EXECUTION COPY







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                                CREDIT AGREEMENT

                                   dated as of
                                FEBRUARY 21, 2002

                                      AMONG

                      KINDER MORGAN ENERGY PARTNERS, L.P.,
                                 as the Company,



                            THE LENDERS PARTY HERETO,



                              JPMORGAN CHASE BANK,
                            as Administrative Agent,



                           FIRST UNION NATIONAL BANK,
                              as Syndication Agent,

                                       and

                       GOLDMAN SACHS CREDIT PARTNERS L.P.,
                             as Documentation Agent



                           J.P. MORGAN SECURITIES INC.
                                       and
                          FIRST UNION SECURITIES, INC.,
                   as Co-Lead Arrangers and Joint Book Runners




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<PAGE>


                                TABLE OF CONTENTS

                                                                            Page


ARTICLE I. DEFINITIONS.......................................................1

     SECTION 1.01  Defined Terms.............................................1

     SECTION 1.02  Classification of Loans and Borrowings...................19

     SECTION 1.03  Accounting Terms; Changes in GAAP........................19

     SECTION 1.04  Interpretation...........................................19


ARTICLE II. THE CREDITS.....................................................20

     SECTION 2.01  Commitments..............................................20

     SECTION 2.02  Loans and Borrowings.....................................21

     SECTION 2.03  Requests for Revolving Borrowings........................21

     SECTION 2.04  Telephonic Notices.......................................22

     SECTION 2.05  Funding of Borrowings....................................22

     SECTION 2.06  Interest Elections.......................................23

     SECTION 2.07  Optional and Mandatory Termination and Reduction of
                   Commitments..............................................24

     SECTION 2.08  Repayment of Loans; Evidence of Debt.....................25

     SECTION 2.09  Optional and Mandatory Prepayment of Loans...............26

     SECTION 2.10  Fees.....................................................26

     SECTION 2.11  Interest.................................................27

     SECTION 2.12  Alternate Rate of Interest...............................28

     SECTION 2.13  Increased Costs..........................................28

     SECTION 2.14  Break Funding Payments...................................29

     SECTION 2.15  Taxes....................................................30

     SECTION 2.16  Payments Generally; Pro Rata Treatment; Sharing of
                   Set-offs.................................................31

     SECTION 2.17  Mitigation Obligations; Replacement of Lenders...........32


ARTICLE III. CONDITIONS PRECEDENT...........................................33

     SECTION 3.01  Conditions Precedent to the Initial Borrowing............33

     SECTION 3.02  Conditions Precedent to All Borrowings...................34

     SECTION 3.03  Delivery of Documents....................................35


ARTICLE IV. REPRESENTATIONS AND WARRANTIES..................................35

     SECTION 4.01  Organization and Qualification...........................35


                                       i
<PAGE>


     SECTION 4.02  Authorization, Validity, Etc.............................35

     SECTION 4.03  Governmental Consents, Etc...............................36

     SECTION 4.04  Conflicting or Adverse Agreements or Restrictions........36

     SECTION 4.05  Properties...............................................36

     SECTION 4.06  Litigation and Environmental Matters.....................37

     SECTION 4.07  Financial Statements.....................................37

     SECTION 4.08  Disclosure...............................................38

     SECTION 4.09  Investment Company Act...................................38

     SECTION 4.10  Public Utility Holding Company Act.......................38

     SECTION 4.11  ERISA....................................................38

     SECTION 4.12  Tax Returns and Payments.................................38

     SECTION 4.13  Compliance with Laws and Agreements......................39

     SECTION 4.14  Purpose of Loans.........................................39


ARTICLE V. AFFIRMATIVE COVENANTS............................................39

     SECTION 5.01  Financial Statements and Other Information...............39

     SECTION 5.02  Litigation...............................................41

     SECTION 5.03  Existence, Conduct of Business...........................42

     SECTION 5.04  Payment of Obligations...................................42

     SECTION 5.05  Maintenance of Properties; Insurance.....................42

     SECTION 5.06  Books and Records; Inspection Rights.....................42

     SECTION 5.07  Compliance with Laws.....................................42

     SECTION 5.08  Use of Proceeds..........................................42

     SECTION 5.09  Further Assurances.......................................43

     SECTION 5.10  Performance of Obligations...............................43

     SECTION 5.11  Lines of Business........................................43

     SECTION 5.12  Intercompany Notes.......................................43


ARTICLE VI. NEGATIVE COVENANTS..............................................43

     SECTION 6.01  Indebtedness.............................................43

     SECTION 6.02  Liens....................................................44

     SECTION 6.03  Fundamental Changes......................................45

     SECTION 6.04  Restricted Payments......................................45

     SECTION 6.05  Transactions with Affiliates.............................45

     SECTION 6.06  Restrictive Agreements...................................46


                                       ii
<PAGE>


     SECTION 6.07  Financial Covenants......................................46

     SECTION 6.08  Amendments to Certain Agreements.........................47


ARTICLE VII. EVENTS OF DEFAULT..............................................47

     SECTION 7.01  Events of Default and Remedies...........................47

     SECTION 7.02  Other Remedies...........................................49

     SECTION 7.03  Application of Moneys During Continuation of Event of
                   Default..................................................50


ARTICLE VIII. THE ADMINISTRATIVE AGENT......................................50

     SECTION 8.01  Appointment, Powers and Immunities.......................50

     SECTION 8.02  Reliance by Administrative Agent.........................51

     SECTION 8.03  Defaults; Events of Default..............................51

     SECTION 8.04  Rights as a Lender.......................................51

     SECTION 8.05  INDEMNIFICATION..........................................52

     SECTION 8.06  Non-Reliance on Agents and other Lenders.................52

     SECTION 8.07  Action by Administrative Agent...........................53

     SECTION 8.08  Resignation or Removal of Administrative Agent...........53

     SECTION 8.09  Duties of Syndication Agent and Documentation Agent......53


ARTICLE IX. MISCELLANEOUS...................................................54

     SECTION 9.01  Notices, Etc.............................................54

     SECTION 9.02  Waivers; Amendments......................................55

     SECTION 9.03  Payment of Expenses, Indemnities, etc....................56

     SECTION 9.04  Successors and Assigns...................................58

     SECTION 9.05  Assignments and Participations...........................58

     SECTION 9.06  Survival; Reinstatement..................................60

     SECTION 9.07  Counterparts; Integration; Effectiveness.................61

     SECTION 9.08  Severability.............................................61

     SECTION 9.09  Right of Setoff..........................................61

     SECTION 9.10  Governing Law; Jurisdiction; Consent to Service of
                   Process..................................................62

     SECTION 9.11  WAIVER OF JURY TRIAL.....................................63

     SECTION 9.12  Confidentiality..........................................63

     SECTION 9.13  Interest Rate Limitation.................................64

     SECTION 9.14  EXCULPATION PROVISIONS...................................64




                                      iii
<PAGE>



SCHEDULES:
---------

Schedule 2.01   Commitments
Schedule 4.06   Disclosed Matters
Schedule 6.02   Existing Liens
Schedule 6.06   Existing Restrictions

EXHIBITS:
--------

Exhibit 1.01A   Form of Administrative Questionnaire
Exhibit 1.01B   Form of Assignment and Acceptance
Exhibit 1.01C   Form of Revolving Note
Exhibit 2.03    Form of Borrowing Request
Exhibit 2.05    Form of Notice of Account Designation
Exhibit 2.06    Form of Interest Election Request
Exhibit 2.09    Form of Notice of Prepayment
Exhibit 5.01    Form of Compliance Certificate



                                       iv
<PAGE>


                                CREDIT AGREEMENT

      THIS CREDIT AGREEMENT, dated as of February 21, 2002 (this "Agreement") is
among:

      (a)  Kinder Morgan Energy Partners,  L.P., a Delaware limited  partnership
(the "Company");

      (b) the banks and other  financial  institutions  listed on the  signature
pages hereof under the caption  "Lenders"  (together with each other Person that
becomes a Lender pursuant to Section 9.05, collectively, the "Lenders");

      (c) JPMorgan Chase Bank, a New York banking corporation, individually as a
Lender and as the administrative  agent for the Lenders (in such latter capacity
together  with any other Person that becomes  Administrative  Agent  pursuant to
Section 8.08, the "Administrative Agent");

      (d)  First   Union   National   Bank,   as  the  Syndication  Agent   (the
"Syndication Agent"); and

      (e)  Goldman Sachs Credit Partners L.P.,  as  the Documentation Agent (the
"Documentation Agent").

                             PRELIMINARY STATEMENTS

      The  Company  has  requested  that a credit  facility  be  extended  to it
pursuant to which:  the Company  may borrow from the Lenders (a)  initially,  to
finance the acquisition of Tejas Gas L.L.C., and to back commercial paper issued
for such  acquisition,  and (b)  subsequent  to such  acquisition,  for  general
partnership purposes.

      NOW, THEREFORE, the parties hereto agree as follows:

                                   ARTICLE I.
                                   DEFINITIONS
                                   -----------

      SECTION 1.01 Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:

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

      "Administrative  Agent" has the meaning  specified in the  introduction to
this Agreement.

      "Administrative  Questionnaire"  means an Administrative  Questionnaire in
the form of Exhibit 1.01A.



<PAGE>


      "Affiliate" of any Person shall mean (i) any Person directly or indirectly
controlled by, controlling or under common control with such first Person,  (ii)
any  director  or officer of such first  Person or of any Person  referred to in
clause (i) above and (iii) if any  Person in clause (i) above is an  individual,
any member of the immediate  family  (including  parents,  siblings,  spouse and
children) of such individual and any trust whose  principal  beneficiary is such
individual or one or more members of such immediate family and any Person who is
controlled  by any such member or trust.  For purposes of this  definition,  any
Person that owns directly or  indirectly  25% or more of the  securities  having
ordinary voting power for the election of directors or other governing body of a
corporation or 25% or more of the  partnership or other  ownership  interests of
any other Person (other than as a limited  partner of such other Person) will be
deemed to "control" (including,  with its correlative meanings,  "controlled by"
and "under common control with") such corporation or other Person.

      "Aggregate Commitments" means at any time and from time to time the sum of
(a) the Total  Commitment  under this Agreement,  plus (b) the Total  Commitment
under  and as  defined  in the  Existing  Credit  Agreement,  plus (c) the Total
Commitment under and as defined in the Related Credit Agreement, in each case at
such time.

      "Aggregate  Credit  Exposures" means at any time and from time to time the
sum of (a) the total Revolving Credit Exposures of the Lenders  hereunder,  plus
(b) plus the  total  Revolving  Credit  Exposures  of the  Lenders  under and as
defined  in the  Existing  Credit  Agreement,  plus (c) the sum of (i) the total
Revolving  Credit Exposures under and as defined in the Related Credit Agreement
and (ii) the principal amount of all Competitive  Loans outstanding under and as
defined in the Related Credit Agreement, in each case at such time.

      "Agreement"  has  the  meaning  specified  in  the  introduction  to  this
Agreement (subject, however, to Section 1.04(v) hereof).

      "Alternate  Base Rate"  means,  for any day, a rate per annum equal to the
greater of (a) the Federal Funds  Effective  Rate in effect on such day plus 1/2
of 1% and (b) the Prime Rate in effect for such day. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds  Effective Rate
shall be effective  from and including the effective  date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.

      "Applicable  Margin" means at any time and from time to time, a percentage
per  annum  equal  to  the  applicable   percentage  set  forth  below  for  the
corresponding Performance Level set forth below:

                    -------------------------------------
                      Performance       LIBOR Borrowings
                         Level          Margin Percentage
                    -------------------------------------
                          I                   .415%
                    -------------------------------------
                         II                   .525%
                    -------------------------------------
                         III                  .625%
                    -------------------------------------
                         IV                   .825%
                    -------------------------------------
                          V                  1.050%
                    -------------------------------------


                                       2
<PAGE>


The Applicable  Margin shall be determined by reference to the Performance Level
in effect from time to time.

      "Applicable  Percentage" means, with respect to any Lender, the percentage
of the Total Commitment  represented by such Lender's  Commitment.  If the Total
Commitment  has  terminated  or expired,  the  Applicable  Percentages  shall be
determined  based upon the Total  Commitment  most  recently  in effect,  giving
effect to any assignments.

      "Assignment  and  Acceptance"  means an assignment and acceptance  entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.05), and accepted by the Administrative Agent, in the form
of Exhibit 1.01B or any other form approved by the Administrative Agent.

      "Available Cash" means,  with respect to any fiscal quarter of the Company
(a "Test Quarter"), an amount equal to the algebraic sum of (a) the aggregate of
all cash  distributions  actually  made to and  received by the Company from the
Subsidiaries  in respect of their Capital Stock during such fiscal quarter minus
(b) the aggregate amount of all cash disbursements,  including disbursements for
operating  expenses,  payments of principal of and interest on Indebtedness  and
taxes  (net of  amounts  received  or to be  received  by the  Company  from the
Subsidiaries as reimbursement for such amounts),  and capital  expenditures (net
of any borrowings to fund such capital  expenditures  permitted pursuant to this
Agreement),  actually paid by the Company during such Test Quarter, plus, in the
case of a  decrease,  or minus,  in the case of an  increase  (c) the  amount by
which,  as at the end of such  Test  Quarter,  cash  reserves  necessary  in the
reasonable  discretion of the Company's management for the proper conduct of the
business of the Company and the  Subsidiaries  subsequent  to such Test Quarter,
decreased  or  increased  from the amount of such  reserves as at the end of the
immediately preceding fiscal quarter.

      "Availability  Period"  means the period from and  including the Effective
Date,  to but  excluding  the  earlier of the  Termination  Date and the date of
termination of the Commitments.

      "Board" means the Board of Governors of the Federal  Reserve System of the
United States of America.

      "Board of  Directors"  means,  with  respect to any  Person,  the Board of
Directors  of such Person or any  committee  of the Board of  Directors  of such
Person  duly  authorized  to act on  behalf of the  Board of  Directors  of such
Person.

      "Board  Resolution"  means,  with  respect  to any  Person,  a  copy  of a
resolution  certified by the Secretary or an Assistant  Secretary of such Person
to have been duly  adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such  certification,  and  delivered to the
Administrative Agent.

      "Bonds"   means  the  Port   Facility   Refunding   Revenue  Bonds  (Enron
Transportation  Services,  L.P. Project) Series 1994 in the aggregate  principal
amount of $23,700,000,  as issued by the  Jackson-Union  Counties  Regional Port
District.

      "Borrowing" means a Revolving Borrowing.


                                       3
<PAGE>


      "Borrowing  Date" means the Business Day upon which any Loan is to be made
available to the Company.

      "Borrowing Request" has the meaning specified in Section 2.03.

      "Business  Day" means any day that is not a Saturday,  Sunday or other day
on  which  commercial  banks  in  Houston,  Texas,  or New  York,  New  York are
authorized  or required by law to remain  closed;  provided  that,  when used in
connection  with a Eurodollar  Loan,  the term "Business Day" shall also exclude
any day on which  banks  are not open for  dealings  in dollar  deposits  in the
London interbank market.

      "Capital Lease  Obligations"  of any Person means the  obligations of such
Person to pay rent or other  amounts  under  any lease of (or other  arrangement
conveying the right to use) real or personal property, or a combination thereof,
which  obligations  are required to be  classified  and accounted for as capital
leases on a balance  sheet of such  Person  under  GAAP,  and the amount of such
obligations  shall be the  capitalized  amount thereof  determined in accordance
with GAAP.

      "Capital  Stock"  means,  with respect to any Person,  any and all shares,
interests,  rights  to  purchase,  warrants,  options,  participations  or other
equivalents (however  designated) of such Person's equity,  including all common
stock and preferred stock, any limited or general  partnership  interest and any
limited liability company membership.

      "Change in Control" means either (a) the  acquisition  through  beneficial
ownership or otherwise after the date hereof by any person (as such term is used
in section  13(d) and section  14(d)(2) of the  Exchange Act as in effect on the
date hereof) or related  persons  constituting  a group (as such term is used in
Rule 13d-5 under the Exchange Act as in effect on the date hereof) of 30% of the
Voting Stock of the General Partner; or (b) individuals who, at the beginning of
any period of 12 consecutive  months,  constitute the General Partner's board of
directors  cease for any reason (other than death or disability) to constitute a
majority of the General Partner's board of directors then in office.

      "Change in Control Event" means the execution of any definitive  agreement
which, when fully performed by the parties thereto,  would result in a Change in
Control.

      "Change  in Law" means (a) the  adoption  of any law,  rule or  regulation
after the date of this Agreement,  (b) any change in any law, rule or regulation
or in the  interpretation or application  thereof by any Governmental  Authority
after the date of this  Agreement  or (c)  compliance  by any  Lender  (or,  for
purposes of Section  2.13(b),  by any  lending  office of such Lender or by such
Lender's  holding  company,  if any) with any  request,  guideline  or directive
(whether or not having the force of law) of any  Governmental  Authority made or
issued after the date of this  Agreement.  In addition to (and  notwithstanding)
the foregoing,  and regardless of whether the subject  Capital  Requirement  (as
below  defined)  was  adopted  or changed  before,  on or after the date of this
Agreement,  if any  Lender  (or its  applicable  lending  office or its  holding
company, as the case may be) shall be, or shall determine itself to be, required
by any law, rule,  regulation,  request,  guideline or directive (whether or not
having the force of law) relating to capital  requirements or any interpretation
or application of any thereof by any Governmental


                                       4
<PAGE>


Authority  (each, a "Capital  Requirement") to maintain (and in either such case
such Lender, lending office or holding company, as the case may be, does in fact
maintain)  capital  against  such  Lender's  unused  Commitment  (or any portion
thereof),  in  whole  or in  part as a  result  of such  unused  Commitment  (or
portion),  either alone or in combination  with any proposed or agreed extension
thereof  (whether  or not  such  extension  shall  by its  terms  at the time be
effective),  extending  or being  deemed to extend for a period of more than one
year from its inception or to have an original maturity of more than one year or
otherwise  to last for a period of time  sufficient  to require  maintenance  of
capital  against  it, a "Change  in Law"  shall be deemed to have  occurred  for
purposes of Section 2.13(b) with respect to such Capital Requirement.

      "Charges" has the meaning specified in Section 9.13.

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

      "Commitment"  means,  with respect to each Lender,  the commitment of such
Lender to make Revolving Loans  hereunder,  expressed as an amount  representing
the  maximum  aggregate  amount  of  such  Lender's  Revolving  Credit  Exposure
hereunder,  as such  commitment may be (a) reduced from time to time pursuant to
Section  2.07  and (b)  reduced  or  increased  from  time to time  pursuant  to
assignments by or to such Lender pursuant to Section 9.05. The initial amount of
each Lender's  Commitment is set forth on Schedule 2.01 attached  hereto,  or in
the Assignment  and Acceptance  pursuant to which such Lender shall have assumed
its Commitment, as applicable.

      "Communications" has the meaning specified in Section 9.01.

      "Company" has the meaning specified in the introduction to this Agreement.

      "Company Debt Rating" means, with respect to the Company as of any date of
determination, the rating that has been most recently announced by either S&P or
Moody's,  as the case may be, for any non-credit  enhanced,  unsecured long-term
senior  debt  issued  or to be  issued  by  the  Company.  For  purposes  of the
foregoing:

      (a) if only one of S&P and  Moody's  shall  have in effect a Company  Debt
Rating,  the  Applicable  Margin or the Facility  Fee Rate,  as the case may be,
shall be determined by reference to the available rating;

      (b) if,  at any  time,  neither  S&P nor  Moody's  shall  have in effect a
Company Debt Rating, the Applicable Margin or the Facility Fee Rate, as the case
may be, shall be set in accordance with Performance Level V under the definition
of "Applicable Margin" or "Facility Fee Rate," as the case may be;

      (c) if the  ratings  established  by S&P and  Moody's  shall  fall  within
different Performance Levels, the Applicable Margin or the Facility Fee Rate, as
the case may be, shall be based upon the higher rating; provided, however, that,
if the lower of such ratings is two or more Performance  Levels below the higher
of such ratings, the Applicable Margin or the Facility Fee Rate, as the case may
be, shall be based upon the rating that is one Performance Level above the lower
rating;


                                       5
<PAGE>


      (d) if any rating  established  by S&P or Moody's  shall be changed,  such
change  shall be  effective  as of the date on which  such  change is  announced
publicly by the rating agency making such change; and

      (e) if S&P or  Moody's  shall  change  the  basis  on  which  ratings  are
established by it, each reference to the Company Debt Rating announced by S&P or
Moody's shall refer to the then equivalent rating by S&P or Moody's, as the case
may be.

      "Consolidated EBITDA" means, for any period, the EBITDA of the Company and
the  Subsidiaries  for  such  period  determined  on  a  consolidated  basis  in
accordance with GAAP.

      "Consolidated  Indebtedness"  means,  at the  date  of  any  determination
thereof,  Indebtedness  of the  Company  and the  Subsidiaries  determined  on a
consolidated basis in accordance with GAAP;  excluding,  however,  Guarantees by
the Company of Indebtedness of employees of the Company and the  Subsidiaries in
an  aggregate  amount  at any time  outstanding  for all such  Indebtedness  not
exceeding $7,500,000.

      "Consolidated  Interest  Expense"  means,  for any  period,  the  Interest
Expense of the Company and the  Subsidiaries  for such  period  determined  on a
consolidated basis in accordance with GAAP.

      "Consolidated  Interest Income" means, for any period, the Interest Income
of the Company and the Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP.

      "Consolidated  Net Income"  means,  for any period,  the Net Income of the
Company and the Subsidiaries for such period determined on a consolidated  basis
in accordance with GAAP.

      "Debt  Incurrence"  means  an  issuance  by  the  Company  or  any  of its
Subsidiaries  of  long-term  debt  securities  in the public or private  capital
markets or a  borrowing  by the  Company  or a  Subsidiary  under a bank  credit
facility,  other than  borrowings  under this  Agreement,  the  Existing  Credit
Agreement,  the Related  Credit  Agreement or  uncommitted  short-term  lines of
credit.

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

      "Delegate" means Kinder Morgan Management,  LLC, the delegate
of Kinder Morgan G.P., Inc.

      "Disclosed  Matters"  means the  actions,  suits and  proceedings  and the
environmental matters disclosed in Schedule 4.06.

      "Distribution Date" has the meaning specified in Section 7.03.

      "Documentation  Agent" has the meaning  specified in the  introduction  to
this Agreement.

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


                                       6
<PAGE>


      "EBITDA" means (without  duplication),  with respect to any period for any
Person,  the Net Income of such Person for such period  determined in accordance
with GAAP,  increased (to the extent deducted in determining Net Income for such
period) by the sum of (a) all income  taxes  (including  state  franchise  taxes
based upon  income) of such  Person paid or accrued  according  to GAAP for such
period;  (b) Consolidated  Interest Expense of such Person for such period;  and
(c) depreciation  and amortization of such Person for such period  determined in
accordance with GAAP.

      "Effective  Date" means the date  occurring on or before March 31, 2002 on
which the  conditions  specified  in Section  3.01 are  satisfied  (or waived in
accordance with Section 9.02).

      "Eligible Assignee" means (a) any Lender; (b) any Affiliate of any Lender;
(c) a commercial bank organized or licensed under the laws of the United States,
or a state thereof,  and having total assets in excess of $1,000,000,000;  (d) a
commercial  bank organized under the laws of any other country which is a member
of the OECD, or a political  subdivision  of any such country,  and having total
assets in excess of $1,000,000,000,  provided that such bank is acting through a
branch or agency  located  in the  country in which it is  organized  or another
country which is also a member of the OECD; and (e) a finance company, insurance
company  or  other  financial   institution  or  fund  (whether  a  corporation,
partnership,  trust or other  entity) that is engaged in making,  purchasing  or
otherwise  investing in commercial  loans in the ordinary course of its business
and  having  a  combined  capital  and  surplus  or  total  assets  of at  least
$100,000,000.

