Document:

Unassociated Document

    
      

      

    

    

    OXFORD
      MEDIA, INC.

    

    CERTIFICATE
      OF DESIGNATION OF PREFERENCES, 

    RIGHTS
      AND LIMITATIONS

    OF

    SERIES
      B CONVERTIBLE PREFERRED STOCK

    

    PURSUANT
      TO SECTION 78.1955 OF THE 

    NEVADA
      GENERAL CORPORATION LAW

    

    The
      undersigned, LEWIS JAFFE, does hereby certify that:

    

    1.    He
      is the
      President of OXFORD MEDIA, INC., a Nevada corporation (the “Corporation”).

    

    2.    The
      Corporation is authorized to issue 1,000,000 shares of preferred stock, 4,000
      of
      which have been issued.

    

    3.    The
      following resolutions were duly adopted by the Board of Directors:

    

    WHEREAS,
      the Articles of Incorporation of the Corporation provides for a class of its
      authorized stock known as preferred stock, comprised of 1,000,000 shares, $0.001
      par value, issuable from time to time in one or more series;

    

    WHEREAS,
      the Board of Directors of the Corporation is authorized to fix the dividend
      rights, dividend rate, voting rights, conversion rights, rights and terms of
      redemption and liquidation preferences of any wholly unissued series of
      preferred stock and the number of shares constituting any Series and the
      designation thereof, of any of them; and

    

    WHEREAS,
      it is the desire of the Board of Directors of the Corporation, pursuant to
      its
      authority as aforesaid, to fix the rights, preferences, restrictions and other
      matters relating to a series of the preferred stock, which shall consist of,
      except as otherwise set forth in the Purchase Agreement, up to 3,857 shares
      of
      the preferred stock which the corporation has the authority to issue, as
      follows:

    

    NOW,
      THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide
      for
      the issuance of a series of preferred stock for cash or exchange of other
      securities, rights or property and does hereby fix and determine the rights,
      preferences, restrictions and other matters relating to such series of preferred
      stock as follows:

     

     

    

    
      
        
           

        

        
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    TERMS
      OF PREFERRED STOCK

    

    Section
      1. Designation,
      Amount and Par Value.
      The
      series of preferred stock shall be designated as its SERIES B Convertible
      Preferred Stock (the “Preferred
      Stock”)
      and
      the number of shares so designated shall be 3,857 (which shall not be subject
      to
      increase without the consent of all of the holders of the Preferred Stock (each,
      a “Holder”
and
      collectively, the “Holders”)).
      Each
      share of Preferred Stock shall have a par value of $0.001 per share and a stated
      value equal to $1,000 (the “Stated
      Value”).
      Capitalized terms not otherwise defined herein shall have the meaning given
      such
      terms in Section 8 hereof.

    

    Section
      2. Dividends.

    

    (a)
      Holders shall be entitled to receive and the Corporation shall pay, cumulative
      dividends at the rate per share (as a percentage of the Stated Value per share)
      of 8% per annum (subject to increase pursuant to Section 7(a)) payable quarterly
      on March 1, June 1, September 1 and December 1, beginning with December 31,
      2006, the first such date after the Original Issue Date, and on any Conversion
      Date or redemption date pursuant to the terms hereunder (except that, if such
      date is not a Trading Day, the payment date shall be the next succeeding Trading
      Day)(“Dividend
      Payment Date”).
      The
      form of dividend payments to each Holder shall be made in the following order:
      (i) if funds are legally available for the payment of dividends and the Equity
      Conditions have not been met, in cash only, (ii) if funds are legally available
      for the payment of dividends and the Equity Conditions have been met, at the
      sole election of the Corporation, in cash or shares of Common Stock which shall
      be valued solely for such purpose at 80% of the average of the 5 VWAPs
      immediately prior to the Dividend Payment Date; (iii) if funds are not legally
      available for the payment of dividends and the Equity Conditions have been
      met,
      in shares of Common Stock which shall be valued at 80% of the average of the
      5
      VWAPs immediately prior to the Dividend Payment Date; (iv) if funds are not
      legally available for the payment of dividends and the Equity Conditions
      relating to registration have been waived by such Holder, as to such Holder
      only, in unregistered shares of Common Stock which shall be valued at 80% of
      the
      average of the 5 VWAPs immediately prior to the Dividend Payment Date; and
      (v)
      if funds are not legally available for the payment of dividends and the Equity
      Conditions have not been met, then, at the election of such Holder, such
      dividends shall accrue to the next Dividend Payment Date or shall be accreted
      to
      the outstanding Stated Value. The Holders shall have the same rights and
      remedies with respect to the delivery of any such shares as if such shares
      were
      being issued pursuant to Section 5. On the Closing Date the Corporation shall
      have notified the Holders whether or not it may lawfully pay cash dividends.
      The
      Corporation shall promptly notify the Holders at any time the Corporation shall
      become able or unable, as the case may be, to lawfully pay cash dividends.
      If at
      any time the Corporation has the right to pay dividends in cash or Common Stock,
      the Corporation must provide the Holder with at least 20 Trading Days’ notice of
      its election to pay a regularly scheduled dividend in Common Stock. Dividends
      on
      the Preferred Stock shall be calculated on the basis of a 360-day year, shall
      accrue daily commencing on the Original Issue Date, and shall be deemed to
      accrue from such date whether or not earned or declared and whether or not
      there
      are profits, surplus or other funds of the Corporation legally available for
      the
      payment of dividends. Except as otherwise provided herein, if at any time the
      Corporation pays dividends partially in cash and partially in shares, then
      such
      payment shall be distributed ratably among the Holders based upon the number
      of
      shares of Preferred Stock held by each Holder. Any dividends, whether paid
      in
      cash or shares, that are not paid within three Trading Days following a Dividend
      Payment Date shall continue to accrue and shall entail a late fee, which must
      be
      paid in cash, at the rate of 18% per annum or the lesser rate permitted by
      applicable law (such fees to accrue daily, from the Dividend Payment Date
      through and including the date of payment).

    

    
      
        
           

        

        
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    (b)
      So
      long as any Preferred Stock shall remain outstanding, neither the Corporation
      nor any Subsidiary thereof shall redeem, purchase or otherwise acquire directly
      or indirectly any Junior Securities. So long as any Preferred Stock shall remain
      outstanding, neither the Corporation nor any Subsidiary thereof shall directly
      or indirectly pay or declare any dividend or make any distribution (other than
      a
      dividend or distribution described in Section 5 or dividends due and paid in
      the
      ordinary course on preferred stock of the Corporation at such times when the
      Corporation is in compliance with its payment and other obligations hereunder)
      upon, nor shall any distribution be made in respect of, any Junior Securities
      so
      long as any dividends due on the Preferred Stock remain unpaid, nor shall any
      monies be set aside for or applied to the purchase or redemption (through a
      sinking fund or otherwise) of any Junior Securities or shares pari passu with
      the Preferred Stock.

    

    (c)
      The
      Corporation acknowledges and agrees that the capital of the Corporation in
      respect of the Preferred Stock and any future issuances of the Corporation’s
      capital stock shall be equal to the aggregate par value of such Preferred Stock
      or capital stock, as the case may be, and that, on or after the date of the
      Purchase Agreement, it shall not increase the capital of the Corporation with
      respect to any shares of the Corporation’s capital stock issued and outstanding
      on such date. The Corporation also acknowledges and agrees that it shall not
      create any special reserves under the General Corporation Law of Nevada without
      the prior written consent of each Holder.

    

    Section
      3. Voting
      Rights.
      Except
      as otherwise provided herein and as otherwise required by law, the Preferred
      Stock shall have no voting rights. However, so long as any shares of Preferred
      Stock are outstanding, the Corporation shall not, without the affirmative vote
      of a majority-in-interest of the Holders of the shares of the Preferred Stock
      then outstanding, (a) alter or change adversely the powers, preferences or
      rights given to the Preferred Stock or alter or amend this Certificate of
      Designation, (b) authorize or create any class of stock ranking as to dividends,
      redemption or distribution of assets upon a Liquidation (as defined in Section
      4) senior to or otherwise pari passu with the Preferred Stock, (c) amend its
      articles of incorporation or other charter documents so as to affect adversely
      any rights of the Holders, (d) increase the authorized number of shares of
      Preferred Stock, or (e) enter into any agreement with respect to the
      foregoing.

    

    Section
      4. Liquidation.
      Upon
      any liquidation, dissolution or winding-up of the Corporation, whether voluntary
      or involuntary (a “Liquidation”),
      the
      Holders shall be entitled to receive out of the assets of the Corporation,
      whether such assets are capital or surplus, for each share of Preferred Stock
      an
      amount equal to the Stated Value per share plus any accrued and unpaid dividends
      thereon and any other fees or liquidated damages owing thereon before any
      distribution or payment shall be made to the holders of any Junior Securities,
      and if the assets of the Corporation shall be insufficient to pay in full such
      amounts, then the entire assets to be distributed to the Holders shall be
      distributed among the Holders ratably in accordance with the respective amounts
      that would be payable on such shares if all amounts payable thereon were paid
      in
      full. A Fundamental Transaction or Change of Control Transaction shall not
      be
      treated as a Liquidation. The Corporation shall mail written notice of any
      such
      Liquidation, not less than 45 days prior to the payment date stated therein,
      to
      each record Holder.

    

    
      
        
           

        

        
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    Section
      5.  Conversion.

    

    (a)
         (i)
      Conversions
      at Option of Holder.
      Each
      share of Preferred Stock shall be convertible into that number of shares of
      Common Stock (subject to the limitations set forth in Sections 5(a)(ii) and
      (iii)) determined by dividing the Stated Value of such share of Preferred Stock
      by the Set Price, at the option of the Holder, at any time and from time to
      time
      from and after the Original Issue Date. Holders shall effect conversions by
      providing the Corporation with the form of conversion notice attached hereto
      as
Annex
      A
      (a
“Notice
      of Conversion”).
      Each
      Notice of Conversion shall specify the number of shares of Preferred Stock
      to be
      converted, the number of shares of Preferred Stock owned prior to the conversion
      at issue, the number of shares of Preferred Stock owned subsequent to the
      conversion at issue and the date on which such conversion is to be effected,
      which date may not be prior to the date the Holder delivers such Notice of
      Conversion to the Corporation by facsimile (the “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 to the Corporation is deemed
      delivered hereunder. The calculations and entries set forth in the Notice of
      Conversion shall control in the absence of manifest or mathematical
      error.

    

    (ii)
      Beneficial Ownership Limitation. The
      Corporation shall not effect any conversion of the Preferred Stock, and the
      Holder shall not have the right to convert any portion of the Preferred Stock
      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 the
      Preferred Stock 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 Stated Value
      of
      Preferred Stock 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 Corporation 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 5(a)(ii), 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 5(a)(ii) applies, the
      determination of whether the Preferred Stock is convertible (in relation to
      other securities owned by the Holder together with any affiliates) and of which
      shares of Preferred Stock is convertible shall be in the sole discretion of
      such
      Holder, and the submission of a Notice of Conversion shall be deemed to be
      such
      Holder’s determination of whether the shares of Preferred Stock may be converted
      (in relation to other securities owned by such Holder) and which shares of
      the
      Preferred Stock is convertible, in each case subject to such aggregate
      percentage limitations. To ensure compliance with this restriction, the Holder
      will be deemed to represent to the Corporation 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 Corporation shall have no obligation to verify
      or confirm the accuracy of such determination. For purposes of this Section
      5(a)(ii), 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 the most recent of the following: (A) the Corporation’s most recent Form 10-Q
      or Form 10-K, as the case may be, (B) a more recent public announcement by
      the
      Corporation or (C) any other notice by the Corporation or the Corporation’s
      transfer agent setting forth the number of shares of Common Stock
      Outstanding.  Upon the written or oral request of the Holder, the
      Corporation 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 Corporation,
      including the Preferred Stock, by the Holder or its affiliates since the date
      as
      of which such number of outstanding shares of Common Stock was reported. The
      provisions of this Section 5(a)(ii) may be waived by the Holder upon, at the
      election of the Holder, not less than 61 days’ prior notice to the Corporation,
      and the provisions of this Section 5(a)(ii) shall continue to apply until such
      61st day (or such later date, as determined by the Holder, as may be specified
      in such notice of waiver).

    

    
      
        
           

        

        
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    (b)     
       (i)
      Not
      later than three Trading Days after each Conversion Date (the “Share
      Delivery Date”),
      the
      Corporation shall deliver to the Holder (A) a certificate or certificates which,
      after the Effective Date, shall be free of restrictive legends and trading
      restrictions (other than those required by Section 4.1 of the Purchase
      Agreement) representing the number of shares of Common Stock being acquired
      upon
      the conversion of shares of Preferred Stock, and (B) a bank check in the amount
      of accrued and unpaid dividends (if the Corporation has elected or is required
      to pay accrued dividends in cash). After the Effective Date, the Corporation
      shall, upon request of the Holder, deliver any certificate or certificates
      required to be delivered by the Corporation under this Section electronically
      through the Depository Trust Corporation or another established clearing
      corporation performing similar functions. If in the case of any Notice of
      Conversion such certificate or certificates are not delivered to or as directed
      by the applicable Holder by the third Trading Day after the Conversion Date,
      the
      Holder shall be entitled to elect by written notice to the Corporation at any
      time on or before its receipt of such certificate or certificates thereafter,
      to
      rescind such conversion, in which event the Corporation shall immediately return
      the certificates representing the shares of Preferred Stock tendered for
      conversion.

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
           

        

        
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    (ii)
      The
      Corporation’s obligations to issue and deliver the Conversion Shares upon
      conversion and redemption of Preferred Stock 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 Corporation 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 Corporation to the Holder in connection
      with the issuance of such Conversion Shares. In the event a Holder shall elect
      to convert any or all of the Stated Value of its Preferred Stock, the
      Corporation may not refuse conversion based on any claim that such Holder or
      any
      one associated or affiliated with the Holder of 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 Preferred Stock shall have been sought and obtained and the Corporation
      posts a surety bond for the benefit of the Holder in the amount of 150% of
      the
      Stated Value of Preferred Stock 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 Corporation shall issue Conversion Shares or, if applicable, cash, upon
      a
      properly noticed conversion. If the Corporation fails to deliver to the Holder
      such certificate or certificates pursuant to Section 5(b)(i) by the Share
      Delivery Date applicable to such conversion, the Corporation shall pay to such
      Holder, in cash, as liquidated damages and not as a penalty, for each $5,000
      of
      Stated Value of Preferred Stock being converted, $50 per Trading Day (increasing
      to $100 per Trading Day after 3 Trading Days and increasing to $200 per Trading
      Day 6 Trading Days after such damages begin to accrue) for each Trading Day
      after the Share Delivery Date until such certificates are delivered. Nothing
      herein shall limit a Holder’s right to pursue actual damages for the
      Corporation’s failure to deliver certificates representing shares of Common
      Stock upon conversion within the period specified herein and such Holder shall
      have the right to pursue all remedies available to it hereunder, at law or
      in
      equity including, without limitation, a decree of specific performance and/or
      injunctive relief.

    

    (iii)
      If
      the Corporation fails to deliver to the Holder such certificate or certificates
      pursuant to Section 5(b)(i) by a Share Delivery Date, and if after such Share
      Delivery Date the Holder 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 was entitled to receive upon the conversion
      relating to such Share Delivery Date (a “Buy-In”),
      then
      the Corporation shall pay in cash to the Holder the amount by which (x) the
      Holder’s total purchase price (including brokerage commissions, if any) for the
      Common Stock so purchased exceeds (y) the product of (1) the aggregate number
      of
      shares of Common Stock that such Holder was entitled to receive from the
      conversion at issue multiplied by (2) the price at which the sell order giving
      rise to such purchase obligation was executed. 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 shares of Preferred Stock
      with
      respect to which the aggregate sale price giving rise to such purchase
      obligation is $10,000, under clause (A) of the immediately preceding sentence
      the Corporation shall be required to pay the Holder $1,000. The Holder shall
      provide the Corporation written notice indicating the amounts payable to the
      Holder in respect of the Buy-In, together with applicable confirmations and
      other evidence reasonably requested by the Corporation. Nothing herein shall
      limit a Holder’s right to pursue any other remedies available to it hereunder,
      at law or in equity including, without limitation, a decree of specific
      performance and/or injunctive relief with respect to the Corporation’s failure
      to timely deliver certificates representing shares of Common Stock upon
      conversion of the shares of Preferred Stock as required pursuant to the terms
      hereof.

    

    
      
        
           

        

        
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    (c)      
       (i)
      The
      conversion price for each share of Preferred Stock shall equal $1.00
      (the
“Set
      Price”),
      subject to adjustment below.

    

    (ii)
      if
      the Corporation, at any time while the Preferred Stock is 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 and the Series A Preferred Stock, provided the terms
      of such issuance of interest or dividends, as the case may be, is not amended
      after the Original Issue Date to an effective conversion price less than the
      then Set Price, (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 Corporation, then the Set 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
      reclassification.

    

    (iii) if
      the
      Corporation, at any time while the Preferred Stock is outstanding, shall issue
      rights, options or warrants to all holders of Common Stock (and not to Holders)
      entitling them to subscribe for or purchase shares of Common Stock at a price
      per share less than the VWAP at the record date mentioned below, then the Set
      Price shall be multiplied by a fraction, of which the denominator shall be
      the
      number of shares of the Common Stock Outstanding on the date of issuance of
      such
      rights or warrants plus the number of additional shares of Common Stock offered
      for subscription or purchase, and of which the numerator shall be the number
      of
      shares of the Common Stock Outstanding on the date of issuance of such rights
      or
      warrants plus the number of shares which the aggregate offering price of the
      total number of shares so offered (assuming receipt by the Corporation in full
      of all consideration payable upon exercise of such rights, options or warrants)
      would purchase at such VWAP. Such adjustment shall be made whenever such rights
      or warrants are issued, and shall become effective immediately after the record
      date for the determination of stockholders entitled to receive such rights,
      options or warrants.

     

     

    
 

    
      
        
           

        

        
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    (iv) if
      the
      Corporation or any subsidiary thereof at any time while any of the Preferred
      Stock is outstanding, shall offer, sell, grant any option or warrant 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 any equity or equity
      equivalent securities (including any equity, debt or other instrument that
      is at
      any time over the life thereof convertible into or exchangeable for Common
      Stock) (collectively, “Common
      Stock Equivalents”)
      entitling any Person to acquire shares of Common Stock, at an effective price
      per share less than the Set Price (such lower price, the “Base
      Conversion Price”
and
      such issuances collectively, a “Dilutive
      Issuance”),
      as
      adjusted hereunder (if the holder of the Common Stock or Common Stock Equivalent
      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 are issued in connection
      with such issuance, be entitled to receive shares of Common Stock at a effective
      price per share which is less than the Set Price, such issuance shall be deemed
      to have occurred for less than the Set Price), then the Set Price shall be
      reduced to equal the Base Conversion Price. Such adjustment shall be made
      whenever such Common Stock or Common Stock Equivalents are issued. The
      Corporation 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
      (such notice the “Dilutive
      Issuance Notice”).
      For
      purposes of clarification, whether or not the Corporation provides a Dilutive
      Issuance Notice pursuant to this Section 7(b), upon the occurrence of any
      Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
      entitled to receive a number of Conversion Shares based upon the Base Conversion
      Price regardless of whether the Holder accurately refers to the Base Conversion
      Price in the Notice of Conversion.

    

    (v) if
      the
      Corporation, at any time while the Preferred Stock is 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 other than the Common Stock (which shall be subject to Section
      5(c)(iii), then in each such case the Set Price shall be adjusted by multiplying
      the Set 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 VWAP determined as of the record
      date mentioned above, and of which the numerator shall be such VWAP on such
      record date less the then per share 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.

    

    
      
        
           

        

        
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    (vi) All
      calculations under this Section 5(c) shall be made to the nearest cent or the
      nearest 1/100th of a share, as the case may be. The number of shares of Common
      Stock outstanding at any given time shall not include shares owned or held
      by or
      for the account of the Corporation, and the disposition of any such shares
      shall
      be considered an issue or sale of Common Stock. For purposes of this Section
      5(c), the number of shares of Common Stock deemed to be outstanding (the
“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) issued and outstanding.

    

    (vii) Notwithstanding
      anything to the contrary herein, no adjustment shall be made hereunder in
      connection with an Exempt Issuance.

    

    (viii) Whenever
      the Set Price is adjusted pursuant to this Section the Corporation shall
      promptly mail to each Holder, a notice setting forth the Set Price after such
      adjustment and setting forth a brief statement of the facts requiring such
      adjustment. If the Corporation issues a variable rate security, despite the
      prohibition thereon in the Purchase Agreement, the Corporation 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).

    

    Section
      6. Force
      Conversion.
      The
      Corporation shall have the following rights to force a conversion of the
      Preferred Stock if after the Effective Date, each of the Closing Prices for
      any
      20 consecutive Trading Days (such 20 day period commencing only after the later
      of the Effective Date, such period the “Threshold
      Period”))
      exceeds 250% of the then Conversion Price, the Corporation may, within 1 Trading
      Day of the end of any such Threshold Period, deliver a notice to the Holder
      (a
“Forced
      Conversion Notice”
and
      the
      date such notice is received by the Holder, the “Forced
      Conversion Notice Date”)
      to
      cause the Holder to immediately convert all or part of the then outstanding
      Stated Value amount of Preferred Stocks. The Corporation may only effect a
      Forced Conversion Notice if all of the Equity Conditions are met through the
      applicable Threshold Period until the date of the applicable Forced Conversion
      and through and including the date such shares of Common Stock are issued to
      the
      Holder. Any Forced Conversion shall be applied ratably to all Holders based
      on
      their initial purchases of Preferred Stocks pursuant to the Purchase Agreement.
      For purposes of clarification, a Forced Conversion shall be subject to all
      of
      the provisions of Section 5, including, without limitation, the provision
      requiring payment of liquidated damages and limitations on conversions.

    

    

    
      
        
           

        

        
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    Section
      7. Redemption
      Upon Triggering Events.

    

    (a)
      Upon
      the occurrence of a Triggering Event, each Holder shall (in addition to all
      other rights it may have hereunder or under applicable law) have the right,
      exercisable at the sole option of such Holder, to require the Corporation to,
      (i) with respect to the Triggering Events set forth in Sections 7(b)(iii),
      (v),
      (vii), (ix), (x)(as to voluntary filings only) and (xii)), redeem all of the
      Preferred Stock then held by such Holder for a redemption price, in cash, equal
      to the Triggering Redemption Amount; or, (ii) at the option of the Holder and
      with respect to the Triggering Events set forth in Sections 7(b)(i), (ii),
      (iv),
      (vi), (viii), (x)(as to involuntary filings only) and (xi), either (A) redeem
      all of the Preferred Stock then held by such Holder for a redemption price,
      in
      shares of Common Stock, equal to a number of shares of Common Stock equal to
      the
      Triggering Redemption Amount divided by 75% of the average of the 10 VWAPs
      immediately prior to the date of election hereunder or (B) increase the dividend
      on all of the outstanding Preferred Stock held by such Holder to equal 18%
      per
      annum thereafter. The Triggering Redemption Amount, in cash or in shares, if
      the
      Corporation elects clauses (i) or (ii)(B) above, shall be due and payable or
      issuable, as the case may be, within 5 Trading Days of the date on which the
      notice for the payment therefor is provided by a Holder (the “Triggering
      Redemption Payment Date”).
      If
      the Corporation fails to pay the Triggering Redemption Amount hereunder in
      full
      pursuant to this Section on the date such amount is due in accordance with
      this
      Section (whether in cash or shares of Common Stock), the Corporation will pay
      interest thereon at a rate of 18% per annum (or such lesser amount permitted
      by
      applicable law), accruing daily from such date until the Triggering Redemption
      Amount, plus all such interest thereon, is paid in full. For purposes of this
      Section, a share of Preferred Stock is outstanding until such date as the Holder
      shall have received Conversion Shares upon a conversion (or attempted
      conversion) thereof that meets the requirements hereof or has been paid the
      Triggering Redemption Amount plus all accrued but unpaid dividends and all
      accrued but unpaid liquidated damages in cash.

    

    (b)
      “Triggering
      Event”
means
      any one or more 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)
      the
      failure of a Conversion Shares Registration Statement to be declared effective
      by the Commission on or prior to the 165th
      day
      after the Original Issue Date;

    

    (ii)
      if,
      during the Effectiveness Period, the effectiveness of the Conversion Shares
      Registration Statement lapses for any reason for more than an aggregate of
      25
      calendar days (which need not be consecutive days) during any 12 month period,
      or the Holder shall not be permitted to resell Registrable Securities under
      the
      Conversion Shares Registration Statement for more than an aggregate of 25
      calendar days (which need not be consecutive days) during any 12 month
      period;

     

    
 

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

    

    

    (iii)
      the
      Corporation shall fail to deliver certificates representing Conversion Shares
      issuable upon a conversion hereunder that comply with the provisions hereof
      prior to the 5th
      Trading
      Day after such shares are required to be delivered hereunder, or the Corporation
      shall provide written notice to any Holder, including by way of public
      announcement, at any time, of its intention not to comply with requests for
      conversion of any shares of Preferred Stock in accordance with the terms
      hereof;

    

    (iv)
      one
      of the Events (as defined in the Registration Rights Agreement) described in
      subsections (i), (ii) or (iii) of Section 2(c) of the Registration Rights
      Agreement shall not have been cured to the satisfaction of the Holders prior
      to
      the expiration of 30 days from the Event Date (as defined in the Registration
      Rights Agreement) relating thereto (other than an Event resulting from a failure
      of a Conversion Shares Registration Statement to be declared effective by the
      Commission on or prior to the 145th day after the Original Issue Date, which
      shall be covered by Section 7(b)(i));

    

    (v)
      the
      Corporation shall fail for any reason to pay in full the amount of cash due
      pursuant to a Buy-In within 5 days after notice therefor is delivered hereunder
      or shall fail to pay all amounts owed on account of an Event within five days
      of
      the date due;

    

    (vi)
       the
      Corporation shall fail to have available a sufficient number of authorized
      and
      unreserved shares of Common Stock to issue to such Holder upon a conversion
      hereunder;

    

    (vii)
       the
      Corporation shall fail to observe or perform any other covenant, agreement
      or
      warranty contained in, or otherwise commit any breach of the Transaction
      Documents, and such failure or breach shall not, if subject to the possibility
      of a cure by the Corporation, have been remedied within 30 calendar days after
      the date on which written notice of such failure or breach shall have been
      given;

    

    (viii)
      any breach of the agreements delivered to the initial Holders at the Closing
      pursuant to Section 2.2(a)(vi) of the Purchase Agreement;

    

    (ix) the
      Corporation shall redeem more than a de minimis number of Junior
      Securities;

     

    (x) the
      Corporation shall be party to a Change of Control Transaction;

     

    (xi) there
      shall have occurred a Bankruptcy Event; or

     

    (xii) the
      Common Stock shall fail to be listed or quoted for trading on a Principal Market
      for more than 5 Trading Days, which need not be consecutive Trading
      Days.

     

    Section
      8. Definitions.
      For the
      purposes hereof, the following terms shall have the following
      meanings:

    

    “Alternate
      Consideration”
shall
      have the meaning set forth in Section 9.

