Exhibit 10.1

EXECUTION COPY

 

 

 

RECEIVABLES PURCHASE AGREEMENT

dated as of January 10, 2013

among

TARGA RECEIVABLES LLC,

as Seller

TARGA RESOURCES PARTNERS LP,

individually and as initial Servicer

THE VARIOUS CONDUIT PURCHASERS FROM TIME TO TIME PARTY HERETO,

THE VARIOUS COMMITTED PURCHASERS FROM TIME TO TIME PARTY HERETO,

THE VARIOUS PURCHASER AGENTS FROM TIME TO TIME PARTY HERETO,

THE VARIOUS LC PARTICIPANTS FROM TIME TO TIME PARTY HERETO,

and

PNC BANK, NATIONAL ASSOCIATION,

as Administrator and LC Bank

 

 

 

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TABLE OF CONTENTS

ARTICLE I

AMOUNTS AND TERMS OF THE PURCHASES

 

SECTION   HEADING    PAGE  

ARTICLE I

  AMOUNTS AND TERMS OF THE PURCHASES      1  

Section 1.1

  Purchases      1  

Section 1.2

  Making Purchases      3  

Section 1.3

  Purchased Interest Computation      5  

Section 1.4

  Settlement Procedures      5  

Section 1.5

  Fees      10  

Section 1.6

  Payments and Computations, Etc.      10  

Section 1.7

  Increased Costs Generally; Capital Requirements; Reserves on LIBOR Market
Index Rate Purchases      11  

Section 1.8

  Funding Losses      13  

Section 1.10

  Taxes      13  

Section 1.10

  Mitigation; Replacement of Purchasers      16  

Section 1.11

  Inability to Determine the LIBOR Market Index Rate      17  

Section 1.12

  Letters of Credit      18  

Section 1.13

  Issuance of Letters of Credit      18  

Section 1.14

  Requirements For Issuance of Letters of Credit      19  

Section 1.15

  Disbursements, Reimbursement      19  

Section 1.16

  Repayment of Participation Advances      20  

Section 1.17

  Documentation      21  

Section 1.18

  Determination to Honor Drawing Request      21  

Section 1.19

  Nature of Participation and Reimbursement Obligations      21  

Section 1.20

  [Reserved]      23  

Section 1.21

  Liability for Acts and Omissions      23  

Section 1.22

  Extension of Facility Termination Date      25  

ARTICLE II

  REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS      25  

Section 2.1

  Representations and Warranties; Covenants      25  

Section 2.2

  Termination Events      25  

ARTICLE III

  INDEMNIFICATION      26  

Section 3.1

  Indemnities by the Seller      26  

Section 3.2

  Indemnities by the Servicer      28  

ARTICLE IV

  ADMINISTRATION AND COLLECTIONS      28  

Section 4.1

  Appointment of the Servicer      28  

Section 4.2

  Duties of the Servicer      29  

Section 4.3

  Lock-Box Account Arrangements      30  

Section 4.4

  Enforcement Rights      31  

Section 4.5

  Responsibilities of the Seller and the Servicer      32  

Section 4.6

  Servicing Fee      32  

 

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TABLE OF CONTENTS

(continued)

 

         Page  

ARTICLE V

  THE AGENTS      32  

Section 5.1

  Appointment and Authorization      32  

Section 5.2

  Delegation of Duties      33  

Section 5.3

  Exculpatory Provisions      33  

Section 5.4

  Reliance by Agents      34  

Section 5.5

  Notice of Termination Events      34  

Section 5.6

  Non-Reliance on Administrator, Purchaser Agents and Other Purchasers      35  

Section 5.7

  Administrator, Purchasers, Purchaser Agents and Affiliates      35  

Section 5.8

  Indemnification      36  

Section 5.9

  Successor Administrator      36  

ARTICLE VI

  MISCELLANEOUS      36  

Section 6.1

  Amendments, Etc,      36  

Section 6.2

  Notices, Etc.      37  

Section 6.3

  Successors and Assigns; Participations; Assignments      38  

Section 6.4

  Costs, Expenses and Taxes      40  

Section 6.5

  No Proceedings; Limitation on Payments      40  

Section 6.6

  GOVERNING LAW AND JURISDICTION      41  

Section 6.7

  Confidentiality      42  

Section 6.8

  Execution in Counterparts      42  

Section 6.9

  Survival of Termination      43  

Section 6.10

  WAIVER OF JURY TRIAL      43  

Section 6.11

  Sharing of Recoveries      43  

Section 6.12

  Right of Setoff      43  

Section 6.13

  Entire Agreement      43  

Section 6.14

  Headings      44  

Section 6.15

  Purchaser Groups’ Liabilities      44  

Section 6.16.

  Tax Treatment      44  

Section 6.17.

  USA Patriot Act      44  

 

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EXHIBITS

  

Exhibit I

  Definitions   

Exhibit II

  Conditions to Purchases   

Exhibit III

  Representations and Warranties   

Exhibit IV

  Covenants   

Exhibit V

  Termination Events   

SCHEDULES

  

Schedule I

  Credit and Collection Policy   

Schedule II

  Lock-Box Banks and Lock-Box Accounts   

Schedule III

  Special Obligors and Special Obligor Limits   

ANNEXES

  

Annex A-1

  Form of Information Package   

Annex A-2

  Form of Weekly Report   

Annex A-3

  Form of Daily Report   

Annex B

  Form of Purchase Notice   

Annex C

  Form of Assumption Agreement   

Annex D

  Form of Transfer Supplement   

Annex E

  Form of Paydown Notice   

Annex F

  Form of Letter of Credit Application   

Annex G

  Form of Compliance Certificate   

Annex H

  Form of U.S. Tax Compliance Certificate   

 

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This RECEIVABLES PURCHASE AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”) is entered into as of
January 10, 2013, among TARGA RECEIVABLES LLC, a Delaware limited liability
company, as seller (the “Seller”), TARGA RESOURCES PARTNERS LP, a Delaware
limited partnership (“Targa”), as servicer (in such capacity, together with its
successors and permitted assigns in such capacity and any successor servicer
designated in accordance with the terms hereof, the “Servicer”), the various
Conduit Purchasers from time to time party hereto, the various Committed
Purchasers from time to time party hereto, the various Purchaser Agents from
time to time party hereto, the various LC Participants from time to time party
hereto and PNC BANK, NATIONAL ASSOCIATION, as administrator (in such capacity,
together with its successors and assigns in such capacity, the “Administrator”)
and as issuer of Letters of Credit (in such capacity, together with its
successors and assigns in such capacity, the “LC Bank”).

BACKGROUND

The Seller (i) desires to sell, transfer and assign an undivided variable
percentage ownership interest in a pool of Receivables, and the Purchasers
desire to acquire such undivided variable percentage ownership interest, as such
percentage interest shall be adjusted from time to time based upon, in part,
reinvestment payments that are made by such Purchasers and (ii) may, subject to
the terms and conditions hereof, request that the LC Bank issue one or more
Letters of Credit.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

DEFINITIONS

Certain terms that are capitalized and used throughout this Agreement are
defined in Exhibit I. References in the Exhibits, Schedules and Annexes hereto
to the “Agreement” refer to this Agreement, as amended, restated, supplemented
or otherwise modified from time to time.

ARTICLE I

AMOUNTS AND TERMS OF THE PURCHASES

Section 1.1 Purchases.

(a) On the terms and subject to the conditions hereof, the Seller may, from time
to time from the Closing Date to the Facility Termination Date, (i) request that
the Conduit Purchasers, if any, in each Purchaser Group or the Committed
Purchasers in each such Purchaser Group, make purchases of and reinvestments in
undivided percentage ownership interests with regard to the Purchased Interest
from the Seller from time to time, in each case, ratably based on

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each Purchaser Group’s Ratable Share and (ii) request that the LC Bank issue
Letters of Credit, in each case subject to the terms hereof (each such purchase,
reinvestment or issuance is referred to herein as a “Purchase”). Subject to
Section 1.4(b) concerning reinvestments, at no time will a Conduit Purchaser
have any obligation to make a Purchase. Each Committed Purchaser severally
hereby agrees, on the terms and subject to the conditions hereof, to make
Purchases of undivided percentage ownership interests with regard to the
Purchased Interest from the Seller from time to time from the Closing Date to
the Facility Termination Date, ratably based on the applicable Purchaser Group’s
Ratable Share of each Purchase requested pursuant to Section 1.2(a) (and, in the
case of each Committed Purchaser, its Commitment Percentage of its Purchaser
Group’s Ratable Share of such Purchase) and, on the terms of and subject to the
conditions of this Agreement, the LC Bank agrees to issue Letters of Credit in
return for (and each LC Participant hereby severally agrees to make
participation advances in connection with any draws under such Letters of Credit
equal to such LC Participant’s Commitment Percentage of its Purchaser Group’s
Pro Rata Share of such draws) undivided percentage ownership interests with
regard to the Purchased Interest from the Seller from time to time from the
Closing Date to the Facility Termination Date; provided, that under no
circumstances shall any Purchaser make any Purchase (including, without
limitation, any deemed Purchases pursuant to Section 1.1(b)) or issue any
Letters of Credit hereunder, as applicable, if, after giving effect to such
Purchase, (i) the aggregate outstanding amount of the Capital funded by such
Purchaser, when added to all other Capital funded by all other Purchasers in
such Purchaser’s Purchaser Group would exceed (A) its Purchaser Group’s Group
Commitment minus (B) its Purchaser Group’s Pro Rata Share of the LC
Participation Amount, (ii) the Aggregate Capital plus the LC Participation
Amount would exceed the Purchase Limit, (iii) the Commitment Percentage of its
Purchaser Group’s Pro Rata Share of the LC Participation Amount would exceed its
LC Sublimit Commitment, or (iv) the LC Participation Amount would exceed the
aggregate of the LC Sublimit Commitments of the LC Bank and the LC Participants.

The Seller may, subject to the requirements and conditions herein, use the
proceeds of any Purchase by the Purchasers hereunder to satisfy its
Reimbursement Obligation to the LC Bank and the LC Participants (ratably, based
on the outstanding amounts funded by the LC Bank and each such LC Participant)
pursuant to Section 1.15.

(b) In addition, if there is a drawing under any Letter of Credit, the Seller
shall, on the applicable Drawing Date, automatically (and without the
requirement of any further action on the part of any Person hereunder) be deemed
to have requested a new Purchase from the Conduit Purchasers or Committed
Purchasers, as applicable, on such date, on the terms and subject to
satisfaction of the conditions hereof (other than conditions with respect to
notice and the minimum Purchase amount) in an aggregate amount equal to the
amount of such drawing. Subject to the limitations on funding set forth in
paragraph (a) above (and the other requirements and conditions herein set forth
(other than conditions with respect to notice and minimum Purchase amount)), the
Conduit Purchasers or Committed Purchasers, as applicable, shall fund such
Purchase so requested and deliver the proceeds thereof directly to the
Administrator to be immediately distributed by the Administrator to the LC Bank.
If any of the conditions to the funding of such Purchase are not satisfied on
the applicable Drawing Date (other than conditions with respect notice and the
minimum Purchase amount), the Seller shall reimburse the LC Bank for the full
amount of the drawing under such Letter of Credit (out of its own funds
available therefor) in accordance with Section 1.15.

 

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(c) The Seller may, upon ten days’ written notice to the Administrator and each
Purchaser Agent, reduce the unfunded portion of the Purchase Limit in whole or
in part (but not below the amount which would cause the aggregate of the Capital
of all Purchasers within any Purchaser Group plus such Purchaser Group’s Pro
Rata Share of the face amount of any outstanding Letters of Credit to exceed its
Group Commitment (after giving effect to such reduction)); provided that
(i) each partial reduction shall be in the amount of at least $5,000,000, and in
integral multiples of $1,000,000 in excess thereof and (ii) unless reduced to
$0, the Purchase Limit shall in no event be reduced below $25,000,000. Each
reduction in the Purchase Limit shall be allocated ratably among the Commitments
of the Purchasers in accordance with their respective Commitments. The LC
Sublimit Commitment of the LC Bank and each LC Participant shall automatically
ratably reduce in connection with each reduction of Commitments pursuant to this
clause (c). No reduction of Commitments pursuant to this clause (c) shall be
effective unless at the time of such reduction the amount of funds on deposit in
the LC Collateral Account is at least an amount equal to the excess, if any, of
the LC Participant Amount over the LC Sublimit Commitments as so reduced.

Section 1.2 Making Purchases. (a) Each Funded Purchase may be made on any day
following delivery by the Seller of a Purchase Notice to the Administrator and
each Purchaser Agent in accordance with Section 6.2 (which notice must be
received by the Administrator and each Purchaser Agent before 2:00 p.m., New
York City time) at least two Business Days before the requested Purchase Date,
which notice shall specify: (A) in the case of a Funded Purchase (other than one
made pursuant to Section 1.15(b)), the amount requested to be paid to the Seller
(which shall not be less than $300,000 (or such lesser amount as agreed to by
the Administrator and the Majority Purchaser Agents)) and shall be an integral
multiple of $100,000), (B) the date of such Funded Purchase (which shall be a
Business Day) and (C) the pro forma calculation of the Purchased Interest after
giving effect to the increase in the Aggregate Capital.

(b) On the date of each Funded Purchase pursuant to Section 1.1(a), each
applicable Conduit Purchaser or Committed Purchaser, as the case may be, shall,
upon satisfaction of the applicable conditions set forth in Section 2 of Exhibit
II, make available to the Seller in same day funds, at the Administration
Account an amount equal to the portion of Capital with regard to the Purchased
Interest then required to be funded by such Purchaser pursuant to
Section 1.1(a).

(c) Effective on the date of each Purchase, the Seller hereby sells and assigns
to the Administrator for the benefit of the Purchasers (ratably for each
Purchaser, based on the sum of the Capital of such Purchaser plus such
Purchaser’s Commitment Percentage of its Purchaser Group’s Pro Rata Share of the
LC Participation Amount outstanding at such time) the Purchased Interest.

(d) To secure all of the Seller’s obligations (monetary or otherwise) under this
Agreement and the other Transaction Documents to which it is a party, whether
now or hereafter existing or arising, due or to become due, direct or indirect,
absolute or contingent, the Seller

 

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hereby grants to the Administrator, for the benefit of the Purchaser Agents and
the Purchasers, a security interest in all of the Seller’s right, title and
interest in, to and under all of the following, whether now or hereafter owned,
existing or arising: (i) all Pool Receivables, (ii) all Related Security,
(iii) all Collections, (iv) the Lock-Box Accounts and all amounts on deposit
therein, and all certificates and instruments, if any, from time to time
evidencing such Lock-Box Accounts and amounts on deposit therein, (v) the LC
Collateral Account and all amounts on deposit therein, (vi) all rights (but none
of the obligations) of the Seller under the Sale Agreement, (vii) all books and
records to the extent related to any of the foregoing, together with all rights
(but not obligations) under the Contracts related to the Receivables and
(viii) all proceeds of, and all amounts received or receivable under, any or all
of the foregoing (collectively, the “Pool Assets”). The Seller hereby authorizes
the Administrator to file financing statements describing as the collateral
covered thereby as “all of the debtor’s personal property or assets” or words to
that effect. The Administrator, for the benefit of the Purchaser Agents and the
Purchasers, shall have, with respect to the Pool Assets, and in addition to all
the other rights and remedies available to the Administrator, the Purchaser
Agents and the Purchasers, all of the rights and remedies of a secured party
under any applicable UCC.

(e) With (A) the prior written consent of the applicable Purchaser Agent,
(B) the prior written consent of the Administrator (in its sole discretion) and
(C) the prior written consent of the applicable Purchaser, the Seller may cause
a Purchaser to increase its Commitment (and to increase ratably its LC Sublimit
Commitment). The Seller shall repay any Capital outstanding on the effective
date of any such increase (and pay any additional amounts required pursuant to
Section 1.8) to the extent necessary to keep the outstanding Capital of the
Purchasers in each Purchaser Group equal to such Purchaser Group’s Ratable Share
(after giving effect to the increase in any Commitment pursuant to this clause
(e)) of the Aggregate Capital. The Purchase Limit shall automatically increase
by the amount of any increase in any Commitment pursuant to this clause (e).

(f) The Seller may, with the prior written consent of each Purchaser Agent (and,
in the case of a new LC Participant, the LC Bank), add additional Persons as
Purchasers (either to an existing Purchaser Group or by creating new Purchaser
Groups). Each new Conduit Purchaser, Committed Purchaser or LC Participant (or
Purchaser Group) shall become a party hereto by executing and delivering to the
Administrator and the Seller, an Assumption Agreement (which Assumption
Agreement shall, in the case of any new Purchaser Group, be executed by each
Person in such new Purchaser Group).

(g) Each Committed Purchaser’s and LC Participant’s obligations hereunder shall
be several, and the failure of any Committed Purchaser or LC Participant to make
any Purchase hereunder or a payment in connection with a drawing under a Letter
of Credit hereunder, as the case may be, shall not relieve any other Committed
Purchaser or LC Participant of its obligation hereunder to make payment for any
Funded Purchase or such drawing. Further, if any Committed Purchaser or LC
Participant fails to satisfy its obligation to make a Purchase or payment with
respect to such drawing as required hereunder, upon receipt of notice of such
failure from the Administrator (or any relevant Purchaser Agent), subject to the
limitations set forth herein, (i) (A) the non-defaulting Committed Purchasers in
such defaulting Committed Purchaser’s Purchaser Group shall fund the defaulting
Committed Purchaser’s Commitment

 

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Percentage of its Purchaser Group’s Ratable Share of the related Purchase (based
on their relative Commitment Percentages (determined without regard to the
Commitment Percentage of the related defaulting Committed Purchaser)) or (B) the
non-defaulting LC Participants in such defaulting LC Participant’s Purchaser
Group shall fund the defaulting LC Participant’s Commitment Percentage of its
Purchaser Group’s Pro Rata Share of the related drawing (based on their relative
Commitment Percentages (determined without regard to the Commitment Percentage
of the related defaulting LC Participant)); and (ii) if there are no other
(A) Committed Purchasers in such Purchaser Group or if such other Committed
Purchasers are also defaulting Committed Purchasers, then such defaulting
Committed Purchaser’s Commitment Percentage of its Purchaser Group’s Ratable
Share of such Purchase shall be funded by each other Purchaser Group ratably
(based on their relative Purchaser Group Ratable Shares) or (B) if there are no
other LC Participants in such Purchaser Group or if such other LC Participants
are also defaulting LC Participants, then such defaulting LC Participant’s
Commitment Percentage of its Purchaser Group’s Pro Rata Share of such drawing
shall be funded by each other Purchaser Group ratably (based on their relative
Purchaser Group Pro Rata Shares). Notwithstanding anything in this paragraph
(g) to the contrary, no Committed Purchaser or LC Participant shall be required
to make a Purchase or payment with respect to such drawing pursuant to this
paragraph (g) for an amount which would cause (x) the aggregate Capital of such
Committed Purchaser (after giving effect to such Purchase) to exceed its
Commitment, (y) such LC Participant’s Commitment Percentage of its Purchaser
Group’s Pro Rata Share of the face amount of all outstanding Letters of Credit
(after giving effect to such payment with respect to such drawing) to exceed its
LC Sublimit Commitment or (z) the aggregate Capital of all Purchasers in its
Purchaser Group plus its Purchaser Group’s Pro Rata Share of the LC
Participation Amount (after giving effect to such Purchase or payment with
respect to such drawing) to exceed the Group Commitment for its Purchaser Group.

Section 1.3 Purchased Interest Computation. The Purchased Interest shall be
initially computed on the date of the initial Purchase hereunder. Thereafter,
until the Facility Termination Date, the Purchased Interest shall be
automatically recomputed (or deemed to be recomputed) on each Business Day other
than a Termination Day. From and after the occurrence of any Termination Day,
the Purchased Interest shall (until the event(s) giving rise to such Termination
Day are satisfied or are waived in accordance with Section 6.1) be deemed to be
100%. The Purchased Interest shall become zero when (a) the Aggregate Capital
thereof and Aggregate Discount thereon shall have been paid in full, (b) an
amount equal to 100% of the LC Participation Amount shall have been deposited in
the LC Collateral Account or all Letters of Credit shall have expired and
(c) all other amounts owed by the Seller and Targa hereunder or in connection
herewith to each Purchaser, the Administrator and any other Indemnified Party or
Affected Person are paid in full, and the Servicer shall have received the
accrued Servicing Fee thereon.

Section 1.4 Settlement Procedures.

(a) The Seller shall provide to the Servicer on a timely basis all information
needed for the administration of the Pool Receivables, including notice of the
occurrence of any Termination Day and current computations of the Purchased
Interest.

 

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(b) The Servicer shall, on each day on which Collections of Pool Receivables are
received by the Seller or the Servicer, after payment in full of the Servicing
Fee accrued and payable through such day:

(i) set aside and hold (or cause the Seller to set aside and hold) in trust (and
shall, at the request of the Administrator, segregate in a separate account
approved by the Administrator) for the benefit of each Purchaser Group, out of
such Collections, first, an amount equal to the Aggregate Discount accrued
through such day and not previously set aside and second, an amount equal to the
Fees accrued and unpaid through such day,

(ii) subject to Section 1.4(f), if such day is not a Termination Day, remit to
the Seller, ratably, on behalf of each Purchaser Group, the remainder of such
Collections. Such remainder shall, to the extent representing a return of the
Aggregate Capital, ratably, according to each Purchaser’s Capital, be
automatically reinvested in Pool Receivables and the Related Rights; provided,
that if the Purchased Interest would exceed 100%, then the Servicer shall not
remit such remainder to the Seller or reinvest it, but shall set aside and hold
(or cause the Seller to set aside and hold) in trust for the benefit of the
Purchasers (and shall, at the request of the Administrator, segregate in a
separate account approved by the Administrator) a portion of such Collections
that, together with the other Collections set aside pursuant to this clause
(ii), shall equal the amount necessary to reduce the Purchased Interest to 100%
(determined as if such Collections set aside had been applied to reduce the
Aggregate Capital and then, if applicable, to cash collateralize the LC
Participation Amount, at such time), which amount shall be deposited ratably to
each Purchaser Agent’s account (for the benefit of its related Purchasers) or to
the LC Collateral Account on the next Settlement Date in accordance with
Section 1.4(c); provided, further, that in the case of any Purchaser that has
provided notice (an “Exiting Notice”) to its Purchaser Agent of its refusal,
pursuant to Section 1.22, to extend its Commitment hereunder (an “Exiting
Purchaser”), then, such Collections shall not be reinvested and shall instead be
held in trust for the benefit of such Purchaser and applied in accordance with
clause (iii) below,

(iii) if such day is a Termination Day or a day on which the Commitment of an
Exiting Purchaser terminates, set aside and hold (or cause the Seller to set
aside and hold) in trust (and shall, at the request of the Administrator,
segregate in a separate account approved by the Administrator) for the ratable
benefit of each Purchaser Group the entire remainder of such Collections (or, in
the case of an Exiting Purchaser, an amount equal to such Purchaser’s ratable
share of such Collections based on its Capital; provided, that solely for the
purpose of determining such Purchaser’s ratable share of such Collections, such
Purchaser’s Capital shall be deemed to remain constant from the day on which the
Commitment of such Exiting Purchaser terminates, until the date such Purchaser’s
Capital has been paid in full; it being understood that if such day is also a
Termination Day, such Exiting Purchaser’s Capital shall be recalculated taking
into account amounts received by such Purchaser in respect of this parenthetical
and thereafter Collections shall be set aside for such Purchaser ratably in
respect of its Capital (as recalculated); provided, further, that if amounts are
so set aside and held in trust on any Termination Day, such amounts shall, to
the extent representing a return of Aggregate Capital, ratably in accordance
with each Purchaser’s Capital, be reinvested in accordance with clause
(ii) above on the next day to occur that is not a Termination Day (if any), and

 

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(iv) subject to Section 1.4(f), release to the Seller for its own account any
Collections in excess of: (x) the amounts that are required to be set aside or
reinvested pursuant to clauses (i), (ii) and (iii) above plus (y) all other
amounts then due and payable by the Seller under this Agreement to the
Purchasers, the LC Bank, the Administrator and any other Indemnified Party or
Affected Person.

(c) The Servicer shall, in accordance with the priorities set forth in
Section 1.4(d) below, deposit into an account designated for each Purchaser by
its Purchaser Agent, on each Settlement Date, Collections held for such
Purchaser pursuant to Sections 1.4(b)(i), (ii) and (iii) and Section 1.4(f). On
or prior to the last day of each Calculation Period, each Purchaser Agent will
notify the Servicer by email communication or other electronic delivery of the
amount of Discount and Fees accrued during such Calculation Period or portion
thereof and payable on such date.

(d) The Servicer shall distribute the amounts described in Section 1.4(b) on
each Settlement Date, as follows:

(i) if such distribution occurs on a Settlement Date that is not a Termination
Day, that is not a day on which the Commitment of an Exiting Purchaser
terminates and that is not a day on which the Purchased Interest exceeds 100%,
to each Purchaser Agent ratably (based on the Discount and Fees accrued during
the related Yield Period) (for the benefit of the relevant Purchasers within
such Purchaser Agent’s Purchaser Group) in payment in full of all accrued
Discount and Fees with respect to the Purchasers within such Purchaser Agent’s
Purchaser Group; it being understood that each Purchaser Agent shall distribute
such amounts to the Purchasers within its Purchaser Group ratably according to
Discount and Fees owed to each such Purchaser; and

(ii) if such distribution occurs on a Settlement Date that is a Termination Day,
a day on which the Commitment of an Exiting Purchaser terminates or a day on
which the Purchased Interest exceeds 100%:

first, to each Purchaser Agent ratably (based on the Discount and Fees accrued
during the related Yield Period) (for the benefit of the relevant Purchasers
within such Purchaser Agent’s Purchaser Group) in payment in full of all accrued
Discount and Fees with respect to the Purchasers within such Purchaser Agent’s
Purchaser Group;

second, to each Purchaser Agent ratably (based on the aggregate of the Capital
of each Purchaser in such Purchaser Agent’s Purchaser Group) (for the benefit of
the relevant Purchasers within such Purchaser Agent’s Purchaser Group) in
payment in full of (x) if such day is a Termination Day, each Purchaser’s
Capital, (y) if such day is not a Termination Day, the amount necessary to
reduce the Purchased Interest to 100% or (z) if such day is not a Termination
Day but is a day on which

 

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the Commitment of an Exiting Purchaser terminates, an amount equal to the
Exiting Purchaser’s ratable share of the Collections set aside pursuant to
Section 1.4(b)(iii) based on its Capital (determined as if such Collections had
been applied to reduce the Aggregate Capital); it being understood that each
Purchaser Agent shall distribute the amounts described in clauses first and
second of this clause (ii) to the Purchasers within its Purchaser Group ratably
(based on Discount and Fees and Capital, respectively, owed to such Purchasers);

third, to the LC Collateral Account for the benefit of the LC Bank and the LC
Participants, the amount necessary to cash collateralize the LC Participation
Amount (x) if such day is a Termination Day, until the amount of cash collateral
held in such LC Collateral Account equals 100% of the LC Participation Amount or
(y) if such day is not a Termination Day, the amount necessary to reduce the
Purchased Interest to 100%;

fourth, if all amounts required to be paid and deposited pursuant to preceding
clauses first through third of this clause (ii) have been so paid and deposited
in full, to each Purchaser Group ratably (based on the amounts payable to each)
(for the benefit of the Purchasers within such Purchaser Group), the
Administrator and any other Indemnified Party or Affected Person in payment in
full of any other amounts owed thereto by the Seller or the Servicer hereunder;
and

fifth, to the Seller for its own account.

(e) For the purposes of this Section 1.4:

(i) if on any day the Outstanding Balance of any Pool Receivable is either
(A) reduced or canceled as a result of (I) any defective, rejected, returned
goods or services, any cash or other discount, or any failure by an Originator
to deliver any goods or perform any services or otherwise perform under the
underlying Contract or invoice, (II) any change in or cancellation of any of the
terms of such Contract or invoice or any other adjustment by an Originator, the
Servicer or the Seller which reduces the amount payable by the Obligor on the
related Receivable, (III) any rebates, warranties, allowances or charge-backs or
(IV) any setoff or credit in respect of any claim by the Obligor thereof
(whether such claim arises out of the same or a related transaction or an
unrelated transaction), or (B) subject to any specific dispute, offset,
counterclaim or defense whatsoever (except the discharge in bankruptcy of the
Obligor thereof), in any such case, the Seller shall be deemed to have received
on such day a Collection of such Pool Receivable in the amount of such
reduction, adjustment, cancellation or dispute and shall, subject to
Section 1.4(e)(v), (x) if such day is not a Termination Day, hold any and all
such amounts in trust for the benefit of the Purchasers and their assigns and,
on the following Settlement Date, apply such amounts in accordance with this
Section 1.4 or (y) if such day is a Termination Day, within two (2) Business
Days of such reduction or adjustment, pay any and all such amounts in respect
thereof to a Lock-Box Account for the benefit of the Purchasers and their
assigns and for application pursuant to this Section 1.4;

 

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(ii) if on any day any of the representations or warranties in Sections 1(j) or
3(a) of Exhibit III is not true with respect to any Pool Receivable, the Seller
shall be deemed to have received on such day a Collection of the full
Outstanding Balance of such Pool Receivable and shall, subject to
Section 1.4(e)(v), (x) if such day is not a Termination Day, hold any and all
such amounts in trust for the benefit of the Purchasers and their assigns and,
on the following Settlement Date, apply such amounts in accordance with this
Section 1.4 or (y) if such day is a Termination Day, within two (2) Business
Days, pay any and all such amounts in respect thereof to a Lock-Box Account for
the benefit of the Purchasers and their assigns and for application pursuant to
this Section 1.4 (Collections deemed to have been received pursuant to Sections
1.4(e)(i) or (ii) are hereinafter sometimes referred to as “Deemed
Collections”);

(iii) except as provided in Sections 1.4(e)(i) or (ii) or as otherwise required
by applicable Law, the relevant Contract or the applicable Eligible Supporting
Letter of Credit, all Collections received from a Payment Obligor of any
Receivable shall be applied to the Receivables of the applicable Obligor in the
order of the age of such Receivables, starting with the oldest such Receivable,
unless otherwise specified by the applicable Obligor;

(iv) if and to the extent the Administrator, any Purchaser Agent or any
Purchaser shall be required for any reason to pay over to an Obligor (or any
trustee, receiver, custodian or similar official in any Insolvency Proceeding)
any amount received by it hereunder, such amount shall be deemed not to have
been so received by such Person but rather to have been retained by the Seller
and, accordingly, such Person shall have a claim against the Seller for such
amount, payable when and to the extent that any distribution from or on behalf
of such Obligor is made in respect thereof;

(v) if at any time before the Facility Termination Date the Seller is deemed to
have received any Deemed Collection under Sections 1.4(e)(i) and (ii), so long
as no Termination Day then exists, the Seller may satisfy its obligation to
deliver the amount of such Deemed Collections to a Lock-Box Account by instead
recalculating (or being deemed to have recalculated) the Purchased Interest by
decreasing the Net Receivables Pool Balance by the amount of such Deemed
Collections, so long as such adjustment does not cause the Purchased Interest to
exceed 100%; and

(vi) if at any time the Seller satisfies in full its obligations hereunder with
respect to Deemed Collections (whether by payment to a Lock-Box Account and/or
by reducing the Net Receivables Pool Balance), the Administrator (on behalf of
the Purchaser Agents and the Purchasers) shall reconvey to the Seller its
interest in the Pool Receivable(s) to which such Deemed Collection relates,
without recourse and without any representation or warranty except that such
Pool Receivable is free and clear of liens, security interests, charges and
encumbrances created by the Administrator and thereafter the Seller shall not
sell any interest in such Receivable to the Administrator (on behalf of the
Purchaser Agents and the Purchasers).

 

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(f) If at any time the Seller wishes to cause the reduction of Aggregate Capital
the Seller may do so as follows:

(i) the Seller shall deliver to the Administrator, each Purchaser Agent and the
Servicer a Paydown Notice at least two Business Days prior to the date of such
reduction for any reduction of the Aggregate Capital, and each such Paydown
Notice shall include, among other things, the amount of such proposed reduction
and the proposed date on which such reduction will commence;

(ii) on the proposed date of the commencement of such reduction and on each day
thereafter, the Servicer shall cause Collections not to be reinvested until the
amount thereof not so reinvested shall equal the desired amount of reduction;
and

(iii) the Servicer shall hold (or cause the Seller to set aside and hold) such
Collections in trust for the benefit of each Purchaser ratably according to its
Capital, for payment to each such Purchaser (or its related Purchaser Agent for
the benefit of such Purchaser) on the date specified in the Paydown Notice (or
such other date as agreed to by the Administrator) and the Aggregate Capital
(together with the Capital of each Purchaser) shall be deemed reduced in the
amount to be paid to such Purchaser (or its related Purchaser Agent for the
benefit of such Purchaser) only when in fact finally so paid;

provided, that:

(A) the amount of any such reduction (if not a reduction to zero) shall be an
integral multiple of $100,000; and

(B) with respect to any Portion of Capital, the Seller shall choose a reduction
amount, and the date of commencement thereof, so that to the extent practicable
such reduction shall commence and conclude in the same Yield Period.

Section 1.5 Fees. The Seller shall pay, or cause to be paid, to each Purchaser
Agent for the benefit of the Purchasers and Liquidity Providers in the related
Purchaser Group in accordance with the provisions set forth in Section 1.4(d)
certain fees in the amounts and on the dates set forth in the fee letter
agreement, dated the Closing Date, among the Seller, the Administrator and the
Purchaser Agents (as any such fee letter agreement may be amended, restated,
supplemented or otherwise modified from time to time, the “Fee Letter”).

Section 1.6 Payments and Computations, Etc.

(a) All amounts to be paid or deposited by the Seller or the Servicer hereunder
or under any other Transaction Document shall be made without reduction for
offset or counterclaim and shall be paid or deposited no later than 2:00 p.m.
(New York City time) on the day when due in same day funds to the account for
each Purchaser maintained by the applicable Purchaser Agent (or such other
account as may be designated from time to time by such Purchaser Agent to the
Seller and the Servicer). All amounts received after 2:00 p.m. (New York City
time) will be deemed to have been received on the next Business Day.

