THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

Exhibit 10.1

EXECUTION VERSION

THIRD AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT

THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (hereinafter referred to as the “Amendment”) dated as of December 1, 2008, by and among EXCO OPERATING COMPANY, LP (formerly known as EXCO Partners Operating Partnership, LP) (“Borrower”), CERTAIN SUBSIDIARIES OF BORROWER, as Guarantors (the “Guarantors”), the LENDERS party hereto (the “Lenders”), and JPMORGAN CHASE BANK, N.A., as Administrative Agent (“Administrative Agent”).  Unless the context otherwise requires or unless otherwise expressly defined herein, capitalized terms used but not defined in this Amendment have the meanings assigned to such terms in the Credit Agreement (as defined below).

WITNESSETH:

WHEREAS, Borrower, Guarantors, Administrative Agent and Lenders have entered into that certain Amended and Restated Credit Agreement dated as of March 30, 2007, as amended by that certain First Amendment to Amended and Restated Credit Agreement dated as of February 20, 2008 and as further amended by that certain Second Amendment to Amended and Restated Credit Agreement dated as of July 14, 2008 (as the same may be further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”); and

WHEREAS, Administrative Agent, Lenders, Borrower and Guarantors desire to amend the Credit Agreement as provided herein upon the terms and conditions set forth herein.

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

SECTION 1.  Amendments to Credit Agreement.  Subject to the satisfaction or waiver in writing of each condition precedent set forth in Section 2 hereof, and in reliance on the representations, warranties, covenants and agreements contained in this Amendment, the Credit Agreement shall be amended in the manner provided in this Section 1.

1.1 Cover Page.  The cover page of the Credit Agreement shall be and it hereby is amended by deleting the reference to “EXCO PARTNERS OPERATING PARTNERSHIP, LP” and substituting in lieu thereof the name “EXCO OPERATING COMPANY, LP”.

1.2 Preamble.  The preamble to the Credit Agreement shall be and it hereby is amended by deleting the reference to “EXCO PARTNERS OPERATING PARTNERSHIP, LP” and substituting in lieu thereof the name “EXCO OPERATING COMPANY, LP”.

1.3 Additional Definitions. The following definitions shall be and they hereby are added to Section 1.01 of the Credit Agreement in appropriate alphabetical order:

“Permitted Refinancing” means any Indebtedness of the Borrower, and Indebtedness constituting Guarantees thereof by Restricted Subsidiaries, incurred

or issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace (whether or not contemporaneously), defease or refund, other Indebtedness of the Borrower, in whole or in part, from time to time; provided that (i) the aggregate principal amount of such Permitted Refinancing does not exceed $300,000,000, (ii) such Permitted Refinancing has a stated maturity no later than January 15, 2010, (iii) the covenant, default and remedy provisions of such Permitted Refinancing are not materially more restrictive, taken as a whole, on the Borrower and its Subsidiaries than those set forth in the term sheet attached hereto as Annex I, and (iv) such Permitted Refinancing and any Guarantee in respect thereof is unsecured.

“Third Amendment Effective Date” means December 1, 2008.

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

“Borrower” means EXCO Operating Company, LP, a Delaware limited partnership (formerly known as EXCO Partners Operating Partnership, LP), and its successors and permitted assigns.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Reuters BBA Libor Rates Page 3750 (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period.

1.5 Mandatory Prepayment of Loans.  Clause (b) of Section 2.12 of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:

(b) If the Borrower or any Restricted Subsidiary sells, transfers or otherwise disposes of any Borrowing Base Properties at any time, the Borrower shall prepay the Revolving Borrowings to the extent necessary to eliminate any Borrowing Base Deficiency that may exist or that may have occurred as a result of such sale, transfer or other

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disposition on the date it or any Restricted Subsidiary receives the Net Cash Proceeds from such sale, transfer or other disposition and any Net Cash Proceeds in excess of the amount necessary to eliminate any such Borrowing Base Deficiency shall be used within one hundred eighty (180) days after such disposition to (i) acquire property, plant and equipment or any business entity used or useful in carrying on the business of the Borrower and its Restricted Subsidiaries and having a fair market value at least equal to the fair market value of the properties sold or otherwise disposed of or to improve or replace any existing property of the Borrower and its Restricted Subsidiaries used or useful in carrying on the business of the Borrower and its Restricted Subsidiaries, (ii) prepay the Loans in accordance with the instructions of the Borrower (unless an Event of Default exists in which event any amounts prepaid shall be applied to the Loans at the discretion of the Administrative Agent) or (iii) prepay the Term Loans (or any Permitted Refinancing thereof) to the extent such prepayment is permitted under Section 7.13 on the date of such prepayment.

