Document:

Exhibit 10.20

 

[EXECUTION COPY]

 

 

 

 

364-DAY
CREDIT AGREEMENT,

 

dated as of October 30, 2003

 

among

 

NOBLE
ENERGY, INC.,

as the Borrower,

 

JPMORGAN
CHASE BANK,

as the Administrative Agent for the Lenders,

 

WACHOVIA
BANK, NATIONAL ASSOCIATION,  

as the Syndication Agent for the Lenders,

 

SOCIÉTÉ
GÉNÉRALE,
DEUTSCHE
BANK AG NEW YORK BRANCH

and

THE ROYAL
BANK OF SCOTLAND PLC,
as the Co-Documentation Agents for the
Lenders,

 

and

 

CERTAIN
COMMERCIAL LENDING INSTITUTIONS,

as the Lenders

 

 

J.P.
MORGAN SECURITIES INC.,

as Lead Arranger and Sole Bookrunner

 

 

 

 

364-DAY CREDIT AGREEMENT

 

THIS 364-DAY CREDIT
AGREEMENT, dated as of October 30, 2003 (as may be amended, restated,
supplemented or otherwise modified from time to time, this “Agreement”), is among NOBLE ENERGY, INC., a
Delaware corporation (the “Borrower”),
JPMORGAN CHASE BANK (“JPMorgan”), as
administrative agent (JPMorgan in such capacity, together with any successor(s)
thereto in such capacity, the “Agent”), WACHOVIA BANK, NATIONAL
ASSOCIATION, as syndication agent (in such capacity, together
with any successor(s) thereto in such capacity, the “Syndication
Agent”), SOCIÉTÉ
GÉNÉRALE, DEUTSCHE
BANK AG NEW YORK BRANCH and THE ROYAL BANK OF SCOTLAND PLC, as co-documentation agents (in such
capacity, together with any successor(s) thereto in such capacity,
individually, a “Co-Documentation Agent” and, collectively, the “Co-Documentation
Agents”), and certain commercial lending institutions as are or may become
parties hereto (collectively, the “Lenders”).

 

The parties hereto agree
as follows:

 

ARTICLE I

DEFINITIONS
AND ACCOUNTING TERMS

 

SECTION 1.1                          Defined
Terms.  The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):

 

“Affiliate” of any Person means any other
Person which, directly or indirectly, controls, is controlled by or is under
common control with such Person (excluding any trustee under, or any committee
with responsibility for administering, any Plan).  A Person shall be deemed to be “controlled by” any other Person
if such other Person possesses, directly or indirectly, power (a) to vote
20% or more of the securities (on a fully diluted basis) having ordinary voting
power for the election of directors or managing general partners; or (b) to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.

 

“Agent” is defined in the preamble and includes each other Person as
shall have subsequently been appointed as the successor Agent pursuant to Section 9.4.

 

“Agents” means the Agent, the Syndication
Agent, the Co-Documentation Agents and any entity identified as a “Senior
Managing Agent” on the signature pages to this Agreement, together with any
successors in any such capacities.

 

“Agreement” means, on any date, this 364-Day
Credit Agreement as originally in effect on the Effective Date and as
thereafter from time to time amended, supplemented, amended and restated, or
otherwise modified and in effect on such date.

 

“Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied by
the Agent.

 

 

“Applicable Facility Fee Rate” means the
number of basis points per annum (based on a year of 360 days) set forth below
based on the Applicable Rating Level on such date:

 

 

	
  Applicable Rating Level

  	
   

  	
  Applicable
  Facility Fee Rate

  	
   

  
	
  Level I

  	
   

  	
  12.5

  	
   

  
	
  Level II

  	
   

  	
  15.0

  	
   

  
	
  Level III

  	
   

  	
  17.5

  	
   

  
	
  Level IV

  	
   

  	
  20.0

  	
   

  
	
  Level V

  	
   

  	
  25.0

  	
   

  

 

In the event that any outstanding Revolving Loans are
converted to Term Loans pursuant to Section 2.1.2,
then the Applicable Facility Fee Rate shall be increased by 25.0 basis
points.  Changes in the
Applicable Facility Fee Rate will occur automatically without prior
notice.  The Agent will give notice
promptly to the Borrower and the Lenders of changes in the Applicable Facility
Fee Rate.

 

“Applicable Margin” means on any date and with
respect to each Eurodollar Loan the number of basis points per annum set forth
below based on the Applicable Rating Level on such date:

 

 

	
  Applicable Rating

  Level

  	
   

  	
  Utilization less
  than or

  equal to 25%

  	
   

  	
  Utilization
  greater than

  25%

  	
   

  
	
  Level I

  	
   

  	
  62.5

  	
   

  	
  75.0

  	
   

  
	
  Level II

  	
   

  	
  72.5

  	
   

  	
  85.0

  	
   

  
	
  Level III

  	
   

  	
  82.5

  	
   

  	
  95.0

  	
   

  
	
  Level IV

  	
   

  	
  105.0

  	
   

  	
  130.0

  	
   

  
	
  Level V

  	
   

  	
  125.0

  	
   

  	
  150.0

  	
   

  

 

 

In the event that any outstanding Revolving Loans are
converted to Term Loans pursuant to Section 2.1.2,
then the Applicable Margin as to such Loans shall be increased by 25.0 basis
points.  Changes in the
Applicable Margin will occur automatically without prior notice.  The Agent will give notice promptly to the
Borrower and the Lenders of changes in the Applicable Margin.

 

“Applicable Rating Level” means (i) at any
time that Moody’s and S&P have the equivalent rating or split ratings of
not more than one rating differential of the Borrower’s senior unsecured
long-term debt, the level set forth in the chart below under the heading
“Applicable Rating Level” opposite the rating under the heading “Moody’s” or
“S&P” which is the higher of

 

2

 

the two if split ratings or
opposite the ratings under the headings “Moody’s” and “S&P” if equivalent,
and (ii) at any time that Moody’s and S&P have split ratings of more than
one rating differential of the Borrower’s senior unsecured long-term debt, the
level set forth in the chart below under the “Applicable Rating Level” opposite
the rating under the heading “Moody’s” or “S&P” which is one notch higher than
the lower of the two ratings.

 

 

	
  Applicable Rating Level

  	
   

  	
  Moody’s

  	
   

  	
  S&P

  	
   

  
	
  Level I

  	
   

  	
  >A3

  	
   

  	
  >A-

  	
   

  
	
  Level II

  	
   

  	
  Baa1

  	
   

  	
  BBB+

  	
   

  
	
  Level III

  	
   

  	
  Baa2

  	
   

  	
  BBB

  	
   

  
	
  Level IV

  	
   

  	
  Baa3

  	
   

  	
  BBB-

  	
   

  
	
  Level V

  	
   

  	
  <Ba1

  	
   

  	
  <BB+

  	
   

  

 

For example, if the
Moody’s rating is Baa1 and the S&P rating is BBB, Level II shall apply.

 

For purposes of the
foregoing, (i) “>“ means a rating equal to or more favorable than; “<“
means a rating equal to or less favorable than; “>“ means a rating greater
than; “<“ means a rating less than; (ii) if a rating for the Borrower’s
senior unsecured long-term debt is not available from one of the Rating
Agencies, the Applicable Rating Level will be based on the rating of the other
Rating Agency; (iii) if ratings for the Borrower’s senior unsecured
long-term debt is available from neither S&P nor Moody’s, Level V shall be
deemed applicable; (iv) if determinative ratings shall change (other than as a
result of a change in the rating system used by any applicable Rating Agency)
such that a change in Applicable Rating Level would result, such change shall
effect a change in Applicable Rating Level as of the day on which it is first
announced by the applicable Rating Agency, and any change in the Applicable
Margin or percentage used in calculating fees due hereunder shall apply commencing
on the effective date of such change and ending on the date immediately
preceding the effective date of the next such change; and (v) if the rating
system of any of the Rating Agencies shall change prior to the date all
obligations hereunder have been paid and the Commitments canceled, the Borrower
and the Lenders shall negotiate in good faith to amend the references to
specific ratings in this definition to reflect such changed rating system, and
pending such amendment, if no Applicable Rating Level is otherwise determinable
based upon the foregoing, Level V shall apply.

 

“Arranger” means J.P. Morgan Securities Inc.,
in its capacity as sole lead arranger.

 

“Assignee Lender” is defined in Section 10.10.1.

 

“Authorized Officer” means, relative to the
Borrower, the President, any Senior Vice President, the Treasurer or the
Secretary of the Borrower, or any other officer of the Borrower specified as
such to the Agent in writing by any of the aforementioned officers of the
Borrower.

 

“Base Rate” means, on any date and with
respect to all Base Rate Loans, a fluctuating rate of interest per annum equal
to the higher of (a) the rate of interest most recently announced

 

3

 

by JPMorgan at its Domestic
Office as its base rate for Dollar loans; and (b) the Federal Funds Rate most
recently determined by the Agent plus 1⁄2%. 
The Base Rate is not necessarily intended to be the lowest rate of
interest determined by JPMorgan in connection with extensions of credit.  Changes in the rate of interest on that
portion of any Loans maintained as Base Rate Loans will take effect
simultaneously with each change in the Base Rate.  The Agent will give notice promptly to the Borrower and the Lenders
of changes in the Base Rate.

 

“Base Rate Loan” means a Loan bearing interest
at a fluctuating rate determined by reference to the Base Rate.

 

“Borrower” is defined in the preamble, and includes its permitted
successors and assigns.

 

“Borrowing” means any extension of credit (as
opposed to any continuation or conversion thereof) made by the Lenders by way
of Loans.

 

“Borrowing Date” means a date on which a
Borrowing is made hereunder.

 

“Borrowing Request” means a loan request and
certificate duly executed by an Authorized Officer of the Borrower,
substantially in the form of Exhibit 2.5
hereto.

 

“Business Day” means (a) any day which is
neither a Saturday or Sunday nor a legal holiday on which banks are authorized
or required to be closed in New York, New York or Houston, Texas; and (b)
relative to the making, continuing, prepaying or repaying of any Eurodollar
Borrowing, any day on which dealings in Dollars are carried on in the London
and New York Eurodollar interbank market.

 

“Capitalization” means the sum, at any time
outstanding and without duplication, of (i) Debt plus (ii) Stockholders’
Equity.

 

“Capitalized Lease Liabilities” means all
monetary obligations of the Borrower or any of its Subsidiaries under any
leasing or similar arrangement which, in accordance with GAAP, would be
classified as capitalized leases, and, for purposes of this Agreement and each
other Loan Document, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP, and the stated maturity
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty.

 

“CERCLA” means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended.

 

“Change in Control” means the acquisition by
any Person, or two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of 30% or more of the outstanding
shares of voting stock of the Borrower.

 

“Code” means the Internal Revenue Code of
1986, as amended, reformed or otherwise modified from time to time.

 

4

 

“Co-Documentation
Agent” and “Co-Documentation Agents” are defined in the preamble.

 

“Commitment” means, as to any Lender, the
obligation, if any, of such Lender to make Loans pursuant to Section 2.1.1 or Section
2.1.2 of this Agreement in an aggregate principal amount at any one
time outstanding up to but not exceeding the amount, if any, set forth opposite
such Lender’s name on Schedule II, as
the same may be reduced or adjusted from time to time in accordance with this
Agreement, including Sections 2.3.

 

“Commitment Amount” means, on any date,
$300,000,000, as such amount may be reduced from time to time in accordance
with this Agreement, including Section 2.3.

 

“Commitment Termination Event” means (a) the
occurrence of any Event of Default described in clauses
(a) through (e) of Section 8.1.9; or (b) the occurrence and
continuance of any other Event of Default and either (i) the declaration of the
Loans to be due and payable pursuant to Section 8.3,
or (ii) in the absence of such declaration, the giving of notice by the Agent,
acting at the direction of the Required Lenders, to the Borrower that the
Commitments have been terminated.

 

“Continuation/Conversion Notice” means a
notice of continuation or conversion and certificate duly executed by an
Authorized Officer of the Borrower, substantially in the form of Exhibit 2.6 hereto.

 

“Controlled Group” means all members of a
controlled group of corporations and all members of a controlled group of
trades or businesses (whether or not incorporated) under common control which,
together with the Borrower, are treated as a single employer under Section
414(b) or 414(c) of the Code or Section 4001 of ERISA.

 

“Debt” means the consolidated Indebtedness of
the Borrower and its Subsidiaries.

 

“Default” means any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event
of Default.

 

“Default Margin” means two percent (2%).

 

“Disclosure Schedule” means the Disclosure
Schedule attached hereto as Schedule I,
as it may be amended, supplemented or otherwise modified from time to time by
the Borrower with the written consent of the Agent and the Required Lenders.

 

“Dollar” and the sign “$” mean lawful money of the United States.

 

“Domestic Office” means, relative to any
Lender, the office of such Lender designated as such in its Administrative
Questionnaire or designated in the Lender Assignment Agreement or such other
office of a Lender (or any successor or assign of such Lender) within the
United States as may be designated from time to time by notice from such
Lender, as the case may be, to each other Person party hereto.

 

5

 

“EBITDAX” means, for any period, the sum of
(i) the consolidated net income of the Borrower and its Subsidiaries for
such period before non-cash non-recurring items, gains or losses on
dispositions of assets and the cumulative effect of changes in accounting
principles plus (ii) to the extent
included in the determination of such income, the consolidated charges for such
period for interest, depreciation, depletion, amortization and exploration
expenses plus (or, if there is a
benefit from income taxes, minus)
(iii) to the extent included in the determination of such income, the
amount of the provision for or benefit from income taxes.

 

“EDC” means Energy Development Corporation, a
New Jersey corporation, and its permitted successors and assigns.

 

“Effective Date” means the date on which the
conditions specified in Article V are satisfied (or waived in accordance
with Section 10.1).

 

“Environmental Law”  means any federal, state, or local statute, or rule or regulation
promulgated thereunder, any judicial or administrative order or judgment to
which the Borrower or any Subsidiary is party or which are applicable to the
Borrower or any Subsidiary (whether or not by consent), and any provision or
condition of any governmental permit, license or other operating authorization,
relating to protection of the environment, persons or the public welfare from
actual or potential exposure for the effects of exposure to any actual or
potential release, discharge, spill or emission (whether past or present) of,
or regarding the manufacture, processing, production, gathering,
transportation, importation, use, treatment, storage or disposal of, any
chemical, raw material, pollutant, contaminant or toxic, corrosive, hazardous,
or non-hazardous substance or waste, including petroleum.

 

“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in effect from time
to time.  References to sections of
ERISA also refer to any successor sections.

 

“Eurodollar Borrowing” means a borrowing
hereunder consisting of the aggregate amount of the several Eurodollar Loans
made by all or some of the Lenders to the Borrower, at the same time, at the
same interest rate and for the same Interest Period.

 

“Eurodollar Loan” means a Loan bearing
interest, at all times during an Interest Period applicable to such Loan, at a
fixed rate of interest determined by reference to the Eurodollar Rate.

 

“Eurodollar Office” means, relative to any
Lender, the office of such Lender designated as such in its Administrative
Questionnaire or designated in the Lender Assignment Agreement or such other
office of a Lender as designated from time to time by notice from such Lender
to the Borrower and the Agent, whether or not outside the United States, which
shall be making or maintaining Eurodollar Loans of such Lender hereunder.

 

“Eurodollar Rate” means, relative to any
Interest Period for Eurodollar Loans, the rate appearing on Page 3750 of the
Telerate Service (or on any successor or substitute page of such Service, or
any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Agent from time

 

6

 

to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available
at such time for any reason, then the “Eurodollar Rate” with respect to such
Eurodollar Loan for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period
are offered by the principal London office of the Agent in immediately
available funds in the London interbank market at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period

 

“Event of Default” is defined in Section 8.1.

 

“Existing Credit Facility” means that certain
364-Day Credit Agreement, dated as of November 27, 2002, among the Borrower, JP
Morgan Chase Bank, as administrative agent, and the lenders and the agents
party thereto, and the other agreements or instruments executed and delivered
in connection with, or as security for the payment or performance of the
obligations thereunder, as such agreements may have been amended, supplemented
or restated from time to time.

 

“Facility” is defined in Section 2.1.

 

“Federal Funds Rate” means, for any day, the
average rate quoted to the Agent at approximately 11:00 a.m. (Central time) on
such day (or, if such day is not a Business Day, on the next preceding Business
Day) for overnight Federal Funds transactions arranged by New York Federal
Funds brokers selected by the Agent.

 

“Fee Letter” is defined in Section 3.3.2.

 

“Fiscal Quarter” means any quarter of a Fiscal
Year.

 

“Fiscal Year” means any period of twelve
consecutive calendar months ending on December 31.

 

“Five Year Credit Agreement” means that
certain Credit Agreement, dated as of November 30, 2001, among the Borrower
(formerly known as Noble Affiliates, Inc.), JPMorgan Chase Bank, as
administrative agent, and the lenders and the agents party thereto, as such
agreement may be amended, supplemented or restated from time to time.

 

“F.R.S. Board” means the Board of Governors of
the Federal Reserve System or any successor thereto.

 

“GAAP” is defined in Section 1.4.

 

“Guaranteed Liability” means any agreement,
undertaking or arrangement by which any Person guarantees, endorses or
otherwise becomes or is contingently liable upon (by direct or indirect
agreement, contingent or otherwise, to provide funds for payment, to supply
funds to, or otherwise to invest in, a debtor, or otherwise to assure a
creditor against loss) the Indebtedness of any other Person (other than by
endorsements of instruments in the course of collection), or

 

7

 

guarantees the payment of
dividends or other distributions upon the shares of any other Person.  The amount of any Person’s Guaranteed
Liability shall be the lesser of (i) the limitation on such Person’s liability
, if any, set forth in such agreement, undertaking or arrangement or (ii) the
outstanding principal amount of the Indebtedness guaranteed thereby.  Guaranteed Liabilities shall exclude any act
or agreement in connection with any financing of a project owned by any Person
that either (A) guarantees performance of the acquisition, improvement,
installation, design, engineering, construction, development, completion,
maintenance or operation of, or otherwise affects any such act in respect of,
all or a portion of the project that is financed, except during any period, and
then only to the extent, that such act or agreement is a guarantee of payment
of such financing or (B) the obligation to pay or perform under which is
contingent upon the occurrence of an event or condition which has not occurred,
other than notice, the passage of time or such financing or any part thereof
becoming due; provided, however, to the extent that any partial
payment is required to be made under any such act or agreement providing for a
contingent payment obligation as described in clause (B) above, “Guaranteed
Liability” shall be deemed to include an amount equal to four (4) times such
amount required to be paid during the Fiscal Quarter most recently ended, up to
the full amount of the Guaranteed Liability as specified in the immediately preceding
sentence.

 

“Hazardous Material” means:  (i) any
“hazardous substance”, as defined by CERCLA; (ii)
any “hazardous waste”, as defined by the Resource Conservation and Recovery
Act, as amended; (iii) any petroleum, crude oil or
any fraction thereof; (iv) any hazardous, dangerous
or toxic chemical, material, waste or substance within the meaning of any
Environmental Law; (v) any radioactive
material, including any naturally occurring radioactive material, and any
source, special or by-product material as defined in 42 U.S.C. § 2011 et. seq.,
and any amendments or reauthorizations thereof; (vi)
asbestos-containing materials in any form or condition; or
(vii) polychlorinated biphenyls in any form or condition.

 

“Hedging Obligations” means, with respect to any
Person, all liabilities of such Person under derivative contracts, including
interest rate or commodity swap agreements, interest rate or commodity cap
agreements and interest rate or commodity collar agreements, and all similar
agreements or arrangements.

 

“Herein”, “hereof”,
“hereto”, “hereunder”
and similar terms contained in this Agreement or any other Loan Document refer
to this Agreement or such other Loan Document, as the case may be, as a whole
and not to any particular Section, paragraph or provision of this Agreement or
such other Loan Document.

 

“Impermissible Qualification” means, relative
to the opinion or certification of any independent public accountant as to any
financial statement of the Borrower, any qualification or exception to such opinion
or certification (a) which is of a “going concern” or similar nature;
(b) which relates to the limited scope of examination of matters relevant
to such financial statement; or (c) which relates to the treatment or
classification of any item in such financial statement and which, as a
condition to its removal, would require an adjustment to such item the effect
of which would be to cause the Borrower to be in default of any of its
obligations under Section 7.2.4.

 

8

 

“Including” means including without limiting
the generality of any description preceding such term.

 

“Indebtedness” of any Person means, without
duplication: (a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments; (b) all obligations relative to banker’s acceptances
issued for the account of such Person; (c) all obligations of such Person as
lessee under leases which have been or should be, in accordance with GAAP,
recorded as Capitalized Lease Liabilities; (d) all obligations of such
Person to pay the deferred purchase price of property or services (except
accounts payable arising in the ordinary course of business), (e) Indebtedness
of another Person of the type described in clauses (a), (b), (c)
or (d) above secured by a Lien on property owned or being purchased by
such Person (including indebtedness arising under conditional sales or other
title retention agreements), whether or not such Indebtedness shall have been
assumed by such Person or is limited in recourse (such Indebtedness being the
lesser of (i) the value of such property on the books of such Person or (ii)
the outstanding principal amount of such Indebtedness); and (f) all Guaranteed
Liabilities of such Person in respect of any of the foregoing.  For all purposes of this Agreement, the
Indebtedness of any Person shall include the Indebtedness of any partnership or
joint venture in which such Person is a general partner or a joint venturer
except to the extent that such Indebtedness by its terms is expressly
non-recourse to such general partner or joint venturer.

 

“Indemnified Liabilities” is defined in Section 10.4.

 

“Indemnified Parties” is defined in Section 10.4.

 

“Information” is defined in Section 10.12.

 

“Interest Period” means, with respect to
Eurodollar Borrowings, the period beginning on (and including) the date on
which such Eurodollar Borrowing is made or continued as, or converted into, a
Eurodollar Borrowing pursuant to Section 2.5
or 2.6 and shall end on (but exclude)
the day which numerically corresponds to such date one, two, three or six
months thereafter (or, if such month has no numerically corresponding day, on
the last Business Day of such month), as the Borrower may select in its
relevant notice pursuant to Section 2.5,
provided, however,
that (a) the Borrower shall not be permitted to select Interest Periods to
be in effect at any one time which have expiration dates occurring on more than
five different dates; (b) Interest Periods commencing on the same date for
Loans comprising part of the same Borrowing shall be of the same duration;
(c) if such Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall end on the next following Business Day
(unless, if such Interest Period applies to Eurodollar Loans, such next
following Business Day is the first Business Day of a calendar month, in which
case such Interest Period shall end on the Business Day next preceding such numerically
corresponding day); and (d) no Interest Period may end later than the
Maturity Date.

 

“JPMorgan” is defined in the preamble, and includes its successors and
assigns.

 

“Law” means any law (including, without
limitation, any zoning law or ordinance or any Environmental Law), statute,
rule, regulation, ordinance, order, directive, code, interpretation,

 

9

 

judgment, decree, injunction,
writ, determination, award, permit, license, authorization, direction,
requirement or decision of and agreement with or by any government or
governmental department, commission, board, court, authority, agency, official
or officer, domestic or foreign.

 

“Lender Affiliate” means, (a) with respect to
any Lender, (i) an Affiliate of such Lender or (ii) any entity (whether a
corporation, partnership, trust or otherwise) that is engaged in making,
purchasing, holding or otherwise investing in bank loans and similar extensions
of credit in the ordinary course of its business and is administered or managed
by a Lender or an Affiliate of such Lender and (b) with respect to any Lender
that is a fund which invests in bank loans and similar extensions of credit,
any other fund that invests in bank loans and similar extensions of credit and
is managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.

 

“Lender Assignment Agreement” means a Lender
Assignment Agreement substantially in the form of Exhibit
10.10 hereto.

 

“Lenders” means the financial institutions
listed on the signature pages hereto and their respective successors and
assigns in accordance with Section 10.10
(including any commercial lending institution becoming a party hereto pursuant
to a Lender Assignment Agreement) or otherwise by operation of law.

 

“Lien” means any security interest, mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or otherwise), charge against or interest in property to secure
payment of a debt or the performance of an obligation.

