<PAGE>

                                                                   Exhibit 10.01

                            364-DAY CREDIT AGREEMENT

                                      among

                         DUKE ENERGY FIELD SERVICES, LLC
                                       and
                     DUKE ENERGY FIELD SERVICES CORPORATION
                                  as Borrowers,

                          THE LENDERS IDENTIFIED HEREIN

                                       AND

                              JPMORGAN CHASE BANK,
                            as Administrative Agent,

                                SUNTRUST BANK and
                              WACHOVIA BANK, N.A.,
                            as Co-Syndication Agents

                                       AND

                       THE ROYAL BANK OF SCOTLAND PLC and
                         UBS AG, CAYMAN ISLANDS BRANCH,
                           as Co-Documentation Agents

                           DATED AS OF MARCH 28, 2003

                                  Arranged by:

                          J.P. MORGAN SECURITIES INC.,
                   as Sole Lead Arranger and Sole Book Manager

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                              <C>
SECTION 1.  DEFINITIONS AND ACCOUNTING TERMS.................................................................     1
     1.1      Definitions....................................................................................     1
     1.2      Computation of Time Periods....................................................................    13
     1.3      Accounting Terms...............................................................................    13
     1.4      Time...........................................................................................    13

SECTION 2.  LOANS............................................................................................    14
     2.1      Revolving Committed Amount.....................................................................    14
     2.2      Letter of Credit Subfacility...................................................................    14
     2.3      Method of Borrowing for Loans..................................................................    19
     2.4      Funding of Loans...............................................................................    19
     2.5      Continuations and Conversions..................................................................    20
     2.6      Minimum Amounts................................................................................    20
     2.7      Reductions of Revolving Committed Amounts......................................................    21
     2.8      Notes..........................................................................................    21
     2.9      Joint and Several Liability of the Borrowers...................................................    21
     2.10     Limitation of Liability of Borrowers...........................................................    22
     2.11     Increases in Revolving Committed Amount........................................................    23

SECTION 3.  PAYMENTS.........................................................................................    24
     3.1      Interest.......................................................................................    24
     3.2      Prepayments....................................................................................    25
     3.3      Payment in full at Maturity....................................................................    25
     3.4      Fees...........................................................................................    26
     3.5      Place and Manner of Payments...................................................................    26
     3.6      Pro Rata Treatment.............................................................................    27
     3.7      Computations of Interest and Fees..............................................................    27
     3.8      Sharing of Payments............................................................................    28
     3.9      Evidence of Debt...............................................................................    29

SECTION 4.  ADDITIONAL PROVISIONS REGARDING LOANS............................................................    30
     4.1      Eurodollar Loan Provisions.....................................................................    30
     4.2      Capital Adequacy...............................................................................    32
     4.3      Compensation...................................................................................    32
     4.4      Taxes..........................................................................................    33
     4.5      Replacement of Lenders.........................................................................    35

SECTION 5.  CONDITIONS PRECEDENT.............................................................................    36
     5.1      Closing Conditions.............................................................................    36
     5.2      Conditions to Loans............................................................................    38

SECTION 6.  REPRESENTATIONS AND WARRANTIES...................................................................    39
     6.1      Organization and Good Standing.................................................................    39
</TABLE>

                                       i

<PAGE>

<TABLE>
<S>                                                                                                              <C>
     6.2      Due Authorization..............................................................................    39
     6.3      No Conflicts...................................................................................    39
     6.4      Consents.......................................................................................    40
     6.5      Enforceable Obligations........................................................................    40
     6.6      Financial Condition............................................................................    40
     6.7      Taxes..........................................................................................    40
     6.8      Compliance with Law............................................................................    41
     6.9      Use of Proceeds; Margin Stock..................................................................    41
     6.10     Government Regulation..........................................................................    41
     6.11     Solvency.......................................................................................    41
     6.12     Environmental Matters..........................................................................    41
     6.13     Subsidiaries...................................................................................    41
     6.14     Litigation.....................................................................................    42

SECTION 7.  AFFIRMATIVE COVENANTS............................................................................    42
     7.1      Information Covenants..........................................................................    42
     7.2      Preservation of Existence and Franchises.......................................................    44
     7.3      Books and Records..............................................................................    44
     7.4      Compliance with Law............................................................................    44
     7.5      Payment of Taxes and Other Indebtedness........................................................    45
     7.6      Maintenance of Property; Insurance.............................................................    45
     7.7      Use of Proceeds................................................................................    45
     7.8      Audits/Inspections.............................................................................    45
     7.9      Maintenance of Ownership.......................................................................    46
     7.10     Debt to Capitalization Ratio...................................................................    46
     7.11     Interest Coverage Ratio........................................................................    46

SECTION 8.  NEGATIVE COVENANTS...............................................................................    46
     8.1      Nature of Business.............................................................................    46
     8.2.     Liens..........................................................................................    46
     8.3      Consolidation and Merger.......................................................................    48
     8.4      Sale or Lease of Assets........................................................................    49
     8.5      Transactions with Affiliates...................................................................    49
     8.6      Indebtedness...................................................................................    49
     8.7      Restricted Payments............................................................................    49

SECTION 9.  EVENTS OF DEFAULT................................................................................    50
     9.1      Events of Default..............................................................................    50
     9.2      Acceleration; Remedies.........................................................................    52
     9.3      Allocation of Payments After Event of Default..................................................    53

SECTION 10.  AGENCY PROVISIONS...............................................................................    54
     10.1     Appointment....................................................................................    54
     10.2     Delegation of Duties...........................................................................    55
     10.3     Exculpatory Provisions.........................................................................    55
     10.4     Reliance on Communications.....................................................................    55
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                              <C>
     10.5     Notice of Default..............................................................................    56
     10.6     Non-Reliance on Agent and Other Lenders........................................................    56
     10.7     Indemnification................................................................................    56
     10.8     Agent in Its Individual Capacity...............................................................    57
     10.9     Successor Agent................................................................................    57

SECTION 11.  MISCELLANEOUS...................................................................................    58
     11.1     Notices........................................................................................    58
     11.2     Right of Set-Off...............................................................................    58
     11.3     Benefit of Agreement...........................................................................    58
     11.4     No Waiver; Remedies Cumulative.................................................................    61
     11.5     Payment of Expenses, etc.......................................................................    61
     11.6     Amendments, Waivers and Consents...............................................................    62
     11.7     Counterparts/Telecopy..........................................................................    62
     11.8     Headings.......................................................................................    63
     11.9     Defaulting Lender..............................................................................    63
     11.10    Survival of Indemnification and Representations and Warranties.................................    63
     11.11    Governing Law; Venue...........................................................................    63
     11.12    Waiver of Jury Trial; Waiver of Consequential Damages..........................................    64
     11.13    Severability...................................................................................    64
     11.14    Further Assurances.............................................................................    64
     11.15    Entirety.......................................................................................    64
     11.16    Binding Effect; Continuing Agreement...........................................................    64
     11.17    Confidentiality................................................................................    65
</TABLE>

SCHEDULES

Schedule 1.1      Commitment Percentages
Schedule 6.13     Material Subsidiaries
Schedule 8.2      Liens
Schedule 11.1     Notices

EXHIBITS

Exhibit 2.3       Form of Notice of Borrowing
Exhibit 2.5       Form of Notice of Continuation/Conversion
Exhibit 2.8       Form of Note
Exhibit 2.11      Commitment Acceptance
Exhibit 7.1(c)    Form of Officer's Certificate
Exhibit 11.3(b)   Form of Assignment Agreement

                                      iii

<PAGE>

                            364-DAY CREDIT AGREEMENT

         THIS 364-DAY CREDIT AGREEMENT (this "Credit Agreement"), dated as of
March 28, 2003, is entered into among DUKE ENERGY FIELD SERVICES, LLC, a
Delaware limited liability company and DUKE ENERGY FIELD SERVICES CORPORATION, a
Delaware corporation (individually, a "Borrower" and collectively, the
"Borrowers"), the Lenders (as defined herein) and JPMORGAN CHASE BANK, as
administrative agent for the Lenders (in such capacity, the "Agent").

                                    RECITALS

         WHEREAS, the Borrowers have requested that the Lenders make available
to them a revolving credit facility in the aggregate amount of $350 million for
the purposes set forth herein; and

         WHEREAS, the Lenders have agreed to provide the requested revolving
credit facility to the Borrowers on the terms, and subject to the conditions,
set forth herein.

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

                                   SECTION 1.

                        DEFINITIONS AND ACCOUNTING TERMS

         1.1      DEFINITIONS.

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

                  "Adjusted Eurodollar Rate" means the Eurodollar Rate plus, as
         applicable, (a) the Applicable Margin for Eurodollar Loans on and
         before Maturity Date or (b) the Applicable Margin for Eurodollar Loans
         subsequent to Maturity Date.

                  "Affiliate" means, with respect to any Person, any other
         Person directly or indirectly controlling, controlled by or under
         direct or indirect common control with such Person and, with respect to
         the Borrowers, shall include ConocoPhillips and its Affiliates. A
         Person shall be deemed to control a corporation if such Person
         possesses, directly or indirectly, the power to direct or cause
         direction of the management and policies of such corporation, whether
         through the ownership of voting securities, by contract or otherwise.

                  "Agency Services Address" means JPMorgan Chase Bank, 1111
         Fannin - 10th Fl., Houston, Texas 77002, or such other address as may
         be identified by written notice from the Agent to the Borrowers and the
         Lenders.

<PAGE>

                  "Agent" means JPMorgan Chase Bank and any successors and
         assigns in such capacity.

                  "Applicable Margin" means, at any time, the rate per annum set
         forth in the table below opposite the Debt Rating of the Borrowers:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
                                                                  Applicable Margin     Applicable Margin
                                                                 for Base Rate Loans      for Eurodollar
                   Borrowers'           Applicable Margin for       on and before      Loans on and before
Pricing Level     Debt Rating             Commitment Fees           Maturity Date         Maturity Date
----------------------------------------------------------------------------------------------------------
<S>               <C>                   <C>                      <C>                   <C>
      I           > or = A-/A3                .100%                      0%                   .875%
----------------------------------------------------------------------------------------------------------
      II          BBB+/Baa1                   .125%                      0%                  1.000%
----------------------------------------------------------------------------------------------------------
      III         BBB/Baa2                    .150%                    .25%                   1.25%
----------------------------------------------------------------------------------------------------------
      IV          BBB-/Baa3                   .200%                   .500%                  1.500%
----------------------------------------------------------------------------------------------------------
      V           < or = BB+/Ba1              .300%                   .750%                  1.750%
----------------------------------------------------------------------------------------------------------
</TABLE>

                  The Applicable Margin for Base Rate Loans or Eurodollar Loans
         subsequent to the Maturity Date is the otherwise applicable rate per
         annum in the table above plus 1.25% per annum.

                  Notwithstanding the above, if at any time there is a split in
         Debt Ratings between S&P and Moody's, the lower Debt Rating (i.e. the
         higher pricing) will apply.

                  The Applicable Margin for Eurodollar Loans and the Commitment
         Fees shall, in each case, be determined and adjusted on the date (each
         a "Calculation Date") on which there is a change in the Borrowers' Debt
         Rating. Each determination of the Applicable Margin shall be effective
         from one Calculation Date until the next Calculation Date. Any
         adjustment in the Applicable Margin shall be applicable to all existing
         Eurodollar Loans and Letters of Credit as well as any new Eurodollar
         Loans made or Letters of Credit issued.

                  The Borrowers shall promptly deliver to the Agent, at the
         address set forth on Schedule 11.1 and at the Agency Services Address,
         information regarding any change in the Borrowers' Debt Rating that
         would change the existing Pricing Level pursuant to the preceding
         paragraph.

                  "Approved Officer" means the president, a vice president, the
         treasurer or the assistant treasurer of the Borrowers or such other
         representative of the Borrowers as may be designated by any one of the
         foregoing with consent of the Agent.

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

                  "Base Rate" means, for any day, the rate per annum equal to
         the greater of (a) the Federal Funds Rate in effect on such day plus
         1/2 of 1% or (b) the Prime Rate in effect on such day. Any change in
         the Base Rate due to a change in the Prime Rate or the Federal

                                       2

<PAGE>

         Funds Rate shall be effective on the  effective  date of such change in
         the Prime Rate or the Federal Funds Rate, respectively.

                  "Base Rate Loan" means a Loan which bears interest based on
         the Base Rate.

                  "Borrowers" means, subject to Section 2.10, Duke Energy Field
         Services, LLC, a Delaware limited liability company, and Duke Energy
         Field Services Corporation, a Delaware corporation, and "Borrower"
         means either of them.

                  "Borrowers Obligations" means, without duplication, all of the
         obligations of the Borrowers to the Lenders and the Agent, whenever
         arising, under this Credit Agreement, the Notes, the LOC Documents or
         any of the other Credit Documents.

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

                  "Businesses" has the meaning set forth in Section 6.12.

                  "Capital Stock" means (a) in the case of a corporation, all
         classes of capital stock of such corporation, (b) in the case of a
         partnership, partnership interests (whether general or limited), (c) in
         the case of a limited liability company, membership interests and (d)
         any other interest or participation that confers on a Person the right
         to receive a share of the profits and losses of, or distributions of
         assets of, the issuing Person.

                  "Change of Control" means that, as of any date, any "person"
         or "group" (within the meaning of section 13(d) or 14(d) of the
         Exchange Act) other than Duke Energy Corporation or ConocoPhillips, or
         their respective Subsidiaries, has become, directly or indirectly, the
         "beneficial owner" (as defined in Rules 13d-3 and 13d-5 of the Exchange
         Act), by way of merger, consolidation or otherwise, of 30% or more of
         the Voting Stock of a Borrower on a fully-diluted basis, after giving
         effect to the conversion and exercise of all outstanding warrants,
         options and other securities of a Borrower convertible into or
         exercisable for Voting Stock of a Borrower (whether or not such
         securities are then currently convertible or exercisable).

                  "Closing Date" means the date hereof.

                  "Code" means the Internal Revenue Code of 1986, as amended
         from time to time.

                  "Commitment" means the commitment of each Lender with respect
         to the Revolving Committed Amount and "Commitments" means,
         collectively, all such commitments of the Lenders.

                  "Commitment Fees" has the meaning specified in Section 3.4(a).

                                       3

<PAGE>

                  "Commitment Percentage" means, for each Lender, the percentage
         identified as its Commitment Percentage opposite such Lender's name on
         Schedule 1.1, as such percentage may be modified by assignment or
         increase in commitments in accordance with the terms of this Credit
         Agreement.

                  "Consolidated Capitalization" means, without duplication, the
         sum of (a) all of the shareholders' equity or net worth of the
         Borrowers and their Subsidiaries on a consolidated basis in accordance
         with GAAP (including preferred stock and preferred member interests,
         but excluding, if applicable, equity or net worth of TEPPCO Partners,
         L.P.) plus (b) the aggregate outstanding amount of all Equity Preferred
         Securities plus (c) Consolidated Indebtedness.

                  "Consolidated EBITDA" means, for any period, an amount equal
         to Consolidated Net Income for such period plus, to the extent deducted
         in determining Consolidated Net Income for such period, the aggregate
         amount of (i) taxes based on or measured by income, (ii) Interest
         Expense, (iii) depreciation and amortization expense, (iv) non-cash
         losses resulting from asset or goodwill impairment, (v) non-cash losses
         resulting from asset sales and (vi) the Adjustment Amount. The
         "Adjustment Amount" shall be an amount equal to (a) for the period of
         four consecutive fiscal quarters ending March 31, 2003, $60,000,000,
         (b) for the period of four consecutive fiscal quarters ending June 30,
         2003, $23,000,000, (c) for the period of four consecutive fiscal
         quarters ending September 20, 2003, $10,000,000 and (d) for any period
         of four consecutive fiscal quarters ending on any date on or after
         December 31, 2003, $0.

                  "Consolidated Indebtedness" means, without duplication, all
         Indebtedness of the Borrowers and their Subsidiaries on a consolidated
         basis, other than (a) the aggregate amount of uncollected accounts
         receivable of such Person subject at such time to a sale of receivables
         (or similar transaction) which is not set forth on the balance sheet of
         the Borrowers or their Subsidiaries, to the extent less than 25% of the
         total Indebtedness of the Borrowers and their Subsidiaries, (b)
         Indebtedness, if applicable, of TEPPCO Partners, L.P. and (c) the
         aggregate outstanding amount of all Equity Preferred Securities.

                  "Consolidated Interest Coverage Ratio" means the ratio of (i)
         Consolidated EBITDA for each period of four consecutive fiscal
         quarters, commencing with the four quarters ending March 31, 2003, to
         (ii) Interest Expense for such period.

                  "Consolidated Net Income" means, for any period, the net
         income of the Borrowers and their Subsidiaries for such period
         determined on a consolidated basis in accordance with GAAP; provided
         that Consolidated Net Income shall not include (i) extraordinary gains
         or extraordinary losses and (ii) the cumulative effect of a change in
         accounting principles, all as reported in the Borrowers' consolidated
         statement(s) of income for the relevant period(s) prepared in
         accordance with GAAP.

                  "Corporate Conversion" means (a) the conversion of Duke Energy
         Field Services, LLC from a limited liability company to a "C"
         corporation or (b) the merger of Duke Energy Field Services LLC with
         and into Duke Energy Field Services Corporation.

                                       4

<PAGE>

                  "Credit Documents" means this Credit Agreement, the Notes, the
         LOC Documents, any Notice of Borrowing, any Notice of
         Continuation/Conversion and all other related agreements and documents
         issued or delivered hereunder or thereunder or pursuant hereto or
         thereto.

                  "Credit Exposure" means, as applied to each Lender (a) at any
         time prior to the termination of the Commitments, the Commitment
         Percentage of such Lender multiplied by the Revolving Committed Amount
         and (b) at any time after the termination of the Commitments, the sum
         of (i) the principal balance of the outstanding Loans of such Lender
         plus (ii) such Lender's Participation Interest in the face amount of
         outstanding Letters of Credit.

                  "Debt Rating" means the long-term senior unsecured, non-credit
         enhanced debt rating of the Borrowers by S&P and Moody's.

                  "Debt to Capitalization Ratio" means, the ratio of (a)
         Consolidated Indebtedness to (b) Consolidated Capitalization.

