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Exhibit 10.7    
    

 
 

FIRST AMENDMENT TO THIRD
  AMENDED AND RESTATED CREDIT AGREEMENT    
    

        This FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (hereinafter referred to as the "Amendment")
executed as of the 31st day of March, 2004, by and among EXCO RESOURCES, INC., a Texas corporation (the "Company"), EXCO OPERATING, LP, a
Delaware limited partnership ("Operating"), NORTH COAST ENERGY, INC., a Delaware corporation ("North
Coast") and NORTH COAST ENERGY EASTERN, INC., a Delaware corporation ("North Coast Eastern"; together with the Company,
Operating and North Coast, the "Borrowers"), BANK ONE, NA, a national banking association ("Bank One"),
each of the financial institutions which is a party hereto (as evidenced by the signature pages to this Amendment) or which may from time to time become a party hereto pursuant to the provisions of
Section 28 of the Third Amended and Restated Credit Agreement or any successor or assignee thereof (hereinafter collectively referred to as
"Lenders", and individually, "Lender"), Bank One, as Administrative Agent
("Agent"), BNP PARIBAS, as Syndication Agent, THE BANK OF NOVA SCOTIA, as Co-Documentation Agent and TORONTO-DOMINION (TEXAS), as
Co-Documentation Agent. Capitalized terms used but not defined in this Amendment have the meanings assigned to such terms in that certain Third Amended and Restated Credit Agreement dated
as of January 27, 2004, by and among the Borrowers, Agent and the Lenders (as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"). 

WITNESSETH:  

        WHEREAS, the Borrowers have requested that the Agent and the Lenders amend the Credit Agreement to permit the
Borrowers to enter into additional Rate Management Transactions that, together with the Rate Management Transactions described on Schedule 9 to the Credit Agreement, as in effect on the date
hereof, are designed to hedge, provide a price floor for, or swap up to 47,200,000 mmbtu of crude oil and/or natural gas with a term expiring no later than December 31, 2013; and Agent and the
Lenders have agreed to do so on the terms and conditions hereinafter set forth. 

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

SECTION 1. Amendment to Credit Agreement.    Subject to the satisfaction or waiver in writing of each condition precedent set forth in  Section 3 hereof, and in reliance on the representations, warranties, covenants and agreements contained in this Amendment, the Credit Agreement
shall be amended in the manner provided in this Section 1. 

         1.1   Additional Definitions. The following definition shall be and it hereby is added in alphabetical order to  Section 1 of the Credit Agreement: 

 First Amendment Effective Date means March 31, 2004. 

        1.2   Amended Definitions. The following definitions in Section 1 of the Credit Agreement
shall
be and they hereby are amended in their entirety as follows: 

        North Coast Counterparty means, with respect to each North Coast Hedge, (i) each of the Persons identified as a counterparty
to a North Coast Hedge on the attached Schedule 9 and (ii) from and after the First Amendment Effective Date, any Approved Counterparty that is a Lender (for purposes of this definition,
as defined in the preamble hereof) or an Affiliate of any Lender on the date any Borrower enters into such North Coast Hedge with such Approved Counterparty regardless of whether such Approved
Counterparty or its Affiliate ceases to be a Lender thereafter. For the avoidance of doubt, no counterparty to any particular Rate Management Transaction of any Borrower shall be a "North Coast
Counterparty" unless  

 

 such counterparty is a Lender or an Affiliate of a Lender at the time such Borrower or Borrowers and such counterparty enter into such Rate Management Transaction.

        North Coast Hedge means (i) the Rate Management Transactions entered into by the Borrowers with a North Coast Counterparty
described on the attached Schedule 9 and (ii) from and after the First Amendment Effective Date, all other Rate Management Transactions entered into by any Borrower with a North Coast
Counterparty, that, together with all other such Rate Management Transactions then in effect (including the Rate Management Transactions described in clause (i) above), is designed to hedge,
provide a price floor for, or swap crude oil or natural gas or otherwise sell not more than 47,200,000 mmbtu of the aggregate anticipated production from proved, developed producing reserves of crude
oil and/or natural gas of North Coast; provided that such (x) Rate Management Transaction has a term expiring no later than December 31, 2013 and (y) with respect to any such Rate
Management Transaction entered into after the First Amendment Effective Date, Borrowers include such Rate Management Transaction on the list required under
Section 12(a)(vii) hereof for the first fiscal quarter ending after any Borrower enters into such Rate Management Transaction and thereafter. Any Rate Management
Transaction included on the list required under Section 12(a)(vii) shall be a "North Coast Hedge" and, unless otherwise terminated in accordance with its terms,
shall remain on such list unless otherwise removed by the Borrower with the prior written consent of the Agent, Required Lenders and the Lender or Lender Affiliate counterparty to such Rate Management
Transaction.