 

“Loan” shall mean the Revolving Loans and the
Term Loans.

 

“Loan Advances” means the Loans of the same
Type and, in the case of Eurodollar Loans, having the same Interest Period made
by all Lenders on the same Business Day and pursuant to the same Borrowing
Request in accordance with Section 2.1.

 

“Loan Documents” means this Agreement, each
Borrowing Request, each Borrowing Notice, the Fee Letter, any note, together in
each case with all exhibits, schedules and attachments thereto, and all other
agreements and instruments from time to time executed and delivered by the
Borrower or any of its Subsidiaries pursuant to or in connection with any of
the foregoing.

 

“Margin Stock”
means “margin stock” within the meaning of Regulation U.

 

“Material Adverse Effect” means a material
adverse effect on (i) the business, property, financial condition or results of
operations of the Borrower and its consolidated Subsidiaries (taken as a whole)
or (ii) the ability of the Borrower to perform its payment obligations under
any of the Loan Documents.

 

“Maturity Date” shall mean the earlier of:

 

(a)                                  the date occurring 364 days after the
Term Commitment Termination Date; and

 

10

 

(c)                                  the date on which the Obligations have
become due and payable in full pursuant to the terms of Article VIII.

 

“Moody’s” means Moody’s Investors Service,
Inc. and any successor thereto that is a nationally-recognized rating agency.

 

“Obligations” means all obligations (monetary
or otherwise) of the Borrower arising under or in connection with this
Agreement and each other Loan Document.

 

“Organic Document” means, relative to the
Borrower, its certificate of incorporation, its by-laws and all shareholder
agreements, voting trusts and similar arrangements applicable to any of its
authorized shares of capital stock.

 

“Participant” is defined in Section 10.10.

 

“Payment Date” is defined in Section 3.2.3.

 

“Payment Office” means the principal office of
the Administrative Agent, presently located at JPMorgan Chase Bank, Agency
Services, One Chase Manhattan Plaza, 8th Floor, New York, NY 10081, Attention:
Muniram Appanna.

 

“PBGC” means the Pension Benefit Guaranty
Corporation and any entity succeeding to any or all of its functions under
ERISA.

 

“Pension Plan” means a “pension plan”, as such
term is defined in section 3(2) of ERISA, which is subject to Title IV of ERISA
(other than a multiemployer plan as defined in section 4001(a)(3) of ERISA),
and to which the Borrower or any corporation, trade or business that is, along
with the Borrower, a member of a Controlled Group, may have liability,
including any liability by reason of having been a substantial employer within
the meaning of section 4063 of ERISA at any time during the preceding five
years, or by reason of being deemed to be a contributing sponsor under section
4069 of ERISA.

 

“Percentage” means, relative to any Lender,
the percentage set forth in Schedule II attached
hereto or set forth in the most recent Lender Assignment Agreement executed by
such Lender, as such percentage may be adjusted from time to time pursuant to
Lender Assignment Agreements executed by such Lender and its Assignee Lenders
and delivered pursuant to Section 10.10.

 

“Person” means any natural person,
corporation, partnership, firm, association, trust, government, governmental
agency or any other entity, whether acting in an individual, fiduciary or other
capacity.

 

“Plan” means any Pension Plan or Welfare Plan.

 

“Quarterly Payment Date” means the last day of
each March, June, September, and December or, if any such day is not a Business
Day, the next succeeding Business Day.

 

“Rating Agency” means either of S&P or
Moody’s.

 

11

 

“Regulation U”
means any of Regulations T, U or X of the Board of Governors of the Federal
Reserve System of the United States of America (the “Board”) from time
to time in effect and shall include any successor or other regulations or
official interpretations of the Board or any successor Person relating to the
extension of credit for the purpose of purchasing or carrying Margin Stock and
which is applicable to member banks of the Federal Reserve System or any
successor Person.

 

“Release” means a “release”, as such term is
defined in CERCLA.

 

“Required Lenders” means Lenders in the
aggregate holding greater than 50% of the aggregate unpaid principal amount of
the outstanding Borrowings and if no Borrowings are outstanding, Lenders having
greater than 50% of the then Total Commitment.

 

“Resource Conservation and Recovery Act” means
the Resource Conservation and Recovery Act, 42 U.S.C. Section 690, et  seq.,
as in effect from time to time.

 

“Restricted Subsidiary”
means any Subsidiary that is not an Unrestricted Subsidiary.

 

“Revolving Commitment” shall mean, as to any
Lender, the obligation, if any, of such Lender to make Loans pursuant to Sections 2.1.1 of this Agreement in an
aggregate principal amount at any one time outstanding up to but not exceeding
the amount, if any, set forth opposite such Lender’s name on Schedule III,
as the same may be reduced, increased or adjusted from time to time in
accordance with this Agreement, including Sections
2.3.

 

“Revolving Commitment Termination Date” shall
mean the earliest of:

 

(a)                                  October 28, 2004;

 

(b)                                 the date on which the Commitment Amount
is terminated in full or reduced to zero pursuant to the terms of Section 2.3; and

 

(c)                                  the date on which the Revolving
Commitments are terminated in full and reduced to zero pursuant to the terms of
Article VIII.

 

“Revolving Loans” shall mean the loans
provided for in Section 2.1.1 hereof.

 

“S&P” means Standard & Poor’s Ratings
Group and any successor thereto that is a nationally-recognized rating agency.

 

“Solvent” means, with respect to any Person at
any time, a condition under which: a) the fair
saleable value of such Person’s assets is, on the date of determination,
greater than the total amount of such Person’s liabilities (including
contingent and unliquidated liabilities) at such time; b)
such Person is able to pay all of its liabilities as such liabilities mature;
and c) such Person does not have unreasonably small
capital with which to conduct its business. 
For purposes of this definition (i) the amount of a Person’s contingent
or unliquidated liabilities at any time shall be that amount which, in light of
all the facts and circumstances then existing, represents the amount which can
reasonably be expected to become an actual or matured liability; (ii) the “fair
saleable value” of an asset shall be the amount which may be realized

 

12

 

within a reasonable time either
through collection or sale of such asset at its regular market value; and (iii)
the “regular market value” of an asset shall be the amount which a capable and
diligent business person could obtain for such asset from an interested buyer
who is willing to purchase such asset under ordinary selling conditions.

 

“Stockholders’ Equity” means, as of the time
of any determination thereof is to be made, shareholders’ equity of the
Borrower and its consolidated Subsidiaries determined in accordance with GAAP plus
the absolute cumulative amount by which such stockholders’ equity shall have
been reduced by reason of non-cash write downs of oil and gas assets from time
to time after the Effective Date.

 

“Subsidiary” means
any subsidiary of the Borrower.

 

“subsidiary” means, with respect to any
Person, (a) any corporation, limited liability company or other business entity
of which more than 50% of the outstanding equity interests having ordinary
voting power to elect a majority of the board of directors (or persons
performing similar functions) of such corporation, limited liability company or
other business entity (irrespective of whether at the time equity interests of any
other class or classes of such corporation, limited liability company or other
business entity shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person, by
such Person and one or more other Subsidiaries of such Person, or by one or
more other Subsidiaries of such Person and (b) any partnership of which
such Person, such Person and one or more other Subsidiaries of such Person, or
one or more other Subsidiaries of such Person holds more than 50% of the
outstanding general partner interests.

 

“Syndication Agent” is defined in the
preamble.

 

“Taxes” is defined in Section 4.6.

 

“Term Commitment” shall mean, as to any
Lender, such Lender’s obligation to make Term Loans pursuant to Section 2.1.2 of this Agreement in an
aggregate principal amount equal to the lesser of (i) the aggregate Revolving
Loans outstanding to such Lender as of the Revolving Commitment Termination
Date or (ii) such Lender’s Revolving Commitment in effect as of the Revolving
Commitment Termination Date.

 

“Term Commitment Termination Date” shall mean
the earlier of:

 

(a)                                  the Business Day after the Revolving
Commitment Termination Date; and

 

(b)                                 the date on which the Revolving
Commitments otherwise are terminated in full and reduced to zero pursuant to
the terms of Article VIII.

 

Upon the occurrence of
any event described in clause (b), the
Term Commitments shall terminate automatically and without any further action.

 

“Term Loans” shall mean the loans provided for
in Section 2.1.2 hereof.

 

13

 

“364-Day Total
Commitment” means (i) on or prior to the Revolving Commitment Termination
Date, the then effective Total Commitment under this Agreement, or (ii) after
the Revolving Commitment Termination Date, the then outstanding principal
amount of Term Loans under this Agreement.

 

“Total Asset Value” means, at any time with
respect to any assets, the book value of such assets determined in accordance
with GAAP.

 

“Total Commitment” means the aggregate of all
the Lenders’ Commitments.

 

“Total Debt to Capitalization Ratio” means the
ratio of (a) Debt to
(b) Capitalization.

 

“Total Interest Expense” means with respect to
any period for which a determination thereof is to be made, interest expense of
the Borrower and its Subsidiaries on a consolidated basis as determined in
accordance with GAAP.

 

“Type” means, relative to any Loan, the
portion thereof, if any, being maintained as a Base Rate Loan or a Eurodollar
Loan.

 

“United States” or “U.S.”
means the United States of America, its fifty States and the District of
Columbia.

 

“Unrestricted
Subsidiary” means any Subsidiary that is designated on Schedule 6.8
as such or which the Borrower has designated in writing to the Agent to be an
Unrestricted Subsidiary pursuant to Section 7.1.8, and, in either case,
which the Borrower has not designated to be a Restricted Subsidiary pursuant to
Section 7.1.8.

 

“Utilization” means, at any time, the ratio
(expressed as a percentage) of (i) the sum of (A) the outstanding principal
amount of Loans under this Agreement plus (B) the outstanding principal amount
of “Loans” (as such term is defined in the Five Year Credit Agreement) under
the Five Year Credit Agreement to (ii) the sum of (X) 364-Day Total Commitment
plus (Y) the then effective Total Commitment under the Five Year Credit
Agreement.

 

“Welfare Plan” means a “welfare plan”, as such
term is defined in section 3(1) of ERISA.

 

SECTION 1.2                          Use of
Defined Terms.  Unless otherwise defined or the context otherwise
requires, terms for which meanings are provided in this Agreement shall have
such meanings when used in the Disclosure Schedule and in each Borrowing
Request, Continuation/Conversion Notice, notice and other communication
delivered from time to time in connection with this Agreement or any other Loan
Document.

 

SECTION 1.3                          Cross-References. 
Unless otherwise specified, references in this Agreement and in each
other Loan Document to any Article or Section are references to such Article or
Section of this Agreement or such other Loan Document, as the case may be, and,
unless otherwise specified, references in any Article, Section or definition to
any clause are references to such clause of such Article, Section or
definition.

 

14

 

SECTION 1.4                          Accounting
and Financial Determinations.  Unless
otherwise specified, all accounting terms used herein or in any other Loan
Document shall be interpreted, all accounting determinations and computations
hereunder or thereunder (including under Section 7.2.3)
shall be made, and all financial statements required to be delivered hereunder
or thereunder shall be prepared in accordance with, those generally accepted
accounting principles (“GAAP”) applied
in the preparation of the financial statements referred to in Section 6.5.

 

ARTICLE
II

THE FACILITY AND BORROWING PROCEDURES

 

SECTION 2.1                          Facility. 
The Lenders grant to the Borrower a credit facility (the “Facility”) pursuant to which, and upon the
terms and subject to the conditions herein set out and provided that no Default
or Event of Default has occurred and is continuing from time to time on any
Business Day, each Lender severally agrees to make Loans in U.S. Dollars to the
Borrower equal to such Lender’s Percentage of the aggregate amount of Loans
requested by the Borrower to be made on such day.

 

SECTION 2.1.1                 Revolving
Loans.  From time to time on or after the date
hereof and prior to the Revolving Commitment Termination Date, each Lender
shall make Revolving Loans under this Section to the Borrower in an aggregate
principal amount at any one time outstanding up to but not exceeding such
Lender’s Revolving Commitment.  Subject
to the conditions herein, any such Loan repaid prior to the Revolving
Commitment Termination Date may be reborrowed pursuant to the terms of this
Agreement

 

SECTION 2.1.2                 Term Loans. 
Subject to the terms and conditions of this Agreement, on the Revolving
Commitment Termination Date (unless such date shall occur as a result of clause (c) of the definition thereof), each
Lender will make one Term Loan to the Borrower up to but not exceeding such
Lender’s Term Commitment.  No amounts
paid or prepaid with respect to the Term Loan may be reborrowed.  Eurodollar Loans for which the Interest
Period shall not have terminated as of the Revolving Commitment Termination
Date shall be continued as Eurodollar Loans for the applicable Interest Period
and Base Rate Loans shall be continued as Base Rate Loans after the Revolving
Commitment Termination Date, in each case subject to further elections pursuant
to Section 2.6.  Any principal
repayments received on the Revolving Commitment Termination Date for Revolving
Loans not converted into Term Loans shall be applied first to Base Rate Loans
and, after Base Rate Loans have been paid in full, to Eurodollar Loans, unless
the Borrower shall have otherwise instructed the Agent in writing.  Upon a Lender making such Term Loan, its
Term Commitment shall terminate and it shall have no further Revolving
Commitment to make Revolving Loans or Term Commitment to make Term Loans.

 

SECTION 2.1.3                 Availability
of Facility.  No Lender shall be permitted or required to
make (i) any Loan if, after giving effect thereto, the aggregate
outstanding principal amount of all Loans of all Lenders would exceed the
Commitment Amount, or (ii) any Loan if, after giving effect thereto, the
aggregate amount of all Loans of such Lender would exceed the Lender’s
Percentage of the Commitment Amount.

 

SECTION 2.2                          [Intentionally Omitted]

 

15

 

SECTION 2.3                          Reduction of
Commitment Amount.  The Borrower may, from time
to time on any Business Day occurring after the Effective Date, voluntarily
reduce the amount of the Commitment Amount; provided,
however, that all such reductions shall
require at least three Business Days’ prior notice to the Agent and be
permanent, and any partial reduction of the Commitment Amount shall be in a
minimum amount of $10,000,000 and in an integral multiple of $1,000,000; and provided
further that, prior to the Revolving Commitment Termination Date, the
Borrower shall not reduce the Commitment Amount if, after giving effect to any
concurrent prepayment of the Loans in accordance with Section 3.1, the
aggregate principal amount of Loans outstanding will exceed the aggregate of
the Revolving Commitments.

 

SECTION 2.4                          Base Rate
Loans and Eurodollar Loans.  Subject to
the terms and conditions set forth in Article V,
each Loan shall be either a Eurodollar Loan or a Base Rate Loan as the Borrower
may request, it being understood that Loans made to the Borrower on any date
may be either Eurodollar Loans or Base Rate Loans or a combination
thereof.  As to any Eurodollar Loan,
each Lender may, if it so elects, fulfill its commitment to make such
Eurodollar Loan by causing its Eurodollar Office to make such Eurodollar Loan; provided, however,
that in such event the obligation of the Borrower to repay such Eurodollar Loan
nevertheless shall be to such Lender and shall be deemed to be held by such
Lender for the account of such Eurodollar Office.

 

SECTION 2.5                          Borrowing
Procedures for Loans.  The Borrower
shall give the Agent prior written or telegraphic notice pursuant to a
Borrowing Request (in substantially the form of Exhibit 2.5
hereto) of each proposed Borrowing or continuation, and as to whether such
Borrowing or continuation is to be of Revolving Loans or Term Loans and Base
Rate Loans or Eurodollar Loans, as follows:

 

SECTION 2.5.1                 Base Rate
Loans.  The Agent shall receive written or telegraphic
notice from the Borrower on or before 2:00 p.m. Central time one (1)
Business Day prior to the date of such Borrowing and amount of such Borrowing
(which shall be in a minimum amount of $5,000,000 and an integral multiple of
$1,000,000), and the Agent shall advise each Lender thereof promptly
thereafter.  Not later than 10:00 a.m.,
Central time, on the date specified in such notice for such Borrowing, each
Lender shall provide to the Agent at the Payment Office, same day or
immediately available funds covering such Lender’s Percentage of the requested
Base Rate Loan.  Upon fulfillment of the
applicable conditions set forth in Article V
with respect to such Base Rate Loan, the Agent shall make available to the
Borrower the proceeds of each Base Rate Loan (to the extent received from the
Lenders) by wire transfer of such proceeds to such account(s) as the Borrower
shall have specified in the Borrowing Request.

 

SECTION 2.5.2                 Eurodollar
Loans.  The Agent shall receive written or
telegraphic notice pursuant to a Borrowing Request from the Borrower on or
before 10:00 a.m. Central time, at least three (3) Business Days prior to the
date requested for each proposed Borrowing or continuation of a Eurodollar
Loan, of the date of such Borrowing or continuation, as the case may be, the
amount of such Borrowing or continuation, as the case may be (which shall be in
a minimum amount of $5,000,000 and an integral multiple of $1,000,000), and the
duration of the initial Eurodollar Interest Period with respect thereto, and
the Agent shall advise each Lender thereof promptly thereafter.  Not later than 10:00 a.m., Central time, on
the date specified in such notice for such Borrowing, each Lender shall provide
to the Agent at the Payment Office, same

 

16

 

day or immediately available
funds covering such Lender’s Percentage of the requested Eurodollar Loan.  Upon fulfillment of the applicable
conditions set forth in Article V
with respect to such Eurodollar Loan, the Agent shall make available to the
Borrower the proceeds of each Eurodollar Loan (to the extent received from the
Lenders) by wire transfer of such proceeds to such account(s) as the Borrower
shall have specified in the Borrowing Request.

 

SECTION 2.6                          Continuation
and Conversion Elections.  By
delivering a Continuation/Conversion Notice to the Agent on or before 10:00
a.m., Central time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than three (3) nor more than five (5) Business Days’
notice that all, or any portion in an aggregate minimum amount of $5,000,000
and an integral multiple of $1,000,000 of any Borrowings be, (i) in the case of
Base Rate Loans, converted into Eurodollar Loans, or (ii) in the case of
Eurodollar Loans, be converted into a Base Rate Loan or continued as a
Eurodollar Loan of such Type (in the absence of delivery of a
Continuation/Conversion Notice with respect to any Eurodollar Loan at least
three (3) Business Days before the last day of the then current Interest Period
with respect thereto, such Eurodollar Loan shall, on such last day,
automatically convert to a Base Rate Loan); provided,
however, that (i) each such conversion
or continuation shall be pro rated among the applicable outstanding Loans of
all Lenders, and (ii) no portion of the outstanding principal amount of any
Loans may be continued as, or be converted into, Eurodollar Loans when any
Default has occurred and is continuing.

 

SECTION 2.7                          Funding. 
Each Lender may, if it so elects, fulfill its obligation to make,
continue or convert Eurodollar Loans hereunder by causing one of its foreign
branches or Affiliates (or an international banking facility created by such
Lender) to make or maintain such Eurodollar Loan; provided,
however, that such Eurodollar Loan
shall nonetheless be deemed to have been made and to be held by such Lender,
and the obligation of the Borrower to repay such Eurodollar Loan shall
nevertheless be to such Lender for the account of such foreign branch,
Affiliate or international banking facility. 
In addition, the Borrower hereby consents and agrees that, for purposes
of any determination to be made for purposes of Sections
4.1, 4.2, 4.3 or 4.4,
it shall be conclusively assumed that each Lender elected to fund all
Eurodollar Loans by purchasing, as the case may be, Dollar deposits in its
Eurodollar Office’s interbank eurodollar market.

 

SECTION 2.8                          Repayment of
Loans; Evidence of Debt.

 

(a)                                  The Borrower hereby unconditionally
promises to pay, unless otherwise provided in this Agreement, (i) to the Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan on the Revolving Commitment Termination Date, and (ii) to
the Agent for the account of each Lender the then unpaid principal amount of
each Term Loan on the Maturity Date.

 

(b)                                 Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.

 

17

 

(c)                                  The Agent shall maintain accounts in
which it shall record (i) the amount of each Loan made hereunder and the
Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Agent
hereunder for the account of the Lenders and each Lender’s share thereof.

 

(d)                                 The entries made in the accounts
maintained pursuant to paragraph (b) or (c) of this Section shall be prima  facie
evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or
the Agent to maintain such accounts or any error therein shall not in any
manner affect the obligation of the Borrower to repay the Loans in accordance
with the terms of this Agreement.

 

(e)                                  Any Lender may request that Loans made by
it be evidenced by a promissory note, in substantially the form attached as Exhibit
2.8 hereto.  In such event, the
Borrower shall prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) and in a form approved by the Agent.  Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.10.1)
be represented by one or more promissory notes in such form payable to the
order of the payee named therein (or, if such promissory note is a registered
note, to such payee and its registered assigns).

 

ARTICLE III

REPAYMENTS, PREPAYMENTS, INTEREST
AND FEES

 

SECTION 3.1                          Repayments and
Prepayments.  The Borrower shall repay in full (i) the
unpaid principal amount of each Revolving Loan upon the Revolving Commitment
Termination Date unless any such Loans are continued as Term Loans as provided
in Section 2.1.2, and (ii) the unpaid principal amount of each Term
Loan on the Maturity Date.  Prior
thereto, the Borrower

 

(a)                                  may, from time to time on any Business
Day, make a voluntary prepayment, in whole or in part, of the outstanding
principal amount of any Loans; provided,
however, that (i) any
such prepayment shall be applied to the Lenders among Loans having the same
Type and, if applicable, having the same Interest Period;
(ii) all such voluntary prepayments shall require at least three
Business Days’ prior written notice to the Agent; and (iii) all
such voluntary partial prepayments shall be in an minimum amount of $10,000,000
and an integral multiple of $1,000,000; and

 

(b)                                 shall, immediately upon any acceleration
of the Maturity Date pursuant to Section 8.2
or Section 8.3, repay all Loans
unless, pursuant to Section 8.3, only a
portion of all Loans is so accelerated.

 

Each prepayment of Loans
shall be applied, to the extent of such prepayment, in the inverse order of
maturity.  Each prepayment of any Loans
made pursuant to this Section shall be without premium or penalty, except as
may be required by Section 4.4.  No voluntary prepayment of principal of any
Loans shall cause a reduction in the Commitment Amount (except with respect to
the repayment or prepayment of a Term Loan).

 

18

 

SECTION 3.2                          Interest
Provisions.  Interest on the outstanding principal amount
of Loans shall accrue and be payable in accordance with this Section 3.2.

 

SECTION 3.2.1                 Rates. 
Pursuant to an appropriately delivered Borrowing Request or
Continuation/Conversion Notice, the Borrower may elect that Loans comprising a
Borrowing accrue interest at a rate per annum: (a)
on that portion maintained from time to time as a Base Rate Loan, equal to the
Base Rate from time to time in effect; and (b) on
that portion maintained as a Eurodollar Loan, during each Interest Period
applicable thereto, equal to the sum of the Eurodollar Rate for such Interest
Period plus the Applicable Margin.  All
Eurodollar Borrowings shall bear interest from and including the first day of
the applicable Interest Period to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such
Eurodollar Borrowing.

 

SECTION 3.2.2                 Post-Maturity
Rates.  After the date any principal amount of any
Loan is due and payable (whether on the Maturity Date, upon acceleration or
otherwise), or after any other monetary Obligation of the Borrower shall have
become due and payable, the Borrower shall pay, but only to the extent
permitted by law, interest (after as well as before judgment) on such amounts
at a rate per annum equal to the Base Rate plus the Default Margin.

 

SECTION 3.2.3                 Payment
Dates.  Interest accrued on each Borrowing shall be
payable, without duplication on the following dates (each a “Payment Date”): (a) on
the Maturity Date; (b) on the date of any
payment or prepayment, in whole or in part, of principal outstanding on such
Loan on the amount of such principal prepaid or repaid; (c) with
respect to Base Rate Loans, on each Quarterly Payment Date occurring after the
Effective Date; (d) with respect to Eurodollar
Borrowings, on the last day of each applicable Interest Period (and, if such
Interest Period shall exceed three months, every three months from the first
day of such Interest Period); (e) with respect
to any portion of Base Rate Loans converted into Eurodollar Loans on a day when
interest would not otherwise have been payable pursuant to clause (c), on the date of such conversion;
and (f) on that portion of any Borrowings the
applicable Maturity Date of which is accelerated pursuant to Section 8.2 or Section
8.3, immediately upon such acceleration.

