  	Publicity	  	74
			
	 13.12
	  	Preparation of Agreement	  	74
			
	 13.13
	  	Conduct of the Parties; Business Principles	  	75
			
	 13.14
	  	Severability	  	75
			
	 13.15
	  	Non-Compensatory Damages	  	75
			
	 13.16
	  	Specific Performance; Injunctive Relief	  	76
			
	 13.17
	  	No Company Seal	  	76
			
	 13.18
	  	Interpretation	  	76
			
	 13.19
	  	Intellectual Property	  	76
			
	 13.20
	  	Further Assurances	  	77
		
	EXHIBITS AND SCHEDULES:	  	
			
	Exhibit “A”	  	Form of Secondment Agreement	  	
	Exhibit “B”	  	Form of Services Agreement	  	
		
	SCHEDULES:	  	

  

			
	Schedule 2.17, Part 1	  	Company Insurance Information
	Schedule 2.17, Part 2	  	Insurance Information relating to Insurance Maintained for Development Parties and Joint Entities
	Schedule 4.1	  	Member Information
	Schedule 13.13(b)	  	Business Principles

  

 -iv- 

 SECOND AMENDED AND RESTATED 

LIMITED LIABILITY COMPANY AGREEMENT 

of 
 EXCO
RESOURCES (PA), LLC 
 This Second Amended and Restated Limited Liability Company Agreement (this
“Agreement”) of EXCO RESOURCES (PA), LLC, a Delaware limited liability company (the “Company”), is dated as of June 1, 2010 (the “Closing Date”), and is by and among the Company and the
Members. 
 WITNESSETH: 

RECITALS 
  

	1.	On August 30, 1988, the Company was formed as North Coast Energy, Inc., a corporation organized and existing under the Laws of the State of Delaware pursuant to a
certificate of incorporation filed with the Delaware Secretary of State. On June 24, 2008, the name of the Company was changed to EXCO – North Coast Energy, Inc. pursuant to a Certificate of Ownership and Merger filed with the Delaware
Secretary of State. On November 23, 2009, the name of the Company was changed to EXCO Resources (PA), Inc. pursuant to a Certificate of Amendment filed with the Delaware Secretary of State. 

 

	2.	On May 28, 2010, the Company was converted into a limited liability company organized and existing under the Laws of the State of Texas pursuant to the
Certificates. Pursuant to such conversion, the name of the Company was changed to EXCO Resources (PA), LLC. EXCO Member, as the sole member of the Company, adopted a limited liability company agreement of the Company effective as of such date (the
“Original Agreement”). 

  

	3.	On May 28, 2010, the Company underwent a multi-survivor merger pursuant to Chapter 10 of the Texas Business Organizations Code, which multi-survivor merger was
conducted in accordance with a plan of merger filed with the Texas Secretary of State. The Company was one of the surviving entities resulting from such multi-survivor merger. As a result of the multi-survivor merger, certain assets and liabilities
of the Company were allocated and vested into other entities, and certain assets and liabilities of the Company remained with the Company. 

  

	4.	On May 28, 2010, each of the surviving entities resulting from the multi-survivor merger described in the immediately preceding paragraph converted from a limited
liability company organized and existing under the Laws of the State of Texas to a limited liability company organized and existing under the Laws of the State of Delaware pursuant to the Certificates. 

 

	5.	On May 9, 2010, EXCO Member and BG Member executed that certain Transfer Agreement, pursuant to which, among other things, EXCO Member sold to BG Member fifty
percent (50%) of the Membership Interests. 

  

 1 

	6.	The Parties now desire to enter into this Agreement as an amendment and restatement of the Original Agreement in its entirety to reflect the agreement of the Company
and the Members as set forth herein. 

 NOW THEREFORE, in consideration of the foregoing, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, effective as of the Closing Date, the Original Agreement is hereby amended and restated in its entirety to read as follows: 

ARTICLE 1 

GENERAL PROVISIONS 
  

	1.1	Definitions. For purposes of this Agreement, each of the following terms will have the meaning set forth below. For the avoidance of doubt, any of the following
terms defined by reference to a term in another agreement that terminates prior to the termination of this Agreement shall, for purposes of this Agreement, continue to have the same meaning that such term had prior to the termination of such other
agreement. 

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

“AAA” has the meaning given to it in Section 12.2(b). 

“AAA Rules” has the meaning given to it in Section 12.2(b). 

“Adjusted Capital Account Deficit” of any Member means, as of any particular date, the deficit balance, if any, in such
Member’s Capital Account as of such date, as determined in the manner provided in Section 5.1, adjusted as follows: (a) such Capital Account will be increased to reflect any amounts that such Member is obligated to restore to the
Company under any provision of this Agreement or is deemed to be obligated to restore pursuant to Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5); and (b) such Capital Account will be reduced to reflect any items described in
Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6). 
 “Affected Member” has the meaning
given to it in Section 5.5(a). 
 “Affiliate” means, with respect to any Person, a Person that,
directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such Person. 

“Affiliate Contract” means any contract between the Company or any direct or indirect subsidiary of the Company, on the
one hand, and any Member or Members or any Affiliate or Affiliates of Members, on the other hand. 
 “Affiliated Member
Group” means any group of Members that are Affiliates of each other. 
 “Agreement” has the meaning
given to it in the introductory paragraph. 
  

 2 

 “Allocation Year” means (a) the period commencing on January 1,
2010 and ending on December 31, 2010, (b) any subsequent twelve (12) month period commencing on January 1 and ending on December 31 or (c) any portion of the period described in clauses (i) or (ii) for which
the Company is required to allocate Profit and Loss and other items of Company income, gain, loss or deduction pursuant to Article 6 hereof. 

“AMI Area” means the lands (and subsurface) included in the States of New York, Pennsylvania and West Virginia, provided
that the AMI Area shall not include any Lease or other Property that is an Excluded Asset. 
 “Annual Financial
Statements” has the meaning given to it in Section 11.2(a). 
 “Annual Work Program and Budget”
means (a) so long as the Joint Development Agreement is in effect, the “Annual Work Program and Budget” as defined in the Joint Development Agreement and (b) for any Calendar Year (or portion thereof) after the termination of the
Joint Development Agreement, the work program and budget for operations to be conducted by the Company during such Calendar Year or portion thereof. 

“Appalachian Area” means the lands (and subsurface) included in the States of Kentucky, New York, Ohio, Pennsylvania,
Tennessee, Virginia and West Virginia, provided that the Appalachian Area shall not include any Lease or other property that is an Excluded Asset. 

“Appalachian Overhead” means (a) all Technical Services Costs and (b) the Company Overhead. 

“Applicable Operating Agreement” has the meaning given to it in the Joint Development Agreement. 

“Approved Reserves” means: (a) a working capital reserve equal to projected expenditures during the following three
(3) Calendar Months as reasonably projected by the President and General Manager of the Company, excluding those amounts to be funded through Capital Contributions pursuant to the first two sentences in Section 5.3(a); and (b) such
other reserves for working capital, contingencies, replacements, expansions, acquisitions, or other expenditures of the Company as may be approved by the Members from time to time. 

“Area-Wide Operations” has the meaning given to it in the Joint Development Agreement. 

“Asset Upgrade” means, with respect to any physical Company Property, any physical enhancement or series of
physical enhancements of or to any existing portion of such Company Property. 
 “Associated Agreements”
has the meaning given to it in the Joint Development Agreement. 
 “Bankruptcy” of a Person means: (a) the
filing by a Person of a voluntary petition seeking liquidation, reorganization, arrangement or readjustment, in any form, of its debts under the U.S. Bankruptcy Code (or corresponding provisions of future Laws) or any other insolvency

  

 3 

 
Law, or a Person’s filing an answer consenting to or acquiescing in any such petition; (b) the making by a Person of any assignment for the benefit of its creditors or the admission by
a Person of its inability to pay its debts as they mature; or (c) the expiration of sixty (60) days after the filing of an involuntary petition under the U.S. Bankruptcy Code (or corresponding provisions of future Laws) seeking an
application for the appointment of a receiver for the assets of a Person, or an involuntary petition seeking liquidation, reorganization, arrangement or readjustment of its debts under any other insolvency Law, unless the same shall have been
vacated, set aside or stayed within such sixty (60) day period. 
 “BG Affiliate Group” means the
Affiliated Member Group that includes all Affiliates of BG Parent. 
 “BG Member” means BG US Production
Company, LLC, a limited liability company organized and existing under the Laws of Delaware. 
 “BG
Parent” means BG Group plc, a public limited company organized and existing under the Laws of England and Wales. 

“Board Member” has the meaning given to it in Section 2.1. 

“Budgeted Acquisition” means an acquisition by the Company of any Undeveloped Lease in the AMI Area and/or other Oil and
Gas Assets in which the Development Parties and/or a Joint Entity already owns a working interest on behalf of the Company, the Development Parties and/or Joint Entities pursuant to an approved Annual Work Program and Budget. 

“Business” means Upstream Activities conducted by the Company. 

“Business Day” means a day (other than a Saturday or Sunday) on which commercial banks in Texas are generally open for
business, provided that if Business Days are used to calculate periods in which a Member must make a payment hereunder, “Business Day” means a day (other than a Saturday or Sunday) on which commercial banks in Texas and London are
generally open for business. 
 “Calendar Month” means any of the months of the Gregorian calendar. 

“Calendar Quarter” means a period of three (3) consecutive Calendar Months commencing on the first day of January,
the first day of April, the first day of July and the first day of October in any Calendar Year. 
 “Calendar
Year” means a period of twelve (12) consecutive Calendar Months commencing on the first day of January and ending on the following 31st day of December, according to the Gregorian calendar. 

 

 4 

 “Capital Account” means, with respect to any Member of the Company and its
Membership Interest, the Capital Account maintained for such Member in accordance with the following provisions: 
 (a) To each
Member’s Capital Account there shall be credited (i) the amount of money and the Tax Book Value of any Company Property transferred by such Member to the Company as a Capital Contribution, (ii) such Member’s distributive share of
Profits and any items in the nature of income or gain which are specially allocated to such Member pursuant to this Agreement, (iii) such Member’s distributive share of Simulated Gain, and (iv) the amount of any Company liabilities
assumed by such Member or that are secured by any Company Property distributed to such Member; 
 (b) To each Member’s
Capital Account there shall be debited (i) the amount of money and the Tax Book Value of any Company Property distributed to such Member pursuant to any provision of this Agreement, (ii) such Member’s distributive share of Losses and
any items of Loss or deduction which are specially allocated to such Member pursuant to this Agreement, (iii) such Member’s distributive share of Simulated Depletion and Simulated Loss, and (iv) the amount of any liabilities of such
Member assumed by the Company or that are secured by any Company Property contributed by such Member to the Company; 
 (c) In
the event a Membership Interest or portion thereof is Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the Transferred Membership Interest
or portion thereof; 
 (d) In determining the amount of any liability for purposes of subparagraphs (a) and (b) above,
there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and Regulations; and 

(e) For purposes of computing allocation of Simulated Depletion, Simulated Gain and Simulated Loss to the Members’ Capital Accounts,
the Simulated Basis of each Depletable Property of the Company will be allocated to the Members in proportion to their respective Percentage Interests. 

The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to
comply with Treasury Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Treasury Regulations. In the event the Tax Matters Member shall determine that it is prudent to modify the manner in
which the Capital Accounts, or any debits or credits thereto, are computed in order to comply with such Treasury Regulations, the Tax Matters Member may make such modification. The Tax Matters Member also shall (A) make any adjustments that are
necessary or appropriate to maintain equality between the Capital Accounts of the Members and the amount of capital reflected on the Company’s balance sheet, as computed for book purposes, in accordance with Treasury Regulations
Section 1.704-1(b)(2)(iv)(q), and (B) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Treasury Regulations Section 1.704-1(b). The Tax Matters Member shall
provide all the Members with written notice of any such adjustments or modifications. 
 “Capital Contribution”
means, with respect to a specified Member and its Membership Interest, the aggregate amount of money and the Tax Book Value of any property other than money contributed to the Company by such Member (net of any associated liabilities assumed by the
Company or taken subject to by the Company) with respect to such Membership Interest. 
  

 5 

 “Carried Costs” has the meaning given to it in the Joint Development
Agreement. 
 “Carry Termination Event” has the meaning given to it in the Joint Development Agreement.

 “Cash Value” means the Fair Market Value (expressed in U.S. dollars) of all or a portion of a Membership
Interest subject to a proposed Transfer or Change in Control. 
 “Certificates” means, collectively, the
Certificates of Conversion of the Company, and the Certificate of Formation of the Company, in each case, as amended, supplemented or restated from time to time, filed with the Secretary of State of the State of Delaware. 

“Change in Control” means any direct or indirect change in Control of a Member (whether through merger, sale of shares
or other equity interests, or otherwise), through a single transaction or series of related transactions, from one or more transferors to one or more transferees; provided, however, that for purposes hereof, a “Change in Control”
shall not include a change in Control of a Member: (a) resulting from a management-led buyout of the public share ownership of such Member and conversion of such Member to a privately-held company, (b) resulting in ongoing control by a
Wholly-Owned Affiliate of such Member, or (c) created by a change in Control of the ultimate parent company of such Member. For the avoidance of doubt, as of the date of this Agreement, the ultimate parent company of BG Member is BG Parent, and
the ultimate parent company of EXCO Member is EXCO Parent. 
 “Closing Date” has the meaning given to it in the
introductory paragraph of this Agreement. 
 “Code” means the Internal Revenue Code of 1986, as amended from
time to time (including corresponding provisions of succeeding law). 
 “Company” has the meaning given to it
in the introductory paragraph. 
 “Company Contract” means any contract entered into by the Company or to which
the Company is a party. 
 “Company Minimum Gain” has the same meaning as “partnership minimum gain”
set forth in Treasury Regulations Sections 1.704-2(b)(2) and 1.704-2(d). 
 “Company Operating Expenses”
means costs and expenses reasonably necessary to continue operating and maintaining Company Property in a manner consistent with past practices, industry standards, the standards set forth in Section 2.13(a) and applicable Law.

 “Company Overhead” means (a) all costs of the Company pursuant to any Secondment Agreement,
(b) all costs attributable to salaries, wages and benefits of the employees of the Company and (c) general corporate overhead costs of the Company, including taxes, insurance, financing costs and overhead costs attributable to its
corporate and field offices (but only those located within the Appalachian Area). 
  

 6 

 “Company Property” means all real and personal property acquired by the
Company, including cash, and any improvements thereto, and shall include both tangible and intangible property (including Company Technology). 

“Company Technology” means any technology or intellectual property developed by the Company pursuant to the conduct of
the Business. 
 “Conflicted Member” has the meaning given to it in Section 2.5(b). 

“Contract Operating Agreement” has the meaning given to it in the Joint Development Agreement. 

“Contract Operator” has the meaning given to it in the Joint Development Agreement. 

“Control” and its derivatives with respect to any Person means the possession, directly or indirectly, of the power to
exercise or determine the voting of more than fifty percent (50%) of the voting rights in a corporation, and, in the case of any other type of entity, the right to exercise or determine the voting of more than fifty percent (50%) of the
equity interests having voting rights, or otherwise to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. 

“Covered Person” means, in each case, whether or not a Person continues to have the applicable status referred to in the
following list: a Member; any Affiliate of a Member; a Board Member; any officer of the Company, whether or not such officer is an employee of the Company; any officer, director, member, manager, stockholder, partner, employee, representative or
agent of any Member, or of any of their respective Affiliates; any employee or agent of the Company or its Affiliates; and any Tax Matters Member. 

“Credit Facility Encumbrance” means Encumbrances created pursuant to any material borrowing arrangement entered into by
any Member and/or its Affiliates with a third party that is not an Affiliate of such Member or its Affiliates, as such arrangement may be amended, restated, amended and restated, modified, refinanced, supplemented or replaced from time to time.

 “Credit Facility Foreclosure” means any transfer or other disposition of interests of a Member and its
Affiliates in the Membership Interests pursuant to a Credit Facility Encumbrance of such Member and any related mortgages, pledge agreements, security agreements and other agreements evidencing such Credit Facility Encumbrance following the
occurrence and continuation of a default or event of default under the borrowing arrangement secured thereby. 
 “Credit
Facility Secured Party” means any Person, other than an Affiliate of a Member, that is identified and whose notice information is provided (which notice information shall include such Credit Facility Secured Party’s name, street
address, contact person, telephone number and fax number) in a written notice to the Company and each other Member by such Person or a Member as the holder or beneficiary of a Credit Facility Encumbrance with respect to a Member’s Membership
Interests. 
  

 7 

 “Deep Rights” means (a) with respect to the Commonwealth of
Pennsylvania, those subsurface depths that are below the base of (but excluding) the Haskill Sandstone Formation (Base of Elk Sequence) formation at a measured depth of 2,758’, as identified by the Litho Density Compensated Neutron Array
Induction Temperature Log dated June 7, 2005 of the Seneca Resources operated Fee PGS SGL No. 44 (API 37-047-23649) located in Elk County, Pennsylvania, (b) with respect to the State of West Virginia, those subsurface depths that are
below the base of (but excluding) the Brallier Formation (Base of Elk Sequence) formation at a measured depth of 6,612’, as identified by the Litho Density Compensated Neutron Array Induction Temperature Log dated October 8, 2008 of the
EXCO – North Coast Energy, Inc. operated Wentz 4HS (API 47-001-02982) located in Barbour County, West Virginia, and (c) with respect to the State of New York, those subsurface depths that are below the base of (but excluding) the Genesee
Formation at a measured depth of 2,548’, as identified by the Density/Neutron, Gamma/Temperature Log dated May 6, 2005 of the Fortuna Energy, Inc. operated Cotton-Hanlon #1 well (API 31-107-23185) located in Tioga County, New York,
recognizing that actual depths will vary across the AMI Area. 
 “Deep Rights Gathering Assets” means
any gathering or pipeline system or related asset used to gather or transport gas produced from the Deep Rights of New York, Pennsylvania or West Virginia. 

“Default Interest Rate” means the three month London Inter-Bank Offer Rate (as published in the “Money Rates”
table of the Wall Street Journal, eastern edition) plus an additional five percentage points (5%) applicable on the first Business Day prior to the due date of payment and thereafter on the first Business Day of each succeeding Calendar
Month (or, if such rate is contrary to any applicable usury Law, the maximum rate permitted by such applicable Law). 

“Default Notice” has the meaning given to it in Section 5.5(a). 

“Default Period” has the meaning given to it in Section 5.5(b). 

“Defaulting Member” has the meaning given to it in Section 5.5(a). 

“Delaware Act” means the Delaware Limited Liability Company Act, Del. Code Ann. Tit. 6, §§18-101, et. seq., as
amended from time to time (including corresponding provisions of succeeding law). 
 “Depletable Property”
means each separate oil and gas property as defined in Code Section 614. 
 “Depreciation” means, for each
Allocation Year, an amount equal to the depreciation, amortization, or other cost recovery deduction (other than depletion) allowable with respect to an asset for such Allocation Year for federal income tax purposes, except that (1) with
respect to any depreciable or amortizable asset whose Tax Book Value differs from its adjusted tax basis for federal income tax purposes and which difference is being eliminated by use of the “remedial method” defined by Regulations
Section 1.704-3(d), Depreciation for such Allocation Year shall be the amount of book basis recovered for such Allocation Year under the rules prescribed by Treasury Regulations Section 1.704-3(d)(2), and (2) with respect to any
depreciable or 
  

 8 

 
amortizable asset whose Tax Book Value differs from its adjusted tax basis for federal income tax purposes at the beginning of such Allocation Year, Depreciation shall be an amount that bears the
same ratio to such beginning Tax Book Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Allocation Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted basis for
federal income tax purposes of a depreciable or amortizable asset at the beginning of such Allocation Year is zero, Depreciation shall be determined with reference to such beginning Tax Book Value using any reasonable method selected by the Tax
Matters Member. 
 “Development Costs” has the meaning given to it in the Joint Development Agreement.

 “Development Operation” has the meaning given to it in the Joint Development Agreement. 

“Development Operations Contract” has the meaning given to it in the Joint Development Agreement. 

“Development Party” has the meaning given to it in the Joint Development Agreement. 

“Development Work Program” has the meaning given to it in the Joint Development Agreement. 

“Dispute” means any dispute, controversy, or claim (of any and every kind or type, whether based on contract, tort,
statute, regulation, or otherwise) arising out of, relating to, or connected with this Agreement, or the transactions contemplated hereby, including but not limited to any dispute, controversy or claim concerning the existence, validity,
interpretation, performance, breach, or termination of this Agreement or the relationship of the Parties arising out of this Agreement or the transactions contemplated hereby. 

“Dissolution Event” has the meaning given to it in Section 10.1. 

“Election Notice” has the meaning given to it in Section 9.4(b). 

“Emergency Expenditures” means expenditures which are reasonably necessary to be expended in order to mitigate or remedy
the endangerment of the health or safety of any Person or the environment. 
 “Encumbrance” means a mortgage,
lien, pledge, charge or other encumbrance. “Encumber” and other derivatives shall be construed accordingly. 

“Enforcement Activities” has the meaning given to it in Section 2.5(b). 

“Excluded Asset” has the meaning given to it in the Transfer Agreement. 

“EXCO Affiliate Group” means the Affiliated Member Group that includes all Affiliates of EXCO Parent. 

 

 9 

 “EXCO Member” means EXCO Holding (PA), Inc., a corporation organized and
existing under the Laws of Delaware. 
 “EXCO Parent” means EXCO Resources, Inc., a corporation organized and
existing under the Laws of Texas. 
 “Existing EXCO Credit Facility” has the meaning given to it in the Joint
Development Agreement. 
 “Fair Market Value” means with respect to the Company, or any asset or
interest (as the case may be), the amount that would be received in an arms-length transaction between a willing buyer and a willing seller, under no compulsion, respectively, to buy or sell such property and each having knowledge of all the
relevant facts and circumstances. 
 “Fiscal Year” has the meaning given to it in Section 1.6.

 “GAAP” means the generally accepted accounting principles in the United States of America, as promulgated or
adopted by the Financial Accounting Standards Board and its predecessors and successors from time to time. 

“Governmental Authority” means any federal, state, local, municipal, tribal or other government; any governmental,
regulatory or administrative agency, commission, body or other authority exercising or entitle to exercise any administrative, executive, judicial, legislative, regulatory or taxing authority or power; and any court or governmental tribunal,
including any tribal authority having or asserting jurisdiction. 
 “Group” has the meaning given to it in
Section 2.4(a). 
 “HSSE Management System” has the meaning given to it in Section 2.13(d).

 “HSSE Plan” has the meaning given to it in Section 2.13(c). 