1.6 Indebtedness.  Clause (h) of Section 7.01 of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:

(h) unsecured Indebtedness of the Borrower under the Senior Unsecured Term Loan Facility in an aggregate principal amount not to exceed $300,000,000 at any time outstanding and any Permitted Refinancing of any Indebtedness permitted under this clause (h); and

1.7 Financial Covenants; Consolidated Current Ratio.  Clause (a) of Section 7.11 of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:

(a) Consolidated Current Ratio.  The Borrower will not permit the Consolidated Current Ratio as of the end of any fiscal quarter ending on or after June 30, 2007 to be less than 1.00 to 1.00; provided that for purposes of determining compliance with this Section 7.11(a), the calculation of Consolidated Current Liabilities as of the end of any fiscal quarter ending on or before December 31, 2009, shall not include any Indebtedness of the Borrower under the Senior Unsecured Term Loan Facility (or any Permitted Refinancing thereof) to the extent such Indebtedness is permitted under Section 7.01(h).

1.8 Senior Unsecured Term Loan Facility Restrictions.  Section 7.13 of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:

Section 7.13 Senior Unsecured Term Loan Facility Restrictions.  Prior to the termination of all Commitments and the payment and performance in full of the Obligations, the Borrower will not, nor will it permit any Restricted Subsidiary to, directly or indirectly, retire, redeem, defease, repurchase or prepay prior to the scheduled due date thereof any part of the principal of, or interest on, the Term Loans (or any Permitted Refinancing thereof); provided that the Borrower may retire, redeem, defease, repurchase or prepay the Term Loans or any Permitted Refinancing thereof (including any premium on the prepaid

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principal amount of such Indebtedness) (x) with the proceeds of any Permitted Refinancing or (y) at any other time; provided that in the case of clause (y) above, (i) no Default has occurred and is continuing or would result from the making of such retirement, redemption, defeasance, repurchase or prepayment, and (ii) after giving effect to such retirement, redemption, defeasance, repurchase or prepayment, the Aggregate Commitment exceeds Aggregate Credit Exposure by an amount equal to or greater than ten percent (10%) of the Aggregate Commitment.

1.9 Notices.  Clause (i) of Section 11.01(a) of the Credit Agreement shall be and it hereby is amended and restated in its entirety to read as follows:

(i) if to the Borrower, to EXCO Operating Company, LP, c/o EXCO Resources, Inc., 00000 Xxxxx Xxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention:  Xxxxxxx X. Xxxxxx, Chief Executive Officer and Attention:  J. Xxxxxxx Xxxxxx, Chief Financial Officer, Telecopy No. (000) 000-0000;

1.10 Amendment to Exhibits.  Each of the Exhibits to the Credit Agreement shall be and they hereby are amended by deleting all references to “EXCO Partners Operating Partnership, LP” and substituting in lieu thereof the name “EXCO Operating Company, LP”.

1.11 Annex.  The Credit Agreement shall be and it hereby is amended by adding Annex I to the end thereof in the form attached hereto as Annex I.

SECTION 2.  Conditions.  The amendments to the Credit Agreement contained in Section 1 of this Amendment, shall be effective upon the satisfaction of each of the conditions set forth in this Section 2.

2.1 Execution and Delivery.  Each Credit Party, the Majority Lenders and the Administrative Agent shall have executed and delivered this Amendment.

2.2 No Default.  No Default or Event of Default shall have occurred and be continuing or shall result after giving effect to this Amendment.