 

SECTION 3.3                          Fees. 
The Borrower agrees to pay the fees set forth in this Section 3.3. 
All such fees shall be non-refundable.

 

SECTION 3.3.1                 Facility Fee. 
The Borrower agrees to pay to the Agent for the account of each Lender a
facility fee in an amount equal to the product of the Applicable Facility Fee
Rate times such Lender’s Percentage of Revolving Commitments times the
Commitment Amount.  Accrued facility
fees shall be payable in arrears on each Quarterly Payment Date and on the
Maturity Date.

 

SECTION 3.3.2                 Fees. 
The Borrower agrees to pay to the Agent for its own account and for the
account of each Lender, respectively, all fees (including any fees pursuant to Section 2.2.8) pursuant to that certain
fee letter agreement, dated October 1, 2003, between the Borrower and the
Agent, as amended from time to time (the “Fee
Letter”).

 

SECTION 3.3.3                 Payment Office. 
The Borrower shall make all payments to the Agent at the Payment Office.

 

19

 

ARTICLE IV

CERTAIN
EURODOLLAR AND OTHER PROVISIONS

 

SECTION 4.1                          Eurodollar
Lending Unlawful.  If any Lender shall determine
(which determination shall, upon notice thereof to the Borrower and the
Lenders, be conclusive and binding on the Borrower) that the introduction of or
any change in or in the interpretation of any law makes it unlawful, or any
central bank or other governmental authority asserts that it is unlawful, for
such Lender to make, continue or maintain any Borrowing as, or to convert any
Borrowing into, a Eurodollar Borrowing, the obligations of such Lender to make,
continue, maintain or convert any such Borrowings shall, upon such
determination, forthwith be suspended until such Lender shall notify the Agent
that the circumstances causing such suspension no longer exist, and all
Eurodollar Borrowings shall automatically convert into Base Rate Loans at the
end of the then current Interest Periods with respect thereto or sooner, if
required by such law or assertion; provided,
however, that the obligation of such
Lender to make, continue, maintain or convert any such Eurodollar Borrowings
shall remain unaffected if such Lender can designate a different Eurodollar
Office for the making, continuance, maintenance or conversion of Eurodollar
Borrowings and such designation will not, in the sole discretion of such
Lender, be otherwise disadvantageous to such Lender.

 

SECTION 4.2                          Deposits
Unavailable or Eurodollar Interest Rate Unascertainable. 
If the Agent shall have determined that, by reason of circumstances
affecting the Agent’s relevant market, adequate means do not exist for
ascertaining the interest rate applicable hereunder to Eurodollar Borrowings,
then, upon notice from the Agent to the Borrower and the Lenders, the
obligations of all Lenders under Section 2.5.2
and Section 2.6 to make or continue any
Borrowings as, or to convert any Borrowings into, Eurodollar Borrowings shall
forthwith be suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist.

 

SECTION 4.3                          Increased
Eurodollar Borrowing Costs, etc.  The Borrower
agrees to reimburse each Lender for any increase in the cost to such Lender of,
or any reduction in the amount of any sum receivable by such Lender in respect
of, making, continuing or maintaining (or of its obligation to make, continue
or maintain) any Borrowings as, or of converting (or of its obligation to
convert) any Borrowings into, Eurodollar Borrowings.  Such Lender shall promptly notify the Agent and the Borrower in
writing of the occurrence of any such event, such notice to state, in
reasonable detail, the reasons therefor and the additional amount required
fully to compensate such Lender for such increased cost or reduced amount; provided, however,
that such Lender shall designate a different Eurodollar Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole discretion of such Lender, be otherwise
disadvantageous to such Lender.  Such
additional amounts shall be payable by the Borrower directly to such Lender
within fifteen days of its receipt of such notice, and such notice shall be
rebuttable presumptive evidence of the amount payable by the Borrower.

 

SECTION 4.4                          Funding
Losses.  In the event any Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Borrowing as,
or to convert any portion of the principal amount of any Borrowing into, a
Eurodollar Borrowing) as a result of (a) any
conversion or repayment or

 

20

 

prepayment of the principal
amount of any Eurodollar Borrowings on a date other than the scheduled last day
of the Interest Period applicable thereto, whether pursuant to Section 3.1 or otherwise,
(b) any Borrowings not being made as Eurodollar Borrowings in
accordance with the Borrowing Request, as the case may be, therefor, (c) any Borrowings not being continued as, or
converted into, Eurodollar Borrowings in accordance with the
Continuation/Conversion Notice, or (d) the assignment of any Eurodollar
Borrowing other than on the last day of the Interest Period applicable thereto
as a result of a request by the Borrower pursuant to Section 4.10,
therefor, then, upon the written notice of such Lender to the Borrower (with a
copy to the Agent), the Borrower shall, within fifteen days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such loss or
expense.  Such written notice (which
shall include calculations in reasonable detail) shall be rebuttable
presumptive evidence of the amount payable by the Borrower.

 

SECTION 4.5                          Increased
Capital Costs.  If any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or phase-in of, any
law or regulation, directive, guideline, decision or request (whether or not
having the force of law) of any court, central bank, regulator or other
governmental authority affects or would affect the amount of capital required
or expected to be maintained by any Lender or any Person controlling such
Lender, and such Lender determines (in its sole discretion) that the rate of
return on its or such controlling Person’s capital as a consequence of its
Commitments or the Borrowings made by such Lender is reduced to a level below
that which such Lender or such controlling Person could have achieved but for
the occurrence of any such circumstance, then, in any such case upon notice
from time to time by such Lender to the Borrower, the Borrower shall pay
directly to such Lender, within fifteen days, additional amounts sufficient to
compensate such Lender or such controlling Person for such reduction in rate of
return; provided, however, that such Lender shall designate a
different Domestic or Eurodollar Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the sole
discretion of such Lender, be otherwise disadvantageous to such Lender.  A statement of such Lender as to any such
additional amount or amounts (including calculations thereof in reasonable
detail) shall be rebuttable presumptive evidence of the amount payable by the
Borrower.  In determining such amount,
such Lender may use any reasonable method of averaging and attribution that it
(in its sole discretion) shall deem applicable.

 

SECTION 4.6                          Taxes. 
All payments by the Borrower of principal of, and interest on, the
Borrowings and all other amounts payable hereunder shall be made free and clear
of and without deduction for any present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or other charges of
any nature whatsoever imposed by any taxing authority, but excluding franchise
taxes and taxes imposed on or measured by any Lender’s net income or receipts
(such non-excluded items being called “Taxes”).  In the event that any withholding or
deduction from any payment to be made by the Borrower hereunder is required in
respect of any Taxes pursuant to any applicable law, rule or regulation, then
the Borrower will, within fifteen days (a) pay
directly to the relevant authority the full amount required to be so withheld
or deducted; (b) promptly forward to the Agent
an official receipt or other documentation satisfactory to the Agent evidencing
such payment to such authority; and (c) pay to
the Agent for the account of the Lenders such additional amount or amounts as
is necessary to ensure that the net amount actually received by each Lender
will equal the full amount such Lender would have received had no such
withholding or deduction been required.

 

21

 

If any Taxes are directly
asserted against the Agent or any Lender with respect to any payment received
by the Agent or such Lender hereunder, the Agent or such Lender may pay such
Taxes and the Borrower will promptly pay such additional amounts (including any
penalties, interest or expenses) as is necessary in order that the net amount
received by such person after the payment of such Taxes (including any Taxes on
such additional amount) shall equal the amount such person would have received
had not such Taxes been asserted; provided that the Borrower will not be
obligated to pay such additional amounts to the Agent or such Lender to the
extent that such additional amounts shall have been incurred as a consequence
of the Agent’s or such Lender’s gross negligence or willful misconduct, as the
case may be.

 

If the Borrower fails to
pay any Taxes when due to the appropriate taxing authority or fails to remit to
the Agent, for the account of the respective Lenders, the required receipts or
other required documentary evidence, the Borrower shall indemnify the Lenders
for any incremental Taxes, interest or penalties that may become payable by any
Lender as a result of any such failure. 
For purposes of this Section, a distribution hereunder by the Agent or
any Lender to or for the account of any Lender shall be deemed a payment by the
Borrower.

 

Each Lender that is
organized under the laws of a jurisdiction other than the United States shall,
prior to the due date of any payments of the Loans under this Agreement,
execute and deliver to the Borrower and the Agent, on or about the first scheduled
Payment Date in each Fiscal Year, one or more (as the Borrower or the Agent may
reasonably request) United States Internal Revenue Service Form W-8 BEN or
Form W-8 ECI or such other forms or documents (or successor forms or
documents), appropriately completed, as may be applicable to establish the
extent, if any, to which a payment to such Lender is exempt from withholding or
deduction of Taxes, and shall (but only so long as such Lender remains lawfully
able to do so) deliver to the Borrower and the Agent additional copies of such
forms on or before the date that such forms expire or become obsolete or after
the occurrence of an event requiring a change in the most recent form so
delivered by it and such amendments thereto as may be reasonably requested by
the Borrower or the Agent, in each case certifying that such Lender is entitled
to benefits under an income tax treaty to which the United States is a party
which reduces the rate of withholding tax on payments of interest or fees or
certifying that the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United States.  If the form provided by a Lender at the time
such Lender first becomes a party to this Agreement indicates a United States
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from the definition of “Taxes”.  For any period with respect to which a Lender has failed to
provide the Borrower and the Agent with the forms required pursuant to this
paragraph, if any (other than if such failure is due to a change in treaty, law
or regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to indemnification under
this Section with respect to Taxes imposed by the United States which Taxes
would not have been imposed but for such failure to provide such form;
provided, however, that should a Lender, which is otherwise exempt from or
subject to a reduced rate of withholding tax, become subject to Taxes because
of its failure to deliver a form required hereunder, the Borrower shall take
such steps as the Lender shall reasonably request to assist the Lender to
recover such Taxes.

 

If the Borrower is
required to pay additional amounts to or for the account of any Lender pursuant
to this Section, then such Lender will change the jurisdiction of its
applicable

 

22

 

Eurodollar or Domestic Office
so as to eliminate or reduce any such additional payment which may thereafter
accrue if such change, in the sole discretion of such Lender, is not otherwise
disadvantageous to such Lender.  No
Lender shall be entitled to receive any greater payment under this Section as a
result of the designation by such Lender of a different applicable Eurodollar
or Domestic Office after the date hereof, unless such designation is made with
the Borrower’s prior written consent or by reason of the provisions of Sections 4.1, 4.3
or 4.5 requiring such Lender to
designate a different applicable Eurodollar or Domestic Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.

 

SECTION 4.7                          Special Fees
in Respect of Reserve Requirements.  With respect
to Eurodollar Borrowings, the Borrower agrees to pay to each Lender on
appropriate Payment Dates, as additional interest, such amounts as will
compensate such Lender for any cost to such Lender, from time to time, of any
reserve, special deposit, special assessment or similar capital requirements
against assets of, deposits with or for the account of, or credit extended by,
such Lender which are imposed on, or deemed applicable by, such Lender, from
time to time, under or pursuant to (i) any Law, treaty, regulation or
directive now or hereafter in effect (including, without limitation,
Regulation D of the Board of Governors of the Federal Reserve System but
excluding any reserve requirement included in the definition of Eurodollar Rate
in Section 1.1), (ii) any
interpretation or application thereof by any governmental authority, agency or
instrumentality charged with the administration thereof or by any court,
central bank or other fiscal, monetary or other authority having jurisdiction
over the Eurodollar Borrowings or the office of such Lender where its
Eurodollar Borrowings are lodged, or (iii) any requirement imposed or
requested by any court, governmental authority, agency or instrumentality or
central bank, fiscal, monetary or other authority, whether or not having the
force of law.  A written notice as to
the amount of any such cost or any change therein (including calculations, in
reasonable detail, showing how such Lender computed such cost or change) shall
be promptly furnished by such Lender to the Borrower and shall be rebuttable
presumptive evidence of such cost or change. 
The Borrower will not be responsible for paying any amounts pursuant to
this Section accruing prior to 180 days prior to the receipt by the Borrower of
the written notice referred to in the preceding sentence.  Within fifteen (15) days after such
certificate is furnished to the Borrower, the Borrower will pay directly to
such Lender such additional amount or amounts as will compensate such Lender
for such cost or change.

 

SECTION 4.8                          Payments,
Computations, etc.  Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement or any other
Loan Document shall be made by the Borrower to the Agent for the pro  rata
account of the Lenders entitled to receive such payment.  All such payments required to be made to the
Agent shall be made, without setoff, deduction or counterclaim, not later than
11:00 a.m., Central time, on the date due, in same day or immediately available
funds, to such account as the Agent shall specify from time to time by notice
to the Borrower.  Funds received after
that time shall be deemed to have been received by the Agent on the next
succeeding Business Day.  The Agent
shall promptly remit in same day funds to each Lender its share, if any, of
such payments received by the Agent for the account of such Lender.  All interest and fees shall be computed on
the basis of the actual number of days (including the first day but excluding
the last day) occurring during the period for which such interest or fee is
payable over a year comprised of 360 days (or, in the case of interest on a
Base Rate Loan, 365 days or, if appropriate, 366 days).  Whenever any payment to

 

23

 

be made shall otherwise be due
on a day which is not a Business Day, such payment shall (except as otherwise
required by clause (c) of the
definition of the term “Interest Period”
with respect to Eurodollar Loans) be made on the next succeeding Business Day
and such extension of time shall be included in computing interest and fees, if
any, in connection with such payment.

 

SECTION 4.9                          Sharing of
Payments.  If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Sections 4.3, 4.4
and 4.5) in excess of its pro  rata
share of payments then or therewith obtained by all Lenders, such Lender shall
purchase from the other Lenders such participations in Loans made by them as
shall be necessary to cause such purchasing Lender to share the excess payment
or other recovery ratably with each of them; provided,
however, that if all or any portion of
the excess payment or other recovery is thereafter recovered from such
purchasing Lender, the purchase shall be rescinded and each Lender which has
sold a participation to the purchasing Lender shall repay to the purchasing
Lender the purchase price to the ratable extent of such recovery together with
an amount equal to such selling Lender’s ratable share (according to the
proportion of (a) the amount of such selling
Lender’s required repayment to the purchasing Lender to (b) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered.  The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section may, to the fullest extent
permitted by law, exercise all its rights of payment with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. 
If under any applicable bankruptcy, insolvency or other similar law, any
Lender receives a secured claim in lieu of a set off to which this Section
applies, such Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Lenders entitled under this Section to share in the benefits of any recovery on
such secured claim.

 

SECTION 4.10                    Replacement
of Lender on Account of Increased Costs, Eurodollar Lending Unlawful, Reserve
Requirements, Taxes, Certain Dissents, etc. 
If any Lender shall claim the inability to make or maintain Eurodollar
Borrowings pursuant to Section 4.1
above, if any Lender is owed increased costs under Section
4.5 above, if any payment to any Lender by the Borrower is subject
to any withholding tax pursuant to Section 4.6
above, or if any Lender is owed any cost or expense pursuant to Section 4.7 above, the Borrower shall have
the right, if no Event of Default or Default then exists, to replace such
Lender with another bank or financial institution provided
that (i) if it is not a Lender or an Affiliate thereof, such bank or financial
institution shall be reasonably acceptable to the Agent and (ii) such bank
or financial institution shall unconditionally purchase, in accordance with Section 10.10 hereof, all of such Lender’s
rights and obligations under this Agreement and the other Loan Documents and
the appropriate pro rata share of such Lender’s Loans and Commitments, without
recourse or expense to, or warranty by, such Lender being replaced for a
purchase price equal to the aggregate outstanding principal amount of the Loans
payable to such Lender, plus any
accrued but unpaid interest on such Loans, plus accrued but unpaid fees in
respect of such Lender’s Borrowings and Percentage of the Commitments hereunder
to the date of such purchase on a date therein specified.  The Borrower shall be obligated to pay,
simultaneously with such purchase and sale, the increased costs, amounts,
expenses and taxes under Sections 4.1, 4.5, 4.6,
and 4.7 above, any amounts payable
under Section 4.4 and all other costs,
fees and expenses payable to such Lender

 

24

 

hereunder and under the Loan
Documents, to the date of such purchase as well as all other Obligations due
and payable to or for the benefit of such Lender; provided,
that if such bank or financial institution fails to purchase such rights and
obligations, the Borrower shall continue to be obligated to pay the increased
costs, amounts, expenses and taxes under Sections
4.1, 4.5, 4.6, and 4.7
above to such Lender.

 

SECTION 4.11                    Maximum
Interest.  It is the intention of the parties hereto to
conform strictly to applicable usury laws and, anything herein to the contrary
notwithstanding, the obligations of the Borrower to the Agent and each Lender
under this Agreement shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt thereof would be
contrary to provisions of law applicable to the Agent or such Lender limiting
rates of interest which may be charged or collected by the Agent or such
Lender.  Accordingly, if the
transactions contemplated hereby would be usurious under applicable law
(including the Federal and state laws of the United States of America, or of
any other jurisdiction whose laws may be mandatorily applicable) with respect
to the Agent or a Lender then, in that event, notwithstanding anything to the
contrary in this Agreement, it is agreed as follows: (a) the
provisions of this Section shall govern and control; (b) the
aggregate of all consideration which constitutes interest under applicable law
that is contracted for, charged or received under this Agreement, or under any
of the other aforesaid agreements or otherwise in connection with this
Agreement by the Agent or such Lender shall under no circumstances exceed the
maximum amount of interest allowed by applicable law (such maximum lawful
interest rate, if any, with respect to such Lender herein called the “Highest Lawful Rate”), and any excess shall
be credited to the Borrower by the Agent or such Lender (or, if such
consideration shall have been paid in full, such excess refunded to the
Borrower); (c) all sums paid, or agreed to be
paid, to the Agent or such Lender for the use, forbearance and detention of the
Indebtedness of the Borrower to the Agent or such Lender hereunder shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of such Indebtedness until payment in full so
that the actual rate of interest is uniform throughout the full term thereof;
and (d) if at any time the interest provided
pursuant to Section 4.1 together
with any other fees payable pursuant to this Agreement and the other Loan
Documents and deemed interest under applicable law, exceeds that amount which
would have accrued at the Highest Lawful Rate, the amount of interest and any
such fees to accrue to the Agent or such Lender pursuant to this Agreement
shall be limited, notwithstanding anything to the contrary in this Agreement to
that amount which would have accrued at the Highest Lawful Rate, but any
subsequent reductions, as applicable, shall not reduce the interest to accrue
to the Agent or such Lender pursuant to this Agreement below the Highest Lawful
Rate until the total amount of interest accrued pursuant to this Agreement and
such fees deemed to be interest equals the amount of interest which would have
accrued to the Agent or such Lender if a varying rate per annum equal to the
interest provided pursuant to Section 3.2
had at all times been in effect, plus
the amount of fees which would have been received but for the effect of this
Section.  For purposes of Section
303.201 of the Texas Finance Code, as amended, to the extent, if any,
applicable to the Agent or a Lender, the Borrower agrees that the Highest
Lawful Rate shall be the “indicated (weekly) rate ceiling” as defined in said
Section, provided that the Agent or such Lender may also rely, to the extent
permitted by applicable laws, on alternative maximum rates of interest under
other laws applicable to the Agent or such Lender if greater.  Chapter 346 of the Texas Finance Code (which
regulates certain revolving credit loan accounts and revolving tri-party
accounts

 

25

 

(formerly Tex. Rev. Civ. Stat.
Ann. Art. 5069, Ch. 15)) shall not apply to this Agreement or the other Loan
Documents.

 

ARTICLE V

CONDITIONS

 

SECTION 5.1                          Effective
Date.  The obligations of the Lenders to fund the
initial Borrowing shall be subject to the prior satisfaction, or waiver in
writing by the Agent (with the consent of Required Lenders) of each of the
conditions precedent set forth in this Section 5.1.

 

SECTION 5.1.1                 Resolutions,
etc.  The Agent shall have received from the
Borrower a certificate, dated the Effective Date, of its Secretary or Assistant
Secretary as to (a) resolutions of its Board of
Directors then in full force and effect authorizing the execution, delivery and
performance of this Agreement and each other Loan Document to be executed by
it; and (b) the incumbency and signatures of
its Authorized Officers, upon which certificate each Lender may conclusively
rely until it shall have received a further certificate of the Secretary of the
Borrower canceling or amending such prior certificate.

 

SECTION 5.1.2                 [Intentionally omitted].

 

SECTION 5.1.3                 Opinion of
Counsel.  The Agent shall have received a favorable
opinion, dated the Effective Date and addressed to the Agent and all Lenders,
from Thompson & Knight L.L.P., counsel to the Borrower, substantially in
the form of Exhibit 5.1.3 hereto.

 

SECTION 5.1.4                 Fee Letters,
Closing Fees, Expenses, etc.  The Agent
shall have received the Fee Letter duly executed by the Borrower.  The Agent shall also have received for its
own account, or for the account of the Arranger and each Lender, as the case
may be, all fees, costs and expenses due and payable pursuant to Sections 3.3 and 10.3,
if then invoiced.

 

SECTION 5.1.5                 Material
Adverse Change.  There shall have been no
material adverse change in the consolidated business, condition (financial or
otherwise), operations, performance or properties of any of the Borrower and
its consolidated Subsidiaries taken as a whole since June 30, 2003, except as
disclosed in Item 5.1.5 (“Material Adverse Change”) of the Disclosure
Schedule.

 

SECTION 5.1.6                 Existing
Credit Facility.  The Agent shall have received
satisfactory proof of the Borrower’s termination of the Existing Credit
Facility and any obligations of the Borrower in connection therewith on the
Effective Date.

 

SECTION 5.1.7                 Other
Documents.  Such other documents as the Agent or any
Lender may have reasonably requested.

 

SECTION 5.2                          All
Borrowings.  The obligation of each Lender to fund any
Borrowing (including the initial Borrowing) shall be subject to the
satisfaction of each of the conditions precedent set forth in this Section.

 

SECTION 5.2.1                 Compliance
with Warranties, No Default, etc.  Both before
and after giving effect to any Borrowing (but, if any Default of the nature
referred to in Section 8.1.5

 

26

 

shall have occurred with
respect to any other Indebtedness, without giving effect to the application,
directly or indirectly, of the proceeds thereof) the following statements shall
be true and correct (a) the representations and
warranties set forth in Article VI
shall be true and correct with the same effect as if then made (unless stated
to relate solely to an earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date); and (b) no Default or Event of Default shall have then
occurred and be continuing.

 

SECTION 5.2.2                 Borrowing
Request.  The Agent shall have received a Borrowing
Request for such Borrowing.  Each of the
delivery of a Borrowing Request and the acceptance by the Borrower of the
proceeds of such Borrowing shall constitute a representation and warranty by
the Borrower that on the date of such Borrowing (both immediately before and
after giving effect to such Borrowing and the application of the proceeds
thereof) the statements made in Section 5.2.1
are true and correct.

 

SECTION 5.2.3                 Satisfactory
Legal Form.  All documents executed or submitted pursuant
hereto by or on behalf of the Borrower or any of its Subsidiaries shall be
satisfactory in form and substance to the Agent and its counsel; the Agent and
its counsel shall have received all information, approvals, opinions, documents
or instruments as the Agent or its counsel may reasonably request.

 

ARTICLE VI

REPRESENTATIONS
AND WARRANTIES

 

In order to induce
the Lenders and the Agent to enter into this Agreement and to make Loans
hereunder, the Borrower represents and warrants unto the Agent and each Lender
as set forth in this Article VI.

 

SECTION 6.1                          Organization,
etc.  The Borrower and each of its Restricted
Subsidiaries is a corporation, partnership, limited partnership or limited
liability company validly organized and existing and in good standing under the
laws of the State of its incorporation, is duly qualified to do business and is
in good standing as a foreign entity in each jurisdiction where the nature of
its business requires such qualification, and has full power and authority and
holds all requisite governmental licenses, permits and other approvals to enter
into and perform its Obligations under this Agreement and each other Loan
Document to which it is a party and to conduct its business substantially as
currently conducted by it (except where the failure to be so qualified to do
business or be in good standing or to hold any such licenses, permits and other
approvals will not have a Material Adverse Effect).

