Exhibit 10.1

 

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

 

$850,000,000

 

364-DAY CREDIT AGREEMENT

 

Dated as of September 22, 2003

 

among

 

ONEOK, INC.,

 

as the Borrower,

 

BANK OF AMERICA, N.A.,

as Administrative Agent and

L/C Issuer,

 

BANK ONE, NA,

and

WACHOVIA BANK, N.A.,

as Co-Syndication Agents

 

ABN AMRO BANK N.V.,

and

CITIBANK, N.A.

as Co-Documentation Agents

 

and

 

The Lenders Party Hereto

 

BANC OF AMERICA SECURITIES LLC,

 

Sole Lead Arranger and Sole Book Manager

 

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

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

TABLE OF CONTENTS

 

ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

   1

        1.01

  

Defined Terms

   1

        1.02

  

Other Interpretive Provisions

   16

        1.03

  

Accounting Terms

   17

        1.04

  

Rounding

   17

        1.05

  

References to Agreements and Laws

   17

        1.06

  

Times of Day

   17

        1.07

  

Letter of Credit Amounts

   17

ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS

   18

        2.01

  

Loans

   18

        2.02

  

Borrowings, Conversions and Continuations of Loans

   18

        2.03

  

Letters of Credit

   19

        2.04

  

Prepayments

   25

        2.05

  

Termination or Reduction of Commitments

   26

        2.06

  

Repayment of Loans

   26

        2.07

  

Interest

   26

        2.08

  

Fees

   26

        2.09

  

Computation of Interest and Fees

   27

        2.10

  

Evidence of Debt

   27

        2.11

  

Payments Generally

   28

        2.12

  

Sharing of Payments

   29

        2.13

  

Extension of Stated Maturity Date

   30

        2.14

  

Term-Out Option

   30

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

   31

        3.01

  

Taxes

   31

        3.02

  

Illegality

   32

        3.03

  

Inability to Determine Rates

   32

        3.04

  

Increased Cost and Reduced Return; Capital Adequacy

   32

        3.05

  

Funding Losses

   33

        3.06

  

Matters Applicable to all Requests for Compensation

   33

        3.07

  

Survival

   33

ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

   34

        4.01

  

Conditions of Initial Credit Extension

   34

        4.02

  

Conditions to all Credit Extensions

   35

ARTICLE V. REPRESENTATIONS AND WARRANTIES

   35

        5.01

  

Existence, Qualification and Power; Compliance with Laws

   35

        5.02

  

Authorization; No Contravention

   36

        5.03

  

Governmental Authorization; Other Consents

   36

        5.04

  

Binding Effect

   36

        5.05

  

Financial Statements; No Material Adverse Effect

   36

        5.06

  

Litigation

   36

        5.07

  

No Default

   36

        5.08

  

Ownership of Property; Liens

   37

        5.09

  

Environmental Compliance

   37

        5.10

  

Insurance

   37

        5.11

  

Taxes

   37

 

i

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

        5.12

  

ERISA Compliance

   37

        5.13

  

Subsidiaries

   38

        5.14

  

Margin Regulations; Investment Company Act; Public Utility Holding Company Act

   38

        5.15

  

Disclosure

   38

        5.16

  

Compliance with Laws

   38

        5.17

  

No Burdensome Agreements.

   39

        5.18

  

Intellectual Property; Licenses, Etc.

   39

        5.19

  

Tax Shelter Regulations

   39

ARTICLE VI. AFFIRMATIVE COVENANTS

   39

        6.01

  

Financial Statements

   39

        6.02

  

Certificates; Other Information

   40

        6.03

  

Notices

   41

        6.04

  

Payment of Obligations

   42

        6.05

  

Preservation of Existence, Etc.

   42

        6.06

  

Maintenance of Properties

   42

        6.07

  

Maintenance of Insurance

   42

        6.08

  

Compliance with Laws

   42

        6.09

  

Books and Records

   42

        6.10

  

Inspection Rights

   43

        6.11

  

Use of Proceeds

   43

        6.12

  

Further Assurances

   43

ARTICLE VII. NEGATIVE COVENANTS

   43

        7.01

  

Liens

   43

        7.02

  

Investments

   44

        7.03

  

Fundamental Changes

   45

        7.04

  

Restricted Payments

   46

        7.05

  

Change in Nature of Business

   46

        7.06

  

Transactions with Affiliates

   46

        7.07

  

Burdensome Agreements

   46

        7.08

  

Use of Proceeds

   46

        7.09

  

Debt to Capital

   47

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

   47

        8.01

  

Events of Default

   47

        8.02

  

Remedies Upon Event of Default

   49

        8.03

  

Application of Funds

   49

ARTICLE IX. ADMINISTRATIVE AGENT

   50

        9.01

  

Appointment and Authorization of Administrative Agent

   50

        9.02

  

Delegation of Duties

   51

        9.03

  

Liability of Administrative Agent

   51

        9.04

  

Reliance by Administrative Agent

   51

        9.05

  

Notice of Default

   52

        9.06

  

Credit Decision; Disclosure of Information by Administrative Agent

   52

        9.07

  

Indemnification of Administrative Agent

   52

        9.08

  

Administrative Agent in its Individual Capacity

   53

        9.09

  

Successor Administrative Agent

   53

        9.10

  

Administrative Agent May File Proofs of Claim

   53

        9.11

  

Release of Lien on Cash Collateral Upon Expiration of Letters of Credit

   54

 

ii

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

        9.12

  

Other Agents; Arrangers and Managers

   54

ARTICLE X. MISCELLANEOUS

   54

        10.01

  

Amendments, Etc.

   54

        10.02

  

Notices and Other Communications; Facsimile Copies

   55

        10.03

  

No Waiver; Cumulative Remedies

   56

        10.04

  

Attorney Costs, Expenses and Taxes

   57

        10.05

  

Indemnification by the Borrower

   57

        10.06

  

Payments Set Aside

   58

        10.07

  

Successors and Assigns

   58

        10.08

  

Confidentiality

   61

        10.09

  

Set-off

   62

        10.10

  

Interest Rate Limitation

   62

        10.11

  

Counterparts

   62

        10.12

  

Integration

   62

        10.13

  

Survival of Representations and Warranties

   63

        10.14

  

Severability

   63

        10.15

  

Tax Forms

   63

        10.16

  

Governing Law

   64

        10.17

  

Waiver of Right to Trial by Jury

   65

        10.18

  

ENTIRE AGREEMENT

   65

        10.19

  

Termination of Existing Credit Agreement

   65

        SIGNATURES

   S-1

 

iii

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

SCHEDULES

    

        1.01

  

Existing Sale and Leaseback Transactions

        2.01

  

Commitments and Pro Rata Shares

        5.13

  

Subsidiaries and Other Equity Investments

        10.02

  

Administrative Agent’s Office, Certain Addresses for Notices

EXHIBITS

    

Form of

        A

  

Loan Notice

        B

  

Note

        C

  

Compliance Certificate

        D

  

Assignment and Assumption

        E

  

Opinion of Gable & Gotwals

        F

  

Opinion of Locke Liddell & Sapp LLP

 

iv

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

CREDIT AGREEMENT

 

This CREDIT AGREEMENT (“Agreement”) is entered into as of September 22, 2003
among ONEOK, INC., an Oklahoma corporation (the “Borrower”), each lender from
time to time party hereto (collectively, the “Lenders” and individually, a
“Lender”), and BANK OF AMERICA, N.A., as Administrative Agent and L/C Issuer.

 

The Borrower has requested that the Lenders provide a revolving credit facility,
and the Lenders are willing to do so on the terms and conditions set forth
herein.

 

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

 

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

 

1.01 Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

 

“Administrative Agent” means Bank of America in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify the Borrower
and the Lenders.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified. “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 10% or more
of the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.

 

“Agent-Related Persons” means the Administrative Agent, together with its
Affiliates (including, in the case of Bank of America in its capacity as the
Administrative Agent, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.

 

“Aggregate Commitments” means the Commitments of all the Lenders.

 

“Agreement” means this Credit Agreement.

 

“Applicable Rate” means, from time to time, the following percentages, set forth
in basis points per annum, based upon the Debt Rating as set forth below:

 

1

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

Pricing Level

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

 

Debt Ratings

S&P/Moody’s

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

 

Facility Fee

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

 

Eurodollar
Rate *

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

Letters of
Credit

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

 

Utilization
Fee

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

1

  A+/A1 or better   7.5   22.5   10.0

2

  A/A2   8.0   27.0   10.0

3

  A-/A3   9.5   40.5   10.0

4

  BBB+/Baa1   11.0   64.0   12.5

5

  BBB/Baa2   13.5   74.0   12.5

6

  BBB-/Baa3   17.5   82.5   25.0

7

  Lower than BBB-/Baa3 or unrated   25.0   125.0   25.0

* Term-Out: In the event the Borrower elects its Term-Out option pursuant to
Section 2.14, the Applicable Rate for Eurodollar Rate Loans shall be increased
by 25 basis points.

 

“Debt Rating” means, as of any date of determination, the rating as determined
by either S&P or Moody’s (collectively, the “Debt Ratings”) of the Borrower’s
non-credit-enhanced, senior unsecured long-term debt; provided that if a Debt
Rating is issued by each of the foregoing rating agencies, then the higher of
such Debt Ratings shall apply (with the Debt Rating for Pricing Level 1 being
the highest and the Debt Rating for Pricing Level 7 being the lowest), unless
there is a split in Debt Ratings of more than one level, in which case the
Pricing Level that is one level lower than the Pricing Level of the higher Debt
Rating shall apply; provided, however, in the case of any split in Debt Ratings,
if one of the Debt Ratings is at Pricing Level 7, then Pricing Level 7 shall
apply.

 

Initially, the Applicable Rate shall be determined based upon the Debt Rating
specified in the certificate delivered pursuant to Section 4.01(a)(viii).
Thereafter, each change in the Applicable Rate resulting from a publicly
announced change in the Debt Rating shall be effective, in the case of an
upgrade, during the period commencing on the date of delivery by the Borrower to
the Administrative Agent of notice thereof pursuant to Section 6.03(g) and
ending on the date immediately preceding the effective date of the next such
change and, in the case of a downgrade, during the period commencing on the date
of the public announcement thereof and ending on the date immediately preceding
the effective date of the next such change.

 

“Arranger” means Banc of America Securities LLC, in its capacity as sole lead
arranger and sole book manager.

 

“Assignment and Assumption” means an Assignment and Assumption substantially in
the form of Exhibit D.

 

“Attorney Costs” means and includes all fees, expenses and disbursements of any
law firm or other external counsel and, without duplication, the allocated cost
of internal legal services and all expenses and disbursements of internal
counsel.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of

 

2

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

such Person prepared as of such date in accordance with GAAP if such lease were
accounted for as a capital lease.

 

“Audited Financial Statements” means the audited consolidated balance sheet of
the Borrower and its Subsidiaries for the fiscal year ended December 31, 2002
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Borrower and its Subsidiaries,
including the notes thereto.

 

“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Stated Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.05, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the of
the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.

 

“Bank of America” means Bank of America, N.A. and its successors.

 

“Base Rate” means for any day a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its “prime rate.” The “prime rate” is a rate set by Bank of America based
upon various factors including Bank of America’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

“Borrower” has the meaning specified in the introductory paragraph hereto.

 

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type
and, in the case of Eurodollar Rate Loans, having the same Interest Period made
by each of the Lenders pursuant to Section 2.01.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.

 

“Cash Collateralize” has the meaning specified in Section 2.03(g).

 

“Change of Control” means, with respect to any Person, an event or series of
events by which:

 

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
after the Closing Date becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Securities Exchange Act of 1934, except that a person or
group shall be deemed to have “beneficial ownership” of all securities that such
person or group has the right to acquire (such right, an “option right”),
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of 25% or more of the equity securities of such
Person entitled to vote for members of the board of directors or

 

3

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

equivalent governing body of such Person on a fully-diluted basis (and taking
into account all such securities that such person or group has the right to
acquire pursuant to any option right); or

 

(b) during any period of 12 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of such Person cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors).

 

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 4.01 (or, in the case of
Section 4.01(b), waived by the Person entitled to receive the applicable
payment).

 

“Code” means the Internal Revenue Code of 1986.

 

“Commitment” means, as to each Lender, its obligation to (a) make Revolving
Loans to the Borrower pursuant to Section 2.01 or (b) purchase participations in
L/C Obligations, in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01
or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C.

 

“Consolidated Total Indebtedness” means, as of any date of determination,
Indebtedness of the Borrower and its Subsidiaries on a consolidated basis. For
purposes of (i) calculating compliance with Section 7.09, (ii) calculating the
ratio of Consolidated Total Indebtedness to Total Capital for the certificate of
a Responsible Officer to be delivered on the Closing Date pursuant to Section
4.01(a)(viii)(E), and (iii) calculating Consolidated Total Indebtedness in
Schedule 2 to the Compliance Certificate delivered pursuant to Section 6.02(a),
the following shall apply: (A) the definition of “Swap Contract” shall not
include any type of commodity swap transaction, commodity options or forward
commodity contracts and (B) the definition of “Swap Termination Value” shall
exclude such commodity contracts and transactions.

 

“Consolidated Net Worth” means, as of any date of determination, consolidated
shareholders’ equity of the Borrower and its Subsidiaries as of that date
determined in accordance with GAAP.

 

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

 

“Control” has the meaning specified in the definition of “Affiliate.”

 

4

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

“Convertibles” means any unsecured notes, bonds, debentures, or similar
instruments issued by the Borrower after March 14, 2003 the terms of which are
substantially similar in all material respects to the terms of the Pledged Notes
and each of which is issued as part of a unit the terms of which are
substantially similar in all material respects to the terms of the Corporate
Units; provided, however that such notes, bonds, debentures, or similar
instruments shall be “Convertibles” hereunder only for so long as such notes,
bonds, debentures, or similar instruments, or Substitute Treasury Securities,
remain pledged for the benefit of the Borrower to secure obligations of the
obligor under the associated equity purchase contract pursuant to terms similar
to those governing the Pledged Notes and Corporate Units.

 

“Corporate Unit” and “Corporate Units” means those certain “Corporate Units,” as
described in Borrower’s prospectus supplement dated January 23, 2003 in an
aggregate face amount of $402,500,000, which includes the full exercise by the
underwriters of their over-allotment options.

 

“Credit Extension” means each of the following: (a) a Borrowing, (b) an L/C
Credit Extension or (c) a conversion of Revolving Loans to Term Loans pursuant
to Section 2.14.

 

“Debt Rating” has the meaning set forth in the definition of “Applicable Rate.”

 

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

 

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

 

“Default Rate” means an interest rate equal to (a) the Base Rate plus (b) the
Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable
Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the
fullest extent permitted by applicable Laws.

 

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Loans or participations in L/C Obligations required to be funded by it
hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due, unless the subject of a good faith dispute,
or (c) during the Availability Period, has been deemed insolvent or become the
subject of a bankruptcy or insolvency proceeding.

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

 

“Dollar” and “$” mean lawful money of the United States.

 

“Eligible Assignee” has the meaning specified in Section 10.07(g).

 

5

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

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

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, or its Subsidiaries directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

 

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

 

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

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which constitutes grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan or Multiemployer Plan; or (f) the imposition of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, upon the Borrower or any ERISA Affiliate.

 

“Eurodollar Rate” means for any Interest Period with respect to any Eurodollar
Rate Loan:

 

(a) the rate per annum equal to the rate determined by the Administrative Agent
to be the offered rate that appears on the page of the Telerate screen (or any
successor thereto) that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, or

 

(b) if the rate referenced in the preceding clause (a) does not appear on such
page or service or such page or service shall not be available, the rate per
annum equal to the rate determined by the Administrative Agent to be the offered
rate on such other page or other service that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or

 

6

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

(c) if the rates referenced in the preceding clauses (a) and (b) are not
available, the rate per annum determined by the Administrative Agent as the rate
of interest at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar
Rate Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America’s London
Branch to major banks in the London interbank eurodollar market at their request
at approximately 4:00 p.m. (London time) two Business Days prior to the first
day of such Interest Period.

 

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.

 

“Event of Default” has the meaning specified in Section 8.01.

 

“Existing Credit Agreement” means that certain Credit Agreement dated as of
September 23, 2002 among the Borrower, Bank of America, N.A. as administrative
agent, and a syndicate of lenders, as amended.

 

“Existing Lenders” shall mean the lenders under the Existing Credit Agreement.

 

“Existing Plans” means the (a) Thrift Plan for Employees of ONEOK, Inc. and
Subsidiaries, (b) Employee Stock Purchase Plan for Employees of ONEOK, Inc. and
Subsidiaries, (c) ONEOK, Inc. Long-Term Incentive Plan, (d) ONEOK, Inc. Stock
Compensation Plan for Non-Employee Directors, (e) ONEOK, Inc. Deferred
Compensation Plan for Non-Employee Directors; (f) ONEOK, Inc. Stock Purchase and
Dividend Reinvestment Plan, (g) ONEOK, Inc. Stock Bonus Award, and (h) ONEOK
Stock Buyback Program, and any renewals and amendments of these plans.

 

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

 

“Fee Letter” means the letter agreement, dated August 26, 2002, among the
Borrower, the Administrative Agent and the Arranger.

 

“Foreign Lender” has the meaning specified in Section 10.15(a)(i).

 

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

 

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

 

7

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

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Granting Lender” has the meaning specified in Section 10.07(h).

 

“Guarantee” means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term “Guarantee” as a verb has a corresponding meaning.

 

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

 

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

 

(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

 

(b) all direct or contingent obligations of such Person arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

 

(c) net obligations of such Person under any Swap Contract;

 

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business);

 

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

 

8

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

(f) capital leases and Synthetic Lease Obligations;

 

(g) Off-Balance Sheet Liabilities; and

 

(h) all Guarantees of such Person in respect of any of the foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.

 

“Indemnified Liabilities” has the meaning set forth in Section 10.05.

 

“Indemnitees” has the meaning set forth in Section 10.05.

 

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan, the last Business Day of each March, June,
September and December and the Maturity Date.

 

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and ending on the date one, two, three or six months
thereafter, as selected by the Borrower in its Loan Notice; provided that:

 

(i) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

 

(ii) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and

 

(iii) no Interest Period shall extend beyond the Maturity Date.

 

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.

 

9

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

“IP Rights” has the meaning set forth in Section 5.18.

 

“IRS” means the United States Internal Revenue Service.

 

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

 

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Pro Rata Share.

 

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Borrowing.

 

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of
the amount thereof.

 

“L/C Issuer” means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.

 

“L/C Obligations” means, as at any date of determination, the aggregate undrawn
amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.

 

“Lender” has the meaning specified in the introductory paragraph hereto and, as
the context requires, includes the L/C Issuer.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

 

“Letter of Credit” means any standby letter of credit issued hereunder.

 

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.

 

“Letter of Credit Expiration Date” means the day that is seven days prior to the
Stated Maturity Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).

 

“Letter of Credit Sublimit” means an amount equal to $100,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing).

 

10

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

“Loans” means the Revolving Loans. In the event that the Borrower elects its
Term-Out option pursuant to Section 2.14, “Loans” shall mean the Term Loans
thereafter.

 

“Loan Documents” means this Agreement, each Note, and the Fee Letter.

 

“Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of Loans from
one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant
to Section 2.02(a), which, if in writing, shall be substantially in the form of
Exhibit A.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, assets, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Borrower or the Borrower and its Subsidiaries taken as a whole; provided
however, a downgrade by S&P and/or Moody’s of their respective Debt Rating shall
not, in and of itself, be deemed to be a Material Adverse Effect, but for
purposes of clarity in interpreting the foregoing, it is agreed that the event,
change, circumstance or condition that causes such downgrade (or an announcement
of a potential downgrade or a review for possible ratings change) of the Debt
Rating, and the effect or change caused by such downgrade (or an announcement of
a potential downgrade or a review for possible ratings change) of the Debt
Rating, will be considered in whether there has been a Material Adverse Effect;
provided further the fact that the Borrower is unable to issue Indebtedness in
the commercial paper market due to market conditions generally affecting the
commercial paper market shall not, in and of itself, be deemed to be a Material
Adverse Effect; (b) a material impairment of the ability of the Borrower to
perform its obligations under any Loan Document to which it is a party; or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against the Borrower of any Loan Document to which it is a party.