 

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(b) The Seller or the Servicer, as the case may be, shall, to the extent
permitted by law, pay interest on any amount (other than Capital) not paid or
deposited by the Seller or the Servicer, as the case may be, when due hereunder
or under the Fee Letter (without regard to whether Collections or other funds
are available to make any such payment or deposit), at a rate equal to the
Default Rate, payable on demand.

(c) All computations of interest under Section 1.6(b) and all computations of
Discount, Fees and other amounts hereunder shall be made on the basis of a year
of 360 (or 365 or 366, as applicable, with respect to Discount or other amounts
calculated by reference to the Base Rate) days for the actual number of days
elapsed. Whenever any payment or deposit to be made hereunder shall be due on a
day other than a Business Day, such payment or deposit shall be made on the next
Business Day and such extension of time shall be included in the computation of
such payment or deposit.

Section 1.7 Increased Costs Generally; Capital Requirements; Reserves on LIBOR
Market Index Rate Purchases. (a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Affected
Person (other than any reserve requirement contemplated by Section 1.7(e));

(ii) subject any Affected Person to any Tax of any kind whatsoever with respect
to this Agreement, any Letter of Credit, any participation in a Letter of Credit
or any Purchase made by it with respect to which Discount is computed by
reference to the LIBOR Market Index Rate, or change the basis of taxation of
payments to such Affected Person in respect thereof (except for Taxes described
in clauses (c) through (e) of the definition of Excluded Taxes, Indemnified
Taxes or Other Taxes covered by Section 1.9 and the imposition of, or any change
in the rate of, any Excluded Tax payable by such Person); or

(iii) impose on any Purchaser or the London interbank market any other
condition, cost or expense affecting this Agreement or Purchases made by such
Affected Person with respect to which Discount is computed by reference to the
LIBOR Market Index Rate or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Affected Person of making or maintaining any Purchase the Discount on which is
determined by reference to the LIBOR Market Index Rate (or of maintaining its
obligation to make any such Purchases), or to increase the cost to such
Purchaser of participating in, issuing or maintaining any Letter of Credit (or
of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the

 

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amount of any sum received or receivable by such Affected Person hereunder
(whether of Capital, Discount, Fees or any other amount) then, upon request of
such Affected Person, the Seller will pay to such Affected Person such
additional amount or amounts as will compensate such Affected Person for such
additional costs incurred or reduction suffered.

(b) If any Affected Person determines that any Change in Law affecting such
Affected Person or any Lending Office of such Affected Person or such Affected
Person’s holding company, if any, regarding capital requirements or liquidity
requirements has or would have the effect of reducing the rate of return on such
Affected Person’s capital or on the capital of such Affected Person’s holding
company, if any, as a consequence of this Agreement or any Program Support
Agreement, the existence of any Commitment, LC Sublimit Commitment or commitment
under a Program Support Agreement of such Affected Person, or participations in
Letters of Credit held by such Affected Person or Letters of Credit issued by
the LC Bank, to a level below that which such Affected Person or such Affected
Person’s holding company could have achieved but for such Change in Law (taking
into consideration such Affected Person’s policies and the policies of such
Affected Person’s holding company with respect to capital adequacy), then from
time to time the Seller will pay to such Affected Person such additional amount
or amounts as will compensate such Affected Person or such Affected Person’s
holding company for any such reduction suffered.

(c) A certificate of an Affected Person setting forth the amount or amounts
necessary to compensate such Affected Person or its holding company, as the case
may be, as specified in subsection (a) or (b) of this Section and delivered to
the Seller shall be conclusive absent manifest error. The Seller shall pay such
Affected Person the amount shown as due on any such certificate within ten days
after receipt thereof.

(d) Failure or delay on the part of any Affected Person to demand compensation
pursuant to the foregoing provisions of this Section shall not constitute a
waiver of such Affected Person’s right to demand such compensation, provided
that the Seller shall not be required to compensate an Affected Person pursuant
to the foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than nine months prior to the date that such Affected
Person notifies the Seller of the Change in Law giving rise to such increased
costs or reductions and of such Affected Person’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).

(e) The Seller shall pay to each Affected Person, as long as such Affected
Person shall be required to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency funds or deposits (currently
known as “Eurocurrency liabilities”), additional discount or interest on the
portion of the Purchased Interest (or any interest therein) acquired or
maintained by such Affected Person with respect to which Discount is computed by
reference to the LIBOR Market Index Rate equal to the actual costs of such
reserves allocated to such portion of the Purchased Interest (or interest
therein) by such Affected Person (as determined by such Affected Person in good
faith, which determination shall be conclusive), which shall be due and payable
on each date on which Discount is payable on the Purchased

 

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Interest, provided the Seller shall have received at least ten days’ prior
notice (with a copy to the Administrator) of such additional discount or
interest from such Affected Person. If an Affected Person fails to give notice
ten days prior to the relevant Settlement Date, such additional discount or
interest shall be due and payable ten days from receipt of such notice.

Section 1.8 Funding Losses. Upon demand of any Affected Person (with a copy to
the Administrator) from time to time, the Seller shall promptly compensate such
Affected Person for and hold such Affected Person harmless from any calculated
loss, cost or expense incurred by it as a result of:

(i) any continuation, conversion, payment or prepayment of any Portion of
Capital (other than a Portion of Capital with respect to which Discount is
computed by reference to the Base Rate) on a day other than the last day of the
related tranche period therefor (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise); or

(ii) the funding or maintaining or any Portion of Capital (other than a Portion
of Capital with respect to which Discount is computed by reference to the Base
Rate) failing to occur on the date specified therefor (for a reason other than
an Affected Person’s breach);

including any loss of anticipated profits (but excluding any foregone Program
Fees (as defined in the Fee Letter)) and any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Portion of
Capital or from fees payable to terminate the deposits from which such funds
were obtained.

Section 1.9 Taxes. The Seller agrees that:

(a) Any and all payments by the Seller to or for the account of any Affected
Person with respect to its Purchases or which arise by reason of the execution,
delivery or performance of the Transaction Documents shall be made free and
clear of and without deduction for any Taxes or Other Taxes, except as required
by applicable Law. If the Seller shall be required by Law to deduct any
Indemnified Taxes or Other Taxes from or in respect of any sum payable hereunder
to any Affected Person, then (A) the sum payable shall be increased by the
amount necessary to yield to such Person (after payment of all Taxes) an amount
equal to the sum it would have received had no such deductions been made,
(B) the Seller shall make such deductions, and (C) the Seller shall pay the
amount deducted to the relevant taxation authority or other authority in
accordance with applicable Law. Further, if the Seller is required by Law to
deduct any Taxes other than Indemnified Taxes or Other Taxes from or in respect
of any sum payable hereunder to any Affected Person, then (A) Seller shall make
such deductions, (B) the Seller shall pay the amount deducted to the relevant
Governmental Authority or other authority in accordance with applicable Law, and
(C) the amounts so deducted and paid to the relevant taxation authority shall be
treated under this Agreement as made to such Affected.

(b) Whenever any Indemnified Taxes or Other Taxes are payable herunder by the
Seller to an Affected Person, as promptly as possible thereafter, the Seller
shall send to the Administrator for its own account or for the account of the
applicable Affected Person, a

 

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certified copy of an original official receipt showing payment thereof or such
other evidence of such payment as may be available to the Seller and acceptable
to the Governmental Authority having jurisdiction over such Person. If the
Seller fails to pay any Indemnified Taxes or Other Taxes when due to the
appropriate Governmental Authority or fails to remit to the Administrator the
required receipts or other required documentary evidence, the Seller shall
indemnify the Administrator and/or any other Affected Person, as applicable, for
any incremental Taxes, interest or penalties that may become payable by such
party as a result of any such failure.

(c) The Seller shall indemnify each Affected Person, within twenty Business Days
after written demand therefor, for the full amount of any Indemnified Taxes and
Other Taxes paid by such Affected Person on or with respect to any payment by or
on account of any obligation of the Seller hereunder (including Indemnified
Taxes imposed or asserted on or attributable to amounts payable under this
Section 1.9). Such demand shall be made as promptly as practicable, but in any
event within ninety days after such Affected Person obtains actual knowledge of
such event; provided, however, that if any Affected Person fails to make such
demand within ninety days after such Affected Person obtains knowledge of such
event, such Affected Person shall, with respect to compensation payable in
respect of such event, not be entitled to compensation in respect of the costs
and losses incurred between the 90th day after such Affected Person obtains
actual knowledge of such event and the date such Affected Person makes such
demand. None of Sections 1.7, 3.1, 3.2 or 6.4(a) shall apply to Taxes, which
shall be governed exclusively by this Section 1.9.

(d) If an Affected Person determines, in its sole discretion, exercised in good
faith, that it has received a refund or credit of any Taxes or Other Taxes as to
which it has been indemnified by the Seller, it shall pay over such refund or
credit to the Seller (but only to the extent of indemnity payments made, or
additional amounts paid, by the Seller under this Section 1.9 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of such Affected Person and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund net of
any applicable Taxes payable in respect of such interest); provided, that the
Seller agrees to repay each such Affected Person, within ten Business Days after
the request of such Affected Person, the amount paid over to the Seller (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event such Affected Person is required to repay such refund to
such Governmental Authority. Notwithstanding anything to the contrary, in no
event will any Affected Person be required to pay any amount to the Seller the
payment of which would place such Affected Person in a less favorable net
after-Tax position than such Affected Person would have been in if the Taxes or
Other Taxes subject to indemnification and giving rise to such refund had not
been deducted, withheld or otherwise imposed and the indemnification payments or
additional amounts with respect to such Taxes or Other Taxes had never been
paid. This Section 1.9 shall not be construed to require any Affected Person to
make available its Tax returns (or any other information relating to its Taxes
which it deems confidential) to the Seller or any other Person.

(e) (1) Each Affected Person shall deliver to the Seller and to the
Administrator, on the Closing Date (or, if later, on the date on which it
becomes an Affected Person), or at the time or times prescribed by applicable
Laws, or when reasonably requested by the Seller or the

 

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Administrator, such properly completed and executed documentation prescribed by
applicable Laws or by the relevant Governmental Authority of any jurisdiction
and such other reasonably requested information as will permit the Seller or the
Administrator, as the case may be, to determine (A) whether or not payments made
hereunder are subject to Taxes, (B) if applicable, the required rate of
withholding or deduction, and (C) such Affected Person’s entitlement to any
available exemption from, or reduction of, applicable Taxes in respect of all
payments to be made to such Affected Person by the Seller pursuant to this
Agreement or otherwise to establish such Affected Person’s status for
withholding Tax purposes in the applicable jurisdiction.

(2) Without limiting the generality of the foregoing:

(A) Affected Person that is a “United States Person” within the meaning of
Section 7701(a)(30) of the Code, and not an exempt recipient described in
Section 6049(b)(4) of the Code, shall deliver to the Seller and the
Administrator executed originals of IRS Form W-9 or such other documentation or
information prescribed by applicable Laws or reasonably requested by the Seller
or the Administrator as will enable the Seller or the Administrator, as the case
may be, to determine whether or not such Affected Person is subject to backup
withholding or information reporting requirements; and

(B) each Affected Person that is organized under the Laws of a jurisdiction
other than the United States (including each State thereof and the District of
Columbia) (a “Foreign Affected Person”) that is entitled under the Code or any
applicable treaty to an exemption from or reduction of withholding tax with
respect to payments hereunder shall deliver to the Seller and the Administrator
(in such number of copies as shall be reasonably requested by the Seller or the
Administrator) on or prior to the date on which such Foreign Affected Person
becomes an Affected Person with respect to this Agreement (and from time to time
thereafter upon the request of the Seller or the Administrator, but only if such
Foreign Purchaser is legally entitled to do so), whichever of the following is
applicable

(I) executed originals of IRS Form W-8BEN claiming eligibility for benefits of
an income Tax treaty to which the United States is a party,

(II) executed originals of IRS Form W-8ECI,

(III) executed originals of IRS Form W-8IMY and all required supporting
documentation,

(IV) in the case of a Foreign Affected Person claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate (a “U.S. Tax Compliance Certificate” in the form contained in Annex
H) to the effect that such Foreign Affected Person is not (A) a “bank” within
the meaning of section 881(c)(3)(A) of the Code,

 

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(B) a “10 percent shareholder” of the Seller within the meaning of section
881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in
section 881(c)(3)(C) of the Code, and (y) executed originals of IRS Form W-8BEN,
or

(V) executed originals of any other form prescribed by applicable Laws as a
basis for claiming exemption from or a reduction in United States Federal
withholding tax together with such supplementary documentation as may be
prescribed by applicable Laws to permit the Seller or the Administrator to
determine the withholding or deduction required to be made.

(C) If a payment made hereunder to any Affected Person would be subject to U.S.
federal withholding Tax imposed by FATCA if such Affected Person were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Person
(or the Purchaser Agent acting on its behalf) shall deliver to the Seller and
the Administrator at the time or times prescribed by Law and at such time or
times reasonably requested by the Seller or the Administrator such documentation
prescribed by applicable Law and such additional documentation reasonably
requested by the Seller or the Administrator as may be necessary for the Seller
or the Administrator to comply with its obligations under FATCA and to determine
that such Affected Person has complied with such Affected Person’s obligations
under FATCA or to determine the amount to deduct and withhold from such payment.
Solely for purposes of this clause (C), “FATCA” shall include any amendments
made to FATCA after the Closing Date.

(3) Each Affected Person shall promptly notify the Seller and the Administrator
of any change in circumstances which would modify or render invalid any claimed
exemption or reduction.

Section 1.10 Mitigation; Replacement of Purchasers. (a) Any Affected Person
claiming any additional amounts payable pursuant to this Section 1.10 agrees to
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its lending office if the
making of such a change would avoid the need for, or reduce the amount of, any
such additional amounts that may thereafter accrue and would not, in the
reasonable judgment of such Affected Person, be otherwise disadvantageous to
such Affected Person.

(b) If any Affected Person requests compensation under Section 1.7, or if the
Seller is required to pay any additional amount to any Affected Person or any
Governmental Authority for the account of any Affected Person pursuant to
Section 1.9, or if in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions hereof as
contemplated by Section 6.1, the consent of the Majority Purchaser Agents shall
have been obtained but the consent of one or more of such other Purchasers or
Purchaser Agents whose consent is required shall not have been obtained, or if
any other circumstance

 

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exists hereunder that gives the Seller the right to replace a Purchaser Agent as
a party hereto, then the Seller may, at its sole expense and effort, upon notice
to the Purchaser Agent for such Affected Person and the Administrator, require
such Affected Person (or, in the case of an Affected Person not party to this
Agreement, require the Purchaser to which such Affected Person is related),
together with all other Purchasers in its related Purchaser Group and its
related Purchaser Agent, to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in, and consents required by,
Section 6.3), all of its interests, rights and obligations under this Agreement
and the related Transaction Documents to an assignee that shall assume such
obligations (which assignee may be another Purchaser, if such Purchaser accepts
such assignment), provided that:

(i) such Affected Person shall have received payment of an amount equal to 100%
of its outstanding Capital, accrued Discount thereon, accrued Fees and all other
amounts payable to it hereunder and under the other Transaction Documents
(including any amounts under Section 1.8) from the assignee (to the extent of
such outstanding Capital, Discount and Fees) or the Seller (in the case of all
other amounts);

(ii) in the case of any such assignment resulting from a claim for compensation
under Section 1.7 or payments required to be made pursuant to Section 1.9, such
assignment will result in a reduction in such compensation or payments
thereafter; and

(iii) such assignment does not conflict with applicable Laws.

A Purchaser shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Purchaser or otherwise, the
circumstances entitling the Seller to require such assignment and delegation
cease to apply. In addition, if after giving effect to any assignment or
assignments pursuant to this Section 1.10(b), the Person then serving as
Administrator is party to this Agreement solely in its capacity as
Administrator, the Person then serving as Administrator may, upon written notice
to the Seller, resign immediately with immediate effect, notwithstanding
anything to the contrary contained in this Agreement.

Section 1.11 Inability to Determine the LIBOR Market Index Rate. (a) If the
Administrator (or any Purchaser Agent) determines before the first day of any
Yield Period (which determination shall be final and conclusive) that, by reason
of circumstances affecting the interbank eurodollar market generally
(i) deposits in Dollars (in the relevant amounts for such Yield Period) are not
being offered to banks in the interbank eurodollar market for such Yield Period,
(ii) adequate means do not exist for ascertaining the LIBOR Market Index Rate
for such Yield Period or (iii) the LIBOR Market Index Rate does not accurately
reflect the cost to any Purchaser (as determined by the related Purchaser or the
applicable Purchaser Agent) of maintaining any Portion of Capital during such
Yield Period, then the Administrator or such Purchaser Agent shall give notice
thereof to the Seller. Thereafter, until the Administrator or such Purchaser
Agent notifies the Seller that the circumstances giving rise to such suspension
no longer exist, (a) no Portion of Capital shall be funded at the Alternate Rate
determined by reference to the LIBOR Market Index Rate and (b) the Discount for
any outstanding Portion of Capital then funded at the Alternate Rate determined
by reference to the LIBOR Market Index Rate shall, on the last day of the then
current Yield Period, be converted to the Alternate Rate determined by reference
to the Base Rate.

 

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(b) If, on or before the first day of any Yield Period, the Administrator shall
have been notified by any Affected Person that such Affected Person has
determined (which determination shall be final and conclusive) that any
enactment, promulgation or adoption of or any change in any applicable law, rule
or regulation, or any change in the interpretation or administration thereof by
a Governmental Authority charged with the interpretation or administration
thereof, or compliance by such Affected Person with any guideline, request or
directive (whether or not having the force of law) of any such Governmental
Authority shall make it unlawful or impossible for such Affected Person to fund
or maintain any Portion of Capital at the Alternate Rate and based upon the
LIBOR Market Index Rate, the Administrator shall notify the Seller thereof. Upon
receipt of such notice, until the Administrator notifies the Seller that the
circumstances giving rise to such determination no longer apply, (a) no Portion
of Capital shall be funded at the Alternate Rate determined by reference to the
LIBOR Market Index Rate and (b) the Discount for any outstanding Portion of
Capital then funded at the Alternate Rate determined by reference to the LIBOR
Market Index Rate shall be converted to the Alternate Rate determined by
reference to the Base Rate either (i) on the last day of the then current Yield
Period if such Affected Person may lawfully continue to maintain such Portion of
Capital at the Alternate Rate determined by reference to the LIBOR Market Index
Rate to such day, or (ii) immediately, if such Affected Person may not lawfully
continue to maintain such Portion of Capital at the Alternate Rate determined by
reference to the LIBOR Market Index Rate to such day.

Section 1.12 Letters of Credit. On the terms and subject to the conditions
hereof, the LC Bank shall issue Letters of Credit on behalf of Seller (and, if
applicable, on behalf of, or for the account of, any Originator or any Affiliate
of an Originator in favor of such beneficiaries as the Seller may elect);
provided, that the LC Bank will not be required to issue or cause to be issued
any Letters of Credit to the extent that after giving effect thereto the
issuance of such Letters of Credit would then cause (a) the sum of (i) the
Aggregate Capital plus (ii) the LC Participation Amount to exceed the Purchase
Limit or (b) the LC Participation Amount to exceed the aggregate of the LC
Sublimit Commitments of the LC Bank and the LC Participants. All amounts drawn
upon Letters of Credit shall accrue Discount. Letters of Credit that have not
been drawn upon shall not accrue Discount.

Section 1.13 Issuance of Letters of Credit.

(a) The Seller may request the LC Bank, upon two Business Days’ prior written
notice submitted on or before 12:00 p.m., New York time, to issue a Letter of
Credit by delivering to the Administrator a Letter of Credit Application and a
Purchase Notice, in the form of Annex B hereto, in each case completed to the
satisfaction of the Administrator and the LC Bank and such other certificates,
documents and other papers and information as the Administrator may reasonably
request. The Seller also has the right to give instructions and make agreements
with respect to any Letter of Credit Application and the disposition of
documents, and to agree with the Administrator upon any amendment, extension or
renewal of any Letter of Credit.

 

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(b) Each Letter of Credit shall have an expiry date not later than twelve months
after such Letter of Credit’s date of issuance, extension or renewal, as the
case may be, and in no event later than the date that is twelve months after the
date in clause (a) of the definition of “Facility Termination Date.” Each Letter
of Credit shall be subject either to the Uniform Customs and Practice for
Documentary Credits (2007 Revision), International Chamber of Commerce
Publication No. 600, and any amendments or revisions thereof adhered to by the
LC Bank or the International Standby Practices (ISP98-International Chamber of
Commerce Publication Number 590), and any amendments or revisions thereof
adhered to by the LC Bank.

(c) The Administrator shall promptly notify the LC Bank and LC Participants, at
such Person’s respective address for notices hereunder, of the request by the
Seller for a Letter of Credit hereunder, and shall provide the LC Bank and LC
Participants with the Letter of Credit Application delivered to the
Administrator by the Seller pursuant to Section 1.13(a) above, by the close of
business on the day received or if received on a day that is not a Business Day
or on any Business Day after 12:00 p.m. New York time on such day, on the next
Business Day.

Section 1.14 Requirements For Issuance of Letters of Credit. The Seller hereby
authorizes and directs the LC Bank to name the Seller or any Originator or any
Affiliate of any Originator as the “Applicant” of each Letter of Credit, in each
case as set forth in the applicable Letter of Credit Application.

Section 1.15 Disbursements, Reimbursement.

(a) Immediately upon the issuance of each Letter of Credit, each LC Participant
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the LC Bank a participation in such Letter of Credit and each
drawing thereunder in an amount equal to such LC Participant’s Commitment
Percentage of its Purchaser Group’s Pro Rata Share of the face amount of such
Letter of Credit and the amount of such drawing, respectively.

(b) In the event of any request for a drawing under a Letter of Credit by the
beneficiary or transferee thereof, the LC Bank will promptly notify the
Administrator, each Purchaser Agent and the Seller of such request. On the date
that an amount is paid by the LC Bank under any Letter of Credit (each such
date, a “Drawing Date”), the Seller shall be deemed to have requested that a
Funded Purchase be made by the Purchasers in the Purchaser Group for the LC Bank
and the LC Participants to be disbursed on the Drawing Date under such Letter of
Credit in accordance with Section 1.1(b) and, if the conditions for making a
Purchase are satisfied on such Drawing Date, the applicable Purchasers shall
make a Funded Purchase in accordance with (and subject to the terms of),
Section 1.1(b). The proceeds of each such Funded Purchase shall be delivered
directly to the Administrator to be immediately distributed to by the
Administrator to the LC Bank. Any notice given by the LC Bank pursuant to this
Section 1.15 may be oral if immediately confirmed in writing; provided that the
lack of any such written confirmation shall not affect the conclusiveness or
binding effect of the oral notice.

 

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(c) If any Funded Purchase described in preceding clause (b) cannot be made
because the conditions precedent to such Purchase are not satisfied, the Seller
shall (out of its own funds available therefor) reimburse the LC Bank (such
obligation to reimburse the LC Bank, a “Reimbursement Obligation”) by 12:00
p.m., New York time on the applicable Drawing Date (or, if notice of the Drawing
Date is not received by the Seller by 10:00 a.m., New York time on the Drawing
Date, by 12:00 p.m. on the first Business Day after such notice is received by
the Seller) in an amount equal to the positive difference between the amount so
paid by the LC Bank and the amount of available funds on deposit in the LC
Collateral Account. Available funds on deposit in the LC Collateral Account
shall be applied by the Administrator to satisfy the Reimbursement Obligation in
respect of such drawing or a portion thereof. In the event the Seller fails to
so reimburse the LC Bank for the full amount of any drawing under any Letter of
Credit when and as required hereunder, the LC Bank will promptly notify each LC
Participant thereof whereupon (i) each LC Participant shall, upon receipt of any
such notice, make available to the LC Bank a participation advance (each of
which shall be deemed to be a Funded Purchase) in an amount in immediately
available funds equal to its Commitment Percentage of its Purchaser Group’s Pro
Rata Share of the amount of the drawing and (ii) the LC Bank shall be deemed to
have made a participation advance (which advance shall be deemed to be a Funded
Purchase) in an amount equal to its Commitment Percentage of its Purchaser
Group’s Pro Rata Share of the amount of the drawing. All such participation
advances and deemed participation advances by the LC Participants and the LC
Bank shall accrue Discount at the Base Rate from the applicable Drawing Date
until such participation advances are repaid in full by the Seller. If any LC
Participant so notified fails to make available to the LC Bank the amount of
such LC Participant’s share of such amount by no later than 2:00 p.m., New York
time on the Drawing Date, then interest shall accrue on such LC Participant’s
obligation to make such payment, from the Drawing Date to the date on which such
LC Participant makes such payment (i) at a rate per annum equal to the Federal
Funds Rate during the first three days following the Drawing Date and (ii) at a
rate per annum equal to the rate applicable to Capital on and after the fourth
day following the Drawing Date. The LC Bank will promptly give notice of the
occurrence of the Drawing Date, but failure of the LC Bank to give any such
notice on the Drawing Date or in sufficient time to enable any LC Participant to
effect such payment on such date shall not relieve such LC Participant from its
obligation under this Section 1.15(c); provided that such LC Participant shall
not be obligated to pay interest as provided in clauses (i) and (ii) above until
and commencing from the date of receipt of notice from the LC Bank or the
Administrator of a drawing. Each LC Participant’s commitment hereunder shall
continue until the Final Termination Date. No participation advance by any LC
Participant shall reduce the then outstanding Reimbursement Obligation owed by
the Seller to the LC Bank.

Section 1.16 Repayment of Participation Advances.

(a) Upon (and only upon) receipt by the LC Bank for its account of immediately
available funds from or for the account of the Seller in reimbursement of any
payment made by the LC Bank under a Letter of Credit with respect to which any
LC Participant has made a

 

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participation advance to the LC Bank, the LC Bank (or the Administrator on its
behalf) will pay to each LC Participant, in the same funds as those received by
the LC Bank, its ratable share (based on the outstanding drawn amounts funded by
each such LC Participant in respect of such Letter of Credit) of such funds; it
being understood, that the LC Bank shall retain a ratable amount of such funds
that were not the subject of any payment in respect of such Letter of Credit by
any LC Participant.

(b) If the LC Bank is required at any time to return to the Seller, or to a
trustee, receiver, liquidator, custodian, or any official in any Insolvency
Proceeding, any portion of the payments made by the Seller to the LC Bank
pursuant to this Agreement in reimbursement of a payment made under the Letter
of Credit or interest or fee thereon, each LC Participant shall, on demand of
the LC Bank, forthwith return to the LC Bank its Commitment Percentage of its
Purchaser Group’s Pro Rata Share of any amounts so returned by the LC Bank plus
interest at the Federal Funds Rate, from the date the payment was first made to
such LC Participant through, but not including, the date the payment is returned
by such LC Participant.

Section 1.17 Documentation. The Seller agrees to be bound by (i) the terms of
the Letter of Credit Application and (ii) by the LC Bank’s written regulations
and customary practices relating to letters of credit. In the event of a
conflict between the Letter of Credit Application and this Agreement, this
Agreement shall govern. It is understood and agreed that, except in the case of
gross negligence or willful misconduct by the LC Bank, the LC Bank shall not be
liable for any error, negligence and/or mistakes, whether of omission or
commission, in following the Seller’s instructions or those contained in the
Letters of Credit or any modifications, amendments or supplements thereto.

Section 1.18 Determination to Honor Drawing Request. In determining whether to
honor any request for drawing under any Letter of Credit by the beneficiary
thereof, the LC Bank shall be responsible only to determine that the documents
and certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit and that any other drawing condition appearing on the face of
such Letter of Credit has been satisfied in the manner so set forth.

Section 1.19 Nature of Participation and Reimbursement Obligations. Each LC
Participant’s obligation in accordance with this Agreement to make participation
advances as a result of a drawing under a Letter of Credit, and the obligations
of the Seller to reimburse the LC Bank upon a draw under a Letter of Credit,
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Article I under all circumstances,
including the following circumstances:

(a) any set-off, counterclaim, recoupment, defense or other right which such LC
Participant may have against the LC Bank, the Administrator, the Purchasers, the
Purchaser Agents, the Seller or any other Person for any reason whatsoever;

 

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(b) the failure of the Seller or any other Person to comply with the conditions
set forth in this Agreement for the making of Purchases, reinvestments, requests
for Letters of Credit or otherwise, it being acknowledged that such conditions
are not required for the making of participation advances hereunder;

(c) any lack of validity or enforceability of any Letter of Credit or any
set-off, counterclaim, recoupment, defense or other right which Seller or any
Originator on behalf of which a Letter of Credit has been issued may have
against the LC Bank, the Administrator, any Purchaser, or any other Person for
any reason whatsoever;

(d) any claim of breach of warranty that might be made by the Seller, the LC
Bank or any LC Participant against the beneficiary of a Letter of Credit, or the
existence of any claim, set-off, defense or other right which the Seller, the LC
Bank or any LC Participant may have at any time against a beneficiary, any
successor beneficiary or any transferee of any Letter of Credit or the proceeds
thereof (or any Persons for whom any such transferee may be acting), the LC
Bank, any LC Participant, the Purchasers or Purchaser Agents or any other
Person, whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction (including any underlying transaction
between the Seller or any Subsidiaries of the Seller or any Affiliates of the
Seller and the beneficiary for which any Letter of Credit was procured);

(e) the lack of power or authority of any signer of, or lack of validity,
sufficiency, accuracy, enforceability or genuineness of, any draft, demand,
instrument, certificate or other document presented under any Letter of Credit,
or any such draft, demand, instrument, certificate or other document proving to
be forged, fraudulent, invalid, defective or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect, even if the
Administrator or the LC Bank has been notified thereof;

(f) payment by the LC Bank under any Letter of Credit against presentation of a
demand, draft or certificate or other document which does not comply with the
terms of such Letter of Credit other than as a result of the gross negligence or
willful misconduct of the LC Bank;

(g) the solvency of, or any acts or omissions by, any beneficiary of any Letter
of Credit, or any other Person having a role in any transaction or obligation
relating to a Letter of Credit, or the existence, nature, quality, quantity,
condition, value or other characteristic of any property or services relating to
a Letter of Credit;

(h) any failure by the LC Bank or any of the LC Bank’s Affiliates to issue any
Letter of Credit in the form requested by the Seller, unless the LC Bank has
received written notice from the Seller of such failure within three
(3) Business Days after the LC Bank shall have furnished the Seller a copy of
such Letter of Credit and such error is material and no drawing has been made
thereon prior to receipt of such notice;

 

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(i) any Material Adverse Effect on the Seller, any Originator or any Affiliates
thereof;

(j) any breach of this Agreement or any Transaction Document by any party
thereto;

(k) the occurrence or continuance of an Insolvency Proceeding with respect to
the Seller, any Originator or any Affiliate thereof;

(l) the fact that a Termination Event or an Unmatured Termination Event shall
have occurred and be continuing;

(m) the fact that this Agreement or the obligations of the Seller or the
Servicer hereunder shall have been terminated; and

(n) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing.

Section 1.20 [Reserved].

Section 1.21 Liability for Acts and Omissions. As between the Seller, on the one
hand, and the Administrator, the LC Bank, the LC Participants, the Purchasers
and the Purchaser Agents, on the other, the Seller assumes all risks of the acts
and omissions of, or misuse of any Letter of Credit by, the respective
beneficiaries of such Letter of Credit. In furtherance and not in limitation of
the respective foregoing, none of the Administrator, the LC Bank, the LC
Participants, the Purchasers or the Purchaser Agents shall be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the application for an
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged
(even if the LC Bank or any LC Participant shall have been notified thereof);
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) the failure of the beneficiary
of any such Letter of Credit, or any other party to which such Letter of Credit
may be transferred, to comply fully with any conditions required in order to
draw upon such Letter of Credit or any other claim of the Seller against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among the Seller and any beneficiary of any Letter of Credit or any
such transferee; (iv) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (v) errors in interpretation of technical
terms; (vi) any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any such Letter of Credit or of the
proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter
of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of the
Administrator, the LC Bank, the LC Participants, the Purchasers and the
Purchaser Agents, including any act or omission, whether rightful or wrongful,
of any present or

 

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future de jure or de facto Governmental Authority, and none of the above shall
affect or impair, or prevent the vesting of, any of the LC Bank’s rights or
powers hereunder. Nothing in the preceding sentence shall relieve the LC Bank
from liability for its gross negligence or willful misconduct, as determined by
a final non-appealable judgment of a court of competent jurisdiction, in
connection with actions or omissions described in such clauses (i) through
(viii) of such sentence. In no event shall the Administrator, the LC Bank, the
LC Participants, the Purchasers or the Purchaser Agents or their respective
Affiliates, be liable to the Seller or any other Person for any indirect,
consequential, incidental, punitive, exemplary or special damages or expenses
(including without limitation Attorney Costs), or for any damages resulting from
any change in the value of any property relating to a Letter of Credit.

Without limiting the generality of the foregoing, the Administrator, the LC
Bank, the LC Participants, the Purchasers and the Purchaser Agents and each of
its Affiliates: (i) may rely on any written communication believed in good faith
by such Person to have been authorized or given by or on behalf of the applicant
for a Letter of Credit; (ii) may honor any presentation if the documents
presented appear on their face to comply with the terms and conditions of the
relevant Letter of Credit; (iii) may honor a previously dishonored presentation
under a Letter of Credit, whether such dishonor was pursuant to a court order,
to settle or compromise any claim of wrongful dishonor, or otherwise, and shall
be entitled to reimbursement to the same extent as if such presentation had
initially been honored, together with any interest paid by the LC Bank or its
Affiliates; (iv) may honor any drawing that is payable upon presentation of a
statement advising negotiation or payment, upon receipt of such statement (even
if such statement indicates that a draft or other document is being delivered
separately), and shall not be liable for any failure of any such draft or other
document to arrive, or to conform in any way with the relevant Letter of Credit;
(v) may pay any paying or negotiating bank claiming that it rightfully honored
under the Laws or practices of the place where such bank is located; and
(vi) may settle or adjust any claim or demand made on the Administrator, the LC
Bank, the LC Participants, the Purchasers or the Purchaser Agents or their
respective Affiliates, in any way related to any order issued at the applicant’s
request to an air carrier, a letter of guarantee or of indemnity issued to a
carrier or any similar document (each an “Order”) and may honor any drawing in
connection with any Letter of Credit that is the subject of such Order,
notwithstanding that any drafts or other documents presented in connection with
such Letter of Credit fail to conform in any way with such Letter of Credit.

