Exhibit 10.2

 

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SECOND AMENDED AND RESTATED

 

CREDIT AGREEMENT

 

dated as of

 

November 7, 2012

 

among

 

Southcross Energy Partners, L.P.,
as Borrower,

 

Wells Fargo Bank, N.A.,
as Administrative Agent,

 

Citibank, N.A. and SunTrust Bank,
as Co-Syndication Agents,

 

Barclays Bank PLC, JPMorgan Chase Bank, N.A., and Compass Bank,
as Co-Documentation Agents,

 

and

 

The Lenders Party Hereto

 

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Wells Fargo Securities, LLC
Sole Lead Arranger and Sole Bookrunner

 

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TABLE OF CONTENTS

 

Article I

Definitions and Accounting Matters

 

Section 1.01

Terms Defined Above

2

Section 1.02

Certain Defined Terms

2

Section 1.03

Types of Loans and Borrowings

31

Section 1.04

Terms Generally; Rules of Construction

31

Section 1.05

Accounting Terms and Determinations; GAAP; Pro Forma Compliance

31

 

 

 

Article II

The Credits

 

Section 2.01

Commitments

32

Section 2.02

Loans and Borrowings

33

Section 2.03

Requests for Borrowings

34

Section 2.04

Interest Elections

35

Section 2.05

Funding of Borrowings

36

Section 2.06

Termination and Reduction of Commitments

37

Section 2.07

Letters of Credit

37

Section 2.08

Optional Increase in Commitments

42

 

 

 

Article III

Payments of Principal and Interest; Prepayments; Fees

 

 

 

Section 3.01

Repayment of Loans

43

Section 3.02

Interest

43

Section 3.03

Alternate Rate of Interest

44

Section 3.04

Prepayments

44

Section 3.05

Fees

46

 

 

 

Article IV

Payments; Pro Rata Treatment; Sharing of Set-offs

 

 

 

Section 4.01

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

47

Section 4.02

Payments by the Borrower; Presumptions by the Administrative Agent

48

Section 4.03

Certain Deductions by the Administrative Agent

49

Section 4.04

Defaulting Lenders

49

 

 

 

Article V

Increased Costs; Break Funding Payments; Taxes; Illegality

 

 

 

Section 5.01

Increased Costs

50

Section 5.02

Break Funding Payments

52

Section 5.03

Taxes

52

Section 5.04

Mitigation Obligations; Replacement of Lenders

56

 

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Section 5.05

Illegality

56

 

 

 

Article VI

Conditions Precedent

 

 

 

Section 6.01

Effective Date

57

Section 6.02

Each Credit Event

60

 

 

 

Article VII

Representations and Warranties

 

 

 

Section 7.01

Organization; Powers

61

Section 7.02

Authority; Enforceability

61

Section 7.03

Approvals; No Conflicts

61

Section 7.04

Financial Condition; No Material Adverse Change

62

Section 7.05

Litigation

63

Section 7.06

Environmental Matters

63

Section 7.07

Compliance with the Laws and Agreements; No Defaults

64

Section 7.08

Investment Company Act

65

Section 7.09

Taxes

65

Section 7.10

ERISA

65

Section 7.11

Disclosure; No Material Misstatements

66

Section 7.12

Insurance

66

Section 7.13

Restriction on Liens

66

Section 7.14

Subsidiaries

67

Section 7.15

Location of Business and Offices

67

Section 7.16

Properties; Titles, Etc.

67

Section 7.17

Maintenance of Properties

68

Section 7.18

Hedging Agreements

68

Section 7.19

Security Instruments

68

Section 7.20

Use of Loans and Letters of Credit

69

Section 7.21

Solvency

69

Section 7.22

Common Enterprise

69

Section 7.23

Material Contracts

69

Section 7.24

Broker’s Fees

70

Section 7.25

Employee Matters

70

Section 7.26

Anti-Terrorism Laws

70

 

 

 

Article VIII

Affirmative Covenants

 

 

 

Section 8.01

Financial Statements; Ratings Change; Other Information

71

Section 8.02

Notices of Material Events

74

Section 8.03

Existence; Conduct of Business

75

Section 8.04

Payment of Obligations

75

Section 8.05

Performance of Obligations under Loan Documents

75

Section 8.06

Operation and Maintenance of Properties

75

 

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Section 8.07

Insurance

76

Section 8.08

Books and Records; Inspection Rights

76

Section 8.09

Compliance with Laws

76

Section 8.10

Compliance with Agreements

77

Section 8.11

Environmental Matters

77

Section 8.12

Further Assurances

78

Section 8.13

Title Information; Phase I Site Assessments

78

Section 8.14

Additional Collateral; Additional Guarantors

78

Section 8.15

Designations with Respect to Subsidiaries

79

Section 8.16

Excluded Subsidiaries

80

Section 8.17

ERISA Compliance

80

Section 8.18

Interest Rate Hedging Agreements

80

Section 8.19

Bonnie View Fractionator; Woodsboro Processing Plant

81

 

 

 

Article IX

Negative Covenants

 

 

 

Section 9.01

Financial Covenants

81

Section 9.02

Indebtedness

82

Section 9.03

Liens

83

Section 9.04

Restricted Payments

83

Section 9.05

Investments, Loans and Advances

84

Section 9.06

Nature of Business; International Operations

85

Section 9.07

Proceeds of Loans

86

Section 9.08

ERISA Compliance

86

Section 9.09

Sale or Discount of Receivables

87

Section 9.10

Mergers, Etc.

87

Section 9.11

Sale of Properties

87

Section 9.12

Environmental Matters

88

Section 9.13

Transactions with Affiliates

88

Section 9.14

Subsidiaries

88

Section 9.15

Limitation on Issuance of Equity Interests

89

Section 9.16

Negative Pledge Agreements; Dividend Restrictions

89

Section 9.17

Hedging Agreements

89

Section 9.18

Holding Company

89

Section 9.19

Sale and Leaseback

90

Section 9.20

Amendments to Organization Documents, Material Contracts, or Fiscal Year End;
Prepayments of other Indebtedness

90

Section 9.21

Anti-Terrorism Law; Anti-Money Laundering

90

Section 9.22

Embargoed Person

91

 

 

 

Article X

Events of Default; Remedies

 

 

 

Section 10.01

Events of Default

91

Section 10.02

Remedies

93

 

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Article XI

The Agents

 

 

 

Section 11.01

Appointment and Authority

94

Section 11.02

Rights as a Lender

94

Section 11.03

Exculpatory Provisions

95

Section 11.04

Reliance by Administrative Agent

96

Section 11.05

Delegation of Duties

96

Section 11.06

Resignation of Administrative Agent

96

Section 11.07

Non-Reliance on Administrative Agent and Other Lenders

97

Section 11.08

No Other Duties, etc.

97

Section 11.09

Authority of Administrative Agent to Release Collateral and Liens

98

 

 

 

Article XII

Miscellaneous

 

 

 

Section 12.01

Notices

98

Section 12.02

Waivers; Amendments

101

Section 12.03

Expenses, Indemnity; Damage Waiver

102

Section 12.04

Assignments and Participations

105

Section 12.05

Survival; Revival; Reinstatement

108

Section 12.06

Counterparts; Integration; Effectiveness; Electronic Execution

109

Section 12.07

Severability

109

Section 12.08

Right of Setoff

110

Section 12.09

GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS

110

Section 12.10

Headings

111

Section 12.11

Confidentiality

111

Section 12.12

Interest Rate Limitation

112

Section 12.13

EXCULPATION PROVISIONS

113

Section 12.14

Collateral Matters; Hedging Agreements; Treasury Management Agreements

113

Section 12.15

No Third Party Beneficiaries

114

Section 12.16

USA Patriot Act Notice

114

Section 12.17

Assignment and Assumption from Existing Borrower to Borrower

114

Section 12.18

Amendment and Restatement

114

Section 12.19

Non-Recourse to the General Partner

115

 

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ANNEXES, EXHIBITS AND SCHEDULES

 

 

 

Annex I

Commitments

 

Annex II

Existing Letters of Credit

 

 

 

 

Exhibit A

Form of Note

 

Exhibit B

Form of Borrowing Request

 

Exhibit C

Form of Interest Election Request

 

Exhibit D-1

Form of Compliance Certificate (Effective Date)

 

Exhibit D-2

Form of Compliance Certificate (Ongoing)

 

Exhibit E

Form of Guaranty and Collateral Agreement

 

Exhibit F

Form of Assignment and Assumption

 

Exhibit G-1

Form of U.S. Tax Compliance Certificate (Foreign Lenders; not partnerships)

 

Exhibit G-2

Form of U.S. Tax Compliance Certificate (Foreign Participants; not partnerships)

 

Exhibit G-3

Form of U.S. Tax Compliance Certificate (Foreign Participants: partnerships)

 

Exhibit G-4

Form of U.S. Tax Compliance Certificate (Foreign Lenders; partnerships)\

 

 

Schedule 1.02(a)

Security Instruments as of the Effective Date

 

Schedule 1.02(b)

Specified IPO Transactions

 

Schedule 1.02(c)

Specified Projects

 

Schedule 7.09

Taxes

 

Schedule 7.14

Subsidiaries

 

Schedule 7.18

Hedging Agreements

 

Schedule 7.19

Jurisdictions for Security Instrument Filings

 

Schedule 7.23

Material Contracts

 

Schedule 7.24

Broker’s Fees

 

Schedule 9.05

Existing Investments

 

 

v

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THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of November 7, 2012,
is among: Southcross Energy Partners, L.P., a Delaware limited partnership (the
“Borrower”); each of the Lenders from time to time party hereto; Wells Fargo
Bank, N.A. (in its individual capacity, “Wells Fargo”), as administrative agent
for the Lenders (in such capacity, together with its successors in such
capacity, the “Administrative Agent”); Citibank, N.A. and SunTrust Bank, as
co-syndication agents for the Lenders (in such capacity, together with their
successors in such capacity, the “Co-Syndication Agents”); Barclays Bank PLC,
JPMorgan Chase Bank, N.A., and Compass Bank, as co-documentation agents for the
Lenders (in such capacity, together with their successors in such capacity, the
“Co-Documentation Agents”); and, for the limited purposes set forth herein,
Southcross Energy LLC, a Delaware limited liability company (the “Existing
Borrower”).

 

R E C I T A L S

 

A.            The Existing Borrower, the Administrative Agent, and each of the
financial institutions from time to time party thereto as lenders (the “Existing
Lenders”) are parties to that certain Amended and Restated Credit Agreement
dated as of June 10, 2011 (as amended, the “Existing Credit Agreement”),
pursuant to which Existing Lenders provided certain loans and extensions of
credit to the Borrower (all Indebtedness arising pursuant to the Existing Credit
Agreement, the “Existing Indebtedness”).

 

B.            In each case as more particularly described on Schedule
1.02(b) hereto, prior to the date hereof, the Existing Borrower formed
Southcross Energy Partners GP, LLC, a Delaware limited liability company (the
“General Partner”), the Existing Borrower and the General Partner formed the
Borrower as a new midstream master limited partnership, of which the General
Partner is the sole general partner, and the Existing Borrower formed Southcross
Energy Operating, LLC, a Delaware limited liability company (“Southcross
Operating”) that (x) prior to giving effect to the Transactions (defined below)
is a direct Wholly-Owned Subsidiary (defined below) of the Existing Borrower and
(y) will, as part of the Restructuring, become a direct Wholly-Owned Subsidiary
of the Borrower.  Pursuant to the Contribution Agreement (as defined below) and
contemporaneously with the execution and delivery hereof, (a) the Existing
Borrower will convey, directly or indirectly, substantially all of its assets
including, without limitation, its ownership interests in Southcross Energy GP
LLC, a Delaware limited liability company, and Southcross Energy LP LLC, a
Delaware limited liability company, to Southcross Operating, (b) the Existing
Borrower will convey an interest in Southcross Operating to the General Partner
as a capital contribution (the “GP Contribution Interest”), (c) the General
Partner will convey the GP Contribution Interest to the Borrower in exchange for
the general partner interest in the Borrower and the Borrower’s incentive
distribution rights, and (d) the Existing Borrower will convey its remaining
interest in Southcross Operating to the Borrower in exchange for common units
and subordinated units representing in the aggregate a 61.9 % limited
partnership interest in the Borrower (subject to the exercise of the
over-allotment option as described on Schedule 1.02(b) hereto) and other
consideration as described in the Contribution Agreement (the transactions
described in the foregoing clauses (a) through (d), and the other transactions
contemplated by the Contribution Agreement, collectively, the “Restructuring”).

 

1

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C.            Contemporaneously with the execution and delivery hereof and the
Restructuring, the Borrower will be consummating the Specified IPO Transactions,
including an initial public offering of its Equity Interests (the “IPO”).

 

D.            Subject to the conditions precedent set forth herein, the parties
hereto desire to amend and restate the Existing Credit Agreement in its entirety
in the form of this Agreement to (a) reflect the Restructuring and the Specified
IPO Transactions, (b) allow the Existing Borrower to assign its rights, duties,
liabilities and obligations under the Existing Credit Agreement to the Borrower
and release the Existing Borrower from its rights, duties, liabilities and
obligations under the Existing Credit Agreement and the other “Loan Documents”
(as defined in the Existing Credit Agreement) executed in connection with the
Existing Credit Agreement (the “Existing Loan Documents”), and (c) amend certain
other terms of the Existing Credit Agreement in certain respects as provided in
this Agreement.

 

E.            After giving effect to the amendment and restatement of the
Existing Credit Agreement pursuant to the terms hereof, the Commitment of each
Lender hereunder will be as set forth on Annex I attached hereto.

 

F.             In consideration of the premises, the representations,
warranties, covenants, and agreements contained herein, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and subject to the satisfaction of each condition precedent set
forth in Section 6.01 hereof, the Existing Credit Agreement shall be amended and
restated as of the Effective Date in the form of this Agreement.  The parties
hereto further agree as follows:

 

ARTICLE I
Definitions and Accounting Matters

 

Section 1.01          Terms Defined Above.  As used in this Agreement, each term
defined above has the meaning indicated above.

 

Section 1.02          Certain Defined Terms.  As used in this Agreement, the
following terms have the meanings specified below:

 

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

 

“Actual Completion Date” means, with respect to any Specified Project, the date,
to be identified to the Administrative Agent by delivery of a certificate of a
Responsible Officer, certifying that the Specified Project has reached actual
capacity set forth in the projections provided to the Administrative Agent with
respect to such Specified Project and is generally generating the revenue
specified in the minimum revenue contracts previously approved by the
Administrative Agent as set forth in the definition of “Specified Projects”.

 

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to the LIBO Rate for such Interest Period multiplied
by the Statutory Reserve Rate.

 

2

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

 

“Affected Loans” has the meaning assigned to such term in Section 5.05.

 

“Affiliate” means, with respect to a specified 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.

 

“Agents” means, collectively, the Administrative Agent, the Co-Syndication
Agents and the Co-Documentation Agents; and “Agent” means any one of the
Administrative Agent, either Co-Syndication Agent or either Co-Documentation
Agent, as the context requires.

 

“Agreement” means this Second Amended and Restated Credit Agreement, as the same
may from time to time be amended, modified, supplemented or restated.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 0.5% and (c) the Adjusted LIBO Rate for a
one-month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1.0%.  For the avoidance of doubt, the
Adjusted LIBO Rate for any day shall be based on the rate appearing on Reuters
Screen LIBOR01 Page (or on any successor or substitute page of such service, or
any successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, on such day
(or the immediately preceding Business Day if such day is not a day on which
banks are open for dealings in dollar deposits in the London interbank market). 
Any change in the Alternate Base Rate due to a change in the Prime Rate, the
Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from
and including the effective date of such change in the Prime Rate, the Federal
Funds Effective Rate or the Adjusted LIBO Rate, respectively.

 

“Annualized Consolidated EBITDA” means, with respect to each Rolling Period
ending on or prior to September 30, 2013, the sum of (a) the product of (i) the
Borrower’s Consolidated Unadjusted EBITDA for such Rolling Period multiplied by
(ii) the factor set forth for such Rolling Period in the grid below plus (b) the
aggregate Specified Projects EBITDA Adjustments for In Process Specified
Projects as calculated on the last day of such Rolling Period plus (c) any
amounts added to Consolidated Net Income in the calculation of Consolidated
EBITDA for such Rolling Period pursuant to clause (v) of the definition thereof:

 

Rolling Period Ending

 

Factor

 

March 31, 2013

 

4

 

June 30, 2013

 

2

 

September 30, 2013

 

4/3

 

 

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“Annualized Consolidated Interest Expense” means, for each Rolling Period ending
on or prior to September 30, 2013, the product of (a) the Borrower’s actual
Consolidated Interest Expense for such Rolling Period multiplied by (b) the
factor set forth for such Rolling Period in the grid below:

 

Rolling Period Ending

 

Factor

 

March 31, 2013

 

4

 

June 30, 2013

 

2

 

September 30, 2013

 

4/3

 

 

“Anti-Terrorism Law” has the meaning assigned to such term in Section 7.26(a).

 

“Applicable Margin” means, for any day, with respect to any ABR Loan or
Eurodollar Loan, or with respect to the Commitment Fee Rate, as the case may be,
the rate per annum set forth in the grid below based upon the current
Consolidated Total Leverage Ratio then in effect:

 

Consolidated Total
Leverage Ratio

 

Eurodollar Loans

 

ABR Loans

 

Commitment Fee
Rate

 

Less than 2.50 to 1.00

 

2.00

%

1.00

%

0.375

%

Greater than or equal to 2.50 to 1.00 but less than 3.00 to 1.00

 

2.25

%

1.25

%

0.375

%

Greater than or equal to 3.00 to 1.00 but less than 3.50 to 1.00

 

2.50

%

1.50

%

0.375

%

Greater than or equal to 3.50 to 1.00 but less than 4.00 to 1.00

 

2.75

%

1.75

%

0.500

%

Greater than or equal to 4.00 to 1.00 but less than 4.50 to 1.00

 

3.00

%

2.00

%

0.500

%

Greater than or equal to 4.50

 

3.25

%

2.25

%

0.500

%

 

Each change in the Applicable Margin resulting from a change in the Consolidated
Total Leverage Ratio shall become effective on and after the date on which
financial statements or a compliance certificate, as applicable, is delivered to
the Lenders pursuant to Sections 8.01(a), (b) or (d) and shall remain in effect
until the next change to be effected pursuant to this paragraph; provided,
however, that (x) if at any time the Borrower fails to deliver any financial
statements or a compliance certificate required by Sections 8.01(a), (b) or (d),
as applicable, then the “Applicable Margin” means the rate per annum set forth
on the grid when the Consolidated Total Leverage Ratio is at its highest level
and (y) for the period from the Effective Date until the date that the Financial
Statements and Compliance Certificate required pursuant to Sections 8.01(b) or
(d), as appropriate, are delivered to the Administrative Agent for the fiscal
quarter ending March 31, 2013, the Consolidated Total Leverage Ratio shall, for
purposes of this definition, be

 

4

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deemed to be greater than or equal to 4.50 to 1.00.  In the event that any
financial statement or compliance certificate delivered pursuant to Sections
8.01(a), (b) or (d) is shown to be inaccurate (regardless of whether this
Agreement or the Commitments are in effect when such inaccuracy is discovered),
and such inaccuracy, if corrected, would have led to the application of a higher
Applicable Margin for any period (an “Applicable Period”) than the Applicable
Margin applied for such Applicable Period, and only in such case, then the
Borrower shall immediately (a) deliver to the Administrative Agent a corrected
compliance certificate for such Applicable Period, (b) determine the Applicable
Margin for such Applicable Period based upon the corrected compliance
certificate, and (c) pay to the Administrative Agent the accrued additional
interest owing as a result of such increased Applicable Margin for such
Applicable Period, which payment shall be promptly applied by the Administrative
Agent in accordance with Section 4.01.  The preceding sentence is in addition to
rights of the Administrative Agent and Lenders with respect to Sections
3.02(c) and 10.01 and other of their respective rights under this Agreement.

 

“Applicable Percentage” means, with respect to any Lender, the percentage of the
aggregate Commitments represented by such Lender’s Commitment (or, if the
Commitments have terminated or expired, the percentage of the aggregate
Revolving Credit Exposures represented by such Lender’s Revolving Credit
Exposure at such time); provided that in the case of Section 4.04 when a
Defaulting Lender shall exist, “Applicable Percentage” shall mean the percentage
of the aggregate Commitments (disregarding any Defaulting Lender’s Commitments)
represented by such Lender’s Commitment (or, if the Commitments have terminated
or expired, the Applicable Percentage shall be determined based upon the
Commitments most recently in effect, giving effect to any assignments (and
disregarding any Defaulting Lender’s unfunded Commitment based on the
Commitments most recently in effect) at the time of determination).

 

“Approved Counterparty” means (a) any Lender or any Affiliate of a Lender and
(b) any other Person whose (or whose credit support provider’s) long term senior
unsecured debt rating is A-/A3 by S&P or Moody’s (or their equivalent) or
higher.

 

“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.

 

“Arranger” means Wells Fargo Securities, LLC, in its capacities as the sole lead
arranger and sole bookrunner hereunder.

 

“Asset Sale” means any sale, transfer, assignment, conveyance or other
disposition by the Borrower or any Subsidiary to any Person (including by way of
redemption by such Person) of any Property (including, without limitation, any
capital stock or other securities of, or Equity Interests in, another Person),
but excluding (a) dispositions resulting from Casualty Events, and (b) sales and
other dispositions of Property pursuant to Sections 9.11(a)-(e).

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 12.04(a)), and accepted by the Administrative Agent, in substantially
the form of Exhibit F or any other form approved by the Administrative Agent.

 

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“Availability” means the aggregate Commitments minus the aggregate Revolving
Credit Exposures.

 

“Availability Period” means the period from and including the Effective Date to
but excluding the Termination Date.

 

“Available Cash” has the meaning assigned to such term in the Partnership
Agreement.

 

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America or any successor Governmental Authority.

 

“Bonnie View Fractionator” means the fractionator near Bonnie View, Texas
associated with the Woodsboro Processing Plant having an initial design capacity
of 11,500 barrels per day.

 

“Borrowing” means Loans of the same Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.

 

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in San Francisco, California or Dallas, Texas are
authorized or required by law to remain closed; and if such day relates to a
Borrowing or continuation of, a payment or prepayment of principal of or
interest on, or a conversion of or into, or the Interest Period for, a
Eurodollar Loan or a notice by the Borrower with respect to any such Borrowing
or continuation, payment, prepayment, conversion or Interest Period, any day
which is also a day on which banks are open for dealings in dollar deposits in
the London interbank market.

 

“Capital Expenditures” means, in respect of any Person, for any period, the
aggregate (determined without duplication) of all expenditures and costs that
are capitalized on the balance sheet of such Person in accordance with GAAP,
exclusive of, with respect to each Loan Party, expenditures and costs incurred
by such Loan Party to the extent that an unaffiliated third Person has provided
such Loan Party with funds to pay such expenditures and costs prior to
incurrence.

 

“Capital Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, recorded as capital leases
on the balance sheet of the Person liable (whether contingent or otherwise) for
the payment of rent thereunder.

 

“Casualty Event” means any loss, casualty or other insured damage to, or any
nationalization, taking under power of eminent domain or by condemnation or
similar proceeding of, any Property of the Borrower or any of its Subsidiaries.

 

“Change in Control” means:

 

(a)           the Sponsor and its Affiliates, collectively, shall cease to
beneficially own and control, directly or indirectly, Equity Interests in the
General Partner representing a majority of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests in the General
Partner;

 

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(b)           the acquisition of ownership, directly or indirectly, beneficially
or of record, by any person or group (within the meaning of the Securities
Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the
date hereof) other than the Existing Borrower, the Sponsor, and their Affiliates
of Equity Interests representing more than 50% of the aggregate ordinary voting
power represented by the issued and outstanding Equity Interests of the
Borrower;

 

(c)           the General Partner shall cease to be the sole general partner of
the Borrower, with substantially the same (or more expansive) powers to manage
the Borrower as are granted to the General Partner under the Organization
Documents of the Borrower as of the Effective Date;

 

(d)           the Borrower shall cease to beneficially own and control, directly
or indirectly, all of the Equity Interests in each of the other Loan Parties; or

 

(e)           within any period of twelve (12) consecutive calendar months,
individuals who were neither (i) members of the board of managers, or similar
governing body, of the General Partner on the first day of such period,
(ii) persons who were appointed or nominated by such persons, nor (iii) persons
who were appointed or nominated by the Sponsor (or an Affiliate of the Sponsor)
shall constitute a majority of the members of the board of managers, or similar
governing body, of the General Partner.

 

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

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute.

 

“Collateral” means all Property of the Loan Parties that is secured by a Lien
under one or more Security Instruments.

 

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans and to acquire participations in Letters of Credit hereunder,
expressed as an amount representing the maximum aggregate amount of such
Lender’s Revolving Credit Exposure hereunder, as such commitment may be
(a) modified from time to time pursuant to Section 2.06 or Section 2.08 and
(b) modified from time to time pursuant to assignments by or to such Lender
pursuant to Section 12.04(a).  The initial amount of each Lender’s Commitment is
set forth on

 

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Annex I hereto or in the Assignment and Assumption pursuant to which such Lender
shall have assumed its Commitment, as applicable.  The aggregate amount of the
Lenders’ Commitments on the Effective Date is $350,000,000.

 

“Commitment Fee Rate” has the meaning set forth in the definition of “Applicable
Margin.”

 

“Consolidated EBITDA” means, for any period of determination, the sum of
(without duplication, and without giving effect to any extraordinary losses or
gains or any interest income during such period) the following determined on a
consolidated basis: (a) Consolidated Net Income during such period plus (b) to
the extent deducted in determining Consolidated Net Income in such period:
(i) income tax expense, (ii) franchise tax expense (including Texas margin tax
expense), (iii) Consolidated Interest Expense, (iv) amortization, depreciation
and other noncash and nonrecurring items during such period, and (v) fees, costs
and expenses incurred in connection with the negotiation, documentation, closing
and consummation of Permitted Acquisitions in an aggregate amount not to exceed
$2,000,000 for any Permitted Acquisition, plus (c) the aggregate Specified
Projects EBITDA Adjustments during such period; provided that the aggregate
Specified Projects EBITDA Adjustments shall not exceed fifteen percent (15%) of
the Consolidated EBITDA for such period prior to giving effect to any Specified
Projects EBITDA Adjustments for such period; provided, further, that if the
Borrower or any Consolidated Subsidiary shall acquire or dispose of any Property
during such period, then Consolidated EBITDA shall be calculated after giving
pro forma effect to such acquisition or disposition, as if such acquisition or
disposition had occurred on the first day of such period.  All calculations of
Consolidated EBITDA shall be in form and substance satisfactory to the
Administrative Agent.

 

“Consolidated Interest Coverage Ratio” means, for any period of determination,
the ratio of (a) Consolidated EBITDA (or Annualized Consolidated EBITDA, in the
case of the Rolling Periods ending on or prior to September 30, 2013) divided by
(b) Consolidated Interest Expense (or Annualized Consolidated Interest Expense,
in the case of Rolling Periods ending on or prior to September 30, 2013).

 

“Consolidated Interest Expense” means, for any period of determination, the sum
(determined without duplication) of the aggregate gross interest expense of the
Borrower and the Consolidated Subsidiaries for such period as determined in
accordance with GAAP, including: (a) amortization of debt discount,
(b) capitalized interest, and (c) the portion of any payments or accruals under
Capital Leases allocable to interest expense, plus the portion of any payments
or accruals under Synthetic Leases allocable to interest expense whether or not
the same constitutes interest expense under GAAP; provided that interest expense
attributable to amortization of financing costs paid in cash prior to January 1,
2013 shall be excluded from “Consolidated Interest Expense”.

 

“Consolidated Net Income” means, for any period of determination, the aggregate
of the net income (or loss) of the Borrower and the Consolidated Subsidiaries
after allowances for taxes for such period determined on a consolidated basis in
accordance with GAAP; provided that there shall be excluded from such net income
(to the extent otherwise included therein) the following: (a) the net income of
any Person, other than a Loan Party, in which the Borrower or any Consolidated
Subsidiary has an interest, except to the extent of the amount of dividends or

 

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distributions actually paid in cash during such period by such other Person to
the Borrower or to a Consolidated Subsidiary, as the case may be; (b) the net
income (but not loss) during such period of any Consolidated Subsidiary to the
extent that the declaration or payment of dividends or similar distributions or
transfers or loans by that Consolidated Subsidiary is not at the time permitted
by operation of the terms of its charter or any agreement, instrument or
Governmental Requirement applicable to such Consolidated Subsidiary or is
otherwise restricted or prohibited, in each case determined in accordance with
GAAP; (c) the net income (or loss) of any Person acquired in a
pooling-of-interests transaction for any period prior to the date of such
transaction; (d) any extraordinary non-cash gains or losses during such period,
and (e) any gains or losses attributable to writeups or writedowns of assets;
provided, further, that if the Borrower or any Consolidated Subsidiary shall
acquire or dispose of any Property during such period, then Consolidated Net
Income shall be calculated, which calculation shall be in form and substance
satisfactory to the Administrative Agent, after giving pro forma effect to such
acquisition, disposition or redesignation, as if such acquisition, disposition
or redesignation had occurred on the first day of such period.

 

“Consolidated Senior Secured Indebtedness” means, on any date, all Consolidated
Total Funded Indebtedness on such date that is not Subordinated Indebtedness and
that is secured by a Lien on any Property of the Borrower or any Subsidiary.

 

“Consolidated Senior Secured Leverage Ratio” means, for any period of
determination, the ratio of Consolidated Senior Secured Indebtedness as of the
last day of the fiscal quarter for which such determination is being made
divided by Consolidated EBITDA (or Annualized Consolidated EBITDA, in the case
of the Rolling Periods ending on or prior to September 30, 2013) for the Rolling
Period ending on the last day of such fiscal quarter.

 

“Consolidated Subsidiaries” means each Subsidiary of the Borrower (whether now
existing or hereafter created or acquired) the financial statements of which
shall be (or should have been) consolidated with the financial statements of the
Borrower in accordance with GAAP.  For the avoidance of doubt, “Consolidated
Subsidiaries” does not include Excluded Subsidiaries.

 

“Consolidated Total Funded Indebtedness” means, at any date, without
duplication, the sum of (a) all obligations of the Borrower and its Consolidated
Subsidiaries for borrowed money, including, but not limited to, senior bank
Indebtedness, senior notes and subordinated Indebtedness, (b) all obligations of
the Borrower and its Consolidated Subsidiaries under Capital Leases, (c) all
obligations of the Borrower and its Consolidated Subsidiaries with respect to
each outstanding standby letter of credit with a termination date of more than
seventy-five (75) days after the date on which it was issued (but excluding any
obligations under any such standby letter of credit that is issued for the
account of the Borrower or any of its Subsidiaries in the ordinary course for
purchases or transportation of natural gas by such Person(s) and which standby
letter of credit has a termination date of one year or less after the date on
which such standby letter of credit was issued), and (d) all contingent
obligations of the Borrower and its Consolidated Subsidiaries with respect to
the Indebtedness described in clauses (a), (b) and (c).

 

“Consolidated Total Leverage Ratio” means, for any period of determination, the
ratio of Consolidated Total Funded Indebtedness as of the last day of the fiscal
quarter for which such determination is being made divided by Consolidated
EBITDA (or Annualized Consolidated

 

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EBITDA, in the case of the Rolling Periods ending on or prior to September 30,
2013) for the Rolling Period ending on the last day of such fiscal quarter.

 

“Consolidated Unadjusted EBITDA” means, for any period of determination,
Consolidated EBITDA prior to giving effect to (a) any amounts added to
Consolidated Net Income in the calculation of Consolidated EBITDA pursuant to
clause (v) of the definition thereof and (b) any Specified Projects EBITDA
Adjustments for In Process Specified Projects for such period.

 

“Contribution Agreement” means that certain Contribution, Conveyance and
Assumption Agreement dated as of November 7, 2012, among the Existing Borrower,
Southcross Operating, the General Partner, and the Borrower.

 

“Contribution Documents” means, collectively, the Contribution Agreement and all
agreements, conveyance documents, instruments, assignments, and certificates
delivered pursuant to the Contribution Agreement.

 

“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.

 

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

 

“Defaulting Lender” means any Lender, as determined by the Administrative Agent,
that has (a) failed to fund any portion of its Loans or participations in
Letters of Credit within three (3) Business Days of the date required to be
funded by it hereunder, (b) notified the Borrower, the Administrative Agent, the
Issuing Bank or any Lender in writing that it does not intend to comply with any
of its funding obligations under this Agreement or has made a public statement
to the effect that it does not intend to comply with its funding obligations
under this Agreement or under other agreements in which it commits to extend
credit, (c) failed, within three (3) Business Days after request by the
Administrative Agent, to confirm that it will comply with the terms of this
Agreement relating to its obligations to fund prospective Loans and
participations in then outstanding Letters of Credit, (d) otherwise failed to
pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within three (3) Business Days of the date
when due, unless the subject of a good faith dispute, or (e) (i) become or is
insolvent or has a parent company that has become or is insolvent or (ii) become
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment or has a parent company that has become the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment; provided that a Lender shall not become a
Defaulting Lender solely as a result of the acquisition or maintenance of an
ownership interest in such Lender or Person controlling such Lender or the
exercise of control over a Lender or Person controlling such Lender by a
Governmental Authority or an instrumentality thereof.

 

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“Disqualified Capital Stock” means any Equity Interest that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event, matures or is mandatorily
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock), pursuant to a sinking fund
obligation or otherwise, or is convertible or exchangeable for Indebtedness or
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock) at the option of the holder thereof,
in whole or in part, on or prior to the date that is ninety-one (91) days after
the earlier of (a) the Maturity Date and (b) the date on which there are no
Loans, LC Exposure or other obligations hereunder outstanding and all of the
Commitments are terminated.

 

“dollars” or “$” refers to lawful money of the United States of America.

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
the United States of America or any state thereof or the District of Columbia.

 

“Effective Date” means the date on which the conditions specified in
Section 6.01 are satisfied (or waived in accordance with Section 12.02).

 

“Embargoed Person” has the meaning assigned to such term in Section 9.22.