 

“Material Portion” of a Person’s assets means that the book value of such
assets, when aggregated with the book value of all other assets Disposed of by
such Person and its consolidated Subsidiaries since the Closing Date, equals 25%
or more of the total book value of the assets of such Person and its
consolidated Subsidiaries.

 

“Maturity Date” means the Stated Maturity Date; provided, however, that if the
Borrower exercises the Term-Out option pursuant to Section 2.14, the “Maturity
Date” shall mean the Term Loan Maturity Date.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

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

 

“Note” means a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit B.

 

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, the Borrower arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against the Borrower or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding.

 

11

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

“Off-Balance Sheet Liabilities” means, with respect to any Person as of any date
of determination thereof, without duplication and to the extent not included as
a liability on the consolidated balance sheet of such Person and its
Subsidiaries in accordance with GAAP: (a) with respect to any asset
securitization transaction (including any accounts receivable purchase facility)
(i) the unrecovered investment of purchasers or transferees of assets so
transferred and (ii) any other payment, recourse, repurchase, hold harmless,
indemnity or similar obligation of such Person or any of its Subsidiaries in
respect of assets transferred or payments made in respect thereof, other than
limited recourse provisions that are customary for transactions of such type and
that neither (x) have the effect of limiting the loss or credit risk of such
purchasers or transferees with respect to payment or performance by the obligors
of the assets so transferred nor (y) impair the characterization of the
transaction as a true sale under applicable Laws (including Debtor Relief Laws);
(b) any Synthetic Lease Obligation; (c) the monetary obligations under any sale
and leaseback transaction which does not create a liability on the consolidated
balance sheet of such Person and its Subsidiaries, provided that Off-Balance
Sheet Liabilities of the Borrower and its Subsidiaries shall not include the
existing sale and leaseback transactions described on Schedule 1.01, provided
that the documents governing such transactions are not amended after the Closing
Date so as to increase the amount of the Borrower’s or its Subsidiaries’ total
payment obligations thereunder; or (d) any other monetary obligation arising
with respect to any other transaction which (i) upon the application of any
Debtor Relief Law to such Person or any of its Subsidiaries, would be
characterized as indebtedness or (ii) is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the
consolidated balance sheet of such Person and its Subsidiaries (for purposes of
this clause (d), any transaction structured to provide tax deductibility as
interest expense of any dividend, coupon or other periodic payment will be
deemed to be the functional equivalent of a borrowing).

 

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

“Outstanding Amount” means (i) with respect to Loans, on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Loans, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the amount of such L/C Obligations
on such date after giving effect to any L/C Credit Extension occurring on such
date and any other changes in the aggregate amount of the L/C Obligations as of
such date, including as a result of any reimbursements of outstanding unpaid
drawings under any Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on such date.

 

“Participant” has the meaning specified in Section 10.07(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan

 

12

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

described in Section 4064(a) of ERISA, has made contributions at any time during
the immediately preceding five plan years.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Plan” means any “employee benefit plan” (as such term is defined in Section
3(3) of ERISA) established by the Borrower or, with respect to any such plan
that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

 

“Pledged Note” means each promissory note that constitutes part of a Corporate
Unit, provided that such note shall be a “Pledged Note” hereunder only for so
long as such Pledged Note, or Substitute Treasury Securities, remain(s) pledged
for the benefit of the Borrower to secure obligations of the obligor under the
associated equity purchase contract.

 

“Pro Rata Share” means, with respect to each Lender at any time, a fraction
(expressed as a percentage, carried out to the ninth decimal place), the
numerator of which is the amount of the Commitment of such Lender at such time
and the denominator of which is the amount of the Aggregate Commitments at such
time; provided that if the commitment of each Lender to make Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 8.02, then the Pro Rata Share of each Lender shall be
determined based on the Pro Rata Share of such Lender immediately prior to such
termination and after giving effect to any subsequent assignments made pursuant
to the terms hereof; and provided further that if the Borrower has exercised its
option to Term-Out pursuant to Section 2.14, from and after the effective date
of such Term-Out, “Pro Rata Share” shall mean with respect to each Lender at any
time, a fraction (expressed as a percentage, carried out to the ninth decimal
place), the numerator of which is the Outstanding Amount held by such Lender at
such time and the denominator of which is the Total Outstandings at such time.
The initial Pro Rata Share of each Lender is set forth opposite the name of such
Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which
such Lender becomes a party hereto, as applicable.

 

“Qualifying Obligations” means the Pledged Notes, Convertibles and Subordinated
Securities.

 

“Register” has the meaning set forth in Section 10.07(c).

 

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

 

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Loans, a Loan Notice and (b) with respect to an L/C Credit
Extension, a Letter of Credit Application.

 

“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the Aggregate Commitments or, if the commitment of each Lender to
make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 8.02, Lenders holding in the aggregate
more than 50% of the Total Outstandings (with the aggregate amount of each
Lender’s risk participation and funded participation in L/C Obligations being
deemed “held” by such Lender for purposes of this definition); provided that if
the Borrower has exercised its option to Term-Out pursuant to Section 2.14, from
and after the effective date of such Term-Out, “Required Lenders” shall mean
Lenders holding in the aggregate more than 50% of the Total Outstandings; and
provided further

 

13

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

that the Commitment of, and the portion of the Total Outstandings held or deemed
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.

 

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

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other equity
interest of the Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such capital stock or other equity interest or of any option,
warrant or other right to acquire any such capital stock or other equity
interest.

 

“Revolving Loans” has the meaning specified in Section 2.01.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.

 

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

 

“SPC” has the meaning specified in Section 10.07(h).

 

“Stated Maturity Date” means the later of (a) September 20, 2004 or (b) if the
Maturity Date is extended pursuant to Section 2.13, such extended maturity date
as determined pursuant to such Section.

 

“Subordinated Securities” means unsecured bonds, debentures, notes or similar
instruments issued by the Borrower in connection with the issuance, by a
Subsidiary of the Borrower or by the Borrower, of equity securities that
represent direct or indirect interests in such bonds, debentures, notes or
similar instruments, provided that

 

(a) (i) such bonds, debentures, notes or similar instruments and such securities
are not subject to mandatory redemption at any time that is earlier than the
date that is three (3) months after the Maturity Date (the “Earliest Permitted
Payment Date”), are not subject to redemption at the option of the holder
thereof at any time that is earlier than the Earliest Permitted Payment Date, do
not mature on a date that is earlier than the Earliest Permitted Payment Date,
and do not require any principal payment on any date that is earlier than the
Earliest Permitted Payment Date, (ii) such bonds, debentures, notes or similar
instruments, and any guaranty associated therewith or associated with such
securities, is subordinate in right of payment to the unsecured and
unsubordinated indebtedness of the Borrower upon terms satisfactory to the
Administrative Agent, and (iii) the terms of such instruments and of such
securities permit the Borrower to elect to defer payment of interest and
distributions thereon to a date occurring not earlier than the Earliest
Permitted Payment Date; or

 

(b) (i) the terms of such bonds, debentures, notes or similar instruments are
similar to the terms of the Pledged Notes, (ii) such bonds, debentures, notes or
similar instruments are issued as part of a unit the terms of which are similar
to the Corporate Units, and (iii) such bonds, debentures, notes or similar
instruments, and any guaranty associated therewith, are subordinate

 

14

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

in right of payment to the unsecured and unsubordinated indebtedness of the
Borrower upon terms satisfactory to the Administrative Agent; provided, however
that such Subordinated Securities that satisfy the qualifications set forth in
the foregoing clauses (i), (ii) and (iii) of this clause (b) shall be
“Subordinated Securities” hereunder only for so long as such Subordinated
Security, or Substitute Treasury Securities, remain(s) pledged for the benefit
of the Borrower to secure obligations of the holder thereof under the associated
equity purchase contract pursuant to terms similar to those governing the
Pledged Notes and Corporate Units.

 

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

 

“Substitute Treasury Securities” means U.S. Treasury securities that have been
substituted for Qualifying Obligations, in a total principal amount at maturity
equal to the aggregate principal amount of the Qualifying Obligations for which
substitution is being made, that are pledged for the benefit of the Borrower to
secure obligations of the obligor under the associated equity purchase contract,
provided that in the case of Convertibles and Subordinated Securities, the terms
of such substitution and pledge shall be similar to the terms governing the
substitution of U.S. Treasury securities for Pledged Notes and the pledge of
such U.S. Treasury securities to secure holders of associated purchase
contracts.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a)
a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the

 

15

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

insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).

 

“Term Loans” shall mean the term loans made by the Lenders pursuant to Section
2.14.

 

“Term Loan Maturity Date” shall mean the date that is one year after the Stated
Maturity Date.

 

“Term-Out” has the meaning specified in Section 2.14(a).

 

“Total Capital” means, at any time, the sum of (a) Consolidated Total
Indebtedness and (b) Consolidated Net Worth.

 

“Threshold Amount” means $50,000,000.

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.

 

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

 

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

 

“Uninsured Liabilities” shall mean any losses, damages, costs, expenses and/or,
liabilities (including any losses, damages, costs, expenses or liabilities
resulting from property damage or casualty, general liability, workers’
compensation claims and business interruption) incurred by the Borrower or any
Subsidiary which are not covered by insurance, but with respect to which
insurance coverage is available to Persons engaged in the same or similar
business as the Borrower and its Subsidiaries.

 

“United States” and “U.S.” mean the United States of America.

 

“Unreimbursed Amount” has the meaning set forth in Section 2.03(c)(i).

 

“Westar” means Westar Energy, Inc. or its Subsidiaries.

 

1.02 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

 

(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.

 

(b) (i) The words “herein,” “hereto,” “hereof” and “hereunder” and words of
similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.

 

(ii) Article, Section, Exhibit and Schedule references are to the Loan Document
in which such reference appears.

 

(iii) The term “including” is by way of example and not limitation.

 

16

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

(iv) The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

 

(c) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

 

(d) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

 

1.03 Accounting Terms. (a) All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP
applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.

 

(b) If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
Borrower or the Required Lenders shall so request, the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

 

1.04 Rounding. Any financial ratios required to be maintained by the Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

 

1.05 References to Agreements and Laws. Unless otherwise expressly provided
herein, (a) references to Organization Documents, agreements (including the Loan
Documents) and other contractual instruments shall be deemed to include all
subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.

 

1.06 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Central time (daylight or standard, as applicable).

 

1.07 Letter of Credit Amounts. Unless otherwise specified, all references herein
to the amount of a Letter of Credit at any time shall be deemed to mean the
maximum face amount of such Letter of Credit after giving effect to all
increases thereof contemplated by such Letter of Credit or the Letter of Credit
Application therefor, whether or not such maximum face amount is in effect at
such time.

 

17

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

ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01 Loans. Subject to the terms and conditions set forth herein, each Lender
severally agrees to make loans (each such loan, a “Revolving Loan”) to the
Borrower from time to time, on any Business Day during the Availability Period,
in an aggregate amount not to exceed at any time outstanding the amount of such
Lender’s Commitment; provided, however, that after giving effect to any
Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Loans of any
Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all L/C
Obligations shall not exceed such Lender’s Commitment. Within the limits of each
Lender’s Commitment, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.01, prepay under Section 2.04, and
reborrow under this Section 2.01. Loans may be Base Rate Loans or Eurodollar
Rate Loans, as further provided herein.

 

2.02 Borrowings, Conversions and Continuations of Loans.

 

(a) Each Borrowing, each conversion of Loans from one Type to the other, and
each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s
irrevocable notice to the Administrative Agent, which may be given by telephone.
Each such notice must be received by the Administrative Agent not later than
10:00 a.m. (i) three Business Days prior to the requested date of any Borrowing
of, conversion to or continuation of Eurodollar Rate Loans or of any conversion
of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of
any Borrowing of Base Rate Loan. Each telephonic notice by the Borrower pursuant
to this Section 2.02(a) must be confirmed promptly by delivery to the
Administrative Agent of a written Loan Notice, appropriately completed and
signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion
to or continuation of Eurodollar Rate Loans shall be in a principal amount of
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as
provided in Section 2.03(c), each Borrowing of or conversion to Base Rate Loans
shall be in a principal amount of $500,000 or a whole multiple of $100,000 in
excess thereof. Each Loan Notice (whether telephonic or written) shall specify
(i) whether the Borrower is requesting a Borrowing, a conversion of Loans from
one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Loans to be
borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to
which existing Loans are to be converted, and (v) if applicable, the duration of
the Interest Period with respect thereto. If the Borrower fails to specify a
Type of Loan in a Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be made
as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans. If the Borrower
requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans
in any such Loan Notice, but fails to specify an Interest Period, it will be
deemed to have specified an Interest Period of one month.

 

(b) Following receipt of a Loan Notice, the Administrative Agent shall promptly
notify each Lender of the amount of its Pro Rata Share of the applicable Loans,
and if no timely notice of a conversion or continuation is provided by the
Borrower, the Administrative Agent shall notify each Lender of the details of
any automatic conversion to Base Rate Loans described in the preceding
subsection. In the case of a Borrowing, each Lender shall make the amount of its
Loan available to the Administrative Agent in immediately available funds at the
Administrative Agent’s Office not later than 1:00 p.m. on the Business Day
specified in the applicable Loan Notice. Upon satisfaction of the applicable
conditions set forth in Section 4.02 (and, if such Borrowing is the initial
Credit Extension, Section 4.01), the Administrative Agent shall make all funds
so received available to the Borrower in like

 

18

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

funds as received by the Administrative Agent either by (i) crediting the
account of the Borrower on the books of Bank of America with the amount of such
funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative Agent
by the Borrower; provided, however, that if, on the date the Loan Notice with
respect to such Borrowing is given by the Borrower, there are L/C Borrowings
outstanding, then the proceeds of such Borrowing shall be applied, first, to the
payment in full of any such L/C Borrowings and second, to the Borrower as
provided above.

 

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued
or converted only on the last day of an Interest Period for such Eurodollar Rate
Loan. During the existence of a Default, no Loans may be requested as, converted
to or continued as Eurodollar Rate Loans without the consent of the Required
Lenders.

 

(d) The Administrative Agent shall promptly notify the Borrower and the Lenders
of the interest rate applicable to any Interest Period for Eurodollar Rate Loans
upon determination of such interest rate. The determination of the Eurodollar
Rate by the Administrative Agent shall be conclusive in the absence of manifest
error. At any time that Base Rate Loans are outstanding, the Administrative
Agent shall notify the Borrower and the Lenders of any change in Bank of
America’s prime rate used in determining the Base Rate promptly following the
public announcement of such change.

 

(e) After giving effect to all Borrowings, all conversions of Loans from one
Type to the other, and all continuations of Loans as the same Type, there shall
not be more than six Interest Periods in effect with respect to Loans.

 

2.03 Letters of Credit.

 

(a) The Letter of Credit Commitment.

 

(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the other Lenders set forth in this
Section 2.03, (1) from time to time on any Business Day during the period from
the Closing Date until the Letter of Credit Expiration Date, to issue Letters of
Credit for the account of the Borrower and to amend or renew Letters of Credit
previously issued by it, in accordance with subsection (b) below, and (2) to
honor drafts under the Letters of Credit; and (B) the Lenders severally agree to
participate in Letters of Credit issued for the account of the Borrower;
provided that the L/C Issuer shall not be obligated to make any L/C Credit
Extension with respect to any Letter of Credit, and no Lender shall be obligated
to participate in any Letter of Credit if as of the date of such L/C Credit
Extension, (x) the Total Outstandings would exceed the Aggregate Commitments,
(y) the aggregate Outstanding Amount of the Loans of any Lender, plus such
Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations would
exceed such Lender’s Commitment, or (z) the Outstanding Amount of the L/C
Obligations would exceed the Letter of Credit Sublimit. Within the foregoing
limits, and subject to the terms and conditions hereof, the Borrower’s ability
to obtain Letters of Credit shall be fully revolving, and accordingly the
Borrower may, during the foregoing period, obtain Letters of Credit to replace
Letters of Credit that have expired or that have been drawn upon and reimbursed.
All Letters of Credit shall be standby letters of credit issued to support the
payment or performance obligations of the Borrower or its Subsidiaries.

 

(ii) (A) The L/C Issuer shall be under no obligation to issue any Letter of
Credit if any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from
issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any
request or directive (whether or not having the force of law)

 

19

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

from any Governmental Authority with jurisdiction over the L/C Issuer shall
prohibit, or request that the L/C Issuer refrain from, the issuance of letters
of credit generally or such Letter of Credit in particular or shall impose upon
the L/C Issuer with respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon the L/C
Issuer any unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which the L/C Issuer in good faith deems material to it.

 

(B) The L/C Issuer shall not issue a Letter of Credit if the expiry date of such
requested Letter of Credit would occur more than twelve months after the date of
issuance or last renewal or the Stated Maturity Date, unless all Lenders have
approved such expiry date.

 

(C) If the expiry date of any Letter of Credit is to occur after the Stated
Maturity Date, the Borrower, prior to the Letter of Credit Expiration Date,
shall Cash Collateralize such Letter of Credit pursuant to the provisions of
Section 2.03(g).

 

(D) The L/C Issuer shall be under no obligation to issue any Letter of Credit if
the issuance of such Letter of Credit would violate one or more policies of the
L/C Issuer, or such Letter of Credit is in an initial amount less than $500,000
or is to be denominated in a currency other than Dollars.

 

(iii) The L/C Issuer shall be under no obligation to amend any Letter of Credit
if (A) the L/C Issuer would have no obligation at such time to issue such Letter
of Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

 

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Renewal
Letters of Credit.

 

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of the Borrower delivered to the L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrower.
Such Letter of Credit Application must be received by the L/C Issuer and the
Administrative Agent not later than 11:00 a.m. at least two Business Days (or
such later date and time as the L/C Issuer may agree in a particular instance in
its sole discretion) prior to the proposed issuance date or date of amendment,
as the case may be. In the case of a request for an initial issuance of a Letter
of Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested
Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C)
the expiry date thereof; (D) the name and address of the beneficiary thereof;
(E) the documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; and (G) such other matters as the
L/C Issuer may require. In the case of a request for an amendment of any
outstanding Letter of Credit, such Letter of Credit Application shall specify in
form and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be
amended; (B) the proposed date of amendment thereof (which shall be a Business
Day); (C) the nature of the proposed amendment; and (D) such other matters as
the L/C Issuer may require.

 

(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer
will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the Borrower and, if not, the L/C

 

20

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

Issuer will provide the Administrative Agent with a copy thereof. Upon receipt
by the L/C Issuer of confirmation from the Administrative Agent that the
requested issuance or amendment is permitted in accordance with the terms
hereof, then, subject to the terms and conditions hereof, the L/C Issuer shall,
on the requested date, issue a Letter of Credit for the account of the Borrower
or enter into the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer’s usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the L/C Issuer a risk participation in such Letter of Credit in an amount equal
to the product of such Lender’s Pro Rata Share times the amount of such Letter
of Credit.

 

(iii) If the Borrower so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole and absolute discretion, agree to
issue a Letter of Credit that has automatic renewal provisions (each, an
“Auto-Renewal Letter of Credit”); provided that any such Auto-Renewal Letter of
Credit must permit the L/C Issuer to prevent any such renewal at least once in
each twelve-month period (commencing with the date of issuance of such Letter of
Credit) by giving prior notice to the beneficiary thereof not later than a day
(the “Nonrenewal Notice Date”) in each such twelve-month period to be agreed
upon at the time such Letter of Credit is issued. Unless otherwise directed by
the L/C Issuer, the Borrower shall not be required to make a specific request to
the L/C Issuer for any such renewal. Once an Auto-Renewal Letter of Credit has
been issued, the Lenders shall be deemed to have authorized (but may not
require) the L/C Issuer to permit the renewal of such Letter of Credit at any
time to an expiry date not later than twelve months after the Stated Maturity
Date; provided, however, that the L/C Issuer shall not permit any such renewal
if (A) the L/C Issuer has determined that it would have no obligation or right
at such time to issue such Letter of Credit in its renewed form under the terms
hereof (by reason of the provisions of Section 2.03(a)(ii) or otherwise), or (B)
it has received notice (which may be by telephone or in writing) on or before
the day that is two Business Days before the Nonrenewal Notice Date (1) from the
Administrative Agent that the Required Lenders have elected not to permit such
renewal or (2) from the Administrative Agent, any Lender or the Borrower that
one or more of the applicable conditions specified in Section 4.02 is not then
satisfied.

