Document:

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                                                                    Exhibit 10.5

(Multicurrency -- Cross Border)

                                    ISDA(R)
                  International Swap Dealers Association, Inc.

                                MASTER AGREEMENT

                          dated as of October 13, 2005

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

Accordingly, the parties agree as follows: ---

1.    Interpretation

(a)   Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.

(b)   Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.

(c)   Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.

2.    Obligations

(a)   General Conditions.

      (i) Each party will make each payment or delivery specified in each
      Confirmation to be made by it, subject to the other provisions of this
      Agreement.

      (ii) Payments under this Agreement will be made on the due date for value
      on that date in the place of the account specified in the relevant
      Confirmation or otherwise pursuant to this Agreement, in freely
      transferable funds and in the manner customary for payments in the
      required currency. Where settlement is by delivery (that is, other than by
      payment), such delivery will be made for receipt on the due date in the
      manner customary for the relevant obligation unless otherwise specified in
      the relevant Confirmation or elsewhere in this

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      Agreement.

      (iii) Each obligation of each party under Section 2(a)(i) is subject to
      (1) the condition precedent that no Event of Default or Potential Event of
      Default with respect to the other party has occurred and is continuing,
      (2) the condition precedent that no Early Termination Date in respect of
      the relevant Transaction has occurred or been effectively designated and
      (3) each other applicable condition precedent specified in this Agreement.

(b)   Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.

(c)   Netting. If on any date amounts would otherwise be payable: --

      (i)   in the same currency; and

      (ii)  in respect of the same Transaction,

by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.

(d)   Deduction or Withholding for Tax.

      (i) Gross-Up. All payments under this Agreement will be made without any
      deduction or withholding for or on account of any Tax unless such
      deduction or withholding is required by any applicable law, as modified by
      the practice of any relevant governmental revenue authority, then in
      effect. If a party is so required to deduct or withhold, then that party
      ("X") will: --

            (1) promptly notify the other party ("Y") of such requirement;

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            (2) pay to the relevant authorities the full amount required to be
            deducted or withheld (including the full amount required to be
            deducted or withheld from any additional amount paid by X to Y under
            this Section 2(d)) promptly upon the earlier of determining that
            such deduction or withholding is required or receiving notice that
            such amount has been assessed against Y;

            (3) promptly forward to Y an official receipt (or a certified copy),
            or other documentation reasonably acceptable to Y, evidencing such
            payment to such authorities; and

            (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
            the payment to which Y is otherwise entitled under this Agreement,
            such additional amount as is necessary to ensure that the net amount
            actually received by Y (free and clear of Indemnifiable Taxes,
            whether assessed against X or Y) will equal the full amount Y would
            have received had no such deduction or withholding been required.
            However, X will not be required to pay any additional amount to Y to
            the extent that it would not be required to be paid but for: --

                  (A) the failure by Y to comply with or perform any agreement
                  contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

                  (B) the failure of a representation made by Y pursuant to
                  Section 3(f) to be accurate and true unless such failure would
                  not have occurred but for (I) any action taken by a taxing
                  authority, or brought in a court of competent jurisdiction, on
                  or after the date on which a Transaction is entered into
                  (regardless of whether such action is taken or brought with
                  respect to a party to this Agreement) or (II) a Change in Tax
                  Law.

      (ii) Liability. If: --

            (1) X is required by any applicable law, as modified by the practice
            of any relevant governmental revenue authority, to make any
            deduction or withholding in respect of which X would not be required
            to pay an additional amount to Y under Section 2(d)(i)(4);

            (2) X does not so deduct or withhold; and

            (3) a liability resulting from such Tax is assessed directly against
            X, then, except to the extent Y has satisfied or then satisfies the
            liability resulting from such Tax, Y will promptly pay to X the
            amount of such liability (including any related liability for
            interest, but including any related liability for penalties only if
            Y has failed to comply with or perform any agreement contained in
            Section 4(a)(i), 4(a)(iii) or 4(d)).

(e)   Default Interest; Other Amounts. Prior to the occurrence or effective
designation

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of an Early Termination Date in respect of the relevant Transaction, a party
that defaults in the performance of any payment obligation will, to the extent
permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.

3.    Representations

Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that: --

(a)   Basic Representations.

      (i) Status. It is duly organised and validly existing under the laws of
      the jurisdiction of its organisation or incorporation and, if relevant
      under such laws, in good standing;

      (ii) Powers. It has the power to execute this Agreement and any other
      documentation relating to this Agreement to which it is a party, to
      deliver this Agreement and any other documentation relating to this
      Agreement that it is required by this Agreement to deliver and to perform
      its obligations under this Agreement and any obligations it has under any
      Credit Support Document to which it is a party and has taken all necessary
      action to authorise such execution, delivery and performance;

      (iii) No Violation or Conflict. Such execution, delivery and performance
      do not violate or conflict with any law applicable to it, any provision of
      its constitutional documents, any order or judgment of any court or other
      agency of government applicable to it or any of its assets or any
      contractual restriction binding on or affecting it or any of its assets;

      (iv) Consents. All governmental and other consents that are required to
      have been obtained by it with respect to this Agreement or any Credit
      Support Document to which it is a party have been obtained and are in full
      force and effect and all conditions of any such consents have been
      complied with; and

      (v) Obligations Binding. Its obligations under this Agreement and any
      Credit Support Document to which it is a party constitute its legal, valid
      and binding obligations, enforceable in accordance with their respective
      terms (subject to applicable bankruptcy, reorganisation, insolvency,
      moratorium or similar laws affecting creditors' rights generally and
      subject, as to enforceability, to

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      equitable principles of general application (regardless of whether
      enforcement is sought in a proceeding in equity or at law)).

(b)   Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.

(c)   Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.

(d)   Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

(e)   Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.

(f)   Payee Tax Representations. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.

4.    Agreements

Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party: --

(a)   Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs: --

      (i) any forms, documents or certificates relating to taxation specified in
      the Schedule or any Confirmation;

      (ii) any other documents specified in the Schedule or any Confirmation;
      and

      (iii) upon reasonable demand by such other party, any form or document
      that may be required or reasonably requested in writing in order to allow
      such other party or its Credit Support Provider to make a payment under
      this Agreement or any applicable Credit Support Document without any
      deduction or withholding for or on account of any Tax or with such
      deduction or withholding at a reduced rate (so long as the completion,
      execution or submission of such form or document would not materially
      prejudice the legal or commercial

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      position of the party in receipt of such demand) with any such form or
      document to be accurate and completed in a manner reasonably satisfactory
      to such other party and to be executed and to be delivered with any
      reasonably required certification, in each case by the date specified in
      the Schedule or such Confirmation or, if none is specified, as soon as
      reasonably practicable.

(b)   Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.

(c)   Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.

(d)   Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.

(e)   Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.

5.    Events of Default and Termination Events

(a)   Events of Default. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party: --

      (i) Failure to Pay or Deliver. Failure by the party to make, when due, any
      payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
      required to be made by it if such failure is not remedied on or before the
      third Local Business Day after notice of such failure is given to the
      party;

      (ii) Breach of Agreement. Failure by the party to comply with or perform
      any agreement or obligation (other than an obligation to make any payment
      under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
      notice of a Termination Event or any agreement or obligation under Section
      4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
      in accordance with this Agreement if such failure is not remedied on or
      before the thirtieth day after notice of such failure is given to the
      party;

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      (iii) Credit Support Default.

            (1) Failure by the party or any Credit Support Provider of such
            party to comply with or perform any agreement or obligation to be
            complied with or performed by it in accordance with any Credit
            Support Document if such failure is continuing after any applicable
            grace period has elapsed;

            (2) the expiration or termination of such Credit Support Document or
            the failing or ceasing of such Credit Support Document to be in full
            force and effect for the purpose of this Agreement (in either case
            other than in accordance with its terms) prior to the satisfaction
            of all obligations of such party under each Transaction to which
            such Credit Support Document relates without the written consent of
            the other party; or

            (3) the party or such Credit Support Provider disaffirms, disclaims,
            repudiates or rejects, in whole or in part, or challenges the
            validity of, such Credit Support Document;

      (iv) Misrepresentation. A representation (other than a representation
      under Section 3(e) or (f)) made or repeated or deemed to have been made or
      repeated by the party or any Credit Support Provider of such party in this
      Agreement or any Credit Support Document proves to have been incorrect or
      misleading in any material respect when made or repeated or deemed to have
      been made or repeated;

      (v) Default under Specified Transaction. The party, any Credit Support
      Provider of such party or any applicable Specified Entity of such party
      (1) defaults under a Specified Transaction and, after giving effect to any
      applicable notice requirement or grace period, there occurs a liquidation
      of, an acceleration of obligations under, or an early termination of, that
      Specified Transaction, (2) defaults, after giving effect to any applicable
      notice requirement or grace period, in making any payment or delivery due
      on the last payment, delivery or exchange date of, or any payment on early
      termination of, a Specified Transaction (or such default continues for at
      least three Local Business Days if there is no applicable notice
      requirement or grace period) or (3) disaffirms, disclaims, repudiates or
      rejects, in whole or in part, a Specified Transaction (or such action is
      taken by any person or entity appointed or empowered to operate it or act
      on its behalf);

      (vi) Cross Default. If "Cross Default" is specified in the Schedule as
      applying to the party, the occurrence or existence of (1) a default, event
      of default or other similar condition or event (however described) in
      respect of such party, any Credit Support Provider of such party or any
      applicable Specified Entity of such party under one or more agreements or
      instruments relating to Specified Indebtedness of any of them
      (individually or collectively) in an aggregate amount of not less than the
      applicable Threshold Amount (as specified in the Schedule) which has
      resulted in such Specified Indebtedness becoming, or becoming capable at
      such time of being declared, due and payable under such agreements or
      instruments, before it would otherwise have been due and payable or (2) a
      default by such party, such Credit Support Provider or such

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      Specified Entity (individually or collectively) in making one or more
      payments on the due date thereof in an aggregate amount of not less than
      the applicable Threshold Amount under such agreements or instruments
      (after giving effect to any applicable notice requirement or grace
      period);

      (vii) Bankruptcy. The party, any Credit Support Provider of such party or
      any applicable Specified Entity of such party: --