In furtherance and extension and not in limitation of the specific provisions
set forth above, any action taken or omitted by the LC Bank under or in
connection with any Letter of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith and without
gross negligence or willful misconduct, as determined by a final non-appealable
judgment of a court of competent jurisdiction, shall not put the LC Bank under
any resulting liability to the Seller, any LC Participant or any other Person.

 

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Section 1.22 Extension of Facility Termination Date. Seller may request the
extension of the then current Facility Termination Date by providing written
notice to the Administrator and each Purchaser Agent; provided such request is
made not less than 45 days prior to, the then current Facility Termination Date.
In the event that the Purchasers are all agreeable to such extension, the
Administrator shall so notify the Seller and the Servicer (it being understood
that the Purchasers may accept or decline such a request in their sole
discretion and on such terms as they may elect) not more than 45 days from the
date of the Seller’s written notice and the Seller, the Servicer, the
Administrator, the Purchaser Agents and the Purchasers shall enter into such
documents as the Purchasers may deem necessary or appropriate to reflect such
extension, and all reasonable costs and expenses incurred by the Purchasers, the
Administrator and the Purchaser Agents in connection therewith (including
Attorney Costs) shall be paid by the Seller. In the event any Purchaser declines
(or does not respond to) the request for such extension, (a) the Purchase Limit
shall be reduced by an amount equal to the Commitment of such Purchaser (and the
Commitment and LC Sublimit, if any, of such Purchaser shall be deemed to be
reduced to zero) and (b) such Purchaser (or the applicable Purchaser Agent on
its behalf) shall so notify the Administrator and the Administrator shall so
notify the Seller of such determination; provided, that the failure of the
Administrator to notify the Seller of the determination to decline such
extension shall not affect the understanding and agreement that the applicable
Purchasers shall be deemed to have refused to grant the requested extension in
the event the Administrator fails to affirmatively notify the Seller of their
agreement to accept the requested extension.

ARTICLE II

REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS

Section 2.1 Representations and Warranties; Covenants. Each of the Seller and
Targa hereby makes the representations and warranties set forth in Exhibit III
applicable to it and hereby agrees to perform and observe the covenants Exhibit
IV applicable to it.

Section 2.2 Termination Events. If any of the Termination Events set forth in
Exhibit V shall occur, the Administrator may (with the consent of the Majority
Purchaser Agents) or shall (at the direction of the Majority Purchaser Agents),
by notice to the Seller, declare the Facility Termination Date to have occurred
(in which case the Facility Termination Date shall be deemed to have occurred);
provided, that upon the occurrence of any event (without any requirement for the
passage of time or the giving of notice) described in clause (f) of Exhibit V,
the Facility Termination Date shall automatically occur. Upon any such
declaration, occurrence or deemed occurrence of the Facility Termination Date,
the Administrator, each Purchaser Agent and each Purchaser shall have, in
addition to the rights and remedies that they may have under this Agreement and
any Lock-Box Agreement, all other rights and remedies provided after default
under the UCC and under other applicable law, which rights and remedies shall be
cumulative.

 

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ARTICLE III

INDEMNIFICATION

Section 3.1 Indemnities by the Seller. Without limiting any other rights any
such Person may have hereunder or under applicable law, the Seller hereby
indemnifies and holds harmless the Administrator, each Purchaser Agent, each
Liquidity Provider, each Program Support Provider, each Purchaser, the LC Bank
and each LC Participant and their respective officers, directors, agents and
employees (each an “Indemnified Party”) from and against any and all damages,
losses, claims, liabilities, penalties, costs and expenses (including Attorney
Costs) (all of the foregoing collectively, the “Relevant Amounts”) at any time
imposed on or incurred by any Indemnified Party arising out of or otherwise
relating to any Transaction Document, the transactions contemplated thereby or
the acquisition of any portion of the Purchased Interest, or any action taken or
omitted by any of the Indemnified Parties (including any action taken by the
Administrator as attorney-in-fact for the Seller or any Originator hereunder or
under any other Transaction Document), whether arising by reason of the acts to
be performed by the Seller hereunder or otherwise, excluding Relevant Amounts to
the extent (a) such Relevant Amounts are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnified Party, (b) such Relevant
Amounts result from a claim brought by the Seller or another party to a
Transaction Document against an Indemnified Party for breach in bad faith of
such Indemnified Party’s obligations hereunder or under any other Transaction
Document, if the Seller or such other Person has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction, (c) due to the credit risk of an Obligor and for which
reimbursement would constitute recourse to any Originator, the Seller or the
Servicer for uncollectible Receivables or (d) such Relevant Amounts are in
respect of Taxes; provided, that nothing contained in this sentence shall limit
the liability of the Seller or the Servicer or limit the recourse of any
Indemnified Party to the Seller or the Servicer for any amounts otherwise
specifically provided to be paid by the Seller or the Servicer hereunder.
Without limiting the foregoing indemnification, but subject to the limitations
set forth in clauses (a), (b), (c) and (d) of the previous sentence, the Seller
shall indemnify each Indemnified Party for amounts (including losses in respect
of uncollectible Receivables, regardless, for purposes of these specific
matters, whether reimbursement therefor would constitute recourse to the Seller
or the Servicer) relating to or resulting from:

(a) the failure of any representation or warranty made or deemed made by the
Seller (or any employee, officer or agent of the Seller) under or in connection
with this Agreement or any other Transaction Document to have been true and
correct as of the date made or deemed made;

(b) the failure by the Seller to comply with any applicable Law, rule or
regulation with respect to any Receivable or the related Contract, or the
nonconformity of any Receivable or related Contract with any such applicable
law, rule or regulation;

 

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(c) (i) the failure of the Seller to vest and maintain vested in the
Administrator, for the benefit of the Purchaser Agents and the Purchasers, a
first priority perfected ownership or security interest in the Purchased
Interest and the property conveyed hereunder, free and clear of any Adverse
Claim or (ii) the unenforceability of any such interest;

(d) any commingling of funds to which the Administrator, any Purchaser Agent or
any Purchaser is entitled hereunder with any other funds;

(e) any failure of a Lock-Box Bank to comply in all material respects with the
terms of the applicable Lock-Box Agreement;

(f) any dispute, claim, offset or defense (other than discharge in bankruptcy of
the Obligor) of the Obligor to the payment of any Receivable (including a
defense based on such Receivable or the related Contract not being a legal,
valid and binding obligation of such Obligor enforceable against it in
accordance with its terms) or any other claim resulting from the sale or lease
of goods or the rendering of services related to such Receivable or the
furnishing or failure to furnish any such goods or services or relating to
collection activities (if such collection activities were performed by the
Seller or any of its Affiliates acting as the Servicer or by any agent or
independent contractor retained by the Seller or any of its Affiliates) with
respect to such Receivable;

(g) any failure of the Seller to perform its duties or obligations in accordance
with the provisions of this Agreement, any Contract or any other Transaction
Document to which it is a party;

(h) the use of proceeds of any Purchase or reinvestment or the issuance of any
Letter of Credit on behalf of Seller (and, if applicable, on behalf of, or for
the account of, any Originator);

(i) the transfer by the Seller or any Originator of any interest in any Pool
Receivable to any Person other than (i) the transfer of any Pool Receivable and
Related Security to the Administrator and the Purchasers pursuant to this
Agreement or to the Administrator and the Seller pursuant to the Sale Agreement
and (ii) the grant of a security interest to the Administrator pursuant to this
Agreement and to the Seller pursuant to the Sale Agreement;

(j) any Dilution;

(k) any suit or claim related to the Pool Receivables or any Transaction
Document (including, without limitation, any products liability, environmental
liability claim or personal injury or property damage suit arising out of or in
connection with the petrochemicals or other property, products or services that
are the subject of any Pool Receivable to the extent not covered pursuant to
other applicable provisions of this Agreement);

 

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(l) the failure or delay to provide any Obligor with an invoice or other
evidence of indebtedness; or

(m) the issuance of, or participation in, any Letter of Credit, other than as a
result of the wrongful dishonor by the LC Bank of a proper demand for payment
made under any Letter of Credit, except if such dishonor resulted from any act
or omission, whether rightful or wrongful, of any present or future de jure or
de facto Governmental Authority.

Section 3.2 Indemnities by the Servicer. Without limiting any other rights that
any Indemnified Party may have hereunder or under applicable law, rules or
regulations, the Servicer hereby agrees to indemnify each Indemnified Party from
and against any and all Relevant Amounts arising out of or resulting from
(whether directly or indirectly): (a) the failure of any representation or
warranty made or deemed made by the Servicer (or any of its officers) under or
in connection with this Agreement or any other Transaction Document to which it
is a party to have been true and correct as of the date made or deemed made,
(b) the failure by the Servicer to comply with any applicable Laws, rule or
regulation with respect to any Pool Receivable or the related Contract, (c) any
dispute, claim, offset or defense of an Obligor (other than as a result of
discharge in bankruptcy with respect to such Obligor) to the payment of any Pool
Receivable to the extent resulting from the failure of the Servicer to comply
with its obligations hereunder in respect of such Receivable or (d) any failure
of the Servicer to perform its duties or obligations in accordance with the
provisions hereof or any other Transaction Document to which it is a party.

ARTICLE IV

ADMINISTRATION AND COLLECTIONS

Section 4.1 Appointment of the Servicer.

(a) The servicing, administering and collection of the Pool Receivables shall be
conducted by the Person so designated from time to time as the Servicer in
accordance with this Section 4.1. Until the Administrator gives notice to Targa
(in accordance with this Section 4.1) of the designation of a new Servicer,
Targa is hereby designated as, and hereby agrees to perform the duties and
obligations of, the Servicer pursuant to the terms hereof. Upon the occurrence
of a Termination Event, the Administrator may (with the consent of the Majority
Purchaser Agents) or shall (at the direction of the Majority Purchaser Agents)
terminate Targa as Servicer and designate as Servicer any Person (including
itself) to succeed Targa or any successor Servicer, on the condition in each
case that any such Person so designated shall agree to perform the duties and
obligations of the Servicer pursuant to the terms hereof.

(b) Upon the designation of a successor Servicer as set forth in Section 4.1(a),
Targa agrees that it will terminate its activities as Servicer hereunder in a
manner that the Administrator determines will facilitate the transition of the
performance of such activities to the new Servicer,

 

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and Targa shall cooperate with and assist such new Servicer. Such cooperation
shall include access to and transfer of related records (including all
Contracts) and use by the new Servicer of all licenses (or the obtaining of new
licenses), hardware or software necessary or desirable to collect the Pool
Receivables and the Related Security.

(c) Targa acknowledges that, in making their decision to execute and deliver
this Agreement, the Administrator and each member in each Purchaser Group have
relied on Targa’s agreement to act as Servicer hereunder. Accordingly, Targa
agrees that it will not voluntarily resign as Servicer.

(d) The Servicer may delegate its duties and obligations hereunder to any
subservicer (each a “Sub-Servicer”); provided, that, in each such delegation:
(i) such Sub-Servicer shall agree in writing to perform the delegated duties and
obligations of the Servicer pursuant to the terms hereof, (ii) the Servicer
shall remain liable for the performance of the duties and obligations so
delegated, (iii) the Seller, the Administrator and each Purchaser Group shall
have the right to look solely to the Servicer for performance, (iv) the terms of
any agreement with any Sub-Servicer shall provide that such agreement shall
terminate upon the termination of the Servicer hereunder by giving notice of its
desire to terminate such agreement to the Servicer (and the Servicer shall
provide appropriate notice to each such Sub-Servicer) and (v) the Administrator
and the Majority Purchaser Agents shall have consented in writing in advance to
such delegation. For the avoidance of doubt, this Section 4.1(d) shall not apply
to any third party collection agency collecting Defaulted Receivables or other
third party servicer provider assisting in the servicing of the Defaulted
Receivables.

Section 4.2 Duties of the Servicer.

(a) The Servicer shall take or cause to be taken all such action as may be
necessary to administer and collect each Pool Receivable from time to time, all
in accordance with this Agreement and all applicable Laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy. The Servicer shall set aside (or cause the Seller
to set aside and hold) for the accounts of the Seller and each Purchaser Group
the amount of Collections to which each such Purchaser Group is entitled in
accordance with Article I hereof. The Servicer may, in accordance with the
Credit and Collection Policy, extend the maturity of any Pool Receivable and
extend the maturity or adjust the Outstanding Balance of any Defaulted
Receivable, as the Servicer may determine to be appropriate or as expressly
required under applicable Laws, rules or regulations or the applicable Contract;
provided, that for purposes of this Agreement: (i) such extension shall not, and
shall not be deemed to, change the number of days such Pool Receivable has
remained unpaid from the date of the original due date related to such Pool
Receivable unless such Pool Receivable has been cancelled and reissued pursuant
to the Credit and Collection Policy with appropriate Deemed Collections being
recorded pursuant to Section 1.4(e)(i) hereof and (ii) such extension or
adjustment shall not alter the status of such Pool Receivable as a Delinquent
Receivable or a Defaulted Receivable or limit the rights of any Purchaser, any
Purchaser Agent or the Administrator under this Agreement or any other
Transaction Document. Each Originator and the Seller shall deliver to the
Servicer and the Servicer shall hold for the benefit of the Seller and the
Administrator (individually and for the benefit of each Purchaser Group, in
accordance with their respective interests), all records and documents
(including computer tapes or disks) with respect to each Pool Receivable.

 

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(b) The Servicer shall, as soon as practicable following actual receipt of
collected funds, turn over to the Seller the collections of any indebtedness
owed to the Seller that is not a Pool Receivable less, if Targa or an Affiliate
thereof is not the Servicer, all reasonable and appropriate out-of-pocket costs
and expenses of such Servicer of servicing, collecting and administering such
collections. The Servicer, if other than Targa or an Affiliate thereof, shall,
as soon as practicable upon demand, deliver to the Seller all records in its
possession that evidence or relate to any indebtedness that is not a Pool
Receivable, and copies of records in its possession that evidence or relate to
any indebtedness that is a Pool Receivable.

(c) The Servicer’s obligations hereunder shall terminate on the Final
Termination Date.

After such termination, if Targa or an Affiliate thereof was not the Servicer on
the date of such termination, the Servicer shall promptly deliver to the Seller
all books, records and related materials that each Originator and the Seller
previously provided to the Servicer, or that have been obtained by the Servicer,
in connection with this Agreement.

Section 4.3 Lock-Box Account Arrangements. Prior to the Closing Date, the Seller
shall have entered into a Lock-Box Agreement with each Lock-Box Bank and
delivered executed counterparts of each to the Administrator. Until the
Administrator exercises control over the Lock-Box Accounts, all Collections on
the Pool Receivables held in the Lock-Box Accounts will either be retained in
the Lock-Box Accounts or transferred into the applicable Originator’s own
account. Upon the occurrence and during the continuation of a Termination Event,
the Administrator may (with the consent of the Majority Purchaser Agents) or
shall (upon the direction of the Majority Purchaser Agents) at any time
thereafter give notice to each Lock-Box Bank that the Administrator is
exercising its rights under the Lock-Box Agreements to do any or all of the
following: (a) to exercise its exclusive ownership and control of the Lock-Box
Accounts (for the benefit of the Purchaser Agents and the Purchasers) and to
exercise exclusive dominion and control over the funds deposited therein, (b) to
have the proceeds that are sent to the respective Lock-Box Accounts redirected
pursuant to the Administrator’s instructions rather than deposited in the
applicable Lock-Box Account, and (c) to take any or all other actions permitted
under the applicable Lock-Box Agreement. The Seller hereby acknowledges that the
Administrator shall have at all times exclusive control (for the benefit of the
Purchaser Agents and the Purchasers) of each Lock-Box Account and all proceeds
(including Collections) of all Pool Receivables on deposit therein and the
Seller hereby further agrees to take any action that the Administrator or any
Purchaser Agent may reasonably request to preserve and protect such control.
After exercising its control with respect to the Lock-Box Accounts, any proceeds
of Pool Receivables received by the Seller or the Servicer thereafter shall be
sent immediately to, or as otherwise instructed by, the Administrator. The
parties hereto hereby acknowledge that if at any time the Administrator
exercises its control of any Lock-Box Account, the Administrator shall not have
any rights to the funds therein in excess of the unpaid amounts due to the
Administrator, any member of any Purchaser Group, any Indemnified Party or
Affected Person or any other Person hereunder, and the Administrator shall
distribute or cause to be distributed such funds in accordance with Article I
(in each case as if such funds were held by the Servicer thereunder).

 

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Section 4.4 Enforcement Rights.

(a) At any time following the occurrence and during the continuation of a
Termination Event:

(i) the Administrator may direct Obligors to pay all amounts payable under any
Pool Receivable directly to the Administrator or its designee,

(ii) the Administrator may instruct the Seller or the Servicer to give notice of
the Purchaser Groups’ interest in Pool Receivables to each Obligor, which notice
shall direct that payments be made directly to the Administrator or its designee
(on behalf of the Purchaser Groups), and the Seller or the Servicer, as the case
may be, shall give such notice at the expense of the Seller or the Servicer, as
the case may be; provided, that if the Seller or the Servicer, as the case may
be, fails to so notify each Obligor, the Administrator (at the Seller’s or the
Servicer’s, as the case may be, expense) may so notify the Obligors,

(iii) the Administrator may request the Servicer to, and upon such request the
Servicer shall: (A) promptly assemble all of the records necessary or desirable
to collect the Pool Receivables and the Related Security, and transfer or
license to a successor Servicer the use of all software necessary or desirable
to collect the Pool Receivables and the Related Security, and make the same
available to the Administrator or its designee (for the benefit of the Purchaser
Agents and the Purchasers) at a place selected by the Administrator, and
(B) segregate all cash, checks and other instruments received by it from time to
time constituting Collections in a manner acceptable to the Administrator and,
promptly upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the Administrator or
its designee, and

(iv) the Administrator may collect any amounts due from any Originator under the
Sale Agreement and otherwise enforce directly against each Originator all
rights, remedies, powers and privileges of the Seller under the Sale Agreement.

(b) Each of the Seller and the Servicer hereby authorizes the Administrator (on
behalf of each Purchaser Group), and irrevocably appoints the Administrator as
its attorney-in-fact with full power of substitution and with full authority in
its place and stead, which appointment is coupled with an interest, to take any
and all steps in the name of the Seller or the Servicer, as applicable, and on
behalf of the Seller or the Servicer, as applicable, necessary or desirable, in
the determination of the Administrator, after the occurrence and during the
continuation of a Termination Event, to collect any and all amounts or portions
thereof due under any and all Pool Assets, including endorsing the name of the
Seller or the Servicer, as applicable, on checks and other instruments
representing Collections and enforcing such Pool Assets. Notwithstanding
anything to the contrary contained in this Section 4.4(b), none of the powers
conferred upon such attorney-in-fact pursuant to the preceding sentence shall
subject such attorney-in-fact to any liability if any action taken by it shall
prove to be inadequate or invalid, nor shall they confer any obligations upon
such attorney-in-fact in any manner whatsoever.

 

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Section 4.5 Responsibilities of the Seller and the Servicer.

(a) None of the Administrator, the Purchaser Agents or any of the Purchasers
shall have any obligation or liability with respect to any Pool Asset, nor shall
any of them be obligated to perform any of the obligations of the Seller, the
Servicer, Targa or the Originators thereunder.

(b) Targa hereby irrevocably agrees that if at any time it shall cease to be the
Servicer hereunder, it shall act (if the then-current Servicer so requests) as
the data-processing agent of the then-current Servicer and, in such capacity,
Targa shall conduct the data-processing functions of the administration of the
Receivables and the Collections thereon in substantially the same way that Targa
conducted such data-processing functions while it acted as the Servicer.

Section 4.6 Servicing Fee. The Servicer shall be paid a fee (the “Servicing
Fee”) in arrears on each Settlement Date equal to the Servicing Fee Rate of the
daily average aggregate Outstanding Balance of the Pool Receivables during the
related Calculation Period.

ARTICLE V

THE AGENTS

Section 5.1 Appointment and Authorization. (a) Each Purchaser and Purchaser
Agent hereby irrevocably designates and appoints PNC Bank, National Association,
as the “Administrator” hereunder and authorizes the Administrator to take such
actions and to exercise such powers as are delegated to the Administrator hereby
and to exercise such other powers as are reasonably incidental thereto. The
Administrator shall hold, in its name, for the benefit of each Purchaser Agent
and each Purchaser, ratably, the Purchased Interest. The Administrator shall not
have any duties other than those expressly set forth herein or any fiduciary
relationship with any Purchaser or Purchaser Agent, and no implied obligations
or liabilities shall be read into this Agreement, or otherwise exist, against
the Administrator. Notwithstanding any provision of this Agreement or any other
Transaction Document to the contrary, in no event shall the Administrator ever
be required to take any action which exposes the Administrator to personal
liability or which is contrary to the provision of any Transaction Document or
applicable Law.

(b) Each Purchaser hereby irrevocably designates and appoints the respective
institution identified as the Purchaser Agent for such Purchaser’s Purchaser
Group on the signature pages hereto or in the Assumption Agreement or Transfer
Supplement pursuant to which such Purchaser becomes a party hereto, and each
authorizes such Purchaser Agent to take such action on its behalf under the
provisions of this Agreement and to exercise such powers and perform such duties
as are expressly delegated to such Purchaser Agent by the terms of this
Agreement, if any, together with such other powers as are reasonably incidental
thereto.

 

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Notwithstanding any provision to the contrary elsewhere in this Agreement, no
Purchaser Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Purchaser or
other Purchaser Agent or the Administrator, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of such
Purchaser Agent shall be read into this Agreement or otherwise exist against
such Purchaser Agent.

(c) Except as otherwise specifically provided in this Agreement, the provisions
of this Article V are solely for the benefit of the Purchaser Agents, the
Administrator and the Purchasers, and none of the Seller or the Servicer shall
have any rights as a third-party beneficiary or otherwise under any of the
provisions of this Article V, except that this Article V shall not affect any
obligations which any Purchaser Agent, the Administrator or any Purchaser may
have to the Seller or the Servicer under the other provisions of this Agreement.
Furthermore, no Purchaser shall have any rights as a third-party beneficiary or
otherwise under any of the provisions hereof in respect of a Purchaser Agent
which is not the Purchaser Agent for such Purchaser.

(d) In performing its functions and duties hereunder, the Administrator shall
act solely as the agent of the Purchasers and the Purchaser Agents and does not
assume nor shall be deemed to have assumed any obligation or relationship of
trust or agency with or for the Seller or the Servicer or any of their
successors and assigns. In performing its functions and duties hereunder, each
Purchaser Agent shall act solely as the agent of its respective Purchaser and
does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Seller, the Servicer, any other
Purchaser, any other Purchaser Agent or the Administrator, or any of their
respective successors and assigns.

Section 5.2 Delegation of Duties. The Administrator may execute any of its
duties through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrator
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

Section 5.3 Exculpatory Provisions. None of the Purchaser Agents, the
Administrator or any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted (i) with the consent
or at the direction of the Majority Purchaser Agents (or in the case of any
Purchaser Agent, the Purchasers within its Purchaser Group that have a majority
of the aggregate Commitments of such Purchaser Group) or (ii) in the absence of
such Person’s gross negligence or willful misconduct. The Administrator shall
not be responsible to any Purchaser, Purchaser Agent or other Person for (i) any
recitals, representations, warranties or other statements made by the Seller,
the Servicer, Targa, any Originator or any of their Affiliates, (ii) the value,
validity, effectiveness, genuineness, enforceability or sufficiency of any
Transaction Document, (iii) any failure of the Seller, the Servicer, Targa, any
Originator or any of their Affiliates to perform any obligation hereunder or
under the other Transaction Documents to which it is a party (or under any
Contract), or (iv) the satisfaction of any condition specified in Exhibit II.
The Administrator shall not have any obligation to any Purchaser or Purchaser
Agent to ascertain or inquire about the observance or performance of any
agreement contained in any Transaction Document or to inspect the properties,
books or records of the Seller, the Servicer, Targa, any Originator or any of
their respective Affiliates.

 

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Section 5.4 Reliance by Agents. (a) Each Purchaser Agent and the Administrator
shall in all cases be entitled to rely, and shall be fully protected in relying,
upon any document or other writing or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person and upon
advice and statements of legal counsel (including counsel to the Seller or the
Servicer), independent accountants and other experts selected by the
Administrator. Each Purchaser Agent and the Administrator shall in all cases be
fully justified in failing or refusing to take any action under any Transaction
Document unless it shall first receive such advice or concurrence of the
Majority Purchaser Agents (or in the case of any Purchaser Agent, the Purchasers
within its Purchaser Group that have a majority of the aggregate Commitment of
such Purchaser Group), and assurance of its indemnification, as it deems
appropriate.

(b) The Administrator shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of the
Majority Purchaser Agents or the Purchaser Agents, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all
Purchasers, the Administrator and all Purchaser Agents.

(c) The Purchasers within each Purchaser Group with a majority of the
Commitments of such Purchaser Group shall be entitled to request or direct the
related Purchaser Agent to take action, or refrain from taking action, under
this Agreement on behalf of such Purchasers. Such Purchaser Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of such Majority Purchaser Agents, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all of such Purchaser Agent’s Purchasers.

(d) Unless otherwise advised in writing by a Purchaser Agent or by any Purchaser
on whose behalf such Purchaser Agent is purportedly acting, each party to this
Agreement may assume that (i) such Purchaser Agent is acting for the benefit of
each of the Purchasers in respect of which such Purchaser Agent is identified as
being the “Purchaser Agent” in the definition of “Purchaser Agent” hereto, as
well as for the benefit of each assignee or other transferee from any such
Person, and (ii) each action taken by such Purchaser Agent has been duly
authorized and approved by all necessary action on the part of the Purchasers on
whose behalf it is purportedly acting. Each Purchaser Agent and its Purchaser(s)
shall agree amongst themselves as to the circumstances and procedures for
removal, resignation and replacement of such Purchaser Agent.

Section 5.5 Notice of Termination Events. Neither any Purchaser Agent nor the
Administrator shall be deemed to have knowledge or notice of the occurrence of
any Termination Event or Unmatured Termination Event unless the Administrator
and the Purchaser Agents have received notice from any Purchaser, the Servicer
or the Seller stating that a Termination Event or an Unmatured Termination Event
has occurred hereunder and describing such Termination Event or Unmatured

 

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Termination Event. In the event that the Administrator receives such a notice,
it shall promptly give notice thereof to each Purchaser Agent whereupon each
such Purchaser Agent shall promptly give notice thereof to its related
Purchasers. In the event that a Purchaser Agent receives such a notice (other
than from the Administrator), it shall promptly give notice thereof to the
Administrator. The Administrator shall take such action concerning a Termination
Event or an Unmatured Termination Event as may be directed by the Majority
Purchaser Agents (unless such action otherwise requires the consent of all
Purchasers, the LC Bank and/or the Required LC Participants), but until the
Administrator receives such directions, the Administrator may (but shall not be
obligated to) take such action, or refrain from taking such action, as the
Administrator deems advisable and in the best interests of the Purchasers and
the Purchaser Agents.

Section 5.6 Non-Reliance on Administrator, Purchaser Agents and Other
Purchasers. Each Purchaser expressly acknowledges that none of the
Administrator, the Purchaser Agents or any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Administrator or any
Purchaser Agent hereafter taken, including any review of the affairs of the
Seller, Targa, the Servicer or any Originator, shall be deemed to constitute any
representation or warranty by the Administrator or such Purchaser Agent, as
applicable. Each Purchaser represents and warrants to the Administrator and the
Purchaser Agents that, independently and without reliance upon the
Administrator, any Purchaser Agent or any other Purchaser and based on such
documents and information as it has deemed appropriate, it has made and will
continue to make its own appraisal of and investigation into the business,
operations, property, prospects, financial and other conditions and
creditworthiness of the Seller, Targa, the Servicer or the Originators, and the
Receivables and its own decision to enter into this Agreement and to take, or
omit, action under any Transaction Document. Except for items specifically
required to be delivered hereunder, the Administrator shall not have any duty or
responsibility to provide any Purchaser Agent with any information concerning
the Seller, Targa, the Servicer or the Originators or any of their Affiliates
that comes into the possession of the Administrator or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.

Section 5.7 Administrator, Purchasers, Purchaser Agents and Affiliates. Each of
the Administrator, the Purchasers and the Purchaser Agents and any of their
respective Affiliates may extend credit to, accept deposits from and generally
engage in any kind of banking, trust, debt, equity or other business with the
Seller, Targa, the Servicer or any Originator or any of their Affiliates. With
respect to the acquisition of the Eligible Receivables pursuant to this
Agreement, each of the Purchaser Agents and the Administrator shall have the
same rights and powers under this Agreement as any Purchaser and may exercise
the same as though it were not such an agent, and the terms “Purchaser” and
“Purchasers” shall include, to the extent applicable, each of the Purchaser
Agents and the Administrator in their individual capacities.

 

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Section 5.8 Indemnification. Each Committed Purchaser shall indemnify and hold
harmless the Administrator (but solely in its capacity as Administrator) and the
LC Bank and their respective officers, directors, employees, representatives and
agents (to the extent not reimbursed by the Seller, the Servicer or any
Originator and without limiting the obligation of the Seller, the Servicer, or
any Originator to do so), ratably (based on its Commitment) from and against any
and all liabilities, obligations, losses, damages, penalties, judgments,
settlements, costs, expenses and disbursements of any kind whatsoever (including
in connection with any investigative or threatened proceeding, whether or not
the Administrator, the LC Bank or such Person shall be designated a party
thereto) that may at any time be imposed on, incurred by or asserted against the
Administrator, the LC Bank or such Person as a result of, or related to, any of
the transactions contemplated by the Transaction Documents or the execution,
delivery or performance of the Transaction Documents or any other document
furnished in connection therewith (but excluding any such liabilities,
obligations, losses, damages, penalties, judgments, settlements, costs, expenses
or disbursements resulting solely from the gross negligence or willful
misconduct of the Administrator, the LC Bank or such Person as finally
determined by a court of competent jurisdiction). Without limiting the
generality of the foregoing, each LC Participant agrees to reimburse the
Administrator and the LC Bank, ratably according to its Commitment Percentage of
its Purchaser Group’s Pro Rata Share, promptly upon demand, for any out of
pocket expenses (including Attorney Costs) incurred by the Administrator or the
LC Bank in connection with the administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of, its rights and responsibilities under this
Agreement.

Section 5.9 Successor Administrator. The Administrator may, upon at least thirty
(30) days’ prior written notice to the Seller, each Purchaser and Purchaser
Agent, resign as Administrator. Such resignation shall not become effective
until (x) a successor Administrator is appointed by the Majority Purchaser
Agents and has accepted such appointment and (y) so long as no Termination Event
or Unmatured Termination Event has occurred and is continuing, the Seller and
the Servicer shall have consented to such successor Administrator (such consent
not to be unreasonably withheld or delayed). Upon such acceptance of its
appointment as Administrator hereunder by a successor Administrator, such
successor Administrator shall succeed to and become vested with all the rights
and duties of the retiring Administrator, and the retiring Administrator shall
be discharged from its duties and obligations under the Transaction Documents.
After any retiring Administrator’s resignation hereunder, the provisions of
Sections 3.1 and 3.2 and this Article V shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Administrator.

ARTICLE VI

MISCELLANEOUS

Section 6.1 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or consent to any departure by the Seller or the Servicer therefrom,
shall be effective unless in a writing signed by the Majority Purchaser Agents
and, in the case of an amendment, signed by the Seller and the Servicer; and
then such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, that, to the
extent required by the securitization

 

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program of any Conduit Purchaser, no material amendment shall be effective until
the Rating Agency Condition shall have been satisfied with respect thereto (the
Purchaser Agent for each Conduit Purchaser hereby agrees to provide executed
copies of any material amendment to or waiver of any provision of this Agreement
to the Rating Agencies); provided, further that no amendment, waiver or consent
shall affect the rights or duties of the Administrator unless signed by the
Administrator; provided, further that no amendment, waiver or consent shall
affect the rights or duties of the LC Bank or any LC Participant unless signed
by the LC Bank or such LC Participant, as applicable; provided, further that no
such amendment, waiver or consent shall, unless in a writing signed by each
Purchaser, (A) extend the date of any payment or deposit of Collections by the
Seller or the Servicer, (B) reduce the rate or extend the time of payment of
Discount, (C) reduce any fees payable to the Administrator, any Purchaser Agent
or any Purchaser pursuant to the Fee Letter, (D) change the amount of Capital of
any Purchaser, any Purchaser’s pro rata share of the Purchased Interest or any
Committed Purchaser’s Commitment or any LC Participant’s LC Sublimit Commitment,
(E) amend, modify or waive any provision of the definition of “Majority
Purchaser Agents” or this Section 6.1, (F) consent to or permit the assignment
or transfer by the Seller or the Servicer of any of its rights and obligations
under this Agreement, (G) change the definition of “Defaulted Receivable,”
“Delinquent Receivable,” “Dilution Reserve Percentage,” “Eligible Receivable,”
“Excess Concentration Amount,” “Facility Termination Date” (other than an
extension of such date in accordance clause (H) below or in accordance with
Section 1.22), “Look Through Effective Date,” “Loss Reserve Percentage,” “Net
Receivables Pool Balance,” “Total Reserves,” “Termination Event,” or Yield
Reserve Percentage,” (H) extend the “Facility Termination Date” or (I) amend or
modify any defined term (or any defined term used directly or indirectly in such
defined term) used in clauses (A) through (H) above in a manner that would
circumvent the intention of the restrictions set forth in such clauses. Without
limiting any other provision of this Section 6.1, to the extent required
pursuant to the securitization program of any Conduit Purchaser, the parties to
this Agreement: (i) shall not, without obtaining a confirmation of the
then-current rating of the Notes of such Conduit Purchaser, waive any of the
representations set forth in Section 3 to Exhibit III; (ii) shall provide the
Ratings Agencies with prompt written notice of any breach of any representations
set forth in Section 3 to Exhibit III, and (iii) shall not, without obtaining a
confirmation of the then-current rating of such Notes (as determined after any
adjustment or withdrawal of the ratings following notice of such breach) waive a
breach of any of the representations set forth in Section 3 to Exhibit III. No
failure on the part of the Purchasers, the Purchaser Agents or the Administrator
to exercise, and no delay in exercising any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right.

