Document:

exv4w1

 

Exhibit 4.1

AMENDED AND RESTATED CREDIT AGREEMENT

dated as of June 29, 2005

among

CAMERON HIGHWAY OIL PIPELINE COMPANY

as Borrower

THE LENDERS FROM TIME TO TIME PARTY HERETO

and

SUNTRUST BANK,

as Administrative Agent and Collateral Agent

 

SUNTRUST CAPITAL MARKETS, INC.,

as Arranger and Sole Book Manager

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I
	 	 	 	 
	 
	 	 	 	 
	DEFINITIONS; CONSTRUCTION
	 	 	1	 
	 
	 	 	 	 
	Section 1.1. Definitions
	 	 	1	 
	Section 1.2. Classifications of Loans and Borrowings
	 	 	22	 
	Section 1.3. Accounting Terms and Determination
	 	 	22	 
	Section 1.4. Terms Generally
	 	 	22	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	 
	 	 	 	 
	AMOUNT AND TERMS OF THE COMMITMENTS
	 	 	23	 
	 
	 	 	 	 
	Section 2.1. General Description of Facilities
	 	 	23	 
	Section 2.2. Commitments
	 	 	23	 
	Section 2.3. Funding of Borrowings
	 	 	23	 
	Section 2.4. Interest Elections
	 	 	24	 
	Section 2.5. Optional Reduction and Termination of Commitments
	 	 	25	 
	Section 2.6. Repayment of Loans
	 	 	25	 
	Section 2.7. Evidence of Indebtedness
	 	 	25	 
	Section 2.8. Optional Prepayments
	 	 	26	 
	Section 2.9. Mandatory Prepayments
	 	 	26	 
	Section 2.10. Interest on Loans
	 	 	27	 
	Section 2.11. Fees
	 	 	28	 
	Section 2.12. Computation of Interest and Fees
	 	 	28	 
	Section 2.13. Inability to Determine Interest Rates
	 	 	28	 
	Section 2.14. Illegality
	 	 	28	 
	Section 2.15. Increased Costs
	 	 	29	 
	Section 2.16. Funding Indemnity
	 	 	30	 
	Section 2.17. Taxes
	 	 	30	 
	Section 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	32	 
	Section 2.19. Mitigation of Obligations; Replacement of Lenders
	 	 	33	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	 
	 	 	 	 
	CONDITIONS PRECEDENT TO LOANS
	 	 	33	 
	 
	 	 	 	 
	Section 3.1. Conditions To Effectiveness
	 	 	33	 
	Section 3.2. Delivery of Documents
	 	 	37	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	 
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES
	 	 	37	 
	 
	 	 	 	 
	Section 4.1. Organization; Powers
	 	 	37	 
	Section 4.2. Authorization; Enforceability
	 	 	37	 
	Section 4.3. Other Material Agreements
	 	 	38	 
	Section 4.4. Governmental Approvals; Material Permits; No Conflicts
	 	 	38	 
	Section 4.5. Financial Condition; No Material Adverse Change; Material Obligations
	 	 	39	 

i

 

	 	 	 	 	 
	 	 	Page	 
	Section 4.6. Properties
	 	 	39	 
	Section 4.7. Litigation and Environmental Matters
	 	 	40	 
	Section 4.8. Compliance with Laws and Agreements
	 	 	40	 
	Section 4.9. Investment Company Act Status
	 	 	40	 
	Section 4.10. Public Utility Holding Company Act Status
	 	 	41	 
	Section 4.11. Taxes
	 	 	41	 
	Section 4.12. ERISA
	 	 	41	 
	Section 4.13. Disclosure
	 	 	41	 
	Section 4.14. Business of the Borrower
	 	 	42	 
	Section 4.15. Subsidiaries
	 	 	42	 
	Section 4.16. OFAC
	 	 	42	 
	Section 4.17. Patriot Act
	 	 	43	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	 
	 	 	 	 
	AFFIRMATIVE COVENANTS
	 	 	43	 
	 
	 	 	 	 
	Section 5.1. Financial Statements and Other Information
	 	 	43	 
	Section 5.2. Notices of Material Events
	 	 	44	 
	Section 5.3. Existence; Conduct of Business
	 	 	45	 
	Section 5.4. Payment of Obligations
	 	 	45	 
	Section 5.5. Maintenance of Properties; Insurance
	 	 	45	 
	Section 5.6. Books and Records, Inspection Rights
	 	 	47	 
	Section 5.7. Compliance with Laws
	 	 	48	 
	Section 5.8. Use of Proceeds
	 	 	48	 
	Section 5.9. Environmental Matters
	 	 	48	 
	Section 5.10. Maintain Title to Collateral; Mortgages
	 	 	48	 
	Section 5.11. Further Assurance
	 	 	49	 
	Section 5.12. Performance of Transaction Documents
	 	 	49	 
	Section 5.13. New Subsidiaries
	 	 	50	 
	Section 5.15. Financial Covenants
	 	 	50	 
	Section 5.16. Valero/Valero LP Transaction
	 	 	50	 
	Section 5.17. Accounts
	 	 	50	 
	Section 5.18. Post-Closing Deliveries
	 	 	50	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	 
	 	 	 	 
	NEGATIVE COVENANTS
	 	 	51	 
	 
	 	 	 	 
	Section 6.1. Indebtedness
	 	 	51	 
	Section 6.2. Liens
	 	 	52	 
	Section 6.3. Fundamental Changes
	 	 	52	 
	Section 6.4. Investments, Loans, Advances, Guarantees and Acquisitions
	 	 	52	 
	Section 6.5. Hedging Agreements
	 	 	53	 
	Section 6.6. Restricted Payments
	 	 	53	 
	Section 6.7. Transactions with Affiliates
	 	 	53	 
	Section 6.8. Restrictive Agreements
	 	 	53	 
	Section 6.10. Management Fees
	 	 	53	 
	Section 6.11. Subsidiaries
	 	 	53	 
	Section 6.12. Project Changes
	 	 	54	 
	Section 6.13. Compliance with ERISA
	 	 	54	 
	Section 6.14. Amendments
	 	 	54	 
	Section 6.15. Sale and Leasebacks
	 	 	54	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE VII
	 	 	 	 
	 
	 	 	 	 
	EVENTS OF DEFAULT
	 	 	54	 
	 
	 	 	 	 
	Section 7.1. Events of Default
	 	 	54	 
	Section 7.2. Application of Proceeds from Collateral
	 	 	57	 
	Section 7.3. Sponsor LOCs
	 	 	58	 
	 
	 	 	 	 
	ARTICLE VIII
	 	 	 	 
	 
	 	 	 	 
	THE ADMINISTRATIVE AGENT
	 	 	58	 
	 
	 	 	 	 
	Section 8.1. Appointment of Administrative Agent
	 	 	58	 
	Section 8.2. Nature of Duties of Administrative Agent
	 	 	59	 
	Section 8.3. Lack of Reliance on the Administrative Agent
	 	 	59	 
	Section 8.4. Certain Rights of the Administrative Agent
	 	 	60	 
	Section 8.5. Reliance by Administrative Agent
	 	 	60	 
	Section 8.6. The Administrative Agent in its Individual Capacity
	 	 	60	 
	Section 8.7. Successor Administrative Agent
	 	 	60	 
	Section 8.8. Authorization to Execute other Loan Documents
	 	 	61	 
	 
	 	 	 	 
	ARTICLE IX
	 	 	 	 
	 
	 	 	 	 
	THE COLLATERAL AGENT
	 	 	61	 
	 
	 	 	 	 
	Section 9.1. Appointment of Collateral Agent
	 	 	61	 
	Section 9.2. Nature of Duties of Collateral Agent
	 	 	61	 
	Section 9.3. Certain Rights of the Collateral Agent
	 	 	62	 
	Section 9.4. Reliance by Collateral Agent
	 	 	62	 
	Section 9.5. The Collateral Agent in its Individual Capacity
	 	 	62	 
	Section 9.6. Successor Collateral Agent
	 	 	63	 
	Section 9.7. Amendment
	 	 	63	 
	 
	 	 	 	 
	ARTICLE X
	 	 	 	 
	 
	 	 	 	 
	MISCELLANEOUS
	 	 	64	 
	 
	 	 	 	 
	Section 10.1. Notices
	 	 	64	 
	Section 10.2. Waiver; Amendments
	 	 	65	 
	Section 10.3. Expenses; Indemnification
	 	 	66	 
	Section 10.4. Successors and Assigns
	 	 	67	 
	Section 10.5. Governing Law; Jurisdiction; Consent to Service of Process
	 	 	70	 
	Section 10.6. WAIVER OF JURY TRIAL
	 	 	70	 
	Section 10.7. Right of Setoff
	 	 	71	 
	Section 10.8. Counterparts; Integration
	 	 	71	 
	Section 10.9. Survival
	 	 	71	 
	Section 10.10. Severability
	 	 	72	 
	Section 10.11. Confidentiality
	 	 	72	 
	Section 10.12. Interest Rate Limitation
	 	 	72	 
	Section 10.13. Waiver of Effect of Corporate Seal
	 	 	72	 
	Section 10.14. Limitation on Recourse
	 	 	73	 
	Section 10.15. Amendment and Restatement
	 	 	73	 

iii

 

Schedules

	 	 	 	 	 
	 

	 	Schedule I
	 	Commitments
	 

	 	Schedule II
	 	Material Project Documents
	 

	 	Schedule 4.5(b)
	 	Borrower Assets
	 

	 	Schedule 5.5(b)
	 	Insurance
	 

	 	Schedule 5.18
	 	Post-Closing Deliveries
	 

	 	Schedule 6.7(a)
	 	Transactions with Affiliates
	 

	 	Schedule 6.8
	 	Restrictive Agreements

Annex

	 	 	 	 	 
	 

	 	Annex I
	 	Applicable Margin

Exhibits

	 	 	 	 	 
	 

	 	Exhibit A
	 	Form of Notice of Conversion/Continuation
	 

	 	Exhibit B
	 	Form of Assignment and Acceptance
	 

	 	Exhibit C
	 	Manta Ray Consent
	 

	 	Exhibit D-1
	 	Form of Texas Deed of Trust
	 

	 	Exhibit D-2
	 	Form of Louisiana Mortgage
	 

	 	Exhibit E
	 	Form of Note
	 

	 	Exhibit F-1
	 	Form of Sponsor LOC – Enterprise
	 

	 	Exhibit F-2
	 	Form of Sponsor LOC — Valero
	 

	 	Exhibit G
	 	[Reserved]
	 

	 	Exhibit H
	 	Form of Notice to Material Producers

iv

 

AMENDED AND RESTATED CREDIT AGREEMENT

     THIS AMENDED AND RESTATED CREDIT AGREEMENT is made and entered into as of June 29, 2005, by
and among CAMERON HIGHWAY OIL PIPELINE COMPANY, a general partnership formed under the laws of the
State of Delaware (the “Borrower”), the several banks and other financial institutions and
lenders from time to time party hereto (the “Lenders”), and SUNTRUST BANK, in its capacity
as administrative agent for the Lenders (the “Administrative Agent”) and in its capacity as
collateral agent for the Lenders (the “Collateral Agent”), and amends and restates the
Existing Debt Documents.

W I T N E S S E T H:

          WHEREAS, the Borrower has entered into the Existing Debt Documents;

          WHEREAS, subject to the terms and conditions of this Agreement (as defined below), the
Borrower, the Lenders and the other parties hereto have agreed to amend and restate the Existing
Debt Documents;

          WHEREAS, it is the intent of the parties hereto that (x) this Agreement not constitute a
novation of the obligations and liabilities existing under the Existing Debt Documents or evidence
payment of all or any of such obligations and liabilities, (y) this Agreement amend and restate in
its entirety the Existing Debt Documents and (z) from and after the Effective Date (as defined
below), the Existing Debt Documents be of no further force or effect except as amended and restated
hereby;

          NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
the Borrower, the Lenders, the Administrative Agent and the Collateral Agent agree as follows:

ARTICLE I

DEFINITIONS; CONSTRUCTION

          Section 1.1. Definitions. In addition to the other terms defined herein,
the following terms used herein shall have the meanings herein specified (to be equally applicable
to both the singular and plural forms of the terms defined):

          “Additional Purchase and Sale Agreement” shall mean any Purchase and Sale Agreement that is
not an Effective Date Purchase and Sale Agreement, as such agreement may be amended, modified or
supplemented from time to time. For the avoidance of doubt, the Effective Date Purchase and Sale
Agreements shall not at any time be considered “Additional Purchase and Sale Agreements.”

1

 

          “Adjusted LIBO Rate” shall mean, with respect to each Interest Period for a Eurodollar
Borrowing, the rate per annum obtained by dividing (i) LIBOR for such Interest Period by (ii) a
percentage equal to 1.00 minus the Eurodollar Reserve Percentage.

          “Administrative Agent” shall have the meaning set forth in the introductory paragraph of this
Agreement.

          “Administrative Questionnaire” shall mean, with respect to each Lender, an administrative
questionnaire in the form prepared by the Administrative Agent and submitted to the Administrative
Agent duly completed by such Lender.

          “Affiliate” shall mean, with respect to a specified Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.

          “Agreement” shall mean the Existing Debt Documents, as amended and restated by this Amended
and Restated Credit Agreement.

          “Applicable Lending Office” shall mean, for each Lender and for each Type of Loan, the
“Lending Office” of such Lender (or an Affiliate of such Lender) designated for such Type of Loan
in the Administrative Questionnaire submitted by such Lender or such other office of such Lender
(or an Affiliate of such Lender) as such Lender may from time to time specify to the Administrative
Agent and the Borrower as the office by which its Loans of such Type are to be made and maintained.

          
“Applicable Margin” shall mean, as of any date, 0.25% per annum on Base Rate Loans
and 1.25% per annum on Eurodollar Loans; provided that upon the Borrower either (a)

obtaining a New Rating or (b) not having obtained a New Rating by October 31, 2005, the Applicable
Margin shall be based on the grid set forth on Annex I.

          “Approved Fund” shall mean any Person (other than a natural Person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business and that is administered or managed by
(i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that
administers or manages a Lender.

          “Assignment (CHOPS)” shall mean the assignment and assumption agreement dated as of July 10,
2003 by and between GulfTerra and Manta Ray, as assignors, and the Borrower, as assignee, relating
to the assignment to and assumption by the Borrower of certain Project Documents and other assets
from such assignors, in each case as such assignment and assumption agreement may be amended,
modified or supplemented from time to time to the extent permitted by the terms hereof.

          “Assignment and Acceptance” shall mean an assignment and acceptance entered into by a Lender
and an assignee (with the consent of any party whose consent is required by Section
10.4(b)) and accepted by the Administrative Agent, in the form of Exhibit B attached
hereto or any other form approved by the Administrative Agent.

2

 

          “Available Cash Flow” shall mean, for any Fiscal Quarter, EBITDA for such Fiscal Quarter,
minus, without duplication, (a) Capital Expenditures made in cash during such Fiscal Quarter to the
extent not funded by equity contributions from the Partners, (b) Taxes of the Borrower that were
paid in cash during such Fiscal Quarter and (c) Cash Interest Expense paid during such Fiscal
Quarter.

          “Base Rate” shall mean the higher of (i) the per annum rate which the Administrative Agent
publicly announces from time to time to be its prime lending rate, as in effect from time to time,
and (ii) the Federal Funds Rate, as in effect from time to time, plus one-half of one percent
(0.50%). The Administrative Agent’s prime lending rate is a reference rate and does not
necessarily represent the lowest or best rate charged to customers. The Administrative Agent may
make commercial loans or other loans at rates of interest at, above or below the Administrative
Agent’s prime lending rate. Each change in the Administrative Agent’s prime lending rate shall be
effective from and including the entire day such change is publicly announced as being effective.

          “BHP” shall mean BHP Billiton Petroleum (Deepwater) Inc., a Delaware corporation.

          “BHP Consent” shall mean the Consent and Agreement, dated as of July 10, 2003, by and among
BHP, the Borrower and JPMorgan Chase Bank as collateral agent, administrative agent and initial
noteholder agent (with the Collateral Agent succeeding JPMorgan Chase Bank as “Collateral Agent” as
defined therein), as such agreement may be amended, modified or supplemented from time to time to
the extent permitted by the terms hereof.

          “BHP Purchase and Sale Agreement” shall mean the Cameron Highway Purchase and Sale Agreement,
dated as of June 23, 2003, by and between BHP and the Borrower, as such agreement may be amended,
modified or supplemented from time to time to the extent permitted by the terms hereof.

          “Borrowing” shall mean a borrowing consisting of 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.

          “BP” shall mean BP Exploration & Production Inc., a Delaware corporation.

          “BP Consent” shall mean the Consent and Agreement, dated as of July 10, 2003, by and among BP,
the Borrower, GulfTerra and JPMorgan Chase Bank as collateral agent, administrative agent and
initial noteholder agent (with the Collateral Agent succeeding JPMorgan Chase Bank as “Collateral
Agent” as defined therein), relating to the BP Purchase and Sale Agreement, as such agreement may
be amended, modified or supplemented from time to time to the extent permitted by the terms hereof.

          “BP Purchase and Sale Agreement” shall mean the Cameron Highway Purchase and Sale Agreement,
dated as of June 23, 2003, by and between BP, GulfTerra and the

3

 

Borrower, as such agreement may be amended, modified or supplemented from time to time to the
extent permitted by the terms hereof.

          “Business Day” shall mean (i) any day other than a Saturday, Sunday or other day on which
commercial banks in Atlanta, Georgia and New York, New York are authorized or required by law to
close and (ii) if such day relates to a Borrowing of, a payment or prepayment of principal or
interest on, a conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice with
respect to any of the foregoing, any day on which dealings in Dollars are carried on in the London
interbank market.

          “Caesar” shall mean Caesar Oil Pipeline Company LLC, a Delaware limited liability company.

          “Cameron Highway Oil Pipeline” shall mean an oil pipeline system delivering oil from the Ship
Shoal 332 Platform B to multiple delivery points. Such delivery points are located in Texas City,
Texas and Port Arthur, Texas on the Effective Date and may include additional delivery points
thereafter.

          “Cameron Highway System” shall mean the Cameron Highway Oil Pipeline and all equipment and
machinery used or useful in connection therewith and owned or leased by the Borrower.

          “Capital Expenditures” shall mean, for any Fiscal Quarter, the sum of the aggregate amount of
all expenditures of the Borrower (other than expenditures made with the proceeds of casualty
insurance or the proceeds of equity contributions from the Partners) for fixed or capital assets
made during such Fiscal Quarter that, in accordance with GAAP, would be classified as capital
expenditures.

          “Capital Lease Obligations” of any Person shall mean 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” shall mean any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent ownership interests
in a Person (other than a corporation) and any and all warrants, rights or options to purchase any
of the foregoing.

          “Cash Interest Expense” shall mean, with respect to the Borrower for any Fiscal Quarter, (a)
(i) the total interest expense of the Borrower for such period and including, in any event,
interest capitalized during such Fiscal Quarter and net costs under Interest Rate Agreements for
such Fiscal Quarter minus (ii) net gains of the Borrower under Interest Rate Agreements for such
Fiscal Quarter and minus (iii) interest income of the Borrower for such Fiscal Quarter, less (b)
any non-cash interest for such Fiscal Quarter included in clause (a) above.

4

 

          “Change in Control” shall mean either of the following: (a) the failure of Enterprise, Valero
and Valero LP, collectively, to own, directly or indirectly at least 51% of the legal, beneficial
and voting Capital Stock of the Borrower, and (b) at any time, the failure of Enterprise or Valero
or a wholly-owned Subsidiary of Enterprise or Valero to be the operator of, and otherwise to
operate and maintain, the Cameron Highway System.

          “Change in Law” shall mean (i) the adoption of any applicable law, rule or regulation after
the Effective Date, (ii) any change in any applicable law, rule or regulation, or any change in the
interpretation or application thereof, by any Governmental Authority after the Effective Date, or
(iii) compliance by any Lender (or its Applicable Lending Office) with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority made or issued
after the Effective Date.

          “Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to
time.

          “Collateral” shall mean the property of the Borrower or any other Person that is subject to a
Lien created by any Security Document.

          “Collateral Agent” shall have the meaning set forth in the introductory paragraph of this
Agreement.

          “Commitment” shall mean, with respect to each Lender, the obligation of such Lender to make a
Loan hereunder on the Effective Date, in a principal amount not exceeding the amount set forth with
respect to such Lender on Schedule I. The aggregate principal amount of all Lenders’
Commitments is $415,000,000.

          “Connection Agreements” shall mean, collectively, each agreement, other than the Interconnect
Agreement, under which the Borrower agrees with one or more counterparties to connect the Cameron
Highway System to another pipeline system, refinery, terminal or other third party system, as such
agreements may be amended, modified or supplemented from time to time to the extent permitted by
the terms hereof.

          “Consents” shall mean, collectively, the BP Consent, the UNOCAL Consent, the BHP Consent, and
the Manta Ray Consent.

          “Control” shall mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative
thereto.

          “Control Account Agreements” shall mean each tri-party agreement by and among the Borrower,
the Collateral Agent and a depository bank or securities intermediary at which the Borrower
maintains a deposit account or investment account, granting “control” over such deposit accounts
and investment accounts to the Collateral Agent in a manner that perfects the Lien of the
Collateral Agent under the UCC.

5

 

          “Default” shall mean any condition or event that, with the giving of notice or the lapse of
time or both, would constitute an Event of Default.

          “Default Interest” shall have the meaning set forth in Section 2.10(b).

          “Distribution Conditions” shall mean the following conditions:

          (a) No more than one Restricted Payment per Fiscal Quarter shall be permitted (and only
permitted if all Distribution Conditions shall be satisfied with respect to any such Restricted
Payment);

          (b) (i) If such Restricted Payment is to be made during the period when the immediately prior
Fiscal Quarter for which financial statements have been or are required to be delivered pursuant to
Section 5.1 is the Fiscal Quarter ended on September 30, 2005, then the Interest Coverage
Ratio for such Fiscal Quarter shall have been at least 2.0:1.0, and (ii) if such Restricted Payment
is to be made during any period thereafter, then the Borrower shall be in compliance with
Section 5.15 with respect to the immediately prior Fiscal Quarter for which financial
statements have been or are required to be delivered pursuant to Section 5.1;

          (c) No Restricted Payments, other than as permitted pursuant to Section 6.6(a), shall
be permitted prior to the delivery of the financial statements described in clause (b)(i) of this
definition;

          (d) The amount of a given Restricted Payment made pursuant to Section 6.6(b) shall not
exceed the amount of Available Cash Flow for the immediately prior Fiscal Quarter for which
financial statements have been or are required to be delivered pursuant to Section 5.1 (the
“Distribution Measurement Quarter”); provided, that if the Distribution Conditions were not
satisfied with respect to one or more Fiscal Quarters occurring prior to the Distribution
Measurement Quarter (the “Pre-Distribution Measurement Quarters”), then, if all other Distribution
Conditions are satisfied before and after giving effect to the Restricted Payment to be made with
respect to the Distribution Measurement Quarter, the amount of the Restricted Payment for the
Distribution Measurement Quarter may be increased to include Available Cash Flow for the
Pre-Distribution Measurement Quarters to the extent not previously included in a Restricted
Payment; and

          (e) No Default or Event of Default shall have occurred and be continuing.

          “Dollar(s)” and the sign “$” shall mean lawful money of the United States of America.

          “EBITDA” shall mean, without duplication, as to the Borrower, for a given Fiscal Quarter, the
amount equal to net income of the Borrower less any non-cash income and gains included in net
income, plus, to the extent deducted in determining net income, interest expense, depreciation,
depletion and impairment, amortization of leasehold and intangibles, other non-cash costs,
expenses, charges, write-offs and similar items and taxes; provided that gains or losses on the
disposition of assets not in the ordinary course of business shall not be included in EBITDA.

6

 

          “Effective Date” shall mean the date on which the conditions precedent set forth in
Section 3.1 have been satisfied or waived in accordance with Section 10.2.

          “Effective Date Purchase and Sale Agreements” shall mean, collectively, the BP Purchase and
Sale Agreement, the BHP Purchase and Sale Agreement and the UNOCAL Purchase and Sale Agreement.

          “Eligible Assignee” shall mean (i) a Lender; (ii) an Affiliate of a Lender; (iii) an Approved
Fund; and (iv) any other Person (other than a natural Person) approved by the Administrative Agent
and unless an Event of Default has occurred and is continuing, the Borrower (each such approval not
to be unreasonably withheld or delayed).