 

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the L/C Issuer will also deliver to the Borrower and the Administrative
Agent a true and complete copy of such Letter of Credit or amendment.

 

(c) Drawings and Reimbursements; Funding of Participations.

 

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower
and the Administrative Agent thereof. Not later than 11:00 a.m. on the date of
any payment by the L/C Issuer under a Letter of Credit (each such date, an
“Honor Date”), the Borrower shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing. If the
Borrower fails to so reimburse the L/C Issuer by such time, the Administrative
Agent shall promptly notify each Lender of the Honor Date, the amount of the
unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such
Lender’s Pro Rata Share thereof. In such event, the Borrower shall be deemed to
have requested a Borrowing of Base Rate Loans to be disbursed on the Honor Date
in an amount equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in Section 2.02 for the principal amount of Base Rate Loans,
but subject to the amount of the unutilized portion of the Aggregate Commitments

 

21

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

and the conditions set forth in Section 4.02 (other than the delivery of a Loan
Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant
to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.

 

(ii) Each Lender (including the Lender acting as L/C Issuer) shall upon any
notice pursuant to Section 2.03(c)(i) make funds available to the Administrative
Agent for the account of the L/C Issuer at the Administrative Agent’s Office in
an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than
1:00 p.m. on the Business Day specified in such notice by the Administrative
Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender
that so makes funds available shall be deemed to have made a Base Rate Loan to
the Borrower in such amount. The Administrative Agent shall remit the funds so
received to the L/C Issuer.

 

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Borrowing of Base Rate Loans because the conditions set forth in Section 4.02
cannot be satisfied or for any other reason, the Borrower shall be deemed to
have incurred from the L/C Issuer an L/C Borrowing in the amount of the
Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due
and payable on demand (together with interest) and shall bear interest at the
Default Rate. In such event, each Lender’s payment to the Administrative Agent
for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be
deemed payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its participation
obligation under this Section 2.03.

 

(iv) Until each Lender funds its Loan or L/C Advance pursuant to this Section
2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of
Credit, interest in respect of such Lender’s Pro Rata Share of such amount shall
be solely for the account of the L/C Issuer.

 

(v) Each Lender’s obligation to make Loans or L/C Advances to reimburse the L/C
Issuer for amounts drawn under Letters of Credit, as contemplated by this
Section 2.03(c), shall be absolute and unconditional and shall not be affected
by any circumstance, including (A) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the L/C Issuer, the
Borrower or any other Person for any reason whatsoever; (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that each
Lender’s obligation to make Loans pursuant to this Section 2.03(c) is subject to
the conditions set forth in Section 4.02 (other than delivery by the Borrower of
a Loan Notice). No such making of an L/C Advance shall relieve or otherwise
impair the obligation of the Borrower to reimburse the L/C Issuer for the amount
of any payment made by the L/C Issuer under any Letter of Credit, together with
interest as provided herein.

 

(vi) If any Lender fails to make available to the Administrative Agent for the
account of the L/C Issuer any amount required to be paid by such Lender pursuant
to the foregoing provisions of this Section 2.03(c) by the time specified in
Section 2.03(c)(ii), the L/C Issuer shall be entitled to recover from such
Lender (acting through the Administrative Agent), on demand, such amount with
interest thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the L/C Issuer at a rate
per annum equal to the Federal Funds Rate from time to time in effect. A
certificate of the L/C Issuer submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause (vi)
shall be conclusive absent manifest error.

 

22

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

(d) Repayment of Participations.

 

(i) At any time after the L/C Issuer has made a payment under any Letter of
Credit and has received from any Lender such Lender’s L/C Advance in respect of
such payment in accordance with Section 2.03(c), if the Administrative Agent
receives for the account of the L/C Issuer any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from the Borrower or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such Lender
its Pro Rata Share thereof (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender’s L/C Advance
was outstanding) in the same funds as those received by the Administrative
Agent.

 

(ii) If any payment received by the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any
of the circumstances described in Section 10.06 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion), each Lender shall
pay to the Administrative Agent for the account of the L/C Issuer its Pro Rata
Share thereof on demand of the Administrative Agent, plus interest thereon from
the date of such demand to the date such amount is returned by such Lender, at a
rate per annum equal to the Federal Funds Rate from time to time in effect.

 

(e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C
Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:

 

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other agreement or instrument relating thereto;

 

(ii) the existence of any claim, counterclaim, set-off, defense or other right
that the Borrower may have at any time against any beneficiary or any transferee
of such Letter of Credit (or any Person for whom any such beneficiary or any
such transferee may be acting), the L/C Issuer or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or by such
Letter of Credit or any agreement or instrument relating thereto, or any
unrelated transaction;

 

(iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;

 

(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law; or

 

(v) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrower.

 

23

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

The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.

 

(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
any Agent-Related Person nor any of the respective correspondents, participants
or assignees of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application. The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer, any
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the L/C Issuer, shall be liable or responsible for any of the
matters described in clauses (i) through (v) of Section 2.03(e); provided,
however, that anything in such clauses to the contrary notwithstanding, the
Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be
liable to the Borrower, to the extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered by the Borrower which
the Borrower proves were caused by the L/C Issuer’s willful misconduct or gross
negligence or the L/C Issuer’s willful failure to pay under any Letter of Credit
after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

 

(g) Cash Collateral. Upon the request of the Administrative Agent, (i) if the
L/C Issuer has honored any full or partial drawing request under any Letter of
Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the
Letter of Credit Expiration Date, any Letter of Credit may for any reason remain
outstanding and partially or wholly undrawn, the Borrower shall immediately Cash
Collateralize the then Outstanding Amount of all L/C Obligations (in an amount
equal to one hundred and two percent (102%) of such Outstanding Amount
determined as of the date of such L/C Borrowing or the Letter of Credit
Expiration Date, as the case may be). For purposes hereof, “Cash Collateralize”
means to pledge and deposit with or deliver to the Administrative Agent, for the
benefit of the L/C Issuer and the Lenders, as collateral for the L/C
Obligations, cash or deposit account balances pursuant to documentation in form
and substance satisfactory to the Administrative Agent and the L/C Issuer (which
documents are hereby consented to by the Lenders). Derivatives of such term have
corresponding meanings. The Borrower hereby grants to the Administrative Agent,
for the benefit of the L/C Issuer and the Lenders, a security interest in all
such cash, deposit accounts and all balances therein and all proceeds of the
foregoing. Cash collateral shall be maintained in blocked, non-interest bearing
deposit accounts at Bank of America.

 

24

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

(h) Applicability of ISP98. Unless otherwise expressly agreed by the L/C Issuer
and the Borrower when a Letter of Credit is issued the rules of the
“International Standby Practices 1998” published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each Letter of Credit.

 

(i) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent
for the account of each Lender in accordance with its Pro Rata Share a Letter of
Credit fee for each Letter of Credit equal to the Applicable Rate times the
daily maximum amount available to be drawn under such Letter of Credit (whether
or not such maximum amount is then in effect under such Letter of Credit). Such
letter of credit fees shall be computed on a quarterly basis in arrears. Such
letter of credit fees shall be due and payable on the first Business Day after
the end of each March, June, September and December, commencing with the first
such date to occur after the issuance of such Letter of Credit, on the Letter of
Credit Expiration Date and thereafter on demand. If there is any change in the
Applicable Rate during any quarter, the daily maximum amount of each Letter of
Credit shall be computed and multiplied by the Applicable Rate separately for
each period during such quarter that such Applicable Rate was in effect.

 

(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.
The Borrower shall pay directly to the L/C Issuer for its own account a fronting
fee with respect to each Letter of Credit in the amounts and at the times
specified in the Fee Letter. In addition, the Borrower shall pay directly to the
L/C Issuer for its own account the customary issuance, presentation, amendment
and other processing fees, and other standard costs and charges, of the L/C
Issuer relating to letters of credit as from time to time in effect. Such
customary fees and standard costs and charges are due and payable on demand and
are nonrefundable.

 

(k) Conflict with Letter of Credit Application. In the event of any conflict
between the terms hereof and the terms of any Letter of Credit Application, the
terms hereof shall control.

 

2.04 Prepayments.

 

(a) The Borrower may, upon notice to the Administrative Agent, at any time or
from time to time voluntarily prepay Loans in whole or in part without premium
or penalty; provided that (i) such notice must be received by the Administrative
Agent not later than 11:00 a.m. (A) three Business Days prior to any date of
prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of Base
Rate Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in a principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and
(iii) any prepayment of Base Rate Loans shall be in a principal amount of
$500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if
less, the entire principal amount thereof then outstanding. Each such notice
shall specify the date and amount of such prepayment and the Type(s) of Loans to
be prepaid. The Administrative Agent will promptly notify each Lender of its
receipt of each such notice, and of the amount of such Lender’s Pro Rata Share
of such prepayment. If such notice is given by the Borrower, the Borrower shall
make such prepayment and the payment amount specified in such notice shall be
due and payable on the date specified therein. Any prepayment of a Eurodollar
Rate Loan shall be accompanied by all accrued interest thereon, together with
any additional amounts required pursuant to Section 3.05. Each such prepayment
shall be applied to the Loans of the Lenders in accordance with their respective
Pro Rata Shares.

 

(b) If for any reason the Total Outstandings at any time exceed the Aggregate
Commitments then in effect, the Borrower shall immediately prepay Loans and/or
Cash Collateralize the L/C Obligations in an aggregate amount equal to such
excess; provided, however, that the Borrower shall not be required to Cash
Collateralize the L/C Obligations pursuant to this Section 2.04(b) unless after
the

 

25

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

prepayment in full of the Loans the Total Outstandings exceed the Aggregate
Commitments then in effect.

 

2.05 Termination or Reduction of Commitments. The Borrower may, upon notice to
the Administrative Agent, terminate the Aggregate Commitments, or from time to
time permanently reduce the Aggregate Commitments; provided that (i) any such
notice shall be received by the Administrative Agent not later than 11:00 a.m.
five Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $5,000,000 or any whole
multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate
or reduce the Aggregate Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Outstandings would exceed the
Aggregate Commitments, and (iv) if, after giving effect to any reduction of the
Aggregate Commitments, the Letter of Credit Sublimit exceeds the amount of the
Aggregate Commitments, such Sublimit shall be automatically reduced by the
amount of such excess. The Administrative Agent will promptly notify the Lenders
of any such notice of termination or reduction of the Aggregate Commitments. Any
reduction of the Aggregate Commitments shall be applied to the Commitment of
each Lender according to its Pro Rata Share. All facility and utilization fees
accrued until the effective date of any termination of the Aggregate Commitments
shall be paid on the effective date of such termination.

 

2.06 Repayment of Loans.

 

The Borrower shall repay to the Lenders on the Maturity Date the aggregate
principal amount of Loans outstanding on such date.

 

2.07 Interest.

 

(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate; and (ii) each Base Rate Loan shall
bear interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the Applicable
Rate.

 

(b) If any amount payable by the Borrower under any Loan Document is not paid
when due (without regard to any applicable grace periods), whether at stated
maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws. Furthermore,
while any Event of Default exists, the Borrower shall pay interest on the
principal amount of all outstanding Obligations hereunder at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.

 

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

 

2.08 Fees. In addition to certain fees described in subsections (i) and (j) of
Section 2.03:

 

(a) Facility Fee. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Pro Rata Share, a facility fee
equal to the Applicable Rate times the actual daily amount of the Aggregate
Commitments (or, if the Aggregate Commitments have terminated, on the

 

26

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

Outstanding Amount of all Loans and L/C Obligations), regardless of usage;
provided that if the Borrower has exercised its option to Term-Out pursuant to
Section 2.14, from and after the effective date of such Term-Out, the facility
fee shall be equal the Applicable Rate times the Total Outstandings. The
facility fee shall accrue at all times during the Availability Period (and
thereafter so long as any Loans or L/C Obligations remain outstanding),
including at any time during which one or more of the conditions in Article IV
is not met, and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with the
first such date to occur after the Closing Date, and on the Maturity Date (and,
if applicable, thereafter on demand). The facility fee shall be calculated
quarterly in arrears, and if there is any change in the Applicable Rate during
any quarter, the actual daily amount shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect.

 

(b) Utilization Fee. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Pro Rata Share, a utilization fee
equal to the Applicable Rate times the Total Outstandings on each day that the
Total Outstandings exceed 33% of the actual daily amount of the Aggregate
Commitments; provided that if the Borrower has exercised its option to Term-Out
pursuant to Section 2.14, from and after the effective date of such Term-Out,
the utilization fee shall be equal the Applicable Rate times the Total
Outstandings. The utilization fee shall be due and payable quarterly in arrears
on the last Business Day of each March, June, September and December, commencing
with the first such date to occur after the Closing Date, and on the Maturity
Date. The utilization fee shall be calculated quarterly in arrears and if there
is any change in the Applicable Rate during any quarter, the daily amount shall
be computed and multiplied by the Applicable Rate for each period during which
such Applicable Rate was in effect. The utilization fee shall accrue at all
times, including at any time during which one or more of the conditions in
Article IV is not met.

 

(c) Other Fees. (i) The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.

 

(ii) The Borrower shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever.

 

2.09 Computation of Interest and Fees. All computations of interest for Base
Rate Loans when the Base Rate is determined by Bank of America’s “prime rate”
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
fees or interest, as applicable, being paid than if computed on the basis of a
365-day year). Interest shall accrue on each Loan for the day on which the Loan
is made, and shall not accrue on a Loan, or any portion thereof, for the day on
which the Loan or such portion is paid, provided that any Loan that is repaid on
the same day on which it is made shall, subject to Section 2.11(a), bear
interest for one day.

 

2.10 Evidence of Debt.

 

(a) The Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent in
the ordinary course of business. The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Credit Extensions made by the Lenders to the Borrower and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and

 

27

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

the accounts and records of the Administrative Agent in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error. Upon the request of any Lender made through the
Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such Lender’s
Loans in addition to such accounts or records. Each Lender may attach schedules
to its Note and endorse thereon the date, Type (if applicable), amount and
maturity of its Loans and payments with respect thereto.

 

(b) In addition to the accounts and records referred to in subsection (a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit. In the event of any conflict between the
accounts and records maintained by the Administrative Agent and the accounts and
records of any Lender in respect of such matters, the accounts and records of
the Administrative Agent shall control in the absence of manifest error.

 

2.11 Payments Generally.

 

(a) All payments to be made by the Borrower shall be made without condition or
deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise expressly provided herein, all payments by the Borrower hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent’s Office in
Dollars and in immediately available funds not later than 2:00 p.m. on the date
specified herein. The Administrative Agent will promptly distribute to each
Lender its Pro Rata Share (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender’s Lending
Office. All payments received by the Administrative Agent after 2:00 p.m. shall
be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.

 

(b) If any payment to be made by the Borrower shall come due on a day other than
a Business Day, payment shall be made on the next following Business Day, and
such extension of time shall be reflected in computing interest or fees, as the
case may be.

 

(c) Unless the Borrower or any Lender has notified the Administrative Agent,
prior to the date any payment is required to be made by it to the Administrative
Agent hereunder, that the Borrower or such Lender, as the case may be, will not
make such payment, the Administrative Agent may assume that the Borrower or such
Lender, as the case may be, has timely made such payment and may (but shall not
be so required to), in reliance thereon, make available a corresponding amount
to the Person entitled thereto. If and to the extent that such payment was not
in fact made to the Administrative Agent in immediately available funds, then:

 

(i) if the Borrower failed to make such payment, each Lender shall forthwith on
demand repay to the Administrative Agent the portion of such assumed payment
that was made available to such Lender in immediately available funds, together
with interest thereon in respect of each day from and including the date such
amount was made available by the Administrative Agent to such Lender to the date
such amount is repaid to the Administrative Agent in immediately available funds
at the Federal Funds Rate from time to time in effect; and

 

(ii) if any Lender failed to make such payment, such Lender shall forthwith on
demand pay to the Administrative Agent the amount thereof in immediately
available funds, together with interest thereon for the period from the date
such amount was made available by the Administrative Agent to the Borrower to
the date such amount is recovered by the Administrative Agent (the “Compensation
Period”) at a rate per annum equal to the Federal Funds Rate from time to time
in effect. If such Lender pays such amount to the Administrative Agent, then
such

 

28

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

amount shall constitute such Lender’s Loan included in the applicable Borrowing.
If such Lender does not pay such amount forthwith upon the Administrative
Agent’s demand therefor, the Administrative Agent may make a demand therefor
upon the Borrower, and the Borrower shall pay such amount to the Administrative
Agent, together with interest thereon for the Compensation Period at a rate per
annum equal to the rate of interest applicable to the applicable Borrowing.
Nothing herein shall be deemed to relieve any Lender from its obligation to
fulfill its Commitment or to prejudice any rights which the Administrative Agent
or the Borrower may have against any Lender as a result of any default by such
Lender hereunder.

 

A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this subsection (c) shall be conclusive, absent
manifest error.

 

(d) If any Lender makes available to the Administrative Agent funds for any Loan
to be made by such Lender as provided in the foregoing provisions of this
Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.

 

(e) The obligations of the Lenders hereunder to make Loans and to fund
participations in Letters of Credit are several and not joint. The failure of
any Lender to make any Loan or to fund any such participation on any date
required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Loan or purchase its participation.

 

(f) Nothing herein shall be deemed to obligate any Lender to obtain the funds
for any Loan in any particular place or manner or to constitute a representation
by any Lender that it has obtained or will obtain the funds for any Loan in any
particular place or manner.

 

2.12 Sharing of Payments. If, other than as expressly provided elsewhere herein,
any Lender shall obtain on account of the Loans made by it, or the
participations in L/C Obligations held by it, any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its ratable share (or other share contemplated hereunder) thereof,
such Lender shall immediately (a) notify the Administrative Agent of such fact,
and (b) purchase from the other Lenders such participations in the Loans made by
them and/or such subparticipations in the participations in L/C Obligations held
by them, as the case may be, as shall be necessary to cause such purchasing
Lender to share the excess payment in respect of such Loans or such
participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender under any of the circumstances described in
Section 10.06 (including pursuant to any settlement entered into by the
purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender’s ratable share (according to the proportion of (i) the amount of such
paying Lender’s required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a

 

29

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

participation pursuant to this Section shall from and after such purchase have
the right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.

 

2.13 Extension of Stated Maturity Date.

 

(a) Not earlier than 45 days prior to, nor later than 30 days prior to, the
Stated Maturity Date then in effect, the Borrower may, upon notice to the
Administrative Agent (which shall promptly notify the Lenders), request a
364-day extension of the Stated Maturity Date then in effect. Within 30 days of
delivery of such notice, each Lender shall notify the Administrative Agent
whether or not it consents to such extension (which consent may be given or
withheld in such Lender’s sole and absolute discretion). Any Lender not
responding within the above time period shall be deemed not to have consented to
such extension. The Administrative Agent shall promptly notify the Borrower and
the Lenders of the Lenders’ responses.

 

(b) The Stated Maturity Date shall be extended only if all Lenders have
consented thereto. If so extended, the Stated Maturity Date shall be extended to
a date 364 days from the Stated Maturity Date then in effect, effective as of
the Stated Maturity Date then in effect (such existing Stated Maturity Date
being the “Extension Effective Date”). The Administrative Agent and the Borrower
shall promptly confirm to the Lenders such extension and the Extension Effective
Date. As a condition precedent to such extension, the Borrower shall deliver to
the Administrative Agent a certificate of the Borrower dated as of the Extension
Effective Date (in sufficient copies for each Lender) signed by a Responsible
Officer of the Borrower (i) certifying and attaching the resolutions adopted by
the Borrower approving or consenting to such extension and certifying that,
before and after giving effect to such extension, (A) the representations and
warranties contained in Article V and the other Loan Documents are true and
correct on and as of the Extension Effective Date, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, and except that
for purposes of this Section 2.13, the representations and warranties contained
in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to subsections (a) and (b), respectively,
of Section 6.01, and (B) no Default exists. The Borrower shall prepay any Loans
outstanding on the Extension Effective Date (and pay any additional amounts
required pursuant to Section 3.05) to the extent necessary to keep outstanding
Loans ratable with any revised Pro Rata Shares of all the Lenders effective as
of the Extension Effective Date.

