Exhibit 10.18
(Multicurrency—Cross Border)
(ISDA LOGO) [d43061d4306102.gif]
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of October 24, 2006

      BNP PARIBAS   TETON ENERGY CORPORATION

..........................................................................................and..........................................................................................
have entered and/or anticipate entering into one or more transactions (each a
“Transaction”) that are or will be governed by this Master Agreement, which
includes the schedule (the “Schedule”), and the documents and other confirming
evidence (each a “Confirmation”) exchanged between the parties confirming those
Transactions.

Accordingly, the parties agree as follows: —
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this “Agreement”), and the parties
would not otherwise enter into any Transactions.
2. Obligations

(a)   General Conditions.

(i) Each party will make each payment or delivery specified in each Confirmation
to be made by it, subject to the other provisions of this Agreement.
(ii) Payments under this Agreement will be made on the due date for value on
that date in the place of the account specified in the relevant Confirmation or
otherwise pursuant to this Agreement, in freely transferable funds and in the
manner customary for payments in the required currency. Where settlement is by
delivery (that is, other than by payment), such delivery will be made for
receipt on the due date in the manner customary for the relevant obligation
unless otherwise specified in the relevant Confirmation or elsewhere in this
Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the
condition precedent that no Event of Default or Potential Event of Default with
respect to the other party has occurred and is continuing, (2) the condition
precedent that no Early Termination Date in respect of the relevant Transaction
has occurred or been effectively designated and (3) each other applicable
condition precedent specified in this Agreement.
Copyright ©  1992 by International Swap Dealers Association, Inc.

 

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(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:—

  (i)   in the same currency; and     (ii)   in respect of the same Transaction,

by each party to the other, then, on such date, each party’s obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such deduction or
withholding is required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, then in effect. If a party is so
required to deduct or withhold, then that party (“X”) will:—
(1) promptly notify the other party (“Y”) of such requirement;
(2) pay to the relevant authorities the full amount required to be deducted or
withheld (including the full amount required to be deducted or withheld from any
additional amount paid by X to Y under this Section 2(d)) promptly upon the
earlier of determining that such deduction or withholding is required or
receiving notice that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy), or other
documentation reasonably acceptable to Y, evidencing such payment to such
authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to
which Y is otherwise entitled under this Agreement, such additional amount as is
necessary to ensure that the net amount actually received by Y (free and clear
of Indemnifiable Taxes, whether assessed against X or Y) will equal the Full
amount Y would have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to the extent
that it would not be required to be paid but for:—
(A) the failure by Y to comply with or perform any agreement contained in
Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to Section 3(f) to be
accurate and true unless such failure would not have occurred but for (I) any
action taken by a taxing authority, or brought in a court of competent
jurisdiction, on or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with respect to a party
to this Agreement) or (II) a Change in Tax Law.

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(ii) Liability. If: —
(1) X is required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, to make any deduction or withholding in
respect of which X would not be required to pay an additional amount to Y under
Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such liability
(including any related liability for interest, but including any related
liability for penalties only if Y has failed to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:—
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of the
jurisdiction of its organisation or incorporation and, if relevant under such
laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to deliver this
Agreement and any other documentation relating to this Agreement that it is
required by this Agreement to deliver and to perform its obligations under this
Agreement and any obligations it has under any Credit Support Document to which
it is a party and has taken all necessary action to authorise such execution,
delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance do not
violate or conflict with any law applicable to it, any provision of its
constitutional documents, any order or judgment of any court or other agency of
government applicable to it or any of its assets or any contractual restriction
binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to have
been obtained by it with respect to this Agreement or any Credit Support
Document to which it is a party have been obtained and are in full force and
effect and all conditions of any such consents have been complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any Credit
Support Document to which it is a party constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms (subject to
applicable bankruptcy, reorganisation, insolvency, moratorium or similar laws
affecting creditors’ rights generally and subject, as to enforceability, to
equitable principles of general application (regardless of whether enforcement
is sought in a proceeding in equity or at law)).

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(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:—
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:—
(i) any forms, documents or certificates relating to taxation specified in the
Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation; and
(iii) upon reasonable demand by such other party, any form or document that may
be required or reasonably requested in writing in order to allow such other
party or its Credit Support Provider to make a payment under this Agreement or
any applicable Credit Support Document without any deduction or withholding for
or on account of any Tax or with such deduction or withholding at a reduced rate
(so long as the completion, execution or submission of such form or document
would not materially prejudice the legal or commercial position of the party in
receipt of such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and to be
executed and to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,

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organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located (“Stamp Tax Jurisdiction”) and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party’s execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
“Event of Default”) with respect to such party:—
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e) required
to be made by it if such failure is not remedied on or before the third Local
Business Day after notice of such failure is given to the party;
(ii) Breach of Agreement. Failure by the party to comply with or perform any
agreement or obligation (other than an obligation to make any payment under this
Agreement or delivery under Section 2(a)(i) or 2(e) or to give notice of a
Termination Event or any agreement or obligation under Section 4(a)(i),
4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance
with this Agreement if such failure is not remedied on or before the thirtieth
day after notice of such failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such party to comply
with or perform any agreement or obligation to be complied with or performed by
it in accordance with any Credit Support Document if such failure is continuing
after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or the failing
or ceasing of such Credit Support Document to be in full force and effect for
the purpose of this Agreement (in either case other than in accordance with its
terms) prior to the satisfaction of all obligations of such party under each
Transaction to which such Credit Support Document relates without the written
consent of the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims, repudiates
or rejects, in whole or in part, or challenges the validity of, such Credit
Support Document;
(iv) Misrepresentation. A representation (other than a representation under
Section 3(e) or (f)) made or repeated or deemed to have been made or repeated by
the party or any Credit Support Provider of such party in this Agreement or any
Credit Support Document proves to have been incorrect or misleading in any
material respect when made or repeated or deemed to have been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support Provider
of such party or any applicable Specified Entity of such party (1) defaults
under a Specified Transaction and, after giving effect to any applicable notice
requirement or grace period, there occurs a liquidation of, an acceleration of
obligations under, or an early termination of, that Specified Transaction,
(2) defaults, after giving effect to any applicable notice requirement or grace
period, in making any payment or delivery due on the last payment, delivery or
exchange date of, or any payment on early termination of, a Specified
Transaction (or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3) disaffirms,
disclaims, repudiates or rejects, in whole or in part, a Specified Transaction
(or such action is taken by any person or entity appointed or empowered to
operate it or act on its behalf);
(vi) Cross Default. If “Cross Default” is specified in the Schedule as applying
to the party, the occurrence or existence of (1) a default, event of default or
other similar condition or event (however

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described) in respect of such party, any Credit Support Provider of such party
or any applicable Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them (individually or
collectively) in an aggregate amount of not less than the applicable Threshold
Amount (as specified in the Schedule) which has resulted in such Specified
Indebtedness becoming, or becoming capable at such time of being declared, due
and payable under such agreements or instruments, before it would otherwise have
been due and payable or (2) a default by such party, such Credit Support
Provider or such Specified Entity (individually or collectively) in making one
or more payments on the due date thereof in an aggregate amount of not less than
the applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or any
applicable Specified Entity of such party: —
(1) is dissolved (other than pursuant to a consolidation, amalgamation or
merger); (2) becomes insolvent or is unable to pay its debts or fails or admits
in writing its inability generally to pay its debts as they become due;
(3) makes a general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy or insolvency law or other similar law affecting creditors’
rights, or a petition is presented for its winding-up or liquidation, and, in
the case of any such proceeding or petition instituted or presented against it,
such proceeding or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making of an order for its
winding-up or liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or presentation
thereof; (5) has a resolution passed for its winding-up, official management or
liquidation (other than pursuant to a consolidation, amalgamation or merger);
(6) seeks or becomes subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other similar official
for it or for all or substantially all its assets; (7) has a secured party take
possession of all or substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied, enforced or sued on or
against all or substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed or
restrained, in each case within 30 days thereafter; (8) causes or is subject to
any event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified in clauses
(1) to (7) (inclusive); or (9) takes any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider of
such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at the
time of such consolidation, amalgamation, merger or transfer: —
(1) the resulting, surviving or transferee entity fails to assume all the
obligations of such party or such Credit Support Provider under this Agreement
or any Credit Support Document to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably satisfactory to the
other party to this Agreement; or
(2) the benefits of any Credit Support Document fail to extend (without the
consent of the other party) to the performance by such resulting, surviving or
transferee entity of its obligations under this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii) below,
and, if specified to be applicable, a Credit Event

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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) 
below: —
(i) Illegality. Due to the adoption of, or any change in, any applicable law
after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court, tribunal or
regulatory authority with competent jurisdiction of any applicable law after
such date, it becomes unlawful (other than as a result of a breach by the party
of Section 4(b)) for such party (which will be the Affected Party): —
(1) to perform any absolute or contingent obligation to make a payment or
delivery or to receive a payment or delivery in respect of such Transaction or
to comply with any other material provision of this Agreement relating to such
Transaction; or
(2) to perform, or for any Credit Support Provider of such party to perform, any
contingent or other obligation which the party (or such Credit Support Provider)
has under any Credit Support Document relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or brought in
a court of competent jurisdiction, on or after the date on which a Transaction
is entered into (regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (y) a Change in Tax Law, the party
(which will be the Affected Party) will, or there is a substantial likelihood
that it will, on the next succeeding Scheduled Payment Date (1) be required to
pay to the other party an additional amount in respect of an Indemnifiable Tax
under Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required to
be deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is
required to be paid in respect of such Tax under Section 2(d)(i)(4) (other than
by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the “Burdened Party”) on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4)
(except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or
(2) receive a payment from which an amount has been deducted or withheld for or
on account of any Indemnifiable Tax in respect of which the other party is not
required to pay an additional amount (other than by reason of
Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party
consolidating or amalgamating with, or merging with or into, or transferring all
or substantially all its assets to, another entity (which will be the Affected
Party) where such action does not constitute an event described in
Section 5(a)(viii);
(iv) Credit Event Upon Merger. If “Credit Event Upon Merger” is specified in the
Schedule as applying to the party, such party (“X”), any Credit Support Provider
of X or any applicable Specified Entity of X consolidates or amalgamates with,
or merges with or into, or transfers all or substantially all its assets to,
another entity and such action does not constitute an event described in
Section 5(a)(viii) but the creditworthiness of the resulting, surviving or
transferee entity is materially weaker than that of X, such Credit Support
Provider or such Specified Entity, as the case may be, immediately prior to such
action (and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any “Additional Termination Event” is
specified in the Schedule or any Confirmation as applying, the occurrence of
such event (and, in such event, the Affected Party or Affected Parties shall be
as specified for such Additional Termination Event in the Schedule or such
Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.

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6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the “Defaulting Party”) has occurred and is
then continuing, the other party (the “Non-defaulting Party”) may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
“Automatic Early Termination” is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will, promptly upon
becoming aware of it, notify the other party, specifying the nature of that
Termination Event and each Affected Transaction and will also give such other
information about that Termination Event as the other party may reasonably
require.
(ii) Transfer to avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected Party,
or if a Tax Event Upon Merger occurs and the Burdened Party is the Affected
Party, the Affected Party will, as a condition to its right to designate an
Early Termination Date under Section 6(b)(iv), use all reasonable efforts (which
will not require such party to incur a loss, excluding immaterial, incidental
expenses) to transfer within 20 days after it gives notice under Section 6(b)(i)
all its rights and obligations under this Agreement in respect of the Affected
Transactions to another of its Offices or Affiliates so that such Termination
Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give notice to
the other party to that effect within such 20 day period, whereupon the other
party may effect such a transfer within 30 days after the notice is given under
Section 6(b)(i).

Any such transfer by a party under this Section 6(b)(ii) will be subject to and
conditional upon the prior written consent of the other party, which consent
will not be withheld if such other party’s policies in effect at such time would
permit it to enter into transactions with the transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a Tax
Event occurs and there are two Affected Parties, each party will use all
reasonable efforts to reach agreement within 30 days after notice thereof is
given under Section 6(b)(i) on action to avoid that Termination Event.
(iv) Right to Terminate If: —
(1) a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii),
as the case may be, has not been effected with respect to all Affected
Transactions within 30 days after an Affected Party gives notice under
Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an
Additional Termination Event occurs, or a Tax Event Upon Merger occurs and the
Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case of a
Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an
Additional Termination Event if there is more than one Affected Party, or the
party which is not the Affected Party in the case of a Credit Event Upon Merger
or an Additional Termination Event if there is only one Affected Party may, by
not more than 20 days notice to the other party and provided that the relevant
Termination Event is then

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continuing, designate a day not earlier than the day such notice is effective as
an Early Termination Date in respect of all Affected Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section 6(a)
or (b), the Early Termination Date will occur on the date so designated, whether
or not the relevant Event of Default or Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination Date,
no further payments or deliveries under Section 2(a)(i) or 2(e) in respect of
the Terminated Transactions will be required to be made, but without prejudice
to the other provisions of this Agreement. The amount, if any, payable in
respect of an Early Termination Date shall be determined pursuant to
Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the occurrence
of an Early Termination Date, each party will make the calculations on its part,
if any, contemplated by Section 6(e) and will provide to the other party a
statement (1) showing, in reasonable detail, such calculations (including all
relevant quotations and specifying any amount payable under Section 6(e)) and
(2) giving details of the relevant account to which any amount payable to it is
to be paid. In the absence of written confirmation from the source of a
quotation obtained in determining a Market Quotation, the records of the party
obtaining such quotation will be conclusive evidence of the existence and
accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any Early
Termination Date under Section 6(e) will be payable on the day that notice of
the amount payable is effective (in the case of an Early Termination Date which
is designated or occurs as a result of an Event of Default) and on the day which
is two Local Business Days after the day on which notice of the amount payable
is effective (in the case of an Early Termination Date which is designated as a
result of a Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well as after
judgment) in the Termination Currency, from (and including) the relevant Early
Termination Date to (but excluding) the date such amount is paid, at the
Applicable Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties’ election in the Schedule
of a payment measure, either “Market Quotation” or “Loss”, and a payment method,
either the “First Method” or the “Second Method”. If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that “Market Quotation” or the “Second Method”, as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event of
Default: —
(1) First Method and Market Quotation. If the First Method and Market Quotation
apply, the Defaulting Party will pay to the Non-defaulting Party the excess, if
a positive number, of (A) the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of the Unpaid
Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the Defaulting
Party will pay to the Non-defaulting Party, if a positive number, the
Non-defaulting Party’s Loss in respect of this Agreement.
(3) Second Method and Market Quotation. If the Second Method and Market
Quotation apply, an amount will be payable equal to (A) the sum of the
Settlement Amount (determined by the

