Document:

Exhibit 10.22

 

INTARCIA
THERAPEUTICS, INC.

 

OUTSIDE
DIRECTOR COMPENSATION ARRANGEMENT

 

FOR
SERVICES AS A NON-EMPLOYEE DIRECTOR

 

CASH
COMPENSATION

 

Each non-employee Director shall receive for
his or her services as a Director of Intarcia Therapeutics, Inc. (the “Company”),
annual cash compensation of $15,000 per year, payable quarterly, and $750 for
each meeting attended in person and $375 for each meeting attended by
telephone, payable following such meeting.

 

Each non-employee Director serving on the
Audit Committee, Compensation Committee and/or Nominating and Corporate
Governance Committees of the Board of Directors of the Company shall receive
for his or her services on each such committee annual compensation of $7,500
per year, payable quarterly.

 

The Chairperson of the Audit Committee of the
Board of Directors of the Company shall receive for his or her services as the
Chairperson of the Audit Committee, annual cash compensation of $15,000 per
year, payable quarterly.

 

The Chairperson of the Compensation Committee
of the Board of Directors of the Company shall receive for his or her services
as the Chairperson of the Compensation Committee, annual cash compensation of
$3,000 per year, payable quarterly.

 

The Chairperson of the Nominating and
Corporate Governance Committee of the Board of Directors of the Company shall
receive for his or her services as the Chairperson of the Nominating and
Corporate Governance Committee, annual cash compensation of $3,000 per year,
payable quarterly.

 

EQUITY
COMPENSATION

 

Each non-employee Director will be eligible
to participate in the Company’s equity incentive plans.  Following the completion of the Company’s
initial public offering:

 

•                  any non-employee Director
who first becomes a Director following the initial public offering will receive
an initial option to purchase 15,000 shares of common stock;

•                  each non-employee Director
will receive an annual option to purchase 15,000 shares of common stock on the
day following each annual meeting of the Company’s stockholders, commencing
with the Company’s annual meeting of stockholders in 2006; and

•                  each non-employee Director
serving on the Company’s Audit Committee, Compensation Committee and Nominating
and Corporate Governance Committee will receive an annual option to purchase
6,000 shares of common stock for each committee on which he or she serves on
the day following each annual meeting of the Company’s stockholders, commencing
with the Company’s annual meeting of stockholders in 2006.Exhibit 10.A

    EXHIBIT
      10.A

      

       

      
        
          

        

        

        

        

        

        

        $500,000,000

         

        CREDIT
          AGREEMENT

         

        among

         

        EL
          PASO
          PRODUCTION HOLDING COMPANY,

         

        EL
          PASO
          PRODUCTION COMPANY,

         

        EL
          PASO
          ENERGY RATON CORPORATION,

         

        and

         

        EL
          PASO
          PRODUCTION GOM INC.,

         

        as
          Borrowers,

         

        FORTIS
          CAPITAL CORP.,

         

        as
          Administrative Agent, Joint Lead Arranger and Joint
          Bookrunner,

         

        THE
          ROYAL
          BANK OF SCOTLAND plc,

         

        as
          Joint
          Lead Arranger, Joint Bookrunner and Syndication Agent,

         

        THE
          BANK OF
          NOVA SCOTIA,

         

        as
          Joint
          Lead Arranger and Documentation Agent,

         

        and

         

        The
          Several
          Lenders

         

        from
          Time
          to Time Parties Hereto

         

        Dated
          as of
          August 30, 2005

         

        

        

        

        

        

        
           

          
            
            

            
              

            

          

           

        

        TABLE
          OF
          CONTENTS

         

        Page

         

        

          
            	
                    SECTION
                      1 DEFINITIONS

                  	
                    1

                  
	
                     

                  	
                    1.1.

                  	
                    Defined
                      Terms

                  	
                    1

                  
	 	
                    1.2. 

                  	
                    Other
                      Definitional Provisions

                  	
                    18

                  
	 	 	 	 
	
                    SECTION
                      2 AMOUNT AND TERMS OF COMMITMENTS

                  	
                    18

                  
	 	
                    2.1.

                  	
                    Commitments

                  	
                    18

                  
	 	
                    2.2.

                  	
                    Procedure
                      for Borrowing

                  	
                    19

                  
	 	
                    2.3. 

                  	
                    Repayment
                      of Loans

                  	
                    19

                  
	 	
                    2.4. 

                  	
                    Evidence
                      of Debt

                  	
                    20

                  
	 	 	 	 
	
                    SECTION
                      3 LETTERS OF CREDIT

                  	
                    20

                  
	 	
                    3.1.

                  	
                    The
                      L/C
                      Commitment

                  	
                    20

                  
	 	
                    3.2. 

                  	
                    Procedure
                      for Issuance of Letters of Credit

                  	
                    21

                  
	 	
                    3.3. 

                  	
                    Fees,
                      Commissions and Other Charges

                  	
                    21

                  
	 	
                    3.4. 

                  	
                    L/C
                      Participations

                  	
                    21

                  
	 	
                    3.5. 

                  	
                    Reimbursement
                      Obligation of the Borrowers

                  	
                    23

                  
	 	
                    3.6. 

                  	
                    Obligations
                      Absolute

                  	
                    23

                  
	 	
                    3.7. 

                  	
                    Letter
                      of Credit Payments

                  	
                    23

                  
	 	
                    3.8. 

                  	
                    L/C
                      Applications

                  	
                    24

                  
	 	 	 	 
	
                    SECTION
                      4 GENERAL PROVISIONS

                  	
                    24

                  
	 	
                    4.1.

                  	
                    Interest
                      Rates and Payment Dates

                  	
                    24

                  
	 	
                    4.2. 

                  	
                    Computation
                      of Interest and Fees

                  	
                    24

                  
	 	
                    4.3. 

                  	
                    Conversion
                      and Continuation Options

                  	
                    25

                  
	 	
                    4.4. 

                  	
                    Minimum
                      Amounts Maximum Number of Tranches

                  	
                    25

                  
	 	
                    4.5. 

                  	
                    Optional
                      Prepayments and Commitment Reductions

                  	
                    25

                  
	 	
                    4.6. 

                  	
                    Commitment
                      Fee; Administrative Agent’s Fee; Other Fees

                  	
                    27

                  
	 	
                    4.7. 

                  	
                    Inability
                      to Determine Interest Rate

                  	
                    27

                  
	 	
                    4.8. 

                  	
                    Pro
                      Rata Treatment and Payments

                  	
                    28

                  
	 	
                    4.9. 

                  	
                    Computation
                      of Borrowing Base

                  	
                    29

                  
	 	
                    4.10. 

                  	
                    Mandatory
                      Prepayments

                  	
                    31

                  
	 	
                    4.11.

                  	
                    Illegality

                  	
                    33

                  
	 	
                    4.12. 

                  	
                    Requirements
                      of Law

                  	
                    33

                  
	 	
                    4.13. 

                  	
                    Taxes

                  	
                    34

                  
	 	
                    4.14. 

                  	
                    Indemnity

                  	
                    35

                  
	 	
                    4.15. 

                  	
                    Change
                      of Lending Office

                  	
                    36

                  
	 	
                    4.16. 

                  	
                    Collateral
                      Security

                  	
                    36

                  
	 	
                    4.17. 

                  	
                    Replacement
                      of Lenders

                  	
                    38

                  
	 	 	 	 
	
                    SECTION
                      5 REPRESENTATIONS AND WARRANTIES

                  	
                    39

                  
	 	
                    5.1.

                  	
                    Financial
                      Condition

                  	
                    39

                  
	 	
                    5.2. 

                  	
                    No
                      Change

                  	
                    39

                  
	 	
                    5.3. 

                  	
                    Corporate
                      Existence; Compliance with Law

                  	
                    39

                  
	 	
                    5.4. 

                  	
                    Corporate
                      Power; Authorization; Enforceable Obligations

                  	
                    40

                  
	 	
                    5.5. 

                  	
                    No
                      Legal Bar

                  	
                    40

                  
	 	
                    5.6. 

                  	
                    No
                      Material Litigation

                  	
                    40

                  
	 	
                    5.7. 

                  	
                    No
                      Default

                  	
                    40

                  
	 	
                    5.8. 

                  	
                    Ownership
                      of Property; Liens

                  	
                    40

                  
	 	
                    5.9. 

                  	
                    Intellectual
                      Property

                  	
                    41

                  
	 	
                    5.10. 

                  	
                    Taxes

                  	
                    41

                  
	 	
                    5.11. 

                  	
                    Federal
                      Reserve Regulations

                  	
                    41

                  
	 	
                    5.12. 

                  	
                    ERISA

                  	
                    42

                  
	 	
                    5.13.

                  	
                    Investment
                      Company Act; Other Regulations

                  	
                    42

                  
	 	
                    5.14. 

                  	
                    Subsidiaries

                  	
                    42

                  
	 	
                    5.15. 

                  	
                    Purpose
                      of Loans

                  	
                    42

                  
	 	
                    5.16. 

                  	
                    Environmental
                      Matters

                  	
                    42

                  
	 	
                    5.17. 

                  	
                    No
                      Material Misstatements

                  	
                    43

                  
	 	
                    5.18. 

                  	
                    Insurance

                  	
                    44

                  
	 	
                    5.19. 

                  	
                    Future
                      Commitments

                  	
                    44

                  
	 	
                    5.20. 

                  	
                    Security
                      Documents

                  	
                    44

                  
	 	 	 	 
	
                    SECTION
                      6 CONDITIONS PRECEDENT

                  	
                    44

                  
	 	
                    6.1.

                  	
                    Conditions
                      to
                      Closing Date

                  	
                    44

                  
	 	
                    6.2. 

                  	
                    Conditions
                      to Each Extension of Credit

                  	
                    47

                  
	 	
                    6.3. 

                  	
                    Determinations
                      Under Section 6

                  	
                    48

                  
	 	 	 	 
	
                    SECTION
                      7 AFFIRMATIVE COVENANTS

                  	
                    48

                  
	 	
                    7.1.

                  	
                    Financial
                      Statements

                  	
                    48

                  
	 	
                    7.2. 

                  	
                    Certificates;
                      Other Information

                  	
                    49

                  
	 	
                    7.3. 

                  	
                    Payment
                      of Obligations

                  	
                    49

                  
	 	
                    7.4. 

                  	
                    Conduct
                      of Business and Maintenance of Existence; Compliance with Law
                      and
                      Contractual Obligations

                  	
                    50

                  
	 	
                    7.5. 

                  	
                    Maintenance
                      of Properties; Insurance

                  	
                    50

                  
	 	
                    7.6. 

                  	
                    Inspection
                      of Property; Books and Records; Discussions

                  	
                    50

                  
	 	
                    7.7. 

                  	
                    Notices

                  	
                    50

                  
	 	
                    7.8. 

                  	
                    Environmental
                      Laws

                  	
                    51

                  
	 	
                    7.9. 

                  	
                    Additional
                      Collateral

                  	
                    51

                  
	 	
                    7.10. 

                  	
                    Maintenance
                      and Operation of Properties

                  	
                    52

                  
	 	
                    7.11. 

                  	
                    Collateral
                      Coverage

                  	
                    52

                  
	 	
                    7.12. 

                  	
                    Further
                      Assurances

                  	
                    53

                  
	 	 	 	 
	
                    SECTION
                      8 NEGATIVE COVENANTS

                  	
                    53

                  
	 	
                    8.1.

                  	
                    Financial
                      Covenant Conditions

                  	
                    53

                  
	 	
                    8.2. 

                  	
                    Limitation
                      on Indebtedness

                  	
                    53

                  
	 	
                    8.3. 

                  	
                    Limitation
                      on Liens

                  	
                    54

                  
	 	
                    8.4.

                  	
                    Limitation
                      on Guarantee Obligations

                  	
                    56

                  
	 	
                    8.5. 

                  	
                    Limitation
                      on Fundamental Change

                  	
                    57

                  
	 	
                    8.6. 

                  	
                    Limitation
                      on Sale of Assets

                  	
                    57

                  
	 	
                    8.7. 

                  	
                    Limitation
                      on Dividends

                  	
                    58

                  
	 	
                    8.8. 

                  	
                    Limitation
                      on Investments, Loans and Advances

                  	
                    58

                  
	 	
                    8.9. 

                  	
                    Limitation
                      on Payments and Modifications of Debt Instruments, Other
                      Documents

                  	
                    59

                  
	 	
                    8.10. 

                  	
                    Limitation
                      on Transactions with Affiliates

                  	
                    60

                  
	 	
                    8.11. 

                  	
                    Limitation
                      on Changes in Fiscal Year

                  	
                    60

                  
	 	
                    8.12. 

                  	
                    Limitation
                      on Negative Pledge Clauses

                  	
                    60

                  
	 	
                    8.13. 

                  	
                    Limitation
                      on Lines of Business

                  	
                    60

                  
	 	
                    8.14. 

                  	
                    Forward
                      Sales

                  	
                    60

                  
	 	
                    8.15. 

                  	
                    Hedging
                      Agreements

                  	
                    61

                  
	 	 	 	 
	
                    SECTION
                      9 EVENTS OF DEFAULT

                  	
                    61

                  
	 	 	 	 
	
                    SECTION
                      10 THE ADMINISTRATIVE AGENT

                  	
                    64

                  
	 	
                    10.1. 

                  	
                    Appointment

                  	
                    64

                  
	 	
                    10.2. 

                  	
                    Delegation
                      of Duties

                  	
                    64

                  
	 	
                    10.3. 

                  	
                    Exculpatory
                      Provisions

                  	
                    65

                  
	 	
                    10.4. 

                  	
                    Reliance
                      by Administrative Agent

                  	
                    65

                  
	 	
                    10.5. 

                  	
                    Notice
                      of Default

                  	
                    65

                  
	 	
                    10.6. 

                  	
                    Non-Reliance
                      on Administrative Agent and Other Lenders

                  	
                    66

                  
	 	
                    10.7. 

                  	
                    Indemnification

                  	
                    66

                  
	 	
                    10.8. 

                  	
                    Administrative
                      Agent in Its Individual Capacity

                  	
                    66

                  
	 	
                    10.9. 

                  	
                    Successor
                      Administrative Agent

                  	
                    67

                  
	 	
                    10.10. 

                  	
                    Issuing
                      Lender

                  	
                    67

                  
	 	
                    10.11. 

                  	
                    Others

                  	
                    67

                  
	 	
                    10.12. 

                  	
                    Hedging
                      Arrangements

                  	
                    67

                  
	 	 	 	 
	
                    SECTION
                      11 MISCELLANEOUS

                  	
                    67

                  
	 	
                    11.1. 

                  	
                    Amendments
                      and Waivers

                  	
                    67

                  
	 	
                    11.2.

                  	
                    Notices

                  	
                    68

                  
	 	
                    11.3. 

                  	
                    No
                      Waiver; Cumulative Remedies

                  	
                    70

                  
	 	
                    11.4. 

                  	
                    Survival
                      of Representations and Warranties

                  	
                    70

                  
	 	
                    11.5. 

                  	
                    Payment
                      of Expenses and Taxes

                  	
                    71

                  
	 	
                    11.6. 

                  	
                    Successors
                      and Assigns; Participations and Assignments

                  	
                    72

                  
	 	
                    11.7. 

                  	
                    Adjustments;
                      Set-off

                  	
                    74

                  
	 	
                    11.8. 

                  	
                    Counterparts

                  	
                    75

                  
	 	
                    11.9. 

                  	
                    Severability

                  	
                    75

                  
	 	
                    11.10. 

                  	
                    Integration

                  	
                    75

                  
	 	
                    11.11. 

                  	
                    GOVERNING
                      LAW

                  	
                    75

                  
	 	
                    11.12. 

                  	
                    Submission
                      To Jurisdiction; Waivers

                  	
                    75

                  
	 	
                    11.13. 

                  	
                    Acknowledgments

                  	
                    76

                  
	 	
                    11.14. 

                  	
                    WAIVERS
                      OF JURY TRIAL

                  	
                    76

                  
	 	
                    11.15. 

                  	
                    Release
                      of Borrowing Base Properties

                  	
                    76

                  
	 	
                    11.16. 

                  	
                    Limitation
                      on Interest

                  	
                    76

                  
	 	
                    11.17. 

                  	
                    Joint
                      and Several Obligations of Borrowers

                  	
                    77

                  
	 	
                    11.18. 

                  	
                    USA
                      Patriot Act Notice

                  	
                    78

                  

          

        

         

         

        
           

          
            
            

            
              

            

          

          
            
            

          

        

        SCHEDULES

         

        

          
            	
                    1.1(a)

                  	
                    Commitments

                  
	
                    5.12

                  	
                    ERISA

                  
	
                    5.14

                  	
                    Subsidiaries

                  
	
                    5.16

                  	
                    Environmental
                      Matters

                  
	
                    5.17(c)

                  	
                    List
                      of
                      Wells

                  
	
                    5.19  

                  	
                    Future
                      Commitments

                  
	
                    8.2  

                  	
                    Existing
                      Indebtedness

                  
	
                    8.3

                  	
                    Existing
                      Liens

                  
	
                    8.4   

                  	
                    Guarantee
                      Obligations

                  
	
                    8.8

                  	
                    Existing
                      Investments

                  

          

        

        
EXHIBITS

        

        A    Form
          of
          Note

        B    Form
          of Guarantee
          Agreement

        C    [Reserved]

        D    [Reserved]

        E    [Reserved]

        F    Form
          of Closing
          Certificate

        G    Form
          of Assignment
          and Acceptance

        

        ANNEXES

        

        I     Borrowing
          Base
          Properties

        

         

        
           

          
            
            

            
              

            

          

           

        

        CREDIT
          AGREEMENT,
          dated as of August 30, 2005 (this “Agreement”),
          among EL PASO
          PRODUCTION HOLDING COMPANY, a Delaware corporation, EL PASO PRODUCTION
          COMPANY,
          a Delaware corporation, and EL PASO ENERGY RATON CORPORATION, a Delaware
          corporation, and EL PASO PRODUCTION GOM INC., a Delaware corporation
          (individually, a “Borrower”
          and collectively,
          the “Borrowers”),
          Fortis Capital
          Corp. (“Fortis”),
          as
          administrative agent for the Lenders (in such capacity, the “Administrative
          Agent”),
          as joint lead
          arranger (in such capacity, a “Joint Lead Arranger”) and joint bookrunner (in
          such capacity, a “Joint
          Bookrunner”),
          THE ROYAL BANK
          OF SCOTLAND plc (“RBS”),
          as joint lead
          arranger (in such capacity, a “Joint
          Lead
          Arranger”)
          and joint
          bookrunner (in such capacity, a “Joint
          Bookrunner”)
          and syndication
          agent (in such capacity, the “Syndication
          Agent”),
          THE BANK OF
          NOVA SCOTIA (“BNS”),
          as joint lead
          arranger (in such capacity, a “Joint
          Lead
          Arranger”)
          and
          documentation agent (in such capacity, the “Documentation
          Agent”),
          and the several
          banks, financial institutions and other entities from time to time parties
          to
          this Agreement (collectively, the “Lenders”).

         

        WITNESSETH:

         

        WHEREAS,
          the
          Borrowers wish to conclude a credit facility with the Lenders as provided
          in
          this Agreement for the purpose of financing their oil and gas
          operations;

         

        NOW,
          THEREFORE, in
          consideration of the premises and the mutual agreements hereinafter set
          forth,
          the parties hereby agree as follows:

         

        SECTION
          1

         

        DEFINITIONS

         

        1.1. Defined
          Terms

         

        .
          As used in this
          Agreement, the following terms shall have the following meanings:

         

        “Alternate
          Base
          Rate”
          - for any day, a
          rate per annum equal to the greatest of (a) the Prime Rate in effect on
          such day
          and (b) the Federal Funds Effective Rate in effect on such day plus 1/2
          of 1%.
          For purposes hereof: “Prime
          Rate”
          shall mean the
          rate of interest per annum publicly announced from time to time by Fortis
          as its
          prime rate in effect at its principal office in New York City (the Prime
          Rate
          not being intended to be the lowest rate of interest charged by Fortis
          in
          connection with extensions of credit to debtors); and “Federal
          Funds
          Effective Rate”
          shall mean, for
          any day, the weighted average of the rates on overnight federal funds
          transactions with members of the Federal Reserve System arranged by federal
          funds brokers, as published on the next succeeding Business Day by the
          Federal
          Reserve Bank of New York, or, if such rate is not so published for any
          day which
          is a Business Day, the average of the quotations for the day of such
          transactions received by the Administrative Agent from three federal funds
          brokers of recognized standing selected by it. Any change in the Alternate
          Base
          Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
          shall
          be effective as of the opening of business on the effective day of such
          change
          in the Prime Rate or the Federal Funds Effective Rate,
          respectively.

         

        “ABR
          Loans”
          - Loans the rate
          of interest applicable to which is based upon the Alternate Base
          Rate.

         

        “Administrative
          Agent”
          - as defined in
          the Preamble to this Agreement.

         

        “Affiliate”
          - as to any
          Person, any other Person (other than a Subsidiary) which, directly or
          indirectly, is in control of, is controlled by, or is under common control
          with,
          such Person. For purposes of this definition, “control” of a Person means the
          power, directly or indirectly, either to (a) vote 10% or more of the securities
          having ordinary voting power for the election of directors of such Person
          or (b)
          direct or cause the direction of the management and policies of such Person,
          whether by contract or otherwise.

         

        “Aggregate
          Credit
          Exposure”
          - as to any
          Lender at any time, an amount equal to the sum of (a) the aggregate principal
          amount of all Loans made by such Lender then outstanding and (b) such Lender’s
          Commitment Percentage of the Letter of Credit Outstandings at such time.
          For
          purposes of the foregoing, and for the avoidance of doubt, Loans shall
          not
          include the contingent obligations of the Borrower or any Affiliate thereof
          owed
          to a Lender in connection with Commodity Hedging Agreements.

         

        “Agreement”
          - this Credit
          Agreement, as further amended, supplemented or otherwise modified from
          time to
          time.

         

        “Applicable
          Margin”
          - for any day
          with respect to Eurodollar Loans and ABR Loans, the applicable per annum
          rate
          set forth below opposite the Borrowing Base Usage in effect on any such
          day:

         

        
          	
                  Borrowing
                    Base Usage

                	
                  Eurodollar

                  Margin

                	
                  Alternate

                  Base
                    Rate

                  Margin

                
	
                  Less
                    than or
                    equal to 50%

                	
                  1.25%

                	
                  .25%

                
	
                  Greater
                    than
                    50% and less than or equal to 75%

                	
                  1.50%

                	
                  .50%

                
	
                  Greater
                    than
                    75% and less than or equal to 90%

                	
                  1.75%

                	
                  .75%

                
	
                  Greater
                    than
                    90%

                	
                  1.875%

                	
                  .875%

                

        

        

        “Assignee”
          - as defined in
          subsection 11.6(c).

         

        “Available
          Commitment”
          - as to any
          Lender at any time, an amount, if positive, equal to (a) the amount
          of such
          Lender’s Commitment in excess of (b) such Lender’s Aggregate Credit
          Exposure.

         

        “Available
          Distribution Amount”
          - with respect to
          any dividend or other distribution, means (i) $50,000,000 minus (ii) the
          cumulative amount of all dividends and distributions made after the Closing
          Date
          in excess of the amounts described in subsection 8.7(c)(ii) and
          (iii).

         

        “BNS”
          - as defined in
          the preamble of this Agreement.

         

        “Borrower”
          and “Borrowers”
          - as defined in
          the preamble to this Agreement.

         

        “Borrower
          Redetermination Notice”
          - a notice from
          the Borrower’s Representative to the Administrative Agent requesting that the
          Administrative Agent redetermine the Borrowing Base, which notice may be
          sent by
          the Borrower’s Representative at any time, provided that no more than one such
          notice may be delivered by the Borrower’s Representative between Scheduled
          Redetermination Dates.

         

        “Borrowers’
          Representative”
          - EPPHC which is
          authorized to act on behalf of the Borrowers under this Agreement.

         

        “Borrowing
          Base”
          - at any time of
          determination, the amount then in effect as determined in accordance with
          Section 4.9.

         

        “Borrowing
          Base
          Availability”
          - as to any
          Lender at any time, an amount equal to the excess, if any, of (a) such
          Lender’s
          Commitment Percentage of the Borrowing Base in effect at such time over
          (b) such
          Lender’s Aggregate Credit Exposure.

         

        “Borrowing
          Base
          Deficiency”
          - the amount by
          which the Aggregate Credit Exposure of the Lenders exceeds the Borrowing
          Base
          then in effect.

         

        “Borrowing
          Base
          Deficiency Notification Date”
          - the date on
          which any notice of a Borrowing Base Deficiency is received by the Borrowers’
          Representative.

         

        “Borrowing
          Base
          Properties”
          - those
          Hydrocarbon Interests then owned by a Borrower and subject to a Mortgage
          utilized by the Administrative Agent and the Lenders as the basis for
          calculation of the Borrowing Base in the initial Reserve Report prepared
          by
          Ryder Scott and delivered to the Administrative Agent prior to the Closing
          Date,
          which description will be modified or supplemented from time to time as
          properties are added or deleted in accordance with the provisions of this
          Agreement. The Hydrocarbon Interests described in each preparation of a
          supplemental Reserve Report delivered in connection with a redetermination
          of
          the Borrowing Base pursuant to Section 4.9 hereof and subject to a Mortgage
          shall constitute a restatement of the list of Borrowing Base Properties.
          The
          Borrowing Base Properties as of the Closing Date are described on Annex
          I
          hereto.

         

        “Borrowing
          Base
          Usage”
          on any day means
          the percentage equivalent to the ratio of (i) the sum of the aggregate
          principal amount of the Loans then outstanding and Letter of Credit Outstandings
          on such day to (ii) the Borrowing Base in effect on such day.

         

        “Borrowing
          Date”
          - any Business
          Day specified in a notice pursuant to subsection 2.2 or 3.2 as a date on
          which
          the Borrower’s Representative requests the Lenders to make Loans or the Issuing
          Lender to issue a Letter of Credit hereunder.

         

        “Business
          Day”
          - any day that is
          not a Saturday, Sunday or other day on which commercial banks in New York
          City
          are authorized or required by law to remain closed; provided that, when
          used in
          connection with a Eurodollar Loan, the term “Business
          Day”
          shall exclude any
          day on which banks are not open for dealings in dollar deposits in the
          London
          interbank market.

         

        “Capital
          Lease”
          - any lease of
          property, real or personal, the obligations of the lessee in respect of
          which
          are required in accordance with GAAP to be capitalized on the balance sheet
          of
          the lessee.

         

        “Capital
          Stock”
          - any and all
          shares, interests, participations or other equivalents (however designated)
          of
          capital stock of a corporation, including, without limitation, any preferred
          stock of a corporation, any and all equivalent ownership interests in a
          Person
          (other than a corporation) and any and all warrants or options to purchase
          any
          of the foregoing.

         

        “Cash
          Collateral”
          - cash or Cash
          Equivalents subject to a security agreement in form and substance satisfactory
          to the Administrative Agent or letters of credit issued in favor of the
          Administrative Agent by an issuer and on terms and conditions satisfactory
          to
          the Administrative Agent, in an aggregate amount not to exceed
          $25,000,000.

         

        “Cash
          Equivalents”
          - (a) securities
          with maturities of one year or less from the date of acquisition issued
          or fully
          guaranteed or insured by the United States Government or any agency thereof,
          (b)
          certificates of deposit and eurodollar time deposits with maturities of
          one year
          or less from the date of acquisition and overnight bank deposits of any
          Lender
          or of any commercial bank (i) having capital and surplus in excess of
          $500,000,000 or (ii) which has a short-term commercial paper rating which
          satisfies the requirements set forth in clause (d) below, (c) repurchase
          obligations of any Lender or of any commercial bank satisfying the requirements
          of clause (b) of this definition, having a term of not more than 30 days
          with
          respect to securities issued, fully guaranteed or insured by the United
          States
          Government or any agency thereof, (d) commercial paper of a domestic
          issuer
          rated at least A-2 by Standard and Poor’s Ratings Group (“S&P”)
          or P-2 by
          Moody’s Investors Service, Inc. (“Moody’s”),
          (e) securities
          with maturities of one year or less from the date of acquisition issued
          or fully
          guaranteed by any state, commonwealth or territory of the United States,
          by any
          political subdivision or taxing authority of any such state, commonwealth
          or
          territory or by any foreign government, the securities of which state,
          commonwealth, territory, political subdivision, taxing authority or foreign
          government (as the case may be) are rated at least A by S&P or A by Moody’s,
          (f) securities with maturities of one year or less from the date of acquisition
          backed by standby letters of credit issued by any Lender or any commercial
          bank
          satisfying the requirements of clause (b) of this definition or (g) shares
          of
          money market mutual or similar funds which invest exclusively in assets
          satisfying the requirements of clauses (a) through (f) of this
          definition.

         

        “Cash
          Management
          Program”
          - El Paso
          Corporation’s cash management program applicable to the El Paso Corporation and
          its Subsidiaries, as in effect from time to time.

         

        “Change
          in
          Control”
          - except for the
          transactions contemplated pursuant to a Reorganization Plan consented to
          by the
          Lenders and the transfer of the ownership of EPPHC by El Paso Corporation
          to a
          wholly owned Subsidiary with no material liabilities or obligations which
          will
          own all the outstanding Capital Stock of EPPHC, any Person or “group” (within
          the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of
          1934, as
          amended) (i) shall have acquired beneficial ownership of 50% or more of
          any
          outstanding class of Capital Stock having ordinary voting power in the
          election
          of directors of any Borrower or (ii) shall obtain the power (whether or
          not
          exercised) to elect a majority of any Borrower’s directors.

         

        “Closing
          Date”
          - the date on
          which the conditions precedent set forth in subsection 6.1 shall be
          satisfied.

         

        “Code”
          - the Internal
          Revenue Code of 1986, as amended from time to time.

         

        “Collateral
          Coverage Ratio”
          - the ratio of
          the Collateral Value to the greater of (i) the Borrowing Base then in effect,
          and (ii) the outstanding Loans and Letter of Credit Outstandings.

         

        “Collateral
          Value”
          - (a) the PV-10
          Value of the Borrowing Base Properties as of the most recent Redetermination
          Date, plus (b) the PV-10 Value of Borrowing Base Properties acquired since
          that
          date, plus (c) Cash Collateral, minus (d) the PV-10 Value of Borrowing
          Base
          Properties subject to a Disposition since that date.

         

        “Collateral
          Value
          Deficiency”
          - if the
          Collateral Coverage Ratio is less than 1.5 to 1.0.

         

        “Commitment”
          - as to any
          Lender, the obligation of such Lender to make Loans to the Borrower hereunder
          in
          an aggregate principal amount at any one time outstanding not to exceed
          the
          amount set forth opposite such Lender’s name on Schedule 1.1(a) (which amount,
          with respect to all Lenders, shall equal $500,000,000 as of the Closing
          Date),
          as such amount may be reduced from time to time in accordance with the
          provisions of this Agreement.

         

        “Commitment
          Fee
          Rate”
          - for any day, a
          rate per annum equal to 0.375%.

         

        “Commitment
          Percentage”
          - as to any
          Lender at any time, the percentage which such Lender’s Commitment then
          constitutes of the aggregate Commitments (or, at any time after the Commitments
          shall have expired or terminated, the percentage which such Lender’s Aggregate
          Credit Exposure then outstanding constitutes of the Aggregate Credit Exposure
          then outstanding for all of the Lenders).

         

        “Commitment
          Period”
          - the period from
          and including the date hereof to but not including the Termination Date
          or such
          earlier date on which the Commitments shall terminate as provided
          herein.

         

        “Commitments”
          - the collective
          reference to the Commitments and the L/C Commitment.

         

        “Commodity
          Hedging Agreement”
          - a commodity
          hedging, basis hedging or purchase agreement or similar arrangement entered
          into
          with the intent of protecting against fluctuations in commodity prices
          or
          exchanging of notional commodity obligations, either generally or under
          specific
          contingencies.

         

        “Commonly
          Controlled Entity”
          - an entity,
          whether or not incorporated, which is under common control with the Borrower
          within the meaning of Section 4001 of ERISA or is part of a group which
          includes
          the Borrower and which is treated as a single employer under Section 414
          of the
          Code.

         

        “Consolidated
          Interest Expense”
          - with respect to
          EPPHC and its Restricted Subsidiaries on a consolidated basis for any period,
          the sum of (i) gross interest expense (including all cash and accrued interest
          expense but excluding cash fees related to credit facilities) of EPPHC
          and its
          Restricted Subsidiaries for such period on a consolidated basis, including
          to
          the extent included in interest expense in accordance with GAAP (x) the
          amortization of debt discounts and other fees related to credit facilities
          of
          EPPHC and its Restricted Subsidiaries, and (y) the portion of any payments
          or
          accruals with respect to Capital Leases or non-volumetric production payments
          allocable to interest expense and (ii) capitalized interest of EPPHC and
          its
          Restricted Subsidiaries on a consolidated basis.

         

        “Consolidated
          Net
          Income”
          - for any period,
          net income of EPPHC and its Restricted Subsidiaries determined on a consolidated
          basis in accordance with GAAP. 

         

        “Continuing
          70%
          Test”
          - as defined in
          subsection 4.16(d).

         

        “Contractual
          Obligation”
          - as to any
          Person, any provision of any security issued by such Person or of any agreement,
          instrument or other undertaking to which such Person is a party or by which
          it
          or any of its property is bound.

         

        “Control”
          - the possession,
          directly or indirectly, of the power to direct or cause the direction of
          the
          management or policies of a Person, whether through the ability to exercise
          voting power, by contract or otherwise.

         

        “Debt
          Leverage
          Ratio”
          - as of any date,
          the ratio of Indebtedness of EPPHC and its Restricted Subsidiaries as of
          such
          date to EBITDA of EPPHC and its Restricted Subsidiaries for the 12-month
          period
          ending on such date; provided, however, that for purposes of Section 8.2(j),
          such ratio shall be calculated using EBITDA for the four fiscal quarter
          period
          most recently ended for which financial statements are available.

         

        “Default”
          - any of the
          events specified in Section 9, whether or not any requirement for the giving
          of
          notice, the lapse of time, or both, or any other condition, has been
          satisfied.

         

        “Disposition”
          - the sale,
          conveyance, transfer, lease or other disposition (including, without limitation,
          through a sale and leaseback transaction or as a result of casualty or
          condemnation) of any Property.

         

        “Documentation
          Agent”
          -
          BNS.

         

        “Dollars”
          and “$”
          - dollars in
          lawful currency of the United States of America.

         

        “Domestic
          Restricted Subsidiary”
          - a Domestic
          Subsidiary that is a Restricted Subsidiary.

         

        “Domestic
          Subsidiary”
          - any Subsidiary
          organized under the laws of any jurisdiction within the United States of
          America
          (including territories thereof).

         

        “EBITDA”
          - with respect to
          EPPHC and its Restricted Subsidiaries, for any period, Consolidated Net
          Income
          for that period, plus,
          without
          duplication and to the extent deducted from revenues in determining Consolidated
          Net Income for that period, the sum of (a) the aggregate amount of Consolidated
          Interest Expense for that period, (b) the aggregate amount of commissions,
          discounts, points and other fees, including letter of credit fees paid
          during
          that period, (c) the aggregate amount of income tax expense for that period,
          (d)
          all amounts attributable to depreciation, depletion and amortization for
          that
          period, (e) non-cash charges and expenses relating to (i) full cost ceiling
          test
          write-downs and (ii) Hedging Agreements during that period, (f) distributions
          of
          cash to EPPHC or any of its consolidated Subsidiaries by any entity accounted
          for on the equity method, and minus,
          the sum of (y)
          earnings of entities accounted for on the equity method, and (z) to the
          extent
          added to revenues in determining Consolidated Net Income for that period,
          all
          non-cash income and unrealized noncash gains in respect of Hedging Agreements
          during that period, in each case determined in accordance with GAAP and
          without
          duplication of amounts; provided, however, that if any such Person shall
          have
          consummated any material acquisition or Disposition during such period,
          EBITDA
          shall be determined on a pro forma basis as if such acquisition or Disposition
          had occurred on the first day of such period. 

         

        “Environmental
          Laws”
          - any and all
          laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
          or other
          legally enforceable requirement (including, without limitation, common
          law) of
          any foreign government, the United States, or any state, local, municipal
          or
          other Governmental Authority with jurisdiction over the operations of any
          Loan
          Party, regulating, relating to or imposing liability or standards of conduct
          concerning protection of the environment or of human health, as has been,
          is
          now, or may at any time hereafter be, in effect.

         

        “Environmental
          Permits”
          - any and all
          permits, licenses, registrations, notifications, approvals, exemptions
          and any
          other authorization required under any applicable Environmental
          Law.

         

        “EPPHC”
          - El Paso
          Production Holding Company.

         

        “ERISA”
          - the Employee
          Retirement Income Security Act of 1974, as amended from time to
          time.

         

        “Eurocurrency
          Reserve Requirements”
          - for any day as
          applied to a Eurodollar Loan, the aggregate (without duplication) of the
          rates
          (expressed as a decimal) of reserve requirements in effect on such day
          (including, without limitation, basic, supplemental, marginal and emergency
          reserves under any regulations of the Board of Governors of the Federal
          Reserve
          System or other Governmental Authority having jurisdiction with respect
          thereto)
          dealing with reserve requirements prescribed for eurocurrency funding (currently
          referred to as “Eurocurrency Liabilities” in Regulation D of such Board)
          maintained by a member bank of such System.

         

        “Eurodollar
          Base
          Rate”
          - with respect to
          each day during each Interest Period pertaining to a Eurodollar Loan, the
          rate
          per annum equal to the rate per annum for Dollar deposits with a maturity
          comparable to such Interest Period which appears on page 3750 of
          the Dow
          Jones Market Service (formerly Telerate) at approximately 11:00 a.m., London
          time, two Business Days prior to the commencement of such Interest Period;
          provided that if there shall no longer exist a page 3750 of the
          Dow Jones
          Market Service (formerly Telerate) Page (or if such page is not available
          on the
          relevant Business Day), the Eurodollar Base Rate shall mean an interest
          rate per
          annum equal to the average (rounded upward, if necessary, to the next 1/100th
          of
          1%) of the respective rates per annum notified to the Administrative Agent
          by
          the Reference Bank as the average of the rates at which Dollar deposits
          (in an
          amount comparable to the amount of the Lenders’ Eurodollar Loan to be
          outstanding during such Interest Period and for a maturity comparable to
          such
          Interest Period) are offered to the Reference Bank in immediately available
          funds by prime banks in the London interbank market at approximately 11:00
          a.m.,
          London time, two Business Days prior to the commencement of such Interest
          Period. 

         

        “Eurodollar
          Loans”
          - Loans the rate
          of interest applicable to which is based upon the Eurodollar Rate.

