Exhibit 10.1

 

Execution Copy

 

364-DAY REVOLVING CREDIT AGREEMENT

 

among

 

ATMOS ENERGY CORPORATION

as Borrower,

 

THE LENDERS IDENTIFIED HEREIN,

 

AND

 

BANK ONE, NA

as Administrative Agent,

 

AND

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

as Syndication Agent,

 

AND

 

BANK OF AMERICA, N.A. AND SUNTRUST BANK

as Co-Documentation Agents

 

DATED AS OF SEPTEMBER 24, 2004

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

as Lead Arranger and Book Runner

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TABLE OF CONTENTS

 

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SECTION 1. DEFINITIONS AND ACCOUNTING TERMS    1     1.1   Definitions    1    
1.2   Computation of Time Periods    12     1.3   Accounting Terms    12     1.4
  Time    13 SECTION 2. LOANS    13     2.1   Aggregate Commitment    13     2.2
  Method of Borrowing for Loans    13     2.3   Funding of Loans    13     2.4  
Continuations and Conversions    14     2.5   Minimum Amounts    14     2.6  
Reductions of Aggregate Commitment    15     2.7   Notes    15 SECTION 3.
PAYMENTS    16     3.1   Interest    16     3.2   Prepayments    16     3.3  
Payment in full at Maturity    17     3.4   Fees    17     3.5   Place and
Manner of Payments    18     3.6   Pro Rata Treatment    18     3.7  
Computations of Interest and Fees    18     3.8   Sharing of Payments    19    
3.9   Evidence of Debt    20 SECTION 4. ADDITIONAL PROVISIONS REGARDING LOANS   
20     4.1   Eurodollar Loan Provisions    20     4.2   Capital Adequacy    22  
  4.3   Compensation    22     4.4   Taxes    23 SECTION 5. CONDITIONS PRECEDENT
   25     5.1   Closing Conditions    25     5.2   Conditions to Loans    27

 

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TABLE OF CONTENTS

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SECTION 6. REPRESENTATIONS AND WARRANTIES    28     6.1   Organization and Good
Standing    28     6.2   Due Authorization    28     6.3   No Conflicts    28  
  6.4   Consents    28     6.5   Enforceable Obligations    29     6.6  
Financial Condition    29     6.7   No Material Change    29     6.8   No
Default    29     6.9   Litigation    29     6.10   Taxes    30     6.11  
Compliance with Law    30     6.12   Material Agreements    30     6.13   ERISA
   30     6.14   Use of Proceeds    31     6.15   Government Regulation    31  
  6.16   Disclosure    32     6.17   Environmental Matters    32     6.18  
Insurance    32     6.19   Franchises, Licenses, Etc.    33     6.20   Secured
Indebtedness    33     6.21   Subsidiaries    33 SECTION 7. AFFIRMATIVE
COVENANTS    33     7.1   Information Covenants    33     7.2   Debt to
Capitalization Ratio    35     7.3   Preservation of Existence, Franchises and
Assets    35     7.4   Books and Records    36     7.5   Compliance with Law   
36     7.6   Payment of Taxes and Other Indebtedness    36     7.7   Insurance
   36     7.8   Use of Proceeds    36     7.9   Audits/Inspections    36 SECTION
8. NEGATIVE COVENANTS    37     8.1   Nature of Business    37     8.2  
Consolidation and Merger    37     8.3   Sale or Lease of Assets    37     8.4  
Arm’s-Length Transactions    37     8.5   Fiscal Year; Organizational Documents
   37     8.6   Liens    38

 

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TABLE OF CONTENTS

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SECTION 9. EVENTS OF DEFAULT    39     9.1     Events of Default    39     9.2  
  Acceleration; Remedies    41     9.3     Allocation of Payments After Event of
Default    42 SECTION 10. AGENCY PROVISIONS    43     10.1     Appointment    43
    10.2     Delegation of Duties    43     10.3     Exculpatory Provisions   
43     10.4     Reliance on Communications    44     10.5     Notice of Default
   44     10.6     Non-Reliance on Administrative Agent and Other Lenders    45
    10.7     Indemnification    45     10.8     Administrative Agent in Its
Individual Capacity    46     10.9     Successor Agent    46 SECTION 11.
MISCELLANEOUS    46     11.1     Notices    46     11.2     Right of Set-Off   
47     11.3     Benefit of Agreement    47     11.4     No Waiver; Remedies
Cumulative    50     11.5     Payment of Expenses, etc.    50     11.6    
Amendments, Waivers and Consents    51     11.7     Counterparts/Telecopy    51
    11.8     Headings    52     11.9     Defaulting Lender    52     11.10  
Survival of Indemnification and Representations and Warranties    52     11.11  
Governing Law; Venue    52     11.12   Waiver of Jury Trial    53     11.13  
Severability    53     11.14   Further Assurances    53     11.15   Entirety   
53     11.16   Binding Effect; Continuing Agreement    53

SCHEDULES    

     Schedule 1.1(a)    Commitment Percentages      Schedule 1.1(b)    Pricing
Schedule      Schedule 6.20       Secured Indebtedness      Schedule
6.21       Subsidiaries      Schedule 11.1       Notices     

 

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TABLE OF CONTENTS

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EXHIBITS          Exhibit 2.2   Form of Notice of Borrowing      Exhibit 2.4  
Form of Notice of Continuation/Conversion      Exhibit 2.7   Form of Note     
Exhibit 4.4   Form of U.S. Tax Compliance Certificate      Exhibit 7.1(c)   Form
of Officer’s Certificate      Exhibit 11.3(b)   Form of Assignment Agreement   
 

 

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Execution Copy

 

REVOLVING CREDIT AGREEMENT

 

THIS REVOLVING CREDIT AGREEMENT (this “Credit Agreement”), dated as of September
24, 2004, is entered into among ATMOS ENERGY CORPORATION, a Texas and Virginia
corporation (the “Borrower”), the Lenders (as defined herein) and BANK ONE, NA,
as agent for the Lenders (in such capacity, the “Administrative Agent”).

 

RECITALS

 

WHEREAS, the Borrower wishes, from time to time, to obtain loans in the
principal sum of up to $1,700,000,000 at any one time outstanding, and the
Lenders are willing to make such loans to the Borrower, on the terms and
conditions hereinafter set forth.

 

NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

 

SECTION 1.

 

DEFINITIONS AND ACCOUNTING TERMS

 

1.1 Definitions.

 

As used herein, the following terms shall have the meanings herein specified
unless the context otherwise requires. Defined terms herein shall include in the
singular number the plural and in the plural the singular.

 

“Acquisition” means the acquisition by the Borrower of the natural gas
transmission and distribution assets of TXU Gas Company through the merger of
TXU Gas Company with a wholly owned subsidiary of the Borrower pursuant to and
in accordance with the Acquisition Agreement.

 

“Acquisition Agreement” means the Agreement and Plan of Merger by and between
TXU Gas Company and LSG Acquisition Corporation, dated as of June 17, 2004.

 

“Additional Fees” shall have the meaning set forth in Section 3.4(d).

 

“Adjusted Eurodollar Rate” means the Eurodollar Rate plus the Applicable
Percentage for Eurodollar Loans.

 

“Administrative Agent” means Bank One, NA and any successors and assigns in such
capacity.

 

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such Person. A Person shall be deemed to control another Person if such
Person possesses, directly or indirectly, the power (a) to vote 10% or more of
the securities having ordinary

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voting power for the election of directors of such other Person or (b) to direct
or cause direction of the management and policies of such other Person, whether
through the ownership of voting securities, by contract or otherwise.

 

“Agency Services Address” means 1 Bank One Plaza, 10th Floor, Chicago, Illinois
60670 or such other address as the Administrative Agent may designate in
writing.

 

“Aggregate Commitment” means one billion seven hundred million Dollars
($1,700,000,000) as such amount may be otherwise reduced in accordance with
Section 2.6.

 

“Applicable Percentage” shall have the meaning set forth in the Pricing
Schedule.

 

“Arranger” means Merrill Lynch, Pierce, Fenner & Smith Incorporated.

 

“Bankruptcy Code” means the Bankruptcy Code in Title 11 of the United States
Code, as amended, modified, succeeded or replaced from time to time.

 

“Base Rate” means a fluctuating rate of interest equal to the higher of (a) the
Prime Rate and (b) the sum of the Federal Funds Rate most recently determined by
the Administrative Agent plus 1/2% per annum. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable after due inquiry to
ascertain the Federal Funds Rate for any reason, including the inability or
failure of the Administrative Agent to obtain sufficient quotations in
accordance with the terms hereof, the Base Rate shall be determined without
regard to clause (b) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or the Federal
Funds Rate, respectively.

 

“Base Rate Loan” means a Loan which bears interest based on the Base Rate plus
the Applicable Percentage.

 

“Borrower” means Atmos Energy Corporation, a Texas and Virginia corporation.

 

“Borrower Obligations” means, without duplication, all of the obligations of the
Borrower to the Lenders and the Administrative Agent, whenever arising, under
this Credit Agreement, the Notes or any of the other Credit Documents.

 

“Business Day” means any day other than a Saturday, a Sunday, a legal holiday or
a day on which banking institutions are authorized or required by law or other
governmental action to close in Chicago, Illinois; provided that in the case of
Eurodollar Loans, such day is also a day on which dealings between banks are
carried on in U.S. dollar deposits in the London interbank market.

 

“Capital Stock” means (a) in the case of a corporation, all classes of capital
stock and equity-linked capital stock of such corporation, (b) in the case of a
partnership,

 

2

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partnership interests (whether general or limited), (c) in the case of a limited
liability company, membership interests and (d) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.

 

“Change of Control” means either of the following events:

 

(a) any “person” or “group” (within the meaning of Section 13(d) or 14(d) of the
Exchange Act) has become, directly or indirectly, the “beneficial owner” (as
defined in Rules 13d 3 (other than subsection (d) thereof) and 13d 5 under the
Exchange Act), by way of merger, consolidation or otherwise of 40% or more of
the voting power of the Borrower on a fully diluted basis, after giving effect
to the conversion and exercise of all outstanding warrants, options and other
securities of the Borrower convertible into or exercisable for voting stock of
the Borrower (whether or not such securities are then currently convertible or
exercisable); or

 

(b) during any period of two consecutive calendar years, individuals who at the
beginning of such period constituted the board of directors of the Borrower
together with any new members of such board of directors whose elections by such
board or board of directors or whose nomination for election by the stockholders
of the Borrower was approved by a vote of a majority of the members of such
board of directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election was
previously so approved cease for any reason to constitute a majority of the
directors of the Borrower then in office.

 

“Closing Date” means the date hereof.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated thereunder.

 

“Commitment Fees” has the meaning set forth in Section 3.4(a).

 

“Commitment Percentage” means, for each Lender, the percentage identified as its
Commitment Percentage opposite such Lender’s name on Schedule 1.1(a), as such
percentage may be modified by assignment in accordance with the terms of this
Credit Agreement.

 

“Commitments” means, collectively, each Lender’s share of the Aggregate
Commitment based upon such Lender’s Commitment Percentage, as reflected on
Schedule 1.1(a).

 

“Consolidated Capitalization” means, without duplication, the sum of (a) all of
the shareholders’ equity or net worth of the Borrower and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP plus (b) the aggregate
principal amount of Preferred Securities plus (c) the aggregate Minority
Interests in Subsidiaries plus (d) Consolidated Funded Debt.

 

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“Consolidated Funded Debt” means, without duplication, the sum of (a) all
indebtedness of the Borrower and its Subsidiaries for borrowed money, (b) all
purchase money indebtedness of the Borrower and its Subsidiaries, (c) the
principal portion of all obligations of the Borrower and its Subsidiaries under
capital leases, (d) all commercial letters of credit and the maximum amount of
all performance and standby letters of credit issued or bankers’ acceptance
facilities created for the account of the Borrower or one of its Subsidiaries,
including, without duplication, all unreimbursed draws thereunder, (e) all
Guaranty Obligations of the Borrower and its Subsidiaries with respect to funded
indebtedness of another Person; provided that neither the indebtedness of Atmos
Energy Marketing, LLC (“AEM”) incurred in connection with the purchase of gas by
AEM for resale to the Borrower nor the guaranty by the Borrower or one of its
Subsidiaries of such indebtedness shall be included in this definition if such
indebtedness has been outstanding for less than two months from the date of its
incurrence by AEM, (f) all indebtedness of another entity secured by a Lien on
any property of the Borrower or any of its Subsidiaries whether or not such
indebtedness has been assumed by the Borrower or any of its Subsidiaries, (g)
all indebtedness of any partnership or unincorporated joint venture to the
extent the Borrower or one of its Subsidiaries is legally obligated with respect
thereto, net of any assets of such partnership or joint venture, (h) all
obligations of the Borrower and its Subsidiaries to advance or provide funds or
other support for the payment or purchase of funded indebtedness (including,
without limitation, maintenance agreements, comfort letters or similar
agreements or arrangements) (other than as may be given in respect of AEM) and
(i) the principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off balance sheet financing
product of the Borrower or one of its Material Subsidiaries where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an operating lease in accordance with GAAP.

 

“Consolidated Net Property” means the Fixed Assets less, without duplication,
the amount of accumulated depreciation and amortization attributable thereto.

 

“Credit Documents” means this Credit Agreement, the Notes, any Notice of
Borrowing and all other related agreements and documents issued or delivered
hereunder or thereunder or pursuant hereto or thereto.

 

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

 

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

 

“Defaulting Lender” means, at any time, any Lender that, at such time (a) has
failed to make a Loan required pursuant to the term of this Credit Agreement,
(b) has failed to pay to the Administrative Agent or any Lender an amount owed
by such Lender pursuant to the terms of this Credit Agreement or (c) has been
deemed insolvent or has become subject to a bankruptcy or insolvency proceeding
or to a receiver, trustee or similar official.

 

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“Dollars” and “$” means dollars in lawful currency of the United States of
America.

 

“Effective Date” means the date on which all of the conditions set forth in
Section 5.1 shall have been fulfilled (or waived in the sole discretion of the
Lenders).

 

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; and (c)
any other Person approved by the Administrative Agent, the Arranger and the
Borrower (such approval not to be unreasonably withheld or delayed); provided
that (i) the Borrower’s consent is not required during the existence and
continuation of a Default or an Event of Default, (ii) approval by the Borrower
shall be deemed given if no objection is received by the Administrative Agent
from the Borrower within five Business Days after notice of such proposed
assignment has been received by the Borrower; and (iii) neither the Borrower nor
an Affiliate of the Borrower shall qualify as an Eligible Assignee.

 

“Environmental Laws” means any current or future legal requirement of any
Governmental Authority pertaining to (a) the protection of health, safety, and
the indoor or outdoor environment, (b) the conservation, management, or use of
natural resources and wildlife, (c) the protection or use of surface water and
groundwater or (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, release, threatened
release, abatement, removal, remediation or handling of, or exposure to, any
hazardous or toxic substance or material or (e) pollution (including any release
to land surface water and groundwater) and includes, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 USC
9601 et seq., Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Waste Amendment of 1984, 42 USC
6901 et seq., Federal Water Pollution Control Act, as amended by the Clean Water
Act of 1977, 33 USC 1251 et seq., Clean Air Act of 1966, as amended, 42 USC 7401
et seq., Toxic Substances Control Act of 1976, 15 USC 2601 et seq., Hazardous
Materials Transportation Act, 49 USC App. 1801 et seq., Occupational Safety and
Health Act of 1970, as amended, 29 USC 651 et seq., Oil Pollution Act of 1990,
33 USC 2701 et seq., Emergency Planning and Community Right-to-Know Act of 1986,
42 USC 11001 et seq., National Environmental Policy Act of 1969, 42 USC 4321 et
seq., Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq., any
analogous implementing or successor law, and any amendment, rule, regulation,
order, or directive issued thereunder.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute thereto, as interpreted by the rules and regulations
thereunder, all as the same may be in effect from time to time. References to
sections of ERISA shall be construed also to refer to any successor sections.

 

“ERISA Affiliate” means an entity, whether or not incorporated, which is under
common control with the Borrower or any of its Subsidiaries within the meaning
of Section 4001(a)(14) of ERISA, or is a member of a group which includes the
Borrower or any of its Subsidiaries and which is treated as a single employer
under Sections 414(b), (c), (m), or (o) of the Code.

 

5

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“Eurodollar Loan” means a Loan bearing interest at the Adjusted Eurodollar Rate.

 

“Eurodollar Rate” means, with respect to any Interest Period, the applicable
London interbank offered rate for deposits in U.S. dollars appearing on Reuters
Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to the first
day of the applicable Interest Period, and having a maturity equal to such
Interest Period, adjusted for Federal Reserve Board reserve requirements by
multiplying the rate so appearing by a fraction (i) the numerator of which is
one and (ii) the denominator of which is one minus the Eurodollar Reserve
Percentage.

 

“Eurodollar Reserve Percentage” means, for any day, that percentage (expressed
as a decimal) which is in effect from time to time under Regulation D, as the
maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable with respect
to Eurocurrency liabilities, as that term is defined in Regulation D (or against
any other category of liabilities that includes deposits by reference to which
the interest rate of Eurodollar Loans is determined), whether or not a Lender
has any Eurocurrency liabilities subject to such reserve requirement at that
time. Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities
and as such shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from time to
time to a Lender. The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve Percentage.

 

“Event of Default” has the meaning specified in Section 9.1.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

 

“Existing Credit Agreement” means that certain Revolving Credit Agreement, dated
as of July 23, 2004, among the Borrower, the lenders identified therein and Bank
One, NA, as administrative agent, as amended, modified, supplemented or replaced
from time to time.

 

“Federal Funds Rate” means, for any day, an interest 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, as
published for such day by the Federal Reserve Bank of New York, or if such rate
is not so published for such day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

 

“Fee Letter” means that certain letter agreement, dated as of June 16, 2004,
between the Administrative Agent and the Borrower, as amended, modified,
supplemented or replaced from time to time.

 

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“Financial Officer” means any one of the chief financial officer, the controller
or the treasurer of the Borrower.

 

“Fixed Assets” means the assets of the Borrower and its Subsidiaries
constituting “net property, plant and equipment” on the consolidated balance
sheet of the Borrower and its Subsidiaries.

 

“GAAP” means generally accepted accounting principles in the United States
applied on a consistent basis and subject to Section 1.3.

 

“Governmental Authority” means any Federal, state, local or foreign court or
governmental agency, authority, instrumentality, regulatory body or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative functions of or pertaining to government.