          “Enterprise” shall mean Enterprise Products Operating L.P., a Delaware limited partnership.

          “Enterprise CHOPS” shall mean Cameron Highway Pipeline I, L.P., a Delaware limited
partnership.

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

          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time
to time, and any successor statute.

          “ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that,
together with the Borrower, 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 Reportable Event” shall mean any of the events set forth in Section 4043(b) of ERISA,
other than an event for which the 30-day notice period is waived under subsections .13, .14, .16,
..18, .19 or .20 of PBGC Reg. § 2615.

7

 

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

          “Eurodollar Reserve Percentage” shall mean the aggregate of the maximum reserve percentages
(including, without limitation, any emergency, supplemental, special or other marginal reserves)
expressed as a decimal (rounded upwards to the next 1/100th of 1%) in effect on any day
to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate pursuant to
regulations issued by the Board of Governors of the Federal Reserve System (or any Governmental
Authority succeeding to any of its principal functions) with respect to eurocurrency funding
(currently referred to as “eurocurrency liabilities” under Regulation D). Eurodollar Loans shall
be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available from time to time
to any Lender under Regulation D. The Eurodollar Reserve Percentage shall be adjusted
automatically on and as of the effective date of any change in any reserve percentage.

          “Event of Default” shall have the meaning provided in Article VII.

          “Event of Loss” shall mean, with respect to the Project, (a) the loss of all or any material
portion of the Project due to destruction or damage beyond repair; (b) the loss of use of all or
any material portion of the Project for a period reasonably expected to extend for at least six
months for any of the reasons referenced in clause (a); (c) the receipt of insurance proceeds based
upon an actual or constructive total loss of the Project; (d) the receipt of insurance proceeds,
except for business interruption insurance proceeds, in excess of $5,000,000; (e) the Taking of all
or any portion of the Project such that the then remaining portion cannot practically be utilized
for the purposes intended; (f) a Taking or requisition by a Governmental Authority for use of the
Project (in its entirety or a material portion as aforesaid) for a stated period which shall
exceed, or for an indefinite period which is reasonably expected to exceed, six months; or (g)
shutdown of the Project as a result of any Governmental Requirement for a period exceeding six
consecutive months.

          “Excluded Taxes” shall mean with respect to the Administrative Agent, the Collateral Agent,
any Lender or any other recipient of any payment to be made by or on account of any obligation of
the Borrower hereunder, (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 any Lender is located and (c)
in the case of a Foreign Lender, any withholding tax that (i) is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement, (ii) is imposed
on amounts payable to such Foreign Lender at any time that such Foreign Lender designates a new
lending office, other than taxes that have accrued prior to the designation of such lending office
that are otherwise not Excluded Taxes, and (iii) is attributable to such Foreign Lender’s failure
to comply with Section 2.17(e).

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          “Existing Debt” shall mean the Indebtedness represented by the Existing Debt Documents.

          “Existing Debt Documents” shall mean (a) that certain Credit Agreement, dated as of July 10,
2003, among the Borrower, the lenders party thereto, and the administrative agent and the other
agents party thereto and (b) that certain Note Purchase Agreement, dated as of July 10, 2003, made
by the Borrower in favor of the noteholders party thereto, for the issuance of 7.36% senior secured
notes (and such notes issued thereunder), in each case (x) as accompanied by that certain Common
Agreement, dated as of July 10, 2003, among the Borrower, such lenders, such noteholders, and the
agents party thereto, and (y) as amended, supplemented or otherwise modified prior to the execution
and delivery of this Agreement.

          “Existing Lenders” shall mean all lenders and other credit providers to the Borrower party to
the Existing Debt Documents.

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

          “Fee Letter” shall mean that certain fee letter, dated as of June 13, 2005, executed by
SunTrust Capital Markets, Inc. and SunTrust Bank and accepted by Borrower.

          “Financial Officer” shall mean, with respect to any Person, its president, chief financial
officer, principal accounting officer, vice president (provided that such vice president has actual
knowledge of the ongoing financial affairs of such Person), treasurer or controller.

          “Fiscal Quarter” shall mean any fiscal quarter of the Borrower.

          “Fiscal Year” shall mean any fiscal year of the Borrower.

          “Fitch” shall mean Fitch Ratings Ltd.

          “force majeure” shall mean the causes, conditions, events or circumstances which are beyond
the reasonable control of the Person claiming force majeure, and could not have been avoided or
prevented by such Person’s reasonable and diligent foresight, planning and implementation. Such
causes, conditions, events and circumstances shall include, without limitation, acts of God, war
(declared or undeclared), terrorism, insurrections, hostilities, strikes (other than strikes by the
employees of such Person or any of its Affiliates, which strikes shall be deemed not to be a force
majeure event), lockouts, riots, floods, fires, storms and conduct which would violate any
applicable material criminal laws of a Governmental Authority.

9

 

          “Foreign Lender” shall mean any Lender that is not a United States person under Section
7701(a)(3) of the Code.

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

          “GB72 Platform Space Agreement” shall mean the Platform Space Agreement between the Borrower,
Enterprise Field Services, LLC and GOM Shelf LLC (and/or other counterparties at the time of
execution), as such agreement may be amended, modified or supplemented from time to time to the
extent permitted by the terms hereof.

          “Governmental Approval” shall mean any authorization, consent, approval, license, lease,
ruling, permit, tariff, rate, certification, exemption, filing, variance, claim, order, judgment,
decree, publication, notice to, declaration of or with or registration by or with any Governmental
Authority.

          “Governmental Authority” shall mean 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.

          “Governmental Requirement” shall mean any Governmental Approval, law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, franchise, certificate, license,
or other direction or requirement (including, but not limited to, any of the foregoing which relate
to Environmental Laws, energy regulations and occupational, safety and health standards or
controls) of any Governmental Authority.

          “Guarantee” of or by any Person (the “guarantor”) shall mean 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.

          “GulfTerra” shall mean GulfTerra Energy Partners, L.P., a Delaware limited partnership (n/k/a
Enterprise GTM Holdings L.P., a Delaware limited partnership).

10

 

          “Hazardous Materials” shall mean 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” shall mean any agreement evidencing a Hedging Transaction.

          “Hedging Obligations” of any Person shall mean any and all obligations of such Person, whether
absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired under
(i) any and all Hedging Transactions, (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Hedging Transactions and (iii) any and all renewals, extensions
and modifications of any Hedging Transactions and any and all substitutions for any Hedging
Transactions.

          “Hedging Transaction” of any Person shall mean any transaction (including an agreement with
respect thereto) now existing or hereafter entered into by such Person that is a rate swap, basis
swap, forward rate transaction, commodity swap, interest rate option, foreign exchange transaction,
cap transaction, floor transaction, collateral transaction, forward transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or any other similar transaction
(including any option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices
or other financial measures.

          “Indebtedness” of any Person shall mean, 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 other
similar instruments;

               (c) all obligations of such Person upon which interest charges are customarily paid;

               (d) all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person;

               (e) all obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the ordinary course of
business and for borrowed money);

               (f) 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;

11

 

               (g) all Guarantees by such Person of Indebtedness of others;

               (h) all Capital Lease Obligations in respect of which such Person is liable,
contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which
obligations such Person otherwise assures a creditor against loss;

               (i) all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty; and

               (j) 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 entity (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.

          “Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

          “Interconnect Agreement” shall mean the Offshore Facilities Interconnection, Construction and
Operating Agreement, effective as of June 23, 2003 among Caesar, Manta Ray, the Borrower and
GulfTerra, as such agreement may be amended, modified or supplemented from time to time to the
extent permitted by the terms hereof.

          “Interest Coverage Ratio” shall mean, for any Fiscal Quarter, the ratio of (a) EBITDA for
such Fiscal Quarter to (b) Cash Interest Expense for such Fiscal Quarter.

          “Interest Period” shall mean with respect to any Eurodollar Borrowing, a period of one, two or
three months; provided, that:

               (i) the initial Interest Period for such Borrowing shall commence on the date of such
Borrowing (including the date of any conversion from a Borrowing of another Type), and each
Interest Period occurring thereafter in respect of such Borrowing shall commence on the day
on which the next preceding Interest Period expires;

               (ii) if any Interest Period would otherwise end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day, unless such
Business Day falls in another calendar month, in which case such Interest Period would end
on the next preceding Business Day;

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

               (iv) no Interest Period may extend beyond the Maturity Date.

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          “Interest Rate Agreements” shall mean any interest rate swap, cap, collar or similar
agreements between the Borrower and a financial institution for the transfer or mitigation of
interest rate risks related to the Project.

          “Lenders” shall have the meaning assigned to such term in the opening paragraph of this
Agreement.

          “LIBOR” shall mean, for any applicable Interest Period with respect to any Eurodollar Loan,
the British Bankers’ Association Interest Settlement Rate per annum for deposits in Dollars for a
period equal to such Interest Period appearing on the display designated as Page 3750 on the Dow
Jones Markets Service (or such other page on that service or such other service designated by the
British Bankers’ Association for the display of such Association’s Interest Settlement Rates for
Dollar deposits) as of 11:00 a.m. (London, England time) on the day that is two Business Days prior
to the first day of the Interest Period or if such Page 3750 is unavailable for any reason at such
time, the rate which appears on the Reuters Screen ISDA Page as of such date and such time;
provided, that if the Administrative Agent determines that the relevant foregoing sources are
unavailable for the relevant Interest Period, LIBOR shall mean the rate of interest determined by
the Administrative Agent to be the average (rounded upward, if necessary, to the nearest
1/100th of 1%) of the rates per annum at which deposits in Dollars are offered to the
Administrative Agent two (2) Business Days preceding the first day of such Interest Period by
leading banks in the London interbank market as of 10:00 a.m. (New York time) for delivery on the
first day of such Interest Period, for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Loan of the Administrative Agent.

          “License Agreements” shall mean, collectively, each agreement under which one or more
counterparties agrees to grant a license or right of way to the Borrower in connection with a
Connection Agreement, as such agreements may be amended, modified or supplemented from time to time
to the extent permitted by the terms hereof.

          “Lien” shall mean any interest in any asset or property securing an obligation owed to, or
securing a claim by, a Person other than the owner of the asset or property, whether such interest
is based on common law, statute or contract, and whether such obligation or claim is fixed or
contingent, and including, but not limited to the lien or security interest arising from any
mortgage, deed of trust, security agreement, pledge, hypothecation, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes. The term “Lien” shall include
reservations, exceptions, encroachments, easements, encumbrances, rights of way, covenants,
conditions, restrictions, leases and other title exceptions affecting assets or property. For
purposes of this Agreement, the Borrower shall be deemed to be the owner of any asset or property
which it has acquired or holds subject to a conditional sale agreement, financing lease or other
arrangement pursuant to which title to such asset or property has been retained by or vested in
some other Person for security purposes.

          “Loan” shall have the meaning set forth in Section 2.2.

          “Loan Documents” shall mean, collectively, this Agreement, the Notes (if any), the Security
Documents, all Notices of Conversion/Continuation and any and all other

13

 

instruments, agreements, documents and writings executed in connection with any of the
foregoing.

          “Manta Ray” shall mean Manta Ray Gathering Company, L.L.C., a Delaware limited liability
company.

          “Manta Ray Consent” shall mean a Consent and Agreement substantially in the form of
Exhibit C.

          “Material Adverse Effect” shall mean any event, occurrence or condition which has, or which
reasonably could be expected to have, a material and adverse effect on (a) the Project or on the
business, assets, operations, or financial condition of the Borrower, (b) the Borrower’s ability to
perform any of its obligations under the Material Documents, (c) the validity or enforceability of
any material term of any Material Document or (d) the validity or priority of, or the rights of or
benefits available to the Administrative Agent, the Collateral Agent or the Lenders under, this
Agreement or any of the other Loan Documents.

          “Material Documents” shall mean each Loan Document and each Material Project Document.

          “Material Indebtedness” shall mean Indebtedness (other than under the Loan Documents), or
obligations in respect of one or more Hedging Transactions, of the Borrower in an aggregate
principal amount exceeding $5,000,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Borrower in respect of any Hedging Transaction at any
time shall be the Net Mark-to-Market Exposure of such Hedging Transaction.

          “Material Permits” shall mean all Governmental Approvals necessary as of the date of
determination for, and material to, the construction, development, use, operation, ownership, or
maintenance of the Cameron Highway System.

          “Material Producer” shall mean, BP, BHP, and UNOCAL (or any permitted assignees thereof under
the applicable Effective Date Purchase and Sale Agreement and the applicable Consent).

          “Material Project Documents” shall mean the documents listed on Schedule II, the GB72
Platform Space Agreement, the Interconnect Agreement, the Connection Agreements and the License
Agreements (in each case as such contracts may be amended, modified, supplemented or replaced from
time to time).

          “Maturity Date” shall mean the earlier of (i) June 28, 2006 or (ii) the date on which the
principal amount of all outstanding Loans have been declared or automatically have become due and
payable (whether by acceleration or otherwise).

          “Moody’s” shall mean Moody’s Investors Service, Inc.

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          “Mortgages” shall mean each (a) Amended and Restated Deed of Trust, Assignment, Security
Agreement and Financing Statement (Texas) substantially in the form of Exhibit D-1 or in
form and substance reasonably satisfactory to the Collateral Agent and (b) Amended and Restated
Mortgage, Assignment, Security Agreement and Financing Statement (Louisiana) substantially in the
form of Exhibit D-2 or in form and substance reasonably satisfactory to the Collateral
Agent, in each case as such agreements may be amended, modified or supplemented from time to time
to the extent permitted by the terms hereof.

          “Multiemployer Plan” shall mean a multiemployer plan as defined in Section 3(37) or Section
4001(a)(3) of ERISA.

          “Net Cash Proceeds” shall mean, with respect to any event, (a) the cash proceeds actually
received in respect of such event including any cash received in respect of any non-cash proceeds,
but only as and when received, net of (b) the sum of (i) all reasonable fees and out-of-pocket
expenses paid or payable by the Borrower to third parties (other than to Affiliates) in connection
with such event and (ii) the amount of all taxes paid (or reasonably estimated to be payable) by
the Borrower.

          “Net Mark-to-Market Exposure” of any Person shall mean, as of any date of determination with
respect to any Hedging Obligation, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from such Hedging Obligation. “Unrealized losses” shall mean the
fair market value of the cost to such Person of replacing the Hedging Transaction giving rise to
such Hedging Obligation as of the date of determination (assuming the Hedging Transaction were to
be terminated as of that date), and “unrealized profits” means the fair market value of the gain to
such Person of replacing such Hedging Transaction as of the date of determination (assuming such
Hedging Transaction were to be terminated as of that date).

          “New Rating” shall mean a new rating for proposed permanent senior secured debt that is to be
issued in whole or in part for the purpose of refinancing the Loans.

          “Note” shall mean a promissory note of the Borrower payable to the order of a requesting
Lender in the principal amount of such Lender’s Commitment, in substantially the form of
Exhibit E.

          “Notice of Conversion/Continuation” shall mean the notice given by the Borrower to the
Administrative Agent in respect of the conversion or continuation of an outstanding Borrowing as
provided in Section 2.4(b).

          “Obligations” shall mean all amounts owing by the Borrower to the Administrative Agent, the
Collateral Agent or any Lender pursuant to or in connection with this Agreement or any other Loan
Document, including without limitation, all principal, interest (including any interest accruing
after the filing of any petition in bankruptcy or the commencement of any insolvency,
reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing
or post-petition interest is allowed in such proceeding), all reimbursement obligations, fees,
expenses, indemnification and reimbursement payments, costs and expenses (including all reasonable
fees, charges and disbursements of one law firm and one additional Louisiana local counsel, for the
Administrative Agent, the Collateral Agent and their

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respective Affiliates (and, if retention is deemed appropriate by the Administrative Agent and
consented to by the Borrower (such consent not to be unreasonably withheld or delayed), additional
local counsel to the Administrative Agent, the Collateral Agent and their respective Affiliates)
and, only in the case of enforcement, any Lender, incurred pursuant to this Agreement or any other
Loan Document), whether direct or indirect, absolute or contingent, liquidated or unliquidated, now
existing or hereafter arising hereunder or thereunder, and all Hedging Obligations owed to the
Administrative Agent, the Collateral Agent any Lender or any of their Affiliates incurred in order
to limit interest rate or fee fluctuation with respect to the Loans, and all obligations and
liabilities incurred in connection with collecting and enforcing the foregoing, together with all
renewals, extensions, modifications or refinancings thereof.

          “Operation and Management Agreement” shall mean the Operation and Management Agreement, dated
as of June 30, 2003, by and between the Borrower and Manta Ray, as such agreement may be amended,
modified or supplemented from time to time to the extent permitted by the terms hereof.

          “Other Taxes” shall mean 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 or any
other Loan Document.

          “Participant” shall have the meaning set forth in Section 10.4(d).

          “Participation Agreement” shall mean the Participation Agreement and Assignment, dated as of
July 10, 2003, by and between Valero, GulfTerra, Enterprise CHOPS and Manta Ray, as such agreement
may be amended, modified or supplemented from time to time to the extent permitted by the terms
hereof.

          “Partner Distribution” shall mean up to a $125,000,000 dividend made by the Borrower to the
Partners on the Effective Date with proceeds of the Loan.

          “Partners” shall mean each of Enterprise CHOPS, Valero CHOPS I and Valero CHOPS II.

          “Partnership Agreement” shall mean the Amended and Restated Partnership Agreement of the
Borrower, dated as of July 10, 2003, by and between the Partners, as such agreement may be amended,
modified or supplemented from time to time to the extent permitted by the terms hereof.

          “Payment Office” shall mean the office of the Administrative Agent located at 303 Peachtree
Street, N.E., Atlanta, Georgia 30308, or such other location as to which the Administrative Agent
shall have given written notice to the Borrower and the other Lenders.

          “PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA,
and any successor entity performing similar functions.

          “Permitted Encumbrances” shall mean:

16

 

               (a) Liens imposed by law for Taxes that are not yet due or which are being contested in
good faith by appropriate proceedings; provided that adequate reserves with respect thereto
are maintained on the books of the Borrower, in conformity with GAAP;

               (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 which are being contested in good faith by
appropriate proceedings; provided that adequate reserves with respect thereto are maintained
on the books of the Borrower, in conformity with GAAP;

               (c) Liens incurred (other than any inchoate Lien imposed by ERISA) or pledges or
deposits made in the ordinary course of business in connection with workers’ compensation,
unemployment insurance and other social security legislation, or to secure the performance
of tenders, statutory obligations, surety and appeal bonds, bids, leases, construction,
operating and maintenance agreements, government contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment of borrowed
money), and deposits securing liability to insurance carriers under insurance or
self-insurance arrangements, in each case having ordinary and customary terms;

               (d) easements, rights-of-way, restrictions, servitudes, permits, reservations,
encroachments, exceptions, conditions, covenants and other similar charges or 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 Borrower;

               (e) inchoate Liens arising under ERISA;

               (f) any obligations or duties affecting any of the assets of the Borrower to any
municipality or public authority with respect to any franchise, grant, license or permit
which do not materially impair the use of such asset for the purposes for which it is held;

               (g) defects, irregularities and deficiencies in title of any rights-of-way or other
property of the Borrower which in the aggregate do not materially and adversely affect the
business of the Borrower, and defects, irregularities and deficiencies in title to any
property of the Borrower which defects, irregularities or deficiencies have been cured by
possession under applicable statutes of limitation;

               (h) security interests arising by operation of law solely under Article 2 of the
Uniform Commercial Code to the extent and so long as the “debtor” with respect to such
security interests does not have or does not lawfully obtain possession of the goods subject
thereto; and

17

 

               (i) any right of set off arising under common law or by statute;

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

          “Permitted Investments” shall mean:

               (a) marketable direct obligations issued or unconditionally guaranteed by the United
States of America (or by any agency thereof to the extent such obligations are backed by the
full faith and credit of the United States of America), in each case maturing within one
year from the date of acquisition thereof;

               (b) marketable direct obligations issued by any state or public instrumentality thereof
maturing within one year from the date of acquisition thereof, and at the time of
acquisition, having the highest rating obtainable from either S&P or Moody’s;

               (c) investments in commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having the highest credit rating
obtainable from S&P or from Moody’s;

               (d) investments in certificates of deposit or banker’s acceptances maturing within one
year from the date of acquisition thereof issued by (i) any Lender, (ii) any commercial bank
organized under the laws of the United States of America or any state thereof or the
District of Columbia having combined capital and surplus and undivided profits of not less
than $500,000,000 or (iii) any bank which has a short-term commercial paper rating meeting
the requirements of clause (c) above (any such Lender or bank, a “Qualifying Lender”);

               (e) investments in eurodollar time deposits having a maturity of less than one year
purchased directly from any Lender (whether such deposit is with such Lender or any other
Lender) or issued by any Qualifying Lender; and

               (f) fully collateralized repurchase agreements and reverse repurchase agreements with a
term of not more than 14 days with any Qualifying Lender relating to securities described in
clause (a) above.

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

          “Plan” shall mean 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 Borrower 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.

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          “Pledge Agreements” shall mean each Pledge Agreement, dated as of the date hereof, executed by
a Partner in favor of the Collateral Agent for the benefit of the Lenders.

          “Pro Rata Share” shall mean with respect to any Lender at any time, a percentage, the
numerator of which shall be such Lender’s Loan and the denominator of which shall be the sum of all
Loans.

          “Project” shall mean the construction, installation and operation of the Cameron Highway
System.

          “Project Documents” shall mean all of the contracts relating to ownership, operation and
maintenance of the Cameron Highway System (as such contracts may be amended, modified, supplemented
or replaced from time to time) entered into before, on or after the Effective Date.

          “Projections” shall mean the financial projections provided by the Borrower to the
Administrative Agent on or about June 22, 2005.

          “Purchase and Sale Agreements” shall mean, collectively, the BP Purchase and Sale Agreement,
the BHP Purchase and Sale Agreement, and the UNOCAL Purchase and Sale Agreement, and each other
agreement entered into by the Borrower or its Affiliates relating to the purchase of oil from
and/or the sale of oil to the Cameron Highway Oil Pipeline as such agreements may be amended,
modified or supplemented from time to time to the extent permitted by the terms hereof.

          “Real Estate” shall mean all real property (a) owned or leased by the Borrower, and (b) if
related to the Project, owned or leased by Manta Ray.

          “Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve
System, as the same may be in effect from time to time, and any successor regulations then in
effect.

          “Related Parties” shall mean, 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.

          “Release” shall mean any release, spill, emission, leaking, dumping, injection, pouring,
deposit, disposal, discharge, dispersal, leaching or migration into the environment (including
ambient air, surface water, groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.

          “Required Lenders” shall mean, at any time, Lenders holding more than 50% of the aggregate
outstanding Loans at such time; provided that if there are two Lenders at such time, and
such Lenders each hold greater than 33% of the aggregate outstanding Loans at such time, then
“Required Lenders” shall mean Lenders holding 100% of the aggregate outstanding Loans at such time.

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          “Responsible Officer” shall mean any of the president, the chief executive officer, the chief
operating officer, the chief financial officer, the treasurer or a vice president of the Borrower
or such other representative of the Borrower as may be designated in writing by any one of the
foregoing with the consent of the Administrative Agent.

          “Restricted Payment” shall mean any dividend or other distribution (whether in cash,
securities or other property) with respect to any Capital Stock of the Borrower, or any payment
(whether in cash, securities or other property), including any sinking fund or similar deposit, in
connection with the purchase, redemption, retirement, acquisition, cancellation or termination of
any Capital Stock of the Borrower or any option, warrant or other right to acquire any such Capital
Stock of the Borrower and any payment with respect to Indebtedness owing to either Sponsor or an
Affiliate of either Sponsor.

          “S&P” shall mean Standard & Poor’s, a Division of the McGraw-Hill Companies.

          “Secured Affiliate” shall mean any Affiliate of any Lender that has entered into an Interest
Rate Agreement with the Borrower with the obligations of the Borrower thereunder being secured by
one or more Security Documents.

          “Security Agreement” shall mean that certain Security Agreement, dated as of the date hereof,
executed by the Borrower in favor of the Collateral Agent for the benefit of the Lenders.

          “Security Documents” shall mean, collectively, the Security Agreement, the Pledge Agreements,
the Mortgages, the Control Account Agreements, the Consents, and all other instruments and
agreements now or hereafter securing the whole or any part of the Obligations or any Guarantee
thereof, all UCC financing statements, fixture filings, stock powers, and all other documents,
instruments, agreements and certificates executed and delivered by the Borrower or any Affiliate
thereof to the Administrative Agent, the Collateral Agent or the Lenders in connection with the
foregoing.