        1.3   Amended Affirmative Covenant.    Section 12(a) of the Credit
Agreement shall be
and it hereby is amended by deleting the "and" at the end of clause (iv), deleting the period at the end of clause (v), inserting a ";" at the end of clause (v), deleting the
period at the end of clause (vi), inserting "; and" at the end of clause (vi) and inserting the following clause at the end of such Section as  Section 12(a)(vii): 

        (vii) As
soon as available, and in any event within forty-five (45) days after the end of each fiscal quarter of each year, a list of all North Coast
Hedges then in effect and not otherwise described on Schedule "9" attached hereto. 

SECTION 2. Reaffirmation of Representations and Warranties.    Except to the extent its provisions are specifically amended, modified or
superseded by this Amendment, the representations, warranties and affirmative and negative covenants of the Company and its Subsidiaries contained in the Credit Agreement are incorporated herein by
reference for all purposes as if copied herein in full. The Borrowers hereby restate and reaffirm each and every term and provision of the Credit Agreement, as amended, including, without limitation,
all representations, warranties and affirmative and negative covenants. Except to the extent its provisions are specifically amended, modified or superseded by this Amendment, the Credit Agreement, as
amended, and all terms and provisions thereof shall remain in full force and effect, and the same in all respects are confirmed and approved by the Borrowers, Agent and the Lenders. 

SECTION 3. Conditions.    The amendment to the Credit Agreement contained in Section 1
of this Amendment shall be effective upon the satisfaction of each of the conditions set forth in this Section 3. 

        3.1   Execution and Delivery. The Borrowers shall have executed and delivered this Amendment, and other required documents, all in form and
substance
satisfactory to the Agent. 

         3.2   Amendment of Other Agreements. The Agent shall have received a fully-executed copy of the amendment to the Canadian Credit Agreement in
the form
attached hereto as Exhibit "A". 

         3.3   Representations and Warranties. The representations and warranties of the Borrowers under this Amendment are true and correct in all
material
respects as of such date, as if then made (except to the extent that such representations and warranties related solely to an earlier date). 

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         3.4   No Event of Default. No Event of Default shall have occurred and be continuing nor shall any event have occurred or failed to occur which,
 with
the passage of time or service of notice, or both, would constitute an Event of Default. 

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

         3.6   Legal Matters Satisfactory. All legal matters incident to the consummation of the transactions contemplated hereby shall be reasonably
satisfactory to special counsel for the Agent retained at the expense of the Borrowers. 

SECTION 4. Miscellaneous.

        4.1   Additional Representations and Warranties. The Borrowers hereby represent and warrant that all factual information, if any, heretofore and
contemporaneously furnished by or on behalf of the Borrowers to Agent for purposes of or in connection with this Amendment does not contain any untrue statement of a material fact or omit to state any
material fact necessary to keep the statements contained herein or therein from being misleading. Each of the foregoing representations and warranties shall constitute a representation and warranty of
the Borrowers made under the Credit Agreement, and it shall be an Event of Default if any such representation and warranty shall prove to have been incorrect or false in any material respect at the
time given. Each of the representations and warranties made under the Credit Agreement (including those made herein) shall survive and not be waived by the execution and delivery of this Amendment or
any investigation by Agent or the Lenders. 

         4.2   Indemnification. The Borrowers agree to indemnify and hold harmless Agent and the Lenders and their respective officers, employees,
agents,
attorneys and representatives (singularly, an "Indemnified Party", and collectively, the "Indemnified Parties") from and against any loss, cost, liability, damage or expense (including the reasonable
fees and out-of-pocket expenses of counsel to Agent or the Lenders, including all local counsel hired by such counsel) ("Claim")
incurred by Agent or the Lenders in investigating or preparing for, defending against, or providing evidence, producing documents or taking any other action in respect of any commenced or threatened
litigation, administrative proceeding or investigation under any federal securities law, federal or state environmental law, or any other statute of any jurisdiction, or any regulation, or at common
law or otherwise, which is alleged to arise out of or is based upon any acts, practices or omissions or alleged acts, practices or omissions of the Borrowers or their agents or arises in connection
with the duties, obligations or performance of the Indemnified Parties in negotiating, preparing, executing, accepting, keeping, completing, countersigning, issuing, selling, delivering, releasing,
assigning, handling, certifying, processing or receiving or taking any other action with respect to the Loan Documents and all documents, items and materials contemplated thereby even if any of the
foregoing arises out of an Indemnified Party's ordinary negligence. The indemnity set forth herein shall be in addition to any other obligations or liabilities of the Borrowers to the Lenders
hereunder or at common law or otherwise, and shall survive any termination of this Amendment, the expiration of the Loan and the payment of all indebtedness of the Borrowers to the Lenders hereunder
and under the Notes, provided that the Borrowers shall not have any obligation under this section to the Lenders with respect to any of the foregoing arising out of the gross negligence or willful
misconduct of the Lenders. If any Claim is asserted against any Indemnified Party, the Indemnified Party shall endeavor to notify the Borrowers of such Claim (but failure to do so shall not affect the
indemnification herein made except to the extent of the actual harm caused by such failure). The Indemnified Party shall have the right to employ, at the Borrowers' expense, counsel of the Indemnified
Parties' choosing and to control the defense of the Claim. The Borrowers may at their own expense also participate in the defense of any Claim. Each Indemnified Party may employ separate counsel in
connection with any Claim to the extent such Indemnified Party believes it reasonably prudent to protect such Indemnified Party. The parties intend for the provisions of this
Section to apply to and protect each Indemnified Party from  