    

    
      
        
           

        

        
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    “Bankruptcy
      Event”
means
      any of the following events: (a) the Corporation or any Significant Subsidiary
      (as such term is defined in Rule 1.02(s) of Regulation S-X) thereof commences
      a
      case or other proceeding under any bankruptcy, reorganization, arrangement,
      adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
      or
      similar law of any jurisdiction relating to the Corporation or any Significant
      Subsidiary thereof; (b) there is commenced against the Corporation or any
      Significant Subsidiary thereof any such case or proceeding that is not dismissed
      within 60 days after commencement; (c) the Corporation or any Significant
      Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief
      or other order approving any such case or proceeding is entered; (d) the
      Corporation or any Significant Subsidiary thereof suffers any appointment of
      any
      custodian or the like for it or any substantial part of its property that is
      not
      discharged or stayed within 60 days; (e) the Corporation or any Significant
      Subsidiary thereof makes a general assignment for the benefit of creditors;
      (f)
      the Corporation or any Significant Subsidiary thereof calls a meeting of its
      creditors with a view to arranging a composition, adjustment or restructuring
      of
      its debts; or (g) the Corporation or any Significant Subsidiary thereof, by
      any
      act or failure to act, expressly indicates its consent to, approval of or
      acquiescence in any of the foregoing or takes any corporate or other action
      for
      the purpose of effecting any of the foregoing.

    

    “Base
      Conversion Price”
shall
      have the meaning set forth in Section 5(c)(iv). 

    

    “Buy-In”
shall
      have the meaning set forth in Section 5(b)(iii).

    

    “Change
      of Control Transaction”
means
      the occurrence after the date hereof of any of (a) 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 Corporation,
      by
      contract or otherwise) of in excess of 33% of the voting securities of the
      Corporation, or (b) a replacement at one time or within a one year period of
      more than one-half of the members of the Corporation’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 (c) the execution by the Corporation
      of
      an agreement to which the Corporation is a party or by which it is bound,
      providing for any of the events set forth above in (a) or (b).

    

    “Closing”
means
      closing of the purchase and sale of the Preferred Stock.

     

    “Closing
      Date”
means
      the Trading Day when all of the Transaction Documents have been executed and
      delivered by the applicable parties thereto, and all conditions precedent to
      (i)
      the Holders’ obligations to pay the Subscription Amount and (ii) the
      Corporation’s obligations to deliver the shares of Preferred Stock and Warrants
      have been satisfied or waived. 

    

    “Commission”
means
      the Securities and Exchange Commission.

    

    

    
      
        
           

        

        
          12

          
            

          

        

        
           

        

      

    

     

     

    “Common
      Stock”
means
      the Corporation’s common stock, par value $0.01 per share, and stock of any
      other class into which such shares may hereafter have been reclassified or
      changed.

    

    “Common
      Stock Outstanding”
shall
      have the meaning set forth in Section 5(c)(vi).

    

    “Conversion
      Amount”
means
      the sum of the Stated Value at issue.

    

    “Conversion
      Date”
shall
      have the meaning set forth in Section 5(b)(i).

    

    “Conversion
      Shares”
means,
      collectively, the shares of Common Stock into which the shares of Preferred
      Stock are convertible in accordance with the terms hereof.

    

    “Conversion
      Shares Registration Statement”
means
      a
      registration statement that meets the requirements of the Registration Rights
      Agreement and registers the resale of all Conversion Shares by the Holder,
      who
      shall be named as a “selling stockholder” thereunder, all as provided in the
      Registration Rights Agreement.

    

    “Dilutive
      Issuance”
shall
      have the meaning set forth in Section 5(c)(iv).

    

    “Dilutive
      Issuance Notice”
shall
      have the meaning set forth in Section 5(c)(iv).

    

    “Dividend
      Payment Date”
shall
      have the meaning set forth in Section 2(a).

    

    “Effective
      Date”
means
      the date that the Conversion Shares Registration Statement is declared effective
      by the Commission.

    

    “Equity
      Conditions”
Unless
      waived by a Holder as to a particular event (which waiver shall apply only
      to
      such Holder), as of such event date, the following conditions have been met:
      (i)
      the Corporation shall have duly honored all conversions and redemptions
      scheduled to occur or occurring prior to such date, (ii) there is an effective
      Conversion Shares Registration Statement pursuant to which the Holders are
      permitted to utilize the prospectus thereunder to resell all of the Conversion
      Shares issued to the Holders and all of the Conversion Shares as are issuable
      to
      the Holders upon conversion in full of the Preferred Stock (and the Corporation
      believes, in good faith, that such effectiveness will continue uninterrupted
      for
      the foreseeable future), (iii) the Common Stock is listed for trading on the
      Principal Market (and the Corporation believes, in good faith, that trading
      of
      the Common Stock on the Principal Market will continue uninterrupted for the
      foreseeable future), (iv) all liquidated damages and other amounts owing in
      respect of the Preferred Stock shall have been paid or will, concurrently with
      the issuance of the Conversion Shares, be paid in cash; (v) there is a
      sufficient number of authorized but unissued and otherwise unreserved shares
      of
      Common Stock for the issuance of all the Conversion Shares as are issuable
      to
      the Holder upon conversion in full of the Preferred Stock; (vi) no Triggering
      Event has occurred and is continuing; (vii) all of the Conversion Shares
      issuable to the Holder upon conversion in full of the Preferred Stock will
      not
      violate the limitations set forth in Sections 5(a)(ii) and (iii); and (viii)
      no
      public announcement of a pending or proposed Fundamental Transaction or Change
      of Control Transaction has occurred that has not been consummated.

    

    
      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

    

    

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

    

    “Exempt
      Issuance”
means
      the issuance of (a) shares of Common Stock or options to employees, officers
      or
      directors of the Corporation pursuant to any stock or option plan duly adopted
      by a majority of the non-employee members of the Board of Directors of the
      Corporation or a majority of the members of a committee of non-employee
      directors established for such purpose, (b) securities upon the exercise of
      or
      conversion of any securities issued hereunder, convertible securities, options
      or warrants issued and outstanding on the date of the Purchase Agreement,
      provided that such securities have not been amended since the date of the
      Purchase Agreement to increase the number of such securities or to decrease
      the
      exercise or conversion price of any such securities, and (c) securities issued
      pursuant to acquisitions or strategic transactions, provided any such issuance
      shall only be to a Person which is, itself or through its subsidiaries, an
      operating company in a business synergistic with the business of the Corporation
      and in which the Corporation receives benefits in addition to the investment
      of
      funds, but shall not include a transaction in which the Corporation is issuing
      securities primarily for the purpose of raising capital or to an entity whose
      primary business is investing in securities. 

    

    “Fundamental
      Transaction”
means
      the occurrence after the date hereof of any of (a) the Corporation effects
      any
      merger or consolidation of the Corporation with or into another Person, (b)
      the
      Corporation 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 Corporation 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 Corporation 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.

    

    “Holder”
shall
      have the meaning given such term in Section 1 hereof.

    

    “Junior
      Securities”
means
      the Common Stock and all other equity or equity equivalent securities of the
      Corporation other than those securities that are (a) outstanding on the Original
      Issue Date and (b) which are explicitly senior in rights or liquidation
      preference to the Preferred Stock.

    

    “Liquidation”
shall
      have the meaning given such term in Section 4. 

    

    “Notice
      of Conversion”
shall
      have the meaning given such term in Section 5(a). 

    

    “Original
      Issue Date”
shall
      mean the date of the first issuance of any shares of the Preferred Stock
      regardless of the number of transfers of any particular shares of Preferred
      Stock and regardless of the number of certificates which may be issued to
      evidence such Preferred Stock.

     

     

    
 

    
      
        
           

        

        
          14

          
            

          

        

        
           

        

      

    

    

    

    “Person”
means
      a
      corporation, an association, a partnership, an organization, a business, an
      individual, a government or political subdivision thereof or a governmental
      agency.

    

    “Principal
      Market”
      initially means the Over-the-Counter Bulletin Board and shall also include
      the
      American Stock Exchange, NASDAQ Small-Cap Market, the New York Stock Exchange,
      or the NASDAQ National Market, whichever is at the time the principal trading
      exchange or market for the Common Stock, based upon share volume.

     

    “Purchase
      Agreement”
means
      the Securities Purchase Agreement, dated as of the Original Issue Date, to
      which
      the Corporation and the original Holders 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 Original Issue Date, to
      which
      the Corporation and the original Holders are parties, as amended, modified
      or
      supplemented from time to time in accordance with its terms.

    

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

    

    “Set
      Price”
shall
      have the meaning set forth in Section 5(c)(i).

    

    “Share
      Delivery Date”
shall
      have the meaning given such term in Section 5(b). 

    

    “Stated
      Value”
shall
      have the meaning given such term in Section 1.

    

    “Subscription
      Amount”
shall
      mean, the amount to be paid by the Purchaser for the Preferred Stock purchased
      pursuant to the Purchase Agreement as specified therein.

    

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

    

    “Trading
      Day”
shall
      mean any day during which the Principal Market shall be open for
      business.

    

    “Transaction
      Documents”
shall
      mean the Purchase Agreement and all agreements entered into in connection
      therewith, including the Registration Rights Agreement.

    

    “Triggering
      Event”
shall
      have the meaning set forth in Section 7(b).

    

    “Triggering
      Redemption Amount”
for
      each share of Preferred Stock means the sum of (i) the greater of (A) 130%
      of
      the Stated Value and (B) the product of (a) the VWAP on the Trading Day
      immediately preceding the date of the Triggering Event and (b) the Stated Value
      divided by the then Set Price, (ii) all accrued but unpaid dividends thereon
      and
      (iii) all liquidated damages and other amounts due in respect of the Preferred
      Stock

    

    

    
      
        
           

        

        
          15

          
            

          

        

        
           

        

      

    

    

    “VWAP”
means,
      for any date, the price determined by the first of the following clauses that
      applies: (a) if the Common Stock is then listed or quoted on a Principal Market,
      the daily volume weighted average price of the Common Stock for such date (or
      the nearest preceding date) on the Principal Market on which the Common Stock
      is
      then listed or quoted as reported by Bloomberg Financial L.P. (based on a
      Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b)  if
      the Common Stock is not then listed or quoted on a Principal Market and if
      prices for the Common Stock are then quoted on the OTC Bulletin Board, the
      volume weighted average price of the Common Stock for such date (or the nearest
      preceding date) on the OTC Bulletin Board; (c)  if the Common Stock is not
      then listed or quoted on the OTC Bulletin Board 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 (d) in all other cases, the fair market value
      of a share of Common Stock as determined by an independent appraiser selected
      in
      good faith by the Purchasers and reasonably acceptable to the
      Corporation.

    

    Section
      9. Fundamental
      Transactions and Change of Control Transactions.
      If a
      Fundamental Transaction occurs, then upon any subsequent conversion of shares
      of
      Preferred Stock, 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 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 Set 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 Corporation shall apportion
      the
      Set 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 shares of Preferred Stock following such Fundamental Transaction.
      To the extent necessary to effectuate the foregoing provisions, any successor
      to
      the Corporation or surviving entity in such Fundamental Transaction shall issue
      to the Holder new preferred stock consistent with the foregoing provisions
      and
      evidencing the Holder’s right to convert such preferred stock 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 Section 9 and insuring
      that the Preferred Stock (or any such replacement security) will be similarly
      adjusted upon any subsequent transaction analogous to a Fundamental Transaction
      or Change of Control Transaction. In the event of a Fundamental Transaction
      or a
      Change of Control Transaction, then at the request of the Holder delivered
      before the 90th day after such Fundamental Transaction, the Corporation (or
      any
      such successor or surviving entity) will purchase the Preferred Stock from
      the
      Holder for a purchase price, payable in cash within five Trading Days after
      such
      request (or, if later, on the effective date of the Fundamental Transaction),
      equal to the Triggering Redemption Amount on such date.

     

     

    
      
        
           

        

        
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    Section
      10. Miscellaneous.
      

    

    (a) If
      (i)
      the Corporation shall declare a dividend (or any other distribution) on the
      Common Stock, (ii) the Corporation shall declare a special nonrecurring cash
      dividend on or a redemption of the Common Stock, (iii) the Corporation shall
      authorize the granting to all holders of Common Stock rights or warrants to
      subscribe for or purchase any shares of capital stock of any class or of any
      rights, (iv) the approval of any stockholders of the Corporation shall be
      required in connection with any reclassification of the Common Stock, any
      consolidation or merger to which the Corporation is a party, any sale or
      transfer of all or substantially all of the assets of the Corporation, of any
      compulsory share exchange whereby the Common Stock is converted into other
      securities, cash or property;, or (v) the Corporation shall authorize the
      voluntary or involuntary dissolution, liquidation or winding up of the affairs
      of the Corporation; then the Corporation shall cause to be filed at each office
      or agency maintained for the purpose of conversion of the Preferred Stock,
      and
      shall caused to be mailed to the Holders at their last addresses as they shall
      appear upon the stock books of the Corporation, 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 any 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 Common Stock
      of
      record shall be entitled to exchange their shares of 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 the Conversion Amount of
      Preferred Stock during the 20-day period commencing the date of such notice
      to
      the effective date of the event triggering such notice.

    

    (b) The
      Corporation 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 Preferred Stock, each as herein provided, 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 Common Stock
      as
      shall be issuable upon the conversion of all outstanding shares of Preferred
      Stock. The Corporation covenants that all shares of Common Stock that shall
      be
      so issuable shall, upon issue, be duly and validly authorized, issued and fully
      paid and nonassessable.

    

    (c)
      Upon
      a conversion hereunder the Corporation shall not be required to issue stock
      certificates representing fractions of shares of Common Stock, but may if
      otherwise permitted, make a cash payment in respect of any final fraction of
      a
      share based on the VWAP at such time. If any fraction of a Conversion Share
      would, except for the provisions of this Section, be issuable upon a conversion
      hereunder, the Corporation shall pay an amount in cash equal to the VWAP
      immediately prior to the applicable conversion multiplied by such
      fraction.

     

     

    
 

    
      
        
           

        

        
          17

          
            

          

        

        
           

        

      

    

    

    

    (d)
      The
      issuance of certificates for Common Stock on conversion of Preferred Stock
      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 Corporation 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 shares of Preferred Stock so converted.

    

    (e)
      To
      effect conversions or redemptions, as the case may be, of shares of Preferred
      Stock, a Holder shall not be required to surrender the certificate(s)
      representing such shares of Preferred Stock to the Corporation unless all of
      the
      shares of Preferred Stock represented thereby are so converted, in which case
      the Holder shall deliver the certificate representing such share of Preferred
      Stock promptly following the Conversion Date at issue. Shares of Preferred
      Stock
      converted into Common Stock or redeemed in accordance with the terms hereof
      shall be canceled and may not be reissued.

    

    (f)
      Any
      and all notices or other communications or deliveries to be provided by the
      Holders of the Preferred Stock hereunder, including, without limitation, any
      Notice of Conversion, shall be in writing and delivered personally, by facsimile
      or sent by a nationally recognized overnight courier service, addressed to
      the
      attention of the President of the Corporation addressed to One Technology Drive,
      Building H, Irvine, California, 92618, Fax Number: 949-949-727-2043, or to
      such
      other address or facsimile number as shall be specified in writing by the
      Corporation for such purpose. Any and all notices or other communications or
      deliveries to be provided by the Corporation hereunder shall be in writing
      and
      delivered personally, by facsimile or 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 Corporation, which address
      shall initially be the address of such Holder set forth on the signature pages
      of the Purchase Agreement, or such other address as the Corporation or a Holder
      may designate by ten days advance written notice to the other parties hereto.
      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 at the facsimile telephone number
      specified in this Section prior to 6:30 p.m. (New York City time) (with
      confirmation of transmission), (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 6:30 p.m. (New York City
      time) on any date and earlier than 11:59 p.m. (New York City time) on such
      date
      (with confirmation of transmission), (iii) five days after having been sent
      by
      registered or certified mail, return receipt requested, postage prepaid, (iv)
      one day after deposit with a nationally recognized overnight courier service,
      specifying next day delivery, with written verification of service, or (v)
      upon
      actual receipt by the party to whom such notice is required to be
      given.

    

    (g) For
      purposes hereof, a share of Preferred Stock is outstanding until such date
      as
      the Holder shall have received the Conversion Shares or redemption amount (as
      the case may be) issuable or payable to it in accordance with this Certificate
      of Designations.

     

    

    
      
        
           

        

        
          18

          
            

          

        

        
           

        

      

    

     

     

    (h) Except
      as
      expressly provided herein, no provision of this Certificate of Designation
      shall
      alter or impair the obligation of the Corporation, which is absolute and
      unconditional, to pay the liquidated damages (if any) on, the shares of
      Preferred Stock at the time, place, and rate, and in the coin or currency,
      herein prescribed. 

    

    (i) If
      a
      Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or
      destroyed, the Corporation shall execute and deliver, in exchange and
      substitution for and upon cancellation of a mutilated certificate, or in lieu
      of
      or in substitution for a lost, stolen or destroyed certificate, a new
      certificate for the shares of Preferred Stock so mutilated, lost, stolen or
      destroyed but only upon receipt of evidence of such loss, theft or destruction
      of such certificate, and of the ownership hereof, and indemnity, if requested,
      all reasonably satisfactory to the Corporation. 

    

    (j) All
      questions concerning the construction, validity, enforcement and interpretation
      of this Certificate of Designation 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 Certificate of Designation 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 Certificate of Designation or the transactions contemplated
      hereby. If either party shall commence an action or proceeding to enforce any
      provisions of this Certificate of Designation, then the prevailing party in
      such
      action or proceeding shall be 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.

     

    (k) Any
      waiver by the Corporation or the Holder of a breach of any provision of this
      Certificate of Designation 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 Certificate of Designation. The failure of the Corporation or the Holder
      to
      insist upon strict adherence to any term of this Certificate of Designation
      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 Certificate of Designation. Any waiver must be in
      writing.

     

    

    
      
        
           

        

        
          19

          
            

          

        

        
           

        

      

    

    

    

    (l) If
      any
      provision of this Certificate of Designation is invalid, illegal or
      unenforceable, the balance of this Certificate of Designation 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. 

    

    (m) 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.

    

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

    

    (o) RESOLVED,
      FURTHER, that the Chairman, the president or any vice-president, and the
      secretary or any assistant secretary, of the Corporation be and they hereby
      are
      authorized and directed to prepare and file a Certificate of Designation of
      Preferences, Rights and Limitations in accordance with the foregoing resolution
      and the provisions of Nevada law.

    

    IN
      WITNESS WHEREOF, the undersigned have executed this Certificate this
      4th
      day of
      August 2006.

    

    __________________________

    Name:
      Lewis Jaffe

    Title:
      President

    

    

    

    

    

    

    

    

    

    

    

    

    
      
        
           

        

        
          20

          
            

          

        

        
           

        

      

    

    

    

    ANNEX
      A

    

    NOTICE
      OF
      CONVERSION

    

    (To
      be
      Executed by the Registered Holder in order to convert shares of Preferred
      Stock)

    

    The
      undersigned hereby elects to convert the number of shares of Convertible
      Preferred Stock indicated below, into shares of common stock, par value $0.001
      per share (the “Common
      Stock”),
      of
      Oxford Media, Inc., a Nevada corporation (the “Corporation”),
      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 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
      Corporation in accordance therewith. No fee will be charged to the Holder for
      any conversion, except for such transfer taxes, if any.

    

    Conversion
      calculations:

    

    Date
      to
      Effect Conversion

    _________________________________________

     

    Number
      of
      shares of Preferred Stock owned prior to Conversion

    _________________________________________

     

    Number
      of
      shares of Preferred Stock to be Converted

    _________________________________________

     

    Stated
      Value of shares of Preferred Stock to be Converted

    _________________________________________

     

    Number
      of
      shares of Common Stock to be Issued

    _________________________________________

     

    Applicable
      Set Price

    _________________________________________

     

    Number
      of
      shares of Preferred Stock subsequent to Conversion

    _________________________________________

    

    
      	 	
              [HOLDER]

            
	 	 	 
	 	
              By:

            	
              ______________________________

            
	 	 	
              Name:

            
	 	 	
              Title:

            

    

    
 

     

     

     21Exhibit
10.1

PURCHASE AND SALE
AGREEMENT

by and between

NOBLE ENERGY, INC.

and

COLDREN RESOURCES LP

dated

May 15, 2006

 

 

TABLE OF CONTENTS

	
   

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  	
  PURCHASE AND
  SALE

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.1

  	
   

  	
  Purchase and Sale of Assets

  	
   

  	
  1

  
	
  1.2

  	
   

  	
  Entech Properties

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
  PURCHASE PRICE

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Purchase Price; Method of Payment; Deposit

  	
   

  	
  3

  
	
  2.2

  	
   

  	
  Adjustments to Purchase Price

  	
   

  	
  4

  
	
  2.3

  	
   

  	
  Payment and Calculation of Estimated Adjusted
  Purchase Price and Payment at Closing

  	
   

  	
  5

  
	
  2.4

  	
   

  	
  Like-Kind Exchange Option

  	
   

  	
  6

  
	
  2.5

  	
   

  	
  Post-Closing Adjustment

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
  TITLE AND
  ENVIRONMENTAL MATTERS

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Title Due Diligence

  	
   

  	
  6

  
	
  3.2

  	
   

  	
  Environmental Due Diligence

  	
   

  	
  10

  
	
  3.3

  	
   

  	
  Notice of Breaches of Representations and Warranties
  Pre-Closing

  	
   

  	
  12

  
	
  3.4

  	
   

  	
  Adjustments to Purchase Price for Title Defects,
  Environmental Defects and Breaches of Representations and Warranties

  	
   

  	
  12

  
	
  3.5

  	
   

  	
  Deferred Claims and Disputes

  	
   

  	
  12

  
	
  3.6

  	
   

  	
  Option to Cure Title Defects Post-Closing

  	
   

  	
  13

  
	
  3.7

  	
   

  	
  Limited Warranty of Title

  	
   

  	
  14

  
	
  3.8

  	
   

  	
  Notices to Holders of Preferential Purchase Rights

  	
   

  	
  14

  
	
  3.9

  	
   

  	
  Exercise of Preferential Purchase Rights

  	
   

  	
  15

  
	
  3.10

  	
   

  	
  Consents to Assignment

  	
   

  	
  15

  
	
  3.11

  	
   

  	
  Casualty Loss

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES OF NOBLE

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Existence

  	
   

  	
  16

  
	
  4.2

  	
   

  	
  Power

  	
   

  	
  16

  
	
  4.3

  	
   

  	
  Authorization

  	
   

  	
  16

  
	
  4.4

  	
   

  	
  Brokers

  	
   

  	
  17

  
	
  4.5

  	
   

  	
  Foreign Person

  	
   

  	
  17

  
	
  4.6

  	
   

  	
  Litigation

  	
   

  	
  17

  
	
  4.7

  	
   

  	
  Material Contracts

  	
   

  	
  17

  
	
  4.8

  	
   

  	
  No Violation of Laws

  	
   

  	
  18

  
	
  4.9

  	
   

  	
  Royalties, Etc

  	
   

  	
  18

  
	
  4.10

  	
   

  	
  Personal Property

  	
   

  	
  18

  
	
  4.11

  	
   

  	
  Consents

  	
   

  	
  19

  
	
  4.12

  	
   

  	
  Preferential Rights

  	
   

  	
  19

  
	
  4.13

  	
   

  	
  Current Commitments

  	
   

  	
  19

  
	
  4.14

  	
   

  	
  Environmental Orders/Notices

  	
   

  	
  19

  
	
  4.15

  	
   

  	
  Gas Prepayment Arrangements; Take-or-Pay

  	
   

  	
  19

  
	
  4.16

  	
   

  	
  Production Taxes

  	
   

  	
  19

  
	
  4.17

  	
   

  	
  Leases

  	
   

  	
  20

  
	
  4.18

  	
   

  	
  Well Status

  	
   

  	
  20

  
	
  4.19

  	
   

  	
  Suspense

  	
   

  	
  20

  

 

 i
 

 

 

	
   

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.20

  	
   

  	
  Additional Representations and Warranties

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES OF PURCHASER

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Existence

  	
   

  	
  20

  
	
  5.2

  	
   

  	
  Power

  	
   

  	
  20

  
	
  5.3

  	
   

  	
  Authorization

  	
   

  	
  21

  
	
  5.4

  	
   

  	
  Brokers

  	
   

  	
  21

  
	
  5.5

  	
   

  	
  Further Distribution

  	
   

  	
  21

  
	
  5.6

  	
   

  	
  Financial Statements

  	
   

  	
  21

  
	
  5.7

  	
   

  	
  Matters Affecting United States Minerals Management
  Service Approval

  	
   

  	
  21

  
	
  5.8

  	
   

  	
  Purchaser Financing

  	
   

  	
  22

  
	
  5.9

  	
   

  	
  Bankruptcy Proceedings

  	
   

  	
  22

  
	
  5.10

  	
   

  	
  Additional Representations and Warranties

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
  PRE-CLOSING
  OBLIGATIONS OF NOBLE

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Operations

  	
   

  	
  22

  
	
  6.2

  	
   

  	
  HSR Act

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
  PRE-CLOSING
  OBLIGATIONS OF PURCHASER

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Confidentiality

  	
   

  	
  23

  
	
  7.2

  	
   

  	
  Return of Data

  	
   

  	
  24

  
	
  7.3

  	
   

  	
  Notice of Certain Title Matters and Imbalance

  	
   

  	
  24

  
	
  7.4

  	
   

  	
  Indemnity Regarding Access

  	
   

  	
  24

  
	
  7.5

  	
   

  	
  HSR Act

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
  NOBLE’S
  CONDITIONS OF CLOSING

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Representations and Warranties

  	
   

  	
  25

  
	
  8.2

  	
   

  	
  Performance

  	
   

  	
  25

  
	
  8.3

  	
   

  	
  Officer or Attorney-in-Fact Certificate

  	
   

  	
  25

  
	
  8.4

  	
   

  	
  Operatorship Forms

  	
   

  	
  25

  
	
  8.5

  	
   

  	
  Bonds

  	
   

  	
  25

  
	
  8.6

  	
   

  	
  Insurance

  	
   

  	
  25

  
	
  8.7

  	
   

  	
  Certificate of Authority

  	
   

  	
  25

  
	
  8.8

  	
   

  	
  Exemption Certificates

  	
   

  	
  26

  
	
  8.9

  	
   

  	
  HSR Act

  	
   

  	
  26

  
	
  8.10

  	
   

  	
  Casualty Loss or Condemnation

  	
   

  	
  26

  
	
  8.11

  	
   

  	
  Purchase Price Adjustments

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
  PURCHASER’S
  CONDITIONS OF CLOSING

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Representations and Warranties

  	
   

  	
  26

  
	
  9.2

  	
   

  	
  Performance

  	
   

  	
  26

  
	
  9.3

  	
   

  	
  Officer or Attorney-in-Fact Certificate

  	
   

  	
  26

  
	
  9.4

  	
   

  	
  Litigation

  	
   

  	
  26

  
	
  9.5

  	
   

  	
  Certificate of Authority

  	
   

  	
  27

  
	
  9.6

  	
   

  	
  Operatorship Forms

  	
   

  	
  27

  
	
  9.7

  	
   

  	
  HSR Act

  	
   

  	
  27

  
	
  9.8

  	
   

  	
  Casualty Loss

  	
   

  	
  27

  

 

 ii
 

 

 

	
   

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.9

  	
   

  	
  Purchase Price Adjustments

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
  CLOSING

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Time and Place of Closing

  	
   

  	
  27

  
	
  10.2

  	
   

  	
  Closing Obligations

  	
   

  	
  27

  
	
  10.3

  	
   

  	
  Post Closing Obligations

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  	
  ADDITIONAL
  AGREEMENTS

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.1

  	
   

  	
  Calculation of Adjusted Purchase Price

  	
   

  	
  28

  
	
  11.2

  	
   

  	
  Suspended Funds

  	
   

  	
  29

  
	
  11.3

  	
   

  	
  Receipts and Credits

  	
   

  	
  29

  
	
  11.4

  	
   

  	
  Assumption of Liabilities; Cross Indemnity

  	
   

  	
  29

  
	
  11.5

  	
   

  	
  Imbalances

  	
   

  	
  33

  
	
  11.6

  	
   

  	
  Transition Agreement

  	
   

  	
  34

  
	
  11.7

  	
   

  	
  Further Assurances

  	
   