 

SECTION 6.2                          Due
Authorization, Non-Contravention, etc.  The
execution, delivery and performance by the Borrower of this Agreement and each
other Loan Document executed or to be executed by it, and the Borrower’s
participation in any transaction contemplated herein are within the Borrower’s
powers, have been duly authorized by all necessary corporate action, and do not (a) contravene the Borrower’s Organic Documents; (b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on or affecting the
Borrower; or (c) result in, or require the
creation or imposition of, any Lien on any of the Borrower’s properties.

 

27

 

SECTION 6.3                          Government
Approval, Regulation, etc.  No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or other Person is required for
the due execution, delivery or performance by the Borrower of this Agreement or
any other Loan Document to which it is a party, or for the Borrower’s
participation in any transaction contemplated herein, except as have been
obtained.  Neither the Borrower nor any of
its Subsidiaries is an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, or a “holding company”, or a
“subsidiary company” of a “holding company”, or an “affiliate” of a “holding
company” or of a “subsidiary company” of a “holding company”, within the meaning
of the Public Utility Holding Company Act of 1935, as amended.

 

SECTION 6.4                          Validity,
etc.  This Agreement constitutes, and each other
Loan Document executed by the Borrower will, on the due execution and delivery
thereof, constitute, the legal, valid and binding obligations of the Borrower
enforceable in accordance with their respective terms except as
(i) enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditor’s rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.

 

SECTION 6.5                          Financial
Information.  The balance sheets of the Borrower and each
of its consolidated Subsidiaries as at June 30, 2003 and the related statements
of earnings and cash flow, copies of which have been furnished to the Agent and
each Lender, have been prepared in accordance with GAAP consistently applied,
and present fairly the consolidated financial condition of the corporations covered
thereby as at the dates thereof and the results of their operations for the
periods then ended except as disclosed in Item 6.5
(“Financial Information”) of the Disclosure Schedule.

 

SECTION 6.6                          No Material
Adverse Change.  As of the Effective Date, since
the date of the financial statements described in Section
6.5, there has been no material adverse change in the financial
condition, operations, assets, business or properties of the Borrower and its
Restricted Subsidiaries (on a consolidated basis), except as disclosed in Item 5.1.5 (“Material Adverse Change”) of the
Disclosure Schedule.

 

SECTION 6.7                          Litigation,
Labor Controversies, etc.  As of the
Effective Date, there is no pending or, to the knowledge of the Borrower,
threatened litigation, action, proceeding, or labor controversy affecting the
Borrower or any of its Restricted Subsidiaries, or any of their respective
properties, businesses, assets or revenues, which could reasonably be expected
to have a Material Adverse Effect or which purports to affect the legality,
validity or enforceability of, and the rights and remedies of the Agent and the
Lenders under, this Agreement or any other Loan Document, except as disclosed
in Item 6.7 (“Litigation”) of the
Disclosure Schedule.

 

SECTION 6.8                          Subsidiaries. 
Schedule 6.8 sets forth the name, the identity or corporate
structure and the ownership interest of each direct or indirect Subsidiary as
of the Effective Date.  Schedule 6.8
also sets forth the name of each Restricted Subsidiary and Unrestricted Subsidiary
as of the Effective Date. As of the Effective Date, the Borrower does not have
any Subsidiaries other than the Subsidiaries identified in Schedule 6.8.

 

28

 

SECTION 6.9                          Taxes. 
The Borrower, each of its Restricted Subsidiaries and each of its
Unrestricted Subsidiaries which is a member of the Borrower’s consolidated U.S.
federal income tax group has filed all federal tax returns and reports and all
material state tax returns and reports required by law to have been filed by it
and has paid all taxes and governmental charges thereby shown to be owing,
except any such taxes or charges which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books except such returns and taxes
for jurisdictions other than the United States with respect to which the
failure to file and pay such taxes would not have a Material Adverse Effect.

 

SECTION 6.10                    Pension and
Welfare Plans.  During the twelve-consecutive-month period
prior to the date of the execution and delivery of this Agreement and prior to
the date of any Borrowing hereunder, no steps have been taken to terminate any
Pension Plan, and no contribution failure has occurred with respect to any
Pension Plan sufficient to give rise to a Lien securing an amount in excess of
$1,000,000 under section 302(f) of ERISA. 
No condition exists or event or transaction has occurred with respect to
any Pension Plan which might result in the incurrence by the Borrower or any
member of the Controlled Group of any liability, fine or penalty which could
reasonably be expected to result in a Material Adverse Effect.  Except as disclosed in Item 6.10 (“Employee Benefit Plans”) of the
Disclosure Schedule, neither the Borrower nor any member of the Controlled
Group has any contingent liability with respect to any post-retirement benefit
under a Welfare Plan, other than liability for continuation coverage described
in Part 6 of Title I of ERISA.

 

SECTION 6.11                    Environmental
Warranties and Compliance.  The
liabilities and costs of the Borrower and its consolidated Restricted
Subsidiaries related to compliance with applicable Environmental Laws (as in
effect on the date on which this representation is made or deemed made) could
not reasonably be expected to have a Material Adverse Effect.

 

SECTION 6.12                    Regulation U. 
None of the Borrower and its Subsidiaries are engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Loans will be used for a purpose which violates, or would be
inconsistent with, Regulation U.

 

SECTION 6.13                    Accuracy of
Information.  No certificate, statement or other
information delivered herewith or hereto by or on behalf of the Borrower in
writing to the Agent or any Lender in connection with the negotiation of this
Agreement or in connection with any transaction contemplated hereby contains
any untrue statement of a fact or omits to state any fact known to the Borrower
or its Subsidiaries necessary to make the statements contained herein or
therein not misleading as of the date made or deemed made, except to the extent
that any untrue statement or omission could not reasonably be expected to have
a Material Adverse Effect.

 

SECTION 6.14                    Use of Proceeds. 
The proceeds of each Borrowing shall be used for the general corporate
purposes of the Borrower and its Subsidiaries. 
No proceeds of any Borrowing shall be used to make any investment in any
Person if the board of directors or other governing body of such Person has
announced its opposition to such investment.

 

29

 

ARTICLE VII

COVENANTS

 

SECTION 7.1                          Affirmative
Covenants.  The Borrower agrees with the Agent and each
Lender that, until all Commitments have terminated and all Obligations have
been paid and performed in full, the Borrower will perform the obligations set
forth in this Section 7.1.

 

SECTION 7.1.1                 Financial
Information, Reports, Notices, etc.  The Borrower
will furnish, or will cause to be furnished, to each Lender and the Agent
copies of the following financial statements, reports, notices and information:

 

(a)                                  as soon as available and in any event
within 45 days after the end of each of the first three Fiscal Quarters of each
Fiscal Year of the Borrower, consolidated balance sheets of the Borrower and
its Subsidiaries as of the end of such Fiscal Quarter and consolidated
statements of earnings and cash flow of the Borrower and its Subsidiaries for such
Fiscal Quarter and for the period commencing at the end of the previous Fiscal
Year and ending with the end of such Fiscal Quarter, certified by the chief
financial Authorized Officer of the Borrower as having been prepared in
accordance with GAAP;

 

(b)                                 as soon as available and in any event
within 90 days after the end of each Fiscal Year of the Borrower, a copy of the
annual audit report for such Fiscal Year for the Borrower and its Subsidiaries,
including therein consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such Fiscal Year and consolidated statements of
earnings and cash flow of the Borrower and its Subsidiaries for such Fiscal
Year, in each case certified (without any Impermissible Qualification) as
having been prepared in accordance with GAAP in a manner acceptable to the
Agent and the Required Lenders by independent public accountants of recognized
national standing;

 

(c)                                  as soon as available and in any at the
time of each delivery of financial reports under subsections (a) and (b) of
this Section 7.1.1, a certificate, executed by the chief financial
Authorized Officer of the Borrower, showing (in reasonable detail and with
appropriate calculations and computations in all respects satisfactory to the
Agent) compliance with the financial covenants set forth in Section 7.2.3;

 

(d)                                 promptly, and in any event within three
Business Days after an Authorized Officer of the Borrower or any of its
Subsidiaries becomes aware of the existence of the occurrence of each Default,
a statement of the chief executive officer or the chief financial Authorized
Officer of the Borrower setting forth details of such Default and the action
which the Borrower has taken and proposes to take with respect thereto;

 

(e)                                  promptly,
and in any event within three Business Days after an Authorized Officer of the
Borrower or any of its Subsidiaries becomes aware of (x) the occurrence of any
adverse development with respect to any litigation, action, proceeding, or
labor controversy described in Section 6.7
which would have or reasonably be expected to have a Material Adverse Effect,
or (y) the commencement of any material labor controversy, litigation,
action, proceeding of the type described in Section 6.7
which would have or reasonably be expected to have a

 

30

Material Adverse Effect, notice
thereof and copies of all documentation relating thereto requested by the Agent
or any Lender;

 

(f)                                    promptly after the sending or filing
thereof, copies of all reports and registration statements which the Borrower
or any of its Subsidiaries files with the Securities and Exchange Commission or
any national securities exchange;

 

(g)                                 immediately upon becoming aware of the
institution of any steps by the Borrower or any other Person to terminate any
Pension Plan, or the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under section 302(f)
of ERISA, or the taking of any action with respect to a Pension Plan which
could result in the requirement that the Borrower furnish a bond or other
security to the PBGC or such Pension Plan, or the occurrence of any event with
respect to any Pension Plan which could result in the incurrence by the
Borrower of any liability, fine or penalty, or any increase in the contingent
liability of the Borrower with respect to any post-retirement Welfare Plan
benefit which would have or could reasonably be expected to have a Material
Adverse Effect, notice thereof and copies of all documentation relating
thereto; and

 

(h)                                 such other information respecting the
condition or operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as any Lender through the Agent may from time to time reasonably
request.

 

SECTION 7.1.2     Compliance
with Laws, etc.  The Borrower
will, and will cause each of its Subsidiaries to, comply with all Laws, such
compliance to include, without limitation: (a) the
maintenance and preservation of its corporate existence and qualification as a
foreign corporation, (b) the payment, before
the same become delinquent, of all taxes, assessments and governmental charges
imposed upon it or upon its property except to the extent being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books and (c) all Environmental Laws; except; in each case,
where the failure to so comply would not have or would not reasonably be
expected to have a Material Adverse Effect.

 

SECTION 7.1.3     Maintenance
of Properties.  The Borrower will,
and will cause each of its Restricted Subsidiaries to, maintain, preserve,
protect and keep its properties in good repair, working order and condition
(ordinary wear and tear excepted), and make necessary and proper repairs,
renewals and replacements so that its business carried on in connection
therewith may be properly conducted at all times unless the Borrower determines
in good faith that the continued maintenance of any of its properties is no
longer economically desirable or unless failure to so preserve, maintain,
protect or keep its properties would not reasonably be expected to have a
Material Adverse Effect.

 

SECTION 7.1.4            Insurance. 
The Borrower will, and will cause each of its Restricted Subsidiaries
to, maintain or cause to be maintained with responsible insurance companies
insurance with respect to its properties and business against such casualties
and contingencies and of such types and in such amounts as is customary in the
case of similar businesses in similar locations.

 

31

 

SECTION 7.1.5     Books and
Records.  The Borrower will,
and will cause each of its Subsidiaries to, keep books and records which
accurately reflect, in accordance with GAAP, all of its business affairs and
transactions and permit the Agent or its representatives, at reasonable times
and intervals and upon reasonable prior notice to the Borrower, to visit all of
its offices, to discuss its financial matters with its officers and employees
and to examine any of its books or other corporate records; provided, however,
that prior notice to the Borrower shall not be required if an Event of Default
has occurred or is continuing.

 

SECTION 7.1.6     Conduct of
Business.  The Borrower will,
and will cause each Restricted Subsidiary to, cause all material properties and
businesses to be regularly conducted, operated, maintained and developed in a
good and workmanlike manner, as would a prudent operator and in accordance with
all applicable federal, state and local laws, rules and regulations, except for
any failure to so operate, maintain and develop that could not reasonably be
expected to have a Material Adverse Effect.

 

SECTION 7.1.7            Subsidiaries;
Unrestricted Subsidiaries.  The
Borrower shall:

 

(a)                                  if any additional Subsidiary is formed or
acquired after the Effective Date, notify the Agent thereof and whether such
Subsidiary is an Unrestricted Subsidiary or a Restricted Subsidiary.

 

(b)                                 cause the management, business and
affairs of the Borrower and its Restricted Subsidiaries to be conducted in such
a manner (including, without limitation, by keeping separate books of account,
furnishing separate financial statements of Unrestricted Subsidiaries to
creditors and potential creditors thereof and by not permitting Properties of
the Borrower and its respective Subsidiaries to be commingled) so that each
Unrestricted Subsidiary that is a corporation will be treated as a corporate
entity separate and distinct from the Borrower and the Restricted Subsidiaries;

 

(c)                                  except as permitted by Section 7.2.5,
will not, and will not permit any of the Restricted Subsidiaries to incur any
Guaranteed Liabilities in respect of any Indebtedness of any of the
Unrestricted Subsidiaries; and

 

(d)                                 will not permit any Unrestricted Subsidiary
to hold any equity or other ownership interest in, or any Indebtedness of, any
Restricted Subsidiary.

 

SECTION 7.1.8            Designation and Conversion of
Restricted and Unrestricted Subsidiaries.

 

(a)                                  Unless designated as an Unrestricted
Subsidiary on Schedule 6.8 as of the date of this Agreement or
thereafter in writing to the Agent, any Person that becomes a Subsidiary of the
Borrower or any of its Restricted Subsidiaries shall be classified as a
Restricted Subsidiary.

 

(b)                                 The Borrower may designate any Subsidiary
(including a newly formed or newly acquired Subsidiary) as an Unrestricted
Subsidiary if (i) the representations and warranties of the Borrower and its
Restricted Subsidiaries contained in each of the Loan Documents are true and
correct on and as of such date as if made on and as of the date of such
designation (or, if stated to have been made expressly as of an earlier date,
were true and correct as of such date), and

 

32

 

(ii) after giving effect
to such designation, no Default or Event of Default would exist; provided,
however, that the Borrower may not designate EDC as an Unrestricted
Subsidiary.  Except as provided in this
Section, no Restricted Subsidiary may be redesignated as an Unrestricted
Subsidiary.

 

(c)                                  The Borrower may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary if after giving effect to
such designation, (i) the representations and warranties of the Borrower and
its Restricted Subsidiaries contained in each of the Loan Documents are true
and correct on and as of such date as if made on and as of the date of such
redesignation (or, if stated to have been made expressly as of an earlier date,
were true and correct as of such date), and (ii) after giving effect to such
designation, no Default or Event of Default would exist.

 

SECTION 7.2     Negative Covenants.  The Borrower agrees with the Agent and each Lender that, until
all Commitments have terminated and all Obligations have been paid and
performed in full, the Borrower will perform the obligations set forth in this Section 7.2.

 

SECTION 7.2.1     Business
Activities.  The Borrower
will not, and will not permit any of its Restricted Subsidiaries to, engage in
any business activity if, as a result thereof, the Borrower and its Restricted
Subsidiaries taken as a whole would no longer be principally engaged in the
business of oil, gas and energy exploration, development, production,
processing and marketing and such activities as may be incidental or related
thereto.

 

SECTION 7.2.2     Liens.  The Borrower will not, and will not permit
any of its Restricted Subsidiaries to, create, incur, assume or suffer to exist
any Lien upon any of its property, revenues or assets, whether now owned or
hereafter acquired, except:

 

(a)                                  Liens securing payment of the
Obligations, granted pursuant to any Loan Document;

 

(b)                                 Liens for taxes, assessments or other
governmental charges or levies not at the time delinquent or thereafter payable
without penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books;

 

(c)                                  Liens of carriers, warehousemen,
mechanics, materialmen and landlords incurred in the ordinary course of
business for sums not overdue or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;

 

(d)                                 Liens incurred in the ordinary course of
business in connection with workmen’s compensation, unemployment insurance or
other forms of governmental insurance or benefits, or to secure performance of
tenders, statutory obligations, leases and contracts (other than for borrowed
money) entered into in the ordinary course of business or to secure obligations
on surety or appeal bonds;

 

(e)                                  judgment Liens in existence less than 30
days after the entry thereof or with respect to which execution has been stayed
or the payment of which is covered in full (subject to a customary deductible)
by insurance maintained with responsible insurance companies;

 

33

 

(f)                                    Liens on cash or cash-equivalents
securing Hedging Obligations of the Borrower or any of its Restricted
Subsidiaries not in excess in the aggregate of $50,000,000 for all such cash
and cash equivalents;

 

(g)                                 Liens in favor of the United States of
America or any state thereof or any department, agency, instrumentality or
political subdivision of any such jurisdiction to secure partial, progress,
advance or other payments pursuant to any contract or statute;

 

(h)                                 Liens required by any contract or statute
in order to permit the Borrower or a Restricted Subsidiary to perform any
contract or subcontract made by it with or at the request of the United States
of America, any state or any department, agency or instrumentality or political
subdivision of either;

 

(i)                                     Liens which exist prior to the time of
acquisition upon any assets acquired by the Borrower or any Restricted
Subsidiary (including Liens on assets of any Person at the time of the
acquisition of the capital stock or assets of such Person or a merger with or
consolidation with such Person by the Borrower or a Restricted Subsidiary), provided
that (i) the Lien shall attach solely to the assets so acquired (or of the
Person so acquired, merged or consolidated), and (ii) in the case of Liens
securing Indebtedness the aggregate principal amount of all Indebtedness of
Restricted Subsidiaries secured by such Liens shall be permitted by the
limitations set forth in Section 7.2.5;

 

(j)                                     Liens securing Indebtedness owing by any
Restricted Subsidiary to the Borrower;

 

(k)                                  Liens under operating agreements,
unitization agreements, pooling orders, and similar arrangements;

 

(l)                                     Liens set forth on Schedule 7.2
which are existing on the Effective Date;

 

(m)                               Liens on debt of or equity interests in a
Person that is not a Restricted Subsidiary;

 

(n)                                 Any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole or in part, of any
Lien referred to in the foregoing clauses of this Section or of any
Indebtedness secured thereby; provided
that in the case of Liens securing Indebtedness, the principal amount of
Indebtedness secured thereby shall not exceed the principal amount of
Indebtedness so secured at the time of such extension, renewal or replacement
and that such extension, renewal or replacement Lien shall be limited to all or
part of substantially the same property or revenue subject of the Lien
extended, renewed or replaced (plus improvements on such property); and

 

(o)                                 additional Liens upon assets of the
Borrower and its Restricted Subsidiaries created after the date hereof, provided
that (i) the aggregate Indebtedness secured thereby and incurred on or after
the date hereof shall not exceed two and one-half percent (2 1⁄2%) of
Stockholders’ Equity in the aggregate at any one time outstanding and (ii) that
such Liens do not encumber or attach to any equity interest in a Restricted
Subsidiary.

 

34

 

SECTION 7.2.3            Financial
Covenants.  The Borrower will
not:

 

(a)                                  EBITDAX to
Total Interest Expense.  Permit the
ratio of EBITDAX to Total Interest Expense for any consecutive period of four
fiscal quarters ending on the last day of a fiscal quarter to be less than
4.0:1.0.

 

(b)                                 Total Debt
to Capitalization.  Permit the Total Debt to
Capitalization Ratio, expressed as a percentage, to exceed 60% at any time.

 

(c)                                  Minimum Total Asset Value. 
Permit the Total Asset Value of its Restricted Subsidiaries to be less
than $800,000,000 at any time.

 

SECTION 7.2.4     Restricted
Payments, etc.  On and at all
times after the Effective Date, the Borrower will not declare, pay or make any
dividend or distribution (in cash, property or obligations) on any shares of
any class of capital stock (now or hereafter outstanding) of the Borrower or on
any warrants, options or other rights with respect to any shares of any class
of capital stock (now or hereafter outstanding) of the Borrower (other than
dividends or distributions payable in its common stock or warrants to purchase
its common stock or splitups or reclassifications of its stock into additional
or other shares of its common stock) or apply, or permit any of its Restricted
Subsidiaries to apply, any of its funds, property or assets to the purchase,
redemption, sinking fund or other retirement of, or agree or permit any of its
Restricted Subsidiaries to purchase or redeem, any shares of any class of
capital stock (now or hereafter outstanding) of the Borrower, or warrants,
options or other rights with respect to any shares of any class of capital
stock (now or hereafter outstanding) of the Borrower, if, after giving effect
thereto, a Default or an Event of Default shall have occurred and be continuing
or been caused thereby.

 

SECTION 7.2.5     Indebtedness.  The Borrower will not permit any of its
Restricted Subsidiaries to contract, create, incur or assume any Indebtedness,
except:

 

(a)                                  Indebtedness of a Restricted Subsidiary
owed to the Borrower or an other Restricted Subsidiary;

 

(b)                                 Indebtedness of a Restricted Subsidiary
which exists prior to the time of the acquisition of such Subsidiary by the
Borrower or any Restricted Subsidiary (including Indebtedness at the time of
the acquisition of the capital stock or assets of such Person or a merger with
or consolidation with such Person by the Borrower or a Restricted Subsidiary)
and any extensions, renewals or replacements of such Indebtedness, provided
that the aggregate principal amount of such Indebtedness and any extensions,
renewals or replacements thereof shall not exceed the principal amount of such
Indebtedness at the time such Person becomes a Subsidiary; and

 

(c)                                  other Indebtedness in an aggregate amount
not to exceed an amount equal to five percent (5%) of Stockholders’ Equity.

 

SECTION 7.2.6     Consolidation,
Merger, etc.  The Borrower
will not, and will not permit any of its Restricted Subsidiaries to, liquidate
or dissolve, consolidate with, or merge into or with, any other corporation, or
purchase or otherwise acquire all or substantially all of the

 

35

 

assets of any Person (or of any
division thereof) except (a) any such
Restricted Subsidiary may liquidate or dissolve voluntarily into, and may merge
with and into, the Borrower or any other Restricted Subsidiary, and the assets
or stock of any Restricted Subsidiary may be purchased or otherwise acquired by
the Borrower or any other Restricted Subsidiary; and (b) so
long as no Default or Event of Default has occurred and is continuing or would
occur after giving effect thereto, the Borrower or any of its Restricted
Subsidiaries may purchase all or substantially all of the assets of any Person,
or acquire such Person by merger (as long as the Borrower or such Restricted
Subsidiary is the surviving entity).

 

SECTION 7.2.7     Negative
Pledges, Restrictive Agreements, etc.  The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, enter into any agreement (excluding this Agreement, any other
Loan Document and any agreement governing any Indebtedness not prohibited under
this Agreement) prohibiting the creation or assumption of any Lien upon its
material properties, revenues or assets, whether now owned or hereafter
acquired, or the ability of the Borrower to amend or otherwise modify this
Agreement or any other Loan Document. 
The foregoing shall not prohibit agreements entered into or acquired in
the ordinary course of business regarding specific properties or assets which
restrict or place conditions the transfer of or the creation of a Lien on such
properties or assets or the revenues derived therefrom, but which do not affect
other unrelated properties, assets or revenues. The Borrower will not and will not
permit any of its Restricted Subsidiaries to enter into any agreement
prohibiting the ability of any Restricted Subsidiary to make any payments,
directly or indirectly, to the Borrower by way of dividends, advances,
repayments of loans or advances, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on investments, or
any other agreement or arrangement which restricts the ability of any such
Restricted Subsidiary to make any payment, directly or indirectly, to the
Borrower.

 

ARTICLE VIII

EVENTS OF DEFAULT

 

SECTION 8.1     Listing of Events of Default.  Each of the following events or occurrences
described in this Section 8.1 shall
constitute an “Event of Default”.

 

SECTION 8.1.1     Non-Payment
of Obligations.  The Borrower
shall default in the payment or prepayment when due of any principal of any
Loan, or the Borrower shall default (and such default shall continue unremedied
for a period of five days) in the payment when due of any interest on any Loan,
of any fee hereunder or of any other Obligation.