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 the consequences of strict liability imposed or threatened to be imposed on any Indemnified Party as well as from the consequences of its own negligence, whether or not that negligence is the sole,
contributing, or concurring cause of any Claim, but not from any portion of such Claim arising from the gross negligence or willful misconduct of any Indemnified
Party.

         4.3   Counterparts. This Amendment may be executed in one or more counterparts and by different parties hereto in separate counterparts each of
which
when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. However, this Amendment shall bind no party until the Borrowers, Agent and
Lenders have executed a counterpart. Facsimiles shall be effective as originals. 

         4.4   WRITTEN CREDIT AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED, REPRESENTS THE FINAL AGREEMENT BETWEEN AND AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN AND AMONG THE PARTIES. 

        4.5   No Impairment. The Borrowers acknowledge and agree that the renewal, extension and amendment of the Credit Agreement shall not be
considered a
novation of account or new contract but that all existing rights, titles, powers, and estates in favor of the Agent and the Lenders constitute valid and existing obligations in favor of Agent and the
Lenders. The Borrowers confirm and agree that (a) neither the execution of this Amendment nor any other Loan Document nor the consummation of the transactions described herein and therein shall
in any way effect, impair or limit the covenants, liabilities, obligations and duties of the Borrowers under the Loan Documents and (b) the obligations evidenced and secured by the Loan
Documents continue in full force and effect. 

[Signature Pages Follow]

4

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

	 	 	BORROWERS:
	

 	
 	
EXCO RESOURCES, INC.

a Texas corporation
	

 	
 	

By:	

/s/  J. DOUGLAS RAMSEY      

	 	 	Name:	J. Douglas Ramsey
	 	 	Title:	Vice President and Chief Financial Officer
	

 	
 	
EXCO OPERATING, LP

a Delaware limited partnership
	

 	
 	

By:	

EXCO Investment II, LLC,

its sole general partner
	

 	
 	

 	

By:	

EXCO Resources, Inc.,

its sole member
	

 	
 	

 	

By:	

/s/  J. DOUGLAS RAMSEY      

	 	 	 	Name:	J. Douglas Ramsey
	 	 	 	Title:	Vice President and

Chief Financial Officer
	

 	
 	
NORTH COAST ENERGY, INC.

a Delaware corporation
	

 	
 	

By:	

/s/  J. DOUGLAS RAMSEY      

	 	 	Name:	J. Douglas Ramsey
	 	 	Title:	Vice President
	

 	
 	
NORTH COAST ENERGY EASTERN, INC.

a Delaware corporation
	

 	
 	

By:	

/s/  J. DOUGLAS RAMSEY      

	 	 	Name:	J. Douglas Ramsey
	 	 	Title:	Vice President

	 	 	LENDERS:
	

 	
 	
BANK ONE, NA

a national banking association

(Main Office Chicago)

as a Lender and as Administrative Agent
	

 	
 	

By:	

/s/  THOMAS E. BOTH      

	 	 	Name:	Thomas E. Both
	 	 	Title:	Director, Capital Markets

	 	 	BNP PARIBAS

as a Lender and as Syndication Agent
	

 	
 	

By:	

/s/  DAVID DODD      

	 	 	Name:	David Dodd

	 	 	Title:	Director

	

 	
 	

By:	

/s/  POLLY SCHOTT      

	 	 	Name:	Polly Schott

	 	 	Title:	Vice President

	 	 	THE BANK OF NOVA SCOTIA

as a Lender and as a Co-Documentation Agent
	

 	
 	

By:	

  

	 	 	Name:	  

	 	 	Title:	  

	 	 	COMERICA BANK

as a Lender
	

 	
 	

By:	