  	
  34

  
	
  11.8

  	
   

  	
  Material Contracts

  	
   

  	
  34

  
	
  11.9

  	
   

  	
  Marketing Contracts and Calls on Production

  	
   

  	
  34

  
	
  11.10

  	
   

  	
  Gas Processing Arrangement

  	
   

  	
  34

  
	
  11.11

  	
   

  	
  Payout Balances

  	
   

  	
  34

  
	
  11.12

  	
   

  	
  Employee and Benefit Matters

  	
   

  	
  34

  
	
  11.13

  	
   

  	
  Amendment of Schedules

  	
   

  	
  36

  
	
  11.14

  	
   

  	
  Gas Processing

  	
   

  	
  36

  
	
  11.15

  	
   

  	
  Description of Parties’ Intent

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  	
  TERMINATION

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.1

  	
   

  	
  Right of Termination

  	
   

  	
  36

  
	
  12.2

  	
   

  	
  Effect of Termination

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  	
  TAXES

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.1

  	
   

  	
  Apportionment of Ad Valorem and Property Taxes

  	
   

  	
  37

  
	
  13.2

  	
   

  	
  Sales Taxes

  	
   

  	
  37

  
	
  13.3

  	
   

  	
  Other Taxes

  	
   

  	
  38

  
	
  13.4

  	
   

  	
  Cooperation

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
   

  	
  DOCUMENT
  RETENTION

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.1

  	
   

  	
  Inspection

  	
   

  	
  38

  
	
  14.2

  	
   

  	
  Destruction

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 15

  	
   

  	
  INDEPENDENT
  INVESTIGATION AND DISCLAIMER

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.1

  	
   

  	
  Independent Investigation and Disclaimer

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 16

  	
   

  	
  ENVIRONMENTAL
  INDEMNITY

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.1

  	
   

  	
  Physical and Environmental Conditions

  	
   

  	
  40

  
	
  16.2

  	
   

  	
  General Environmental Indemnity

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 17

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.1

  	
   

  	
  Dispute Resolution

  	
   

  	
  41

  

 

 iii
 

 

 

	
   

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.2

  	
   

  	
  Governing Law

  	
   

  	
  43

  
	
  17.3

  	
   

  	
  Entire Agreement

  	
   

  	
  43

  
	
  17.4

  	
   

  	
  Waiver

  	
   

  	
  44

  
	
  17.5

  	
   

  	
  Captions

  	
   

  	
  44

  
	
  17.6

  	
   

  	
  Assignment

  	
   

  	
  44

  
	
  17.7

  	
   

  	
  Notices

  	
   

  	
  44

  
	
  17.8

  	
   

  	
  Expenses

  	
   

  	
  46

  
	
  17.9

  	
   

  	
  Severability

  	
   

  	
  46

  
	
  17.10

  	
   

  	
  Publicity

  	
   

  	
  46

  
	
  17.11

  	
   

  	
  Use of Noble’s Name

  	
   

  	
  46

  
	
  17.12

  	
   

  	
  Consequential Damages

  	
   

  	
  46

  
	
  17.13

  	
   

  	
  No Third-Party Beneficiary

  	
   

  	
  46

  
	
  17.14

  	
   

  	
  Survival; Limitation of Liability

  	
   

  	
  46

  
	
  17.15

  	
   

  	
  Counterparts and Exhibits

  	
   

  	
  47

  
	
  17.16

  	
   

  	
  Operatorship Matters

  	
   

  	
  47

  
	
  17.17

  	
   

  	
  Conflict With Assignment

  	
   

  	
  48

  
	
  17.18

  	
   

  	
  DTPA Waiver

  	
   

  	
  48

  
	
  17.19

  	
   

  	
  Redhibition Waiver

  	
   

  	
  48

  
	
  17.20

  	
   

  	
  UTPCPL Waiver

  	
   

  	
  48

  
	
  17.21

  	
   

  	
  Recordation

  	
   

  	
  48

  
	
  17.22

  	
   

  	
  MMS Approval

  	
   

  	
  49

  
	
  17.23

  	
   

  	
  Additional Documents and Actions

  	
   

  	
  49

  
	
  17.24

  	
   

  	
  Cooperation in Connection with Regulatory Filings

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 18

  	
   

  	
  DEFINITIONS AND
  REFERENCES

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.1

  	
   

  	
  Certain Defined Terms

  	
   

  	
  50

  
	
  18.2

  	
   

  	
  Certain Additional Defined Terms

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibits:

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit “A”

  	
   

  	
  —

  	
  Leasehold
  Interests

  	
   

  	
   

  
	
  Exhibit “A-1”

  	
   

  	
  —

  	
  Wells

  	
   

  	
   

  
	
  Exhibit “A-2”

  	
   

  	
  —

  	
  Orders and
  Contracts

  	
   

  	
   

  
	
  Exhibit “A-3”

  	
   

  	
  —

  	
  Rights-of-Way,
  Easements, etc.

  	
   

  	
   

  
	
  Exhibit “A-4”

  	
   

  	
  —

  	
  Platforms

  	
   

  	
   

  
	
  Exhibit “B”

  	
   

  	
  —

  	
  Excluded Assets

  	
   

  	
   

  
	
  Exhibit “C”

  	
   

  	
  —

  	
  Entech
  Properties

  	
   

  	
   

  
	
  Exhibit “C-1”

  	
   

  	
  —

  	
  Entech Wells

  	
   

  	
   

  

 

 iv
 

 

 

	
  SCHEDULES:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 2.4(a)

  	
   

  	
  —

  	
  Form of
  Assignment of Purchase and Sale Agreement

  	
   

  	
   

  
	
  Schedule 3.1(c)

  	
   

  	
  —

  	
  Allocated Value

  	
   

  	
   

  
	
  Schedule 3.9

  	
   

  	
  —

  	
  Form of
  Preferential Purchase Right Election Letter

  	
   

  	
   

  
	
  Schedule 4.6

  	
   

  	
  —

  	
  Litigation Assumed
  by Purchaser

  	
   

  	
   

  
	
  Schedule 4.7

  	
   

  	
  —

  	
  Defaults

  	
   

  	
   

  
	
  Schedule 4.8

  	
   

  	
  —

  	
  Violation of
  Laws

  	
   

  	
   

  
	
  Schedule 4.9

  	
   

  	
  —

  	
  Royalties

  	
   

  	
   

  
	
  Schedule 4.10

  	
   

  	
  —

  	
  Personal
  Property

  	
   

  	
   

  
	
  Schedule 4.11

  	
   

  	
  —

  	
  Consents

  	
   

  	
   

  
	
  Schedule 4.12

  	
   

  	
  —

  	
  Preferential
  Purchase Rights

  	
   

  	
   

  
	
  Schedule 4.13

  	
   

  	
  —

  	
  Current
  Commitments

  	
   

  	
   

  
	
  Schedule 4.14(a)

  	
   

  	
  —

  	
  Environmental
  Orders

  	
   

  	
   

  
	
  Schedule 4.14(b)

  	
   

  	
  —

  	
  Environmental
  Notices

  	
   

  	
   

  
	
  Schedule 4.16

  	
   

  	
  —

  	
  Production Taxes

  	
   

  	
   

  
	
  Schedule 4.17

  	
   

  	
  —

  	
  Leases

  	
   

  	
   

  
	
  Schedule 4.18

  	
   

  	
  —

  	
  Well Status

  	
   

  	
   

  
	
  Schedule 4.19

  	
   

  	
  —

  	
  Suspense Funds

  	
   

  	
   

  
	
  Schedule 8.6

  	
   

  	
  —

  	
  Purchaser’s
  Insurance

  	
   

  	
   

  
	
  Schedule 10.2(a)(1)

  	
   

  	
  —

  	
  Assignment and
  Bill of Sale (Texas)

  	
   

  	
   

  
	
  Schedule 10.2(a)(2)

  	
   

  	
  —

  	
  Assignment and
  Bill of Sale (Louisiana)

  	
   

  	
   

  
	
  Schedule 10.2(a)(3)

  	
   

  	
  —

  	
  Assignment and
  Bill of Sale (Mississippi)

  	
   

  	
   

  
	
  Schedule 10.2(a)(4)

  	
   

  	
  —

  	
  Assignment and Bill
  of Sale (Alabama)

  	
   

  	
   

  
	
  Schedule 10.2(a)(5)

  	
   

  	
  —

  	
  Assignment and
  Bill of Sale (Record Title)

  	
   

  	
   

  
	
  Schedule 10.2(a)(6)

  	
   

  	
  —

  	
  Assignment and
  Bill of Sale (Operating Rights)

  	
   

  	
   

  
	
  Schedule 11.6

  	
   

  	
  —

  	
  Transition
  Agreement

  	
   

  	
   

  
	
  Schedule 11.9

  	
   

  	
  —

  	
  Marketing
  Contracts and Calls on Production

  	
   

  	
   

  
	
  Schedule 11.11

  	
   

  	
  —

  	
  Payout Balances

  	
   

  	
   

  
									

 

 v

 

 

PURCHASE
AND SALE AGREEMENT

This Purchase and
Sale Agreement (“Agreement”)
is made and entered into this the 15th day of May 2006, by and between NOBLE
ENERGY, INC., a Delaware corporation (“Noble”), and COLDREN RESOURCES LP, a Delaware
limited partnership (“Purchaser”).  Noble and Purchaser are sometimes hereinafter
referred to collectively as the “Parties” and individually as a “Party”.

WHEREAS, Noble
desires to sell to Purchaser, and Purchaser desires to purchase from Noble,
certain oil and gas properties and related assets on the terms and conditions
set forth in this Agreement;

NOW, THEREFORE,
for and in consideration of the premises and of the mutual covenants and
agreements contained herein, Noble and Purchaser hereby agree as follows:

ARTICLE 1

PURCHASE AND SALE

1.1                                 Purchase and Sale of Assets.  On
the Closing Date, but effective as of 7:00 a.m. Central Time, March 1, 2006
(the “Effective Time”), subject to the terms and conditions of
this Agreement, Noble agrees to sell and convey to Purchaser, and Purchaser
agrees to purchase and pay for, all of Noble’s right, title and interest in and
to the following properties and related assets (collectively, the “Assets”):

(a)                                  The oil, gas and mineral leasehold estates
described in Exhibit
“A”, together with all
of Noble’s rights in respect of any pooled, communitized or unitized acreage of
which any such interest is a part (collectively, the “Leasehold
Interests”);

(b)                                 (i) all wells, including, but not limited to,
the wells described in Exhibit
“A-1” (the “Wells”), equipment, pipelines, flowlines and
facilities (including the platforms described on Exhibit “A-4” (the “Platforms”)),
that are located on and used directly in connection with the production or
treatment of oil and gas from the Leasehold Interests or that are located off
the Leasehold Interests but used directly in connection with the production or
treatment of oil and gas from the Leasehold Interests, (ii) all Hydrocarbon
volumes attributable to the Leasehold Interests and produced on or after the Effective
Time, (iii) to the extent same are assignable or transferable by Noble without
restriction under Applicable Law or third-party agreements (without the payment
of any funds or other consideration), all orders, contracts, agreements and
other instruments (other than instruments subject or relating to
attorney/client privilege, and production sales agreements with any Affiliates
or divisions of Noble, which will be terminated effective as of the Closing
Date), which are described in Exhibit
“A-2” (collectively, the
“Orders
and Contracts”), (iv) to
the extent same are assignable or transferable by Noble under Applicable Law or
third-party agreements (without the payment of any funds or other
consideration), all rights-of-way, easements, authorizations, permits and
similar rights and interests that are used directly in connection with the
operation of the Assets which are described in Exhibit “A-3”,
and (v) all other rights, privileges, benefits, powers and obligations
conferred or imposed upon the owner and holder of the Leasehold Interests; and

 1
 

 

 

(c)                                  To the extent same are attributable or
allocable to the Leasehold Interests and not subject or relating to
attorney/client privilege or a third party restriction on disclosure and such
restriction is not removed or otherwise satisfied, originals, to the extent
available, or, if originals are not available to Noble, copies of the following
records:  (i) lease and land records,
(ii) development geological records, (iii) operations, production and
engineering records, (iv) facility and well records, and (v) to the extent
requested by Purchaser and to the extent Noble is reasonably capable of
providing same, certain data base information, in each case excluding any
exploration geological records, any geophysical data, any interpretive or
forecast data, and any such records or data that are not assignable pursuant to
the terms of Applicable Law or third party agreements (without the payment of
any funds or other consideration) (collectively, the “Records”);

The Parties acknowledge
that the Parties intend that, pursuant to this Agreement, Noble shall convey
and Purchaser shall purchase, except for the Excluded Assets, any and all of
Noble’s right, title, and interest in the leases described on Exhibit “A”, including all of Noble’s
right, title and interest in and to all depths associated with the leases
described on Exhibit “A”.

SAVE AND EXCEPT,
and the Assets shall not include, the assets and properties described in Exhibit “B” and any other assets and
properties excluded pursuant to the terms hereof (the “Excluded Assets”).

1.2                                 Entech Properties. 
Pursuant to that certain Amended and Restated Participation Agreement
dated December 27, 1993 by and between Noble (formerly known as Energy
Development Corporation) and Entech Enterprises, Inc. (“Entech”), Noble assigned five percent (5%) of its
interest in the properties identified on Exhibit “C” and Exhibit “C-1” to Entech.  Entech has not divested itself of its
interest in said properties. Under the Amended and Restated Participation
Agreement, in the event that Noble receives an offer from a third party to
purchase all or a portion of its interest in the properties identified on Exhibit “C” and Exhibit “C-1”, Entech shall have the right to cause Noble
to purchase Entech’s interest in such properties or cause said interest to be
purchased on the same terms and conditions applicable to the sale of Noble’s
interest.  Accordingly, upon execution of
this Agreement, Noble will give Entech written notice of the proposed price and
all of the pertinent terms and conditions of the proposed sale, and Noble shall
promptly provide Purchaser with a copy of all correspondence sent to or
received from Entech with respect thereto. Should Entech elect to sell its
interests, Purchaser hereby agrees that it shall negotiate in good faith an
agreement to purchase the Entech interests from Entech on the same terms and
conditions applicable to the sale of Noble’s interest hereunder
(proportionately reduced as is commensurate with the price to be paid for the
Entech interests).  The Entech interest
will be priced on the same basis as Noble’s interests and the purchase thereof
will be subject to the same terms and conditions as Noble’s interests
(proportionately reduced as is commensurate with the price to be paid for the
Entech interests).

 2
 

 

 

ARTICLE 2

PURCHASE PRICE

2.1                                 Purchase Price; Method of Payment; Deposit.

(a)                                  The purchase price for the Assets shall be
$625,000,000 (the “Purchase Price”), which amount shall be adjusted as provided in Section 2.2.

(b)                                 All amounts required under this Article 2 to
be paid by any Party to the other Party shall be made by wire transfer of
immediately available funds to an account designated by the payee thereof,
which designation shall be made not later than two (2) Business Days prior to
the date such payment is due.

(c)                                  On May 16, 2006, Purchaser shall deliver to
JPMorgan Chase Bank, N.A. (the “Escrow Agent”), an amount equal to $20,000,000, and Purchaser shall deliver an
additional $30,000,000 to the Escrow Agent within twelve (12) Business Days
after the date hereof pursuant to that certain letter guarantee of even date
herewith from First Reserve Fund X, L.P. (collectively, the “Deposit”).

(d)                                 The Deposit shall be held by the Escrow Agent
and distributed as follows:

(i)                                     if this Agreement is terminated by mutual
consent of the Parties as provided in Section 12.1(a), the Deposit shall be
returned by the Escrow Agent to Purchaser;

(ii)                                  if this Agreement is terminated by either
Party pursuant to the termination right provided in Article 12 and at such time
Noble has not performed in all material respects its obligations hereunder or
has materially breached any representation and warranty, and has been unwilling
or unable to perform, and Purchaser has performed, or has been willing and able
to perform, in all material respects the obligations to be performed by it at
or prior to Closing (and Noble’s failure is not due to a breach by Purchaser of
its obligations hereunder), Purchaser shall have the right to have the Deposit returned
by the Escrow Agent to Purchaser; or as an alternative to termination under
Article 12, Purchaser shall have the right to specific performance;

(iii)                               if this Agreement is terminated by either
Party pursuant to the termination right provided in Article 12 and at such time
Noble has performed, or been willing and able to perform, in all material
respects its obligations hereunder and Purchaser has been unwilling or unable
to perform, or has materially breached any representation or warranty by Purchaser
or failed to perform in all material respects the obligations to be performed
by it at or prior to Closing (and Purchaser’s failure is not due to a breach by
Noble of its obligations hereunder), Noble shall have the right to have the
Deposit released by the Escrow Agent to Noble as liquidated damages, in which
case Noble shall be free immediately to enjoy all rights of ownership of the
Assets, and to sell, transfer, encumber or otherwise dispose of the Assets to
any third party without restriction under this Agreement;

(iv)                              if this Agreement is terminated and neither
Party is in material default hereunder, the Deposit will be returned by the
Escrow Agent to Purchaser; and

 3
 

 

 

(v)                                 if Closing occurs, Noble shall (or shall
cause the Escrow Agent to) (A) if Noble has elected to effect a like-kind
exchange pursuant to Section 2.4, (1) return the Deposit to Purchaser or (2) if
Purchaser so directs in writing, transfer the Deposit to the qualified
escrow/trust account or (B) if Noble has not elected to effect a like-kind
exchange pursuant to Section 2.4, apply the Deposit towards the Purchase Price.

(e)                                  Purchaser and Noble will enter into a form of
escrow agreement (the “Deposit Escrow Agreement”) simultaneously with the execution of this
Agreement setting forth the specific terms regarding the Deposit, including
directing the Escrow Agent to invest the Deposit in an interest-bearing account
and providing that the Party entitled to receive the Deposit under this
Agreement shall also be entitled to receive all interest earned thereon.

(f)                                    Purchaser further acknowledges and agrees
that if Noble becomes entitled to the Deposit pursuant to the provisions of
Section 2.1(d)(iii), Noble’s damages under such circumstances would be
difficult to ascertain and Noble shall be entitled to liquidated damages in an
amount equal to the Deposit. 
Accordingly, the delivery to Noble of the Deposit as provided in Section
2.1(d)(iii) above shall be deemed to constitute the payment by Purchaser to Noble
of such liquidated damages, but in no event shall such delivery of the Deposit
as payment of liquidated damages constitute or be construed as a penalty.

2.2                                 Adjustments to Purchase Price.  The
Purchase Price for the Assets shall be adjusted as follows (the resulting
amount being herein referred to as the “Adjusted Purchase Price”):

(a)                                  The Purchase Price shall be increased by an
amount equal to the sum of the following amounts:

(i)                                     the amount of all expenses (net to Noble’s
interest) incurred and paid or to be paid by or on behalf of Noble that are
attributable to the ownership or operation of the Assets and to the period of
time from and after the Effective Time, including without limitation, capital
expenditures, royalties, ad valorem, property and similar taxes and
assessments, severance, sales and production taxes (but excluding income taxes
and franchise taxes), rentals and similar charges, amounts billed under
applicable operating agreements and prepaid expenses, but excluding all costs
and expenses associated with litigation for which Noble expressly retains
liability in this Agreement as described in Section 11.4(c);

(ii)                                  the amount equal to the aggregate sum of the
Allocated Value of each Asset designated with a negative value that is either
(A) purchased by a holder of a preferential purchase right covering such Asset
as contemplated in Section 3.9, (B) held back from the Closing pursuant to
Section 3.9 or 3.10 or (C) excluded from this Agreement pursuant to Section
3.2(c) or Section 3.11;

(iii)                               an amount equal to the sum of four and 50/100
dollars ($4.50) per mcf, less royalties, overrides and taxes, that the total
amount of net underproduction of the Assets reflect an Imbalance in excess of
2.1 bcf of gas; and

 4
 

 

 

(iv)                              an amount equal to the sum of all amounts for
which Noble is entitled to receive a Purchase Price increase pursuant to
Section 3.1(f).

(b)                                 The Purchase Price shall be decreased by an
amount equal to the sum of the following amounts (determined without
duplication):

(i)                                     the amount of all proceeds (net to Noble’s
interest) earned and received or to be received by or on behalf of Noble (other
than proceeds from the exercise by third parties of preferential rights to
purchase all or any portion of the Leasehold Interests) that are attributable
to the ownership or operation of the Assets from and after the Effective Time;

(ii)                                  an amount equal to the aggregate sum of the
Allocated Value of each Asset designated with a positive value that is either
purchased by a holder of a preferential purchase right covering such Asset as
contemplated in Section 3.9 or held back from the Closing pursuant to Section
3.9 or 3.10;

(iii)                               an amount equal to the aggregate of the Title
Defect Amounts, Environmental Defect Values and Damages for which Purchaser is
entitled to receive as a Purchase Price reduction pursuant to Section 3.4;

(iv)                              an amount equal to the aggregate sum of the
Allocated Value of each Asset designated with a positive value that is excluded
from this Agreement pursuant to Section 3.2(c) or Section 3.11;

(v)                                 an amount equal to the Adjustment Amount
referenced in Section 3.5;

(vi)                              an amount equal to the Defects Escrow Amount
as provided in Section 3.6; and

(vii)                           an amount equal to the sum of four and 50/100
dollars ($4.50) per mcf, less royalties, overrides and taxes, that the Assets reflect
an Imbalance of gas equal to the sum of (A) net underproduction of the Assets
between or equal to .1 or 0 bcf of gas, and (B) any net overproduction of gas.

2.3                                 Payment and Calculation of Estimated Adjusted
Purchase Price and Payment at Closing.

(a)                                  Noble shall prepare and deliver to Purchaser,
at least five (5) “Business Days” (which term shall mean any day except a Saturday, Sunday or other day
on which commercial banks in New York, New York, or Houston, Texas are required
or authorized by law to be closed) prior to the Closing Date, Noble’s good
faith estimate of the Adjusted Purchase Price to be paid at Closing to Noble
(such estimated Adjusted Purchase Price being herein referred to as the “Estimated
Adjusted Purchase Price”),
together with a statement setting forth Noble’s good faith estimate of the
amount of each adjustment to the Purchase Price to be made pursuant to Section
2.2.  The Parties shall negotiate in good
faith and attempt to agree on such estimated adjustments prior to Closing.  In the event any estimated adjustment amounts
are not 

 5
 

 

 

agreed upon prior to Closing, then such
disagreement shall be resolved as provided in Section 17.1.

(b)                                 At Closing, Purchaser shall pay to Noble (or
to the qualified escrow/trust account if Noble has exercised its right to
consummate this transaction as a like-kind exchange pursuant to Section 2.4)
the Estimated Adjusted Purchase Price determined as set forth in Section
2.3(a), less an amount equal to the Deposit only if (i) Noble has not elected
to effect a like-kind exchange pursuant to Section 2.4 or (ii) Noble has
elected to effect a like-kind exchange pursuant to Section 2.4 and the Parties
have directed the Escrow Agent to transfer the Deposit to the qualified
escrow/trust account.

2.4                                 Like-Kind Exchange Option.

(a)                                  Noble and Purchaser hereby agree that Noble,
in lieu of the sale of the Assets to Purchaser for the cash consideration
provided herein, shall have the right at any time prior to Closing to assign
all or a portion of its rights under this Agreement to a qualified intermediary
in order to accomplish the transaction in a manner that will comply, either in
whole or in part, with the requirements of a like-kind exchange pursuant to
§1031 of the Code.  In the event Noble
assigns its rights under this Agreement pursuant to this Section 2.4, Noble
agrees to notify Purchaser in writing of such assignment at or before Closing.
If Noble assigns its rights under this Agreement pursuant to this Section 2.4,
Purchaser agrees to (i) acknowledge Noble’s assignment of its rights in this
Agreement in the form attached hereto as Schedule 2.4(a),
and (ii) deposit the Estimated Adjusted Purchase Price with the qualified
escrow or qualified trust account at Closing.

(b)                                 Noble hereby acknowledges that assignment of
its rights pursuant to this Section 2.4 does not relieve Noble from any of its
obligations under this Agreement.

2.5                                 Post-Closing Adjustment. 
Within five (5) Business Days after the final determination of the
Adjusted Purchase Price in accordance with Section 11.1, Purchaser shall pay to
Noble or Noble shall pay to Purchaser, as the case may be, the amount by which
such final Adjusted Purchase Price is greater than or less than, respectively,
the Estimated Adjusted Purchase Price.

ARTICLE 3

TITLE AND ENVIRONMENTAL MATTERS

3.1                                 Title Due Diligence.

(a)                                  From the date of this Agreement until 5:00
p.m. Central Time on June 30, 2006 (the “Examination Period”), Noble shall afford Purchaser and its
authorized representatives reasonable access during normal business hours to
the office, personnel and books and records of Noble in order for Purchaser to
conduct a title examination as it may choose to conduct with respect to the
Assets in order to determine whether Title Defects exist (“Purchaser’s
Title Review”); provided,
however, that such investigation shall be upon reasonable notice and shall not
unreasonably disrupt the personnel and operations of Noble or 

 6
 

 

 

impede the efforts of Noble to comply with
its other obligations under this Agreement. 
Such books and records shall include all abstracts of title, title
opinions, title files, ownership maps, lease files, assignments, division
orders, operating records and agreements, well files, financial and accounting
records, geological, geophysical and engineering records, in each case insofar
as same may now be in existence and in the possession of Noble, excluding,
however, any information that Noble is prohibited from disclosing by bona fide,
Third Party confidentiality restrictions (provided that Noble shall use its
reasonable efforts to cause such restrictions to be removed with respect to
Purchaser). The cost and expense of Purchaser’s Title Review, if any, shall be
borne solely by Purchaser.  Prior to the
Closing Date, Purchaser shall not contact any of the customers or suppliers of
Noble or its working interest co-owners or operators in connection with the
transactions contemplated hereby, whether in person or by telephone, mail or
other means of communication, without the prior written consent of Noble.

(b)                                 If Purchaser discovers any Title Defect
affecting any of the Assets, Purchaser may notify Noble prior to the expiration
of the Examination Period of such alleged Title Defect. To be effective, such
notice (“Title Defect Notice”) must (i) be in writing, (ii) be received by Noble prior to the
expiration of the Examination Period, (iii) describe the Title Defect in detail
(including any alleged variance in the Net Revenue Interest), (iv) identify the
specific Asset(s) affected by such Title Defect, and (v) include the value of
such Title Defect as determined by Purchaser in good faith.  Subject to Sections 3.7, 3.9, 3.10, 4.11,
4.12, 4.16 and 4.17, any matters that may otherwise constitute Title Defects,
but of which Noble has not been specifically notified by Purchaser in
accordance with the foregoing, shall be deemed to have been waived by Purchaser
for all purposes.  Upon the receipt of
such effective Title Defect Notice from Purchaser, Noble shall have the option,
in addition to the remedies set forth in Section 3.1(c), but not the
obligation, to attempt to cure such Title Defect at any time prior to the
Closing.  The Asset affected by such
uncured Title Defect shall be a “Title Defect Asset”.