         

        “Eurodollar
          Rate”
          - with respect to
          each day during each Interest Period pertaining to a Eurodollar Loan, a
          rate per
          annum determined for such day in accordance with the following formula
          (rounded
          upward to the nearest 1/100th of 1%):

         

        Eurodollar
          Base
          Rate   

        1.00
          - Eurocurrency
          Reserve Requirements

         

        “Event
          of
          Default”
          - any of the
          events specified in Section 9, provided that any requirement for the giving
          of
          notice, the lapse of time, or both, or any other condition, has been
          satisfied.

         

        “Excess
          Amount”
          - as defined in
          Section 4.5(e).

         

        “Extension
          of
          Credit”
          - as to any
          Lender, the making of, or the issuance of, or participation in, a Loan
          by such
          Lender, or the issuance of, or participation in, a Letter of Credit by
          such
          Lender.

         

        “Fee
          Letter”
          - the fee letter
          agreement among the Borrowers, Fortis, RBS and BNS.

         

        “Foreign
          Subsidiary”
          - any Subsidiary
          that is not a Domestic Subsidiary.

         

        “Fortis”
          - as defined in
          the preamble of this Agreement.

         

        “Free
          Cash
          Flow”
          - for any period,
          EBITDA for such period minus the sum of the following: (1) all income tax
          expense of EPPHC and its consolidated Restricted Subsidiaries for such
          period,
          but only to the extent actually paid in cash during such period, (2)
          Consolidated Interest Expense for such period, but only to the extent actually
          paid in cash during such period, and (3) 105% of, in each case, any
          depreciation, depletion, exploration and amortization expense of EPPHC
          and its
          consolidated Restricted Subsidiaries recorded for such period in accordance
          with
          GAAP. 

         

        “GAAP”
          - generally
          accepted accounting principles in the United States of America in effect
          from
          time to time, provided that for purposes of determining compliance with
          the
          covenants contained in Section 8, “GAAP” shall mean generally accepted
          accounting principles in the United States of America as in effect on the
          date
          hereof and applied on a basis consistent with the application used in the
          financial statements referred to in subsection 5.1.

         

        “Governmental
          Authority”
          - any nation or
          government, any state or other political subdivision thereof and any entity
          exercising executive, legislative, judicial, regulatory or administrative
          functions of government.

         

        “Guarantee
          Agreement”
          - the Guarantee
          Agreement to be executed and delivered by each Guarantor substantially
          in the
          form of Exhibit B, as the same may be amended, modified or supplemented
          from
          time to time.

         

        “Guarantee
          Obligation”
          - as to any
          Person (the “guaranteeing
          person”),
          any obligation
          of (a) the guaranteeing person or (b) another Person (including, without
          limitation, any bank under any letter of credit) to induce the creation
          of which
          the guaranteeing person has issued a reimbursement, counterindemnity or
          similar
          obligation, in either case guaranteeing or in effect guaranteeing any
          Indebtedness, leases, dividends or other obligations (the “primary
          obligations”)
          of any other
          third Person (the “primary
          obligor”)
          in any manner,
          whether directly or indirectly, including, without limitation, any obligation
          of
          the guaranteeing person, whether or not contingent, (i) to purchase any
          such
          primary obligation or any property constituting direct or indirect security
          therefor, (ii) to advance or supply funds (1) for the purchase or payment
          of any
          such primary obligation or (2) to maintain working capital or equity capital
          of
          the primary obligor or otherwise to maintain the net worth or solvency
          of the
          primary obligor, (iii) to purchase property, securities or services primarily
          for the purpose of assuring the owner of any such primary obligation of
          the
          ability of the primary obligor to make payment of such primary obligation
          or
          (iv) otherwise to assure or hold harmless the owner of any such primary
          obligation against loss in respect thereof; provided, however, that the
          term
          Guarantee Obligation shall not include endorsements of instruments for
          deposit
          or collection in the ordinary course of business. The amount of any Guarantee
          Obligation of any guaranteeing person shall be deemed to be the lower of
          (a) an
          amount equal to the stated or determinable amount of the primary obligation
          in
          respect of which such Guarantee Obligation is made and (b) the maximum
          amount
          for which such guaranteeing person may be liable pursuant to the terms
          of the
          instrument embodying such Guarantee Obligation, unless such primary obligation
          and the maximum amount for which such guaranteeing person may be liable
          are not
          stated or determinable, in which case the amount of such Guarantee Obligation
          shall be such guaranteeing person’s maximum reasonably anticipated liability in
          respect thereof as determined by the Borrower in good faith. Obligations
          of the
          Borrower or any Subsidiary pursuant to indemnities which (a) are granted
          in the
          ordinary course of business, including, without limitation, (i) such obligations
          in connection with stock purchase agreements or asset purchase and sale
          agreements and (ii) such obligations in connection with the conduct of
          the Oil
          and Gas Business in the ordinary course of business and (b) do not cover
          Indebtedness of the types described in clauses (a) through (f) of the definition
          of Indebtedness, shall not constitute “Guarantee
          Obligations”
          for purposes of
          this Agreement.

         

        “Guarantor”
          - each of EPPHC’s
          Domestic Restricted Subsidiaries that are not Borrowers, and any other
          Subsidiary of EPPHC which incurs a Guarantee Obligation with respect to
          the
          Indebtedness of the Borrowers.

         

        “Hedge
          Parties”
          - a Lender or an
          Affiliate of a Lender that enters into a Hedging Agreement with the
          Borrowers.

         

        “Hedging
          Agreement”
          - any Interest
          Rate Protection Agreement, Commodity Hedging Agreement, foreign currency
          exchange agreement, commodity price protection agreement or other interest
          or
          currency exchange rate or commodity price hedging arrangement concluded
          by the
          Borrowers.

         

        “Hydrocarbon
          Interests”
          - all rights,
          titles, interests and estates now owned or hereafter acquired in and to
          oil and
          gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon
          leases, mineral fee or lease interests, farm outs, overriding royalty and
          royalty interests, net profit interests, oil payments, production payment
          interests and similar mineral interests, including any reserved or residual
          interest of whatever nature.

         

        “Hydrocarbons”
          - oil, gas,
          casinghead gas, condensate, distillate, liquid hydrocarbons, gaseous
          hydrocarbons, all products refined, separated, settled and dehydrated therefrom
          and all products refined therefrom, including, without limitation, kerosene,
          liquefied petroleum gas, refined lubricating oils, diesel fuel, drip gasoline,
          natural gasoline, helium and sulfur.

         

        “Indebtedness”
          - of any Person
          at any date, without duplication, (a) the principal amount of indebtedness
          of
          such Person for borrowed money or for the deferred purchase price of property
          or
          services (other than current trade liabilities incurred in the ordinary
          course
          of business and payable in accordance with customary practices and accrued
          current liabilities incurred in the ordinary course of business), (b) any
          other
          indebtedness of such Person which is evidenced by a note, bond, debenture
          or
          similar instrument, (c) all obligations of such Person under Capital Leases
          and
          non-volumetric production payment arrangements, (d) all obligations of
          such
          Person in respect of letters of credit and acceptances issued or created
          for the
          account of such Person, (e) all net obligations of such Person under Hedging
          Agreements, (f) all obligations of others of the type referred to in
          clauses (a) through (e) above and which are secured by any Lien
          on any
          property owned by such Person even though such Person has not assumed or
          otherwise become liable for the payment thereof, except that the amount
          of any
          nonrecourse obligation shall be deemed to be the lesser of the value of
          the
          property securing such obligation and the amount of such obligation so
          secured,
          (g) all Guarantee Obligations with respect to the items described
          in
          clauses (a) through (e) above, (h) Guarantee Obligations with respect to
          volumetric production payments, and (i) obligations of such Person to purchase
          or repurchase securities, accounts or other Property arising out of or
          in
          connection with the sale of the same or substantially similar securities
          or
          Property; provided, that for the purposes of subsection 8.1(b) and subsection
          8.2(j) only, the definition of Indebtedness shall not include the obligations
          described in clause (e) above or production payments.

         

        “Indenture”
          - the Indenture
          dated as of May 23, 2003, between EPPHC and Wilmington Trust Company, as
          amended, relating to the issuance of the Senior Notes.

         

        “Independent
          Auditors”
          - means
          PricewaterhouseCooper LLP or other independent certified public accountants
          of
          nationally recognized standing reasonably acceptable to the Required
          Lenders.

         

        “Independent
          Engineer”
          - means Ryder
          Scott or another independent engineering firm selected by EPPHC and reasonably
          acceptable to the Technical Banks.

         

        “Insolvency”
          - with respect to
          any Multiemployer Plan, the condition that such Plan is insolvent within
          the
          meaning of Section 4245 of ERISA.

         

        “Insolvent”
          - pertaining to a
          condition of Insolvency.

         

        “Intellectual
          Property”
          - as defined in
          Section 5.9 of this Agreement.

         

        “Interest
          Coverage Ratio”
          - as of any date,
          the ratio of EBITDA of EPPHC and its Restricted Subsidiaries for the 12-month
          period ending on such date to Consolidated Interest Expense of EPPHC and
          its
          Restricted Subsidiaries for such 12-month period.

         

        “Interest
          Payment
          Date”
          - (a) as to any
          ABR Loan, the last day of each March, June, September and December, commencing
          September 30, 2005, the date of any conversion from an ABR Loan to a Eurodollar
          Loan and the Termination Date, (b) as to any Eurodollar Loan having an
          Interest
          Period of three months or less, the last day of such Interest Period, and
          (c) as
          to any Eurodollar Loan having an Interest Period longer than three months,
          each
          day which is three months, or a whole multiple thereof, after the first
          day of
          such Interest Period and the last day of such Interest Period.

         

        “Interest
          Period”
          - with respect to
          any Eurodollar Loan:

         

        (i) initially,
          the
          period commencing on the borrowing or conversion date, as the case may
          be, with
          respect to such Eurodollar Loan and ending one, two, three or six (or,
          to the
          extent available to all of the Lenders, nine or twelve) months thereafter,
          as
          selected by the Borrowers’ Representative in its notice of borrowing or notice
          of conversion, as the case may be, given with respect thereto; and

         

        (ii) thereafter,
          each
          period commencing on the last day of the next preceding Interest Period
          applicable to such Eurodollar Loan and ending one, two, three or six (or,
          to the
          extent available to all of the Lenders, nine or twelve) months thereafter,
          as
          selected by the Borrowers’ Representative by irrevocable notice to the
          Administrative Agent not less than three Business Days prior to the last
          day of
          the then current Interest Period with respect thereto;

         

        (iii) provided
          that, all
          of the foregoing provisions relating to Interest Periods are subject to
          the
          following:

         

        (1) if
          any Interest
          Period pertaining to a Eurodollar Loan would otherwise end on a day that
          is not
          a Business Day, such Interest Period shall be extended to the next succeeding
          Business Day unless the result of such extension would be to carry such
          Interest
          Period into another calendar month in which event such Interest Period
          shall end
          on the immediately preceding Business Day;

         

        (2) any
          Interest Period
          pertaining to a Eurodollar Loan that begins on the last Business Day of
          a
          calendar month (or on a day for which there is no numerically corresponding
          day
          in the calendar month at the end of such Interest Period) shall end on
          the last
          Business Day of a calendar month;

         

        (3) the
          Borrowers’
          Representative shall select Interest Periods so as not to require a payment
          or
          prepayment of any Eurodollar Loan during an Interest Period for such Loan;
          and

         

        (4) any
          Interest Period
          that would otherwise extend beyond the Termination Date shall end on the
          Termination Date.

         

        “Interest
          Rate
          Protection Agreement”
          - an interest
          rate swap, cap or collar agreement or similar arrangement entered into
          with the
          intent of protecting against fluctuations in interest rates or the exchange
          of
          notional interest obligations, either generally or under specific
          contingencies.

         

        “Investments”
          - as defined in
          subsection 8.8.

         

        “ISP”
          - International
          Standby Practices, as the same may be amended from time to time.

         

        “Issuing
          Lender”
          - the
          Administrative Agent or any of its respective Affiliates, in its capacity
          as
          issuer of a Letter of Credit, and any other Lender to whom the Administrative
          Agent or any of its respective Affiliates assigns (with the prior written
          consent of the Required Lenders) all or a portion of its obligations to
          issue
          Letters of Credit hereunder.

         

        “Joint
          Bookrunners”
          - Fortis and
          RBS.

         

        “Joint
          Lead
          Arrangers”
          - Fortis, RBS and
          BNS.

         

        “L/C
          Application”
          - as defined in
          subsection 3.2.

         

        “L/C
          Commitment”
          - collectively,
          the Issuing Lender’s obligation to issue Letters of Credit and the obligation of
          Participating Lenders to acquire L/C Participating Interests therein pursuant
          to
          Section 3.

         

        “L/C
          Participating Interest”
          - with respect to
          any Letter of Credit (a) in the case of the Issuing Lender with respect
          thereto,
          its interest in such Letter of Credit and any L/C Application relating
          thereto
          after giving effect to the granting of participating interests therein,
          if any,
          pursuant hereto and (b) in the case of each Participating Lender, its undivided
          participating interest in such Letter of Credit and any L/C Application
          relating
          thereto.

         

        “Lender
          Redetermination Notice”
          - a notice from
          the Required Lenders to the Borrower’s Representative giving notice of their
          election to redetermine the Borrowing Base, which notice may be sent by
          the
          Required Lenders at any time they so elect, provided that such an election
          (excluding any mandatory redetermination of the Borrowing Base made in
          connection with the issuance of Subordinated Indebtedness pursuant to subsection
          4.9(d)(iii)) can be made by the Required Lenders no more than once between
          Scheduled Redetermination Dates.

         

        “Letters
          of
          Credit”
          - as defined in
          subsection 3.1(a).

         

        “Letter
          of Credit
          Outstandings”
          - at any time,
          the sum of (a) the aggregate amount available for drawing under Letters
          of
          Credit then outstanding and (b) the aggregate amount of drawings under
          Letters
          of Credit which have not then been reimbursed pursuant to subsection
          3.5.

         

        “Lien”
          - any mortgage,
          pledge, hypothecation, assignment for security purposes, deposit arrangement,
          encumbrance, lien (statutory or other), charge or other security interest
          of any
          kind or nature whatsoever (including, without limitation, any conditional
          sale
          or other title retention agreement and any Capital Lease having substantially
          the same economic effect as any of the foregoing), but excluding set-off
          arrangements.

         

        “Loans”
          - as defined in
          subsection 2.1(a).

         

        “Loan
          Documents”
          - the collective
          reference to this Agreement, any Notes, the L/C Applications, the Fee Letter,
          the Guarantee Agreement, the Security Documents and any Hedging Agreement
          between the Borrowers and any Hedge Party (including, any Hedging Agreement
          between the Borrower and any commercial bank or other financial institution
          that
          was at the time such Hedging Agreement was entered into a Lender or an
          Affiliate
          of a Lender).

         

        “Loan
          Parties”
          - the collective
          reference to the Borrowers, each Guarantor and any other Subsidiary that
          at the
          time of determination is a party to any Loan Document.

         

        “Material
          Adverse
          Effect”
          - a material
          adverse effect on (a) the business, assets, liabilities, property, or financial
          condition of a Borrower and its Subsidiaries taken as a whole, (b) the
          ability
          of a Borrower or any of the other Loan Parties to perform their respective
          obligations under the Loan Documents, or (c) the validity or enforceability
          of
          this or any of the other Loan Documents or the rights and remedies of the
          Administrative Agent or the Lenders hereunder or thereunder.

         

        “Materials
          of
          Environmental Concern”
          - any petroleum
          products or any hazardous or toxic substances, materials, or wastes, defined
          or
          regulated as such in or under any Environmental Law, including, without
          limitation, asbestos or asbestos containing material, polychlorinated biphenyls,
          urea-formaldehyde insulation, and any other substance that is regulated
          under
          any Environmental Law.

         

        “Monthly
          Date”
          - the last
          Business Day of each calendar month.

         

        “Mortgage”
          - each mortgage,
          deed of trust, assignment or security agreement executed by the Borrowers
          in
          form and substance reasonably satisfactory to the Administrative Agent
          which
          purports to create a Lien in favor of the Administrative Agent, in each
          case as
          amended, supplemented or otherwise modified from time to time.

         

        “Multiemployer
          Plan”
          - a Plan which is
          a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

         

        “Net
          Proceeds”
          - with respect to
          any Disposition by the Borrowers or any Subsidiary, an amount equal to
          the gross
          proceeds in cash (including cash equivalents and any cash payments received
          by
          way of deferred payment of principal pursuant to a note or installment
          receivable or purchase price adjustment receivable or otherwise, but only
          as and
          when received) of such Disposition, net of taxes, attorneys’ fees, accountants’
          fees, brokerage, consultant and other fees and expenses actually incurred
          in
          connection with such Disposition, including any sums retained in escrow
          at such
          closing.

         

        “Non-Excluded
          Taxes”
          - as defined in
          subsection 4.13(a).

         

        “Non-U.S.
          Lender”
          - as defined in
          subsection 4.13(b).

         

        “Note”
          - as defined in
          subsection 2.3(e).

         

        “Obligations”
          - the collective
          reference to the unpaid principal of and interest on the Loans and the
          Reimbursement Obligations and all other obligations and liabilities of
          the
          Borrowers (including, without limitation, amounts owing under any Loan
          Document,
          including any Hedging Agreement, and interest accruing at the then applicable
          rate provided in this Agreement after the maturity of the Loans and interest
          accruing at the then applicable rate provided in this Agreement after the
          filing
          of any petition in bankruptcy, or the commencement of any insolvency,
          reorganization or like proceeding, relating to the Borrowers, whether or
          not a
          claim for post-filing or post-petition interest is allowed in such proceeding)
          to the Administrative Agent or any of the Lenders or their Affiliates under
          the
          Loan Documents.

         

        “Oil
          and Gas
          Business”
          - (a) the
          acquisition, exploration, exploitation, development, operation and disposition
          of interests in Oil and Gas Properties and Hydrocarbons, (b) the gathering,
          marketing, treating, processing, storage, selling and transporting of any
          production from such interests or Oil and Gas Properties, including, without
          limitation, the marketing of Hydrocarbons obtained from unrelated Persons,
          (c)
          any business relating to or arising from exploration for or development,
          production, treatment, processing, storage, transportation or marketing
          of
          Hydrocarbons, (d) any business relating to oilfield sales and service,
          and (e)
          any activity that is ancillary or necessary or desirable to facilitate
          the
          activities described in clauses (a) through (d) of this definition.

         

        “Oil
          and Gas
          Properties”
          - Hydrocarbon
          Interests; the Properties now or hereafter pooled or unitized with Hydrocarbon
          Interests; all presently existing or future unitization, pooling agreements
          and
          declarations of pooled units and the units created thereby (including without
          limitation all units created under orders, regulations and rules of any
          Governmental Authority having jurisdiction) which may affect all or any
          portion
          of the Hydrocarbon Interests; all pipelines, gathering lines, compression
          facilities, tanks and processing plants; all interests held in royalty
          trusts
          whether presently existing or hereafter created; all Hydrocarbons in and
          under
          and which may be produced, saved, processed or attributable to the Hydrocarbon
          Interests, the lands covered thereby and all Hydrocarbons in pipelines,
          gathering lines, tanks and processing plants and all rents, issues, profits,
          proceeds, products, revenues and other incomes from or attributable to
          the
          Hydrocarbon Interests; all tenements, hereditaments, appurtenances and
          Properties in any way appertaining, belonging, affixed or incidental to
          the
          Hydrocarbon Interests, and all rights, titles, interests and estates described
          or referred to above, including any and all real property, now owned or
          hereafter acquired, used or held for use in connection with the operating,
          working or development of any of such Hydrocarbon Interests or Property
          and
          including any and all surface leases, rights-of-way, easements and servitudes
          together with all additions, substitutions, replacements, accessions and
          attachments to any and all of the foregoing; in each case whether now owned
          or
          hereafter acquired directly or indirectly.

         

        “Participants”
          - as defined in
          subsection 11.6(b).

         

        “Participating
          Lender”
          - with respect to
          any Letter of Credit, any Lender (other than the Issuing Lender with respect
          to
          such Letter of Credit) with respect to its L/C Participating Interest in
          such
          Letter of Credit.

         

        “PBGC”
          - the Pension
          Benefit Guaranty Corporation established pursuant to Subtitle A of Title
          IV of
          ERISA.

         

        “Permitted
          Liens”
          - as defined in
          Section 8.3.

         

        “Person”
          - an individual,
          partnership, corporation, business trust, joint stock company, trust,
          unincorporated association, joint venture, limited liability company,
          Governmental Authority or other entity of whatever nature.

         

        “Plan”
          - at a particular
          time, any employee benefit plan which is subject to Title IV of ERISA and
          in
          respect of which the Borrower or a Commonly Controlled Entity is (or, if
          such
          plan were terminated at such time, would under Section 4069 of ERISA be
          deemed
          to be) an “employer” as defined in Section 3(5) of ERISA.

         

        “Price
          Criteria”
          - certain price
          assumptions determined by the Technical Banks in their sole discretion
          utilized
          in the determination of future revenues from oil and gas
          production.

         

        “Properties”
          - any kind of
          facility, fixture, property or asset, whether real, personal or mixed,
          or
          tangible or intangible owned, leased or operated by the Borrowers or a
          Guarantor.

         

        “Proved
          Reserves”
          - the estimated
          quantities of crude oil, condensate, natural gas and natural gas liquids
          that
          geological and engineering data demonstrate with reasonable certainty to
          be
          recoverable in future years from known reservoirs under existing economic
          and
          operating conditions (i.e., prices and costs as of the date the estimate
          is
          made), as determined in accordance with Rule 4-10 of Regulation S-X
          promulgated by, and other applicable requirements of, the United States
          Securities and Exchange Commission.

         

        “PV
          10 Value”
          -
          with respect to any Oil and Gas Properties, the
          then present
          value of such Properties agreed to by the Technical Banks utilizing a 10%
          discount rate and the Price Criteria furnished by the Administrative Agent
          to
          EPPHC thirty (30) days prior to the delivery of the then relevant Reserve
          Report
          under Section 4.9.

         

        “RBS”
          - as defined in
          the preamble to this Agreement.

         

        “Redetermination
          Date”
          - each date that
          the redetermined Borrowing Base becomes effective subject to the notice
          requirements specified in subsection 4.9.

         

        “Reference
          Bank”
          - Fortis Bank
          S.A./N.V.

         

        “Register”
          - as defined in
          subsection 11.6(d).

         

        “Regulation
          U”
          - Regulation U of the Board of Governors of the Federal Reserve System
          as in
          effect from time to time.

         

        “Regulations
          T
          and X”
          - the
          corresponding regulation of the Board of Governors of the Federal Reserve
          System
          as from time to time in effect and any successor or other regulation or
          official
          interpretation of said Board of Governors, and all official rulings and
          interpretations thereunder or thereof.

         

        “Reimbursement
          Obligations”
          - the obligation
          of the Borrowers to reimburse the Issuing Lender pursuant to subsection
          3.5 for
          amounts drawn under Letters of Credit issued by the Issuing Lender in accordance
          with the terms of this Agreement and the related L/C Applications.

         

        “Reorganization”
          - with respect to
          any Multiemployer Plan, the condition that such plan is in reorganization
          within
          the meaning of Section 4241 of ERISA.

         

        “Reorganization
          Plan”
          - a plan for the
          corporate restructuring of El Paso Corporation and its Subsidiaries, including
          the Borrowers and the Guarantor.

         

        “Reportable
          Event”
          - any of the
          events set forth in Section 4043(b) of ERISA, other than those events as
          to
          which the thirty-day notice period is waived under 29 C.F.R. Part
          4043.

         

        “Required
          Lenders”
          - at any time
          while no Loans are outstanding, Lenders having at least sixty-six and two-thirds
          percent (66-2/3%) of the aggregate Commitments, and, at any time while
          Loans are
          outstanding, Lenders holding at least sixty-six and two-thirds percent
          (66-2/3%)
          of the outstanding aggregate principal amount of the Loans (without regard
          to
          any sale by a Lender of a participation in any Loan under Section
          11.6(b).

         

        “Requirement
          of
          Law”
          - as to any
          Person, the certificate or articles of incorporation and by-laws or other
          organizational or governing documents of such Person, and any law, treaty,
          rule
          or regulation or determination of an arbitrator or a court or other Governmental
          Authority, in each case applicable to or binding upon such Person or any
          of its
          Property or to which such Person or any of its Property is subject.

         

        “Reserve
          Report”
          - a report in
          form and substance satisfactory to the Technical Banks, separately stated
          with
          respect to (i) all Oil and Gas Properties owned directly or indirectly
          by the
          Loan Parties valued in accordance with Rule 4-10 of Regulation S-X promulgated
          by, and other applicable requirements of, the United States Securities
          and
          Exchange Commission, (ii) all Borrowing Base Properties owned directly
          or
          indirectly by the Borrowers valued using the Price Criteria furnished by
          the
          Administrative Agent to the Borrowers’ Representative, and (iii) all Oil and Gas
          Properties owned directly or indirectly by the Borrowers valued using the
          Price
          Criteria furnished by the Administrative Agent to the Borrowers’ Representative,
          setting forth, among other things, (a) the PV-10 Value of such Properties,
          (b) the Proved Reserves attributable to such Properties, and (c) a projection
          of
          the rate of production and net income of the Proved Reserves attributable
          to
          such Properties as of the date of such Reserve Report.

         

        “Responsible
          Officer”
          - of any Loan
          Party, the president, the chief financial officer, treasurer or controller
          of
          such Loan Party.

         

        “Restricted
          Subsidiary”
          - each Subsidiary
          of EPPHC that is not a Borrower or an Unrestricted Subsidiary.

         

        “Ryder
          Scott”
          - Ryder Scott
          Company, L.P.

         

        “Scheduled
          Redetermination Dates”
          - April 30 and
          October 31 of each year.

         

        “Secured
          Parties”
          - the Lenders
          under this Agreement and a Lender or any Affiliate of a Lender party to
          a
          Hedging Agreement with any Borrower. The term Secured Parties shall also
          include
          a former Lender or an Affiliate of a former Lender that is party to a Hedging
          Agreement with any Borrower, provided that such former Lender or Affiliate
          was a
          Lender hereunder or an Affiliate of a Lender hereunder at the time it entered
          into such Hedging Agreement.

         

        “Security
          Documents”
          - the collective
          reference to the Mortgages and all other security documents hereafter delivered
          to the Administrative Agent granting a Lien on any asset or assets of any
          Person
          to secure the obligations and liabilities of the Borrowers hereunder and
          under
          any of the other Loan Documents or to secure any guarantee of any such
          obligations and liabilities.

         

        “Senior
          Notes”
          - the 73⁄4% Senior
          Notes due 2013 issued by EPPHC pursuant to the Indenture.

         

        “Single
          Employer
          Plan”
          - any Plan which
          is covered by Title IV of ERISA, but which is not a Multiemployer
          Plan.

         

        “Subordinated
          Indebtedness”
          - any
          Indebtedness of the Borrowers contractually subordinated to the prior payment
          in
          full of the Loans, Reimbursement Obligations and any other obligations
          hereunder
          in a manner acceptable to the Required Lenders as evidenced by their written
          approval.

         

        “Subsidiary”
          - as to any
          Person, a corporation, partnership or other entity of which more than 50%
          of the
          total voting power of shares of stock or other equity ownership interests
          having
          ordinary voting power (other than stock or such other ownership interests
          having
          such power only by reason of the happening of a contingency) to vote in
          the
          election of directors, a managing general partner, or majority of general
          partners or other managers or trustees thereof, is at the time owned or
          controlled, directly or indirectly by such Person or one or more of the
          other
          Subsidiaries of such Person (or a combination thereof). Unless otherwise
          qualified, all references to a “Subsidiary” or to “Subsidiaries” in this
          Agreement shall refer to any direct or indirect Subsidiary
          or Subsidiaries
          of the
          Borrower.

         

        “Syndication
          Agent”
          -
          RBS.

         

        “Technical
          Banks”
          - Fortis, RBS and
          BNS.

         

        “Termination
          Date”
          - August 30,
          2010.

         

        “Tranche”
          - the collective
          reference to Eurodollar Loans the then current Interest Periods with respect
          to
          all of which begin on the same date and end on the same later date (whether
          or
          not such Loans shall originally have been made on the same day); Tranches
          may be
          identified as “Eurodollar Tranches”

         

        “Transferee”
          - as defined in
          subsection 11.6(f).

         

        “Type”
          - as to any Loan,
          its nature as an ABR Loan or a Eurodollar Loan.

         

        “Uniform
          Customs”
          - the Uniform
          Customs and Practice for Documentary Credits (1993 Revision), International
          Chamber of Commerce Publication No. 500, as the same may be amended from
          time to
          time.

         

        “Unrestricted
          Subsidiary”
          - any Subsidiary
          of EPPHC other than a Loan Party which is designated in writing by EPPHC
          to the
          Administrative Agent as an Unrestricted Subsidiary, provided that no Subsidiary
          may be so designated by EPPHC if it is a Restricted Subsidiary under the
          Indenture.

         

        1.2. Other
          Definitional
          Provisions

         

        .
          (a) Unless
          otherwise specified therein, all terms defined in this Agreement shall
          have the
          defined meanings when used in any Loan Document or any certificate or other
          document made or delivered pursuant hereto or thereto.

         

        (a) As
          used herein and
          in any Loan Document, and any certificate or other document made or delivered
          pursuant hereto or thereto, accounting terms relating to the Borrower or
          any
          Subsidiary of the Borrower not defined in subsection 1.1 and accounting
          terms
          partly defined in subsection 1.1, to the extent not defined, shall have
          the
          respective meanings given to them under GAAP. References in any Loan Document
          to
          financial statements shall be deemed to include all related schedules and
          notes
          thereto.

         

        (b) The
          words
“hereof,”“herein” and “hereunder” and words of similar import when used in this
          Agreement shall refer to this Agreement as a whole and not to any particular
          provision of this Agreement, and Section, subsection, Schedule and Exhibit
          references are to this Agreement unless otherwise specified.

         

        (c) The
          meanings given
          to terms defined herein shall be equally applicable to both the singular
          and
          plural forms of such terms.

         

        (d) References
          in any
          Loan Document to knowledge of any Loan Party of events or circumstances
          shall be
          deemed to refer to events or circumstances of which an officer of such
          Loan
          Party has actual knowledge.

         

        SECTION
          2

         

        AMOUNT
          AND
          TERMS OF COMMITMENTS

         

        2.1. Commitments

         

        .
          (a) Subject to
          the terms and conditions hereof, including, without limitation, the satisfaction
          of the conditions precedent set forth in Section 6 hereof, each Lender
          severally
          agrees to make Loans (“Loans”)
          to the Borrowers
          from time to time during the Commitment Period in an aggregate principal
          amount
          at any one time outstanding not to exceed the amount of such Lender’s
          Commitment, provided that no Lender shall make any Loans if, after giving
          effect
          thereto, the sum of such Lender’s Loans and Commitment Percentage of Letter of
          Credit Outstandings (in each case, after giving effect to the Loans requested
          to
          be made and the Letters of Credit requested to be issued on such date)
          exceeds
          the lesser of (i) such Lender’s Commitment and (ii) such Lender’s Commitment
          Percentage of the Borrowing Base then in effect. During the Commitment
          Period,
          the Borrowers may use the Commitments by borrowing, prepaying the Loans
          in whole
          or in part, and reborrowing, all in accordance with the terms and conditions
          hereof.

         

        (a) The
          Loans may from
          time to time be (i) Eurodollar Loans, (ii) ABR Loans or (iii) a combination
          thereof, as determined by the Borrower’s Representative and notified to the
          Administrative Agent in accordance with subsections 2.2 and 4.3, provided
          that
          no Loan shall be made as a Eurodollar Loan after the day that is one month
          prior
          to the Termination Date.

         

        2.2. Procedure
          for
          Borrowing

         

        .
          The Borrowers may
          borrow under the Commitments during the Commitment Period on any Business
          Day,
          provided that the Borrower’s Representative shall give the Administrative Agent
          irrevocable notice (which notice must be received by the Administrative
          Agent
          prior to 12:00 noon, New York City time, (a) three Business Days
          prior to
          the requested Borrowing Date, if all or any part of the requested Loans
          initially are to be Eurodollar Loans or (b) on the requested Borrowing
          Date if
          the requested Loans are ABR Loans), specifying (i) the amount to be borrowed,
          (ii) the requested Borrowing Date, (iii) whether the borrowing is to be
          of
          Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the borrowing
          is to be entirely or partly of Eurodollar Loans, the respective amounts
          of each
          such Type of Loan and the respective lengths of the initial Interest Periods
          therefor. Each borrowing under the Commitments shall be in an amount equal
          to
          (x) in the case of ABR Loans, $5,000,000 or a whole multiple of $1,000,000
          in
          excess thereof (or, if the then Available Commitments, or the amount of
          outstanding Eurodollar Loans after any repayment of any Eurodollar Loans,
          are
          less than $5,000,000, such lesser amount) and (y) in the case of Eurodollar
          Loans, $5,000,000 or a whole multiple of $1,000,000 in excess thereof.
          Upon
          receipt of any such notice from the Borrower’s Representative, the
          Administrative Agent shall promptly notify each Lender thereof. Each Lender
          will
          make the amount of its pro rata share of each borrowing available to the
          Administrative Agent for the account of the Borrower at the office of the
          Administrative Agent specified in subsection 11.2 prior to 11:00 A.M.,
          New York
          City time, on the Borrowing Date requested by the Borrower in funds immediately
          available to the Administrative Agent. Such borrowing will then be made
          available to the Borrowers by the Administrative Agent crediting the account
          of
          the Borrowers specified in the borrowing notice with the aggregate of the
          amounts made available to the Administrative Agent by the Lenders and in
          like
          funds as received by the Administrative Agent.

         

        2.3. Repayment
          of
          Loans

         

        .
          (a) The Borrowers
          hereby unconditionally promise to pay to the Administrative Agent for the
          account of each Lender the then unpaid principal amount of each Loan of
          such
          Lender on the Termination Date (or such earlier date on which the Loans
          become
          due and payable pursuant to Section 9). The Borrowers hereby further agree
          to
          pay interest on the unpaid principal amount of the Loans from time to time
          outstanding from the date hereof to but not including the date the Loans
          are
          paid in full at the rates per annum, and on the dates, set forth in subsection
          4.1.

         

        (a) Each
          Lender shall
          maintain in accordance with its usual practice an account or accounts evidencing
          indebtedness of the Borrowers to such Lender resulting from each Loan of
          such
          Lender from time to time, including the amounts of principal and interest
          payable and paid to such Lender from time to time under this
          Agreement.

         

        (b) The
          Administrative
          Agent shall maintain the Register pursuant to subsection 11.6(d), and a
          subaccount therein for each Lender, in which shall be recorded (i) the
          amount of
          each Loan made hereunder, the Type thereof and each Interest Period applicable
          thereto, (ii) the amount of any principal or interest due and payable or
          to
          become due and payable from the Borrowers to each Lender hereunder and
          (iii)
          both the amount of any sum received by the Administrative Agent hereunder
          from
          the Borrowers and each Lender’s share thereof.

         

        (c) The
          entries made in
          the Register and the accounts of each Lender maintained pursuant to subsection
          11.6(d) shall, to the extent permitted by applicable law, be prima facie
          evidence of the existence and amounts of the obligations of the Borrowers
          therein recorded; provided, however, that the failure of the Administrative
          Agent or any Lender to maintain the Register or any such account, or any
          error
          therein, shall not in any manner affect the obligation of the Borrowers
          to repay
          (with applicable interest) the Loans made to the Borrowers by such Lender
          in
          accordance with the terms of this Agreement.

         

        2.4. Evidence
          of
          Debt

         

        .
          Upon the request
          of any Lender, the Borrowers will execute and deliver to such Lender a
          promissory note of the Borrowers evidencing the Loans of such Lender,
          substantially in the form of Exhibit A with appropriate insertions as to
          date
          and principal amount (a “Note”).

         

        SECTION
          3

         

        LETTERS
          OF
          CREDIT

         

        3.1. The
          L/C
          Commitment

         

        .
          (a) Subject to
          the terms and conditions hereof, including, without limitation, the satisfaction
          of the conditions precedent set forth in Section 6 hereof, the Issuing
          Lender,
          in reliance on the agreements of the other Lenders set forth in subsection
          3.4(a), agrees to issue letters of credit (the “Letters
          of
          Credit”)
          for the account
          of any Borrower or any Subsidiary or Affiliate of a Borrower in which EPPHC
          has
          a direct or indirect investment, on any Business Day during the Commitment
          Period in such form as may be approved from time to time by the Issuing
          Lender;
          provided that the Issuing Lender shall not issue any Letter of Credit if,
          after
          giving effect to such issuance and after giving effect to any Loans requested
          to
          be made or Letters of Credit requested to be issued on such date the sum
          of the
          Loans and Letter of Credit Outstandings would exceed the lesser of (x)
          the
          Commitments and (y) the Borrowing Base then in effect. Each Letter of Credit
          shall (i) be issued to support obligations of any Borrower or any Subsidiary
          or
          Affiliate of a Borrower in which EPPHC has a direct or indirect investment,
          contingent or otherwise, which finance the working capital and business
          needs of
          such Borrower or Subsidiary or Affiliate in which EPPHC has a direct or
          indirect
          investment, and (ii) shall expire no later than the earlier of (x) one
          year (or
          such later date agreed to by the Issuing Lender) after the date of issuance
          and
          (y) five Business Days prior to the Termination Date, provided that any
          Letter
          of Credit with a one-year tenor may provide for the extension thereof for
          additional one-year periods (which shall in no event extend beyond the
          date
          referred to in clause (y) above). Each Letter of Credit shall be denominated
          in
          Dollars.

         

        (a) Each
          Letter of
          Credit shall be subject to the Uniform Customs or, at the option of the
          Issuing
          Lender, the ISP, and, to the extent not inconsistent therewith, the laws
          of the
          State of New York.

         

        (b) The
          Issuing Lender
          shall not at any time be obligated to issue any Letter of Credit hereunder
          if
          such issuance would conflict with, or cause the Issuing Lender or any
          Participating Lender to exceed any limits imposed by, any applicable Requirement
          of Law.

         

        3.2. Procedure
          for
          Issuance of Letters of Credit

         

        .
          The Borrowers’
          Representative may from time to time request that the Issuing Lender issue
          a
          Letter of Credit by delivering to the Issuing Lender and the Administrative
          Agent at their respective addresses for notices specified herein a letter
          of
          credit application in the Issuing Lender’s then customary form (an “L/C
          Application”)
          completed to the
          satisfaction of the Issuing Lender, and such other certificates, documents
          and
          other papers and information as may be customary and as the Issuing Lender
          may
          reasonably request. Upon receipt of any L/C Application, the Issuing Lender
          will
          process such L/C Application and the certificates, documents and other
          papers
          and information delivered to it in connection therewith in accordance with
          its
          customary procedures. Upon receipt by the Issuing Lender of confirmation
          from
          the Administrative Agent that issuance of such Letter of Credit will not
          contravene subsection 3.1, the Issuing Lender shall promptly issue the
          Letter of
          Credit requested thereby (but in no event shall the Issuing Lender be required
          to issue any Letter of Credit earlier than one Business Day after its receipt
          of
          the L/C Application therefor and all such other certificates, documents
          and
          other papers and information relating thereto) by issuing the original
          of such
          Letter of Credit to the beneficiary thereof or as otherwise may be agreed
          by the
          Issuing Lender and the Borrowers’ Representative. The Issuing Lender shall
          furnish a copy of such Letter of Credit to the Borrower’s Representative and the
          Administrative Agent promptly following the issuance thereof, and, thereafter,
          the Administrative Agent shall promptly furnish a copy thereof to the
          Lenders.