            (1) is dissolved (other than pursuant to a consolidation,
            amalgamation or merger); (2) becomes insolvent or is unable to pay
            its debts or fails or admits in writing its inability generally to
            pay its debts as they become due; (3) makes a general assignment,
            arrangement or composition with or for the benefit of its creditors;
            (4) institutes or has instituted against it a proceeding seeking a
            judgment of insolvency or bankruptcy or any other relief under any
            bankruptcy or insolvency law or other similar law affecting
            creditors' rights, or a petition is presented for its winding-up or
            liquidation, and, in the case of any such proceeding or petition
            instituted or presented against it, such proceeding or petition (A)
            results in a judgment of insolvency or bankruptcy or the entry of an
            order for relief or the making of an order for its winding-up or
            liquidation or (B) is not dismissed, discharged, stayed or
            restrained in each case within 30 days of the institution or
            presentation thereof; (5) has a resolution passed for its
            winding-up, official management or liquidation (other than pursuant
            to a consolidation, amalgamation or merger); (6) seeks or becomes
            subject to the appointment of an administrator, provisional
            liquidator, conservator, receiver, trustee, custodian or other
            similar official for it or for all or substantially all its assets;
            (7) has a secured party take possession of all or substantially all
            its assets or has a distress, execution, attachment, sequestration
            or other legal process levied, enforced or sued on or against all or
            substantially all its assets and such secured party maintains
            possession, or any such process is not dismissed, discharged, stayed
            or restrained, in each case within 30 days thereafter; (8) causes or
            is subject to any event with respect to it which, under the
            applicable laws of any jurisdiction, has an analogous effect to any
            of the events specified in clauses (1) to (7) (inclusive); or (9)
            takes any action in furtherance of, or indicating its consent to,
            approval of, or acquiescence in, any of the foregoing acts; or

      (viii) Merger Without Assumption. The party or any Credit Support Provider
      of such party consolidates or amalgamates with, or merges with or into, or
      transfers all or substantially all its assets to, another entity and, at
      the time of such consolidation, amalgamation, merger or transfer: --

            (1) the resulting, surviving or transferee entity fails to assume
            all the obligations of such party or such Credit Support Provider
            under this Agreement or any Credit Support Document to which it or
            its predecessor was a party by operation of law or pursuant to an
            agreement reasonably satisfactory to the other party to this
            Agreement; or

            (2) the benefits of any Credit Support Document fail to extend
            (without the consent of the other party) to the performance by such
            resulting, surviving

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            or transferee entity of its obligations under this Agreement.

(b)   Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below: --

      (i) Illegality. Due to the adoption of, or any change in, any applicable
      law after the date on which a Transaction is entered into, or due to the
      promulgation of, or any change in, the interpretation by any court,
      tribunal or regulatory authority with competent jurisdiction of any
      applicable law after such date, it becomes unlawful (other than as a
      result of a breach by the party of Section 4(b)) for such party (which
      will be the Affected Party): --

            (1) to perform any absolute or contingent obligation to make a
            payment or delivery or to receive a payment or delivery in respect
            of such Transaction or to comply with any other material provision
            of this Agreement relating to such Transaction; or

            (2) to perform, or for any Credit Support Provider of such party to
            perform, any contingent or other obligation which the party (or such
            Credit Support Provider) has under any Credit Support Document
            relating to such Transaction;

      (ii) Tax Event. Due to (x) any action taken by a taxing authority, or
      brought in a court competent jurisdiction, on or after the date on which a
      Transaction is entered into (regardless of whether such action is taken or
      brought with respect to a party to this Agreement) or (y) a Change in Tax
      Law, the party (which will be the Affected Party) will, or there is a
      substantial likelihood that it will, on the next succeeding Scheduled
      Payment Date (1) be required to pay to the other party an additional
      amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except
      in respect of interest under Section 2(e), 6(d)(ii) or 6(e))or (2) receive
      a payment from which an amount is required to be deducted or withheld for
      or on account of a Tax (except in respect of interest under Section 2(e),
      6(d)(ii) or 6(e)) and no additional amount is required to be paid in
      respect of such Tax under Section 2(d)(i)(4) (other than by reason of
      Section 2(d)(i)(4)(A) or (B));

      (iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
      succeeding Scheduled Payment Date will either (1) be required to pay an
      additional amount in respect of an Indemnifiable Tax under Section
      2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
      6(e)) or (2) receive a payment from which an amount has been deducted or
      withheld for or on account of any Indemnifiable Tax in respect of which
      the other party is not required to pay an additional amount (other than by
      reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
      party consolidating or amalgamating with, or merging with or into, or
      transferring all or substantially all its assets to, another entity (which
      will be the Affected Party) where such action does not constitute an event
      described in Section 5(a)(viii);

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      (iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
      in the Schedule as applying to the party, such party ("X"), any Credit
      Support Provider of X or any applicable Specified Entity of X consolidates
      or amalgamates with, or merges with or into, or transfers all or
      substantially all its assets to, another entity and such action does not
      constitute an event described in Section 5(a)(viii) but the
      creditworthiness of the resulting, surviving or transferee entity is
      materially weaker than that of X, such Credit Support Provider or such
      Specified Entity, as the case may be, immediately prior to such action
      (and, in such event, X or its successor or transferee, as appropriate,
      will be the Affected Party); or

      (v) Additional Termination Event. If any "Additional Termination Event" is
      specified in the Schedule or any Confirmation as applying, the occurrence
      of such event (and, in such event, the Affected Party or Affected Parties
      shall be as specified for such Additional Termination Event in the
      Schedule or such Confirmation).

(c)   Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.

6.    Early Termination

(a)   Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b)   Right to Terminate Following Termination Event.

      (i) Notice. If a Termination Event occurs, an Affected Party will,
      promptly upon becoming aware of it, notify the other party, specifying the
      nature of that Termination Event and each Affected Transaction and will
      also give such other information about that Termination Event as the other
      party may reasonably require.

      (ii) Transfer to Avoid Termination Event. If either an Illegality under
      Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
      Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
      Affected Party, the Affected Party will, as a condition to its right to
      designate an Early Termination Date under Section 6(b)(iv), use all
      reasonable efforts (which will not require

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      such party to incur a loss, excluding immaterial, incidental expenses) to
      transfer within 20 days after it gives notice under Section 6(b)(i) all
      rights and obligations under this Agreement in respect of the Affected
      Transactions to another of its Offices or Affiliates so that such
      Termination Event ceases to exist.

      If the Affected Party is not able to make such a transfer it will give
      notice to the other party to that effect within such 20 day period,
      whereupon the other party may effect such a transfer within 30 days after
      the notice is given under Section 6(b)(i).

      Any such transfer by a party under this Section 6(b)(ii) will be subject
      to and conditional upon the prior written consent of the other party,
      which consent will not be withheld if such other party's policies in
      effect at such time would permit it to enter into transactions with the
      transferee on the terms proposed.

      (iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a
      Tax Event occurs and there are two Affected Parties, each party will use
      all reasonable efforts to reach agreement within 30 days after notice
      thereof is given under Section 6(b)(i) on action to avoid that Termination
      Event. (iv) Right to Terminate. If: --

            (1) a transfer under Section 6(b)(ii) or an agreement under Section
            6(b)(iii), as the case may be, has not been effected with respect to
            all Affected Transactions within 30 days after an Affected Party
            gives notice under Section 6(b)(i); or

            (2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
            Merger or an Additional Termination Event occurs, or a Tax Event
            Upon Merger occurs and the Burdened Party is not the Affected Party,

      either party in the case of an Illegality, the Burdened Party in the case
      of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
      or an Additional Termination Event if there is more than one Affected
      Party, or the party which is not the Affected Party in the case of a
      Credit Event Upon Merger or an Additional Termination Event if there is
      only one Affected Party may, by not more than 20 days notice to the other
      party and provided that the relevant Termination Event is then continuing,
      designate a day not earlier than the day such notice is effective as an
      Early Termination Date in respect of all Affected Transactions.

(c)   Effect of Designation.

      (i) If notice designating an Early Termination Date is given under Section
      6(a) or (b), the Earl Termination Date will occur on the date so
      designated, whether or not the relevant Event of Default or Termination
      Event is then continuing.

      (ii) Upon the occurrence or effective designation of an Early Termination
      Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
      respect of the Terminated Transactions will be required to be made, but
      without prejudice to

                                       11
<PAGE>

      the other provisions of this Agreement. The amount, if any, payable in
      respect of an Early Termination Date shall be determined pursuant to
      Section 6(e).

(d)   Calculations.

      (i) Statement. On or as soon as reasonably practicable following the
      occurrence of an Early Termination Date, each party will make the
      calculations on its part, if any, contemplated by Section 6(e) and will
      provide to the other party a statement (1) showing, in reasonable detail,
      such calculations (including all relevant quotations and specifying any
      amount payable under Section 6(e)) and (2) giving details of the relevant
      account to which any amount payable to it is to be paid. In the absence of
      written confirmation from the source of a quotation obtained in
      determining a Market Quotation, the records of the party obtaining such
      quotation will be conclusive evidence of the existence and accuracy of
      such quotation.

      (ii) Payment Date. An amount calculated as being due in respect of any
      Early Termination Date under Section 6(e) will be payable on the day that
      notice of the amount payable is effective (in the case of an Early
      Termination Date which is designated or occurs as a result of an Event of
      Default) and on the day which is two Local Business Days after the day on
      which notice of the amount payable is effective (in the case of an Early
      Termination Date which is designated as a result of a Termination Event).
      Such amount will be paid together with (to the extent permitted under
      applicable law) interest thereon (before as well as after judgment) in the
      Termination Currency, from (and including) the relevant Early Termination
      Date to (but excluding) the date such amount is paid, at the Applicable
      Rate. Such interest will be calculated on the basis of daily compounding
      and the actual number of days elapsed.

(e)   Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.

      (i) Events of Default. If the Early Termination Date results from an Event
      of Default: --

            (1) First Method and Market Quotation. If the First Method and
            Market Quotation apply, the Defaulting Party will pay to the
            Non-defaulting Party the excess, if a positive number, of (A) the
            sum of the Settlement Amount (determined by the Non-defaulting
            Party) in respect of the Terminated Transactions and the Termination
            Currency Equivalent of the Unpaid Amounts owing to the
            Non-defaulting Party over (B) the Termination Currency Equivalent of
            the Unpaid Amounts owing to the Defaulting Party.

                                       12
<PAGE>

            (2) First Method and Loss. If the First Method and Loss apply, the
            Defaulting Party will pay to the Non-defaulting Party, if a positive
            number, the Non-defaulting Party's Loss in respect of this
            Agreement.

            (3) Second Method and Market Quotation. If the Second Method and
            Market Quotation apply, an amount will be payable equal to (A) the
            sum of the Settlement Amount (determined by the Non-defaulting
            Party) in respect of the Terminated Transactions and the Termination
            Currency Equivalent of the Unpaid Amounts owing to the
            Non-defaulting Party less (B) the Termination Currency Equivalent of
            the Unpaid Amounts owing to the Defaulting Party. If that amount is
            a positive number, the Defaulting Party will pay it to the
            Non-defaulting Party; if it is a negative number, the Non-defaulting
            Party will pay the absolute value of that amount to the Defaulting
            Party.

