Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.5

 

 

CREDIT AGREEMENT

dated as of June 29, 2007

by and among

ENERGY WEST, INCORPORATED,

VARIOUS FINANCIAL INSTITUTIONS

and

LASALLE BANK NATIONAL ASSOCIATION,

as Agent

 

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	SECTION 1. DEFINITIONS
	 	 	1	 
	1.1 Definitions
	 	 	1	 
	1.2 Other Interpretive Provisions
	 	 	14	 
	SECTION 2. COMMITMENTS OF THE BANKS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES
	 	 	15	 
	2.1 Commitment
	 	 	15	 
	2.2 Loan Procedures
	 	 	15	 
	2.3 Letter of Credit Procedures
	 	 	17	 
	2.4 Commitments Several
	 	 	19	 
	2.5 Certain Conditions
	 	 	19	 
	2.6 Incremental Loan
	 	 	19	 
	SECTION 3. NOTES EVIDENCING LOANS
	 	 	20	 
	3.1 Notes
	 	 	20	 
	3.2 Recordkeeping
	 	 	20	 
	3.3 Maturity
	 	 	20	 
	SECTION 4. INTEREST
	 	 	20	 
	4.1 Interest Rates
	 	 	20	 
	4.2 Interest Payment Dates
	 	 	21	 
	4.3 Setting and Notice of LIBOR
	 	 	21	 
	4.4 Computation of Interest
	 	 	21	 
	4.5 Maximum Rate of Interest
	 	 	21	 
	SECTION 5. FEES
	 	 	22	 
	5.1 Commitment Fee
	 	 	22	 
	5.2 Letter of Credit Fees
	 	 	22	 
	5.3 Upfront Fees
	 	 	22	 
	5.4 Agent’s Fees
	 	 	22	 
	SECTION 6. REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT AMOUNT; PREPAYMENTS AND PAYMENTS
	 	 	23	 
	6.1 Reduction or Termination of the Commitment Amount
	 	 	23	 
	6.2 Prepayments
	 	 	23	 
	6.3 Miscellaneous Prepayment Provisions
	 	 	24	 
	6.4 Payment of Loans
	 	 	25	 

 

 

 

	 	 	 	 	 
	SECTION 7. MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES
	 	 	25	 
	7.1 Making of Payments
	 	 	25	 
	7.2 Application of Certain Payments
	 	 	25	 
	7.3 Due Date Extension
	 	 	25	 
	7.4 Setoff
	 	 	25	 
	7.5 Proration of Payments
	 	 	25	 
	7.6 Taxes
	 	 	25	 
	SECTION 8. INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS
	 	 	27	 
	8.1 Increased Costs
	 	 	27	 
	8.2 Basis for Determining Interest Rate Inadequate or Unfair
	 	 	28	 
	8.3 Changes in Law Rendering LIBOR Loans Unlawful
	 	 	28	 
	8.4 Funding Losses
	 	 	29	 
	8.5 Right of Banks to Fund through Other Offices
	 	 	29	 
	8.6 Discretion of Banks as to Manner of Funding
	 	 	29	 
	8.7 Mitigation of Circumstances; Replacement of Banks
	 	 	29	 
	8.8 Conclusiveness of Statements; Survival of Provisions
	 	 	30	 
	SECTION 9. WARRANTIES
	 	 	30	 
	9.1 Organization
	 	 	30	 
	9.2 Authorization; No Conflict
	 	 	30	 
	9.3 Validity and Binding Nature
	 	 	31	 
	9.4 Financial Condition
	 	 	31	 
	9.5 No Material Adverse Change
	 	 	31	 
	9.6 Litigation and Contingent Liabilities
	 	 	31	 
	9.7 Ownership of Properties; Liens
	 	 	31	 
	9.8 Subsidiaries
	 	 	31	 
	9.9 Pension Plans
	 	 	32	 
	9.10 Investment Company Act
	 	 	32	 
	9.11 Status Under Certain Statutes
	 	 	32	 
	9.12 Regulation U
	 	 	32	 
	9.13 Taxes
	 	 	32	 
	9.14 Solvency, etc.
	 	 	33	 
	9.15 Environmental Matters
	 	 	33	 
	9.16 Reserved
	 	 	34	 
	9.17 Insurance
	 	 	34	 
	9.18 Real Property
	 	 	34	 
	9.19 Information
	 	 	34	 
	9.20 Intellectual Property
	 	 	35	 
	9.21 Burdensome Obligations
	 	 	35	 
	9.22 Labor Matters
	 	 	35	 
	9.23 No Default
	 	 	35	 
	9.24 Foreign Assets Control Regulations and Anti-Money Laundering.
	 	 	35	 
	9.25 Capitalization
	 	 	35	 

 

-ii-

 

	 	 	 	 	 
	SECTION 10. COVENANTS
	 	 	36	 
	10.1 Reports, Certificates and Other Information
	 	 	36	 
	10.2 Books, Records and Inspections
	 	 	38	 
	10.3 Maintenance of Property; Insurance
	 	 	38	 
	10.4 Compliance with Laws; Payment of Taxes and Liabilities
	 	 	39	 
	10.5 Maintenance of Existence, etc.
	 	 	39	 
	10.6 Financial Covenants
	 	 	39	 
	10.7 Limitations on Debt
	 	 	39	 
	10.8 Liens
	 	 	40	 
	10.9 Operating Leases
	 	 	41	 
	10.10 Restricted Payments
	 	 	41	 
	10.11 Mergers, Consolidations, Sales
	 	 	42	 
	10.12 Modification of Organizational Documents
	 	 	42	 
	10.13 Use of Proceeds
	 	 	42	 
	10.14 Further Assurances
	 	 	43	 
	10.15 Transactions with Affiliates
	 	 	43	 
	10.16 Employee Benefit Plans
	 	 	43	 
	10.17 Environmental Matters
	 	 	43	 
	10.18 Unconditional Purchase Obligations
	 	 	43	 
	10.19 Inconsistent Agreements
	 	 	43	 
	10.20 Business Activities
	 	 	44	 
	10.21 Investments
	 	 	44	 
	10.22 Restriction of Amendments to Certain Documents
	 	 	45	 
	10.23 Fiscal Year
	 	 	45	 
	10.24 Cancellation of Debt
	 	 	45	 
	10.25 Foreign Subsidiaries
	 	 	45	 
	10.26 Reserved
	 	 	45	 
	10.27 Reserved
	 	 	45	 
	[10.23 Interest Rate Protection
	 	 	45	 
	10.28 OFAC, Etc.
	 	 	45	 
	10.29 Negative Pledges
	 	 	46	 
	10.30 Post-Closing Obligations
	 	 	46	 
	SECTION 11. EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
	 	 	46	 
	11.1 Initial Credit Extension
	 	 	46	 
	11.2 Conditions
	 	 	49	 
	SECTION 12. EVENTS OF DEFAULT AND THEIR EFFECT
	 	 	49	 
	12.1 Events of Default
	 	 	49	 
	12.2 Effect of Event of Default
	 	 	51	 
	12.3 Attorney-in-Fact
	 	 	52	 

 

-iii-

 

	 	 	 	 	 
	SECTION 13. THE AGENT
	 	 	52	 
	13.1 Appointment and Authorization
	 	 	52	 
	13.2 Delegation of Duties
	 	 	53	 
	13.3 Liability of Agent
	 	 	53	 
	13.4 Reliance by Agent
	 	 	53	 
	13.5 Notice of Default
	 	 	53	 
	13.6 Credit Decision
	 	 	54	 
	13.7 Indemnification
	 	 	54	 
	13.8 Agent in Individual Capacity
	 	 	54	 
	13.9 Successor Agent
	 	 	55	 
	13.10 Reserved
	 	 	55	 
	13.11 Funding Reliance
	 	 	55	 
	SECTION 14. GENERAL
	 	 	56	 
	14.1 Waiver; Amendments
	 	 	56	 
	14.2 Confirmations
	 	 	56	 
	14.3 Notices
	 	 	56	 
	14.4 Computations
	 	 	57	 
	14.5 Regulation U
	 	 	57	 
	14.6 Costs, Expenses and Taxes
	 	 	57	 
	14.7 Subsidiary References
	 	 	57	 
	14.8 Captions
	 	 	58	 
	14.9 Assignments; Participations
	 	 	58	 
	14.10 Governing Law
	 	 	60	 
	14.11 Counterparts
	 	 	60	 
	14.12 Successors and Assigns
	 	 	60	 
	14.13 Indemnification by the Company
	 	 	60	 
	14.14 Nonliability of Banks
	 	 	60	 
	14.15 FORUM SELECTION AND CONSENT TO JURISDICTION
	 	 	61	 
	14.16 Waiver of Jury Trial
	 	 	61	 

 

-iv-

 

SCHEDULES

	 	 	 
	SCHEDULE 1

	 	Pricing Grid
	SCHEDULE 1.1(a)

	 	Existing Claims
	SCHEDULE 2.1

	 	Banks and Pro Rata Shares
	SCHEDULE 9.5

	 	Material Adverse Change
	SCHEDULE 9.6

	 	Litigation and Contingent Liabilities
	SCHEDULE 9.8

	 	Subsidiaries
	SCHEDULE 9.15

	 	Environmental Matters
	SCHEDULE 9.17

	 	Insurance
	SCHEDULE 9.18

	 	Real Property
	SCHEDULE 9.22

	 	Labor Matters
	SCHEDULE 9.25

	 	Capitalization
	SCHEDULE 10.7

	 	Permitted Existing Debt
	SCHEDULE 10.8

	 	Permitted Existing Liens
	SCHEDULE 10.21

	 	Investments
	SCHEDULE 14.3

	 	Addresses for Notices

 

 

 

EXHIBITS

	 	 	 
	EXHIBIT A

	 	Form of Note
	EXHIBIT B

	 	Form of Compliance Certificate
	EXHIBIT C

	 	Form of Assignment Agreement

 

 

 

CREDIT AGREEMENT

THIS CREDIT AGREEMENT dated as of June 29, 2007 (this “Agreement”) is entered into by and
among ENERGY WEST, INCORPORATED, a Montana corporation (the “Company”), the financial institutions
that are or may from time to time become parties hereto (together with their respective successors
and assigns, the “Banks”) and LASALLE BANK NATIONAL ASSOCIATION, a national banking association (in
its individual capacity, “LaSalle”), as agent for the Banks (LaSalle, acting in its capacity as
agent for the Banks hereunder and under the other Loan Documents and any successor thereto in such
capacity, the “Agent”).

WHEREAS, the Banks have agreed to make available to the Company a revolving credit facility
upon the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto
agree as follows:

SECTION 1. DEFINITIONS.

1.1 Definitions. When used herein the following terms shall have the following meanings:

“Acquisition” means any transaction or series of related transactions for the purpose of or
resulting, directly or indirectly, in: (i) the acquisition of all or substantially all of the
assets of a Person, or of all or substantially all of any business or division of a Person, (ii)
the acquisition of in excess of fifty percent (50%) of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise causing any Person to become a
Subsidiary, or (iii) a merger or consolidation or any other combination with another Person (other
than a Person that is a Subsidiary to the extent otherwise permitted hereunder).

“Affected Loan” has the meaning ascribed thereto in Section 8.3.

“Affiliate” of any Person means: (i) any other Person which, directly or indirectly, controls
or is controlled by or is under common control with such Person and (ii) any officer or director of
such Person. A Person shall be deemed to be “controlled by” any other Person if such Person
possesses, directly or indirectly, power to vote five percent (5%) or more of the securities (on a
fully-diluted, as-exercised basis) having ordinary voting power for the election of directors or
managers or power to direct or cause the direction of the management and policies of such Person
whether by contract or otherwise..

“Agreement” has the meaning ascribed thereto in the Preamble.

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

 

 

 

“Asset Sale” means the sale, lease, assignment or other transfer for value (each a
“Disposition”) by the Company or any Subsidiary to any Person (other than the Company or any
Subsidiary (other than Bangor Gas and Frontier Energy) of any Property other than: (i) the
Disposition of any asset which is to be replaced, and is in fact replaced, within thirty (30) days
with another asset performing the same or a similar function and (ii) the sale or lease of
inventory in the ordinary course of business.

“Assignment Agreement” has the meaning ascribed thereto in Section 14.9.1.

“Attorney Costs” means, with respect to any Person, all reasonable fees and charges of any
counsel to such Person, the reasonable allocable cost of internal legal services of such Person,
all reasonable disbursements of such internal counsel and all court costs and similar legal
expenses.

“Bangor Gas” means Bangor Gas Company, LLC.

“Bank” has the meaning ascribed thereto in the Preamble.

“Bank Party” has the meaning ascribed thereto in Section 14.13.

“Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.),
as amended and in effect from time to time, any successor thereto and the regulations issued from
time to time thereunder.

“Base Rate” means, at any time, the rate of interest in effect for such day as publicly
announced from time to time by LaSalle as its “prime rate” (whether or not such rate is actually
charged by LaSalle). Any change in the Base Rate (or such “prime rate,” as the case may be)
announced by LaSalle shall take effect at the opening of business on the day specified in the
public announcement of such change.

“Base Rate Loan” means any Loan which bears interest at or by reference to the Base Rate.

“Base Rate Margin” means the percentage set forth in Schedule 1 hereto beside the then
applicable Level.

“Business Day” means any day on which LaSalle is open for commercial banking business in
Chicago, Illinois and, in the case of a Business Day which relates to a LIBOR Loan, on which
dealings are carried on in the London interbank eurodollar market.

“Capital” means, as of any date of determination thereof, without duplication, the sum of: (i)
Consolidated Net Worth plus (ii) all Debt.

“Capital Lease” means, with respect to any Person, any lease of (or other agreement conveying
the right to use) any real or personal property by such Person that, in conformity with GAAP, is
accounted for as a capital lease on the balance sheet of such Person.

 

2

 

“Cash Collateralize” means to deliver cash collateral to the Agent, to be held as cash
collateral for outstanding Letters of Credit, pursuant to documentation reasonably satisfactory to
the Agent. Derivatives of such term have corresponding meanings.

“Cash Equivalent Investment” means, at any time: (i) any evidence of Debt, maturing not more
than one year after such time, issued or guaranteed by the United States Government or any agency
thereof, (ii) commercial paper, maturing not more than one (1) year from the date of issue, or
corporate demand notes, in each case (unless issued by a Bank or its holding company) rated at
least A-l by Standard & Poor’s Ratings Group or P-l by Moody’s Investors Service, Inc., (iii) any
certificate of deposit (or time deposits represented by such certificates of deposit) or banker’s
acceptance, maturing not more than one year after such time, or overnight Federal Funds
transactions that are issued or sold by any Bank or its holding company or by a commercial banking
institution that is a member of the Federal Reserve System and has a combined capital and surplus
and undivided profits of not less than $500,000,000 and (iv) any repurchase agreement entered into
with any Bank (or other commercial banking institution of the stature referred to in clause
(iii)) which: (y) is secured by a fully perfected security interest in any obligation of the
type described in any of clauses (i) through (iii) and (z) has a market value at
the time such repurchase agreement is entered into of not less than one hundred percent (100%) of
the repurchase obligation of such Bank (or other commercial banking institution) thereunder.

“CERCLA” has the meaning ascribed thereto in Section 9.15.

“Change of Control” means an event or series of events by which any person or “group” (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) (such person or persons hereinafter
referred to as an “Acquiring Person”) becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of more than 50% of the voting power of the then
outstanding Voting Stock of the Company; provided, notwithstanding the foregoing, a “Change
in Control” shall not be deemed to have occurred if the Company (or the Acquiring Person if either
(x) the Company is no longer in existence or (y) the Acquiring Person has acquired all or
substantially all of the assets thereof) shall have an Investment Grade Rating immediately
following such Acquiring Person becoming the “beneficial owner” or consummating such acquisition.

“Closing Date” means June 29, 2007.

“Code” means the Internal Revenue Code of 1986.

“Commitment” means, as to any Bank, such Bank’s commitment to make Loans and to issue or
participate in Letters of Credit under this Agreement. The initial amount of each Bank’s Pro Rata
Share of the Commitment Amount is set forth on Schedule 2.1.

“Commitment Amount” means $20,000,000.00, as (x) reduced from time to time pursuant to
Section 6.1 and (y) increased pursuant to the exercise of the Incremental Loan Commitment
(as defined in Section 2.6).

 

3

 

“Commitment Fee Rate” means the percentage set forth in Schedule 1 hereto beside the
then applicable Level.

“Company” has the meaning ascribed thereto in the Preamble.

“Computation Period” means each period of four (4) consecutive Fiscal Quarters ending on the
last day of a Fiscal Quarter.

“Consolidated Net Income” means, with respect to the Company and its Subsidiaries for any
period, the net income (or loss) of the Company and its Subsidiaries for such period,
excluding any gains from Asset Sales, any extraordinary gains and any gains from
discontinued operations.

“Consolidated Net Worth” means, as of any time the same is to be determined, the total
shareholders’ equity (including capital stock, additional paid-in-capital and retained earnings
after deducting treasury stock, but excluding (to the extent otherwise included in calculating
shareholders’ equity), minority interests in Subsidiaries) which would appear on the consolidated
balance sheet of the Company determined on a consolidated basis in accordance with GAAP.

“Controlled Group” means all members of a controlled group of corporations and all members of
a controlled group of trades or businesses (whether or not incorporated) under common control
which, together with the Company, are treated as a single employer under Section 414 of the Code or
Section 4001 of ERISA.

“Debt” of any Person means, without duplication: (i) all indebtedness of such Person for
borrowed money, whether or not evidenced by bonds, debentures, notes or similar instruments, (ii)
all obligations of such Person as lessee under Capital Leases which have been or should be recorded
as liabilities on a balance sheet of such Person in accordance with GAAP, (iii) all obligations of
such Person to pay the deferred purchase price of property or services (excluding trade accounts
payable in the ordinary course of business), (iv) all indebtedness secured by a Lien on the
property of such Person, whether or not such indebtedness shall have been assumed by such Person,
(v) all obligations, contingent or otherwise, with respect to the face amount of all letters of
credit (whether or not drawn) and banker’s acceptances issued for the account of such Person, (vi)
all Hedging Obligations of such Person, (vii) all Suretyship Liabilities of such Person and (viii)
all Debt of any partnership of which such Person is a general partner.

“Disposal” has the meaning ascribed thereto in the definition of “Release.”

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

“Domestic Subsidiary” means a Subsidiary organized and existing under the laws of a state
within the United States.

“EBIT” means, for any period, Consolidated Net Income for such period plus, to the extent
deducted in determining such Consolidated Net Income: (i) Interest Expense, and (ii) income tax and
expense for such period.

 

4

 

“Environmental Claims” means all claims, however asserted, by any governmental, regulatory or
judicial authority or other Person alleging potential liability or responsibility for violation of
any Environmental Law or for release or injury to the environment.

“Environmental Laws” means all present or future federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all administrative
orders, directed duties, requests, licenses, authorizations and permits of, and agreements with,
any governmental authority, in each case relating to Environmental Matters.

“Environmental Matters” means any matter arising out of or relating to pollution or protection
of the environment, including any of the foregoing relating to the presence, use, production,
generation, handling, transport, treatment, storage, disposal, distribution, discharge, release,
control or cleanup of any Hazardous Substance.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the regulations promulgated thereunder.

“Event of Default” means the occurrence of any of the events described in Section
12.1.

“Event of Loss” means, with respect to any Property, any of the following; (a) any loss,
destruction or damage of such Property; (b) any pending or threatened institution of any
proceedings for the condemnation or seizures of such Property or for the exercise of any right of
eminent domain; or (c) any actual condemnation, seizure or taking, by exercise of the power of
eminent domain or otherwise, of such Property, or confiscation of such Property or requisition of
the use of such Property.

“Existing Claims” means the claims, causes of action and other judicial proceedings made,
brought, filed or levied by or on behalf of the Company, any of its Subsidiaries or any Joint
Venture on or before the Closing Date, each of which is described in reasonable detail on
Schedule 1.1(a) hereto.

“Federal Funds Rate” means, for any day, the rate set forth in the weekly statistical release
designated as H.15(519), or any successor publication, published by the Federal Reserve Bank of New
York (including any such successor publication, “H.15(519)”) on the preceding Business Day opposite
the caption “Federal Funds (Effective)”; or, if for any relevant day such rate is not so published
on any such preceding Business Day, the rate for such day will be the arithmetic mean as determined
by the Agent of the rates for the last transaction in overnight Federal funds arranged prior to
9:00 A.M. (New York City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.

“Fiscal Quarter” means a fiscal quarter of a Fiscal Year.

“Fiscal Year” means the fiscal year of the Company and its Subsidiaries, which period shall be
the twelve (12) month period ending on June 30 of each year. References to a Fiscal Year with a
number corresponding to any calendar year (e.g., “Fiscal Year 2007”) refer to the Fiscal Year
ending on June 30 of such calendar year.

 

5

 

“FRB” means the Board of Governors of the Federal Reserve System or any successor thereto.

“Frontier Energy” means Frontier Energy, LLC.

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

“GAAP” means generally accepted accounting principles set forth from time to time in the
opinions and pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the date of
determination.

“Group” has the meaning ascribed thereto in Section 2.2.1.

“Guaranty” means that certain Guaranty dated as of the Closing Date executed by each
Subsidiary of the Company (other than Bangor Gas and Frontier Energy) in favor of Agent for its own
benefit and the benefit of each Bank, which is in form and substance satisfactory to Agent.

“Hazardous Substances” has the meaning ascribed thereto in Section 9.15.

“Hedging Agreement” means any interest rate, currency or commodity swap agreement, cap
agreement or collar agreement, and any other agreement or arrangement designed to protect a Person
against fluctuations in interest rates, currency exchange rates or commodity prices.

“Hedging Obligation” means, with respect to any Person, any liability of such Person under any
Hedging Agreement.

“Interest Coverage Ratio” means, for any Computation Period, the ratio of: (i) EBIT for such
Computation Period to (ii) Interest Expense for such Computation Period.

“Interest Expense” means for any period the consolidated interest expense of the Company and
its Subsidiaries for such period (including all imputed interest on Capital Leases).

“Interest Period” means, as to any LIBOR Loan, the period commencing on the date such Loan is
borrowed or continued as, or converted into, a LIBOR Loan and ending on the date one (1), two (2),
three (3) or six (6) months thereafter as selected by the Company pursuant to Section
2.2.2 or 2.2.3 (or such other longer period as may be agreed upon from time to time by
Company and Agent, at Agent’s sole discretion), as the case may be; provided that:

 

6

 

(i) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the following Business Day unless the
result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the preceding
Business Day;

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

(iii) the Company may not select any Interest Period for a Loan which would
extend beyond the Termination Date (as applicable) with respect to such Loan.

“Investment” means, relative to any Person, any investment in another Person, whether by
acquisition of any debt or equity security or assets, by making any loan or advance or by becoming
obligated with respect to a Suretyship Liability in respect of obligations of such other Person.

“Investment Grade Rating” in respect of any Person means, at the time of determination, at
least two of the following ratings of its senior, unsecured long-term indebtedness for borrowed
money: (i) by Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, or any
successor thereof (“S&P”), “BBB-” or better, (ii) by Moody’s Investors Service, Inc., or any
successor thereof (“Moody’s”), “Baa3” or better, or (iii) by another rating agency of recognized
national standing, an equivalent or better rating.

“Issuing Bank” means LaSalle in its capacity as the issuer of Letters of Credit hereunder and
its successors and assigns in such capacity.

“Joint Venture” means any partnership, association, company, community of interest, business
arrangement or joint venture entered into by the Company or any of its Subsidiaries, in the
ordinary course of their business, with an unrelated, non-Affiliate third party on an arm’s length
basis to engage in a joint undertaking.

“L/C Application” means, with respect to any request for the issuance of a Letter of Credit, a
letter of credit application in the form being used by the Issuing Bank at the time of such request
for the type of letter of credit requested.

“L/C LaSalle Master Letter of Credit Agreement” means a master letter of credit agreement in a
form reasonably satisfactory to LaSalle.

“L/C Fee Rate” means a rate of interest equal to one and one half percent (1.50%) per annum.

“LaSalle” has the meaning ascribed thereto in the Preamble.

 

7

 

“Letter of Credit” has the meaning ascribed thereto in Section 2.1.3.

“Level” means Level I, II or III, or any of them, as set forth in Schedule I hereto.

“LIBOR” means a rate of interest equal to the per annum rate of interest at which United
States Dollar deposits in an amount comparable to the principal balance of the applicable Loan and
for a period equal to the relevant Interest Period are offered in the London Interbank Eurodollar
market at 11:00 a.m. (London time) two (2) Business Days prior to the commencement of each Interest
Period, as displayed in the Bloomberg Financial Markets system, or other authoritative source
selected by Agent in its sole discretion, divided by a number determined by subtracting from one
(1.00) the maximum reserve percentage for determining reserves to be maintained by member banks of
the Federal Reserve System for Eurocurrency liabilities, such rate to remain fixed for such
Interest Period. Agent’s determination of LIBOR shall be conclusive, absent manifest error.

“LIBOR Loan” means any Loan which bears interest at a rate determined by reference to LIBOR.

“LIBOR Margin” means the percentage set forth in Schedule 1 hereto beside the then
applicable Level.

“LIBOR Office” means with respect to any Bank the office or offices of such Bank which shall
be making or maintaining the LIBOR Loans of such Bank hereunder. A LIBOR Office of any Bank may
be, at the option of such Bank, either a domestic or foreign office.

“Lien” means, with respect to any Person, any interest granted by such Person in any real or
personal property, asset or other right owned or being purchased or acquired by such Person which
secures payment or performance of any obligation and shall include any mortgage, lien, encumbrance,
charge or other security interest of any kind, whether arising by contract, as a matter of law, by
judicial process or otherwise, and any contingent or other agreement to provide any of the
foregoing.

“Loan” has the meaning ascribed thereto in Section 2.1.

“Loan Documents” means this Agreement, the Notes, the Guaranty, the L/C Applications and the
L/C LaSalle Master Letter of Credit Agreement.

“Loan Party” means any of the Company and its Subsidiaries (other than Bangor Gas and Frontier
Energy).

“Mandatory Prepayment Event” has the meaning ascribed thereto in subsection 6.2.2(a).

“Margin Stock” means any “margin stock” as defined in Regulation U.

 

8

 

“Material Adverse Effect” means: (i) a material adverse change in, or a material adverse
effect upon, the financial condition, operations, assets, business, properties or prospects of the
Company or the Company and the Company’s Subsidiaries taken as a whole, (ii) a material impairment
of the ability of the Company or any Subsidiary to perform any of its obligations under any Loan
Document to which it is a party or (iii) a material adverse effect upon the legality, validity,
binding effect or enforceability against the Company or any Subsidiary of any Loan Document to
which it is a party.

“Multiemployer Pension Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of
ERISA, to which the Company or any member of the Controlled Group may have any liability.

“Net Cash Proceeds” means:

(i) with respect to any Asset Sale the aggregate cash proceeds (including cash proceeds
received by way of deferred payment of principal pursuant to a note, installment receivable
or otherwise, but only as and when received) received by the Company or any Subsidiary
pursuant to such Asset Sale net of: (x) the direct costs relating to such sale, transfer or
other disposition (including sales commissions and legal, accounting and investment banking
fees), (y) taxes paid or reasonably estimated by the Company to be payable as a result
thereof (after taking into account any available tax credits or deductions and any tax
sharing arrangements) and (z) amounts required to be applied to the repayment of any Debt
secured by a Lien on the asset subject to such Asset Sale (other than the Loans);

(ii) with respect to any payment which constitutes Property Loss Proceeds, an amount
equal to the amount of such payment;

(iii) with respect to any issuance of equity securities, the aggregate cash proceeds
received by the Company or any Subsidiary pursuant to such issuance, net of the direct costs
relating to such issuance (including sales and underwriter’s commissions and legal,
accounting and investment banking fees; and

(iv) with respect to any issuance of Debt, the aggregate cash proceeds received by the
Company or any Subsidiary pursuant to such issuance, net of the direct costs of such
issuance (including up-front fees and placement fees and legal, accounting and investment
banking fees); and

(v) with respect to any Event of Loss, the proceeds paid to any Loan Party on account
of such Event of Loss, net of (i) all of the costs and expenses reasonably incurred in
connection with the collection of such proceeds, award or other payments, and (ii) any
amounts retained by or paid to the parties having superior rights to such proceeds, awards
or other payments.

“Note” has the meaning ascribed thereto in Section 3.1.

 

9

 

“Obligations” means all Loans and other Debt, advances, debts, liabilities, obligations,
covenants and duties owing by the Company to any Bank or the Agent, any Affiliate thereof or any
other Person required to be indemnified, that arises under any Loan Document and any Hedging
Obligation of the Company owed to LaSalle or another Bank or Banks, in each case whether or not for
the payment of money, whether arising by reason of an extension of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or hereafter arising and
however acquired.

“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the Treasury

“Operating Lease” means any lease of (or other agreement conveying the right to use) any real
or personal property by the Company or any Subsidiary, as lessee, other than any Capital Lease.

“Outstandings” means, at any time, the sum of: (i) the aggregate principal amount of all
outstanding Loans, plus (ii) the Stated Amount of all Letters of Credit.

“PBGC” means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all
of its functions under ERISA.

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56, as amended.

“Pension Plan” means a “pension plan,” as such term is defined in Section 3(2) of ERISA, which
is subject to Title IV of ERISA (other than a Multiemployer Pension Plan), and to which the Company
or any member of the Controlled Group may have any liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of ERISA at any time during
the preceding five years, or by reason of being deemed to be a contributing sponsor under Section
4069 of ERISA.

“Permitted Acquisition” means any Acquisition by (i) the Company or any Wholly-Owned
Subsidiary of the Company (other than Bangor Gas and Frontier Energy) which is a Domestic
Subsidiary of all or substantially all of the assets of a Target, which assets are located in the
United States or (ii) the Company or any Wholly-Owned Subsidiary of the Company (other than Bangor
Gas and Frontier Energy) which is a Domestic Subsidiary of 100% of the Stock and Stock Equivalents
of a Target incorporated under the laws of any State in the United States or the District of
Columbia to the extent that each of the following conditions shall have been satisfied:

(a) the Company shall have furnished to the Agent and Banks at least ten (10) Business
Days prior to the consummation of such Acquisition (1) such other information and documents
regarding the Acquisition that the Agent may reasonably request, including, without
limitation, executed counterparts of the respective agreements, documents or instruments
pursuant to which such Acquisition is to be consummated, (2) pro forma financial statements
of the Company and its Subsidiaries after giving effect to the consummation of such
Acquisition, and (3) a certificate of a responsible officer of the
Company demonstrating on a pro forma basis compliance with the covenants set forth in
Section 10.6 hereof after giving effect to the consummation of such Acquisition;

 

10

 

(b) the Company and its Subsidiaries (including any new Subsidiary but not Bangor Gas
or Frontier Energy) shall execute and deliver the agreements, instruments and other
documents required by Section 10.14;

(c) such Acquisition shall not be hostile and shall have been approved by the board of
directors (or other similar body) and/or the stockholders or other equity holders of the
Target;

(d) no Default or Event of Default shall then exist or would exist after giving effect
thereto; and

(e) the Target has EBIT, subject to pro forma adjustments acceptable to the Agent, for
the most recent four quarters prior to the acquisition date for which financial statements
are available, greater than zero.

