Document:

exv10w1

 

EXHIBIT 10.1

 

 

[EXECUTION COPY]

CREDIT AGREEMENT,

dated as of October 28, 2004

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,

BARCLAYS BANK PLC,

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.,

and

WACHOVIA CAPITAL MARKETS, LLC,

as Co-Lead Arrangers and Joint Bookrunners

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Pages
	ARTICLE I
 DEFINITIONS AND ACCOUNTING TERMS
	 	 	 	 
	SECTION 1.1 Defined Terms
	 	 	1	 
	SECTION 1.2 Use of Defined Terms
	 	 	13	 
	SECTION 1.3 Cross-References
	 	 	13	 
	SECTION 1.4 Accounting and Financial Determinations
	 	 	13	 
	ARTICLE II
THE FACILITY AND BORROWING PROCEDURES
	 	 	 	 
	SECTION 2.1 Facility
	 	 	14	 
	SECTION 2.2 [Intentionally Omitted]
	 	 	14	 
	SECTION 2.3 Reduction of Commitment Amount
	 	 	14	 
	SECTION 2.4 Base Rate Loans and Eurodollar Loans
	 	 	14	 
	SECTION 2.5 Borrowing Procedures for Loans
	 	 	15	 
	SECTION 2.6 Continuation and Conversion Elections
	 	 	15	 
	SECTION 2.7 Funding
	 	 	16	 
	SECTION 2.8 Repayment of Loans; Evidence of Debt
	 	 	16	 
	SECTION 2.9 Addition of Lenders and Increase in Commitment Amount
	 	 	17	 
	ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
	 	 	 	 
	SECTION 3.1 Repayments and Prepayments
	 	 	17	 
	SECTION 3.2 Interest Provisions
	 	 	17	 
	SECTION 3.3 Fees
	 	 	18	 
	ARTICLE IV
CERTAIN EURODOLLAR AND OTHER PROVISIONS
	 	 	 	 
	SECTION 4.1 Eurodollar Lending Unlawful
	 	 	19	 
	SECTION 4.2 Deposits Unavailable or Eurodollar Interest Rate Unascertainable
	 	 	19	 
	SECTION 4.3 Increased Eurodollar Borrowing Costs, etc
	 	 	19	 
	SECTION 4.4 Funding Losses
	 	 	19	 
	SECTION 4.5 Increased Capital Costs
	 	 	20	 
	SECTION 4.6 Taxes
	 	 	20	 
	SECTION 4.7 Special Fees in Respect of Reserve Requirements
	 	 	22	 
	SECTION 4.8 Payments, Computations, etc
	 	 	22	 

-i-

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Pages
	SECTION 4.9 Sharing of Payments
	 	 	23	 
	SECTION 4.10 Replacement of Lender on Account of Increased Costs, Eurodollar Lending
Unlawful, Reserve Requirements, Taxes, Certain Dissents, etc
	 	 	23	 
	SECTION 4.11 Maximum Interest
	 	 	24	 
	ARTICLE V
CONDITIONS
	 	 	 	 
	SECTION 5.1 Effective Date
	 	 	25	 
	SECTION 5.2 All Borrowings
	 	 	26	 
	ARTICLE VI
REPRESENTATIONS AND WARRANTIES
	 	 	 	 
	SECTION 6.1 Organization, etc
	 	 	26	 
	SECTION 6.2 Due Authorization, Non-Contravention, etc
	 	 	27	 
	SECTION 6.3 Government Approval, Regulation, etc
	 	 	27	 
	SECTION 6.4 Validity, etc
	 	 	27	 
	SECTION 6.5 Financial Information
	 	 	27	 
	SECTION 6.6 No Material Adverse Change
	 	 	27	 
	SECTION 6.7 Litigation, Labor Controversies, etc
	 	 	28	 
	SECTION 6.8 Subsidiaries
	 	 	28	 
	SECTION 6.9 Taxes
	 	 	28	 
	SECTION 6.10 Pension and Welfare Plans
	 	 	28	 
	SECTION 6.11 Environmental Warranties and Compliance
	 	 	28	 
	SECTION 6.12 Regulation U
	 	 	28	 
	SECTION 6.13 Accuracy of Information
	 	 	29	 
	SECTION 6.14 Use of Proceeds
	 	 	29	 
	ARTICLE VII
COVENANTS
	 	 	 	 
	SECTION 7.1 Affirmative Covenants
	 	 	29	 
	SECTION 7.2 Negative Covenants
	 	 	32	 
	ARTICLE VIII
EVENTS OF DEFAULT
	 	 	 	 
	SECTION 8.1 Listing of Events of Default
	 	 	36	 

-ii-

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 
	 	 	Pages
	SECTION 8.2 Action if Bankruptcy
	 	 	37	 
	SECTION 8.3 Action if Other Event of Default
	 	 	37	 
	ARTICLE IX
THE AGENTS
	 	 	 	 
	SECTION 9.1 Actions
	 	 	38	 
	SECTION 9.2 Funding Reliance, etc
	 	 	38	 
	SECTION 9.3 Exculpation
	 	 	39	 
	SECTION 9.4 Successor
	 	 	39	 
	SECTION 9.5 Loans by the Agents
	 	 	40	 
	SECTION 9.6 Credit Decisions
	 	 	40	 
	SECTION 9.7 Copies, etc
	 	 	40	 
	ARTICLE X
MISCELLANEOUS PROVISIONS
	 	 	 	 
	SECTION 10.1 Waivers, Amendments, etc
	 	 	40	 
	SECTION 10.2 Notices
	 	 	41	 
	SECTION 10.3 Payment of Costs, Expenses and Taxes
	 	 	42	 
	SECTION 10.4 Indemnification
	 	 	42	 
	SECTION 10.5 Survival
	 	 	43	 
	SECTION 10.6 Severability
	 	 	43	 
	SECTION 10.7 Headings
	 	 	43	 
	SECTION 10.8 Governing Law; Entire Agreement
	 	 	43	 
	SECTION 10.9 Successors and Assigns
	 	 	44	 
	SECTION 10.10 Sale and Transfer of Loans and Commitments;
Participations in Loans and Commitments
	 	 	44	 
	SECTION 10.11 Other Transactions
	 	 	45	 
	SECTION 10.12 Confidentiality
	 	 	45	 
	SECTION 10.13 Forum Selection and Consent to Jurisdiction
	 	 	46	 
	SECTION 10.14 Waiver of Jury Trial
	 	 	47	 
	SECTION 10.15 USA Patriot Act Notice
	 	 	47	 
	SECTION 10.16 NO ORAL AGREEMENTS
	 	 	47	 

-iii-

 

TABLE OF CONTENTS

SCHEDULES AND EXHIBITS

	 	 	 	 	 
	SCHEDULE I

	 	-
	 	Disclosure Schedule
	SCHEDULE II

	 	-
	 	Schedule of Commitments
	SCHEDULE 6.8

	 	-
	 	Subsidiaries
	SCHEDULE 7.2.2

	 	-
	 	Existing Liens
	EXHIBIT 2.5

	 	-
	 	Form of Borrowing Request
	EXHIBIT 2.6

	 	-
	 	Form of Continuation/Conversion Notice
	EXHIBIT 2.8

	 	-
	 	Form of Note
	EXHIBIT 2.9

	 	-
	 	Form of Lender Certificate
	EXHIBIT 5.1.3

	 	-
	 	Form of Opinion of Counsel
	EXHIBIT 10.10

	 	-
	 	Form of Lender Assignment Agreement

-iv-

 

CREDIT AGREEMENT

     THIS CREDIT AGREEMENT, dated as of October 28, 2004 (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 “Administrative Agent”), WACHOVIA BANK, NATIONAL ASSOCIATION, as
syndication agent (in such capacity, together with any successor(s) thereto in
such capacity, the “Syndication Agent”), BARCLAYS BANK PLC, 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):

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

     “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.

     “Agents” means the Administrative Agent, the Syndication Agent, and the
Co-Documentation Agents, together with any successors in any such capacities.

     “Agreement” means, on any date, this 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 Administrative 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
	 	 	10.0	 
	Level II
	 	 	12.5	 
	Level III
	 	 	15.0	 
	Level IV
	 	 	20.0	 
	Level V
	 	 	25.0	 

Changes in the Applicable Facility Fee Rate will occur automatically without
prior notice. The Administrative 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	 	Utilization less than	 	Utilization greater
	Level
	 	or equal to 50%
	 	than 50%

	Level I
	 	 	30.0	 	 	 	42.5	 
	Level II
	 	 	37.5	 	 	 	50.0	 
	Level III
	 	 	45.0	 	 	 	57.5	 
	Level IV
	 	 	67.5	 	 	 	80.0	 
	Level V
	 	 	100.0	 	 	 	112.5	 

Changes in the Applicable Margin will occur automatically without prior notice.
The Administrative 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 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

2

 

below under the “Applicable Rating Level” opposite the midpoint (rounded
to the nearest lower rating) between the two ratings of “Moody’s” or “S&P”.

	 	 	 	 	 
	Applicable Rating Level
	 	Moody’s
	 	S&P

	Level I

	 	3A3
	 	3A-
	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) “3” 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.

     “Arrangers” means J.P. Morgan Securities Inc. and Wachovia Capital
Markets, LLC, in their capacity as co-lead arrangers and joint bookrunners.

     “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 Administrative 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 by JPMorgan at its Domestic Office as its base
rate for Dollar loans; and (b) the Federal Funds

3

 

Rate most recently determined by the Administrative 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
Administrative 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 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, increased or adjusted from time to time in accordance
with this Agreement, including Section 2.3 and Section 2.9.

     “Commitment Amount” means, on any date, $400,000,000, as such amount may
be reduced, increased or adjusted from time to time in accordance with this
Agreement, including Section 2.3 and Section 2.9.

     “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 Administrative 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.

     “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.

5

 

     “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
Administrative 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 Administrative
Agent from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two 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 Administrative 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

6

 

     “Event of Default” is defined in Section 8.1.

     “Existing Credit Facility” means that certain 364-Day Credit Agreement,
dated as of October 30, 2003, 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
Administrative 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 Administrative Agent.

     “Fee Letters” 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.

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

     “Funded Indebtedness” of any Person means Indebtedness of such Person
referred to in clauses (a), (b), (c), (d) and (e) of the definition of
“Indebtedness” in Section 1.1.

     “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 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

7

 

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 7.2.3.

     “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

8

 

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, 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.

9

 

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

     “Lender Certificate” is defined in Section 2.9.

     “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 loans provided for in Section 2.1.1 hereof.

     “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 Letters, 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) October 28, 2009; and

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

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

     (d) 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.

10

 

     “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, 1111 Fannin Street,
10th Floor, Houston, Texas 77002, Attention: Rose Salvacioh.

     “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 and as such
percentage may be adjusted from time to time pursuant to Section 2.9.

     “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.

     “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

11

 

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.

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

     “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.

     “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.

12

 

     “2001 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, restated
or replaced from time to time.

     “2001 Credit Agreement Total Commitment” means the aggregate of all the
“Commitments” (as such term is defined in the 2001 Credit Agreement) under the
2001 Credit Agreement.

     “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 an Unrestricted Subsidiary or which the Borrower has designated
in writing to the Administrative Agent to be an Unrestricted Subsidiary
pursuant to Section 7.1.7, and, in either case, which the Borrower has not
designated to be a Restricted Subsidiary pursuant to Section 7.1.8.

     “USA Patriot Act” means Title III of Pub. L. 107-56 (signed into law
October 26, 2001), as amended, reformed or otherwise modified from time to
time.

     “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 2001 Credit Agreement) under the 2001 Credit Agreement to (ii)
the sum of (X) the then effective Total Commitment plus (Y) the then effective
2001 Credit Agreement Total Commitment.

     “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.

     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

13

 

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 Loans. From time to time on or after the date hereof and
prior to the Maturity Date, each Lender shall make 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 Commitment. Subject to the conditions herein,
any such Loan repaid prior to the Maturity Date may be reborrowed pursuant to
the terms of this Agreement

     SECTION 2.1.2 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]

     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
Administrative 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 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 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.

14

 

     SECTION 2.5 Borrowing Procedures for Loans. The Borrower shall give the
Administrative 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 Base Rate Loans or Eurodollar Loans, as follows:

     SECTION 2.5.1 Base Rate Loans. The Administrative 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 Administrative 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 Administrative 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 Administrative 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 Administrative 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 Administrative 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 Administrative Agent at
the Payment Office, same 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 Administrative 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 Administrative 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

15

 

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, to the Administrative Agent for the account of each
Lender the then unpaid principal amount of each 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.