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

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

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

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

                  "Eligible Assignee" means (a) a Lender and (b) any other
         Person approved by the Borrowers and the Agent (such approvals not to
         be unreasonably withheld or delayed); provided that (A) the Borrowers'
         consent is not required during the existence and continuation of an
         Event of Default and (B) neither a Borrower nor an Affiliate of a
         Borrower shall qualify as an Eligible Assignee.

                  "Equity Preferred Securities" means any securities, however
         denominated, (i) issued by the Borrowers or their Subsidiaries, (ii)
         that are not subject to mandatory redemption or the underlying
         securities, if any, of which are not subject to mandatory redemption,
         (iii) that are perpetual or that mature no earlier than 20 years from
         the date of issuance and no earlier than one year from the Maturity
         Date, (iv) the indebtedness issued in connection with which, including
         any guaranty, is subordinated in right of payment to the unsecured and
         unsubordinated indebtedness of the issuer of such indebtedness or
         guaranty and (v) the

                                       5

<PAGE>

         terms of which permit the deferral of interest or distributions thereon
         to a date occurring after the first anniversary of the Maturity Date.

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

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

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

                  "Eurodollar Loan" means a Loan bearing interest at the
         Adjusted Eurodollar Rate.

                  "Eurodollar Rate" means with respect to any Eurodollar Loan,
         for the Interest Period applicable thereto, a rate per annum equal to
         the London Interbank Offered Rate.

                  "Eurodollar Reserve Percentage" means, for any day, that
         percentage (expressed as a decimal) which is in effect from time to
         time under Regulation D as the maximum reserve requirement (including,
         without limitation, any basic, supplemental, emergency, special, or
         marginal reserves) applicable with respect to Eurocurrency liabilities,
         as that term is defined

                                       6

<PAGE>

         in  Regulation  D (or against any other  category of  liabilities  that
         includes deposits by reference to which the interest rate of Eurodollar
         Loans is determined).

                  "Event of Default" has the meaning specified in Section 9.1.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
         amended, and the rules and regulations promulgated thereunder, as
         amended, modified, succeeded or replaced from time to time.

                  "Existing Credit Facility" means the credit facility evidenced
         by that certain 364-Day Credit Agreement, dated as of March 29, 2002,
         among the Borrowers, the lenders party thereto and Bank of America,
         N.A., as administrative agent and all documents and instruments entered
         into in connection therewith.

                  "Existing Preferred Members' Interest" as reported under GAAP
         in Duke Energy Field Services, LLC's 10-K for the year ended December
         31, 2002.

                  "Extension of Credit" means, as to any Lender, the making of a
         Loan by such Lender (or a participation therein by a Lender) or the
         issuance of, or participation in, a Letter of Credit by such Lender.

                  "Fee Letter" means that certain letter agreement, dated as of
         March 3, 2003, between the Agent and the Borrowers, as amended,
         modified, supplemented or replaced from time to time.

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

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

                  "Government Acts" has the meaning specified in Section 2.2(k).

                  "Governmental Authority" means any Federal, state, local or
         foreign court, monetary authority or governmental agency, authority,
         instrumentality or regulatory body.

                  "Indebtedness" of any Person means, without duplication, (a)
         all obligations of such Person for borrowed money, (b) all obligations
         of such Person for the deferred purchase price of property or services
         purchased, (c) all obligations of such Person created or arising under
         any conditional sale or other title retention agreement with respect to
         the property

                                       7

<PAGE>

         acquired,  (d) all  obligations of such Person under lease  obligations
         which shall have been, or should be, in accordance with GAAP,  recorded
         as capital  leases in respect of which such Person is liable as lessee,
         (e) the face amount of all letter of credit  indebtedness  available to
         be  drawn  (other  than  letter  of  credit  obligations   relating  to
         indebtedness  included in  Indebtedness  pursuant to another  clause of
         this definition) and, without  duplication,  the unreimbursed amount of
         all  drafts  drawn  thereunder,  (f)  obligations  secured by a Lien on
         property or assets of such  Person,  whether or not assumed (but in any
         event not  exceeding  the fair market  value of the property or asset),
         (g) all guarantees of  Indebtedness  referred to in clauses (a) through
         (f) above,  (h) all amounts  payable by such Person in connection  with
         mandatory  redemptions  or  repurchases  of  preferred  stock,  (i) any
         obligations  of such Person (in the nature of principal or interest) in
         respect of acceptances or similar obligations issued or created for the
         account of such Person and (j) all Off Balance  Sheet  Indebtedness  of
         such Person.

                  "Interest Expense" means interest expense as would appear on a
         consolidated statement of income of the Borrowers and their
         Subsidiaries prepared in accordance with GAAP.

                  "Interest Payment Date" means (a) as to Base Rate Loans, the
         first day of each fiscal quarter of the Borrowers, the Maturity Date
         and the Term Out Maturity Date, if applicable, and (b) as to Eurodollar
         Loans, the last day of each applicable Interest Period, the Maturity
         Date and the Term Out Maturity Date, if applicable, and, in addition,
         where the applicable Interest Period for a Eurodollar Loan is greater
         than three months, then also on the last day of each three-month period
         during such Interest Period. If an Interest Payment Date falls on a
         date which is not a Business Day, such Interest Payment Date shall be
         deemed to be the next succeeding Business Day, except that in the case
         of Eurodollar Loans where the next succeeding Business Day falls in the
         next succeeding calendar month, then on the next preceding Business
         Day.

                  "Interest Period" means, with respect to Eurodollar Loans, a
         period of one, two, three or six months' duration, as the Borrowers may
         elect, commencing, in each case, on the date of the borrowing
         (including continuations and conversions of Eurodollar Loans);
         provided, however, (a) if any Interest Period would end on a day which
         is not a Business Day, such Interest Period shall be extended to the
         next succeeding Business Day (except that where the next succeeding
         Business Day falls in the next succeeding calendar month, then on the
         next preceding Business Day), (b) no Interest Period shall extend
         beyond the Maturity Date (or, if the Borrowers choose to term out the
         then existing Loans pursuant to Section 3.3(b), the Term Out Maturity
         Date) and (c) where an Interest Period begins on a day for which there
         is no numerically corresponding day in the calendar month in which the
         Interest Period is to end, such Interest Period shall end on the last
         Business Day of such calendar month.

                  "Issuing Lender" means JPMorgan Chase Bank.

                  "Issuing Lender Fees" has the meaning set forth in Section
        3.4(c)(ii).

                                       8

<PAGE>

                  "Letter of Credit" means a Letter of Credit issued for the
         account of the Borrowers or one of their Subsidiaries by the Issuing
         Lender pursuant to Section 2.2, as such Letter of Credit may be
         amended, modified, extended, renewed or replaced.

                  "Letter of Credit Fees" shall have the meaning assigned to
         such term in Section 3.4(c)(i).

                  "Lender" means any Person identified as a Lender on the
         signature pages hereto and any Eligible Assignee which may become a
         Lender by way of assignment in accordance with the terms hereof, and
         any financial institution which becomes a Lender pursuant to Section
         2.11, together with their successors or permitted assigns.

                  "Lien" means any mortgage, pledge, hypothecation, assignment,
         deposit arrangement, security interest, encumbrance, lien (statutory or
         otherwise), preference, priority or charge of any kind (including any
         agreement to give any of the foregoing, any conditional sale or other
         title retention agreement, any financing or similar statement or notice
         filed under the Uniform Commercial Code as adopted and in effect in the
         relevant jurisdiction or other similar recording or notice statute, and
         any lease in the nature thereof).

                  "Loans" means the loans made by the Lenders to the Borrowers
         pursuant to Section 2.1 (or extended pursuant to Section 3.3(b)).

                  "LOC  Committed  Amount"  means ONE  HUNDRED  MILLION  DOLLARS
         ($100,000,000).

                  "LOC Documents" means, with respect to any Letter of Credit,
         such Letter of Credit, any amendments thereto, any documents delivered
         in connection therewith, any application therefor, and any agreements,
         instruments, guarantees or other documents (whether general in
         application or applicable only to such Letter of Credit) governing or
         providing for (a) the rights and obligations of the parties concerned
         or at risk or (b) any collateral security for such obligations.

                  "LOC Obligations" means, at any time, the sum of (a) the
         maximum amount which is then available to be drawn under Letters of
         Credit then outstanding, assuming compliance with all requirements for
         drawings referred to in such Letters of Credit plus (b) the aggregate
         amount of all drawings under Letters of Credit honored by the Issuing
         Lender but not theretofore reimbursed.

                  "London Interbank Offered Rate" means, with respect to any
         Eurodollar Loan for the Interest Period applicable thereto, the rate of
         interest per annum appearing on Telerate Page 3750 (or any successor
         page) as the London interbank offered rate for deposits in Dollars at
         approximately 11:00 A.M. (London time) two Business Days prior to the
         first day of such Interest Period for a term comparable to such
         Interest Period; provided, however, if more than one rate is specified
         on Telerate Page 3750, the applicable rate shall be the arithmetic mean
         of all such rates. If, for any reason, such rate is not available, the
         term "London Interbank Offered Rate" shall mean, with respect to any
         Eurodollar Loan for the Interest Period applicable thereto, the rate of
         interest per annum appearing on such other

                                       9
<PAGE>

         service as may be nominated by the British Bankers'  Association as the
         London interbank  offered rate for deposits in Dollars at approximately
         11:00 A.M.  (London  time) two Business  Days prior to the first day of
         such Interest  Period for a term  comparable  to such Interest  Period;
         provided,  however, if more than one rate is specified,  the applicable
         rate shall be the arithmetic mean of all such rates.

                  "Mandatory  Borrowing"  has the meaning  specified  in Section
         2.2(e).

                  "Material Adverse Effect" means a material adverse effect on
         the business, financial positions or results of operations of the
         Borrowers and their Subsidiaries taken as a whole.

                  "Material Subsidiary" means any Subsidiary of the Borrowers
         that, together with its Subsidiaries, owns in excess of 10% of the
         consolidated assets of the Borrowers and their Subsidiaries.

                  "Maturity Date" means March 26, 2004.

                  "Merger" means the following transaction: (a) the merger of
         Phillips Gas Company Shareholder, Inc., a Subsidiary of ConocoPhillips
         and the parent of Phillips Gas Company, with and into Duke Energy Field
         Services Corporation and (b) the subsequent merger of Phillips Gas
         Company with and into Duke Energy Field Services Corporation.

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

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

                  "Non-Excluded  Taxes"  has the  meaning  specified  in Section
         4.4(a).

                  "Notes" means the promissory notes of the Borrowers in favor
         of each of the Lenders evidencing the Loans provided pursuant to
         Section 2.1, individually or collectively, as appropriate, as such
         notes may be amended or modified from time to time and substantially in
         the form of Exhibit 2.8.

                  "Notice of  Borrowing"  means a request by the Borrowers for a
         Loan in the form of Exhibit 2.3.

                  "Notice of Continuation/Conversion" means a request by the
         Borrowers for the continuation or conversion of a Loan in the form of
         Exhibit 2.5.

                  "Off Balance Sheet Indebtedness" means any obligation of a
         Person that would be considered indebtedness for tax purposes but is
         not set forth on the balance sheet of such Person, including, but not
         limited to, (a) any synthetic lease, tax retention operating lease, off
         balance sheet loan or similar off-balance sheet financing product of
         such Person, (b) the aggregate amount of uncollected accounts
         receivables of such Person subject at such time to

                                       10

<PAGE>

         a sale of receivables (or similar  transaction)  and (c) obligations of
         any partnership or joint venture that is recourse to such Person.

                  "Participation Interest" means the Extension of Credit by a
         Lender by way of a purchase of a participation in Letters of Credit or
         LOC Obligations as provided in Section 2.2 or in any Loans as provided
         in Section 3.8.

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

                  "Permitted Refinancings" means the refinancing of the Existing
         Preferred Members' Interests with (i) Equity Preferred Securities of
         Duke Energy Field Services, LLC having a coupon not greater than the
         coupon applicable to the Existing Preferred Members' Interest or (ii)
         common stock of Duke Energy Field Services, LLC.

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

                  "Plan" means any employee pension benefit plan (as defined in
         Section 3(2) of ERISA) which is covered by ERISA and with respect to
         which a Borrower or any ERISA Affiliate is (or, if such plan were
         terminated at such time, would under Section 4069 of ERISA be deemed to
         be) an "employer" within the meaning of Section 3(5) of ERISA.

                  "Prime Rate" means the per annum rate of interest established
         from time to time by the Agent at its principal office in New York
         City, New York as its Prime Rate. Any change in the interest rate
         resulting from a change in the Prime Rate shall become effective as of
         12:01 a.m. of the Business Day on which each change in the Prime Rate
         is announced by the Agent. The Prime Rate is a reference rate used by
         the Agent in determining interest rates on certain loans and is not
         intended to be the lowest rate of interest charged on any extension of
         credit to any debtor.

                  "Properties" has the meaning set forth in Section 6.12.

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

                  "Regulation A, D, T, U, or X" means Regulation A, D, T, U or
         X, respectively, of the Board of Governors of the Federal Reserve
         System as from time to time in effect and any successor to all or a
         portion thereof.

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

                  "Required Lenders" means Lenders whose aggregate Credit
         Exposure (as hereinafter defined) constitutes more than 50% of the
         aggregate Credit Exposure of all Lenders at such time; provided,
         however, that if any Lender shall be a Defaulting Lender at

                                       11
<PAGE>

         such  time then  there  shall be  excluded  from the  determination  of
         Required  Lenders the aggregate  principal amount of Credit Exposure of
         such Lender at such time.

                  "Responsible  Officer"  means the president,  chief  financial
         officer or treasurer of either Borrower.

                  "Restricted Payment" means, with respect to either Borrower,
         any dividend or distribution of cash, property or assets in respect of
         its Capital Stock, or any purchase, redemption, retirement or other
         acquisition for value of any shares of its Capital Stock.

                  "Revolving Committed Amount" means three HUNDRED AND FIFTY
         MILLION Dollars ($350,000,000) as such amount may be reduced in
         accordance with Section 2.7 or increased in accordance with Section
         2.11.

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

                  "Solvent" means, with respect to any Person as of a particular
         date, that on such date (a) such Person is able to pay its debts and
         other liabilities, contingent obligations and other commitments as they
         mature in the normal course of business, (b) such Person does not
         intend to, and does not believe that it will, incur debts or
         liabilities beyond such Person's ability to pay as such debts and
         liabilities mature in their ordinary course, (c) such Person is not
         engaged in a business or a transaction, and is not about to engage in a
         business or a transaction, for which such Person's assets would
         constitute unreasonably small capital after giving due consideration to
         the prevailing practice in the industry in which such Person is engaged
         or is to engage, (d) the fair value of the assets of such Person is
         greater than the total amount of liabilities, including, without
         limitation, contingent liabilities, of such Person and (e) the present
         fair saleable value of the assets of such Person is not less than the
         amount that will be required to pay the probable liability of such
         Person on its debts as they become absolute and matured. In computing
         the amount of contingent liabilities at any time, it is intended that
         such liabilities will be computed as the amount which, 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.

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

                  "Termination Event" means (a) with respect to any Single
         Employer Plan, the occurrence of a Reportable Event or the substantial
         cessation of operations (within the meaning of Section 4062(e) of
         ERISA), (b) the withdrawal of a Borrower or any ERISA

                                       12

<PAGE>

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

                  "Term Out Maturity  Date" has the meaning set forth in Section
         3.3(b).

                  "Unused Commitment" means, for any period from the Closing
         Date to the Maturity Date, the amount by which (a) the Revolving
         Committed Amount exceeds (b) the daily average sum for such period of
         the outstanding principal amount of all Loans plus the aggregate amount
         of outstanding LOC Obligations.

                  "Voting Stock" means all classes of the Capital Stock (or
         other voting interests) of such Person then outstanding and normally
         entitled to vote in the election of directors or other governing body
         of such Person.

         1.2      COMPUTATION OF TIME PERIODS.

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

         1.3      ACCOUNTING TERMS.

         Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis.

         1.4      TIME.

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

                                       13

<PAGE>

                                   SECTION 2.

                                      LOANS

         2.1      REVOLVING COMMITTED AMOUNT.

         Subject to the terms and conditions set forth herein, each Lender
severally agrees to make revolving loans to the Borrowers in Dollars, at any
time and from time to time, during the period from the Effective Date to the
Maturity Date (each a "Loan" and collectively the "Loans"); provided, however,
that (a) the sum of the aggregate amount of Loans outstanding plus the aggregate
amount of LOC Obligations outstanding shall not exceed the Revolving Committed
Amount and (b) with respect to each individual Lender, such Lender's pro rata
share of outstanding Loans plus such Lender's pro rata share of outstanding LOC
Obligations shall not exceed such Lender's Commitment Percentage of the
Revolving Committed Amount. Subject to the terms of this Credit Agreement, the
Borrowers may borrow, repay and reborrow Loans.

         2.2      LETTER OF CREDIT SUBFACILITY.

                  (a)      Issuance. Subject to the terms and conditions hereof
         and of the LOC Documents, if any, and any other terms and conditions
         which the Issuing Lender may reasonably require (so long as such terms
         and conditions do not impose any financial obligation on or require any
         Lien (not otherwise contemplated by this Credit Agreement) to be given
         by a Borrower or conflict with any obligation of, or detract from any
         action which may be taken by the Borrowers or their Subsidiaries under
         this Credit Agreement), the Issuing Lender shall from time to time upon
         request issue, in Dollars, and the Lenders shall participate in,
         letters of credit (the "Letters of Credit") for the account of a
         Borrower or any of its Subsidiaries, from the Effective Date until the
         Maturity Date, in a form reasonably acceptable to the Issuing Lender;
         provided, however, that (i) the aggregate amount of LOC Obligations
         shall not at any time exceed the LOC Committed Amount, (ii) the sum of
         the aggregate amount of LOC Obligations outstanding plus Loans
         outstanding shall not exceed the Revolving Committed Amount and (iii)
         with respect to each individual Lender, the Lender's pro rata share of
         outstanding Loans plus its pro rata share of outstanding LOC
         Obligations shall not exceed such Lender's Commitment Percentage of the
         Revolving Committed Amount. The issuance and expiry date of each Letter
         of Credit shall be a Business Day. Except as otherwise expressly agreed
         upon by all the Lenders, no Letter of Credit shall have an expiry date
         extending beyond the Maturity Date. Each Letter of Credit shall be
         either (x) a standby letter of credit issued to support the obligations
         (including pension or insurance obligations), contingent or otherwise,
         of a Borrower, or (y) a commercial letter of credit in respect of the
         purchase of goods or services by a Borrower in the ordinary course of
         business. Each Letter of Credit shall comply with the related LOC
         Documents.