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Non-defaulting Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency Equivalent of the Unpaid
Amounts owing to the Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a negative
number, the Non-defaulting Party will pay the absolute value of that amount to
the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an amount will
be payable equal to the Non-defaulting Party’s Loss in respect of this
Agreement. If that amount is a positive number, the Defaulting Party will pay it
to the Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event: —
(1) One Affected Party. If there is one Affected Party, the amount payable will
be determined in accordance with Section 6(e)(i)(3), if Market Quotation
applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting Party will be
deemed to be references to the Affected Party and the party which is not the
Affected Party, respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: —
(A) if Market Quotation applies, each party will determine a Settlement Amount
in respect of the Terminated Transactions, and an amount will be payable equal
to (I) the sum of (a) one-half of the difference between the Settlement Amount
of the party with the higher Settlement Amount (“X”) and the Settlement Amount
of the party with the lower Settlement Amount (“Y”) and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in respect of this
Agreement (or, if fewer than all the Transactions are being terminated, in
respect of all Terminated Transactions) and an amount will be payable equal to
one-half of the difference between the Loss of the party with the higher Loss
("X") and the Loss of the party with the lower Loss (“Y”).
If the amount payable is a positive number, Y will pay it to X; if it is a
negative number, X will pay the absolute value of that amount
to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early Termination
Date occurs because “Automatic Early Termination” applies in respect of a party,
the amount determined under this Section 6(e) will be subject to such
adjustments as are appropriate and permitted by law to reflect any payments or
deliveries made by one party to the other under this Agreement (and retained by
such other party) during the period from the relevant Early Termination Date to
the date for payment determined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an amount
recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not
a penalty. Such amount is payable for the loss of bargain and the loss of
protection against future risks and except as otherwise provided in this
Agreement neither party will be entitled to recover any additional damages as a
consequence of such losses.

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7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: —
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the “Contractual Currency”). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term “rate of exchange” includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.

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9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect of
it) may be executed and delivered in counterparts (including by facsimile
transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable and may
be executed and delivered in counterparts (including by facsimile transmission)
or be created by an exchange of telexes or by an exchange of electronic messages
on an electronic messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The parties will
specify therein or through another effective means that any such counterpart,
telex or electronic message constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document

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to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system detail, provided (see the
Schedule) and will be deemed effective as indicated:—
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by telex, on the date the recipient’s answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it being
agreed that the burden of proving receipt will be on the sender and will not be
met by a transmission report generated by the sender’s facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered or its
delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic message
is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement (“Proceedings”), each party irrevocably:—
(i) submits to the jurisdiction of the English courts, if this Agreement is
expressed to be governed by English law, or to the non-exclusive jurisdiction of
the courts of the State of New York and the United States District Court located
in the Borough of Manhattan in New York City, if this Agreement is expressed to
be governed by the laws of the State of New York; and
(ii) waives any objection which it may have at any time to the laying of venue
of any Proceedings brought in any such court, waives any claim that such
Proceedings have been brought in an inconvenient forum and further waives the
right to object, with respect to such Proceedings, that such court does not have
any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any

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reason any party’s Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement: —
“Additional Termination Event” has the meaning specified in Section 5(b).
“Affected Party” has the meaning specified in Section 5(b).
“Affected Transactions” means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
“Affiliate” means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, “control” of
any entity or person means ownership of a majority of the voting power of the
entity or person.
“Applicable Rate” means: —
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
“Burdened Party” has the meaning specified in Section 5(b).
“Change in Tax Law” means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
“consent” includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
“Credit Event Upon Merger” has the meaning specified in Section 5(b).
“Credit Support Document” means any agreement or instrument that is specified as
such in this Agreement.
“Credit Support Provider” has the meaning specified in the Schedule.
“Default Rate” means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

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“Defaulting Party” has the meaning specified in Section 6(a).
“Early Termination Date” means the date determined in accordance with Section
6(a) or 6(b)(iv).
“Event of Default” has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
“Illegality” has the meaning specified in Section 5(b).
“Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
“law” includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
“lawful” and “unlawful” will be construed accordingly.
“Local Business Day” means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
“Loss” means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or
(3) or 6(e)(ii)(2)(A) applies. Loss does not include a party’s legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
“Market Quotation” means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the “Replacement Transaction”) that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have

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been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
Faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
“Non-default Rate” means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
“Non-defaulting Party” has the meaning specified in Section 6(a).
“Office” means a branch or office of a party, which may be such party’s head or
home office.
“Potential Event of Default” means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
“Reference Market-makers” means four leading dealers in the relevant market,
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
“Relevant Jurisdiction” means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
“Scheduled Payment Date” means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
“Set-off” means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
“Settlement Amount” means, with respect to a party and any Early Termination
Date, the sum of: —
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party’s Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
“Specified Entity” has the meanings specified in the Schedule.

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“Specified Indebtedness” means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
“Specified Transaction” means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
“Stamp Tax” means any stamp, registration, documentation or similar tax.
“Tax” means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
“Tax Event” has the meaning specified in Section 5(b).
“Tax Event Upon Merger” has the meaning specified in Section 5(b).
“Terminated Transactions” means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if “Automatic Early Termination” applies, immediately
before that Early Termination Date).
“Termination Currency” has the meaning specified in the Schedule.
“Termination Currency Equivalent” means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
“Other Currency”), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
“Termination Event” means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
“Termination Rate” means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
“Unpaid Amounts” owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for
Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under
Section 2(a)(i) which was (or would have been but for Section 2(a)(iii))
required to be settled by delivery to such party on or prior to such Early
Termination Date and which has not been so settled as at such Early Termination
Date, an amount equal to the fair market

              17   ISDA® 1992

 

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value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

                          BNP PARIBAS
      TETON ENERGY CORPORATION

 
                                  (Name of Party)
      (Name of Party)

 
                       
By:
  /s/ Christopher Taylor       By:   /s/ Bill I. Pennington
 
               
 
  Name:   Christopher Taylor           Name:   Bill I. Pennington
 
  Title:   Vice President/Derivatives Credit           Title:   Executive Vice
President/CFO
 
  Date:   10-30-06           Date:    
 
                       

  /s/ Dora Sung          

  Dora Sung          

  Managing Director          

  BNP Paribas / CIT Group        
 
                       

  /s/ K. F. Arleth          

  K. F. Arleth          

  Pres. & CEO          

  Teton Energy        

Copyright © 1992 by International Swap Dealers Association, Inc.

 

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(Bilateral Form)   (ISDA Agreements Subject to New York Law Only)

(ISDA LOGO) [d43061d4306102.gif]
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA MASTER AGREEMENT
dated as of October 24, 2006
between

          BNP PARIBAS       TETON ENERGY CORPORATION
 
  and  
 
(“Party A”)       (“Party B”)

This Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to each party.
Accordingly, the parties agree as follows:
Paragraph 1. Interpretation
(a) Definitions and Inconsistency. Capitalized terms not otherwise defined
herein or elsewhere in this Agreement have the meanings specified pursuant to
Paragraph 12, and all references in this Annex to Paragraphs are to Paragraphs
of this Annex. In the event of any inconsistency between this Annex and the
other provisions of this Schedule, this Annex will prevail, and in the event of
any inconsistency between Paragraph 13 and the other provisions of this Annex,
Paragraph 13 will prevail.
(b) Secured Party and Pledgor. All references in this Annex to the “Secured
Party” will be to either party when acting in that capacity and all
corresponding references to the “Pledgor” will be to the other party when acting
in that capacity; provided, however, that if Other Posted Support is held by a
party to this Annex, all references herein to that party as the Secured Party
with respect to that Other Posted Support will be to that party as the
beneficiary thereof and will not subject that support or that party as the
beneficiary thereof to provisions of law generally relating to security
interests and secured parties.
Paragraph 2. Security Interest
Each party, as the Pledgor, hereby pledges to the other party, as the Secured
Party, as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off against
all Posted Collateral Transferred to or received by the Secured Party hereunder.
Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral, the
security interest and lien granted hereunder on that Posted Collateral will be
released immediately and, to the extent possible, without any further action by
either party.
Copyright © 1994 by International Swaps and Derivatives Association, Inc.

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Paragraph 3. Credit Support Obligations
(a) Delivery Amount. Subject to Paragraphs 4 and 5, upon demand made by the
Secured Party on or promptly following a Valuation Date, if the Delivery Amount
for that Valuation Date equals or exceeds the Pledgor’s Minimum Transfer Amount,
then the Pledgor will Transfer to the Secured Party Eligible Credit Support
having a Value as of the date of Transfer at least equal to the applicable
Delivery Amount (rounded pursuant to Paragraph 13). Unless otherwise specified
in Paragraph 13, the “Delivery Amount” applicable to the Pledgor for any
Valuation Date will equal the amount by which:
(i) the Credit Support Amount exceeds
(ii) the Value as of that Valuation Date of all Posted Credit Support held by
the Secured Party.
(b) Return Amount. Subject to Paragraphs 4 and 5, upon a demand made by the
Pledgor on or promptly following a Valuation Date, if the Return Amount for that
Valuation Date equals or exceeds Secured Party’s Minimum Transfer Amount, then
the Secured Party will Transfer to the Pledgor Posted Credit Support specified
by the Pledgor in that demand having a Value as of the date of Transfer as close
as practicable to the applicable Return Amount (rounded pursuant to
Paragraph 13). Unless otherwise specified in Paragraph 13, the “Return Amount”
applicable to the Secured Party for any Valuation Date will equal the amount by
which:
(i) the Value as of that Valuation Date of all Posted Credit Support held by the
Secured Party exceeds
(ii) the Credit Support Amount.
“Credit Support Amount” means, unless otherwise specified in Paragraph 13, for
any Valuation Date (i) the Secured Party’s Exposure for that Valuation Date plus
(ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any,
minus (iii) all Independent Amounts applicable to the Secured Party, if any,
minus (iv) the Pledgor’s Threshold; provided, however, that the Credit Support
Amount will be deemed to be zero whenever the calculation of Credit Support
Amount yields a number less than zero.
Paragraph 4. Conditions Precedent, Transfer Timing, Calculations and
substitutions
(a) Conditions Precedent. Each Transfer obligation of the Pledgor under
Paragraphs 3 and 5 and of the Secured Party under Paragraphs 3, 4(d)(ii), 5 and
6(d) is subject to the conditions precedent that:
(i) no Event of Default, Potential Event of Default or Specified Condition has
occurred and is continuing with respect to the other party; and;
(ii) no Early Termination Date for which any unsatisfied payment obligations
exist has occurred or been designated as the result of an Event of Default or
Specified Condition with respect to the other party.
(b) Transfer Timing. Subject to Paragraphs 4(a) and 5 and unless otherwise
specified, if a demand for the Transfer of Eligible Credit Support or Posted
Credit Support is made by the Notification Time, then the relevant Transfer will
be made not later than the close of business on the next Local Business Day; if
a demand is made after the Notification Time, then the relevant Transfer will be
made not later than the close of business on the second Local Business Day
thereafter.
(c) Calculations. All calculations of Value and Exposure for purposes of
Paragraphs 3 and 6(d) will be made by the Valuation Agent as of the Valuation
Time. The Valuation Agent will notify each party (or the other party, if the
Valuation Agent is a party) of its calculations not later than the Notification
Time on the Local Business Day following the applicable Valuation Date (or in
the case of Paragraph 6(d), following the date of calculation).
Copyright © 1994 by International Swaps and Derivatives Association, Inc.

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(d) Substitutions.
(i) Unless otherwise specified in Paragraph 13, upon notice to the Secured Party
specifying the items of Posted Credit Support to be exchanged, the Pledgor may,
on any Local Business Day, Transfer to the Secured Party substitute Eligible
Credit Support (the “Substitute Credit Support”); and
(ii) subject to Paragraph 4(a), the Secured Party will Transfer to the Pledgor
the items of Posted Credit Support specified by the Pledgor in its notice not
later than the Local Business Day following the date on which the Secured Party
receives the Substitute Credit Support, unless otherwise specified in
Paragraph 13 (the “Substitution Date”); provided that the Secured Party will
only be obligated to Transfer Posted Credit Support with a Value as of the date
of Transfer of that Posted Credit Support equal to the Value as of that date of
the Substitute Credit Support.
Paragraph 5. Dispute Resolution
If a party (a “Disputing Party”) disputes (I) the Valuation Agent’s calculation
of a Delivery Amount or a Return Amount or (II) the Value of any Transfer of
Eligible Credit Support or Posted Credit Support, then (1) the Disputing Party
will notify the other party and the Valuation Agent (if the Valuation Agent is
not the other party) not later than the close of business on the Local Business
Day following (X) the date that the demand is made under Paragraph 3 in case of
(I) above or (Y) the date of Transfer in the case of (II) above, (2) subject to
Paragraph 4(a), the appropriate party will Transfer the undisputed amount to the
other party not later than the close of business on the Local Business Day
following (X) the date that the demand is made under Paragraph 3 in the case of
(I) above or (Y) the date of Transfer in the case of (II) above, (3) the parties
will consult with each other in an attempt to resolve the dispute and (4) if
they fail to resolve the dispute by the Resolution Time, then:
(i) In the case of a dispute involving a Delivery Amount or Return Amount,
unless otherwise specified in Paragraph 13, the Valuation Agent will recalculate
the Exposure and the Value as of the Recalculation Date by:
(A) utilizing any calculations of Exposure for the Transactions (or Swap
Transactions) that the parties have agreed are not in dispute;
(B) calculating the Exposure for the Transactions (or Swap Transactions) in
dispute by seeking four actual quotations at mid-market from Reference
Market-makers for purposes of calculating Market Quotation, and taking the
arithmetic average of those obtained; provided that if four quotations are not
available for a particular Transaction (or Swap Transaction), then fewer than
four quotations may be used for that Transaction (or Swap Transaction); and if
no quotations are available for a particular Transaction (or Swap Transaction),
then the Valuation Agent’s original calculations will be used for that
Transaction (or Swap Transaction); and
(C) utilizing the procedures specified in Paragraph 13 for calculating the
Value, if disputed, of Posted Credit Support.
(ii) In the case of a dispute involving the Value of any Transfer of Eligible
Credit Support or Posted Credit Support, the Valuation Agent will recalculate
the Value as of the date of Transfer pursuant to Paragraph 13.
Following a recalculation pursuant to this Paragraph, the Valuation Agent will
notify each party (or the other party, if the Valuation Agent is a party) not
later than the Notification Time on the Local Business Day following the
Resolution Time. The appropriate party will, upon demand following that notice
by the Valuation Agent or a resolution pursuant to (3) above and subject to
Paragraphs 4(a) and 4(b), make the appropriate Transfer.
Copyright © 1994 by International Swaps and Derivatives Association, Inc.