 

SECTION 8.1.2            Breach of
Warranty.  Any representation
or warranty of the Borrower made or deemed to be made hereunder or in any other
Loan Document executed by it or any certificates delivered pursuant to Article V is or shall be incorrect in any
material respect when made or deemed made.

 

SECTION 8.1.3     Non-Performance
of Certain Covenants and Obligations.  The Borrower shall default in the due performance and observance
of any of its obligations under Section 7.2.2,
7.2.3, 7.2.6
or 7.2.7; provided
that the imposition of any non-consensual Lien that is not permitted to exist
pursuant to Section 7.2.2 shall not be
deemed to constitute an Event of Default hereunder until thirty (30) days after
the date of such imposition.

 

36

 

SECTION 8.1.4     Non-Performance
of Other Covenants and Obligations. 
The Borrower shall default in the due performance and observance of any
other provision contained herein (not constituting an Event of Default under
the preceding provisions of this Section 8.1)
or any other Loan Document executed by it, and such default shall continue
unremedied for a period of 30 days after notice thereof shall have been given
to the Borrower by the Agent.

 

SECTION 8.1.5     Default
on Other Indebtedness.  A
default shall occur in the payment when due (subject to any applicable grace
period), whether by acceleration or otherwise, of any Indebtedness (other than
Indebtedness described in Section 8.1.1)
of the Borrower or any of its Restricted Subsidiaries having a principal
amount, individually or in the aggregate, in excess of $35,000,000, or a
default shall occur in the performance or observance of any obligation or
condition with respect to such Indebtedness if the effect of such default is to
accelerate the maturity of any such Indebtedness or such default shall continue
unremedied for any applicable period of time sufficient to permit the holder or
holders of such Indebtedness, or any trustee or agent for such holders, to
cause such Indebtedness to become due and payable prior to its expressed
maturity.

 

SECTION 8.1.6            Judgments. 
Any judgment or order for the payment of money in excess of $35,000,000
shall be rendered against the Borrower or any of its Restricted Subsidiaries if
such excess is not fully covered by valid and collectible insurance in respect
thereof, the payment of which is not being disputed or contested by the insurer
or the insurers, and either (i) proper or valid enforcement or levying
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) such judgment or order shall continue unsatisfied and
unstayed for a period of thirty (30) consecutive days.

 

SECTION 8.1.7            Pension Plans.  Any of the following events shall occur with respect to any
Pension Plan (a) the institution of any steps
by the Borrower, any member of its Controlled Group or any other Person to
terminate a Pension Plan if, as a result of such termination, the Borrower or
any such member could be required to make a contribution to such Pension Plan
in excess of $35,000,000; or (b) a contribution
failure occurs with respect to any Pension Plan sufficient to give rise to a
Lien under section 302(f) of ERISA to the extent such action could reasonably
be expected to have a Material Adverse Effect.

 

SECTION 8.1.8            Change in Control.  Any Change in Control shall occur.

 

SECTION 8.1.9     Bankruptcy,
Insolvency, etc.  The
Borrower or any of its Restricted Subsidiaries shall  (a) become insolvent or
generally fail to pay, or admit in writing its inability or unwillingness to
pay, debts as they become due; (b) apply for,
consent to, or acquiesce in, the appointment of a trustee, receiver,
sequestrator or other custodian for the Borrower or any of its Restricted
Subsidiaries or any substantial portion of the property of any thereof, or make
a general assignment for the benefit of creditors; (c) in
the absence of such application, consent or acquiescence, permit or suffer to
exist the appointment of a trustee, receiver, sequestrator or other custodian
for the Borrower or any of its Restricted Subsidiaries or for a substantial
part of the property of any thereof, and such trustee, receiver, sequestrator
or other custodian shall not be discharged within 60 days, provided that the
Borrower, each Restricted Subsidiary hereby expressly authorizes the Agent and
each Lender to appear in any court conducting any relevant proceeding during
such 60-day period to preserve, protect and defend their rights under the Loan

 

37

 

Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect of the Borrower or any of its Restricted Subsidiaries,
and, if any such case or proceeding is not commenced by the Borrower or such
Subsidiary, such case or proceeding shall be consented to or acquiesced in by
the Borrower or such Restricted Subsidiary or shall result in the entry of an
order for relief or shall remain for 60 days undismissed, provided that the
Borrower, each Restricted Subsidiary hereby expressly authorizes the Agent and
each Lender to appear in any court conducting any such case or proceeding
during such 60-day period to preserve, protect and defend their rights under
the Loan Documents; or (e) take any corporate
action authorizing, or in furtherance of, any of the foregoing.

 

SECTION 8.2                                                  Action if
Bankruptcy.  If any Event of Default described in Section 8.1.9 shall occur with respect
to the Borrower or any Restricted Subsidiary, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding principal
amount of all outstanding Borrowings and all other Obligations shall
automatically be and become immediately due and payable, without notice or
demand.

 

SECTION 8.3                                                  Action if
Other Event of Default.  If any Event
of Default (other than any Event of Default described in Section 8.1.9 with respect to the Borrower or
any Restricted Subsidiary) shall occur for any reason, whether voluntary or
involuntary, and be continuing, the Agent, upon the direction of the Required
Lenders, shall by notice to the Borrower declare all or any portion of the
outstanding principal amount of the Borrowings and other Obligations to be due
and payable and/or the Commitments (if not theretofore terminated) to be
terminated, whereupon the full unpaid amount of such Loans and other
Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment, as
the case may be, and/or the Commitments shall terminate.

 

ARTICLE IX

THE AGENTS

 

SECTION 9.1                                                  Actions. 
Each Lender hereby appoints (i) JPMorgan as the Agent under this
Agreement and each other Loan Document, (ii) Wachovia Bank, National
Association, as
Syndication Agent under this Agreement and each other Loan Document,
(iii) Société Générale, Deutsche Bank AG New York Branch and The Royal
Bank of Scotland plc, as Co-Documentation Agents under this Agreement and each
other Loan Document, and (iv) the entities identified as “Senior Managing
Agents” on the signature pages to this Agreement as senior managing agents
under this Agreement and each other Loan Document.  Each Lender authorizes the Agent to act on behalf of such Lender
under this Agreement and each other Loan Document and, in the absence of other
written instructions from the Required Lenders received from time to time by
the Agent (with respect to which the Agent agrees that it will comply, except
as otherwise provided in this Section or as otherwise advised by counsel), to
exercise such powers hereunder and thereunder as are specifically delegated to
or required of the Agent by the terms hereof and thereof, together with such
powers as may be reasonably incidental thereto.  Each Lender acknowledges that none of the Syndication Agent, the
Co-Documentation Agents or the Senor Managing Agents have any duties or
obligations under this Agreement or any other Loan Document in connection with
their capacity as either the Syndication Agent, a Co-Documentation Agent or a
Senior Managing Agent, respectively.

 

38

 

 Each Lender hereby indemnifies (which indemnity shall survive any
termination of this Agreement) each of the Agents, pro
rata according to such Lender’s
Percentage, WHETHER
OR NOT RELATED TO ANY SINGULAR, JOINT OR CONCURRENT NEGLIGENCE OF THE AGENTS,
from and against any and all liabilities, obligations, losses, damages, claims,
costs or expenses of any kind or nature whatsoever which may at any time be
imposed on, incurred by, or asserted against, any Agent in any way relating to
or arising out of this Agreement and any other Loan Document, including
reasonable attorneys’ fees, and as to which such Agent is not reimbursed by the
Borrower; provided, however, that no Lender shall be liable for
the payment of any portion of such liabilities, obligations, losses, damages,
claims, costs or expenses which are determined by a court of competent
jurisdiction in a final proceeding to have resulted solely from such Agent’s
gross negligence or willful misconduct. 
None of the Agents shall be required to take any action hereunder or
under any other Loan Document, or to prosecute or defend any suit in respect of
this Agreement or any other Loan Document, unless it is indemnified hereunder
to its satisfaction.  If any indemnity
in favor of any Agent shall be or become inadequate, in such Agent’s
determination, as the case may be, such Agent may call for additional
indemnification from the Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given.  Notwithstanding any provision to the contrary contained elsewhere
in this Agreement or in any other Loan Document, none of the Agents shall have
any duties or responsibilities, except as expressly set forth herein, nor shall
any of the Agents have or be deemed to have any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any of the Agents.

 

SECTION 9.2                                                  Funding Reliance,
etc.  Unless the Agent shall have been notified by
telephone, confirmed in writing, by any Lender by 5:00 p.m., Central time, on
the day prior to a Borrowing (except with respect to a Borrowing comprised of
Base Rate Loans, in which case notice shall be given no later than 12:00 noon,
Central time, on the date of the proposed Borrowing) that such Lender will not
make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Agent may assume that such Lender
has made such amount available to the Agent and, in reliance upon such
assumption, make available to the Borrower a corresponding amount.  If and to the extent that such Lender shall
not have made such amount available to the Agent, such Lender and the Borrower
severally agree to repay the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date the Agent
made such amount available to the Borrower to the date such amount is repaid to
the Agent, at the Federal Funds Rate.

 

SECTION 9.3                                                  Exculpation. 
None of the Agents and their respective directors, officers, employees
or agents shall be liable to any Lender for any action taken or omitted to be
taken by it under this Agreement or any other Loan Document, or in connection
herewith or therewith, except for its own willful misconduct or gross
negligence, nor responsible for any recitals or warranties herein or therein,
nor for the effectiveness, enforceability, validity or due execution of this Agreement
or any other Loan Document, nor to make any inquiry respecting the performance
by the Borrower of its obligations hereunder or under any other Loan
Document.  Any such inquiry which may be
made by any Agent shall not obligate it to make any further inquiry or to take
any action.  Each of the Agents shall be
entitled to rely upon advice of

 

39

 

counsel concerning legal
matters and upon any notice, consent, certificate, statement or writing which
such Agent believes to be genuine and to have been presented by a proper
Person.

 

SECTION 9.4                                                  Successor. 
Any of the Agents may resign as such at any time upon at least 30 days’
prior notice to the Borrower and all Lenders. 
If the Agent at any time shall resign, the Required Lenders may appoint
another Lender as the successor Agent which shall thereupon become the Agent
hereunder.  If no successor Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent’s giving notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the U.S. (or any State thereof) or a
U.S. branch or agency of a commercial banking institution, and having a
combined capital and surplus of at least $500,000,000.  Upon the acceptance of any appointment as
the Agent hereunder by a successor Agent, such successor Agent shall be
entitled to receive from the retiring Agent such documents of transfer and
assignment as such successor Agent may reasonably request, and shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations under this Agreement. 
After a retiring Agent’s resignation hereunder as a Agent, the
provisions of this Article IX shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Agent under this Agreement, and Section 10.4
(and, with respect to the Agent, Section 10.3)
shall continue to inure to its benefit.

 

SECTION 9.5                                                  Loans by the
Agents.  Each of the Agents shall have the same
rights and powers with respect to the Loans made by it or any of its Affiliates
and may exercise the same as if it were not a Agent.  Each of the Agents and its Affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with the Borrower
or any Subsidiary or Affiliate of the Borrower as if it were not a Agent
hereunder.

 

SECTION 9.6                                                  Credit
Decisions.  Each Lender acknowledges that it has made
its own credit decision to extend its Commitments hereunder (i) independently
of each of the Agents and each other Lender, and (ii) based on such Lender’s
review of the financial information of the Borrower, this Agreement, the other
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such Lender
has deemed appropriate.  Each Lender
also acknowledges that it will continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under this Agreement or any other Loan Document
(i) independently of each of the Agents and each other Lender, and (ii)
based on such other documents, information and investigations as it shall deem
appropriate at any time.

 

SECTION 9.7                                                  Copies, etc. 
The Agent shall give prompt notice to each Lender of each notice or
request required or permitted to be given to the Agent by the Borrower pursuant
to the terms of this Agreement (unless concurrently delivered to the Lenders by
the Borrower).  The Agent will
distribute to each Lender each document or instrument received for its account
and copies of all other communications received by the Agent from the Borrower
for distribution to the Lenders by the Agent in accordance with the terms of
this Agreement.

 

40

 

ARTICLE X

MISCELLANEOUS PROVISIONS

 

SECTION 10.1                                            Waivers,
Amendments, etc.  The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Borrower and the Required Lenders; provided, however,
that no such amendment, modification or waiver which would: (a) modify any requirement hereunder that any
particular action be taken by all the Lenders or by the Required Lenders shall
be effective unless consented to by each Lender; (b) modify
this Section 10.1, change the
definition of “Required Lenders”,
reduce any fees described in Article III
or extend the Maturity Date, shall be made without the consent of each Lender; (c) extend the due date for, or reduce the amount
of, any scheduled repayment or prepayment of principal of or interest on any
Loan (or reduce the principal amount of or rate of interest on any Loan) shall
be made without the consent of the Lender which made such Loan; or (d) affect
adversely the interests, rights or obligations of any Agent as Agent shall be
made without the consent of such Agent; provided, further, that
no such amendment, modification or waiver which would either increase any
Commitment, Commitment Amount or the Percentage of any Lender, or modify the
rights, duties or obligations of any Agent, shall be effective without the
consent of such Lender or such Agent, as applicable.  No failure or delay on the part of the Agent or any Lender in
exercising any power or right under this Agreement or any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power or right preclude any other or further exercise thereof or the
exercise of any other power or right. 
No notice to or demand on the Borrower in any case shall entitle it to
any notice or demand in similar or other circumstances.  No waiver or approval by the Agent or any
Lender under this Agreement or any other Loan Document shall, except as may be
otherwise stated in such waiver or approval, be applicable to subsequent
transactions.  No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.

 

SECTION 10.2                                            Notices.

 

(a)                                  Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

 

	
   

  	
  (i)

  	
  if to the
  Borrower, to:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Noble Energy, Inc.

  
	
   

  	
   

  	
  350 Glenborough, Suite 100

  
	
   

  	
   

  	
  Houston, TX  77067

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  James L. McElvany

  
	
   

  	
   

  	
  Telephone No.:

  	
  (281) 872-3100

  
	
   

  	
   

  	
  Facsimile No.:

  	
  (281) 872-3111

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  if to the Agent,
  to:

  

 

41

 

	
   

  	
   

  	
  Agency Services

  	
   

  
	
   

  	
   

  	
  JPMorgan Chase Bank

  
	
   

  	
   

  	
  One Chase Manhattan Plaza,
  8th Floor

  
	
   

  	
   

  	
  New York, NY 10081

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Muniram Appanna

  
	
   

  	
   

  	
  Telephone No.:

  	
  (212) 552-7943

  
	
   

  	
   

  	
  Facsimile No.:

  	
  (212) 552-3295

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JPMorgan Chase Bank

  
	
   

  	
   

  	
  Global Oil & Gas Group

  
	
   

  	
   

  	
  600 Travis, 20th Floor

  
	
   

  	
   

  	
  Houston, Texas 77002

  
	
   

  	
   

  	
  Attention:

  	
  Peter Licalzi

  
	
   

  	
   

  	
  Telephone:

  	
  713-216-8869

  
	
   

  	
   

  	
  Facsimile:

  	
  713-216-4117

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  And in connection with
  business-related matters, with a copy to:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JPMorgan Chase Bank

  
	
   

  	
   

  	
  Global Oil & Gas Group

  
	
   

  	
   

  	
  600 Travis, 20th Floor

  
	
   

  	
   

  	
  Houston, Texas 77002

  
	
   

  	
   

  	
  Attention:

  	
  Robert C. Mertensotto

  
	
   

  	
   

  	
  Telephone:

  	
  713-216-4147

  
	
   

  	
   

  	
  Facsimile:

  	
  713-216-8870

  

 

(iii)                               if to the Syndication Agent, any
Co-Documentation Agent or any other Lender, to it at its address (or telecopy
number) provided to the Agent and the Borrower or as set forth in its
Administrative Questionnaire.

 

(b)                                 Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communications
pursuant to procedures approved by the Administrative Agent; provided
that the foregoing shall not apply to notices pursuant to Article II unless
otherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices
or communications.

 

(c)                                  Any party hereto may change its address
or telecopy number for notices and other communications hereunder by notice to
the other parties hereto.  All notices
and other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given on the date of
receipt.

 

SECTION 10.3                                            Payment of
Costs, Expenses and Taxes.  The Borrower
agrees to pay on demand all reasonable out-of-pocket costs and expenses of (i)
the Agent (including, without limitation, the reasonable fees and out-of-pocket
expenses of Mayer, Brown, Rowe & Maw LLP) in connection with the
preparation, negotiation, execution, delivery, syndication and

 

42

 

administration of this
Agreement and of each other Loan Document, including schedules and exhibits,
and any amendments, waivers, consents, supplements or other modification to
this Agreement or any other Loan Document and (ii) the Agent and the
Lenders in connection with the enforcement by the Lenders or the Agent of, or
the protection of rights under, this Agreement and each other Loan Document.  The Agent, the other Agents, the Arranger
and each Lender agree to the extent feasible, and to the extent a conflict of
interest does not exist in the reasonable opinion of the Agent, the other
Agents, the Arranger or any Lender, to use one law firm in each jurisdiction in
connection with the foregoing, to the extent they seek reimbursement for the
expenses thereof from the Borrower. 
Each Lender agrees to reimburse the Agent on demand for such Lender’s pro  rata
share (based upon its respective Percentage) of any such costs or expenses not
paid by the Borrower.  In addition, the
Borrower agrees to pay, and to save the Agent, the other Agents, the Arranger,
and the Lenders harmless from all liability for, any stamp or other taxes which
may be payable in connection with the execution or delivery of this Agreement,
the Borrowings hereunder, or of any other instruments or documents provided for
herein or delivered or to be delivered hereunder or in connection herewith.

 

SECTION 10.4                                            Indemnification. 
In consideration of the execution and delivery of this Agreement by each
Lender and the extension of the Commitments, the Borrower hereby indemnifies,
exonerates and holds each Agent, the Arranger and each Lender and each of their
respective officers, directors, employees and agents (collectively, the “Indemnified Parties”), WHETHER OR NOT RELATED TO ANY NEGLIGENCE OF
THE INDEMNIFIED PARTIES, free and harmless from and against any and
all actions, causes of action, suits, losses, costs, liabilities and damages,
and expenses incurred in connection therewith (irrespective of whether any such
Indemnified Party is a party to the action for which indemnification hereunder
is sought), including reasonable attorneys’ fees and disbursements
(collectively, the “Indemnified Liabilities”),
incurred by the Indemnified Parties or any of them as a result of, or arising
out of, or relating to any transaction financed or to be financed in whole
or in part, directly or indirectly, with the proceeds of any Loan;  the
entering into and performance of this Agreement and any other Loan Document by
any of the Indemnified Parties; any investigation, litigation or proceeding
related to any acquisition or proposed acquisition by the Borrower or any of
its Restricted Subsidiaries of all or any portion of the stock or assets of any
Person, whether or not such Agent, the Arranger or such Lender is party
thereto; any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Borrower or any of its
Restricted Subsidiaries of any Hazardous Material; or the presence on or
under, or the escape, seepage, leakage, spillage, discharge, emission,
discharging or releases from, any real property owned or operated by the Borrower
or any Subsidiary thereof of any Hazardous Material (including any losses,
liabilities, damages, injuries, costs, expenses or claims asserted or arising
under any Environmental Law), regardless of whether caused by, or within the
control of, the Borrower or such Subsidiary, except for any such Indemnified
Liabilities which are determined by a court of competent jurisdiction in a
final proceeding to have resulted solely from the relevant Indemnified Party’s
gross negligence or willful misconduct. 
If and to the extent that the foregoing undertaking may be unenforceable
for any reason, the Borrower hereby agrees to make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.

 

43

 

SECTION 10.5                                            Survival. 
The obligations of the Borrower under Sections
4.3, 4.4, 4.5, 4.6,
10.3 and 10.4,
and the obligations of the Lenders under Section
9.1, shall in each case survive any termination of this Agreement,
the payment in full of all Obligations and the termination of all Commitments.

 

SECTION 10.6                                            Severability. 
Any provision of this Agreement or any other Loan Document which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement or such Loan Document or affecting the validity or enforceability of
such provision in any other jurisdiction.

 

SECTION 10.7                                            Headings. 
The various headings of this Agreement and of each other Loan Document
are inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or such other Loan Document or any provisions
hereof or thereof.

 

SECTION 10.8                                            Governing
Law; Entire Agreement.  THIS AGREEMENT AND EACH
OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAWS. 
This Agreement and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter
hereof and supersede any prior agreements, written or oral, with respect thereto.

 

SECTION 10.9                                            Successors
and Assigns.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that: (a) the
Borrower may not assign or transfer its rights or obligations hereunder without
the prior written consent of the Agent and all Lenders; and
(b) the rights of sale, assignment and transfer of the Lenders are
subject to Section 10.10.

 

SECTION 10.10                                      Sale and
Transfer of Loans and Commitments; Participations in Loans and Commitments. 
Each Lender may assign, or sell participations in, its Loans and
Commitments to one or more other Persons in accordance with this Section.

 

SECTION 10.10.1                                                              Assignments. 
Any Lender (a) with the written consents
of the Borrower (provided that the consent of the Borrower shall not be
required if an Event of Default has occurred and is continuing) and the Agent
(which consents of the Borrower, if applicable, and the Agent shall not be
unreasonably delayed or withheld), may at any time assign and delegate to one
or more commercial banks or other financial institutions, and (b) with notice to the Borrower and the Agent, but
without the consent of the Borrower or the Agent, may assign and delegate to
any of its Affiliates or to any other Lender or Lender Affiliate (each Person
described in either of the foregoing clauses as being the Person to whom such
assignment and delegation is to be made, being hereinafter referred to as an “Assignee Lender”), all or any fraction of
such Lender’s total Loans and Commitments (which assignment and delegation
shall be of a constant, and not a varying, percentage of all the assigning
Lender’s Loans and Commitments and which shall be of equal pro  rata
shares of the Facility) in a minimum aggregate amount of $5,000,000; provided, however,
that any such Assignee Lender will

 

44

 

comply, if applicable, with the
provisions contained in the last sentence of Section
4.6 and further, provided, however,
that, the Borrower and the Agent shall be entitled to continue to deal solely
and directly with such Lender in connection with the interests so assigned and
delegated to an Assignee Lender until (i) written
notice of such assignment and delegation, together with payment instructions,
addresses and related information with respect to such Assignee Lender, shall
have been given to the Borrower and the Agent by such Lender and such Assignee
Lender, (ii) such Assignee Lender shall have
executed and delivered to the Borrower and the Agent a Lender Assignment
Agreement, accepted by the Agent, (iii) such Assignee Lender shall have
delivered to the Agent an Administrative Questionnaire, and
(iii) the processing fees described below shall have been paid.

 

From and after the date that the Agent accepts such
Lender Assignment Agreement, (x) the Assignee Lender thereunder shall be
deemed automatically to have become a party hereto and to the extent that
rights and obligations hereunder have been assigned and delegated to such
Assignee Lender in connection with such Lender Assignment Agreement, shall have
the rights and obligations of a Lender hereunder and under the other Loan
Documents, and (y) the assignor Lender, to the extent that rights and
obligations hereunder have been assigned and delegated by it in connection with
such Lender Assignment Agreement, shall be released from its obligations
hereunder and under the other Loan Documents. 
Accrued interest on that part of the predecessor Loans and Commitments,
and accrued fees, shall be paid as provided in the Lender Assignment
Agreement.  Accrued interest on that
part of the predecessor Loans and Commitments shall be paid to the assignor
Lender.  Accrued interest and accrued
fees shall be paid at the same time or times provided in this Agreement.  Such assignor Lender or such Assignee Lender
must also pay a processing fee to the Agent upon delivery of any Lender
Assignment Agreement in the amount of $3,500. 
Any attempted assignment and delegation not made in accordance with this
Section shall be null and void.