Pursuant to the terms of, inter alia, (i) that certain Stock Purchase Agreement dated as of January
30, 2007 by and between the Company and Sempra Energy, a California corporation, and the documents,
instruments and agreements contemplated thereby and heretofore executed, executed concurrently
therewith or executed at any time and from time to time hereafter, the Company will acquire all the
stock and other equity interests in Frontier Utilities of North Carolina, Inc., a North Carolina
corporation, and each of its Subsidiaries, and (ii) that certain Stock Purchase Agreement dated as
of January 30, 2007 by and between the Company and Sempra Energy, a California corporation, and the
documents, instruments and agreements contemplated thereby and heretofore executed, executed
concurrently therewith or executed at any time and from time to time hereafter, the Company will
acquire all the stock and other equity interests in Penobscot Natural Gas Company, a Maine
corporation, and each of its Subsidiaries. The Company hereby agrees and covenants the total
consideration (as represented by the Preliminary Purchase Price as defined in the aforementioned
Stock Purchase Agreements) paid or payable for both such Acquisitions shall not exceed $5,000,000
in the aggregate (subject, in each case, to an Adjustment Amount for Working Capital at such
Acquisition’s closing date). For purposes of this Agreement (x) both such Acquisitions shall be
deemed “Permitted Acquisitions” and (y) clause (e) of the definition of “Permitted Acquisition”
shall hereafter be calculated without giving effect to either such Acquisition.

“Person” means any natural person, corporation, partnership, trust, limited liability company,
association, governmental authority or unit, or any other entity, whether acting in an individual,
fiduciary or other capacity.

“Private Placement Notes Debt” means Debt of Borrower incurred pursuant to the Private
Placement Notes Documents.

“Private Placement Notes Documents” means (i) that certain Note Purchase Agreement dated as of
June 29, 2007 by and among the Company and each of the “Purchasers” listed on Schedule A attached
thereto, (ii) the “Notes” (as such term is defined in such Note Purchase
Agreement), and (iii) the documents, instruments and agreements contemplated thereby and
heretofore executed, executed concurrently therewith or executed at any time and from time to time
hereafter, as each of the foregoing may be amended, restated, supplemented or otherwise modified
from time to time in accordance with the terms hereof and the terms of such Note Purchase
Agreement.

 

11

 

“Pro Rata Share” means, with respect to any Bank, the percentage specified opposite such
Bank’s name on Schedule 2.1 hereto, as adjusted from time to time in accordance with the
terms hereof.

“Property” means any interest in any kind of property or asset, whether real, personal or
mixed, and whether tangible or intangible.

“Property Loss Proceeds” means: (i) the aggregate insurance proceeds received in connection
with one (1) or more related events under any property or other, similar insurance policy and (ii)
any award or other compensation with respect to any condemnation of Property (or any transfer or
disposition of Property in lieu of condemnation).

“RCRA” has the meaning ascribed thereto in Section 9.15.

“Regulation D” means Regulation D of the FRB.

“Regulation U” means Regulation U of the FRB.

“Release” has the meaning specified in CERCLA and the term “Disposal” (or “Disposed”) has the
meaning specified in RCRA; provided, in the event either CERCLA or RCRA is amended so as to
broaden the meaning of any term defined thereby, such broader meaning shall apply as of the
effective date of such amendment; and provided, further, to the extent that the laws of a
state wherein any affected property lies establish a meaning for “Release” or “Disposal” which is
broader than is specified in either CERCLA or RCRA, such broader meaning shall apply.

“Required Banks” means Banks having Pro Rata Shares aggregating to more than fifty percent
(50.0%).

“Resources” means Energy West Resources, Inc., a Montana corporation, together with its
successors and assigns.

“Responsible Officer” means the chief executive officer, chief financial officer, Vice
President Administration, treasurer or president of the Company or any other officer of the Company
having substantially the same authority and responsibility.

“SEC” means the Securities and Exchange Commission or any other governmental authority
succeeding to any of the principal functions thereof.

 

12

 

“Solvent” means, as to any Person at any time, that (a) the fair value of the Property of such
Person is greater than the amount of such Person’s liabilities (including disputed, contingent and
unliquidated liabilities) as such value is established and liabilities evaluated for purposes of
Section 101(32)(A) of the Bankruptcy Code and, in the alternative, for purposes of the Uniform
Fraudulent Transfer Act; (b) the present fair saleable value of the Property of such Person is not
less than the amount that will be required to pay the probable liability of such person on its
debts as they become absolute and matured; (c) such Person is able to realize upon its Property and
pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities)
as they mature in the normal course of business; (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts
and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person’s property would constitute
unreasonably small capital.

“Stated Amount” means, with respect to any Letter of Credit at any date of determination: (i)
the maximum aggregate amount available for drawing thereunder under any and all circumstances plus
(ii) the aggregate amount of all unreimbursed payments and disbursements under such Letter of
Credit.

“Subordinated Debt” means any unsecured Debt of the Company that has subordination terms,
covenants, pricing and other terms which have been approved in writing by the Required Banks.

“Subsidiary” means, with respect to any Person, a corporation, partnership, limited liability
company or other entity of which such Person and/or its other Subsidiaries own, directly or
indirectly, such number of outstanding shares or other ownership interests as have more than fifty
percent (50%) of the ordinary voting power for the election of directors or other managers of such
corporation, partnership, limited liability company or other entity. Unless the context otherwise
requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of the
Company. Further, the foregoing notwithstanding, no Joint Venture shall be deemed a Subsidiary for
purposes of the Loan Documents unless expressly provided otherwise.

“Suretyship Liability” means any agreement, undertaking or arrangement by which any Person
guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect
agreement, contingent or otherwise, to provide funds for payment, to supply funds to or otherwise
to invest in a debtor, or otherwise to assure a creditor against loss) any indebtedness, obligation
or other liability of any other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon the shares of any
other Person. The amount of any Person’s obligation in respect of any Suretyship Liability shall
(subject to any limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.

“Target” means any other Person or business unit or asset group of any other Person acquired
or proposed to be acquired in an Acquisition.

 

13

 

“Termination Date” means the earlier to occur of: (i) June 26, 2012 or (ii) such other date on
which the Commitments with respect to terminate pursuant to Sections 6 or 12.

“Total Debt” means, without duplication, all Debt of the Company and its Subsidiaries,
determined on a consolidated basis, excluding: (i) contingent obligations in respect of Suretyship
Liabilities (except to the extent constituting Suretyship Liabilities in respect of Debt of a
Person other than the Company or any Subsidiary), (ii) Hedging Obligations, and (iii) Debt of the
Company to Subsidiaries and Debt of Subsidiaries to the Company or to other Subsidiaries and (iv)
contingent obligations in respect of undrawn letters of credit.

“Total Debt to Capital Ratio” means, as of the last day of any Fiscal Quarter, the ratio of:
(i) Total Debt as of such day to (ii) Capital as of such day.

“Type of Loan” or “Type of Borrowing” has the meaning ascribed thereto in Section
2.2.1. The types of Loans or borrowings under this Agreement are Base Rate Loans or borrowings
and LIBOR Loans or borrowings.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of
Illinois; provided, that to the extent that the Uniform Commercial Code is used to define any term
herein or in any Loan Document and such term is defined differently in different Articles or
Divisions of the Uniform Commercial Code, the definition of such term contained in Article or
Division 9 shall govern.

“Unmatured Event of Default” means any event that, if it continues uncured, will, with lapse
of time or notice or both, constitute an Event of Default.

“Wholly-Owned Subsidiary” means, as to any Person, another Person all of the shares of capital
stock or other ownership interests of which (except directors’ qualifying shares) are at the time
directly or indirectly owned by such Person and/or another Wholly-Owned Subsidiary of such Person.

1.2 Other Interpretive Provisions.

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

(b) Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.

(c) The term “including” is not limiting and means “including without
limitation.”

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

 

14

 

(e) Unless otherwise expressly provided herein: (i) references to agreements
(including this Agreement) and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to the
extent such amendments and other modifications are not prohibited by the terms of
any Loan Document, and (ii) references to any statute or regulation shall be
construed as including all statutory and regulatory provisions amending, replacing,
supplementing or interpreting such statute or regulation.

(f) This Agreement and the other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and each shall be performed
in accordance with its terms.

(g) This Agreement and the other Loan Documents are the result of negotiations
among and have been reviewed by counsel to the Agent, the Company, the Banks and the
other parties thereto and are the products of all parties. Accordingly, they shall
not be construed against the Agent or the Banks merely because of the Agent’s or
Banks’ involvement in their preparation.

(h) Whenever this Agreement or any other Loan Document permits a Person to use
its “discretion,” the parties hereto agree such discretion shall be exercised by
such Person reasonably and in good faith.

SECTION 2. COMMITMENTS OF THE BANKS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES.

2.1 Commitment.

2.1.1 Loan Commitment. On and subject to the terms and conditions of this
Agreement, each of the Banks, severally and for itself alone, agrees to make loans to the
Company on a revolving basis (“Loans”) from time to time until the Termination Date in such
Bank’s Pro Rata Share of such aggregate amounts as the Company may request from all Banks;
provided, the Outstandings will not at any time exceed the Commitment Amount.

2.1.2 L/C Commitment. The Issuing Bank will issue standby letters of credit,
in each case containing such terms and conditions as are permitted by this Agreement and are
reasonably satisfactory to the Issuing Bank (each a “Letter of Credit”), at the request of
and for the account of the Company from time to time before the date which is thirty (30)
days prior to the Termination Date and (b) as more fully set forth in Section 2.3.2,
each Bank agrees to purchase a participation in each such Letter of Credit;
provided, the Outstandings will not at any time exceed the Commitment Amount.

2.2 Loan Procedures.

2.2.1 Various Types of Loans. Loans shall be divided into tranches which are,
either a Base Rate Loan or a LIBOR Loan (each a “type” of Loan), as the Company shall
specify in the related notice of borrowing or conversion pursuant to Section 2.2.2
or 2.2.3. LIBOR Loans having the same Interest Period are sometimes called a
“Group” or collectively “Groups.” Base Rate Loans and LIBOR Loans may be outstanding at the same
time; provided, however, no more than five (5) different Groups of LIBOR Loans shall
be outstanding at any one (1) time and no LIBOR Loans shall be made when an Event of Default
has occurred and is continuing. All borrowings, conversions and repayments of Loans shall
be effected so that each Bank will have a pro rata share (according to its Pro Rata Share)
of all types and Groups of Loans.

 

15

 

2.2.2 Borrowing Procedures. The Company shall give written notice or
telephonic notice (followed immediately by written confirmation thereof) to the Agent of
each proposed borrowing not later than: (a) in the case of a Base Rate borrowing, 11:00
A.M., Chicago time, on the proposed date of such borrowing, and (b) in the case of a LIBOR
borrowing, 11:00 A.M., Chicago time, at least three (3) Business Days prior to the proposed
date of such borrowing. Each such notice shall be effective upon receipt by the Agent,
shall be irrevocable, and shall specify the date, amount and type of borrowing and, in the
case of a LIBOR borrowing, the initial Interest Period therefor. Promptly upon receipt of
such notice, the Agent shall advise each Bank thereof. Not later than 1:00 P.M., Chicago
time, on the date of a proposed borrowing, each Bank shall provide the Agent at the office
specified by the Agent with immediately available funds covering such Bank’s Pro Rata Share
of such borrowing and, so long as the Agent has not received written notice that the
conditions precedent set forth in Section 11 with respect to such borrowing have not
been satisfied, the Agent shall pay over the funds received by the Agent to the Company on
the requested borrowing date. Each borrowing shall be on a Business Day. Each LIBOR
borrowing shall be in an aggregate amount of at least $100,000 and an integral multiple of
at least $100,000.

2.2.3 Conversion and Continuation Procedures.

(a) Subject to Section 2.2.1, the Company may, upon irrevocable written
notice to the Agent in accordance with clause (b) below:

(i) elect, as of any Business Day, to convert any Loans (or any part
thereof in an aggregate amount not less than $100,000 or a higher integral
multiple of $100,000) into Loans of the other type; or

(ii) elect, as of the last day of the applicable Interest Period, to
continue any LIBOR Loans having Interest Periods expiring on such day (or
any part thereof in an aggregate amount not less than $100,000 or a higher
integral multiple of $100,000) for a new Interest Period;

provided, however, after giving effect to any prepayment, conversion or
continuation, the aggregate principal amount of each Group of LIBOR Loans shall be
at least $100,000 and an integral multiple of $100,000.

(b) The Company shall give written or telephonic (followed immediately by
written confirmation thereof) notice to the Agent of each proposed conversion or
continuation not later than: (i) in the case of conversion into Base Rate Loans,
11:00 A.M., Chicago time, on the proposed date of such conversion and (ii) in the
case of conversion into or continuation of LIBOR Loans, 11:00 A.M., Chicago time, at
least three (3) Business Days prior to the proposed date of such conversion or
continuation, specifying in each case:

 

16

 

(w) the proposed date of conversion or continuation;

(x) the aggregate amount of Loans to be converted or continued;

(y) the type of Loans resulting from the proposed conversion or
continuation; and

(z) in the case of conversion into, or continuation of, LIBOR Loans,
the duration of the requested Interest Period therefor.

(c) If, upon the expiration of any Interest Period applicable to LIBOR Loans,
the Company has failed to select timely a new Interest Period to be applicable to
such LIBOR Loans, the Company shall be deemed to have elected to convert such LIBOR
Loans into Base Rate Loans effective on the last day of such Interest Period.

(d) The Agent will promptly notify each Bank of its receipt of a notice of
conversion or continuation pursuant to this Section 2.2.3 or, if no timely
notice is provided by the Company, of the details of any automatic conversion.

(e) Any conversion of a LIBOR Loan on a day other than the last day of an
Interest Period therefor shall be subject to Section 8.4.

(f) Notwithstanding anything contained in this Agreement or any of the other
Loan Documents to the contrary, no LIBOR Loans shall be made and no continuations of
or conversions to LIBOR Loans shall be made for so long as an Event of Default has
occurred and is continuing

2.3 Letter of Credit Procedures.

2.3.1 L/C Applications. The Company shall give notice to the Agent and the
Issuing Bank of the proposed issuance of each Letter of Credit on a Business Day which is at
least three (3) Business Days (or such lesser number of days as the Agent and the Issuing
Bank shall agree in any particular instance in their sole discretion) prior to the proposed
date of issuance of such Letter of Credit. Each such notice shall be accompanied by an L/C
Application, duly executed by the Company and in all respects satisfactory to the Agent and
the Issuing Bank, together with such other documentation as the Agent or the Issuing Bank
may request in support thereof, it being understood that each L/C Application shall specify,
among other things, the date on which the proposed Letter of Credit is to be issued, the
expiration date of such Letter of Credit (which shall not be later than the earlier to occur
of: (x) one (1) year after the date of issuance thereof and (y) thirty (30) days prior to
the scheduled Termination Date) and whether such Letter of Credit is to be transferable in
whole or in part. So long as the Issuing Bank has not received written notice that the
conditions precedent set forth in Section 11 with respect to the issuance of such
Letter of Credit have not been satisfied, the Issuing Bank shall issue such Letter of Credit
on the requested issuance date. The Issuing Bank shall promptly advise the Agent of the issuance of
each Letter of Credit and of any amendment thereto, extension thereof or event or
circumstance changing the amount available for drawing thereunder. In the event of any
inconsistency between the terms of any L/C Application or documents executed pursuant
thereto and the terms of this Agreement, the terms of this Agreement shall control;
provided, as long as LaSalle is the Issuing Bank, the terms of the L/C LaSalle
Master Letter of Credit Agreement shall govern and control in the event of any inconsistency
between the terms of this Agreement and the L/C LaSalle Master Letter of Credit Agreement.

 

17

 

2.3.2 Participations in Letters of Credit. Concurrently with the issuance of
each Letter of Credit, the Issuing Bank shall be deemed to have sold and transferred to each
other Bank, and each other Bank shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Bank, without recourse or warranty, an undivided
interest and participation, to the extent of such other Bank’s Pro Rata Share, in such
Letter of Credit and the Company’s reimbursement obligations with respect thereto. For the
purposes of this Agreement, the unparticipated portion of each Letter of Credit shall be
deemed to be the Issuing Bank’s “participation” therein. The Issuing Bank hereby agrees,
upon request of the Agent or any Bank, to deliver to the Agent or such Bank a list of all
outstanding Letters of Credit issued by the Issuing Bank, together with such information
related thereto as the Agent or such Bank may reasonably request.

2.3.3 Reimbursement Obligations. The Company hereby unconditionally and
irrevocably agrees to reimburse the Issuing Bank for each payment or disbursement made by
the Issuing Bank under any Letter of Credit honoring any demand for payment made by the
beneficiary thereunder, in each case on the date that such payment or disbursement is made.
Any amount not reimbursed on the date of such payment or disbursement shall bear interest
from the date of such payment or disbursement to the date that the Issuing Bank is
reimbursed by the Company therefor, payable on demand, at a rate per annum equal to the Base
Rate from time to time in effect from time to time in effect plus, beginning on the third
Business Day after receipt of notice from the Issuing Bank of such payment or disbursement,
two percent (2%). The Issuing Bank shall notify the Company and the Agent whenever any
demand for payment is made under any Letter of Credit by the beneficiary thereunder;
provided, the failure of the Issuing Bank to so notify the Company shall not affect
the rights of the Issuing Bank or the Banks in any manner whatsoever.

2.3.4 Limitation on Obligations of Issuing Bank. In determining whether to
pay under any Letter of Credit, the Issuing Bank shall not have any obligation to the
Company or any Bank other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and appear to comply on their face with
the requirements of such Letter of Credit. Any action taken or omitted to be taken by the
Issuing Bank under or in connection with any Letter of Credit, if taken or omitted in the
absence of gross negligence and willful misconduct, shall not impose upon the Issuing Bank
any liability to the Company or any Bank and shall not reduce or impair the Company’s
reimbursement obligations set forth in Section 2.3.3 or the obligations of the Banks
pursuant to Section 2.3.5.

 

18

 

2.3.5 Funding by Banks to Issuing Bank. If the Issuing Bank makes any payment
or disbursement under any Letter of Credit and the Company has not reimbursed the Issuing
Bank in full for such payment or disbursement by 11:00 A.M., Chicago time, on the date of
such payment or disbursement, or if any reimbursement received by the Issuing Bank from the
Company is or must be returned or rescinded upon or during any bankruptcy or reorganization
of the Company or otherwise, each other Bank shall be obligated to pay to the Agent for the
account of the Issuing Bank, in full or partial payment of the purchase price of its
participation in such Letter of Credit, its Pro Rata Share of such payment or disbursement
(but no such payment shall diminish the obligations of the Company under Section
2.3.3), and, upon notice from the Issuing Bank, the Agent shall promptly notify each
other Bank thereof. Each other Bank irrevocably and unconditionally agrees to so pay to the
Agent in immediately available funds for the Issuing Bank’s account the amount of such other
Bank’s Pro Rata Share of such payment or disbursement. If and to the extent any Bank shall
not have made such amount available to the Agent by 2:00 P.M., Chicago time, on the Business
Day on which such Bank receives notice from the Agent of such payment or disbursement (it
being understood that any such notice received after noon, Chicago time, on any Business Day
shall be deemed to have been received on the next following Business Day), such Bank agrees
to pay interest on such amount to the Agent for the Issuing Bank’s account forthwith on
demand, for each day from the date such amount was to have been delivered to the Agent to
the date such amount is paid, at a rate per annum equal to: (a) for the first three (3) days
after demand, the Federal Funds Rate from time to time in effect and (b) thereafter, the
Base Rate from time to time in effect. Any Bank’s failure to make available to the Agent
its Pro Rata Share of any such payment or disbursement shall not relieve any other Bank of
its obligation hereunder to make available to the Agent such other Bank’s Pro Rata Share of
such payment, but no Bank shall be responsible for the failure of any other Bank to make
available to the Agent such other Bank’s Pro Rata Share of any such payment or disbursement.

2.4 Commitments Several. The failure of any Bank to make a requested Loan on any
date shall not relieve any other Bank of its obligation (if any) to make a Loan on such date, but
no Bank shall be responsible for the failure of any other Bank to make any Loan to be made by such
other Bank.

2.5 Certain Conditions. Notwithstanding any other provision of this Agreement, no
Bank shall have an obligation to make any Loan, or to permit the continuation of or any conversion
into any LIBOR Loan if: (i) an Event of Default or Unmatured Event of Default exists or (ii) the
last day of the Interest Period for such Loan would be on or past the Termination Date.

2.6 Incremental Loan. Subject to the terms and conditions set forth herein and so
long as no Unmatured Event of Default or Event of Default shall have occurred and then be
continuing, the Borrower shall have the right, but not the obligation, after the date of this
Agreement and ending thirty (30) days prior to the Termination Date, to request a one-time increase
in the Loan Commitment by up to $10,000,000 (the “Incremental Loan Commitment”). The Incremental
Loan Commitment shall be obtained from existing Banks or from other banks, financial institutions
or investment funds, in each case in accordance with the terms set forth below and the Borrower
shall execute such promissory notes as are necessary to reflect the Incremental Loan Commitment.

 

19

 

Borrower shall also provide Agent certified copies of all requisite governmental and
regulatory approvals prior the effectiveness of the Incremental Loan Commitment, together with
legal opinions from outside legal counsel to Borrower opining as to the sufficiency of such
approvals. Participation in the Incremental Loan Commitment shall be offered first to each of the
existing Bank, but neither Agent nor any such Bank shall have any obligation whatsoever to provide
all or any portion of the Incremental Loan Commitment. Each of the existing Banks shall have ten
(10) Business Days following the receipt of the request by Borrower to increase the Loan Commitment
to notify the Agent of their acceptance and, in the event the entire Incremental Loan Commitment
has not been accepted, of their desire to provide additional commitments with respect to such
shortfall. In the event that the Agent has not received commitments from the existing Banks in an
amount not less than the Incremental Loan Commitment within such ten (10) Business Day period, then
the Borrower may invite other banks, financial institutions and investment funds reasonably
acceptable to the Agent to be joined as parties to this Agreement as Banks hereunder with respect
to the portion of such Incremental Loan Commitment not taken within such ten (10) Business Day
period by existing Banks, provided, that, such other banks, financial institutions and investment
funds shall enter into such joinder agreements to give effect thereto as the Agent and the Borrower
may reasonably request.

SECTION 3. NOTES EVIDENCING LOANS.

3.1 Notes. The Loans of each Bank shall be evidenced by a promissory note (each a
“Note”) substantially in the form set forth in Exhibit A, with appropriate insertions,
payable to the order of such Bank in a face principal amount equal to the sum of such Bank’s Pro
Rata Share of the Commitment Amount.

3.2 Recordkeeping. Each Bank shall record in its records, or at its option on the
schedule attached to its Note, the date and amount of each Loan made by such Bank, each repayment
or conversion thereof and, in the case of each LIBOR Loan, the dates on which each Interest Period
for such Loan shall begin and end. The aggregate unpaid principal amount so recorded shall be
rebuttable presumptive evidence of the principal amount owing and unpaid on such Note. The failure
to so record any such amount or any error in so recording any such amount shall not, however, limit
or otherwise affect the obligations of the Company hereunder or under any Note to repay the
principal amount of the Loans evidenced by such Note together with all interest accruing thereon.

3.3 Maturity. The Loan shall mature, and the Company shall repay all unpaid
Obligations in full with respect to the Loan no later than on the Termination Date.

SECTION 4. INTEREST.

4.1 Interest Rates. The Company promises to pay interest on the unpaid principal
amount of each Loan for the period commencing on the date of such Loan until (but not including
such date as) such Loan is paid in full as follows:

(a) at all times while such Loan is a Base Rate Loan, at a rate per annum equal
to the sum of the Base Rate plus the Base Rate Margin applicable to such Loan in
effect from time to time; and

 

20

 

(b) at all times while such Loan is a LIBOR Loan, at a rate per annum equal to
the sum of LIBOR applicable to the Interest Period for such Loan plus the LIBOR
Margin applicable to such Loan in effect from time to time;

provided, at any time an Unmatured Event of Default or Event of Default exists, unless
otherwise agreed by the Required Banks, the interest rate applicable to each Loan shall be equal
the interest rate payable with respect to Base Rate Loans and LIBOR Loans, as applicable, plus, in
each case, an additional two percent (2.00%) per annum, all of which shall be payable on demand.
Additionally, at any time any Unmatured Event of Default or Event of Default exists, all other
amounts, fees and sums owing to the Agent and the Banks under this Agreement and the other Loan
Documents, unless otherwise agreed by the Required Banks, shall bear interest at a rate per annum
equal to the sum of the Base Rate from time to time in effect, plus two percent (2%), all of which
shall be payable on demand.

4.2 Interest Payment Dates. Accrued interest on each Base Rate Loan shall be payable
in arrears on the last day of each calendar quarter and on the Termination Date, as applicable.
Accrued interest on each LIBOR Loan shall be payable on the last day of each Interest Period
relating to such Loan and on the Termination Date, as applicable (and, in the case of a LIBOR Loan
with a six-month Interest Period (or such other longer Interest Period, if any, agreed upon by the
Company and Agent), on the three-month anniversary of the first day of such Interest Period and on
every subsequent three-month anniversary of the first day of such Interest Period (as applicable)).
On and after the Termination Date, accrued interest on all Loans shall be payable on demand.

4.3 Setting and Notice of LIBOR. The applicable LIBOR for each Interest Period shall
be determined by the Agent, and notice thereof shall be given by the Agent promptly to the Company
and each Bank. Each determination of the applicable LIBOR by the Agent shall be conclusive and
binding upon the parties hereto, in the absence of demonstrable error. The Agent shall, upon
written request of the Company or any Bank, deliver to the Company or such Bank a statement showing
the computations used by the Agent in determining any applicable LIBOR hereunder.

4.4 Computation of Interest. Interest on each LIBOR Loan shall be computed for the
actual number of days elapsed (including the day a Loan is made but excluding the day it is repaid)
on the basis of a year of three hundred sixty (360) days. Interest on each Base Rate Loan shall be
computed for the actual number of days elapsed (including the day a Loan is made but excluding the
day it is repaid) on the basis of a year of three hundred sixty-five/three hundred sixty-six
(365/366) days, as applicable. The applicable interest rate for each Base Rate Loan shall change
simultaneously with each change in the Base Rate.

4.5 Maximum Rate of Interest. Anything herein to the contrary notwithstanding, the
obligations of the Company hereunder and under the Notes shall be subject to the limitation that
payments of interest shall not be required, for any period for which interest in computed
hereunder, to the extent (but only to the extent) that contracting for or receiving such payment by
the respective Bank would be contrary to the provisions of any law applicable to such Bank limiting
the highest rate of interest which may be lawfully contracted for, charged or received by such
Bank, and in such event the Company shall pay such Bank interest at the highest rate permitted by
applicable law.

 

21

 

SECTION 5. FEES.

5.1 Commitment Fee. The Company agrees to pay to the Agent for the account of each
Bank a commitment fee, for the period from the Closing Date to the Termination Date, at the
Commitment Fee Rate in effect from time to time of such Bank’s Pro Rata Share (as adjusted from
time to time) of the unused amount of the Commitment Amount; provided, if requested by the
Required Banks, the rate applicable shall be increased by two percent (2%) at any time that an
Event of Default exists. For purposes of calculating usage under this Section, the Commitment
Amount shall be deemed used to the extent of the aggregate principal amount of all Outstandings.
Such commitment fee shall be payable in arrears on the last Business Day of each calendar quarter
and on the Termination Date for any period then ending for which such commitment fee shall not have
previously been paid. The commitment fee shall be computed for the actual number of days elapsed
on the basis of a year of three hundred sixty (360) days.

5.2 Letter of Credit Fees.

(a) The Company agrees to pay to the Agent for the account of each Bank a letter of
credit fee for each Letter of Credit equal to the L/C Fee Rate in effect from time to time
of such Bank’s Pro Rata Share (as adjusted from time to time) of the undrawn amount of such
Letter of Credit (computed for the actual number of days elapsed on the basis of a year of
three hundred sixty (360) days); provided, if requested by the Required Banks, the
rate applicable to each Letter of Credit shall be increased by two percent (2%) at any time
that an Event of Default exists. Such letter of credit fee shall be payable in arrears on
the last day of each calendar quarter and on the Termination Date (or such later date on
which such Letter of Credit expires or is terminated) for the period from the date of the
issuance of each Letter of Credit (or the last day on which the letter of credit fee was
paid with respect thereto) to the date such payment is due or, if earlier, the date on which
such Letter of Credit expired or was terminated.

(b) In addition, with respect to each Letter of Credit, the Company agrees to pay to
the Issuing Bank, for its own account: (i) such fees and expenses as the Issuing Bank
customarily requires in connection with the issuance, negotiation, processing and/or
administration of letters of credit in similar situations and (ii) a letter of credit
fronting fee in the amount and at the times agreed to by the Company and the Issuing Bank.

5.3 Upfront Fees. The Company agrees to pay to the Agent for the account of each
Bank on the Closing Date an upfront fee in the amount of $50,000 (and the Agent agrees to promptly
forward to each Bank a portion of such upfront fee in the amount previously agreed to between the
Agent and such Bank), which fee shall be deemed to be fully-earned and non-refundable on the
Closing Date.

5.4 Agent’s Fees. The Company agrees to pay to the Agent such agent’s fees as are
mutually agreed to from time to time by the Company and the Agent.

SECTION 6. REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT AMOUNT; PREPAYMENTS AND PAYMENTS.

6.1 Reduction or Termination of the Commitment Amount.

 

22

 

6.1.1 Voluntary Reduction or Termination of the Commitment Amount. The
Company may from time to time on at least five (5) Business Days prior written notice
received by the Agent (which shall promptly advise each Bank thereof) permanently reduce the
Commitment Amount to an amount not less than the Outstandings. Any such reduction shall be
in an amount not less than $1,000,000 or a higher integral multiple of $1,000,000.
Concurrently with any reduction of the Commitment Amount to zero ($0), the Company shall pay
all interest on the Loans and all other Obligations and all commitment fees and all letter
of credit fees and shall Cash Collateralize in full all obligations arising with respect to
the Letters of Credit.