         

        3.3. Fees,
          Commissions
          and Other Charges

         

        .
          (a) The Borrowers
          shall pay to the Administrative Agent, for the account of (i) the Issuing
          Lender
          and the Participating Lenders, a letter of credit commission with respect
          to
          each Letter of Credit, computed for the period from the date such Letter
          of
          Credit is issued to the date upon which the next payment is due under this
          subsection (and, thereafter, from the date of payment under this subsection
          to
          the date upon which the next payment is due under this subsection) at the
          rate
          per annum equal to the Applicable Margin in effect from time to time for
          Eurodollar Loans of the daily aggregate amount available to be drawn under
          such
          Letter of Credit during such period, and (ii) the Issuing Lender, a letter
          of
          credit commission with respect to each Letter of Credit in an amount equal
          to
          .125% per annum of the daily aggregate amount available to be drawn under
          such
          Letter of Credit. The letter of credit commissions payable pursuant to
          clause
          (i) and (ii) above shall be payable quarterly in arrears on the last day
          of each
          March, June, September and December, commencing September 30, 2005, and
          on the
          Termination Date.

         

        (a) In
          addition to the
          foregoing fees and commissions, the Borrowers shall pay to the Issuing
          Lender
          (i) a fee of $750 for issuing each Letter of Credit, and (ii) a fee of
          $250 for
          amending any Letter of Credit.

         

        (b) The
          Administrative
          Agent shall, promptly following its receipt thereof, distribute to the
          Issuing
          Lender and the Participating Lenders all fees and commissions received
          by the
          Administrative Agent for their respective accounts pursuant to this
          subsection.

         

        3.4. L/C
          Participations

         

        .
          (a) Effective on
          the date of issuance of each Letter of Credit issued after the Closing
          Date, the
          Issuing Lender irrevocably agrees to grant and hereby grants to each
          Participating Lender, and each Participating Lender irrevocably agrees
          to accept
          and purchase and hereby accepts and purchases from the Issuing Lender,
          on the
          terms and conditions hereinafter stated, for such Participating Lender’s own
          account and risk an undivided interest equal to such Participating Lender’s
          Commitment Percentage in the Issuing Lender’s obligations and rights under each
          Letter of Credit issued by the Issuing Lender and the amount of each draft
          paid
          by the Issuing Lender thereunder. Each Participating Lender unconditionally
          and
          irrevocably agrees with the Issuing Lender that, if a draft is paid under
          any
          Letter of Credit for which such Issuing Lender is not reimbursed in full
          by the
          Borrowers in accordance with the terms of this Agreement, such Participating
          Lender shall pay to the Administrative Agent, for the account of the Issuing
          Lender, upon demand at the Administrative Agent’s address specified in
          subsection 11.2, an amount equal to such Participating Lender’s Commitment
          Percentage of the amount of such draft, or any part thereof, which is not
          so
          reimbursed. On the date that any Assignee becomes a Lender party to this
          Agreement in accordance with subsection 11.6, participating interests in
          any
          outstanding Letters of Credit held by the transferor Lender from which
          such
          Assignee acquired its interest hereunder shall be proportionately reallotted
          between such Assignee and such transferor Lender. Each Participating Lender
          hereby agrees that its obligation to participate in each Letter of Credit,
          and
          to pay or to reimburse the Issuing Lender for its participating share of
          the
          drafts drawn or amounts otherwise paid thereunder, is absolute, irrevocable
          and
          unconditional and shall not be affected by any circumstances whatsoever
          (including, without limitation, the occurrence or continuance of any Default
          or
          Event of Default), and that each such payment shall be made without offset,
          abatement, withholding or other reduction whatsoever.

         

        (a) If
          any amount
          required to be paid by any Participating Lender to the Issuing Lender pursuant
          to subsection 3.4(a) in respect of any unreimbursed portion of any draft
          paid by
          the Issuing Lender under any Letter of Credit is paid to the Issuing Lender
          within three Business Days after the date such payment is due, such
          Participating Lender shall pay to the Administrative Agent, for the account
          of
          the Issuing Lender, on demand, an amount equal to the product of (i) such
          amount, times (ii) the daily average Federal Funds Effective Rate during
          the
          period from and including the date such draft is paid to the date on which
          such
          payment is immediately available to the Issuing Lender, times (iii) a fraction
          the numerator of which is the number of days that elapse during such period
          and
          the denominator of which is 360. If any such amount required to be paid
          by any
          Participating Lender pursuant to subsection 3.4(a) is not in fact made
          available
          to the Administrative Agent, for the account of the Issuing Lender, by
          such
          Participating Lender within three Business Days after the date such payment
          is
          due, the Issuing Lender shall be entitled to recover from such Participating
          Lender, on demand, such amount with interest thereon calculated from such
          due
          date at the rate per annum applicable to ABR Loans hereunder. A certificate
          of
          the Issuing Lender submitted to any Participating Lender with respect to
          any
          amounts owing under this subsection shall be conclusive in the absence
          of
          manifest error.

         

        (b) Whenever,
          at any
          time after the Issuing Lender has paid a draft under any Letter of Credit
          and
          has received from any Participating Lender its pro rata share of such payment
          in
          accordance with subsection 3.4(a), the Issuing Lender receives any reimbursement
          on account of such unreimbursed portion, or any payment of interest on
          account
          thereof, the Issuing Lender will pay to the Administrative Agent, for the
          account of such Participating Lender, its pro rata share thereof; provided,
          however, that in the event that any such payment received by the Issuing
          Lender
          shall be required to be returned by the Issuing Lender, such Participating
          Lender shall return to the Administrative Agent for the account of the
          Issuing
          Lender, the portion thereof previously distributed to it.

         

        3.5. Reimbursement
          Obligation of the Borrowers

         

        .
          If any draft
          shall be presented for payment under any Letter of Credit, the Issuing
          Lender
          shall notify the Borrowers and the Administrative Agent of the date and
          the
          amount thereof. The Borrowers agree to reimburse the Issuing Lender (whether
          with their own funds or with proceeds of the Loans) on each date on which
          the
          Issuing Lender pays a draft so presented under any Letter of Credit for
          the
          amount of (i) such draft so paid and (ii) any taxes, fees, charges or other
          costs or expenses incurred by the Issuing Lender in connection with such
          payment. Each such payment shall be made to the Issuing Lender at its address
          for notices specified herein in lawful money of the United States of America
          and
          in immediately available funds. Each
          unreimbursed drawing under any Letter of Credit shall constitute a request
          by
          the Borrowers, subject to the provisions of Section 2.1, to the Administrative
          Agent for ABR Loans in the amount of such drawing. The borrowing date with
          respect to any such ABR Loans shall be the date of the remittance by the
          Issuing
          Bank of the proceeds of such drawing. If ABR Loans are not available on
          the date
          when the Issuing Lender pays a draft, interest
          shall be
          payable on any and all amounts remaining unpaid by the Borrowers under
          this
          subsection from the date of payment of the applicable draft to but excluding
          the
          date of payment in full thereof, (x) for the period commencing on the date
          of
          payment of the applicable draft to the date which is 3 days thereafter,
          at the
          rate which would be payable on ABR Loans at such time and (y) thereafter,
          at the
          rate which would be payable on ABR Loans at such time plus 2%.

         

        3.6. Obligations
          Absolute

         

        .
          The Borrowers’
          obligations under this Section 3 shall be absolute and unconditional under
          any
          and all circumstances and irrespective of any set-off, counterclaim or
          defense
          to payment which the Borrowers or any other Person may have or have had
          against
          the Issuing Lender or any other Lender or any beneficiary of a Letter of
          Credit.
          The Borrowers also agree with the Issuing Lender that the Issuing Lender
          shall
          not be responsible for, and the Borrowers’ obligations under subsection 3.5
          shall not be affected by, among other things, the validity or genuineness
          of
          documents or of any endorsements thereon, even though such documents shall
          in
          fact prove to be invalid, fraudulent or forged, or any dispute between
          or among
          the Borrowers and any beneficiary of any Letter of Credit or any other
          party to
          which such Letter of Credit may be transferred or any claims whatsoever
          of the
          Borrowers against any beneficiary of such Letter of Credit or any such
          transferee. The Issuing Lender shall not be liable for any error, omission,
          interruption or delay in transmission, dispatch or delivery of any message
          or
          advice, however transmitted, in connection with any Letter of Credit, except
          for
          errors or omissions caused by the Issuing Lender’s gross negligence or willful
          misconduct. The Borrowers agree that any action taken or omitted by the
          Issuing
          Lender under or in connection with any Letter of Credit or the related
          drafts or
          documents, if done in the absence of gross negligence or willful misconduct
          and
          in accordance with the standards of care specified in the Uniform Commercial
          Code of the State of Texas, including, without limitation, Article 5 thereof,
          shall be binding on the Borrowers and shall not result in any liability
          of such
          Issuing Lender to the Borrowers.

         

        3.7. Letter
          of Credit
          Payments

         

        .
          Without
          limitation of subsection 3.6, the responsibility of the Issuing Lender
          to the
          Borrower in connection with any draft presented for payment under any Letter
          of
          Credit shall, in addition to any payment obligation expressly provided
          for in
          such Letter of Credit, be limited to determining that the documents (including
          each draft) delivered under such Letter of Credit in connection with such
          presentment are in conformity with such Letter of Credit.

         

        3.8. L/C
          Applications

         

        .
          To the extent
          that any provision of any L/C Application, including any reimbursement
          provisions contained therein, related to any Letter of Credit is inconsistent
          with the provisions of this Section 3, the provisions of this Section 3
          shall
          prevail.

         

        SECTION
          4

         

        GENERAL
          PROVISIONS

         

        4.1. Interest
          Rates and
          Payment Dates

         

        .
          (a) Each
          Eurodollar Loan shall bear interest for each day during each Interest Period
          with respect thereto at a rate per annum equal to the Eurodollar Rate determined
          for such Interest Period plus the Applicable Margin in effect on such
          day.

         

        (a) Each
          ABR Loan shall
          bear interest for each day at a rate per annum equal to the Alternate Base
          Rate
          in effect on such day plus the Applicable Margin in effect on such
          date.

         

        (b) If
          all or a portion
          of (i) any principal of any Loan, (ii) any interest payable thereon, (iii)
          any
          commitment fee or (iv) any other amount payable hereunder shall not be
          paid when
          due (whether at the stated maturity, by acceleration or otherwise), the
          principal of the Loans and any such overdue interest, commitment fee or
          other
          amount shall bear interest at a rate per annum which is (x) in the case
          of
          principal, the rate that would otherwise be applicable thereto pursuant
          to the
          foregoing provisions of this subsection plus 2% or (y) in the case of any
          such
          overdue interest, commitment fee or other amount, the Alternate Base Rate
          plus
          the Applicable Margin in effect on such date plus 2%, in each case from
          the date
          of such non-payment to but excluding the date such overdue principal, interest,
          commitment fee or other amount is paid in full (as well after as before
          judgment).

         

        (c) Interest
          shall be
          payable in arrears on each Interest Payment Date, provided that interest
          accruing pursuant to subsection 4.1(c) shall be payable from time to time
          on
          demand.

         

        4.2. Computation
          of
          Interest and Fees

         

        .
          (a) Whenever, in
          the case of ABR Loans, it is calculated on the basis of the Prime Rate,
          interest
          shall be calculated on the basis of a 365- (or 366-, as the case may be)
          day
          year for the actual days elapsed; and, otherwise, interest and fees shall
          be
          calculated on the basis of a 360-day year for the actual days elapsed (including
          the first day and excluding the last day). The Administrative Agent shall
          as
          soon as practicable notify the Borrowers’ Representative and the Lenders of each
          determination of a Eurodollar Rate. Any change in the interest rate on
          a Loan
          resulting from a change in the Alternate Base Rate or the Eurocurrency
          Reserve
          Requirements shall become effective as of the opening of business on the
          day on
          which such change becomes effective. The Administrative Agent shall as
          soon as
          practicable notify the Borrower and the Lenders of the effective date and
          the
          amount of each such change in interest rate.

         

        (a) Each
          determination
          of an interest rate by the Administrative Agent pursuant to any provision
          of
          this Agreement shall be conclusive and binding on the Borrower and the
          Lenders
          in the absence of manifest error. The Administrative Agent shall, at the
          request
          of the Borrowers’ Representative, deliver to the Borrowers a statement showing
          the quotations and calculations used by the Administrative Agent in determining
          any interest rate pursuant to subsection 4.1(a), (b) and (c).

         

        4.3. Conversion
          and
          Continuation Options

         

        .
          (a) The Borrowers
          may elect from time to time to convert Eurodollar Loans to ABR Loans by
          having
          the Borrowers’ Representative give the Administrative Agent at least one
          Business Day’s prior irrevocable notice of such election, provided that any such
          conversion of Eurodollar Loans may only be made on the last day of an Interest
          Period with respect thereto. The Borrowers’ Representative may elect from time
          to time to convert ABR Loans to Eurodollar Loans by giving the Administrative
          Agent at least three Business Days’ prior irrevocable notice of such election.
          Any such notice of conversion to Eurodollar Loans shall specify the length
          of
          the initial Interest Period or Interest Periods therefor. Upon receipt
          of any
          such notice the Administrative Agent shall promptly notify each Lender
          thereof.
          All or any part of outstanding Eurodollar Loans and ABR Loans may be converted
          as provided herein, provided that (i) no Loan may be converted into a Eurodollar
          Loan when any Event of Default has occurred and is continuing and the
          Administrative Agent has or the Required Lenders have determined that such
          a
          conversion is not appropriate and (ii) no Loan may be converted into a
          Eurodollar Loan after the date that is one month prior to the Termination
          Date.

         

        (a) Any
          Eurodollar
          Loans may be continued as such upon the expiration of the then current
          Interest
          Period with respect thereto by the Borrowers’ Representative giving notice to
          the Administrative Agent, in accordance with the applicable provisions
          of the
          term “Interest Period” set forth in subsection 1.1, of the length of the next
          Interest Period to be applicable to such Loans, provided that no Eurodollar
          Loan
          may be continued as such (i) when any Event of Default has occurred and
          is
          continuing and the Administrative Agent has or the Required Lenders have
          determined that such a continuation is not appropriate or (ii) after the
          date
          that is one month prior to the Termination Date and provided, further,
          that if
          the Borrowers’ Representative shall fail to give such notice or if such
          continuation is not permitted such Loans shall be automatically converted
          to ABR
          Loans on the last day of such then expiring Interest Period.

         

        4.4. Minimum
          Amounts
          Maximum Number of Tranches

         

        .
          All borrowings,
          conversions and continuations of Loans hereunder and all selections of
          Interest
          Periods hereunder shall be in such amounts and be made pursuant to such
          elections so that, after giving effect thereto, the aggregate principal
          amount
          of the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000
          or
          a whole multiple of $1,000,000 in excess thereof. In no event shall there
          be
          more than six (6) Eurodollar Tranches outstanding at any time.

         

        4.5. Optional
          Prepayments and Commitment Reductions

         

        .
          (a) The Borrowers
          may, on the last day of any Interest Period with respect thereto, in the
          case of
          Eurodollar Loans, or at any time and from time to time, in the case of
          ABR
          Loans, prepay the Loans, in whole or in part, without premium or penalty,
          upon
          at least one Business Day’s irrevocable notice to the Administrative Agent in
          the case of ABR Loans, and upon at least three Business Days’ irrevocable notice
          to the Administrative Agent in the case of Eurodollar Loans, in each case
          specifying the date and amount of prepayment and whether the prepayment
          is of
          Eurodollar Loans, ABR Loans or a combination thereof, and, in each case
          if of a
          combination thereof, the amount allocable to each. Upon receipt of any
          such
          notice the Administrative Agent shall promptly notify each Lender thereof.
          If
          any such notice is given, the amount specified in such notice shall be
          due and
          payable on the date specified therein, together with any amounts payable
          pursuant to subsection 4.14. Partial prepayments of Eurodollar Loans shall
          be in
          an aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000
          in
          excess thereof.

         

        (a) Subject
          to
          subsection 4.5(c), the Borrowers shall have the right, upon not less than
          three
          Business Days’ notice to the Administrative Agent, to terminate the Commitments
          or, from time to time, to reduce the amount of the Commitments. Any such
          reduction shall be in an amount equal to $5,000,000 or a whole multiple
          of
          $1,000,000 in excess thereof and shall reduce permanently the Commitments
          then
          in effect. Termination of the Commitments shall also terminate the obligation
          of
          the Issuing Lender to issue Letters of Credit.

         

        (b) In
          the event of the
          termination by the Borrowers of all Commitments, the Borrowers shall on
          the date
          of such termination repay or prepay all of its outstanding Loans (together
          with
          accrued and unpaid interest on the Loans and any amounts payable pursuant
          to
          subsection 4.14 and any other amounts payable hereunder), reduce the Letter
          of
          Credit Outstandings to zero and cause all Letters of Credit to be canceled
          and
          returned to the Issuing Lender (or shall cash collateralize the Letter
          of Credit
          Outstandings (or provide supporting letters of credit from an institution
          reasonably acceptable to the Administrative Agent) on terms and pursuant
          to
          documentation reasonably satisfactory to the Issuing Lender and the
          Administrative Agent). In the event of any partial reduction of the Commitments,
          then (i) at or prior to the effective date of such reduction, the Administrative
          Agent shall notify the Borrowers’ Representative and the Lenders of the
          Aggregate Credit Exposure of all the Lenders and (ii) if the Aggregate
          Credit
          Exposure of all the Lenders would exceed the aggregate Commitments after
          giving
          effect to such reduction, then, prior to giving effect to such reduction,
          the
          Borrower shall, on the date of such reduction, then, repay or prepay Loans
          and,
          second, reduce the Letter of Credit Outstandings (or cash collateralize
          the
          Letter of Credit Outstandings (or provide supporting letters of credit
          from an
          institution reasonably acceptable to the Administrative Agent) on terms
          and
          pursuant to documentation reasonably satisfactory to the Issuing Lender
          and the
          Administrative Agent), in an aggregate amount sufficient to eliminate such
          excess.

         

        (c) The
          Loans shall be
          repaid, and the Letter of Credit Outstandings shall be reduced or cash
          collateralized, to the extent required by subsection 4.10. All such prepayments
          and cash collateralization shall be made in accordance with this subsection
          4.5.

         

        (d) In
          the event the
          amount of any prepayment of the Loans required to be made above shall exceed
          the
          aggregate principal amount of the outstanding ABR Loans (the amount of
          any such
          excess being called the “Excess
          Amount”),
          the Borrowers
          shall have the right, in lieu of making such prepayment in full, to prepay
          all
          the outstanding applicable ABR Loans and to deposit an amount equal to
          the
          Excess Amount with, and (ii) in the event that Letter of Credit Outstandings
          are
          required to be cash collateralized, the Borrowers shall deposit an amount
          equal
          to the aggregate amount of Letter of Credit Outstandings to be cash
          collateralized with, the Administrative Agent in a cash collateral account
          maintained (pursuant to documentation reasonably satisfactory to the
          Administrative Agent) by and in the sole dominion and control of the
          Administrative Agent. Any amounts so deposited shall be held by the
          Administrative Agent as collateral for the obligations of the Borrowers
          under
          this Agreement and applied to the prepayment of the applicable Eurodollar
          Loans
          at the end of the current Interest Periods applicable thereto or Letter
          of
          Credit Outstandings, as the case may be, or, during an Event of Default,
          to
          payment of any obligations under this Agreement (including obligations
          in
          respect of the Letters of Credit). On any Business Day on which (i) collected
          amounts remain on deposit in or to the credit of such cash collateral account
          after giving effect to the payments made on such day pursuant to this subsection
          4.5(e) and (ii) the Borrowers’ Representative shall have delivered to the
          Administrative Agent a written request or a telephonic request (which shall
          be
          promptly confirmed in writing) that such remaining collected amounts be
          invested
          in the Cash Equivalent specified in such request, the Administrative Agent
          shall
          use its reasonable efforts to invest such remaining collected amounts in
          such
          Cash Equivalent, provided, however, that the Administrative Agent shall
          have
          continuous dominion and full control over any such investments (and over
          any
          interest that accrues thereon) to the same extent that it has dominion
          and
          control over such cash collateral account and no Cash Equivalent shall
          mature
          after the end of the Interest Period for which it is to be applied. The
          Borrowers shall not have the right to withdraw any amount from such cash
          collateral account until the applicable Eurodollar Loans and accrued interest
          thereon and Letter of Credit Outstandings are paid in full or if a Default
          or
          Event of Default then exists or would result. Any prepayment or
          collateralization pursuant to this subsection 4.5(e) shall be applied in
          the
          order set forth in clause (ii) of the second sentence of subsection
          4.5(c).

         

        4.6. Commitment
          Fee;
          Administrative Agent’s Fee; Other Fees

         

        .
          (a) The Borrowers
          agree to pay to the Administrative Agent for the account of each Lender
          a
          commitment fee for the period from and including, for each Lender, the
          Closing
          Date to but not including the Termination Date, computed at the Commitment
          Fee
          Rate on the average daily amount of the lesser of (i) the Available Commitment
          of such Lender and (ii) the Borrowing Base Availability with respect to
          such
          Lender, during the period for which payment is made, payable quarterly
          in
          arrears on the last day of each March, June, September and December (subject
          to
          Section 4.8) (commencing on September 30, 2005) and on the Termination
          Date
          or such earlier date as the Commitments shall terminate as provided herein,
          commencing on the first of such dates to occur after the date hereof. Commitment
          fees shall be nonrefundable when paid unless payment was made in
          error.

         

        (a) The
          Borrowers shall
          pay to the Administrative Agent the fees set forth in the Fee
          Letter.

         

        (b) The
          Borrowers shall
          pay to the Lenders such additional fees as may be agreed to by the Borrowers
          and
          the Lenders.

         

        4.7. Inability
          to
          Determine Interest Rate

         

        .
          If prior to the
          first day of any Interest Period:

         

        (a) the
          Administrative
          Agent shall have determined (which determination shall be conclusive and
          binding
          upon the Borrowers) that, by reason of circumstances affecting the relevant
          market, adequate and reasonable means do not exist for ascertaining the
          Eurodollar Rate for such Interest Period, or

         

        (b) the
          Administrative
          Agent shall have received notice from the Required Lenders that the Eurodollar
          Rate determined or to be determined for such Interest Period will not adequately
          and fairly reflect the cost to such Lenders (as conclusively certified
          by such
          Lenders) of making or maintaining their affected Loans during such Interest
          Period,

         

        the
          Administrative
          Agent shall give telecopy or telephonic notice thereof to the Borrowers
          and the
          Lenders as soon as practicable thereafter. If such notice is given (x)
          any
          Eurodollar Loans requested to be made on the first day of such Interest
          Period
          shall be made as ABR Loans, (y) any Loans that were to have been converted
          on
          the first day of such Interest Period to Eurodollar Loans shall be continued
          as
          ABR Loans and (z) any outstanding Eurodollar Loans shall be converted,
          on the
          first day of such Interest Period, to ABR Loans. Until such notice has
          been
          withdrawn by the Administrative Agent, no further Eurodollar Loans shall
          be made
          or continued as such, nor shall the Borrower have the right to convert
          Loans to
          Eurodollar Loans.

         

        4.8. Pro
          Rata Treatment
          and Payments

         

        .
          (a) Each
          borrowing by the Borrowers from the Lenders hereunder, each payment by
          the
          Borrowers on account of any commitment fee hereunder and any reduction
          of the
          Commitments of the Lenders shall be made pro rata according to the respective
          Commitment Percentages of the Lenders. Each payment (including each prepayment)
          by the Borrowers on account of principal of and interest on the Loans shall
          be
          made pro rata according to the respective outstanding principal amounts
          of the
          Loans then held by the Lenders. All payments (including prepayments) to
          be made
          by the Borrowers hereunder, whether on account of principal, interest,
          fees or
          otherwise, shall be made without set off or counterclaim and shall be made
          prior
          to 12:00 Noon, New York City time, on the due date thereof to the Administrative
          Agent, for the account of the Lenders, at the Administrative Agent’s office
          specified in subsection 11.2, in Dollars and in immediately available funds.
          The
          Administrative Agent shall distribute such payments to the Lenders promptly
          upon
          receipt in like funds as received. If any payment hereunder becomes due
          and
          payable on a day other than a Business Day, such payment shall be extended
          to
          the next succeeding Business Day, and, with respect to payments of principal,
          interest thereon shall be payable at the then applicable rate during such
          extension.

         

        (a) Unless
          the
          Administrative Agent shall have been notified in writing by any Lender
          prior to
          a borrowing that such Lender will not make the amount that would constitute
          its
          Commitment Percentage of such borrowing available to the Administrative
          Agent,
          the Administrative Agent may assume that such Lender is making such amount
          available to the Administrative Agent, and the Administrative Agent may,
          in
          reliance upon such assumption, make available to the Borrowers a corresponding
          amount. If such amount is not made available to the Administrative Agent
          by the
          required time on the Borrowing Date therefor, such Lender shall pay to
          the
          Administrative Agent, on demand, such amount with interest thereon at a
          rate
          equal to the daily average Federal Funds Effective Rate for the period
          until
          such Lender makes such amount immediately available to the Administrative
          Agent.
          A certificate of the Administrative Agent submitted to any Lender with
          respect
          to any amounts owing under this subsection shall be conclusive in the absence
          of
          manifest error. If such Lender’s Commitment Percentage of such borrowing is not
          made available to the Administrative Agent by such Lender within three
          Business
          Days after such Borrowing Date, the Administrative Agent shall also be
          entitled
          to recover such amount with interest thereon at the rate per annum applicable
          to
          ABR Loans hereunder, on demand, from the Borrower.

         

        4.9. Computation
          of
          Borrowing Base

         

        .
          (a) Borrowing
          Base.
          The Borrowing
          Base in effect from time to time shall represent the maximum principal
          amount
          (subject to the aggregate amount of the Commitments) of Loans and Letter
          of
          Credit Outstandings that the Lenders will allow to remain outstanding during
          the
          Commitment Period. The Borrowing Base will be determined by the Technical
          Banks
          in their sole discretion based upon the total assets, cashflow and liabilities
          of the Borrowers and upon the value of Proved Reserves attributable to
          the
          Borrowing Base Properties of the Borrowers by the Technical Banks in their
          sole
          discretion, and will be determined by the Technical Banks in accordance
          with
          paragraph (d) of this subsection 4.9, subject to approval by Required Lenders
          or
          all of the Lenders, as the case may be. Until the Commitments are no longer
          in
          effect, all Letters of Credit have terminated and all of the Loans and
          all other
          obligations under this Agreement are paid in full, this Agreement shall
          be
          subject to the then effective Borrowing Base.

         

        (a) Reserve
          Reports.
          The Borrowers’
          Representative shall, at its own expense, furnish to the Administrative
          Agent
          and each Lender (i) prior to March 31 of each year, a Reserve
          Report
          prepared by the Independent Engineer, dated no earlier than the immediately
          preceding December 31, (ii) prior to September 30 of each
          year, a
          Reserve Report prepared by the engineers employed by the Borrowers dated
          no
          earlier than the immediately preceding June 30 and (iii) within
          30 days
          following the delivery of a Borrower Redetermination Notice or a Lender
          Redetermination Notice, a Reserve Report prepared by the engineers employed
          by
          the Borrowers and, if requested by the Required Lenders or the Administrative
          Agent, within 90 days following the delivery of such notice a Reserve Report
          prepared by the engineers employed by the Borrowers and audited by the
          Independent Engineer, in each case certified by a Responsible Officer of
          the
          Borrower’s Representative. If the Borrowers fail to deliver a Reserve Report
          within the time period provided for, then the Administrative Agent and
          the
          Lenders shall have the right to rely on the last Reserve Report previously
          delivered by the Borrowers with any such adjustments and taking into account
          any
          additional information as the Technical Banks may deem appropriate in their
          sole
          discretion. Concurrently with the delivery of the Reserve Reports, the
          Borrowers
          shall furnish to the Administrative Agent and each Lender a certificate
          of a
          Responsible Officer showing any material additions to or material deletions
          from
          the Oil and Gas Properties and the Borrowing Base Properties listed in
          the
          Reserve Report, which additions or deletions were made by the Borrowers
          since
          the date of the previous Reserve Report.

         

        (b) Redetermination
          of the Borrowing Base.
          The Technical
          Banks shall redetermine the Borrowing Base in their sole discretion, and
          the
          Administrative Agent shall notify the Borrowers’ Representative and the Lenders
          of the Technical Banks’ redetermination of the Borrowing Base (i) with respect
          to regularly scheduled Reserve Reports, (A) on or before April 30 (in the
          case
          of Reserve Reports due on March 31) and (B) on or before October 31 (in
          the case
          of Reserve Reports due on September 30), and (ii) with respect to a Lender
          Redetermination Notice or a Borrower Redetermination Notice as promptly
          as
          practicable following delivery to the Administrative Agent of all information
          (including Reserve Reports) requested from the Borrowers, or if no such
          information is delivered by Borrowers following such request, then at such
          time
          as the Administrative Agent determines is practicable but, in any case,
          no later
          than 60 days after delivery of such information or Redetermination Request,
          as
          applicable. Within 15 Business Days after receipt from the Administrative
          Agent
          of the amount of a redetermination of the Borrowing Base, each Lender shall
          notify the Administrative Agent in writing stating whether or not such
          Lender
          agrees with that redetermination. Failure of any Lender to give such notice
          within such period of time shall not be deemed to constitute an acceptance
          of
          such redetermination. The Borrowing Base may be decreased from the then
          effective Borrowing Base with the consent of Required Lenders but may only
          be
          increased from the then effective Borrowing Base with the consent of all
          of the
          Lenders. If Required Lenders or all of the Lenders, as the case may be,
          agree
          with that redetermination, then the Administrative Agent promptly shall
          notify
          the Borrowers’ Representative of the Borrowing Base as so redetermined.
          Redeterminations made in connection with regularly scheduled Reserve Reports
          shall become effective (and shall remain effective until the Borrowing
          Base is
          again redetermined as provided in this subsection (c)) on May 15
          (in the
          case of Reserve Reports due on March 31) and November 15 (in the
          case of
          Reserve Reports due on September 30), and other redeterminations shall
          become
          effective upon written notice from the Adminstrative Agent to the Borrowers’
          Representative and the Lenders of the redetermined Borrowing Base. If Required
          Lenders or all of the Lenders, as the case may be, have not approved in
          writing
          the Borrowing Base within the 15 Business Day period following their receipt
          of
          the proposed amount from the Administrative Agent, the Borrowing Base shall
          be
          set at the amount of the then current Borrowing Base and the Borrowing
          Base
          shall remain at such level until Required Lenders or all of the Lenders,
          as the
          case may be, utilizing the procedure outlined herein, agree on a new Borrowing
          Base and the Administrative Agent shall give notice thereof to the Borrowers.
          Each redetermination provided for by this subsection 4.9(c) shall be made
          in
          accordance with the provisions of subsection 4.9(d).

         

        (c) Criteria.
          All
          determinations and redeterminations by the Technical Banks provided for
          in this
          subsection 4.9 (and any determinations and decisions by either or both
          of the
          Technical Banks and Required Lenders or all of the Lenders, as the case
          may be,
          in connection therewith, including effecting any redetermination of the
          value of
          any component contained in a Reserve Report) shall be made by the Technical
          Banks and the Lenders in their sole discretion based upon the application
          by the
          Technical Banks and the Lenders of their respective oil and gas lending
          criteria
          as they customarily used at the time of determination in assigning collateral
          value to oil and gas properties for similarly situated customers of the
          Administrative Agent and the Lenders.

         

        (d) Subordinated
          Indebtedness.
          At least thirty
          (30) days prior to the incurrence of Subordinated Indebtedness, the Borrower
          which proposes to incur such Subordinated Indebtedness shall so notify
          the
          Administrative Agent. Following the receipt of such notice the Required
          Banks
          shall have the right to serve a Lender Redetermination Notice on the Borrowers’
          Representative, which Lender Redetermination Notice shall not count towards
          the
          maximum number of such Notices which the Required Lenders may otherwise
          serve
          between Scheduled Redetermination Dates.

         

        (e) Mandatory
          Reductions.
          If, following the
          Disposition of any Borrowing Base Property pursuant to Section 8.6(d),
          the
          Collateral Coverage Ratio is less than 1.5 to 1.0, the Borrowing Base shall
          automatically be reduced by the amount of the PV-10 Value of such Properties,
          unless such Borrowing Base Property is contemporaneously replaced by a
          Borrower
          with substitute Borrowing Base Property of at least equal PV-10 Value or,
          pending delivery of such Borrowing Base Property, with Cash Collateral
          equal to
          or greater than such PV-10 Value.

         

        (f) Initial
          Borrowing Base.
          The initial
          Borrowing Base hereunder shall be $500,000,000.00.

         

        4.10. Mandatory
          Prepayments

         

        .

         

        (a) Borrowing
          Base
          Deficiency.
          Upon the
          occurrence of a Borrowing Base Deficiency, the Administrative Agent shall
          notify
          the Borrowers’ Representative of such Borrowing Base Deficiency. Within ten (10)
          days from and after the Borrowing Base Deficiency Notification Date, the
          Borrowers’ Representative shall notify the Administrative Agent that it shall,
          at its election, take one of the following actions:

         

        (i) Execute
          and deliver
          to the Administrative Agent supplemental or additional Security Documents,
          in
          form and substance reasonably satisfactory to the Administrative Agent
          and its
          counsel, securing payment of the Notes and the other Obligations and covering
          additional Hydrocarbon Interests directly owned by any Borrower or which
          are not
          then designated as Borrowing Base Properties and which are of a type and
          nature,
          and having a value (determined by the Administrative Agent in its sole
          discretion using the standards applicable to a Borrowing Base redetermination),
          in addition to other Borrowing Base Properties reasonably satisfactory
          to the
          Administrative Agent and the Required Lenders, sufficient to eliminate
          the
          Borrowing Base Deficiency;

         

        (ii) Make
          a payment with
          respect to the Obligations (which shall be applied, or held for application,
          as
          the case may be, by the Administrative Agent to the payment of the aggregate
          unpaid principal amount of those Loans then outstanding and then Letter
          of
          Credit Outstandings) in an aggregate principal amount sufficient to eliminate
          such Borrowing Base Deficiency within thirty (30) days after the Borrowing
          Base
          Deficiency Notification Date;

         

        (iii) Execute
          and deliver
          additional Security Documents, as provided in clause (i) above, sufficient
          to
          eliminate a portion of the Borrowing Base Deficiency and make a payment
          as
          provided in clause (ii) above in an aggregate principal amount sufficient
          to
          eliminate the balance of the Borrowing Base Deficiency; or

         

        (iv) Make
          six (6)
          consecutive prepayments of principal of the outstanding Loans, each of
          which
          shall be in an amount equal to 1/6th of the amount of the Borrowing Base
          Deficiency, commencing on the first Monthly Date following delivery of
          the
          notice of Borrower’s election, and continuing on each Monthly Date thereafter
          until such Deficiency has been eliminated by such prepayments, addition
          of
          properties to the Borrowing Base Properties or a combination of the foregoing.
          

         

        (b) Security
          Documents.
          If the Borrowers’
          Representative shall elect to execute and deliver supplemental or additional
          Security Documents to the Administrative Agent pursuant to
          Section 4.10(a)(i) or (a)(iii) above, it shall provide the Administrative
          Agent and each Lender with descriptions of the additional assets to be
          collaterally assigned (together with current valuations satisfactory to
          the
          Technical Banks or engineering reports as to the new Properties, Security
          Documents, and, if necessary to comply with the Continuing 70% Test, title
          evidence applicable thereto, each of which shall be in form and substance
          reasonably satisfactory to the Administrative Agent), within twenty (20)
          days
          after the Borrowing Base Deficiency Notification Date, except that title
          evidence may be furnished within ninety (90) days after such Date. If the
          Borrower’s Representative fails to take any of the actions described above
          within the relevant period, then without any necessity for notice to the
          Borrowers or any other person, the Borrowers shall become obligated to
          pay
          Obligations in an aggregate principal amount equal to the applicable Borrowing
          Base Deficiency within three (3) days after the Borrowing Base Deficiency
          Notification Date.

         

        (c) Collateral
          Value
          Deficiency.
          If at any time
          the Collateral Coverage Ratio is less than 1.5 to 1.0 (the “Collateral
          Deficiency Date”),
          the Borrowers’
          Representative shall either:

         

        (i) Give
          notice to the
          Administrative Agent that the Borrowers elect to make a payment with respect
          to
          the Obligations (which shall be applied, or held for application, as the
          case
          may be, by the Administrative Agent to the payment of the aggregate unpaid
          principal amount of those Loans then outstanding and then Letter of Credit
          Outstandings) in an aggregate principal amount necessary to comply with
          the
          Collateral Coverage Ratio at such time whereupon the Commitments shall
          be so
          reduced with immediate effect and the Borrowers shall make such prepayment
          on or
          before the date that is thirty (30) days after the related Collateral Deficiency
          Date;

         

        (ii) Certify
          to the
          Administrative Agent that the Borrowers have good and defensible title,
          free of
          any Liens other than Permitted Liens, to Proved Reserves in an amount which,
          if
          subject to one or more Mortgages, would result in the Borrowers being in
          compliance with such Collateral Coverage Ratio. Within ten (10) days after
          such
          certification, the Technical Banks shall either (x) determine that such
          properties, if subject to a Mortgage, would result in the Borrowers being
          in
          compliance with such Collateral Coverage Ratio, in which case, the Borrowers
          shall within twenty (20) days of such certification, and in any event,
          no later
          than within thirty (30) days of the Collateral Deficiency Date, deliver
          a
          Mortgage (or a satisfactory amendment to an existing Mortgage) to the
          Administrative Agent with respect to each of such properties, executed
          and
          delivered by a duly authorized officer of each party thereto and accompanied
          by
          such other documentation as the Administrative Agent shall reasonably request
          (including, without limitation, legal opinions in form and substance
          satisfactory to the Administrative Agent relating thereto), or (y) determine
          that such properties, if subject to a Mortgage, would not result in the
          Borrowers being in compliance with such Collateral Coverage Ratio, in which
          case, the Borrowers shall make the prepayments specified in subsection
          (i) of
          this Section 4.10(c) within thirty (30) days of the Collateral Deficiency
          Date;

         

        (iii) Effect
          a reduction
          of the Commitments pursuant to Section 4.5;

         

        (iv) Pending
          delivery of
          the Mortgages, provide Cash Collateral if sufficient to eliminate the Collateral
          Value Deficiency; or

         

        (v) Any
          combination of
          the actions referred to in clauses (i) - (iv) the effect of which in combination
          is to restore the Collateral Coverage Ratio to not less than 1.5 to
          1.0.