 

“Environmental Laws” means any and all Governmental Requirements pertaining in
any way to health, safety, the environment, the preservation or reclamation of
natural resources, or the management, Release or threatened Release of any
Hazardous Materials, in effect in any and all jurisdictions in which the
Borrower or any Subsidiary is conducting, or at any time has conducted,
business, or where any Property of the Borrower or any Subsidiary is located,
including, the Oil Pollution Act of 1990 (“OPA”), as amended, the Clean Air Act,
as amended, the Comprehensive Environmental, Response, Compensation, and
Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976 (“RCRA”), as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, and other
environmental conservation or protection Governmental Requirements.

 

“Environmental Permit” means any permit, registration, license, notice,
approval, consent, exemption, variance, spill or response plan, or other
authorization required under or issued pursuant to applicable Environmental
Laws.

 

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
Equity Interests.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute.

 

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“ERISA Affiliate” means each trade or business (whether or not incorporated)
which together with the Borrower or a Subsidiary would be deemed to be a “single
employer” within the meaning of section 4001(b)(1) of ERISA or subsections (b),
(c), (m) or (o) of section 414 of the Code.

 

“ERISA Event” means (a) a “Reportable Event” described in section 4043 of ERISA
and the regulations issued thereunder, (b) the withdrawal of the Borrower, a
Subsidiary or any ERISA Affiliate from a Plan during a plan year in which it was
a “substantial employer” as defined in section 4001(a)(2) of ERISA, (c) the
filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under section 4041 of ERISA, (d) the institution of
proceedings to terminate a Plan by the PBGC, (e) receipt of a notice of
withdrawal liability pursuant to section 4202 of ERISA or (f) any other event or
condition which could reasonably be expected to constitute grounds under section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.

 

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

 

“Event of Default” has the meaning assigned to such term in Section 10.01.

 

“Excepted Liens” means:  (a) Liens for Taxes, assessments or other governmental
charges or levies which are not delinquent or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP; (b) Liens in connection with workers’ compensation,
unemployment insurance or other social security, old age pension or public
liability obligations which are not delinquent or which are being contested in
good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; (c) statutory landlord’s liens, operators’,
interest owners’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’,
suppliers’, workers’, materialmen’s, construction or other like Liens, in each
case, arising by operation of law in the ordinary course of business or incident
to the operation and maintenance of Properties each of which is in respect of
obligations that are not delinquent or which are being contested in good faith
by appropriate action and for which adequate reserves have been maintained in
accordance with GAAP; (d) Liens arising solely by virtue of customary deposit
account agreements with the creditor depositary institution or any statutory or
common law provision relating to banker’s liens, rights of set-off or similar
rights and remedies and burdening only deposit accounts or other funds
maintained with a creditor depository institution, provided that no such deposit
account is a dedicated cash collateral account or is subject to restrictions
against access by the depositor in excess of those set forth by regulations
promulgated by the Board and no such deposit account is intended by the Borrower
or any of its Subsidiaries to provide collateral to the depository institution
or any other Person (other than the Secured Parties pursuant to the Security
Instruments); (e) zoning and land use requirements, easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations
affecting, and minor irregularities or deficiencies in title to, any real
Property of the Borrower or any Subsidiary that do not secure Indebtedness and
which in the aggregate do not materially impair the use of such Property for the
purposes of which such Property is held by the Borrower or any Subsidiary or
materially impair the value of such Property subject thereto; (f) Liens on cash
or securities pledged to secure

 

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performance of tenders, surety, appeal and supersedeas bonds, government
contracts, performance and return of money bonds, bids, trade contracts, leases,
statutory obligations, regulatory obligations, obligations in respect of
workers’ compensation, unemployment insurance or other forms of government
benefits or insurance and other obligations of a like nature incurred in the
ordinary course of business; (g) Liens, titles and interests of lessors of
property leased by such lessors to the Borrower or any Subsidiary, restrictions
and prohibitions on encumbrances and transferability with respect to such
property and the Borrower’s or such Subsidiary’s interests therein imposed by
such leases, and Liens and encumbrances encumbering such lessors’ titles and
interests in such property and to which the Borrower’s or such Subsidiary’s
leasehold interests may be subject or subordinate, in each case, whether or not
evidenced by UCC financing statement filings or other documents of record;
provided that such Liens do not secure Indebtedness of the Borrower or any
Subsidiary and do not encumber property of the Borrower or any Subsidiary other
than the property that is the subject of such leases; (h) Liens, titles and
interests of licensors of software and other intangible property licensed by
such licensors to the Borrower or any Subsidiary, restrictions and prohibitions
on encumbrances and transferability with respect to such property and the
Borrower’s or such Subsidiary’s interests therein imposed by such licenses, and
Liens and encumbrances encumbering such licensors’ titles and interests in such
property and to which the Borrower’s or such Subsidiary’s license interests may
be subject or subordinate, in each case, whether or not evidenced by UCC
financing statement filings or other documents of record; provided that such
Liens do not secure Indebtedness of the Borrower or any Subsidiary and do not
encumber property of the Borrower or any Subsidiary other than the property that
is the subject of such licenses; and (i) judgment and attachment Liens not
giving rise to an Event of Default, provided that any appropriate legal
proceedings which may have been duly initiated for the review of such judgment
shall not have been finally terminated or the period within which such
proceeding may be initiated shall not have expired and no action to enforce such
Lien has been commenced.  Any Lien described in clauses (a) through (d) shall
remain an “Excepted Lien” only for so long as (A) the appropriate Loan Party
shall cause any proceeding instituted contesting such Lien to stay the sale or
forfeiture of any portion of the Collateral on account of such Lien, (B) the
appropriate Loan Party shall maintain adequate reserves related to such Lien to
the extent required by GAAP, and (C) such Lien shall in all respects be subject
and subordinate in priority to the Liens created and evidenced by the Security
Instruments, except if and to the extent that the Governmental Requirements
creating, permitting or authorizing such Lien provides that such Lien is or must
be superior to the Liens created and evidenced by the Security Instruments;
provided that no intention to subordinate the first priority Liens granted in
favor of the Administrative Agent for the benefit of the Secured Parties
pursuant to the Security Instruments is to be hereby implied or expressed by the
permitted existence of such Excepted Liens.

 

“Excess Cash” means the amount, if any, that (a) the sum of (i) the Borrower’s
and the other Loan Parties’ cash on hand plus (ii) the aggregate amount of the
Borrower’s and the other Loan Parties’ Investments of the types described in
clauses (c), (d), (e) and (f) of Section 9.05 exceeds (b) the aggregate amount
of the Borrower’s accounts payable and accrued expenses, liabilities or other
obligations to pay the deferred purchase price of Property or services that are
greater than ninety (90) days past the later of the date of invoice or the
scheduled payment date unless such accounts payable, expenses or liabilities or
other obligations are being contested in good faith by appropriate action and
for which adequate reserves have been maintained in accordance with GAAP.

 

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“Excluded Subsidiary” means (a) any Person designated on the Effective Date as
such on Schedule 7.14 or that the Borrower has designated in writing to the
Administrative Agent to be an Excluded Subsidiary pursuant to Section 8.15(a),
and which has not been redesignated a Loan Party pursuant to Section 8.15(b),
and (b) any Subsidiary of an Excluded Subsidiary.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower or any Guarantor hereunder or under
any other Loan Document, (a) Taxes imposed on or measured by its overall net
income (however denominated), and franchise taxes imposed on it (in lieu of net
income Taxes), by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable lending office
is located, (b) any branch profits taxes imposed by the United States of America
or any similar tax imposed by any other jurisdiction in which the Borrower or
any Guarantor is located, (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 5.04(b)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Foreign Lender’s failure or inability
(other than as a result of a Change in Law) to comply with Section 5.03(f),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts with respect to such withholding tax pursuant to
Section 5.03(a) or Section 5.03(c), and (d) any United States federal
withholding taxes imposed by FATCA.

 

“Executive Order” has the meaning assigned to such term in Section 7.26(a).

 

“Existing Letters of Credit” means, collectively, letters of credit issued under
the Existing Credit Agreement and outstanding as of the Effective Date, which
“Existing Letters of Credit” are listed on Annex II hereto.

 

“FATCA” means sections 1471 through 1474 of the Code as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any regulations or official
interpretations thereof.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

 

“Fee Letter” means collectively, (a) the commitment letter dated October 2,
2012, among the Existing Borrower, Wells Fargo, and the Arranger, and (b) the
fee letter dated as of the date hereof, among the Existing Borrower, the
Borrower, and Wells Fargo.

 

“Financial Officer” means, for any Person, the chief financial officer,
principal accounting officer, treasurer or controller of such Person.  Unless
otherwise specified, all references herein

 

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to a Financial Officer means a Financial Officer of the Borrower or of the
General Partner acting on behalf of the Borrower.

 

“Financial Statements” has the meaning assigned to such term in Section 7.04(a).

 

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax
purposes.  For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.

 

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“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.

 

“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time subject to the terms and conditions set
forth in Section 1.05.

 

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

 

“Governmental Requirement” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, rules of common law, authorization or other
directive or requirement, whether now or hereinafter in effect, of any
Governmental Authority.

 

“Guarantors” means, collectively, (a) the Subsidiaries listed on Schedule 7.14,
and (b) each other Subsidiary that guarantees the Secured Obligations pursuant
to Section 8.14(a).  For the avoidance of doubt, “Guarantors” does not include
Excluded Subsidiaries.

 

“Guaranty and Collateral Agreement” means an amended and restated agreement
executed by the Guarantors in substantially the form of Exhibit E granting and
confirming security interests in certain Collateral and unconditionally
guarantying on a joint and several basis, payment of the Secured Obligations, as
the same may be amended, modified or supplemented from time to time.

 

“Hazardous Material” means any substance regulated or as to which liability
might arise under any applicable Environmental Law including:  (a) any chemical,
compound, material, product, byproduct, substance or waste defined as or
included in the definition or meaning of “hazardous substance,” “hazardous
material,” “hazardous waste,” “solid waste,” “toxic waste,” “extremely hazardous
substance,” “toxic substance,” “contaminant,” “pollutant,” or words of similar
meaning or import found in any applicable Environmental Law; (b) Hydrocarbons,
petroleum products, petroleum substances, natural gas, oil, oil and gas waste,
crude oil, and any

 

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components, fractions, or derivatives thereof; and (c) radioactive materials,
explosives, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon, infectious or medical wastes.

 

“Hedging Agreement” means any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement, whether
exchange traded, “over-the-counter” or otherwise, involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments only on account of services provided by current or
former directors, officers, employees, or consultants of the Borrower or the
Subsidiaries shall be a Hedging Agreement.

 

“Hedging Termination Value” means, in respect of any one or more Hedging
Agreements, after taking into account the effect of any legally enforceable
netting agreement relating to such Hedging Agreements, (a) for any date on or
after the date such Hedging Agreements 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 Hedging Agreements,
as determined by the counterparties to such Hedging Agreements.

 

“Highest Lawful Rate” means, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Loans or on other
Secured Obligations under laws applicable to such Lender which are presently in
effect or, to the extent allowed by law, under such applicable laws which may
hereafter be in effect and which allow a higher maximum nonusurious interest
rate than applicable laws allow as of the date hereof.

 

“Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline,
condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all
products refined or separated therefrom.

 

“Indebtedness” means, for any Person, the sum of the following (without
duplication): (a) all obligations of such Person for borrowed money or evidenced
by bonds, bankers’ acceptances, debentures, notes or other similar instruments;
(b) all obligations of such Person (whether contingent or otherwise) in respect
of letters of credit, surety or other bonds and similar instruments; (c) all
accounts payable and all accrued expenses, liabilities or other obligations of
such Person to pay the deferred purchase price of Property or services, except
trade accounts payable of such Person arising in the ordinary course of business
if and to the extent that such trade accounts payable are not past due by more
than sixty (60) days or that are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves have been
established to the satisfaction of the Administrative Agent or are subject to an
offset in favor of such Person as a result of accounts receivable owed to such
Person; (d) all obligations under Capital Leases; (e) all obligations under
Synthetic Leases; (f) all Indebtedness (as defined in the other clauses of this
definition) of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) a Lien on any
Property of such Person, whether or not such Indebtedness is assumed by such
Person, provided, however, that the amount of such Indebtedness of any Person
described in this clause (f) shall,

 

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for purposes of this Agreement, be deemed to be equal to the lesser of (i) the
aggregate unpaid amount of such Indebtedness or (ii) the fair market value of
the Property encumbered, as determined by the Administrative Agent in its
reasonable discretion; (g) all Indebtedness (as defined in the other clauses of
this definition) of others guaranteed by such Person or in which such Person
otherwise assures a creditor against loss of the Indebtedness (howsoever such
assurance shall be made) to the extent of the lesser of the amount of such
Indebtedness and the maximum stated amount of such guarantee or assurance
against loss; (h) all obligations or undertakings of such Person to maintain or
cause to be maintained the financial position or covenants of others or to
purchase the Indebtedness or Property of others; (i) obligations to pay for
electricity, natural gas, other Hydrocarbons and other commodities under
contracts having an initial term in excess of one (1) year even if such
electricity, natural gas, other Hydrocarbons, and other commodities are not
actually taken, received or utilized by such Person; (j) any Indebtedness of a
partnership for which such Person is liable either by agreement, by operation of
law or by a Governmental Requirement but only to the extent of such liability;
and (k) Disqualified Capital Stock.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitee” has the meaning assigned to such term in Section 12.03(b).

 

“Information” has the meaning assigned to such term in Section 12.11.

 

“In Process Specified Project” has the meaning assigned to such term in the
definition of “Specified Projects EBITDA Adjustment” set forth in this
Section 1.02.

 

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.04.

 

“Interest Payment Date” means (a) with respect to any ABR Loan, the last day of
each March, June, September and December and (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months’ duration, each day prior to the last day of
such Interest Period that occurs at intervals of three months’ duration after
the first day of such Interest Period.

 

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, three or six months
thereafter, as the Borrower may elect; provided that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period
pertaining to a Eurodollar Borrowing that commences on the last Business Day of
a calendar month (or on a day for which there is no numerically corresponding
day in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period.  For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.

 

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“Investment” means, for any Person: (a) the acquisition (whether for cash,
Property, services or securities or otherwise) of Equity Interests of any other
Person (including, without limitation, any “short sale” or any sale of any
securities at a time when such securities are not owned by the Person entering
into such short sale); (b) the making of any deposit with, or advance, loan or
capital contribution to, assumption of Indebtedness of, purchase or other
acquisition of any other Indebtedness or equity participation or interest in, or
other extension of credit to, any other Person (including the purchase of
Property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such Person, but excluding
any such advance, loan or extension of credit having a term not exceeding ninety
(90) days representing the purchase price of inventory or supplies sold by such
Person in the ordinary course of business); (c) the purchase or acquisition (in
one or a series of transactions) of Property of another Person that constitutes
a business unit or (d) the entering into of any guarantee of, or other
contingent obligation (including the deposit of any Equity Interests to be sold)
with respect to, Indebtedness or other liability of any other Person and
(without duplication) any amount committed to be advanced, lent or extended to
such Person.

 

“Issuing Bank” means Wells Fargo, in its capacity as the issuer of Letters of
Credit hereunder, and its successors in such capacity as provided in
Section 2.07(i).  The Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which
case the term “Issuing Bank” shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.

 

“LC Commitment” means, at any time, $75,000,000.

 

“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.

 

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time.  The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.

 

“Lenders” means the Persons listed on Annex I and any Person that shall have
become a party hereto pursuant to an Assignment and Assumption, other than any
such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption.

 

“Letter of Credit” means any letter of credit issued (or deemed issued) pursuant
to this Agreement, including, without limitation, Existing Letters of Credit.

 

“Letter of Credit Agreements” means all letter of credit applications and other
agreements (including any amendments, modifications or supplements thereto)
submitted by the Borrower, or entered into by the Borrower, with the Issuing
Bank relating to any Letter of Credit.

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor
or substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page of such service, as determined by the Administrative

 

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Agent from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two (2) Business Days prior to the commencement of such
Interest Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period.  In the event that such rate is not available at such time
for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing
for such Interest Period shall be the rate (rounded upwards, if necessary, to
the next 1/100 of 1%) at which dollar deposits of an amount comparable to such
Eurodollar Borrowing and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two (2) Business Days prior to the commencement of such
Interest Period.

 

“Lien” means any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to the lien or
security interest arising from a mortgage, deed of trust, encumbrance, pledge,
security agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes.  The term “Lien” shall include easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations. For the purposes of this Agreement, the Borrower and its
Subsidiaries shall be deemed to be the owner of any Property which they have
acquired or hold subject to a conditional sale agreement, or leases under a
financing lease or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person in a transaction intended to
create a financing.

 

“Liquidity” means, as of any date, the sum of (a) Availability on such date (but
only to the extent that (i) the Borrower is permitted to borrow such amount
under the terms of this Agreement including, without limitation, Section 6.02
hereof, and (ii) if such amounts were borrowed, the Borrower would be in pro
forma compliance (as set forth in Section 1.05(c)) with all applicable covenants
set forth in Section 9.01 hereof) plus (b) the amount of Excess Cash on such
date.

 

“Loan” means a loan made to the Borrower pursuant to Section 2.01(a).

 

“Loan Documents” means, collectively, this Agreement, the Notes, the Letter of
Credit Agreements, the Letters of Credit, the Fee Letter, and the Security
Instruments.

 

“Loan Parties” means, collectively, the Borrower and the Guarantors.  For the
avoidance of doubt, “Loan Parties” does not include Excluded Subsidiaries.

 

“Long Term LC” means a Letter of Credit with an expiration date that is after
the date that is one year following the date such Letter of Credit is issued.

 

“Long Term LC Exposure” means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Long Term LCs at such time plus (b) the aggregate
amount of all LC Disbursements in respect of Long Term LCs that have not yet
been reimbursed by or on behalf of the Borrower at such time.

 

“Long Term LC Sublimit” means, at any time, $10,000,000.

 

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“Material Acquisition” means any Permitted Acquisition that satisfies each of
the following criteria:

 

(a)                                 such acquisition is consummated on or after
April 1, 2013;

 

(b)                                 such acquisition occurs prior to the
Borrower’s exercise of the Permitted Notes Covenant Option; and

 

(c)                                  such acquisition involves a purchase price
(without giving effect to any earn-out payments or other contingent
consideration) of not less than $50,000,000.

 

“Material Adverse Change” means any circumstance or event that has had a
Material Adverse Effect.

 

“Material Adverse Effect” means a material adverse change in, or material
adverse effect on, or a material impairment of (a) the business, operations,
Property or condition (financial or otherwise) of the Borrower and the
Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform any
of its obligations under any Loan Document, (c) the validity or enforceability
of any Loan Document or (d) the rights and remedies of or benefits available to
the Administrative Agent, any other Agent, the Issuing Bank or any Lender under
any Loan Document.

 

“Material Contracts” means, collectively, each Material Gathering Contract and
each Material Gas Sales Contract.

 

“Material Gas Sales Contract” means each gas sales contract entered into by a
Loan Party that provides for aggregate payments to such Loan Party during any
fiscal year of such Loan Party in excess of $5,000,000, as determined on a gross
margin basis based upon weighted average gas purchase price as determined for
the system in question.

 

“Material Gathering Contract” means each gathering or processing contract
entered into by a Loan Party that provides for aggregate payments to such Loan
Party during any fiscal year of such Loan Party in excess of $5,000,000, as
determined on a gross margin basis.

 

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Hedging Agreements, of any one
or more of the Borrower and its Subsidiaries in an aggregate principal amount
exceeding $5,000,000.  For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Borrower or any Subsidiary in
respect of any Hedging Agreement at any time shall be the Hedging Termination
Value.

 

“Maturity Date” means November 7, 2017.

 

“Mechanicsburg Gathering Contract” means that certain Gas Gathering Agreement
between the Mechanicsburg LLC and EOG Resources, Inc., dated as of January 29,
2009.

 

“Mechanicsburg LLC” means Southcross Delta Pipeline LLC, a Delaware limited
liability company, formerly named SWE Mississippi Pipeline, LLC.

 

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“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that
is a nationally recognized rating agency.

 

“Mortgage” means each mortgage, deed of trust or any other document creating and
evidencing a Lien on real or immovable Property and other Property in favor of
the Secured Parties, which shall be in a form reasonably satisfactory to the
Administrative Agent, as the same may be amended, modified, supplemented or
restated from time to time in accordance with the Loan Documents.

 

“Mortgaged Property” means any real Property owned by the Borrower or any of its
Subsidiaries that is subject to a Mortgage.

 

“Net Cash Proceeds” means (a) for any Recovery Event requiring a repayment of
Loans pursuant to Section 3.04(b)(iii), the gross cash proceeds (including any
such proceeds received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment receivable or
otherwise, but only as and when received) from such Recovery Event, net of
attorneys’ fees, accountants’ fees, amounts required to be applied to the
repayment of Indebtedness secured by a Lien expressly permitted hereunder on any
asset which is the subject of such Recovery Event (other than any Lien pursuant
to a Security Instrument) and other customary fees and expenses actually
incurred in connection therewith, and net of taxes paid or reasonably estimated
to be payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements), and (b) for the IPO,
the gross cash proceeds received from the IPO, net of those attorneys’ fees,
finder’s fees, financial advisory fees, accounting fees, underwriting fees,
discounts and commissions, investment banking fees, recording fees, filing fees,
and other customary fees and expenses (including, without limitation, printing
and related expenses) actually incurred in connection therewith and paid in cash
at the closing of the Transactions.

 

“Net Sale Proceeds” means for any sale or other disposition of Property pursuant
to an Asset Sale, the gross cash proceeds (including any cash received by way of
deferred payment pursuant to a promissory note, receivable or otherwise, but
only as and when received) received from such Asset Sale, net of (a) reasonable
transaction costs (including, without limitation, any underwriting, brokerage or
other customary selling commissions, reasonable legal, advisory and other fees
and expenses (including title and recording expenses), associated therewith and
sales, VAT and transfer taxes arising therefrom), (b) the amount of such gross
cash proceeds required to be used to permanently repay any Indebtedness (other
than the Secured Obligations) which is permitted hereunder and which is secured
by the respective Property which was sold or otherwise disposed of, (c) the
estimated net marginal increase in income taxes which will be payable by the
Borrower or any Subsidiary with respect to the fiscal year of the Borrower in
which the sale or other disposition occurs as a result of such sale or other
disposition, and (d) the amount of all reserves required to be maintained by the
Borrower or any Subsidiary in accordance with GAAP for any potential indemnity
obligations that may be required to be made by the Borrower or any Subsidiary of
as a result of such Asset Sale; provided, however, that (i) such gross proceeds
shall not include any portion of such gross cash proceeds which the Borrower
determines in good faith should be reserved for post-closing adjustments (to the
extent the Borrower delivers to the Lenders a certificate signed by a
Responsible Officer as to such determination), it being understood and agreed
that on the day that all such post-closing

 

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adjustments have been determined (which shall not be later than thirteen (13)
months following the date of the respective Asset Sale), the amount (if any) by
which the reserved amount in respect of such Asset Sale exceeds the actual
post-closing adjustments payable by the Borrower or any Subsidiary shall
constitute Net Sale Proceeds on such date received by the Borrower and/or any
Subsidiary from such Asset Sale, and (ii) at such time as the Borrower and the
Subsidiaries are no longer required to maintain any indemnity reserves in
accordance with GAAP as a result of any Asset Sale, the amount (if any) by which
such reserved amount in respect of such Asset Sale exceeds the actual amount of
indemnity payments made by the Borrower or any Subsidiary for which such
reserves were required to be maintained in respect of such Asset Sale shall
constitute Net Sale Proceeds at such time.

 

“Notes” means the promissory notes of the Borrower described in
Section 2.02(d) and being substantially in the form of Exhibit A, together with
all amendments, modifications, replacements, extensions and rearrangements
thereof.

 

“OFAC” has the meaning assigned to such term in Section 7.26(b)(v).

 

“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 US 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.

 

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

 

“Participant” has the meaning assigned to such term in Section 12.04(d)(i).

 

“Partnership Agreement” means that certain First Amended and Restated Limited
Partnership Agreement of the Borrower dated as of November 7, 2012, as the same
may be amended, restated, supplemented or otherwise modified from time to time.

 

“Permitted Acquisition” means any Investment in a joint venture or any other
acquisition of Equity Interests or assets of a Person meeting each of the
following conditions:

 

(a)           no Default or Event of Default exists or results therefrom;

 

(b)           the joint venture or target is engaged in, or the acquired assets
are useful in, the line of business in which the Borrower and the Subsidiaries
are engaged in on the Effective Date;

 

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(c)           after giving effect to such transaction (and any debt incurred in
connection therewith):

 

(i)                                     the Borrower’s Liquidity is not less
than $20,000,000; and

 

(ii)           the Borrower is in pro forma compliance (as set forth in
Section 1.05(c)) with all applicable covenants set forth in Section 9.01 hereof;

 

(d)           the Administrative Agent shall have received not less than 15
Business Days’ prior notice of such Investment, which notice shall include
(i) such pro forma financial statements that the Administrative Agent may be
reasonably request and that demonstrate compliance with the foregoing clause
(c) and (ii) copies of the material agreements relating to such Investment;

 

(e)           such acquisition shall be consensual, shall have been approved by
the target’s board of directors (or comparable governing body) and shall be
consummated in compliance with all applicable Governmental Requirements; and

 

(f)            the Borrower shall deliver, or cause each applicable Subsidiary
to deliver, such Security Instruments and other documents as required pursuant
to, and prior to the deadlines set forth in, Section 8.14.

 

“Permitted Note Indebtedness” means Indebtedness of the Borrower and/or any of
its Subsidiaries resulting from the issuance by such parties of senior unsecured
notes; provided that (a) such Indebtedness does not mature or require any
scheduled payments of the principal amount thereof prior to the date that is one
year after the Maturity Date in effect on the date of such Permitted Note
Indebtedness issuance, (b) such Indebtedness bears no greater than a market
interest rate as of the time of its issuance or incurrence (as determined in
good faith by the Borrower), (c) no indenture or other agreement governing such
Indebtedness contains (i) maintenance financial covenants or (ii) covenants or
events of default that, taken as a whole, are more restrictive on the Borrower
and its Subsidiaries than those contained in this Agreement are on the Borrower
and its Subsidiaries, (d) after giving effect to the issuance or incurrence of
such Indebtedness on a pro forma basis, the Borrower shall be in compliance (as
set forth in Section 1.05(c)) with all applicable covenants set forth in
Section 9.01, and (e) no Default or Event of Default exists at the time of or
after giving effect to the issuance or incurrence of such Indebtedness.

 

“Permitted Notes Covenant Option” means a one-time option of the Borrower,
exercisable in accordance with Section 9.01 hereof contemporaneously with the
issuance of Permitted Note Indebtedness by the Borrower or a Subsidiary, to
elect to be subject to the financial covenants set forth in
Section 9.01(a)(ii) and Section 9.01(b) hereof in lieu of the financial covenant
set forth in Section 9.01(a)(i) hereof.

 

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

 

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

 

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“Plan” means any employee pension benefit plan, as defined in section 3(2) of
ERISA, which (a) is currently or hereafter sponsored, maintained or contributed
to by the Borrower, a Subsidiary or an ERISA Affiliate or (b) was at any time
during the six (6) calendar years preceding the date hereof, sponsored,
maintained or contributed to by the Borrower or a Subsidiary or an ERISA
Affiliate.

 

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by the Administrative Agent as its prime rate in effect at its principal
office in San Francisco, California; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.  Such rate is set by the Administrative Agent as a general reference
rate of interest, taking into account such factors as the Administrative Agent
may deem appropriate; it being understood that many of the Administrative
Agent’s commercial or other loans are priced in relation to such rate, that it
is not necessarily the lowest or best rate actually charged to any customer and
that the Administrative Agent may make various commercial or other loans at
rates of interest having no relationship to such rate.

 

“Projected Capacity” means, with respect to any Specified Project, the
Borrower’s good faith estimate of the production and/or revenue capacity of such
Specified Project in the first certificate delivered pursuant to
Section 8.01(d) to the Administrative Agent that includes the first calculation
of pro forma Specified Project EBITDA for such Specified Project, which estimate
may be subsequently changed by the Borrower in accordance with Section 8.01(m).

 

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible (including, without limitation,
cash, securities, accounts, contract rights and, with respect to any Person,
Equity Interests or other ownership interests of any other Person), whether now
in existence or owned or hereafter acquired.

 

“Purchase Money Indebtedness” means Indebtedness, the proceeds of which are used
to finance the acquisition, construction, installation, transport and/or
improvement of inventory, equipment or other Property in the ordinary course of
business.

 

“Recently Completed Specified Project” has the meaning assigned to such term in
the definition of “Specified Projects EBITDA Adjustment” set forth in this
Section 1.02.

 

“Recovery Event” means the receipt by the Borrower or any Subsidiary of any cash
insurance proceeds or condemnation awards payable by reason of a Casualty Event.

 

“Redemption” means with respect to any Indebtedness, the repurchase, redemption,
prepayment, repayment, or defeasance or any other acquisition or retirement for
value (or the segregation of funds with respect to any of the foregoing) of such
Indebtedness.  “Redeem” has the correlative meaning thereto.

 

“Register” has the meaning assigned to such term in Section 12.04(c).

 

“Registration Statement” means the Form S-1 Registration Statement File
No. 333-180841 filed by Borrower with the SEC on April 20, 2012, in connection
with the IPO, as amended prior to the Effective Date.

 

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“Regulation D” means Regulation D of the Board, as the same may be amended,
supplemented or replaced from time to time.

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.

 

“Release” means any depositing, spilling, leaking, pumping, pouring, placing,
emitting, discarding, abandoning, emptying, discharging, migrating, injecting,
escaping, leaching, dumping, or disposing.

 

“Remedial Work” has the meaning assigned to such term in Section 8.11(a).

 

“Required Lenders” means, at any time while no Loans or LC Exposure is
outstanding, at least two (2) Lenders having greater than fifty percent (50%) of
the aggregate Commitments; and at any time while any Loans or LC Exposure is
outstanding, at least two (2) Lenders holding greater than fifty percent (50%)
of the outstanding aggregate principal amount of the Loans and participation
interests in Letters of Credit (without regard to any sale by a Lender of a
participation in any Loan under Section 12.04(d)); provided that the Commitments
and the principal amount of the Loans and participation interests in Letters of
Credit of the Defaulting Lenders (if any) shall be excluded from the
determination of Required Lenders.

 

“Responsible Officer” means, as to any Person, the Chief Executive Officer, the
President, any Financial Officer or any Vice President of such Person.  Unless
otherwise specified, all references to a Responsible Officer herein shall mean a
Responsible Officer of the Borrower or of the General Partner acting on behalf
of the Borrower.

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other Property) with respect to any Equity Interests in the
Borrower or any of its Subsidiaries, 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 Equity Interests in the Borrower or any of its Subsidiaries or any
option, warrant or other right to acquire any such Equity Interests in the
Borrower or any of its Subsidiaries.

 

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Loans and its LC
Exposure at such time.

 

“Rolling Period” means (a) for each of the fiscal quarters ending on March 31,
2013, June 30, 2013, and September 30, 2013, the period commencing on January 1,
2013 and ending on the last day of such fiscal quarter, and (b) for the fiscal
quarter ending on December 31, 2013 and for each subsequent fiscal quarter, the
period of four (4) consecutive fiscal quarters ending on the last day of such
fiscal quarter.

 

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill
Companies, Inc., and any successor thereto that is a nationally recognized
rating agency.

 

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“Scheduled Completion Date” means, with respect to any Specified Project, the
date indicated as the Borrower’s good faith estimate of the scheduled date of
the completion of such Specified Project in the first certificate delivered
pursuant to Section 8.01(d) to the Administrative Agent that includes the first
calculation of pro forma Specified Project EBITDA for such Specified Project,
which date may not be subsequently changed by the Borrower.

 

“SEC” means the Securities and Exchange Commission or any successor Governmental
Authority.

 

“Secured Hedging Agreement” means any Hedging Agreement of the Borrower or any
Subsidiary with a Secured Hedging Agreement Counterparty.

 

“Secured Hedging Agreement Counterparty” means any Person that is a party to a
Hedging Agreement with the Borrower or any Subsidiary that enters into such
Hedging Agreement while such Person is or before such Person becomes a Lender or
an Affiliate of a Lender, but if such Person at any time ceases to be a Lender
or an Affiliate of a Lender, as the case may be, such Person shall no longer be
a Secured Hedging Agreement Counterparty.

 

“Secured Obligations” means any and all obligations of and amounts owing or to
be owing (including interest accruing at any post-default rate and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Borrower, any
of its Subsidiaries or any other Loan Party, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) by the
Borrower, any Subsidiary or any other Loan Party (whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising): (a) to the Administrative Agent,
the Issuing Bank, any trustee or any Lender under any Loan Document; (b) to any
Secured Hedging Agreement Counterparty under any Secured Hedging Agreement;
(c) to any Treasury Management Counterparty under any Treasury Management
Agreement; and (d) all renewals, extensions and/or rearrangements of any of the
above.

 

“Secured Parties” means, collectively, the Administrative Agent, each Issuing
Bank, each Lender, each Secured Hedging Agreement Counterparty and each Treasury
Management Counterparty.

 

“Security Instruments” means the Guaranty and Collateral Agreement, the
Mortgages, the other agreements, instruments or certificates described or
referred to in Schedule 1.02(a), and any and all other agreements, instruments,
consents, or certificates now or hereafter executed and delivered by the
Borrower or any other Person (other than Secured Hedging Agreements, Treasury
Management Agreements or participation or similar agreements between any Lender
and any other lender or creditor with respect to any Secured Obligations
pursuant to this Agreement) in connection with, or as security for the payment
or performance of the Secured Obligations, the Notes, this Agreement, or
reimbursement obligations under the Letters of Credit, as such agreements may be
amended, modified, supplemented or restated from time to time.

 

“Solvent” means, with respect to any Person as of any date, that (a) the value
of the assets of such Person (both at fair value and present fair saleable
value) is, on the date of determination,

 

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greater than the total amount of liabilities (including contingent and
unliquidated liabilities) of such Person as of such date, (b) as of such date,
such Person is able to pay all liabilities of such Person as such liabilities
mature, and (c) as of such date, such Person does not have unreasonably small
capital given the nature of its business.  In computing the amount of contingent
or unliquidated liabilities at any time, such liabilities shall be computed at
the amount that, in light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become an actual
or matured liability.

