exv4w23






Exhibit 4.23




(Multicurrency—Cross Border)

ISDA 1992 Master Agreement




AMENDED AND RESTATED

SCHEDULE

to the

Master Agreement




dated as of January 4, 2010



between



	 	 	 	 	 

	BP Corporation North America Inc.

	 	 	 	Legacy Energy, Inc.
	a corporation organized and existing

	 	and
	 	a corporation organized and existing
	under the laws of the State of Indiana

	 	 	 	under the laws of the State of Delaware
	 
	 	 	 	 
	(“Party A”)

	 	 	 	(“Party
B”)






Party A and Party B entered into an ISDA Master Agreement (“Master Agreement”) and Schedule thereto
(“Original Schedule”), dated as of April 1, 2009 (collectively the “Original Agreement”). Party A
and Party B desire to amend and restate the Original Schedule as follows below. This Amended and
Restated Schedule (“Schedule”) and the Master Agreement are referred to collectively as the
“Agreement”.




Part 1. Termination Provisions.





	(a)	 	“Specified Entity” means in relation to Party A for the purpose of:





	 	 	 

	Section 5(a)(v):

	 	Not Applicable
	Section 5(a)(vi):

	 	Not Applicable
	Section 5(a)(vii):

	 	Not Applicable
	Section 5(b)(iv):

	 	Not Applicable
	 
	 	 
	and in relation to Party B for the purpose of:
 
	Section 5(a)(v):

	 	Not Applicable
	Section 5(a)(vi):

	 	Not Applicable
	Section 5(a)(vii):

	 	Not Applicable
	Section 5(b)(iv):

	 	Not Applicable







	(b)	 	“Specified Transaction” will have the meaning specified in Section 14 of this Agreement.
	 
	(c)	 	The “Cross Default” provisions of Section 5(a)(vi) will apply to Party A and to Party B and,
provided further that, such provisions will apply in respect of Party B under:






(A) that certain Credit Agreement dated December 17, 2009 by and among Legacy Energy, Inc.,
as Borrower, Nimin Energy Corp., and Ionic Capital Corp., as a Lender with respect to the
loans and obligations (“Credit Agreement”);




(B) that certain Amendment to Deed of Trust, Mortgage, Security Agreement, Financing
Statement, Assignment of Leases and Assignment of Production dated December 17, 2009 from
Legacy Energy, Inc. as Mortgagor and Debtor to Ionic Capital Corp., Trustee for the benefit
of Ionic Capital Corp. as Mortgagee (“Wyoming Mortgage”);



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(C) that certain Deed of Trust, Assignment of Production, Security Agreement, Financing
Statement and Fixture Filing dated December 17, 2009 from Legacy Energy, Inc., as Trustor
and Debtor, to First American Title Insurance Company, as Trustee, for the benefit of Ionic
Capital Corp., as Secured Party (“California Mortgage”);




(D) those certain Act(s) of Mortgage, Pledge, Security Agreement and Assignment of
Production dated December 17, 2009 from Legacy Energy, Inc., as Mortgagor, to Ionic Capital
Corp., as Mortgagee (each of mortgages for (i) Jefferson Davis Parish, (ii) Lafourche
Parish, (iii) Vermillion Parish, (iv) Acadia Parish, and (v) St. Landry Parish; together,
the “Louisiana Mortgages”);




(E) that certain Pledge dated December 17, 2009 from NiMin Energy Corp., for the benefit of
Ionic Capital Corp., as Collateral Agent for the Secured Parties (“Pledge”);




(F) that certain Share Pledge dated December 17, 2009 from NiMin Energy Corp., for the
benefit of Ionic Capital Corp., as Collateral Agent for the Secured Parties (“Share
Pledge”);




(G) that certain Guarantee dated December 17, 2009 from NiMin Energy Corp., for the benefit
of Ionic Capital Corp., as Collateral Agent for the Secured Parties (“Guarantee”);




(H) that certain Debenture dated December 17, 2009 from NiMin Energy Corp., for the benefit
of Ionic Capital Corp., as Collateral Agent for the Secured Parties (“Debenture”);




(I) that certain Intercreditor Agreement dated January 4, 2010 by and among BP Corporation
North America Inc, as Swap Counterparty, Legacy Energy, Inc., as Borrower, and Ionic Capital
Corp., as a Lender and as Collateral Agent with respect to the loans and obligations
(“Intercreditor Agreement”);




(J) any other instrument, agreement, filing or other document included as one of the
security documents as set forth in Section 7 of the Credit Agreement (“Other Security
Instruments”); and




(K) any amendments, ratifications or modifications to (A) through (J) thereto. Collectively
the Credit Agreement, the Wyoming Mortgage, the California Mortgage, the Louisiana
Mortgages, the Pledge, the Share Pledge, the Guarantee, the Debenture, the Intercreditor
Agreement, the Other Security Instruments and any amendments, ratifications or modifications
thereto, shall hereinafter be referred to as the “Security Documents.”