      "Environmental   Laws"  means  all  laws,   rules,   regulations,   codes,
ordinances,  orders,  decrees,  judgments,   injunctions,   notices  or  binding
agreements  issued,  promulgated or entered into by any Governmental  Authority,
relating in any way to the  environment,  preservation or reclamation of natural
resources,  the  management,  release or  threatened  release  of any  Hazardous
Material or to health and safety matters.

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

      "ERISA"  means the Employee  Retirement  Income  Security Act of 1974,  as
amended from time to time.

      "ERISA   Affiliate"   means  any  trade  or   business   (whether  or  not
incorporated)  that,  together with the Company, is treated as a single employer
under  Section  414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and  Section  412 of the Code,  is treated as a single  employer  under
Section 414 of the Code.

      "ERISA Event" means (a) any "reportable event," as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day


                                       7
<PAGE>


notice  period is  waived);  (b) the  existence  with  respect to any Plan of an
"accumulated  funding  deficiency"  (as  defined in  Section  412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section
412(d) of the Code or Section 303(d) of ERISA of an application  for a waiver of
the minimum funding standard with respect to any Plan; (d) the incurrence by the
Company or any of its ERISA  Affiliates of any liability under Title IV of ERISA
with respect to the  termination  of any Plan; (e) the receipt by the Company or
any ERISA Affiliate from the PBGC or a plan administrator of any notice relating
to an  intention  to  terminate  any Plan or Plans or to  appoint a  trustee  to
administer any Plan; (f) the incurrence by the Company or any ERISA Affiliate of
any liability with respect to the withdrawal or partial withdrawal from any Plan
or Multiemployer  Plan; or (g) the receipt by the Company or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer  Plan from the Company or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.

      "Eurodollar,"  when used in reference to any Loan or Borrowing,  refers to
whether such Loan, or the Loans  comprising such  Borrowing,  bear interest at a
rate determined by reference to the LIBOR Rate.

      "Event of Default" has the meaning specified in Section 7.01.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Excluded  Taxes" means,  with respect to the  Administrative  Agent,  any
Lender or any other  recipient of any payment to be made by or on account of any
Obligation,  (a) income or franchise  taxes  imposed on (or measured by) its net
income by the United States of America, or by the jurisdiction under the laws of
which such  recipient is organized or in which its  principal  office is located
or,  in the case of any  Lender,  in which  its  applicable  lending  office  is
located, (b) any branch profits taxes imposed by the United States of America or
any  similar  tax  imposed  by any other  jurisdiction  in which the  Company is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Company under Section 2.17(b)),  any withholding tax that is
imposed  on  amounts  payable to such  Foreign  Lender at the time such  Foreign
Lender  becomes a party to this  Agreement  or is  attributable  to such Foreign
Lender's  failure or  inability to comply with  Section  2.15(e),  except to the
extent that such Foreign Lender's assignor (if any) was entitled, at the time of
assignment,  to receive additional amounts from the Company with respect to such
withholding tax pursuant to Section 2.15(a).

      "Execution  Date" means the earliest  date upon which all of the following
shall have occurred:  counterparts of this Agreement shall have been executed by
the  Company  and each  Lender  listed on the  signature  pages  hereof  and the
Administrative  Agent  shall  have  received  counterparts  hereof  which  taken
together,   bear  the  signatures  of  the  Company  and  each  Lender  and  the
Administrative Agent.

      "Existing Credit Agreement" means the $750,000,000  Credit Agreement dated
as of October  24,  2001,  as amended,  among the  Company,  the  Lenders  party
thereto, and First Union National Bank, as Administrative Agent.


                                       8
<PAGE>


      "Facility  Fee Rate" means at any time and from time to time, a percentage
per  annum  equal  to  the  applicable   percentage  set  forth  below  for  the
corresponding Performance Level set forth below:

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

                      Performance   Facility Fee
                         Level          Rate
                    ------------------------------
                          I           .085%
                    ------------------------------
                         II           .100%
                    ------------------------------
                         III          .125%
                    ------------------------------
                         IV           .175%
                    ------------------------------
                          V           .200%
                    ------------------------------

The Facility Fee Rate shall be determined by reference to the Performance  Level
in effect from time to time.

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

      "Floating  Rate Notes" means the  $200,000,000  Floating Rate Senior Notes
due March 22,2002.

      "Foreign  Lender"  means any Lender that is organized  under the laws of a
jurisdiction  other than that in which the Company is located.  For  purposes of
this  definition,  the United  States of  America,  each state  thereof  and the
District of Columbia shall be deemed to constitute a single jurisdiction.

      "GAAP" means generally accepted accounting principles in the United States
of America from time to time, including as set forth in the opinions, statements
and pronouncements of the Accounting  Principles Board of the American Institute
of Certified Public Accountants and the Financing Accounting Standards Board.

      "General  Partner" means Kinder Morgan G.P., Inc., a Delaware
corporation.

      "Governmental  Authority"  means the  government  of the United  States of
America, any other nation or any political subdivision thereof, whether state or
local,  and any agency,  authority,  instrumentality,  regulatory  body,  court,
central  bank or  other  entity  exercising  executive,  legislative,  judicial,
taxing,  regulatory  or  administrative  powers or functions of or pertaining to
government.


                                       9
<PAGE>


      "Guarantee" of or by any Person (the  "guarantor")  means any  obligation,
contingent or otherwise,  of the guarantor  guaranteeing  or having the economic
effect of guaranteeing  any Indebtedness or other obligation of any other Person
(the  "primary  obligor") in any manner,  whether  directly or  indirectly,  and
including any obligation of the guarantor,  direct or indirect,  (a) to purchase
or pay (or  advance  or  supply  funds  for the  purchase  or  payment  of) such
Indebtedness  or other  obligation or to purchase (or to advance or supply funds
for the purchase of) any  security for the payment  thereof,  (b) to purchase or
lease property,  securities or services for the purpose of assuring the owner of
such  Indebtedness or other obligation of the payment  thereof,  (c) to maintain
working capital,  equity capital or any other financial  statement  condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness  or other  obligation  or (d) as an account party in respect of any
letter of credit or letter of guaranty  issued to support such  Indebtedness  or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

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

      "Hedging Agreement" means any interest rate protection agreement,  foreign
currency  exchange  agreement,  commodity  price  protection  agreement or other
interest or currency exchange rate or commodity price hedging arrangement.

      "Indebtedness"  of  any  Person  means,  without   duplication,   (a)  all
obligations  of such Person for  borrowed  money or with  respect to deposits or
advances of any kind,  (b) all  obligations  of such Person  evidenced by bonds,
debentures,  notes or similar  instruments,  (c) all  obligations of such Person
under conditional sale or other title retention  agreements relating to property
acquired by such Person,  (d) all  obligations  of such Person in respect of the
deferred purchase price of property or services or any other similar  obligation
upon which  interest  charges are  customarily  paid  (excluding  trade accounts
payable  incurred in the ordinary course of business),  (e) all  Indebtedness of
others secured by (or for which the holder of such  Indebtedness has an existing
right,  contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person,  whether or not the  Indebtedness  secured  thereby has
been  assumed,  (f) all  Guarantees  by such  Person of  Indebtedness  of others
(provided  that  in the  event  that  any  Indebtedness  of the  Company  or any
Subsidiary shall be the subject of a Guarantee by one or more Subsidiaries or by
the  Company,  as the case  may be,  the  aggregate  amount  of the  outstanding
Indebtedness  of the Company and the  Subsidiaries  in respect  thereof shall be
determined by reference to the primary  Indebtedness so guaranteed,  and without
duplication by reason of the existence of any such  Guarantee),  (g) all Capital
Lease Obligations of such Person, (h) all obligations,  contingent or otherwise,
of such  Person as an account  party in respect of letters of credit and letters
of guaranty and (i) all obligations,  contingent or otherwise, of such Person in
respect of bankers'  acceptances.  The  Indebtedness of any Person shall include
the  Indebtedness  of any other Person  (including any partnership in which such
Person is a general  partner) to the extent such Person is liable  therefor as a
result of such Person's  ownership  interest in or other  relationship with such
entity,  except to the extent the terms of such  Indebtedness  provide that such
Person is not liable therefor.


                                       10
<PAGE>


      "Indemnified Taxes" means Taxes other than Excluded Taxes.

      "Intercompany Notes" has the meaning specified in Section 5.12.

      "Interest Election Request" has the meaning specified in Section 2.06.

      "Interest Expense" means (without duplication), with respect to any period
for any  Person  (a) the  aggregate  amount of  interest,  whether  expensed  or
capitalized, paid, accrued or scheduled to be paid during such period in respect
of the  Indebtedness  of such Person  including (i) the interest  portion of any
deferred  payment  obligation;  (ii) the  portion  of any rental  obligation  in
respect of Capital Lease Obligations  allocable to interest expenses;  and (iii)
any non-cash  interest  payments or accruals,  all determined in accordance with
GAAP, less (b) Interest Income of such Person for such period.

      "Interest  Income"  means,  with  respect to any  period  for any  Person,
interest actually received by such Person during such period.

      "Interest  Payment Date" means (a) with respect to any ABR Loan,  the last
Business Day of each January,  April, July and October,  and (b) with respect to
any Eurodollar Loan, the last Business Day of the Interest Period  applicable to
the  Borrowing  of which  such Loan is a part and,  in the case of a  Eurodollar
Borrowing with an Interest Period of more than three months' duration,  each day
prior to the last day of such Interest  Period that occurs at intervals of three
months' duration after the first day of such Interest Period.

      "Interest  Period"  means with respect to any  Eurodollar  Borrowing,  the
period  commencing on the date of such  Borrowing and ending on the  numerically
corresponding  day in the calendar  month that is one, two,  three or six months
thereafter, as the Company may elect, or such other period as may be agreed upon
by all the Lenders; provided, that (i) if any Interest Period would end on a day
other than a Business Day,  such  Interest  Period shall be extended to the next
succeeding  Business Day unless, in the case of any Eurodollar  Borrowing,  such
next  succeeding  Business Day would fall in the next calendar  month,  in which
case such Interest Period shall end on the next preceding Business Day, (ii) any
Interest  Period that commences on the last Business Day of a calendar month (or
on a day  for  which  there  is no  numerically  corresponding  day in the  last
calendar  month of such  Interest  Period) shall end on the last Business Day of
the last calendar month of such Interest Period and (iii) no Interest Period for
any Revolving  Borrowing shall end after the Maturity Date. For purposes hereof,
the date of a Borrowing  initially  shall be the date on which such Borrowing is
made  and,  in the  case  of a  Revolving  Borrowing,  thereafter  shall  be the
effective date of the most recent conversion or continuation of such Borrowing.

      "Lenders" has the meaning specified in the introduction to this Agreement.

      "LIBOR"  shall mean the rate of  interest  determined  on the basis of the
rate for deposits in dollars in an amount  substantially  equal to the amount of
the  applicable  Loan  for a  period  equal to the  applicable  Interest  Period
commencing on the first day of such Interest  Period  appearing on Telerate Page
3750 as of 11:00 a.m.  (London time) two Business Days prior to the first day of
the applicable  Interest Period.  In the event that such rate does not appear on
Telerate Page 3750, "LIBOR" shall be determined by the  Administrative  Agent to
be the rate per annum at which


                                       11
<PAGE>


deposits  in  dollars  are  offered  by  leading  reference  banks in the London
interbank  market to JPMorgan  Chase Bank at  approximately  11:00 a.m.  (London
time) two Business Days prior to the first day of the applicable Interest Period
for a period equal to such Interest Period and in an amount  substantially equal
to the amount of the applicable Loan.

      "LIBOR  Rate" shall mean,  with respect to any LIBOR Loan for any Interest
Period for such Loan, a rate per annum (rounded  upwards,  if necessary,  to the
nearest 1/100 of 1%) determined by the  Administrative  Agent to be equal to the
quotient of (i) LIBOR for such Loan for such Interest  Period  divided by (ii) 1
minus the Reserve Requirement for such Loan for such Interest Period.

      "Lien" means, with respect to any asset, (a) any mortgage,  deed of trust,
lien, pledge, hypothecation,  encumbrance, charge or security interest in, on or
of such asset and (b) the interest of a vendor or a lessor under any conditional
sale  agreement,  capital lease or title  retention  agreement (or any financing
lease having  substantially  the same economic  effect as any of the  foregoing)
relating to such asset.

      "Loan Documents" mean,  collectively,  this Agreement,  the Notes, if any,
the  Intercompany  Notes,  and all other  instruments and documents from time to
time executed and delivered by the Company in connection herewith and therewith.

      "Loans" means advances made by the Lenders to the Company pursuant to this
Agreement.

      "Material  Adverse  Effect" means,  relative to any occurrence of whatever
nature  (including any adverse  determination in any litigation,  arbitration or
governmental  investigation  or proceeding) and after taking into account actual
insurance   coverage  and  effective   indemnification   with  respect  to  such
occurrence,  (a) a material adverse effect on the financial condition,  business
or  operations  of the Company and the  Subsidiaries  taken as a whole,  (b) the
impairment of (i) the ability of the Company to collectively perform the payment
or other  material  obligations  hereunder or under the other Loan  Documents or
(ii) the  ability of the  Administrative  Agent or the  Lenders  to realize  the
material  benefits  intended  to be  provided  by the  Company  under  the  Loan
Documents or (c) the subjection of any of the Administrative Agent or any Lender
to any civil or criminal liability.

      "Maturity Date" means the earlier of (a) the Termination  Date and (b) the
acceleration of the Obligations pursuant to Section 7.01.

      "Maximum Rate" has the meaning specified in Section 9.13.

      "Moody's" means Moody's Investors Service, Inc.

      "Multiemployer  Plan"  means a  multiemployer  plan as  defined in Section
4001(a)(3) of ERISA.

      "Net Cash  Proceeds"  means,  in  connection  with any issuance or sale of
equity  securities or a Debt  Incurrence,  the cash proceeds  received from such
issuance or incurrence, net of


                                       12
<PAGE>


attorneys'  fees,  investment  banking  fees,  accountants'  fees,  underwriting
discounts  and  commissions  and  other  customary  fees and  expenses  actually
incurred in connection therewith.

      "Net Income"  means for any Person for any period,  the net income or (net
loss)  of such  Person  for  such  period  (taken  as a  cumulative  whole),  as
determined  in  accordance  with GAAP,  provided  that there shall be  excluded,
without  duplication,  from such net income (to the  extent  otherwise  included
therein):

      (a) net extraordinary gains and losses (other than, in the case of losses,
losses  resulting  from  charges  against  net income to  establish  or increase
reserves for potential  environmental  liabilities  and reserves for exposure of
such Person under rate cases);

      (b)  net  gains or  losses  in  respect  of  dispositions  of assets other
than in the ordinary course of business;

      (c)  any  gains  or  losses   attributable to write-ups  or write-downs of
assets; and

      (d)  proceeds of any key man  insurance,  or  any  insurance  on property,
plant or equipment.

      "Note" means a Revolving Note.

      "Notice of Account Designation" has the meaning specified in Section 2.05.

      "Notice of Default" has the meaning specified in Section 7.01.

      "Notice of Prepayment" has the meaning specified in Section 2.09.

      "Obligations" means collectively:

      (a)  the payment of all  indebtedness and liabilities by, and  performance
of all other  obligations  of, the  Company in respect of the Loans;

      (b)  the  payment  of  all  other  indebtedness  and  liabilities  by  and
performance of all other obligations of, the Company to the Administrative Agent
and the Lenders under, with respect to, and arising in connection with, the Loan
Documents, and the payment of all indebtedness and liabilities of the Company to
the Administrative  Agent and the Lenders for fees, costs,  indemnification  and
expenses  (including  reasonable  attorneys'  fees and expenses)  under the Loan
Documents;

      (c) the reimbursement of all sums advanced and costs and expenses incurred
by the  Administrative  Agent  under  any Loan  Document  (whether  directly  or
indirectly)  in  connection  with the  Obligations  or any part  thereof  or any
renewal, extension or change of or substitution for the Obligations or, any part
thereof,  whether such advances, costs and expenses were made or incurred at the
request of the Company or the Administrative Agent; and

      (d) all renewals, extensions,  amendments and changes of, or substitutions
or  replacements  for, all or any part of the items  described under clauses (a)
through (c) above.


                                       13
<PAGE>


      "OECD" means the Organization for Economic Cooperation and Development (or
any successor).

      "OLP `A'" means  Kinder  Morgan  Operating  L.P.  "A," a Delaware  limited
partnership.

      "OLP `B'" means  Kinder  Morgan  Operating  L.P.  "B," a Delaware  limited
partnership.

      "OLP `C'" means  Kinder  Morgan  Operating  L.P.  "C," a Delaware  limited
partnership.

      "OLP `D'" means  Kinder  Morgan  Operating  L.P.  "D," a Delaware  limited
partnership.

      "OLP `E'" means  Kinder  Morgan CO2  Company,  L.P.,  a Texas
limited partnership.

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

      "Participant" has the meaning specified in Section 9.05(e).

      "PBGC"  means the Pension  Benefit  Guaranty  Corporation  referred to and
defined in ERISA and any successor entity performing similar functions.

      "Performance  Level"  means a  reference  to one of  Performance  Level I,
Performance Level II, Performance Level III, Performance Level IV or Performance
Level V.

      "Performance  Level I" means,  at any date of  determination,  the Company
shall have a Company Debt Rating in effect on such date of at least A- by S&P or
at least A3 by Moody's.

      "Performance  Level  II"  means,  at any  date of  determination,  (a) the
Performance  Level does not meet the requirements of Performance Level I and (b)
the Company  shall have a Company Debt Rating in effect on such date of at least
BBB+ by S&P or at least Baa1 by Moody's.

      "Performance  Level  III"  means,  at any date of  determination,  (a) the
Performance  Level  does not meet the  requirements  of  Performance  Level I or
Performance  Level II and (b) the  Company  shall have a Company  Debt Rating in
effect on such date of at least BBB by S&P or at least Baa2 by Moody's.

      "Performance  Level  IV"  means,  at any  date of  determination,  (a) the
Performance  Level  does not  meet  the  requirements  of  Performance  Level I,
Performance  Level II or Performance  Level III and (b) the Company shall have a
Company  Debt  Rating in effect on such date of at least BBB- by S&P or at least
Baa3 by Moody's.

      "Performance Level V" means, at any date of determination, the Performance
Level does not meet the requirements of Performance  Level I, Performance  Level
II, Performance Level III or Performance Level IV.


                                       14
<PAGE>


      "Permitted Encumbrances" means:

      (a)  Liens  imposed  by law for taxes  that are  not yet due  or are being
contested in compliance with Section 5.04;

      (b) carriers', warehousemen's,  mechanics', materialmen's, repairmen's and
other like Liens imposed by law,  arising in the ordinary course of business and
securing  obligations  that are not  overdue  by more  than 30 days or are being
contested in compliance with Section 5.04;

      (c)  pledges  and  deposits  made in the  ordinary  course of  business in
compliance with workers'  compensation,  unemployment insurance and other social
security laws or regulations;

      (d) deposits to secure the performance of bids, trade  contracts,  leases,
statutory  obligations,  surety and appeal  bonds,  performance  bonds and other
obligations of a like nature, in each case in the ordinary course of business;

      (e) easements, zoning restrictions, rights-of-way and similar encumbrances
on real  property  imposed by law or arising in the ordinary  course of business
that do not secure any monetary  obligations and do not materially  detract from
the value of the  affected  property or interfere  with the ordinary  conduct of
business of the Company or any Subsidiary;

      (f) judgment and  attachment  Liens not giving rise to an Event of Default
or Liens created by or existing from any litigation or legal proceeding that are
currently  being  contested in good faith by appropriate  proceedings,  promptly
instituted and diligently  conducted,  and for which adequate reserves have been
made to the extent required by GAAP;

      (g) any  interest or title of a lessor in property  subject to any Capital
Lease Obligation or operating lease which, in each case, is permitted under this
Agreement; and

      (h) Liens in favor of  collecting or payor banks having a right of setoff,
revocation,  refund or chargeback  with respect to money or  instruments  of the
Company or any Subsidiary on deposit with or in possession of such bank;

provided  that the term  "Permitted  Encumbrances"  shall not  include  any Lien
securing Indebtedness.

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

      "Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the  provisions of Title IV of ERISA or Section 412 of the Code
or  Section  302 of ERISA,  and in  respect  of which the  Company  or any ERISA
Affiliate  is (or, if such plan were  terminated,  would under  Section  4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

      "Plantation Pipe Line" means Plantation Pipe Line Company,  a Delaware and
Virginia corporation.


                                       15
<PAGE>


      "Prime Rate" shall mean the rate of interest  from time to time  announced
publicly  by the  Administrative  Agent at the  Principal  Office  as its  prime
commercial  lending  rate.  Such  rate is set by the  Administrative  Agent as a
general  reference  rate of  interest,  taking into  account such factors as the
Administrative Agent may deem appropriate,  it being understood that many of the
Administrative  Agent's commercial or other loans are priced in relation to such
rate, that it is not necessarily the lowest or best rate actually charged to any
customer and that the Administrative  Agent may make various commercial or other
loans at rates of interest having no relationship to such rate.

      "Principal  Office" shall mean the principal office of the  Administrative
Agent,  presently  located at 270 Park Avenue,  21st Floor,  New York, New York,
10017 or such other location as designated by the Administrative Agent from time
to time.

      "Register" has the meaning specified in Section 9.05.

      "Regulation A" means  Regulation A of the Board,  as the same is from time
to time in effect,  and all official rulings and  interpretations  thereunder or
thereof.

      "Regulation D" means  Regulation D of the Board,  as the same is from time
to time in effect,  and all official rulings and  interpretations  thereunder or
thereof.

      "Regulation T" means  Regulation T of the Board,  as the same is from time
to time in effect,  and all official rulings and  interpretations  thereunder or
thereof.

      "Regulation U" means  Regulation U of the Board,  as the same is from time
to time in effect,  and all official rulings and  interpretations  thereunder or
thereof.

      "Regulation X" means  Regulation X of the Board,  as the same is from time
to time in effect,  and all official rulings and  interpretations  thereunder or
thereof.

      "Related  Credit  Agreement"  means  the  Credit  Agreement  dated  as  of
September 29, 1999 among the Company, OLP "B," the lenders party thereto,  First
Union  National  Bank,  as  Administrative  Agent,  Bank of  America,  N.A.,  as
Syndication Agent and Societe Generale, as Documentation Agent.

      "Related  Parties"  means,  with  respect to any  specified  Person,  such
Person's Affiliates and the respective directors,  officers,  employees,  agents
and advisors of such Person and such Person's Affiliates.

      "Required  Lenders" means, at any time,  Lenders having  Revolving  Credit
Exposures  and  unused  Commitments  representing  51% of the  sum of the  total
Revolving Credit Exposures and unused Commitments at such time.

      "Requirement of Law" shall mean any law, statute, code, ordinance,  order,
determination,   rule,  regulation,  judgment,  decree,  injunction,  franchise,
permit,  certificate,  license,  authorization or other directive or requirement
(whether or not having the force of law),  including  Environmental Laws, energy
regulations and  occupational,  safety and health standards or controls,  of any
Governmental Authority.


                                       16
<PAGE>


      "Reserve  Requirement" means, for any day as applied to a Eurodollar Loan,
the  aggregate  (without  duplication)  of the  rates  (expressed  as a  decimal
fraction)  of  reserve  requirements  in  effect on such day  (including  basic,
supplemental, marginal and emergency reserves under any regulations of the Board
or other  Governmental  Authority  having  jurisdiction  with  respect  thereto)
dealing with reserve requirements prescribed for eurocurrency funding (currently
referred to as  "Eurocurrency  Liabilities"  in  Regulation  D)  maintained by a
member bank of the Federal Reserve System.  Eurodollar  Loans shall be deemed to
constitute   Eurocurrency   Liabilities  and  to  be  subject  to  such  reserve
requirements  without benefit of or credit for proration,  exceptions or offsets
which may be available from time to time to any Lender under Regulation D.