 

“Specified IPO Transactions” means each of the transactions consummated in
connection with the first underwritten public offering by Borrower of its Equity
Interests substantially concurrently with the Effective Date, pursuant to the
Partnership Agreement, the Contribution Documents and the Registration Statement
including, without limitation, those transactions set forth on Schedule 1.02(b).

 

“Specified Projects” means (a) the projects identified in Schedule
1.02(c)(1) and (b) certain other projects of the Loan Parties (other than
projects of any other Person, including, without limitation, any joint venture)
(i) that have Capital Expenditures attributable thereto in excess of $5,000,000,
(ii) that are identified in the certificate to be delivered pursuant to
Section 8.01(d), and (iii) for which the Borrower has provided to the
Administrative Agent, not less than thirty (30) days (or such lesser period as
is reasonably acceptable to the Administrative Agent) prior to the last day of
the first fiscal quarter for which the Borrower desires to commence inclusion of
a Specified Projects EBITDA Adjustment with respect to such project,
information, as applicable, in each case in form and substance satisfactory to
the Administrative Agent in its reasonable discretion, regarding (A) enforceable
minimum revenue contracts that have been entered into with unaffiliated third
parties and the ability of counterparties and third parties to perform under
such enforceable minimum revenue contracts, (B) projected revenues from such
enforceable minimum revenue contracts, other contracts or negotiated
settlements, as the case may be, (C) projected capital costs and projected
operating and general administrative expenses of such project, and (D) any other
aspect of such project as the Administrative Agent may reasonably request.

 

“Specified Projects EBITDA Adjustment” means the amount that may be added to
Consolidated Net Income in the calculation of Consolidated EBITDA (or, in the
case of each Rolling Period ending on or prior to September 30, 2013, the amount
that may be included in the calculation of Annualized Consolidated EBITDA)
attributable to a particular Specified Project as set forth in this definition,
whether completed or in process.  When calculating such amount,

 

(a)          for any Specified Project for which the Actual Completion Date
occurred on or after the first day of the applicable Rolling Period, but at
least thirty (30) days prior to the last day of such Rolling Period (a “Recently
Completed Specified Project”), the Specified Project EBITDA Adjustment for such
Recently Completed Specified Project shall be equal to: (i) the actual
Consolidated EBITDA attributable to such Recently Completed Specified Project
following the Actual Completion Date, divided by (ii) the number of days in such
Rolling

 

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

(1)  Schedule 1.02(c) to list the Bee Line Project.

 

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Period following the Actual Completion Date, multiplied by (iii) the number of
days in such Rolling Period prior to the Actual Completion Date; and

 

(b)          for any Specified Project where construction has begun but the
Actual Completion Date has not occurred or for which the Actual Completion Date
has occurred but a full thirty (30) days has not elapsed since such Actual
Completion Date (an “In Process Specified Project”), Consolidated EBITDA for any
period attributable to such In Process Specified Project will reflect the
projected Consolidated EBITDA related to such In Process Specified Project for
the first full four-fiscal quarter period following the Scheduled Completion
Date based on (i) the difference between enforceable minimum revenue, as
determined by such In Process Specified Project’s Projected Capacity, and
projected operating and general administrative expenses of such In Process
Specified Project (such projected annual Consolidated EBITDA as calculated based
on this clause (i), the “Specified Project Projected EBITDA”), multiplied by
(ii) the ratio of actual Capital Expenditures spent through such period on such
In Process Specified Project relative to the total expected Capital Expenditures
for the completion of such In Process Specified Project, such amounts, in each
case, approved by the Administrative Agent in its reasonable judgment; provided
that the Specified Project Projected EBITDA attributable to such In Process
Specified Project for the fiscal quarter in which such In Process Specified
Project’s Actual Completion Date occurs shall be calculated net of any actual
Consolidated EBITDA attributable to such In Process Specified Project.  The
contribution of a Specified Project to the Specified Projects EBITDA Adjustment
shall be reduced in future periods if such Specified Project is not completed
by, or if the estimated date by which such construction to be completed is
beyond, a date that is more than 90 days beyond the Scheduled Completion Date
for such Specified Project, such reduction to be reflected in the next
certificate to be delivered pursuant to Section 8.01(d) to the Administrative
Agent on or after the date such Specified Project is not so completed or it is
determined that such Specified Project will not be so completed and to be in an
amount equal to the product of (x) the applicable percentage reduction rate
relating to the number of days of delay as set forth below and (y) the amount of
the Specified Projects EBITDA Adjustment attributable to such Specified Project:

 

Delay or Estimated Delay,
whichever is greater

 

Applicable Percentage
Reduction Rate

 

> 90 days but < 180 days

 

25

%

> 180 days but < 270 days

 

50

%

> 270 days

 

100

%

 

; and

 

(c)           the Specified Projects EBITDA Adjustments attributable to Recently
Completed Specified Projects and to In Process Specified Projects shall each be
reduced on a pro rata basis (based on the relative percentages of the total
Specified Projects

 

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EBITDA Adjustments represented by Recently Completed Specified Projects and In
Process Specified Projects, as applicable) to the extent necessary so that the
aggregate Specified Projects EBITDA Adjustments shall not exceed fifteen percent
(15%) of the Consolidated EBITDA for such period prior to giving effect to any
Specified Projects EBITDA Adjustments for such period            .

 

“Specified Project Projected EBITDA” has the meaning assigned to such term in
the definition of “Specified Projects EBITDA Adjustment” set forth in this
Section 1.02.

 

“Sponsor” means Charlesbank Equity Fund VI, Limited Partnership, a Massachusetts
limited partnership.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board).  Such reserve percentages shall include those
imposed pursuant to such Regulation D.  Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any
comparable regulation.  The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

 

“Subject Transaction” has the meaning assigned to such term in Section 1.05(c).

 

“Subordinated Indebtedness” means the collective reference to any Indebtedness
of the Loan Parties subordinated in right and time of payment to the Secured
Obligations and containing such other terms and conditions, in each case as are
satisfactory to the Administrative Agent.

 

“Subsidiary” means: (a) any Person of which at least a majority of the
outstanding Equity Interests having by the terms thereof ordinary voting power
to elect a majority of the board of directors, manager or other governing body
of such Person (irrespective of whether or not at the time Equity Interests of
any other class or classes of such Person shall have or might have voting power
by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by (i) another Person, (ii) one or more of such
other Person’s Subsidiaries, or (iii) collectively, such other Person and one or
more of such other Person’s Subsidiaries, and (b) any partnership of which such
other Person or any of such other Person’s Subsidiaries is a general partner. 
Unless otherwise indicated herein, each reference to the term “Subsidiary” means
a Subsidiary of the Borrower. Notwithstanding anything to the contrary set forth
herein, the term “Subsidiary” does not include any Excluded Subsidiaries.

 

“Synthetic Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, treated as operating leases
on the financial statements of the Person liable (whether contingently or
otherwise) for the payment of rent thereunder and which were properly treated as
indebtedness for borrowed money for purposes of U.S federal income taxes, if the
lessee in respect thereof is obligated to either purchase for an amount in

 

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excess of, or pay upon early termination an amount in excess of, 80% of the
residual value of the Property subject to such operating lease upon expiration
or early termination of such lease.

 

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

 

“Termination Date” means the earlier of (a) the Maturity Date and (b) the date
of termination of the Commitments.

 

“Transactions” means with respect to (a) the Borrower, the Specified IPO
Transactions and the execution, delivery and performance by the Borrower of this
Agreement and each other Loan Document to which it is a party, the borrowing of
Loans, the use of the proceeds thereof (including, without limitation, to
refinance the Existing Indebtedness), the issuance of Letters of Credit
hereunder, and the grant of Liens by the Borrower on Collateral pursuant to the
Security Instruments, and (b) each Guarantor, the execution, delivery and
performance by such Guarantor of each Loan Document and Contribution Document to
which it is a party, the guaranteeing of the Secured Obligations and the other
obligations under the Guaranty and Collateral Agreement by such Guarantor and
such Guarantor’s grant of the security interests and provision of Collateral
under the Security Instruments, and the grant of Liens by such Guarantor on
Collateral pursuant to the Security Instruments.

 

“Treasury Management Agreement” means any agreement governing the provision of
treasury or cash management services, including deposit accounts, funds
transfer, automated clearinghouse, auto-borrow, zero balance accounts, returned
check concentration, controlled disbursement, lockbox, account reconciliation
and reporting and trade finance services provided by a Treasury Management
Counterparty for the benefit of the Borrower or a Subsidiary.

 

“Treasury Management Counterparty” means each Lender or Affiliate of a Lender
that enters into a Treasury Management Agreement; provided that if such Person
at any time ceases to be a Lender or an Affiliate of a Lender, as the case may
be, such Person shall no longer be a Treasury Management Counterparty.

 

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Alternate Base Rate or the Adjusted LIBO Rate.

 

“USA Patriot Act” has the meaning assigned to such term in Section 12.16.

 

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 5.03(f).

 

“Wholly-Owned Subsidiary” means any Subsidiary of which all of the outstanding
Equity Interests (other than any directors’ qualifying shares mandated by
applicable law), on a fully-diluted basis, are owned by the Borrower and/or one
or more of the Wholly-Owned Subsidiaries.

 

“Withholding Agent” means any Loan Party or the Administrative Agent.

 

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“Woodsboro Processing Plant” means the gas processing plant located in Refugio
County, Texas, owned by Southcross Energy GP LLC.

 

Section 1.03          Types of Loans and Borrowings.  For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g., a “Eurodollar
Loan”), and Borrowings may be classified and referred to by Type (e.g., a
“Eurodollar Borrowing”).

 

Section 1.04          Terms Generally; Rules of Construction.  The definitions
of terms herein shall apply equally to the singular and plural forms of the
terms defined.  Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.  The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”.  The word “will” shall be construed to have the same meaning and
effect as the word “shall”.  Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth in the
Loan Documents), (b) any reference herein to any law or regulation shall be
construed, unless otherwise specified, as referring to such law or regulation as
amended, modified, supplemented, codified or reenacted, in whole or in part, and
in effect from time to time, (c) any reference herein to any Person shall be
construed to include such Person’s successors and assigns (subject to the
restrictions contained in the Loan Documents), (d) the words “herein”, “hereof”
and “hereunder”, and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof,
(e) with respect to the determination of any time period, the word “from” means
“from and including” and the word “to” means “to and including” and (f) any
reference herein to Articles, Sections, Annexes, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Annexes, Exhibits and
Schedules to, this Agreement.  No provision of this Agreement or any other Loan
Document shall be interpreted or construed against any Person solely because
such Person or its legal representative drafted such provision.

 

Section 1.05          Accounting Terms and Determinations; GAAP; Pro Forma
Compliance.

 

(a)           Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all financial statements and certificates
and reports as to financial matters required to be furnished to the
Administrative Agent or the Lenders hereunder shall be prepared, in accordance
with GAAP, applied on a basis consistent with the Financial Statements except
for changes in which the Borrower’s independent certified public accountants
concur and which are disclosed to the Administrative Agent on the next date on
which Financial Statements are required to be delivered to the Lenders pursuant
to Section 8.01(a); provided that unless the Borrower and the Required Lenders
shall otherwise agree in writing, no such change shall modify or affect the
manner in which compliance with the covenants contained herein is computed such
that all such computations shall be conducted utilizing financial information
presented consistently with prior periods.

 

(b)           Notwithstanding GAAP or anything in this Agreement to the
contrary, for the purposes of calculating the ratios that are the subject of
Section 9.01 hereof and the

 

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components of each of them, all Excluded Subsidiaries (including the assets,
liabilities, income, losses, cash flows and elements thereof) shall be excluded,
except that any dividends or distributions actually paid in cash by any Person
to the Borrower or any other Loan Party shall be deemed to be income to the
Borrower or such other Loan Party, as applicable, when received by it whether or
not constituting income in accordance with GAAP.

 

(c)           For purposes of determining hereunder whether the Borrower is in
pro forma compliance with its applicable financial covenants contained in
Section 9.01 hereof after the occurrence of a certain event (a “Subject
Transaction”), in all cases such calculation shall be based on the financial
information for the most recent Rolling Period for which financial information
has been delivered to the Administrative Agent pursuant to Sections 8.01(a) or
(b), and calculated as if such Subject Transaction had occurred on the first day
of such applicable period.  For the purposes of the definition of “Permitted
Note Indebtedness” (but only in the event that the Borrower exercises the
Permitted Notes Covenant Option) and the definition of “Permitted Acquisition”
(but only in the event that such Permitted Acquisition is a Material Acquisition
and the Borrower elects to temporarily increase the maximum Consolidated Total
Leverage Ratio pursuant to Section 9.01), the covenants (and levels thereof)
that must be complied with are those that will be in effect as of the last day
of the quarter in which such Permitted Note Indebtedness is incurred or such
Material Acquisition is consummated, as applicable.  For all other purposes
hereunder, the covenants (and levels thereof) that must be complied with are
those that were in effect as of the last day of the fiscal quarter most recently
ended prior to such Subject Transaction.

 

ARTICLE II
The Credits

 

Section 2.01          Commitments.

 

(a)           Revolving Loan Commitments.  Subject to the terms and conditions
set forth herein, each Lender agrees to make revolving loans to the Borrower
from time to time during the Availability Period in an aggregate principal
amount that will not result in (i) such Lender’s Revolving Credit Exposure
exceeding such Lender’s Commitment or (ii) the total Revolving Credit Exposures
exceeding the total Commitments.  Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, repay and
reborrow the Loans.

 

(b)           Reallocation of Loans.  After giving effect to this Agreement and
any Loans made on the Effective Date, (i) each Lender who holds Loans in an
aggregate amount less than its Applicable Percentage (after giving effect to
this Agreement) of all Loans shall advance new Loans that shall be disbursed to
the Administrative Agent and used to repay Loans outstanding to each Lender who
holds Loans in an aggregate amount greater than its Applicable Percentage of
Loans, (ii) each Lender’s participation in each Letter of Credit, if any, shall
be automatically adjusted to equal its Applicable Percentage (after giving
effect to this Agreement), and (iii) such other adjustments shall be made as the
Administrative Agent shall specify so that each Lender’s Revolving Credit
Exposure equals its Applicable Percentage (after giving effect to this
Agreement) of the aggregate Loans of all Lenders.  For the avoidance of doubt,
payments

 

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effected between or among the Lenders pursuant to this Section 2.01(b) shall not
be subject to the provisions of Sections 3.04(a) and (b)

 

Section 2.02          Loans and Borrowings.

 

(a)           Borrowings; Several Obligations.  Each Loan shall be made as part
of a Borrowing consisting of Loans made by the Lenders ratably in accordance
with their respective Commitments.  The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments are several and no Lender shall be
responsible for any other Lender’s failure to make Loans as required.

 

(b)           Types of Loans.  Subject to Section 3.03, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith.  Each Lender at its option may make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement.

 

(c)           Minimum Amounts; Limitation on Number of Borrowings.  At the
commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$500,000 and not less than $1,000,000.  At the time that each ABR Borrowing is
made, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $500,000; provided that an ABR Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the
total Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.07(e).  Borrowings of more than one
Type may be outstanding at the same time, provided that there shall not at any
time be more than a total of four (4) Eurodollar Borrowings outstanding. 
Notwithstanding any other provision of this Agreement, the Borrower shall not be
entitled to request, or to elect to convert or continue, any Borrowing if the
Interest Period requested with respect thereto would end after the Maturity
Date.

 

(d)           Notes.  The Loans made by each Lender, if requested by such
Lender, shall be evidenced by a single promissory note of the Borrower in
substantially the form of Exhibit A, dated, in the case of (i) any Lender party
hereto as of the date of this Agreement, as of the date of this Agreement, or
(ii) any Lender that becomes a party hereto pursuant to an Assignment and
Assumption, as of the effective date of the Assignment and Assumption, payable
to the order of such Lender in a principal amount equal to its Commitment, and
otherwise duly completed.  In the event that any Lender’s Commitment increases
or decreases for any reason (whether pursuant to Section 2.06, Section 2.08,
Section 12.04(a) or otherwise), if requested by such Lender, the Borrower shall
deliver or cause to be delivered on the effective date of such increase or
decrease, a new Note payable to the order of such Lender in a principal amount
equal to its Commitment, as applicable, after giving effect to such increase or
decrease, and otherwise duly completed.  The date, amount, Type, interest rate
and, if applicable, Interest Period of each Loan made by each Lender, and all
payments made on account of the principal thereof, shall be recorded by such
Lender on its books for its applicable Note, and, prior to any transfer, may be
endorsed by such Lender on a schedule attached to such Note or any continuation
thereof or on any separate record maintained by such Lender.  Failure to make
any

 

33

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such notation or to attach a schedule shall not affect any Lender’s or the
Borrower’s rights or obligations in respect of such Loans or affect the validity
of such transfer by any Lender of its Note.

 

Section 2.03          Requests for Borrowings.  To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone
(a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., Central
time, three (3) Business Days before the date of the proposed Borrowing or
(b) in the case of an ABR Borrowing, not later than 11.a.m., Central time, one
Business Day before the date of the proposed Borrowing; provided that no such
notice shall be required for any deemed request of an ABR Borrowing to finance
the reimbursement of an LC Disbursement as provided in Section 2.07(e).  Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery, facsimile or e-mail to the Administrative Agent of a
written Borrowing Request in substantially the form of Exhibit B and signed by
the Borrower.  Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:

 

(i)            the aggregate amount of the requested Borrowing;

 

(ii)           the date of such Borrowing, which shall be a Business Day;

 

(iii)          whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

 

(iv)          in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the definition
of the term “Interest Period”;

 

(v)           the current total Revolving Credit Exposures (without regard to
the requested Borrowing) and the pro forma total Revolving Credit Exposures
(giving effect to the requested Borrowing); and

 

(vi)          the location and number of the Borrower’s account to which funds
are to be disbursed, which shall comply with the requirements of Section 2.05.

 

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration.  Each Borrowing
Request shall constitute a representation that (a) the amount of the requested
Borrowing shall not cause the total Revolving Credit Exposures to exceed the
total Commitments, and (b) each condition precedent set forth in Section 6.02
has been satisfied with respect to such Borrowing.

 

Promptly following receipt of a Borrowing Request in accordance with this
Section 2.03, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.

 

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Section 2.04          Interest Elections.

 

(a)           Conversion and Continuance.  Each Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request.  Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section 2.04.  The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.

 

(b)           Interest Election Requests.  To make an election pursuant to this
Section 2.04, the Borrower shall notify the Administrative Agent of such
election by telephone by the time that a Borrowing Request would be required
under Section 2.03 if the Borrower were requesting a Borrowing of the Type
resulting from such election to be made on the effective date of such election. 
Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery, facsimile or e-mail to the Administrative
Agent of a written Interest Election Request in substantially the form of
Exhibit C and signed by the Borrower.

 

(c)           Information in Interest Election Requests.  Each telephonic and
written Interest Election Request shall specify the following information in
compliance with Section 2.02:

 

(i)            the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to Sections 2.04(c)(ii) and
(iii) shall be specified for each resulting Borrowing);

 

(ii)           the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

 

(iii)          whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and

 

(iv)          if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.

 

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one (1) month’s duration.

 

(d)           Notice to Lenders by the Administrative Agent.  Promptly following
receipt of an Interest Election Request, the Administrative Agent shall advise
each Lender of the details thereof and of such Lender’s portion of each
resulting Borrowing.

 

(e)           Effect of Failure to Deliver Timely Interest Election Request and
Events of Default on Interest Election.  If the Borrower fails to deliver a
timely Interest Election Request

 

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with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing.  Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing:  (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing (and any Interest Election
Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective) and (ii) unless
repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the
end of the Interest Period applicable thereto.

 

Section 2.05          Funding of Borrowings.

 

(a)           Funding by Lenders.  Each Lender shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of immediately
available funds by 12:00 noon, Central time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders.  The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent in Dallas,
Texas and designated by the Borrower in the applicable Borrowing Request;
provided that ABR Loans made to finance the reimbursement of an LC Disbursement
as provided in Section 2.07(e) shall be remitted by the Administrative Agent to
the Issuing Bank.  Nothing herein shall be deemed to obligate any Lender to
obtain the funds for its 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
its Loan in any particular place or manner.

 

(b)           Funding by the Lenders; Presumption by the Administrative Agent. 
Unless the Administrative Agent shall have received notice from a Lender prior
to the proposed date of any Borrowing that such Lender will not make available
to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with Section 2.05(a) and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount.  In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of a payment to be
made by such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation and (ii) in the case of a payment to be made by
the Borrower, the interest rate applicable to ABR Loans.  If the Borrower and
such Lender shall pay such interest to the Administrative Agent for the same or
an overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period.  If
such Lender pays its share of the applicable Borrowing to the Administrative
Agent, then the amount so paid shall constitute such Lender’s Loan included in
such Borrowing.  Any payment by the Borrower shall be without prejudice to any
claim the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.

 

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Section 2.06          Termination and Reduction of Commitments.

 

(a)           Scheduled Termination of Commitments.  Unless previously
terminated, the Commitments shall terminate on the Maturity Date.  If at any
time the Commitments are terminated or reduced to zero, then the Commitments
shall terminate on the effective date of such termination or reduction.

 

(b)           Optional Termination and Reduction of Commitments.

 

(i)            The Borrower may at any time terminate, or from time to time
reduce, the Commitments; provided that (A) each reduction of the Commitments
shall be in an amount that is an integral multiple of $1,000,000 and not less
than $1,000,000 and (B) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance with Section 3.04(b)(i), the total Revolving Credit Exposures would
exceed the total Commitments.

 

(ii)           The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under Section 2.06(b)(i) at
least three (3) Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof.  Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant
to this Section 2.06(b)(ii) shall be irrevocable.

 

(c)           Termination and Reductions of Commitments.  Any termination or
reduction of the Commitments shall be permanent and may not be reinstated except
pursuant to Section 2.08 hereof.  Each reduction of the Commitments shall be
made ratably among the Lenders in accordance with each Lender’s Applicable
Percentage.

 

Section 2.07          Letters of Credit.

 

(a)           General.  Subject to the terms and conditions set forth herein,
the Borrower may request the issuance of dollar denominated Letters of Credit
for its own account or for the account of any of its Subsidiaries, in a form
reasonably acceptable to the Administrative Agent and the Issuing Bank, at any
time and from time to time during the Availability Period; provided that the
Borrower may not request the issuance, amendment, renewal or extension of
Letters of Credit hereunder, if, after giving effect to such issuance,
amendment, renewal or extension, the LC Exposure would exceed the LC Commitment,
the Long Term LC Exposure would exceed the Long Term LC Sublimit, or the total
Revolving Credit Exposures would exceed the total Commitments.  In the event of
any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any Letter of Credit Agreement, the terms and conditions
of this Agreement shall control.

 

(b)           Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions.  The Existing Letters of Credit shall be deemed to have been issued
hereunder as of the Effective Date.  To request the issuance of a Letter of
Credit (or the amendment, renewal or extension of an outstanding Letter of
Credit), the Borrower shall hand deliver or fax (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank and the Administrative Agent (not less than three
(3) Business Days in advance of the requested date of issuance, amendment,
renewal or extension) a notice:

 

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(i)            requesting the issuance of a Letter of Credit or identifying the
Letter of Credit to be amended, renewed or extended;

 

(ii)           specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day);

 

(iii)          specifying the date on which such Letter of Credit is to expire
(which shall comply with Section 2.07(c));

 

(iv)          specifying the amount of such Letter of Credit;

 

(v)           specifying the name and address of the beneficiary thereof and
such other information as shall be necessary to prepare, amend, renew or extend
such Letter of Credit;

 

(vi)          specifying the current total Revolving Credit Exposures (without
regard to the requested Letter of Credit or the requested amendment, renewal or
extension of an outstanding Letter of Credit) and the pro forma total Revolving
Credit Exposures (giving effect to the requested Letter of Credit or the
requested amendment, renewal or extension of an outstanding Letter of Credit);
and

 

(vii)         specifying whether such Letter of Credit will be issued in the
ordinary course for purchases or transportation of natural gas by the Borrower
or any of its Subsidiaries (and as a result the obligations of the Borrower and
its Consolidated Subsidiaries in respect of such Letter of Credit will be
excluded from the calculation of Consolidated Total Funded Indebtedness).

 

Each notice shall constitute a representation and warranty with respect to the
information set forth therein and that after giving effect to the requested
issuance, amendment, renewal or extension, as applicable, (A) the LC Exposure
shall not exceed the LC Commitment, (B) the Long Term LC Exposure shall not
exceed the Long Term LC Sublimit, (C) the total Revolving Credit Exposures shall
not exceed the total Commitments, and (D) each condition precedent set forth in
Section 6.02 has been satisfied with respect to such Letter of Credit.

 

If requested by the Issuing Bank, the Borrower also shall submit a letter of
credit application on the Issuing Bank’s standard form in connection with any
request for a Letter of Credit.

 

(c)           Expiration Date.  Each Letter of Credit (other than Long Term LCs)
shall expire at or prior to the close of business on the earlier of (i) the date
one (1) year after the date of the issuance of such Letter of Credit (or, in the
case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is ten (10) Business Days prior to the
Maturity Date.  Each Letter of Credit with a one (1) year term may provide for
the renewal thereof for additional one (1) year periods; provided that no such
period shall extend beyond the date described in clause (ii) above.  Each Long
Term LC shall expire at the close of business on or prior to the date that is
ten (10) Business Days prior to the Maturity Date, and no Long Term LC may
provide for the renewal thereof for additional periods.

 

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(d)           Participations.  By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit.  In consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of the Issuing Bank, such Lender’s Applicable Percentage of each
LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on
the date due as provided in Section 2.07(e), or of any reimbursement payment
required to be refunded to the Borrower for any reason.  Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this Section 2.07(d) in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default or the reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.

 

(e)           Reimbursement.  If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 11:00 a.m., Central time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 9:00 a.m., Central time, on such date, or, if such notice
has not been received by the Borrower prior to such time on such date, then not
later than 11:00 a.m., Central time, on (i) the Business Day that the Borrower
receives such notice, if such notice is received prior to 9:00 a.m., Central
time, on the day of receipt, or (ii) the Business Day immediately following the
day that the Borrower receives such notice, if such notice is not received prior
to such time on the day of receipt; provided that the Borrower shall, subject to
the conditions to Borrowing set forth herein, be deemed to have requested, and
the Borrower does hereby request under such circumstances, that such payment be
financed with an ABR Borrowing in an equivalent amount and, to the extent so
financed, the Borrower’s obligation to make such payment shall be discharged and
replaced by the resulting ABR Borrowing.  If the Borrower fails to make such
payment when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender’s Applicable Percentage thereof.  Promptly following
receipt of such notice, each Lender shall pay to the Administrative Agent its
Applicable Percentage of the payment then due from the Borrower, in the same
manner as provided in Section 2.05 with respect to Loans made by such Lender
(and Section 2.05 shall apply, mutatis mutandis, to the payment obligations of
the Lenders), and the Administrative Agent shall promptly pay to the Issuing
Bank the amounts so received by it from the Lenders.  Promptly following receipt
by the Administrative Agent of any payment from the Borrower pursuant to this
Section 2.07(e), the Administrative Agent shall distribute such payment to the
Issuing Bank or, to the extent that Lenders have made payments pursuant to this
Section 2.07(e) to reimburse the Issuing Bank, then to such Lenders and the
Issuing Bank as their interests may appear.  Any payment made by a Lender
pursuant to this Section 2.07(e) to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of ABR Loans as contemplated above) shall
not constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.

 

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(f)            Obligations Absolute.  The Borrower’s obligation to reimburse LC
Disbursements as provided in Section 2.07(e) shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit, any Letter
of Credit Agreement or this Agreement, or any term or provision therein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit or any Letter of Credit
Agreement, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section 2.07(f), constitute a legal or equitable discharge of, or provide a
right of setoff against, the Borrower’s obligations hereunder.  Neither the
Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related
Parties shall have any liability or responsibility by reason of or in connection
with the issuance or transfer of any Letter of Credit or any payment or failure
to make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), or any error, omission, interruption,
loss or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit (including any document
required to make a drawing thereunder), any error in interpretation of technical
terms or any consequence arising from causes beyond the control of the Issuing
Bank; provided that the foregoing shall not be construed to excuse the Issuing
Bank from liability to the Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by the Borrower to the extent permitted by applicable law) suffered by the
Borrower that are caused by the Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof.  The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised all requisite care in each such
determination.  In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.

 

(g)           Disbursement Procedures.  The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit.  The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
facsimile) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.

 

(h)           Interim Interest.  If the Issuing Bank shall make any LC
Disbursement, then, until the Borrower shall have reimbursed the Issuing Bank
for such LC Disbursement (either with its own funds or a Borrowing under
Section 2.07(e)), the unpaid amount thereof shall bear interest, for each day
from and including the date such LC Disbursement is made to

 

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but excluding the date that the Borrower reimburses such LC Disbursement, at the
rate per annum then applicable to ABR Loans.  Interest accrued pursuant to this
Section 2.07(h) shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Lender pursuant to
Section 2.07(e) to reimburse the Issuing Bank shall be for the account of such
Lender to the extent of such payment.

 

(i)            Replacement of the Issuing Bank.  The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank.  The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank.  At the time any such replacement becomes effective, the Borrower
shall pay all unpaid fees accrued for the account of the replaced Issuing Bank
pursuant to Section 3.05(a).  From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term “Issuing
Bank” shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require.  After the replacement of the Issuing Bank hereunder, the replaced
Issuing Bank shall remain a party hereto and shall continue to have all the
rights and obligations of the Issuing Bank under this Agreement with respect to
Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.

 

(j)            Cash Collateralization.  If (i) any Event of Default shall occur
and be continuing and the Borrower receives notice from the Administrative Agent
or the Required Lenders demanding the deposit of cash collateral pursuant to
this Section 2.07(j), or (ii) the Borrower is required to pay to the
Administrative Agent the excess attributable to an LC Exposure in connection
with any prepayment pursuant to Section 3.04(b)(i), then the Borrower shall
deposit, in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders, an amount in cash equal
to, in the case of an Event of Default, the LC Exposure, and in the case of a
payment required by Section 3.04(b)(i), the amount of such excess as provided in
Section 3.04(b)(i), as of such date plus any accrued and unpaid interest
thereon; provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to the Borrower or any Subsidiary described in
Section 10.01(h) or Section 10.01(i).  The Borrower hereby grants to the
Administrative Agent, for the benefit of the Issuing Bank and the Lenders, an
exclusive first priority and continuing perfected security interest in and Lien
on such account and all cash, checks, drafts, certificates and instruments, if
any, from time to time deposited or held in such account, all deposits or wire
transfers made thereto, any and all investments purchased with funds deposited
in such account, all interest, dividends, cash, instruments, financial assets
and other Property from time to time received, receivable or otherwise payable
in respect of, or in exchange for, any or all of the foregoing, and all
proceeds, products, accessions, rents, profits, income and benefits therefrom,
and any substitutions and replacements therefor.  The Borrower’s obligation to
deposit amounts pursuant to this Section 2.07(j) shall be absolute and
unconditional, without regard to whether any beneficiary of any such Letter of
Credit has attempted to draw down all or a portion of such amount under the
terms of a Letter of Credit, and, to the fullest extent permitted by applicable
law, shall not be subject to any defense or be affected by a right of set-off,
counterclaim or recoupment which the Borrower or any of its

 

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Subsidiaries may now or hereafter have against any such beneficiary, the Issuing
Bank, the Administrative Agent, the Lenders or any other Person for any reason
whatsoever.  Such deposit shall be held as collateral securing the payment and
performance of the Borrower’s and the Guarantor’s obligations under this
Agreement and the other Loan Documents.  The Administrative Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account.  Other than any interest earned on the investment of such
deposits, which investments shall be made at the option and sole discretion of
the Administrative Agent and at the Borrower’s risk and expense, such deposits
shall not bear interest.  Interest or profits, if any, on such investments shall
accumulate in such account.  Moneys in such account shall be applied by the
Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated, be applied to satisfy other obligations of the Borrower and the
Guarantors under this Agreement or the other Loan Documents.  If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, and the Borrower is not otherwise required to
pay to the Administrative Agent the excess attributable to an LC Exposure in
connection with any prepayment pursuant to Section 3.04(b)(i), then such amount
(to the extent not applied as aforesaid) shall be returned to the Borrower
within three (3) Business Days after all Events of Default have been cured or
waived.

 

Section 2.08          Optional Increase in Commitments.

 

(a)           The Borrower shall have the right to increase the total
Commitments by obtaining additional Commitments, from one or more of the Lenders
and/or one or more other lending institutions, on the condition that (i) no
Lender shall be obligated to increase its Commitment, (ii) any such request for
an increase shall be in an aggregate amount that is an integral multiple of
$5,000,000 and not less than $10,000,000, (iii) the Borrower may make a maximum
of two such requests, (iv) the Administrative Agent has approved the identity of
any such new Lender, such approval not to be unreasonably withheld, conditioned
or delayed, (v) any such new Lender assumes all of the rights and obligations of
a “Lender” hereunder, and (vi) the Borrower has delivered to the Administrative
Agent a certificate of each Loan Party (in sufficient copies for each Lender)
signed by an authorized officer of such Loan Party (A) certifying and attaching
the resolutions adopted by such Loan Party approving or consenting to such
increase, and (B) in the case of the Borrower, certifying that, before and after
giving effect to such increase, the conditions set forth in Sections 6.02(a) and
(b) are satisfied.

 

(b)           Any amendment hereto in connection with an increase of the total
Commitments pursuant to Section 2.08(a) shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall only require the
written signatures of the Administrative Agent, the Borrower and the
Lender(s) being added or increasing their respective Commitment(s), as
applicable, subject only to the approval of all Lenders if any such increase
would cause the aggregate Commitments to exceed $450,000,000.