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Paragraph 6. Holding and Using Posted Collateral
(a) Care of Posted Collateral. Without limiting the Secured Party’s rights under
Paragraph 6(c), the Secured Party will exercise reasonable care to assure the
safe custody of all Posted Collateral to the extent required by applicable law,
and in any event the Secured Party will be deemed to have exercised reasonable
care if it exercises at least the same degree of care as it would exercise with
respect to its own property. Except as specified in the preceding sentence, the
Secured Party will have no duty with respect to Posted Collateral, including,
without limitation, any duty to collect any Distributions, or enforce or
preserve any rights pertaining thereto.
(b) Eligibility to Hold Posted Collateral; Custodians.
(i) General. Subject to the satisfaction of any conditions specified in
Paragraph 13 for holding Posted Collateral, the Secured Party will be entitled
to hold Posted Collateral or to appoint an agent (a “Custodian”) to hold Posted
Collateral for the Secured Party. Upon notice by the Secured Party to the
Pledgor of the appointment of a Custodian, the Pledgor’s obligations to make any
Transfer will be discharged by making the Transfer to that Custodian. The
holding of Posted Collateral by a Custodian will be deemed to be the holding of
that Posted Collateral by the Secured Party for which the Custodian is acting.
(ii) Failure to Satisfy Conditions. If the Secured Party or its Custodian fails
to satisfy conditions for holding Posted Collateral, then upon a demand made by
the Pledgor, the Secured Party will, not later than five Local Business Days
after the demand, Transfer or cause its Custodian to Transfer all Posted
Collateral held by it to a Custodian that satisfies those conditions or to the
Secured Party if it satisfies those conditions.
(iii) Liability. The Secured Party will be liable for the acts or omissions of
its Custodian to the same extent that the Secured Party would be liable
hereunder for its own acts or omissions.
(c) Use of Posted Collateral. Unless otherwise specified in Paragraph 13 and
without limiting the rights and obligations of the parties under Paragraphs 3,
4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a Defaulting Party or an
Affected Party with respect to a Specified Condition and no Early Termination
Date has occurred or been designated as the result of an Event of Default or
Specified Condition with respect to the Secured Party, then the Secured Party
will, notwithstanding Section 9-207 of the New York Uniform Commercial Code,
have the right to:
(i) sell, pledge, rehypothecate, assign, invest, use, commingle or otherwise
dispose of, or otherwise use in its business any Posted Collateral it holds,
free from any claim or right of any nature whatsoever of the Pledgor, including
any equity or right of redemption by the Pledgor; and
(ii) register any Posted Collateral in the name of the Secured Party, its
Custodian or a nominee for either.
For purposes of the obligation to Transfer Eligible Credit Support or Posted
Credit Support pursuant to Paragraphs 3 and 5 and any rights or remedies
authorized under this Agreement, the Secured Party will be deemed to continue to
hold all Posted Collateral and to receive Distributions made thereon, regardless
of whether the Secured Party has exercised any rights with respect to any Posted
Collateral pursuant to (i) or (ii) above.
(d) Distributions and Interest Amount.
(i) Distributions. Subject to Paragraph 4(a), if the Secured Party receives or
is deemed to receive Distributions on a Local Business Day, it will Transfer to
the Pledgor not later than the following Business Day any Distributions it
receives or is deemed to receive to the extent that a Delivery Amount would not
be created or increased by that Transfer, as calculated by the Valuation Agent
(and the date of calculation will be deemed to be a Valuation Date for this
purpose).
Copyright © 1994 by International Swaps and Derivatives Association, Inc.

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(ii) Interest Amount. Unless otherwise specified in Paragraph 13 and subject to
Paragraph 4(a), in lieu of any interest, dividends or other amounts paid or
deemed to have been paid with respect to Posted Collateral in the form of Cash
(all of which may be retained by the Secured Party), the Secured Party will
Transfer to the Pledgor at the times specified in Paragraph 13 the Interest
Amount to the extent that a Delivery Amount would not be created or increased by
that Transfer, as calculated by the Valuation Agent (and the date of calculation
will be deemed to be a Valuation Date for this purpose). The Interest Amount or
portion thereof not Transferred pursuant to this Paragraph will constitute
Posted Collateral in the form of Cash and will be subject to the security
interest granted under Paragraph 2.
Paragraph 7. Events of Default
For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will
exist with respect to a party if:
(i) that party fails (or fails to cause its Custodian) to make, when due, any
Transfer of Eligible Collateral, Posted Collateral or the Interest Amount, as
applicable, required to be made by it and that failure continues for two Local
Business Days after notice of that failure is given to that party;
(ii) that party fails to comply with any restriction or prohibition specified in
this Annex with respect to any of the rights specified in Paragraph 6(c) and
that failure continues for five Local Business Days after notice of that failure
is given to that party; or
(iii) that party fails to comply with or perform any agreement or obligation
other than those specified in Paragraphs 7(i) and 7(ii) and that failure
continues for 30 days after notice of that failure is given to that party.
Paragraph 8. Certain Rights and Remedies
(a) Secured Party’s Rights and Remedies. If at any time (1) an Event of Default
or Specified Condition with respect to the Pledgor has occurred and is
continuing or (2) an Early Termination Date has occurred or been designated as
the result of an Event of Default or Specified Condition with respect to the
Pledgor, then, unless the Pledgor has paid in full all of its Obligations that
are then due, the Secured Party may exercise one or more of the following rights
and remedies:
(i) all rights and remedies available to a secured party under applicable law
with respect to Posted Collateral held by the Secured Party;
(ii) any other rights and remedies available to the Secured Party under the
terms of Other Posted Support, if any;
(iii) the right to Set-off any amounts payable by the Pledgor with respect to
any Obligations against any Posted Collateral or the Cash equivalent of any
Posted Collateral held by the Secured Party (or any obligation of the Secured
Party to Transfer that Posted Collateral); and
(iv) the right to liquidate any Posted Collateral held by the Secured Party
through one or more public or private sales or other dispositions with such
notice, if any, as may be required under applicable law, free from any claim or
right of any nature whatsoever of the Pledgor, including any equity or right of
redemption by the Pledgor (with the Secured Party having the right to purchase
any or all of the Posted Collateral to be sold) and to apply the proceeds (or
the Cash equivalent thereof) from the liquidation of the Posted Collateral to
any amounts payable by the Pledgor with respect to any Obligations in that order
as the Secured Party may elect.
Each party acknowledges and agrees that Posted Collateral in the form of
securities may decline speedily in value and is of a type customarily sold on a
recognized market, and, accordingly, the Pledgor is not entitled to prior notice
of any sale of that Posted Collateral by the Secured Party, except any notice
that is required under applicable law and cannot be waived.
Copyright © 1994 by International Swaps and Derivatives Association, Inc.

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(b) Pledgor’s Rights and Remedies. If at any time an Early Termination Date has
occurred or been designated as the result of an Event of Default or Specified
Condition with respect to the Secured Party, then (except in the case of an
Early Termination Date relating to less than all transactions (or Swap
Transactions) where the Secured Party has paid in full all of its obligations
that are then due under Section 6(e) of this Agreement):
(i) the Pledgor may exercise all rights and remedies available to a Pledgor
under applicable law with respect to Posted Collateral held by the Secured
Party;
(ii) the Pledgor may exercise any other rights and remedies available to the
Pledgor under the terms of Other Posted Support, if any;
(iii) the Secured Party will be obligated immediately to Transfer all Posted
Collateral and the Interest Amount to the Pledgor; and
(iv) to the extent that Posted Collateral or the Interest Amount is not so
Transferred pursuant to (iii) above, the Pledgor may:
(A) Set-off any amounts payable by the Pledgor with respect to any Obligations
against any Posted Collateral or the Cash equivalent of any Posted Collateral
held by the Secured Party (or any obligation of the Secured Party to Transfer
that Posted Collateral); and
(B) to the extent that the Pledgor does not Set-off under (iv)(A) above,
withhold payment of any remaining amounts payable by the Pledgor with respect to
any Obligations, up to the Value of any remaining Posted Collateral held by the
Secured Party, until that Posted Collateral is Transferred to the Pledgor.
(c) Deficiencies and Excess Proceeds. The Secured Party will Transfer to the
Pledgor any proceeds and Posted Credit Support remaining after liquidation,
Set-off and/or application under Paragraphs 8(a) and 8(b) after satisfaction in
full of all amounts payable by the Pledgor with respect to any Obligations; the
Pledgor in all events will remain liable for any amounts remaining unpaid after
any liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b).
(d) Final Returns. When no amounts are or thereafter may become payable by the
Pledgor with respect to any Obligations (except for any potential liability
under Section 2(d) of this Agreement), the Secured Party will Transfer to the
Pledgor all Posted Credit Support and the Interest Amount, if any.
Paragraph 9. Representations
Each party represents to the other party (which representation will be deemed to
be repeated as of each date on which it, as the Pledgor, Transfers Eligible
Collateral) that:
(i) it has the power to grant a security interest in and lien on any Eligible
Collateral it Transfers as the Pledgor and has taken all necessary actions to
authorize the granting of that security interest and lien;
(ii) it is the sole owner of or otherwise has the right to Transfer all Eligible
Collateral it Transfers to the Secured Party hereunder, free and clear of any
security interest, lien, encumbrance or other restrictions other than the
security interest and lien granted under Paragraph 2;
(iii) upon the Transfer of any Eligible Collateral to the Secured Party under
the terms of this Annex, the Secured Party will have a valid and perfected first
priority security interest therein (assuming that any central clearing
corporation or any third-party financial intermediary or other entity not within
the control of the Pledgor involved in the Transfer of that Eligible Collateral
gives the notices and takes the action required of it under applicable law for
perfection of that interest); and
(iv) the performance by it of its obligations under this Annex will not result
in the creation of any security interest, lien or other encumbrance on any
Posted Collateral other than the security interest and lien granted under
Paragraph 2.
Copyright © 1994 by International Swaps and Derivatives Association, Inc.

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Paragraph 10. Expenses
(a) General. Except as otherwise provided in Paragraphs 10(b) and 10(c), each
party will pay its own costs and expenses in connection with performing its
obligations under this Annex and neither party will be liable for any costs and
expenses incurred by the other party in connection herewith.
(b) Posted Credit Support. The Pledgor will promptly pay when due all taxes,
assessments or charges of any nature that are imposed with respect to Posted
Credit support held by the Secured Party upon becoming aware of the same,
regardless of whether any portion of that Posted Credit Support is subsequently
disposed of under Paragraph 6(c), except for those taxes, assessments and
charges that result from the exercise of the Secured Party’s rights under
Paragraph 6(c).
(c) Liquidation/Application of Posted Credit Support. All reasonable costs and
expenses incurred by or on behalf of the Secured Party or the Pledgor in
connection with the liquidation and/or application of any Posted Credit Support
under Paragraph 8 will be payable, on demand and pursuant to the Expenses
Section of this Agreement, by the Defaulting Party or, if there is no Defaulting
Party, equally by the parties.
Paragraph 11. Miscellaneous
(a) Default Interest. A Secured Party that fails to make, when due, any Transfer
of Posted Collateral or the Interest Amount will be obligated to pay the Pledgor
(to the extent permitted under applicable law) an amount equal to interest at
the Default Rate multiplied by the Value of the items of property that were
required to be Transferred, from (and including) the date that the Posted
Collateral or Interest Amount was required to be Transferred to (but excluding)
the date of Transfer of that Posted Collateral or Interest Amount. This interest
will be calculated on the basis of daily compounding and the actual number of
days elapsed.
(b) Further Assurances. Promptly following a demand made by a party, the other
party will execute, deliver, file and record any financing statement, specific
assignment or other document and take any other action that may be necessary or
desirable and reasonably requested by that party to create, preserve, perfect or
validate any security interest or lien granted under Paragraph 2, to enable that
party to exercise or enforce its rights under this Annex with respect to Posted
Credit Support or an Interest Amount or to effect or document a release of a
security interest on Posted Collateral or an Interest Amount.
(c) Further Protection. The Pledgor will promptly give notice to the Secured
Party of, and defend against, any suit, action, proceeding or lien that involves
Posted Credit Support Transferred by the Pledgor or that could adversely affect
the security interest and lien granted by it under Paragraph 2, unless that
suit, action, proceeding or lien results from the exercise of the Secured
Party’s rights under Paragraph 6(c).
(d) Good Faith and Commercially Reasonable Manner. Performance of all
obligations under this Annex, including, but not limited to, all calculations,
valuations and determinations made by either party, will be made in good faith
and in a commercially reasonable manner.
(e) Demands and Notices. All demands and notices made by a party under this
Annex will be made as specified in the Notices Section of this Agreement, except
as otherwise provided in Paragraph 13.
(f) Specifications of Certain Matters. Anything referred to in this Annex as
being specified in Paragraph 13 also may be specified in one or more
Confirmations or other documents and this Annex will be construed accordingly.
Copyright © 1994 by International Swaps and Derivatives Association, Inc.