	 	(i)	 	“Specified Indebtedness” has the meaning specified in Section 14 except that
for Party A it excludes an obligation for borrowed money where the creditor’s recourse
on the obligation is limited to assets for which the money was borrowed; and
	 
	 	(ii)	 	“Threshold Amount” means with respect to Party A: 3% of the Shareholders’
Equity of Party A and with respect to Party B, $500,000 USD; and






	 	 	For the purposes of the definition of Threshold Amount, “Shareholders’ Equity” means, at any
time, the amount of paid-in capital in respect of all issued and fully-paid shares of the
share capital of the relevant entity, plus the contributed surplus, plus the cumulative
translation adjustment (if any), plus the retained earnings, less any treasury stock held,
and plus or minus (as applicable) any other adjustment to the equity account, all the
foregoing as calculated in accordance with generally accepted accounting principles in the
country in which the entity is organized, consistently applied..
	 
	(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 Party A and
will not apply to Party B.




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	(f)	 	Payments on Early Termination. For the purpose of Section 6(e) of this Agreement and subject
to the provisions of Part 5 of this Schedule:






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






	(g)	 	“Termination Currency” means United States Dollars.
	 
	(h)	 	“Additional Termination Event” will apply.






	 	(i)	 	If any or all of the Security Documents (as defined in Part 1 (c) of this
Schedule) (i) expire, (ii) are terminated, replaced or refinanced, (iii) assigned to
any third party, or (iv) amended, the result of which event under (i), (ii), (iii) or
(iv) is to materially reduce the value of the collateral, security, or credit support
available to Party A, as determined by Party A in its sole discretion, while
Transactions are still in effect or outstanding hereunder and Party B does not within
two (2) business days of such expiration, termination, replacement, refinancing,
assignment, or amendment, as applicable, either (A) deliver pari passu 1st lien
replacement security having a value and terms and conditions acceptable to Party A in
its sole discretion, or (B) provide Party A with replacement security sufficient in
form, amount and for a term acceptable to Party A in its sole discretion (such security
including but not limited to providing a standby irrevocable letter of credit, a
prepayment, a security interest in an asset, a performance bond or guaranty, or a
mutually agreed to Credit Support Annex and Paragraph 13 to this Agreement), then Party
B will be the sole Affected Party.”





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)	 	Payee Representations.






	 	(1)	 	For the purpose of Section 3(f) of this Agreement, Party A represents that (i)
it is a corporation organized and existing under the laws of the State of Indiana, (ii)
it is a U.S. person within the meaning of Section 7701 of the Internal Revenue Code,
and (iii) its U.S. taxpayer identification number is 36-1812780.
	 
	 	(2)	 	For the purpose of Section 3(f) of this Agreement, Party B represents that (i)
it is a corporation organized and existing under the laws of the State of Delaware,
(ii) it is a U.S. person within the meaning of Section 7701 of the Internal Revenue
Code, and (iii) its U.S. taxpayer identification number is 26-0584520.




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Part 3. Agreement to Deliver Documents.



For the purpose of Sections 4(a)(i), (ii) and (iii) of this Agreement, each party agrees to deliver
the following documents, as applicable:





	(a)	 	Tax forms, documents or certificates to be delivered: None, other than those required in
Section 4(a)(iii).
	 
	(b)	 	Other documents to be delivered:





	 	 	 	 	 	 	 
	Party	 	 	 	 	 	 
	Required to	 	 	 	 	 	 
	Deliver	 	Form/Document/	 	Date by Which	 	Covered by Section
	Document	 	Certificate	 	to be Delivered	 	3(d) Representation
	 
	 	 	 	 	 	 
	Party A and Party B

	 	A certified copy of
the resolution of
the Board of
Directors of Party
A or Party B, as
the case may be, or
of its relevant
committee,
authorizing such
party to enter into
this Agreement and
each Transaction,
and an incumbency
certificate.
	 	Upon the execution
of this Agreement.
	 	Yes
	 
	 	 	 	 	 	 
	Party A and Party B

	 	A copy of the Form
10-K or the annual
report for such
party, or the
Credit Support
Provider of Party
B, (if relevant)
containing audited
financial
statements for the
most recently ended
financial year.
	 	Contemporaneously
with delivery to
lender, unless
publicly available
through EDGAR or
some other source.
	 	Yes
	 
	 	 	 	 	 	 
	Party B

	 	Any engineering
valuations and any
reserve reports
covering the Oil
and Gas Property as
defined in the
Intercreditor
Agreement.
	 	Upon the execution
of this Agreement,
and thereafter as
and when prepared
for Party B under
Section 12(j) of
the Credit
Agreement.
	 	Yes
	 