     (c) The Administrative 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 Administrative 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 Administrative 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 Administrative 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).

16

 

     SECTION 2.9 Addition of Lenders and Increase in Commitment Amount. It is
agreed by the parties hereto that, at any time before the Maturity Date, one or
more financial institutions selected by the Borrower and acceptable to the
Administrative Agent, in the Administrative Agent’s reasonable discretion, may
become a Lender under this Agreement, or any existing Lender may increase its
Commitment, in each case in an amount approved by Borrower, in such financial
institution’s or Lender’s sole discretion by executing and delivering to the
Borrower and the Administrative Agent a certificate substantially in the form
of Exhibit 2.9 hereto (a “Lender Certificate”). Upon receipt and agreement by
the Borrower and the Administrative Agent of any such Lender Certificate, (a)
the aggregate amount of the Commitments of the Lenders (including any Person
that becomes a Lender by delivery of such a Lender Certificate) automatically
without further action by the Borrower, the Administrative Agent or any Lender
shall be increased by the amount indicated in such Lender Certificate (but not
in excess of $200,000,000 in the aggregate for all such increases in the
Commitments pursuant to this Section 2.9) on the effective date set forth in
such Lender Certificate (such increased amount herein the “Increased Commitment
Amount”), (b) Schedule II attached hereto shall be amended to add such
Commitment of such additional Lender or to reflect the increase in the
Commitment of an existing Lender and the Percentages of the Lenders shall be
adjusted accordingly to reflect the additional Lender or in the increase in the
Commitment of an existing Lender, and (c) any such additional Lender shall be
deemed to be a party in all respect to this Agreement and the other Loan
Documents.

ARTICLE III

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

     SECTION 3.1 Repayments and Prepayments. The Borrower shall repay in full
the unpaid principal amount of each 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 Administrative 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.

     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.

17

 

     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 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
Administrative 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 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 Administrative
Agent for its own account and for the account of each Lender and Arranger,
respectively, all fees (including any fees pursuant to Section 2.2.8) pursuant
to (i) that certain fee letter, dated September 7, 2004, between the Borrower,
Administrative Agent and J.P. Morgan Securities Inc., as amended from time to
time and (ii) that certain fee letter, dated September 7, 2004, between the
Borrower, Syndication Agent and Wachovia Capital Markets, LLC, as amended from
time to time (collectively, the “Fee Letters”).

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

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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
Administrative 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 Administrative Agent shall have determined that, by
reason of circumstances affecting the Administrative Agent’s relevant market,
adequate means do not exist for ascertaining the interest rate applicable
hereunder to Eurodollar Borrowings, then, upon notice from the Administrative
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 Administrative 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 Administrative 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

19

 

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 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, then, upon the written notice of such Lender to the Borrower (with a copy
to the Administrative 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 Administrative Agent an
official receipt or other documentation satisfactory to the Administrative
Agent evidencing such payment to such authority; and (c) pay to the
Administrative Agent for the account of the Lenders such additional amount or
amounts as is necessary to ensure that the net amount actually

20

 

received by each Lender will equal the full amount such Lender would have
received had no such withholding or deduction been required.

     If any Taxes are directly asserted against the Administrative Agent or any
Lender with respect to any payment received by the Administrative Agent or such
Lender hereunder, the Administrative 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 Administrative Agent or such
Lender to the extent that such additional amounts shall have been incurred as a
consequence of the Administrative 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 Administrative 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
Administrative 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
Administrative Agent, on or about the first scheduled Payment Date in each
Fiscal Year, one or more (as the Borrower or the Administrative 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 Administrative 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 Administrative 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 Administrative 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

21

 

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 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 Administrative Agent for the
pro rata account of the Lenders entitled to receive such payment. All such
payments required to be made to the Administrative 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 Administrative Agent shall specify from time to time by notice to the
Borrower. Funds received

22

 

after that time shall be deemed to have been received by the
Administrative Agent on the next succeeding Business Day. The Administrative
Agent shall promptly remit in same day funds to each Lender its share, if any,
of such payments received by the Administrative 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 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 Administrative 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

23

 

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 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 Administrative
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 Administrative
Agent or such Lender limiting rates of interest which may be charged or
collected by the Administrative 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 Administrative 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 Administrative 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
Administrative 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 Administrative Agent or such Lender for the use,
forbearance and detention of the Indebtedness of the Borrower to the
Administrative 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 Administrative 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
Administrative 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 Administrative Agent or such Lender if a
varying rate per annum equal to the interest provided pursuant to Section 3.2
had at all times

24

 

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
Administrative 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 Administrative 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 Administrative 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 (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 Administrative 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 Administrative 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 Organic Documents, etc. The Administrative Agent shall have
received copies of the Organic Documents of the Borrower, together with all
amendments thereto, and a certificate of good standing or equivalent document
as to the Borrower, certified by the appropriate governmental officer in its
jurisdiction of incorporation or formation, as well as any other information
required by Section 326 of the USA Patriot Act or necessary for the
Administrative Agent or any Lender to verify the identity of the Borrower as
required by Section 326 of the USA Patriot Act.

     SECTION 5.1.3 Opinion of Counsel. The Administrative Agent shall have
received a favorable opinion, dated the Effective Date and addressed to the
Administrative 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
Administrative Agent shall have received the Fee Letters duly executed by the
Borrower. The Administrative Agent shall also have received for its own
account, or for the account of the Arrangers 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,

25

 

performance or properties of any of the Borrower and its consolidated
Subsidiaries taken as a whole since June 30, 2004, except as disclosed in Item
5.1.5 (“Material Adverse Change”) of the Disclosure Schedule.

     SECTION 5.1.6 Existing Credit Facility. The Administrative 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 Administrative
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 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 Administrative 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 Administrative
Agent and its counsel; the Administrative Agent and its counsel shall have
received all information, approvals, opinions, documents or instruments as the
Administrative Agent or its counsel may reasonably request.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

     In order to induce the Lenders and the Administrative Agent to enter into
this Agreement and to make Loans hereunder, the Borrower represents and
warrants unto the Administrative 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

26

 

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.

     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, 2004 and the related
statements of earnings and cash flow, copies of which have been furnished to
the Administrative 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.

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     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 Administrative 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.

     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.

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     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 Administrative 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.

ARTICLE VII

COVENANTS

     SECTION 7.1 Affirmative Covenants. The Borrower agrees with the
Administrative 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
Administrative 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 Administrative Agent and the Required
Lenders by independent public accountants of recognized national standing;

     (c) as soon as available and in any event 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

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calculations and computations in all respects satisfactory to the
Administrative 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 Material Adverse Effect, notice thereof and copies of all
documentation relating thereto requested by the Administrative 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 Administrative 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.

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     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.

     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 Administrative 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 Administrative Agent thereof and whether such Subsidiary is an
Unrestricted Subsidiary or a Restricted Subsidiary in compliance with
requirements of clauses (i) and (ii) of Section 7.1.8(b).

     (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

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     (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 Administrative Agent
pursuant to Section 7.1.7, 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), (ii) after giving effect to such designation, no Default or Event
of Default would exist, and (iii) in the case of a Subsidiary which is already
classified as a Restricted Subsidiary, the Borrower has obtained the prior
written consent of the Administrative Agent and the Required Lenders. 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
Administrative 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;

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     (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;

     (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;

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     (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.

     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.

     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.

     (a) The Borrower will not permit any of its Restricted Subsidiaries to
contract, create, incur or assume any Indebtedness, except:

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

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     (ii) 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

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

     (b) The Borrower will not incur any Guaranteed Liabilities in respect of
any Funded Indebtedness of any Unrestricted Subsidiary in excess of
$700,000,000 in the aggregate for all such Guaranteed Liabilities.

     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 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.

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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 Sections 7.1.1(d), 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.

     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 Administrative
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.

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     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
and each Restricted Subsidiary hereby expressly authorizes the Administrative
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 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 and each Restricted Subsidiary hereby expressly authorizes the
Administrative 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 Administrative 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

37

 

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
Administrative 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, and (iii) Barclays Bank PLC, 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. Each Lender authorizes the
Administrative 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 Administrative Agent
(with respect to which the Administrative 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 Administrative 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 or the
Co-Documentation Agents have any duties or obligations under this Agreement or
any other Loan Document in connection with their capacity as either the
Syndication Agent or a Co-Documentation Agent, respectively. 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 Administrative Agent shall
have been notified by telephone, confirmed in writing, by any Lender by 5:00
p.m., Central time, on

38

 

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 Administrative Agent may
assume that such Lender has made such amount available to the Administrative
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 Administrative Agent, such Lender and the
Borrower severally agree to repay the Administrative Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from the
date the Administrative Agent made such amount available to the Borrower to the
date such amount is repaid to the Administrative 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 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
Administrative Agent at any time shall resign, the Required Lenders may appoint
another Lender as the successor Administrative Agent which shall thereupon
become the Administrative Agent hereunder. If no successor Administrative
Agent shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent’s giving notice of resignation, then the retiring Administrative Agent
may, on behalf of the Lenders, appoint a successor Administrative 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
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall be entitled to receive from the retiring
Administrative Agent such documents of transfer and assignment as such
successor Administrative Agent may reasonably request, and shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative Agent shall
be discharged from its duties and obligations under this Agreement. After a
retiring Administrative Agent’s resignation hereunder as a Administrative
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 Administrative
Agent under this Agreement, and Section 10.4 (and, with respect to the
Administrative Agent, Section 10.3) shall continue to inure to its benefit.

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

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 an 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 Administrative 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

40

 

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 Administrative 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 Administrative Agent, to:

	 	 	 
	JPMorgan Chase Bank
	Agency Services
	1111 Fannin Street, 10th Floor
	Houston, Texas 77002
	Attention:

	 	Rose Salvacioh
	Telephone No.:

	 	(713) 750-2501
	Facsimile No.:

	 	(713) 427-6307
	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

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	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
Administrative 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
Administrative 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 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
Administrative Agent and the Lenders in connection with the enforcement by the
Lenders or the Administrative Agent of, or the protection of rights under, this
Agreement and each other Loan Document. The Administrative Agent, the other
Agents, the Arrangers 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
Administrative Agent, the other Agents, the Arrangers 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 Administrative 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 Administrative Agent, the other Agents, the Arrangers, 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 Arrangers
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,

42

 

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 Arrangers 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.

     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.

43

 

     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 Administrative 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 consent 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 Administrative
Agent (which consent of the Borrower, if applicable, and the Administrative
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 Administrative Agent, but without
the consent of the Borrower or the Administrative 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 comply, if applicable, with the provisions contained in
the last sentence of Section 4.6 and further, provided, however, that, the
Borrower and the Administrative 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 Administrative Agent by such Lender and such Assignee
Lender, (ii) such Assignee Lender shall have executed and delivered to the
Borrower and the Administrative Agent a Lender Assignment Agreement, accepted
by the Administrative Agent, (iii) such Assignee Lender shall have delivered to
the Administrative Agent an Administrative Questionnaire, and (iii) the
processing fees described below shall have been paid.

     From and after the date that the Administrative 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

44

 

Assignee Lender must also pay a processing fee to the Administrative 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 Administrative
Agent shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and
obligations under this Agreement and 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.

     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 Administrative 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

45

 

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.

     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 ADMINISTRATIVE AGENT, THE LENDERS OR
THE BORROWER SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF TEXAS OR
NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF TEXAS OR THE SOUTHERN
DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE
AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
THE BORROWER, THE ADMINISTRATIVE AGENT, AND EACH
LENDER HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF TEXAS OR
NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF TEXAS OR THE SOUTHERN
DISTRICT OF NEW YORK 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
ADMINISTRATIVE 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 ADMINISTRATIVE 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

46

 

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 ADMINISTRATIVE 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 ADMINISTRATIVE AGENT, THE LENDERS OR
THE BORROWER. THE BORROWER ACKNOWLEDGES AND 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 ADMINISTRATIVE AGENT AND THE
LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH
OTHER LOAN DOCUMENT.

     SECTION 10.15 USA Patriot Act Notice. Each Lender and the
Administrative Agent (for itself and not on behalf of
any Lender) hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act,
it is required to obtain, verify and record
information that identifies the Borrower, which
information includes the name and address of the
Borrower and other information that will allow such
Lender or the Administrative Agent, as applicable, to
identify the Borrower in accordance with the USA
Patriot Act.