(c)                                  With respect to each Title Defect that is not
cured on or before the Closing, the Purchase Price shall be reduced, subject to
Section 3.4, by the Title Defect Amount with respect to such Title Defect
Asset.  The “Title Defect Amount” shall mean, with respect to a Title Defect
Asset, the amount by which such Title Defect Asset is impaired as a result of
the existence of one or more Title Defects, which amount shall be determined as
follows:

(i)                                     The Title Defect Amount with respect to a
Title Defect Asset shall be determined by taking into consideration the “Allocated Value” (as set forth in Schedule 3.1(c) attached hereto) of the Asset (or the Wells
associated therewith) subject to such Title Defect, the portion of the Asset
subject to such Title Defect, and the legal effect of such Title Defect on the
Asset (or the Wells or other property associated therewith) affected thereby;
provided, however, that: (A) if such Title Defect is in the nature of Noble’s
Net Revenue Interest in an Asset being less than the Net Revenue Interest set
forth in Exhibit
“A” or Exhibit “A-1” hereto, as the case may be, and the Working
Interest remains the same, then the Title Defect Amount shall be equal to the
Allocated Value for the relevant Asset (or the Wells associated therewith)
multiplied by the percentage reduction in such Net Revenue Interest as a result
of such Title Defect or (B) if such Title Defect is in the nature of a Lien,
then the Title Defect Amount shall equal the amount required to fully discharge
such Lien; and

 7
 

 

 

(ii)                                  If the Title Defect results from any matter
not described in clause (A) or (B) of Section 3.1(c)(i), the Title Defect Amount shall be an amount
equal to the difference between the value of the Title Defect Asset affected by
such Title Defect with such Title Defect and the value of such Title Defect
Asset without such Title Defect (taking into account the Allocated Value of the
Title Defect Asset); and

(iii)                               If the Title Defect Asset has not been
separately allocated an Allocated Value, but is part of an Asset or group of
Assets which has or have an Allocated Value, then the Allocated Value of such
Title Defect Asset shall be a fair and reasonable portion of the Allocated
Value of such Asset or group of Assets which has or have an Allocated Value;
and

(iv)                              In no event shall the Title Defect Amount
related to a particular Asset exceed the Allocated Value, if any, of such
Asset; and

(v)                                 The Title Defect Amount with respect to a
Title Defect Asset shall be determined without duplication of any costs or
losses included in another Title Defect Amount hereunder.  For example, but without limitation, if a
lien affects more than one Title Defect Asset or the curative work with respect
to one Title Defect results in the curing of any other Title Defect affecting
the same or another Title Defect Asset, the amount necessary to discharge such
lien or the cost and expense of such curative work shall be allocated among the
Title Defect Assets so affected (in the ratios of the respective portions of
the Purchase Price allocated to such Title Defect Assets) and the amount so
allocated to a Title Defect Asset shall be included only once in the Title
Defect Amount therefor.

(d)                                 As used in this Section 3.1:

(i)                                     “Defensible Title” means, as of the date of this Agreement and the Closing Date with
respect to the Assets, such record title and ownership by Noble that: (A)
entitles Noble to receive and retain, without reduction, suspension or
termination, not less than the percentage set forth in Exhibit “A” or Exhibit “A-1”, as the case may be, as Noble’s Net Revenue
Interest of all Hydrocarbons produced, saved and marketed from each Leasehold
Interest and/or Well comprising such Asset as set forth in Exhibit “A”or Exhibit “A-1”, as the case may be, through plugging,
abandonment and salvage of all Wells comprising or included in such Asset, and
except for changes or adjustments that result from the establishment of units,
changes in existing units (or the participating areas therein), or the entry
into of pooling or unitization agreements after the date hereof unless made in
breach of the provisions of Section 6.1; (B) obligates Noble to bear not
greater than the percentage set forth in Exhibit “A”, Exhibit
“A-1” or Exhibit “A-4”, as the case may be, as Noble’s Working
Interest of the costs and expenses relating to the maintenance, development and
operation of each Leasehold Interest, Well and/or Platform comprising such
Asset, through plugging, abandonment and salvage of all Wells and/or Platforms
comprising or included in such Asset, and except for changes or adjustments
that result from the establishment of units, changes in existing units (or the
participating areas therein), or the entry into of pooling or unitization
agreements after the date hereof unless made in breach of the provisions of
Section 6.1; (C) is free and clear of all Liens, except Permitted Encumbrances;
(D) reflects that all consents to assignment, notices of 

 8
 

 

 

assignment or preferential purchase rights
which are applicable to or must be complied with in connection with the
transaction contemplated by this Agreement or any prior sale, assignment or the
transfer of such Asset, have been obtained and complied with or waived to the
extent the failure to obtain or comply with the same could render this
transaction or any such sale, assignment or transfer (or any right or interest
affected thereby) void or voidable or could result in Purchaser or Noble
incurring any liability; and (E) with respect to those Assets for which there
is no Net Revenue Interest and/or Working Interest expressed on Exhibit “A”, Exhibit
“A-1” or Exhibit “A-4”, as the case may be, is defensible.

(ii)                                  “Permitted Encumbrances” shall mean (A) Liens for taxes which are not yet delinquent; (B)
normal and customary Liens of co-owners under operating agreements, unitization
agreements, and pooling orders relating to the Assets, which obligations are
not yet due and pursuant to which Noble is not in default; (C) mechanic’s and
materialman’s Liens relating to the Assets, which obligations are not yet due
and pursuant to which Noble is not in default; (D) Liens in the ordinary course
of business consisting of minor defects and irregularities in title or other
restrictions (whether created by or arising out of joint operating agreements,
farm-out agreements, leases and assignments, contracts for purchases of
Hydrocarbons or similar agreements, or otherwise in the ordinary course of
business) that are of the nature customarily accepted by prudent purchasers of
oil and gas properties and do not decrease the Net Revenue Interest or increase
the Working Interest set forth in Exhibit
“A”, Exhibit
“A-1” or Exhibit “A-4”, as the case may be (without a proportionate
increase in the corresponding Net Revenue Interest), or materially affect the
value of any property encumbered thereby; (E) all approvals required to be
obtained from Governmental Entities that are lessors under Leasehold Interests
forming a part of the Assets (or who administer such Leasehold Interests on
behalf of such lessors) which are customarily obtained post-closing; (F)
preferential rights to purchase and consent to transfer requirements of any
Person (to the extent same have been complied with in connection with the prior
sale, assignment or the transfer of such Asset); and (G) conventional rights of
reassignment normally actuated by an intent to abandon or release a lease and
requiring notice to the holders of such rights.

(iii)                               “Title Defect” shall mean any particular defect in or failure of Noble’s ownership
of any Asset: (A) that causes Noble to not have Defensible Title to such Asset,
(B) that has attributable thereto a Title Defect Amount in excess of $100,000
and (C) regarding which a Title Defect Notice has been timely and otherwise
validly delivered. Notwithstanding any other provision in this Agreement to the
contrary, defects or irregularities that have been cured or remedied by the
applicable statutes of limitation or statutes for prescription shall not
constitute and shall not be asserted a Title Defect.

(e)                                  If prior to Closing Noble and Purchaser are
unable to reach an agreement as to whether a Title Defect exists or, if it does
exist, the Title Defect Amount attributable to such Title Defect, then the
provisions of Section 3.5 shall apply.

(f)                                    If Noble determines (or should Purchaser, in
the course of Purchaser’s Title Review, determine) that Noble’s Net Revenue
Interest in an Asset is greater than the Net Revenue Interest set forth in Exhibit “A” or Exhibit “A-1” hereto, as the case may be, by more than
$100,000 and the Working Interest remains the same,
then the Parties agree that the 

 9
 

 

 

Purchase Price shall be increased in an
amount equal to the Allocated Value for the relevant Asset multiplied by the
percentage increase in such Net Revenue Interest.

3.2                                 Environmental Due Diligence.

(a)                                  Purchaser shall have the right, or the right
to cause an environmental consultant acceptable to Purchaser in its sole
discretion (“Purchaser’s Environmental Consultant”), to conduct an environmental review of the
Assets prior to the expiration of the Examination Period (“Purchaser’s
Environmental Review”).
No less than three (3) Business Days prior to the proposed commencement date of
Purchaser’s Environmental Review, Purchaser shall notify Noble of the
commencement of Purchaser’s Environmental Review and shall coordinate the
locations of such activities with Noble. The cost and expense of Purchaser’s
Environmental Review shall be borne solely by Purchaser. No Person, other than
Purchaser’s Environmental Consultant and Purchaser’s employees or
representatives, may conduct Purchaser’s Environmental Review.  Noble shall have the right to have
representatives thereof present to observe Purchaser’s Environmental Review
conducted in Noble’s offices or on the Assets. 
With respect to any samples taken in connection with Purchaser’s
Environmental Review, Noble shall be permitted to take split samples. Purchaser
agrees to conduct Purchaser’s Environmental Review in a manner so as not to
unduly interfere with the business operations of Noble and in compliance with
all Applicable Laws, and Purchaser shall exercise due care with respect to
Noble’s properties and their condition.

(b)                                 Prior to the Closing, unless otherwise
required by Applicable Law, Purchaser shall (and shall cause Purchaser’s
Environmental Consultant, if applicable, to) treat confidentially any matters
revealed by Purchaser’s Environmental Review and any reports or data generated
from such review (the “Environmental Information”), and Purchaser shall not (and shall cause
Purchaser’s Environmental Consultant, if applicable, to not) disclose any
Environmental Information to any Governmental Entity or other third party
(other than to any of Purchaser’s shareholders, employees, lenders or
representatives that agree to treat such information confidentially in
accordance herewith) without the prior written consent of Noble, except to the
extent required by Applicable Law.  Prior
to the Closing, unless otherwise required by Applicable Law, Purchaser may use
the Environmental Information only in connection with the transactions
contemplated by this Agreement.  If
Purchaser, Purchaser’s Environmental Consultant, if applicable, or any third
party to whom Purchaser has provided any Environmental Information in
accordance with this Section 3.2(b) becomes legally compelled to disclose any
of the Environmental Information, Purchaser shall provide Noble with prompt
written notice and Noble may file a protective order, or seek any other remedy,
as it deems appropriate under the circumstances.  If this Agreement is terminated prior to the
Closing, Purchaser shall deliver the Environmental Information to Noble, which
Environmental Information shall become the sole property of Noble. At any time
upon Noble’s written request to Purchaser, Purchaser shall provide copies of
any report of Purchaser’s Environmental Consultant to Noble without charge.

(c)                                  If Purchaser or Purchaser’s Environmental
Consultant, if applicable, discovers any Environmental Defect prior to the
expiration of the Examination Period, Purchaser shall notify Noble prior to the
expiration of the Examination Period of such alleged Environmental Defect.  To be effective, such notice (an “Environmental
Defect Notice”) must 

 10
 

 

 

(i) be in writing; (ii) be received by Noble
prior to the expiration of the Examination Period; (iii) describe the
Environmental Defect in reasonable detail, including (A) the specific Asset
affected by or associated with such Environmental Defect, (B) if applicable, a
site plan showing the location of all sampling events, boring logs and other
field notes describing the sampling methods utilized and the field conditions
observed, (C) the written conclusion of Purchaser’s Environmental Consultant,
if applicable, that an Environmental Defect is believed to exist, which
conclusion shall be reasonably substantiated by the factual data gathered
during Purchaser’s Environmental Review, and (D) if feasible and applicable, a
separate, reasonably specific citation of the provisions of the Environmental
Laws alleged to be violated and the related facts that substantiate such
violation; (iv) describe the procedures recommended to correct, eliminate or
pay the Environmental Defect, together with any related recommendations from
Purchaser’s Environmental Consultant, if applicable; and (v) set forth
Purchaser’s good faith estimate of the Environmental Defect Value, including
the basis for such estimate.  Subject to
Noble’s representations and indemnity obligations herein, any matters that may
otherwise constitute Environmental Defects, but of which Noble has not been
specifically notified by Purchaser in accordance with the foregoing, together
with any environmental matter that does not constitute an Environmental Defect,
shall be deemed to have been waived by Purchaser for purposes of this Section
3.2.  Upon the receipt of effective
notice from Purchaser, Noble shall have the option, in addition to the remedy
set forth in Section 3.2(d), but not the obligation, to (x) attempt to cure
such Environmental Defect at any time prior to the Closing, at the sole cost
and expense of Noble or (y) exclude the Assets affected by such Environmental
Defect from this Agreement and the Purchase Price to be paid at Closing shall
be reduced by the Allocated Value for such Assets if such Allocated Value is
positive and increased by such Allocated Value for such Assets if such
Allocated Value is negative.  If prior to
Closing Noble and Purchaser are unable to reach an agreement as to whether an
Environmental Defect exists or, if it does exist, the amount of the
Environmental Defect Value attributable thereto, then the provisions of Section
3.5 shall be applicable.

(d)                                 If any Environmental Defect described in a
notice delivered in accordance with Section 3.2 is not cured on or before the
Closing, then the Purchase Price shall be reduced, subject to Section 3.4, by
the Environmental Defect Value of such Environmental Defect.

(e)                                  As used in this Section 3.2:

(i)                                     “Environmental Defect” shall mean, with respect to any given Asset, a violation of
Environmental Laws in effect as of the date hereof in the jurisdiction in which
such Asset is located, an obligation under Environmental Laws to undertake
within a reasonable period of time any corrective action on an Asset, or any
Environmental Liability arising from or attributable to any condition, event,
circumstance, activity, practice, incident, action, or omission existing or
occurring prior to the Closing Date, or the use, release, storage, treatment,
transportation, or disposal of hazardous substances prior to the Closing Date
(A) regarding which an Environmental Defect has been timely and otherwise
validly delivered, and (B) that has an Environmental Defect Value attributable
thereto in excess of $100,000.

(ii)                                  “Environmental Defect Value” shall mean, (A) the reasonably estimated
costs and expenses to correct such Environmental Defect in the most cost
effective 

 11
 

 

 

manner reasonably available, consistent with
Environmental Laws, and (B) the amount of the Environmental Liabilities
reasonably believed will be incurred or required to be paid by Noble and/or the
Purchaser with respect thereto.  The
Parties recognize that the calculation of an Environmental Defect Value may
require the use of assumptions and extrapolations; however, it is acknowledged
and agreed that any such assumptions and extrapolations will be consistent with
the known factual information and reasonable in nature.

3.3                                 Notice of Breaches of Representations and
Warranties Pre-Closing.  If, in the course of conducting its due
diligence examination of Noble prior to Closing (other than in connection with
Purchaser’s Title Review and Purchaser’s Environmental Review), Purchaser
becomes aware of a breach of a representation and warranty made by Noble in
this Agreement, Purchaser shall give Noble prompt notice of such breach, which
notice shall (a) describe in detail the nature of the asserted breach and (b) specify
the proposed Damages resulting from such asserted breach.  The Parties shall endeavor in good faith to
agree upon whether any breach of a representation and warranty made by Noble,
in this Agreement asserted by Purchaser is an actual breach and, if it is
determined that there is an actual breach, the amount of the Damages
attributable thereto.  If, however, the
Parties are unable to reach an agreement, either on whether there is an actual
breach or the amount of the Damages attributable thereto (as appropriate), the
provisions of Section 17.1 shall be applicable.

3.4                                 Adjustments to Purchase Price for Title
Defects, Environmental Defects and Breaches of Representations and Warranties. 
Notwithstanding anything to the contrary contained in this Agreement:
(i) if the aggregate of the Title Defect Amounts, Environmental Defect Values
and Damages arising from a breach of a representation and warranty made by
Noble (excluding the representation and warranty contained in Section 4.7(d)),
each as determined in accordance with this Agreement, is less than or equal to
ten million dollars ($10,000,000) (the “Deductible Amount”), then no adjustment of the Purchase Price
shall be made therefor, and (ii) if the aggregate of the Title Defect Amounts,
Environmental Defect Values and Damages arising from a breach of a
representation and warranty made by Noble (excluding the representation and
warranty contained in Section 4.7(d)), each as determined in accordance with
this Agreement, is greater than the Deductible Amount, then the Purchase Price
shall be adjusted downward by (a) the amount that the aggregate of such Title
Defect Amounts, Environmental Defect Values and Damages exceeds the Deductible
Amount and (b) the amount of Damages attributable to an actual breach of the
representation and warranty contained in Section 4.7(d).

3.5                                 Deferred Claims and Disputes. 
Subject to the terms of Section 3.9 and Section 3.10, in the event that the Parties are unable to reach an agreement prior to
Closing as to whether (a) a Title Defect exists or, if it does exist, the Title
Defect Amount attributable to such Title Defect or (b) an Environmental Defect
exists or, if it does exist, the amount of the Environmental Defect Value
attributable thereto, any such dispute or claim (a “Deferred Adjustment Claim”) shall be settled pursuant to this Section 3.5 and shall not prevent or delay Closing.  In no event shall any Title Defect Amount or
Environmental Defect Value asserted by Purchaser as a Deferred Adjustment Claim
exceed the amount asserted by Purchaser therefor prior to the end of the
Examination Period.  With respect to each
potential Deferred 

 12
 

 

 

Adjustment
Claim, Purchaser shall deliver to Noble prior to Closing a written notice
describing each such potential Deferred Adjustment Claim, Purchaser’s good faith
estimate of the value attributable to such Deferred Adjustment Claim (the “Purchaser’s Estimate”) and a statement
setting forth the facts and circumstances that support Purchaser’s position with respect to such Deferred Adjustment Claim and Purchaser’s Estimate.  An amount equal to
Purchaser’s Estimate of any Deferred Adjustment Claims
(the “Adjustment Amount”) shall be deducted
from the Purchase Price otherwise payable at Closing and paid into the Defects
Escrow with the Defects Escrow Agent pursuant to the terms of the Defects
Escrow Agreement.  Any Adjustment Amount
deposited into the Defects Escrow pursuant to this Section 3.5 will remain
therein until released as provided in this Section 3.5.  On or prior to the thirtieth (30th)
consecutive calendar day following the Closing Date (the “Deferred Matters Date”), the Parties shall attempt in good faith to reach
agreement on the Deferred Adjustment Claims and, ultimately, to resolve by
written agreement all disputes regarding the Deferred Adjustment Claims.  Any Deferred Adjustment Claims which are not
so resolved on or before the Deferred Matters Date may be submitted by either
Party to final and binding arbitration in accordance with Section 17.1.  Notwithstanding anything herein provided to
the contrary, including Section 3.6, Noble shall be entitled to cure any
Title Defect which gives rise to a Deferred Adjustment Claim at any time prior
to the point in time when a final and binding written decision of the
Independent Expert is made pursuant to Section 17.1.  If the value of any Deferred Adjustment Claim
determined under the final and binding written decision of the Independent
Expert pursuant to Section 17.1 or the written agreement of Purchaser and Noble
(the “Resolved Amount”) is less than or
equal to the Adjustment Amount regarding such Deferred Adjustment Claim, then
the Resolved Amount withheld in the Defects Escrow (together with interest
thereon) shall be promptly released therefrom to Purchaser in accordance with
the terms of the Defects Escrow Agreement and, to the extent applicable, the
remaining amount withheld in the Defects Escrow with respect to such Deferred
Adjustment Claim (the “Overheld
Amount”) (together with interest thereon) shall be promptly released to Noble
in accordance with the terms of the Defects Escrow Agreement.  Notwithstanding anything herein contained to
the contrary, (x) in no event shall the Resolved Amount (less any interest
earned thereon) be greater than Purchaser’s Estimate and (y) Purchaser shall pay to Noble an amount equal to the
Agreed Rate on the Overheld Amount from the Closing Date until the date of
payment.

3.6                                 Option to Cure Title Defects Post-Closing.

(a)                                  Notwithstanding anything herein to the
contrary, if Noble is not able to cure a Title Defect on or prior to Closing,
Noble shall have the option, by notice in writing to Purchaser on or before
Closing, to attempt to cure such Title Defect (other than a Title Defect where
a difference in the Net Revenue Interest and/or Working Interest causes Noble
to not have Defensible Title) after the Closing (with any such Title Defect
being called a “Post-Closing Defect”).  In such event, the
transactions contemplated hereby will close as provided herein, but an amount
equal to the Title Defect Amount for the Title Defect to which the Post-Closing
Defect pertains (the “Defects Escrow Amount”) shall be deducted from the Purchase Price otherwise payable at
Closing and paid into an escrow account (the “Defects Escrow”) established with a federally insured savings or banking institution
mutually acceptable to Purchaser and Noble (the “Defects Escrow Agent”) pursuant to the terms of an escrow
agreement in a form acceptable to the Defects Escrow Agent and reasonably
acceptable to Purchaser and Noble (the

 13
 

 

 

“Defects Escrow Agreement”). The amount deposited into the Defects
Escrow with respect to a Post-Closing Defect will remain therein until released
as provided in Section 3.6(b).

(b)                                 Purchaser will act in good faith and
reasonably cooperate with Noble after the Closing to cure a Post-Closing
Defect. If Noble and Purchaser mutually agree that a Post-Closing Defect has
been cured, then within two (2) Business Days after such determination, the
amount withheld in the Defects Escrow with respect thereto (together with any
interest earned thereon) shall be released to Noble in accordance with the
terms of the Defects Escrow Agreement. 
If Noble and Purchaser mutually agree that a Post-Closing Defect has
been partially cured, then Noble and Purchaser shall mutually determine the
portion of the amount retained in the Defects Escrow with respect thereto
(together with any interest earned thereon) that should be paid to Purchaser to
compensate it for the uncured portion thereof (together with interest earned
thereon) and the remaining portion of such amount shall be released to Noble
(together with any interest earned thereon) in accordance with the terms of the
Defects Escrow Agreement.

(c)                                  If Noble and Purchaser mutually agree that a
Post-Closing Defect has not been cured, then within two (2) Business Days after
such determination, the amount withheld in the Defects Escrow with respect
thereto (together with any interest earned thereon) shall be released to
Purchaser in accordance with the terms of the Defects Escrow Agreement.  If, at the end of the 180-day period
commencing on the Closing Date (the “Cure Period”), Noble has been unable to cure a Post-Closing Defect (and there is
no dispute as to whether or not it has been cured), the amount withheld in the
Defects Escrow with respect thereto (together with any interest earned thereon)
shall be released to Purchaser in accordance with the terms of the Defects
Escrow Agreement.  If, at the end of the
Cure Period, Noble and Purchaser are unable to agree whether there has been a
satisfactory resolution of a Post-Closing Defect, then such disagreement shall
be resolved as provided in Section 17.1.

3.7                                 Limited Warranty of Title.  The
transfer of the Assets to Purchaser shall be without warranty of title of any
kind whatsoever, express, implied or statutory, except that Noble does hereby
bind and obligate itself and its successors and assigns to warrant and defend,
subject to the terms hereof, to the Permitted Encumbrances and to any Title
Defects asserted pursuant to Section 3.1, title to the Leasehold Interests set
forth on Exhibit
“A” hereto, including
the Working Interests and Net Revenue Interests as reflected on Exhibit “A-1” for the particular Wells identified thereon (excluding, however, title to or any
representation with respect to the contractual working interests and unit
interests as reflected in Exhibit
“A” and Exhibit “A-1”), unto Purchaser, its successors and
assigns, against all persons lawfully claiming or to claim the same or any part
thereof by, through or under Noble or its Affiliates, but not otherwise;
provided, however, that Noble may offset any breach by Noble of the forgoing
warranty by $100,000 and by any unused portion of the Deductible Amount.

3.8                                 Notices to Holders of Preferential Purchase
Rights.  With respect to each party holding a
preferential purchase right covering Leasehold Interests (a list of the
affected Leasehold Interests is set forth in Schedule 4.12),
upon execution of this Agreement, Noble shall promptly send to the holder of
such preferential right a notice offering to sell to such holder, in accordance
with the contractual provisions applicable to such right, those Leasehold
Interests and related Assets covered by such right on the terms hereof and
based on the Allocated Value of 

 14
 

 

 

such affected Leasehold Interests, subject to
adjustments in price in the same manner that the Purchase Price is adjusted
pursuant to Article 2 and Article 11 of this Agreement.

3.9                                 Exercise of Preferential Purchase Rights.

(a)                                  Noble shall use the Allocated Value (as set
forth in Schedule
3.1(c)) to provide any
required preferential right to purchase notifications to third parties based on
the form of Preferential Purchase Right Election Letter attached hereto as Schedule 3.9 (the “Pref Right Notice”). If, within the time prescribed in the
governing agreements, a holder of a preferential purchase right notifies Noble
that it elects to exercise its rights with respect to an Asset to which its
preferential purchase right applies (determined by and in accordance with the
agreement in which the preferential purchase right arises), the Asset covered
by that preferential purchase right will not be sold to the Party originally
executing this Agreement as “Purchaser” (subject to the remaining provisions in this Article), and the
Purchase Price will be reduced by the Allocated Value for such Asset if the
Allocated Value is positive and increased by the Allocated Value for such Asset
if the Allocated Value is negative. 
However, in the event the transactions contemplated by this Agreement
should fail to close, the holder of such preferential purchase right shall not
be entitled to purchase thereunder.

(b)                                 If on the Closing Date any preferential
purchase right applicable to an Asset and the transactions contemplated hereby
has not been waived and the time to elect has not elapsed, such Asset(s)
affected thereby shall be held back from the Assets to be conveyed to Purchaser
at Closing (and the Purchase Price to be paid at Closing shall be reduced by
the Allocated Value for such Asset(s) if such Allocated Value is positive and
increased by the Allocated Value for such Asset(s) if such Allocated Value is
negative) and Closing with respect to the unaffected Assets shall proceed, and
the Parties shall conduct a second closing with respect to the Asset(s)
affected by such preferential purchase right within ten (10) days (or the next
Business Day thereafter if such day is not a Business Day) after any such
preferential purchase right has been waived or the time to elect has elapsed.  If such preferential purchase right has not
been waived and the time to elect has not elapsed or has been exercised but not
yet closed, within ninety (90) days after the Closing Date, the Asset(s)
affected thereby, automatically and without need to amend this Agreement, shall
be removed and excluded from this Agreement and Purchaser shall have no further
rights or obligations with respect to the same.

3.10                           Consents to Assignment.  With
respect to each party holding a consent to assign, upon execution of this
Agreement, Noble shall promptly notify said parties of this Agreement and seek
to obtain their consents to the assignments contemplated hereby.  If Noble fails to obtain a material consent
set forth on Schedule
4.11, then, unless
otherwise mutually agreed by Noble and Purchaser, any Asset or portion thereof
subject thereto shall be held back from the Assets to be conveyed to Purchaser
at Closing, and the Purchase Price to be paid at Closing shall be reduced by
the Allocated Value for such Asset (or portion thereof) if such Allocated Value
is positive and increased by the Allocated Value for such Asset (or portion
thereof) if such Allocated Value is negative. 
In the event that such consent (with respect to an Asset or portion
thereof excluded pursuant to this Section 3.10 is obtained within sixty (60)
days following the Closing then within five (5) days thereafter, Purchaser
shall purchase such Asset or portion thereof and pay to Noble the amount by
which the Purchase Price was reduced with respect

 15
 

 

 

thereto and Noble shall assign to Purchaser
such Asset or portion thereof pursuant to the applicable Assignment and Bill of
Sale set forth in Section 10.2(a).

3.11                           Casualty Loss. 
Subject to Sections 8.10 and 9.8, if after the date hereof and prior to
the Closing any portion of the Assets shall be damaged or destroyed by a
Casualty or taken in condemnation or the exercise of eminent domain, Noble
shall promptly notify Purchaser of the Assets so affected and, in the event of
a Casualty, Noble’s good faith estimate of the time and expense required to
repair such damage or destruction.  Noble
shall also elect by written notice to Purchaser at least five (5) Business Days
prior to Closing either (a) in the event of a Casualty, to cause the Assets
affected by such Casualty to be repaired or restored, at Noble’s sole cost and
expense, as promptly as reasonably practicable (which work may extend after the
Closing), (b) in the event of a Casualty, to indemnify Purchaser through a
document reasonably acceptable to Purchaser against any costs and expenses that
Purchaser reasonably incurs to repair the Assets subject to such Casualty or
taking, (c) treat such Casualty or taking as a Title Defect with respect to the
affected Assets or (d) exclude any Asset subject to such Casualty or taking
from this Agreement and the Purchase Price to be paid at Closing shall be
reduced by the Allocated Value for such Asset (or portion thereof) if such
Allocated Value is positive and increased by the Allocated Value for such Asset
(or portion thereof) if such Allocated Value is negative.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF NOBLE

Noble represents
and warrants to Purchaser that:

4.1                                 Existence.  Noble is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is duly qualified to carry on its business in the states or
jurisdictions where the Assets are located.