“HSSE Principles” has the meaning given to it in 2.13(b). 

“Hydrocarbons” means oil and gas and other hydrocarbons produced or processed in association therewith (whether or not
any such item is in liquid or gaseous form), or any combination thereof, and any minerals produced in association therewith. 

“IDCs” means “intangible drilling and development costs” described in Code Section 263(c). 

“Joint Development Agreement” means the Joint Development Agreement dated [•], 2010, among BG Production Company
(PA), LLC, BG Production Company (WV), LLC, EXCO Production Company (PA), LLC, EXCO Production Company (WV), LLC, and the Company, as the same may be amended, modified or supplemented from time to time. 

“Joint Development Operating Agreement” has the meaning given to it in the Joint Development Agreement. 

 

 10 

 “Joint Development Operations” means Development Operations in which all
Development Parties participate and/or in which a Joint Entity participates. 
 “Joint Development Operator”
has the meaning given to it in the Joint Development Agreement. 
 “Joint Entity” has the meaning given to it
in the Joint Development Agreement. 
 “Joint Operations Account” has the meaning given to it in the Joint
Development Agreement. 
 “Law” means any constitution, decree, resolution, law, statute, act ordinance, rule,
directive, order, treaty, code or regulation and any injunction or final non-appealable judgment or any interpretation of the foregoing, as enacted, issued or promulgated by any Governmental Authority. 

“Leases” has the meaning given to it in the Joint Development Agreement. 

“Management Board” has the meaning given to it in Section 2.1. 

“Marketing Agreements” means Hydrocarbons sales agreements between the Company and the Members and/or their Affiliates.

 “Member” means, at any time, each Person who: (a) is an initial signatory to this Agreement, has
been admitted to the Company as a Member in accordance with the Certificates and this Agreement, or is an assignee or transferee pursuant to a Credit Facility Encumbrance who has become a Member in accordance with this Agreement; and (b) has
not ceased for any reason to be a Member. 
 “Member Indemnitors” has the meaning given to it in
Section 8.6. 
 “Member Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal
to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treasury Regulations Section 1.704-2(i) with respect to “partner minimum gain.”

 “Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” set forth in
Treasury Regulations Section 1.704-2(b)(4). 
 “Membership Interest” means, with respect to a specified
Member, such Member’s entire equity ownership interest in the Company, carrying all the associated rights and obligations under this Agreement and applicable Law, and all of the Members’ Membership Interest (collectively), the
“Membership Interests”. 
 “Monthly Financial Reports” has the meaning given to it in
Section 11.2(c). 
 “Monthly Operating Reports” has the meaning given to it in Section 11.2(d).

  

 11 

 “Net Cash Flow” means during any period the excess, if any, of
(a) the sum of (i) the gross receipts of the Company (as determined in accordance with the cash receipts and disbursements method of accounting) during such period, but without regard to any amounts received by the Company on the sale or
other disposition of all or substantially all of its assets, (ii) all amounts contributed to the Company during such period by any Member, (iii) all amounts received by the Company as loans during such period and (iv) any amounts
released during such period by the Members from any Approved Reserve maintained by the Company, over (b) the sum of (i) all expenditures (as determined under the aforesaid method of accounting) and taxes of the Company paid during such
period, (ii) all amounts applied during such period in payment of principal, interest or other charges in respect of any borrowing of the Company, and (iii) any amount added during such period as Approved Reserves. 

“Nonrecourse Liability” has the meaning set forth in Treasury Regulations Section 1.704-2(b)(3). 

“Non-transferring Member” has the meaning given to it in Section 9.4(a). 

“Offer Notice” has the meaning given to it in Section 9.4(a). 

“Offered Interests” has the meaning given to it in Section 9.4(a). 

“Oil and Gas Assets” means all of the following, to the extent located within the Appalachian Area: 

 

	(a)	oil, gas and/or mineral leases, subleases, fee interests, fee mineral interests, mineral servitudes, royalties, overriding royalties, production payments, net profits
interests, carried interests, reversionary interests and other interests in oil, gas and/or minerals in place (collectively, “Oil and Gas Interests”), the leasehold estates created by Oil and Gas Interests, lands covered by Oil and
Gas Interests (“Lands”), and interests in any pooled acreage, communitized acreage or units arising on account of Oil and Gas Interests or Lands pooled, communitized or unitized into such units (“Units”);

  

	(b)	oil and gas wells and injection wells located on Oil and Gas Interests, Lands or Units (“Wells”), and all Hydrocarbons produced therefrom or allocated
thereto (Oil and Gas Interests, Lands, Units and Wells being collectively referred to hereinafter as “Properties”); 

  

	(c)	equipment, machinery, fixtures, and other real, immovable, personal, movable and mixed property primarily used or held for use in connection with Properties, including
saltwater disposal wells, water sourcing and disposal facilities and systems, well equipment, casing, rods, tanks, boilers, buildings, tubing, pumps, motors, fixtures, machinery, compression equipment, flow lines, and separation facilities,
structures, materials, and other items used or held for use in the operation thereof and located upstream of the outlet flange of the relevant custody transfer meter (or, in the case of Hydrocarbon liquids, upstream of the outlet flange in the
tanks); 

  

	(d)	surface fee interests, surface leases, easements, rights-of-way, permits, licenses, servitudes, and other surface rights; 

 

 12 

	(e)	water withdrawal and disposal and other permits, licenses, orders, approvals, variances, waivers, franchises, rights and other authorizations issued by any Governmental
Authority; 

  

	(f)	Shallow Rights Gathering Assets; 

  

	(g)	contracts primarily relating to any of the other items identified in this definition; 

 

	(h)	imbalances at wellheads; 

  

	(i)	files, records, maps, information, and data, whether written or electronically stored, relating to any of the other items identified in this definition, including:
(i) land and title records (including abstracts of title, title opinions, and title curative documents); (ii) contract files; (iii) correspondence; (iv) operations, environmental, production, and accounting records and
(v) production, facility and well records and data (including logs and cores); 

  

	(j)	geophysical and other seismic and related technical data and information; 

  

	(k)	liens and security interests securing payment for the sale or other disposition of Hydrocarbons produced from or allocated to Properties; and 

 

	(l)	rights, claims and causes of action to the extent, and only to the extent, that such rights, claims or causes of action are associated with other items identified in
this definition, 

 provided that “Oil and Gas Assets” shall not include any Deep Rights Gathering Assets. 

“Operating Assets” shall mean the following assets to the extent necessary for the operation of the Subject Oil
and Gas Assets or any other Oil and Gas Assets of the Company: (a) all surface fee interests, surface leases, easements, rights-of-way, permits, licenses, servitudes and other surface rights, (b) all water withdrawal and disposal and other
permits, licenses, orders, approvals, variances, waivers, franchises, rights and other authorizations issued by any Governmental Authority, (c) the Warrendale, Pennsylvania regional office and all field offices, warehouses and yards (including
any furniture, office equipment and other owned or leased real or immovable property relating thereto) and personal computers and associated peripherals and all radio and telephone equipment and licenses relating thereto, (d) all materials,
equipment and inventory, (e) all trucks, cars, drilling/workover rigs located within the Appalachian Area and utilized by EXCO or its Affiliates in connection with the ownership or operation of the Assets, (f) any Company Contract,
(g) all amounts attributable to royalty, overriding royalty and other burdens on production of Hydrocarbons from such assets held in suspense and any interest accrued in escrow accounts for such suspended funds, and (h) files, records,
maps, information and data, whether written or electronically stored.  
 “Operating Committee” has the
meaning given to it in the Joint Development Agreement. 
 “Operating Expense Multiplier” means, in the case of
any Calendar Year (for purposes of this definition, the “relevant Calendar Year”), the amount obtained by dividing: (a) the number of active wells included in Joint Development Operations as of the end of the preceding Calendar

  

 13 

 
Year, plus the number of wells anticipated to be drilled as Joint Development Operations in the relevant Calendar Year, minus the number of wells anticipated to be plugged and abandoned pursuant
to Joint Development Operations in the first half of the relevant Calendar Year; by (b) the number of active wells included in Joint Development Operations as of the end of the preceding Calendar Year. 

“Other Material Company Contract” means any material Company Contract that is not a Development Operations Contract or
an Affiliate Contract. 
 “Original Agreement” has the meaning given to it in the Recitals. 

“Participating Member” means with respect to any Development Operation, any Member: (a) that is a
Development Party participating in such Development Operation; (b) that has an Affiliate that is a Development Party that is participating in such Development Operation; or (c) that holds membership interest in, or that has an Affiliate
that holds membership in, a Joint Entity that is participating in such Development Operation (other than a Sole Risk Entity Operation in which such Member or Affiliate of such Member elected not to participate).  

“Participating Parties” has the meaning given to it in the Joint Development Agreement. 

“Parties” means, collectively, all of the Members and the Company, and “Party” means any of them.

 “Party Operator” has the meaning given to it in the Joint Development Agreement. 

“Percentage Interest” means, with respect to a specified Member or Affiliated Member Group, the percentage ownership
interest of such Member or Affiliated Member Group in the equity of the Company from time to time. 
 “Person”
means any individual, corporation, company, limited partnership, limited liability company, trust, estate, Governmental Authority or any other entity or organization. 

“President and General Manager” means the individual whose rights, obligations and duties are described in
Section 2.11(b)(ii). 
 “Proceeding” means any threatened, pending or completed action, suit, arbitration,
appeal or other proceeding of any nature, whether civil, criminal, administrative or investigative, whether formal or informal. 

“Profits” and “Losses” mean, for each Allocation Year, an amount equal to the Company’s taxable
income or loss for such Allocation Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be
included in taxable income or loss), with the following adjustments (without duplication): 
 (a) Any income of the Company that
is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of “Profits” and “Losses” shall be added to such taxable income or loss; 

 

 14 

 (b) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated
as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition of “Profits” and
“Losses” shall be subtracted from such taxable income or loss; 
 (c) In the event the Tax Book Value of any item of
Company Property (other than Depletable Property) is adjusted pursuant to subparagraphs (b) or (c) of the definition of Tax Book Value, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Tax
Book Value of the item of Company Property) or an item of loss (if the adjustment decreases the Tax Book Value of the item of Company Property) from the disposition of such item of Company Property and shall be taken into account for purposes of
computing Profits or Losses; 
 (d) Gain or loss resulting from any disposition of Company Property (other than Depletable
Property) with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the tax Book Value of the Company Property disposed of, notwithstanding that the adjusted tax basis of such Company Property
differs from its Tax Book Value; 
 (e) In lieu of the depreciation, amortization, and other cost recovery deductions in respect
of depreciable or amortizable property taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Allocation Year, computed in accordance with the definition of “Depreciation”;

 (f) To the extent an adjustment to the adjusted tax basis of any item of Company Property pursuant to Code
Section 734(b) is required, pursuant to Treasury Regulations Section 1.704 (b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Member’s Membership
Interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the item of Company Property) or loss (if the adjustment decreases such basis) from the disposition of such item of Company
Property and shall be taken into account for purposes of computing Profits or Losses; and 
 (g) Notwithstanding any other
provision of this definition, any items that are specially allocated pursuant to Section 6.2 shall not be taken into account in computing Profits or Losses. 

The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Section 6.2
shall be determined by applying rules analogous to those set forth in subparagraphs (a) through (f) above. 

“Quarterly Financial Statements” has the meaning given to it in Section 11.2(b). 

“Required Asset Upgrade” means any Asset Upgrade: (i) necessary in order for the conduct of Business to
comply with applicable Laws; or (ii) necessary in order for the Company to fulfill its required obligations under any material Company Contract. 

“Secondment Agreement” means any secondment agreement entered into pursuant to Section 2.11(c). 

 

 15 

 “Shallow Rights Gathering Assets” means any gathering or pipeline system or
related asset used to gather or transport gas produced in: (a) New York, Pennsylvania or West Virginia from subsurface depths that are above the Deep Rights; or (b) Kentucky, Ohio, Tennessee, or Virginia. 

“Simulated Basis” means the Tax Book Value of any Depletable Property and any indirect ownership of such property
through an equity interest in an entity classified as a partnership or disregarded entity for federal income tax purposes. 

“Simulated Depletion” means, for each Allocation Year, an amount equal to the simulated depletion allowable computed by
the Company with respect to its Depletable Property (including any indirect ownership of such property through an equity interest in an entity classified as a partnership or disregarded entity for federal income tax purposes) pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(k)(2). For purposes of computing Simulated Depletion, the Company will apply the simulated cost depletion method under Treasury Regulations Section 1.704-1(b)(2)(iv)(k)(2). With respect to any
Depletable Property whose Tax Book Value differs from its adjusted tax basis for federal income tax purposes at the beginning of an Allocation Year, Simulated Depletion will be that amount determined by applying the principles of Treasury
Regulations Section 1.611-2(a)(i) as if the Tax Book Value was the adjusted basis upon which simulated cost depletion is computed under Treasury Regulations Section 1.704-1(b)(2)(iv)(k)(2). 

“Simulated Gain” or “Simulated Loss” means the simulated gain or simulated loss computed by the Company
with respect to its Depletable Properties (including any indirect ownership of such property through an equity interest in an entity classified as a partnership or disregarded entity for federal income tax purposes) pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(k)(2). 
 “Sole Risk Entity Operation” has the meaning given to it in the Joint
Development Agreement. 
 “Sole Risk Development Operation” has the meaning given to it in the Joint
Development Agreement. 
 “Standards Asset Upgrade” means any Asset Upgrade necessary to ensure that the
Company will be able to comply with the standards identified in Section 2.13, including the HSSE Principles, the HSSE Plan or the HSSE Management System. 

“Subject Oil and Gas Assets” has the meaning given to it in the Joint Development Agreement. 

“Tax Book Value” means with respect to any asset, the asset’s adjusted basis for federal income tax purposes,
except as follows: 
 (a) The initial Tax Book Value of any asset contributed by a Member to the Company shall be the gross fair
market value of such asset as agreed to by the Members; 
  

 16 

 (b) The Tax Book Values of all items of Company Property shall be adjusted to equal their
respective Fair Market Value (taking Code Section 7701(g) into account) as of the following times: (i) the acquisition of an additional Membership Interest in the Company by any new or existing Member in exchange for more than a de minimis
Capital Contribution, (ii) the distribution by the Company to a Member of more than a de minimis amount of Company Property as consideration for a Membership Interest in the Company, and (iii) the liquidation of the Company within the
meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g) (other than pursuant to Section 708(b)(1)(B) of the Code); provided that an adjustment described in clause (i) of this paragraph shall be made only if the Tax Matters Member
reasonably determines that such adjustment is necessary to reflect the relative economic interests of the Members in the Company; 

(c) The Tax Book Value of any item of Company Property distributed to any Member (other than as consideration for a Membership Interest
in the Company as described in clause (ii) of subparagraph (b) above) shall be adjusted to equal the gross Fair Market Value (taking Code Section 7701(g) into account) of such item on the date of distribution; and 

(d) The Tax Book Values of each item of Company Property shall be increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulations Section 1.704
1(b)(2)(iv)(m) and subparagraph (f) of the definition of “Profits” and “Losses” or Section 6.2(g); provided, however, that Tax Book Values shall not be adjusted pursuant to this subparagraph (d) to the extent that
an adjustment pursuant to subparagraph (b) is required in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (d). 

(e) If the Tax Book Value of an asset has been determined or adjusted pursuant to subparagraph (a), (b), or (d), such Tax Book Value
shall thereafter be adjusted by the Simulated Depletion or Depreciation taken into account with respect to such asset. 
 (f)
This definition will not affect the book value of any asset for financial reporting purposes. 
 “Tax Matters
Member” has the meaning given to it in Section 11.4. 
 “Technical Services” means, subject to
any further description in services agreements between the Company and each Development Party, (a) services providing specific engineering, geoscience, land, or other exploration, development and/or producing professional skills, such as those
performed by engineers, geologists, geophysicists, landmen, and technicians, required to handle specific operating conditions and problems, and (b) human resources, tax, information technology, legal, HSSE and other administrative services
(including those services performed outside of the Appalachian Area), in each case for the benefit of Development Operations; provided, however, Technical Services shall not include general corporate overhead activities, including senior management,
provisions of office space, utilities, insurance, computers and office equipment, and similar items. 
  

 17 

 “Technical Services Costs” means (a) salaries, wages, mandatory
government payroll burdens, benefits and personal expenses of employees of the Development Parties and their Affiliates providing Technical Services and (b) in the case of human resources, information technology and HSSE, costs associated with
providing such services, but excluding general corporate overhead costs. 
 “Total Amount in Default”
means, as of any time, the following amounts: (a) the amounts that the Defaulting Member has failed to pay under the terms of this Agreement as of such time; and (b) any interest at the Default Interest Rate accrued on the amount under
(a) from the date such amount is due by the Defaulting Member until paid in full by the Defaulting Member. 

“Total Votes” has the meaning given to it in Section 2.5(a). 

“Transfer” means any sale, assignment, or other disposition by a Member of all or any part of its Membership Interest,
excluding (a) any disposition resulting from a direct or indirect Change in Control of a Member, or a change in Control created by a change in Control of the ultimate parent company of such Party, (b) any disposition resulting from a
Credit Facility Foreclosure and (c) any Encumbrance on any Membership Interest. 
 “Transfer Agreement”
has the meaning given to it in the Joint Development Agreement. 
 “Transferring Member” has the meaning given
to it in Section 9.4(a). 
 “Treasury Regulations” means the income tax regulations promulgated under the
Code, as amended from time to time (including corresponding provisions of succeeding regulations). 
 “Unaffiliated
Participating Parties” has the meaning given to it in Section 11.2(b). 
 “Undeveloped Lease”
means any oil and gas lease, oil, gas and mineral lease or sublease, royalty, overriding royalty, production payment, net profits interest, mineral fee interest, carried interest, mineral servitude or other right to oil and gas in place (in each
case) with respect to which no oil and gas development activities have taken place. 
 “Upstream Activities”
means the ownership, operation, use, exploration, appraisal, development, production, maintenance and decommissioning of oil, gas and mineral interests, including leases, and Shallow Rights Gathering Assets, in the Appalachian Area, and the
acquisition, disposition and financing thereof, and the performance of the responsibilities of the Company under the Joint Development Agreement and the Associated Agreements for so long as such agreements remain in effect. “Upstream
Activities” shall not include (a) except with respect to the Shallow Rights Gathering Assets, the funding, development, ownership or operation of any equipment, fixtures, or other assets located downstream of the outlet flange of the
custody transfer meter (or in the case of Hydrocarbon liquids, downstream of the outlet flange in the tanks) of any well, or (b) marketing or sale of Hydrocarbons products owned by or attributable to the Company (other than the marketing and
sale of Hydrocarbons products owned by or attributable to the Company: (i) as contemplated in the Marketing Agreements; or (ii) that are jointly marketed or sold with Hydrocarbons products owned by or attributable to the Development
Parties and/or Joint Entities by the Company in the performance of its responsibilities under the Joint Development Agreement). 
  

 18 

 “Wholly-Owned Affiliate” means, with respect to any Person, an Affiliate of
such Person that is wholly owned, directly or indirectly, by the ultimate parent of such Person. 
  

	1.2	Formation as a Delaware Limited Liability Company. The Company was converted into and formed as a Delaware limited liability company by execution and delivery of
the Certificates to the Secretary of State of the State of Delaware on May 28, 2010. 

  

	1.3	Name; Registered Agent and Registered Office. The name of the Company is “EXCO Resources (PA), LLC”. The Company’s initial registered office in
the State of Delaware shall be located at 1209 Orange Street, Wilmington, Delaware 19801. The registered agent at such address is The Corporation Trust Company. The Company’s registered agent and registered office may be changed from time to
time pursuant to Section 2.3(l). 

  

	1.4	Term. The term of the Company commenced on the date the Certificates were filed with the Secretary of State of the State of Delaware and will continue until the
Company is dissolved under Article 8. 

  

	1.5	Purpose of the Company; Power. The purpose of the Company shall be to engage in the Upstream Activities, and any other lawful activity that now or in the future
may be necessary, convenient, incidental, or advisable to accomplish the foregoing purpose and that is not forbidden by Law in the jurisdictions in which the Company engages in such business or activities. The Company shall have all powers and
privileges granted by the Delaware Act, any other Law, or by this Agreement, including incidental powers thereto, to the extent that such powers and privileges are necessary, customary, convenient or incidental to the attainment of the
Company’s business and purpose as set forth in this Section 1.5. 

  

	1.6	Fiscal Year. The fiscal year of the Company will begin on January 1 and end on December 31 of each Calendar Year (the “Fiscal Year”).

  

	1.7	Title to Company Property. All property owned by the Company will be deemed to be owned solely by the Company, and no Member individually will have any interest
in such property. No Member and no successor or assign of any Member will have the right to have the property of the Company partitioned, or to file a complaint or institute any Proceeding at Law or in equity to have the property of the Company
partitioned, and each Member, on behalf of itself and its successors and assigns, hereby irrevocably waives any such right. 

  

	1.8	Membership Interests Uncertificated. The Membership Interests held by each Member will be uncertificated. 

 

	1.9	 Qualification in Other Jurisdictions. The Company’s officers shall cause the Company to be qualified, formed or registered to conduct
business, and if applicable file for use of assumed or fictitious names, in any jurisdiction in which the Company transacts business. At the request of any Member, each Member shall execute, acknowledge,

  

 19 

	 	
swear to and deliver all certificates and other instruments conforming with this Agreement that are necessary or appropriate to qualify, continue and/or terminate the Company as a foreign limited
liability company in all jurisdictions in which the Company may conduct business, provided that no Member shall be required to file any general consent to service of process or to qualify as a foreign corporation, limited liability company,
partnership or other entity in any jurisdiction by virtue of the business conducted or to be conducted by the Company. 

  

	1.10	Principal Office. The Company’s principal office shall be located at 3000 Ericsson Dr., Suite 200, Warrendale, Pennsylvania 15086. The Management Board may
change the Company’s principal office from time to time pursuant to Section 2.3(l), which need not be in Delaware. The Company may have such other places of business as the Management Board may designate. 

 

	1.11	No State Law Partnership. The Members intend that: (a) the Company not be a common law partnership or joint venture; and (b) the Company not create any
agency or other relationship creating fiduciary or quasi-fiduciary duties of any Member to the Company or to any other Member, and this Agreement may not be construed to suggest otherwise. This Agreement shall not subject the Members to joint and
several or vicarious liability or impose any duty, obligation or liability that would arise therefrom with respect to any or all of the Members or the Company. 