      "Responsible  Officer" of the Company means the Chairman,  Vice  Chairman,
President,  any Vice  President,  Chief Financial  Officer,  Controller or Chief
Accounting Officer of the General Partner.

      "Restricted Payment" means any distribution  (whether in cash,  securities
or other property) with respect to any partnership  interest in the Company,  or
any payment  (whether in cash,  securities  or other  property),  including  any
deposit,  on  account  of the  purchase,  redemption,  retirement,  acquisition,
cancellation  or termination of any such  partnership  interest or any option or
other right to acquire any such partnership  interest;  provided,  however, that
(A) distributions with respect to the partnership  interests in the Company that
do not exceed, with respect to any fiscal quarter of the Company,  the amount of
Available Cash for such quarter shall not constitute Restricted Payments so long
as in each case, both before and after the making of such distribution, no Event
of Default or Default shall have occurred and be continuing, (B) any partnership
interest  split,   partnership  interest  reverse  split,  dividend  of  Company
partnership  interests or similar  transaction  will not constitute a Restricted
Payment,  (C) the  application by the Company on and after the Execution Date to
the purchase, redemption, retirement, cancellation or termination of partnership
interests in the Company of an  aggregate  amount not greater than the excess of
(i)  $50,000,000.00,  over (ii) the aggregate  amount of all amounts  applied to
such purchases, redemptions,  retirements,  cancellations or terminations during
the period beginning one day after the Effective Date (as defined in the Related
Credit  Agreement) and extending  through and including the Execution Date), and
(D)  acquisitions  by  officers,  directors  and  employees  of the  Company  of
partnership  interests  in the  Company  through  cashless  exercise  of options
pursuant  to the  Company's  Common  Unit  Option  Plan,  shall  not  constitute
Restricted Payments.

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

      "Revolving Credit Exposure" means, with respect to any Lender at any time,
the sum of the outstanding  principal amount of such Lender's Revolving Loans at
such time.

      "Revolving Loan" means a Loan made pursuant to Section 2.03.


                                       17
<PAGE>


      "Revolving  Note" means a  promissory  note of the Company  payable to the
order of each Lender, in substantially the form of Exhibit 1.01C,  together with
all modifications, extensions, renewals and rearrangements thereof.

      "S&P"  means  Standard  &  Poor's  Ratings  Services,  a  division  of The
McGraw-Hill Companies, Inc.

      "SFPP" means SFPP, L.P., a Delaware limited partnership.

      "SFPP First  Mortgage  Notes" means those  certain  First  Mortgage  Notes
issued by SFPP (under its prior name  Southern  Pacific Pipe Lines  Partnership,
L.P.) pursuant to a Note  Agreement  dated December 8, 1988 between SFPP and the
purchasers  named therein,  which on the Execution  Date are  outstanding in the
aggregate principal amount of $79,557,000.

      "Subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation,  limited liability company,  partnership,  association or other
entity the accounts of which would be  consolidated  with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared  in  accordance  with  GAAP as of  such  date,  as  well  as any  other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests  representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership,  more than 50% of the general partnership interests are, as of such
date,  owned,  controlled  or held,  or (b) that is, as of such date,  otherwise
controlled,  by the parent or one or more  subsidiaries  of the parent or by the
parent and one or more subsidiaries of the parent.  Unless the context otherwise
clearly  requires,  references  in  this  Agreement  to a  "Subsidiary"  or  the
"Subsidiaries"  refer  to a  Subsidiary  or the  Subsidiaries  of  the  Company.
Notwithstanding the foregoing  Plantation Pipe Line shall not be a Subsidiary of
the Company  until such time as its assets and  liabilities,  profit or loss and
cash flow are required under GAAP to be consolidated with those of the Company.

      "Syndication  Agent" has the meaning specified in the introduction to this
Agreement.

      "Taxes"  means any and all  present  or  future  taxes,  levies,  imposts,
duties,  deductions,   charges  or  withholdings  imposed  by  any  Governmental
Authority.

      "Termination Date" means February 18, 2003.

      "Total Commitment" means the sum of the Commitments of the Lenders,  which
on the Execution Date is $750,000,000.

      "Transactions"  means  the  execution,  delivery  and  performance  by the
Company of this Agreement and the other Loan  Documents,  the borrowing of Loans
and the use of the proceeds thereof.

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

      "United  States"  and  "U.S."  each  means  United  States of
America.


                                       18
<PAGE>


      "Utilization Fee" has the meaning specified in Section 2.10.

      "Voting Stock" means, with respect to any Person,  securities of any class
or classes of Capital Stock in such Person entitling holders thereof (whether at
all times or only so long as no senior class of stock has voting power by reason
of any contingency) to vote in the election of members of the Board of Directors
or other  governing  body of such Person or its  managing  member or its general
partner  (or its  managing  general  partner  if there is more than one  general
partner).

      "Wholly-owned  Subsidiary"  means a  Subsidiary  of which all  issued  and
outstanding  Capital  Stock  (excluding  (a)  in  the  case  of  a  corporation,
directors'  qualifying  shares, (b) in the case of a limited  partnership,  a 2%
general partner interest and (c) in the case of a limited liability  company,  a
2% member interest) is directly or indirectly owned by the Company.

      "Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer  Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

      SECTION 1.02  Classification of Loans and Borrowings. For purposes of this
Agreement,  Loans may be classified and referred to by Type (e.g., a "Eurodollar
Loan").  Borrowings  also may be  classified  and  referred to by Type (e.g.,  a
"Eurodollar Borrowing").

      SECTION 1.03  Accounting  Terms;  Changes  in  GAAP.  All  accounting  and
financial terms used herein and not otherwise  defined herein and the compliance
with each covenant  contained herein which relates to financial matters shall be
determined in accordance with GAAP applied by the Company on a consistent basis,
except to the extent that a deviation  therefrom  is  expressly  stated.  Should
there be a change in GAAP from that in effect on the Execution  Date,  such that
the  defined  terms  set forth in  Section  1.01 or the  covenants  set forth in
Article VI would then be  calculated  in a  different  manner or with  different
components or would render the same not  meaningful  criteria for evaluating the
matters contemplated to be evidenced by such covenants,  (a) the Company and the
Required Lenders agree,  within the 60-day period following any such change,  to
negotiate in good faith and enter into an  amendment to this  Agreement in order
to conform  the defined  terms set forth in Section  1.01 or the  covenants  set
forth in Article VI, or both,  in such  respects as shall  reasonably  be deemed
necessary  by the  Required  Lenders so that the  criteria  for  evaluating  the
matters  contemplated  to be evidenced by such covenants are  substantially  the
same criteria as were  effective  prior to any such change in GAAP,  and (b) the
Company  shall be deemed to be in  compliance  with such  covenants  during  the
60-day period following any such change,  or until the earlier date of execution
of such  amendment,  if and to the extent  that the  Company  would have been in
compliance therewith under GAAP as in effect immediately prior to such change.

      SECTION 1.04 Interpretation.

          (a) In this Agreement, unless a clear contrary intention appears:

               (i) the  singular  number  includes  the  plural  number and vice
versa;

               (ii) reference to any gender includes each other gender;


                                       19
<PAGE>


               (iii) the words  "herein,"  "hereof"  and  "hereunder"  and other
words of  similar  import  refer  to this  Agreement  as a whole  and not to any
particular Article, Section or other subdivision;

               (iv)  reference to any Person  includes such Person's  successors
and  assigns  but,  if  applicable,  only if such  successors  and  assigns  are
permitted by this Agreement,  and reference to a Person in a particular capacity
excludes  such  Person in any other  capacity  or  individually;  provided  that
nothing  in this  clause  (iv) is  intended  to  authorize  any  assignment  not
otherwise permitted by this Agreement;

               (v)  except  as  expressly   provided  to  the  contrary  herein,
reference to any agreement,  document or instrument  (including  this Agreement)
means such  agreement,  document  or  instrument  as  amended,  supplemented  or
modified, or extended, renewed, refunded, substituted or replaced, and in effect
from time to time in accordance  with the terms thereof and, if applicable,  the
terms hereof,  and reference to any Note or other note or  Indebtedness or other
indebtedness  includes  any  note or  indebtedness  issued  pursuant  hereto  in
extension  or renewal or refunding  thereof or in  substitution  or  replacement
therefor;

               (vi) unless the context  indicates  otherwise,  reference  to any
Article,  Section,  Schedule or Exhibit means such Article or Section  hereof or
such Schedule or Exhibit hereto;

               (vii)  the  word  "including"   (and  with  correlative   meaning
"include") means  including,  without limiting the generality of any description
preceding such term;

               (viii) with respect to the  determination  of any period of time,
except as expressly  provided to the  contrary,  the word "from" means "from and
including" and the word "to" means "to but excluding";

               (ix)  reference  to any law,  rule or  regulation  means  such as
amended,  modified,  codified or reenacted,  in whole or in part,  and in effect
from time to time; and

               (x) the words "asset" and  "property"  shall be construed to have
the same  meaning and effect and refer to any and all  tangible  and  intangible
assets and properties.

                                   ARTICLE II.
                                   THE CREDITS
                                   -----------

      SECTION 2.01 Commitments.  Subject to the terms and  conditions  set forth
herein,  each Lender agrees to make Revolving  Loans to the Company from time to
time during the Availability  Period in an aggregate  principal amount that will
not  result  in (a) such  Lender's  Revolving  Credit  Exposure  exceeding  such
Lender's  Commitment  or (b) the sum of the  total  Revolving  Credit  Exposures
exceeding the Total  Commitment.  Within the foregoing limits and subject to the
terms and  conditions  set forth  herein,  the Company  may  borrow,  prepay and
reborrow Revolving Loans.


                                       20
<PAGE>


      SECTION 2.02 Loans and Borrowings.

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

          (b)  Subject  to  Section  2.12,  each  Revolving  Borrowing  shall be
comprised  entirely of ABR Loans or Eurodollar  Loans as the Company may request
in accordance  herewith.  Each Lender at its option may make any Eurodollar Loan
by causing any  domestic or foreign  branch or  Affiliate of such Lender to make
such  Loan;  provided  that any  exercise  of such  option  shall not affect the
obligation  of the  Company to repay such Loan in  accordance  with the terms of
this Agreement.

          (c) At the  commencement  of each Interest  Period for any  Eurodollar
Revolving  Borrowing,  such Borrowing shall be in an aggregate amount that is an
integral  multiple of $1,000,000 and not less than $3,000,000.  At the time that
each ABR Revolving  Borrowing is made,  such Borrowing  shall be in an aggregate
amount that is an integral  multiple of $1,000,000 and not less than $1,000,000;
provided that an ABR Revolving  Borrowing may be in an aggregate  amount that is
equal to the entire unused  balance of the Total  Commitment  Borrowings of more
than one Type may be outstanding at the same time; provided that there shall not
at any  time  be  more  than a  total  of six  Eurodollar  Revolving  Borrowings
outstanding.

          (d) Notwithstanding any other provision of this Agreement, the Company
shall not be  entitled  to  request,  or to elect to  convert or  continue,  any
Borrowing if the Interest Period  requested with respect thereto would end after
the Maturity Date.

      SECTION 2.03  Requests for  Revolving  Borrowings.  To request a Revolving
Borrowing,  the Company shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing,  not later than 10:00 a.m.,
New York  City  time,  three  Business  Days  before  the  date of the  proposed
Borrowing  (provided,  however,  no such request may be given prior to the third
Business Day after the Effective  Date) and (b) in the case of an ABR Borrowing,
not later  than 10:00  a.m.,  New York City  time,  on the date of the  proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the  Administrative  Agent
of a written Borrowing Request in a form of Exhibit 2.03 (a "Borrowing Request")
and signed by a Responsible  Officer of the Company.  Each such  telephonic  and
written Borrowing Request shall specify the following  information in compliance
with Section 2.02:

               (i) the aggregate amount of the requested Borrowing;

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

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


                                       21
<PAGE>


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

               (v) the  location  and number of the  Company's  account to which
funds are to be disbursed,  which shall comply with the  requirements of Section
2.05.

If no election as to the Type of  Revolving  Borrowing  is  specified,  then the
requested Revolving  Borrowing shall be an ABR Borrowing.  If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing,  then
the Company shall be deemed to have  selected an Interest  Period of one month's
duration.  Promptly  following receipt of a Borrowing Request in accordance with
this  Section  2.03,  the  Administrative  Agent shall advise each Lender of the
details  thereof and of the amount of such  Lender's  Loan to be made as part of
the requested Borrowing.

     SECTION 2.04 Telephonic Notices. Without in any way limiting the obligation
of the  Company to confirm in writing  any  telephonic  notice it is entitled to
give under this Agreement or any other Loan Document,  the Administrative  Agent
may act without liability upon the basis of a telephonic notice believed in good
faith by the  Administrative  Agent to be from the  Company  prior to receipt of
written confirmation.  In each such case, the Company hereby waives the right to
dispute  the  Administrative  Agent's  record  of the  terms of such  telephonic
notice.

     SECTION 2.05 Funding of Borrowings.

          (a) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of  immediately  available  funds by 2:00
p.m.,  New York City  time,  to the  account  of the  Administrative  Agent most
recently  designated by it for such purpose by notice to the Lenders.  Not later
than 2:00 p.m. (New York City time) on the proposed  Borrowing Date, each Lender
will make available to the Administrative Agent, for the account of the Company,
at the office of the Administrative Agent in funds immediately  available to the
Administrative Agent, such Lender's Loans to be made on such Borrowing Date. The
Company hereby irrevocably  authorizes the Administrative  Agent to disburse the
proceeds  of  each  Borrowing   requested  pursuant  to  this  Section  2.05  in
immediately  available funds by crediting or wiring such proceeds to the deposit
account  of the  Company  identified  in  the  most  recent  Notice  of  Account
Designation  substantially  in the form of  Exhibit  2.05  hereto (a  "Notice of
Account  Designation")  delivered by the Company to the Administrative  Agent or
may be otherwise  agreed upon by the Company and the  Administrative  Agent from
time to time.

          (b) Unless the Administrative  Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing (or prior to 12:00 noon,  New
York City time, on such date in the case of an ABR  Borrowing)  that such Lender
will not make available to the Administrative  Agent such Lender's share of such
Borrowing,  the  Administrative  Agent may assume that such Lender has made such
share  available on such date in  accordance  with  Section  2.05(a) and may, in
reliance upon such  assumption,  make  available to the Company a  corresponding
amount.  In such  event,  if a  Lender  has not in fact  made  its  share of the
applicable Borrowing available to the Administrative  Agent, then the applicable
Lender and the Company


                                       22
<PAGE>


severally  agree to pay to the  Administrative  Agent  forthwith  on demand such
corresponding  amount  with  interest  thereon,  for each day from the date such
amount  is  made  available  to  the  Company  to the  date  of  payment  to the
Administrative  Agent,  at (i) in the case of such  Lender,  the  Federal  Funds
Effective Rate or (ii) in the case of the Company,  the interest rate applicable
to ABR Loans. If such Lender pays such amount to the Administrative  Agent, then
such amount shall constitute such Lender's Loan included in such Borrowing.

SECTION 2.06    Interest Elections.

          (a) Subject to Section 2.12, each Revolving  Borrowing initially shall
be of the Type specified in the applicable Borrowing Request and, in the case of
a  Eurodollar  Revolving  Borrowing,  shall have an initial  Interest  Period as
specified in such Borrowing  Request.  Thereafter,  subject to Section 2.12, the
Company may elect to convert such  Borrowing to a different  Type or to continue
such Borrowing and, in the case of a Eurodollar Revolving  Borrowing,  may elect
Interest Periods therefor, all as provided in this Section 2.06. The Company may
elect  different  options  with  respect to  different  portions of the affected
Borrowing,  in which case each such portion shall be allocated ratably among the
Lenders holding the Loans  comprising such Borrowing,  and the Loans  comprising
each such portion shall be considered a separate Borrowing.

          (b) To make an election  pursuant to this  Section  2.06,  the Company
shall notify the Administrative  Agent of such election by telephone by the time
that a Borrowing  Request  would be required  under  Section 2.03 if the Company
were  requesting a Revolving  Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election  Request shall be irrevocable  and shall be confirmed  promptly by hand
delivery or telecopy to the Administrative  Agent of a written Interest Election
Request in the form of Exhibit 2.06 (an "Interest Election Request").

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

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

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

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

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


                                       23
<PAGE>


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

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

          (e) If the Company fails to deliver a timely Interest Election Request
with  respect  to a  Eurodollar  Revolving  Borrowing  prior  to the  end of the
Interest Period  applicable  thereto,  then,  unless such Borrowing is repaid as
provided  herein,  at the end of such Interest  Period such  Borrowing  shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
and so long as an Event of Default is continuing  (i) no  outstanding  Revolving
Borrowing  may be converted to or continued as a Eurodollar  Borrowing  and (ii)
unless repaid, each Eurodollar  Revolving Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.

     SECTION  2.07   Optional  and  Mandatory   Termination   and  Reduction  of
Commitments.

          (a) Unless previously  terminated,  the Commitments shall terminate on
the Termination Date.

          (b) The  Company  may at any  time  terminate,  or  from  time to time
reduce,  the  Total  Commitment,  in whole or in  part;  provided  that (i) each
partial  reduction  of the Total  Commitment  shall be in an  amount  that is an
integral  multiple  of  $1,000,000  and not less  than  $5,000,000  and (ii) the
Company shall not terminate or reduce the Commitments if, after giving effect to
any concurrent  prepayment of the Loans in accordance with Section 2.08, the sum
of the total Revolving Credit Exposures would exceed the Total Commitment.

          (c) The Company shall notify the Administrative  Agent of any election
to terminate or reduce the Total Commitment under Section 2.07(b) at least three
Business  Days prior to the  effective  date of such  termination  or reduction,
specifying  such election and the effective  date  thereof.  Promptly  following
receipt of any notice, the Administrative  Agent shall advise the Lenders of the
contents thereof.  Each notice delivered by the Company pursuant to this Section
2.07 shall be  irrevocable;  provided that a notice of  termination of the Total
Commitment  delivered  by the Company may state that such notice is  conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by the Company (by notice to the Administrative  Agent on or prior to
the  specified  effective  date)  if  such  condition  is  not  satisfied.   Any
termination  or  reduction  of the Total  Commitment  shall be  permanent.  Each
reduction of the Total  Commitment  shall be made  ratably  among the Lenders in
accordance with their respective Commitments.

          (d) The Total Commitment shall  automatically  terminate on the date a
Change in Control occurs.

          (e) If the Company or any of its  Subsidiaries  shall receive Net Cash
Proceeds from any Debt Incurrence, or any issuance or sale of equity securities,
in excess of the lesser of


                                       24
<PAGE>


$200,000,000  or the  principal  amount of the Floating Rate Notes at such time,
then (i) the  Commitments  shall at 11:00 a.m., New York City time, on the third
Business Day after the date of such receipt  automatically  and  permanently  be
reduced  ratably  by an  amount  equal to such Net Cash  Proceeds,  and (ii) the
Company  shall,  at or prior to such  time,  prepay the  Revolving  Loans to the
extent,  if any, that the total Revolving  Credit Exposures exceed the amount of
the Commitments.

     SECTION 2.08 Repayment of Loans; Evidence of Debt.

          (a)  The  Company  hereby  unconditionally  promises  to  pay  to  the
Administrative  Agent for the account of each  Lender the then unpaid  principal
amount of each Revolving Loan on the Maturity Date. In addition, if prior to the
Termination  Date the sum of the total Revolving  Credit  Exposures  exceeds the
Total  Commitment,  the Company  shall pay to the  Administrative  Agent for the
account  of each  Lender  an  aggregate  principal  amount  of  Revolving  Loans
sufficient  to cause  the sum of the total  Revolving  Credit  Exposures  not to
exceed the Total  Commitment;  provided that if a prepayment  occurs pursuant to
Section  2.07(e),  the Company shall make such prepayment  within three Business
Days.

          (b) On the date that a Change in Control  occurs,  the  Company  shall
repay the  outstanding  principal  amount  of the  Loans  and all other  amounts
outstanding hereunder and under the other Loan Documents.

          (c) Each Lender shall  maintain in accordance  with its usual practice
an account or accounts evidencing the indebtedness of the Company to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

          (d) The Administrative Agent shall maintain accounts in which it shall
record  (i) the amount of each Loan made  hereunder,  the Type  thereof  and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and  payable or to become due and  payable  from the  Company to each Lender
hereunder and (iii) the amount of any sum received by the  Administrative  Agent
hereunder for the account of the Lenders and each Lender's share thereof.

          (e) The entries  made in the accounts  maintained  pursuant to Section
2.08(c) or (d) shall be prima facie evidence of the existence and amounts of the
obligations  recorded  therein;  provided  that the failure of any Lender or the
Administrative  Agent to maintain such accounts or any error or conflict therein
shall not in any manner affect the  obligation of the Company to repay the Loans
in accordance with the terms of this Agreement.

          (f) Any Lender may  request  that Loans made by it be  evidenced  by a
Revolving Note. In such event, the Company shall prepare, execute and deliver to
such Lender a Revolving Note. Thereafter, the Loans evidenced by such promissory
note  and  interest  thereon  shall at all  times  (including  after  assignment
pursuant to Section 9.05) be represented by one or more promissory notes in such
forms payable to the order of the payee named therein.


                                       25
<PAGE>


     SECTION 2.09 Optional and Mandatory Prepayment of Loans.

          (a) The Company shall have the right at any time and from time to time
to  prepay  any  Borrowing  in whole  or in part,  subject  to prior  notice  in
accordance with Section 2.09(b).

          (b) The Company  shall  notify the  Administrative  Agent by telephone
(confirmed  by telecopy in the form of Exhibit 2.09 (a "Notice of  Prepayment"))
of any  prepayment  hereunder  (i) in the  case of  prepayment  of a  Eurodollar
Revolving  Borrowing,  not later than  11:00  a.m.,  New York City  time,  three
Business Days before the date of prepayment or (ii) in the case of prepayment of
an ABR Revolving  Borrowing,  not later than 11:00 a.m.,  New York City time, on
the date of prepayment.  Each such notice shall be irrevocable and shall specify
the prepayment  date, Type and the principal amount of each Borrowing or portion
thereof to be prepaid;  provided  that,  if a notice of  prepayment  is given in
connection  with a  conditional  notice of  termination  of the  Commitments  as
contemplated  by Section 2.07,  then such notice of prepayment may be revoked if
such notice of  termination  is revoked in accordance  with Section  2.07.  Each
partial  prepayment  shall be in an aggregate amount not less than, and shall be
an integral  multiple of, the amounts shown below with respect to the applicable
Type of Loan or Borrowing:

    -----------------------------------------------------------------
                                       Integral         Minimum
       Type of Loan/Borrowing        Multiple of    Aggregate Amount
       ----------------------        -----------    ----------------
    -----------------------------------------------------------------
    Eurodollar Revolving Borrowing    $1,000,000       $ 3,000,000

    -----------------------------------------------------------------
    ABR Revolving Borrowing            1,000,000         1,000,000
    -----------------------------------------------------------------

Promptly following receipt of any such notice relating to a Revolving Borrowing,
the  Administrative  Agent shall advise the Lenders of the contents thereof.  If
the Company fails to designate  the Type of  Borrowings  to be prepaid,  partial
prepayments  shall be applied first to the outstanding ABR Borrowings  until all
such outstanding principal of ABR Borrowings are repaid in full, and then to the
outstanding principal amount of Eurodollar  Borrowings.  Each partial prepayment
of any Revolving  Borrowing shall be in an amount that would be permitted in the
case of an advance of a  Revolving  Borrowing  of the same Type as  provided  in
Section 2.02. Each prepayment of a Revolving  Borrowing shall be applied ratably
to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied
by accrued interest to the extent required by Section 2.11 and any break funding
costs pursuant to Section 2.14 shall be paid within 10 days after the incurrence
thereof.