 

(c)           Within a reasonable time after the effective date of any increase
in the total Commitments pursuant to Section 2.08(a), the Administrative Agent
shall, and is hereby authorized and directed to, revise Annex I to reflect such
increase and shall distribute such

 

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revised Annex I to each of the Lenders and the Borrower, whereupon such revised
Annex I shall replace the old Annex I and become part of this Agreement.  On the
Business Day following any such increase, unless all Lenders have increased
their Commitments proportionately and there is no newly added Lender, the
Lender(s) and/or the newly added Lender(s), as applicable, shall purchase a pro
rata portion of the outstanding Loans (and participation interests in Letters of
Credit) of each of the other Lenders (and such Lenders hereby agree to sell and
to take all such further action to effectuate such sale) such that each Lender
(including any newly added Lender, if applicable) shall hold its Applicable
Percentage of the outstanding Loans (and participation interests) after giving
effect to the increase in the Commitments.  Eurodollar Loans shall not be
reallocated among the Lenders prior to the expiration of the applicable Interest
Period in effect at the time of any such increase.

 

ARTICLE III
Payments of Principal and Interest; Prepayments; Fees

 

Section 3.01          Repayment of Loans.  The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of each Lender the
then unpaid principal amount of each Loan on the Termination Date.

 

Section 3.02          Interest.

 

(a)           ABR Loans.  The Loans comprising each ABR Borrowing shall bear
interest at the Alternate Base Rate plus the Applicable Margin, but in no event
to exceed the Highest Lawful Rate.

 

(b)           Eurodollar Loans.  The Loans comprising each Eurodollar Borrowing
shall bear interest at the sum of (i) the Adjusted LIBO Rate for the Interest
Period in effect for such Borrowing plus (ii) the Applicable Margin, but in no
event to exceed the Highest Lawful Rate.

 

(c)           Post-Default Rate.  Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing, or if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower or any other Loan
Party hereunder or under any other Loan Document is not paid when due, whether
at stated maturity, upon acceleration or otherwise, then all Loans outstanding,
in the case of an Event of Default, and such overdue amount, in the case of a
failure to pay amounts when due, shall bear interest, after as well as before
judgment, at a rate per annum equal to two percent (2%) plus the rate applicable
to ABR Loans as provided in Section 3.02(a), but in no event to exceed the
Highest Lawful Rate.

 

(d)           Interest Payment Dates.  Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan, on the Maturity
Date and upon termination of the Commitments; provided that (i) interest accrued
pursuant to Section 3.02(c) shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than an optional prepayment of an ABR
Loan prior to the Termination Date), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment,
and (iii) in the event of any conversion of any Eurodollar Loan prior to the end
of

 

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the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

 

(e)           Interest Rate Computations.  All interest hereunder shall be
computed on the basis of a year of 360 days, unless such computation would
exceed the Highest Lawful Rate, in which case interest shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), except that interest
computed by reference to the Alternate Base Rate at times when the Alternate
Base Rate is based on the Prime Rate shall be computed on the basis of a year of
365 days (or 366 days in a leap year), and in each case shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall
be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error, and be binding upon the parties hereto.

 

Section 3.03          Alternate Rate of Interest.  If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:

 

(a)           the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate for such Interest
Period; or

 

(b)           the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or facsimile as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made either as an ABR Borrowing or at an alternate rate of
interest determined by the Required Lenders as their cost of funds.

 

Section 3.04          Prepayments.

 

(a)           Optional Prepayments.

 

(i)            The Borrower shall have the right at any time and from time to
time to prepay any Borrowing in whole or in part, subject to prior notice in
accordance with Section 3.04(a)(ii).

 

(ii)           The Borrower shall notify the Administrative Agent by telephone
(confirmed by facsimile or e-mail) of any prepayment hereunder (A) in the case
of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., Central
time, three (3) Business Days before the date of prepayment, or (B) in the case
of prepayment of an ABR Borrowing, not later than 11:00 a.m., Central time, one
(1) Business Day before the date of prepayment.  Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of

 

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each Borrowing or portion thereof to be prepaid.  Promptly following receipt of
any such notice relating to a Borrowing, the Administrative Agent shall advise
the Lenders of the contents thereof.  Each partial prepayment of any Borrowing
shall be in an amount that would be permitted in the case of an advance of a
Borrowing of the same Type as provided in Section 2.02.  Each prepayment of a
Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing.  Prepayments pursuant to Section 3.04(a) shall be accompanied by
accrued interest to the extent required by Section 3.02.

 

(b)           Mandatory Prepayments.

 

(i)            If, after giving effect to any termination or reduction of the
Commitments pursuant to Section 2.06(b), the total Revolving Credit Exposures
exceeds the total Commitments, then the Borrower shall (A) prepay the Borrowings
on the date of such termination or reduction in an aggregate principal amount
equal to such excess, and (B) if any excess remains after prepaying all of the
Borrowings as a result of an LC Exposure, pay to the Administrative Agent on
behalf of the Lenders an amount equal to such excess to be held as cash
collateral as provided in Section 2.07(j).

 

(ii)           On each date on or after the Effective Date upon which the
Borrower or any Subsidiary receives any cash proceeds from any Asset Sale made
pursuant to Section 9.11(i), an amount equal to 100% of the Net Sale Proceeds
therefrom shall be applied by the Borrower on such date as a mandatory repayment
in accordance with Section 3.04(b)(iv); provided, however, that such Net Sale
Proceeds shall not be required to be so applied on such date so long as no Event
of Default then exists and such Net Sale Proceeds shall be used to purchase
Property (other than inventory and working capital) used or to be used in the
businesses permitted pursuant to Section 9.06 within 180 days following the date
of such Asset Sale, and provided, further, that if all or any portion of such
Net Sale Proceeds not required to be so applied as provided above in this
Section 3.04(b)(ii) are not so reinvested within such 180-day period (or such
earlier date, if any, as the Borrower or relevant Subsidiary determines not to
reinvest the Net Sale Proceeds from such Asset Sale as set forth above), such
remaining portion shall be applied on the last day of such period (or such
earlier date, as the case may be) as provided above in this
Section 3.04(b)(ii) without regard to the preceding proviso.

 

(iii)          On each date on or after the Effective Date upon which the
Borrower or any Subsidiary receives any cash proceeds from any Recovery Event,
an amount equal to 100% of the Net Cash Proceeds from such Recovery Event shall
be applied on such date as a mandatory repayment in accordance with the
requirements of Section 3.04(b)(iv); provided, however, that so long as no Event
of Default then exists, such Net Cash Proceeds shall not be required to be so
applied on such date to the extent that such Net Cash Proceeds shall be used to
replace or restore any Property in respect of which such Net Cash Proceeds were
paid within 180 days following the date of the receipt of such Net Cash
Proceeds, and provided, further, that if all or any portion of such Net Cash
Proceeds are not so used within 180 days after the date of the receipt of such
Net Cash Proceeds (or such earlier date, if any, as the Borrower or relevant
Subsidiary determines not to reinvest the Net Cash Proceeds relating to such
Recovery Event as set forth above), such remaining portion shall be applied on
the last day of such period (or such earlier date, as the case may be) as
provided above in this Section 3.04(b)(iii) without regard to the proviso or the
immediately preceding proviso.

 

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(iv)          Each prepayment of Borrowings pursuant to this
Section 3.04(b) shall be applied ratably to the Loans included in the prepaid
Borrowings.  Each prepayment pursuant to Section 3.04(b)(i) shall be applied to
any outstanding Borrowings and the LC Exposure as described in
Section 3.04(b)(i).  Prepayments pursuant to Section 3.04(b) shall be
accompanied by accrued interest to the extent required by Section 3.02.  Each
prepayment of Borrowings pursuant to Section 3.04(b) shall be applied, first,
ratably to any ABR Borrowings of then outstanding, and, second, to any
Eurodollar Borrowings then outstanding, and if more than one Eurodollar
Borrowing is then outstanding, to each such Eurodollar Borrowing in order of
priority beginning with the Eurodollar Borrowing with the least number of days
remaining in the Interest Period applicable thereto and ending with the
Eurodollar Borrowing with the most number of days remaining in the Interest
Period applicable thereto.

 

(v)           If the Borrower is required to make a mandatory prepayment of
Eurodollar Borrowings under this Section 3.04, the Borrower shall have the
right, in lieu of making such prepayment in full, to deposit an amount equal to
such mandatory prepayment with the Administrative Agent in a cash collateral
account maintained (pursuant to documentation reasonably satisfactory to the
Administrative Agent) by and in the sole dominion and control of the
Administrative Agent.  Any amounts so deposited shall be held by the
Administrative Agent as collateral for the prepayment of such Eurodollar Rate
Loans and shall be applied to the prepayment of the applicable Eurodollar Rate
Loans at the end of the current Interest Periods applicable thereto.  At the
request of the Borrower, amounts so deposited shall be invested by the
Administrative Agent in Cash Equivalents maturing prior to the date or dates on
which it is anticipated that such amounts will be applied to prepay such
Eurodollar Rate Loans; any interest earned on such Cash Equivalents will be for
the account of the Borrower and the Borrower will deposit with the
Administrative Agent the amount of any loss on any such Cash Equivalents to the
extent necessary in order that the amount of the prepayment to be made with the
deposited amounts may not be reduced.

 

(c)           No Premium or Penalty.  Prepayments permitted or required under
this Section 3.04 shall be without premium or penalty, except as required under
Section 5.02.

 

(d)           No Permanent Reduction in Commitments.  No prepayment permitted or
required under this Section 3.04 shall cause, effect or result in any permanent
reductions in the Lenders’ Commitments.

 

Section 3.05          Fees.

 

(a)           Commitment Fees.  The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee, which shall accrue at the
applicable Commitment Fee Rate on the average daily amount of the unused amount
of the Commitment of such Lender during the period from and including the date
of this Agreement to but excluding the Termination Date.  Accrued commitment
fees shall be payable in arrears on the last day of March, June, September and
December of each year and on the Termination Date, commencing on the first such
date to occur after the date hereof.  The commitment fee shall be computed on
the basis of a year of 360 days, unless such computation would exceed the
Highest Lawful Rate, in which case interest shall be computed on the basis of a
year of 365 days (or 366 days in a leap year), and shall be payable for the
actual number of days elapsed (including the first day but

 

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excluding the last day).  For avoidance of doubt, the “unused amount” of the
Commitment of any Lender shall be determined by subtracting such Lender’s
Revolving Credit Exposure on the date of determination from such Lender’s
Commitment on such date of determination.

 

(b)           Letter of Credit Fees.  The Borrower agrees to pay (i) to the
Administrative Agent for the account of each Lender a participation fee with
respect to its participations in Letters of Credit, which shall accrue at the
same Applicable Margin used to determine the interest rate applicable to
Eurodollar Loans on the average daily amount of such Lender’s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the date of this Agreement to but excluding
the later of the date on which such Lender’s Commitment terminates and the date
on which such Lender ceases to have any LC Exposure, (ii) to the Issuing Bank,
for its own account, a fronting fee equal to 0.125% of the stated amount of each
Letter of Credit payable on the date of issuance of such Letter of Credit,
provided that in no event shall such fronting fee be less than $750.00 for any
Letter of Credit, and (iii) to the Issuing Bank, for its own account, its
standard fees with respect to the issuance, amendment, transfer, renewal or
extension of any Letter of Credit or processing of drawings thereunder payable
upon the effectiveness thereof.  Participation fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third (3rd) Business Day following such last day, commencing
on the first such date to occur after the date of this Agreement; provided that
all such fees shall be payable on the Termination Date and any such fees
accruing after the Termination Date shall be payable on demand.  Any other fees
payable to the Issuing Bank pursuant to this Section 3.05(b) shall be payable
within ten (10) days after demand.  All participation fees and fronting fees
shall be computed on the basis of a year of 360 days, unless such computation
would exceed the Highest Lawful Rate, in which case interest shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).

 

(c)           Administrative Agent Fees.  The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times set forth in the Fee Letter.

 

ARTICLE IV
Payments; Pro Rata Treatment; Sharing of Set-offs

 

Section 4.01          Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.

 

(a)           Payments by the Borrower.  The Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 5.01,
Section 5.02, Section 5.03 or otherwise) prior to 11:00 a.m., Central time, on
the date when due, in immediately available funds, without defense, deduction,
recoupment, set-off or counterclaim.  Fees, once paid, shall be fully earned and
shall not be refundable under any circumstances.  Any amounts received after
such time on any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon.  All such payments shall be made to the
Administrative Agent at its offices specified in Section 12.01, except payments
to be made directly to the Issuing Bank as expressly provided herein and

 

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except that payments pursuant to Section 5.01, Section 5.02, Section 5.03 and
Section 12.03 shall be made directly to the Persons entitled thereto.  The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof.  If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension.  All payments
hereunder shall be made in dollars.

 

(b)           Application of Insufficient Payments.  If at any time insufficient
funds are received by and available to the Administrative Agent to pay fully all
amounts of principal, unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, towards payment of principal and unreimbursed LC Disbursements then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such parties.

 

(c)           Sharing of Payments by Lenders.  If any Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans or other obligations
hereunder resulting in such Lender receiving payment of a proportion of the
aggregate amount of its Loans and other such obligations greater than its pro
rata share thereof as provided herein, then the Lender receiving such greater
proportion shall (i) notify the Administrative Agent of such fact, and
(ii) purchase (for cash at face value) participations in the Loans and such
other obligations of the other Lenders, or make such other adjustments as shall
be equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and other amounts owing them;
provided that (A) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (B) the provisions of this Section 4.01 shall
not be construed to apply to (1) any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or (2) any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to any
assignee or participant.  Each Loan Party consents to the foregoing and agrees,
to the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against each Loan Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of each Loan
Party in the amount of such participation.

 

Section 4.02          Payments by the Borrower; Presumptions by the
Administrative Agent.  Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
the Issuing Bank, as the case may be, the amount due.  In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or the
Issuing Bank, as the case may be, severally agrees to repay to the

 

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Administrative Agent forthwith on demand the amount so distributed to such
Lender or the Issuing Bank, with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

 

Section 4.03          Certain Deductions by the Administrative Agent.  If any
Lender shall fail to make any payment required to be made by it pursuant to
Section 2.05(a), Section 2.07(d), Section 2.07(e), Section 4.02 or otherwise
hereunder then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), (a) apply any amounts thereafter received by the
Administrative Agent for the account of such Lender and for the benefit of the
Administrative Agent or the Issuing Bank to satisfy such Lender’s obligations
hereunder until all such unsatisfied obligations are fully paid and/or (b) hold
any such amounts in a segregated account as cash collateral for, and application
to, any future funding obligations of such Lender hereunder, in the case of each
of (a) and (b) above, in any order as determined by the Administrative Agent in
its discretion.

 

Section 4.04          Defaulting Lenders.  Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:

 

(a)           fees shall cease to accrue on the unfunded portion of the
Commitment of such Defaulting Lender pursuant to Section 3.05(a);

 

(b)           the Commitment and the Revolving Credit Exposure of such
Defaulting Lender shall not be included in determining whether all Lenders or
the Required Lenders have taken or may take any action hereunder (including any
consent to any amendment or waiver pursuant to Section 12.02), provided that any
waiver, amendment or modification requiring the consent of all Lenders or each
adversely affected Lender which affects such Defaulting Lender differently than
all other Lenders or all other adversely affected Lenders, as the case may be,
shall require the consent of such Defaulting Lender;

 

(c)           if any LC Exposure exists at the time a Lender becomes a
Defaulting Lender then:

 

(i)            all or any part of such LC Exposure shall be reallocated among
the non-Defaulting Lenders in accordance with their respective Applicable
Percentages but only to the extent (A) the sum of all non-Defaulting Lenders’
Revolving Credit Exposures plus such Defaulting Lender’s LC Exposure does not
exceed the total of all non-Defaulting Lenders’ Commitments and (B) the
conditions set forth in Section 6.02 are satisfied at such time; and

 

(ii)           if the reallocation described in clause (i) above cannot, or can
only partially, be effected, the Borrower shall within one (1) Business Day
following notice by the Administrative Agent cash collateralize such Defaulting
Lender’s LC Exposure (after giving effect to any partial reallocation pursuant
to clause (i) above) in accordance with the procedures set forth in
Section 2.07(j) for so long as such LC Exposure is outstanding;

 

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(iii)          if the Borrower cash collateralizes any portion of such
Defaulting Lender’s LC Exposure pursuant to this Section 4.04(c), the Borrower
shall not be required to pay any fees to such Defaulting Lender pursuant to
Section 3.05(b) with respect to such Defaulting Lender’s LC Exposure during the
period such Defaulting Lender’s LC Exposure is cash collateralized;

 

(iv)          if the LC Exposure of the non-Defaulting Lenders is reallocated
pursuant to this Section 4.04(c), then the fees payable to the Lenders pursuant
to Section 3.05(a) and Section 3.05(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages; or

 

(v)           if any Defaulting Lender’s LC Exposure is neither cash
collateralized nor reallocated pursuant to this Section 4.04(c), then, without
prejudice to any rights or remedies of the Issuing Bank or any Lender hereunder,
all commitment fees that otherwise would have been payable to such Defaulting
Lender (solely with respect to the portion of such Defaulting Lender’s
Commitment that was utilized by such LC Exposure) under Section 3.05(a) and
letter of credit fees payable under Section 3.05(b) with respect to such
Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until such
LC Exposure is cash collateralized and/or reallocated; and

 

(d)           so long as any Lender is a Defaulting Lender, the Issuing Bank
shall not be required to issue, amend or increase any Letter of Credit, unless
it is satisfied that the related exposure will be 100% covered by the
Commitments of the non-Defaulting Lenders and/or cash collateral will be
provided by the Borrower in accordance with Section 4.04(c), and participating
interests in any such newly issued or increased Letter of Credit shall be
allocated among non-Defaulting Lenders in a manner consistent with
Section 4.01(c)(i) (and any Defaulting Lender shall not participate therein).

 

In the event that the Administrative Agent, the Borrower and the Issuing Bank
each agrees that a Defaulting Lender has adequately remedied all matters that
caused such Defaulting Lender to be a Defaulting Lender, then the LC Exposure of
the non-Defaulting Lenders shall be readjusted to reflect the inclusion of such
Defaulting Lender’s Commitment and on such date such Defaulting Lender shall
purchase at par such of the Loans of the other Lenders as the Administrative
Agent shall determine may be necessary in order for such Defaulting Lender to
hold such Loans in accordance with its Applicable Percentage.

 

ARTICLE V
Increased Costs; Break Funding Payments; Taxes; Illegality

 

Section 5.01          Increased Costs.

 

(a)           Increased Costs Generally.  If any Change in Law shall:

 

(i)            impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
any Lender (except any reserve requirement reflected in the Adjusted LIBO Rate)
or the Issuing Bank;

 

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(ii)           subject any Lender or the Issuing Bank to any Tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit , any
participation in a Letter of Credit or any Eurodollar Loan made by it, or change
the basis of taxation of payments to such Lender or the Issuing Bank in respect
thereof (except for Indemnified Taxes or Other Taxes covered by Section 5.03 and
the imposition of, or any change in the rate of, any Excluded Tax payable by
such Lender or the Issuing Bank); or

 

(iii)          impose on any Lender or the Issuing Bank or the London interbank
market any other condition, cost or expense affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or participation
therein;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit
(or of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender or the Issuing Bank hereunder (whether of principal, interest or any
other amount), then, upon request of such Lender or the Issuing Bank, the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.

 

(b)           Capital Requirements.  If any Lender or the Issuing Bank
determines that any Change in Law regarding capital or liquidity requirements
and affecting such Lender or the Issuing Bank or any lending office of such
Lender or such Lender’s or the Issuing Bank’s holding company, if any, has or
would have the effect of reducing the rate of return on such Lender’s or the
Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s
holding company, if any, as a consequence of this Agreement, the Commitments of
such Lender or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s or the Issuing Bank’s policies and the policies
of such Lender’s or the Issuing Bank’s holding company with respect to capital
adequacy and liquidity), then from time to time the Borrower will pay to such
Lender or the Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuing Bank or such Lender’s or
the Issuing Bank’s holding company for any such reduction suffered.

 

(c)           Certificates for Reimbursement.  A certificate of a Lender or the
Issuing Bank setting forth the amount or amounts necessary to compensate such
Lender or the Issuing Bank or its holding company, as the case may be, as
specified in Sections 5.01(a) or (b) and delivered to the Borrower shall be
conclusive absent manifest error.  The Borrower shall pay such Lender or the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within ten (10) days after receipt thereof.

 

(d)           Effect of Failure or Delay in Requesting Compensation.  Failure or
delay on the part of any Lender or the Issuing Bank to demand compensation
pursuant to this Section 5.01 shall not constitute a waiver of such Lender’s or
the Issuing Bank’s right to demand such

 

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compensation; provided that the Borrower shall not be required to compensate a
Lender or the Issuing Bank pursuant to this Section 5.01 for any increased costs
incurred or reductions suffered more than 365 days prior to the date that such
Lender or the Issuing Bank, as the case may be, notifies the Borrower of the
Change in Law giving rise to such increased costs or reductions and of such
Lender’s or the Issuing Bank’s intention to claim compensation therefor;
provided, further, that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the 365-day period referred to above
shall be extended to include the period of retroactive effect thereof.

 

Section 5.02          Break Funding Payments.  In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan into an ABR Loan other than
on the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Eurodollar Loan on the date specified in
any notice delivered pursuant hereto, or (d) the assignment of any Eurodollar
Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by the Borrower pursuant to Section 5.04(b), then, in any
such event, the Borrower shall compensate each Lender for the loss, cost and
expense attributable to such event.  In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market.

 

A certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 5.02 shall be delivered to the
Borrower and shall be conclusive absent manifest error.  The Borrower shall pay
such Lender the amount shown as due on any such certificate within ten (10) days
after receipt thereof.

 

Section 5.03          Taxes.

 

(a)           Payments Free of Taxes.  Any and all payments by or on account of
any obligation of the Borrower or any Guarantor under any Loan Document shall be
made free and clear of and without deduction or withholding for any Indemnified
Taxes or Other Taxes; provided that if the Borrower or any Guarantor shall be
required by applicable law to deduct any Indemnified Taxes or Other Taxes from
such payments, then (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 5.03(a)), the Administrative Agent,
Lender or Issuing Bank, as the case may be, receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the Borrower or
such Guarantor shall make such deductions and (iii) the Borrower or such
Guarantor shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

 

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(b)           Payment of Other Taxes by the Borrower.  Without limiting the
provisions of Section 5.03(a), the Borrower shall timely pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.

 

(c)           Indemnification by the Borrower.  The Borrower shall indemnify the
Administrative Agent, each Lender and the Issuing Bank, within ten (10) days
after demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 5.03) paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder, and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the amount of such payment or liability under
this Section 5.03 delivered to the Borrower by a Lender or the Issuing Bank
(with a copy to the Administrative Agent), or by the Administrative Agent on its
own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive
absent manifest error.

 

(d)           Indemnification by the Lenders.  Each Lender shall severally
indemnify the Administrative Agent, within 10 days after demand therefor, for
(i) any Indemnified Taxes attributable to such Lender (but only to the extent
that Borrower has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Borrower to do so),
(ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 12.04(c) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority.  A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error.  Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (d).

 

(e)           Evidence of Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower or a Guarantor to a
Governmental Authority, the Borrower shall deliver to the Administrative Agent
the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Administrative
Agent.

 

(f)            Status of Lenders.

 

(i)            Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments made under this Agreement or any other
Loan Document shall deliver to the Withholding Agent (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Withholding Agent, such properly completed and
executed documentation prescribed by applicable law as

 

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will permit such payments to be made without withholding or at a reduced rate of
withholding.  In addition, any Lender, if requested by the Withholding Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Withholding Agent as will enable the Withholding
Agent to determine whether or not such Lender is subject to backup withholding
or information reporting requirements.  Notwithstanding anything to the contrary
in the preceding two sentences, the completion, execution, and submission of
such documentation (other than such documentation set forth in
Section 5.03(f)(ii)(A) and (f)(ii)(B) and Section 5.03(g) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution, or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

 

(ii)           Without limiting the generality of the foregoing, in the event
that the Borrower is a “United States person” as defined in section 7701(a)(30)
of the Code,

 

(A)          any Lender that is a “United States person” as defined in section
7701(a)(30) of the Code shall deliver to the Withholding Agent on or prior to
the date on which such Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the request of the Withholding Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from United
States federal backup withholding tax;

 

(B)          any Foreign Lender shall, to the extent it is legally entitled to
do so, deliver to the Withholding Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
request of the Withholding Agent, but only if such Foreign Lender is legally
entitled to do so), whichever of the following is applicable:

 

(1)           in the case of a Foreign Lender claiming the benefits of an income
tax treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from or reduction of, United States federal
withholding tax pursuant to the “interest” article of such tax treaty and
(y) with respect to any other applicable payments under any Loan Document, IRS
Form W-8BEN establishing an exemption from, or reduction of, United States
federal withholding tax pursuant to the “business profits” or “other income”
article of such tax treaty;

 

(2)           executed originals of IRS Form W-8ECI;

 

(3)           in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code,  (x) a
certificate substantially in the form of Exhibit G-1 to the effect that such
Foreign Lender is not a “bank” within the meaning of section 881(c)(3)(A) of the
Code, a “10 percent shareholder” of the Borrower within the meaning of section
871(h)(3)(B) of the Code, or a “controlled foreign corporation” described in
section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”), and
(y) executed originals of IRS Form W-8BEN; or

 

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(4)           to the extent a Foreign Lender is not the beneficial owner,
executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS
Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of
Exhibit G-2 or Exhibit G-3, IRS Form W-9, and/or other certification documents
from each beneficial owner, as applicable; provided that if the Foreign Lender
is a partnership and one or more direct or indirect partners of such Foreign
Lender are claiming the portfolio interest exemption, such Foreign Lender may
provide a U.S. Tax Compliance Certificate substantially in the form of
Exhibit G-4 on behalf of each such direct and indirect partner; and

 

(5)           any Foreign Lender shall, to the extent it is legally entitled to
do so, deliver to the Withholding Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Withholding Agent), executed originals of any other
form prescribed by applicable law as a basis for claiming exemption from or a
reduction in United States federal withholding tax, duly completed, together
with such supplementary documentation as may be prescribed by applicable law to
permit the Withholding Agent to determine the withholding or deduction required
to be made.

 

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification, or promptly notify the Withholding Agent in writing of
its legal inability to do so.

 

(g)           Treatment of Certain Refunds.  If the Administrative Agent, a
Lender or the Issuing Bank determines, in its sole discretion, that it has
received a refund of any Indemnified Taxes or Other Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 5.03, it shall pay to the Borrower
an amount equal to such refund (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this Section 5.03 with
respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net
of all out-of-pocket expenses of the Administrative Agent, such Lender or the
Issuing Bank, as the case may be, and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund);
provided that the Borrower, upon the request of the Administrative Agent, such
Lender or the Issuing Bank, agrees to repay the amount paid over to the Borrower
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent, such Lender or the Issuing
Bank in the event the Administrative Agent, such Lender or the Issuing Bank is
required to repay such refund to such Governmental Authority.  This Section 5.03
shall not be construed to require the Administrative Agent, any Lender or the
Issuing Bank to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrower or any other
Person.

 

(h)           FATCA.  If a payment made to a Lender under this Agreement would
be subject to United States federal withholding tax imposed by FATCA if such
Lender fails to comply with the applicable reporting requirements of FATCA
(including those contained in section 1471(b) or 1472(b) of the Code, as
applicable), such Lender shall deliver to the

 

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Withholding Agent, at the time or times prescribed by law and at such time or
times reasonably requested by the Withholding Agent, such documentation
prescribed by applicable law (including as prescribed by section
1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably
requested by the Withholding Agent as may be necessary for the Withholding Agent
to comply with its obligations under FATCA, to determine that such Lender has
complied with such Lender’s obligations under FATCA or to determine the amount
to deduct and withhold from such payment.  Solely for the purposes of this
Section 5.03(h), “FATCA” shall include any amendments made to FATCA after the
date of this Agreement.

 

Section 5.04          Mitigation Obligations; Replacement of Lenders.

 

(a)           Designation of Different Lending Office.  If any Lender requests
compensation under Section 5.01, or requires the Borrower to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 5.03, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to
Section 5.01 or Section 5.03, as the case may be, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.

 

(b)           Replacement of Lenders.  If any Lender requests compensation under
Section 5.01, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 5.03, or if any Lender is a Defaulting Lender, then the Borrower may, at
its sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 12.04(a)), all of its interests, rights and obligations
under this Agreement and the related Loan Documents to an assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have paid to the
Administrative Agent the assignment fee specified in Section 12.04(b)(iv),
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder and under the other Loan Documents (including any amounts under
Section 5.02), from the assignee (to the extent of such outstanding principal
and accrued interest and fees) or the Borrower (in the case of all other
amounts), (iii) in the case of any such assignment resulting from a claim for
compensation under Section 5.01 or payments required to be made pursuant to
Section 5.03, such assignment will result in a reduction in such compensation or
payments thereafter, and (iv) such assignment does not conflict with applicable
law.  A Lender shall not be required to make any such assignment or delegation
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

Section 5.05          Illegality.  Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
applicable lending office to honor its

 

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obligation to make or maintain Eurodollar Loans either generally or having a
particular Interest Period hereunder, then (a) such Lender shall promptly notify
the Borrower and the Administrative Agent thereof and such Lender’s obligation
to make such Eurodollar Loans shall be suspended (the “Affected Loans”) until
such time as such Lender may again make and maintain such Eurodollar Loans and
(b) all Affected Loans which would otherwise be made by such Lender shall be
made instead as ABR Loans (and, if such Lender so requests by notice to the
Borrower and the Administrative Agent, all Affected Loans of such Lender then
outstanding shall be automatically converted into ABR Loans on the date
specified by such Lender in such notice) and, to the extent that Affected Loans
are so made as (or converted into) ABR Loans, all payments of principal which
would otherwise be applied to such Lender’s Affected Loans shall be applied
instead to its ABR Loans.

 

ARTICLE VI
Conditions Precedent

 

Section 6.01          Effective Date.  The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder (exclusive of
the Existing Letters of Credit) shall not become effective until the Business
Day on which each of the following conditions is satisfied (or waived in
accordance with Section 12.02):

 

(a)           The Administrative Agent, the Arranger and the Lenders shall have
received all commitment, facility and agency fees and all other fees and amounts
due and payable on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder (including, without limitation, the
fees and expenses of Vinson & Elkins L.L.P., counsel to the Administrative
Agent).

 

(b)           The Borrower shall have deposited $10,000 with Vinson & Elkins
L.L.P., counsel for the Administrative Agent, to be held by such counsel and
applied toward payment of costs and expenses for recordation of certain Security
Instruments, as provided pursuant to Section 12.03(a).  If such deposit exceeds
the amount of such costs and expenses, the excess shall be returned to the
Borrower.  If such deposit is less than such costs and expenses, the deficit
shall be paid by the Borrower pursuant to Section 12.03(a).

 

(c)           The Administrative Agent shall have received a certificate of the
Secretary or an Assistant Secretary of each Loan Party setting forth
(i) resolutions of its board of directors (or its equivalent) with respect to
the authorization of such Loan Party to execute and deliver the Loan Documents
to which it is a party and to enter into the Transactions contemplated in those
documents, (ii) the officers of such Loan Party (A) who are authorized to sign
the Loan Documents to which such Loan Party is a party and (B) who will, until
replaced by another officer or officers duly authorized for that purpose, act as
its representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the Transactions
contemplated hereby, (iii) specimen signatures of such authorized officers, and
(iv) the Organization Documents of such Loan Party, certified as being true and
complete.  The Administrative Agent and the Lenders may conclusively rely on
such certificate until the Administrative Agent receives notice in writing from
such Loan Party to the contrary.

 

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(d)           The Administrative Agent shall have received certificates of the
appropriate state agencies with respect to the existence, qualification and good
standing of each Loan Party.

 

(e)           The Administrative Agent shall have received a compliance
certificate substantially in the form of Exhibit D-1, duly and properly executed
by a Financial Officer and dated as of the Effective Date.

 

(f)            The Administrative Agent shall have received from each party
hereto counterparts (in such number as may be requested by the Administrative
Agent) of this Agreement signed on behalf of such party.

 

(g)           The Administrative Agent shall have received duly executed Notes
payable to the order of each Lender that has requested a Note in a principal
amount equal to its Commitment dated as of the date hereof.

 

(h)           The Administrative Agent shall have received from each party
thereto duly executed counterparts (in such number as may be requested by the
Administrative Agent) of the Security Instruments.  In connection with the
execution and delivery of the Security Instruments, the Administrative Agent
shall:

 

(i)            be reasonably satisfied that the Security Instruments create (or
will create, upon proper filing, recording or registration) first priority,
perfected Liens (subject only to Excepted Liens identified in clauses
(a) through (c) and (e) of the definition thereof, but subject to the provisos
at the end of such definition) on all of the tangible and intangible Property of
the Loan Parties (other than de minimis Property excluded in the Administrative
Agent’s sole discretion); and

 

(ii)           have received certificates, together with undated, blank stock
powers for each such certificate, representing all of the issued and outstanding
Equity Interests of each of the Loan Parties (other than the Borrower), to the
extent certificated.

 

(i)            The Administrative Agent shall have received an opinion of
(i) Gardere Wynne Sewell LLP, special counsel to the Borrower, and (ii) local
counsel in Alabama and Mississippi and any other jurisdictions requested by the
Administrative Agent, in each case, in form and substance satisfactory to the
Administrative Agent.

 

(j)            The Administrative Agent shall have received certificates of
insurance coverage of the Borrower and the other Loan Parties evidencing that
the Borrower and the other Loan Parties are carrying insurance in accordance
with Section 7.12.

 

(k)           The Administrative Agent shall have received a certificate of a
Responsible Officer certifying that the Borrower has received all consents and
approvals required by Section 7.03.

 

(l)            The Administrative Agent shall have received (i) the Financial
Statements, and (ii) projections for the Borrower and its Consolidated
Subsidiaries for each fiscal year of the Borrower through the fiscal year ending
2017, which projections shall be prepared on a quarterly

 

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basis for the first year following the Effective Date and on an annual basis for
each subsequent year.

 

(m)          The Administrative Agent shall have received appropriate UCC search
certificates reflecting no prior Liens encumbering the Properties of the
Borrower and the Subsidiaries for Delaware, Texas, Alabama, and Mississippi, as
applicable, and any other jurisdiction requested by the Administrative Agent;
other than those being assigned or released on or prior to the Effective Date or
Liens permitted by Section 9.03.