     SECTION 10.16 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]

47

 

     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., as the Borrower
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 1

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	JPMORGAN CHASE BANK, individually as a
	

	 	Lender and as the Administrative Agent
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 2

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	WACHOVIA BANK, NATIONAL
	

	 	ASSOCIATION, individually as a Lender and as
	

	 	the Syndication Agent
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 3

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	BARCLAYS BANK PLC, individually as a
	

	 	Lender and as a Co-Documentation Agent
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 4

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	DEUTSCHE BANK AG NEW YORK
	

	 	BRANCH, individually as a Lender and as a Co-
	

	 	Documentation Agent
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 5

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	THE ROYAL BANK OF SCOTLAND PLC,
	

	 	individually as a Lender and as a Co-
	

	 	Documentation Agent
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 6

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	UBS LOAN FINANCE LLC, individually as a
	

	 	Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 7

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	BANK OF AMERICA, N.A., individually as a
	

	 	Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 8

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	BNP PARIBAS, individually as a Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 9

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	THE BANK OF TOKYO-MITSUBISHI, LTD.,
	

	 	individually as a Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 10

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	CITIBANK, N.A., individually as a Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 11

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	SOCIÉTÉ GÉNÉRALE, individually as a Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 12

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	SUMITOMO MITSUI BANKING
	

	 	CORPORATION, individually as a Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 13

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	DNB NOR BANK ASA, individually as a Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 14

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	ABN AMRO BANK N.V., individually as a
	

	 	Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 15

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	BAYERISCHE LANDESBANK, CAYMAN
	

	 	ISLANDS BRANCH, individually as a Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 16

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	CALYON NEW YORK BRANCH, individually
	

	 	as a Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 17

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	COMERICA BANK, individually as a Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 18

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	MORGAN STANLEY BANK, individually as a
	

	 	Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 19

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	SOUTHWEST BANK OF TEXAS, N.A.,
	

	 	individually as a Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 20

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	WELLS FARGO BANK, NA, individually as a
	

	 	Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 21

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

	 	 	 
	

	 	COMPASS BANK, individually as a Lender
	 
	 	 
	

	 	By:

	

	 	Name:
	

	 	Title:

S - 22

[SIGNATURE PAGE TO NOBLE ENERGY, INC.

CREDIT AGREEMENT]

 

 

SCHEDULE I

DISCLOSURE SCHEDULE

[BORROWER TO PROVIDE]

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. provides 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.

Schedule I- Page 1

 

 

SCHEDULE II

SCHEDULE OF COMMITMENTS

	 	 	 	 	 
	NAME OF LENDER
	 	COMMITMENTS

	JPMorgan Chase Bank
	 	$	35,000,000.00	 
	Wachovia Bank, National Association
	 	$	35,000,000.00	 
	Barclays Bank PLC
	 	$	30,000,000.00	 
	Deutsche Bank AG New York Branch
	 	$	30,000,000.00	 
	The Royal Bank of Scotland plc
	 	$	30,000,000.00	 
	UBS Loan Finance LLC
	 	$	30,000,000.00	 
	Bank of America, N.A.
	 	$	20,000,000.00	 
	BNP Paribas
	 	$	20,000,000.00	 
	The Bank of Tokyo-Mitsubishi, Ltd.
	 	$	20,000,000.00	 
	Citibank, N.A.
	 	$	20,000,000.00	 
	Société Générale
	 	$	20,000,000.00	 
	Sumitomo Mitsui Banking Corporation
	 	$	20,000,000.00	 
	DnB NOR Bank ASA
	 	$	10,000,000.00	 
	ABN Amro Bank N.V.
	 	$	10,000,000.00	 
	Bayerische Landesbank, Cayman Islands Branch
	 	$	10,000,000.00	 
	Calyon New York Branch
	 	$	10,000,000.00	 
	Comerica Bank
	 	$	10,000,000.00	 
	Morgan Stanley Bank
	 	$	10,000,000.00	 
	Southwest Bank of Texas, N.A.
	 	$	10,000,000.00	 
	Wells Fargo Bank, NA
	 	$	10,000,000.00	 
	Compass Bank
	 	$	10,000,000.00	 
	TOTAL
	 	$	400,000,000	 
	 
	 	 	
 	 

Schedule II — Page 1

 

 

SCHEDULE 6.8

SUBSIDIARIES

[BORROWER TO UPDATE]

	 	 	 	 	 	 	 
	 	 	State or	 	 	 	Restricted/
	 	 	Jurisdiction of	 	 	 	Unrestricted
	Name
	 	Organization
	 	Ownership %
	 	Subsidiary

	Noble Energy

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Unrestricted
	Marketing, Inc.

	 	 	 	 	 	 
	Noble
Gas Pipeline, Inc.

	 	Delaware
	 	100% owned by Noble Energy
Marketing, Inc.
	 	Unrestricted
	Samedan Oil of

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Restricted
	Canada, Inc.
	 	 	 	 	 	 
	Samedan North Sea,

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Restricted
	Inc.
	 	 	 	 	 	 
	Samedan Oil of

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Restricted
	Indonesia, Inc.
	 	 	 	 	 	 
	Samedan Pipe Line

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Restricted
	Corporation
	 	 	 	 	 	 
	Samedan Royalty

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Restricted
	Corporation
	 	 	 	 	 	 
	Comin 1989

	 	Oklahoma
	 	52.267% general partnership
	 	Restricted
	Partnership

	 	 	 	interest owned by Samedan Royalty

Corporation	 	 
	Samedan of

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Restricted
	Tunisia, Inc.
	 	 	 	 	 	 
	Samedan,
	 	Delaware	 	100% owned by Noble Energy, Inc.	 	Unrestricted
	Mediterranean Sea,

	 	 	 	 	 	 
	Inc.
	 	 	 	 	 	 
	Samedan of North

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Unrestricted
	Africa, Inc.
	 	 	 	 	 	 
	Samedan Vietnam

	 	Cayman
	 	100% owned by Samedan of North
	 	Unrestricted
	Limited

	 	Islands
	 	Africa, Inc.	 	 
	EDC Ireland

	 	Cayman
	 	100% owned by Samedan of North
	 	Unrestricted
	

	 	Islands
	 	Africa, Inc.	 	 
	Noble Energy

	 	Cayman
	 	100% owned by Samedan of North
	 	Unrestricted
	International Ltd.

	 	Islands
	 	Africa, Inc.	 	 

Schedule 6.8 — Page 1

 

 

	 	 	 	 	 	 	 
	 	 	State or	 	 	 	Restricted/
	 	 	Jurisdiction of	 	 	 	Unrestricted
	Name
	 	Organization
	 	Ownership %
	 	Subsidiary

	Noble Energy Hannah

	 	Cayman
	 	100% owned by Samedan of North
	 	Unrestricted
	Ltd.

	 	Islands
	 	Africa, Inc.	 	 
	Noble Energy West

	 	Delaware
	 	100% owned by Samedan of North
	 	Unrestricted
	Africa Ltd.

	 	 	 	Africa, Inc.	 	 
	Machalapower Cia.

	 	Cayman
	 	100% owned by Noble Energy
	 	Unrestricted
	Ltda.

	 	Islands
	 	International Ltd.	 	 
	Noble Energy

	 	Cayman
	 	100% owned by Noble Energy
	 	Unrestricted
	Mediterranean Ltd.

	 	Islands
	 	International Ltd.	 	 
	Samedan Transfer

	 	Cayman
	 	100% owned by Noble Energy
	 	Unrestricted
	Sub

	 	Islands
	 	International Ltd.	 	 
	Temin 1987

	 	Oklahoma
	 	50.35% general partnership
	 	Restricted
	Partnership

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

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Unrestricted
	Development
	 	 	 	 	 	 
	Corporation
	 	 	 	 	 	 
	(Argentina), Inc.
	 	 	 	 	 	 
	Energy

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Unrestricted
	Development
	 	 	 	 	 	 
	Corporation
	 	 	 	 	 	 
	(China), Inc.
	 	 	 	 	 	 
	Energy

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Restricted
	Development
	 	 	 	 	 	 
	Corporation
	 	 	 	 	 	 
	(HIPS), Inc.
	 	 	 	 	 	 
	EDC Ecuador Ltd.

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Unrestricted
	EDC Ecuador

	 	Cayman
	 	100% owned by EDC Ecuador Ltd.
	 	Unrestricted
	Limited

	 	Islands	 	 	 	 
	EDC Australia Ltd.

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Restricted

Schedule 6.8 — Page 2

 

 

	 	 	 	 	 	 	 
	 	 	State or	 	 	 	Restricted/
	 	 	Jurisdiction of	 	 	 	Unrestricted
	Name
	 	Organization
	 	Ownership %
	 	Subsidiary

	EDC Portugal Ltd.

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Restricted
	Gasdel Pipeline

	 	New Jersey
	 	100% owned by Noble Energy, Inc.
	 	Restricted
	System
	 	 	 	 	 	 
	Incorporated
	 	 	 	 	 	 
	Producers Services,

	 	New Jersey
	 	100% owned by Noble Energy, Inc.
	 	Restricted
	Inc.
	 	 	 	 	 	 
	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)

	 	England
	 	100% owned by EDC (UK) Limited
	 	Restricted
	Limited
	 	 	 	 	 	 
	EDC (ISE) Limited

	 	Scotland
	 	100% owned by EDC (Europe) Limited
	 	Restricted
	EDC (Oilex)

	 	England
	 	100% owned by EDC (Europe) Limited
	 	Restricted
	Limited
	 	 	 	 	 	 
	Brabant Oil Limited

	 	England
	 	100% owned by EDC (Europe) Limited
	 	Restricted
	LaTex Resources

	 	Colorado
	 	100% owned by Noble Energy, Inc.
	 	Unrestricted
	Inc.
	 	 	 	 	 	 
	Noble Energy EG

	 	Cayman	 	100% owned by Noble Energy
International Ltd.
	 	Unrestricted
	Ltd.

	 	Islands
	 	 	 	 
	Noble Energy (Louisiana),

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Restricted
	LLC
	 	 	 	 	 	 
	Noble Energy, LLC

	 	Delaware
	 	100% owned by Noble Energy, Inc.
	 	Restricted
	Noble Energy, LP

	 	Delaware
	 	1% GP Interest 99% LP Interest owned by
Noble Energy, LLC
owned by Noble Energy, Inc.,
	 	Restricted

Schedule 6.8 — Page 3

 

 

SCHEDULE 7.2.2

EXISTING LIENS

NONE

Schedule 7.2.2 — Page 1

 

 

EXHIBIT 2.5

BORROWING REQUEST

JPMorgan Chase Bank, as Administrative Agent

Agency Services

1111 Fannin Street, 10th Floor

Houston, Texas 77002

Attention: Rose Salvacioh

Telephone No.: (713) 750-2501

Facsimile No.: (713) 427-6307

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
Credit Agreement, dated as of October 28, 2004 (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 “Administrative 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 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.

Exhibit 2.5-Page 1

 

 

     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 Administrative
Agent. Except to the extent, if any, that prior to the time of the Borrowing
requested hereby the Administrative 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	 	Person to be Paid
	 	Name, Address, etc.
	Transferred
	 	Name
	 	Account No.
	 	of Transferee Lender

	$                    

	 	                   
	 	                   
	 	                                      
	

	 	 	 	 	 	                                      
	

	 	 	 	 	 	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:

Exhibit 2.5-Page 2

 

 

EXHIBIT 2.6

CONTINUATION/CONVERSION NOTICE

JPMorgan Chase Bank, as Administrative Agent

Agency Services

1111 Fannin Street, 10th Floor

Houston, Texas 77002

Attention: Rose Salvacioh

Telephone No.: (713) 750-2501

Facsimile No.: (713) 427-6307

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 Credit Agreement, dated as of October 28, 2004 (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 “Administrative
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 Loans originally made on    , 200   [and $   of the
presently outstanding principal amount of the Loans originally made on
   , 200_],

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

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

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

Exhibit 2.6-Page 1

 

 

     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
Administrative Agent.