            (4) Second Method and Loss. If the Second Method and Loss apply, an
            amount will be payable equal to the Non-defaulting Party's Loss in
            respect of this Agreement. If that amount is a positive number, the
            Defaulting Party will pay it to the Non-defaulting Party; if it is a
            negative number, the Non-defaulting Party will pay the absolute
            value of that amount to the Defaulting Party.

      (ii)  Termination Events. If the Early Termination Date results from a
      Termination Event: --

            (1) One Affected Party. If there is one Affected Party, the amount
            payable will be determined in accordance with Section 6(e)(i)(3), if
            Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
            except that, in either case, references to the Defaulting Party and
            to the Non-defaulting Party will be deemed to be references to the
            Affected Party and the party which is not the Affected Party,
            respectively, and, if Loss applies and fewer than all the
            Transactions are being terminated, Loss shall be calculated in
            respect of all Terminated Transactions.

            (2) Two Affected Parties. If there are two Affected Parties: --

                  (A) if Market Quotation applies, each party will determine a
                  Settlement Amount in respect of the Terminated Transactions,
                  and an amount will be payable equal to (I) the sum of (a)
                  one-half of the difference between the Settlement Amount of
                  the party with the higher Settlement Amount ("X") and the
                  Settlement Amount of the party with the lower Settlement
                  Amount ("Y") and (b) the Termination Currency Equivalent of
                  the Unpaid Amounts owing to X less (II) the Termination
                  Currency Equivalent of the Unpaid Amounts owing to Y; and

                  (B) if Loss applies, each party will determine its Loss in
                  respect of this Agreement (or if fewer than all the
                  Transactions are being terminated, in respect of all
                  Terminated Transactions) and an amount will be payable equal
                  to one-half of the difference between the Loss of the party
                  with the higher Loss ("X") and the Loss of the party with the

                                       13
<PAGE>

                  lower Loss ("Y").

            If the amount payable is a positive number, Y will pay it to X; if
            it is a negative number, X will pay the absolute value of that
            amount to Y.

      (iii) Adjustment for Bankruptcy. In circumstances where an Early
      Termination Date occurs because "Automatic Early Termination" applies in
      respect of a party, the amount determined under this Section 6(e) will be
      subject to such adjustments as are appropriate and permitted by law to
      reflect any payments or deliveries made by one party to the other under
      this Agreement (and retained by such other party) during the period from
      the relevant Early Termination Date to the date for payment determined
      under Section 6(d)(ii).

      (iv)  Pre-Estimate. The parties agree that if Market Quotation applies an
      amount recoverable under this Section 6(e) is a reasonable pre-estimate of
      loss and not a penalty. Such amount is payable for the loss of bargain and
      the loss of protection against future risks and except as otherwise
      provided in this Agreement neither party will be entitled to recover any
      additional damages as a consequence of such losses.

7.    Transfer

Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: -- (a) a party may make such a transfer of this
Agreement pursuant to a consolidation or amalgamation with, or merger with or
into, or transfer of all or substantially all its assets to, another entity (but
without prejudice to any other right or remedy under this Agreement); and

(b)   a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8.    Contractual Currency

(a)   Payment in the Contractual Currency. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable law,
any obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay

                                       14
<PAGE>

such additional amount in the Contractual Currency as may be necessary to
compensate for the shortfall. If for any reason the amount in the Contractual
Currency so received exceeds the amount in the Contractual Currency payable in
respect of this Agreement, the party receiving the payment will refund promptly
the amount of such excess.

(b)   Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.

(c)   Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.

(d)   Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.

9.    Miscellaneous

(a)   Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.

(b)   Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.

                                       15
<PAGE>

(c)   Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.

(d)   Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.

(e)   Counterparts and Confirmations.

      (i) This Agreement (and each amendment, modification and waiver in respect
      of it) may be executed and delivered in counterparts (including by
      facsimile transmission), each of which will be deemed an original.

      (ii) The parties intend that they are legally bound by the terms of each
      Transaction from the moment they agree to those terms (whether orally or
      otherwise). A Confirmation shall be entered into as soon as practicable
      and may be executed and delivered in counterparts (including by facsimile
      transmission) or be created by an exchange of telexes or by an exchange of
      electronic messages on an electronic messaging system, which in each case
      will be sufficient for all purposes to evidence a binding supplement to
      this Agreement. The parties will specify therein or through another
      effective means that any such counterpart, telex or electronic message
      constitutes a Confirmation.

(f)   No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.

(g)   Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

10.   Offices; Multibranch Parties

(a)   If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.

(b)   Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.

                                       16
<PAGE>

(c)   If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.

11.   Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.

12.   Notices

(a)   Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated: --

      (i) if in writing and delivered in person or by courier, on the date it is
      delivered;

      (ii) if sent by telex, on the date the recipient's answerback is received;

      (iii) if sent by facsimile transmission, on the date that transmission is
      received by a responsible employee of the recipient in legible form (it
      being agreed that the burden of proving receipt will be on the sender and
      will not be met by a transmission report generated by the sender's
      facsimile machine);

      (iv) if sent by certified or registered mail (airmail, if overseas) or the
      equivalent (return receipt requested), on the date that mail is delivered
      or its delivery is attempted; or

      (v) if sent by electronic messaging system, on the date that electronic
      message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.

(b)   Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.

                                       17
<PAGE>

13.   Governing Law and Jurisdiction

(a)   Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.

(b)   Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably: --

      (i) submits to the jurisdiction of the English courts, if this Agreement
      is expressed to be governed by English law, or to the non-exclusive
      jurisdiction of the courts of the State of New York and the United States
      District Court located in the Borough of Manhattan in New York City, if
      this Agreement is expressed to be governed by the laws of the State of New
      York; and

      (ii) waives any objection which it may have at any time to the laying of
      venue of any Proceedings brought in any such court, waives any claim that
      such Proceedings have been brought in an inconvenient forum and further
      waives the right to object, with respect to such Proceedings, that such
      court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is express to be governed by
English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

(c)   Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any Party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.

(d)   Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.

14.   Definitions

As used in this Agreement: --

                                       18
<PAGE>

"Additional Termination Event" has the meaning specified in Section 5(b).

"Affected Party" has the meaning specified in Section 5(b).

"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.

"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.

"Applicable Rate" means: --

(a)   in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b)   in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;

(c)   in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and

(d)   in all other cases, the Termination Rate.

"Burdened Party" has the meaning specified in Section 5(b).

"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.

"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.

"Credit Event Upon Merger" has the meaning specified in Section 5(b).

"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.

"Credit Support Provider" has the meaning specified in the Schedule.

"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

                                       19
<PAGE>

"Defaulting Party" has the meaning specified in Section 6(a).

"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

"Illegality" has the meaning specified in Section 5(b).

"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having had a permanent establishment or fixed place of
business in such jurisdiction, but excluding a connection arising solely from
such recipient or related person having executed, delivered, performed its
obligations or received a payment under, or enforced, this Agreement or a Credit
Support Document).

"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.

"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposit) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.

"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each

                                       20
<PAGE>

applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.

"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.

"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.

"Non-defaulting Party" has the meaning specified in Section 6(a).

                                       21
<PAGE>

"Office" means a branch or office of a party, which may be such party's head or
home office.

"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.

"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.

"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.

"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --

(a)   the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and

(b)   such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.

"Specified Entity" has the meaning specified in the Schedule.

"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.

"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any

                                       22
<PAGE>

applicable Specified Entity of such party) and the other party to this Agreement
(or any Credit Support Provider of such other party or any applicable Specified
Entity of such other party) which is a rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with
respect to any of these transactions), (b) any combination of these transactions
and (c) any other transaction identified as a Specified Transaction in this
Agreement or the relevant confirmation.

"Stamp Tax" means any stamp, registration, documentation or similar tax.

"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.

"Tax Event" has the meaning specified in Section 5(b).

"Tax Event Upon Merger" has the meaning specified in Section 5(b).

"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).

"Termination Currency" has the meaning specified in the Schedule.

"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.

                                       23

<PAGE>

"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.

"Unpaid Amounts" owing to any party means, with respect to any Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

CITIBANK, N.A.                               PARALLEL, LP
   (Name of Party)                            (Name of Party)

                                             By: Parallel Petroleum Corporation,
                                                 its General Partner

By: /s/ Linda Cook                               By: /s/ Steven D. Foster
    ---------------------------------                -----------------------
Name: Linda Cook                                 Name: Steven D. Foster
Title: Vice President                            Title: CFO
Date: 10-14-05                                   Date: 10/14/05

                                       24

<PAGE>

                                                                  Execution Copy

                                    SCHEDULE

                                     to the

                              ISDA Master Agreement

                          dated as of October 13, 2005,

                                     between

                                 CITIBANK, N.A.,
  a national banking association organized under the laws of the United States
                                   ("Party A")

                                       and

                                  PARALLEL, LP,
      a limited partnership organized under the laws of the State of Texas
                                   ("Party B")

                                     Part 1
                             Termination Provisions

In this Agreement:

            (a) "Specified Entity" means for the purpose of Section 5(a)(v) of
this Agreement, (i) in relation to Party A, Citigroup Global Markets Limited,
Citigroup Global Markets Inc., Citigroup Forex Inc., Citigroup Global Markets
Commercial Corp., Citicorp Securities Services, Inc., Citigroup Financial
Products Inc., Citigroup Energy Inc., Citigroup Global Markets Deutschland AG
and Citibank Texas, N.A. (individually a "Section 5(a)(v) Affiliate"), and (ii)
in relation to Party B, any Affiliate of Party B.

            (b) "Specified Transaction" will have the meaning specified in
Section 14 of this Agreement; provided, however, that such term shall be
modified to include within its meaning the Credit Agreement (as hereinafter
defined) and any Rate Management Transactions (as defined in the Credit
Agreement) arising thereunder. For purposes of clause (c) of such definition,
Specified Transaction includes any securities lending agreement, securities
options, margin loans, short sales, repurchase agreement, reverse repurchase
agreement and forward securities contract, and any other similar transaction now
existing or hereafter entered into between Party A (or any Section 5(a)(v)
Affiliate) and Party B (or any Affiliate of Party B).

            (c) The "Cross Default" provisions of Section 5(a)(vi) will not
apply to Party A and will not apply to Party B.