	 	 	 	 	 	 
	Party B

	 	Copies of all
determinations
and/or
re-determinations
of the value of the
Security as defined
in and provided for
in the Credit
Agreement.
	 	Upon the receipt of
the determinations
and/or
redeterminations by
Party B.
	 	Yes
	 
	 	 	 	 	 	 
	Party B

	 	Executed copies of
all agreements and
documents listed
under as set forth
in Section 7 of the
Credit Agreement.
	 	Upon request, as
soon as reasonably
practicable.
	 	Yes
	 
	 	 	 	 	 	 
	Party B

	 	Reports of all
volumes of
production
committed to
commodity hedge
agreements (if
applicable) of
Party B setting
forth the type,
term, effective
date, termination
date and notional
amounts or volumes
and the
counterparty to
each such
agreement.
	 	Upon request or as
soon as reasonably
practical after
each such agreement
is entered into.
	 	Yes
	 
	 	 	 	 	 	 
	Party B

	 	Copies of any
financial reports
or summaries
provided under
Section 12 of the
Credit Agreement.
	 	Upon request, as
soon as reasonably
practicable.
	 	Yes
	 
	 	 	 	 	 	 
	Party A and Party B

	 	Such other
information and
documents as the
other party may
reasonably request.
	 	Upon request, as
soon as reasonably
practicable.
	 	Yes






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Part 4. Miscellaneous.





	(a)	 	Address for Notices. For the purpose of Section 12(a) of this Agreement:
	 
	 	 	Address for Confirmations to Party A:





	 	 	 

	Address:

	 	BP Corporation North America Inc.
	 

	 	501 WestLake Park Blvd.
	 

	 	Houston, Texas 77079
	 
	 	 
	Attention:

	 	Confirmation Department
	 
	 	 
	Facsimile No.:

	 	281-366-4934
	Telephone No.:

	 	281-366-0879







	 	 	Address for other notices or communications to Party A (other than Confirmations):





	 	 	 

	Address:

	 	BP Corporation North America Inc.
	 

	 	501 WestLake Park Blvd.
	 

	 	Houston, Texas 77079
	 
	 	 
	Attention:

	 	Contract Services
	 
	 	 
	Facsimile No.:

	 	281-366-0203
	Telephone No.:

	 	281-366-7159







	 	 	Address for Invoices to Party A:





	 	 	 

	Address:

	 	BP Corporation North America Inc.
	 

	 	501 WestLake Park Blvd.
	 

	 	Houston, Texas 77079
	 
	 	 
	Attention:

	 	Risk Accounting
	 
	 	 
	Facsimile No.:

	 	281-366-5935
	Telephone No.:

	 	281-366-4919







	 	 	Wire Payment Instructions for Party A:






	 	 	 	BP Corporation North America Inc.

JP Morgan Chase Bank, NY

For the Account of: BP Energy Company

ABA: 021-000021

Acct No.: 910-2-548097

New York, NY 10081-6000






	 	 	Address for Confirmations, notices or communications to Party B:





	 	 	 

	Address:

	 	Legacy Energy, Inc.
	 

	 	1135 Eugenia Place, Suite C
	 

	 	Carpinteria, CA 93013
	 
	 	 
	Attention:

	 	Jonathan S. Wimbish
	 
	 	 
	Telephone No.:

	 	805-566-2900
	Facsimile No.:

	 	805-566-2917






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	 	 	Address for Invoices to Party B:





	 	 	 

	Address:

	 	Legacy Energy, Inc.
	 

	 	P.O. Box 420
	 

	 	Carpinteria, CA 93013
	 
	 	 
	Attention:

	 	Jonathan S. Wimbish
	 
	 	 
	Telephone No.:

	 	805-566-2900
	Facsimile No.:

	 	805-566-2917







	 	 	Wire Payment Instructions for Party B:






	 	 	 	Bank: Business First Bank
	 
	 	 	 	For the Account of: Legacy Energy, Inc.

ABA: 122239982

Acct No.: 1010004206

1035 State St.

Santa Barbara, CA 93101





	 	 	 	 	 

	(b)

	 	Process Agent.
	 	With respect to Party A: Not Applicable.
	 
	 

	 	 	 	With respect to Party B: Not Applicable.







	(c)	 	Offices. The provisions of Section 10(a) will apply to this Agreement.
	 
	(d)	 	Multibranch Party. For purposes of Section 10(c) of this Agreement:
	 
	 	 	Party A is not a Multibranch Party.
	 
	 	 	Party B is not a Multibranch Party.
	 
	(e)	 	Calculation Agent. The Calculation Agent is Party A unless an Event of Default in respect of
Party A has occurred and is then continuing in which case the Calculation Agent shall be Party
B or a recognized dealer designated in good faith by Party B to be the Calculation Agent.
	 
	(f)	 	Credit Support Document.
	 
	 	 	With respect to Party A: Not Applicable.
	 