         

        4.11. Illegality

         

        .
          Notwithstanding
          any other provision herein, if the adoption of or any change in any Requirement
          of Law or in the interpretation or application thereof after the date hereof
          shall make it unlawful for any Lender to make or maintain Eurodollar Loans
          as
          contemplated by this Agreement (a) the commitment of such Lender hereunder
          to
          make Eurodollar Loans, continue Eurodollar Loans as such and convert ABR
          Loans
          to Eurodollar Loans shall forthwith be canceled and (b) such Lender’s Loans then
          outstanding as Eurodollar Loans, if any, shall be converted automatically
          to ABR
          Loans on the respective last days of the then current Interest Periods
          with
          respect to such Loans or within such earlier period as required by law.
          If any
          such conversion of a Eurodollar Loan occurs on a day which is not the last
          day
          of the then current Interest Period with respect thereto, the Borrower
          shall pay
          to such Lender such amounts, if any, as may be required pursuant to subsection
          4.14.

         

        4.12. Requirements
          of
          Law

         

        .
          (a) If the
          adoption of or any change in any Requirement of Law or in the interpretation
          or
          application thereof after the date hereof or compliance by any Lender with
          any
          request or directive (whether or not having the force of law) from any
          central
          bank or other Governmental Authority made subsequent to the date
          hereof:

         

        (i) shall
          subject any
          Lender to any tax of any kind whatsoever with respect to this Agreement,
          any
          Note, any Letter of Credit, any L/C Application or any Eurodollar Loan
          made by
          it, or change the basis of taxation of payments to such Lender in respect
          thereof (except for Non-Excluded Taxes covered by subsection 4.13, changes
          in
          the rate or computation of tax on the overall net income of such Lender,
          franchise taxes imposed in lieu of net income taxes and doing business
          taxes);

         

        (ii) shall
          impose,
          modify or hold applicable any reserve, special deposit, compulsory loan
          or
          similar requirement against assets held by, deposits or other liabilities
          in or
          for the account of, advances, loans or other extensions of credit by, or
          any
          other acquisition of funds by, any office of such Lender which is not otherwise
          included in the determination of the Eurodollar Rate hereunder, or

         

        (iii) shall
          impose on
          such Lender any other condition;

         

        and
          the result of
          any of the foregoing is to increase the cost to such Lender, by an amount
          which
          such Lender deems to be material, of making, converting into, continuing
          or
          maintaining Eurodollar Loans or issuing or participating in Letters of
          Credit or
          to reduce any amount receivable hereunder in respect thereof, then, in
          any such
          case, the Borrowers shall promptly pay such Lender such additional amount
          or
          amounts as will compensate such Lender for such increased cost or reduced
          amount
          receivable.

         

        (b) If
          any Lender shall
          have determined that the adoption of or any change in any Requirement of
          Law
          regarding capital adequacy or in the interpretation or application thereof
          or
          compliance by such Lender or any corporation controlling such Lender with
          any
          request or directive regarding capital adequacy (whether or not having
          the force
          of law) from any Governmental Authority made subsequent to the date hereof
          shall
          have the effect of reducing the rate of return on such Lender’s or such
          corporation’s capital as a consequence of its obligations hereunder or under any
          Letter of Credit to a level below that which such Lender or such corporation
          could have achieved but for such adoption, change or compliance (taking
          into
          consideration such Lender’s or such corporation’s policies with respect to
          capital adequacy) by an amount deemed by such Lender to be material, then
          from
          time to time, the Borrowers shall promptly pay to such Lender such additional
          amount or amounts as will compensate such Lender for such
          reduction.

         

        (c) If
          any Lender
          becomes entitled to claim any additional amounts pursuant to this subsection,
          it
          shall promptly notify the Borrowers’ Representative (with a copy to the
          Administrative Agent) of the event by reason of which it has become so
          entitled.
          A certificate as to any additional amounts payable pursuant to this subsection
          submitted by such Lender to the Borrowers’ Representative (with a copy to the
          Administrative Agent) shall be conclusive in the absence of manifest error.
          The
          agreements in this subsection shall survive the termination of this Agreement
          and the payment of the Loans and all other amounts payable
          hereunder.

         

        4.13. Taxes

         

        .
          (a) All payments
          made by the Borrowers under this Agreement and any Notes shall be made
          free and
          clear of, and without deduction or withholding for or on account of, any
          present
          or future income, stamp or other taxes, levies, imposts, duties, charges,
          fees,
          deductions or withholdings, now or hereafter imposed, levied, collected,
          withheld or assessed by any Governmental Authority, excluding net income
          taxes,
          franchise taxes (imposed in lieu of net income taxes) and doing business
          taxes
          imposed on the Administrative Agent or any Lender as a result of a present
          or
          former connection between the Administrative Agent or such Lender and the
          jurisdiction of the Governmental Authority imposing such tax or any political
          subdivision or taxing authority thereof or therein (other than any such
          connection arising solely from the Administrative Agent or such Lender
          having
          executed, delivered or performed its obligations or received a payment
          under, or
          enforced, this Agreement or any Note). If any such non-excluded taxes,
          levies,
          imposts, duties, charges, fees deductions or withholdings (“Non-Excluded
          Taxes”)
          are required to
          be withheld from any amounts payable to the Administrative Agent or any
          Lender
          hereunder or under any Note, the amounts so payable to the Administrative
          Agent
          or such Lender shall be increased to the extent necessary to yield to the
          Administrative Agent or such Lender (after payment of all Non-Excluded
          Taxes)
          interest or any such other amounts payable hereunder at the rates or in
          the
          amounts specified in this Agreement, provided, however, that the Borrowers
          shall
          not be required to increase any such amounts payable to any Non-U.S. Lender
          if
          such Non-U.S. Lender fails to comply with the requirements of paragraph
          (b) of
          this subsection. Whenever any Non-Excluded Taxes are payable by the Borrowers,
          as promptly as possible thereafter the Borrowers shall send to the
          Administrative Agent for their own account or for the account of such Lender,
          as
          the case may be, a certified copy of an original official receipt received
          by
          the Borrower showing payment thereof. If, when the Borrowers are required
          by
          this subsection 4.13(a) to pay any Non-Excluded Taxes, the Borrowers fail
          to pay
          any Non-Excluded Taxes when due to the appropriate taxing authority or
          fails to
          remit to the Administrative Agent the required receipts or other required
          documentary evidence, the Borrowers shall indemnify the Administrative
          Agent and
          the Lenders for any incremental taxes, interest or penalties that may become
          payable by the Administrative Agent or any Lender as a result of any such
          failure. The agreements in this subsection shall survive the termination
          of this
          Agreement and the payment of the Loans and all other amounts payable
          hereunder.

         

        (a) Each
          Lender (or
          Transferee) that is not a citizen or resident of the United States of America,
          a
          corporation, partnership or other entity created or organized in or under
          the
          laws of the United States of America, or any estate or trust that is subject
          to
          federal income taxation regardless of the source of its income (a “Non-U.S.
          Lender”)
          shall deliver to
          the Borrowers’ Representative and the Administrative Agent (or, in the case of a
          Participant, to the Lender from which the related participation shall have
          been
          purchased) two copies of either U.S. Internal Revenue Service form W-8BEN,
          Form
          W-8ECI or successors forms, and is otherwise exempt from IRS interest
          withholding obligations, or, in the case of a Non-U.S. Lender claiming
          exemption
          from U.S. federal withholding tax under Section 871(h) or 881(c) of the
          Code
          with respect to payments of “portfolio interest,” a Form W-8, or any subsequent
          versions thereof or successors thereto (and, if such Non-U.S. Lender delivers
          a
          Form W-8, an annual certificate representing that such Non-U.S. Lender
          (i) is
          not a “bank” for purposes of Section 881(c) of the Code (and is not subject to
          regulatory or other legal requirements as a bank in any jurisdiction, and
          has
          not been treated as a bank in any filing with or submission made to any
          Governmental Authority or rating agency), (ii) is not a 10% shareholder
          (within
          the meaning of Section 871 (h)(3 )(B) of the Code) of the Borrowers and
          (iii) is
          not a controlled foreign corporation related to the Borrowers (within the
          meaning of Section 864(d)(4) of the Code)), properly completed and duly
          executed
          by such Non-U.S. Lender claiming complete exemption from U.S. federal
          withholding tax on all payments by the Borrowers under this Agreement and
          the
          other Loan Documents, along with such other additional forms as the Borrowers,
          the Administrative Agent (or, in the case of a Participant, the Lender
          from
          which the related participation shall have been purchased) may reasonably
          request to establish the availability of such exemption. Such forms shall
          be
          delivered by each Non-U.S. Lender on or before the date it becomes a party
          to
          this Agreement (or, in the case of any Participant, on or before the date
          such
          Participant purchases the related participation), and if a Person cannot
          deliver
          such forms because such Person is not exempt from U.S. federal withholding
          tax
          under the Code as described above, then such Person shall not become a
          Lender or
          Transferee hereunder or a party hereto.

         

        4.14. Indemnity

         

        .
          The Borrowers
          agree to indemnify each Lender and to hold each Lender harmless from any
          loss or
          expense which such Lender may sustain or incur (other than through such
          Lender’s
          gross negligence or willful misconduct) as a consequence of (a) default
          by the
          Borrowers in making a borrowing of, conversion into or continuation of
          Eurodollar Loans after the Borrowers’ Representative has given a notice
          requesting the same in accordance with the provisions of this Agreement,
          (b)
          default by the Borrowers in making any prepayment of a Eurodollar Loan
          after the
          Borrowers’ Representative has given a notice thereof in accordance with the
          provisions of this Agreement or (c) the making of a prepayment of or a
          conversion of Eurodollar Loans on a day which is not the last day of an
          Interest
          Period with respect thereto. Such indemnification may include an amount
          equal to
          the excess, if any, of (i) the amount of interest which would have accrued
          on
          the amount so prepaid, or converted, or not so borrowed, converted or continued,
          for the period from the date of such prepayment or conversion or of such
          failure
          to borrow, convert or continue to the last day of the applicable Interest
          Period
          (or, in the case of a failure to borrow, convert or continue, the Interest
          Period that would have commenced on the date of such failure) in each case
          at
          the applicable rate of interest for such Eurodollar Loans provided for
          herein
          (excluding, however, the percentage added to the Eurodollar Rate pursuant
          to
          subsection 4.1, (a) to the extent included therein) over (ii) the amount
          of
          interest (as reasonably determined by such Lender) which would have accrued
          to
          such Lender on such amount by placing such amount on deposit for a comparable
          period with leading banks in the interbank eurodollar market. This covenant
          shall survive the termination of this Agreement and the payment of the
          Loans and
          all other amounts payable hereunder.

         

        4.15. Change
          of Lending
          Office

         

        .
          (a) Each Lender
          agrees that if it makes any demand for payment under subsection 4.12 or
          4.13(a),
          or if any adoption or change of the type described in subsection 4.11 shall
          occur with respect to it, it will use reasonable efforts (consistent with
          its
          internal policy and legal and regulatory restrictions and so long as such
          efforts would not be disadvantageous to it, as determined in its sole
          discretion) to designate a different lending office if the making of such
          a
          designation would reduce or obviate the need for the Borrowers to make
          payments
          under subsection 4.12 or 4.13(a), or would eliminate or reduce the effect
          of any
          adoption or change described in subsection 4.11.

         

        (a) If
          any Lender
          requests compensation under subsection 4.12, or if the Borrowers are required
          to
          pay any additional amount to any Lender or any Governmental Authority for
          the
          account of any Lender pursuant to subsection 4.13, or if any Lender defaults
          in
          its obligation to fund Loans hereunder, then the Borrowers may, at their
          expense
          and effort, upon notice to such Lender and the Administrative Agent, require
          such Lender to, and such Lender promptly shall, assign and delegate, without
          recourse (in accordance with and subject to the restrictions contained
          in
          subsection 11.6), all its interests, rights and obligations under this
          Agreement
          to an assignee that shall assume such obligations (which assignee may be
          another
          Lender, if a Lender accepts such assignment); provided that (i) if such
          assignee
          is not a Lender or an Affiliate thereof, the Borrowers shall have received
          the
          prior written consents of the Administrative Agent and Issuing Lender which
          consents shall not unreasonably be withheld, (ii) such Lender shall have
          received payment of an amount equal to the outstanding principal of its
          Loans
          and participations in Letters of Credit, accrued interest thereon, accrued
          fees
          and all other amounts payable to it hereunder, from the assignee (at least
          to
          the extent of such outstanding principal) and the Borrowers (in the case
          of all
          other amounts) and (iii) in the case of any such assignment resulting from
          a
          claim for compensation under subsection 4.12 or payments required to be
          made
          pursuant to subsection 4.13, such assignment will result in a reduction
          in such
          compensation or payments compared to the compensation or payments payable
          to the
          assigning Lender, A Lender shall not be required to make any such assignment
          and
          delegation if, prior thereto, as a result of a waiver by such Lender or
          otherwise, the circumstances entitling the Borrowers to require such assignment
          and delegation no longer exist or cease to apply.

         

        4.16. Collateral
          Security

         

        .

         

        (a) Closing
          Date.
          To secure the
          performance by the Borrowers of the Obligations hereunder and under the
          Notes,
          the Security Documents and any Hedging Agreement, whether now or hereafter
          incurred, matured or unmatured, direct or contingent, including extensions,
          modifications, renewals and increases thereof, and substitutions therefore,
          the
          Borrowers shall, as of the Closing Date, have, pursuant to the Mortgages
          granted
          and assigned to the Administrative Agent, for the ratable benefit of the
          Secured
          Parties, a first priority Lien, subject only to Permitted Liens, on Borrowing
          Base Properties.

         

        (b) Subsequently
          Acquired Property.
          If the Borrowers
          shall, following the Closing Date, acquire additional Oil and Gas Properties
          that are proposed to be Borrowing Base Properties, the Borrowers shall
          grant
          security interests and mortgage Liens to the Administrative Agent, for
          the
          ratable benefit of the Secured Parties, in and on any such property to
          the
          extent provided in Section 7.9 hereof.

         

        (c) Form
          of Security
          Documents.
          The granting and
          assigning of such security interests and Liens by the Borrowers shall be
          pursuant to the Security Documents in form and substance reasonably satisfactory
          to the Administrative Agent.

         

        (d) Title
          Work.
          As of the Closing
          Date, the Borrowers shall have furnished to the Administrative Agent title
          documents reasonably satisfactory to the Administrative Agent with respect
          to
          the title and Lien status of at least 50% of the PV-10 Value of the Borrowing
          Base Properties, and within 120 days after the Closing Date, 70% of the
          PV-10
          Value of the Borrowing Base Properties. The Borrower shall furnish to the
          Administrative Agent title documents reasonably satisfactory to the
          Administrative Agent with respect to the title and Lien status of a sufficient
          number of Properties so that the Administrative Agent shall at all times
          have
          title documents with respect to at least 70% of the PV-10 Value of the
          Borrowing
          Base Properties of the Borrowers (the “Continuing
          70%
          Test”).
          If at any time
          after the Closing Date, the Borrowers fail to provide title documents reasonably
          satisfactory to the Administrative Agent for a sufficient number of Borrowing
          Base Properties to meet the Continuing 70% Test, such failure shall not
          constitute an Event of Default, but the Administrative Agent may redetermine
          the
          Borrowing Base by written notice to the Borrowers’ Representative as required to
          bring the Borrowers into compliance with the Continuing 70% Test until
          such
          title documents are provided. Without regard to whether the Borrowers provide
          satisfactory title documents with respect to a particular Oil and Gas Property
          owned by such Person, such Oil and Gas Property shall, if necessary to
          meet the
          requirements of Section 7.9 hereof, be encumbered by a Mortgage in favor
          of the
          Administrative Agent for the ratable behalf of the Secured Parties, and
          shall be
          included in the collateral.

         

        (e) Security
          for
          Hedge Parties.
          The
          Administrative Agent and the Lenders agree that upon execution and delivery
          of a
          Hedging Agreement by a Hedge Party, such Hedge Party shall possess a pari
          passu
          Lien in the collateral provided in the Security Documents and the cash
          proceeds
          therefrom as security for the obligations of the Borrowers under such Hedging
          Agreement.

         

        (f) Substitution
          of
          Collateral.
          The Borrowers
          shall have the right, subject to the consent of the Technical Banks, such
          consent not to be unreasonably withheld, to substitute Oil and Gas Properties
          of
          a Borrower for Oil and Gas Properties subject to a Mortgage, or, pending
          delivery of the Mortgage on such Properties, to substitute Cash Collateral
          for
          such Properties, provided that:

         

        (i) The
          Borrower’s
          Representative provides notice of substitution to the Administrative Agent
          fifteen (15) days prior to the proposed substitution date;

         

        (ii) Neither
          an Event of
          Default nor a Borrowing Base Deficiency exists on the proposed substitution
          date;

         

        (iii) The
          Oil and Gas
          Properties proposed to be substituted for the Oil and Gas Properties subject
          to
          a Mortgage are of a type and nature similar to the Oil and Gas Properties
          subject to a Mortgage;

         

        (iv) The
          substitution of
          the Oil and Gas Properties will not result in a decrease in the Borrowing
          Base
          as determined by the Technical Banks in their sole discretion;

         

        (v) The
          substitution of
          the Oil and Gas Properties will not result in the Collateral Coverage Ratio
          being less than 1.5 to 1; and

         

        (vi) The
          Borrower
          provides the supplemental or additional Security Documents referred to
          in
          Section 4.10(b) hereof.

         

        If
          the Oil and Gas
          Properties being substituted have a value in excess of 10% of the PV-10
          Value of
          the Borrowing Base Properties at such time, the Borrowing Base shall be
          redetermined prior to the date of such substitution in accordance with
          the
          procedures set forth in subsection 4.9 which would have applied had a Borrower
          Redetermination Notice or a Lender Redetermination Notice been
          delivered.

         

        (g) If
          the conditions
          set forth in Section 4.16(f) have been satisfied, then upon request by
          EPPHC,
          the Administrative Agent will release its lien on any Borrowing Base Property
          being exchanged for other Borrowing Base Property pursuant to
          Section 4.16(f).

         

        4.17. Replacement
          of
          Lenders

         

        .
          If (i) any Lender
          requests compensation under Section 4.12, or (ii) if any Borrower is required
          to
          pay any additional amount to any Lender or any Governmental Authority for
          the
          account of any Lender pursuant to Section 4.13, or (iii) if any Lender
          defaults
          in its obligation to fund Loans hereunder or (iv) any Lender refuses to
          grant
          its approval with respect to any matter requiring the approval of all Lenders
          and such matter shall have been approved by Lenders having Commitments
          in excess
          of 66-2/3% of the aggregate Commitments, then the Borrowers’ Representative may,
          at its sole expense and effort, upon notice to such Lender and the
          Administrative Agent, require such Lender to assign and delegate, without
          recourse (in accordance with and subject to the restrictions contained
          in
          Section 11.6), all its interests, rights and obligations under this Agreement
          to
          an assignee identified by the Borrowers’ Representative that shall assume such
          obligations (which assignee may be another Lender, if a Lender accepts
          such
          assignment); provided that (1) the Borrowers’ Representative shall have received
          the prior written consent of the Administrative Agent, which consent shall
          not
          unreasonably be withheld, (2) such Lender shall have received payment of
          an
          amount equal to the outstanding principal of its Loans, accrued interest
          thereon, accrued fees and all other amounts payable to it hereunder, from
          the
          assignee (to the extent of such outstanding principal and accrued interest
          and
          fees) or the Borrowers (in the case of all other amounts) and (3) in the
          case of
          any such assignment resulting from a claim for compensation under Section
          4.12
          or payments required to be made pursuant to Section 4.13, such assignment
          will
          result in a reduction in such compensation or payments. A Lender shall
          not be
          required to make any such assignment and delegation if, prior thereto,
          as a
          result of a waiver by such Lender or otherwise, the circumstances entitling
          the
          Borrowers’ Representative to require such assignment and delegation cease to
          apply.

         

        SECTION
          5

         

        REPRESENTATIONS
          AND WARRANTIES

         

        To
          induce the
          Administrative Agent and the Lenders to enter into this Agreement and to
          make
          the Loans and issue or participate in the Letters of Credit, each Borrower
          hereby represents and warrants to the Administrative Agent and each Lender
          that:

         

        5.1. Financial
          Condition

         

        .
          (a) (i) The
          audited consolidated balance sheet of EPPHC and its consolidated Subsidiaries
          at
          December 31, 2004 and the related audited consolidated statements of income,
          cash flows and stockholder’s equity for the fiscal year ended on such date,
          together with the related notes and schedules thereto, reported on by
          Pricewaterhouse Coopers LLP, and (ii) the unaudited consolidated balance
          sheet
          of EPPHC and its consolidated Subsidiaries as at March 31, 2005, and
          June 30, 2005, in each case, together with the related unaudited
          consolidated statements of income, cash flows, and stockholder’s equity for each
          of the fiscal quarters then ended, in each case copies of which have heretofore
          been furnished or made available to each Lender, present fairly in all
          material
          respects the consolidated financial position of EPPHC and its consolidated
          Subsidiaries as at such dates, and the consolidated results of their operations
          and their consolidated cash flows for the respective periods then ended,
          in
          conformity with GAAP (subject, in the case of clause (ii), to customary
          year-end audit adjustments and reduced footnote disclosure).

         

        (a) All
          such financial
          statements referred to in subsection 5.1(a), including the related schedules
          and
          notes thereto, have been prepared in accordance with GAAP applied consistently
          throughout the periods involved (except as approved by such accountants
          or
          Responsible Officer, as the case may be, and as disclosed therein). On
          the
          Closing Date, neither EPPHC nor any of its consolidated Subsidiaries have
          any
          material Guarantee Obligation, contingent liability or liability for taxes,
          or
          any long-term lease, outstanding debt or Lien other than Permitted Liens
          or
          unusual forward or long-term commitment, including, without limitation,
          any
          interest rate or foreign currency swap or exchange transaction, which is
          not
          disclosed in the financial statements referred to in subsection 5.1(a)
          or in the
          notes thereto to the extent required by GAAP.

         

        5.2. No
          Change

         

        .
          (a) Since the
          date of EPPHC’s most recent audited annual consolidated financial statements,
          there has been no development, circumstance or event which has had or could
          reasonably be expected to have a Material Adverse Effect.

         

        5.3. Corporate
          Existence; Compliance with Law

         

        .
          Each of the
          Borrowers (a) is duly organized, validly existing and in good standing
          under the
          laws of the jurisdiction of its organization, (b) has the corporate power
          and
          authority, and the legal right, to own and operate its Property, to lease
          the
          Property it operates as lessee and to conduct the business in which it
          is
          currently engaged, (c) is duly qualified as a foreign corporation and in
          good
          standing under the laws of each jurisdiction where its ownership, lease
          or
          operation of Property or the conduct of its business requires such qualification
          except to the extent that the failure to be so qualified and in good standing
          could not reasonably be expected to have, in the aggregate, a Material
          Adverse
          Effect and (d) is in compliance with all applicable Requirements of Law
          (including, without limitation, Environmental Laws) except to the extent
          that
          the failure to comply therewith could not reasonably be expected to have,
          in the
          aggregate, a Material Adverse Effect.

         

        5.4. Corporate
          Power;
          Authorization; Enforceable Obligations

         

        .
          Each Borrower has
          the corporate power and authority, and the legal right, to make, deliver
          and
          perform the Loan Documents to which it is a party and to borrow hereunder
          and
          has taken all necessary corporate action to authorize the execution, delivery
          and performance of the Loan Documents to which it is a party. No consent
          or
          authorization of, filing with, notice to or other act by or in respect
          of, any
          Governmental Authority or any other Person is required in connection with
          the
          borrowings hereunder or the delivery, performance, validity or enforceability
          of
          the Loan Documents to which any Borrower is a party other than the filings
          of
          the Mortgages and UCC-1 financing statements and those which have been
          obtained
          and are in full force and effect. This Agreement has been, and each other
          Loan
          Document to which the Borrower is a party will be, duly executed and delivered
          on behalf of any Borrower. This Agreement constitutes, and each other Loan
          Document to which any Borrower is a party when executed and delivered will
          constitute, a legal, valid and binding obligation of any Borrower enforceable
          against such Borrower in accordance with its terms, subject to the effects
          of
          bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization,
          moratorium and other similar laws relating to or affecting creditors’ rights
          generally, general equitable principles (whether considered in a proceeding
          in
          equity or at law) and an implied covenant of good faith and fair
          dealing.

         

        5.5. No
          Legal
          Bar

         

        .
          The execution,
          delivery and performance of the Loan Documents, the granting of the Liens
          under
          the Security Documents, the borrowings hereunder and the use of the proceeds
          thereof will not violate any applicable Requirement of Law or Contractual
          Obligation of the Borrower, including but not limited to Sections 4.03
          and 4.10
          of the Indenture, and will not result in, or require, the creation or imposition
          of any Lien on any of its or their respective Properties or revenues pursuant
          to
          any such Requirement of Law or Contractual Obligation, other than any Lien
          created pursuant to the Security Documents.

         

        5.6. No
          Material
          Litigation

         

        .
          No litigation,
          investigation or proceeding of or before any arbitrator or Governmental
          Authority is pending or, to the knowledge of any Borrower, threatened by
          or
          against any Borrower or against any of its respective Properties or revenues
          (a)
          with respect to any of the Loan Documents or any of the transactions
          contemplated hereby or thereby, or (b) which could reasonably be expected
          to
          have a Material Adverse Effect.

         

        5.7. No
          Default

         

        .
          No Borrower is in
          default under or with respect to any of its Contractual Obligations in
          any
          respect which could reasonably be expected to have a Material Adverse Effect.
          Each Borrower is in compliance in all material respects with each covenant
          applicable to it under the Loan Documents, and no Default or Event of Default
          has occurred and is continuing or would occur as a result of the execution
          and
          delivery of the Agreement and the Loan Documents.

         

        5.8. Ownership
          of
          Property; Liens

         

        .
          Each Loan Party
          has good and defensible title to all of its Oil and Gas Properties which
          are not
          personal property and good title to all such Oil and Gas Properties which
          are
          personal property and material to the Loan Parties taken as a whole, except
          for
          (i) such imperfections of title as do not in the aggregate materially detract
          from the value thereof to, or the use thereof in, the business of the Loan
          Parties, or, in the case of Oil and Gas Properties which are not Borrowing
          Base
          Properties, such imperfections do not have a Material Adverse Effect on
          such
          Loan Party, (ii) Oil and Gas Properties and interests therein disposed
          of since
          the date of the most recent Reserve Report as permitted by subsection 8.6
          hereof, and (iii) Permitted Liens. The Borrower specified in the Reserve
          Report
          is entitled to receive a decimal share of all Hydrocarbons produced from,
          or
          allocated to, each Borrowing Base Property equal to not less than the net
          revenue interest set forth in the most recent Reserve Report with respect
          to
          such Borrowing Base Property. There are no “back-in” or “reversionary” interests
          held by third parties which could materially reduce the interest of the
          Borrowers in such Borrowing Base Properties except as expressly set forth
          in
          such Reserve Report. The ownership of the Borrowing Base Properties by
          the
          Borrowers shall not in any material respect obligate any Borrower to bear
          the
          costs and expenses relating to the maintenance, development or operations
          of
          each such Borrowing Base Property in an amount in excess of the working
          interest
          of such Borrower in each Borrowing Base Property set forth in the most
          recent
          Reserve Report unless there is a corresponding increase in net revenue
          interest.

         

        5.9. Intellectual
          Property

         

        .
          Each Borrower
          owns, or is licensed to use, all trademarks, tradenames, copyrights, technology,
          know-how and processes necessary for the conduct of its business as currently
          conducted except for those the failure to own or license which could not
          reasonably be expected to have a Material Adverse Effect (the “Intellectual
          Property”).
          No claim has
          been asserted and is pending by any Person challenging or questioning the
          use of
          any such Intellectual Property or the validity or effectiveness of any
          such
          Intellectual Property, nor does any Borrower know of any valid basis for
          any
          such claim which could reasonably be expected to have a Material Adverse
          Effect.
          The use of such Intellectual Property by each Borrower and its Subsidiaries
          does
          not infringe on the rights of any Person, except for such claims and
          infringements that, in the aggregate, could not reasonably be expected
          to have a
          Material Adverse Effect.

         

        5.10. Taxes

         

        .
          Each Borrower has
          filed all material tax returns which, to the knowledge of such Borrower,
          are
          required to be filed by it and has paid or caused to be paid all taxes
          shown on
          said returns and all assessments, fees and other governmental charges levied
          upon it or upon any of its Property or income which are due and payable,
          other
          than such taxes, assessments, fees and other governmental charges, if any,
          as
          are being diligently contested in good faith and by appropriate proceedings
          and
          with respect to which there have been established adequate reserves on
          the books
          of the Borrower in accordance with GAAP. To the knowledge of the Borrower,
          no
          material tax lien has been filed and, no material claim is being asserted,
          with
          respect to any such taxes or assessments, fees or other governmental
          charges.

         

        5.11. Federal
          Reserve
          Regulations

         

        .
          No part of the
          proceeds of any Loans will be used for “purchasing” or “carrying” any “margin
          stock” within the respective meanings of each of the quoted terms under
          Regulation U of the Board of Governors of the Federal Reserve System as
          now and
          from time to time hereafter in effect. If requested by the Administrative
          Agent,
          the Borrowers will furnish to the Administrative Agent a statement to the
          foregoing effect in conformity with the requirements of FR Form U-1 referred
          to
          in said Regulation U. The Loans and other transactions contemplated hereunder
          will not violate the provisions of Regulations T and X.

         

        5.12. ERISA

         

        .
          Neither a
          Reportable Event nor an “accumulated funding deficiency” (within the meaning of
          Section 412 of the Code or Section 302 of ERISA) has occurred during the
          five-year period prior to the date on which this representation is made
          or
          deemed made with respect to any Single Employer Plan, and each Single Employer
          Plan has complied with the applicable provisions of ERISA and the Code,
          except
          for noncompliance which could not reasonably be expected to result in any
          material liability to the Borrowers or any Commonly Controlled Entity.
          No
          distress termination within the meaning of Section 4041(c) of ERISA or
          termination instituted by the PBGC (within the meaning of Section 4042
          of
          ERISA), of a Single Employer Plan has occurred, and no Lien in favor of
          the PBGC
          or a Plan has arisen, during such five-year period. The present value of
          all
          accrued benefits under each Single Employer Plan (based on those assumptions
          used to fund such Plans) did not, as of the last annual valuation date
          prior to
          the date on which this representation is made or deemed made, exceed the
          value
          of the assets of such Plan allocable to such accrued benefits by an amount
          that
          could reasonably be expected to result in a Material Adverse Effect. Except
          as
          set forth in Schedule 5.13, neither the Borrower nor any Commonly Controlled
          Entity has had a complete or partial withdrawal from any Multiemployer
          Plan, and
          neither the Borrower nor any Commonly Controlled Entity would become subject
          to
          any liability under ERISA if the Borrower or any such Commonly Controlled
          Entity
          were to withdraw completely from all Multiemployer Plans as of the valuation
          date most closely preceding the date on which this representation is made
          or
          deemed made. No such Multiemployer Plan is in Reorganization or is Insolvent
          that could reasonably be expected to result in a Material Adverse
          Effect.

         

        5.13. Investment
          Company
          Act; Other Regulations

         

        .
          No Borrower is
          (a) an “investment company,” or a company “controlled” by an “investment
          company,” within the meaning of the Investment Company Act of 1940, as amended,
          or (b) a “holding company” as defined in, or subject to regulation under, the
          Public Utility Holding Company Act of 1935. No Borrower is subject to regulation
          under any Federal or State statute or regulation (other than Regulation
          X of the
          Board of Governors of the Federal Reserve System) which limits its ability
          to
          incur Indebtedness.

         

        5.14. Subsidiaries

         

        .
          The Persons
          listed on Schedule 5.15 constitute all the Subsidiaries of the Borrowers
          at the
          date hereof. Such Schedule shall indicate which Subsidiaries are considered
          Restricted Subsidiaries and Domestic Restricted Subsidiaries.

         

        5.15. Purpose
          of
          Loans

         

        .
          The proceeds of
          the Loans and the Letters of Credit will be used for (a) working
          capital
          and for the general corporate purposes of the Borrowers, (b) the conduct
          by
          Borrowers of their Oil and Gas Business, including (without limiting the
          generality of the foregoing) the exploration, exploitation, development
          and
          acquisition of Oil and Gas Properties, (c) the acquisition of the
          Capital
          Stock of Medicine Bow Energy Corporation, and (d)  the payment of
          transaction expenses.

         

        5.16. Environmental
          Matters

         

        .
          Except as set
          forth on Schedule 5.16, and other than exceptions to any of the following
          that
          could not, in the aggregate, reasonably be expected to give rise to a Material
          Adverse Effect or materially adversely affect the value of the Borrowing
          Base
          Properties taken as a whole:

         

        (a) each
          Borrower: (i)
          is, and within the period of all applicable statutes of limitation has
          been in
          compliance with all applicable Environmental Laws; (ii) holds all Environmental
          Permits (each of which is in full force and effect) required for any of
          its
          current or planned operations or for any Property owned, leased, or otherwise
          operated by it; and (iii) is, and within the period of all applicable statutes
          of limitation has been, in compliance with all of its Environmental Permits;
          and
          no officer of such Borrower has knowledge of any reason why its Environmental
          Permits will not timely be renewed or any new Environmental Permits will
          not
          timely be obtained subject to the conditions and terms that may be applied
          to
          them by the relevant Governmental Authorities.

         

        (b) Materials
          of
          Environmental Concern have not been transported, disposed of, emitted,
          discharged, or otherwise released or threatened to be released, to or at
          any
          real Property presently or formerly owned, leased or operated by the Borrower
          or
          at any other location, which could reasonably be expected to (i) give rise
          to
          liability of the Borrower under any applicable Environmental Law or (ii)
          interfere with the Borrower’s continued operations.

         

        (c) no
          judicial,
          administrative, or arbitral proceeding (including any notice of violation
          or
          alleged violation) under or relating to any Environmental Law to which
          the
          Borrower is, or to the knowledge of the Borrower will be, named as a party
          is
          pending or, to the knowledge of the Borrower, threatened.

         

        (d) the
          Borrower has
          not received any written request for information, or been notified that
          it is a
          potentially responsible party under the federal Comprehensive Environmental
          Response, Compensation, and Liability Act or any similar Environmental
          Law, or
          with respect to any Materials of Environmental Concern.

         

        (e) the
          Borrower has
          not entered into or agreed to any consent decree, order, or settlement,
          nor is
          subject to any judgment, decree, or order, in any judicial, administrative,
          arbitral, or other forum, relating to compliance with or liability under
          any
          Environmental Law.

         

        (f) the
          Borrower has
          not assumed or retained, by contract or operation of law, any liabilities
          of any
          kind, fixed, contingent or otherwise, under any Environmental Law other
          than in
          conformity with standard industry practice.

         

        5.17. No
          Material
          Misstatements

         

        .
          (a) All written
          information, reports, financial statements, exhibits and schedules (including,
          without limitation, EPPHC’s report on Form 10-K for the year ended December 31,
          2004, as filed with the Securities and Exchange Commission) furnished to
          the
          Administrative Agent or any Lender by or on behalf of the Borrower in connection
          with the negotiation of any Loan Document or included therein or delivered
          pursuant thereto, when taken as a whole, did not contain, and as they may
          be
          amended, supplemented or modified from time to time, will not contain,
          as of the
          date such statements were made, any untrue statements of a material fact
          and as
          of such date did not omit, and as they may be amended, supplemented or
          modified
          from time to time, will not omit, to state as of the date such statements
          were
          made, any material fact necessary in order to make the statements contained
          therein, in the light of the circumstances under which they were, are or
          will be
          made, not materially misleading.

         

        (a) All
          projections and
          estimates concerning the Borrower that are or have been made available
          to the
          Administrative Agent or any Lender by or on behalf of the Borrower have
          been or
          will be prepared based on good faith estimates and based upon assumptions
          believed by the Borrower to be reasonable in all material respects at the
          time
          of such preparation.

         

        (b) The
          leases
          contributing to the Borrowers’ interests in those wells listed on Schedule
          5.17(c) hereto (which wells are further identified under the same identifying
          name in Borrower’s Reserve Report dated as of June 30, 2005) are described on
          Exhibit “A” to one or more of the instruments constituting or otherwise covered
          by the Mortgages. Further, those title materials referenced on Schedule
          5.17(c)
          as relating to any particular well listed thereon relate to such
          well.

         

        5.18. Insurance

         

        .
          The Borrower
          carries and maintains with respect to its insurable properties insurance
          (including, to the extent consistent with past practices, self-insurance)
          with
          financially sound and reputable insurers of the types, to such extent and
          against such risks as is customary with companies in the same or similar
          businesses.

         

        5.19. Future
          Commitments

         

        .
          As of the Closing
          Date, except as set forth on Schedule 5.19, on a net basis there are no
          material
          gas imbalances, material take-or-pay or other prepayments with respect
          to the
          Oil and Gas Properties of any Loan Party (or, in the case of Oil and Gas
          Properties operated by operators other than the Borrower, to the Borrower’s
          knowledge after reasonable investigation) which would require such Loan
          Party to
          deliver Hydrocarbons produced from Oil and Gas Properties at some future
          time
          without then or thereafter receiving full payment therefor.

         

        5.20. Security
          Documents

         

        .
          (a) The
          provisions of the Mortgages will be effective to grant to the Administrative
          Agent, for the ratable benefit of the Secured Parties, legal, valid and
          enforceable mortgage liens on all of the right, title and interest of the
          Borrowers in the Borrowing Base Property described therein. When such Mortgages
          have been recorded in the appropriate recording office they will constitute
          perfected first liens on, and security interest in, such property, subject
          only
          to Permitted Liens.

         

        (a) The
          provisions of
          the Mortgages will be effective to create in favor of the Administrative
          Agent,
          for the ratable benefit of the Secured Parties, a legal, valid and enforceable
          security interest in the personal property collateral described therein
          and
          proceeds thereof and, upon the filing of UCC-1 Financing Statements with
          the
          secretary of state of each jurisdiction of formation for each of the Borrowers,
          the Mortgages shall constitute a fully perfected first priority lien on,
          and
          security interest in, all right, title and interest of the applicable Borrower
          in such collateral and the proceeds thereof, in each case prior and superior
          in
          right to any other Person, subject only to Permitted Liens.