                  (b)      Notice and Reports. The request for the issuance of a
         Letter of Credit shall be submitted to the Issuing Lender at least two
         Business Days prior to the requested date of issuance. The Issuing
         Lender will, at least quarterly and more frequently upon request,

                                       14

<PAGE>

         provide to the Lenders a detailed report specifying the Letters of
         Credit which are then issued and outstanding and any activity with
         respect thereto which may have occurred since the date of the prior
         report, and including therein, among other things, the account party,
         the beneficiary, the face amount, and the expiry date as well as any
         payments or expirations which may have occurred. The Issuing Lender
         will further provide to the Agent, promptly upon request, copies of the
         Letters of Credit.

                  (c)      Participations.

                           (i)      Each Lender, upon issuance of a Letter of
                  Credit, shall be deemed to have purchased without recourse a
                  risk participation from the Issuing Lender in such Letter of
                  Credit and the obligations arising thereunder and any
                  collateral relating thereto, in each case in an amount equal
                  to its Commitment Percentage of the obligations under such
                  Letter of Credit, and shall absolutely, unconditionally and
                  irrevocably assume, as primary obligor and not as surety, and
                  be obligated to pay to the Issuing Lender therefor and
                  discharge when due, its Commitment Percentage of the
                  obligations arising under such Letter of Credit. Without
                  limiting the scope and nature of each Lender's participation
                  in any Letter of Credit, to the extent that the Issuing Lender
                  has not been reimbursed as required hereunder or under any
                  such Letter of Credit, each such Lender shall pay to the
                  Issuing Lender its Commitment Percentage of such unreimbursed
                  drawing in same day funds on the day of notification by the
                  Issuing Lender of an unreimbursed drawing pursuant to the
                  provisions of subsection (d) hereof. The obligation of each
                  Lender to so reimburse the Issuing Lender shall be absolute
                  and unconditional and shall not be affected by the occurrence
                  of a Default, an Event of Default or any other occurrence or
                  event. Any such reimbursement shall not relieve or otherwise
                  impair the obligation of the Borrowers to reimburse the
                  Issuing Lender under any Letter of Credit, together with
                  interest as hereinafter provided.

                  (d)      Reimbursement. In the event of any request for a
         drawing or any drawing under any Letter of Credit, the Issuing Lender
         will promptly notify the Borrowers. Unless a Borrower shall immediately
         notify the Issuing Lender of its intent to otherwise reimburse the
         Issuing Lender, the Borrowers shall be deemed to have requested a Loan
         at the Base Rate in the amount of the drawing as provided in subsection
         (e) hereof, the proceeds of which will be used to satisfy the
         reimbursement obligations. The Borrowers shall reimburse the Issuing
         Lender on the day of drawing under any Letter of Credit either with the
         proceeds of a Loan obtained hereunder or otherwise in same day funds as
         provided herein or in the LOC Documents. If the Borrowers shall fail to
         reimburse the Issuing Lender as provided hereinabove, the unreimbursed
         amount of such drawing shall bear interest at a per annum rate equal to
         the Base Rate plus two percent (2%). The Borrowers' reimbursement
         obligations hereunder shall be absolute and unconditional under all
         circumstances irrespective of (but without waiver of) any rights of
         set-off, counterclaim or defense to payment that the applicable account
         party or the Borrowers may claim or have against the Issuing Lender,
         the Agent, the Lenders, the beneficiary of the Letter of Credit drawn
         upon or any other Person, including without limitation, any defense
         based on any failure of the

                                       15

<PAGE>

         applicable account party or the Borrowers to receive consideration or
         the legality, validity, regularity or unenforceability of the Letter of
         Credit. The Issuing Lender will promptly notify the Lenders of the
         amount of any unreimbursed drawing and each Lender shall promptly pay
         to the Agent for the account of the Issuing Lender, in Dollars and in
         immediately available funds, the amount of such Lender's Commitment
         Percentage of such unreimbursed drawing. Such payment shall be made on
         the day such notice is received by such Lender from the Issuing Lender
         if such notice is received at or before 2:00 p.m., otherwise such
         payment shall be made at or before 12:00 Noon on the Business Day next
         succeeding the day such notice is received. If such Lender does not pay
         such amount to the Issuing Lender in full upon such request, such
         Lender shall, on demand, pay to the Agent for the account of the
         Issuing Lender interest on the unpaid amount during the period from the
         date the Lender received the notice regarding the unreimbursed drawing
         until such Lender pays such amount to the Issuing Lender in full at a
         rate per annum equal to, if paid within two Business Days of the date
         of drawing, the Federal Funds Rate and thereafter at a rate equal to
         the Base Rate. Each Lender's obligation to make such payment to the
         Issuing Lender, and the right of the Issuing Lender to receive the
         same, shall be absolute and unconditional, shall not be affected by any
         circumstance whatsoever and without regard to the termination of this
         Credit Agreement or the Commitments hereunder, the existence of a
         Default or Event of Default or the acceleration of the obligations
         hereunder and shall be made without any offset, abatement, withholding
         or reduction whatsoever. Simultaneously with the making of each such
         payment by a Lender to the Issuing Lender, such Lender shall,
         automatically and without any further action on the part of the Issuing
         Lender or such Lender, acquire a participation in an amount equal to
         such payment (excluding the portion of such payment constituting
         interest owing to the Issuing Lender) in the related unreimbursed
         drawing portion of the LOC Obligation and in the interest thereon and
         in the related LOC Documents, and shall have a claim against the
         Borrowers with respect thereto.

                  (e)      Repayment with Loans. On any day on which a Borrower
         shall have requested, or been deemed to have requested, a Loan
         borrowing to reimburse a drawing under a Letter of Credit, the Agent
         shall give notice to the applicable Lenders that a Loan has been
         requested or deemed requested in connection with a drawing under a
         Letter of Credit, in which case a Loan borrowing comprised solely of
         Base Rate Loans (each such borrowing, a "Mandatory Borrowing") shall be
         immediately made from all applicable Lenders (without giving effect to
         any termination of the Commitments pursuant to Section 9.2 or
         otherwise) pro rata based on each Lender's respective Commitment
         Percentage and the proceeds thereof shall be paid directly to the
         Issuing Lender for application to the respective LOC Obligations. Each
         such Lender hereby irrevocably agrees to make such Loans immediately
         upon any such request or deemed request on account of each such
         Mandatory Borrowing in the amount and in the manner specified in the
         preceding sentence and on the same such date notwithstanding (i) the
         amount of Mandatory Borrowing may not comply with the minimum amount
         for borrowings of Loans otherwise required hereunder, (ii) whether any
         conditions specified in Section 5.2 are then satisfied, (iii) whether a
         Default or Event of Default then exists, (iv) failure of any such
         request or deemed request for Loans to be made by the time otherwise
         required hereunder, (v) the date of such Mandatory Borrowing, or (vi)
         any reduction in the Revolving Committed Amount or any termination of
         the Commitments. In the event that any Mandatory Borrowing cannot for
         any reason be

                                       16

<PAGE>

         made on the date otherwise required above (including, without
         limitation, as a result of the commencement of a proceeding under the
         Bankruptcy Code with respect to a Borrower), then each such Lender
         hereby agrees that it shall forthwith fund (as of the date the
         Mandatory Borrowing would otherwise have occurred, but adjusted for any
         payments received from the Borrowers on or after such date and prior to
         such purchase) its Participation Interest in the outstanding LOC
         Obligations; provided that in the event any Lender shall fail to fund
         its Participation Interest on the day the Mandatory Borrowing would
         otherwise have occurred, then the amount of such Lender's unfunded
         Participation Interest therein shall bear interest payable to the
         Issuing Lender upon demand, at the rate equal to, if paid within two
         Business Days of such date, the Federal Funds Rate, and thereafter at a
         rate equal to the Base Rate.

                  (f)      Designation of Subsidiaries as Account Parties.
         Notwithstanding anything to the contrary set forth in this Credit
         Agreement, a Letter of Credit issued hereunder may contain a statement
         to the effect that such Letter of Credit is issued for the account of a
         Subsidiary of the Borrowers; provided that notwithstanding such
         statement, the Borrowers shall be the actual account party for all
         purposes of this Credit Agreement for such Letter of Credit and such
         statement shall not affect the Borrowers' reimbursement obligations
         hereunder with respect to such Letter of Credit.

                  (g)      Modification and Extension. The issuance of any
         supplement, modification, amendment, renewal, or extension to any
         Letter of Credit shall, for purposes hereof, be treated in all respects
         the same as the issuance of a new Letter of Credit hereunder.

                  (h)      Uniform Customs and Practices. The Issuing Lender may
         have the Letters of Credit be subject to The Uniform Customs and
         Practice for Documentary Credits (the "UCP") or the International
         Standby Practices 1998 (the "ISP98"), in either case as published as of
         the date of issue by the International Chamber of Commerce, in which
         case the UCP or ISP98, as applicable, may be incorporated therein and
         deemed in all respects to be a part thereof.

                  (i)      Responsibility of Issuing Lender. It is expressly
         understood and agreed that the obligations of the Issuing Lender
         hereunder to the Lenders are only those expressly set forth in this
         Credit Agreement and that the Issuing Lender shall be entitled to
         assume that the conditions precedent set forth in Section 5.2 have been
         satisfied unless it shall have acquired actual knowledge that any such
         condition precedent has not been satisfied; provided, however, that
         nothing set forth in this Section 2.2 shall be deemed to prejudice the
         right of any Lender to recover from the Issuing Lender any amounts made
         available by such Lender to the Issuing Lender pursuant to this Section
         2.2 in the event that it is determined by a court of competent
         jurisdiction that the payment with respect to a Letter of Credit
         constituted gross negligence or willful misconduct on the part of the
         Issuing Lender.

                  (j)      Conflict with LOC Documents. In the event of any
         conflict between this Credit Agreement and any LOC Document, this
         Credit Agreement shall govern.

                  (k)      Indemnification of Issuing Lender.

                                       17

<PAGE>

                           (i)      In addition to its other obligations under
                  this Credit Agreement, the Borrowers hereby agree to protect,
                  indemnify, pay and save the Issuing Lender harmless from and
                  against any and all claims, demands, liabilities, damages,
                  losses, costs, charges and expenses (including reasonable
                  attorneys' fees) that the Issuing Lender may incur or be
                  subject to as a consequence, direct or indirect, of (A) the
                  issuance of any Letter of Credit or (B) the failure of the
                  Issuing Lender to honor a drawing under a Letter of Credit as
                  a result of any act or omission, whether rightful or wrongful,
                  of any present or future de jure or de facto government or
                  Governmental Authority (all such acts or omissions, herein
                  called "Government Acts").

                           (ii)     As between the Borrowers and the Issuing
                  Lender, the Borrowers shall assume all risks of the acts,
                  omissions or misuse of any Letter of Credit by the beneficiary
                  thereof. The Issuing Lender shall not be responsible for: (A)
                  the form, validity, sufficiency, accuracy, genuineness or
                  legal effect of any document submitted by any party in
                  connection with the application for and issuance of any Letter
                  of Credit, even if it should in fact prove to be in any or all
                  respects invalid, insufficient, inaccurate, fraudulent or
                  forged; (B) the validity or sufficiency of any instrument
                  transferring or assigning or purporting to transfer or assign
                  any Letter of Credit or the rights or benefits thereunder or
                  proceeds thereof, in whole or in part, that may prove to be
                  invalid or ineffective for any reason; (C) failure of the
                  beneficiary of a Letter of Credit to comply fully with
                  conditions required in order to draw upon a Letter of Credit;
                  (D) errors, omissions, interruptions or delays in transmission
                  or delivery of any messages, by mail, cable, telegraph, telex
                  or otherwise, whether or not they be in cipher; (E) errors in
                  interpretation of technical terms; (F) any loss or delay in
                  the transmission or otherwise of any document required in
                  order to make a drawing under a Letter of Credit or of the
                  proceeds thereof; and (G) any consequences arising from causes
                  beyond the control of the Issuing Lender, including, without
                  limitation, any Government Acts. None of the above shall
                  affect, impair, or prevent the vesting of the Issuing Lender's
                  rights or powers hereunder.

                           (iii)    In furtherance and extension and not in
                  limitation of the specific provisions hereinabove set forth,
                  any action taken or omitted by the Issuing Lender, under or in
                  connection with any Letter of Credit or the related
                  certificates, if taken or omitted in good faith, shall not put
                  the Issuing Lender under any resulting liability to the
                  Borrowers. It is the intention of the parties that this Credit
                  Agreement shall be construed and applied to protect and
                  indemnify the Issuing Lender against any and all risks
                  involved in the issuance of the Letters of Credit, all of
                  which risks are hereby assumed by the Borrowers, including,
                  without limitation, any and all risks of the acts or
                  omissions, whether rightful or wrongful, of any present or
                  future Government Acts. The Issuing Lender shall not, in any
                  way, be liable for any failure by the Issuing Lender or anyone
                  else to pay any drawing under any Letter of Credit as a result
                  of any Government Acts or any other cause beyond the control
                  of the Issuing Lender.

                                       18

<PAGE>

                           (iv)     Nothing in this subsection (k) is intended
                  to limit the reimbursement obligation of the Borrowers
                  contained in this Section 2.2. The obligations of the
                  Borrowers under this subsection (k) shall survive the
                  termination of this Credit Agreement. No act or omission of
                  any current or prior beneficiary of a Letter of Credit shall
                  in any way affect or impair the rights of the Issuing Lender
                  to enforce any right, power or benefit under this Credit
                  Agreement.

                           (v)      Notwithstanding anything to the contrary
                  contained in this subsection (k) or any of the Credit
                  Documents, the Borrowers shall have no obligation to indemnify
                  the Issuing Lender in respect of any liability incurred by the
                  Issuing Lender arising solely out of the gross negligence or
                  willful misconduct of the Issuing Lender, as determined by a
                  court of competent jurisdiction. Nothing in this Credit
                  Agreement shall relieve the Issuing Lender of any liability to
                  the Borrowers in respect of any action taken by the Issuing
                  Lender which action constitutes gross negligence or willful
                  misconduct of the Issuing Lender or a violation of the UCP,
                  the ISP98 or Uniform Commercial Code (as applicable), as
                  determined by a court of competent jurisdiction.

         2.3      METHOD OF BORROWING FOR LOANS.

         By no later than 11:00 a.m. (a) on the date of the requested borrowing
of Loans that will be Base Rate Loans or (b) three Business Days prior to the
date of the requested borrowing of Loans that will be Eurodollar Loans, the
Borrowers shall submit a written Notice of Borrowing in the form of Exhibit 2.3
to the Agent setting forth (i) the amount requested, (ii) whether such Loans
shall accrue interest at the Base Rate or the Adjusted Eurodollar Rate, (iii)
with respect to Loans that will be Eurodollar Loans, the Interest Period
applicable thereto and (iv) certification that the Borrowers have complied in
all respects with Section 5.2.

         2.4      FUNDING OF LOANS.

         Upon receipt of a Notice of Borrowing, the Agent shall promptly inform
the Lenders as to the terms thereof. Each such Lender shall make its Commitment
Percentage of the requested Loans available to the Agent by 2:00 p.m. on the
date specified in the Notice of Borrowing by deposit, in Dollars, of immediately
available funds at the Agency Services Address. The amount of the requested
Loans will then be made available to the Borrowers by the Agent by crediting the
account of the Borrowers on the books of such office of the Agent, to the extent
the amount of such Loans are made available to the Agent.

         No Lender shall be responsible for the failure or delay by any other
Lender in its obligation to make Loans hereunder; provided, however, that the
failure of any Lender to fulfill its obligations hereunder shall not relieve any
other Lender of its obligations hereunder. Unless the Agent shall have been
notified by any Lender prior to the date of any such Loan that such Lender does
not intend to make available to the Agent its portion of the Loans to be made on
such date, the Agent may assume that such Lender has made such amount available
to the Agent on the date of such Loans, and the Agent in reliance upon such
assumption, may (in its sole discretion but without any

                                       19

<PAGE>

obligation to do so) make available to the Borrowers a corresponding amount. If
such corresponding amount is not in fact made available to the Agent, the Agent
shall be able to recover such corresponding amount from such Lender. If such
Lender does not pay such corresponding amount forthwith upon the Agent's demand
therefor, the Agent will promptly notify the Borrowers and the Borrowers shall
immediately pay such corresponding amount within two Business Days to the Agent.
The Agent shall also be entitled to recover from the Lender or the Borrowers, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Agent to the
Borrowers to the date such corresponding amount is recovered by the Agent at a
per annum rate equal to (a) from the Borrowers at the applicable rate for such
Loan pursuant to the Notice of Borrowing and (b) from a Lender at the Federal
Funds Rate.

         2.5      CONTINUATIONS AND CONVERSIONS.

         The Borrowers shall have the option (subject to the limitations set
forth below), on any Business Day, to continue existing Eurodollar Loans for a
subsequent Interest Period, to convert Base Rate Loans into Eurodollar Loans or
to convert Eurodollar Loans into Base Rate Loans; provided, however, that (a)
each such continuation or conversion must be requested by the Borrowers pursuant
to a written Notice of Continuation/Conversion, in the form of Exhibit 2.5, in
compliance with the terms set forth below, (b) if a Eurodollar Loan is continued
or converted into a Base Rate Loan on any day other than the last day of the
Interest Period applicable thereto, then the Borrowers shall be subject to the
provisions set forth in Section 4.3, (c) Eurodollar Loans may not be continued
nor may Base Rate Loans be converted into Eurodollar Loans during the existence
and continuation of a Default or Event of Default and (d) any request to extend
a Eurodollar Loan that fails to comply with the terms hereof or any failure to
request an extension of a Eurodollar Loan at the end of an Interest Period shall
constitute a conversion to a Base Rate Loan on the last day of the applicable
Interest Period. Each continuation or conversion must be requested by the
Borrowers no later than 11:00 a.m. (i) on the date for a requested conversion of
a Eurodollar Loan to a Base Rate Loan or (ii) three Business Days prior to the
date for a requested continuation of a Eurodollar Loan or conversion of a Base
Rate Loan to a Eurodollar Loan, in each case pursuant to a written Notice of
Continuation/Conversion submitted to the Agent which shall set forth (A) whether
the Borrowers wish to continue or convert such Loans and (B) if the request is
to continue a Eurodollar Loan or convert a Base Rate Loan to a Eurodollar Loan,
the Interest Period applicable thereto.