4.2                                 Power.  Noble has the corporate power
and authority to enter into and perform this Agreement and the transactions
contemplated hereby.  No suit, action or
other proceeding by a third party or a Governmental Entity is pending or
threatened which seeks substantial damages from Noble in connection with, or
seeks to restrain, enjoin or otherwise prohibit, the consummation of the transactions
contemplated by this Agreement.  Subject
to applicable requirements under the HSR Act and to preferential purchase
rights and restrictions on assignment of the type generally found in the oil
and gas industry, and to rights to consent by, required notices to, and filings
with or other actions by Governmental Entities where the same are customarily
obtained subsequent to the assignment of oil and gas interests and leases, the
execution, delivery and performance of this Agreement by Noble, and the transactions
contemplated hereby, will not violate (a) any provision of the certificate of
incorporation or bylaws of Noble, (b) any material agreement or instrument to
which Noble is a party or by which Noble or any of the Leasehold Interests are
bound, (c) any judgment, order, ruling, or decree applicable to Noble as a
party in interest, or (d) any law, rule or regulation applicable to Noble.

4.3                                 Authorization.  The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby have been duly and validly authorized by all requisite
corporate action on the part of Noble. This Agreement has been duly executed
and delivered on 

 16
 

 

 

behalf of Noble, and at the Closing all
documents and instruments required hereunder to be executed and delivered by
Noble shall have been duly executed and delivered.  This Agreement does, and such documents and
instruments shall, constitute legal, valid and binding obligations of Noble
enforceable in accordance with their terms, subject, however, to the effect of
bankruptcy, insolvency, reorganization, moratorium and similar laws from time
to time in effect relating to the rights and remedies of creditors, as well as
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

4.4                                 Brokers.  Noble has incurred no
obligation or liability, contingent or otherwise, for brokers’ or finders’ fees
in respect of the matters provided for in this Agreement that will be the
responsibility of Purchaser; and any such obligation or liability that might
exist shall be the sole obligation of Noble.

4.5                                 Foreign Person. 
Noble is not a “foreign person”
within the meaning of the Internal Revenue Code of 1986, as amended (the “Code”), Section 1445 and 7701 (i.e., Noble is not
a nonresident alien, foreign corporation, foreign partnership, foreign trust or
foreign estate as those terms are defined in the Code and any regulations
promulgated thereunder).

4.6                                 Litigation.  Schedule 4.6
sets forth all claims, suits, actions and litigation by any Person pending by
or before any Governmental Entity or to Noble’s Knowledge, threatened, in each
case, against Noble in connection with the Assets or otherwise relating to the
Assets and which are to be assumed by Purchaser.

4.7                                 Material Contracts.

(a)                                  Exhibit “A-2” sets forth all contracts of the type
described below that are included in the Assets (collectively, the “Material
Contracts”):

(i)                                     any contract that can reasonably be expected
to result in aggregate payments of more than $100,000 (based solely on the
terms thereof and without regard to any expected increase in volumes or
revenues) that is not terminable without penalty on sixty (60) days or fewer
notice during the current or any subsequent calendar year;

(ii)                                  any contract that can reasonably be expected
to result in aggregate revenues to Noble of more than $500,000 (based solely on
the terms thereof and without regard to any expected increase in volumes or
revenues) during the current or any subsequent calendar year;

(iii)                               any Hydrocarbon purchase and sale,
transportation, processing or similar contract relating to or included in the
Assets that is not terminable without penalty on sixty (60) days or less
notice;

(iv)                              any contract that is an indenture, mortgage,
loan, credit or sale-leaseback or similar financial contract;

(v)                                 any contract that constitutes a lease under
which Noble is the lessor or the lessee of real or personal property which
lease (A) cannot be terminated by Noble 

 17
 

 

 

without penalty upon sixty (60) days or less
notice and (B) involves an annual base rental of more than $100,000; and

(vi)                              any Affiliate contract which will not be
terminated prior to Closing and/or that is in effect from and after the
Effective Date.

(b)                                 Except as set forth on Schedule 4.7 and except for such matters that would not
have a Material Adverse Effect, there exist no defaults under any material
contract listed on Exhibit
“A-2” by Noble or, to Noble’s Knowledge, by any
other Person that is a party to such contracts. 
As soon as possible but in any event no later than June 1, 2006, Noble
agrees to deliver or make available to Purchaser for its review copies of each
contract to which the Assets are subject, including all contracts listed on Exhibit “A-2” and all amendments thereto.

(c)                                  No Asset shall be transferred to Purchaser at
Closing subject to an existing hedge, forward sale, swap or similar contract,
nor will the Purchase Price adjustments hereunder take into account the effects
of any such contract.

(d)                                 Except for contracts and agreements that are
excluded from this Agreement in connection with Assets held back pursuant to
Sections 3.9 and Section 3.10, there are no contracts or agreements included in
or affecting the Assets (including any contract or agreement listed in Exhibit “A-2”) that (i) could
materially restrict the ability of Purchaser to use the Assets as currently
used by Noble; or (ii) a reasonable and prudent Person engaged in the business
of the ownership, development and operation of oil and gas properties with the
knowledge of all the facts and their legal bearing would not be willing to
accept and that could result in liability or cost to Purchaser (excluding
liabilities or costs arising from actions taken by Purchaser in the ordinary
course of business after the Closing) in excess of $1,000,000 in the aggregate.

4.8                                 No Violation of Laws. 
Except as set forth on Schedule
4.8, where Noble is the
operator, and to Noble’s Knowledge in respect of Assets operated by others, the
Assets are being operated in compliance with all laws, rules and regulations of
any Governmental Entity applicable to such Assets, except where the failure to
be in compliance would not have a Material Adverse Effect.

4.9                                 Royalties, Etc. 
Except as set forth on Schedule
4.9 and for such other items
that are being held in suspense that will be transferred to Purchaser pursuant
to Section 11.2, all royalties, overriding royalties and other burdens on
production due with respect to the Assets have been paid.  Except for revenues for which Noble has the
right to net or offset against costs or expenses owed to Noble, all revenues
received by Noble or its Affiliates, in its or their capacity as operator of
the Assets, for the sale of Hydrocarbons attributable to any joint working
interest owner’s interests in the leases included in the Assets have been paid.

4.10                           Personal
Property.  To Noble’s Knowledge,
except as set forth in Schedule 4.10,
all personal property equipment and fixtures constituting a part of the Assets
are in a state of repair so as to be adequate for normal operations, except
where such state of repair would not have a Material Adverse Effect.

 18

 

 

4.11                           Consents.  Except for (a) consents set
forth in Schedule
4.11, (b) Customary
Post-Closing Consents, and (c) consents required to be obtained under contracts
that are terminable upon not greater than sixty (60) days notice without
payment of any fee, there are no consents required to be obtained by Noble from
another Person to any assignment (in each case) that would be applicable in
connection with the transfer of the Assets or the consummation of the
transactions contemplated by this Agreement by Noble.

4.12                           Preferential Rights. 
Except as set forth in Schedule
4.12, there are no
preferential rights to purchase that are applicable to the transfer of the
Assets in connection with the transactions contemplated hereby.

4.13                           Current Commitments.  Schedule 4.13 sets forth all authorities for expenditures
(“AFE”)
relating to the Assets to drill or rework wells or for other capital
expenditures pursuant to any of the Material Contracts or any applicable joint
operating agreement that require aggregate expenditures in excess of $250,000
for the particular individual operation or project (net to Noble’s interest)
after the Effective Time.

4.14                           Environmental Orders/Notices.

(a)                                  Except as set forth in Schedule 4.14(a), with respect to the Assets, Noble has not
entered into, or is not subject to, any agreements, consents, orders, decrees,
judgments, license or permit conditions, or other directives of any
Governmental Entity in existence as of the date of this Agreement based on any
Environmental Laws that relate to the future use of any of the Assets and that
require any change in the present conditions of any of the Assets.

(b)                                 Except as set forth in Schedule 4.14(b), Noble has not received and to Noble’s
Knowledge, no operator of the Assets has received written notice from any
Person of any release, disposal or incident concerning hazardous substances
with respect to any land, facility, asset or property included in the Assets
that:  (i) interferes with or prevents
compliance by Noble with any Environmental Law or the terms of any license or
permit issued pursuant thereto; or (ii) gives rise to or results in any common
law or other liability of Noble to any Person which, in the case of either
clause (i) or (ii) hereof, would have a Material Adverse Effect.

(c)                                  To Noble’s Knowledge, all material reports,
studies, written notices from environmental Governmental Entities, tests,
analyses, and other documents specifically addressing environmental matters
related to Noble’s ownership or operation of the Assets, which are in Noble’s
possession, have been made available to Purchaser.

4.15                           Gas Prepayment Arrangements; Take-or-Pay. 
Except for Imbalances, Noble is not obligated by any gas prepayment
arrangement, “take-or-pay” requirement or any other agreement with respect to the
Assets to deliver any gas at a future time without then or thereafter receiving
payment therefor.

4.16                           Production Taxes. 
Except as disclosed in Schedule
4.16, all ad valorem,
property, production, severance, and similar taxes and assessments (including
penalties and 

 19
 

 

 

interest) based on or measured by the
ownership of the Assets, the production of Hydrocarbons, or the receipt of
proceeds therefrom that have become due and payable have been properly paid.

4.17                           Leases.  Except as set forth on Schedule 4.17, with respect to the Assets that are oil and
gas leases (“Leases”) (but only to Noble’s Knowledge with
respect to Leases not operated by Noble):

(a)                                  the Leases have been maintained according to
their terms, in compliance with all material agreements to which the Leases are
subject;

(b)                                 the Leases are presently in full force and
effect; and

(c)                                  to the Knowledge of Noble, no other party to
any Lease is in breach or default with respect to any of its material
obligations thereunder.

4.18                           Well Status.  Except as set forth in Schedule 4.18, to Noble’s Knowledge, there are no wells
located on the Leasehold Interests that:

(a)                                  Noble is currently obligated by law or
contract to plug and abandon; or

(b)                                 have been plugged and abandoned but have not
been plugged or reclaimed in accordance with all applicable requirements of
each Governmental Entity having jurisdiction over the Assets.

4.19                           Suspense.  Schedule 4.19
sets forth a list of all proceeds held in suspense by Noble on the date hereof
that are attributable to the Leasehold Interests, a description of the source
of such funds and the reason they are being held in suspense, the agreement or
agreements under which such funds are being held and the name or names of the
parties claiming such funds or to whom such funds are owed.

4.20                           Additional Representations and Warranties. 
Noble specifically and expressly includes in its representations and
warranties to Purchaser contained in this Article 4, those representations and
warranties included in Sections 3.7, 11.9 and 11.11.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser
represents and warrants to Noble that:

5.1                                 Existence.  Purchaser is a limited
partnership duly organized, validly existing, and in good standing under the
laws of the State of Delaware and is duly qualified to carry on its business in
the states or jurisdictions where the Assets are located.

5.2                                 Power.  Purchaser has the power and
authority to enter into and perform this Agreement and the transactions
contemplated hereby.  No suit, action or
other proceeding by a third party or a Governmental Entity is pending or
threatened which seeks substantial damages from Purchaser in connection with,
or seeks to restrain, enjoin or otherwise prohibit, the 

 20
 

 

 

consummation of the transactions contemplated
by this Agreement.  Subject to applicable
requirements under the HSR Act, and to rights to consent by, required notices
to, and filings with or other actions by Governmental Entities where the same
are customarily obtained subsequent to the assignment of oil and gas interests
and leases, the execution, delivery and performance of this Agreement by
Purchaser, and the transactions contemplated hereby, will not violate (a) any
provision of the limited partnership agreement or other formation documents of
Purchaser, (b) any material agreement or instrument to which Purchaser is a
party or by which Purchaser is bound, (c) any judgment, order, ruling, or
decree applicable to Purchaser as a party in interest, or (d) any law, rule or
regulation applicable to Purchaser.

5.3                                 Authorization.  The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby have been duly and validly authorized by all requisite
corporate or partnership action (including all necessary approvals of any
general partner of Purchaser) on the part of Purchaser. This Agreement has been
duly executed and delivered on behalf of Purchaser, and at the Closing all
documents and instruments required hereunder to be executed and delivered by
Purchaser shall have been duly executed and delivered.  This Agreement does, and such documents and
instruments shall, constitute legal, valid and binding obligations of Purchaser
enforceable in accordance with their terms, subject, however, to the effect of
bankruptcy, insolvency, reorganization, moratorium and similar laws from time
to time in effect relating to the rights and remedies of creditors, as well as
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

5.4                                 Brokers.  Purchaser has incurred no
obligation or liability, contingent or otherwise, for brokers’ or finders’ fees
in respect of the matters provided for in this Agreement which will be the
responsibility of Noble; and any such obligation or liability that might exist
shall be the sole obligation of Purchaser.

5.5                                 Further Distribution. 
Purchaser is not acquiring the Leasehold Interests with a view to, or
for offer of resale in connection with, a non-exempt distribution thereof
within the meaning of the Securities Act of 1933, as amended, and the rules and
regulations pertaining to it or a distribution thereof in violation of any
applicable securities laws.  Purchaser
covenants that if in the future it should decide to dispose of any of its interest
in the Assets, subject to any restriction on assignment set forth herein or in
the assignments delivered by Noble to Purchaser at the Closing, Purchaser will
do so only in compliance with any applicable federal and state securities laws.

5.6                                 Financial Statements.  To
the extent available, Purchaser has heretofore delivered to Noble copies of
Purchaser’s most recent audited financial statements and such financial
statements, if any, present fairly the financial position, results of
operations and changes in the financial position of Purchaser as of the dates,
or for the periods, as applicable, indicated thereon, and such financial
statements, if any, have been prepared in conformity with GAAP (except as
otherwise noted therein). Since the date of such financial statements, if any,
there has been no material adverse change in the financial condition of
Purchaser.

5.7                                 Matters Affecting United States Minerals
Management Service Approval.  Purchaser has no Knowledge of any matter or
circumstance applicable to Purchaser that would 

 21
 

 

 

preclude or inhibit unconditional United
States Minerals Management Service (“MMS”) approval of the assignment of the Assets from Noble to Purchaser.

5.8                                 Purchaser Financing. 
Purchaser has arranged to have available by the Closing, sufficient
funds to enable it to pay in full the Purchase Price as herein provided.

5.9                                 Bankruptcy Proceedings. 
There are no bankruptcy, reorganization, insolvency, or receivership
actions pending, being contemplated by, or, to the Knowledge of Purchaser,
threatened against Purchaser.

5.10                           Additional Representations and Warranties. 
Purchaser specifically and expressly includes in its representations and
warranties to Noble, those representations and warranties included in Section
17.18 and Section 17.20.

ARTICLE 6

PRE-CLOSING OBLIGATIONS OF NOBLE

6.1                                 Operations.  From the date of this
Agreement until Closing (the “Interim Period”),
except as otherwise approved by Purchaser (which approval shall not be
unreasonably withheld), Noble (a) shall permit Purchaser to have access to
those Assets operated by Noble and shall use reasonable efforts to provide
Purchaser access to those Assets not operated by Noble (which access shall be
subject to Section 7.4), (b) shall operate the Assets for which it is the operator
in accordance with past practices, (c) shall exercise reasonable diligence in
safeguarding and maintaining secure and confidential all geological maps,
confidential reports and data in its possession relating to the Assets, (d)
shall not transfer, sell, hypothecate, encumber or otherwise dispose of or
encumber any of the Assets (other than Hydrocarbons in the ordinary course of
business or as required in connection with the exercise by third parties of
preferential rights to purchase any of the Assets), (e) shall maintain
insurance now in force with respect to the Assets, (f) shall consult with
Purchaser in relation to any expenditure regarding the Assets that exceeds
$250,000, (g) before undertaking an operation or making a single expenditure in
respect of the Assets to be in excess of Two Hundred Fifty Thousand Dollars
($250,000), and before conducting an operation to drill, sidetrack, deepen,
complete, or recomplete a well (regardless of the estimated cost) on any of the
Leasehold Interests, shall submit an AFE for the operation or expenditure to
Purchaser for approval, (h) shall furnish an informational AFE to Purchaser for
an operation or single expenditure estimated to cost $250,000 or less, but in
excess of $100,000, if Noble prepares the same for its own use, and (i) shall
notify Purchaser as soon as reasonably possible when it appears the cost of an
operation will exceed the original AFE by more than twenty percent (20%), which
notice shall be furnished to Purchaser as a supplemental AFE for informational
purposes only and is not subject to Purchaser’s approval.  In addition, without the consent of Purchaser
(which shall not be unreasonably withheld or delayed), during the Interim
Period, Noble shall not (i) except with respect to matters retained by Noble
pursuant to this Agreement, waive, compromise or settle any right or claim for
an amount in excess of $250,000 regarding the Assets or which may reasonably be
expected to have an adverse effect on the value of the Assets as a whole in
excess of $250,000, (ii) except in connection with AFEs, incur obligations with
respect to the Assets for which Purchaser would be responsible after the
Effective Time, other than transactions (x) the costs of which do not exceed
$250,000 

 22
 

 

 

individually and which are of a nature
consistent with past practices employed by Noble with respect to the Assets,
and/or (y) in connection with situations believed in good faith by Noble to
constitute an emergency (in which case Noble’s obligation is limited to
notifying Purchaser as soon as reasonably practicable of such emergency and
obligations), (iii) except in connection with AFEs, commit to capital
expenditures or the acquisition or construction of fixed assets for which
Purchaser shall have financial responsibility in connection with the Assets in
an amount individually in excess of $250,000, except in connection with
situations believed in good faith by Noble to constitute an emergency (in which
case Noble’s obligation is limited to notifying Purchaser as soon as reasonably
practicable of such emergency and obligations), (iv) enter into a contract with
an Affiliate of Noble or a contract with a term of greater than thirty (30)
days (which contracts regard the Assets) unless it can be terminated without
penalty on no more than thirty (30) days notice, or (v) terminate, or
materially amend, or agree to terminate or materially amend, any of the
Material Contracts, except renewals or extensions of such contracts on
substantially the same terms.  If
Purchaser fails to provide such approval with respect to the first sentence of
this Section 6.1 or consent with respect to the second sentence of this Section
6.1 within ten (10) days (or such shorter period of time as may be reasonably
required) of receiving Noble’s written request therefor, then Purchaser shall
be deemed to have approved of or consented to the request set forth in such
written notice.

6.2                                 HSR Act.  If applicable, Noble shall
prepare and submit, in a timely manner, all necessary filings for Noble in
connection with the transactions contemplated by this Agreement that may be
required under the HSR Act and the rules and regulations thereunder.  Noble shall request expedited treatment of
such filing by the Federal Trade Commission, shall promptly make any
appropriate or necessary subsequent or supplemental filings, and shall
cooperate with Purchaser in the preparation of such filings as are necessary
and appropriate.

ARTICLE 7

PRE-CLOSING OBLIGATIONS OF PURCHASER

7.1                                 Confidentiality. 
Purchaser shall cause (a) any information relating to the terms of the
transactions contemplated hereunder and (b) the information and data furnished
or made available by Noble to Purchaser and its officers, employees,
representatives, Affiliates and potential financing sources in connection with
this Agreement or Purchaser’s investigation of the Assets, in each case to be
maintained in confidence and not to be used for any purpose other than in
connection with this Agreement or Purchaser’s investigation of the Assets;
provided, however, that the foregoing obligation shall terminate on the earlier
to occur of (i) the Closing, (ii) such time as the information or data in
question is disclosed to Purchaser by a third party that is not obligated to
Noble to maintain same in confidence, or (iii) such time as the information or
data in question becomes generally available to the oil and gas industry other
than through the breach of the foregoing obligation.  The obligations of Purchaser under this
Section 7.1 shall be in addition to, and not in lieu of, Purchaser’s
obligations under the Confidentiality Agreement previously executed by Noble
and First Reserve Corporation. Notwithstanding anything to the contrary
contained in the Confidentiality Agreement, Purchaser acknowledges and agrees
that the terms and provisions of the Confidentiality Agreement shall not be
superseded by the provisions of this Agreement, but shall continue in full
force and effect until the Closing of the transactions 

 23
 

 

 

described herein, at which time, such
agreement shall automatically expire and be of no further force and effect.

7.2                                 Return of Data. 
Purchaser agrees that if this Agreement is terminated for any reason
whatsoever, Purchaser shall, at Noble’s request, promptly return to Noble all
information and data furnished by or on behalf of Noble to Purchaser, its
officers, employees, representatives, Affiliates and potential financing
sources, in connection with the Assets or Purchaser’s investigation of the
Assets, and Purchaser shall deliver to Noble or destroy all copies, extracts or
excerpts of such information and data and all documents generated by Purchaser
that contain any portion of such information or data.

7.3                                 Notice of Certain Title Matters and Imbalance. 
Purchaser shall notify Noble promptly (but in no event to exceed five
(5) days) upon Purchaser’s discovery prior to Closing of a title benefit of the
type described in Section 3.1(f) or of an Imbalance (in each case) resulting in
an increase in the Purchase Price hereunder.

7.4                                 Indemnity Regarding Access. 
PURCHASER AGREES TO RELEASE, INDEMNIFY, DEFEND AND HOLD HARMLESS NOBLE
AND ITS AFFILIATES, AND ITS AND THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS
AND REPRESENTATIVES (COLLECTIVELY, THE “NOBLE INDEMNIFIED PARTIES”) FROM AND AGAINST ANY AND ALL CLAIMS,
LIABILITIES, LOSSES, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, COURT
COSTS AND REASONABLE ATTORNEYS’ FEES) (COLLECTIVELY “LOSSES”) IN
CONNECTION WITH PERSONAL INJURIES, INCLUDING DEATH, OR PROPERTY DAMAGE, ARISING
OUT OF OR RELATING TO THE PRE-CLOSING ACCESS OF PURCHASER, ITS AGENTS,
EMPLOYEES, CONTRACTORS, PURCHASER’S ENVIRONMENTAL CONSULTANT AND OTHER
REPRESENTATIVES TO THE ASSETS AND TO OTHER INFORMATION RELATING THERETO AS
PERMITTED UNDER THIS AGREEMENT, REGARDLESS OF WHETHER SUCH INJURIES, DEATH OR
DAMAGES ARE CAUSED IN WHOLE OR PART BY THE SOLE, PARTIAL, CONCURRENT OR OTHER
NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF THE NOBLE INDEMNIFIED PARTIES,
EXCEPT TO THE EXTENT CAUSED BY ANY OF THE NOBLE INDEMNIFIED PARTIES’ GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. IT IS THE EXPRESS INTENTION OF THE PARTIES
THAT THE INDEMNITY PROVIDED FOR BY THIS SECTION 7.4 CONSTITUTES AN AGREEMENT BY
PURCHASER TO INDEMNIFY AND PROTECT THE NOBLE INDEMNIFIED PARTIES FROM THE
CONSEQUENCES OF THEIR OWN NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT,
REGARDLESS OF WHETHER SAME IS THE SOLE OR A CONCURRENT CAUSE OF THE INJURY,
DEATH OR DAMAGE, EXCEPT AND TO THE EXTENT CAUSED BY ANY NOBLE INDEMNIFIED PARTY’S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITH RESPECT TO THE NON-OPERATED
ASSETS, PURCHASER FURTHER AGREES THAT ACCESS SHALL BE CONDITIONED UPON
PURCHASER, ITS AGENTS, EMPLOYEES, CONTRACTORS OR OTHER REPRESENTATIVES
EXECUTING APPROPRIATE BOARDING AGREEMENTS AS MAY BE REQUIRED BY THE OPERATOR OF
ANY SUCH ASSETS.

 24
 

 

 

7.5                                 HSR Act.  If applicable, Purchaser shall
prepare and submit, in a timely manner, all necessary filings for Purchaser in
connection with the transactions contemplated by this Agreement under the HSR
Act and the rules and regulations thereunder. 
Purchaser shall request expedited treatment of such filing by the
Federal Trade Commission, shall promptly make any appropriate or necessary
subsequent or supplemental filings, and shall cooperate with Noble in the
preparation of such filings as are necessary and appropriate.

ARTICLE 8

NOBLE’S CONDITIONS OF CLOSING

Noble’s obligation
to consummate the transactions provided for herein is subject to the
satisfaction or waiver on or before the Closing Date of the following
conditions:

8.1                                 Representations and Warranties.  The
representations and warranties of Purchaser contained in Article 5 shall be
true and correct, to the extent qualified by materiality, in all respects, and
to the extent not so qualified, in all material respects, (in each case) as of
the Closing Date as though made on and as of that date.

8.2                                 Performance.  Purchaser shall have performed
in all material respects each of the obligations, covenants and agreements
required hereunder to be performed by it at or prior to the Closing.

8.3                                 Officer or Attorney-in-Fact Certificate.  Purchaser
shall have delivered to Noble a certificate of an officer or attorney-in-fact,
dated the date of Closing, certifying on behalf of Purchaser that the
conditions set forth in Sections 8.1 and 8.2 have been fulfilled.

8.4                                 Operatorship Forms. 
Purchaser shall have executed and delivered to Noble such forms as may
be required by any Governmental Entity having jurisdiction to evidence the
change of operatorship from Noble to Purchaser on all Leasehold Interests
constituting a part of the Assets that are operated by Noble.

8.5                                 Bonds.  Prior to Closing, Purchaser
shall have delivered to Noble either: (a)(i) copies of any bonds, in form and
substance and issued and executed by a surety satisfactory to Noble and the
MMS, covering any Noble operated Leasehold Interests for which bonding is
required under any Applicable Laws of any Governmental Entities having
jurisdiction over the Assets; or (ii) a commitment by a surety satisfactory to
Noble and the MMS to issue such bonds simultaneously with Closing; and (b)
copies of any supplemental bonds required by the MMS, in form and substance and
issued and executed by a surety satisfactory to Noble, sufficient to satisfy
all plugging, abandonment and restoration obligations relating to the Assets.

8.6                                 Insurance.  Purchaser shall have procured
insurance policies providing the coverage set forth in Schedule 8.6.

8.7                                 Certificate of Authority. 
Purchaser shall deliver to Noble a Certificate of Authority dated as of
the Closing Date, certifying that the execution, delivery and performance of
the transactions contemplated hereby have been duly and validly authorized by
all requisite action on the part of Purchaser and that the individual(s)
executing the documents contemplated 

 25
 

 

 

hereby have been duly and validly authorized
to represent and bind the Purchaser in connection therewith.

8.8                                 Exemption Certificates.  If
applicable, Purchaser shall provide Noble with properly executed exemption
certificates or other documentation evidencing that the transfer of the Assets
to Purchaser is exempt from applicable sales or similar taxes.

8.9                                 HSR Act.  The Closing shall be permitted
to occur without violation of the HSR Act.

8.10                           Casualty Loss or Condemnation.  No
portion of the Assets shall have been damaged or destroyed by a Casualty or
taken in condemnation or under right of eminent domain where, in the event of a
Casualty, the cost to repair, replace or restore the affected Assts (such cost
not to exceed the Allocated Value of such affected Assets) to at least their
condition prior to such Casualty exceeds 40% of the Purchase
Price or, in the case of such taking, the Allocated Value of the affected
Assets exceeds 40% of the Purchase Price.

8.11                           Purchase Price Adjustments.  The
sum of the amounts by which the Purchase Price will be decreased pursuant to
Section 2.2(b)(ii) and Section 2.2(b)(iii) (excluding any amounts attributable
to a Casualty or taking described in Section 3.11 for which Purchaser is
entitled to receive a Purchase Price reduction pursuant to Section 3.11) shall
not be in excess of 25% of the Purchase Price.