Section 6.2 Notices, Etc. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including
facsimile and email communications) and shall be personally delivered or sent by
facsimile or email, or by overnight mail, to the intended party at the mailing
or email address or facsimile number of such party set forth under its name on
the signature pages hereof (or in any other document or agreement pursuant to
which it is or became a party hereto), or at such other address or facsimile
number as shall be designated by such party in a written notice to the other
parties hereto. All such notices and communications shall be effective (i) if
delivered by overnight mail, when received, and (ii) if transmitted by facsimile
or email, when sent, receipt confirmed by telephone or electronic means.

 

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Section 6.3 Successors and Assigns; Participations; Assignments.

(a) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
Except as otherwise provided in Section 4.1(d), neither the Seller nor the
Servicer may assign or transfer any of its rights or delegate any of its duties
hereunder or under any Transaction Document without the prior consent of the
Administrator, the LC Bank, the Required LC Participants and the Purchaser
Agents.

(b) Participations. (i) Except as otherwise specifically provided herein, any
Purchaser may sell to one or more Persons (each a “Participant”) participating
interests in the interests of such Purchaser hereunder; provided, that (x) no
Purchaser shall grant any participation under which the Participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Transaction Document, (y) the selling Purchaser shall maintain a register
containing the name and address of each Participant and its interest (and stated
interest owed) in the Commitment of the selling Purchaser and (z) the selling
Purchaser shall obtain the forms required under Section 1.9(e) from the
Participant and promptly deliver copies of same to the Seller, the Servicer and
the Administrator Such Purchaser shall remain solely responsible for performing
its obligations hereunder, and the Seller, the Servicer, each Purchaser Agent
and the Administrator shall continue to deal solely and directly with such
Purchaser in connection with such Purchaser’s rights and obligations hereunder.
A Purchaser shall not agree with a Participant to restrict such Purchaser’s
right to agree to any amendment hereto, except amendments that require the
consent of all Purchasers.

(ii) Notwithstanding anything contained in clause (a) or clause(b)(i) of this
Section 6.3, each of the LC Bank and each LC Participant may sell participations
in all or any part of any Funded Purchase made by such LC Participant to another
bank or other entity so long as (x) no such grant of a participation shall,
without the consent of the Seller, require the Seller to file a registration
statement with the SEC and (y) no holder of any such participation shall be
entitled to require such LC Participant to take or omit to take any action
hereunder except that such LC Participant may agree with such participant that,
without such Participant’s consent, such LC Participant will not consent to an
amendment, modification or waiver which requires the consent of all Purchasers.
Any such Participant shall not have any rights hereunder or under the
Transaction Documents.

(c) Assignments by Purchasers; Register. Each of the Purchasers may assign,
(a) without any prior written consent, in whole or in part, its interest in the
Receivables and obligations hereunder (including its obligations in respect of
each Letter of Credit) to any other then existing Purchaser, any Program Support
Provider or to any other Conduit Purchaser administered by its Purchaser Agent,
and (b) with (x) the consent of the Administrator and the LC Bank, each of whose
consent shall not be unreasonably withheld or delayed and (y) the consent of the
Seller, which consent may be withheld for any reason or no reason, to any other

 

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Person, provided, that if a Termination Event or Unmatured Termination exists,
the Seller’s consent shall not be required. To effectuate an assignment
hereunder (other than an assignment by a Conduit Purchaser to one of its Program
Support Providers), both the assignee and the assignor (including, as
appropriate, its Purchaser Agent) will be required to execute and deliver to the
Seller, the Servicer and the Administrator a supplement hereto, substantially in
the form of Annex D or another form approved by the parties thereto (each, a
“Transfer Supplement”). Any such assignment shall be in a minimum amount of
$10,000,000. Upon (i) the execution of a Transfer Supplement, if applicable,
(ii) delivery of an executed copy thereof to the Seller, the Servicer and the
Administrator and (iii) payment by the assignee to the assignor of the agreed
purchase price, if any, the assignor shall be released from its obligations
hereunder to the extent of such assignment and the assignee (other than an
assignee which is a Program Support Provider) shall for all purposes be a
Purchaser party hereto and shall have all the rights and obligations of a
Purchaser hereunder to the same extent as if it were an original party hereto.
The amount of the Commitment (and, if applicable, the LC Sublimit Commitment) of
the assignor allocable to the assignee shall be equal to the amount of the
Commitment (and, if applicable, the LC Sublimit Commitment) of the assignor so
transferred regardless of the purchase price, if any, paid therefor. The
Transfer Supplement shall be an amendment hereof only to the extent necessary to
reflect the addition of such assignee as a “Purchaser” and, if applicable, an
“LC Participant” and any resulting adjustment of the selling Purchaser’s
Commitment (and LC Sublimit Commitment). The Seller and the Servicer hereby
agree and consent to the complete assignment by the applicable Conduit
Purchasers of all of their respective rights under, interest in, title to and
obligations under the Transaction Documents to the respective collateral agent
under the applicable Conduit Purchaser’s commercial paper programs.

In addition, the Administrator, acting as agent for the Seller (such agency
being solely for Tax purposes), shall maintain at an office of the
Administrator, a copy of each Transfer Supplement delivered to it and a register
for the names and addresses of the Purchasers, and the Commitments of, and the
Capital owing to, each Purchaser (the “Register”). The entries in the Register
shall be conclusive, and the Seller, the Administrator and the Purchasers may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Purchaser hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Seller and any Purchaser at any
reasonable time and from time to time upon reasonable prior notice.

(d) Opinions of Counsel. If required by the Administrator or the applicable
Purchaser Agent or to maintain the ratings of the Notes of any Conduit
Purchaser, each Transfer Supplement or other assignment and acceptance agreement
must be accompanied by an opinion of counsel of the assignee as to such matters
as the Administrator or such Purchaser Agent may reasonably request.

(e) Assignments to Federal Reserve Banks. Notwithstanding any other provision of
this Section 6.3, any Purchaser may at any time pledge or grant a security
interest in all or any portion of its rights (including, without limitation,
rights to payment of interest and repayment of the Purchased Interest) under
this Agreement to secure obligations of such Purchaser to any Federal Reserve
Bank, without notice to or consent of the Seller, Administrator or any other
Person; provided, that no such pledge or grant of a security interest shall
release a Purchaser from any of its obligations hereunder or substitute any such
pledgee or grantee for such Purchaser as a party hereto.

 

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Section 6.4 Costs and Expenses. By way of clarification, and not of limitation,
of Sections 1.7, 1.20 or 3.1, the Seller shall pay to the Administrator, each
Purchaser Agent and/or any Purchaser on demand all reasonable costs and expenses
in connection with (i) the preparation, execution, delivery and administration
of this Agreement or the other Transaction Documents and the other documents and
agreements to be delivered hereunder and thereunder (and all reasonable costs
and expenses in connection with any amendment, waiver or modification of any
thereof), (ii) the sale of the Purchased Interest (or any portion thereof) by
the Seller, (iii) the perfection (and continuation) of the Administrator’s
rights in the Receivables, Collections and other Pool Assets, (iv) the
enforcement by the Administrator, any Purchaser Agent or any member of any
Purchaser Group of the obligations of the Seller, the Servicer or the
Originators under the Transaction Documents or of any Obligor under a Receivable
and (v) the maintenance by the Administrator of the Lock-Box Accounts (and any
related lock-box or post office box), including Attorney Costs for the
Administrator, the Purchaser Agents and the Purchasers relating to any of the
foregoing or to advising the Administrator or any member of any Purchaser Group
(including, any related Liquidity Provider or any other related Program Support
Provider) about its rights and remedies under any Transaction Document or any
other document, agreement or instrument related thereto and all reasonable costs
and expenses (including Attorney Costs) of the Administrator, any Purchaser
Agent and any Purchaser in connection with the enforcement or administration of
the Transaction Documents or any other document, agreement or instrument related
thereto. The Administrator and each member of each Purchaser Group agree,
however, that unless a Termination Event has occurred and is continuing, all of
such entities will be represented by a single law firm. The Seller shall,
subject to the provisos in clause (e) of each of Sections 1 and 2 of Exhibit IV,
reimburse the Administrator, each Purchaser Agent and each Purchaser for the
cost of such Person’s auditors (which may be employees of such Person) auditing
the books, records and procedures of the Seller or the Servicer; provided, that
the Administrator shall discuss the scope and cost of any such audit prior to
commencement (it being understood that failure to discuss the scope or cost of
any such audit shall not relieve the Seller of its obligation to pay such
amounts). The Seller shall reimburse each Purchaser on demand for all reasonable
out of pocket costs and expenses incurred by such Purchaser in connection with
the Transaction Documents or the transactions contemplated thereby.

Section 6.5 No Proceedings; Limitation on Payments. (a) Each of the Seller,
Targa, the Servicer, the Administrator, the Purchaser Agents, the Purchasers,
each assignee of the Purchased Interest or any interest therein, and each Person
that enters into a commitment to purchase the Purchased Interest or interests
therein, hereby covenants and agrees that it will not institute against, or join
any other Person in instituting against, any Conduit Purchaser any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one year
and one day after the latest maturing Note issued by such Conduit Purchaser is
paid in full. The provisions of this paragraph shall survive any termination of
this Agreement. Each party hereto, each assignee of the Purchased Interest or
any interest

 

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therein, and each Person that enters into a commitment to purchase the Purchased
Interest or interests therein, agrees that it will not institute against, or
join any Person in instituting against, the Seller any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or any other
proceeding under any federal or state bankruptcy or similar law, for one year
and one day after which all other indebtedness and other obligations of the
Seller hereunder and under each other Transaction Document shall have been paid
in full; provided that the Administrator may take any such action with respect
to the Seller with the prior written consent of the Majority Purchaser Agents
and the LC Bank.

(b) Notwithstanding any provisions contained in this Agreement to the contrary,
no Conduit Purchaser shall or shall be obligated to, pay any amount, if any,
payable by it pursuant to this Agreement or any other Transaction Document
unless (i) such Conduit Purchaser has received funds which may be used to make
such payment and which funds are not required to repay the Notes when due and
(ii) after giving effect to such payment, either (x) such Conduit Purchaser
could issue Notes to refinance all outstanding Notes (assuming such outstanding
Notes matured at such time) in accordance with the program documents governing
such Conduit Purchaser’s securitization program or (y) all Notes are paid in
full. Any amount which such Conduit Purchaser does not pay pursuant to the
operation of the preceding sentence shall not constitute a claim (as defined in
§101 of the Bankruptcy Code) against or company obligation of such Conduit
Purchaser for any such insufficiency unless and until such Conduit Purchaser
satisfies the provisions of clauses (i) and (ii) above. The provisions of this
paragraph shall survive any termination of this Agreement.

Section 6.6 GOVERNING LAW AND JURISDICTION.

(a) THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY OTHERWISE APPLICABLE
CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW) EXCEPT TO THE EXTENT THAT THE PERFECTION OF A
SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL
ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT
IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED

 

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HERETO. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER
JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW
YORK LAW.

Section 6.7 Confidentiality. Unless otherwise required by applicable Laws, rules
or regulations, the Administrator, the Purchaser Agents and the Purchasers agree
to maintain the confidentiality of non-public financial information regarding
the Seller, the Servicer and the Originators; provided, that such information
may be disclosed (i) to third parties to the extent such disclosure is made
pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to the Servicer, (ii) to legal counsel and auditors of
the Purchasers, the Purchaser Agents or the Administrator if they agree to hold
it confidential, (iii) to any Program Support Provider or potential Program
Support Provider (if they agree to hold it confidential) or to any other
Purchaser or any potential assignee or participant if they agree to hold it
confidential, (iv) to any placement agency placing the Notes, (v) to any
regulatory authorities having jurisdiction over the Administrator, any Purchaser
Agent, any Purchaser, any Program Support Provider or any Liquidity Provider,
(vi) pursuant to a request or order under any Laws or pursuant to a subpoena or
other legal process, (vii) in connection with any litigation or dispute or the
exercise of any remedies under the Transaction Documents, (viii) to the extent
such information (x) becomes publicly available other than as a result of a
breach of this Section or (y) becomes available to the Administrator, any
Purchaser Agent or any Purchaser on a nonconfidential basis from a source other
than the Seller, the Servicer or any Originator and (ix) to any Rating Agency or
any non-hired nationally recognized statistical rating organization that
provides to a Conduit Purchaser or its agent the certification required by
subsection (e) of Rule 17g-5 under the Securities Exchange Act of 1934, as
amended (“Rule 17g-5”), and who agrees to keep such information confidential as
contemplated by Rule 17g-5, by posting such information to a password protected
internet website accessible to each such nationally recognized statistical
rating organization in connection with, and subject to, the terms of Rule 17g-5.

Notwithstanding any other express or implied agreement to the contrary
(including this Section 6.7), the parties hereto agree and acknowledge that each
of them and each of their employees, representatives, and other agents may
disclose to any and all Persons, without limitation of any kind, the federal
income Tax treatment and Tax structure of the transactions contemplated hereby
and all materials of any kind (including opinions or other Tax analyses) that
are provided to any such party relating to such Tax treatment and Tax structure,
except to the extent that confidentiality is reasonably necessary to comply with
U.S. federal or state securities laws. For purposes of this paragraph, the terms
“Tax treatment” and “Tax structure” have the meanings specified in Treasury
Regulation section 1.6011-4(c).

Section 6.8 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, and by the different parties on different counterparts,
each of which, when so executed, shall constitute an original, and all of which,
when taken together, shall constitute one and the same agreement.

 

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Section 6.9 Survival of Termination. The provisions of Sections 1.7, 1.8, 1.9,
1.19, 3.1, 3.2, 6.4, 6.5, 6.6, 6.7, 6.10 and 6.15 and this Section 6.9 shall
survive any termination of this Agreement.

Section 6.10 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES ITS
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. EACH OF THE PARTIES HERETO AGREES
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES
THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY
PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

Section 6.11 Sharing of Recoveries. Each Purchaser agrees that if it receives
any recovery, through set-off, judicial action or otherwise, on any amount
payable or recoverable hereunder in a greater proportion than should have been
received hereunder or otherwise inconsistent with the provisions hereof, then
the recipient of such recovery shall purchase for cash an interest in amounts
owing to the other Purchasers (as return of Capital or otherwise), without
representation or warranty except for the representation and warranty that such
interest is being sold by each such other Purchaser free and clear of any
Adverse Claim created or granted by such other Purchaser, in the amount
necessary to create proportional participation by the Purchaser in such
recovery. If all or any portion of such amount is thereafter recovered from the
recipient, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest.

Section 6.12 Right of Setoff. Each Purchaser is hereby authorized (in addition
to any other rights it may have) to setoff, appropriate and apply (without
presentment, demand, protest or other notice which are hereby expressly waived)
any deposits and any other indebtedness held or owing by such Purchaser
(including by any branches or agencies of such Purchaser) to, or for the account
of, the Seller against amounts owing by the Seller hereunder (even if contingent
or unmatured).

Section 6.13 Entire Agreement. This Agreement and the other Transaction
Documents embody the entire agreement and understanding between the parties
hereto, and supersede all prior or contemporaneous agreements and understandings
of such Persons, verbal or written, relating to the subject matter hereof and
thereof.

 

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Section 6.14 Headings. The captions and headings of this Agreement and any
Exhibit, Schedule or Annex hereto are for convenience of reference only and
shall not affect the interpretation hereof or thereof.

Section 6.15 Purchaser Groups’ Liabilities. The obligations of each Purchaser
Agent and each Purchaser under the Transaction Documents are solely the
corporate obligations of such Person. Except with respect to any claim arising
out of the willful misconduct or gross negligence of the Administrator, any
Purchaser Agent or any Purchaser, no claim may be made by the Seller or the
Servicer or any other Person against the Administrator, any Purchaser Agent or
any Purchaser or their respective Affiliates, directors, officers, employees,
attorneys or agents for any special, indirect, consequential or punitive damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement or
any other Transaction Document, or any act, omission or event occurring in
connection therewith; and each of Seller and Servicer hereby waives, releases,
and agrees not to sue upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.

Section 6.16 Tax Treatment. The Seller, each Purchaser, each LC Participant and
the LC Bank agree that the Purchased Interest, the issuance of the Letters of
Credit and the transactions contemplated under this Agreement shall be treated
as the issuance of indebtedness for U.S. federal income Tax purposes. Each party
to this Agreement or any other Transaction Document agrees to not take any Tax
position inconsistent with such Tax characterization and shall not report the
transactions arising under this Agreement in any manner other than the issuance
of debt obligations on all applicable Tax returns unless otherwise required by
applicable Law.

Section 6.17 USA Patriot Act. The Purchasers, each Liquidity Provider and each
Program Support Provider that is subject to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Patriot Act”) hereby notifies the Seller that pursuant to the requirements of
the Patriot Act, it is required to obtain, verify, and record information that
identifies the Seller, which information includes the name and address of the
Seller and other information that will allow such Purchaser, Liquidity Provider
or Program Support Provider to identify the Seller in accordance with the
Patriot Act.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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

 

TARGA RECEIVABLES LLC, as Seller By:   /s/ Matthew J. Meloy Name:   Matthew J.
Meloy Title:   Senior Vice President, Chief Financial Officer and Treasurer

 

       Address:  

1000 Louisiana, Suite 4300 Houston, Texas 77002

Attention: Senior Vice President, Chief Financial Officer and Treasurer

Telephone: (713) 584-1092

Facsimile: (713) 584-1523

Email: mmeloy@targaresources.com

 

Receivables Purchase Agreement

(Targa Receivables LLC)

 

S-1

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TARGA RESOURCES PARTNERS LP, as Servicer By: Targa Resources GP LLC, its general
partner By:   /s/ Matthew J. Meloy Name:   Matthew J. Meloy Title:   Senior Vice
President, Chief Financial Officer and Treasurer   Address:  

1000 Louisiana, Suite 4300

Houston, Texas 77002

Attention: Senior Vice President, Chief Financial Officer and Treasurer

Telephone: (713) 584-1092

Facsimile: (713) 584-1523

Email: mmeloy@targaresources.com

 

Receivables Purchase Agreement

(Targa Receivables LLC)

 

S-2

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THE PURCHASER GROUPS:

 

PNC BANK, NATIONAL ASSOCIATION, as Purchaser Agent for the Market Street
Purchaser Group

By:   /s/ William Falcon Name:   William Falcon Title:   Vice President Address:
 

PNC Bank, National Association

Three PNC Plaza

225 Fifth Avenue

Pittsburgh, Pennsylvania 15222-2724

Attention: William P. Falcon

Telephone: (412) 762-5442

Facsimile: (412)762-9184

Email: william.falcon@pnc.com

 

Market Street Group Commitment: $200,000,000

 

Receivables Purchase Agreement

(Targa Receivables LLC)

 

S-3

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PNC BANK, NATIONAL ASSOCIATION, as a
    Committed Purchaser

By:   /s/ Mark Falcione Name:   Mark Falcione Title:   Senior Vice President
Address:  

PNC Bank, National Association

Three PNC Plaza

225 Fifth Avenue

Pittsburgh, Pennsylvania 15222-2724

Attention: William P. Falcon

Telephone: (412) 762-5442

Facsimile: (412)762-9184

Email: william.falcon@pnc.com

 

Commitment: $200,000,000

 

Receivables Purchase Agreement

(Targa Receivables LLC)

 

S-4

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MARKET STREET FUNDING LLC, as Conduit Purchaser

By:   /s/ Doris J. Hearn Name:   Doris J. Hearn Title:   Vice President Address:
 

c/o AMACAR Group, L.L.C.

6525 Morrison Blvd., Suite 318

Charlotte, North Carolina 28211

Attention: Doris J. Hearn

Telephone: (704) 365-0569

Facsimile: (704) 365-1362

Email: djhearn@amacar.com

 

Receivables Purchase Agreement

(Targa Receivables LLC)

 

S-5

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PNC BANK, NATIONAL ASSOCIATION, as the LC Bank

By:   /s/ Mark Falcione Name:   Mark Falcione Title:   Senior Vice President
Address:  

PNC Bank, N.A.

225 Fifth Avenue

Pittsburgh, Pennsylvania 15222

Attention: William P. Falcon

Telephone: (412) 762-5442

Facsimile: (412)762-9184

Email: william.falcon@pnc.com

 

LC Sublimit Commitment: $100,000,000

 

Receivables Purchase Agreement

(Targa Receivables LLC)

 

S-6

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PNC BANK, NATIONAL ASSOCIATION, as Administrator

By:   /s/ William Falcon Name:   William Falcon Title:   Vice President Address:
 

PNC Bank, National Association

Three PNC Plaza

225 Fifth Avenue

Pittsburgh, Pennsylvania 15222-2724

Attention: William P. Falcon

Telephone: (412) 762-5442

Facsimile: (412)762-9184

Email: william.falcon@pnc.com

 

Receivables Purchase Agreement

(Targa Receivables LLC)

 

S-7

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EXHIBIT I

DEFINITIONS

1. Definitions. As used in this Agreement (including its Exhibits, Schedules and
Annexes), the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined). Unless otherwise indicated, all Section, Annex, Exhibit and Schedule
references in this Exhibit are to Sections of and Annexes, Exhibits and
Schedules to this Agreement.

“Administration Account” means the account designated as the Administration
Account established and maintained by the Seller with JPMorgan Chase Bank, N.A.
having account number 5567661 and routing number 071000013, or such other
account as may be so designated as such by the Seller with notice to the
Administrator.

“Administrative Agent” has the meaning set forth in the Credit Agreement.

“Administrator” has the meaning set forth in the preamble to this Agreement.

“Adjusted LC Participation Amount” means, at any time, the LC Participation
Amount minus the amount on deposit in the LC Collateral Account.

“Adverse Claim” means a lien, security interest or other charge or encumbrance,
or any other type of preferential arrangement; it being understood that any
thereof in favor of the Administrator (for the benefit of the Purchaser Agents
and the Purchasers), a Purchaser or the Seller as contemplated in the Sale
Agreement shall not constitute an Adverse Claim.

“Affected Person” means any Purchaser, LC Participant, Program Support Provider
or the LC Issuer.

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified; provided, however, that no
Person will be an Affiliate of Targa solely as a result of being Controlled by
Warburg Pincus LLC.

“Aggregate Capital” means, at any time, the sum of each Purchaser’s Capital at
such time.

“Aggregate Discount” means at any time, the aggregate amount of accrued and
unpaid Discount at such time.

“Agreement” has the meaning set forth in the preamble hereto.

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“Alternate Rate” means, for any Yield Period for any Capital (or portion
thereof) funded by any Purchaser: (a) other than through the issuance of Notes,
an interest rate per annum equal to the daily average LIBOR Market Index Rate
for such Yield Period or (b) if the Base Rate is applicable to such Purchaser
pursuant to Section 1.11 or Section 1.15, the daily average Base Rate for such
Purchaser for such Yield Period; provided, that the “Alternate Rate” for any day
on or after the date set forth in clause (b) of the definition of “Facility
Termination Date” shall be the Default Rate.

“Assumption Agreement” means an agreement substantially in the form attached as
Annex C to this Agreement.

“Attorney Costs” means and includes all reasonable fees and disbursements of any
law firm or other external counsel.

“Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978 (11
U.S.C. § 101, et seq.), as amended from time to time.

“Base Rate” means, with respect to any Purchaser, for any day, a fluctuating
interest rate per annum as shall be in effect from time to time, which rate
shall be at all times equal to the higher of:

(a) the rate of interest in effect for such day as publicly announced from time
to time by the applicable Purchaser Agent (or applicable Committed Purchaser) as
its “prime rate”. Such “prime rate” is set by the applicable Purchaser Agent
based upon various factors, including the applicable Purchaser Agent’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above or below
such announced rate, and

(b) the Federal Funds Rate plus 0.50% per annum.

“Billed Receivable” means each Receivable other than an Unbilled Receivable.

“Business Day” means any day (other than a Saturday or Sunday) on which:
(a) banks are not authorized or required to close in Houston, Texas, Pittsburgh,
Pennsylvania, or New York, New York and (b) if this definition of “Business Day”
is utilized in connection with the LIBOR Market Index Rate, dealings are carried
out in the London interbank market.

“Calculation Period” means (a) initially the period commencing on (and
including) the Closing Date and ending on (but not including) the next occurring
Settlement Date and (b) thereafter, each period commencing on (and including)
the first day after the last day included in the immediately preceding
Calculation Period and ending on (but not including) the next occurring
Settlement Date.

“Capital” means with respect to any Purchaser, the sum of (a) the amount paid to
the Seller by such Purchaser pursuant to Section 1.1(a) or (b) of this Agreement
and (b) such Purchaser’s Commitment Percentage (if any) of its Purchaser Group’s
Pro Rata Share of the

 

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aggregate amount of all participation advances in respect of unreimbursed draws
deemed to be Funded Purchases pursuant to Section 1.15(c) of this Agreement, as
reduced from time to time by Collections distributed and applied on account of
such Capital pursuant to Section 1.4(d) of this Agreement; provided, that if
such Capital shall have been reduced by any distribution and thereafter all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason, such Capital shall be increased by the amount of such rescinded or
returned distribution as though it had not been made.

“Change in Control” means (a) Targa ceases to own, directly or indirectly, 100%
of the membership (or other equity) interests of any Originator, the Owner or
the Seller, (b) the Owner ceases to own directly 100% of the membership
interests of the Seller or (c) a “Change of Control” as defined in the Credit
Agreement shall occur.

“Change in Law” means the occurrence, after the date of this Agreement (or with
respect to any Purchaser or LC Bank, such later date on which such Purchaser or
LC Bank, as the case may be, becomes a party to this Agreement), of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or
treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority; provided
that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, regulations,
guidelines or directives thereunder or issued in connection therewith and
(ii) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or Unites States or foreign regulatory agencies,
in each case, pursuant to Basel III, shall in each case be deemed to be a
“Change in Law”, regardless of the date enacted, adopted or issued.

“Closing Date” means January 10, 2013.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute of similar import, together with the regulations
thereunder, in each case as in effect from time to time. References to sections
of the Internal Revenue Code also refer to any successor sections.

“Collections” means, with respect to any Pool Receivable: (a) all funds that are
received by any Originator, the Seller or the Servicer in payment of any amounts
owed in respect of such Receivable (including purchase price, finance charges,
interest and all other charges and all proceeds of any drawing under any
Eligible Supporting Letter of Credit with respect to such Receivable), or
applied to amounts owed in respect of such Receivable (including insurance
payments and net proceeds of the sale or other disposition of repossessed goods
or other collateral or property of the related Obligor or any other Person
directly or indirectly liable for the payment of such Pool Receivable and
available to be applied thereon) and (b) all Deemed Collections.

 

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“Commitment” means, with respect to any Committed Purchaser, the maximum
aggregate amount which such Purchaser is obligated to fund hereunder at any time
on account of all Funded Purchases, as set forth below its signature to this
Agreement or in the Assumption Agreement or Transfer Supplement pursuant to
which it became a Purchaser, as such amount may be modified in connection with
any subsequent assignment pursuant to Section 6.3(c) or pursuant to
Section 1.1(c) or Section 1.2(e).

“Commitment Percentage” means, with respect to (i) any Committed Purchaser in a
Purchaser Group, the Commitment of such Committed Purchaser divided by the total
of all Commitments of the Committed Purchasers in such Purchaser Group, (ii) any
LC Participant in a Purchaser Group, the LC Sublimit Commitment of such LC
Participant divided by the total of all LC Sublimit Commitments of the LC
Participants in such Purchaser Group and (iii) the LC Bank, 100%.

“Committed Purchaser” means each Person listed as such (and its respective
Commitment) as set forth on the signature pages of this Agreement or in any
Assumption Agreement or Transfer Supplement.

“Company Notes” has the meaning set forth in the Sale Agreement.

“Compliance Certificate” means a certificate substantially in the form of Annex
G.

“Compliance Event” has the meaning set forth in the Credit Agreement.

“Concentration Limit” means, on any day, for each Payment Obligor, the product
of (i) the “Limit” for such Obligor specified in the following table determined
by reference to the credit rating of such Obligor under the column entitled
“Rating of Obligor” and (ii) the aggregate Outstanding Balance of all Eligible
Receivables on such day.

 

CATEGORY    RATING OF OBLIGOR1    LIMIT

A

   A-1/P-1 (A+/A1) or above    17.5%

B

   Below A-1/P-1 (A+/A1), but not lower than A-2/P-2 (BBB+/Baa1)    15.0%

C

   Below A-2/P-2 (BBB+/Baa1), but not lower than A-3/P-3 (BBB-/Baa3)    12.5%

D

   Below A-3/P-3 (BBB-/Baa3) or short-term and long-term both unrated   
10.0% for each of the two
largest such Obligors, otherwise 5.0%

 

1 

The long-term rating (specified in the parentheses above) will be used to
determine the Limit only if a short-term rating is not available. If such entity
is split rated, the lower of the two available ratings will be used to determine
the applicable Limit. If an Obligor’s payment obligation under a Contract is
guaranteed by such Obligor’s parent, “Rating of Obligor” will be determined by
reference to the parent’s ratings. If an Obligor is an Eligible “A” Foreign
Obligor or an Eligible “BBB” Foreign Obligor, the “Rating of Obligor” will be
determined without reference to the related long-term sovereign debt rating of
the country in which such Obligor is organized or located.

 

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“Concentration Reserve Percentage” means, at any time, the ratio (expressed as a
percentage) of (x) the largest of the following (i) the sum of the four largest
Group D Obligor Receivables balances with respect to Eligible Receivables less
the Contra Deduction Amount allocable to each such Obligor (up to the
Concentration Limit for each such Obligor), (ii) the sum of the two largest
Group C Obligor Receivables balances with respect to Eligible Receivables less
the Contra Deduction Amount allocable to each such Obligor (up to the
Concentration Limit for each such Obligor), (iii) the largest Group B Obligor
determined as follows: (x) in the case of a Group B Obligor which is an Obligor,
the Receivables balances of such Obligor with respect to Eligible Receivables
less the Contra Deduction Amount allocable to such Obligor (up to the
Concentration Limit for such Obligor) or (y) in the case of a Group B Obligor
which is an Eligible Supporting Letter of Credit Provider with respect to
Eligible Supporting Letters of Credit, the aggregate Outstanding Balance of all
Eligible Receivables which are fully supported by Eligible Supporting Letters of
Credit issued (or, if applicable, confirmed) by such Eligible Letter of Credit
Provider (up to the Concentration Limit for such Eligible Letter of Credit
Provider) and (iv) the largest Group A Obligor determined as follows: (x) in the
case of a Group A Obligor which is an Obligor, the Receivables balances of such
Obligor with respect to Eligible Receivables less the Contra Deduction Amount
allocable to such Obligor (up to the Concentration Limit for such Obligor) or
(y) in the case of a Group A Obligor which is an Eligible Supporting Letter of
Credit Provider with respect to Eligible Supporting Letters of Credit, the
aggregate Outstanding Balance of all Eligible Receivables which are fully
supported by Eligible Supporting Letters of Credit issued (or, if applicable,
confirmed) by such Eligible Letter of Credit Provider (up to the Concentration
Limit for such Eligible Letter of Credit Provider) to (y) the sum of the
aggregate Outstanding Balances of all Eligible Receivables in the Receivables
Pool at such time.

“Conduit Purchaser” means each commercial paper conduit that is a party to this
Agreement, as a purchaser, or that becomes a party to this Agreement, as a
purchaser pursuant to an Assumption Agreement, Transfer Supplement or otherwise.

“Consolidated” refers to the consolidation of any Person, in accordance with
GAAP, with its properly Consolidated Subsidiaries. References herein to a
Person’s Consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the Consolidated financial statements,
financial position, financial condition, liabilities, etc. of such Person and
its properly Consolidated Subsidiaries. For avoidance of doubt, no Unrestricted
Subsidiary (as defined in the Credit Agreement) shall be considered a
Consolidated Subsidiary of Targa.

 

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“Contract” means, with respect to any Receivable, any and all contracts,
instruments, agreements, leases, invoices, notes or other writings (including
electronic or other forms of writings consistent with standard industry billing
practices) pursuant to which such Receivable arises or that evidence such
Receivable or under which an Obligor becomes or is obligated to make payment in
respect of such Receivable.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

“Contra Deduction Amount” means, on any day, the sum of all amounts determined
as follows: for each Obligor, the aggregate amounts payable, if any, by the
applicable Originator to such Obligor as of the last day of the most recently
ended Fiscal Month other than (i) any such amounts payable subject to a Net-Out
Agreement and (ii) any such amounts payable asserted by such Obligor as an
offset to the Outstanding Balance of Eligible Receivables of such Obligor;
provided, that if, at any time, (x) prior to the Look Through Effective Date,
the aggregate amounts payable by the applicable Originator to such Obligor equal
or exceed the Outstanding Balance of Eligible Receivables of such Obligor at
such time, then the amount determined pursuant to this defined term for such
Obligor shall be the Outstanding Balance of Eligible Receivables of such Obligor
or (y) on or after the Look Through Effective Date, the aggregate amounts
payable by the applicable Originator to such Obligor equal or exceed the
Outstanding Balance of Eligible Receivables of such Obligor which are not fully
supported by Eligible Supporting Letters of Credit at such time, then the amount
determined pursuant to this defined term for such Obligor shall be the greater
of (i) $0 and (ii) Outstanding Balance of Eligible Receivables of such Obligor
which are not fully supported by Eligible Supporting Letters of Credit at such
time.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“CP Rate” means, for any Conduit Purchaser and for any Yield Period for any
Portion of Capital (a) the per annum rate equivalent to the weighted average
cost (as determined by the applicable Purchaser Agent and which shall include
commissions of placement agents and dealers, incremental carrying costs incurred
with respect to Notes of such Person maturing on dates other than those on which
corresponding funds are received by such Conduit Purchaser, other borrowings by
such Conduit Purchaser (other than under any Program Support Agreement) and any
other costs associated with the issuance of Notes) of or related to the issuance
of Notes that are allocated, in whole or in part, by the applicable Purchaser
Agent to fund or maintain such Portion of Capital (and which may be also
allocated in part to the funding of other assets of such Conduit Purchaser);
provided, that if any component of such rate is a discount rate, in calculating
the “CP Rate” for such Portion of Capital for such Yield Period, the applicable
Purchaser Agent shall for such component use the rate resulting from converting
such discount rate to an interest bearing equivalent rate per annum; provided,
further, that notwithstanding anything in this Agreement or the other
Transaction Documents to the contrary, the Seller agrees that any amounts
payable to the Purchasers in respect of Discount for any Yield Period with
respect to any Portion of Capital funded by such Purchaser at the CP Rate shall
include an amount equal to

 

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the portion of the face amount of the outstanding Notes issued to fund or
maintain such Portion of Capital that corresponds to the portion of the proceeds
of such Notes that was used to pay the interest component of maturing Notes
issued to fund or maintain such Portion of Capital, to the extent that such
Purchaser had not received payments of interest in respect of such interest
component prior to the maturity date of such maturing Notes (for purposes of the
foregoing, the “interest component” of Notes equals the excess of the face
amount thereof over the net proceeds received by such Purchaser from the
issuance of Notes, except that if such Notes are issued on an interest-bearing
basis its “interest component” will equal the amount of interest accruing on
such Notes through maturity) or (b) any other rate designated as the “CP Rate”
for such Conduit Purchaser in an Assumption Agreement or Transfer Supplement
pursuant to which such Person becomes a party as a Conduit Purchaser to this
Agreement, or any other writing or agreement provided by such Conduit Purchaser
to the Seller, the Servicer and the applicable Purchaser Agent from time to
time. Notwithstanding the foregoing, the “CP Rate” for any day on or after the
date set forth in clause (b) of the definition of “Facility Termination Date”
shall be the Default Rate.