Except to the extent, if any, that prior to the time of the continuation or
conversion requested hereby the Administrative 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:

Exhibit 2.6-Page 2

 

 

EXHIBIT 2.8

[FORM OF]

NOTE

	 	 	 
	$           

	 	October 28, 2004
	

	 	 

     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 Credit Agreement, dated as of
October 28, 2004 (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 “Administrative 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:

Exhibit 2.8-Page 1

 

 

LOANS AND PRINCIPAL PAYMENTS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	
	 	 	 	Interest
	 	Amount Of
	 	Unpaid	 	 	 	 
	
	 	Amount of
	 	Period (if
	 	Principal
	 	Principal
	 	 	 	Notation
	Date
	 	Loan Made
	 	Applicable)
	 	Repaid
	 	Balance
	 	Total
	 	Made By
	
 
	 	
 
	 	
 
	 	
 
	 	
 
	 	
 
	 	
 

Exhibit 2.8-Page 2

 

 

EXHIBIT 2.9

FORM OF LENDER CERTIFICATE

________, 200___

To: JP MORGAN CHASE BANK,

      as Administrative Agent

     Reference is made to that certain Credit Agreement, dated as of October
28, 2004 (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
“Administrative 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.

[Language for Existing Lender]

[ Please be advised that the undersigned has agreed to increase effective
   , 200   its Commitment under the Credit Agreement from
$   to $   and (b) that it shall continue to be a party
in all respect to the Credit Agreement and the other Loan Documents.]

[Language for New Lender]

[ Please be advised that the undersigned has agreed effective    ,
200   (a) to become a Lender under the Credit Agreement with a Commitment of
$   and (b) that it shall be deemed to be a party in all respect to
the Credit Agreement and the other Loan Documents.]

	 	 	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 	 	 
	 	 	

	

	 	By	 	 	 	 
	

	 	 	 	
	 	 
	 	 	Name:
	 	 	Title:

Exhibit 2.9-Page 1

 

 

	 	 	 
	Accepted and Agreed:
	 
	 	 
	JPMORGAN CHASE BANK,
	   as Administrative Agent
	 
	 	 
	By:
	 	 
	

	 	

	Name:
	 	 
	Title:
	 	 
	 
	 	 
	Accepted and Agreed:
	 
	 	 
	NOBLE ENERGY, INC.
	 
	 	 
	By:
	 	 
	

	 	

	Name:
	 	 
	Title:
	 	 

Exhibit 2.9-Page 2

 

 

EXHIBIT 5.1.3

[Opinion of Counsel to the Borrower]

[TO BE ATTACHED AND

BE IN SUBSTANTIALLY THE SAME FORM AS OCTOBER 30, 2003 LEGAL OPINION]

Exhibit 5.1.3-Page 1

 

 

EXHIBIT 10.10

LENDER ASSIGNMENT AGREEMENT

     Reference is made to that certain Credit Agreement, dated as of October
28, 2004 (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
“Administrative Agent”), the other agents party thereto, and certain commercial
lending institutions as are or may become Lenders thereunder. Terms defined in
the Credit Agreement are used herein with the same meanings, receipt of which
is acknowledged by the Assignee. The Standard Terms and Conditions set forth
in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Lender Assignment Agreement as if set forth
herein in full.

     For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions contained in Annex 1 hereto and the terms and conditions of
Section 10.10 of the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (a) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and every
other Loan Document to the extent related to the amount and percentage interest
identified below of all of such outstanding rights and obligations of the
Assignor under the respective facilities identified below and (b) to the extent
permitted to be assigned under applicable law, all claims, suits, causes of
action and any other right of the Assignor (in its capacity as a Lender)
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other Loan Document, or in any way based on or
related to any of the foregoing, including, but not limited to, contract
claims, tort claims, malpractice claims, statutory claims and all other claims
at law or in equity related to the rights and obligations sold and assigned
pursuant to clause (a) above (the rights and obligations sold and assigned
pursuant to clauses (a) and (b), collectively, the “Assigned Interest”). Such
sale and assignment is without recourse to the Assignor and, except as
expressly provided in this Lender Assignment Agreement, without representation
or warranty by the Assignor.

     THIS LENDER ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

	 	 	 	 	 
	(1)

	 	Legal Name of Assignor:
	 	                                                         
	 
	 	 	 	 
	(2)

	 	Legal Name of Assignee:
	 	                                                         
	

	 	 	 	[and is a Lender/Lender Affiliate of
	

	 	 	 	[identify Lender]]1
	 
	 	 	 	 
	(3)

	 	Assignee’s Address for Notices:
	 	                                                         

	1	 	Select as applicable.

Exhibit 10.10-Page 1

 

 

	 	 	 	 	 
	(4)

	 	Borrower:
	 	Noble Energy, Inc., a Delaware corporation
	 
	 	 	 	 
	(5)

	 	Assigned Interest:	 	 

	 	 	 	 	 	 	 	 	 
	Aggregate Amount of	 	Principal Amount of	 	 
	Commitment/Loans for	 	Commitment/Loans	 	Percentage Assigned
	all Lenders
	 	Assigned
	 	of
Commitment/Loans2

	$

	 	 	$	 	 	 	%	 
	$

	 	 	$	 	 	 	%	 
	$

	 	 	$	 	 	 	%	 

	2	 	Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

Exhibit 10.10-Page 2

 

 

Effective Date:    , 200   [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

The terms set forth in this Lender Assignment Agreement are hereby agreed to:

	 	 	 	 	 	 	 
	 	 	ASSIGNOR
	 
	 	 	 	 	 	 
	 	 	[NAME OF ASSIGNOR]
	 
	 	 	 	 	 	 
	

	 	By	 	 	 	 
	

	 	 	 	
	 	 
	 	 	Name:
	 	 	Title:
	 	 	ASSIGNEE
	 
	 	 	 	 	 	 
	 	 	[NAME OF ASSIGNEE]
	 
	 	 	 	 	 	 
	

	 	By	 	 	 	 
	

	 	 	 	
	 	 
	 	 	Name:
	 	 	Title:
	 
	 	 	 	 	 	 
	 	 	Consented to and Accepted:
	 
	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, as
	 	 	Administrative Agent
	 
	 	 	 	 	 	 
	

	 	By	 	 	 	 
	

	 	 	 	
	 	 
	 	 	Name:
	 	 	Title:
	 
	 	 	 	 	 	 
	 	 	Consented to:
	 
	 	 	 	 	 	 
	 	 	NOBLE ENERGY, INC.
	 
	 	 	 	 	 	 
	

	 	By	 	 	 	 
	

	 	 	 	
	 	 
	 	 	Name:
	 	 	Title:

Exhibit 10.10-Page 3

 

 

ANNEX 1 to Lender Assignment Agreement

STANDARD TERMS AND CONDITIONS FOR

LENDER ASSIGNMENT AGREEMENT

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim created by such
Assignor and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Lender Assignment Agreement and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or any other
Loan Document, (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents, (iii) the financial
condition of Borrower or any of its Subsidiaries or Affiliates, or any other
Person obligated with respect to the Credit Agreement or any other Loan
Document or (iv) the performance or observance by Borrower or any of its
Subsidiaries or Affiliates, or any other Person of any of their respective
obligations under the Credit Agreement or any other Loan Document.

1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Lender Assignment Agreement and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements under the Credit Agreement with respect to the
transactions contemplated hereby (subject to receipt of such consents as may be
required under the Credit Agreement), (iii) subject to acceptance and recording
hereof pursuant to Section 10.10 of the Credit Agreement, from and after the
Effective Date, it shall be party to the Credit Agreement and to the other Loan
Documents and be bound by the provisions of the Credit Agreement as a Lender
thereunder and to the other Loan Documents and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, and (iv) it has
received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Sections 7.1.1(a) and (b)
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Lender Assignment Agreement and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Administrative Agent or any other Lender; and (b) agrees that
(i) it will, independently and without reliance on the Administrative Agent,
the Assignor or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents, and (ii) it
will perform in accordance with their terms all of the obligations that by the
terms of the Credit Agreement and the other Loan Documents are required to be
performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts that
have accrued to but excluding the Effective Date and to the Assignee for
amounts that have accrued from and after the Effective Date.

Exhibit 10.10-Page 4

 

 

3. General Provisions. This Lender Assignment Agreement shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and permitted assigns. This Lender Assignment Agreement may be executed in any
number of counterparts, which together shall constitute one instrument.
Delivery of an executed counterpart of a signature page of this Lender
Assignment Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Lender Assignment Agreement.

Exhibit 10.10-Page 5<PAGE>

                                                                     EXHIBIT 4.1

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

Original Issue Date: October ____, 2004
Original Conversion Price (subject to adjustment herein): $_____(1)

                                                                $_______________

                              CONVERTIBLE DEBENTURE
                             DUE OCTOBER ____, 2007

            THIS DEBENTURE is one of a series of duly authorized and issued
Convertible Debentures of Power 3 Medical Products, Inc., a New York
corporation, having a principal place of business at 3400 Research Forest Drive,
Suite B2-3, The Woodlands, Texas 77381 (the "Company"), designated as its
Convertible Debenture, due October ____, 2007 (the "Debentures").

      FOR VALUE RECEIVED, the Company promises to pay to ____________________ or
its registered assigns (the "Holder"), the principal sum of $_______________ on
October ____, 2007 or such earlier date as the Debentures are required or
permitted to be repaid as provided hereunder (the "Maturity Date"). This
Debenture is subject to the following additional provisions:

      Section 1. Definitions. For the purposes hereof, in addition to the terms
defined elsewhere in this Debenture: (a) capitalized terms not otherwise defined
herein have the

------------------------
(1) As to Debentures issued at the First Closing, 75% of the Market Price. As to
Debentures issuable at the Second Closing, the lesser of (a) 75% of the Market
Price and (b) the lesser of (i) 75% of the average of the five consecutive
Closing Prices immediately prior to the Effective Date (as defined in the
Purchase Agreement) and (ii) the Closing Price on the Effective Date.

<PAGE>

meanings given to such terms in the Purchase Agreement, and (b) the following
terms shall have the following meanings:

            "Alternate Consideration" shall have the meaning set forth in
      Section 5(e)(iii).

            "Business Day" means any day except Saturday, Sunday and any day
      which shall be a federal legal holiday in the United States or a day on
      which banking institutions in the State of New York are authorized or
      required by law or other government action to close.

            "Change of Control Transaction" means the occurrence after the date
      hereof of any of (i) an acquisition after the date hereof by an individual
      or legal entity or "group" (as described in Rule 13d-5(b)(1) promulgated
      under the Exchange Act) of effective control (whether through legal or
      beneficial ownership of capital stock of the Company, by contract or
      otherwise) of in excess of 50% of the voting securities of the Company, or
      (ii) a replacement at one time or within a three year period of more than
      one-half of the members of the Company's board of directors which is not
      approved by a majority of those individuals who are members of the board
      of directors on the date hereof (or by those individuals who are serving
      as members of the board of directors on any date whose nomination to the
      board of directors was approved by a majority of the members of the board
      of directors who are members on the date hereof), or (iii) the execution
      by the Company of an agreement to which the Company is a party or by which
      it is bound, providing for any of the events set forth above in (i) or
      (ii).

            "Closing Price" means on any particular date (a) the daily volume
      weighted average price per share of Common Stock on such date (or the
      nearest preceding date) on the Trading Market (as reported by Bloomberg
      L.P. based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m.
      Eastern Time) using the VAP function, or (b) if the Common Stock is not
      then listed or quoted on the Trading Market and if prices for the Common
      Stock are then reported in the "pink sheets" published by the National
      Quotation Bureau Incorporated (or a similar organization or agency
      succeeding to its functions of reporting prices), the most recent bid
      price per share of the Common Stock so reported, or (c) if the shares of
      Common Stock are not then publicly traded the fair market value of a share
      of Common Stock as determined by a nationally-recognized independent
      appraiser selected in good faith by the Purchasers of a majority in
      interest of the principal amount of Debentures then outstanding and
      reasonably acceptable to the Company.

            "Common Stock" means the common stock, par value $0.001 per share,
      of the Company and stock of any other class into which such shares may
      hereafter have been reclassified or changed.

            "Conversion Date" shall have the meaning set forth in Section 4(a)
      hereof.

            "Conversion Price" shall have the meaning set forth in Section 4(b).

                                       2
<PAGE>

            "Conversion Shares" means the shares of Common Stock issuable upon
      conversion of Debentures in accordance with the terms hereof.

            "Dilutive Issuance" shall have the meaning set forth in Section 5(b)
      hereof.

            "Effectiveness Period" shall have the meaning given to such term in
      the Registration Rights Agreement.