ARTICLE 2 

MANAGEMENT 
  

	2.1	Management under Direction of Management Board. Except as otherwise expressly provided in this Agreement or required under the Delaware Act, the business and
affairs of the Company shall be managed by a board of managers (the “Management Board” and each member of the Management Board, a “Board Member”). The Management Board shall have full and complete authority, power,
and discretion to manage and control the business, affairs, and properties of the Company and to make all decisions regarding those matters and to perform any and all other acts or activities customary or incidental to the management of the Company
and the Business. Without limiting the generality of the foregoing and subject to the provisions of Sections 2.2 and 2.3, Management Board approval shall be required for all matters not expressly delegated by the Management Board to the officers of
the Company, or to other authorized persons in accordance with Section 2.11. All actions of a Member with respect to the Management Board shall be taken through its Board Members. 

 

	2.2	Unanimous Votes. All matters identified in this Section 2.2 shall require the affirmative vote of Board Members representing one hundred percent
(100%) of the Total Votes: 

  

	 	(a)	approval of voluntary reserves described in item (b) of the definition of “Approved Reserves”; 

 

	 	(b)	issuance of any guaranty by the Company; 

  

 20 

	 	(c)	the voluntary grant of any lien or encumbrance on any Company Property other than under an approved Development Operations Contract or Other Material Company Contract;

  

	 	(d)	approval of any decision to distribute Net Cash Flow less frequently than on a Calendar Quarter basis, or, except upon dissolution and winding up of the Company, to
distribute any Company Property other than cash, or to distribute less than all Net Cash Flow pursuant to Section 7.1; 

  

	 	(e)	approval of any decision to dispose of Company Property that has a value in excess of five million dollars (US$5,000,000) in any transaction or series of related
transactions; 

  

	 	(f)	any sale, merger, reorganization or consolidation of the Company or any decision to sell all or substantially all of the Company Property; 

 

	 	(g)	any voluntary dissolution, liquidation or winding up of the Company; 

  

	 	(h)	filing any documents to effect a Bankruptcy of the Company; 

  

	 	(i)	redeeming any Membership Interest in a manner that is not proportional to all outstanding Membership Interests; 

 

	 	(j)	any establishment of any subsidiary or any acquisition of any equity interests in another Person (other than investment of Company funds in publicly-traded securities);

  

	 	(k)	confessing a judgment against the Company in connection with any threatened or pending legal action or settling any litigation or other proceeding in which the amount
involved could reasonably be expected to exceed five hundred thousand dollars (US$500,000), in either case, relating to the Business; 

  

	 	(l)	the conversion of the Company to a different form of entity, changing the name of the Company or conducting the Business under a name other than the name set forth in
Section 1.3, or moving the Company’s principal office from the location set forth in Section 1.10; 

  

	 	(m)	Company participation in any business or operations other than as provided in Section 1.5; 

 

	 	(n)	changing the method of accounting (other than in connection with a tax-related action or decision made by the Tax Matters Member pursuant to the authority granted
herein) or outside auditors of the Company; 

  

	 	(o)	the voluntary amendment of the Certificates; 

  

	 	(p)	allowing any contribution to the capital of the Company by any Member in any form other than cash; 

 

 21 

	 	(q)	the registration of any equity or debt securities of the Company under applicable United States federal or foreign securities Laws or any public offering of equity or
debt securities of the Company; 

  

	 	(r)	entering into any agreement pursuant to which the Company would be prohibited or restricted from engaging in any lawful business or activity or competing with any
Person in any geographic area; 

  

	 	(s)	except with respect to a Defaulting Member, distributing any cash or Company Property in a manner that is not proportional to all outstanding Membership Interests;

  

	 	(t)	issuing or committing to issue any additional Membership Interests or other equity or debt securities of the Company or options to acquire any such securities;

  

	 	(u)	any incurrence, assumption or guaranty of any indebtedness for borrowed money by the Company; 

 

	 	(v)	any loan of Company funds or assets to any Person (excluding for this purpose accounts receivable on normal commercial terms); 

 

	 	(w)	except for the rights and waivers set forth in Article 8, providing any indemnification rights to any Covered Person or waiving any claims against any Person;

  

	 	(x)	any acquisition of Oil and Gas Assets (other than Operating Assets in the ordinary course of business) that are not part of a Budgeted Acquisition for consideration in
excess of five hundred thousand dollars ($US500,000) in any transaction or series of related transactions; 

  

	 	(y)	upon dissolution and winding up of the Company, the sale of Oil and Gas Assets that would otherwise be distributed in kind and distribution of cash in lieu thereof;

  

	 	(z)	approval of any cash call to the Members pursuant to Section 5.3 for expenditures that are not made pursuant to an Annual Work Program and Budget;

  

	 	(aa)	making any election to resign as the Joint Development Operator under the Joint Development Agreement; and 

 

	 	(bb)	approval of any decision that the Company sell, assign or otherwise transfer its ownership interest in any Company Technology. 

 

	2.3	Seventy Five Percent Votes. All matters identified in this Section 2.3 shall require the affirmative vote of Board Members representing seventy five percent
(75%) of the Total Votes, except for those matters identified in Sections 2.3(b) and 2.3(o), which shall require the affirmative vote of Board Members appointed by Members that are not the counterparty or Affiliates of the counterparty under
the relevant contract representing seventy five percent (75%) of the Total Votes held by such Members: 

  

	 	(a)	execution of any Development Operations Contract to be entered into by the Company that requires the approval of the Management Board pursuant to Section 3.1, and
any material amendment of or voluntary termination of any such Development Operations Contract (provided that approval of any matters described in Section 3.1(b) shall require the approval specifically set forth therein);

  

 22 

	 	(b)	execution of any Affiliate Contract (including any Marketing Agreement) to be entered into by the Company, and any material amendment of or voluntary termination of any
such Affiliate Contract; 

  

	 	(c)	delegation of authority to the officers of the Company to enter into certain Company Contracts (including Hydrocarbons sales agreements), and delegation of authority to
make Budgeted Acquisitions on behalf of the Development Parties using powers of attorney (the Management Board shall use commercially reasonable efforts to make such delegations within thirty (30) days of the Closing Date);

  

	 	(d)	execution of any Other Material Company Contract (other than Hydrocarbons sales agreements) to be entered into by the Company, and any material amendment or voluntary
subdivision of any such Other Material Company Contract (other than Hydrocarbons sales agreements); 

  

	 	(e)	approval of the final terms of any financing and security arrangements relating to the Business, including execution of any notes, bonds, indentures, loan agreements or
other material agreements between the Company and lenders, and any amendment or voluntary termination of any such agreement; 

  

	 	(f)	creation of any new officer position, other than the positions specifically set forth in Section 2.11(b)(i), determination of the rights, powers, privileges and
duties of any such new position, appointment of any Person to any such new position, and extinguishment of any such new position; 

  

	 	(g)	approval of the final terms of any settlement by the Company in respect of the Business of any claim or suit or series of related claims or suits for an amount, or
institution of litigation by the Company against any Person, for an amount in excess of two hundred and fifty thousand dollars (US$250,000) (exclusive of legal fees); 

 

	 	(h)	except as may be required by Law, altering, amending or waiving the insurance requirements for the Company set forth on Schedule 2.17; 

 

	 	(i)	approval of any decision to distribute Net Cash Flow more frequently than on a Calendar Quarter basis; 

 

	 	(j)	approval of any decision to dispose of Company Property that has a value in excess of one million dollars (US$1,000,000) but not more than five million dollars
(US$5,000,000) in any transaction or series of related transactions; 

  

 23 

	 	(k)	removal of a secondee pursuant to Section 6.2(A)(3) of any Secondment Agreement (provided that Management Board approval shall not be required to remove a secondee
that is not an officer of the Company and such non-officer secondees may be removed pursuant to Section 2.11(f)); 

  

	 	(l)	replacement of the Company’s registered office or registered agent in Delaware; 

 

	 	(m)	approval of a place of business of the Company in addition to the principal office of the Company designated pursuant to Section 1.10; 

 

	 	(n)	terminating, amending or altering any of the Services Agreements or any confirmations thereunder; 

 

	 	(o)	requests for services by the Company under any Services Agreement, and the terms and conditions for the provision of such services; 

 

	 	(p)	approval of any Budgeted Acquisition for consideration in excess of five million dollars ($US5,000,000) in any transaction or series of related transactions;

  

	 	(q)	approval of technical standards and guidelines developed pursuant to Section 2.13(a), the HSSE Principles, the HSSE Plan, the HSSE Management System, and any
amendment or termination of any such items; 

  

	 	(r)	approval of the conflict of interest policy to be developed pursuant to Section 2.14, and any amendment or termination of such policy; 

 

	 	(s)	except as provided in Sections 2.11(b)(ii) and 2.11(b)(iii), appointing, ratifying, removing, establishing or modifying the rights, powers, privileges and duties of any
officer of the Company or, except as provided in Section 11.4, the Tax Matter Member; 

  

	 	(t)	any establishment of any employee position at the Company; 

  

	 	(u)	opening any bank account for the Company or designating or changing any signatory on any such account; 

 

	 	(v)	initiating any legal action or arbitration by or on behalf of the Company: (i) in excess of one hundred thousand dollars ($US100,000); or (ii) against any
Governmental Authority; 

  

	 	(w)	following termination of the Joint Development Agreement, approval of any Annual Work Program and Budget proposed pursuant to Section 3.2, and any amendment
thereto; 

  

	 	(x)	any acquisition of Operating Assets for consideration in excess of five million dollars ($US5,000,000) in any transaction or series of related transactions;

  

 24 

	 	(y)	internal control programs for the Company established by the Vice President of Finance and Business Services; 

 

	 	(z)	approval of the priority as between Standards Asset Upgrades to be performed by the Development Parties and/or Joint Entities; 

 

	 	(aa)	so long as the Joint Development Agreement is in effect, the conduct of Standards Asset Upgrades pursuant to any Annual Work Program and Budget which would cause the
aggregate costs incurred by the Development Parties and/or Joint Entities in respect of Standards Asset Upgrades during the relevant Calendar Year to exceed five million dollars (US$5,000,000), and following the expiration of the Joint Development
Agreement, the conduct of Standards Asset Upgrades in any Calendar Year which would cause the aggregate costs incurred by the Company, Affiliates of the Members and/or Joint Entities in respect of Standards Asset Upgrades during such Calendar Year
to exceed five million dollars (US$5,000,000); 

  

	 	(bb)	approval of principles and guidelines to be observed by Company officers when negotiating and executing Company Contracts that are Hydrocarbons sales agreements; and

  

	 	(cc)	any other matter primarily relating to the Business or the Company Property not otherwise identified in Section 2.2 or this Section 2.3 which requires the
approval of the Management Board pursuant to the terms of this Agreement. 

 In the event the Company forms or acquires any direct
or indirect wholly or partially-owned subsidiary (excluding investments of Company funds in publicly-traded securities), any matter described in Sections 2.2 and 2.3 shall, if affecting the subsidiary, be subject to the same approvals set forth in
such Sections 2.2 and 2.3. Notwithstanding anything to the contrary in Section 2.2 or in Section 2.3, other than as provided in Section 2.3(z), the Management Board shall be deemed to have approved any activities to be performed by
the Company in connection with the performance of Required Asset Upgrades. 
  

	2.4	Number, Tenure and Qualification. 

  

	(a)	 The Management Board shall consist of eight (8) Board Members. Each of BG Affiliate Group and EXCO Affiliate Group shall be entitled to appoint
four (4) Board Members and three (3) alternate Board Members. Each of (i) the Board Members of the BG Affiliate Group and (ii) the Board Members of the EXCO Affiliate Group shall be referred to as a separate group (each a
“Group”) such that the Management Board shall be comprised of at least two different Groups of Board Members. The Board Members appointed by a Member, or in any absence of such Board Member, any alternate appointed by such Member,
shall be authorized to represent and bind such Member with respect to any matter which is within the powers of the Management Board and is properly brought before the Management Board. Each alternate Board Member shall be entitled to attend
Management Board meetings. The Board Members and alternate Board Members may also bring to any Management Board meetings such advisors as they may 

 

 25 

 
deem appropriate. Each Affiliated Member Group shall appoint its initial Board Members and alternate Board Members by notice to the other Members on or prior to the first meeting of the
Management Board or the first required vote of the Management Board. All actions of a Member with respect to a Management Board shall be taken through its Board Members or alternate Board Members. 

 

	(b)	Each of BG Affiliate Group and EXCO Affiliate Group shall have the right to change any of its Board Members and its alternate Board Members at any time by giving notice
of such change to the Company and the other Members. 

  

	(c)	Any Board Member designated in accordance with this section shall be immediately removed from the Management Board at any time that the Affiliated Member Group that
designated such Board Member ceases to own any Membership Interest. 

  

	(d)	A Board Member need not be a resident of the State of Delaware. A Board Member shall hold office until the earlier of (i) the Board Member’s successor being
duly appointed or (ii) such Board Member’s withdrawal, death, removal or resignation. 

  

	(e)	A Person that serves as a Board Member shall not be required to be a Board Member as his sole and exclusive occupation, and a Board Member may have other business
interests and may engage in other investments, occupations and activities in addition to those relating to the Company. 

  

	2.5	Voting Proxies; Quorum; Meetings of Management Board; No Fiduciary Duties. 

 

	(a)	A Board Member may vote at a meeting by a written proxy executed by that Board Member and delivered to another Board Member. All decisions taken by the Management Board
shall be conclusive and binding on all Members. Except as provided in Section 2.5(b), attendance (either in person, by remote communication pursuant to Section 2.5(l), or by proxy) of Board Members representing Members holding more than
fifty percent (50%) of the Total Votes shall constitute a quorum for the transaction of Business at a meeting of the Management Board. The Board Members, collectively, shall have a total of 100 votes, as may be adjusted below (the
“Total Votes”) to cast on any action of the Management Board, with (i) the Group of Board Members elected by the BG Affiliate Group being entitled to cast the number of votes equal to the product (rounded to the nearest tenth)
of (x) the aggregate Percentage Interests of the members of the BG Affiliate Group and (y) 100, and (ii) the Group of Board Members elected by the EXCO Affiliate Group being entitled to cast the number of votes equal to the product
(rounded to the nearest tenth) of (x) the aggregate Percentage Interests of the members of the EXCO Affiliate Group and (y) 100. If the calculation does not yield exactly 100 votes, then each Group of Board Members’ votes shall be
rounded to the nearest 0.01. Any Board Member of a Group of Board Members may cast any or all votes entitled to be cast by that Group of Board Members. Except as otherwise expressly provided in this Agreement, any action or event relating to
Business conducted at a Management Board meeting shall be deemed approved if such action or event receives the required Management Board approval at a meeting at which a quorum is present. 

 

 26 

	(b)	Notwithstanding anything to the contrary in this Agreement, any actions by the Company in connection with a breach, default, indemnity or other claim (or alleged
breach, default, indemnity or other claim) by a Member or its Affiliate under an Affiliate Contract or other transaction with a Member or its Affiliate (such as a waiver of the breach or default, notice of breach or default or notice of termination
for breach or default in accordance with the terms of the Affiliate Contract) or enforcement or exercise of any of the Company’s rights or remedies in respect to such breach, default, indemnity or other claim (or alleged breach, default,
indemnity or other claim) or otherwise under such Affiliate Contract or in connection with such transaction (collectively, “Enforcement Activities”) shall be conducted by or under the direction of the Management Board, provided that
any Board Member designated by a Member (a “Conflicted Member”) that is, or has an Affiliate (other than the Company) that is the counterparty under such Affiliate Contract or transaction, and the Conflicted Member shall not
participate in any vote regarding such Enforcement Activities at any meeting of the Management Board, shall not be required to be present to constitute a quorum of such Management Board, and shall not be counted for purposes of determining whether
such actions by the Company receive the minimum vote necessary to take such action; provided, further, that no officer or other agent of the Company that is also a present officer, director, member, manager, stockholder, partner, employee or other
agent or Affiliate of a Conflicted Member or one of its Affiliates shall have any obligation to take or refrain from taking any action on behalf of the Company or be requested or required by the Company or Management Board to take or refrain from
taking any action with respect to any Enforcement Activities including such Conflicted Member, except to provide information, documents and other related items reasonably requested by the Company or any Member in connection with such Enforcement
Activities. Except with respect to such Person’s failure to provide information, documents or other related items requested by the Company or any Member in connection with such Enforcement Action and to provide testimony, give evidence and
otherwise participate in any suit, litigation, arbitration or other dispute resolution proceeding involving the Conflicted Member, any such Person’s failure or refusal to take or refrain from taking any such action shall not constitute:
(i) a breach of any duty, fiduciary or otherwise, owed by such Person to the Company; or (ii) fraud, bad faith or willful misconduct on the part of such Person. Any officer, director, manager, member, stockholder, partner, employee or
other agent of a Member, or an Affiliate of such Member, other than a Conflicted Member, is authorized to take or refrain from taking any action on behalf of the Company associated with any Enforcement Activities described in the foregoing two
sentences. In the event any Affiliate Contract provides for rights of audit, or any right to request information, any Member other than a Conflicted Member shall be entitled, without a vote, to require by notice to the Company and the other Members
that the Company exercise such rights of audit or request information. For the avoidance of doubt, removal of a secondee under Section 6.2(A)(3) of a Secondment Agreement shall be an Enforcement Activity. 

 

	(c)	The Management Board may establish such subcommittees as it may deem appropriate. The functions of such subcommittees shall be to serve in an advisory capacity only.
Each Member shall have the right to appoint a representative to each subcommittee. 

  

 27 

	(d)	The President and General Manager may call a meeting of the Management Board by giving notice to the Members at least fifteen (15) days in advance of such meeting.
Any Member may request a meeting of the Management Board by giving notice to the other Members and the President and General Manager, which notice shall include any proposals being proposed by such Member for consideration at the meeting (including
appropriate supporting information not previously distributed to such Members). Upon receiving such request, the President and General Manager shall call such meeting for a date not less than fifteen (15) days nor more than twenty
(20) days after receipt of the request. 

  

	(e)	Each notice of a meeting of a Management Board as provided by the President and General Manager shall contain: (i) the date, time and location of the meeting;
(ii) an agenda of the matters and proposals to be considered and/or voted upon; and (iii) copies of all proposals to be considered at the meeting (including appropriate supporting information not previously distributed to the Members). A
Member, by notice to the other Members and the President and General Manager, which notice shall include any additional proposals being proposed by such Member to be considered at the meeting (including appropriate supporting information not
previously distributed to the Members), given not less than five (5) Business Days prior to a meeting, may add additional matters to the agenda for a meeting. On the request of a Member, and with the unanimous consent of all other Members, the
Management Board may consider at a meeting a proposal not contained in such meeting agenda. 

  

	(f)	There shall be at least one (1) meeting of the Management Board per Calendar Quarter unless all Members agree in writing to the contrary. Meetings of each
subcommittee shall take place as often as the Management Board shall determine. All meetings of the Management Board and each subcommittee shall be held in the principal offices of the Company, or elsewhere as the Management Board or such
subcommittee may mutually decide, which alternate location may be within or outside the State of Delaware. 

  

	(g)	With respect to meetings of the Management Board and each subcommittee, the President and General Manager’s duties shall include timely preparation and
distribution of the agenda. 

  

	(h)	 Until the first anniversary of the Closing Date, the chairman of the Management Board shall be a Board Member designated by the EXCO Member Group.
Thereafter, the right to appoint the chairman of the Management Board shall be rotated on an annual basis among the Affiliated Member Groups, with such rotation proceeding in order of highest aggregate Membership Interests of such Affiliated
Member Groups (and alphabetically among Affiliated Member Groups with identical aggregate Membership Interests), and with the Member named in the preceding sentence being excluded from the first round of rotation; provided however that (i) any
Affiliated Member Group holding less than twenty-five percent (25%) of the aggregate Membership Interests of the Company shall not be included in the foregoing rotation and shall not have a right to appoint the chairman of the Management Board
and (ii) any Affiliated Member Group that is created as the result of a Transfer of a Membership Interest shall be added to the end of the rotation at the time of such Transfer. Any Affiliated Member Group may waive its right

  

 28 

	 	
to appoint the chairman. For the avoidance of doubt, the chairman shall have no special casting or deciding vote on any matter presented to the Management Board. The chairman of the Management
Board shall appoint a secretary who shall make a record of each proposal voted on and the results of such voting at such Management Board meeting. Each Board Member shall sign and be provided a copy of such record at the end of such meeting, and it
shall be considered the final record of the decisions of such Management Board. 

  

	(i)	The secretary of the Management Board shall provide each Member with a copy of the minutes of each Management Board meeting within fifteen (15) Business Days after
the end of the meeting. Each such Member shall have fifteen (15) days after receipt of such minutes to give notice to the secretary of any objections to the minutes. A failure to give notice specifying objection to such minutes within said
fifteen (15) day period shall be deemed to be approval of such minutes. In any event, the votes recorded under Section 2.5(h) shall take precedence over the minutes described above. 

 

	(j)	In lieu of a meeting, any Member may submit any proposal that is within the powers of the Management Board to approve or disapprove to the Management Board for a vote
by notice. The proposing Member shall notify the President and General Manager with written materials describing the proposal and the President and General Manager shall provide a copy of such proposal to each Member. Any such proposal by a
proposing Member shall include with such proposal adequate documentation to enable the other Members to make a decision. Each Member (including the proposing Member) shall communicate its vote on the proposal by notice to the President and General
Manager and the other Members within fifteen (15) days after receipt of the proposal from the President and General Manager. Any Member failing to communicate its vote in a timely manner shall be deemed to have voted against such proposal.
Within five (5) Business Days following the expiration of the relevant time period, the President and General Manager shall give each Member a confirmation notice stating the tabulation and results of the vote on such proposal.

  

	(k)	From time to time, the Management Board may approve guidelines, standards or procedures regarding the implementation of the Business to be observed in the conduct of
the Business by the Company. 

  

	(l)	Board Members may participate in any meeting by means of conference telephone or similar remote communications equipment by means of which all Persons participating in
the meeting can hear each other and participation in such a meeting shall constitute presence in person at such meeting. 

  

	(m)	Attendance of a Board Member at any meeting of the Management Board (including by telephone or similar remote communication equipment) shall constitute a waiver of
notice of such meeting, except where such Board Member attends the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not properly called or convened and notifies the other Board Members
at such meeting of such purpose. 

  

 29 

	(n)	No Board Member, nor any Member appointing any such Board Member, shall owe any fiduciary duty to the Company, any other Member or Members as a group in connection with
the activities of the Board Members or the Management Board, and no Board Member, nor any Member or Member(s) appointing any such Board Member, shall be obligated to act in the interests of the Company, any other Member or Members as a group. To the
extent permitted by Law, the Board Members shall not be subject to any other or different standards (including fiduciary standards) imposed by this Agreement, any other agreement contemplated hereby or under the Delaware Act or any other Law or at
equity. 