“Credit Agreement” means the Second Amended and Restated Credit Agreement dated
as of October 3, 2012, among Targa, the lenders party thereto and Bank of
America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and
L/C Issuer, as amended, restated, supplemented or otherwise modified or waived
from time to time.

“Credit and Collection Policy” means, with respect to each of Targa and each
Originator, the receivables credit and collection policies in effect on the date
of this Agreement attached as Schedule I to this Agreement, each as may be
modified in compliance with this Agreement.

“Credit Sales” means, for any period, the aggregate initial principal balance of
Receivables originated by the Originators during such period.

“Daily Report” means each report, in substantially the form of Annex A-3 to this
Agreement, furnished by or on behalf of the Seller to the Administrator pursuant
to this Agreement.

“Days’ Sales Outstanding” means, for any Fiscal Month, an amount calculated as
of the last day of such Fiscal Month equal to: (a) the average of the
Outstanding Balance of all Pool Receivables as of the last day of each of the
three most recent Fiscal Months ended on such day divided by (b)(i) the
aggregate Credit Sales during the three Fiscal Months ended on such day divided
by (ii) 90.

“Debt” of any Person shall mean, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property or assets purchased by such Person, (d) all obligations of such Person
issued or assumed as the deferred purchase price of property or services (other
than current trade liabilities and current intercompany liabilities (but not any
refinancings, extensions, renewals or replacements thereof) incurred in the
ordinary course of business and maturing within 365 days after the incurrence
thereof), (e) all guarantees by such Person of Debt

 

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of others, (f) all capital lease obligations of such Person, (g) all payments
that such Person would have to make in the event of an early termination, on the
date Debt of such Person is being determined, in respect of outstanding swap
agreements, (h) the principal component of all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and (i) the principal component of all obligations of such person in respect of
bankers’ acceptances. The Debt of any person shall include the Debt of any
partnership in which such Person is a general partner, other than to the extent
that the instrument or agreement evidencing such Debt expressly limits the
liability of such person in respect thereof.

“Debtor Relief Laws” means the Bankruptcy Code and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.

“Deemed Collections” has the meaning set forth in Section 1.4(e)(ii) of this
Agreement.

“Default” means any event or condition that constitutes an Event of Default
under (and as defined in) the Credit Agreement or that, with the giving of any
notice, the passage of time, or both, would be an Event of Default.

“Default Rate” means, at any time, 2.0% per annum above the higher of (i) the
Base Rate at such time and (ii) the LIBOR Market Index Rate at such time plus
1% per annum.

“Default Ratio” means, for any Fiscal Month the ratio (expressed as a percentage
and rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward)
computed as of the last day of such Fiscal Month by dividing: (a) the aggregate
Outstanding Balance of all Pool Receivables that became Defaulted Receivables
during such month (other than Receivables that became Defaulted Receivables as a
result of an Insolvency Proceeding with respect to the Obligor thereof during
such month) by (b) the Credit Sales during the month that is three Fiscal Months
before such month.

“Defaulted Receivable” means a Receivable:

(a) as to which any payment, or part thereof, remains unpaid for 61 days or more
from the original due date for such payment, or

(b) without duplication (i) as to which an Insolvency Proceeding shall have
occurred with respect to the Obligor thereof or (ii) as to which any payment, or
part thereof, has been written off the Seller’s or the applicable Originator’s
books as uncollectible.

“Delinquency Ratio” means, for any Fiscal Month, the ratio (expressed as a
percentage and rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded
upward) computed as of the last day of such Fiscal Month by dividing: (a) the
aggregate Outstanding Balance of all Pool Receivables that were Delinquent
Receivables on such day by (b) the aggregate Outstanding Balance of all Pool
Receivables on such day.

 

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“Delinquent Receivable” means a Receivable as to which any payment, or part
thereof, remains unpaid for 31 days or more from the original due date for such
payment.

“Dilution” means the portion of any Receivable which is (i) reduced or cancelled
as a result of any of the events described in Section 1.4(e)(i)(A) or
(ii) subject to any specific dispute, offset, counterclaim or defense whatsoever
(except the discharge in bankruptcy of the Obligor thereof).

“Dilution Horizon Ratio” means, for any Fiscal Month, the ratio (expressed as a
percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded
upward) computed as of the last day of such Fiscal Month by dividing: (a) the
aggregate Credit Sales during the prior Fiscal Month, by (b) the Net Receivables
Pool Balance as of the last day of such Fiscal Month.

“Dilution Ratio” means, for any Fiscal Month, the ratio (expressed as a
percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded
upward) computed as of the last day of such Fiscal Month by dividing (a) the
greater of (i) .50% and (ii) the aggregate amount of Dilutions during such
Fiscal Month, excluding charge-offs related to Receivables arising during such
Fiscal Month by (b) the aggregate Credit Sales during the Fiscal Month that is
one month prior to such Fiscal Month.

“Dilution Reserve Percentage” means on any day, the product (expressed as a
percentage) of (a) the Dilution Horizon Ratio multiplied by (b) the sum of
(i) (x) the product of 2.25 times (y) the average of the Dilution Ratios for the
twelve most recent Fiscal Months and (ii) the Dilution Volatility Component.

“Dilution Volatility Component” means, for any Fiscal Month, the product
(expressed as a percentage) of (a) the positive difference, if any, between:
(i) the highest Dilution Ratio for any Fiscal Month during the twelve most
recent Fiscal Months and (ii) the arithmetic average of the Dilution Ratios for
such twelve Fiscal Months times (b) (i) the highest Dilution Ratio for any
Fiscal Month during the twelve most recent Fiscal Months divided by (ii) the
arithmetic average of the Dilution Ratios for such twelve Fiscal Months.

“Discount” means with respect to any Purchaser:

(a) for any Portion of Capital for any Yield Period with respect to any
Purchaser to the extent such Portion of Capital will be funded by such Purchaser
during such Yield Period through the issuance of Notes:

CPR x C x ED/360

 

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(b) for any Portion of Capital for any Yield Period with respect to any
Purchaser to the extent such Portion of Capital will not be funded by such
Purchaser during such Yield Period through the issuance of Notes or if the LC
Bank and/or any LC Participant makes or is deemed to have made a participation
advance in connection with any drawing under a Letter of Credit which accrues
Discount pursuant to Section 1.1(b) or Section 1.15(c) of this Agreement:

AR x C x ED/Year

 

      where: AR    =    the Alternate Rate for such Portion of Capital for such
Yield Period with respect to such Purchaser, C    =    the daily average Capital
with respect to such Portion of Capital during such Yield Period with respect to
such Purchaser, CPR    =    the CP Rate for the Portion of Capital for such
Yield Period with respect to such Purchaser, ED    =    the actual number of
days during such Yield Period, and Year    =    if such Portion of Capital is
funded based upon: (i) the LIBOR Market Index Rate, as applicable, 360 days, or
(ii) the Base Rate, 365 or 366 days, as applicable;

provided, that no provision of this Agreement shall require the payment or
permit the collection of Discount in excess of the maximum permitted by
applicable law; and provided further, that Discount for any Portion of Capital
shall not be considered paid by any distribution to the extent that at any time
all or a portion of such distribution is rescinded or must otherwise be returned
for any reason.

“DOL” means the Department of Labor, or any Governmental Authority succeeding to
any of its principal functions.

“Dollar” or “$” means lawful currency of the United States of America.

“Drawing Date” has the meaning set forth in Section 1.15(b) of this Agreement.

“Eligible “A” Foreign Obligor” means a Payment Obligor that is organized in, or
whose principal place of business is in (or, in the case of a Payment Obligor
that is an Eligible Supporting Letter of Credit Provider with respect to an
Eligible Supporting Letter of Credit, the office from which it is obligated to
make payment with respect to such Eligible Supporting Letter of Credit is in), a
country other than the United States which has a long-term sovereign debt rating
of at least “A” by Standard & Poor’s and “A2” by Moody’s.

 

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“Eligible “BBB” Foreign Obligor” means a Payment Obligor that is organized in,
or whose principal place of business is in (or, in the case of a Payment Obligor
that is an Eligible Supporting Letter of Credit Provider with respect to an
Eligible Supporting Letter of Credit, the office from which it is obligated to
make payment with respect to such Eligible Supporting Letter of Credit is in), a
country other than the United States which has a long-term sovereign debt rating
of at least “BBB-” by Standard & Poor’s or “Baa3” by Moody’s and is not an
Eligible “A” Foreign Obligor.

“Eligible Receivable” means, at any time, a Pool Receivable:

(a) the Obligor of which is (i) a resident of the United States or is an
Eligible “A” Foreign Obligor or an Eligible “BBB” Foreign Obligor, (ii) not
subject to any action of the type described in clause (f) of Exhibit V to this
Agreement, (iii) not an Affiliate of Targa, any Originator or the Seller and
(iv) not a Sanctioned Obligor;

(b) that is denominated and payable in U.S. dollars, and the Obligor with
respect to which has been instructed to remit Collections in respect thereof to
a Lock-Box Account in the United States;

(c) that does not have an original due date which is 35 days or more after the
date such Receivable was created;

(d) that arises under a duly authorized Contract for the sale and delivery of
goods or performance of services in the ordinary course of an Originator’s
business;

(e) that arises under a duly authorized Contract that is in full force and
effect and that is a legal, valid and binding obligation of the related Obligor,
enforceable against such Obligor in accordance with its terms;

(f) that conforms in all material respects with all material applicable Laws,
rulings and regulations in effect;

(g) that is not (i) the subject of any asserted dispute, offset, hold back,
defense, Adverse Claim or other claim except to the extent any of the foregoing
are included in the Contra Deduction Amount or (ii) a Net-Out Receivable;

(h) that satisfies in all material respects all applicable requirements of the
Credit and Collection Policy;

(i) that has not been modified, waived or restructured since its creation,
except in accordance with the applicable Credit and Collection Policy or as
otherwise permitted under this Agreement;

(j) in which the Seller has good and marketable title, free and clear of any
Adverse Claims, and that is freely assignable by the Seller (including without
any consent of the related Obligor unless such consent has already been
obtained);

 

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(k) for which the Administrator (for the benefit of each Purchaser) shall have a
valid and enforceable ownership or security interest, to the extent of the
Purchased Interest, and a valid and enforceable first priority perfected
security interest therein and in the Related Security and Collections with
respect thereto, in each case free and clear of any Adverse Claim;

(l) that constitutes an “account” or “general intangible” (each, as defined in
the UCC), and that is not evidenced by an “instrument” or “chattel paper” (each,
defined in the UCC);

(m) that is not a Defaulted Receivable or a Delinquent Receivable;

(n) for which Delinquent Receivables of the related Obligor do not exceed 50% of
the Outstanding Balance of all of such Obligor’s Receivables;

(o) that represents amounts fully earned and payable by the Obligor and is not
subject to the performance of any additional services by the Originator thereof
or any other Person; and

(p) that, if such Receivable is an Unbilled Receivable, no more than 31 days (or
60 days, in the case of Enterprise Products Operating LLC) have expired since
the date that such Receivable was created.

“Eligible Supporting Letter of Credit” means, at any time on or after the Look
Through Effective Date, with respect to any Pool Receivables of an Obligor, an
unconditional (except for any draft or documentation required to be presented as
a condition to drawings thereunder), irrevocable standby or commercial letter of
credit, at all times in form and substance reasonably acceptable to the
Administrator, issued (and, if applicable, confirmed) by an Eligible Supporting
Letter of Credit Provider, which letter of credit (i) supports the payment in
full of such Pool Receivables, (ii) names the Seller as the sole beneficiary
thereof and (iii) is payable in U.S. dollars.

“Eligible Supporting Letter of Credit Provider” means a bank whose short-term
debt is rated at least “A-2” by Standard & Poor’s and “P-2” by Moody’s.

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, authorizations, agreements
or governmental restrictions relating to pollution and the protection of the
environment or the release of any Hazardous Materials into the environment,
including those related to hazardous substances or wastes, air emissions and
discharges to waste or public systems.

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares

 

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of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with Targa within the meaning of Section 414(b) or (c) of
the Internal Revenue Code (and Sections 414(m) and (o) of the Internal Revenue
Code for purposes of provisions relating to Section 412 of the Internal Revenue
Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
(b) the withdrawal of Targa or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which such entity was a
“substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by Targa or any ERISA Affiliate from
a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, or the
treatment of a Pension Plan amendment as a termination, under Section 4041 or
4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a
Pension Plan (f) any event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (g) the determination that any Pension Plan or
Multiemployer Plan is considered an at-risk plan or a plan in endangered or
critical status within the meaning of Sections 430, 431 and 432 of the Internal
Revenue Code or Sections 303, 304 and 305 of ERISA; or (h) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon Targa or any ERISA Affiliate.

“Excess Concentration Amount” means, on any day, without duplication, the sum
of:

(i) for each Payment Obligor (other than a Special Obligor), (A) if such Payment
Obligor is an Obligor, the amount, if any, by which (x) the aggregate
Outstanding Balance of all Eligible Receivables of such Obligor less the Contra
Deduction Amount allocable to such Obligor exceeds (y) the applicable
Concentration Limit for such Payment Obligor or (B) if such Payment Obligor is
an Eligible Supporting Letter of Credit Provider, the amount, if any, by which
(x) the aggregate Outstanding Balance of all Eligible Receivables which are
fully supported by Eligible Supporting Letters of Credit issued (or confirmed)
by such Eligible Letter of Credit Provider exceeds (y) the Concentration Limit
for such Payment Obligor;

(ii) for all Payment Obligors which are Eligible “A” Foreign Obligors and
Eligible “BBB” Foreign Obligors, taken together, the amount, if any, by which
(x) the sum of (A) the aggregate Outstanding Balance of all Eligible Receivables
of all Eligible “A” Foreign Obligors and all Eligible “BBB” Foreign Obligors
which are Obligors, taken together, less the Contra Deduction Amount allocable
to such Obligors and (B) the aggregate Outstanding Balance of all

 

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Eligible Receivables which are fully supported by Eligible Supporting Letters of
Credit issued (or confirmed) by all Eligible “A” Foreign Obligors and all
Eligible “BBB” Foreign Obligors which are Eligible Supporting Letter of Credit
Providers, taken together, exceeds (y) the Foreign Payment Obligor Concentration
Limit; and

(iii) for each Special Obligor, the amount, if any, by which (x) the aggregate
Outstanding Balance of all Eligible Receivables of such Special Obligor less the
Contra Deduction Amount allocable to such Special Obligor exceeds (y) the
applicable Special Obligor Concentration Limit for such Special Obligor.

“Excluded Taxes” means, with respect to the Administrator, any Purchaser, the LC
Bank or any other recipient of any payment to be made by or on account of any
obligation of the Seller hereunder, (a) Taxes imposed on or measured by its
overall net income or gross receipts (however denominated), and franchise Taxes
imposed on it (in lieu of net income Taxes), by the jurisdiction (or any
political subdivision thereof) under the Laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Purchaser, in which its applicable Lending Office is located, or that are Other
Connection Taxes, (b) any branch profits Taxes imposed by the United States or
any similar Tax imposed by any other jurisdiction in which the Seller is
located, (c) any backup withholding Tax that is required by the Code to be
withheld from amounts payable to an Affected Person that has failed to comply
with clause (A) of Section 1.9(e)(2), (d) in the case of a Foreign Affected
Person (other than an assignee pursuant to a request by the Seller under
Section 1.10(b)), any United States withholding Tax that (i) is required to be
imposed on amounts payable to such Foreign Affected Person pursuant to the Laws
in force at the time such Foreign Affected Person becomes a party hereto (or
designates a new Lending Office) or (ii) is attributable to such Foreign
Affected Person’s failure or inability (other than as a result of a Change in
Law) to comply with clause (B) of Section 1.9(e)(2), except to the extent that
such Foreign Affected Person (or its assignor, if any) was entitled, at the time
of designation of a new Lending Office (or assignment), to receive additional
amounts from the Seller with respect to such withholding Tax pursuant to
Section 1.9(a) and (e) any United States federal withholding Taxes imposed under
FATCA.

“Exiting Notice” has the meaning set forth in Section 1.4(b)(ii) of this
Agreement.

“Exiting Purchaser” has the meaning set forth in Section 1.4(b)(ii) of this
Agreement.

“Facility Termination Date” means the earliest to occur of: (a) January 9, 2014,
(b) the Facility Termination Date declared by the Administrator, or deemed to
occur, in accordance with Section 2.2 of this Agreement, (c) the date the
Purchase Limit reduces to zero pursuant to Section 1.1(c) of this Agreement,
(d) with respect to each Purchaser Group, the date that the Commitment of all of
the Committed Purchasers in such Purchaser Group terminate pursuant to
Section 1.22, and (e) the date specified by the Seller upon not less than ten
days prior written notice to the Administrator.

“FATCA” means Sections 1471 through 1474 of the Code, as of Closing Date (or any
amended or successor version that is substantively comparable and not materially
more onerous to comply with), any current or future regulations or official
interpretations thereof and any agreements entered into pursuant to
Section 1471(b)(1) of the Code.

 

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“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to the Person
acting as Administrator on such day on such transactions as determined by the
Administrator.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.

“Fee Letter” has the meaning set forth in Section 1.5 of this Agreement.

“Fees” means the fees payable by the Seller to each member of each Purchaser
Group pursuant to the Fee Letter.

“Final Termination Date” means the latest of (i) the Facility Termination Date,
(ii) the date on which no Capital of or Discount in respect of the Purchased
Interest shall be outstanding and an amount equal to 100% of the LC
Participation Amount has been deposited in the LC Collateral Account or all
Letters of Credit have expired, and (iii) the date all amounts owed by the
Seller under or in connection with this Agreement to any Purchaser, any
Purchaser Agent, the Administrator and any other Indemnified Party or Affected
Person shall have been paid in full.

“Fiscal Month” means each calendar month.

“Fiscal Quarter” means the three calendar month period ending on the last day of
March, June, September or December.

“Fiscal Year” means any period of twelve consecutive Fiscal Months ending on
December 31; references to a Fiscal Year with a number corresponding to any
calendar year (e.g., the “2012 Fiscal Year”) refer to the Fiscal Year ending on
December 31 of such calendar year.

“Fitch” means Fitch, Inc.

“Foreign Affected Person” has the meaning set forth in Section 1.9(e)(2)(B) of
this Agreement.

 

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“Foreign Payment Obligor Concentration Limit” means, on any day, for all
Eligible “A” Foreign Obligors and all Eligible “BBB” Foreign Obligors, taken
together, the product of (i) 12.5% and (ii) the aggregate Outstanding Balance of
all Eligible Receivables on such day; provided, that the portion of the Foreign
Payment Obligor Concentration Limit comprised of Eligible “BBB” Foreign Obligors
on any day shall not exceed the product (a) 5.0% and (b) the aggregate
Outstanding Balance of all Eligible Receivables on such day.

“Funded Purchase” means a Purchase or deemed Purchase of undivided percentage
ownership interests in the Purchased Interest under this Agreement which (a) is
paid for in cash, including pursuant to Section 1.1(b) (other than through
reinvestment of Collections pursuant to Section 1.4(b)) or (b) is treated as a
Funded Purchase pursuant to Section 1.15(c).

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions, pronouncements, statements of the Accounting Principles
Board, the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, or any successor thereof or such other principles as
may be approved by a significant segment of the accounting profession in the
United States, that are applicable to the circumstances as of the date of
determination, consistently applied.

“General Partner” means Targa Resources GP LLC, a Delaware limited liability
company, which, as of the Closing Date, is a wholly owned subsidiary of Targa,
and which, as of the Closing Date, owns a two percent (2%) general partner
interest in, and is the sole general partner of, the Targa.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

“Group A Obligor” means any Payment Obligor whose Concentration Limit is
determined by reference to category “A” in the definition of “Concentration
Limit”.

“Group B Obligor” means any Payment Obligor whose Concentration Limit is
determined by reference to category “B” in the definition of “Concentration
Limit”.

“Group C Obligor” means any Payment Obligor whose Concentration Limit is
determined by reference to category “C” in the definition of “Concentration
Limit”.

“Group Commitment” means, with respect to any Purchaser Group, the aggregate of
the Commitments of all Committed Purchasers within such Purchaser Group.

“Group D Obligor” means any Payment Obligor whose Concentration Limit is
determined by reference to category “D” in the definition of “Concentration
Limit”.

“Guarantee” has the meaning provided in the Credit Agreement.

 

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“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“Indebtedness” has the meaning set forth in the Credit Agreement.

“Indemnified Party” has the meaning set forth in Section 3.1 of this Agreement.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Independent Director” has the meaning set forth in clause 3(c) of Exhibit IV to
this Agreement.

“Information Package” means each report, in substantially the form of Annex A-1
to this Agreement, furnished by or on behalf of the Seller to the Administrator
pursuant to this Agreement.

“Insolvency Proceeding” means: (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors of a Person
or any composition, marshalling of assets for creditors of a Person, or other
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors, in each case undertaken under U.S. Federal, state or
foreign law, including the Bankruptcy Code.

“IRS” means the United States Internal Revenue Service.

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of Law.

“LC Bank” has the meaning set forth in the preamble to this Agreement.

“LC Collateral Account” means the account designated as the LC Collateral
Account established and maintained by the Administrator (for the benefit of the
LC Bank and the LC Participants) or such other account as may be so designated
as such by the Administrator with notice to the Seller and the Servicer.

 

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“LC Participant” means each financial institution that is a party to this
Agreement as an LC Participant or that becomes a party to this Agreement as an
LC Participant pursuant to an Assumption Agreement or otherwise.

“LC Participation Amount” means, at any time, the sum of the then undrawn
amounts of all outstanding Letters of Credits. For the avoidance of doubt, if
any Letter of Credit expires or is surrendered without being drawn (in whole or
in part) then the LC Participation Amount shall automatically reduce by the face
amount of the Letter of Credit which is no longer outstanding.

“LC Sublimit Commitment” means, with respect to the LC Bank or any LC
Participant, the maximum aggregate amount which such LC Participant or LC Bank,
as applicable, is obligated to pay hereunder on account of drawings under all
Letters of Credit, in each case as set forth below its signature to this
Agreement or in the Assumption Agreement or Transfer Supplement pursuant to
which it became a Purchaser, as such amount may be modified in connection with
any subsequent assignment pursuant to Section 6.3(c) or in connection with a
change in the Purchase Limit pursuant to Section 1.1(c) or Section 1.2(e).

“Lending Office” means, as to any Purchaser, the office or offices as the
Purchaser may from time to time notify the Seller and the Administrator.

“Letter of Credit” means any stand-by or documentary letter of credit issued by
the LC Bank for the account of the Seller pursuant to this Agreement.

“Letter of Credit Application” means a letter of credit application
substantially in the form of Annex F hereto

“Letter of Credit Reimbursement Agreement” means each reimbursement agreement
among the Seller and one or more Originators, each of which must be in form and
substance reasonably acceptable to the Administrator and acknowledged in writing
by the Administrator to be a “Letter of Credit Reimbursement Agreement” for
purposes of this Agreement.

“LIBOR Market Index Rate” means, for any day, the one-month rate per annum for
U.S. dollar deposits as reported on the Reuters Screen LIBOR01 Page or any other
page that may replace such page from time to time for the purpose of displaying
offered rates of leading banks for London interbank deposits in United States
dollars, as of 11:00 a.m. (London time) on such date, or if such day is not a
Business Day, then the immediately preceding Business Day (or if not so
reported, then as determined by the applicable Purchaser Agent from another
recognized source for interbank quotation), in each case, changing when and as
such rate changes.

“Liquidity Agreement” means any agreement entered into in connection with this
Agreement pursuant to which a Liquidity Provider agrees to make purchases or
advances to, or purchase assets from, any Conduit Purchaser in order to provide
liquidity for such Conduit Purchaser’s Purchases.

“Liquidity Provider” means each bank or other financial institution that
provides liquidity support to any Conduit Purchaser pursuant to the terms of a
Liquidity Agreement.

 

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“Loan Party” has the meaning specified in the Credit Agreement.

“Lock-Box Account” means each account listed on Schedule II to this Agreement
and maintained, in each case in the name of the Seller and maintained by the
Seller at a bank or other financial institution acting as a Lock-Box Bank
pursuant to a Lock-Box Agreement for the purpose of receiving Collections.

“Lock-Box Agreement” means an agreement, among the Seller, the Servicer, a
Lock-Box Bank and the Administrator, governing the terms of the related Lock-Box
Accounts.

“Lock-Box Bank” means any of the banks or other financial institutions holding
one or more Lock-Box Accounts.

“Look Through Effective Date” means the date designated as such by the
Administrator (in its sole discretion) in a writing delivered by the
Administrator to the Seller and the Servicer.

“Loss Horizon” means, on any day, the ratio (expressed as a decimal) of (i) the
aggregate Credit Sales during the four most recent Fiscal Months by (ii) the Net
Receivables Pool Balance as of such day.

“Loss Reserve Percentage” means, on any day, an amount (expressed as a
percentage) equal to the product of (a) 2.25, (b) the highest three month
rolling average of the Default Ratios during the twelve most recent Fiscal
Months and (c) the Loss Horizon.

“Majority Purchaser Agents” means, at any time, Purchaser Agents whose aggregate
Ratable Shares exceed 50%.

“Material Adverse Effect” means (a) a material adverse effect on the business,
operations, assets, liabilities (actual or contingent) or financial condition of
Targa and its Restricted Subsidiaries, taken as a whole, (b) a material adverse
effect on the ability of Targa to perform its obligations under any Transaction
Document to which Targa is a party or (c) a material adverse effect on the
rights and remedies of the Administrator, the Purchaser Agents or the
Purchasers, as applicable, under any Transaction Document.

“Minimum Dilution Reserve Percentage” means, at any time, the product (expressed
as a percentage) of (a) the 12-month rolling average of the Dilution Ratio at
such time (b) the Dilution Horizon Ratio at such time.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which Targa or any ERISA Affiliate makes or is
obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.

 

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“Multiple Employer Plan” means a Plan which has two or more contributing
sponsors (including Targa or any ERISA Affiliate) at least two of whom are not
under common control, as such a plan is described in Section 4064 of ERISA.

“Net-Out Agreement” means a “net-out agreement”, an “exchange agreement” or
similar agreement with respect to purchases and sales between an Originator and
an Obligor (which is also a supplier to such Originator), pursuant to which
amounts payable by such Originator and such Obligor are settled on a net basis.

“Net-Out Receivable” means any Receivable subject to a Net-Out Agreement.

“Net Receivables Pool Balance” means, at any time, (a) the Outstanding Balance
of Eligible Receivables then in the Receivables Pool minus (b) the sum of
(i) the Excess Concentration Amount at such time and (ii) the Contra Deduction
Amount at such time.

“Notes” means short-term promissory notes issued, or to be issued, by any
Conduit Purchaser to fund its investments in accounts receivable or other
financial assets.

“Obligor” means, with respect to any Receivable, the Person obligated to make
payments pursuant to the Contract relating to such Receivable.

“OFAC” means the United States Department of the Treasury’s Office of Foreign
Assets Control.

“Order” has the meaning set forth in Section 1.21 of this Agreement.

“Originator” means each Person from time to time party to the Sale Agreement as
an Originator.

“Other Connection Taxes” means, with respect to any Purchaser, Taxes imposed as
a result of a present or former connection between such Person and the
jurisdiction imposing such Tax (other than connections arising from such Person
having executed, delivered, become a party to, performed its obligations under,
received payments under, received or perfected a security interest with respect
to the Receivables, engaged in any other transaction pursuant to or enforced any
Transaction Document, or sold or assigned an interest in its Commitment).

“Other Taxes” means any and all present or future stamp or documentary Taxes or
any other excise or property Taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Transaction Document.

“Outstanding Balance” means, for any Receivable at any time, the then
outstanding principal balance thereof.

“Owner” means Targa Liquids Marketing and Trade LLC, a Delaware limited
liability company.

 

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“Participant” has the meaning set forth in Section 6.3(b) of this Agreement.

“Patriot Act” has the meaning given such term in Section 6.17.

“Paydown Notice” means a written notice substantially in the form of Annex E.

“Payment Obligor” means an Obligor or, on or after the Look Through Effective
Date, if the payment obligations of such Obligor with respect to any Pool
Receivables of such Obligor are fully supported by an Eligible Supporting Letter
of Credit, the Eligible Supporting Letter of Credit Provider with respect to
such Eligible Supporting Letter of Credit.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any employee pension benefit plan (including a Multiple
Employer Plan or a Multiemployer Plan) that is maintained or is contributed to
by Targa and any ERISA Affiliate and is either covered by Title IV of ERISA or
is subject to the minimum funding standards under Section 412 of the Internal
Revenue Code.

“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture,
limited liability company or other entity, or a government or any political
subdivision or agency thereof.

“Plan” means any employee benefit plan within the meaning of Section 3(3) of
ERISA, maintained for employees of Targa or any ERISA Affiliate or any such Plan
to which Targa or any ERISA Affiliate is required to contribute on behalf of any
of its employees.

“Pool Assets” has the meaning set forth in Section 1.2(d) of this Agreement.

“Pool Receivable” means a Receivable in the Receivables Pool.

“Portion of Capital” means, with respect to any Purchaser and its related
Capital, the portion of such Capital being funded or maintained by such
Purchaser by reference to a particular interest rate basis.

“Pro Rata Share” means, for each Purchaser Group, such Purchaser Group’s
aggregate LC Sublimit Commitment or, in the case of the Purchaser Group which
includes the LC Bank, the LC Sublimit Commitment of the LC Bank, in each case
divided by the aggregate of the LC Sublimit Commitments of all Purchaser Groups.

“Program Support Agreement” means and includes any Liquidity Agreement and any
other agreement entered into by any Program Support Provider providing for:
(a) the issuance of one or more letters of credit for the account of any Conduit
Purchaser, (b) the issuance of one or more surety bonds for which the such
Conduit Purchaser is obligated to reimburse the applicable Program Support
Provider for any drawings thereunder, (c) the sale by such Conduit Purchaser to
any Program Support Provider of the Purchased Interest (or portions thereof)
maintained by such Conduit Purchaser and/or (d) the making of loans and/or other
extensions of credit to any Conduit Purchaser in connection with such Conduit
Purchaser’s securitization program contemplated in this Agreement, together with
any letter of credit, surety bond or other instrument issued thereunder.

 

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“Program Support Provider” means and includes with respect to each Conduit
Purchaser, any Liquidity Provider and any other Person (other than any customer
of such Conduit Purchaser) now or hereafter extending credit or having a
commitment to extend credit to or for the account of, or to make purchases from,
such Conduit Purchaser pursuant to any Program Support Agreement.

“Purchase” has the meaning set forth in Section 1.1(a) of this Agreement.

“Purchase and Sale Termination Event” has the meaning set forth in the Sale
Agreement.

“Purchase Date” means the date on which a Purchase is made pursuant to this
Agreement.

“Purchase Limit” means $200,000,000, as such amount may be reduced pursuant to
Section 1.1(c) or in connection with any Exiting Purchaser pursuant to
Section 1.22, or increased pursuant to Section 1.2(e) or (f). References to the
unused portion of the Purchase Limit shall mean, at any time, the Purchase Limit
minus the sum of the then outstanding Aggregate Capital plus the LC
Participation Amount.

“Purchase Notice” means an irrevocable written notice in substantially the form
of Annex B hereto.

“Purchased Interest” means, at any time, the undivided percentage ownership
interest of the Purchasers in: (a) each and every Pool Receivable now existing
or hereafter arising, (b) all Related Security with respect to such Pool
Receivables and (c) all Collections with respect to, and other proceeds of, such
Pool Receivables and Related Security. Such undivided percentage ownership
interest shall be computed as:

Aggregate Capital + Adjusted LC Participation Amount + Total Reserves

Net Receivables Pool Balance

The Purchased Interest shall be determined from time to time pursuant to
Section 1.3 of this Agreement.

“Purchaser” means each Conduit Purchaser, each Committed Purchaser, each LC
Participant and/or the LC Bank, as applicable.

“Purchaser Agent” means each Person acting as agent on behalf of a Purchaser
Group and designated as a Purchaser Agent for such Purchaser Group on the
signature pages to this Agreement or any other Person who becomes a party to
this Agreement as a Purchaser Agent pursuant to an Assumption Agreement or a
Transfer Supplement.

 

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“Purchaser Group” means each separate group consisting of Conduit Purchasers (if
any), one or more Committed Purchasers, a Purchaser Agent, one or more LC
Participants and the LC Bank (if applicable).