          “Ship Shoal 332 Platform B” shall mean a pipeline junction platform owned by the Borrower
located on the outer continental shelf at Ship Shoal 332.

          “Sponsor LOCs” shall mean Letters of Credit in substantially the form of Exhibit F-1
and Exhibit F-2, as applicable, in the amount of $14,000,000 each.

          “Sponsors” shall mean each of Enterprise and Valero.

          “Taking” shall mean the condemnation, confiscation or seizure of title by any Governmental
Authority (or otherwise by right of eminent domain or conveyance in lieu thereof) of all or any
portion of the Project.

          “Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.

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          “Transaction Documents” shall mean this Agreement, the Project Documents, the Loan Documents
and all other documents, agreements, instruments and certificates in connection with the foregoing.

          “Transaction Party” shall mean a Person that is a party to a Transaction Document.

          “Transactions” shall mean the execution, delivery and performance by the Borrower of the
Transaction Documents, the making of Loans, and the use of the proceeds thereof.

          “Type”, when used in reference to a 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 Adjusted
LIBO Rate or the Base Rate.

          “UCC” shall mean the Uniform Commercial Code as from time to time in effect in the State of
New York; provided, however, that, in the event that, by reason of mandatory provisions of law, any
of the attachment, perfection or priority of the Collateral Agent’s and the Lenders’ security
interest in any Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions related to such provisions.

          “UNOCAL” shall mean Union Oil Company of California, a California corporation.

          “UNOCAL Consent” shall mean the Consent and Agreement, dated as of July 10, 2003, by and among
UNOCAL, the Borrower, and JPMorgan Chase Bank as collateral agent, administrative agent and initial
noteholder agent (with the Collateral Agent succeeding JPMorgan Chase Bank as “Collateral Agent” as
defined therein), as such agreement may be amended, modified or supplemented from time to time to
the extent permitted by the terms hereof.

          “UNOCAL Purchase and Sale Agreement” shall mean the Cameron Highway Purchase and Sale
Agreement, dated as of June 23, 2003, by and between UNOCAL and the Borrower, as such agreement may
be amended, modified or supplemented from time to time to the extent permitted by the terms hereof.

          “Valero” shall mean Valero Energy Corporation, a Delaware corporation.

          “Valero CHOPS” shall mean, collectively, Valero CHOPS I and Valero CHOPS II.

          “Valero CHOPS I” shall mean Valero CHOPS I, L.P., a Delaware limited partnership or, after
Valero Energy Corporation transfers the direct partnership interest in the Borrower held by Valero
CHOPS I to Valero LP or a Subsidiary thereof, pursuant to a

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Valero/Valero LP Transfer (as defined in the Partnership Agreement), “Valero CHOPS I” shall
mean Valero LP or such Subsidiary thereof.

          “Valero CHOPS II” shall mean Valero CHOPS II, L.P., a Delaware limited partnership or, after
Valero Energy Corporation transfers the direct partnership interest in the Borrower held by Valero
CHOPS II to Valero LP or a Subsidiary thereof, pursuant to a Valero/Valero LP Transfer (as defined
in the Partnership Agreement), “Valero CHOPS II” shall mean Valero LP or such Subsidiary
thereof.

          “Valero LP” shall mean Valero L.P., a Delaware limited partnership.

          “Welfare Plan” shall mean any employee welfare benefit plan, as defined in section 3(1) of
ERISA, including, without limitation, any such plan maintained to provide benefits to former
employees of such entities, that may not be terminated by such entities in their sole discretion at
any time without any material liability.

          “Withdrawal Liability” shall mean 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 1.2. Classifications of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g. a “Eurodollar Loan” or “Base Rate
Loan”). Borrowings also may be classified and referred to by Type (e.g. “Eurodollar Borrowing”).

          Section 1.3. Accounting Terms and Determination. Unless otherwise defined
or specified herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared, in accordance with GAAP as in effect from time to time, applied on a
basis consistent with the most recent audited financial statements of the Borrower delivered
pursuant to Section 5.1(a); provided, that if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in Section 5.15 or
Section 6.6 to eliminate the effect of any change in GAAP on the operation of such covenant
(or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend
Section 5.15 or Section 6.6 for such purpose), then the Borrower’s compliance with
such covenant shall be determined on the basis of GAAP in effect immediately before the relevant
change in GAAP became effective, until either such notice is withdrawn or such covenant is amended
in a manner satisfactory to the Borrower and the Required Lenders.

          Section 1.4. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the context may require,
any pronoun shall include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and effect as the word
“shall”. In the computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including” and the word “to” means “to but excluding”. Unless the
context requires otherwise (i) any definition of or reference to any agreement, instrument or

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other document herein shall be construed as referring to such agreement, instrument or other
document as it was originally executed or as it may from time to time be amended, restated,
supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (ii) any reference herein to any Person shall be construed to
include such Person’s successors and permitted assigns, (iii) the words “hereof”, “herein” and
“hereunder” and words of similar import shall be construed to refer to this Agreement as a whole
and not to any particular provision hereof, (iv) all references to Articles, Sections, Exhibits,
Annexes and Schedules shall be construed to refer to Articles, Sections, Exhibits, Annexes and
Schedules to this Agreement and (v) all references to a specific time shall be construed to refer
to the time in the city and state of the Administrative Agent’s principal office, unless otherwise
indicated.

ARTICLE II

AMOUNT AND TERMS OF THE COMMITMENTS

          Section 2.1. General Description of Facilities. Subject to and upon the
terms and conditions herein set forth, each Lender severally agrees to make a Loan to the Borrower
in a principal amount not exceeding such Lender’s Commitment on the Effective Date.

          Section 2.2. Commitments. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make a single loan (each, a “Loan”) to the Borrower on the
Effective Date in a principal amount not to exceed the Commitment of such Lender; provided,
that if for any reason the full amount of such Lender’s Commitment is not fully drawn on the
Effective Date, the undrawn portion thereof shall automatically be cancelled. The Loans may be,
from time to time, Base Rate Loans or Eurodollar Loans or a combination thereof. The execution and
delivery of this Agreement by the Borrower and the satisfaction of all conditions precedent
pursuant to Article III shall be deemed to constitute the Borrower’s request to borrow the
Loans on the Effective Date.

          Section 2.3. Funding of Borrowings.

          (a) Each Lender will make available each Loan to be made by it hereunder on the
proposed date thereof by wire transfer in immediately available funds by 11:00 a.m. (New York time)
to the Administrative Agent at the Payment Office. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts that it receives, in like funds by the
close of business on such proposed date, to an account maintained by the Borrower with the
Administrative Agent or at the Borrower’s option, by effecting a wire transfer of such amounts to
an account designated by the Borrower to the Administrative Agent.

          (b) Unless the Administrative Agent shall have been notified by any Lender prior to
5:00 p.m. (New York time) one (1) Business Day prior to the date of a Borrowing in which such
Lender is to participate 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 amount available to the Administrative Agent on such date, and the Administrative Agent, in
reliance on such assumption, may make available to the Borrower on such date a corresponding
amount. If such corresponding amount is not in fact made available to

23

 

the Administrative Agent by such Lender on the date of such Borrowing, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from such Lender together
with interest at the Federal Funds Rate until the second Business Day after such demand and
thereafter at the Base Rate. If such Lender does not pay such corresponding amount forthwith upon
the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding amount to the Administrative
Agent together with interest at the rate specified for such Borrowing. Nothing in this subsection
shall be deemed to relieve any Lender from its obligation to fund its Pro Rata Share of any
Borrowing hereunder or to prejudice any rights which the Borrower may have against any Lender as a
result of any default by such Lender hereunder.

          (c) No Lender shall be responsible for any default by any other Lender in its
obligations hereunder, and each Lender shall be obligated to make its Loans provided to be made by
it hereunder, regardless of the failure of any other Lender to make its Loans hereunder.

          Section 2.4. Interest Elections.

          (a) After the making of the initial Loan, the Borrower may elect to convert such
Borrowing into a different Type or to continue such Borrowing, and in the case of a Eurodollar
Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected Borrowing, in which case
each such portion shall be allocated ratably among the Lenders holding 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, the Borrower shall give the
Administrative Agent prior written notice (or telephonic notice promptly confirmed in writing)
substantially in the form of Exhibit A (a “Notice of Conversion/Continuation”) of each
Borrowing that is to be converted or continued, as the case may be, (x) prior to 11:00 a.m. (New
York time) on the requested date of a conversion into a Base Rate Borrowing and (y) prior to 11:00
a.m. (New York time) three (3) Business Days prior to a continuation of or conversion into a
Eurodollar Borrowing. Each such Notice of Conversion/Continuation shall be irrevocable and shall
specify (i) the Borrowing to which such Notice of Conversion/Continuation applies and if different
options are being elected with respect to different portions thereof, the portions thereof that are
to be allocated to each resulting Borrowing (in which case the information to be specified pursuant
to clauses (iii) and (iv) shall be specified for each resulting Borrowing); (ii) the effective date
of the election made pursuant to such Notice of Conversion/Continuation, which shall be a Business
Day, (iii) whether the resulting Borrowing is to be a Base Rate Borrowing or a Eurodollar
Borrowing; and (iv) if the resulting Borrowing is to be a Eurodollar Borrowing, the Interest Period
applicable thereto after giving effect to such election, which shall be a period contemplated by
the definition of “Interest Period”. If any such Notice of Conversion/Continuation requests a
Eurodollar Borrowing but does not specify an Interest Period, the Borrower shall be deemed to have
selected an Interest Period of one month.

          (c) If, on the expiration of any Interest Period in respect of any Eurodollar
Borrowing, the Borrower shall have failed to deliver a Notice of Conversion/Continuation, then,

24

 

unless such Borrowing is repaid as provided herein, the Borrower shall be deemed to have
elected to convert such Borrowing to a Base Rate Borrowing. No Borrowing may be converted into, or
continued as, a Eurodollar Borrowing if a Default or an Event of Default exists, unless the
Administrative Agent and each of the Lenders shall have otherwise consented in writing. No
conversion of any Eurodollar Loans shall be permitted except on the last day of the Interest Period
in respect thereof.

          (d) Upon receipt of any Notice of Conversion/Continuation, the Administrative Agent
shall promptly notify each Lender of the details thereof and of such Lender’s portion of each
resulting Borrowing.

          (e) The aggregate principal amount of each Eurodollar Borrowing shall be not less
than $5,000,000 or a larger multiple of $1,000,000, and the aggregate principal amount of each Base
Rate Borrowing shall not be less than $1,000,000 or a larger multiple of $500,000. At no time
shall the total number of Eurodollar Borrowings outstanding at any time exceed five.

          Section 2.5. Optional Reduction and Termination of Commitments. The
Commitments shall terminate on the Effective Date upon the making of the Loans pursuant to
Section 2.2.

          Section 2.6. Repayment of Loans. The Borrower unconditionally promises to
pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of
the Loan of such Lender payable on such date(s) and in such amounts as may be required from time to
time pursuant to this Agreement; provided that, to the extent not previously paid, the
aggregate unpaid principal balance of the Loans shall be due and payable on the Maturity Date.

          Section 2.7. Evidence of Indebtedness. (a) Each Lender shall maintain in
accordance with its usual practice appropriate records evidencing the Indebtedness of the Borrower
to such Lender resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable thereon and paid to such Lender from time to time under
this Agreement. The Administrative Agent shall maintain appropriate records in which shall be
recorded (i) the Commitment of each Lender, (ii) the amount of each Loan made hereunder by each
Lender, the Type thereof and the Interest Period applicable thereto, (iii) the date of each
continuation thereof pursuant to Section 2.4, (iv) the date of each conversion of all or a
portion thereof to another Type pursuant to Section 2.4, (v) the date and amount of any
principal or interest due and payable or to become due and payable from the Borrower to each Lender
hereunder in respect of such Loans and (vi) both the date and amount of any sum received by the
Administrative Agent hereunder from the Borrower in respect of the Loans and each Lender’s Pro Rata
Share thereof. The entries made in such records shall be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded; provided, that the failure or
delay of any Lender or the Administrative Agent in maintaining or making entries into any such
record or any error therein shall not in any manner affect the obligation of the Borrower to repay
the Loans (both principal and unpaid accrued interest) of such Lender in accordance with the terms
of this Agreement.

          (b) At the request of any Lender at any time, the Borrower agrees that it will
execute and deliver to such Lender a Note payable to the order of such Lender.

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          Section 2.8. Optional Prepayments. The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, without premium or
penalty, by giving irrevocable written notice (or telephonic notice promptly confirmed in writing)
to the Administrative Agent no later than (i) in the case of prepayment of any Eurodollar
Borrowing, 11:00 a.m. (New York time) not less than three (3) Business Days prior to any such
prepayment and (ii) in the case of any prepayment of any Base Rate Borrowing, 10:00 a.m. (New York
time) on the date of such prepayment. Each such notice shall be irrevocable and shall specify the
proposed date of such prepayment and the principal amount of each Borrowing or portion thereof to
be prepaid. Upon receipt of any such notice, the Administrative Agent shall promptly notify each
Lender of the contents thereof and of such Lender’s Pro Rata Share of any such prepayment. If such
notice is given, the aggregate amount specified in such notice shall be due and payable on the date
designated in such notice, together with accrued interest to such date on the amount so prepaid in
accordance with Section 2.10(d); provided, that if a Eurodollar Borrowing
is prepaid on a date other than the last day of an Interest Period applicable thereto, the Borrower
shall also pay all amounts required pursuant to Section 2.16. Each partial prepayment of
any Loan shall be, in the case of Eurodollar Loans, in a minimum amount of $3,000,000 (or lesser
amount equal to outstanding Borrowings) and integral multiples of $1,000,000 in excess thereof, and
in the case of Base Rate Loans, in a minimum amount of $1,000,000 (or lesser amount equal to
outstanding Borrowings) and integral multiples of $1,000,000 in excess thereof. Each prepayment of
a Borrowing shall be applied ratably to the Loans comprising such Borrowing.

          Section 2.9. Mandatory Prepayments.

          (a) Each prepayment pursuant to this Section 2.9 shall be applied first to the Base
Rate Loans to the full extent thereof, and second to the Eurodollar Loans to the full extent
thereof.

          (b) If at any time (i) an Event of Loss with respect to the Project shall occur for
which proceeds are received, or (ii) the Borrower shall, directly or indirectly, receive net
proceeds from any sale or disposition of any asset or property (except for sales permitted by
Section 6.3(c)), then the Borrower shall, immediately (in the case of clause (i) above,
subject to the immediately following proviso) upon receipt of such proceeds, prepay the Obligations
(other than Hedging Obligations) with 100% of such proceeds; provided that, if the Borrower
shall have given the Administrative Agent written notice on or before the 60th day following the
date of determination of the occurrence of such Event of Loss or within 90 days of the event giving
rise to such determination, whichever period is shorter, stating that (i) it believes the Project
could be repaired and/or restored and that the Restoration Conditions (as defined below) could be
satisfied, and that the Borrower is diligently working to obtain the necessary information to meet
the Restoration Conditions, the Borrower may defer such prepayment of such Obligations for a period
of up to 30 additional days (and prepayment will not be required if the Restoration Conditions are
met by the end of such period). From the date of the determination of the occurrence of such Event
of Loss, the Borrower shall provide to the Administrative Agent a monthly status report describing
the status of discussions with contractors and insurers or Governmental Authorities, as the case
may be (including information on cost and scheduling estimates); and provided,
further, that in the case of a prepayment required in accordance with

26

 

clause (i) above, such prepayment shall include accrued interest on the proceeds to the date
of prepayment. As used in this Section 2.9(b), “Restoration Conditions” shall mean (a) no
Default or Event of Default shall have occurred and be continuing and (b) the Borrower shall have
delivered to the Administrative Agent (I) contracts for such repair or replacement demonstrating
the Borrower’s ability to effect such repair or replacement at a cost not greater than the
insurance proceeds therefor (or, if such cost is greater, accompanied by an explanation of the
source of funds for such excess amounts satisfactory to the Required Lenders), (II) cash-flow
projections and other assurances satisfactory to the Required Lenders providing for the Borrower’s
ability to meet its obligations under the Loan Documents during the period from such loss until and
following completion of such repair or replacement and (III) assurances that all Project Documents
and Governmental Approvals shall remain in full force and effect during such period and thereafter
to the satisfaction of the Required Lenders and that the Borrower and the Project are in compliance
with all Governmental Requirements.

          (c) If the Borrower issues any debt or equity securities (other than (i) debt
permitted pursuant to Section 6.1(a), (b), (c), or (d), or (ii) capital contributions by
the Partners if such capital contributions are made for the purpose of funding capital expenditures
of the Borrower (as determined in good faith by the Borrower and certified in writing to the
Administrative Agent prior to the date of such capital contribution)), including debt issued or
owing to an Affiliate of the Borrower, then no later than the Business Day following the date of
receipt of the Net Cash Proceeds thereof, Borrower shall prepay the Obligations (other than Hedging
Obligations) in an amount equal to all such Net Cash Proceeds.

          (d) Any prepayments made by the Borrower pursuant to paragraphs (b) or (c) above
shall be applied as follows: first, to fees and reimbursable expenses of the Administrative
Agent and the Collateral Agent then due and payable pursuant to any of the Loan Documents;
second, to all reimbursable expenses, if any, of the Lenders then due and payable pursuant
to any of the Loan Documents; third, to interest then due and payable on Loans made to the
Borrower; and fourth, to the aggregate outstanding principal amount of the Loans, until the
same shall have been paid in full, pro rata to the Lenders based on their respective Pro Rata
Shares of the Loans.

          Section 2.10. Interest on Loans.

          (a) The Borrower shall pay interest on each Base Rate Loan at the Base Rate in
effect from time to time and on each Eurodollar Loan at the Adjusted LIBO Rate for the applicable
Interest Period in effect for such Loan, plus, in each case, the Applicable Margin in effect from
time to time.

          (b) While an Event of Default exists or after acceleration, at the option of the
Required Lenders, the Borrower shall pay interest (“Default Interest”) with respect to all
Eurodollar Loans then due (or overdue) and payable at the rate otherwise applicable for the
then-current Interest Period plus an additional 2% per annum until the last day of such Interest
Period, and thereafter, and with respect to all Base Rate Loans and all other Obligations then due
(or overdue) and payable hereunder (other than Loans), at the rate in effect for Base Rate Loans,
plus an additional 2% per annum.

27

 

          (c) Interest on the principal amount of all Loans shall accrue from and including
the date such Loans are made to but excluding the date of any repayment thereof. Interest on all
outstanding Base Rate Loans shall be payable quarterly in arrears on the last day of each March,
June, September and December and on the Maturity Date. Interest on all outstanding Eurodollar
Loans shall be payable on the last day of each Interest Period applicable thereto. Interest on any
Loan which is converted into a Loan of another Type or which is repaid or prepaid shall be payable
on the date of such conversion or on the date of any such repayment or prepayment (on the amount
repaid or prepaid) thereof. All Default Interest shall be payable on demand.

          (d) The Administrative Agent shall determine each interest rate applicable to the
Loans hereunder and shall promptly notify the Borrower and the Lenders of such rate in writing (or
by telephone, promptly confirmed in writing). Any such determination shall be conclusive and
binding for all purposes, absent manifest error.

          Section 2.11. Fees. The Borrower shall pay to the Administrative Agent for
its own account fees in the amounts and at the times previously agreed upon in writing by the
Borrower and the Administrative Agent.

          Section 2.12. Computation of Interest and Fees. Interest hereunder based on
the Base Rate and all fees shall be computed on the basis of a year of 365 days (or 366 days in a
leap year) and paid for the actual number of days elapsed (including the first day but excluding
the last day). All other interest shall be computed on the basis of a year of 360 days and paid
for the actual number of days elapsed (including the first day but excluding the last day).

          Section 2.13. Inability to Determine Interest Rates. If prior to the
commencement of any Interest Period for any Eurodollar Borrowing,

     (i) the Administrative Agent shall have determined (which determination shall
be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the
relevant interbank market, adequate means do not exist for ascertaining LIBOR for such
Interest Period, or

     (ii) the Administrative Agent shall have received notice from the Required
Lenders that the Adjusted LIBO Rate does not adequately and fairly reflect the cost to such
Lenders (or Lender, as the case may be) of making, funding or maintaining their (or its, as
the case may be) Eurodollar Loans for such Interest Period,

the Administrative Agent shall give written notice (or telephonic notice, promptly confirmed in
writing) to the Borrower and to the Lenders as soon as practicable thereafter. Until the
Administrative Agent shall notify the Borrower and the Lenders that the circumstances giving rise
to such notice no longer exist, (i) the obligations of the Lenders to continue or convert
outstanding Loans as or into Eurodollar Loans shall be suspended and (ii) all such affected Loans
shall be converted into Base Rate Loans on the last day of the then current Interest Period
applicable thereto unless the Borrower prepays such Loans in accordance with this Agreement.

          Section 2.14. Illegality. If any Change in Law shall make it unlawful or
impossible for any Lender to make, maintain or fund any Eurodollar Loan and such Lender shall so
notify

28

 

the Administrative Agent, the Administrative Agent shall promptly give notice thereof to the
Borrower and the other Lenders, whereupon until such Lender notifies the Administrative Agent and
the Borrower that the circumstances giving rise to such suspension no longer exist, the obligation
of such Lender to continue or convert outstanding Loans as or into Eurodollar Loans, shall be
suspended. If the affected Eurodollar Loan is then outstanding, such Loan shall be converted to a
Base Rate Loan either (i) on the last day of the then current Interest Period applicable to such
Eurodollar Loan if such Lender may lawfully continue to maintain such Loan to such date or (ii)
immediately if such Lender shall determine that it may not lawfully continue to maintain such
Eurodollar Loan to such date.

          Section 2.15. Increased Costs.

          (a) If any Change in Law shall:

     (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement that is not otherwise included in the determination of the Adjusted LIBO Rate
hereunder against assets of, deposits with or for the account of, or credit extended by, any
Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate); or

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

and the result of either of the foregoing is to increase the cost to such Lender of making,
converting into, continuing or maintaining a Eurodollar Loan or to reduce the amount received or
receivable by such Lender hereunder (whether of principal, interest or any other amount), then the
Borrower shall pay such additional amount or amounts sufficient to compensate such Lender, for such
additional costs incurred or reduction suffered.

          (b) If any Lender shall have determined that on or after the date of this Agreement
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 parent corporation) as a
consequence of its obligations hereunder to a level below that which such Lender or such Lender’s
parent corporation could have achieved but for such Change in Law (taking into consideration such
Lender’s policies or the policies of such Lender’s parent corporation with respect to capital
adequacy) then, from time to time, the Borrower shall pay to such Lender such additional amounts as
will compensate such Lender or such Lender’s parent corporation for any such reduction suffered.

          (c) A certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender or such Lender’s parent corporation, as the case may be, specified in
paragraph (a) or (b) of this Section shall be delivered to the Borrower (with a copy to the
Administrative Agent and certifying that such Lender is similarly charging its other similarly
situated borrowers) and shall be conclusive, absent manifest error. The Borrower shall pay any
such Lender such amount or amounts within 10 days after receipt thereof.

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          (d) Failure or delay on the part of any Lender to demand compensation pursuant to
this Section shall not constitute a waiver of such Lender’s right to demand such compensation;
provided, that the Borrower shall not be required to compensate a Lender under this Section
for any increased costs or reductions incurred more than 90 days prior to the date that such Lender
notifies the Borrower of 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 such 90-day period shall be extended to include
the period of such retroactive effect.

          Section 2.16. Funding Indemnity. In the event of (a) the payment of any
principal of a Eurodollar Loan other than on the last day of the Interest Period applicable thereto
(including as a result of an Event of Default), other than as a result of a mandatory prepayment
required by Section 2.9, (b) the conversion or continuation of a Eurodollar Loan other than
on the last day of the Interest Period applicable thereto, or (c) the failure by the Borrower to
borrow, prepay, convert or continue any Eurodollar Loan on the date specified in any applicable
notice (regardless of whether such notice is withdrawn or revoked), then, in any such event, unless
waived by the Administrative Agent, the Borrower shall compensate each Lender, within ten (10) days
after receipt from such Lender of the certificate referred to below, for any loss, cost or expense
attributable to such event. Such loss, cost or expense shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (A) the amount of interest that would have
accrued on the principal amount of such Eurodollar Loan if such event had not occurred at the
Adjusted LIBO Rate applicable to such Eurodollar Loan for the period from the date of such event to
the last day of the then current Interest Period therefor (or in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for such Eurodollar
Loan) over (B) the amount of interest that would accrue on the principal amount of such Eurodollar
Loan for the same period if the Adjusted LIBO Rate were set on the date such Eurodollar Loan was
prepaid or converted or the date on which the Borrower failed to borrow, convert or continue such
Eurodollar Loan. A certificate as to any additional amount payable under this Section 2.16
submitted to the Borrower by any Lender (with a copy to the Administrative Agent) shall be
conclusive, absent manifest error.