            "Equity Conditions" shall mean, during the period in question, (i)
      the Company shall have duly honored all conversions and redemptions
      scheduled to occur or occurring by virtue of one or more Notice of
      Conversions, if any, (ii) all liquidated damages and other amounts owing
      in respect of the Debentures shall have been paid; (iii) there is an
      effective Registration Statement pursuant to which the Holder is permitted
      to utilize the prospectus thereunder to resell all of the shares issuable
      pursuant to the Transaction Documents (and the Company believes, in good
      faith, that such effectiveness will continue uninterrupted for the
      foreseeable future), (iv) the Common Stock is trading on the Trading
      Market and all of the shares issuable pursuant to the Transaction
      Documents are listed for trading on a Trading Market (and the Company
      believes, in good faith, that trading of the Common Stock on a Trading
      Market will continue uninterrupted for the foreseeable future), (v) there
      is a sufficient number of authorized but unissued and otherwise unreserved
      shares of Common Stock for the issuance of all of the shares issuable
      pursuant to the Transaction Documents, (vi) there is then existing no
      Event of Default or event which, with the passage of time or the giving of
      notice, would constitute an Event of Default and (vii) all of the shares
      issued or issuable pursuant to the Transaction Documents in full, ignoring
      for such purposes any conversion or exercise limitation therein, would not
      violate the limitations set forth in Section 4(c) and (ix) no public
      announcement of a pending or proposed Fundamental Transaction, Change of
      Control Transaction or acquisition transaction has occurred that has not
      been consummated.

            "Event of Default" shall have the meaning set forth in Section 8.

            "Exchange Act" means the Securities Exchange Act of 1934, as
      amended.

            "Fundamental Transaction" shall have the meaning set forth in
      Section 5(e)(iii) hereof.

            "Late Fees" shall have the meaning set forth in the second paragraph
      to this Debenture.

            "Mandatory Prepayment Amount" for any Debentures shall equal the sum
      of (i) the greater of: (A) 130% of the principal amount of Debentures to
      be prepaid, or (B) the principal amount of Debentures to be prepaid,
      divided by the Conversion Price on (x) the date the Mandatory Prepayment
      Amount is demanded or otherwise due or (y) the date the Mandatory
      Prepayment Amount is paid in full, whichever is less, multiplied by the
      Closing Price on (x) the date the Mandatory Prepayment Amount is demanded
      or

                                       3
<PAGE>

      otherwise due or (y) the date the Mandatory Prepayment Amount is paid in
      full, whichever is greater, and (ii) all other amounts, costs, expenses
      and liquidated damages due in respect of such Debentures.

            "Original Issue Date" shall mean the date of the first issuance of
      the Debentures regardless of the number of transfers of any Debenture and
      regardless of the number of instruments which may be issued to evidence
      such Debenture.

            "Person" means a corporation, an association, a partnership, a
      limited liability company, organization, a business, an individual, a
      government or political subdivision thereof or a governmental agency.

            "Purchase Agreement" means the Securities Purchase Agreement, dated
      as of October 28, 2004, to which the Company and the original Holder are
      parties, as amended, modified or supplemented from time to time in
      accordance with its terms.

            "Registration Rights Agreement" means the Registration Rights
      Agreement, dated as of the date of the Purchase Agreement, to which the
      Company and the original Holder are parties, as amended, modified or
      supplemented from time to time in accordance with its terms.

            "Registration Statement" means a registration statement meeting the
      requirements set forth in the Registration Rights Agreement, covering
      among other things the resale of the Conversion Shares and naming the
      Holder as a "selling stockholder" thereunder.

            "Securities Act" means the Securities Act of 1933, as amended, and
      the rules and regulations promulgated thereunder.

            "Subsidiary" shall have the meaning given to such term in the
      Purchase Agreement.

            "Trading Day" means a day on which the Common Stock is traded on a
      Trading Market.

            "Trading Market" means the following markets or exchanges on which
      the Common Stock is listed or quoted for trading on the date in question:
      the Nasdaq SmallCap Market, the American Stock Exchange, the New York
      Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board.

            "Transaction Documents" shall have the meaning set forth in the
      Purchase Agreement.

      Section 2. Interest.

            a) No Payment of Interest. Except as set forth herein, the Company
      shall not pay interest to the Holder on this Debenture.

                                       4
<PAGE>

            b) Prepayment. Except as otherwise set forth in this Debenture, the
      Company may not prepay any portion of the principal amount of this
      Debenture without the prior written consent of the Holder.

      Section 3. Registration of Transfers and Exchanges.

            a) Different Denominations. This Debenture is exchangeable for an
      equal aggregate principal amount of Debentures of different authorized
      denominations, as requested by the Holder surrendering the same. No
      service charge will be made for such registration of transfer or exchange.

            b) Investment Representations. This Debenture has been issued
      subject to certain investment representations of the original Holder set
      forth in the Purchase Agreement and may be transferred or exchanged only
      in compliance with the Purchase Agreement and applicable federal and state
      securities laws and regulations.

            c) Reliance on Debenture Register. Prior to due presentment to the
      Company for transfer of this Debenture, the Company and any agent of the
      Company may treat the Person in whose name this Debenture is duly
      registered on the Debenture Register as the owner hereof for the purpose
      of receiving payment as herein provided and for all other purposes,
      whether or not this Debenture is overdue, and neither the Company nor any
      such agent shall be affected by notice to the contrary.

      Section 4. Conversion.

            a) Voluntary Conversion. Subject to the terms hereof and
      restrictions and limitations contained herein, at any time after the
      Original Issue Date until this Debenture is no longer outstanding, this
      Debenture shall be convertible into shares of Common Stock at the option
      of the Holder, in whole or in part at any time and from time to time
      (subject to the limitations on conversion set forth in Section 4(c)
      hereof). The Holder shall effect conversions by delivering to the Company
      the form of Notice of Conversion attached hereto as Annex A (a "Notice of
      Conversion"), specifying therein the principal amount of Debentures to be
      converted and the date on which such conversion is to be effected (a
      "Conversion Date"). If no Conversion Date is specified in a Notice of
      Conversion, the Conversion Date shall be the date that such Notice of
      Conversion is provided hereunder. To effect conversions hereunder, the
      Holder shall not be required to physically surrender Debentures to the
      Company unless the entire principal amount of this Debenture has been so
      converted. Conversions hereunder shall have the effect of lowering the
      outstanding principal amount of this Debenture in an amount equal to the
      applicable conversion. The Holder and the Company shall maintain records
      showing the principal amount converted and the date of such conversions.
      The Company shall deliver any objection to any Notice of Conversion within
      1 Business Day of receipt of such notice. In the event of any dispute or
      discrepancy, the records of the Holder shall be controlling and
      determinative in the absence of manifest error. The Holder and any
      assignee, by acceptance of this Debenture, acknowledge and agree that, by
      reason of the

                                       5
<PAGE>

      provisions of this paragraph, following conversion of a portion of this
      Debenture, the unpaid and unconverted principal amount of this Debenture
      may be less than the amount stated on the face hereof.

            b) Conversion Price. The conversion price in effect on any
      Conversion Date shall be equal to $____(2) (subject to adjustment herein)
      [AS TO THE FIRST CLOSING DEBENTURES ONLY; PROVIDED, HOWEVER, IF THE LESSER
      OF (i) 75% OF THE AVERAGE OF THE 5 CONSECUTIVE CLOSING PRICES IMMEDIATELY
      PRIOR TO THE EFFECTIVE DATE (AS DEFINED IN THE PURCHASE AGREEMENT) AND
      (ii) THE CLOSING PRICE ON THE EFFECTIVE DATE (THE LESSER OF (i) AND (ii)
      BEING REFERRED TO AS THE "EFFECTIVE DATE PRICE") IS LESS THAN THE
      CONVERSION PRICE, THE CONVERSION PRICE SHALL BE REDUCED TO EQUAL THE
      EFFECTIVE DATE PRICE] (the "Conversion Price").

            c) Conversion Limitations; Holder's Restriction on Conversion. The
      Company shall not effect any conversion of this Debenture, and the Holder
      shall not have the right to convert any portion of this Debenture,
      pursuant to Section 4(a) or otherwise, to the extent that after giving
      effect to such conversion, the Holder (together with the Holder's
      affiliates), as set forth on the applicable Notice of Conversion, would
      beneficially own in excess of 4.99% of the number of shares of the Common
      Stock outstanding immediately after giving effect to such conversion. For
      purposes of the foregoing sentence, the number of shares of Common Stock
      beneficially owned by the Holder and its affiliates shall include the
      number of shares of Common Stock issuable upon conversion of this
      Debenture with respect to which the determination of such sentence is
      being made, but shall exclude the number of shares of Common Stock which
      would be issuable upon (A) conversion of the remaining, nonconverted
      portion of this Debenture beneficially owned by the Holder or any of its
      affiliates and (B) exercise or conversion of the unexercised or
      nonconverted portion of any other securities of the Company (including,
      without limitation, any other Debentures or the Warrants) subject to a
      limitation on conversion or exercise analogous to the limitation contained
      herein beneficially owned by the Holder or any of its affiliates. Except
      as set forth in the preceding sentence, for purposes of this Section 4(c),
      beneficial ownership shall be calculated in accordance with Section 13(d)
      of the Exchange Act. To the extent that the limitation contained in this
      section applies, the determination of whether this Debenture is
      convertible (in relation to other securities owned by the Holder) and of
      which portion of this Debenture is convertible shall be in the sole
      discretion of such Holder. To ensure compliance with this restriction, the
      Holder will be deemed to represent to the Company each time it delivers a
      Notice of Conversion that such Notice of Conversion has not violated the
      restrictions set forth in this paragraph and the Company shall have no
      obligation to verify or confirm the accuracy of such determination. For
      purposes of this Section 4(c), in determining the number of outstanding
      shares of Common Stock, the Holder may rely on the number of outstanding
      shares of Common Stock as reflected in (x) the Company's most recent Form
      10-QSB or Form 10-KSB, as the case may be, (y) a

-----------------------
(2) As to the Debentures issued at the First Closing, 75% of the Market Price.
As to Debentures issuable at the Second Closing, the lesser of (a) 75% of the
Market Price and (b) the lesser of (i) 75% of the average of the five
consecutive Closing Prices immediately prior to the Effective Date (as defined
in the Purchase Agreement) and (ii) the Closing Price on the Effective Date.

                                       6
<PAGE>

      more recent public announcement by the Company or (z) any other notice by
      the Company or the Company's Transfer Agent setting forth the number of
      shares of Common Stock outstanding. Upon the written or oral request of
      the Holder, the Company shall within two Trading Days confirm orally and
      in writing to the Holder the number of shares of Common Stock then
      outstanding. In any case, the number of outstanding shares of Common Stock
      shall be determined after giving effect to the conversion or exercise of
      securities of the Company, including this Debenture, by the Holder or its
      affiliates since the date as of which such number of outstanding shares of
      Common Stock was reported.

            d) Mechanics of Conversion

                  i. Conversion Shares Issuable Upon Conversion of Principal
            Amount. The number of shares of Common Stock issuable upon a
            conversion hereunder shall be determined by the quotient obtained by
            dividing (x) the outstanding principal amount of this Debenture to
            be converted by (y) the Conversion Price.

                  ii. Delivery of Certificate Upon Conversion. Not later than
            three Trading Days after any Conversion Date, the Company will
            deliver to the Holder a certificate or certificates representing the
            Conversion Shares which shall be free of restrictive legends and
            trading restrictions (other than those required by the Purchase
            Agreement or applicable law) representing the number of shares of
            Common Stock being acquired upon the conversion of Debentures. The
            Company shall, if available and if allowed under applicable
            securities laws, use its commercially reasonable efforts to deliver
            any certificate or certificates required to be delivered by the
            Company under this Section electronically through the Depository
            Trust Corporation or another established clearing corporation
            performing similar functions.

                  iii. Failure to Deliver Certificates. If such certificate or
            certificates are not delivered to or as directed by the applicable
            Holder by the third Trading Day after a Conversion Date, the Holder
            shall be entitled by written notice to the Company at any time on or
            before its receipt of such certificate or certificates thereafter,
            to rescind such conversion, in which event the Company shall
            immediately return the certificate representing the principal amount
            of Debentures tendered for conversion, if it was delivered to the
            Company by the Holder, and the Holder shall immediately return any
            stock certificates representing Conversion Shares from such
            rescinded conversion to the Company.