  

	(o)	All notices and communications required or permitted to be given to the Board Members and the President and General Manager pursuant to this Article 2 shall be
sufficient in all respects if given in writing and delivered personally, or sent by bonded overnight courier, or mailed by U.S. Express Mail or by certified or registered United States Mail with all postage fully prepaid, or sent by telex or
facsimile transmission, or by pdf via e-mail (provided any such telex, facsimile or email transmission is confirmed either orally or by written confirmation), addressed to the appropriate Group at the address for such Group shown below or at such
other address as such Member shall have theretofore designated by written notice delivered to the Member giving such notice: 

If to the President and General Manager: 

EXCO Resources (PA), LLC 

3000 Ericsson Dr., Suite 200 

Warrendale, Pennsylvania 15086 

Attention: President and General Manager 

Telephone: (724) 720-2500 

Fax: (724) 720-2505 

If to the EXCO Affiliate Group: 

EXCO Holding (PA), Inc. 

12377 Merit Drive, Suite 1700 

Dallas, Texas 75251 

Attention: Harold Hickey, Vice President and Chief Operating Officer 

Telephone: (214) 368-2084 

Fax: (214) 368-8754 

With a copy to: 

EXCO Resources, Inc. 

12377 Merit Drive, Suite 1700 

Dallas, Texas 75251 

Attention: William L. Boeing, General Counsel 

Telephone: (214) 368-2084 

Fax: (214) 706-3409 
  

 30 

 If to the BG Affiliate Group: 

BG US Production Company, LLC 

5444 Westheimer, Suite 1200 

Houston, Texas 77056 

Attention: Jon Harris 

Telephone: (713) 599-4000 

Fax: (713) 599-4250 

BG US Production Company, LLC 

5444 Westheimer, Suite 1200 

Houston, Texas 77056 

Attention: Chris Migura, Principal Counsel 

Telephone: (713) 599-4000 

Fax: (713) 599-4250 
 Any
notice given in accordance herewith shall be deemed to have been given when delivered to the addressee in person or by courier, or transmitted by facsimile transmission or email during normal business hours, or upon actual receipt by the addressee
after such notice has either been delivered to an overnight courier or deposited in the United States Mail, as the case may be. Each Group may change the address, telephone numbers, facsimile numbers and email addresses to which such communications
are to be addressed by giving written notice to the other Parties in the manner provided in this Section 2.5(n). 
  

	2.6	Resignation of Board Members. A Board Member may resign from the position of Board Member at any time by giving written notice to the other Board Members. The
resignation of a Board Member shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it
effective. 

  

	2.7	Removal of Board Members. Subject to the automatic removal procedures set forth in Section 2.4(c), a Board Member may only be removed by the consent of the
Affiliated Member Group then entitled to designate such Board Member in accordance with Section 2.4(a). 

  

	2.8	Vacancies. Any vacancy in the position of a Board Member that is created by the death, resignation or removal of a Board Member shall be filled only by consent
of the Affiliated Member Group then entitled to designate such Board Member in accordance with Section 2.4(a). A Board Member elected to fill a vacancy shall hold office until a successor shall be elected and shall qualify, or until the Board
Member’s earlier death, resignation or removal. 

  

	2.9	Fees and Expenses of Board Members. A Board Member shall not be entitled to any fees for serving as a Board Member. A Board Member shall be entitled to
reimbursement for all reasonable, documented, out-of-pocket costs and expenses incurred by such Board Member in its capacity as a Board Member. 

  

 31 

	2.10	No Power of Members to Bind Company. No Member shall have any power or authority to bind the Company in any way, to pledge the Company’s credit or to render
it liable for any purpose. 

  

	2.11	Delegation of Authority; Officers. 

  

	(a)	

  

	 	(i)	The Management Board shall have the power to elect, delegate authority to, and remove such officers, employees, agents and representatives of the Company as the
Management Board may from time to time deem appropriate; provided, however, that each officer appointee of the Company (other than those interim officers appointed as of the Closing Date) shall serve a three (3) year term commencing as of the
date of the appointment of such officer, subject to each officer’s appointment being subject to an annual ratification vote by the Management Board. After any Management Board vote not to ratify the appointment of any officer, the Management
Board shall, as soon as reasonably practicable thereafter, appoint a replacement officer, which replacement officer shall serve a three (3) year term (subject to annual ratification votes as described in this Section 2.11(a)(i)).

  

	 	(ii)	As of the Closing Date, the Management Board has approved interim officers of the Company. The Management Board shall use commercially reasonable efforts to identify
and create any other officer positions of the Company that it deems necessary or desirable, and elect all officers (including the officer positions being served by interim officers as of the Closing Date) of the Company that are to serve three
(3) year terms (subject to annual ratification votes in accordance with Section 2.11(a)(i)) within 30 days of the Closing Date. 

  

	 	(iii)	Any delegation of authority to take any action must be approved in the same manner as would be required for the Management Board to approve such action directly. Any
salaries paid by the Company to employees and agents of the Company shall be fixed by the Management Board in accordance with an approved Annual Work Program and Budget. All amounts to be reimbursed to the employer of any person seconded to the
Company shall be as set forth in the form of the Secondment Agreement and shall be included in the applicable Annual Work Program and Budget. 

  

	(b)	

  

	 	(i)	 Officers. The Company shall have the following officers: President and General Manager; Vice President of Finance and Business Services; Vice President
of Development and Engineering; Vice President of 

  

 32 

	 	
Drilling; Vice President of Land; Vice President of Legal; Vice President of Marketing; Vice President of HSSE; and Vice President of Operations. Except as provided in Sections 2.11(b)(ii) and
2.11(b)(iii) below, such officers shall be selected by the Management Board pursuant to Section 2.3(s) and have the rights, powers, privileges and duties given to their respective offices by the Management Board pursuant to Section 2.3(s).

  

	 	(ii)	President and General Manager. The President and General Manager shall be the chief executive officer of the Company responsible for the day to day direction of the
Company and shall see that all decisions and resolutions of the Management Board are implemented. The President and General Manager shall be based in the Company’s principal office. 

(A) If (1) the BG Affiliate Group possesses at least a twenty five percent (25%) Percentage Interest and
(2) the EXCO Affiliate Group possesses at least a twenty five percent (25%) Percentage Interest, the BG Affiliate Group and EXCO Affiliate Group shall jointly identify and approve the individual to serve as the President and General
Manager, who shall serve until the earlier of his resignation, removal or expiration of term. 
 (B) Upon a
Change in Control of either the BG Affiliate Group or the EXCO Affiliate Group and provided that the Affiliated Member Group that has not suffered a Change in Control possesses at least a twenty-five percent (25%) Percentage Interest, such
Affiliated Member Group shall, for a period of three (3) years after the Change in Control of such other Affiliated Member Group, have the exclusive right to nominate candidates for the position of President and General Manager to the
Management Board for its approval for each subsequent term. Thereafter, each Affiliated Member Group that possesses at least a twenty-five percent (25%) Percentage Interest shall have the right to nominate candidates for the position of
President and General Manager. 
  

	 	(iii)	Vice President of Finance and Business Services. The Vice President of Finance and Business Services shall be the officer of the Company responsible for the accounting,
finance, information technology and certain procurement activities of the Company. Each Affiliated Member Group shall have the right to nominate candidates for the position of Vice President of Finance and Business Services to the Management Board
for its approval; provided that the BG Affiliate Group shall have the sole right to nominate the candidates for the initial holder of the office of Vice President of Finance and Business Services to the Management Board for its approval. The Vice
President of Finance and Business Services’ duties shall include: 

 (A) supervising and
coordinating all accounting and finance activities of the Company; 
  

 33 

 (B) subject to Section 2.3(y), establishing and maintaining internal
controls for the Company, including the Company’s contracts and procurement policy; 
 (C) creating the
reports identified in Section 11.2 or, if applicable, working with the independent auditor of the Company to facilitate the creation of the reports identified in Section 11.2; 

(D) analyzing the credit risk of each counterparty with whom the Company does business; 

(E) procurement, coordination and oversight of services from the Members in accordance with the Services Agreement;

 (F) assisting the President and General Manager with the preparation of each proposed Annual Work Program and
Budget; 
 (G) maintaining the books and records of the Company, including those relating to commercial
activities of the Company; 
 (H) within one hundred twenty (120) days following the Closing Date,
reviewing the Company’s bribery and corruption control procedures and proposing to the Management Board any modifications or additional procedures considered necessary for the Company to have adequate procedures to prevent bribery and
corruption; and 
 (I) such other rights, powers, privileges and duties as may be determined by the Management
Board or delegated by the President and General Manager from time to time. 
  

	(c)	Unless otherwise agreed by the Management Board, all officers of the Company shall be seconded to the Company by the Members pursuant to a secondment agreement
substantially in the form of Exhibit “A” attached hereto. Simultaneously with the execution of this Agreement, each initial Member and the Company shall enter into a secondment agreement substantially in the form of Exhibit “A”.
Each Affiliated Member Group with a Percentage Interest greater than twenty five percent (25%) shall have the right but not the obligation to second its or its Affiliates’ employees to the Company; provided, however, that the officers of
the Company must be approved by the Management Board pursuant to Section 2.3(s) and all employees and secondees of the Company that are not officers must be approved by the President and General Manager in accordance with the Annual Work
Program and Budget; provided that: (i) if the BG Affiliate Group possesses a Percentage Interest greater than twenty five percent (25%), the BG Affiliate Group shall have the right but not the obligation to second one or more of its or its
Affiliates’ employees to the Company in each business and technical area of the Company; and (ii) if the EXCO Affiliate Group possesses a Percentage Interest greater than twenty five percent (25%), the EXCO Affiliate Group shall have the
right but not the obligation to second one or more of its or its Affiliates’ employees to the Company in each business and technical area of the Company. 

 

 34 

	(d)	Each Member shall use commercially reasonable efforts to cause its employees that are officers of the Company (including as secondees) to perform their respective
duties in good faith, in accordance with this Agreement and in a manner such officers reasonably believe to be in or not opposed to the best interests of the Company, and with the care that an ordinarily prudent person in a similar position would
use under similar circumstances. No Member shall be liable in damages to the Company or other Members for any action taken or not taken by such officer except intentional violations of criminal Law. The Company shall indemnify and hold harmless the
officers and Board Members against liabilities to third parties in accordance with Article 8 below. Nothing in this Agreement is intended to alter, amend or waive each officer’s individual duty of loyalty to the Company.

  

	(e)	Any officer may resign at any time by prior written notice to the Management Board. Any officer shall be deemed to have resigned upon such officer’s death, or
disability preventing performance of such officer’s duties. 

  

	(f)	Subject to the related expenditures being included in an approved Annual Work Program and Budget, and only with the written approval of the President and General
Manager, any officer of the Company that directly or indirectly supervises or will supervise such employee or secondee may hire and terminate employees that are not officers of the Company and second and terminate the secondment of individuals that
are not officers of the Company in accordance with the applicable Secondment Agreement. 

  

	2.12	Provision of Services by the Members. 

  

	(a)	On and effective as of the Closing Date, the Company shall enter into a Services Agreement with BG North America, LLC in substantially the form attached hereto as
Exhibit “B”. 

  

	(b)	On and effective as of the Closing Date, the Company shall enter into a Services Agreement with EXCO Resources, Inc. in substantially the form attached hereto as
Exhibit “B”. 

  

	2.13	Standard of Conduct; Health, Safety, Security and the Environment. 

  

	(a)	 The Business shall be conducted in compliance with the terms and conditions of: (i) all applicable Laws; (ii) those Leases upon which
operations are conducted; (iii) all Applicable Operating Agreements; and (iv) once approved by the Management Board in accordance with Sections 2.13(b), 2.13(c) and 2.13(d), appropriate HSSE guidelines and principles. The Company shall
conduct the Business as a reasonably prudent operator, in a good and workmanlike manner, with due diligence and dispatch, in accordance with good upstream and midstream industry practice and appropriate technical standards and guidelines issued by
the American Petroleum Institute, the American Society of Mechanical Engineers and the American National Standards Institute, among others. Within twelve (12) months of signing this Agreement, the Company shall perform a gap analysis against a
set of agreed technical standards for design, construction and operation 

  

 35 

	 	
of well and facilities within the Appalachian Area. These standards shall be submitted to the Management Board for its approval and shall include appropriate technical standards and guidelines
(as mentioned above), including agreed exceptions, and shall adhere to HSSE guidelines and principles agreed upon pursuant to Sections 2.13(b), 2.13(c) and 2.13(d). 

 

	(b)	Within sixty (60) days following the Closing Date, the Management Board shall use good faith efforts to develop HSSE principles to be observed in the conduct of
the Business (the “HSSE Principles”) which at a minimum shall include: (i) the goals of preventing injuries and providing a healthy, safe and secure working environment; (ii) protection of the environment; (iii) the
responsibility to seek continuous improvement in HSSE performance; and (iv) the principle that level of risk is the primary criterion for facilities design. 

 

	(c)	Within one hundred twenty (120) days following the Closing Date, the Management Board shall use good faith efforts to develop an HSSE plan to be observed in the
conduct of the Business (the “HSSE Plan”) which is consistent with the HSSE Principles and the relevant technical standards and codes of practice issued by American professional bodies, including the American Petroleum Institute,
the American Society of Mechanical Engineers, the American National Standards Institute, and all applicable Laws. 

  

	(d)	Within two (2) years following the Closing Date, the Management Board shall have used good faith efforts to develop and implement an HSSE management system to be
observed in the conduct of the Business (an “HSSE Management System”) which addresses the HSSE risks specific to the conduct of all Business, and the management of controls to eliminate, reduce or mitigate HSSE risks.

  

	(e)	The Management Board shall use reasonable efforts to make the HSSE Principles, HSSE Plan and HSSE Management System consistent, to the extent practicable, with the
principles, plan and management system adopted under the Joint Development Agreement among BG US Production Company, LLC, EXCO Operating Company, LP and EXCO Production Company, LP dated effective August 14, 2009. 

 

	(f)	As promptly as practicable following the Closing Date, the Vice President of HSSE shall establish and, thereafter, shall manage, a program to track greenhouse gas
emissions from Company Property. 

  

	(g)	From time to time, the Management Board may amend the HSSE Principles, HSSE Plan, and the HSSE Management System, as the case may be, subject to the voting thresholds
and procedures set forth herein. 

  

	2.14	Conflict of Interest Policy. Within sixty (60) days following the Closing Date, the Management Board shall use good faith efforts to develop a policy for
the Company regarding required disclosure of conflicts of interest that any Member, Affiliate of a Member, and any officer, director or key employee of any Member, Affiliate of a Member may have with the interests of the Company.

  

 36 

	2.15	Certain Reports. 

  

	(a)	The Company shall provide the following data and reports, as they are currently received, produced or compiled, for each Development Operation or other operation
conducted by the Company to each Participating Member for such Development Operation or operation: 

  

	 	(i)	copies of all logs or surveys, including in digitally recorded format if such exists; 

 

	 	(ii)	daily drilling and production reports; 

  

	 	(iii)	copies of all tests and core data and analysis reports; 

  

	 	(iv)	final well recap reports; 

  

	 	(v)	copies of all plugging reports; 

  

	 	(vi)	as requested by a Participating Member from time to time and, except as prohibited by restrictions under third party contracts (which restrictions the Company shall use
its reasonable efforts to have waived), copies of current geological and geophysical maps, seismic sections and shot point location maps; 

  

	 	(vii)	engineering studies, development schedules and annual progress reports on development projects; 

 

	 	(viii)	field and well performance reports, including reservoir studies and reserve estimates; 

 

	 	(ix)	copies of written notices provided by any third Person regarding violations or potential violations of applicable Law; 

 

	 	(x)	copies of all material reports provided to any Governmental Authority; 

  

	 	(xi)	upon written request of a Participating Member, copies of any material correspondence between such operator and any Governmental Authority; 

 

	 	(xii)	copies of all title opinions, including drill site title opinions and division order title opinions; 

 

	 	(xiii)	copies of all correspondence received by the Company in its capacity as a working interest owner under any joint operating agreement or other joint venture agreement,
including, for the avoidance of doubt, copies of all election notices, AFEs and reports; 

  

	 	(xiv)	such other information as may be reasonably requested by a Participating Member; and 

 

	 	(xv)	such other reports as may be directed by the Management Board. 

  

 37 

	(b)	The Company shall, in the conduct of Development Operations and the Business: 

 

	 	(i)	report to the Members within 24 hours of the Vice President of HSSE receiving notice thereof, details of fatalities, lost time incidents, material environmental
incidents and any other material incidents which (in each case) may present a reputational risk to the Company or any Member and also provide copies of any written notices received from Governmental Authorities or third parties with respect to such
fatalities and incidents; 

  

	 	(ii)	 prepare an HSSE report to be submitted to the Members on the fifteenth
(15th) day of April, July, October and January of
each year in respect of the previous three (3) months, and monthly with respect to item (ii)(C) only, with content to be agreed by the Management Board but containing at a minimum: 

(A) progress against the HSSE Plan applicable to such period; 

(B) status of HSSE actions relating to HSSE audits; 

(C) occupational safety indicators (e.g., fatalities and lost time incidents and frequency, recordable incidents and
frequency and total man hours worked) of the Company (and as agreed to as part of the HSSE Plan, its contractors and subcontractors); 

(D) known environmental incidents (e.g. leaks, spills, and cases of violations of environmental Laws and permits); and

 (E) HSSE related claims. 
  

	(c)	The Company shall promptly notify the Members of any third party written claim or suit arising from Development Operations or other operations of the Company of which
the Company becomes aware for which the aggregate liability of the Development Parties and Joint Entities exceeds (or is reasonably expected to exceed) one hundred thousand dollars (US$100,000), and, upon request of any such Member from time to
time, shall further provide, in a timely manner, the then current information regarding the progress and status of any such claims or suits. 

  

	2.16	Contractor Requirements and Access Rights. The Company shall: 

  

	(a)	contractually require its contractors, subcontractors and suppliers of services to comply with all applicable Laws and all safety rules of the Company, and provide to
its contractors and subcontractors copies of the HSSE Principles and HSSE Management System that are then in effect and use its commercially reasonable efforts to enforce such Persons’ compliance with such principles and system; and

  

	(b)	 with reasonable advance notice, permit Participating Members to have access during normal business hours (at their sole risk and expense,
notwithstanding anything herein to the contrary) to operations, design phase activities, books and records, and 

 

 38 

	 	
representatives of the Company for the purpose of observing operations or conducting HSSE and asset integrity audits (provided that such Participating Members shall (i) minimize any
disruption to the operations and business of the Company caused by such observation or audits, and (ii) adhere to all safety rules of such operator binding on Company personnel and the HSSE Principles and HSSE Management System then in effect
while conducting such audits). 

  

	2.17	Insurance. 

  

	(a)	Subject to the Management Board’s authority under Section 2.3(h), the Company shall maintain the insurance coverage set forth in Schedule 2.17, Part 1.
Further, the Company shall also carry insurance for the benefit of the joint account of the Development Parties and the Joint Entities as outlined in Schedule 2.17, Part 2 attached hereto and made a part hereof. All such policies shall be carried
with insurers maintaining a credit rating of at least “A-” by Standard & Poors or A.M. Best or “A3” by Moody’s. The Company shall provide copies of such policies to, in the case of insurance policies maintained for
the benefit of the Company, to the Members, and in the case of insurance policies maintained for the benefit of the Development Parties and the Joint Entities, the Members covered by such policies, and to Members who have Affiliates that are
Development Parties covered by such policies or who possess membership interests or an Affiliate who possess membership interests in any Joint Entity covered by such policies, upon request, and shall notify the affected Members if it has been unable
to obtain or maintain any of such policies. Except for worker’s compensation policies, the Company shall arrange for the Development Parties and Joint Entities, according to their respective interests, to be named as additional insureds on the
relevant policies, with waivers of subrogation in favor of all parties with respect to their interests under the Joint Development Agreement. The Company shall duly file any relevant claims and use commercially reasonable efforts to collect for the
account of the relevant Development Parties and Joint Entities any proceeds under the relevant policies. The Company shall require all contractors and subcontractors engaged in work for Development Operations to comply with the workers compensation
Laws of the state where the Development Operations are being conducted and to maintain such other insurance as the Management Board may require. 

  

	(b)	The Company shall in respect of insurance obtained by contractors and subcontractors pursuant to Section 2.17(a): (i) if requested by any Participating
Member, supply such Participating Member with evidence of the insurance that has been effected and is being maintained; and (ii) in connection with any Development Operations Contracts entered into on or after the Closing Date (excluding any
written or oral confirmations, service orders or purchase orders entered into from or after the Closing Date under contracts existing as of the Closing Date), take all commercially reasonable steps to require that such contractors and subcontractors
obtain from their insurers a waiver of subrogation in favor of the Company and each of the Development Parties and any Joint Entity that holds a working interest in the Leases served by the applicable Development Operations Contracts.

  

 39 

	2.18	Asset Upgrades. 

  

	 	(a)	Notwithstanding anything to the contrary in this Agreement, to the extent that the Company or any Member proposes that the Company conduct a Required Asset Upgrade, the
Company shall participate in such Required Asset Upgrade regardless of whether less than all of the Members elected to have the Company participate in such Required Asset Upgrade, and the cost and expense of such Required Asset Upgrade shall be
funded under the applicable Development Work Program and Annual Work Program and Budget. 

  

	 	(b)	So long as the Joint Development Agreement remains in effect, the Company or any Member may propose Standards Asset Upgrades as part of an Annual Work Program and
Budget or an amendment to an Annual Work Program and Budget, and the Management Board shall approve and include in such Annual Work Program and Budget all such proposed Standards Asset Upgrades to the extent that the aggregate costs and expenses to
be incurred by the Development Parties and/or Joint Entities with respect to such Standards Asset Upgrades during the relevant Calendar Year do not exceed five million dollars (US$5,000,000), and the costs and expenses associated with such Standards
Asset Upgrades shall be reflected in such Annual Work Program and Budget as a separate line item. In the event the aggregate costs and expenses associated with proposed Standards Asset Upgrades for any Annual Work Program and Budget would exceed
five million dollars (US$5,000,000), the Management Board shall determine the relative priority of the proposed Standards Asset Upgrades, and shall include in such Annual Work Program and Budget the proposed Standards Asset Upgrades costing, in the
aggregate, up to five million dollars (US$5,000,000), that it determines to be of a higher priority. Unless otherwise agreed by the Management Board, any proposed Standards Asset Upgrades not included in an Annual Work Program and Budget shall be
included in the following Calendar Year’s Annual Work Program and Budget (subject to limitations on associated costs and expenses set forth in this Section 2.18(b)). 