	 	 	With respect to Party B, the Security Documents.
	 
	(g)	 	Credit Support Provider.
	 
	 	 	Credit Support Provider means in relation to Party A: Not Applicable
	 
	 	 	Credit Support Provider means in relation to Party B: Not Applicable
	 
	(h)	 	GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED, INTERPRETED, AND ENFORCED IN
ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS, WITHOUT REGARD OR REFERENCE TO THE CHOICE OF
LAW DOCTRINE OF ANY JURISDICTION.




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	(i)	 	Jurisdiction. Section 13(b) of the Agreement is hereby amended by (i) deleting the word
“non-exclusive” appearing in paragraph (i) thereof and substituting therefor the word
“exclusive” and (ii) deleting the last sentence of Section 13(b) and substituting therefor the
following sentence:
	 
	 	 	“Nothing in this Agreement precludes either party from bringing Proceedings in any other
jurisdiction if (A) the courts of the State of Texas or the United States District Court
located in the City of Houston lacks jurisdiction over the parties or the subject matter of
the Proceedings or declines to accept the Proceedings on the grounds of lacking such
jurisdiction; (B) the Proceedings are commenced by a party for the purpose of enforcing
against the other party’s property, assets or estate any decision or judgment rendered by
any court in which Proceedings may be brought as provided hereunder; (C) the Proceedings are
commenced to appeal any such court’s decision or judgment to any higher court with competent
appellate jurisdiction over that court’s decisions or judgments if that higher court is
located outside the State of Texas or City of Houston, such as a federal court of appeals or
the U.S. Supreme Court; or (D) any suit, action or proceeding has been commenced in another
jurisdiction by or against the other party or against its property, assets or estate
(including, without limitation, any suit, action or proceeding described in Section
5(a)(vii)(4) of this Agreement), and, in order to exercise or protect its rights, interests
or remedies under this Agreement, the party (1) joins, files a claim, or takes any other
action, in any such suit, action or proceeding, or (2) otherwise commences any Proceeding in
that other jurisdiction as the result of that other suit, action or proceeding having
commenced in that other jurisdiction.
	 
	(j)	 	Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement will not apply to all
Transactions.
	 
	(k)	 	“Affiliate” will have the meaning specified in Section 14 of this Agreement.
	 
	(l)	 	“Illegality”. Subparagraph (i) of Section 5(b) of this Agreement shall be deleted in its
entirety and the following shall be substituted in lieu thereof:






(i) Illegality. After giving effect to any applicable provision, disruption fallback or
remedy specified in, or pursuant to, the relevant Confirmation or elsewhere in this
Agreement, due to an event or circumstance (other than any action taken by a party or, if
applicable, any Credit Support Provider of such party) occurring after a Transaction is
entered into, it becomes unlawful under any applicable law (including without limitation the
laws of any country in which payment, delivery or compliance is required by either party or
any Credit Support Provider, as the case may be), on any day, or it would be unlawful if the
relevant payment, delivery or compliance were required on that day (in each case, other than
as a result of a breach by the party of Section 4(b)):—




(1) for the Office through which such party (which will be the Affected Party) makes
and receives payments or deliveries with respect to such Transaction to perform any
absolute or contingent obligation to make a payment or delivery in respect of such
Transaction, 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) for such party or any Credit Support Provider of such party (which will be the
Affected Party) to perform 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, to receive a payment or delivery under such
Credit Support Document or to comply with any other material provision of such
Credit Support Document;



Part 5. Other Provisions.





	(a)	 	LIMITATION OF LIABILITY. NOTWITHSTANDING THE DEFINITION OF “LOSS,” NO PARTY SHALL BE
REQUIRED TO PAY OR BE LIABLE FOR PUNITIVE, EXEMPLARY, CONSEQUENTIAL, SPECIAL, INCIDENTAL OR
INDIRECT DAMAGES (WHETHER OR NOT ARISING FROM ITS NEGLIGENCE OR STRICT LIABILITY) TO ANY OTHER
PARTY; PROVIDED, HOWEVER, THAT NOTHING IN THIS PROVISION SHALL AFFECT THE
ENFORCEABILITY OF SECTION 6(e) OF THIS AGREEMENT OR THE OBLIGATION TO 




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	 	 	PAY ANY AMOUNT
REQUIRED PURSUANT TO SECTION 6(e) OF THIS AGREEMENT; PROVIDED, FURTHER, THIS PART 5(a) SHALL
SURVIVE THE TERMINATION OR EXPIRATION OF THIS AGREEMENT. IF AND TO THE EXTENT ANY PAYMENT
REQUIRED TO BE MADE PURSUANT TO THIS AGREEMENT IS DEEMED TO CONSTITUTE LIQUIDATED DAMAGES,
THE PARTIES ACKNOWLEDGE AND AGREE THAT SUCH DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE
AND THAT SUCH PAYMENT IS INTENDED TO BE A REASONABLE APPROXIMATION OF THE AMOUNT OF SUCH
DAMAGES AND NOT A PENALTY.
	 