 

(c) This Section shall supersede any provisions in Section 2.12 or 10.01 to the
contrary.

 

2.14 Term-Out Option.

 

(a) Provided no Default or Event of Default has occurred and is continuing, the
Borrower may, upon prior written notice to the Administrative Agent sent not
earlier than 60 days prior to, nor later than 10 days prior to, the Stated
Maturity Date, elect to have the principal balance of the Loans outstanding on
the Stated Maturity Date continued to the Term Loan Maturity Date as
non-revolving Term Loans (the “Term-Out”). As a condition precedent to the
Term-Out, the Borrower shall deliver to the Administrative Agent a certificate
of the Borrower dated the effective date of the Term-Out signed by a Responsible
Officer of the Borrower (i) certifying and attaching the resolutions adopted by
the Borrower approving or consenting to such Term-Out, and (ii) certifying that,
before and after giving effect to such extension, (A) the representations and
warranties contained in Article V and the other Loan Documents are true and
correct in all material respects on and as of the Extension Effective Date,
except to the extent that such representations and warranties specifically refer
to an earlier date, in which case they are true and correct as of such earlier
date, and except that for purposes of this Section 2.14, the

 

30

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

representations and warranties contained in subsections (a) and (b) of Section
5.05 shall be deemed to refer to the most recent statements furnished pursuant
to subsections (a) and (b), respectively, of Section 6.01, and (B) no Default or
Event of Default exists.

 

(b) During the period of such Term Loans, the Borrower may repay but not
reborrow the outstanding Term Loans.

 

ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01 Taxes.

 

(a) Any and all payments by the Borrower to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its
overall net income, and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
Laws of which the Administrative Agent or such Lender, as the case may be, is
organized or maintains a lending office (all such non-excluded taxes, duties,
levies, imposts, deductions, assessments, fees, withholdings or similar charges,
and liabilities being hereinafter referred to as “Taxes”). If the Borrower shall
be required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to the Administrative Agent or any Lender, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section), each of the Administrative Agent and such Lender receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable Laws, and (iv) within 30 days after the date of
such payment, the Borrower shall furnish to the Administrative Agent (which
shall forward the same to such Lender) the original or a certified copy of a
receipt evidencing payment thereof.

 

(b) In addition, the Borrower agrees to pay any and all present or future stamp,
court or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under any Loan Document or from
the execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, any Loan Document (hereinafter referred to as “Other
Taxes”).

 

(c) If the Borrower shall be required to deduct or pay any Taxes or Other Taxes
from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent or to such Lender, as the case may be, at the time interest
is paid, such additional amount that the Administrative Agent or such Lender
specifies is necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) that the
Administrative Agent or such Lender would have received if such Taxes or Other
Taxes had not been imposed.

 

(d) The Borrower agrees to indemnify the Administrative Agent and each Lender
for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this
Section) paid by the Administrative Agent and such Lender, (ii) amounts payable
under Section 3.01(c) and (iii) any liability (including additions to tax,
penalties, interest and expenses) arising therefrom or with respect thereto, in
each case whether or not such Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.

 

31

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

Payment under this subsection (d) shall be made within 30 days after the date
the Lender or the Administrative Agent makes a demand therefor.

 

3.02 Illegality. If any Lender determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for any Lender
or its applicable Lending Office to make, maintain or fund Eurodollar Rate
Loans, or to determine or charge interest rates based upon the Eurodollar Rate,
then, on notice thereof by such Lender to the Borrower through the
Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay accrued
interest on the amount so prepaid or converted. Each Lender agrees to designate
a different Lending Office if such designation will avoid the need for such
notice and will not, in the good faith judgment of such Lender, otherwise be
materially disadvantageous to such Lender.

 

3.03 Inability to Determine Rates. If the Required Lenders determine that for
any reason adequate and reasonable means do not exist for determining the
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or that the Eurodollar Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, the Administrative
Agent will promptly so notify the Borrower and each Lender. Thereafter, the
obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be
suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice. Upon receipt of such notice, the Borrower may
revoke any pending request for a Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a Borrowing of, conversion to or continuation of Base
Rate Loans in the amount specified therein.

 

3.04 Increased Cost and Reduced Return; Capital Adequacy.

 

(a) If any Lender determines that as a result of the introduction of or any
change in or in the interpretation of any Law, or such Lender’s compliance
therewith, there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Loans or (as the case may
be) issuing or participating in Letters of Credit, or a reduction in the amount
received or receivable by such Lender in connection with any of the foregoing
(excluding for purposes of this subsection (a) any such increased costs or
reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section
3.01 shall govern), (ii) changes in the basis of taxation of overall net income
or overall gross income by the United States or any foreign jurisdiction or any
political subdivision of either thereof under the Laws of which such Lender is
organized or has its Lending Office, and (iii) reserve requirements contemplated
by Section 3.04(c), then from time to time upon demand of such Lender (with a
copy of such demand to the Administrative Agent), the Borrower shall pay to such
Lender such additional amounts as will compensate such Lender for such increased
cost or reduction.

 

(b) If any Lender determines that the introduction of any Law regarding capital
adequacy or any change therein or in the interpretation thereof, or compliance
by such Lender (or its Lending Office) therewith, has the effect of reducing the
rate of return on the capital of such Lender or any corporation controlling such
Lender as a consequence of such Lender’s obligations hereunder (taking into
consideration its policies with respect to capital adequacy and such Lender’s
desired return on capital),

 

32

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

then from time to time upon demand of such Lender (with a copy of such demand to
the Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such reduction.

 

(c) The Borrower shall pay to each Lender, as long as such Lender shall be
required to maintain reserves with respect to liabilities or assets consisting
of or including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each
Eurodollar Rate Loan equal to the actual costs of such reserves allocated to
such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), which shall be due and payable on each date
on which interest is payable on such Loan, provided the Borrower shall have
received at least 15 days’ prior notice (with a copy to the Administrative
Agent) of such additional interest from such Lender. If a Lender fails to give
notice 15 days prior to the relevant Interest Payment Date, such additional
interest shall be due and payable 15 days from receipt of such notice.

 

3.05 Funding Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

 

(a) any continuation, conversion, payment or prepayment of any Loan other than a
Base Rate Loan on a day other than the last day of the Interest Period for such
Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise); or

 

(b) any failure by the Borrower (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Borrower;

 

including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.

 

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.

 

3.06 Matters Applicable to all Requests for Compensation.

 

A certificate of the Administrative Agent or any Lender claiming compensation
under this Article III and setting forth the additional amount or amounts to be
paid to it hereunder shall be conclusive in the absence of manifest error. In
determining such amount, the Administrative Agent or such Lender may use any
reasonable averaging and attribution methods.

 

3.07 Survival. All of the Borrower’s obligations under this Article III shall
survive termination of the Aggregate Commitments and repayment of all other
Obligations hereunder.

 

33

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

ARTICLE IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

4.01 Conditions of Initial Credit Extension. The obligation of each Lender to
make its initial Credit Extension hereunder is subject to satisfaction of the
following conditions precedent:

 

(a) The Administrative Agent’s receipt of the following, each of which shall be
originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the Borrower, each
dated the Closing Date (or, in the case of certificates of governmental
officials, a recent date before the Closing Date) and each in form and substance
satisfactory to the Administrative Agent and its legal counsel:

 

(i) executed counterparts of this Agreement, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;

 

(ii) a Note executed by the Borrower in favor of each Lender requesting a Note;

 

(iii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of the Borrower as the
Administrative Agent may require evidencing the identity, authority and capacity
of each Responsible Officer thereof authorized to act as a Responsible Officer
in connection with this Agreement and the other Loan Documents;

 

(iv) such documents and certifications as the Administrative Agent may
reasonably require to evidence that the Borrower is duly organized and in good
standing in Oklahoma, and that the Borrower is in good standing and qualified to
engage in business in each jurisdiction where its ownership, lease or operation
of properties or the conduct of its business requires such qualification, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect;

 

(v) a favorable opinion of Gable & Gotwals, counsel to the Borrower, addressed
to the Administrative Agent and each Lender, as to the matters set forth in
Exhibit E;

 

(vi) a favorable opinion of Locke Liddell & Sapp LLP, special Texas counsel to
the Borrower, addressed to the Administrative Agent and each Lender, as to the
matters set forth in Exhibit F;

 

(vii) a certificate of a Responsible Officer of the Borrower either (A)
attaching copies of all consents, licenses and approvals required in connection
with the execution, delivery and performance by the Borrower and the validity
against the Borrower of the Loan Documents, and such consents, licenses and
approvals shall be in full force and effect, or (B) stating that no such
consents, licenses or approvals are so required;

 

(viii) a certificate signed by a Responsible Officer of the Borrower certifying
(A) that the conditions specified in Sections 4.02(a) have been satisfied, (B)
that there has been no event or circumstance since the date of the Audited
Financial Statements that has had or could be reasonably expected to have,
either individually or in the aggregate, a Material Adverse Effect; and (C) the
current Debt Ratings;

 

34

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

(ix) evidence that the Existing Credit Agreement has been or concurrently with
the Closing Date is being terminated and all outstanding obligations thereunder
have been paid in full; and

 

(x) such other assurances, certificates, documents, consents or opinions as the
Administrative Agent, the L/C Issuer, or the Required Lenders reasonably may
require.

 

(b) Any fees required to be paid on or before the Closing Date shall have been
paid.

 

(c) Unless waived by the Administrative Agent, the Borrower shall have paid all
Attorney Costs of the Administrative Agent to the extent invoiced prior to or on
the Closing Date, plus such additional amounts of Attorney Costs as shall
constitute its reasonable estimate of Attorney Costs incurred or to be incurred
by it through the closing proceedings (provided that such estimate shall not
thereafter preclude a final settling of accounts between the Borrower and the
Administrative Agent).

 

4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor
any Request for Credit Extension is subject to the following conditions
precedent:

 

(a) The representations and warranties of the Borrower contained in Article V or
any other Loan Document, or which are contained in any document furnished at any
time under or in connection herewith or therewith, shall be true and correct on
and as of the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date, and except that for
purposes of this Section 4.02, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01.

 

(b) No Default shall exist, or would result from such proposed Credit Extension.

 

(c) The Administrative Agent and, if applicable, the L/C Issuer shall have
received a Request for Credit Extension in accordance with the requirements
hereof.

 

Each Request for Credit Extension submitted by the Borrower shall be deemed to
be a representation and warranty that the conditions specified in Sections
4.02(a), (b) and (c) have been satisfied on and as of the date of the applicable
Credit Extension.

 

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and the Lenders
that:

 

5.01 Existence, Qualification and Power; Compliance with Laws. The Borrower and
each of its Subsidiaries (a) is a corporation, partnership or limited liability
company duly organized or formed, validly existing and in good standing under
the Laws of the jurisdiction of its incorporation or organization, (b) has all
requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own its assets and carry on its
business and (ii) execute, deliver and perform its obligations under the Loan
Documents to which it is a party, (c) is duly qualified and is licensed and in
good standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws; except in each
case referred to in clause (b)(i), (c) or (d), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.

 

35

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

5.02 Authorization; No Contravention. The execution, delivery and performance by
the Borrower of each Loan Document has been duly authorized by all necessary
corporate or other organizational action, and do not and will not (a) contravene
the terms of the Borrower’s Organization Documents; (b) conflict with or result
in any breach or contravention of, or the creation of any Lien under, (i) any
Contractual Obligation to which the Borrower or any of its Subsidiaries is a
party or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which the Borrower or any of its Subsidiaries
or its property is subject; or (c) violate any Law.

 

5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Borrower of this Agreement or any other Loan Document.

 

5.04 Binding Effect. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by the
Borrower. This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms.

 

5.05 Financial Statements; No Material Adverse Effect.

 

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of the
Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Borrower and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.

 

(b) The unaudited consolidated financial statements of the Borrower and its
Subsidiaries dated June 30, 2003 and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for the fiscal quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the financial condition of the Borrower
and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments.

 

(c) Since the date of the Audited Financial Statements, there has been no event
or circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.

 

5.06 Litigation. There are no actions, suits, proceedings, investigations,
claims or disputes pending or, to the knowledge of the Borrower after due and
diligent investigation, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, by or against the Borrower or
any of its Subsidiaries or against any of their properties or revenues that (a)
purport to affect or pertain to this Agreement or any other Loan Document, or
any of the transactions contemplated hereby, or (b) as to which there is a
reasonable probability of an adverse determination and that, if determined
adversely, either individually or in the aggregate could reasonably be expected
to have a Material Adverse Effect.

 

5.07 No Default. Neither the Borrower nor any Subsidiary is in default under or
with respect to any Contractual Obligation that could, either individually or in
the aggregate, reasonably be expected

 

36

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

to have a Material Adverse Effect. No Default has occurred and is continuing or
would result from the consummation of the transactions contemplated by this
Agreement or any other Loan Document.

 

5.08 Ownership of Property; Liens. Each of the Borrower and each Subsidiary has
good record and marketable title in fee simple to, or valid leasehold interests
in, all real property necessary or used in the ordinary conduct of its business,
except for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The property of the
Borrower and its Subsidiaries is subject to no Liens, other than Liens permitted
by Section 7.01.

 

5.09 Environmental Compliance. The Borrower and its Subsidiaries conduct in the
ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and properties,
and as a result thereof the Borrower has reasonably concluded that such
Environmental Laws and claims could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Borrower and each
of its Subsidiaries has obtained all material licenses, permits, authorizations
and registrations required under any Environmental Law (“Environmental Permits”)
necessary for its operations, and all such Environmental Permits are in good
standing, and the Borrower and each of its Subsidiaries is in compliance with
all terms and conditions of such Environmental Permits.

 

5.10 Insurance. The properties of the Borrower and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of the
Borrower, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable Subsidiary
operates and covering such risks as are necessary to ensure that Uninsured
Liabilities of the Borrower and/or any Subsidiary are not reasonably likely to
result in a Material Adverse Effect.

 

5.11 Taxes. The Borrower and its Subsidiaries have filed all Federal, state and
other material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against the Borrower or any Subsidiary that would, if made, have a
Material Adverse Effect.

 

5.12 ERISA Compliance.

 

(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required contributions to each Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.

 

(b) There are no pending or, to the best knowledge of the Borrower, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.

 

37

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

(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither the Borrower
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.

 

5.13 Subsidiaries. As of the Closing Date, the Borrower has no Subsidiaries
other than those specifically disclosed in Part (a) of Schedule 5.13 and has no
equity investments in any other corporation or entity other than those
specifically disclosed in Part (b) of Schedule 5.13.

 

5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company
Act.

 

(a) The Borrower is not engaged and will not engage, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock. Following the application of
the proceeds of each Credit Extension, not more than 25% of the value of the
assets (either of the Borrower only or of the Borrower and its Subsidiaries on a
consolidated basis) subject to the provisions of Section 7.01 or subject to any
restriction contained in any agreement or instrument between the Borrower and
any Lender or any Affiliate of any Lender relating to Indebtedness and within
the scope of Section 8.01(e) will be margin stock.

 

(b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary
(i) is a “holding company,” or a “subsidiary company” of a “holding company,” or
an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company,” within the meaning of the Public Utility Holding Company Act of 1935,
(ii) is or is required to be registered as an “investment company” under the
Investment Company Act of 1940, or (iii) is subject to regulation under the
Federal Power Act, the Interstate Commerce Act, any state public utilities code
or any other Federal or state statute or regulation limiting its ability to
incur Indebtedness hereunder.

 

5.15 Disclosure. The Borrower has disclosed to the Administrative Agent and the
Lenders all agreements, instruments and corporate or other restrictions to which
it or any of its Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. For purposes of this Section 5.15, information
that is disclosed in a Form 10-K, 10-Q, 8-K, or definitive proxy materials filed
by the Borrower with the SEC shall be deemed to have been disclosed to the
Administrative Agent and the Lenders. No report, financial statement,
certificate or other information furnished (whether in writing or orally) by or
on behalf of the Borrower to the Administrative Agent or any Lender in
connection with the transactions contemplated hereby and the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.

 

5.16 Compliance with Laws.

 

38

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

Each of the Borrower and each Subsidiary is in compliance in all material
respects with the requirements of all Laws and all orders, writs, injunctions
and decrees applicable to it or to its properties, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted or (b)
the failure to comply therewith, either individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.

 

5.17 No Burdensome Agreements.

 

Neither the Borrower, nor any of its Subsidiaries is bound by any Contractual
Obligation (other than this Agreement or any other Loan Document) that limits
the ability of any Subsidiary to make Restricted Payments to the Borrower or any
Subsidiary or to otherwise transfer property to the Borrower or any Subsidiary.

 

5.18 Intellectual Property; Licenses, Etc.

 

The Borrower and its Subsidiaries own, or possess the right to use, all of the
trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights (collectively, “IP
Rights”) that are reasonably necessary for the operation of their respective
businesses, and, to the best knowledge of the Borrower, such ownership or right
to use is without conflict with the rights of any other Person. To the best
knowledge of the Borrower, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by the Borrower or any Subsidiary infringes upon
any rights held by any other Person. No claim or litigation regarding any of the
foregoing is pending or, to the best knowledge of the Borrower, threatened,
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.

 

5.19 Tax Shelter Regulations.

 

The Borrower does not intend to treat the Loans and/or Letters of Credit and
related transactions as being a “reportable transaction” (within the meaning of
Treasury Regulation Section 1.6011-4). In the event the Borrower determines to
take any action inconsistent with such intention, it will promptly notify the
Administrative Agent thereof. If the Borrower so notifies the Administrative
Agent, the Borrower acknowledges that one or more of the Lenders may treat its
Loans and/or its interest in Non-Ratable Loans and/or Administrative Agent
Advances and/or Letters of Credit as part of a transaction that is subject to
Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as
applicable, will maintain the lists and other records required by such Treasury
Regulation.

 

ARTICLE VI.

AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Borrower shall, and shall (except in the case of
the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11) cause each
Subsidiary to:

 

6.01 Financial Statements. Deliver to the Administrative Agent and each Lender,
in form and detail satisfactory to the Administrative Agent and the Required
Lenders:

 

39

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

(a) as soon as available, but in any event within 90 days after the end of each
fiscal year of the Borrower, a consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, audited and accompanied by a report and opinion of an independent
certified public accountant of nationally recognized standing reasonably
acceptable to the Required Lenders, which report and opinion shall be prepared
in accordance with generally accepted auditing standards and shall not be
subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit; and

 

(b) as soon as available, but in any event within 45 days after the end of each
of the first three fiscal quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Subsidiaries as at the end of
such fiscal quarter, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for such fiscal quarter and for
the portion of the Borrower’s fiscal year then ended, setting forth in each case
in comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail and certified by a Responsible Officer of the Borrower
as fairly presenting the financial condition, results of operations,
shareholders’ equity and cash flows of the Borrower and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes.

 

As to any information contained in materials furnished pursuant to Section
6.02(c), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
lieu of the obligation of the Borrower to furnish the information and materials
described in subsections (a) and (b) above at the times specified therein.