          (c) The Company shall make any prepayment required pursuant to Section
2.07.

     SECTION 2.10 Fees.

          (a) The  Company  agrees  to pay to the  Administrative  Agent for the
account of each  Lender a facility  fee,  which shall  accrue at the  applicable
Facility Fee Rate on the daily amount of the Commitment of such Lender,  whether
used or unused and, when the Commitment


                                       26
<PAGE>


has terminated,  on the outstanding Loans of such Lender, during the period from
and including  the date of this  Agreement to but excluding the later of (i) the
date on which such Commitment terminates and (ii) the date the Loans are paid in
full. Accrued facility fees shall be payable in arrears on the last Business Day
of  January,  April,  July and October of each year and on the date on which the
Commitments terminate and the date the Loans are paid in full, commencing on the
first  such date to occur  after the date  hereof.  All  facility  fees shall be
computed  on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).

          (b) The  Company  agrees  to pay to the  Administrative  Agent for the
account of each Lender a utilization fee (the  "Utilization  Fee"),  which shall
accrue at a rate per annum  equal to 0.125% on each  Lender's  Revolving  Credit
Exposure (i) for each day from and after the Effective Date to but excluding the
Maturity  Date  on  which  the  Aggregate  Credit  Exposures  exceed  50% of the
Aggregate  Commitments and (b) for each day on and after the Maturity Date until
the Aggregate  Credit  Exposures  are reduced to zero if on the day  immediately
preceding  the Maturity Date the Aggregate  Credit  Exposures  exceed 50% of the
Aggregate  Commitments.  All Utilization Fees shall be payable in arrears on the
last day of  January,  April,  July and October of each year and on the date the
Revolving Credit Exposures of all Lenders,  the total Revolving Credit Exposures
of the Lenders under and as defined in the Existing  Credit  Agreement,  and the
aggregate loans (including Competitive Loans) and letters of credit) outstanding
under the Related Credit Agreement,  are paid in full or reduced to zero, as the
case may be,  commencing on the first of such dates to occur after the Effective
Date. All Utilization  Fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed  (including the first
day but excluding the last day).

          (c) The Company  agrees to pay to the  Administrative  Agent,  for the
account of the Lenders,  fees payable in the amounts and at the times separately
agreed upon between the Company and the  Administrative  Agent in the Commitment
Letter and attached Term Sheet dated as of February 11, 2002 between the Company
and the Administrative Agent.

          (d) All fees  payable  hereunder  shall be paid on the dates  due,  in
     immediately  available funds, to the Administrative Agent for distribution,
     in the case of facility fees and participation fees, to the Lenders. Except
     as  required  by  law,  fees  paid  shall  not  be  refundable   under  any
     circumstances.

     SECTION 2.11 Interest.

          (a) The Loans  comprising  each ABR Borrowing shall bear interest at a
rate per annum equal to the Alternate Base Rate.

          (b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the LIBOR Rate for the Interest  Period in effect for such Borrowing plus the
Applicable Margin.

          (c) Notwithstanding the foregoing,  if any principal of or interest on
any Loan or any fee or other amount payable by the Company hereunder is not paid
when due,  whether at stated  maturity,  upon  acceleration  or otherwise,  such
overdue amount shall bear interest,  after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any


                                       27
<PAGE>


Loan, 2% plus the rate  otherwise  applicable to such Loan as provided  above or
(ii) in the case of any other amount, 2% plus the Alternate Base Rate.

          (d) Accrued  interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued pursuant
to  Section  2.11(c)  shall  be  payable  on  demand,  (ii) in the  event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving
Loan  prior to the end of the  Availability  Period),  accrued  interest  on the
principal  amount  repaid  or  prepaid  shall  be  payable  on the  date of such
repayment or prepayment,  (iii) in the event of any conversion of any Eurodollar
Revolving Loan prior to the end of the current Interest Period therefor, accrued
interest on such Loan shall be payable on the effective date of such  conversion
and (iv) all accrued  interest  shall be payable upon  termination  of the Total
Commitment.

          (e) All interest hereunder shall be computed on the basis of a year of
360 days,  except that interest computed by reference to the Alternate Base Rate
at times  when the  Alternate  Base  Rate is based on the  Prime  Rate  shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed  (including the
first day but excluding the last day).  The  applicable  Alternate  Base Rate or
LIBOR  Rate  shall  be  determined  by  the   Administrative   Agent,  and  such
determination shall be conclusive absent manifest error.

     SECTION 2.12 Alternate Rate of Interest.  If prior to the  commencement  of
any Interest Period for a Eurodollar Borrowing:

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

          (b) the  Administrative  Agent is advised by the Required Lenders that
the LIBOR Rate for such Interest  Period will not  adequately and fairly reflect
the cost to such  Lenders (or Lender) of making or  maintaining  their Loans (or
its Loan) included in such Borrowing for such Interest Period;

then the  Administrative  Agent shall give notice thereof to the Company and the
Lenders by  telephone  or telecopy as promptly as  practicable  thereafter  and,
until the  Administrative  Agent  notifies  the Company and the Lenders that the
circumstances  giving  rise to such  notice no longer  exist,  (i) any  Interest
Election Request that requests the conversion of any Revolving  Borrowing to, or
continuation  of any  Revolving  Borrowing as, a Eurodollar  Borrowing  shall be
ineffective,  (ii) if any  Borrowing  Request  requests a  Eurodollar  Revolving
Borrowing,  such Borrowing  shall be made as an ABR Borrowing;  provided that if
the circumstances giving rise to such notice affect only one Type of Borrowings,
then the other Type of Borrowings shall be permitted.

     SECTION 2.13 Increased Costs.

          (a) If any Change in Law shall:


                                       28
<PAGE>


               (i)  impose,  modify  or deem  applicable  any  reserve,  special
deposit or similar  requirement  against  assets  of,  deposits  with or for the
account  of,  or  credit  extended  by,  any  Lender  (except  any such  reserve
requirement reflected in the LIBOR Rate); or

               (ii)  impose on any  Lender or the  London  interbank  market any
other  condition  affecting  this  Agreement  or  Eurodollar  Loans made by such
Lender;

and the result of any of the  foregoing  shall be to  increase  the cost to such
Lender of making or  maintaining  any  Eurodollar  Loan (or of  maintaining  its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable  by  such  Lender  hereunder  (whether  of  principal,   interest  or
otherwise),  then the Company will pay to such Lender such additional  amount or
amounts as will  compensate  such Lender for such  additional  costs incurred or
reduction suffered.

          (b) If any Lender  determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company,  if any, as
a  consequence  of this  Agreement  or the Loans made by such  Lender to a level
below  that  which  such  Lender or such  Lender's  holding  company  could have
achieved but for such Change in Law (taking  into  consideration  such  Lender's
policies  and the  policies of such  Lender's  holding  company  with respect to
capital  adequacy),  then from time to time the Company  will pay to such Lender
such  additional  amount  or  amounts  as will  compensate  such  Lender or such
Lender's holding company for any such reduction suffered.

          (c) A  certificate  of a Lender  setting  forth the  amount or amounts
necessary to compensate such Lender or its holding company,  as the case may be,
as specified in paragraph  (a) or (b) of this Section 2.13 shall be delivered to
the Company and shall be conclusive absent manifest error. The Company shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.

          (d) Failure or delay on the part of any Lender to demand  compensation
pursuant to this  Section 2.13 shall not  constitute  a waiver of such  Lender's
right to  demand  such  compensation;  provided  that the  Company  shall not be
required to compensate a Lender  pursuant to this Section 2.13 for any increased
costs or  reductions  incurred  more than six months prior to the date that such
Lender  notifies the Company of the Change in Law giving rise to such  increased
costs  or  reductions  and of such  Lender's  intention  to  claim  compensation
therefor;  provided  further  that,  if the  Change in Law  giving  rise to such
increased costs or reductions is retroactive, then the six-month period referred
to above shall be extended to include the period of retroactive effect thereof.

          SECTION 2.14 Break Funding  Payments.  In the event of (a) the payment
of any  principal  of any  Eurodollar  Loan  other  than on the  last  day of an
Interest  Period  applicable  thereto  (including  as a  result  of an  Event of
Default),  (b) the conversion of any Eurodollar  Loan other than on the last day
of the Interest  Period  applicable  thereto,  (c) the failure to borrow (unless
such failure was caused by the failure of a Lender to make such Loan),  convert,
continue or prepay any Eurodollar Loan, or the failure to convert an ABR Loan to
a Eurodollar Loan, on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice is


                                       29
<PAGE>


permitted  to be  revocable  under  Section  2.07 and is revoked  in  accordance
herewith),  or (d) the assignment of any Eurodollar  Loan other than on the last
day of the Interest  Period  applicable  thereto as a result of a request by the
Company  pursuant to Section 2.17,  then,  in any such event,  the Company shall
compensate  each  Lender for the loss,  cost and  expense  attributable  to such
event. In the case of a Eurodollar Loan, the loss to any Lender  attributable to
any such event shall be deemed to include an amount determined by such Lender to
be equal to the excess,  if any, of (i) the amount of interest  that such Lender
would  pay for a  deposit  equal to the  principal  amount  of such Loan for the
period from the date of such payment,  conversion,  failure or assignment to the
last day of the then current Interest Period for such Loan (or, in the case of a
failure to borrow, convert or continue, the duration of the Interest Period that
would have resulted from such  borrowing,  conversion  or  continuation)  if the
interest  rate  payable  on such  deposit  were equal to the LIBOR Rate for such
Interest Period, over (ii) the amount of interest that such Lender would earn on
such  principal  amount  for such  period if such  Lender  were to  invest  such
principal  amount for such period at the interest rate that would be bid by such
Lender (or an affiliate of such Lender) for dollar  deposits from other banks in
the Eurodollar  market at the  commencement of such period. A certificate of any
Lender  setting  forth any amount or amounts  that such  Lender is  entitled  to
receive  pursuant to this  Section  2.14 shall be  delivered  to the Company and
shall be  conclusive  absent  manifest  error.  Except as  provided  in  Section
2.09(b),  the Company  shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.

     SECTION 2.15 Taxes.

          (a) Any and all  payments  by or on account of any  obligation  of the
Company  hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Company shall be required
to deduct any Indemnified Taxes or Other Taxes from such payments,  then (i) the
sum payable  shall be  increased  as necessary so that after making all required
deductions  (including  deductions  applicable to additional  sums payable under
this  Section  2.15) the  Administrative  Agent or a Lender (as the case may be)
receives  an  amount  equal  to the  sum it  would  have  received  had no  such
deductions  been made, (ii) the Company shall make such deductions and (iii) the
Company  shall  pay  the  full  amount  deducted  to the  relevant  Governmental
Authority in accordance with applicable law.

          (b) In addition, the Company shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

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


                                       30
<PAGE>


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

          (e) Any  Foreign  Lender  that is  entitled  to an  exemption  from or
reduction  of  withholding  tax under the law of the  jurisdiction  in which the
Company is located,  or any treaty to which such  jurisdiction is a party,  with
respect to payments  under this  Agreement  shall deliver to the Company (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Company, such properly completed and executed
documentation  prescribed by  applicable  law as will permit such payments to be
made without withholding or at a reduced rate.

     SECTION 2.16 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

          (a) The  Company  shall make each  payment  required to be made by the
Company  hereunder  (whether of  principal,  interest or fees,  or under Section
2.13,  2.14 or 2.15, or otherwise)  prior to 12:00 noon,  New York City time, on
the  date  when  due,  in  immediately   available  funds,  without  set-off  or
counterclaim.  Any  amounts  received  after  such time on any date may,  in the
discretion of the  Administrative  Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating  interest thereon.  All
such payments shall be made to the Administrative Agent at its Principal Office,
except that payments  pursuant to Sections  2.13,  2.14,  2.15 and 9.03 shall be
made directly to the Persons entitled thereto.  The  Administrative  Agent shall
distribute any such payments  received by it for the account of any other Person
to the appropriate  recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next  succeeding  Business Day, and, in the case of any
payment accruing  interest,  interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in dollars.

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

          (c) If any  Lender  shall,  by  exercising  any  right of  set-off  or
counterclaim  or  otherwise,  obtain  payment in respect of any  principal of or
interest  on any of its  Revolving  Loans  resulting  in such  Lender  receiving
payment of a greater  proportion of the aggregate  amount of its Revolving Loans
and accrued interest  thereon than the proportion  received by any other Lender,
then the Lender  receiving such greater  proportion  shall purchase (for cash at
face value) participations in the Revolving Loans of other Lenders to the extent
necessary  so that the  benefit  of all such  payments  shall be  shared  by the
Lenders  ratably in  accordance  with the  aggregate  amount of principal of and
accrued interest on their respective  Revolving Loans;  provided that (i) if any
such  participations  are purchased and all or any portion of the payment giving
rise


                                       31
<PAGE>


thereto is recovered,  such  participations  shall be rescinded and the purchase
price restored to the extent of such recovery,  without  interest,  and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Company  pursuant  to and in  accordance  with the express  terms of this
Agreement  or  any  payment  obtained  by a  Lender  as  consideration  for  the
assignment  of or sale of a  participation  in any of its Loans to any assignee,
other than to the Company or any  Subsidiary  or Affiliate  thereof (as to which
the  provisions  of this  paragraph  shall apply).  The Company  consents to the
foregoing and agrees,  to the extent it may  effectively do so under  applicable
law,  that any  Lender  acquiring  a  participation  pursuant  to the  foregoing
arrangements may exercise against the Company rights of set-off and counterclaim
with  respect to such  participation  as fully as if such  Lender  were a direct
creditor of the Company in the amount of such participation.

          (d) Unless the  Administrative  Agent shall have received  notice from
the Company prior to the date on which any payment is due to the  Administrative
Agent for the account of the Lenders  hereunder  that the Company  will not make
such payment, the Administrative Agent may assume that the Company has made such
payment on such date in  accordance  herewith  and may,  in  reliance  upon such
assumption,  distribute  to the Lenders  the amount  due. In such event,  if the
Company has not in fact made such  payment,  then each of the Lenders  severally
agrees to repay to the  Administrative  Agent  forthwith on demand the amount so
distributed  to such  Lender  with  interest  thereon,  for  each  day  from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the Federal Funds Effective Rate.

          (e) If any Lender  shall fail to make any payment  required to be made
by it pursuant to Section 2.05(b) or 2.16(d), then the Administrative Agent may,
in its discretion  (notwithstanding  any contrary provision  hereof),  apply any
amounts thereafter received by the Administrative  Agent for the account of such
Lender to satisfy such Lender's  obligations  under such Sections until all such
unsatisfied obligations are fully paid.

     SECTION 2.17 Mitigation Obligations; Replacement of Lenders.

          (a) If any Lender requests  compensation under Section 2.13, or if the
Company  is  required  to  pay  any  additional  amount  to  any  Lender  or any
Governmental  Authority for the account of any Lender  pursuant to Section 2.15,
then such Lender shall use reasonable  efforts to designate a different  lending
office for  funding or booking its Loans  hereunder  or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates,  if, in
the judgment of such Lender,  such designation or assignment (i) would eliminate
or reduce amounts payable  pursuant to Section 2.13 or 2.15, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be  disadvantageous  to such Lender. The Company
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

          (b) If any Lender requests  compensation under Section 2.13, or if the
Company  is  required  to  pay  any  additional  amount  to  any  Lender  or any
Governmental  Authority for the account of any Lender  pursuant to Section 2.15,
or if any Lender  defaults in its obligation to fund Loans  hereunder,  then the
Company may, at its sole expense and effort,  upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without


                                       32
<PAGE>


recourse  (in  accordance  with and  subject to the  restrictions  contained  in
Section 9.05), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such  obligations  (which  assignee may be another
Lender,  if a Lender  accepts such  assignment);  provided  that (i) the Company
shall have received the prior written consent of the Administrative Agent, which
consent shall not be unreasonably withheld, (ii) such Lender shall have received
payment of an amount equal to the  outstanding  principal of its Loans,  accrued
interest  thereon,  accrued fees and all other amounts  payable to it hereunder,
from the  assignee  (to the extent of such  outstanding  principal  and  accrued
interest  and fees) or the Company (in the case of all other  amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section  2.13 or payments  required to be made  pursuant to Section  2.15,  such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required  to make any such  assignment  and  delegation  if,  prior
thereto, as a result of a waiver by such Lender or otherwise,  the circumstances
entitling the Company to require such assignment and delegation cease to apply.

                                  ARTICLE III.
                              CONDITIONS PRECEDENT
                              --------------------

     SECTION 3.01 Conditions Precedent to the Initial Borrowing.  The obligation
of each Lender to make its initial Loan is subject to the following conditions:

          (a) The Administrative  Agent shall have received the following,  each
dated the Execution Date:

               (i) this Agreement executed by each party hereto;

               (ii) if requested by any Lender, a Revolving Note executed by the
Company and payable to the order of such Lender;

               (iii) a  certificate  of an officer  and of the  secretary  or an
assistant  secretary  of the  Delegate,  certifying,  inter  alia,  (A) true and
complete  copies  of each of the  limited  liability  company  agreement  of the
Delegate,  the certificate of  incorporation,  as amended and in effect,  of the
General Partner,  the partnership  agreement,  as amended and in effect,  of the
Company,  the bylaws,  as amended and in effect,  of the General Partner and the
resolutions  adopted by the Board of Directors  of the Delegate (1)  authorizing
the execution, delivery and performance by the Company of this Agreement and the
other Loan  Documents to which it is or will be a party and the Borrowings to be
made  hereunder,  (2) approving the forms of the Loan Documents to which it is a
party and which will be delivered at or prior to the initial  Borrowing Date and
(3)  authorizing  officers  of the  Delegate  to execute  and  deliver  the Loan
Documents to which the Company is or will be a party and any related  documents,
including any agreement  contemplated by this Agreement,  (B) the incumbency and
specimen  signatures of the officers of the Delegate  executing any documents on
its  behalf  and (C) (1) that the  representations  and  warranties  made by the
Company in each Loan  Document to which the Company is a party and which will be
delivered at or prior to the initial  Borrowing Date are true and correct in all
material  respects,  (2) the absence of any  proceedings  for the dissolution or
liquidation of the Company and (3) the absence of the occurrence and continuance
of any Default or Event of Default;


                                       33
<PAGE>


               (iv) a  letter  from  CT  Corporation  System,  Inc.  in form and
substance  satisfactory to the Administrative Agent evidencing the obligation of
CT  Corporation  System,  Inc. to accept  service of process in the State of New
York on behalf of the Company;

               (v) a  favorable,  signed opinion addressed to the Administrative
Agent and the  Lenders  from  Bracewell  &  Patterson,  L.L.P.,  counsel  to the
Company, given upon the express instruction of the Company; and

               (vi)  certificates  of  appropriate  public  officials  as to the
existence,  good  standing  and  qualification  to  do  business  as  a  foreign
partnership  of the Company in each  jurisdiction  in which the ownership of its
properties or the conduct of its business requires such  qualification and where
the failure so to qualify would,  individually or collectively,  have a Material
Adverse Effect.

          (b) The  Administrative  Agent shall be reasonably  satisfied that all
required consents and approvals of any applicable Governmental Authority and any
other Person in connection  with the  transactions  contemplated by this Section
3.01 shall have been obtained and remain in effect  (except where the failure to
obtain  such  approvals  would  not have a  Material  Adverse  Effect),  and all
applicable  waiting  periods  shall have  expired (or been  waived)  without any
action being taken by any Governmental Authority.

          (c) All agreements  relating to, and the organizational  structure of,
the  Company  and the  Subsidiaries,  and all  organizational  documents  of the
Company  and  the  Subsidiaries,   shall  be  reasonably   satisfactory  to  the
Administrative Agent and the Syndication Agent.

          (d) The Company shall have paid to J.P. Morgan  Securities Inc., First
Union Securities,  Inc., the Administrative  Agent and the Syndication Agent all
fees and  expenses  agreed  upon by such  parties  to be paid on or prior to the
Execution Date.

          (e) The Company shall have paid to Vinson & Elkins L.L.P.  pursuant to
Section 9.03 all reasonable fees and disbursements invoiced to the Company on or
prior to the Execution Date.

The  Administrative  Agent  shall  notify  the  Company  and the  Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing,  the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., New York City time, on March
31, 2002 (and, in the event such conditions are not so satisfied or waived,  the
Commitments shall terminate at such time).

     SECTION 3.02 Conditions Precedent to All Borrowings.  The obligation of the
Lenders to make any Loan  (including any Loan on the initial  Borrowing Date) is
subject to the further conditions precedent that on the date of such Borrowing:

          (a) The  conditions  precedent  set forth in  Section  3.01 shall have
theretofore been satisfied;


                                       34
<PAGE>


          (b) The  representations and warranties set forth in Article IV and in
the other Loan Documents  shall be true and correct in all material  respects as
of, and as if such  representations  and warranties  were made on, the Borrowing
Date of the proposed  Loan (unless such  representation  and warranty  expressly
relates to an earlier  date),  and the Company shall be deemed to have certified
to the  Administrative  Agent  and the  Lenders  that such  representations  and
warranties  are true and  correct  in all  material  respects  by the  Company's
delivery of a Borrowing Request;

          (c) The Company  shall have  complied  with the  provisions of Section
2.03;

          (d) No  Default  or  Event  of  Default  shall  have  occurred  and be
continuing or would result from such Borrowing; and

          (e) The Administrative  Agent and the Lenders shall have received such
other  approvals,  opinions  or  documents  as the  Administrative  Agent or the
Required Lenders may reasonably request.

The   acceptance  of  the  benefits  of  each  Borrowing   shall   constitute  a
representation  and  warranty by the Company to each of the Lenders  that all of
the conditions specified in this Section 3.02 above exist as of that time.

     SECTION  3.03   Delivery  of   Documents.   All  of  the  Loan   Documents,
certificates,  legal opinions and other documents and papers referred to in this
Article   III,   unless   otherwise   specified,   shall  be  delivered  to  the
Administrative  Agent for the account of each of the Lenders and, except for any
Notes, in sufficient counterparts or copies for each of the Lenders and shall be
satisfactory in form and substance to the Lenders.

                                  ARTICLE IV.
                         REPRESENTATIONS AND WARRANTIES

      In order to induce the  Lenders to enter into this  Agreement  and to make
the Loans provided for herein, the Company makes, on or as of the Effective Date
and  the  occurrence  of  each  Borrowing,  the  following  representations  and
warranties to the Administrative Agent and the Lenders:

     SECTION 4.01  Organization and  Qualification.  The Company and each of the
Subsidiaries (a) is a corporation, partnership or limited liability company duly
organized or formed, validly existing and in good standing under the laws of the
state of its  incorporation,  organization  or formation,  (b) has all requisite
corporate,  partnership,  limited  liability  company or other  power to own its
property and to carry on its business as now conducted and (c) is duly qualified
to do  business  and is in good  standing  in every  jurisdiction  in which  the
failure to be so qualified  would,  individually or together with all such other
failures of the Company and the Subsidiaries, have a Material Adverse Effect.

     SECTION 4.02  Authorization,  Validity,  Etc. The Company has all requisite
partnership  or other power and  authority  to execute,  deliver and perform its
obligations  hereunder and under the other Loan Documents to which it is a party
and to make  the  Borrowings  hereunder,  and all  such  action  has  been  duly
authorized by all necessary partnership


                                       35
<PAGE>


proceedings  on its part.  This Agreement and the other Loan Documents have been
duly and  validly  executed  and  delivered  by or on behalf of the  Company and
constitute  valid and legally  binding  agreements  of the  Company  enforceable
against the Company in accordance with the respective terms thereof,  except (a)
as  may  be  limited  by  bankruptcy,  insolvency,  reorganization,  moratorium,
fraudulent transfer,  fraudulent conveyance or other similar laws relating to or
affecting  the  enforcement  of  creditors'  rights  generally,  and by  general
principles  of  equity  (including  principles  of good  faith,  reasonableness,
materiality and fair dealing) which may, among other things,  limit the right to
obtain equitable  remedies  (regardless of whether considered in a proceeding in
equity  or  at  law)  and  (b)  as  to  the  enforceability  of  provisions  for
indemnification for violation of applicable securities laws, limitations thereon
arising as a matter of law or public policy.