/s/  MICHELE L. JONES      

	 	 	Name:	Michele L. Jones

	 	 	Title:	Vice President—Texas Division

	 	 	FLEET NATIONAL BANK

as a Lender
	

 	
 	

By:	

/s/  JEFFREY H. RATHKAMP      

	 	 	Name:	Jeffrey H. Rathkamp

	 	 	Title:	Director

	 	 	JPMORGAN CHASE BANK

as a Lender
	

 	
 	

By:	

/s/  RUSSELL A. JOHNSON      

	 	 	Name:	Russell A. Johnson

	 	 	Title:	Vice President

	 	 	TORONTO-DOMINION (TEXAS), INC.

as a Lender and as a Co-Documentation Agent
	

 	
 	

By:	

/s/  JANO NIXON      

	 	 	Name:	Jano Nixon

	 	 	Title:	Vice President

	 	 	UNION BANK OF CALIFORNIA, N.A.

as a Lender
	

 	
 	

By:	

/s/  KIMBERLY COIL      

	 	 	Name:	Kimberly Coil

	 	 	Title:	Assistant Vice President

	

 	
 	

By:	

/s/  RANDALL OSTERBERG      

	 	 	Name:	Randall Osterberg

	 	 	Title:	Senior Vice President

	 	 	CREDIT SUISSE FIRST BOSTON

acting through its Cayman Island branch

as a Lender
	

 	
 	

By:	

  

	 	 	Name:	  

	 	 	Title:	  

	

 	
 	

By:	

  

	 	 	Name:	  

	 	 	Title:	  

	 	 	BANK OF AMERICA N.A.

as a Lender
	

 	
 	

By:	

/s/  TIMOTHY R. LEACH      

	 	 	Name:	Timothy R. Leach

	 	 	Title:	Senior Vice President

EXHIBIT
A 

FIRST
AMENDMENT TO CANADIAN CREDIT AGREEMENT 

(attached)

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Exhibit 10.7

FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENTQuickLinks
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Exhibit 10.8    
    

 
 

SECOND AMENDMENT TO THIRD
  AMENDED AND RESTATED CREDIT AGREEMENT
  AND
  CONSENT TO ISSUANCE OF ADDITIONAL SENIOR NOTES    
    

        THIS SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND CONSENT TO ISSUANCE OF ADDITIONAL SENIOR NOTES (hereinafter referred to as this
"Second Amendment") executed as of the 31st day of March, 2004, by and among EXCO RESOURCES, INC., a Texas corporation (the
"Company"), EXCO OPERATING, LP, a Delaware limited partnership ("Operating"), NORTH COAST
ENERGY, INC., a Delaware corporation ("North Coast") and NORTH COAST ENERGY EASTERN, INC., a Delaware corporation
("North Coast Eastern"; together with the Company, Operating and North Coast, the "Borrowers"), BANK
ONE, NA, a national banking association ("Bank One"), each of the financial institutions which is a party hereto (as evidenced by the signature pages to
this Second Amendment) or which may from time to time become a party hereto pursuant to the provisions of Section 28 of the Credit Agreement
(hereinafter defined) or any successor or assignee thereof (hereinafter collectively referred to as "Lenders", and individually,
"Lender"), Bank One, as Administrative Agent ("Agent"), BNP PARIBAS, as Syndication Agent, THE BANK OF
NOVA SCOTIA, as Co-Documentation Agent and TORONTO-DOMINION (TEXAS), as Co-Documentation Agent. 

WITNESSETH:  

        WHEREAS, the Borrowers, the Agent and the Lenders are parties to that certain Third Amended and Restated Credit
Agreement dated as of January 27, 2004, as amended by that certain First Amendment to Third Amended and Restated Credit Agreement dated as of March 31, 2004 (as so amended, and as the
same may be hereafter amended, supplemented or otherwise modified from time to time, the "Credit Agreement"). 

        WHEREAS, the Borrowers have requested that the Agent and the Lenders (a) consent to the issuance by the Company of an additional
$100,000,000 in aggregate principal amount of its 71/4% Senior Notes Due 2011 (the "New Notes") under, and pursuant to the provisions of  Section 2.13 of, the Indenture, and (b) in connection therewith, amend the Credit Agreement to permit the Company to issue the New
Notes under, and pursuant to the provisions of Section 2.13 of, the Indenture, and the Agent and the Lenders have agreed to do so upon and
subject to the terms and conditions hereinafter set forth. 

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

SECTION 1. Definitions and Defined Terms.

        1.1   Each capitalized term used but not defined in this Second Amendment have the meanings assigned to such term in the Credit Agreement.