            For purposes of Section 5(a)(vi), the following provisions apply:

                                       1
<PAGE>

            "Specified Indebtedness shall have the meaning set forth in Section
            14 of this Agreement, provided, however, that such term shall be
            modified to include within its meaning the Credit Agreement and any
            Rate Management Transactions (as defined in the Credit Agreement)
            arising thereunder, but shall not include deposits received in the
            course of a party's ordinary banking business.

            "Threshold Amount" means,

            (i) with respect to Party A, 2% of the stockholders' equity of Party
            A; and
            (ii) with respect to Party B, $2,500,000

            including the U.S. Dollar equivalent on the date of any default,
            event of default or other similar condition or event of any
            obligation stated in any other currency.

            For purposes of (i) and (ii) above, stockholders' equity shall be
            determined by reference to the relevant party's most recent
            consolidated (quarterly, in the case of a U.S. incorporated party)
            balance sheet and shall include, in the case of a U.S. incorporated
            party, legal capital, paid-in capital, retained earnings and
            cumulative translation adjustments. Such balance sheet shall be
            prepared in accordance with accounting principles that are generally
            accepted in such party's country of organization.

            (d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of
this Agreement will apply to Party A and will apply to Party B.

            (e) The "Automatic Early Termination" provisions of Section 6(a)
will not apply to Party A and will not apply to Party B; provided, however, that
with respect to a party, where the Event of Default specified in Section
5(a)(vii)(1), (3), (4), (5), (6) or to the extent analogous thereto, (8) is
governed by a system of law which does not permit termination to take place
after the occurrence of the relevant Event of Default, then the Automatic Early
Termination provisions of Section 6(a) will apply to such party.

            (f) For the purpose of the "Payments on Early Termination"
provisions of Section 6(e):

                  (i)   The Second Method will apply; and

                  (ii)  Loss will apply.

            (g) "Termination Currency" means United States Dollars.

            (h) "Additional Termination Event" will apply to Party B only.

                        (iii) Section 5(b) of the Agreement is modified by
                  adding at the end thereof the following subsections (vi),
                  (vii), (viii) and (ix):

                                       2
<PAGE>

                        "(vi) Impossibility. Due to the occurrence of a natural
                  or man-made disaster, armed conflict, act of terrorism, riot,
                  labor disruption or any other circumstance beyond its control
                  after the date on which a Transaction is entered into, it
                  becomes impossible (other than as a result of its own
                  misconduct) for such a party:

                  (1)   to perform any absolute or contingent obligation, to
                        make a payment or delivery or to receive a payment or
                        delivery in respect of such Transaction or to comply
                        with any other material provision of this Agreement
                        relating to such Transaction; or

                  (2)   to perform, or for any Credit Support Provider of such
                        party to perform, any contingent or other obligation
                        which the party (or such Credit Support Provider) has
                        under any Credit Support Document relating to such
                        Transaction.

                  For the purposes of Section 6, both parties shall be Affected
                  Parties. An Impossibility shall be treated as an Illegality
                  for purposes of Section 5(c) of the Agreement. The definition
                  of "Affected Transactions" in Section 14 of the Agreement is
                  hereby amended by inserting "Impossibility," immediately after
                  "an Illegality,";

                  (vii) Change of Lender. At any time during the term of a
                        Transaction, CitiTexas (as hereinafter defined) should
                        cease to be a Lender under the Credit Agreement and no
                        Affiliate (as defined in the Credit Agreement) of
                        CitiTexas shall then be a Lender under the Credit
                        Agreement;

                  (viii)Notice of Cancellation Event. At any time during the
                        term of a Transaction, CitiTexas or any Affiliate (as
                        defined in the Credit Agreement) of CitiTexas receives a
                        notice or letter or other form of writing (whether from
                        any Affiliate of Party A, Party B, any Affiliate of
                        Party B or any other entity) indicating that a
                        Cancellation Event has occurred or shall occur or take
                        effect after the delivery of such notice, letter or form
                        of writing;

                  (ix)  Credit Agreement Event of Default. At any time during
                        the term of a Transaction, CitiTexas should exercise any
                        remedy provided for under the Credit Agreement based
                        upon an Event of Default (as defined in the Credit
                        Agreement) by Party B under the Credit Agreement, such
                        that any of the obligations under the Credit Agreement
                        should then become due and payable by Party B.

                  For purposes of the foregoing, Sections 5(vi), 5(vii), 5(viii)
                  and 5(ix) only, Party B shall be an Affected Party."

                                       3
<PAGE>

            (i) Failure to Pay or Deliver; Section 5(a)(i). The provisions of
Section 5(a)(i) of the Agreement are hereby amended to delete on line 3 the word
"third" and to insert in lieu thereof the word "first".

                                     Part 2
                               Tax Representations

            (a) Payer Representations. For the purpose of Section 3(e) of this
Agreement, Party A will make the following representation and Party B will make
the following representation:

It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to
be made by it to the other party under this Agreement. In making this
representation, it may rely on (i) the accuracy of any representations made by
the other party pursuant to Section 3(f) of this Agreement, (ii) the
satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of this
Agreement and the accuracy and effectiveness of any document provided by the
other party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii)
the satisfaction of the agreement of the other party contained in Section 4(d)
of this Agreement, provided that it shall not be a breach of this representation
where reliance is placed on clause (ii) and the other party does not deliver a
form or documents under Section 4(a)(iii) by reason of material prejudice to its
legal or commercial position.

            (b) Payee Representations. For the purpose of Section 3(f) of the
Agreement, Party A and Party B make the representations specified below, if any:

      The following representation will apply to Party A:

      It is a national banking association organized under the laws of the
      United States and its U.S. taxpayer identification number is 13-5266470.
      It is "exempt" within the meaning of Treasury Regulation sections
      1.6041-3(p) and 1.6049-4(c) from information reporting on Form 1099 and
      backup withholding.

      The following representation will apply to Party B:

      It is a corporation created or organized in the United States or under the
      laws of the United States and its U.S. taxpayer identification number is
      43-1954502. It is "exempt" within the meaning of Treasury Regulation
      sections 1.6041-3(p) and 1.6049-4(c) from information reporting on Form
      1099 and backup withholding.

                                     Part 3
                         Agreement to Deliver Documents

For the purpose of Section 4(a) of this Agreement:

            I. Tax forms, documents or certificates to be delivered are:

                                       4
<PAGE>

<TABLE>
<CAPTION>
Party required to                  Form/Document/                        Date by which to
 deliver document                   Certificate                             be delivered
-------------------     --------------------------------------     -------------------------------
<S>                     <C>                                        <C>
Party A and Party B     As required under Section 4(a)(iii) of     Promptly upon execution of this
                        the Agreement, IRS Form W-9, IRS Form      Agreement.
                        W-8BEN, IRS Form W-8ECI,
                        IRS Form W-8EXP and/or IRS Form
                        W-8IMY, whichever is relevant.
</TABLE>

            II. Other documents to be delivered are:

<TABLE>
<CAPTION>
  Party required
    to deliver                 Form/Document/                  Date by which to            Covered by
     document                    Certificate                    be delivered               Section 3(d)
-------------------     ----------------------------     ---------------------------     ----------------
<S>                     <C>                              <C>                             <C>
Party A and Party B     Evidence reasonably              As soon as practicable after    Yes
                        satisfactory to the other        execution of this Agreement
                        party of the (i) authority       and, if requested by the
                        of such party and its Credit     other party, as soon as
                        Support Provider, if any, to     practicable after execution
                        enter into the Agreement,        of any Confirmation of any
                        any Transactions and the         other Transaction.
                        Credit Support Document and
                        (ii) the authority and
                        genuine signature of the
                        individual signing the
                        Agreement and any Credit
                        Support Document on behalf
                        of such party to execute the
                        same.

Party B                 A Certificate certifying a      Upon execution of this           Yes
                        copy of its certificate of      Agreement
                        limited partnership and
                        partnership agreement or
                        other constituent documents
</TABLE>

                                       5
<PAGE>

<TABLE>
<CAPTION>
  Party required
    to deliver                 Form/Document/                  Date by which to            Covered by
     document                    Certificate                    be delivered               Section 3(d)
-------------------     ----------------------------     ---------------------------     ----------------
<S>                     <C>                              <C>                             <C>
Party B                 The Annual Report of Party       As soon as available and in     Yes
                        B's Credit Support Provider,     any event within 120 days
                        containing audited               (or as soon as practicable
                        consolidated financial           after becoming publicly
                        statements certified by          available) after the end of
                        independent certified public     its fiscal year.
                        accountants for each fiscal
                        year.

Party B                 The unaudited consolidated       As soon as available and in     Yes
                        financial statements, the        any event within 60 days (or
                        consolidated balance sheet       as soon as practicable after
                        and related statements of        becoming publicly available)
                        income for each fiscal           after the end of each of its
                        quarter of Party B's Credit      first three fiscal quarters.
                        Support Provider.
</TABLE>

                                     Part 4
                                  Miscellaneous

      (a) Addresses for Notices. For the purpose of Section 12(a) of this
Agreement:

      Address for notices or communications to Party A:

      Address: 250 West Street
               10th Floor
               New York, New York 10013

      Attention: Director Derivatives Operations

      Facsimile No.: 212 723 2956

      (For all purposes)

      In addition, in the case of notices or communications relating to Section
      5, 6, 11 or 13 of this Agreement, a second copy of any such notice or
      communication shall be addressed to the attention of Party A's legal
      department as follows:

                                       6
<PAGE>

      Address: Legal Department
               77 Water Street
               9th Floor
               New York, New York 10004

      Attention: Department Head

      Facsimile No.: 212 657 1452

      Address for notices or communications to Party B:

      Address: 1004 N. Big Spring
               Suite 400
               Midland, Texas 79701

      Attention: Steve Foster

      Facsimile No: 432-685-6568

      (b) Effectiveness of Notice. Section 12(a) is hereby amended by deleting
the words "facsimile transmission or" in line 3 thereof.

      (c) Process Agent. For the purpose of Section 13(c) of this Agreement:

                  Party A appoints as its Process Agent: Not Applicable
                  Party B appoints as its Process Agent: Not Applicable.

      (d) Offices. The provisions of Section 10(a) will apply to this Agreement.

      (e) Multibranch Party. For the purpose of Section 10(c) of this Agreement:

            Party A is a Multibranch Party and may act through any of the
            following offices: New York, London and Tokyo.

            Party B is not a Multibranch Party.

      (f) Calculation Agent. The Calculation Agent will be Party A unless
otherwise specified in a Confirmation in reference to the relevant Transaction.