“Ratable Share” means, for each Purchaser Group, such Purchaser Group’s
aggregate Commitments divided by the aggregate Commitments of all Purchaser
Groups.

“Rating Agency” means, with respect to any Conduit Purchaser, each rating agency
chosen by such Conduit Purchaser (or its administrator) to rate its Notes.

“Rating Agency Condition” means, when applicable, with respect to any material
event or occurrence, receipt by the Administrator (or the applicable Purchaser
Agent) of written confirmation from each of Fitch, Standard & Poor’s and Moody’s
(and/or each other Rating Agency then rating the Notes of the applicable Conduit
Purchaser) that such event or occurrence shall not cause the rating on the then
outstanding Notes of any applicable Conduit Purchaser to be downgraded or
withdrawn.

“Receivable” means any right to payment from a Person pursuant to a Contract,
whether constituting an “account,” “chattel paper,” “payment intangible,”
“instrument” or “general intangible” (each, as defined in the UCC), arising from
the sale of goods and/or provision of services by the applicable Originator, and
includes, without limitation, the obligation of the Obligor thereon to pay any
finance charges, fees and other charges with respect thereto, including, without
limitation, with respect to any Unbilled Receivables, 100% of the amount to be
or thereafter invoiced to any related Obligor.

“Receivables Pool” means, at any time, all of the then outstanding Receivables
purchased by the Seller pursuant to the Sale Agreement.

“Register” has the meaning set forth in Section 6.3(c) of this Agreement.

“Reimbursement Obligation” has the meaning set forth in Section 1.15(c) of this
Agreement.

“Related Rights” means the property and rights described in clauses (ii) through
(viii) of Section 1.2(d).

“Related Security” means, with respect to any Pool Receivable:

(a) all of the Seller’s and the applicable Originator’s interest in any goods
(including returned goods), and documentation of title evidencing the shipment
or storage of any goods (including returned goods), the sale of which gave rise
to such Receivable,

(b) all instruments and chattel paper that may evidence such Receivable,

(c) all other security interests or liens and property subject thereto from time
to time purporting to secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together with all UCC
financing statements or similar filings relating thereto,

 

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(d) to the extent applicable to such Receivable, all of the Seller’s and the
applicable Originator’s rights, interests and claims under the Contracts
relating to such Receivable, and all guaranties, indemnities, insurance and
other agreements (including the related Contract), supporting obligations (as
defined in the UCC) or arrangements of whatever character from time to time
supporting or securing payment of such Receivable (including all Eligible
Supporting Letters of Credit, if any) or otherwise relating to such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise, and

(e) all of the Seller’s rights, interests and claims under the Sale Agreement
and the other Transaction Documents.

“Relevant Amounts” has the meaning set forth in Section 3.1 of this Agreement.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Required LC Participants” means, at any time, LC Participants whose aggregate
LC Sublimit Commitments are 66 2/3% or more of the aggregate of the LC Sublimit
Commitments of all LC Participants.

“Responsible Officer” means, as to any Person, the chief executive officer,
chief accounting officer, president, chief financial officer, treasurer,
assistant treasurer or controller of such Person. Any document delivered
hereunder that is signed by a Responsible Officer of a Person shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Person and such Responsible
Officer shall be conclusively presumed to have acted on behalf of such Person.

“Restricted Payments” has the meaning set forth in Section 1(n) of Exhibit IV to
this Agreement.

“Sale Agreement” means the Purchase and Sale Agreement, dated as of the Closing
Date, between the Seller and the Originators, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

“Sanctioned Country” means a country subject to a sanctions program identified
on the list maintained by OFAC.

“Sanctioned Obligor” means an Obligor which (i) if a natural Person, is either
(A) a resident of a Sanctioned Country or (B) a Sanctioned Person or (ii) if not
a natural Person, is organized under the Laws of a Sanctioned Country or any
political subdivision thereof.

 

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“Sanctioned Person” means (i) a Person named on the list of “Specially
Designated Nationals” or “Blocked Persons” maintained by OFAC or (ii)(A) an
agency of the government of a Sanctioned Country, (B) an organization controlled
by a Sanctioned Country, or (C) a Person resident in a Sanctioned Country, to
the extent subject to a sanctions program administered by OFAC.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Securities Laws” means the Securities Act of 1933, as amended, and/or the
Securities Exchange Act of 1934, as amended, as applicable, and all rules and
regulations promulgated thereunder.

“Seller” has the meaning set forth in the preamble to this Agreement.

“Servicer” has the meaning set forth in the preamble to this Agreement.

“Servicing Fee” has the meaning set forth in Section 4.6 of this Agreement.

“Servicing Fee Rate” means 1.00% per annum.

“Settlement Date” means the 25th day of each calendar month (or if such day is
not a Business Day, the next occurring Business Day) and such other dates as
agreed by the Seller, the Servicer, the Administrator and the Purchaser Agents;
provided, that while a Termination Event exists, the Settlement Date shall be
the date selected as such by the Administrator (with the consent or at the
direction of the Majority Purchaser Agents) from time to time (it being
understood that the Administrator (with the consent or at the direction of the
Majority Purchaser Agents) may select such Settlement Date to occur as
frequently as each Business Day) or, in the absence of any such selection, the
date which would be the Settlement Date pursuant to this definition.

“Solvent” means with respect to any Person on a particular date, that on such
date (a) the fair value of the property of such Person is greater than the total
amount of liabilities, including contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay such debts and liabilities as they mature, (d) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person’s property would constitute
an unreasonably small capital, and (e) such Person is able to pay its debts and
liabilities, contingent obligations and other commitments as they mature in the
ordinary course of business. The amount of contingent liabilities at any time
shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

“Special Obligor” means any Obligor set forth from time to time on Schedule III
or which the Administrator, with the consent, or at the direction, of the
Majority Purchaser Agents from time to time designates in writing to the Seller
and the Servicer as a Special Obligor. Any

 

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such designation shall be deemed to amend Schedule III. The Administrator may in
its sole discretion, or shall at the direction of the Majority Purchaser Agents,
upon 30 days prior written notice to the Seller and the Servicer, from time to
time designate any Special Obligor as ineligible for a “Special Obligor Limit”
as set forth in Schedule III (after which such Obligor shall not constitute a
Special Obligor unless thereafter designated as such) or reduce the “Special
Obligor Limit” set forth in Schedule III for any Special Obligor.

“Special Obligor Concentration Limit” means on any day, for each Special
Obligor, the product of (i) the “Special Obligor Limit” set forth in Schedule
III for such Obligor and (ii) the aggregate Outstanding Balance of all Eligible
Receivables on such day.

“SPV Material Adverse Effect” means a material adverse effect on:

(a) the assets, operations, business or financial condition of the Seller,

(b) the ability of any of any Originator, the Seller or Targa to perform its
obligations under this Agreement or any other Transaction Document to which it
is a party,

(c) the validity or enforceability of any of the Transaction Documents, or the
validity, enforceability or collectability of the Pool Receivables, or

(d) the status, perfection, enforceability or priority of the Administrator’s,
any Purchaser’s or the Seller’s interest in the Pool Assets.

“Standard & Poor’s” means Standard & Poor’s Ratings Services, a Standard &
Poor’s Financial Services LLC business.

“Sub-Servicer” has the meaning set forth in Section 4.1(d) of this Agreement.

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
Targa.

“Swap Contract” has the meaning set forth in the Credit Agreement.

“Swap Termination Value” has the meaning set forth in the Credit Agreement.

“Tangible Net Worth” means, with respect to any Person, the tangible net worth
of such Person as determined in accordance with GAAP.

 

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“Targa” has the meaning set forth in the preamble to this Agreement.

“Taxes” means, with respect to any Person, any and all present or future taxes,
charges, fees, levies, duties, deductions, withholdings or other assessments
imposed by a Governmental Authority, including any interest, additions to tax or
penalties applicable thereto.

“Termination Day” means each day that occurs on or after the Facility
Termination Date.

“Termination Event” has the meaning specified in Exhibit V to this Agreement.

“Total Reserves” means, on any day, an amount equal to (a) the sum of (i) the
Yield Reserve Percentage and (ii) the greater of (A) the Concentration Reserve
Percentage plus the Minimum Dilution Reserve Percentage and (B) the Dilution
Reserve Percentage plus the Loss Reserve Percentage times (b) the Net
Receivables Pool Balance on such day.

“Transaction Documents” means this Agreement, the Lock-Box Agreements, the Fee
Letter, the Sale Agreement, the Company Notes, the Letters of Credit, each
Letter of Credit Reimbursement Agreement and all other material certificates,
instruments, reports, notices, agreements and documents executed, delivered or
filed under or in connection with this Agreement, in each case as the same may
be amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof.

“Transfer Supplement” has the meaning set forth in Section 6.3(c) of this
Agreement.

“Unbilled Receivable” means a Receivable for which, at the time of
determination, an invoice or any other evidence of the obligation of the related
Obligor thereunder has not been duly submitted to such Obligor for payment of
the amount thereof.

“UCC” means the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction.

“Unmatured Termination Event” means an event that, with the giving of notice or
lapse of time, or both, would constitute a Termination Event.

“Unrestricted Subsidiary” has the meaning set forth in the Credit Agreement.

“U.S.” means the United States of America.

“Weekly Report” means each report, in substantially the form of Annex A-2 to
this Agreement, furnished by or on behalf of the Seller to the Administrator
pursuant to this Agreement.

“Yield Period” means (a) with respect to any Portion of Capital funded by the
issuance of Notes, (i) initially the period commencing on (and including) the
date of the initial Purchase or funding of such Portion of Capital and ending on
(but not including) the next occurring Settlement Date, and (ii) thereafter,
each period commencing on (and including) the first day

 

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after the last day included in the immediately preceding Yield Period for such
Portion of Capital and ending on (but not including) the next occurring
Settlement Date; and (b) with respect to any Portion of Capital not funded by
the issuance of Notes, (i) initially the period commencing on (and including)
the date of the initial Purchase or funding of such Portion of Capital and
ending such number of days later (including a period of one day) as the
Administrator (with the consent or at the direction of the applicable Purchaser
Agent) shall select, and (ii) thereafter, each period commencing on the last day
of the immediately preceding Yield Period for such Portion of Capital and ending
such number of days later (including a period of one day) as the Administrator
(with the consent or at the direction of the applicable Purchaser Agent) shall
select; provided, that

(i) any Yield Period (other than of one day) which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding Business
Day; provided, if Discount in respect of such Yield Period is computed by
reference to the LIBOR Market Index Rate, and such Yield Period would otherwise
end on a day which is not a Business Day, and there is no subsequent Business
Day in the same calendar month as such day, such Yield Period shall end on the
next preceding Business Day;

(ii) in the case of any Yield Period of one day, (A) if such Yield Period is the
initial Yield Period for a Purchase hereunder (other than a reinvestment), such
Yield Period shall be the day of such Purchase; (B) any subsequently occurring
Yield Period which is one day shall, if the immediately preceding Yield Period
is more than one day, be the last day of such immediately preceding Yield
Period, and, if the immediately preceding Yield Period is one day, be the day
next following such immediately preceding Yield Period; and (C) if such Yield
Period occurs on a day immediately preceding a day which is not a Business Day,
such Yield Period shall be extended to the next succeeding Business Day; and

(iii) in the case of any Yield Period for any Portion of Capital which commences
before the Facility Termination Date and would otherwise end on a date occurring
after the Facility Termination Date, such Yield Period shall end on such
Facility Termination Date and the duration of each Yield Period which commences
on or after the Facility Termination Date shall be of such duration as shall be
selected by the Administrator (with the consent or at the direction of the
applicable Purchaser Agent).

“Yield Reserve Percentage” means, at any time, the following product (expressed
as a percentage):

            {(BR + SFR) x 1.5(DSO)}

360

where

BR     =         the Base Rate in effect at such time,

 

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DSO     =         the Days’ Sales Outstanding, and

SFR     =         the Servicing Fee Rate.

2. Other Terms; Usage. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. All terms used in Article 8 or 9 of
the UCC in the State of New York, and not specifically defined herein, are used
herein as defined in such Article 8 or 9, as applicable. Unless the context
otherwise requires, “or” means “and/or,” and “including” (and with correlative
meaning “include” and “includes”) means including without limiting the
generality of any description preceding such term.

 

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EXHIBIT II

CONDITIONS TO PURCHASES

1. Conditions Precedent to Initial Purchase. The initial Purchase under this
Agreement is subject to the conditions precedent that the Administrator and each
Purchaser Agent shall have received on or before the date of such Purchase, each
in form and substance (including the date thereof) reasonable satisfactory to
the Administrator and each Purchaser Agent the following:

(a) A counterpart of this Agreement and the other Transaction Documents to be
dated as of the Closing Date, each duly executed by the parties thereto.

(b) Copies of: (i) resolutions authorizing the execution, delivery and
performance by Targa, the Seller, each Originator and the Servicer of this
Agreement and the other Transaction Documents to which it is a party;
(ii) evidence of other necessary corporate action and governmental approvals, if
any, with respect to this Agreement and the other Transaction Documents; and
(iii) the organizational documents of Targa, the Seller, each Originator and the
Servicer, in each case, certified by the Secretary or Assistant Secretary of the
applicable party and, in the case of good standing certificates, certificates of
qualification, certificates of formation or similar documents, the applicable
secretary of state.

(c) A certificate of the Secretary or Assistant Secretary of Targa, the Seller,
the Originators and the Servicer certifying the names and true signatures of its
officers who are authorized to sign this Agreement and the other Transaction
Documents to which it is a party. Until the Administrator and each Purchaser
Agent receives a subsequent incumbency certificate from Targa, the Seller, an
Originator or the Servicer, as the case may be, the Administrator and each
Purchaser Agent shall be entitled to rely on the last such certificate delivered
to it by the Seller, such Originator or the Servicer, as the case may be.

(d) Financing statements, in form and substance suitable for filing, each to be
sent for filing by the Administrator on or before the Closing Date under the UCC
of the jurisdiction of organization of the debtor named therein in order to
perfect the interests of the Seller and the Administrator (for the benefit of
the Purchaser Agents and the Purchasers) contemplated by this Agreement and the
Sale Agreement.

(e) Evidence satisfactory to the Administrator of the termination or release of
Adverse Claims of any Person in any Pool Assets, together with UCC termination
statements or partial releases, in form and substance suitable for filing, to
terminate or release such Adverse Claims as a matter of record, each to be sent
for filing on or before the Closing Date in the jurisdiction in which the
related initial financing statements were filed.

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(f) Completed UCC search reports from the State of Delaware, dated within 10
Business Days prior to the Closing Date, listing all financing statements filed
with the secretary of state in such jurisdiction, that name Targa, any
Originator or the Seller as debtor showing no Adverse Claims on any Pool Assets
(other than those which have been released as described in the preceding clause
(e)).

(g) Favorable opinions, addressed to the Administrator, each Purchaser, each
Purchaser Agent and each Liquidity Provider, in form and substance reasonably
satisfactory to the Administrator and each Purchaser Agent, of Bracewell &
Giuliani LLP, counsel for Targa, the Seller, the Originators and the Servicer
covering such matters as the Administrator or any Purchaser Agent may reasonably
request, including, without limitation, organizational and enforceability
matters, certain bankruptcy matters, and certain UCC perfection and priority
matters (based on the search results referred to in clause (f) above and the
officer’s certificate referred to in clause (c) above).

(h) Satisfactory results of a review, field examination and audit (performed by
representatives of the Administrator) of the Servicer’s collection, operating
and reporting systems, the Credit and Collection Policy of each Originator,
historical receivables data and accounts, including satisfactory results of a
review of the Servicer’s operating location(s) and satisfactory review and
approval of the Eligible Receivables in existence on the date of the initial
Purchase under this Agreement.

(i) A pro forma Information Package representing the performance of the
Receivables Pool for the most recent Fiscal Month before closing.

(j) Evidence of payment by the Seller of all accrued and unpaid fees (including
those contemplated by the Fee Letter), costs and expenses to the extent invoiced
and due and payable on the Closing Date, including any such costs, fees and
expenses arising under or referenced in Section 6.4 of this Agreement and the
Fee Letter.

(k) Good standing certificates with respect to each of the Seller, each
Originator and the Servicer issued by the Secretary of State (or similar
official) of the state of each such Person’s organization or formation.

(l) Such other information with respect to the Receivables as the Administrator
or any Purchaser Agent may reasonably request.

(m) Such other approvals, opinions or documents as the Administrator or any
Purchaser Agent may reasonably request.

2. Conditions Precedent to All Funded Purchases, Reinvestments and Issuance of
Letters of Credit. Each Funded Purchase pursuant to Section 1.1(a) and each
deemed Funded Purchase pursuant to Section 1.1(b) and each issuance of any
Letter of Credit shall be subject to the further conditions precedent that:

(a) the Servicer shall have delivered to the Administrator and each Purchaser
Agent on or before such Purchase or issuance, as the case may be, in form and
substance reasonably satisfactory to the Administrator and each Purchaser Agent,
the most recent Information Package

 

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required to be delivered by such date and, if required by the terms hereof, the
most recent Weekly Report or the most recent Daily Report required to be
delivered by such date, to reflect the level of the Aggregate Capital, the LC
Participation Amount and Total Reserves and the calculation of the Purchased
Interest after such Funded Purchase or issuance, as the case may be, and a
completed Purchase Notice;

(b) on the date of such Funded Purchase (or deemed Funded Purchase) and the date
of each such issuance, as the case may be, the following statements shall be
true (and acceptance of the proceeds of such Funded Purchase (or deemed Funded
Purchase) or the benefits of such issuance shall be deemed a representation and
warranty by the Seller that such statements are then true):

(i) the representations and warranties contained in Exhibit III to this
Agreement are true and correct in all material respects or, if any such
representation or warranty is by its terms subject to a materiality
qualification, an SPV Material Adverse Effect qualification or a Material
Adverse Effect qualification, such representation or warranty is true and
correct in all respects, on and as of the date of such Funded Purchase (or
deemed Funded Purchase) or issuance, as the case may be, as though made on and
as of such date except for representations and warranties which apply as to an
earlier date (in which case such representations and warranties shall be true
and correct in all material respects or, if such representation or warranty is
by its terms subject to a materiality qualification, an SPV Material Adverse
Effect qualification or a Material Adverse Effect qualification, such
representation or warranty shall be true and correct in all respects, as of such
earlier date);

(ii) no Termination Event or Unmatured Termination Event exists or would result
from such Funded Purchase (or deemed Funded Purchase) or issuance, as the case
may be;

(iii) the sum of the Aggregate Capital plus the LC Participation Amount, after
giving effect to any such Funded Purchase (or deemed Funded Purchase) or
issuance, as the case may be, and any concurrent reinvestment Purchase, is not
greater than the Purchase Limit and the Purchased Interest does not exceed 100%;
and

(iv) the Facility Termination Date has not occurred; and

(c) in the case of an issuance of a Letter of Credit, a Letter of Credit
Reimbursement Agreement shall be in full force and effect.

3. Conditions Precedent to Reinvestment Purchases. Each reinvestment Purchase
pursuant to Section 1.4(b) shall be subject to the conditions precedent that:

(i) the Purchased Interest does not exceed 100%; and

(ii) the Facility Termination Date has not occurred.

 

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EXHIBIT III

REPRESENTATIONS AND WARRANTIES

1. Representations and Warranties of the Seller. The Seller represents and
warrants to the Administrator, each Purchaser Agent and each Purchaser as of the
Closing Date and as of the date of each Purchase that:

(a) Existence and Power. The Seller is a limited liability company duly formed,
validly existing and in good standing under the Laws of the State of Delaware,
and has all organizational power and all governmental licenses, authorizations,
consents and approvals required to carry on its business in each jurisdiction in
which its business is conducted unless the failure to have such power,
authority, licenses, authorizations consents of approvals could not be
reasonably expected to have an SPV Material Adverse Effect.

(b) Seller and Governmental Authorization, Contravention. The execution,
delivery and performance by the Seller of this Agreement and each other
Transaction Document to which it is a party including the use of the proceeds of
purchases and reinvestments: (i) are within the Seller’s organizational powers
and legal rights, (ii) have been duly authorized by all necessary organizational
action, (iii) require no authorization, approval or other action by or in
respect of, and no notice to or filing with (other than the filing of UCC
financing statements and continuation statements) any Governmental Authority or
other Person, and (iv) do not (A) contravene, or constitute a default under, any
provision of (1) applicable Law or regulation or (2) the organizational
documents of the Seller or (3) any agreement, judgment, award, injunction,
order, writ, decree or other instrument binding upon the Seller or (B) result in
the creation or imposition of any lien (other than liens in favor of the
Administrator under the Transaction Documents) on assets of the Seller. This
Agreement and the other Transaction Documents to which the Seller is a party
have been duly executed and delivered by the Seller.

(c) Binding Effect of Agreement. Each of this Agreement and each other
Transaction Document to which it is a party constitutes the legal, valid and
binding obligations of the Seller enforceable against the Seller in accordance
with its respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar Laws affecting the
enforcement of creditors’ rights generally and by general principles of equity,
regardless of whether enforceability is considered in a proceeding in equity or
at law.

(d) Accuracy of Information. No report, financial statement, certificate or
other written information furnished by or on behalf of Seller to the
Administrator or any Purchaser Agent in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
or under any other Transaction Document (in each case, as modified or
supplemented by other information so furnished) when taken as a whole contains
any material misstatement of fact or omits to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that, with respect to projected
financial information, Seller represents only

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that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time of preparation; provided, further, that, with
respect to pro forma financial information, Seller represents only that such
information was prepared in good faith and reflects, in all material respects,
such pro forma financial information is in accordance with assumptions and
requirements of GAAP for pro forma presentation and based upon such other
assumptions that are believed to be reasonable at the time of preparation and,
to the extent material, are disclosed as part of such pro forma financial
information.

(e) Actions, Suits and Proceedings. There are no actions, suits or proceedings
pending or, to the best of the Seller’s knowledge, threatened against or
affecting the Seller or its properties, in or before any court, arbitrator or
governmental body which could reasonably be expected to have an SPV Material
Adverse Effect. The Seller is not in default with respect to any order of any
court, arbitrator or governmental body.

(f) Accuracy of Exhibits; Lock-Box Arrangements. The names and addresses of all
the Lock-Box Banks together with the account numbers of the Lock-Box Accounts at
such Lock-Box Banks and any related lock-box or post office box, are specified
in Schedule II to this Agreement (or at such other Lock-Box Banks and/or with
such other Lock-Box Accounts as have been notified to the Administrator), and
all Lock-Box Accounts are subject to Lock-Box Agreements. All information on
each Exhibit, Schedule or Annex to this Agreement or the other Transaction
Documents (as updated by the Seller from time to time) is true and complete. The
Seller has delivered a copy of all Lock-Box Agreements to the Administrator. The
Seller has not granted any interest in any Lock-Box Account (or any related
lock-box or post office box) to any Person other than the Administrator and,
upon delivery to a Lock-Box Bank of the related Lock-Box Agreement, the
Administrator will have exclusive ownership and control of the Lock-Box Account
at such Lock-Box Bank.

(g) No SPV Material Adverse Effect, Unmatured Termination Event or Termination
Event. Since the date of organization of the Seller as set forth in its
certificate of formation, there has been no SPV Material Adverse Effect. No
event has occurred and is continuing or would result from a Purchase in respect
of the Purchased Interest or from the application of the proceeds therefrom,
that constitutes a Termination Event or an Unmatured Termination Event.

(h) Names and Location. The Seller has not used any company names, trade names
or assumed names other than its name set forth on the signature pages of this
Agreement or as otherwise notified to the Administrator pursuant to
Section 1(b)(viii) of Exhibit IV. Under the UCC, the Seller is “located” in
Delaware or such other jurisdiction as notified to the Administrator pursuant to
Section 1(b)(viii) of Exhibit IV. The office where the Seller keeps its records
concerning the Receivables is at the address set forth below its signature to
this Agreement] or such other location as the Seller or Targa may notify the
Administrator.

(i) Margin Stock, No Fraudulent Conveyance. The Seller is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulations T, U and X, as issued by the Federal
Reserve Board), and no proceeds of any Purchase will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock. No Purchase hereunder constitutes a
fraudulent transfer or conveyance under any United States federal or applicable
state bankruptcy of insolvency Laws or is otherwise void or voidable under such
or similar Laws or principles or for any other reason.

 

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(j) Eligible Receivables. Each Pool Receivable included as an Eligible
Receivable in the calculation of the Net Receivables Pool Balance is an Eligible
Receivable.

(k) Credit and Collection Policy. The Seller has complied in all material
respects with the Credit and Collection Policy of each Originator with regard to
each Receivable originated by such Originator and the related Contract.

(l) Investment Company Act. The Seller is not an “investment company,” or a
company “controlled” by an “investment company,” within the meaning of the
Investment Company Act of 1940, as amended.

(m) No Unmatured Termination Event or Termination Event. No Termination Event or
Unmatured Termination Event has occurred and is continuing.

(n) Taxes. Except as could not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect or an SPV Material
Adverse Effect, the Seller has filed all federal, state and other Tax returns
and reports required to be filed, and has paid all federal, state and other
Taxes, assessments, fees and other governmental charges levied or imposed upon
them or their properties, income or assets otherwise due and payable, except
those which are being contested in good faith by appropriate proceedings
diligently conducted and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed Tax assessment against the Seller
that would, if made, have a Material Adverse Effect or SPV Material Adverse
Effect. The Seller is not party to any Tax sharing agreement.

(o) Compliance with Applicable Laws. The Seller is in compliance with the
requirements of all applicable Laws, rules, regulations and orders of all
Governmental Authorities except to the extent that the failure to comply could
not be reasonably expected to have an SPV Material Adverse Effect.

(p) Licenses and Labor Controversies.

(i) The Seller has not failed to obtain any licenses, permits, franchises or
other governmental authorizations necessary to the ownership of its properties
or to the conduct of its business unless such failure could not reasonably be
expected to have an SPV Material Adverse Effect.

(ii) There are no labor controversies pending against the Seller that have had
(or could be reasonably expected to have) an SPV Material Adverse Effect.

(q) Solvency. On the Closing Date (before and after giving effect to the
Purchase on the Closing Date), the Seller is Solvent.

 

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2. Representations and Warranties of Targa. Targa represents and warrants to the
Administrator, each Purchaser Agent and each Purchaser as of the Closing Date
and as of the date of each Purchase that:

(a) Existence, Qualification and Power; Compliance with Laws. Targa is (i) duly
organized or formed, validly existing and, as applicable, in good standing under
the Laws of its jurisdiction of its incorporation or organization, (ii) has all
requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (A) own or lease its assets and carry
on its business and (B) execute, deliver and perform its obligations under the
Transaction Documents to which it is a party, (iii) is duly qualified and is
licensed and, as applicable, in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (iv) is in
compliance with all Laws (excluding Environmental Laws that are the subject of
Section 5.09 of the Credit Agreement, federal, state and local income Tax Laws
that are the subject of Section 5.11 of the Credit Agreement and ERISA that is
the subject of Section 5.12 of the Credit Agreement); except in each case
referred to in clause (ii)(A), (iii) or (iv), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.

(b) Authorization, No Contravention. The execution, delivery and performance by
Targa of this Agreement and each other Transaction Document to which it is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of Targa’s organization documents; (b) conflict with or result in any breach or
contravention of, or the creation of any lien under (other than liens permitted
by the Transaction Documents), or require any payment to be made under (i) any
Contractual Obligation (other than the Transaction Documents) to which Targa is
a party or affecting Targa or its properties or any of its Subsidiaries or
(ii) any material order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which Targa or its property is subject; or
(c) violate any material Law. Targa is in compliance with all Contractual
Obligations referred to in clause (b)(i), except to the extent that failure to
do so could not reasonably be expected to have a Material Adverse Effect.

(c) Governmental Authorization; Other Consents. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, Targa of this Agreement or any other Transaction Document except for
(i) filings necessary to perfect and maintain the perfection of the Liens
created under the Transaction Documents, (ii) the authorizations, approvals,
actions, notices and filings which have been duly obtained, taken, given or made
and are in full force and effect and (iii) those approvals, consents,
exemptions, authorizations or other action, notices or filings, the failure of
which to obtain or make could not reasonably be expected to have a Material
Adverse Effect.

(d) Binding Effect. This Agreement has been, and each other Transaction Document
to which Targa is a party, when delivered hereunder, will have been, duly
executed and delivered by Targa. This Agreement constitutes, and each other
Transaction Document to which Targa is a party when so delivered will
constitute, a legal, valid and binding obligation of

 

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Targa, enforceable against Targa in accordance with its terms, except as such
enforceability may be limited by Debtor Relief Laws and by general principles of
equity, regardless of whether enforceability is considered in a proceeding in
equity or at law.

(e) Accuracy of Information. No report, financial statement, certificate or
other written information furnished by or on behalf of Targa to the
Administrator or any Purchaser Agent in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
or under any other Transaction Document (in each case, as modified or
supplemented by other information so furnished) when taken as a whole contains
any material misstatement of fact or omits to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that, with respect to projected
financial information, Targa represents only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time of
preparation; provided, further, that, with respect to pro forma financial
information, Targa represents only that such information was prepared in good
faith and reflects, in all material respects, such pro forma financial
information is in accordance with assumptions and requirements of GAAP for pro
forma presentation and based upon such other assumptions that are believed to be
reasonable at the time of preparation and, to the extent material, are disclosed
as part of such pro forma financial information.

(f) Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of Targa, threatened in writing, at law, in equity,
in arbitration or before any Governmental Authority, against Targa or any
Subsidiary thereof or against any of their respective properties or revenues, or
that is contemplated by Targa against any other Person that (a) purport to
affect or pertain to this Agreement or any other Transaction Document, or any of
the transactions contemplated hereby, or (b) either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.

(g) No Default. Targa is not in default under or with respect to any Contractual
Obligation that could, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. No Event of Default has occurred and
is continuing or would result from the consummation of the transactions
contemplated by this Agreement or any other Transaction Document.

(h) Credit and Collection Policy. Targa has complied in all material respects
with the Credit and Collection Policy.

(i) Investment Company Act. No Loan Party nor any Person Controlling any Loan
Party nor any Subsidiary thereof is or is required to be registered as an
“investment company” under the Investment Company Act of 1940.

(j) Financial Information; No Material Adverse Effect. (i) The audited
Consolidated balance sheet of Targa and its Subsidiaries for the fiscal year
ended December 31, 2011 and the Consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal year of Targa and its
Subsidiaries, including the notes thereto, were prepared in accordance with GAAP
consistently applied throughout the period covered thereby,

 

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except as otherwise expressly noted therein, and fairly present in all material
respects the financial condition of Targa and its Subsidiaries as of the date
thereof and their Consolidated results of operations for the period covered
thereby except as otherwise expressly noted therein.

(ii) The unaudited Consolidated financial statements of Targa and its
Consolidated Subsidiaries at September 30, 2012 were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein, and fairly present in all material respects
the Consolidated financial condition of Targa and its Consolidated Subsidiaries
as of the date thereof and their Consolidated results of operations for the
period covered thereby, subject, in each case, to the absence of footnotes and
to normal year-end audit adjustments.

(iii) Since December 31, 2011, there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.

(k) Taxes. Except as could not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect, Targa and each
Restricted Subsidiary thereof have filed all federal, state and other Tax
returns and reports required to be filed, and have paid all federal, state and
other Taxes, assessments, fees and other governmental charges levied or imposed
upon them or their properties, income or assets otherwise due and payable,
except those which are being contested in good faith by appropriate proceedings
diligently conducted and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed Tax assessment against Targa or any
Subsidiary thereof that would, if made, have a Material Adverse Effect.

(l) Compliance with Laws. Each of the Servicer and each Restricted Subsidiaries
thereof are in compliance in all material respects with the requirements of all
Laws (except for Environmental Laws that are the subject of Section 5.09 of the
Credit Agreement, federal and state income Tax Laws that are the subject of
Section 5.11 of the Credit Agreement and ERISA that is the subject of
Section 5.12 of the Credit Agreement) and all orders, writs, injunctions and
decrees applicable to it or to its respective properties, except in such
instances in which (a) such requirement of Law or order, writ, injunction or
decree is being contested in good faith by appropriate proceedings diligently
conducted or (b) the failure to comply therewith, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

(m) Acts of God and Labor Controversies. Neither the business nor the properties
of Targa or any Restricted Subsidiary thereof has been affected by any fire,
explosion, accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance), that either individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.

(n) Solvency. On the Closing Date, Targa is Solvent.

 

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(o) Unrestricted Subsidiary. The Seller is an Unrestricted Subsidiary or an
Immaterial Unrestricted Subsidiary (as defined in the Credit Agreement).

3. Representations, Warranties and Agreements Relating to the Security Interest.
The Seller hereby makes the following representations, warranties and agreements
with respect to the Receivables and Related Rights as of the Closing Date and as
of the date of each Purchase:

(a) The Receivables.

(i) Creation and Perfection. This Agreement creates a valid and continuing
security interest (as defined in the applicable UCC) in the Pool Receivables in
favor of the Administrator (for the benefit of the Purchaser Agents and the
Purchasers), which security interest is perfected and prior to all other Adverse
Claims, and is enforceable as such as against creditors of and purchasers from
the Seller.

(ii) [Reserved].

(iii) Ownership of Receivables. Before the consummation of the sales
contemplated by this Agreement, the Seller owns the Pool Receivables and Related
Security free and clear of any Adverse Claim.

(iv) Perfection and Related Security. Appropriate financing statements are on
file in the proper filing office in the appropriate jurisdictions under
applicable Law in order to perfect the sale of the Receivables and Related
Security from the applicable Originator to the Seller pursuant to the Sale
Agreement, and the sale and security interest therein from the Seller to the
Administrator under this Agreement.

(b) The Lock-Box Accounts.

(i) Nature of Accounts. Each Lock-Box Account constitutes a “deposit account”
within the meaning of the applicable UCC.

(ii) Ownership. The Seller owns the Lock-Box Accounts free and clear of any
Adverse Claim.