 

SECTION 10.10.2                                                              Participations. 
Any Lender may at any time sell to one or more commercial banks or other
Persons (each of such commercial banks and other Persons being herein called a
“Participant”) participating interests
in any of the Loans, Commitments or other interests of such Lender hereunder; provided, however,
that (a) no participation contemplated in this Section 10.10 shall relieve such Lender
from its Commitments or its other obligations hereunder or under any other Loan
Document, (b) such Lender shall remain solely
responsible for the performance of its Commitments and such other obligations, (c) the Borrower and the Agent shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement and each of the other Loan
Documents, (d) no Participant, unless such
Participant is an Affiliate of such Lender, or is itself a Lender, shall be
entitled to require such Lender to take or refrain from taking any action
hereunder or under any other Loan Document, except that such Lender may agree
with any Participant that such Lender will not, without such Participant’s
consent, take any actions of the type described in clause
(b) or (c) of Section 10.1, and (e) the
Borrower shall not be required to pay any amount under Section 4.6 that is greater than the amount
which it would have been required to pay had no participating interest been
sold.  The Borrower acknowledges and
agrees that each Participant, for purposes of Sections
4.3, 4.4, 4.5, 4.6,
4.7, 4.8,
4.9 and 10.4,
shall be considered a Lender; provided that this sentence shall not obligate
the Borrower to pay more under such Sections that it would be obligated to pay
had no such participation been granted.

 

45

 

SECTION 10.10.3                                                              Pledge by
Lender.  Any Lender may at any time pledge or assign
a security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

 

SECTION 10.11                                      Other
Transactions.  Nothing contained herein shall preclude the
Agent or any other Lender from engaging in any transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Affiliates in which the Borrower or such Affiliate is
not restricted hereby from engaging with any other Person.

 

SECTION 10.12                                      Confidentiality. 
Each of the Agents and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority or self-regulatory body, (c) to the extent required by applicable
laws or regulations or by any subpoena or similar legal process, (d) to any
other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any Hedging Agreement, (g) with the consent of Borrower or (h) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section by any Person or (ii) becomes available
to any Agent or any Lender on a nonconfidential basis from a source other than
Borrower or any of its Affiliates.  For
the purposes of this Section, “Information” means all information
received from Borrower or its Affiliate relating to Borrower and its
Subsidiaries or their business, other than any such information that is
available to any Agent or any Lender on a nonconfidential basis prior to
disclosure by Borrower or any of its Affiliates.  Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information. 
Furthermore, this obligation of confidentiality shall not apply to, and
each of the Agents and the Lenders (and each Person employed or retained by
such Agents or Lenders who are or are expected to become engaged in evaluating,
approving, structuring or administering the Loans) may disclose to any Person,
without limitation of any kind, the “tax treatment” and “tax structure” (in
each case, within the meaning of Treasury Regulation Section 1.6011-4) of the
Loan transactions contemplated by this Agreement and the other Loan Documents,
and all materials of any kind (including opinions or other tax analyses)
related thereto that are or have been provided to such Agent or Lender relating
to such tax treatment or tax structure. 
With respect to any document or similar item that in either case
contains confidential information concerning such tax treatment or tax
structure of

 

46

 

the Loan transactions
contemplated by this Agreement and the other the Loan Documents as well as
other information, the prior sentence shall only apply to such portions of the
documents or similar item that relate to such tax treatment or tax structure.

 

SECTION 10.13                                      Forum
Selection and Consent to Jurisdiction.  ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR THE
BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE
OF TEXAS OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
TEXAS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT THE AGENT’S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  THE BORROWER, THE AGENT, AND EACH LENDER
HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF
THE STATE OF TEXAS AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF TEXAS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION.  THE BORROWER, THE
AGENT, AND EACH LENDER FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF TEXAS.  THE BORROWER, THE
AGENT, AND EACH LENDER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.  TO THE EXTENT THAT
THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OF FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

SECTION 10.14                                      Waiver of
Jury Trial.  THE AGENT, THE LENDERS AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
AGENT, THE LENDERS OR THE BORROWER.  THE
BORROWER ACKNOWLEDGES AND

 

47

 

AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT
AND EACH SUCH OTHER LOAN DOCUMENT.

 

SECTION 10.15                                      NO ORAL
AGREEMENTS.  THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG
THE PARTIES.

 

[SIGNATURES
BEGIN ON FOLLOWING PAGE]

 

48

 

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

 

	
   

  	
  NOBLE ENERGY, INC., the Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[SIGNATURE PAGE TO NOBLE
ENERGY, INC.

364-DAY CREDIT AGREEMENT]

 

S - 1

 

	
   

  	
  JPMORGAN CHASE BANK, individually as a Lender, as the
  Administrative Agent and as a Senior Managing Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 2

 

	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION, individually as a Lender, as the
  Syndication Agent and as a Senior Managing Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 3

 

	
   

  	
  SOCIÉTÉ GÉNÉRALE, individually as a Lender, as a
  Co-Documentation Agent and as a Senior Managing Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 4

 

	
   

  	
  CITICORP USA, INC., individually as a Senior Managing
  Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 5

 

	
   

  	
  DEUTSCHE BANK AG NEW YORK BRANCH, individually as a Lender, as a
  Co-Documentation Agent and as a Senior Managing Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 6

 

	
   

  	
  THE ROYAL BANK OF SCOTLAND PLC, individually as a Lender, as a
  Co-Documentation Agent and as a Senior Managing Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 7

 

	
   

  	
  BNP PARIBAS, individually as a Lender and as a
  Co-Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 8

 

	
   

  	
  THE BANK OF NEW YORK, individually as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 9

 

	
   

  	
  COMPASS BANK, individually as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 10

 

	
   

  	
  WELLS FARGO BANK, N.A., individually as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 11

 

	
   

  	
  BMO NESBITT BURNS FINANCING, INC., individually as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 12

 

	
   

  	
  BANK ONE, N.A., individually as a Lender and as a
  Senior Managing Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 13

	
   

  	
  COMERICA BANK, individually as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

364-DAY CREDIT AGREEMENT]

 

S - 14

 

	
   

  	
  MORGAN STANLEY BANK, individually as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 15

 

	
   

  	
  SOUTHWEST BANK OF TEXAS, N.A, individually as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 16

 

	
   

  	
  SUMITOMO MITSUI BANKING CORPORATION, individually as a Lender and as a
  Senior Managing Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 17

 

	
   

  	
  KBC BANK NV, individually as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
					

 

S - 18

 

	
   

  	
  BARCLAYS BANK PLC, individually as a

  Lender and as a Senior Managing Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 19

 

	
   

  	
  MIZUHO CORPORATE BANK, LTD., individually as a Co-Agent and as a
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 20

 

	
   

  	
  BAYERISCHE LANDESBANK, CAYMAN
  ISLANDS BRANCH,
  individually as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 21

 

	
   

  	
  THE BANK OF TOKYO-MITSUBISHI, LTD., individually as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 22

 

	
   

  	
  DEN NORSKE BANK ASA, individually as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S - 23

 

SCHEDULE I

DISCLOSURE
SCHEDULE

 

ITEM 5.1.5             Material
Adverse Change.  None.

ITEM 6.5                Financial
Information.  None.

ITEM 6.7                Litigation. 
None.

 

ITEM 6.10              Employee Benefit Plans. Noble Energy, Inc.
provide subsidized health care and life insurance benefits to their early
retirees (retirees who have completed at least twenty years of service or
retirees who have attained age 55 and completed at least five years of
service) for the period of their retirement prior to attaining age 65.

 

1

 

SCHEDULE
II

 

SCHEDULE OF
COMMITMENTS

 

 

	
  NAME OF LENDER

  	
   

  	
  COMMITMENTS

  	
   

  
	
  JPMorgan Chase Bank

  	
   

  	
  $

  	
  21,000,000.00

  	
   

  
	
  Wachovia Bank, National Association

  	
   

  	
  $

  	
  18,000,000.00

  	
   

  
	
  The Royal Bank of Scotland plc

  	
   

  	
  $

  	
  18,000,000.00

  	
   

  
	
  Société Générale

  	
   

  	
  $

  	
  18,000,000.00

  	
   

  
	
  Deutsche Bank AG New York Branch

  	
   

  	
  $

  	
  18,000,000.00

  	
   

  
	
  Citicorp USA, Inc.

  	
   

  	
  $

  	
  18,000,000.00

  	
   

  
	
  Barclays Bank plc

  	
   

  	
  $

  	
  18,000,000.00

  	
   

  
	
  Bank One, N.A.

  	
   

  	
  $

  	
  18,000,000.00

  	
   

  
	
  Sumitomo Mitsui Banking Corporation

  	
   

  	
  $

  	
  18,000,000.00

  	
   

  
	
  BNP Paribas

  	
   

  	
  $

  	
  15,000,000.00

  	
   

  
	
  Mizuho Corporate Bank, Ltd.

  	
   

  	
  $

  	
  15,000,000.00

  	
   

  
	
  Morgan Stanley Bank

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  
	
  Bayerische Landesbank, Cayman Islands
  Branch

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  
	
  Southwest Bank of Texas, N.A.

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  
	
  The Bank of Tokyo-Mitsubishi, Ltd.

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  
	
  BMO Nesbitt Burns Financing, Inc.

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  
	
  The Bank of New York

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  
	
  Wells Fargo Bank, N.A.

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  
	
  KBC Bank NV

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  
	
  Comerica Bank

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  
	
  Den Norske Bank ASA

  	
   

  	
  $

  	
  10,000,000.00

  	
   

  
	
  Compass Bank

  	
   

  	
  $

  	
  5,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  300,000,000

  	
   

  

 

1

 

SCHEDULE 6.8

 

SUBSIDIARIES

	
  Name

  	
   

  	
  State or

  Jurisdiction of

  Organization

  	
   

  	
  Ownership %

  	
   

  	
  Restricted/

  Unrestricted

  Subsidiary

  
	
  Noble Energy Marketing, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Unrestricted

  
	
  Noble Gas Pipeline, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy Marketing, Inc.

  	
   

  	
  Unrestricted

  
	
  Samedan Oil of Canada, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Restricted

  
	
  Samedan North Sea, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Restricted

  
	
  Samedan Oil of Indonesia, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Restricted

  
	
  Samedan Pipe Line Corporation

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Restricted

  
	
  Samedan Royalty Corporation

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Restricted

  
	
  Comin 1989 Partnership

  	
   

  	
  Oklahoma

  	
   

  	
  52.267% general partnership interest owned by
  Samedan Royalty Corporation

  	
   

  	
  Restricted

  
	
  Samedan of Tunisia, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Restricted

  
	
  Samedan, Mediterranean Sea, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Unrestricted

  
	
  Samedan of North Africa, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Unrestricted

  
	
  Samedan Vietnam Limited

  	
   

  	
  Cayman Islands

  	
   

  	
  100% owned by Samedan of North Africa, Inc.

  	
   

  	
  Unrestricted

  
	
  EDC Ireland

  	
   

  	
  Cayman Islands

  	
   

  	
  100% owned by Samedan of North Africa, Inc.

  	
   

  	
  Unrestricted

  
	
  Samedan International

  	
   

  	
  Cayman Islands

  	
   

  	
  100% owned by Samedan of North Africa, Inc.

  	
   

  	
  Unrestricted

  
	
  Noble Energy Hannah Ltd.

  	
   

  	
  Cayman Islands

  	
   

  	
  100% owned by Samedan of North Africa, Inc.

  	
   

  	
  Unrestricted

  

 

1

 

	
  Name

  	
   

  	
  State or

  Jurisdiction of

  Organization

  	
   

  	
  Ownership %

  	
   

  	
  Restricted/

  Unrestricted

  Subsidiary

  
	
  Noble Energy West Africa Ltd.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Samedan of North Africa, Inc.

  	
   

  	
  Unrestricted

  
	
  Machalapower Cia. Lpda.

  	
   

  	
  Cayman Islands

  	
   

  	
  100% owned by Samedan International

  	
   

  	
  Unrestricted

  
	
  Noble Energy Mediterranean Ltd.

  	
   

  	
  Cayman Islands

  	
   

  	
  100% owned by Samedan International

  	
   

  	
  Unrestricted

  
	
  Samedan Transfer Sub

  	
   

  	
  Cayman Islands

  	
   

  	
  100% owned by Samedan International

  	
   

  	
  Unrestricted

  
	
  Temin 1987 Partnership

  	
   

  	
  Oklahoma

  	
   

  	
  50.35% general partnership interest owned by Noble
  Energy, Inc. and 5.263% general partnership interest owned by Samedan Royalty
  Corporation

  	
   

  	
  Restricted

  
	
  Energy Development Corporation (Argentina), Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Unrestricted

  
	
  Energy Development Corporation (China), Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Unrestricted

  
	
  Energy Development Corporation (HIPS), Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Restricted

  
	
  EDC Ecuador Ltd.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Unrestricted

  
	
  EDC Ecuador Limited

  	
   

  	
  Cayman Islands

  	
   

  	
  100% owned by EDC Ecuador Ltd.

  	
   

  	
  Unrestricted

  
	
  EDC Australia Ltd.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Restricted

  

 

2

 

	
  Name

  	
   

  	
  State or

  Jurisdiction of

  Organization

  	
   

  	
  Ownership %

  	
   

  	
  Restricted/

  Unrestricted

  Subsidiary

  
	
  EDC Portugal Ltd.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Restricted

  
	
  Gasdel Pipeline System Incorporated

  	
   

  	
  New Jersey

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Restricted

  
	
  Producers Service, Inc.

  	
   

  	
  New Jersey

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Restricted

  
	
  HGC, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Restricted

  
	
  EDC (UK) Limited

  	
   

  	
  Delaware

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Restricted

  
	
  EDC Denmark, Inc.

  	
   

  	
  Delaware

  	
   

  	
  100% owned by EDC (UK) Limited

  	
   

  	
  Restricted

  
	
  EDC (Europe) Limited

  	
   

  	
  England

  	
   

  	
  100% owned by EDC (UK) Limited

  	
   

  	
  Restricted

  
	
  EDC (ISE) Limited

  	
   

  	
  Scotland

  	
   

  	
  100% owned by EDC (Europe) Limited

  	
   

  	
  Restricted

  
	
  EDC (Oilex) Limited

  	
   

  	
  England

  	
   

  	
  100% owned by EDC (Europe) Limited

  	
   

  	
  Restricted

  
	
  Brabant Oil Limited

  	
   

  	
  England

  	
   

  	
  100% owned by EDC (Europe) Limited

  	
   

  	
  Restricted

  
	
  LaTex Resources Inc.

  	
   

  	
  Colorado

  	
   

  	
  100% owned by Noble Energy, Inc.

  	
   

  	
  Unrestricted

  

 

3

 

SCHEDULE 7.2

 

EXISTING
LIENS

 

NONE

 

1

 

EXHIBIT 2.5

 

BORROWING
REQUEST

 

JPMorgan Chase Bank, as
Administrative Agent

Agency Services

One Chase Manhattan Plaza, 8th Floor

New York, NY 10081

Attention:                              Muniram
Appanna

Telephone No.:                     (212)
552-7943

Facsimile No.:                       (212)
552-3295

 

JPMorgan Chase Bank, as
Administrative Agent

Global Oil & Gas Group

600 Travis, 20th Floor

Houston, Texas 77002

Attention:              Peter Licalzi

Telephone:            713-216-8869

Facsimile:               713-216-4117

 

NOBLE ENERGY, INC.

 

Gentlemen and Ladies:

 

This Borrowing Request is delivered to you pursuant to Section 2.5 of the 364-Day Credit Agreement,
dated as of October 30, 2003 (as may be amended, supplemented, restated or
otherwise modified from time to time, the “Credit Agreement”),
among Noble Energy, Inc., a Delaware corporation (the “Borrower”), JPMorgan Chase Bank, as
administrative agent (in such capacity, together with any successor(s) thereto
in such capacity, the “Agent”), the
various other agents party thereto, and certain commercial lending institutions
as are or may become Lenders thereunder. 
Unless otherwise defined herein or the context otherwise requires, terms
used herein have the meanings provided in the Credit Agreement.

 

The Borrower hereby requests that a [Revolving] [Term] Loan be made in
the aggregate principal amount of
$               
on          ,
            as a
[Eurodollar Loan having an Interest Period of
            months]
[Base Rate Loan].

 

                The Borrower hereby acknowledges that, pursuant to Section 5.2.2 of the Credit Agreement, each
of the delivery of this Borrowing Request and the acceptance by the Borrower of
the proceeds of the Loans requested hereby constitute a representation and
warranty by the Borrower that, on the date of such Loans, and before and after
giving effect thereto and to the application of the proceeds therefrom, all
statements set forth in Section 5.2.1
are true and correct in all material respects.

 

2

 

The Borrower agrees that if prior to the time of the Borrowing
requested hereby any matter certified to herein by it will not be true and
correct at such time as if then made, it will immediately so notify the
Agent.  Except to the extent, if any,
that prior to the time of the Borrowing requested hereby the Agent shall
receive written notice to the contrary from the Borrower, each matter certified
to herein shall be deemed once again to be certified as true and correct at the
date of such Borrowing as if then made.

 

Please wire transfer the proceeds of the Borrowing to the accounts of
the following persons at the financial institutions indicated respectively:

 

	
  Amount to be Transferred

  	
   

  	
  Person to be Paid

  	
   

  	
  Name, Address, etc.

  of Transferee Lender

  	
   

  
	
   

  	
   

  	
  Name

  	
   

  	
  Account No.

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  

  
Attention:

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  

  
Attention:

  	
   

  
	
  Balance of
  such proceeds

  	
   

  	
  The Borrower

  	
   

  	
   

  	
   

  	
  

  
Attention:

  	
   

  

 

The Borrower has caused this Borrowing Request to be executed and
delivered, and the certification and warranties contained herein to be made, by
its duly Authorized Officer this         day
of
                     ,
200  .

 

	
   

  	
  NOBLE ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

3

 

EXHIBIT 2.6

 

CONTINUATION/CONVERSION
NOTICE

 

JPMorgan Chase Bank, as Administrative Agent

Agency Services

One Chase Manhattan Plaza, 8th Floor

New York, NY 10081

Attention:                              Muniram
Appanna

Telephone No.:                     (212)
552-7943

Facsimile No.:                       (212)
552-3295

 

JPMorgan Chase Bank, as Administrative Agent

Global Oil & Gas Group

600 Travis, 20th Floor

Houston, Texas 77002

Attention:              Peter Licalzi

Telephone:            713-216-8869

Facsimile:               713-216-4117

 

NOBLE ENERGY, INC.

 

Gentlemen and Ladies:

 

This Continuation/Conversion Notice is delivered to you pursuant to Section 2.6 of the 364-Day Credit Agreement,
dated as of October 30, 2003 (as may be amended, supplemented, restated or
otherwise modified from time to time, the “Credit
Agreement”), among Noble Energy, Inc., a Delaware corporation (the “Borrower”), JPMorgan Chase Bank, as
administrative agent (in such capacity, together with any successor(s) thereto
in such capacity, the “Agent”), the
other agents party thereto, and certain commercial lending institutions as are
or may become Lenders thereunder. 
Unless otherwise defined herein or the context otherwise requires, terms
used herein have the meanings provided in the Credit Agreement.

 

                The Borrower hereby requests that on
                         ,
200   ,

 

(1)           $                
of the presently outstanding principal amount of the [Revolving] [Term] Loans
originally made on
                ,
200     [and
$                    
of the presently outstanding principal amount of the [Revolving] [Term] Loans
originally made on
                        ,
200    ],

 

(2)           and all presently being maintained as
[Base Rate Loans] [Eurodollar Loans] [Term Loans],

 

(3)           be [converted into] [continued as],

 

1

 

(4)           [Eurodollar Loans having an Interest
Period of            
months] [Base Rate Loans].

The Borrower hereby:

 

(a)           certifies and warrants that no
Default or Event of Default has occurred and is continuing; and

 

(b)           agrees that if prior to the time of
such continuation or conversion any matter certified to herein by it will not
be true and correct at such time as if then made, it will immediately so notify
the Agent.

 

Except to the extent, if any, that prior to the time
of the continuation or conversion requested hereby the Agent shall receive
written notice to the contrary from the Borrower, each matter certified to
herein shall be deemed to be certified at the date of such continuation or
conversion as if then made.

 

The Borrower has caused this Continuation/Conversion Notice to be
executed and delivered, and the certification and warranties contained herein
to be made, by its Authorized Officer this
          day of
              ,
200    .

 

	
   

  	
  NOBLE ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

2

 

EXHIBIT
2.8

 

[FORM OF]

 

NOTE

 

	
  $                   

  	
   

  	
  October 30, 2003

  

 

FOR VALUE RECEIVED, the undersigned, NOBLE ENERGY, INC., a Delaware
corporation (the “Borrower”), promises to pay to the order of
                               
(the “Lender”) on the Maturity Date the principal sum of
                                                       
AND       /100 DOLLARS
($                      )
or, if less, the aggregate unpaid principal amount of all Obligations shown on
the schedule attached hereto (and any continuation thereof, provided, however,
that the failure to make such notations shall not limit or otherwise affect the
obligations of the Borrower under this Note or the Credit Agreement), in either
case made by the Lender pursuant to that certain 364-Day Credit Agreement,
dated as of October 30, 2003 (together with all amendments and other
modifications, if any, from time to time thereafter made thereto, the “Credit
Agreement”), among Borrower, the Lenders party thereto (including the
Lender), JPMorgan Chase Bank, as administrative agent (in such capacity,
together with any successor(s) thereto in such capacity, the “Agent”), and the
other agents party thereto.

 

The Borrower also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement.

 

This Note (the “Note”) evidences Indebtedness incurred under the
Credit Agreement to which reference is made for a statement of the terms and
conditions on which the Borrower is permitted and required to make prepayments
and repayments of principal of the Indebtedness evidenced by this Note and on
which such Indebtedness may be declared to be immediately due and payable.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement.

 

All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.

 

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF TEXAS.

 

	
   

  	
  NOBLE ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

1

 

LOANS AND PRINCIPAL PAYMENTS

 

	
  Date

  	
   

  	
  Amount of

  Loan Made

  	
   

  	
  Interest

  Period (if

  Applicable)

  	
   

  	
  Amount of

  Principal

  Repaid

  	
   

  	
  Unpaid

  Principal

  Balance

  	
   

  	
  Total

  	
   

  	
  Notation

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

2

 

EXHIBIT 5.1.3

 

[Opinion of Counsel to the Borrower]

 

[TO BE ATTACHED AND
 BE IN SUBSTANTIALLY THE SAME FORM AS
NOVEMBER, 2002 LEGAL OPINION]

 

1

 

EXHIBIT 10.10

 

LENDER ASSIGNMENT AGREEMENT

 

To:          Noble Energy, Inc.,

as the Borrower

 

To:          JPMorgan Chase Bank,

as Administrative Agent

 

NOBLE ENERGY, INC.

 

Gentlemen and Ladies:

 

We refer to Section 10.10.1 of
the 364-Day Credit Agreement, dated as of October 30, 2003 (as may be
amended, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”), among Noble Energy, Inc.,
a Delaware corporation (the “Borrower”),
JPMorgan Chase Bank, as administrative agent (in such capacity, together with
any successor(s) thereto in such capacity, the “Agent”),
the other agents party thereto, and certain commercial lending institutions as
are or may become Lenders thereunder. 
Unless otherwise defined herein or the context otherwise requires, terms
used herein have the meanings provided in the Credit Agreement.

 

This agreement is delivered to you pursuant to Section 10.10.1 of the Credit Agreement and
also constitutes notice to each of you, pursuant to Section
10.10.1 of the Credit Agreement, of the assignment and delegation to
                            
(the “Assignee”) of
      % of the Loans and Commitments of
                       
(the “Assignor”) outstanding under the
Credit Agreement on the date hereof. 
After giving effect to the foregoing assignment and delegation, the
Assignor’s and the Assignee’s Percentages for the purposes of the Credit
Agreement are set forth opposite such Person’s name on the signature pages
hereof.

 

[Add paragraph dealing with accrued interest and fees with respect to
Loans assigned, if applicable.]

 

The Assignee hereby acknowledges and confirms that it has received a
copy of the Credit Agreement and the exhibits related thereto, together with
copies of the documents which were required to be delivered under the Credit
Agreement as a condition to the making of the Loans thereunder.  The Assignee further confirms and agrees
that in becoming a Lender and in making its Commitments and Loans under the
Credit Agreement, such actions have and will be made without recourse to, or
representation or warranty by the Agent.