         2.6      MINIMUM AMOUNTS.

         Each request for a Loan or a conversion or continuation hereunder shall
be subject to the following requirements: (a) each Eurodollar Loan shall be in a
minimum amount of $10,000,000 (and in integral multiples of $1,000,000 in excess
thereof), (b) each Base Rate Loan shall be in a minimum amount of the lesser of
$10,000,000 (and in integral multiples of $1,000,000 in excess thereof) or the
remaining amount available to be borrowed and (c) no more than ten Eurodollar
Loans shall be outstanding hereunder at any one time. For the purposes of this
Section, all Eurodollar Loans with the same Interest Periods that begin and end
on the same date shall be considered as one Eurodollar Loan, but Eurodollar
Loans with different Interest Periods, even if they begin on the same date,
shall be considered separate Eurodollar Loans.

                                       20

<PAGE>

         2.7      REDUCTIONS OF REVOLVING COMMITTED AMOUNTS.

         Upon at least five Business Days' notice, the Borrowers shall have the
right to permanently terminate or reduce the aggregate unused amount of the
Revolving Committed Amount at any time or from time to time; provided that (a)
each partial reduction shall be in an aggregate amount at least equal to
$10,000,000 and in integral multiples of $1,000,000 above such amount, (b) no
reduction shall be made which would reduce the Revolving Committed Amount to an
amount less than the aggregate amount of the then outstanding Loans plus the
aggregate amount of the then outstanding LOC Obligations. Any reduction in (or
termination of) the Revolving Committed Amount shall be permanent and may not be
reinstated.

         2.8      NOTES.

         The Loans made by the Lenders shall be evidenced by a duly executed
promissory note of the Borrowers payable to each Lender in substantially the
form of Exhibit 2.8 (the "Notes").

         2.9      JOINT AND SEVERAL LIABILITY OF THE BORROWERS.

         Subject to Section 2.10:

                  (a)      Each of the Borrowers is accepting joint and several
         liability hereunder in consideration of the financial accommodation to
         be provided by the Lenders under this Credit Agreement, for the mutual
         benefit, directly and indirectly, of each of the Borrowers and in
         consideration of the undertakings of each of the Borrowers to accept
         joint and several liability for the obligations of each of them.

                  (b)      Each of the Borrowers jointly and severally hereby
         irrevocably and unconditionally accepts, not merely as a surety but
         also as a co-debtor, joint and several liability with the other
         Borrower with respect to the payment and performance of all of the
         obligations arising under this Credit Agreement and the other Credit
         Documents, it being the intention of the parties hereto that all of the
         Borrowers Obligations shall be the joint and several obligations of
         each of the Borrowers without preferences or distinction between them.

                  (c)      If and to the extent that either of the Borrowers
         shall fail to make any payment with respect to any of the obligations
         hereunder as and when due or to perform any of such obligations in
         accordance with the terms thereof, then in each such event, the other
         Borrower will make such payment with respect to, or perform, such
         obligation.

                  (d)      The provisions of this Section 2.9 are made for the
         benefit of the Lenders and their successors and assigns, and may be
         enforced by them from time to time against either of the Borrowers as
         often as occasion therefor may arise and without requirement on the
         part of the Lenders first to marshall any of its claims or to exercise
         any of its rights against the other Borrower or to exhaust any remedies
         available to it against the other Borrower or to resort to any other
         source or means of obtaining payment of any of the Borrowers
         Obligations hereunder or to elect any other remedy. The provisions of
         this Section 2.9 shall remain in effect until all the Borrowers
         Obligations hereunder shall have

                                       21

<PAGE>

         been paid in full or otherwise fully satisfied. If at any time, any
         payment, or any part thereof, made in respect of any of the Borrowers
         Obligations, is rescinded or must otherwise be restored or returned by
         the Lenders upon the insolvency, bankruptcy or reorganization of any of
         the Borrowers, or otherwise, the provisions of this Section 2.9 will
         forthwith be reinstated and in effect as though such payment had not
         been made.

                  (e)      Notwithstanding any provision to the contrary
         contained herein or in any of the other Credit Documents, to the extent
         the obligations of either Borrower shall be adjudicated to be invalid
         or unenforceable for any reason (including, without limitation, because
         of any applicable state or federal law relating to fraudulent
         conveyances or transfers) then the obligations of such Borrower
         hereunder shall be limited to the maximum amount that is permissible
         under applicable law (whether federal or state and including, without
         limitation, the Bankruptcy Code).

                  (f)      Each Borrower hereby appoints the other Borrower to
         act as its agent for all purposes under this Credit Agreement
         (including, without limitation, with respect to all matters relating to
         the borrowing and repayment of Loans) and agrees that (i) a Borrower
         may execute such documents on behalf of the other Borrower as it deems
         appropriate and the other Borrower shall be obligated by all of the
         terms of any such document executed on its behalf, (ii) any notice or
         communication delivered by the Agent or a Lender to a Borrower shall be
         deemed delivered to both Borrowers and (iii) the Agent and the Lenders
         may accept, and be permitted to rely on, any document, instrument or
         agreement executed by one Borrower on behalf of the other Borrower.

         2.10     LIMITATION OF LIABILITY OF BORROWERS. Notwithstanding anything
in this Credit Agreement or in the Notes to the contrary, including without
limitation, Section 2.9:

                  (a)      Duke Energy Field Services Corporation shall have no
         rights or obligations as a Borrower, and will not be subject to the
         terms of the Credit Documents, until (i) consummation of the Merger or
         a Corporate Conversion and (ii) notification from the Borrowers to the
         Lenders that the Merger or a Corporate Conversion has occurred and
         that, going forward, Duke Energy Field Services Corporation will
         irrevocably have all of the rights and obligations of a Borrower,
         jointly and severally with Duke Energy Field Services, LLC, under the
         Credit Documents (including, without limitation, any Loans made prior
         to such notification) and will be subject to the terms of the Credit
         Documents.

                  (b)      If the Merger occurs, the agreement by Duke Energy
         Field Services Corporation to become jointly and severally liable with
         Duke Energy Field Services, LLC for the indebtedness under the Credit
         Documents pursuant to subsection (a) above shall be accomplished in two
         phases: (i) initially, Duke Energy Field Services Corporation shall
         become directly liable for 69.7% of such indebtedness and shall become
         indirectly liable for 30.3% of such indebtedness through Phillips Gas
         Company ("PGC"), a Delaware corporation and, subsequent to the first
         step of the Merger, a wholly-owned Subsidiary of Duke Energy Field
         Services Corporation, in each case jointly and severally with Duke
         Energy Field Services, LLC, which shall remain jointly and severally
         liable for 100% of such indebtedness; and (ii) immediately thereafter,
         upon the merger of PGC with and into

                                       22

<PAGE>

         Duke Energy Field Services Corporation, Duke Energy Field Services
         Corporation shall become directly liable for the 30.3% of such
         indebtedness previously attributed to it through its ownership of PGC.

                  (c)      On or after the date that, pursuant to subsection (a)
         or subsections (a) and (b) above, Duke Energy Field Services
         Corporation has become directly liable for 100% of the indebtedness,
         rights and obligations of a Borrower under the Credit Documents, the
         Borrowers may, upon written notice to the Lenders, release Duke Energy
         Field Services, LLC from its joint and several obligations under the
         Credit Documents; provided that if as a result of a Corporate
         Conversion Duke Energy Field Services LLC is converted into a "C"
         Corporation it shall not be released from its obligations hereunder.
         Thereafter, Duke Energy Field Services, LLC will have no rights or
         obligations under the Credit Documents, will no longer be subject to
         the terms of the Credit Documents (except as the terms thereof may
         relate to it if it constitutes a Material Subsidiary) and all
         obligations owing pursuant to the Credit Documents shall be the sole
         responsibility of Duke Energy Field Services Corporation.

                  (d)      Notwithstanding the use of the term "Borrowers" as
         set forth in the Credit Documents: (i) prior to Duke Energy Field
         Services Corporation having any rights or obligations as a Borrower and
         being subject to the terms of the Credit Agreement, as set forth in
         clause (a) above, the terms "Borrowers" or "a Borrower" as used in the
         Credit Documents shall only mean a reference to Duke Energy Field
         Services, LLC and (ii) on and after the date that Duke Energy Field
         Services, LLC is released from liability, in accordance with clause (c)
         above, the terms "Borrowers" or "a Borrower" as used in the Credit
         Documents shall only mean a reference to Duke Energy Field Services
         Corporation.

         2.11     INCREASES IN REVOLVING COMMITTED AMOUNT

                  (a)      At any time and from time to time, the Borrowers may,
         if they so elect, increase the Revolving Committed Amount (in an
         aggregate amount of not less than $5,000,000), either by designating
         one or more financial institutions not theretofore Lenders to become
         Lenders or by agreeing with one or more of the existing Lenders that
         such Lenders' Commitments shall be increased. Upon execution and
         delivery by the Borrowers and such Lenders or other financial
         institutions of an instrument (a "COMMITMENT ACCEPTANCE") substantially
         in the form of Exhibit J hereto, such existing Lenders shall have
         additional Commitments as therein set forth or such other financial
         institutions shall become Lenders with Commitments as therein set forth
         and with all rights and obligations of Lenders with Commitments as
         therein set forth; provided that no such increase shall be effective
         unless (i) the Agent shall have consented (such consent not to be
         unreasonably withheld or delayed) to the designation of any financial
         institution not theretofore a Lender (it being understood that no
         consent or approval from any other Lender shall be required), (ii) the
         aggregate amount of Commitment increases made pursuant to this Section
         2.11 shall not exceed $25,000,000, (iii) immediately before and after
         giving effect to such increase (x) no Default shall have occurred and
         be continuing and (y) the representations and warranties of the
         Borrowers set forth in Section 6 shall be true and correct in all
         material respects at and as if made as of the effective date of such
         increase in commitments (as set forth in the

                                       23

<PAGE>

         Commitment Acceptance) (the "INCREASE DATE") as applicable (except to
         the extent such representations and warranties expressly and
         exclusively relate to an earlier date), and (iv) the Borrowers shall
         have delivered to the Agent a copy of the Commitment Acceptance and
         such other evidence (which may include opinions of counsel) as it may
         request to confirm the Borrowers' due authorization of the transactions
         contemplated by this Section and the validity and enforceability of the
         Borrowers' obligation arising therefrom.

                  (b)      If and to the extent any Loans are outstanding on the
         Increase Date, the Borrowers shall (A) at the end of the current
         Interest Period, in the case of outstanding Eurodollar Loans and (B)
         within one Business Days of the Increase Date, in the case of any other
         outstanding Loans, prepay or repay each such Loan then outstanding in
         its entirety and, to the extent that the Borrowers elect to do so and
         subject to the conditions specified in Section 5.2, the Borrowers shall
         re-borrow Loans from the applicable Lenders in proportion to their
         respective Commitments after giving effect to such increase, until such
         time as all outstanding Loans are held by the Lenders in such
         proportion.

                  (c)      If and to the extent any LOC Obligations are
         outstanding on the Increase Date, each Lender whose Commitment has not
         been assumed or increased pursuant to Section 2.11(a) (the
         "NON-INCREASING LENDER") shall be deemed, without further action by any
         party hereto, to have sold to each Lender whose Commitment has been
         assumed or increased pursuant to clause Section 2.11(a) of this Section
         (an "INCREASED COMMITMENT LENDER") and each Increased Commitment Lender
         shall be deemed, without further action by any party hereto, to have
         purchased from each Non-Increasing Lender, a participation (on terms
         specified in Section 2.2) in each Letter of Credit in an amount such
         that after giving effect to all such purchases and sales all
         outstanding LOC Obligations are held by the Lenders in proportion to
         their respective Commitments after giving effect to such assumptions
         and increases.

                                   SECTION 3.

                                    PAYMENTS

         3.1      INTEREST.

                  (a)      Interest Rate.

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

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

                  (b)      Default Rate of Interest. Upon the occurrence, and
         during the continuation, of an Event of Default, all past due principal
         of and, to the extent permitted by law, past due interest on, the Loans
         and any other past due amounts owing hereunder or under the other
         Credit Documents shall bear interest, payable on demand, at a per annum
         rate equal to one percent (1%) plus the rate which would otherwise be
         applicable (or if no rate is applicable, then the rate for Loans that
         are Base Rate Loans plus one percent (1%) per annum).

                                       24

<PAGE>

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

         3.2      PREPAYMENTS.

                  (a)      Voluntary Prepayments. The Borrowers shall have the
         right to prepay Loans in whole or in part from time to time without
         premium or penalty; provided, however, that (i) Eurodollar Loans may
         only be prepaid on three Business Days' prior written notice to the
         Agent and any prepayment of Eurodollar Loans will be subject to Section
         4.3; and (ii) each such partial prepayment of Loans shall be in the
         minimum principal amount of $10,000,000. Any payments made under this
         Section 3.2(a) shall be applied as the Borrowers may elect; provided
         that if the Borrowers fail to specify how a voluntary prepayment should
         be applied then such prepayment shall be applied first to Base Rate
         Loans and then to Eurodollar Loans in direct order of Interest Period
         maturities.

                  (b)      Mandatory Prepayments. If at any time (A) the amount
         of Loans outstanding plus the aggregate amount of LOC Obligations
         outstanding exceeds the Revolving Committed Amount or (B) the aggregate
         amount of LOC Obligations outstanding exceeds the LOC Committed Amount,
         the Borrowers shall immediately make a principal payment to the Agent
         in a manner and in an amount necessary to be in compliance with
         Sections 2.1 and 2.2, as applicable, and as directed by the Agent. All
         amounts required to be paid pursuant to this Section 3.2(b) shall be
         (i) applied first to Loans and then to a cash collateral account in
         respect of LOC Obligations, (ii) subject to Section 4.3 and (iii)
         applied first to Base Rate Loans and then to Eurodollar Loans in the
         direct order of Interest Period maturities.

         3.3      PAYMENT IN FULL AT MATURITY.

                  (a)      Subject to Section 3.3(b) below, on the Maturity
         Date, the entire outstanding principal balance of all Loans and all LOC
         Obligations, together with accrued but unpaid interest and all other
         sums owing under this Credit Agreement, shall be due and payable in
         full, unless accelerated sooner pursuant to Section 9.2.

                  (b)      On or before three Business Days prior to the
         Maturity Date, the Borrowers may, as long as no Default or Event of
         Default exists and is continuing, notify the Agent in writing (and the
         Agent shall promptly forward such notice to the Lenders) that, as of
         the Maturity Date, they are converting the outstanding Loans to a term
         loan which shall be due and payable in full on the date one year
         subsequent to the Maturity Date (the "Term Out Maturity Date"). It is
         understood and agreed that subsequent to the Maturity Date, (i) the
         Borrowers may no longer request, and the Lenders are no longer
         obligated to make or issue, new Loans or Letters of Credit, (ii) any
         amounts repaid may not be reborrowed, (iii) interest shall accrue on
         the outstanding Loans, at the option of the Borrowers, in accordance
         with the terms of Section 2.5 and, as set forth in the definition of
         Applicable Margin, the Applicable Margin for Eurodollar Loans
         subsequent to the Maturity Date shall apply and (iv) the Borrowers
         shall have the right to prepay all or a portion of the outstanding
         Loans in accordance with Section 3.2(a).

                                       25

<PAGE>

         3.4      FEES.

                  (a)      Commitment Fees. In consideration of the Revolving
         Committed Amount being made available by the Lenders, the Borrowers
         agree to pay to the Agent, for the pro rata benefit of each Lender, a
         fee equal to the Applicable Margin for Commitment Fees on the Unused
         Commitment (the "Commitment Fees"). The accrued Commitment Fees shall
         be due and payable in arrears on the first Business Day after the end
         of each fiscal quarter of the Borrowers (as well as on the Maturity
         Date) for the immediately preceding fiscal quarter (or portion
         thereof), beginning with the first of such dates to occur after the
         Closing Date.

                  (b)      Letter of Credit Fees.

                           (i)      Letter of Credit Fees. In consideration of
                  the issuance of Letters of Credit hereunder, the Borrowers
                  agree to pay to the Issuing Lender, for the pro rata benefit
                  of each Lender, a per annum fee equal to the Applicable Margin
                  for Eurodollar Loans on or before the Maturity Date on the
                  aggregate stated amount for each Letter of Credit from the
                  date of issuance to the date of expiration (the "Letter of
                  Credit Fees"). The accrued Letter of Credit Fees shall be due
                  and payable in arrears on the first Business Day after the end
                  of each fiscal quarter of the Borrowers (as well as on the
                  Maturity Date) for the immediately preceding fiscal quarter
                  (or portion thereof), beginning with the first of such dates
                  to occur after the Closing Date.

                           (ii)     Issuing Lender Fees. In addition to the
                  Letter of Credit Fees payable pursuant to subsection (i)
                  above, the Borrowers shall pay to the Issuing Lender for its
                  own account, without sharing by the other Lenders, (A) a fee
                  equal to one-eighth of one percent (.125%) per annum on the
                  total sum of all Letters of Credit issued by the Issuing
                  Lender, such fee to be paid on the date of issuance of any
                  Letter of Credit and (B) the customary charges from time to
                  time to the Issuing Lender for its services in connection with
                  the issuance, amendment, payment, transfer, administration,
                  cancellation and conversion of, and drawings under, such
                  Letters of Credit (collectively, the "Issuing Lender Fees").