     SECTION  4.03  Governmental  Consents,  Etc.  No  authorization,   consent,
approval,  license or exemption of or  registration,  declaration or filing with
any Governmental  Authority,  is necessary for the valid execution,  delivery or
performance  by the Company of any Loan Document to which it is a party,  except
those that have been obtained and such matters  relating to performance as would
ordinarily be done in the ordinary course of business after the Execution Date.

     SECTION 4.04 Conflicting or Adverse Agreements or Restrictions. Neither the
Company nor any of the  Subsidiaries  is a party to any contract or agreement or
subject to any restriction  that would reasonably be expected to have a Material
Adverse Effect.  Neither the execution,  delivery and performance by the Company
of the Loan Documents to which it is a party,  nor compliance with the terms and
provisions  thereof,  nor the  extensions  of  credit  contemplated  by the Loan
Documents,  (a) will breach or violate any  applicable  Requirement  of Law, (b)
will  result  in any  breach  or  violation  of,  any of the  terms,  covenants,
conditions or provisions  of, or  constitute a default  under,  or result in the
creation or imposition of (or the  obligation to create or impose) any Lien upon
any of its property or assets (other than Liens created or  contemplated by this
Agreement)  pursuant  to the terms of any  indenture,  mortgage,  deed of trust,
agreement or other instrument to which it or any of the Subsidiaries is party or
by which any property or asset of it or any of the  Subsidiaries  is bound or to
which it is subject, except for breaches,  violations and defaults under clauses
(a) and (b) that neither individually nor in the aggregate for the Company could
reasonably  be  expected  to result  in a  Material  Adverse  Effect or (c) will
violate any provision of the organic documents of the Company.

     SECTION 4.05 Properties.

          (a) Each of the  Company  and the  Subsidiaries  has good title to, or
valid  leasehold  or other  interests  in,  all its real and  personal  property
material  to its  business,  except  for  minor  defects  in  title  that do not
materially  interfere  with its  ability to conduct its  business  as  currently
conducted or to utilize such properties for their intended purposes.

          (b) Each of the Company and the  Subsidiaries  owns, or is licensed to
use, all trademarks,  trade names,  copyrights,  patents and other  intellectual
property  material to its  business,  and the use thereof by the Company and the
Subsidiaries  does not infringe upon the rights of any other Person,  except for
any such infringements that, neither individually nor in the


                                       36
<PAGE>


aggregate for the Company and such Subsidiaries, could reasonably be expected to
result in a Material Adverse Effect.

     SECTION 4.06 Litigation and Environmental Matters.

          (a) There are no actions,  suits,  investigations or proceedings by or
before any  arbitrator  or  Governmental  Authority  pending  against or, to the
knowledge of the Company,  threatened against or affecting the Company or any of
the Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely  determined,  could reasonably be expected,
individually  or in the  aggregate  for the  Company and such  Subsidiaries,  to
result in a Material  Adverse Effect (other than the Disclosed  Matters) or (ii)
that involve this Agreement or the Transactions.

          (b) Except for the  Disclosed  Matters and except with  respect to any
other  matters  that,  individually  or in the aggregate for the Company and the
Subsidiaries,  could not reasonably be expected to result in a Material  Adverse
Effect, neither the Company nor any of the Subsidiaries (i) has failed to comply
with any  Environmental  Law or to obtain,  maintain  or comply with any permit,
license or other approval required under any Environmental  Law, (ii) has become
subject to any Environmental  Liability,  (iii) has received notice of any claim
with respect to any  Environmental  Liability or (iv) knows of any basis for any
Environmental Liability.

          (c) Since the Execution  Date,  there has been no change in the status
of the Disclosed  Matters that,  individually or in the aggregate,  has resulted
in, or materially increased the likelihood of, a Material Adverse Effect.

     SECTION 4.07 Financial Statements.

          (a) The consolidated and  consolidating  balance sheets of the Company
and its  consolidated  Subsidiaries  as at  December  31,  2000 and the  related
consolidated and consolidating statements of income, partners', shareholders' or
members' equity and cash flow of the Company and its  consolidated  Subsidiaries
for the fiscal year ended on said date,  with (in the case of such  consolidated
financial  statements)  the  opinion  thereon  of   PricewaterhouseCoopers   LLP
heretofore  furnished  to  the  Lenders  and  the  unaudited   consolidated  and
consolidating balance sheets of the Company and its consolidated Subsidiaries as
at  September  30,  2001  and  their  related   consolidated  and  consolidating
statements of income, partners',  shareholders' or members' equity and cash flow
of the Company and its consolidated Subsidiaries for the nine-month period ended
on such date  heretofore  furnished to the Lenders,  are complete and correct in
all material respects and fairly present the consolidated financial condition of
the Company and its  consolidated  Subsidiaries as at said dates and the results
of their operations for the fiscal year and the nine-month  period ended on said
dates,  all in accordance with GAAP, as applied on a consistent  basis (subject,
in the case of the interim financial statements, to the absence of footnotes and
to normal year-end and audit adjustments).

          (b) Since  September  30,  2001,  there has been no  material  adverse
change in the business, assets, operations or condition, financial or otherwise,
of the Company and the Subsidiaries, taken as a whole.


                                       37
<PAGE>


     SECTION  4.08  Disclosure.  The  Company has  disclosed  to the Lenders all
agreements,  instruments and corporate or other  restrictions to which it or any
of the  Subsidiaries  is  subject,  and all  other  matters  known to it,  that,
individually  or in the aggregate for the Company and such  Subsidiaries,  could
reasonably  be  expected  to result in a Material  Adverse  Effect.  None of the
reports, financial statements, certificates or other information furnished by or
on behalf of the Company to the Administrative Agent or any Lender in connection
with the syndication or negotiation of this Agreement or delivered hereunder (as
modified  or  supplemented  by other  information  so  furnished)  contains  any
material  misstatement  of fact or omits to state any material fact necessary to
make the statements  therein, in the light of the circumstances under which they
were made, not misleading.

     SECTION 4.09  Investment  Company  Act.  Neither the Company nor any of the
Subsidiaries  is, or is regulated as, an  "investment  company," as such term is
defined in the Investment Company Act of 1940, as amended.

     SECTION 4.10 Public Utility  Holding  Company Act.  Neither the Company nor
any of the  Subsidiaries  is a  non-exempt  "holding  company,"  or  subject  to
regulation as such, or an  "affiliate"  of a "holding  company" or a "subsidiary
company"  of a  "holding  company,"  within the  meaning  of the Public  Utility
Holding Company Act of 1935, as amended.

     SECTION 4.11 ERISA.  No ERISA Event has occurred or is reasonably  expected
to occur that,  when taken  together  with all other such ERISA Events for which
liability  is  reasonably  expected to occur,  could  reasonably  be expected to
result in a  Material  Adverse  Effect.  The  present  value of all  accumulated
benefit  obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial  Accounting  Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts,  exceed by more
than  $5,000,000  the fair  market  value of the  assets of such  Plan,  and the
present value of all accumulated  benefit  obligations of all underfunded  Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards  No.  87)  did  not,  as of the  date  of the  most  recent  financial
statements  reflecting  such amounts,  exceed by more than  $5,000,000  the fair
market value of the assets of all such underfunded Plans.

     SECTION 4.12 Tax Returns and Payments.

          (a) The  Company  and the  Subsidiaries  have  caused  to be filed all
federal  income tax returns  and other  material  tax  returns,  statements  and
reports (or obtained  extensions with respect  thereto) which are required to be
filed and have paid or deposited or made adequate  provision in accordance  with
GAAP for the  payment  of all taxes  (including  estimated  taxes  shown on such
returns,  statements  and  reports)  which are shown to be due  pursuant to such
returns,  except  where the  failure to pay such taxes  (individually  or in the
aggregate  for the  Company  and the  Subsidiaries)  would  not have a  Material
Adverse  Effect.  No  material  income  tax  liability  of  the  Company  or the
Subsidiaries  has been  asserted by the Internal  Revenue  Service of the United
States  or any  other  Governmental  Authority  for any taxes in excess of those
already  paid,  except  for taxes  which are being  contested  in good  faith by
appropriate  proceedings and for which adequate reserves in accordance with GAAP
have been created on the books of the Company and the Subsidiaries.


                                       38
<PAGE>


          (b) The federal income tax liabilities, if any, of the Company and the
Subsidiaries  (and of the General  Partner) have been finally  determined by the
Internal  Revenue Service and satisfied for all taxable years through the fiscal
year ending in 1994.

     SECTION 4.13 Compliance  with Laws and Agreements.  Each of the Company and
the  Subsidiaries is in compliance with all laws,  regulations and orders of any
Governmental  Authority  applicable  to it or its property  and all  indentures,
agreements and other instruments  binding upon it or its property,  except where
the failure to do so,  individually  or in the aggregate for the Company and the
Subsidiaries,  could not reasonably be expected to result in a Material  Adverse
Effect. No Default or Event of Default has occurred and is continuing.

     SECTION 4.14 Purpose of Loans.

          (a) All  proceeds of the Loans will be used for the purposes set forth
in Section 5.08.

          (b) None of the  proceeds  of the  loans  under  the  Existing  Credit
Agreement or this  Agreement were or will be used directly or indirectly for the
purpose  of  buying or  carrying  any  "margin  stock"  within  the  meaning  of
Regulation U (herein  called  "margin  stock") or for the purpose of reducing or
retiring any indebtedness which was originally incurred to buy or carry a margin
stock,  or for any other  purpose  which might  constitute  this  transaction  a
"purpose" credit within the meaning of Regulation T, U or X. Neither the Company
nor any agent acting on its behalf has taken or will take any action which might
cause  this  Agreement  or any other Loan  Document  to  violate  Regulation  T,
Regulation U,  Regulation X, or any other  regulation of the Board or to violate
the Securities  Exchange Act of 1934. Margin stock does not constitute more than
25% of the assets of the Company and the Company does not intend or foresee that
it will ever do so.

                                   ARTICLE V.
                              AFFIRMATIVE COVENANTS

     Until the Commitments  have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full, the Company covenants and agrees with the Lenders that:

     SECTION 5.01 Financial  Statements and Other Information.  The Company will
furnish to the  Administrative  Agent, in each case with  sufficient  copies for
each Lender:

          (a) As soon as  available  and in any event  within 120 days after the
end of each fiscal year of the Company: (i) the audited consolidated  statements
of income,  partners' equity and cash flows of the Company for such fiscal year,
and the related  consolidated balance sheet of the Company as at the end of such
fiscal year,  setting forth in each case in comparative form the figures for (or
in the case of the balance  sheet,  as of the end of) the previous  fiscal year,
accompanied  by  the  related  opinion  of  independent  public  accountants  of
recognized national standing reasonably  acceptable to the Administrative Agent,
which  opinion  shall (x) state that said  financial  statements  of the Company
fairly present the consolidated financial condition and results of operations of
the Company as at the end of, and for, such fiscal year and that such  financial
statements have been prepared in accordance with GAAP except for such changes in


                                       39
<PAGE>


such  principles  with  which the  independent  public  accountants  shall  have
concurred,  and (y) not contain a "going concern" or other adverse qualification
or exception  unacceptable  to the Required  Lenders;  and (ii) a certificate of
such  accountants  stating that, in making the  examination  necessary for their
opinion, they obtained no knowledge, except as specifically stated, of any Event
of  Default  or  Default,  and  stating  whether  any  change  in GAAP or in the
application  thereof  has  occurred  since  the  date of the  audited  financial
statements  referred to in Section 4.07(b) and, if any such change has occurred,
specifying  the effect of such change on the financial  statements  accompanying
such certificate.

               (b) (i) As soon as  available  and in any  event  within  60 days
after the end of each of the first three fiscal quarterly periods of each fiscal
year of the Company,  unaudited  consolidated  statements  of income,  partners'
equity and cash flows of the Company for such period and for the period from the
beginning  of the  respective  fiscal  year to the end of such  period,  and the
related  unaudited  consolidated  balance  sheet  as at the end of such  period,
setting forth in each case in  comparative  form the figures for (or in the case
of balance sheets, as of the end of) the  corresponding  periods in the previous
fiscal year,  accompanied  by the  certificate  of a Responsible  Officer of the
Company,  which  certificate  shall state that said financial  statements fairly
present the  consolidated  financial  condition and results of operations of the
Company in accordance with GAAP, as at the end of, and for, such period (subject
to the absence of footnotes and changes  resulting  from normal  year-end  audit
adjustments).

               (ii) As soon as  available  and in any event within 60 days after
the end of each of the first three fiscal quarterly periods of each fiscal year,
and within 120 days after the end of each  fiscal  year of OLP "A," OLP "B," OLP
"C," OLP "D," OLP "E" and each other  Wholly-owned  Subsidiary the Capital Stock
of which is owned directly by the Company,  unaudited consolidated statements of
income,  partners',  shareholders' or members'  equity,  as the case may be, and
cash  flows of such  Person  and the  Subsidiaries  for such  period and for the
period  from the  beginning  of the  respective  fiscal  year to the end of such
period,  and the related unaudited  consolidated  balance sheet as at the end of
such period,  setting forth in each case in comparative form the figures for (or
in the case of balance sheets,  as of the end of) the  corresponding  periods in
the previous  fiscal  year,  accompanied  by the  certificate  of a  Responsible
Officer of such  Person,  which  certificate  shall  state  that said  financial
statements fairly present the consolidated and consolidating financial condition
and results of operations of such Person in accordance  with GAAP, as at the end
of, and for,  such  period  (subject  to the  absence of  footnotes  and changes
resulting from normal year-end audit adjustments).

          (c)  Promptly  upon receipt  thereof,  and in the form  received,  all
audited  and  unaudited  financial  statements  (whether  quarterly  or  annual)
received by the Company from any Person (other than an individual)  whose income
is accounted for through any of the Persons  referenced  in Section  5.01(b)(ii)
and  whose  EBITDA  or  distributions,  as  the  case  may  be,  exceed  25%  of
Consolidated EBITDA.

          (d) Prompt written notice of the following:

               (i) the  occurrence  of any Default or Event of Default or Change
in Control Event;


                                       40
<PAGE>


               (ii) the  occurrence  of any ERISA Event that,  alone or together
with any other ERISA Events that have occurred,  could reasonably be expected to
result in liability of the Company and the  Subsidiaries in an aggregate  amount
exceeding $5,000,000; and

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

Each notice  delivered  under this Section  5.01(d)  shall be  accompanied  by a
statement of a  Responsible  Officer  setting  forth the details of the event or
development  requiring  such notice and any action taken or proposed to be taken
with respect thereto.

          (e)  Promptly  upon  receipt  thereof,  a copy of each other report or
letter  submitted to the Company by independent  accountants in connection  with
any annual,  interim or special  audit made by them of the books of the Company,
and a copy of any  response by the  Company,  or the Board of  Directors  of the
general partner of the Company, to such letter or report.

          (f) Promptly upon its becoming  available,  each financial  statement,
report, notice or proxy statement sent by the Company to stockholders  generally
and each regular or periodic report and any registration statement or prospectus
filed by the Company with any securities exchange or the Securities and Exchange
Commission or any successor agency.

          (g) Promptly  after the furnishing  thereof,  copies of any statement,
report or notice furnished to any Person pursuant to the terms of any indenture,
loan or credit or other  similar  agreement,  other than this  Agreement and not
otherwise required to be furnished to the  Administrative  Agent pursuant to any
other provision of this Section 5.01.

          (h) From time to time such other  information  regarding the business,
affairs or financial  condition of the Company or any Subsidiary  (including any
Plan or Multiemployer  Plan and any reports or other information  required to be
filed  under  ERISA) as the  Required  Lenders or the  Administrative  Agent may
reasonably request.

The Company will furnish to the  Administrative  Agent, at the time it furnishes
each set of  financial  statements  pursuant to  paragraph  (a) or (b) above,  a
certificate  substantially in the form of Exhibit 5.01 executed by a Responsible
Officer of the Company (i)  certifying  as to the matters set forth  therein and
stating that no Event of Default or Default has occurred and is continuing  (or,
if any Event of Default or Default has  occurred and is  continuing,  describing
the same in reasonable  detail),  (ii) setting  forth in  reasonable  detail the
computations  necessary to determine  whether the Company is in compliance  with
Sections  6.07(a)  and  (b),  and  (iii)  a  statement,  with  respect  to  each
Intercompany Note, of (A) the actual outstanding  principal amount thereof,  and
the amount of any  accrued  and unpaid  interest  thereon,  as at the end of the
respective  quarter or fiscal year,  as the case may be, and (B) the highest and
lowest principal  amount thereof at any time outstanding  during such quarter or
fiscal year and the periods  during such quarter or fiscal year during which the
principal of such Intercompany Note was outstanding in each such amount.

     SECTION  5.02   Litigation.   The  Company  shall   promptly  give  to  the
Administrative  Agent  notice of all legal or arbitral  proceedings,  and of all
proceedings before


                                       41
<PAGE>


any  Governmental  Authority  affecting  the Company or any  Subsidiary,  except
proceedings  which, if adversely  determined,  would not have a Material Adverse
Effect.  The Company will, and will cause each of the  Subsidiaries to, promptly
notify  the  Administrative  Agent  of  any  claim,  judgment,   Lien  or  other
encumbrance  affecting  any  property  or  assets  of the  Company  or any  such
Subsidiary  if the value of the  claim,  judgment,  Lien,  or other  encumbrance
affecting such property or assets shall exceed $10,000,000.

     SECTION 5.03  Existence,  Conduct of Business.  The Company will,  and will
cause each of the  Subsidiaries  to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights, licenses,  permits, privileges and franchises material to the conduct of
its  business;  provided  that the  foregoing  shall not  prohibit  any  merger,
consolidation, liquidation or dissolution permitted under Section 6.03.

     SECTION 5.04 Payment of Obligations.  The Company will, and will cause each
of the Subsidiaries to, pay its obligations, including tax liabilities, that, if
not paid, could result in a Material Adverse Effect before the same shall become
delinquent  or in default,  except where (a) the  validity or amount  thereof is
being  contested in good faith by  appropriate  proceedings,  (b) the Company or
such  Subsidiary  has set  aside on its books  adequate  reserves  with  respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.

     SECTION 5.05  Maintenance of Properties;  Insurance.  The Company will, and
will  cause each of the  Subsidiaries  to, (a) keep and  maintain  all  property
material to the conduct of its  business in good  working  order and  condition,
ordinary wear and tear excepted,  and (b) maintain,  with financially  sound and
reputable insurance companies,  insurance in such amounts and against such risks
as are  customarily  maintained  by  companies  engaged  in the same or  similar
businesses operating in the same or similar locations.

     SECTION 5.06 Books and Records;  Inspection  Rights.  The Company will, and
will cause each of the  Subsidiaries to, keep proper books of record and account
in  which  full,  true  and  correct  entries  are  made  of  all  dealings  and
transactions in relation to its business and  activities.  The Company will, and
will cause each of the Subsidiaries to, permit any representatives designated by
the Administrative  Agent or any Lender,  upon reasonable prior notice, to visit
and inspect its  properties,  to examine  and make  extracts  from its books and
records,  and to discuss its affairs,  finances and condition  with its officers
and  independent  accountants,  all at such  reasonable  times  and as  often as
reasonably requested.

     SECTION 5.07 Compliance with Laws. The Company will, and will cause each of
the Subsidiaries to, comply with all Requirements of Law applicable to it or its
property,  except where the failure to do so,  individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

     SECTION 5.08 Use of  Proceeds.  The proceeds of the Loans will be used only
for (a) initially,  financing the  acquisition  of Tejas Gas L.L.C.  and to back
commercial paper issued for such acquisition and (b) after such acquisition, for
general  partnership  purposes.  No part of the proceeds of any Loan has been or
will be used,  whether  directly or  indirectly,  for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations T, U and
X.


                                       42
<PAGE>


     SECTION 5.09 Further Assurances. The Company will cure promptly any defects
in the creation and issuance of any Notes and the execution and delivery of this
Agreement.  The Company at its expense will promptly  execute and deliver to the
Administrative  Agent upon  request  all such other  documents,  agreements  and
instruments  to comply with or accomplish  the  covenants and  agreements of the
Company in this Agreement and the other Loan Documents to which the Company is a
party.

     SECTION 5.10  Performance  of  Obligations.  The Company will pay the Loans
according to the reading,  tenor and effect thereof; and the Company will do and
perform  every act and  discharge  all of the  Obligations  to be performed  and
discharged  by it under this  Agreement,  at the time or times and in the manner
specified.

     SECTION  5.11 Lines of  Business.  The  Company  will,  and will cause each
Subsidiary  to, be and remain  engaged in only those  lines of business in which
the Company and such Subsidiaries are engaged on the date of this Agreement, any
additional lines of business reasonably related thereto, and no others.

     SECTION 5.12  Intercompany  Notes.  The Company will cause each  Subsidiary
(other than Subsidiaries which conduct no business, have minimal assets and have
no  Indebtedness  owing to the  Company)  or each other  Affiliate  to execute a
promissory note in favor of the Company in an original principal amount equal to
the  actual  amount  from  time  to time  outstanding  of  Indebtedness  of such
Subsidiary  or other  Affiliate  to the  Company  (being the sum of the  amounts
specified pursuant to clause (i) of the next sentence),  and dated September 29,
1999 in the case of the  Subsidiaries  in existence on such date, in the case of
any other Subsidiary,  the date such Person becomes a Subsidiary and in the case
of any  other  Affiliate,  the  first  date on which  any such  Indebtedness  is
incurred by such other Affiliate  (collectively,  the "Intercompany Notes"). The
Company  will  maintain  accounts in which it shall record (i) the amount of the
proceeds of each Loan, and each other amount, from time to time advanced to such
Subsidiary or such Affiliate;  (ii) the interest rate applicable to such advance
or  payment;  and (iii)  each  payment of  principal  or  interest  made by such
Subsidiary or other Affiliate.