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Paragraph 12. Definitions
As used in this Annex:
“Cash” means the lawful currency of the United States of America.
“Credit Support Amount” has the meaning specified in Paragraph 3.
“Custodian” has the meaning specified in Paragraphs 6(b)(i) and 13.
“Delivery Amount” has the meaning specified in Paragraph 3(a).
“Disputing Party” has the meaning specified in Paragraph 5.
“Distributions” means with, respect to Posted Collateral other than Cash, all
principal, interest and other payments and distributions of cash or other
property with respect thereto, regardless of whether the Secured Party has
disposed of that Posted Collateral under Paragraph 6(c). Distributions will not
include any item of property acquired by the Secured Party upon any disposition
or liquidation of Posted Collateral, or, with respect to any Posted Collateral
in the form of Cash, any distributions on that collateral, unless otherwise
specified herein.
“Eligible Collateral” means with, respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
“Eligible Credit Support” means Eligible Collateral and Other Eligible Support.
“Exposure” means for any Valuation Date or other date for which Exposure is
calculated and subject to Paragraph 5 in the case of a dispute, the amount, if
any, that would be payable to a party that is the Secured Party by the other
party (expressed as a positive number) or by a party that is the Secured Party
to the other party (expressed as a negative number) pursuant to
Section 6(e)(ii)(2)(A) of this Agreement as if ail Transactions (or Swap
Transactions) were being terminated as of the relevant Valuation Time; provided
that Market Quotation will be determined by the. Valuation Agent using its
estimates at mid-market of the amounts that would be paid for Replacement
Transactions (as that term is defined in the definition of “Market Quotation”).
“Independent Amount” means, with respect to party, the amount specified as such
far that party in Paragraph 13; if no amount is specified, zero.
“Interest Amount” means, with respect to an interest Period, the aggregate sum
of the amounts of interest calculated for each day in that interest. Period on
the principal amount of Pasted Collateral. iii in the form of Cash held by the
Secured Party on: that day; determined by the Secured Party for each such day,
as follows:
(x) the amount of that Cash on that day; multiplied by
(y) the Interest Rate in effect for, that day; divided by
(z) 360.
“Interest Period” means the period from (and including) the last Local Business
Day on which an Interest Amount was Transferred (or, if no Interest Amount has
yet been. Transferred, the Local Business Day on which Posted Collateral in the
form of Cash was Transferred to or received by the Secured Party) to (but
excluding) the Local Business Day on which the current Interest Amount is to be
Transferred.
“Interest Rate” means the rate specified in Paragraph 13.
“Local Business Day”, unless otherwise specified in Paragraph 1.3, has the
meaning specified in the Definitions Section of this Agreement, except that
references to a payment in clause (b) thereof wall be deemed to include a
Transfer under this Annex.
Copyright © 1994 by International Swaps and Derivatives Association, Inc.

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“Minimum Transfer Amount” means, with respect to a party, the amount specified
as such for that party in Paragraph 13; if no amount is specified, zero.
“Notification Time” has the meaning specified in Paragraph 13.
“Obligations” means, with respect to a party, all, present and future
obligations of that party under this Agreement and any additional obligations
specified for that party in Paragraph 13.
“Other Eligible Support” means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
“Other Posted Support” means all Other Eligible Support Transferred to the
Secured Party that remains in effect for the benefit of that Secured Party.
“Pledgor” means either party, when that party (i) receives a demand for or is
required to Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has
Transferred Eligible Credit Support under Paragraph 3(a).
“Posted Collateral” means all Eligible Collateral, other property,
Distributions, and all proceeds thereof that have been Transferred to or
received by the Secured Party under this Annex and not Transferred to the
Pledgor pursuant to Paragraph 3(h), 4(d)(ii) or 6(d)(i) or released by the
Secured Party under Paragraph 8. Any Interest Amount or portion thereof not
Transferred pursuant to Paragraph 6(d)(ii) will constitute Posted Collateral in
the form of Cash.
“Posted Credit Support” means Posted Collateral and Other Posted Support.
“Recalculation Date” means the Valuation Date that gives rise to the dispute
under Paragraph 5; provided, however, that if a subsequent Valuation Date occurs
under Paragraph 3 prior to the resolution of the dispute, then the
“Recalculation Date” means the most recent Valuation Date under Paragraph 3.
“Resolution Time” has the meaning specified in Paragraph 13.
“Return Amount” has the meaning specified: in Paragraph 3(b).
“Secured Party” means either party, when that party (i) makes a demand for or is
entitled to receive Eligible Credit Support under Paragraph 3(a) or (ii) hobs or
is deemed to hold Posted Credit Support.
“Specified Condition” means, with respect to a party, any event specified as:
such for that party in Paragraph 13.
“Substitute Credit Support” has the meaning specified in Paragraph 4(d)(i).
“Substitution Date” has the meaning specified in Paragraph 4(d)(ii):
“Threshold” means, with respect to a party, the amount specified as such for
that party in Paragraph 13; if no amount is specified, zero.
“Transfer” means, with respect to any Eligible Credit Support, Posted Credit
Support or Interest Amount, and in accordance with the instructions of the
Secured Party, Pledgor or Custodian, as applicable:
(i) in the case of Cash, payment or delivery by wire transfer into one or more
bank accounts specified by the recipient;
(ii) in the case of certificated securities that cannot be paid or delivered by
book-entry, payment or delivery in appropriate physical form: to the recipient
or its account accompanied by any duly executed instruments of transfer,
assignments in blank, transfer tax stamps and any other documents necessary to
constitute a legally valid transfer to the recipient;
(iii) in the case of securities that can be paid or delivered in book-entry, the
giving of written instructions to the relevant depository institution or other
entity specified by the recipient, together with a written copy thereof to the
recipient, sufficient if complied with to result in a legally effective transfer
of the relevant interest to the recipient; and
(iv) in the case of Other Eligible Support or Other Pasted Support, as specified
in Paragraph 13.
Copyright © 1994 by International Swaps and Derivatives Association, Inc.

9

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“Valuation Agent” has the meaning specified in Paragraph 13.
“Valuation Date” means each date specified in or otherwise determined pursuant
to Paragraph 13.
“Valuation Percentage” means, for any item of Eligible Collateral, the
percentage specified in Paragraph 13.
“Valuation Time” has the meaning specified in Paragraph 13.
“Value” means for any Valuation Date or other date for which Value is calculated
and subject to Paragraph 5 in the case of a dispute, with respect to:
(i) Eligible Collateral or Posted Collateral that is:
(A) Cash, the amount thereof; and
(B) a security, the bid price obtained by the Valuation Agent multiplied by the
applicable Valuation Percentage, if any;
(ii) Posted Collateral that consists of items that are not specified as Eligible
Collateral, zero; and
(iii) Other Eligible Support and Other Posted Support, as specified in
Paragraph 13.
Copyright © 1994 by International Swaps and Derivatives Association, Inc.

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Execution
PARTY A: BNP PARIBAS — SECURED PARTY
PARTY B: TETON ENERGY CORPORATION — PLEDGOR
PARAGRAPH 13. ELECTION AND VARIABLES

(a)   Security Interest for “Obligations.” The term “Obligations” as used in
this Annex includes the following additional obligations of the Pledgor: None.  
(b)   Credit Support Obligations.   (i)   Delivery Amount, Return Amount and
Credit Support Amount

(A) “Delivery Amount” has the meaning specified in Paragraph 3(a).
(B) “Return Amount” has the meaning specified in Paragraph 3(b).
(C) “Credit Support Amount” will mean the higher of: (i) the amount calculated
as provided in the definition of that term in Paragraph 3 and (ii) the sum of
the Pledgor’s Independent Amounts.

(ii)   Eligible Collateral. The following items will qualify as “Eligible
Collateral” for the party specified:

                      Valuation     Pledgor   Percentage
Cash
  þ     100 %

(iii)   Other Eligible Support. The following items will qualify as “Other
Eligible Support”: Not Applicable   (iv)   Thresholds.

  (A)   “Independent Amount” for the Pledgor means, None.     (B)   “Threshold”
for the Pledgor means zero.     (C)   “Minimum Transfer Amount” with respect to
transfer of Eligible Credit Support by the Secured Party and the Pledgor means
USD 100,000 (One Hundred Thousand US Dollar); provided however, the Minimum
Transfer Amount with respect to the Pledgor and Secured Party shall be zero if
an Event of Default or Termination Event has occurred or is continuing.     (D)
  Rounding. The Delivery Amount and the Return Amount will be rounded up and
down to the nearest integral multiple of USD10,000 (Ten Thousand US Dollars)
respectively; provided however, the Delivery Amount and Return Amount shall be
$1 if an Event of Default or Termination Event has occurred or is continuing.

(c)   Valuation and Timing.

(i) “Valuation Agent” means the Secured Party.

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Execution
(ii) “Valuation Date means each day designated as such by the Secured Party or
the Pledgor by notice to the other party. To enable the Secured Party to make
the calculations required in connection with a Valuation Date on that date,
notice from the Pledgor designating a Valuation Date shall be given no later
than 3:00 p.m., local time for the Valuation Agent, on the Local Business Day
before that Valuation Date in the city of the Valuation Agent.
(iii) “Valuation Time” means:
o the close of business in the city of the Valuation Agent on the Valuation Date
or date of calculation, as applicable;
þ the close of business in the city of the Valuation Agent on the Local Business
Day in that city before the Valuation Date or date of calculation, as
applicable; provided that the calculations of Value and Exposure will be made as
of approximately the same time on the same date.
(iv) “Notification Time” means 12:00 p.m., New York time, on a Local Business
Day.
(v) “Transfer Timing and Calculations. Paragraphs 4(b) and 4(c) are hereby
amended and restated in their entirety as set forth below.
(b) Transfer Timing. Subject to Paragraphs 4(a) and 5 and unless otherwise
specified, if a demand for the Transfer of Eligible Credit Support or Posted
Credit Support is made by the Notification Time, then the relevant Transfer will
be made not later than the close of business on the Valuation Date; if a demand
is made after the Notification Time, then the relevant Transfer will be made not
later than the close of business on the next Local Business Day thereafter.
(c) Calculations. All calculations of Value and Exposure for purposes of
Paragraphs 3 and 6(d) will be made by the Valuation Agent as of the Valuation
Time. The Valuation Agent will notify each party (or the other party, if the
Valuation Agent is a party) of its calculations not later than the Notification
Time on the applicable Valuation Date (or in the case of Paragraph 6(d), the
Local Business Day).”

(d)   Conditions Precedent and Secured Party’s Rights and Remedies. The
following Termination Event(s) will be “Specified Conditions” for the Pledgor:

         
Illegality
    þ  
Tax Event
    o  
Tax Event Upon Merger
    o  
Credit Event Upon Merger
    þ  
Additional Termination Event(s)
    þ  

(e)   Substitution.

(i) “Substitution Date” has the meaning specified in Paragraph 4(d)(ii), unless
otherwise specified here: One Local Business Day for the Secured Party after the
day specified in Paragraph 4(d)(ii).
(ii) Consent. If specified here as applicable, then the Pledgor must obtain the
Secured Party’s consent for any substitution pursuant to Paragraph 4(d): not
applicable.

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Execution

(f)   Dispute Resolution.

(i) “Resolution Time” means 1:00 p.m., New York time, on the Local Business Day
following the date on which the notice is given that gives rise to a dispute
under Paragraph 5, unless otherwise specified here: “Resolution Time” means
11:00 a.m., New York City time, on the Local Business Day for both parties
following the date the Pledgor gives notice of a dispute pursuant to
Paragraph 5.
(ii) Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value of Posted
Credit Support will be calculated as follows: for Cash, the U.S. dollar value
thereof.
(iii) Alternative. The provisions of Paragraph 5 will apply, unless an
alternative dispute resolution procedure is specified here: not applicable.

(g)   Holding and Using Posted Collateral.

  (i) Eligibility to Hold Posted Collateral; Custodians. The Secured Party will
be entitled to hold Posted Collateral pursuant to Paragraph 6(b), provided that
the Secured Party is not a Defaulting Party.     (ii) Use of Posted Collateral.
The provisions of Paragraphs 6(c)(i) will apply.

  (h)   Distributions and Interest Amount.

    (i)   Interest Rate. The “Interest Rate” for each New York Banking Day means
the opening rate for overnight Federal Funds in effect for such day as reported
on Bloomberg, and for each other day, such rate on the next preceding New York
Banking Day.     (ii)  Transfer of Interest Amount. The Transfer of the Interest
Amount will be made on the last Local Business Day of each calendar month and on
any Local Business Day that Posted Collateral in the form of Cash is Transferred
to the Pledgor pursuant to Paragraph 3(b).     (iii) Alternative to Interest
Amount. The provisions of Paragraph 6(d)(ii) will apply.     (iv) “Interest
Amount” means with respect to an Interest Period, the aggregate sum of the
amounts of interest calculated for each day in that Interest Period on the
principal amount of Posted Collateral in the form of Cash held by the Secured
Party on that day (but for these purposes, Posted Collateral will exclude any
amount of interest calculated for any day within the relevant Interest Period
not due to be transferred pursuant to Paragraph 6(d)(ii) and (h)(ii) hereof),
determined by the Secured Party for each such day as follows:    
(x)   the amount of Cash on that day; multiplied by
  (y)  the Interest Rate in effect for that day; divided by   (z)  360    
Additional Representation(s): Not Applicable

(j)   Other Eligible Support and Other Posted Support: Not Applicable.   (k)  
Demands and Notices.

All demands, specifications and notices made under this Annex with respect to
commodity transactions, will be made pursuant to the Notices Section of this
Agreement, unless otherwise specified here:

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Execution
the Secured Party:
BNP Paribas
787 Seventh Avenue, 3rd floor
New York, New York 10019
Attention: Collateral Management Group
Facsimile No.: (212)471-8038
Telephone: (212)841-2878
(For all purposes with a copy to the address specified in each Confirmation to
which the notice relates.)
All demands, specifications and notices made under this Annex with respect to
all other transactions for the Secured Party, will be made pursuant to the
Notices Section of this Agreement.
the Pledgor:
Teton Energy Corporation
Address: 410 17th St., Suite 1850, Denver, CO 80202
Attention: Bill I. Pennington, Executive VP and CFO
Facsimilie No: 303-565-4606 Tel. No. 303-565-4600

(1)   Address for Transfers.

With respect to commodity transactions, for Party A: as specified by notice.
With respect to the Pledgor: as specified by notice.

(m)   Other Provisions.