         3.5      PLACE AND MANNER OF PAYMENTS.

         All payments of principal, interest, fees, expenses and other amounts
to be made by a Borrower under this Credit Agreement shall be made without
setoff, deduction or counterclaim and received not later than 2:00 p.m. on the
date when due in Dollars and in immediately available funds by the Agent at the
Agency Services Address. A Borrower shall, at the time it makes any payment
under this Credit Agreement, specify to the Agent the Loans, Letters of Credit,
fees or other amounts payable by a Borrower hereunder to which such payment is
to be applied (and in the event that it fails to specify, or if such application
would be inconsistent with the terms hereof, the Agent shall distribute such
payment to the Lenders in such manner as it reasonably determines in its sole
discretion). The Agent will distribute such payments to the applicable Lenders
on the same Business Day if any such payment is received prior to 2:00 p.m.;
otherwise the Agent will distribute each payment to the applicable Lenders prior
to 12:00 noon on the next succeeding Business Day.

                                       26

<PAGE>

Whenever any payment hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day (subject to accrual of interest and fees for the period of such
extension), except that in the case of Eurodollar Loans, if the extension would
cause the payment to be made in the next following calendar month, then such
payment shall be made on the next preceding Business Day.

         3.6      PRO RATA TREATMENT.

                  (a)      Loans/Fees. Except to the extent otherwise provided
         herein, all Loans, each payment or prepayment of principal of any Loan,
         each payment of interest on the Loans, each payment of Commitment Fees,
         each payment of Letter of Credit Fees, each reduction of the Revolving
         Committed Amount and each conversion or continuation of any Loans,
         shall be allocated pro rata among the applicable Lenders in accordance
         with their respective Commitment Percentages; provided that, if any
         Lender shall have failed to pay its applicable pro rata share of any
         Loan, then any amount to which such Lender would otherwise be entitled
         pursuant to this Section 3.6 shall instead be payable to the Agent
         until the share of such Loan not funded by such Lender has been repaid
         and any interest owed by such Lender as result of such failure to fund
         has been paid; and provided further, that in the event any amount paid
         to any Lender pursuant to this Section 3.6 is rescinded or must
         otherwise be returned by the Agent, each Lender shall, upon the written
         request of the Agent, repay to the Agent the amount so paid to such
         Lender, with interest for the period commencing on the date such
         payment is returned by the Agent until the date the Agent receives such
         repayment at a rate per annum equal to, during the period to but
         excluding the date two Business Days after such request, the Federal
         Funds Rate, and thereafter, the Base Rate plus one percent (1%) per
         annum.

                  (b)      Letters of Credit. Each payment of unreimbursed
         drawings in respect of LOC Obligations shall be allocated to each
         Lender pro rata in accordance with its Commitment Percentage; provided
         that, if any Lender shall have failed to pay its applicable pro rata
         share of any drawing under any Letter of Credit, then any amount to
         which such Lender would otherwise be entitled pursuant to this
         subsection (b) shall instead be payable to the Issuing Lender; provided
         further, that in the event any amount paid to any Lender pursuant to
         this subsection (b) is rescinded or must otherwise be returned by the
         Issuing Lender, each Lender shall, upon the written request of the
         Issuing Lender, repay to the Agent for the account of the Issuing
         Lender the amount so paid to such Lender, with interest for the period
         commencing on the date such payment is returned by the Issuing Lender
         until the date the Issuing Lender receives such repayment at a rate per
         annum equal to, during the period to but excluding the date two
         Business Days after such request, the Federal Funds Rate, and
         thereafter, the Base Rate plus one percent (1%) per annum.

         3.7      COMPUTATIONS OF INTEREST AND FEES.

                  (a)      Except for Base Rate Loans that are based upon the
         Prime Rate, on which interest shall be computed on the basis of a 365
         or 366 day year as the case may be, all computations of interest and
         fees hereunder shall be made on the basis of the actual number of days
         elapsed over a year of 360 days.

                                       27

<PAGE>

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

         3.8      SHARING OF PAYMENTS.

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

                                       28

<PAGE>

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

         3.9      EVIDENCE OF DEBT.

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

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

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

                                       29

<PAGE>

                                   SECTION 4.

                      ADDITIONAL PROVISIONS REGARDING LOANS

         4.1      EURODOLLAR LOAN PROVISIONS.

                  (a)      Unavailability. If, on or prior to the first day of
         any Interest Period, (i) the Agent shall have determined in good faith
         (which determination shall be conclusive and binding upon the
         Borrowers) that (A) Dollar deposits are not generally available in the
         London interbank Eurodollar market in the applicable principal amounts
         and Interest Period of a requested Eurodollar Loan or (B) by reason of
         circumstances affecting the relevant market, adequate and reasonable
         means do not exist for ascertaining the Eurodollar Rate for such
         Interest Period, or (ii) the Agent shall have received notice from the
         Required Lenders that the Eurodollar Rate determined or to be
         determined for such Interest Period will not adequately and fairly
         reflect the cost to the Lenders of making or maintaining Eurodollar
         Loans for such Interest Period (as conclusively certified by such
         Lenders), the Agent shall give notice thereof to the Borrowers and the
         Lenders as soon as practicable thereafter. Upon delivery of such
         notice, (A) any Eurodollar Loans requested to be made on the first day
         of such Interest Period shall be made as Base Rate Loans, (B) any Loans
         that were to have been converted to or continued as Eurodollar Loans
         shall be prepaid by the Borrowers or converted to or continued as Base
         Rate Loans and (C) any outstanding Eurodollar Loans shall be converted,
         on the first day of such Interest Period, to Base Rate Loans. Until the
         Agent has withdrawn such notice, no further Eurodollar Loans shall be
         made or continued as such, nor shall the Borrowers have the right to
         convert Base Rate Loans to Eurodollar Loans.

                  (b)      Change in Legality. Notwithstanding any other
         provision herein, if any change, after the date hereof, in any law,
         governmental rule, regulation, guideline or order (including the
         introduction of any new law or governmental rule, regulation, guideline
         or order) or in the interpretation or administration thereof by any
         Governmental Authority charged with the interpretation or
         administration thereof shall make it unlawful for any Lender to make or
         maintain any Eurodollar Loan then, by written notice to the Borrowers
         and to the Agent, such Lender may:

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

                           (ii)     require that all outstanding Eurodollar
                  Loans made by it be converted to Base Rate Loans in which
                  event all such Eurodollar Loans shall be converted to Base
                  Rate Loans either (A) on the last day of the then current
                  Interest Period applicable to such Eurodollar Loan if such
                  Lender can lawfully continue to maintain and fund such
                  Eurodollar Loan or (B) immediately if such Lender shall
                  determine

                                       30

<PAGE>

                  that it may not lawfully continue to maintain and fund such
                  Eurodollar Loan to such day.

                  (c)      Requirements of Law. If at any time a Lender shall
         incur increased costs or reductions in the amounts received or
         receivable hereunder with respect to the making, the commitment to make
         or the maintaining of any Eurodollar Loan because of (i) any change
         after the date hereof in any law, governmental rule, regulation,
         guideline or order (including the introduction of any new law or
         governmental rule, regulation, guideline or order) or in the
         interpretation or administration thereof by any Governmental Authority
         charged with the interpretation or administration thereof, including,
         without limitation, the imposition, modification or deemed
         applicability of any reserves, deposits or similar requirements (such
         as, for example, but not limited to, a change in official reserve
         requirements) or (ii) other circumstances affecting the London
         interbank Eurodollar market; then the Borrowers shall pay to such
         Lender promptly upon written demand therefor, such additional amounts
         (in the form of an increased rate of, or a different method of
         calculating, interest or otherwise as such Lender may determine in its
         sole discretion) as may be required to compensate such Lender for such
         increased costs or reductions in amounts receivable hereunder. If any
         Lender becomes entitled to claim any additional amounts pursuant to
         this Section 4.1(c), it shall provide prompt notice thereof to the
         Borrowers, through the Agent, certifying (A) that one of the events
         described in this Section 4.1(c) has occurred and describing in
         reasonable detail the nature of such event, (B) as to the increased
         cost or reduced amount resulting from such event and (C) as to the
         additional amount demanded by such Lender and a reasonably detailed
         explanation of the calculation thereof provided that no such amount
         shall be payable with respect to any period commencing more than 90
         days prior to the date such Lender first notifies the Borrowers of its
         intention to demand compensation therefor under this Section.

                  (d)      Regulation D Compensation. In the event that a Lender
         is required to maintain reserves of the type contemplated by the
         definition of "Eurodollar Reserve Percentage", such Lender may require
         the Borrowers to pay, contemporaneously with each payment of interest
         on the Eurodollar Loans, additional interest on the related Eurodollar
         Loan of such Lender at a rate per annum determined by such Lender up to
         but not exceeding the excess of (i)(A) the applicable London Interbank
         Offered Rate divided by (B) one minus the Eurodollar Reserve Percentage
         over (ii) the applicable London Interbank Offered Rate. Any Lender
         wishing to require payment of such additional interest (x) shall so
         notify the Borrowers and the Agent, in which case such additional
         interest on the Eurodollar Loans of such Lender shall be payable to
         such Lender at the place indicated in such notice with respect to each
         Interest Period commencing at least three Business Days after the
         giving of such notice and (y) shall notify the Borrowers at least three
         Business Days prior to each date on which interest is payable on the
         Eurodollar Loans of the amount then due it under this Section. Each
         such notification shall be accompanied by such information as the
         Borrowers may reasonably request.

         Each determination and calculation made by a Lender under this Section
4.1 shall, absent manifest error, be binding and conclusive on the parties
hereto. Any conversions of Eurodollar Loans made pursuant to this Section 4.1
shall subject the Borrowers to the payments required by

                                       31

<PAGE>

Section 4.3 to the extent applicable. This Section shall survive termination of
this Credit Agreement and the other Credit Documents and payment of the Loans
and all other amounts payable hereunder.

         4.2      CAPITAL ADEQUACY.

         If any Lender has determined that the adoption or becoming effective,
after the date hereof, of any applicable law, rule or regulation regarding
capital adequacy, or any change therein (after the date hereof), or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Lender (or its parent corporation)
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's (or parent corporation's) capital or assets as a consequence of its
commitments or obligations hereunder to a level below that which such Lender (or
its parent corporation) could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's (or
parent corporation's) policies with respect to capital adequacy), then, upon
notice from such Lender (which shall include the basis and calculations in
reasonable detail supporting the compensation requested in such notice), and
receipt by the Borrowers of such written notice from such Lender (with a copy to
the Agent) the Borrowers shall be obligated to pay to such Lender such
additional amount or amounts as will compensate such Lender on an after tax
basis (after taking into account applicable deductions and credits in respect of
the amount so indemnified) for such reduction provided that no such amount shall
be payable with respect to any period commencing more than 90 days prior to the
date such Lender first notifies the Borrowers of its intention to demand
compensation therefor under this Section. Each determination by any Lender of
amounts owing under this Section 4.2 shall, absent manifest error, be conclusive
and binding on the parties hereto. The covenants of this Section 4.2 shall
survive termination of this Credit Agreement and the other Credit Documents and
the payment of the Loans and all other amounts payable hereunder.

         4.3      COMPENSATION.

         The Borrowers promise to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur as a
consequence of (a) default by the Borrowers in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrowers have given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrowers in making any prepayment of a Eurodollar Loan after
the Borrowers have given a notice thereof in accordance with the provisions of
this Credit Agreement, (c) the making of a prepayment of Eurodollar Loans on a
day which is not the last day of an Interest Period with respect thereto and (d)
the payment, continuation or conversion of a Eurodollar Loan on a day which is
not the last day of the Interest Period applicable thereto or the failure to
repay a Eurodollar Loan when required by the terms of this Credit Agreement.
Such indemnification may include an amount equal to (i) an amount of interest
calculated at the Eurodollar Rate which would have accrued on the amount in
question, for the period from the date of such prepayment or of such failure to
borrow, convert, continue or repay to the last day of the applicable Interest
Period (or, in the case of a failure to borrow, convert or continue, the
Interest Period that would have commenced on the date of such failure) in each
case at the applicable rate of interest for such Eurodollar Loans

                                       32

<PAGE>

provided for herein minus (ii) the amount of interest (as reasonably determined
by such Lender) which would have accrued to such Lender on such amount by
placing such amount on deposit for a comparable period with leading banks in the
interbank Eurocurrency market. If any Lender becomes entitled to claim any
additional amounts pursuant to this Section 4.3, it shall provide prompt notice
thereof to the Borrower, through the Agent, as to the additional amount demanded
by such Lender and a reasonably detailed explanation of the calculation thereof.
The covenants in this Section 4.3 shall survive the termination of this Credit
Agreement and the payment of the Loans and all other amounts payable hereunder.

         4.4      TAXES.

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

                                       33

<PAGE>

         of any such failure. The agreements in this Section 4.4 shall survive
         the termination of this Credit Agreement and the payment of the Loans
         and all other amounts payable hereunder.

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

                           (i)      (A)       on or before the date of any
                                    payment by the Borrowers under this Credit
                                    Agreement or the Notes to such Lender,
                                    deliver to the Borrowers and the Agent (x)
                                    two duly completed copies of United States
                                    Internal Revenue Service Form W-8BEN or
                                    W-8ECI, or any successor applicable form, as
                                    the case may be, certifying that it is
                                    entitled to receive payments under this
                                    Credit Agreement and any Notes without
                                    deduction or withholding of any United
                                    States federal income taxes and (y) an
                                    Internal Revenue Service Form W-8 or W-9, or
                                    successor applicable form, as the case may
                                    be, certifying that it is entitled to an
                                    exemption from United States backup
                                    withholding tax;

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

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

                           (ii)     in the case of any such Lender that is not a
                  "bank" within the meaning of Section 881(c)(3)(A) of the
                  Internal Revenue Code, (A) represent to the Borrowers (for the
                  benefit of the Borrowers and the Agent) that it is not a bank
                  within the meaning of Section 881 (c)(3)(A) of the Internal
                  Revenue Code, (B) agree to furnish to the Borrowers, on or
                  before the date of any payment by the Borrowers, with a copy
                  to the Agent, two accurate and complete original signed copies
                  of Internal Revenue Service Form W-8, or successor applicable
                  form, certifying to such Lender's legal entitlement at the
                  date of such certificate to an exemption from U.S. withholding
                  tax under the provisions of Section 881(c) of the Internal
                  Revenue Code with respect to payments to be made under this
                  Credit Agreement and any Notes (and to deliver to the
                  Borrowers and the Agent two further copies of such form on or
                  before the date it expires or becomes obsolete and after the
                  occurrence of any event requiring a change in the most
                  recently provided form and, if necessary, obtain any
                  extensions of time reasonably requested by the Borrowers or
                  the Agent for filing and completing such forms), and (C)
                  agree, to the extent legally entitled to do so, upon
                  reasonable request by the Borrowers, to provide to the
                  Borrowers (for the benefit of the Borrowers and the Agent)
                  such other forms as may be reasonably required in order to
                  establish

                                       34

<PAGE>

                  the legal entitlement of such Lender to an exemption from
                  withholding with respect to payments under this Credit
                  Agreement and any Notes.

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

         4.5      REPLACEMENT OF LENDERS.

         The Agent and each Lender shall use reasonable efforts to avoid or
mitigate any increased cost or suspension of the availability of an interest
rate under Sections 4.1 through 4.4 above to the greatest extent practicable
(including transferring the Loans to another lending office or Affiliate of a
Lender) unless, in the opinion of the Agent or such Lender, such efforts would
be likely to have an adverse effect upon it. In the event a Lender makes a
request to the Borrowers for additional payments in accordance with Section 4.1,
4.2 or 4.4, or suspends Eurodollar Loans under Section 4.1, then, provided that
no Default or Event of Default has occurred and is continuing at such time, the
Borrowers may, at their own expense (such expense to include any transfer fee
payable to the Agent under Section 11.3(b) and any expense pursuant to Section
4) and in its sole discretion, require such Lender to transfer and assign in
whole (but not in part), without recourse (in accordance with and subject to the
terms and conditions of Section 11.3(b)), all of its interests, rights and
obligations under this Credit Agreement to an Eligible Assignee which shall
assume such assigned obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (a) such assignment shall not
conflict with any law, rule or regulation or order of any court or other
Governmental Authority and (b) the Borrowers or such assignee shall have paid to
the assigning Lender in immediately available funds the principal of and
interest accrued to the date of such payment on the portion of the Loans
hereunder held by such assigning Lender and all other amounts owed to such
assigning Lender hereunder, including amounts owed pursuant to Sections 4.1
through 4.4.

                                       35

<PAGE>

                                   SECTION 5.

                              CONDITIONS PRECEDENT

         5.1      CLOSING CONDITIONS.

         The obligation of the Lenders to enter into this Credit Agreement is
subject to satisfaction (or waiver) of the following conditions:

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

                  (b)      Organizational Documents.

                           (i)      Receipt by the Agent of the following with
                  respect to Duke Energy Field Services, LLC:

                                    (A)      Certificate of Formation. A copy of
                           the certificate of formation of such Borrower
                           certified to be true and complete by the appropriate
                           Governmental Authority of the State of Delaware and
                           certified by an authorized officer of such Borrower
                           to be true and correct as of the Effective Date.

                                    (B)      LLC Agreement. A copy of the LLC
                           Agreement of such Borrower certified by an authorized
                           officer of such Borrower to be true and correct as of
                           the Effective Date.

                                    (C)      Resolutions. Copies of resolutions
                           of the members of such Borrower approving and
                           adopting the Credit Documents to which such Borrower
                           is a party, the transactions contemplated therein and
                           authorizing execution and delivery thereof and
                           certified by an authorized officer of such Borrower
                           to be in full force and effect as of the Effective
                           Date.

                                    (D)      Good Standing. Copies of
                           certificates of good standing, existence or their
                           equivalent with respect to such Borrower certified as
                           of a recent date by the appropriate Governmental
                           Authorities of the State of Delaware.

                                    (E)      Incumbency. An incumbency
                           certificate certified by an authorized officer to be
                           true and correct as of the Effective Date.

                           (ii)     Receipt by the Agent of the following with
                  respect to Duke Energy Field Services Corporation:

                                    (A)      Charter Documents. Copies of the
                           articles or certificates of incorporation or other
                           charter documents of such Borrower certified to be

                                       36

<PAGE>

                           true and complete as of a recent date by the
                           appropriate Governmental Authority of the State of
                           Delaware and certified by a secretary or assistant
                           secretary of such Borrower to be true and correct as
                           of the Effective Date.