         

        SECTION
          6

         

        CONDITIONS
          PRECEDENT

         

        6.1. Conditions
          to
          Closing Date

         

        .
          The Closing Date
          shall occur upon, and the obligations of the Lenders to make Extensions
          of
          Credit hereunder shall be subject to, the satisfaction of the following
          conditions precedent on or before September 30, 2005:

         

        (a) Loan
          Documents.
          The
          Administrative Agent shall have received (with the number of original
          counterparts requested by the Administrative Agent) (i) this Agreement,
          executed
          and delivered by a Responsible Officer of the Borrowers, (ii) the Guarantee
          Agreement (if applicable), executed and delivered by a Responsible Officer
          of
          each Guarantor thereto and (iii) a Note payable to the order of each Lender
          requesting a Note in the amount of its Commitment.

         

        (b) Security
          Documents.
          The
          Administrative Agent shall have received (with the number of original
          counterparts requested by the Administrative Agent) (i) Mortgages, executed
          and
          delivered by the Borrowers, covering the Borrowing Base Properties, together
          with the title work referred to in Section 4.16(d) above, and (ii)
          acknowledgment copies or other evidence of the proper filing of financing
          statements (Form UCC-1) under the Uniform Commercial Code of all jurisdictions
          to the extent necessary or desirable or required, in the reasonable judgment
          of
          the Administrative Agent, to perfect the security interests created or
          purported
          to be created by the Mortgages.

         

        (c) Closing
          Certificate.
          The
          Administrative Agent shall have received (with the number of original
          counterparts requested by the Administrative Agent), a certificate of the
          Borrowers, dated the Closing Date, substantially in the form of Exhibit
          F, with
          appropriate insertions and attachments, satisfactory in form and substance
          to
          the Administrative Agent, executed by a Responsible Officer of the
          Borrowers.

         

        (d) Corporate
          Proceedings of the Loan Parties.
          The
          Administrative Agent shall have received (with the number of original
          counterparts requested by the Administrative Agent), a copy of the resolutions,
          in form and substance satisfactory to the Administrative Agent, of the
          Board of
          Directors of each Loan Party authorizing (i) the execution, delivery and
          performance of this Agreement and the Loan Documents to which it is a party,
          (ii) the borrowings contemplated hereunder and (iii) the granting by it
          of the
          Liens created pursuant to the Loan Documents, certified by the Secretary
          or an
          Assistant Secretary of each Loan Party as of the Closing Date, which certificate
          shall be in form and substance reasonably satisfactory to the Administrative
          Agent and shall state that the resolutions thereby certified have not been
          amended, modified, revoked or rescinded.

         

        (e) Loan
          Party
          Incumbency Certificates.
          The
          Administrative Agent shall have received (with the number of original
          counterparts requested by the Administrative Agent), a certificate of each
          Loan
          Party, dated the Closing Date, as to the incumbency and signature of the
          officers of such Loan Party executing any Loan Document reasonably satisfactory
          in form and substance to the Administrative Agent, executed by the President
          or
          any Vice President and the Secretary or any Assistant Secretary of such
          Borrower.

         

        (f) Corporate
          Documents.
          The
          Administrative Agent shall have received (with the number of original
          counterparts requested by the Administrative Agent), true and complete
          copies of
          the certificate of incorporation and by-laws of each Loan Party, certified
          as of
          the Closing Date as complete and correct copies thereof by the Secretary
          or an
          Assistant Secretary of such Loan Party. The Administrative Agent shall
          have
          received certificates from the appropriate Governmental Authority certifying
          as
          to the good standing, existence and authority of each of the Loan Parties
          in all
          jurisdictions where required by the Administrative Agent.

         

        (g) Legal
          Opinions.

         

        (i) The
          Administrative
          Agent shall have received the executed legal opinion of Andrews Kurth LLP,
          counsel to the Borrowers, in form and substance reasonably acceptable to
          the
          Administrative Agent.

         

        (ii) The
          Administrative
          Agent shall have received such legal opinions as shall cover such other
          matters
          incident to the transactions contemplated by this Agreement and the other
          Loan
          Documents as the Administrative Agent may reasonably require.

         

        (h) Consents,
          Licenses and Approvals.
          All governmental
          and third party approvals (including consents) necessary or, in the discretion
          of the Administrative Agent, advisable in connection with continuing operations
          of the Borrowers and the execution, delivery and performance of the Loan
          Documents shall have been obtained and be in full force and effect, and
          all
          applicable waiting periods shall have expired without any action being
          taken or
          threatened by any competent authority which would restrain, prevent or
          otherwise
          impose adverse conditions on this Agreement and the other Loan Documents
          and the
          transactions contemplated hereby and thereby. The Administrative Agent
          shall
          have received, with a counterpart for each Lender, a certificate of the
          Loan
          Parties as to the foregoing.

         

        (i) Due
          Diligence.
          The
          Administrative Agent and the Lenders shall have completed satisfactory
          due
          diligence review of the assets, liabilities, business, operations and condition
          (financial or otherwise) of the Borrowers, including, but not limited,
          to a
          review of their Oil and Gas Properties, and all legal, financial, accounting,
          governmental, environmental, tax and regulatory matters, and fiduciary
          aspects
          of the proposed financing.

         

        (j) Legal
          Structure
          and Capitalization.
          The
          Administrative Agent and the Lenders shall be satisfied with the organization,
          corporate and legal structure and capitalization of the Borrowers and their
          Subsidiaries.

         

        (k) Projections;
          Financial Statements.
          The
          Administrative Agent and the Lenders shall have received true and correct
          copies
          of the business and financial plan of EPPHC and its Subsidiaries for the
          fiscal
          year ending December 31, 2006 (the “Projections”),
          in form and
          substance satisfactory to the Administrative Agent. The Administrative
          Agent and
          the Lenders shall have received true and correct copies of the financial
          statements referred to in Section 5.1(a).

         

        (l) Fees.
          The Technical
          Banks and the Lenders shall have received all fees and expenses required
          to be
          paid on or before the Closing Date pursuant to the Fee Letter and other
          arrangements and for which invoices have been presented.

         

        (m) Representations
          and Warranties.
          Each of the
          representations and warranties made by each Borrower in or pursuant to
          the Loan
          Documents shall be true and correct on and as of such date as if made on
          and as
          of such date (unless such representations and warranties are stated to
          relate to
          a specific earlier date, in which case such representations and warranties
          shall
          be true and correct as of such earlier date).

         

        (n) No
          Default.
          No Default or
          Event of Default shall have occurred and be continuing on such
          date.

         

        (o) No
          Material
          Adverse Effect.
          No event or
          events which, individually or in the aggregate, has had or is reasonably
          likely
          to have a Material Adverse Effect shall have occurred since December 31,
          2004.

         

        (p) Insurance
          Certificates.
          Certificate(s) of
          insurance naming the Administrative Agent as loss payee to the extent of
          the
          Borrowing Base Properties or additional insured evidencing insurance which
          meets
          the requirements of this Agreement and the Security Documents and which
          is in
          amount, form and substance and from an issuer satisfactory to the Administrative
          Agent.

         

        (q) Lien
          Searches.
          Results of lien,
          tax and judgment searches of the UCC Records of the Secretary of State
          and
          applicable counties of the States of Delaware and Texas from a source acceptable
          to the Administrative Agent and reflecting no Liens against any of the
          Borrowing
          Base Properties as to which perfection of a Lien is accomplished by the
          filing
          of a financing statement other than in favor of the Administrative Agent,
          other
          than Permitted Liens.

         

        (r) Additional
          Matters.
          All corporate and
          other proceedings, and all documents, instruments and other legal matters
          in
          connection with the transactions contemplated by this Agreement and the
          other
          Loan Documents shall be reasonably satisfactory in form and substance to
          the
          Administrative Agent, and the Administrative Agent shall have received
          such
          other documents and legal opinions in respect of any aspect or consequence
          of
          the transactions contemplated hereby or thereby as it shall reasonably
          request.

         

        6.2. Conditions
          to Each
          Extension of Credit

         

        .
          The agreement of
          each Lender to make any Extension of Credit requested to be made by it
          on any
          date (including, without limitation, its initial Loans) is subject to the
          satisfaction of the following conditions precedent:

         

        (a) Representations
          and Warranties.
          Each of the
          representations and warranties made by each Loan Party in or pursuant to
          the
          Loan Documents shall be true and correct on and as of such date as if made
          on
          and as of such date (unless such representations and warranties are stated
          to
          relate to a specific earlier date, in which case such representations and
          warranties shall be true and correct as of such earlier date).

         

        (b) No
          Default.
          No Default or
          Event of Default shall have occurred and be continuing on such date or
          after
          giving effect to the Extensions of Credit requested to be made on such
          date.

         

        (c) Maintenance
          of
          Borrowing Base.
          After giving
          effect to the Extensions of Credit requested to be made on any date, the
          Aggregate Credit Exposure of the Lenders shall not exceed the Borrowing
          Base
          then in effect.

         

        (d) Maintenance
          of
          Collateral Coverage Ratio.
          The Collateral
          Coverage Ratio shall be at least 1.5 to 1.0.

         

        (e) Material
          Adverse
          Effect.
          No event or
          events which, individually or in the aggregate, has had or is reasonably
          likely
          to have a Material Adverse Effect shall have occurred and is continuing
          since
          the date of the previous Extension of Credit. 

         

        Each
          request for a
          Loan by, and Letter of Credit issued on behalf of, the Borrowers hereunder
          shall
          constitute a representation and warranty by the Borrowers as of the date
          thereof
          that the conditions contained in (a), (b), (c), (d) and (e) of this subsection
          have been satisfied.

         

        6.3. Determinations
          Under Section 6

         

        .
          For purposes of
          determining compliance with the conditions specified in Section 6.1, each
          Lender
          shall be deemed to have consented to, approved or accepted or to be satisfied
          with each document or other matter required thereunder to be consented
          to or
          approved by or acceptable or satisfactory to the Lenders if such Lender
          has
          executed and delivered its signature page to this Agreement to the
          Administrative Agent.

         

        SECTION
          7

         

        AFFIRMATIVE
          COVENANTS

         

        Each
          Borrower
          hereby agrees that, so long as the Commitments remain in effect, any Loan,
          or
          Letter of Credit or Note remains outstanding and unpaid or any amount is
          owing
          to any Lender or the Administrative Agent hereunder or under any other
          Loan
          Document, such Borrower shall and (except in the case of delivery of financial
          information, reports and notices) shall cause each Guarantor to:

         

        7.1. Financial
          Statements

         

        .
          Furnish to the
          Administrative Agent and to each of the Lenders:

         

        (a) as
          soon as
          available, but in any event within ninety (90) days after the end of each
          fiscal
          year of EPPHC, a copy of EPPHC’s Form 10-K, as filed;

         

        (b) as
          soon as
          available, but in any event not later than forty-five (45) days after the
          end of
          each of the first three quarterly fiscal periods of each fiscal year of
          EPPHC, a
          copy of EPPHC’s Form 10-Q, as filed;

         

        all
          financial
          statements in such reports shall be complete and correct in all material
          respects and shall be prepared in accordance with GAAP applied consistently
          throughout the periods reflected therein and with prior periods (except
          for such
          changes in GAAP as approved by the Independent Auditors or a Responsible
          Officer, as the case may be, and disclosed therein).

         

        (c) The
          electronic
          posting of any financial reports, notices or other items required to be
          furnished pursuant to Sections 7.1 or 7.2 on a website
          (www.elpaso.com)
          established by El
          Paso and accessible by the Lenders shall constitute delivery for all purposes
          of
          Sections 7.1 or 7.2 provided that EPPHC shall provide each Lender
          with
          notice that a financial report has been posted on such website.

         

        7.2. Certificates;
          Other
          Information

         

        .
          Furnish to the
          Administrative Agent and to each of the Lenders:

         

        (a) concurrently
          with
          the delivery of the financial statements referred to in subsections 7.1(a)
          and
          (b), (i) a certificate of a Responsible Officer of EPPHC stating that,
          to the
          best of such officer’s knowledge, during such period the Borrowers have observed
          or performed all of their covenants (and setting forth the calculations
          used to
          determine compliance with the covenants set forth in subsection 8.1) and
          other
          agreements, and satisfied every condition, contained in this Agreement
          and the
          other Loan Documents to be observed, performed or satisfied by it, and
          that such
          officer has obtained no knowledge of any Default or Event of Default except
          as
          specified in such certificate, and (ii) if there are any Unrestricted
          Subsidiaries, such financial statements restated to show the financial
          condition
          and results of EPPHC and its Restricted Subsidiaries;

         

        (b) within
          five days
          after the same are filed, copies of all financial statements and reports
          on Form
          8-K, if any, and all definitive proxy statements which EPPHC may make to,
          or
          file with, the Securities and Exchange Commission or any successor or analogous
          Governmental Authority;

         

        (c) promptly
          upon
          receipt thereof, copies of all final reports and management letters submitted
          to
          EPPHC by the Independent Auditors in connection with any interim or special
          audit of the books or operations of EPPHC made by such Auditors;

         

        (d) together
          with any
          Reserve Report delivered pursuant to Section 4.9(b), (i) a schedule
          identifying as of June 30 or December 31, as applicable,
          each Hedging
          Agreement as to which the Borrowers are bound, and setting forth the names
          of
          the parties thereto and of any guarantees thereof, and (ii) a schedule
          demonstrating that the Collateral Coverage Ratio is at least 1.5 to 1.0,
          such
          schedule to set forth the location and filing information of the recorded
          Mortgages and the PV-10 Value of the Borrowing Base Properties;

         

        (e) within
          30 days of
          the commencement of each fiscal year, annual cash flow projections for
          such
          fiscal year of EPPHC and its Restricted Subsidiaries, including quarterly
          production volumes, revenues, expenses, taxes and budgeted capital expenditures;
          and

         

        (f) promptly,
          such
          additional financial and other information concerning the Borrowers as
          any
          Lender (acting through the Administrative Agent) may from time to time
          reasonably request.

         

        7.3. Payment
          of
          Obligations

         

        .
          Pay, discharge or
          otherwise satisfy at or before maturity or before they become delinquent
          (following the lapse of any applicable cure period), as the case may be,
          all of
          its obligations of whatever nature, including, without limitation, taxes,
          assessments, fees and other governmental charges, except where (x) the
          amount or
          validity thereof is currently being contested in good faith by appropriate
          proceedings and reserves in conformity with GAAP with respect thereto have
          been
          provided on the books of the applicable Loan Party, or (y) the failure
          to pay,
          discharge or otherwise satisfy such obligations, in the aggregate, could
          not
          reasonably be expected to have a Material Adverse Effect.

         

        7.4. Conduct
          of Business
          and Maintenance of Existence; Compliance with Law and Contractual
          Obligations

         

        .
          Continue to
          engage in business of the same general type as now conducted by it and
          preserve,
          renew and keep in full force and effect its corporate existence; take all
          reasonable action to maintain all rights, privileges and franchises necessary
          or
          desirable in the normal conduct of its business, except as otherwise permitted
          by subsection 8.5 and comply with all Contractual Obligations and Requirements
          of Law, in each case except to the extent that failure to comply therewith
          could
          not reasonably be expected to have, in the aggregate, a Material Adverse
          Effect.

         

        7.5. Maintenance
          of
          Properties; Insurance

         

        .
          Maintain all
          Properties useful and necessary in its business in accordance with past
          practices and customary industry norms, (x) ordinary wear and tear and
          (y)
          casualty events which could not reasonably be expected to have a Material
          Adverse Effect excepted; maintain or cause to maintain with financially
          sound
          and reputable insurance companies (or through self-insurance), property
          damage
          and liability insurance of such types, in such amounts and against such
          risks as
          is customary to be maintained by companies engaged in the same or a similar
          business in the same general area; and furnish to the Administrative Agent,
          upon
          written request, full information as to the insurance carried.

         

        7.6. Inspection
          of
          Property; Books and Records; Discussions

         

        .
          Keep proper books
          of records and account in which full, true and correct entries in conformity
          with GAAP and all Requirements of Law shall be made of all dealings and
          transactions in relation to its business and activities; and permit
          representatives of any Lender to visit and inspect any Borrowing Base Properties
          operated by it (provided the Lender’s representatives shall comply with all
          safety procedures and precautions required by the Borrowers while on any
          Oil and
          Gas Properties of any Borrower), and examine and make abstracts from any
          of its
          books and records at any reasonable time and as often as may reasonably
          be
          requested through the Administrative Agent and to discuss the business,
          operations, properties and financial and other condition of the Borrowers
          with
          officers of the Borrowers and with their Independent Auditors, in the presence
          of a Responsible Officer of the Borrowers.

         

        7.7. Notices

         

        .
          Promptly give
          notice to the Administrative Agent of:

         

        (a) an
          officer of the
          Borrower obtaining knowledge of the occurrence of any Event of Default
          that is
          continuing;

         

        (b) an
          officer of the
          Borrower obtaining knowledge of any (i) material default or event of default
          under any Contractual Obligation of any Loan Party or (ii) material litigation,
          investigation or proceeding which may exist at any time between any Loan
          Party
          and any Governmental Authority;

         

        (c) an
          officer of the
          Borrower obtaining knowledge of any litigation or proceeding affecting
          any of
          Borrowers involving in the aggregate a liability (to the extent not paid
          or
          covered by insurance) of $25,000,000.00 or more which could reasonably
          be
          expected to result in an adverse judgment not covered by insurance or in
          which
          injunctive or similar relief is sought;

         

        (d) the
          following
          events, as soon as possible and in any event within 30 days after a Borrower
          knows thereof: (i) the occurrence or expected occurrence of any Reportable
          Event
          with respect to any Plan, a failure to make any required contribution to
          a Plan,
          the creation of any Lien in favor of the PBGC or a Plan or any withdrawal
          from,
          or the termination, Reorganization or Insolvency of, any Multiemployer
          Plan or
          (ii) the institution of proceedings or the taking of any other action by
          the
          PBGC or the Borrower or any Commonly Controlled Entity or any Multiemployer
          Plan
          with respect to the withdrawal from, or the terminating, Reorganization
          or
          Insolvency of, any Plan;

         

        (e) the
          acquisition or
          creation of any Subsidiary, including whether EPPHC designates such Subsidiary
          as an Unrestricted Subsidiary; and

         

        (f) an
          officer of the
          Borrower obtaining knowledge of any event or circumstance which has had
          or may
          reasonably be expected to have a Material Adverse Effect.

         

        Each
          notice
          pursuant to this subsection shall be accompanied by a statement of the
          officer
          setting forth details of the occurrence referred to therein and stating
          what
          action the Borrower has taken or proposes to take with respect
          thereto.

         

        7.8. Environmental
          Laws

         

        .
          (a) Except as set
          forth in Schedule 5.17 or as, individually or in the aggregate, could not
          reasonably be expected to have a Material Adverse Effect, (i) comply with
          all
          Environmental Laws, and obtain, comply with and maintain any and all
          Environmental Permits necessary for its operations as conducted and as
          planned;
          and (ii) take all reasonable efforts to ensure that all of its tenants,
          subtenants, contractors, subcontractors, and invitees comply with all
          Environmental Laws, and obtain, comply with and maintain any and all
          Environmental Permits, applicable to any of them.

         

        (a) Except
          as set forth
          in Schedule 5.17 or to the extent that the failure to comply could not
          reasonably be expected to give rise to a Material Adverse Effect, comply
          with
          all orders and directives of all Governmental Authorities regarding
          Environmental Laws, other than such orders and directives as to which an
          appeal
          or other appropriate action to contest such order or directive has been
          timely
          and properly taken in good faith.

         

        (b) Prior
          to acquiring
          any ownership or leasehold interest in real property or other interest
          in any
          real property that could give rise to the Borrower being subject to potential
          significant liability under or violations of any Environmental Law, which
          potential liabilities or violations, if incurred, could reasonably be expected
          to have a Material Adverse Effect: (i) notify the Administrative Agent;
          and (ii)
          if requested by the Administrative Agent, provide to the Administrative
          Agent a
          written report by an environmental consultant reasonably acceptable to
          the
          Administrative Agent assessing the presence or potential presence of significant
          levels of any Materials of Environmental Concern on, under, in, or about
          the
          property, or of other conditions that could give rise to potentially significant
          liability or violations of any Environmental Law.

         

        7.9. Additional
          Collateral

         

        .
          (a) With respect
          to any Person that, subsequent to the Closing Date, becomes a Domestic
          Restricted Subsidiary, promptly (i) cause such Person to become a party
          to the
          Guarantee Agreement and (ii) if requested by the Administrative Agent,
          deliver
          to the Administrative Agent legal opinions as to the validity and enforceability
          of such Subsidiary’s guarantee, which opinions shall be in form and substance,
          and from counsel, reasonably satisfactory to the Administrative
          Agent.

         

        (a) With
          respect to a
          Borrower that, subsequent to the Closing Date, acquires any Properties
          that are
          proposed to be Borrowing Base Properties, promptly execute and deliver
          to the
          Administrative Agent Mortgages or amendments to Mortgages presently in
          force
          granting security interests and Liens to the Administrative Agent, for
          the
          ratable benefit of the Secured Parties, in such Properties.

         

        7.10. Maintenance
          and
          Operation of Properties

         

        .
          Except to the
          extent that the failure to comply could not reasonably be expected to have
          a
          Material Adverse Effect and consistent with the standards of a reasonably
          prudent operator under the same circumstances:

         

        (a) Maintain,
          develop,
          and operate the Oil and Gas Properties that are operated by any Loan Party
          in a
          good and workmanlike manner, and observe and comply with all of the terms
          and
          provisions, express or implied, of all oil and gas leases relating to such
          Properties so long as the oil and gas leases are capable of producing
          Hydrocarbons in quantities and at prices providing for continued efficient
          and
          profitable operation of business;

         

        (b) Comply
          in all
          material respects with all contracts and agreements applicable to or relating
          to
          Oil and Gas Properties of any Loan Party or the production and sale of
          Hydrocarbons therefrom;

         

        (c) At
          all times,
          maintain, preserve, and keep all operating equipment used with respect
          to the
          Oil and Gas Properties that are operated by any Loan Party in proper repair,
          working order and condition, and make all necessary or appropriate repairs,
          renewals, replacements, additions and improvements thereto so that the
          efficiency of the operating equipment shall at all times be properly preserved
          and maintained, provided that no item of operating equipment need be so
          repaired, renewed, replaced, added to or improved, if such Loan Party shall
          in
          good faith determine that the action is not necessary for such Person’s
          continued efficient and profitable operation of business.

         

        (d) With
          respect to Oil
          and Gas Properties which are operated by operators other than a Loan Party,
          seek
          to enforce the operators’ contractual obligations to maintain, develop, and
          operate such Properties subject to the applicable operating agreements
          to the
          extent it is commercially reasonable to do so.

         

        (e) If
          and when any of
          the wells located on the Oil and Gas Properties of any Loan Party ceases
          producing Hydrocarbons in paying quantities and is of no further use and
          a Loan
          Party is required to do so under any agreement or law, said Loan Party
          will plug
          and abandon, or cause to be plugged and abandoned, any and all such wells
          in
          accordance in all material respects with applicable local, state and/or
          federal
          laws and regulations then in force and regulating the plugging of Hydrocarbon
          wells.

         

        7.11. Collateral
          Coverage

         

        .
          At all times the
          Borrower will maintain a Collateral Coverage Ratio of at least 1.5 to 1.0.
          Failure to maintain a Collateral Coverage Ratio of at least 1.5 to 1.0
          shall not
          be considered a Default or an Event of Default provided the Borrower complies
          with Section 4.10(c) on a timely basis.

         

        7.12. Further
          Assurances

         

        .
          Upon the request
          of the Administrative Agent, promptly perform or cause to be performed
          any and
          all acts and execute or cause to be executed any and all documents (including,
          without limitation, financing statements and continuation statements) for
          filing
          under the provisions of the Uniform Commercial Code or any other Requirement
          of
          Law which are necessary or advisable to maintain in favor of the Administrative
          Agent, for the benefit of the Lenders, Liens on the Oil and Gas Properties
          subject to the Mortgages that are duly perfected in accordance with all
          applicable Requirements of Law.

         

        SECTION
          8

         

        NEGATIVE
          COVENANTS

         

        The
          Borrowers
          hereby agree that, so long as the Commitments remain in effect, any Loan,
          Letter
          of Credit or any Note remains outstanding and unpaid or any amount is owing
          to
          any Lender or the Administrative Agent hereunder or under any other Loan
          Document, the Borrowers, collectively shall not, and shall not (except
          with
          respect to subsection 8.1) permit any Guarantor, to:

         

        8.1. Financial
          Covenant
          Conditions

         

        .

         

        (a) Interest
          Coverage Ratio.
          Permit the
          Interest Coverage Ratio as of the last day of any fiscal quarter of EPPHC
          to be
          less than 2.0 to 1.0.

         

        (b) Debt
          Leverage
          Ratio.
          Permit the Debt
          Leverage Ratio as of the last day of any fiscal quarter of EPPHC to be
          greater
          than 4.50 to 1.0, for the period of the first four consecutive fiscal quarters
          ended following the Closing Date, and 4.0 to 1.0 with respect to each fiscal
          quarter ending thereafter.

         

        8.2. Limitation
          on
          Indebtedness

         

        .
          Create, incur,
          assume or suffer to exist any Indebtedness, except:

         

        (a) Indebtedness
          of the
          Borrower or any Guarantor under any Loan Document;

         

        (b) Indebtedness
          outstanding on the date hereof and listed on Schedule 8.2 (including, without
          limitation, the Senior Notes) and any refinancings, refundings, renewals
          or
          extensions thereof on terms and conditions not more restrictive than the
          original Indebtedness;

         

        (c) Indebtedness
          of any
          Borrower under Hedging Agreements entered into in the ordinary course of
          business of such Borrower and not for speculative purposes, including Commodity
          Hedging Agreements permitted under subsection 8.15;

         

        (d) Indebtedness
          of any
          Loan Party issued or owed to any other Loan Party, provided that no Default,
          Event of Default, Borrowing Base Deficiency, or Collateral Value Deficiency
          exists on the date that such Indebtedness is created;

         

        (e) [Reserved]

         

        (f) Obligations
          in
          respect of completion bonds, performance bonds, bid bonds, appeal bonds,
          surety
          bonds, insurance obligations or bonds and similar bonds and obligations
          incurred
          by any Loan Party in the ordinary course of business and any guarantees
          or
          letters of credit functioning as or supporting any of the foregoing bonds
          or
          obligations;

         

        (g) Subordinated
          Indebtedness that is issued on terms which are satisfactory to the
          Administrative Agent and the Required Lenders with respect to provisions
          regarding maturity, covenants, events of default and subordination language,
          provided that after giving effect to the issuance of such Subordinated
          Indebtedness, the Borrower is in compliance with the covenants contained
          in
          subsection 8.1 hereof;

         

        (h) Guarantee
          Obligations permitted by subsection 8.4;

         

        (i) Indebtedness
          incurred to finance the acquisition of equipment, provided that the amount
          of
          such Indebtedness does not exceed the purchase price of such equipment
          as
          applicable; and

         

        (j) Indebtedness
          of any
          Loan Party created, incurred or assumed after the date hereof not otherwise
          permitted pursuant to this subsection 8.2, provided that (i) after taking
          into
          account the aggregate principal amount of such Indebtedness, the Debt Leverage
          Ratio on the day such Indebtedness is incurred shall not be greater than
          3.5 to
          1.0, and (ii) on the day such Indebtedness is incurred no Default, Event
          of
          Default, Borrowing Base Deficiency, or Collateral Value Deficiency shall
          have
          occurred and be continuing.

         

        8.3. Limitation
          on
          Liens

         

        .
          Create, incur,
          assume or suffer to exist any Lien upon any of their property, assets or
          revenues, whether now owned or hereafter acquired, except for the following
          (and
          each of the following are collectively referred to herein as “Permitted
          Liens”):

         

        (a) Liens
          for taxes,
          assessments or other governmental charges or levies not yet due or which
          are
          being contested in good faith by appropriate proceedings, provided that
          adequate
          reserves with respect thereto are maintained on the books of the Borrower
          or any
          Loan Parties, in conformity with GAAP;

         

        (b) carriers’,
          warehousemen’s, mechanics’, materialmen’s, landlords’, repairmen’s or other like
          Liens arising in the ordinary course of business securing obligations which
          are
          not overdue for a period of more than 60 days or which are being contested
          in
          good faith by appropriate proceedings, which proceedings would have the
          effect
          of preventing the forfeiture or sale of the property or assets subject
          to any
          such Lien;

         

        (c) pledges
          or deposits
          made in the ordinary course of business in connection with workers’
          compensation, unemployment insurance and other social security
          legislation;

         

        (d) deposits
          and
          letters of credit made to secure the performance of bids, tenders, trade
          contracts (other than for borrowed money), leases, statutory obligations,
          surety
          and appeal bonds, performance and return-of-money bonds and other obligations
          of
          a like nature incurred in the ordinary course of business;

         

        (e) easements,
          rights-of-way, servitudes, permits, reservations, exceptions, covenants
          and
          other restrictions as to the use of real property and other similar encumbrances
          incurred in the ordinary course of business which, with respect to all
          of the
          foregoing, do not secure the payment of Indebtedness of the type described
          in
          clauses (a)-(d) of the definition thereof and which do not materially detract
          from the value of the Property subject thereto or materially interfere
          with the
          ordinary conduct of the business of any Loan Party;

         

        (f) Liens
          in existence
          on the date hereof listed on Schedule 8.3, securing Indebtedness permitted
          by
          subsection 8.2(b), provided that no such Lien encumbers Borrowing Base
          Property
          and is amended after the date of this Agreement to cover any additional
          Property
          or to secure additional Indebtedness and that the amount of Indebtedness
          secured
          thereby is not increased;

         

        (g) Liens
          created
          pursuant to the Security Documents and other Liens created after the date
          hereof
          and securing Indebtedness hereunder or under any other Loan
          Document;

         

        (h) Liens
          reserved in
          customary oil, gas and/or mineral leases for royalties, bonus or rental
          payments
          and for compliance with the terms of such leases and Liens reserved in
          customary
          operating agreements, farm-out and farm-in agreements, exploration agreements,
          development agreements and other similar agreements for compliance with
          the
          terms of such agreements, to the extent that (x) any such Lien referred
          to in
          this clause (h) does not materially impair the use or value of the property
          subject to such Lien for the purposes for which such property is held,
          and (y)
          in the case of customary operating agreements, farm-out and farm-in agreements,
          exploration agreements, development agreements and other similar agreements,
          the
          amount of any obligations secured thereby that are delinquent, that are
          not
          diligently contested in good faith and for which adequate reserves are
          not
          maintained by the Borrower or any Guarantor, as the case may be, do not
          exceed,
          at any time outstanding, the amount owing by the Borrower or any Guarantor,
          as
          applicable, for ninety (90) days’ billed operating expenses or other
          expenditures attributable to such entity’s interest in the Property covered
          thereby;

         

        (i) defects,
          irregularities and deficiencies in the title of any rights of way or other
          Property of any Loan Party which in the aggregate do not materially impair
          the
          use of such rights of way or other property for the purposes for which
          such
          rights of way and other Property are held by such Loan Party, and defects,
          irregularities and deficiencies in title to any property of any Loan Party
          of
          the Borrower, which defects, irregularities or deficiencies have been cured
          by
          possession under applicable statutes of limitation;

         

        (j) royalties,
          overriding royalties, revenue interests, net revenue interests, production
          payments and advance payment obligations (other than obligations in respect
          of
          advance payments received in connection with the incurrence of Indebtedness),
          provided that the value of the Oil and Gas Properties shown on the Borrower’s
          Reserve Reports is net of such Liens;

         

        (k) any
          Lien securing
          Indebtedness, neither assumed nor guaranteed by any Loan Party nor on which
          it
          customarily pays interest, existing upon real estate or rights in or relating
          to
          real estate acquired by any Loan Party for substation, metering station,
          pump
          station, storage gathering line, transmission line, transportation line,
          distribution line or for right-of-way purposes, and any Liens reserved
          in leases
          for rent and for compliance with the terms of the leases in the case of
          leasehold estates, to the extent that any such Lien referred to in this
          paragraph (k) does not materially impair the use or value of the property
          subject to such Lien for the purposes for which such property is
          held;

         

        (l) judgment
          and other
          similar Liens arising in connection with court proceedings, provided that
          the
          judgment relating thereto shall have been stayed or bonded pending appeal,
          provided that no such Lien shall encumber any Borrowing Base
          Property;

         

        (m) Liens
          arising out
          of all presently existing and future division and transfer orders, advance
          payment agreements, processing contracts, gas processing plant agreements,
          operating agreements, gas balancing or deferred production agreements,
          pooling,
          unitization or communitization agreements, pipeline, gathering or transportation
          agreements, platform agreements, drilling contracts, injection or repressuring
          agreements, cycling agreements, construction agreements, salt water or
          other
          disposal agreements, leases or rental agreements, farm-out and farm-in
          agreements, exploration and development agreements, and any and all other
          contracts or agreements covering, arising out of, used or useful in connection
          with or pertaining to the exploration, development, operation, production,
          sale,
          use, purchase, exchange, storage, separation, dehydration, treatment,
          compression, gathering, transportation, processing, improvement, marketing,
          disposal or handling of any property of any Loan Party, provided that such
          agreements are entered into in the ordinary course of business and when
          entered
          into contain terms customary for such agreements in the industry and provided
          further that no Liens described in this paragraph (m) shall be granted
          or
          created in connection with the incurrence of Indebtedness;

         

        (n) customary
          preferential rights to purchase and calls on productions by sellers relating
          to
          any of the Borrowing Base Properties;

         

        (o) [Reserved]

         

        (p) [Reserved]

         

        (q) [Reserved]

         

        (r) Liens
          not expressly
          permitted by this subsection 8.3 securing any Indebtedness permitted by
          subsection 8.2(c), (i) or (j) provided that (i) no such Lien shall encumber
          any
          Borrowing Base Properties, and (ii) at the time of incurrence, the outstanding
          principal amount of the Indebtedness secured by such Liens may not exceed
          10% of
          the PV-10 Value of the Loan Parties’ Oil and Gas Properties.

         

        8.4. Limitation
          on
          Guarantee Obligations

         

        .
          Create, incur,
          assume or suffer to exist any Guarantee Obligation except (a) Guarantee
          Obligations in existence on the date hereof and listed on Schedule 8.4,
          (b)
          Guarantee Obligations arising under the Loan Documents, (c) Guarantee
          Obligations with respect to Indebtedness permitted by subsection 8.2 (other
          than
          subsection (h) thereof), (d) Guarantee Obligations incurred by any Loan
          Party
          with respect to any obligations or liabilities of a Loan Party, so long
          as the
          incurring of such obligations or liabilities is not prohibited by Section
          8.2
          hereof, and (e) Guarantee Obligations issued by any Loan Party in the ordinary
          course of business of obligations of other Persons (other than in respect
          of
          Indebtedness) in connection with current oil and gas drilling, oil and
          gas
          production, oil and gas transportation, crude oil purchasing, oil and gas
          exploration or other similar programs or operations, and (f) Guarantee
          Obligations of a Person existing at the time such Person becomes a Subsidiary
          that were not created in contemplation of such event, so long as the incurrence
          of such obligations or liabilities is not prohibited by Section 8.2
          hereof.

         

        8.5. Limitation
          on
          Fundamental Change

         

        .
          Enter into any
          merger, consolidation or amalgamation as a constituent party, or liquidate,
          wind
          up or dissolve itself (or suffer any liquidation or dissolution), or convey,
          sell, lease, assign, transfer or otherwise dispose of, all or substantially
          all
          of its property, business or assets, or make any material change in its
          present
          method of conducting business except:

         

        (a) any
          Subsidiary of
          EPPHC (including a Foreign Subsidiary) may be merged or consolidated with
          or
          into a Loan Party (provided that such Loan Party shall be the continuing
          or
          surviving corporation);

         

        (b) any
          Subsidiary of
          EPPHC may sell, lease, transfer or otherwise dispose of any or all of its
          assets
          (upon voluntary liquidation or otherwise) to a Loan Party;

         

        (c) any
          Guarantor may
          merge into any other Loan Party or may dissolve and transfer all of its
          assets
          and liabilities to another Loan Party;

         

        (d) any
          Borrower may
          merge into any other Borrower; or

         

        (e) transactions
          contemplated pursuant to a Reorganization Plan consented to by the
          Lenders.

         

        8.6. Limitation
          on Sale
          of Assets

         

        .
          Convey, sell,
          lease, assign, transfer or otherwise dispose of any of their Oil and Gas
          Properties (including, without limitation, receivables and leasehold interests),
          whether now owned or hereafter acquired, except:

         

        (a) the
          sale of
          inventory (including Hydrocarbons or other mineral products or surplus)
          in the
          ordinary course of business;

         

        (b) Dispositions
          of Oil
          and Gas Properties not constituting Proved Reserves pursuant to farm-ins
          and
          farm-outs and transfers of royalty interests, overriding royalty interests,
          net
          revenue interests and other similar transfers, all pursuant to exploration
          and
          development activity in the ordinary course of business of the Borrowers
          and
          their Subsidiaries;

         

        (c) the
          Disposition of
          Oil and Gas Properties not constituting Borrowing Base Properties, provided
          that
          if the aggregate PV-10 Value (determined by reference to the most recent
          Reserve
          Report) of such Disposition and other Dispositions since the most recent
          Redetermination Date minus the PV-10 Value of all Oil and Gas Properties
          not
          constituting Borrowing Base Properties acquired by the Loan Parties since
          such
          Redetermination Date exceeds an amount equal to 10% of the PV-10 Value
          of the
          Loan Parties’ Oil and Gas Properties, the Technical Banks may elect to
          redetermine the Borrowing Base in accordance with the procedures set forth
          in
          subsection 4.9 as if a Borrower Redetermination Notice had been provided
          prior
          to such Disposition;

         

        (d) the
          Disposition of
          any Borrowing Base Properties, provided that if the aggregate PV-10 Value
          (determined by reference to the most recent Reserve Report) of such Dispositions
          between Borrowing Base Redeterminations exceeds $25,000,000.00, the Borrowing
          Base shall automatically be redetermined prior to such Disposition in accordance
          with the procedures set forth in subsection 4.9 as if a Borrower Redetermination
          Notice had been provided prior to such Disposition. In any event, the
          Disposition of Borrowing Base Property may result in a mandatory reduction
          in
          the Borrowing Base pursuant to subsection 4.9(f).

         

        8.7. Limitation
          on
          Dividends

         

        .
          Declare or pay
          any dividend on (other than dividends payable solely in common stock of
          any
          Borrower), or make any payment on account of, or set apart assets for a
          sinking
          or other analogous fund for, the purchase, redemption, defeasance, retirement
          or
          other acquisition of any shares of any class of Capital Stock of any Loan
          Party
          or any warrants or options to purchase any such Capital Stock, whether
          now or
          hereafter outstanding, or make any other distribution in respect thereof,
          either
          directly or indirectly, whether in cash or property or in obligations of
          such
          Loan Party, except that:

         

        (a) a
          Loan Party may
          declare and pay dividends to or make other distributions to another Loan
          Party;

         

        (b) EPPHC
          may declare
          and pay dividends or make other distributions of property from the net
          proceeds
          received by EPPHC from the issuance or sale of its Capital Stock;

         

        (c) provided
          no
          Default, Event of Default, Borrowing Base Deficiency or Collateral Value
          Deficiency shall have occurred and be continuing, EPPHC may declare and
          pay
          dividends or make other distributions of property with respect to any fiscal
          year (but no later than 120 days after the end of such fiscal year) in
          an amount
          that does not exceed the sum of (i) the Available Distribution Amount,
          plus (ii)
          the net proceeds of any equity offering or contribution of equity, in each
          case
          received by a Loan Party during such fiscal year, plus (iii) 100% of Free
          Cash
          Flow of the Loan Parties accrued during such fiscal year, minus (iv) Free
          Cash
          Flow and capital contributions used to repay Indebtedness pursuant to Section
          8.9(z).