 

	 	(c)	 After the Joint Development Agreement is no longer in effect, the Company or any Member may propose Standards Asset Upgrades, and the Management Board
shall approve and include in the applicable Annual Work Program and Budget all such proposed Standards Asset Upgrades to the extent that the aggregate costs and expenses to be incurred by the Company, the Affiliates of the Members and/or the Joint
Entities with respect to Standards Asset Upgrades during the relevant Calendar Year do not exceed five million dollars (US$5,000,000), and the Company’s share of the costs and expenses associated with such Standards Asset Upgrades shall be
reflected in such Annual Work Program and Budget as a separate line item. Each budgeted Standards Asset Upgrade shall be conducted pursuant to and in accordance with the terms of the relevant Applicable Operating Agreement. In the event the
aggregate costs and expenses associated with proposed Standards Asset Upgrades to be incurred by the Company, the Affiliates of the Members and/or the Joint Entities during any Calendar Year would exceed five million dollars (US$5,000,000), the
Management Board shall determine the relative priority of the proposed Standards Asset Upgrades, and shall conduct during the relevant Calendar Year the proposed Standards Asset Upgrades costing

  

 40 

	 	
the Company, the Affiliates of the Members and/or the Joint Entities, in the aggregate, up to five million dollars (US$5,000,000), that it determines to be of a higher priority. Unless otherwise
agreed by the Management Board, any proposed Standards Asset Upgrades not conducted in a Calendar Year shall be included in the following Calendar Year’s Annual Work Program and Budget (subject to limitations on associated costs and expenses
set forth in this Section 2.18(c)), and shall be conducted during such following Calendar Year. 

  

	 	(d)	If an Asset Upgrade is not a Required Asset Upgrade or a Standards Asset Upgrade included in an Annual Work Program and Budget, then the proposing Member with respect
to such Asset Upgrade shall have the right to cause the Company to conduct such Asset Upgrade (and the Company shall own and be entitled to all benefits associated with such Asset Upgrade), even if less than all of the other non-proposing Members
elect to have the Company participate in such Asset Upgrade, provided that the liabilities, costs and expenses of such Asset Upgrade and any ongoing or increased liabilities, costs and expenses associated therewith shall be solely borne by the
proposing Member and such non-proposing Members and the Company shall have no obligation to pay any of the liabilities, costs and expenses of such Asset Upgrade or any ongoing or increased liabilities, costs and expenses associated therewith, the
proposing Member and the non-proposing Members participating in any such Asset Upgrade responsible for the liabilities, costs and expenses of such Asset Upgrade shall have the exclusive right to use any increased capacity of pipelines or gathering
systems constituting Company Property created by such Asset Upgrade, and the Company shall have no right to commit the use of any such increased capacity without the prior written consent of such Members. 

 

	 	(e)	In the event that there is any Dispute among the Members regarding whether an Asset Upgrade is or is not a Required Asset Upgrade or a Standards Asset Upgrade, such
Dispute may be referred by any Member to an expert in accordance with Section 12.3. 

 ARTICLE 3

 CONTRACT AWARDS 
  

	3.1	Contract Awards. 

  

	(a)	Subject to Sections 3.1(b) and 3.1(c) of this Agreement and Section 4.7 of the Joint Development Agreement, the Company shall award each Development Operations
Contract to the best qualified contractor considering cost, ability, availability and HSSE performance considerations (in each case, in the Company’s reasonable opinion), to perform the contract without the obligation to tender and without
informing or seeking the approval of the Management Board. The procedure set forth in this Section 3.1 shall not apply to any contracts that have been awarded, or in respect of which invitations to tender have been issued, on or before the
Closing Date, provided that the procedures set forth in this Section 3.1 shall apply to confirmations, service orders or purchase orders (whether written or oral) entered into on and after the Closing Date pursuant to existing master service
agreements that were effective prior to the Closing Date. 

  

 41 

	(b)	Prior to entering into a Development Operations Contract with a Development Party or an Affiliate of a Development Party for which one or more other Development Parties
(directly or indirectly through affiliated Entity Members of Joint Entities participating in such Development Operation) that are not Affiliates of such Development Operations Contract counterparty will be responsible for all or a portion of the
costs and expenses payable thereunder (“Unaffiliated Participating Parties”), the Company shall be required to obtain the affirmative vote of the applicable Board Members of the Management Board pursuant to Section 2.3(b).

  

	(c)	

  

	 	(i)	Notwithstanding the terms of any Applicable Operating Agreement to the contrary, from and after the Closing Date, prior to entering into a Development Operations
Contract not specifically and expressly approved as part of an approved Annual Work Program and Budget that can reasonably be expected to result in aggregate payments to the counterparty of more than five million dollars (US$5,000,000) during any
twelve (12) consecutive Calendar Month period, the Company shall present a copy of the proposed Development Operations Contract to the Members, together with the tender list and tender evaluation criteria used to secure such proposed
Development Operations Contract, for approval by the Members, acting as the Management Board. Each Member shall notify the Company and the Management Board of its approval or rejection of such Development Operations Contract within fifteen
(15) Business Days of its receipt of such materials. Failure of a Member to respond within such period shall be deemed an approval of such Development Operations Contract. The Company may only enter into such proposed Development Operations
Contract to the extent that the Management Board approves such Development Operations Contract. 

  

	 	(ii)	From and after the Closing Date, prior to entering into a Development Operations Contract that can reasonably be expected to result in aggregate payments to the
counterparty of more than one million dollars (US$1,000,000) during any twelve (12) consecutive Calendar Month period, commencing as of January 1 in any Calendar Year, except as provided in Section 3.1(c)(iii), the Company shall
obtain proposals for such services from at least two (2) service providers. For the avoidance of doubt, a contract that automatically renews (is evergreen) on a month-to-month or other periodic basis that would meet the $1,000,000 threshold if
it remained in effect for an entire twelve (12) consecutive Calendar Month period commencing as of January 1 in any Calendar Year shall be considered subject to the requirements of the preceding sentence. 

 

 42 

	 	(iii)	If the Company desires to award a Development Operations Contract that would otherwise be subject to Section 3.1(c)(i) without tender of proposals from more than
one service provider, whether because only one competent service provider can provide the contracted-for-service or otherwise, the Company may do so with the prior approval of the Management Board. The Company shall present a copy of the proposed
Development Operations Contract to the Management Board. Each Board Member shall notify the Company, and the rest of the Management Board, of its approval or rejection of such Development Operations Contract within fifteen (15) Business Days of
its receipt of such Development Operations Contract. Failure of a Board Member to respond within such period shall be deemed an approval of the award of such Development Operations Contract. The Company may only enter into a proposed Development
Operations Contract that would otherwise be subject to Section 3.1(c)(i) without tender of proposals from more than one service provider if the Management Board approves such Development Operations Contract. 

 

	 	(iv)	To the extent that the Company enters into a Development Operations Contract for which the Company is not required to obtain proposals from at least two
(2) service providers pursuant to Section 3.1(c)(i) and such Development Operations Contract can reasonably be expected to result in aggregate payment to the counterparty of more than one hundred thousand dollars (US$100,000), the Company
shall keep a written record in its files that are subject to the audit provisions of Section 2.2 of the Joint Development Agreement and Exhibit “C” of the relevant Applicable Operating Agreement explaining why multiple bids were not
obtained for such services. 

  

	 	(v)	In connection with the foregoing, the Company shall keep a written record in its files that are subject to the audit provisions of Section 2.2 of the Joint
Development Agreement and Exhibit “C” of each Joint Development Operating Agreement that (A) in the event that the Development Operations Contract is awarded pursuant to Section 3.1(c)(i), includes the proposals obtained from the
prospective service providers; or (B) in the event that the Development Operations Contract is awarded pursuant to Section 3.1(c)(iii), includes the notice to the Management Board and Management Board responses. 

 

	(d)	Upon the reasonable written request of a Member, the Company shall provide such Member a copy of any written contract or contracts of a material nature that are
utilized in connection with Joint Development Operations, Sole Risk Development Operations or Sole Risk Entity Operations in which such Member is a Participating Member, as well as other information that can reasonably be provided by the Company
regarding the use and performance of any such contract or contracts, except to the extent the Company may be prohibited from making any such disclosure under the terms and conditions of such contract and is unable through commercially reasonable
efforts to obtain consent for such disclosure. 

  

 43 

	(e)	To the extent any Development Operations Contract or Other Material Company Contract to be entered into by the Company addresses the right to hold, review and use any
data and information, including seismic, geological, geophysical and other technical data and information, the Company shall use commercially reasonable efforts to cause such Development Operations Contract or Other Material Company Contract to
permit Participating Members and their Wholly-Owned Affiliates to hold, review and use all such data and information. 

  

	3.2	Annual Work Program and Budget. For each Calendar Year, so long as the Joint Development Agreement is in effect, the Company shall prepare the Annual Work
Program and Budget in accordance with the terms of the Joint Development Agreement and the Company shall be bound by the Annual Work Program and Budget approved pursuant to the terms of the Joint Development Agreement. For each Calendar Year (or
partial Calendar Year) following the date upon which the Joint Development Agreement is terminated, an Annual Work Program and Budget shall be adopted as follows: 

(a) On or before August 15 in the Calendar Year immediately preceding the relevant Calendar Year (or, following the
termination of the Joint Development Agreement, as promptly as practicable), the President and General Manager shall prepare, or cause to be prepared, and submit to the Management Board a proposed Annual Work Program and Budget for such applicable
Calendar Year. Each such proposed Annual Work Program and Budget shall contain at least the following: 
 (i)
inclusion of expenditures required by the Company under the terms of any Company Contract during such Calendar Year, except with the approval of such Management Board to the contrary; 

(ii) an itemized estimate of the Appalachian Overhead and Company Operating Expenses for such Calendar Year; 

(iii) itemized estimates of the expenditures covered by the proposed Annual Work Program and Budget (including each
Member’s share thereof) by budget category, containing sufficient detail (to the extent available) to afford the ready identification of the nature, scope and duration of the activity in question; 

(iv) estimates of the schedule pursuant to which each Member’s share of expenses included in the Annual Work Program
and Budget are anticipated to be incurred by the Company; and 
 (v) any other information requested in writing
by a Member that can reasonably be provided by the Company. 
 (b) Itemized expenditures in an Annual Work
Program and Budget may extend over more than one Calendar Year because such itemized expenditures represent activities or operations that require commitments in excess of one Calendar Year. Once itemized expenditures are approved by the Management
Board, the President and General Manager shall not be required to resubmit them for approval of the Management Board on an annual or other periodic basis, but instead all such items shall be automatically included in future Annual Work Program and
Budgets as items which have already been approved. 
  

 44 

 (c) The President and General Manager shall regularly consult with the
Management Board during the preparation of each proposed Annual Work Program and Budget. Following receipt of a proposed Annual Work Program and Budget, each Member shall furnish to the President and General Manager and Management Board any
comments, suggestions or proposed amendments it may have respecting such proposed Annual Work Program and Budget as soon as may be reasonably practicable, and the President and General Manager shall consider and discuss such comments, suggestions
and proposed amendments with such Management Board. Unless otherwise agreed by the Management Board, within sixty (60) days after distribution of each proposed Annual Work Program and Budget for a Calendar Year, the Management Board and the
President and General Manager shall meet to consider, modify (if necessary) and approve or reject such proposed Annual Work Program and Budget. Subject to Section 3.2(d), approval of an Annual Work Program and Budget shall require the approval
of the Management Board in accordance with Section 2.3. 
 (d) In the event an Annual Work Program and
Budget is not approved on or prior to the first day of the Calendar Year to which such Annual Work Program and Budget pertains (for purposes of this Section 3.2(d), the “relevant Calendar Year”), the Management Board shall be
deemed to have approved an Annual Work Program and Budget for the relevant Calendar Year that includes the following: (i) Company Operating Expenses equal to the product of the amount of Company Operating Expenses approved in the preceding
Calendar Year’s Annual Work Program and Budget and the Operating Expense Multiplier for the relevant Calendar Year; (ii) Appalachian Overhead equal to the amount of Appalachian Overhead approved in the preceding Calendar Year’s Annual
Work Program and Budget, with such adjustments as are necessary to reflect previously approved changes in staffing or facilities costs of the Company or Technical Services to be performed that will be implemented during the Calendar Year in
question; (iii) those multi-year expenditures previously approved by the Management Board pursuant to previous Annual Work Program and Budget, that are attributable to the relevant Calendar Year; (iv) existing payment commitments to any
Person under Company Contracts (including the Services Agreements) in such Calendar Year and other costs and expenses necessary to allow the Company to comply with their obligations under all Company Contracts (including the Services Agreements);
(v) taxes payable by the Company; and (vi) to the extent not accounted for under clause (ii) above, payroll and benefits of all employees and all charges to the Company under the Secondment Agreements in respect of any Person seconded
to the Company Group. 
 (e) Any Member may propose to amend an Annual Work Program and Budget by notice to the
Management Board and the President and General Manager. Approval of any such amendment shall require the approval of the Management Board in accordance with Section 2.2(ee). Notwithstanding any provision of Section 2.5 to the contrary,
each Member shall have sixty (60) days to consider any proposed amendment that would increase the estimated costs of any Annual Work Program and Budget by more than ten percent (10%). To the extent that such amendment is approved by the
Management 
  

 45 

 
Board, the relevant Annual Work Program and Budget shall be deemed amended accordingly, provided that any such amendment shall not invalidate any commitment or expenditure already made by the
Company in accordance with any previous authorization given pursuant hereto. 
 (f) Approval by the Management
Board of an Annual Work Program and Budget shall constitute the Management Board’s deemed approval for the Company to expend up to ten percent (10%) in excess of the authorized amount for any category of the Annual Work Program and Budget,
not to exceed in the aggregate ten percent (10%) of the aggregate amount applicable to the Annual Work Program and Budget, and less, in each case, any amounts included as line items for contingencies and overruns with respect to such operations
in such category of the Annual Work Program and Budget. The President and General Manager shall promptly notify the Management Board of any expenditure made by the Company in the exercise of the rights pursuant to this Section 3.2(f). The ten
percent (10%) deemed approval level set forth in this Section 3.2(f) shall be calculated with respect to the original amount of the Annual Work Program and Budget or, once amended, the amended amount of the Annual Work Program and Budget,
provided that no expenditures incurred pursuant to Section 3.2(g) shall be deemed to be included in an approved Annual Work Program and Budget for purposes of calculating the ten percent (10%) deemed approval levels pursuant to this
Section 3.2(f), nor shall any such expenditures be considered to be amounts expended in excess of the authorized amount of any Annual Work Program and Budget for purposes of calculating the ten percent (10%) deemed approval levels.

 (g) Notwithstanding anything to the contrary in this Agreement, the President and General Manager is expressly
authorized to cause the Company to make Emergency Expenditures and incur liabilities without prior authorization or approval when necessary or advisable, in the President and General Manager’s good faith judgment, to deal with emergencies,
including explosions, fires, spills, or any other similar event, which may endanger property, lives, or the environment and it is impractical to get the Management Board approval for such expenditures and incurrence of such liabilities. The
President and General Manager shall as soon as practicable report to the Management Board the nature of any such emergency which arises, the measures it intends to take in respect of such emergency and the estimated related expenditures. 

(h) To the extent reasonably within the control of the President and General Manager, operations described in an Annual
Work Program and Budget shall be conducted at the time prescribed in such Annual Work Program and Budget. 
 (i)
For the avoidance of doubt, any reference in this Agreement to an approved Annual Work Program and Budget shall include an Annual Work Program and Budget is deemed to have been approved by the Management Board, and shall incorporate all approved
amendments thereto and all modifications to the Annual Work Program and Budget described herein that require no action on the part of the Management Board or the Members. 
  

 46 

 ARTICLE 4 

MEMBERS 

4.1 Member Information. Schedule 4.1 shows: (a) the name of each Member; (b) the aggregate amount of the Capital
Contributions made by each Member; and (c) the Percentage Interest of each Member, each as of the date of this Agreement. If any of the information contained in Schedule 4.1 changes, the Members shall promptly cause: (i) Schedule
4.1 to be amended and restated to reflect those changes and the date as of which those changes are to be effective; and (ii) a copy of the amended and restated schedule to be distributed to each Member, in which event the amended and
restated schedule shall supersede the then existing schedule to this Agreement. 
 4.2 Opportunities; Activities of the
Members. Subject to any other agreements between Members (or Affiliates of Members) and the Company, including the Joint Development Agreement, each Member acknowledges and agrees that the other Members and the Affiliates of the other Members
may from time to time be interested, directly or indirectly, in various other businesses and undertakings separate and apart from the Company, including businesses and undertakings in direct competition with the Company, and neither the Company nor
any other Member shall be entitled to notice thereof, or a right to participate therein, or any right to any profits from any such other businesses or undertakings. For the avoidance of doubt, following termination of the Joint Development
Agreement, there will no longer be an area of mutual interest between the Members in the Appalachian Area. 
 ARTICLE 5 

 CAPITALIZATION 

5.1 No Withdrawal of Capital Accounts. Except as otherwise expressly provided in this Agreement, a Member will not be entitled to
withdraw any part of its Capital Account or to receive any distribution from the Company. 
 5.2 Initial Capital
Contributions. As of the date of this Agreement, the aggregate Capital Contributions attributable to the Members and their Percentage Interests are as set forth next to their respective names on Schedule 4.1. Except as provided in
Section 5.3, no Member shall be required or authorized to make any other Capital Contribution. 
 5.3 Additional Capital
Contributions. 
  

	(a)	 The Members agree that the Company shall only use Capital Contributions to fund its share of any Development Costs under the Joint Development
Agreement and not any of the Company’s revenues or receipts. So long as the Joint Development Agreement is in effect, each Member agrees to make, as Capital Contributions, those amounts required to be paid by such Member and/or such
Member’s Percentage Interest share of amounts required to be paid by the Company to the Joint Operations Account pursuant to the terms of the Joint Development Agreement. In addition, to the extent that, at any time, the Company’s gross
receipts are not anticipated to be sufficient to satisfy the estimated expenditures to be incurred in the succeeding Calendar Quarter (i) for expenditures outside of the approved Annual Work Program and Budget that are approved by the

  

 47 

	 	
Management Board or (ii) upon the termination of the Joint Development Agreement, pursuant to an approved Annual Work Program and Budget, the President and General Manager shall issue a Call
Notice to each Member for an additional Capital Contribution in an amount equal to such Member’s Percentage Interest share of the difference between such estimated expenditures and anticipated gross receipts not more than thirty (30) days
but not less than fifteen (15) days prior to the commencement of such Calendar Quarter. Further, the President and General Manager may issue Call Notices to the Members at any other time for their respective Percentage Interest share of other
additional Capital Contributions to the extent that the Company’s anticipated gross receipts and other additional Capital Contributions made pursuant to this Section 5.3(a) are not anticipated to be sufficient to satisfy the Company’s
estimated expenditures to be incurred during the current Calendar Quarter in accordance with this Agreement, provided that Call Notices may not be issued pursuant to this Section 5.3(a) for any estimated expenditures more than thirty
(30) days in advance of such estimated expenditures. Proper adjustment shall be made in each Calendar Month between advances made hereunder and actual expenditures, to the end that each Member bears and pays its Percentage Interest share of
expenditures, and no more. All calls for Capital Contributions shall be expressed in U.S. dollars and shall state the date on which payment is due and the bank(s) and account(s) to which payment is to be made. Each Call Notice shall specify in
reasonable detail the purpose(s) for which such additional Capital Contribution(s) are required, and the amount of the Capital Contribution(s) to be made by each Member pursuant to such Call Notice. Each Member shall contribute any additional
Capital Contribution within fifteen (15) Business Days of the date of delivery of the relevant Call Notice. If the approval of a call for additional Capital Contributions specifies the purpose for which those Capital Contributions are called,
the Company shall use the proceeds of such additional Capital Contributions exclusively for the purpose specified in such approval. 

  

	(b)	So long as the Joint Development Agreement is in effect, any payments required to be made by a Member under the Joint Development Agreement on behalf of it or the
Company will be deemed to be a Capital Contribution to the Company by such Member and thereafter such amounts will be deemed to have been paid by the Company to the Joint Operations Account. 

5.4 Statement of Estimated Expenditures. Not later than twenty (20) days prior to the commencement of each Calendar Quarter
during the term of this Agreement, the Company shall provide the Members a statement of estimated costs to be incurred and estimated Capital Contributions to be called for in such Calendar Quarter. Such statement shall be for informational purposes
only. 
 5.5 Default: Failure to Fund Additional Capital Contributions. 

 

	(a)	 (i) Any Member that fails to pay in full when due any amounts owed and undisputed under the terms of this Agreement and (ii) during the
effectiveness of the Joint Development Agreement, any Member or any Affiliate of a Member that fails to pay in full, or cause the payment in full, of any amounts owed and undisputed under the terms of the Joint Development Agreement or any
Associated Agreement (as that term is defined in the Joint Development Agreement), and (in each case) such failure is not cured within 

 

 48 

	 	
fifteen (15) days of such Member’s or its Affiliate’s receipt of a notice of default hereunder or notice of default under the Joint Development Agreement or Associated Agreement,
as applicable, shall be in default under this Agreement, and shall be referred to herein as a “Defaulting Member.” The Company shall, or any non-Defaulting Member (each, an “Affected Member”) may, give notice of
such default to the Defaulting Member, and its Credit Facility Secured Party (if any) and each of the non-defaulting Members. Any such notice given under this Agreement or under the Joint Development Agreement or any Associated Agreement shall be
considered a “Default Notice” for purposes of this Agreement. 

  

	(b)	“Default Period” means the period beginning fifteen (15) days from the receipt of a Default Notice by (i) a Defaulting Member (or the
defaulting Affiliate of such Member, as applicable) and (ii) its Credit Facility Secured Parties (if any), if such Defaulting Member and/or its Affiliate, as applicable, remains in default under Section 5.5(a), and ending when all of the
Defaulting Member’s and its Affiliates’ defaults have been remedied in full. 

  

	(c)	All amounts in default and not paid when due under this Agreement shall bear interest at the Default Interest Rate from the due date to the date of payment.

  

	(d)	So long as the Joint Development Agreement is in effect, (i) the terms of Section 5.1(c) of the Joint Development Agreement shall apply in lieu of
Section 5.5(c) hereof, and (ii) the terms of Section 5.1(d) of the Joint Development Agreement shall apply with respect to the obligation of BG (as such term is defined in the Joint Development Agreement) to make additional Capital
Contributions with respect to Carried Costs. 