 

“Guaranty Obligations” means, with respect to any Person, without duplication,
any obligations (other than endorsements in the ordinary course of business of
negotiable instruments for deposit or collection) guaranteeing any indebtedness
for borrowed money of any other Person in any manner, whether direct or
indirect, and including without limitation any obligation, whether or not
contingent, (a) to purchase any such indebtedness or other obligation or any
property constituting security therefor, (b) to lease or purchase property,
securities or services primarily for the purpose of assuring the owner of such
indebtedness or (c) to otherwise assure or hold harmless the owner of such
indebtedness or obligation against loss in respect thereof. The amount of any
Guaranty Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount of
the indebtedness in respect of which such Guaranty Obligation is made.

 

“Interest Payment Date” means (a) as to Base Rate Loans, the last day of each
fiscal quarter of the Borrower and the Maturity Date, and (b) as to Eurodollar
Loans, the last day of each applicable Interest Period and the Maturity Date
and, in addition, where the applicable Interest Period for a Eurodollar Loan is
greater than three months, then also on the last day of each three-month period
during such Interest Period.

 

“Interest Period” means as to Eurodollar Loans, a period of one, two, three or
six months’ duration, as the Borrower may elect, commencing, in each case, on
the date of the borrowing (including continuations and conversions of Eurodollar
Loans); provided, however, (a) if any Interest Period would end on a day which
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then such Interest Period shall end
on the next preceding Business Day), (b) no Interest Period shall extend beyond
the Maturity Date and (c) with respect to Eurodollar Loans, where an Interest
Period begins on a day for which there is no numerically corresponding day in
the calendar month in which the Interest Period is to end, such Interest Period
shall end on the last Business Day of such calendar month.

 

7

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“Lender” means any of the Persons identified as a “Lender” on the signature
pages hereto, and any Eligible Assignee which may become a Lender by way of
assignment in accordance with the terms hereof, together with their successors
and permitted assigns.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give any
of the foregoing).

 

“Loan” means a loan made by a Lender to the Borrower pursuant to Section 2.1.

 

“Material Adverse Effect” means (a)(i) through the closing date of the
Acquisition, a material adverse effect on the business or assets of the Borrower
and its Subsidiaries, taken as a whole (after giving effect to the Acquisition),
or (ii) after the closing date of the Acquisition, a material adverse effect on
the operations, business, assets, liabilities (actual or contingent), financial
condition or prospects of the Borrower and its Subsidiaries, taken as a whole,
(b) the ability of the Borrower to perform its obligations under this Credit
Agreement or (c) the validity or enforceability of this Credit Agreement, any of
the other Credit Documents, or the rights and remedies of the Lenders hereunder
or thereunder.

 

“Material Subsidiary” means, at any date, a Subsidiary of the Borrower whose
aggregate assets properly included under the category “property, plant and
equipment” on the balance sheet of such Subsidiary, less the amount of
depreciation and amortization attributable thereto, constitutes at least 10% of
Consolidated Net Property as of such date; provided that if at any time the
Borrower has Subsidiaries that are not Material Subsidiaries whose total
aggregate assets under the category “property, plant and equipment” on the
balance sheet of such Subsidiaries, less the amount of depreciation and
amortization attributable thereto, constitutes more than 20% of Consolidated Net
Property as of such date the Borrower shall designate one or more of such
Subsidiaries as Material Subsidiaries for the purposes of this Credit Agreement
in order that all Subsidiaries of the Borrower, other than Material
Subsidiaries, own not more than 20% of Consolidated Net Property.

 

“Maturity Date” means September 23, 2005.

 

“Minority Interests” means interests owned by Persons (other than the Borrower
or a Subsidiary of the Borrower) in a Subsidiary of the Borrower in which less
than 100% of all classes of the voting securities are owned by the Borrower or
its Subsidiaries.

 

“Moody’s” means Moody’s Investors Service, Inc., or any successor or assignee of
the business of such company in the business of rating securities.

 

“Moody’s Rating” has the meaning set forth in Schedule 1.1(b).

 

“Multiemployer Plan” means a Plan covered by Title IV of ERISA which is a
multiemployer plan as defined in Section 3(37) or 4001(a)(3) of ERISA.

 

8

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“Multiple Employer Plan” means a Plan covered by Title IV of ERISA, other than a
Multiemployer Plan, which the Borrower or any ERISA Affiliate and at least one
employer other than the Borrower or any ERISA Affiliate are contributing
sponsors.

 

“Net Cash Proceeds” means, in connection with any issuance or sale of Capital
Stock or any incurrence of Consolidated Funded Debt, the cash proceeds received
by the Borrower and its Subsidiaries from such issuance or incurrence, net of
attorneys’ fees, investment banking fees, accountants’ fees, underwriting
discounts and commissions and other customary fees and expenses actually
incurred in connection therewith.

 

“1957 Indenture” means, collectively, that certain Indenture of Mortgage, dated
as of March 1, 1957, granted by Greeley Gas Company (predecessor in interest to
the Borrower) to The Central Bank and Trust Company, as original Trustee, and
all Supplemental Indentures thereto.

 

“1959 Indenture” means, collectively, that certain Indenture of Mortgage, dated
as of July 15, 1959, granted by United Cities Gas Company (predecessor in
interest to the Borrower) to City National Bank and Trust Company of Chicago and
R. Emmett Hanley, as the original Trustees, and all Supplemental Indentures
thereto, including, without limitation, that certain First Supplemental
Indenture, dated as of November 1, 1960; that certain Second Supplemental
Indenture, dated as of June 1, 1962; that certain Third Supplemental Indenture,
dated as of February 1, 1963; that certain Fourth Supplemental Indenture, dated
as of June 15, 1963; that certain Fifth Supplemental Indenture, dated as of
November 15, 1964; that certain Sixth Supplemental Indenture, dated as of March
15, 1968; that certain Seventh Supplemental Indenture, dated as of August 1,
1970; that certain Eighth Supplemental Indenture, dated as of September 1, 1972;
that certain Ninth Supplemental Indenture, dated as of January 1, 1974; that
certain Tenth Supplemental Indenture, dated as of July 1, 1976; that certain
Eleventh Supplemental Indenture, dated as of December 1, 1976; that certain
Twelfth Supplemental Indenture, dated as of April 1, 1981; that certain
Thirteenth Supplemental Indenture, dated as of May 1, 1982; that certain
Fourteenth Supplemental Indenture, dated as of March 1, 1987; that certain
Fifteenth Supplemental Indenture, dated as of October 1, 1987; that certain
Sixteenth Supplemental Indenture, dated as of December 1, 1989; that certain
Seventeenth Supplemental Indenture, dated as of April 1, 1990; that certain
Eighteenth Supplemental Indenture, dated as of June 1, 1991; that certain
Nineteenth Supplemental Indenture, dated as of May 1, 1992; that certain
Twentieth Supplemental Indenture, dated as of December 1, 1992; that certain
Twenty-First Supplemental Indenture, dated as of February 5, 1997; and that
certain Twenty-Second Supplemental Indenture, dated as of July 29, 1997.

 

“1998 Indenture” means, collectively, that certain Indenture, dated as of July
15, 1998, granted by the Borrower to US Bank Trust National Association, as
Trustee, and all Supplemental Indentures thereto.

 

“Notes” means the promissory notes of the Borrower in favor of each Lender
evidencing the Loans and substantially in the form of Exhibit 2.7, as such
promissory notes may be amended, modified, supplemented or replaced from time to
time.

 

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“Notice of Borrowing” means a request by the Borrower for a Loan in the form of
Exhibit 2.2.

 

“Notice of Continuation/Conversion” means a request by the Borrower for the
continuation or conversion of a Loan in the form of Exhibit 2.4.

 

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA and any successor thereto.

 

“Person” means any individual, partnership, joint venture, firm, corporation,
association, trust, limited liability company or other enterprise (whether or
not incorporated), or any government or political subdivision or any agency,
department or instrumentality thereof.

 

“Plan” means any employee benefit plan (as defined in Section 3(3) of ERISA)
which is covered by ERISA and with respect to which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an “employer” within the meaning of Section 3(5)
of ERISA.

 

“Preferred Securities” means, at any date, any equity interests in the Borrower,
in a Special Purpose Financing Subsidiary of the Borrower or in any other
Subsidiary of the Borrower (such as those known as “TECONS”, “MIPS” or
“RHINOS”): (a) that are not (i) required to be redeemed or redeemable at the
option of the holder thereof prior to the fifth anniversary of the Maturity Date
or (ii) convertible into or exchangeable for (unless solely at the option of the
Borrower or such Subsidiary of the Borrower) equity interests referred to in
clause (i) above or indebtedness having a scheduled maturity, or requiring any
repayments or prepayments of principal or any sinking fund or similar payments
in respect of principal or providing for any such repayment, prepayment, sinking
fund or other payment at the option of the holder thereof prior to the fifth
anniversary of the Maturity Date and (b) as to which, at such date, the Borrower
or such Subsidiary of the Borrower has the right to defer the payment of all
dividends and other distributions in respect thereof for the period of at least
19 consecutive quarters beginning at such date.

 

“Pricing Schedule” means Schedule 1.1(b).

 

“Prime Rate” means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One, NA or its parent (which is not
necessarily the lowest rate charged to any customer), changing when and as said
prime rate changes.

 

“Register” has the meaning set forth in Section 11.3(c).

 

“Regulation A, D, O, T, U, or X” means Regulation A, D, O, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System (or any
successor body) as from time to time in effect, any amendment thereto and any
successor to all or a portion thereof.

 

“Reportable Event” means a “reportable event” as defined in Section 4043 of
ERISA with respect to which the notice requirements to the PBGC have not been
waived.

 

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“Required Lenders” means Lenders whose aggregate Credit Exposure (as hereinafter
defined) constitutes more than 51% of the aggregate Credit Exposure of all
Lenders at such time; provided, however, that if any Lender shall be a
Defaulting Lender at such time then there shall be excluded from the
determination of Required Lenders the aggregate principal amount of Credit
Exposure of such Lender at such time. For purposes of the preceding sentence,
the term “Credit Exposure” as applied to each Lender shall mean (a) at any time
prior to the termination of the Commitments, the Commitment Percentage of such
Lender multiplied times the Aggregate Commitment and (b) at any time after the
termination of the Commitments, the sum of the principal balance of the
outstanding Loans of such Lender.

 

“S&P” means Standard & Poor’s Ratings Services, a division of McGraw Hill, Inc.,
or any successor or assignee of the business of such division in the business of
rating securities.

 

“S&P Rating” has the meaning set forth in Schedule 1.1(b).

 

“Seasonal Borrowings” has the meaning set forth in Section 7.2.

 

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

 

“Single Employer Plan” means any Plan which is covered by Title IV of ERISA, but
which is not a Multiemployer Plan or a Multiple Employer Plan.

 

“Special Purpose Financing Subsidiary” means a Subsidiary of the Borrower that
has no direct or indirect interest in the business of the Borrower and its other
Subsidiaries and was formed solely for the purpose of issuing Preferred
Securities.

 

“Subsidiary” means, as to any Person, (a) any corporation more than 50% of whose
stock of any class or classes having by the terms thereof ordinary voting power
to elect a majority of the directors of such corporation (irrespective of
whether or not, at the time, any class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time owned by such Person directly or indirectly through Subsidiaries and
(b) any partnership, association, joint venture, limited liability company or
other entity in which such Person directly or indirectly through Subsidiaries
has more than 50% equity interest at any time.

 

“Termination Event” means (a) with respect to any Single Employer Plan, the
occurrence of a Reportable Event or the substantial cessation of operations
(within the meaning of Section 4062(e) of ERISA), (b) the withdrawal of the
Borrower or any ERISA Affiliate from a Multiple Employer Plan during a plan year
in which it was a substantial employer (as such term is defined in Section
4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan, (c) the
distribution of a notice of intent to terminate or the actual termination of a
Plan pursuant to Section 4041(a)(2) or 4041A of ERISA, (d) the institution of
proceedings to terminate or the actual termination of a Plan by the PBGC under
Section 4042 of ERISA, (e) any event or condition which might reasonably
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or (f) the complete or partial
withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer Plan.

 

11

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“Total Assets” means all assets of the Borrower as shown on its most recent
quarterly consolidated balance sheet, as determined in accordance with GAAP.

 

“2001 Indenture” means, collectively, that certain Indenture, dated as of May
22, 2001, granted by the Borrower to SunTrust Bank, Atlanta, as Trustee, and all
Supplemental Indentures thereto.

 

“Unused Aggregate Commitment” means, for any period from the Effective Date to
the Maturity Date, the amount by which (a) the then applicable Aggregate
Commitment exceeds (b) the daily average sum for such period of the aggregate
principal amount of all Loans outstanding.

 

“USA Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, 107
P.L. 56, as amended.

 

“U.S. Tax Compliance Certificate” has the meaning set forth in Section
4.4(b)(ii).

 

“Utilization Fees” has the meaning set forth in Section 3.4(b).

 

“Utilized Revolving Commitment” means, for any day that the Utilization Fees are
required to be paid pursuant to Section 3.4(b), the amount equal to the
principal amount of Loans outstanding on such day.

 

1.2 Computation of Time Periods.

 

For purposes of computation of periods of time hereunder, the word “from” means
“from and including” and the words “to” and “until” each mean “to but
excluding.” References in this Credit Agreement to “Articles”, “Sections”,
“Schedules” or “Exhibits” shall be to Articles, Sections, Schedules or Exhibits
of or to this Credit Agreement unless otherwise specifically provided.

 

1.3 Accounting Terms.

 

Except as otherwise expressly provided herein, all accounting terms used herein
shall be interpreted, and all financial statements and certificates and reports
as to financial matters required to be delivered to the Lenders hereunder shall
be prepared, in accordance with GAAP applied on a consistent basis. All
calculations made for the purposes of determining compliance with this Credit
Agreement shall (except as otherwise expressly provided herein) be made by
application of GAAP applied on a basis consistent with the most recent annual or
quarterly financial statements delivered pursuant to Section 7.1 (or, prior to
the delivery of the first financial statements pursuant to Section 7.1,
consistent with the financial statements described in Section 5.1(d)); provided,
however, if (a) the Borrower shall object to determining such compliance on such
basis at the time of delivery of such financial statements due to any change in
GAAP or the rules promulgated with respect thereto or (b) the Administrative
Agent or the

 

12

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Required Lenders shall so object in writing within 30 days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Borrower
to the Lenders as to which no such objection shall have been made.

 

1.4 Time.

 

All references to time herein shall be references to Central Standard Time or
Central Daylight Time, as the case may be, unless specified otherwise.

 

SECTION 2.

 

LOANS

 

2.1 Aggregate Commitment.

 

Subject to the terms and conditions set forth herein, each Lender severally
agrees to make Loans to the Borrower in Dollars, at any time and from time to
time, during the period from the Effective Date to the Maturity Date (each a
“Loan” and collectively the “Loans”); provided, however, that (i) the aggregate
amount of Loans outstanding shall not exceed the Aggregate Commitment and (ii)
with respect to each individual Lender, the Lender’s Commitment Percentage
multiplied by the outstanding Loans shall not exceed such Lender’s Commitment.
Subject to the terms of this Credit Agreement, the Borrower may borrow, repay
and reborrow Loans.

 

2.2 Method of Borrowing for Loans.

 

By no later than 11:00 a.m. (a) on the date of the requested borrowing of Loans
that will be Base Rate Loans or (b) three Business Days prior to the date of the
requested borrowing of Loans that will be Eurodollar Loans, the Borrower shall
telephone the Administrative Agent as well as submit a written Notice of
Borrowing in the form of Exhibit 2.2 to the Administrative Agent setting forth
(i) the amount requested, (ii) whether such Loans shall accrue interest at the
Base Rate or the Adjusted Eurodollar Rate, (iii) with respect to Loans that will
be Eurodollar Loans, the Interest Period applicable thereto and (iv)
certification that the Borrower has complied in all respects with Section 5.2.

 

2.3 Funding of Loans.

 

Upon receipt of a Notice of Borrowing, the Administrative Agent shall promptly
inform the Lenders as to the terms thereof. Each such Lender shall make its
Commitment Percentage of the requested Loans available to the Administrative
Agent by 1:00 p.m. on the date specified in the Notice of Borrowing by deposit,
in Dollars, of immediately available funds at the Agency Services Address. The
amount of the requested Loans will then be made available to the Borrower by the
Administrative Agent by crediting the account of the Borrower on the books of
such office of the Administrative Agent, to the extent the amount of such Loans
are made available to the Administrative Agent.

 

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No Lender shall be responsible for the failure or delay by any other Lender in
its obligation to make Loans hereunder; provided, however, that the failure of
any Lender to fulfill its obligations hereunder shall not relieve any other
Lender of its obligations hereunder. Unless the Administrative Agent shall have
been notified by any Lender prior to 1:00 p.m. on the date specified in the
Notice of Borrowing that such Lender does not intend to make available to the
Administrative Agent its portion of the Loans to be made on such date, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent on the date of such Loans, and the Administrative
Agent, in reliance upon such assumption, may (in its sole discretion but without
any obligation to do so) make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the Administrative
Agent, the Administrative Agent shall be able to recover such corresponding
amount from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent’s demand therefor, the Administrative
Agent will promptly notify the Borrower, and the Borrower shall immediately pay
such corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover from the Lender or the Borrower, as the case
may be, interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Administrative Agent to
the Borrower to the date such corresponding amount is recovered by the
Administrative Agent at a per annum rate equal to (a) from the Borrower at the
applicable rate for such Loan pursuant to the Notice of Borrowing and (b) from a
Lender at the Federal Funds Rate.

 

2.4 Continuations and Conversions.

 

The Borrower shall have the option, on any Business Day, to continue existing
Eurodollar Loans for a subsequent Interest Period, to convert Base Rate Loans
into Eurodollar Loans or to convert Eurodollar Loans into Base Rate Loans;
provided, however, that (a) each such continuation or conversion must be
requested by the Borrower pursuant to a written Notice of
Continuation/Conversion, in the form of Exhibit 2.4, in compliance with the
terms set forth below, (b) except as provided in Section 4.1, Eurodollar Loans
may only be continued or converted into Base Rate Loans on the last day of the
Interest Period applicable thereto, (c) Eurodollar Loans may not be continued
nor may Base Rate Loans be converted into Eurodollar Loans during the existence
and continuation of a Default or Event of Default and (d) any request to extend
a Eurodollar Loan that fails to comply with the terms hereof or any failure to
request an extension of a Eurodollar Loan at the end of an Interest Period shall
constitute a conversion to a Base Rate Loan on the last day of the applicable
Interest Period. Each continuation or conversion must be requested by the
Borrower no later than 11:00 a.m. (i) on the date for a requested conversion of
a Eurodollar Loan to a Base Rate Loan or (ii) three Business Days prior to the
date for a requested continuation of a Eurodollar Loan or conversion of a Base
Rate Loan to a Eurodollar Loan, in each case pursuant to a written Notice of
Continuation/Conversion submitted to the Administrative Agent which shall set
forth (A) whether the Borrower wishes to continue or convert such Loans and (B)
if the request is to continue a Eurodollar Loan or convert a Base Rate Loan to a
Eurodollar Loan, the Interest Period applicable thereto.