	(b)	 	Consent to Telephone Recording; Confirmation of a Transaction.






	 	(i)	 	Transactions Entered Into Orally. Should the parties come to an understanding
regarding a particular Transaction, the Transaction will be formed and effectuated
between the parties by an oral offer and oral acceptance. The parties shall be legally
bound by each Transaction from the time they agree to its terms and acknowledge that
each party will rely thereon in doing business related to the Transaction. Any
Transaction formed and effectuated pursuant to the foregoing shall be considered a
“writing” or “in writing” and to have been “signed” by each party.
	 
	 	(ii)	 	Taping of Transactions. Each party hereby agrees that the other party or its
agents may electronically record all telephone conversations between officers or
employees of the consenting party and the officers or employees of the other party who
quote on, agree to, or otherwise discuss terms of Transactions or potential
Transactions on behalf of the party. Each party may, at each party’s respective
expense, maintain equipment necessary to record Transactions on audiotapes and/or
digital recording media (“Transaction Tapes”) and retain Transaction Tapes and the
electronic evidence of Transactions on such Transaction Tapes in such manner and for so
long as each party deems necessary in its sole respective discretion, but is not
obligated to do so; provided that NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR
ANY MALFUNCTION OF SUCH EQUIPMENT OR THE OPERATION THEREOF IN RESPECT OF ANY
TRANSACTION WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING, WITHOUT
LIMITATION, THE SOLE, JOINT, CONCURRENT, CONTRIBUTORY, AND/OR COMPARATIVE NEGLIGENCE
(WHETHER GROSS OR SIMPLE, OR ACTIVE OR PASSIVE), STRICT LIABILITY, OR OTHER FAULT OF
ANY PARTY. No Transaction shall be invalidated should a Transaction Tape be erased for
any reason or a malfunction occur in equipment utilized for recording Transactions or
retaining Transaction Tapes or the operation thereof.
	 
	 	(iii)	 	Waiver of Statute of Frauds. THE PARTIES HEREBY WAIVE ALL PROVISIONS OF ANY
APPLICABLE STATUTE OF FRAUDS WITH RESPECT TO ANY TRANSACTIONS SUBJECT TO THIS
AGREEMENT; PROVIDED, HOWEVER, AMENDMENTS TO THE TERMS AND PROVISIONS OF THIS AGREEMENT
MUST BE IN WRITING AND SIGNED BY THE PARTIES. The parties agree not to contest or
assert a defense to the validity or enforceability of Transactions entered into orally
under laws relating to whether certain agreements are to be in writing or signed by the
party to be thereby bound.
	 
	 	(iv)	 	Confirmation of a Transaction.






	 	(1)	 	With respect to each Transaction entered into pursuant to this
Agreement, Party A will promptly send a Confirmation to Party B by any
reasonable means, including, without limitation, by facsimile, hand delivery,
courier, or certified United States mail (return receipt requested). Failure
by Party A to send, or Party B to return, a Confirmation shall not invalidate
any Transaction. Party A adopts its confirming letterhead, or the like, as its
signature on any Confirmation as its identification and authentication.
	 
	 	(2)	 	If Party A’s Confirmation is materially different from Party
B’s understanding of the terms of a Transaction, Party B shall notify Party A
of any such material differences in writing by the




8









 






	 	 	 	Confirm Deadline. “Confirm
Deadline” shall mean 5:00 p.m. in Party B’s time zone on the fifth New York
Business Day following the New York Business Day a Confirmation is received by
Party B; provided, if the Confirmation is received after 5:00 p.m. in Party B’s
time zone, it shall be deemed received at the opening of the next New York
Business Day. “New York Business Day” shall mean any day except for a
Saturday, Sunday or a day on which the Federal Reserve Bank of New York is
closed.
	 
	 	(3)	 	The failure of Party B to so notify Party A of any such
material differences in writing by the Confirm Deadline constitutes Party B’s
acceptance of the description of the terms of the Transaction in Party A’s
Confirmation. If Party B has timely objected in writing to the terms of Party
A’s Confirmation, such Transaction remains valid and the parties remain legally
bound thereby; however, both parties shall in good faith attempt to resolve
such differences. Once such material differences are resolved, Party A may
transmit a written Confirmation to Party B, and such written Confirmation shall
be accepted (or disputed) pursuant to the provisions of Part 5(b)(iv). The
provisions of Part 5(b)(iv) may be repeated as many times as necessary to
produce a written Confirmation that is accepted or deemed accepted by the
receiving party.
	 