                                    (B)      Bylaws. A copy of the bylaws or
                           other governing documents of such Borrower certified
                           by a secretary or assistant secretary of such
                           Borrower to be true and correct as of the Effective
                           Date.

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

                                    (D)      Good Standing. Copies of
                           certificates of good standing, existence or its
                           equivalent with respect to such Borrower certified as
                           of a recent date by the appropriate Governmental
                           Authorities of the State of Delaware.

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

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

                  (d)      Financial Statements. Receipt by the Lenders of such
         financial information regarding the Borrowers as the Lenders may
         reasonably request, including receipt, not later than five Business
         Days prior to the Closing Date, of the audited consolidated balance
         sheet of Duke Energy Field Services, LLC and its subsidiaries for the
         fiscal year ended December 31, 2002 and the related statements of cash
         flows, capitalization and retained earnings for such fiscal year.

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

                  (f)      Litigation. As of the Closing Date, there shall be no
         material actions, suits, investigations or legal, equitable,
         arbitration or administrative proceedings pending or threatened against
         a Borrower which are likely to be decided adversely to such Borrower
         and if so decided would have a Material Adverse Effect.

                  (g)      Material Adverse Effect. As of the Closing Date, no
         event or condition shall have occurred since December 31, 2002 that
         would have or would be reasonably expected to have a Material Adverse
         Effect.

                                       37

<PAGE>

                  (h)      Borrowers' Certificate. The Agent shall have received
         a certificate or certificates executed by an Approved Officer of the
         Borrowers, on behalf of the Borrowers, as of the Closing Date stating
         that (i) the Borrowers are in compliance with all existing financial
         obligations, unless such non-compliance would not have a Material
         Adverse Effect, (ii) no action, suit, investigation or proceeding is
         pending or, to such officer's knowledge, threatened in any court or
         before any arbitrator or governmental instrumentality that purports to
         affect a Borrower or any transaction contemplated by the Credit
         Documents, if such action, suit, investigation or proceeding is likely
         to be adversely determined and if adversely determined would have a
         Material Adverse Effect, (iii) the financial statements and information
         delivered to the Agent on or before the Closing Date were prepared in
         good faith and in accordance with GAAP, (iv) the amount of Off Balance
         Sheet Indebtedness of the Borrowers as of December 31, 2002, as set
         forth on a schedule attached thereto, is true and correct and (v)
         immediately after giving effect to this Credit Agreement, the other
         Credit Documents and all the transactions contemplated herein and
         therein to occur on such date, (A) no Default or Event of Default
         exists and (B) all representations and warranties contained herein and
         in the other Credit Documents are true and correct in all material
         respects on and as of the date made.

                  (i)      Existing Credit Facility. All loans and obligations
         under the Existing Credit Facility shall have been paid in full and all
         commitments thereunder shall have terminated.

                  (j)      Other Facilities. Receipt by the Administrative Agent
         of evidence satisfactory to it of receipt of commitments totaling at
         least $100,000,000 from lenders under additional facilities having
         terms no more favorable to such lenders than the terms of this
         Agreement are to the Lenders, except as to (x) the all-in-costs of such
         additional facilities, which shall be substantially comparable to those
         under this Agreement and (y) maturity.

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

                  (l)      Minimum Commitments. The aggregate amount of
         Commitments of all Lenders on the Closing Date shall be not less than
         $325,000,000.

         5.2      CONDITIONS TO LOANS.

         In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make new Loans nor shall the Issuing Lender be
required to issue or extend a Letter of Credit (and the Lenders shall not be
obligated to participate in any Letter of Credit) unless:

                  (a)      Request. The Borrowers shall have timely delivered
         (i) in the case of any new Loan, to the Agent, an appropriate Notice of
         Borrowing, duly executed and completed, by the time specified in
         Section 2.1 and (ii) in the case of any Letter of Credit, to the
         Issuing Lender, an appropriate request for issuance of a Letter of
         Credit in accordance with the provisions of Section 2.2.

                                       38

<PAGE>

                  (b)      Representations and Warranties. The representations
         and warranties made by the Borrowers in this Credit Agreement are true
         and correct in all material respects at and as if made as of the date
         of the funding of the Loans or the issuance of the Letters of Credit,
         as applicable (except to the extent such representations and warranties
         expressly and exclusively relate to an earlier date).

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

                  (d)      Availability. Immediately after giving effect to the
         making of a Loan (and the application of the proceeds thereof) or to
         the issuance of a Letter of Credit, as the case may be, (i) the sum of
         the Loans outstanding plus LOC Obligations outstanding shall not exceed
         the Revolving Committed Amount and (ii) the sum of LOC Obligations
         outstanding shall not exceed the LOC Committed Amount.

         The delivery of each Notice of Borrowing and each request for a Letter
of Credit shall constitute a representation and warranty by the Borrowers of the
correctness of the matters specified in subsections (b), (c) and (d) above.

                                   SECTION 6.

                         REPRESENTATIONS AND WARRANTIES

         The Borrowers hereby represents and warrants to each Lender that:

         6.1      ORGANIZATION AND GOOD STANDING.

         Each Borrower (a) is a limited liability company or a corporation duly
formed, validly existing and in good standing under the laws of the State of
Delaware, (b) is duly qualified and in good standing as a foreign limited
liability company or corporation authorized to do business in every jurisdiction
where the failure to so qualify would have a Material Adverse Effect and (c) has
the requisite power and authority to own its properties and to carry on its
business as now conducted and as proposed to be conducted.

         6.2      DUE AUTHORIZATION.

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

         6.3      NO CONFLICTS.

         Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated herein and therein, nor
performance of and compliance with the terms

                                       39

<PAGE>

and provisions hereof and thereof by each Borrower will (a) violate or conflict
with any provision of its organizational documents or bylaws, (b) materially
violate, contravene or conflict with any law (including without limitation, the
Public Utility Holding Company Act of 1935, as amended), regulation (including
without limitation, Regulation U or Regulation X), order, writ, judgment,
injunction, decree or permit applicable to it, (c) materially violate,
contravene or conflict with contractual provisions of, or cause an event of
default under, any indenture, loan agreement, mortgage, deed of trust, contract
or other agreement or instrument to which it is a party or by which it may be
bound or (d) result in or require the creation of any Lien upon or with respect
to its properties.

         6.4      CONSENTS.

         No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or Governmental Authority or third
party is required in connection with the execution, delivery or performance of
this Credit Agreement or any of the other Credit Documents that has not been
obtained.

         6.5      ENFORCEABLE OBLIGATIONS.

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

         6.6      FINANCIAL CONDITION.

         The financial statements delivered to the Lenders pursuant to Section
5.1(d) and pursuant to Section 7.1(a) and (b): (i) have been prepared in
accordance with GAAP (subject to the provisions of Section 1.3) and (ii) present
fairly the financial condition, results of operations and cash flows of the
Borrowers as of such date and for such periods (subject, in the case of interim
statements, to normal year-end adjustments and the absence of footnotes).

         6.7      TAXES.

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

                                       40

<PAGE>

         6.8      COMPLIANCE WITH LAW.

         Each Borrower and each of its Material Subsidiaries is in compliance
with all laws, rules, regulations, orders, decrees and requirements of
Governmental Authorities applicable to it or to its properties (including,
without limitation, ERISA, the Code and Environmental Laws), except (a) where
the necessity of compliance therewith is being contested in good faith by
appropriate proceedings or (b) such failure to comply would not have or would
not be reasonably expected to have a Material Adverse Effect.

         6.9      USE OF PROCEEDS; MARGIN STOCK.

         The proceeds of the Loans hereunder will be used solely for the
purposes specified in Section 7.7. None of such proceeds will be used for the
purpose of (a) purchasing or carrying any "margin stock" as defined in
Regulation U or Regulation X, (b) for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry "margin stock",
(c) for any other purpose which might constitute this transaction a "purpose
credit" within the meaning of Regulation U or Regulation X or (d) for the
acquisition of another Person unless the board of directors (or other comparable
governing body) or stockholders, as appropriate, of such Person has approved
such acquisition.

         6.10     GOVERNMENT REGULATION.

         Each Borrower is exempt from the provisions of the Public Utility
Holding Company Act of 1935, as amended. Neither Borrower is an "investment
company" registered or required to be registered under the Investment Company
Act of 1940, as amended, or controlled by such a company.

         6.11     SOLVENCY.

         Each Borrower is and, after the consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.

         6.12     ENVIRONMENTAL MATTERS.

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

         6.13     SUBSIDIARIES.

         Set forth on Schedule 6.13 is a list of all Material Subsidiaries of
the Borrowers.

                                       41

<PAGE>

         6.14     LITIGATION.

         There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge either of the
Borrowers, threatened against a Borrower which (a) are likely to be decided
adversely against a Borrower and (b) if so decided would have or would
reasonably be expected to have a Material Adverse Effect.

                                   SECTION 7.

                              AFFIRMATIVE COVENANTS

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

         7.1      INFORMATION COVENANTS.

         The Borrowers will furnish, or cause to be furnished, to the Agent and
each of the Lenders:

                  (a)      Annual Financial Statements. As soon as available,
         and in any event within 95 days after the close of each fiscal year of
         the Borrowers, a consolidated balance sheet of the Borrowers and their
         Subsidiaries as of the end of such fiscal year, together with a related
         consolidated income statement and related statements of cash flows,
         capitalization and retained earnings for such fiscal year, setting
         forth in comparative form figures for the preceding fiscal year, all
         such financial information described above to be audited by independent
         certified public accountants of recognized national standing and whose
         opinion, which shall be furnished to the Agent, shall be to the effect
         that such financial statements have been prepared in accordance with
         GAAP (except for changes with which such accountants concur); provided
         that the Borrowers' Form 10-K Annual Report as filed with the
         Securities and Exchange Commission, without exhibits, will satisfy the
         requirements of this Section 7.1(a).

                  (b)      Quarterly Financial Statements. As soon as available,
         and in any event within 50 days after the close of each fiscal quarter
         of the Borrowers (other than the fourth fiscal quarter) a consolidated
         balance sheet of the Borrowers and their Subsidiaries as of the end of
         such fiscal quarter, together with a related consolidated income
         statement and related statement of cash flows for such fiscal quarter
         in each case setting forth in comparative form figures for the
         corresponding period of the preceding fiscal year, and accompanied by a
         certificate of an Approved Officer of the Borrowers to the effect that
         such quarterly financial statements fairly present in all material
         respects the financial condition of the Borrowers and have been
         prepared in accordance with GAAP, subject to changes resulting from
         audit and normal year-end audit adjustments to same; provided that the
         Borrowers' Form 10-Q Quarterly Report as filed with the Securities and
         Exchange Commission, without exhibits, will satisfy the requirements of
         this Section 7.1(b).

                  (c)      Officer's Certificate. At the time of delivery of the
         financial statements provided for in Sections 7.1(a) and 7.1(b) above,
         a certificate of an Approved Officer of the

                                       42

<PAGE>

         Borrowers, substantially in the Form of Exhibit 7.1(c), (i)
         demonstrating compliance with the financial covenants contained in
         Sections 7.10 and 7.11 by calculation thereof as of the end of each
         such fiscal period, (ii) stating that no Default or Event of Default
         exists, or if any Default or Event of Default does exist, specifying
         the nature and extent thereof and what action the Borrowers propose to
         take with respect thereto, (iii) setting forth the amount of Off
         Balance Sheet Indebtedness of the Borrowers as of the end of each such
         fiscal period and (iv) updating Schedule 6.13 with respect to Material
         Subsidiaries, if appropriate.

                  (d)      Reports. Promptly upon transmission or receipt
         thereof, copies of any filings and registrations with, and reports to
         or from, the Securities and Exchange Commission, or any successor
         agency, and copies of all financial statements, proxy statements,
         notices and reports as a Borrower shall send to its equityholders.

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

                  (f)      ERISA. Upon a Borrower or any ERISA Affiliate
         obtaining knowledge thereof, the Borrowers will give written notice to
         the Agent promptly (and in any event within five Business Days) of: (i)
         any event or condition, including, but not limited to, any Reportable
         Event, that constitutes, or would be reasonably expected to lead to, a
         Termination Event if such Termination Event would have a Material
         Adverse Effect; (ii) with respect to any Multiemployer Plan, the
         receipt of notice as prescribed in ERISA or otherwise of any withdrawal
         liability assessed against a Borrower or any ERISA Affiliate, or of a
         determination that any Multiemployer Plan is in reorganization or
         insolvent (both within the meaning of Title IV of ERISA); (iii) the
         failure to make full payment on or before the due date (including
         extensions) thereof of all amounts which a Borrower or any of its
         Subsidiaries or ERISA Affiliates is required to contribute to each Plan
         pursuant to its terms and as required to meet the minimum funding
         standard set forth in ERISA and the Code with respect thereto; or (iv)
         any change in the funding status of any Plan that would have or would
         be reasonably expected to have a Material Adverse Effect; together,
         with a description of any such event or condition or a copy of any such
         notice and a statement by an officer of a Borrower briefly setting
         forth the details regarding such event, condition, or notice, and the
         action, if any, which has been or is being taken or is proposed to be
         taken with respect thereto. Promptly upon request, each Borrower shall
         furnish the Agent and each of the Lenders with such additional
         information concerning any Plan as may be

                                       43

<PAGE>

         reasonably requested, including, but not limited to, copies of each
         annual report/return (Form 5500 series), as well as all schedules and
         attachments thereto required to be filed with the Department of Labor
         and/or the Internal Revenue Service pursuant to ERISA and the Code,
         respectively, for each "plan year" (within the meaning of Section 3(39)
         of ERISA).

                  (g)      Debt Rating Changes. Upon any change in its Debt
         Rating, the Borrowers shall promptly deliver such information to the
         Agent.

                  (h)      Other Information. With reasonable promptness upon
         any such request, such other information regarding the business,
         properties or financial condition of the Borrowers and their
         Subsidiaries as the Agent or any Lender may reasonably request.

         Information required to be delivered pursuant to this Sections 7.1(a),
7.1(b) and 7.1(d) shall be deemed to have been delivered on the date on which
the Borrowers provide notice to the Lenders that such information has been
posted on the Securities and Exchange Commission website on the Internet at
www.sec.gov/edgar/searchedgar/webusers.htm or at another website identified in
such notice and accessible by the Lenders without charge; provided that (i) such
notice may be included in a certificate delivered pursuant to Section 7.1(c) and
(ii) the Borrowers shall deliver paper copies of the information referred to in
Sections 7.1(a), 7.1(b) and 7.1(d), to any Lender that requests such delivery.

         7.2      PRESERVATION OF EXISTENCE AND FRANCHISES.

         Each Borrower will, and will cause each Material Subsidiary to, do all
things necessary to preserve and keep in full force and effect its existence and
rights, franchises and authority; provided, however, that, subject to Section
8.3, a Borrower shall not be required to preserve any such existence, right or
franchise if it in good faith determines that preservation thereof is no longer
necessary or desirable in the conduct of its business and that the loss thereof
is not disadvantageous in any material respect to the Lenders.

         7.3      BOOKS AND RECORDS.

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

         7.4      COMPLIANCE WITH LAW.

         Each Borrower will comply, and will cause each Material Subsidiary to
comply, with all laws (including, without limitation, all Environmental Laws and
ERISA laws), rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its property, if
(a) the failure to comply would have or would be reasonably expected to have a
Material Adverse Effect or (b) the necessity of compliance therewith is being
contested in good faith by appropriate proceedings.

                                       44

<PAGE>

         7.5      PAYMENT OF TAXES AND OTHER INDEBTEDNESS.

         Each Borrower will, and will cause each Material Subsidiary to, pay,
settle or discharge (a) all taxes, assessments and governmental charges or
levies imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become delinquent, (b) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid, might
give rise to a Lien upon any of its properties, and (c) all of its other
Indebtedness as it shall become due; provided, however, that no Borrower shall
be required to pay any such tax, assessment, charge, levy, claim or Indebtedness
which (i) is being contested in good faith by appropriate proceedings and as to
which adequate reserves therefor have been established in accordance with GAAP
or (ii) the nonpayment of which would not have a Material Adverse Effect.

         7.6      MAINTENANCE OF PROPERTY; INSURANCE.

                  (a)      Each Borrower will keep, and will cause each Material
         Subsidiary to keep, all property useful and necessary in its business
         in good working order and condition, ordinary wear and tear excepted.

                  (b)      Each Borrower will, and will cause each of its
         Material Subsidiaries to, maintain (either in the name of such Borrower
         or in such Material Subsidiary's own name) with financially sound and
         responsible insurance companies, insurance on all their respective
         properties in at least such amounts and against at least such risks
         (and with such risk retention) as are usually insured against in the
         same general area by companies of established repute engaged in the
         same or a similar business; provided that self-insurance by a Borrower
         or any such Material Subsidiary shall not be deemed a violation of this
         covenant to the extent that companies engaged in similar businesses and
         owning similar properties in the same general areas in which the
         Borrowers or such Material Subsidiary operates self-insure.

         7.7      USE OF PROCEEDS.

         The proceeds of the Loans may be used solely (a) to repay any amounts
owing under the Existing Credit Facility, (b) to provide credit support for each
Borrower's commercial paper and (c) for working capital and other general
corporate purposes of each Borrower. The Borrowers will use the Letters of
Credit solely for the purposes set forth in Section 2.2(a).

         7.8      AUDITS/INSPECTIONS.

         Upon reasonable notice and during normal business hours, each Borrower
will, and will cause its Material Subsidiaries to, permit representatives
appointed by the Agent, including, without limitation, independent accountants,
agents, attorneys, and appraisers to visit and inspect each Borrower's and its
Material Subsidiaries' property, including its books and records, its accounts
receivable and inventory, each Borrower's and its Material Subsidiaries'
facilities and its other business assets, and to make photocopies or photographs
thereof and to write down and record any information such representatives obtain
and shall permit the Agent or its representatives to investigate and verify the
accuracy of information provided to the Lenders and to discuss all such

                                       45

<PAGE>

matters with the officers, employees and representatives of each Borrower and
its Material Subsidiaries.