 

Except as otherwise provided in the Credit Agreement, effective as of
the date of acceptance hereof by the Agent

 

(a)           the
Assignee (i) shall be deemed automatically to have
become a party to the Credit Agreement, have all the rights and obligations of
a “Lender” under the Credit Agreement and the other Loan Documents as if it
were an original signatory thereto to the extent specified in the second
paragraph hereof; and (ii) agrees to be bound by the
terms and conditions set forth in

 

1

 

the Credit Agreement and the other Loan Documents as
if it were an original signatory thereto; and

 

(b)           the
Assignor shall be released from its obligations under the Credit Agreement and
the other Loan Documents to the extent specified in the second paragraph
hereof.

 

The Assignor and the Assignee hereby agree that the [Assignor]
[Assignee] will pay to the Agent the processing fee referred to in Section 10.10.1 of the Credit Agreement upon
the delivery hereof.

 

The Assignee hereby advises each of you of the following administrative
details with respect to the assigned Loans and 
Commitments and requests the Agent to acknowledge receipt of this
document:

 

(A)          Address
for Notices:

 

Institution Name:

 

Attention:

 

Domestic Office:

 

Telephone:

 

Facsimile:

 

Telex
(Answerback):

 

LIBOR Office:

 

Telephone:

 

Facsimile:

 

Telex
(Answerback):

 

(B)           Payment
Instructions:

 

The Assignee agrees to furnish to the Agent (i) the tax form required
by Section 4.6 (if so required) of the
Credit Agreement no later than the date of acceptance hereof by the Agent and (ii) if
the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form supplied by the Agent, duly completed
by the Assignee.

 

This Agreement may be executed by the Assignor and Assignee in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute one and the
same agreement.

 

2

 

	
  Adjusted
  Percentage

  	
   

  	
  [ASSIGNOR]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Commitment and
  Loans:       %

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Percentage

  	
   

  	
  [ASSIGNEE]

  
	
   

  	
   

  	
   

  
	
  Commitment and
  Loans:      %

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted and Acknowledged this
          day of                 ,
  200  ,  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  JPMORGAN CHASE BANK,

  	
   

  	
   

  
	
    as Administrative Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

3

 

TABLE OF CONTENTS

 

 

	
  ARTICLE
  I

  	
  DEFINITIONS
  AND ACCOUNTING TERMS

  	
   

  
	
  SECTION 1.1

  	
   

  	
  Defined Terms

  	
   

  
	
  SECTION 1.2

  	
   

  	
  Use of Defined Terms

  	
   

  
	
  SECTION 1.3

  	
   

  	
  Cross-References

  	
   

  
	
  SECTION 1.4

  	
   

  	
  Accounting and Financial Determinations

  	
   

  
	
  ARTICLE
  II

  	
  THE
  FACILITY AND BORROWING PROCEDURES

  	
   

  
	
  SECTION 2.1

  	
   

  	
  Facility

  	
   

  
	
  SECTION 2.2

  	
   

  	
  [Intentionally Omitted]

  	
   

  
	
  SECTION 2.3

  	
   

  	
  Reduction of Commitment Amount

  	
   

  
	
  SECTION 2.4

  	
   

  	
  Base Rate Loans and Eurodollar Loans

  	
   

  
	
  SECTION 2.5

  	
   

  	
  Borrowing Procedures for Loans

  	
   

  
	
  SECTION 2.6

  	
   

  	
  Continuation and Conversion Elections

  	
   

  
	
  SECTION 2.7

  	
   

  	
  Funding

  	
   

  
	
  SECTION 2.8

  	
   

  	
  Repayment of Loans; Evidence of Debt

  	
   

  
	
  ARTICLE III

  	
  REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

  	
   

  
	
  SECTION 3.1

  	
   

  	
  Repayments and Prepayments

  	
   

  
	
  SECTION 3.2

  	
   

  	
  Interest Provisions

  	
   

  
	
  SECTION 3.3

  	
   

  	
  Fees

  	
   

  
	
  ARTICLE
  IV

  	
  CERTAIN
  EURODOLLAR AND OTHER PROVISIONS

  	
   

  
	
  SECTION 4.1

  	
   

  	
  Eurodollar Lending Unlawful

  	
   

  
	
  SECTION 4.2

  	
   

  	
  Deposits Unavailable or Eurodollar Interest
  Rate Unascertainable

  	
   

  
	
  SECTION 4.3

  	
   

  	
  Increased Eurodollar Borrowing Costs, etc

  	
   

  
	
  SECTION 4.4

  	
   

  	
  Funding Losses

  	
   

  
	
  SECTION 4.5

  	
   

  	
  Increased Capital Costs

  	
   

  
	
  SECTION 4.6

  	
   

  	
  Taxes

  	
   

  
	
  SECTION 4.7

  	
   

  	
  Special Fees in Respect of Reserve
  Requirements

  	
   

  
	
  SECTION 4.8

  	
   

  	
  Payments, Computations, etc

  	
   

  
	
  SECTION 4.9

  	
   

  	
  Sharing of Payments

  	
   

  
	
  SECTION 4.10

  	
   

  	
  Replacement of Lender on Account of
  Increased Costs, Eurodollar Lending Unlawful, Reserve Requirements, Taxes,
  Certain Dissents, etc

  	
   

  

 

i

 

	
  SECTION 4.11

  	
   

  	
  Maximum Interest

  	
   

  
	
  ARTICLE
  V

  	
  CONDITIONS

  	
   

  
	
  SECTION 5.1

  	
   

  	
  Effective Date

  	
   

  
	
  SECTION 5.2

  	
   

  	
  All Borrowings

  	
   

  
	
  ARTICLE
  VI

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
  SECTION 6.1

  	
   

  	
  Organization, etc

  	
   

  
	
  SECTION 6.2

  	
   

  	
  Due Authorization, Non-Contravention, etc

  	
   

  
	
  SECTION 6.3

  	
   

  	
  Government Approval, Regulation, etc

  	
   

  
	
  SECTION 6.4

  	
   

  	
  Validity, etc

  	
   

  
	
  SECTION 6.5

  	
   

  	
  Financial Information

  	
   

  
	
  SECTION 6.6

  	
   

  	
  No Material Adverse Change

  	
   

  
	
  SECTION 6.7

  	
   

  	
  Litigation, Labor Controversies, etc

  	
   

  
	
  SECTION 6.8

  	
   

  	
  Subsidiaries

  	
   

  
	
  SECTION 6.9

  	
   

  	
  Taxes

  	
   

  
	
  SECTION 6.10

  	
   

  	
  Pension and Welfare Plans

  	
   

  
	
  SECTION 6.11

  	
   

  	
  Environmental Warranties and Compliance

  	
   

  
	
  SECTION 6.12

  	
   

  	
  Regulation U

  	
   

  
	
  SECTION 6.13

  	
   

  	
  Accuracy of Information

  	
   

  
	
  SECTION 6.14

  	
   

  	
  Use of Proceeds

  	
   

  
	
  ARTICLE VII

  	
  COVENANTS

  	
   

  
	
  SECTION 7.1

  	
   

  	
  Affirmative Covenants

  	
   

  
	
  SECTION 7.2

  	
   

  	
  Negative Covenants

  	
   

  
	
  ARTICLE VIII

  	
  EVENTS OF DEFAULT

  	
   

  
	
  SECTION 8.1

  	
   

  	
  Listing of Events of Default

  	
   

  
	
  SECTION 8.2

  	
   

  	
  Action if Bankruptcy

  	
   

  
	
  SECTION 8.3

  	
   

  	
  Action if Other Event of Default

  	
   

  
	
  ARTICLE IX

  	
  THE AGENTS

  	
   

  
	
  SECTION 9.1

  	
   

  	
  Actions

  	
   

  
	
  SECTION 9.2

  	
   

  	
  Funding Reliance, etc

  	
   

  
	
  SECTION 9.3

  	
   

  	
  Exculpation

  	
   

  
	
  SECTION 9.4

  	
   

  	
  Successor

  	
   

  

 

ii

 

	
  SECTION 9.5

  	
   

  	
  Loans by the Agents

  	
   

  
	
  SECTION 9.6

  	
   

  	
  Credit Decisions

  	
   

  
	
  SECTION 9.7

  	
   

  	
  Copies, etc

  	
   

  
	
  ARTICLE X

  	
  MISCELLANEOUS
  PROVISIONS

  	
   

  
	
  SECTION 10.1

  	
   

  	
  Waivers, Amendments, etc

  	
   

  
	
  SECTION 10.2

  	
   

  	
  Notices

  	
   

  
	
  SECTION 10.3

  	
   

  	
  Payment of Costs, Expenses and Taxes

  	
   

  
	
  SECTION 10.4

  	
   

  	
  Indemnification

  	
   

  
	
  SECTION 10.5

  	
   

  	
  Survival

  	
   

  
	
  SECTION 10.6

  	
   

  	
  Severability

  	
   

  
	
  SECTION 10.7

  	
   

  	
  Headings

  	
   

  
	
  SECTION 10.8

  	
   

  	
  Governing Law; Entire Agreement

  	
   

  
	
  SECTION 10.9

  	
   

  	
  Successors and Assigns

  	
   

  
	
  SECTION 10.10

  	
   

  	
  Sale and Transfer of Loans and
  Commitments; Participations in Loans and Commitments

  	
   

  
	
  SECTION 10.11

  	
   

  	
  Other Transactions

  	
   

  
	
  SECTION 10.12

  	
   

  	
  Confidentiality

  	
   

  
	
  SECTION 10.13

  	
   

  	
  Forum Selection and Consent to
  Jurisdiction

  	
   

  
	
  SECTION 10.14

  	
   

  	
  Waiver of Jury Trial

  	
   

  
	
  SECTION 10.15

  	
   

  	
  NO ORAL AGREEMENTS

  	
   

  

 

iii

 

SCHEDULES AND
EXHIBITS

 

	
  SCHEDULE
  I

  	
   

  	
  -

  	
   

  	
  Disclosure
  Schedule

  
	
  SCHEDULE
  II

  	
   

  	
  -

  	
   

  	
  Schedule
  of Commitments

  
	
  SCHEDULE
  6.8

  	
   

  	
  -

  	
   

  	
  Subsidiaries

  
	
  SCHEDULE
  7.2

  	
   

  	
  -

  	
   

  	
  Existing
  Liens

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT
  2.5

  	
   

  	
  -

  	
   

  	
  Form
  of Borrowing Request

  
	
  EXHIBIT
  2.6

  	
   

  	
  -

  	
   

  	
  Form
  of Continuation/Conversion Notice

  
	
  EXHIBIT
  2.8

  	
   

  	
  -

  	
   

  	
  Form
  of Note

  
	
  EXHIBIT
  5.1.3

  	
   

  	
  -

  	
   

  	
  Form
  of Opinion of Counsel

  
	
  EXHIBIT
  10.10

  	
   

  	
  -

  	
   

  	
  Form
  of Lender Assignment Agreement

  

 

ivExhibit
10.2

 

WEST
SUBURBAN BANCORP, INC.

 

RESTATED EMPLOYMENT
AGREEMENT – KEVIN J. ACKER

 

This RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), is made and entered into as of
the 8th day of March, 2004 (the “Effective
Date”), by and between WEST SUBURBAN BANCORP, INC., an Illinois
corporation (the “Employer”), and
KEVIN J. ACKER, an Illinois resident (the “Executive”).

 

R
E  C  I  T  A  L  S:

 

A.            The Employer owns all of the issued and outstanding
capital stock of West Suburban Bank, Lombard, Illinois (the “Bank”).

 

B.             The Employer desires to continue to employ the Executive
as an officer of the Employer and of the Bank for a specified term and the
Executive is willing to continue such employment upon the terms and conditions
hereinafter set forth.

 

C.             Additionally, the Employer recognizes that circumstances
may arise which may result in a change in control of the Employer and/or the
Bank (through acquisition or otherwise) thereby causing uncertainty with
respect to the Executive’s employment without regard to the competence or past
contributions of the Executive and that such uncertainty may result in the loss
to the Employer and/or the Bank of the valuable services provided by the
Executive.  In such circumstances, the
Employer and the Executive wish to provide reasonable security to the Executive
against changes in the Executive’s employment relationship with the Employer
and/or the Bank.

 

D.            Executive currently serves as the Chief Executive Officer
of Employer and the Senior Vice President, Marketing of the Bank pursuant to
that certain Employment Agreement dated May 1, 1997, as amended pursuant to
that certain Amendment to Employment Agreement dated January 21, 1999 (as
amended, the “1997 Employment Agreement”).

 

E.             The parties desire to amend and restate the 1997
Employment Agreement in accordance with the terms, and subject to the
conditions, set forth herein.

 

NOW,
THEREFORE, in consideration of the promises and of the
covenants and agreements hereinafter contained, it is covenanted and agreed by
and between the parties hereto as follows:

 

A
G  R  E  E  M  E  N  T  S:

 

1.             TERM
OF EMPLOYMENT WITH AUTOMATIC RENEWAL PROVISIONS.  The period of Executive’s employment under this Agreement shall
be deemed to have commenced on the Effective Date and shall continue for a
period of approximately three (3) years through December 31, 2006.  The term of employment of the Executive
under this Agreement shall automatically be extended for one (1) additional
year on December 31st of each year beginning December 31, 2004,
unless either the Employer or the Executive notifies the other party, by
written notice delivered no later than

 

 

November 1st of such
year, that the term of employment of the Executive under this Agreement shall
not be extended for an additional year. 
In addition, upon the occurrence of a Change in Control (as defined
below), the term of employment of the Executive under this Agreement shall be
automatically renewed and extended to provide a term of employment (in
accordance with the terms, and subject to the conditions, set forth herein)
equal to a period of three (3) years from the date of the consummation of the
Change in Control.

 

2.             POSITION
AND DUTIES.  The Employer hereby
continues to employ the Executive as the Chief Executive Officer of the
Employer and as the Senior Vice President, Marketing of the Bank or in such
other senior executive capacity as shall be mutually agreed between the
Employer and the Executive.  During the
period of the Executive’s employment hereunder, the Executive shall devote his
best efforts and full business time, energy, skills and attention to the
business and affairs of the Employer and its affiliates, including the
Bank.  The Executive’s duties and
authority shall consist of and include all duties and authority customarily
performed and held by persons holding equivalent positions with business
organizations similar in nature and size to the Employer, as such duties and
authority are reasonably defined, modified and delegated from time to time by
the Board of Directors of the Employer (the “Board”).  The Executive shall have the powers
necessary to perform the duties assigned to him and shall be provided such
supporting services, staff and other assistance, office space and accoutrements
as shall be reasonably necessary and appropriate in the light of such assigned
duties.

 

3.             COMPENSATION.  As compensation for the services to be
provided by the Executive hereunder, the Executive shall receive the following
compensation, expense reimbursement and other benefits:

 

(a)           BASE
SALARY.  The Executive shall receive
an aggregate annual minimum base salary at the rate of two hundred fifty-eight
thousand three hundred ninety-one and 00/100 dollars ($258,391.00) payable in
installments in accordance with the regular payroll schedule of the Bank (“Base Salary”).  Such Base Salary shall be subject to review annually commencing
in 2004 and shall be maintained or increased during the term hereof in
accordance with the Employer’s established management compensation policies and
practices.

 

(b)           BONUS.
 The Executive shall be eligible for an
annual bonus (“Bonus”) with
respect to each fiscal year of the Employer in accordance with the Employer’s
compensation and bonus policies and practices for senior executive
officers.  The amount of the Bonus, if
any, shall be determined by the Compensation Committee of the Board (the “Compensation Committee”).

 

(c)           CLUB
MEMBERSHIP.  The Executive shall be
reimbursed for membership dues and other customary charges at the St. Charles
Country Club.

 

(d)           DEFERRED
COMPENSATION.  Employer shall make
contributions for the benefit of Executive to the Employer’s Directors and
Senior Management Deferred Compensation Plan (“Deferred Compensation Plan”), including any successor plan or
program thereto, in an annual amount of not less than twenty-five thousand
dollars ($25,000).

 

2

 

(e)           VACATIONS. 
Executive shall receive paid vacation days of at least such number of
paid vacation days as Executive shall be entitled to receive as of the date
hereof in accordance with the Employer’s vacation policy in effect as of the
date hereof.  The method of accrual,
forfeiture and scheduling of vacation days shall be in accordance with, and
subject to, the Employer’s general vacation policies and practices.

 

(f)            LONG TERM CARE INSURANCE.  Employer shall provide Executive and
Executive’s spouse with coverage under, and shall pay the premiums with respect
to, long term care insurance in accordance with the terms, and subject to the
conditions, as the Employer shall provide to other senior executive
officers.  The Executive acknowledges
that this benefit shall be subject to the continued availability of such long
term care insurance from the insurer under which this benefit is provided to
other senior executives from time to time.

 

(g)           REIMBURSEMENT
OF EXPENSES.  The Executive shall be
reimbursed, upon submission of appropriate vouchers and supporting
documentation, for all travel, entertainment and other out-of-pocket expenses
reasonably and necessarily incurred by the Executive in the performance of his
duties hereunder and shall be entitled to attend seminars, conferences and
meetings relating to the business of the Employer consistent with the
Employer’s established policies in that regard.

 

(h)           OTHER
BENEFITS.  The Executive shall be
entitled to all benefits specifically established for him and, when and to the
extent he is eligible therefor, to participate in all plans and benefits
generally accorded to senior executives of the Employer, including, but not
limited to the following to the extent provided, if at all, to other senior
executives of the Employer:  pension;
profit-sharing; employee stock ownership plan; supplemental retirement;
incentive compensation; bonus; disability income; split-dollar life insurance;
group life; health, medical (including dental, vision and prescription drug
insurance, if any) and hospitalization insurance; long term care insurance; and
similar or comparable plans, and also to perquisites extended to similarly situated
senior executives; provided, however, that such plans, benefits and perquisites
shall be no less than those made available to all other employees of the
Employer.

 

(i)            WITHHOLDING.  The Employer shall be entitled to withhold
from amounts payable to the Executive hereunder, any federal, state or local
withholding or other taxes or charges which it is from time to time required to
withhold.  The Employer shall be
entitled to rely upon the opinion of its legal counsel with regard to any
question concerning the amount or requirement of any such withholding.

 

4.             CONFIDENTIALITY
AND LOYALTY.  The Executive acknowledges
that heretofore or hereafter during the course of his employment he has
produced and may hereafter produce and have access to material, records, data,
trade secrets and information not generally available to the public
(collectively, “Confidential Information”)
regarding the Employer and its subsidiaries and affiliates.  Accordingly, during and subsequent to
termination of this Agreement, the Executive shall hold in confidence and not
directly or indirectly disclose, use, copy or make lists of any such
Confidential Information, except to the extent that such information is or
thereafter becomes lawfully available from public sources, or such disclosure
is authorized in writing by the Employer, required by a law or any competent
administrative agency or judicial authority, or otherwise as reasonably
necessary or appropriate in connection

 

3

 

with performance by the Executive of his duties hereunder.  All records, files, documents and other
materials or copies thereof relating to the Employer’s business which the
Executive shall prepare or use, shall be and remain the sole property of the
Employer, shall not be removed from the Employer’s premises without its written
consent, and shall be promptly returned to the Employer upon termination of the
Executive’s employment hereunder.  The
Executive agrees to abide by the Employer’s reasonable policies, as in effect
from time to time, respecting avoidance of interests conflicting with those of
the Employer.  In the event of any
violation or threatened violation of these restrictions, the Employer, in
addition to and not in limitation of being relieved of all further obligations
under this Agreement and of any other rights, remedies or damages available to
the Employer under this Agreement or otherwise at law or in equity, shall be
entitled to preliminary and permanent injunctive relief to prevent or restrain
any such violation by the Executive and any and all persons directly or
indirectly acting for or with him, as the case may be.

 

5.             TERMINATION.

 

(a)                                  AGREEMENT
NON-EXTENSION OR EMPLOYMENT TERMINATION BY EMPLOYER AND TERMINATION BY
EXECUTIVE.

 

(i)            In
the event of the termination of the Executive’s employment under this Agreement
by the Employer prior to the last day of the then current term for any reason
other than a termination in accordance with the provisions of paragraph (c) of
this Section 5 (TERMINATION FOR CAUSE), or the non-extension of this Agreement
by the Employer in accordance with the provisions of Section 1, the Employer
shall (A) continue to pay the Executive the Base Salary then payable to the
Executive, (B) continue to pay the Executive an annual Bonus in an amount equal
to the average of his most recent three (3) years’ annual Bonus amounts, and
(C) shall continue to provide coverage for the Executive under all plans and
benefits otherwise provided to senior executives of the Employer (including without
limitation, group health, life, disability and long term care insurance
coverage, club dues, and Deferred Compensation Plan contributions), unless
unable to continue such coverage by law, for the remainder of the term of this
Agreement, provided, however, that in the circumstance where the term of this
Agreement is not extended, the Executive must remain employed with the Employer
to receive such payments and benefits; further provided, that the continued
payment of these amounts by the Employer shall not offset or diminish any
compensation or benefits accrued as of the date of termination or
non-extension.  In addition, within
thirty (30) days of Executive’s termination of employment, the Employer shall
pay the Executive (a) such Base Salary and vacation pay (for unused vacation
days in accordance with the Employer’s policies and practices with respect to
vacation pay) as shall have accrued and remains unpaid through the effective
date of the termination, (b) Bonuses previously determined by the Compensation
Committee for any prior fiscal year(s) that remain unpaid, (c) for all accrued
and unused sick days and (d) reimbursement of previously incurred expenses
eligible for reimbursement pursuant to the Employer’s policies and practices
concerning reimbursement of expenses. 
Further provided, that Executive shall also have such rights to
payments, if any, as are provided under the terms of the Deferred Compensation
Plan, the Amended and Restated Life Insurance Agreement entered into by and
between the Employer and Executive and as amended from time to time and such
retirement plans under which Executive participated at the time of his
termination.

 

4

 

(ii)           In
the event that the Executive elects to terminate his employment under this
Agreement for any reason other than a termination in accordance with the
provisions of paragraph (b) (CONSTRUCTIVE DISCHARGE) or (f) (CHANGE IN CONTROL)
of this Section 5, the Employer shall pay the Executive a lump sum amount equal
to eighteen (18) times the sum of (A) the monthly Base Salary then payable to
the Executive, plus (B) one twelfth (1/12) of the base annual deferred
compensation contribution made by the Employer under the Deferred Compensation
Plan for the year prior to the Executive’s termination.  Payment to the Executive will be made within
thirty (30) days of such termination. 
In addition, within thirty (30) days of Executive’s termination of
employment, the Employer shall pay the Executive (a) such Base Salary and
vacation pay (for unused vacation days in accordance with the Employer’s
policies and practices with respect to vacation pay) as shall have accrued and
remains unpaid through the effective date of the termination, (b) Bonuses
previously determined by the Compensation Committee for any prior fiscal
year(s) that remain unpaid, (c) for all accrued and unused sick days, and (d)
reimbursement of previously incurred expenses eligible for reimbursement
pursuant to the Employer’s policies and practices concerning reimbursement of
expenses.  Further provided, that
Executive shall also have such rights to payments, if any, as are provided
under the terms of the Deferred Compensation Plan, the Amended and Restated
Life Insurance Agreement entered into by and between the Employer and Executive
and as amended from time to time and such retirement plans under which
Executive participated at the time of his termination.

 

(iii)          Unless
a Change in Control shall have occurred, if the Employer is not in compliance
with its minimum capital requirements or if the payments required under
subparagraph (i) or (ii) above would cause the Employer’s capital to be reduced
below its minimum capital requirements, such payments shall be deferred until
such time as the Employer is in capital compliance.

 

(b)           CONSTRUCTIVE
DISCHARGE.  If at any time during
the term of this Agreement, except in connection with a termination pursuant to
paragraph (c) (TERMINATION FOR CAUSE) of this Section 5, the Executive is
Constructively Discharged (as hereinafter defined) then the Executive shall
have the right, by written notice to the Employer within sixty (60) days of
such Constructive Discharge, to terminate his services hereunder, effective as
of the thirtieth (30th) day after such notice, and the Executive
shall have no rights or obligations under this Agreement other than as provided
in Sections 4 and 7 hereof.  The
Executive shall in such event be entitled to a lump sum payment of compensation
and benefits and continuation of all plans and benefits as if such termination
of his employment was pursuant to subparagraph (a)(i) of this Section 5.