 5.6 Certain Consequences of Default. 

 

	(a)	Notwithstanding any other provision in this Agreement to the contrary (x) so long as the Joint Development Agreement is in effect, the provisions of
Section 5.2 of the Joint Development Agreement shall apply in lieu of this Section 5.6, and (y) upon the termination of the Joint Development Agreement, during the Default Period, a Defaulting Member shall have no right to:

  

	 	(i)	vote on any matter with respect to which Member approval is required under the express terms of this Agreement (excluding any amendment or waiver of the terms of this
Agreement); 

  

	 	(ii)	call any Management Board or subcommittee meeting, or vote on any matter coming before the Management Board or any subcommittee; 

 

	 	(iii)	access any data or information relating to any operation conducted by the Company (except to the extent such Member or an Affiliate of such Member is providing Services
to the Company pursuant to a Services Agreement, and such data or information is necessary for such Member or Affiliate to perform its responsibilities thereunder); 

 

 49 

	 	(iv)	Transfer or Encumber all or any part of its Membership Interest except: (A) a Transfer, Encumbrance, or transfer pursuant to a Credit Facility Foreclosure of a
Membership Interest or any part thereof in favor of a Person who simultaneously with such Transfer, Encumbrance or transfer satisfies in full the Total Amount in Default; or (B) a Credit Facility Encumbrance granted pursuant to a borrowing for
which all or a portion of the proceeds thereof are used to pay the entire amount of the Total Amount in Default; or 

  

	 	(v)	withhold consent to any Transfer of all or any portion of the Membership Interest of an Affected Member pursuant to Section 9.4, or exercise any preferential
purchase right provided for in Section 9.4 in the event of such a Transfer by an Affected Member or in the event of a Change in Control of an Affected Member. 

 

	(b)	In addition to the other remedies available to the Company and the Affected Members under this Agreement and any other rights available to each Affected Member to
recover its share of the Total Amount in Default, from and after the thirtieth (30th) day of the Default Period, a Defaulting Member shall have no right to receive distributions from the Company pursuant to Article 7 until the expiration of the
Default Period, and such distributions shall instead be made to the Affected Members for advances made by such Affected Members on behalf of the Defaulting Member pursuant to Section 5.6(e), plus interest thereon as provided in
Section 5.5(c). Amounts received towards the Total Amount in Default shall be deemed paid towards the oldest of each applicable type of expense (costs, interest or principal) first, and if there is more than one Affected Member, the
distributions attributable to the Membership Interest of the Defaulting Member shall be shared among the Affected Members in the proportions that such Affected Members’ Percentage Interests bear to the aggregate Percentage Interests of such
Affected Members. 

  

	(c)	Any Default Notice shall include a statement of the amount of money that the Defaulting Member has failed to pay. 

 

	(d)	If the Defaulting Member remedies its default in full before the Default Period commences, the Company shall promptly notify each Affected Member and such Defaulting
Member’s Credit Facility Secured Party (if any) of such occurrence. 

  

	(e)	 Upon the commencement of the Default Period, the Company shall send the Affected Members a statement of the sum of money that the Defaulting Member
failed to pay and such Affected Members shall pay such amount within fifteen (15) days following receipt of the statement. Each such Affected Member shall be required to pay that portion of the amount that the Defaulting Member failed to
furnish that such Affected Member’s Percentage Interest bears to the aggregate Percentage Interests of all Affected Members. During the effectiveness of the Joint Development Agreement, the application and distribution of amounts so collected
shall be in accordance with the terms of the Joint Development Agreement. If any Affected Member fails to timely satisfy such obligations, such Affected Member shall thereupon be a Defaulting Member subject to

  

 50 

	 	
the provisions of Sections 5.5 and 5.6. If all Affected Members fail to timely satisfy such obligations, the Members shall be deemed to have unanimously determined not to make such expenditure
and the Defaulting Member shall no longer be deemed to be in default with respect to such expenditure. 

  

	(f)	During the Default Period, each Defaulting Member shall be deemed to have elected to approve any proposed Required Asset Upgrade. 

5.7 No Interest on or Return of Capital. No Member will be entitled to interest on any Capital Contribution or Capital Account.
Except as otherwise expressly provided in this Agreement, no Member will have the right to demand or receive the return of all or any part of any Capital Contribution, and no Member will be personally liable for the return of any Capital
Contribution of the other Member. 
 5.8 Limitations upon Liability of Members. No Member shall be personally liable to
the Company, to the other Members, to the creditors of the Company or to any other third party with respect to the losses, debts or liabilities of the Company for any amount in excess of the amount of such Member’s Capital Contribution which
has not been returned to it as a distribution (including a distribution upon liquidation), plus any amount such Member is obligated to contribute pursuant to Section 5.3 but has not yet contributed and any obligation to return distributions
pursuant to Section 7.2. For purposes of the preceding sentence, distributions to a Member will first be deemed a return of its Capital Contribution. No Member will at any time be liable or held accountable to the Company, to the other Members,
to the creditors of the Company or to any other third party for or on account of any negative balance in its Capital Account. To the fullest extent permitted by the Delaware Act, but subject to Section 7.2, a Member will have no obligation to
return any distributions received from the Company. 
 ARTICLE 6 

ALLOCATIONS OF PROFITS AND LOSS 

6.1 Allocations Generally. After and subject to the application of Sections 6.2 and 6.3, Profits and Losses for each Allocation
Year shall be allocated among the Members as follows: 
  

	(a)	Allocations Generally. Profits and Losses and Simulated Gain with respect to any Company Depletable Property for any Allocation Year shall be allocated to the
Members in such a manner so that the Capital Account of each Member equals (as of the end of such Allocation Year and to the fullest extent possible) the amount that would be distributed to such Member if all properties of the Company, including
cash, were sold for cash equal to their respective Tax Book Values, all liabilities allocable to such properties were then due and were satisfied according to their terms, all Minimum Gain Chargebacks and Member Minimum Gain Chargebacks required by
Section 6.2 were made, and all obligations of Members to contribute additional capital to the Company were satisfied and all remaining proceeds from such sale were distributed pursuant to Section 7.1. 

 

 51 

	(b)	Stop Loss. Notwithstanding Section 6.1(a), no allocation of Losses will be made that would create or increase a Member’s Adjusted Capital Account
Deficit. 

 6.2 Special Allocations. 

 

	(a)	Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations Section 1.704-2(f), if there is a net decrease in Company Minimum Gain during
any Allocation Year, each Member will be specially allocated items of Company income and gain for such Fiscal Year in an amount equal to such Member’s share of the net decrease in Company Minimum Gain. Allocations under the preceding sentence
will be made in accordance with Treasury Regulations Section 1.704-2(f)(6). This Section 6.2(a) is intended to comply with the minimum gain chargeback requirement in Treasury Regulations Section 1.704-2(f) and will be interpreted
consistently with that requirement. 

  

	(b)	Member Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations Section 1.704-2(i)(4), if there is a net decrease in Member Minimum
Gain attributable to Member Nonrecourse Debt during any Allocation Year, each Member who has a share of the Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulations
Section 1.704-2(i)(5), will be specially allocated items of Company income and gain for that year (and, if necessary, subsequent years) equal to such Member’s share of the net decrease in Member Minimum Gain attributable to such Member
Nonrecourse Debt, determined in a manner consistent with the provisions of Treasury Regulations Section 1.704-2(g)(2). Allocations under the previous sentence will be made in accordance with Treasury Regulations Section 1.704-2(i)(4). This
Section 6.2(b) is intended to comply with the requirement in Treasury Regulations Section 1.704-2(i)(4) and will be interpreted consistently with that requirement. 

 

	(c)	Qualified Income Offset. If any Member unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6), items of Company income and gain will be specially allocated to each such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury
Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible, provided an allocation under this Section 6.2(c) may be made only if and to the extent such Member would have an Adjusted Capital Account Deficit after all
other allocations provided for in this Section 6.2 have been tentatively made as if this Section 6.2(c) were not in this Agreement. 

  

	(d)	Gross Income Allocation. In the event any Member has an Adjusted Capital Account Deficit at the end of any Allocation Year, such Member will be specially
allocated items of Company income and gain in the amount of such excess as quickly as possible; provided, however, an allocation under this Section 6.2(d) will be made only if and to the extent such Member would have an Adjusted Capital Account
Deficit in excess of such sum after all allocations provided for in this Section 6.2 have been made as if Section 6.2(c) and this Section 6.2(d) were not in this Agreement. 

 

 52 

	(e)	Nonrecourse Deductions. “Nonrecourse deductions” (as that term is defined in Treasury Regulations Sections 1.704-2(b)(1) and (c)) for any Allocation
Year or other period will be specially allocated to the Members in proportion to their respective Percentage Interests. 

  

	(f)	Member Nonrecourse Deductions. Any Member “nonrecourse deductions” (as that term is defined in Treasury Regulations Section 1.704-2(i)) for any
Allocation Year or other period will be specially allocated to the Member who bears the economic risk of loss with respect to the “partner nonrecourse debt” (as that term is defined in Treasury Regulations Section 1.704-2(b)(4)) to
which such Member nonrecourse deductions are attributable, in accordance with Treasury Regulations Section 1.704-2(i)(1). 

  

	(g)	Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any asset of the Company under Code Section 734(b) or Code
Section 743(b) is required, under Treasury Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to Capital Accounts will be treated as an item of gain (if the
adjustment increases the basis of the Company asset) or loss (if the adjustment decreases such basis) and that gain or loss will be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are
required to be adjusted under that section of the Treasury Regulations. 

  

	(h)	Simulated Depletion, Simulated Loss, and IDCs. Simulated Depletion, Simulated Loss, and IDCs with respect to each Depletable Property (including any indirect
ownership of such property through an equity interest in an entity classified as a partnership or disregarded entity for federal income tax purposes) of the Company will be allocated in proportion to the manner in which the Simulated Basis of such
Depletable Property is allocated among the Members pursuant to subparagraph (v) of the definition of “Capital Account.” 

  

	(i)	For purposes of determining Income, Loss or any other items allocable to any period, Profit, Loss and any such other items will be determined on a daily, monthly or
other basis, using any permissible method under Code Section 706 and the Treasury Regulations thereunder; provided, however, that Income or Loss described in clause (iii) or clause (iv) of the definition of “Profit” and
“Loss” will be allocated only to those persons who held interests in the Company immediately before the event giving rise to such Profit or Loss. 

6.3 Tax Allocations. 
  

	(a)	Except as provided in this Section 6.3, each item of income, gain, loss and deduction of the Company for federal income tax purposes shall be allocated among the
Members in the same manner as the corresponding items are allocated under Section 6.1 and Section 6.2. 

  

	(b)	 When the Tax Book Value of a Company asset is different from its adjusted tax basis for income tax purposes, then, solely for federal, state and local
income tax purposes, income, gain, loss, deduction and credit with respect to such asset, or tax basis with 

  

 53 

	 	
respect to Depletable Property, (each, a “Section 704(c) Asset”) will be allocated among the Members to take this difference into account in accordance with the principles
of Code Section 704(c), as set forth herein and in the Treasury Regulations thereunder and under Code Section 704(b). In the case of Depletable Property constituting a Section 704(c) Asset that is treated as contributed by a Member
(the “Contributing Member”) to the Company, the adjusted tax basis of such Depletable Property as of the time of contribution shall be allocated to the Member other than the Contributing Member (the “Noncontributing
Member”) in an amount equal to the lesser of (i) the Depletable Property’s adjusted tax basis and (ii) the Noncontributing Member’s Percentage Interest share of the Simulated Basis of the Depletable Property, and any
remaining unallocated portion of the adjusted tax basis shall be allocated to the Contributing Member. In the case of any Depletable Property theretofore held by the Company that becomes a Section 704(c) Asset as a result of the adjustment of
its Tax Book Value, the adjusted tax basis theretofore allocated to the Members shall be reallocated among the Members under similar principles adopted, subject to Section 2.1 hereof, by the Tax Matters Member. Except to the extent otherwise
required by final Treasury Regulations, the calculation and allocations eliminating the differences between Tax Book Value and adjusted tax basis of any other Section 704(c) Assets will be made pursuant to the “Remedial Allocation
Method” set forth in Treasury Regulations Section 1.704-3(d). For the avoidance of any doubt, it is the intention of the Members that allocations pursuant to this Section 6.3(b) be applied in a manner which enables the BG Member to
realize the tax benefits in the same amount and at the same rate and character as if the BG Member had purchased its share of the Company’s assets on the Closing Date as an outright asset purchase. 

 

	(c)	The deduction for depletion with respect to each Depletable Property and the gain or loss on the sale or other disposition by the Company of each Depletable Property
shall, in accordance with Code Section 613A(c)(7)(D), be computed for federal income tax purposes separately by the Members rather than the Company. Each Member shall separately keep records of its share of the adjusted tax basis in each
Depletable Property, adjust such share of the adjusted tax basis for any cost or percentage depletion allowable with respect to such property and use such adjusted tax basis in the computation of its cost depletion or in the computation of its gain
or loss on the disposition of such property by the Company. Upon the request of the Company, each Member shall advise the Company of its adjusted tax basis in each Depletable Property and any depletion computed with respect thereto, both as computed
in accordance with the provisions of this subsection. The Company may rely on such information and, if it is not provided by the Member, may make such reasonable assumptions as it shall determine with respect thereto. 

 

	(d)	Except as provided in Section 6.3(a), for the purposes of the separate computation of gain or loss by each Member on the sale or disposition of each Depletable
Property, the Company’s allocable share of the “amount realized” (as such term is defined in Code Section 1001(b)) from such sale or disposition shall be allocated for federal income tax purposes among the Members as follows:

  

	 	(i)	first, to the extent such amount realized constitutes a recovery of the Simulated Basis of the property, to the Members in the same percentages as the depletable basis
of such property was allocated to the Members pursuant to Section 6.3(b); and 

  

 54 

	 	(ii)	the remainder of such amount realized, if any, shall be allocated among the Members in the same manner as the corresponding item is allocated under Section 6.1(a).

  

	(e)	Allocations pursuant to this Section 6.3 are solely for purposes of federal and applicable state taxes and will not be taken into account in computing any
Member’s Capital Account. 

  

	(f)	The Members agree to be bound by the provisions of this Article 6 in reporting their shares of the Company income, gain, loss and deduction for tax purposes.

 ARTICLE 7 

DISTRIBUTIONS 

7.1 Declaration and Payment of Distributions. Except as provided in Section 8.2 regarding liquidating distributions, and
subject to Section 5.6(b), Net Cash Flow for each Calendar Quarter will be calculated by the President and General Manager within thirty (30) days after the end of such Calendar Quarter and will be distributed to the Members within
forty-five (45) days of the end of the Calendar Quarter in proportion to their respective Percentage Interests. Except as may expressly be provided otherwise in this Agreement, no Member shall have priority over any other Member, either as to
the return of Capital Contributions or as to other distributions. 
 7.2 Limitations on Distributions. 

 

	(a)	The Company shall not make a distribution to a Member to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of
the Company, other than liabilities to Members on account of their Membership Interests and liabilities for which the recourse of creditors is limited to specific property of the Company, exceed the fair value of the assets of the Company, except
that the fair value of property that is subject to a liability for which the recourse of creditors is limited shall be included in the assets of the Company only to the extent that the fair value of that property exceeds that liability.

  

	(b)	A Member who has received, in respect of any Fiscal Year of the Company, an aggregate amount of distributions in excess of the amount to which it was entitled under the
terms of Section 7.1, or Article 10, shall forthwith return such excess to the Company. Any amount so repaid to the Company shall be distributed to the other Members to the extent that such other Members did not receive, in respect of such
Fiscal Year, the full amount of distributions to which such Members were entitled under Section 7.1 or Article 10, as applicable. 

  

	(c)	A Member who receives a distribution from the Company will have no liability under this Section 7.2, the Delaware Act or other applicable Law for the amount of the
distribution after the expiration of three years from the date of the distribution unless a Proceeding to recover the distribution from such Member is commenced prior to the expiration of such three-year period and an adjudication of liability
against such Member is made in the action. 

  

 55 

 7.3 Amounts of Tax Paid or Withheld. All amounts paid or withheld pursuant to the
Code or any provision of any state or local tax Law with respect to any Member will be treated as advances of amounts otherwise distributable to such Member pursuant to Section 7.1 for all purposes under this Agreement. 

7.4 Distribution in Kind. Except as provided in Article 10 or by decision of the Management Board pursuant to Section 2.2(y),
no Member, regardless of the nature of its Capital Contribution, will have a right to demand and receive any distribution in any form other than cash. 

7.5 Delaware Act Limitations. Notwithstanding anything to the contrary in this Article 6, no distribution shall be made if such
distribution would violate the Delaware Act. 
 ARTICLE 8 

INDEMNIFICATION 
  

	8.1	No Liability of Members for Company Obligations. 

  

	(a)	Except as otherwise provided by the Delaware Act, no Covered Person shall be obligated personally for any debt, obligation or liability of the Company solely by reason
of being a Covered Person. 

  

	(b)	Except as otherwise expressly required by Law, a Member, in its capacity as Member, shall have no liability in excess of: (i) the amount of its contributions to
the Company; (ii) its share of any assets and undistributed profits of the Company; (iii) its obligation to make other payments expressly provided for in this Agreement; and (iv) the amount of any distributions wrongfully distributed
to it. No Member shall have any responsibility to restore any negative balance in its Capital Account or to contribute to or in respect of the liabilities or obligations of the Company or to return distributions made by the Company, except as
expressly provided herein or required by any non-waivable provision of the Delaware Act. The agreement set forth in the immediately preceding sentence shall be deemed to be a compromise with the consent of all of the Members for purposes of
§18-502(b) of the Delaware Act. However, if any court of competent jurisdiction or properly constituted arbitration panel orders, holds or determines that, notwithstanding the provisions of this Agreement, any Member is obligated to restore any
such negative balance, make any such contribution or make any such return, such obligation shall be the obligation of such Member and not of any other Person. 

 

	8.2	Exculpation. 

  

	(a)	 No Covered Person shall be liable to the Company or any other Covered Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Covered Person on behalf of the Company and in a manner reasonably believed to be within the scope of authority conferred on such Covered Person by this Agreement or

  

 56 

	 	
a delegation of authority in accordance with this Agreement, except that: (i) a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered
Person’s fraud, bad faith, willful misconduct or gross negligence, (ii) a Covered Person that is not an officer or employee of a Member, Affiliate of a Member, the Company, or Affiliate of the Company, shall be liable for any such loss,
damage, or claim incurred by reason of such Covered Person’s breach of this Agreement (other than Section 2.13) and (iii) a Covered Person that is an officer of the Company shall be liable for any such loss, damage, or claim incurred
by reason of such Covered Person’s breach of his or her duty of loyalty to the Company, in each case, as established by a non-appealable court order, judgment, decree or decision or pursuant to a final and binding decision of an arbitration
panel pursuant to Section 12.2. 

  

	(b)	A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented
to the Company by any Person as to matters the Covered Person reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including
information, opinions, reports or statements as to the value and amount of the assets, liabilities, Net Profits, Net Losses or Available Cash or any other facts pertinent to the existence and amount of Assets from which distributions to Members
might properly be paid. 

  

	8.3	Indemnification. To the fullest extent permitted by applicable Law, the Company shall indemnify and hold harmless each Covered Person from and against all Claims
arising from or related to any act or omission performed or omitted by such Covered Person on behalf of the Company and in a manner reasonably believed to be within the scope of authority conferred on such Covered Person by this Agreement or a
delegation of authority in accordance with this Agreement, except that: (a) no Covered Person shall be entitled to be indemnified in respect of any Claim by reason of such Covered Person’s fraud, bad faith, willful misconduct or gross
negligence; (b) no Covered Person that is not an officer or employee of a Member, Affiliate of a Member, the Company, or Affiliate of the Company shall be entitled to be indemnified in respect of any Claim by reason of such Covered
Person’s breach of this Agreement (other than Section 2.13); and (c) no Covered Person that is an officer of the Company shall be entitled to be indemnified in respect of any Claim by reason of such Covered Person’s breach of his
or her duty of loyalty to the Company, in each case, as established by a non-appealable court order, judgment, decree or decision or pursuant to a final and binding decision of an arbitration panel pursuant to Section 12.2. Any indemnity under
this Section 8.3 shall be provided out of and to the extent of the Assets only (including the proceeds of any insurance policy obtained pursuant to Section 8.5), and no Covered Person shall have any personal liability on account thereof.
Any amendment, modification or repeal of this Section 8.3 or any provision in this Section 8.3 shall be prospective only and shall not in any way affect the rights of any Covered Person under this Section 8.3 as in effect immediately
prior to such amendment, modification or repeal with respect to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when claims relating to such matters may arise or be asserted.

  

 57 

	8.4	Expenses. To the fullest extent permitted by applicable Law, expenses (including legal fees) incurred by a Covered Person in defending any claim, demand, action,
suit or proceeding shall, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Covered Person to repay
such amount if it shall be determined that the Covered Person is not entitled to be indemnified as authorized in Section 8.3. 

  

	8.5	Insurance. 

  

	(a)	Subject to Section 2.3(h), the Company may purchase and maintain insurance, to the extent and in such amounts as the Management Board shall, in its sole
discretion, deem reasonable, on behalf of Covered Persons and such other Persons as the Management Board shall determine, against any liability that may be asserted against or expenses that may be incurred by any such Person in connection with the
Business or such indemnities, regardless of whether the Company would have the power to indemnify such Person against such liability under the provisions of this Agreement. Subject to Section 2.2(w), the Management Board and the Company may
enter into indemnity contracts with Covered Persons and such other Persons as the Management Board shall determine and adopt written procedures pursuant to which arrangements are made for the advancement of expenses and the funding of obligations
under Section 8.4 and containing such other procedures regarding indemnification as are appropriate. 

  

	(b)	Notwithstanding anything else in this Agreement, the Company shall not be required to provide indemnification to any Covered Person for any Claim to the extent that
such Claim is insured against by such Covered Person’s workers compensation insurance. 

  

	8.6	 Primary Obligation. The Company hereby acknowledges that the Covered Persons may have certain rights to indemnification, advancement of expenses
and/or insurance provided by Members and certain of their Affiliates (collectively, the “Member Indemnitors”). The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to the Covered
Persons under Sections 8.3 and 8.4 are primary and any obligation of the Member Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by the Covered Persons are secondary), (ii) that it
shall be required to advance the full amount of expenses incurred by the Covered Persons and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as
required by the terms of Sections 8.3 and 8.4 of this Agreement (or any other agreement between the Company and the Covered Person), without regard to any rights the Covered Person may have against the Member Indemnitors, and (iii) that the
Company irrevocably waives, relinquishes and releases the Member Indemnitors from any and all claims against the Member Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that
no advancement or payment by the Member Indemnitors on behalf of a Covered Person with respect to any claim for which the Covered Person has sought indemnification from the Company pursuant to Sections 8.3 and 8.4 shall affect the foregoing and the
Member Indemnitors shall have a right of contribution and/or be subrogated to the 

  

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extent of such advancement or payment to all of the rights of recovery of the Covered Person against the Company. The Company agrees that the Member Indemnitors who are not Members are express
third party beneficiaries of the terms of this Section 8.6. 