         

        8.8. Limitation
          on
          Investments, Loans and Advances

         

        .
          Make any advance,
          loan, extension of credit or capital contribution to, or incur any Guarantee
          Obligation on behalf or for the benefit of, or purchase any stock, bonds,
          notes,
          debentures or other securities of or any assets constituting a business
          unit of,
          or make any other investment (including by the issuance of letters of credit)
          in
          (collectively, “Investments”),
          any Person,
          except:

         

        (a) extensions
          of trade
          credit in the ordinary course of business;

         

        (b) investments
          in Cash
          Equivalents;

         

        (c) loans
          and advances
          to officers and employees of the Borrowers and their Subsidiaries for travel,
          entertainment and relocation expenses in the ordinary course of business
          in an
          aggregate amount for the Borrowers and their Subsidiaries not to exceed
          $1,000,000 at any one time outstanding;

         

        (d) investments,
          loans
          or advances, the material details of which have been set forth on Schedule
          8.8;

         

        (e) so
          long as no
          Default or Event of Default shall have occurred and be continuing, Investments
          by any Loan Party, Subsidiary or Affiliate in which EPPHC has a direct
          or
          indirect investment in any other Loan Party, Subsidiary or Affiliate in
          which
          EPPHC has a direct or indirect investment;

         

        (f) acquisitions
          and
          investments made or entered into in connection with theOil and Gas
          Business;

         

        (g) transactions
          expressly permitted or contemplated under subsection 8.2 (provided, that
          no
          loans may be made by the Borrower pursuant to subsection 8.2(g) at any
          time when
          a Default, Event of Default, Borrowing Base Deficiency or Collateral Value
          Deficiency shall have occurred and be continuing);

         

        (h) loans
          or advances
          to El Paso Corporation existing as of the Closing Date under the Cash Management
          Program in the approximate amount of $262,000,000, provided that when said
          loans
          and advances are repaid they may not be loaned or advanced again;

         

        (i) provided
          no
          Default, Event of Default, Borrowing Base Deficiency, or Collateral Value
          Deficiency shall have occurred and is continuing, additional loans or advances
          made on a revolving basis to El Paso Corporation under the Cash Management
          Program up to a maximum outstanding amount of $125,000,000; and

         

        (j) Investments
          not
          otherwise permitted hereunder in an amount at any time not in excess of
          $10,000,000.

         

        8.9. Limitation
          on
          Payments and Modifications of Debt Instruments, Other Documents

         

        .
          (a) Make any
          voluntary payment or prepayment on or redemption, defeasance or purchase
          of (i)
          any Indebtedness (other than Indebtedness under this Agreement) which has
          an
          aggregate principal amount in excess of $5,000,000 or (ii) any Subordinated
          Indebtedness other than, provided that no Event of Default, Borrowing Base
          Deficiency, or Collateral Value Deficiency has occurred and is continuing,
          principal with respect thereto and interest thereon, or (b) amend, modify
          or
          change, or consent or agree to any material amendment, modification or
          change to
          any of the payment, redemption, prepayment or similar economic terms (including
          the subordination provisions) of any such Indebtedness described in clauses
          (i)
          or (ii) immediately preceding (other than any such amendment, modification
          or
          change which would extend the maturity or reduce the amount of any payment
          of
          principal thereof or which would reduce the rate or extend the date for
          payment
          of interest thereon). Notwithstanding any contrary provision in this Section
          8.9, EPPHC may:

         

        (w) prepay
          or purchase
          any outstanding Senior Notes provided that prior to the date of such prepayment
          or purchase the Borrowing Base shall be redetermined in accordance with
          the
          procedures set forth in subsection 4.9 which would have applied had a Borrower
          Redetermination Notice or a Lender Redetermination Notice;

         

        (x) prepay
          or purchase
          any outstanding Senior Notes in connection with an otherwise permitted
          refinancing of such Senior Notes;

         

        (y) provided
          no
          Default, Event of Default, Borrowing Base Deficiency or Collateral Value
          Deficiency shall have occurred and be continuing, pay principal with respect
          to
          and interest on Indebtedness owed to El Paso Corporation; provided, however,
          that such Indebtedness was incurred on a revolving basis and the amount
          of such
          revolving Indebtedness outstanding at any time does not exceed $125,000,000;
          and

         

        (z) provided
          no
          Default, Event of Default, Borrowing Base Deficiency or Collateral Value
          Deficiency shall have occurred and be continuing, pay principal with respect
          to
          and interest on Indebtedness owed to El Paso Corporation (other than
          Indebtedness described in clause (y) above) in an amount that does not
          exceed
          the sum of (i) 100% of Free Cash Flow for the fiscal year in which such
          payment
          is made, and (ii) capital contributions made to EPPHC for the fiscal year
          in
          which such payment is made.

         

        8.10. Limitation
          on
          Transactions with Affiliates

         

        .
          Enter into any
          transaction, including, without limitation, any purchase, sale, lease or
          exchange of Property or the rendering of any service, with any Affiliate
          (other
          than transactions between or among the Borrower and its Guarantors) unless
          such
          transaction is (a) otherwise permitted under this Agreement, (b) in the
          ordinary
          course of the Borrower’s or the Guarantor’s business and (c) upon fair and
          reasonable terms no less favorable to the Borrower or the Guarantor, as
          the case
          may be, than it would obtain in a comparable arm’s length transaction with a
          Person which is not an Affiliate or, in the event no comparable transaction
          with
          an unaffiliated Person is available, on terms that are fair from a financial
          point of view to the Borrower or Guarantor provided, however, this subsection
          8.10 shall not apply to (i) the payment of reasonable and customary fees
          to
          directors of the Borrower who are not employees of the Borrower; (ii) loans
          or
          advances made pursuant to subsection 8.8(c); (iii) any other transaction
          with
          any employee, officer or director of the Borrower pursuant to drilling
          arrangements, exploration and production arrangements, Plans, compensation
          or
          other similar arrangements entered into the ordinary course of business
          and
          approved by a majority of the disinterested members of the Board of Directors
          of
          the Borrower; or (iv) transactions in effect on the Closing Date including
          material transactions involving the production, sale or transportation
          of
          Hydrocarbons which have been disclosed to the Lenders and which do not
          have a
          Material Adverse Effect.

         

        8.11. Limitation
          on
          Changes in Fiscal Year

         

        .
          Permit the fiscal
          year of EPPHC to end on a day other than December 31.

         

        8.12. Limitation
          on
          Negative Pledge Clauses

         

        .
          Enter into with
          any Person any agreement, other than this Agreement or the Indenture (including
          any new indenture which results from an otherwise permitted refinancing
          of the
          Senior Notes) which prohibits or limits the ability of any Loan Party to
          create,
          incur, assume or suffer to exist any Lien upon any of its property, assets
          or
          revenues, whether now owned or hereafter acquired.

         

        8.13. Limitation
          on Lines
          of Business

         

        .
          Enter into any
          business, either directly or through any Subsidiary, except for those businesses
          in which the Loan Parties are engaged on the date of this Agreement or
          which are
          directly related thereto or to the Oil and Gas Business.

         

        8.14. Forward
          Sales

         

        .
          Except in
          accordance with ordinary practice in the Oil and Gas Business, enter into
          or
          permit to exist any advance payment agreement or other arrangement pursuant
          to
          which the Borrower or any of its Subsidiaries, having received full or
          substantial payment of the purchase price for a specified quantity of
          Hydrocarbons from any of the Borrowing Base Properties upon entering such
          agreement or arrangement, is required to deliver, in one or more installments
          subsequent to the date of such agreement or arrangement, such quantity
          of
          Hydrocarbons pursuant to and during the terms of such agreement or
          arrangement

         

        8.15. Hedging
          Agreements

         

        .
          Enter into any
          Hedging Agreement after the Closing Date, other than Hedging Agreements
          entered
          into in the ordinary course of business to hedge or mitigate risks to which
          any
          Loan Party is exposed in the conduct of its business or the management
          of its
          liabilities, and provided that with respect to all Commodity Hedging Agreements
          (without duplication) (i) for oil, the total volumes to be hedged shall
          not
          exceed 85% of expected oil production of the Loan Parties for the twenty-four
          month period commencing at the time of such hedging, and 60% for any subsequent
          twelve month period (determined by reference to the most recent Reserve
          Report)
          and (ii) for gas, the total volumes to be hedged for any twenty-four month
          period shall not exceed 85% of expected gas production of the Loan Parties
          for
          the twenty-four month period commencing at the time of such hedging and
          60% for
          any subsequent twelve month period (determined by reference to the most
          recent
          Reserve Report).

         

        SECTION
          9

         

        EVENTS
          OF
          DEFAULT

         

        If
          any of the
          following events shall occur and be continuing:

         

        (a) The
          Borrowers shall
          fail to pay any principal of any Loan when due in accordance with the terms
          thereof or hereof; or the Borrowers shall fail to pay any interest on any
          Loan,
          or any other fee, Reimbursement Obligation or other amount payable hereunder,
          within three (3) Business Days after any such amount becomes due in accordance
          with the terms thereof or hereof; or

         

        (b) Any
          representation
          or warranty made or deemed made by any Loan Party herein or in any other
          Loan
          Document or which is contained in any certificate, document or financial
          or
          other statement furnished by it at any time under or in connection with
          this
          Agreement or any such other Loan Document shall prove to have been incorrect
          in
          any material respect on or as of the date made or deemed made; or

         

        (c) Any
          Borrower shall
          default in the observance or performance of any agreement applicable to
          it
          contained in subsections 4.10, 7.7(a) or 7.9 or Section 8 of this Agreement;
          or

         

        (d) Any
          Borrower shall
          default in the observance or performance of any other agreement applicable
          to it
          contained in this Agreement or any other Loan Document (other than as provided
          in paragraphs (a) through (c) of this Section), and such default shall
          continue
          unremedied for a period of 30 consecutive days; or

         

        (e) Any
          Borrower shall
          (i) default in any payment of principal of or interest of any Indebtedness,
          including without limitation the Senior Notes (excluding the Loans or any
          guarantee thereof), or in the payment of any Guarantee Obligation, beyond
          the
          period of grace, if any, provided in the instrument or agreement under
          which
          such Indebtedness or Guarantee Obligation was created; provided that the
          aggregate principal amount of such Indebtedness and Guarantee Obligations
          equals
          or exceeds $25,000,000; or (ii) default in the observance or performance
          of any
          other agreement or condition relating to any such Indebtedness (including
          without limitation the Indenture) or Guarantee Obligation or contained
          in any
          instrument or agreement evidencing, securing or relating thereto, or any
          other
          event shall occur or condition exist, the effect of which default or other
          event
          or condition is to cause, or to permit the holder or holders of such
          Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation
          (or a
          trustee or agent on behalf of such holder or holders or beneficiary or
          beneficiaries) to cause, with the giving of notice if required, such
          Indebtedness to become due prior to its stated maturity or such Guarantee
          Obligation to become payable, provided that the aggregate principal amount
          of
          all such Indebtedness and Guarantee Obligations which would then become
          due and
          payable would equal or exceed $25,000,000; or

         

        (f) (i)
          Any Borrower
          shall commence any case, proceeding or other action (A) under any existing
          or
          future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
          insolvency, reorganization or relief of debtors, seeking to have an order
          for
          relief entered with respect to it, or seeking to adjudicate it a bankrupt
          or
          insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
          liquidation, dissolution, composition or other relief with respect to it
          or its
          debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
          or other similar official for it or for all or any substantial part of
          its
          assets, or such Borrower shall make a general assignment for the benefit
          of its
          creditors; or (ii) there shall be commenced against such Borrower any case,
          proceeding or other action of a nature referred to in clause (i) above
          which (A)
          results in the entry of an order for relief or any such adjudication or
          appointment or (B) remains undismissed, undischarged or unbonded for a
          period of
          60 days; or (iii) there shall be commenced against such Borrower any case,
          proceeding or other action seeking issuance of a warrant of attachment,
          execution, restraint or similar process against all or any substantial
          part of
          its assets which results in the entry of an order for any such relief which
          shall not have been vacated, discharged, or stayed or bonded pending appeal
          within 60 days from the entry thereof; or (iv) such Borrower shall take
          any
          action in furtherance of, or indicating its consent to, approval of, or
          acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
          above;
          or (v) such Borrower shall generally not, or shall be unable to, or shall
          admit
          in writing its inability to, pay its debts as they become due; or

         

        (g) (i)
          Any Person
          shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA
          or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding
          deficiency” (as defined in Section 302 of ERISA), whether or not waived, shall
          exist with respect to any Plan or any Lien in favor of the PBGC or a Plan
          shall
          arise on the assets of the Borrower or any Commonly Controlled Entity,
          (iii) a
          Reportable Event shall occur with respect to, or proceedings shall commence
          to
          have a trustee appointed, or a trustee shall be appointed, to administer
          or to
          terminate, any Single Employer Plan, which Reportable Event or commencement
          of
          proceedings or appointment of a trustee is, in the reasonable opinion of
          the
          Required Lenders, likely to result in the termination of such Plan for
          purposes
          of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
          purposes
          of Title IV of ERISA, (v) any Borrower or any Commonly Controlled
          Entity
          shall, or in the reasonable opinion of the Required Lenders is likely to,
          incur
          any liability in connection with a withdrawal from, or the Insolvency or
          Reorganization of, a Multiemployer Plan or (vi) any other event or condition
          shall occur or exist with respect to a Plan; and in each case in clauses
          (i)
          through (vi) above, such event or condition, together with all other such
          events
          or conditions, if any, could have a Material Adverse Effect; or

         

        (h) One
          or more
          judgments or decrees shall be entered against any Borrower involving in
          the
          aggregate a liability (to the extent not paid or covered by insurance)
          of
          $25,000,000 or more, and all such judgments or decrees shall not have been
          vacated, discharged, stayed or bonded pending appeal (or otherwise paid
          or
          satisfied in full) within 90 days after the entry thereof; or

         

        (i) A
          material
          provision of any Loan Document or the guarantee of any of the Guarantors
          under
          the Guarantee Agreement shall cease, for any reason, to be in full force
          and
          effect, or any Loan Party, any of their Affiliates, or any officer or employee
          of any of the foregoing, shall so assert; or

         

        (j) The
          subordination
          provisions contained in any Subordinated Indebtedness shall cease, for
          any
          reason, to be in full force and effect, or any Person that is a party thereto
          or
          holders of at least 25% of the aggregate principal amount of such Subordinated
          Indebtedness shall so assert in writing; or

         

        (k) Any
          Lien created by
          any Security Document shall cease to be enforceable and of the same effect
          and
          priority purported to be created thereby other than because of a release
          permitted hereunder signed by the Administrative Agent; or

         

        (l) A
          Change of Control
          shall occur; or

         

        (m) Any
          court,
          government or governmental agency shall condemn, seize or otherwise appropriate,
          or take custody or control of, all or any material portion (such materiality
          determined by reference to the Borrower and its Subsidiaries taken as a
          whole)
          of the Property of the Borrower or any Guarantor;

         

        then,
          and in any
          such event, (A) if such event is an Event of Default specified in clause
          (i) or
          (ii) of paragraph (f) of this Section, automatically the Commitments shall
          immediately terminate and the Loans hereunder (with accrued and unpaid
          interest
          thereon) and all other amounts owing under this Agreement (including, without
          limitation, all Letter of Credit Outstandings, whether or not the beneficiaries
          of the then outstanding Letters of Credit shall have presented the documents
          required thereunder) and the other Loan Documents shall immediately become
          due
          and payable, and (B) if such event is any other Event of Default, either
          or both
          of the following actions may be taken: (i) with the consent of the Required
          Lenders, the Administrative Agent may, or upon the request of the Required
          Lenders, the Administrative Agent shall, by written notice to the Borrowers,
          declare the Commitments to be terminated forthwith, whereupon the Commitments
          shall immediately terminate; and (ii) with the consent of the Required
          Lenders,
          the Administrative Agent may, or upon the request of the Required Lenders,
          the
          Administrative Agent shall, by written notice to the Borrowers, declare
          the
          Loans hereunder (with accrued and unpaid interest thereon) and all other
          amounts
          owing under this Agreement (including, without limitation, all amounts
          of Letter
          of Credit Outstandings, whether or not the beneficiaries of the then outstanding
          Letters of Credit shall have presented the documents required thereunder)
          the
          other Loan Documents to be due and payable forthwith, whereupon the same
          shall
          immediately become due and payable.

         

        With
          respect to all
          Letters of Credit with respect to which presentment for honor shall not
          have
          occurred at the time of an acceleration pursuant to the preceding paragraph,
          the
          Borrowers shall at such time deposit in a cash collateral account opened
          by the
          Administrative Agent an amount equal to the aggregate then unexpired amount
          that
          is available to be drawn under such Letters of Credit. The Borrowers hereby
          grant to the Administrative Agent, for the benefit of the Issuing Lender
          and the
          L/C Participants, a security interest in such cash collateral to secure
          all
          obligations of the Borrower under this Agreement and the other Loan Documents.
          Amounts held in such cash collateral account shall be applied by the
          Administrative Agent to the payment of drafts drawn under such Letters
          of
          Credit, and the unused portion thereof after all such Letters of Credit
          shall
          have expired, been cancelled or been fully drawn upon, if any, shall be
          applied
          to repay other obligations of the Borrower hereunder and under the Notes.
          After
          all such Letters of Credit shall have expired, been cancelled or been fully
          drawn upon, all Reimbursement Obligations shall have been satisfied and
          all
          other obligations of the Borrower hereunder and under the other Loan Documents
          shall have been paid in full, the balance, if any, in such cash collateral
          account shall be returned to the Borrowers. The Borrowers shall execute
          and
          deliver to the Administrative Agent, for the account of the Issuing Lender
          and
          the L/C Participants, such further documents and instruments as the
          Administrative Agent may reasonably request to evidence the creation and
          perfection of the within security interest in such cash collateral account.
          Except as expressly provided above in this Section, presentment, demand,
          protest
          and all other notices of any kind are hereby expressly waived.

         

        SECTION
          10

         

        THE
          ADMINISTRATIVE AGENT

         

        10.1. Appointment

         

        .
          Each Lender
          hereby irrevocably designates and appoints Fortis as Administrative Agent
          of
          such Lender under this Agreement and the other Loan Documents, and each
          such
          Lender irrevocably authorizes the Administrative Agent, in such capacity,
          to
          take such action on its behalf under the provisions of this Agreement and
          the
          other Loan Documents and to exercise such powers and perform such duties
          as are
          expressly delegated to the Administrative Agent by the terms of this Agreement
          and the other Loan Documents, together with such other powers as are reasonably
          incidental thereto. Notwithstanding any provision to the contrary contained
          elsewhere in this Agreement, the Administrative Agent shall not have any
          duties
          or responsibilities, except those expressly set forth herein, or any fiduciary
          relationship with any Lender, and no implied covenants, functions,
          responsibilities, duties, obligations or liabilities shall be read into
          this
          Agreement or any other Loan Document or otherwise exist against the
          Administrative Agent.

         

        10.2. Delegation
          of
          Duties

         

        .
          The
          Administrative Agent may execute any of its duties under this Agreement
          and the
          other Loan Documents by or through agents or attorneys-in-fact and shall
          be
          entitled to advice of counsel concerning all matters pertaining to such
          duties.
          The Administrative Agent shall not be responsible for the negligence or
          misconduct of any agents or attorneys in-fact selected by it with reasonable
          care.

         

        10.3. Exculpatory
          Provisions

         

        .
          None of the
          Technical Banks nor any of their respective officers, directors, employees,
          agents, attorneys-in-fact or Affiliates shall be (i) liable for any action
          lawfully taken or omitted to be taken by it or such Person under or in
          connection with this Agreement or any other Loan Document (except for its
          or
          such Person’s own gross negligence or willful misconduct) or (ii) responsible in
          any manner to any of the Lenders for any recitals, statements, representations
          or warranties made by any Loan Party or any officer thereof contained in
          this
          Agreement or any other Loan Document or in any certificate, report, statement
          or
          other document referred to or provided for in, or received by the Administrative
          Agent under or in connection with, this Agreement or any other Loan Document
          or
          for the value, validity, effectiveness, genuineness, enforceability or
          sufficiency of this Agreement or any other Loan Document or for any failure
          of
          any Loan Party to perform its obligations hereunder or thereunder. The
          Administrative Agent shall not be under any obligation to any Lender to
          ascertain or to inquire as to the observance or performance of any of the
          agreements contained in, or conditions of, this Agreement or any other
          Loan
          Document, or to inspect the properties, books or records of any Loan
          Party.

         

        10.4. Reliance
          by
          Administrative Agent

         

        .
          The
          Administrative Agent shall be entitled to rely, and shall be fully protected
          in
          relying, upon any Note, writing, resolution, notice, consent, certificate,
          affidavit, letter, telecopy, telex or teletype message, statement, order
          or
          other document or conversation believed by it to be genuine and correct
          and to
          have been signed, sent or made by the proper Person or Persons and upon
          advice
          and statements of legal counsel (including, without limitation, counsel
          to the
          Loan Parties), independent accountants and other experts selected by the
          Administrative Agent. The Administrative Agent may deem and treat the payee
          of
          any Note as the owner thereof for all purposes unless a written notice
          of
          assignment, negotiation or transfer thereof shall have been filed with
          the
          Administrative Agent. The Administrative Agent shall be fully justified
          in
          failing or refusing to take any action under this Agreement or any other
          Loan
          Document unless it shall first receive such advice or concurrence of the
          Required Lenders (or, where unanimous consent of the Lenders is expressly
          required hereunder, such Lenders) as it deems appropriate or it shall first
          be
          indemnified to its satisfaction by the Lenders against any and all liability
          and
          expense which may be incurred by it by reason of taking or continuing to
          take
          any such action. The Administrative Agent shall in all cases be fully protected
          in acting, or in refraining from acting, under this Agreement and the other
          Loan
          Documents in accordance with a request of the Required Lenders (or, where
          unanimous consent of the Lenders or the Required Lenders is expressly required
          hereunder, such Lenders or Required Lenders, as applicable), and such request
          and any action taken or failure to act pursuant thereto shall be binding
          upon
          all the Lenders and all future holders of the Loans.

         

        10.5. Notice
          of
          Default

         

        .
          The
          Administrative Agent shall not be deemed to have knowledge or notice of
          the
          occurrence of any Default or Event of Default hereunder unless the
          Administrative Agent has received notice from a Lender or the Borrower
          referring
          to this Agreement, describing such Default or Event of Default and stating
          that
          such notice is a “notice of default.” In the event that the Administrative Agent
          receives such a notice, the Administrative Agent shall give notice thereof
          to
          the Lenders. The Administrative Agent shall take such action with respect
          to
          such Default or Event of Default as shall be reasonably directed by the
          Required
          Lenders; provided that unless and until the Administrative Agent shall
          have
          received such directions, the Administrative Agent may (but shall not be
          obligated to) take such action, or refrain from taking such action, with
          respect
          to such Default or Event of Default as it shall deem advisable in the best
          interests of the Lenders.

         

        10.6. Non-Reliance
          on
          Administrative Agent and Other Lenders

         

        .
          Each Lender
          expressly acknowledges that neither the Administrative Agent nor any of
          its
          officers, directors, employees, agents, attorneys-in-fact or Affiliates
          has made
          any representations or warranties to it and that no act by the Administrative
          Agent hereafter taken, including any review of the affairs of any Loan
          Party,
          shall be deemed to constitute any representation or warranty by the
          Administrative Agent to any Lender. Each Lender represents to the Administrative
          Agent that it has, independently and without reliance upon the Administrative
          Agent or any other Lender, and based on such documents and information
          as it has
          deemed appropriate, made its own appraisal of and investigation into the
          business, operations, property, financial and other condition and
          creditworthiness of each Loan Party and made its own decision to make its
          Extensions of Credit hereunder and enter into this Agreement. Each Lender
          also
          represents that it will, independently and without reliance upon the
          Administrative Agent or any other Lender, and based on such documents and
          information as it shall deem appropriate at the time, continue to make
          its own
          credit analysis, appraisals and decisions in taking or not taking action
          under
          this Agreement and the other Loan Documents, and to make such investigation
          as
          it deems necessary to inform itself as to the business, operations, property,
          financial and other condition and creditworthiness of each Loan Party.
          Except
          for notices, reports and other documents expressly required to be furnished
          to
          the Lenders by the Administrative Agent hereunder, the Administrative Agent
          shall not have any duty or responsibility to provide any Lender with any
          credit
          or other information concerning the business, operations, property, condition
          (financial or otherwise), prospects or creditworthiness of any Loan Party
          which
          may come into the possession of the Administrative Agent or any of its
          officers,
          directors, employees, agents, attorneys-in-fact or Affiliates.

         

        10.7. Indemnification

         

        .
          The Lenders agree
          to indemnify the Administrative Agent in its capacity as such (to the extent
          not
          reimbursed by the Borrower and without limiting the obligation the Borrower
          to
          do so), ratably according to their respective Commitment Percentages in
          effect
          on the date on which indemnification is sought, from and against any and
          all
          liabilities, obligations, losses, damages, penalties, actions, judgments,
          suits,
          costs, expenses or disbursements of any kind whatsoever which may at any
          time
          (including, without limitation, at any time following the payment of the
          obligations under this Agreement) be imposed on, incurred by or asserted
          against
          the Administrative Agent in any way relating to or arising out of, the
          Commitments, this Agreement, any of the other Loan Documents or any documents
          contemplated by or referred to herein or therein or the transactions
          contemplated hereby or thereby or any action taken or omitted by the
          Administrative Agent under or in connection with any of the foregoing;
          provided
          that no Lender shall be liable for the payment of any portion of such
          liabilities, obligations, losses, damages, penalties, actions, judgments,
          suits,
          costs, expenses or disbursements resulting solely from the Administrative
          Agent’s gross negligence or willful misconduct. The agreements in this
          subsection shall survive the payment of all obligations under this Agreement
          and
          all other amounts payable hereunder.

         

        10.8. Administrative
          Agent in Its Individual Capacity

         

        .
          The
          Administrative Agent and its Affiliates may make loans to, accept deposits
          from
          and generally engage in any kind of business with any Loan Party as though
          the
          Administrative Agent were not the Administrative Agent hereunder and under
          the
          other Loan Documents. With respect to the Extensions of Credit made by
          it, the
          Administrative Agent shall have the same rights and powers under this Agreement
          and the other Loan Documents as any Lender and may exercise the same as
          though
          it were not the Administrative Agent, and the terms “Lender” and “Lenders” shall
          include the Administrative Agent in its individual capacity.

         

        10.9. Successor
          Administrative Agent

         

        .
          The
          Administrative Agent may resign as Administrative Agent upon 30 days’ notice to
          the Lenders. If the Administrative Agent shall resign as Administrative
          Agent
          under this Agreement and the other Loan Documents, then the Required Lenders
          shall appoint from among the Lenders a successor agent for the Lenders,
          which
          successor agent, with the consent of the Borrowers (such consent not to
          be
          unreasonably withheld or delayed), shall succeed to the rights, powers
          and
          duties of the Administrative Agent hereunder. Effective upon such appointment
          and approval, the term “Administrative Agent” shall mean such successor agent,
          and the former Administrative Agent’s rights, powers and duties as
          Administrative Agent shall be terminated, without any other or further
          act or
          deed on the part of such former Administrative Agent or any of the parties
          to
          this Agreement or any holders of the Loans. After any retiring Administrative
          Agent’s resignation as Administrative Agent, the provisions of this Section 10
          shall inure to its benefit as to any actions taken or omitted to be taken
          by it
          while it was Administrative Agent under this Agreement and the other Loan
          Documents. The Administrative Agent may be removed at any time with or
          without
          cause by the Required Lenders (which for this purpose, shall not include
          the
          Loans or Commitments of the Administrative Agent), provided that
          on the
          effectiveness of such removal the Obligations owing to such Administrative
          Agent
          as a Lender are repaid in full and as an Issuing Lender are cash collateralized
          or otherwise secured. If the Administrative Agent is removed, the procedures
          set
          forth in this Section 10.9 shall apply in appointing a successor Administrative
          Agent.

         

        10.10. Issuing
          Lender

         

        .
          The provisions of
          this Section 10 applicable to the Administrative Agent shall apply to the
          Issuing Lender in the performance of its duties under the Loan Documents,
          mutatis mutandis.

         

        10.11. Others

         

        .
          None of the Joint
          Lead Arrangers, the Joint Bookrunners, the Syndication Agent, nor the
          Documentation Agent, in such respective capacities, shall have any duties
          or
          responsibilities, or incur any liabilities, under this Agreement or the
          other
          Loan Documents.

         

        10.12. Hedging
          Arrangements

         

        .
          To the extent any
          Affiliate of a Lender is a party to a Hedging Agreement with the Borrowers
          and
          thereby becomes a beneficiary of the Liens described in Section 4.16 hereof
          pursuant to the Security Documents, such Affiliate of a Lender shall be
          deemed
          to appoint the Administrative Agent its nominee and agent, to act for and
          on
          behalf of such Affiliate in connection with the Security Documents and
          to be
          bound by the terms of this Section 10.

         

        SECTION
          11

         

        MISCELLANEOUS

         

        11.1. Amendments
          and
          Waivers

         

        .
          Neither this
          Agreement nor any other Loan Document, nor any terms hereof or thereof
          may be
          amended, supplemented or modified except in accordance with the provisions
          of
          this subsection. The Required Lenders may, or, with the written consent
          of the
          Required Lenders, the Administrative Agent may, from time to time, (a)
          enter
          into with the applicable Loan Parties written amendments, supplements or
          modifications hereto and to the other Loan Documents for the purpose of
          adding
          any provisions to this Agreement or the other Loan Documents or changing
          in any
          manner the rights of the Lenders or of the applicable Loan Parties hereunder
          or
          thereunder or (b) waive, on such terms and conditions as the Required Lenders
          or
          the Administrative Agent, as the case may be, may specify in such instrument,
          any of the requirements of this Agreement or the other Loan Documents or
          any
          Default or Event of Default and its consequences; provided, however, that
          no
          such waiver and no such amendment, supplement or modification shall (i)
          reduce
          the principal amount, or extend the scheduled date of final maturity, of
          any
          Loan, or reduce the stated rate of any interest or fee payable hereunder
          or
          extend the scheduled date of any payment thereof or increase the principal
          amount or extend the expiration date of any Lender’s Commitments, or change the
          limits on Letter of Credit Outstandings as set forth in subsection 3.1(a)(i),
          in
          each case without the consent of each Lender affected thereby, (ii) amend,
          modify or waive the definition of Technical Lenders, any provision of Section
          4.9, Section 4.10, Section 4.16, or Section 7.11, (iii) amend, modify or
          waive
          any provision of this subsection or reduce the percentage specified in
          the
          definition of Required Lenders or the Required Lenders (or modify any provision
          of this Agreement or any other Loan Document to provide that an action
          currently
          requiring the approval of or consent by the Required Lenders may be taken
          with
          the consent or approval by a lower percentage of Lenders), or consent to
          the
          assignment or transfer by any Loan Party of any of its rights and obligations
          under this Agreement and the other Loan Documents other than in accordance
          with
          the terms of the applicable Loan Documents, in each case without the written
          consent of all the Lenders, (iv) release, or subordinate the interest of
          the
          Administrative Agent in, any of the collateral for the Obligations hereunder
          (except as specifically provided herein) or release any of the Guarantors
          from
          their respective obligations under the Guarantee Agreement without the
          written
          consent of each Lender, (v) change subsection 4.8(a) or subsection 11.7(a)
          in a
          manner that would alter the pro rata sharing of payments required thereby,
          without the written consent of each Lender, (vi) amend, modify or waive
          any
          provision of Section 10 without the written consent of the then Administrative
          Agent and Issuing Lender, or (vii) amend, modify or waive any provision
          of this
          Agreement or any other Loan Document prior to the initial Borrowing Date
          without
          the written consent of each Lender. Any such waiver and any such amendment,
          supplement or modification shall apply equally to each of the Lenders and
          shall
          be binding upon the Loan Parties, the Lenders, the Administrative Agent
          and all
          future holders of the Loans. In the case of any waiver, the Loan Parties,
          the
          Lenders and the Administrative Agent shall be restored to their former
          positions
          and rights hereunder and under the other Loan Documents, and any Default
          or
          Event of Default waived shall be deemed to be cured and not continuing;
          no such
          waiver shall extend to any subsequent or other Default or Event of Default
          or
          impair any right consequent thereon.

         

        11.2. Notices

         

        .
          All notices,
          requests and demands to or upon the respective parties hereto to be effective
          shall be in writing (including by facsimile transmission) and, unless otherwise
          expressly provided herein, shall be deemed to have been duly given or made
          (a)
          in the case of delivery by hand or by courier service, when delivered,
          (b) in
          the case of delivery by mail, three Business Days after being deposited
          in the
          mails, postage prepaid, or (c) in the case of delivery by facsimile
          transmission, when sent and receipt has been confirmed, addressed as follows
          in
          the case of the Borrowers, the Administrative Agent, and the other Technical
          Banks or to such other address as may be hereafter notified by the respective
          parties hereto:

         

        The
          Borrower: El
          Paso Production
          Holding Company

        1001
          Louisiana
          Street

        Houston,
          TX
          77002

        Attention:
          John J.
          Hopper

        Fax:
          (713)
          420-2708

        Email:
john.hopper@elpaso.com

        

        El
          Paso Production
          Company

        1001
          Louisiana
          Street

        Houston,
          TX
          77002

        Attention:
          John J.
          Hopper

        Fax:
          (713)
          420-2708

        Email:
john.hopper@elpaso.com

        

        El
          Paso Energy
          Raton Corporation

        1001
          Louisiana
          Street

        Houston,
          TX
          77002

        Attention:
          John J.
          Hopper

        Fax:
          (713)
          420-2708

        Email:
john.hopper@elpaso.com

        

        El
          Paso Production
          GOM Inc.

        1001
          Louisiana
          Street

        Houston,
          TX
          77002

        Attention:
          John J.
          Hopper

        Fax:
          (713)
          420-2708

        Email:
john.hopper@elpaso.com

        

        with
          a copy
          to:

        

        Andrews
          Kurth
          LLP

        600
          Travis Street,
          Suite 4200

        Houston,
          Texas
          77002

        Attention:
          Randy
          Bryant

        Fax:
          (713)
          220-4285

        Email:
randybryant@akllp.com

        

        The
          Administrative
          Agent: Fortis
          Capital
          Corp.

        Millennium
          I

        15455
          N. Dallas
          Parkway, Suite 1400

        Addison,
          Texas
          75001

        Attention:
          Deirdre
          Sanborn

        Fax:
          (214)
          754-5982

        Email:
          deirdre.sanborn@fortiscapitalusa.com

        

        With
          a copy
          to:

        

        Patton
          Boggs
          LLP

        2001
          Ross Avenue,
          Suite 3000

        Dallas,
          Texas
          75201

        Attention:
          Robert
          S. Rendell

        Fax:
          (214)
          758-1550

        Email:
          rrendell@pattonboggs.com

        

        The
          Other Technical
          Banks: The
          Royal Bank of
          Scotland plc

        101
          Park Avenue,
          12th
          Floor

        New
          York, New York
          10178

        Attention:
          Caroline
          Cancel

        Fax:
          (212)
          401-1407

        Email:
          caroline.cancel@rbos.com

        

        With
          a copy
          to:

        600
          Travis Street,
          Suite 6500

        Houston,
          Texas
          77002

        Attention:
          Scott
          Joyce

        Fax:
          (713)
          221-2430

        Email:
          scott.joyce@rbos.com

        

        The
          Bank of Nova
          Scotia

        1100
          Louisiana,
          Suite 3000

        Houston,
          TX
          77002

        Attention:
          Joseph
          P. Lattanzi

        Fax:
          (713)
          752-2425

        Email:
          joe_lattanzi@scotiacapital.com

        

        provided
          that any
          notice, request or demand to or upon the Administrative Agent or the Lenders
          pursuant to subsection 2.2, 4.3, 4.5 or 4.8 shall not be effective until
          received.

         

        11.3. No
          Waiver;
          Cumulative Remedies

         

        .
          No failure to
          exercise and no delay in exercising, on the part of the Administrative
          Agent,
          the Issuing Lender or any Lender, any right, remedy, power or privilege
          hereunder or under the other Loan Documents shall operate as a waiver thereof;
          nor shall any single or partial exercise of any right, remedy, power or
          privilege hereunder preclude any other or further exercise thereof or the
          exercise of any other right, remedy, power or privilege. The rights, remedies,
          powers and privileges herein provided are cumulative and not exclusive
          of any
          rights, remedies, powers and privileges provided by law.

         

        11.4. Survival
          of
          Representations and Warranties

         

        .
          All
          representations and warranties made hereunder, in the other Loan Documents
          and
          in any document, certificate or statement delivered pursuant hereto or
          in
          connection herewith shall survive the execution and delivery of this Agreement
          and the making of the Extensions of Credit hereunder.