(i) Definition of Secured Party and Pledgor, the Secured Party and the Pledgor
agree that, notwithstanding anything to the contrary in the recital to this
Annex, Paragraph 1(b), Paragraph 2 and the definitions in Paragraph 12, (A) this
Annex is a Credit Support Document only with respect to Teton Energy Corporation
(B) as used in this Annex, “Secured Party” always means BNP Paribas and
“Pledgor” always means Teton Energy Corporation, (C) only the Pledgor will be
required to make Transfers of Eligible Credit Support hereunder and (D) only the
Pledgor makes the pledge and grant in Paragraph 2, the acknowledgment in the
final sentence of Paragraph 8(a) and the representations in Paragraph 9.
(ii) Valuation Agent’s City. For all purposes of this Annex, references to the
Valuation Agent’s city will be understood as references to New York City.
(iii) Certain Distributions Received. If a Secured Party receives or is deemed
to receive Distributions on a day that is not a Local Business Day, or after its
close of business on a Local Business Day, it will Transfer the Distributions to
the Pledgor on the second following Local Business Day, subject to
Paragraph 4(a), but only to the extent contemplated in Paragraph 6(d)(i) in
connection with Distributions received or deemed received on a Local Business
Day.
(iv) Taxes in Connection with Interest Amounts. Notwithstanding anything to the
contrary in this Agreement, the Secured Party does not make any Payer Tax
Representation referred to in Section 3(e) of this Agreement with respect to any
Interest Amount it is required to Transfer under this Annex, the Secured Party
shall have no obligation to pay additional amounts in respect of Indemnifiable
Taxes imposed with respect to any such Interest Amount, and payment to the
Pledgor of any such Interest Amount reduced by Taxes shall not constitute a Tax
Event.

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Execution
(v) Failure to Transfer. Paragraph 7(i) of this Annex is hereby modified to
apply to failures to Transfer Other Eligible Support, as well as the items
listed therein.
IN WITNESS WHEREOF, the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

                      BNP PARIBAS       TETON ENERGY CORPORATION    
 
                   
By:
  /s/ Christopher Taylor
 
      By:   /s/ Karl F. Arleth
 
   
Name:
  Christopher Taylor       Name:   Karl F. Arleth    
Title:
  Vice President/Derivatives Credit       Title:   Chief Executive Officer &
President    
 
                   
By:
  /s/ Dora Sung       By:   /s/ Bill I. Pennington    
Name:
  DORA SUNG       Name:   Bill I. Pennington    
Title:
  MANAGING DIRECTOR
BNP Paribas/ CIT Group       Title:   CFO & Executive Vice President    

15

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Execution
SCHEDULE
to the
Master Agreement
dated as of October 24, 2006
between
BNP PARIBAS, a bank organized under the laws of France (“Party A”)
and
TETON ENERGY CORPORATION, a corporation organized under the laws of Delaware
(“Party B”)
PART I
TERMINATION PROVISIONS

(a)   “Specified Entity”:

  (i)   means, in relation to Party A, for the purpose of:

               
Section 5(a)(v), Default under Specified Transaction
  None    
Section 5(a)(vi), Cross Default
  None    
Section 5(a)(vii), Bankruptcy
  None    
Section 5(b)(iv), Credit Event Upon Merger
  None  

  (ii)   means, in relation to Party B, for purposes of:

           
Section 5(a)(v), Default under Specified Transaction
  None    
Section 5(a)(vi), Cross Default
  Its Affiliates    
Section 5(a)(vii), Bankruptcy
  None    
Section 5(b)(iv), Credit Event Upon Merger
  Its Affiliates  

(b)   “Specified Transaction” will have the meaning specified below:     (a) any
transaction (including an agreement with respect to any such transaction) now
existing or hereafter entered into between one party to this Agreement (or any
Credit Support Provider of such party or any applicable Specified Entity of such
party) and the other party to this Agreement (or any Credit Support Provider of
such other party or any applicable Specified Entity of such other party) which
is not a Transaction under this Agreement but (i) which is a rate swap
transaction, swap option, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option, credit protection
transaction, credit swap, credit default swap, credit default option, total
return swap, credit spread transaction, repurchase transaction, reverse
repurchase transaction, buy/sell-back transaction, securities lending
transaction, weather index transaction or forward purchase or sale of a
security, commodity or other financial instrument or interest (including any
option with respect to any of these transactions) or (ii) which is a type of
transaction that is similar to any transaction referred to in clause (i) above
that is currently, or in the future becomes, recurrently entered into in the
financial markets (including terms and conditions incorporated by reference in
such agreement) and which is a forward, swap, future, option or other derivative
on one or more rates, currencies, commodities, equity securities or other equity
instruments, debt securities or other debt instruments, or economic indices or
measures of

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Execution

    economic risk or value, or other benchmarks against which payments or
deliveries are to be made, (b) any combination of these transactions and (c) any
other transaction identified as a Specified Transaction in this Agreement or the
relevant confirmation.   (c)   The “Cross Default” provisions of
Section 5(a)(vi) will apply to Party A and will apply to Party B.       If such
provisions apply:-       “Specified Indebtedness” will have the meaning
specified in Section 14 of this Agreement but will exclude deposits received by
a party in the ordinary course of its banking business.       Section 5 (a) (vi)
(2) shall be modified by appending the following at the end thereof:      
“provided, however, that an Event of Default under Section 5(a)(vi)(2) shall not
occur if: (i) the relevant default in making payment was caused by an error or
omission of a technical, administrative or operational nature; (ii) funds were
available to such party to enable it to make the relevant payment when due; and
(iii) such relevant payment is made within three business days for value (with
interest) on the original due date of payment, following receipt of written
notice from an interested party of such failure to pay.”       “Threshold
Amount” means with respect to Party A three per cent (3%) of Party A’s
shareholders equity (as stated in the most recently published annual accounts of
Party A) (or the equivalent thereof in any other currency or currencies) and
with respect to Party B USD 500,000 (Five Hundred Thousand US Dollars) (or the
equivalent thereof in any other currency or currencies).   (d)   The “Credit
Event Upon Merger” provisions of Section 5(b)(iv) will apply to Party A and will
apply to Party B.   (e)   The “Automatic Early Termination” provision of Section
6(a) will not apply to either party.   (f)   Payments on Early Termination. For
the purpose of Section 6(e) of this Agreement:-

  (i)   Loss will apply.     (ii)   The Second Method will apply.

(g)   “Termination Currency” means United States Dollars.   (h)   “Additional
Termination Event” will apply. The following shall constitute an Additional
Termination Event with Party B as the Affected Party. All Transactions shall be
Affected Transactions and Party A shall, at its option, designate an Early
Termination Date:     (i) Breach of Covenants and/or Events of Default in the
Credit Agreement. If, at anytime, Party B breaches any “Covenants” or there
occurs an “Event of Default” (as defined in the Credit Agreement) in the Credit
Agreement.       As used herein and throughout this Agreement, “Credit
Agreement” means that certain Credit Agreement dated as of June 15, 2006, by and
among Teton Energy Corporation, as Borrower; BNP Paribas, as Administrative
Agent; and each other Financial Institutions listed or named therein including
but not limited to BNP Paribas, as Bank or Lender and all documents defined as
or referred to as security, collateral or guaranty therein, such may from time
to time be amended, modified or supplemented.

 

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Execution
PART 2
TAX REPRESENTATIONS

(a)   Payer Representations, For the purpose of Section 3(e) of this Agreement,
Party A will make the following representation and Party B will make the
following representation:-       It is not required by any applicable law, as
modified by the practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment (other than interest under Section 2(e), 6(d)(ii) or
6(e) of this Agreement) to be made by it to the other party under this
Agreement. In making this representation, it may rely on:-

  (i)   the accuracy of any representations made by the other party pursuant to
Section 3(f) of this Agreement;     (ii)   the satisfaction of the agreement
contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party pursuant to
Section 4(a)(i) or 4(a)(iii) of this Agreement; and     (iii)   the satisfaction
of the agreement of the other party contained in Section 4(d) of this Agreement,

provided that it shall not be a breach of this representation where reliance is
placed on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.

(b)   Party A Payee Tax Representations. For the purpose of Section 3(f), Party
A makes the following representations:

(i) with respect to payments that are attributable to Party A’s U.S. trade or
business:
It is a bank organized under the laws of France, acting hereunder through its
New York branch, and any payment received by it in connection with any
Transaction entered into hereunder will be effectively connected with its
conduct of a trade or business in the United States.
(ii) with respect to payments that are not attributable to Party A’s U.S. trade
or business:
It is fully eligible for the benefits of the “Business Profits” or “Industrial
and Commercial Profits” provision, as the case may be, the “Interest” provision
or the “Other Income” provision (if any) of the Specified Treaty with respect to
any payment described in such provisions and received or to be received by it in
connection with this Agreement.
“Specified Treaty” means with respect to Party A: the tax treaty for the
avoidance of double taxation and the prevention of fiscal evasion with respect
to taxes on income, if any, between the Government of France and the Government
of the country from which payments can be made by Party B.

(c)   Party B Payee Tax Representations. For the purpose of Section 3(f), Party
B makes the following representation:     (i) Teton Energy Corporation is an
independent energy company engaged primarily in the development, production, and
marketing of natural gas and oil in North America. Any payment received by it in
connection with any Transaction entered into hereunder will be effectively
connected with its conduct of a trade or business in the United States.

 

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Execution
PART 3
AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver the following documents, as applicable:-

(a)   Tax forms, documents or certificates to be delivered are:-

          Party required to         Deliver       Date by which to Document  
Form/Document/Certificate   be delivered
Party A
  An executed United States Internal Revenue Service Form W-8BEN (or any
successor thereto) with respect to any payments received or to be received by
Party A that are not effectively connected or otherwise attributable to Party
A’s conduct of a trade or business in the United States.

An executed United States Internal Revenue Service Form W-8ECI (or any successor
thereto) with respect to any payments received or to be received by Party A that
are effectively connected or otherwise attributable to Party A’s conduct of a
trade or business in the United States.   Upon execution of this Agreement.
 
       
Party B
  An executed United States Internal Revenue Service W-9 (or any successor
thereto), if applicable, with respect to any payments received or to be received
by Party B.   Upon execution of this Agreement, and thereafter promptly upon
reasonable demand by Party A
 
       
PARTY A and PARTY B
  Any form, document or certificate reasonably requested by the other party in
order for such other party to be able to make payments hereunder without
withholding for or on account of Taxes or with such withholding at a reduced
rate.   As soon as practicable following written demand.

(b)   Other documents to be delivered are:

 

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Execution

              Party required       Date by   Covered by to deliver       which
to be   Section 3(d) document   Form / Document / Certificate   delivered  
Representation
Party A and Party B
  Such proof as Party A and Party B may reasonably request of the names, true
signatures and authority of persons signing this Agreement on its behalf and any
other document referred to herein to which it is a party   on signing   Yes
 
           
Party B
  Certified copies of all corporate authorisations and any other documents with
respect to the execution, delivery and performance of this Agreement (and any
Credit Support Document, if applicable); together with a certificate of
authority and specimen signatures of the persons executing this Agreement (and
any Credit Support Document, if applicable);   On signing   Yes
 
           
Party B
  A copy of Party B’s (and any of its Credit Support Provider’s, if applicable)
most recently available annual report containing audited financial statements
for Party B’s, most recently ended fiscal year certified by its (and its Credit
Support Provider’s, if applicable), independent public accountants as fairly
presenting Party B’s (and its Credit Support Provider’s, if applicable),
financial condition and results of operations for and as at the close of such
fiscal year.   Promptly after
a request by
Party A   Yes
 
           
 
  With respect to Party A’s annual report, please access the website:        
 
  www.bnpparibas.co m.        
 
           
Party B
  A copy of Party B’s (and any of its Credit Support Provider’s, if applicable)
most recently available unaudited financial statements for Party B’s (and its
Credit Support Provider’s, if applicable) most recently ended fiscal quarter
certified by Party B’s (and its Credit Support Provider’s, if applicable), chief
financial officer as fairly presenting Party B’s (and its Credit Support
Provider’s, if applicable), financial condition and results of operations for
and as at the close of such quarter;   Promptly
after a
request by
Party A   No

 

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              Party required       Date by   Covered by to deliver       which
to be   Section 3(d) document   Form / Document / Certificate   delivered  
Representation
Party B
  Each regular financial and/or business reporting document that is distributed
or is generally available to Party B’s (and its Credit Support Provider’s, if
applicable), partners, shareholders, creditors or investors or is filed with any
regulatory authorities and is publicly available or relates to Party B’s (and
its Credit Support Provider’s, if applicable), financial condition;   Promptly
after a
request by Party A   Yes
 
           
Party B
  Such other information respecting Party B’s (and its Credit Support
Provider’s, if applicable), condition or operations, financial or otherwise, as
Party A may reasonably request from time to time;   promptly
after a
request by
Party A   Yes
 
           
Party B
  Written notification of appointment of Party B (and/or its Credit Support
Provider’s, if applicable) Process Agent and evidence of the acceptance of such
appointment by the Process Agent[s];   upon execution and delivery of this
Agreement   No
 
           
Party B
  The Credit Support Document duly executed by Party B or its Credit Support
Provider.   upon execution and delivery of this Agreement   Yes

PART 4
MISCELLANEOUS

(a)   Addresses for Notices. For the purpose of Section 12(a) of this
Agreement:-       Address for notices or communications to Party A:       With
respect to Commodity Related Transactions :-       BNP Paribas, New York branch
    Address:             787 Seventh Avenue, 3rd Floor, New York, New York 10019
    Attention:           Commodity Indexed Transactions Group (“CITG”)     Copy
to:             CITG Legal Documentation /CITG Operations Department    
Facsimile No.:    (212)841-2041/2884     Tel. No:      (212) 841-2000/3429      
With respect to this Agreement for any other purpose:—.       BNP Paribas, New
York branch     Address:             787 Seventh Avenue, New York, New York
10019     Attention:            Legal and Transaction Management Group — ISDA  
  Facsimile No:     212-841-3561    Tel. No:    212-841-3025

 

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    Mandatory copy to:       BNP Paribas Head Office     Address:      20
boulevard des Italiens, 75009 Paris     Attention:      Legal and Transaction
Management Group — ISDA     Facsimile No:    +(33) (0) 1 4014 0114/5577 3261,  
Tel. No:   +(33) (0) 1 4014 0199       Address for notices or communications to
Party B:-       Teton Energy Corporation     Address:            410 17th St.,
Suite 1850, Denver, CO 80202     Attention:          Bill I. Pennington,
Executive VP and CFO     Facsimilie No:    303-565-4606 Tel. No. 303-565-4600  
(b)   “Process Agent”, For the purpose of Section 13(c) of this Agreement:-    
  Party A appoints as its Process Agent:       Its New York branch at 787
Seventh Avenue, New York, New York 10019, attn: Legal and Transaction Management
Group.       Party B appoints as its Process Agent:       CT Corporation with
offices on the date hereof at 111 Eighth Avenue, New York, New York 10011   (c)
  Offices. The provisions of Section 10(a) will apply to this Agreement.   (d)  
Multibranch Party. For the purpose of Section 10(c) of this Agreement:-      
Party A is a Multibranch Party and may act through the following Offices: Party
A Head Office, New York, Tokyo, London, Hong Kong, Singapore, Sydney (AFSL
238043), Dublin and Grand Cayman.       And the following additional Offices
with respect to FX and FX Currency Option Transactions: Bangkok, Taipei, Taipei
Offshore Banking Unit, Seoul, Manama, Manila, Mumbai, Frankfurt, Amsterdam,
Athens, Luxembourg, Oslo, Brussels, Madrid, Milan, and St. Helier.       Party B
is not a Multibranch Party.   (e)   Calculation Agent. The Calculation Agent is
Party A. The failure by Party A to perform its obligations as Calculation Agent
hereunder shall not be construed as an Event of Default or Termination Event.  
(f)   Credit Support Document.       The Guaranty and Pledge Agreement under the
Credit Agreement, such may from time to time be amended, modified or
supplemented, shall be a Credit Support Document in relation to Party B and is
incorporated herein by reference.