          Section 2.17. Taxes.

          (a) Any and all payments by or on account of any obligation of the Borrower
hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided, that if the Borrower 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) the Administrative Agent, the Collateral Agent or any Lender (as the case may
be) shall receive an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable law.

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

30

 

          (c) The Borrower shall indemnify the Administrative Agent, the Collateral Agent and
each Lender, within ten (10) days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, the Collateral Agent or such
Lender, as the case may be, on or with respect to any payment by or on account of any obligation of
the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) 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 Borrower by a Lender, or
by the Administrative Agent or the Collateral Agent on its own behalf or on behalf of a Lender,
shall be conclusive absent manifest error.

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

          (e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the Code or any treaty to which the United States is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the Borrower as will permit
such payments to be made without withholding or at a reduced rate. Without limiting the generality
of the foregoing, each Foreign Lender agrees that it will deliver to the Administrative Agent and
the Borrower (or in the case of a Participant, to the Lender from which the related participation
shall have been purchased), as appropriate, two (2) duly completed copies of (i) Internal Revenue
Service Form W-8 ECI, or any successor form thereto, certifying that the payments received from the
Borrower hereunder are effectively connected with such Foreign Lender’s conduct of a trade or
business in the United States; or (ii) Internal Revenue Service Form W-8 BEN, or any successor form
thereto, certifying that such Foreign Lender is entitled to benefits under an income tax treaty to
which the United States is a party which reduces the rate of withholding tax on payments of
interest; or (iii) Internal Revenue Service Form W-8 BEN, or any successor form prescribed by the
Internal Revenue Service, together with a certificate (A) establishing that the payment to the
Foreign Lender qualifies as “portfolio interest” exempt from U.S. withholding tax under Code
section 871(h) or 881(c), and (B) stating that (1) the Foreign Lender is not a bank for purposes of
Code section 881(c)(3)(A), or the obligation of the Borrower hereunder is not, with respect
to such Foreign Lender, a loan agreement entered into in the ordinary course of its trade or
business, within the meaning of that section; (2) the Foreign Lender is not a 10% shareholder of
the Borrower within the meaning of Code section 871(h)(3) or 881(c)(3)(B); and (3) the Foreign
Lender is not a controlled foreign corporation that is related to the Borrower within the meaning
of Code section 881(c)(3)(C); or (iv) such other Internal Revenue Service forms as may be
applicable to the Foreign Lender, including Forms W-8 IMY or W-8 EXP. Each such Foreign Lender
shall deliver to the Borrower and the Administrative Agent such forms on or before the date that it
becomes a party to this Agreement (or in the case of a Participant, on or before the date such
Participant

31

 

purchases the related participation). In addition, each such Foreign Lender shall deliver
such forms promptly upon the obsolescence or invalidity of any form previously delivered by such
Foreign Lender. Each such Foreign Lender shall promptly notify the Borrower and the Administrative
Agent at any time that it determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification adopted by the Internal
Revenue Service for such purpose).

          Section 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

          (a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest or fees, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to 12:00 noon (New York time), on the date when
due, in immediately available funds, free and clear of any defenses, rights of set-off,
counterclaim, or withholding or deduction of taxes. 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 the Payment Office except that payments pursuant to
Section 2.15, 2.16 or 2.17 and 10.3 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 made 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, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of interest and fees then
due to such parties, and (ii) second, towards payment of principal then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal then due to such
parties.

          (c) Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for the account of the
Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume
that the Borrower has made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders the amount or amounts due. In such event, if the
Borrower 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 greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation.

          (d) If any Lender shall fail to make any payment required to be made by it pursuant
to Section 2.3(b), 2.21(c), or 10.3(d), then the
Administrative Agent may, in its

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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 2.19. Mitigation of Obligations; Replacement of Lenders.

          (a) If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any Governmental Authority for
the account of any Lender pursuant to Section 2.13, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loan 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 Section 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 Borrower 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 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any Governmental Authority for
the account of any Lender pursuant to Section 2.13, or if any Lender defaults in its
obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained in Section
10.4), 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 Borrower shall have received the prior written consent
of the Administrative Agent, which consent shall not unreasonably be 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 Borrower (in the
case of all other amounts), (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.15 or payments required to be made pursuant to Section
2.13, such assignment will result in a reduction in such compensation or payments and (iv) this
Section 2.19(b) shall have no effect during any period when there are two or fewer Lenders.
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 Borrower to require
such assignment and delegation cease to apply.

ARTICLE III

CONDITIONS PRECEDENT TO LOANS

          Section 3.1. Conditions To Effectiveness. The obligations of the Lenders to
make Loans shall not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 10.2).

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          (a) The Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including reimbursement or payment of all out-of-pocket
expenses (including reasonable fees, charges and disbursements of counsel to the Administrative
Agent as set forth in Section 10.3(a)) required to be reimbursed or paid by the
Borrower hereunder, under any other Loan Document and under any agreement with the Administrative
Agent, the Collateral Agent or SunTrust Capital Markets, Inc., as Arranger.

          (b) The Administrative Agent (or its counsel) and the Collateral Agent shall have
received the following:

     (i) a counterpart of this Agreement signed by or on behalf of each party
hereto or written evidence satisfactory to the Administrative Agent (which may include
telecopy transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement;

     (ii) duly executed Notes payable to each Lender (if requested);

     (iii) the duly executed Security Agreement, together with (A) UCC-1 financing
statements (or assignments or amendments thereof) and other applicable documents under the
laws of the jurisdictions with respect to the perfection of the Liens granted under the
Security Agreement, as requested by the Collateral Agent in order to perfect such Liens,
duly executed by the Borrower (if applicable) and (B) copies of favorable UCC, tax, judgment
and fixture lien search reports in all necessary or appropriate jurisdictions and under all
legal and trade names of the Borrower reasonably requested by the Lenders, indicating that
there are no prior Liens on any of the Collateral other than Permitted Encumbrances;

     (iv) duly executed Control Account Agreements with each bank that maintains
deposit accounts, and each securities intermediary that maintains investment accounts, on
behalf of the Borrower on the Effective Date;

     (v) the duly executed Pledge Agreements, together with (if applicable) (A)
original certificates evidencing the issued and outstanding Capital Stock pledged to the
Collateral Agent pursuant to the Pledge Agreement, and (B) stock powers or other appropriate
instruments of transfer executed in blank;

     (vi) Mortgages covering all of the Real Estate (subject to exceptions
specifically identified to the Collateral Agent by the Borrower and agreed to by the
Collateral Agent in its sole discretion), duly completed and executed (as applicable) in
sufficient number of counterparts and in proper form for recording and, if reasonably
requested, such further supporting evidence of title, legal opinions and evidence that such
Mortgages will create a valid and enforceable first priority Lien (except as permitted by
Section 6.2) on such Real Estate in favor of the Collateral Agent for the benefit of
the Lenders;

     (vii) All property in which the Collateral Agent shall, at such time, be
entitled to have a Lien pursuant to this Agreement or any Loan Document (physically
delivered to

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the possession of the Collateral Agent or any bailee accepted by the Collateral Agent)
to the extent that such possession is necessary for the purpose of perfecting the Collateral
Agent’s Lien in such Collateral;

     (viii) copies of a duly executed letter, in form and substance satisfactory
to Collateral Agent, executed by each of the Existing Lenders or the agent thereof, together
with (a) UCC-3 or other appropriate termination, amendment or assignment statements, in form
and substance satisfactory to Collateral Agent, releasing (or continuing in favor of the
Lenders) all liens of the Existing Lenders upon any of the personal property of the
Borrower, (b) cancellations and releases, or amendments or assignments, in form and
substance satisfactory to the Collateral Agent, releasing (or continuing in favor of the
Lenders) all liens of the Existing Lenders upon any of the real property of the Borrower,
and (c) any other releases, terminations, similar amendments or assignments or other
documents reasonably required by the Collateral Agent to evidence the refinancing in full,
as and to the extent set forth in Section 10.15, of Indebtedness owed to the
Existing Lenders;

     (ix) a certificate of the Secretary or Assistant Secretary of the Borrower
and the Partners, attaching and certifying copies of its bylaws and of the resolutions of
its boards of directors, or partnership agreement or limited liability company agreement, or
comparable organizational documents and authorizations, authorizing the execution, delivery
and performance of the Loan Documents to which it is a party and certifying the name, title
and true signature of each officer of such Person executing the Loan Documents to which it
is a party;

     (x) certified copies of the articles or certificate of incorporation,
certificate of organization or limited partnership, or other registered organizational
documents of the Borrower and the Partners, together with certificates of good standing or
existence, as may be available from the Secretary of State of the jurisdiction of
organization of such Person and each other jurisdiction where such Person is required to be
qualified to do business as a foreign corporation;

     (xi) a favorable written opinion of Bracewell & Giuliani LLP, counsel to the
Borrower, Enterprise CHOPS and Manta Ray, addressed to the Administrative Agent and each of
the Lenders, and covering such matters relating to the Borrower, Enterprise CHOPS and Manta
Ray, the Loan Documents and the transactions contemplated therein, as the Administrative
Agent or the Required Lenders shall reasonably request; a favorable written opinion of Carol
F. Melcher, Associate General Counsel of the Borrower, covering such matters relating to the
Borrower, the Partners and Manta Ray, the Loan Documents and the transactions contemplated
therein, as the Administrative Agent or the Required Lenders shall reasonably request; a
favorable written opinion of Baker Botts L.L.P., counsel to Valero CHOPS, addressed to the
Administrative Agent and each of the Lenders, and covering such matters relating to Valero
CHOPS, the Loan Documents and the transactions contemplated therein, as the Administrative
Agent or the Required Lenders shall reasonably request; and a favorable written opinion of
Jay Browning, Vice President – Corporate Law and Secretary of Valero, covering such

35

 

matters relating to Valero CHOPS, the Loan Documents and the transactions contemplated
therein, as the Administrative Agent or the Required Lenders shall reasonably request;

     (xii) a certificate, dated the Effective Date and signed by a Responsible
Officer, certifying that (x) no Default or Event of Default exists, (y) all representations
and warranties of the Borrower and the Partners set forth in the Loan Documents are true and
correct in all material respects, and (z) since December 31, 2004, there shall have been no
change which has had or could reasonably be expected to have a Material Adverse Effect;

     (xiii) a duly executed funds disbursement agreement, together with a report
setting forth the sources and uses of the proceeds hereof;

     (xiv) certified (by a Responsible Officer or a secretary of the Borrower)
copies of (a) all agreements, indentures or notes governing the terms of any Material
Indebtedness, (b) all Material Project Documents, (c) the Assignment (CHOPS), and (d) the
Participation Agreement, which together shall constitute all material agreements, documents
and instruments to which the Borrower, the Partners or any of their respective assets are
bound;

     (xv) certificates of insurance, in form and detail acceptable to the
Collateral Agent, describing the types and amounts of insurance (property and liability)
covering any of the tangible insurable Collateral maintained by the Borrower, and in each
case to the extent required by Section 5.5 naming the Collateral Agent as loss payee
or additional insured, as the case may be, together with a lender’s loss payable endorsement
in form and substance satisfactory to the Collateral Agent;

     (xvi) (a) a certificate, dated the Effective Date and signed by the chief
financial officer (or another officer reasonably acceptable to the Administrative Agent) of
the Borrower and each Partner, confirming the solvency of the Borrower and each Partner
before and after giving effect to all transactions contemplated to occur on the Effective
Date by the Loan Documents (including the refinancing of Existing Debt with Loans), together
with (b) the Projections;

     (xvii) copies of (A) the internally prepared quarterly financial statements
of Borrower for the Fiscal Quarter ending on March 31, 2005, and (B) the audited financial
statements for Borrower and its subsidiaries for the Fiscal Year ending December 31, 2004;

     (xviii) satisfactory evidence that the Partners own directly or indirectly
100% of the legal and beneficial interests in the Capital Stock of the Borrower.

     (xix) satisfactory evidence regarding the scope and materiality of any
environmental risks affecting the Borrower;

     (xx) each Effective Date Purchase and Sale Agreement, reflecting the
dedication by the Material Producer party thereto of specified volumes of Dedicated

36

 

Production (as defined in such Purchase and Sale Agreements) for delivery on the
Cameron Highway Oil Pipeline, the terms of which dedication shall be reasonably satisfactory
to the Administrative Agent (it being understood that the terms of the copies of the
Effective Date Purchase and Sale Agreements initially provided to the Administrative Agent
in connection with its decision to enter into this Agreement were satisfactory to the
Administrative Agent);

     (xxi) the Sponsor LOCs, each issued in form and from an issuer reasonably
satisfactory to the Administrative Agent and noting the Administrative Agent as beneficiary;

     (xxii) a notice, substantially in the form of Exhibit H, from the
Borrower to each Material Producer that has executed a Consent; and

     (xxiii) a duly executed Manta Ray Consent.

          (c) the making of the Loans does not violate any Governmental Requirement on the
date of or immediately following the Loan and is not enjoined, temporarily, preliminarily or
permanently.

          Section 3.2. 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 and the
Collateral Agent for the account of each of the Lenders and, except for the Notes, in sufficient
counterparts or copies for each of the Lenders and shall be in form and substance satisfactory in
all respects to the Administrative Agent and the Collateral Agent.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

          The Borrower represents and warrants to the Administrative Agent and each Lender as follows:

          Section 4.1. Organization; Powers. The Borrower is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization or formation,
has all requisite power and authority to carry on its business as now conducted and, except where
the failure to do so, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.

          Section 4.2. Authorization; Enforceability.

          (a) The execution, delivery and performance by the Borrower of each Transaction
Document to which it is a party are within its powers, have been duly authorized by all necessary
organizational, and if required, Partner action and do not contravene any provision of its
organizational documents, any Governmental Requirement or contractual obligation binding on

37

 

or affecting it or any of its properties or assets that could reasonably be expected to have a
Material Adverse Effect, and such execution, delivery and performance do not and will not result in
or require the creation of any Lien upon or with respect to any of its properties, other than
Permitted Encumbrances and the other Liens created or permitted by the Loan Documents, or result in
the acceleration of any obligation under, or in a condition or event that constitutes (or that,
upon notice or lapse of time or both, would constitute) an event of default under any material
contractual obligation of such party. This Agreement has been, and each other Loan Document to
which the Borrower, the Partners or the Sponsors will be a party when delivered hereunder will have
been, duly executed and delivered by the Borrower, the Partners or the Sponsors, as the case may
be.

          (b) This Agreement and each other Loan Document to which the Borrower is a party are
legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance
with their respective terms, subject to the qualification that the enforcement of the rights and
remedies herein and therein is subject to (i) bankruptcy and other similar laws of general
application affecting rights and remedies of creditors and (ii) the application of general
principles of equity (regardless of whether considered in a proceeding in equity or at law). The
Borrower has delivered to the Lenders and the Administrative Agent (or the Collateral Agent, as
applicable) true and complete copies of each executed Material Document, and except as disclosed to
the Lenders and the Administrative Agent (or the Collateral Agent, as applicable) in writing, none
of the Material Documents have been amended, modified or terminated. The Borrower has disclosed in
writing to the Lenders and the Administrative Agent all notices of default under any Transaction
Document. Neither the Borrower, the Partners, the Sponsors nor, to the Borrower’s knowledge, any
other Transaction Party is in default under this Agreement or the other executed Material
Documents. Neither the Borrower, the Partners, the Sponsors nor, to the Borrower’s knowledge, any
other Transaction Party is in default under any other executed Transaction Document, except (i)
defaults that could not reasonably be expected to have a Material Adverse Effect and (ii) defaults
by other Transaction Parties (other than the Borrower, the Partners and the Sponsors) under
Additional Purchase and Sale Agreements.

          Section 4.3. Other Material Agreements. Other than as permitted hereby, the
Borrower is not a party to any agreement providing for, evidencing, securing or otherwise relating
to any Indebtedness of the Borrower, and all obligations of the Borrower to issuers of surety or
appeal bonds have been issued for account of the Borrower except to the extent permitted by the
Transaction Documents.

          Section 4.4. Governmental Approvals; Material Permits; No Conflicts.

          (a) All material Governmental Approvals, including without limitation, all Material
Permits, that are at any time required to be obtained or made by the Borrower in connection with
(i) the development, use, ownership, financing and maintenance of the Cameron Highway System and
(ii) any Loans and granting of Liens under, and the execution, delivery and performance by the
Borrower of, the then existing Transaction Documents, have been (or will be at such time as it is
necessary to be) obtained and are in full force and effect. No material change in the facts or
circumstances reported or assumed in the applications for the granting of such Material Permits
exists (except such change which could not reasonably be expected to result in

38

 

any revocation of such Material Permits or any material fine, penalty or other action being
taken against the Borrower by any Governmental Authority), and there are not any proceedings
pending or, to the knowledge of the Borrower, threatened which would reasonably be expected to
jeopardize the validity of such Material Permits. The Borrower does not have any reason to believe
that it will be unable to obtain or maintain the Material Permits in the ordinary course of
business and at such time or times as may be necessary to avoid any substantial delay in, or
material impairment to, the consummation and performance of the Transactions.

          (b) All Governmental Approvals and other filings, recordings, registrations and
other actions have been made, obtained and taken in all relevant jurisdictions that are necessary
to create and perfect the Liens provided for in the Security Documents, and the Collateral Agent,
for the benefit of itself and Lenders, will hold the Liens provided for in the Security Documents,
and the Security Documents shall constitute a valid, direct, continuing first priority Lien on the
Collateral, subject only to Permitted Encumbrances and other Liens permitted by the Loan Documents.

          (c) The execution, delivery and performance by the Borrower of the Loan Documents,
including this Agreement, and the Material Project Documents do not contravene or violate any
provision of the organizational documents of the Borrower.

          Section 4.5. Financial Condition; No Material Adverse Change; Material
Obligations.

          (a) On the date of the initial Loan, the financial statements delivered pursuant to
Section 3.1(b)(xvii) present fairly, in all material respects, the
financial position of the Borrower as of such date in accordance with GAAP, subject to year-end
adjustments and the absence of footnotes.

          (b) Since December 31, 2004, there has been no material adverse change in the
business, assets, operations, prospects or condition, financial or otherwise, of the Borrower or
the Project. As of the Effective Date, the Borrower has no material assets other than the Project
Documents and the other assets listed on Schedule 4.5(b) and has not entered into
any material agreements or incurred any material obligations other than as contemplated by this
Agreement or the Project Documents.

          Section 4.6. Properties.

          (a) The Borrower has marketable title to the property material to its business, free
and clear of all Liens except for Permitted Encumbrances or Liens otherwise permitted or
contemplated by this Agreement or the other Loan Documents.

          (b) The Borrower owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to its business or to the construction
and operation of the Cameron Highway System, and the use thereof by the Borrower does not infringe
upon the rights of any other Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect.

39

 

          Section 4.7. Litigation and Environmental Matters.

          (a) There is no action, suit or proceeding by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or
affecting the Borrower which (i) could reasonably be expected to result in a Material Adverse
Effect or (ii) challenges the validity of this Agreement, any Note, or any other Loan Document or
Project Document.

          (b) The Borrower’s conduct of operations on its properties is in substantial
compliance with all applicable orders of any court or Governmental Authority and all applicable
Environmental Laws, except where the failure to comply with such orders or Environmental Laws could
not reasonably be expected to result in a Material Adverse Effect. The Borrower (i) has not failed
to obtain, maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has not become subject to any Environmental Liability, (iii) has not
received notice of any claim with respect to any Environmental Liability and (iv) does not know of
any basis for any Environmental Liability, in each case that could reasonably be expected to result
in a Material Adverse Effect.

          (c) All Hazardous Materials or solid waste generated at any and all property of the
Borrower which have in the past been transported, treated and disposed of by the Borrower have been
so transported, treated and disposed of only by carriers maintaining valid permits under applicable
Environmental Laws, except to the extent the failure to have such Hazardous Materials transported,
treated or disposed by such carriers could not reasonably be expected to have a Material Adverse
Effect, and only at treatment, storage and disposal facilities which, to the Borrower’s actual
knowledge, have maintained valid permits under applicable Environmental Laws, and have been and are
operating in compliance with such permits, except to the extent the failure to have such Hazardous
Materials treated, stored or disposed of at such facilities, or the failure of such carriers or
facilities to so operate, could not reasonably be expected to have a Material Adverse Effect.

          (d) To the Borrower’s actual knowledge, no Hazardous Materials have been disposed of
or otherwise released and there has been no threatened release of any Hazardous Materials on or to
any property of the Borrower except in compliance with Environmental Laws, except to the extent the
failure to do so could not reasonably be expected to have a Material Adverse Effect.

          Section 4.8. Compliance with Laws and Agreements. The Borrower is in
compliance with all Governmental Requirements 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
could not reasonably be expected to result in a Material Adverse Effect.

          Section 4.9. Investment Company Act Status. The Borrower is not an
“investment company” or a company “controlled” by an “investment company” that is incorporated in
or organized under the laws of the United States of America or any “State,” as those terms are
defined in the Investment Company Act of 1940, as amended. The execution and delivery by the
Borrower of this Agreement and the other Loan Documents and its performance

40

 

of the obligations provided for therein, will not result in a violation of the Investment
Company Act of 1940, as amended.

          Section 4.10. Public Utility Holding Company Act Status. The Borrower is
not a “holding company” or a “subsidiary company” of a “holding company” or an “affiliate” of a
“holding company” or of a “subsidiary company” of a “holding company” or a “public utility” within
the meaning of the Public Utility Holding Company Act of 1935, as amended.

          Section 4.11. Taxes. The Borrower has (a) timely filed or caused to be
filed all Tax returns and reports required to have been filed, and (b) paid or caused to be paid
all Taxes levied upon it or any of its property or income which are due and payable, including
interest and penalties, except (i) such Taxes, interest and penalties as are being contested in
good faith by appropriate proceedings and for which the Borrower has set aside on its books
adequate reserves for the payment thereof or (ii) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.

          Section 4.12. ERISA. No ERISA Reportable Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA Reportable Events
for which liability is reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect. Neither the Borrower, nor any ERISA Affiliate sponsors, maintains or
contributes to, or has at any time in the six-year period preceding the Effective Date sponsored,
maintained or contributed to, any Plan or any Multiemployer Plan.

          Section 4.13. Disclosure.

          (a) The Borrower has disclosed to the Lenders and the Administrative Agent all
material agreements, documents and instruments to which the Borrower, the Partners or any of their
respective assets are bound.

          (b) None of the statements, exhibits, documents, reports, financial statements,
certificates or other information furnished by or on behalf of the Borrower to any Lender, the
Administrative Agent or the Collateral Agent in connection with the negotiation of this Agreement
or any other Loan Document or delivered hereunder or in any other Transaction Document (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 (other than omissions that pertain to
matters of a general economic nature); provided, however, it is understood that,
with respect to such statements, exhibits, documents, reports, financial statements, certificates
or other information, any estimates or projections contained therein are based upon information
that was currently available and believed to be correct on the Effective Date and upon assumptions
believed to be reasonable on the Effective Date and the Borrower does not warrant that such
estimates and projections will ultimately prove to have been accurate. The representations and
warranties made by the Borrower, the Partners and the Sponsors in each Material Document are true
and correct in all material respects as of the date made or deemed made, and, to the best of the
Borrower’s knowledge, the representations and warranties made by the Transaction Parties (other
than the Borrower, the Partners and the Sponsors) in each Material Document are true and correct in
all material respects as of the date made or deemed made. The

41

 

representations and warranties made by each of the Borrower, the Partners and the Sponsors in
each Transaction Document (other than the Material Documents) are true and correct in all material
respects as of the date made or deemed made except as could not reasonably be expected to have a
Material Adverse Effect, and, to the best of the Borrower’s knowledge, the representations and
warranties made by the Transaction Parties (other than the Borrower, the Partners and the Sponsors)
in each such Transaction Document (other than the Additional Purchase and Sale Agreements) are true
and correct in all material respects as of the date made or deemed made except as could not
reasonably be expected to have a Material Adverse Effect. There is no fact known to the Borrower
that has not been disclosed in writing to the Lenders and the Administrative Agent that could
reasonably be expected to have a Material Adverse Effect.