 

6.02 Certificates; Other Information. Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:

 

(a) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b), (or if such financial statements are delivered
electronically, within two (2) business days of such electronic delivery) a duly
completed Compliance Certificate signed by a Responsible Officer of the
Borrower;

 

(b) promptly after any request by the Administrative Agent or any Lender, copies
of any detailed audit reports, management letters or recommendations submitted
to the board of directors (or the audit committee of the board of directors) of
the Borrower by independent accountants in connection with the accounts or books
of the Borrower or any Subsidiary, or any audit of any of them;

 

(c) promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent to the stockholders
of the Borrower, and copies of all annual, regular, periodic and special
reports, all statements under oath of the Borrower’s principal executive officer
and principal financial officer relating to facts and circumstances relating to
Securities Exchange Act of 1934 filings, and all registration statements which
the Borrower may file or be required to file with the SEC under Section 13 or
15(d) of the Securities Exchange Act of 1934, and not otherwise required to be
delivered to the Administrative Agent pursuant hereto; and

 

(d) promptly, such additional information regarding the business, financial or
corporate affairs of the Borrower or any Subsidiary, or compliance with the
terms of the Loan Documents, as the Administrative Agent or any Lender may from
time to time reasonably request.

 

40

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

Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section
6.02(c) (to the extent any such documents are included in materials otherwise
filed with the SEC) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date (i) (A) after which the Borrower
posts such documents, or provides a link thereto on the Borrower’s website on
the Internet at the website address listed on Schedule 10.02; or (B) after which
such documents are posted on the Borrower’s behalf on IntraLinks/IntraAgency or
another relevant website, if any, to which each Lender and the Administrative
Agent have access (whether a commercial, third-party website or whether
sponsored by the Administrative Agent), and (ii) the Borrower notifies (which
may be by facsimile or electronic mail) the Administrative Agent and each Lender
of the posting of any such documents; provided that the Borrower shall deliver
paper copies or soft copies (by electronic mail) of such documents to the
Administrative Agent or any Lender that requests the Borrower to deliver such
paper copies or soft copies until a written request to cease delivering paper
copies or soft copies is given by the Administrative Agent or such Lender.
Notwithstanding anything contained herein, in every instance the Borrower shall
be required to provide paper copies of the Compliance Certificates required by
Section 6.02(a) to the Administrative Agent and each of the Lenders. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

 

6.03 Notices. Promptly notify the Administrative Agent and each Lender:

 

(a) of the occurrence of any Default and of the occurrence or existence of any
event or circumstance that could reasonably be expected to become a Default and
the action which the Borrower is taking or proposes to take with respect
thereto;

 

(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Borrower or any Subsidiary; (ii)
any dispute, litigation, investigation, proceeding or suspension between the
Borrower or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws;

 

(c) of the occurrence of any ERISA Event;

 

(d) of the commencement of, or any material development in, any litigation or
proceeding affecting the Borrower or any Subsidiary (i) in which the amount of
damages claimed is $50,000,000 (or its equivalent in another currency or
currencies) or more, (ii) in which injunctive or similar relief is sought and
which, if adversely determined, could have a Material Adverse Effect, or (iii)
in which the relief sought is an injunction or other stay of the performance of
this Agreement or any Loan Document or the operations of the Borrower or any of
its Subsidiaries;

 

(e) of any material change in accounting policies or financial reporting
practices by the Borrower or any Subsidiary;

 

(f) of any announcement by Moody’s or S&P of any change or possible change in a
Debt Rating; and

 

(g) Promptly after the Borrower has notified the Administrative Agent of any
intention by the Borrower to treat the Loans and/or Letters of Credit as being a
“reportable transaction” (within the

 

41

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

meaning of Treasury Regulation Section 1.6011-4), a duly completed copy of IRS
Form 8886 or any successor form.

 

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.

 

6.04 Payment of Obligations. Pay and discharge as the same shall become due and
payable, all its obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Subsidiary; (b) all lawful claims
which, if unpaid, would by law become a Lien upon its property; and (c) all
Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness.

 

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

 

6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear excepted; (b) make all
necessary repairs thereto and renewals and replacements thereof except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) use the standard of care typical in the industry in the
operation and maintenance of its facilities.

 

6.07 Maintenance of Insurance. Maintain with financially sound and reputable
insurance companies not Affiliates of the Borrower, insurance with respect to
its properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts as are customarily carried under similar circumstances
by such other Persons and with such deductibles and covering such risks as are
necessary to ensure that Uninsured Liabilities of the Borrower and/or any
Subsidiary are not reasonably likely to result in a Material Adverse Effect, and
providing for not less than 30 days’ prior notice to the Administrative Agent of
termination, lapse or cancellation of such insurance.

 

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

 

6.09 Books and Records. (a) Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Borrower or such Subsidiary, as the case may be; and
(b) maintain such books of record and account in material conformity with all
applicable

 

42

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

requirements of any Governmental Authority having regulatory jurisdiction over
the Borrower or such Subsidiary, as the case may be.

 

6.10 Inspection Rights. Permit representatives and independent contractors of
the Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of the Borrower and at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrower; provided, however, that when an Event of Default
exists the Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice.

 

6.11 Use of Proceeds. Use the proceeds of the Credit Extensions to provide
liquidity for commercial paper, for working capital, capital expenditures,
acquisitions, mergers, and for other general corporate purposes not in
contravention of any Law or of any Loan Document; provided however, no portion
of the proceeds of any Credit Extension will be used in any manner prohibited by
Section 7.08.

 

6.12 Further Assurances. The Borrower shall execute and deliver all such further
instruments, and perform such other acts, as Administrative Agent or Required
Lenders may determine are reasonably necessary to effectuate the intent of the
Loan Documents.

 

ARTICLE VII.

NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly:

 

7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than the following:

 

(a) Liens pursuant to any Loan Document;

 

(b) Liens for taxes not yet due or which are being contested in good faith and
by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;

 

(c) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not overdue for
a period of more than 30 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;

 

(d) pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;

 

(e) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety bonds (other than bonds
related to judgments or litigation), performance bonds and other obligations of
a like nature incurred in the ordinary course of business;

 

43

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

(f) any right which any municipal or governmental body or agency may have by
virtue of any franchise, license, contract or status to purchase or designate a
purchaser of, or order the sale of, any property of the Borrower or a Subsidiary
upon payment of reasonable compensation therefor or to terminate any franchise,
license or other rights or to regulate the property and business of the Borrower
or a Subsidiary;

 

(g) any liens, neither assumed by the Borrower or a Subsidiary nor on which it
customarily pays interest, existing upon real estate or rights in or relating to
real estate acquired by the Borrower or a Subsidiary for sub-station, measuring
station, regulating station, gas purification station, compressor station,
transmission line, distribution line or right-of-way purposes;

 

(h) easements or reservations in any property of the Borrower or a Subsidiary
for the purpose of roads, pipe lines, gas transmission and distribution lines,
electric light and power transmission and distribution lines, water mains and
other like purposes, and zoning ordinances, regulations and restrictions which
do not impair the use of such property in the operation of the business of the
Borrower or a Subsidiary;

 

(i) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;

 

(j) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 8.01(h) or securing appeal or other surety bonds
related to such judgments;

 

(k) Liens securing Indebtedness in respect of capital leases, Synthetic Lease
Obligations and purchase money obligations for fixed or capital assets; provided
that (i) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness, (ii) the Indebtedness secured thereby
does not exceed the cost or fair market value, whichever is lower, of the
property being acquired on the date of acquisition, (iii) such Liens attach to
such property concurrently with or within 90 days after the acquisition thereof,
and (iv) the principal amount of the Indebtedness secured by any such Liens
shall not in the aggregate exceed 2.5% of the Total Capital of the Borrower and
its Subsidiaries; and

 

(l) Liens not otherwise permitted by this Section 7.01 if at the time of, and
after giving effect to, the creation or assumption of any such Lien, the
aggregate of all obligations of the Borrower and its Subsidiaries secured by any
Liens not otherwise permitted hereby does not exceed 5% of the Total Capital of
the Borrower and its Subsidiaries.

 

7.02 Investments. Make any Investments, except:

 

(a) Investments held by the Borrower or such Subsidiary in the form of cash
equivalents;

 

(b) advances to officers, directors and employees of the Borrower and
Subsidiaries in the ordinary course of business in accordance with applicable
law for travel, entertainment, relocation and analogous ordinary business
purposes;

 

(c) Investments of the Borrower in any wholly-owned Subsidiary and Investments
of any wholly-owned Subsidiary in another wholly-owned Subsidiary;

 

44

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

(d) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;

 

(e) purchases of, or investments in, the capital stock, equity interest, assets,
obligations or other securities of, or interest in, Subsidiaries, joint ventures
or other Persons, in each case which are engaged principally in the business of
the purchasing, gathering, compression, transportation, distribution, marketing,
or storage of natural gas and compressed natural gas, the exploration or
production of natural gas or oil or the processing of natural gas liquids, the
underground piping of natural gas distribution systems, other natural
gas-related businesses, or the generation and marketing of electricity; provided
that such purchases or investments are not opposed by the board of directors or
management of such Person; and

 

(f) other Investments, if at the time of, and after giving effect to, such
Investments, the aggregate book value of all such Investments does not exceed
$100,000,000 in the aggregate.

 

7.03 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or a Material Portion of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:

 

(a) any Subsidiary may merge with (i) the Borrower, provided that the Borrower
shall be the continuing or surviving Person, or (ii) any one or more other
Subsidiaries, provided that when any wholly-owned Subsidiary is merging with
another Subsidiary, the wholly-owned Subsidiary shall be the continuing or
surviving Person; and

 

(b) any Subsidiary may Dispose of all or a Material Portion of its assets (upon
voluntary liquidation or otherwise) to the Borrower or to another Subsidiary;
provided that if the transferor in such a transaction is a wholly-owned
Subsidiary, then the transferee must either be the Borrower or a wholly-owned
Subsidiary;

 

(c) the Borrower or any of its Subsidiaries may consolidate or merge with
another corporation or entity, and a Person may consolidate with or merge into
the Borrower or any of its Subsidiaries, provided that (x) if the merger
involves a Subsidiary but does not involve the Borrower, a Subsidiary shall be
the ultimate surviving entity, and (y) if the merger involves the Borrower, the
Borrower shall be the ultimate surviving entity, and (z) in each such case (i)
the surviving entity shall be after the merger a solvent corporation organized
and existing under the laws of the United States of America, any State thereof
or the District of Columbia, (ii) immediately after giving effect to such
transaction and treating any Indebtedness which becomes an obligation of the
Borrower or a Subsidiary as a result of such transaction as having been incurred
by the Borrower or such Subsidiary at the time of such transaction, no Event of
Default or Default shall have happened and be continuing, and (iii) if the
merger or consolidation involves the Borrower, the Borrower has delivered to the
Administrative Agent a certificate signed by a Responsible Officer and an
opinion of counsel, each stating that such consolidation or merger complies with
this Section 7.03 and such certificate shall additionally state that, in the
opinion of the board of directors of the Borrower, the transaction is in the
interest of the Borrower;

 

provided, however, that the Borrower shall not convey or transfer any assets to
a Subsidiary solely for the purpose of improving the credit position of such
Subsidiary in order to enable it to borrow money.

 

45

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

7.04 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that:

 

(a) each Subsidiary may make Restricted Payments to the Borrower and to
wholly-owned Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly-owned Subsidiary, to the Borrower and any Subsidiary and to each
other owner of capital stock or other equity interests of such Subsidiary on a
pro rata basis based on their relative ownership interests);

 

(b) the Borrower and each Subsidiary may declare and make dividend payments or
other distributions payable solely in the common stock or other common equity
interests of such Person;

 

(c) the Borrower and each Subsidiary may purchase, redeem or otherwise acquire
shares of its common stock or other common equity interests or warrants or
options to acquire any such shares with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other common
equity interests;

 

(d) the Borrower may purchase shares of capital stock of the Borrower owned by
Westar;

 

(e) the Borrower may repurchase shares of common stock of the Borrower which are
used to fund the Borrower’s Existing Plans pursuant to such Existing Plans,
provided that the aggregate amount of shares repurchased on and after September
22, 2003 shall not exceed four million (4,000,000) shares; and

 

(f) the Borrower may declare or pay cash dividends to its stockholders and
purchase, redeem or otherwise acquire shares of its capital stock or warrants,
rights or options to acquire any such shares for cash if the aggregate amount so
declared, paid or expended after August 31, 1998 would not exceed an amount
equal to 100% of net income of the Borrower and its Subsidiaries arising after
August 31, 1998 plus $125,000,000 and computed on a cumulative consolidated
basis with other such transactions by the Borrower since that date (excluding
any such purchase permitted by Sections 7.04(c), (d) and (e) hereof); provided
that immediately after giving effect to such proposed action, no Default would
exist.

 

7.05 Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by the Borrower
and its Subsidiaries on the date hereof or any business substantially related or
incidental thereto.

 

7.06 Transactions with Affiliates. Enter into any transaction of any kind with
any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
the Borrower or such Subsidiary as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate.

 

7.07 Burdensome Agreements. Enter into any Contractual Obligation (other than
this Agreement or any other Loan Document) that limits the ability of any
Subsidiary to make Restricted Payments to the Borrower or to otherwise transfer
property to the Borrower.

 

7.08 Use of Proceeds.

 

(a) Use the proceeds of any Credit Extension, whether directly or indirectly,
and whether immediately, incidentally or ultimately, to purchase or carry margin
stock (within the meaning of Regulation U of the FRB) or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose;

 

46

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

(b) use the proceeds of any Credit Extension in connection with the acquisition
of a voting interest of five percent or more in any Person if such acquisition
is opposed by the board of directors or management of such Person; or

 

(c) use the proceeds of Credit Extensions in connection with the purchase or
other acquisition, either directly or indirectly (including the repayment of any
Indebtedness of the Borrower used to fund such purchase or other acquisition) of
any shares of capital stock of the Borrower of any class, owned by Westar, in
excess of $300,000,000 in the aggregate.

 

7.09 Debt to Capital. (a) Permit Consolidated Total Indebtedness at any time to
exceed 67.5% of Total Capital.

 

(b) Qualifying Obligations constitute Indebtedness as defined in this Agreement.
However, for purposes of determining compliance with this Section 7.09 as of any
date, the Qualifying Amount of Pledged Notes and Convertibles, and the
Qualifying Amount of Subordinated Securities, shall be excluded from
Consolidated Total Indebtedness and shall be added to Consolidated Net Worth. As
used in this Section, (i) “Qualifying Amount of Pledged Notes and Convertibles”
as of any date means an amount equal to the lesser of (A) 75% of the outstanding
principal amount of Pledged Notes and of Convertibles as of such date, or (B)
10% of Total Capital as of such date, and (ii) “Qualifying Amount of
Subordinated Securities” as of any date means an amount equal to the lesser of
(A) 75% of the outstanding principal amount of all Subordinated Securities as of
such date or (B) 15% of Total Capital as of such date minus the Qualifying
Amount of Pledged Notes and Convertibles as of such date. For the avoidance of
doubt, any Convertibles that also qualify as Subordinated Securities as defined
in this Agreement shall be deemed Subordinated Securities only for purposes of
determining compliance with this Section 7.09.

 

ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES

 

8.01 Events of Default. Any of the following shall constitute an Event of
Default:

 

(a) Non-Payment. The Borrower fails to pay (i) when and as required to be paid
herein, any amount of principal of any Loan or any L/C Obligation, or (ii)
within three days after the same becomes due, any interest on any Loan or on any
L/C Obligation, or any facility, utilization or other fee due hereunder, or
(iii) within five days after the same becomes due, any other amount payable
hereunder or under any other Loan Document; or

 

(b) Specific Covenants. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Section 6.03, 6.05, 6.10, 6.11 or 6.12
or Article VII; or

 

(c) Other Defaults. The Borrower fails to perform or observe any other covenant
or agreement (not specified in subsection (a) or (b) above) contained in any
Loan Document on its part to be performed or observed and such failure continues
for 30 days; or

 

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Borrower, in any
other Loan Document, or in any document delivered in connection herewith or
therewith shall be incorrect or misleading when made or deemed made; or

 

47

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

(e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the Threshold Amount, or (B) fails to observe
or perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (B) any Termination Event (as so defined)
under such Swap Contract as to which the Borrower or any Subsidiary is an
Affected Party (as so defined) and, in either event, the Swap Termination Value
owed by the Borrower or such Subsidiary as a result thereof is greater than the
Threshold Amount; or

 

(f) Insolvency Proceedings, Etc. The Borrower or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or the Borrower or any of its Subsidiaries shall take any corporate
action in furtherance of any of the foregoing; or

 

(g) Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary
becomes unable or admits in writing its inability or fails generally to pay its
debts as they become due, or (ii) any writ or warrant of attachment or execution
or similar process is issued or levied against all or any material part of the
property of any such Person and is not released, vacated or fully bonded within
30 days after its issue or levy; or

 

(h) Judgments. There is entered against the Borrower or any Subsidiary (i) a
final judgment or order for the payment of money in an aggregate amount
exceeding the Threshold Amount (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or
(ii) any one or more non-monetary final judgments that have, or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
and, in either case, (A) enforcement proceedings are commenced by any creditor
upon such judgment or order, or (B) there is a period of ten (10) consecutive
days during which a stay of enforcement of such judgment, by reason of a pending
appeal or otherwise, is not in effect; or

 

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in

 

48

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

excess of the Threshold Amount, or (ii) the Borrower or any ERISA Affiliate
fails to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of the
Threshold Amount; or

 

(j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or the Borrower or any other Person contests in any manner the
validity or enforceability of any Loan Document; or the Borrower denies that it
has any or further liability or obligation under any Loan Document, or purports
to revoke, terminate or rescind any Loan Document; or

 

(k) Material Adverse Effect. There occurs a Material Adverse Effect; or

 

(l) Change of Control. There occurs any Change of Control with respect to the
Borrower.

 

8.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:

 

(a) declare the commitment of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;

 

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower;

 

(c) require that the Borrower Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and

 

(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;

 

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.

 

8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:

 

49

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

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;

 

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;

 

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this clause Third payable to
them;

 

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this clause Fourth held by
them;

 

Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn
amount of Letters of Credit; and

 

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrower or as otherwise required by Law.

 

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

 

ARTICLE IX.

ADMINISTRATIVE AGENT

 

9.01 Appointment and Authorization of Administrative Agent.

 

(a) Each Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term “agent” herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.

 

(b) The L/C Issuer shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and

 

50

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

immunities (i) provided to the Administrative Agent in this Article IX with
respect to any acts taken or omissions suffered by the L/C Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and the
applications and agreements for letters of credit pertaining to such Letters of
Credit as fully as if the term “Administrative Agent” as used in this Article IX
and in the definition of “Agent-Related Person” included the L/C Issuer with
respect to such acts or omissions, and (ii) as additionally provided herein with
respect to the L/C Issuer.

 

9.02 Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.

 

9.03 Liability of Administrative Agent. No Agent-Related Person shall (a) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
representation or warranty made by the Borrower or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
the Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower or any Affiliate thereof.

 

9.04 Reliance by Administrative Agent.

 

(a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it 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 counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, 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, under
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.

 

(b) For purposes of determining compliance with the conditions specified in
Section 4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

 

51

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

9.05 Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a “notice of default.” The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default as may be directed by the Required
Lenders in accordance with Article VIII; provided, however, that unless and
until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.

 

9.06 Credit Decision; Disclosure of Information by Administrative Agent. Each
Lender acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by the Administrative Agent hereafter taken,
including any consent to and acceptance of any assignment or review of the
affairs of the Borrower or any Affiliate thereof, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Lender as to
any matter, including whether Agent-Related Persons have disclosed material
information in their possession. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Borrower and their respective Subsidiaries, and all applicable bank or other
regulatory Laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Borrower
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person 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 Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent herein, the Administrative
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of any of the
Borrower or any of its Affiliates which may come into the possession of any
Agent-Related Person.

 

9.07 Indemnification of Administrative Agent. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand
each Agent-Related Person (to the extent not reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower to do so), pro
rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided, however, that no Lender shall
be liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities to the extent determined in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person’s own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the Required
Lenders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section. Without limitation of the foregoing, each Lender shall
reimburse the Administrative Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or

 

52

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

referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking in
this Section shall survive termination of the Aggregate Commitments, the payment
of all other Obligations and the resignation of the Administrative Agent.