                  iv. Partial Liquidated Damages. If the Company fails for any
            reason to deliver to the Holder such certificate or certificates
            pursuant to Section 4(d)(ii) by the third Trading Day after the
            Conversion Date, the Company shall pay to such Holder, in cash, as
            liquidated damages and not as a penalty, for each $1000 of principal
            amount being converted, $10 per Trading Day (increasing to $20 per
            Trading Day after 5 Trading Days after such damages begin to accrue)
            for each

                                       7
<PAGE>

            Trading Day after such third Trading Day until such certificates are
            delivered. The Company's obligations to issue and deliver the
            Conversion Shares upon conversion of this Debenture in accordance
            with the terms hereof are absolute and unconditional, irrespective
            of any action or inaction by the Holder to enforce the same, any
            waiver or consent with respect to any provision hereof, the recovery
            of any judgment against any Person or any action to enforce the
            same, or any setoff, counterclaim, recoupment, limitation or
            termination, or any breach or alleged breach by the Holder or any
            other Person of any obligation to the Company or any violation or
            alleged violation of law by the Holder or any other person, and
            irrespective of any other circumstance which might otherwise limit
            such obligation of the Company to the Holder in connection with the
            issuance of such Conversion Shares; provided, however, such delivery
            shall not operate as a waiver by the Company of any such action the
            Company may have against the Holder. In the event a Holder of this
            Debenture shall elect to convert any or all of the outstanding
            principal amount hereof, the Company may not refuse conversion based
            on any claim that the Holder or any one associated or affiliated
            with the Holder has been engaged in any violation of law, agreement
            or for any other reason, unless, an injunction from a court, on
            notice, restraining and or enjoining conversion of all or part of
            this Debenture shall have been sought and obtained and the Company
            posts a surety bond for the benefit of the Holder in the amount
            equal to the principal amount of this Debenture outstanding, which
            is subject to the injunction, which bond shall remain in effect
            until the completion of arbitration/litigation of the dispute and
            the proceeds of which shall be payable to such Holder to the extent
            it obtains judgment. In the absence of an injunction precluding the
            same, the Company shall issue Conversion Shares or, if applicable,
            cash, upon a properly noticed conversion. Nothing herein shall limit
            a Holder's right to pursue actual damages or declare an Event of
            Default pursuant to Section 8 herein for the Company's failure to
            deliver Conversion Shares within the period specified herein and
            such Holder shall have the right to pursue all remedies available to
            it at law or in equity including, without limitation, a decree of
            specific performance and/or injunctive relief. The exercise of any
            such rights shall not prohibit the Holders from seeking to enforce
            damages pursuant to any other Section hereof or under applicable
            law.

                  v. Failure to Timely Deliver Certificates Upon Conversion. In
            addition to any other rights available to the Holder, if the Company
            fails for any reason to deliver to the Holder such certificate or
            certificates pursuant to Section 4(d)(ii) by the third Trading Day
            after the Conversion Date, and if after such third Trading Day the
            Holder is required by its brokerage firm to purchase, or its
            brokerage firm purchases (in an open market transaction or
            otherwise) Common Stock to deliver in satisfaction of a sale by such
            Holder of the Conversion Shares which the Holder anticipated
            receiving upon such conversion (a "Buy-In"), then the Company shall
            (A) pay in cash to the Holder (in addition to any remedies available
            to or elected by the Holder) the amount by which (x) the Holder's
            total purchase price (including brokerage commissions, if any) for
            the Common Stock

                                       8
<PAGE>

            so purchased exceeds (y) the product of (1) the aggregate number of
            shares of Common Stock that such Holder anticipated receiving from
            the conversion at issue multiplied by (2) the actual sale price of
            the Common Stock at the time of the sale (including brokerage
            commissions, if any) giving rise to such purchase obligation and (B)
            at the option of the Holder, either reissue Debentures in principal
            amount equal to the principal amount of the attempted conversion or
            deliver to the Holder the number of shares of Common Stock that
            would have been issued had the Company timely complied with its
            delivery requirements under Section 4(d)(ii). For example, if the
            Holder purchases Common Stock having a total purchase price of
            $11,000 to cover a Buy-In with respect to an attempted conversion of
            Debentures with respect to which the actual sale price of the
            Conversion Shares at the time of the sale (including brokerage
            commissions, if any) giving rise to such purchase obligation was a
            total of $10,000 under clause (A) of the immediately preceding
            sentence, the Company shall be required to pay the Holder $1,000.
            The Holder shall provide the Company written notice indicating the
            amounts payable to the Holder in respect of the Buy-In.
            Notwithstanding anything contained herein to the contrary, if a
            Holder requires the Company to make payment in respect of a Buy-In
            for the failure to timely deliver certificates hereunder and the
            Company timely pays in full such payment, the Company shall not be
            required to pay such Holder liquidated damages under Section
            4(d)(iv) in respect of the certificates resulting in such Buy-In.

                  vi. Reservation of Shares Issuable Upon Conversion. The
            Company covenants that it will at all times reserve and keep
            available out of its authorized and unissued shares of Common Stock
            solely for the purpose of issuance upon conversion of the Debentures
            free from preemptive rights or any other actual contingent purchase
            rights of persons other than the Holders, not less than such number
            of shares of the Common Stock as shall (subject to any additional
            requirements of the Company as to reservation of such shares set
            forth in the Purchase Agreement) be issuable (taking into account
            the adjustments and restrictions of Section 5) upon the conversion
            of the outstanding principal amount of the Debentures. The Company
            covenants that all shares of Common Stock that shall be so issuable
            shall, upon issue, be duly and validly authorized, issued and fully
            paid, nonassessable and, if the Registration Statement is then
            effective under the Securities Act, registered for public resale in
            accordance with such Registration Statement.

                  vii. Fractional Shares. Upon a conversion hereunder the
            Company shall not be required to issue stock certificates
            representing fractions of shares of the Common Stock, but may if
            otherwise permitted, make a cash payment in respect of any final
            fraction of a share based on the Closing Price at such time. If the
            Company elects not, or is unable, to make such a cash payment, the
            Holder shall be entitled to receive, in lieu of the final fraction
            of a share, one whole share of Common Stock.

                                       9
<PAGE>

                  viii. Transfer Taxes. The issuance of certificates for shares
            of the Common Stock on conversion of the Debentures shall be made
            without charge to the Holders thereof for any documentary stamp or
            similar taxes that may be payable in respect of the issue or
            delivery of such certificate, provided that the Company shall not be
            required to pay any tax that may be payable in respect of any
            transfer involved in the issuance and delivery of any such
            certificate upon conversion in a name other than that of the Holder
            of such Debentures so converted and the Company shall not be
            required to issue or deliver such certificates unless or until the
            person or persons requesting the issuance thereof shall have paid to
            the Company the amount of such tax or shall have established to the
            satisfaction of the Company that such tax has been paid.

      Section 5. Certain Adjustments.

            a) Stock Dividends and Stock Splits. If the Company, at any time
      while the Debentures are outstanding: (A) shall pay a stock dividend or
      otherwise make a distribution or distributions on shares of its Common
      Stock or any other equity or equity equivalent securities payable in
      shares of Common Stock (which, for avoidance of doubt, shall not include
      any shares of Common Stock issued by the Company pursuant to this
      Debenture, the Warrants or the Additional Investment Rights), (B)
      subdivide outstanding shares of Common Stock into a larger number of
      shares, (C) combine (including by way of reverse stock split) outstanding
      shares of Common Stock into a smaller number of shares, or (D) issue by
      reclassification of shares of the Common Stock any shares of capital stock
      of the Company, then the Conversion Price shall be multiplied by a
      fraction of which the numerator shall be the number of shares of Common
      Stock (excluding treasury shares, if any) outstanding before such event
      and of which the denominator shall be the number of shares of Common Stock
      outstanding after such event. Any adjustment made pursuant to this Section
      shall become effective immediately after the record date for the
      determination of stockholders entitled to receive such dividend or
      distribution and shall become effective immediately after the effective
      date in the case of a subdivision, combination or re-classification.

            b) Subsequent Equity Sales. If the Company or any Subsidiary
      thereof, as applicable, at any time while Debentures are outstanding,
      shall offer, sell, grant any option to purchase or offer, sell or grant
      any right to reprice its securities, or otherwise dispose of or issue (or
      announce any offer, sale, grant or any option to purchase or other
      disposition) any Common Stock or Common Stock Equivalents entitling any
      Person to acquire shares of Common Stock, at an effective price per share
      less than the then Conversion Price ("Dilutive Issuance"), as adjusted
      hereunder (if the holder of the Common Stock or Common Stock Equivalents
      so issued shall at any time, whether by operation of purchase price
      adjustments, reset provisions, floating conversion, exercise or exchange
      prices or otherwise, or due to warrants, options or rights per share which
      is issued in connection with such issuance, be entitled to receive shares
      of Common Stock at an effective price per share which is less than the
      Conversion Price, such issuance shall be deemed to have occurred for less
      than the Conversion Price), then the Conversion

                                       10
<PAGE>

      Price shall be reduced to equal the effective conversion, exchange or
      purchase price for such Common Stock or Common Stock Equivalents
      (including any reset provisions thereof) at issue. Such adjustment shall
      be made whenever such Common Stock or Common Stock Equivalents are issued.
      The Company shall notify the Holder in writing, no later than the business
      day following the issuance of any Common Stock or Common Stock Equivalents
      subject to this section, indicating therein the applicable issuance price,
      or of applicable reset price, exchange price, conversion price and other
      pricing terms.

            c) Pro Rata Distributions. If the Company, at any time while
      Debentures are outstanding, shall distribute to all holders of Common
      Stock (and not to Holders) evidences of its indebtedness or assets or
      rights or warrants to subscribe for or purchase any security, then in each
      such case the Conversion Price shall be determined by multiplying such
      Conversion Price in effect immediately prior to the record date fixed for
      determination of stockholders entitled to receive such distribution by a
      fraction of which the denominator shall be the Closing Price determined as
      of the record date mentioned above, and of which the numerator shall be
      such Closing Price on such record date less the then fair market value at
      such record date of the portion of such assets or evidence of indebtedness
      so distributed applicable to one outstanding share of the Common Stock as
      determined by the Board of Directors in good faith. In either case the
      adjustments shall be described in a statement provided to the Holders of
      the portion of assets or evidences of indebtedness so distributed or such
      subscription rights applicable to one share of Common Stock. Such
      adjustment shall be made whenever any such distribution is made and shall
      become effective immediately after the record date mentioned above.

            d) Calculations. All calculations under this Section 5 shall be made
      to the nearest cent or the nearest 1/100th of a share, as the case may be.
      For purposes of this Section 5, the number of shares of Common Stock
      outstanding as of a given date shall be the sum of the number of shares of
      Common Stock (excluding treasury shares, if any) outstanding.

            e) Notice to Holders.

                  i. Adjustment to Conversion Price. Whenever the Conversion
            Price is adjusted pursuant to any of this Section 5, the Company
            shall promptly deliver to each Holder a notice setting forth the
            Conversion Price after such adjustment and setting forth a brief
            statement of the facts requiring such adjustment. If the Company
            issues a variable rate security, despite the prohibition thereon in
            the Purchase Agreement, the Company shall be deemed to have issued
            Common Stock or Common Stock Equivalents at the lowest possible
            conversion or exercise price at which such securities may be
            converted or exercised in the case of a Variable Rate Transaction
            (as defined in the Purchase Agreement), or the lowest possible
            adjustment price in the case of an MFN Transaction (as defined in
            the Purchase Agreement).