 

2.5 Minimum Amounts.

 

Each request for a Loan or a conversion or continuation hereunder shall be
subject to the following requirements: (a) each Eurodollar Loan shall be in a
minimum of $5,000,000 (and in

 

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integral multiples of $1,000,000 in excess thereof), (b) each Base Rate Loan
shall be in a minimum amount of the lesser of $5,000,000 (and in integral
multiples of $1,000,000 in excess thereof) or the remaining amount of the
Aggregate Commitment available to be borrowed and (c) no more than five
Eurodollar Loans shall be outstanding hereunder at any one time. For the
purposes of this Section 2.5, all Eurodollar Loans with the same Interest
Periods that begin and end on the same date shall be considered as one
Eurodollar Loan, but Eurodollar Loans with different Interest Periods, even if
they begin on the same date, shall be considered separate Eurodollar Loans.

 

2.6 Reductions of Aggregate Commitment.

 

(a) Optional. Upon at least three Business Days’ prior written notice, the
Borrower shall have the right to permanently terminate or reduce the aggregate
unused amount of the Aggregate Commitment at any time or from time to time;
provided that (a) each partial reduction shall be in an aggregate amount at
least equal to $10,000,000 and in integral multiples of $1,000,000 above such
amount and (b) no reduction shall be made which would reduce the Aggregate
Commitment to an amount less than the sum of the then outstanding Loans. Any
reduction in (or termination of) the Aggregate Commitment shall be permanent and
may not be reinstated.

 

(b) Mandatory. If any Capital Stock or Consolidated Funded Debt shall be issued
by the Borrower or any of its Subsidiaries to, or incurred by the Borrower or
any of its Subsidiaries from, a Person not an Affiliate of the Borrower
(excluding (i) any Capital Stock issued under any dividend reinvestment plan,
direct stock purchase plan, employee benefit plan or to employees, directors or
officers as such, and (ii) any Consolidated Funded Debt incurred as a result of
(1) the issuance of commercial paper in the ordinary course of business, (2)
borrowings under the Existing Credit Agreement or any other credit facility
existing on the date hereof in the ordinary course of business and (3) purchase
money financings (including pursuant to capital leases) in the ordinary course
of business), an amount equal to 100% of the Net Cash Proceeds thereof shall be
applied on the date of such issuance or incurrence toward the reduction of the
Aggregate Commitment. Any such reduction of the Aggregate Commitment (i) shall
be accompanied by prepayment of the Loans to the extent required by Section
3.2(b) and (ii) shall be permanent and may not be reinstated.

 

2.7 Notes.

 

The Loans made by any Lender may, at the request of a Lender, be evidenced by a
promissory note of the Borrower payable to such Lender in substantially the form
of Exhibit 2.7 (the “Notes”).

 

The date, amount, type, interest rate and duration of Interest Period (if
applicable) of each Loan made by each Lender to the Borrower, and each payment
made on account of the principal thereof, shall be recorded by such Lender on
its books; provided that the failure of such Lender to make any such recordation
or endorsement shall not affect the obligations of the Borrower to make a
payment when due of any amount owing hereunder or under any Note in respect of
the Loans to be evidenced by such Note, and each such recordation or endorsement
shall be conclusive and binding absent manifest error.

 

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SECTION 3.

 

PAYMENTS

 

3.1 Interest.

 

(a) Interest Rate.

 

(i) All Base Rate Loans shall accrue interest at the Base Rate plus the
Applicable Percentage.

 

(ii) All Eurodollar Loans shall accrue interest at the Adjusted Eurodollar Rate
applicable to each Eurodollar Loan.

 

(b) Default Rate of Interest. Upon the occurrence, and during the continuation,
of an Event of Default, the principal of and, to the extent permitted by law,
interest on the Loans and any other amounts owing hereunder or under the other
Credit Documents shall bear interest, payable on demand, at a per annum rate
equal to two percent (2%) plus the rate which would otherwise be applicable (or
if no rate is applicable, then the rate for Loans that are Base Rate Loans plus
two percent (2%) per annum).

 

(c) Interest Payments. Interest on Loans shall be due and payable in arrears on
each Interest Payment Date.

 

3.2 Prepayments.

 

(a) Voluntary Prepayments. The Borrower shall have the right to prepay Loans in
whole or in part from time to time without premium or penalty; provided,
however, that (i) Eurodollar Loans may only be prepaid on three Business Days’
prior written notice to the Administrative Agent and any prepayment of
Eurodollar Loans will be subject to Section 4.3; and (ii) each such partial
prepayment of Loans shall be in the minimum principal amount of $10,000,000 and
in integral multiples of $1,000,000 above such amount. Amounts prepaid hereunder
shall be applied as the Borrower may elect; provided that if the Borrower fails
to specify the application of a voluntary prepayment then such prepayment shall
be applied first to Base Rate Loans, and then to Eurodollar Loans in direct
order of Interest Period maturities pro rata among all Lenders holding same.

 

(b) Mandatory Prepayments. If at any time the amount of Loans outstanding
exceeds the Aggregate Commitment (including, without limitation, as a result of
a reduction in the Aggregate Commitment pursuant to Section 2.6(b)), the
Borrower shall immediately make a principal payment to the Administrative Agent
in the manner and in an amount such that the amount of Loans outstanding is less
than or equal to the Aggregate Commitment. Any payments made under this Section
3.2(b) shall be subject to Section 4.3 and shall be applied first to Base Rate
Loans and then to Eurodollar Loans in direct order of Interest Period maturities
pro rata among all Lenders holding same.

 

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3.3 Payment in full at Maturity.

 

On the Maturity Date, the entire outstanding principal balance of all Loans,
together with accrued but unpaid interest and all other sums owing under this
Credit Agreement and the other Credit Documents, shall be due and payable in
full, unless accelerated sooner pursuant to Section 9.2.

 

3.4 Fees.

 

(a) Commitment Fees.

 

(i) In consideration of the Aggregate Commitment being made available by the
Lenders hereunder, the Borrower agrees to pay to the Administrative Agent, for
the pro rata benefit of each Lender, a per annum fee equal to the Applicable
Percentage for Commitment Fees (as set forth on the Pricing Schedule) on the
Unused Aggregate Commitment (the “Commitment Fees”).

 

(ii) The accrued Commitment Fees shall be due and payable in arrears five
Business Days after the end of each fiscal quarter of the Borrower (as well as
on the Maturity Date) for the immediately preceding fiscal quarter (or portion
thereof), beginning with the first of such dates to occur after the Effective
Date.

 

(b) Utilization Fees. For each day that the principal amount of outstanding
Loans hereunder shall exceed an amount equal to thirty three and one third
percent (33 1/3%) of the Aggregate Commitment, the Borrower shall pay to the
Administrative Agent, for the pro rata benefit of the Lenders, a per annum fee
equal to the Applicable Percentage for Utilization Fees (as set forth on the
Pricing Schedule) on the outstanding principal balance of the Loans (the
“Utilization Fees”). The Utilization Fees, if any, shall be due and payable in
arrears five Business Days after the end of each fiscal quarter of the Borrower
(as well as on the Maturity Date) for the immediately preceding fiscal quarter
(or portion thereof), beginning with the first of such dates to occur after the
Effective Date.

 

(c) Arranger Fees. The Borrower agrees to pay to the Arranger, for its own
account, a fee as agreed to between the Borrower and the Arranger in the Fee
Letter.

 

(d) Additional Fees. If any Commitments shall be outstanding on the date that is
six months after the Effective Date, the Borrower shall pay a fee (an
“Additional Fee”) to the Administrative Agent, on behalf of each Lender, in an
amount equal to 0.05% of such Lender’s Commitment outstanding on such date.

 

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3.5 Place and Manner of Payments.

 

All payments of principal, interest, fees, expenses and other amounts to be made
by the Borrower under this Credit Agreement shall be made unconditionally and
without setoff, deduction, defense, recoupment or counterclaim and received not
later than 2:00 p.m. on the date when due, in Dollars and in immediately
available funds, by the Administrative Agent at the Agency Services Address. In
the event any such payment shall be due on a day that is not a Business Day, the
applicable payment date shall be the next succeeding Business Day, except, with
respect to Eurodollar Loans, if the next succeeding Business Day shall fall in
the next succeeding calendar month, then such payment shall be due on the next
preceding Business Day. The Borrower shall, at the time it makes any payment
under this Credit Agreement, specify to the Administrative Agent, the Loans,
fees or other amounts payable by the Borrower hereunder to which such payment is
to be applied (and in the event that it fails to specify, or if such application
would be inconsistent with the terms hereof, the Administrative Agent shall
distribute such payment to the Lenders in such manner as it reasonably
determines in its sole discretion.)

 

3.6 Pro Rata Treatment.

 

Except to the extent otherwise provided herein, all Loans, each payment or
prepayment of principal of any Loan, each payment of interest on the Loans, each
payment of Commitment Fees, each payment of Utilization Fees, each reduction of
the Aggregate Commitment, and each conversion or continuation of any Loans,
shall be allocated pro rata among the Lenders in accordance with the respective
Commitment Percentages; provided that, if any Lender shall have failed to pay
its applicable pro rata share of any Loan, then any amount to which such Lender
would otherwise be entitled pursuant to this Section 3.6 shall instead be
payable to the Administrative Agent until the share of such Loan not funded by
such Lender has been repaid and any interest owed by such Lender as a result of
such failure to fund has been paid; and provided further, that in the event any
amount paid to any Lender pursuant to this Section 3.6 is rescinded or must
otherwise be returned by the Administrative Agent, each Lender shall, upon the
request of the Administrative Agent, repay to the Administrative Agent the
amount so paid to such Lender, with interest for the period commencing on the
date such payment is returned by the Administrative Agent until the date the
Administrative Agent receives such repayment at a rate per annum equal to,
during the period to but excluding the date two Business Days after such
request, the Federal Funds Rate, and thereafter, the Base Rate plus two percent
(2%) per annum.

 

3.7 Computations of Interest and Fees.

 

(a) Except for Base Rate Loans accruing interest at the Prime Rate, which
interest shall be computed on the basis of a 365 or 366 day year as the case may
be, all computations of interest and fees hereunder shall be made on the basis
of the actual number of days elapsed over a year of 360 days. Interest shall
accrue from the date a Loan is made until the date such Loan is repaid or
continued or converted pursuant to Section 2.4.

 

(b) It is the intent of the Lenders and the Borrower to conform to and contract
in strict compliance with applicable usury law from time to time in effect. All
agreements

 

18

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between the Lenders and the Borrower are hereby limited by the provisions of
this paragraph which shall override and control all such agreements, whether now
existing or hereafter arising and whether written or oral. In no way, nor in any
event or contingency (including but not limited to prepayment or acceleration of
the maturity of any obligation), shall the interest taken, reserved, contracted
for, charged, or received under this Credit Agreement, under the Notes or
otherwise, exceed the maximum nonusurious amount permissible under applicable
law. If, from any possible construction of any of the Credit Documents or any
other document, interest would otherwise be payable in excess of the maximum
nonusurious amount, any such construction shall be subject to the provisions of
this paragraph and interest owing pursuant to such documents shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which would,
apart from this provision, be in excess of the maximum lawful amount, an amount
equal to the amount which would have been excessive interest shall, without
penalty, be applied to the reduction of the principal amount owing on the Loans
and not to the payment of interest, or refunded to the Borrower or the other
payor thereof if and to the extent such amount which would have been excessive
exceeds such unpaid principal amount of the Loans. The right to demand payment
of the Loans or any other indebtedness evidenced by any of the Credit Documents
does not include the right to receive any interest which has not otherwise
accrued on the date of such demand, and the Lenders do not intend to charge or
receive any unearned interest in the event of such demand. All interest paid or
agreed to be paid to the Lenders with respect to the Loans shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term (including any renewal or extension) of the
Loans so that the amount of interest on account of such indebtedness does not
exceed the maximum nonusurious amount permitted by applicable law.

 

3.8 Sharing of Payments.

 

Each Lender agrees that, in the event that any Lender shall obtain payment in
respect of any Loan or any other obligation owing to such Lender under this
Credit Agreement through the exercise of a right of set-off, banker’s lien,
counterclaim or otherwise (including, but not limited to, pursuant to the
Bankruptcy Code) in excess of its pro rata share as provided for in this Credit
Agreement, such Lender shall promptly purchase from the other Lenders a
participation in such Loans and other obligations, in such amounts and with such
other adjustments from time to time, as shall be equitable in order that all
Lenders share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. Each Lender further agrees that if a
payment to a Lender (which is obtained by such Lender through the exercise of a
right of set-off, banker’s lien, counterclaim or otherwise) shall be rescinded
or must otherwise be restored, each Lender which shall have shared the benefit
of such payment shall, by repurchase of a participation theretofore sold, return
its share of that benefit to each Lender whose payment shall have been rescinded
or otherwise restored. The Borrower agrees that any Lender so purchasing such a
participation may, to the fullest extent permitted by law, exercise all rights
of payment, including set-off, banker’s lien or counterclaim, with respect to
such participation as fully as if such Lender were a holder of such Loan or
other obligation in the amount of such

 

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participation. Except as otherwise expressly provided in this Credit Agreement,
if any Lender shall fail to remit to the Administrative Agent or any other
Lender an amount payable by such Lender to the Administrative Agent or such
other Lender pursuant to this Credit Agreement on the date when such amount is
due, such payments shall accrue interest thereon, for each day from the date
such amount is due until the day such amount is paid to the Administrative Agent
or such other Lender, at a rate per annum equal to the Federal Funds Rate. If
under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this Section 3.8 applies,
such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders under
this Section 3.8 to share in the benefits of any recovery on such secured claim.

 

3.9 Evidence of Debt.

 

(a) Each Lender shall maintain an account or accounts evidencing each Loan made
by such Lender to the Borrower from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Credit Agreement. Each Lender will make reasonable efforts to maintain the
accuracy of its account or accounts and to promptly update its account or
accounts from time to time, as necessary.

 

(b) The Administrative Agent shall maintain the Register pursuant to Section
11.3(c), and a subaccount for each Lender, in which Register and subaccounts
(taken together) shall be recorded (i) the amount, type and Interest Period of
each such Loan hereunder, (ii) the amount of any principal or interest due and
payable or to become due and payable to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder from or for the
account of the Borrower and each Lender’s share thereof. The Administrative
Agent will make reasonable efforts to maintain the accuracy of the subaccounts
referred to in the preceding sentence and to promptly update such subaccounts
from time to time, as necessary.

 

(c) The entries made in the accounts, Register and subaccounts maintained
pursuant to subsection (b) of this Section 3.9 (and, if consistent with the
entries of the Administrative Agent, subsection (a)) shall be prima facie
evidence of the existence and amounts of the obligations of the Borrower therein
recorded; provided, however, that the failure of any Lender or the
Administrative Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner affect
the obligation of the Borrower to repay the Loans made by such Lender in
accordance with the terms hereof.

 

SECTION 4.

 

ADDITIONAL PROVISIONS REGARDING LOANS

 

4.1 Eurodollar Loan Provisions.

 

(a) Unavailability. In the event that the Administrative Agent shall have
determined in good faith (i) that U.S. dollar deposits in the principal amounts
requested

 

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with respect to a Eurodollar Loan are not generally available in the London
interbank Eurodollar market or (ii) that reasonable means do not exist for
ascertaining the Eurodollar Rate, the Administrative Agent shall, as soon as
practicable thereafter, give notice of such determination to the Borrower and
the Lenders. In the event of any such determination under clauses (i) or (ii)
above, until the Administrative Agent shall have advised the Borrower and the
Lenders that the circumstances giving rise to such notice no longer exist, (A)
any request by the Borrower for Eurodollar Loans shall be deemed to be a request
for Base Rate Loans, (B) any request by the Borrower for conversion into or
continuation of Eurodollar Loans shall be deemed to be a request for conversion
into or continuation of Base Rate Loans and (C) any Loans that were to be
converted or continued as Eurodollar Loans on the first day of an Interest
Period shall be converted to or continued as Base Rate Loans.

 

(b) Change in Legality.

 

(i) Notwithstanding any other provision herein, if any change, after the date
hereof, in any law, governmental rule, regulation, guideline or order (including
the introduction of any new law, governmental rule, regulation, guideline or
order) or in the interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof shall make
it unlawful for any Lender to make or maintain any Eurodollar Loan or to give
effect to its obligations as contemplated hereby with respect to any Eurodollar
Loan, then, by written notice to the Borrower and to the Administrative Agent,
such Lender may:

 

(A) declare that Eurodollar Loans, and conversions to or continuations of
Eurodollar Loans, will not thereafter be made by such Lender hereunder,
whereupon any request by the Borrower for, or for conversion into or
continuation of, Eurodollar Loans shall, as to such Lender only, be deemed a
request for, or for conversion into or continuation of, Base Rate Loans, unless
such declaration shall be subsequently withdrawn; and

 

(B) require that all outstanding Eurodollar Loans made by it be converted to
Base Rate Loans in which event all such Eurodollar Loans shall be automatically
converted to Base Rate Loans.

 

In the event any Lender shall exercise its rights under clause (A) or (B) above,
all payments and prepayments of principal which would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such Lender
or the converted Eurodollar Loans of such Lender shall instead be applied to
repay the Base Rate Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.