 

9.08 Administrative Agent in its Individual Capacity. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with each of
the Borrower and its Affiliates as though Bank of America were not the
Administrative Agent or the L/C Issuer hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Bank of America or its Affiliates may receive information regarding
the Borrower or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower or such Affiliate) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them. With respect to its Loans, Bank of America
shall have the same rights and powers under this Agreement as any other Lender
and may exercise such rights and powers as though it were not the Administrative
Agent or the L/C Issuer, and the terms “Lender” and “Lenders” include Bank of
America in its individual capacity.

 

9.09 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 30 days’ notice to the Lenders; provided that any such
resignation by Bank of America shall also constitute its resignation as L/C
Issuer. If the Administrative Agent resigns under this Agreement, the Required
Lenders shall appoint from among the Lenders a successor administrative agent
for the Lenders, which successor administrative agent shall be consented to by
the Borrower at all times other than during the existence of an Event of Default
(which consent of the Borrower shall not be unreasonably withheld or delayed).
If no successor administrative agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent from among the Lenders. Upon the acceptance of its
appointment as successor administrative agent hereunder, the Person acting as
such successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and L/C Issuer and the respective
terms “Administrative Agent” and “L/C Issuer” shall mean such successor
administrative agent and Letter of Credit issuer, and the retiring
Administrative Agent’s appointment, powers and duties as Administrative Agent
shall be terminated and the retiring L/C Issuer’s rights, powers and duties as
such shall be terminated, without any other or further act or deed on the part
of such retiring L/C Issuer or any other Lender, other than the obligation of
the successor L/C Issuer to issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or to make
other arrangements satisfactory to the retiring L/C Issuer to effectively assume
the obligations of the retiring L/C Issuer with respect to such Letters of
Credit. After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of this Article IX and Sections 10.04 and
10.05 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement. If no successor
administrative agent has accepted appointment as Administrative Agent by the
date which is 30 days following a retiring Administrative Agent’s notice of
resignation, the retiring Administrative Agent’s resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above.

 

9.10 Administrative Agent May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Borrower, the Administrative Agent (irrespective of whether the principal of
any Loan or L/C Obligation shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any

 

53

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

demand on the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise

 

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under Sections 2.03(i) and (j), 2.08 and 10.04)
allowed in such judicial proceeding; and

 

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.08 and 10.04.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

 

9.11 Release of Lien on Cash Collateral Upon Expiration of Letters of Credit.
The Lenders irrevocably authorize the Administrative Agent to release its Lien
on Cash Collateral at such time as all Letters of Credit have expired, all
Obligations have been paid in full, and the Aggregate Commitments have
terminated.

 

9.12 Other Agents; Arrangers and Managers. None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as a
“co-syndication agent,” “co-documentation agent,” “book manager,” “lead
manager,” “arranger,” or “lead arranger” shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than,
in the case of such Lenders, those applicable to all Lenders as such. Without
limiting the foregoing, none of the Lenders or other Persons so identified shall
have or be deemed to have any fiduciary relationship with any Lender. Each
Lender acknowledges that it has not relied, and will not rely, on any of the
Lenders or other Persons so identified in deciding to enter into this Agreement
or in taking or not taking action hereunder.

 

ARTICLE X.

MISCELLANEOUS

 

10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent to any departure by the Borrower
therefrom, shall be effective unless in writing signed by the Required Lenders
and the Borrower, as the case may be, and acknowledged by the Administrative
Agent, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such amendment, waiver or consent shall:

 

54

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

(a) waive any condition set forth in Section 4.01(a) without the written consent
of each Lender;

 

(b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such Lender;

 

(c) postpone any date fixed by this Agreement or any other Loan Document for any
payment or mandatory prepayment of principal, interest, fees or other amounts
due to the Lenders (or any of them) or any mandatory reduction of the Aggregate
Commitments hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;

 

(d) reduce the principal of, or the rate of interest specified herein on, any
Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to this
Section 10.01) any fees or other amounts payable hereunder or under any other
Loan Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary to amend the definition of “Default Rate” or to waive any
obligation of the Borrower to pay interest at the Default Rate;

 

(e) change Section 2.12 or Section 8.03 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Lender;

 

(f) change any provision of this Section or the definition of “Required Lenders”
or any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender;

 

(g) permit the release of cash collateral (except as set forth in Section 9.11)
or amend any of the terms of this Agreement so as to reduce the amount of cash
collateral required in respect of Letters of Credit.

 

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of Credit issued or to be issued by
it; (ii) no amendment, waiver or consent shall, unless in writing and signed by
the Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; (iii) Section 10.07(h) may not be amended, waived or otherwise
modified without the consent of each Granting Lender all or any part of whose
Loans are being funded by an SPC at the time of such amendment, waiver or other
modification; and (iv) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.

 

10.02 Notices and Other Communications; Facsimile Copies.

 

(a) General. Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including by
facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or (subject to subsection
(c) below) electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:

 

55

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

(i) if to the Borrower, the Administrative Agent, or the L/C Issuer, to the
address, facsimile number, electronic mail address or telephone number specified
for such Person on Schedule 10.02 or to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by such party
in a notice to the other parties; and

 

(ii) if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number specified in its Administrative Questionnaire or to
such other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the Borrower, the
Administrative Agent, and the L/C Issuer.

 

All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered; provided, however, that notices and other communications
to the Administrative Agent, the L/C Issuer pursuant to Article II shall not be
effective until actually received by such Person. In no event shall a voicemail
message be effective as a notice, communication or confirmation hereunder.

 

(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may be
transmitted and/or signed by facsimile. The effectiveness of any such documents
and signatures shall, subject to applicable Law, have the same force and effect
as manually-signed originals and shall be binding on the Borrower, the
Administrative Agent and the Lenders. The Administrative Agent may also require
that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile document or signature.

 

(c) Limited Use of Electronic Mail. Electronic mail and Internet and intranet
websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.02, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.

 

(d) Reliance by Administrative Agent and Lenders. The Administrative Agent and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic Loan Notices) purportedly given by or on behalf of the Borrower even
if (i) such notices were not made in a manner specified herein, were incomplete
or were not preceded or followed by any other form of notice specified herein,
or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrower shall indemnify each Agent-Related Person and
each Lender from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of the
Borrower. All telephonic notices to and other communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.

 

10.03 No Waiver; Cumulative Remedies. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

 

56

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

10.04 Attorney Costs, Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all costs and expenses incurred in
connection with the development, preparation, negotiation and execution of this
Agreement and the other Loan Documents and any amendment, waiver, consent or
other modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse the
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or the other Loan Documents (including
all such costs and expenses incurred during any “workout” or restructuring in
respect of the Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs. The
foregoing costs and expenses shall include all search, filing, recording, title
insurance and appraisal charges and fees and taxes related thereto, and other
out-of-pocket expenses incurred by the Administrative Agent and the cost of
independent public accountants and other outside experts retained by the
Administrative Agent or any Lender. All amounts due under this Section 10.04
shall be payable within ten Business Days after demand therefor. The agreements
in this Section shall survive the termination of the Aggregate Commitments and
repayment of all other Obligations.

 

10.05 Indemnification by the Borrower. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact
(collectively the “Indemnitees”) from and against any and all liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses and disbursements (including Attorney Costs) of any kind
or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of or
in connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or instrument
delivered in connection with the transactions contemplated thereby or the
consummation of the transactions contemplated thereby, (b) any Commitment, Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the L/C Issuer to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), or (c) any actual
or alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by the Borrower, any Subsidiary or any
other Loan Party, or any Environmental Liability related in any way to the
Borrower, any Subsidiary or any other Loan Party, or (d) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified
Liabilities”), in all cases, whether or not caused by or arising, in whole or in
part, out of the negligence of the Indemnitee; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee. No Indemnitee
shall be liable for any damages arising from the use by others of any
information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Agreement, nor shall
any Indemnitee have any liability for any indirect or consequential damages
relating to this Agreement or any other Loan Document or arising out of its
activities in connection herewith or therewith (whether before or after the
Closing Date). All amounts due under this Section 10.05 shall be payable within
ten Business Days after demand therefor. The agreements in this Section shall
survive the resignation of the Administrative Agent, the replacement of any
Lender, the

 

57

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

termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.

 

10.06 Payments Set Aside. To the extent that any payment by or on behalf of the
Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect.

 

10.07 Successors and Assigns.

 

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
subsection (f) of this Section, or (iv) to an SPC in accordance with the
provisions of subsection (h) of this Section (and any other attempted assignment
or transfer by any party hereto shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of this
Section and, to the extent expressly contemplated hereby, the Indemnitees) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b) Any Lender may at any time assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans (including for purposes of this
subsection (b), participations in L/C Obligations and) at the time owing to it);
provided that (i) except in the case of an assignment of the entire remaining
amount of the assigning Lender’s Commitment and the Loans at the time owing to
it or in the case of an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund (as defined in subsection (g) of this Section) with respect to a
Lender, the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) subject to each such assignment, determined as of
the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if “Trade Date” is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
$5,000,000 unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed); (ii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement with respect to
the Loans or the Commitment assigned; (iii) any assignment of a Commitment must
be approved by the Administrative Agent and the L/C Issuer unless the Person
that is the proposed assignee is itself a Lender (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee) (each such consent not
to be unreasonably withheld); and (iv) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of

 

58

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

$3,500. Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05
with respect to facts and circumstances occurring prior to the effective date of
such assignment). Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

 

(c) The Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

 

(d) Any Lender may at any time, without the consent of, or notice to, the
Borrower or the Administrative Agent, sell participations to any Person (other
than a natural person or the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender’s participations in L/C
Obligations) owing to it); provided that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section 10.01
that directly affects such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.09 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.12 as though it were a
Lender.

 

(e) A Participant shall not be entitled to receive any greater payment under
Section 3.01 or 3.04 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 10.15 as though
it were a Lender.

 

59

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

(f) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement (including under its Note, if
any) to secure obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

 

(g) As used herein, the following terms have the following meanings:

 

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent and the L/C Issuer, and (ii) unless an Event of
Default has occurred and is continuing, the Borrower (each such approval not to
be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include the Borrower or any of the
Borrower’s Affiliates or Subsidiaries.

 

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

(h) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle identified as
such in writing from time to time by the Granting Lender to the Administrative
Agent and the Borrower (an “SPC”) the option to provide all or any part of any
Loan that such Granting Lender would otherwise be obligated to make pursuant to
this Agreement; provided that (i) nothing herein shall constitute a commitment
by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such
option or otherwise fails to make all or any part of such Loan, the Granting
Lender shall be obligated to make such Loan pursuant to the terms hereof. Each
party hereto hereby agrees that (i) neither the grant to any SPC nor the
exercise by any SPC of such option shall increase the costs or expenses or
otherwise increase or change the obligations of the Borrower under this
Agreement (including its obligations under Section 3.04), (ii) no SPC shall be
liable for any indemnity or similar payment obligation under this Agreement for
which a Lender would be liable, and (iii) the Granting Lender shall for all
purposes, including the approval of any amendment, waiver or other modification
of any provision of any Loan Document, remain the lender of record hereunder.
The making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement) that,
prior to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior debt of any SPC, it will not
institute against, or join any other Person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding
under the laws of the United States or any State thereof. Notwithstanding
anything to the contrary contained herein, any SPC may (i) with notice to, but
without prior consent of the Borrower and the Administrative Agent and without
paying any processing fee therefor, assign all or any portion of its right to
receive payment with respect to any Loan to the Granting Lender and (ii)
disclose on a confidential basis any non-public information relating to its
funding of Loans to any rating agency, commercial paper dealer or provider of
any surety or Guarantee or credit or liquidity enhancement to such SPC.

 

60

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

(i) Notwithstanding anything to the contrary contained herein, if at any time
Bank of America assigns all of its Commitment and Loans pursuant to subsection
(b) above, Bank of America may, upon 30 days’ notice to the Borrower and the
Lenders, resign as L/C Issuer. In the event of any such resignation as L/C
Issuer, the Borrower shall be entitled to appoint from among the Lenders a
successor L/C Issuer hereunder; provided, however, that no failure by the
Borrower to appoint any such successor shall affect the resignation of Bank of
America as L/C Issuer. If Bank of America resigns as L/C Issuer, it shall retain
all the rights and obligations of the L/C Issuer hereunder with respect to all
Letters of Credit outstanding as of the effective date of its resignation as L/C
Issuer and all L/C Obligations with respect thereto (including the right to
require the Lenders to make Base Rate Loans or fund risk participations in
Unreimbursed Amounts pursuant to Section 2.03(c)).

 

10.08 Confidentiality. Each of the Administrative Agent and the Lenders agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its and its Affiliates’ directors,
officers, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential); (b) to the extent requested by any
regulatory authority; (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process; (d) to any other party
to this Agreement; (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any Eligible Assignee of
or Participant in, or any prospective Eligible Assignee of or Participant in,
any of its rights or obligations under this Agreement or (ii) any direct or
indirect contractual counterparty or prospective counterparty (or such
contractual counterparty’s or prospective counterparty’s professional advisor)
to any credit derivative transaction relating to obligations of the Borrower;
(g) with the consent of the Borrower; (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent or any Lender on a
nonconfidential basis from a source other than the Borrower; or (i) to the
National Association of Insurance Commissioners or any other similar
organization. In addition, the Administrative Agent and the Lenders may disclose
the existence of this Agreement and information about this Agreement to market
data collectors, similar service providers to the lending industry, and service
providers to the Administrative Agent and the Lenders in connection with the
administration and management of this Agreement, the other Loan Documents, the
Commitments, and the Credit Extensions. For the purposes of this Section,
“Information” means all information received from the Borrower relating to the
Borrower or its business, other than any such information that is available to
the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower; provided that, in the case of information received
from the Borrower after the date hereof, such information is clearly identified
in writing at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 

Notwithstanding anything herein to the contrary, the information subject to this
Section 10.08 shall not include, and the Administrative Agent, each Lender and
the Borrower may disclose without limitation of any kind, any information with
respect to the “tax treatment” and “tax structure” (in each case, within the
meaning of Treasury Regulation Section 1.6011-4) of the transactions
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are provided to the Administrative Agent, such Lender or the
Borrower relating to such tax treatment and tax structure; provided that with
respect to any document or similar item that in either case contains information
concerning the tax treatment or tax structure of the transactions as well as
other information, this sentence, in the case of the Administrative Agent and
each Lender, shall only apply to such portions of

 

61

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

the document or similar item that relate to the tax treatment or tax structure
of the Loans, Letters of Credit and transactions contemplated hereby.

 

10.09 Set-off. In addition to any rights and remedies of the Lenders provided by
law, upon the occurrence and during the continuance of any Event of Default,
each Lender and its Affiliates are authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender to or for
the credit or the account of the Borrower against any and all Obligations owing
to such Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not the Administrative Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in a
currency different from that of the applicable deposit or indebtedness. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent after
any such set-off and application made by such Lender or any of its Affiliates;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application.

 

10.10 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.

 

To the extent that the interest rate laws of the State of Texas are applicable
to the Loans for purposes of determining the “maximum rate” or the “maximum
amount,” then those terms mean the “weekly ceiling” from time to time in effect
under Texas Finance Code § 303.001, as limited by Texas Finance Code § 303.009,
and, to the extent that this Agreement is deemed an open end account as such
term is defined in Texas Finance Code Section 301.002(a)(14), the Lenders retain
the right to modify the interest rate in accordance with applicable law.

 

The parties agree that Texas Finance Code, Chapter 346, which regulates certain
revolving loan accounts and revolving triparty accounts, shall not apply to any
revolving loan accounts created under this Agreement or the Notes or maintained
in connection therewith.

 

10.11 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

10.12 Integration. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights or
remedies in favor of the Administrative Agent or the Lenders in any other Loan
Document shall not be deemed a conflict with this Agreement. Each Loan Document
was drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.

 

62

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

10.13 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

10.14 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

10.15 Tax Forms. (a) (i) Each Lender that is not a “United States person” within
the meaning of Section 7701(a)(30) of the Code (a “Foreign Lender”) shall
deliver to the Administrative Agent, prior to receipt of any payment subject to
withholding under the Code (or upon accepting an assignment of an interest
herein), two duly signed completed copies of either IRS Form W-8BEN or any
successor thereto (relating to such Foreign Lender and entitling it to an
exemption from, or reduction of, withholding tax on all payments to be made to
such Foreign Lender by the Borrower pursuant to this Agreement) or IRS Form
W-8ECI or any successor thereto (relating to all payments to be made to such
Foreign Lender by the Borrower pursuant to this Agreement) or such other
evidence satisfactory to the Borrower and the Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including any exemption pursuant to Section 881(c) of the Code.
Thereafter and from time to time, each such Foreign Lender shall (A) promptly
submit to the Administrative Agent such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to the Borrower and the Administrative Agent of
any available exemption from or reduction of, United States withholding taxes in
respect of all payments to be made to such Foreign Lender by the Borrower
pursuant to this Agreement, (B) promptly notify the Administrative Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction, and (C) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary (including the re-designation of its Lending Office) to
avoid any requirement of applicable Laws that the Borrower make any deduction or
withholding for taxes from amounts payable to such Foreign Lender.

 

(ii) Each Foreign Lender, to the extent it does not act or ceases to act for its
own account with respect to any portion of any sums paid or payable to such
Lender under any of the Loan Documents (for example, in the case of a typical
participation by such Lender), shall deliver to the Administrative Agent on the
date when such Foreign Lender ceases to act for its own account with respect to
any portion of any such sums paid or payable, and at such other times as may be
necessary in the determination of the Administrative Agent (in the reasonable
exercise of its discretion), (A) two duly signed completed copies of the forms
or statements required to be provided by such Lender as set forth above, to
establish the portion of any such sums paid or payable with respect to which
such Lender acts for its own account that is not subject to U.S. withholding
tax, and (B) two duly signed completed copies of IRS Form W-8IMY

 

63

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

(or any successor thereto), together with any information such Lender chooses to
transmit with such form, and any other certificate or statement of exemption
required under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such Lender.

 

(iii) The Borrower shall not be required to pay any additional amount to any
Foreign Lender under Section 3.01 (A) with respect to any Taxes required to be
deducted or withheld on the basis of the information, certificates or statements
of exemption such Lender transmits with an IRS Form W-8IMY pursuant to this
Section 10.15(a) or (B) if such Lender shall have failed to satisfy the
foregoing provisions of this Section 10.15(a); provided that if such Lender
shall have satisfied the requirement of this Section 10.15(a) on the date such
Lender became a Lender or ceased to act for its own account with respect to any
payment under any of the Loan Documents, nothing in this Section 10.15(a) shall
relieve the Borrower of its obligation to pay any amounts pursuant to Section
3.01 in the event that, as a result of any change in any applicable law, treaty
or governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Loan Documents is not
subject to withholding or is subject to withholding at a reduced rate.

 

(iv) The Administrative Agent may, without reduction, withhold any Taxes
required to be deducted and withheld from any payment under any of the Loan
Documents with respect to which the Borrower is not required to pay additional
amounts under this Section 10.15(a).

 

(b) Upon the request of the Administrative Agent, each Lender that is a “United
States person” within the meaning of Section 7701(a)(30) of the Code shall
deliver to the Administrative Agent two duly signed completed copies of IRS Form
W-9. If such Lender fails to deliver such forms, then the Administrative Agent
may withhold from any interest payment to such Lender an amount equivalent to
the applicable back-up withholding tax imposed by the Code, without reduction.

 

(c) If any Governmental Authority asserts that the Administrative Agent did not
properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender, such Lender shall
indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the termination of the Aggregate Commitments,
repayment of all other Obligations hereunder and the resignation of the
Administrative Agent.

 

10.16 Governing Law.

 

(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH
LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS SITTING IN
HOUSTON, TEXAS OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF

 

64

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

THOSE COURTS. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE
AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.

 

10.17 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

10.18 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

10.19 Termination of Existing Credit Agreement. The commitments of the Existing
Lenders under the Existing Credit Agreement shall terminate on the Closing Date.
Execution of this Agreement by Lenders who are Existing Lenders shall constitute
a waiver of the notice provisions in Section 2.05 of the Existing Credit
Agreement that would otherwise be applicable to such termination.

 

65

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

ONEOK, INC.