      (g) Credit Support Document. The Credit Support Document is: the guaranty
by Parallel Petroleum Corporation in favor of Party A as beneficiary thereof in
the form attached hereto as Exhibit A.

      (h) Credit Support Provider. The Credit Support Provider with respect to
Party A is not applicable. The Credit Support Provider with respect to Party B
is Parallel Petroleum Corporation.

      (i) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.

                                       7
<PAGE>

      (j) Jurisdiction. Section 13(b)(i) of the Agreement is hereby amended by
(i) deleting in line 2 the word "non-" and (ii) deleting the final paragraph
thereof. The following shall be added at the end of Section 13(b): "Nothing in
this provision shall prohibit a party from bringing an action to enforce a money
judgment in any other jurisdiction."

      (k) "Affiliate" will have the meaning specified in Section 14 of this
Agreement.

      (l) "Netting of Payments" Either party may notify the other in writing,
not less than one Local Business Day in advance of a Scheduled Payment Date,
that with regard to payments due on that date, subparagraph (ii) of Section 2(c)
of this Agreement will not apply. Except to the extent that such advance written
notice shall have been given, subparagraph (ii) of Section 2(c) will apply.

                                     Part 5
                                Other Provisions

      (a) Set-off. Section 6 of the Agreement is amended by adding the following
new subsection 6(f):

      (f) In addition to any rights of set-off a party may have as a matter of
      law or otherwise, upon the occurrence of an Event of Default with respect
      to a party ("X") the other party ("Y") will have the right (but will not
      be obliged) without prior notice to X or any other person to set-off any
      obligation of X owing to Y (whether or not arising under this Agreement,
      whether or not matured, whether or not contingent and regardless of the
      currency, place of payment or booking office of the obligation) against
      any obligation of Y owing to X (whether or not arising under this
      Agreement, whether or not matured, whether or not contingent and
      regardless of the currency, place of payment or booking office of the
      obligation).

      For the purpose of cross-currency set-off, Y may convert any obligation to
      another currency at a market rate determined by Y.

      If an obligation is unascertained, Y may in good faith estimate that
      obligation and set-off in respect of the estimate, subject to the relevant
      party accounting to the other when the obligation is ascertained.

      Nothing in this provision will be deemed to create a charge or other
      security interest.

      (b) Waiver of Right to Trial by Jury. Each party hereby irrevocably
waives, to the fullest extent permitted by applicable law, any right it may have
to a trial by jury in respect of any suit, action or proceeding relating to this
Agreement.

      (c) Severability. In the event that any one or more of the provisions
contained in this Agreement should be held invalid, illegal, or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby. The parties

                                       8
<PAGE>

shall endeavor, in good faith negotiations, to replace the invalid, illegal or
unenforceable provisions with valid provisions, the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

      (d) Netting. In the event that any Terminated Transaction cannot be
aggregated and netted against all other Terminated Transactions under Section
6(e) of the Agreement, such excluded Terminated Transactions shall be aggregated
and netted amongst themselves to the fullest extent permitted by law.

      (e) Additional Representations. For purposes of Section 3 of this
Agreement, the following shall be added, immediately following paragraph (f)
thereof:

      "(g) No Reliance. It is acting for its own account, and it has made its
      own independent decisions to enter into that Transaction and as to whether
      that Transaction is appropriate or proper for it based upon its own
      judgment and upon advice from such advisors as it has deemed necessary. It
      is not relying on any communication (written or oral) of the other party
      as investment advice or as a recommendation to enter into that
      Transaction; it being understood that information and explanations related
      to the terms and conditions of a Transaction shall not be considered
      investment advice or a recommendation to enter into that Transaction. It
      has not received from the other party any assurance or guarantee as to the
      expected results of that Transaction.

      (h) Evaluation and Understanding. It is capable of evaluating and
      understanding (on its own behalf or through independent professional
      advice), and understands and accepts, the terms, conditions and risks of
      that Transaction. It is also capable of assuming, and assumes, the
      financial and other risks of that Transaction.

      (i) Status of Parties. The other party is not acting as a fiduciary or an
      advisor for it in respect of that Transaction.

      (j) No Agency. It is entering into this Agreement and each Transaction as
      principal and not as agent.

      (k) Risk Management. Party B alone represents that this Agreement has
      been, and each Transaction hereunder has been or will be, as the case may
      be, entered into for the purpose of managing its borrowings or
      investments, hedging its underlying assets or liabilities or in connection
      with its line of business (including financial intermediation services)
      and not for the purpose of speculation.

      (l) Eligible Contract Participant. (a) It is an "eligible contract
      participant" within the meaning of Section 1(a)(12) of the Commodity
      Exchange Act, as amended (the "CEA"), (b) this Agreement and each
      Transaction are subject to individual negotiation by each party, and (c)
      neither this Agreement nor any Transaction will be executed or traded on a
      "trading facility" within the meaning of Section 1a(33) of the CEA.

                                       9
<PAGE>

      (m) Financial Institution. With respect to Party A only, it is a
      "financial institution" as defined in the Federal Deposit Insurance
      Corporation Improvement Act of 1991 or Regulation EE promulgated by the
      Federal Reserve Board thereunder."

      (n) ERISA. The assets that are used in connection with the execution,
      delivery and performance of this Agreement and the Transactions entered
      into pursuant hereto are not the assets of an employee benefit or other
      plan subject to Title I of the Employee Retirement Income Security Act of
      1974, as amended ("ERISA"), a plan described in Section 4975 of the
      Internal Revenue Code of 1986, as amended (the "Code"), an entity whose
      underlying assets include "plan assets" by reason of Department of Labor
      regulation section 2510.3-101, or a governmental plan that is subject to
      any federal, state, or local law that is substantially similar to the
      provisions of Section 406 of ERISA or Section 4975 of the Code."

      (f) Confirmation Procedures. For each Transaction that Party A and Party B
enter hereunder, Party A shall promptly send to Party B a Confirmation setting
forth the terms of such Transaction. Party B shall execute and return the
Confirmation to Party A or request correction of any error within five Business
Days of receipt. Failure of Party B to respond within such period shall not
affect the validity or enforceability of such Transaction and shall be deemed to
be an affirmation and acceptance of such terms.

      (g) Escrow Payments. If by reason of the time difference between the
cities in which payments are to be made, it is not possible for simultaneous
payments to be made on any date on which both parties are required to make
payments hereunder, either party may at its option and in its sole discretion
notify the other party that payments on that date are to be made in escrow. In
this case the deposit of the payment due earlier on that date shall be made by
2:00 p.m. (local time at the place for the earlier payment) on that date with an
escrow agent selected by the party giving the notice, accompanied by irrevocable
payment instructions (i) to release the deposited payment to the intended
recipient upon receipt by the escrow agent of the required deposit of the
corresponding payment from the other party on the same date accompanied by the
irrevocable payment instructions to the same effect or (ii) if the required
deposit of the corresponding payment is not made on that same date, to return
the payment deposited to the party that paid it into escrow. The party that
elects to have payments made in escrow shall pay the costs of the escrow
arrangements and shall cause those arrangements to provide that the intended
recipient of the payment due to be deposited first shall be entitled to interest
on that deposited payment for each day in the period of its deposit at the rate
offered by the escrow agent for that day for overnight deposits in the relevant
currency in the office where it holds that deposited payment (at 11:00 am. local
time on that day) if that payment is not released by 5:00 p.m. on the date it is
deposited for any reason other than the intended recipients' failure to make the
escrow deposit it is required to make hereunder in a timely fashion.

      (h) Recording of Conversations. Each party hereto consents to the
recording of its telephone conversations pursuant to this Agreement. To the
extent that one party records telephone conversations (the "Recording Party")
and the other party does

                                       10
<PAGE>

not (the "Non-Recording Party"), the Recording Party shall, in the event of any
dispute, make a complete and unedited copy of such party's tape of the entire
day's conversations with the Non-Recording Party's personnel available to the
Non-Recording Party. The Recording Party's tapes may be used by either party in
any forum in which a dispute is sought to be resolved and the Recording Party
will retain tapes for a consistent period of time in accordance with the
Recording Party's policy unless one party notifies the other that a particular
transaction is under review and warrants further retention.

      (i) Limitation of Liability. No party shall be required to pay or be
liable to the other party for any consequential, indirect or punitive damages,
opportunity costs or lost profits.

      (j) Acknowledgements by Party B. For all purposes of this Agreement, each
Confirmation and all Transactions hereunder, Party B acknowledges that:

            (a)   Party A is an "Affiliate" of a "Lender" under the Credit
                  Agreement, as each of the foregoing underscored terms is
                  defined in Section 1 of the Credit Agreement;

            (b)   Party B is a "Borrower" under the Credit Agreement as such
                  term is defined in the Credit Agreement;

            (c)   this Agreement and all Confirmations hereunder shall be deemed
                  to be "Rate Management Transactions" as defined in Section 1
                  of the Credit Agreement and each such Rate Management
                  Transaction shall be deemed, for all purposes, to have been
                  authorized and delivered under the terms of the Credit
                  Agreement;

            (d)   as a Rate Management Transaction, this Agreement and each
                  Confirmation hereunder shall constitute a "Loan Document"
                  under the Credit Agreement as such term is defined therein;
                  and

            (e)   as Rate Management Transactions, all obligations of Party B to
                  Party A under this Agreement, any Confirmations and any
                  Transactions to be performed hereunder shall be secured
                  obligations as contemplated under Section 6 of the Credit
                  Agreement.

      (k) Definitions. The following definition shall be added to Section 14 of
this Agreement and shall be applicable to all Confirmations and each Transaction
to be performed hereunder:

            "Cancellation Event" shall mean (x) any expiration, termination or
            cancellation of the Initial Credit Facility (as defined below) or
            the Credit Agreement, in each case, whether by reason of payment of
            all indebtedness incurred thereunder or otherwise or (y) the Credit
            Agreement ceases, for any reason, to be in full force and effect.

                                       11
<PAGE>

            "CitiTexas" shall mean Citibank Texas, N.A. (formerly known as First
            American Bank, SSB), the Administrative Agent and a Lender under the
            Credit Agreement.

            "Credit Agreement" shall mean that certain Second Amended and
            Restated Credit Agreement dated on or about September 27, 2004 (as
            amended, supplemented, waived or otherwise modified from time to
            time), by and among Party B, (to the extent applicable) the relevant
            Affiliates of Party B, and the banks or lenders from time to time
            parties thereto, including, without limitation, CitiTexas.