 

(c) Requirements of Law. If at any time a Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to the
making, the commitment to make or the maintaining of any Eurodollar Loan because
of (i) any change, after the date hereof, in any law, governmental rule,
regulation, guideline or

 

21

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order (including the introduction of any new law, governmental rule, regulation,
guideline or order) or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, including, without limitation, the imposition, modification or deemed
applicability of any reserves, deposits or similar requirements (such as, for
example, but not limited to, a change in official reserve requirements, but, in
all events, excluding reserves required under Regulation D to the extent
included in the computation of the Adjusted Eurodollar Rate) or (ii) other
circumstances affecting the London interbank Eurodollar market; then (A) the
Lender shall promptly notify the Administrative Agent and the Borrower and shall
designate a different lending office of such Lender if such designation will
avoid or reduce the amount of such increased costs, or reductions in amounts
receivable and such designation will not, in such Lender’s sole discretion, be
otherwise disadvantageous to such Lender and (B) the Borrower shall promptly pay
to such Lender such additional amounts (in the form of an increased rate of, or
a different method of calculating, interest or otherwise as such Lender may
determine in its sole discretion) as may be required to compensate such Lender
for such increased costs or reductions in amounts receivable hereunder.

 

Each determination and calculation made by a Lender under this Section 4.1
shall, absent manifest error, be binding and conclusive on the parties hereto.
Any conversions of Eurodollar Loans made pursuant to this Section 4.1 shall
subject the Borrower to the payments required by Section 4.3. This Section 4.1
shall survive termination of this Credit Agreement and the other Credit
Documents and the payment of the Loans and all other amounts payable hereunder.

 

4.2 Capital Adequacy.

 

If any Lender has determined in good faith that the adoption or effectiveness,
after the date hereof, of any applicable law, rule or regulation regarding
capital adequacy, or any change therein (after the date hereof), or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Lender (or its parent corporation)
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Lender’s (or
parent corporation’s) capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender (or its parent
corporation) could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Lender’s (or parent corporation’s)
policies with respect to capital adequacy), then, upon notice from such Lender,
the Borrower shall promptly pay to such Lender such additional amount or amounts
as will compensate such Lender for such reduction. Each determination by any
such Lender of amounts owing under this Section 4.2 shall, absent manifest
error, be conclusive and binding on the parties hereto. This Section 4.2 shall
survive termination of this Credit Agreement and the other Credit Documents and
the payment of the Loans and all other amounts payable hereunder.

 

4.3 Compensation.

 

The Borrower promises to indemnify each Lender and to hold each Lender harmless
from any loss or expense which such Lender may sustain or incur as a consequence
of (a) default by

 

22

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the Borrower in the making of a borrowing of, conversion into or continuation of
a Eurodollar Loan after the Borrower has given a notice requesting the same in
accordance with the provisions of this Credit Agreement, (b) default by the
Borrower in making any prepayment of a Eurodollar Loan after the Borrower has
given a notice thereof in accordance with the provisions of this Credit
Agreement, (c) the making of a prepayment of a Eurodollar Loan on a day which is
not the last day of an Interest Period with respect thereto and (d) the payment,
continuation or conversion of a Eurodollar Loan on a day which is not the last
day of the Interest Period applicable thereto or the failure to repay a
Eurodollar Loan when required by the terms of this Credit Agreement. Each
determination by any such Lender of amounts owing under this Section 4.3 shall,
absent manifest error, be conclusive and binding on the parties hereto. This
Section 4.3 shall survive the termination of this Credit Agreement and the other
Credit Documents and the payment of the Loans and all other amounts payable
hereunder.

 

4.4 Taxes.

 

(a) Except as provided below in this Section 4.4, all payments made by the
Borrower under this Credit Agreement and any Notes shall be made free and clear
of, and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding taxes measured by
or imposed upon the net income of any Lender or its applicable lending office,
or any branch or affiliate thereof, and all franchise taxes, branch taxes, taxes
on doing business or taxes on the capital or net worth of any Lender or its
applicable lending office, or any branch or affiliate thereof, in each case
imposed in lieu of net income taxes: (i) by the jurisdiction under the laws of
which such Lender, applicable lending office, branch or affiliate is organized
or is located, or in which its principal executive office is located, or any
nation within which such jurisdiction is located or any political subdivision
thereof; or (ii) by reason of any connection between the jurisdiction imposing
such tax and such Lender, applicable lending office, branch or affiliate other
than a connection arising solely from such Lender having executed, delivered or
performed its obligations under, or received payment under or enforced, this
Credit Agreement or any Notes. If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) are
required to be withheld from any amounts payable to an Administrative Agent or
any Lender hereunder or under any Notes, (A) the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Credit Agreement and any Notes,
provided, however, that the Borrower shall be entitled to deduct and withhold
any Non-Excluded Taxes and shall not be required to increase any such amounts
payable to any Lender that is not organized under the laws of the United States
of America or a state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this Section 4.4 whenever any Non-Excluded
Taxes are payable by the Borrower, and (B) as promptly as possible thereafter
the Borrower shall send to the Administrative Agent for its own account or for
the account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the

 

23

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appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and any Lender for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The agreements in this Section 4.4 shall
survive the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.

 

(b) Each Lender that is not incorporated under the laws of the United States of
America or a state thereof shall:

 

(i) (A) on or before the date of any payment by the Borrower under this Credit
Agreement or the Notes to such Lender, deliver to the Borrower and the
Administrative Agent (x) two duly completed copies of United States Internal
Revenue Service Form W-8BEN (certifying that it is a resident of the applicable
country within the meaning of the income tax treaty between the United States
and that country) or W-8ECI, or successor applicable form, as the case may be,
certifying that it is entitled to receive payments under this Credit Agreement
and any Notes without deduction or withholding of any United States federal
income taxes and (y) such other forms, documentation or certifications, as the
case may be, certifying that it is entitled to an exemption from United States
backup withholding tax with respect to payments under this Credit Agreement and
any Notes;

 

(B) deliver to the Borrower and the Administrative Agent two further copies of
any such form or certification on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Borrower; and

 

(C) obtain such extensions of time for filing and complete such forms or
certifications as may reasonably be requested by the Borrower or the
Administrative Agent; or

 

(ii) in the case of any such Lender that is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (A) represent to the Borrower (for the benefit
of the Borrower and the Administrative Agent) that it is not a bank within the
meaning of Section 881(c)(3)(A) of the Code, (B) agree to furnish to the
Borrower, on or before the date of any payment by the Borrower, with a copy to
the Administrative Agent, (I) two certificates substantially in the form of
Exhibit 4.4 (any such certificate a “U.S. Tax Compliance Certificate”) and (II)
two accurate and complete original signed copies of Internal Revenue Service
Form W-8BEN, or successor applicable form certifying to such Lender’s legal
entitlement at the date of such certificate to an exemption from U.S.
withholding tax under the provisions of Section 871(h) or Section 881(c) of the
Code with respect to payments to be made under this Credit Agreement and any
Notes (and to deliver to the Borrower and the Administrative Agent two further
copies of such form or certificate on or before the date it expires or becomes
obsolete and

 

24

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after the occurrence of any event requiring a change in the most recently
provided form or certificate and, if necessary, obtain any extensions of time
reasonably requested by the Borrower or the Administrative Agent for filing and
completing such forms or certificates), and (C) agree, to the extent legally
entitled to do so, upon reasonable request by the Borrower, to provide to the
Borrower (for the benefit of the Borrower and the Administrative Agent) such
other forms as may be reasonably required in order to establish the legal
entitlement of such Lender to an exemption from withholding with respect to
payments under this Credit Agreement and any Notes; provided that in determining
the reasonableness of a request under this clause (C) such Lender shall be
entitled to consider the cost (to the extent unreimbursed by the Borrower) which
would be imposed on such Lender of complying with such request.

 

Notwithstanding the above, if any change in treaty, law or regulation has
occurred after the date such Person becomes a Lender hereunder which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent, then such Lender shall be exempt from
such requirements. Each Person that shall become a Lender or a participant of a
Lender pursuant to Section 11.3 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms, certifications and statements
required pursuant to this subsection (b); provided that in the case of a
participant of a Lender, the obligations of such participant of a Lender
pursuant to this subsection (b) shall be determined as if the participant of a
Lender were a Lender except that such participant of a Lender shall furnish all
such required forms, certifications and statements to the Lender from which the
related participation shall have been purchased.

 

SECTION 5.

 

CONDITIONS PRECEDENT

 

5.1 Closing Conditions.

 

The obligation of the Lenders to enter into this Credit Agreement is subject to
satisfaction (or waiver), on or before December 31, 2004 (or, with the consent
of the Arranger, up to 90 days beyond such date, but only to the extent (and for
the duration) that TXU Gas Company has elected to extend the date for closing
the Acquisition pursuant to the Acquisition Agreement in connection with the
repair or replacement of assets damaged or destroyed by a casualty event) of the
following conditions:

 

(a) Executed Credit Documents. Receipt by the Administrative Agent of duly
executed copies of (i) this Credit Agreement, (ii) the Notes and (iii) all other
Credit Documents, each in form and substance acceptable to the Lenders.

 

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(b) Corporate Documents. Receipt by the Administrative Agent of the following:

 

(i) Charter Documents. Copies of the articles of incorporation or other charter
documents of the Borrower certified to be true and complete as of a recent date
by the appropriate Governmental Authorities of the states or other jurisdictions
of its incorporation and certified by a secretary or assistant secretary of the
Borrower to be true and correct as of the Closing Date.

 

(ii) Bylaws. A copy of the bylaws of the Borrower certified by a secretary or
assistant secretary of the Borrower to be true and correct as of the Closing
Date.

 

(iii) Resolutions. Copies of resolutions of the Board of Directors of the
Borrower approving and adopting the Credit Documents to which it is a party, the
transactions contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of the Borrower to be
true and correct and in full force and effect as of the Closing Date.

 

(iv) Good Standing. Copies of certificates of good standing, existence or its
equivalent with respect to the Borrower certified as of a recent date by the
appropriate Governmental Authorities of the states or other jurisdictions of
incorporation and each other jurisdiction in which the failure to so qualify and
be in good standing would have a Material Adverse Effect.

 

(v) Incumbency. An incumbency certificate of the Borrower certified by a
secretary or assistant secretary of the Borrower to be true and correct as of
the Closing Date.

 

(c) Opinion of Counsel. Receipt by the Administrative Agent of an opinion, or
opinions, from legal counsel to the Borrower addressed to the Administrative
Agent on behalf of the Lenders and dated as of the Effective Date, in each case
satisfactory in form and substance to the Administrative Agent.

 

(d) Financial Statements. Receipt by the Lenders of the consolidated audited
financial statements of the Borrower and its Subsidiaries dated as of September
30, 2002 and September 30, 2003, and the unaudited financial statements for the
quarter ending December 31, 2003, March 31, 2004 and June 30, 2004, including
balance sheets and income and cash flow statements, in each case audited (except
for the quarterly financial statements) by independent public accountants of
recognized standing and prepared in accordance with GAAP.

 

(e) Fees and Expenses. Payment by the Borrower of all fees and expenses owed by
it to the Lenders, the Arranger and the Administrative Agent, including, without
limitation, payment to the Administrative Agent of the fees set forth in the Fee
Letter.

 

(f) Material Adverse Effect. No event or condition shall have occurred since
June 30, 2004 that has had a Material Adverse Effect.

 

(g) Officer’s Certificates. The Administrative Agent shall have received a
certificate or certificates executed by a Financial Officer of the Borrower as
of the

 

26

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Effective Date stating that (i) the Borrower and its Subsidiaries are in
compliance with all existing material financial obligations, (ii) no action,
suit, investigation or legal, equitable, arbitration or administrative
proceeding is pending or, to such officer’s knowledge, threatened in any court
or before any arbitrator or Governmental Authority that would have or be
reasonably expected to have a Material Adverse Effect, (iii) the financial
statements and information delivered to the Administrative Agent on or before
the Effective Date were prepared in good faith and in accordance with GAAP and
(iv) immediately after giving effect to this Credit Agreement, the other Credit
Documents and all the transactions contemplated herein and therein to occur on
such date, (A) no Default or Event of Default exists, (B) all representations
and warranties contained herein and in the other Credit Documents are true and
correct in all material respects on and as of the date made and (C) the Borrower
is in compliance with the financial covenant set forth in Section 7.2.

 

(h) Acquisition. The Acquisition shall have been consummated pursuant to the
terms of the Acquisition Agreement for an aggregate purchase price not exceeding
$1,925,000,000 (or an adjusted amount in accordance with the terms of the
Acquisition Agreement), and no provision thereof shall have been waived,
amended, supplemented or otherwise modified in a manner adverse to the Lenders
without the consent of the Arranger (such consent not to be unreasonably
withheld). The fees and expenses to be incurred in connection with the
Acquisition and financed through Loans shall not exceed $15,000,000 in the
aggregate.

 

(i) USA Patriot Act. The Administrative Agent shall have received all
documentation and other information requested by the Administrative Agent that
is required to satisfy applicable “know your customer” and anti-money laundering
rules and regulations, including without limitation the USA Patriot Act.

 

(j) Other. Receipt by the Lenders of such other documents, instruments,
agreements or information as reasonably requested by any Lender.

 

5.2 Conditions to Loans.

 

In addition to the conditions precedent stated elsewhere herein, the Lenders
shall not be obligated to make any Loans unless:

 

(a) Request. The Borrower shall have timely delivered a duly executed and
completed Notice of Borrowing in conformance with all the terms and conditions
of this Credit Agreement.

 

(b) Representations and Warranties. The representations and warranties made by
the Borrower are true and correct in all material respects at and as if made as
of the date of the funding of the requested Loans.

 

(c) No Default. No Default or Event of Default shall exist or be continuing
either prior to or after giving effect thereto.

 

27

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(d) Availability. Immediately after giving effect to the making of a Loan (and
the application of the proceeds thereof) the sum of the amount of Loans
outstanding shall not exceed the Aggregate Commitment.

 

The delivery of each Notice of Borrowing shall constitute a representation and
warranty by the Borrower of the correctness of the matters specified in
subsections (b) through (d) above.

 

SECTION 6.

 

REPRESENTATIONS AND WARRANTIES

 

The Borrower hereby represents and warrants to each Lender that:

 

6.1 Organization and Good Standing.

 

The Borrower (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdictions of its incorporation, (b) is duly
qualified and in good standing as a foreign corporation authorized to do
business in every jurisdiction where the failure to so qualify would have or
would reasonably be expected to have a Material Adverse Effect and (c) has the
requisite corporate power and authority to own its properties and to carry on
its business as now conducted and as proposed to be conducted.

 

6.2 Due Authorization.

 

The Borrower (a) has the requisite corporate power and authority to execute,
deliver and perform this Credit Agreement and the other Credit Documents and to
incur the obligations herein and therein provided for and (b) has been
authorized by all necessary corporate action, to execute, deliver and perform
this Credit Agreement and the other Credit Documents.

 

6.3 No Conflicts.

 

Neither the execution and delivery of the Credit Documents, nor the consummation
of the transactions contemplated therein, nor performance of and compliance with
the terms and provisions thereof by the Borrower will in any material respect
(a) violate or conflict with any provision of its articles of incorporation or
bylaws, (b) violate, contravene or conflict with any law (including without
limitation, the Public Utility Holding Company Act of 1935, as amended),
regulation (including without limitation, Regulation U, Regulation X or any
regulation promulgated by the Federal Energy Regulatory Commission), order,
writ, judgment, injunction, decree or permit applicable to it, (c) violate,
contravene or conflict with contractual provisions of, or cause an event of
default under, any indenture, loan agreement, mortgage, deed of trust, contract
or other agreement or instrument to which it is a party or by which it or its
properties may be bound, or (d) result in or require the creation of any Lien
upon or with respect to its properties.

 

6.4 Consents.

 

No consent, approval, authorization or order of, or filing, registration or
qualification with, any court or Governmental Authority or third party is
required in connection with the execution, delivery or performance of this
Credit Agreement or any of the other Credit Documents.

 

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6.5 Enforceable Obligations.

 

This Credit Agreement and the other Credit Documents have been duly executed and
delivered and constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective terms,
except as may be limited by bankruptcy or insolvency laws or similar laws
affecting creditors’ rights generally or by general equitable principles.

 

6.6 Financial Condition.

 

(a) The financial statements delivered to the Lenders pursuant to Section 5.1(d)
and pursuant to Section 7.1(a) and (b): (i) have been prepared in accordance
with GAAP (subject to the provisions of Section 1.3) and (ii) present fairly in
all material respects the financial condition, results of operations, and cash
flows of the Borrower and its Subsidiaries as of the applicable dates and for
the applicable periods.

 

(b) Since June 30, 2004, there has been no sale, transfer or other disposition
by the Borrower of any material part of the business or property of the
Borrower, and except for the Acquisition, no purchase or other acquisition by
the Borrower of any business or property (including any Capital Stock of any
other Person) material in relation to the financial condition of the Borrower,
in each case which is not (i) reflected in the most recent financial statements
delivered to the Lenders pursuant to Section 5.1(d) or 7.1 or in the notes
thereto or (ii) otherwise permitted by the terms of this Credit Agreement and
communicated to the Administrative Agent.

 

6.7 No Material Change.

 

Since June 30, 2004 and through the closing date of the Acquisition, there has
been no development or event relating to or affecting the Borrower or any of its
Subsidiaries that has had a Material Adverse Effect. After the closing date of
the Acquisition, there has been no development or event relating to or affecting
the Borrower or any of its Subsidiaries that has had or would be reasonably
expected to have a Material Adverse Effect.

 

6.8 No Default.

 

No Default or Event of Default presently exists and is continuing.

 

6.9 Litigation.

 

There are no actions, suits, investigations or legal, equitable, arbitration or
administrative proceedings pending or, to the knowledge of the Borrower,
threatened against the Borrower, any of its Subsidiaries or any of its
properties which could have or be reasonably expected to have a Material Adverse
Effect.

 

29

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6.10 Taxes.

 

The Borrower and its Subsidiaries have filed, or caused to be filed, all tax
returns (federal, state, local and foreign) required to be filed and paid all
amounts of taxes shown thereon to be due (including interest and penalties) and
has paid all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes which are not yet delinquent or that
are being contested in good faith and by proper proceedings, and against which
adequate reserves are being maintained in accordance with GAAP.

 

6.11 Compliance with Law.

 

The Borrower and each of its Subsidiaries is in compliance with all laws, rules,
regulations, orders and decrees applicable to it or to its properties, except
where the failure to be in compliance would not have or would not reasonably be
expected to have a Material Adverse Effect.

 

6.12 Material Agreements.

 

Neither the Borrower nor any of its Subsidiaries is in default in any respect
under any contract, lease, loan agreement, indenture, mortgage, security
agreement or other agreement or obligation to which it is a party or by which
any of its properties is bound which default has had or would be reasonably
expected to have a Material Adverse Effect.