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

BANK OF AMERICA, N.A., as

a Lender and L/C Issuer

By:

 

/s/

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

   

      Michelle A. Schoenfeld

      Principal

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

BANK OF AMERICA, N.A., as

Administrative Agent

By:

 

/s/

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

   

      Michelle A. Schoenfeld

      Principal

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

BANK ONE, NA, as

a Lender

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

WACHOVIA BANK, National Association, as

a Lender

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

ABN AMRO BANK N.V., as

a Lender

By:  /s/

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

Name:

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

Title:

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

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

CITIBANK, N.A., as

a Lender

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

THE ROYAL BANK OF SCOTLAND PLC, as

a Lender

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

SUNTRUST BANK, as

a Lender

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

UBS AG, CAYMAN ISLANDS BRANCH, as

a Lender

By:  /s/

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

Name:

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

Title:

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

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

BANK OF OKLAHOMA, N.A., as

a Lender

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

JPMORGAN CHASE BANK, as

a Lender

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

WESTLB AG

NEW YORK BRANCH, as

a Lender

By:  /s/

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

Name:

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

Title:

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

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

KBC BANK N.V., as

a Lender

By:  /s/

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

Name:

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

Title:

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

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

SUMITOMO MITSUI BANKING CORPORATION, as

a Lender

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

UNION BANK OF CALIFORNIA, N.A., as

a Lender

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

UMB BANK, n.a., as

a Lender

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

ARVEST BANK, as

a Lender

By:  /s/

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

Name:

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

Title:

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

 

[Signature Page to ONEOK 364-Day Credit Agreement]

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

SCHEDULE 1.01

 

EXISTING SALE AND

LEASEBACK TRANSACTIONS

 

ONEOK Leasing Company, a Delaware corporation and wholly-owned subsidiary of
ONEOK, Inc. (as Lessee), entered into a Sublease with RMZ Corporation, a
Delaware corporation (as Lessor), dated as of May 15, 1983, as amended by a
First Amendment to Lease dated as of October 1, 1984.

 

Schedule 1.01 – Page 1

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

SCHEDULE 2.01

 

COMMITMENTS

AND PRO RATA SHARES

 

Lender

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

     Commitment

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

     Pro Rata Share

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

 

Bank of America, N.A.

     $ 85,000,000      10.000000000 %

Bank One, N.A.

     $ 80,000,000      9.411764700 %

Wachovia Bank, National Association

     $ 80,000,000      9.411764700 %

ABN AMRO Bank N.V.

     $ 80,000,000      9.411764700 %

Citibank, N.A.

     $ 80,000,000      9.411764700 %

The Royal Bank of Scotland PLC

     $ 65,000,000      7.647058800 %

SunTrust Bank

     $ 65,000,000      7.647058800 %

UBS AG, Cayman Islands Branch

     $ 65,000,000      7.647058800 %

Bank of Oklahoma, N.A.

     $ 50,000,000      5.882352900 %

JPMorgan Chase Bank

     $ 50,000,000      5.882352900 %

West LB AG

New York Branch

     $ 50,000,000      5.882352900 %

KBC Bank N.V.

     $ 25,000,000      2.941176500 %

Sumitomo Mitsui Banking Corporation

     $ 25,000,000      2.941176500 %

Union Bank of California, N.A.

     $ 25,000,000      2.941176500 %

UMB Bank, n.a.

     $ 20,500,000      2.411764700 %

Arvest Bank

     $ 4,500,000      0.529411800 %

Total

     $ 850,000,000      100.000000000 %

 

Schedule 2.01 – Page 1

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

SCHEDULE 5.13

 

SUBSIDIARIES

AND OTHER EQUITY INVESTMENTS

 

Part (a).   Subsidiaries.

 

ALPHA Transmission Company

Energia Estrella de Sur, S.A. de C.V.

Kansas Gas Marketing Company

Kansas Gas Service Company

Kansas Gas Supply Corporation

Market Center Gathering, Inc.

Mercado Gas Services Inc.

Mid Continent Market Center, Inc.

Norteño Pipeline Company

Oasis Acquisition Corporation

Oklahoma Natural Energy Services Company

OkTex Pipeline Company

ONEOK Bushton Processing, Inc.

ONEOK Energy International, Inc.

ONEOK Energy Marketing and Trading Company, II

ONEOK Energy Marketing and Trading Company, L.P.

ONEOK Energy Marketing Company

ONEOK Energy Marketing Holdings, Inc.

ONEOK Energy Resources Company

ONEOK Field Services Company

ONEOK Field Services Holdings, Inc.

ONEOK Field Services Transmission, L.L.C.

ONEOK Gas Gathering, L.L.C.

ONEOK Gas Processing, L.L.C.

ONEOK Gas Storage Holdings, Inc.

ONEOK Gas Storage, L.L.C.

ONEOK Gas Transportation, L.L.C.

ONEOK International Investments, Inc.

ONEOK International, Inc.

ONEOK Kansas Company

ONEOK Leasing Company

ONEOK Midstream Gas Supply, L.L.C.

ONEOK NGL Marketing, L.P.

ONEOK Palo Duro Pipeline Company, Inc.

ONEOK Parking Company

ONEOK Propane Company

ONEOK Sayre Storage Company

ONEOK Services Company

ONEOK Technology Company

ONEOK Texas Field Services, L.P.

ONEOK Texas Gas Storage, L.P.

ONEOK Texas Resources, Inc.

ONEOK Transmission Company

 

Schedule 5.13 – Page 1

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

ONEOK WesTex Gas Pipeline, Inc.

ONEOK WesTex Transmission, L.P.

TGS Rio, L.L.C.

 

Part (b).   Other Equity Investments.

 

Blue Moon Holdings, L.L.C. (50%)

Compañia Nacional de Gas S.A. de C.V. (43.29%)

Construcciones, Instalaciones y Asesorías, S.A. de C.V. (43.29%)

Fox Plant, L.L.C. (50%)

Gas Servicios Del Norte de Mexico S. De R.L. De C.V. (43.29%)

Materiales y Aparatos, S.A. de C.V. (48%)

Potato Hills Gas Gathering System (joint venture) (50%)

Salart, S.A. de C.V. (42.02%)

Servicios Corporativos Phenix, S.C. (43.29%)

Sycamore Gas System (general partnership) (48.445%)

 

Schedule 5.13 – Page 2

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

SCHEDULE 10.02

 

ADMINISTRATIVE AGENT’S OFFICE,

CERTAIN ADDRESSES FOR NOTICES

 

BORROWER:

 

ONEOK, Inc.

100 West Fifth Street

Tulsa, Oklahoma 74102-0871

Attn:   James C. Kneale

Senior Vice President, Chief Financial Officer and Treasurer

Phone:   (918) 588-7912

Fax:   (918) 588-7971

Electronic Mail: jkneale@oneok.com

Website: http://www.oneok.com/

 

ADMINISTRATIVE AGENT:

 

Administrative Agent’s Office

(for payments and Requests for Credit Extensions):

Bank of America, N. A., as Administrative Agent

901 Main St. 14th Floor

Mail Code: TX1-492-14-12

Dallas, TX 75202-3714

Attn:   Ben Cosgrove

Credit Services Representative

Phone:   (214) 209-9254

Fax:   (214) 290-9439

Electronic Mail: ben.cosgrove@bankofamerica.com

 

Wiring Instructions

Bank of America, N.A.

ABA#: 111000012

Account No.: 1292000883

Attn: Credit Services

REF: ONEOK, Inc.

 

With a copy to:

 

Bank of America, N.A.

101 South Tryon Street

Charlotte, NC 28255

Attn:   Michelle A. Schoenfeld

Principal

Phone:   (704) 386-1432

Fax:   (704) 386-1319

Electronic Mail: michelle.a.schoenfeld@bankofamerica.com

 

Schedule 10.02 – Page 1

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

Other Notices as Administrative Agent:

 

Bank of America, N.A.

101 South Tryon Street

Charlotte, NC 28255

Attn:   Michelle A. Schoenfeld

Principal

Phone:   (704) 386-1432

Fax:   (704) 386-1319

Electronic Mail: michelle.a.schoenfeld@bankofamerica.com

 

L/C ISSUER:

 

Bank of America, N.A.

Trade Operations-Los Angeles #22621

333 S. Beaudry Avenue, 19th Floor

Mail Code: CA9-703-19-23

Los Angeles, CA 90017-1466

Attn:   Sandra Leon

Vice President

Phone:   (213) 345-5231

Fax:   (213) 345-0265

Electronic Mail: Sandra.Leon@bankofamerica.com

 

Schedule 10.02 – Page 2

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

EXHIBIT A

 

FORM OF LOAN NOTICE

 

Date:                     ,         

 

To:   Bank of America, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of September 22,
2003 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein being used
herein as therein defined), among ONEOK, Inc., an Oklahoma corporation (the
“Borrower”), the Lenders from time to time party thereto, and Bank of America,
N.A., as Administrative Agent and L/C Issuer.

 

The undersigned hereby requests (select one):

¨ A Borrowing of Loans                                             ¨ A
conversion or continuation of Loans

1.

  

On                                         
                                                   (a Business Day).

2.

  

In the amount of $                                        
                       .

3.

  

Comprised of                                         
                               .

    

                                    [Type of Loan requested]

4.

  

For Eurodollar Rate Loans: with an Interest Period of      months.

 

[For Borrowings: The Borrowing requested herein complies with the proviso to the
first sentence of Section 2.01 of the Agreement.]

 

[BORROWER]

By:  

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

Name:

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

Title:

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

 

A - 1

Form of Loan Notice

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

EXHIBIT B

 

FORM OF NOTE

 

___________________

 

FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to
                                     or registered assigns (the “Lender”), in
accordance with the provisions of the Agreement (as hereinafter defined), the
principal amount of each Loan from time to time made by the Lender to the
Borrower under that certain Credit Agreement, dated as of September 22, 2003 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Agreement;” the terms defined therein being used herein as
therein defined), among the Borrower, the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent and L/C Issuer.

 

The Borrower promises to pay interest on the unpaid principal amount of each
Loan from the date of such Loan until such principal amount is paid in full, at
such interest rates and at such times as provided in the Agreement. All payments
of principal and interest shall be made to the Administrative Agent for the
account of the Lender in Dollars in immediately available funds at the
Administrative Agent’s Office. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.

 

This Note is one of the Notes referred to in the Agreement, is entitled to the
benefits thereof and may be prepaid in whole or in part subject to the terms and
conditions provided therein. Upon the occurrence and continuation of one or more
of the Events of Default specified in the Agreement, all amounts then remaining
unpaid on this Note shall become, or may be declared to be, immediately due and
payable all as provided in the Agreement. Loans made by the Lender shall be
evidenced by one or more loan accounts or records maintained by the Lender in
the ordinary course of business. The Lender may also attach schedules to this
Note and endorse thereon the date, amount and maturity of its Loans and payments
with respect thereto.

 

This Note is a Loan Document and is subject to Section 10.10 of the Agreement,
which is incorporated herein by reference the same as if set forth herein
verbatim.

 

The Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Note.

 

B - 1

Form of Notice

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

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

ONEOK, Inc.

By:  

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

Name:

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

Title:

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

 

B - 2

Form of Notice

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

LOANS AND PAYMENTS WITH RESPECT THERETO

 

Date

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

  

Type of Loan
Made

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

  

Amount of

Loan Made

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

  

End of

Interest

Period

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

  

Amount of

Principal or

Interest Paid

This Date

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

  

Outstanding

Principal

Balance This

Date

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

  

Notation

Made By

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

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

  

_____________

 

B - 3

Form of Notice

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

EXHIBIT C

 

FORM OF COMPLIANCE CERTIFICATE

 

Financial Statement Date:                     ,         

 

To:   Bank of America, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of September 22,
2003 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein being used
herein as therein defined), among ONEOK, Inc., an Oklahoma corporation (the
“Borrower”), the Lenders from time to time party thereto, and Bank of America,
N.A., as Administrative Agent and L/C Issuer.

 

The undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the                                                           of the
Borrower, and that, as such, he/she is authorized to execute and deliver this
Certificate to the Administrative Agent on the behalf of the Borrower, and that:

 

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

 

1. The year-end audited financial statements required by Section 6.01(a) of the
Agreement for the fiscal year of the Borrower ended as of the above date,
together with the report and opinion of an independent certified public
accountant required by such section

 

[select one:]

 

[are attached hereto as Schedule 1]

 

—or—

 

[are available in electronic format and have been delivered pursuant to Section
6.02 of the Agreement].

 

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

 

1. The unaudited financial statements required by Section 6.01(b) of the
Agreement for the fiscal quarter of the Borrower ended as of the above date

 

[select one:]

 

[are attached hereto as Schedule 1]

 

—or—

 

[are available in electronic format and have been delivered pursuant to Section
6.02 of the Agreement].

 

Such financial statements fairly present the financial condition, results of
operations and cash flows of the Borrower and its Subsidiaries in accordance
with GAAP as at such date and for such period, subject only to normal year-end
audit adjustments and the absence of footnotes.

 

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

 

C - 1

Form of Compliance Certificate

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

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

 

[select one:]

 

[to the best knowledge of the undersigned during such fiscal period, the
Borrower performed and observed each covenant and condition of the Loan
Documents applicable to it.]

 

—or—

 

[the following covenants or conditions have not been performed or observed and
the following is a list of each such Default and its nature and status:]

 

4. Since the date of the Audited Financial Statements (a) there has been no
event or circumstance, either individually or in the aggregate, that could
reasonably be expected to have a Material Adverse Effect [except: (describe
exception, if any], and (b) there has been no event or circumstance, either
individually or in the aggregate, that has had a Material Adverse Effect.

 

5. The representations and warranties of the Borrower contained in Article V of
the Agreement, or which are contained in any document furnished at any time
under or in connection with the Loan Documents, are true and correct on and as
of the date hereof, except (a) that to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, (b) for purposes of this Compliance
Certificate, the representations and warranties contained in subsections (a) and
(b) of Section 5.05 of the Agreement shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of Section
6.01 of the Agreement, including the statements in connection with which this
Compliance Certificate is delivered, and (c) the representations and warranties
contained in Section 5.05(c) of the Agreement are made as of the date hereof to
the extent set forth in paragraph 4 of this Compliance Certificate.

 

6. The financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date of this Certificate.

 

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

 

ONEOK, Inc.

By:  

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

Name:

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

Title:

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

 

C - 2

Form of Compliance Certificate

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

                        (“Statement Date”)

 

SCHEDULE 2

to the Compliance Certificate

($ in 000’s)

 

Section 7.09 – Debt to Capital.    

A.

  

Consolidated Total Indebtedness at Statement Date (sum of Lines A.1. through
A.8.):

   $                             

1.

   the outstanding principal amount of all obligations for borrowed money and
all obligations
evidenced by bonds, debentures, notes, loan agreements or other similar
instruments    $                                   a.   

Less: 75% of the principal amount of Pledged Notes and Convertibles, not to
exceed 10%
of Total Capital (this amount is the “Qualifying Amount of Pledged Notes and
Convertibles”)

   -$                                        (i)   indicate outstanding
principal amount of Pledged Notes: $                                            
(ii)   indicate outstanding principal amount of Convertibles*:
$                                                 (iii) 10% of Total Capital
equals $                                        b.    Less: 75% of the principal
amount of Subordinated Securities*, not to exceed an amount
equal to (x) 15% of Total Capital minus (y) the Qualifying Amount of Pledged
Notes and
Convertibles (taken from line A.1.a. above)    -$                               
       

(i)

 

indicate outstanding principal amount of Subordinated Securities:
$                    

                   *Note: If there are any Convertibles or Subordinated
Securities, attach a separate schedule
showing for each, the date of issuance and outstanding principal amount.       
      

2.

   direct or contingent obligations arising under letters of credit, bankers’
acceptances, bank
guaranties, surety bonds and similar instruments    $                          
  

3.

   obligations in respect of the deferred purchase price of property or services
(other than trade
accounts payable in the ordinary course of business)    $                      
      

4.

   Swap Termination Value under any Swap Contract (excluding commodity swap
transaction,
commodity options and forward commodity contracts)    $                        
    

5.

   indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being
purchased by such Person (including indebtedness arising under conditional sales
or other title
retention agreements), whether or not such indebtedness shall have been assumed
by such
Person or is limited in recourse    $                             

6.

   Attributable Indebtedness in respect of capital leases and Synthetic Lease
Obligations    $                    

 

C - 3

Form of Compliance Certificate

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

          7.    Off-Balance Sheet Liabilities (other than those listed in Line
A.6.)    $                               8.    without duplication, all
Guarantees with respect to outstanding Indebtedness of the types specified in
Lines A.1. through A.7. above of Persons other than the Borrower or any
Subsidiary    $                         

B.

  

Consolidated Net Worth at Statement Date:

(sum of Lines B.1. through B.2.):

   $                               1.    Consolidated Net Worth at Statement
Date on the Balance Sheet    $                               2.    Plus the sum
of (a) the “Qualifying Amount of Pledged Notes and Convertibles” (taken from
line A.1.a. above) plus (b) the “Qualifying Amount of Subordinated Securities”
(taken from line A.1.b. above):    $                         

C.

  

Total Capital at Statement Date:

(Lines A + B)

   $                         

D.

  

Debt to Capital at Statement Date:

(Line A ÷ Line C) (cannot exceed 0.675)

   $                          Section 7.04 – Restricted Payments.          

A.

   Section 7.04(c) Repurchases and Reissuances:                1.    Did the
Borrower purchase, redeem or otherwise acquire shares of its common stock or
other common equity interests or warrants or options to acquire any such shares
with the proceeds received from the substantially concurrent issue of new shares
of its common stock or other common equity interests during the subject quarter
   Yes / No           2.    If Yes, indicate amount paid   
$                               3.    If Yes, please list the dates of each such
acquisition and issuance    (please attach a schedule)     

B.

   Sections 7.04(d) and 7.08(c) Westar Repurchases:                1.    Did the
Borrower purchase, on or after September 22, 2003, any shares of capital stock
from Westar during the subject quarter    Yes / No           2.    If Yes,
indicate amount paid    $                               3.    Have the proceeds
of any Credit Extension been used to fund the purchase of any shares of capital
stock from Westar since the Closing Date    Yes / No

 

C - 4

Form of Compliance Certificate

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

          4.    If Yes, indicate amount of proceeds used for the repurchase(s)
in Line B.3. (must be less than $300,000,000)    $                          C.
   Section 7.04(e) Repurchases for Existing Plans:                1.    Did the
Borrower purchase, redeem or otherwise acquire, on or after September 22, 2003,
shares of its common stock during the subject quarter, which shares will be used
to fund Existing Plans    Yes / No           2.    If Yes, indicate amount of
shares repurchased since September 22, 2003 (cannot exceed 4,000,000)   
  _________      D.    Section 7.04(f) Dividends and Stock Repurchases:       
        1.    Did the Borrower declare or pay cash dividends to its stockholders
or purchase, redeem or otherwise acquire shares of its capital stock or
warrants, rights or options to acquire any such shares for cash after August 31,
1998    Yes / No           2.    If Yes, indicate amount paid (excluding share
repurchases permitted by Sections 7.04(c), (d) and (e) of the Credit Agreement)
   $                               3.    Sum of 100% of net income of the
Borrower and its Subsidiaries arising after August 31, 1998 plus $125,000,000   
$                               4.    Is the value in Line D.3. greater than the
value in Line D.2.?    Yes / No

 

C - 5

Form of Compliance Certificate

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

EXHIBIT D

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor (including, without limitation, Letters of Credit)
and (ii) to the extent permitted to be assigned under applicable law, all
claims, suits, causes of action and any other right of the Assignor (in its
capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

1.

  Assignor:                                                             

2.

  Assignee:                                                              [and is
an                     Affiliate/Approved Fund of [identify Lender]1]

3.

  Borrower:    ONEOK, Inc.

4.

  Administrative Agent:    Bank of America, N.A. as the administrative agent
under the Credit Agreement

5.