      (l) Pari Passu. In accordance with the provisions of Section 6 of the
Credit Agreement, payment by Party B and any of its Affiliates to Party A of the
secured obligations under a Transaction shall be pari passu with the repayment
of principal amounts due on the Loan Documents.

                                     Part 6
           Additional Provisions for Commodity Derivative Transactions

(a) The 1993 ISDA Commodity Derivatives Definitions, as supplemented by the 2000
Supplement to the 1993 ISDA Commodity Derivatives Definitions (the "Commodity
Definitions") are incorporated by reference in this Agreement and the relevant
Confirmations with respect to "Transactions", as defined by the Commodity
Definitions, except as otherwise specifically provided in the relevant
Confirmation. All terms used in this Part 6 that are not otherwise defined shall
have the meanings given to them in the Commodity Definitions.

(b) In lieu of Section 7.4(d) of the Commodity Definitions, the "Market
Disruption Events" specified in Section 7.4(c)(i), 7.4(c)(ii), 7.4(c)(iii),
7.4(c)(iv) and 7.4(c)(v) shall apply, except as otherwise specified in the
relevant Confirmation.

(c) "Additional Market Disruption Events" shall apply only if so specified in
the relevant Confirmation.

(d) The following "Disruption Fallbacks" specified in Section 7.5(c) of the
Commodity Definitions shall apply, in the following order, except as otherwise
specified in the relevant Confirmation:

      (i)   "Fallback Reference Price" (if the relevant parties have specified
            an alternate Commodity Reference Price in the Confirmation);

      (ii)  "Postponement", with three (3) Commodity Business Days as the
            Maximum Days of Disruption;

      (iii) "Negotiated Fallback" (provided that the reference in Section
            7.5(c)(iv) to "fifth Business Day" shall be amended to the "twelfth
            Business Day"); and

      (iv)  "Fallback Reference Dealers", provided, however, notwithstanding any
            reference to the number of Specified Prices in the definition of

                                       12
<PAGE>

            "Commodity Reference Dealers" set forth in Section 7.1(d)(i) of the
            Commodity Definitions, Party A shall obtain in good faith quotations
            from two (2) leading dealers in the relevant market and the price
            for that Pricing Date will be the arithmetic mean of the Specified
            Prices.

(e) Section 7.5(e) of the Commodity Derivatives Definitions shall not apply.

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

CITIBANK, N.A.                               PARALLEL, LP
(Party A)                                    (Party B)

                                             By: Parallel Petroleum Corporation,
                                                 its General Partner

By: /s/ Linda Cook                               By: /s/ Steven D. Foster
    ------------------                               ---------------------------
Name: Linda Cook                                 Name: Steven D. Foster
Title: Vice President                            Title: CFO
Date: 10/14/05                                   Date: 10/14/05

                                       13exv10w1

 

Exhibit 10.1

EXECUTION COPY

SECOND AMENDMENT TO CREDIT AGREEMENT

     This Second Amendment to Credit Agreement (the “Amendment”), dated as of October 19,
2005, is among UNITED STATES LIME & MINERALS, INC., a Texas corporation (the “Borrower”),
the financial institutions and other lenders listed on the signature pages hereof (such financial
institutions and lenders, together with their respective successors and assigns, are referred to
hereinafter each individually as a “Lender” and collectively as “Lenders”), and
WELLS FARGO BANK, N.A., as administrative agent for the Lenders (the “Administrative
Agent”).

RECITALS:

     A. The Borrower, certain of the Lenders and the Administrative Agent entered into that certain
Credit Agreement dated as of August 24, 2004, as amended by First Amendment to Credit Agreement
dated as of August 31, 2005 (said Credit Agreement as amended, extended, renewed or restated from
time to time, the “Agreement”).

     B. The Borrower has requested certain amendments to the Agreement to, among other things, (a)
increase the Aggregate Commitments, (b) add National City Bank (the “New Lender”) as a
Lender under the Agreement, and (c) modify certain covenants.

     C. The Lenders, the Administrative Agent and the Swing Line Lender hereby agree to amend the
Agreement on and subject to the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

ARTICLE I

Definitions

     1.1 Definitions. Capitalized terms used in this Amendment, to the extent not
otherwise defined herein, shall have the same meanings as in the Agreement as amended hereby, and
all references to “Sections,” “clauses,” “Articles,” “Exhibits,” and “Schedules” are references to
the Agreement’s sections, clauses, articles, exhibits and schedules.

ARTICLE II

Amendment

     2.1 Amendments to Section 1.01. Section 1.01 is amended as follows:

     (a) The following definitions are added to Section 1.01 in appropriate alphabetical order:

     “Multiple Advance Funding Termination Date” means December 31, 2006.

 

 

     “Multiple Advance Term Commitment” means, as to each Lender, its obligation to
make a Multiple Advance Term Loan to the Borrower pursuant to Section 2.02A, in
aggregate principal amount not to exceed the amount set forth opposite such Lender’s name on
Schedule 2.02A (collectively, the “Aggregate Multiple Advance Term
Commitments”).

     “Multiple Advance Term Commitment Fee” has the meaning specified in Section
2.10(a).

     “Multiple Advance Term Loan” has the meaning specified in Section
2.02A.

     “Multiple Advance Term Loan Borrowing” means a Borrowing by the Borrower
consisting of Multiple Advance Term Loans of the same Type and having the same Interest
Period made by each of the Lenders pursuant to Section 2.02A.

     “Multiple Advance Term Loan Note” means a promissory note made by the Borrower
in favor of a Lender evidencing Multiple Advance Term Loans made by such Lender,
substantially in the form of Exhibit L.

     “Multiple Advance Term Loan Notice” means a notice of (a) a Multiple Advance
Term Loan Borrowing, (b) a conversion of Multiple Advance Term Loans from one Type to the
other, or (c) a continuation of Multiple Advance Term Loans as the same Type, pursuant to
Section 2.03(a), which, if in writing, shall be substantially in the form of
Exhibit M.

     “Multiple Advance Term Maturity Date” means (a) December 31, 2015, or (b) such
earlier date as (i) the Obligations become due and payable pursuant to this Agreement
(whether by acceleration, prepayment in full, scheduled reduction or otherwise) or (ii)
there shall exist an Event of Default under Section 8.01(f) of this Agreement.

     “Multiple Advance Term Pro Rata Share” means, with respect to each Lender at
any time, a fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Multiple Advance Term Commitment of such Lender
at such time and the denominator of which is the amount of the Aggregate Multiple Advance
Term Commitments at such time; provided that if the Commitment of each Lender to
make Multiple Advance Term Loans have been terminated pursuant to Section 8.02, then
the Multiple Advance Term Pro Rata Share of each Lender shall be a fraction (expressed as a
percentage, carried out to the ninth decimal place), the numerator of which is the
Outstanding Amount of Multiple Advance Term Loans owed to such Lender and the denominator of
which is the Outstanding Amount of Multiple Advance Term Loans owed to all Lenders. The
initial Multiple Advance Term Pro Rata Share of each Lender is set forth opposite the name
of such Lender on Schedule 2.02A or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable.

     “Quarterly Payment Date” shall mean the last Business Day of each Fiscal
Quarter.

2

 

     “Second Amendment” means the Second Amendment to Credit Agreement dated as of
October 19, 2005.

     “Second Amendment Closing Date” means October 20, 2005.

     (b) The definition of “Aggregate Commitments” is amended by substituting a
comma for the word “and” found therein and by adding the following at the end thereof: “and
the Aggregate Multiple Advance Term Commitments.”;

     (c) The pricing grid found in the definition of “Applicable Rate” is amended to
read as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Revolving	 	 	 	 
	 	 	 	 	Commitment	 	 	 	 
	 	 	 	 	Fee and	 	 	 	 
	 	 	 	 	Multiple	 	 	 	 
	 	 	 	 	Advance	 	 	 	 
	 	 	 	 	Term	 	LIBOR for	 	 
	Pricing	 	 	 	Commitment	 	Loans and	 	Base Rate
	Level	 	Adjusted Cash Flow Leverage Ratio	 	Fee	 	Letters of Credit	 	for Loans
	I

	 	Less than 1.25 to 1.00
	 	 	0.200	%	 	 	1.250	%	 	 	-0.500	%
	II

	 	Greater than or equal to 1.25 to
1.00 but less than 1.75 to 1.00
	 	 	0.250	%	 	 	1.500	%	 	 	-0.250	%
	III

	 	Greater than or equal to 1.75 to
1.00 but less than 2.25 to 1.00
	 	 	0.250	%	 	 	1.750	%	 	 	0.000	%
	IV

	 	Greater than or equal to 2.25 to
1.00 but less than 2.75 to 1.00
	 	 	0.250	%	 	 	2.000	%	 	 	0.000	%
	V

	 	Greater than or equal to 2.75 to
1.00 but less than 3.25 to 1.00
	 	 	0.300	%	 	 	2.250	%	 	 	0.250	%
	VI

	 	Greater than or equal to 3.25 to 1.00
	 	 	0.350	%	 	 	2.500	%	 	 	0.500	%

     (d) The definition of “Borrowing” is amended by adding after each
reference to “Swing Line Borrowing,” the words “a Multiple Advance Term Loan Borrowing”.

     (e) The definition of “Credit Extension” is amended by relettering clause (d)
thereof as clause (e) and adding the following after clause (c) thereof: “, (d) a Multiple
Advance Term Loan Borrowing”.

     (f) The definition of “Excess Cash Flow” is amended by deleting therefrom the
number “3,500,000” and inserting in lieu thereof the number “4,000,000”.

     (g) The definition of “Fee Letter” is amended by adding after the word “of” the
following: “the Second Amendment to”.

     (h) The definitions of “Interest Payment Date” and “Interest Period”
are amended by inserting after each reference to “Revolving Maturity Date” the following:
“, Multiple Advance Term Maturity Date”;

3

 

     (i) The definition of “Interest Period” is amended by adding after the words
“Revolving Loan Notice” each time they appear the following: “, Multiple Advance Term Loan
Notice”.

     (j) The definitions of “Loan” and “Type” are amended by adding after
each reference to “Term Loan” the following: “, a Multiple Advance Term
Loan”.

     (k) The definition of “Notes” is amended by adding after the reference to
“Swing Line Note” the following: “, the Multiple Advance Term Loan
Note”.

     (l) The definition of “Outstanding Amount” is amended by inserting after the
words “Swing Line Loans” each time they appear the following: “, Multiple Advance Term
Loans”;

     (m) The definition of “Permitted Acquisition” is amended by deleting the word
“and” immediately before clause (iv) and by adding the following after clause (iv):

     and (v) if the Acquisition Consideration is greater than $10,000,000, prior to such
acquisition, the Administrative Agent shall have received from the Borrower a report of an
independent geologist, in form and substance reasonably satisfactory to the Administrative
Agent, that shows that there are sufficient mineable resources to support commercial
operations for in excess of 15 years.