	 	(4)	 	Notwithstanding the provisions of Section 12(a)(iii) of the
Agreement, a written Confirmation and any other writing related to or in
response to a written Confirmation shall be deemed delivered to the receiving
party (i) when actually received by the receiving party or (ii) with respect to
a written Confirmation and other writing delivered by facsimile, when the
sending party’s facsimile machine indicates by an electronic or written
facsimile log that the receiving party’s facsimile machine received such
written Confirmation.
	 
	 	(5)	 	Party A shall not be required to maintain or retain a
paper-based version of the written Confirmation delivered to Party B. In
addition to a paper-based version of the written Confirmation delivered to
Party B, the following shall constitute a “written Confirmation” for all
purposes of this Agreement: (i) an electronic image of a paper-based version of
the written Confirmation, and (ii) data in Party A’s computer system.
	 
	 	(6)	 	In the absence of a written Confirmation that the parties have
signed or deemed to have accepted, any evidence may be used to establish the
terms of a Transaction, including, without limitation, a Transaction Tape, oral
testimony, data in a computer system, trade tickets, and/or notes. If a
written Confirmation exists which the parties have executed or deemed to have
accepted, in the event of conflict between the terms of the written
Confirmation and any other evidence of the terms of a Transaction (including,
without limitation, a Transaction Tape, oral testimony, data in a computer
system, trade tickets, and/or notes), the terms of the written Confirmation
shall control to the extent of any such conflict.






	 	(v)	 	Confirmations Do Not Amend Certain Terms. Confirmations shall not amend the
terms of this Agreement unless a Confirmation is in writing and signed by both parties.






	(c)	 	Applicable Rate. The definition of “Applicable Rate” set forth in Section 14 is hereby
amended by adding to the end of Section (b) of the definition after the word “Rate” the
following provision: “; provided, however, that if the payee is a Defaulting
Party for purposes of Section 6(e), then the rate shall be the Non-default Rate.”
	 
	(d)	 	Limitation of Rate. Notwithstanding any provision to the contrary contained in this
Agreement, in no event shall the Default Rate, Non-default Rate, or Termination Rate exceed
the maximum non-usurious
interest rate, if any, that at any time or from time to time may be contracted for, taken,
reserved, charged, or received on the subject indebtedness under the law applicable to such
party.




9









 






	(e)	 	Set-off. Without affecting or prejudicing the provisions of this Agreement requiring the
calculation and payment of certain net payment amounts on Scheduled Payment Dates, all
payments will be made without Set-off or counterclaim; provided, however, that upon the
designation or deemed designation of an Early Termination Date, in addition to and not in
limitation of any other right or remedy (including any right to Set-off, counterclaim, or
otherwise withhold payment) under applicable law or this Agreement, the Non-defaulting Party
or the non-Affected Party (in either case, “X”) may, at its option and in its discretion,
Set-off, against any amounts owed to the Defaulting Party or Affected Party (in either case,
“Y”) in Dollars or any other currency by X or any Affiliate of X under this Agreement or
otherwise, any amounts owed in Dollars or any other currency by Y to X or any Affiliate of X
under this Agreement or otherwise. The obligations of Y and X under this Agreement in respect
of such amounts shall be deemed satisfied and discharged to the extent of any such Set-off.
For this purpose, the amounts subject to the Set-off may be converted at the applicable
prevailing exchange rate into the Termination Currency by X. If the amount of an obligation
has not been ascertained, X may, in good faith, estimate that obligation and Set-off in
respect of the estimate, subject to X or Y, as the case may be, accounting to the other party
when the obligation is ascertained. X will give Y notice of any Set-off effected under this
section provided that failure to give such notice shall not affect the validity of the
Set-off. Nothing in this paragraph shall be deemed to create a charge or other security
interest. The rights provided by this paragraph are in addition to and not in limitation of
any other right or remedy (including any right to Set-off, counterclaim, or otherwise withhold
payment) to which a party may be entitled (whether by operation of law, contract or
otherwise).
	 
	(f)	 	Definitions and Inconsistency. This Agreement, each Confirmation, and each Transaction are
subject to the 2000 ISDA Definitions (the “Swap Definitions”), the 2005 ISDA Commodity
Definitions, (the “Commodity Definitions”) each as published by the International Swaps and
Derivatives Association, Inc. (collectively the “ISDA Definitions”). The ISDA Definitions are
incorporated by reference herein, and made part of, this Agreement and each Confirmation as if
set forth in full in this Agreement and such Confirmations. Unless otherwise specified in a
Confirmation, any capitalized terms used herein and not otherwise defined herein shall have
the respective meanings ascribed to them in the Swap Definitions, and the Commodity
Definitions (except that references to “Swap Transactions” in the definitions will be deemed
to be references to “Transactions”). In the event of any inconsistency between the provisions
of the Swap Definitions and the Commodity Definitions, the Commodity Definitions will prevail.
In the event of any inconsistency between the provisions of this Agreement and the ISDA
Definitions, this Agreement will prevail. In the event of any inconsistency between the
provisions of the Credit Support Documents, if any, and the ISDA Definitions, the Credit
Support Documents will prevail. Subject to Section 1(b) of this Agreement, in the event of
any inconsistency between the provisions of any Confirmation and this Agreement or the ISDA
Definitions, the Confirmation will prevail for the purpose of the relevant Transaction;
provided however, a Confirmation may not amend or conflict with any provisions of this
Agreement regarding Events of Default, or Termination Events.
	 