 

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(c) Priority. Other than the transfer of the Receivables to the Seller and the
Administrator under the Sale Agreement and this Agreement, respectively, and/or
the security interest granted to the Seller and the Administrator pursuant to
the Sale Agreement and this Agreement, respectively, neither the Seller nor any
Originator has pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Receivables transferred or purported to be
transferred under the Transaction Documents, the Lock-Box Accounts or any
subaccount thereof, except for any such pledge, grant or other conveyance which
has been released or terminated. No effective financing statements against
either the Seller or such Originator include a description of collateral
including Receivables transferred or purported to be transferred under the
Transaction Documents, the Lock-Box Accounts or any subaccount thereof, other
than any financing statement (i) relating to the sale thereof by such Originator
to the Seller under the Sale Agreement, (ii) relating to the security interest
granted to the Administrator under this Agreement, or (iii) that has been
released or terminated.

(d) Survival of Supplemental Representations. Notwithstanding any other
provision of this Agreement or any other Transaction Document, the
representations contained in this Section 3 shall be continuing, and remain in
full force and effect until such time as the Purchased Interest and all other
obligations under this Agreement have been finally and fully paid and performed.

(e) [Reserved].

(f) Servicer to Cooperate with Administrator to Maintain Perfection and
Priority. In order to evidence the interests of the Administrator under this
Agreement, the Seller and the Servicer shall, at the reasonable request of the
Administrator, from time to time take such action, or execute and deliver such
instruments as may be necessary (including, without limitation, such actions as
are reasonably requested by the Administrator or any Purchaser Agent) to
maintain and perfect, as a first-priority interest, the Administrator’s security
interest in the Receivables, Related Security and Collections. Notwithstanding
anything else in the Transaction Documents to the contrary, neither the Seller
nor the Servicer shall have any authority to file a termination, partial
termination, release, partial release, or any other amendment to any financing
statement filed in connection with any Transaction Document (other than
continuation statements), without the prior written authorization of the
Administrator until the Final Termination Date.

4. Ordinary Course of Business. Each of the Seller and the Purchasers represents
and warrants, as to itself, that each remittance of Collections by or on behalf
of the Seller to the Purchasers under this Agreement will have been (a) in
payment of a debt incurred by the Seller in the ordinary course of business or
financial affairs of the Seller and the Purchasers and (b) made in the ordinary
course of business or financial affairs of the Seller and the Purchasers.

5. Reaffirmation of Representations and Warranties. On the date of each Purchase
and/or reinvestment hereunder, and on the date each Information Package or other
report is delivered to the Administrator, any Purchaser Agent or any Purchaser
hereunder, the Seller and the Servicer, by accepting the proceeds of such
Purchase or reinvestment and/or the provision of such information or report,
shall each be deemed to have certified that (i) all representations and
warranties of the Seller and the Servicer, as applicable, described in this
Exhibit III, as from time

 

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to time amended in accordance with the terms hereof, are true and correct in all
material respects on and as of such day as though made on and as of such day or,
if such representation or warranty is by its terms subject to a materiality
qualification, an SPV Material Adverse Effect qualification or a Material
Adverse Effect qualification, such representation or warranty is true and
correct in all respects on and as of such day as though made on and as of such
day, in each case except for representations and warranties which apply as to an
earlier date (in which case such representations and warranties shall be true
and correct in all material respects or, if such representation or warranty is
by its terms subject to a materiality qualification, an SPV Material Adverse
Effect qualification or a Material Adverse Effect qualification, such
representation or warranty shall be true and correct in all respects, as of such
date), and (ii) no event has occurred or is continuing, or would result from any
such Purchase, which constitutes a Termination Event or an Unmatured Termination
Event.

 

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EXHIBIT IV

COVENANTS

1. Covenants of the Seller. Unless waived by Administrator and Majority
Purchaser Agents, at all times from the Closing Date until the Final Termination
Date:

(a) Financial Reporting. The Seller will maintain a system of accounting
established and administered in accordance with GAAP, and the Seller (or the
Servicer on its behalf) shall furnish to the Administrator and each Purchaser
Agent:

(i) Annual Reporting. No later than 90 days after the close of each Fiscal Year
of the Seller, annual unaudited financial statements of the Seller certified by
a Responsible Officer of the Seller;

(ii) Information Packages, Weekly Reports and Daily Reports. As soon as
available and in any event not later than two Business Days prior to each
Settlement Date, an Information Package as of the last day of the most recently
completed Fiscal Month. If the Standard & Poor’s long-term “Issuer Rating” for
the Servicer is “B+” or lower or the Moody’s “Corporate Family Rating” for the
Servicer is “B1” or lower (or any such rating is withdrawn), as soon as
available and in any event not later than the third Business Day of each week, a
Weekly Report as of the last day of the most recently completed week. If the
Standard & Poor’s long-term “Issuer Rating” for the Servicer is “B-” or lower or
the Moody’s “Corporate Family Rating” for the Servicer is “B3” or lower (or any
such rating is withdrawn), on each Business Day, a Daily Report as of the
immediately preceding Business Day.

(iii) Copies of Notices. Promptly upon its receipt of any notice, request for
consent, financial statements, certification, report or other communication
under or in connection with any Transaction Document from any Person other than
the Administrator or any Purchaser Agent, copies of the same;

(iv) Change in Credit and Collection Policy. At least ten days prior to the
effectiveness of any material change in or material amendment to any Credit and
Collection Policy, notice of such change or amendment; and

(v) Other Information. Such other information (including non-financial
information) as the Administrator or any Purchaser Agent may from time to time
reasonably request, within a reasonable time after such request is received.

(b) Notices. The Seller will notify the Administrator and each Purchaser Agent
in writing of any of the following events promptly upon a Responsible Officer of
the Seller learning of the occurrence thereof, with such notice describing the
same, and if applicable, the steps being taken by the Person(s) affected with
respect thereto:

 

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(i) Notice of Termination Events or Unmatured Termination Events. A statement of
a Responsible Officer of the Seller setting forth details of any Termination
Event or Unmatured Termination Event;

(ii) Judgments and Proceedings. The entry of any judgment or decree or the
institution of any litigation, arbitration proceeding or governmental proceeding
against the Seller;

(iii) Representations and Warranties. The failure of any representation or
warranty to be true in all material respects or, if such representation or
warranty is by its terms subject to a materiality qualification, an SPV Material
Adverse Effect qualification or a Material Adverse Effect qualification, the
failure of representation or warranty to be true and correct in all respects,
when made pursuant to any Transaction Document;

(iv) Notice of Purchase and Sale Termination Event. The occurrence of a Purchase
and Sale Termination Event or any event which, with the giving of notice or
lapse of time, or both, would become a Purchase and Sale Termination Event;

(v) [Reserved];

(vi) Notices under Sale Agreement. Copies of all notices delivered or received
by the Seller under the Sale Agreement;

(vii) Adverse Claim. The Seller becoming aware of (A) the existence of any
Adverse Claim upon the Pool Receivables or Collections with respect thereto,
(B) any Person other than the Seller, the Servicer or the Administrator
obtaining any rights or directing any action with respect to any Lock-Box
Account (or related lock-box or post office box) or (C) any Obligor receiving
any change in payment instructions with respect to Pool Receivable(s) or any
Eligible Supporting Letter of Credit Provider receiving any change in payment
instructions with respect to any Eligible Supporting Letter of Credit, in each
case from a Person other than the Servicer or the Administrator; and

(viii) SPV Material Adverse Effect. Promptly after the occurrence thereof,
notice of an SPV Material Adverse Effect.

(c) Conduct of Business. The Seller will carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted and will do all things necessary to remain duly
organized, validly existing and in good standing as an entity in its
jurisdiction of organization and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted if the failure
to have such authority could reasonably be expected to have an SPV Material
Adverse Effect.

(d) Compliance with Laws. The Seller will comply with all Laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject if the failure to comply could reasonably be expected to have
an SPV Material Adverse Effect.

 

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(e) Furnishing of Information and Inspection of Receivables. The Seller will
furnish to the Administrator and each Purchaser Agent from time to time such
information with respect to the Pool Receivables as the Administrator or such
Purchaser Agent may reasonably request not otherwise furnished by the Servicer.
The Seller will, at the Seller’s expense, at any time during regular business
hours, with at least five days’ prior written notice (unless a Termination Event
exists) from the Administrator, (i) permit the Administrator or any Purchaser
Agent, or their respective agents or representatives, (A) to examine and make
copies of and abstracts from all books and records relating to the Pool
Receivables or other Pool Assets and (B) to visit the offices and properties of
the Seller for the purpose of examining such books and records, and to discuss
matters relating to the Pool Receivables, other Pool Assets or the Seller’s
performance hereunder or under the other Transaction Documents to which it is a
party with any of the officers, directors, employees or independent public
accountants of the Seller (provided that representatives of the Seller are
present during such discussions) having knowledge of such matters; provided,
that so long as no Termination Event has occurred and is continuing such
examinations and visits shall occur no more than once per year and (ii) without
limiting the provisions of clause (i) above, during regular business hours, at
the Seller’s expense, upon at least five days’ prior written notice (unless a
Termination Event exists) from the Administrator, permit certified public
accountants or other auditors acceptable to the Administrator and the Purchaser
Agents to conduct a review of the Seller’s books and records with respect to the
Pool Receivables; provided, that so long as no Termination Event exists, the
Seller and the Servicer shall be required to reimburse the Administrator and
Purchaser Agents for only one such audit per year; provided, further, that so
long as no Termination Event exists, the Administrator and the Purchaser Agents
hereby agree to coordinate their visits. For the avoidance of doubt, the
Administrator may require examinations and audits in addition to the
examinations and audits specified in clause (i) and clause (ii) above, but the
expense of any such additional examination or audit shall be borne by the
Administrator and the Purchaser Agents and not the Seller or the Servicer.

(f) Payments on Receivables; Payments on Eligible Supporting Letters of Credit;
Commingling. (i) The Seller will instruct all Obligors to deliver payments on
the Pool Receivables to a Lock-Box Account if the Servicer fails to do so and,
if an Obligor fails to so deliver payments to a Lock-Box Account, the Seller
will use all reasonable efforts to cause such Obligor to deliver subsequent
payments on Pool Receivables to a Lock-Box Account if the Servicer fails to do
so. If any such payments or other Collections are received by the Seller, it
shall hold such payments in trust for the benefit of the Administrator, the
Purchaser Agents and the Purchasers and promptly (but in any event within two
Business Days after receipt) remit such funds into a Lock-Box Account.

(ii) The Seller will instruct each Eligible Supporting Letter of Credit Provider
to make payments in respect of Eligible Supporting Letters of Credit issued (or
confirmed by) such Eligible Supporting Letter of Credit Provider directly to a
Lock-Box Account if the Servicer fails to do so and, if an Eligible Supporting
Letter of Credit Provider fails to so deliver payments to a Lock-Box Account,
the Seller will use all reasonable efforts to cause such Eligible Supporting
Letter of Credit Provider to deliver subsequent payments (if any) in respect of
Eligible Supporting Letters of Credit issued (or confirmed by) such Eligible
Supporting Letter of Credit Provider directly to a Lock-Box Account if the
Servicer fails to do so. If any such payments are

 

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received by the Seller, it shall hold such payments in trust for the benefit of
the Administrator, the Purchaser Agents and the Purchasers and promptly (but in
any event within two Business Days after receipt) remit such funds into a
Lock-Box Account.

(iii) The Seller will not permit funds other than Collections and other Pool
Assets to be deposited into any Lock-Box Account. The Seller will not, and will
not permit the Servicer, any Originator or other Person to, commingle
Collections or other funds to which the Administrator, any Purchaser Agent or
any Purchaser is entitled with any other funds. The Seller shall only add or
replace a Lock-Box Bank (or the related lock-box or post office box) or Lock-Box
Account if the Administrator has received notice of such addition or replacement
and a duly executed copy of a Lock-Box Agreement in form and substance
acceptable to the Administrator from any such new Lock-Box Bank. The Seller
shall only terminate a Lock-Box Bank or close a Lock-Box Account (or the related
lock-box or post office box) with the prior written consent of the
Administrator.

(g) Sales, Liens, etc. Except as otherwise provided herein, the Seller will not
sell, assign (by operation of Law or otherwise) or otherwise dispose of, or
create or suffer to exist any Adverse Claim upon (including, without limitation,
the filing of any financing statement) or with respect to, any Pool Receivable
or other Pool Asset or its membership interests, or assign any right to receive
income in respect thereof.

(h) Name Changes; Etc. Not less than three Business Days prior to any change in
the Seller’s (i) name as it appears in the jurisdiction of its formation,
incorporation, or organization, (ii) type of entity, (iii) “location” for
purposes of the UCC, (iv) organizational identification number, or (v) identity
or corporate structure, written notice thereof. Each such notice pursuant to
this clause (h) shall set forth the applicable change and the proposed effective
date thereof and by the date of such change, the Seller shall deliver to the
Administrator all financing statements, instruments and other documents
reasonably requested by the Administrator in connection with such change or
relocation in order to maintain the perfection and priority of its interests
created hereunder.

(i) Extension or Amendment of Pool Receivables. Except as otherwise permitted in
Section 4.2(a) of this Agreement, the Seller will not extend, amend or otherwise
modify the payment terms of any Pool Receivable (or any other terms of such Pool
Receivable which could reasonably be expected to adversely affect the payment of
such Pool Receivable) in any material respect, or amend, modify or waive, in any
material respect, the payment provisions of any Contract related thereto (or any
other terms of such Contract which could reasonably be expected to adversely
affect payments with respect to Pool Receivables related thereto), without the
prior written consent of the Administrator.

(j) Change in Business. The Seller will not (i) make any material change in the
character of its business, which change would impair the collectability of any
Pool Receivable or (ii) make any change in any Credit and Collection Policy that
could reasonably be expected to materially adversely affect the collectability
of the Pool Receivables, the credit quality of any Pool Receivable, the
enforceability of any related Contract or its ability to perform its obligations
under the related Contract or the Transaction Documents, in the case of either
clause (i) or (ii) above, without the prior written consent of the
Administrator.

 

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(k) Fundamental Changes; Records. (i) The Seller shall not, without the prior
written consent of the Administrator and the Majority Purchaser Agents, permit
itself to merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter acquired)
to, any Person.

(ii) The Seller will maintain and implement (or cause the Servicer to maintain
and implement) administrative and operating procedures (including an ability to
recreate records evidencing Pool Receivables and related Contracts in the event
of the destruction of the originals thereof) and keep and maintain (or cause the
Servicer to keep and maintain) all documents, books, records, computer tapes and
disks and other information reasonably necessary or advisable for the collection
of all Pool Receivables (including records adequate to permit the daily
identification of each Pool Receivable and all Collections of and adjustments to
each Pool Receivable).

(l) Ownership Interest, Etc. The Seller shall (and shall cause the Servicer to)
take all action necessary or desirable to establish and maintain a valid and
enforceable undivided percentage ownership or security interest, to the extent
of the Purchased Interest, in the Pool Receivables, the Related Security and
Collections with respect thereto, and a first priority perfected security
interest in the Pool Assets, in each case free and clear of any Adverse Claim,
in favor of the Administrator (on behalf of the Purchaser Agents and the
Purchasers).

(m) Certain Agreements. Without the prior written consent of the Administrator
and the Majority Purchaser Agents (or each Purchaser Agent if expressly provided
elsewhere in any Transaction Document), the Seller will not amend, modify,
waive, revoke or terminate (or consent to any of the foregoing) (i) any
Transaction Document to which it is a party or (ii) any provision of the
Seller’s organizational documents which requires the consent of the “Independent
Director”.

(n) Restricted Payments. The Seller will not: (A) purchase or redeem any shares
of its membership interests, (B) declare or pay any dividend or set aside any
funds for any such purpose, (C) prepay, purchase or redeem any Debt, (D) lend or
advance any funds or (E) repay any loans or advances to, for or from any of its
Affiliates (the amounts described in clauses (A) through (E) being referred to
as “Restricted Payments”), except:

(i) Subject to the limitations set forth in clause (ii) below, (A) the Seller
may make cash payments (including prepayments) on the Company Notes in
accordance with their respective terms, and (B) if no amounts are then
outstanding under any Company Note, the Seller may declare and pay dividends;
and

(ii) The Seller may make Restricted Payments only out of the funds, if any, it
receives pursuant to Sections 1.4(b)(ii) and (iv) and 1.4(d) of this Agreement.

 

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Notwithstanding the foregoing, the Seller shall not pay, make or declare:
(A) any dividend if, after giving effect thereto, the Tangible Net Worth of the
Seller would be less than $15,000,000, or (B) any Restricted Payment (including
any dividend) if, after giving effect thereto, any Termination Event or
Unmatured Termination Event shall have occurred and be continuing.

(o) Other Business. The Seller will not: (i) engage in any business other than
the transactions contemplated by the Transaction Documents, (ii) create, incur
or permit to exist any Debt of any kind (or cause or permit to be issued for its
account any letters of credit or bankers’ acceptances) other than pursuant to
this Agreement and the other Transaction Documents, or (iii) form any Subsidiary
or make any investments in any other Person; provided, that the Seller shall be
permitted to incur de minimis obligations incidental to the day-to-day
operations of the Seller (such as expenses for stationery, audits and
maintenance of legal status).

(p) Use of Collections Distributed to Seller. The Seller shall apply Collections
distributed to it in accordance with the terms of this Agreement to make
payments in the following order of priority: (i) the payment of its expenses
(including all obligations payable to the Purchasers, the Purchaser Agents and
the Administrator under or in connection with this Agreement and under the Fee
Letter), (ii) the payment of accrued and unpaid interest on the Company Notes
and (iii) other legal and valid corporate purposes.

(q) Tangible Net Worth. The Seller will not permit its Tangible Net Worth, at
any time, to be less than $10,000,000.

(r) Further Assurances. The Seller hereby authorizes Administrator and hereby
agrees from time to time, at its own expense, promptly to execute (if necessary)
and deliver all further instruments and documents, and to take all further
actions, that may be necessary or reasonably desirable, or that the
Administrator or the Purchaser Agents may reasonably request, to perfect,
protect or more fully evidence the purchases or issuances made under this
Agreement and/or security interest granted pursuant to this Agreement or any
other Transaction Document, or to enable the Administrator or the Purchaser
Agents to exercise and enforce their respective rights and remedies under this
Agreement or any other Transaction Document. Without limiting the foregoing, the
Seller hereby authorizes, and will, upon the request of the Administrator or the
Purchaser Agents, at its own expense, execute (if necessary) and file such
financing or continuation statements, or amendments thereto, and such other
instruments and documents, that may be necessary or desirable, or that the
Administrator or the Purchaser Agents may reasonably request, to perfect,
protect or evidence any of the foregoing. The Seller authorizes the
Administrator to file financing or continuation statements, and amendments
thereto and assignments thereof, relating to the Receivables and the Related
Security, the related Contracts and the Collections with respect thereto and the
other collateral subject to a lien under any Transaction Document without the
signature of the Seller. A photocopy or other reproduction of this Agreement
shall be sufficient as a financing statement where permitted by Law.

2. Covenants of Targa. Unless waived by Administrator and Majority Purchaser
Agents, at all times from the Closing Date until the Final Termination Date:

 

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(a) Financial and Receivables Reporting. Targa will maintain proper books of
record and account, in which entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of Targa, and Targa shall furnish or cause to be furnished
to the Administrator and each Purchaser Agent or, in the case of any of clauses
(i) or (ii) below, make publicly available:

(i) Annual Reporting. As soon as available, but in any event within 30 days
after the date on which Targa is required under Securities Laws to file a Form
10-K annual report (without giving effect to any extension permitted by the SEC)
for each fiscal year of Targa, a Consolidated balance sheet of Targa and its
Subsidiaries as at the end of such fiscal year, and the related Consolidated
statements of income or operations, partners’ equity and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP and such Consolidated statements to be audited and accompanied by a report
and opinion of an independent certified public accountant of nationally
recognized standing, which report and opinion shall be prepared in accordance
with generally accepted auditing standards and applicable Securities Laws and
shall not be subject to any “going concern” or like qualification or exception
or any qualification or exception as to the scope of such audit;

(ii) Quarterly Reporting. As soon as available, but in any event within 30 days
after the date on which Targa is required under Securities Laws to file a Form
10-Q quarterly report (without giving effect to any extension permitted by the
SEC) for each of the first three fiscal quarters of each fiscal year of Targa
(commencing with the fiscal quarter ended March 30, 2013), a Consolidated
balance sheet of Targa and its Subsidiaries as at the end of such fiscal
quarter, and the related Consolidated statements of income or operations for
such fiscal quarter and for the portion of Targa’s fiscal year then ended,
setting forth in each case in comparative form the figures for the corresponding
fiscal quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, and the related Consolidated statements of cash flows and
partners’ equity for the portion of Targa’s fiscal year then ended, all in
reasonable detail and prepared in accordance with GAAP and such Consolidated
statements to be certified by the chief financial officer, chief accounting
officer, treasurer or controller of Targa as fairly presenting the financial
condition, results of operations, partners’ equity and cash flows of Targa and
its Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes; and

(iii) Information Packages, Weekly Reports and Daily Reports. As soon as
available and in any event not later than two Business Days prior to each
Settlement Date, an Information Package as of the last day of the most recently
completed Fiscal Month. If the Standard & Poor’s long-term “Issuer Rating” for
Targa is “B+” or lower or the Moody’s “Corporate Family Rating” for Targa is
“B1” or lower (or any such rating is withdrawn), as soon as available and in any
event not later than the third Business Day of each week, a Weekly Report as of
the last day of the most recently completed week. If the Standard & Poor’s
long-term “Issuer Rating” for Targa is “B-” or lower or the Moody’s “Corporate
Family Rating” for Targa is “B3” or lower (or any such rating is withdrawn), on
each Business Day, a Daily Report as of the immediately preceding Business Day.

 

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(b) Certificates; Other Information. Targa shall make available to the
Administrator and each Purchaser Agent:

(i) Compliance Certificates. No later than three (3) days after the delivery of
the financial statements referred to in Section 2(a)(i) and (ii) of this Exhibit
IV, a duly completed Compliance Certificate signed by a Responsible Officer of
the General Partner and stating that such officer has caused this Agreement to
be reviewed and has no knowledge of the existence of any Termination Event or
Unmatured Termination Event, during, or at the end of, as applicable, such
Fiscal Year or Fiscal Quarter, or, if such officer has such knowledge,
specifying each Termination Event or Unmatured Termination Event and the nature
thereof (which delivery may, unless the Administrator requests executed
originals, be by electronic communication including fax or email and shall be
deemed to be an original authentic counterpart thereof for all purposes);

(ii) Delivery of Financial Information. Promptly after any request by the
Administrator or any Purchaser Agent, copies of any detailed audit reports,
management letters or recommendations submitted to the board of directors (or
the audit committee of the board of directors) of Targa by independent
accountants in connection with the accounts or books of Targa or any Subsidiary
of Targa, or any audit of any of them;

(iii) Partner Statements and Reports and SEC Filings. Promptly after the same
are available, copies of each annual report, proxy or financial statement or
other report or communication sent to the partners of Targa (other than reports
and registration statements which Targa files with the SEC under Section 13 or
15(d) of the Securities Exchange Act of 1934, or with any national securities
exchange) not otherwise required to be delivered to the Administrator pursuant
hereto;

(iv) SEC Correspondence. Promptly, and in any event within five Business Days
after receipt thereof by Targa or any Subsidiary thereof, copies of each notice
or other correspondence received from the SEC (or comparable agency in any
applicable non-U.S. jurisdiction) concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of Targa or any Subsidiary thereof;

(v) Statements to Debt Holders. Promptly after the furnishing thereof, copies of
any statement or report furnished to any holder of debt securities of Targa or
any Subsidiary thereof pursuant to the terms of any indenture, loan or credit or
similar agreement and not otherwise required to be furnished to the
Administrator pursuant to Section 2(a) of this Exhibit IV or any other clause of
this Section 2(b);

(vi) Environmental Laws. Within five Business Days after (w) receipt by a
Responsible Officer of Targa of any written notice of any violation by Targa of
any Environmental Law, (x) any Responsible Officer of Targa obtaining knowledge
that any

 

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Governmental Authority has asserted that Targa is not in compliance with any
Environmental Law or that any Governmental Authority is investigating compliance
by Targa therewith, (y) receipt a Responsible Officer of Targa of any written
notice from any Governmental Authority or other Person or otherwise obtaining
knowledge that Targa is or may be liable to any Person as a result of the
release or threatened release of any Hazardous Materials or that any Loan Party
is subject to investigation by any Governmental Authority evaluating whether any
remedial action is needed to respond to the release or threatened release of any
Hazardous Materials, or (z) a Responsible Officer of Targa’s receipt of any
written notice of the imposition of any Environmental Lien against any property
of any Loan Party which in any event under clause (w), (x), (y) or (z) preceding
could reasonably be expected to result in, or has resulted in, liability, either
individually or in the aggregate, in excess of $10,000,000 or otherwise could
reasonably be expected to have, or has resulted in, a Material Adverse Effect,
copies of such notice or a written notice setting forth the matters in
(x) above;

(vii) Change in Credit and Collection Policy. At least 10 days prior to the
effectiveness of any material change in or material amendment to any Credit and
Collection Policy, notice of such change or amendment; and

(viii) Other Information. Promptly, such additional information regarding the
business, financial or corporate affairs of Targa or compliance by Targa with
the terms of the Transaction Documents, as the Administrator or any Purchaser
Agent may from time to time reasonably request.

Documents required to be delivered pursuant to Section 2(a)(i) or (ii) or
Section 2(b)(i) or (iii) of this Exhibit IV (to the extent any such documents
are included in materials otherwise filed with the SEC) may be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date (i) on which Targa posts such documents, or provides a link thereto, on
Targa’s website; or (ii) on which such documents are posted on Targa’s behalf on
an Internet or intranet website, if any, to which each Purchaser Agent and the
Administrator have access (whether a commercial, third-party website or whether
sponsored by the Administrator); provided that: (I) Targa shall deliver paper
copies of such documents to the Administrator or any Purchaser Agent upon its
request to Targa to deliver such paper copies and (II) Targa shall arrange for
the notification of each Purchaser Agent and the Administrator (by telecopier or
electronic mail) of the posting of any such documents. The Administrator shall
have no obligation to request the delivery of or to maintain paper copies of the
documents referred to above and, in any event, shall have no responsibility to
monitor compliance by Targa with any such request by a Purchaser Agent for
delivery, and each Purchaser Agent shall be solely responsible for requesting
delivery to it or maintaining it copies of such documents.

(c) Notices. Targa will promptly notify the Administrator and each Purchaser
Agent in writing:

(i) Termination Events or Unmatured Termination Events. Of any Termination Event
or Unmatured Termination Event;

 

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(ii) Defaults Under Other Agreement; Litigation. To the extent not otherwise
disclosed pursuant to Section 2(b)(iii) of this Exhibit IV, of any matter that
has resulted or could reasonably be expected to result in a Material Adverse
Effect, including (i) breach or non-performance of, or any default under, a
Contractual Obligation of Targa or any Subsidiary; (ii) any dispute, litigation,
investigation, proceeding or suspension, or any material development therein,
between Targa or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding by
any Person not a Governmental Authority affecting Targa or any Subsidiary;

(iii) [Reserved].

(iv) Accounting Changes. Of any material change in accounting policies or
financial reporting practices by Targa or any Subsidiary;

(v) [Reserved].

(vi) Adverse Claims. Of Targa becoming aware of (A) any Adverse Claim upon the
Pool Receivables or Collections with respect thereto, (B) any Person other than
the Seller, the Servicer or the Administrator obtaining any rights or directing
any action with respect to any Lock-Box Account (or related lock-box or post
office box) or (C) any Obligor receiving any change in payment instructions with
respect to Pool Receivable(s) or any Eligible Supporting Letter of Credit
Provider receiving any change in payment instructions with respect to any
Eligible Supporting Letter of Credit, in each case from a Person other than the
Servicer, an Originator, the Seller or the Administrator; and

(vii) SPV Material Adverse Effect. Of the occurrence of an SPV Material Adverse
Effect.

Each notice pursuant to this Section 2(c) of Exhibit IV shall be accompanied by
a statement of a Responsible Officer of the General Partner setting forth
details of the occurrence referred to therein and stating what action Targa has
taken and proposes to take with respect thereto. Each notice pursuant to
Section 2(c)(i) of Exhibit IV shall describe with particularity any and all
provisions of this Agreement and any other Transaction Document that have been
breached, if any.

(d) Preservation of Existence; Etc. Targa will preserve, renew and maintain in
full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization except in a transaction permitted by
Section 7.05 or 7.06 of the Credit Agreement; (b) take all reasonable action to
maintain all rights, privileges, permits, licenses and franchises necessary or
desirable in the normal conduct of its business, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) preserve or renew all of its registered patents, trademarks,
trade names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.

 

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Targa will at all times cause the Seller to be, and remain, an Unrestricted
Subsidiary or an Immaterial Restricted Subsidiary (as defined in the Credit
Agreement).

(e) Compliance with Laws. Targa will comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or
(b) the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.

(f) Furnishing of Information and Inspection of Receivables. The Servicer will
furnish to the Administrator and each Purchaser Agent from time to time such
information with respect to the Pool Receivables as the Administrator or such
Purchaser Agent may reasonably request. The Servicer will, at the Servicer’s
expense, at any time during regular business hours with at least five days prior
written notice (unless a Termination Event exists) from the Administrator
(i) permit the Administrator or any Purchaser Agent, or their respective agents
or representatives, (A) to examine and make copies of and abstracts from all
books and records relating to the Pool Receivables or other Pool Assets and
(B) to visit the offices and properties of the Servicer for the purpose of
examining such books and records, and to discuss matters relating to the Pool
Receivables, other Pool Assets or the Servicer’s performance hereunder or under
the other Transaction Documents to which it is a party with any of the officers,
directors, employees or independent public accountants of the Servicer (provided
that representatives of the Servicer are present during such discussions) having
knowledge of such matters; provided, that so long as no Termination Event has
occurred and is continuing such examinations and visits shall occur no more than
once per year and (ii) without limiting the provisions of clause (i) above,
during regular business hours, at the Servicer’s expense, upon at least five
days prior written notice (unless a Termination Event exists) from the
Administrator, permit certified public accountants or other auditors acceptable
to the Administrator and the Purchaser Agents to conduct a review of its books
and records with respect to the Pool Receivables; provided, that so long as no
Termination Event exists, the Seller and the Servicer shall be required to
reimburse the Administrator and Purchaser Agents for only one such audit per
year; provided, further, that so long as no Termination Event exists, the
Administrator and the Purchaser Agents hereby agree to coordinate their visits.
For the avoidance of doubt, the Administrator may require examinations and
audits in addition to the examinations and audits specified in clause (i) and
clause (ii) above, but the expense of any such additional examination or audit
shall be borne by the Administrator and the Purchaser Agents and not the
Servicer or the Seller.

(g) Payments on Receivables; Payments on Eligible Supporting Letters of Credit;
Commingling; Drawings on Eligible Supporting Letters of Credit. (i) The Servicer
will (on behalf of the Seller) instruct all Obligors to deliver payments on the
Pool Receivables to a Lock-Box Account and, if an Obligor fails to so deliver
payments to a Lock-Box Account, the Servicer will use all reasonable efforts to
cause such Obligor to deliver subsequent payments on Pool Receivables to a
Lock-Box Account. If any such payments or other Collections are received by the
Servicer, it shall hold such payments in trust for the benefit of the
Administrator, the Purchaser Agents and the Purchasers and promptly (but in any
event within two Business Days after receipt) remit such funds into a Lock-Box
Account.

 

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(ii) The Servicer will (on behalf of the Seller) instruct each Eligible
Supporting Letter of Credit Provider to make payments in respect of Eligible
Supporting Letters of Credit issued (or confirmed by) such Eligible Supporting
Letter of Credit Provider directly to a Lock-Box Account and, if an Eligible
Supporting Letter of Credit Provider fails to so deliver payments to a Lock-Box
Account, the Servicer will use all reasonable efforts to cause such Eligible
Supporting Letter of Credit Provider to deliver subsequent payments (if any) in
respect of Eligible Supporting Letters of Credit issued (or confirmed by) such
Eligible Supporting Letter of Credit Provider directly to a Lock-Box Account. If
any such payments are received by the Servicer, it shall hold such payments in
trust for the benefit of the Administrator, the Purchaser Agents and the
Purchasers and promptly (but in any event within two Business Days after
receipt) remit such funds into a Lock-Box Account.

(iii) The Servicer will not permit funds other than Collections and other Pool
Assets to be deposited into any Lock-Box Account. If such funds are nevertheless
deposited into any Lock-Box Account, the Servicer will promptly identify such
funds for segregation. The Servicer will not commingle Collections with any
other funds. The Servicer shall only add or replace a Lock-Box Bank (or the
related lock-box or post office box) or Lock-Box Account if the Administrator
has received notice of such addition and a duly executed copy of a Lock-Box
Agreement in form and substance acceptable to the Administrator from any such
new Lock-Box Bank. The Servicer shall only terminate a Lock-Box Bank or close a
Lock-Box Account (or the related lock-box or post office box) with the prior
written consent of the Administrator.

(iv) The Servicer shall (on behalf of the Seller) make drawings under Eligible
Supporting Letters of Credit at the time and using at least the same degree of
skill and care as the Servicer would with respect to letters of credit issued to
support receivables of the Servicer (in its individual capacity); provided, that
notwithstanding the foregoing, if at any time there exists a Termination Event,
the Servicer shall use all reasonable efforts to satisfy as soon as reasonably
possible any and all conditions to drawings under each Eligible Supporting
Letter of Credit and, upon satisfaction of such conditions, the Servicer shall
promptly draw the full amount available to be drawn thereunder.

(h) Extension or Amendment of Pool Receivables. Except as otherwise permitted in
Section 4.2(a) of this Agreement, the Servicer will not extend, amend or
otherwise modify the payment terms of any Pool Receivable (or any other terms of
such Pool Receivable which could reasonably be expected to adversely affect the
payment of such Pool Receivable) in any material respect, or amend, modify or
waive, in any material respect, the payment provisions of any Contract related
thereto (or any other terms of such Contract which could reasonably be expected
to adversely affect payments with respect to Pool Receivables related thereto),
without the prior written consent of the Administrator.