6.1.2 Reserved

6.1.3 All Reductions of the Commitment Amount. All reductions of the
Commitment Amount shall reduce the Commitments pro rata among the Banks according to their
respective Pro Rata Shares.

6.2 Prepayments.

6.2.1 Voluntary Prepayments. The Company may from time to time prepay the
Loans in whole or in part; provided, the Company shall give the Agent (which shall
promptly advise each Bank) notice thereof not later than 11:00 A.M., Chicago time, on the
day of such prepayment (which shall be a Business Day), specifying the Loans to be prepaid
and the date and amount of prepayment. Any such partial prepayment shall be in an amount
equal to $100,000 or a higher integral multiple of $100,000. Any amount of Loans which are
voluntarily prepaid may be reborrowed, subject to the conditions contained herein and in the
other Loan Documents for such borrowings.

6.2.2 Mandatory Prepayments.

(a) The Company shall make a prepayment of the Loans upon the occurrence of any
of the following (each a “Mandatory Prepayment Event”) at the following times and in
the following amounts (such applicable amounts being referred to as “Designated
Proceeds”):

(i) concurrently with the receipt by the Company or any Subsidiary of
any Net Cash Proceeds from any Asset Sale, in an amount equal to one hundred
percent (100%) of such Net Cash Proceeds; provided, however, in the
event that, at the time of any such sale, no Event of Default shall exist or
shall result from such sale, the Company may retain up to $3,000,000 in the
aggregate of the Net Cash Proceeds resulting from all such Asset Sales which
have occurred since the Closing Date; provided, further, that if a
mandatory prepayment of the Loans is required pursuant to this
subsection 6.2.2(a)(i), such prepayment shall be applied first, to
the Loans, and second, to any other Obligations;

(ii) concurrently with the receipt by the Company or any Subsidiary of
any Net Cash Proceeds from any issuance of any Debt excluding the proceeds
of Debt permitted by clauses (a) through (i) of Section 10.7), an amount equal to one hundred percent (100%) of such
Net Cash Proceeds, provided, further, that if a mandatory prepayment
of the Loans is required pursuant to this subsection 6.2.2(a)(ii),
such prepayment shall be applied first, to the Loans, and second, to any
other Obligations;

 

23

 

(iii) concurrently upon receipt by the Company or any Subsidiary of the
Company of any Property Loss Proceeds in excess of $3,000,000 in the
aggregate during the term of this Agreement, in an amount equal to such
excess Property Loss Proceeds; provided, the recipient (other than
Agent) of any payment which constitutes Property Loss Proceeds may reinvest
such payment within one hundred eighty (180) days, in replacement assets
comparable to the assets giving rise to such payment; provided,
further, if the Company or its applicable Subsidiary does not intend to
reinvest such payment, or if the time period set forth in this sentence
expires without such Person having reinvested such payment, the Company
shall prepay the Loans in an amount equal to such payment; provided,
further, that if a mandatory prepayment of the Loans is required pursuant to
this subsection 6.2.2(a)(iii), such prepayment shall be applied
first, to the Loans, and second, to any other Obligations; and

(iv) concurrently with the receipt by the Company or any Subsidiary of
the Company (or any Joint Venture) of any proceeds of or relating to any
Existing Claim in an amount greater than or equal to $15,000, whether as a
result of any award, settlement, order, judgment, liquidation or otherwise,
an amount equal to one hundred percent (100%) of such proceeds (or, if
received by such Joint Venture, in an amount at least equal to the Company’s
ownership percentage of such proceeds when, but only when, distributed by
such Joint Venture to the Company or any Subsidiary of the Company);
provided, that if a mandatory prepayment of the Loans is required
pursuant to this subsection 6.2.2(a)(iv), such prepayment shall be
applied first, to the Loans, and second, to any other Obligations.

(b) If on any day on which the Outstandings exceed the Commitment Amount, the
Company shall immediately prepay the Loans and/or Cash Collateralize the outstanding
Letters of Credit, or do a combination of the foregoing, in an amount sufficient to
eliminate such excess.

6.3 Miscellaneous Prepayment Provisions. Any partial prepayment of a Group of LIBOR
Loans shall be subject to the proviso to subsection 2.2.3(a). Any prepayment of a LIBOR
Loan on a day other than the last day of an Interest Period therefor shall include interest on the
principal amount being repaid and shall be subject to Section 8.4.

6.4 Payment of Loans. Each Loan made by each Bank shall be paid in full on the
Termination Date.

 

24

 

SECTION 7. MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.

7.1 Making of Payments. All payments of principal of or interest on the Notes, and
of all fees, shall be made by the Company to the Agent in immediately available funds at the office
specified by the Agent not later than noon, Chicago time, on the date due; and funds received after
that hour shall be deemed to have been received by the Agent on the following Business Day.
Provided that such Bank has made all payments required to be made by it under this Agreement and
the other Loan Documents, the Agent shall promptly remit to each Bank its share of all such
payments received in collected funds by the Agent for the account of such Bank. All payments under
Section 8.1 shall be made by the Company directly to the Bank entitled thereto.

7.2 Application of Certain Payments. Each payment of principal shall be applied to
such Loans as the Company shall direct by notice to be received by the Agent on or before the date
of such payment or, in the absence of such notice, as the Agent shall determine in its discretion.
Concurrently with each remittance to any Bank of its share of any such payment, the Agent shall
advise such Bank as to the application of such payment.

7.3 Due Date Extension. If any payment of principal or interest with respect to any
of the Loans, or of any fees, falls due on a day which is not a Business Day, then such due date
shall be extended to the immediately following Business Day (unless, in the case of a LIBOR Loan,
such immediately following Business Day is the first Business Day of a calendar month, in which
case such due date shall be the immediately preceding Business Day) and, in the case of principal,
additional interest shall accrue and be payable for the period of any such extension.

7.4 Setoff. The Company agrees that the Agent and each Bank have all rights of
set-off and bankers’ lien provided by applicable law, and in addition thereto, the Company agrees
that at any time any Event of Default exists, the Agent and each Bank may apply to the payment of
any obligations of the Company hereunder, whether or not then due, any and all balances, credits,
deposits, accounts or moneys of the Company then or thereafter with the Agent or such Bank.

7.5 Proration of Payments. If any Bank shall obtain any payment or other recovery
(whether voluntary, involuntary, by application of offset or otherwise, but excluding any payment
pursuant to Section 8.7 or 14.9 and payments of interest on any Affected Loan) on
account of principal of or interest on any Loan in excess of its pro rata share of payments and
other recoveries obtained by all Banks on account of principal of and interest on the Loans then
held by them, such Bank shall purchase from the other Banks such participations in the Loans held
by them as shall be necessary to cause such purchasing Bank to share the excess payment or other
recovery ratably with each of them; provided, if all or any portion of the excess payment
or other recovery is thereafter recovered from such purchasing Bank, the purchase shall be
rescinded and the purchase price restored to the extent of such recovery.

7.6 Taxes. All payments of principal of, and interest on, the Loans and all other
amounts payable hereunder shall be made free and clear of and without deduction for any present or
future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, excluding franchise taxes
and taxes imposed on or measured by any Bank’s net income or receipts (all non-excluded items being
called “Taxes”). If any withholding or deduction from any payment to be made by the Company
hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then
the Company will:

 

25

 

(a) pay directly to the relevant authority the full amount required to be so withheld
or deducted;

(b) promptly forward to the Agent an official receipt or other documentation
satisfactory to the Agent evidencing such payment to such authority; and

(c) pay to the Agent for the account of the Banks such additional amount as is
necessary to ensure that the net amount actually received by each Bank will equal the full
amount such Bank would have received had no such withholding or deduction been required.

Moreover, if any Taxes are directly asserted against the Agent or any Bank with respect to any
payment received by the Agent or such Bank hereunder, the Agent or such Bank may pay such Taxes and
the Company will promptly pay such additional amount (including any penalty, interest or expense)
as is necessary in order that the net amount received by such Person after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount such Person would have
received had such Taxes not been asserted.

If the Company fails to pay any Taxes when due to the appropriate taxing authority or fails to
remit to the Agent, for the account of the respective Banks, the required receipts or other
required documentary evidence, the Company shall indemnify the Banks for any incremental Taxes,
interest or penalties that may become payable by any Bank as a result of any such failure. For
purposes of this Section 7.6, a distribution hereunder by the Agent or any Bank to or for
the account of any Bank shall be deemed a payment by the Company.

Each Bank that: (a) is organized under the laws of a jurisdiction other than the United States
of America or a state thereof and (b)(i) is a party hereto on the Closing Date or (ii) becomes an
assignee of an interest under this Agreement under Section 14.9.1 after the Closing Date
(unless such Bank was already a Bank hereunder immediately prior to such assignment) shall execute
and deliver to the Company and the Agent one or more (as the Company or the Agent may reasonably
request) United States Internal Revenue Service Form W8EC or Form W8BEN or such other forms or
documents, appropriately completed, as may be applicable to establish that such Bank is exempt from
withholding or deduction of Taxes. The Company shall not be required to pay additional amounts to
any Bank pursuant to this Section 7.6 to the extent that the obligation to pay such
additional amounts would not have arisen but for the failure of such Bank to comply with this
paragraph.

SECTION 8. INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS.

8.1 Increased Costs.

(a) If, after the date hereof, the adoption of, or any change in, any
applicable law, rule or regulation, or any change in the interpretation or
administration of any applicable law, rule or regulation by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or any LIBOR Office of such Bank)
with any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:

 

26

 

(i) shall subject any Bank (or any LIBOR Office of such Bank) to any
tax, duty or other charge with respect to its LIBOR Loans, its Note or its
obligation to make LIBOR Loans, or shall change the basis of taxation of
payments to any Bank of the principal of or interest on its LIBOR Loans or
any other amounts due under this Agreement in respect of its LIBOR Loans or
its obligation to make LIBOR Loans (except for changes in the rate of tax on
the overall net income of such Bank or its LIBOR Office imposed by the
jurisdiction in which such Bank’s principal executive office or LIBOR Office
is located);

(ii) shall impose, modify or deem applicable any reserve (including any
reserve imposed by the FRB, but excluding any reserve included in the
determination of interest rates pursuant to Section 4), special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by any Bank (or any LIBOR Office of such
Bank); or

(iii) shall impose on any Bank (or its LIBOR Office) any other
condition affecting its LIBOR Loans, its Note or its obligation to make
LIBOR Loans;

and the result of any of the foregoing is to increase the cost to (or to impose a
cost on) such Bank (or any LIBOR Office of such Bank) of making or maintaining any
LIBOR Loan, or to reduce the amount of any sum received or receivable by such Bank
(or its LIBOR Office) under this Agreement or under its Note with respect thereto,
then upon demand by such Bank (which demand shall be accompanied by a statement
setting forth the basis for such demand and a calculation of the amount thereof in
reasonable detail, a copy of which shall be furnished to the Agent), the Company
shall pay directly to such Bank such additional amount as will compensate such Bank
for such increased cost or such reduction.

(b) If any Bank shall reasonably determine that any change in, or the adoption
or phase-in of, any applicable law, rule or regulation regarding capital adequacy,
or any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank or any Person controlling such
Bank with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such Bank’s or such
controlling Person’s capital as a consequence of such Bank’s obligations hereunder
or under any Letter of Credit to a level below that which such Bank or such
controlling Person could have achieved but for such change, adoption,
phase-in or compliance (taking into consideration such Bank’s or such
controlling Person’s policies with respect to capital adequacy) by an amount deemed
by such Bank or such controlling Person to be material, then from time to time, upon
demand by such Bank (which demand shall be accompanied by a statement setting forth
the basis for such demand and a calculation of the amount thereof in reasonable
detail, a copy of which shall be furnished to the Agent), the Company shall pay to
such Bank such additional amount as will compensate such Bank or such controlling
Person for such reduction.

 

27

 

8.2 Basis for Determining Interest Rate Inadequate or Unfair. If with respect to any
Interest Period:

(a) deposits in Dollars (in the applicable amounts) are not being offered to
the Agent in the interbank eurodollar market for such Interest Period, or the Agent
otherwise reasonably determines (which determination shall be binding and conclusive
on the Company) that by reason of circumstances affecting the interbank eurodollar
market adequate and reasonable means do not exist for ascertaining the applicable
LIBOR; or

(b) Banks having aggregate Pro Rata Shares of forty percent (40%) or more
advise the Agent that LIBOR as determined by the Agent will not adequately and
fairly reflect the cost to such Banks of maintaining or funding LIBOR Loans for such
Interest Period (taking into account any amount to which such Banks may be entitled
under Section 8.1) or that the making or funding of LIBOR Loans has become
impracticable as a result of an event occurring after the date of this Agreement
which in the opinion of such Banks materially affects such Loans;

then the Agent shall promptly notify the other parties thereof and, so long as such circumstances
shall continue: (i) no Bank shall be under any obligation to make or convert into LIBOR Loans and
(ii) on the last day of the current Interest Period for each LIBOR Loan, such Loan shall, unless
then repaid in full, automatically convert to a Base Rate Loan.

8.3 Changes in Law Rendering LIBOR Loans Unlawful. If any change in, or the adoption
of any new, law, rule or regulation, or any change in the interpretation of any applicable law,
rule or regulation by any governmental or other regulatory body charged with the administration
thereof, should make it (or in the good faith judgment of any Bank cause a substantial question as
to whether it is) unlawful for any Bank to make, maintain or fund LIBOR Loans, then such Bank shall
promptly notify each of the other parties hereto and, so long as such circumstances shall continue:
(a) such Bank shall have no obligation to make or convert into LIBOR Loans (but shall make Base
Rate Loans concurrently with the making of or conversion into LIBOR Loans by the Banks which are
not so affected, in each case in an amount equal to the amount of LIBOR Loans which would be made
or converted into by such Bank at such time in the absence of such circumstances) and (b) on the
last day of the current Interest Period for each LIBOR Loan of such Bank (or, in any event, on such
earlier date as may be required by the relevant law, regulation or interpretation), such LIBOR Loan
shall, unless then repaid in full, automatically convert to a Base Rate Loan. Each Base Rate Loan
made by a Bank which, but for the circumstances described in the foregoing sentence, would be a
LIBOR Loan (an “Affected Loan”) shall remain outstanding for the same period as the Group of
LIBOR Loans of which such Affected Loan would be a part absent such circumstances.

 

28

 

8.4 Funding Losses. The Company hereby agrees that upon demand by any Bank (which
demand shall be accompanied by a statement setting forth the basis for the amount being claimed, a
copy of which shall be furnished to the Agent), the Company will indemnify such Bank against any
net loss or expense which such Bank may sustain or incur (including any net loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such
Bank to fund or maintain any LIBOR Loan), as reasonably determined by such Bank, as a result of:
(a) any payment, prepayment or conversion of any LIBOR Loan of such Bank on a date other than the
last day of an Interest Period for such Loan (including any conversion pursuant to Section
8.3) or (b) any failure of the Company to borrow, prepay, convert or continue any Loan on a
date specified therefor in a notice of borrowing, prepayment, conversion or continuation pursuant
to this Agreement. For this purpose, all notices to the Agent pursuant to this Agreement shall be
deemed to be irrevocable.

8.5 Right of Banks to Fund through Other Offices. Each Bank may, if it so elects,
fulfill its commitment as to any LIBOR Loan by causing a foreign branch or Affiliate of such Bank
to make such Loan; provided, in such event for the purposes of this Agreement such Loan
shall be deemed to have been made by such Bank and the obligation of the Company to repay such Loan
shall nevertheless be to such Bank and shall be deemed held by it, to the extent of such Loan, for
the account of such branch or Affiliate.

8.6 Discretion of Banks as to Manner of Funding. Notwithstanding any provision of
this Agreement to the contrary, each Bank shall be entitled to fund and maintain its funding of all
or any part of its Loans in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder shall be made as if such Bank had actually
funded and maintained each LIBOR Loan during each Interest Period for such Loan through the
purchase of deposits having a maturity corresponding to such Interest Period and bearing an
interest rate equal to the LIBOR for such Interest Period.

8.7 Mitigation of Circumstances; Replacement of Banks.

(a) Each Bank shall promptly notify the Company and the Agent of any event of
which it has knowledge which will result in, and will use reasonable commercial
efforts available to it (and not, in such Bank’s sole judgment, otherwise
disadvantageous to such Bank) to mitigate or avoid: (i) any obligation by the
Company to pay any amount pursuant to Section 7.6 or 8.1 or (ii) the
occurrence of any circumstances described in Section 8.2 or 8.3
(and, if any Bank has given notice of any such event described in clause (i)
or (ii) above and thereafter such event ceases to exist, such Bank shall
promptly so notify the Company and the Agent). Without limiting the foregoing, each
Bank will designate a different funding office if such designation will avoid (or
reduce the cost to the Company of) any event described in clause (i) or
(ii) of the preceding sentence and such designation will not, in such Bank’s
sole judgment, be otherwise disadvantageous to such Bank.

 

29

 

(b) If the Company becomes obligated to pay additional amounts to any Bank
pursuant to Section 7.6 or 8.1, or any Bank gives notice of the
occurrence of any circumstances described in Section 8.2 or 8.3, the Company
may designate another bank which is acceptable to the Agent and the Issuing Bank in
their reasonable discretion (such other bank being called a “Replacement Bank”) to
purchase the Loans of such Bank and such Bank’s rights hereunder, without recourse
to or warranty by, or expense to, such Bank, for a purchase price equal to the
outstanding principal amount of the Loans payable to such Bank plus any accrued but
unpaid interest on such Loans and all accrued but unpaid fees owed to such Bank and
any other amounts payable to such Bank under this Agreement, and to assume all the
obligations of such Bank hereunder, and, upon such purchase and assumption (pursuant
to an Assignment Agreement), such Bank shall no longer be a party hereto or have any
rights hereunder (other than rights with respect to indemnities and similar rights
applicable to such Bank prior to the date of such purchase and assumption) and shall
be relieved from all obligations to the Company hereunder, and the Replacement Bank
shall succeed to the rights and obligations of such Bank hereunder.

8.8 Conclusiveness of Statements; Survival of Provisions. Determinations and
statements of any Bank pursuant to Section 8.1, 8.2, 8.3 or 8.4
shall be conclusive absent demonstrable error. Banks may use reasonable averaging and attribution
methods in determining compensation under Sections 8.1 and 8.4, and the provisions
of such Sections shall survive repayment of the Loans, expiration or termination of the Letters of
Credit, cancellation of the Notes, and termination of this Agreement.

SECTION 9. WARRANTIES.

To induce the Agent and the Banks to enter into this Agreement and to induce the Banks to make
Loans and to issue or participate in Letters of Credit, the Company warrants to the Agent and the
Banks that:

9.1 Organization. The Company is a corporation validly existing and in good standing
under the laws of the State of Montana; each Subsidiary is validly existing and in good standing
under the laws of the jurisdiction of its organization; and each of the Company and each Subsidiary
is duly qualified to do business in each jurisdiction where, because of the nature of its
activities or properties, such qualification is required, except for such jurisdictions where the
failure to so qualify would not have a Material Adverse Effect.

9.2 Authorization; No Conflict. Each of the Company and each other Loan Party is
duly authorized to execute and deliver each Loan Document to which it is a party, the Company is
duly authorized to borrow monies hereunder and each of the Company and each other Loan Party is
duly authorized to perform its obligations under each Loan Document to which it is a party. The
execution, delivery and performance by the Company of this Agreement and by each of the Company and
each other Loan Party of each Loan Document to which it is a party, and the borrowings by the
Company hereunder, do not and will not: (a) require any consent or approval of any governmental
agency or authority (other than any consent or approval which has been obtained and is in full
force and effect), (b) conflict with: (i) any provision of law, (ii) the charter, bylaws or other
organizational documents of the Company or any other Loan Party or (iii) any agreement, indenture,
instrument or other document, or any judgment, order or decree, which is binding upon the Company
or any other Loan Party or any of their respective properties or (c) require, or result in, the creation or
imposition of any Lien on any asset of the Company, any Subsidiary or any other Loan Party. In
addition to and not in limitation of the foregoing, each of the Montana Public Service Commission
(the “Montana Commission”) and the Wyoming Public Service Commission (the “Wyoming Commission”) has
entered one or more orders authorizing the execution and delivery of this Credit Agreement.

 

30

 

9.3 Validity and Binding Nature. Each of this Agreement and each other Loan Document
to which the Company or any other Loan Party is a party is the legal, valid and binding obligation
of such Person, enforceable against such Person in accordance with its terms, subject to
bankruptcy, insolvency and similar laws affecting the enforceability of creditors’ rights generally
and to general principles of equity.

9.4 Financial Condition. The audited consolidated financial statements of the
Company and its Subsidiaries as at June 30, 2006 and the unaudited consolidated financial
statements of the Company and its Subsidiaries for the nine (9) months ending as of March 31, 2007,
copies of each of which have been delivered to each Bank, were prepared in accordance with GAAP
(subject, in the case of such unaudited statements, to the absence of footnotes and to normal
year-end adjustments) and present fairly the consolidated financial condition of the Company and
its Subsidiaries as at such dates and the results of their operations for the periods then ended.

9.5 No Material Adverse Change. Except as set forth on Schedule 9.5, since
June 30, 2006, there has been no material adverse change in the financial condition, operations,
assets, business, properties or prospects of the Company and its Subsidiaries taken as a whole.

9.6 Litigation and Contingent Liabilities. No litigation (including derivative
actions), arbitration proceeding or governmental investigation or proceeding is pending or, to the
Company’s knowledge, threatened against the Company or any Subsidiary which might reasonably be
expected to have a Material Adverse Effect, except as set forth in Schedule 9.6. Other
than any liability incident to such litigation or proceedings, neither the Company nor any
Subsidiary has any material contingent liabilities not listed on Schedule 9.6 or permitted
by Section 10.7.

9.7 Ownership of Properties; Liens. Each of the Company and each Subsidiary owns
good title and, in the case of real property, good and marketable fee, leasehold or easement (as
applicable) title to all of its properties and assets, real and personal, tangible and intangible,
of any nature whatsoever (including patents, trademarks, trade names, service marks and
copyrights), free and clear of all Liens, charges and claims (including infringement claims with
respect to patents, trademarks, service marks, copyrights and the like) except as permitted by
Section 10.8.

9.8 Subsidiaries. As of the Closing Date, the Company has no Subsidiaries other than
those listed on Schedule 9.8.

9.9 Pension Plans.

(a) During the period of twelve (12) consecutive months prior to the date of
the execution and delivery of this Agreement or the making of any Loan, (i) no steps
have been taken to terminate any Pension Plan and (ii) no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien under
Section 302(f) of ERISA. No condition exists or event or transaction has occurred
with respect to any Pension Plan which could result in the incurrence by the
Company of any material liability, fine or penalty.

 

31

 

(b) All contributions (if any) have been made to any Multiemployer Pension Plan
that are required to be made by the Company or any other member of the Controlled
Group under the terms of the plan or of any collective bargaining agreement or by
applicable law; neither the Company nor any member of the Controlled Group has
withdrawn or partially withdrawn from any Multiemployer Pension Plan, incurred any
withdrawal liability with respect to any such plan or received notice of any claim
or demand for withdrawal liability or partial withdrawal liability from any such
plan, and no condition has occurred which, if continued, might result in a
withdrawal or partial withdrawal from any such plan; and neither the Company nor any
member of the Controlled Group has received any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions may be required to
avoid a reduction in plan benefits or the imposition of any excise tax, that any
such plan is or has been funded at a rate less than that required under Section 412
of the Code, that any such plan is or may be terminated, or that any such plan is or
may become insolvent.

9.10 Investment Company Act. Neither the Company nor any Subsidiary is an
“investment company” or a company “controlled” by an “investment company,” within the meaning of
the Investment Company Act of 1940.

9.11 Status Under Certain Statutes. Neither the Company nor any Subsidiary is a
“holding company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a
“holding company” or of a “subsidiary company” of a “holding company,” within the meaning of the
Public Utility Holding Company Act of 2005. Neither the Company nor any Subsidiary is subject to
regulation under the Investment Company Act of 1940, as amended, the ICC Termination Act, as
amended, or the Federal Power Act, as amended. The Company is a public utility as defined in the
statutes of the States of Montana and Wyoming and has the legal right to function and operate as a
natural gas utility in the States of Montana and Wyoming.

9.12 Regulation U. The Company is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of purchasing or carrying
Margin Stock.

9.13 Taxes. Each of the Company and each Subsidiary has filed all tax returns and
reports required by law to have been filed by it and has paid all taxes and governmental charges
thereby shown to be owing, except any such taxes or charges which are being diligently contested in
good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall
have been set aside on its books.

9.14 Solvency, etc. On the Closing Date, and immediately prior to and after giving
effect to each each issuance of a Letter of Credit and borrowing hereunder and the use of the
proceeds thereof: (a) the Company’s and each other Loan Party’s assets will exceed its liabilities
and (b) the Company and each other Loan Party will be Solvent.

 

32

 

9.15 Environmental Matters.

(a) No Violations. Except as set forth on Schedule 9.15,
neither the Company nor any Subsidiary, nor any operator of the Company’s or any
Subsidiary’s properties, is in violation, or alleged violation, of any judgment,
decree, order, law, permit, license, rule or regulation pertaining to Environmental
Matters, including those arising under the Resource Conservation and Recovery Act
(“RCRA”), the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986 or any
other Environmental Law which: (i) in any single case, requires expenditures in any
three (3) year period of $50,000 or more by the Company and its Subsidiaries in
penalties and/or for investigative, removal or remedial actions or (ii) individually
or in the aggregate otherwise might reasonably be expected to have a Material
Adverse Effect.

(b) Notices. Except as set forth on Schedule 9.15 and for
matters arising after the Closing Date, in each case none of which could singly or
in the aggregate be expected to have a Material Adverse Effect, neither the Company
nor any Subsidiary has received notice from any third party, including any Federal,
state or local governmental authority: (i) that any one (1) of them has been
identified by the U.S. Environmental Protection Agency as a potentially responsible
party under CERCLA with respect to a site listed on the National Priorities List, 40
C.F.R. Part 300 Appendix B; (ii) that any hazardous waste, as defined by 42 U.S.C.
§6903(5), any hazardous substance as defined by 42 U.S.C. §9601(14), any pollutant
or contaminant as defined by 42 U.S.C. §9601(33) or any toxic substance, oil or
hazardous material or other chemical or substance regulated by any Environmental Law
(all of the foregoing, “Hazardous Substances”) which any one (1) of them has
generated, transported or disposed of has been found at any site at which a Federal,
state or local agency or other third party has conducted a remedial investigation,
removal or other response action pursuant to any Environmental Law; (iii) that the
Company or any Subsidiary must conduct a remedial investigation, removal, response
action or other activity pursuant to any Environmental Law; or (iv) of any
Environmental Claim.

(c) Handling of Hazardous Substances. Except as set forth on
Schedule 9.15: (i) no portion of the real property or other assets of the
Company or any Subsidiary has been used for the handling, processing, storage or
disposal of Hazardous Substances except in accordance in all material respects with
applicable Environmental Laws; and no underground tank or other underground storage
receptacle for Hazardous Substances is located on such properties; (ii) in the
course of any activities conducted by the Company, any Subsidiary or the operators
of any real property of the Company or any Subsidiary, no Hazardous Substances have
been generated or are being used on such properties except in accordance in all
material respects with applicable Environmental Laws; (iii) there have been no
unpermitted or unauthorized Releases or threatened Releases of Hazardous Substances
on, upon, into or from any real property or other assets of the Company or any
Subsidiary, which Releases singly or in the aggregate might reasonably be expected to have a
Material Adverse Effect on the value of such real property or assets; (iv) there
have been no Releases on, upon, from or into any real property in the vicinity of
the real property or other assets of the Company or any Subsidiary which, through
soil or groundwater contamination, may have come to be located on, and which might
reasonably be expected to have a Material Adverse Effect on the value of, the real
property or other assets of the Company or any Subsidiary; and (v) any Hazardous
Substances generated by the Company and its Subsidiaries have been transported
offsite only by properly licensed carriers and delivered, to the knowledge of the
Company and its Subsidiaries, only to treatment or disposal facilities maintaining
valid permits as required under applicable Environmental Laws, which transporters
and facilities, to the knowledge of the Company and its Subsidiaries, have been and
are operating in compliance in all material respects with such permits and
applicable Environmental Laws.

 

33

 

9.16 Reserved.

9.17 Insurance. Set forth on Schedule 9.17 is a complete and accurate
summary of the property and casualty insurance program of the Company and its Subsidiaries as of
the Closing Date (including the names of all insurers, policy numbers, expiration dates, amounts
and types of coverage, annual premiums, deductibles, self-insured retention, and a description in
reasonable detail of any self-insurance program, retrospective rating plan, fronting arrangement or
other risk assumption arrangement involving the Company or any Subsidiary).

9.18 Real Property. Set forth on Schedule 9.18 is a complete and accurate
list, as of the Closing Date, of the addresses of all real property held through fee ownership,
leasehold or easement title by the Company or any Subsidiary.

9.19 Information. All information heretofore or contemporaneously herewith furnished
in writing by the Company or any other Loan Party to the Agent or any Bank for purposes of or in
connection with this Agreement and the transactions contemplated hereby is, and all written
information hereafter furnished by or on behalf of the Company or any Subsidiary to the Agent or
any Bank pursuant hereto or in connection herewith will be, true and accurate in every material
respect on the date as of which such information is dated or certified, and none of such
information is or will be incomplete by omitting to state any material fact necessary to make such
information not misleading in light of the circumstances under which made (it being recognized by
the Agent and the Banks that any projections and forecasts provided by the Company are based on
good faith estimates and assumptions believed by the Company to be reasonable as of the date of the
applicable projections or assumptions and that actual results during the period or periods covered
by any such projections and forecasts may differ from projected or forecasted results).

9.20 Intellectual Property. The Company and each Subsidiary owns and possesses or
has a license or other right to use all patents, patent rights, trademarks, trademark rights, trade
names, trade name rights, service marks, service mark rights and copyrights as are necessary for
the conduct of the business of the Company and its Subsidiaries, without any infringement upon
rights of others which could reasonably be expected to have a Material Adverse Effect.

 

34

 

9.21 Burdensome Obligations. Neither the Company nor any Subsidiary is a party to
any agreement or contract or subject to any corporate or partnership restriction which might
reasonably be expected to have a Material Adverse Effect.

9.22 Labor Matters. Except as set forth on Schedule 9.22, neither the
Company nor any Subsidiary is subject to any labor or collective bargaining agreement. There are
no existing or threatened strikes, lockouts or other labor disputes involving the Company or any
Subsidiary that singly or in the aggregate could reasonably be expected to have a Material Adverse
Effect. Hours worked by and payment made to employees of the Company and its Subsidiaries are not
in violation of the Fair Labor Standards Act or any other applicable law, rule or regulation
dealing with such matters.

9.23 No Default. No Event of Default or Unmatured Event of Default exists or would
result from the incurring by the Company of any Debt hereunder or under any other Loan Document.