                                  ARTICLE VI.
                               NEGATIVE COVENANTS

     Until the  Commitments  have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full, the
Company covenants and agrees with the Lenders that:

     SECTION 6.01  Indebtedness.  The Company will not permit any  Subsidiary to
create, incur, assume or permit to exist any Indebtedness, except:

          (a) in the case of OLP "B,"  Indebtedness  under  the  Related  Credit
Agreement;

          (b) in the case of OLP "B," Indebtedness in respect of the Bonds;

          (c) in the case of SFPP,  Indebtedness  in  respect  of the SFPP First
Mortgage  Notes,  but not  any  extension,  refinancing,  renewal  or  refunding
thereof,  except (i) with  Indebtedness of SFPP owing solely to the Company,  or
(ii) if the Company shall furnish to the


                                       43
<PAGE>


Administrative Agent an opinion of the Company's  independent public accountants
to the effect that any such extension, refinancing, renewal or refunding thereof
solely with  Indebtedness of SFPP owing to the Company as contemplated by clause
(i) above would  cause an  acceleration  of any tax  liabilities  of  Burlington
Northern Santa Fe Corporation or any of its Affiliates under applicable  federal
tax law, then SFPP may refinance,  renew or refund not more than  $79,557,000 of
such Indebtedness with unsecured Indebtedness owing to one or more Persons other
than the Company;

          (d) not in  excess  of  $175,000,000  aggregate  principal  amount  of
Indebtedness  of Plantation Pipe Line at any time  outstanding,  if it becomes a
Subsidiary;

          (e) in the case of any Person (other than  Plantation  Pipe Line) that
becomes a Subsidiary,  Indebtedness  existing at the time such Person  becomes a
Subsidiary and not incurred in contemplation thereof (which for purposes of this
Agreement  shall be deemed to be  incurred  at the time  such  Person  becomes a
Subsidiary),  Indebtedness  assumed by any  Subsidiary  in  connection  with its
acquisition  (whether  by  merger,   consolidation  or  acquisition  of  all  or
substantially all of the assets) of another Person and Indebtedness  refinancing
(but not increasing) such  Indebtedness,  provided that at the time of and after
giving  effect  to  the  incurrence  or  assumption  of  such   Indebtedness  or
refinancing  Indebtedness  and the application of the proceeds  thereof,  as the
case may be, the aggregate principal amount of all such Indebtedness, and of all
Indebtedness  previously  incurred or assumed  pursuant to this Section 6.01(e),
and then outstanding, shall not exceed 50% of Consolidated EBITDA for the period
of four full  fiscal  quarters of the  Company  and the  Subsidiaries  (and such
Person on a pro  forma  basis)  then most  recently  ended in  respect  of which
financial  statements  shall have been delivered  pursuant to Section 5.01(a) or
(b), as the case may be;

          (f) Indebtedness of any Subsidiary to the Company; and

          (g)  in  the  case  of  any  Subsidiary,  Indebtedness  not  otherwise
permitted by Section  6.01(a),  (b), (c), (d), (e) or (f),  provided that at the
time of and after giving effect to the incurrence of such  Indebtedness  and the
application of the proceeds  thereof the aggregate  principal amount of all such
Indebtedness,  and of all  Indebtedness  previously  incurred  pursuant  to this
Section  6.01(g),  and then  outstanding,  shall not exceed 25% of  Consolidated
EBITDA  for the  period of four full  fiscal  quarters  of the  Company  and the
Subsidiaries  then most recently ended in respect of which financial  statements
shall have been  delivered  pursuant to Section  5.01(a) or (b), as the case may
be;

provided,  however,  that no  Subsidiary  shall  create,  incur  or  assume  any
indebtedness  pursuant  to any  provision  of this  Section  6.01 if an Event of
Default  shall  have  occurred  and be  continuing  or would  result  from  such
creation, incurrence or assumption.

     SECTION  6.02  Liens.  The  Company  will  not,  and  will not  permit  any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter  acquired by it, or assign or sell any income or
revenues  (including  accounts  receivable) or rights in respect of any thereof,
except:

          (a) Permitted Encumbrances;


                                       44
<PAGE>


          (b) any Lien on any property or asset of the Company or any Subsidiary
(i) existing on the date hereof and set forth in Schedule  6.02;  provided  that
(A) such Lien shall not extend to any other  property or asset of the Company or
such Subsidiary and (B) such Lien shall secure only those  obligations  which it
secures on the date hereof and (ii) any Lien required to be created  pursuant to
Section 2.06(a), 2.06(k), 2.10 or 7.01 of the Related Credit Agreement;

          (c) Liens on  properties  or assets of SFPP  securing  the SFPP  First
Mortgage Notes; and

          (d) Liens  existing on any property or asset prior to the  acquisition
thereof by the Company or any Subsidiary or existing on any property or asset of
any Person that  becomes a  Subsidiary  after the date hereof  prior to the time
such Person becomes a Subsidiary and securing Indebtedness permitted by Sections
6.01(d) and/or (e) in an aggregate  principal amount at any one time outstanding
not in excess of  $100,000,000;  provided  that (i) such Lien is not  created in
contemplation  of or in connection with such acquisition or such Person becoming
a  Subsidiary,  as the case may be,  (ii) such Lien shall not apply to any other
property  or assets of the  Company  or any  Subsidiary,  (iii)  such Lien shall
secure only those  obligations  which it secures on the date of such acquisition
or the  date  such  Person  becomes  a  Subsidiary,  as the  case  may  be,  and
extensions,   renewals  and  replacements  thereof  that  do  not  increase  the
outstanding  principal  amount  thereof,  and (iv) after  giving  effect to such
acquisition or such Person becoming a Subsidiary,  the  Indebtedness  secured by
such Lien would be permitted by Sections 6.01(d) and/or (e).

     SECTION 6.03 Fundamental Changes. The Company will not, and will not permit
any Subsidiary to, merge into or  consolidate  with any other Person,  or permit
any other Person to merge into or consolidate with it, or sell, transfer,  lease
or otherwise  dispose of (in one transaction or in a series of transactions) all
(or  substantially  all) of its assets, or all or substantially all of the stock
of or other equity interest in any of the  Subsidiaries  (in each case,  whether
now owned or hereafter acquired),  or liquidate or dissolve,  unless: (a) at the
time thereof and immediately  after giving effect thereto no Event of Default or
Default shall have occurred and be continuing and (b) if the Company is involved
in any such  transaction the Company is the surviving entity or the recipient of
any such  sale,  transfer,  lease  or other  disposition  of  assets;  provided,
however, that in no event shall any such merger, consolidation,  sale, transfer,
lease or other  disposition  whether or not otherwise  permitted by this Section
6.03,  have the effect of releasing the Company from any of its  obligations and
liabilities under this Agreement.

     SECTION 6.04 Restricted Payments. The Company will not, and will not permit
any of the Subsidiaries  to, declare or make, or agree to pay or make,  directly
or indirectly, any Restricted Payment.

     SECTION 6.05 Transactions  with Affiliates.  The Company will not, and will
not permit any of the  Subsidiaries  to, sell,  lease or otherwise  transfer any
property or assets to, or purchase,  lease or otherwise  acquire any property or
assets from,  or otherwise  engage in any other  transactions  with,  any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Company or such  Subsidiary  than could
be  obtained  on  an  arm's-length  basis  from  unrelated  third  parties,  (b)
transactions between or among the Company and the Subsidiaries not involving any
other Affiliate, (c) any payment


                                       45
<PAGE>


which  would  constitute  a  Restricted  Payment  but  for  the  proviso  to the
definition  of said  term in  Section  1.01 and (d) loans  and  advances  by the
Company to the General  Partner to enable the General Partner to pay general and
administrative  costs and expenses pursuant to the partnership  agreement of the
Company and in accordance with past practices.

     SECTION  6.06  Restrictive  Agreements.  The Company will not, and will not
permit any of the Subsidiaries to, directly or indirectly,  enter into, incur or
permit to exist any agreement or other arrangement that prohibits,  restricts or
imposes any  condition  upon the ability of any  Subsidiary  to pay dividends or
other  distributions  with respect to any shares of its Capital Stock or to make
or repay loans or advances to the Company or any other such Subsidiary, provided
that the foregoing shall not apply to (a) restrictions and conditions imposed by
law or by this Agreement,  the Existing  Credit  Agreement or the Related Credit
Agreement,  (b) customary  restrictions  and conditions  contained in agreements
relating  to  the  sale  of  a  Subsidiary  pending  such  sale,  provided  such
restrictions  and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted  hereunder,  (c) restrictions and conditions  existing on
the date hereof identified on Schedule 6.06 (but shall apply to any extension or
renewal of, or any  amendment or  modification  expanding the scope of, any such
restriction or condition) and (d) restrictions  and conditions  contained in the
agreement pursuant to which the SFPP First Mortgage Notes were issued.

     SECTION  6.07  Financial  Covenants.  The Company  will observe each of the
following requirements:

          (a) Ratio of Consolidated  Indebtedness to  Consolidated  EBITDA.  The
Company will not at any time permit the ratio of Consolidated  Indebtedness then
outstanding to  Consolidated  EBITDA for the period of four full fiscal quarters
most recently  ended in respect of which  financial  statements  shall have been
delivered  pursuant to Section 5.01(a) or (b), as the case may be, to exceed (i)
4.25 to 1.0 in the case of (x) such ratio (calculated as of any date on or after
February 21, 2002 and prior to the date on which the following  clause (y) shall
first apply) of  Consolidated  Indebtedness  then  outstanding  to  Consolidated
EBITDA  for  such  period  ended  December  31,  2001,  and (y)  such  ratio  of
Consolidated  Indebtedness  then  outstanding  to  Consolidated  EBITDA for such
periods  ended  March 31 and June 30,  2002,  and (ii) 4.0 to 1.0 in the case of
such ratio of Consolidated  Indebtedness then outstanding to Consolidated EBITDA
for each such period ended thereafter.  For purposes of this Section 6.07(a), if
during any period  the  Company  acquires  any  Person (or any  interest  in any
Person)  or all or  substantially  all of the assets of any  Person,  the EBITDA
attributable to such assets or an amount equal to the percentage of ownership of
the  Company in such  Person  times the EBITDA of such  Person,  for such period
determined  on a pro forma basis (which  determination,  in each case,  shall be
subject to approval of the Required  Lenders,  not to be unreasonably  withheld)
may be included as Consolidated  EBITDA for such period,  if on the date of such
acquisition  no  Indebtedness  (other than  Indebtedness  permitted  pursuant to
Section 6.01) is incurred by reason of and giving effect to such acquisition and
such  Person,  or the entity  acquiring  such  assets,  as the case may be, is a
Subsidiary.  For  purposes of  ascertaining  whether the  Required  Lenders have
approved a  determination  of EBITDA  attributable  to acquired  assets,  or the
assets of an acquired  Person,  for  inclusion  in  Consolidated  EBITDA for any
period  pursuant to the foregoing  sentence,  a Lender which has not,  within 10
days after its receipt of the certificate of a Responsible  Officer  required by
the last  sentence of Section 5.01,  objected to the  inclusion in  Consolidated
EBITDA as set


                                       46
<PAGE>


forth therein of an amount of EBITDA attributable to such acquired assets or the
assets  of such  acquired  Person,  as the case may be,  shall be deemed to have
approved both the  determination  of such amount of EBITDA so included,  and the
inclusion thereof in Consolidated EBITDA pursuant to the foregoing sentence.

          (b) Ratio of Consolidated EBITDA to Consolidated Interest Expense. The
Company  will not at any time  permit the ratio of  Consolidated  EBITDA for the
four full fiscal quarters then most recently ended in respect of which financial
statements shall have been delivered  pursuant to Section 5.01(a) or (b), as the
case may be, to Consolidated Interest Expense for such four full fiscal quarters
to be less than 3.50 to 1.0.

     SECTION 6.08  Amendments  to Certain  Agreements.  The Company will not and
will not permit any Subsidiary to amend its  partnership  agreement or operating
agreement  or in the case of SFPP,  the SFPP  First  Mortgage  Notes or the Note
Agreement pursuant to which such First Mortgage Notes were issued, in each case,
in any manner that could reasonably be expected to be adverse to the Lenders.

                                  ARTICLE VII.
                                EVENTS OF DEFAULT

     SECTION 7.01 Events of Default and Remedies. If any of the following events
("Events of Default") shall occur and be continuing:

          (a) the  principal  of any Loan shall not be paid when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

          (b) any  interest  on any Loan or any fee or any other  amount  (other
than an amount  referred to in clause (a) of this  Article)  payable  under this
Agreement  or any other Loan  Document  shall not be paid,  when and as the same
shall become due and payable,  and such failure shall continue  unremedied for a
period of three days;

          (c) any  representation  or warranty  made or, for purposes of Article
III, deemed made by or on behalf of the Company herein,  at the direction of the
Company  or by the  Company  in any  other  Loan  Document  or in any  document,
certificate or financial  statement  delivered in connection with this Agreement
or any other Loan  Document  shall prove to have been  incorrect in any material
respect when made or deemed made or reaffirmed, as the case may be;

          (d) the  Company  shall  fail to  observe  or  perform  any  covenant,
condition or agreement contained in Section 5.01(d)(iii),  5.03 (with respect to
the Company's existence) or 5.08 or in Article VI;

          (e) the  Company  shall fail to perform  or  observe  any other  term,
covenant or agreement contained in this Agreement (other than those specified in
Section 7.01(a),  Section 7.01(b) or Section 7.01(d)) or any other Loan Document
to which it is a party and, in any event,  such failure shall remain  unremedied
for 30 calendar days after the earlier of (i) written


                                       47
<PAGE>


notice  of  such   failure   shall  have  been  given  to  the  Company  by  the
Administrative  Agent or any Lender or, (ii) an officer of the  Company  becomes
aware of such failure;

          (f) other than as specified in Section 7.01(a) or (b), (i) the Company
or any Subsidiary  fails to make (whether as primary  obligor or as guarantor or
other  surety) any payment of principal  of, or interest or premium,  if any, on
any item or items of Indebtedness (other than as specified in Section 7.01(a) or
Section  7.01(b)) or any payment in respect of any Hedging  Agreement beyond any
period of grace provided with respect thereto (not to exceed 30 days);  provided
that the aggregate  outstanding  principal amount of all Indebtedness or payment
obligations  in respect  of all  Hedging  Agreements  as to which such a payment
default shall occur and be continuing is equal to or exceeds $5,000,000, or (ii)
the Company or any Subsidiary fails to duly observe,  perform or comply with any
agreement  with any Person or any term or condition of any  instrument,  if such
failure,  either  individually  or in the aggregate,  shall have caused or shall
have the ability to cause the  acceleration of the payment of Indebtedness  with
an aggregate face amount which is equal to or exceeds $5,000,000;  provided that
this Section 7.01(f) shall not apply to secured Indebtedness that becomes due as
a result of the  voluntary  sale or transfer of the property or assets  securing
such Indebtedness so long as such Indebtedness is paid in full when due;

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

          (h) the Company or any Subsidiary  shall (i) voluntarily  commence any
proceeding or file any petition seeking liquidation, winding-up,  reorganization
or other  relief  under any Federal,  state or foreign  bankruptcy,  insolvency,
receivership  or similar law now or  hereafter  in effect,  (ii)  consent to the
institution  of, or fail to  contest  in a timely and  appropriate  manner,  any
proceeding or petition described in Section 7.01(g),  (iii) apply for or consent
to the appointment of a receiver, trustee, custodian, sequestrator,  conservator
or similar  official for the Company or any Subsidiary or for a substantial part
of its assets,  (iv) file an answer  admitting  the  material  allegations  of a
petition filed against it in any such proceeding,  (v) make a general assignment
for the  benefit  of  creditors  or (vi)  take any  action  for the  purpose  of
effecting any of the foregoing;

          (i) the  Company  or any  Subsidiary  shall  become  unable,  admit in
writing or fail generally to pay its debts as they become due;

          (j) the General  Partner fails to make (whether as primary  obligor or
as  guarantor  or other  surety)  any  payment of  principal  of, or interest or
premium, if any, on any item or items of Indebtedness beyond any period of grace
provided  with  respect  thereto  (not to  exceed 30  days);  provided  that the
aggregate outstanding principal amount of all such


                                       48
<PAGE>


Indebtedness as to which such a payment default shall occur and be continuing is
equal to or exceeds $10,000,000;

          (k) one or more  judgments  for the  payment of money in an  aggregate
amount in excess of  $10,000,000  shall be  rendered  against the  Company,  any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive  days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any  assets of the  Company  or any  Subsidiary  to  enforce  any such
judgment;

          (l) an ERISA Event  shall have  occurred  that,  in the opinion of the
Required  Lenders,  when taken  together  with all other ERISA  Events that have
occurred, could reasonably be expected to result in liability of the Company and
the  Subsidiaries in an aggregate amount exceeding (i) $5,000,000 in any year or
(ii) $10,000,000 for all periods;

then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing,  the  Administrative  Agent, may, and upon the written
request of the Required Lenders shall, by written notice  (including notice sent
by  telecopy)  to the  Company (a "Notice  of  Default")  take any or all of the
following actions,  without prejudice to the rights of the Administrative Agent,
any  Lender or other  holder of any of the  Obligations  to  enforce  its claims
against the Company  (provided that, if an Event of Default specified in Section
7.01(g) or  Section  7.01(h)  shall  occur  with  respect to the  Company or any
Subsidiary,  the  result of which  would  occur  upon the  giving of a Notice of
Default as  specified in clauses (i) and (ii) below,  shall occur  automatically
without the giving of any Notice of Default):  (i) declare the Total  Commitment
terminated,  whereupon the Commitments of the Lenders shall forthwith  terminate
immediately and any accrued facility fees shall forthwith become due and payable
without any other  notice of any kind;  (ii)  declare the  principal  of and any
accrued  interest in respect of all Loans, and all the other  Obligations  owing
hereunder and under the other Loan  Documents,  to be,  whereupon the same shall
become, forthwith due and payable without presentment,  demand, notice of demand
or of dishonor and nonpayment,  protest,  notice of protest, notice of intent to
accelerate,  declaration  or notice of  acceleration  or any other notice of any
kind,  all of which are hereby  waived by the  Company;  and (iii)  exercise any
rights or remedies under the Loan Documents.

     SECTION 7.02 Other Remedies. Upon the occurrence and during the continuance
of any Event of Default, the Administrative  Agent, acting at the request of the
Required Lenders, may proceed to protect and enforce its rights,  either by suit
in equity or by action at law or both,  whether for the specific  performance of
any  covenant or  agreement  contained  in this  Agreement  or in any other Loan
Document or in aid of the exercise of any power granted in this  Agreement or in
any other Loan  Document;  or may  proceed to enforce the payment of all amounts
owing to the  Administrative  Agent and the Lenders under the Loan Documents and
interest  thereon in the manner set forth herein or therein;  it being  intended
that no remedy  conferred  herein or in any of the other Loan Documents is to be
exclusive of any other remedy,  and each and every remedy contained herein or in
any other Loan Document  shall be  cumulative  and shall be in addition to every
other remedy given hereunder and under the other Loan Documents now or hereafter
existing at law or in equity or by statute or otherwise.


                                       49
<PAGE>


     SECTION 7.03 Application of Moneys During Continuation of Event of Default.

          (a) So long as an Event of Default of which the  Administrative  Agent
shall have given notice to the Lenders shall  continue,  all moneys  received by
the Administrative Agent from the Company under the Loan Documents shall, except
as otherwise required by law, be distributed by the Administrative  Agent on the
dates selected by the Administrative Agent (individually,  a "Distribution Date"
and collectively, the "Distribution Dates") as follows:

          first,  to  payment  of  the  unreimbursed   expenses  for  which  the
          Administrative  Agent or any Lender is to be  reimbursed  pursuant  to
          Section  9.03  and  unpaid  fees  owing  to the  Administrative  Agent
          pursuant to the Fee Letter;

          second,  to the ratable  payment of accrued but unpaid interest on the
          Obligations;

          third, to the ratable payment of unpaid principal of the Obligations;

          fourth,  to the ratable  payment of all other  amounts  payable by the
          Company hereunder;

          fifth,  to the  ratable  payment of all other  Obligations,  until all
          Obligations shall have been paid in full; and

          finally,  to payment to the Company,  or its successors or assigns, or
          as a court of competent  jurisdiction may direct,  of any surplus then
          remaining from such proceeds.

          (b) The term  "unpaid"  as used in this  Section  7.03  shall mean all
Obligations   outstanding  as  of  a   Distribution   Date  as  to  which  prior
distributions  have not been made, after giving effect to any adjustments  which
are made pursuant to Section 9.09 of which the  Administrative  Agent shall have
been notified.

                                 ARTICLE VIII.
                            THE ADMINISTRATIVE AGENT

     SECTION  8.01  Appointment,  Powers  and  Immunities.  Each  Lender  hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder  and  under  the  other  Loan   Documents  with  such  powers  as  are
specifically  delegated  to the  Administrative  Agent  by  the  terms  of  this
Agreement and such other Loan Documents,  together with such other powers as are
reasonably  incidental thereto.  The Administrative Agent (which term as used in
this  sentence and in Section 8.05 and the first  sentence of Section 8.06 shall
include  reference to its Affiliates and its  Affiliates'  officers,  directors,
employees, attorneys, accountants, experts and agents): (a) shall have no duties
or responsibilities except those expressly set forth in the Loan Documents,  and
shall not by reason of the Loan  Documents  be a trustee  or  fiduciary  for any
Lender;  (b) makes no  representation or warranty to any Lender and shall not be
responsible  to the Lenders for any  recitals,  statements,  representations  or
warranties contained in this Agreement,  or in any certificate or other document
referred  to or  provided  for  in,  or  received  by any of  them  under,  this
Agreement, or for the value, validity,  effectiveness,  genuineness,  execution,
legality, enforceability or sufficiency of this Agreement, any other Loan


                                       50
<PAGE>


Document or any other document  referred to or provided for herein or therein or
for  any  failure  by  the  Company  or  any  other   Person   (other  than  the
Administrative  Agent) to perform any of its obligations hereunder or thereunder
or for the  existence  or value of, or the  perfection  or  priority of any Lien
upon,  any  collateral  security  or the  financial  or other  condition  of the
Company, the Subsidiaries or any other obligor or guarantor; (c) except pursuant
to Section 8.07 shall not be required to initiate or conduct any  litigation  or
collection  proceedings  hereunder;  and (d)  shall not be  responsible  for any
action taken or omitted to be taken by it hereunder or under any other  document
or  instrument  referred to or  provided  for herein or in  connection  herewith
including  its own  ordinary  negligence,  except for its own gross  negligence,
willful  misconduct or unlawful  conduct.  The  Administrative  Agent may employ
agents, accountants,  attorneys and experts and shall not be responsible for the
negligence or misconduct of any such agents,  accountants,  attorneys or experts
selected by it in good faith or any action  taken or omitted to be taken in good
faith by it in accordance with the advice of such agents, accountants, attorneys
or experts.  The Administrative  Agent may deem and treat the payee named in any
Note as the holder  thereof for all purposes  hereof  unless and until a written
notice of the assignment or transfer thereof permitted hereunder shall have been
filed with the Administrative  Agent. The Administrative  Agent is authorized to
release any cash  collateral  that is permitted  to be released  pursuant to the
terms of this Agreement.

     SECTION 8.02 Reliance by  Administrative  Agent. The  Administrative  Agent
shall be entitled to rely upon any certification,  notice or other communication
(including  any  thereof by  telephone,  telex,  telecopier,  telegram or cable)
believed  by it to be genuine  and correct and to have been signed or sent by or
on behalf of the proper  Person or Persons,  and upon advice and  statements  of
legal  counsel,  independent  accountants  and  other  experts  selected  by the
Administrative Agent in good faith.

     SECTION 8.03 Defaults;  Events of Default.  The Administrative  Agent shall
not be deemed to have  knowledge of the  occurrence  of a Default or an Event of
Default  (other than the  non-payment of principal of or interest on Loans or of
fees) unless the  Administrative  Agent has received notice from a Lender or the
Company specifying such Default or Event of Default and stating that such notice
is a "Notice of Default." In the event that the  Administrative  Agent  receives
such  a  notice  of the  occurrence  of a  Default  or  Event  of  Default,  the
Administrative  Agent shall give prompt  notice  thereof to the Lenders.  In the
event of a payment Default or Event of Default,  the Administrative  Agent shall
give each Lender prompt notice of each such payment Default or Event of Default.

     SECTION 8.04 Rights as a Lender.  With respect to its  Commitments  and the
Loans  made  by  it,   JPMorgan   Chase  Bank  (and  any  successor   acting  as
Administrative  Agent) in its capacity as a Lender hereunder shall have the same
rights and powers  hereunder  as any other  Lender and may  exercise the same as
though it were not acting as the Administrative  Agent, and the term "Lender" or
"Lenders"  shall,   unless  the  context   otherwise   indicates,   include  the
Administrative  Agent in its individual  capacity.  JPMorgan Chase Bank (and any
successor acting as Administrative Agent) and its Affiliates may (without having
to account  therefor  to any Lender)  accept  deposits  from,  lend money to and
generally  engage  in any kind of  banking,  trust or  other  business  with the
Company  (and  any  of  its  Affiliates)  as  if  it  were  not  acting  as  the
Administrative Agent. JPMorgan Chase Bank and its Affiliates may accept fees and
other


                                       51
<PAGE>


consideration from the Company for services in connection with this Agreement or
otherwise without having to account for the same to the Lenders.