 

(n)           The Administrative Agent shall have received appropriate
termination statements, mortgage releases and such other documentation as shall
be necessary to terminate, release or assign to the Administrative Agent all
Liens encumbering the Properties of the Borrower and the Subsidiaries, other
than Liens permitted by Section 9.03, in each case, in proper form for filing,
registration or recordation in the appropriate jurisdictions.

 

(o)           The Administrative Agent shall have received a solvency
certificate from a Financial Officer, in form and substance satisfactory to the
Administrative Agent and the Lenders, certifying that after giving effect to the
Transactions on the Effective Date, (i) each of the Loan Parties, on an
individual basis, is Solvent, and (ii) the Loan Parties, taken as a whole, are
Solvent.

 

(p)           Each document (including any Uniform Commercial Code financing
statement) required by this Agreement or under law or reasonably requested by
the Administrative Agent to be filed, registered or recorded in order to create
in favor of the Administrative Agent, for the benefit of the Lenders, a
perfected Lien on the Collateral described therein, prior and superior in right
to any other Person (other than Excepted Liens), shall be in proper form for
filing, registration or recordation.

 

(q)           The Administrative Agent shall be satisfied in its sole discretion
with the legal, corporate and capital structure of the Loan Parties on the
Effective Date and after giving effect to the Transactions (including the
initial funding of Loans hereunder), and the capital structure of the Borrower
on the Effective Date shall not include any preferred equity.

 

(r)            Since December 31, 2011, no Material Adverse Change has occurred
with respect to the Loan Parties, taken as a whole, or with respect to the “Loan
Parties,” as defined in the Existing Credit Agreement, taken as a whole.

 

(s)            The Specified IPO Transactions shall have been consummated in
accordance with (i) the terms and conditions of the Contribution Documents
(which Contribution Documents shall be in form and substance satisfactory to the
Administrative Agent), (ii) the Registration Statement, (iii) the Partnership
Agreement and (iv) all Governmental Requirements.

 

(t)            The consummation of the Specified IPO Transactions shall have
resulted in Net Cash Proceeds to the Borrower in an amount not less than
$150,000,000.

 

(u)           The aggregate principal amount of the Loan Parties’ Indebtedness
(after giving effect to Loans made on the Effective Date) of the type described
in clause (a) of the definition of “Consolidated Total Funded Indebtedness”
shall not exceed $150,000,000.

 

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(v)           The Administrative Agent shall have received a certificate of a
Responsible Officer certifying (i) that attached to such certificate is a true,
correct, complete and fully-executed copy of the Contribution Agreement
(together with all amendments thereto, if any), and (ii) that the conditions
contained in clauses (s), (t), and (u) of this Section 6.01 have been satisfied.

 

(w)          The Administrative Agent shall have received evidence reasonably
satisfactory to it that the Existing Borrower’s good faith estimated
Consolidated EBITDA (as defined in the Existing Credit Agreement) for the
four-quarter period ending on September 30, 2012 was not less than $39,000,000.

 

(x)           The Administrative Agent shall have received evidence reasonably
satisfactory to Administrative Agent that all Existing Letters of Credit issued
in the name and on behalf of the account of the Existing Borrower pursuant to
the Existing Credit Agreement have been novated in the name and on behalf of the
account of the Borrower.

 

(y)           The Administrative Agent shall have received such other documents
as the Administrative Agent or special counsel to the Administrative Agent may
reasonably request.

 

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. 
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 12.02) at or prior to 5:00 p.m., Central time, on
December 31, 2012 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).

 

Section 6.02          Each Credit Event.  The obligation of each Lender to make
a Loan on the occasion of any Borrowing (including the initial funding), and of
the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is
subject to the satisfaction of the following conditions:

 

(a)           At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing.

 

(b)           The representations and warranties of the Borrower and the
Guarantors set forth in this Agreement and in the other Loan Documents shall be
true and correct in all material respects on and as of the date of such
Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, except that (i) to the extent any such
representations and warranties are expressly limited to an earlier date, in
which case, on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, such
representations and warranties shall continue to be true and correct in all
material respects as of such specified earlier date, and (ii) to the extent that
any such representations and warranties are qualified by materiality, such
representations and warranties shall continue to be true and correct in all
respects.

 

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(c)           The receipt by the Administrative Agent of a Borrowing Request in
accordance with Section 2.03 or a request for a Letter of Credit and related
Letter of Credit Agreement in accordance with Section 2.07(b), as applicable.

 

Each request for a Borrowing and each request for the issuance, amendment,
renewal or extension of any Letter of Credit and each acceptance of the
foregoing shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in Sections
6.02(a) through (c).

 

ARTICLE VII
Representations and Warranties

 

The Borrower (on behalf of itself and its Subsidiaries), and each Guarantor by
its execution of a Guaranty and Collateral Agreement, represents and warrants to
the Administrative Agent, the Issuing Bank and the Lenders that:

 

Section 7.01          Organization; Powers.  Each of the Borrower and its
Subsidiaries is a legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite power and authority, and has all material governmental licenses,
authorizations, consents and approvals necessary, to own its assets and to carry
on its business as now conducted, and is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required,
except where failure to have such power, authority, licenses, authorizations,
consents, approvals and qualifications could not reasonably be expected to have
a Material Adverse Effect.

 

Section 7.02          Authority; Enforceability.  The Transactions are within
each Loan Party’s corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action (including, without
limitation, any action required to be taken by any class of directors of the
Borrower or any other Person, whether interested or disinterested, in order to
ensure the due authorization of the Transactions).  Each Loan Document to which
a Loan Party is a party has been duly executed and delivered by such Loan Party
and constitutes a legal, valid and binding obligation of such Loan Party, as
applicable, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

 

Section 7.03          Approvals; No Conflicts.  The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority or any other third Person (including
shareholders or any class of directors, whether interested or disinterested, of
the Borrower or any other Person), nor is any such consent, approval,
registration, filing or other action necessary for the validity or
enforceability of any Loan Document or the consummation of the transactions
contemplated thereby, except such as have been obtained or made and are in full
force and effect other than (i) the recording and filing of the Security
Instruments as required by this Agreement and (ii) those third party approvals
or consents which, if not made or obtained, would not cause a Default hereunder,
could not reasonably be expected to have a Material Adverse Effect or do not
have an adverse effect on the enforceability of the Loan Documents, (b) will not
violate any applicable law or regulation or

 

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any Organization Documents of the Borrower or any Subsidiary, or any order of
any Governmental Authority, (c) will not violate or result in a default under
any indenture or other agreement regarding Indebtedness of the Borrower or any
Subsidiary or give rise to a right thereunder to require any payment to be made
by the Borrower or such Subsidiary, (d) will not violate or result in a default
under any other agreement or other instrument binding upon the Borrower or any
Subsidiary, or its Properties, or give rise to a right thereunder to require any
payment to be made by the Borrower or such Subsidiary, other than such
violations or defaults which would not cause a Default or Event of Default
hereunder, could not reasonably be expected to have a Material Adverse Effect,
or do not have an adverse effect on the enforceability of any Loan Documents,
and (e) will not result in the creation or imposition of any Lien on any
Property of the Borrower or any Subsidiary (other than the Liens created by the
Loan Documents).

 

Section 7.04          Financial Condition; No Material Adverse Change.

 

(a)           The Borrower has heretofore furnished to the Lenders the Existing
Borrower’s audited consolidated balance sheet and related statements of income
or operations, stockholders’ equity and cash flows as of and for the fiscal year
ending December 31, 2011.  Such financial statements fairly present in all
material respects the financial position and results of operations and cash
flows of the Existing Borrower and its consolidated subsidiaries as of such date
and for such period.  The Borrower has heretofore furnished to the Lenders the
Existing Borrower’s unaudited pro forma consolidated balance sheet, statements
of income, Consolidated EBITDA and other operating data for the most recently
ended four fiscal quarter period for which such financial statements are
available, in each case after giving effect to the Transactions as if they had
occurred on such date in the case of the balance sheet and as of the beginning
of all periods presented in the case of the statements of income, Consolidated
EBITDA and other operating data (collectively, the “Financial Statements”). 
Such pro forma financial statements have been prepared in good faith by the
Borrower, based on the assumptions stated therein (which assumptions are
believed by the Borrower on the date hereof and on the Effective Date to be
reasonable in light of current conditions and facts then known to the Borrower),
are based on the best information available to the Borrower as of the date of
delivery thereof, accurately reflect all adjustments required to be made to give
effect to the Transactions, and present fairly in all material respects the pro
forma consolidated financial position and results of operations of the Borrower
and its Consolidated Subsidiaries as of such date and for such periods, assuming
that the Transactions had occurred at such dates.

 

(b)           Since December 31, 2011, there has been no event, development or
circumstance that has had or could reasonably be expected to have a Material
Adverse Effect.

 

(c)           Neither the Borrower nor any Subsidiary has, on the date hereof
after giving effect to the Transactions, any Material Indebtedness (including
Disqualified Capital Stock) or any contingent liabilities, off-balance sheet
liabilities or partnerships, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the Financial
Statements.

 

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(d)           The projections regarding the financial performance of the
Borrower and its Consolidated Subsidiaries furnished to the Lenders have been
prepared in good faith by the Borrower and based upon assumptions believed by
the Borrower to be reasonable at the time such projections were provided (and on
the Effective Date in the case of forecasts provided prior to the Effective
Date) (it being recognized by the Lenders, however, that projections as to
future events are not to be viewed as facts and that actual results during the
period(s) covered by such projections may differ from the projected results and
that such differences may be material and that neither the Borrower nor any
Subsidiary makes any representation that such projections will be realized).

 

Section 7.05          Litigation.  There are no actions, suits, investigations
or proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any Subsidiary, or any of their Properties (a) not fully covered
by insurance (except for normal deductibles) as to which there is a reasonable
possibility of an adverse determination that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect, or (b) that involve any Loan Document or the
Transactions.

 

Section 7.06          Environmental Matters.  Except for such matters that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect:

 

(a)           the Borrower and the Subsidiaries and each of their respective
Properties and operations thereon are, and within all applicable statute of
limitation periods have been, in compliance with all applicable Environmental
Laws;

 

(b)           the Borrower and the Subsidiaries have obtained all Environmental
Permits required for their respective operations and each of their Properties,
with all such Environmental Permits being currently in full force and effect,
and none of the Borrower or the Subsidiaries has received any written notice or
otherwise has knowledge that any such existing Environmental Permit will be
revoked or that any application for any new Environmental Permit or renewal of
any existing Environmental Permit will be protested or denied;

 

(c)           there are no claims, demands, suits, orders, inquiries,
investigations, requests for information or proceedings concerning any violation
of, or any liability (including as a potentially responsible party) under, any
applicable Environmental Law that is pending or, to the Borrower’s knowledge,
threatened against the Borrower or any Subsidiary or any of their respective
Properties or as a result of any operations at such Properties;

 

(d)           none of the Properties of the Borrower or any Subsidiary contain
or have contained any:  (i) underground storage tanks; (ii) asbestos-containing
materials; (iii) landfills or dumps; (iv) hazardous waste management units as
defined pursuant to RCRA or any comparable state law; or (v) sites on or
nominated for the National Priority List promulgated pursuant to CERCLA or any
state remedial priority list promulgated or published pursuant to any comparable
state law;

 

(e)           there has been no Release or, to the Borrower’s knowledge,
threatened Release of Hazardous Materials at, on, under or from the Borrower’s
or any Subsidiary’s

 

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Properties, there are no investigations, remediations, abatements, removals, or
monitorings of Hazardous Materials required under applicable Environmental Laws
at such Properties and, to the knowledge of the Borrower, none of such
Properties are adversely affected by any Release or threatened Release of a
Hazardous Material originating or emanating from any other real property;

 

(f)            neither the Borrower nor any Subsidiary has received any written
notice asserting an alleged liability or obligation under any applicable
Environmental Laws with respect to the investigation, remediation, abatement,
removal, or monitoring of any Hazardous Materials at, under, or Released or
threatened to be Released from any real properties offsite the Borrower’s or any
Subsidiary’s Properties and, to the Borrower’s knowledge, there are no
conditions or circumstances that could reasonably be expected to result in the
receipt of such written notice;

 

(g)           there has been no exposure of any Person or Property to any
Hazardous Materials as a result of or in connection with the operations and
businesses of any of the Borrower’s or the Subsidiaries’ Properties that could
reasonably be expected to form the basis for a claim for damages or
compensation, and, to the Borrower’s knowledge, there are no conditions or
circumstances that could reasonably be expected to result in the receipt of
notice regarding such exposure; and

 

(h)           the Borrower has provided, or has caused its Subsidiaries to
provide, to the Lenders complete and correct copies of all environmental site
assessment reports, investigations, studies, analyses, and correspondence on
environmental matters (including matters relating to any alleged non-compliance
with or liability under Environmental Laws) that are in any of the Borrower’s or
the Subsidiaries’ possession or control and relating to their respective
Properties or operations thereon.

 

Section 7.07          Compliance with the Laws and Agreements; No Defaults.

 

(a)           Each of the Borrower and each Subsidiary is in compliance with all
Governmental Requirements applicable to it or its Property and all agreements
and other instruments binding upon it or its Property, and possesses all
licenses, permits, franchises, exemptions, approvals and other governmental
authorizations necessary for the ownership of its Property and the conduct of
its business, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

(b)           Neither the Borrower nor any Subsidiary is in default nor has any
event or circumstance occurred which, but for the expiration of any applicable
grace period or the giving of notice, or both, would constitute a default or
would require the Borrower or a Subsidiary to Redeem or make any offer to Redeem
under any indenture, note, credit agreement or instrument pursuant to which any
Material Indebtedness is outstanding or by which the Borrower or any Subsidiary
or any of their Properties is bound.

 

(c)           No Default has occurred and is continuing.

 

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Section 7.08          Investment Company Act.  Neither the Borrower nor any
Subsidiary is an “investment company” or a company “controlled” by an
“investment company,” within the meaning of, or subject to regulation under, the
Investment Company Act of 1940, as amended.

 

Section 7.09          Taxes.  Except as set forth on Schedule 7.09, each of the
Borrower and its Subsidiaries has timely filed or caused to be filed all Tax
returns and reports required to have been filed.  Each of the Borrower and its
Subsidiaries has paid or caused to be paid all Taxes required to have been paid
by it, except Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, has
set aside on its books adequate reserves in accordance with GAAP.  The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of Taxes and other governmental charges are, in the reasonable opinion
of the Borrower, adequate.  No currently outstanding Tax Lien has been filed
against the Borrower, any of the Subsidiaries, or any of their respective
Properties, and, to the knowledge of the Borrower, no claim is being asserted
against the Borrower, any of the Subsidiaries, or any of their respective
Properties with respect to any such Tax or other such governmental charge.

 

Section 7.10          ERISA.

 

(a)           The Borrower, the Subsidiaries and each ERISA Affiliate have
complied in all material respects with ERISA and, where applicable, the Code
regarding each Plan.

 

(b)           Each Plan is, and has been, established and maintained in
compliance with its terms, ERISA and, where applicable, the Code, except where
the failure to so establish and maintain such Plan could not reasonably be
expected to have a Material Adverse Effect.

 

(c)           No act, omission or transaction has occurred which could result in
imposition on the Borrower, any Subsidiary or any ERISA Affiliate (whether
directly or indirectly) of (i) either a civil penalty assessed pursuant to
subsections (c), (i), (l) or (m) of section 502 of ERISA or a tax imposed
pursuant to Chapter 43 of Subtitle D of the Code or (ii) breach of fiduciary
duty liability damages under section 409 of ERISA.

 

(d)           Full payment when due has been made of all amounts which the
Borrower, the Subsidiaries or any ERISA Affiliate is required under the terms of
each Plan or applicable law to have paid as contributions to such Plan as of the
date hereof.

 

(e)           Neither the Borrower, the Subsidiaries nor any ERISA Affiliate
sponsors, maintains, or contributes to an employee welfare benefit plan, as
defined in section 3(1) of ERISA, including, without limitation, any such plan
maintained to provide benefits to former employees of such entities, with
respect to which its sponsorship of, maintenance of or contribution to may not
be terminated by the Borrower, a Subsidiary or any ERISA Affiliate in its sole
discretion at any time without any material liability.

 

(f)            Neither the Borrower, the Subsidiaries nor any ERISA Affiliate
sponsors, maintains or contributes to, or has at any time in the six-year period
preceding the date hereof sponsored, maintained or contributed to, any employee
pension benefit plan, as defined in section 3(2) of ERISA, including a
multiemployer plan as defined in section 3(37) or 4001(a)(3)

 

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of ERISA, that is subject to Title IV of ERISA, section 302 of ERISA or section
412 of the Code.

 

Section 7.11          Disclosure; No Material Misstatements.  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.  None of the reports, financial statements, certificates or
other information furnished by or on behalf of the Borrower or any Subsidiary to
the Administrative Agent or any Lender or any of their Affiliates in connection
with the negotiation of this Agreement or any other Loan Document or delivered
hereunder or under any other Loan Document (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or, when
taken as a whole, 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.  There
is no fact peculiar to the Borrower or any Subsidiary which could reasonably be
expected to have a Material Adverse Effect or in the future is reasonably likely
to have a Material Adverse Effect and which has not been set forth in this
Agreement or the Loan Documents or the other documents, certificates and
statements furnished to the Administrative Agent or the Lenders by or on behalf
of the Borrower or any Subsidiary prior to, or on, the date hereof in connection
with the transactions contemplated hereby.

 

Section 7.12          Insurance.  Each Loan Party has, and has caused all of its
Subsidiaries to have, (a) all insurance policies sufficient for the compliance
by each of them with all material Governmental Requirements and all material
agreements, including, without limitation, flood insurance, if required, with
respect to any Property subjected, or required under the Loan Documents to be
subjected, to a Lien pursuant to the Security Instruments, and (b) insurance
coverage in at least amounts and against such risk (including, without
limitation, public liability) that are usually insured against by companies
similarly situated and of comparable size and engaged in the same or a similar
business for the assets and operations of the Borrower and its Subsidiaries. 
The Administrative Agent and the Lenders have been named as additional insureds
in respect of such liability insurance policies, and the Administrative Agent
has been named as loss payee with respect to Property loss insurance.  No Loan
Party owns any improvements situated on any Property subjected, or required
under the Loan Documents to be subjected, to a Lien pursuant to the Security
Instruments for which such Loan Party has not delivered to the Administrative
Agent evidence reasonably satisfactory to the Administrative Agent that (a) such
Loan Party maintains flood insurance for such improvement or (b) such
improvement is not located in a “flood hazard area” in any Flood Insurance Rate
Map published by the Federal Emergency Management Agency (or any successor
agency).

 

Section 7.13          Restriction on Liens.  Neither the Borrower nor any of the
Subsidiaries is a party to any material agreement or arrangement (other than
(a) Capital Leases creating Liens permitted by Section 9.03(c), but then only on
the Property that is the subject of such Capital Lease, (b) documents evidencing
or securing Purchase Money Indebtedness creating Liens permitted by
Section 9.03(c), but then only on the Property that is the subject of such
Purchase Money Indebtedness, and (c) documents creating Liens which are
described in clauses (g) or (h)

 

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of the definition of “Excepted Liens”, but then only on the Property that is the
subject of the applicable lease or license described in such clause (g) or (h)),
or subject to any order, judgment, writ or decree, which either restricts or
purports to restrict its ability to grant Liens to the Administrative Agent and
the Lenders on or in respect of their Properties to secure the Secured
Obligations and the Loan Documents.

 

Section 7.14          Subsidiaries.  Except as set forth on Schedule 7.14 or as
disclosed in writing to the Administrative Agent (which shall promptly furnish a
copy to the Lenders, which shall be a supplement to Schedule 7.14), the Borrower
has no Subsidiaries.  Each Person on Schedule 7.14 is a Wholly-Owned Subsidiary
unless otherwise identified thereon as an Excluded Subsidiary.  The Borrower has
no Foreign Subsidiaries.  All of the outstanding Equity Interests of each
Subsidiary has been validly issued, is fully paid, is nonassessable and has not
been issued in violation of any preemptive or similar rights.  Schedule 7.14
also sets forth the holders (and percentages of ownership) of the Equity
Interests in each of the Subsidiaries and lists the Excluded Subsidiaries, if
any, as of the Effective Date.

 

Section 7.15          Location of Business and Offices.  The Borrower’s
jurisdiction of organization is Delaware; the name of the Borrower as listed in
the public records of its jurisdiction of organization is Southcross Energy
Partners, L.P.; and the organizational identification number of the Borrower in
its jurisdiction of organization is 5138791 (or, in each case, as set forth in a
notice delivered to the Administrative Agent pursuant to Section 8.01(j) in
accordance with Section 12.01).  The Borrower’s principal place of business and
chief executive offices are located at the address specified in Section 12.01
(or as set forth in a notice delivered pursuant to Section 8.01(j) and
Section 12.01(c)).

 

Section 7.16          Properties; Titles, Etc.

 

(a)           Each of the Borrower and the Subsidiaries has good and valid title
to, valid leasehold interests in, or valid easements, rights of way or other
property interests in all of its real and personal Property free and clear of
all Liens except Liens permitted by Section 9.03.

 

(b)           All leases, easements, rights of way and other agreements
necessary for the conduct of the business of the Borrower and the Subsidiaries
are valid and subsisting, in full force and effect, and there exists no default
or event or circumstance which with the giving of notice or the passage of time
or both would give rise to a default under any such lease or leases, which could
reasonably be expected to have a Material Adverse Effect.

 

(c)           The rights and Properties presently owned, leased or licensed by
the Borrower and the Subsidiaries including, without limitation, all easements
and rights of way, include all rights and Properties necessary to permit the
Borrower and the Subsidiaries to conduct their business in all material respects
in the same manner as its business has been conducted prior to the date hereof.

 

(d)           The Borrower and each Subsidiary owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual Property
material to its business, and the use thereof by the Borrower and such
Subsidiary does not infringe upon the

 

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rights of any other Person, except for any such infringements that, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

 

Section 7.17          Maintenance of Properties.  Except for such acts or
failures to act as could not be reasonably expected to have a Material Adverse
Effect, the offices, plants, gas processing plants, platforms, pipelines,
improvements, fixtures, equipment, and other Property owned, leased or used by
the Borrower and its Subsidiaries in the conduct of their businesses are
(a) being maintained in a state adequate to conduct normal operations,
(b) structurally sound with no known defects, (c) in good operating condition
and repair, subject to ordinary wear and tear, (d) not in need of maintenance or
repair except for ordinary, routine maintenance and repair, (e) sufficient for
the operation of the businesses of the Borrower and its Subsidiaries as
currently conducted, and (f) in conformity with all Governmental Requirements
relating thereto.

 

Section 7.18          Hedging Agreements.  Schedule 7.18, as of the date hereof,
and after the date hereof, each report required to be delivered by the Borrower
pursuant to Section 8.01(e), sets forth, a true and complete list of all Hedging
Agreements of the Borrower and each Subsidiary, the material terms thereof
(including the type, term, effective date, termination date and notional amounts
or volumes), the net mark to market value thereof, all credit support agreements
relating thereto (including any margin required or supplied) and the
counterparty to each such agreement.

 

Section 7.19          Security Instruments.

 

(a)           Guaranty and Collateral Agreement.  The provisions of the Guaranty
and Collateral Agreement are effective to create, in favor of the Administrative
Agent for the benefit of the Secured Parties, a legal, valid and enforceable
Lien on, and security interest in, all of the Collateral described therein, and
(i) when financing statements and other filings in appropriate form are filed in
the offices specified in the Guaranty and Collateral Agreement and (ii) upon the
taking of possession or control by the Administrative Agent of the Collateral
with respect to which a security interest may be perfected only by possession or
control (which possession or control shall be given to the Administrative Agent
to the extent possession or control by the Administrative Agent is required by
the Guaranty and Collateral Agreement), the Liens created by the Guaranty and
Collateral Agreement shall constitute fully perfected first priority Liens on,
and security interests in, all right, title and interest of the Loan Parties in
the Collateral covered thereby (other than such Collateral in which a Lien or a
security interest cannot be perfected by filing, possession or control under the
Uniform Commercial Code as in effect at the relevant time in the relevant
jurisdiction), in each case free of all Liens other than Excepted Liens, and
prior and superior to all other Liens other than Excepted Liens.

 

(b)           Mortgages.  Each Mortgage is effective to create, in favor of the
Administrative Agent (or such other trustee as may be required or desired under
local law) for the benefit of the Secured Parties, legal, valid and enforceable
Liens on, and security interests in, all of the Mortgaged Property thereunder,
subject only to Excepted Liens, and when the Mortgages are filed in the offices
specified on Schedule 7.19 (or, in the case of any Mortgage executed and
delivered after the date thereof in accordance with the provisions of
Section 8.12 and Section 8.14, when such Mortgage is filed in the appropriate
offices), the Mortgages shall constitute fully perfected first priority Liens
on, and security interests in, all right, title and

 

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interest of the Loan Parties in that portion of the Mortgaged Property
constituting real property and fixtures affixed or attached to such real
property, in each case prior and superior in right to any other person, other
than Excepted Liens.

 

(c)           Valid Liens.  Each Security Instrument delivered pursuant to
Section 8.12 or Section 8.14, upon execution and delivery thereof, is effective
to create in favor of the Administrative Agent, for the benefit of the Secured
Parties, legal, valid and enforceable Liens on, and security interests in, all
of the Collateral thereunder, and (i) when financing statements and other
filings in appropriate form are filed or recorded in the appropriate offices as
are required by the Guaranty and Collateral Agreement and Schedule 7.19, and
(ii) upon the taking of possession or control by the Administrative Agent of the
Collateral with respect to which a security interest may be perfected only by
possession or control, the Liens created by such Security Instrument will
constitute fully perfected first priority Liens on, and security interests in,
all right, title and interest of the Loan Parties in such Collateral (other than
such Collateral in which a Lien or security interest cannot be perfected by
filing, possession or control under the Uniform Commercial Code as in effect at
the relevant time in the relevant jurisdiction), in each case with no other
Liens except for applicable Excepted Liens.

 

Section 7.20          Use of Loans and Letters of Credit.  The proceeds of the
Loans and the Letters of Credit shall be used to refinance the Existing
Indebtedness, to provide funding for, and to pay fees and expenses in connection
with, the Transactions, for permitted Capital Expenditures and permitted
Investments, for general corporate, working capital, limited liability company
or partnership purposes, as the case may be, of the Borrower and its
Subsidiaries, and to make a distribution to the Existing Borrower on or within
five (5) Business Days after the Effective Date to the extent permitted under
Section 9.04(d) hereof.  The Borrower and its Subsidiaries are not engaged
principally, or as one of its or their important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying margin stock (within the meaning of Regulation T, U or X of
the Board).  No part of the proceeds of any Loan or Letter of Credit will be
used for any purpose which violates the provisions of Regulations T, U or X of
the Board.

 

Section 7.21          Solvency.  Each Loan Party is Solvent.  No Loan Party is
planning to take any action described in Section 10.01(h) or Section 10.01(i).

 

Section 7.22          Common Enterprise.  Each of the Borrower and its
Subsidiaries and their business operations are closely integrated with one
another into a single, interdependent and collective, common enterprise so that
any benefit received by any one of them from the financial accommodations
provided under this Agreement will be to the direct benefit of the others.  The
Borrower and its Subsidiaries intend to render services to or for the benefit of
each other, to purchase or sell and supply goods to or from or for the benefit
of each other, to make loans, advances and provide other financial
accommodations to or for the benefit of each other and to provide
administrative, marketing, payroll and management services to or for the benefit
of each other (in each case, except as may be prohibited by this Agreement).

 

Section 7.23          Material Contracts.  Schedule 7.23 hereto contains a
complete list, as of the Effective Date, of all Material Contracts of the
Borrower and each Subsidiary, including all amendments thereto.  All Material
Contracts are in full force and effect, neither the Borrower nor

 

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any Subsidiary is in default under any Material Contract, and to the knowledge
of the Borrower and each Subsidiary after due inquiry, no other Person that is
party thereto is in default under any Material Contract, except for such
defaults as could not be reasonably expected to have a Material Adverse Effect. 
None of the Material Contracts prohibits the transactions contemplated under the
Loan Documents.  Each of the Material Contracts is currently in the name of, or
has been assigned to, a Loan Party (with the consent or acceptance of each other
party thereto if and to the extent that such consent or acceptance is required
thereunder), each of the Material Contracts is assignable to the Administrative
Agent as collateral, and each of the Material Contracts (other than the
Mechanicsburg Gathering Contract) is assignable, unless waived by the
Administrative Agent in its reasonable discretion, by the Administrative Agent
to a reasonably acceptable transferee if an Event of Default were to occur.  The
Borrower and its Subsidiaries have delivered to the Administrative Agent a
complete and current copy of each of their Material Contracts existing on the
Effective Date.

 

Section 7.24          Broker’s Fees.  Except as set forth in Schedule 7.24, no
broker’s or finder’s fee, commission or similar compensation will be payable by
the Borrower or any Subsidiary with respect to the Transactions.

 

Section 7.25          Employee Matters.  As of the Effective Date, (a) neither
the Borrower nor any Subsidiary, nor any of their respective employees, is
subject to any collective bargaining agreement, (b) no petition for
certification or union election is pending or, to the knowledge of the Borrower
or any Subsidiary, contemplated with respect to the employees thereof and no
union or collective bargaining unit has sought such certification or recognition
with respect to the employees of the Borrower or any Subsidiary, and (c) there
are no strikes, slowdowns, work stoppages or controversies pending or, to the
knowledge of the Borrower or any Subsidiary after due inquiry, threatened
between the Borrower or any Subsidiary and its respective employees.

 

Section 7.26          Anti-Terrorism Laws.

 

(a)           The Borrower is not, and to the knowledge of the Borrower, none of
the Borrower’s Affiliates, officers or directors is in violation of any
Governmental Requirement relating to terrorism or money laundering
(“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001 (the “Executive Order”), the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, Public Law 107-56, and the Trading with the
Enemy Act, 50 U.S.C. App. 1 et seq., in each case, as amended from time to time.

 

(b)           The Borrower is not, and to the knowledge of the Borrower, no
Affiliate, officer, director, broker or other agent of the Borrower acting or
benefiting in any capacity in connection with the Loans is any of the following:

 

(i)            a Person that is listed in the annex to, or is otherwise subject
to the provisions of, the Executive Order;

 

(ii)           a Person owned or controlled by, or acting for or on behalf of,
any Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;

 

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(iii)          a Person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;

 

(iv)          a Person that commits, threatens or conspires to commit or
supports “terrorism” as defined in the Executive Order; or

 

(v)           a Person that is named as a “specially designated national and
blocked Person” on the most current list published by the U.S. Treasury
Department Office of Foreign Assets Control (“OFAC”) at its official website or
any replacement website or other replacement official publication of such list.

 

(c)           No Loan Party and, to the knowledge of the Borrower, no broker or
other agent of any Loan Party acting in any capacity in connection with the
Loans (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Person
described in paragraph (b) above, (ii) deals in, or otherwise engages in any
transaction relating to, any Property or interests in Property blocked pursuant
to the Executive Order, or (iii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.

 

ARTICLE VIII
Affirmative Covenants

 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents shall have been paid in full and all Letters of
Credit shall have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower (on behalf of itself and its Subsidiaries) and each
Guarantor by its execution of the Guaranty and Collateral Agreement, covenants
and agrees with the Administrative Agent, the Issuing Bank and the Lenders that:

 

Section 8.01          Financial Statements; Ratings Change; Other Information. 
The Borrower will furnish to the Administrative Agent and each Lender:

 

(a)           Annual Financial Statements.  As soon as available, but in any
event in accordance with then applicable law and not later than the date on
which annual financial statements are required to be delivered to the SEC, its
audited consolidated balance sheet and related statements of income or
operations (and, as to balance sheets and statements of income or operations,
accompanied by consolidating schedules), stockholders’ equity and cash flows as
of the end of and for such year, setting forth in each case (in comparative form
the figures for the previous fiscal year, all reported on by Deloitte & Touche
LLP or other independent public accountants of recognized national standing
(without a “going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Borrower and its
Consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied.

 

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(b)           Quarterly Financial Statements.  As soon as available, but in any
event in accordance with then applicable law and not later than the date on
which quarterly financial statements are required to be delivered to the SEC,
its consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such fiscal quarter
and the then elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in
the case of the balance sheet, as of the end of) the previous fiscal year, all
certified by one of its Financial Officers as presenting fairly in all material
respects the financial condition and results of operations of the Borrower and
its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes.

 

(c)           Financial Projections.  Concurrently with any delivery of
financial statements under Section 8.01(a), projections for the Borrower and its
Consolidated Subsidiaries for each fiscal year of the Borrower through the end
of the fiscal year in which the Maturity Date occurs, and which such projections
shall include (i) volumes and pricing assumptions and (ii) itemized budget
forecasts set forth on a quarterly basis in form and substance reasonably
satisfactory to the Administrative Agent for each of the four fiscal quarters of
the Borrower ending during the first such fiscal year reflected in such
projections.

 

(d)           Certificate of Financial Officer — Compliance.  Concurrently with
any delivery of financial statements under Section 8.01(a) or Section 8.01(b), a
certificate of a Financial Officer in substantially the form of Exhibit D-2
hereto (i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Section 9.01, including, without limitation,
reasonably detailed calculations of the Specified Projects EBITDA Adjustment for
each Specified Project (including a reasonably detailed summary of the terms of
the applicable customer contracts relating to such calculation), each Specified
Project’s Scheduled Completion Date, and each Specified Project’s Projected
Capacity (and, if applicable, any changes to such Projected Capacity and
supporting information as required), and (iii) stating whether any change in
GAAP or in the application thereof has occurred since the date of the financial
statements referred to in Section 7.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate.

 

(e)           Certificate of Financial Officer — Hedging Agreements. 
Concurrently with any delivery of financial statements under Section 8.01(a) and
Section 8.01(b), a certificate of a Financial Officer, in form and substance
satisfactory to the Administrative Agent, setting forth as of the last Business
Day of such month, fiscal quarter or fiscal year, a true and complete list of
all Hedging Agreements of the Borrower and each Subsidiary, the material terms
thereof (including the type, term, effective date, termination date and notional
amounts or volumes), the net mark-to-market value therefor, any new credit
support agreements relating thereto, any margin required or supplied under any
credit support document, and the counterparty to each such agreement.