     (n) The definition of “Pro Rata Share” is amended by adding after the words
“Revolving Pro Rata Share” the following: “, a Multiple Advance Term Pro Rata Share”.

     (o) The definition of “Request for a Credit Extension” is amended by deleting
the word “and” before clause (d) and adding the following after clause (d):

     and (e) with respect to a Multiple Advance Term Borrowing or conversion or continuation
of a Multiple Advance Term Loan Borrowing, a Multiple Advance Term Loan Notice.

     (p) The definition of “Required Lenders” is amended and restated in its
entirety to read as follows:

     “Required Lenders” means, as of any date of determination, two or more Lenders
having more than 66-2/3% of the Aggregate Commitments or, if the Commitment of each Lender
to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been
terminated pursuant to Section 8.02, two or more Lenders holding in the aggregate
more than 66-2/3% of the Total Outstandings (with the aggregate amount of each Lender’s risk
participation and funded participation in L/C Obligations and Swing Line Loans being deemed
“held” by such Lender for purposes of this definition); provided that the
Commitments of, and the portion of the Total Outstandings held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of Required
Lenders; and provided, further, that if there is only one Lender, the term
“Required Lenders” shall mean that Lender.

4

 

     (q) Clause (a) of the definition of “Revolving Maturity Date” is amended by
deleting the reference to “August 25, 2007” and inserting in lieu thereof the date “October
20, 2010”;

     (r) Clause (a) of the definition of “Term Maturity Date” is amended by deleting
the reference to “August 25, 2009” and inserting in lieu thereof the date “December 31,
2015”;

     2.2 Amendment to Section 2.02. Section 2.02 is amended by adding immediately before
the word “Closing” the words “Second Amendment” and by inserting at the end thereof the following:

     Term Loans made on the Second Amendment Closing Date are made, in part, in renewal,
extension and rearrangement, and not in novation or discharge, of Loans made on the Closing
Date.

     2.3 Amendment to Article II. Article II is amended by adding thereto a new section
reading as follows:

     Section 2.02A Multiple Advance Term Loans. Subject to the terms and conditions set
forth herein, each Lender severally agrees, from the Second Amendment Closing Date until the
Multiple Advance Term Funding Termination Date, to make loans (the “Multiple Advance
Term Loans”) to the Borrower, in one or more advances on a Business Day in an amount
equal to such Lender’s Multiple Advance Term Pro Rata Share of each Multiple Advance Term
Loan Borrowing; provided that (i) the aggregate amount of the Multiple Advance Term
Loans of each Lender shall not exceed such Lender’s Multiple Advance Term Commitment, and
(ii) the aggregate amount of the Multiple Advance Term Loan Borrowings made from the Second
Amendment Closing Date until the Multiple Advance Funding Termination Date shall not exceed
the Aggregate Multiple Advance Term Commitments. Amounts repaid on Multiple Advance Term
Loans may not be reborrowed.

     2.4 Amendment to Section 2.03. Section 2.03 is amended by adding after each reference
to “Revolving Loan Notice” (other than the reference in the proviso in the last sentence of Section
2.03(b)) the following: “, a Multiple Advance Term Loan Notice” and by adding after each reference
to “Revolving Pro Rata Share” the following: “, Multiple Advance Term Pro Rata Share”.

     2.5 Amendment to Section 2.03(e). Section 2.03(e) is amended by adding the following
after the words “Revolving Loans”: “, six with respect to Multiple Advance Term Loans”.

     2.6 Amendment to Section 2.06(a). Section 2.06(a) is amended by adding after each
reference to the words “Revolving Loans” the following: “, Multiple Advance Term Loans”.

     2.7 Amendment to Section 2.06(f). Section 2.06(f) is amended by adding after the
words “Term Loan” each time they appear the following: “and Multiple Advance Term Loans”.

5

 

     2.8 Amendment to Section 2.08. Clause (c) of Section 2.8 is deleted therefrom
and the following substituted in its entirety therefor:

     (c) To the extent not otherwise required to be paid earlier as provided herein, the
Borrower shall repay the principal of the Term Loans in thirty-nine (39) consecutive
principal installments of $833,333.33, such payments being due on each Quarterly Payment
Date commencing March 31, 2006, and the remaining principal balance being due on the Term
Maturity Date, subject to reduction after taking into account any prepayment of the Term
Loans pursuant to Section 2.06.

     (d) To the extent not otherwise required to be paid earlier as provided herein, the
Borrower shall repay the principal of the Multiple Advance Term Loan in thirty-five (35)
consecutive principal installments with each installment to be equal to 1/48th of
the principal outstanding thereon on January 1, 2007, such payments to be due on each
Quarterly Payment Date beginning March 31, 2007, and any remaining principal being due and
payable on the Multiple Advance Maturity Date subject to reduction after taking into account
any prepayment of Multiple Advance Term Loans pursuant to Section 2.06.

     2.9 Amendment to Section 2.10. Section 2.10 is amended by adding thereto a new
subsection reading as follows:

     ”(c) The Borrower shall pay to the Administrative Agent for the account of each Lender
with a Multiple Advance Term Commitment in accordance with its Multiple Advance Pro Rata
Share, a commitment fee (the “Multiple Advance Term Commitment Fee”) equal to the
Applicable Rate times the actual daily amount by which the Aggregate Multiple
Advance Term Commitments on such day exceeds the aggregate amount of Multiple Advance Term
Loan Borrowings made on or prior to such day. The Multiple Advance Term Commitment Fee
shall accrue at all times through the Multiple Advance Funding Termination Date, including
at any time during which one or more of the conditions in Article IV is not met, and
shall be due and payable quarterly in arrears on the last Business Day of each March, June,
September and December, commencing with the first such date to occur after the Second
Amendment Closing Date, and on the Multiple Advance Funding Termination Date. The Multiple
Advanced Commitment Fee shall be calculated quarterly in arrears, and if there is any change
in the Applicable Rate during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect.”

     2.10 Amendment to Section 2.12. Section 2.12(a) is amended by adding after the
reference to “Revolving Loan Note” the following: “, a Multiple Advance Term Loan Note”.

     2.11 Amendment to Section 6.14. Section 6.14 is amended by deleting the references to
“September 10, 2005” and inserting in lieu thereof references to “September 30, 2005”.

     2.12 Amendment to Section 7.11. Clause (b) of Section 7.11 is amended and
restated in its entirety to read as follows:

6

 

     (b) Capital Expenditures in the ordinary course of business not exceeding (i)
$30,000,000 during Fiscal Year 2005, (ii) $30,000,000 during Fiscal Year 2006 and (iii)
$8,000,000 during any Fiscal Year after 2006.

     2.13 Amendment to Section 7.14. Clause (a) of Section 7.14 is amended by
adding the following at the end thereof:

     ”, in the case of any Fiscal Quarter ending on or before December 31, 2006, and 1.5 to
1.0, in the case of any Fiscal Quarter ending on or after March 31, 2007.”

     2.14 Further Amendment to Section 7.14. Clause (b) of Section 7.14 is amended
by deleting the existing table therefrom and substituting therefor the following table:

	 	 	 
	Fiscal Quarters Ending	 	Maximum Cash Flow Leverage Ratio
	Second Amendment Closing Date through
June 30, 2006

	 	4.00 to 1.00
	September 30, 2006 through December
31, 2006

	 	3.75 to 1.00
	March 31, 2007 and each Fiscal
Quarter thereafter

	 	3.50 to 1.00

     2.15 Amendment to Section 10.02. Section 10.02(d) is amended by adding after the
reference to “Revolving Loan Notices” the following: “, Multiple Advance Term Loan Notices”.

     2.16 Amendment to Section 10.06. Section 10.06(b)(ii) is amended by adding after the
reference to “Revolving Commitment” the following: “, its Multiple Advance Term Loan”.

     2.17 Amendment to Schedules. Each Schedule to the Agreement shall remain as in effect
on the Closing Date, except to the extent set forth on the Schedules to this Second Amendment.

     2.18 New Schedule. Schedule 2.02A is added to the Agreement in the form attached to
this Amendment.

     2.19 New Exhibits. Exhibits L and M attached to this Second Amendment are added to
the Agreement.

ARTICLE III

Conditions Precedent

     3.1 Conditions. The effectiveness of this Amendment is subject to satisfaction of the
following conditions precedent:

7

 

     (a) The Administrative Agent shall have received executed counterparts of this
Amendment from each party hereto.

     (b) The representations and warranties contained herein and in all other Loan
Documents, as amended hereby, other than those that relate to a specific date and were true
and correct on such date, shall be true and correct as of the date hereof as if made on the
date hereof.

     (c) No Default or Event of Default shall have occurred and be continuing.

     (d) The Administrative Agent shall have received a certified resolution of the Board of
Directors of the Borrower authorizing the execution, delivery and performance of this Second
Amendment, the new Notes and the replacement Notes, as applicable.

     (e) The Administrative Agent shall have received a duly executed (i) new Note for each
New Lender, (ii) replacement Note for each Lender whose Commitment is being amended by this
Second Amendment, and (iii) new Notes for each Lender to the extent of increased or new
commitments.

     (f) The Administrative Agent shall have received an opinion of the Borrower’s counsel
covering such matters as the Administrative Agent may reasonably request.

     (g) The Administrative Agent shall have received the fees provided for in the Fee
Letter.

     (h) The Administrative Agent shall have received, in form and substance satisfactory to
the Administrative Agent and its counsel, such other documents, opinions, certificates and
instruments as the Administrative Agent shall reasonably require.

ARTICLE IV

Payments by Lenders; New Lenders

     4.1 On the Second Amendment Closing Date, each Lender shall, to the extent necessary, make a
payment to the Administrative Agent in an amount sufficient, upon the application of such payments
by all Lenders to the reduction of outstanding Loans held by the Lenders, to cause the principal
amount of Loans outstanding made by each Lender to be in the amount of its Pro Rata Share (after
giving effect to this Second Amendment) of all outstanding Loans.