 

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If Party A ceases to remain a Lender or party to the Credit Agreement (as in
Part 1(h)(i) of this Schedule), or if the indebtedness is paid in full and the
credit Agreement is terminated and all liens and security interests securing
Party B’s obligations and indebtedness thereunder have been released or
reassigned or if the obligations under this Agreement is no longer secured under
the Credit Agreement; the Credit Support Annex dated as of even date herewith
shall be a Credit Support Document in relation to Party B and is incorporated
herein by reference.

(g)   Credit Support Provider. With respect to party A, Not Applicable; and with
respect to Party B, the Guarantors as defined under the Credit Agreement.
  (h)   Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York, without giving effect to its
choice of law doctrine (NEW YORK GENERAL OBLIGATIONS LAW SEC. 5-1401).   (i)  
Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement will
apply only to Transactions that are other than Commodity Derivative Transaction,
Foreign Exchange Transactions of Currency Option Transactions unless otherwise
stated in any Confirmation.   (j)   “Affiliate” will have the meaning specified
in Section 14 of this Agreement.

PART 5
OTHER PROVISIONS

(a)   ISDA Definitions       The definitions and provisions contained in the
2000 ISDA Definitions (the “ISDA Definitions”) and the 2005 ISDA Commodity
definitions (the “Commodity Definition”), as published by the International
Swaps and Derivatives Association, Inc. and as such definitions may be further
amended or supplemented from time to time (collectively, the “Definitions”) are
incorporated into used in a Confirmation shall have the meaning set forth in the
Definitions, unless otherwise defined in a Confirmation. In the event of any
conflict between the provisions of this Agreement and the provisions of the
Definitions, the provisions of the Agreement shall apply, and in the event of
any conflict between the provisions of this Agreement and a Confirmation, the
provisions of the Confirmation shall apply.   (b)   Set-off       Any amount
(the “Early Termination Amount”) payable to one party (the “Payee”) by the other
party (the “Payer”) under Section 6(e), in circumstances where there is a
Defaulting Party or an Affected Party where a Termination Event under
Section 5(b)(iv) has occurred, will, at the option of the party (“X”) other than
the Defaulting Party or the Affected Party (and without prior notice to the
Defaulting Party of the Affected Party), be reduced by its set-off against any
amount(s) (the “Other Agreement Amount”) payable (whether at such time or in the
future or upon the occurrence of the contingency) by the Payee to the Payer
irrespective of the currency, place of payment or booking office of the
obligation under any other agreement(s) (the “Other Agreement”) between the
Payee and the Payer (and the Other Agreement Amount will be discharged pro
tanto). X will give notice to the other party of any set-off so effected.      
For this purpose, either the Early Termination Amount or the Other Agreement
Amount (or the relevant part of such amounts) may be converted at the applicable
prevailing exchange rate into the currency in which the other is denominated.

 

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If an obligation is unascertained, X may in good faith estimate that obligation
and set-off in respect of the estimate, subject to the relevant party accounting
to the other when the obligation is ascertained.
Nothing in this paragraph shall be effective to create a charge or other
security interest. This Section shall be without prejudice and in addition to
any right of set-off combination of account, lien or other right to which any
party is at any time otherwise entitled (whether by operation of law, contract
or otherwise).

(c)   Tax Event       Section 5(b)(ii) is amended by deleting the words“, or
there is a substantial likelihood that it will”, from line four thereof.   (d)  
Scope of Agreement. Section 9 of this Agreement is hereby amended by the
addition of the following new Section 9(h):       “Notwithstanding anything
contained in this Agreement to the contrary, if the parties enter or have in the
past entered into any Specified Transaction excluding repurchase transactions,
reverse repurchase transactions, buy/shell-back transactions, security lending
transactions and forward purchase or sales of securities transactions, such
Specified Transaction shall be subject to, governed by, and construed in
accordance with the terms of this Agreement unless any confirmation or
documentation relating thereto shall specifically state to the contrary. Each
such Specified Transaction shall be a Transaction for the purposes of this
Agreement and in the event of any inconsistency between the terms of such
Specified Transaction and the terms of this Agreement, the terms of such
Specified Transaction shall prevail.”   (e)   Representations. Each party will
be deemed to represent to the other party on the date on which it enters into a
Transaction that (absent a written agreement between the parties that expressly
imposes affirmative obligations to the contrary for that Transaction):

(i) Non-Reliance. It is acting for its own account and it has made its own
independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for its based upon its own judgement and
upon advice from such advisers as it has deemed necessary. It is not relying on
any communication (written or oral) of the other party as investment advice or
as a recommendation to enter into that Transaction; it being understood that
information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to
enter into that Transaction. It has not received from the other party any
assurance or guarantee as to the expected results of the Transaction.
(ii) Evaluations and Understanding. It is capable of evaluating and
understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of that
Transaction. It is also capable of assuming, and assumes, the financial and
other risks of that Transaction.
(iii) Status of parties. The other party is not acting as a fiduciary or an
adviser for it in respect of that Transaction.
(iv) Acting as Principal. It is acting as principal and not as agent or in any
other capacity, fiduciary or otherwise.

(f)   Representations. Each party will be deemed to represent to the other party
on the date on which it enters into a Transaction that:

(i) Eligible Contract Participant. It is an “Eligible Contract Participant” as
defined in Section 1a (12) of the commodity Exchange Act Pursuant to the
Commodity Futures Modernization

 

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Act of 2000 adopted by the Commodity Futures Trading Commission from the
exchange trading and certain other requirements of the Commodity Exchange Act.

(g)   Events of Default. Section 5(a) of the Agreement is amended as follows:

  (i)   by deleting the word “third” appearing on line three in subsection
(i) thereof and substituting the word “first” therefor;     (ii)   by deleting
the word “thirtieth” appearing on line five of subsection (ii) thereof and
substituting the word “fifth” therefor;     (iii)   by inserting the following
at the end of subsection (vii)(3) thereof:

     “or a notice is sent convening a meeting to propose a voluntary arrangement
of its creditors”;

  (iv)   by deleting the number “30” appearing on lines ten and eighteen of
subsection (vii) thereof and substituting the number “15” therefor.

(h)   Consent to Recording. Each party (i) consents to the recording of
telephone conversations of trading and marketing personnel of the parties in
connection with this Agreement and any Transactions hereunder and to the
submission of such recordings in evidence in any Proceedings and (ii) agrees to
obtain any necessary consent of, and give notice of such recording to, such
personnel.   (i)   Notices. The parties hereby acknowledge and agree to the
deletion of the words “facsimile transmission or” in line three of Section 12(a)
of this Agreement.   (j)   Prior Transactions. In the event that Party A and
Party B have entered into swaps, options or similar transactions prior to the
execution of this Agreement (“Existing Transactions”), under Confirmations or
Commodity Hedge Agreements the parties hereby agree that these Existing
Transaction shall for all purposes be Transactions hereunder and shall be
subject to all the terms of this Agreement. However, the delivery of documents
pursuant to Part 3 of this Schedule shall not be required in connection with the
Existing Transaction. To the extent the terms herein conflict with the terms of
the agreements governing the Existing Transactions, the terms of this Agreement
shall apply.   (k)   Default Under Specified Transaction. Section 5(a)(v) will
be deleted in its entirety and replaced with the following provision:

“(v) Default under Specified Transaction. The party, any Credit Support Provider
of such party or any applicable Specified Entity of such party (1) defaults
(other than by failing to make a delivery) under a Specified Transaction or any
credit support arrangement relating to a Specified Transaction and, after giving
effect to any applicable notice requirement or grace period, such default
results in a liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving effect to
any applicable notice requirement or grace period, in making any payment due on
the last payment or exchange date of, or any payment on early termination of, a
Specified Transaction (or, if there is no applicable notice requirement or grace
period, such default continues for at least one Local Business Day);
(3) defaults in making any delivery due under (including any delivery due on the
last delivery or exchange date of) a Specified Transaction or any credit support
arrangement relating to a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, such default results in a
liquidation of, an acceleration of obligations under, or an early termination
of, all transactions outstanding under the documentation applicable to that
Specified Transaction; or (4) disaffirms, disclaims, repudiates or rejects, in
whole or in part, or challenges the validity of, a Specified Transaction or any
credit support arrangement relating to a Specified Transaction that is, in
either case, confirmed or evidenced by a document or other confirming evidence
executed and delivered by that party, Credit

 

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Support Provider or Specified Entity (or such action is taken by any person or
entity appointed or empowered to operate it or act on its behalf);”

(l)   Termination Events       Section 5(b) is amended by including the
following:

  “(vi)   Force Majeure Event. After giving effect to any applicable provision,
disruption fallback or remedy specified in, or pursuant to, the relevant
Confirmation or elsewhere is this Agreement, by reason of force majeure or act
of state occurring after a Transaction is entered into, on any day:-

  (1)   the Office through which such party (which will be the Affected Party)
makes and receives payments or deliveries with respect to such Transaction is
prevented from performing any absolute or contingent obligation to make a
payment or delivery in respect of such Transaction, from receiving a payment or
delivery in respect of such Transaction or from complying with any other
material provision of this Agreement relating to such Transaction (or would be
so prevented if such payment, delivery or compliance were required on that day),
or it becomes impossible or impracticable for such Office so to perform, receive
or comply (or it would be impossible or impracticable for such Office so to
perform, receive or comply if such payment, delivery or compliance were required
on that day); or     (2)   such party or any Credit Support Provider of such
party (which will be the Affected Party) is prevented from performing any
absolute or contingent obligation to make a payment or delivery which such party
or Credit Support Provider has under any Credit Support Document relating to
such Transaction, from receiving a payment or delivery under such Credit Support
Document or from complying with any other material provision of such Credit
Support Document (or would be so prevented if such payment, delivery or
compliance were required on that day), or it becomes impossible or impracticable
for such party or Credit Support Provider so to perform, receive or comply (or
it would be impossible or impracticable for such party or Credit Support
Provider so to perform, receive or comply if such payment, delivery or
compliance were required on that day),

so long as the force majeure or act of state is beyond the control of such
Office, such party or such Credit Support Provider, as appropriate, and such
Office, party or Credit Support Provider could not, after using all reasonable
efforts (which will not require such party or Credit Support Provider to incur a
loss, other than immaterial, incidental expenses), overcome such prevention,
impossibility or impracticability;”
Further to this amendment, the following consequential amendments will also be
made:

  (i)   Section 5(b) will be amended by adding “or a Force Majeure Event if the
event is specified in (vi) below” after “specified in (iii) below” in the fourth
line;     (ii)   by replacing the “.” at the end of Section 5(b)(v) with “; or”;
    (iii)   Section 5(c) will be amended by adding the following sentence at the
end, “If an event or circumstance which would otherwise constitute or give rise
to an Event of Default also constitutes a Force majeure Event, it will be
treated as a Force Majeure Event and will not constitute an Event of Default.”;
    (iv)   Section 6(b)(ii) will be amended by adding the words “,a Force
Majeure Event under Section 5(b)(vi)” immediately after the words “If an
Illegality under Section 5(b)(i)(1)” in the first sentence;

 

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  (v)   Section 6(b)(iii) will be amended by adding the words “, a Force Majeure
Event under Section 5(b)(vi)” immediately after the words “If and Illegality
under Section 5(b)(i)(I)” at the start of the sentence;     (vi)  
Section 6(b)(iv)(2) will be amended by adding the words “,a Force Majeure Event
under Section 5(b)(vi)” immediately after the words “If and Illegality under
Section 5(b)(i)(2)” at the start of the sentence;     (vii)   Section 6(b)(iv)
will be amended by adding the words “or a Force Majeure Event,” immediately
after the words “either party in the case of an Illegality,”;     (viii)   The
definition of “Affected Transactions” in Section 14 will be amended by adding
the words “a Force Majeure Event,” immediately after the words “consisting of an
Illegality,”;     (ix)   Section 14 will be amended by the inclusion of a new
definition as follows:         ““Force Majeure Event” has the meaning specified
in Section 5(b)(vi)”; and     (x)   The definition of “Termination Event” is
amended to include the words “a Force Majeure Event” after the word “Illegality”
: in the first line.

(m)   Additional Representation(s).

(i)   Pari-Passu. Party B represents, warrants and covenants, (said
representation shall be covered by section 3(d) of the Agreement), to Party A
that its obligations under this Agreement shall rank at all times pari-passu
with any other senior secured Specified Indebtedness.