          Section 4.14. Business of the Borrower.

          (a) The sole business of the Borrower is the ownership, development, construction,
financing and operation of the Cameron Highway System.

          (b) All insurance required by Section 5.5 is in full force and effect.

          (c) No event of force majeure under any Transaction Document has occurred and is
continuing that could reasonably be expected to result in the termination of any Transaction
Document or to have a Material Adverse Effect. Neither the business nor the property of the
Borrower has been affected in a manner that has had or could reasonably be expected to have a
Material Adverse Effect as a result of any Taking.

          (d) All easements, leaseholds, other property interests, all utility and other
services, means of transportation, facilities, other materials and other rights that are necessary
for the acquisition, development, construction, installation and operation of the Cameron Highway
System in accordance with all Governmental Requirements and the Transaction Documents (including,
without limitation, gas, electrical, water and sewage services and facilities) have been procured
pursuant to Transaction Documents or, to the best of the Borrower’s knowledge, are otherwise
commercially available to the Project and, to the extent appropriate, arrangements have been made
on commercially reasonable terms for such easements, interests, services, means of transportation,
facilities, materials and rights.

          (e) None of the proceeds from the Borrowings will be used, directly or indirectly,
for the purpose of buying or carrying any “margin stock” within the meaning of Regulation U or X or
any other regulation of the Board of Governors of the Federal Reserve System or to violate Section
7 of the Securities Exchange Act of 1934 or any rule or regulation thereunder, in each case as now
in effect or as the same may hereinafter be in effect.

          Section 4.15. Subsidiaries. The Borrower has no Subsidiaries.

          Section 4.16. OFAC. None of the Borrower, the Partners or the Sponsors (a)
is a person whose property or interest in property is blocked or subject to blocking pursuant to
Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)), (b) engages in any dealings or transactions prohibited by Section 2 of such

42

 

executive order, or is otherwise associated with any such person in any manner violative of
Section 2, or (c) is a person on the list of Specially Designated Nationals and Blocked Persons or
subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of
Foreign Assets Control regulation or executive order.

          Section 4.17. Patriot Act. Each of the Borrower, the Partners and the
Sponsors is in compliance, in all material respects, with (a) the Trading with the Enemy Act, as
amended, and each of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or
executive order relating thereto, and (b) the Uniting And Strengthening America By Providing
Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act of 2001). No part
of the proceeds of the Loans will be used, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended.

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 or under the other Loan Documents shall have been paid in
full, the Borrower covenants and agrees with the Lenders that:

          Section 5.1. Financial Statements and Other Information.

          (a) The Borrower will furnish to the Administrative Agent and each Lender:

     (i) as soon as available and in any event within 120 days after the end of
each Fiscal Year, an audited balance sheet of the Borrower as at the end of such year and
the related statements of operations, partners’ equity and cash flows of the Borrower for
such year, setting forth in each case in comparative form the figures for the previous
Fiscal Year, all in reasonable detail and accompanied by a report thereon of Deloitte or
other independent public accountants of recognized national standing (without a “going
concern” or like qualification or exception and without any qualification or exception as to
the scope of such audit) to the effect that such financial statements present fairly, in all
material respects, the financial condition of the Borrower as at the end of such Fiscal
Year, and the results of operations and cash flows for such Fiscal Year in accordance with
GAAP consistently applied;

     (ii) as soon as possible and in any event within 60 days after the end of
each of the first three Fiscal Quarters of each Fiscal Year, an unaudited balance sheet of
the Borrower as at the end of such quarter and the related statements of operations and
partners’ equity for such Fiscal Quarter and cash flows for the then elapsed portion of the
Fiscal Year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of the end of)

43

 

the previous Fiscal Year, all in reasonable detail and certified by a Financial Officer
of the Borrower that such financial statements fairly present, in all material respects the
financial condition of the Borrower as at the end of such Fiscal Quarter, and the results of
operations for such Fiscal Quarter and the then elapsed portion of the Fiscal Year, and cash
flows for such Fiscal Year-to-date, of the Borrower in accordance with GAAP consistently
applied, subject to normal, year-end audit adjustments and the absence of MD&A and
footnotes;

     (iii) concurrently with any delivery of financial statements under clause (i)
or (ii) above, a certificate of a Financial Officer of the Borrower (A) certifying as to
whether a Default has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto, and (B) stating
whether any change in GAAP or in the application thereof has occurred since the Effective
Date and, if any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;

     (iv) as soon as possible and in any event within five days after the
occurrence of any Default or Event of Default, a certificate of a Financial Officer of the
Borrower setting forth details of such Default or Event of Default and the action which the
Borrower proposes to take with respect thereto;

     (v) all material written communications given or received by the Borrower
relating to any claims or proceedings with respect to any Governmental Approval or amending,
modifying or affecting any Governmental Approval then required to be in effect;

     (vi) written notice of the occurrence of any event giving rise to a claim
under any insurance policy in an amount greater than $5,000,000 together with copies of any
document relating thereto, including copies of any such claim, in the possession or control
of the Borrower or any agent of the Borrower; and

     (vii) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the Borrower, or
compliance with the terms of this Agreement or any Loan Agreement, as the Administrative
Agent or any Lender may reasonably request.

The electronic posting of any financial statements, reports, notices or other items required to be
furnished pursuant to this Section 5.1 on a website established for Lender and
Administrative access shall constitute delivery for all purposes of this Section 5.1.

          Section 5.2. Notices of Material Events. The Borrower will furnish to each
Lender written notice of the following promptly after the Borrower becomes aware thereof:

          (a) the filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate thereof
that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;

44

 

          (b) written notice of the occurrence of the commencement of any proceeding before
any Governmental Authority seeking to subject the Cameron Highway System to the jurisdiction of any
Governmental Authority;

          (c) the occurrence of any ERISA Reportable Event that, alone or together with any
other ERISA Reportable Events that have occurred, could reasonably be expected to result in a
Material Adverse Effect;

          (d) any termination or event of default notice under any Transaction Document;

          (e) the Borrower obtaining actual knowledge that BP is engaged in ongoing, bona fide
negotiations relating to the transfer of, or is transferring or has transferred, its obligations
under the BP Purchase and Sale Agreement, in whole or in part; and

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

          Each notice delivered under this Section 5.2 shall be accompanied by a statement of a
Financial Officer of the Borrower setting forth the details of the event or development requiring
such notice and any action taken or proposed to be taken with respect thereto.

          Section 5.3. Existence; Conduct of Business. The Borrower will do or cause
to be done all things necessary and lawful in order 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 6.3.

          Section 5.4. Payment of Obligations. The Borrower will pay its obligations,
including (a) all material Tax liabilities imposed upon it or upon its property, and (b) all
material claims (including, but not limited to, claims for labor, materials, supplies or services)
which might, if not paid, become a Lien upon its property, unless, in each case, the validity or
amount thereof is being contested in good faith by appropriate proceedings and the Borrower has set
aside on its books adequate reserves with respect thereto in accordance with GAAP.

          Section 5.5. Maintenance of Properties; Insurance.

          (a) The Borrower will acquire, maintain and preserve, develop, operate and construct
in substantial conformity with all Transaction Documents, prudent engineering and operating
practices consistent with like facilities and in material conformity with all Governmental
Requirements, all elements of the Project which are used or necessary in the conduct of its
business in good working order and condition (including without limitation, inventories, spare
parts and system redundancies), ordinary wear and tear excepted.

          (b) The Borrower will maintain, or cause to be maintained, insurance covering it,
and its properties (including the Project) in effect at all times in such amounts and covering such
risks as is usually carried by companies engaged in similar business and owning similar properties
in the same general area in which the Borrower operates and as is reasonably

45

 

requested by the Collateral Agent, such insurance coverage to include limits and coverage
provisions sufficient to satisfy the requirements set forth in the Transaction Documents, but in no
event less than the limits and coverages described in Schedule 5.5(b) hereto. In
addition:

     (i) Each policy for liability insurance shall provide for all losses to be
paid directly to the Person who shall have incurred the damage or injury covered by such
policy. If any policy for liability insurance described in Schedule 5.5(b)
is permitted to be written on a “claims made” basis, such insurance policy shall have a
retroactive date (as such term is specified in such policy) no earlier than the Effective
Date. Each time any policy written on a “claims made” basis is not renewed or the
retroactive date of such policy is to be changed, the Borrower shall obtain, or cause to be
obtained, for each such policy or policies the broadest basic and supplemental extended
reporting period coverage, or “tail”, reasonably available in the commercial insurance
market for each such policy or policies, as determined in the sole reasonable judgment of
the Required Lenders, but in no event less than five years after the expiration of such
policy or policies.

     (ii) Each policy for property damage insurance shall provide for all amounts
payable by the insured and/or insurer with respect to any property damage (except for
property damage or losses of less than $5,000,000 per occurrence, so long as the Collateral
Agent has not notified the payor under any such insurance policy that a Default or an Event
of Default has occurred and is continuing) to be paid directly to the Collateral Agent on
behalf of the Lenders.

     (iii) Each such policy shall (except as specifically set forth below), in
addition, (A) subject to the last sentence of this clause (iii), be maintained with
financially sound and responsible insurance carriers either (x) rated A- X or better by A.M.
Best, (y) with an investment grade rating by S&P or a rating agency of recognized standing
acceptable to the Administrative Agent or (z) otherwise acceptable to the Administrative
Agent; (B) with respect to each policy for liability insurance only, name the Borrower as a
named insured and the Administrative Agent (in its capacity as Administrative Agent and on
behalf of Lenders) and Collateral Agent as an additional insured thereunder (without any
representation or warranty by or obligation upon the Collateral Agent, the Administrative
Agent or Lenders), (C) with respect to each policy for liability insurance only, contain a
severability of interests or cross liability clause, (D) provide that there shall be no
recourse against any Lender, the Administrative Agent or the Collateral Agent for payment of
premiums or other amounts with respect thereto, (E) provide that, as against the Borrower,
the Lenders, the Administrative Agent and the Collateral Agent, there shall be no rights of
subrogation, set-off, counterclaim or any other deduction, (F) with respect to each policy
for liability insurance only, provide that such insurance shall be primary, without right of
contribution from any other insurance which may be carried by the Collateral Agent, any
Lender or the Administrative Agent, (G) with respect to each policy for property insurance
only, provide that the Borrower shall in no event be deemed to be a co-insurer in respect of
any covered claim or loss thereunder, (H) provide that at least 30 days’ prior written
notice of reduction, cancellation or lapse and at least 10 days’ prior written notice of
non-payment of premium shall be given to the Collateral Agent by

46

 

the insurer and (I) provide that the Collateral Agent may (but shall not be obligated
to) cure any lapse or breach by the Borrower during such 30 day period (or 10 day period, in
the case of non-payment). Notwithstanding clause (A) above, the Borrower may utilize, or
cause to be utilized, an Affiliate’s captive insurance program (“Captive Insurance”) to
provide property insurance subject to such Affiliate maintaining an investment grade rating
with any two of S&P, Moody’s and Fitch, and if the Affiliate does not meet such ratings
criteria, then the Captive Insurance shall not be accepted and the property insurance shall
be required to be written directly with an insurance carrier or carriers that meet the
ratings requirements set forth in clause (A) above, unless otherwise approved by the
Administrative Agent in consultation with its insurance consultant.

     (iv) The Borrower shall deliver to the Collateral Agent cover notes,
certificates of insurance, or equivalent documentation satisfactory to the Collateral Agent
in sufficient copies for each Lender. In addition, if reasonably requested by the
Collateral Agent, the Borrower shall furnish the Collateral Agent with approved
certification of all required insurance. Such certification shall be executed by each
insurer or by an authorized representative of each insurer where it is not practical for
such insurer to execute the certificate itself. Such certification shall identify
underwriters, the type of insurance, the insurance limits and the policy term and shall
specifically list the special provisions enumerated for such insurance required by this
Section 5.5(b) and Schedule 5.5(b) hereto.

     (v) Concurrently with the furnishing of the certification referred to in
clause (iv) above and within 30 days following the renewal of any insurance policy, the
Borrower shall furnish to the Administrative Agent and the Collateral Agent a report of an
independent broker, signed by an officer of the broker, stating that all premiums then due
have been paid and that, in the opinion of such broker, the insurance then carried or to be
renewed is in accordance with the terms of this Section 5.5(b) and
Schedule 5.5(b) hereto.

     (vi) No provision of this Section 5.5(b) and Schedule
5.5(b) hereto or any provision of this Agreement or any Transaction Document
shall impose on any Lender, the Administrative Agent or the Collateral Agent any duty or
obligation to verify the existence or adequacy of the insurance coverage maintained by the
Borrower, nor shall any Lender, the Administrative Agent or the Collateral Agent be
responsible for any representations or warranties made by or on behalf of the Borrower to
any insurance company or underwriter.

     (vii) The Borrower upon the reasonable request of Administrative Agent or the
Collateral Agent will amend the amount and scope of coverage of any of the insurance
policies described in Schedule 5.5(b) hereto to cover such risks which, in the
reasonable judgment of the Administrative Agent or the Collateral Agent, would render such
coverage materially inadequate.

          Section 5.6. Books and Records; Inspection Rights.

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          (a) The Borrower will 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, revenues and assets, and all costs and expenses in connection with the Project, in
accordance with GAAP.

          (b) The Borrower will at any time and from time to time upon reasonable notice, but
subject nevertheless to the provisions of Section 10.11, permit the Lenders, the
Administrative Agent, the Collateral Agent and any of their respective agents and representatives
to examine and make copies of and abstracts from the records and books of account of, and the
properties of, the Borrower and to discuss the affairs, finances and accounts of the Borrower and
of the Project with the Borrower and its officers, accountants and engineers.

          Section 5.7. Compliance with Laws. The Borrower will (a) comply with all
laws, rules, regulations and orders of any Governmental Authority applicable to it or its property
or the development, construction, maintenance, ownership, operation or use of the Cameron Highway
System, and will cause all persons using or occupying the Cameron Highway System to so comply,
except where the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect and (b) obtain and maintain all Material Permits.
The Borrower will immediately pay or cause to be paid when due all costs and expenses incurred in
such compliance, except to the extent that such compliance is contested in good faith by the
Borrower under circumstances where none of the Collateral or the continued operation thereof, or
the Liens of the Collateral Agent thereon, will be endangered nor all or any portion of the Project
will be subject to loss or forfeiture.

          Section 5.8. Use of Proceeds. The proceeds of the Loans will be used only
(a) to refinance all Existing Debt (including any make-whole premiums, accrued interest and other
obligations in connection therewith) as and to the extent set forth in Section 10.15 and
(b) to finance the Partner Distribution. No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the Regulations of the
Board of Governors of the Federal Reserve System, including Regulations U and X.

          Section 5.9. Environmental Matters. The Borrower will establish and
implement such procedures as may be necessary to continuously determine and assure that any failure
of the following does not have a Material Adverse Effect: (a) all property of the Borrower,
including the Project, and the operations conducted thereon are in compliance with and do not
violate the requirements of any Environmental Laws, (b) no oil or solid wastes are disposed of or
otherwise released on or to any property owned by the Borrower except in compliance with
Environmental Laws, (c) no Hazardous Material will be released on or to any such property in a
quantity equal to or exceeding that quantity which requires reporting pursuant to Section 103 of
CERCLA, and (d) no Hazardous Material is released on or to any such property so as to pose an
imminent and substantial endangerment to public health or welfare or the environment.

          Section 5.10. Maintain Title to Collateral; Mortgages.

          (a) Subject to Section 6.3, the Borrower will maintain good and valid rights
and title to the Collateral purported to be covered by the Security Documents to which the Borrower
is a party.

48

 

          (b) The Borrower shall deliver Mortgages (or similar documents requested by the
Collateral Agent) to the Collateral Agent covering the Real Estate obtained by the Borrower or
Manta Ray after the Effective Date reasonably promptly after obtaining such Real Estate, such
Mortgages (or similar documents) to be duly completed and executed (as applicable) in sufficient
number of counterparts and in proper form for recording. If reasonably requested by the Collateral
Agent, the Borrower shall provide further supporting evidence of title, legal opinions or other
evidence that such Mortgages (or similar documents) will create a valid and enforceable first
priority Lien (except as permitted by Section 4.6(a)) on such Real Estate in favor
of the Collateral Agent for the benefit of the Lenders.

          Section 5.11. Further Assurance. The Borrower will (a) promptly execute and
deliver all further instruments and documents, and take all further action, that may be necessary
or that the Administrative Agent or the Collateral Agent may reasonably request in order to fully
give effect to the interests and properties purported to be covered by the Security Documents, (b)
promptly correct, or cause to be corrected, any defect or error that may be discovered in any Loan
Document or in the execution, acknowledgment or recordation thereof and execute, acknowledge and
deliver, and record and re-record, file and re-file and register and re-register, any and all such
further acts, deeds, conveyances, mortgages, deeds of trust, trust deeds, assignments, estoppel
certificates, financing statements and continuations thereof, notices of assignment, transfers,
certificates, assurances and other instruments as the Administrative Agent or the Collateral Agent
may reasonably require from time to time in order (i) to carry out more effectively the purposes of
this Agreement or any other Loan Document and (ii) to better assure, convey, grant, assign,
transfer, preserve, protect and confirm unto the Lenders, the Administrative Agent and the
Collateral Agent the rights granted or now or hereafter intended to be granted to the Lenders, the
Administrative Agent and the Collateral Agent under any Loan Document or under any other instrument
executed in connection with any Loan Document or that the Borrower may be or become bound to
convey, mortgage or assign to the Lenders, the Administrative Agent and the Collateral Agent in
order to carry out the intention or facilitate the performance of the provisions of any Loan
Document, and (c) take all other actions and make all other assurances required by the Security
Documents. The Borrower will furnish to the Collateral Agent evidence satisfactory to it of every
such recording, filing or registration.

          Section 5.12. Performance of Transaction Documents.

          (a) The Borrower shall perform and observe all terms and provisions of each Material
Document to which it is a party, maintain such Material Documents in full force and effect in
accordance with their terms (unless replaced in compliance with Section 7.1(t) for
the applicable types of Material Documents), and enforce such Material Documents in accordance with
their terms.

          (b) The Borrower shall perform and observe all terms and provisions of each
Transaction Document (other than the Material Documents, all of which are governed by Section
5.12(a)) to which it is a party, maintain such Transaction Documents in full force and
effect in accordance with their terms, and enforce such Transaction Documents in accordance with
their terms, except in each case as could not reasonably be expected to have a Material Adverse
Effect.

49

 

          (c) The Borrower shall take all such action concerning enforcement of any
Transaction Document as the Administrative Agent or the Collateral Agent may from time to time
reasonably request. If any Transaction Party (other than the Borrower, a Lender, the
Administrative Agent or the Collateral Agent) asserts in writing its belief that a Transaction
Document is not valid or binding upon such obligor, the Borrower shall allow the Administrative
Agent and the Collateral Agent the right to participate in any proceeding relating thereto.

          Section 5.13. Additional Purchase and Sale Agreements. If any Affiliate of
the Borrower enters into an Additional Purchase and Sale Agreement with respect to the Project, the
Borrower shall promptly have such document assigned to it (if the Borrower is not already a party
thereto).

          Section 5.14. [Reserved]

          Section 5.15. Financial Covenants. On the last day of each Fiscal Quarter
that is listed below for which financial statements have or are required to have been delivered
pursuant to Section 5.1, EBITDA shall equal or exceed the threshold set forth opposite such
Fiscal Quarter in the table below:

	 	 	 	 	 
	Fiscal Quarter Ending:	 	EBITDA	 
	December 31, 2005
	 	$	8,000,000	 
	 
	 	 	 	 
	March 31, 2006
	 	$	10,000,000	 

          Section 5.16. Valero/Valero LP Transaction. Notwithstanding any provision
in any Financing Document, the Partners and the Sponsors shall have the right to consummate the
transfer of partnership interests in the Borrower held by Valero CHOPS to Valero LP or a Subsidiary
of Valero LP as described in Section 3.4(a)(viii) of the Partnership
Agreement, as such Section is in effect on the Effective Date; provided that, for the
avoidance of doubt, subsequent thereto, the Collateral Agent shall continue to have a first
priority perfected Lien on 100% of the Capital Stock of the Borrower.

          Section 5.17. Accounts. With respect to each deposit account and securities
account of the Borrower that is opened after the Effective Date, the Borrower shall obtain duly
executed Control Account Agreements with each bank that maintains such deposit accounts, and each
securities intermediary that maintains such investment accounts, on behalf of the Borrower, as soon
as practicable (and in any event within ten (10) Business Days after the opening of such account,
which ten (10) Business Day period may be extended by the Administrative Agent in its sole
discretion).

          Section 5.18. Post-Closing Deliveries. The Borrower shall (a) deliver, or
cause to be delivered, to the Administrative Agent each item set forth in Schedule 5.18, in
form and substance satisfactory to the Administrative Agent and together with each certificate or
other

50

 

document ancillary thereto and reasonably requested by the Administrative Agent and (b)
perform, or cause to be performed, each action set forth in Schedule 5.18 together with
each ancillary action reasonably requested by the Administrative Agent to be performed by the
Borrower or any Affiliate thereof in connection therewith, in each case within the periods set
forth opposite each such item or action on such Schedule or such later period as may be agreed to
by the Administrative Agent in its sole discretion.

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 or under the other Loan Documents have been paid in full, the
Borrower covenants and agrees with the Lenders that:

          Section 6.1. Indebtedness. The Borrower will not create, incur, assume or
permit to exist any Indebtedness, except:

          (a) Indebtedness created under the Loan Documents;

          (b) Indebtedness existing in connection with Interest Rate Agreements, provided
that such Interest Rate Agreements are entered into by the Borrower in the ordinary course of
business and for the purpose of hedging against fluctuations in interest rates;

          (c) pledges or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security legislation, or to secure
the performance to tenders, statutory obligations, surety and appeal bonds, bids, leases,
construction, operating and maintenance agreements, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed money) and deposits
securing liability to insurance carriers under insurance or self-insurance arrangements; provided,
that the aggregate amount of Indebtedness described by this Section 6.1(c) shall
not exceed $25,000,000 at any time;

          (d) unsecured Indebtedness having an aggregate principal amount not exceeding
$25,000,000 at any one time outstanding; provided that for such Indebtedness to be permitted under
this clause (d), the weighted average life to maturity of such Indebtedness shall be required to be
greater than, and the final maturity date of such Indebtedness shall be required to be later than,
that of the Loans, and each of the other material terms (including financial covenants, negative
covenants and defaults) of such Indebtedness shall be no more restrictive to the Borrower than the
terms of this Agreement; and

          (e) other unsecured Indebtedness consented to by the Administrative Agent, such
consent not to be unreasonably withheld.

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          Section 6.2. Liens. The Borrower will not 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; and

          (b) Liens securing the Obligations.

          Section 6.3. Fundamental Changes.

          (a) The Borrower will not 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 any substantial part of its
assets (except as permitted by Section 6.3(c)) or liquidate or dissolve.

          (b) The Borrower will not engage in any business other than the development,
construction, financing and operation of the Cameron Highway System and businesses reasonably
related thereto.

          (c) The Borrower will not sell, lease, transfer or otherwise dispose of all or any
substantial part of its assets, including without limitation, any portion of the Project, except
(i) sales pursuant to Transaction Documents (other than Transactions Documents entered into for the
primary purpose of selling, leasing, transferring or disposing of assets), the net proceeds of
which shall not exceed $10,000,000 per calendar year, (ii) sales of inventory in the ordinary
course of business, (iii) sales of equipment if the same have been replaced to the extent necessary
for the continued operation of the Project, the net proceeds of which shall not exceed $12,000,000
per calendar year, (iv) sales of obsolete, worn out or surplus property in the ordinary course of
business, (v) sales of assets that will not have a material effect on the continued operation of
the Project, the net proceeds of which shall not exceed $15,000,000 per calendar year and (vi) the
granting of rights of way and easements necessary in connection with the operation of the Project.

          (d) The Borrower will not discount or sell (with or without recourse) any of its
notes receivable or accounts receivable.