9.24 Foreign Assets Control Regulations and Anti-Money Laundering.

(a) OFAC. Neither the Company nor any of its Subsidiaries: (i) 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)); (ii) engages in any dealings or transactions
prohibited by Section 2 of such executive order, or is otherwise associated with any
such Person in any manner violative of Section 2; or (iii) 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.

(b) Patriot Act. The Company and each of its Subsidiaries are in compliance,
in all material respects, with the Patriot Act. 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.

9.25 Capitalization. Schedule 9.25 sets forth the authorized equity
securities of each Loan Party as of the date hereof. All issued and outstanding equity securities
of each Loan Party are duly authorized and validly issued, fully paid, non-assessable, and, other
than with respect to the capital stock of the Company, free and clear of all Liens. All such
securities were issued in compliance with all applicable state and federal laws concerning the
issuance of securities. All of the issued and outstanding equity securities of each Loan Party
(other than the Company) are owned in the amounts and by the Persons as set forth in such
Schedule 9.25. Except as otherwise set forth on Schedule 9.25, there are no
pre-emptive or other outstanding rights, options, warrants, conversion rights or other similar
agreements or understandings for the purchase or acquisition of any equity securities in any such
entity.

 

35

 

SECTION 10. COVENANTS.

Until the expiration or termination of the Commitments and thereafter until all obligations of
the Company hereunder and under the other Loan Documents are paid in full, the Company agrees that,
unless at any time the Required Banks shall otherwise expressly consent in writing, it will:

10.1 Reports, Certificates and Other Information. Furnish to the Agent and each
Bank:

10.1.1 Annual Report. Promptly when available and in any event within ninety
(90) days after the close of each Fiscal Year, a copy of the annual audit report of the
Company and its Subsidiaries for such Fiscal Year, including therein consolidated balance
sheets and statements of earnings and cash flows of the Company and its Subsidiaries as at
the end of such Fiscal Year, certified without qualification by Hein & Associates LLP or
other independent auditors of recognized standing selected by the Company and reasonably
acceptable to the Required Banks, together with: (i) a written statement from such
accountants to the effect that in making the examination necessary for the signing of such
annual audit report by such accountants, nothing came to their attention that caused them to
believe that the Company was not in compliance with any provision of Section 10.6,
10.7, 10.9 or 10.10 of this Agreement insofar as such provision
relates to accounting matters or, if something has come to their attention that caused them
to believe that the Company was not in compliance with any such provision, describing such
non-compliance in reasonable detail and (ii) a comparison with the budget for such Fiscal
Year and a comparison with the previous Fiscal Year.

10.1.2 Interim Reports. Promptly when available and in any event within forty
five (45) days after the end of each Fiscal Quarter (except the last Fiscal Quarter of each
Fiscal Year), consolidated balance sheets of the Company and its Subsidiaries as of the end
of such Fiscal Quarter, together with consolidated statements of earnings and cash flows for
such Fiscal Quarter and for the period beginning with the first day of such Fiscal Year and
ending on the last day of such Fiscal Quarter, together with a comparison with the
corresponding period of the previous Fiscal Year and a comparison with the budget for such
period of the current Fiscal Year, certified by a Responsible Officer of the Company.

10.1.3 Compliance Certificates. Contemporaneously with the furnishing of a
copy of each annual audit report pursuant to Section 10.1.1 and each set of
quarterly statements pursuant to Section 10.1.2, a duly completed compliance
certificate in the form of Exhibit B, with appropriate insertions, dated the date of
such annual report or such quarterly statements and signed by a Responsible Officer of the
Company, containing a computation of each of the financial ratios and restrictions set forth
in Section 10.6 and a statement to the effect that such officer has not become aware
of any Event of Default or Unmatured Event of Default that has occurred and is continuing
or, if there is any such event, describing it and the steps, if any, being taken to cure it.

10.1.4 Reports to the SEC and to Shareholders. Promptly upon the filing or
sending thereof, copies of all regular, periodic or special reports of the Company or any
Subsidiary filed with the SEC; copies of all registration statements of the Company or any
Subsidiary filed with the SEC (other than on Form S-8); and copies of all proxy
statements or other communications made to security holders generally.

 

36

 

10.1.5 Notice of Default, Litigation and ERISA Matters. Promptly upon
becoming aware of any of the following, written notice describing the same and the steps
being taken by the Company or the Subsidiary affected thereby with respect thereto:

(a) the occurrence of an Event of Default or an Unmatured Event of Default;

(b) any litigation, arbitration or governmental investigation or proceeding not
previously disclosed by the Company to the Banks which has been instituted or, to
the knowledge of the Company, is threatened against the Company or any Subsidiary or
to which any of the properties of any thereof is subject which might reasonably be
expected to have a Material Adverse Effect;

(c) the institution of any steps by any member of the Controlled Group or any
other Person to terminate any Pension Plan, or the failure of any member of the
Controlled Group to make a required contribution to any Pension Plan (if such
failure is sufficient to give rise to a Lien under Section 302(f) of ERISA) or to
any Multiemployer Pension Plan, or the taking of any action with respect to a
Pension Plan which could result in the requirement that the Company furnish a bond
or other security to the PBGC or such Pension Plan, or the occurrence of any event
with respect to any Pension Plan or Multiemployer Pension Plan which could result in
the incurrence by any member of the Controlled Group of any material liability, fine
or penalty (including any claim or demand for withdrawal liability or partial
withdrawal from any Multiemployer Pension Plan), or any material increase in the
contingent liability of the Company with respect to any post-retirement welfare plan
benefit, or any notice that any Multiemployer Pension Plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan benefits
or the imposition of an excise tax, that any such plan is or has been funded at a
rate less than that required under Section 412 of the Code, that any such plan is or
may be terminated, or that any such plan is or may become insolvent;

(d) any cancellation or material change in any insurance maintained by the
Company or any Subsidiary; or

(e) any other event (including: (i) any violation of any Environmental Law or
the assertion of any Environmental Claim or (ii) the enactment or effectiveness of
any law, rule or regulation) which might reasonably be expected to have a Material
Adverse Effect.

10.1.6 Reserved.

10.1.7 Management Reports. Promptly upon the request of the Agent or any
Bank, copies of all detailed financial and management reports submitted to the Company by
independent auditors in connection with each annual or interim audit made by such auditors
of the books of the Company.

 

37

 

10.1.8 Projections. As soon as practicable, and in any event within thirty
(30) days after approval by the board of directors thereof, financial projections for the
Company and its Subsidiaries for the next Fiscal Year (including an operating budget and a
capital budget) prepared in a manner consistent with the projections delivered by the
Company to the Banks prior to the Closing Date or otherwise in a manner reasonably
satisfactory to the Agent, accompanied by a certificate of a Responsible Officer of the
Company on behalf of the Company to the effect that: (i) such projections were prepared by
the Company in good faith, (ii) the Company has a reasonable basis for the assumptions
contained in such projections and (iii) such projections have been prepared in accordance
with such assumptions.

10.1.9 Subordinated Debt and Private Placement Notes Documents. Promptly from
time to time, copies of any notices (including notices of default or acceleration) received
from any holder or trustee of, under or with respect to any Private Placement Notes Debt or
Subordinated Debt.

10.1.10 Reserved.

10.1.11 Other Information. Promptly from time to time, such other information
concerning the Company and its Subsidiaries as any Bank or the Agent may reasonably request.

10.2 Books, Records and Inspections. Keep, and cause each Subsidiary to keep, its
books and records in accordance with sound business practices sufficient to allow the preparation
of financial statements in accordance with GAAP; permit, and cause each Subsidiary to permit, any
Bank or the Agent or any representative thereof to inspect the properties and operations of the
Company or such Subsidiary; and permit, and cause each Subsidiary to permit, at any reasonable time
and with reasonable notice (or at any time without notice if an Event of Default exists), any Bank
or the Agent or any representative thereof to visit any or all of its offices, to discuss its
financial matters with its officers and its independent auditors (and the Company hereby authorizes
such independent auditors to discuss such financial matters with any Bank or the Agent or any
representative thereof), and to examine (and, at the expense of the Company or the applicable
Subsidiary, photocopy extracts from) any of its books or other records. All such inspections by
the Agent shall be at the Company’s expense.

10.3 Maintenance of Property; Insurance.

(a) Keep, and cause each Subsidiary to keep, all property useful and necessary
in the business of the Company or such Subsidiary in good working order and
condition, ordinary wear and tear excepted.

(b) Maintain, and cause each Subsidiary to maintain, with responsible insurance
companies, such insurance as may be required by any law or governmental regulation
or court decree or order applicable to it and such other insurance, to such extent
and against such hazards and liabilities, as is customarily maintained by companies
similarly situated, but which shall insure against all risks and liabilities of the
type identified on Schedule 9.17 and shall have insured amounts no less
than, and deductibles no higher than, those set forth on such schedule; and, upon
request of the Agent or any Bank, furnish to the Agent or such Bank a certificate
setting forth in reasonable detail the nature and extent of all insurance maintained by the
Company and its Subsidiaries.

 

38

 

10.4 Compliance with Laws; Payment of Taxes and Liabilities.

(a) Comply, and cause each Subsidiary to comply, in all material respects with
all applicable laws, rules, regulations, decrees, orders, judgments, licenses and
permits, except where failure to comply could not reasonably be expected to have a
Material Adverse Effect; and

(b) Pay, and cause each Subsidiary to pay, prior to delinquency, all taxes and
other governmental charges against it or any of its property, as well as claims of
any kind which, if unpaid, might become a Lien on any of its property;
provided the foregoing shall not require the Company or any Subsidiary to
pay any such tax or charge so long as it shall contest the validity thereof in good
faith by appropriate proceedings and shall set aside on its books adequate reserves
with respect thereto in accordance with GAAP.

10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject to
Section 10.11) cause each Subsidiary to maintain and preserve: (a) its existence and good
standing in the jurisdiction of its organization and (b) its qualification to do business and good
standing in each jurisdiction where the nature of its business makes such qualification necessary
(except in those instances in which the failure to be qualified or in good standing does not have a
Material Adverse Effect).

10.6 Financial Covenants.

10.6.1 Interest Coverage Ratio. Not permit the Interest Coverage Ratio for
any Computation Period to be less than 2.00 to 1.00 as of the last day of any Fiscal
Quarter.

10.6.2 Total Debt to Capital Ratio. Not permit the Total Debt to Capital
Ratio as of the last day of any Fiscal Quarter to exceed 0.65 to 1.00.

10.7 Limitations on Debt. Not, and not permit any Subsidiary to, create, incur,
assume or suffer to exist any Debt, except:

(a) obligations under this Agreement and the other Loan Documents;

(b) Debt secured by Liens permitted by subsection 10.8(d), and
extensions, renewals and refinancings thereof; provided that the aggregate
amount of all such Debt at any time outstanding shall not exceed $500,000;

(c) Debt of Subsidiaries to the Company; provided, however, (i) in no
event shall the Debt of Resources to the Company, when taken together with all
capital contributions and other distributions of the Company or any of its
Subsidiaries other than Resources made to, as well as all Investments by such
Persons in, Resources from and after the Closing Date, exceed $3,000,000 in the
aggregate at any time, and (ii) any Debt of Bangor Gas and Frontier Energy to any
Loan Party shall be evidenced by an effective intercompany promissory note in form and substance
reasonably satisfactory to Agent;

 

39

 

(d) unsecured Debt of the Company to Subsidiaries;

(e) (i) Subordinated Debt; and (ii) Private Placement Notes Debt;

(f) Hedging Obligations incurred for bona fide hedging purposes and not for
speculation, provided, that any such Hedging Obligations shall be pursuant
to Hedging Agreement entered into by the Company or any of its Subsidiaries with
one or more of the Banks party hereto, provided further, that if all
of the Banks fail to offer the Company or its Subsidiaries (as applicable) a market
rate with respect to any proposed Hedging Agreement, the Company or its Subsidiaries
(as applicable) may enter into such a Hedging Agreement on an unsecured basis with a
third party, and on terms, reasonably satisfactory to Agent;

(g) Debt described on Schedule 10.7 and any extension, renewal or
refinancing thereof so long as the principal amount thereof is not increased;

(h) other Debt, in addition to the Debt listed above, in an aggregate amount
not at any time exceeding $1,000,000.

10.8 Liens. Not, and not permit any Subsidiary to, create or permit to exist any
Lien on any of its real or personal properties, assets or rights of whatsoever nature (whether now
owned or hereafter acquired), except:

(a) Liens for taxes or other governmental charges not at the time delinquent or
thereafter payable without penalty or being contested in good faith by appropriate
proceedings and, in each case, for which it maintains adequate reserves;

(b) Liens arising in the ordinary course of business (such as: (i) Liens of
carriers, warehousemen, mechanics and materialmen and other similar Liens imposed by
law and (ii) Liens incurred in connection with worker’s compensation, unemployment
compensation and other types of social security (excluding Liens arising under
ERISA) or in connection with surety bonds, bids, performance bonds and similar
obligations) for sums not overdue or being contested in good faith by appropriate
proceedings and not involving any deposits or advances or borrowed money or the
deferred purchase price of property or services and, in each case, for which it
maintains adequate reserves;

(c) Liens described on Schedule 10.8;

(d) subject to the limitation set forth in subsection 10.7(b): (i)
Liens arising in connection with Capital Leases (and attaching only to the property
being leased), (ii) Liens existing on property at the time of the acquisition
thereof by the Company or any Subsidiary (and not created in contemplation of such
acquisition) and (iii) Liens that constitute purchase money security interests on
any property securing debt incurred for the purpose of financing all or any part of
the cost of acquiring such property; provided, any such Lien attaches to
such property within sixty (60) days of the acquisition thereof and attaches solely to the property
so acquired;

 

40

 

(e) attachments, appeal bonds, judgments and other similar Liens, for sums not
exceeding $250,000 arising in connection with court proceedings, provided,
execution or other enforcement of such Liens is effectively stayed and the claims
secured thereby are being actively contested in good faith and by appropriate
proceedings;

(f) easements, rights of way, restrictions, minor defects or irregularities in
title and other similar Liens not interfering in any material respect with the
ordinary conduct of the business of the Company or any Subsidiary;

(g) reserved;

(h) any other Liens securing Debt which do not exceed an aggregate amount of
$1,000,000; and

(i) the replacement, extension or renewal of any Lien permitted by clauses
(c) or (h) above upon or in the same property theretofore subject
thereto arising out of the extension, renewal or replacement of the Debt secured
thereby (without increase in the amount thereof).

10.9 Operating Leases. Not permit the aggregate amount of all rental payments under
Operating Leases made (or scheduled to be made) by the Company and its Subsidiaries (on a
consolidated basis) to exceed $500,000 in any Fiscal Year.

10.10 Restricted Payments. Not, and not permit any Subsidiary to: (a) make any
distribution to any of its shareholders, (b) purchase or redeem any of its capital stock or other
equity interests or any warrants, options or other rights in respect thereof, (c) pay any
management fees or similar fees to any of its shareholders or any Affiliate thereof, (d) make any
redemption, prepayment, defeasance or repurchase of any Private Placement Notes Debt, other than at
regularly-scheduled times (without giving effect to mandatory prepayment, acceleration or similar
provisions), or (e) set aside funds for any of the foregoing. Notwithstanding the foregoing (i)
any Subsidiary may pay dividends or make other distributions to the Company or to a Wholly-Owned
Subsidiary (other than to Bangor Gas and Frontier Energy) and the Company may declare and pay
dividends once each Fiscal Quarter to its shareholders if and solely to the extent: (x) such
payment, when added to all other such payments made pursuant to this clause (i) and all
payments made pursuant to clause (ii) below during the sixty (60) months immediately
preceding the month in which such dividend is declared and paid, will not exceed seventy five
percent (75%) of the Consolidated Net Income for the sixty (60) months immediately preceding the
month in which such dividend is declared and paid; (y) no Unmatured Event of Default or Event of
Default has occurred or would occur after giving effect to such dividend; and (z) after giving
effect to the declaration and payment of such dividend, the Company is in compliance with the
financial covenants set forth in Section 10.6, as computed for the most recent Fiscal Quarter for
which financial statements have been (and are required to be) delivered hereunder; and (ii) the
Borrower may purchase or redeem a portion of its capital stock or other equity interests or any
warrants, options or other rights in respect thereof, if and solely to the extent: (x) such
payment, when added to all other such payments made pursuant to this clause (ii)
and all payments made pursuant to clause (i) above during the sixty (60) months
immediately preceding the month in which such purchase or redemption is declared and paid, will not
exceed seventy five percent (75%) of the Consolidated Net Income for the sixty (60) months
immediately preceding the month in which such purchase or redemption is declared and paid; (y) no
Unmatured Event of Default or Event of Default has occurred or would occur after giving effect to
such purchase or redemption; and (z) after giving effect to the declaration and payment of such
purchase or redemption, the Company is in compliance with the financial covenants set forth in
Section 10.6, as computed for the most recent Fiscal Quarter for which financial statements have
been (and are required to be) delivered hereunder.

 

41

 

10.11 Mergers, Consolidations, Sales. Not, and not permit any Subsidiary to, be a
party to any merger or consolidation, sell all or substantially all assets or any stock of any
class of, or any partnership or joint venture or other equity interest in, any such Person, or,
except in the ordinary course of its business, sell, transfer, convey or lease all or any
substantial part of its assets, or sell or assign with or without recourse any receivables, except
for: (a) any such merger, consolidation, sale, transfer, conveyance, lease or assignment of or by
any Wholly-Owned Subsidiary (other than Bangor Gas, Frontier Energy and Resources) into the Company
or into, with or to any other Wholly-Owned Subsidiary (other than Bangor Gas, Frontier Energy and
Resources); (b) any such purchase or other acquisition by the Company or any Wholly-Owned
Subsidiary (other than Bangor Gas, Frontier Energy and Resources) of the assets or stock of any
Wholly-Owned Subsidiary (other than Bangor Gas, Frontier Energy and Resources); and (c) sales and
dispositions of assets (including the stock of Subsidiaries) for at least fair market value (as
determined by the Board of Directors of the Company) so long as the net book value of all assets
sold or otherwise disposed of in any Fiscal Year (other than Inventory sold in the ordinary course
of business and in accordance with past practices) does not exceed five percent (5%) of the net
book value of the consolidated assets of the Company and its Subsidiaries as of the last day of the
preceding Fiscal Year; provided, however, if and solely to the extent (i) such disposition
or dispositions are conducted pursuant to documentation in form and substance reasonably
satisfactory to the Agent, (ii) the proceeds of such disposition are applied as a mandatory
prepayment against the Loans in the manner required by the terms of the Credit Agreement, and (iii)
no Unmatured Default or Event of Default is then existing or shall arise as a result thereof.

10.12 Modification of Organizational Documents. Not permit the Certificate or
Articles of Incorporation, Bylaws or other organizational documents of the Company or any
Subsidiary to be amended or modified in any way which might reasonably be expected to materially
adversely affect the interests of the Banks.

10.13 Use of Proceeds. Use the proceeds of the Loans solely to finance working
capital needs and other general corporate purposes of the Company and its Subsidiaries; and in no
event use or permit any proceeds of any Loan to be used, either directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of “purchasing or carrying” any Margin Stock.

10.14 Further Assurances. Take, and cause each Subsidiary to take, such actions as
are necessary or as the Agent or the Required Banks may reasonably request from time to time
(including the execution and delivery of guaranties) to ensure that the obligations of the Company
hereunder and under the other Loan Documents are guaranteed by all of its Subsidiaries (including,
promptly upon the acquisition or creation thereof, any Subsidiary acquired or created after
the date hereof) by execution of a counterpart of the Guaranty.

 

42

 

10.15 Transactions with Affiliates. Not, and not permit any Subsidiary to, enter
into, or cause, suffer or permit to exist any transaction, arrangement or contract with any of its
other Affiliates (other than the Company and its Subsidiaries) which is on terms that are less
favorable than are obtainable from any Person which is not one of its Affiliates.

10.16 Employee Benefit Plans. Maintain, and cause each Subsidiary to maintain, each
Pension Plan in substantial compliance with all applicable requirements of law and regulations.

10.17 Environmental Matters.

(a) If any Release or Disposal of Hazardous Substances shall occur or shall
have occurred on any real property or any other assets of the Company or any
Subsidiary, the Company shall, or shall cause the applicable Subsidiary to, cause
the prompt containment and removal of such Hazardous Substances and the remediation
of such real property or other assets as necessary to comply with all Environmental
Laws and to preserve the value of such real property or other assets. Without
limiting the generality of the foregoing, the Company shall, and shall cause each
Subsidiary to, comply with any valid Federal or state judicial or administrative
order requiring the performance at any real property of the Company or any
Subsidiary of activities in response to the Release or threatened Release of a
Hazardous Substance.

(b) To the extent that the transportation of “hazardous waste” as defined by
RCRA is permitted by this Agreement, the Company shall, and shall cause its
Subsidiaries to, dispose of such hazardous waste only at licensed disposal
facilities operating in compliance with Environmental Laws.

10.18 Unconditional Purchase Obligations. Not, and not permit any Subsidiary to,
enter into or be a party to any contract for the purchase of materials, supplies or other property
or services if such contract requires that payment be made by it regardless of whether delivery is
ever made of such materials, supplies or other property or services, other than contracts entered
into in the ordinary course of business and in accordance with past practices.

10.19 Inconsistent Agreements. Not, and not permit any Subsidiary to, enter into any
agreement containing any provision which would: (a) be violated or breached by any borrowing by the
Company hereunder or by the performance by the Company or any Subsidiary of any of its obligations
hereunder or under any other Loan Document, or (b) create or permit to exist or become effective
any encumbrance or restriction on the ability of any Subsidiary to: (i) pay dividends or make other
distributions to the Company or any other applicable Subsidiary, or pay any Debt owed to the
Company or any other Subsidiary, (ii) make loans or advances to the Company or (iii) transfer any
of its assets or properties to the Company.

10.20 Business Activities. Not, and not permit any Subsidiary to, engage in any line
of business other than the businesses engaged in on the date hereof and businesses reasonably
related thereto.

 

43

 

10.21 Investments. Not, and not permit any Subsidiary to, make or permit to exist
any Investment in any other Person, or maintain any master, operating, disbursement, payroll, petty
cash, deposit, checking, savings, money market investments, certificates of deposits, securities or
any other account with any Person, except (without duplication) the following:

(a) contributions by the Company to the capital of any of its Subsidiaries
(other than Bangor Gas and Frontier Energy), or by any such Subsidiary to the
capital of any of its Subsidiaries (other than Bangor Gas and Frontier Energy);
provided, however, in no event shall the amount of all capital contributions
and other distributions of the Company and its Subsidiaries other than Resources
made to, as well as all Investments by such Persons in, Resources from and after the
Closing Date, when taken together with the amount of Debt of Resources to the
Company and its Subsidiaries other than Resources outstanding, exceed $3,000,000 in
the aggregate at any time;

(b) in the ordinary course of business, Investments by the Company in any
Subsidiary or by any Subsidiary in the Company, by way of intercompany loans,
advances or guaranties, all to the extent permitted by Section 10.7;
provided, however, in no event shall the amount of all capital contributions
and other distributions of the Company and its Subsidiaries other than Resources
made to, as well as all Investments by such Persons in, Resources from and after the
Closing Date, when taken together with the amount of Debt of Resources to the
Company and its Subsidiaries other than Resources outstanding, exceed $3,000,000 in
the aggregate at any time;

(c) Suretyship Liabilities permitted by Section 10.7;

(d) Cash Equivalent Investments;

(e) bank deposits in the ordinary course of business; provided, the
aggregate amount of all such deposits (excluding amounts in payroll accounts) which
are maintained with any bank other than a Bank shall not exceed $500,000 for any
period of three (3) consecutive days;

(f) Investments in securities of account debtors received pursuant to any plan
of reorganization or similar arrangement upon the bankruptcy or insolvency of such
account debtors;

(g) Investments listed on Schedule 10.21;

(h) Permitted Acquisitions; and

(i) equity Investments in a Person (other than the Company or its Subsidiaries)
by the Company or any of its Subsidiaries (other than Bangor Gas, Frontier Energy or
Resources) representing less than fifty percent (50%) of the outstanding equity
capital of such Person; provided, (1) such Person is in the same line of business as
the Company and (2) such Investment does not constitute a Joint Venture;

 

44

 

provided; in no event shall the aggregate amount of all such Investments, including,
without limitation, Permitted Acquisitions, in any Fiscal Year exceed twenty five percent (25%) of
Borrower’s net worth as of the last day of Borrower’s most recently completed Fiscal Year;
provided, further: (x) any Investment which when made complies with the
requirements of the definition of the term “Cash Equivalent Investment” may continue to be held
notwithstanding that such Investment if made thereafter would not comply with such requirements;
(y) no Investment otherwise permitted by clause (b), (c), or (g) shall be
permitted to be made if, immediately before or after giving effect thereto, any Event of Default or
Unmatured Event of Default exists.

10.22 Restriction of Amendments to Certain Documents. Not amend or otherwise modify,
or waive any rights under, any of the Subordinated Debt Documents or the Private Placement Notes
Documents without the prior written consent of Agent and the Banks, which consent shall be given in
their sole discretion.

10.23 Fiscal Year. Not change its Fiscal Year without giving Agent at least thirty
(30) days prior written notice thereof.

10.24 Cancellation of Debt. Not, and not permit any Subsidiary to (i) cancel any
claim or debt owing to it, except for reasonable consideration or in the ordinary course of
business, and except for the cancellation of debts, or (ii) cancel, settle or otherwise waive any
rights in respect of any Existing Claim except any settlement or waiver determined by the Company
or such Subsidiary to be advantageous to or in the best interests of the Company or such Subsidiary
in its reasonable business judgment.

10.25 Foreign Subsidiaries. Anything contained in this Agreement to the contrary
notwithstanding, not, and not permit any Subsidiary to, invest, create or otherwise permit to exist
any Subsidiary that is not organized, formed or existing under the laws of a State of the United
Sates.

10.26 Reserved.

10.27 Reserved.

10.28 OFAC, Etc. Neither the Company nor any of its Subsidiaries: (a) will become a
Person whose property or interests in property are 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) will engage in any dealings or transactions prohibited by Section 2 of such
executive order, or be otherwise associated with any such Person in any manner volatile of such
Section 2; or (c) will otherwise become a Person on the list of Specially Designated Nationals and
Blocked Persons or subject to the limitations or prohibitions under any other OFAC regulation or
executive order.

10.29 Negative Pledges. Except as a result of the Loan Documents or the Private
Placement Notes Documents, Borrower shall not and shall not permit or cause any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any
consensual restriction or encumbrance of any kind on the ability of Borrower or any such Subsidiary
to pay dividends or make any other distribution on Borrower’s or any of such Subsidiary’s equity
securities or to pay fees or make other payments and distributions to Borrower. Borrower shall not
and shall not permit or cause any of its Subsidiaries to, directly or indirectly, enter into,
assume or become subject to any contract or agreement containing any anti-assignment clause, except in
connection with any document or instrument governing Liens related to purchase money Debt and
Capital Leases which, in each case, otherwise constitute permitted Liens.

 

45

 

10.30 Post-Closing Obligations. Notwithstanding the conditions precedent set forth
in Section 11 below, Borrower has informed Agent and the Banks that certain of such items
required to be delivered to Agent as conditions precedent to the effectiveness of this Agreement
will not be delivered to Agent as of the date hereof. Therefore, with respect to the items set
forth below (the “Outstanding Items”), and notwithstanding anything to the contrary contained
herein or in any other Loan Document, the Borrower shall deliver each Outstanding Item to Agent in
the form, manner and time set forth below for such Outstanding Item:

(a) Within three (3) Business Days after the Closing Date, Borrower shall
deliver or cause to be delivered to Agent an opinion of law by Brunenkant & Cross,
LLP replacing that certain legal opinion dated as of June 20, 2007 issued by
Brunenkant & Cross, LLP to Agent and reflecting such modifications requested by, and
otherwise being in form and substance satisfactory to Agent; and

(b) Within sixty (60) days after the Closing Date, Borrower shall deliver to
Agent an opinion of law by legal counsel acceptable to Agent with respect to certain
Wyoming state regulatory matters affecting Borrower and each of its Subsidiaries in
form and substance satisfactory to Agent.

SECTION 11. EFFECTIVENESS; CONDITIONS OF LENDING, ETC.

The obligation of each Bank to make its Loans and of the Issuing Bank to issue Letters of
Credit is subject to the following conditions precedent:

11.1 Initial Credit Extension. The obligation of the Banks to make any initial Loans
and of the Issuing Bank to issue any initial Letters of Credit (whichever comes first) is, in
addition to the conditions precedent specified in Section 11.2, subject to the conditions
precedent that the Agent shall have received all of the following, each duly executed and dated the
Closing Date (or such earlier date as shall be satisfactory to the Agent), in form and substance
satisfactory to the Agent (and the date on which all such conditions precedent have been satisfied
or waived in writing by the Agent and the Required Banks is called the “Closing Date”):

11.1.1 Notes. The Notes.

11.1.2 Resolutions. Certified copies of resolutions of the Board of Directors
of the Company authorizing the execution, delivery and performance by the Company of this
Agreement, the Notes and the other Loan Documents to which the Company is a party; and
certified copies of resolutions of the Board of Directors of each other Loan Party
authorizing the execution, delivery and performance by such Loan Party of each Loan Document
to which such entity is a party.

11.1.3 Consents, etc. Certified copies of all documents evidencing any
necessary corporate or partnership action, consents and governmental approvals (if any)
required for the execution, delivery and performance by the Company and each other Loan Party of the
documents referred to in this Section 11.

 

46

 

11.1.4 Incumbency and Signature Certificates. A certificate of the Secretary
or an Assistant Secretary (or other appropriate representative) of each Loan Party
certifying the names of the officer or officers of such entity authorized to sign the Loan
Documents to which such entity is a party, together with a sample of the true signature of
each such officer (it being understood that the Agent and each Bank may conclusively rely on
each such certificate until formally advised by a like certificate of any changes therein).

11.1.5 Guaranty. A counterpart of the Guaranty executed by each Subsidiary of
the Company other than Bangor and Frontier.

11.1.6 Reserved.

11.1.7 Reserved.

11.1.8 Opinions of Counsel. Written opinions of law of counsel to the Company
and its Subsidiaries, all in form and substance and covering such subject matter as is
satisfactory to Agent and its counsel and dated as of the Closing Date.

11.1.9 Insurance. Evidence satisfactory to the Agent of the existence of
insurance required to be maintained pursuant to subsection 10.3(b).