 

(f)            Certificate of Insurer — Insurance Coverage.  Concurrently with
any delivery of financial statements under Section 8.01(a), a certificate of
insurance coverage from each insurer with respect to the insurance required by
Section 8.07, in form and substance

 

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satisfactory to the Administrative Agent, and, if requested by the
Administrative Agent or any Lender, all copies of the applicable policies.

 

(g)           Other Accounting Reports.  Promptly upon receipt thereof, a copy
of each other report or letter submitted to the Borrower or any of its
Subsidiaries by independent accountants in connection with any annual, interim
or special audit made by them of the books of the Borrower or any such
Subsidiary, and a copy of any response by the Borrower or any such Subsidiary,
or the board of directors (or comparable governing body) of the Borrower or any
such Subsidiary, to such letter or report.

 

(h)           SEC and Other Filings; Reports to Shareholders.  Promptly after
the same become publicly available, copies of all periodic and other reports,
proxy statements and other materials filed by the Borrower or any Subsidiary
with the SEC, or with any national or foreign securities exchange, or required
by applicable law to be distributed by the Borrower to its equityholders
generally, as the case may be.

 

(i)            Notices Under Material Instruments.  Promptly after the
furnishing thereof, copies of any financial statement, report or notice
furnished to or by any Person pursuant to the terms of any preferred stock
designation, indenture, loan or credit or other similar agreement, other than
the Loan Documents, and not otherwise required to be furnished to the Lenders
pursuant to any other provision of this Section 8.01.

 

(j)            Information Regarding Loan Parties.  Prior written notice of any
change (i) any Loan Party’s corporate name or in any trade name used to identify
such Person in the conduct of its business or in the ownership of its
Properties, (ii) in the location of any Loan Party’s chief executive office or
principal place of business, (iii) in any Loan Party’s identity or corporate
structure or in the jurisdiction in which such Person is incorporated or formed,
(iv) in any Loan Party’s jurisdiction of organization or such Person’s
organizational identification number in such jurisdiction of organization, and
(v) in any Loan Party’s federal taxpayer identification number.

 

(k)           Notices of Certain Changes.  Except in connection with
Organization Documents of the Borrower and its Subsidiaries that are delivered
pursuant to Section 6.01(c) after giving effect to the Specified IPO
Transactions, promptly, but in any event within five (5) Business Days after the
execution thereof, copies of any amendment, modification or supplement to the
certificate or articles of incorporation, by-laws, any preferred stock
designation or any other Organization Document of the Borrower or any
Subsidiary.

 

(l)            Certificate of Financial Officer — Consolidating Information. 
If, at any time, there exist any Excluded Subsidiaries of the Borrower, then
concurrently with any delivery of financial statements under Section 8.01(a) and
Section 8.01(b), a certificate of a Financial Officer setting forth
consolidating spreadsheets that show all Excluded Subsidiaries and the
eliminating entries, in such form as is reasonably acceptable to the
Administrative Agent.

 

(m)          Changes to Projected Capacity.  Promptly, but in any event within
five (5) Business Days after the Borrower receives notice of a material change
in the Projected Capacity of a Specified Project, the Borrower shall provide an
officer’s certificate of a Responsible

 

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Officer, in form and substance satisfactory to the Administrative Agent,
certifying the following: (A) recalculations of the amounts set forth in clauses
(a) and (b) of the definition of “Specified Projects EBITDA Adjustment” as of
the most recently ended fiscal quarter but giving effect to the revised
Projected Capacity, (B) updates to the information previously delivered to the
Administrative Agent in accordance with the definition of “Specified Projects”
with respect to such Specified Project, (C) any additional information with
respect to such Specified Project and such material change in Projected Capacity
reasonably requested by the Administrative Agent, and (D) computations of the
covenants set forth in Section 9.01 as of the most recently ended fiscal quarter
but giving effect to the revised Projected Capacity.  Specified Projects EBITDA
Adjustment shall thereafter be calculated in accordance with the revised
Projected Capacity of such Specified Project.  In the event of a change in the
Projected Capacity of a Specified Project that is not material, the Specified
Projects EBITDA Adjustment shall thereafter reflect such change in the Projected
Capacity of such Specified Project.

 

(n)           Other Requested Information.  Promptly following any request
therefor, such other information regarding the operations, business affairs and
financial condition of the Borrower or any Subsidiary (including, without
limitation, any Plan and any reports or other information required to be filed
with respect thereto under the Code or under ERISA), or compliance with the
terms of this Agreement or any other Loan Document, as the Administrative Agent
or any Lender may reasonably request.

 

Information required to be delivered pursuant to this Section 8.01 shall be
deemed to have been delivered if such information, or one or more annual or
quarterly reports containing such information, shall be available on the website
of the SEC and the Borrower has delivered notice to the Administrative Agent
that such reports are so available, which notice may be provided in any
certificate delivered pursuant to Section 8.01(d).

 

Section 8.02          Notices of Material Events.  The Borrower will furnish to
the Administrative Agent and each Lender prompt written notice of the following:

 

(a)           the occurrence of any Default;

 

(b)           the filing or commencement of, or the threat in writing of, any
action, suit, proceeding, investigation or arbitration by or before any
arbitrator or Governmental Authority against or affecting any Loan Party not
previously disclosed in writing to the Lenders or any material adverse
development in any action, suit, proceeding, investigation or arbitration
(whether or not previously disclosed to the Lenders) that, in either case, if
adversely determined, could reasonably be expected to result in liability in
excess of $1,000,000, not fully covered by insurance, subject to normal
deductibles;

 

(c)           the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount exceeding
$500,000; and

 

(d)           any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.

 

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Each notice delivered under this Section 8.02 shall be accompanied by a
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.

 

Section 8.03                             Existence; Conduct of Business.  The
Borrower will, and will cause each Subsidiary to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, consents, privileges and franchises
material to the conduct of its business and maintain, if necessary, its
qualification to do business in each other jurisdiction in which its Properties
are located or the ownership of its Properties requires such qualification,
except where the failure to so qualify could not reasonably be expected to have
a Material Adverse Effect; provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted under Section 9.10.

 

Section 8.04                             Payment of Obligations.  The Borrower
will, and will cause each Subsidiary to, pay its obligations, including Tax
liabilities of the Borrower and all of its Subsidiaries before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect
or result in the seizure or levy of any Property of the Borrower or any
Subsidiary.

 

Section 8.05                             Performance of Obligations under Loan
Documents.  The Borrower will repay the Loans according to the reading, tenor
and effect thereof, and the Borrower will, and will cause each Subsidiary to, do
and perform every act and discharge all of the obligations to be performed and
discharged by them under the Loan Documents, including, without limitation, this
Agreement, at or within the time or times and in the manner specified.

 

Section 8.06                             Operation and Maintenance of
Properties.  The Borrower, at its own expense, will, and will cause each
Subsidiary to:

 

(a)                                 operate its Properties or cause such
Properties to be operated in a careful and efficient manner in accordance with
the practices of the industry and in compliance with all applicable contracts
and agreements and in compliance with all Governmental Requirements, including,
without limitation, applicable Environmental Laws, except, in each case, where
the failure to comply could not reasonably be expected to have a Material
Adverse Effect;

 

(b)                                 preserve, maintain and keep in good repair,
condition, working order and efficiency (ordinary wear and tear excepted) all of
its Properties, including, without limitation, all equipment, machinery and
facilities, except, in each case, where the failure to comply could not
reasonably be expected to have a Material Adverse Effect;

 

(c)                                  promptly perform or make reasonable and
customary efforts to cause to be performed, in accordance with industry
standards, the obligations required by each and all of the assignments, deeds,
leases, sub-leases, contracts and agreements affecting its interests in its
Properties, except, in each case, where the failure to comply could not
reasonably be expected to have a Material Adverse Effect; and

 

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(d)                                 to the extent the Borrower is not the
operator of any Property, the Borrower shall use reasonable efforts to cause the
operator of such Property to comply with this Section 8.06.

 

Section 8.07                             Insurance.

 

(a)                                 The Borrower will, and will cause each
Subsidiary to, maintain, with financially sound and reputable insurance
companies, insurance in such amounts and against such risks as are customarily
maintained by companies of similar size engaged in the same or similar
businesses operating in the same or similar locations (including hazard
insurance).  The loss payable clauses or provisions in said insurance policy or
policies insuring any of the Collateral for the Loans shall be endorsed in favor
of and made payable to the Administrative Agent as its interests may appear and
such policies shall name the Administrative Agent as an “additional insured” and
“loss payee” and provide that the insurer will give at least thirty (30) days’
prior notice of any cancellation to the Administrative Agent.

 

(b)                                 With respect to each portion of the real
Property (other than pipelines) of the Borrower or any Subsidiary on which
improvements are located and which is subjected, or required under the Loan
Documents to be subjected, to a Lien pursuant to the Security Instruments, the
Borrower will, and will cause each Subsidiary to, obtain flood insurance in such
total amount as the Administrative Agent or the Required Lenders may from time
to time require, if at any time the area in which any improvements located on
any such real Property is designated a “flood hazard area” in any Flood
Insurance Rate Map published by the Federal Emergency Management Agency (or any
successor agency), and otherwise comply with the National Flood Insurance
Program as set forth in the Flood Disaster Protection Act of 1973, as amended
from time to time.

 

Section 8.08                             Books and Records; Inspection Rights. 
The Borrower will, and will cause each Subsidiary to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities.  The
Borrower will, and will cause each Subsidiary to, permit any representatives
designated by the Administrative Agent or any Lender, upon reasonable prior
notice and during normal business hours, to visit and inspect its Properties, to
examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its Responsible Officers and independent
accountants, all at such reasonable times and as often as reasonably requested
(provided that the Administrative Agent shall give the Borrower reasonable
advance notice of any proposed discussion with such accountants and permit the
Borrower and its representatives to be present during such discussions, and
provided, further, that, so long as no Default has occurred and continues to
exist, no more than one such visitation with the Borrower’s independent public
accountants shall be conducted during any calendar year).

 

Section 8.09                             Compliance with Laws.  The Borrower
will, and will cause each Subsidiary to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
Property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

 

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Section 8.10                             Compliance with Agreements.  The
Borrower will, and will cause each Subsidiary to, comply with all agreements,
contracts and instruments binding on it or affecting its Properties or business,
except to the extent that such noncompliance could not reasonably be expected to
have a Material Adverse Effect.

 

Section 8.11                             Environmental Matters.

 

(a)                                 The Borrower shall at its sole expense:
(i) comply, and shall cause its Properties and operations and each Subsidiary
and each Subsidiary’s Properties and operations to comply, with all applicable
Environmental Laws, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect;
(ii) not Release or threaten to Release, and shall cause each Subsidiary not to
Release or threaten to Release, any Hazardous Material on, under, about or from
any of the Borrower’s or its Subsidiaries’ Properties or any other property
offsite the Property to the extent caused by the Borrower’s or any of its
Subsidiaries’ operations except in compliance with applicable Environmental
Laws, if the Release or threatened Release could reasonably be expected to have
a Material Adverse Effect; (iii) timely obtain, file or prepare, and shall cause
each Subsidiary to timely obtain, file or prepare, all Environmental Permits, if
any, required under applicable Environmental Laws to be obtained or filed in
connection with the operation or use of the Borrower’s or its Subsidiaries’
Properties, except where such failure to obtain or file could not reasonably be
expected to have a Material Adverse Effect; (iv) promptly commence and
diligently prosecute to completion, and shall cause each Subsidiary to promptly
commence and diligently prosecute to completion, any assessment, evaluation,
investigation, monitoring, containment, cleanup, removal, repair, restoration,
remediation or other remedial obligations (collectively, the “Remedial Work”) in
the event any Remedial Work is required or reasonably necessary under applicable
Environmental Laws because of or in connection with the actual or suspected
past, present or future Release or threatened Release of any Hazardous Material
on, under, about or from any of the Borrower’s or its Subsidiaries’ Properties,
if failure to commence and diligently prosecute to completion could reasonably
be expected to have a Material Adverse Effect; (v) conduct, and cause its
Subsidiaries to conduct, their respective operations and businesses in a manner
that will not expose any Property or Person to Hazardous Materials that could
reasonably be expected to form the basis for a claim for material damages or
compensation; and (vi) establish and implement, and shall cause each Subsidiary
to establish and implement, such procedures as may be necessary to continuously
determine and assure that the Borrower’s and its Subsidiaries’ obligations under
this Section 8.11(a) are timely and fully satisfied, which failure to establish
and implement such procedures could reasonably be expected to have a Material
Adverse Effect.

 

(b)                                 The Borrower will promptly notify the
Administrative Agent and the Lenders in writing of any threatened action,
investigation or inquiry by any Governmental Authority or any threatened demand
or lawsuit by any Person against the Borrower or its Subsidiaries or their
Properties of which the Borrower has knowledge in connection with any
Environmental Laws if the Borrower could reasonably anticipate that such action
will result in liability (whether individually or in the aggregate) in excess of
$1,000,000, not fully covered by insurance, subject to normal deductibles;

 

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(c)                                  The Borrower will, and will cause each
Subsidiary to, provide environmental assessments, audits and tests in accordance
with the most current version of the American Society of Testing Materials
standards upon request by the Administrative Agent and the Lenders, but no more
than once per year in the absence of any Event of Default (or as otherwise
required to be obtained by the Administrative Agent or the Lenders by any
Governmental Authority), in connection with any future acquisitions of
Properties.

 

Section 8.12                             Further Assurances.  The Borrower at
its sole expense will, and will cause each Subsidiary to, promptly execute and
deliver to the Administrative Agent all such other documents, agreements and
instruments reasonably requested by the Administrative Agent to comply with,
cure any defects or accomplish the conditions precedent, covenants and
agreements of the Borrower or any Subsidiary, as the case may be, in the Loan
Documents, including the Notes, or to further evidence and more fully describe
the Collateral intended as security for the Secured Obligations, or to correct
any omissions in this Agreement or the Security Instruments, or to state more
fully the obligations secured therein, or to perfect, protect or preserve any
Liens created pursuant to this Agreement or any of the Security Instruments or
the priority thereof, or to make any recordings, file any notices or obtain any
consents, all as may be reasonably necessary or appropriate, in the sole
discretion of the Administrative Agent, in connection therewith.

 

Section 8.13                             Title Information; Phase I Site
Assessments.

 

(a)                                 If the Borrower or any Subsidiary acquires
any new pipeline and processing Properties for consideration in excess of
$3,000,000, individually or in the aggregate, the Borrower shall, or shall cause
such Subsidiary to, provide promptly title information regarding such new
pipeline and processing Properties to the Administrative Agent.  The Borrower
shall, within sixty (60) days of notice from the Administrative Agent (or such
later date as the Administrative Agent may agree in its sole discretion) that
title defects or exceptions exist with respect to such additional Properties,
either (i) cure any such title defects or exceptions (including defects or
exceptions as to priority) which are not permitted by Section 9.03 raised by
such information to the reasonable satisfaction of the Administrative Agent, or
(ii) deliver title information in form and substance acceptable to the
Administrative Agent so that the Administrative Agent shall have received,
together with title information previously delivered to the Administrative
Agent, title information reasonably satisfactory to the Administrative Agent
relative to the pipeline and processing Properties of the Borrower and its
Subsidiaries.

 

(b)                                 If the Borrower or any Subsidiary desires to
acquire fee simple title to any new real Property for a consideration in excess
of $1,000,000, individually or in the aggregate, the Borrower shall, or shall
cause such Subsidiary to, provide to the Administrative Agent the results of a
current phase I site assessment regarding such real Property in form and
substance satisfactory to the Administrative Agent prior to the acquisition of
such Property.

 

Section 8.14                             Additional Collateral; Additional
Guarantors.

 

(a)                                 In the event that the Borrower or any
Subsidiary acquires or forms a Subsidiary, subject to Section 8.15 the Borrower
or its Subsidiary shall promptly, but in any event within 30 days (or such later
date as the Administrative Agent may agree in its sole

 

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discretion), cause such Subsidiary to guarantee the Secured Obligations pursuant
to the Guaranty and Collateral Agreement.  In connection with any guaranty, the
Borrower shall, or shall cause such Subsidiary to, (i) execute and deliver to
the Administrative Agent a supplement to the Guaranty and Collateral Agreement
and such other Security Instruments (in proper form for filing, registration or
recordation, as applicable) as are requested by the Administrative Agent, and
take such actions necessary or advisable to grant to the Administrative Agent
for the benefit of the Secured Parties a first priority, perfected Lien (subject
only to Excepted Liens identified in clauses (a) through (h) of the definition
thereof, but subject to the provisos at the end of such definition) on all of
the tangible and intangible Property of such Subsidiary (other than de minimis
Property excluded in the Administrative Agent’s sole discretion), (ii) cause the
owner of the Equity Interests in such Subsidiary to pledge such Equity Interests
(including, without limitation, delivery of original stock certificates
evidencing the Equity Interests of such Subsidiary, together with an appropriate
undated stock powers for each certificate duly executed in blank by the
registered owner thereof) and (iii) execute and deliver such other additional
closing documents, certificates and legal opinions as shall reasonably be
requested by the Administrative Agent.

 

(b)                                 The Borrower will at all times cause the
other tangible and intangible Property of the Borrower and each Subsidiary not
covered by clause (a) above to be subject to a Lien pursuant to the Security
Instruments, except that, with respect to real Property acquired by the Borrower
or a Subsidiary, the Borrower or such Subsidiary, as the case may be, shall have
a period of 30 days (or such later date as the Administrative Agent may agree in
its sole discretion) after such acquisition within which to subject such real
Property to a Lien pursuant to the Security Instruments, and, in connection
therewith, the Borrower shall, or shall cause such Subsidiary to, execute and
deliver such Security Instruments (in proper form for filing, registration or
recordation, as applicable) as are requested by the Administrative Agent, and
take such actions necessary or advisable to subject such real Property to a Lien
pursuant to the Security Instruments, provided, however, that with respect to
any real Property, if the Administrative Agent reasonably determines that the
costs, financial and otherwise, of obtaining or maintaining a Lien, perfecting a
Lien and/or complying with all Governmental Requirements with respect to such a
Lien outweigh the benefit to the Secured Parties of the security afforded
thereby, the Administrative Agent may notify the Borrower of such determination
and, (x) if such real Property is not then subject to a Lien pursuant to the
Security Instruments, such real Property shall not be required to become subject
to a Lien pursuant to the Security Instruments and, (y) if such real Property is
already subject to a Lien pursuant to the Security Instruments, the
Administrative Agent shall, upon obtaining the consent of the Required Lenders,
release such Lien.

 

Section 8.15                             Designations with Respect to
Subsidiaries.

 

(a)                                 Within 30 days of the acquisition or
formation of a new Subsidiary, the Borrower may designate such Subsidiary as an
Excluded Subsidiary by written notification thereof to the Administrative Agent,
provided that (i) no Default or Event of Default exists at the time of or after
giving effect to such designation, (ii) such designation is deemed to be an
Investment in such Excluded Subsidiary in an amount equal to the fair market
value as of the date of such designation of the Borrower’s direct or indirect
ownership interest in such Excluded

 

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Subsidiary and such Investment would be permitted to be made at the time of such
designation under Section 9.05(l).  No Loan Party may be redesignated as an
Excluded Subsidiary.

 

(b)                                 If the Borrower desires to designate an
Excluded Subsidiary to be a Loan Party after the date hereof, and all of such
Excluded Subsidiary’s outstanding Equity Interests (other than any directors’
qualifying shares mandated by applicable law), on a fully-diluted basis, are
owned by the Borrower and/or one or more of the Wholly-Owned Subsidiaries, the
Borrower shall cause such Excluded Subsidiary to comply with Section 8.14(a), at
which time such Person shall cease to be an “Excluded Subsidiary” and shall
become a “Wholly-Owned Subsidiary” for purposes of this Agreement and the other
Loan Documents without any amendment, modification or other supplement to any of
the foregoing.

 

Section 8.16                             Excluded Subsidiaries.  The Borrower:

 

(a)                                 will cause the management, business and
affairs of each of the Borrower and its Subsidiaries to be conducted in such a
manner (including, without limitation, by keeping separate books of account) so
that each Excluded Subsidiary will be treated as an entity separate and distinct
from the Borrower and its Subsidiaries; provided that the foregoing will not
prohibit payments under expense sharing agreements with such Excluded
Subsidiaries that are consistent with past practices and/or required by any
applicable Governmental Authority.

 

(b)                                 will not, and will not permit any of its
Subsidiaries to, assume, guarantee or be or become liable for any Indebtedness
of any of the Excluded Subsidiaries.

 

(c)                                  will not permit any Excluded Subsidiary to
hold any Equity Interest in the Borrower or any other Loan Party.

 

Section 8.17                             ERISA Compliance.  The Borrower will
promptly furnish and will cause the Subsidiaries and any ERISA Affiliate to
promptly furnish to the Administrative Agent (a) promptly after the filing
thereof by the Borrower or any Subsidiary with the United States Secretary of
Labor or the Internal Revenue Service (or if filed by a third party, promptly
after the Borrower or a Subsidiary becomes aware of such filing), copies of each
annual and other report with respect to each Plan or any trust created
thereunder, and (b) promptly upon becoming aware of the occurrence of any
“prohibited transaction,” as described in section 406 of ERISA or in section
4975 of the Code, in connection with any Plan or any trust created thereunder, a
written notice signed by the President or the principal Financial Officer, the
Subsidiary or the ERISA Affiliate, as the case may be, specifying the nature
thereof, what action the Borrower, the Subsidiary or the ERISA Affiliate is
taking or proposes to take with respect thereto, and, when known, any action
taken or proposed by the Internal Revenue Service or the Department of Labor
with respect thereto.

 

Section 8.18                             Interest Rate Hedging Agreements.  As
of the last day of each fiscal quarter of the Borrower, the Borrower shall have
entered into Hedging Agreements for the purpose of hedging the Borrower’s
exposure to variable interest rates, the notional amounts of which (when
aggregated with all other Hedging Agreements of the Loan Parties then in effect
in respect of interest rates) shall not be less than fifty percent (50%) of the
then outstanding principal amount of the Loan Parties’ Indebtedness for borrowed
money for which interest

 

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payable on such Indebtedness is variable during the term of such Indebtedness. 
Such Hedging Agreements shall be in the form of floating-to-fixed rate swaps,
the purchase of interest rate caps, or any similar hedging instrument designed
to mitigate interest rate risk, in each case approved by the Administrative
Agent.

 

Section 8.19                             Bonnie View Fractionator; Woodsboro
Processing Plant.  On or prior to December 31, 2012, the Borrower shall have
provided evidence reasonably satisfactory to the Administrative Agent that:

 

(a)                                 each of the Bonnie View Fractionator and the
Woodsboro Processing Plant is fully-assembled, operational, and in use by the
Loan Parties in the conduct of their business; and

 

(b)                                 over a period of seven (7) consecutive
calendar days, both:

 

(i)                                     the Bonnie View Fractionator has
processed volumes of not less than an average of 7,000 barrels per day for such
period; and

 

(ii)                                  the Woodsboro Processing Plant has
processed volumes of not less than an average of 80 MMCF per day for such
period.

 

ARTICLE IX
Negative Covenants

 

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents have been paid in full and all Letters of
Credit have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower (on behalf of itself and its Subsidiaries) and each
Guarantor by its execution of the Guaranty and Collateral Agreement) covenants
and agrees with the Administrative Agent, the Issuing Bank and the Lenders that:

 

Section 9.01                             Financial Covenants.

 

(a)                                 Consolidated Total Leverage Ratio.

 

(i)                                     Prior to the Borrower’s exercise of the
Permitted Notes Covenant Option, the Borrower will not, as of the last day of
any fiscal quarter commencing with the quarter ending March 31, 2013, permit its
Consolidated Total Leverage Ratio to exceed the ratio set forth below for the
corresponding Rolling Period:

 

Rolling Period Ending

 

Maximum
Consolidated Total
Leverage Ratio

March 31, 2013

 

5.25 to 1.00

June 30, 2013

 

4.75 to 1.00

September 30, 2013

 

4.75 to 1.00

December 31, 2013 and thereafter

 

4.50 to 1.00

 

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; provided that upon the Borrower closing a Material Acquisition, the Borrower
may elect (by delivering written notice of such election to the Administrative
Agent on the closing date of such Material Acquisition) for the Rolling Period
ending on the last day of the fiscal quarter in which such acquisition occurs
and for the immediately following two Rolling Periods to increase the maximum
Consolidated Total Leverage Ratio that is permitted to 5.00 to 1.00; provided
further that the Borrower is not permitted to make more than one such election
in any period of four consecutive fiscal quarters.

 

(ii)                                  From and after the Borrower’s exercise of
the Permitted Notes Covenant Option, the Borrower will not, as of the last day
of each fiscal quarter then remaining during the term of this Agreement, permit
its Consolidated Total Leverage Ratio to exceed 5.25 to 1.00.

 

(b)                                 Consolidated Senior Secured Leverage Ratio. 
From and after the Borrower’s exercise of the Permitted Notes Covenant Option,
the Borrower will not, as of the last day of each fiscal quarter then remaining
during the term of this Agreement, permit its Consolidated Senior Secured
Leverage Ratio to exceed 3.50 to 1.00.

 

(c)                                  Consolidated Interest Coverage Ratio.  The
Borrower will not, as of the last day of any fiscal quarter commencing with the
quarter ending March 31, 2013, permit its Consolidated Interest Coverage Ratio
to be less than 2.75 to 1.00.

 

Upon the first issuance by the Borrower or a Subsidiary of Permitted Note
Indebtedness following the Effective Date, the Borrower may, at its sole option,
exercise the Permitted Notes Covenant Option on the date of the Borrower’s
and/or any Subsidiary’s issuance of such Permitted Note Indebtedness by
delivering written notice to the Administrative Agent of the Borrower’s election
to so exercise the Permitted Notes Covenant Option.  Once exercised, the
Permitted Notes Covenant Option is permanent and irrevocable and the Borrower
shall have no further right to select which financial covenants will be
applicable to it.

 

Section 9.02                             Indebtedness.  The Borrower will not,
and will not permit any Subsidiary to, incur, create, assume or suffer to exist
any Indebtedness, except:

 

(a)                                 the Secured Obligations arising under the
Loan Documents or the Secured Hedging Agreements, any guaranty of or suretyship
arrangement for the Secured Obligations arising under the Loan Documents;

 

(b)                                 Indebtedness under Capital Leases or that
constitutes Purchase Money Indebtedness; provided that the aggregate amount of
all Indebtedness described in this Section 9.02(b) at any one time outstanding
shall not to exceed $8,000,000 in the aggregate;

 

(c)                                  Indebtedness associated with performance
bonds, bid bonds, surety bonds, appeal bonds or customs bonds required in the
ordinary course of business or in connection with the enforcement of rights or
claims of the Borrower or any Subsidiary or in connection with judgments that do
not result in a Default or an Event of Default; provided that the aggregate
outstanding amount of all such bonds permitted by this Section 9.02(c) shall not
at any time exceed $2,000,000;

 

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(d)                                 intercompany Indebtedness between the
Borrower and any Subsidiary or between Subsidiaries to the extent permitted by
Section 9.05(g); provided that such Indebtedness is not held, assigned,
transferred, negotiated or pledged to any Person other than the Borrower or one
of its Wholly-Owned Subsidiaries, and, provided, further, that any such
Indebtedness owed by a Loan Party shall be subordinated to the Secured
Obligations on terms set forth in the Guaranty and Collateral Agreement;

 

(e)                                  Indebtedness constituting a guaranty by any
Loan Party of Indebtedness permitted to be incurred by any other Loan Party
under this Section 9.02;

 

(f)                                   endorsements of negotiable instruments for
deposit or collection in the ordinary course of business;

 

(g)                                  Permitted Note Indebtedness; and

 

(h)                                 other unsecured Indebtedness not to exceed
$8,000,000 in the aggregate at any one time outstanding;

 

provided that, in no event shall the aggregate principal amount of Indebtedness
of the Loan Parties of the type described in clause (a) of the definition of
“Consolidated Total Funded Indebtedness” exceed $210,000,000 as of December 31,
2012.

 

Section 9.03                             Liens.  The Borrower will not, and will
not permit any Subsidiary to, create, incur, assume or permit to exist any Lien
on any of its Properties (now owned or hereafter acquired), except:

 

(a)                                 Liens securing the payment of any Secured
Obligations pursuant to the Security Instruments;

 

(b)                                 Excepted Liens;

 

(c)                                  Liens securing Capital Leases and Purchase
Money Indebtedness permitted by Section 9.02(b) but only on the Property under
lease or the Property purchased with such Purchase Money Indebtedness, as
applicable; and

 

(d)                                 Liens on proceeds of Letters of Credit
permitted to be posted in connection with Hedging Agreements permitted by
Section 9.17.

 

Section 9.04                             Restricted Payments.  The Borrower will
not, and will not permit any of its Subsidiaries to, declare or make, or agree
to pay or make, directly or indirectly, any Restricted Payment, return any
capital to its stockholders or make any distribution of its Property to its
Equity Interest holders, except:

 

(a)                                 the Borrower may declare and pay dividends
and distributions with respect to its Equity Interests payable solely in
additional shares of its Equity Interests (other than Disqualified Capital
Stock);

 

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(b)                                 Subsidiaries may declare and pay dividends
to other Loan Parties ratably with respect to their Equity Interests;

 

(c)                                  the Borrower may declare and pay quarterly
cash dividends of Available Cash to the holders of any Equity Interests of the
Borrower in accordance with the Borrower’s Organization Documents; provided that
no Default or Event of Default exists at the time of or after giving effect to
such Restricted Payment;

 

(d)                                 the Borrower may make a Restricted Payment
to the Existing Borrower on or within five (5) Business Days after the Effective
Date so long as, after giving effect to all outstanding Loans hereunder at the
time of such Restricted Payment and the payment of such Restricted Payment, the
Loan Parties’ outstanding Indebtedness of the type described in clause (a) of
the definition of “Consolidated Total Funded Indebtedness” does not exceed
$150,000,000;

 

(e)                                  the Borrower may declare and pay Restricted
Payments with the proceeds received from the substantially concurrent issue of
new common or subordinated Equity Interests;

 

(f)                                   substantially contemporaneously with the
consummation of the Specified IPO Transactions on Effective Date, the Borrower
may declare and pay Restricted Payments in connection with such Specified IPO
Transactions;

 

(g)                                  the Borrower may make Restricted Payments
pursuant to and in connection with long-term incentive plans or other benefit
plans or arrangements for directors, management, employees or consultants of the
Borrower and its Subsidiaries; and

 

(h)                                 the Borrower may make Restricted Payments to
redeem its Equity Interests that are held at such time by “Ineligible Holders”
(as defined in the Partnership Agreement) pursuant to Section 4.10 of the
Partnership Agreement.

 

Section 9.05                             Investments, Loans and Advances.  The
Borrower will not, and will not permit any Subsidiary to, make or permit to
remain outstanding any Investments in or to any Person, except that the
foregoing restriction shall not apply to:

 

(a)                                 Investments which are disclosed to the
Lenders in Schedule 9.05;

 

(b)                                 accounts receivable arising in the ordinary
course of business;

 

(c)                                  direct obligations of the United States or
any agency thereof, or obligations guaranteed by the United States or any agency
thereof, in each case maturing within one (1) year from the date of creation
thereof;

 

(d)                                 commercial paper maturing within one year
from the date of creation thereof rated in one of the two highest grades by S&P
or Moody’s;

 

(e)                                  deposits maturing within one (1) year from
the date of creation thereof with, including certificates of deposit issued by,
any Lender or any office located in the United

 

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States of any other bank or trust company which is organized under the laws of
the United States or any state thereof, has capital, surplus and undivided
profits aggregating at least $100,000,000 (as of the date of such bank or trust
company’s most recent financial reports) and has a short term deposit rating of
no lower than A2 or P2, as such rating is set forth from time to time, by S&P or
Moody’s, respectively;

 

(f)                                   deposits in money market funds investing
exclusively in Investments described in Section 9.05(c), Section 9.05(d) or
Section 9.05(e);

 

(g)                                  Investments (i) made by the Borrower in or
to the Guarantors, and (ii) made by any Subsidiary in or to the Borrower or any
Guarantor;

 

(h)                                 Investments in stock, obligations or
securities received in settlement of debts arising from Investments permitted
under this Section 9.05 owing to the Borrower or any Subsidiary as a result of a
bankruptcy or other insolvency proceeding of the obligor in respect of such
debts or upon the enforcement of any Lien in favor of the Borrower or any of its
Subsidiaries; provided that the Borrower shall give the Administrative Agent
prompt written notice in the event that the aggregate amount of all Investments
held at any one time under this Section 9.05(h) exceeds $500,000;

 

(i)                                     Investments constituting Indebtedness
permitted under Section 9.02;

 

(j)                                    credit provided to new or existing
customers of the Loan Parties for the costs and expenses of extending service to
such customers and for which such customers are contractually obligated to
reimburse the Loan Party providing such credit; provided that, with respect to
any calendar year, the aggregate amount of all Investments made pursuant to this
Section 9.05(j) during such calendar year shall not exceed $5,000,000;

 

(k)                                 Permitted Acquisitions;

 

(l)                                     Investments in Excluded Subsidiaries;
provided that (i) no Default or Event of Default exists or results therefrom,
(ii) after giving effect to such Investment (and any debt incurred in connection
therewith), (A) the Borrower’s Liquidity is not less than $20,000,000 and
(B) the Borrower is in pro forma compliance (as set forth in Section 1.05(c))
with all applicable covenants set forth in Section 9.01 hereof;

 

(m)                             Investments made substantially contemporaneously
with the consummation of the Specified IPO Transactions on the Effective Date in
connection with such Specified IPO Transactions; and

 

(n)                                 other Investments not to exceed $5,000,000
in the aggregate at any time.

 

Section 9.06                             Nature of Business; International
Operations.  The Borrower will not, and will not permit any Subsidiary to,
engage (directly or indirectly) in any business other than those businesses in
which the Borrower and its Subsidiaries are engaged on the Effective Date (or
which are reasonably related, incidental or complimentary thereto or are
reasonable extensions, developments or expansions thereof).  From and after the
date hereof, the Borrower and its Subsidiaries will not acquire or make any
other expenditure (whether such expenditure is capital,

 

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operating or otherwise) in or related to, any real Property not located within
the geographical boundaries of the United States.