ARTICLE 9

PURCHASER’S CONDITIONS OF CLOSING

Purchaser’s
obligation to consummate the transactions provided for herein is subject to the
satisfaction or waiver on or before the Closing Date of the following
conditions:

9.1                                 Representations and Warranties.  The
representations and warranties of Noble contained in Article 4 shall be true
and correct, to the extent qualified by materiality, in all respects, and to
the extent not so qualified, in all material respects, (in each case) as of
Closing as though made on and as of that date.

9.2                                 Performance.  Noble shall have performed in
all material respects each of the obligations, covenants and agreements
required hereunder to be performed by it at or prior to the Closing.

9.3                                 Officer or Attorney-in-Fact Certificate. 
Noble shall have delivered to Purchaser a certificate of a corporate
officer or attorney-in-fact, dated the date of Closing, certifying on behalf of
Noble that the conditions set forth in Sections 9.1 and 9.2 have been
fulfilled.

9.4                                 Litigation.  There shall be no legal or
arbitration proceedings against Noble or involving the Assets, in either case
with respect to which Noble has received service of process or other written
notice, that reasonably is expected to materially and adversely affect the
value of the Assets taken as a whole after the Effective Time.

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9.5                                 Certificate of Authority. 
Noble shall have delivered to Purchaser a Certificate of Authority dated
as of the Closing Date certifying that the execution, delivery and performance
of the transactions contemplated hereby have been duly and validly authorized
by all requisite action on the part of Noble and that the individuals executing
the documents contemplated hereby have been duly and validly authorized to
represent and bind Noble in connection therewith.

9.6                                 Operatorship Forms. 
Noble shall have executed and delivered to Purchaser such forms as may
be required by any governmental authority having jurisdiction to evidence the
change of operatorship from Noble to Purchaser on all Leasehold Interests
constituting a part of the Assets that are operated by Purchaser.

9.7                                 HSR Act.  The Closing shall be permitted
to occur without violation of the HSR Act.

9.8                                 Casualty Loss.  No
portion of the Assets shall have been damaged or destroyed by a Casualty or
taken in condemnation or under right of eminent domain where, in the event of a
Casualty, the cost to repair, replace or restore the affected Assts (such cost
not to exceed the Allocated Value of such affected Assets) to at least their
condition prior to such Casualty exceeds 40% of the Purchase Price or, in the
case of such taking, the Allocated Value of the affected Assets exceeds 40% of
the Purchase Price.

9.9                                 Purchase Price Adjustments.  The
sum of the amounts by which the Purchase Price will be decreased pursuant to
Section 2.2(b)(ii) and Section 2.2(b)(iii) (excluding any amounts attributable
to a Casualty or taking described in Section 3.11 for which Purchaser is
entitled to receive a Purchase Price reduction pursuant to Section 3.11) shall
not be in excess of 25% of the Purchase Price.

ARTICLE 10

CLOSING

10.1                           Time and Place of Closing. 
Subject to the conditions stated in this Agreement, the consummation of
the transactions contemplated hereby (the “Closing”) shall occur on June 30, 2006; provided, however, that if all of the
conditions to Closing set forth in Articles 8 and 9 have not been satisfied or
waived by such Time or any extended Time for Closing, the Party whose
obligations are subject to the conditions that have not been satisfied or
waived shall have the right to extend the Time of Closing for successive
periods of up to seven (7) days each until such conditions shall have been
satisfied or waived, subject to Section 12.1(d).  The Time Closing actually occurs is herein
called the “Closing Date.”  The
Closing shall be held at Fulbright & Jaworski L.L.P.’s offices in
Houston, Texas, or at such other location as may be mutually agreed upon by
Noble and Purchaser.

10.2                           Closing Obligations.  At
the Closing, the following events shall occur:

(a)                                  Noble shall execute, acknowledge and deliver
to Purchaser the Assignment and Bill of Sale in the form of (i) Schedule 10.2(a)(1) for the Assets located in the 

 27
 

 

 

State of Texas, (ii) Schedule 10.2(a)(2) for the Assets located in the State of
Louisiana, (iii) Schedule
10.2(a)(3) for the
Assets located in the State of Mississippi, (iv) Schedule 10.2(a)(4)
for the Assets located in the State of Alabama, (v) Schedule 10.2(a)(5)
for the offshore Assets in which Noble has record title, and (vi) Schedule 10.2(a)(6) for the offshore Assets in which Noble has
operating rights.

(b)                                 Noble and Purchaser shall execute,
acknowledge and deliver transfer orders or letters in lieu thereof directing
all parties paying for production to make payment to Purchaser of proceeds
attributable to production after the Closing Date from the Leasehold Interests;

(c)                                  Purchaser shall make the payment(s) described
in Section 2.3;

(d)                                 Noble shall execute and deliver a certificate
certifying its non-foreign status in accordance with Treasury Regulations
§1.1445-2(b);

(e)                                  Purchaser shall deliver the certificates
referenced in Section 8.3, Section 8.7 and Section 8.8 and deliver a copy of
the insurance coverage referenced in Section 8.6;

(f)                                    Noble shall deliver the certificates
referenced in Section 9.3 and Section 9.5;

(g)                                 Purchaser and Noble shall execute and deliver
the Transition Agreement described in Section 11.6; and

(h)                                 Purchaser and Noble shall execute such other
instruments and take such other action as may be necessary to carry out their
obligations under this Agreement.

10.3                           Post Closing Obligations. 
Noble shall, as soon as is reasonably possible after the Closing, but in
event within 30 Business Days thereafter, deliver to Purchaser, at Noble’s
offices, the Records (it being understood and agreed that Noble shall be
entitled to retain a copy of the Records and shall grant access to the Records
to Purchaser until same are delivered to Purchaser).

ARTICLE 11

ADDITIONAL AGREEMENTS

11.1                           Calculation of Adjusted Purchase Price. 
Within ninety (90) days after the Closing Date, Noble shall prepare in
good faith, in accordance with this Agreement and with GAAP, and deliver to
Purchaser a statement setting forth each adjustment to the Purchase Price
required pursuant to Section 2.2 and showing the calculation of each such
adjustment.  Within thirty (30) days
after receipt of such statement from Noble, Purchaser shall deliver to Noble a
written report containing all changes with explanations therefor that Purchaser
proposes be made to such statement, it being agreed that Purchaser’s failure to
deliver such report to Noble within such time period shall constitute
acceptance by Purchaser of Noble’s statement. 
From and after the expiration of such 30-day period, no additional
changes to the statement provided by Noble shall be considered by the
Parties.  If Purchaser has timely
delivered such written report to Noble, the 

 28
 

 

 

Parties shall then undertake to agree on the
items in dispute and the final Adjusted Purchase Price no later than thirty
(30) days after the receipt by Noble of Purchaser’s statement of proposed
changes.  Following the final
determination of the Adjusted Purchase Price pursuant to this Section 11.1,
Noble or Purchaser, as the case may be, shall make the payment required
pursuant to Section 2.5.

11.2                           Suspended Funds. 
Noble has provided to Purchaser a listing showing all proceeds from
production attributable to the Leasehold Interests that are currently held in
suspense and at the Closing Noble shall transfer to Purchaser such suspended
proceeds. Purchaser shall be responsible for proper distribution of all such
suspended proceeds to the parties lawfully entitled to them, and hereby agrees
to indemnify, defend and hold harmless Noble from and against any and all
Losses arising out of or relating to such suspended proceeds.

11.3                           Receipts and Credits. 
Subject to the terms hereof and except to the extent same have already
been taken into account as an adjustment to the Purchase Price, all monies, proceeds,
receipts, credits and income attributable to the Assets (a) for all periods of
time subsequent to the Effective Time, shall be the sole property and
entitlement of Purchaser, and, to the extent received by Noble, Noble shall
fully disclose, account for and transmit same to Purchaser promptly and (b) for
all periods of time prior to the Effective Time, shall be the sole property and
entitlement of Noble and, to the extent received by Purchaser, Purchaser shall
fully disclose, account for and transmit same to Noble promptly.  Subject to the terms hereof and except to the
extent same have already been taken into account as an adjustment to the
Purchase Price, all costs and operational expenses, attributable to the Assets
(i) for periods of time prior to the Effective Time, regardless of when due or
payable, shall be the sole obligation of Noble and Noble shall promptly pay, or
if paid by Purchaser, promptly reimburse Purchaser for and hold Purchaser
harmless from and against same and (ii) for periods of time subsequent to the
Effective Time, regardless of when due or payable, shall be the sole obligation
of Purchaser and Purchaser shall promptly pay, or if paid by Noble, promptly
reimburse Noble for and hold Noble harmless from and against same.  Except to the extent same have already been
taken into account as an adjustment to the Purchase Price, all uncollected
accounts receivable as of the Closing Date attributable to the Assets after the
Effective Time shall be assigned to Purchaser, and all uncollected accounts
receivable as of the Closing Date attributable to the Assets prior to the
Effective Time shall be retained by Noble. 
It is understood and agreed that this Section 11.3 shall govern only the
handling of revenues and expenses of operations.

11.4                           Assumption of Liabilities; Cross Indemnity.  If
the Closing occurs, Noble and Purchaser agree as follows:

(a)                                  Subject to the other express terms and
conditions of this Agreement, Purchaser hereby assumes and agrees to pay,
perform and discharge the following liabilities and obligations (collectively,
the “Assumed
Obligations”):

(i)                                     Except for the matters covered by the terms
of Section 11.4(a)(ii), Section 11.4(c) and Article 16, which shall control
with respect to the matters covered thereby, Purchaser, from and after the
Closing Date, hereby assumes and shall be responsible for and agrees to
release, indemnify, defend and hold harmless the Noble Indemnified Parties from
and 

 29
 

 

 

against any and all Losses attributable to or
arising out of the condition or operation of the Assets before, on or after the
Closing Date (including, without limitation, with respect to damage to
property, or injury to or death of persons, in each case occurring after the
Closing Date but attributable in whole or in part to conditions or operations
that existed or occurred before the Closing Date) including but not limited to
Losses that are determined to be a result of or caused in whole or in part by
any of the Noble Indemnified Parties’ violation of, failure to fulfill duties
imposed by or incurrence of liability under Applicable Law, WITHOUT REGARD TO
CAUSE OR ANY NEGLIGENT ACTS OR OMISSIONS (INCLUDING SOLE NEGLIGENCE, CONCURRENT
NEGLIGENCE OR STRICT LIABILITY), BREACH OF DUTY (STATUTORY OR OTHERWISE),
VIOLATION OF LAW, OR OTHER FAULT OF ANY OF THE NOBLE INDEMNIFIED PARTIES, OR
ANY PREEXISTING DEFECT; provided however, that Noble shall release, indemnify,
defend and hold harmless the Purchaser Indemnified Parties from and against any
Losses arising out of or attributable to, either directly or indirectly, the
condition or operation of the Assets at any time before the Closing Date to the
extent and only to the extent that same are determined to be the result of or
caused by Noble’s violation of, failure to fulfill duties imposed by or
incurrence of liability under Applicable Law and further to the extent only
that such Losses are the result of a Third-Party (“Third-Party” shall not include Purchaser’s officers,
Affiliates, employees, contractors, agents, representatives or potential financing
sources) claim, lawsuit or administrative proceeding that is filed, issued or
commenced against Purchaser within three hundred sixty-five (365) days
following the Closing Date.

(ii)                                  With respect to any and all Wells and
facilities included in the Assets, including without limitation, wells and
facilities currently in use, and wells and facilities that have been
temporarily or permanently abandoned, Purchaser, from and after Closing,
accepts sole responsibility for same and agrees to pay all costs and expenses
associated with plugging and abandonment of all wells, decommissioning of all
facilities included in the Assets, and clearing of sites and restoring seabeds
associated with the Assets, and may not claim the fact that plugging and
abandonment, decommissioning, site clearance or seabed restoration operations
are not complete or that additional costs and expenses are required to complete
plugging and abandonment, decommissioning, site clearance or seabed restoration
operations as a breach of Noble’s representations and warranties under this
Agreement or the basis for any other redress against Noble, and Purchaser (on
behalf of Purchaser and its successors and assigns) irrevocably waives any and
all claims they may have against Noble associated with the same.  PURCHASER, FROM AND AFTER THE CLOSING DATE,
HEREBY RELEASES THE NOBLE INDEMNIFIED PARTIES FROM AND SHALL FULLY PROTECT,
DEFEND, INDEMNIFY, AND HOLD THE NOBLE INDEMNIFIED PARTIES HARMLESS FROM AND
AGAINST ANY AND ALL LOSSES RELATING TO, ARISING OUT OF, OR CONNECTED WITH,
DIRECTLY OR INDIRECTLY, PLUGGING AND ABANDONMENT OF WELLS, DECOMMISSIONING OF
FACILITIES, AND CLEARING OF SITES AND RESTORING SEABEDS ASSOCIATED WITH THE
ASSETS, NO MATTER WHETHER ARISING BEFORE OR AFTER THE EFFECTIVE TIME. THIS INDEMNITY
AND DEFENSE OBLIGATION WILL APPLY REGARDLESS OF CAUSE OR OF ANY NEGLIGENT ACTS
OR OMISSIONS (INCLUDING SOLE NEGLIGENCE, CONCURRENT NEGLIGENCE OR STRICT
LIABILITY), BREACH OF DUTY (STATUTORY OR 

 30
 

 

 

OTHERWISE), VIOLATION OF LAW, OR OTHER FAULT
OF ANY OF THE NOBLE INDEMNIFIED PARTIES, OR ANY PREEXISTING DEFECT.

(iii)                               Any and all obligations to make up, deliver
or pay for Hydrocarbons under any gas balancing or similar arrangements
affecting the Assets in respect of amounts owed thereunder by Noble as of the
Effective Time.

(b)                                 EXCEPT FOR THE MATTERS COVERED BY SECTION
11.4(C) AND ARTICLE 16 (WHICH SHALL CONTROL WITH RESPECT TO THE MATTERS COVERED
THEREBY), PURCHASER AGREES, FROM AND AFTER THE CLOSING DATE, TO RELEASE,
INDEMNIFY, DEFEND AND HOLD HARMLESS THE NOBLE INDEMNIFIED PARTIES FROM AND
AGAINST ANY AND ALL LOSSES THAT ARE ATTRIBUTABLE TO (I) THE ASSUMED OBLIGATIONS
OR (II) A BREACH BY PURCHASER OF ANY OF ITS REPRESENTATIONS, WARRANTIES,
COVENANTS OR AGREEMENTS HEREUNDER.

(c)                                  EXCEPT FOR THE MATTERS COVERED BY ARTICLE 16
(WHICH SHALL CONTROL WITH RESPECT TO THE MATTERS COVERED THEREBY), NOBLE AGREES
TO RELEASE, INDEMNIFY, DEFEND AND HOLD HARMLESS PURCHASER AND ITS AFFILIATES,
AND ITS AND THEIR, MEMBERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND REPRESENTATIVES
(THE “PURCHASER
INDEMNIFIED PARTIES”)
FROM AND AGAINST ANY AND ALL LOSSES THAT ARE ATTRIBUTABLE TO (I) A BREACH BY
NOBLE OF ANY OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS OR AGREEMENTS
HEREUNDER, (II) ANY LAWSUIT, CAUSE OF ACTION OR CLAIM, INCLUDING THE FIRST ITEM
LISTED ON SCHEDULE 4.9,
ASSERTED BY A THIRD-PARTY RELATING TO THE ASSETS THAT IS RECEIVED BY, OR FILED,
ISSUED OR COMMENCED AGAINST, NOBLE OR ANY OF ITS AFFILIATES ON OR BEFORE THE
CLOSING DATE, (III) THE OWNERSHIP OR OPERATION OF THE ASSETS BEFORE THE
EFFECTIVE TIME OR (IV) THE EXCLUDED ASSETS, TO THE EXTENT ONLY THAT (A)
PURCHASER PROVIDES NOBLE WITH A CLAIM NOTICE PRIOR TO THE EXPIRATION OF THE
SURVIVAL PERIOD FOR THE APPLICABLE REPRESENTATION, WARRANTY, AGREEMENT OR
COVENANT, AND (B) SUCH LOSSES UNDER (III) ABOVE ARE DETERMINED TO BE THE RESULT
OF OR CAUSED BY NOBLE’S VIOLATION OF APPLICABLE LAW OR FAILURE TO FULFILL
DUTIES IMPOSED BY APPLICABLE LAW AND ONLY TO THE EXTENT THAT SUCH LOSSES ARE
THE RESULT OF A THIRD-PARTY CLAIM, LAWSUIT OR ADMINISTRATIVE PROCEEDING THAT IS
RECEIVED BY, OR FILED, ISSUED OR COMMENCED AGAINST, PURCHASER ON OR BEFORE
THREE HUNDRED SIXTY-FIVE (365) DAYS AFTER THE CLOSING DATE.

(d)                                 The indemnity, defense and hold harmless
obligations set forth in Sections 11.4(b) and (c) above shall not apply to (i)
a claim for indemnification by a Party that relates to any amount or item for
which such Party received credit as an adjustment to the Purchase Price
pursuant to the provisions hereof and (ii) either Party’s costs and expenses
with respect to the negotiation and consummation of this Agreement and the
transactions contemplated hereby.

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(e)                                  All claims for indemnification under this
Agreement shall be asserted and resolved as follows:

(i)                                     To make claim for indemnification under this
Agreement, the Party having the right to be indemnified (the “Indemnified
Party”) shall notify the
Party having the obligation to indemnify another Party or parties (the “Indemnifying
Party”) of its claim,
including the specific basis for its claim (the “Claim Notice”).  In the event that the claim
for indemnification is based upon a claim by a Third Party against the
Indemnified Party (a “Third Party Claim”), the Indemnified Party shall provide its Claim Notice promptly after
the Indemnified Party has actual knowledge of the Third Party Claim and shall
enclose a copy of all papers (if any) served with respect to the Third Party
Claim; provided that the failure of any Indemnified Party to give notice of a
Claim as provided in this Section 11.4(e) shall not relieve the Indemnifying
Party of its obligations hereunder except to the extent such failure materially
prejudices the Indemnifying Party’s ability to defend against the claim and
then only to extent of such prejudice. 
If the claim for indemnification is based upon an inaccuracy or breach
of a representation, warranty, covenant or agreement, the Claim Notice shall
specify the representation, warranty, covenant or agreement that was inaccurate
or breached.

(ii)                                  In the case of a claim for indemnification
based upon a Third Party Claim, the Indemnifying Party shall have thirty (30)
days from its receipt of the Claim Notice to notify the Indemnified Party
whether it admits or denies its liability to defend the Indemnified Party
against such Third Party Claim.  The
Indemnified Party is authorized, prior to and during such thirty (30) day
period, at the expense of the Indemnifying Party, to file any motion, answer or
other pleading that it shall deem necessary to protect its interests or those
of the Indemnifying Party and that is not prejudicial to the Indemnifying
Party.

(iii)                               If the Indemnifying Party admits its
liability, it shall have the right and obligation to diligently defend, at its
sole cost, the Third Party Claim and the Indemnified Party may participate in
any defense or settlement of such Third Party Claim.  An Indemnifying Party shall not, without the
written consent of the Indemnified Party, (A) settle any Third Party Claim or
consent to the entry of any judgment with respect thereto which does not
include an unconditional written release of the Indemnified Party from all
liability in respect of such Third Party Claim or (B) settle any Third Party
Claim or consent to the entry of any judgment with respect thereto in any
manner that may materially and adversely affect the Indemnified Party (other
than as a result of money damages paid by the Indemnifying Party).

(iv)                              If the Indemnifying Party does not admit its
liability or admits its liability but fails to diligently prosecute or settle
the Third Party Claim, then the Indemnified Party shall have the right to
defend against the Third Party Claim at the sole cost of the Indemnifying
Party.  In such a case, the Indemnified
Party shall send written notice to the Indemnifying Party of any proposed
settlement of such Third Party Claim and the Indemnifying Party shall have the
option for ten (10) days following receipt of such notice to (A) admit in
writing its liability for such Third Party Claim and (B) if liability is so
admitted, reject, in its reasonable judgment, the proposed settlement.

 32
 

 

 

(v)                                 In the case of a claim for indemnification
not based upon a Third Party Claim, the Indemnifying Party shall have thirty
(30) days from its receipt of the Claim Notice to (A) cure the Losses complained
of, (B) admit its liability for such Losses or (C) dispute the claim for such
Losses.  If the Indemnifying Party does
not notify the Indemnified Party within such thirty (30) day period that it has
cured the Losses or that it disputes the claim for such Losses, the amount of
such Losses shall conclusively be deemed a liability of the Indemnifying Party
hereunder.

(f)                                    Notwithstanding anything hereinabove to the
contrary, at all times Noble expressly assumes and shall be responsible for and
agrees to release, indemnify, defend and hold harmless Purchaser from and
against any and all Losses attributable to interests in the nature of an
overriding royalty interest, production payment, net profits interest or any
other beneficial interest in oil and or gas production or proceeds or the
Leasehold Interests which is or may be claimed by any individual that was or is
an employee, officer, or director of Noble, its Affiliates, successors or
predecessors (“Noble Internal ORRIs”); if the net cumulative effect of such burdens operates to reduce the
Net Revenue Interest of Noble below the “Net Revenue Interest” or “NRI” set forth in Exhibit “A”
and Exhibit “A-1” for such
Leasehold Interest or Well.

11.5                           Imbalances.

(a)                                  All Imbalances (whether for overproduction by
Noble or underproduction by Noble) shall pass to Purchaser as of the Effective
Time, and except as provided in Section 2.2 and Section 11.5(b), Purchaser
shall thereupon be entitled to and assumes all rights and obligations with
respect to any and all such Imbalances. 
Except as provided in Section 2.2 and Section 11.5(b), there shall be no
amounts paid to or from either Party to the other as a Purchase Price
adjustment or otherwise based on Imbalances. 
Except as provided in Section 2.2 and Section 11.5(b), Purchaser from
and after Closing accepts sole responsibility for and agrees to pay all costs
and expenses associated with Imbalances associated with the Assets, and
Purchaser (on behalf of Purchaser and its successors and assigns) irrevocably
waives any and all claims it and they may have against Noble associated with
the same; and PURCHASER FROM AND AFTER THE CLOSING DATE RELEASES NOBLE FROM AND
SHALL FULLY PROTECT, DEFEND, INDEMNIFY AND HOLD NOBLE HARMLESS FROM AND AGAINST
ANY AND ALL LOSSES RELATING TO, ARISING OUT OF, OR CONNECTED WITH, DIRECTLY OR
INDIRECTLY, IMBALANCES ASSOCIATED WITH THE ASSETS, NO MATTER WHETHER ARISING
BEFORE OR AFTER THE EFFECTIVE TIME. THIS INDEMNITY AND DEFENSE OBLIGATION WILL
APPLY REGARDLESS OF CAUSE OR OF ANY NEGLIGENT ACTS OR OMISSIONS (INCLUDING SOLE
NEGLIGENCE, CONCURRENT NEGLIGENCE OR STRICT LIABILITY), BREACH OF DUTY
(STATUTORY OR OTHERWISE), VIOLATION OF LAW, OR OTHER FAULT OF NOBLE, OR ANY
PRE-EXISTING DEFECT.

(b)                                 In the event Purchaser shall determine prior
to Closing that Imbalances under Section 2.2(a)(iii) are in the excess of 2.1
bcf of gas or that Imbalances under Section 2.2(b)(vii) are in excess of .1 bcf
of gas, then Purchaser shall promptly notify Noble of the amount of such
excess.  Noble and Purchaser prior to the
Closing Date shall endeavor to agree upon the amount of such excess
Imbalances.  If the Parties shall have
failed to agree thereupon 

 33
 

 

 

by the Closing Date, the Purchase Price shall
not be adjusted therefor and the matter shall be resolved by arbitration
pursuant to Section 17.1.

11.6                           Transition Agreement. 
Purchaser and Noble shall execute and deliver the Transition Agreement
(in substantially the same form as Schedule
11.6) and
Letters-in-Lieu as provided in the Transition Agreement on the Closing Date.

11.7                           Further Assurances. 
After Closing, Noble and Purchaser agree to take such further actions
and to execute, acknowledge and deliver such additional documents and
instruments as may be necessary or useful in carrying out the purposes of this
Agreement or of any document delivered pursuant hereto.

11.8                           Material Contracts.  If
Closing occurs, Purchaser agrees to assume all of Noble’s obligations from and
after the Effective Time relating to the Orders and Contracts, as well as Noble’s
obligations under all leases, agreements, orders, instruments and documents
relating to the Assets which are : (a) of record or which are referenced in
documents of record or in any of the materials set forth on Exhibit “A-2” or (b) listed on an
exhibit or schedule to this Agreement.

11.9                           Marketing Contracts and Calls on Production. 
Except as disclosed on Schedule
11.9, Noble represents
that (a) to Noble’s Knowledge, Noble is not a party to any contract for the
sale and marketing of hydrocarbons produced from or attributable to the Assets
which has a term in excess of thirty (30) days; and (b) there are no calls on,
or other rights to purchase, Hydrocarbons produced from or attributable to the
Assets, whether or not the same are currently being exercised.

11.10                     Gas Processing Arrangement. 
Notwithstanding anything to the contrary contained herein, Noble shall
retain its present ownership interest in all gas processing plants and
facilities.

11.11                     Payout Balances. 
Noble represents that the payout balances on Wells in which a reversionary
interest is applicable are set forth on Schedule 11.11.

11.12                     Employee and Benefit Matters.

(a)                                  Prior to the expiration of fifteen (15)
Business Days after the date hereof, Noble shall deliver to Purchaser a list of
certain employees of Noble or its Affiliates who provide services primarily in
connection with the Assets (such employees being collectively the “Business
Employees”).  At the request of Purchaser, from and after
the date Purchaser receives such list from Noble until five (5) Business Days
prior to the Closing Date, Noble and such Affiliates shall make the Business
Employees available to Purchaser at reasonable times to discuss potential
employment with Purchaser or an Affiliate of Purchaser.  Purchaser or an Affiliate may offer employment
(which shall be effective as of and contingent on the occurrence of the
Closing) to each Business Employee at a base salary or hourly rate and employee
benefits that are substantially similar to the current base salary or hourly
rate of Purchaser or its Affiliate’s similarly situated employees and, unless
otherwise agreed by the employee, to provide 

 34
 

 

 

the same or substantially similar services
and at the same location or locations of employment.  Each offer of employment to a Business
Employee shall be consistent with the provisions of this Section 11.12(a).  On or before the date that is five (5)
Business Days prior to the Closing Date, Purchaser shall notify Noble which
Business Employees have accepted offers of employment with Purchaser or its
Affiliate, and which Business Employees have rejected such offers of
employment.  The employment with
Purchaser or an Affiliate of Purchaser of each Business Employee who accepts
such employment shall be effective as of the Closing Date.

(b)                                 To the extent that any obligations or
liabilities under the Worker Adjustment and Retraining Notification Act or
other similar state laws relating to plant or facility closings or otherwise
regulating the termination of employment of employees arise as a consequence of
the Transactions contemplated by this Agreement (collectively, “WARN
Obligations”), the
Parties hereby agree that Noble and its Affiliates shall be responsible for any
WARN Obligations arising as a result of any employment losses of Business
Employees occurring on or prior to the Closing Date, and Purchaser and its
Affiliates shall be responsible for any WARN Obligations arising as a result of
any employment losses of Business Employees occurring after the Closing
Date.  Notwithstanding the foregoing,
Purchaser shall make a sufficient number of offers of employment pursuant to
Section 11.12(a) above such that if all such offers are accepted, the WARN
Obligations would not apply to the transactions contemplated by this Agreement.