11.1.10 Copies of Documents. Copies, in form and substance satisfactory to
Agent and the Banks and certified by the Secretary of the Company, of: (a) the Private
Placement Notes Documents, (b) (i) audited consolidated financial statements for the Fiscal
Year ended June 30, 2006, and (ii) unaudited financial statements for the Fiscal Quarters
ended September 30, 2006, December 31, 2006 and March 31, 2007, and (c) projected summary
income statements as well as cash flow and shareholders’ equity projections for each Fiscal
Year through the Fiscal Year ending June 30, 2010 (the “Forecasts”). The Forecasts shall be
presented on a pro forma basis to include such adjustments as are necessary to give effect
to the consummation of the financings contemplated hereby as if such transactions had
already occurred, consistent in all material respects with the sources and uses of cash as
previously described to the Banks and the forecasts previously provided to the Banks
prepared by the Company. The Agent and the Banks acknowledge the Forecasts (x) are based on
good faith estimates and assumptions made by the management of the Company, it being
recognized, however, that forecasts and projections as to future events are not to be viewed
as facts and that the actual results during the period or periods covered by the Forecasts
may differ from the projected and forecast results and that the differences may be material,
and (y) are confidential and non-public information, and (z) are furnished separately for
the information of the Agent and the Banks and are not made part of this Agreement.

11.1.11 Payment of Fees. Evidence of payment by the Company of all accrued
and unpaid fees, costs and expenses to the extent then due and payable on the Closing Date,
together with all Attorney Costs of the Agent to the extent invoiced prior to the Closing
Date plus such additional amounts of Attorney Costs as shall constitute the Agent’s
reasonable estimate of Attorney Costs incurred or to be incurred by the Agent through the
closing proceedings; provided, such estimate shall not thereafter preclude final
settling of accounts between the Company and the Agent.

 

47

 

11.1.12 Solvency Certificate. A Solvency Certificate, substantially in the
form provided and approved by Agent, executed by a Responsible Officer of the Company.

11.1.13 Reserved.

11.1.14 Search Results; Lien Terminations. To the extent required by the
Agent, certified copies of search reports certified by a party acceptable to the Agent,
dated a date reasonably near to the Closing Date, listing all effective financing statements
which name the Company and each Subsidiary (under their present names and any previous
names) as debtors, together with: (i) copies of such financing statements, (ii) executed
copies of proper UCC termination statements, if any, necessary to release all Liens and
other rights of any Person in any Property of the Loan Parties (other than Liens permitted
by Section 10.8) and (iii) such other UCC termination statements as the Agent may
reasonably request.

11.1.15 Reserved.

11.1.16 Closing Certificate. A certificate signed by a Responsible Officer of
the Company dated as of the Closing Date, affirming the matters set forth in Section
11.2.1 as of the Closing Date.

11.1.17 Reserved.

11.1.18 Certificate, Consents and Permits. Evidence satisfactory to the Agent
that: (i) all necessary governmental, regulatory, creditor, shareholder, partner and other
material consents, approvals and exemptions required to be obtained by the Company in
connection with the execution, delivery and performance by the Company and its Subsidiaries
under this Agreement and the other Loan Documents have been duly obtained and are in full
force and effect and (ii) all material permits necessary for the operation of the business
have been obtained.

11.1.19 Other. Such other documents as the Agent or any Bank may reasonably
request.

11.2 Conditions. The obligation of each Bank to make each Loan and of the Issuing
Bank to issue each Letter of Credit is subject to the following further conditions precedent that:

11.2.1 Compliance with Warranties, No Default, etc. Both before and after
giving effect to any borrowing and any issuance of a Letter of Credit, the following
statements shall be true and correct:

(a) the representations and warranties of the Company and each Subsidiary set
forth in this Agreement and the other Loan Documents shall be true and correct in
all material respects with the same effect as if then made (except to the extent
stated to relate to a specific earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date) and, in any event,
except as set forth on Schedule 9.5, since June 30, 2006, there has been no
material adverse change in the financial condition, operations, assets, business, properties or
prospects of the Company and its Subsidiaries taken as a whole; and

 

48

 

(b) no Event of Default or Unmatured Event of Default shall have then occurred
and be continuing.

11.2.2 Confirmatory Certificate. If requested by the Agent or any Bank, the
Agent shall have received (in sufficient counterparts to provide one to each Bank) a
certificate dated the date of such requested Loan or issuance of a Letter of Credit and
signed by a duly authorized representative of the Company as to the matters set out in
Section 11.2.1 (it being understood that each request by the Company for the making
of a Loan or issuance of a Letter of Credit shall be deemed to constitute a warranty by the
Company that the conditions precedent set forth in Section 11.2.1 will be satisfied
at the time of the making of such Loan or issuance of such Letter of Credit), together with
such other documents as the Agent or any Bank may reasonably request in support thereof.

SECTION 12. EVENTS OF DEFAULT AND THEIR EFFECT.

12.1 Events of Default. Each of the following shall constitute an Event of Default
under this Agreement:

12.1.1 Non-Payment of the Loans, etc. Default in the payment when due of the
principal of any Loan; or default, and continuance thereof for five (5) days, in the payment
when due of any interest, fee, reimbursement obligation with respect to any other amount
payable by the Company hereunder or under any other Loan Document.

12.1.2 Defaults Regarding Other Debt. Any default or event of default shall
occur under the terms applicable to: (a) the Subordinated Debt or the Private Placement
Notes Debt; or (b) any other Debt of the Company or any Subsidiary in an aggregate amount
(for all such Debt so affected) exceeding $100,000 and such default shall: (i) consist of
the failure to pay such Debt when due, whether by acceleration or otherwise, or (ii)
accelerate the maturity of such Debt or permit the holder or holders thereof, or any trustee
or agent for such holder or holders, to cause such Debt to become due and payable (or
require the Company or any Subsidiary to purchase or redeem such Debt) prior to its
expressed maturity.

12.1.3 Other Material Obligations. Default in the payment when due, or in the
performance or observance of, any material obligation of, or condition agreed to by, the
Company or any Subsidiary with respect to any of the Subordinated Debt, the Private
Placement Notes Debt or any material purchase or lease of goods or services, in each such
case where such default, singly or in the aggregate with all other such defaults, might
reasonably be expected to have a Material Adverse Effect.

12.1.4 Bankruptcy, Insolvency, etc. The Company or any Subsidiary becomes
insolvent or generally fails to pay, or admits in writing its inability or refusal to pay,
debts as they become due; or the Company or any Subsidiary applies for, consents to, or
acquiesces in the appointment of a trustee, receiver or other custodian for the Company or
such Subsidiary or any property thereof, or makes a general assignment for the benefit of
creditors; or, in the absence of such application, consent or acquiescence, a trustee,
receiver or other custodian is appointed for the Company or any Subsidiary or for a substantial part of the property
of any thereof and is not discharged within 60 days; or any bankruptcy, reorganization, debt
arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any
dissolution or liquidation proceeding, is commenced in respect of the Company or any
Subsidiary, and if such case or proceeding is not commenced by the Company or such
Subsidiary, it is consented to or acquiesced in by the Company or such Subsidiary, or
remains for 30 days undismissed; or the Company or any Subsidiary takes any action to
authorize, or in furtherance of, any of the foregoing.

 

49

 

12.1.5 Non-Compliance with Loan Documents.

(a) Failure by the Company to comply with or to perform any covenant set forth
in Section 10 of this Agreement; or

(b) failure by the Company to comply with or to perform any other provision of
this Agreement or any other Loan Document (and not constituting an Event of Default
under any other provision of this Section 12) and continuance of such
failure described in this clause (b) for thirty (30) days.

12.1.6 Warranties. Any warranty made by the Company or any Subsidiary herein
or any other Loan Document is breached or is false or misleading in any material respect, or
any schedule, certificate, financial statement, report, notice or other writing furnished by
the Company or any Subsidiary to the Agent or any Bank in connection herewith is false or
misleading in any material respect on the date as of which the facts therein set forth are
stated or certified.

12.1.7 Pension Plans. (i) Institution of any steps by the Company or any
other Person to terminate a Pension Plan if as a result of such termination the Company
could be required to make a contribution to such Pension Plan, or could incur a liability or
obligation to such Pension Plan, in excess of $25,000; (ii) a contribution failure occurs
with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of
ERISA; or (iii) there shall occur any withdrawal or partial withdrawal from a Multiemployer
Pension Plan and the withdrawal liability (without unaccrued interest) to Multiemployer
Pension Plans as a result of such withdrawal (including any outstanding withdrawal liability
that the Company and the Controlled Group have incurred on the date of such withdrawal)
exceeds $25,000.

12.1.8 Judgments. Final judgments which exceed an aggregate of $250,000 shall
be rendered against the Company or any Subsidiary and shall not have been paid, discharged
or vacated or had execution thereof stayed pending appeal within thirty (30) days after
entry or filing of such judgments.

12.1.9 Invalidity of Guaranty, etc. The Guaranty shall cease to be in full
force and effect with respect to any Subsidiary; or any Subsidiary (or any Person by,
through or on behalf of such Subsidiary) shall contest in any manner the validity, binding
nature or enforceability of the Guaranty with respect to such Subsidiary.

12.1.10 Reserved.

 

50

 

12.1.11 Invalidity of Subordination Provisions, etc. Any subordination
provision in any document or instrument governing Subordinated Debt, or any subordination
provision in any guaranty by any Subsidiary of any Subordinated Debt, shall cease to be in
full force and effect, or the Company or any other Person (including the holder of any
applicable Subordinated Debt) shall contest in any manner the validity, binding nature or
enforceability of any such provision.

12.1.12 Change of Control. The occurrence of any Change of Control.

12.1.13 Reserved.

12.1.14 Material Adverse Effect. The occurrence of any event having a
Material Adverse Effect.

12.1.15 Reserved.

12.1.16 Non Monetary Judgments. Any non monetary judgment, order or decree
shall be rendered against any Loan Party which does or could reasonably be expected to have
a Material Adverse Effect, and there shall be any period of thirty (30) consecutive days
during which a stay of enforcement of such judgment or order, by reason of a pending appeal
or otherwise, shall not be in effect.

12.2 Effect of Event of Default. If any Event of Default described in Section
12.1.4 shall occur, the Commitments (if they have not theretofore terminated) shall immediately
terminate and the Loans and all other obligations hereunder shall become immediately due and
payable and the Company shall become immediately obligated to Cash Collateralize all Letters of
Credit, all without presentment, demand, protest or notice of any kind; and, if any other Event of
Default shall occur and be continuing, the Agent (upon written request of the Required Banks) shall
declare the Commitments (if they have not theretofore terminated) to be terminated and/or declare
all Loans and all other obligations hereunder to be due and payable and/or demand that the Company
immediately Cash Collateralize all Letters of Credit, whereupon the Commitments (if they have not
theretofore terminated) shall immediately terminate and/or all Loans and all other obligations
hereunder shall become immediately due and payable and/or the Company shall immediately become
obligated to Cash Collateralize all Letters of Credit, all without presentment, demand, protest or
notice of any kind. The Agent shall promptly advise the Company of any such declaration, but
failure to do so shall not impair the effect of such declaration. Notwithstanding the foregoing,
the effect as an Event of Default of any event described in Section 12.1.1 or Section
12.1.4 may be waived by the written concurrence of all of the Banks, and the effect as an Event
of Default of any other event described in this Section 12 may be waived by the written
concurrence of the Required Banks. Any cash collateral delivered hereunder shall be held by the
Agent (without liability for interest thereon) and applied to Obligations arising in connection
with any drawing under a Letter of Credit. After the expiration or termination of all Letters of
Credit, such cash collateral shall be applied by the Agent to any remaining obligations hereunder
and any excess shall be delivered to the Company or as a court of competent jurisdiction may elect.

12.3 Attorney-in-Fact. The Company hereby irrevocably makes, constitutes and
appoints the Agent (and any officer of the Agent or any Person designated by the Agent for that
purpose) as the Company’s true and lawful proxy and attorney-in-fact (and agent-in-fact) in the
Company’s name, place and stead, with full power of substitution, to (i) take such actions as are
permitted in this Agreement and the other Loan Documents, and (ii) carry out any remedy provided
for in this Agreement. The Company hereby acknowledges that the constitution and appointment of
such proxy and attorney-in-fact are coupled with an interest and are irrevocable. The Company
hereby ratifies and confirms all that said attorney-in-fact may do or cause to be done by virtue of
any provision of this Agreement.

 

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SECTION 13. THE AGENT.

13.1 Appointment and Authorization.

(a) Each Bank hereby irrevocably (subject to Section 13.9) appoints, designates and
authorizes the Agent to take such action on its behalf under the provisions of this Agreement and
each other Loan Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent shall not have any
duty or responsibility except those expressly set forth herein, nor shall the Agent have or be
deemed to have any fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other
Loan Document or otherwise exist against the Agent.

(b) The Issuing Bank shall act on behalf of the Banks with respect to any Letters of Credit
issued by it and the documents associated therewith. The Issuing Bank shall have all of the
benefits and immunities: (i) provided to the Agent in this Section 13 with respect to any
acts taken or omissions suffered by the Issuing Bank in connection with Letters of Credit issued by
it or proposed to be issued by it and the applications and agreements for letters of credit
pertaining to such Letters of Credit as fully as if the term “Agent”, as used in this Section
13, included the Issuing Bank with respect to such acts or omissions and (ii) as additionally
provided in this Agreement with respect to the Issuing Bank.

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

13.3 Liability of Agent. None of the Agent nor any of its directors, officers,
employees or agents shall: (i) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct), or (ii) be
responsible in any manner to any of the Banks for any recital, statement, representation or
warranty made by the Company or any Subsidiary or Affiliate of the Company, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any certificate, report, statement
or other document referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of
the Company or any other party to any Loan Document to perform its obligations hereunder or thereunder. The Agent shall not
be under any obligation to any Bank to ascertain or to inquire as to the observance or performance
of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document,
or to inspect the properties, books or records of the Company or any of the Company’s Subsidiaries
or Affiliates.

 

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13.4 Reliance by Agent. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent. The Agent shall be
fully justified in failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the Required Banks as it deems
appropriate and, if it so requests, confirmation from the Banks of their obligation to indemnify
the Agent against any and all liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Required Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.

13.5 Notice of Default. The Agent shall not be deemed to have knowledge or notice of
the occurrence of any Event of Default or Unmatured Event of Default except with respect to
defaults in the payment of principal, interest and fees required to be paid to the Agent for the
account of the Banks, unless the Agent shall have received written notice from a Bank or the
Company referring to this Agreement, describing such Event of Default or Unmatured Event of Default
and stating that such notice is a “notice of default.” The Agent will notify the Banks of its
receipt of any such notice. The Agent shall take such action with respect to such Event of Default
or Unmatured Event of Default as may be requested by the Required Banks in accordance with
Section 12; provided, unless and until the Agent has received any such request, the
Agent may (but shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Event of Default or Unmatured Event of Default as it shall deem advisable or
in the best interest of the Banks.

13.6 Credit Decision. Each Bank acknowledges that the Agent has not made any
representation or warranty to it, and that no act by the Agent hereafter taken, including any
review of the affairs of the Company and its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Agent to any Bank. Each Bank represents to the Agent that it
has, independently and without reliance upon the Agent and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and creditworthiness of the Company
and its Subsidiaries, and made its own decision to enter into this Agreement and to extend credit
to the Company hereunder. Each Bank also represents that it will, independently and without
reliance upon the Agent and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals and decisions in taking or not
taking action under this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Company. Except for notices, reports and other documents expressly
herein required to be furnished to the Banks by the Agent, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information concerning the business,
prospects, operations, property, financial or other condition or creditworthiness of the Company
which may come into the possession of the Agent.

 

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13.7 Indemnification. Whether or not the transactions contemplated hereby are
consummated, the Banks shall indemnify upon demand the Agent and its directors, officers, employees
and agents (to the extent not reimbursed by or on behalf of the Company and without limiting the
obligation of the Company to do so), pro rata, from and against any and all Indemnified Liabilities
(as defined in Section 14.13); provided, no Bank shall be liable for any payment to any
such Person of any portion of the Indemnified Liabilities resulting from such Person’s gross
negligence or willful misconduct. Without limitation of the foregoing, each Bank shall reimburse
the Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including
Attorney Costs) incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the
extent that the Agent is not reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive repayment of the Loans, expiration or termination of the
Letters of Credit, cancellation of the Notes, termination of this Agreement and the resignation or
replacement of the Agent.

13.8 Agent in Individual Capacity. LaSalle and its Affiliates may make loans to,
issue letters of credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting or other business
with the Company and its Subsidiaries and Affiliates as though LaSalle were not the Agent or the
Issuing Bank hereunder and without notice to or consent of the Banks. The Banks acknowledge that,
pursuant to such activities, LaSalle or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to confidentiality obligations
in favor of the Company or such Affiliate) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to their Loans (if any), LaSalle and
its Affiliates shall have the same rights and powers under this Agreement as any other Bank and may
exercise the same as though LaSalle were not the Agent and the Issuing Bank, and the terms “Bank”
and “Banks” include LaSalle and its Affiliates, to the extent applicable, in their individual
capacities

13.9 Successor Agent. The Agent may resign as Agent upon thirty (30) days notice to
the Banks. If the Agent resigns under this Agreement, the Required Banks shall, with (so long as
no Event of Default exists) the consent of the Company (which shall not be unreasonably withheld or
delayed), appoint from among the Banks a successor agent for the Banks. If no successor agent is
appointed prior to the effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Banks and the Company, a successor agent from among the Banks. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Agent and the term “Agent” shall mean such
successor agent, and the retiring Agent’s appointment, powers and duties as Agent shall be
terminated. After any retiring Agent’s resignation hereunder as Agent, the provisions of this
Section 13 and Sections 14.6 and 14.13 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement. If no successor agent has accepted
appointment as Agent by the date which is thirty (30) days following a retiring Agent’s notice of
resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the
Banks shall perform all of the duties of the Agent hereunder until such time, if any, as the
Required Banks appoint a successor agent as provided for above.

 

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13.10 Reserved.

13.11 Funding Reliance.

(a) Unless the Agent receives notice from a Bank by noon, Chicago time, on the
day of a proposed borrowing that such Bank will not make available to the Agent an
amount equal to its Pro Rata Share of such borrowing, the Agent may assume that such
Bank has made such amount available to the Agent and, in reliance upon such
assumption, make a corresponding amount available to the Company. If and to the
extent such Bank has not made such amount available to the Agent, such Bank and the
Company jointly and severally agree to repay such amount to the Agent forthwith on
demand, together with interest thereon at the interest rate applicable to Loans
comprising such borrowing or, in the case of any Bank which repays such amount
within three Business Days, the Federal Funds Rate (together with such other
compensatory amounts as may be required to be paid by such Bank to the Agent
pursuant to the Rules for Interbank Compensation of the Council on International
Banking or the Clearinghouse Compensation Committee, as applicable, as in effect
from time to time). Nothing set forth in this clause (a) shall relieve any
Bank of any obligation it may have to make any Loan hereunder.

(b) Unless the Agent receives notice from the Company prior to the due date for
any payment hereunder that the Company does not intend to make such payment, the
Agent may assume that the Company has made such payment and, in reliance upon such
assumption, make available to each Bank its share of such payment. If and to the
extent that the Company has not made any such payment to the Agent, each Bank which
received a share of such payment shall repay such share (or the relevant portion
thereof) to the Agent forthwith on demand, together with interest thereon at the
Base Rate (or, in the case of any Bank which repays such amount within three
Business Days, the Federal Funds Rate). Nothing set forth in this clause
(b) shall relieve the Company of any obligation it may have to make any payment
hereunder.

SECTION 14. GENERAL.

14.1 Waiver; Amendments. No delay on the part of the Agent or any Bank in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or
partial exercise by any of them of any right, power or remedy preclude other or further exercise
thereof, or the exercise of any other right, power or remedy. No amendment, modification or waiver
of, or consent with respect to, any provision of this Agreement or the Notes shall in any event be
effective unless the same shall be in writing and signed and delivered by Banks having an aggregate Pro Rata

 

55

 

Share of not less than the aggregate Pro Rata Share expressly designated herein with respect
thereto or, in the absence of such designation as to any provision of this Agreement or the Notes,
by the Required Banks, and then any such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which given. No
amendment, modification, waiver or consent shall change the Pro Rata Share of any Bank without the
consent of such Bank. No amendment, modification, waiver or consent shall: (i) increase the
Commitment Amount, (ii) extend the date for payment of any principal of or interest on the Loans or
any fees payable hereunder, (iii) reduce the principal amount of any Loan, the rate of interest
thereon or any fees payable hereunder, (iv) release the Guaranty or (v) reduce the aggregate Pro
Rata Share required to effect an amendment, modification, waiver or consent without, in each case,
the consent of all Banks. No provision of Section 13 or other provision of this Agreement
affecting the Agent in its capacity as such shall be amended, modified or waived without the
consent of the Agent. Notwithstanding the foregoing or anything else to the contrary in this
Section 14.1, Agent, without the further consent of any Lender, may (and hereby is authorized to)
amend or otherwise modify this Agreement or any other Loan Document in order to effectuate the
Incremental Loan Commitment and the making of the Incremental Loans, provided that any such
amendment or modification shall not be inconsistent with the terms of Section 14.1 of this
Agreement or the definitions used in such Section insofar as such definitions affect the substance
of such Section. No provision of Section 13 or other provision of this Agreement affecting
the Agent in its capacity as such shall be amended, modified or waived without the consent of the
Agent. No provision of this Agreement relating to the rights or duties of the Issuing Bank in its
capacity as such shall be amended, modified or waived without the consent of the Issuing Bank.

14.2 Confirmations. The Company and each holder of a Note agree from time to time,
upon written request received by it from the other, to confirm to the other in writing (with a copy
of each such confirmation to the Agent) the aggregate unpaid principal amount of the Loans then
outstanding under such Note.

14.3 Notices. Except as otherwise provided in Sections 2.2.2 and
2.2.3, all notices hereunder shall be in writing (including facsimile transmission) and
shall be sent to the applicable party at its address shown on Schedule 14.3 or at such
other address as such party may, by written notice received by the other parties, have designated
as its address for such purpose. Notices sent by facsimile transmission shall be deemed to have
been given when sent; notices sent by mail shall be deemed to have been given three Business Days
after the date when sent by registered or certified mail, postage prepaid; and notices sent by hand
delivery or overnight courier service shall be deemed to have been given when received. For
purposes of Sections 2.2.2 and 2.2.3, the Agent shall be entitled to rely on
telephonic instructions from any person that the Agent in good faith believes is an authorized
officer or employee of the Company, and the Company shall hold the Agent and each other Bank
harmless from any loss, cost or expense resulting from any such reliance.

14.4 Computations. Where the character or amount of any asset or liability or item
of income or expense is required to be determined, or any consolidation or other accounting
computation is required to be made, for the purpose of this Agreement, such determination or
calculation shall, to the extent applicable and except as otherwise specified in this Agreement, be
made in accordance with GAAP, consistently applied; provided, if the Company notifies the
Agent that the Company wishes to amend any covenant in Section 10 to eliminate or to take
into account the effect of any change in GAAP on the operation of such covenant (or if the Agent notifies
the Company that the Required Banks wish to amend Section 10 for such purpose), then the
Company’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 Company and the Required
Banks.

 

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14.5 Regulation U. Each Bank represents that it in good faith is not relying, either
directly or indirectly, upon any Margin Stock as collateral security for the extension or
maintenance by it of any credit provided for in this Agreement.

14.6 Costs, Expenses and Taxes. The Company agrees to pay on demand all reasonable
out-of-pocket costs and expenses of the Agent (including Attorney Costs) in connection with the
preparation, execution, syndication, delivery and administration of this Agreement, the other Loan
Documents and all other documents provided for herein or delivered or to be delivered hereunder or
in connection herewith (including any amendment, supplement or waiver to any Loan Document), and
all reasonable out-of-pocket costs and expenses (including Attorney Costs) incurred by the Agent
and each Bank after an Event of Default in connection with the enforcement of this Agreement, the
other Loan Documents or any such other documents. In addition, the Company agrees to pay, and to
save the Agent and the Banks harmless from all liability for: (a) any stamp or other taxes
(excluding income taxes and franchise taxes based on net income) which may be payable in connection
with the execution and delivery of this Agreement, the borrowings hereunder, the issuance of the
Notes or the execution and delivery of any other Loan Document or any other document provided for
herein or delivered or to be delivered hereunder or in connection herewith and (b) any fees of the
Company’s auditors in connection with any reasonable exercise by the Agent and the Banks of their
rights pursuant to Section 10.2. All obligations provided for in this Section 14.6
shall survive repayment of the Loans, cancellation of the Notes, expiration or termination fo the
Letters of Credit and termination of this Agreement.

14.7 Subsidiary References. The provisions of this Agreement relating to
Subsidiaries shall apply only during such times as the Company has one or more Subsidiaries.
Additionally, references to Bangor Gas and Frontier Energy as Subsidiaries of the Company shall
only be applicable if and when such Persons are in fact either direct or indirect Subsidiaries of
the Company.

14.8 Captions. Section captions used in this Agreement are for convenience only and
shall not affect the construction of this Agreement.

14.9 Assignments; Participations.

14.9.1 Assignments. Any Bank may, with the prior written consents of the
Issuing Bank and the Agent and (so long as no Event of Default exists) the Company (which
consents shall not be unreasonably delayed or withheld and, in any event, shall not be
required for an assignment by a Bank to one of its Affiliates or another Bank or by LaSalle
to an Approved Fund), at any time assign and delegate to one or more commercial banks or
other Persons (any Person to whom such an assignment and delegation is to be made being
herein called an “Assignee”) all or any fraction of such Bank’s Loans and Commitment
(which assignment and delegation shall be of a constant, and not a varying, percentage of
all the assigning Bank’s Loans and Commitment) in a minimum aggregate amount equal to the
lesser of: (i) the amount of the assigning Bank’s Pro Rata Share of the Commitment
Amount and (ii) $3,000,000 (except in connection with an assignment to an Affiliate or
another Bank or by LaSalle to an Approved Fund, to which no minimum amount shall apply);
provided: (a) no assignment and delegation may be made to any Person if, at the time
of such assignment and delegation, the Company would be obligated to pay any greater amount
under Section 7.6 or Section 8 to the Assignee than the Company is then
obligated to pay to the assigning Bank under such Sections (and if any assignment is made in
violation of the foregoing, the Company will not be required to pay the incremental amounts)
and (b) the Company and the Agent shall be entitled to continue to deal solely and directly
with such Bank in connection with the interests so assigned and delegated to an Assignee
until the date when all of the following conditions shall have been met:

 

57

 

(x) five (5) Business Days (or such lesser period of time as the Agent and the
assigning Bank shall agree) shall have passed after written notice of such assignment and
delegation, together with payment instructions, addresses and related information with
respect to such Assignee, shall have been given to the Company and the Agent by such
assigning Bank and the Assignee,

(y) the assigning Bank and the Assignee shall have executed and delivered to the
Company and the Agent an assignment agreement substantially in the form of Exhibit D
(an “Assignment Agreement”), together with any documents required to be delivered
thereunder, which Assignment Agreement shall have been accepted by the Agent, and

(z) except in the case of an assignment by a Bank to one of its Affiliates, the
assigning Bank or the Assignee shall have paid the Agent a processing fee of $3,500.

From and after the date on which the conditions described above have been met: (x) such Assignee
shall be deemed automatically to have become a party hereto and, to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee pursuant to such Assignment
Agreement, shall have the rights and obligations of a Bank hereunder and (y) the assigning Bank, to
the extent that rights and obligations hereunder have been assigned and delegated by it pursuant to
such Assignment Agreement, shall be released from its obligations hereunder. Within five Business
Days after effectiveness of any assignment and delegation, the Company shall execute and deliver to
the Agent (for delivery to the Assignee and the Assignor, as applicable) a new Note in the
principal amount of the Assignee’s Pro Rata Share of the Commitment Amount and, if the assigning
Bank has retained a Commitment hereunder, a replacement Note in the principal amount of the Pro
Rata Share of the Commitment Amount retained by the assigning Bank retained by the assigning Bank
(such Note to be in exchange for, but not in payment of, the predecessor Note held by such
assigning Bank). Each such Note shall be dated the effective date of such assignment. The
assigning Bank shall mark the predecessor Note “exchanged” and deliver it to the Company. Accrued
interest on that part of the predecessor Note being assigned shall be paid as provided in the
Assignment Agreement. Accrued interest and fees on that part of the predecessor Note not being
assigned shall be paid to the assigning Bank. Accrued interest and accrued fees shall be paid at
the same time or times provided in the predecessor Note and in this Agreement. Any attempted
assignment and delegation not made in accordance with this Section 14.9.1 shall be null and
void.

 

58

 

Notwithstanding the foregoing provisions of this Section 14.9.1 or any other provision
of this Agreement, any Bank may at any time assign all or any portion of its Loans and its Note to
a Federal Reserve Bank (but no such assignment shall release any Bank from any of its obligations
hereunder).

14.9.2 Participations. Any Bank may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan owing to such Bank,
the Note held by such Bank, the Commitment of such Bank, the direct or participation
interest of such Bank in any Letter of Credit or any other interest of such Bank hereunder
(any Person purchasing any such participating interest being herein called a “Participant”).
In the event of a sale by a Bank of a participating interest to a Participant: (x) such
Bank shall remain the holder of its Note for all purposes of this Agreement, (y) the Company
and the Agent shall continue to deal solely and directly with such Bank in connection with
such Bank’s rights and obligations hereunder and (z) all amounts payable by the Company
shall be determined as if such Bank had not sold such participation and shall be paid
directly to such Bank. No Participant shall have any direct or indirect voting rights
hereunder except with respect to any of the events described in the fourth sentence of
Section 14.1. Each Bank agrees to incorporate the requirements of the preceding
sentence into each participation agreement which such Bank enters into with any Participant.
The Company agrees that if amounts outstanding under this Agreement and the Notes are due
and payable (as a result of acceleration or otherwise), each Participant shall be deemed to
have the right of setoff in respect of its participating interest in amounts owing under
this Agreement, any Note and with respect to any Letter of Credit to the same extent as if
the amount of its participating interest were owing directly to it as a Bank under this
Agreement or such Note; provided, such right of setoff shall be subject to the
obligation of each Participant to share with the Banks, and the Banks agree to share with
each Participant, as provided in Section 7.5. The Company also agrees that each
Participant shall be entitled to the benefits of Section 7.6 and Section 8
as if it were a Bank (provided that no Participant shall receive any greater
compensation pursuant to Section 7.6 or Section 8 than would have been paid
to the participating Bank if no participation had been sold).

14.10 Governing Law. This Agreement and each Note shall be a contract made under and
governed by the internal laws of the State of Illinois applicable to contracts made and to be
performed entirely within such State. Whenever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement. All obligations of the Company and
rights of the Agent and the Banks expressed herein or in any other Loan Document shall be in
addition to and not in limitation of those provided by applicable law.