          Section 6.4. Investments, Loans, Advances, Guarantees and Acquisitions. The
Borrower will not purchase, hold or acquire (including pursuant to any merger) any Capital Stock,
evidences of Indebtedness or other securities (including any option, warrant or other right to
acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest in, any other
Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any
assets of any other Person constituting a business unit, in each case except (a) Permitted
Investments and (b) pledges or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security legislation, or to secure
the
performance to tenders, statutory obligations, surety and appeal bonds, bids, leases,
construction, operating and maintenance agreements, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed money) and deposits

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securing liability to insurance carriers under insurance or self-insurance arrangements; provided,
that the aggregate amount of investments described by this Section 6.4(b) shall not
exceed $25,000,000 at any time.

          Section 6.5. Hedging Agreements. The Borrower will not enter into any
Hedging Agreement, other than Interest Rate Agreements permitted under Section
6.1(b).

          Section 6.6. Restricted Payments. The Borrower will not declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, except (a) the Partner
Distribution and (b) any other Restricted Payment made in cash for which all of the Distribution
Conditions have been satisfied both before and after giving effect to such Restricted Payment.

          Section 6.7. Transactions with Affiliates. The Borrower will not 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) for agreements existing on the Effective Date and described on Schedule
6.7(a), a copy of each such agreement having been delivered to the Administrative
Agent, or replacements thereof on substantially the same terms, (b) for agreements on terms no less
favorable to the Borrower than if the transaction had been negotiated in good faith on an arm’s
length basis with a non-Affiliate; provided that such agreements shall have been approved by the
Required Lenders (such consent not to be unreasonably withheld) to the extent that in the
aggregate, on an annual basis, such agreements exceed $10,000,000 in value (except to the extent
such agreements are purchase and sale agreements or otherwise relate to delivery transactions on
the Cameron Highway Oil Pipeline, in which case no such approval shall be required), and (c) any
Restricted Payment permitted by Section 6.6.

          Section 6.8. Restrictive Agreements. The Borrower will not 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 the Borrower to create, incur or permit to
exist any Lien upon any of its property or assets; provided that the foregoing shall not
apply to (i) restrictions and conditions imposed by law or by this Agreement, (ii) restrictions and
conditions existing on the Effective Date hereof identified on Schedule 6.8 (but shall
apply to any extension or renewal of, or any amendment or modification expanding the scope of, any
such restriction or condition), and (iii) customary provisions in leases restricting the assignment
thereof.

          Section 6.9. [Reserved.]

          Section 6.10. Management Fees. The Borrower will not pay any management fee
to any Person other than Manta Ray or any successor thereto under the terms of the Operation and
Management Agreement.

          Section 6.11. Subsidiaries. Notwithstanding anything to the contrary in any
Loan Document, the Borrower will not (a) form or own any Subsidiaries, (b) become a general or
limited partner in any partnership or a joint venturer in any joint venture, (c) acquire any
ownership or Capital Stock in or make any capital contribution to any Person, (d) enter into
any profit sharing or royalty agreement or other similar arrangement whereby the Borrower’s income
or profits are, or might be, shared with any other Person or (e) enter into any management

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contract
or similar arrangement whereby its business or operations are managed by any other Person other
than, in the case of clause (e), as expressly contemplated by the Loan Documents.

          Section 6.12. Project Changes. The Borrower will not make any material
changes to the operation of the Project without the prior written consent of the Administrative
Agent, unless such changes could not reasonably be expected to result in a Material Adverse Effect.

          Section 6.13. Compliance With ERISA. The Borrower will not establish or
permit to exist, or participate in, any Plan, any Multiemployer Plan or any Welfare Plan.

          Section 6.14. Amendments. The Borrower will not (a) cancel or terminate, or
consent to or otherwise permit the cancellation or termination of, any Material Project Document
(other than (i) termination in accordance with the terms thereof after full performance of the
obligations by each party thereto or (ii) if a replacement contract is entered into in compliance
with Section 7.1(t) (for the applicable types of Material Project Documents)), or
(b) amend or otherwise modify, or give any consent, waiver or approval to any variation of or
deviation from, the material terms of any Material Project Document, or (c) consent to or permit or
accept any prepayment of amounts to become due under or in connection with any Material Project
Document, or (d) sell, assign (other than pursuant to the Security Documents) or otherwise dispose
of (by operation of law or otherwise) any part of its interest in any Material Project Document, or
(e) waive, fail to enforce, forgive, compromise, settle, adjust or release any material right,
interest or entitlement, howsoever arising, under, or in respect of any Material Project Document,
or (f) consent to any assignment or transfer by any Material Producer party to any Effective Date
Purchase and Sale Agreement of such Effective Date Purchase and Sale Agreement, except, in the case
of each of (a) through (f), (X) if such action could reasonably be expected to result in a Material
Adverse Effect, with the consent of all Lenders and (Y) otherwise, with the consent of the Required
Lenders. The determination whether the action will require a vote under clause (X) or (Y) of this
Section 6.14 will be made by the Administrative Agent acting reasonably in accordance with
such provisions, after consultation with the Borrower.

          Section 6.15. Sale and Leasebacks. The Borrower will not enter into any
sale and leaseback transactions.

ARTICLE VII

EVENTS OF DEFAULT

          Section 7.1. Events of Default. If any of the following events (each an
“Event of Default”) shall occur:

          (a) the Borrower shall fail to pay any principal of any Loan 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;

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          (b) the Borrower shall fail to pay any interest on any Loan or any fee, or any other
amount (other than an amount referred to in clause (a) of this Section) payable under any Interest
Rate Agreement with a Lender or a Secured Affiliate, this Agreement or any other Loan Document,
when and as the same shall become due and payable, and such failure shall continue unremedied for a
period of five Business Days;

          (c) any representation or warranty made or deemed made by or on behalf of any
Partner or the Borrower in or in connection with the Loan Documents or any amendment or
modification thereof or waiver thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with the Loan Documents or any amendment or
modification thereof or waiver thereunder, shall prove to have been incorrect in any material
respect when made or deemed made;

          (d) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Sections 5.2, 5.3 (with respect to the Borrower’s
existence), 5.5, 5.8, 5.15, 5.16, 5.18 or in Article
VI;

          (e) Any Sponsor, Partner or the Borrower shall fail to observe or perform any
covenant, condition or agreement contained (i) in this Agreement (other than those specified in
clause (a), (b), or (d) of this Section), and such failure shall continue unremedied for a period
of 15 Business Days after written notice thereof from the Administrative Agent to the Borrower
(which notice shall be given at the request of any Lender), or (ii) in any other Loan Document and
such failure shall continue unremedied for a period of 15 Business Days after written notice
thereof from the Administrative Agent to the Borrower (which notice shall be given at the request
of any Lender);

          (f) the Borrower shall fail to make any payment (whether of principal or interest
and regardless of amount) in respect of any Material Indebtedness, when and as the same shall
become due and payable;

          (g) any event or condition occurs that results in any Material Indebtedness becoming
due prior to its scheduled maturity or that enables or permits (with or without the giving of
notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) 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;

          (h) an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any
Material Producer or its debts, or of a substantial part of its assets, under any federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for
the Borrower or any Material Producer 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; provided, however, that solely with
respect to the Material Producers, an Event of Default shall not exist under this clause (h) if the

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net economic value to the Borrower of the Transaction Document(s) to which such Material Producer
is a party is less than $10,000,000 per annum or such Transaction Document(s) is replaced by a
contract with or assigned to a third party satisfactory to the Required Lenders, with substantially
the same terms and conditions, within 30 days of the commencement of such involuntary proceeding or
such filing of an involuntary petition;

          (i) The Borrower or any Material Producer shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other relief under any
federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) of this Section, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower 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; provided, however, that solely with respect to the Material Producers, an Event of
Default shall not exist under this subsection (i) if the net economic value to the Borrower of the
Transaction Document(s) to which such Material Producer is a party is less than $10,000,000 per
annum or such Transaction Document(s) is replaced by a contract with or assigned to a third party
satisfactory to the Required Lenders, with substantially the same terms and conditions, within 30
days of the commencement of such voluntary proceeding or such filing of a voluntary petition;

          (j) the Borrower or any Material Producer shall become unable, admit in writing its
inability, or fail generally, to pay its debts as they become due;

          (k) one or more judgments that are not covered by insurance for the payment of money
in an aggregate amount in excess of $10,000,000 shall be rendered against the Borrower 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 Borrower to enforce any such judgment;

          (l) an ERISA Reportable Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Reportable Events that have occurred,
could reasonably be expected to result in a Material Adverse Effect;

          (m) a Change in Control shall occur;

          (n) a breach of representation or warranty having a Material Adverse Effect, or a
material default, under any Effective Date Purchase and Sale Agreement shall occur and shall
continue after the applicable grace period, if any, specified therein;

          (o) the Borrower shall at any time abandon the Project;

          (p) the termination of the Interconnect Agreement or any Effective Date Purchase and
Sale Agreement; provided, however that such termination shall not result in an Event of Default if
(i) approved in advance in accordance with Section 6.14, if applicable or (ii) such

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Effective Date Purchase and Sale Agreement or Interconnect Agreement is terminated in accordance
with its terms after full performance of the obligations by each party thereto;

          (q) the Borrower or the Project becomes subject to an Environmental Liability that
could reasonably be expected to result in a Material Adverse Effect;

          (r) the Security Documents, shall for any reason, except to the extent permitted by
the terms hereof or thereof, cease to create a valid and perfected first priority Lien, subject to
Permitted Encumbrances (to the extent purported to be granted by such documents), in any portion of
the Collateral;

          (s) there shall occur an actual or constructive total loss of the Project; or there
shall occur a Taking of all or substantially all of the Project; or

          (t) any material provision of any Material Project Document shall for any reason
other than the express terms thereof cease to be valid and binding on any party thereto or the
Borrower or any Transaction Party which is a party to such Material Project Document shall so
assert in writing, provided, however, that, except with respect to any Effective Date Purchase and
Sale Agreement and the Interconnect Agreement, such cessation or assertion shall not result in an
Event of Default if a replacement contract for such Material Project Document is entered into
within 30 days following such termination and such replacement contract has been approved
Administrative Agent;

then, and in every such event (other than an event with respect to the Borrower described in clause
(h) or (i) of this Section) and at any time thereafter during the continuance of such event, the
Administrative Agent or the Collateral Agent may, and upon the written request of the Required
Lenders shall, by notice to the Borrower, take any or all of the following actions, at the same or
different times: (i) terminate the Commitments, whereupon the Commitment of each Lender shall
terminate immediately; (ii) declare the principal of and any accrued interest on the Loans, and all
other Obligations owing hereunder, to be due and payable, whereupon the same shall become due and
payable immediately, without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; (iii) exercise all remedies contained in any other Loan
Document; and (iv) exercise any other remedies available at law or in equity; and that, if an Event
of Default specified in either clause (h) or (i) shall occur, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued interest thereon,
and all fees, and all other Obligations shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are hereby waived by the
Borrower.

          Section 7.2. Application of Proceeds from Collateral. All proceeds from
each sale of, or other realization upon, all or any part of the Collateral by the Administrative
Agent, the Collateral Agent or any of the Lenders after an Event of Default arises shall be applied
as follows:

          (a) first, to the reimbursable expenses of the Administrative Agent and the
Collateral Agent incurred in connection with such sale or other realization upon the Collateral,
until the same shall have been paid in full;

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          (b) second, to the fees and other reimbursable expenses of the
Administrative Agent and the Collateral Agent then due and payable pursuant to any of the Loan
Documents, until the same shall have been paid in full;

          (c) third, to all reimbursable expenses, if any, of the Lenders then due and
payable pursuant to any of the Loan Documents, until the same shall have been paid in full;

          (d) fourth, to interest then due and payable under the terms of this
Agreement, until the same shall have been paid in full;

          (e) fifth, to the aggregate outstanding principal amount of the Loans and
the Net Mark-to-Market Exposure of the Borrower, to the extent secured by Liens, until the same
shall have been paid in full, allocated pro rata among the Lenders and any Secured Affiliates that
hold Net Mark-to-Market Exposure based on their respective pro rata shares of the aggregate amount
of such Loans and Net Mark-to-Market Exposure; and

          (f) to the extent any proceeds remain, to the Borrower.

All amounts allocated pursuant to the foregoing clauses third through fifth to the
Lenders as a result of amounts owed to the Lenders under the Loan Documents shall be allocated
among, and distributed to, the Lenders pro rata based on their respective Pro Rata Shares.

          Section 7.3. Sponsor LOCs. . Without limiting any other remedies of the
Collateral Agent and the Administrative Agent set forth herein or in the other Loan Documents, upon
the occurrence and during the continuance of an Event of Default, or upon the occurrence of any
other conditions that permit drawing under and as set forth in the Sponsor LOCs (including any
exhibits, annexes, and schedules thereto), the Administrative Agent may, and upon the written
request of the Required Lenders shall, draw on the Sponsor LOCs, in whole or in part, in one draw
or a series of draws, and in each case pro rata between the two Sponsor LOCs, and shall apply the
proceeds thereof against the Obligations in the manner set forth in Section 7.2.

ARTICLE VIII

THE ADMINISTRATIVE AGENT 

          Section 8.1. Appointment of Administrative Agent. Each Lender irrevocably
appoints SunTrust Bank as the Administrative Agent and authorizes it to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent under this
Agreement and the other Loan Documents, together with all such actions and powers that are
reasonably incidental thereto. The Administrative Agent may perform any of its duties hereunder
or under the other Loan Documents by or through any one or more sub-agents or
attorneys-in-fact appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent or attorney-in-fact may perform any and all of its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory provisions set forth in this
Article shall

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apply to any such sub-agent or attorney-in-fact and the Related Parties of the
Administrative Agent, any such sub-agent and any such attorney-in-fact and shall apply to their
respective activities in connection with the syndication of the credit facilities provided for
herein as well as activities as Administrative Agent.

          Section 8.2. Nature of Duties of Administrative Agent. The Administrative
Agent shall not have any duties or obligations except those expressly set forth in this Agreement
and the other Loan Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default or an Event of Default has occurred and is continuing, (b) the Administrative
Agent shall not have any duty to take any discretionary action or exercise any discretionary
powers, except those discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the circumstances as provided
in Section 10.2), and (c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure
to disclose, any information relating to the Borrower that is communicated to or obtained by the
Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not
be liable for any action taken or not taken by it, its sub-agents or attorneys-in-fact with the
consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section 10.2) or in
the absence of its own gross negligence or willful misconduct. The Administrative Agent shall not
be responsible for the negligence or misconduct of any sub-agents or attorneys-in-fact selected by
it with reasonable care. The Administrative Agent shall not be deemed to have knowledge of any
Default or Event of Default unless and until written notice thereof (which notice shall include an
express reference to such event being a “Default” or “Event of Default” hereunder) is given to the
Administrative Agent by the Borrower or any Lender, and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in connection herewith
or therewith, (iii) the performance or observance of any of the covenants, agreements, or other
terms and conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article III or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be delivered to the
Administrative Agent. The Administrative Agent may consult with legal counsel (including counsel
for the Borrower) concerning all matters pertaining to such duties.

          Section 8.3. Lack of Reliance on the Administrative Agent. Each of the
Lenders acknowledges that it has, independently and without reliance upon the Administrative Agent
or any other Lender and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each of the Lenders also
acknowledges that it will, independently and without reliance upon the Administrative Agent or
any other Lender and based on such documents and information as it has deemed appropriate, continue
to make its own decisions in taking or not taking of any action under or based on this Agreement,
any related agreement or any document furnished hereunder or thereunder.

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          Section 8.4. Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Lenders with respect to any
action or actions (including the failure to act) in connection with the Loan Documents, the
Administrative Agent shall be entitled to refrain from such act or taking such act, unless and
until it shall have received instructions from such Lenders, and the Administrative Agent shall not
incur liability to any Person by reason of so refraining. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Administrative Agent as a result of
the Administrative Agent acting or refraining from acting hereunder in accordance with the
instructions of the Required Lenders where required by the terms of the Loan Documents.

          Section 8.5. Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing believed by it to
be genuine and to have been signed, sent or made by the proper Person. The Administrative Agent
may also rely upon any statement made to it orally or by telephone and believed by it to be made by
the proper Person and shall not incur any liability for relying thereon. The Administrative Agent
may consult with legal counsel (including counsel for the Borrower), independent public accountants
and other experts selected by it and shall not be liable for any action taken or not taken by it in
accordance with the advice of such counsel, accountants or experts.

          Section 8.6. The Administrative Agent in its Individual Capacity. The bank
serving as the Administrative Agent shall have the same rights and powers under this Agreement and
any other Loan Document in its capacity as a Lender as any other Lender and may exercise or refrain
from exercising the same as though it were not the Administrative Agent; and the terms “Lenders”,
“Required Lenders”, “holders of Notes”, or any similar terms shall, unless the context clearly
otherwise indicates, include the Administrative Agent in its individual capacity. The bank acting
as the Administrative Agent and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower or any Affiliate of the Borrower as if
it were not the Administrative Agent hereunder.

          Section 8.7. Successor Administrative Agent.

          (a) The Administrative Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Administrative Agent, subject to the approval by the Borrower provided that no
Default or Event of Default shall exist at such time. If no successor Administrative Agent shall
have been so appointed, and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which shall be a commercial bank
organized under the laws of the United States of
America or any state thereof or a bank which maintains an office in the United States, having
a combined capital and surplus of at least $500,000,000.

          (b) Upon the acceptance of its appointment as the Administrative Agent hereunder by
a successor, such successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative

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Agent, and the
retiring Administrative Agent shall be discharged from its duties and obligations under this
Agreement and the other Loan Documents. If within 45 days after written notice is given of the
retiring Administrative Agent’s resignation under this Section 8.7 no successor
Administrative Agent shall have been appointed and shall have accepted such appointment, then on
such 45th day (i) the retiring Administrative Agent’s resignation shall become
effective, (ii) the retiring Administrative Agent shall thereupon be discharged from its duties and
obligations under the Loan Documents and (iii) the Required Lenders shall thereafter perform all
duties of the retiring Administrative Agent under the Loan Documents until such time as the
Required Lenders appoint a successor Administrative Agent as provided above. After any retiring
Administrative Agent’s resignation hereunder, the provisions of this Article VIII shall
continue in effect for the benefit of such retiring Administrative Agent and its representatives
and agents in respect of any actions taken or not taken by any of them while it was serving as the
Administrative Agent.

          Section 8.8. Authorization to Execute other Loan Documents. Each Lender
hereby authorizes the Administrative Agent to execute on behalf of all Lenders all Loan Documents
other than this Agreement.

ARTICLE IX

THE COLLATERAL AGENT 

          Section 9.1. Appointment of Collateral Agent. Each Lender irrevocably
appoints SunTrust Bank as the Collateral Agent and authorizes it to take such actions on its behalf
and to exercise such powers as are delegated to the Collateral Agent under this Agreement and the
other Loan Documents, together with all such actions and powers that are reasonably incidental
thereto. The Collateral Agent may perform any of its duties hereunder or under the other Loan
Documents by or through any one or more sub-agents or attorneys-in-fact appointed by the Collateral
Agent. The Collateral Agent and any such sub-agent or attorney-in-fact may perform any and all of
its duties and exercise its rights and powers through their respective Related Parties. The
exculpatory provisions set forth in this Article shall apply to any such sub-agent or
attorney-in-fact and the Related Parties of the Collateral Agent, any such sub-agent and any such
attorney-in-fact and shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as Collateral Agent.

          Section 9.2. Nature of Duties of Collateral Agent. The Collateral Agent
shall not have any duties or obligations except those expressly set forth in this Agreement and the
other Loan Documents. Without limiting the generality of the foregoing, (a) the Collateral Agent
shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or
an Event of Default has occurred and is continuing, (b) the Collateral Agent shall not have any
duty to take any discretionary action or exercise any discretionary powers, except those
discretionary rights and powers expressly contemplated by the Loan Documents that the Collateral
Agent is required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as provided in Section
10.2), and (c) except as expressly set forth in the Loan Documents, the Collateral Agent shall
not have any duty to disclose, and shall not be liable for the failure to disclose, any information
relating to the

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Borrower that is communicated to or obtained by the Collateral Agent or any of its
Affiliates in any capacity. The Collateral Agent shall not be liable for any action taken or not
taken by it, its sub-agents or attorneys-in-fact with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 10.2) or in the absence of its own gross negligence or
willful misconduct. The Collateral Agent shall not be responsible for the negligence or misconduct
of any sub-agents or attorneys-in-fact selected by it with reasonable care. The Collateral Agent
shall not be deemed to have knowledge of any Default or Event of Default unless and until written
notice thereof (which notice shall include an express reference to such event being a “Default” or
“Event of Default” hereunder) is given to the Collateral Agent by the Borrower, any Lender, or the
Administrative Agent, and the Collateral Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in or in connection
with any Loan Document, (ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance
of any of the covenants, agreements, or other terms and conditions set forth in any Loan Document,
(iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any condition set forth in
Article III or elsewhere in any Loan Document, other than to confirm receipt of items
expressly required to be delivered to the Collateral Agent. The Collateral Agent may consult with
legal counsel (including counsel for the Borrower) concerning all matters pertaining to such
duties.

          Section 9.3. Certain Rights of the Collateral Agent. If the Collateral
Agent shall request instructions from the Required Lenders with respect to any action or actions
(including the failure to act) in connection with the Loan Documents, the Collateral Agent shall be
entitled to refrain from such act or taking such act, unless and until it shall have received
instructions from such Lenders, and the Collateral Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Collateral Agent as a result of the Collateral Agent acting or refraining
from acting hereunder in accordance with the instructions of the Required Lenders where required by
the terms of the Loan Documents.

          Section 9.4. Reliance by Collateral Agent. The Collateral Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed by it to be genuine
and to have been signed, sent or made by the proper Person. The Collateral Agent may also rely
upon any statement made to it orally or by telephone and believed by it to be made by the proper
Person and shall not incur any liability for relying thereon. The Collateral Agent may consult with
legal counsel (including counsel for the Borrower), independent public accountants and
other experts selected by it and shall not be liable for any action taken or not taken by it
in accordance with the advice of such counsel, accountants or experts.

          Section 9.5. The Collateral Agent in its Individual Capacity. The bank
serving as the Collateral Agent shall have the same rights and powers under this Agreement and any
other Loan Document in its capacity as a Lender as any other Lender and may exercise or refrain
from exercising the same as though it were not the Collateral Agent; and the terms “Lenders”,

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“Required Lenders”, “holders of Notes”, or any similar terms shall, unless the context clearly
otherwise indicates, include the Collateral Agent in its individual capacity. The bank acting as
the Collateral Agent and its Affiliates may accept deposits from, lend money to, and generally
engage in any kind of business with the Borrower or any Affiliate of the Borrower as if it were not
the Collateral Agent hereunder.

          Section 9.6. Successor Collateral Agent.

          (a) The Collateral Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Collateral Agent, subject to the approval by the Borrower provided that no
Default or Event of Default shall exist at such time. If no successor Collateral Agent shall have
been so appointed, and shall have accepted such appointment within 30 days after the retiring
Collateral Agent gives notice of resignation, then the retiring Collateral Agent may, on behalf of
the Lenders, appoint a successor Collateral Agent, which shall be a commercial bank organized under
the laws of the United States of America or any state thereof or a bank which maintains an office
in the United States, having a combined capital and surplus of at least $500,000,000.

          (b) Upon the acceptance of its appointment as the Collateral Agent hereunder by a
successor, such successor Collateral Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Collateral Agent, and the retiring
Collateral Agent shall be discharged from its duties and obligations under this Agreement and the
other Loan Documents. If within 45 days after written notice is given of the retiring Collateral
Agent’s resignation under this Section 9.6(b) no successor Collateral Agent shall
have been appointed and shall have accepted such appointment, then on such 45th day (i)
the retiring Collateral Agent’s resignation shall become effective, (ii) the retiring Collateral
Agent shall thereupon be discharged from its duties and obligations under the Loan Documents
(except that in the case of any Collateral held by the Collateral Agent on behalf of the Lenders
under any of the Loan Documents, the retiring Collateral Agent shall continue to hold such
Collateral until such time as the successor Collateral Agent shall have been appointed) and (iii)
the Required Lenders shall thereafter perform all duties of the retiring Collateral Agent under the
Loan Documents until such time as the Required Lenders appoint a successor Collateral Agent as
provided above. After any retiring Collateral Agent’s resignation hereunder, the provisions of this
Article IX shall continue in effect for the benefit of such retiring Collateral Agent and
its representatives and agents in respect of any actions taken or not taken by any of them while it
was serving as the Collateral Agent.

          Section 9.7. Amendment. None of the terms or provisions of this Article
IX may be amended, modified or waived without the written consent of the then Collateral Agent.

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ARTICLE X

MISCELLANEOUS

          Section 10.1. Notices.