 

Section 9.07                             Proceeds of Loans.  The Borrower will
not permit the proceeds of the Loans to be used for any purpose other than those
permitted by Section 7.20.  Neither the Borrower nor any Person acting on behalf
of the Borrower has taken or will take any action which might cause any of the
Loan Documents to violate Regulations T, U or X or any other regulation of the
Board or to violate Section 7 of the Securities Exchange Act of 1934 or any
rule or regulation thereunder, in each case as now in effect or as the same may
hereinafter be in effect.  If requested by the Administrative Agent, the
Borrower will furnish to the Administrative Agent and each Lender a statement to
the foregoing effect in conformity with the requirements of FR Form U-1 or such
other form referred to in Regulation U, Regulation T or Regulation X of the
Board, as the case may be.

 

Section 9.08                             ERISA Compliance.  The Borrower will
not, and will not permit any Subsidiary to, at any time:

 

(a)                                 engage in, or permit any ERISA Affiliate to
engage in, any transaction in connection with which the Borrower, a Subsidiary
or any ERISA Affiliate could be subjected to either a civil penalty assessed
pursuant to subsections (c), (i), (l) or (m) of section 502 of ERISA or a tax
imposed by Chapter 43 of Subtitle D of the Code;

 

(b)                                 fail to make, or permit any ERISA Affiliate
to fail to make, full payment when due of all amounts which, under the
provisions of any Plan, agreement relating thereto or applicable law, the
Borrower, a Subsidiary or any ERISA Affiliate is required to pay as
contributions thereto;

 

(c)                                  contribute to or assume an obligation to
contribute to, or permit any ERISA Affiliate to contribute to or assume an
obligation to contribute to (i) any employee welfare benefit plan, as defined in
section 3(1) of ERISA, including, without limitation, any such plan maintained
to provide benefits to former employees of such entities, that contributions to
or the obligation to contribute to may not be terminated by such entities in
their sole discretion at any time without any material liability, or (ii) any
employee pension benefit plan, as defined in section 3(2) of ERISA, including a
multiemployer plan as defined in section 3(37) or 4001(a)(3) of ERISA, that is
subject to Title IV of ERISA, section 302 of ERISA or section 412 of the Code;
and

 

(d)                                 acquire, or permit any ERISA Affiliate to
acquire, an interest in any Person that causes such Person to become an ERISA
Affiliate with respect to the Borrower or a Subsidiary or with respect to any
ERISA Affiliate of the Borrower or a Subsidiary if such Person sponsors,
maintains or contributes to, or at any time in the six year period preceding
such acquisition has sponsored, maintained, or contributed to, any employee
pension benefit plan, as defined in section 3(2) of ERISA, (i) that is a
multiemployer plan as defined in section 3(37) or 4001(a)(3) of ERISA or
(ii) that is subject to Title IV of ERISA under which the actuarial present
value of the benefit liabilities under such plan exceeds the current value of
the assets (computed on a plan termination basis in accordance with Title IV of
ERISA) of such plan allocable to such benefit liabilities.

 

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Section 9.09                             Sale or Discount of Receivables. 
Except (a) in connection with the Specified IPO Transactions, (b) sales
otherwise permitted pursuant to Section 9.11 and (c) for receivables obtained by
the Borrower or any Subsidiary out of the ordinary course of business or the
settlement of joint interest billing accounts in the ordinary course of business
or discounts granted to settle collection of accounts receivable or the sale of
defaulted accounts arising in the ordinary course of business in connection with
the compromise or collection thereof and not in connection with any financing
transaction, the Borrower will not, and will not permit any Subsidiary to,
discount or sell (with or without recourse) any of its notes receivable or
accounts receivable.

 

Section 9.10                             Mergers, Etc.  The Borrower will not,
and will not permit any Subsidiary to, merge into or with or consolidate with
any other Person, or permit any other Person to merge into or consolidate with
it, or sell, transfer, lease or otherwise dispose of (whether in one transaction
or in a series of transactions) all or substantially all of its Property to any
other Person (whether now owned or hereafter acquired) (any such transaction, a
“consolidation”), or liquidate or dissolve; provided that the Borrower or any
Subsidiary may participate in a consolidation with any other Person; provided,
further, that:

 

(a)                                 (i) no Default is continuing, (ii) any such
consolidation would not cause a Default hereunder, (iii) if the Borrower
consolidates with any Person, the Borrower shall be the surviving Person, and
(iv) if any Subsidiary consolidates with any Person (other than the Borrower or
another Subsidiary) and such Subsidiary is not the surviving Person, such
surviving Person shall expressly assume in writing (in form and substance
satisfactory to the Administrative Agent) all obligations of such Subsidiary
under the Loan Documents;

 

(b)                                 any Subsidiary may participate in a
consolidation with the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or any other Subsidiary and if one of such
Subsidiaries is a Wholly-Owned Subsidiary, then the surviving Person shall be a
Wholly-Owned Subsidiary; and

 

(c)                                  a Subsidiary may wind-up, dissolve,
liquidate or sell or transfer its assets if (i) all of its Property is
transferred to the Borrower or a Wholly-Owned Subsidiary and (ii) the Loan Party
acquiring such Property promptly complies with its obligations under Sections
8.12 and 8.14.

 

Section 9.11                             Sale of Properties.  The Borrower will
not, and will not permit any Subsidiary to, sell, assign, farm-out, convey or
otherwise transfer any Property except for:

 

(a)                                 dispositions of cash and cash equivalents in
the ordinary course of business and in connection with the consummation of the
Specified IPO Transactions and other transactions permitted by this Agreement;

 

(b)                                 the sale of inventory in the ordinary course
of business;

 

(c)                                  the sale or transfer of equipment that is
no longer necessary for the business of the Borrower or such Subsidiary or is
replaced by equipment of at least comparable value and use;

 

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(d)                                 issuances of distributions or other
Restricted Payments permitted pursuant to Section 9.04;

 

(e)                                  the transfer of Property to another Loan
Party;

 

(f)                                   the transfer of Property to an Excluded
Subsidiary, provided that (i) no Default or Event of Default exists at the time
of or after giving effect to such transfer, and (ii) such transfer is deemed to
be an Investment in such Excluded Subsidiary in an amount equal to the fair
market value of the Property transferred as of the date of such transfer and
such Investment would be permitted to be made at the time of such transfer under
Section 9.05(l);

 

(g)                                  the transfer of Property occurring in
connection with a transaction permitted by, and made in compliance with the
provisions of, Section 9.10;

 

(h)                                 Asset Sales having, in the aggregate for all
Asset Sales by the Borrower or any Subsidiary, a fair market value not to exceed
$2,000,000 during any fiscal year of the Borrower; and

 

(i)                                     other Asset Sales, subject to
Section 3.04(b)(iii).

 

Section 9.12                             Environmental Matters.  Except for such
matters that, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect, with respect to the Properties and any
operations thereat or associated therewith, the Borrower will not, and will not
permit any Subsidiary to, be in violation of Environmental Law, have any Release
or threatened Release of Hazardous Materials other than those that are in
compliance with Environmental Law, allow any exposure to Hazardous Materials
that could reasonably be expected to form the basis for a claim for damages or
compensation, or be required under Environmental Law to perform any Remedial
Work.

 

Section 9.13                             Transactions with Affiliates.  The
Borrower will not, and will not permit any Subsidiary to, enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property or the rendering of any service, with any Affiliate (other
than the Borrower or any Guarantor), except (a) in connection with the Specified
IPO Transactions, (b) Restricted Payments permitted by Section 9.04,
(c) Investments permitted by Section 9.05, (d) transactions contemplated by the
Partnership Agreement, as in effect on the Effective Date or, if applicable, to
the extent modified as permitted hereunder, (e) transactions approved by the
board of managers, or similar governing body, of the General Partner or the
conflicts committee thereof (acting in good faith), and (f) transactions that
are otherwise permitted under this Agreement and are upon fair and reasonable
terms no less favorable to it, when taken as a whole, than it would obtain in a
comparable arm’s length transaction with a Person not an Affiliate.

 

Section 9.14                             Subsidiaries.  The Borrower will not,
and will not permit any Subsidiary to, create or acquire any additional
Subsidiary unless the Borrower gives prior written notice to the Administrative
Agent of such creation or acquisition and complies with Section 8.14(a).  The
Borrower shall not, and shall not permit any Subsidiary to, sell, assign or
otherwise dispose of any Equity Interests in any Subsidiary except in compliance
with Section 9.11(e), Section

 

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9.11(g) or Section 9.15.  Neither the Borrower nor any Subsidiary shall have any
Foreign Subsidiaries.

 

Section 9.15                             Limitation on Issuance of Equity
Interests.  The Borrower shall not permit any Subsidiary to issue any Equity
Interest (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, any Equity Interest,
except for Equity Interests issued to another Loan Party or to another Person in
accordance with a merger or other transaction permitted by Section 9.10(a).  The
Borrower and the Subsidiaries shall comply with Section 8.12, Section 8.14 and,
if applicable, Section 9.10(a) with respect to any such issued Equity Interests.

 

Section 9.16                             Negative Pledge Agreements; Dividend
Restrictions.  The Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or suffer to exist any contract, agreement or
understanding (other than (a) the Loan Documents, (b) Capital Leases creating
Liens permitted by Section 9.03(c), but then only on the Property that is the
subject of such Capital Lease, (c) documents evidencing or securing Purchase
Money Indebtedness creating Liens permitted by Section 9.03(c), but then only on
the Property that is the subject of such Purchase Money Indebtedness, and
(d) documents creating Liens which are described in clauses (g) or (h) of the
definition of “Excepted Liens”, but then only on the Property that is the
subject of the applicable lease or license described in such clause (g) or (h))
that in any way prohibits or restricts the granting, conveying, creation or
imposition of any Lien on any of its Property in favor of the Administrative
Agent and the Lenders, or that requires the consent of or notice to other
Persons in connection therewith, or that restricts any Subsidiary from paying
dividends or making distributions to the Borrower or any Guarantor, or that
requires the consent of or notice to other Persons in connection therewith.

 

Section 9.17                             Hedging Agreements.  The Borrower will
not, and will not permit any Subsidiary to, enter into any Hedging Agreements
with any Person other than Hedging Agreements in respect of commodities or
interest rates (i) with an Approved Counterparty and (ii) that are entered into
for the purpose of hedging exposure to interest rates or commodity prices and
that are not for speculative purposes.  In no event shall any Hedging Agreement
contain any requirement, agreement or covenant for the Borrower or any
Subsidiary to post collateral or margin to secure their obligations under such
Hedging Agreement or to cover market exposures, other than Letters of Credit
(and the proceeds thereof) the face amounts of which do not exceed $5,000,000 in
the aggregate at any time.

 

Section 9.18                             Holding Company.  The Borrower will
remain a holding company and, except for temporary ownership of Property that
will occur as part of the consummation of the Specified IPO Transactions, will
not own any real property, immovable property, or other assets of material value
other than Equity Interests in Subsidiaries and Excluded Subsidiaries,
furniture, furnishings and equipment acquired and maintained in the ordinary
course of business, Investments to the extent permitted hereunder, assets
acquired that are promptly, and in any event within 30 days of acquisition by
the Borrower, transferred, contributed or otherwise assigned by the Borrower to
one or more of the other Loan Parties, and interests in contracts customarily
entered into by the Borrower in the ordinary course of its business.

 

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Section 9.19                             Sale and Leaseback.  The Borrower shall
not, and shall not permit any Subsidiary to, enter into any arrangement,
directly or indirectly, with any Person whereby it shall sell or transfer any
Property, whether now owned or hereafter acquired, and thereafter rent or lease
such Property which it intends to use for substantially the same purpose or
purposes as the Property being sold or transferred.

 

Section 9.20                             Amendments to Organization Documents,
Material Contracts, or Fiscal Year End; Prepayments of other Indebtedness.

 

(a)                                 The Borrower shall not, and shall not permit
any Subsidiary to, amend, supplement or otherwise modify (or permit to be
amended, supplemented or modified) its Organization Documents; provided that the
Borrower or any Subsidiary may amend, supplement or otherwise modify any of its
Organization Documents in any manner that (A) is not adverse to the Lenders in
any material respect and (B) does not conflict with any of the Loan Documents,
subject to compliance with the provisions of Section 8.01(j),
Section 8.01(k) and Section 8.12 to the full extent applicable; provided further
that any amendment, supplement or other modification to the definition of the
term “Available Cash” contained in the Partnership Agreement that results in an
increase in the amount of Available Cash shall be deemed to be adverse to the
Lenders in a material respect.

 

(b)                                 The Borrower shall not, and shall not permit
any Subsidiary to, amend, supplement or otherwise modify (or permit to be
amended, supplemented or modified) any Material Contract in a manner that would
be adverse to the Lenders in any material respect.

 

(c)                                  The Borrower shall not amend, supplement or
otherwise modify (or permit to be amended, supplemented or modified) the
Contribution Agreement or the Registration Statement in a manner that would be
adverse to the Lenders in any material respect.

 

(d)                                 The Borrower shall not, and shall not permit
any Subsidiary to, change the last day of its fiscal year from December 31 of
each year, or the last days of the first three fiscal quarters in each of its
fiscal years from March 31, June 30 and September 30 of each year, respectively.

 

(e)                                  The Borrower shall not, and shall not
permit any Subsidiary to, make (or give any notice in respect of) any voluntary
or optional payment or prepayment on or redemption or acquisition for value of,
or any prepayment or redemption as a result of any asset sale, change of control
or similar event of, any outstanding subordinated Indebtedness, except as
otherwise permitted by this Agreement.

 

Section 9.21                             Anti-Terrorism Law; Anti-Money
Laundering.

 

(a)                                 The Borrower shall not, and shall not permit
any Subsidiary to, directly or indirectly, (i) knowingly conduct any business or
engage in making or receiving any contribution of funds, goods or services to or
for the benefit of any Person described in Section 7.26, (ii) knowingly deal in,
or otherwise engage in any transaction relating to, any Property or interests in
Property blocked pursuant to the Executive Order or any other Anti-Terrorism
Law, or (iii) knowingly engage in or conspire to engage in any transaction that
evades or avoids, or has the

 

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purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law (and the Borrower shall deliver to any
Lender any certification or other evidence requested from time to time by such
Lender confirming the Borrower’s and the Subsidiaries’ compliance with this
Section 9.21(a)).

 

(b)                                 The Borrower shall not, and shall not permit
any Subsidiary to, cause or permit any of the funds of the Borrower or any
Subsidiary that are used to repay the Loans to be derived from any unlawful
activity with the result that the making of the Loans would be in violation of
any Governmental Requirement.

 

Section 9.22                             Embargoed Person.  The Borrower shall
not, and shall not permit any Subsidiary to, permit (a) any of the funds or
Properties of the Borrower or any Subsidiary that are used to repay the Loans to
constitute Property of, or be beneficially owned directly or indirectly by, any
Person subject to sanctions or trade restrictions under United States law
(“Embargoed Person” or “Embargoed Persons”) that is identified on (i) the “List
of Specially Designated Nationals and Blocked Persons” maintained by OFAC and/or
on any other similar list maintained by OFAC pursuant to any authorizing statute
including, but not limited to, the International Emergency Economic Powers Act,
50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et
seq., and any Executive Order or Governmental Requirement promulgated
thereunder, with the result that the investment in the Borrower or any
Subsidiary (whether directly or indirectly) is prohibited by a Governmental
Requirement, or the Loans would be in violation of a Governmental Requirement,
or (ii) the Executive Order, any related enabling legislation or any other
similar Executive Orders or (b) any Embargoed Person to have any direct or
indirect interest, of any nature whatsoever in the Borrower or any Subsidiary,
with the result that the investment in the Borrower or any Subsidiary (whether
directly or indirectly) is prohibited by a Governmental Requirement or the Loans
are in violation of a Governmental Requirement.

 

ARTICLE X
Events of Default; Remedies

 

Section 10.01                      Events of Default.  One or more of the
following events shall constitute an “Event of Default”:

 

(a)                                 The Borrower shall fail to pay any principal
of any Loan or any reimbursement obligation in respect of any LC Disbursement
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof, by acceleration or otherwise.

 

(b)                                 The Borrower shall fail to pay any interest
on any Loan or any fee or other amount (other than an amount referred to in
Section 10.01(a)) payable under any Loan Document, when and as the same shall
become due and payable, and such failure shall continue unremedied for a period
of three (3) Business Days.

 

(c)                                  Any representation or warranty made or
deemed made by or on behalf of any Loan Party or any Subsidiary of the Borrower
in or in connection with any Loan Document or any amendment or modification of
any Loan Document or waiver under such Loan

 

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Document, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with any Loan Document or any amendment
or modification thereof or waiver thereunder, shall prove to have been incorrect
in any material respect when made or deemed made.

 

(d)                                 The Borrower or any Subsidiary shall fail to
observe or perform any covenant, condition or agreement contained in
Section 8.01(i), Section 8.01(j), Section 8.02, Section 8.03, Section 8.07,
Section 8.14, Section 8.16, Section 8.19 or in Article IX.

 

(e)                                  Any Loan Party or any Subsidiary of the
Borrower shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement (other than those specified in Section 10.01(a),
Section 10.01(b) or Section 10.01(d)) or any other Loan Document, and such
failure shall continue unremedied for a period of thirty (30) days after the
earlier to occur of (i) notice thereof from the Administrative Agent to the
Borrower (which notice will be given at the request of any Lender) or (ii) a
Responsible Officer, or a Responsible Officer of such Subsidiary, otherwise
becoming aware of such default.

 

(f)                                   The Borrower or any Subsidiary shall fail
to make any payment of principal of or interest on any Material Indebtedness,
when and as the same shall become due and payable, and such failure to pay shall
extend beyond any applicable period of grace.

 

(g)                                  Any event or condition occurs that results
in any Material Indebtedness becoming due prior to its scheduled maturity or
that enables or permits (with or without the giving of notice, the lapse of time
or both) the holder or holders of such Material Indebtedness or any trustee or
agent on its or their behalf to cause such Material Indebtedness to become due,
or to require the Redemption thereof or any offer to Redeem to be made in
respect thereof, prior to its scheduled maturity or require the Borrower or any
Subsidiary to make an offer in respect thereof.

 

(h)                                 An involuntary proceeding shall be commenced
or an involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any Subsidiary or
its debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for sixty (60) days or an order or decree
approving or ordering any of the foregoing shall be entered.

 

(i)                                     The Borrower or any Subsidiary shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in Section 10.01(h),
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any Subsidiary
or for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment

 

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for the benefit of creditors, or (vi) take any limited liability company or
other action for the purpose of effecting any of the foregoing.

 

(j)                                    The Borrower or any Subsidiary shall
become unable, admit in writing its inability or fail generally to pay its debts
as they become due.

 

(k)                                 (i) One or more judgments for the payment of
money in an aggregate amount in excess of $5,000,000 (to the extent not covered
by independent third party insurance as to which the insurer does not dispute
coverage and is not subject to an insolvency proceeding) or (ii) any one or more
non-monetary judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, shall be rendered
against the Borrower, any Subsidiary or any combination thereof and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within thirty (30) days from the entry thereof.

 

(l)                                     The Loan Documents after delivery
thereof shall for any reason, except to the extent permitted by the terms
thereof, cease to be in full force and effect and valid, binding and enforceable
in accordance with their terms against any Loan Party party thereto or shall be
repudiated by any of them, or cease to create a valid and perfected Lien of the
priority required thereby on any of the Collateral purported to be covered
thereby, except to the extent permitted by the terms of this Agreement, or any
Loan Party or any of their Affiliates shall so state in writing.

 

(m)                             An ERISA Event shall have occurred that, in the
opinion of the Required Lenders, when together with all other ERISA Events that
have occurred, could reasonably be expected to result in the liability of the
Borrower and its Subsidiaries in an aggregate amount exceeding $1,000,000 in the
aggregate.

 

(n)                                 A Change in Control shall occur.

 

Section 10.02                      Remedies.

 

(a)                                 In the case of an Event of Default other
than one described in Section 10.01(h) or Section 10.01(i), at any time
thereafter during the continuance of such Event of Default, the Administrative
Agent may, and at the request of the Required Lenders, shall, by notice to the
Borrower, take either or both of the following actions, at the same or different
times:  (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrower and
the Guarantors accrued hereunder and under the Loan Documents (including,
without limitation, the payment of cash collateral to secure the LC Exposure as
provided in Section 2.07(j)), shall become due and payable immediately, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other notice of any kind, all of which are hereby waived by the
Borrower and each Guarantor; and in case of an Event of Default described in
Section 10.01(h) or Section 10.01(i), the Commitments shall automatically

 

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terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and the other obligations of the Borrower and the
Guarantors accrued hereunder and the other Loan Documents (including, without
limitation, the payment of cash collateral to secure the LC Exposure as provided
in Section 2.07(j)), shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower and each Guarantor.

 

(b)                                 In the case of the occurrence of an Event of
Default, the Administrative Agent and the Lenders will have all other rights and
remedies available at law and equity.

 

(c)                                  All proceeds realized from the liquidation
or other disposition of Collateral or otherwise received after maturity of the
Loans, whether by acceleration or otherwise, shall be applied:

 

(i)                                     first, to payment or reimbursement of
that portion of the Secured Obligations constituting fees, expenses and
indemnities payable to the Administrative Agent in its capacity as such;

 

(ii)                                  second, pro rata to payment or
reimbursement of that portion of the Secured Obligations constituting fees,
expenses and indemnities payable to the Lenders;

 

(iii)                               third, pro rata to payment of accrued
interest on the Loans;

 

(iv)                              fourth, pro rata to payment of (A) principal
outstanding on the Loans, (B) Secured Obligations referred to in clause (b) of
the definition of Secured Obligations owing to a Secured Hedging Agreement
Counterparty, (C) Secured Obligations referred to in clause (c) of the
definition of Secured Obligations owing to a Treasury Management Counterparty,
(D) any other Secured Obligations and (E) amounts to serve as cash collateral to
be held by the Administrative Agent to secure the LC Exposure; and

 

(v)                                 fifth, any excess, after all of the Secured
Obligations shall have been indefeasibly paid in full in cash, shall be paid to
the Borrower or as otherwise required by any Governmental Requirement.

 

ARTICLE XI
The Agents

 

Section 11.01                      Appointment and Authority.  Each of the
Lenders and the Issuing Bank hereby irrevocably appoints Wells Fargo to act on
its behalf as the Administrative Agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof and thereof, together with such actions and powers as are
reasonably incidental thereto.  The provisions of this Article XI are solely for
the benefit of the Administrative Agent, the Lenders and the Issuing Bank, and
neither the Borrower nor any Subsidiary shall have any rights as a third party
beneficiary of any such provisions.

 

Section 11.02                      Rights as a Lender.  The Person serving as
the Administrative Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender

 

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and may exercise the same as though it were not the Administrative Agent and the
term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless
the context otherwise requires, include the Person serving as the Administrative
Agent hereunder in its individual capacity.  Such Person and its Affiliates may
accept deposits from, lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if such Person were
not the Administrative Agent hereunder and without any duty to account therefor
to the Lenders.

 

Section 11.03                      Exculpatory Provisions.

 

(a)                                 The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents.  Without limiting the generality of the foregoing, the
Administrative Agent:

 

(i)                                     shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing;

 

(ii)                                  shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that the Administrative Agent is required to exercise as directed in writing by
the Required Lenders (or such other number or percentage of the Lenders as shall
be expressly provided for herein or in the other Loan Documents), provided that
the Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law; and

 

(iii)                               shall not, except as expressly set forth
herein and in the other Loan Documents, have any duty to disclose, and shall not
be liable for the failure to disclose, any information relating to the Borrower
or any of its Affiliates that is communicated to or obtained by the Person
serving as the Administrative Agent or any of its Affiliates in any capacity.

 

(b)                                 The Administrative Agent shall not be liable
for any action taken or not taken by it (i) with the consent or at the request
of the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary, or as the Administrative Agent shall believe in good faith
shall be necessary, under the circumstances as provided in Section 12.02 and
Section 10.02) or (ii) in the absence of its own gross negligence or willful
misconduct.  The Administrative Agent shall be deemed not to have knowledge of
any Default unless and until notice describing such Default is given to the
Administrative Agent by the Borrower, a Lender or the Issuing Bank.

 

(c)                                  The Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement or any
other Loan Document, (ii) the contents of any certificate, report or other
document delivered hereunder or thereunder or in connection herewith or
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other

 

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agreement, instrument or document, (v) the satisfaction of any condition set
forth in Article VI or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent or as to those
conditions precedent expressly required to be to the Administrative Agent’s
satisfaction, (vi) the existence, value, perfection, or priority of any
collateral security or the financial or other condition of the Loan Parties and
the Subsidiaries or any other obligor or guarantor, or (vii) any failure by any
Loan Party or any other Person (other than itself) to perform any of its
obligations hereunder or under any other Loan Document or the performance or
observance of any covenants, agreements, or other terms or conditions set forth
herein or therein.

 

Section 11.04                      Reliance by Administrative Agent.  The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person.  The Administrative Agent also may rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon.  In determining
compliance with any condition hereunder to the making of a Loan, or the issuance
of a Letter of Credit, that by its terms must be fulfilled to the satisfaction
of a Lender or the Issuing Bank, the Administrative Agent may presume that such
condition is satisfactory to such Lender or the Issuing Bank unless the
Administrative Agent shall have received notice to the contrary from such Lender
or the Issuing Bank prior to the making of such Loan or the issuance of such
Letter of Credit.  The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

 

Section 11.05                      Delegation of Duties.  The Administrative
Agent may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Loan Document by or through any one or more sub
agents appointed by the Administrative Agent.  The Administrative Agent and any
such sub-agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties.  The exculpatory
provisions of this Article IX shall apply to any such sub agent and to the
Related Parties of the Administrative Agent and any such sub agent, and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative
Agent.

 

Section 11.06                      Resignation of Administrative Agent.  The
Administrative Agent may at any time give notice of its resignation to the
Lenders, the Issuing Bank and the Borrower.  Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a bank as a successor.  If no such successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may on
behalf of the Lenders and the Issuing Bank, appoint a successor Administrative
Agent meeting the qualifications set forth above, provided that if the
Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in

 

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accordance with such notice and (a) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders or the Issuing Bank under any of
the Loan Documents, the retiring Administrative Agent shall continue to hold
such collateral security until such time as a successor Administrative Agent is
appointed) and (b) all payments, communications and determinations provided to
be made by, to or through the Administrative Agent shall instead be made by or
to each Lender and the Issuing Bank directly, until such time as the Required
Lenders appoint a successor Administrative Agent as provided for above in this
Section 11.06.  Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring (or
retired) Administrative Agent, and the retiring Administrative Agent shall be
discharged from all of its duties and obligations hereunder or under the other
Loan Documents (if not already discharged therefrom as provided above in this
paragraph).  The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between the Borrower and such successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Loan Documents,
the provisions of this Article XI and Section 12.03 shall continue in effect for
the benefit of such retiring Administrative Agent, its sub agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.

 

Section 11.07                      Non-Reliance on Administrative Agent and
Other Lenders.  Each Lender and the Issuing Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.  Each Lender and the Issuing Bank also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.  The Agents shall
not be required to keep themselves informed as to the performance or observance
by the Borrower or any of its Subsidiaries of this Agreement, the Loan
Documents, or any other document referred to or provided for herein or to
inspect the Properties or books of the Loan Parties or the Subsidiaries.  Except
for notices, reports, and other documents and information expressly required to
be furnished to the Lenders by the Administrative Agent hereunder, no Agent
shall have nay duty or responsibility to provide any Lender with an credit or
other information concerning the affairs, financial condition, or business of
the Loan Parties (or any of their Affiliates) which may come into possession of
such Agent or any of its Affiliates.  In this regard, each Lender acknowledges
that Vinson & Elkins L.L.P. is acting in this transaction as special counsel to
the Administrative Agent only, except that to the extent otherwise expressly
stated in any legal opinion or any Loan Document.  Each other party hereto will
consult with its own legal counsel to the extent that it deems necessary in
connection with the Loan Documents and the matters contemplated therein.

 

Section 11.08                      No Other Duties, etc.  The Arranger, the
Co-Syndication Agents and the Co-Documentation Agents shall have no duties,
responsibilities or liabilities under this Agreement and the other Loan
Documents other than, with respect to the Co-Syndication Agents

 

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and the Co-Documentation Agents, their duties, responsibilities and liabilities
in their capacity as Lenders hereunder.

 

Section 11.09                      Authority of Administrative Agent to Release
Collateral and Liens.  Each Lender and the Issuing Bank hereby authorizes, and
each other Person accepting the benefit of the Liens created by the Security
Instruments shall be deemed to have authorized, the Administrative Agent to
release any Collateral that is permitted to be sold or released pursuant to the
terms of the Loan Documents.  Each Lender and the Issuing Bank hereby
authorizes, and each other Person accepting the benefit of the Liens created by
the Security Instruments shall be deemed to have authorized, the Administrative
Agent to execute and deliver to the Borrower (or file, if appropriate), at the
Borrower’s sole cost and expense, any and all releases of Liens, termination
statements, assignments or other documents reasonably requested by the Borrower
in connection with any sale or other disposition of Property to the extent such
sale or other disposition is permitted by the terms of Section 9.11 or is
otherwise authorized by the terms of the Loan Documents.  To the extent any
Property is sold, assigned, conveyed or otherwise transferred as expressly
permitted by Section 9.11 to any Person other than a Loan Party, such Collateral
shall be sold, assigned, conveyed or otherwise transferred free and clear of all
Liens created by the Loan Documents.

 

ARTICLE XII
Miscellaneous

 

Section 12.01                      Notices.

 

(a)                                 Notices Generally.  Except in the case of
notices and other communications expressly permitted to be given by telephone
(and subject to Section 12.01(b)), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by facsimile, as
follows:

 

(i)                                     if to the Borrower, to it at the
following:

 

Southcross Energy LLC

1700 Pacific Ave., Suite 2900

Dallas, TX 75201

Attn: David Biegler and David Mueller

Fax: 214.393.7504

Email:            biegler@southcrossenergy.com and

mueller@southcrossenergy.com

 

and to:

 

Charlesbank Equity Fund VI, Limited Partnership

200 Clarendon Street, 54th Floor

Boston, MA 02116

Attn: Jon Biotti

Fax: 617.619.5402

 

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Email: jbiotti@charlesbank.com

 

with a copy to (which shall not constitute notice):

 

Gardere Wynne Sewell LLP

1061 Elm Street

Suite 3000

Dallas, TX 75201

Attn: Robert Sarfatis

Fax: 214.999.3245

Email: rsarfatis@gardere.com

 

(ii)                                  if to the Administrative Agent, to it at
the following:

 

Wells Fargo Bank, N.A.

201 Main Street

Suite 300

Fort Worth, TX 76102

Attn: Charles D. Kirkham

Fax: 817.334.7000

Email: kirkham@wellsfargo.com

 

with a copy to:

 

Wells Fargo Bank, N.A.

1700 Lincoln St. 3rd Floor

MAC: C7300-035

Denver, CO 80203

Attn: Amira Bahloul

Fax: 303.863.5533

Email: amira.a.bahloul@wellsfargo.com

 

with a copy to (which shall not constitute notice):

 

Vinson & Elkins L.L.P.

2001 Ross Ave., Suite 3700

Dallas, TX 75201-2975

Attn: Erec Winandy

Fax: 214-999-7756

Email: ewinandy@velaw.com

 

(iii)                               if to the Issuing Bank, to it at the
following:

 

Wells Fargo Bank, N.A.

201 Main Street

 

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Suite 300

Fort Worth, TX 76102

Attn: Charles D. Kirkham

Fax: 817.334.7000

Email: kirkham@wellsfargo.com

 

with a copy to:

 

Wells Fargo Bank, N.A.

1700 Lincoln St. 3rd Floor

MAC: C7300-035

Denver, CO 80203

Attn: Amira Bahloul

Fax: 303.863.5533

Email: amira.a.bahloul@wellsfargo.com

 

(iv)                              if to any other Lender, to it at its address
(or facsimile number) set forth in its Administrative Questionnaire.

 

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient).  Notices delivered through electronic communications to the extent
provided in Section 12.01(b) below, shall be effective as provided in
Section 12.01(b).

 

(b)                                 Electronic Communications.

 

(i)                                     Notices and other communications to the
Lenders and the Issuing Bank hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent; provided that the
foregoing shall not apply to notices to any Lender or the Issuing Bank pursuant
to Article II, Article III, Article IV and Article V if such Lender or the
Issuing Bank, as applicable, has notified the Administrative Agent that it is
incapable of receiving notices under such Article(s) by electronic
communication.  The Administrative Agent or the Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications.

 

(ii)                                  Unless the Administrative Agent otherwise
prescribes, (A) notices and other communications sent to an e-mail address shall
be deemed received upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement), provided that if
such notice or other communication is not sent during the normal business hours
of the recipient, such notice or communication shall be deemed to have been sent
at the opening of business on the next business day for the recipient, and
(B) notices or communications posted to

 

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an Internet or intranet website shall be deemed received upon the deemed receipt
by the intended recipient at its e-mail address as described in the foregoing
clause (B) of notification that such notice or communication is available and
identifying the website address therefore.

 

(c)                                  Change of Address, Etc. Any party hereto
may change its address or facsimile number for notices and other communications
hereunder by notice to the other parties hereto.

 

Section 12.02                      Waivers; Amendments.

 

(a)                                 No failure on the part of the Administrative
Agent, the Issuing Bank or any Lender to exercise and no delay in exercising,
and no course of dealing with respect to, any right, power or privilege, or any
abandonment or discontinuance of steps to enforce such right, power or
privilege, under any of the Loan Documents shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege under
any of the Loan Documents preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  The rights and remedies of the
Administrative Agent, the Issuing Bank and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have.  No waiver of any provision of this
Agreement or any other Loan Document or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be permitted by
Section 12.02(b), and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.  Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.