     SECTION  8.05   INDEMNIFICATION.   THE  LENDERS   AGREE  TO  INDEMNIFY  THE
ADMINISTRATIVE  AGENT, THE SYNDICATION AGENT AND THE DOCUMENTATION AGENT RATABLY
IN ACCORDANCE WITH THEIR  APPLICABLE  PERCENTAGES  FOR THE INDEMNITY  MATTERS AS
DESCRIBED IN SECTION 9.03 TO THE EXTENT NOT  INDEMNIFIED  OR  REIMBURSED  BY THE
COMPANY UNDER SECTION 9.03, BUT WITHOUT  LIMITING THE OBLIGATIONS OF THE COMPANY
UNDER  SAID  SECTION  9.03 AND FOR ANY AND ALL OTHER  LIABILITIES,  OBLIGATIONS,
LOSSES,  DAMAGES,  PENALTIES,  ACTIONS,  JUDGMENTS,  SUITS,  COSTS,  EXPENSES OR
DISBURSEMENTS  OF ANY  KIND AND  NATURE  WHATSOEVER  WHICH  MAY BE  IMPOSED  ON,
INCURRED BY OR ASSERTED AGAINST THE ADMINISTRATIVE  AGENT, THE SYNDICATION AGENT
OR THE  DOCUMENTATION  AGENT IN ANY WAY  RELATING TO OR ARISING OUT OF: (A) THIS
AGREEMENT OR ANY OTHER LOAN  DOCUMENT  CONTEMPLATED  BY OR REFERRED TO HEREIN OR
THE  TRANSACTIONS  CONTEMPLATED  HEREBY,  BUT EXCLUDING,  UNLESS A DEFAULT OR AN
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, NORMAL ADMINISTRATIVE COSTS AND
EXPENSES INCIDENT TO THE PERFORMANCE OF ITS AGENCY DUTIES, IF ANY,  HEREUNDER OR
(B) THE  ENFORCEMENT  OF ANY OF THE TERMS OF THIS AGREEMENT OR OF ANY OTHER LOAN
DOCUMENT;  WHETHER OR NOT ANY OF THE  FOREGOING  SPECIFIED  IN THIS SECTION 8.05
ARISES FROM THE SOLE OR CONCURRENT  NEGLIGENCE OF THE ADMINISTRATIVE  AGENT, THE
SYNDICATION AGENT OR THE DOCUMENTATION  AGENT, AS THE CASE MAY BE; PROVIDED THAT
NO LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE FROM
THE  GROSS   NEGLIGENCE,   WILLFUL   MISCONDUCT  OR  UNLAWFUL   CONDUCT  OF  THE
ADMINISTRATIVE AGENT, THE SYNDICATION AGENT OR THE DOCUMENTATION AGENT.

     SECTION  8.06  Non-Reliance  on  Agents  and  other  Lenders.  Each  Lender
acknowledges and agrees that it has,  independently  and without reliance on the
Administrative  Agent,  the Syndication  Agent, the  Documentation  Agent or any
other  Lender,  and based on such  documents  and  information  as it has deemed
appropriate,  made its own credit  analysis of the Company and the  Subsidiaries
and its decision to enter into this Agreement,  and that it will,  independently
and without reliance upon the  Administrative  Agent, the Syndication Agent, the
Documentation  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
analysis  and  decisions in taking or not taking  action  under this  Agreement.
Neither the  Administrative  Agent, the Syndication  Agent nor the Documentation
Agent  shall be  required  to keep  itself  informed  as to the  performance  or
observance  by the Company of this  Agreement,  the other Loan  Documents or any
other  document  referred to or provided for herein or to inspect the properties
or books of the Company.  Except for notices,  reports and other  documents  and
information   expressly   required  to  be  furnished  to  the  Lenders  by  the
Administrative   Agent  hereunder,   neither  the   Administrative   Agent,  the
Syndication  Agent  nor  the   Documentation   Agent  shall  have  any  duty  or
responsibility  to  provide  any  Lender  with any  credit or other  information
concerning the affairs, financial


                                       52
<PAGE>


condition or business of the Company (or any of its  Affiliates)  which may come
into the possession of the  Administrative  Agent,  the Syndication  Agent,  the
Documentation  Agent or any of its respective  Affiliates.  In this regard, each
Lender acknowledges that Vinson & Elkins L.L.P. is acting in this transaction as
special counsel to the Administrative  Agent only. Each Lender will consult with
its own legal counsel to the extent that it deems  necessary in connection  with
this Agreement and other Loan Documents and the matters  contemplated herein and
therein.

     SECTION  8.07 Action by  Administrative  Agent.  Except for action or other
matters  expressly   required  of  the  Administrative   Agent  hereunder,   the
Administrative  Agent  shall in all  cases  be fully  justified  in  failing  or
refusing to act hereunder unless it shall (a) receive written  instructions from
the  Required  Lenders (or all of the Lenders as  expressly  required by Section
9.02)  specifying  the  action  to be  taken,  and  (b)  be  indemnified  to its
satisfaction by the Lenders against any and all liability and expenses which may
be incurred by it by reason of taking or continuing to take any such action. The
instructions  of the  Required  Lenders  (or  all of the  Lenders  as  expressly
required  by  Section  9.02) and any action  taken or  failure  to act  pursuant
thereto by the Administrative Agent shall be binding on all of the Lenders. If a
Default or Event of Default has occurred and is continuing,  the  Administrative
Agent shall take such action with respect to such Default or Event of Default as
shall be directed by the Required  Lenders (or all of the Lenders as required by
Section 9.02) in the written  instructions (with indemnities)  described in this
Section 8.07;  provided that,  unless and until the  Administrative  Agent shall
have received such directions,  the  Administrative  Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such  Default  or Event of Default  as it shall  deem  advisable  in the best
interests of the Lenders. In no event,  however,  shall the Administrative Agent
be  required  to take any  action  which  exposes  the  Administrative  Agent to
personal liability or which is contrary to this Agreement or applicable law.

     SECTION 8.08 Resignation or Removal of Administrative Agent. Subject to the
appointment  and  acceptance  of a  successor  Administrative  Agent as provided
below, the Administrative  Agent may resign at any time by giving notice thereof
to the Lenders and the Company,  and the Administrative  Agent may be removed at
any  time  with  or  without  cause  by the  Required  Lenders.  Upon  any  such
resignation or removal,  the Required  Lenders shall have the right to appoint a
successor  Administrative Agent. If no successor Administrative Agent shall have
been  so  appointed  by the  Required  Lenders  and  shall  have  accepted  such
appointment  within thirty (30) days after the retiring  Administrative  Agent's
giving of notice of resignation or the Required Lenders' removal of the retiring
Administrative  Agent, then the retiring  Administrative Agent may, on behalf of
the Lenders,  appoint a successor  Administrative  Agent. Upon the acceptance of
such appointment  hereunder by a successor  Administrative Agent, such successor
Administrative  Agent shall thereupon  succeed to and become vested with all the
rights, powers,  privileges and duties of the retiring Administrative Agent, and
the  retiring  Administrative  Agent  shall be  discharged  from its  duties and
obligations hereunder.  After any retiring Administrative Agent's resignation or
removal hereunder as  Administrative  Agent, the provisions of this Article VIII
and  Section  9.03 shall  continue  in effect for its  benefit in respect of any
actions  taken  or  omitted  to be  taken  by it  while  it  was  acting  as the
Administrative Agent.

     SECTION  8.09  Duties  of  Syndication  Agent  and   Documentation   Agent.
Notwithstanding  the indemnity of the  Syndication  Agent and the  Documentation
Agent  contained in Section 8.05 and in Section  9.03,  neither the  Syndication
Agent nor the Documentation Agent


                                       53
<PAGE>


shall have any duty,  responsibility  or liability in such capacity with respect
to the  administration  or  enforcement  of this  Agreement  or any  other  Loan
Document.

                                   ARTICLE IX.
                                  MISCELLANEOUS

     SECTION 9.01  Notices,  Etc. The  Administrative  Agent,  any Lender or the
holder of any of the Obligations, giving consent or notice or making any request
of the Company provided for hereunder,  shall notify each Lender (in the case of
the Administrative Agent) and the Administrative Agent (in the case of a Lender)
thereof.  In the event  that the  holder  of any Note or any of the  Obligations
(including  any  Lender)  shall  transfer  such  Note or  Obligations,  it shall
promptly  so advise the  Administrative  Agent which shall be entitled to assume
conclusively  that no  transfer of any Note or any of the  Obligations  has been
made by any holder  (including any Lender)  unless and until the  Administrative
Agent receives  written  notice to the contrary.  Except with respect to notices
and other  communications  expressly  permitted  to be given by  telephone,  all
notices,  consents,  requests,   approvals,  demands  and  other  communications
(collectively   "Communications")  provided  for  herein  shall  be  in  writing
(including facsimile Communications) and mailed, telecopied or delivered:

          (a) if to the Company, to it at:

               500 Dallas, Suite 1000
               Houston, Texas 77002
               Attention: C. Park Shaper
               Telecopy No: (713) 369-9499;

          (b) if to the Administrative Agent, to it at:

               270 Park Avenue, 21st Floor
               New York, New York 10017-2070
               Attention:Steven Wood
               Telecopy No.: (212) 270-3897;

          (c) If to any other  Lender,  as specified on the  signature  page for
such Lender  hereto or, in the case of any Person who becomes a Lender after the
date hereof,  as specified on the  Assignment  and  Acceptance  executed by such
Person or in the  Administrative  Questionnaire  delivered by such Person or, in
the case of any party  hereto,  such other  address or  telecopy  number as such
party may hereafter specify for such purpose by notice to the other parties.

     All  Communications  shall,  when  mailed,   telecopied  or  delivered,  be
effective when mailed by certified mail,  return receipt  requested to any party
at its address specified above, on the signature page hereof or on the signature
page of such  Assignment  and  Acceptance  (or other address  designated by such
party in a  Communication  to the other  parties  hereto),  or telecopied to any
party to the telecopy number set forth above, on the signature page hereof or on
the signature page of such  Assignment and Acceptance (or other telecopy  number
designated by such party in a  Communication  to the other parties  hereto),  or
delivered  personally  to any  party  at its  address  specified  above,  on the
signature page hereof or on the signature page of such


                                       54
<PAGE>


Assignment  and  Acceptance  (or other  address  designated  by such  party in a
Communication to the other parties hereto); provided, however, Communications to
the  Administrative  Agent  pursuant to Article II or Article  VIII shall not be
effective until received by the  Administrative  Agent and Communications to the
Administrative Agent pursuant to Article II shall be at the Principal Office.

     SECTION 9.02 Waivers; Amendments.

          (a) No failure or delay by the Administrative  Agent, or any Lender in
exercising,  and no  course  of  dealing  with  respect  to,  any right or power
hereunder  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise of any such right or power,  or any  abandonment or  discontinuance  of
steps to enforce such a right or power,  preclude any other or further  exercise
thereof or the  exercise of any other right or power.  No notice to or demand on
the Company in any case shall entitle the Company to any other or further notice
or demand in similar or other circumstances.  No waiver of any provision of this
Agreement or consent to any departure  therefrom shall in any event be effective
unless the same shall be permitted by Section  9.02(b),  and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.  Without limiting the generality of the foregoing,  the making of a
Loan shall not be  construed  as a waiver of any  Default  or Event of  Default,
regardless of whether the Administrative Agent or any Lender may have had notice
or knowledge of such Default at the time.

          (b) No  provision  of  this  Agreement  or  any  other  Loan  Document
provision may be waived,  amended or modified except pursuant to an agreement or
agreements in writing entered into by the Company and the Required Lenders or by
the  Company  and the  Administrative  Agent with the  consent  of the  Required
Lenders;  provided that no such  agreement  shall (i) increase the Commitment of
any Lender without the written consent of such Lender, (ii) reduce the principal
amount of any Loan or reduce the rate of  interest  thereon,  or reduce any fees
payable hereunder,  without the written consent of each Lender affected thereby,
(iii)  postpone the  scheduled  date of payment of the  principal  amount of any
Loan,  or any interest  thereon,  or any fees payable  hereunder,  or reduce the
amount of, waive or excuse any such payment,  or postpone the scheduled  date of
expiration  of any  Commitment,  without  the  written  consent  of each  Lender
affected  thereby,  (iv)  change  Section  2.16(b) or (c) in a manner that would
alter the pro rata  sharing of payments  required  thereby,  without the written
consent of each  Lender,  or (v) change any of the  provisions  of this  Section
9.02(b),  Section  9.05 or the  definition  of  "Required  Lenders" or any other
provision  hereof  specifying  the number or percentage  of Lenders  required to
waive,  amend or modify any rights hereunder or make any  determination or grant
any consent  hereunder,  without  the  written  consent of each Lender (it being
understood that, with the consent of Required Lenders,  additional extensions of
credit  pursuant  to this  Agreement  may be included  in the  determination  of
"Required  Lenders" and provisions  relating to the pro rata sharing of payments
on  substantially  the same basis as the  Revolving  Loans and  Commitments  are
included on the Execution  Date);  provided further that no such agreement shall
amend,  modify or  otherwise  affect the rights or duties of the  Administrative
Agent hereunder without the prior written consent of the Administrative Agent.


                                       55
<PAGE>


     SECTION 9.03 Payment of Expenses, Indemnities, etc. The Company agrees:

          (a)  whether  or  not  the   transactions   hereby   contemplated  are
consummated,  pay all  reasonable  expenses of the  Administrative  Agent in the
administration  (both before and after the execution hereof and including advice
of  counsel as to the  rights  and  duties of the  Administrative  Agent and the
Lenders  with  respect  thereto)  of, and in  connection  with the  negotiation,
syndication, investigation, preparation, execution and delivery of, recording or
filing of,  preservation  of rights  under,  enforcement  of,  and  refinancing,
renegotiation or restructuring of, the Loan Documents and any amendment,  waiver
or consent relating thereto (including,  without limitation,  travel, photocopy,
mailing,  courier,  telephone and other similar  expenses of the  Administrative
Agent,  the cost of environmental  audits,  surveys and appraisals at reasonable
intervals,  the reasonable fees and  disbursements  of counsel and other outside
consultants for the Administrative Agent and, in the case of enforcement of this
Agreement and the other Loan Documents, the reasonable fees and disbursements of
counsel,  including the allocated costs of inside counsel for the Administrative
Agent and each Lender);  and promptly reimburse the Administrative Agent for all
amounts  expended,  advanced  or  incurred  by the  Administrative  Agent or the
Lenders to satisfy any obligation of the Company under this Agreement.

          (b) TO INDEMNIFY THE ADMINISTRATIVE  AGENT, THE SYNDICATION AGENT, THE
DOCUMENTATION  AGENT AND EACH  LENDER AND EACH OF THEIR  AFFILIATES  AND EACH OF
THEIR  OFFICERS,  DIRECTORS,  EMPLOYEES,  REPRESENTATIVES,   AGENTS,  ATTORNEYS,
ACCOUNTANTS AND EXPERTS ("INDEMNIFIED PARTIES") FROM, HOLD EACH OF THEM HARMLESS
AGAINST  AND  PROMPTLY  UPON  DEMAND  PAY OR  REIMBURSE  EACH OF THEM  FOR,  THE
INDEMNITY  MATTERS  WHICH MAY BE REASONABLY  INCURRED BY OR ASSERTED  AGAINST OR
INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF THEM IS  DESIGNATED A PARTY  THERETO)
AS A RESULT  OF,  ARISING  OUT OF OR IN ANY WAY  RELATED  TO (I) ANY  ACTUAL  OR
PROPOSED  USE BY THE  COMPANY  OF THE  PROCEEDS  OF ANY OF THE  LOANS,  (II) THE
EXECUTION,  DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS, (III) THE OPERATIONS
OF THE  BUSINESS OF THE COMPANY  AND THE  SUBSIDIARIES,  (IV) THE FAILURE OF THE
COMPANY OR ANY  SUBSIDIARY TO COMPLY WITH THE TERMS OF THIS  AGREEMENT,  OR WITH
ANY REQUIREMENT OF LAW, (V) ANY INACCURACY OF ANY  REPRESENTATION  OR ANY BREACH
OF ANY  WARRANTY OF THE COMPANY SET FORTH IN ANY OF THE LOAN  DOCUMENTS  OR (VI)
ANY OTHER  ASPECT  OF THE LOAN  DOCUMENTS,  INCLUDING  THE  REASONABLE  FEES AND
DISBURSEMENTS  OF COUNSEL AND ALL OTHER  EXPENSES  INCURRED IN  CONNECTION  WITH
INVESTIGATING,   DEFENDING  OR  PREPARING  TO  DEFEND  ANY  SUCH  ACTION,  SUIT,
PROCEEDING (INCLUDING ANY INVESTIGATIONS,  LITIGATION OR INQUIRIES) OR CLAIM AND
INCLUDING ALL INDEMNITY MATTERS ARISING BY REASON OF THE ORDINARY  NEGLIGENCE OF
ANY  INDEMNIFIED  PARTY,  BUT EXCLUDING ALL INDEMNITY  MATTERS ARISING SOLELY BY
REASON OF CLAIMS BETWEEN THE LENDERS OR ANY LENDER AND THE ADMINISTRATIVE AGENT,
THE SYNDICATION  AGENT, OR THE  DOCUMENTATION  AGENT OR A LENDER'S  SHAREHOLDERS
AGAINST THE ADMINISTRATIVE AGENT OR LENDER OR BY REASON OF THE GROSS


                                       56
<PAGE>


NEGLIGENCE,   WILLFUL  MISCONDUCT  OR  UNLAWFUL  CONDUCT  ON  THE  PART  OF  THE
INDEMNIFIED PARTY SEEKING INDEMNIFICATION.

          (c) TO INDEMNIFY AND HOLD  HARMLESS FROM TIME TO TIME THE  INDEMNIFIED
PARTIES  FROM AND AGAINST ANY AND ALL LOSSES,  CLAIMS,  COST  RECOVERY  ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS,  DAMAGES AND LIABILITIES TO WHICH ANY SUCH
PERSON MAY BECOME  SUBJECT (I) UNDER ANY  ENVIRONMENTAL  LAW  APPLICABLE  TO THE
COMPANY OR ANY  SUBSIDIARY OR ANY OF THEIR  PROPERTIES OR ASSETS,  INCLUDING THE
TREATMENT  OR DISPOSAL OF HAZARDOUS  SUBSTANCES  ON ANY OF THEIR  PROPERTIES  OR
ASSETS,  (II) AS A RESULT OF THE BREACH OR  NON-COMPLIANCE BY THE COMPANY OR ANY
SUBSIDIARY  WITH  ANY  ENVIRONMENTAL  LAW  APPLICABLE  TO  THE  COMPANY  OR  ANY
SUBSIDIARY,  (III) DUE TO PAST OWNERSHIP BY THE COMPANY OR ANY SUBSIDIARY OF ANY
OF THEIR  PROPERTIES  OR ASSETS OR PAST  ACTIVITY ON ANY OF THEIR  PROPERTIES OR
ASSETS WHICH,  THOUGH LAWFUL AND FULLY  PERMISSIBLE AT THE TIME, COULD RESULT IN
PRESENT  LIABILITY,  (IV) THE  PRESENCE,  USE,  RELEASE,  STORAGE,  TREATMENT OR
DISPOSAL  OF  HAZARDOUS  SUBSTANCES  ON OR AT  ANY OF THE  PROPERTIES  OWNED  OR
OPERATED  BY THE  COMPANY  OR ANY  SUBSIDIARY,  OR (V) ANY OTHER  ENVIRONMENTAL,
HEALTH OR SAFETY  CONDITION IN  CONNECTION  WITH THE LOAN  DOCUMENTS,  PROVIDED,
HOWEVER,  THAT NO  INDEMNITY  SHALL BE AFFORDED  UNDER THIS  SECTION  9.03(c) IN
RESPECT OF ANY  PROPERTY OR ASSET FOR ANY  OCCURRENCE  ARISING  FROM THE ACTS OR
OMISSIONS  OF THE  ADMINISTRATIVE  AGENT OR ANY LENDER  DURING THE PERIOD  AFTER
WHICH SUCH PERSON,  ITS SUCCESSORS OR ASSIGNS SHALL HAVE OBTAINED  POSSESSION OF
SUCH PROPERTY OR ASSET (WHETHER BY  FORECLOSURE OR DEED IN LIEU OF  FORECLOSURE,
AS MORTGAGEE IN POSSESSION OR OTHERWISE).

          (d) No  Indemnified  Party  may  settle  any  claim to be  indemnified
without  the consent of the  indemnitor,  such  consent  not to be  unreasonably
withheld;  provided,  that the indemnitor may not reasonably withhold consent to
any settlement that an Indemnified  Party  proposes,  if the indemnitor does not
have the financial  ability to pay all its obligations  outstanding and asserted
against the  indemnitor  at that time,  including the maximum  potential  claims
against the Indemnified Party to be indemnified pursuant to this Section 9.03.

          (e) In the case of any indemnification  hereunder,  the Administrative
Agent or Lender,  as  appropriate  shall give  notice to the Company of any such
claim or demand being made against the  Indemnified  Party and the Company shall
have the  non-exclusive  right to join in the defense  against any such claim or
demand;  provided that if the Company provides a defense,  the Indemnified Party
shall  bear its own cost of  defense  unless  there is a  conflict  between  the
Company and such Indemnified Party.

          (f) THE FOREGOING  INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES
NOTWITHSTANDING  THE SOLE OR  CONCURRENT  NEGLIGENCE  OF EVERY KIND OR CHARACTER
WHATSOEVER,  WHETHER  ACTIVE  OR  PASSIVE,  WHETHER  AN  AFFIRMATIVE  ACT  OR AN
OMISSION, INCLUDING, ALL


                                       57
<PAGE>


TYPES OF NEGLIGENT  CONDUCT  IDENTIFIED IN THE RESTATEMENT  (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNIFIED  PARTIES OR BY REASON OF STRICT LIABILITY IMPOSED
WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNIFIED  PARTIES. TO THE EXTENT THAT
AN INDEMNIFIED  PARTY IS FOUND TO HAVE  COMMITTED AN ACT OF GROSS  NEGLIGENCE OR
WILLFUL MISCONDUCT OR ENGAGED IN UNLAWFUL CONDUCT,  THIS CONTRACTUAL  OBLIGATION
OF  INDEMNIFICATION  SHALL  CONTINUE BUT SHALL ONLY EXTEND TO THE PORTION OF THE
CLAIM THAT IS DEEMED TO HAVE  OCCURRED BY REASON OF EVENTS  OTHER THAN THE GROSS
NEGLIGENCE, WILLFUL MISCONDUCT OR UNLAWFUL CONDUCT OF THE INDEMNIFIED PARTY.

          (g) The  Company's  obligations  under this Section 9.03 shall survive
any  termination  of this  Agreement  and the  payment  of the  Loans  and shall
continue thereafter in full force and effect, for a period of six years.

          (h) To the extent that the Company fails to pay any amount required to
be paid by it to the  Administrative  Agent under this Section 9.03, each Lender
severally  agrees to pay to the  Administrative  Agent such Lender's  Applicable
Percentage  (determined as of the time that the applicable  unreimbursed expense
or  indemnity  payment is  sought)  of such  unpaid  amount;  provided  that the
unreimbursed  expense or indemnified loss, claim,  damage,  liability or related
expense,  as  the  case  may  be,  was  incurred  by  or  asserted  against  the
Administrative Agent in its capacity as such.

          (i) The  Company  shall pay any amounts  due under this  Section  9.03
within  thirty  (30) days of the  receipt by the Company of notice of the amount
due.