                                       11
<PAGE>

                  ii. Notice to Allow Conversion by Holder. If (A) the Company
            shall declare a dividend (or any other distribution) on the Common
            Stock; (B) the Company shall declare a special nonrecurring cash
            dividend on or a redemption of the Common Stock; (C) the Company
            shall authorize the granting to all holders of the Common Stock
            rights or warrants to subscribe for or purchase any shares of
            capital stock of any class or of any rights; (D) the approval of any
            stockholders of the Company shall be required in connection with any
            reclassification of the Common Stock, any consolidation or merger to
            which the Company is a party, any sale or transfer of all or
            substantially all of the assets of the Company, of any compulsory
            share exchange whereby the Common Stock is converted into other
            securities, cash or property; (E) the Company shall authorize the
            voluntary or involuntary dissolution, liquidation or winding up of
            the affairs of the Company; then, in each case, the Company shall
            cause to be filed at each office or agency maintained for the
            purpose of conversion of the Debentures, and shall cause to be
            mailed to the Holders at their last addresses as they shall appear
            upon the stock books of the Company, at least 20 calendar days prior
            to the applicable record or effective date hereinafter specified, a
            notice stating (x) the date on which a record is to be taken for the
            purpose of such dividend, distribution, redemption, rights or
            warrants, or if a record is not to be taken, the date as of which
            the holders of the Common Stock of record to be entitled to such
            dividend, distributions, redemption, rights or warrants are to be
            determined or (y) the date on which such reclassification,
            consolidation, merger, sale, transfer or share exchange is expected
            to become effective or close, and the date as of which it is
            expected that holders of the Common Stock of record shall be
            entitled to exchange their shares of the Common Stock for
            securities, cash or other property deliverable upon such
            reclassification, consolidation, merger, sale, transfer or share
            exchange; provided, that the failure to mail such notice or any
            defect therein or in the mailing thereof shall not affect the
            validity of the corporate action required to be specified in such
            notice. Holders are entitled to convert Debentures during the 20-day
            period commencing the date of such notice to the effective date of
            the event triggering such notice.

                  iii. Fundamental Transaction. If, at any time while this
            Debenture is outstanding, (A) the Company effects any merger or
            consolidation of the Company with or into another Person, (B) the
            Company effects any sale of all or substantially all of its assets
            in one or a series of related transactions, (C) any tender offer or
            exchange offer (whether by the Company or another Person) is
            completed pursuant to which holders of Common Stock are permitted to
            tender or exchange their shares for other securities, cash or
            property, or (D) the Company effects any reclassification of the
            Common Stock or any compulsory share exchange pursuant to which the
            Common Stock is effectively converted into or exchanged for other
            securities, cash or property (in any such case, a "Fundamental
            Transaction"), then upon any subsequent conversion of this
            Debenture, the Holder shall have the right to receive, for each
            Conversion Share that would have been issuable upon such conversion
            absent such Fundamental Transaction, the same

                                       12
<PAGE>

            kind and amount of securities, cash or property as it would have
            been entitled to receive upon the occurrence of such Fundamental
            Transaction if it had been, immediately prior to such Fundamental
            Transaction, the holder of one share of Common Stock (the "Alternate
            Consideration"). For purposes of any such conversion, the
            determination of the Conversion Price shall be appropriately
            adjusted to apply to such Alternate Consideration based on the
            amount of Alternate Consideration issuable in respect of one share
            of Common Stock in such Fundamental Transaction, and the Company
            shall apportion the Conversion Price among the Alternate
            Consideration in a reasonable manner reflecting the relative value
            of any different components of the Alternate Consideration. If
            holders of Common Stock are given any choice as to the securities,
            cash or property to be received in a Fundamental Transaction, then
            the Holder shall be given the same choice as to the Alternate
            Consideration it receives upon any conversion of this Debenture
            following such Fundamental Transaction. To the extent necessary to
            effectuate the foregoing provisions, any successor to the Company or
            surviving entity in such Fundamental Transaction shall issue to the
            Holder a new debenture consistent with the foregoing provisions and
            evidencing the Holder's right to convert such debenture into
            Alternate Consideration. The terms of any agreement pursuant to
            which a Fundamental Transaction is effected shall include terms
            requiring any such successor or surviving entity to comply with the
            provisions of this paragraph (iii) and insuring that this Debenture
            (or any such replacement security) will be similarly adjusted upon
            any subsequent transaction analogous to a Fundamental Transaction.

                  iv. Exempt Issuance. Notwithstanding the foregoing, no
            adjustment will be made under this Section 5 in respect of an Exempt
            Issuance.

      Section 6. RESERVED.

      Section 7. Negative Covenants. So long as any portion of this Debenture is
outstanding, the Company will not and will not permit any of its Subsidiaries to
directly or indirectly take any of the following actions unless approved by the
holder(s) of a two-thirds majority of the then-outstanding principal amount of
all Debentures:

            a) enter into, create, incur, assume or suffer to exist any
      indebtedness or liens of any kind, on or with respect to any of its
      property or assets now owned or hereafter acquired or any interest therein
      or any income or profits therefrom that is senior to, in any respect, the
      Company's obligations under the Debentures except for Permitted
      Indebtedness and Permitted Liens described below;

            b) amend its certificate of incorporation, bylaws or other charter
      documents so as to adversely affect any rights of the Holder (it being
      agreed by the Holder that the proposed amendments to the Company's Series
      A Preferred Stock and the designation of the proposed Series B Preferred
      Stock shall not be considered as adversely affecting any rights of the
      Holder);

                                       13
<PAGE>

            c) repay, repurchase or offer to repay, repurchase or otherwise
      acquire more than a de minimis number of shares of its Common Stock or
      other equity securities other than as to the Conversion Shares to the
      extent permitted or required under the Transaction Documents or as
      otherwise permitted by the Transaction Documents; or

            d) enter into any agreement with respect to any of the foregoing.

As used herein, "Permitted Indebtedness" shall mean:

                  i. indebtedness existing as of the date of the Purchase
            Agreement;

                  ii. indebtedness, including capitalized lease obligations,
            incurred by the Company or any subsidiary for the purpose of
            financing all or any part of the purchase price of property, plant,
            equipment or other assets (tangible or intangible) used in the
            business of the Company or any subsidiary; and

                  iii. funded indebtedness from a non-affiliated lending
            institution or other third party in an amount not to exceed
            $5,000,000.

As used herein, "Permitted Liens" shall mean:

                  i. liens for taxes, assessments for governmental charges or
            claims either not delinquent or contested in good faith by
            appropriate proceedings;

                  ii. statutory liens of landlords, carriers, warehousemen,
            mechanics, suppliers, materialmen and other liens imposed by law
            incurred in the ordinary course of business for sums not yet
            delinquent or being contested in good faith;

                  iii. liens incurred or deposits made in the ordinary course of
            business in connection with workers' compensation, unemployment
            insurance and other types of social security, or to secure the
            performance of statutory obligations, surety and appeal bonds and
            other similar obligations;

                  iv. liens securing any Permitted Indebtedness; and

                  v. liens arising from filing Uniform Commercial Code financing
            statements regarding leases.

      Section 8. Events of Default.

            a) "Event of Default", wherever used herein, means any one of the
      following events (whatever the reason and whether it shall be voluntary or
      involuntary or effected by operation of law or pursuant to any judgment,
      decree or order of any court, or any order, rule or regulation of any
      administrative or governmental body):

                        i.    any default in the payment of the principal amount
                              of any Debenture, or liquidated damages in respect
                              of, any Debenture, in each case free of any claim
                              of subordination, as and when the same shall
                              become due and payable (whether on a Conversion

                                       14
<PAGE>

                              Date or the Maturity Date or by acceleration or
                              otherwise) which default, is not cured, within 3
                              Trading Days;

                        ii.   the Company shall fail to observe or perform any
                              other covenant or agreement contained in this
                              Debenture or any of the other Transaction
                              Documents (other than a breach by the Company of
                              its obligations to deliver shares of Common Stock
                              to the Holder upon conversion which breach is
                              addressed in clause (xii) below) which failure is
                              not cured, if possible to cure, within 10 Trading
                              Days after notice of such default sent by the
                              Holder or by any other holder of Debentures;

                        iii.  a default or event of default (subject to any
                              grace or cure period provided for in the
                              applicable agreement, document or instrument)
                              shall occur under (A) any of the Transaction
                              Documents other than the Debentures, or (B) any
                              other material agreement, lease, document or
                              instrument to which the Company or any Subsidiary
                              is bound;

                        iv.   any representation or warranty made herein, in any
                              other Transaction Document, in any written
                              statement pursuant hereto or thereto, or in any
                              other report, financial statement or certificate
                              made or delivered to the Holder or any other
                              holder of Debentures pursuant to the Purchase
                              Agreement shall be untrue or incorrect in any
                              material respect as of the date when made or
                              deemed made;

                        v.    (i) the Company or any of its Subsidiaries shall
                              commence, or there shall be commenced against the
                              Company or any such Subsidiary, a case under any
                              applicable bankruptcy or insolvency laws as now or
                              hereafter in effect or any successor thereto, or
                              the Company or any Subsidiary commences any other
                              proceeding under any reorganization, arrangement,
                              adjustment of debt, relief of debtors,
                              dissolution, insolvency or liquidation or similar
                              law of any jurisdiction whether now or hereafter
                              in effect relating to the Company or any
                              Subsidiary thereof or (ii) there is commenced
                              against the Company or any Subsidiary thereof any
                              such bankruptcy, insolvency or other proceeding
                              which remains undismissed for a period of 60 days;
                              or (iii) the Company or any Subsidiary thereof is
                              adjudicated by a court of competent jurisdiction
                              insolvent or bankrupt; or any order of relief or
                              other order approving any such case or proceeding
                              is entered; or (iv) the Company or any Subsidiary
                              thereof suffers any appointment of any custodian
                              or the like for it or any substantial part of its
                              property which continues undischarged or unstayed
                              for a period

                                       15
<PAGE>

                              of 60 days; or (v) the Company or any Subsidiary
                              thereof makes a general assignment for the benefit
                              of creditors; or (vi) the Company shall fail to
                              pay, or shall state that it is unable to pay, or
                              shall be unable to pay, its debts generally as
                              they become due; or (vii) the Company or any
                              Subsidiary thereof shall call a meeting of its
                              creditors with a view to arranging a composition,
                              adjustment or restructuring of its debts; or
                              (viii) the Company or any Subsidiary thereof shall
                              by any act or failure to act expressly indicate
                              its consent to, approval of or acquiescence in any
                              of the foregoing; or (ix) any corporate or other
                              action is taken by the Company or any Subsidiary
                              thereof for the purpose of effecting any of the
                              foregoing;

                        vi.   the Company or any Subsidiary shall default in any
                              of its obligations under any mortgage, credit
                              agreement or other facility, indenture agreement,
                              factoring agreement or other instrument under
                              which there may be issued, or by which there may
                              be secured or evidenced any indebtedness for
                              borrowed money or money due under any long term
                              leasing or factoring arrangement of the Company in
                              an amount exceeding $150,000, whether such
                              indebtedness now exists or shall hereafter be
                              created and such default shall result in such
                              indebtedness becoming or being declared due and
                              payable prior to the date on which it would
                              otherwise become due and payable;

                        vii.  the Common Stock shall not be eligible for
                              quotation on or quoted for trading on a Trading
                              Market and shall not again be eligible for and
                              quoted or listed for trading thereon within 10
                              Trading Days;

                        viii. the Company shall be a party to any Change of
                              Control Transaction or Fundamental Transaction
                              (other than a Fundamental Transaction undertaken
                              for the purpose of changing the domicile of the
                              Company), shall agree to sell or dispose of all or
                              in excess of 33% of its assets in one or more
                              transactions (whether or not such sale would
                              constitute a Change of Control Transaction),
                              provided, that any license by the Company of its
                              intellectual property rights shall not be
                              considered a sale or other disposal hereunder, or
                              shall redeem or repurchase more than a de minimis
                              number of its outstanding shares of Common Stock
                              or other equity securities of the Company (other
                              than redemptions of Conversion Shares and
                              repurchases of shares of Common Stock or other
                              equity securities of departing officers and
                              directors of the Company; provided such
                              repurchases shall not

                                       16
<PAGE>

                              exceed $100,000, in the aggregate, for all
                              officers and directors during the term of this
                              Debenture);

                        ix.   a Registration Statement shall not have been
                              declared effective by the Commission on or prior
                              to the 180th calendar day after the First Closing
                              Date;

                        x.    if, during the Effectiveness Period (as defined in
                              the Registration Rights Agreement), the
                              effectiveness of the Registration Statement lapses
                              for any reason or the Holder shall not be
                              permitted to resell Registrable Securities (as
                              defined in the Registration Rights Agreement)
                              under the Registration Statement, in either case,
                              for more than 30 consecutive Trading Days or 60
                              non-consecutive Trading Days during any 12 month
                              period; provided, however, that in the event that
                              the Company is negotiating a merger,
                              consolidation, acquisition or sale of all or
                              substantially all of its assets or a similar
                              transaction and in the written opinion of counsel
                              to the Company, the Registration Statement, would
                              be required to be amended to include information
                              concerning such transactions or the parties
                              thereto that is not available or may not be
                              publicly disclosed at the time, the Company shall
                              be permitted an additional 10 consecutive Trading
                              Days during any 12 month period relating to such
                              an event;