          (a) Except in the case of notices and other communications expressly permitted to be
given by telephone, all notices and other communications to any party herein to be effective shall
be in writing and shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

	 	 	 	 	 
	 

	 	To the Borrower:
	 	Cameron Highway Oil Pipeline
	 

	 	 	 	2727 North Loop West, Suite 700
	 

	 	 	 	Houston, TX 77008
	 

	 	 	 	Attention: Mr. Randy Fowler
	 

	 	 	 	Telecopy Number: 713-880-8200
	 
	 	 	 	 
	 

	 	To the Administrative Agent

	 	SunTrust Bank
	 

	 	or the Collateral Agent:	 	303 Peachtree Street, N. E.
	 

	 	 	 	Atlanta, Georgia 30308
	 

	 	 	 	Attention: Mr. Steve Newby
	 

	 	 	 	Telecopy Number: 404-827-6514
	 
	 	 	 	 
	 

	 	With a copy to:
	 	SunTrust Bank
	 

	 	 	 	Agency Services
	 

	 	 	 	303 Peachtree Street, N. E./ 25th Floor
	 

	 	 	 	Atlanta, Georgia 30308
	 

	 	 	 	Attention: Ms. Doris Folsum
	 

	 	 	 	Telecopy Number: (404) 658-4906
	 
	 	 	 	 
	 

	 	To any other Lender:
	 	the address set forth in the Administrative Questionnaire or the

Assignment and Acceptance
Agreement executed by such Lender

Any party hereto may change its address or telecopy number for notices and other communications
hereunder by notice to the other parties hereto. All such notices and other communications shall,
when transmitted by overnight delivery, or faxed, be effective when delivered for overnight
(next-day) delivery, or transmitted in legible form by facsimile machine, respectively, or if
mailed, upon the third Business Day after the date deposited into the mail or if delivered, upon
delivery; provided, that notices delivered to the Administrative Agent or the Collateral Agent
shall not be effective until actually received by such Person at its address specified in this
Section 10.1.

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          (b) Any agreement of the Administrative Agent, the Collateral Agent and the Lenders
herein to receive certain notices by telephone or facsimile is solely for the convenience and at
the request of the Borrower. The Administrative Agent, the Collateral Agent and the Lenders shall
be entitled to rely on the authority of any Person purporting to be a Person authorized by the
Borrower to give such notice and the Administrative Agent, the Collateral Agent and the Lenders
shall not have any liability to the Borrower or other Person on account of any action taken or not
taken by the Administrative Agent, the Collateral Agent or the Lenders in reliance upon such
telephonic or facsimile notice. The obligation of the Borrower to repay the Loans and all other
Obligations hereunder shall not be affected in any way or to any extent by any failure of the
Administrative Agent, the Collateral Agent and the Lenders to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Administrative Agent, the Collateral Agent and
the Lenders of a confirmation which is at variance with the terms understood by the Administrative
Agent, the Collateral Agent and the Lenders to be contained in any such telephonic or facsimile
notice.

Section 10.2. Waiver; Amendments.

          (a) No failure or delay by the Administrative Agent, the Collateral Agent or any
Lender in exercising any right or power hereunder or any other Loan Document, and no course of
dealing between the Borrower and the Administrative Agent, the Collateral Agent or any Lender,
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 right or power, preclude any
other or further exercise thereof or the exercise of any other right or power hereunder or
thereunder. The rights and remedies of the Administrative Agent, the Collateral Agent and the
Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies provided by law. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrower therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section, 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, the
Collateral Agent or any Lender may have had notice or knowledge of such Default or Event of Default
at the time.

          (b) No amendment or waiver of any provision of this Agreement or the other Loan
Documents, nor consent to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Borrower and the Required Lenders or the
Borrower and the Administrative Agent with the consent of the Required Lenders and then such waiver
or consent shall be effective only in the specific instance and for the specific purpose for which
given; provided, that no amendment or waiver 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 date fixed for any payment of any
principal of, or interest on, any Loan or interest thereon or any fees hereunder or reduce the
amount of, waive or excuse any such payment (excluding any mandatory prepayments required under
Section 2.12(b) or (c)), or postpone the scheduled date for the termination or

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reduction of any Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.18(b) in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender, (v) change any of the
provisions of this Section or the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders which are required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder, without the consent of
each Lender; (vi) release any guarantor or limit the liability of any such guarantor under any
guaranty agreement, without the written consent of each Lender; or (vii) release all or
substantially all collateral (if any) securing any of the Obligations or agree to subordinate any
Lien in such collateral to any other creditor of the Borrower, without the written consent of each
Lender; provided further, that no such agreement shall amend, modify or otherwise affect
the rights, duties or obligations of the Administrative Agent or the Collateral Agent, without the
prior written consent of such Person.

          Section 10.3. Expenses; Indemnification.

          (a) The Borrower shall pay (i) all reasonable, out-of-pocket costs and expenses of
the Administrative Agent, the Collateral Agent and their respective Affiliates, including the
reasonable fees, charges and disbursements of one law firm and one additional Louisiana local
counsel, for the Administrative Agent, the Collateral Agent and their respective Affiliates (and,
if retention is deemed appropriate by the Administrative Agent and consented to by the Borrower
(such consent not to be unreasonably withheld or delayed), additional local counsel to the
Administrative Agent, the Collateral Agent and their respective Affiliates), in connection with the
syndication of the credit facilities provided for herein, the preparation and administration of the
Loan Documents and any amendments, modifications or waivers thereof (whether or not the
transactions contemplated in this Agreement or any other Loan Document shall be consummated) and
(ii) all out-of-pocket costs and expenses (including, without limitation, the reasonable fees,
charges and disbursements of outside counsel and the allocated cost of inside counsel) reasonably
incurred by the Administrative Agent, the Collateral Agent or any Lender in connection with the
enforcement or protection of its rights in connection with this Agreement, including its rights
under this Section, or in connection with the Loans made hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of
such Loans.

          (b) The Borrower shall indemnify the Administrative Agent (and any sub-agent
thereof), the Collateral Agent (and any sub-agent thereof) and each Lender, and each Related Party
of any of the foregoing Persons (each such Person being called, an “Indemnitee”) against, and hold
each Indemnitee harmless from, any and all costs, losses, liabilities, claims, damages and related
expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, and
shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements
for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by the Borrower, the Partners or the Sponsors arising
out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any
other Transaction Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated

66

 

hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii)
any actual or alleged presence or Release of Hazardous Materials on or from any property owned or
operated by the Borrower, or any Environmental Liability related in any way to the Borrower, or
(iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower, the Partners or the Sponsors, and regardless of whether any Indemnitee is
a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available
to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined
by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the
Borrower, the Partners or the Sponsors against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Transaction Document, if the Borrower, the
Partners or the Sponsors has obtained a final and nonappealable judgment in its favor on such claim
as determined by a court of competent jurisdiction.

          (c) The Borrower shall pay, and hold the Administrative Agent, the Collateral Agent
and each of the Lenders harmless from and against, any and all present and future stamp,
documentary, and other similar taxes with respect to this Agreement and any other Loan Documents,
any collateral described therein, or any payments due thereunder, and save the Administrative
Agent, the Collateral Agent and each Lender harmless from and against any and all liabilities with
respect to or resulting from any delay or omission to pay such taxes.

          (d) To the extent that the Borrower fails to pay any amount required to be paid to
the Administrative Agent or the Collateral Agent under clauses (a), (b) or (c) hereof, each Lender
severally agrees to pay to the Administrative Agent such Lender’s Pro Rata Share (determined as of
the time that the unreimbursed expense or indemnity payment is sought) of such unpaid amount (which
the Administrative Agent shall distribute to the Collateral Agent, as applicable);
provided, that the unreimbursed expense or indemnified payment, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the Administrative Agent
or the Collateral Agent in their respective capacities as such.

          (e) To the extent permitted by applicable law, the Borrower shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to actual or direct damages) arising out of, in
connection with or as a result of, this Agreement or any agreement or instrument contemplated
hereby, the transactions contemplated therein, any Loan or the use of proceeds thereof.

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

          Section 10.4. Successors and Assigns.

          (a) The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns permitted hereby, except that the
Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void). Nothing in this Agreement,

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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, the Collateral Agent
and the Lenders) any legal or equitable right, remedy or claim under or by reason of this
Agreement.

          (b) Any Lender may assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of the Loans at the time
owing to it); provided that (i) except in the case of an assignment of the entire remaining
amount of the assigning Lender’s Loans at the time owing to it or in the case of an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount
of the Loans of the assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent)
shall not be less than $5,000,000 and shall result in the assigning Lender either (x) continuing to
have Loans outstanding equal to or in excess of $10,000,000 or (y) having no Loans outstanding,
unless each of the Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or
delayed), (ii) each partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan
assigned and (iii) 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 $1,000, and
the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire. Upon (i) the execution and delivery of the Assignment and Acceptance
by the assigning Lender and assignee Lender, (ii) acceptance and recording thereof by the
Administrative Agent pursuant to paragraph (c) of this Section, (iii) consent thereof from the
Borrower to the extent required pursuant to this clause (b) and (iv) if such assignee Lender is a
Foreign Lender, compliance by such Person with Section 2.17(e), from and after the
effective date specified in each Assignment and Acceptance, the Eligible 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 2.15, 2.16, 2.17 and 10.3). 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 paragraph (d) of this Section.

          (c) The Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at one of its offices in Atlanta, Georgia 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 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 Borrower, the Administrative Agent and the Lenders may treat each Person whose name is

68

 

recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary.

          (d) Any Lender may, without the consent of, or notice to, the Borrower 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/or obligations under this
Agreement (including all or a portion of 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 Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver with respect to the following to the
extent affecting such Participant: (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 date fixed for any payment of any principal of, or interest on, any
Loan or interest thereon or any fees hereunder or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date for the termination or reduction of any Commitment, without
the written consent of each Lender affected thereby, (iv) change Section 2.18(b) in
a manner that would alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) change any of the provisions of this Section or the definition of
“Required Lenders” or any other provision hereof specifying the number or percentage of Lenders
which are required to waive, amend or modify any rights hereunder or make any determination or
grant any consent hereunder, without the consent of each Lender; or (vi) release all or
substantially all collateral (if any) securing any of the Obligations. Subject to paragraph (e) of
this Section, the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16, and 2.17 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of Section 10.7
as though it were a Lender, provided such Participant agrees to be subject to Section 10.7
as though it were a Lender.

          (e) A Participant shall not be entitled to receive any greater payment under
Section 2.15 and Section 2.17 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.17 unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with Section
2.17(e) as though it were a Lender.

          (f) Any Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender, including without
limitation any pledge or assignment to secure obligations to a Federal Reserve Bank;
provided

69

 

that no such pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

          Section 10.5. Governing Law; Jurisdiction; Consent to Service of Process.

          (a) This Agreement and the other Loan Documents shall be construed in accordance
with and be governed by the law (without giving effect to the conflict of law principles thereof)
of the State of New York.

          (b) The Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the non-exclusive jurisdiction of the United States District Court of the Southern
District of New York, and of any state court of the Supreme Court of the State of New York sitting
in New York county and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or any other Loan Document or the transactions contemplated
hereby or thereby, or for recognition or enforcement of any judgment, and each of the parties
hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action
or proceeding may be heard and determined in such New York state court or, to the extent permitted
by applicable law, such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other
Loan Document shall affect any right that the Administrative Agent, the Collateral Agent or any
Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other
Loan Document against the Borrower or its properties in the courts of any jurisdiction.

          (c) The Borrower irrevocably and unconditionally waives any objection which it may
now or hereafter have to the laying of venue of any such suit, action or proceeding described in
paragraph (b) of this Section and brought in any court referred to in paragraph (b) of this
Section. Each of the parties hereto irrevocably waives, to the fullest extent permitted by
applicable law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

          (d) Each party to this Agreement irrevocably consents to the service of process in
the manner provided for notices in Section 10.1. Nothing in this Agreement or in any other
Loan Document will affect the right of any party hereto to serve process in any other manner
permitted by law.

          Section 10.6. WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY 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 THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (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

70

 

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 AND THE OTHER LOAN DOCUMENTS BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

          Section 10.7. Right of Setoff. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights, each Lender shall
have the right, at any time or from time to time upon the occurrence and during the continuance of
an Event of Default, without prior notice to the Borrower, any such notice being expressly waived
by the Borrower to the extent permitted by applicable law, to set off and apply against all
deposits (general or special, time or demand, provisional or final) of the Borrower at any time
held or other obligations at any time owing by such Lender to or for the credit or the account of
the Borrower against any and all Obligations held by such Lender, as the case may be, irrespective
of whether such Lender shall have made demand hereunder and although such Obligations may be
unmatured. Each Lender agrees promptly to notify the Administrative Agent and the Borrower after
any such set-off and any application made by such Lender, as the case may be; provided,
that the failure to give such notice shall not affect the validity of such set-off and application.

          Section 10.8. Counterparts; Integration. This Agreement may be executed by
one or more of the parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to constitute one and the
same instrument. This Agreement, the Fee Letter and the other Loan Documents constitute the entire
agreement among the parties hereto and thereto regarding the subject matters hereof and thereof and
supersede all prior agreements and understandings, oral or written, regarding such subject matters.

          Section 10.9. Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of this Agreement and the making
of any Loans regardless of any investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent, the Collateral Agent or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at the time any credit
is extended hereunder, and shall continue in full force and effect as long as the principal of or
any accrued interest on any Loan or any fee or any other amount payable under this Agreement is
outstanding and unpaid. The provisions of Sections 2.15, 2.16, 2.17, and
10.3 and Articles VIII and IX 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. All representations and warranties made herein, in the certificates, reports,
notices, and other documents delivered pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the other Loan Documents and the making of the Loans.

71

 

          Section 10.10. Severability. Any provision of this Agreement or any other
Loan Document held to be illegal, invalid or unenforceable in any jurisdiction, shall, as to such
jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability
without affecting the legality, validity or enforceability of the remaining provisions hereof or
thereof; and the illegality, invalidity or unenforceability of a particular provision in a
particular jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction.

          Section 10.11. Confidentiality. Each of the Administrative Agent, the
Collateral Agent and each Lender agrees to take normal and reasonable precautions to maintain the
confidentiality of any information received from the Borrower or its Affiliates relating to the
Sponsors, the Pledgors, the Borrower or Manta Ray or their respective businesses, other than any
such information that is available to the Administrative Agent, the Collateral Agent or any Lender
on a nonconfidential basis prior to such disclosure by the Borrower or its Affiliates
(collectively, the “Information”), except that such Information may be disclosed (i) to any Related
Party of the Administrative Agent, the Collateral Agent or any such Lender, including without
limitation accountants, legal counsel and other advisors, (ii) to the extent required by applicable
laws or regulations or by any subpoena or similar legal process, (iii) to the extent requested by
any regulatory agency or authority, (iv) to the extent that such Information becomes publicly
available other than as a result of a breach of this Section, or which becomes available to the
Administrative Agent, the Collateral Agent, any Lender or any Related Party of any of the foregoing
on a nonconfidential basis from a source other than the Borrower, (v) in connection with the
exercise of any remedy hereunder or any suit, action or proceeding relating to this Agreement or
the enforcement of rights hereunder, and (ix) subject to provisions substantially similar to this
Section 10.11, to any actual or prospective assignee or Participant, or (vi) with the
consent of the Borrower. Any Person required to maintain the confidentiality of any Information as
provided for in this Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord its own confidential information.

          Section 10.12. 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 may be treated as interest on such Loan under applicable law
(collectively, the “Charges”), shall exceed the maximum lawful rate of interest (the “Maximum
Rate”) which may be contracted for, charged, taken, received or reserved by a 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 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 Rate to the date of repayment, shall have been received by
such Lender.

          Section 10.13. Waiver of Effect of Corporate Seal. The Borrower represents
and warrants that neither it nor the Partners or the Sponsors is required to affix its corporate
seal to this Agreement or any other Loan Document pursuant to any requirement of law or regulation

72

 

and waives any shortening of the statute of limitations that may result from not affixing the
corporate seal to this Agreement or such other Loan Documents.

          Section 10.14. Limitation on Recourse. Except as and to the extent
otherwise expressly provided in respect of the Pledge Agreements, the Mortgages and the Sponsor
LOCs:

     (a) payment or performance of any of the obligations of the Borrower, any Partner and Manta
Ray under any of the Loan Documents will be obligations of the Borrower, such Partner and Manta Ray
only, as applicable, and the Administrative Agent, the Collateral Agent and the Lenders will have
recourse solely to (i) the assets and cash flow of the Partners (as expressly provided in the
Pledge Agreements), (ii) Manta Ray (as expressly provided in the Mortgages) and (iii) the Borrower;
and

     (b) the Administrative Agent, the Collateral Agent and the Lenders will not have recourse to,
or claims upon, the assets of the Sponsors, the Partners or Manta Ray or to the shareholders,
officers, directors or employees of the Borrower, the Sponsors, the Partners or Manta Ray, for the
payment or performance of any of the obligations of the Borrower, any Partner or Manta Ray under
any of the Loan Documents.

Notwithstanding the foregoing, the limitations on recourse provided in this Section 10.14
shall not apply with respect to any claim based on fraud or bad faith.

          Section 10.15. Amendment and Restatement.

          (a) On the Effective Date: (w) JPMorgan Chase Bank shall resign as Administrative
Agent, Depository Bank, Collateral Agent, Intercreditor Agent and Initial Noteholder Agent (all as
defined in the Existing Debt Documents), (x) the Construction Loan Commitment and the Senior Note
Commitment (as defined in the Existing Debt Documents) of any Existing Lender shall be restructured
and rearranged as Commitments of the Lenders hereunder, (y) the outstanding Construction Loans and
Institutional A Loans under and as defined in the Existing Debt Documents shall continue and be
restructured, renewed and rearranged as Loans and (z) the Lenders shall hereby appoint SunTrust
Bank as Administrative Agent and Collateral Agent as provided in Article VIII and
Article IX.

          (b) On the Effective Date, the Existing Debt Documents shall be amended and restated
in their entirety by this Agreement, and the Existing Debt Documents shall thereafter be of no
further force and effect, except to the extent amended and restated hereby. This Agreement is not
in any way intended to constitute a novation of the obligations and liabilities existing under the
Existing Debt Documents or evidence payment of all or any portion of such obligations and
liabilities, and it is the intention of the Borrower, the Administrative Agent, the Collateral
Agent and the Lenders that the Liens securing the Secured Obligations (as defined in the Existing
Debt Documents) will continue and be assigned to the Collateral Agent for the benefit of the
Lenders.

          (c) On and after the Effective Date, (i) all references to the Existing Debt
Documents (or to any amendment or any amendment and restatement thereof) in the Loan Documents
(other than this Agreement) shall be deemed to refer to the Existing Debt

73

 

Documents, as amended and restated hereby, (ii) all references to any section (or subsection)
of the Existing Debt Documents or in any Loan Document (but not herein) shall be amended to become,
mutatis mutandis, references to the corresponding provisions of this Agreement and (iii) except as
the context otherwise provides, on or after the Effective Date, all references to this Agreement
herein (including for purposes of indemnification and reimbursement of fees) shall be deemed to be
references to the Existing Debt Documents, as amended and restated hereby.

          (d) Each of the Administrative Agent, the Collateral Agent, the Lenders and the
Borrower acknowledges that SunTrust Bank has succeeded JPMorgan Chase Bank as Administrative Agent
and Collateral Agent under the Existing Debt Documents, as amended and restated hereby.

(remainder of page left intentionally blank)

74

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	 	CAMERON HIGHWAY OIL PIPELINE COMPANY
	 
	 	 	 	 
	 

	 	By
	 	/S/ Randy Fowler
	 

	 	 	 	 
	 	 	 Name: Randy Fowler
	 	 	 Title: Vice President and Treasurer
	 
	 	 	 	 
	 	 	SUNTRUST BANK, as Administrative Agent, as Collateral
Agent and as a Lender
	 
	 	 	 	 
	 

	 	By
	 	/S/ Peter C. Vaky
	 

	 	 	 	 
	 	 	 Name: Peter C. Vaky
	 	 	 Title: Managing Director

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT — 1]

 

 

Schedule I

Commitments

	 	 	 	 	 
	Lender	 	Commitment Amount	 
	SunTrust Bank
	 	$	415,000,000.00	 

SCHEDULE I

 

 

Annex I

Pricing Grid

	 	 	 	 	 	 	 	 	 
	New Rating*	 	LIBOR Spread	 	 	Base Rate Spread	 
	Greater than or equal to BBB- (Tier 1)
	 	 	1.25	%	 	 	0.25	%
	 
	 	 	 	 	 	 	 	 
	BB+ (Tier 2)
	 	 	1.50	%	 	 	0.50	%
	 
	 	 	 	 	 	 	 	 
	BB (Tier 3)
	 	 	1.75	%	 	 	0.75	%
	 
	 	 	 	 	 	 	 	 
	Less than BB (Tier 4)
	 	 	2.00	%	 	 	1.00	%

 

*  New Rating to be based on S&P, Moody’s and/or Fitch ratings. In the case of Moody’s and Fitch
ratings, the Tiers in the Pricing Grid above shall be determined by reference to the equivalent of
the S&P ratings set forth in the Pricing Grid above and as further detailed in this paragraph. If
none of S&P, Moody’s or Fitch shall have in effect a New Rating (either after a New Rating has
previously been obtained or after October 31, 2005), then Pricing shall be deemed to be Tier 2.
If one of S&P, Moody’s or Fitch shall have in effect a New Rating, then Pricing shall be deemed to
be the applicable Tier corresponding to such rating. If two or more of Moody’s, S&P and Fitch
have established a New Rating and all such ratings differ by no more than one Tier, Pricing shall
be determined by reference to the higher rating (i.e., the Tier with the smaller spreads). If two
or more of Moody’s, S&P and Fitch have established a New Rating and any two such ratings differ by
two or more Tiers, Pricing shall be determined by reference to the Tier next below that
corresponding to the highest of all such ratings. If the New Rating established or deemed to have
been established by S&P, Moody’s or Fitch shall be changed, such change shall be effective as of
the date on which it is first publicly announced by such rating agency. Each change in the
Pricing shall apply during the period commencing on the effective date of such change and ending on
the date immediately preceding the effective date of the next such change. If the rating system
of any of S&P, Moody’s or Fitch shall change, or if any such rating agency shall cease to be in the
business of rating corporate debt obligations, the Borrower and the Lenders shall negotiate in good
faith to amend this definition to reflect such changed rating system or the unavailability of
ratings form such rating agency and, pending the effectiveness of any such amendment, the
Applicable Margin shall be determined by reference to the rating most recently in effect prior to
such change or cessation.

ANNEX Iexv10w1

 

EXHIBIT 10.1

LOAN AGREEMENT

     THIS AGREEMENT made and entered into on this 27th day of June, 2005, by and between MITCHAM
INDUSTRIES, INC., a Texas corporation, with principal offices at Huntsville, in Walker County,
Texas (herein referred to as “Borrower”), and First Victoria National Bank, a national banking
corporation, with its offices and domicile in Victoria, Victoria County, Texas, (herein referred to
as “Lender”) to induce Lender to extend credit to Borrower in the amounts evidenced by the
promissory note described in Paragraph II A of this agreement (herein referred to as the “Loan”)
and evidencing the line of credit described herein.

     In consideration of their mutual warranties, covenants and agreements contained herein and
Lender’s extension of credit to Borrower in the amount aforesaid, Borrower and Lender hereby
warrant, covenant and agree as follows:

I. WARRANTIES OF BORROWER:

     A. That Borrower is a Texas corporation currently authorized to do business in the State of
Texas, and that all franchise taxes, employment taxes, withholding taxes, income taxes, sales
taxes, use taxes and all other taxes have been paid current to the date of this agreement.

     B. That the execution by Borrower of this agreement and the other documents described herein
has been duly authorized by its corporate board and that all of the agreements, indentures, or
conveyances described herein to be made or undertaken by Borrower are within its corporate powers
and not prohibited by law or its governing documents.

     C. That this Loan Agreement and all promissory notes and security documents referenced herein
are legal, valid and binding obligations of Borrower which are enforceable against Borrower in
accordance with the respective terms thereof.

Exhibit 10.1

 

     D. That all audits and financial information submitted to Lender may be relied upon by Lender
as fairly representing the financial condition of the companies or individuals to which the same
relate, and that there has been no adverse change in the financial condition of Borrower subsequent
to the presentment of the financial information now held by Lender.