         

        11.5. Payment
          of Expenses
          and Taxes

         

        .
          The Borrowers
          agree (a) to pay or reimburse the Administrative Agent and the other Technical
          Banks and their Affiliates for all their reasonable and documented out-of-pocket
          costs and expenses incurred in connection with the development, syndication,
          preparation and execution of, and any amendment, supplement or modification
          to,
          this Agreement and the other Loan Documents and any other documents prepared
          in
          connection herewith or therewith, and the consummation and administration
          of the
          transactions contemplated hereby and thereby, including, without limitation,
          the
          reasonable fees and disbursements of (i) counsel to the Administrative
          Agent and
          (ii) the Administrative Agent customarily charged by it in connection with
          syndicated credits, (b) to pay or reimburse each Lender and the Administrative
          Agent for all its reasonable and documented costs and expenses incurred
          in
          connection with the enforcement or preservation of any rights under this
          Agreement, the other Loan Documents and any such other documents, including,
          without limitation, the reasonable fees and disbursements of counsel to
          the
          Administrative Agent and to the several Lenders, (c) to pay, indemnify,
          and hold
          each Lender, the Administrative Agent, the Joint Lead Arrangers, the Joint
          Bookrunners and the Documentation Agent (and their respective Affiliates
          and
          their respective directors, officers, employees and agents) harmless from,
          any
          and all recording and filing fees and any and all liabilities with respect
          to,
          or resulting from any delay in paying, stamp, excise and other taxes, if
          any,
          which may be payable or determined to be payable in connection with the
          execution and delivery of, or consummation or administration of any of
          the
          transactions contemplated by, or any amendment, supplement or modification
          of,
          or any waiver or consent under or in respect of, this Agreement, the other
          Loan
          Documents and any such other documents, and (d) to pay, indemnify, and
          hold each
          Lender, the Administrative Agent, the Joint Lead Arrangers, the Joint
          Bookrunners and the Documentation Agent (and their respective directors,
          officers, employees, agents and affiliates) harmless from and against any
          and
          all other liabilities, obligations, losses, damages, penalties, actions,
          judgments, suits, costs, expenses or disbursements of any kind or nature
          whatsoever with respect to the execution, delivery, enforcement, performance
          and
          administration of this Agreement, the other Loan Documents or the use or
          the
          proposed use of proceeds contemplated by this Agreement, including, without
          limitation, any of the foregoing relating to the violation of, noncompliance
          with or liability under, any Environmental Law applicable to any Loan Party
          or
          any of the Properties (all the foregoing in this clause (d), collectively,
          the
“Indemnified
          Liabilities”),
          provided that
          the Borrowers shall have no obligation under this clause (d) to any
          Administrative Agent, the Joint Lead Arrangers, the Joint Bookrunners and
          the
          Documentation Agent or any Lender (or any of their respective directors,
          officers, employers, agents or affiliates), with respect to indemnified
          liabilities to the extent such liabilities are determined by a court of
          competent jurisdiction by final and nonappealable judgment to have resulted
          from
          the gross negligence or willful misconduct of such Person. Without limiting
          the
          foregoing, and to the extent permitted by applicable law, the Borrowers
          agree
          not to assert, and hereby waives, and agrees to cause each of its Subsidiaries
          not to assert and to so waive, all rights for contribution or any other
          rights
          of recovery with respect to all claims, demands, penalties, fines, liabilities,
          settlements, damages, costs and expenses of whatever kind or nature, under
          or
          related to Environmental Laws, that any of them might have by statute or
          otherwise against any Person entitled to indemnification under this subsection
          11.5. The agreements in this subsection shall survive repayment of the
          Loans and
          all other amounts payable hereunder and the termination of this
          Agreement.

         

        11.6. Successors
          and
          Assigns; Participations and Assignments

         

        .
          (a) This
          Agreement shall be binding upon and inure to the benefit of the Borrowers,
          the
          Lenders, the Administrative Agent, all future holders of the Loans and
          any Notes
          hereunder and their respective successors and assigns, except that the
          Borrowers
          may not assign or transfer any of its rights or obligations under this
          Agreement
          without the prior written consent of each Lender.

         

        (a) Any
          Lender may, in
          the ordinary course of its commercial banking or lending business and in
          accordance with applicable law and at no cost or expense to the Borrowers,
          at
          any time sell to one or more banks or other entities (“Participants”)
          participating interests in any Loan owing to such Lender, any Commitment
          of such
          Lender or any other interest of such Lender hereunder and under the other
          Loan
          Documents. In the event of any such sale by a Lender of a participating
          interest
          to a Participant, (i) such Lender’s obligations under this Agreement to the
          other parties to this Agreement shall remain unchanged, (ii) such Lender
          shall
          remain solely responsible for the performance thereof, (iii) such Lender
          shall
          remain the holder of any such Loan (and any Note evidencing such Loan)
          for all
          purposes under this Agreement and the other Loan Documents, (iv) the Borrowers
          and the Administrative Agent shall continue to deal solely and directly
          with
          such Lender in connection with such Lender’s rights and obligations under this
          Agreement and the other Loan Documents, and (v) in any proceeding under
          the
          Bankruptcy Code the Lender shall be, to the extent permitted by law, the
          sole
          representative with respect to the obligations held in the name of such
          Lender,
          whether for its own account or for the account of any Participant No Lender
          shall be entitled to create in favor of any Participant, in the participation
          agreement pursuant to which such Participant’s participating interest shall be
          created or otherwise, any right to vote on, consent to or approve any matter
          relating to this Agreement or any other Loan Document except for those
          specified
          in clauses (i) and (ii) of the proviso to subsection 11.1. The Borrowers
          agree
          that each Participant shall be entitled to the benefits of subsections
          4.13 and
          4.14 with respect to its participation in the Commitments and the Loans
          and
          Letters of Credit outstanding from time to time as if it was a Lender;
          provided
          that, in the case of subsection 4.13, such Participant shall have complied
          with
          the requirements of said subsection and provided, further, that no Participant
          shall be entitled to receive any greater amount pursuant to any such subsection
          than the transferor Lender would have been entitled to receive in respect
          of the
          amount of the participation transferred by such transferor Lender to such
          Participant had no such transfer occurred.

         

        (b) Any
          Lender may, in
          the ordinary course of its commercial banking or lending business and in
          accordance with applicable law, at any time and from time to time assign
          to any
          Lender or any Affiliate thereof or, with the prior written consent of the
          Administrative Agent and the Borrowers (which in each case shall not be
          unreasonably withheld), to an additional bank or financial institution
          or other
          entity (an “Assignee”)
          all or any part
          of its rights and obligations under this Agreement and the other Loan Documents
          including, without limitation, its Commitments, L/C Commitments, Loans
          and L/C
          Participating Interests, pursuant to an Assignment and Acceptance, substantially
          in the form of Exhibit G, executed by such Assignee, such assigning Lender
          (and,
          in the case of an Assignee that is not then a Lender, by the Borrowers,
          the
          Administrative Agent and each Issuing Lender) and delivered to the
          Administrative Agent for its acceptance and recording in the Register,
          provided
          that (i) (unless the Borrower and the Administrative Agent otherwise consent
          in
          writing) no such transfer to an Assignee (other, than a Lender or any Affiliate
          thereof) shall be in an aggregate principal amount less than $1,000,000
          in the
          aggregate (or, if less, the full amount of such assigning Lender’s Loans, L/C
          Participating Interests and Commitments), and (ii) if any Lender assigns
          all or
          any part of its rights and obligations under this Agreement to one of its
          Affiliates in connection with or in contemplation of the sale or other
          disposition of its interest in such Affiliate, the Borrowers’ prior written
          consent shall be required for such assignment (which shall not be unreasonably
          withheld). Upon such execution, delivery, acceptance and recording, from
          and
          after the effective date determined pursuant to such Assignment and Acceptance,
          (x) the Assignee thereunder shall be a party hereto and, to the extent
          provided
          in such Assignment and Acceptance, have the rights and obligations of a
          Lender
          hereunder with a Commitment and L/C Commitment as set forth therein, and
          (y) the
          assigning Lender thereunder shall, to the extent provided in such Assignment
          and
          Acceptance, be released from its obligations under this Agreement (and,
          in the
          case of an Assignment and Acceptance covering all or the remaining portion
          of an
          assigning Lender’s rights and obligations under this Agreement, such assigning
          Lender shall cease to be a party hereto). Notwithstanding any provision
          of this
          paragraph (c) and paragraph (e) of this subsection, the consent of the
          Borrowers
          shall not be required, and, unless requested by the Assignee and/or the
          assigning Lender, new Notes shall not be required to be executed and delivered
          by the Borrowers, for any assignment which occurs at any time when any
          of the
          events described in Section 9 shall have occurred and be
          continuing.

         

        (c) The
          Administrative
          Agent, on behalf of the Borrowers, shall maintain at the address of the
          Administrative Agent referred to in subsection 11.2 a copy of each Assignment
          and Acceptance delivered to it and a register (the “Register”)
          for the
          recordation of the names and addresses of the Lenders and the Commitments
          of,
          and principal amounts of the Loans owing to, each Lender from time to time.
          The
          entries in the Register shall be conclusive, in the absence of manifest
          error,
          and the Borrowers, the Administrative Agent and the Lenders may (and, in
          the
          case of any Loan or other obligation hereunder not evidenced by a Note,
          shall)
          treat each Person whose name is recorded in the Register as the owner of
          a Loan
          or other obligation hereunder as the owner thereof for all purposes of
          this
          Agreement and the other Loan Documents, notwithstanding any notice to the
          contrary. Any assignment of any Loan or other obligation hereunder not
          evidenced
          by a Note shall be effective only upon appropriate entries with respect
          thereto
          being made in the Register. The Register shall be available for inspection
          by
          the Borrowers or any Lender at any reasonable time and from time to time
          upon
          reasonable prior notice.

         

        (d) Notwithstanding
          anything in this Agreement to the contrary, no assignment under subsection
          11.6(c) of any rights or obligations under or in respect of the Loans,
          the Notes
          or the Letters of Credit shall be effective unless and until the Administrative
          Agent shall have recorded the assignment pursuant to subsection 11.6(d).
          Upon
          its receipt of an Assignment and Acceptance executed by an assigning Lender
          and
          an Assignee (and, in the case of an Assignee that is not then a Lender
          or an
          affiliate thereof, by the Borrowers and the Administrative Agent) together
          with
          payment to the Administrative Agent of a registration and processing fee
          of
          $3,500 (other than in the case of an assignment by a Lender to an affiliate
          of
          such Lender), the Administrative Agent shall (i) promptly accept such Assignment
          and Acceptance and (ii) on the effective date determined pursuant thereto
          record
          the information contained therein in the Register and give notice of such
          acceptance and recordation to the Lenders and the Borrowers. On or prior
          to such
          effective date, the assigning Lender shall surrender any outstanding Notes
          held
          by it all or a portion of which are being assigned, and the Borrowers,
          at its
          own expense, shall, upon the request to the Administrative Agent by the
          assigning Lender or the Assignee, as applicable, execute and deliver to
          the
          Administrative Agent (in exchange for the outstanding Notes of the assigning
          Lender) a new Note to the order of such Assignee in an amount equal to
          the
          lesser of (A) the amount of such Assignee’s Commitment and (B) the aggregate
          principal amount of all Loans made by such Assignee, after giving effect
          to such
          Assignment and Acceptance and, if the assigning Lender has retained a Commitment
          hereunder, a new Note to the order of the assigning Lender in an amount
          equal to
          the lesser of (A) the amount of such Lender’s Commitment and (B) the aggregate
          principal amount of all Loans made by such Lender, after giving effect
          to such
          Assignment and Acceptance. Any such new Notes shall be dated the Closing
          Date
          and shall otherwise be in the form of the Note replaced thereby. Any Notes
          surrendered by the assigning Lender shall be returned by the Administrative
          Agent to the Borrowers marked “canceled.”

         

        (e) The
          Borrowers
          authorize each Lender to disclose to any Participant or Assignee (each,
          a
“Transferee”)
          and any
          prospective Transferee, any and all financial information in such Lender’s
          possession concerning the Loan Parties and their Affiliates which has been
          delivered to such Lender by or on behalf of the Borrowers pursuant to this
          Agreement or which has been delivered to such Lender by or on behalf of
          the
          Borrower in connection with such Lender’s credit evaluation of the Loan Parties
          and their Affiliates prior to becoming a party to this Agreement.

         

        (f) For
          avoidance of
          doubt, the parties to this Agreement acknowledge that the provisions of
          this
          subsection concerning assignments of Loans and Notes relate only to absolute
          assignments and that such provisions do not prohibit assignments creating
          security interests, including, without limitation, any pledge or assignment
          by a
          Lender of any Loan or Note to any Federal Reserve Bank in accordance with
          applicable law.

         

        11.7. Adjustments;
          Set-off

         

        .
          (a) If any Lender
          (a “Benefitted
          Lender”)
          shall at any
          time receive any payment of all or part of its Loans or Reimbursement
          Obligations, or interest thereon, or receive any collateral in respect
          thereof
          (whether voluntarily or involuntarily, by set-off, pursuant to events or
          proceedings of the nature referred to in subsection 9(f), or otherwise),
          in a
          greater proportion than any such payment to or collateral received by any
          other
          Lender, if any, in respect of such other Lender’s Loans or Reimbursement
          Obligations, or interest thereon, such Benefitted Lender shall purchase
          for cash
          from the other Lenders a participating interest in such portion of each
          such
          other Lender’s Loans or Reimbursement Obligations, or shall provide such other
          Lenders with the benefits of any such collateral, or the proceeds thereof,
          as
          shall be necessary to cause such Benefitted Lender to share the excess
          payment
          or benefits of such collateral or proceeds ratably with each of the Lenders;
          provided, however, that if all or any portion of such excess payment or
          benefits
          is thereafter recovered from such Benefitted Lender, such purchase shall
          be
          rescinded, and the purchase price and benefits returned, to the extent
          of such
          recovery, but without interest.

         

        (a) In
          addition to any
          rights and remedies of the Lenders provided by law, each Lender shall have
          the
          right, without prior notice to the Borrowers, any such notice being expressly
          waived by the Borrowers to the extent permitted by applicable law, upon
          any
          amount becoming due and payable by the Borrowers hereunder (whether at
          the
          stated maturity, by acceleration or otherwise) to set-off and appropriate
          and
          apply against such amount any and all deposits (general or special, time
          or
          demand, provisional or final), in any currency, and any other credits,
          indebtedness or claims, in any currency, in each case whether direct or
          indirect, absolute or contingent, matured or unmatured, at any time held
          or
          owing by such Lender or any branch or agency thereof to or for the credit
          or the
          account of the Borrowers, as the case may be. Each Lender agrees promptly
          to
          notify the Borrowers and the Administrative Agent after any such set-off
          and
          application made by such Lender, provided that, to the extent permitted
          by
          applicable law, the failure to give such notice shall not affect the validity
          of
          such set-off and application.

         

        11.8. Counterparts

         

        .
          This Agreement
          may be executed by one or more of the parties to this Agreement on any
          number of
          separate counterparts (including by facsimile transmission), and all of
          said
          counterparts taken together shall be deemed to constitute one and the same
          instrument. A set of the copies of this Agreement signed by all the parties
          shall be lodged with the Borrowers and the Administrative Agent

         

        11.9. Severability

         

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

         

        11.10. Integration

         

        .
          This Agreement
          and the other Loan Documents represent the agreement of the Borrowers,
          the other
          Loan Parties, the Administrative Agent and the Lenders with respect to
          the
          subject matter hereof, and there are no promises, undertakings, representations
          or warranties by the Administrative Agent or any Lender relative to subject
          matter hereof not expressly set forth or referred to herein or in the other
          Loan
          Documents.

         

        11.11. GOVERNING
          LAW

         

        .
          THIS AGREEMENT
          AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED
          BY,
          AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE
          OF NEW
          YORK. 

         

        11.12. Submission
          To
          Jurisdiction; Waivers

         

        .
          Each Borrower
          hereby irrevocably and unconditionally:

         

        (a) submits
          for itself
          and its property in any legal action or proceeding relating to this Agreement
          and the other Loan Documents to which it is a party, or for recognition
          and
          enforcement of any judgment in respect thereof, to the non-exclusive general
          jurisdiction of the Courts of the State of New York, and federal courts
          sitting
          therein, and appellate courts from any thereof;

         

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

         

        (c) agrees
          that service
          of process in any such action or proceeding may be effected by mailing
          a copy
          thereof by registered or certified mail (or any substantially similar form
          of
          mail), postage prepaid, to the Borrowers at their address set forth in
          subsection 11.2 or at such other address of which the Administrative Agent
          shall
          have been notified pursuant thereto;

         

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

         

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

         

        11.13. Acknowledgments

         

        .
          The Borrowers
          hereby acknowledge that:

         

        (a) they
          have been
          advised by counsel in the negotiation, execution and delivery of this Agreement
          and the other Loan Documents;

         

        (b) neither
          the
          Administrative Agent nor any Lender has any fiduciary relationship with
          or duty
          to the Borrowers arising out of or in connection with this Agreement or
          any of
          the other Loan Documents, and the relationship between Administrative Agent
          and
          Lenders, on one hand, and the Borrower, on the other hand, in connection
          herewith or therewith is solely that of debtor and creditor; and

         

        (c) no
          joint venture is
          created hereby or by the other Loan Documents or otherwise exists by virtue
          of
          the transactions contemplated hereby among the Lenders or among the Borrower
          and
          the Lenders.

         

        11.14. WAIVERS
          OF JURY
          TRIAL

         

        .
          THE BORROWERS,
          THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY KNOWINGLY AND INTENTIONALLY,
          IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
          OR
          PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR
          ANY
          COUNTERCLAIM THEREIN.

         

        11.15. Release
          of
          Borrowing Base Properties

         

        .
          The
          Administrative Agent is hereby authorized by the Lenders to execute, at
          the cost
          and expense of the Borrowers and pursuant to documentation reasonably acceptable
          to the Administrative Agent, partial releases of the Borrowing Base Properties
          to the extent such Borrowing Base Properties are sold in accordance with
          the
          terms of the Mortgage and subsection 8.6.

         

        11.16. Limitation
          on
          Interest

         

        .
          The Borrowers,
          the Loan Parties, the Administrative Agent and the Lenders intend to contract
          in
          strict compliance with applicable usury law from time to time in effect.
          In
          furtherance thereof such persons stipulate and agree that none of the terms
          and
          provisions contained in the Loan Documents shall ever be construed to provide
          for interest in excess of the maximum amount of interest permitted to be
          charged
          by applicable law from time to time in effect. Neither any Loan Party nor
          any
          present or future guarantors, endorsers, or other Persons hereafter becoming
          liable for payment of any Obligation shall ever be liable for unearned
          interest
          thereon or shall ever be required to pay interest thereon in excess of
          the
          maximum amount that may be lawfully charged under applicable law from time
          to
          time in effect, and the provisions of this section shall control over all
          other
          provisions of the Loan Documents which may be in conflict or apparent conflict
          herewith. The Administrative Agent and the Lenders expressly disavow any
          intention to charge or collect excessive unearned interest or finance charges
          in
          the event the maturity of any Obligation is accelerated. If (a) the maturity
          of
          any Obligation is accelerated for any reason, (b) any Obligation is prepaid
          and
          as a result any amounts held to constitute interest are determined to be
          in
          excess of the legal maximum, or (c) any Lender or may other holder of any
          or all
          of the Obligations shall otherwise collect moneys which are determined
          to
          constitute interest which would otherwise increase the interest on any
          or all of
          the Obligations to an amount in excess of that permitted to be charged
          by
          applicable law then in effect, then all sums determined to constitute interest
          in excess of such legal limit shall, without penalty, be promptly applied
          to
          reduce the then outstanding principal of the related Obligations or, at
          such
          Lender’s or holder’s option, promptly returned to Borrower or the other payor
          thereof upon such determination. In determining whether or not the interest
          paid
          or payable, under any specific circumstance, exceeds the maximum amount
          permitted under applicable law, Lenders, the Administrative Agent and the
          Loan
          Parties (and any other payers thereof) shall to the greatest extent permitted
          under applicable law, (i) characterize any non-principal payment as an
          expense,
          fee or premium rather than as interest, (ii) exclude voluntary prepayments
          and
          the effects thereof, and (iii) amortize, prorate, allocate, and spread
          the total
          amount of interest throughout the entire contemplated term of the instruments
          evidencing the Obligations in accordance with the amounts outstanding from
          time
          to time thereunder and the maximum legal rate of interest from time to
          time in
          effect under applicable law in order to lawfully charge the maximum amount
          of
          interest permitted under applicable law. To the extent that the interest
          rate
          laws of the State of Texas are applicable to this Agreement, any Note or
          any
          other Loan Document, the applicable interest rate ceiling is the indicated
          (weekly) ceiling determined in accordance with Chapter 303 of the Texas
          Finance
          Code, as amended, and, to the extent that any Obligation under this Agreement,
          any Note or any other Loan Document is deemed an open end account as such
          term
          is defined in Chapter 302 of the Texas Finance Code, as amended, Administrative
          Agent retains the right to modify the interest rate in accordance with
          applicable law.

         

        11.17. Joint
          and Several
          Obligations of Borrowers

         

        .

         

        (a) The
          Borrowers state
          and acknowledge that: (a) pursuant to this Agreement, the Borrowers desire
          to
          utilize their borrowing potential on a consolidated basis to the same extent
          possible if they were merged into a single entity and that this Agreement
          reflects the establishment of credit facilities which would not otherwise
          be
          available to such entity if each Borrower were not jointly and severally
          liable
          for payment of the Indebtedness; (b) each Borrower has determined that
          it will
          benefit specifically and materially from the advances of credit contemplated
          by
          this Agreement; (c) it is both a condition precedent to the obligations
          of the
          Lenders hereunder and a desire of the Borrowers that each Borrower execute
          and
          deliver this Agreement; and (d) each Borrower has requested and bargained
          for
          the structure and terms of and security for the advances contemplated by
          this
          Agreement.

         

        (b) Each
          Borrower
          hereby irrevocably and unconditionally: (a) agrees that it is jointly and
          severally liable to Lenders for the full and prompt payment of the Indebtedness
          and the performance by each Borrower of its obligations hereunder in accordance
          with the terms hereof; (b) agrees to fully and promptly perform all of
          its
          Obligations hereunder with respect to each advance of credit hereunder
          as if
          such advance had been made directly to it; and (c) agrees as a primary
          obligation to indemnify Lenders on demand for and against any loss incurred
          by a
          Lender as result of any of the obligations of any one or more of the Borrowers
          being or becoming void, voidable, unenforceable or ineffective for any
          reason
          whatsoever, whether or not known to a Lender or any Person, the amount
          of such
          loss being the amount which each Lender would otherwise have been entitled
          to
          recover from any one or more of the Borrowers whose obligation becomes
          void,
          voidable, unenforceable or ineffective.

         

        It
          is the intent of
          each Borrower that the Indebtedness, obligations and liability hereunder
          of no
          one of them be subject to challenge on any basis, including, without limitation,
          pursuant to any applicable fraudulent conveyance or fraudulent transfer
          laws.
          Accordingly, as of the date hereof, the liability of each Borrower under
          this
          Section 11.18, together with all of its other liabilities to all Persons
          as of
          the date hereof and as of any other date on which a transfer or conveyance
          is
          deemed to occur by virtue of this Agreement, calculated in amount sufficient
          to
          pay its probable net liabilities on its existing Indebtedness as the same
          become
          absolute and matured (“Dated
          Liabilities”)
          is, and is to
          be, less than the amount of the aggregate of a fair valuation of its property
          as
          of such corresponding date (“Dated
          Assets”).
          To this end,
          each Borrower under this Section 11.18, (a) grants to and recognizes in
          each
          other Borrower, ratably, rights of subrogation and contribution in the
          amount,
          if any, by which the Dated Assets of such Borrower, but for the aggregate
          of
          subrogation and contribution in its favor recognized herein, would exceed
          the
          Dated Liabilities of such Borrower or, as the case may be, (b) acknowledges
          receipt of and recognizes its right to subrogation and contribution ratably
          from
          each of the other Borrowers in the amount, if any, by which the Dated
          Liabilities of such Borrower, but for the aggregate of subrogation and
          contribution in its favor recognized herein, would exceed the Dated Assets
          of
          such Borrower under this Section 11.18. In recognizing the value of the
          Dated
          Assets and the Dated Liabilities, it is understood that Borrowers will
          recognize, to at least the same extent of their aggregate recognition of
          liabilities hereunder, their rights to subrogation and contribution hereunder.
          It is a material objective of this Section 11.18 that each Borrower recognizes
          rights to subrogation and contribution rather than be deemed to be insolvent
          (or
          in contemplation thereof) by reason of an arbitrary interpretation of its
          joint
          and several obligations hereunder. In addition to and not in limitation
          of the
          foregoing provisions of this Section 11.18, the Borrowers and Lenders hereby
          agree and acknowledge that it is the intent of each Borrower and of each
          Lender
          that the obligations of each Borrower hereunder be in all respects in compliance
          with, and not be voidable pursuant to, applicable fraudulent conveyance
          and
          fraudulent transfer laws.

         

        11.18. USA
          Patriot Act
          Notice

         

        .
          Each Lender and
          the Administrative Agent (for itself and not on behalf of any Lender) hereby
          notifies the Borrower that pursuant to the requirements of the USA Patriot
          Act
          (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Act”),
          it is required
          to obtain, verify and record information that identifies the Borrower,
          which
          information includes the name and address of the Borrower and other information
          that will allow such Lender or the Administrative Agent, as applicable,
          to
          identify the Lender in accordance with the Act.

         

        [Remainder
          of Page
          Intentionally Left Blank]

         

        

        
           

          
            
            

            
              

            

          

           

        

        IN
          WITNESS WHEREOF
          the parties hereto have caused this Agreement to be duly executed and delivered
          by their proper and duly authorized officers as of the day and year first
          above
          written.

         

        
          EL
            PASO PRODUCTION HOLDING COMPANY

          

          

          By:   

          Name: 

          Title:
 

          

          

          

          EL
            PASO PRODUCTION COMPANY

          

          

          By: 

          Name: 

          Title:
 

          

          

          

          EL
            PASO ENERGY RATON CORPORATION

          

          

          By: 

          Name: 

          Title:
 

          

          

          EL
            PASO PRODUCTION GOM INC.

          

          

          By: 

          Name: 

          Title:
 

          

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          FORTIS
            CAPITAL
            CORP.,

          as
            Administrative Agent, Joint Lead Arranger, Joint Bookrunner, Issuing
            Lender and
            as a Lender

          

          

          By: 

          Name: 

          Title: 

          

          

          By: 

          Name: 

          Title: 

          

          

          

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          THE
            ROYAL BANK OF
            SCOTLAND plc, 

          as
            Joint Lead Arranger, Joint Bookrunner, Syndication Agent and as a
            Lender

          

          

          By: 

          Name: 

          Title: 

          

          

          

          THE
            BANK OF NOVA
            SCOTIA, 

          as
            Joint Lead Arranger, Documentation Agent and as a Lender

          

          

          By: 

          Name: 

          Title: 

          

          

          By: 

          Name: 

          Title: 
                             

        

        
          
            
            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        Schedule
          1.1(a)

         

        Commitments

         

        

        Lender       Commitment

         

        Fortis
          Capital
          Corp.                               $166,666,667.67(33-1/3%)

         

        The
          Royal Bank of
          Scotland plc                     
          $166,666,667.67(33-1/3%)

         

        The
          Bank of Nova
          Scotia                    $166,666,667.66(33-1/3%)

         

                                                    
          $500,000,000.00(100%)

        

        

        
          
            
              Schedule
                1.1(a)

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        Schedule
          5.12

         

        ERISA

         

        A
          small number of
          businesses of affiliates of El Paso Corporation have historically participated
          in multiemployer plans subject to Title IV of ERISA and have been periodically
          assessed withdrawal liability in respect of these plans (principally arising
          from the sales of these businesses). The currently outstanding amounts
          of
          withdrawal liability are described below. 

         

        None
          of the
          businesses of El Paso Corporation or any of its affiliates currently have
          active
          employees who participate in multiemployer plans. If El Paso Corporation
          or an
          affiliate is assessed withdrawal liability in respect of multiemployer
          plans in
          the future, it expects that these liabilities will not be material and,
          absent
          basis for challenge, El Paso Corporation or such affiliate would satisfy
          these
          liabilities in the normal course of its business.

         

        Approximately
          $145,000 in withdrawal liability is outstanding with respect to the New
          England
          Teamsters & Trucking Industry Pension Fund. El Paso Corporation is paying
          this liability in accordance with a payment schedule set by the plan.

         

        El
          Paso Corporation
          and four of its affiliated companies have received assessments of multiemployer
          plan withdrawal liability in respect of ANR Advance Transportation Company,
          Inc.
          (“ANR Advance”), an entity 50% of the stock of which is indirectly owned by El
          Paso CGP Company, f/k/a The Coastal Corporation, which El Paso Corporation
          acquired in 2001. The amount of the assessments is approximately $22.9
          million
          plus interest and costs in the aggregate. The plans making the assessments,
          the
          amount of the assessments, and the entities against which the assessments
          have
          been made are as follows:

         

        
          	
                   

                  Plan

                   

                	
                   

                  Amount
                    of
                    Assessment

                   

                	
                   

                  Entities
                    Assessed

                   

                
	
                   

                  Central
                    States Southeast and Southwest Areas Pension Fund

                   

                	
                   

                  $20,724,279

                   

                	
                   

                  El
                    Paso CGP
                    Company, El Paso Midwest Company, El Paso CNG Company LLC and
                    American
                    Natural Resources Corporation 

                   

                
	
                   

                  Chicago
                    Truck
                    Drivers, Helpers and Warehouse Workers Union Pension Fund

                   

                	
                   

                  $1,747,601

                   

                
	
                   

                  New
                    York
                    Teamsters Conference

                   

                	
                   

                  $407,301

                   

                	
                   

                  El
                    Paso
                    Corporation

                   

                

        

        

        Suit
          has been filed
          against these El Paso entities by these multiemployer plans. ANR Advance
          has
          been the subject of a liquidation proceeding in the U.S. Bankruptcy Court
          for
          the Eastern District of Wisconsin since 1999. Five Proofs of Claim relating
          to
          ANR Advance’s withdrawal from multiemployer plans in which it participated
          (including those for which assessments have been received by the El Paso
          entities as described above) were submitted in the ANR Advance bankruptcy.
          The
          El Paso entities have at all times owned less than 80% of the stock of
          ANR
          Advance and are therefore not in the same “controlled group” (as determined
          under Section 4001(b)(1) of ERISA and the regulations thereunder) as ANR
          Advance
          and its subsidiaries. Although the El Paso entities dispute any liability
          for
          the assessments and will vigorously defend against them, El Paso Corporation
          has
          determined that Section 4219(c)(2) of ERISA obligates it to make payments
          in
          accordance with the payment schedules set forth by the plans pending resolution
          of this dispute, and accordingly is making such payments in accordance
          with such
          schedules, subject to its right to the return of the payments pursuant
          to
          Section 4221 of ERISA and the regulations thereunder.

         

        

        

        

        
          
            
              Schedule
                5.12

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        Schedule
          5.14

         

        SUBSIDIARIES

         

        

        
          	
                  1.

                	
                  El
                    Paso
                    Production Company, a Delaware
                    corporation.

                

        

         

        
          	
                  2.

                	
                  El
                    Paso
                    Energy Raton Corporation, a Delaware
                    corporation.

                

        

         

        
          
            	
                    3.

                  	
                    El
                      Paso
                      Production GOM Inc., a Delaware
                      corporation.

                  

          

        

         

        

        

        
          
            
              Schedule
                5.14

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        Schedule
          5.16

         

        ENVIRONMENTAL
          MATTERS

         

        None.

         

        

        

        
          
            
              Schedule
                5.16

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        Schedule
          5.17(c)

         

        LIST
          OF
          WELLS

         

        See
          attached.

         

        

        

        
          
            
              Schedule
                5.17(c)

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        Schedule
          5.19

         

        FUTURE
          COMMITMENTS

         

        None.

         

        

        

        

        
          
            
              Schedule
                5.18

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        Schedule
          8.2

         

        EXISTING
          INDEBTEDNESS

         

        
          	
                  1.

                	
                  $1.2
                    Billion
                    7.75% Senior Notes due 2013 issued pursuant to the Indenture
                    dated as of
                    May 23, 2003, as amended, among El Paso Production Holding
                    Company,
                    El Paso Production Company, El Paso Production GOM Inc., El Paso
                    Energy
                    Raton, L.L.C. and Vermejo Minerals Corporation and Wilmington
                    Trust
                    Company.

                

        

         

        
          	
                  2.

                	
                  ISDA
                    Master
                    Agreement dated January 1, 2001 among El Paso Energy, L.P. and
                    El Paso
                    Production Company.

                

        

         

        

        

        
          
            
              Schedule
                8.2

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        Schedule
          8.3

         

        EXISTING
          LIENS

         

        
          	
                  EL
                    PASO PRODUCTION COMPANY

                   

                
	
                  Lienholder
                    

                   

                	
                  File
                    No.

                   

                	
                  Date

                   

                	
                  Jurisdiction

                   

                
	
                  J-W
                    Operating
                    Company

                   

                	
                  11302293

                   

                	
                  10/03/01

                   

                	
                  Delaware
                    SOS

                   

                
	
                  Enerflex
                    Systems Ltd.

                   

                	
                  1130240

                   

                	
                  10/03/01

                   

                	
                  Delaware
                    SOS

                   

                
	
                  Pat
                    Johnson,
                    as Plaintiff

                   

                	
                  200450699

                   

                	
                  9/15/04

                   

                	
                  Harris
                    County, TX

                   

                
	
                  Donald
                    W.
                    Beaver, as Plaintiff

                   

                	
                  200453269

                   

                	
                  9/27/04

                   

                	
                  Harris
                    County, TX

                   

                

        

        

        
          	
                  EL
                    PASO ENERGY RATON CORPORATION

                   

                
	
                  Lienholder
                    

                   

                	
                  File
                    No.

                   

                	
                  Date

                   

                	
                  Jurisdiction

                   

                
	
                  General
                    Electric Capital Corporation

                   

                	
                  11179949

                   

                	
                  9/18/01

                   

                	
                  Delaware
                    SOS

                   

                
	
                  General
                    Electric Capital Corporation

                   

                	
                  11180053

                   

                	
                  9/18/01

                   

                	
                  Delaware
                    SOS

                   

                
	
                  General
                    Electric Capital Corporation

                   

                	
                  11181606

                   

                	
                  9/18/01

                   

                	
                  Delaware
                    SOS

                   

                
	
                  General
                    Electric Capital Corporation

                   

                	
                  11181614

                   

                	
                  9/18/01

                   

                	
                  Delaware
                    SOS

                   

                
	
                  General
                    Electric Capital Corporation

                   

                	
                  11181648

                   

                	
                  9/18/01

                   

                	
                  Delaware
                    SOS

                   

                
	
                  General
                    Electric Capital Corporation

                   

                	
                  11253116

                   

                	
                  9/28/01

                   

                	
                  Delaware
                    SOS

                   

                
	
                  Greatamerica
                    Leasing Corporation

                   

                	
                  50136532

                   

                	
                  1/12/05

                   

                	
                  Delaware
                    SOS

                   

                
	
                  Victor
                    Gruetzner, as Plaintiff

                   

                	
                  200535201

                   

                	
                  5/27/05

                   

                	
                  Harris
                    County, Texas

                   

                

        

        

        

        
          
            
              Schedule
                8.3

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        Schedule
          8.4

         

        GUARANTEE
          OBLIGATIONS

         

        
          
            	
                    1. 

                  	
                    
                      El
                        Paso
                        Production Company as a Subsidiary Guarantor of the $1.2
                        Billion 7.75%
                        Senior Notes due 2013 (the “Securities”) issued pursuant to the Indenture
                         dated
                        as of
                        May 23, 2003, as amended, (the “Indenture”) among El Paso Production
                        Holding Company, a Delaware corporation, the Subsidiary Guarantors
                        (as
                        defined in the Indenture) from time to time party hereto
                        and Wilmington
                        Trust Company.

                    

                  

          

           

        

        
          	
                  2.

                	
                  El
                    Paso
                    Production GOM, Inc. as a Subsidiary Guarantor (as defined in
                    the
                    Indenture) of the Securities issued pursuant to the
                    Indenture.

                

        

         

        
          	
                  3.

                	
                  El
                    Paso
                    Energy Raton Corporation as a Subsidiary Guarantor (as defined
                    in the
                    Indenture) of the Securities issued pursuant to the
                    Indenture.

                

        

         

        
          	
                  4.

                	
                  Third
                    Party
                    Indemnity Agreements by El Paso Production Holding Company (the
                    “Guarantor”) for the Benefit of Minerals Management Service of the United
                    States Department of the Interior providing the Guarantor will
                    punctually
                    satisfy the performance and compliance by El Paso Production
                    Oil & Gas
                    USA, L.P. and El Paso Production Oil & Gas Company (the “Indemnified
                    Companies”) with the terms and conditions of leases and governing Federal
                    regulations for all leases in the Gulf of Mexico OCS Region for
                    which the
                    Indemnified Companies have a lease interest or an operating
                    interest.

                

        

         

        

        

        
          
            
              Schedule
                8.4

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        Schedule
          8.8

         

        EXISTING
          INVESTMENTS

         

        
          	
                  1.

                	
                  50%
                    ownership
                    interest in Black Warrior Methane Corp., an Alabama
                    corporation

                

        

         

        
          	
                  2.

                	
                  50%
                    ownership
                    interest in Black Warrior Transmission Corp., an Alabama
                    corporation

                

        

         

        
          	
                  3.

                	
                  50%
                    general
                    partnership interest in Supenn Pipeline Company, a Louisiana
                    general
                    partnership

                

        

         

        

        

        
          
            
              Schedule
                8.8

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        EXHIBIT
          A

         

        NOTE

         

         

        
          	 $ __________________________	
                  August
                    ___,
                    2005

                

        

         

            FOR
          VALUE RECEIVED,
          the undersigned, EL PASO PRODUCTION HOLDING COMPANY, a Delaware corporation,
          EL
          PASO PRODUCTION COMPANY, a Delaware corporation, EL PASO ENERGY RATON
          CORPORATION, a Delaware corporation, and EL PASO PRODUCTION GOM INC., a
          Delaware
          corporation (the “Borrowers”),
          hereby
          unconditionally promise to pay, on a joint and several basis, to the order
          of
          _______________________ (the “Lender”)
          at the offices
          of Fortis Capital Corp., located at Millennium I, 15455 North Dallas Parkway,
          Suite 1400, Addison, Texas 75001, in lawful money of the United States
          of
          America and in immediately available funds, on the Termination Date, the
          principal amount of (a) ___________________________________ ($__________),
          or,
          if less, (b) the aggregate unpaid principal amount of all Loans made by
          the
          Lender to the Borrowers pursuant to subsection 2.1 of the Credit Agreement,
          as
          hereinafter defined. The Borrowers further agree to pay interest in like
          money
          at such office on the unpaid principal amount hereof from time to time
          outstanding at the rates and on the dates specified in subsections 4.1
          through
          4.3 of such Credit Agreement.

         

        The
          holder of this
          Note is authorized to endorse on the schedules annexed hereto and made
          a part
          hereof or on a continuation thereof which shall be attached hereto and
          made a
          part hereof the date, type and amount of each Loan made pursuant to the
          Credit
          Agreement and the date and amount of each payment or prepayment of principal
          and, in the case of Eurodollar Loans, the length of each Interest Period
          with
          respect thereto. Each such endorsement shall constitute prima facie
          evidence of the
          accuracy of the information endorsed. The failure to make any such endorsement
          shall not affect the obligations of the Borrower in respect of such
          Loan.

         

        This
          Note (a) is
          one of the Notes referred to in the Credit Agreement, dated as of August
          ___,
          2005 (as amended, supplemented or otherwise modified from time to time,
          the
“Credit
          Agreement”),
          among the
          Borrowers, Fortis Capital Corp. as Administrative Agent, and the Lender,
          the
          other banks and financial institutions from time to time parties thereto,
          (b) is
          subject to the provisions of the Credit Agreement, and (c) is subject to
          optional and mandatory prepayment in whole or in part as provided in the
          Credit
          Agreement. This Note is secured and guaranteed as provided in the Loan
          Documents. Reference is hereby made to the Loan Documents for a description
          of
          the security and the guarantees, the terms of and conditions upon which
          the
          security interests and each guarantee were granted and the rights of the
          holder
          of this Note in respect thereof.