         1.2   As used in this Second Amendment, the following terms shall have the respective meanings set forth, or to which reference is made, below:

        1.2.1    Additional Securities has the meaning ascribed to such term in the Indenture. 

        1.2.2    Canadian Credit Agreement Amendment and Consent means an agreement in form and substance
comparable to this Agreement (a) effecting an amendment to Section 13(g)(ix) of the Canadian Credit Agreement identical to the amendment  Section 13(g)(viii)
 of the Credit Agreement effected by Section 2.2 of this Amendment, and
(b) evidencing a consent of the requisite lenders under the Canadian Credit Agreement identical to the consent set forth in Section 3 of
this Amendment. 

 

        1.2.3    Consolidated Coverage Ratio has the meaning ascribed to such term in the Indenture. 

        1.2.4    Incur has the meaning ascribed to such term in the Indenture. 

        1.2.5    Incurrence has the meaning ascribed to such term in the Indenture. 

        1.2.6    Indebtedness has the meaning ascribed to such term in the Indenture. 

        1.2.7    Net Cash Proceeds has the meaning ascribed to such term in the Indenture. 

        1.2.8    Officers' Certificate has the meaning ascribed to such term in the Indenture. 

        1.2.9    Opinion of Counsel has the meaning ascribed to such term in the Indenture. 

SECTION 2. Amendment to Credit Agreement.    Subject to the satisfaction or waiver in writing of each condition precedent set forth in  Section 7 hereof, and in reliance on the representations, warranties, covenants and agreements contained in this Second Amendment, the Credit
Agreement shall be amended in the manner provided in this Section 2. 

         2.1   Amendment to Definition. The definition of the term "Canadian Credit Agreement" set forth in  Section 1 of the Credit Agreement shall be and it hereby is amended in its entirety to read as follows: 

        Canadian Credit Agreement means that certain Third Amended and Restated Credit Agreement between Addison and Bank One, NA, Canada
Branch, as Administrative Agent for itself and the lenders named therein dated as of January 27, 2004 pursuant to which the lenders therein agree to make a C$250,000,000 Canadian revolving loan
available to Addison, as it may be amended, modified, supplemented or restated from time to time.

         2.2   Amendment to Negative Covenant. Section 13(g)(viii) of the Credit Agreement shall be and it hereby is
amended in
its entirety to read as follows: 

        (viii)    the Senior Notes, provided the aggregate principal amount of such indebtedness does not exceed $450,000,000; or

SECTION 3. Consent to Issuance of New Notes.    Subject to the satisfaction or waiver in writing of each condition precedent set forth in  Section 7 hereof, and in reliance on the representations, warranties, covenants and agreements contained in this Second Amendment, the Agent and
the Lenders hereby
consent to (a) the issuance by the Company of the New Notes under, and pursuant to the provisions of Section 2.13 of, the Indenture,
(b) the amendment, modification or supplement to the Senior Note Documents for the sole purpose of reflecting the issuance of the New Notes if, after giving effect to each such amendment,
modification or supplement (i) the maximum principal amount of the Senior Notes outstanding under the Indenture shall not be increased to an amount in excess of $450,000,000, (ii) except
as provided in clause (i) preceding, the Borrowers are in compliance with the provisions of Section
13(p) of the Credit Agreement, (iii) the New Notes constitute Additional Securities permitted to be issued and be outstanding under the Indenture, and (iv) the
New Notes constitute "Notes," as that term is defined in the Senior Notes Intercreditor Agreement. 

SECTION 4. Unscheduled Redetermination of Borrowing Base.    Borrowers acknowledge and agree that the issuance of the New Notes constitutes an
event authorizing the Lenders to require an Unscheduled Redetermination of the Borrowing Base. Borrowers further waive compliance by the Agent and the Lenders with the provisions of  Section 7(b) of
the Credit Agreement insofar as the same pertain to the Unscheduled Redetermination of the Borrowing Base occasioned by the
issuance of the New Notes and agree that, effective as of the date of issuance of the New Notes and continuing until, but not including, the next-occurring Determination Date under the
Credit Agreement, the Borrowing Base shall be $95,000,000. 

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SECTION 5. Reaffirmation of Representations and Warranties.    Except to the extent its provisions are specifically amended, modified or
superseded by this Second Amendment, the representations, warranties and affirmative and negative covenants of the Company and its Subsidiaries contained in the Credit Agreement are incorporated
herein by reference for all purposes as if copied herein in full. The Borrowers hereby restate and reaffirm each and every term and provision of the Credit Agreement, as amended, including, without
limitation, all representations, warranties and affirmative and negative covenants. Except to the extent its provisions are specifically amended, modified or superseded by this Second Amendment, the
Credit Agreement, as amended, and all terms and provisions thereof shall remain in full force and effect, and the same in all respects are confirmed and approved by the Borrowers, the Agent and the
Lenders. 