	(g)	 	Change of Account. Section 2(b) is hereby amended by adding the following at the end thereof:
	 
	 	 	“and provided that, unless the other party consents (which consent shall not be unreasonably
withheld, conditioned, or delayed), such new account shall be in the same tax jurisdiction
as the original account.”
	 
	(h)	 	Deduction or Withholding for Tax. Section 2(d)(i)(4) of this Agreement is amended by the
addition of a new sub-paragraph (C) as follows:






“(C) Y refusing to supply any form or document under 4(a)(iii) on grounds of material
prejudice to its legal or commercial position.”




Section 5(b)(ii) will be amended by the addition of “or (C)” after the words “or (B)” at the
end of the last line.




	(i)	 	Agreements — Notices. Section 4(d) of this Agreement is hereby deleted in its entirety and
replaced by the following:




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“(d) Notice. 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.




	(j)	 	Termination Payments by Non-Defaulting Party. Notwithstanding the provisions of Sections
6(e) and 6(d) of the Agreement, if there is a Defaulting Party, the obligations of the
Non-defaulting Party to pay to the Defaulting Party any amount under Section 6(e) shall not
arise until, and shall be subject to the conditions precedent that, the Non-defaulting Party
shall have received confirmation satisfactory to it in its sole discretion that (A) all
Transactions are terminated in accordance with Section 6(c), and (B) all obligations
(contingent or absolute, matured or unmatured) of the Defaulting Party and any Affiliate of
the Defaulting Party to make any payment to the Non-defaulting Party or any Affiliate of the
Non-defaulting Party shall have been fully and finally performed, and (C) if the Defaulting
Party is subject to the jurisdiction of a bankruptcy court, an order of such bankruptcy court
(in form reasonably acceptable to the Non-defaulting Party) shall be final and non-appealable
and shall approve such payment by the Non-defaulting Party; and provided,
further, that if under the foregoing provisions it is determined that the
Non-defaulting Party is to make a payment to the Defaulting Party, there shall be deducted
from the amount of such payment all amounts which the Defaulting Party may be obligated to pay
under Section 11.
	 
	(k)	 	Transfer. Section 7 is hereby amended to read as follows:
	 
	 	 	“Subject to the last sentence of 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 and any
purported transfer without such consent will be void.”
	 
	(l)	 	Waiver of Right to Trial by Jury. Each of the parties hereby irrevocably waives any and all
right to a trial by jury with respect to any legal proceeding arising out of or relating to
this Agreement or any Transaction.
	 
	(m)	 	Additional Representations. Section 3 of the Agreement is hereby amended by adding at the
end thereof the following subsections (g) through (k):






	 	(g)	 	Swap Agreement. (1) This Agreement and any Transaction entered into hereunder
constitutes a “swap agreement” within the meaning of Section 301 of the Commodity
Futures Modernization Act of 2000 (15 U.S.C.A. Section 78c note (West Supp. 2001), (2)
each party further represents and warrants to the other party that (i) this Agreement
and all Transaction(s) hereunder constitute “forward contracts” and/or “swap
agreements” within the meaning of the United States Bankruptcy Code (the “Code”); (ii)
it is a “forward contract merchant” within the meaning of the Code with respect to any
Transactions that constitute “forward contracts”; (iii) it is a “swap participant”
within the meaning of the Code with respect to any Transactions that constitute “swap
agreements”; (iv) all payments made or to be made on its behalf pursuant to this
Agreement, including the application by a party of Posted Collateral to any amounts due
and owing to such party, constitute “settlement payments” within the meaning of the
Code; and (v) all transfers of Eligible Credit Support by it or on it behalf under this
Agreement constitute “margin payments” within the meaning of the Code.
	 
	 	(h)	 	Eligible Commercial Entity/Eligible Contract Participant. It constitutes an
“eligible commercial entity” or “eligible contract participant” as such terms are
defined in the Commodity Exchange Act (7 USC Sec. 1a (11) and (12)).
	 