 

(i)            For
purposes of this Agreement, the Executive shall be “Constructively Discharged” upon the occurrence of any one of
the following events:

 

(A)          The Executive is not re-elected or is
removed from the positions with the Employer or any affiliate set forth in
Section 1 hereof, other than as a result of the Executive’s election or
appointment to positions of equal or superior scope and responsibility; or

 

(B)           The Executive shall fail to be vested
by the Employer with the powers and authority of his appointed office; or

 

5

 

(C)           The Employer changes the primary
employment location of the Executive to a place that is more than thirty (30)
miles from the primary employment location as of the Effective Date of this
Agreement; or

 

(D)          The Employer otherwise commits a
material breach of its obligations under this Agreement.

 

(c)           TERMINATION
FOR CAUSE.  The Executive’s employment
hereunder may be terminated for cause as hereinafter defined.  “Cause”
shall mean:  (i) the Executive’s death;
(ii) a material violation by the Executive of any applicable material law or
regulation respecting the business of the Employer; (iii) the Executive being
found guilty of a felony or an act of dishonesty in connection with the
performance of his duties as an officer of the Employer, or which disqualifies
the Executive from serving as an officer or director of the Employer; or (iv)
the willful or negligent failure of the Executive to perform his duties
hereunder in any material respect. 
Executive’s employment under this Agreement may be terminated
immediately for any cause except under (iv) above.  The Executive shall be entitled to at least thirty (30) days’
prior written notice of the Employer’s intention to terminate his employment
under (iv) above, specifying the grounds for such termination, a reasonable
opportunity to cure any conduct or act, if curable, alleged as grounds for such
termination, and a reasonable opportunity to present to the Board his position
regarding any dispute relating to the existence of such cause.  Upon Executive’s termination for Cause, the
Employer shall have no obligations to Executive other than payment, within thirty
(30) days, of (A) such Base Salary and vacation pay (for unused vacation days
in accordance with the Employer’s policies and practices with respect to
vacation pay) as shall have accrued and remains unpaid through the effective
date of the termination, (B) Bonuses previously determined by the
Compensation Committee for any prior fiscal year(s) that remain unpaid, (C) all
accrued and unused sick days, and (D) reimbursement for previously incurred
expenses eligible for reimbursement pursuant to the Employer’s policies and
practices concerning reimbursement of expenses.  In addition, Executive shall also have such rights to payments,
if any, as are provided under the terms of the Deferred Compensation Plan, the
Amended and Restated Life Insurance Agreement entered into by and between the
Employer and Executive and as amended from time to time and such retirement
plans under which Executive participated at the time of his termination.

 

(d)           TERMINATION
UPON DEATH.  Upon Executive’s death,
the Employer shall have no obligations to Executive other than payment, within
thirty (30) days, of (i) such Base Salary and vacation pay (for unused vacation
days in accordance with the Employer’s policies and practices with respect to
vacation pay) as shall have accrued and remains unpaid through the effective
date of the termination, (ii) Bonuses previously determined by the Compensation
Committee for any prior fiscal year(s) that remain unpaid, (iii) all accrued
and unused sick days, and (iv) reimbursement for previously incurred
expenses eligible for reimbursement pursuant to the Employer’s policies and
practices concerning reimbursement of expenses.  In addition, Executive shall also have such rights to payments as
are provided under the Deferred Compensation Plan, the Amended and Restated
Life Insurance Agreement entered into by and between the Employer and Executive
and as amended from time to time and such retirement plans under which
Executive participated at the time of his death.  Payment shall be made to such beneficiary as Executive may
designate in writing, or failing such designation, to the executor of his
estate, in full settlement and satisfaction of all claims and demands on behalf
of

 

6

 

the Executive.  Such payments
shall be in full settlement and satisfaction of all payments provided for in
this Agreement.

 

(e)           PAYMENT
UPON TERMINATION FOR DISABILITY. 
The Employer may terminate the Executive’s employment hereunder after
the Executive is determined to be permanently disabled under the Employer
sponsored disability income insurance program or by a physician engaged by the
Employer.  In the event of a dispute
regarding the Executive’s disability, each party shall choose a physician who
together will choose a third physician to make a final determination.  The Executive shall be entitled to the
compensation and benefits provided for under this Agreement for any period
during the term of this Agreement and prior to the establishment of the
Executive’s disability during which the Executive is unable to work due to a
physical or mental infirmity.  In the
event of the termination of the Executive’s employment hereunder due to the
permanent disability of the Executive, the Employer shall continue to pay the
Executive eighty percent (80%) of the Base Salary per month then payable to the
Executive, reduced by any amounts received under the Employer sponsored
disability income insurance program, and shall continue to provide coverage for
the Executive under the health and life insurance programs maintained by the
Employer until the earlier of the date the Executive returns to full-time
employment, either with the Employer or another employer, or Executive’s
death.  In addition, the Employer shall
pay the Executive, within thirty (30) days of termination, (i) such Base Salary
and vacation pay (for unused vacation days in accordance with the Employer’s
policies and practices with respect to vacation pay) as shall have accrued and
remains unpaid through the effective date of the termination, (ii) Bonuses
previously determined by the Compensation Committee for any prior fiscal
year(s) that remain unpaid, (iii) for all accrued and unused sick days, and
(iv) reimbursement of previously incurred expenses eligible for reimbursement pursuant
to the Employer’s policies and practices concerning reimbursement of
expenses.  Further provided, that
Executive shall also have such rights to payments, if any, as are provided
under the terms of the Deferred Compensation Plan, the Amended and Restated
Life Insurance Agreement entered into by and between the Employer and Executive
and as amended from time to time and such retirement plans under which
Executive participated at the time of his termination.  Notwithstanding anything contained in this Agreement
to the contrary, until the date specified in a notice of termination relating
to the Executive’s disability, the Executive shall be entitled to return to his
positions with the Employer as set forth in this Agreement in which event no
disability of the Executive will be deemed to have occurred.  Notwithstanding any other provision of this
Agreement, in the event of the termination of the Executive’s employment under
this Agreement for any reason, if permitted by law, the Executive may elect to
have any disability income insurance policy maintained by the Employer on his
behalf transferred to him, and he shall assume all obligations thereunder.

 

(f)            TERMINATION
UPON CHANGE IN CONTROL.

 

(i)            In
the event of a Change in Control and the termination of the Executive’s
employment under either (A) or (B) below, the Executive shall be entitled to a
lump sum payment equal to three (3) times the sum of the following:  (w) his annual Base Salary then payable plus
(x) the average of his most recent three (3) years’ annual Deferred
Compensation Plan contributions plus (y) the average of his most recent three
(3) years’ employee stock ownership plan contributions plus (z) the average of
his most recent three (3) years’ annual Bonuses.  In the event of a Change in Control, the Employer shall also
provide the Executive

 

7

 

with the benefits contemplated in subparagraph (ii) of paragraph (h)
(CERTAIN INSURANCE BENEFITS) of this Section 5 below and, upon termination of
the Executive’s employment under either (A) or (B) below, shall pay the
Executive, within thirty (30) days of termination: (a) such Base Salary and
vacation pay (for unused vacation days in accordance with the Employer’s
policies and practices with respect to vacation pay) as shall have accrued and
remains unpaid through the effective date of the termination, (b) Bonuses
previously determined by the Compensation Committee for any prior fiscal
year(s) that remain unpaid, (c) for all accrued and unused sick days, and (d)
reimbursement of previously incurred expenses eligible for reimbursement
pursuant to the Employer’s policies on reimbursement of expenses.  Further provided, that Executive shall also
have such rights to payments, if any, as are provided under the terms of the
Deferred Compensation Plan, the Amended and Restated Life Insurance Agreement
entered into by and between the Employer and Executive and as amended from time
to time and such retirement plans under which Executive participated at the
time of his termination.  If the
Executive’s employment has terminated prior to the Change in Control in
accordance with the terms of this Agreement and the Employer has made all
required payments under any other applicable provision of this Section 5, then
no amount shall be paid under this paragraph (f).  Either of the following shall constitute termination under this
paragraph:

 

(A)          The Executive terminates his
employment by a written notice to that effect delivered to the Employer within
twenty-four (24) months after the Change in Control.

 

(B)           Executive’s employment under this
Agreement is terminated by the Employer either in contemplation of or after the
Change in Control.

 

(ii)           Notwithstanding
the preceding paragraphs of this Section 5 and except as provided in this
subparagraph (ii), in the event that it shall be determined that any payment,
benefit or other entitlement under this Agreement and any other plan or
arrangement of the Employer or the Bank (the “Total
Payments”) would constitute an “Excess Parachute Payment” within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and thereby be subject to the excise
tax imposed by Section 4999 of the Code or any similar successor provision or
any interest or penalties with respect to such excise tax (collectively the “Excise Tax”), then, except in the case of a
de Minimus Excess Amount (as defined below), the Executive shall be entitled to
receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by the Executive of
all taxes imposed upon the Gross-Up Payment (including any federal, state and
local income, payroll and excise taxes and any interest or penalties imposed
with respect to such taxes), the Executive retains an amount of the Gross Up Payment
equal to the Excise Tax imposed upon the Total Payments (not including any
Gross-Up Payment).  If, at a later date,
the Internal Revenue Service assesses a deficiency against the Executive for
the Excise Tax which is greater than that which was determined at the time such
amounts were paid, then the Employer shall pay to the Executive the amount of
such unreimbursed Excise Tax plus any interest, penalties and reasonable
professional fees or expenses incurred by the Executive as a result of such assessment,
including all such taxes with respect to any such additional amount.  The highest marginal tax rate applicable to
individuals at the time of the payment of such amounts will be used for
purposes of determining the federal and state income and other taxes with
respect thereto.  The Employer shall
withhold from any amounts paid under this Agreement the amount of any Excise
Tax or other federal, state or local

 

8

 

taxes then required to be withheld. 
Computations of the amount of the Gross-Up Payment paid under this
subparagraph shall be conclusively made by the Employer’s independent
accountants, in consultation, if necessary, with the Employer’s independent
legal counsel.  If, after the Executive
receives any Gross-Up Payment or other amount pursuant to this subparagraph,
the Executive receives any refund with respect to the Excise Tax, the Executive
shall promptly pay the Employer the amount of such refund within ten (10) days
of receipt by the Executive. 
Notwithstanding the foregoing, in the event that the amount by which the
present value of the Total Payments which would constitute an Excess Parachute
Payment is less than two percent (2%) of the Total Payments, then such Excess
Parachute Payment shall be deemed to be a “de
Minimus Excess Amount” and the Executive shall not be entitled to a
Gross-Up Payment.  In such a case, the
Total Payments will be reduced to an amount (the “Non-Triggering Amount”), the value of which is one dollar
($1.00) less than an amount equal to three (3) times Executive’s “base amount,”
as determined in accordance with Code Section 280G; provided that such
reduction shall not be made unless the Non-Triggering Amount would be greater
than the aggregate value of the Total Payments (without such reduction) minus
the amount of Excise Tax required to be paid by Executive thereon.  The allocation of the reduction required by
the preceding sentence shall be determined by the Executive.

 

(iii)          For
purposes of this Agreement, the term “Change
in Control” shall mean any of the following:

 

(A)          The consummation of the acquisition by
any person (as such term is defined in Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the “1934
Act”)) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of fifty percent (50%) or more of the combined
voting power of the then outstanding voting securities of the Employer or the
Bank; or

 

(B)           The individuals who, as of the date
hereof, are members of the Board of the Employer or the Bank cease for any
reason to constitute a majority of the Board, unless the election, or
nomination for election by the shareholders, of any new director was approved
by a vote of a majority of the Board, and such new director shall, for purposes
of this Agreement, be considered as a member of the Board; or

 

(C)           Approval by shareholders of the
Employer or the Bank of:  (1) a merger
or consolidation if the shareholders immediately before such merger or
consolidation do not, as a result of such merger or consolidation, own,
directly or indirectly, more than fifty percent (50%) of the combined voting
power of the then outstanding voting securities of the entity resulting from
such merger or consolidation in substantially the same proportion as their
ownership of the combined voting power of the voting securities of the Employer
or the Bank outstanding immediately before such merger or consolidation; or (2)
a complete liquidation or dissolution or an agreement for the sale or other
disposition of all or substantially all of the assets of the Employer or the
Bank.

 

9

 

Notwithstanding the foregoing, a Change in Control
shall not be deemed to occur solely because fifty percent (50%) or more of the
combined voting power of the then outstanding securities of the Employer or the
Bank is acquired by:  (1) a trustee or
other fiduciary holding securities under one or more employee benefit plans
maintained for employees of the Employer or the Bank; or (2) any corporation
which, immediately prior to such acquisition, is owned directly or indirectly
by the shareholders in the same proportion as their ownership of stock of the
Employer or the Bank immediately prior to such acquisition.

 

(g)           REGULATORY
SUSPENSION AND TERMINATION.

 

(i)            If
the Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Employer’s affairs by a notice served under
Section 8(e)(3) (12 U.S.C. Section 1818(e)(3)) or 8(g) (12 U.S.C. Section
1818(g)) of the Federal Deposit Insurance Act, as amended, the Employer’s
obligations under this contract shall be suspended as of the date of service,
unless stayed by appropriate proceedings. 
If the charges in the notice are dismissed, the Employer shall (A) pay
the Executive all of the compensation withheld while the contract obligations
were suspended and (B) reinstate any of the obligations which were suspended.

 

(ii)           If
the Executive is removed and/or permanently prohibited from participating in
the conduct of the Employer’s affairs by an order issued under Section 8(e) (12
U.S.C. Section 1818(e)) or 8(g) (12 U.S.C. Section 1818(g)) of the Federal
Deposit Insurance Act, as amended, all obligations of the Employer under this
contract shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.

 

(iii)          If
the Employer is in default as defined in Section 3(x) (12 U.S.C. Section
1813(x)(1)) of the Federal Deposit Insurance Act, as amended, all obligations
of the Employer under this contract shall terminate as of the date of default,
but this paragraph shall not affect any vested rights of the contracting
parties.

 

(iv)          All
obligations of the Employer under this contract shall be terminated, except to
the extent determined that continuation of the contract is necessary for the
continued operation of the institution by the Federal Deposit Insurance
Corporation (the “FDIC”), at the
time the FDIC enters into an agreement to provide assistance to or on behalf of
the Employer under the authority contained in Section 13(c) (12 U.S.C. Section
1823(c)) of the Federal Deposit Insurance Act, as amended, or when the Employer
is determined by the FDIC to be in an unsafe or unsound condition.  Any rights of the parties that have already
vested, however, shall not be affected by such action.

 

(v)           Any
payments made to the Executive pursuant to this Agreement, or otherwise, are
subject to and conditioned upon their compliance with Section 18(k) (12 U.S.C.
Section 1828(k)) of the Federal Deposit Insurance Act as amended, and any
regulations promulgated thereunder.

 

(h)           CERTAIN
INSURANCE BENEFITS.

 

(i)            In
the event of the termination of Executive’s employment under this Agreement due
to the retirement of the Executive at or after the attainment of age sixty-two
(62),

 

10

 

the Employer shall continue to provide the following benefits to the
Executive, at the expense of the Employer, until the Executive’s death: (A)
continuing coverage for the Executive and Executive’s Spouse under Employer’s
health, medical, hospitalization and life insurance programs (including dental,
vision and prescription coverage, if provided immediately prior to the
termination); and (B) long term care insurance in accordance with paragraph (f)
(LONG TERM CARE INSURANCE) of Section 3 above including making all required
payments relating to such insurance coverage.

 

(ii)           After
the occurrence of a Change in Control, the Employer shall continue to provide
the following benefits to the Executive, at the expense of the Employer, until
the Executive’s death: (A) continuing coverage that is equivalent to the
coverage provided under Employer’s health, medical, hospitalization and life
insurance programs (including dental, vision and prescription coverage, if
provided immediately prior to the termination) maintained by the Employer at
the time of the Change in Control; and (B) long term care insurance in
accordance with paragraph (f) (LONG TERM CARE INSURANCE) of Section 3 above
including making all required payments relating to such insurance coverage.

 

(iii)          In
the event of the termination of Executive’s employment under this Agreement
other than as contemplated above in this paragraph (h) or pursuant to paragraph
(c) (TERMINATION FOR CAUSE) above, at the election of the Executive (including
the estate of the Executive) and the Executive’s Spouse and provided such
action is not prohibited by the policy pursuant to which the Executive receives
the benefit contemplated in paragraph (f) (LONG TERM CARE INSURANCE) of Section
3 above, the Employer shall take all actions necessary including, but not
limited to, a transfer and assignment of its interests in the long term health
insurance provided to the Executive pursuant to paragraph (f) (LONG TERM CARE
INSURANCE) of Section 3, above in order to facilitate the ability of the
Executive and the Executive’s Spouse to continue to maintain the long term
health insurance at no additional cost to the Employer.

 

6.             INTEREST
IN ASSETS.  Neither the Executive nor
his estate shall acquire hereunder any rights in funds or assets of the
Employer, otherwise than by and through the actual payment of amounts payable
hereunder; nor shall the Executive or his estate have any power to transfer,
assign, anticipate, hypothecate or otherwise encumber in advance any of said
payments; nor shall any of such payments be subject to seizure for the payment
of any debt, judgment, alimony, separate maintenance or be transferable by operation
of law in the event of bankruptcy, insolvency or otherwise of the Executive.

 

7.             INDEMNIFICATION.

 

(a)           INSURANCE.  The Employer shall provide the Executive
(including his heirs, personal representatives, executors and administrators)
for the term of this Agreement with coverage under a standard directors’ and
officers’ liability insurance policy at its expense.

 

(b)           INDEMNIFICATION
UNDER STATE LAW.  In addition to the
insurance coverage provided for in paragraph (a) of this Section 7, the
Employer shall hold harmless and indemnify the Executive (and his heirs,
executors and administrators) to the fullest extent permitted under applicable
law against all expenses and liabilities reasonably incurred by him in
connection with or arising out of any action, suit or proceeding in which he
may be involved by reason of his

 

11

 

having been an officer of the Employer (whether or not he continues to
be an officer at the time of incurring such expenses or liabilities), such
expenses and liabilities to include, but not be limited to, judgments, court
costs and attorneys’ fees and the cost of reasonable settlements.

 

(c)           ADVANCEMENT
OF EXPENSES.  In the event the
Executive becomes a party, or is threatened to be made a party, to any action,
suit or proceeding for which the Employer has agreed to provide insurance
coverage or indemnification under this Section 7, the Employer shall, to the
full extent permitted under applicable law, advance all expenses (including
reasonable attorneys’ fees), judgments, fines and amounts paid in settlement
(collectively “Expenses”) incurred
by the Executive in connection with the investigation, defense, settlement, or
appeal of any threatened, pending or completed action, suit or proceeding,
subject to receipt by the Employer of a written undertaking from the
Executive:  (i) to reimburse the
Employer for all Expenses actually paid by the Employer to or on behalf of the
Executive in the event it shall be ultimately determined that the Executive is
not entitled to indemnification by the Employer for such Expenses; and (ii) to
assign to the Employer all rights of the Executive to indemnification, under
any policy of directors’ and officers’ liability insurance or otherwise, to the
extent of the amount of Expenses actually paid by the Employer to or on behalf
of the Executive.

 

8.             GENERAL
PROVISIONS.

 

(a)           SUCCESSORS.  This Agreement is personal to the Executive
and shall not be assignable by the Executive other than by will or the laws of
descent and distribution.  This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
designated beneficiary, or if none, Executive’s estate.  This Agreement shall be binding upon and
inure to the benefit of the Employer and its successors, and any successor of
the Employer shall be deemed the “Employer” hereunder.  The Employer shall require any successor to
all or substantially all of the business and/or assets of the Employer, whether
directly or indirectly, by purchase, merger, consolidation, acquisition of
stock, other business combination, or otherwise, by a written agreement in form
and substance satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent as the Employer
would be required to perform if no such succession had taken place.

 

(b)           ENTIRE
AGREEMENT; MODIFICATIONS.  This
Agreement, along with the Amended and Restated Life Insurance Agreement and the
Participation Agreement under the Deferred Compensation Plan, constitutes the
entire agreement between the parties respecting the subject matter hereof, and
supersedes the 1997 Employment Agreement and all prior negotiations,
undertakings, agreements and arrangements with respect hereto, whether written
or oral. Except as otherwise explicitly provided herein, this Agreement may not
be amended or modified except by written agreement signed by the Executive and
the Employer.

 

(c)           ENFORCEMENT
AND GOVERNING LAW.  The provisions
of this Agreement shall be regarded as divisible and separate; if any of said
provisions should be declared invalid or unenforceable by a court of competent
jurisdiction, the validity and enforceability of the remaining provisions shall
not be affected thereby.  This Agreement
shall be construed and the legal relations of the parties hereto shall be
determined in accordance with the laws of the State of Illinois without
reference to the law regarding conflicts of law.

 

12

 

(d)           ARBITRATION.  Any dispute or controversy arising under or
in connection with this Agreement or the Executive’s employment by the Employer
shall be settled exclusively by arbitration, conducted by a single arbitrator
sitting in a location selected by the Executive within fifty (50) miles of the
main office of the Employer, in accordance with the rules of the American
Arbitration Association (the “AAA”)
then in effect.  The arbitrator shall be
selected by the parties from a list of arbitrators provided by the AAA,
provided that no arbitrator shall be related to or affiliated with either of
the parties.  No later than ten (10)
days after the list of proposed arbitrators is received by the parties, the
parties, or their respective representatives, shall meet at a mutually
convenient location or telephonically. 
At that meeting, the party who sought arbitration shall eliminate one
(1) proposed arbitrator and then the other party shall eliminate one (1)
proposed arbitrator.  The parties shall
continue to eliminate names from the list of proposed arbitrators in this
manner until a single proposed arbitrator remains.  This remaining arbitrator shall arbitrate the dispute.  Each party shall submit, in writing, the
specific requested action or decision it wishes to take, or make, with respect
to the matter in dispute, and the arbitrator shall be obligated to choose one
(1) party’s specific requested action or decision, without being permitted to
effectuate any compromise position. 
Judgment may be entered on the arbitrator’s award in any court having
jurisdiction; provided, however, that the Executive shall be entitled to seek
specific performance of his right to be paid through the date of termination
during the pendency of any dispute or controversy arising under or in
connection with this Agreement.

 

(e)           LEGAL
FEES.  All reasonable legal fees
paid or incurred by the Executive pursuant to any dispute or question of
interpretation relating to this Agreement shall be paid or reimbursed by the
Employer if the Executive is successful on the merits pursuant to a legal
judgment, arbitration or settlement.

 

(f)            SURVIVAL.  The provisions of Sections 4 and 7 shall
survive the termination of this Agreement.

 

(g)           WAIVER.  No waiver by either party at any time of any
breach by the other party of, or compliance with, any condition or provision of
this Agreement to be performed by the other party, shall be deemed a waiver of
any similar or dissimilar provisions or conditions at the same time or any
prior or subsequent time.

 

(h)           NOTICES.  Notices pursuant to this Agreement shall be
in writing and shall be deemed given when received; and, if mailed, shall be
mailed by United States registered or certified mail, return receipt requested,
postage prepaid; and if to the Employer, addressed to the principal headquarters
of the Employer, attention:  Chairman;
or, if to the Executive, to the address set forth below the Executive’s
signature on this Agreement, or to such other address as the party to be
notified shall have given to the other.

 

13

 

IN WITNESS
WHEREOF, the parties have executed this Agreement as of the date first above
written.

 

	
  WEST SUBURBAN BANCORP, INC.

  	
  KEVIN J. ACKER

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/

  	
  Duane Debs

  	
   

  	
  /s/ Kevin J. Acker

  
	
  Name:

  	
  Duane Debs

  	
   

  	
   

  
	
   

  	
  President

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Address)

  

 

14

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