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

SECTION 3.  Representations and Warranties of Borrower.  To induce the Lenders to enter into this Amendment, each Credit Party hereby represents and warrants to the Lenders as follows:

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

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relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such date).

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

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

SECTION 4.  Miscellaneous.

4.1 Reference to and Effect on Loan Documents.  Upon the effectiveness of this Amendment, on and after the date hereof, each reference in the Credit Agreement (including the schedules and exhibits thereto) and the other Loan Documents to “EXCO Partners Operating Partnership, LP” shall be deemed to refer to “EXCO Operating Company, LP”.

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

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

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

4.5 Counterparts.  This Amendment may be executed in one or more counterparts and by different parties hereto in separate counterparts each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document.  Delivery of photocopies of the signature pages to this Amendment by facsimile or electronic mail shall be effective as delivery of manually executed counterparts of this Amendment.

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

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

4.8 Governing Law.  This Amendment shall be construed in accordance with and governed by the law of the State of New York.

[Signature Pages Follow]

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

	BORROWER:
	EXCO OPERATING COMPANY, LP
	(formerly known as EXCO Partners Operating
	Partnership, LP)
	By:	EXCO Partners OLP GP, LLC
		its sole general partner
		By:				/s/ J. XXXXXXX XXXXXX, PH.D.
		Name:					J. Xxxxxxx Xxxxxx, Ph.D.
		Title:					Vice President and Chief Financial Officer
	Address for Notices:
	EXCO Operating Company, LP
	00000 Xxxxx Xxxxx, Xxxxx 0000
	Xxxxxx, Xxxxx 00000
	Facsimile No. 000-000-0000
	Attn:			Xxxxxxx X. Xxxxxx
				Chief Executive Officer
	and
	Attn:			J. Xxxxxxx Xxxxxx
				Chief Financial Officer
	GUARANTORS:
	XXXXXXXX GATHERING, LLC
	XXXXXXX DE, LLC
	XXXXXXX HOLDING COMPANY, L.L.C.
	XXXXXX GATHERING, LLC
	By:		/s/ J. XXXXXXX XXXXXX, PH.D.
	Name:				J. Xxxxxxx Xxxxxx, Ph.D.
	Title:				Vice President and Chief Financial Officer
					for each of the Credit Parties listed above

	TALCO MIDSTREAM ASSETS, LTD.
	By:	XXXXXXX HOLDING COMPANY, L.L.C.,
		its General Partner
		By:		/s/ J. XXXXXXX XXXXXX, PH.D.
		Name:			J. Xxxxxxx Xxxxxx, Ph.D.
		Title:			Vice President and Chief Financial Officer
	TGG PIPELINE, LTD.
	By:	XXXXXXX HOLDING COMPANY, L.L.C.,
		its General Partner
		By:	/s/ J. XXXXXXX XXXXXX, PH.D.
		Name:				J. Xxxxxxx Xxxxxx, Ph.D.
		Title:				Vice President and Chief Financial
						Officer
	EXCO PRODUCTION COMPANY, LP (formerly known as Winchester Production Company, Ltd.)
	By:	XXXXXXX DE, LLC,
		Its General Partner
		By:	/s/ J. XXXXXXX XXXXXX, PH.D.
		Name:				J. Xxxxxxx Xxxxxx, Ph.D.
		Title:				Vice President and Chief Financial
						Officer

	JPMORGAN CHASE BANK, N.A.,
	as a Lender and as Administrative Agent,
	By:	/s/ WM. XXXX XXXXXXX
	Name:		Wm. Xxxx Xxxxxxx
	Title:		Senior Vice President

	UBS LOAN FINANCE LLC
	as a Lender
	By:	/s/ XXXX X. XXXX
	Name: Xxxx X. Xxxx
	Title: Associate Director Banking Products Services, US
	By:	/s/ XXXX X. XXXXX
	Name: Xxxx X. Xxxxx
	Title: Associate Director Banking Products Services, US

	CREDIT SUISSE, CAYMAN ISLANDS BRANCH
	as a Lender
	By:	/s/ XXXXXXX XXXXX
	Name: Xxxxxxx Xxxxx
	Title: Director
	By:	/s/ XXXXX XXXXX
	Name: Xxxxx Xxxxx
	Title: Associate