SECTION 6. Additional Representations and Warranties.    In order to induce the Agent and the Lenders to enter into this Second Amendment,
each Borrower represents and warrants to the Agent and to each of the Lenders that: 

        6.1   Factual Information. All factual information heretofore or contemporaneously furnished by or on behalf of the Borrowers to Agent for
purposes of
or in connection with this Second Amendment does not contain any untrue statement of a material fact or omit to state any material fact necessary to keep the statements contained herein or therein
from being misleading. 

         6.2   Conforming Additional Securities. The New Notes constitute and conform to the requirements of Additional Securities for all purposes
under the
Indenture. 

        6.3   Consolidated Coverage Ratio. On the date hereof, and after giving effect to the issuance of the New Notes on a pro
forma basis, the Consolidated Coverage Ratio exceeds 2.5 to 1. 

Each
of the foregoing representations and warranties shall constitute a representation and warranty of the Borrowers made under the Credit Agreement, and it shall be an Event of Default if any such
representation and warranty shall prove to have been incorrect or false in any material respect at the time given. Each of the representations and warranties made under the Credit Agreement (including
those made herein) shall survive and not be waived by the execution and delivery of this Second Amendment or any investigation by the Agent or the Lenders. 

SECTION 7. Conditions.    The amendments to the Credit Agreement contained in Section 2
of this Second Amendment and the consents contained in Section 3 of this Second Amendment shall be effective upon the satisfaction of each of the
conditions set forth in this Section 6. 

         7.1   Execution and Delivery by Borrowers. The Borrowers shall have executed and delivered this Second Amendment, and other required documents,
all in
form and substance satisfactory to the Agent. 

        7.2   Execution and Delivery by Majority Lenders. This Second Amendment shall have been executed by Majority Lenders, and the Agent shall have
received
counterparts, in form and substance satisfactory to the Agent, evidencing such execution by Majority Lenders. 

         7.3   Amendment of Canadian Credit Agreement. The Agent shall have received a fully-executed copy of the Canadian Credit Agreement Amendment
and
Consent. 

        7.4   Representations and Warranties. The representations and warranties of the Borrowers under this Second Amendment are true and correct in
all
material respects as of the date of issuance of the New Notes, as if then made (except to the extent that such representations and warranties related solely to an earlier date). 

         7.5   No Event of Default. On the date of issuance of the New Notes, both before such issuance is effected and after giving effect to such
issuance, no
Event of Default shall have occurred and be 

3

 

continuing
nor shall any event have occurred or failed to occur which, with the passage of time or service of notice, or both, would constitute an Event of Default. 

         7.6   Consummation of New Notes Issuance The Trustee shall have authenticated the New Notes in accordance with the provisions of the Indenture,
and the
Company shall have consummated the issuance of the New Notes and have received gross proceeds of at least $100,000,000 from the issuance of the New Notes; 

        7.7   Reduction of Canadian Credit Agreement Indebtedness. The Borrowers shall have provided Agent with evidence reasonably acceptable to Agent
that
the principal amount of the indebtedness outstanding under the Canadian Credit Agreement on the date of issuance of the Senior Notes has been, or contemporaneously with the issuance of the Senior
Notes will be reduced by payment from the Net Cash Proceeds derived from the issuance of the Senior Notes in the amount equal to the lesser of (a) the full amount of the Net Cash Proceeds
derived from the issuance of the Senior Notes and (b) the amount by which the principal amount of the indebtedness outstanding under the Canadian Credit Agreement on the date of issuance of the
Senior Notes exceeds C$1,000.00. 

        7.8   Senior Loan Documents. The Borrowers shall have provided to the Agent copies of (a) any prospectus, offering memorandum or similar
document (and all amendments and supplements thereto) furnished by the Company prior to the issuance of the New Notes to prospective purchasers of the New Notes, and (b) all documents executed
by the Company and delivered to the Trustee in connection with the issuance of the New Notes, including, without limitation, each document effecting an amendment, modification or supplement to any
Senior Note Document. 

        7.9   Officers' Certificates. The Borrowers shall have provided to the Agent (a) a copy of the Officers' Certificate delivered to the
Trustee by
the Company pursuant to Section 2.13 of the Indenture, certified as being true, correct and complete by the Persons who executed such Officers'
Certificate and accompanied by a written authorization from the Persons who executed such Officers' Certificate stating that Agent and the Lenders may rely on such Officers' Certificate as though it
were addressed to them, and (b) a copy of each other Officers' Certificate, if any, delivered to the Trustee by the Company pursuant to  Section 14.04(1) of the Indenture in connection with the
authentication and issuance of the New Notes, in each case certified as being true,
correct and complete by the Persons who executed such Officers' Certificate and accompanied by a written authorization from the Person who executed such Officers' Certificate stating that Agent and
the Lenders may rely on such Officers' Certificate as though it were addressed to them. 