(c)                                  Purchaser shall cause each Business Employee
who accepts an offer of employment made pursuant to Section 11.12(a) (a “Continuing
Employee”) and such
Continuing Employee’s eligible dependents (including all such Continuing
Employee’s dependents covered immediately prior to the Closing Date by a group
health plan maintained by Noble or its Affiliates) to be eligible to be covered
under group health, prescription drug, dental and similar type welfare benefit
plans maintained by Purchaser or an Affiliate of Purchaser for the benefit of
its similarly situated employees that (i) provide benefits to the Continuing
Employee and such eligible dependents effective immediately upon the Closing
Date and (ii) credit such Continuing Employee, for the calendar year during
which such coverage under such plans begin, with any deductibles and
co-payments already incurred during such calendar year under plans that provide
similar benefits maintained by Noble or its Affiliates.  Purchaser shall cause each group health plan
sponsored by Purchaser or one of its Affiliates that a Continuing Employee may
be eligible to participate in on or after the Closing Date to waive any
preexisting condition exclusions applicable to such Continuing Employee and his
eligible dependents.

(d)                                 Purchaser shall cause the employee benefit
plans and programs maintained after the Closing by Purchaser and its Affiliates
for the benefit of its similarly situated employees to recognize and give
credit for each Continuing Employee’s years of service and level of seniority
prior to the Closing Date with Noble and its Affiliates (including service and
seniority with any other employer that was recognized by Noble or its
Affiliates) for purposes of terms of employment and eligibility, vesting,
benefit accrual (other than benefit accrual under a defined benefit pension
plan) and benefit determination under such plans and programs, including paid
vacation, paid sick time, severance benefits and employer contribution rates
under retirement plans.

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11.13                     Amendment of Schedules. 
Noble may, from time to time, prior to the Closing, by written notice to
Purchaser, supplement or amend the schedules and exhibits attached hereto
(other than Exhibit
“B” and Schedules 2.4(a), 3.1(c), 8.6, 10.2(a)(1)-(6)
and 11.6) to include
matters relating to Noble or the Assets that arises or occurs after the date
hereof and does not result from a breach by Noble of Section 6.1; provided that
such amendment shall be disregarded for the purposes of Section 9.1 and Section
12.1(c) to the extent that (a) the same would materially adversely affect
Purchaser’s rights under this Agreement, or (b) result in an adjustment to the
Purchase Price pursuant to Section 2.2.

11.14                     Gas Processing.  As a
condition to Closing, at the Closing, Purchaser and Noble will enter into an
agreement pursuant to which Noble or its Affiliates will provide to Purchaser
(a) at no economic burden to Purchaser or its Affiliates (as the case may be)
beyond that which Noble or its Affiliate bears as of the Effective Time, the
right to process all the gas produced from the Assets at gas processing plants
owned by Noble or its Affiliates or to which Noble or its Affiliates have the
right to use (in each case) as of the Effective Time that were processing gas
produced from the Assets as of the Effective Time, such right being subject to
the processing capacity at such plants in existence as of the Effective Time
(subject further to annual equity re-determination at such plants) and to all
obligations to process gas at such plants under commitments or agreements in
existence as of the Effective Time, (b) at no economic burden to Purchaser or
its Affiliates (as the case may be) beyond that which Noble or its Affiliate
bears as of the Effective Time, the right to cause all the gas produced from
the Assets to be separated at separation facilities owned by Noble or its
Affiliates or to which Noble or its Affiliates have the right to use (in each
case) as of the Effective Time that were separating gas produced from the
Assets as of the Effective Time, such right being subject to the capacity at
such facilities as of the Effective Time (subject further to annual equity
re-determination at such plants) and to all obligations to separate gas at such
facilities under commitments or agreements in existence as of the Effective
Time, and (c) the right to use shore-based facilities supporting the operations
of the Assets at market rates.  Such
agreement shall also contain such other terms and conditions as the Parties may
mutually agree.

11.15                     Description
of Parties’ Intent.  The Parties acknowledge that (a) it is the
intent of the Parties that Noble sell to Purchaser and that Purchaser purchase
all of the assets owned by Noble for the ownership and operation of the
Leasehold Interests except for the Excluded Assets, and (b) the exhibits
attached to this Agreement describing the Assets may incorrectly describe or
omit to describe such assets.  The
Parties acknowledge that such exhibits (and subject to Section 11.13, the
schedules) will be updated from time to time in connection with Purchaser’s due
diligence and so as to correctly reflect the Parties’ intent as stated above.

ARTICLE 12

TERMINATION

12.1                           Right of Termination.  This
Agreement and the transactions contemplated hereby may be terminated:

(a)                                  At any time at or prior to Closing by mutual
consent of Noble and Purchaser;

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(b)                                 by Noble, at Noble’s option, if any of the
conditions set forth in Article 8 have not been satisfied on or before the
Closing Date and such conditions remain unsatisfied for a period of ten (10)
days following written notice thereof from Noble to Purchaser (with the Closing
Date being extended until the expiration of such cure period or the
satisfaction of such conditions, whichever is earlier);

(c)                                  by Purchaser, at Purchaser’s option, if any
of the conditions set forth in Article 9 have not been satisfied on or before
the Closing Date and such conditions remain unsatisfied for a period of ten
(10) days following written notice thereof from Purchaser to Noble (with the
Closing Date being extended until the expiration of such cure period or the
satisfaction of such conditions, whichever is earlier); or

(d)                                 by Noble or Purchaser if the Closing shall
not have occurred on or before July 31, 2006;

provided, however,
that no Party shall have the right to terminate this Agreement pursuant to
clause (b), (c) or (d) above if such Party or its Affiliates are at such time
in material breach of any provision of this Agreement.

12.2                           Effect of Termination.  If
this Agreement is terminated pursuant to Section 12.1, this Agreement shall
become void and of no further force or effect, except for the provisions of
Sections 7.1, 7.2, 7.3, 7.4, 12.2, 17.2 through 17.10, 17.12, 17.13 and 17.15,
which shall survive such termination and continue in full force and effect and
the Parties shall have no liability or obligation hereunder except and to the
extent such termination results from the material breach by a Party of this
Agreement; provided that if Noble is entitled to the Deposit as liquidated
damages pursuant to Article 2, then such retention shall constitute full and
complete satisfaction of any and all damages and remedies Noble may have
against Purchaser.

ARTICLE 13

TAXES

13.1                           Apportionment of Ad Valorem and Property
Taxes.  All ad valorem taxes, real property taxes,
personal property taxes and similar obligations (“Property Taxes”) attributable to the Assets with respect to
the tax period in which the Effective Time occurs shall be apportioned as of
the Effective Time between Noble and Purchaser. 
The owner of record on the assessment date shall file or cause to be
filed all required reports and returns incident to the Property Taxes and shall
pay or cause to be paid to the taxing authorities all Property Taxes relating
to the tax period on which the Effective Time occurs. If Noble is the owner of
record on the assessment date, then Purchaser shall pay to Noble Purchaser’s
pro rata portion of Property Taxes within thirty (30) days after receipt of
Noble’s invoice therefor, except to the extent taken into account as an
adjustment to the Purchase Price pursuant to Section 2.2. If Purchaser is the
owner of record as of the assessment date then Noble shall pay to Purchaser
Noble’s pro rata portion of Property Taxes within thirty (30) days after
receipt of Purchaser’s invoice therefor.

13.2                           Sales Taxes.  The Purchase Price provided
for hereunder excludes any sales taxes or other taxes required to be paid in
connection with the sale of the Assets pursuant to this 

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Agreement. 
Purchaser, however, shall be liable for any sales and use taxes,
conveyance, transfer and recording fees and real estate transfer stamps or
taxes that may be imposed on any transfer of the Assets pursuant to this
Agreement.  Noble shall, in accordance
with Applicable Law, collect and remit any sales, gross receipts and similar
taxes that are required to be paid as a result of the transfer of the Assets by
Noble to Purchaser.

13.3                           Other Taxes.  All taxes (other than income
and franchise taxes) attributable to the Assets that are imposed on or with
respect to the production of Hydrocarbons or the receipt of proceeds therefrom
(including but not limited to severance, production, and excise taxes) shall be
apportioned between the Parties based upon the respective shares of production
taken by the Parties. All such taxes that have accrued with respect to the
period prior to the Closing Date have been or will be properly paid or withheld
by Noble (although such taxes for the period between the Effective Time and the
Closing Date will be taken into account as an adjustment to the Purchase Price
pursuant to Section 2.2(a)) and all statements, returns, and documents
pertinent thereto have been or will be properly filed.  Purchaser shall be responsible for paying or
withholding or causing to be paid or withheld all such taxes which have accrued
after the Closing Date and for filing all statements, returns, and documents
incident thereto.

13.4                           Cooperation.  Each Party shall provide the
other Party with reasonable access to all relevant documents, data and other
information (other than that which is subject to an attorney-client privilege)
which may be required by the other Party for the purpose of preparing tax
returns, filing refund claims and responding to any audit by any taxing
jurisdiction. Each Party shall cooperate with all reasonable requests of the
other Party made in connection with contesting the imposition of taxes.  Notwithstanding anything to the contrary in
this Agreement, neither Party shall be required at any time to disclose to the
other Party any tax return or other confidential tax information.  Except where disclosure is required by
Applicable Law, any information obtained by a Party pursuant to this Section
13.4 shall be kept confidential by such Party, except to the extent disclosure
is required in connection with the filing of any tax returns or claims for
refund or in connection with the conduct of an audit, or other proceedings in
response to an audit, by a taxing jurisdiction.

ARTICLE 14

DOCUMENT RETENTION

14.1                           Inspection.  As used in this Article 14, “Documents” shall mean all files, documents, books, data
and records delivered to Purchaser by Noble pursuant to the provisions of this
Agreement, including, but not limited to: 
financial and tax accounting records; land, title and division of
interest files; contracts; engineering and well files; and books and records
related to the operation of the Assets during the Interim Period.  Subject to the provisions of Section 14.2,
Purchaser agrees that the Documents shall be open for inspection by
representatives of Noble at reasonable times and upon reasonable notice during
regular business hours for a period of 10 years following the date of Closing
(or for such longer period as may be required by law or governmental
regulation), and that Noble may during such period at its expense make such
copies thereof as it may reasonably request.

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14.2                           Destruction.  For a period of 10 years after
the date of Closing (or for such longer period as may be required by Applicable
Law), Purchaser shall not destroy or give up possession of any original or
final copy of the Documents without first offering Noble the opportunity (by
delivery of written notice to Noble as provided in Section 17.7, with an
additional copy of such notice delivered to the attention of Noble’s Tax
Department), at Noble’s expense (without any payment to Purchaser), to obtain
such original or final copy or a copy thereof. 
After the conclusion of such period, Purchaser shall offer to deliver to
Noble, at Noble’s expense (without any payment to Purchaser), the Documents
prior to destroying same.

ARTICLE 15

INDEPENDENT INVESTIGATION AND DISCLAIMER

15.1                           Independent Investigation and Disclaimer. 
Purchaser acknowledges that (a) it has had access to the Assets and the
employees of Noble and (b) in making the decision to enter into this Agreement
and consummate the transactions contemplated hereby, Purchaser has relied
solely on the basis of its own independent investigation of the Assets and upon
the express representations, warranties, covenants and agreements set forth in
this Agreement.  Accordingly, Purchaser
acknowledges that, except as expressly set forth herein, Noble has not made,
AND NOBLE HEREBY EXPRESSLY DISCLAIMS AND NEGATES, EXCEPT FOR THE EXPRESS
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT, ANY REPRESENTATION
OR WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE, OR OTHERWISE RELATING
TO (i) THE CONDITION OF, OR FIELD OR ADMINISTRATIVE PRACTICES INVOLVING, THE
ASSETS (INCLUDING WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR OF CONFORMITY TO MODELS
OR SAMPLES OF MATERIALS, OR ENVIRONMENTAL CONDITION, OR THE CALCULATION OR
PAYMENT OF ROYALTY OR SIMILAR OBLIGATIONS), (ii) ANY INFRINGEMENT OF ANY PATENT
OR PROPRIETARY RIGHT OF ANY THIRD PARTY, OR (iii) ANY INFORMATION, DATA OR
OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED TO PURCHASER BY OR ON BEHALF OF
NOBLE (INCLUDING, WITHOUT LIMITATION, IN RESPECT OF GEOLOGICAL, GEOPHYSICAL AND
SEISMIC DATA, THE EXISTENCE OR EXTENT OF OIL, GAS OR OTHER MINERAL RESERVES,
THE RECOVERABILITY OF OR THE COST OF RECOVERING ANY SUCH RESERVES, THE VALUE OF
SUCH RESERVES, ANY PRODUCT PRICING ASSUMPTIONS, AND THE ABILITY TO SELL OIL OR
GAS PRODUCTION AFTER THE EFFECTIVE TIME AND THE ABILITY OF PURCHASER TO BECOME
OPERATOR OF THE ASSETS UNDER THE APPLICABLE OPERATING AGREEMENT); AND PURCHASER
WILL HAVE SOLE RESPONSIBILITY FOR ANY ACTION TAKEN BY PURCHASER, OR BY OTHERS
RELYING ON PURCHASER’S ADVICE, IN CONNECTION WITH THE OWNERSHIP OR OPERATION OF
THE ASSETS AFTER THE CLOSING DATE OR BASED ON THE GEOLOGICAL MAPS, RECORDS,
LOGS AND OTHER DATA, IF ANY, TRANSFERRED OR MADE AVAILABLE UNDER THIS
AGREEMENT; provided, however, that the foregoing disclaimer and negation of
representations and warranties shall not affect or impair the representations
and warranties of Noble set forth in Article 4 hereof. As used in this Section
15.1, “Noble” shall include Noble’s agents and
representatives.

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ARTICLE 16

ENVIRONMENTAL INDEMNITY

16.1                           Physical and Environmental Conditions. 
Purchaser agrees and acknowledges that (a) it has had, access to and the
opportunity to inspect the Assets for all purposes, including, without
limitation, the purposes of determining environmental compliance and detecting
the presence of hazardous or toxic substances, pollutants or other contaminants,
environmental hazards, naturally occurring radioactive materials (NORM) and
produced water contamination of the surface and/or subsurface, (b) subject to
Purchaser’s remedies hereunder, it has satisfied itself as to the physical and
environmental condition of the Assets, both surface and subsurface, and their
method of operation and environmental compliance and except as set forth
herein, and Purchaser agrees to accept an assignment of the Assets at Closing
on an “AS IS, WHERE IS” basis, “WITH ALL FAULTS” and (c) except for Noble’s representations
and warranties set forth in this Agreement, in making the decision to enter in
this Agreement and consummate the transactions contemplated hereby, Purchaser
has relied solely on the basis of its own independent investigation of the
Assets and the records related thereto.

16.2                           General Environmental Indemnity.  If
the Closing occurs, except as provided in the last clause of this Section 16.2
and without limiting Noble’s representations and warranties set forth in this
Agreement or Purchaser’s obligations under Section 11.4, Purchaser from and
after the Closing Date hereby assumes and shall be responsible for and agrees
to RELEASE, INDEMNIFY, DEFEND AND HOLD HARMLESS THE NOBLE INDEMNIFIED PARTIES
FROM AND AGAINST ANY AND ALL LOSSES ATTRIBUTABLE TO ENVIRONMENTAL COMPLIANCE,
DAMAGE TO PROPERTY, INJURY TO OR DEATH OF PERSONS OR OTHER LIVING THINGS,
NATURAL RESOURCE DAMAGES, CERCLA RESPONSE COSTS, ENVIRONMENTAL REMEDIATION AND
RESTORATION COSTS, OR FINES OR PENALTIES (COLLECTIVELY, “ENVIRONMENTAL CLAIMS”) ARISING
OUT OF OR ATTRIBUTABLE TO, IN WHOLE OR IN PART, EITHER DIRECTLY OR INDIRECTLY,
THE ENVIRONMENTAL CONDITION OR COMPLIANCE OF THE ASSETS AT ANY TIME BEFORE, AT
OR AFTER THE CLOSING DATE (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS RELATING
TO ANY CONDITION EXISTING ON, IN OR UNDER, OR RESULTING FROM OPERATION OF, THE
ASSETS AT ANY TIME BEFORE, AT OR AFTER THE CLOSING DATE) THAT IS DETERMINED TO
BE A RESULT OF OR CAUSED IN WHOLE OR IN PART BY NOBLE’S VIOLATION OF, FAILURE
TO FULFILL DUTIES IMPOSED BY OR INCURRENCE OF LIABILITY UNDER, ANY
ENVIRONMENTAL LAWS OR UNDER ANY PRINCIPLE OF COMMON LAW RELATING TO DUTIES TO
PROTECT OR NOT UNDULY DISTURB HUMAN HEALTH OR ENVIRONMENTAL QUALITY; PROVIDED,
HOWEVER, THAT NOBLE SHALL RELEASE, INDEMNIFY, DEFEND AND HOLD HARMLESS THE
PURCHASER INDEMNIFIED PARTIES FROM AND AGAINST ANY CLAIM ARISING OUT OF OR
ATTRIBUTABLE TO, IN WHOLE OR IN PART, EITHER DIRECTLY OR INDIRECTLY, THE
ENVIRONMENTAL CONDITION OR COMPLIANCE OF THE ASSETS AT ANY TIME BEFORE THE
CLOSING DATE THAT IS DETERMINED TO BE THE RESULT OF OR CAUSED IN WHOLE OR IN
PART BY NOBLE’S VIOLATION OF, FAILURE TO FULFILL DUTIES IMPOSED BY OR
INCURRENCE OF LIABILITY UNDER, ANY ENVIRONMENTAL LAWS (AS IN EFFECT ON THE
EFFECTIVE TIME) OR UNDER ANY 

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PRINCIPLE OF COMMON LAW (AS IN EFFECT ON THE
EFFECTIVE TIME) RELATING TO DUTIES TO PROTECT OR NOT UNDULY DISTURB HUMAN
HEALTH OR ENVIRONMENTAL QUALITY (OTHER THAN ANY SUCH CLAIMS RESULTING FROM OR
ATTRIBUTABLE IN WHOLE OR IN PART TO CONDITIONS OR OPERATIONS DISCLOSED IN THE
ENVIRONMENTAL REPORTS OR KNOWN TO PURCHASER AS OF THE DATE HEREOF), TO THE
EXTENT THAT (A) SUCH CLAIM HAS BEEN FINALLY DETERMINED IN A THIRD-PARTY LAWSUIT
OR ADMINISTRATIVE PROCEEDING OR ORDER THAT IS RECEIVED BY, OR FILED, ISSUED OR
COMMENCED AGAINST, PURCHASER WITHIN SIXTY (60) DAYS FOLLOWING THE CLOSING DATE
AND (B) THE LOSSES RESULTING FROM SUCH CLAIM EXCEED $100,000 AND ANY UNUSED
PORTION OF THE DEDUCTIBLE AMOUNT.

ARTICLE 17

MISCELLANEOUS

17.1                           Dispute Resolution.

(a)                                  Each Party shall have the right to submit
claims, disputes, controversies or other matters in question arising out of the
matters covered by Article 3 (including the existence of Title Defects or the
Title Defect Amounts attributable thereto, or Environmental Defects, or the
Environmental Defect Value attributable thereto, as applicable) (“Disputes”), to an independent expert appointed in
accordance with this Section 17.1(a) (the “Independent Expert”), who shall serve as sole arbitrator. The
Independent Expert shall be appointed by mutual agreement of Noble and
Purchaser from among candidates with experience and expertise in the area that
is the subject of such Dispute, and failing such agreement, such Independent
Expert for such Dispute shall be selected in accordance with the Rules.  Disputes to be resolved by an Independent
Expert (other than those relating to the existence of Title Defects or the
Title Defect Amounts attributable thereto, or Environmental Defects, or the
Environmental Defect Value attributable thereto, as applicable, which shall be
resolved in accordance with the procedures set forth in Section 17.1(c)) shall
be resolved in accordance with mutually agreed procedures and rules and failing
such agreement, in accordance with the rules and procedures for arbitration
provided in Section 17.1(b). The Independent Expert shall be instructed by the
Parties to resolve such Dispute as soon as reasonably practicable in light of
the circumstances.  The decision and award
of the Independent Expert shall be binding upon the Parties as an award under
the Federal Arbitration Act and final and nonappealable to the maximum extent
permitted by Applicable Law, and judgment thereon may be entered in a court of
competent jurisdiction and enforced by any Party as a final judgment of such
court.

(b)                                 Any
Dispute that is not resolved pursuant to other mutually agreed procedures and
rules pursuant to Section 17.1(a) (other than those relating to the existence
of Title Defects or the Title Defect Amounts attributable thereto, or
Environmental Defects, or the Environmental Defect Value attributable thereto,
as applicable, which shall be resolved in accordance with the procedures set
forth in Section 17.1(c)) shall be settled exclusively and finally by
arbitration in accordance with the procedures set forth in this Section
17.1(b).

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(i)                                     Such arbitration shall be conducted pursuant
to the Federal Arbitration Act, except as expressly provided otherwise in this
Agreement.  The validity, construction,
and interpretation of this Section 17.1(b), and all procedural aspects of the
arbitration conducted pursuant hereto, including the determination of the
issues that are subject to arbitration (i.e., arbitrability), the scope of the
arbitrable issues, allegations of “fraud in the inducement” to enter into this Agreement or this
arbitration provision, allegations of waiver, laches, delay or other defenses
to arbitrability, and the rules governing the conduct of the arbitration
(including the time for filing an answer, the time for the filing of
counterclaims, the times for amending the pleadings, the specificity of the
pleadings, the extent and scope of discovery, the issuance of subpoenas, the
times for the designation of experts, whether the arbitration is to be stayed
pending resolution of related litigation involving third parties not bound by
this Agreement, the receipt of evidence, and the like), shall be decided by the
Independent Expert.  The arbitration
administered by the Independent Expert shall be conducted pursuant to the
Commercial Arbitration Rules of the American Arbitration Association (the “Rules”), except as expressly provided otherwise in
this Agreement.  The arbitration
proceedings shall be subject to any optional rules contained in the Rules for
emergency measures and, in the case of Disputes with respect to amounts in
excess of $1,000,000, optional rules for large and complex cases.

(ii)                                  The Independent Expert shall permit and
facilitate such discovery as he/she determines is appropriate in the
circumstances, taking into account the needs of the parties and the
desirability of making discovery expeditious and cost-effective.  Such discovery may include pre-hearing
depositions, particularly depositions of witnesses who will not appear
personally to testify, if there is a demonstrated need therefor.  The Independent Expert may issue orders to
protect the confidentiality of proprietary information, trade secrets and other
sensitive information disclosed in discovery.

(iii)                               All arbitration proceedings hereunder shall
be conducted in Houston, Texas or such other mutually agreeable location.

(iv)                              In deciding the substance of the Dispute, the
Independent Expert shall refer to the substantive laws of the State of Texas
for guidance (excluding choice-of-law principles that might call for the
application of the laws of another jurisdiction).  Matters relating to arbitration shall be
governed by the Federal Arbitration Act.

(v)                                 The Parties shall request the Independent
Expert to conduct a hearing as soon as reasonably practicable after appointment
and to render a final decision completely disposing of the Dispute that is the
subject of such proceedings as soon as reasonably practicable after the final
hearing. The Parties shall instruct the Independent Expert to impose time
limitations he/she considers reasonable for each phase of such proceeding,
including, without limitation, limits on the time allotted to each Party for
the presentation of its case and rebuttal. The Independent Expert shall
actively manage the proceedings as he/she deems best so as to make the
proceedings fair, expeditious, economical and less burdensome than
litigation.  To provide for speed and
efficiency, the Independent Expert may: (A) limit the time allotted to each
Party for presentation of its case; and (B) exclude testimony and other
evidence they deem irrelevant or cumulative.

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(vi)                              Notwithstanding any other provision in this
Agreement to the contrary, the Parties expressly agree that the Independent
Expert shall have absolutely no authority to award consequential, incidental,
special, treble, exemplary or punitive damages of any type under any
circumstances regardless of whether such damages may be available under Texas
law, or any other laws, or under the Federal Arbitration Act or the Rules.

(vii)                           The Parties shall request that final decision
of the Independent Expert be in writing, be as brief as possible, set forth the
reasons for such final decision, and if the Independent Expert awards monetary
damages to either Party, contain a certification by the Independent Expert that
they have not included any consequential, incidental, special, treble,
exemplary or punitive damages.  To the
fullest extent permitted by Applicable Law, the arbitration proceeding and the
Independent Expert’s decision and award shall be maintained in confidence by
the Parties and the Parties shall instruct the Independent Expert to likewise
maintain such matters in confidence.

(c)                                  In the event of any dispute relating to the
existence of Title Defects or the Title Defect Amounts attributable thereto, or
Environmental Defects, or the Environmental Defect Value attributable thereto,
the Parties shall promptly negotiate in good faith in attempt to resolve such
Dispute.  In the event the Parties are
unable to resolve such Dispute the parties shall promptly select an Independent
Expert and each Party shall present a written statement of its position with
respect to such Dispute and any supporting documentation to the Independent
Expert within ten (10) days after the Independent Expert is selected.  The Independent Expert shall conduct such
investigation as he deems reasonably necessary or appropriate and make a
determination with respect to such Dispute within twenty (20) days of receipt
of such position statements.

(d)                                 The fees and expenses of the Independent
Expert shall be borne equally by Noble and Purchaser, but the decision of the
Independent Expert may include such award of the Independent Expert’s fees and
expenses and of other costs and attorneys’ fees as the Independent Expert
determines appropriate (provided that such award of costs and fees may not
exceed the amount of such costs and fees incurred by the losing Party in the
arbitration).

(e)                                  The decision and award of the Independent
Expert shall be binding upon the Parties and final and nonappealable to the
maximum extent permitted by Applicable Law, and judgment thereon may be entered
in a court of competent jurisdiction and enforced by any Party as a final
judgment of such court.

17.2                           Governing Law.  This
Agreement and all instruments executed in accordance with it shall be governed
by and interpreted in accordance with the laws of the State of Texas, excluding
any conflicts of law rule or principle that might refer construction of such
provisions to the laws of another jurisdiction.

17.3                           Entire Agreement.  This
Agreement, including all exhibits attached hereto and made a part hereof,
together with the Confidentiality Agreement, the Defects Escrow Agreement and
the Deposit Escrow Agreement, constitute the entire agreement between the Parties
with respect to the subject matter hereof and thereof and supersede all prior
agreements, 

 43
 

 

 

understandings, negotiations and discussions,
whether oral or written, of the Parties with respect to same.  No supplement, amendment, alteration,
modification, waiver or termination of this Agreement shall be binding unless
executed in writing by the Parties.

17.4                           Waiver.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.

17.5                           Captions.  The captions in this Agreement
are for convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement.

17.6                           Assignment.

(a)                                  Noble hereby consents to an assignment or
other transfer by Purchaser of its rights under this Agreement or any of the
Assets, it being understood, however, that any such transfer by Purchaser shall
not relieve Purchaser of any accrued and/or future liabilities or obligations
hereunder or arising out of or incident to this Agreement and the transactions
contemplated hereby unless Noble has discharged Purchaser expressly and in
writing, and Purchaser shall be and shall remain jointly and severally (or
solidarily if Louisiana law is determined to apply) liable with its transferee
for the full and faithful performance of all accrued and/or future obligations
and satisfaction of all accrued and/or future liabilities under this Agreement
and/or arising out of or incident to the transactions contemplated hereby.

(b)                                 Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors and permitted assigns.

17.7                           Notices.  Any notice provided or
permitted to be given under this Agreement shall be in writing, and may be
served by personal delivery, facsimile or by depositing same in the mail,
addressed to the Party to be notified, postage prepaid, and registered or
certified with a return receipt requested. Notice deposited in the mail in the
manner hereinabove described shall be deemed to have been given and received on
the date of the delivery as shown on the return receipt.  Notice served in any other manner shall be
deemed to have been given and received only if and when actually received by
the addressee (except that notice given by facsimile shall be deemed given and
received upon receipt only if received during normal business hours and if
received other than during normal business hours shall be deemed received as of
the opening of business on the next Business Day). For purposes of notice, the
addresses of the parties shall be as follows:

For Noble:

Noble Energy, Inc.