14.11 Counterparts. This Agreement may be executed in any number of counterparts and
by the different parties hereto on separate counterparts and each such counterpart shall be deemed
to be an original, but all such counterparts shall together constitute but one and the same
Agreement.

 

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14.12 Successors and Assigns. This Agreement shall be binding upon the Company, the
Banks and the Agent and their respective successors and assigns, and shall inure to the benefit of
the Company, the Banks and the Agent and the successors and assigns of the Banks and the Agent.

14.13 Indemnification by the Company. In consideration of the execution and delivery
of this Agreement by the Agent and the Banks and the agreement to extend the Commitments provided
hereunder, the Company hereby agrees to indemnify, exonerate and hold the Agent, each Bank and each
of the officers, directors, employees, Affiliates and agents of the Agent and each Bank (each a
“Bank Party”) free and harmless from and against any and all actions, causes of action, suits,
losses, liabilities, damages and expenses, including Attorney Costs (collectively, the “Indemnified
Liabilities”), incurred by the Bank Parties or any of them as a result of, or arising out of, or
relating to: (i) any tender offer, merger, purchase of stock, purchase of assets or other similar
transaction financed or proposed to be financed in whole or in part, directly or indirectly, with
the proceeds of any of the Loans, (ii) the use, handling, release, emission, discharge,
transportation, storage, treatment or disposal of any hazardous substance at any property owned or
leased by the Company or any Subsidiary, (iii) any violation of any Environmental Laws with respect
to conditions at any property owned or leased by the Company or any Subsidiary or the operations
conducted thereon, (iv) the investigation, cleanup or remediation of offsite locations at which the
Company or any Subsidiary or their respective predecessors are alleged to have directly or
indirectly disposed of hazardous substances or (v) the execution, delivery, performance or
enforcement of this Agreement or any other Loan Document by any of the Bank Parties, except for any
such Indemnified Liabilities arising on account of the applicable Bank Party’s gross negligence or
willful misconduct. If and to the extent that the foregoing undertaking may be unenforceable for
any reason, the Company hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. All
obligations provided for in this Section 14.13 shall survive repayment of the Loans,
cancellation of the Notes and termination of this Agreement.

14.14 Nonliability of Banks. The relationship between the Company on the one hand
and the Banks and the Agent on the other hand shall be solely that of borrower and lender. Neither
the Agent nor any Bank shall have any fiduciary responsibility to the Company. Neither the Agent
nor any Bank undertakes any responsibility to the Company to review or inform the Company or any
matter in connection with any phase of the Company’s business or operations. The Company agrees
that neither the Agent nor any Bank shall have liability to the Company (whether sounding in tort,
contract or otherwise) for losses suffered by the Company in connection with, arising out of, or in
any way related to the transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith, unless it is determined
in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted
from the gross negligence or willful misconduct of the party from which recovery is sought.
Neither the Agent nor any Bank shall have any liability with respect to, and the Company hereby
waives, releases and agrees not to sue for, any special, indirect or consequential damages suffered
by the Company in connection with, arising out of, or in any way related to the Loan Documents or
the transactions contemplated thereby.

 

60

 

14.15 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN
THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE COMPANY
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

14.16 Waiver of Jury Trial. EACH OF THE COMPANY, THE AGENT AND EACH BANK HEREBY
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR
ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

- Remainder of page intentionally left blank; signature page follows -

 

61

 

Delivered at Chicago, Illinois, as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	AGENT AND BANK:
	 
	 	 	 	 	 	 
	 	 	LASALLE BANK, NATIONAL ASSOCIATION, a national banking association, as Agent and as a Bank
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Meghan Schultz	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Meghan Schultz	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	COMPANY:
	 
	 	 	 	 	 	 
	 	 	ENERGY WEST, INCORPORATED, a Montana corporation
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David A. Cerotzke
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	David A. Cerotzke	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 

 

 

Credit Agreement

 

SCHEDULE 1 TO Credit Agreement

PRICING GRID

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable	 	Applicable
	 	 	Total Debt to	 	Commitment	 	Margin -	 	Margin-Base
	Level	 	Capital Ratio	 	Fee	 	LIBOR	 	Rate
	I
	 	Less than 0.45

to 1.00
	 	0.200%
	 	1.200%
	 	0.000%
	II
	 	Equal to or

greater than 0.45

to 1.00 but less

than 0.55 to 1.00
	 	0.250%
	 	1.325%
	 	0.000%
	III
	 	Equal to or

greater than 0.55

to 1.00
	 	0.375%
	 	1.450%
	 	0.000%

For the period commencing on the Closing Date through the last day of the month during which
financial statements for the Fiscal Quarter Ending June 30, 2007 are delivered, the applicable
Level shall be Level I. Thereafter, the Level shall equal the applicable Level as set forth below
based upon the Total Debt to Capital Ratio then in effect.

The applicable Level shall be adjusted from time to time upon delivery to the Agent of the
financial statements for each Fiscal Quarter required to be delivered pursuant to Section 10.1.2
hereof accompanied by a written calculation of the Total Debt to Capital Ratio certified on behalf
of the Borrower by an authorized officer as of the end of such Fiscal Quarter for which such
financial statements are delivered. If such calculation indicates that the Level shall increase or
decrease, then on the first day of the month following the date of delivery of such financial
statements and written calculation, the Level shall be adjusted in accordance therewith; provided,
however, that if the Borrower shall fail to deliver any such financial statements for any such
Fiscal Quarter when such financial statements are required to be delivered pursuant to Section
10.1.2, then, at the Agent’s election, effective as of the first day immediately following the date
such financial statements were to have been delivered, and continuing through the first day of the
quarter following the date (if ever) when such financial statements and such written calculation
are finally delivered, the Level shall be conclusively presumed to equal the highest Level
specified in the pricing table set forth above.

 

 

Credit Agreement

 

SCHEDULE 1.1(a) TO Credit Agreement

EXISTING CLAIMS

 

 

Credit Agreement

 

SCHEDULE 2.1 TO Credit Agreement

BANKS AND PRO RATA SHARES

	 	 	 	 	 	 	 	 	 
	 	 	Pro Rata Share	 	 
	 	 	of Commitment	 	 
	Bank	 	Amount	 	Pro Rata Share
	 
	LaSalle Bank National Association

	 	$	20,000,000.00	 	 	 	100.00000000	%
	 
	TOTAL

	 	$	20,000,000.00	 	 	 	100.000000000	%

 

 

Credit Agreement

 

SCHEDULE 9.6 to Credit Agreement

LITIGATION AND CONTINGENT LIABILITIES

 

 

Credit Agreement

 

SCHEDULE 9.8 to Credit Agreement

SUBSIDIARIES

 

 

Credit Agreement

 

SCHEDULE 9.15 to Credit Agreement

ENVIRONMENTAL MATTERS

 

 

Credit Agreement

 

SCHEDULE 9.17 to Credit Agreement

INSURANCE

 

 

Credit Agreement

 

SCHEDULE 9.18 to Credit Agreement

REAL PROPERTY

 

 

Credit Agreement

 

SCHEDULE 9.22 to Credit Agreement

LABOR MATTERS

 

 

Credit Agreement

 

SCHEDULE 10.7 to Credit Agreement

PERMITTED EXISTING DEBT

 

 

Credit Agreement

 

SCHEDULE 10.8 to Credit Agreement

PERMITTED EXISTING LIENS

 

 

Credit Agreement

 

SCHEDULE 10.21 to Credit Agreement

INVESTMENTS

 

 

Credit Agreement

 

SCHEDULE 11.1 to Credit Agreement

DEBT TO BE REPAID

 

 

Credit Agreement

 

SCHEDULE 14.3 to Credit Agreement

ADDRESSES FOR NOTICES

COMPANY:

	 	 	 
	No. 1 First Avenue South
	Great Falls, Montana 59401
	P.O. Box 2229
	Great Falls, Cascade County, Montana 59403-2229
	Attention.:

	 	 Vice President Administration
	Telephone:

	 	 406.791.7503
	Facsimile:

	 	 406.791.7560

AGENT:

	 	 	 
	135 South LaSalle Street
	Chicago, Illinois 60603
	Attention:

	 	 Ms. Meghan Schultz
	Telephone:

	 	 312.904.9457
	Facsimile:

	 	 312.904.1994

LASALLE:

Notices of Borrowing, Conversion, Continuation

	 	 	 
	135 South LaSalle Street
	Chicago, Illinois 60603
	Attention:

	 	 Ms. Meghan Schultz
	Telephone:

	 	 312.904.9457
	Facsimile:

	 	 312.904.1994

All Other Notices

	 	 	 
	135 South LaSalle Street
	Chicago, Illinois 60603
	Attention:

	 	 Ms. Meghan Schultz
	Telephone:

	 	 312.904.9457
	Facsimile:

	 	 312.904.1994

 

 

Credit Agreement

 

EXHIBIT A to Credit Agreement

FORM OF NOTE

NOTE

			
	 	 	 
	 
	 	__________ ___, 20___
	$___________
	 	Chicago, Illinois

[Original Note dated ______________ __, 20__]

The undersigned, ENERGY WEST, INCORPORATED, a Montana corporation (the “Company”), for value
received, promises to pay to the order of                                         , a                                          
(the “Bank”) at the principal office of LaSalle Bank National Association, in its capacity as agent
(in such capacity, the “Agent”) in Chicago, Illinois the aggregate unpaid amount of all Loans made
to the undersigned by the Bank pursuant to the Credit Agreement referred to below (as shown on the
Schedule attached hereto (and any continuation thereof) or in the records of the Bank),
such principal amount to be payable on the dates set forth in the Credit Agreement.

The Company further promises to pay interest on the unpaid principal amount of each Loan from
the date of such Loan until such Loan is paid in full, payable at the rates and at the times set
forth in the Credit Agreement. Payments of both principal and interest are to be made in lawful
money of the United States of America.

This Note evidences indebtedness incurred under, and is subject to the terms and provisions
of, the Credit Agreement dated as of June 29, 2007 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”; terms not otherwise defined herein are used
herein as defined in the Credit Agreement) by and among the Company, certain financial institutions
(including the Bank) and the Agent. Reference is hereby made to such Credit Agreement for a
statement of the terms and provisions under which this Note may or must be paid prior to its due
date or its due date accelerated.

This Note is made under and governed by the laws of the State of Illinois applicable to
contracts made and to be performed entirely within such State.

[This Note: (i) is given in substitution for, and not in repayment of, that certain Note
issued                             , 20     in the original principal amount of $                     made by the
Company payable to the order of [the Bank/                                        ] (the “Original Note”) and (ii)
shall not constitute a novation of the indebtedness, liabilities or obligations evidenced by the
Original Note or any of the Obligations.]

- Remainder of Page Intentionally Left Blank -

[Signature Page Follows]

 

 

 

IN WITNESS WHEREOF, the Company has executed this Note as of the day and year first written
above.

	 	 	 	 	 	 	 
	 	 	ENERGY WEST, INCORPORATED, a Montana corporation
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

Credit Agreement

 

Schedule attached to Note dated                   , 20    of
Energy West, Incorporated, payable to the order of                     

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Date and	 	 	Date and	 	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	 	Amount of	 	 	 	 	 	 	 	 	 	 
	 	 	Loan or of	 	 	Repayment or of	 	 	Interest	 	 	 	 	 	 	 
	 	 	Conversion from	 	 	Conversion into	 	 	Period/	 	 	Unpaid	 	 	 	 
	 	 	another type of	 	 	another type of	 	 	Maturity	 	 	Principal	 	 	Notation	 
	Tranche	 	Loan	 	 	Loan	 	 	Date	 	 	Balance	 	 	Made by	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

1. BASE RATE LOANS

 

 

 

 

2. LIBOR LOANS

 

 

 

 

 

Credit Agreement

 

EXHIBIT B to Credit Agreement

FORM OF COMPLIANCE CERTIFICATE

To: LaSalle Bank National Association, as Agent

Please refer to the Credit Agreement dated as of June 29, 2007 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”) by and among Energy
West, Incorporated, a Montana corporation (the “Company”), various financial institutions and
LaSalle Bank National Association, as agent. Terms used but not otherwise defined herein are used
herein as defined in the Credit Agreement.

I. Reports. Enclosed herewith is a copy of the [annual audited/quarterly] report of
the Company as at
 _____ 
, 20
 _____ 
(the “Computation Date”), which report fairly
presents in all material respects the financial condition and results of operations [(subject to
the absence of footnotes and to normal year-end adjustments)] of the Company as of the Computation
Date and has been prepared in accordance with GAAP consistently applied.

II. Financial Tests. The Company hereby certifies and warrants to you that the
following is a true and correct computation as at the Computation Date of the following ratios
and/or financial restrictions contained in the Credit Agreement:

	 	A.	 	Section 10.6.2 — Minimum Interest Coverage Ratio

	 	 	 	 	 	 	 
	 

	 	1.
	 	EBIT
	 	$                    
	 
	 	 	 	 	 	 
	 

	 	2.
	 	Interest Expense
	 	$                    
	 
	 	 	 	 	 	 
	 

	 	3.
	 	Ratio of (1) to (2)
	 	      to 1.00
	 
	 	 	 	 	 	 
	 

	 	4.
	 	Minimum required
	 	2.00 to 1.00

	 	B.	 	Section 10.6.2 — Maximum Total Debt to Capital Ratio

	 	 	 	 	 	 	 
	 

	 	1.
	 	Total Debt
	 	$                    
	 
	 	 	 	 	 	 
	 

	 	2.
	 	Capital
	 	$                    
	 
	 	 	 	 	 	 
	 

	 	3.
	 	Ratio of (1) to (2)
	 	      to 1.00
	 
	 	 	 	 	 	 
	 

	 	4.
	 	Maximum allowed
	 	.65 to 1.00

	 	C.	 	Section 10.10 — Restricted Distributions [complete for each such payment]

1. The Aggregate amount of the dividend payments made or declared by the Company during this
period, together with all other such payments made during the sixty (60) months immediately preceding the month in which such dividend is declared and paid.

 

 

 

Credit Agreement

 

2. Seventy five percent (75%) of the Consolidated Net Income of the Company and its
Subsidiaries for the sixty (60) months immediately preceding the month in which such dividend is
declared and paid

 

3. Confirm Item 1 does not exceed Item 2 (and conform as applicable for other
payments permitted by Section 10.10.

 

III. Energy West Resources. The Company hereby certifies and warrants to you that. as
of the date hereof, the aggregate amount of all the Debt of Resources to the Company, when taken
together with all capital contributions and other distributions of the Company or any of its
Subsidiaries other than Resources made to, as well as all Investments by such Persons in, Resources
from and after the Closing Date, is $                                         (consisting of $                     of Debt owed
by Resources to the Company outstanding as of the date hereof and $                     of Investments in
and contributions to Resources made since the Closing Date) and such amount does not exceed (and
has not at any time since [date of last compliance certificate] exceeded) $3,000,000 in the
aggregate.

The Company further certifies to you that no Event of Default or Unmatured Event of Default
has occurred and is continuing.

IN WITNESS WHEREOF, the Company has caused this Certificate to be executed and delivered by
its duly authorized officer on                     , 20    .

	 	 	 	 	 	 	 
	 	 	ENERGY WEST, INCORPORATED, a Montana corporation
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

 

B-6

 

EXHIBIT C to Credit Agreement

FORM OF ASSIGNMENT AGREEMENT

                             , 200  

Reference is made to the Credit Agreement described in Item 2 of Annex I annexed hereto (as
amended through the date hereof, the “Credit Agreement”). LASALLE BANK NATIONAL ASSOCIATION, in
its capacity as “Agent” for itself and all “Banks” (as such terms are defined in the Credit
Agreement), LASALLE BANK NATIONAL ASSOCIATION, in its capacity as “Issuing Bank,”
[                                        ], a [                    ] (the “Assignor”), and
[                                        ], a [                    ] (the “Assignee”), hereby agree as follows:

1. All capitalized terms used but not otherwise defined herein or in Annex I shall
have the respective meanings ascribed to such terms in the Credit Agreement.

2. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases
and assumes from the Assignor, that interest in and to all of the Assignor’s rights and obligations
under the Credit Agreement which represents the percentage interest specified in Item 4 of
Annex I of all outstanding rights and obligations under the Credit Agreement relating to the
facility or facilities set forth in Item 2 of Annex I, including, without limitation, such
interest in: (i) the Assignor’s respective Commitments, (ii) the Assignor’s participation interest
in the Letters of Credit and (iii) the Loans and other Obligations owing to the Assignor relating
to such facilities. In consideration of such purchase and assumption by the Assignee, the Assignor
hereby agrees to pay to the Assignee on the Effective Date (as such term is defined below) the
amount set forth in Item 5 of Annex I. After giving effect to such sale and assignment,
the respective Commitments of the Assignee, the amount of the Loans owing to the Assignee and the
Assignee’s participation interest in the Letters of Credit will be as set forth in Item 4 of
Annex I.

3. The Assignor: (i) represents and warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and clear of any adverse
claim; (ii) makes no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Credit Agreement of the
execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, the Notes or any other document, agreement or instrument furnished pursuant thereto; and
(iii) makes no representation or warranty and assumes no responsibility with respect to the
financial condition of the Company or any of its Subsidiaries or the performance or observance by
the Company or any of its Subsidiaries of their respective obligations under the Credit Agreement,
the Notes, Loan documents or any other agreement, document or instrument furnished pursuant
thereto.

 

 

Credit Agreement

 

4. The Assignee: (i) represents that it is either: (A) a Person organized under the laws of
the United States or a state thereof or (B) if it is a Person organized under the laws of any
jurisdiction other than the United States or any state thereof (a “Foreign Lender”), the
information set forth in the documents delivered pursuant to clause (vii) of this Section 4 is
true and correct as of the date hereof; (ii) confirms that it is either a commercial lender, other
financial institution or “accredited investor” (as defined in Regulation D promulgated under the
Securities Act of 1933, as amended) which makes loans or purchases notes in the ordinary course of
business and that it will make all Loans under the Credit Agreement solely for its own account in
the ordinary course of business and not with a view to or for sale in connection with any
distribution of the Notes; provided, however: (y) the Assignee shall not be deemed to have
breached this representation by making assignments or granting participations as permitted in the
Credit Agreement and (z) the disposition of the Notes, or other evidence of debt held by the
Assignee shall at all times be within its exclusive control; (iii) confirms that it has received a
copy of the Credit Agreement, together with copies of the financial statements referred to therein
and such other documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption Agreement; (iv) agrees that it
will independently and without reliance upon the Agent, the Assignor or any other Bank and based on
such documents and information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement; (v) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise such powers under
the Credit Agreement as are delegated to the Agent by the terms thereof, together with such powers
as are reasonably incidental thereto; (vi) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank; and (vii) if it is a Foreign Lender, attaches two (2) accurate and
complete original signed copies of forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee’s status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made to the Assignee under the Credit
Agreement or, if applicable, such other documents as are necessary to indicate that such payments
are subject to such rates at a rate reduced by an applicable tax treaty.

5. Following the execution of this Assignment and Assumption Agreement by the Assignor and the
Assignee, it will be delivered to the Agent for acceptance and recording by the Agent in the
Register. The effective date of this Assignment and Assumption Agreement shall be the date of
execution and delivery hereof to the Agent by the Assignor and the Assignee unless otherwise
specified on Item 6 of Annex I hereto (the “Effective Date”).

6. Upon such acceptance and recording by the Agent, as of the Effective Date: (i) the Assignee
shall be a party to the Credit Agreement and, to the extent provided in this Assignment and
Assumption Agreement, have the rights and obligations of a Bank thereunder and (ii) the Assignor
shall, to the extent provided in this Assignment and Assumption Agreement, relinquish its rights
and be released from its obligations under the Credit Agreement.

7. Upon such acceptance and recording by the Agent, from and after the Effective Date, the
Agent shall make all payments under the Credit Agreement in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and fees (if applicable) with
respect thereto) to the Assignee. Upon the Effective Date, the Assignee shall pay to the Assignor
the principal amount of any outstanding Loans under the Credit Agreement which are being assigned
hereunder, net of any closing costs. The Assignor and the Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the Effective Date directly
between themselves on the Effective Date.

 

 

Credit Agreement

 

8. This Assignment and Assumption Agreement shall be governed by, and construed in accordance
with, the internal laws (as opposed to conflict of laws provisions) of the State of Illinois.

- Remainder of Page Intentionally Left Blank —

[Signature Page Follows]

 

 

Credit Agreement

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Assumption Agreement
and Annex I hereto be executed by their respective officers thereunto duly authorized, as of the
date first above written.

	 	 	 	 	 	 	 
	 	 	[                    ], as Assignor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	[                    ], as Assignee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 
	 

	 	 	 	 	 	 

Accepted:

	 	 	 	 	 
	LASALLE BANK NATIONAL ASSOCIATION, as Agent	 	 
	 

	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	Name:

	 	 	 	 
	 

	 	 	 	 
	Title:

	 	 	 	 
	 

	 	 	 	 

Consented and Agreed [to the extent required under the terms of the Credit Agreement]

	 	 	 	 	 
	ENERGY WEST, INCORPORATED, a Montana corporation	 	 
	 

	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	Name:

	 	 	 	 
	 

	 	 	 	 
	Title:

	 	 	 	 
	 

	 	 	 	 

 

 

Credit Agreement

 

ANNEX I

	 	 	 	 	 
	1.

	 	The Company:
	 	Energy West, Incorporated
	 
	 	 	 	 
	2.

	 	Name and Date of Credit Agreement:
	 	Credit Agreement dated as of June 29,
2007 by and among the Company, each of the financial institutions from
time to time parties thereto, and LaSalle Bank National Association, as Agent
	 
	 	 	 	 
	3.

	 	Date of Assignment Agreement:
	 	                           , 200  

Commitments and Assignments [will need to be adjusted to reflect assignment of particular tranches,
if assignment does not take place on a pro rata basis across all tranches] :

	 	 	 
	Assignor’s Aggregate Commitments Prior to Assignment:

	 	$                    
	Amount Assigned

	 	$                    
	Assignor’s Revised Commitment

	 	$                    
	 
	 	 
	Assignor’s Percentage of Aggregate Commitments Prior to Assignment

	 	          %
	Percentage Assigned

	 	          %
	Percentage Remaining

	 	          %
	 
	 	 
	Commitment Amount Prior to Assignment

	 	$                    
	 

	 	($                    Loan outstanding)
	 
	 	 
	Amount Assigned

	 	$                    
	 

	 	($                    Loan outstanding)
	 
	 	 
	Assignor’s Revised Commitment

	 	$                    
	 

	 	($                    Loan outstanding)
	 
	 	 
	Percentage of Commitment Amount Prior to Assignment

	 	          %
	 

	 	(as a percentage of Commitment Amount)
	 
	 	 
	Percentage Assigned

	 	          %
	Percentage Remaining

	 	          %
	 
	 	 
	5.      Assignee’s Purchase Amounts:
	 	 

 

 

Credit Agreement

 

	 	 	 
	a.  Loans

	 	$                    
	 
	 	 
	b.  Closing Fees

	 	$                    
	TOTAL:

	 	$                    
	 
	 	 
	Effective Date:

	 	                         ,         
	 
	 	 
	7.      Notice and Payment Instructions:
	 	 
	 
	 	 
	ASSIGNOR:
	 	 
	Payment

	 	Notice

	ABA#:

	 	[Address]
	[Bank]
	 	 
	Acct#:
	 	 
	Acct:

	 	Attention:
	Reference:

	 	Telephone:
	 

	 	Facsimile:
	 

	 	Reference:
	 
	 	 
	ASSIGNEE:
	 	 
	Payment

	 	Notice
	ABA#:

	 	[Address]
	[Bank]
	 	 
	Acct#:
	 	 
	Acct:

	 	Attention:
	Reference:

	 	Telephone:
	 

	 	Facsimile:
	 

	 	Reference:

— Remainder of Page Intentionally Left Blank —

[Signature Page Follows]

 

 

Credit Agreement

 

Accepted and Agreed:

	 	 	 	 	 	 	 	 	 
	[                    ], as Assignor	 	[                    ], as Assignee	 	 
	 

	 	 	 	 	 	 	 	 
	By:

	 	 
	 	By:
	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	 
	 	Name:
	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	Title:

	 	 
	 	Title:
	 	 	 	 
	 

	 	 
	 	 	 	 	 	 

 

 

 

Credit Agreementexh10_1.htm

    
      

    

    
      
        

      

      

      AMENDED
        AND RESTATED CREDIT AGREEMENT

       

      dated
        as of June 29, 2007

       

      by
        and among

       

      TRUNKLINE
        LNG HOLDINGS LLC

       

      as
        the Borrower

       

      PANHANDLE
        EASTERN PIPE LINE COMPANY, LP

       

      as
        a Guarantor

       

      CROSSCOUNTRY
        CITRUS, LLC

       

      as
        a Guarantor

       

      and

       

      THE
        FINANCIAL INSTITUTIONS NAMED HEREIN

       

      as
        the Banks

       

      and

       

      BAYERISCHE
        HYPO- UND VEREINSBANK AG, NEW YORK BRANCH

       

      as
        the Administrative Agent

       

      BANK
        OF AMERICA, N.A.

       

      as
        the Syndication Agent

       

      JPMORGAN
        CHASE BANK, N.A., BAYERSICHE LANDESBANK, NEW YORK BRANCH  and MIZUHO
        CORPORATE BANK LTD.

       

      as
        the Co-Documentation Agents

       

      and

       

      UNICREDIT
        MARKETS & INVESTMENT BANKING acting through BAYERISCHE HYPO- UND VEREINSBANK
        AG and BANC OF AMERICA SECURITIES LLC

       

      as
        the Joint Lead Arrangers and Joint Book Managers

       

      
        
                

                              NEWY1\8114089.7              
    

          
          

        

        
          
          

          
            

          

        

        
          
          

                

                    TABLE
              OF
              CONTENTS      
      

                    
      
      

                                                                                                                        Page      
      

                    
      
    

        

      

      

       

      
        	
                1.

              	
                CERTAIN
                  DEFINITIONS 

              	
                1

              

      

       

      
        	
                 

              	
                1.1

              	
                Defined
                  Terms 

              	
                1

              

      

      
        	
                 

              	
                1.2

              	
                Computation
                  of Time Periods; Other Definitional
                  Provisions 

              	
                15

              

      

      
        	
                 

              	
                1.3

              	
                Accounting
                  Terms 

              	
                16

              

      

       

      
        	
                2.

              	
                AMOUNTS
                  AND TERMS OF THE LOANS 

              	
                16

              

      

       

      
        	
                 

              	
                2.1

              	
                The
                  Loan 

              	
                16

              

      

      
        	
                 

              	
                2.2

              	
                Making
                  of the Loans 

              	
                16

              

      

      
        	
                 

              	
                2.3

              	
                Repayment
                  of the Loan 

              	
                17

              

      

      
        	
                 

              	
                2.4

              	
                Termination
                  of the Commitments 

              	
                17

              

      

      
        	
                 

              	
                2.5

              	
                Prepayments 

              	
                17

              

      

      
        	
                 

              	
                2.6

              	
                Interest 

              	
                18

              

      

      
        	
                 

              	
                2.7

              	
                Fees 

              	
                19

              

      

      
        	
                 

              	
                2.8

              	
                Conversion
                  of Loans 

              	
                19

              

      

      
        	
                 

              	
                2.9

              	
                Increased
                  Costs, Etc 

              	
                20

              

      

      
        	
                 

              	
                2.10

              	
                Payments
                  and Computations 

              	
                21

              

      

      
        	
                 

              	
                2.11

              	
                Taxes 

              	
                23

              

      

      
        	
                 

              	
                2.12

              	
                Sharing
                  of Payments, Etc 

              	
                26

              

      

      
        	
                 

              	
                2.13

              	
                Use
                  of Proceeds 

              	
                26

              

      

      
        	
                 

              	
                2.14

              	
                Evidence
                  of Debt 

              	
                27

              

      

      
        	
                 

              	
                2.15

              	
                Replacement
                  of Banks 

              	
                27

              

      

       

      
        	
                3.

              	
                REPRESENTATIONS
                  AND WARRANTIES OF THE LOAN PARTIES 

              	
                28

              

      

       

      
        	
                 

              	
                3.1

              	
                Organization
                  and Qualification 

              	
                28

              

      

      
        	
                 

              	
                3.2

              	
                Authorization,
                  Validity, Etc 

              	
                28

              

      

      
        	
                 

              	
                3.3

              	
                Conflicting
                  or Adverse Agreements or Restrictions 

              	
                29

              

      

      
        	
                 

              	
                3.4

              	
                No
                  Consents Required 

              	
                29

              

      

      
        	
                 

              	
                3.5

              	
                Financial
                  Statements 

              	
                29

              

      

      
        	
                 

              	
                3.6

              	
                Litigation 

              	
                30

              

      

      
        	
                 

              	
                3.7

              	
                Default 

              	
                30

              

      

      
        	
                 

              	
                3.8

              	
                Compliance 

              	
                30

              

      

      
        	
                 

              	
                3.9

              	
                Title
                  to Assets 

              	
                30

              

      

      
        	
                 

              	
                3.10

              	
                Payment
                  of Taxes 

              	
                31

              

      

      
        	
                 

              	
                3.11

              	
                Investment
                  Company Act Not Applicable 

              	
                31

              

      

      
        	
                 

              	
                3.12

              	
                Regulations
                  G, T, U and X 

              	
                31

              

      

      
        	
                 

              	
                3.13

              	
                ERISA 

              	
                31

              

      

      
        	
                 

              	
                3.14

              	
                No
                  Financing of Certain Security Acquisitions 

              	
                31

              

      

      
        	
                 

              	
                3.15

              	
                Franchises,
                  Co-Licenses, Etc 

              	
                31

              

      

      
        	
                 

              	
                3.16

              	
                Environmental
                  Matters 

              	
                32

              

      

      
        	
                 

              	
                3.17

              	
                Existing
                  Liens 

              	
                32

              

      

      
        	
                 

              	
                3.18

              	
                Disclosure 

              	
                32

              

      

      
        
                
        

            
              	 	
                       

                      -i- 

                    	                

                                                            NEWY1\8114089.7                                  
              

            
      
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

                

                    TABLE
              OF
              CONTENTS      
      

                    (continued)      
      

                                                                                                                         Page      
      

                    
      
    

        

      

      
        	
                 

              	
                3.19

              	
                Insurance 

              	
                33

              

      

      
        	
                 

              	
                3.20

              	
                Subsidiaries 

              	
                33

              

      

       

      
        	
                4.