         7.10 Opinions of Counsel. The Borrowers shall have provided to the Agent (a) a copy of the Opinion of Counsel delivered to the Trustee by the
Company pursuant to Section 2.13 of the Indenture, accompanied by a written authorization from the Person who executed such Opinion of Counsel
stating that Agent and the Lenders may rely on such Opinion of Counsel as though it were addressed to them, and (b) a copy of each other Opinion of Counsel, if any, delivered to the Trustee by
the Company pursuant to Section 14.04(2) of the Indenture in connection with the authentication and issuance of the New Notes, in each case
accompanied by a written authorization from the Person who executed such Opinion of Counsel stating that Agent and the Lenders may rely on such Opinion of Counsel as though it were addressed to them. 

        7.11 Confirmation of Trustee. The Agent shall have received a written confirmation of the Trustee, addressed to the Credit Agent (as that term is
defined in the Senior Notes Intercreditor Agreement), confirming that the New Notes are included in the "Notes," as that term is defined in the Senior Notes Intercreditor Agreement. 

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

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         7.13 Legal Matters Satisfactory. All legal matters incident to the consummation of the transactions contemplated hereby shall be reasonably
satisfactory to special counsel for the Agent retained at the expense of the Borrowers. 

SECTION 8.    Miscellaneous.

        8.1   Indemnification. The Borrowers agree to indemnify and hold harmless Agent and the Lenders and their respective officers, employees, agents,

attorneys and representatives (singularly, an "Indemnified Party", and collectively, the "Indemnified Parties") from and against any loss, cost, liability, damage or expense (including the reasonable
fees and out-of-pocket expenses of counsel to Agent or the Lenders, including all local counsel hired by such counsel) ("Claim")
incurred by Agent or the Lenders in investigating or preparing for, defending against, or providing evidence, producing documents or taking any other action in respect of any commenced or threatened
litigation, administrative proceeding or investigation under any federal securities law, federal or state environmental law, or any other statute of any jurisdiction, or any regulation, or at common
law or otherwise, which is alleged to arise out of or is based upon any acts, practices or omissions or alleged acts, practices or omissions of the Borrowers or their agents or arises in connection
with the duties, obligations or performance of the Indemnified Parties in negotiating, preparing, executing, accepting, keeping, completing, countersigning, issuing, selling, delivering, releasing,
assigning, handling, certifying, processing or receiving or taking any other action with respect to the Loan Documents and all documents, items and materials contemplated thereby even if any of the
foregoing arises out of an Indemnified Party's ordinary negligence. The indemnity set forth herein shall be in addition to any other obligations or liabilities of the Borrowers to the Lenders
hereunder or at common law or otherwise, and shall survive any termination of this Second Amendment, the expiration of the Loan and the payment of all indebtedness of the Borrowers to the Lenders
hereunder and under the Notes, provided that the Borrowers shall not have any obligation under this Section 8.1 to the Lenders with respect to
any of the foregoing arising out of the gross negligence or willful misconduct of the Lenders. If any Claim is asserted against any Indemnified Party, the Indemnified Party shall endeavor to notify
the Borrowers of such Claim (but failure to do so shall not affect the indemnification herein made except to the extent of the actual harm caused by such failure). The Indemnified Party shall have the
right to employ, at the Borrowers' expense, counsel of the Indemnified Parties' choosing and to control the defense of the Claim. The Borrowers may at their own expense also participate in the defense
of any Claim. Each Indemnified Party may employ separate counsel in connection with any Claim to the extent such Indemnified Party believes it reasonably prudent to protect such Indemnified Party.  The parties intend for the
provisions of this Section 8.1 to apply to and protect each Indemnified Party from the
consequences of strict liability imposed or threatened to be imposed on any Indemnified Party as well as from the consequences of its own negligence, whether or not that negligence is the sole,
contributing, or concurring cause of any Claim, but not from any portion of such Claim arising from the gross negligence or willful misconduct of any Indemnified
Party.

        8.2   Counterparts. This Second Amendment may be executed in one or more counterparts and by different parties hereto in separate counterparts
each of
which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. However, this Second Amendment shall bind no party until the
Borrowers, the Agent and Majority Lenders have executed a counterpart. Facsimiles shall be effective as originals. 

        8.3   WRITTEN CREDIT AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN AND AMONG
THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN AND AMONG THE PARTIES. 