 

6.13 ERISA.

 

Except as would not result or be reasonably expected to result in a Material
Adverse Effect:

 

(a) During the five-year period prior to the date on which this representation
is made or deemed made: (i) no Termination Event has occurred, and, to the best
knowledge of the Borrower, no event or condition has occurred or exists as a
result of which any Termination Event is reasonably expected to occur, with
respect to any Plan; (ii) no “accumulated funding deficiency,” as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether or not
waived, has occurred with respect to any Plan; (iii) each Plan has been
maintained, operated, and funded in material compliance with its own terms and
in material compliance with the provisions of ERISA, the Code, and any other
applicable federal or state laws; and (iv) no Lien in favor or the PBGC or a
Plan has arisen or is reasonably expected to arise on account of any Plan.

 

(b) No liability has been or is reasonably expected by the Borrower to be
incurred under Sections 4062, 4063 or 4064 of ERISA with respect to any Single
Employer Plan by the Borrower or any of its Subsidiaries which has or would
reasonably be expected to have a Material Adverse Effect.

 

(c) The actuarial present value of all “benefit liabilities” under each Single
Employer Plan (determined within the meaning of Section 401(a)(2) of the Code,
utilizing the actuarial assumptions used to fund such Plans), whether or not
vested, did

 

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not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the current value of the assets of
such Plan allocable to such accrued liabilities, except as disclosed in the
Borrower’s financial statements.

 

(d) Neither the Borrower nor any ERISA Affiliate has incurred, or, to the best
knowledge of the Borrower, is reasonably expected to incur, any withdrawal
liability under ERISA to any Multiemployer Plan or Multiple Employer Plan.
Neither the Borrower nor any ERISA Affiliate has received any notification that
any Multiemployer Plan is in reorganization (within the meaning of Section 4241
of ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or has
been terminated (within the meaning of Title IV of ERISA), and no Multiemployer
Plan is, to the best knowledge of the Borrower, reasonably expected to be in
reorganization, insolvent, or terminated.

 

(e) No prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) or breach of fiduciary responsibility has occurred
with respect to a Plan which has subjected or is reasonably likely to subject
the Borrower or any ERISA Affiliate to any liability under Sections 406, 407,
409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any
agreement or other instrument pursuant to which the Borrower or any ERISA
Affiliate has agreed or is required to indemnify any person against any such
liability.

 

(f) The present value (determined using actuarial and other assumptions which
are reasonable with respect to the benefits provided and the employees
participating) of the liability of the Borrower and each ERISA Affiliate for
post-retirement welfare benefits to be provided to their current and former
employees under Plans which are welfare benefit plans (as defined in Section
3(1) of ERISA), net of all assets under all such Plans allocable to such
benefits, are reflected on the financial statements referenced in Section 7.1 in
accordance with FASB 106.

 

(g) Each Plan which is a welfare plan (as defined in Section 3(1) of ERISA) to
which Sections 601-609 of ERISA and Section 4980B of the Code apply has been
administered in compliance in all material respects with such sections.

 

6.14 Use of Proceeds.

 

The proceeds of the Loans hereunder will be used solely for the purposes
specified in Section 7.8.

 

6.15 Government Regulation.

 

(a) No proceeds of the Loans will be used, directly or indirectly, for the
purpose of purchasing or carrying any “margin stock” within the meaning of
Regulation U, or for the purpose of purchasing or carrying or trading in any
securities. If requested by any Lender or the Administrative Agent, the Borrower
will furnish to the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form U-1 referred to
in Regulation U. No indebtedness being reduced or retired out of the proceeds of
the Loans was or will be incurred for the purpose of purchasing or carrying any
margin stock within the meaning of Regulation U

 

31

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or any “margin security” within the meaning of Regulation T. “Margin stock”
within the meaning of Regulation U does not constitute more than 25% of the
value of the consolidated assets of the Borrower and its Subsidiaries. None of
the transactions contemplated by the Credit Documents (including, without
limitation, the direct or indirect use of the proceeds of the Loans) will
violate or result in a violation of the Securities Act or the Exchange Act.

 

(b) Neither the Borrower nor any of its Subsidiaries is (i) an “investment
company” registered or required to be registered under the Investment Company
Act of 1940, as amended, and is not controlled by an “investment company”, or
(ii) a “holding company”, or a “subsidiary company” of a “holding company”, or
an “affiliate” of a “holding company” or of a “subsidiary” of a “holding
company”, within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

 

(c) No director, executive officer or principal shareholder of the Borrower or
any of its Subsidiaries is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms “director”,
“executive officer” and “principal shareholder” (when used with reference to any
Lender) have the respective meanings assigned thereto in Regulation O.

 

6.16 Disclosure.

 

Neither this Credit Agreement nor any financial statements delivered to the
Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of the Borrower in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein or herein, taken as a whole, not misleading.

 

6.17 Environmental Matters.

 

Except as would not result or be reasonably expected to result in a Material
Adverse Effect: (a) each of the properties of the Borrower and its Subsidiaries
(the “Properties”) and all operations at the Properties are in compliance in all
material respects with all applicable Environmental Laws, (b) there is no
violation of any Environmental Law with respect to the Properties or the
businesses operated by the Borrower or its Subsidiaries (the “Businesses”), and
(c) there are no conditions relating to the Businesses or Properties that would
reasonably be expected to give rise to a material liability under any applicable
Environmental Laws.

 

6.18 Insurance.

 

The Borrower and its Subsidiaries maintain insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar business and owning
similar properties in the same general areas in which the Borrower and its
Subsidiaries operate.

 

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6.19 Franchises, Licenses, Etc.

 

The Borrower and its Subsidiaries possess (a) good title to, or the legal right
to use, all material properties and assets and (b) all material franchises,
certificates, licenses, permits and other authorizations, in each case as are
necessary for the operation of their respective businesses.

 

6.20 Secured Indebtedness.

 

All of the secured indebtedness of the Borrower is set forth on Schedule 6.20 or
permitted by Section 8.6.

 

6.21 Subsidiaries.

 

All Subsidiaries of the Borrower and the designation as to which such
Subsidiaries are Material Subsidiaries are set forth on Schedule 6.21. Schedule
6.21 may be updated from time to time by the Borrower.

 

SECTION 7.

 

AFFIRMATIVE COVENANTS

 

The Borrower hereby covenants and agrees that so long as this Credit Agreement
is in effect and until the Loans, together with interest, fees and other
obligations hereunder, have been paid in full and the Commitments shall have
terminated:

 

7.1 Information Covenants.

 

The Borrower will furnish, or cause to be furnished, to the Administrative Agent
(who shall forward copies thereof to each Lender):

 

(a) Annual Financial Statements. As soon as available, and in any event within
120 days after the close of each fiscal year of the Borrower, a consolidated
balance sheet and income statement of the Borrower and its Subsidiaries, as of
the end of such fiscal year, together with retained earnings and a consolidated
statement of cash flows for such fiscal year setting forth in comparative form
figures for the preceding fiscal year, all such financial information described
above to be in reasonable form and detail and audited by independent certified
public accountants of recognized national standing reasonably acceptable to the
Administrative Agent and whose opinion shall be furnished to the Administrative
Agent, shall be to the effect that such financial statements have been prepared
in accordance with GAAP (except for changes with which such accountants concur)
and shall not be limited as to the scope of the audit or qualified in any
respect.

 

(b) Quarterly Financial Statements. As soon as available, and in any event
within 65 days after the close of each fiscal quarter of the Borrower (other
than the fourth fiscal quarter, in which case 120 days after the end thereof) a
consolidated balance sheet and income statement of the Borrower and its
Subsidiaries, as of the end of such fiscal quarter, together with a related
consolidated statement of cash flows for such fiscal

 

33

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quarter in each case setting forth in comparative form figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and reasonably
acceptable to the Administrative Agent, and accompanied by a certificate of a
Financial Officer of the Borrower to the effect that such quarterly financial
statements fairly present in all material respects the financial condition of
the Borrower and have been prepared in accordance with GAAP, subject to changes
resulting from audit and normal year-end audit adjustments.

 

(c) Officer’s Certificate. At the time of delivery of the financial statements
provided for in Sections 7.1(a) and 7.1(b) above, a certificate of a Financial
Officer of the Borrower, substantially in the form of Exhibit 7.1(c), (i)
demonstrating compliance with Section 7.2 by calculation thereof as of the end
of each such fiscal period and (ii) stating that no Default or Event of Default
exists, or if any Default or Event of Default does exist, specifying the nature
and extent thereof and what action the Borrower proposes to take with respect
thereto.

 

(d) Reports. Promptly upon transmission or receipt thereof, copies of any
filings and registrations with, and reports to or from, any Governmental
Authority, including, without limitation, the Securities and Exchange Commission
or any successor agency and any utility regulatory body.

 

(e) Notices. Upon the Borrower obtaining knowledge thereof, the Borrower will
give written notice to the Administrative Agent immediately of (i) the
occurrence of a Default or Event of Default, specifying the nature and existence
thereof and what action the Borrower proposes to take with respect thereto and
(ii) the occurrence of any of the following with respect to the Borrower or any
Subsidiary: (A) the pendency or commencement of any litigation, arbitration or
governmental proceeding against the Borrower or such Subsidiary which, if
adversely determined, would have or would be reasonably expected to have a
Material Adverse Effect or (B) the institution of any proceedings against the
Borrower or such Subsidiary with respect to, or the receipt of notice by such
Person of potential liability or responsibility for violation or alleged
violation of, any federal, state or local law, rule or regulation (including,
without limitation, any Environmental Law), the violation of which would have or
would be reasonably expected to have a Material Adverse Effect.

 

(f) ERISA. Upon the Borrower or any ERISA Affiliate obtaining knowledge thereof,
the Borrower will give written notice to the Administrative Agent and each of
the Lenders promptly (and in any event within five Business Days) of: (i) any
event or condition, including, but not limited to, any Reportable Event, that
constitutes, or would be reasonably expected to lead to, a Termination Event;
(ii) any communication from the PBGC stating its intention to terminate any Plan
or to have a trustee appointed to administer any Plan together with a statement
of the amount of liability, if any, incurred or expected to be incurred by the
Borrower or any Subsidiary in connection therewith; (iii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or otherwise of
any withdrawal liability assessed against the Borrower or any ERISA Affiliate,
or of a determination that any Multiemployer Plan is in reorganization or
insolvent (both within the meaning of Title IV of ERISA); (iv) the failure to
make full

 

34

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payment on or before the due date (including extensions) thereof of all amounts
which the Borrower or any of its Subsidiaries or ERISA Affiliates is required to
contribute to each Plan pursuant to its terms and as required to meet the
minimum funding standard set forth in ERISA and the Code with respect thereto;
or (v) any change in the funding status of any Plan that would have or would be
reasonably expected to have a Material Adverse Effect; together, with a
description of any such event or condition or a copy of any such notice and a
statement by a officer of the Borrower briefly setting forth the details
regarding such event, condition, or notice, and the action, if any, which has
been or is being taken or is proposed to be taken by the Borrower with respect
thereto. Promptly upon request, the Borrower shall furnish the Administrative
Agent and each of the Lenders with such additional information concerning any
Plan as may be reasonably requested, including, but not limited to, copies of
each annual report/return (Form 5500 series), as well as all schedules and
attachments thereto required to be filed with the Department of Labor and/or the
Internal Revenue Service pursuant to ERISA and the Code, respectively, for each
“plan year” (within the meaning of Section 3(39) of ERISA).

 

(g) Other Information. With reasonable promptness upon any such request, such
other information regarding the business, properties or financial condition of
the Borrower as the Administrative Agent or the Required Lenders may reasonably
request.

 

7.2 Debt to Capitalization Ratio.

 

As of the last day of each fiscal quarter of the Borrower, the Debt to
Capitalization Ratio shall be less than or equal to 0.70 to 1.0; provided that
(if the Acquisition shall have been consummated on or before December 31, 2004),
the amount of Consolidated Funded Debt for the purpose of the determination of
such ratio (and the components thereof) as of December 31, 2004 shall exclude
(to the extent not already excluded in the definition of Consolidated Funded
Debt) then outstanding borrowings made in the fiscal quarter of the Borrower
ending on such date (“Seasonal Borrowings”) under the Existing Credit Agreement
or any refinancing thereof or through the issuance of commercial paper for
working capital purposes equal to the lesser of (i) $200,000,000 or (ii) the
aggregate amount of the Seasonal Borrowings.

 

7.3 Preservation of Existence, Franchises and Assets.

 

The Borrower will, and will cause its Subsidiaries to, do all things necessary
to preserve and keep in full force and effect its existence, rights, franchises
and authority, except where failure to do so would not or would not reasonably
be expected to have a Material Adverse Effect. The Borrower will, and will cause
its Subsidiaries to, generally maintain its properties, real and personal, in
good condition, and the Borrower and its Subsidiaries shall not waste or
otherwise permit such properties to deteriorate, reasonable wear and tear
excepted, except where failure to do so would not or would not reasonably be
expected to have a Material Adverse Effect.

 

35

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7.4 Books and Records.

 

The Borrower will, and will cause its Subsidiaries to, keep complete and
accurate books and records of its transactions in accordance with good
accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).

 

7.5 Compliance with Law.

 

The Borrower will, and will cause its Subsidiaries to, comply with, and obtain
all permits and licenses required by, all laws (including, without limitation,
all Environmental Laws and ERISA laws), rules, regulations and orders, and all
applicable restrictions imposed by all Governmental Authorities, applicable to
it and its property, if the failure to comply would have or would be reasonably
expected to have a Material Adverse Effect.

 

7.6 Payment of Taxes and Other Indebtedness.

 

The Borrower will, and will cause its Subsidiaries to, pay, settle or discharge
(a) all taxes, assessments and governmental charges or levies imposed upon it,
or upon its income or profits, or upon any of its properties, before they shall
become delinquent, (b) all lawful claims (including claims for labor, materials
and supplies) which, if unpaid, might give rise to a Lien upon any of its
properties, and (c) all of its other indebtedness as it shall become due (to the
extent such repayment is not otherwise prohibited by this Credit Agreement);
provided, however, that the Borrower shall not be required to pay any such tax,
assessment, charge, levy, claim or indebtedness which is being contested in good
faith by appropriate action and as to which adequate reserves therefor, if
required, have been established in accordance with GAAP, unless the failure to
make any such payment (i) would give rise to an immediate right to foreclose or
collect on a Lien securing such amounts or (ii) would have or would reasonably
be expected to have a Material Adverse Effect.

 

7.7 Insurance.

 

The Borrower will, and will cause its Subsidiaries to, at all times maintain in
full force and effect insurance (including worker’s compensation insurance,
liability insurance, casualty insurance and business interruption insurance)
with responsible and reputable insurance companies in such amounts, covering
such risks and liabilities and with such deductibles or self insurance
retentions as are in accordance with normal industry practice.

 

7.8 Use of Proceeds.

 

The proceeds of the Loans may be used solely (a) to finance, or backstop the
issuance of commercial paper to finance, the Acquisition and (b) to pay fees and
expenses incurred in connection with the Acquisition.

 

7.9 Audits/Inspections.

 

Upon reasonable prior notice and during normal business hours, the Borrower will
permit representatives appointed by the Administrative Agent, including, without
limitation, independent accountants, agents, attorneys, and appraisers to visit
and inspect the Borrower’s

 

36

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and its Subsidiaries’ property, including their books and records, their
accounts receivable and inventory, the Borrower’s and its Subsidiaries’
facilities and their other business assets, and to make photocopies or
photographs thereof and to write down and record any information such
representative obtains and shall permit the Administrative Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees and
representatives of the Borrower and its Subsidiaries.

 

SECTION 8.

 

NEGATIVE COVENANTS

 

The Borrower hereby covenants and agrees that so long as this Credit Agreement
is in effect and until the Loans, together with interest, fees and other
obligations hereunder, have been paid in full and the Commitments shall have
terminated:

 

8.1 Nature of Business.

 

The Borrower will not materially alter the character of its business from that
conducted as of the Closing Date, except as a result of the Acquisition.

 

8.2 Consolidation and Merger.

 

The Borrower will not (a) enter into any transaction of merger, or (b)
consolidate, liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); provided that, so long as no Default or Event of Default shall
exist or be caused thereby, a Person may be merged or consolidated with or into
the Borrower so long as the Borrower shall be the continuing or surviving
corporation.

 

8.3 Sale or Lease of Assets.

 

Within any twelve month period, the Borrower will not, nor will it permit any
Subsidiary to, convey, sell, lease, transfer or otherwise dispose of assets,
business or operations with a net book value in excess of 25% of Total Assets as
calculated as of the end of the most recent fiscal quarter.

 

8.4 Arm’s-Length Transactions.

 

The Borrower will not, nor will it permit its Subsidiaries to, enter into any
transaction or series of transactions, whether or not in the ordinary course of
business, with any officer, director or Affiliate other than on terms and
conditions substantially as favorable as would be obtainable in a comparable
arm’s-length transaction with a Person other than an officer, director or
Affiliate.

 

8.5 Fiscal Year; Organizational Documents.

 

The Borrower will not (a) change its fiscal year or (b) in any manner that would
reasonably be expected to materially adversely affect the rights of the Lenders,
change its organizational documents or its bylaws; it being understood that the
Borrower’s shareholders may approve an amendment to the Borrower’s Articles of
Incorporation to permit the issuance of Preferred Securities.

 

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8.6 Liens.