 

(b)                                 Neither this Agreement nor any provision
hereof nor any Security Instrument nor any provision thereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, or reduce any other Secured Obligations hereunder or under
any other Loan Document, without the written consent of each Lender adversely
affected thereby, (iii) postpone the scheduled date of payment or prepayment of
the principal amount of any Loan or LC Disbursement, or any interest thereon, or
any fees payable hereunder, or any other Secured Obligations hereunder or under
any other Loan Document, or reduce the amount of, waive or excuse any such
payment, or postpone or extend the Termination Date or Maturity Date without the
written consent of each Lender adversely affected thereby, (iv) release any
Guarantor (except as permitted pursuant to the Guaranty and Collateral Agreement
or in connection with a sale of such Guarantor permitted under Section 9.14) or
release all or substantially all of the Collateral, without the written consent
of each Lender (other than any Defaulting Lender), (v) change any of the
provisions of this Section 12.02(b), Section 10.02(c), or the definitions of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
under any other Loan Documents or make any determination or grant any

 

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consent hereunder or any other Loan Documents, without the written consent of
each Lender other than any Defaulting Lender, or (vi) change the application of
prepayments under Section 3.04(b)(iv), without the written consent of the
Required Lenders (it being understood that the Required Lenders may waive, in
whole or in part, any prepayment so long as the application of any such
prepayment that is still required to be made is not changed); provided, further,
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, any other Agent, or the Issuing Bank
hereunder or under any other Loan Document without the prior written consent of
the Administrative Agent, such other Agent or the Issuing Bank, as the case may
be.  Notwithstanding the foregoing, any supplement to Schedule 7.14
(Subsidiaries) shall be effective simply by delivering to the Administrative
Agent a supplemental schedule clearly marked as such and, upon receipt, the
Administrative Agent will promptly deliver a copy thereof to the Lenders.

 

Section 12.03                      Expenses, Indemnity; Damage Waiver.

 

(a)                                 Costs and Expenses.  The Borrower shall pay
(i) all reasonable out-of-pocket expenses incurred by the Administrative Agent
and its Affiliates (including the reasonable fees, charges and disbursements of
counsel and other outside consultants for the Administrative Agent) in
connection with the syndication of the credit facilities provided for herein,
the preparation, negotiation, execution, delivery and administration (both
before and after the execution hereof and including advice of counsel to the
Administrative Agent as to the rights and duties of the Administrative Agent and
the Lenders with respect thereto) of this Agreement and the other Loan Documents
and any amendments, modifications or waivers of or consents related to the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all costs, expenses, Taxes,
assessments and other charges incurred by any Agent or any Lender in connection
with any filing, registration, recording or perfection of any security interest
contemplated by this Agreement or any Security Instrument or any other document
referred to therein, (iii) all reasonable out-of-pocket expenses incurred by the
Issuing Bank in connection with the issuance, amendment, renewal or extension of
any Letter of Credit or any demand for payment thereunder, (iv) all
out-of-pocket expenses incurred by any Agent, the Issuing Bank or any Lender
(including the fees, charges and disbursements of any counsel for any Agent, the
Issuing Bank or any Lender) in connection with the enforcement or protection of
its rights in connection with this Agreement and the other Loan Documents,
including its rights under this Section 12.03 or in connection with the Loans
made or Letters of Credit issued hereunder, including, without limitation, all
such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.  Notwithstanding
anything to the contrary contained in this Section 12.03(a) or elsewhere in any
of the Loan Documents, neither the Borrower nor any Subsidiary shall be
obligated to pay or reimburse any Person for any costs, expenses, fees, taxes or
other charges of any nature whatsoever that are incurred or payable by any
Person in connection with any assignment referred to in Section 12.04(b), any
participation referred to in Section 12.04(d) or any pledge or security interest
referred to in Section 12.04(f).

 

(b)                                 INDEMNIFICATION BY THE BORROWER.  THE
BORROWER SHALL INDEMNIFY EACH AGENT (AND ANY SUB-AGENT THEREOF), THE ARRANGER,
THE ISSUING BANK AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING
PERSONS (EACH SUCH PERSON BEING CALLED AN

 

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“INDEMNITEE”) AGAINST, AND DEFEND AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY
AND ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES AND RELATED
EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY
INDEMNITEE, INCURRED BY ANY INDEMNITEE OR ASSERTED AGAINST ANY INDEMNITEE BY A
THIRD PARTY OR BY THE BORROWER OR ANY SUBSIDIARY ARISING OUT OF, IN CONNECTION
WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT, ANY
OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR
THEREBY, THE PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN
DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, (ii) THE
FAILURE OF THE BORROWER OR ANY SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY LOAN
DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT,
(iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR
COVENANT OF THE BORROWER OR ANY GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS
OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION
THEREWITH, (iv) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS
THEREFROM, INCLUDING, WITHOUT LIMITATION, (A) ANY REFUSAL BY THE ISSUING BANK 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 (B) THE PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT
NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER PRESENTATION
OF THE DOCUMENTS PRESENTED IN CONNECTION THEREWITH, (v) ANY OTHER ASPECT OF THE
LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS OF THE BORROWER AND ITS
SUBSIDIARIES BY THE BORROWER AND ITS SUBSIDIARIES, (vii) ANY ASSERTION THAT THE
LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE
SECURITY INSTRUMENTS, (viii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR
ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES OR OPERATIONS, INCLUDING, THE
PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED RELEASE, USE, TRANSPORT,
DISPOSAL, ARRANGEMENT OF DISPOSAL OR TREATMENT OF HAZARDOUS MATERIALS ON OR AT
ANY OF THEIR PROPERTIES, (ix) THE BREACH OR NON-COMPLIANCE BY THE BORROWER OR
ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY
SUBSIDIARY, (x) THE PAST OWNERSHIP BY THE BORROWER OR ANY SUBSIDIARY OF ANY OF
THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH
LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY,
(xi) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL, GENERATION,
THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR
DISPOSAL OF HAZARDOUS MATERIALS ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED
BY THE BORROWER OR ANY SUBSIDIARY OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE
OF

 

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HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR
ANY OF ITS SUBSIDIARIES, (xii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO
THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR (xiii) ANY OTHER ENVIRONMENTAL,
HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY
ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO
ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY,
WHETHER BROUGHT BY A THIRD PARTY OR BY THE BORROWER OR ANY SUBSIDIARY, AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY
SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL
NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR RELATED EXPENSES (x) ARE DETERMINED BY A COURT OF
COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM
THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF SUCH INDEMNITEE OR (y) RESULT FROM
A CLAIM BROUGHT BY THE BORROWER OR ANY SUBSIDIARY AGAINST ANY INDEMNITEE FOR
BREACH IN BAD FAITH OF SUCH INDEMNITEE’S OBLIGATIONS HEREUNDER OR UNDER ANY
OTHER LOAN DOCUMENT, IF THE BORROWER OR SUCH SUBSIDIARY HAS OBTAINED A FINAL AND
NONAPPEALABLE JUDGMENT IN ITS FAVOR ON SUCH CLAIM AS DETERMINED BY A COURT OF
COMPETENT JURISDICTION.

 

(c)                                  Reimbursement by Lenders.  To the extent
that the Borrower for any reason fails to pay indefeasibly any amount required
under Sections 12.03(a) or (b) to be paid by it to any Agent (or any sub-agent
thereof), the Arranger, the Issuing Bank or any Related Party of any of the
foregoing, each Lender severally agrees to pay to such Agent (or any such
sub-agent), the Arranger, the Issuing Bank or such Related Party, as the case
may be, such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against such Agent (or any such sub-agent), the Arranger or the Issuing
Bank in its capacity as such, or against any Related Party of any of the
foregoing acting for the Agent (or any such sub-agent), the Arranger or the
Issuing Bank in connection with such capacity.

 

(d)                                 Waiver of Consequential Damages, Etc. To the
fullest extent permitted by applicable law, the Borrower shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of
the proceeds thereof.  No Indemnitee referred to in Section 12.03(b) shall be
liable for any damages arising from the use

 

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by unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
Transactions.

 

(e)                                  Payments.  All amounts due under this
Section 12.03 shall be payable promptly after written demand therefor.

 

Section 12.04                      Assignments and Participations.

 

(a)                                 Successors and Assigns Generally.  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
(including any Affiliate of the Issuing Bank that issues a Letter of Credit),
except that (i) the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender, and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except (A) to an assignee in
accordance with the provisions of Section 12.04(b), (B) by way of participation
in accordance with the provisions of Section 12.04(d), or (C) by way of pledge
or assignment of a security interest subject to the restrictions of
Section 12.04(f) (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 (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), Participants
(to the extent provided in Section 12.04(d)) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

 

(b)                                 Assignments by Lenders.  Any Lender may at
any time assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it); provided that any such assignments shall
be subject to the following conditions:

 

(i)                                     Minimum Amounts.

 

(A)                               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, an Affiliate of a
Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B)                               in any case not described in
Section 12.04(b)(i)(A), the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the applicable Commitment
is not then in effect, the principal outstanding balance of the Loans of the
assigning Lender 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).

 

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(ii)                                  Proportionate Amounts.  Each partial
assignment shall be made as an assignment of a proportionate part of all of the
assigning Lender’s rights and obligations under this Agreement and with respect
to the Loan or the Commitment assigned, except that this clause (ii) shall not
prohibit any Lender from assigning all or a portion of its rights on a non-pro
rata basis.

 

(iii)                               Required Consents.  No consent shall be
required for any assignment except to the extent required by
Section 12.04(b)(i)(B) and, in addition:

 

(A)                               the consent of the Borrower (such consent not
to be unreasonably withheld or delayed) shall be required unless (1) an Event of
Default has occurred and is continuing at the time of such assignment or
(2) such assignment is to a Lender, an Affiliate of a Lender or an Approved
Fund; provided that the Borrower shall be deemed to have consented to any such
assignment unless it shall object thereto by written notice to the
Administrative Agent within five (5) Business Days after having received notice
thereof;

 

(B)                               the consent of the Administrative Agent (such
consent not to be unreasonably withheld or delayed) shall be required for
assignments in respect of a Commitment or Revolving Credit Exposure if such
assignment is to a Person that is not a Lender with a Commitment, an Affiliate
of such Lender or an Approved Fund with respect to such Lender;

 

(C)                               the consent of the Issuing Bank (such consent
not to be unreasonably withheld or delayed) shall be required for any assignment
that increases the obligation of the assignee to participate in LC Exposure
(whether or not then outstanding).

 

(iv)                              Assignment and Assumption.  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
$3,500 (unless the assignment is to a Lender or an Approved Fund), and the
assignee, if it is not a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.

 

(v)                                 No Assignment to Borrower.  No such
assignment shall be made to the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.

 

(vi)                              No Assignment to Natural Persons.  No such
assignment shall be made to a natural person.

 

(vii)                           No Assignments to Defaulting Lenders.  No such
assignment shall be made to a Defaulting Lender.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to Section 12.04(c), from and after the effective date specified in each
Assignment and Assumption, the 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

 

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obligations under this Agreement, such Lender shall cease to be a party hereto)
but shall continue to be entitled to the benefits of Section 5.01, Section 5.02,
Section 5.03 and Section 12.03 with respect to facts and circumstances occurring
prior to the effective date of such assignment.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 12.04 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
Section 12.04(d).

 

(c)                                  Register.  The Administrative Agent, acting
solely for this purpose as an agent of the Borrower, shall maintain at one of
its offices 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 amount of the Loans and LC Disbursements 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, the Issuing Bank 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, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.  In connection with any changes to the Register, if
necessary, the Administrative Agent will reflect the revisions on Annex I and
forward a copy of such revised Annex I to the Borrower, the Issuing Bank and
each Lender.

 

(d)                                 Participations.

 

(i)                                     Any Lender may at any time, without the
consent of, or notice to the Borrower, the Administrative Agent or the Issuing
Bank, 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 owing to it); provided that (A) such Lender’s obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Bank 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.

 

(ii)                                  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, modification or waiver
described in the proviso to Section 12.02 that affects such Participant.  In
addition such agreement must provide that the Participant be bound by the
provisions of Section 12.03.  Subject to Section 12.04(e), the Borrower agrees
that each Participant shall be entitled to the benefits of Section 5.01,
Section 5.02 and Section 5.03 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 12.04(b).  To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 12.08 as though it were a Lender, provided that such Participant agrees
to be subject to Section 4.01(c) as though it were a Lender.

 

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(e)                                  Limitations upon Participant Rights.  A
Participant shall not be entitled to receive any greater payment under
Section 5.01 or Section 5.03 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 5.03 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 5.03(f) as though it were a Lender

 

(f)                                   Certain Pledges.  Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement to secure obligations of such Lender, including, without
limitation, any pledge or assignment to secure obligations to a Federal Reserve
Bank, and Section 12.04(e) shall not apply to any such pledge or assignment of a
security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

 

(g)                                  Restrictions if Registration Required. 
Notwithstanding any other provisions of this Section 12.04, no transfer or
assignment of the interests or obligations of any Lender or any grant of
participations therein shall be permitted if such transfer, assignment or grant
would require the Borrower and the Guarantors to file a registration statement
with the SEC or to qualify the Loans under the “Blue Sky” laws of any state.

 

Section 12.05                      Survival; Revival; Reinstatement.

 

(a)                                 All covenants, agreements, representations
and warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of this Agreement
and the making of any Loans and issuance of any Letters of Credit, regardless of
any investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent, any other Agent, the Issuing Bank
or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated.  The provisions of
Section 5.01, Section 5.02, Section 5.03 and Section 12.03 and Article XI shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Letters of Credit and the Commitments or the termination
of this Agreement, any other Loan Document or any provision hereof or thereof.

 

(b)                                 To the extent that any payments on the
Secured Obligations or proceeds of any Collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Secured Obligations
so satisfied shall be revived and continue as if such payment or proceeds had
not been received and

 

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the Administrative Agent’s and the Lenders’ Liens, security interests, rights,
powers and remedies under this Agreement and each Loan Document shall continue
in full force and effect.  In such event, each Loan Document shall be
automatically reinstated and the Borrower shall take such action as may be
reasonably requested by the Administrative Agent and the Lenders to effect such
reinstatement.

 

Section 12.06                      Counterparts; Integration; Effectiveness;
Electronic Execution.

 

(a)                                 Counterparts.  This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.

 

(b)                                 Integration.  This Agreement, the other Loan
Documents and any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and thereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof and thereof.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

(c)                                  Effectiveness.  Except as provided in
Section 6.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto, and thereafter shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.  Delivery of an executed counterpart of a signature page of this
Agreement by facsimile or other electronic transmission shall be effective as
delivery of a manually executed counterpart of this Agreement.

 

(d)                                 Electronic Execution of Assignments.  The
words “execution,” “signed,” “signature,” and words of like import in any
Assignment and Assumption shall be deemed to include electronic signatures or
the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.

 

Section 12.07                      Severability.  Any provision of this
Agreement or any other Loan Document held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof or thereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

 

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Section 12.08                      Right of Setoff.  If an Event of Default
shall have occurred and be continuing, each Lender, the Issuing Bank and each of
their respective Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by applicable law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final,
in whatever currency) at any time held and other obligations (of whatsoever
kind, including, without limitations obligations under Hedging Agreements, and
in whatever currency) at any time owing by such Lender, the Issuing Bank or any
such Affiliate to or for the credit or the account of the Borrower or any
Subsidiary against any and all of the obligations of the Borrower or any
Subsidiary now or hereafter existing under this Agreement or any other Loan
Document to such Lender or the Issuing Bank, irrespective of whether or not such
Lender or the Issuing Bank shall have made any demand under this Agreement or
any other Loan Document and although such obligations of the Borrower or such
Subsidiary may be contingent or unmatured or are owed to a branch or office of
such Lender or the Issuing Bank different from the branch or office holding such
deposit or obligated on such Indebtedness.  The rights of each Lender, the
Issuing Bank and their respective Affiliates under this Section 12.08 are in
addition to other rights and remedies (including other rights of setoff) that
such Lender, the Issuing Bank or their respective Affiliates may have.  Each
Lender and the Issuing Bank agrees to notify the Borrower and the Administrative
Agent promptly after any such setoff and application; provided that the failure
to give such notice shall not affect the validity of such setoff and
application.

 

Section 12.09                      GOVERNING LAW; JURISDICTION; CONSENT TO
SERVICE OF PROCESS.

 

(a)                                 THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS EXCEPT TO THE EXTENT THAT UNITED STATES FEDERAL LAW PERMITS ANY LENDER TO
CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR TAKE INTEREST AT THE RATE ALLOWED BY
THE LAWS OF THE STATE WHERE SUCH LENDER IS LOCATED.  CHAPTER 346 OF THE TEXAS
FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND
REVOLVING TRI-PARTY ACCOUNTS) SHALL NOT APPLY TO THIS AGREEMENT OR THE NOTES.

 

(b)                                 ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THE LOAN DOCUMENTS SHALL BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF
THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF TEXAS, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF
AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, 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 SUCH ACTION OR PROCEEDING IN
SUCH RESPECTIVE JURISDICTIONS.  THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE
AND DOES NOT PRECLUDE A PARTY FROM OBTAINING JURISDICTION OVER ANOTHER PARTY IN
ANY COURT OTHERWISE HAVING JURISDICTION.

 

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(c)                                  EACH PARTY IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO IT AT THE ADDRESS SPECIFIED IN SECTION 12.01 OR SUCH OTHER
ADDRESS AS IS SPECIFIED PURSUANT TO SECTION 12.01 (OR ITS ASSIGNMENT AND
ASSUMPTION), SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH
MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A
NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANOTHER PARTY IN ANY OTHER
JURISDICTION.

 

(d)                                 EACH PARTY HEREBY (i) IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY) AND FOR ANY COUNTERCLAIM THEREIN;
(ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES; (iii) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS,
AND (iv) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION 12.09.

 

Section 12.10                      Headings.  Article and Section headings and
the Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.

 

Section 12.11                      Confidentiality.  Each of the Administrative
Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed
(a) to its Affiliates and to its and its Affiliates’ respective partners,
directors, officers, employees, agents, advisors and other representatives (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 purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (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 or any other
Loan Document, (e) in connection with the exercise of any remedies hereunder or
under any other Loan

 

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Document or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section 12.11, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any Hedging Agreement relating to the Borrower and its obligations,
(g) with the consent of the Borrower, or (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section 12.11 or (ii) becomes available to the Administrative Agent, the Issuing
Bank, any Lender or any of their respective Affiliates on a nonconfidential
basis from a source other than the Borrower.  For purposes of this
Section 12.11, “Information” means all information received from the Borrower or
any Subsidiary relating to the Borrower or any Subsidiary or any of their
respective businesses, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by the Borrower or a Subsidiary; provided that, in the case
of information received from the Borrower or any Subsidiary after the date
hereof, such information is clearly identified at the time of delivery as
confidential.  Any Person required to maintain the confidentiality of
Information as provided in this Section 12.11 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.

 

Section 12.12                      Interest Rate Limitation.  It is the
intention of the parties hereto that each Lender shall conform strictly to usury
laws applicable to it.  Accordingly, if the Transactions contemplated hereby
would be usurious as to any Lender under laws applicable to it (including the
laws of the United States of America and the State of Texas or any other
jurisdiction whose laws may be mandatorily applicable to such Lender
notwithstanding the other provisions of this Agreement), then, in that event,
notwithstanding anything to the contrary in any of the Loan Documents or any
agreement entered into in connection with or as security for the Secured
Obligations, it is agreed as follows:  (a) the aggregate of all consideration
which constitutes interest under law applicable to any Lender that is contracted
for, taken, reserved, charged or received by such Lender under any of the Loan
Documents or agreements or otherwise in connection with the Loans shall under no
circumstances exceed the maximum amount allowed by such applicable law, and any
excess shall be canceled automatically and if theretofore paid shall be credited
by such Lender on the principal amount of the Secured Obligations (or, to the
extent that the principal amount of the Secured Obligations shall have been or
would thereby be paid in full, refunded by such Lender to the Borrower); and
(b) in the event that the maturity of the Loans is accelerated by reason of an
election of the holder thereof resulting from any Event of Default under this
Agreement or otherwise, or in the event of any required or permitted prepayment,
then such consideration that constitutes interest under law applicable to any
Lender may never include more than the maximum amount allowed by such applicable
law, and excess interest, if any, provided for in this Agreement or otherwise
shall be canceled automatically by such Lender as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited by such
Lender on the principal amount of the Secured Obligations (or, to the extent
that the principal amount of the Secured Obligations shall have been or would
thereby be paid in full, refunded by such Lender to the Borrower).  All sums
paid or agreed to be paid to any Lender for the use, forbearance or detention of
sums due hereunder shall, to the extent permitted by law applicable to such
Lender, be amortized, prorated, allocated and spread throughout the stated

 

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term of the Loans until payment in full so that the rate or amount of interest
on account of any Loans hereunder does not exceed the maximum amount allowed by
such applicable law.  If at any time and from time to time (i) the amount of
interest payable to any Lender on any date shall be computed at the Highest
Lawful Rate applicable to such Lender pursuant to this Section 12.12 and (ii) in
respect of any subsequent interest computation period the amount of interest
otherwise payable to such Lender would be less than the amount of interest
payable to such Lender computed at the Highest Lawful Rate applicable to such
Lender, then the amount of interest payable to such Lender in respect of such
subsequent interest computation period shall continue to be computed at the
Highest Lawful Rate applicable to such Lender until the total amount of interest
payable to such Lender shall equal the total amount of interest which would have
been payable to such Lender if the total amount of interest had been computed
without giving effect to this Section 12.12.  To the extent that Chapter 303 of
the Texas Finance Code is relevant for the purpose of determining the Highest
Lawful Rate applicable to a Lender, such Lender elects to determine the
applicable rate ceiling under such Chapter by the weekly ceiling from time to
time in effect.  Chapter 346 of the Texas Finance Code does not apply to the
Borrower’s obligations hereunder.

 

Section 12.13                      EXCULPATION PROVISIONS.  EACH OF THE PARTIES
HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT
READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF
THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN
REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY
ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING
THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY.  EACH PARTY HERETO
AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF
ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE
BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE
PROVISION IS NOT “CONSPICUOUS.”

 

Section 12.14                      Collateral Matters; Hedging Agreements;
Treasury Management Agreements.  The benefit of the Security Instruments and of
the provisions of this Agreement relating to any Collateral securing the Secured
Obligations shall also extend to and be available to Secured Hedging Agreement
Counterparties and Treasury Management Counterparties on a pro rata basis in
respect of any obligations of the Borrower or any of its Subsidiaries which
arise under any such Secured Hedging Agreement or Treasury Management
Agreements.  No Lender or Affiliate of a Lender shall have any voting rights
under any Loan Document as a result of the existence of obligations owed to it
under any such Secured Hedging Agreements or Treasury Management Agreements.

 

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Section 12.15                      No Third Party Beneficiaries.  This
Agreement, the other Loan Documents, and the agreement of the Lenders to make
Loans and the Issuing Bank to issue, amend, renew or extend Letters of Credit
hereunder are solely for the benefit of the Borrower, and no other Person
(including, without limitation, any Subsidiary of the Borrower, any obligor,
contractor, subcontractor, supplier or materialman) shall have any rights,
claims, remedies or privileges hereunder or under any other Loan Document
against the Administrative Agent, any other Agent, the Issuing Bank or any
Lender for any reason whatsoever.  There are no third party beneficiaries.

 

Section 12.16                      USA Patriot Act Notice.  Each Lender hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “USA
Patriot Act”), it is required to obtain, verify and record information that
identifies the Borrower and its Subsidiaries, which information includes the
name and address of the Borrower and its Subsidiaries and other information that
will allow such Lender to identify the Borrower and its Subsidiaries in
accordance with the USA Patriot Act.

 

Section 12.17                      Assignment and Assumption from Existing
Borrower to Borrower.

 

(a)                                 The Existing Borrower hereby irrevocably
assigns, transfers and conveys all of its rights, duties, liabilities and
obligations under the Existing Credit Agreement and the other Existing Loan
Documents to which it is a party to the Borrower, and the Borrower hereby
irrevocably accepts such assignment from the Existing Borrower and as of the
Effective Date, (i) agrees to be bound by all of the terms, conditions and
provisions of, (ii) assumes all of the rights, duties, liabilities and
obligations of the Existing Borrower under and (iii) promises to keep and
perform all covenants, terms, provisions and agreements of the Existing
Borrower, in each case, under the Existing Credit Agreement, the Existing Loan
Documents and any other documents or instruments delivered pursuant thereto to
the extent related to all of such outstanding rights, duties, liabilities and
obligations of the Existing Borrower under the Existing Credit Agreement and the
Existing Loan Documents, in each case except to the extent amended, restated and
superseded in connection with the transactions contemplated hereby.

 

(b)                                 In connection with the aforesaid assignment
and assumption, the Administrative Agent, for itself and on behalf of the
Lenders, hereby releases the Existing Borrower from any and all of its rights,
duties, liabilities and obligations under the Existing Credit Agreement and the
Existing Loan Documents.

 

Section 12.18                      Amendment and Restatement.  It is the
intention of the Borrower, the Administrative Agent, and the Lenders, and such
parties hereby agree, from and after the Effective Date, this Agreement
supersedes and replaces the Existing Credit Agreement in its entirety, and that
(a) such amendment and restatement shall operate to renew, amend and modify
certain of the rights and obligations of the parties under the Existing Credit
Agreement as provided herein, but shall not act as a novation thereof, and
(b) except with respect to Liens on Properties of the Existing Borrower, the
Liens securing the “Secured Obligations” under and as defined in the Existing
Credit Agreement shall not be extinguished, but shall be carried forward and
shall secure such obligations and Indebtedness as renewed, amended, restated,
and modified hereby.  Unless specifically amended hereby, each of the Loan
Documents, the Exhibits and the Schedules shall continue in full force and
effect and, from and after the Effective Date, all

 

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references to the “Credit Agreement” contained therein shall be deemed to refer
to this Agreement.  Each Lender hereunder that is an Existing Lender and the
Existing Borrower each hereby consent to the amendments to, and amendments and
restatements of, the Existing Loan Documents in the form of the Loan Documents.

 

Section 12.19                      NON-RECOURSE TO THE GENERAL PARTNER.  THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS DO NOT AND WILL NOT IN ANY WAY CONSTITUTE
A DIRECT OR INDIRECT GUARANTY BY THE GENERAL PARTNER OF THE OBLIGATIONS OF THE
BORROWER OR ANY SUBSIDIARY HEREUNDER OR THEREUNDER.  IF ANY PROVISION OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT IS HELD BY ANY AUTHORITY TO CONSTITUTE A
DIRECT OR INDIRECT GUARANTY BY THE GENERAL PARTNER OF THE OBLIGATIONS OF THE
BORROWER OR ANY SUBSIDIARY, SUCH PROVISION SHALL BE DEEMED INEFFECTIVE TO THE
EXTENT SUCH PROVISION CONSTITUTES A DIRECT OR INDIRECT GUARANTY BY THE GENERAL
PARTNER OF THE OBLIGATIONS OF THE BORROWER OR ANY SUBSIDIARY.  NEITHER THIS
AGREEMENT NOR ANY LOAN DOCUMENT IS INTENDED TO CREATE ANY LIABILITY OF THE
GENERAL PARTNER FOR THE PERFORMANCE OF ANY OBLIGATION OF THE BORROWER OR ANY
SUBSIDIARY THEREUNDER OR HEREUNDER.  NEITHER THE ADMINISTRATIVE AGENT NOR ANY
LENDER SHALL HAVE ANY RECOURSE AGAINST THE GENERAL PARTNER (INCLUDING ANY
RECOURSE FOR ANY DEFICIENCY REMAINING UNDER THIS AGREEMENT OR ANY LOAN DOCUMENT
AFTER THE DISPOSITION OF COLLATERAL PLEDGED BY THE BORROWER OR ANY SUBSIDIARY);
PROVIDED, THAT, NOTWITHSTANDING THE FOREGOING TO THE CONTRARY, IN NO EVENT SHALL
THIS SECTION 12.19 RELIEVE THE GENERAL PARTNER FROM ANY LIABILITY IT MAY HAVE AS
A RESULT OF ITS FRAUD, WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, OR THAT OF ANY OF
ITS OFFICERS, IN CONNECTION WITH THE EXECUTION, DELIVERY OR PERFORMANCE OF ANY
LOAN DOCUMENTS OR ANY CERTIFICATES OR DOCUMENTS DELIVERED IN CONNECTION
THEREWITH BY THE GENERAL PARTNER ON BEHALF OF THE BORROWER IN ITS CAPACITY AS
THE BORROWER’S GENERAL PARTNER.

 

[SIGNATURES BEGIN NEXT PAGE]

 

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The parties hereto have caused this Agreement to be duly executed as of the day
and year first above written.

 

BORROWER:

SOUTHCROSS ENERGY PARTNERS, L.P.

 

 

 

By Southcross Energy Partners GP, LLC, its general partner

 

 

 

 

 

By:

/s/ J. Michael Anderson

 

Name:

J. Michael Anderson

 

Title:

Senior Vice President

 

[Signature Page]

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

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The undersigned Existing Borrower is signing for the sole purposes of evidencing
its agreement (a) to Section 12.17 of this Agreement and (b) to the amendment
and restatement of the Existing Loan Documents as required under
Section 12.02(b) of the Existing Credit Agreement.

 

 

EXISTING BORROWER:

SOUTHCROSS ENERGY LLC

 

 

 

 

 

By:

/s/ J. Michael Anderson

 

Name:

J. Michael Anderson

 

Title:

Senior Vice President

 

[Signature Page]

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

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ADMINISTRATIVE AGENT,

 

ISSUING BANK AND LENDER:

WELLS FARGO BANK, N.A.

 

 

 

 

 

By:

/s/ Andrew Ostrov

 

Name:

Andrew Ostrov

 

Title:

Director

 

[Signature Page]

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

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CO-SYNDICATION AGENT

 

AND LENDER:

CITIBANK, N.A.

 

 

 

 

 

By:

/s/ Mason McGurrin

 

Name:

Mason McGurrin

 

Title:

Vice President

 

[Signature Page]

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

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CO-SYNDICATION AGENT

 

AND LENDER:

SUNTRUST BANK

 

 

 

 

 

By:

/s/ Scott Mackey

 

Name:

Scott Mackey

 

Title:

Director

 

[Signature Page]

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

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CO-DOCUMENTATION AGENT

 

AND LENDER:

BARCLAYS BANK PLC

 

 

 

 

 

By:

/s/ Vanessa A. Kurbatskiy

 

Name:

Vanessa A. Kurbatskiy

 

Title:

Vice President

 

[Signature Page]

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

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CO-DOCUMENTATION AGENT

 

AND LENDER:

JPMORGAN CHASE BANK, N.A.

 

 

 

 

 

By:

/s/ Preeti Bhatnagar

 

Name:

Preeti Bhatnagar

 

Title:

Authorized Officer

 

[Signature Page]

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

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CO-DOCUMENTATION AGENT

 

AND LENDER:

COMPASS BANK

 

 

 

 

 

By:

/s/ Blake Kirshman

 

Name:

Blake Kirshman

 

Title:

Vice President

 

[Signature Page]

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

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LENDER:

AMEGY BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Jill McSorley

 

Name:

Jill McSorley

 

Title:

Senior Vice President

 

[Signature Page]

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

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LENDER:

ROYAL BANK OF CANADA

 

 

 

 

 

By:

/s/ Chris Benton

 

Name:

Chris Benton

 

Title:

Authorized Signatory

 

[Signature Page]

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

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LENDER:

COMERICA BANK

 

 

 

 

 

By:

/s/ Brandon M. White

 

Name:

Brandon M. White

 

Title:

Corporate Banking Officer

 

[Signature Page]

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

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LENDER:

MIDFIRST BANK

 

 

 

 

 

By:

/s/ W. Thomas Portman

 

Name:

W. Thomas Portman

 

Title:

Vice President

 

[Signature Page]

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

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LENDER:

RAYMOND JAMES BANK, N.A

 

 

 

 

 

By:

/s/ Alexander L. Rody

 

Name:

Alexander L. Rody

 

Title:

Senior Vice President

 

[Signature Page]

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

 

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ANNEX I
LIST OF COMMITMENTS

 

Name of Lender

 

Commitment

 

Applicable
Percentage

 

Wells Fargo Bank, N.A.

 

$

50,000,000.00

 

14.28571429

%

Citibank, N.A.

 

47,000,000.00

 

13.42857143

%

SunTrust Bank

 

35,000,000.00

 

10.00000000

%

Barclays Bank PLC

 

35,000,000.00

 

10.00000000

%

JPMorgan Chase Bank, N.A.

 

35,000,000.00

 

10.00000000

%

Compass Bank

 

32,000,000.00

 

9.14285714

%

Amegy Bank National Association

 

30,000,000.00

 

8.57142857

%

Royal Bank of Canada

 

30,000,000.00

 

8.57142857

%

Comerica Bank

 

20,000,000.00

 

5.71428571

%

Midfirst Bank

 

20,000,000.00

 

5.71428571

%

Raymond James Bank, N.A

 

16,000,000.00

 

4.57142857

%

TOTAL

 

$

350,000,000.00

 

100.00000000

%

 

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

 

ANNEX II
EXISTING LETTERS OF CREDIT

 

Beneficiary

 

Applicant

 

Amount

 

Issue Date

 

BG Energy Merchants

 

Existing Borrower

 

$

1,400,000

 

May 30, 2012

 

EP Energy E&P Company

 

Existing Borrower

 

$

2,000,000

 

September 7, 2012

 

San Patricio Electric

 

Existing Borrower

 

$

960,000

 

November 3, 2011

 

San Patricio Electric

 

Existing Borrower

 

$

420,000

 

April 13, 2012

 

EOG

 

Existing Borrower

 

$

2,600,000

 

July 3, 2012

 

Devon Energy

 

Existing Borrower

 

$

2,600,000

 

December 27, 2011

 

Energy Transfer

 

Existing Borrower

 

$

7,600,000

 

October 10, 2012

 

Denbury Onshore

 

Existing Borrower

 

$

750,000

 

June 6, 2012

 

XTO

 

Existing Borrower

 

$

4,500,000

 

July 22, 2012

 

Louis Dreyfus

 

Existing Borrower

 

$

400,000

 

August 28, 2012

 

Forest Oil

 

Existing Borrower

 

$

1,750,000

 

October 26, 2012

 

Exxon Mobil

 

Existing Borrower

 

$

1,700,000

 

October 29, 2012

 

 

Annex II-1

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