     E. That there is no litigation, arbitration or governmental or regulatory proceedings pending
or threatened against Borrower which, if adversely determined, could have a material adverse effect
on Borrower’s financial condition or affect the legality, validity or enforceability of this Loan
Agreement or any promissory notes or security documents referenced herein and that Borrower has no
material contingent liabilities or material forward commitments which are not disclosed in the
financial information now held by Lender.

     F. That there are no other liens or encumbrances against the property given as security for
the payment of the hereinafter described loan, except for a Permitted Lien as defined herein.

     “Permitted Lien” means (a) Liens created by or permitted under the Security Agreement, Lease
and Rental Assignment, and such other documents and instruments under this Loan Agreement; (b) Liens existing on the date of this Agreement; (c) Liens for Taxes or
other governmental charges not at the time due and payable, or (if foreclosure, distraint sale or
other similar proceeding shall not have been initiated) which are being contested in good faith by
appropriate proceedings diligently prosecuted, so long as foreclosure, distraint, sale or other
similar proceedings have not been initiated, and in each case for which the Borrower and its
subsidiaries maintain adequate reserves in accordance with GAAP; (d) Liens in favor of carriers,
warehousemen, mechanics and materialmen, or other similar Liens imposed by law, which remain
payable without penalty or which are being contested in good faith by appropriate proceedings
diligently prosecuted, which proceedings have the effect of preventing

Exhibit 10.1 - 2

 

the forfeiture or sale of the property subject thereto, and in each case for which the
Borrower and its subsidiaries maintain adequate reserves in accordance with GAAP; (e) Liens in
connection with worker’s compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or Liens consisting of cash collateral securing the
Borrower’s or any of its subsidiaries’ performance of surety bonds, bids, performance bonds and
similar obligations and, in each case, for which the Borrower and its subsidiaries maintain
adequate reserves in accordance with GAAP; (f) attachments, appeal bonds (and cash collateral
securing such bonds), judgments and other similar Liens, for sums not exceeding $1,000,000.00 in
the aggregate for the Borrower and its subsidiaries, arising in connection with court proceedings,
provided that the execution or other enforcement of such Liens is effectively stayed; (g)
easements, rights of way, restrictions, minor defects or irregularities in title and other similar
Liens arising in the ordinary course of business and not materially detracting from the value of
the property subject thereto and not interfering in any material respect with the ordinary conduct
of the business of the Borrower or any subsidiary; (h) Liens consisting of cash collateral securing
the Borrower’s and its subsidiaries’ reimbursement obligations under letters of credit, provided
that the aggregate amount of cash collateral securing such Indebtedness does not exceed the undrawn
face amount of all such letters of credit outstanding at any one time; and (i) Liens arising solely
by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or
similar rights and remedies and burdening only deposit accounts or other funds maintained with a
creditor depository institution, provided that no such deposit account is a dedicated cash
collateral account or is subject to restrictions against access by the depositor in excess of those
set forth by regulations promulgated by the Board of Governors of the Federal Reserve System and no
such deposit account is intended by the Borrowers to provide collateral to the depository
institution.

Exhibit 10.1 - 3

 

II. INDEBTEDNESS

     A. Lender shall advance to Borrower, according to the terms thereof and subject to the
limitations expressed therein and in this agreement, the principal sum of the following promissory
note:

One certain promissory note of even date herewith executed by Borrower and
payable to the order of Lender in the original principal sum of
$12,500,000.00, bearing interest at the rate of the Wall Street Journal
announced prime rate as such rate is determined daily by Lender according to
the specific terms of said promissory note and interest being payable in
monthly installments and one final principal payment in the amount of the
entire remaining principal balance of the note (together with any accrued
and unpaid interest). The final principal payment shall be due, together
with any unpaid interest, on the date two (2) years after the date of the
note with all such terms as provided in said promissory note.

     B. Borrower agrees to execute and deliver to Lender such promissory note in the form
prescribed by Lender and on terms described herein, evidencing the indebtedness created by such
advances.

     C. Borrower hereby acknowledges and agrees that Lender has and shall have the right, at any
time, without the consent of or notice to Borrower, to grant participations in all or part of the
obligations of Borrower evidenced by this note, together with any liens or collateral securing the
payment hereof. In the event Lender elects to participate any Overline Portion (as hereinafter
defined) of the obligations evidenced by this note and if Lender is unable to procure a participant
or a participant fails or refuses to advance to Borrower any Overline Portion through no fault of
Lender, it is agreed that Lender shall have no liability to Borrower to fund such Overline Portion,
nor shall Lender have any obligation to procure funds from other sources or fund any amounts that
would cause Lender to be in violation of any state or federal law with respect to Borrower being
liable to Lender in an amount in excess of that permitted by such applicable law. The term
“Overline Portion” shall mean the amount of loan proceeds in excess

Exhibit 10.1 - 4

 

of the amount that Lender is permitted by applicable law or Lender’s loan policy limitations
to loan to Borrower.

     D. Notwithstanding any other provision in this agreement or the provisions of any
promissory note or other loan document to the contrary, Lender shall not charge or collect and
Lender does not intend to contract for interest in excess of that permitted by law for loans of
this kind, and to prevent such occurrence, Lender will, at maturity, or an earlier final payment of
any promissory note described above, determine the total amount of interest that can be lawfully
charged or collected by applying the highest lawful rate of interest to the full periodic balances
of principal for the period each is outstanding and unpaid and compare such amount with the total
interest that has accrued under the terms of such note, and, if necessary to prevent usury, reduce
the total amount of interest payable by Borrower to the lesser amount. If the amount of interest
that has been collected exceeds the lawful amount, Lender shall either make direct refund of such
excess to Borrower or credit it against other sums owed by Borrower to Lender, whichever Lender
deems appropriate. If at any time the rate of interest provided for in any note shall exceed the
highest lawful rate, the annual rate at which interest shall accrue on such note shall be limited
to such highest lawful rate. The highest lawful rate shall thereafter be the rate at which
interest is accrued on such note until the total amount of interest accrued equals the amount of
interest that would have accrued if the interest rate provided in such note had at all times been
in effect, after which the interest rate provided in such note, if it does not exceed the highest
lawful rate, shall apply. As used herein, the term “highest lawful rate” means the highest rate of
interest permitted to be charged or collected under the applicable state or federal law for this
type of loan applied to the full periodic balances of principal advances for the period each is
outstanding and unpaid.

Exhibit 10.1 - 5

 

III. SECURITY

     A. As security for the loan, Borrower shall execute and deliver to, procure for, deposit with,
and pay to Lender the following:

	 	1.	 	Security agreements, financing statements, registrations, and title
documents in form and content acceptable to Lender, executed by Borrower and
covering all assets of Borrower, including but not limited to its equipment,
accounts receivable, contracts, leases, inventory, instruments, chattel paper
and general intangibles, now owned or hereafter acquired by Borrower, and any
and all proceeds, increases, substitutions, replacements, additions, and
accessions to such assets securing the promissory note delivered by Borrower
pursuant to Paragraph II.A hereof, and all other and future indebtedness of
Borrower to Lender and evidencing a first lien and prior security interest in
such collateral, whether now owned or hereinafter acquired by Borrower.
	 
	 	2.	 	Lease and Rental Assignment to Lender, in form and content acceptable
to Lender, of Borrower’s rights under any leases of equipment by Borrower
hereunder which have not been paid in full.
	 
	 	3.	 	Such other documents and instruments as Lender may require for the
perfection of liens and their registration under the laws of the State of
Texas, of the United States of America, of Canada or any other foreign nation
or province of a foreign nation.
	 
	 	4.	 	Hazard insurance policy or policies in form and content and issued by a
company or companies with loss payable endorsements acceptable to Lender,
insuring all collateral given as security against loss or damage and against
vandalism and malicious mischief and insuring said collateral against the usual
and customary risks and hazards as Lender may request, all of such policy or
policies to be for a total amount acceptable to Lender.
	 
	 	5.	 	Such security agreements and pledges as are required by Lender to
provide that all collateral for Borrower’s other and future indebtedness to
Lender secures the indebtedness of Borrower arising from the Loan governed by
this Agreement.

Exhibit 10.1 - 6

 

     B. Borrower shall execute and deliver to Lender such other documents and instruments as Lender
may require to evidence the status or authority of Borrower and to evidence, govern or secure the
payment of the Loan or any portion thereof.

IV. COVENANTS OF BORROWER

     A. For so long as any portion of the Loan remains unpaid, Borrower covenants and agrees as
follows:

POSITIVE COVENANTS

	 	1.	 	That Borrower agrees to pay to Lender, upon demand, all expenses of
every nature incurred by Lender in connection with the consummation of the
transaction contemplated by this agreement, or the enforcement or preservation
of Lender’s rights hereunder, including attorney’s fees and expenses of
Lender’s counsel, hazard insurance premiums, filing and recording fees, court
costs, and other fees and reasonable expenses incurred by Lender. Borrower
agrees to pay to Lender an origination fee of $5,000.00 as consideration for
the Loan.
	 
	 	2.	 	That Borrower shall furnish or cause to be furnished at its expense to
Lender statements or reports in form and content acceptable to Lender on the
forty-fifth (45th) day after the end of each quarter for first three quarters
of Borrower’s fiscal year which shall set forth an operating statement and
balance sheet for Borrower herein named as Borrower; an ageing of notes,
accounts receivable and accounts payable of Borrower for the preceding calendar
quarter. Lender shall be allowed to make reasonable inspections of all assets
securing said loan and shall further have the right to inspect the books of
Borrower or other records relating to the affairs of Borrower.
	 
	 	3.	 	That Borrower shall furnish at its expense to Lender annually, within
ninety (90) days after the end of Borrower’s income tax reporting year, a
report prepared and audited by a Certified Public Accountant for Borrower,
including a balance sheet, income statement, sources and uses of funds
statement, and a reconciliation of net worth.

Exhibit 10.1 - 7

 

	 	4.	 	That while Borrower is indebted to Lender hereunder Borrower will:

	 	a.	 	Perform all of its obligations to appropriate
regulatory agencies;
	 
	 	b.	 	Punctually pay all indebtedness from time to
time owing hereunder when due;
	 
	 	c.	 	Perform all of its obligations under the
Security Instruments described herein;
	 
	 	d.	 	Promptly pay and discharge any and all
indebtedness or obligations when due and owing in excess of
$500,000.00, including all taxes of every kind and character,
all assessments, and other claims which might give rise to a
lien on the property given as security for this loan or impair
Borrower’s obligation to conduct its business, except as it may
in good faith contest or as to which a bona fide dispute may
arise, provided provision is made to the satisfaction of Lender
for eventual payment thereof in the event that it is found that
such indebtedness or obligation or tax or claim is an
obligation of Borrower, and when such dispute or contest is
settled or determined, it will promptly pay the amount then
due.
	 
	 	e.	 	Maintain and keep in force insurance of the
types and in the amounts customarily carried by companies in
similar lines of business, including adequate amounts of fire,
windstorm, explosion, public liability, property damage, and
workman’s compensation insurance; all insurance is to be
carried by nationally reputable companies, and Borrower will
deliver to Lender from time to time, at the request of Lender,
a schedule setting forth all insurance in effect;
	 
	 	f.	 	Maintain a standard and modern accounting
system in accordance with generally accepted principles of
accounting, permit Lender to inspect its books of account and
records at all reasonable times, furnish to Lender such
information respecting the business affairs and financial
condition of Borrower as Lender may reasonably request.
	 
	 	g.	 	Preserve all rights, privileges, franchises,
licenses, and permits connected with its business and to the
extent of its ability will conduct its business in an orderly,
efficient

Exhibit 10.1 - 8

 

	 	 	 	manner without voluntary interruptions, and comply with all
applicable laws and regulations of government agencies;

	 	h.	 	Maintain, preserve and keep all properties and
equipment in good repair, working order and condition,
reasonable wear and tear excepted, and from time to time make
all necessary and proper repairs, renewals, replacements, and
improvements thereto so that at all times the efficiency and
value thereof shall be fully preserved and maintained, and
maintain leases, licenses and permits, but nothing herein
contained shall prevent Borrower from in good faith contesting
or seeking legal construction of any dispute, terms or
conditions of a contract, lease or other obligation; Lender
may, at reasonable times, visit and inspect any of the
properties of Borrower;
	 
	 	i.	 	Maintain Borrower’s financial condition in
compliance with the following ratios, measured at the end of
each quarter of the calendar year, as determined by Lender
based on generally accepted accounting principles (GAAP):

	 	A.	 	A debt to shareholder’s
equity ratio of a maximum of 1.3 to 1.0. This
ratio shall be calculated with the Borrower’s
total debt being divided by the Borrower’s
total shareholder equity for the resulting
ratio.
	 
	 	B.	 	A current assets to
current liabilities ratio of a minimum of 1.25
to 1.0. This ratio shall be calculated with
the Borrower’s total current assets being
divided by the Borrower’s total current
liabilities for the resulting ratio.

	 	j.	 	To give notice in writing to Lender within 30
days of any proceedings by any public or private body, agency,
or authority, pending or threatened, which may have a
substantial adverse effect on Borrower, and of any litigation
involving the possibility of judgments or liabilities in excess
of an aggregate of $1,000,000.00 not covered by insurance.

	 	5.	 	That Borrower shall not incur or maintain any indebtedness or
obligations or guarantee the debts or obligations of others in a total
aggregate amount which exceeds $1,000,000.00 from any other source not related
to the

Exhibit 10.1 - 9

 

	 	 	 	indebtedness to Lender described herein without the prior written approval
of Lender except for the indebtedness and obligations as a result of the
acquisition of Seamap International Holding Pte, Ltd. and the proposed contract
with the Royal Australian Navy as addressed in the Security
Agreement.
	 
	 	6.	 	That Borrower shall furnish or cause to be furnished at its expense to
Lender, Borrowing Base Certificates in the form and content contained on the
attached Exhibit “A,” which is incorporated herein by reference for all
purposes, on the 20th day of each calendar month for the preceding calendar
month. Borrower shall provide and complete the information and calculations
required by the Borrowing Base Certificates, and the availability of advances
to Borrower shall be subject to and governed by the restrictions set forth in
said Borrowing Base Certificates.
	 
	 	7.	 	That Borrower shall furnish or cause to be furnished at its expense to
Lender, an appraisal of the equipment lease pool at the end of every one (1)
year period from the date of this Loan Agreement. Said appraisal shall be
performed by an appraiser that is approved by Lender in its sole discretion.

NEGATIVE COVENANTS

	 	8.	 	Borrower will not, except with the prior written consent of Lender:

	 	a.	 	Permit any lien (other than for taxes not
delinquent and for taxes and other items being contested in
good faith) to exist on property given as security for this
loan or on the income or profits thereof, excepting a Permitted
Lien.
	 
	 	b.	 	Assign any leases or the proceeds thereof to
anyone except Lender;

	 	9.	 	Borrower will take no action which would result in any change in the
form of the corporate entity of Borrower or result in any reorganization,
merger or consolidation of Borrower with any other entity during the term of
this agreement without prior written consent of Lender.
	 
	 	10.	 	That Borrower may not assign or otherwise transfer this Agreement or
any rights hereunder, and that this Agreement shall be binding upon Borrower an
the representatives, heirs, executors, legal representatives and successors of
Borrower.
	 
	 	11.	 	That, except after written notice to Lender and where such use and the
activities relating thereto are in material compliance with all applicable

Exhibit 10.1 - 10

 

	 	 	 	laws and regulations, Borrower shall not hereafter permit any property which
is (a) given as security for this Loan, (b) used by Borrower for any
business or other activities financed by Lender or (c) the source of
repayment of this Loan, to be used in any way for the generation,
transportation, treatment, disbursal, storage, discharge or disposal of any
pollutants, hazardous or toxic substances, or hazardous wastes as defined or
regulated by any of the following federal statutes: (a) The Comprehensive
Environmental Response, Compensation and Liability Act (“CERCLA”), as
amended by the Superfund Amendments and Re-Authorization Act of 1986
(“SARA”), (b) the Resource Conservation and Recovery Act (“RCRA”), (c) the
Toxic Substance Control Act (“TSCA”), (d) any amendments to or regulations
promulgated by any agency under any of the above statutes, and (e) any other
state or federal statute or regulation for the control of hazardous or toxic
substances.

V. COVENANTS OF LENDER

     A. Subject to the terms of this agreement and of the note and security instruments described
herein, Lender covenants and agrees as follows:

Advances will be requested by Borrower via facsimile accompanied by a
current borrowing base certificate and confirmed by a telephone call to
Lender. Lender will make advance on the same day as the request is made if
the request is confirmed by 12:00 noon. Lender will make advance by 12:00
noon the following day if the request is confirmed after 12:00 noon. Lender
shall be bound to make the advances herein on the following conditions up to
the amount specified as the original principal sum of the note and subject
to the limitations described herein with respect to the note described at
Paragraph II A hereof and subject to making the request for such advance to
Lender as specified above and subject to the following:

	 	a.	 	Compliance by Borrower with all terms and
conditions of this Loan Agreement, with respect to said Loan
and the absence of any default by Borrower hereunder.
	 
	 	b.	 	Payment of all fees and expenses contemplated
by this Agreement.
	 
	 	c.	 	Execution of all notes, security agreements and
other documents required by Lender.
	 
	 	d.	 	Furnishing of financial statements evidencing
financial condition of the Borrower.

Exhibit 10.1 - 11

 

VI. DEFAULT AND REMEDIES

     A. The occurrence of any one of the following events of default shall, at the option
of Lender and without notice or demand, except as described hereunder, make all or such
parts of the sums owing from Borrower to Lender hereunder, as Lender in its discretion
shall determine, immediately due and payable:

	 	1.	 	Failure of Borrower to pay within 10 days after demand any sum past due
hereunder or under the Promissory Note, Security Agreement, and Lease and Rental
Assignment of even date;
	 
	 	2.	 	Failure of Borrower to pay upon demand any debt hereunder or under the
Promissory Note, Security Agreement, and Lease and Rental Assignment of even
date, the maturity of which has been accelerated;
	 
	 	3.	 	The Borrower’s failure to punctually perform any of the obligations, covenants,
terms, or provisions contained or referred to in this Loan Agreement or in any note
secured by this Loan Agreement or in the Security Agreement, Lease and Rental
Assignment or any other instrument relating to the indebtedness to the Lender which
remains unperformed after thirty (30) days of non-compliance thereof.
	 
	 	4.	 	Any warranty, representation, or statement contained in this Loan
Agreement or any other writing between the parties made or furnished to the
Lender by or on behalf of the Borrower in connection with this Loan Agreement
or any other agreement, or to induce the Lender to make a loan to the Borrower
that proves to have been false in any material respect when made or furnished.
	 
	 	5.	 	Except to the extent covered by insurance, any loss, theft, substantial
damage, destruction, sale (other than in the normal course of business),
encumbrance or seizure of or to any of the Collateral (as defined in the
Security Agreement of even date) of a total value of more than $250,000.00.
	 
	 	6.	 	The Borrower’s dissolution or merger.
	 
	 	7.	 	The Borrower’s business failure, insolvency, assignment for the benefit
of creditors, or the appointment of a receiver, or institution of either
voluntary or involuntary bankruptcy proceedings concerning the Borrower.

Exhibit 10.1 - 12

 

	 	8.	 	Any statement of the financial condition of the Borrower submitted to
the Lender that proves to be false or materially inaccurate.
	 
	 	9.	 	Receipt by the Lender of notice at any time from any third party that
the third party is acquiring or attempting to acquire a security interest of
any kind in the Collateral that is the subject of the Security Agreement of the
even date.
	 
	 	10.	 	Failure of the Borrower to maintain its existence as a Texas
corporation.
	 
	 	11.	 	The Borrower’s removing or replacing of any of the component parts of
Collateral (as defined by the Security Agreement of even date) so as materially
to lessen its market value.
	 
	 	12.	 	Lapse or cancellation of any insurance required by the Security
Agreement of even date, and the Borrower’s failure to furnish satisfactory
proof to the Lender that satisfactory substitute policies have been obtained
within thirty (30) days of the termination of coverage.
	 
	 	13.	 	The levy of any attachment, execution, or other like process against
any of Lender’s collateral;
	 
	 	14.	 	The voluntary suspension of business by Borrower;
	 
	 	15.	 	Any default by Borrower in the payment or performance of any other
obligation of Borrower to Lender, including but not limited to any event of
default under any other loan agreement between Borrower and Lender or any
failure of Borrower to timely pay any sum when due on any indebtedness owing by
Borrower to Lender, regardless of how arising, or any breach by Borrower of any
covenant in any security agreement relating to any indebtedness of Borrower to
Lender;
	 
	 	16.	 	The failure or inability of Borrower for any reason, within a period of
90 days after notice from Lender thereof, to correct, cure or eliminate any
conditions, circumstances, or events (whether or not caused by any action or
inaction of Borrower), which Lender determines, in good faith, to affect
Borrower or its operations or Borrower’s business or financial prospects in a
manner which impairs security of Lender or Borrower’s ability to perform its
obligations.

     B. That no waiver of any default on the part of Borrower shall be considered waiver of any
other or subsequent default and no forbearance, delay, or omission in exercising or enforcing the
rights and powers of Lender shall be construed as a waiver of such rights and

Exhibit 10.1 - 13

 

powers, and likewise no exercise or partial exercise of any rights or powers hereunder by
Lender shall be held to preclude further exercise of such rights and powers, and every such right
and power may be exercised from time to time.

     C. The rights, powers and remedies given to Lender hereunder shall be in addition to all
rights, powers and remedies given to Lender by law against Borrower and any other person.

     D. No action shall be commenced by Borrower for any claim against Lender under the terms of this Loan
Agreement or arising from the subject loan relationship unless a notice in writing specifically
setting forth the claim of Borrower shall have been given to Lender within six (6) months after the
occurrence of the event which Borrower alleges gave rise to such claim. Failure to give such
notice shall constitute a waiver of any such claim.

VII. GENERAL PROVISIONS

     A. Any notice or demand required or permitted to be given hereunder by Lender may be given in
writing by depositing such notice in the United States Mail, postage prepaid, addressed to Borrower
at P. O. Box 1175, Huntsville, Texas 77342-1175, Attn: Billy F. Mitcham, Jr., or such other place
as Borrower shall have designated in writing. Notice shall be deemed to have been given 48 hours
after being so deposited in the United States Mail.

     B. This agreement shall be construed under and in accordance with the laws of the State of
Texas, and all obligations of the parties created hereunder are performable in Victoria County,
Texas. Notwithstanding the provisions of this paragraph, Chapter 346 of the Texas Finance Code,
shall not apply to the loan governed by this agreement or any part thereof.

     C. In any case, if any one or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity,

Exhibit 10.1 - 14

 

illegality, or unenforceability shall not affect any other provision hereof and this Agreement
shall be construed as if such invalid, illegal, or unenforceable provision had never been contained
herein.

     D. This Agreement constitutes the sole and only agreement of the parties hereto and supersedes
any prior understandings or written or oral agreements between the parties respecting the within
subject matter.

     E. This agreement shall apply to and govern the herein described extensions of credit and all
renewals, extensions and rearrangements of such indebtedness of Borrower to Lender.

Exhibit 10.1 - 15

 

     EXECUTED on the date first hereinabove mentioned in Victoria, Victoria County, Texas.

	 	 	 	 	 
	 	MITCHAM INDUSTRIES, INC.

 	 
	 	By:  	 	 
	 	 	BILLY F. MITCHAM, JR. 	 
	 	 	Its: President 	 
	 

BORROWER

	 	 	 	 	 
	 	FIRST VICTORIA NATIONAL BANK

 	 
	 	By  	 	 

	 	 	 	 	 
	 	   	
 	 

	 	 	 	 	 
	 	  Its	
 	 

LENDER

Exhibit 10.1 - 16

 

	 	 	 	 	 	 	 
	 

	 	THE STATE OF TEXAS
	 	§
	 	 
	 
	 	 	 	 	 	 
	 

	 	COUNTY OF WALKER
	 	§	 	 

     This instrument was acknowledged before me on                                         , 2005, by BILLY F.
MITCHAM, JR. as President of MITCHAM INDUSTRIES, INC., on behalf of said corporation.

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	Notary Public, State of Texas
	 
	 	 	 	 	 	 
	 

	 	STATE OF TEXAS
	 	§	 	 
	 
	 	 	 	 	 	 
	 

	 	COUNTY OF VICTORIA
	 	§	 	 

     This instrument was acknowledged before me on                                         , 2005, by
                                                            , as                                                              of First Victoria National
Bank, on behalf of said corporation.

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	Notary Public, State of Texas

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