	 	(i)	 	Relationship Between the Parties. In connection with the negotiation of, the
entering into, and the confirming of the execution of, this Agreement, any Credit
Support Document to which it is a party, and each Transaction: (i) it is acting as
principal (and not as agent or in any other capacity,
fiduciary or otherwise); (ii) the other party is not acting as a fiduciary or
financial or investment advisor for it; (iii) it is not relying upon any
representations (whether written or oral) of the other party other than the
representations expressly set forth in this Agreement and in such Credit




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	 	 	 	Support
Document; (iv) the other party has not given to it (directly or indirectly through
any other person) any advice, counsel, assurance, guaranty, or representation
whatsoever as to the expected or projected success, profitability, return,
performance, result, effect, consequence, or benefit (either legal, regulatory, tax,
financial, accounting, or otherwise) of this Agreement, such Credit Support
Document, or such Transaction; (v) it has consulted with its own legal, regulatory,
tax, business, investment, financial, and accounting advisors to the extent it has
deemed necessary, and it has made its own investment, hedging, and trading decisions
based upon its own judgment and upon any advice from such advisors as it has deemed
necessary, and not upon any view expressed by the other party; (vi) all trading
decisions have been the result of arm’s length negotiations between the parties; and
(vii) it is entering into this Agreement, such Credit Support Document, and such
Transaction with a full understanding of all of the risks hereof and thereof (
economic and otherwise), and it is capable of assuming and willing to assume (
economic and otherwise) those risks.
	 
	 	(j)	 	Line of Business. It has entered into this Agreement (including each
Transaction evidenced hereby) in conjunction with its line of business (including
financial intermediation services) or the financing of its business.
	 
	 	(k)	 	Standardization, Creditworthiness, and Transferability. The material economic
terms of the Agreement, any Credit Support Document to which it is a party, and each
Transaction have been individually tailored and negotiated by it; it has received and
reviewed financial information concerning the other party and has had a reasonable
opportunity to ask questions of and receive answers and information from the other
party concerning such other party, this Agreement, such Credit Support Document, and
such Transaction; the creditworthiness of the other party was a material consideration
in its entering into or determining the terms of this Agreement, such Credit Support
Document, and such Transaction; and the transferability of this Agreement, such Credit
Support Document, and such Transaction is restricted as provided herein and therein.






	(n)	 	Agreement Not Construed Against Drafter. This Agreement (including this Schedule, Credit
Support Annex, Paragraph 13 to the Credit Support Annex, any Confirmation, or any other
amendment hereto) shall not be construed against the drafter thereof, and the rule of contract
construction requiring a contract to be construed against the drafter thereof is expressly
waived by both parties.
	 
	(o)	 	Prior Transactions Subject to this Agreement. Any transaction entered into between the
parties, now existing or hereafter 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), any combination of these transactions or any other
transaction identified as a Transaction in this Agreement or the relevant confirmation whether
before, on or after the effective date of this Agreement, is incorporated into this Agreement
by reference, shall be a Transaction hereunder and shall be subject to the terms herein.
	 
	(p)	 	Reference Market-Makers. The definition of “Reference Market-makers” in Section 14 of this
Agreement is hereby amended by: (i) deleting “(a)” from the second line thereof, (ii) deleting
in the fourth line thereof after the word “credit” the words “and (b) to the extent
practicable, from among such dealers having an office in the same city” and (iii) replacing
such words with the words “or to enter into transactions similar in nature to Transactions.”
	 
	(q)	 	Confidentiality. The contents of this Agreement and all other documents relating to this
Agreement, and any information made available by one party or its Credit Support Provider to
the other party or its Credit
Support Provider with respect to this Agreement is confidential and shall not be disclosed
to any third party (nor shall any public announcement relating to this Agreement be made by
either party), except for such information (i) as may become generally available to the
public, (ii) as may be required or appropriate in




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	 	 	response to any summons, subpoena, or
otherwise in connection with any litigation or to comply with any applicable law, order,
regulation, ruling, or accounting disclosure rule or standard, (iii) as may be obtained from
a non-confidential source that disclosed such information in a manner that did not violate
its obligations to the non-disclosing party or its Credit Support Provider in making such
disclosure, or (iv) as may be furnished to the disclosing party’s Affiliates, and to each of
such person’s auditors, attorneys, advisors or lenders which are required to keep the
information that is disclosed in confidence. With respect to information provided with
respect to a Transaction, this obligation shall survive for a period of one (1) year
following the expiration or termination of such Transaction. With respect to information
provided with respect to this Agreement, this obligation shall survive for a period of one
(1) year following the expiration or termination of this Agreement.
	 
	(r)	 	Party B covenants to Party A that it will ensure that its payment obligations hereunder rank
at all times pari passu in all respects with any and all of Party B’s payments outstanding on
any Advance as such term is defined in the Credit Agreement.




EXECUTED on the dates specified below but effective as of the date first written above.




	 	 	 	 	 	 	 	 	 	 	 	 

	Party A:	 	Party B:
	BP Corporation North America Inc.	 	Legacy Energy, Inc.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 
	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 	 	Title:	 	 
	 

	 	 	 	 
	 	 	 	 	 	 
	 

	 	Date:
	 	 	 	 	 	Date:	 	 
	 

	 	 	 	 
	 	 	 	 	 	 






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