100 Glenborough, Suite 100

Houston, Texas 77067

Attn: Shawn E. Conner

Telecopy No.:  281/872-3358

Telephone No.: 281/872-3138

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With a copy to:

Noble Energy, Inc.

100 Glenborough, Suite 100

Houston, Texas 77067

Attn: Aaron G. Carlson

Telecopy No.:  281/872-3115

Telephone No.:
281/872-3354

For Purchaser:

Coldren Resources LP

228 St. Charles Ave., Suite 724

New Orleans, LA 70130

Attn: Clint Coldren

Telecopy No.: 504-569-3331

Telephone
No.:504-569-3300

With a copy to:

First Reserve Corporation

600 Travis, Suite 6000

Houston, Texas 77002

Attn: Hardy Murchison and Craig Jarchow

Telecopy No.: (713) 224-0771

Telephone No.:(713)
227-7890

First Reserve Corporation

One Lafayette Place

Greenwich, CT 06830

Attn: Thomas R. Denison

Telecopy No.: (203) 625-8520

Telephone No.:(203) 625-2520

and

SPN Resources, L.L.C.

2202 Oil Center Court, Suite 200

Houston, TX 77073-3333

Attn:  Greg
Miller

Telecopy No.: 281-784-7949

Telephone No.:
281-784-7948

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Each Party shall
have the right, upon giving ten (10) days’ prior notice to the other in the
manner hereinabove provided, to change its address for purposes of notice.

17.8                           Expenses.  Except as otherwise provided
herein, each Party shall be solely responsible for all expenses incurred by it
in connection with the transactions contemplated hereunder (including, without
limitation, fees and expenses of its own counsel and consultants).  Purchaser shall pay for all documentary,
filing and recording fees required in connection with the filing and recording
of the Assignments and Bills of Sale, Assignments of Record Title and
Assignments of Operating Rights delivered by Noble to Purchaser at
Closing.  Within forty-five (45) days
following Closing, Purchaser shall furnish Noble with a statement setting forth
the recording information for each county or parish wherein such Assignments
and Bills of Sale were recorded.

17.9                           Severability.  If
any term, phrase or other provision of this Agreement is invalid, illegal or
incapable of being enforced under any rule of law or public policy, all other
terms, phrases and provisions of this Agreement shall nevertheless remain in
full force and effect and this Agreement shall be interpreted so as to give
effect to the original intent of the Parties as closely as possible so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in a materially adverse manner with respect to either Party.

17.10                     Publicity.  Noble and Purchaser shall
consult with each other with regard to all publicity and other releases
concerning this Agreement and the transactions contemplated hereby and, except
as required by, or pursuant to, Applicable Law or the applicable rules or
regulations of any Governmental Entity or stock exchange on which shares of
such Party or any of its Affiliates are listed, neither Party shall issue any
publicity or other release without the prior written consent of the other
Party.

17.11                     Use of Noble’s Name.  As
soon as practicable after the Closing, Purchaser shall remove or cause to be
removed the names and marks used by Noble and all variations and derivatives
thereof and logos relating thereto from the Assets and shall not thereafter
make any use whatsoever of those names, marks and logos.  In the event Purchaser has not completed such
removal within sixty (60) days after Closing, Noble shall have the right but
not the obligation to complete such removal or cause such removal to be
completed at Purchaser’s cost and expense.

17.12                     Consequential Damages.  The
Parties waive any rights to incidental or consequential damages resulting from
a breach of this Agreement, including, without limitation, loss of profits.

17.13                     No Third-Party Beneficiary. 
Except as expressly provided herein, this Agreement is not intended to
create, nor shall it be construed to create, any rights in any third party
under doctrines concerning third-party beneficiaries.

17.14                     Survival; Limitation of Liability.

(a)                                  Except as otherwise set forth in this
Agreement, the representations and warranties contained in this Agreement
(other than those in Section 4.6 and Section 4.10), and 

 46
 

 

 

the covenants and obligations of the Parties
under this Agreement to be performed prior to the Closing, shall survive the
Closing for a period of three hundred sixty-five (365) days.  Except as otherwise set forth in this
Agreement, (i) the representations and warranties contained in Section 4.10
shall survive the Closing for a period of sixty (60) days, (ii) the
representations and warranties contained in Section 4.6 and the other covenants
and obligations of the Parties under this Agreement shall survive the Closing
without any time limitation, and any claim with respect to the breach thereof
may be made at any time and (iii) the representation and warranty contained in
Section 4.7(d) shall terminate as of Closing. 
Representations, warranties, covenants and obligations hereunder shall
be of no further force or effect after the date of their expiration; provided,
however, that there shall be no termination of any bona fide claim asserted pursuant to this Agreement
with respect to such a representation, warranty, covenant or obligation prior
to its expiration date.  The indemnity
obligations set forth in Sections 11.4(b)(ii) and 11.4(c)(i) shall terminate as
of the date of each respective representation, warranty, covenant or obligation
that is subject to indemnification, except in each case as to matters for which
a specific written claim for indemnity has been delivered to the Indemnifying
Party on or before such termination date.

(b)                                 In no event shall Noble’s aggregate liability
under this Agreement, including liability for (i) title defects pursuant to its
limited “by, through or under” warranty, (ii) general indemnities under Article 11 and (iii)
environmental indemnities pursuant to Section 16.2 exceed, in the aggregate,
twenty-five percent (25%) of the Purchase Price; provided that (x) the
covenants of the parties under Sections 2.3, 2.5, 11.1 and 11.3 shall not be
limited by this Section 17.14(b), and (y) Noble’s indemnities under Sections
11.4(c)(ii) and (iv) shall not be limited by this Section 17.14(b).

17.15                     Counterparts and Exhibits.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.  All exhibits attached hereto
are hereby made a part of this Agreement and incorporated herein by this
reference.

17.16                     Operatorship Matters.

(a)                                  Notwithstanding anything herein to the
contrary, Noble does not represent to Purchaser that Purchaser will succeed to
Noble’s operatorship of any unit or well constituting a part of the
Assets.  Purchaser acknowledges and
agrees that Purchaser will be required to comply with the terms of any
applicable operating agreement, unit operating agreement or other contract
relating to any elections or other selection procedures in order to succeed
Noble as operator thereunder.

(b)                                 Concerning Noble-operated Assets, Purchaser
shall provide Noble with evidence of the acceptance by the applicable
government authority of any such change of operatorship prior to the time Noble
transfers operations to Purchaser.  Where
practicable, transfer of operations under this paragraph shall be performed on
the first day of the month immediately following the date of receipt of
approval of the applicable government authority for successor operations by
Purchaser, subject to the terms and provisions of the Transition Agreement
referenced in Section 11.6 where applicable.

 47
 

 

 

17.17                     Conflict With Assignment. 
Noble and Purchaser acknowledge and agree that in the event of any
conflict or inconsistency between the terms and provisions of this Agreement
and the terms and provisions of the assignments executed and delivered at
Closing by Noble and Purchaser, the terms and provisions of this Agreement
shall control.

17.18                     DTPA Waiver.  TO THE EXTENT APPLICABLE TO
THE ASSETS OR ANY PORTION THEREOF, PURCHASER HEREBY WAIVES THE PROVISIONS OF
THE TEXAS DECEPTIVE TRADE PRACTICES ACT, CHAPTER 17, SUBCHAPTER E, SECTIONS
17.41 THROUGH 17.63, INCLUSIVE (OTHER THAN SECTION 17.555, WHICH IS NOT
WAIVED), TEX. BUS. & COM. CODE. IN ORDER TO EVIDENCE ITS ABILITY TO GRANT
SUCH WAIVER, PURCHASER HEREBY REPRESENTS AND WARRANTS TO NOBLE THAT PURCHASER
(A) IS IN THE BUSINESS OF SEEKING OR ACQUIRING, BY PURCHASE OR LEASE, GOODS OR
SERVICES FOR COMMERCIAL OR BUSINESS USE, (B) HAS ASSETS OF $5,000,000 OR MORE
ACCORDING TO ITS MOST RECENT FINANCIAL STATEMENT PREPARED IN ACCORDANCE WITH
GAAP, (C) HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT
ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE TRANSACTION CONTEMPLATED
HEREBY, AND (D) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION.

17.19                     Redhibition Waiver. 
PURCHASER: (A) WAIVES ALL RIGHTS IN REDHIBITION PURSUANT TO LOUISIANA
CIVIL CODE ARTICLE 2475 AND ARTICLES 2520 THROUGH 2548; (B) ACKNOWLEDGES THAT
THIS EXPRESS WAIVER SHALL BE CONSIDERED A MATERIAL AND INTEGRAL PART OF THIS
SALE AND THE CONSIDERATION THEREOF; AND (C) ACKNOWLEDGES THAT THIS WAIVER HAS
BEEN BROUGHT TO THE ATTENTION OF PURCHASER, HAS BEEN EXPLAINED IN DETAIL AND
THAT PURCHASER HAS VOLUNTARILY AND KNOWINGLY CONSENTED TO THIS WAIVER OF
WARRANTY OF FITNESS AND WARRANTY AGAINST REDHIBITORY VICES AND DEFECTS FOR THE
ASSETS.

17.20                     UTPCPL Waiver.  TO
THE EXTENT APPLICABLE TO THE PROPERTIES OR ANY PORTION THEREOF, PURCHASER
HEREBY WAIVES THE PROVISIONS OF THE LOUISIANA UNFAIR TRADE PRACTICES AND
CONSUMER PROTECTION LAW (LA. R.S. 51:1402, ET SEQ.). PURCHASER WARRANTS AND
REPRESENTS THAT IT: (A) IS EXPERIENCED AND KNOWLEDGEABLE WITH RESPECT TO THE
OIL AND GAS INDUSTRY GENERALLY AND WITH TRANSACTIONS OF THIS TYPE SPECIFICALLY;
(B) POSSESSES AMPLE KNOWLEDGE, EXPERIENCE AND EXPERTISE TO EVALUATE
INDEPENDENTLY THE MERITS AND RISKS OF THE TRANSACTIONS HEREIN CONTEMPLATED; AND
(C) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION.

17.21                     Recordation.  The Assignment and Bill of
Sale form attached as Schedule
10.2(a)(1) for Leasehold
Interests located in or adjacent to the State of Texas and, Schedule 10.2(a)(2) for Leasehold Interests located in or
adjacent to the State of Louisiana, Schedule
10.2(a)(3) for Leasehold
Interests located in or adjacent to the State of Mississippi and Schedule 10.2(a)(4) for Leasehold Interests located in or
adjacent to the State of Alabama are intended to 

 48
 

 

 

convey all of the Assets being conveyed
pursuant to this Agreement. Certain Assets or specific portions of the Assets
that are leased from, or require the approval to transfer by, a Governmental
Entity are conveyed under the Assignment and Bill of Sale and also are
described and covered by Assignments of Record Title Interest and Assignments
of Operating Rights, and other separate assignments made by Noble to Purchaser
on officially approved forms, or forms acceptable to such entity, in sufficient
multiple originals to satisfy applicable statutory and regulatory
requirements.  The interests conveyed by
such separate assignments are the same, and not in addition to, the interests
conveyed in any of such Assignments and Bill of Sale.  Further, such assignments shall be deemed to
contain the special limited title warranty of Noble and all of the exceptions,
reservations, rights, titles, power and privileges set forth herein as fully
and only to the extent as though they were set forth in each such separate
assignment.  Should the law of a state other
than Texas or Louisiana be deemed applicable under the OCSLA, then any
provisions of Applicable Law of such state parallel to those referenced in
Sections 17.18, 17.19 and 17.20 above shall also be deemed waived to the
maximum extent allowed by Applicable Law.

17.22                     MMS Approval. 
Purchaser promptly after the Closing Date shall actively pursue MMS
unconditional approval of the assignments of the Assets situated on the Outer
Continental Shelf, and ownership thereof, from Noble to Purchaser.  Purchaser obligates itself to take any and
all reasonable action required by the MMS in order to obtain such approval and
shall provide Noble with evidence that the MMS has determined that Purchaser
(a) is exempt from any supplemental bonding requirements or (b) has satisfied
any supplemental bonding requirements in accordance with Section 8.5(b), in
either case involving the Assets.  Until
such time as Purchaser has provided Noble with such evidence satisfactory to
Noble of compliance with this Section 17.22, Noble shall have the right to
refuse to transfer operations of the Assets and Noble will continue to operate
the Assets pursuant to the terms of the Transition Agreement.

17.23                     Additional Documents and Actions.  The
Parties agree to execute such additional documents or take such additional
actions as may be required to give effect to the intent of the Parties.

17.24                     Cooperation in Connection with Regulatory
Filings.  For a period of three years following the
Closing, Noble shall, and shall cause its Affiliates and their respective
officers, employees, advisors and auditors to, provide reasonable cooperation
to Purchaser, and its Affiliates and their respective accounting firms and
representatives (collectively, the “Purchaser Party”)
in connection with the preparation of financial statements and other documents
to meet the disclosure and filing requirements under the Securities Act of 1933
as amended, or the Securities Exchange Act of 1934, as amended, associated with
the registration of any securities or debt of Purchaser or any of its
Affiliates (collectively, the “Filings”).  Further, for a period of three years
following the Closing, Noble agrees to retain and make available, subject to
Noble’s presently existing records retention policy, to Purchaser Party any and
all books, records, information and documents that are attributable to the
Assets in Noble’s possession reasonably required by a Purchaser Party in order
to prepare any Filings and documents associated therewith.  Purchaser will reimburse Noble, within five
(5) Business Days after demand in writing therefor, for any reasonable
out-of-pocket costs incurred by Noble and its Affiliates and their respective
representatives in complying with the provisions of this Section 17.24.

 49
 

 

 

ARTICLE 18

DEFINITIONS AND REFERENCES

18.1                           Certain Defined Terms.  When
used in this Agreement, the following terms shall have the respective meanings
assigned to them in this Section 18.1 or in the section, subsections or other
subdivisions referred to below:

“Affiliate” means,
with respect to any specified Person, any Person that directly or indirectly
controls, is controlled by or is under common control with such specified
Person. For the purpose of the immediately preceding sentence, the term “control”
means the power to direct or cause the direction of the management of such
Person, whether through the ownership of voting securities or by contract or
agency or otherwise.

“Agreed Rate” means,
at the time of any determination thereof is to be made, the fluctuating per
annum rate of interest then most recently reported in the Wall Street Journal as the “Prime Rate”
(the base rate on corporate loans at large U.S. money center commerce banks).

“Applicable Law” means
any statute, law, principle of common law, rule, regulation, judgment, order,
ordinance, requirement, code, writ, injunction, or decree of any Governmental
Entity.

“Casualty” means any
casualty event, including any fire, explosion, lightening, flood, hurricane or
other casualty.

“Confidentiality Agreement”
means that certain agreement dated February 21, 2006, by and between Noble and
First Reserve Corporation.

“Customary Post-Closing Consents”
means consents required to be obtained in connection with assignment of any
Asset in connection with the transactions contemplated hereby of a nature that
would customarily be obtained after the Closing in transactions similar to the
transactions contemplated hereby (including any consent or approval of or
filing with any Governmental Entity in connection with the assignment of any
Asset), but excluding the consents listed on Schedule
4.11.

“Damages” means all
claims, actions, causes of action, demands, assessments, losses, damages,
liabilities, judgments, settlements, penalties, costs, and expenses (including
reasonable attorney’s fees and expenses) of any nature whatsoever.

“Environmental Laws”
means any and all federal, state and local laws, statutes, regulations, rules,
orders, ordinances, permits or determinations of any governmental authority
pertaining to health, the environment, wildlife or natural resources in effect
in any and all jurisdictions in which the Assets are located, including,
without limitation, the Clean Air Act, as amended, and the Federal Water
Pollution Control Act, as amended, the Rivers and Harbors Act of 1899, as
amended, the Safe Drinking Water Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act (“CERCLA”), as amended,
the Superfund Amendments and Reauthorization Act of 1986, as amended, the
Resource Conservation and Recovery Act (“RCRA”), as amended, The Hazardous and Solid
Waste 

 50
 

 

 

Amendments Act of 1984, as
amended, the Toxic Substances Control Act, as amended, the Occupational Safety
and Health Act, as amended, and the Hazardous Materials Transportation Act, as
amended. The terms “hazardous substance,”
“release” and “threatened
release” shall have the meanings specified in CERCLA, and the
terms “solid waste,” “hazardous waste,” and “disposal” (or “disposed”)
shall have the meanings specified in RCRA; provided, however, that (a) to the
extent the laws of the state in which the Assets are located, or adjacent, are
applicable and have established a meaning for “hazardous
substance,” “release,” “threatened release,” “solid waste,” “hazardous
waste,” and “disposal”
that is broader than that specified in CERCLA or RCRA, such broader meaning
shall apply with respect to the matters covered by such laws, and (b) the term “solid waste” shall include all oil
and gas exploration, development, and production wastes, even if such wastes are
specifically exempt from classification as hazardous substances or hazardous
wastes pursuant to CERCLA or RCRA, or the state analogues to those statutes.

“Environmental Liabilities”
means any and all Damages (including any remedial, removal, response, abatement,
clean-up, investigation and/or monitoring costs and associated legal costs)
incurred or imposed (a) pursuant to any agreement, order, notice of
responsibility, directive (including directives embodied in Environmental
Laws), injunctions, judgment or similar documents (including settlements)
arising out of, in connection with, or under Environmental Laws, or (b)
pursuant to any claim by a Governmental Entity or any other Person for personal
injury, property damage, damage to natural resources, remediation, or payment
or reimbursement of response costs incurred or expended by such Governmental
Entity or other Person pursuant to common law or statute and related to the use
or release of hazardous substances.

“GAAP” means generally
accepted accounting principles in the United States of America from time to
time, applied on a consistent basis throughout the periods involved.

“Governmental Entity”
means any court or tribunal in any jurisdiction (domestic or foreign) or any
federal, state, county, municipal, or other governmental or quasi-governmental
body, agency, authority, department, commission, board, bureau, or
instrumentality (domestic or foreign).

“HSR Act” means the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Hydrocarbons” means
oil and gas and other hydrocarbons produced or processed in association
therewith.

“Imbalance” means all
gas imbalances and make-up obligations related to the Assets regardless of
whether such imbalances or make-up obligations arise at the wellhead, pipeline,
gathering system or other level, and regardless of whether the same arise under
contract or otherwise.

“Knowledge” of a
specified Person (or similar references to a Person’s knowledge) means all
information actually or constructively known to (a) in the case of a Person who
is an 

 51
 

 

 

individual, such Person, (b) in
the case of a Person which is corporation or other entity, an executive officer
or employee who devoted substantive attention to matters of such nature during
the ordinary course of his employment by such Person, or (c) in the case of
Noble, of the following: Bob Bemis, Director of Environmental, Health and
Safety; Mike Brown, Business Development Advisor, North America; Aaron Carlson,
Senior Attorney; Shawn Conner, Director of Business Development; Roger Souders,
Senior Landman; Joe Zimmerman, Shelf Operations Manager; Ted Price, Vice
President, Exploration/Exploitation; Pam Tuilos, Regulatory/Environmental
Coordinator, GOM/South; Shelly Goddard, Lease Records Supervisor; Janice
Spruill, Division Order Supervisor; Rodney Cook, Vice President, Southern
Region; Bill Sharp, Asset Manager, Gulf Coast Shelf; Stan Doiron, Offshore
Production Supervisor; and Jack Harmoth, Tax Director.  A
Person has “constructive knowledge” of
those matters which the individual involved could reasonably be expected to
have as a result of undertaking an investigation of such a scope and extent as
a reasonably prudent man would undertake concerning the particular subject
matter.

“Lien” means any
claim, lien, mortgage, security interest, pledge, charge, option, right-of-way,
easement, encroachment, or encumbrance of any kind.

“Material Adverse Effect”
means a material adverse effect on the value of the Assets (taken as a whole
and after taking into account any insurance, indemnity and other recoveries
payable in respect thereof), excluding any effect resulting from or arising in
connection with (a) this Agreement or the transactions contemplated hereby or
the public announcement thereof; (b) the effect of any change in the United
States or foreign economies or securities or financial markets in general; (c)
the effect of any change that affect generally the oil and gas industry, such
as fluctuations in the price of oil and gas; (d) the effect of any change
arising in connection with any natural disasters, hostilities, acts of war,
sabotage or terrorism or military actions or any escalation or material
worsening of any such hostilities, acts of war, sabotage or terrorism or
military actions existing or underway as of the date hereof; (e) the effect of
any action taken by Purchaser or its Affiliates (other than providing consent
or approval pursuant to Section 6.1) with respect to the transactions
contemplated hereby or with respect to the Assets, (f) any matter expressly set
forth in an exhibit or schedule hereto; or (g) any change in Applicable Law or
accounting rules.

“Net Revenue Interest”
or “NRI”
means an interest (expressed as a percentage or decimal fraction) in and to the
Hydrocarbons produced and saved from or attributable to an Asset.

“Person” shall mean
any individual, firm, corporation, partnership, limited liability company,
joint venture, association, trust, unincorporated organization, Governmental
Entity or any other entity.

“Working Interest” or “WI” means the
percentage of costs and expenses attributable to the maintenance, development
and operation of an Asset.

18.2                           Certain Additional Defined Terms.  In
addition to such terms as are defined in the preamble of and the recitals to
this Agreement and in Section 18.1, the following terms are used in this
Agreement as defined in the Articles or Sections set forth opposite such terms:

 52
 

 

 

	
  Term

  	
   

  	
  Defined

  
	
   

  	
   

  	
   

  
	
  Adjusted
  Purchase Price

  	
   

  	
  Section 2.2

  
	
  Adjustment
  Amount

  	
   

  	
  Section 3.5

  
	
  AFE

  	
   

  	
  Section 4.13

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Allocated Value

  	
   

  	
  Section 3.1(c)(i)

  
	
  Assets

  	
   

  	
  Section 1.1

  
	
  Assumed
  Obligations

  	
   

  	
  Section 11.4(a)

  
	
  Business Days

  	
   

  	
  Section 2.3(a)

  
	
  Business
  Employees

  	
   

  	
  Section 11.12(a)

  
	
  Claim Notice

  	
   

  	
  Section 11.4(e)(i)

  
	
  Closing

  	
   

  	
  Section 10.1

  
	
  Closing Date

  	
   

  	
  Section 10.1

  
	
  Code

  	
   

  	
  Section 4.5

  
	
  Continuing
  Employee

  	
   

  	
  Section 11.12(c)

  
	
  Cure Period

  	
   

  	
  Section 3.6(b)

  
	
  Deductible
  Amount

  	
   

  	
  Section 3.4

  
	
  Defects Escrow

  	
   

  	
  Section 3.6(a)

  
	
  Defects Escrow
  Agent

  	
   

  	
  Section 3.6(a)

  
	
  Defects Escrow
  Agreement

  	
   

  	
  Section 3.6(a)

  
	
  Defects Escrow
  Amount

  	
   

  	
  Section 3.6(a)

  
	
  Defensible Title

  	
   

  	
  Section 3.1(d)(i)

  
	
  Deferred
  Adjustment Claim

  	
   

  	
  Section 3.5

  
	
  Deferred Matters
  Date

  	
   

  	
  Section 3.5

  
	
  Deposit

  	
   

  	
  Section 2.1(c)

  
	
  Deposit Escrow
  Agreement

  	
   

  	
  Section 2.1(e)

  
	
  Disputes

  	
   

  	
  Section 17.1(a)

  
	
  Documents

  	
   

  	
  Section 14.1

  
	
  Effective Time

  	
   

  	
  Section 1.1

  
	
  Entech

  	
   

  	
  Section 1.2

  
	
  Environmental
  Claims

  	
   

  	
  Section 16.2

  
	
  Environmental
  Defect

  	
   

  	
  Section 3.2(e)(i)

  
	
  Environmental
  Defect Notice

  	
   

  	
  Section 3.2(c)

  
	
  Environmental
  Defect Value

  	
   

  	
  Section 3.2(e)(ii)

  
	
  Environmental
  Information

  	
   

  	
  Section 3.2(b)

  
	
  Escrow Agent

  	
   

  	
  Section 2.1(c)

  
	
  Examination
  Period

  	
   

  	
  Section 3.1(a)

  
	
  Estimated
  Adjusted Purchase Price

  	
   

  	
  Section 2.3(a)

  
	
  Excluded Assets

  	
   

  	
  Section 1.1

  
	
  Filings

  	
   

  	
  Section 17.24

  
	
  Indemnified
  Party

  	
   

  	
  Section 11.4(e)(i)

  
	
  Indemnifying
  Party

  	
   

  	
  Section 11.4(e)(i)

  
	
  Independent
  Expert

  	
   

  	
  Section 17.1(a)

  
	
  Interim Period

  	
   

  	
  Section 6.1

  

 

 53
 

 

 

	
  Leasehold
  Interests

  	
   

  	
  Section 1.1(a)

  
	
  Leases

  	
   

  	
  Section 4.17

  
	
  Losses

  	
   

  	
  Section 7.4

  
	
  Material
  Contracts

  	
   

  	
  Section 4.7

  
	
  MMS

  	
   

  	
  Section 5.7

  
	
  Noble

  	
   

  	
  Heading

  
	
  Noble
  Indemnified Parties

  	
   

  	
  Section 7.4

  
	
  Noble Internal
  ORRIs

  	
   

  	
  Section 11.4(f)

  
	
  Orders and
  Contracts

  	
   

  	
  Section 1.1(b)(iii)

  
	
  Overheld Amount

  	
   

  	
  Section 3.5

  
	
  Party and
  Parties

  	
   

  	
  Preamble

  
	
  Permitted
  Encumbrances

  	
   

  	
  Section 3.1(d)(ii)

  
	
  Platforms

  	
   

  	
  Section 1.1(b)(i)

  
	
  Post-Closing
  Defect

  	
   

  	
  Section 3.6(a)

  
	
  Pref Right
  Notice

  	
   

  	
  Section 3.9(a)

  
	
  Property Taxes

  	
   

  	
  Section 13.1

  
	
  Purchase Price

  	
   

  	
  Section 2.1(a)

  
	
  Purchaser

  	
   

  	
  Heading

  
	
  Purchaser
  Indemnified Parties

  	
   

  	
  Section 11.4(c)

  
	
  Purchaser Party

  	
   

  	
  Section 17.24

  
	
  Purchaser’s
  Environmental Consultant

  	
   

  	
  Section 3.2(a)

  
	
  Purchaser’s
  Environmental Review

  	
   

  	
  Section 3.2(a)

  
	
  Purchaser’s
  Estimate

  	
   

  	
  Section 3.5

  
	
  Purchaser’s
  Title Review

  	
   

  	
  Section 3.1(a)

  
	
  Records

  	
   

  	
  Section 1.1(c)

  
	
  Resolved Amount

  	
   

  	
  Section 3.5

  
	
  Rules

  	
   

  	
  Section 17.1(b)(i)

  
	
  Title Defect

  	
   

  	
  Section 3.1(d)(iii)

  
	
  Title Defect
  Amount

  	
   

  	
  Section 3.1(c)

  
	
  Title Defect
  Asset

  	
   

  	
  Section 3.1(b)

  
	
  Title Defect
  Notice

  	
   

  	
  Section 3.1(b)

  
	
  Third Party

  	
   

  	
  Section 11.4(a)(i)

  
	
  Third Party
  Claim

  	
   

  	
  Section 11.4(e)(i)

  
	
  Wells

  	
   

  	
  Section 1.1(b)(i)

  

 

[signature
page to follow]

 54
 

 

 

EXECUTED on May 15, 2006, to be effective for all
purposes, however, as of the Effective Date.

	
   

  	
   

  	
  NOBLE ENERGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: David L.
  Stover

  
	
   

  	
   

  	
  Title: Senior
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COLDREN
  RESOURCES LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  Coldren Resources GP LLC,

  
	
   

  	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
										

 

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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}]]