 

The Borrower will not, nor will it permit any of its Material Subsidiaries to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of its property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or after acquired, except for the following: (a)
Liens securing Borrower Obligations, (b) Liens for taxes not yet due or Liens
for taxes being contested in good faith by appropriate action and for which
adequate reserves, if required, determined in accordance with GAAP have been
established (and as to which the property subject to any such Lien is not yet
subject to foreclosure, sale or loss on account thereof), (c) Liens in respect
of property imposed by law arising in the ordinary course of business such as
materialmen’s, mechanics’, warehousemen’s, carrier’s, landlords’ and other
nonconsensual statutory Liens which are not yet due and payable, which have been
in existence less than 90 days or which are being contested in good faith by
appropriate action and for which adequate reserves, if required, determined in
accordance with GAAP have been established (and as to which the property subject
to any such Lien is not yet subject to foreclosure, sale or loss on account
thereof), (d) pledges or deposits made in the ordinary course of business to
secure payment of worker’s compensation insurance, unemployment insurance,
pensions or social security programs, (e) Liens arising from good faith deposits
in connection with or to secure performance of tenders, bids, leases, government
contracts, performance and return of money bonds and other similar obligations
incurred in the ordinary course of business (other than obligations in respect
of the payment of borrowed money), (f) Liens arising from good faith deposits in
connection with or to secure performance of statutory obligations and surety and
appeal bonds, (g) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of the
encumbered property for its intended purposes, (h) judgment Liens that would not
constitute an Event of Default, (i) Liens arising by virtue of any statutory or
common law provision relating to banker’s liens, rights of setoff or similar
rights as to deposit accounts or other funds maintained with a creditor
depository institution, (j) any Lien on any assets securing indebtedness
incurred or assumed for the purpose of financing all or any part of the cost of
acquiring such assets; provided that such Lien attaches to such asset
concurrently with or within 90 days after the acquisition thereof, (k) any Lien
on any asset of any Person existing at the time such Person is merged or
consolidated with or into the Borrower or one of its Subsidiaries and not
created in contemplation of such event, (l) any Lien existing on any asset prior
to the acquisition thereof by the Borrower or one of its Subsidiaries and not
created in contemplation of such acquisition, (m) any Lien (whether such Lien
applies to current assets or after-acquired property, or both) on any assets of
the Borrower or such Material Subsidiary created pursuant to the 1957 Indenture
or the 1959 Indenture; provided that any Lien on any assets of the Borrower or
such Material Subsidiary that are specifically excluded as collateral under such
Indentures shall not be deemed to be a Permitted Lien hereunder, (n) any Lien on
the assets of the Borrower pursuant to Section 803 of the 1998 Indenture or
Section 803 of the 2001 Indenture, if placed on the property of the Borrower on
a pro rata basis only with Liens securing Borrower Obligations and other Liens
that may be placed on the properties of the Borrower in the future, (o) Liens on
Fixed Assets not otherwise permitted by this Credit Agreement securing
indebtedness in the aggregate (at the time such Liens are created) not in excess
of five percent

 

38

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(5%) of Consolidated Net Property, and (p) any extension, renewal or replacement
(or successive extensions, renewals or replacements), as a whole or in part, of
any Liens referred to in the foregoing clauses (a) through (o) for amounts not
exceeding the principal amount of the indebtedness secured by the Lien so
extended, renewed or replaced; provided that such extension, renewal or
replacement Lien is limited to all or a part of the same property or assets that
were covered by the Lien extended, renewed or replaced (plus improvements on
such property or assets).

 

SECTION 9.

 

EVENTS OF DEFAULT

 

9.1 Events of Default.

 

An Event of Default shall exist upon the occurrence of any of the following
specified events (each an “Event of Default”):

 

(a) Payment. The Borrower shall default in the payment (i) when due of any
principal of any of the Loans or (ii) within one Business Day of when due of any
interest on the Loans or of any fees or other amounts owing hereunder, under any
of the other Credit Documents or in connection herewith.

 

(b) Representations. Any representation, warranty or statement made or deemed to
be made by the Borrower herein, in any of the other Credit Documents, or in any
statement or certificate delivered or required to be delivered pursuant hereto
or thereto shall prove untrue in any material respect on the date as of which it
was deemed to have been made.

 

(c) Covenants. The Borrower shall:

 

(i) default in the due performance or observance of any term, covenant or
agreement contained in Sections 7.2, 7.3, 7.4, 7.5, 7.9 or 8.1 through 8.6
inclusive; or

 

(ii) default in the due performance or observance by it of any term, covenant or
agreement contained in Section 7.1 and such default shall continue unremedied
for a period of five Business Days after the earlier of the Borrower becoming
aware of such default or notice thereof given by the Administrative Agent; or

 

(iii) default in the due performance or observance by it of any term, covenant
or agreement (other than those referred to in subsections (a), (b), (c)(i), or
(c)(ii) of this Section 9.1) contained in this Credit Agreement or any other
Credit Document and such default shall continue unremedied for a period of at
least 30 days after the earlier of the Borrower becoming aware of such default
or notice thereof given by the Administrative Agent.

 

39

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(d) Credit Documents. The Borrower shall default in the due performance or
observance of any term, covenant or agreement in any of the other Credit
Documents and such default shall continue unremedied for a period of at least 30
days after the earlier of the Borrower becoming aware of such default or notice
thereof given by the Administrative Agent or (ii) any Credit Document shall fail
to be in full force and effect or the Borrower shall so assert or any Credit
Document shall fail to give the Administrative Agent and/or the Lenders the
rights, powers and privileges purported to be created thereby.

 

(e) Bankruptcy, etc. The occurrence of any of the following with respect to the
Borrower or any of its Material Subsidiaries: (i) a court or governmental agency
having jurisdiction in the premises shall enter a decree or order for relief in
respect of the Borrower or any of its Material Subsidiaries in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appoint a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Borrower or any of its Material
Subsidiaries or for any substantial part of its property or order the winding up
or liquidation of its affairs; or (ii) an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect is
commenced against the Borrower or any of its Material Subsidiaries and such
petition remains unstayed and in effect for a period of 60 consecutive days; or
(iii) the Borrower or any of its Material Subsidiaries shall commence a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official of such Person or any substantial part of its property or
make any general assignment for the benefit of creditors; or (iv) the Borrower
or any of its Material Subsidiaries shall admit in writing its inability to pay
its debts generally as they become due or any action shall be taken by such
Person in furtherance of any of the aforesaid purposes.

 

(f) Defaults under Other Agreements. With respect to (x) any secured
indebtedness of the Borrower or (y) any other indebtedness in excess of
$20,000,000 (other than indebtedness outstanding under this Credit Agreement) of
the Borrower (A) the Borrower shall (1) default in any payment (beyond the
applicable grace period with respect thereto, if any) with respect to any such
indebtedness, or (2) default (after giving effect to any applicable grace
period) in the observance or performance of any covenant or agreement relating
to such indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event or condition shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or permit, the holder of the holders of such indebtedness (or trustee or
agent on behalf of such holders) to cause (determined without regard to whether
any notice or lapse of time is required) any such indebtedness to become due
prior to its stated maturity; or (B) any such indebtedness shall be declared due
and payable, or required to be prepaid other than by a regularly scheduled
required prepayment prior to the stated maturity thereof; or (C) any such
indebtedness shall mature and remain unpaid.

 

40

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(g) Judgments. One or more judgments, orders, or decrees shall be entered
against the Borrower involving a liability of $20,000,000 or more, in the
aggregate, (to the extent not paid or covered by insurance provided by a carrier
who has acknowledged coverage) and such judgments, orders or decrees shall
continue unsatisfied, undischarged and unstayed for a period ending on the first
to occur of (i) the last day on which such judgment, order or decree becomes
final and unappealable and, where applicable, with the status of a judicial lien
or (ii) 60 days; provided that if such judgment, order or decree provides for
periodic payments over time then the Borrower shall have a grace period of 30
days with respect to each such periodic payment.

 

(h) ERISA. The occurrence of any of the following events or conditions if any of
the same would be reasonably expected to result in a liability of an amount
greater than or equal to $20,000,000: (A) any “accumulated funding deficiency,”
as such term is defined in Section 302 of ERISA and Section 412 of the Code,
whether or not waived, shall exist with respect to any Plan, or any lien shall
arise on the assets of the Borrower or any ERISA Affiliate in favor of the PBGC
or a Plan; (B) a Termination Event shall occur with respect to a Single Employer
Plan, which is, in the reasonable opinion of the Administrative Agent, likely to
result in the termination of such Plan for purposes of Title IV of ERISA; (C) a
Termination Event shall occur with respect to a Multiemployer Plan or Multiple
Employer Plan, which is, in the reasonable opinion of the Administrative Agent,
likely to result in (i) the termination of such Plan for purposes of Title IV of
ERISA, or (ii) the Borrower or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the meaning of
Section 4241 of ERISA), or insolvency (within the meaning of Section 4245 of
ERISA) of such Plan; or (D) any prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which would be reasonably expected to subject the
Borrower or any ERISA Affiliate to any liability under Sections 406, 409,
502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement
or other instrument pursuant to which the Borrower or any ERISA Affiliate has
agreed or is required to indemnify any person against any such liability.

 

(i) Change of Control. The occurrence of any Change of Control.

 

9.2 Acceleration; Remedies.

 

Upon the occurrence and during the continuation of an Event of Default, the
Administrative Agent may, with the consent of the Required Lenders, and shall,
upon the request and direction of the Required Lenders, by written notice to the
Borrower take any of the following actions without prejudice to the rights of
the Administrative Agent or any Lender to enforce its claims against the
Borrower, except as otherwise specifically provided for herein:

 

(i) Termination of Commitments. Declare the Commitments terminated whereupon the
Commitments shall be immediately terminated.

 

(ii) Acceleration of Loans. Declare the unpaid amount of all Borrower
Obligations to be due whereupon the same shall be immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower.

 

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(iii) Enforcement of Rights. Enforce any and all rights and interests created
and existing under the Credit Documents, including, without limitation, all
rights of set-off.

 

Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(e) shall occur, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid fees and
other indebtedness or obligations owing to the Lenders and the Administrative
Agent hereunder shall immediately become due and payable without the giving of
any notice or other action by the Administrative Agent or the Lenders.

 

Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate “creditor” holding
a separate “claim” within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.

 

9.3 Allocation of Payments After Event of Default.

 

Notwithstanding any other provisions of this Credit Agreement, after the
occurrence of an Event of Default, all amounts collected or received by the
Administrative Agent or any Lender on account of amounts outstanding under any
of the Credit Documents shall be paid over or delivered as follows:

 

FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including without limitation reasonable attorneys’ fees) of the Administrative
Agent or any of the Lenders in connection with enforcing the rights of the
Lenders under the Credit Documents, pro rata as set forth below;

 

SECOND, to payment of any fees owed to the Administrative Agent, or any Lender,
pro rata as set forth below;

 

THIRD, to the payment of all accrued interest payable to the Lenders hereunder,
pro rata as set forth below;

 

FOURTH, to the payment of the outstanding principal amount of the Loans, pro
rata as set forth below;

 

FIFTH, to all other obligations which shall have become due and payable under
the Credit Documents and not repaid pursuant to clauses “FIRST” through “FOURTH”
above; and

 

SIXTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.

 

In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category and (b) each of the

 

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Lenders shall receive an amount equal to its pro rata share (based on the
proportion that the then outstanding Loans held by such Lender bears to the
aggregate then outstanding Loans) of amounts available to be applied.

 

SECTION 10.

 

AGENCY PROVISIONS

 

10.1 Appointment.

 

Each Lender hereby designates and appoints Bank One, NA as agent of such Lender
to act as specified herein and the other Credit Documents, and each such Lender
hereby authorizes the Administrative Agent, as the agent for such Lender, to
take such action on its behalf under the provisions of this Credit Agreement and
the other Credit Documents and to exercise such powers and perform such duties
as are expressly delegated by the terms hereof and of the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere herein and in the other
Credit Documents, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Credit Documents, or shall otherwise exist
against the Administrative Agent. The provisions of this Section 10.1 are solely
for the benefit of the Administrative Agent and the Lenders and the Borrower
shall not have any rights as a third party beneficiary of the provisions hereof.
In performing its functions and duties under this Credit Agreement and the other
Credit Documents, the Administrative Agent shall act solely as agent of the
Lenders and does not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for the Borrower. Any
agent named herein (other than the Administrative Agent) shall have no duties or
obligations whatsoever under this Credit Agreement or the other Credit
Documents.

 

10.2 Delegation of Duties.

 

The Administrative Agent may execute any of its duties hereunder or under the
other Credit Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.

 

10.3 Exculpatory Provisions.

 

Neither the Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be liable to any Lender for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit Documents
(except for its or such Person’s own gross negligence or willful misconduct), or
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower contained herein or in any of
the other Credit Documents or in any certificate, report, statement or other
document referred to or

 

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provided for in, or received by the Administrative Agent under or in connection
herewith or in connection with the other Credit Documents, or enforceability or
sufficiency therefor of any of the other Credit Documents, or for any failure of
the Borrower to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Credit Agreement, or any of the other Credit Documents or
for any representations, warranties, recitals or statements made herein or
therein or made by the Borrower in any written or oral statement or in any
financial or other statements, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished or made by the
Administrative Agent to the Lenders or by or on behalf of the Borrower to the
Administrative Agent or any Lender or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default or to inspect the properties, books or records of the
Borrower. The Administrative Agent is not a trustee for the Lenders and owes no
fiduciary duty to the Lenders.

 

10.4 Reliance on Communications.

 

The Administrative Agent shall be entitled to rely, and shall be fully protected
in relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it in good faith
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower, independent accountants and other
experts selected by the Administrative Agent with reasonable care). The
Administrative Agent may deem and treat the Lenders as the owner of its
interests hereunder for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent in accordance with Section 11.3(b). The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Credit
Agreement or under any of the other Credit Documents unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder or under any of the other Credit Documents in accordance with a
request of the Required Lenders (or to the extent specifically provided in
Section 11.6, all the Lenders) and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders (including their
successors and assigns).

 

10.5 Notice of Default.

 

The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to the Credit Document, describing such Default or Event of Default and stating
that such notice is a “notice of default.” In the event that the Administrative
Agent receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders.

 

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10.6 Non-Reliance on Administrative Agent and Other Lenders.

 

Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent or any affiliate thereof hereinafter taken, including any
review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Borrower
and made its own decision to make its Extensions of Credit hereunder and enter
into this Credit Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Credit Agreement, and to make such
investigation as it deems necessary to inform itself as to the business, assets,
operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial or other
conditions, prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.

 

10.7 Indemnification.

 

Each Lender agrees to indemnify the Administrative Agent in its capacity as such
(to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to its Commitment
Percentage at the time the indemnification request is made, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including without limitation at any time following the payment
in full of the Borrower Obligations) be imposed on, incurred by or asserted
against the Administrative Agent in its capacity as such in any way relating to
or arising out of this Credit Agreement or the other Credit Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent. If any indemnity furnished to the
Administrative Agent for any purpose shall, in the opinion of the Administrative
Agent, be insufficient or become impaired, the Administrative Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in this
Section 10.7 shall survive the payment of the Borrower Obligations and all other
amounts payable hereunder and under the other Credit Documents and the
termination of the Commitments.

 

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10.8 Administrative Agent in Its Individual Capacity.

 

The Administrative Agent and its Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Borrower as though
the Administrative Agent were not Administrative Agent hereunder. With respect
to the Loans made and all Borrower Obligations owing to it, the Administrative
Agent shall have the same rights and powers under this Credit Agreement as any
Lender and may exercise the same as though it were not the Administrative Agent,
and the terms “Lender” and “Lenders” shall include the Administrative Agent in
its individual capacity.

 

10.9 Successor Agent.

 

The Administrative Agent may, at any time, resign upon 20 days written notice to
the Lenders. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor Administrative Agent, which successor shall be
reasonably acceptable to the Borrower; provided that the Borrower shall have no
right to approve such successor during the existence and continuation of a
Default or Event of Default. If no successor Administrative Agent shall have
been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the notice of resignation, then the retiring
Administrative Agent shall select a successor Administrative Agent; provided
such successor is an Eligible Assignee (or if no Eligible Assignee shall have
been so appointed by the retiring Administrative Agent and shall have accepted
such appointment, then the Lenders shall perform all obligations of the retiring
Administrative Agent hereunder until such time, if any, as a successor
Administrative Agent shall have been appointed and shall have accepted such
appointment as provided for above). Upon the acceptance of any appointment as an
Administrative Agent hereunder by a successor, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations as an
Administrative Agent, as appropriate, under this Credit Agreement and the other
Credit Documents and the provisions of this Section 10 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Administrative Agent under this Credit Agreement.

 

SECTION 11.

 

MISCELLANEOUS

 

11.1 Notices.

 

Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device), (c)
the Business Day following the day on which the same has been delivered to a
reputable national overnight air courier service, or (d) the third Business Day
following the day on which the same is sent by certified or registered mail,
postage prepaid, in each case to the respective parties at the address or
telecopy numbers set forth on Schedule 11.1, or at such other address as such
party may specify by written notice to the other parties hereto.

 

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11.2 Right of Set-Off.

 

In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
and during the continuation of an Event of Default and the commencement of
remedies described in Section 9.2, each Lender is authorized at any time and
from time to time, without presentment, demand, protest or other notice of any
kind (all of which rights being hereby expressly waived), to set-off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Lender (including, without
limitation branches, agencies or Affiliates of such Lender wherever located) to
or for the credit or the account of the Borrower against obligations and
liabilities of the Borrower to the Lenders hereunder, under the Notes or the
other Credit Documents, irrespective of whether the Administrative Agent or the
Lenders shall have made any demand hereunder and although such obligations,
liabilities or claims, or any of them, may be contingent or unmatured, and any
such set-off shall be deemed to have been made immediately upon the occurrence
of an Event of Default even though such charge is made or entered on the books
of such Lender subsequent thereto. The Borrower hereby agrees that any Person
purchasing a participation in the Loans and Commitments hereunder pursuant to
Section 11.3(c) may exercise all rights of set-off with respect to its
participation interest as fully as if such Person were a Lender hereunder.

 

11.3 Benefit of Agreement.

 

(a) Generally. This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto; provided that the Borrower may not assign and transfer any of
its interests without the prior written consent of the Lenders; and provided
further that the rights of each Lender to transfer, assign or grant
participations in its rights and/or obligations hereunder shall be limited as
set forth below in this Section 11.3.

 

(b) Assignments. Each Lender may assign to one or more Eligible Assignees all or
a portion of its rights and obligations under this Credit Agreement (including,
without limitation, all or a portion of its Loans, its Notes, and its
Commitment); provided, however, that:

 

(i) each such assignment shall be to an Eligible Assignee;

 

(ii) except in the case of an assignment to another Lender or an Affiliate of a
Lender or an assignment of all of a Lender’s rights and obligations under this
Credit Agreement, any such partial assignment shall (unless each of the Borrower
and the Administrative Agent otherwise consents) be in an amount at least equal
to $3,000,000 (or, if less, the remaining amount of the Commitment being
assigned by such Lender) and an integral multiple of $1,000,000 in excess
thereof;

 

(iii) each such assignment by a Lender shall be of a constant, and not varying,
percentage of all of its rights and obligations under this Credit Agreement and
the Notes; and

 

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(iv) the parties to such assignment shall execute and deliver to the
Administrative Agent for its acceptance an Assignment Agreement in substantially
the form of Exhibit 11.3(b), together with a processing fee from the assignor of
$5,000.