	BNP PARIBAS
	as a Lender
	By:	/s/ XXXXXXX XXXXXXXXX
	Name: Xxxxxxx Xxxxxxxxx
	Title: Director
	By:	/s/ XXXXX XXXXXX
	Name: Xxxxx Xxxxxx
	Title: Director

	NATIXIS
	as a Lender
	By:	/s/ XXXXX X. XXXXXXX, III
	Name: Xxxxx X. Xxxxxxx, III
	Title: Managing Director
	By:	/s/ LIANA TCHERNYSHEVA
	Name: Liana Tchernysheva
	Title: Director

	STERLING BANK
	as a Lender
	By:	/s/ XXXX X. XXXXXX
	Name: Xxxx X. Xxxxxx
	Title: Senior Vice President

	SUNTRUST BANK
	as a Lender
	By:	/s/ XXXXX XXXXXXX
	Name: Xxxxx Xxxxxxx
	Title: Vice President

	THE BANK OF NOVA SCOTIA
	as a Lender
	By:	/s/ XXXXX X. XXXXX
	Name: Xxxxx X. Xxxxx
	Title: Director

	WACHOVIA BANK NATIONAL ASSOCIATION
	as a Lender
	By:	/s/ XXXX XXXXXXXXX
	Name: Xxxx Xxxxxxxxx
	Title: Vice President

	XXXXX FARGO BANK, N.A.
	as a Lender
	By:	/s/ XXX X. XXXXXX
	Name: Xxx X. Xxxxxx
	Title: Vice President

	BANK OF SCOTLAND PLC
	as a Lender
	By:	/s/ XXXXX X. XXXXXXXX
	Name: Xxxxx X. Xxxxxxxx
	Title: Assistant Vice President

	ALLIED IRISH BANKS, P.L.C.
	as a Lender
	By:	/s/ XXXXX X’XXXXXXXX
	Name: Xxxxx X’Xxxxxxxx
	Title: Assistant Vice President
	By:	/s/ XXXXX XXXXXXX
	Name: Xxxxx Xxxxxxx
	Title: Vice President

	DEUTSCHE BANK TRUST COMPANY
	AMERICAS
	as a Lender
	By:	/s/ XXXXX XXXXXXX
	Name: Xxxxx Xxxxxxx
	Title: Vice President
	By:	/s/ XXXXXX XXXXXXX
	Name: Xxxxxx Xxxxxxx
	Title: Vice President

	CALYON NEW YORK BRANCH
	as a Lender
	By:	/s/ XXXXXXX X. XXXXXX
	Name: Xxxxxxx X. Xxxxxx
	Title: Director
	By:	/s/ XXXXXX X. XXXXXX
	Name: Xxxxxx X. Xxxxxx
	Title: Managing Director

	U.S. BANK NATIONAL ASSOCIATION
	as a Lender
	By:	/s/ XXXXX X. XXXXXXX
	Name: Xxxxx X. Xxxxxxx
	Title: Vice President

	COMERICA BANK
	as a Lender
	By:	/s/ XXXXX X. XXXXXX
	Name: Xxxxx X. Xxxxxx
	Title: Senior Vice President

	FORTIS CAPITAL CORP.
	as a Lender
	By:	/s/ XXXXXXX XXXXX
	Name: Xxxxxxx Xxxxx
	Title: Director
	By:	/s/ XXXXX XXXXXX
	Name: Xxxxx Xxxxxx
	Title: Director

	BANK OF AMERICA
	as a Lender
	By:	/s/ XXXXXXX X. XXXXXXX
	Name: Xxxxxxx X. Xxxxxxx
	Title: Managing Director

	XXXXXXX SACHS CREDIT PARTNERS L.P.
	as a Lender
	By:	/s/ XXXX XXXXXXXX
	Name: Xxxx Xxxxxxxx
	Title: Authorized Signatory

	BARCLAYS BANK PLC
	as a Lender
	By:	/s/ XXXXXXX XXXXXXXXX
	Name: Xxxxxxx Xxxxxxxxx
	Title: Director