     4.2 The Borrower hereby irrevocably authorizes each Lender to fund to the Administrative Agent
the payment required to be made pursuant to the immediately preceding sentence for application to
the reduction of the outstanding Loans held by the other Lenders. If, as a result of the repayment
of Loans provided for in this Article IV, any payment of LIBOR Loans occurs on a day which is not
the last day of the applicable Interest Period, the Borrower will pay to the Administrative Agent
for the benefit of any Lender holding a LIBOR Loan any loss or cost incurred by such Lender
resulting therefrom in accordance with Section 3.05 of the

8

 

Agreement to the extent a LIBOR Loan is paid on other than the last day of an Interest Period
as a result thereof. On the Second Amendment Closing Date, each New Lender and each Lender whose
Commitment is increased as a result of this Second Amendment, shall be deemed to have irrevocably
and unconditionally purchased and received, without recourse or warranty, an undivided
participation in all outstanding Swing Line Loans and L/C Obligations in accordance with its Pro
Rata Share (after giving effect to this Second Amendment).

     4.3 The parties hereto agree that the provisions of Section 10.06 of the Agreement shall not
be applicable to the addition of the New Lenders pursuant to this Second Amendment. Each New
Lender represents and warrants to the Administrative Agent as follows:

     (a) such New Lender has received a copy of the Agreement and all amendments thereto,
together with copies of the most recent financial statements of the Borrower delivered
pursuant thereto, and it is an Eligible Assignee;

     (b) it has the full power and authority and the legal right to make, deliver and
perform, and has taken all necessary action, to authorize the execution, delivery and
performance of the Agreement and this Second Amendment, and any and all other documents
delivered by it in connection herewith and to fulfill its obligations under, and to
consummate the transactions contemplated by, this Second Amendment and the other Loan
Documents, and no consent or authorization of, filing with, or other act by or in respect of
any Governmental Authority, is required in connection herewith or therewith;

     (c) under Applicable Laws no Tax will be required to be withheld by the Administrative
Agent or the Borrower with respect to any payments to be made to such New Lender under any
Loan Document, and no tax forms described in Section 3.01 of the Agreement are required to
be delivered by such New Lender; and

     (d) such New Lender has received and reviewed such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter into this
Second Amendment and become a party to the Agreement. Such New Lender has independently and
without reliance upon the Administrative Agent or any other Person, and based on such
information as such New Lender has deemed appropriate, made its own credit analysis and
decision to enter into this Second Amendment and become a party to the Agreement. Such New
Lender will, independently and without reliance upon the Administrative Agent or any other
Lender, and based upon such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action under the
Agreement.

ARTICLE V

Ratifications, Representations and Warranties

     5.1 Ratifications. The terms and provisions set forth in this Amendment shall modify
and supersede all inconsistent terms and provisions set forth in the Agreement and except as
expressly modified and superseded by this Amendment, the terms and provisions of the

9

 

Agreement are ratified and confirmed and shall continue in full force and effect. The
Borrower, the Lenders and the Administrative Agent agree that the Agreement as amended hereby shall
continue to be legal, valid, binding and enforceable in accordance with its terms.

     5.2 Representations and Warranties. The Borrower hereby represents and warrants to
the Administrative Agent and the Lenders that (i) the execution, delivery and performance of this
Amendment and any and all other Loan Documents executed and/or delivered in connection herewith
have been authorized by all requisite corporate action on the part of the Borrower and will not
violate the articles of incorporation or bylaws of the Borrower, (ii) the representations and
warranties contained in the Agreement, as amended hereby, and any other Loan Document are true and
correct on and as of the date hereof as though made on and as of the date hereof (excluding,
however, representations and warranties that relate to a specific date and were true and correct on
such date), (iii) no Default or Event of Default has occurred and is continuing, and (iv) the
Borrower is in full compliance with all covenants and agreements contained in the Agreement as
amended hereby.

ARTICLE VI

Miscellaneous

     6.1 Survival of Representations and Warranties. All representations and warranties
made in this Amendment or any other Loan Document including any Loan Document furnished in
connection with this Amendment shall survive the execution and delivery of this Amendment and the
other Loan Documents, and no investigation by the Agent or the Lenders or any closing shall affect
the representations and warranties or the right of the Agent and the Lenders to rely upon them.

     6.2 Reference to Agreement. Each of the Loan Documents, including the Agreement and
any and all other agreements, documents, or instruments now or hereafter executed and delivered
pursuant to the terms hereof or pursuant to the terms of the Agreement as amended hereby, are
hereby amended so that any reference in such Loan Documents to the Agreement shall mean a reference
to the Agreement as amended hereby.

     6.3 Severability. Any provision of this Amendment held by a court of competent
jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this
Amendment and the effect thereof shall be confined to the provision so held to be invalid or
unenforceable.

     6.4 Successors and Assigns. This Amendment is binding upon and shall inure to the
benefit of each Lender, the Administrative Agent and the Borrower and their respective successors
and assigns, except the Borrower may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of the Administrative Agent and each Lender.

     6.5 Effect of Waiver. No consent or waiver, express or implied, by the Agent or any
Bank to or for any breach of or deviation from any covenant, condition or duty by the Borrower

10

 

shall be deemed a consent or waiver to or of any other breach of the same or any other
covenant, condition or duty.

     6.6 Headings. The headings, captions, and arrangements used in this Amendment are for
convenience only and shall not affect the interpretation of this Amendment.

     6.7 Non-Application of Chapter 346 of Texas Finance Code. The provisions of Chapter
346 of the Texas Finance Code are specifically declared by the parties not to be applicable to the
Agreement, this Amendment or any of the Loan Documents.

     6.8 Costs, Expenses and Taxes. The Borrower agrees to pay on demand all costs and
expenses of the Administrative Agent in connection with the preparation, reproduction, execution
and delivery of this Amendment and the other instruments and documents to be delivered hereunder
(including the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent
with respect thereto).

     6.9 Guarantor’s Acknowledgment. By signing below, each Guarantor (a) acknowledges,
consents and agrees to the execution, delivery and performance by the Borrower of this Amendment,
(b) acknowledges and agrees that its obligations in respect of its Guaranty (i) are not released,
diminished, waived, modified, impaired or affected in any manner by this Amendment or any of the
provisions contemplated herein and (ii) cover the Aggregate Commitments as increased by this
Amendment, (c) ratifies and confirms its obligations under its Guaranty, and (d) acknowledges and
agrees that it has no claims or offsets against, or defenses or counterclaims to, its Guaranty.

     6.10 Execution in Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which when taken together shall
constitute but one and the same instrument. For purposes of this Amendment, a counterpart hereof
(or signature page thereto) signed and transmitted by any Person party hereto to the Administrative
Agent (or its counsel) by facsimile machine, telecopier or electronic mail is to be treated as an
original. The signature of such Person thereon, for purposes hereof, is to be considered as an
original signature, and the counterpart (or signature page thereto) so transmitted is to be
considered to have the same binding effect as an original signature on an original document.

     6.11 Governing Law; Binding Effect. This Amendment shall be governed by and construed
in accordance with the laws of the State of Texas applicable to agreements made and to be performed
entirely within such state, provided that each party shall retain all rights arising under federal
law, and shall be binding upon the parties hereto and their respective successors and assigns.

     6.12 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS, DOCUMENTS AND
AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS AND

11

 

UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.

[Remainder of Page Intentionally Left Blank. Signature Pages Follow.]

12

 

     Executed as of the date first written above.

	 	 	 	 	 
	 	BORROWER:

UNITED STATES LIME & MINERALS, INC.

 	 
	 	By:  	/s/ M. Michael Owens
 	 
	 	 	M. Michael Owens 	 
	 	 	Vice President and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	WELLS FARGO BANK, N.A., as Administrative

Agent and a Lender

 	 
	 	By:  	/s/ Ralph C. Hamm III
 	 
	 	 	Ralph C. Hamm III 	 
	 	 	Vice President 	 
	 

	 	 	 	 	 
	 	NATIONAL CITY BANK, as a Lender

 	 
	 	By:  	/s/ Kenneth S. Jamison
 	 
	 	 	Kenneth S. Jamison 	 
	 	 	Vice President 	 
	 

13

 

	 	 	 	 	 
	 	ACKNOWLEDGED AND AGREED TO:

ARKANSAS LIME COMPANY

 	 
	 	By:  	/s/ M. Michael Owens
 	 
	 	 	M. Michael Owens 	 
	 	 	Vice President and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	COLORADO LIME COMPANY

 	 
	 	By:  	/s/ M. Michael Owens
 	 
	 	 	M. Michael Owens 	 
	 	 	Vice President and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	TEXAS LIME COMPANY

 	 
	 	By:  	/s/ M. Michael Owens
 	 
	 	 	M. Michael Owens 	 
	 	 	Vice President and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	U.S. LIME COMPANY – HOUSTON

 	 
	 	By:  	/s/ M. Michael Owens
 	 
	 	 	M. Michael Owens 	 
	 	 	Vice President and Chief Financial Officer 	 
	 

14

 

SCHEDULE 2.01

REVOLVING COMMITMENTS

AND REVOLVING PRO RATA SHARES

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Revolving	 
	Lender	 	Revolving Commitment	 	 	Pro Rata Share	 
	Wells Fargo Bank, N.A.
	 	$	20,000,000	 	 	 	66-2/3	%
	 
	 	 	 	 	 	 	 	 
	National City Bank
	 	$	10,000,000	 	 	 	33-1/3	%
	 
	 	 	 	 	 	 	 	 
	Total
	 	$	30,000,000	 	 	 	100.000000000	%

Schedule 2.01

 

 

SCHEDULE 2.02

TERM COMMITMENTS

AND TERM PRO RATA SHARES

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Term	 
	Lender	 	Term Commitment	 	 	Pro Rata Share	 
	Wells Fargo Bank, N.A.
	 	$	26,666,666.67	 	 	 	66-2/3	%
	 
	 	 	 	 	 	 	 	 
	National City Bank
	 	$	13,333,333.33	 	 	 	33-1/3	%
	 
	 	 	 	 	 	 	 	 
	Total
	 	$	40,000,000.00	 	 	 	100.000000000	%

Schedule 2.02

 

 

SCHEDULE 2.02A

MULTIPLE ADVANCE TERM COMMITMENTS AND

MULTIPLE ADVANCE TERM PRO RATA SHARES

	 	 	 	 	 	 	 	 	 
	 	 	Multiple Advance Term	 	 	Multiple Advance Term	 
	Lender	 	Commitments	 	 	Pro Rata Shares	 
	Wells Fargo Bank, N.A.
	 	$	13,333,333.33	 	 	 	66-2/3	%
	 
	 	 	 	 	 	 	 	 
	National City Bank
	 	$	6,666,666.67	 	 	 	33-1/3	%
	 
	 	 	 	 	 	 	 	 
	Total
	 	$	20,000,000.00	 	 	 	100.000000000	%

Schedule 2.02A

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}]]