PART 6
FX AND CURRENCY OPTION TRANSACTIONS

(a)   Confirmations       Where a Transaction is confirmed by means of an
electronic messaging system that the parties have elected to use to confirm such
Transaction or if the Transaction is a FX Transaction or a Currency Option
Transaction confirmed by a means other than by an electronic messaging system
(i) such confirmation will constitute a ‘Confirmation’ as referred to in this
Agreement even where not so specified in the confirmation, (ii) such
Confirmation will supplement, form part of, and be subject to this Agreement
(unless such Confirmation shall expressly state otherwise) and all provisions in
the Agreement will govern the Confirmation except as modified therein and
(iii) the definitions and provisions contained in the 1998 ISDA FX and Currency
Option Definitions (as published by the International Swaps and Derivatives
Association, Inc., the Emerging Markets Traders Association and The Foreign
Exchange Committee) as amended and supplemented by the 1998 ISDA Euro
Definitions (published by the International Swaps and Derivatives Association,
Inc.) (together the “FX Definitions”) will be incorporated into the Confirmation
if the Transaction is an FX Transaction or Currency Option Transaction.      
For the purpose of this Agreement, the terms “Currency Option Transaction” and
“FX Transaction” shall have the meanings ascribed to them in the FX Definitions.

 

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(b)   Payment Instructions. All payments to be made hereunder in respect of FX
Transactions and Currency Option Transactions shall be made in accordance with
standing payment instructions provided in writing from time to time by the
parties (or as otherwise specified in a Confirmation).   (c)   Payment of
Premiums for Currency Option Transactions.

  (i)   Unless otherwise agreed in writing by the parties, the premium for any
Currency Option Transaction shall be paid on its Premium Payment Date.     (ii)
  If the Premium is not paid on its Premium Payment Date, the Seller may elect:

  (A)   to accept a late payment of such Premium;     (B)   to give written
notice of such non-payment and, if such payment shall not be received within two
(2) Local Business Days of such notice, treat the related Currency Option
Transaction as void; or     (C)   to give written notice of such non-payment
and, if such payment shall not be received within two (2) Local Business Days of
such notice, treat such non-payment as an Event of Default under Section 5 (a)
(i) of the Agreement.

  (iii)   If the Seller elects to act under either (A) or (B) above, the Buyer
shall pay all out-of-pocket costs and actual damages incurred in connection with
such unpaid or late Premium or void Currency Option Transaction, including,
without limitation, interest on such Premium from and including the Premium
Payment Date to but excluding the late payment date in the same currency as such
Premium at the prevailing market rate and any other losses, costs or expenses
incurred by the Seller in connection with such terminated Currency Option
Transaction, for the loss of its bargain, its cost of funding, or the loss
incurred as a result of terminating, liquidating, obtaining or re-establishing a
delta hedge or related trading position with respect to such Currency Option
Transaction.

(d)   Netting Discharge and Termination of Currency Options.

From a date to be mutually agreed by the parties, any Call Option or any Put
Option written by a party will automatically be terminated and discharged, in
whole or in part, as applicable, and unless otherwise agreed, against a Call
Option or a Put Option, respectively written by the other party, such discharge
and termination to occur automatically upon the payment in full of the last
Premium payable in respect of such Currency Option Transaction in accordance
with standard payment instructions; provided that such discharge and termination
may only occur in respect of Currency Option Transactions:

  (i)   each being with respect to the same Put Currency and the same Call
Currency;     (ii)   each having the same Expiration date and Expiration Time;  
  (iii)   each being of the same style i.e. either both being American Style
Options or both being European Style Options;     (iv)   each having the same
Strike Price;     (v)   each having been transacted by the same offices of Party
A and Party B; and     (vi)   neither of which shall have been exercised by
delivery of a Notice of Exercise;

and upon the occurrence of such discharge and termination, neither Party shall
have any obligation to the other Party in respect of the relevant Currency
Option Transaction or, as the case may be, parts

 

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thereof so discharged and terminated. Such discharge and termination shall be
effective notwithstanding that either party may fail to record such discharge
and termination in its books. In the case of a partial discharge and termination
(i.e. where the relevant Currency Option Transactions are for different amounts
of the Currency Pair), the remaining portion of the Currency Option Transaction
which is partially discharged and terminated shall continue to be a Currency
Option Transaction for the purpose of the Agreement, including this provision.

             
SIGNED FOR AND ON BEHALF OF
      SIGNED FOR AND ON BEHALF OF    
BNP PARIBAS
      TETON ENERGY CORPORATION    
(“Party A”)
      (“Party B”)    
 
           
By: /s/ Christopher Taylor
      By: /s/ Karl F. Arleth    
 
           
Name: Christopher Taylor
      Name: Karl F. Arleth    
 
           
Title: Vice President/Derivatives Credit
      Title: Chief Executive Officer & President    
 
           
By: /s/ Dora Sung
      By: /s/ Bill I. Pennington    
 
           
Name: DORA SUNG
      Name: Bill I. Pennington    
 
           
Title: MANAGING DIRECTOR BNP Paribas / CIT Group
      Title: CFO & Executive Vice President  

 

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Seal of Pascal Dufour, Jean-Pierre
   
Benoist & Claudine Savary
   
Notaries
   
15 Boulevard Poissonnière
   
75002 Paris
   

7 JULY 2004
BNP PARIBAS
Total Delegation of Authority
by philippe BLAVIER
to
Dominique AUBERNON
Didier BALME
Jean-Michel BARDIN
Amine BELHADJ
(et al.)

     
 
  Visé NE VARIETUR sous le n° Marie-Paule WAGNER
Expert-Traducteur Juré

16 JUIL. 2004

 

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2

00037422
Stamp tax paid on statement
Authorisation No. 28/83 of 21 November 1983
No. 005429

         
 
    00037435  
245645 01
  Stamp tax paid on statement
CLS/45/GS
  Authorisation No. 28/83 of 21 November 1983
 
  No. 000893

Seal of Pascal Dufour, Jean-Pierre Benoist & Claudine Savary, Notaries
15 Boulevard Poissonniere, 75002 Paris
Registration taxes on statement: €75
     On 7 July 2004,
     Before Pascal DUFOUR, Esq., notary, member of the firm of Pascal Dufour,
Jean-Pierre Benoist & Claudine Savary, notaries, 15 Boulevard Poissonniére,
Paris 2
     This notarial (total) delegation of powers was signed by:
     Philippe BLAVIER, domiciled at 3 Rue d’Antin, Paris (2nd arrondissement),
     Acting as Head of the Corporate and Investment Banking Core Business of BNP
PARIBAS SA (“the Company”), a public limited company with a capital of
1,757,231,208 euros and its registered office at 16 Boulevard des Italiens,
Paris (9th arrondissement), identified by SIREN
No. 662 042 449 RCS Paris.
     Hereto authorized by virtue of the powers delegated to him in a general
power-of–attorney signed on 30 October 2003 before Claudine SAVARY, Esq., notary
in Paris, by Baudouin PROT, domiciled at 3 Rue d’Antin, Paris 2, the Company’s
Chief Executive Officer (and Board Member), whereby authority was delegated to
the “General Agents” (including the aforesaid Signatory), each of whom was
authorized to act alone and to redelegate his powers to all such agents (“Deputy
Agents”) as he saw fit.
     Baudouin PROT having been elected the Company’s Chief Executive Officer
(and Board Member) by a resolution adopted at a meeting of the Board of
Directors on 11 June 2003, a certified true excerpt from the minutes of which
has been filed in the records of the aforesaid notarial firm as evidenced by a
record of such filing signed before Claudine SAVARY, Esq., notary in Paris, on
27 June 2003.
     At said meeting on 11 June 2003, the Company’s Board of Directors specified
the methods of dissociation of the offices of Chairman and Chief Executive
Officer the principle of which it had defined on motion of Chairman and Chief
Executive Officer Michel PEBEREAU at its meeting on 14 May 2003 preceding a
mixed regular and special meeting of the Company’s shareholders, Mr. PEBEREAU
thus assuming

 

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3

office of Chairman of the Board of Directors and Baudouin PROT that of Chief
Executive Officer (and Board Member).
     Assuming the general management of BNP Paribas by virtue of said
resolution, the Commercial Code’s provisions relative to business corporations,
and the Company’s certificate of incorporation, and having the broadest powers
to act for the Company in all circumstances.
     Who, in his aforesaid capacity, hereby delegates to the following persons
(the “Deputy Agents”):
          Business Lines, Coverage, Territories, Functions and Regions:

 

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 4

             
Dominique
  AUBERNON   Matthieu   LACAZE
Didier
  BALME   François   LAPLACE
Jean-michel
  BARDIN   Hélène   LECLERC
Amine
  BELHADJ   Philippe   LOUSKY
Jean-François
  BIARD   Chantal   MAZZACURATI
Jean-Pierre
  BERNARD   Loïc   MEINNEL
Thierry
  BERNARD   Philippe   MEUNIER
Jean-Marc
  BONNEFOUS   Yann   MUZIKA
Patrick
  BRISSIAUD   Eric   NICOLAS
David
  BRUNNER   Jean   NUNEZ
Michel
  CHEVALIER   Tomoko   NUNOI
Pascal
  CONFAVREUX   Florian   OLLIVIER
Pierre Joseph
  COSTA   Olivier   OSTY
Françoise
  DANIEL   David   OVENDEN
Mignonne
  DAO   Oliver   PAUL
Philippe
  DE GENTILE   Lincoln   PAYTON
Jacques
  DESBIEG   Gilles   PECRIAUX
Thierry
  DESJARDINS   Chantal   PIANI
Jacques
  DESPONTS   Jean-Jacques   POIRRIER
Jean-François
  DIMEGLIO   Alain   POIRSON
Jacques
  D’ESTAIS   Denis   QUILLET
Gautier
  DIRCKX   Eric   RAYNAUD
François
  DRAVENY   Dominique   REMY
Jean-Louis
  DUGUIT   Christophe   ROUSSEAU
Michel
  EYDOUX   Denis   ROUSSEAU
Alexandrine
  FERRI   Everett   SCHENK
Magali
  FOUCAUD   Larry   SOBIN
Rémi
  FRANK   Arnaud   TELLIER
François
  FREYEISEN   Jean-Charles   TATIBOUET
Bernard
  GAVGANI   Jacques-Olivier   THOMANN
Gilles
  GELLE   Thierry   VARENE
Yann
  GERARDIN   Philippe   VUARCHEX
Nathalie
  HARTMANN   Marie-Françoise   WALBAUM
Robert
  HAWLEY   Cyril   WOLKONSKY
Frédéric
  JANBON   Paul   YANG
Michel
  KONCZATY   Yusuke   YASUDA
Alain
  KASPEREIT        

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 5
Territories:

             
Christian
  ABEILLON   Michal   KOZARZEWSKI
Dominique
  ALCOUFFE   Antonio   LADEIRA
Frédéric
  AMOUDRU   Patrick   LANG
Robert
  AMZALLAG   Jae Young   LEE
Pascal
  BORIS   Didier   MAHOUT
Philippe
  BOUYAUD   Eric   MARTIN
Jean-Claude
  CHAVAL   Ramiro   MATO
Jean-Paul
  CHING   Andrzej   MAUBERG
Laurent
  COURANDON   Bernard   MENCIER
François
  CRISTOFARI   Benoît   MONSAINGEON
Michel
  DE VIBRAYE   Thierry   RAMENASON
Bernard
  DIGEON   Hervé   REYNAUD
Thierry
  DINGREVILLE   Philippe   REYNIEIX
Philippe
  DITISHEIM   Robert   RICCI
Michel
  DUBOIS   Ullrich-Günther   SCHUBERT
Graziano
  FERRARI   Giuseppe   SPADAFORA
Jean-François
  FICHAUX   Jean-Michel   VANDEKERKOVE
Paul-François
  GAUVIN   François   VAN DEN BOSCH
Christian
  GIRAUDON   Philippe   VION
Jean-François
  GLOUX   Siew Ying   YAP
Laszlo
  HAAS   Chye Kin   WEE
Philippe
  JOANNIER   Hai Tao   XIE

general authority to bind the Company in connection with and for purposes of all
the transactions customarily engaged in by credit institutions and investment
service providers in France and abroad, as provided below, including the
following general transactions:

•   To represent the Company vis-à-vis third parties, all authorities and all
public agencies, without restriction; to sign the correspondence; to sign all
prospectuses, all reports of operations or any other document intended for
French or foreign regulatory or supervisory authorities.   •   To employ,
appoint and dismiss all employees and agents.   •   To appoint all special
agents (authorized to act alone) by (notarial or non-notarial) written special
and specific power-of-attorney, for purposes of agreement to and execution of a
deed, contract or other document concerning a specific transaction or one or
more types of specific transactions included in the general transactions
described herein; to revoke the appointments of such special agents.

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6

•   To establish and manage the general organization of any Branch or
Representative Office, wherever established.   •   To buy, sell, exchange,
partition all real estate, real rights, shares of building companies in any
form, all businesses, business segments, leaseholds, corporate and other
intangible rights; to have all articles and conditions drawn up, to specify all
reserve prices therein; to make all bids or overbids; to establish or acquire,
under the same conditions, all praedial servitudes and easements, to alter them,
to waive the same; to manage and administer all real estate belonging to the
Company; to apply for all administrative authorizations; to have all condominium
declarations, master deeds and lists of condominium units drawn up; to represent
the Company at all meetings of owners, tenants, partners or shareholders, to
take part in all votes, to make all decisions; to grant, accept, amend and
cancel all leases as landlord or tenant; to grant all mortgages, real estate
pledges or equivalent security interests in France and abroad, to decide on all
amendments thereof, to request release thereof, to consent to discharge thereof
and cancellation of the registration thereof, all with or without evidence of
payment; to request the formalities appurtenant thereto of all competent
organizations, mortgage offices, land offices, offices of clerks of commercial
courts, trade and companies registers or others.   •   To make all purchases and
sales of personalty, equipment and supplies necessary for the Company’s
operations, for that purpose to enter into all contracts and place all orders,
to request the formalities appurtenant thereto of all competent organizations.  
•   To procure or cancel all insurance policies relative to the operations and
transactions covered by this power-of-attorney.   •   To make, grant or contract
all loans of borrowings, credit lines or advances.   •   To accept and receive —
form all French or foreign private or public natural persons or legal entities,
including the Caisse Centrale du Tresor Public, the Caisse des Dépôts et
Consignations, all public or sate-approved agencies or institutions, autonomous
public corporations, public service concessionaires, semi-public companies, all
private or municipal payers, paymasters, receivers and collectors, all without
limitation — all principal amounts and interest due to the Company and to
receipt therefor.   •   To open all accounts for the Company in all French or
foreign banks, credit institutions, financial services or other companies,
including the Banque de France and other central banks, to decide on and accept
all terms relative to the opening of such accounts and transaction of business
therein, to accept all credit lines; to open and accept all letters of credit;
to make up and settle all current or other accounts.   •   To make all deposits
and withdrawals of funds, securities, valuables; to accept all cash and other
security deposits.