(i) Change in Business. The Servicer will not (i) make any material change in
the character of its business, which change would impair the collectability of
any Pool Receivable or (ii) make any change in any Credit and Collection Policy
that could reasonably be expected to materially and adversely affect the
collectability of the Pool Receivables, the credit quality of any Pool
Receivable, the enforceability of any related Contract or its ability to perform
its obligations under the related Contract or the Transaction Documents, in the
case of either clause (i) or (ii) above, without the prior written consent of
the Administrator.

 

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(j) Records. The Servicer will maintain, implement and keep (i) administrative
and operating procedures (including an ability to recreate records evidencing
Pool Receivables and related Contracts if originals are destroyed),
(ii) adequate facilities, personnel and equipment, and (iii) all documents,
books, records, computer tapes and disks and other information reasonably
necessary or advisable for the collection of all Pool Receivables (including
records adequate to permit the daily identification of each Pool Receivable and
all Collections of, and adjustments to, each Pool Receivable). The Servicer will
give the Administrator prior notice of any change in such administrative and
operating procedures that causes them to be materially different from the
procedures described to Administrator on or before the Closing Date as the
Servicer’s then existing or planned administrative and operating procedures for
collecting Receivables.

(k) Ownership Interest, Etc. The Servicer shall, on behalf of the Seller, at the
Servicer’s expense, take all action necessary or desirable to establish and
maintain a valid and enforceable undivided percentage ownership or security
interest, to the extent of the Purchased Interest, in the Pool Receivables, the
Related Security and Collections with respect thereto, and a first priority
perfected security interest in the Pool Assets, in each case free and clear of
any Adverse Claim in favor of the Administrator (on behalf of the Purchasers),
including taking such action to perfect, protect or more fully evidence the
interest of the Administrator (on behalf of the Purchasers) as the Administrator
or any Purchaser Agent may reasonably request.

3. Separate Existence. Each of the Seller and Targa hereby acknowledges that the
Purchasers and the Administrator are entering into the transactions contemplated
by this Agreement and the other Transaction Documents in reliance upon the
Seller’s identity as a legal entity separate from Targa, the Originators and
their respective Affiliates. From and after the Closing Date, each of the Seller
and the Servicer shall take all steps specifically required by this Agreement to
continue the Seller’s identity as a separate legal entity and to make it
apparent to third Persons that the Seller is an entity with assets and
liabilities distinct from those of Targa, any Originator and any other Person,
and is not a division of Targa, any Originator or any other Person. Without
limiting the generality of the foregoing and in addition to and consistent with
the other covenants set forth herein, each of the Seller and the Servicer shall
take such actions as shall be required in order that:

(a) The Seller will be a limited liability company whose primary activities are
restricted in its operating agreement to: (i) purchasing Pool Assets or
otherwise acquiring Pool Assets from the Originators and owning, holding,
granting security interests or selling interests in Pool Assets, (ii) entering
into agreements for the selling and servicing of the Receivables Pool, and
(iii) conducting such other activities as it deems necessary or appropriate to
carry out its primary activities;

(b) The Seller shall not engage in any business or activity, or incur any
indebtedness or liability (including, without limitation, any assumption or
guaranty of any obligation of Targa, any Originator or any Affiliate thereof),
other than as expressly permitted by the Transaction Documents;

 

 

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(c) The Seller shall at all times have a Board of Directors and not less than
one member of Seller’s Board of Directors shall be an individual who (A) has
(1) prior experience as an Independent Director or Independent Manager for a
corporation or limited liability company whose charter documents required the
unanimous consent of all Independent Directors or Independent Managers thereof
before such corporation or limited liability company could consent to the
institution of bankruptcy or insolvency proceedings against it or could file a
petition seeking relief under any applicable federal or state Law relating to
bankruptcy and (2) at least three years of employment experience with one or
more entities that provide, in the ordinary course of their respective
businesses, advisory, management or placement services to issuers of
securitization or structured finance instruments, agreements or securities,
(B) is reasonably acceptable to the Administrator as evidenced in a writing
executed by the Administrator (it being understood and agreed that any equity
owner, manager or employee of Global Securitization Services, LLC or Lord
Securities Corporation is hereby consented to by the Administrator), (C) is not,
and has not been for a period of five years prior to his or her appointment as
an Independent Director of the Seller: (1) a member (whether direct, indirect or
beneficial), customer, advisor or supplier of Targa or any of its respective
Affiliates, (2) a director, officer, employee, partner, attorney or consultant
of Targa or any of its Affiliates other than the Seller, (3) a Person related to
any Person referred to in clauses (1) or (2) above, (4) a Person or other entity
controlling or under common control with any such stockholder, partner,
customer, supplier, employee, officer or director, or (5) a trustee, conservator
or receiver for Targa or any of its Affiliates and (D) shall not at any time
serve as a trustee in bankruptcy for the Seller, Targa or any Affiliate thereof
(such an individual meeting the requirements set forth above, the “Independent
Director”) and causing its limited liability company agreement to provide that
(w) at least one member of the Seller’s Board of Directors shall be an
Independent Director, (x) the Seller’s Board of Directors shall not approve, or
take any other action to cause the filing of, a voluntary bankruptcy petition
with respect to the Seller unless a unanimous vote of the Seller’s Board of
Directors (which vote shall include the affirmative vote of all Independent
Directors) shall approve the taking of such action in writing prior to the
taking of such action, (y) the Seller’s Board of Directors shall not vote on any
matter requiring the vote of its Independent Directors under its operating
agreement unless and until at least one Independent Director is then serving on
the Seller’s Board of Directors and (z) the provisions requiring an Independent
Director and the provision described in clauses (x) and (y) of this clause
(c) cannot be amended without the prior written consent of each Independent
Director (it being understood that, as used in this clause (c), “control” means
the possession directly or indirectly of the power to direct or cause the
direction of management policies or activities of a person or entity whether
through ownership of voting securities, by contract or otherwise);

(d) The Independent Director of the Seller shall not at any time serve as a
trustee in bankruptcy for the Seller, Targa, any Originator or any of their
respective Affiliates;

(e) The Seller shall conduct its affairs strictly in accordance with its
organizational documents and observe all necessary, appropriate and customary
company formalities, including, but not limited to, holding meetings of the
members and Board of Directors or acting by written

 

IV-14

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consent as needed to authorize actions to be taken by the Seller which require
approval of the members or Board of Directors, as applicable, keeping separate
and accurate minutes of its meetings, and maintaining accurate and separate
books, records and accounts, including, but not limited to, payroll and
intercompany transaction accounts;

(f) Any employee, consultant or agent of the Seller will be compensated from the
Seller’s funds for services provided to the Seller, and to the extent that
Seller employs the same employees as Targa or any Originator (or any other
Affiliate thereof), the salaries and expenses relating to providing benefits to
such employees shall be fairly allocated among such entities, and each such
entity shall bear its fair share of the salary and benefit costs associated with
such common employees. The Seller will not engage any agents other than (i) its
attorneys, auditors and other professionals, (ii) a servicer, and (iii) any
other agent contemplated by the Transaction Documents for the Receivables Pool;

(g) The Seller will contract with the Servicer to perform for the Seller all
operations required on a daily basis to service the Receivables Pool and operate
the Seller’s business. The Seller will pay the Servicer the Servicing Fee
pursuant hereto. Except as otherwise permitted by this Agreement, the Seller
will not incur any material indirect or overhead expenses for items shared with
Targa or any Originator (or any other Affiliate thereof) that are not reflected
in the Servicing Fee. To the extent, if any, that the Seller (or any Affiliate
thereof) shares items of expenses not reflected in the Servicing Fee, such as
legal, auditing and other professional services, such expenses will be allocated
to the extent practical on the basis of actual use or the value of services
rendered, and otherwise on a basis reasonably related to the actual use or the
value of services rendered;

(h) The Seller’s operating expenses will not be paid by Targa or any Originator
(except as permitted by this Agreement in connection with servicing the Pool
Receivables) or any Affiliate thereof;

(i) The Seller’s books and records will be maintained separately from those of
Targa, each Originator and any other Affiliate thereof and in a manner such that
it will not be difficult or costly to segregate, ascertain or otherwise identify
the assets and liabilities of Seller;

(j) All financial statements of Targa or any Originator or any Affiliate thereof
that are consolidated to include Seller will disclose in substance that (i) the
Originators sell or contribute Receivables to the Seller, (ii) the Seller is a
special purpose consolidated Subsidiary of Targa created for the sole purpose of
consummating the transactions contemplated in the Transaction Documents,
(iii) the Seller sells undivided percentage ownership interests in its
Receivables to one or more third party financial institutions, and (iv) the Pool
Receivables are not available to satisfy the creditors of Targa or any
Originator.

(k) The Seller’s assets will be maintained in a manner that facilitates their
identification and segregation from those of Targa, the Originators or any
Affiliates thereof;

 

IV-15

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(l) The Seller will strictly observe corporate formalities in its dealings with
Targa, the Originators or any Affiliates thereof, and ensure that funds or other
assets of the Seller will not be commingled with those of Targa, the Originators
or any Affiliates thereof except as permitted by this Agreement in connection
with servicing the Pool Receivables. The Seller shall not maintain joint bank
accounts or other depository accounts to which Targa or any Affiliate thereof
(other than Targa in its capacity as the Servicer) has independent access. The
Seller will pay to the appropriate Affiliate the marginal increase or, in the
absence of such increase, the market amount of its portion of the premium
payable with respect to any insurance policy that covers the Seller and such
Affiliate. Except pursuant to the foregoing sentence, the Seller is not named,
and has not entered into any agreement to be named, directly or indirectly, as a
direct or contingent beneficiary or loss payee on any insurance policy with
respect to any loss relating to the property of Targa, the Originators or any
Subsidiaries or other Affiliates thereof;

(m) The Seller will maintain arm’s-length relationships with Targa, the
Originators and any Affiliates thereof. Any Person that renders or otherwise
furnishes services to the Seller will be compensated by the Seller at market
rates for such services it renders or otherwise furnishes to the Seller. Neither
the Seller on the one hand, nor Targa or any Originator, on the other hand, will
be or will hold itself out to be responsible for the debts of the other or the
decisions or actions respecting the daily business and affairs of the other. The
Seller, Targa and the Originators will promptly correct any known
misrepresentation with respect to the foregoing, and they will not operate or
purport to operate as an integrated single economic unit with respect to each
other or in their dealing with any other entity;

(n) The Seller shall have a separate area from Targa and each Originator for its
business (which may be located at the same address as such entities) and to the
extent that any other such entity has offices in the same location, there shall
be a fair and appropriate allocation of overhead costs between them, and each
shall bear its fair share of such expenses;

(o) To the extent not already covered in clauses (a) through (n) above, Seller
shall comply or act in accordance with the provisions of Section 6.1(k) of the
Sale Agreement; and

(p) The Seller and the Servicer will take such other actions as are necessary on
its part to ensure that the facts and assumptions set forth in the opinion
issued by Bracewell & Giuliani LLP, as counsel for Seller, in connection with
the closing of the transactions contemplated in the Transaction Documents and
relating to true sale and substantive consolidation issues, and in the
certificates accompanying such opinion, remain true and correct in all material
respects at all times.

 

IV-16

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EXHIBIT V

TERMINATION EVENTS

Each of the following shall be a “Termination Event”:

(a) (i) except as otherwise provided herein, (x) the Seller shall fail to
perform or observe any term, covenant or agreement in this Agreement or any
other Transaction Document to which it is a party and such failure shall, if
capable of cure, continue for 15 days after the earlier of the Seller’s actual
knowledge or notice thereof, (y) except as provided in succeeding clause (z),
any Originator or Targa shall fail to perform or observe any term, covenant or
agreement in this Agreement or any other Transaction Document to which it is a
party and such failure shall, if capable of cure, continue for 30 days after the
earlier of any such Person’s actual knowledge or notice thereof or (y) Targa
shall fail to perform or observe any term covenant or agreement in
Section 2(a)(i) or (ii), (b)(i) - (vi) or (b)(viii), (c)(i) - (iv), or (d) of
Exhibit IV; provided, however that if Targa fails to deliver any financial
statements, certificates or other information required by Section 2(a)(i) or
(ii), (b)(i) - (vi) or (b)(viii), (c)(i) - (iv) of Exhibit IV and subsequently
delivers such financial statements, certificates or other information as
required by such Sections, then such Termination Event shall be deemed to have
been cured and/or waived or (ii) the Seller, any Originator or Targa shall fail
to make when due any payment or deposit required to be made by it under this
Agreement or any other Transaction Document and, in the case of Discount or
Fees, such failure shall remain unremedied for five Business Days;

(b) [Reserved]

(c) any representation or warranty made or deemed made by the Seller, Targa or
any Originator in this Agreement or any other Transaction Document to which it
is a party, or any information or report delivered by the Seller, Targa or any
Originator pursuant to this Agreement or any other Transaction Document to which
it is a party, shall prove to have been incorrect or untrue in any material
respect when made or deemed made or delivered and, if the representation or
warranty is of a type that is capable of being cured, shall remain incorrect or
untrue for 10 days after the earlier of such Person’s actual knowledge or notice
thereof;

(d) the Seller or Targa shall fail to deliver any Information Package, any
Weekly Report or any Daily Report when due pursuant to this Agreement, and such
failure shall remain unremedied (i) in the case of an Information Package, for
five Business Days and (ii) in the case of a Weekly Report or a Daily Report for
two Business Days;

(e) this Agreement (together with each Lock-Box Agreement) shall for any reason:
(i) cease to create, or the Purchased Interest shall for any reason cease to be,
a valid and enforceable first priority perfected undivided percentage ownership
or security interest to the extent of the Purchased Interest in each Pool
Receivable, the Related Security and Collections with respect thereto, free and
clear of any Adverse Claim or (ii) cease to create with respect to the Pool
Assets, or the interest of the Administrator (for the benefit of the Purchaser
Agents and Purchasers) with respect to such Pool Assets shall cease to be, a
valid and enforceable first priority perfected security interest, free and clear
of any Adverse Claim;

 

V-1

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(f) the Seller, Targa or any Originator institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under any Debtor Relief Law relating to any
such Person or to all or any material part of its property is instituted without
the consent of such Person and continues undismissed or unstayed for 60 calendar
days, or an order for relief is entered in any such proceeding;

(g) (i) the average for any three consecutive Fiscal Months of: (A) the Default
Ratio shall exceed 2.00%, (B) the Delinquency Ratio shall exceed 2.50%, (C) the
Dilution Ratio shall exceed 3.00% or (ii) the Days’ Sales Outstanding exceeds
45.0 days;

(h) a Change in Control shall occur;

(i) the Purchased Interest shall exceed 100% for two consecutive Business Days;
or

(j) (i) Targa shall (A) fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) in respect of
any Indebtedness or Guarantee (other than Indebtedness under the Transaction
Documents and Indebtedness under Swap Contracts) having an aggregate principal
amount (including the undrawn face amount of any outstanding letter of credit,
surety bonds and other similar contingent obligations outstanding under any
agreement relating to such Indebtedness or Guarantee and including amounts owing
to all creditors under any combined or syndicated credit arrangement) of more
than $50,000,000 or (B) fail to observe or perform any other agreement or
condition relating to any such Indebtedness or Guarantee or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event occurs, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an
offer to repurchase, prepay, defease or redeem such Indebtedness to be made,
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded; provided that this clause
(j)(i)(B) shall not apply to secured Indebtedness that becomes due as a result
of the voluntary sale or transfer of the property or assets securing such
Indebtedness if such sale or transfer is permitted hereunder; (ii) there occurs
under any Swap Contract an Early Termination Date (as defined in such Swap
Contract) resulting from (A) any event of default under such Swap Contract as to
which Targa is the Defaulting Party (as defined in such Swap Contract) or
(B) any Termination Event (as so defined) under such Swap Contract as to which
Targa is an Affected Party (as so defined) and, in either event, the Swap
Termination Value owed by Targa as a result thereof is greater than $50,000,000.

 

V-2

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SCHEDULE I

CREDIT AND COLLECTION POLICY

(attached)

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SCHEDULE II

LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS

 

BANK

  

LOCK-BOX ADDRESS AND NO.

  

ABA ROUTING NO./BANK ACCOUNT NO.

JPMorgan Chase Bank, N.A.

  

Lock-box Address: P.O. Box 730155, Dallas, TX 75373-0155

 

Lock-box No.: 730155

  

ABA Routing No.: 071000013/

 

Account No.: 05567661

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SCHEDULE III

SPECIAL OBLIGORS AND SPECIAL OBLIGOR LIMITS

 

Special Obligor

   Special Obligor Limit

Enterprise Products Operating LLC

   25.00%

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ANNEX A-1

FORM OF INFORMATION PACKAGE

[(attached)]

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

ANNEX A-2

FORM OF WEEKLY REPORT

[(attached)]

 

Annex A-2-1

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

ANNEX A-3

FORM OF DAILY REPORT

[(attached)]

 

Annex A-2-1

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ANNEX B

FORM OF PURCHASE NOTICE

Dated as of [            , 20    ]

PNC Bank, National Association,

as Administrator

One PNC Plaza, 26th Floor

249 Fifth Avenue

Pittsburgh, PA 15222-2707

Attention: [            ]

[Each Purchaser Agent]

Ladies and Gentlemen:

Reference is hereby made to the Receivables Purchase Agreement, dated as of
January 10, 2013 (as amended, restated, supplemented or otherwise modified
through the date hereof, the “Receivables Purchase Agreement”), among Targa
Receivables LLC, as Seller, Targa Resources Partners LP, as Servicer, the
various Conduit Purchasers, Committed Purchasers, Purchaser Agents and LC
Participants from time to time party thereto and PNC Bank, National Association,
as Administrator and as LC Bank. Capitalized terms used in this Purchase Notice
and not otherwise defined herein shall have the meanings assigned thereto in the
Receivables Purchase Agreement.

[This letter constitutes a Purchase Notice pursuant to Section 1.2(a) of the
Receivables Purchase Agreement. Seller desires to sell an undivided percentage
ownership interest in a pool of Receivables on             , [20    ], for a
purchase price of $            .2 Subsequent to this Purchase, the Aggregate
Capital will be $            .]3 [This letter constitutes a notice pursuant to
Section 1.13(a) of the Receivables Purchase Agreement. Seller desires that the
LC Bank issue Letters of Credit [currently issued under the [            ]] on
            , [20    ], with a face amount of $            . Subsequent to this
Purchase, the LC Participation Amount will be $            and the Aggregate
Capital will be $            .]4

Seller hereby represents and warrants as of the date hereof, and as of the date
of Purchase, as follows:

 

 

2 Such amount shall not be less than $300,000 (or such lesser amount as agreed
to by the Administrator and the Majority Purchaser Agents) and shall be in
integral multiples of $100,000 with respect to each Purchaser Group.

3 In the case of a Borrowing Request.

4 In the case of a request for an issuance of a Letter of Credit.

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

(i) the representations and warranties contained in Exhibit III of the
Receivables Purchase Agreement are true and correct in all material respects or,
if such representation or warranty is by its terms subject to a materiality
qualification, an SPV Material Adverse Effect or a Material Adverse Effect
qualification, such representation or warranty is true and correct in all
respects, on and as of the date of such Purchase as though made on and as of
such date (except for representations and warranties which apply as to an
earlier date, in which case such representations and warranties are true and
correct in all material respects or, if such representation or warranty is by
its terms subject to a materiality qualification, an SPV Material Adverse Effect
or a Material Adverse Effect qualification, such representation or warranty is
true and correct in all respects, as of such earlier date);

(ii) no event has occurred and is continuing, or would result from such
Purchase, that constitutes a Termination Event or Unmatured Termination Event;

(iii) the sum of the Aggregate Capital plus the LC Participation Amount, after
giving effect to any such Purchase, is not be greater than the Purchase Limit,
and the Purchased Interest does not exceed 100%; and

(iv) the Facility Termination Date has not occurred.

 

Annex B-2

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IN WITNESS WHEREOF, the undersigned has caused this Purchase Notice to be
executed by its duly authorized officer as of the date first above written.

 

TARGA RECEIVABLES LLC By:     Name:     Title:    

 

Annex B-3

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ANNEX C

[FORM OF ASSUMPTION AGREEMENT]

Dated as of [            , 20    ]

THIS ASSUMPTION AGREEMENT (this “AGREEMENT”), dated as of [            ,
            ], is among TARGA RECEIVABLES LLC (the “Seller”), [[            ],
as purchaser (the “[            ] Conduit Purchaser”)], [            ], as the
related committed purchaser (the “[            ] Committed Purchaser”),
[            ], as related LC participant (the “[            ] LC Participant”
and together with the Conduit Purchaser and the [            ] Committed
Purchaser, the “[            ] Purchasers”), and [            ], as agent for
the [            ] Purchasers (the “[            ] Purchaser Agent” and together
with the [            ] Purchasers, the “[            ] Purchaser Group”).

BACKGROUND

Reference is hereby made to the Receivables Purchase Agreement, dated as of
January 10, 2013 (as amended, restated, supplemented or otherwise modified
through the date hereof, the “Receivables Purchase Agreement”) among the Seller,
Targa Resources Partners LP, as Servicer, the various Conduit Purchasers,
Committed Purchasers, Purchaser Agents and LC Participants from time to time
party thereto and PNC Bank, National Association, as Administrator and as LC
Bank. Capitalized terms used and not otherwise defined herein have the
respective meaning assigned to such terms in the Receivables Purchase Agreement.

NOW, THEREFORE, the parties hereto hereby agree as follows:

SECTION 1. This letter constitutes an Assumption Agreement pursuant to
Section 1.2(f) of the Receivables Purchase Agreement. The Seller desires [the
[            ] Purchasers] [the [            ] Committed
Purchaser][            ] related LC Participant] to [become Purchasers under]
[increase its existing Commitment under] the Receivables Purchase Agreement and
upon the terms and subject to the conditions set forth in the Receivables
Purchase Agreement, the [            ] Purchasers agree to [become Purchasers
thereunder] [increase its Commitment in an amount equal to the amount set forth
as the “Commitment” under the signature of such [            ] Committed
Purchaser hereto] [increase its Commitment in an amount equal to the amount set
forth as the “Commitment” under the signature of such [            ] related LC
Participant hereto].

Seller hereby represents and warrants to the [            ] Purchasers as of the
date hereof, as follows:

(i) the representations and warranties of the Seller contained in Exhibit III of
the Receivables Purchase Agreement are true and correct in all material respects
on and as the date of such purchase or reinvestment as though made on and as of
such date or, if any such representation or warranty is by its terms subject to
a materiality qualification, an SPV Material Adverse Effect qualification or a
Material Adverse Effect qualification,

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

such representation or warranty shall be true and correct in all respects, on
and as of such date (except for representations and warranties which apply as to
an earlier date, in which case such representations and warranties shall be true
and correct in all material respects or, if such representation or warranty is
by its terms subject to a materiality qualification, an SPV Material Adverse
Effect qualification or a Material Adverse Effect qualification, such
representation or warranty shall be true and correct in all respects, as of such
earlier date);

(ii) no event has occurred and is continuing, or would result from such
Purchase, that constitutes a Termination Event or an Unmatured Termination
Event; and

(iii) the Facility Termination Date has not occurred.

SECTION 2. Upon execution and delivery of this Agreement by the Seller and each
member of the [            ] Purchaser Group, satisfaction of the other
conditions to assignment specified in Section 1.2(f) of the Receivables Purchase
Agreement (including the written consent of each Purchaser Agent) and receipt by
the Administrator and Seller of counterparts of this Agreement (whether by
facsimile or otherwise) executed by each of the parties hereto, [the
[            ] Purchasers shall become a party to, and have the rights and
obligations of Purchasers under, the Receivables Purchase Agreement][the
[            ] Committed Purchaser shall increase its Commitment in the amount
set forth as the “Commitment” under the signature of the [            ]
Committed Purchaser hereto][the [            ] related LC Participant shall
increase its Commitment in the amount set forth as the “Commitment” under the
signature of the [            ] related LC Participant hereto].

SECTION 3. Each party hereto hereby covenants and agrees that it will not
institute against, or join any other Person in instituting against, any Conduit
Purchaser, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, for one year and one day after the latest maturing
Note issued by such Conduit Purchaser is paid in full. The covenant contained in
this paragraph shall survive any termination of the Receivables Purchase
Agreement.

SECTION 4. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

SECTION 5. This Agreement may not be amended, supplemented or waived except
pursuant to a writing signed by the party to be charged. This Agreement may be
executed in any number of counterparts, and by the different parties on
different counterparts, each of which, when so executed, shall constitute an
original, and all of which, when taken together, shall constitute one and the
same agreement.

(signatures commence on following page)

 

Annex C-2

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their
duly authorized officers as of the date first above written.

 

[[            ], as a Conduit Purchaser By:     Name:     Title:   ] [Address]
[                ], as a related Committed Purchaser

 

By:     Name:     Title:    

[Address]

[Commitment]

[            ], as a related LC Participant

 

By:     Name:     Title:    

[Address]

[Commitment]

[            ], as Purchaser Agent for [            ]

 

By:     Name:     Title:     [Address]

 

Annex C-3

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

[TARGA RECEIVABLES LLC, as Seller By:     Name:     Title::   ]

 

Consented and Agreed: PNC BANK, NATIONAL ASSOCIATION, as Administrator By:    
Name:     Title::   ] Address:  

PNC Bank, National Association

One PNC Plaza

249 Fifth Avenue

Pittsburgh, Pennsylvania 15222-2707

 

PNC BANK, NATIONAL ASSOCIATION, as LC Bank By:     Name:     Title::   ]
Address:  

PNC Bank, National Association

 

One PNC Plaza

249 Fifth Avenue

Pittsburgh, Pennsylvania 15222-2707

 

[THE PURCHASER AGENTS] By:     Name:     Title::   ] [Address]

 

Annex C-4

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ANNEX D

FORM OF TRANSFER SUPPLEMENT

Dated as of [            , 20    ]

Section 1.

 

Commitment/LC Sublimit Commitment assigned:

   $                

Assignor’s remaining Commitment/LC Sublimit Commitment (if any):

   $                

Capital allocable to Commitment assigned:

   $                

Assignor’s remaining Capital:

   $                 Discount (if any) allocable to Capital assigned:    $
                Discount(if any) allocable to Assignor’s remaining Capital:    $
               

Section 2.

Effective Date of this Transfer Supplement: [            ]

Upon execution and delivery of this Transfer Supplement by transferee and
transferor and the satisfaction of the other conditions to assignment specified
in Section 6.3(c) of the Receivables Purchase Agreement (as defined below), from
and after the effective date specified above, the transferee shall become a
party to, and have the rights and obligations of a Purchaser under, the
Receivables Purchase Agreement, dated as of January 10, 2013 (as amended,
restated, supplemented or otherwise modified through the date hereof, the
“Receivables Purchase Agreement”), among Targa Receivables LLC, as Seller, Targa
Resources Partners LP, as Servicer, the various Conduit Purchasers, Committed
Purchasers, Purchaser Agents and LC Participants from time to time party thereto
and PNC Bank, National Association, as Administrator and as LC Bank.

 

Annex C-5

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

ASSIGNOR:     [            ], as a [Committed] Purchaser     By:         Name:  
      Title:    

 

ASSIGNEE:     [            ], as a [Committed] Purchaser     By:         Name:  
      Title:        

 

[Address]

 

 

[Accepted as of date first above written: TARGA RECEIVABLES LLC, as Seller By:  
  Name:     Title::   ]

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

ANNEX E

FORM OF PAYDOWN NOTICE

Dated as of [            , 20    ]

PNC Bank, National Association,

as Administrator

One PNC Plaza, 26th Floor

249 Fifth Avenue

Pittsburgh, Pennsylvania 15222-2707

Attention: [            ]

[Each Purchaser Agent]

Ladies and Gentlemen:

Reference is hereby made to the Receivables Purchase Agreement, dated as of
January 10, 2013 (as amended, restated, supplemented or otherwise modified
through the date hereof, the “Receivables Purchase Agreement”), among Targa
Receivables LLC, as Seller, Targa Resources Partners LP, as Servicer, the
various Conduit Purchasers, Committed Purchasers, Purchaser Agents and LC
Participants from time to time party thereto and PNC Bank, National Association,
as Administrator and as LC Bank. Capitalized terms used in this paydown notice
and not otherwise defined herein shall have the meanings assigned thereto in the
Receivables Purchase Agreement.

This letter constitutes a Paydown Notice under, and as defined in, of the
Receivables Purchase Agreement. The Seller desires to reduce the Aggregate
Capital on             ,             5 from the accumulation of Collections not
reinvested commencing on             . Subsequent to such reduction, the
Aggregate Capital will be $            .

 

 

5 

Notice must be given at least two Business Days prior to the date of such
reduction for any reduction of the Aggregate Capital.

 

Annex D-2

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

IN WITNESS WHEREOF, the undersigned has caused this Paydown Notice to be
executed by its duly authorized officer as of the date first above written.

 

TARGA RECEIVABLES LLC By:     Name:     Title:    

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ANNEX F

FORM OF LETTER OF CREDIT APPLICATION

(attached)

 

Annex E-4

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

ANNEX G

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:             ,             

PNC Bank, National Association,

as Administrator

One PNC Plaza, 26th Floor

249 Fifth Avenue

Pittsburgh, Pennsylvania 15222-2707

Attention: [            ]

[Each Purchaser Agent]

Ladies and Gentlemen:

Reference is made to the Receivables Purchase Agreement, dated as of January 10,
2013 (as amended, restated, supplemented or otherwise modified through the date
hereof, the “Receivables Purchase Agreement”), among Targa Receivables LLC, as
Seller, Targa Resources Partners LP (“Targa”), as Servicer, the various Conduit
Purchasers, Committed Purchasers, Purchaser Agents and LC Participants from time
to time party thereto and PNC Bank, National Association, as Administrator and
as LC Bank. Capitalized terms used and not otherwise defined herein shall have
the meanings assigned thereto in the Receivables Purchase Agreement.

The undersigned Responsible Officer hereby certifies as of the date hereof that
[he/she] is the                     of the General Partner, and that, as such,
[he/she] is authorized to execute and deliver this Compliance Certificate on the
behalf of Targa, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

1. Targa has delivered the year-end audited financial statements required by
Section 2(a)(i) of Exhibit IV to the Receivables Purchase Agreement for the
fiscal year of Targa ended as of the Financial Statement Date set forth above,
together with the report and opinion of an independent certified public
accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

1. Targa has delivered the unaudited financial statements required by
Section 2(a)(ii) of Exhibit IV to the Receivables Purchase Agreement for the
fiscal quarter of Targa ended as of the Financial Statement Date set forth
above. Such financial statements fairly present the financial condition, results
of operations, partners’ equity and cash flows of the Targa and its Subsidiaries
in accordance with GAAP as at such date and for such period, subject only to
normal year-end audit adjustments and the absence of footnotes.

 

Annex F

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2. The undersigned has reviewed and is familiar with the terms of the
Receivables Purchase Agreement and has made, or has caused to be made under
[his/her] supervision, a detailed review of the transactions and condition
(financial or otherwise) of Targa during the accounting period covered by such
financial statements.

3. A review of the activities of Targa during such fiscal period has been made
under the supervision of the undersigned with a view to determining whether
during such fiscal period Targa performed and observed all its obligations under
the Transaction Documents, and

[select one:]

[to the best knowledge of the undersigned, during such fiscal period, Targa
performed and observed each covenant and condition of the Transaction Documents
applicable to it, and no Termination Event or Unmatured Termination Event has
occurred and is continuing.]

—or—

[to the best knowledge of the undersigned, during such fiscal period the
following covenants or conditions have not been performed or observed and the
following is a list of each such Termination Event or Unmatured Termination
Event and its nature and status:]

4. [After taking into account the information set forth on Schedule 1 hereto,]
[T]he representations and warranties of Targa and the Seller contained in
Exhibit III to the Receivables Purchase Agreement, and any representations and
warranties of Targa, any Originator or the Seller that are contained in any
document furnished at any time under or in connection with the Transaction
Documents, are true and correct in all material respects or, if such
representation or warranty is by its terms subject to a materiality
qualification, an SPV Material Adverse Effect qualification or a Material
Adverse Effect qualification, such representation or warranty is true and
correct in all respects on and as of such day as though made on and as of the
date hereof (except for representations and warranties which apply as to an
earlier date,in which case such representations and warranties shall be true and
correct in all material respects or, if such representation or warranty is by
its terms subject to a materiality qualification, an SPV Material Adverse Effect
qualification or a Material Adverse Effect qualification, such representation or
warranty shall be true and correct in all respects, as of such earlier date),
and except that for purposes of this Compliance Certificate, the representations
and warranties contained in subsections (i) and (ii) of Section 2(j) of Exhibit
III to the Receivables Purchase Agreement shall be deemed to refer to the most
recent financial statements furnished pursuant to clauses (a)(i) and (a)(ii),
respectively, of Section 2 of Exhibit IV to the Receivables Purchase Agreement,
including the statements in connection with which this Compliance Certificate is
delivered.

 

Annex G

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IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
of             ,             .

 

TARGA RESOURCES PARTNERS LP By:   Targa Resources GP LLC,   its general partner
  By:        

Name:

Title:

 

Annex G

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ANNEX H

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Affected Parties That Are Not Partnerships For U.S. Federal Income
Tax Purposes)

Reference is hereby made to the Receivables Purchase Agreement dated as of
January 10, 2013 (as amended, supplemented or otherwise modified from time to
time, the “Purchase Agreement”), among Targa Receivables LLC, as Seller, Targa
Resources Partners L.P. as Servicer, each Purchaser, LC Participant, Purchaser
Agent and LC Issuer from time to time party thereto, and PNC Bank, National
Association, as administrator for such Affected Parties (the “Administrator”).
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Purchase Agreement.

Pursuant to the provisions of Section 1.9 of the Purchase Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Commitment(s) (as well as any Purchase Notice or interest in the
Receivables evidencing such Commitment(s)) in respect of which it is providing
this certificate, (ii) it is not a bank within the meaning of
Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of
the Seller within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is
not a controlled foreign corporation related to the Seller as described in
Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrator and the Seller with a
certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Seller and the
Administrator, and (2) the undersigned shall have at all times furnished the
Seller and the Administrator with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

[NAME OF FOREIGN AFFECTED PERSON]

By:

      Name:   Title:

Date:             , 20[     ]

 

Annex G