  Credit Agreement:    The Credit Agreement, dated as of September 22, 2003
among ONEOK, Inc., the Lenders parties thereto, and Bank of America, N.A., as
Administrative Agent and L/C Issuer, and the other agents parties thereto

 

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

1   Select as applicable.

 

D - 1

Form of Assignment and Assumption

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

6.   Assigned Interest:

 

Aggregate

Amount of

Commitment/Loans

for all Lenders

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

  

Amount of

Commitment/Loans

Assigned

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

  

Percentage

Assigned of

Commitment/Loans2

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

$                            

  

$                            

  

                            %

$                            

  

$                            

  

                            %

$                            

  

$                            

  

                            %

 

[7.   Trade Date:                     ]3

 

Effective Date:                     , 20     [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR [NAME OF ASSIGNOR]

By:

 

 

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

   

Title:

ASSIGNEE [NAME OF ASSIGNEE]

By:

 

 

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

   

Title:

 

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

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

3   To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

 

D - 2

Form of Assignment and Assumption

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

[Consented to and] Accepted:

[NAME OF ADMINISTRATIVE AGENT], as
Administrative Agent

By:

 

 

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

   

Title:

[Consented to:]

By:

 

 

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

   

Title:

 

D - 3

Form of Assignment and Assumption

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

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND ASSUMPTION

 

1. Representations and Warranties.

 

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

 

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it meets all
requirements of an Eligible Assignee under the Credit Agreement (subject to
receipt of such consents as may be required under the Credit Agreement), (iii)
from and after the Effective Date, it shall be bound by the provisions of the
Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 6.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Foreign Lender,
attached hereto is any documentation required to be delivered by it pursuant to
the terms of the Credit Agreement, duly completed and executed by the Assignee;
and (b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

 

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned interest (including payments of
principal, interest, fees and other amounts) to the Assignee whether such
amounts have accrued prior to or on or after the Effective Date. The Assignor
and the Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.

 

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

 

D - 4

Form of Assignment and Assumption

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

by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of Texas.

 

D - 5

Form of Assignment and Assumption

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

EXHIBIT E

 

FORM OF OPINION OF GABLE & GOTWALS

 

September 22, 2003

 

To:   Each of the Lenders, parties to the Credit Agreement, and Bank of America,
N.A., as Administrative Agent and as a Lender, and Letter of Credit Issuing
Lender

 

Ladies and Gentlemen:

 

We have acted as counsel to ONEOK, Inc., an Oklahoma corporation (the
“Company”), in connection with the Credit Agreement, dated as of September 22,
2003, (the “Credit Agreement”) among the Company, Bank of America, N.A., as
Administrative Agent (the “Administrative Agent”), and as a Lender and Letter of
Credit Issuing Lender, and the financial institutions who are parties thereto.
This opinion is being given to you pursuant to Section 4.01(a)(v) of the Credit
Agreement. Capitalized terms used herein but not defined herein shall have the
respective meanings set forth in the Credit Agreement.

 

In connection with this opinion, we have examined the following documents:

 

  a.   An executed copy of the Credit Agreement;

 

  b.   The Certificate of Incorporation of the Company, and all amendments
thereto (the “Company’s Charter”);

 

  c.   The by-laws of the Company and all amendments thereto (the “Company’s
Bylaws”); and

 

  d.   The other documents furnished by or on behalf of the Company pursuant to
Section 4.01 of the Credit Agreement.

 

We have also examined originals or copies, certified or otherwise identified to
our satisfaction, of such corporate records, agreements and other instruments,
and of certificates of comparable documents of public officials and of officers
and representatives of the Company as we have deemed relevant and necessary as
the basis for the opinions hereinafter set forth. In our examination of the
documents referred to above, we have assumed the due authorization, execution
and delivery of each document referred to above by all parties thereto other
than the Company, the authenticity of all documents submitted to us as original
documents, and the conformity to original documents of all documents submitted
to us as copies thereof.

 

Based upon the foregoing and upon such investigation as we have deemed
necessary, we are of the opinion that:

 

1.  

The Company and each of its Subsidiaries: (a) is a corporation, general
partnership, limited liability company or limited partnership duly organized or
formed, validly existing and in good standing under the Laws of the jurisdiction
of its incorporation or organization, (b) has all requisite power and authority
and, to the best of our knowledge, all requisite governmental licenses,
authorizations, consents and approvals to (i) own its assets and carry on its
business and (ii) execute, deliver and perform its obligations under the Loan
Documents to which it is a party,

 

E - 1

Form of Opinion of Gable and Gotwals

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

 

(c) is, to the best of our knowledge, duly qualified and is licensed and in good
standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and (d) is in material compliance with all material
Requirements of Law to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.

 

2.   The execution, delivery and performance by the Company of the Credit
Agreement and the other Loan Documents have been duly authorized by all
necessary corporate action and do not and will not: (a) contravene the terms of
the Company’s Charter, the Company’s Bylaws or other organization documents; (b)
conflict with or result in any breach or contravention of, or the creation of
any Lien under, (i) any material Contractual Obligation to which the Company is
a party or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which the Company or its property is subject;
or (c) violate any material Requirement of Law. The Credit Agreement and the
other Loan Documents has been duly executed and delivered by the Company.

 

3.   No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority is necessary or required
in connection with the execution, delivery, performance or enforcement against
the Company of the Credit Agreement or any other Loan Document or any other
instrument or agreement required hereto to be made by the Company, or any
Extension of Credit thereunder.

 

4.   As long as the interest charged under the Credit Agreement and Notes does
not exceed 45% per annum calculated according to the actuarial method, the
Extensions of Credit, as evidenced by the Credit Agreement and the other Loan
Documents, are not usurious under applicable usury laws of the State of
Oklahoma.

 

5.   We believe that the choice of law provision set forth in the Credit
Agreement and the other Loan Documents wherein the parties agree that the laws
of the State of Texas shall govern and control the terms of the Credit Agreement
and the other Loan Documents (except as otherwise specifically provided therein)
should be the enforceable choice of law under the laws of the State of Oklahoma
except to the extent that this choice of law would conflict with the public
policy of the State of Oklahoma. You should be aware that this opinion is
limited by the fact that no Oklahoma case since statehood has considered this
direct issue and a contrary decision could be entered by an Oklahoma Court. In
reaching the foregoing opinion, we have assumed, with your permission, that the
signature pages to the Credit Agreement and other Loan Documents were delivered
to the Administrative Agent in Texas, that all requests for Extensions of Credit
will be made to the Administrative Agent’s office in Texas, and that all
payments by the Company will be made at the Administrative Agent’s office in
Texas.

 

6.   To the best of our knowledge, there are no actions, suits, proceedings,
claims or disputes pending, threatened or contemplated at law, in equity, in
arbitration or before any Governmental Authority, against the Company, or its
Subsidiaries or any of their respective properties (“Claims”) which purport to
affect or pertain to the Credit Agreement, or any of the transactions
contemplated thereby; and, to the best of our knowledge, there are no material
Claims which, if determined adversely to the Company, or its Subsidiaries, might
have a Material Adverse Effect. To the best of our knowledge, no injunction,
writ, temporary restraining order or any order of any nature has been issued by
any court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery and performance of the Credit Agreement, or directing that
the transactions provided for herein or therein not be consummated as herein or
therein provided.

 

E - 2

Form of Opinion of Gable and Gotwals

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

7.   To our knowledge, neither the Company nor any of its Subsidiaries is a
party to or bound by any Contractual Obligation that has been breached which
could reasonably be expected to have a Material Adverse Effect on the Company.
In addition, to our knowledge, neither the Company nor any of its subsidiaries
are subject to any charter or corporate resolution or any Requirement of Law
that has been breached which could reasonably be expected to have a Material
Adverse Effect on the Company.

 

8.   To the best of our knowledge, the Company and each of its Subsidiaries has
obtained all material licenses, permits, authorizations and registrations
required under any Environmental Law (“Environmental Permits”) where failure to
do so would have a Material Adverse Effect, and all such Environmental Permits
are in good standing, and the Company and each of its Subsidiaries is in
material compliance with all terms and conditions of such Environmental Permits.

 

9.   Neither the Company, any Person controlling the Company, nor any
Subsidiaries of the Company, is (a) an “Investment Company” within the meaning
of the Investment Company Act of 1940; or (b) subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code or any other Federal or
state statute or regulation limiting its ability to incur Indebtedness.

 

10.   The consummation of the transaction contemplated by the Credit Agreement
and the other Loan Documents, and the Extending of Credit thereunder, will not
violate Regulations U or X of the Federal Reserve Board.

 

The foregoing opinions are subject to the following qualification:

 

The qualification of any opinion herein by the use of the words “to the best of
our knowledge” means that during the course of representation as described in
this opinion letter, no information has come to the attention of the attorneys
in this firm involved in the transaction described in or contemplated by the
Credit Agreement which would give such attorneys current actual knowledge of the
existence of the matters so qualified. Except as specifically noted in this
opinion, we have not (i) made any independent review or special investigation
concerning any agreements, instruments, encumbrances, orders, judgments, or
decrees by which the Company may be specifically bound, or (except with respect
to the general application of Oklahoma laws, rules and regulations) any laws,
rules or other regulations by which the Company may be bound; (ii) made any
independent investigation as to the existence of any litigation, tax claims,
actions, suits, investigations or disputes, if any, pending or threatened
against the Company; or (iii) made any other independent investigation of
factual matters.

 

Our opinions expressed above are limited to the current status of the laws of
the State of Oklahoma and the Federal laws of the United States of America,
except that for purposes of our opinion in paragraph 3, the term “Governmental
Authority” includes Governmental Authorities under the United States federal
laws and Governmental Authorities in the states of Texas, Kansas, and Oklahoma,
and we undertake no responsibility to update or supplement this opinion in
response to subsequent changes in the law or future events affecting the
transactions contemplated by the Credit Agreement and Loan Documents. This
opinion is not to be used, circulated, relied upon or referred to in connection
with any transaction other than the transaction evidenced by the Credit
Agreement and Loan Documents or by any persons not expressly mentioned herein.
We acknowledge that the Administrative Agent and the Lenders are relying on the
opinions expressed herein in agreeing to enter into the Credit Agreement and to
extend credit under the terms of the Credit Agreement and the other Loan
Documents. We hereby consent to reliance by the Administrative Agent and the
Lenders, now or hereafter parties to the Credit Agreement on the opinions
expressed herein.

 

E - 3

Form of Opinion of Gable and Gotwals

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

Very truly yours,

GABLE & GOTWALS

By:

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

                John R. Barker

 

E - 4

Form of Opinion of Gable and Gotwals

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

EXHIBIT F

 

FORM OF OPINION OF LOCKE LIDDELL & SAPP LLP

 

September 22, 2003

 

Bank of America, N.A., as Administrative Agent

901 Main Street

Dallas, TX 75202-3714

 

Ladies and Gentlemen:

 

We have acted as special Texas counsel to ONEOK, Inc. (the “Company”) in
connection with the 364-Day Credit Agreement (the “Credit Agreement”) of even
date herewith among the financial institutions (collectively, the “Lenders”)
party thereto; the Company, and Bank of America, N.A., as Administrative Agent
(in such capacity, the “Administrative Agent”) for the Lenders. In such capacity
we have reviewed originals, or copies certified or otherwise identified to our
satisfaction, of only the Credit Agreement.

 

We are rendering this opinion to you pursuant to Section 4.01(a)(vi) of the
Credit Agreement.

 

We advise you that we represent the Company in connection with this transaction
only. We are not generally familiar with the affairs, business, assets,
properties or agreements of the Company. There may be many matters of a legal
nature concerning the Company about which we have not been consulted and
concerning which we have no knowledge.

 

Assumptions

 

We have assumed, with your approval, that (a) each of the parties (collectively,
the “Parties”) to the Credit Agreement (1) is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and (2) has the power, authority and all necessary governmental
licenses, authorizations, consents and approvals to execute, deliver and perform
is obligations under the Credit Agreement; (b) the execution, delivery and
performance by each Party of the Credit Agreement (1) have been duly authorized
by all necessary action on the part of such Party and (2) do not and will not
(A) contravene the terms of its charter, bylaws or other organizational
documents or (B) violate any law (statutory or common), treaty, rule or
regulation or determination of an arbitrator or of a governmental authority
applicable to such Party; (c) the Parties have duly executed and delivered the
Credit Agreement, for value received; (d) the Credit Agreement is the valid and
binding obligation of each Party other than the Company (each such Party, an
“Other Party”), enforceable against such Other Party in accordance with its
terms; (e) the representations and warranties made in the Credit Agreement with
respect to all factual matters are true and complete in all respects; (f) each
of the Other Parties and their respective agents have acted in good faith; each
of the Other Parties has complied with all legal requirements pertaining to its
status as such status relates to its rights to enforce the Credit Agreement
against the Company, and (g) no registration, consent, approval, license or
authorization by, or notice to or filing with any person or governmental
authority is required in connection with the execution, delivery or performance
of the Credit Agreement by any Other Party.

 

F - 1

Form of Opinion of Locke Liddell & Sapp LLP

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

Additionally, we have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to us
as originals, the conformity to authentic original documents of all documents
submitted to us as copies or facsimiles and the authenticity of the originals of
such latter documents.

 

We have further assumed that (1) no Other Party has made or will make any
distribution of any rights under the Credit Agreement which would violate
federal or state securities laws; (2) all terms, provisions and conditions of,
or relating to, the transactions contemplated by the Credit Agreement are
correctly and completely embodied therein; (3) there is no usage of trade or
course of prior dealing that would, in either case, define, supplement or
qualify the terms of the Credit Agreement; (4) the constitutionality or validity
of a relevant statute, rule, regulation or agency action is not an issue unless
a reported decision in a jurisdiction within the scope of this opinion has
specifically addressed but not resolved, or has established, its
unconstitutionality or invalidity; (5) the Company will obtain all permits and
governmental approvals required in the future, and take all actions similarly
required, relevant to subsequent consummation of the transaction or performance
of the Credit Agreement; (6) the Parties will act in accordance with, and will
refrain from taking any action that is forbidden by, the terms and conditions of
the Credit Agreement; (7) there has not been any mutual mistake of fact,
misunderstanding, fraud, duress or undue influence; (8) each of the Other
Parties has acted without notice of any defense against the enforcement of any
right created by the Credit Agreement, and (9) all remedies under the Credit
Agreement will be exercised in a commercially reasonable manner and without
breach of the peace.

 

Opinion

 

Based on the foregoing, and having due regard for such legal considerations as
we deem relevant, and subject to the limitations, qualifications and exceptions
set forth herein, we are of the opinion that the Credit Agreement constitutes,
under the laws of the State of Texas, the legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms.

 

Qualifications and Exceptions

 

This opinion is subject to and qualified in all respects by the following:

 

The validity and enforceability of the Credit Agreement may be limited by
bankruptcy (including but not limited to preference, fraudulent conveyance and
fraudulent transfer provisions), insolvency, reorganization, rearrangement,
moratorium, liquidation, probate, conservatorship and other similar laws
(including court decisions) now or hereafter in effect and affecting the rights
of creditors generally; by general principles of equity (regardless of whether
such validity and enforceability is considered in a proceeding in equity or at
law) and by judicial discretion.

 

We express no opinion as to whether a court would grant specific performance or
any other equitable remedy with respect to the Credit Agreement or any
particular remedy under the Credit Agreement as opposed to any other remedy
available under the Credit Agreement, at law or in equity.

 

We express no opinion as to any of the following:

 

  (1)  

The validity or enforceability of provisions which relate to self-help, or which
purport to (a) restrict transfer of title to (or further liens on) property; (b)
restrict access to or waive legal or equitable remedies or access to courts,
including but not limited to the waiver of the right to trial by jury; (c)
affect or confer jurisdiction or venue; (d) waive any rights to notices; (e)
establish penalties, or (f) permit the Administrative Agent or any Lender to

 

F - 2

Form of Opinion of Locke Liddell & Sapp LLP

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

 

act in its sole discretion or to be exculpated from liability for its actions to
the extent not permitted by law.

 

  (2)   The validity or enforceability of provisions relating to delay or
omission of enforcement of rights or remedies, election of remedies, waiver of
defenses or causes of action, waiver of obligations of good faith, fair dealing,
diligence and reasonableness, ratification of future acts, the irrevocable
appointment of attorneys-in-fact or other agents, survival or severability.

 

  (3)   The validity or enforceability of usury savings clauses or whether the
fees, charges and interest paid and contracted to be paid pursuant to the Credit
Agreement constitute or may constitute usury.

 

  (4)   The validity or enforceability of any indemnification or contribution
provision contained in the Credit Agreement.

 

  (5)   The effect on the opinions herein stated of (1) the compliance or
non-compliance of any Other Party with any law, rule or regulation applicable to
it or (2) the legal or regulatory status or the nature of the business of any
Other Party.

 

  (6)   The validity or enforceability of provisions which purport to vary any
rights or duties under the Texas Business and Commerce Code (the “Texas UCC”)
except to the extent any such variance is expressly authorized by the Texas UCC.

 

  (7)   The right of any Other Party to set-off against funds held in any
account maintained with such Other Party by the Company and which account is
designated, or contains funds that such Other Party is aware have been set
aside, for special purposes, such as payroll, trust and escrow accounts, or
which funds are subject to special agreement between such Other Party and the
Company precluding or limiting rights to set-off funds.

 

  (8)   Laws, regulations and policies concerning national and local emergency,
possible judicial deference to acts of sovereign states, and civil and criminal
forfeiture laws.

 

The opinions set forth above relate only to laws, rules and regulations which in
our experience are normally directly applicable to the Company and transactions
of the type provided for in the Credit Agreement, excluding any law, rule or
regulation relating to (a) pollution or protection of the environment; (b)
zoning, land use, building or construction; (c) labor, employee rights and
benefits and occupational safety and health; (d) utility regulation; (e) tax,
litigation and other filings in the ordinary course of business, and (f)
taxation.

 

We express no opinion as to any law, rule, regulation, ordinance, code or
similar provision of law of any county, town, municipality, or similar political
subdivision or any agency or instrumentality thereof (such as, for example,
districts and authorities).

 

Our opinion as to validity and enforceability of the Credit Agreement is subject
to the qualification that certain provisions of the Credit Agreement are or may
be unenforceable in whole or in part under the laws of the State of Texas, but
the inclusion of such provisions does not affect the validity of the Credit
Agreement taken as a whole, and the Credit Agreement taken as a whole, together
with applicable law, contains adequate provisions for its enforcement and for
the practical realization of the rights and benefits afforded thereby, except
for the economic consequences of any delay occasioned thereby.

 

F - 3

Form of Opinion of Locke Liddell & Sapp LLP

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

We note that Section 2.03(a) of the Credit Agreement provides that the Company
pledges and grants a lien on a letter of credit cash collateral account and
certain related property in certain instances described in the Credit Agreement.
We understand that no funds are now on deposit in such account, and we express
no opinion as to the creation, perfection or priority of any security interest
in or lien on such account or any property related thereto.

 

General Matters

 

In rendering this opinion and with your concurrence, we have made no independent
investigation as to the accuracy or completeness of any representation,
warranty, data or other information, written or oral, that may have been made by
or on behalf of the Parties, and we have assumed in rendering this opinion that
none of such information, if any, contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements made, in
light of the circumstance in which they are made, not misleading. In that
connection and with your concurrence, we have not made any examination of any
technical, accounting or financial matters, or any matter requiring computation,
and express no opinion with respect thereto.

 

This opinion is limited in all respects to the laws of the State of Texas, in
each case as now in effect, which have been published and are generally
available in a format that makes legal research reasonably feasible and we
disclaim any responsibility to inform you of any changes. No opinion is
expressed as to any matter that may be governed by the laws of any other
jurisdiction.

 

This opinion is solely for the benefit of and may be relied upon only by the
Other Parties and their respective counsel in connection with the transactions
described in the Credit Agreement. This opinion may not be relied upon by any
Other Party or its counsel for any other purpose, or by any other entity or
individual for any purpose, in whole or in part, in each case without our
express prior written consent.

 

Very truly yours,

LOCKE LIDDELL & SAPP LLP

By:

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

                Lyman R. Paden, P.C.

 

F - 4

Form of Opinion of Locke Liddell & Sapp LLP