 

Upon execution, delivery, and acceptance of such Assignment Agreement, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Credit Agreement. Upon
the consummation of any assignment pursuant to this Section 11.3(b), the
assignor, the Administrative Agent and the Borrower shall make appropriate
arrangements so that, if required, new Notes are issued to the assignor and the
assignee. If the assignee is not incorporated under the laws of the United
States of America or a state thereof; it shall deliver to the Borrower and the
Administrative Agent certification as to exemption from deduction or withholding
of taxes in accordance with Section 4.4.

 

By executing and delivering an assignment agreement in accordance with this
Section 11.3(b), the assigning Lender thereunder and the assignee thereunder
shall be deemed to confirm to and agree with each other and the other parties
hereto as follows: (A) such assigning Lender warrants that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim created by such assigning Lender and the assignee warrants that it
is an Eligible Assignee; (B) except as set forth in clause (A) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant hereto or
thereto, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, any of the other Credit Documents
or any other instrument or document furnished pursuant hereto or thereto or the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under this Credit Agreement, any of the other
Credit Documents or any other instrument or document furnished pursuant hereto
or thereto; (C) such assignee represents and warrants that it is legally
authorized to enter into such assignment agreement; (D) such assignee confirms
that it has received a copy of this Credit Agreement, the other Credit Documents
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such assignment agreement;
(E) such assignee will independently and without reliance upon the
Administrative Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Credit Agreement and the other Credit Documents; (F) such assignee appoints
and authorizes the Administrative Agent to take such action on its behalf and to
exercise such powers under this Credit Agreement or any other Credit Document as
are delegated to the Administrative Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto; and (G) such
assignee agrees that it will perform in accordance with their terms all the
obligations which by the terms of this Credit Agreement and the other Credit
Documents are required to be performed by it as a Lender.

 

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(c) Register. The Administrative Agent shall maintain a copy of each Assignment
Agreement delivered to and accepted by it and a register for the recordation of
the names and addresses of the Lenders and the Commitment of, and principal
amount of the Loans owing to, each Lender from time to time (the “Register”).
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Administrative Agent and the
Lenders may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Credit Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.

 

(d) Acceptance. Upon its receipt of an Assignment Agreement executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, the Administrative Agent shall, if such Assignment
Agreement has been completed and is in substantially the form of Exhibit
11.3(b), (i) accept such Assignment Agreement, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
parties thereto.

 

(e) Participations. Each Lender may sell participations to one or more Persons
in all or a portion of its rights, obligations or rights and obligations under
this Credit Agreement (including all or a portion of its Commitment, its Notes
and its Loans); provided, however, that (i) such Lender’s obligations under this
Credit Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participant shall be entitled to the benefit of the yield protection
provisions contained in Sections 4.1 through 4.4, inclusive, and the right of
set-off contained in Section 11.2, and (iv) the Borrower shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Credit Agreement, and such Lender shall retain the sole
right to enforce the obligations of the Borrower relating to its Loans and its
Notes and to approve any amendment, modification, or waiver of any provision of
this Credit Agreement (other than amendments, modifications, or waivers
decreasing the amount of principal of or the rate at which interest is payable
on such Loans or Notes, extending any scheduled principal payment date or date
fixed for the payment of interest on such Loans or Notes, or extending its
Commitment).

 

(f) Nonrestricted Assignments. Notwithstanding any other provision set forth in
this Credit Agreement, any Lender may at any time assign and pledge all or any
portion of its Loans and its Notes to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the assigning Lender from
its obligations hereunder.

 

(g) Information. Neither any Lender nor the Borrower shall disclose any
confidential information to any other person without the consent of the other,
except (a) to such Lender’s Affiliates and their officers, directors, employees,
agents and advisors, (b) to assignees and participants (including prospective
assignees and participants) who

 

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are notified of the confidential nature of the information and agree to use
their reasonable best efforts to keep confidential all non-public information
from time to time supplied to them, (c) as required by any law, rule or
regulation or judicial process and (d) as requested or required by any state,
federal or foreign authority or examiner regulating banks or banking.

 

11.4 No Waiver; Remedies Cumulative.

 

No failure or delay on the part of the Administrative Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower and the Administrative
Agent or any Lender shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies provided herein are cumulative and not exclusive of any rights or
remedies which the Administrative Agent or any Lender would otherwise have. No
notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Administrative Agent or the Lenders to
any other or further action in any circumstances without notice or demand.

 

11.5 Payment of Expenses, etc.

 

The Borrower agrees to: (i) pay all reasonable out-of-pocket costs and expenses
of the Administrative Agent and the Arranger in connection with (A) the
negotiation, preparation, execution and delivery and administration of this
Credit Agreement and the other Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and expenses of Simpson Thacher & Bartlett LLP, special counsel to the
Arranger) and (B) any amendment, waiver or consent relating hereto and thereto
including, but not limited to, any such amendments, waivers or consents
resulting from or related to any work-out, renegotiation or restructure relating
to the performance by the Borrower under this Credit Agreement, (ii) pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent, the
Arranger and the Lenders in connection with (A) enforcement of the Credit
Documents and the documents and instruments referred to therein (including,
without limitation, in connection with any such enforcement, the reasonable fees
and disbursements of counsel for the Administrative Agent and each of the
Lenders (including the allocated cost of internal counsel)) and (B) any
bankruptcy or insolvency proceeding of the Borrower and (iii) indemnify the
Administrative Agent, each Arranger and each Lender, its officers, directors,
employees, representatives and agents from and hold each of them harmless
against any and all losses, liabilities, claims, damages or expenses incurred by
any of them as a result of, or arising out of, or in any way related to, or by
reason of, any investigation, litigation or other proceeding (whether or not the
Administrative Agent, any Arranger or any Lender is a party thereto) related to
the entering into and/or performance of any Credit Document or the use of
proceeds of any Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of counsel
(including the allocated cost of internal counsel) incurred in connection with
any such investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of gross negligence or willful misconduct on the part of the Person to be
indemnified).

 

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11.6 Amendments, Waivers and Consents.

 

Neither this Credit Agreement, nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing and signed by the Required Lenders and the Borrower; provided that no
such amendment, change, waiver, discharge or termination shall without the
consent of each Lender affected thereby:

 

(a) extend the Maturity Date, or postpone or extend the time for any payment or
prepayment of principal;

 

(b) reduce the rate or amount or extend the time of payment of interest (other
than as a result of waiving the applicability of any post-default increase in
interest rates) thereon or fees or other amounts payable hereunder;

 

(c) reduce or waive the principal amount of any Loan;

 

(d) increase or extend the Commitment of a Lender (it being understood and
agreed that a waiver of any Default or Event of Default or a waiver of any
mandatory reduction in the Commitments shall not constitute a change in the
terms of any Commitment of any Lender);

 

(e) release the Borrower from its obligations under the Credit Documents;

 

(f) amend, modify or waive any provision of this Section 11.6 or Section 2.6(b),
3.6, 3.8, 9.1(a), 11.2, 11.3 or 11.5;

 

(g) reduce any percentage specified in, or otherwise modify, the definition of
Required Lenders; or

 

(h) consent to the assignment or transfer by the Borrower of any of its rights
and obligations under (or in respect of) the Credit Documents.

 

No provision of Section 10 may be amended or modified without the consent of the
Administrative Agent.

 

Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, each Lender is entitled to vote as
such Lender sees fit on any reorganization plan that affects the Loans, and each
Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein.

 

11.7 Counterparts/Telecopy.

 

This Credit Agreement may be executed in any number of counterparts, each of
which where so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. Delivery of executed counterparts
by telecopy shall be as effective as an original and shall constitute a
representation that an original will be delivered.

 

51

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

11.8 Headings.

 

The headings of the sections and subsections hereof are provided for convenience
only and shall not in any way affect the meaning or construction of any
provision of this Credit Agreement.

 

11.9 Defaulting Lender.

 

Each Lender understands and agrees that if such Lender is a Defaulting Lender
then it shall not be entitled to vote on any matter requiring the consent of the
Required Lenders or to object to any matter requiring the consent of all the
Lenders; provided, however, that all other benefits and obligations under the
Loan Documents shall apply to such Defaulting Lender.

 

11.10 Survival of Indemnification and Representations and Warranties.

 

All indemnities set forth herein and all representations and warranties made
herein shall survive the execution and delivery of this Credit Agreement, the
making of the Loans, and the repayment of the Loans and other obligations and
the termination of the Commitments hereunder.

 

11.11 Governing Law; Venue.

 

(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

(b) Any legal action or proceeding with respect to this Credit Agreement or any
other Credit Document 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 Credit Agreement, the Borrower hereby irrevocably accepts
for itself and in respect of its property, generally and unconditionally, the
jurisdiction of such courts. The Borrower further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at the address for notices pursuant to Section 11.1, such
service to become effective 10 days after such mailing. Nothing herein shall
affect the right of a Lender to serve process in any other manner permitted by
law or to commence legal proceedings or to otherwise proceed against the
Borrower in any other jurisdiction. The Borrower agrees that a final judgment in
any action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law;
provided that nothing in this Section 11.11(b) is intended to impair the
Borrower’s right under applicable law to appeal or seek a stay of any judgment.

 

52

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

(c) The Borrower hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Credit Agreement or any
other Credit Document in the courts referred to in subsection (a) hereof and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.

 

11.12 Waiver of Jury Trial.

 

EACH OF THE PARTIES TO THIS CREDIT AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

11.13 Severability.

 

If any provision of any of the Credit Documents is determined to be illegal,
invalid or unenforceable, such provision shall be fully severable, and the
remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

 

11.14 Further Assurances.

 

The Borrower agrees, upon the request of the Administrative Agent, to promptly
take such actions, as reasonably requested, as are necessary to carry out the
intent of this Credit Agreement and the other Credit Documents.

 

11.15 Entirety.

 

This Credit Agreement together with the other Credit Documents represent the
entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.

 

11.16 Binding Effect; Continuing Agreement.

 

(a) This Credit Agreement shall become effective at such time when all of the
conditions set forth in Section 5.1 have been satisfied or waived by the Lenders
and it shall have been executed by the Borrower, the Administrative Agent and
the Lenders, and thereafter this Credit Agreement shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and each Lender
and their respective successors and assigns.

 

(b) This Credit Agreement shall be a continuing agreement and shall remain in
full force and effect until all Loans, interest, fees and other Borrower
Obligations have been paid in full and all Commitments have been terminated.
Upon termination, the Borrower shall have no further obligations (other than the
indemnification and other

 

53

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

provisions that survive) under the Credit Documents; provided that should any
payment, in whole or in part, of the Borrower Obligations be rescinded or
otherwise required to be restored or returned by the Administrative Agent or any
Lender, whether as a result of any proceedings in bankruptcy or reorganization
or otherwise, then the Credit Documents shall automatically be reinstated and
all amounts required to be restored or returned and all costs and expenses
incurred by the Administrative Agent or any Lender in connection therewith shall
be deemed included as part of the Borrower Obligations.

 

[Remainder of Page Intentionally Left Blank]

 

54

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

Signature Page to Atmos Energy Corporation

Revolving Credit Agreement

 

Each of the parties hereto has caused a counterpart of this Credit Agreement to
be duly executed and delivered as of the date first above written.

 

BORROWER:   ATMOS ENERGY CORPORATION, a Texas and
Virginia corporation     By:  

/s/ LAURIE M. SHERWOOD

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

    Name:   Laurie M. Sherwood     Title:   Vice President, Corporate
Development
and Treasurer

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

Signature Page to Atmos Energy Corporation

Revolving Credit Agreement

 

LENDERS:   BANK ONE, NA, individually in its capacity as a
Lender and in its capacity as Administrative Agent     By:  

/s/ SHARON K. WEBB

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

    Name:   Sharon K. Webb     Title:   Director

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

Signature Page to Atmos Energy Corporation

Revolving Credit Agreement

 

BANK OF AMERICA, N.A., individually in its
capacity as a Lender and in its capacity as
Co-Documentation Agent By:  

/s/ STEVEN A. MACKENZIE

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

Name:   Steven A. Mackenzie Title:   Senior Vice President

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

Signature Page to Atmos Energy Corporation

Revolving Credit Agreement

 

SUNTRUST BANK, individually in its capacity as a
Lender and in its capacity as Co-Documentation Agent By:  

/s/ JOHN A. FIELDS, JR.

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

Name:   John A. Fields, Jr. Title:   Managing Director

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

Signature Page to Atmos Energy Corporation

Revolving Credit Agreement

 

MERRILL LYNCH CAPITAL CORPORATION By:  

/s/ SHEILA MCGILLICUDDY

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

Name:   Sheila McGillicuddy Title:   Vice President

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

Signature Page to Atmos Energy Corporation

Revolving Credit Agreement

 

MERRILL LYNCH BANK USA By:  

/s/ PRESTON L. JACKSON

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

Name:   Preston L. Jackson Title:   President and CEO

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

Signature Page to Atmos Energy Corporation

Revolving Credit Agreement

 

SOCIÉTÉ GÉNÉRALE By:  

/s/ CHIN-EAV EAP

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

Name:   Chin-Eav Eap Title:   Director

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

Signature Page to Atmos Energy Corporation

Revolving Credit Agreement

 

KBC BANK N.V. By:  

/s/ ROBERT SHAUFFER

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

Name:   Robert Shauffer Title:   First Vice President By:  

/s/ ERIC RASKIN

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

Name:   Eric Raskin Title:   Vice President

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

Signature Page to Atmos Energy Corporation

Revolving Credit Agreement

 

UBS LOAN FINANCE LLC By:  

/s/ WILFRED SAINT

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

Name:   Wilfred Saint Title:   Director, Banking Products Services, US By:  

/s/ JOSELIN FERNANDE

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

Name:   Joselin Fernande Title:  

Associate Director, Banking Products

Services, US

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

Signature Page to Atmos Energy Corporation

Revolving Credit Agreement

 

U.S. BANK N.A. By:  

/s/ BRIAN H. GALLAGHER

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

Name:   Brian H. Gallagher Title:   Vice President

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

Signature Page to Atmos Energy Corporation

Revolving Credit Agreement

 

WACHOVIA BANK, N.A. By:  

/s/ YANN PIRIO

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

Name:   Yann Pirio Title:   Vice President

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

Schedule 1.1(a)

 

COMMITMENT PERCENTAGES

 

Lenders

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

   Commitment

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

   Commitment
Percentage

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

 

MERRILL LYNCH BANK USA

   $ 600,000,000    35.3 %

BANK ONE, NA

   $ 175,000,000    10.3 %

BANK OF AMERICA, N.A.

   $ 175,000,000    10.3 %

SUNTRUST BANK

   $ 175,000,000    10.3 %

MERRILL LYNCH CAPITAL CORPORATION

   $ 150,000,000    8.8 %

SOCIÉTÉ GÉNÉRALE

   $ 125,000,000    7.4 %

KBC BANK N.V.

   $ 75,000,000    4.4 %

UBS LOAN FINANCE LLC

   $ 75,000,000    4.4 %

U.S. BANK N.A.

   $ 75,000,000    4.4 %

WACHOVIA BANK, N.A.

   $ 75,000,000    4.4 %

Total

   $ 1,700,000,000    100 %

 

Schedule 1.1(a)

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

Schedule 1.1(b)

 

PRICING SCHEDULE

 

Applicable Percentage

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

   Level I Status

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

    Level II Status

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

    Level III Status

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

    Level IV Status

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

    Level V Status

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

    Level VI Status

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

 

Eurodollar Rate

   0.50 %   0.625 %   0.75 %   1.0 %   1.25 %   1.75 %

Base Rate

   0.0 %   0.0 %   0.0 %   0.0 %   0.0 %   0.25 %

Commitment Fee

   0.085 %   0.10 %   0.125 %   0.15 %   0.20 %   0.30 %

Utilization Fee (when usage exceeds 33 1/3%)

   0.125 %   0.125 %   0.125 %   0.125 %   0.125 %   0.25 %

 

“Level I Status” exists at any date if, on such date, the Borrower’s Moody’s
Rating is A2 or better or the Borrower’s S&P Rating is A or better.

 

“Level II Status” exists at any date if, on such date, (i) the Borrower has not
qualified for Level I Status and (ii) the Borrower’s Moody’s Rating is A3 or
better or the Borrower’s S&P Rating is A- or better.

 

“Level III Status” exists at any date if, on such date, (i) the Borrower has not
qualified for Level I Status or Level II Status and (ii) the Borrower’s Moody’s
Rating is Baa1 or better or the Borrower’s S&P Rating is BBB+ or better.

 

“Level IV Status” exists at any date if, on such date, (i) the Borrower has not
qualified for Level I Status, Level II Status or Level III Status and (ii) the
Borrower’s Moody’s Rating is Baa2 or better or the Borrower’s S&P Rating is BBB
or better.

 

“Level V Status” exists at any date if, on such date, (i) the Borrower has not
qualified for Level I Status, Level II Status, Level III Status or Level IV
Status and (ii) the Borrower’s Moody’s Rating is Baa3 or better or the
Borrower’s S&P Rating is BBB- or better.

 

“Level VI Status” exists at any date if, on such date, the Borrower has not
qualified for Level I Status, Level II Status, Level III Status, Level IV Status
or Level V Status.

 

“Moody’s Rating” means, at any time, the rating issued by Moody’s Investors
Service, Inc. and then in effect with respect to the Borrower’s senior unsecured
long-term non-credit enhanced debt securities.

 

“S&P Rating” means, at any time, the rating issued by Standard and Poor’s Rating
Services, a division of The McGraw Hill Companies, Inc., and then in effect with
respect to the Borrower’s senior unsecured long-term non-credit enhanced debt
securities.

 

“Status” means Level I Status, Level II Status, Level III Status, Level IV
Status, Level V Status or Level VI Status.

 

The Applicable Percentage shall be determined in accordance with the foregoing
table based on the Borrower’s Status as determined from its then-current Moody’s
and S&P Ratings. The credit rating in effect on any date for the purposes of
this Schedule is that in effect at the close of business on such date. If at any
time the Borrower has no Moody’s Rating or no S&P Rating, Level VI Status shall
exist.

 

Schedule 1.1(b)

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

If the Borrower is split-rated and the ratings differential is one level, the
better rating will apply. If the Borrower is split-rated and the ratings
differential is two levels or more, the applicable rating shall be one level
below the higher of the Moody’s or S&P Rating.