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7

•   To draw, indorse, accept, pay all negotiable instruments, to remit them for
discount or collection; to indorse and pay all checks and remit them for
collection; to sign all checks, transfer orders and payment or settlement orders
on all French or foreign banks, including the Banque de France or other central
banks, French or foreign credit or other institutions, to make all withdrawals
of funds; to make all protests and serve all notices and banker’s tickets.   •  
To post all bonds, security deposits and guaranties.   •   To grant all credit
lines, all advances, all discount authorizations, for that purpose to enter into
all contracts and agreements, receive, pay, make up, settle all current and
other accounts.   •   To fix discount and interest rates, fees, custodian
charges.   •   To extend the maturities of contracts, bills of exchange,
promissory notes, instruments of all kinds and all commitments more generally.  
•   To acquire and assign all receivables in any way.   •   To make all
exchanges with our without balancing payments.   •   To decide on the nature of
all guaranties and security interests to be granted to the Company, to accept
such security and any subordination and any subrogation; to request the
formalities appurtenant thereto of all competent organizations, mortgage
offices, land offices, offices of clerks of commercial courts, or others.   •  
To accept, take and hold all guaranties and security interests in any form, by
way of garnishments, caveats, notices, stop-payment and stop-transfer orders,
personalty and real estate pledges, registered mortgages, security deposits,
bonds, liens, chattel mortgages, hypothecations, attachments, distraints or
other equivalent security; to consent to all amendments of such guaranties and
security interests, all subordinations, extensions of times, remissions of debt,
waivers, releases and cancellations, all with or without evidence of payment; to
consent to, accept and sign all agreements and contracts entailing parity of
rank, novation, assignment of receivables or liabilities, subrogation and
subrogation receipt; to request the formalities appurtenant thereto of all
competent organizations, mortgage offices, land offices, offices of clerks of
commercial courts, or others.   •   To let all safes or safe-deposit boxes to
customers.   •   To acquire an dispose of all interests in all companies,
whether existing or to be organized, to participate in the founding of all
companies, associations and organizations.

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8

•   To make all applications of funds, to purchase or otherwise acquire all
securities for the Company, to have them registered in the Company’s name.   •  
To buy and sell for cash or on time all government or other bonds, shares and
other securities belonging to the Company, including securities issued by public
or private legal entities transferable by book entry or delivery which confer
identical rights per class and directly or indirectly afford entitlement to a
percentage of the issuer legal entity’s capital stock or to a general claim on
its assets; to request and make transfers or conversions to registered or bearer
from all securities, to accept and receive the amounts due on matured securities
and all premiums and prizes, to receipt therefore.   •   To rent a safe-deposit
box in all French or foreign banks or credit institutions in the Company’s name,
to have free access thereto, to make all deposits therein and withdrawals
therefrom.   •   To subscribe to all issues of shares, to pay the amount of the
subscribed capital and all premiums in excess of par value in one or more
instalments, to sign all subscription forms, to make all exchanges of
securities.   •   To buy and sell gold, silver and all precious materials in
general.   •   To engage in all spot or forward foreign and currency exchange
transactions.   •   To engage in all foreign currency transactions and all
interest rate transactions, including swaps and hedges.   •   To certify all
documents, checks and customers’ signatures.   •   To receipt for all payments
in whatever legal form.   •   To withdraw all assets deposited to secure all
advances, to receive all arrears and dividends, whether or not matured, to
transfer them if need be.   •   To accept all advances on deposits of Treasury
bills, shares, bonds, for that purpose to make all commitments to all French or
foreign public or private banks, credit and other institutions, all French or
foreign individuals, the Banque de France and other central banks.   •   To
engage in all transactions concerning the opening of postal checking accounts
and transactions therein.   •   To agree on, discuss, close, make up and settle
all accounts with all customers, debtors, depositaries, to determine the balance
due, to pay or receive the same.

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9

•   To withdraw insured and other letters, boxes and packages from the post
office and all express and parcel delivery services or carriers, to withdraw all
deposits, cash all money orders, give all releases.   •   To sign all receipts,
acknowledgments, advices, notices, waybills, routing orders, transaction
confirmations, accounts, statements of accounts and other documents.   •   To
sign all receipts and releases for cash, all receipts and releases for
certificates of title to gold, silver, precious materials in general, and all
receipts for articles, letters, parcels, packages.   •   To take all legal
proceedings in the Company’s name in all countries; to defend the Company in
France and abroad in all competent trial and appellate courts and all
arbitration proceedings; to have all summonses and subpoenas before all
competent trial and appellate courts and arbitrations boards in France and
abroad served; to file and withdraw all criminal charges in France and abroad,
whether or not coupled with civil claims.   •   In event of dispute, to take all
necessary proceedings in person or through an agent; for that purpose to summon,
appear and testify in and before all courts or arbitrations boards, to appoint
all arbitrators, to sign all submission bonds, to be reconciled, otherwise to
sue and defend in and before all competent trail and appellate courts and
arbitration boards, to obtain all trial and appellate judgments and arbitration
awards, to have them executed in all legal ways and by all legal means, or to
waive the same; to have all attachments of real or personal property made, to
request all entries and registrations; to file claims in all bankruptcy and
reorganizations proceedings, distributions and apportionments, to receive the
amount of all claims; to give or accept receipts and release for all sums
received or paid.   •   To assign all claims, receivables, rents or royalties,
whether or not matured, for such considerations and on such terms as they see
fit.   •   To represent the Company in all meetings and deliberations of
shareholders, bondholders and partners and in the discharge of the duties of all
offices to which it may be elected, to cast all votes.   •   To make all
bargains and settlements, to accept all compromises, to consent to all
acquiescences and waivers, all subrogations and subordinations, and all releases
of recorded encumbrances, liens, attachments, caveats, stop-payment and
stop-transfer orders and other rights, before or after payment; to request the
formalities appurtenant thereto of all competent organizations.

 

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10

•   To represent the Company in all bankruptcy, reorganization, arrangement or
equivalent proceedings; to file or report the Company’s claim with or to all
authorized parties, to adduce all proofs, to file all demands and claims with
such parties.   •   To represent the Company vis-à-vis all tax or other
authorities, to make and sign all returns, to pay all duties, penalties, taxes,
charges, to file all requests for exemption from or reduction or refund of such
duties, taxes and penalties.   •   To comply on the Company’s behalf with all
filing and notice formalities required by statutory or regulatory provisions; to
request all entries and amendatory entries concerning the Company on the Trade
and Companies Register or with other similar organizations.   •   To comply with
all formalities (or have them complied with) relative to the filing and
registration of all trademarks and trade names and applications for all patents.

For those purposes, to sign all instruments, documents, records, reports and
minutes, to designate address for notices and service of process, and generally
to do the needful for purposes of the foregoing operations and transactions.
Each of the Deputy Agents shall himself assume, in that capacity, in lieu of the
Signatory who shall accordingly be exonerated therefrom, any criminal liability
of the Company for any offenses committed in the exercise of the powers hereby
delegated.

    The powers delegated above to the Deputy Agents concerns ALL the general
powers delegated to the Signatory by Baudouin PROT aforesaid in the aforesaid
notarial general power-of-attorney dated 30 October 2003.       The Signatory
specifies that this (total) delegation of powers supersedes, effective this
date, the delegation of powers to various employees of BNP Paribas by the
Signatory in a document signed before Claudine SAVARY, Esq., notary in Paris, on
11 July 2003.

  1.   The deputy Agents to whom authority is delegated by this
power-of-attorney and the documents amending and/or supplementing it may sign
only jointly in pairs in one of the following ways:

  •   either inter sese,     •   or, for the transactions described in the
power-of-attorney signed on this date by Philippe BLAVIER aforesaid before
Claudine SAVARY, Esq., delegating (partial) powers to various employees in
charge of Representative Offices of the Company abroad, with a Deputy Agent
named in that power-of-attorney,

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11

  •   or with a General Agent,     •   or with a Subdeputy Agent,     •   or
with one of the deputy agents named in the power-of-attorney delegating powers
(“Functions”) to various employees signed by Baudouin PROT, aforesaid, on 30
October 2003 before Claudine SAVARY, Esq., notary in Paris (or other documents
supplementing and/or amending said power-of-attorney).

          As specified in 2. below, the Deputy Agents may, by a redelegation of
powers, redelegate to any agents (any “Subdeputy Agents”) some or all of the
general powers delegated to them hereby (and by documents supplementing and/or
amending this one).
     The Deputy Agents may also appoint any special agents (authorized to act
alone) by a special and specific (notarial or non-notarial) written
power-of-attorney for the purpose of agreement to and execution of a deed,
contract or other document concerning a specific transaction or one or more
types of specific transactions included in the general transactions described in
this power-of-attorney (and the documents supplementing and/or amending it), in
accordance with the terms of this power-of-attorney (and the documents
supplementing and/or amending it).
2. The Deputy Agents, acting in pairs, may redelegate some or all of the general
powers delegated to them hereby (and by the documents supplementing and/or
amending this one) to all such agents (the “Subdeputy Agents”) as they see fit
by a redelegation of powers.
Such redelegations of powers shall be made as follows:
     2.1. The Subdeputy Agents to whom authority is redelegated by the
redelegations of powers and documents supplementing and/or amending them may
sign only jointly in pairs inter sese or with a General Agents or a deputy
Agent. Notwithstanding that rule and for practical reasons, redelegations of
powers (and documents supplementing and/or amending them) concerning the
Company’s Branches and Representative Offices abroad may provide that Subdeputy
Agents (or some of them) may sign either in pairs (as aforesaid) or alone, as
the Deputy Agents see fit.
     The Subdeputy Agents may not redelegate the general powers delegated to
them by the redelegation of powers (and by the documents supplementing or
amending it).

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12

     The Subdeputy Agents may however appoint any special agents (authorized to
act alone) by a special and specific (notarial or non-notarial) written
power-of-attorney for purposes of agreement to and execution of a deed, contract
or other document concerning a specific transaction or a type of specific
transaction included in the general transactions described in the redelegation
of powers (and the documents supplementing and/or amending it), in accordance
with the terms of such redelegation of powers (and of the documents
supplementing and/or amending it).
     2.2. Each redelegation of powers (and each document supplementing and/or
amending it) shall be made by notarial document signed before one of the members
of the aforesaid notarial firm, who shall inform the Company thereof in writing.
Notwithstanding that rule and for practical reasons, the redelegations of powers
(and documents supplementing and/or amending them) concerning the Company’s
Branches and Representative Offices abroad may also be either signed before a
foreign notary or acknowledged before a member of the Bar. Such document, which
shall be in compliance with the provisions and clauses relative to redelegations
of powers contained in the general power-of-attorney and in the delegation of
powers concerned except for minor adaptations necessitated by the governing
foreign law, shall be filed in the records of the aforesaid notarial firm, to
which full authority for that purpose is delegated, which shall inform the
Company thereof in writing; a translation of such document, if it is in a
foreign language, shall simultaneously be filed in said notarial firm’s records.
     2.3. In the same way as specified in 2.2. above, the Deputy Agents may as
they see fit amend the list of the Subdeputy Agents and/or the general powers
delegated to them (or to some of them) by the redelegation of powers (and the
documents supplementing and/or amending it).
     The Signatory specifies in his aforesaid capacity that in the aforesaid
general power-of-attorney signed by Baudouin PROT, aforesaid, on 30 October 2003
before Claudine SAVARY, Esq., Mr. PROT specified in his aforesaid capacity that
from the date of execution of said general power-of-attorney, the delegations of
powers (and all the documents supplementing and/or amending them) and the
redelegations of powers (and all the documents supplementing and/or amending
them) shall contain the provisions set forth in said general power-of-attorney,
and that from the date thereof, each of said documents shall supersede the
delegation of powers and redelegation of powers referred to in I.b. of said
general power-of-attorney.
DELEGATION OF AUTHORITY
     Full authority is delegated by the Signatory to the aforesaid notarial firm
to inform the Company of the execution hereof pursuant to the aforesaid notarial
general power-of-attorney signed by Baudouin PROT, aforesaid, on 30
October 2003.

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13

     DOCUMENT on twelve (12) pages, containing;
— no approved insertions
— no lines drawn through blank spaces
— no full lines deleted
— no figures deleted
— no words deleted
     After reading hereof by the aforesaid notary, this document was signed by
said notary and by the Signatory before said notary in BNP PARIBAS’s offices at
3 Rue d’Antin, Paris 2, on the aforesaid date.

      SIGNATURE of     Philippe BLAVIER   (signature) General Agent of BNP
PARIBAS           SIGNATURE of     Mr. DUFOUR   (signature) Notary in Paris    

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14

     CERTIFIED TRUE COPY of a document in the records of the notarial firm at 15
Boulevard Poissonnière, Paris second arrondissement,
     On thirteen pages, without insertion or deletion.
     Certified true to the original, sealed and delivered by Pascal DUFOUR,
Esq., undersigned notary in Paris,
     A member of the notarial firm now named Pascal Dufour, Jean-Pierre Benoist
& Claudine Savary, notaries, 15 Boulevard Poissonniere, Paris, 2nd
arrondissement.
     This document bound by the ASSEMBLACT RC process preventing any
substitution or addition is signed on the last page pursuant to §9.15 of Decree
71-941 of 26 November 1971.
(signature)