              	
                CONDITIONS
                  TO THE CLOSING DATE 

              	
                33

              

      

       

      
        	
                 

              	
                4.1

              	
                Representations
                  True and No Defaults 

              	
                33

              

      

      
        	
                 

              	
                4.2

              	
                Intentionally
                  Omitted 

              	
                33

              

      

      
        	
                 

              	
                4.3

              	
                Compliance
                  With Law 

              	
                33

              

      

      
        	
                 

              	
                4.4

              	
                Notice
                  of Borrowing and Other Documents 

              	
                34

              

      

      
        	
                 

              	
                4.5

              	
                Payment
                  of Fees and Expenses 

              	
                34

              

      

      
        	
                 

              	
                4.6

              	
                Repayment
                  of Debt 

              	
                34

              

      

      
        	
                 

              	
                4.7

              	
                Loan
                  Documents Satisfactory 

              	
                34

              

      

      
        	
                 

              	
                4.8

              	
                Inter-Company
                  Note Satisfactory 

              	
                34

              

      

      
        	
                 

              	
                4.9

              	
                Loan
                  Documents, Opinions and Other Instruments 

              	
                34

              

      

      
        	
                 

              	
                4.10

              	
                PATRIOT
                  Act 

              	
                35

              

      

       

      
        	
                5.

              	
                AFFIRMATIVE
                  COVENANTS OF THE LOAN
                  PARTIES35

              

      

       

      
        	
                 

              	
                5.1

              	
                Financial
                  Statements and Information 

              	
                35

              

      

      
        	
                 

              	
                5.2

              	
                Books
                  and Records 

              	
                36

              

      

      
        	
                 

              	
                5.3

              	
                Insurance 

              	
                36

              

      

      
        	
                 

              	
                5.4

              	
                Maintenance
                  of Property 

              	
                36

              

      

      
        	
                 

              	
                5.5

              	
                Inspection
                  of Property and Records 

              	
                36

              

      

      
        	
                 

              	
                5.6

              	
                Existence,
                  Laws, Obligations, Taxes 

              	
                36

              

      

      
        	
                 

              	
                5.7

              	
                Notice
                  of Certain Matters 

              	
                37

              

      

      
        	
                 

              	
                5.8

              	
                ERISA 

              	
                37

              

      

      
        	
                 

              	
                5.9

              	
                Compliance
                  with Environmental Laws 

              	
                38

              

      

       

      
        	
                6.

              	
                NEGATIVE
                  COVENANTS OF PANHANDLE
                  EASTERN39

              

      

       

      
        	
                 

              	
                6.1

              	
                Financial
                  Covenant 

              	
                39

              

      

      
        	
                 

              	
                6.2

              	
                Liens,
                  Etc 

              	
                39

              

      

      
        	
                 

              	
                6.3

              	
                Debt 

              	
                39

              

      

      
        	
                 

              	
                6.4

              	
                Change
                  in Nature of Business 

              	
                40

              

      

      
        	
                 

              	
                6.5

              	
                Mergers,
                  Consolidation 

              	
                40

              

      

      
        	
                 

              	
                6.6

              	
                Sale
                  of Assets 

              	
                40

              

      

      
        	
                 

              	
                6.7

              	
                Restricted
                  Payments 

              	
                40

              

      

      
        	
                 

              	
                6.8

              	
                Sales
                  and Leasebacks 

              	
                41

              

      

      
        	
                 

              	
                6.9

              	
                Transactions
                  with Related Parties 

              	
                41

              

      

      
        	
                 

              	
                6.10

              	
                Hazardous
                  Materials 

              	
                41

              

      

       

      
        	
                7.

              	
                NEGATIVE
                  COVENANTS OF THE BORROWER 

              	
                41

              

      

       

      
        	
                 

              	
                7.1

              	
                Liens,
                  Etc 

              	
                41

              

      

      
        	
                 

              	
                7.2

              	
                Debt 

              	
                42

              

      

      
        
                
        

            
              	 	
                       

                      -ii-

                    	                

                                                            NEWY1\8114089.7                                  
              

            
      
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

                

                    TABLE
              OF
              CONTENTS      
      

                    (continued)      
      

                                                                                                                         Page      
      

                    
      
    

        

      

      
        	
                 

              	
                7.3

              	
                Merger,
                  Consolidation 

              	
                42

              

      

      
        	
                 

              	
                7.4

              	
                Sale
                  of Assets 

              	
                43

              

      

      
        	
                 

              	
                7.5

              	
                Restricted
                  Payment 

              	
                44

              

      

      
        	
                 

              	
                7.6

              	
                Securities
                  Credit Regulations 

              	
                44

              

      

      
        	
                 

              	
                7.7

              	
                Nature
                  of Business 

              	
                44

              

      

      
        	
                 

              	
                7.8

              	
                Transactions
                  with Related Parties 

              	
                44

              

      

      
        	
                 

              	
                7.9

              	
                Hazardous
                  Materials 

              	
                44

              

      

      
        	
                 

              	
                7.10

              	
                Use
                  of Proceeds 

              	
                44

              

      

      
        	
                 

              	
                7.11

              	
                Changes
                  to Inter-Company Note or Other Debt
                  Documents 

              	
                44

              

      

       

      
        	
                8.

              	
                NEGATIVE
                  COVENANTS OF CCC 

              	
                45

              

      

       

      
        	
                 

              	
                8.1

              	
                Liens,
                  Etc 

              	
                45

              

      

      
        	
                 

              	
                8.2

              	
                Debt 

              	
                45

              

      

      
        	
                 

              	
                8.3

              	
                Merger,
                  Consolidation 

              	
                46

              

      

      
        	
                 

              	
                8.4

              	
                Sale
                  of Assets 

              	
                46

              

      

      
        	
                 

              	
                8.5

              	
                Restricted
                  Payment| 

              	
                47

              

      

      
        	
                 

              	
                8.6

              	
                Securities
                  Credit Regulations 

              	
                47

              

      

      
        	
                 

              	
                8.7

              	
                Nature
                  of Business 

              	
                47

              

      

      
        	
                 

              	
                8.8

              	
                Transactions
                  with Related Parties 

              	
                47

              

      

      
        	
                 

              	
                8.9

              	
                Hazardous
                  Materials 

              	
                47

              

      

      
        	
                 

              	
                8.10

              	
                Use
                  of Proceeds 

              	
                48

              

      

      
        	
                 

              	
                8.11

              	
                Other
                  Documents 

              	
                48

              

      

       

      
        	
                9.

              	
                EVENTS
                  OF DEFAULT; REMEDIES 

              	
                48

              

      

       

      
        	
                 

              	
                9.1

              	
                Failure
                  to Pay Obligations When Due 

              	
                48

              

      

      
        	
                 

              	
                9.2

              	
                Intentionally
                  Omitted 

              	
                48

              

      

      
        	
                 

              	
                9.3

              	
                Failure
                  to Pay Other Debt 

              	
                48

              

      

      
        	
                 

              	
                9.4

              	
                Misrepresentation
                  or Breach of Warranty 

              	
                49

              

      

      
        	
                 

              	
                9.5

              	
                Violation
                  of Certain Covenants 

              	
                49

              

      

      
        	
                 

              	
                9.6

              	
                Violation
                  of Other Covenants, Etc 

              	
                49

              

      

      
        	
                 

              	
                9.7

              	
                Bankruptcy
                  and Other Matters 

              	
                49

              

      

      
        	
                 

              	
                9.8

              	
                Dissolution 

              	
                49

              

      

      
        	
                 

              	
                9.9

              	
                Undischarged
                  Judgment 

              	
                50

              

      

      
        	
                 

              	
                9.10

              	
                Loan
                  Documents 

              	
                50

              

      

      
        	
                 

              	
                9.11

              	
                Change
                  of Control 

              	
                50

              

      

      
        	
                 

              	
                9.12

              	
                Other
                  Remedies 

              	
                50

              

      

      
        	
                 

              	
                9.13

              	
                Remedies
                  Cumulative 

              	
                50

              

      

       

      
        	
                10.

              	
                THE
                  ADMINISTRATIVE AGENT 

              	
                51

              

      

       

      
        	
                 

              	
                10.1

              	
                Authorization
                  and Action 

              	
                51

              

      

      
        	
                 

              	
                10.2

              	
                Administrative
                  Agent’s Reliance, Etc 

              	
                51

              

      

      
        	
                 

              	
                10.3

              	
                Defaults 

              	
                52

              

      

      
        
                
        

            
              	 	
                       

                      -iii- 

                    	                

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              OF
              CONTENTS      
      

                    (continued)      
      

                                                                                                                         Page      
      

                    
      
    

        

      

      
        	
                 

              	
                10.4

              	
                HVB
                  and Affiliates 

              	
                52

              

      

      
        	
                 

              	
                10.5

              	
                Non-Reliance
                  on Administrative Agent and Other Banks 

              	
                52

              

      

      
        	
                 

              	
                10.6

              	
                Indemnification 

              	
                52

              

      

      
        	
                 

              	
                10.7

              	
                Successor
                  Administrative Agent 

              	
                53

              

      

      
        	
                 

              	
                10.8

              	
                Administrative
                  Agent’s Reliance 

              	
                53

              

      

       

      
        	
                11.

              	
                GUARANTY 

              	
                54

              

      

       

      
        	
                 

              	
                11.1

              	
                Guaranty 

              	
                54

              

      

      
        	
                 

              	
                11.2

              	
                Guaranty
                  Absolute 

              	
                54

              

      

      
        	
                 

              	
                11.3

              	
                Waivers
                  and Acknowledgments 

              	
                55

              

      

      
        	
                 

              	
                11.4

              	
                Subrogation| 

              	
                56

              

      

      
        	
                 

              	
                11.5

              	
                Subordination 

              	
                56

              

      

      
        	
                 

              	
                11.6

              	
                Continuing
                  Guaranty 

              	
                57

              

      

       

      
        	
                12.

              	
                MISCELLANEOUS 

              	
                57

              

      

       

      
        	
                 

              	
                12.1

              	
                Amendments,
                  Waivers, Etc 

              	
                57

              

      

      
        	
                 

              	
                12.2

              	
                Reimbursement
                  of Expenses 

              	
                59

              

      

      
        	
                 

              	
                12.3

              	
                Notices 

              	
                59

              

      

      
        	
                 

              	
                12.4

              	
                Governing
                  Law 

              	
                62

              

      

      
        	
                 

              	
                12.5

              	
                Waiver
                  of Jury Trial| 

              	
                62

              

      

      
        	
                 

              	
                12.6

              	
                Consent
                  to Jurisdiction 

              	
                62

              

      

      
        	
                 

              	
                12.7

              	
                Survival
                  of Representations, Warranties and
                  Covenants 

              	
                63

              

      

      
        	
                 

              	
                12.8

              	
                Counterparts 

              	
                63

              

      

      
        	
                 

              	
                12.9

              	
                Severability 

              	
                63

              

      

      
        	
                 

              	
                12.10    
                  Descriptive
                  Headings                                                                                            63

              

      

      
        	
                 

              	
                12.11    
                  Accounting Terms                                                                                
                  64

              

      

      
        	
                 

              	
                12.12    
                  Limitation of
                  Liability                                                                                           
                  64

              

      

      
        	
                 

              	
                12.13  
                   
                  Set-Off                                                                                                                                                                                                                                                                             
                  64

              

      

      
        	
                 

              	
                12.14    
                  Sale or
                  Assignment                                                                                                                                                                                                                                                      
                  64

              

      

      
        	
                 

              	
                12.15    
                  Interest                                                                                                                                                                                                                                                                           
                   68

              

      

      
        	
                 

              	
                12.16    
                  Indemnification                                                                                                                                                                                                                                                             
                   69

              

      

      
        	
                 

              	
                12.17    
                  Payments Set
                  Aside                                                                                                                                                                                                                                                      
                  70

              

      

      
        	
                 

              	
                12.18    
                  Loan Agreement
                  Controls                                                                                                                                                                                                                                          
                   70

              

      

      
        	
                 

              	
                12.19    
                  Obligations
                  Several                                                                                                                                                                                                                                                      
                  70

              

      

      
        	
                 

              	
                12.20   
                  Final
                  Agreement                                                                                                                                                                                                                                                            
                  70

              

      

      

      
        
                
        

            
              	 	
                       

                      -iv- 

                    	                

                                                            NEWY1\8114089.7                                  
              

            
      
      

                    
      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      Annex
        1                      Commitments

       

      Exhibit
        A                      Note

      Exhibit
        B                      Assignment
        and Acceptance

      

      Schedule
        3.1               Subsidiaries

      Schedule
        3.10             Tax
        Matters

      Schedule
        3.14             ERISA
        Matters

      Schedule
        3.17             Environmental
        Matters

      

      

      
        
                

                    8059018-6      
      

                              NEWY1\8114089.7              
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      CREDIT
        AGREEMENT

       

      AMENDED
        AND RESTATED CREDIT AGREEMENT dated as of June 29, 2007 among TRUNKLINE LNG
        HOLDINGS LLC a limited liability company organized under the laws of Delaware
        (the “Borrower”), PANHANDLE EASTERN PIPE LINE COMPANY, LP, a
        limited partnership organized under the laws of Delaware (“Panhandle
        Eastern”), CROSSCOUNTRY CITRUS, LLC, a limited liability company
        organized under the laws of Delaware (“CCC”), the financial
        institutions listed on the signature pages hereof and any other Person that
        shall have become a party hereto pursuant to an Assignment and Acceptance,
        other
        than any such Person that ceases to be a party hereto pursuant to an Assignment
        and Acceptance  (collectively, the “Banks” and,
        individually, a “Bank”); BAYERISCHE HYPO- UND VEREINSBANK AG,
        NEW YORK BRANCH (“HVB”), in its capacity as administrative
        agent (together with its successors and assigns in such capacity, the
“AdministrativeAgent”) for the Banks
        hereunder, Bank of America, N.A. as the Syndication Agent (the
“Syndication Agent”), JPMorgan Chase Bank, N.A., Bayerische
        Landesbank, New York Branch and Mizuho Corporate Bank Ltd., as the
        Co-Documentation Agents (the “Co-Documentation Agents”), and
        Unicredit Markets & Investment Banking acting through HVB and Banc of
        America Securities LLC (“BAS”) as the joint lead arrangers and
        joint book managers (collectively, the “Joint Lead Arrangers”
and “Joint Book Managers”):

       

      PRELIMINARY
        STATEMENTS:

       

      1.           Pursuant
        to the Original Credit Agreement (as defined below), the Borrower obtained
        a
        senior unsecured term loan in an aggregate principal amount of $465,000,000,
        which amount was subsequently reduced to $442,848,206.99.  The
        Borrower desires to amend the Original Credit Agreement to extend the maturity,
        change the pricing, and change certain other terms and conditions of the
        senior
        unsecured term loan financing provided thereunder (as so amended, the
“Financing”).

       

      2.           The
        Banks have indicated their willingness to provide the Financing, but only
        on and
        subject to the terms and conditions of this Agreement, including the guaranty
        set forth herein.

       

      NOW,
        THEREFORE, in consideration of the premises and of the mutual covenants and
        agreements contained herein, the parties hereto hereby agree as
        follows:

       

      1.                      CERTAIN
        DEFINITIONS.

       

      1.1             Defined
        Terms.  As used in this Agreement, the following terms shall
        have the following meanings:

       

      “Administrative
        Agent” shall have the meaning set forth in the preamble
        hereto.

       

      “Affiliate”
        shall mean any Person controlling, controlled by or under common control
        with
        any other Person.  For purposes of this definition, “control”
(including “controlled by” and “under common control with”) shall mean the
        possession, directly or indirectly, of the power to

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      direct
        or
        cause the direction of the management and policies of such Person, whether
        through the ownership of voting securities or otherwise.  If any
        Person shall own, directly or indirectly, beneficially or of record, twenty
        percent (20%) or more of the voting equity (whether outstanding capital stock,
        partnership interests or otherwise) of another Person, such Person shall
        be
        deemed to be an Affiliate.

       

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

       

      “Alternate
        Base Rate” shall mean, for any day, a rate per annum equal to the
        greater of: (a) the Prime Rate in effect on such day and (b) 0.50% per annum
        above the Federal Funds Rate in effect on such day.  The Alternate
        Base Rate is an index rate and is not necessarily intended to be the lowest
        or
        best rate of interest charged to other customers in connection with extensions
        of credit or to other banks.  Any change in the Alternate Base Rate
        due to a change in the Prime Rate or the Federal Funds Rate shall be effective
        from and including the effective date of such change in the Prime Rate or
        the
        Federal Funds Rate, respectively.

       

      “Alternate
        Base Rate Loan” shall mean any Loan which bears interest as described
        in Section 2.6(a)(i) (Interest).

       

      “Applicable
        Lending Office” shall mean, with respect to each Bank, such Bank’s (a)
        Domestic Lending Office in the case of an Alternate Base Rate Loan; and (b)
        Eurodollar Lending Office in the case of a Eurodollar Rate Loan.

       

      “Applicable
        Margin” shall mean with respect to (a) Alternate Base Rate Loans, a
        percentage per annum set forth below under the caption “Alternate Base Rate
        Loan” and (b) Eurodollar Rate Loans, subject to the provisos set forth
        below, a percentage per annum set forth below under the caption “Eurodollar Rate
        Loan,” in each case determined by reference to the rating of Panhandle Eastern’s
        unsecured, non-credit enhanced Senior Funded Debt (effective from and after
        the
        date the applicable change of such a debt rating is first announced by the
        applicable rating agency):

       

      
        	
                 

                Category

                 

              	
                Rating
                  of Panhandle Eastern’s unsecured, non-credit enhanced Senior Funded
                  Debt

              	
                Eurodollar
                  Rate Loan

              	
                Alternate
                  Base Rate Loan

              
	
                 

                A

              	
                Equal
                  to or higher than Baa1 by Moody’s Investor Service, Inc. / BBB+ by
                  Standard and Poor’s Ratings Group

              	
                0.350%

              	
                0%

              
	
                B

              	
                Baa2
                  by Moody’s Investor Service, Inc. /

                BBB
                  by Standard and Poor’s Ratings Group

              	
                0.450%

              	
                0%

              
	
                C

              	
                Baa3
                  by Moody’s Investor Service, Inc. /

                BBB-
                  by Standard and Poor’s Ratings Group

              	
                0.550%

              	
                0%

              
	
                D

              	
                Ba1
                  by Moody’s Investor Service, Inc. /

                BB+
                  by Standard and Poor’s Ratings Group

              	
                0.875%

              	
                0%

              
	
                E

              	
                Below
                  Ba1 by Moody’s Investor Service, Inc. /

                BB+
                  by Standard and Poor’s Ratings Group

              	
                1.125%

              	
                0.125%

              

      

      
        
                

                              
                            
      

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      provided
        that, upon the occurrence of an SUG Change of Control, the Applicable Margin
        for
        Eurodollar Rate Loans and for Base Rate Loans shall be increased by (i) when
        the
        applicable rating category is A, B, D or E, 1.000% above the Applicable Margin
        otherwise in effect at such time with respect to all interest periods or
        portions of interest periods ending on or before April 4, 2008 and 1.500%
        above
        the Applicable Margin otherwise in effect at such time with respect to all
        interest periods or portions of interest periods ending after April 4, 2008
        or
        (ii) when the applicable rating category is C, 1.075% above the Applicable
        Margin otherwise in effect at such time with respect to all interest periods
        or
        portions of interest periods ending on or before April 4, 2008 and 1.575%
        above
        the Applicable Margin otherwise in effect at such time with respect to all
        interest periods or portions of interest periods ending after April 4, 2008,
        in
        each case commencing 10 Business Days after the occurrence of the SUG Change
        of
        Control, unless such increase in Applicable Margin shall have been waived
        in
        writing by the Required Banks.

       

      Notwithstanding
        the foregoing provisions, in the event that ratings of Panhandle Eastern’s
        unsecured, non-credit enhanced Senior Funded Debt under Standard & Poor’s
        Ratings Group and under Moody’s Investor Service, Inc. fall within different
        rating categories which are not functional equivalents, the Applicable Margin
        shall be based on the higher of such ratings if there is only one category
        differential between the functional equivalents of such ratings, and if there
        is
        a two category differential between the functional equivalents of such ratings,
        the component of pricing from the grid set forth above shall be based on
        the
        rating category which is then in the middle of or between the two category
        ratings which are then in effect, and if there is greater than a two category
        differential between the functional equivalents of such ratings, the component
        of pricing from the grid set forth above shall be based on the rating category
        which is then one rating category below the highest of the two category ratings
        which are then in effect. Additionally, in the event that Panhandle Eastern
        withdraws from having its unsecured, non-credit enhanced Senior Funded Debt
        being rated by Moody’s Investor Service, Inc. or Standard and Poor’s Ratings
        Group, so that one or both of such ratings services fails to rate Panhandle
        Eastern’s unsecured, non-credit enhanced Senior Funded Debt, (a) the Applicable
        Margin for all Eurodollar Rate Loans for all Interest Periods commencing
        thereafter shall be 1.125% and (b) the Applicable Margin for all Alternate
        Base
        Rate Loans shall be 0.125% effective immediately, in each case continuing
        until
        such time as Panhandle Eastern subsequently causes its unsecured, non-credit
        enhanced Senior Funded Debt to be rated by both of said ratings
        services.

       

      “Approved
        Fund” shall mean any Person (other than a natural person) that is
        engaged in making, purchasing, holding or investing in bank loans and similar
        extensions of credit in the ordinary course of its business and that is
        administered or managed by (a) a Bank, (b) an Affiliate of a Bank or (c)
        an
        entity or an Affiliate of an entity that administers or manages a
        Bank.

       

      “Assignment
        and Acceptance” shall mean and Assignment and Acceptance substantially
        in the form of Exhibit B hereto.

       

      “Attributable
        Indebtedness” shall mean, with respect to any Sale-Leaseback
        Transaction, the present value (discounted at the rate set forth or implicit
        in
        the terms of the lease included in such Sale-Leaseback Transaction) of the
        total
        obligations of the lessee for rental payments (other than amounts required
        to be
        paid on account of taxes, maintenance, repairs,

       

      
        
                

                              
                            
      

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      insurance,
        assessments, utilities, operating and labor costs and other items that do
        not
        constitute payments for property rights) during the remaining term of the
        lease
        included in such Sale-Leaseback Transaction (including any period for which
        such
        lease has been extended).  In the case of any lease that is terminable
        by the lessee upon payment of a penalty, the Attributable Indebtedness shall
        be
        the lesser of the (a) Attributable Indebtedness determined assuming termination
        on the first date such lease may be terminated (in which case the Attributable
        Indebtedness shall also include the amount of the penalty, but no rent shall
        be
        considered as required to be paid under such lease subsequent to the first
        date
        on which it may be so terminated) and (b) the Attributable Indebtedness
        determined assuming no such termination.

       

      “Bank”
        shall have the meaning set forth in the preamble hereto and shall include
        the
        Administrative Agent, in its individual capacity and each Continuing
        Bank.

       

      “BAS”
        shall have the meaning given in the preamble hereof.

       

      “Borrower”
        shall have the meaning set forth in the preamble hereto.

       

      “Business
        Day” shall mean a day when the Administrative Agent is open for
        business, provided that, if the applicable Business Day relates to any
        Eurodollar Rate Loan, it shall mean a day when the Administrative Agent is
        open
        for business and banks are open for business in the London interbank market
        and
        in New York City.

       

      “Capital
        Lease” shall mean any lease of any Property (whether real, personal, or
        mixed) which, in conformity with GAAP, is accounted for as a capital lease
        on
        the balance sheet of the lessee.

       

      “Capitalized
        Lease Obligations” shall mean, for any Person, any of their obligations
        that should, in accordance with GAAP, be recorded as Capital
        Leases.

       

      “CCC”
        shall have the meaning set forth in the preamble hereto.

       

      “Change
        in Law” shall mean (a) the adoption of any law, rule or regulation
        after the date of this Agreement, (b) any change in any law, rule or regulation
        or in the interpretation or application thereof by any Governmental Authority
        after such date or (c) compliance by any Bank with any request, guideline
        or
        directive (whether or not having the force of law) of any Governmental Authority
        made or issued after such date.

       

      “CERCLA”
        shall mean the Comprehensive Environmental Response, Compensation and Liability
        Act of 1980 (as amended by the Superfund Amendments and Reauthorization Act
        of
        1986, 42 U.S.C.A. § 9601 et seq.), as further amended from time to
        time, and any and all rules and regulations issued or promulgated
        thereunder.

       

      “Citrus
        Corp.” shall mean Citrus Corp., a Delaware corporation.

       

      “Closing
        Date” shall mean the date on which each of the conditions precedent set
        forth in Section 4 (Conditions to Funding) shall have been satisfied or waived
        by the Banks.

       

      
        
                

                              
                            
      

                              NEWY1\8114089.7              
    

          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      “Code”
        shall mean the Internal Revenue Code of 1986, as amended, as now or hereafter
        in
        effect, together with all regulations, rulings and interpretations thereof
        or
        thereunder issued by the Internal Revenue Service.

       

      “Commitment”
        shall mean, with respect to any Bank, the commitment of such Bank to make
        a Loan
        on the Closing Date, in the amount set forth opposite such Bank’s name on
Annex I hereto, and the aggregate amount of all the Commitments is
        $442,848,206.99.

       

      “Consolidated”
        shall refer to the consolidation of accounts in accordance with
        GAAP.

       

      “Consolidated
        Net Income” of any Person shall mean, for any period, the aggregate net
        income (or loss) from continuing operations of such Person and its Subsidiaries
        on a Consolidated basis.

       

      “Consolidated
        Net Tangible Assets” shall mean, at any date of determination, the
        total amount of assets of Panhandle Eastern and its Subsidiaries after deducting
        therefrom:

       

      (a)           all
        current liabilities (excluding (i) any current liabilities that by their
        terms
        are extendable or renewable at the option of the obligor thereon to a time
        more
        than 12 months after the time as of which the amount thereof is being computed,
        and (ii) current maturities of Long-Term Debt); and

       

      (b)           the
        value (net of any applicable reserves) of all goodwill, trade names, trademarks,
        patents and other like intangible assets,

       

      all
        as
        set forth on the Consolidated balance sheet of Panhandle Eastern and its
        Subsidiaries for Panhandle Eastern’s most recently completed fiscal quarter,
        prepared in accordance with GAAP.

       

      “Consolidated
        Total Capitalization” shall mean, at any time, an amount equal to the
        sum of (a) Consolidated Debt for Borrowed Money of Panhandle Eastern and
        its
        Subsidiaries at such time plus (b) an amount equal to the sum of all
        amounts which, in accordance with GAAP, would be included under owner’s equity
        on a Consolidated balance sheet of Panhandle Eastern and its Subsidiaries;
        provided, that consistent with past practice, any loans made to
        Southern Union by Panhandle Eastern up to but not exceeding $50,000,000 in
        the
        aggregate at any time outstanding shall not be deemed to reduce owner’s equity
        for purposes of this definition.

       

      “Continuing
        Bank” means each Existing Bank which provides written notice to the
        Administrative Agent, in form satisfactory to the Administrative Agent, of
        its
        intention to continue as a Bank hereunder and which notice shall specify
        the
        amount of its proposed Commitment and Loans hereunder.

       

      “Conversion”,
        “Convert” and “Converted” each shall refer to
        a conversion of Loans of one Type into Loans of the other Type pursuant to
        Section 2.8 (Conversion of Loans).

       

      “Debt”
        shall mean (without duplication), for any Person, indebtedness for money
        borrowed determined in accordance with GAAP but in any event including (a)
        indebtedness of such Person for borrowed money or arising out of any extension
        of credit to or for the account of such Person (including, without limitation,
        extensions of credit in the form of reimbursement orpayment obligations of
        such
        Person relating to letters of credit issued for the account of such Person)
        or
        for the deferred purchase price of property or services, except indebtedness
        which is owing to trade creditors in the ordinary course of business; (b)
        indebtedness of the kind described in clause (a) of this definition which
        is
        secured by (or for which the holder of such Debt has any existing right,
        contingent or otherwise, to be secured by) any Lien upon or in Property
        (including, without limitation, accounts and contract rights) owned by such
        Person, whether or not such Person has assumed or become liable for the payment
        of such indebtedness or obligations; (c) Capitalized Lease Obligations of
        such
        Person; and (d) obligations under direct or indirect
        Guaranties.  Whenever the definition of Debt is being used herein in
        order to compute a financial ratio or covenant applicable to the consolidated
        business of Panhandle Eastern and its Subsidiaries, Debt which is already
        included in such computation by virtue of the fact that it is owed by a
        Subsidiary of Panhandle Eastern will not also be added by virtue of the fact
        that Panhandle Eastern has executed a guaranty with respect to such Debt
        that
        would otherwise require such guaranteed indebtedness to be considered Debt
        hereunder.  Nothing contained in the foregoing sentence is intended to
        limit the other provisions of this Agreement which contain limitations on
        the
        amount and types of Debt which may be incurred by any Loan Party.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      “Debt
        for Borrowed Money” of any Person shall mean, at any date of
        determination, the sum without duplication of (i) all items that, in accordance
        with GAAP, would be classified as indebtedness on a Consolidated balance
        sheet
        of such Person, (ii) all Guarantees by such Person of Debt of another Person
        and
        (iii) all letter of credit reimbursement obligations of such
        Person.

       

      “Debt/Capitalization
        Ratio” shall mean, as of any date of determination, the ratio of (a)
        the aggregate amount of outstanding Consolidated Debt for Borrowed Money
        of
        Panhandle Eastern and its Subsidiaries as of such date to (b) Consolidated
        Total
        Capitalization of Panhandle Eastern and its Subsidiaries as of such
        date.

       

      “Debtor
        Laws” shall mean all applicable liquidation, conservatorship,
        bankruptcy, moratorium, arrangement, receivership, insolvency, reorganization,
        or similar laws, or general equitable principles from time to time in effect
        affecting the rights of creditors generally.

       

      “Default”
        shall mean any of the events specified in Section 9 (Events of Default;
        Remedies), whether or not there has been satisfied any requirement in connection
        with such event for the giving of notice, or the lapse of time, or the happening
        of any further condition, event or act.

       

      “Dollars”
        and “$” shall mean lawful currency of the United States of
        America.

       

      “Domestic
        Lending Office” shall mean, with respect to each Bank, the office of
        such Bank located at its “Address for Notices” set forth below the name of such
        Bank on Annex 1 hereto or such other office of such Bank as such Bank may
        from time to time specify to the Borrower and the Administrative
        Agent.