 

Schedule 1.1(c)

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

Schedule 6.20

 

SECURED INDEBTEDNESS

 

Secured Indebtedness as of 6/30/2004

 

First Mortgage Bonds

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

  

Interest

Rate

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

   

Maturity

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

   Balance at
6/30/04

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

FMB Series P

   10.43 %   due 2012 issued under 1959 Indenture    11,250,000.00

FMB Series Q

   9.75 %   due 2020 issued under 1959 Indenture    16,000,000.00

FMB Series R

   11.32 %   due 2004 issued under 1959 Indenture    0.00

FMB Series T

   9.32 %   due 2021 issued under 1959 Indenture    18,000,000.00

FMB Series U

   8.77 %   due 2022 issued under 1959 Indenture    20,000,000.00

FMB Series J

   9.40 %   due 2021 issued under 1957 Indenture    17,000,000.00

FMB Series V

   7.50 %   due 2007 issued under 1959 Indenture    4,166,666.00                

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

                86,416,666.00                

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

Rental Property fixed rate term notes

   various     due 2013        due in installments    9,466,167.47             
  

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

Total Secured Indebtedness

              95,882,833.47                

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

 

Schedule 6.20

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

Schedule 6.21

 

SUBSIDIARIES

 

Mississippi Energies, Inc.

 

Legendary Lighting, LLC (50% ownership interest)

Unitary GH&C Products, LLC (28% ownership interest)

 

Blue Flame Insurance Services, LTD

 

Atmos Energy Holdings, Inc.

 

Atmos Energy Marketing, LLC

 

Atmos Energy Services, LLC

Energas Energy Services Trust

 

Enermart Energy Services Trust

 

Egasco, LLC

 

Atmos Power Systems, Inc.

 

United Cities Propane Gas, Inc.

 

Atmos Pipeline and Storage, LLC

 

UCG Storage, Inc.

WKG Storage, Inc.

Trans Louisiana Gas Storage, Inc.

Trans Louisiana Gas Pipeline, Inc.

Atmos Exploration & Production, Inc.

 

(1) Each of these subsidiaries is 100% owned by its parent.

 

(2) No Subsidiary of the Borrower currently qualifies as a Material Subsidiary
as that term is defined in the Credit Agreement.

 

Schedule 6.21

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

Schedule 11.1

 

NOTICES

 

Atmos Energy Corporation

 

Laurie Sherwood

5430 LBJ Freeway

Dallas, TX 75240

Tel: 972-855-9718

Fax: 972-855-3085

E-Mail: laurie.sherwood@atmosenergy.com

 

Bank of America, N.A.

 

Steven A. Mackenzie

901 Main Street, 67th Floor

Dallas, TX 75202

Tel: 214-209-3680

Fax: 214-209-3140

E-Mail: steven.mackenzie@bankofamerica.com

Bank One, NA

 

Sharon Webb

1 Bank One Plaza

Suite IL1-0363, 10th Floor

Chicago, IL 60670

Tel: 312-732-7437

Fax: 312-732-3055

E-mail: sharon_k_webb@bankone.com

 

KBC Bank N.V.

 

Robert Pacifici / Loan Administration

125 West 55th Street

New York, NY 10019

Tel: 212-541-0671

Fax: 212-956-5581

Merrill Lynch Bank USA

 

Derek Befus

15 W. South Temple, Suite 300

Salt Lake City, UT 84101

Tel: 801-526-6814

Fax: 801-531-7470

E-Mail: derek_befus@ml.com

 

Merrill Lynch Capital Corporation

 

Carol Feeley

Merrill Lynch & Co.

4 World Financial Center

16th Floor

New York, NY 10080

Phone: 212-449-8414

Fax: 212-738-1186

Email: cfeeley@exchange.ml.com

Societe Generale, New York Branch

 

David Bird

1221 Avenue of the Americas, 11th Floor

New York, NY 10020

Tel: 212-278-7429

E-mail: david.bird@us.socgen.com

 

SunTrust Bank

 

Linda Stanley

303 Peachtree Street, 10th Floor

Atlanta, GA 30308

Tel: 404-532-0989

Fax: 404-827-6270

E-mail: linda.stanley@suntrust.com

 

Schedule 11.1

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

UBS AG, Cayman Islands Branch

 

Marie Haddad

677 Washington Blvd.

Stamford, CT 06901

Tel: 203-719-5609

Fax: 203-719-3888

E-Mail: marie.haddad@ubs.com

 

U.S. Bank National Association

 

Ward Wilson

150 Fourth Avenue N, Third Floor

Nashville, TN 37219

Tel: 615-251-9253

Fax: 615-251-9245

E-Mail: ward.wilson@usbank.com

Wachovia Bank, National Association

 

Reid Harden

999 Peachtree Street

Atlanta, GA 30309

Tel: 404-332-1420

E-mail: reid.harden@wachovia.com

 

Mitch Wilson

Tel: 704-383-5642

Email: mitch.wilson@wachoiva.com

   

 

Schedule 11.1

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

Exhibit 2.2

 

FORM OF NOTICE OF BORROWING

 

TO: BANK ONE, NA, as Administrative Agent

1 Bank One Plaza, 10th Floor

Chicago, Illinois 60670

 

RE: Revolving Credit Agreement dated as of September 24, 2004, among Atmos
Energy Corporation (the “Borrower”), the Lenders named therein and Bank One, NA,
as Administrative Agent for the Lenders (as the same may be amended, modified,
extended or restated from time to time, the “Credit Agreement”)

 

DATE:            , 200    

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

 

1. This Notice of Borrowing is made pursuant to the terms of the Credit
Agreement. All capitalized terms used herein unless otherwise defined shall have
the meanings set forth in the Credit Agreement.

 

2. Please be advised that the Borrower is requesting Loans in the amount of
$             to be funded on             , 200     at the interest rate option
set forth in paragraph 3 below.

 

Subsequent to the funding of the requested Loans, the sum of the amount of Loans
outstanding will be $             , which is less than or equal to the Aggregate
Commitment.

 

3. The interest rate option applicable to the requested Loans shall be:

 

  a.             the Base Rate

 

  b.             the Adjusted Eurodollar Rate for an Interest Period of:

 

            one month

            two months

            three months

            six months

 

4. As of the date on which funds are to be advanced, all representations and
warranties contained in the Credit Agreement and in the other Credit Documents
will be true and correct in all material respects.

 

Exhibit 2.2

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

5. As of the date on which funds are to be advanced, no Default or Event of
Default will exist or be continuing or will be caused by the making of Loans
pursuant to this Notice of Borrowing.

 

ATMOS ENERGY CORPORATION, a Texas and Virginia corporation By:  

 

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

Name:  

 

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

Title:  

 

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

 

Exhibit 2.2

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

Exhibit 2.4

 

FORM OF NOTICE OF CONTINUATION/CONVERSION

 

TO: BANK ONE, NA, as Administrative Agent

1 Bank One Plaza, 10th Floor

Chicago, Illinois 60670

 

RE: Revolving Credit Agreement dated as of September 24, 2004, among Atmos
Energy Corporation (the “Borrower”), the Lenders named therein and Bank One, NA,
as Administrative Agent for the Lenders (as the same may be amended, modified,
extended or restated from time to time, the “Credit Agreement”)

 

DATE:            , 200    

 

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

 

1. This Notice of Continuation/Conversion is made pursuant to the terms of the
Credit Agreement. All capitalized terms used herein unless otherwise defined
shall have the meanings set forth in the Credit Agreement.

 

2. Please be advised that the Borrower is requesting that a portion of the
current outstanding Loans in the amount of $             currently accruing
interest at              be continued or converted as of             , 200    
at the interest rate option set forth in paragraph 3 below.

 

3. The interest rate option applicable to the continuation or conversion of all
or part of the existing Loans (as set forth above) shall be:

 

a.              the Base Rate

 

b.              the adjusted Eurodollar Rate for an Interest Period of:

 

             one month

             two months

             three months

             six months

 

ATMOS ENERGY CORPORATION, a Texas and Virginia corporation By:  

 

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

Name:  

 

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

Title:  

 

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

 

Exhibit 2.4

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

Exhibit 2.7

 

FORM OF NOTE

 

            , 200    

 

FOR VALUE RECEIVED, ATMOS ENERGY CORPORATION, a Texas and Virginia corporation
(the “Borrower”), hereby promises to pay to the order of              (the
“Lender”), at the office of BANK ONE, NA (the “Administrative Agent”) as set
forth in that certain Revolving Credit Agreement dated as of September 24, 2004
among the Borrower, the Lenders named therein (including the Lender) and the
Administrative Agent (as the same may be amended, modified, extended or restated
from time to time, the “Credit Agreement”) (or at such other place or places as
the holder of this Note may designate), the aggregate amount of all Loans made
by the Lender under the Credit Agreement (and not otherwise repaid), in lawful
money and in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount of each Loan made by the Lender, at such office, in like money
and funds, for the period commencing on the date of each Loan until each Loan
shall be paid in full, at the rates per annum and on the dates provided in the
Credit Agreement.

 

This Note is one of the Notes referred to in the Credit Agreement and evidences
Loans made by the Lender thereunder. The Lender shall be entitled to the
benefits of the Credit Agreement. Capitalized terms used in this Note have the
respective meanings assigned to them in the Credit Agreement and the terms and
conditions of the Credit Agreement are expressly incorporated herein and made a
part hereof.

 

The Credit Agreement provides for the acceleration of the maturity of the Loans
evidenced by this Note upon the occurrence of certain events (and for payment of
collection costs in connection therewith) and for prepayments of Loans upon the
terms and conditions specified therein. In the event this Note is not paid when
due at any stated or accelerated maturity, the Borrower agrees to pay, in
addition to the principal and interest, all costs of collection, including
reasonable attorney fees.

 

Except as permitted by Section 11.3(b) of the Credit Agreement, this Note may
not be assigned by the Lender to any other Person.

 

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

 

Exhibit 2.7(b)

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

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed as of the
date first above written.

 

ATMOS ENERGY CORPORATION, a Texas and Virginia corporation By:  

 

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

Name:  

 

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

Title:  

 

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

 

Exhibit 2.7(b)

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

Exhibit 4.4

 

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

 

Reference is made to the Credit Agreement, dated as of September 24, 2004 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Atmos Energy Corporation (the “Borrower”), the Lenders party
thereto, the Documentation Agent and Syndication Agent named therein and Bank
One, NA, as administrative agent (in such capacity, the “Administrative Agent”).
Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.
                     (the “Non-U.S. Lender”) is providing this certificate
pursuant to Section 4.4(b)(ii) of the Credit Agreement. The Non-U.S. Lender
hereby represents and warrants that:

 

1. The Non-U.S. Lender is the sole record and beneficial owner of the Loans in
respect of which it is providing this certificate.

 

2. The Non-U.S. Lender is not a “bank” for purposes of Section 881(c)(3)(A) of
the Internal Revenue Code of 1986, as amended (the “Code”). In this regard, the
Non-U.S. Lender further represents and warrants that:

 

(a) the Non-U.S. Lender is not subject to regulatory or other legal requirements
as a bank in any jurisdiction; and

 

(b) the Non-U.S. Lender has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any Governmental Authority,
any application made to a rating agency or qualification for any exemption from
tax, securities law or other legal requirements.

 

3. The Non-U.S. Lender is not a 10-percent shareholder of the Borrower within
the meaning of Section 881(c)(3)(B) of the Code.

 

4. The Non-U.S. Lender is not a controlled foreign corporation receiving
interest from a related person within the meaning of Section 881(c)(3)(C) of the
Code.

 

IN WITNESS WHEREOF, the undersigned has duly executed this certificate.

 

[NAME OF NON-U.S. LENDER] By:  

 

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

Name:     Title:     Date:  

 

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

 

Exhibit 4.4-1

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

Exhibit 7.1(c)

 

FORM OF OFFICER’S CERTIFICATE

TO: BANK ONE, NA, as Administrative Agent

1 Bank One Plaza, 10th Floor

Chicago, Illinois 60670

 

RE: Revolving Credit Agreement dated as of September 24, 2004, among Atmos
Energy Corporation (the “Borrower”), the Lenders named therein and BANK ONE, NA,
as Administrative Agent for the Lenders (as the same may be amended, modified,
extended or restated from time to time, the “Credit Agreement”)

 

DATE:            , 200    

 

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Pursuant to the terms of the Credit Agreement, I,                     ,
             of the Borrower, hereby certify on behalf of the Borrower that, as
of the quarter/year ending             , 200    , the statements below are
accurate and complete in all material respects (all capitalized terms used
herein unless defined shall have the meanings set forth in the Credit
Agreement):

 

a. Attached hereto as Schedule I are calculations demonstrating compliance by
the Borrower with the financial covenant set forth in Section 7.2 of the Credit
Agreement, as of the end of the fiscal period cited above.

 

b. No Default or Event of Default exists under the Credit Agreement, except as
indicated on a separate page attached hereto, together with an explanation of
the action taken or proposed to be taken by the Borrower with respect thereto.

 

c. The quarterly/annual financial statements for the fiscal period cited above
which accompany this certificate are true and correct and have been prepared in
accordance with GAAP (in the case of any quarterly financial statements, subject
to changes resulting from audit and normal year-end audit adjustments).

 

ATMOS ENERGY CORPORATION

By:

 

 

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Name:

 

 

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Title:

 

 

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Exhibit 7.1(c)-1

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Schedule I to Officer’s Certificate

 

Compliance with Section 7.2: Debt to Capitalization Ratio

 

1.      Consolidated Funded Debt

   $ _____________

2.      Consolidated Capitalization

   $ _____________

3.      Debt to Capitalization Ratio: (Line 1 ÷ Line 2)

     _____________

 

Maximum Allowed: Line 3 shall be less than or equal to 0.70 to 1.0

 

Exhibit 7.1(c)-2

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Exhibit 11.3(b)

 

FORM OF ASSIGNMENT AGREEMENT

 

Reference is made to that certain Revolving Credit Agreement, dated as of
September 24, 2004, among Atmos Energy Corporation (the “Borrower”), the Lenders
party thereto and Bank One, NA, as Administrative Agent for the Lenders (as the
same may be amended, modified, extended or restated from time to time, the
“Credit Agreement”). Capitalized terms used herein shall have the meanings
ascribed thereto in the Credit Agreement.

 

1. The Assignor hereby sells and assigns to the Assignee, without recourse and
without representation and warranty except as expressly set forth herein, and
the Assignee hereby purchases and assumes from the Assignor, without recourse
and without representation and warranty except as expressly set forth herein,
the interests set forth below (the “Assigned Interest”) in the Assignor’s rights
and obligations under the Credit Agreement, including, without limitation, the
interest set forth below in the Commitment Percentage of the Assignor on the
Effective Date (as defined below) and the Loans owing to the Assignor in
connection with the Assigned Interest which are outstanding on the Effective
Date. The purchase of the Assigned Interest shall be at par (unless otherwise
agreed to by the Assignor and the Assignee) and periodic payments made with
respect to the Assigned Interest which (a) accrued prior to the Effective Date
shall be remitted to the Assignor and (b) accrue from and after the Effective
Date shall be remitted to the Assignee.

 

2. The Assignor (a) warrants to the Assignee that it is the legal and beneficial
owner of the Assigned Interest and that the Assigned Interest is free and clear
of any adverse claim created by the Assignor; (b) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Documents
or any other document or instrument furnished pursuant thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of Credit
Documents or any document or instrument furnished pursuant thereto; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under the Credit Documents or any document or
instrument furnished pursuant thereto and (d) if the Assignor is hereby
assigning all of its Commitment, the Assignor attaches the Notes held by the
Assignor and requests that the Administrative Agent exchange such Notes for new
Notes in favor of the Assignee.

 

3. The Assignee (a) confirms that it is legally authorized to enter into this
Assignment Agreement; (b) confirms that it has received a copy of the Credit
Agreement, the other Credit Documents and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter to this Assignment Agreement; (c) agrees that it will, independently and
without reliance upon the Administrative Agent, the Assignor or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement and the other Credit Documents; (d) confirms
that it is an Eligible Assignee; (e) appoints and authorizes the Administrative
Agent to take such action on its behalf and to exercise such powers under the
Credit Documents as are delegated to the Administrative Agent

 

Exhibit 11.3(b)-1

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by the terms thereof, together with such powers as are reasonably incidental
thereto; (f) agrees that it will perform in accordance with their terms all of
the obligations which by the terms of the Credit Agreement and the other Credit
Documents are required to be performed by it as a Lender; and (g) attaches any
U.S. Internal Revenue Service or other forms required under Section 4.4.

 

4. Following the execution of this Assignment Agreement, it will be delivered to
the Administrative Agent, together with the transfer fee required pursuant to
Section 11.3(b) of the Credit Agreement, if any, for acceptance and recording by
the Administrative Agent. The effective date for this Assignment Agreement (the
“Effective Date”) shall be the date of acceptance hereof by the Administrative
Agent and the Borrower, as applicable, unless otherwise specified herein.

 

5. Upon the consent of the Borrower and the Administrative Agent, as applicable,
as of the Effective Date, (a) the Assignment shall be a party to the Credit
Agreement and the other Credit Documents and, to the extent provided in this
Assignment Agreement, have the rights and obligations of a Lender thereunder and
(b) the Assignor shall, to the extent provided in this Assignment Agreement,
relinquish its rights and be released from its obligations under the Credit
Agreement and the other Credit Documents.

 

6. This Assignment Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.

 

7. This Assignment Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

 

8. Terms of Assignment

 

(a)

 

Date of Assignment:

     __________________  

(b)

 

Legal Name of Assignor:

     __________________  

(c)

 

Legal Name of Assignee:

     __________________  

(d)

 

Effective Date of Assignment:

     __________________  

(e)

 

Commitment Percentage Assigned:

     __________________ %

(f)

 

Commitment Percentage of Assignor after Assignment

     __________________ %

(g)

 

Total Loans outstanding as of Effective Date

   $ __________________  

 

Exhibit 11.3(b)-2

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(h)

 

Principal Amount of Loans assigned on Effective Date (the amount set forth in
(g) multiplied by the percentage set forth in (e))

   $ __________________

(i)

 

Aggregate Commitment

   $ __________________

(j)

 

Principal Amount of Aggregate Commitment Assigned on the Effective Date (the
amount set forth in (i) multiplied by the percentage set forth in (e))

   $ __________________

 

Exhibit 11.3(b)-3

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The terms set forth above are hereby agreed

to as of the date first above written:

                                                 , as Assignor

By:

 

 

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Name:

 

 

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Title:

 

 

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                                                 , as Assignee

By:

 

 

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Name:

 

 

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Title:

 

 

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CONSENTED TO (if applicable):

ATMOS ENERGY CORPORATION

By:

 

 

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Name:

 

 

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Title:

 

 

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BANK ONE, NA,

as Administrative Agent

By:

 

 

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Name:

 

 

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Title:

 

 

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Exhibit 11.3(b)-4