 ARTICLE 9 

TRANSFERABILITY 

9.1 Transfer. 
  

	(a)	Any Member may, subject to the other provisions set forth in this Agreement, and, so long as the Joint Development Agreement is in effect, subject to the terms of
Section 6.1(a) of the Joint Development Agreement, Transfer all or any undivided share of its Membership Interest. Any attempted Transfer of all or a part of a Membership Interest other than in compliance with this Agreement shall be null and
void and of no force or effect. Any Member who Transfers any Membership Interest or portion thereof shall promptly provide written notice thereof to the Company and all of the other Members. 

 

	(b)	No Transfer may be made to an individual, and except in the case of a Member transferring all of its Membership Interest, no Transfer may be made which results in the
transferor or transferee holding a Percentage Interest of less than ten percent (10%). 

  

	(c)	A transferring Member shall, notwithstanding such Transfer, be liable to the Company and the other Members for its obligation to fund its Percentage Interest share (as
of the time of the Transfer) of expenditure commitments and all other obligations, in each case, accrued under this Agreement on or prior to such Transfer, but shall be released from any other obligations thereafter accruing under this Agreement
with respect to the Percentage Interest being Transferred, except in the case where the Transfer at issue is made to an Affiliate or where there is a Credit Facility Foreclosure on all or any part of a Member’s Membership Interest, in which
cases the transferring Member or Member subject to the foreclosure, as applicable, shall remain primarily liable for all such obligations. 

  

	(d)	In connection with any Transfer of a portion (but less than all) of its Membership Interest by any member of the EXCO Affiliate Group or BG Affiliate Group to a third
party not affiliated with the EXCO Affiliate Group or the BG Affiliate Group, respectively, the EXCO Affiliate Group or the BG Affiliate Group, as applicable, shall assign such number of Total Votes equal to the product of (rounded to the nearest
tenth) (x) the aggregate Percentage Interests being assigned and (y) 100. The transferor’s number of Total Votes shall be reduced by the number of Total Votes so transferred. The transferor and transferee shall, amongst themselves,
determine how to allocate the appointment of the Board Members allocated to such transferor’s Group, provided that such allocation shall be made in a manner so that all of the Total Votes may be represented at any meeting of the Management
Board. 

  

	(e)	Any transferee of all of the Membership Interest of a Member shall be entitled to all of the Total Votes of its transferor, and shall be entitled to appoint all Board
Member seats previously appointed by its transferor. 

  

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 9.2 Conditions Precedent to a Membership Interest Transfer. Each transferee of any
Membership Interest or portion thereof shall be subject to the terms hereof, and, as a condition precedent to the Company recognizing such Transfer or transfer pursuant to a Credit Facility Foreclosure, each transferor must satisfy all the
requirements set forth in Section 9.1 above and also meet the following conditions: 
  

	(a)	Each transferee shall agree in writing to be subject to each of the terms of this Agreement by executing and delivering an assumption agreement in favor of the other
Members in form reasonably acceptable to the transferee and the other Members. 

  

	(b)	Each transferee shall execute and deliver to the Company a secondment agreement in substantially the form attached hereto as Exhibit “A” (unless such
transferee or any Affiliate of such transferee is already party to a secondment agreement with the Company, or if such transferee and its Affiliates do not collectively possess a Percentage Interest greater than or equal to twenty five percent
(25%)), and a services agreement in substantially the form attached hereto as Exhibit “B”. 

  

	(c)	Except in the case of a Transfer involuntarily by operation of Law, the transferor and transferee shall execute and deliver to the Company such documents and
instruments of conveyance as may be reasonably necessary or appropriate to effect such Transfer or transfer pursuant to a Credit Facility Foreclosure. In the case of a Transfer involuntarily by operation of Law, such Transfer shall be confirmed by
presentation to the Company of legal evidence of such Transfer, in form and substance reasonably satisfactory to counsel to the Company. In all cases, the Company shall be reimbursed by the transferor and/or transferee for all reasonable costs and
expenses that it incurs in connection with such Transfer or transfer pursuant to a Credit Facility Foreclosure. 

  

	(d)	The transferor and transferee shall furnish the Company with the transferee’s taxpayer identification number, sufficient information to determine the
transferee’s initial tax basis in the Membership Interest or portion thereof transferred, and any other information reasonably necessary to permit the Company to file all required federal and state tax returns and other legally required
information statements or returns. Without limiting the generality of the foregoing, the Company shall not be required to make any distribution otherwise provided for in this Agreement with respect to any transferred Membership Interest until it has
received such information. 

  

	(e)	Unless otherwise agreed to by the Members, if a Member or any direct or indirect owner of a Member takes any action that causes the Company to be terminated within the
meaning of Section 708(b)(1)(B) of the Code, such Member shall indemnify and hold harmless the other Members for any deferral of depreciation deductions allocable to the other Members as a result of the Code Section 708(b)(1)(B)
termination, determined using an annual discount rate of ten percent (10%) and a deemed tax rate of forty percent (40%). 

  

	(f)	Such Transfer or transfer pursuant to a Credit Facility Foreclosure shall be exempt from all applicable registration requirements and such Transfer or transfer pursuant
to a Credit Facility Foreclosure may not violate any applicable Laws regulating the transfer of securities. 

  

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	(g)	Such Transfer or transfer pursuant to a Credit Facility Foreclosure will not cause the Company to be deemed to be an “investment company” under the Investment
Company Act of 1940. 

 9.3 Applicability of Joint Development Agreement. So long as the Joint Development
Agreement is in effect, the terms of Articles 7 and 8 of the Joint Development Agreement shall apply in lieu of Section 9.4 hereof. 

9.4 Right of First Refusal. 
  

	(a)	Once the final terms and conditions of a Transfer of Membership Interest (the “Offered Interests”) to an unrelated third party or the Change in Control
of a Member (in which event all of its Membership Interests will be deemed to be “Offered Interests”) have been fully negotiated and are binding on the parties thereto, the Transferring Member or Member subject to the Change in Control
(the “Transferring Member”) shall first offer the Offered Interests to the other Members (the “Non-transferring Members”) by written notice specifying the price and other terms and conditions of the offer and
accompanied by a copy of all instruments or relevant portions of instruments establishing such terms and conditions (that notice, an “Offer Notice”). 

 

	(b)	Upon receipt of an Offer Notice, each Non-transferring Member will have a period of sixty (60) days within which to accept the Transferring Member’s offer to
Transfer all the Offered Interests at the price and on the terms and conditions set forth in the Offer Notice. If the Non-Transferring Member elects to purchase the Offered Interests, it will deliver written notice thereof to the Transferring Member
within such sixty (60)-day period (that notice, the “Election Notice”). If each Non-transferring Member rejects the Offer Notice or fails to timely deliver an Election Notice, the Transferring Member will be free to Transfer the
Offered Interests to the unrelated third Person or undergo a Change in Control in exchange for consideration which is equal to or greater than the consideration set forth in the Offer Notice and on terms not materially more favorable to such Person
than the terms offered to the Non-transferring Member, each as set forth in the Offer Notice; provided, however that any such Transfer or Change in Control must close within one hundred and twenty (120) days from the date the Non-transferring
Member rejects the Offer Notice. If the Transfer or Change in Control is not closed with such period and the Transferring Member thereafter desires to proceed with such proposed Transfer or Change in Control, it shall be required to re-offer the
Offered Interests to the Non-transferring Members in accordance with this Section 9.4. If more than one Non-transferring Member counter-notifies that it intends to acquire the Transferring Member’s Membership Interest that is subject to
the proposed Transfer, then each such Member shall acquire a proportion of the Membership Interest equal to the ratio of its own Membership Interest to the total Membership Interests of all counter-notifying Members, unless the counter-notifying
Members otherwise agree. 

  

 61 

	(c)	In the event of a Transfer that is not for cash consideration or involves other properties as part of a wider transaction (package deal) or in the event of a Change in
Control, the Transferring Member shall include in its notification to the Non-transferring Members a statement of the proposed Cash Value of the Membership Interest or portion thereof subject to the proposed Transfer or Change in Control, and each
Non-transferring Member shall have a right to acquire such Membership Interest or portion thereof for the Cash Value, on the final terms and conditions negotiated with the acquiring Person that are relevant to the acquisition of a Membership
Interest or portion thereof for cash. No Non-transferring Member may acquire the Transferring Member’s Membership Interest or portion thereof pursuant to this Section 9.4 unless and until completion of any package deal or Change in Control
which includes the Offered Interests. If for any reason the package deal or Change in Control agreement terminates without completion, the Non-transferring Members’ rights to acquire the Membership Interest or portion thereof subject to the
proposed package deal or Change in Control shall also terminate. No Non-transferring Member shall have a right under this Section 9.4 to acquire any asset other than a Membership Interest or portion thereof, nor shall any Non-transferring
Member be required to acquire any asset other than a Membership Interest or portion thereof, regardless of whether other properties are subject to the Transfer or Change in Control. 

 

	(d)	For purposes of Section 9.4(c), the Cash Value proposed by the Transferring Member in its notice shall be conclusively deemed correct unless any Non-transferring
Member gives notice to the Transferring Member within thirty (30) days of receipt of the Transferring Member’s notice stating that it does not agree with the Transferring Member’s statement of the Cash Value, stating the Cash Value it
believes is correct, and providing any supporting information that it believes is helpful. In such event, the Members shall have fifteen (15) days in which to attempt to negotiate an agreement on the applicable Cash Value. If no agreement has
been reached by the end of such fifteen (15) day period, any Member shall be entitled to refer the matter to an independent expert as provided in Section 12.3 for determination of the Cash Value, provided that the Transferring Member may
elect to terminate the proposed Transfer or Change in Control, and any Non-transferring Member may elect to revoke its notice of intention to purchase, in either case by notice to the other Members at any time prior to the time that the independent
expert is retained pursuant to such provision. The Cash Value to be submitted to the independent expert by the Transferring Member shall be the Cash Value provided by such Transferring Member in the notice provided to the Non-transferring Members
pursuant to Section 9.4(c), and the Cash Value to be submitted to the independent expert by each Non-transferring Member shall be the Cash Value provided by such Non-transferring Member in the notice provided to the Transferring Member pursuant
to this Section 9.4(d). 

  

	(e)	The closing of the Transfer of the Offered Interests under this Section 9.3 will be held at any location agreed to by the Transferring Member and the
Non-transferring Member and on a mutually acceptable date not more than 90 days after the Non-transferring Member delivers the Election Notice. At any closing under this Section 9.3, in consideration of receipt of the purchase price in
immediately available funds, the Transferring Member shall Transfer to the Non-transferring Member all right, title and interest in and to the Offered Interests, free and clear of all Encumbrances, and, at the request of the Non-transferring Member,
shall execute all other documents and take such other actions as may be reasonably necessary or desirable to effectuate the Transfer of the Offered Interests and to carry out the purposes of this Agreement. 

 

 62 

	(f)	Notwithstanding anything herein to the contrary, any direct or indirect Change in Control of a Member (whether through merger, sale of shares or other equity interests,
or otherwise), through a single transaction or series of related transactions, from one or more transferors to one or more transferees, resulting from a Credit Facility Foreclosure pursuant to an Existing EXCO Credit Facility, shall not be subject
to any of the provisions of this Section 9.4. 

 9.5 Admission as a Member. Upon compliance with all
of the provisions of this Agreement regarding Transfers or transfers of Membership Interests pursuant to a Credit Facility Foreclosure, as applicable, (a) a transferee shall be deemed to be a Party hereto as if such transferee were the
transferor and such transferee’s signature appeared on the signature pages of this Agreement, and shall be deemed to be a Member and (b) to the extent the transferor no longer holds a Membership Interest, such transferor shall thereafter
cease to be a Member. 
 9.6 Encumbrances. Nothing contained in this Article 9 shall prevent a Member from Encumbering
all or any undivided share of its Membership Interest to a third party, provided that such Member shall remain liable for all obligations relating to such Membership Interest except as provided in Section 9.1(c). 

9.7 Recordation Tax. If any Transfer of a Membership Interest or portion thereof under this Article 9 results in the imposition of
a state or local transfer, recordation or similar tax on transfers of economic interests (or any similar tax), the Member whose Transfer triggers such imposition will be responsible for the payment of such tax. 

9.8 Resignation/Withdrawal. No Member may resign from or withdraw from the Company, other than by way of a Transfer (voluntary or
involuntary) of all of its Membership Interest in accordance with the terms hereof, a transfer pursuant to a Credit Facility Foreclosure in accordance with the terms hereof, or as a consequence of the dissolution and liquidation of the Company.

 ARTICLE 10 

DISSOLUTION AND TERMINATION 

10.1 Dissolution. The Company will be dissolved upon the occurrence of any of the following events (each, a “Dissolution
Event”): 
  

	(a)	by the affirmative vote of the Management Board pursuant to Section 2.2(f); 

 

	(b)	upon the sale or other final disposition by the Company of all or substantially all of its assets and the collection of all amounts derived from such sale or
disposition (including all amounts payable to the Company under any promissory notes or other evidences of indebtedness); 

  

	(c)	at any time there are no Members; 

  

 63 

	(d)	upon the entry of a decree of judicial dissolution of the Company pursuant to Section 802 of the Delaware Act. 

For the avoidance of doubt, the bankruptcy or dissolution of any Member or Affiliate of any Member or the occurrence of any other event that terminates
the continued membership of any Member shall not cause the Company to be dissolved or its affairs to be wound up, and upon the occurrence of any such event, the Company shall be continued without dissolution. 

10.2 Method of Liquidation. Upon the occurrence of a Dissolution Event, the Company shall liquidate its assets in a manner that is
consistent with avoiding undue loss and apply and distribute its assets in the following manner and in the following order of priority: 
  

	(a)	to the payment of the debts and liabilities of the Company (other than debts and liabilities of the Company addressed in paragraph (b) below, but including the
establishment of such reserves as the Members reasonably deem necessary to wind up the Company’s affairs and to provide for any contingent liabilities or obligations of the Company) and to the expenses of liquidation in the order of priority as
provided by Law; then 

  

	(b)	to the Members in accordance with Section 7.1. 

10.3 Distribution in Kind. Upon dissolution of the Company, any Company Property other than Oil and Gas Assets will be
preferentially sold or liquidated first to pay debts and liabilities described in Sections 10.2(a). If any Oil and Gas Assets remain to be distributed to the Members after satisfying the debts and liabilities described in Sections 10.2(a),
each Member shall receive a pro rata undivided share in each such Oil and Gas Asset, in proportion to its respective Percentage Interest, unless the Members determine by a vote pursuant to Section 2.2(y) to sell any or all of such Oil and Gas
Assets and distribute cash instead. 
 10.4 Continued Liability for Capital Contributions. The Management Board shall
continue to have the right and power after dissolution to require additional Capital Contributions pursuant to Section 2.2(z). 

10.5 Date of Dissolution. The Company will be terminated and dissolved when all of the Company’s assets have been applied and
distributed in accordance with the provisions of Section 10.2. As promptly as practicable after the winding up of the Company has been completed, the President and General Manager on behalf of the Company shall cause the Certificate to be
cancelled in accordance with the Delaware Act. 
 ARTICLE 11 

BOOKS; REPORTS TO MEMBERS; TAX MATTERS 

11.1 Books of Account; Records. 
  

	(a)	True and accurate books of account and operating records for the Company shall be maintained at the principal office of the Company or such other location or locations
as may be approved by the Management Board. Each Member will at all reasonable times have access to such books of account and operating records and will have the right, at such Member’s expense, to have such books of account audited by a firm
of independent accountants selected by such Member. 

  

 64 

	(b)	Except as required by Article 6, the Company’s books of account shall be maintained, and its income, gains, losses, expenses, contributions and distributions and
deductions shall be determined and accounted for in accordance with GAAP consistently applied. 

 11.2
Financial Statements and Reports. The Company shall prepare, and shall submit to the Members the following statements, reports and notices: 
  

	(a)	Annual financial statements of the Company, consisting of a profit and loss statement, a balance sheet, a statement of cash flows and a statement of changes in the
Members’ Capital Accounts, as of the end of and for the prior Fiscal Year, which shall be prepared in accordance with GAAP and audited by the Company’s independent certified public accountants, which shall be an internationally recognized
accounting firm (the “Annual Financial Statements”). The Annual Financial Statements for a Fiscal Year shall be delivered to each Member within ninety (90) days after the end of such Fiscal Year. 

 

	(b)	Unaudited quarterly financial statements of the Company, consisting of a profit and loss statement, a balance sheet, a statement of cash flows and a statement of
changes in the Members’ Capital Accounts, as of the end of and for the prior Calendar Quarter, which shall be prepared in accordance with GAAP, except for normal year end adjustments and the absence of footnotes (the “Quarterly
Financial Statements”). The Quarterly Financial Statements for a Calendar Quarter shall be delivered to each Member within sixty (60) days after the end of such Calendar Quarter. 

 

	(c)	Monthly financial reports, which shall consist of a profit and loss statement, a balance sheet, a statement of cash flows and a statement of changes in the
Members’ Capital Accounts, as of the end of and for the prior Calendar Month, which shall be prepared in accordance with GAAP, except for normal year end adjustments and the absence of footnotes (the “Monthly Financial
Reports”). The Monthly Financial Reports for a Calendar Month shall be delivered within fifteen (15) days after the end of such Calendar Month. 

 

	(d)	A monthly operating report containing a description of the Business during each Calendar Month (the “Monthly Operating Reports”). Each Monthly
Operating Report should contain information and narratives describing the applicable assets’ performance during the relevant Calendar Month, including drilling and completion reports, average production volumes, Hydrocarbon sales information
and any material Health, Safety, Security and Environmental incidents and such other information that may reasonably be required by any Member. The Monthly Operating Reports for a Calendar Month shall be delivered within fifteen (15) days
after the end of such Calendar Month. 

  

	(e)	Copies of all material information related to any pending or material threatened litigation or insurance claim affecting the Company. 

 

	(f)	Copies of all material filings, disclosures, or reports submitted to any Governmental Authority affecting the Company. 

 

 65 

	(g)	A quarterly report summarizing all outstanding claims related to any litigation, arbitration, administrative proceeding or other dispute and any settlement or result of
any litigation, arbitration, administrative proceeding or other dispute entered into or relating to the Company that occurred during the prior Calendar Quarter affecting the Company. 

 

	(h)	Such other information as a Member may reasonably request regarding the Company. 

11.3 Tax Treatment of the Company. It is the intent of the Members that the Company be treated as a partnership for U.S. federal
income tax purposes. Neither the Company nor any Member shall make an election to be excluded from the application of the provisions of subchapter K of chapter 1 of subtitle A of the Code or any similar provisions of applicable state Law or to be
classified as an association pursuant to Treasury Regulation Section 301.7701-3. 
 11.4 Tax Matters Member.
Pursuant to Section 6231(a)(7)(A) of the Code, the Members hereby designate EXCO Holding (PA), Inc. as the Company’s “tax matters partner” (the “Tax Matters Member”). The Tax Matters Member shall give prompt
written notice to each other Member of any and all notices it receives from the Internal Revenue Service concerning the Company. The Company shall reimburse the Tax Matters Member out of the Net Cash Flow for any expenses that the Tax Matters Member
incurs in connection with its obligations as Tax Matters Member. The Tax Matters Member shall not agree to extend the statute of limitations with respect to partnership items of the Company without the consent of the other Members. No Member shall
take any other action with respect to a partnership level audit item which would be binding on any other Member in computing its liability for taxes (or interest, penalties or additions to tax) without the consent of such other Member. The Tax
Matters Member may be removed by notice to the Company from any Member whose Affiliated Member Group holds a Percentage Interest that is not less than twenty five percent (25%) at any time that the Tax Matter Member’s Affiliated Member
Group holds a Percentage Interest that is less than twenty five percent (25%). 
 11.5 Tax Returns and Elections.

  

	(a)	The Tax Matters Member shall timely prepare, or cause to be prepared, at the expense of the Company, for each Allocation Year, federal, state and local tax returns
required to be filed with respect to the Company. Each Member shall furnish to the Company and the Tax Matters Member all pertinent information in its possession relating to the Company’s operations that is necessary to enable the tax returns
to be timely prepared and filed. Not less than sixty (60) days prior to the due date (as extended) of the federal income tax return or any state or local income tax return with respect to the Company, the return proposed by the Tax Matters
Member to be filed by the Company shall be furnished to the Members for review and approval. In addition, not more than ten (10) days after the date on which the Company files its federal income tax return or any state or local income tax
return, a copy of the return so filed shall be furnished to the Members. 

  

	(b)	 The Company, at its expense, shall cause to be delivered to each Member within the time period provided by applicable Law an Internal Revenue Service
Form K-1 or a good faith estimate of the amounts to be included on such Internal Revenue Service Form K-1 for such Member and such other information as shall be necessary for the preparation and

  

 66 

	 	
timely filing by the Members of their federal, state and local income and other tax returns. The Tax Matters Member shall deliver estimates at least 15 days prior to the due date for an estimated
tax payment required under Section 6655 of the Code for a U.S. corporation whose taxable year ends December 31; provided that all Members taking their share of production in kind shall have provided to the Tax Matters Member, at least
seven (7) Business Days prior to such 15 day period, the relevant revenue information relating to such production in kind for the period. 

  

	(c)	Upon request of the Management Board, the Tax Matters Member may make or revoke an election in accordance with Section 754 of the Code, so as to adjust the basis
of any Company Property in the case of a distribution of property, within the meaning of Section 734 of the Code, and in the case of a Transfer of Membership Interests, within the meaning of Section 743 of the Code.

 ARTICLE 12 

GOVERNING LAW; DISPUTE RESOLUTION 

12.1 Governing Law. THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE THAT MIGHT REFER CONSTRUCTION OF SUCH PROVISIONS TO THE LAWS OF ANOTHER JURISDICTION. ALL OF THE PARTIES HERETO CONSENT TO THE EXERCISE OF JURISDICTION IN
PERSONAM BY THE COURTS OF THE STATE OF TEXAS FOR ANY DISPUTE. EACH PARTY HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY DISPUTE. 