                        xi.   an Event (as defined in the Registration Rights
                              Agreement) shall not have been cured to the
                              satisfaction of the Holder prior to the expiration
                              of thirty days from the Event Date (as defined in
                              the Registration Rights Agreement) relating
                              thereto (other than an Event resulting from a
                              failure of an Registration Statement to be
                              declared effective by the Commission on or prior
                              to the Effectiveness Date (as defined in the
                              Registration Rights Agreement), which shall be
                              covered by Section 8(a)(ix);

                        xii.  the Company shall fail for any reason to deliver
                              certificates to a Holder prior to the fifth
                              Trading Day after a Conversion Date pursuant to
                              and in accordance with Section 4(d) or the Company
                              shall provide notice to the Holder, including by
                              way of public announcement, at any time, of its
                              intention not to comply with requests for
                              conversions of any Debentures in accordance with
                              the terms hereof; or

                        xiii. the Company shall fail for any reason to pay in
                              full the amount of cash due pursuant to a Buy-In
                              within 10 Trading Days after notice therefor is
                              delivered hereunder or shall fail to pay all

                                       17
<PAGE>

                              amounts owed on account of an Event of Default
                              within 10 Trading Days of the date due.

            b) Remedies Upon Event of Default. If any Event of Default occurs,
      the full principal amount of this Debenture, together with other amounts
      owing in respect thereof, to the date of acceleration shall become, at the
      Holder's election, immediately due and payable in cash. The aggregate
      amount payable upon an acceleration by reason of an Event of Default shall
      be equal to the Mandatory Prepayment Amount. Commencing 5 days after the
      occurrence of any Event of Default that results in the eventual
      acceleration of this Debenture, the interest rate on this Debenture shall
      accrue at the rate of 18% per annum, or such lower maximum amount of
      interest permitted to be charged under applicable law. All Debentures for
      which the full Mandatory Prepayment Amount hereunder shall have been paid
      in accordance herewith shall promptly be surrendered to or as directed by
      the Company. The Holder need not provide and the Company hereby waives any
      presentment, demand, protest or other notice of any kind, and the Holder
      may immediately and without expiration of any grace period enforce any and
      all of its rights and remedies hereunder and all other remedies available
      to it under applicable law. Such declaration may be rescinded and annulled
      by Holder at any time prior to payment hereunder and the Holder shall have
      all rights as a Debenture holder until such time, if any, as the full
      payment under this Section shall have been received by it. No such
      rescission or annulment shall affect any subsequent Event of Default or
      impair any right consequent thereon.

      Section 9. Miscellaneous.

            a) Notices. Any and all notices or other communications or
      deliveries to be provided by the Holders hereunder, including, without
      limitation, any Notice of Conversion, shall be in writing and delivered
      personally, by facsimile, sent by a nationally recognized overnight
      courier service, addressed to the Company, at the address set forth above,
      facsimile number (281) 466-1480, Attn: Steven B. Rash, or such other
      address or facsimile number as the Company may specify for such purposes
      by notice to the Holders delivered in accordance with this Section. Any
      and all notices or other communications or deliveries to be provided by
      the Company hereunder shall be in writing and delivered personally, by
      facsimile, sent by a nationally recognized overnight courier service
      addressed to each Holder at the facsimile telephone number or address of
      such Holder appearing on the books of the Company, or if no such facsimile
      telephone number or address appears, at the principal place of business of
      the Holder. Any notice or other communication or deliveries hereunder
      shall be deemed given and effective on the earliest of (i) the date of
      transmission, if such notice or communication is delivered via facsimile
      (and the sender receives a confirmation of successful transmission) at the
      facsimile telephone number specified in this Section prior to 5:30 p.m.
      (New York City time), (ii) the date after the date of transmission, if
      such notice or communication is delivered via facsimile at the facsimile
      telephone number specified in this Section later than 5:30 p.m. (New York
      City time) on any date and earlier than 11:59 p.m. (New York City time) on
      such date, (iii) the second Business Day following the date of mailing, if

                                       18
<PAGE>

      sent by nationally recognized overnight courier service, or (iv) upon
      actual receipt by the party to whom such notice is required to be given.

            b) Absolute Obligation. Except as expressly provided herein, no
      provision of this Debenture shall alter or impair the obligation of the
      Company, which is absolute and unconditional, to pay the principal of and
      liquidated damages (if any) on, this Debenture at the time, place, and
      rate, and in the coin or currency, herein prescribed. This Debenture is a
      direct debt obligation of the Company. This Debenture ranks pari passu
      with all other Debentures now or hereafter issued under the terms set
      forth herein.

            c) Lost or Mutilated Debenture. If this Debenture shall be
      mutilated, lost, stolen or destroyed, the Company shall execute and
      deliver, in exchange and substitution for and upon cancellation of a
      mutilated Debenture, or in lieu of or in substitution for a lost, stolen
      or destroyed Debenture, a new Debenture for the principal amount of this
      Debenture so mutilated, lost, stolen or destroyed but only upon receipt of
      evidence of such loss, theft or destruction of such Debenture, and of the
      ownership hereof, and indemnity, if requested, all reasonably satisfactory
      to the Company.

            d) Governing Law. All questions concerning the construction,
      validity, enforcement and interpretation of this Debenture shall be
      governed by and construed and enforced in accordance with the internal
      laws of the State of New York, without regard to the principles of
      conflicts of law thereof. Each party agrees that all legal proceedings
      concerning the interpretations, enforcement and defense of the
      transactions contemplated by any of the Transaction Documents (whether
      brought against a party hereto or its respective affiliates, directors,
      officers, shareholders, employees or agents) shall be commenced in the
      state and federal courts sitting in the City of New York, Borough of
      Manhattan (the "New York Courts"). Each party hereto hereby irrevocably
      submits to the exclusive jurisdiction of the New York Courts for the
      adjudication of any dispute hereunder or in connection herewith or with
      any transaction contemplated hereby or discussed herein (including with
      respect to the enforcement of any of the Transaction Documents), and
      hereby irrevocably waives, and agrees not to assert in any suit, action or
      proceeding, any claim that it is not personally subject to the
      jurisdiction of any such court, or such New York Courts are improper or
      inconvenient venue for such proceeding. Each party hereby irrevocably
      waives personal service of process and consents to process being served in
      any such suit, action or proceeding by mailing a copy thereof via
      registered or certified mail or overnight delivery (with evidence of
      delivery) to such party at the address in effect for notices to it under
      this Debenture and agrees that such service shall constitute good and
      sufficient service of process and notice thereof. Nothing contained herein
      shall be deemed to limit in any way any right to serve process in any
      manner permitted by law. Each party hereto hereby irrevocably waives, to
      the fullest extent permitted by applicable law, any and all right to trial
      by jury in any legal proceeding arising out of or relating to this
      Debenture or the transactions contemplated hereby. If either party shall
      commence an action or proceeding to enforce any provisions of this
      Debenture, then the prevailing party in such action or proceeding shall be

                                       19
<PAGE>

      reimbursed by the other party for its attorneys fees and other costs and
      expenses incurred with the investigation, preparation and prosecution of
      such action or proceeding.

            e) Waiver. Any waiver by the Company or the Holder of a breach of
      any provision of this Debenture shall not operate as or be construed to be
      a waiver of any other breach of such provision or of any breach of any
      other provision of this Debenture. The failure of the Company or the
      Holder to insist upon strict adherence to any term of this Debenture on
      one or more occasions shall not be considered a waiver or deprive that
      party of the right thereafter to insist upon strict adherence to that term
      or any other term of this Debenture. Any waiver must be in writing.

            f) Severability. If any provision of this Debenture is invalid,
      illegal or unenforceable, the balance of this Debenture shall remain in
      effect, and if any provision is inapplicable to any person or
      circumstance, it shall nevertheless remain applicable to all other persons
      and circumstances. If it shall be found that any interest or other amount
      deemed interest due hereunder violates applicable laws governing usury,
      the applicable rate of interest due hereunder shall automatically be
      lowered to equal the maximum permitted rate of interest. The Company
      covenants (to the extent that it may lawfully do so) that it shall not at
      any time insist upon, plead, or in any manner whatsoever claim or take the
      benefit or advantage of, any stay, extension or usury law or other law
      which would prohibit or forgive the Company from paying all or any portion
      of the principal of or interest on this Debenture as contemplated herein,
      wherever enacted, now or at any time hereafter in force, or which may
      affect the covenants or the performance of this indenture, and the Company
      (to the extent it may lawfully do so) hereby expressly waives all benefits
      or advantage of any such law, and covenants that it will not, by resort to
      any such law, hinder, delay or impeded the execution of any power herein
      granted to the Holder, but will suffer and permit the execution of every
      such as though no such law has been enacted.

            g) Next Business Day. Whenever any payment or other obligation
      hereunder shall be due on a day other than a Business Day, such payment
      shall be made on the next succeeding Business Day and no interest shall be
      payable in respect of such extension.

            h) Headings. The headings contained herein are for convenience only,
      do not constitute a part of this Debenture and shall not be deemed to
      limit or affect any of the provisions hereof.

                              *********************

                                       20
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Convertible Debenture to
be duly executed by a duly authorized officer as of the date first above
indicated.

                                   POWER 3 MEDICAL PRODUCTS, INC.

                                   By:__________________________________________
                                      Name:
                                      Title:

                                       21
<PAGE>

                                     ANNEX A

                              NOTICE OF CONVERSION

      The undersigned hereby elects to convert principal under the Convertible
Debenture of Power 3 Medical Products, Inc., a New York corporation (the
"Company"), due on October 28, 2007, into shares of common stock, par value
$0.001 per share (the "Common Stock"), of the Company according to the
conditions hereof, as of the date written below. If shares are to be issued in
the name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto and is delivering herewith such
certificates and opinions as reasonably requested by the Company in accordance
therewith. No fee will be charged to the holder for any conversion, except for
such transfer taxes, if any.

      By the delivery of this Notice of Conversion the undersigned represents
and warrants to the Company that its ownership of the Common Stock does not
exceed the amounts determined in accordance with Section 13(d) of the Exchange
Act, specified under Section 4 of this Debenture.

      The undersigned agrees to comply with the prospectus delivery requirements
under the applicable securities laws in connection with any transfer of the
aforesaid shares of Common Stock.

Conversion calculations:

                                Date to Effect Conversion:

                                Principal Amount of Debentures to be Converted:

                                Number of shares of Common Stock to be issued:

                                Signature:

                                Name:

                                Address:

                                       22
<PAGE>

                                   SCHEDULE 1

                               CONVERSION SCHEDULE

The Convertible Debentures due on October 28, 2007, in the aggregate principal
amount of $____________ issued by Power 3 Medical Products, Inc., a New York
corporation. This Conversion Schedule reflects conversions made under Section 4
of the above referenced Debenture.

                                     Dated:

<TABLE>
<CAPTION>
                                             Aggregate
                                             Principal
                                               Amount
                                             Remaining
                                           Subsequent to
 Date of Conversion                          Conversion
(or for first entry,      Amount of         (or original
Original Issue Date)      Conversion      Principal Amount)      Company Attest
--------------------------------------------------------------------------------
<S>                       <C>             <C>                    <C>

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
</TABLE>

                                       23
<PAGE>

                                   SCHEDULE TO
                          FORM OF CONVERTIBLE DEBENTURE

         The Company has issued Convertible Debentures Due October 28, 2007 to
the following listed holders. The terms of the Convertible Debentures issued by
the Company to each of the following holders are identical except for the name
of the holder and the original principal amount of the Convertible Debenture.

<TABLE>
<CAPTION>
                                     HOLDER                                       ORIGINAL PRINCIPAL AMOUNT
                                     ------                                       -------------------------

<S>                                                                                        <C>
        Cityplatz Limited                                                                   $  50,000
        Crescent International Ltd.                                                         $ 200,000
        Crestview Capital Master, LLC                                                       $ 150,000
        DKR SoundShore Oasis Holding Fund Ltd.                                              $  50,000
        Gryphon Master Fund L.P.                                                            $ 100,000
        GSSF Master Fund, LP                                                                $ 100,000
        Mohawk Funding                                                                      $  10,000
        Omicron Master Trust                                                                $ 100,000
        Otape Investments LLC                                                               $ 100,000
        Platinum Partners Value Arbitrage Fund L.P.                                         $  83,333
        Richard Molinsky                                                                    $  30,000
        Sage Capital Investments Limited                                                    $  25,000
        Bach Farms LLC                                                                      $   1,667
</TABLE>

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