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        8.4   No Impairment. The Borrowers confirm and agree that (a) neither the execution of this Second Amendment nor any other Loan Document
nor the
consummation of the transactions described herein and therein shall in any way effect, impair or limit the covenants, liabilities, obligations and duties of the Borrowers under the Loan Documents and
(b) the obligations evidenced and secured by the Loan Documents continue in full force and effect. 

[Signature Pages Follow]

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

	 	 	BORROWERS:
	

 	
 	
EXCO RESOURCES, INC.

a Texas corporation
	

 	
 	

By:	

/s/  J. DOUGLAS RAMSEY      

	 	 	Name:	J. Douglas Ramsey

	 	 	Title:	Vice President and Chief Financial Officer

	

 	
 	
EXCO OPERATING, LP

a Delaware limited partnership
	

 	
 	

By:	
EXCO Investment II, LLC,

its sole general partner
	

 	
 	

 	

By:	

EXCO Resources, Inc.,

its sole member
	

 	
 	

 	

By:	

/s/  J. DOUGLAS RAMSEY      

	 	 	 	Name:	J. Douglas Ramsey
	 	 	 	Title:	Vice President and

Chief Financial Officer
	

 	
 	
NORTH COAST ENERGY, INC.

a Delaware corporation
	

 	
 	

By:	

/s/  J. DOUGLAS RAMSEY      

	 	 	Name:	J. Douglas Ramsey
	 	 	Title:	Vice President
	

 	
 	
NORTH COAST ENERGY EASTERN, INC.

a Delaware corporation
	

 	
 	

By:	

/s/  J. DOUGLAS RAMSEY      

	 	 	Name:	J. Douglas Ramsey
	 	 	Title:	Vice President

	 	 	LENDERS:
	

 	
 	
BANK ONE, NA

a national banking association

(Main Office Chicago)

as a Lender and as Administrative Agent
	

 	
 	

By:	

/s/  WM. MARK CRANMER      

	 	 	Name:	Wm. Mark Cranmer
	 	 	Title:	Director, Capital Markets

	 	 	BNP PARIBAS

as a Lender and as Syndication Agent
	

 	
 	

By:	

/s/  DAVID DODD      

	 	 	Name:	David Dodd

	 	 	Title:	Director

	

 	
 	

By:	

/s/  POLLY SCHOTT      

	 	 	Name:	Polly Schott

	 	 	Title:	Vice President

	 	 	THE BANK OF NOVA SCOTIA

as a Lender and as a Co-Documentation Agent
	

 	
 	

By:	

/s/  NADINE BELL      

	 	 	Name:	Nadine Bell

	 	 	Title:	Senior Manager

	 	 	COMERICA BANK

as a Lender
	

 	
 	

By:	

/s/  MICHELE L. JONES      

	 	 	Name:	Michele L. Jones

	 	 	Title:	Vice President—Texas Division

	 	 	FLEET NATIONAL BANK

as a Lender
	

 	
 	

By:	

/s/  JEFFREY H. RATHKAMP      

	 	 	Name:	Jeffrey H. Rathkamp

	 	 	Title:	Director

	 	 	JPMORGAN CHASE BANK

as a Lender
	

 	
 	

By:	

/s/  ROBERT C. MERTENSOTTO      

	 	 	Name:	Robert C. Mertensotto

	 	 	Title:	Managing Director

	 	 	TORONTO-DOMINION (TEXAS), INC.

as a Lender and as a Co-Documentation Agent
	

 	
 	

By:	

/s/  JIM BRIDWELL      

	 	 	Name:	Jim Bridwell

	 	 	Title:	Vice President

	 	 	UNION BANK OF CALIFORNIA, N.A.

as a Lender
	

 	
 	

By:	

/s/  KIMBERLY COIL      

	 	 	Name:	Kimberly Coil

	 	 	Title:	Assistant Vice President

	

 	
 	

By:	

/s/  ALI AHMED      

	 	 	Name:	Ali Ahmed

	 	 	Title:	Vice President

	 	 	CREDIT SUISSE FIRST BOSTON

acting through its Cayman Island branch

as a Lender
	

 	
 	

By:	

/s/  JAMES P. MORAN      

	 	 	Name:	James P. Moran

	 	 	Title:	Director

	

 	
 	

By:	

/s/  DENISE L. ALVAREZ      

	 	 	Name:	Denise L. Alvarez

	 	 	Title:	Associate

	 	 	BANK OF AMERICA N.A.

as a Lender
	

 	
 	

By:	

/s/  DON CARROLL      

	 	 	Name:	Don Carroll

	 	 	Title:	Vice President

QuickLinks

Exhibit 10.8

SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT AND CONSENT TO ISSUANCE OF ADDITIONAL SENIOR NOTES

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