     SECTION 9.04 Successors and Assigns. The provisions of this Agreement shall
be  binding  upon and  inure to the  benefit  of the  parties  hereto  and their
respective  successors and assigns permitted hereby.  Nothing in this Agreement,
expressed or implied,  shall be construed to confer upon any Person  (other than
the parties hereto,  their  respective  successors and assigns  permitted hereby
and, to the extent expressly contemplated hereby, the Related Parties of each of
the Administrative  Agent and the Lenders) any legal or equitable right,  remedy
or claim under or by reason of this Agreement.

     SECTION 9.05 Assignments and Participations.

          (a) The Company may not assign its rights or obligations  hereunder or
under  the  Notes  without  the  prior  consent  of all of the  Lenders  and the
Administrative Agent.

          (b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations  under this Agreement  (including all or a portion of
its Commitment and the Loans at the time owing to it);  provided that (i) except
in the case of an  assignment  to a Lender or an Affiliate of a Lender,  each of
the Company and the  Administrative  Agent must give their prior written consent
to such  assignment  (which consent shall not be  unreasonably  withheld),  (ii)
except in the case of an  assignment  to a Lender or an Affiliate of a Lender or
an  assignment  of  the  entire  remaining  amount  of  the  assigning  Lender's
Commitment, the amount of the Commitment of the assigning Lender subject to each
such assignment (determined as of


                                       58
<PAGE>


the date the  Assignment  and  Acceptance  with  respect to such  assignment  is
delivered to the Administrative Agent) shall not be less than $10,000,000 unless
each of the Company and the Administrative  Agent otherwise consent,  (iii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning  Lender's  rights and obligations  under this Agreement,  (iv) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Acceptance,  together with a processing and recordation fee of
$3,500 for each such  assignment  (provided that the processing and  recordation
fee for  each  assignment  made by any  Lender  party to this  Agreement  on the
Execution  Date shall be  $2,000),  and (v) the  assignee,  if it shall not be a
Lender,   shall   deliver  to  the   Administrative   Agent  an   Administrative
Questionnaire;  provided  further  that any  consent  of the  Company  otherwise
required under this Section 9.05(b) shall not be required if an Event of Default
under Section  7.01(g) or Section  7.01(h) has occurred and is continuing.  Upon
acceptance  and  recording  pursuant  to  Section  9.05(d),  from and  after the
effective  date  specified  in each  Assignment  and  Acceptance,  the  assignee
thereunder  shall be a party hereto and, to the extent of the interest  assigned
by such Assignment and  Acceptance,  have the rights and obligations of a Lender
under this Agreement,  and the assigning Lender  thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations  under  this  Agreement  (and,  in the  case  of an  Assignment  and
Acceptance  covering all of the assigning  Lender's rights and obligations under
this Agreement,  such Lender shall cease to be a party hereto but shall continue
to be entitled  to the  benefits of Sections  2.13,  2.14,  2.15 and 9.03).  Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this  paragraph  shall be treated for purposes of this
Agreement  as a sale by such  Lender  of a  participation  in  such  rights  and
obligations in accordance with Section 9.05(e).

          (c) The Administrative  Agent,  acting for this purpose as an agent of
the Company, shall maintain at one of its offices in Charlotte, North Carolina a
copy of each  Assignment and  Acceptance  delivered to 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  pursuant to the terms
hereof from time to time (the "Register").  The entries in the Register shall be
conclusive,  and the Company, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register  pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary.  The Register  shall be available for inspection by the Company
and any Lender,  at any  reasonable  time and from time to time upon  reasonable
prior notice.

          (d) Upon its receipt of a duly  completed  Assignment  and  Acceptance
executed  by an  assigning  Lender and an  assignee,  the  assignee's  completed
Administrative  Questionnaire  (unless the  assignee  shall  already be a Lender
hereunder),  the processing and  recordation  fee referred to in Section 9.05(b)
and any written  consent to such  assignment  required by Section  9.05(b),  the
Administrative  Agent shall accept such Assignment and Acceptance and record the
information  contained therein in the Register. No assignment shall be effective
for purposes of this  Agreement  unless it has been  recorded in the Register as
provided in this paragraph.

          (e)  Any  Lender  may,  without  the  consent  of the  Company  or the
Administrative Agent, sell participations to one or more banks or other entities
(a  "Participant")  in all or a portion of such Lender's  rights and obligations
under this Agreement (including all or


                                       59
<PAGE>


a portion of its Commitment  and the Loans owing to it);  provided that (i) such
Lender's  obligations  under this Agreement  shall remain  unchanged,  (ii) such
Lender shall  remain  solely  responsible  to the other  parties  hereto for the
performance of such obligations and (iii) the Company,  the Administrative Agent
and the other  Lenders  shall  continue  to deal solely and  directly  with such
Lender in  connection  with such  Lender's  rights  and  obligations  under this
Agreement.  Any agreement or instrument  pursuant to which a Lender sells such a
participation  shall  provide  that such Lender  shall  retain the sole right to
enforce this Agreement and to approve any amendment,  modification  or waiver of
any provision of this Agreement;  provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any  amendment,  modification  or waiver  described  in the first  proviso to
Section 9.02(b) that affects such Participant.  Subject to Section 9.05(f),  the
Company  agrees  that each  Participant  shall be  entitled  to the  benefits of
Sections  2.13,  2.14 and 2.15 to the same extent as if it were a Lender and had
acquired  its  interest  by  assignment  pursuant  to  Section  9.05(b),  and be
indemnified  under  Section  9.03  as if it were a  Lender.  In  addition,  each
agreement   creating  any  participation   must  include  an  agreement  by  the
Participant to be bound by the provisions of Section 9.12.

          (f) A Participant shall not be entitled to receive any greater payment
under Section 2.13 or 2.15 than the  applicable  Lender would have been entitled
to receive with respect to the participation  sold to such  Participant,  unless
the sale of the  participation  to such  Participant  is made with the Company's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender  shall not be entitled to the benefits of Section 2.15 unless the Company
is notified of the  participation  sold to such Participant and such Participant
agrees, for the benefit of the Company, to comply with Section 2.15(e) as though
it were a Lender.

          (g) The Lenders may furnish any information  concerning the Company in
the  possession of the Lenders from time to time to assignees  and  Participants
(including prospective assignees and participants);  provided that, such Persons
agree to be bound by the provisions of Section 9.12 hereof.

          (h) Notwithstanding anything in this Section 9.05 to the contrary, any
Lender may assign and pledge its Notes to any Federal Reserve Bank or the United
States  Treasury  as  collateral  security  pursuant  to  Regulation  A and  any
operating  circular  issued by such Federal  Reserve  System and/or such Federal
Reserve  Bank.  No such  assignment  and/or  pledge shall  release the assigning
and/or pledging Lender from its obligations hereunder.

          (i)  Notwithstanding  any other  provisions  of this Section  9.05, no
transfer or  assignment  of the  interests or  obligations  of any Lender or any
grant of participations therein shall be permitted if such transfer,  assignment
or grant would require the Company to file a registration statement with the SEC
or to qualify the Loans under the "Blue Sky" laws of any state.

     SECTION 9.06 Survival; Reinstatement.

          (a) All covenants, agreements,  representations and warranties made by
the Company herein and in the  certificates  or other  instruments  delivered in
connection  with or pursuant to this Agreement  shall be considered to have been
relied upon by the other parties


                                       60
<PAGE>


hereto and shall survive the  execution  and delivery of this  Agreement and the
making of any  Loans,  regardless  of any  investigation  made by any such other
party or on its behalf and notwithstanding  that the Administrative Agent or any
Lender may have had notice or  knowledge  of any  Default or Event of Default or
incorrect  representation  or  warranty  at the  time  any  credit  is  extended
hereunder,  and shall continue in full force and effect as long as the principal
of or any accrued  interest on any Loan or any fee or any other  amount  payable
under this Agreement is outstanding and unpaid so long as the  Commitments  have
not expired or terminated.  The provisions of Sections 2.13, 2.14, 2.15 and 9.03
and Article VIII shall survive and remain in full force and effect regardless of
the consummation of the transactions  contemplated  hereby, the repayment of the
Loans,  the expiration or termination of the  Commitments or the  termination of
this Agreement or any provision hereof.

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

     SECTION 9.07 Counterparts;  Integration;  Effectiveness. This Agreement may
be  executed in  counterparts  (and by  different  parties  hereto on  different
counterparts), each of which shall constitute an original, but all of which when
taken together shall  constitute a single  contract.  This Agreement,  the other
Loan  Documents  and the Fee Letter  constitute  the entire  contract  among the
parties  hereto  relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof.  Except as provided in Section 3.01,  this Agreement shall become
effective when it shall have been executed by the Administrative  Agent and when
the  Administrative  Agent shall have received  counterparts  hereof which, when
taken  together,  bear the signatures of each of the other parties  hereto,  and
thereafter  shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.

     SECTION  9.08  Severability.  Any  provision of this  Agreement  held to be
invalid,  illegal  or  unenforceable  in  any  jurisdiction  shall,  as to  such
jurisdiction,  be  ineffective to the extent of such  invalidity,  illegality or
unenforceability without affecting the validity,  legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a  particular  jurisdiction  shall not  invalidate  such  provision in any other
jurisdiction.

     SECTION 9.09 Right of Setoff.  If an Event of Default  shall have  occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest  extent  permitted by law, to set off and apply any and all
deposits (general or special, time or demand,  provisional or final) at any time
held and  other  indebtedness  at any time  owing by such  Lender  to or for the
credit or the account of the Company  against any of and all the Obligations now
or hereafter  existing under this Agreement and the other Loan Documents held by
such  Lender,  irrespective  of whether or not such  Lender  shall have made any
demand under this Agreement and although such Obligations may be unmatured.  The
rights of each Lender under


                                       61
<PAGE>


this Section 9.09 are in addition to other rights and remedies  (including other
rights of setoff) which such Lender may have.

     SECTION 9.10 Governing Law; Jurisdiction; Consent to Service of Process.

          (a) This Agreement and the other Loan Documents  shall be construed in
accordance with and governed by the laws of the State of New York.

          (b) ANY LEGAL ACTION OR PROCEEDING  WITH RESPECT TO THIS AGREEMENT AND
THE OTHER LOAN  DOCUMENTS  MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES FOR THE SOUTHERN  DISTRICT OF NEW YORK AND, BY EXECUTION
AND DELIVERY OF THIS  AGREEMENT,  EACH OF THE PARTIES HERETO HEREBY  IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY  AND ASSETS,  UNCONDITIONALLY,
THE NON-EXCLUSIVE  JURISDICTION OF THE AFORESAID COURTS WITH RESPECT TO ANY SUCH
ACTION OR PROCEEDING.  THE COMPANY HEREBY IRREVOCABLY  DESIGNATES,  APPOINTS AND
EMPOWERS CT CORPORATION SYSTEM, INC., WITH OFFICES ON THE DATE HEREOF AT 111 8TH
AVENUE,  NEW YORK,  NEW YORK  10011,  AS ITS  DESIGNEE,  APPOINTEE  AND AGENT TO
RECEIVE  AND ACCEPT  FOR AND ON ITS  BEHALF,  AND IN  RESPECT  OF ITS  PROPERTY,
SERVICE OF ANY AND ALL LEGAL PROCESS,  SUMMONS,  NOTICES AND DOCUMENTS WHICH MAY
BE SERVED IN ANY SUCH ACTION OR  PROCEEDING.  IF FOR ANY REASON  SUCH  DESIGNEE,
APPOINTEE  AND AGENT SHALL  CEASE TO BE  AVAILABLE  TO ACT AS SUCH,  THE COMPANY
AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK, NEW YORK ON
THE  TERMS  AND  FOR  THE  PURPOSES  OF  THIS  PROVISION   SATISFACTORY  TO  THE
ADMINISTRATIVE AGENT. THE COMPANY 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 ITS ADDRESS  PROVIDED IN SECTION 9.01, SUCH SERVICE TO BECOME
EFFECTIVE THIRTY DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE  ADMINISTRATIVE  AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL  PROCEEDINGS OR OTHERWISE  PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.

          (c) THE COMPANY 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 AGREEMENT  BROUGHT IN THE
COURTS REFERRED TO IN CLAUSE (b) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES, TO
THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, 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.


                                       62
<PAGE>


          (d) EACH PARTY HERETO HEREBY (I)  IRREVOCABLY  WAIVES,  TO THE MAXIMUM
EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY ACTION
OR PROCEEDING  RELATING TO, IN CONNECTION WITH OR AS A RESULT OF THIS AGREEMENT,
ANY SPECIAL,  EXEMPLARY,  PUNITIVE OR  CONSEQUENTIAL  DAMAGES,  OR DAMAGES OTHER
THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (II) CERTIFIES THAT NO PARTY HERETO NOR
ANY  REPRESENTATIVE  OR AGENT OR COUNSEL FOR ANY PARTY  HERETO HAS  REPRESENTED,
EXPRESSLY  OR  OTHERWISE,  OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION,  SEEK TO ENFORCE THE FOREGOING WAIVERS,  AND (III) ACKNOWLEDGES THAT
IT  HAS  BEEN  INDUCED  TO  ENTER  INTO  THIS  AGREEMENT  AND  THE  TRANSACTIONS
CONTEMPLATED  HEREBY AND THEREBY BY, AMONG OTHER THINGS,  THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION 9.10.

     SECTION 9.11 WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT  PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING  DIRECTLY OR INDIRECTLY  ARISING OUT OF OR RELATING
TO THIS  AGREEMENT OR THE  TRANSACTIONS  CONTEMPLATED  HEREBY  (WHETHER BASED ON
CONTRACT,  TORT OR ANY OTHER  THEORY).  EACH PARTY HERETO (A) CERTIFIES  THAT NO
REPRESENTATIVE,  AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,  SEEK
TO  ENFORCE  THE  FOREGOING  WAIVER AND (B)  ACKNOWLEDGES  THAT IT AND THE OTHER
PARTIES  HERETO HAVE BEEN INDUCED TO ENTER INTO THIS  AGREEMENT  BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

     SECTION  9.12  Confidentiality.  Each of the  Administrative  Agent and the
Lenders agrees to maintain the  confidentiality  of the  Information (as defined
below),  except  that  Information  may be  disclosed  (a)  to  its  Affiliates,
directors,  officers and  employees  and to its agents,  including  accountants,
legal  counsel and other  advisors  who have been  informed of the  confidential
nature  of  the  information  provided,  (b)  to  the  extent  requested  by any
regulatory   authority,   including  the  National   Association   of  Insurance
Commissioners or any similar  organization,  or any nationally recognized rating
agency  that  requires  access  to  information  about  a  Lender's   investment
portfolio,  (c) to the extent a Lender  reasonably  believes  it is  required by
applicable  laws or regulations or by any subpoena or similar legal process (and
such Lender will provide prompt notice thereof to the Company), (d) to any other
party to this  Agreement,  (e) in  connection  with the exercise of any remedies
hereunder or any suit,  action or proceeding  relating to this  Agreement or any
other Loan Document or the  enforcement of rights  hereunder or thereunder,  (f)
subject to an  understanding  with such Person that such Person will comply with
this Section  9.12,  to any assignee of or  Participant  in, or any  prospective
assignee  of or  Participant  in,  any of its rights or  obligations  under this
Agreement,  (g)  with the  consent  of the  Company  or (h) to the  extent  such
Information (i) becomes publicly available other than as a result of a breach of
this Section 9.12 or (ii) becomes available to the  Administrative  Agent or any
Lender  from a source  other than the  Company  (unless  such source is actually
known by the


                                       63
<PAGE>


individual providing the information to be bound by a confidentiality  agreement
or other legal or contractual obligation of confidentiality with respect to such
information).  For the purposes of this Section  9.12,  "Information"  means all
information  received from the Company  relating to the Company or its business,
other than any such  information  that is known to a Lender,  publicly  known or
otherwise available to the Administrative Agent or any Lender other than through
disclosure (a) by the Company,  or (b) from a source  actually known to a Lender
to be bound  by a  confidentiality  agreement  or  other  legal  or  contractual
obligation  of  confidentiality  with  respect to such  information.  Any Person
required to maintain  the  confidentiality  of  Information  as provided in this
Section 9.12 shall be considered  to have complied with its  obligation to do so
if such Person maintains the  confidentiality  of such Information in accordance
with  procedures  adopted in good faith to protect  confidential  Information of
third parties delivered to a lender.

     SECTION 9.13 Interest Rate Limitation.  Notwithstanding  anything herein to
the contrary,  if at any time the interest rate applicable to any Loan, together
with all fees,  charges and other  amounts which are treated as interest on such
Loan under applicable law (collectively the "Charges"), shall exceed the maximum
lawful rate (the "Maximum  Rate") which may be contracted for,  charged,  taken,
received  or  reserved  by the  Lender  holding  such  Loan in  accordance  with
applicable law, the rate of interest  payable in respect of such Loan hereunder,
together with all Charges  payable in respect  thereof,  shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been  payable in  respect  of such Loan but were not  payable as a result of the
operation of this  Section 9.13 shall be cumulated  and the interest and Charges
payable to such Lender in respect of other Loans or periods  shall be  increased
(but not above the Maximum Rate therefor) until such cumulated amount,  together
with  interest  thereon  at the  Federal  Funds  Effective  Rate to the  date of
repayment, shall have been received by such Lender.

     SECTION  9.14   EXCULPATION   PROVISIONS.   EACH  OF  THE  PARTIES   HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT, THE NOTES AND (IN
THE CASE OF THE COMPANY, THE ADMINISTRATIVE AGENT AND THE SYNDICATION AGENT) THE
FEE LETTER AND AGREES THAT IT IS CHARGED WITH NOTICE AND  KNOWLEDGE OF THE TERMS
OF THIS  AGREEMENT AND THE OTHER LOAN  DOCUMENTS;  THAT IT HAS IN FACT READ THIS
AGREEMENT AND IS FULLY  INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS,
CONDITIONS AND EFFECTS OF THIS AGREEMENT AND THE OTHER LOAN  DOCUMENTS;  THAT IT
HAS BEEN REPRESENTED BY INDEPENDENT  LEGAL COUNSEL OF ITS CHOICE  THROUGHOUT THE
NEGOTIATIONS  PRECEDING  ITS  EXECUTION  OF THIS  AGREEMENT  AND THE OTHER  LOAN
DOCUMENTS;  AND HAS RECEIVED  THE ADVICE OF ITS  ATTORNEY IN ENTERING  INTO THIS
AGREEMENT AND THE OTHER LOAN  DOCUMENTS;  AND THAT IT RECOGNIZES THAT CERTAIN OF
THE TERMS OF THIS  AGREEMENT  AND THE OTHER LOAN  DOCUMENTS  RESULT IN ONE PARTY
ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING
THE OTHER PARTY OF ITS  RESPONSIBILITY  FOR SUCH  LIABILITY.  EACH PARTY  HERETO
AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR  ENFORCEABILITY OF
ANY EXCULPATORY PROVISION OF THIS AGREEMENT ON THE


                                       64
<PAGE>


BASIS THAT THE PARTY HAD NO NOTICE OR  KNOWLEDGE  OF SUCH  PROVISION OR THAT THE
PROVISION IS NOT "CONSPICUOUS."



                  [Remainder of page intentionally left blank]

                                       65
<PAGE>


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

                               KINDER MORGAN ENERGY PARTNERS, L.P.,
                               as the Company

                                    By: Kinder Morgan G.P., Inc.,
                                    its General Partner

                                    By: Kinder Morgan Management LLC, the
                                    delegate of Kinder Morgan G.P., Inc.


                                    By:________________________________________
                                       Name:
                                       Title:


                               Address for Notices:

                               500 Dallas Street
                               Suite 1000
                               Houston, Texas 77002

                               Telecopier No.:  (713) 369-9499
                               Telephone No.:  (713) 369-9494
                               Attention:  C. Park Shaper

                               Chief Executive Office and Principal Place
                               of Business:

                               500 Dallas
                               Suite 1000
                               Houston, Texas 77002 2000


                                Signature Page - 1
<PAGE>


                               LENDER:

                               JPMORGAN CHASE BANK, as the
                               Administrative Agent and as a Lender


                               By:_____________________________________________
                                    Steven Wood
                                    Vice President

                              Address for Notices:

                              JPMorgan Chase Bank
                              270 Park Avenue, 21st Floor
                              New York, New York 10017-2070

                              Telecopier No.:  (212) 270-3897
                              Telephone No.:  (212) 270-7056
                              Attention:  Steven Wood



                                Signature Page - 2

<PAGE>


                               LENDER:

                               FIRST UNION NATIONAL BANK, as the
                               Syndication Agent and as a Lender


                               By:_____________________________________________
                                    Russell T. Clingman
                                    Vice President

                               Address for Notices:

                               First Union National Bank
                               301 South College Street, TW-10
                               Charlotte, North Carolina 28288-0608

                               Telecopier No.:  (704) 383-0288
                               Telephone No.:  (704) 383-0281
                               Attention:  Syndication Agency Services

                               With copy to:

                               First Union Securities, Inc.
                               1001 Fannin, Suite 2255
                               Houston, Texas 77002

                               Telecopier No.:  (713) 650-6354
                               Telephone No.:  (713) 346-2716
                               Attention: Russell T. Clingman


                                Signature Page - 3

<PAGE>


                               LENDER:

                               GOLDMAN SACHS CREDIT PARTNERS L.P.,
                               as the Documentation  Agent and as a Lender



                               By:_____________________________________________
                                  Name:
                                  Title:


                               Address for Notices:

                               85 Broad Street, 29th Floor
                               New York, NY 10004

                               Telecopier No.:  (212) 357-8068
                               Telephone No.:  (212) 902-9981
                               Attention:  James Roberts




                                Signature Page - 4

<PAGE>


                               LENDER:

                               ROYAL BANK OF CANADA


                               By:_____________________________________________
                                  Name:
                                  Title:

                               Address for Notices:

                               2800 Post Oak Blvd., Suite 5700
                               Houston, TX 77056

                               Telecopier No.:  (713) 403-5624
                               Telephone No.:  (713) 403-5662
                               Attention:  Lorne Gartner


                                Signature Page - 5

<PAGE>


                               LENDER:

                               UBS AG, STAMFORD BRANCH


                               By:_____________________________________________
                                  Name:
                                  Title:

                               By:_____________________________________________
                                  Name:
                                  Title:


                               Address for Notices:

                               677 Washington Blvd.
                               Stamford, CT 06901

                               Telecopier No.:  (203) 716-3888
                               Telephone No.:  (203) 719-6403
                               Attention:  Vladmira Holeckova

                               With copy to:

                               299 Park Avenue
                               New York, NY 10171

                               Telecopier No.:  (212) 821-3330
                               Telephone No.:  (212) 821-3337
                               Attention:  Wendy Field


                                Signature Page - 6

<PAGE>


                               LENDER:

                               CITIBANK, N.A.



                               By:_____________________________________________
                                  Name:
                                  Title:


                               Address for Notices:

                               Citibank, N.A.
                               1200 Smith Street, Suite 2000
                               Houston, Texas 77002

                               Telecopier No.:  (713) 654-2849
                               Telephone No.:  (713) 654-2887
                               Attention:  Steve Baillie


                               With copy to:

                               Citibank, N.A.
                               2 Penn's Way, Suite 250
                               New Castle, Delaware 19720

                               Telecopier No.:  (302) 894-6120
                               Telephone No.:  (302) 894-6084
                               Attention:  David Chiu


                                Signature Page - 7

<PAGE>


                               LENDER:

                               CREDIT SUISSE FIRST BOSTON,
                               CAYMAN ISLANDS BRANCH


                               By:_____________________________________________
                                  Name:
                                  Title:

                               Address for Notices:

                               11 Madison Avenue, 10th Floor
                               New York, NY 10010-3692

                               Telecopier No.:  (212) 448-3755
                               Telephone No.:  (212) 538-2993
                               Attention:  Paul Colon

                               Administrative Contact:

                               Ed Markowski
                               Telecopier No.:  (212) 538-3477
                               Telephone No.:  (212) 538-3380





                                Signature Page - 8