         

        Upon
          the occurrence
          of any one or more of the Events of Default, all amounts then remaining
          unpaid
          on this Note shall become, or may be declared to be, immediately due and
          payable, all as provided in the Credit Agreement.

         

        All
          parties now and
          hereafter liable with respect to this Note, whether maker, principal, surety,
          guarantor, endorser or otherwise, hereby waive presentment, demand, protest
          and
          all other notices of any kind.

         

        Unless
          otherwise
          defined herein, terms defined in the Credit Agreement and used herein shall
          have
          the meanings given to them in the Credit Agreement.

         

        THIS
          NOTE
          SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
          THE LAW
          OF THE STATE OF NEW YORK.

        

          EL
            PASO PRODUCTION HOLDING COMPANY

          

          

          By:             

          Name: 

          Title:  

          

          

          

          EL
            PASO PRODUCTION COMPANY

          

          

          By: 

          Name: 

          Title:  

          

          

          EL
            PASO ENERGY RATON CORPORATION

          

          

          By: 

          Name: 

          Title:  

          

          

          EL
            PASO PRODUCTION GOM INC.

          

          

          By: 

          Name: 

          Title:  

          

          
            
 

          

        

        

        
          
            
              Exhibit
                A

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        EXHIBIT
          B

         

        FORM
          OF

         

        GUARANTEE
          AGREEMENT

         

        THIS
          GUARANTEE
          AGREEMENT (this “Guaranty”)
          is made as of
          August ___, 2005, by ____________________________, a __________ corporation
          (“Guarantor”),
          in favor of
          FORTIS CAPITAL CORP., a Connecticut corporation (“Agent”),
          as agent for
          the Creditors (as hereinafter defined).

         

        RECITALS:

         

        WHEREAS,
          Guarantor
          is a direct or indirect wholly owned subsidiary of EL PASO PRODUCTION HOLDING
          COMPANY, a Borrower under the Credit Agreement (as hereinafter defined),
          an
          Affiliate of EL PASO PRODUCTION COMPANY, a Delaware corporation, EL PASO
          ENERGY
          RATON CORPORATION, a Delaware corporation, and EL PASO PRODUCTION GOM INC.,
          a
          Delaware corporation, each a Borrower under the Credit Agreement (collectively,
          the “Borrowers”);

         

        WHEREAS,
          Borrowers,
          the Agent and the Lenders party thereto have entered into a Credit Agreement
          dated as of the date hereof (as amended, supplemented or restated, the
“Credit
          Agreement”);

         

        WHEREAS,
          certain
          Lenders and their Affiliates are prepared to enter into Hedging Agreements
          with
          the Borrowers;

         

        WHEREAS,
          it is a
          requirement of the Credit Agreement and the creation or acquisition of
          any
          Subsidiary that Guarantor execute this Guaranty to secure the obligations
          of the
          Borrowers under the Credit Agreement, Hedging Agreements and the other
          Loan
          Documents;

         

        WHEREAS,
          Guarantor
          has agreed to execute this Guaranty in favor of the Agent for the benefit
          of the
          Agent and the Creditors; and

         

        WHEREAS,
          the board
          of directors of Guarantor has determined that Guarantor's execution, delivery
          and performance of this Guaranty may reasonably be expected to benefit
          Guarantor, directly or indirectly, are in the best interests of Guarantor,
          and
          are necessary for the promotion, conduct and attainment of the Guarantor’s
          business.

         

        NOW,
          THEREFORE, in
          consideration of the premises, of the benefits which will inure to Guarantor
          from Lenders’ advances of funds to the Borrowers under the Credit Agreement, and
          the Lenders and their Affiliates entering into Hedging Agreements with
          the
          Borrowers, and other good and valuable consideration, the receipt and
          sufficiency of all of which are hereby acknowledged, and in order to induce
          Lenders to enter into the Credit Agreement and Lenders and their Affiliates
          to
          enter into Hedging Agreements with the Borrowers, Guarantor hereby agrees
          for
          the benefit of the Agent and the Creditors as follows:

         

        AGREEMENTS

         

        Section
          1. Definitions.
          Reference is
          hereby made to the Credit Agreement for all purposes. All terms used in
          this
          Guaranty which are defined in the Credit Agreement and not otherwise defined
          herein shall have the same meanings when used herein. All references herein
          to
          any Obligation Document, Loan Document, or other document or instrument
          refer to
          the same as from time to time amended, supplemented or restated. As used
          herein
          the following terms shall have the following meanings:

         

        “Agent”
          means Fortis
          Capital Corp., and any other Person who, at the time in question, is the
          “Administrative Agent” under the Credit Agreement.

         

        “Creditors”
          means the Lenders
          under the Credit Agreement and a Lender or any Affiliate of a Lender party
          to a
          Hedging Agreement with any Borrower. The term Creditors shall also include
          a
          former Lender or an Affiliate of a former Lender that is party to a Hedging
          Agreement with any Borrower, provided that such former Lender or Affiliate
          was a
          Lender hereunder or an Affiliate of a Lender hereunder at the time it entered
          into such Hedging Agreement.

         

        “Lenders”
          means all Persons
          who at any time are "Lenders" under the Credit Agreement.

         

        “Obligations”
          means
          collectively all of the indebtedness, obligations, and undertakings which
          are
          guaranteed by Guarantor and described in Section
          2.

         

        “Obligation
          Documents”
          means this
          Guaranty, the Notes, the Credit Agreement, the Hedging Agreements, the
          Loan
          Documents, all other documents and instruments under, by reason of which,
          or
          pursuant to which any or all of the Obligations are evidenced, governed,
          secured, or otherwise dealt with, and all other documents, instruments,
          agreements, certificates, legal opinions and other writings heretofore
          or
          hereafter delivered in connection herewith or therewith.

         

        “Obligors”
          means the
          Borrowers, Guarantor and any other endorsers, guarantors or obligors, primary
          or
          secondary, of any or all of the Obligations.

         

        “Security”
          means any rights,
          properties, or interests of Agent or Creditors, under the Obligation Documents
          or otherwise, which provide recourse or other benefits to Agent or Creditors
          in
          connection with the Obligations or the nonpayment or nonperformance thereof,
          including collateral (whether real or personal, tangible or intangible)
          in which
          Agent or any Creditor has rights under or pursuant to any Obligation Documents,
          guaranties of the payment or performance of any Obligation, bonds, surety
          agreements, keep well agreements, letters of credit, rights of subrogation,
          rights of offset, and rights pursuant to which other claims are subordinated
          to
          the Obligations.

         

        Section
          2. Guaranty.

         

        (a) Guarantor
          hereby
          irrevocably, absolutely, and unconditionally guarantees to Agent for itself
          and
          the ratable benefit of the Creditors the prompt, complete, and full payment
          when
          due, and no matter how the same shall become due, of:

         

        (i) the
          Notes,
          including all principal, all interest thereon and all other sums payable
          thereunder; and

         

        (ii) the
          Loans made by
          the Lenders under the Credit Agreement, including the Loans, together with
          interest thereon; and

         

        (iii) the
          Hedging
          Agreements concluded by the Lenders and their Affiliates with the Borrowers;
          and

         

        (iv) All
          other sums
          payable to Agent or Creditors under any other Obligation Document, whether
          for
          principal, interest, fees or otherwise.

         

        Without
          limiting
          the generality of the foregoing, Guarantor's liability hereunder shall
          extend to
          and include all post-petition interest, expenses, and other duties and
          liabilities of the Borrowers described above in this subsection (a), or
          below in
          the following subsection (b), which would be owed by the Borrowers but
          for the
          fact that they are unenforceable or not allowable due to the existence
          of a
          bankruptcy, reorganization, or similar proceeding involving the
          Borrowers.

         

        (b) Guarantor
          hereby
          irrevocably, absolutely, and unconditionally guarantees to Agent and each
          Creditor the prompt, complete and full performance, when due, and no matter
          how
          the same shall become due, of all obligations and undertakings of the Borrowers
          to Agent or such Creditor under, by reason of, or pursuant to any of the
          Obligation Documents.

         

        (c) If
          the Borrowers
          shall for any reason fail to pay any Obligation, as and when such Obligation
          shall become due and payable, whether at its stated maturity, as a result
          of the
          exercise of any power to accelerate, or otherwise, Guarantor will, forthwith
          upon demand by Agent, pay such Obligation in full to Agent for the benefit
          of
          Agent and the Creditor to whom such Obligation is owed. If the Borrowers
          shall
          for any reason fail to perform promptly any Obligation, Guarantor will,
          forthwith upon demand by Agent, cause such Obligation to be performed or,
          if
          specified by Agent, provide sufficient funds, in such amount and manner
          as Agent
          shall in good faith determine, for the prompt, full and faithful performance
          of
          such Obligation by Agent or such other Person as Agent shall
          designate.

         

        (d) If
          the Borrowers or
          Guarantor fail to pay or perform any Obligation as described in the immediately
          preceding subsections (a), (b), or (c) Guarantor will incur the additional
          obligation to pay to Agent, and Guarantor will forthwith upon demand by
          Agent
          pay to Agent, the amount of any and all expenses, including fees and
          disbursements of Agent's counsel and of any experts or agents retained
          by such
          Agent, which such Agent may incur as a result of such failure.

         

        (e) It
          is the intention
          of the Guarantor and Creditors that this Guaranty not constitute a fraudulent
          transfer or fraudulent conveyance under any state or federal law that may
          be
          applied hereto. Guarantor and, by its acceptance hereof, each Creditor,
          hereby
          acknowledge and agree that, notwithstanding any other provision of this
          Guaranty, the indebtedness guaranteed hereby shall be limited to the maximum
          amount of indebtedness that can be incurred or guaranteed by Guarantor
          without
          rendering this Guaranty subject to avoidance under Section 548 of the United
          States Bankruptcy Code or any comparable provisions of any applicable state
          or
          federal law.

         

        Section
          3. Unconditional
          Guaranty.

         

        (a) No
          action which
          Agent or any Creditor may take or omit to take in connection with any of
          the
          Obligation Documents, any of the Obligations (or any other indebtedness
          owing by
          the Borrowers to Agent or any Creditor), or any Security, and no course
          of
          dealing of Agent or any Creditor with any Obligor or any other Person,
          shall
          release or diminish Guarantor's obligations, liabilities, agreements or
          duties
          hereunder, affect this Guaranty in any way, or afford Guarantor any recourse
          against Agent or any Creditor, regardless of whether any such action or
          inaction
          may increase any risks to or liabilities of Agent or any Creditor or any
          Obligor
          or increase any risk to or diminish any safeguard of any Security. Without
          limiting the foregoing, Guarantor hereby expressly agrees that Agent and
          Creditors may, from time to time, without notice to or the consent of Guarantor,
          do any or all of the following:

         

        (i) Amend,
          change or
          modify, in whole or in part, any one or more of the Obligation Documents
          and
          give or refuse to give any waivers or other indulgences with respect
          thereto.

         

        (ii) Neglect,
          delay,
          fail, or refuse to take or prosecute any action for the collection or
          enforcement of any of the Obligations, to foreclose or take or prosecute
          any
          action in connection with any Security or Obligation Document, to bring
          suit
          against any Obligor or any other Person, or to take any other action concerning
          the Obligations or the Obligation Documents.

         

        (iii) Accelerate,
          change,
          rearrange, extend, or renew the time, rate, terms, or manner for payment
          or
          performance of any one or more of the Obligations (whether for principal,
          interest, fees, expenses, indemnifications, affirmative or negative covenants,
          or otherwise).

         

        (iv) Compromise
          or
          settle any unpaid or unperformed Obligation or any other obligation or
          amount
          due or owing, or claimed to be due or owing, under any one or more of the
          Obligation Documents.

         

        (v) Take,
          exchange,
          amend, eliminate, surrender, release, or subordinate any or all Security
          for any
          or all of the Obligations, accept additional or substituted Security therefor,
          and perfect or fail to perfect Agent's or Creditors’ rights in any or all
          Security.

         

        (vi) Discharge,
          release,
          substitute or add Obligors.

         

        (vii) Apply
          all monies
          received from Obligors or others, or from any Security for any of the
          Obligations, as Agent or Creditors may determine to be in their best interest,
          without in any way being required to marshal Security or assets or to apply
          all
          or any part of such monies upon any particular Obligations.

         

        (b) No
          action or
          inaction of any Obligor or any other Person, and no change of law or
          circumstances, shall release or diminish Guarantor's obligations, liabilities,
          agreements, or duties hereunder, affect this Guaranty in any way, or afford
          Guarantor any recourse against Agent or any Creditor. Without limiting
          the
          foregoing, the obligations, liabilities, agreements, and duties of Guarantor
          under this Guaranty shall not be released, diminished, impaired, reduced,
          or
          affected by the occurrence of any or all of the following from time to
          time,
          even if occurring without notice to or without the consent of
          Guarantor:

         

        (i) Any
          voluntary or
          involuntary liquidation, dissolution, sale of all or substantially all
          assets,
          marshalling of assets or liabilities, receivership, conservatorship, assignment
          for the benefit of creditors, insolvency, bankruptcy, reorganization,
          arrangement, or composition of any Obligor or any other proceedings involving
          any Obligor or any of the assets of any Obligor under laws for the protection
          of
          debtors, or any discharge, impairment, modification, release, or limitation
          of
          the liability of, or stay of actions or lien enforcement proceedings against,
          any Obligor, any properties of any Obligor, or the estate in bankruptcy
          of any
          Obligor in the course of or resulting from any such proceedings.

         

        (ii) The
          failure by
          Agent or any Creditor to file or enforce a claim in any proceeding described
          in
          the immediately preceding subsection (i) or to take any other action in
          any
          proceeding to which any Obligor is a party.

         

        (iii) The
          release by
          operation of law of any Obligor from any of the Obligations or any other
          obligations to Agent or any Creditor.

         

        (iv) The
          invalidity,
          deficiency, illegality, or unenforceability of any of the Obligations or
          the
          Obligation Documents, in whole or in part, any bar by any statute of limitations
          or other law of recovery on any of the Obligations, or any defense or excuse
          for
          failure to perform on account of force majeure, act of God, casualty,
          impossibility, impracticability, or other defense or excuse
          whatsoever.

         

        (f) The
          failure of any
          Obligor or any other Person to sign any guaranty or other instrument or
          agreement within the contemplation of any Obligor, Agent or any
          Creditor.

         

        (vi) The
          fact that
          Guarantor may have incurred directly part of the Obligations or is otherwise
          primarily liable therefor.

         

        (vii) Without
          limiting
          any of the foregoing, any fact or event (whether or not similar to any
          of the
          foregoing) which in the absence of this provision would or might constitute
          or
          afford a legal or equitable discharge or release of or defense to a guarantor
          or
          surety other than the actual payment and performance by Guarantor under
          this
          Guaranty.

         

        (c) Agent
          and Creditors
          may invoke the benefits of this Guaranty before pursuing any remedies against
          any Obligor or any other Person and before proceeding against any Security
          now
          or hereafter existing for the payment or performance of any of the Obligations.
          Agent and Creditors may maintain an action against Guarantor on this Guaranty
          without joining any other Obligor therein and without bringing a separate
          action
          against any other Obligor.

         

        (d) If
          any payment to
          Agent or any Creditor by any Obligor is held to constitute a preference
          or a
          voidable transfer under applicable state or federal laws, or if for any
          other
          reason Agent or any Creditor is required to refund such payment to the
          payor
          thereof or to pay the amount thereof to any other Person, such payment
          to Agent
          or such Creditor shall not constitute a release of Guarantor from any liability
          hereunder, and Guarantor agrees to pay such amount to Agent or such Creditor
          on
          demand and agrees and acknowledges that this Guaranty shall continue to
          be
          effective or shall be reinstated, as the case may be, to the extent of
          any such
          payment or payments. Any transfer by subrogation which is made as contemplated
          in Section 6 prior to any such payment or payments shall (regardless of
          the
          terms of such transfer) be automatically voided upon the making of any
          such
          payment or payments, and all rights so transferred shall thereupon revert
          to and
          be vested in Agent and Creditors.

         

        (e) This
          is a
          continuing guaranty and shall apply to and cover all Obligations and renewals
          and extensions thereof and substitutions therefor from time to
          time.

         

        Section
          4. Waiver.
          Guarantor hereby
          waives, with respect to the Obligations, this Guaranty, and the other Obligation
          Documents:

         

        (a) notice
          of the
          incurrence of any Obligation by the Borrowers, and notice of any kind concerning
          the assets, liabilities, financial condition, creditworthiness, businesses,
          prospects, or other affairs of the Borrowers (it being understood and agreed
          that: (i) Guarantor shall take full responsibility for informing itself
          of such
          matters, (ii) neither Agent nor any Creditor shall have any responsibility
          of
          any kind to inform Guarantor of such matters, and (iii) Agent and Creditors
          are
          hereby authorized to assume that Guarantor, by virtue of its relationships
          with
          the Borrowers which are independent of this Guaranty, has full and complete
          knowledge of such matters at each time when Creditors extend credit to
          the
          Borrowers or take any other action which may change or increase Guarantor's
          liabilities or losses hereunder).

         

        (b) notice
          that Agent,
          any Creditor, any Obligor, or any other Person has taken or omitted to
          take any
          action under any Obligation Document or any other agreement or instrument
          relating thereto or relating to any Obligation.

         

        (c) demand,
          presentment
          for payment, and notice of demand, dishonor, nonpayment, or
          nonperformance.

         

        (d) notice
          of intention
          to accelerate, notice of acceleration, protest, notice of protest, notice
          of any
          exercise of remedies (as described in the following Section 5 or otherwise),
          and
          all other notices of any kind whatsoever.

         

        Section
          5. Exercise
          of
          Remedies.
          Agent and each
          Creditor shall have the right to enforce, from time to time, in any order
          and at
          Agent's or such Creditor’s sole discretion, any rights, powers and remedies
          which Agent or such Creditor may have under the Obligation Documents or
          otherwise, including judicial foreclosure, the exercise of rights of power
          of
          sale, the taking of a deed or assignment in lieu of foreclosure, the appointment
          of a receiver to collect rents, issues and profits, the exercise of remedies
          against personal property, or the enforcement of any assignment of leases,
          rentals, oil or gas production, or other properties or rights, whether
          real or
          personal, tangible or intangible; and Guarantor shall be liable to Agent
          and
          each Creditor hereunder for any deficiency resulting from the exercise
          by Agent
          or any Creditor of any such right or remedy even though any rights which
          Guarantor may have against the Borrowers or others may be destroyed or
          diminished by exercise of any such right or remedy. No failure on the part
          of
          Agent or any Creditor to exercise, and no delay in exercising, any right
          hereunder or under any other Obligation Document shall operate as a waiver
          thereof; nor shall any single or partial exercise of any right preclude
          any
          other or further exercise thereof or the exercise of any other right. The
          rights, powers and remedies of Agent and each Creditor provided herein
          and in
          the other Obligation Documents are cumulative and are in addition to, and
          not
          exclusive of, any other rights, powers or remedies provided in any Loan
          Document
          or by law or in equity. The rights of Agent and each Creditor hereunder
          are not
          conditional or contingent on any attempt by Agent or any Creditor to exercise
          any of its rights under any other Obligation Document against any Obligor
          or any
          other Person.

         

        Section
          6. Limited
          Subrogation.
          Until all of the
          Obligations have been paid and performed in full Guarantor shall have no
          right
          to exercise any right of subrogation, reimbursement, indemnity, exoneration,
          contribution or any other claim which it may now or hereafter have against
          or to
          any Obligor or any Security in connection with this Guaranty, and Guarantor
          hereby waives any rights to enforce any remedy which Guarantor may have
          against
          the Borrowers and any right to participate in any Security until such time.
          If
          any amount shall be paid to Guarantor on account of any such subrogation
          or
          other rights, any such other remedy, or any Security at any time when all
          of the
          Obligations and all other expenses guaranteed pursuant hereto shall not
          have
          been paid in full, such amount shall be held in trust for the benefit of
          Agent,
          shall be segregated from the other funds of Guarantor and shall forthwith
          be
          paid over to Agent to be held by Agent as collateral for, or then or at
          any time
          thereafter applied in whole or in part by Agent against, all or any portion
          of
          the Obligations, whether matured or unmatured, in such order as Agent shall
          elect. If Guarantor shall make payment to Agent of all or any portion of
          the
          Obligations and if all of the Obligations shall be finally paid in full,
          Agent
          will, at Guarantor's request and expense, execute and deliver to Guarantor
          (without recourse, representation or warranty) appropriate documents necessary
          to evidence the transfer by subrogation to Guarantor of an interest in
          the
          Obligations resulting from such payment by Guarantor; provided that such
          transfer shall be subject to Section 3(d) above and that without the consent
          of
          Agent (which Agent may withhold in its discretion) Guarantor shall not
          have the
          right to be subrogated to any claim or right against any Obligor which
          has
          become owned by Agent or any Creditor, whose ownership has otherwise changed
          in
          the course of enforcement of the Obligation Documents, or which Agent otherwise
          has released or wishes to release from its Obligations.

         

        Section
          7. Successors
          and
          Assigns.
          Guarantor's
          rights or obligations hereunder may not be assigned or delegated, but this
          Guaranty and such obligations shall pass to and be fully binding upon the
          successors of Guarantor, as well as Guarantor. This Guaranty shall apply
          to and
          inure to the benefit of Agent, Creditors and their respective successors
          or
          assigns. Without limiting the generality of the immediately preceding sentence,
          Agent and each Creditor may assign, grant a participation in, or otherwise
          transfer any Obligation held by it or any portion thereof, and Agent and
          each
          Creditor may assign or otherwise transfer its rights or any portion thereof
          under any Obligation Document, to any other Person, and such other Person
          shall
          thereupon become vested with all of the benefits in respect thereof granted
          to
          Agent or such Creditor hereunder unless otherwise expressly provided by
          Agent or
          such Creditor in connection with such assignment or transfer.

         

        Section
          8. Subordination
          and Offset.
          Guarantor hereby
          subordinates and makes inferior to the Obligations any and all indebtedness
          now
          or at any time hereafter owed by the Borrowers to Guarantor. Guarantor
          agrees
          that after the occurrence of any Default or Event of Default it will neither
          permit the Borrowers to repay such indebtedness or any part thereof nor
          accept
          payment from the Borrowers of such indebtedness or any part thereof without
          the
          prior written consent of Agent and Creditors. If Guarantor receives any
          such
          payment without the prior written consent of Agent and Creditors, the amount
          so
          paid shall be held in trust for the benefit of Creditors, shall be segregated
          from the other funds of Guarantor, and shall forthwith be paid over to
          Agent to
          be held by Agent as collateral for, or then or at any time thereafter applied
          in
          whole or in part by Agent against, all or any portions of the Obligations,
          whether matured or unmatured, in such order as Agent shall elect. Guarantor
          hereby grants to Agent and Creditors a right of offset to secure the payment
          of
          the Obligations and Guarantor's obligations and liabilities hereunder,
          which
          right of offset shall be upon any and all monies, securities and other
          property
          (and the proceeds therefrom) of Guarantor now or hereafter held or received
          by
          or in transit to Agent or any Creditor from or for the account of Guarantor,
          whether for safekeeping, custody, pledge, transmission, collection or otherwise,
          and also upon any and all deposits (general or special), credits and claims
          of
          Guarantor at any time existing against Agent or such Creditor. Upon the
          occurrence of any Default or Event of Default Agent and each Creditor is
          hereby
          authorized at any time and from time to time, without notice to Guarantor,
          to
          offset, appropriate and apply any and all items hereinabove referred to
          against
          the Obligations and Guarantor's obligations and liabilities hereunder
          irrespective of whether or not Agent or any Creditor shall have made any
          demand
          under this Guaranty and although such obligations and liabilities may be
          contingent or unmatured. Agent and each Creditor agrees promptly to notify
          Guarantor after any such offset and application made by Agent or such Creditor,
          provided that the failure to give such notice shall not affect the validity
          of
          such offset and application. The rights of Agent and Creditors under this
          section are in addition to, and shall not be limited by, any other rights
          and
          remedies (including other rights of offset) which Agent and Creditors may
          have.

         

        Section
          9. Representations
          and Warranties.
          Guarantor hereby
          represents and warrants to Agent and each Creditor as follows:

         

        (a) The
          Recitals at the
          beginning of this Guaranty are true and correct in all respects.

         

        (b) The
          direct or
          indirect value of the consideration received and to be received by Guarantor
          in
          connection herewith is reasonably worth at least as much as the liability
          and
          obligations of Guarantor hereunder, and the incurrence of such liability
          and
          obligations in return for such consideration may reasonably be expected
          to
          benefit Guarantor, directly or indirectly.

         

        (c) Guarantor
          is a
          corporation duly organized, validly existing and in good standing under
          the laws
          of the state of its incorporation as set forth in the Recitals to this
          Guaranty;
          and Guarantor has all requisite power and authority to execute, deliver
          and
          perform this Guaranty.

         

        (d) Guarantor
          is not
          "insolvent" on the date hereof (that is, the sum of Guarantor's absolute
          and
          contingent liabilities, including the Obligations, does not exceed the
          fair
          market value of Guarantor's assets). Guarantor's capital is adequate for
          the
          businesses in which Guarantor is engaged and intends to be engaged. Guarantor
          has not incurred (whether hereby or otherwise), nor does Guarantor intend
          to
          incur or believe that it will incur, debts which will be beyond its ability
          to
          pay as such debts mature.

         

        (e) The
          execution,
          delivery and performance by Guarantor of this Guaranty have been duly authorized
          by all necessary corporate action and do not and will not contravene its
          certificate or articles of incorporation or bylaws.

         

        (f) The
          execution,
          delivery and performance by Guarantor of this Guaranty do not and will
          not
          contravene any law or governmental regulation or any contractual restriction
          binding on or affecting Guarantor or any of its Affiliates or properties,
          and do
          not and will not result in or require the creation of any lien, security
          interest or other charge or encumbrance upon or with respect to any of
          its
          properties.

         

        (g) No
          authorization or
          approval or other action by, and no notice to or filing with, any governmental
          authority or other regulatory body or third party is required for the due
          execution, delivery and performance by Guarantor of this Guaranty.

         

        (h) This
          Guaranty is a
          legal, valid and binding obligation of Guarantor, enforceable against Guarantor
          in accordance with its terms except as limited by bankruptcy, insolvency
          or
          similar laws of general application relating to the enforcement of creditors'
          rights.

         

        (i) The
          representations
          and warranties made in Article V of the Credit Agreement, to the extent
          that
          they relate to Guarantor, Guarantor's business, assets, liabilities, properties
          or operations are true, complete and correct.

         

        Section
          10. No
          Oral
          Change.
          No amendment of
          any provision of this Guaranty shall be effective unless it is in writing
          and
          signed by Guarantor and Agent, and no waiver of any provision of this Guaranty,
          and no consent to any departure by Guarantor therefrom, shall be effective
          unless it is in writing and signed by Agent, and then such waiver or consent
          shall be effective only in the specific instance and for the specific purpose
          for which given. In addition, all such amendments and waivers shall be
          effective
          only if given with the necessary approvals of Creditors as required in
          the
          Credit Agreement.

         

        Section
          11. Invalidity
          of
          Particular Provisions.
          If any term or
          provision of this Guaranty shall be determined to be illegal or unenforceable
          all other terms and provisions hereof shall nevertheless remain effective
          and
          shall be enforced to the fullest extent permitted by applicable
          law.

         

        Section
          12. Headings
          and
          References.
          The headings used
          herein are for purposes of convenience only and shall not be used in construing
          the provisions hereof. The words “this Guaranty”' “this
          instrument,”“herein”“hereof”“hereby” and words of similar import refer to this
          Guaranty as a whole and not to any particular subdivision unless expressly
          so
          limited. The phrases “this section” and “this subsection” and similar phrases
          refer only to the subdivisions hereof in which such phrases occur. The
          word “or”
          is not exclusive, and the word “including” (in its various forms) means
“including without limitation”. Pronouns in masculine, feminine and neuter
          genders shall be construed to include any other gender, and words in the
          singular form shall be construed to include the plural and vice versa,
          unless
          the context otherwise requires.

         

        Section
          13. Term.
          This Guaranty
          shall be irrevocable until all of the Obligations have been completely
          and
          finally paid and performed, Lenders have no obligation to make any loans
          or
          other advances to the Borrowers, and all obligations and undertakings of
          the
          Borrowers under, by reason of, or pursuant to the Obligation Documents
          have been
          completely performed, and this Guaranty is thereafter subject to reinstatement
          as provided in Section 3(d). All extensions of credit and financial
          accommodations heretofore or hereafter made by Agent or Creditors to the
          Borrowers shall be conclusively presumed to have been made in acceptance
          hereof
          and in reliance hereon.

         

        Section
          14. Delivery
          of
          Corporate Documents.
          Upon execution of
          this Guaranty, Guarantor shall deliver the following to the Agent:

         

        (a) An
“Omnibus
          Certificate” of the Secretary or of any Vice President of the Guarantor, which
          shall contain the names and signatures of the officers of the Guarantor,
          authorized to execute the Guaranty and which shall certify to the truth,
          correctness and completeness of the following exhibits attached thereto:
          (1) a
          copy of resolutions duly adopted by the Board of Directors of the Guarantor
          and
          in full force and effect at the time this Guaranty is entered into, authorizing
          the execution of this Guaranty delivered or to be delivered in connection
          herewith and the consummation of the transactions contemplated herein and
          therein, (2) a copy of the charter documents of the Guarantor and all amendments
          thereto, certified by the appropriate official of the Guarantor's state
          of
          organization, and (3) a copy of any bylaws of the Guarantor; and

         

        (b) A
          certificate (or
          certificates) of the due formation, valid existence and good standing of
          the
          Guarantor in its state of organization, issued by the appropriate authorities
          of
          such jurisdiction, and certificates of the Guarantor's good standing and
          due
          qualification to do business, issued by appropriate officials in any states
          in
          which the Guarantor conducts a material portion of its business.

         

        Section
          15. Notices.
          Any notice or
          communication required or permitted hereunder shall be given in writing,
          sent by
          personal delivery, by telecopy, by delivery service with proof of delivery,
          or
          by registered or certified United States mail, postage prepaid, addressed
          to the
          appropriate party as follows:

         

        To
          Guarantor: __________________________

        1001
          Louisiana
          Street

        Houston,
          TX
          77002

        Attention:
          John J.
          Hopper

        Tel.
          _____________

        Fax:
          (713)
          420-2708

        

        To
          Agent: Fortis
          Capital
          Corp.

        15455
          N. Dallas
          Parkway, Suite 1400

        Addison,
          Texas
          75001

        Attention:
          Deirdre
          Sanborn

        Tel.
          (214)
          953-9304

        Fax
          (214)
          754-5982

        

        or
          to such other
          address or to the attention of such other individual as hereafter shall
          be
          designated in writing by the applicable party sent in accordance herewith.
          Any
          such notice or communication shall be deemed to have been given (i) in
          the case
          of personal delivery or delivery service, as of the date of first attempted
          delivery at the address or in the manner provided herein, (ii) in the case
          of
          telecopy, upon receipt, or (iii) in the case of registered or certified
          United
          States mail, three days after deposit in the mail.

         

        Section
          16. Limitation
          on
          Interest.
          Agent, Creditors,
          and Guarantor intend to contract in strict compliance with applicable usury
          law
          from time to time in effect, and the provisions of the Credit Agreement
          limiting
          the interest for which Guarantor is obligated are expressly incorporated
          herein.

         

        Section
          17. Loan
          Document.
          This Guaranty is
          a Loan Document and is subject to the provisions of the Credit Agreement
          governing Loan Documents. For the avoidance of doubt, Guarantor is considered
          a
“Domestic Restricted Person” for purposes of the Credit Agreement and other Loan
          Documents.

         

        Section
          18. Counterparts.
          This Guaranty may
          be executed in any number of counterparts, each of which when so executed
          shall
          be deemed to constitute one and the same Guaranty.

         

        Section
          19. GOVERNING
          LAW.
          THIS GUARANTY IS
          TO BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED
          AND ENFORCED IN ACCORDANCE WITH THE LAWS OF SUCH STATE.

         

        Section
          20. FINAL
          AGREEMENT.
          THIS WRITTEN
          AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
          THE
          PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
          CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE
          ARE
          NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.

         

        IN
          WITNESS WHEREOF,
          the Guarantor has executed and delivered this Guaranty as of the date first
          written above.

         

        _____________________________________

        

        

        

        By: 

        Name: 

        Title: 

        

        

        
          
            
              Exhibit
                B

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        EXHIBIT
          F

         

        FORM
          OF
          CLOSING CERTIFICATE

         

        Pursuant
          to
          subsection 6.1(d) of the Credit Agreement, dated as of August ___, 2005
          (the
“Agreement;”
          terms defined
          therein being used herein as therein defined), among EL PASO PRODUCTION
          HOLDING
          COMPANY, a Delaware corporation, EL PASO PRODUCTION COMPANY, a Delaware
          corporation, and EL PASO ENERGY RATON CORPORATION, a Delaware corporation,
          and
          EL PASO PRODUCTION GOM INC., a Delaware corporation (the “Borrowers”),
          the several
          banks and financial institutions and other entities from time to time parties
          to
          the Agreement (collectively, the “Lenders”)
          and Fortis
          Capital Corp., as Administrative Agent for the Lenders, the undersigned
          Responsible Officer of each of the Borrowers hereby certifies, in its capacities
          as such, as follows:

         

        1. Each
          of the
          representations and warranties made by each Loan Party in or pursuant to
          the
          Loan Documents is true and correct on and as of the date hereof as if made
          on
          and as of such date (unless such representation or warranty is stated to
          relate
          to a specific earlier date, in which case such representation or warranty
          is
          true and correct as of such earlier date);

         

        2. No
          Default or Event
          of Default has occurred and is continuing as of the date hereof or after
          giving
          effect to any Extensions of Credit requested to be made on the date
          hereof;

         

        3. No
          events or events
          which, individually or in the aggregate, have had or is reasonably likely
          to
          have a Material Adverse Effect has occurred;

         

        
          
            
              Exhibit
                F

            

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        IN
          WITNESS WHEREOF,
          the undersigned has hereunto executed this certificate on behalf of each
          Borrower and not individually.

         

        EL
          PASO PRODUCTION HOLDING COMPANY

        

        

        By: 

        Name: 

        Title:
 

        

        

        EL
          PASO PRODUCTION COMPANY

        

        

        By: 

        Name: 

        Title:
 

        

        

        EL
          PASO ENERGY RATON CORPORATION

        

        

        By: 

        Name: 

        Title:
 

        

        

        EL
          PASO PRODUCTION GOM INC.

        

        

        By: 

        Name: 

        Title:
 

        

        Date: _________________________

         

        

        

        

        
          
            
              Exhibit
                F

            

            
            

          

          
            
            

            
              

            

          

          
            
            

            
            

          

        

        EXHIBIT
          G

         

        FORM
          OF
          ASSIGNMENT AND ACCEPTANCE

         

        Reference
          is made
          to the Credit Agreement, dated as of August ___, 2005 (as amended and in
          effect
          on the date hereof, the “Credit
          Agreement”),
          among EL PASO
          PRODUCTION HOLDING COMPANY, a Delaware corporation, EL PASO PRODUCTION
          COMPANY,
          a Delaware corporation, EL PASO ENERGY RATON CORPORATION, a Delaware
          corporation, and EL PASO PRODUCTION GOM INC., a Delaware corporation (the
          “Borrowers”),
          the several
          banks, financial institutions, and other entities from time to time parties
          to
          the Credit Agreement (collectively, the “Lenders”)
          named therein,
          Fortis Capital Corp. as Administrative Agent for the Lenders. Terms defined
          in
          the Credit Agreement are used herein with the same meanings.

         

        The
          Assignor named
          below hereby sells and assigns, without recourse, to the Assignee named
          below,
          and the Assignee hereby purchases and assumes, without recourse, from the
          Assignor, effective as of the Assignment Date set forth below, the interests
          set
          forth below (the “Assigned
          Interest”)
          in the
          Assignor’s rights and obligations under the Credit Agreement including, without
          limitation, the interests set forth below in the Commitment of the Assignor
          of
          the Assignment Date and Loans owing to the Assignor which are outstanding
          on the
          Assignment Date, but excluding accrued interest and fees to and excluding
          the
          Assignment Date. The Assignee hereby acknowledges receipt of a copy of
          the
          Credit Agreement. From and after the Assignment Date (i) the Assignee shall
          be a
          party to and be bound by the provisions of the Credit Agreement and, to
          the
          extent of the Assigned Interest, have the rights and obligations of a Lender
          thereunder, and (ii) the Assignor shall, to the extent of the Assigned
          Interest,
          relinquish its rights and be released from its obligations under the Credit
          Agreement.

         

        This
          Assignment and
          Acceptance is being delivered to the Administrative Agent together with
          (i) if
          the Assignee is a Non-U.S. Lender, any documentation required to be delivered
          by
          the Assignee pursuant to subsection 4.13(b) of the Credit Agreement, duly
          completed and executed by the Assignee, and (ii) if the Assignee is not
          already
          a Lender under the Credit Agreement, an Administrative Questionnaire in
          the form
          supplied by the Administrative Agent, duly completed by the Assignee. The
          [Assignee/Assignor] shall pay any fee payable to the Administrative Agent
          pursuant to subsection 11.6(e) of the Credit Agreement.

         

        This
          Assignment and
          Acceptance shall be governed by and construed in accordance with the laws
          of the
          State of New York.

         

        Date
          of
          Assignment:

        Legal
          Name of
          Assignor:

        

        Legal
          Name of
          Assignee:

        

        Assignee’s
          Address
          for Notices:

        

        Effective
          Date of
          Assignment

        (“Assignment
          Date”)

        
          
            
              Exhibit
                G

            

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        Percentage
          of

        Principal
          Amount Assigned Commitment
          Assigned

        

        Commitment
          Assigned: $_______________ $_______________*

        

        The
          terms set forth
          above are hereby agreed to:

         

        [Name
          of Assignor],
          as Assignor

        

        By: _________________________________

        Name: _________________________________

        Title: _________________________________

        

        

        [Name
          of Assignee],
          as Assignee

        

        By: _________________________________

        Name: _________________________________

        Title: _________________________________

        

        The
          undersigned
          hereby consent to the within assignment:

         

        El
          Paso Production
          Holding Company             Fortis
          Capital
          Corp., as Administrative Agent

        

        By: ____________________________               
          By: ____________________________

        Name: ____________________________         
Name: ____________________________

        Title: ____________________________       
Title: ____________________________

        

        

        El
          Paso Production
          Company

        

        By: ____________________________

        Name: ____________________________

        Title: ____________________________

        

        

        El
          Paso Energy
          Raton Corporation

        

        By: ____________________________

        Name: ____________________________

        Title: ____________________________

        

        El
          Paso Production
          GOM Inc.

        

        By: ____________________________

        Name: ____________________________

        Title: ____________________________

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