12.2 Dispute Resolution. 
  

	(a)	Except for matters that are expressly made subject to the dispute resolution procedures set forth in Section 12.3, any Dispute among the Parties shall be resolved
through final and binding arbitration. 

  

	(b)	The arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “AAA”) in effect at
the time the arbitration of the Dispute is initiated (the “AAA Rules”). 

  

	(c)	 The arbitration shall be conducted by three (3) arbitrators and conducted in Dallas, Texas. Within thirty (30) days of any Party providing
notice to the other Parties of a Dispute, if there are two Parties or two groups of Parties to a Dispute, each Party or group of Parties to such Dispute shall appoint one arbitrator, and the two (2) arbitrators so appointed shall select the
third and presiding arbitrator within thirty (30) days following appointment of the second Party-appointed arbitrator. If either Party or group of Parties fails to appoint an arbitrator within the permitted time period, then the missing
arbitrator(s) shall be selected by the AAA as appointing authority in accordance with the AAA Rules. In the event that there are more than two (2) Parties or groups of Parties to an arbitration, the Parties to the arbitration shall endeavor to
agree on the appointment of the three (3)

  

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arbitrators within thirty (30) days of the written request for arbitration. In the event the Parties cannot reach agreement on the selection of three (3) arbitrators within the time
permitted, all arbitrators not yet appointed shall be appointed by the AAA in accordance with the AAA Rules. Any arbitrator appointed by the Party-appointed arbitrators or the AAA shall be a member of the Large, Complex Commercial Case Panel of the
AAA or a member of the Center of Public Resources Panel of Distinguished Neutrals. All arbitrators shall be and remain at all times independent and impartial, and, once appointed, no arbitrator shall have any ex parte communications with any of the
Parties concerning the arbitration or the underlying Dispute other than communications directly concerning the selection of the presiding arbitrator, when applicable. All arbitrators shall be qualified by education, training, or experience to
resolve the Dispute. No arbitrator shall have been an employee or consultant to any Party or any of its Affiliates within the five (5) year period preceding the arbitration, or have any financial interest in the Dispute.

  

	(d)	All decisions of the arbitral tribunal shall be made by majority vote. The award of the arbitral tribunal shall be final and binding, subject only to grounds and
procedures for vacating or modifying the award under the Federal Arbitration Act. Judgment on the award may be entered and enforced by any court of competent jurisdiction hereunder. 

 

	(e)	Notwithstanding the agreement to arbitrate Disputes in this Section 12.2, any Party may apply to a court for interim measures pending appointment of the
arbitration tribunal, including injunction, attachment, and conservation orders. The Parties agree that seeking and obtaining such court-ordered interim measures shall not waive the right to arbitration. Additionally, the arbitrators (or in an
emergency the presiding arbitrator acting alone in the event one or more of the other arbitrators is unable to be involved in a timely fashion) may grant interim measures including injunctions, attachments, and conservation orders in appropriate
circumstances, which measures may be immediately enforced by court order. Hearings on requests for interim measures may be held in person, by telephone or video conference, or by other means that permit the Parties to present evidence and arguments.
The arbitrators may require any Party to provide appropriate security in connection with such measures. 

  

	(f)	The arbitral tribunal is authorized to award costs, attorneys’ fees, and expert witness fees and to allocate them among the Parties. The award may include
interest, at the Default Interest Rate, from the date of any default, breach, or other accrual of a claim until the arbitral award is paid in full. The arbitrators may not award indirect, consequential, special or punitive damages. Unless otherwise
directed by the arbitral tribunal, each Party shall pay its own expenses in connection with the arbitration. 

  

	(g)	 All negotiations, mediation, arbitration, and expert determinations relating to a Dispute (including a settlement resulting from negotiation or
mediation, an arbitral award, documents exchanged or produced during a mediation or arbitration proceeding, and memorials, briefs or other documents prepared for the arbitration) are confidential and may not be disclosed by the Parties, their
respective Affiliates and each of their respective employees, officers, directors, counsel, consultants, and expert witnesses, except to the extent necessary to enforce any settlement agreement, arbitration award, or expert

  

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determination, to enforce other rights of a Party, as required by law or regulation, or for a bona fide business purpose, such as disclosure to accountants, shareholders, or third-Party
purchasers, provided, however, that breach of this confidentiality provision shall not void any settlement, expert determination, or award. 

  

	(h)	Any papers, notices, or process necessary or proper for an arbitration hereunder, or any court action in connection with an arbitration or an award, may be served on a
Party in the manner set forth in Section 13.3. 

  

	(i)	If the subject matter of any Dispute among the Parties arises from facts or issues materially related to the subject matter of a Dispute (as defined in the Joint
Development Agreement) among the parties to the Joint Development Agreement, then the two proceedings shall be consolidated into a single arbitration proceeding pursuant to the terms of the Joint Development Agreement. 

12.3 Expert Proceedings. For any decision referred to an expert under this Agreement, the Parties hereby agree that such decision
shall be conducted expeditiously by an expert selected unanimously by the Members. The expert is not an arbitrator of the dispute and shall not be deemed to be acting in an arbitral capacity. The expert shall not (without the written consent of the
Members) be appointed to act as an arbitrator or as adviser to any Member in connection with any Dispute arbitrated pursuant to Section 12.2, provided that nothing in this sentence shall preclude any Member from using the expert as a witness
regarding the proper conduct of the expert procedure. The Member desiring an expert determination shall give the other Members written notice of the request for such determination. If the Members are unable to agree upon an expert within ten
(10) days after receipt of the written notice of request for an expert determination, then, upon the request of any of the Members, the AAA shall appoint such expert. The expert, once appointed, shall have no ex parte communications with the
Members concerning the expert determination or the underlying dispute. All communications between any Member and the expert shall be conducted in writing, with copies sent simultaneously to the other Members participating in the expert proceeding in
the same manner, or at a meeting to which representatives of all Members participating in the expert proceeding have been invited and of which such Members have been provided at least five (5) Business Days notice. Within thirty (30) days
after the expert’s acceptance of its appointment, each Member or Affiliated Member Group, as applicable, shall provide the expert with a report containing its proposal for the resolution of the matter and the reasons therefor, accompanied by
all relevant supporting information and data. Within sixty (60) days of receipt of the above-described materials and after receipt of additional information or data as may be required by the expert, the expert shall select the proposal which it
finds more consistent with the terms of this Agreement. The expert may not propose alternate positions or award damages, interest or penalties to any Members with respect to any matter. The expert’s decision shall be final and binding on the
Members. Any Member that fails or refuses to honor the decision of an expert shall be in default under this Agreement. 
  

 69 

 ARTICLE 13 

MISCELLANEOUS 

13.1 Investment Representation. Each Member represents and warrants to the Company and the other Member that in connection with
the purchase or other acquisition of such Member’s Membership Interest, such Member: (a) is financially able to bear all the risks of holding its Membership Interest for an indefinite period of time; (b) has sufficient knowledge and
experience in financial and business matters to be able to evaluate the merits and risks of, and otherwise make an informed investment decision with respect to, its Membership Interest; (c) understands that its Membership Interest has not been
registered under the 1933 Act or the securities Law of any jurisdiction in reliance upon its Membership Interest either not being a “security” under those Laws or its issuance being exempted from registration under those Laws; and
(d) has acquired its Membership Interest for that Member’s own account with the intention of holding it for investment and without any intention of participating directly or indirectly in any redistribution or resale of any portion of the
interest in violation of the 1933 Act or any other applicable Law. Each Member hereby further represents and warrants that its decision to invest in the Company is its decision alone and the other Member has no responsibility or liability whatsoever
on account of such investment decision or, except as set forth in this Agreement, any of the consequences thereof. 
 13.2
Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all of such counterparts shall constitute for all purposes one agreement. Any
signature hereto delivered by a Party by facsimile transmission shall be deemed an original signature hereto. 
 13.3
Notices. All notices and communications required or permitted to be given hereunder shall be sufficient in all respects if given in writing and delivered personally, or sent by bonded overnight courier, or mailed by U.S. Express Mail or by
certified or registered United States Mail with all postage fully prepaid, or sent by telex or facsimile transmission (provided any such telex or facsimile transmission is confirmed either orally or by written confirmation), addressed to the
appropriate Party at the address for such Party shown below or at such other address as such Party shall have theretofore designated by written notice delivered to the Party giving such notice: 

If to the Company: 

EXCO Resources (PA), LLC 

3000 Ericsson Dr., Suite 200 

Warrendale, Pennsylvania 15086 

	 	Attention:	 President and General Manager 

	 	Telephone:	 (724) 720-2500 

	 	Fax:	 (724) 720-2505 

  

 70 

 If to EXCO: 

EXCO Holding (PA), Inc. 

12377 Merit Drive, Suite 1700 

Dallas, Texas 75251 

	 	Attention:	 Harold Hickey, Vice President and 

Chief Operating Officer 

	 	Telephone:	 (214) 368-2084 

	 	Fax:	 (214) 368-8754 

 with
copies to: 
 EXCO Resources, Inc. 

12377 Merit Drive, Suite 1700 

Dallas, Texas 75251 

	 	Attention:	 William L. Boeing, Vice President, 

General Counsel, and Secretary 

	 	Telephone:	 (214) 368-2084 

	 	Fax:	 (214) 706-3409 

 and

 Vinson & Elkins L.L.P. 

2500 First City Tower 

1001 Fannin Street 

Houston, Texas 77002-6760 

	 	Attention:	 Roxanne T. Almaraz 

	 	Telephone:	 (713) 758-3621 

	 	Fax:	 (713) 615-5621 

 If to BG:

 BG US Production Company, LLC 

5444 Westheimer, Suite 1200 

Houston, Texas 77056 

	 	Attention:	 Jon Harris 

	 	Telephone:	 (713) 599-4000 

	 	Fax:	 (713) 599-4250 

 with
copies to: 
 BG US Production Company, LLC 

5444 Westheimer, Suite 1200 

Houston, Texas 77056 

	 	Attention:	 Bill Way 

	 	Telephone:	 (713) 599-4000 

	 	Fax:	 (713) 599-4250 

  

 71 

 and 

BG US Production Company, LLC 

5444 Westheimer, Suite 1200 

Houston, Texas 77056 

	 	Attention:	 Chris Migura, Principal Counsel 

	 	Telephone:	 (713) 599-4000 

	 	Fax:	 (713) 599-4250 

 Any notice given in
accordance herewith shall be deemed to have been given when delivered to the addressee in person, or by courier, or transmitted by facsimile transmission during normal business hours, or upon actual receipt by the addressee after such notice has
been deposited in the United States Mail, as the case may be. Any notice given to a Credit Facility Secured Party in accordance with the notice information supplied with respect to such Credit Facility Secured Party shall be deemed to have been
given when delivered to the addressee in person, or by courier, or transmitted by facsimile transmission during normal business hours, or upon actual receipt by the addressee after such notice has been deposited in the United States Mail, as the
case may be. The Parties may change the address, telephone numbers, and facsimile numbers to which such communications are to be addressed by giving written notice to the other Parties in the manner provided in this Section 13.3. 

13.4 Expenses. Except as otherwise specifically provided, all fees, costs and expenses incurred by the Parties in negotiating this
Agreement shall be paid by the Party incurring the same, including legal and accounting fees, costs and expenses. 
 13.5
Waivers; Rights Cumulative. Any of the terms, covenants, or conditions hereof may be waived only by a written instrument executed by or on behalf of the Party waiving compliance. No course of dealing on the part of any Party, or its
respective officers, employees, agents, or representatives, nor any failure by a Party to exercise any of its rights under this Agreement shall operate as a waiver thereof or affect in any way the right of such Party at a later time to enforce the
performance of such provision. No waiver by any Party of any condition, or any breach of any term or covenant contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such
condition or breach or a waiver of any other condition or of any breach of any other term or covenant. The rights of the Parties under this Agreement shall be cumulative, and the exercise or partial exercise of any such right shall not preclude the
exercise of any other right. 
 13.6 Entire Agreement; Conflicts. This Agreement, the Transfer Agreement, the Joint
Development Agreement and the Associated Agreements constitute the entire agreement among the Parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or
written, of the Parties pertaining to the subject matter of this Agreement. There are no warranties, representations, or other agreements among the Parties relating to the subject matter of this Agreement except as

  

 72 

 
specifically set forth in this Agreement, and no Party shall be bound by or liable for any alleged representation, promise, inducement, or statements of intention not so set forth. If there is a
conflict between the terms and provisions of this Agreement and the terms and provisions of the Certificates, the terms and provisions of this Agreement will control. 

13.7 Amendments. This Agreement may be amended or modified from time to time only by a written instrument executed by all of the
Members or as reasonably necessary to reflect a Transfer permitted under Article 9 or a transfer pursuant to a Credit Facility Foreclosure. 

13.8 Parties in Interest. Except for the rights provided in Article 8 to certain indemnified Persons, nothing in this Agreement
shall entitle any Person other than the Parties to any claim, cause of action, remedy or right of any kind. Any Dispute regarding the rights of any indemnified Person pursuant to Article 8 must be through arbitration pursuant to Section 12.2.

 13.9 Successors and Permitted Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties
and their successors and permitted assigns. 
 13.10 Confidentiality. 

 

	(a)	The Parties agree that all information related to the business of the Company shall be considered confidential, shall be kept confidential and shall not be disclosed
during the term of this Agreement to any Person that is not a Party, except: 

  

	 	(i)	to an Affiliate of a Member; 

  

	 	(ii)	to the extent such information is required to be furnished in compliance with applicable Law, or pursuant to any legal proceedings or because of any order of any
Governmental Authority binding upon a Party; 

  

	 	(iii)	to prospective or actual attorneys engaged by any Party where disclosure of such information is essential to such attorney’s work for such Party;

  

	 	(iv)	to prospective or actual contractors and consultants engaged by any Party where disclosure of such information is essential to such contractor’s or
consultant’s work for such Party; 

  

	 	(v)	to a bona fide prospective transferee of a Member’s Membership Interest to the extent appropriate in order to allow the assessment of such Membership Interest
(including a Person with whom a Member and/or its Affiliates are conducting bona fide negotiations directed toward a merger, consolidation or the sale of a majority of its or an Affiliate’s shares); 

 

	 	(vi)	to a bank or other financial institution to the extent appropriate to a Party arranging for funding; 

 

	 	(vii)	 to the extent such information must be disclosed pursuant to any rules or requirements of any stock exchange having jurisdiction over such Party or its
Affiliates; provided that if any Party desires to disclose information in 

  

 73 

	 	
an annual or periodic report to its or its Affiliates’ shareholders and to the public and such disclosure is not required pursuant to any rules or requirements of any stock exchange, then
such Party shall comply with Section 13.11; 

  

	 	(viii)	to its respective employees, subject to each Party taking customary precautions to ensure such information is kept confidential; and 

 

	 	(ix)	any information which, through no fault of a Party, becomes a part of the public domain. 

 

	(b)	Disclosure as pursuant to Sections 13.10(a)(iv), (v) and (vi) shall not be made unless prior to such disclosure the disclosing Party has obtained a written
undertaking from the recipient to keep the information strictly confidential for the term of this Agreement and to use the information for the sole purpose described in Sections 13.10(a)(iv), (v) and (vi), whichever is applicable, with respect
to the disclosing Party. 

 13.11 Publicity. 

 

	(a)	Without reasonable prior notice to the other Parties, no Member, nor the Company, will issue, or permit any agent or Affiliate of it to issue, any press releases or
otherwise make, or cause or permit any agent or Affiliate of it to make, any public statements with respect to this Agreement or the activities contemplated hereby, except where such release or statement is deemed in good faith by the releasing
Party to be required by Law or under the rules and regulations of a recognized stock exchange on which shares of such Party or any of its Affiliates are listed, and in any case, prior to making any such press release or public statement, the
releasing Party shall provide a copy of the press release or public statement to the other Parties. 

  

	(b)	Notwithstanding anything to the contrary in Section 13.10 or Section 13.11(a), any Member or Affiliate of a Member may disclose information regarding the
business of the Company in investor presentations, industry conference presentations or similar disclosures, provided that not less than twenty four (24) hours, or when reasonably practicable, forty eight (48) hours, exclusive of Saturdays
and Sundays, prior to so disclosing any such information, the releasing Member shall provide a copy of the presentation or other disclosure document containing such information to the other Parties. 

 

	(c)	Notwithstanding anything to the contrary in Section 13.10 or Section 13.11(a), in the event of any emergency endangering property, lives or the environment,
the Company may issue such press releases or public announcements as it deems necessary in light of the circumstances and shall promptly provide each Member with a copy of any such press release or announcement. 

13.12 Preparation of Agreement. All of the Company, the Members and their respective counsels participated in the preparation of
this Agreement. In the event of any ambiguity in this Agreement, no presumption shall arise based on the identity of the draftsman of this Agreement. 
  

 74 

 13.13 Conduct of the Parties; Business Principles. 

 

	(a)	The Company and each Member warrants that it and its Affiliates and its and their representatives have not made, offered, authorized or received, and agrees that it and
its Affiliates and its and their representatives will not make, offer, authorize or receive, with respect to the matters which are the subject of this Agreement, any payment, gift, promise or other advantage, whether directly or through any other
Person, to or for the use or benefit of any Person, including any public person (being any person holding a legislative, administrative or judicial office, including any person employed by or acting on behalf of a public agency, a public enterprise
or public international organization or any political party or political party official or candidate for office), where such payment, gift, promise or advantage would violate any applicable Law or, in the case of a public person, such payment, gift,
promise or advantage is made to influence the timing of routine governmental action which the public person is bound to perform, even if not a violation of applicable Law. 

 

	(b)	Prior to the date of this Agreement, each Member provided the others with a copy of its business principles governing its general conduct of operations and business
dealings, and each Member acknowledges receipt and awareness of the other Members’ business principles. The Members agree that the common set of business principles set forth on Schedule 13.13(a) shall govern the conduct of
operations and business dealings of the Company. 

 13.14 Severability. If any term or other provision of
this Agreement is invalid, illegal, or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any adverse manner to any Party. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible. 

13.15 Non-Compensatory Damages. None of the Parties shall be entitled to recover from any other Party, or such Party’s
respective Affiliates, any indirect, consequential, punitive or exemplary damages or damages for lost profits of any kind arising under or in connection with this Agreement or the transactions contemplated hereby, except to the extent any such Party
suffers such damages (including costs of defense and reasonable attorney’s fees incurred in connection with defending of such damages) to a third party, which damages (including costs of defense and reasonable attorney’s fees incurred in
connection with defending against such damages) shall not be excluded by this provision as to recovery hereunder. Subject to the preceding sentence, each Party, on behalf of itself and each of its Affiliates, waives any right to recover punitive,
special, exemplary and consequential damages, including damages for lost profits, arising in connection with or with respect to this Agreement or the transactions contemplated hereby. 

 

 75 

 13.16 Specific Performance; Injunctive Relief. The Company and the Members would be
damaged irreparably and would have no adequate remedy at Law if any provision of this Agreement is not performed in accordance with its specific terms. Accordingly, the Company and each Member is entitled to injunctive relief to prevent or remedy
breaches of this Agreement and to enforce specifically the terms and provisions hereof, without having to prove the inadequacy of any remedy that may be available at Law or being required to post bond or other security. 

13.17 No Company Seal. The Company will not have a seal, and no agreement, instrument or other document executed on behalf of the
Company that would otherwise be valid and binding on the Company will be invalid or non-binding on the Company solely because no seal is affixed to it. 

13.18 Interpretation. All references in this Agreement to Schedules, Articles, Sections, subsections and other subdivisions refer
to the corresponding Schedules, Articles, Sections, subsections and other subdivisions of or to this Agreement unless expressly provided otherwise. Titles appearing at the beginning of any Articles, Sections, subsections and other subdivisions of
this Agreement are for convenience only, do not constitute any part of this Agreement, and shall be disregarded in construing the language hereof. The words “this Agreement,” “herein,” “hereby,” “hereunder”
and “hereof,” and words of similar import, refer to this Agreement as a whole and not to any particular Article, Section, subsection or other subdivision unless expressly so limited. The words “this Article,” “this
Section,” and “this subsection,” and words of similar import, refer only to Article, Section or subsection hereof in which such words occur. The word “including” (in its various forms) means including without limitation. All
references to “$” or “dollars” shall be deemed references to United States dollars. Each accounting term not defined herein will have the meaning given to it under GAAP as interpreted as of the date of this Agreement. Pronouns in
masculine, feminine or neuter genders shall be construed to state and include any other gender, and words, terms and titles (including terms defined herein) in the singular form shall be construed to include the plural and vice versa, unless the
context otherwise requires. Appendices and Exhibits referred to herein are attached to and by this reference incorporated herein for all purposes. References to any Law or agreement shall mean such Law or agreement as it may be amended from time to
time. 
 13.19 Intellectual Property. 
  

	 	(a)	All intellectual property rights in Company Technology, including any patents and copyrights, shall be owned by the Company unless otherwise agreed by the Management
Board pursuant to Section 2.2(bb), and the Company shall have the exclusive right to license Company Technology to third Persons. 

  

	 	(b)	 Notwithstanding Section 13.19(a), each Member and its Affiliates shall have a royalty-free irrevocable, non-exclusive and non-transferable license
to use all Company Technology in its own operations (including joint venture projects in which such Member or its Affiliates have an ownership or equity interest) without the approval of the Company. Any Member or its Affiliates may disclose such
Company Technology to its or its Affiliates’ joint venturers in any joint venture project in which they participate, for purposes of that venture only, provided that 

 

 76 

	 	
each joint venturer to whom Company Technology is to be disclosed must first agree in writing to keep such Company Technology confidential in accordance with the standards set forth in
Section 13.10 and acknowledge in writing that such Company Technology is the property of the Company and may not be used by such joint venturer in any other project. 

13.20 Further Assurances. Each Member agrees to execute such further documents, instruments and other agreements as may be
reasonably requested by the other Members or as reasonably necessary to carry out and implement the intent of this Agreement. 

[The remainder of this page has been intentionally left blank.] 

 

 77 

 IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly authorized
representatives on and as of the date first written above. 
  

			
	COMPANY:
	
	EXCO RESOURCES (PA), LLC
		
	By:	 	 /s/ WILLIAM L. BOEING

	Name:	 	William L. Boeing
	Title:	 	Vice President and Secretary
	
	MEMBERS:
	
	EXCO HOLDING (PA), INC.
		
	By:	 	 /s/ WILLIAM L. BOEING

	Name:	 	William L. Boeing
	Title:	 	Vice President and Secretary
	
	BG US PRODUCTION COMPANY, LLC
		
	By:	 	 /s/ JON HARRIS

	Name:	 	Jon Harris
	Title:	 	Vice President

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