         7.9      MAINTENANCE OF OWNERSHIP.

         Each Borrower will maintain ownership of all Capital Stock of each
Material Subsidiary, directly or indirectly, free and clear of all Liens except
as permitted by Section 8.3. The Borrowers will take such action as necessary to
ensure that, on and after the date of the Merger, Duke Energy Field Services,
LLC will be (and will remain) a wholly owned Subsidiary, direct or indirect, of
Duke Energy Field Services Corporation unless Duke Energy Field Services, LLC is
merged with and into Duke Energy Field Services Corporation.

         7.10     DEBT TO CAPITALIZATION RATIO.

         The Debt to Capitalization Ratio shall, at all times, be less than or
equal to the following:

                  (a)      From the Effective Date until but not including the
         earlier of (i) the date on which the Merger is consummated and (ii) the
         date on which a Corporate Conversion occurs, .53 to 1.0; and

                  (b)      From the earlier of (i) the date on which the Merger
         is consummated and (ii) the date on which a Corporate Conversion occurs
         and thereafter, .57 to 1.0.

         7.11     INTEREST COVERAGE RATIO.

         The Consolidated Interest Coverage Ratio shall, as at the end of each
fiscal quarter, be equal to or greater than 2.5:1.0.

                                   SECTION 8.

                               NEGATIVE COVENANTS

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

         8.1      NATURE OF BUSINESS.

         The Borrowers will not, and will not permit any of their Material
Subsidiaries to, materially alter the character of their business on a
consolidated basis from that conducted as of the Closing Date.

         8.2.     LIENS.

         A Borrower will not create, assume or suffer to exist any Lien on any
asset now owned or hereafter acquired by it or any of its Material Subsidiaries,
except for the following:

                                       46

<PAGE>

                  (a)      Liens granted by such Borrower or any Material
         Subsidiary existing on the date of this Credit Agreement securing
         Indebtedness outstanding on the date of this Credit Agreement as set
         forth on Schedule 8.2.

                  (b)      any Lien on any asset of any Person existing at the
         time such Person is merged or consolidated with or into a Borrower or
         any Material Subsidiary and not created in contemplation of such event.

                  (c)      any Lien existing on any asset prior to the
         acquisition thereof by a Borrower or any Material Subsidiary and not
         created in contemplation of such acquisition.

                  (d)      any Lien on any asset securing Indebtedness incurred
         or assumed for the purpose of financing all or any part of the cost of
         acquiring such asset; provided that such Lien attaches to such asset
         concurrently with or within 180 days after the acquisition thereof.

                  (e)      any Lien arising out of the refinancing, extension,
         renewal or refunding of any Indebtedness secured by any Lien permitted
         by any of the foregoing clauses of this Section 8.2; provided that such
         Indebtedness is not increased and is not secured by any additional
         assets.

                  (f)      Liens for taxes, assessments or other governmental
         charges or levies not yet due or which are being contested in good
         faith by appropriate proceedings and with respect to which adequate
         reserves or other appropriate provisions are being maintained in
         accordance with GAAP.

                  (g)      statutory Liens of landlords and Liens of carriers,
         warehousemen, mechanics, materialmen and interest owners of oil and gas
         production and other Liens imposed by law, created in the ordinary
         course of business and for amounts not past due for more than 60 days
         or which are being contested in good faith by appropriate proceedings
         which are sufficient to prevent imminent foreclosure of such Liens, are
         promptly instituted and diligently conducted and with respect to which
         adequate reserves or other appropriate provisions are being maintained
         in accordance with GAAP.

                  (h)      Liens incurred or deposits made in the ordinary
         course of business (including, without limitation, surety bonds and
         appeal bonds) in connection with workers' compensation, unemployment
         insurance and other types of social security benefits or to secure the
         performance of tenders, bids, leases, contracts (other than for the
         repayment of Indebtedness), statutory obligations and other similar
         obligations or arising as a result of progress payments under
         government contracts.

                  (i)      easements (including, without limitation, reciprocal
         easement agreements and utility agreements), rights-of-way, covenants,
         consents, reservations, encroachments, variations and other
         restrictions, charges or encumbrances (whether or not recorded)
         affecting the use of real property.

                  (j)      Liens with respect to judgments and attachments which
         do not result in an Event of Default.

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                  (k)      Liens, deposits or pledges to secure the performance
         of bids, tenders, contracts (other than contracts for the payment of
         money), leases (permitted under the terms of this Agreement), public or
         statutory obligations, surety, stay, appeal, indemnity, performance or
         other obligations arising in the ordinary course of business.

                  (l)      rights of first refusal entered into in the ordinary
         course of business.

                  (m)      Liens consisting of any (i) rights reserved to or
         vested in any municipality or governmental, statutory or public
         authority to control or regulate any property of a Borrower or any
         Material Subsidiary or to use such property in any manner which does
         not materially impair the use of such property for the purpose for
         which it is held by a Borrower or any such Material Subsidiary, (ii)
         obligations or duties to any municipality or public authority with
         respect to any franchise, grant, license, lease or permit and the
         rights reserved or vested in any Governmental Authority or public
         utility to terminate any such franchise, grant, license, lease or
         permit or to condemn or expropriate any property, or (iii) zoning laws,
         ordinances or municipal regulations.

                  (n)      liens on deposits required by any Person with whom a
         Borrower or any Material Subsidiary enters into forward contracts,
         futures contracts, swap agreements or other commodities contracts in
         the ordinary course of business.

                  (o)      liens on assets in connection with asset
         securitizations entered into by a Borrower or one of its Subsidiaries
         as long as such liens do not secure indebtedness exceeding
         $400,000,000, in the aggregate, at any one time.

                  (p)      other Liens, including Liens imposed by Environmental
         Laws, arising in the ordinary course of its business which (i) do not
         secure Indebtedness, (ii) do not secure any obligation in an amount
         exceeding $100,000,000 at any time and (iii) do not in the aggregate
         materially detract from the value of its assets or materially impair
         the use thereof in the operation of its business.

         8.3      CONSOLIDATION AND MERGER.

         A Borrower will not, and will not permit any of its Material
Subsidiaries to, (a) enter into any transaction of merger or (b) consolidate,
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); provided that: (i) a Person (including a Subsidiary of a Borrower)
may be merged or consolidated with or into a Borrower so long as (A) such
Borrower shall be the continuing or surviving entity, (B) no Default or Event of
Default shall exist or be caused thereby and (C) such Borrower is not downgraded
by S&P or Moody's as a result of such transaction to a rating below BBB- or
Baa3, as applicable, (ii) a Material Subsidiary may merge with or into another
Subsidiary of a Borrower and (iii) a Corporate Conversion can occur as long as
the Agent receives, on behalf of the Lenders, such documents, instruments,
resolutions and opinions as the Agent may reasonably require to ensure that (A)
each Borrower remains liable for the Borrowers Obligations in accordance with
the terms hereof and (B) all of the rights and remedies of the Lenders under the
Credit Documents remain in full force and effect.

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<PAGE>

         8.4      SALE OR LEASE OF ASSETS.

         During the term of this Credit Agreement, a Borrower will not, directly
or indirectly, convey, sell, lease, transfer or otherwise dispose of assets,
business or operations with an aggregate book value in excess of twenty-five
percent (25%) of its consolidated total assets, as determined in accordance with
GAAP, as calculated as of the end of the most recent fiscal quarter.

         8.5      TRANSACTIONS WITH AFFILIATES.

         A Borrower will not, and will not permit any Material Subsidiary to,
directly or indirectly, pay any funds to or for the account of, make any
investment in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect, any transaction with,
any officer, director, employee or Affiliate (other than a wholly-owned
Subsidiary) unless any and all such transactions between such Borrower and its
Material Subsidiaries on the one hand and any officer, director, employee or
Affiliate (other than a wholly-owned Subsidiary) on the other hand, shall be on
an arms-length basis and on terms no less favorable to such Borrower or such
Material Subsidiary than could have been obtained from a third party who was not
an officer, director, employee or Affiliate (other than a wholly-owned
Subsidiary); provided that the foregoing provisions of this Section shall not
(a) prohibit a Borrower and each Material Subsidiary from declaring or paying
any Restricted Payment or lawful dividend or distribution otherwise permitted
hereunder, (b) prohibit a Borrower or a Material Subsidiary from providing
credit support for its Subsidiaries as it deems appropriate in the ordinary
course of business, (c) prohibit a Borrower or a Material Subsidiary from
engaging in a transaction or transactions that are not on an arms-length basis
or are not on terms as favorable as could have been obtained from a third party,
provided that such transaction or transactions occurs within a related series of
transactions, which, in the aggregate, are on an arms-length basis and are on
terms as favorable as could have been obtained from a third party or (d)
prohibit a Borrower or a Material Subsidiary from engaging in non-material
transactions with any Subsidiary that are not on an arms-length basis or are not
on terms as favorable as could have been obtained from a third party but are in
the ordinary course of such Borrower's or Material Subsidiary's business, so
long as, in each case, after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing.

         8.6      INDEBTEDNESS.

         The Borrowers will not permit the amount of Indebtedness of the
Subsidiaries of the Borrowers (excluding Duke Energy Field Services LLC, if
applicable) to exceed ten percent (10%) of all Indebtedness of the Borrowers and
their Subsidiaries on a consolidated basis.

         8.7      RESTRICTED PAYMENTS.

         The Borrowers will not declare or make, or agree to pay or make,
directly or indirectly any Restricted Payment, except:

                  (a)      Restricted Payments to the parents of the Borrowers
         for federal, state and local income tax obligations payable by either
         such parent (or other members of their affiliated groups) to the extent
         that such obligations are the result of the income of the Borrowers and
         their Subsidiaries being attributed to such Persons for tax purposes.

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<PAGE>

                  (b)      accrued dividends in respect of the Existing
         Preferred Members' Interest, provided that no such Restricted Payment
         shall be declared or paid by the Borrowers if a Default or Event of
         Default has occurred and is continuing or will occur as a result of
         such declaration or payment.

                  (c)      Restricted Payments the aggregate amount of which
         does not exceed Consolidated Net Income, beginning on January 1, 2003,
         calculated at the time of each such Restricted Payment, provided that
         no such Restricted Payment shall be declared or paid by the Borrowers
         if a Default or Event of Default has occurred and is continuing or will
         occur as a result of such declaration or payment.

                  (d)      Restricted Payments consisting of the acquisition of
         existing Capital Stock to the extent necessary to consummate a
         Permitted Refinancing.

                                   SECTION 9.

                                EVENTS OF DEFAULT

         9.1      EVENTS OF DEFAULT.

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

                  (a)      Payment. A Borrower shall: (i) default in the payment
         when due of any principal amount of any of the Loans or of any
         reimbursement obligation arising from drawings under any Letters of
         Credit; or (ii) default, and such default shall continue for five or
         more Business Days, in the payment when due of any interest on the
         Loans or of any fees or other amounts owing hereunder, under any of the
         other Credit Documents or in connection herewith.

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

                  (c)      Covenants. A Borrower shall:

                           (i)      default in the due performance or observance
                  of any term, covenant or agreement contained in Section
                  7.1(e), 7.8, 7.10, 7.11, 8.1, 8.2, 8.3, 8.4, 8.5, 8.6 and 8.7.

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

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<PAGE>

                  aware of such default or (B) notice of such default is given
                  by the Agent or a Lender to either Borrower.

                  (d)      Credit Documents. Any Credit Document shall fail to
         be in full force and effect or a Borrower shall so assert or any Credit
         Document shall fail to give the Agent and/or the Lenders the rights,
         powers and privileges purported to be created thereby.

                  (e)      Bankruptcy, etc. The occurrence of any of the
         following with respect to a Borrower or a Material Subsidiary (i) a
         court or governmental agency having jurisdiction in the premises shall
         enter a decree or order for relief in respect of a Borrower or a
         Material Subsidiary in an involuntary case under any applicable
         bankruptcy, insolvency or other similar law now or hereafter in effect,
         or appoint a receiver, liquidator, assignee, custodian, trustee,
         sequestrator or similar official of a Borrower or a Material Subsidiary
         or for any substantial part of its property or ordering the winding up
         or liquidation of its affairs; or (ii) an involuntary case under any
         applicable bankruptcy, insolvency or other similar law now or hereafter
         in effect is commenced against a Borrower or a Material Subsidiary and
         such petition remains unstayed and in effect for a period of 90
         consecutive days; or (iii) a Borrower or a Material Subsidiary shall
         commence a voluntary case under any applicable bankruptcy, insolvency
         or other similar law now or hereafter in effect, or consent to the
         entry of an order for relief in an involuntary case under any such law,
         or consent to the appointment or taking possession by a receiver,
         liquidator, assignee, custodian, trustee, sequestrator or similar
         official of such Person or any substantial part of its property or make
         any general assignment for the benefit of creditors; or (iv) a Borrower
         or a Material Subsidiary shall admit in writing its inability to pay
         its debts generally as they become due or any action shall be taken by
         such Person in furtherance of any of the aforesaid purposes.

                  (f)      Defaults under Other Agreements. With respect to any
         Indebtedness, including any Off Balance Sheet Indebtedness, in excess
         of $100,000,000 (other than Indebtedness outstanding under this Credit
         Agreement) of a Borrower or any Material Subsidiary, such Borrower or
         such Material Subsidiary shall (A) default in any payment (beyond the
         applicable grace period with respect thereto, if any) with respect to
         any such Indebtedness or fail to timely pay such Indebtedness when due,
         or (B) default (after giving effect to any applicable grace period) in
         the observance or performance of any covenant or agreement relating to
         such Indebtedness or contained in any instrument or agreement
         evidencing, securing or relating thereto, or any other event or
         condition shall occur or condition exist, the effect of which default
         or other event or condition in this clause (B) is to cause any such
         Indebtedness to become due prior to its stated maturity.

                  (g)      Judgments. One or more judgments, orders, or decrees
         shall be entered against a Borrower or a Material Subsidiary involving
         a liability of $50,000,000 or more, in the aggregate, (to the extent
         not paid or covered by insurance provided by a carrier who has
         acknowledged coverage) and such judgments, orders or decrees shall
         continue unsatisfied, undischarged and unstayed for a period ending on
         the first to occur of (i) the last day on which such judgment, order or
         decree becomes final and unappealable and, where applicable, with the
         status of a judicial lien or (ii) 45 days.

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<PAGE>

                  (h)      ERISA. The occurrence of:

                           (i)      any of the following events or conditions
                  which could result in a liability of a Borrower or an ERISA
                  Affiliate of $25,000,000 or more in the aggregate: (A) any
                  "accumulated funding deficiency," as such term is defined in
                  Section 302 of ERISA and Section 412 of the Code, whether or
                  not waived, shall exist with respect to any Plan, or any lien
                  shall arise on the assets of a Borrower or any ERISA Affiliate
                  in favor of the PBGC or a Plan; or (B) any prohibited
                  transaction (within the meaning of Section 406 of ERISA or
                  Section 4975 of the Code) or breach of fiduciary
                  responsibility shall occur which would be reasonably expected
                  to subject a Borrower or any ERISA Affiliate to any liability
                  under Sections 406, 409, 502(i), or 502(l) of ERISA or Section
                  4975 of the Code, or under any agreement or other instrument
                  pursuant to which a Borrower or any ERISA Affiliate has agreed
                  or is required to indemnify any person against any such
                  liability.

                           (ii)     any of the following events or conditions
                  which could result in a liability of a Borrower or an ERISA
                  Affiliate of $50,000,000 or more in the aggregate: (A) a
                  Termination Event shall occur with respect to a Single
                  Employer Plan which is, in the reasonable opinion of the
                  Agent, likely to result in the termination of such Plan for
                  purposes of Title IV of ERISA; or (B) a Termination Event
                  shall occur with respect to a Multiemployer Plan or Multiple
                  Employer Plan which is, in the reasonable opinion of the
                  Agent, likely to result in (x) the termination of such Plan
                  for purposes of Title IV of ERISA, or (y) a Borrower or any
                  ERISA Affiliate incurring any liability in connection with a
                  withdrawal from, reorganization of (within the meaning of
                  Section 4241 of ERISA), or insolvency (within the meaning of
                  Section 4245 of ERISA) of such Plan.

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

         9.2      ACCELERATION; REMEDIES.

         Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the Required Lenders
(or the Lenders as may be required hereunder), the Agent may, with the consent
of the Required Lenders, and shall, upon the request and direction of the
Required Lenders, by written notice to the Borrowers take any of the following
actions without prejudice to the rights of the Agent or any Lender to enforce
its claims against the Borrowers, except as otherwise specifically provided for
herein:

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

                           (ii)     Acceleration of Loans and Letters of Credit.
                  Declare the unpaid principal of and any accrued interest in
                  respect of all Loans, any reimbursement obligations arising
                  from drawings under Letters of Credit and any and all other
                  indebtedness or obligations of any and every kind owing by a
                  Borrower to any of the

                                       52

<PAGE>

                  Lenders hereunder to be due whereupon the same shall be
                  immediately due and payable without presentment, demand,
                  protest or other notice of any kind, all of which are hereby
                  waived by the Borrowers.

                           (iii)    Cash Collateral. Direct the Borrowers to pay
                  (and the Borrowers agree that upon receipt of such notice, or
                  upon the occurrence of an Event of Default under Section
                  9.1(e), it will immediately pay) to the Issuing Lender
                  additional cash, to be held by the Issuing Lender, for the
                  benefit of the Lenders, in a cash collateral account as
                  security for the LOC Obligations in respect of subsequent
                  drawings under all then outstanding Letters of Credit in an
                  amount equal to the maximum aggregate amount which may be
                  drawn under all Letters of Credits then outstanding.

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

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

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

         9.3      ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.

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

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

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

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

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<PAGE>

                  FOURTH, to the payment of the outstanding principal amount of
         the Loans and to the payment or cash collateralization of the
         outstanding LOC Obligations, pro rata, as set forth below;

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

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

In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans and
LOC Obligations held by such Lender bears to the aggregate then outstanding
Loans and LOC Obligations), of amounts available to be applied; and (c) to the
extent that any amounts available for distribution pursuant to clause "FOURTH"
above are attributable to the issued but undrawn amount of outstanding Letters
of Credit, such amounts shall be held by the Agent in a cash collateral account
and applied (i) first, to reimburse the Issuing Lender from time to time for any
drawings under such Letters of Credit and (ii) then, following the expiration of
all Letters of Credit, to all other obligations of the types described in
clauses "FOURTH", "FIFTH" and "SIXTH" above in the manner provided in this
Section 9.3.

                                   SECTION 10.

                                AGENCY PROVISIONS

         10.1     APPOINTMENT.

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

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<PAGE>

Co-Documentation Agent hereunder shall have no obligations in such capacity
under the Credit Documents.

         10.2     DELEGATION OF DUTIES.

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

         10.3     EXCULPATORY PROVISIONS.

         Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents (except for its
or such Person's own gross negligence or willful misconduct), or responsible in
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by a Borrower contained herein or in any of the other Credit
Documents or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection herewith or
in connection with the other Credit Documents, or enforceability or sufficiency
therefor of any of the other Credit Documents, or for any failure of a Borrower
to perform its obligations hereunder or thereunder. The Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Credit Agreement, or any
of the other Credit Documents or for any representations, warranties, recitals
or statements made herein or therein or made by a Borrower in any written or
oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Agent to the Lenders or by or on behalf of a Borrower
to the Agent or any Lender or be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained herein or therein or as to the use of the proceeds of
the Loans or of the existence or possible existence of any Default or Event of
Default or to inspect the properties, books or records of a Borrower. The Agent
is not a trustee for the Lenders and owes no fiduciary duty to the Lenders.

         10.4     RELIANCE ON COMMUNICATIONS.

         The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrowers, independent accountants and other experts
selected by the Agent with reasonable care). The Agent may deem and treat the
Lenders as the owner of its interests hereunder for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Agent in accordance with Section 11.3(b). The Agent shall be
fully justified in failing or refusing to take any action under this Credit
Agreement or under any of the other Credit Documents unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first

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<PAGE>

be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder or under any of the other Credit
Documents in accordance with a request of the Required Lenders (or to the extent
specifically provided in Section 11.6, all the Lenders) and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders (including their successors and assigns).

         10.5     NOTICE OF DEFAULT.

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

         10.6     NON-RELIANCE ON AGENT AND OTHER LENDERS.

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

         10.7     INDEMNIFICATION.

         Each Lender agrees to indemnify the Agent (including for purposes of
this Section 10.7 the Agent in its capacity as Issuing Lender) in its capacity
as such (to the extent not reimbursed by the Borrowers and without limiting the
obligation of the Borrowers to do so), ratably according to its Commitment
Percentage, from and against any and all liabilities, obligations, losses,
damages,

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<PAGE>

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

         10.8     AGENT IN ITS INDIVIDUAL CAPACITY.

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

         10.9     SUCCESSOR AGENT.

         The Agent may, at any time, resign upon 30 days written notice to the
Lenders and the Borrowers. Upon any such resignation, the Borrowers with the
consent of the Required Lenders (such consent of the Required Lenders not to be
unreasonably withheld or delayed) shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed and shall have
accepted such appointment within 30 days after the notice of resignation, then
the retiring Agent shall select a successor Agent provided such successor is a
Lender hereunder or qualifies as an Eligible Assignee (or if no Eligible
Assignee shall have been so appointed by the retiring Agent and shall have
accepted such appointment, then the Lenders shall perform all obligations of the
retiring Agent hereunder until such time, if any, as a successor Agent shall
have been appointed and shall have accepted such appointment as provided for
above). Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations as Agent,
as appropriate, under this Credit Agreement and the other Credit Documents and
the provisions of this Section 10.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Credit
Agreement.

                                       57

<PAGE>

                                   SECTION 11.

                                  MISCELLANEOUS

         11.1     NOTICES.

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

         11.2     RIGHT OF SET-OFF.

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

         11.3     BENEFIT OF AGREEMENT.

                  (a)      Generally. This Credit Agreement shall be binding
         upon and inure to the benefit of and be enforceable by the respective
         successors and assigns of the parties hereto; provided that, except as
         set forth in Section 2.10, a Borrower may not assign and transfer any
         of its interests without the prior written consent of the Lenders; and
         provided further that the rights of each Lender to transfer, assign or
         grant participations in its rights and/or obligations hereunder shall
         be limited as set forth below in this Section 11.3.

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

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

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<PAGE>

                           (ii)     except in the case of an assignment to
                  another Lender or an assignment of all of a Lender's rights
                  and obligations under this Credit Agreement, any such partial
                  assignment shall be in an amount at least equal to $10,000,000
                  (or, if less, the remaining amount of the Commitment being
                  assigned by such Lender) and an integral multiple of
                  $1,000,000 in excess thereof; and

                           (iii)    the parties to such assignment shall execute
                  and deliver to the Agent for its acceptance an Assignment
                  Agreement in substantially the form of Exhibit 11.3(b),
                  together with a processing fee from the assignor of $3,500.

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

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

                                       59

<PAGE>

agrees that it will perform in accordance with their terms all the obligations
which by the terms of this Credit Agreement and the other Credit Documents are
required to be performed by it as a Lender.

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

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

                  (e)      Participations. Each Lender may sell participations
         to one or more Persons in all or a portion of its rights, obligations
         or rights and obligations under this Credit Agreement (including all or
         a portion of its Commitment, its Notes and its Loans); provided,
         however, that (i) such Lender's obligations under this Credit Agreement
         shall remain unchanged, (ii) such Lender shall remain solely
         responsible to the other parties hereto for the performance of such
         obligations, (iii) the participant shall be entitled to the benefit of
         the yield protection provisions contained in Sections 4.1 through 4.4,
         inclusive, but shall not be entitled to receive any amount greater than
         such Lender would have been able to receive, and (iv) the Borrowers
         shall continue to deal solely and directly with such Lender in
         connection with such Lender's rights and obligations under this Credit
         Agreement, and such Lender shall retain the sole right to enforce the
         obligations of the Borrowers relating to its Loans and its Notes and to
         approve any amendment, modification, or waiver of any provision of this
         Credit Agreement (other than amendments, modifications, or waivers
         decreasing the amount of principal of or the rate at which interest is
         payable on such Loans or Notes, extending any scheduled principal
         payment date or date fixed for the payment of interest on such Loans or
         Notes, or extending its Commitment).

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

                                       60

<PAGE>

                  (g)      Information. Subject to Section 11.17, any Lender may
         furnish any information concerning the Borrowers in the possession of
         such Lender from time to time to assignees and participants (including
         prospective assignees and participants).

         11.4     NO WAIVER; REMEDIES CUMULATIVE.

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

         11.5     PAYMENT OF EXPENSES, ETC.

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

                                       61

<PAGE>

         11.6     AMENDMENTS, WAIVERS AND CONSENTS.

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

                  (a)      extend the Maturity Date or the Term Out Maturity
         Date, or postpone or extend the time for any payment or prepayment of
         principal (except pursuant to Section 3.3(b)) or the time of payment of
         any reimbursement obligation, or any portion thereof, arising from
         drawings under Letters of Credit;

                  (b)      reduce the rate or extend the time of payment of
         interest thereon or fees or other amounts payable hereunder;

                  (c)      reduce or waive the principal amount of any Loan or
         of any reimbursement obligation, or any portion thereof, arising from
         drawings under Letters of Credit;

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

                  (e)      except as permitted by Section 2.10, consent to the
         assignment or transfer by a Borrower of any of its rights and
         obligations under (or in respect of) the Credit Documents or release a
         Borrower from its obligations under the Credit Documents;

                  (f)      amend, modify or waive any provision of this Section
         11.6 or Section 3.6, 3.8, 5.2, 9.1(a), 11.2, 11.3 or 11.5; or

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

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

Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any reorganization plan that affects the Loans or the
Letters of Credit, and each Lender acknowledges that the provisions of Section
1126(c) of the Bankruptcy Code supersede the unanimous consent provisions set
forth herein and (y) the Required Lenders may consent to allow the Borrowers to
use cash collateral in the context of a bankruptcy or insolvency proceeding.

         11.7     COUNTERPARTS/TELECOPY.

         This Credit Agreement may be executed in any number of counterparts,
each of which where so executed and delivered shall be an original, but all of
which shall constitute one and the

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<PAGE>

same instrument. Delivery of executed counterparts by telecopy shall be as
effective as an original and shall constitute a representation that an original
will be delivered.

         11.8     HEADINGS.

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

         11.9     DEFAULTING LENDER.

         Each Lender understands and agrees that if such Lender is a Defaulting
Lender then it shall not be entitled to vote on any matter requiring the consent
of the Required Lenders or to object to any matter requiring the consent of all
the Lenders; provided, however, that (a) a Lender's Commitment may not be
increased without its consent whether or not it is a Defaulting Lender and (b)
all other benefits and obligations under the Loan Documents shall apply to such
Defaulting Lender.

         11.10    SURVIVAL OF INDEMNIFICATION AND REPRESENTATIONS AND
                  WARRANTIES.

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

         11.11    GOVERNING LAW; VENUE.

                  (a)      THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS
         AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
         SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
         THE LAWS OF THE STATE OF NEW YORK. Any legal action or proceeding with
         respect to this Credit Agreement or any other Credit Document may be
         brought in the courts of the State of New York, or of the United States
         for the Southern District of New York, and, by execution and delivery
         of this Credit Agreement, each Borrower hereby irrevocably accepts for
         itself and in respect of its property, generally and unconditionally,
         the jurisdiction of such courts. Each Borrower further irrevocably
         consents to the service of process out of any of the aforementioned
         courts in any such action or proceeding by the mailing of copies
         thereof by registered or certified mail, postage prepaid, to it at the
         address for notices pursuant to Section 11.1, such service to become
         effective 30 days after such mailing. Nothing herein shall affect the
         right of a Lender to serve process in any other manner permitted by law
         or to commence legal proceedings or to otherwise proceed against a
         Borrower in any other jurisdiction.

                  (b)      Each Borrower hereby irrevocably waives any objection
         which it may now or hereafter have to the laying of venue of any of the
         aforesaid actions or proceedings arising out of or in connection with
         this Credit Agreement or any other Credit Document brought in the
         courts referred to in subsection (a) hereof and hereby further
         irrevocably

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<PAGE>

         waives and agrees not to plead or claim in any such court that any such
         action or proceeding brought in any such court has been brought in an
         inconvenient forum.

         11.12    WAIVER OF JURY TRIAL; WAIVER OF CONSEQUENTIAL DAMAGES.

         EACH OF THE PARTIES TO THIS CREDIT AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY. Each Borrower agrees not to assert any
claim against the Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys or agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to any of the transactions contemplated hereby or by
the other Credit Documents.

         11.13    SEVERABILITY.

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

         11.14    FURTHER ASSURANCES.

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

         11.15    ENTIRETY.

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

         11.16    BINDING EFFECT; CONTINUING AGREEMENT.

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

                  (b)      This Credit Agreement shall be a continuing agreement
         and shall remain in full force and effect until all Loans, LOC
         Obligations, interest, fees and other Borrowers Obligations have been
         paid in full and all Commitments and Letters of Credit have been
         terminated. Upon such termination, the Borrowers shall have no further
         obligations (other than those provisions that expressly survive the
         termination thereof) under the Credit

                                       64

<PAGE>

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

         11.17    CONFIDENTIALITY.

         The Agent and each Lender will keep any information delivered or made
available by the Borrowers pursuant to this Credit Agreement confidential from
anyone other than persons employed or retained by the Agent or such Lender and
its Affiliates who are engaged in evaluating, approving, structuring or
administering this Credit Agreement; provided that the Agent and the Lenders
shall be entitled to disclose such information (a) to any other Lender or to the
Agent, (b) upon the order of any court or administrative agency, (c) upon the
request or demand of any regulatory agency or authority, (d) which had been
publicly disclosed other than as a result of a disclosure by the Agent or any
Lender prohibited by this Agreement, (e) in connection with any litigation to
which the Agent, any Lender or its subsidiaries or parent may be a party, (f) to
the extent necessary in connection with the exercise of any remedy under this
Agreement, (g) to such Lender's or Agent's legal counsel and independent
auditors and (h) subject to provisions substantially similar to this Section
11.17, to any actual or proposed participant or assignee.

         Notwithstanding the foregoing provisions of this Section 11.17, the
Borrower, the Agent and each Lender (each a "PARTY") (and each of their
respective, and their respective affiliates', employees, officers, directors,
representatives, advisors and agents) may disclose to any and all Persons,
without limitation of any kind, the structure and tax aspects (as such terms are
used in Sections 6011, 6111 and 6112 of the Code and the regulations promulgated
thereunder) of this Credit Agreement and the transactions contemplated hereby
(the "TAX RELATED INFORMATION") and all materials of any kind (including
opinions or other tax analyses) provided to any Party with respect to the Tax
Related Information, other than any information for which nondisclosure is
reasonably necessary in order to comply with applicable securities laws. The
Parties acknowledge and agree that the disclosure of the Tax Related Information
is not limited in any way by an express or implied understanding or agreement,
oral or written (whether or not such understanding or agreement is legally
binding). Furthermore, each Party acknowledges and agrees that it does not know
or have reason to know that its use or disclosure of the Tax Related Information
is limited in any other manner (such as where the Tax Related Information is
claimed to be proprietary or exclusive) for the benefit of any other Person. The
provisions of this paragraph supersede any confidentiality obligation of the
Parties relating to the Tax Related Information under any other agreement
between or among one or more of the Parties hereto, and the Parties agree that
any such confidentiality obligation shall be deemed void ab initio; provided,
that each Party recognizes that the privilege each has to maintain, in its sole
discretion, the confidentiality of a communication relating to the Tax Related
Information, including a confidential communication with its attorney or a
confidential communication with a federally authorized tax practitioner under
Section 7525 of the Internal Revenue Code, is not intended to be affected by the
foregoing.

                                       65

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                                       66

<PAGE>

     Signature Page to Duke Energy Field Services 364-Day Credit Agreement

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

BORROWERS:
                                        DUKE ENERGY FIELD SERVICES, LLC,
                                          a Delaware limited liability company

                                        By:  /s/ Thomas E. Long
                                            ------------------------------------
                                            Name:  Thomas E. Long
                                            Title: Vice President and Treasurer

                                        DUKE ENERGY FIELD SERVICES CORPORATION,
                                          a Delaware corporation

                                        By:  /s/ Thomas E. Long
                                            ------------------------------------
                                            Name:  Thomas E. Long
                                            Title: Vice President and Treasurer

<PAGE>

      Signature Page to Duke Energy Field Services 364-Day Credit Agreement

LENDERS:
                                        JPMORGAN CHASE BANK, individually in its
                                          capacity as a Lender and in its
                                          capacity as Agent

                                        By:  /s/ Thomas T. Hou
                                            ------------------------------------
                                            Name:  Thomas T. Hou
                                            Title: Vice President

<PAGE>

      Signature Page to Duke Energy Field Services 364-Day Credit Agreement

                                        ABN AMRO BANK N.V.

                                        By:  /s/ John J. Mack
                                            ------------------------------------
                                            Name:  John J. Mack
                                            Title: Senior Vice President

<PAGE>

      Signature Page to Duke Energy Field Services 364-Day Credit Agreement

                                        THE BANK OF NOVA SCOTIA

                                        By:  /s/ A. S. Norsworthy
                                            ------------------------------------
                                            Name:  A. S. Norsworthy
                                            Title: Senior Manager

<PAGE>

      Signature Page to Duke Energy Field Services 364-Day Credit Agreement

                                        BANK OF TOKYO-MITSUBISHI TRUST COMPANY

                                        By:  /s/ J. William Rhodes
                                            ------------------------------------
                                            Name:  J. William Rhodes
                                            Title: Vice President

<PAGE>

      Signature Page to Duke Energy Field Services 364-Day Credit Agreement

                                        BANK ONE, N.A. (MAIN OFFICE - CHICAGO)

                                        By:  /s/ George R. Schanz
                                            ------------------------------------
                                            Name:  George R. Schanz
                                            Title: Managing Director

<PAGE>

      Signature Page to Duke Energy Field Services 364-Day Credit Agreement

                                        CITIBANK

                                        By:  /s/ J. Nicholas McKee
                                            ------------------------------------
                                            Name:  J. Nicholas McKee
                                            Title: Managing Director

<PAGE>

      Signature Page to Duke Energy Field Services 364-Day Credit Agreement

                                        CREDIT SUISSE FIRST BOSTON

                                        By:  /s/ Brian T. Caldwell
                                            ------------------------------------
                                            Name:  Brian T. Caldwell
                                            Title: Director

                                        By:  /s/ Thomas R. Cantello
                                            ------------------------------------
                                            Name:  Thomas R. Cantello
                                            Title: Vice President

<PAGE>

      Signature Page to Duke Energy Field Services 364-Day Credit Agreement

                                        THE ROYAL BANK OF SCOTLAND PLC

                                        By:  /s/ Keith Johnson
                                            ------------------------------------
                                            Name:  Keith Johnson
                                            Title: Senior Vice President

<PAGE>

      Signature Page to Duke Energy Field Services 364-Day Credit Agreement

                                        SUNTRUST BANK

                                        By:  /s/ Joseph M. McCreery
                                            ------------------------------------
                                            Name:  Joseph M. McCreey
                                            Title: Vice President

<PAGE>

      Signature Page to Duke Energy Field Services 364-Day Credit Agreement

                                        UBS AG, CAYMAN ISLANDS BRANCH

                                        By:  /s/ Wilfred V. Saint
                                            ------------------------------------
                                            Name:  Wilfred V. Saint
                                            Title: Associate Director

                                        By:  /s/ Thomas R. Salzano
                                            ------------------------------------
                                            Name:  Thomas R. Salzano
                                            Title: Director

<PAGE>

      Signature Page to Duke Energy Field Services 364-Day Credit Agreement

                                        WACHOVIA BANK, N.A.

                                        By:  /s/ Rotcher Watkins
                                            ------------------------------------
                                            Name:  Rotcher Watkins
                                            Title: Managing Director

<PAGE>

      Signature Page to Duke Energy Field Services 364-Day Credit Agreement

                                        WELLS FARGO BANK, N.A.

                                        By:  /s/ Todd Stornetta
                                            ------------------------------------
                                            Name:  Todd Stornetta
                                            Title: Vice President