       

      “Eligible
        Assignee” shall mean: (i) any Bank, or any Affiliate of any Bank, any
        Approved Fund, or any institution 100% of the voting stock of which is directly,
        or indirectly owned by such Bank or by the immediate or remote parent of
        such
        Bank; or (ii) a commercialbank, a foreign branch of a United States commercial
        bank, a domestic branch of a foreign commercial bank or other financial
        institution having in each case assets in excess of $1,000,000,000.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      “Environmental
        Law” shall mean (a) CERCLA, (b) the Resource Conservation and Recovery
        Act (as amended by the Hazardous and Solid Waste Amendment of 1984, 42
        U.S.C.A.  § 6901 et seq) as amended from time to time and any
        and all rules and regulations promulgated thereunder (“RCRA”); (c) the Clean Air
        Act, 42 U.S.C.A. § 7401 et seq., as amended from time to time, and any
        and all rules and regulations promulgated thereunder; (d) the Clean Water
        Act of
        1977, 33 U.S.CA § 1251 et seq., as amended from time to time, and any
        and all rules and regulations promulgated thereunder; (e) the Toxic Substances
        Control Act, 15 U.S.C.A. § 2601 et seq., as amended from time to time,
        and any and all rules and regulations promulgated thereunder; or (f) any
        other
        federal or state law, statute, rule, or emulation enacted in connection with
        or
        relating to the protection or regulation of the environment (including, without
        limitation, those laws, statutes, rules, and regulations regulating the
        disposal, removal, production, storing, refining, handling, transferring,
        processing, or transporting of Hazardous Materials) and any rules and
        regulations issued or promulgated in connection with any of the foregoing
        by any
        governmental authority, and “Environmental Laws” shall mean
        each of the foregoing.

       

      “EPA”
        shall mean the Environmental Protection Agency, or any successor
        organization.

       

      “Equity
        Interests” shall mean, with respect to any Person, shares of capital
        stock of (or other ownership or profit interests in) such Person, warrants,
        options or other rights for the purchase or other acquisition from such Person
        of shares of capital stock of (or other ownership or profit interests in)
        such
        Person, securities convertible into or exchangeable for shares of capital
        stock
        of (or other ownership or profit interests in) such Person or warrants, rights
        or options for the purchase or other acquisition from such Person of such
        shares
        (or such other interests), and other ownership or profit interests in such
        Person (including, without limitation, partnership, member or trust interests
        therein), whether voting or non-voting, and whether or not such shares,
        warrants, options, rights or other interests are authorized or otherwise
        existing on any date of determination.

       

      “ERISA”
        shall mean the Employee Retirement Income Security Act of 1974, as amended
        from
        time to time, and all rules, regulations, rulings and interpretations thereof
        issued by the Internal Revenue Service or the Department of Labor
        thereunder.

       

      “Eurocurrency
        Liabilities” shall have the meaning assigned to that term in Regulation
        D of the Board of Governors of the Federal Reserve System, as in effect from
        time to time.

       

      “Eurodollar
        Lending Office” shall mean, with respect to each Bank, the office of
        such Bank located at its “Address for Notices” set forth below the name of such
        Bank on Annex 1 hereto, or such other office of such Bank as such Bank
        may from time to time specify to the Borrower and the Administrative
        Agent.

       

      “Eurodollar
        Rate” shall mean, for any Interest Period in effect for each Eurodollar
        Rate Loan comprising part of the same Borrowing, an interest rate per annum
        equal to the rate determined by the Administrative Agent to be the offered
        rate
        which appears on the displaydesignated as page “BBAM1” on the Bloomberg service
        (or on any successor or substitute page of such display, or any successor
        to or
        substitute for such display, providing rate quotations comparable to those
        currently provided on such page of such screen, as determined by the
        Administrative Agent from time to time for purposes of providing quotations
        of
        interest rates applicable to dollar deposits in the London interbank market)
        at
        approximately 11:00 a.m., London time, two Business Days prior to the
        commencement of such Interest Period, as the rate for dollar deposits with
        a
        maturity comparable to such Interest Period.  In the event that such
        rate is not available at such time for any reason, then the “Eurodollar Rate”
with respect to such Eurodollar Rate Loans for such Interest Period shall
        be the
        rate at which dollar deposits of $5,000,000 and for a maturity comparable
        to
        such Interest Period are offered by the principal London office of the
        Administrative Agent in immediately available funds in the London interbank
        market at approximately 11:00 a.m., London time, two Business Days prior
        to the
        commencement of such Interest Period.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      “Eurodollar
        Rate Loan” shall mean a Loan that bears interest as provided in Section
        2.6(a)(ii) (Interest).

       

      “Event
        of Default” shall mean any of the events specified in Section 9 (Events
        of Default; Remedies), provided that there has been satisfied any
        requirement in connection with such event for the giving of notice, or the
        lapse
        of time, or the happening of any further condition, event or act.

       

      “Existing
        Banks” shall mean the banks as defined  under the Original
        Credit Agreement.

       

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

       

      “Fee
        Letter” shall mean that certain fee letter dated as of the date hereof
        among the Borrower, the Guarantors, HVB and BAS.

       

      “Funded
        Debt” shall mean all Debt of a Person which matures more than one year
        from the date of creation or matures within one year from such date but is
        renewable or extendible, at the option of such Person, by its terms or by
        the
        terms of any instrument or agreement relating thereto, to a date more than
        one
        year from such date or arises under a revolving credit or similar agreement
        which obligates Banks to extend credit during a period of more than one year
        from such date, including, without limitation, all amounts of any Funded
        Debt
        required to be paid or prepaid within one year from the date of determination
        of
        the existence of any such Funded Debt.

       

      “GAAP”
        has the meaning specified in Section 1.3 (Accounting Terms).

       

      “Governmental
        Authority” shall mean any (domestic or foreign) federal, state, county,
        municipal, parish, provincial, or other government, or any department,
        commission, board, court,

       

      
        
                

                              
                            
      

                              NEWY1\8114089.7              
    

          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      agency
        (including, without limitation, the EPA), or any other instrumentality of
        any of
        them or any other political subdivision thereof, and any entity exercising
        executive, legislative, judicial, regulatory, or administrative functions
        of, or
        pertaining to, government, including, without limitation, any arbitration
        panel,
        any court, or any commission.

       

      “Governmental
        Requirement” shall mean any order, permit, law, statute (including,
        without limitation, any Environmental Protection Statute), code, ordinance,
        rule, regulation, certificate, or other direction or requirement of any
        Governmental Authority.

       

      “Guaranteed
        Obligations” shall have the meaning set forth in Section
        11.1.

       

      “Guarantor”
        shall mean each of Panhandle Eastern and CCC.

       

      “Guaranty”
        shall mean, with respect to any Person, any obligation, contingent or otherwise,
        of such Person directly or indirectly guaranteeing any Debt of another Person,
        including, without limitation, by means of an agreement to purchase or pay
        (or
        advance or supply funds for the purchase or payment of) such Debt or to maintain
        financial covenants, or to assure the payment of such Debt by an agreement
        to
        make payments in respect of goods or services regardless of whether delivered
        or
        to purchase or acquire the Debt of another, or otherwise, provided that
        the term “Guaranty” shall not include endorsements for deposit or collection in
        the ordinary course of business.

       

      “Hazardous
        Materials” shall mean any substance which, pursuant to any
        Environmental Laws, requires special handling in its collection, use, storage,
        treatment or disposal, including but not limited to any of the following:
        (a)
        any “hazardous waste” as defined by RCRA; (b) any “hazardous substance” as
        defined by CERCLA; (c) asbestos; (d) polychlorinated biphenyls; (e) any
        flammables, explosives or radioactive materials; and (f) any substance, the
        presence of which on any of Loan Parties’ properties is prohibited by any
        Governmental Authority.

       

      “Highest
        Lawful Rate” shall mean, with respect to each Bank, the maximum
        non-usurious interest rate, if any, that at any time or from time to time
        may be
        contracted for, taken, reserved, charged, or received with respect to the
        Notes
        or on other amounts, if any, due to such Bank pursuant to this Agreement,
        under
        laws applicable to such Bank which are presently in effect, or, to the extent
        allowed by law, under such applicable laws which may hereafter be in effect
        and
        which allow a higher maximum non-usurious interest rate than applicable laws
        now
        allow.

       

      “HVB”
        shall have the meaning set forth in the preamble.

       

      “Indemnified
        Parties” shall have the meaning set forth in Section 12.16
        (Indemnification).

       

      “Inter-Company
        Loan” shall mean the loan made by the Borrower to CCC pursuant to the
        Inter-Company Note.

       

      “Inter-Company
        Note” shall mean the note dated as of December 1, 2006 by CCC in favor
        of Borrower.

       

      
        
                

                              
                            
      

                              NEWY1\8114089.7              
    

          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      “Interest
        Period” shall mean, for each Eurodollar Rate Loan comprising part of
        the same borrowing, the period commencing on the date of such Eurodollar
        Rate
        Loan or the date of the Conversion of any Alternate Base Rate Loan into such
        Eurodollar Rate Loan, and ending on the last day of the period selected by
        the
        Borrower pursuant to the provisions below and, thereafter, each subsequent
        period commencing on the last day of the immediately preceding Interest Period
        and ending on the last day of the period selected by the Borrower pursuant
        to
        the provisions below.  The duration of each such Interest Period shall
        be one, two, three or six months (or, if available to each Bank, nine or
        twelve
        months), as the Borrower may, upon notice received by the Administrative
        Agent
        not later than 11:00 A.M. (New York City time) on the third Business Day
        prior
        to the first day of such Interest Period, select; provided,
however, that:

       

      (a)           whenever
        the last day of any Interest Period would otherwise occur on a day other
        than a
        Business Day, the last day of such Interest Period shall be extended to occur
        on
        the next succeeding Business Day, provided, however, that, if
        such extension would cause the last day of such Interest Period to occur
        in the
        next following calendar month, the last day of such Interest Period shall
        occur
        on the next preceding Business Day; and

       

      (b)           whenever
        the first day of any Interest Period occurs on a day of an initial calendar
        month for which there is no numerically corresponding day in the calendar
        month
        that succeeds such initial calendar month by the number of months equal to
        the
        number of months in such Interest Period, such Interest Period shall end
        on the
        last Business Day of such succeeding calendar month.

       

      “Inventory”
        shall mean, with respect to the Borrower or any Subsidiary, all of such Person’s
        now owned or hereafter acquired or created inventory in all of its forms
        and of
        every nature, wherever located, whether acquired by purchase, merger, or
        otherwise, and all raw materials, work in process therefor and finished goods
        thereof, and all supplies, materials, and products of every nature and
        description used, usable, or consumed in connection with the manufacture,
        packing, shipping, advertising, selling, leasing, furnishing, or production
        of
        such goods, and shall include, in any event, all “inventory” (within the meaning
        of such term in the Uniform Commercial Code in effect in any applicable
        jurisdiction), whether in mass or joint, or other interest or right of any
        kind
        in goods which are returned to, repossessed by, or stopped in transit by
        such
        Person, and all accessions to any of the foregoing and all products of any
        of
        the foregoing.

       

      “Investment”
        of any Person shall mean any investment so classified under GAAP, and, whether
        or not so classified, includes (a) any direct or indirect loan advance made
        by
        it to any other Person; (b) any direct or indirect Guaranty for the benefit
        of
        such Person; (c) any capital contribution to any other Person; and (d) any
        ownership or similar interest in any other Person; and the amount of any
        Investment shall be the original principal or capital amount thereof
        (plus any subsequent principal or capital amount) minus all cash
        returns of principal or capital thereof.

       

      “Lien”
        shall mean any mortgage, deed of trust, pledge, security interest, encumbrance,
        lien (including without limitation, any such interest arising under any
        Environmental Law), or similar charge of any kind (including without limitation,
        any agreement to give any of theforegoing, any conditional sale or other
        title
        retention agreement or any lease in the nature thereof), or the interest
        of the
        lessor under any Capital Lease.

      
        
          
          

        

        
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      “Loan”
        shall mean the term loan (or loans in the case the Borrower makes more than
        one
        Type of Borrowing) from each Bank to the Borrower under Section
        2.1.

       

      “Loan
        Document” shall mean this Agreement, any Note, the Fee Letter and any
        other document, agreement or instrument now or hereafter executed and delivered
        by any Loan Party in connection with any of the transactions contemplated
        by any
        of the foregoing, as any of the foregoing may hereafter be amended, modified,
        or
        supplemented, and “Loan Documents” shall mean, collectively,
        each of the foregoing.

       

      “Loan
        Party” shall mean each of CCC, Panhandle Eastern and the Borrower and
        its Subsidiaries.

       

      “Long-Term
        Debt” shall mean any Debt that, in accordance with GAAP, constitutes
        (or, when incurred, constituted) a long-term liability.

       

      “Majority
        Banks” shall mean at any time Banks holding more than 50% of the unpaid
        principal amounts outstanding under the Loans, or, if no such amounts are
        outstanding, more than 50% of the Pro Rata Percentages.

       

      “Material
        Adverse Change” shall mean, for any Person, any material adverse change
        in the business, operations, financial condition or assets of such Person
        and
        its Subsidiaries, taken as a whole.

       

      “Material
        Adverse Effect” shall mean any material adverse effect on (a) the
        financial condition, business, properties, assets or operations of Panhandle
        Eastern and its Subsidiaries, taken as a whole, or (b) the ability of Panhandle
        Eastern, Borrower or CCC to perform its obligations under this Agreement,
        any
        Note, any other Loan Document or the Inter-Company Note on a timely
        basis.

       

      “Maturity
        Date” shall mean the fifth anniversary of the Closing
        Date.

       

      “Note”
        or “Notes” shall mean a promissory note or notes,
        respectively, of the Borrower, executed and delivered under this
        Agreement.

       

      “Notice
        of Borrowing” shall have the meaning set forth in Section 2.2(a)
        (Making the Loans).

       

      “Obligations”
        shall mean all obligations of Panhandle Eastern, Borrower and CCC to the
        Banks
        under this Agreement, the Notes and all other Loan Documents to which any
        of
        them is a party.

       

      “Officer’s
        Certificate” shall mean a certificate signed in the name of the
        applicable Loan Party, by either its President, one of its Vice Presidents,
        its
        Treasurer, its Secretary, or one of its Assistant Treasurers or Assistant
        Secretaries.

       

      
        
                

                              
                            
      

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      “Original
        Credit Agreement” shall mean the Credit Agreement, dated as of December
        1, 2006, by and among the Borrower, as the borrower, Panhandle Eastern, as
        a
        guarantor, Crosscountry Citrus, LLC, as a guarantor, the financial institutions
        party thereto as banks thereunder from time to time.

       

      “Panhandle
        Eastern” shall have the meaning set forth in the preamble
        hereto.

       

      “Permitted
        Liens” shall mean any of the following Liens:

       

      (c)           Any
        Lien:

       

      (i)           arising
        by reason of deposits with or the giving of any form of security to any
        Governmental Authority in connection with the financing of the acquisition
        or
        construction of property to be used in the business of a Loan
        Party;

       

      (ii)           for
        current taxes and assessments or taxes and assessments not at the time
        delinquent and for which adequate reserves have been established to the extent
        required by GAAP; or

       

      (iii)           for
        taxes and assessments which are delinquent but the validity of which is being
        contested at the time by a Loan Party in good faith and by appropriate
        proceedings and for which adequate reserves have been established to the
        extent
        required by GAAP;

       

      (d)           Leases,
        whether now or hereafter existing, in the ordinary course of business, of
        property and assets now and hereafter owned by a Loan Party (excluding
        Capitalized Leases) and any renewals or extensions thereof;

       

      (e)           Liens
        reserved in leases, or arising by operation of law, for rent and for compliance
        with the terms of the lease in the case of the leasehold estates;

       

      (f)           Liens
        arising by reason of deposits with or the giving of any form of security
        to any
        Governmental Authority or any other governmental body created or approved
        by law
        or governmental regulation for any purpose at any time as required by law
        or
        governmental regulation as a condition to the transaction of any business
        or the
        exercise of any privilege or license, or to enable a Loan Party to maintain
        self-insurance or to participate in any fund for liability on any insurance
        risks or in connection with workmen’s compensation, unemployment insurance, old
        age pensions or other social security or to share in the privileges or benefits
        required for companies participating in such arrangements;

       

      (g)           (i)
        Mechanics’, materialmen’s, warehousemen’s, landlord’s or similar Liens or any
        Lien arising by reason of pledges or deposits to secure payment of workmen’s
        compensation or other insurance or social security legislation, (ii) good
        faith
        deposits or downpayments in connection with tenders or leases of real estate,
        bids or contracts (other than contracts for the payment of money), including
        contracts for the acquisition of machinery and equipment, (iii) deposits
        to
        secure public or statutory obligations, (iv) deposits to secure or in lieu
        of
        surety, stay or appeal bonds, (v) margin

       

      
        
          
          

        

        
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      deposits
        (provided that all such margin deposits shall not exceed $2,000,000 in
        the aggregate at any time) and (vi) deposits as security for the payment
        of
        taxes or assessments or other similar charges;

       

      (h)           Liens
        of any judgments not constituting an Event of Default under Section 9.9
        (Undischarged Judgment);

       

      (i)           Any
        obligation or duties, affecting the property of a Loan Party, to any
        Governmental Authority with respect to any franchise, grant, lease, license,
        permit or similar arrangement with such Governmental Authority;

       

      (j)           Rights
        reserved to or vested in any Governmental Authority by the terms of any right,
        power, franchise, grant, license or permit or by any provision of law, to
        terminate or to require annual or other periodic payments as a condition
        to the
        continuance of such right, power, franchise, grant, license or
        permit;

       

      (k)           Rights
        reserved to or vested in any Governmental Authority to control or regulate
        any
        property of a Loan Party, or to use such property in any manner which does
        not
        materially impair the use of such property for the purpose for which it is
        held
        by a Loan Party;

       

      (l)           Zoning
        laws and ordinances;

       

      (m)           Restrictive
        covenants, easements on, exceptions to or reservations in respect of any
        property of a Loan Party granted or reserved for the purpose of electric
        lines,
        fiber optic lines, water and sewer lines, pipelines, other utilities, roads,
        streets, alleys, highways, railroad purposes, the removal of oil, gas,
        hydrocarbon, coal or other minerals, and other like purposes, or for the
        use of
        real property or interests therein, facilities and equipment, which do not
        materially impair the use thereof for the purposes for which it is held by
        a
        Loan Party, and any and all rents, royalties, reservations, Liens and rights
        or
        interests of third parties, in each case not securing any Debt, arising in
        the
        ordinary course of business of a Loan Party by virtue of any lease or
        exploration, development, drilling, unitization, communitization or operating
        agreement relating to or affecting any oil, gas, hydrocarbon, coal or other
        mineral properties in which a Loan Party has an interest;

       

      (n)           Defects
        or irregularities of title, and inaccuracies of legal descriptions, affecting
        any portion of the property of a Loan Party or any of its Subsidiaries that
        individually or in the aggregate do not materially interfere with the operation,
        value of use of the properties of such Loan Party or such Subsidiaries taken
        as
        a whole;

       

      (o)           Liens
        securing Debt with respect to Debt of any Person that becomes a Subsidiary
        of a
        Loan Party, provided that such Liens were in existence prior to the
        date on which such Person becomes a Subsidiary of such Loan Party and were
        not
        created in contemplation of such Person becoming a Subsidiary of such Loan
        Party;

       

      
        
                

                              
                            
      

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      (p)           Liens
        on any office equipment, data processing equipment (including computer and
        computer peripheral equipment), or motor vehicles purchased in the ordinary
        course of the applicable Loan Party’s business; and

       

      (q)           Liens
        created in the ordinary course of business in favor of banks and other financial
        institutions over credit balances or any bank accounts of a Loan Party held
        at
        such banks or financial institutions.

       

      “Person”
        shall mean an individual, partnership, joint venture, corporation, joint
        stock
        company, bank, trust, unincorporated organization and/or a government or
        any
        department or agency thereof.

       

      “Plan”
        shall mean any plan subject to Title IV of ERISA and maintained for employees
        of
        any Loan Party or of any member of a “controlled group of corporations,” as such
        term is defined in the Code, of which a Loan Party is a member, or any such
        plan
        to which a Loan Party thereof is required to contribute on behalf of its
        employees.

       

      “Prime
        Rate” shall mean, on any day, the rate determined by the Administrative
        Agent and announced to its customers as being its prime rate for that
        day.  Without notice to the Borrower or any other Person, the Prime
        Rate shall change automatically from time to time as and in the amount by
        which
        said Prime Rate shall fluctuate, with each such change to be effective as
        of the
        date of each change in such Prime Rate.  The Prime Rate is a reference
        rate and does not necessarily represent the lowest or best rate actually
        charged
        to any customer.  The Administrative Agent may make commercial or
        other loans at rates of interest at, above or below the Prime Rate.

       

      “Priority
        Obligations Amount” shall mean the sum (without duplication) of (i) all
        Attributable Indebtedness with respect to any Sale-Leaseback Transaction
        entered
        into by Panhandle Eastern or any of its Subsidiaries, (ii) all Debt of Panhandle
        Eastern or any of its Subsidiaries secured by a Lien (other than Liens permitted
        by clauses (a) through (c) of Section 6.2 (Liens, Etc.)) and (iii) all Debt
        of
        Subsidiaries of Panhandle Eastern (other than Borrower or TLNG), other than
        such
        Debt owed to Panhandle Eastern or another Subsidiary.

       

      “Pro-Rata
        Percentage” shall mean with respect to any Bank, a fraction (expressed
        as a percentage), the numerator of which shall be the amount of such Bank’s
        outstanding Loans (or Commitment) and the denominator of which shall be the
        aggregate amount of all the outstanding Loans (or Commitments) of the Banks,
        as
        adjusted from time to time in accordance herewith.

       

      “Property”
        shall mean any interest or right in any kind of property or asset, whether
        real,
        personal, or mixed, owned or leased, tangible or intangible, and whether
        now
        held or hereafter acquired.

       

       “Register”
        shall have the meaning set forth in Section 12.14(d).

       

      “Release”
        shall mean a “release”, as such term is defined in CERCLA.

       

      “Restricted
        Payment” shall mean a Person’s declaration or payment of any dividends,
        the purchase, redemption, retirement, defeasance or other acquisition for
        value
        of any of its

       

      
        
                

                              
                            
      

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      Equity
        Interests now or hereafter outstanding, return any capital to its stockholders,
        partners or members (or the equivalent Persons thereof) as such, making any
        distribution of assets, Equity Interests, obligations or securities to its
        stockholders, partners or members (or the equivalent Persons thereof) as
        such or
        making of any interest payment on any Debt owing to its direct or indirect
        parent (or any equity owner thereof).

       

      “Required
        Banks” shall mean, at any time, Banks holding more than 66 2/3% of the
        aggregate unpaid principal amount of Loans outstanding at such time, or,
        if no
        such principal is outstanding, 66 2/3 or more of the Pro Rata
        Percentage.

       

      “Sale-Leaseback
        Transaction” has the meaning set forth in Section 6.8 (Sales and
        Leasebacks).

       

      “Senior
        Funded Debt” shall mean Funded Debt of Panhandle Eastern excluding Debt
        that is contractually subordinated in right of payment to any other Debt
        of
        Panhandle Eastern.

       

      “Southern
        Union” shall mean Southern Union Company.

       

      “Subsidiary”
        of any Person shall mean any corporation, partnership, joint venture, limited
        liability company, trust or estate of which (or in which) more than 50% of
        (a)
        the issued and outstanding capital stock having ordinary voting power to
        elect a
        majority of the board of directors (or similar board) of such Person
        (irrespective of whether at the time capital stock of any other class or
        classes
        of such Person shall or might have voting power upon the occurrence of any
        contingency), (b) the interest in the capital or profits of such partnership,
        joint venture or limited liability company or (c) the beneficial interest
        in
        such trust or estate is at the time directly or indirectly owned or controlled
        by such Person, by such Person and one or more of its other Subsidiaries
        or by
        one or more of such Person’s other Subsidiaries.

       

      “SUG
        Change of Control” shall occur if any Person or “group” (within the
        meaning of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934,
        as
        amended from time to time, and any successor statute) shall have acquired
        beneficial ownership of 50% or more on a fully diluted basis of the voting
        and/or economic interest in Southern Union.

       

      “TLNG”
        shall mean Trunkline LNG Company, LLC, a Delaware limited liability
        company.

       

      “TWH
        Indebtedness” shall have the meaning set forth in Section 2.13 (Use of
        Proceeds).

       

      “Type”
        shall mean, with respect to any Loan, any Alternate Base Rate Loan
        or
        any Eurodollar Rate Loan.

       

      “Withdrawing
        Bank” means each such Existing Bank that does not communicate to the
        Administrative Agent its intention to be a Continuing Bank.

       

      1.2             Computation
        of Time Periods; Other Definitional Provisions.  In this
        Agreement and the other Loan Documents in the computation of periods of time
        from a specified date to a later specified date, the word
“from” shall mean “from and including” and the
        words

       

      
        
                

                              
                            
      

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      “to”
        and “until” each shall mean “to but
        excluding”.  References in the Loan Documents to any agreement or
        contract “as amended” shall mean and be a reference to such
        agreement or contract as amended, amended and restated, supplemented or
        otherwise modified from time to time in accordance with its terms.

       

      1.3             Accounting
        Terms.  All accounting terms not specifically defined herein
        shall be construed in accordance with generally accepted accounting principles
        in effect from time to time in the United States of America
        (“GAAP”).  If, at any time after the date of this
        Agreement, any material change is made to GAAP or Panhandle Eastern’s, CCC’s or
        the Borrower’s accounting practices that would affect in any material respect
        the determination of compliance with the covenants set forth in this Agreement,
        the Borrower and the Administrative Agent shall negotiate in good faith to
        amend
        any such covenant to restore the Borrower and the Banks to the position they
        occupied before the implementation of such material change in GAAP or accounting
        practices if the Borrower notifies the Administrative Agent of such change
        (or
        if the Administrative Agent notifies the Borrower that the Required Banks
        request an amendment to any such covenant for such purpose); provided
        that, until so amended, such covenant shall continue to be computed on the
        basis
        of GAAP as in effect and applied immediately before such change shall have
        become effective.

       

      2.                      AMOUNTS
        AND TERMS OF THE LOANS

       

      2.1             The
        Loan.  Each Bank severally agrees, on the terms and
        conditions hereinafter set forth, to make a single Loan to the Borrower on
        the
        Closing Date in an amount equal to such Bank’s Commitment at such
        time.  The Borrowing shall consist of the Loans made simultaneously by
        the Banks ratably according to their Commitments.  Amounts borrowed
        under this Section 2.1 and repaid or prepaid may not be reborrowed.

       

      2.2             Making
        of the Loans.  

       

      (a)           The
        Borrowing shall be made on irrevocable notice, given not later than 11:00
        A.M.
        (New York City time) on the third Business Day prior to the date of Borrowing
        if
        the Borrowing consists of Eurodollar Rate Loans, or not later than 9:00 A.M.
        (New York City time) on the date of the Borrowing if the Borrowing consists
        of
        Alternate Base Rate Loans, by the Borrower to the Administrative Agent, which
        shall give to each Bank prompt notice thereof.  The notice of
        Borrowing (the “Notice of Borrowing”) shall be in writing, in
        form and substance satisfactory to the Administrative Agent, specifying therein
        the requested (i) date of the Borrowing, (ii) Type of Loans comprising the
        Borrowing, (iii) aggregate amount of the Borrowing, which shall not exceed
        the
        aggregate amount of the Commitments and (iv) if the Borrowing consists of
        Eurodollar Rate Loans, the initial Interest Period for each such
        Loan.  Each Bank shall, before 11:00 A.M. (New York City time) on the
        date of Borrowing, make available for the account of its Applicable Lending
        Office to the Administrative Agent at the Administrative Agent’s account, in
        same day funds, such Bank’s portion of the Borrowing in accordance with Section
        2.1 (The Loans).  After the Administrative Agent’s receipt of such
        funds and upon fulfillment of the applicable conditions set forth in Section
        4
        (Conditions to Funding), the Administrative Agent will make such
        funds

       

      
        
                

                              
                            
      

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      available
        to the Borrower by electronic transfer of same day funds to the Borrower’s
        account.

       

      (b)           The
        Notice of Borrowing shall be irrevocable and binding on the
        Borrower.  If the Notice of Borrowing specifies the Borrowing is to be
        comprised of Eurodollar Rate Loans, the Borrower shall indemnify each Bank
        against any loss, cost or expense incurred by such Bank as a result of any
        failure to fulfill on or before the date specified in the Notice of Borrowing
        the applicable conditions set forth in Section 4 (Conditions to Funding),
        including, without limitation, any loss, cost or expense incurred by reason
        of
        the liquidation or reemployment of deposits or other funds acquired by such
        Bank
        to fund the Loan to be made by such Bank as part of the Borrowing when such
        Loan, as a result of such failure, is not made on such date.

       

      (c)           Unless
        the Administrative Agent shall have received written notice from a Bank prior
        to
        the date of the Borrowing that such Bank will not make available to the
        Administrative Agent such Bank’s ratable portion of such Borrowing, the
        Administrative Agent may assume that such Bank has made such portion available
        to the Administrative Agent on the date of Borrowing in accordance with clause
        (a) of this Section 2.2 and the Administrative Agent may, in reliance upon
        such
        assumption, make available to the Borrower on such date a corresponding
        amount.  If and to the extent that such Bank shall not have so made
        such ratable portion available to the Administrative Agent, such Bank and
        the
        Borrower severally agree to repay or pay to the Administrative Agent forthwith
        on demand such corresponding amount and to pay interest thereon, for each
        day
        from the date such amount is made available to the Borrower until the date
        such
        amount is repaid or paid to the Administrative Agent, at (i) in the case
        of the
        Borrower, the interest rate applicable at such time under Section 2.6 (Interest)
        to Loans comprising the Borrowing and (ii) in the case of such Bank, the
        Federal
        Funds Rate.  If such Bank shall pay to the Administrative Agent such
        corresponding amount, such amount so paid shall constitute such Bank’s Loan as
        part of the Borrowing for all purposes.

       

      (d)           The
        failure of any Bank to make the Loan to be made by it as part of the Borrowing
        shall not relieve any other Bank of its obligation, if any, hereunder to
        make
        its Loan on the date of the Borrowing, but no Bank shall be responsible for
        the
        failure of any other Bank to make the Loan to be made by such other Bank
        on the
        date of the Borrowing.

       

      2.3             Repayment
        of the Loan.  The Borrower shall repay to the Administrative
        Agent for the ratable account of the Banks the aggregate outstanding principal
        amount of each Bank’s Loan on the Maturity Date.

       

      2.4             Termination
        of the Commitments.  The Commitment of each Bank shall be
        automatically and permanently reduced to $0 simultaneously with the funding
        of
        the Loans on the Closing Date.

       

      2.5             Prepayments.  

       

      (a)           Voluntary
        Prepayments.  The Borrower may, upon at least three Business Days’
irrevocable notice in the case of Eurodollar Rate Loans and at least
        one
        Business Day’s irrevocable notice in the case of Alternate Base Rate Loans, in
        each case to the Administrative Agent stating the proposed date and aggregate
        principal amount of the prepayment, and if such notice is given the Borrower
        shall prepay the outstanding aggregate principal amount of the Loan comprising
        the Borrowing in whole or ratably in part, together with accrued interest
        to the
        date of such prepayment on the aggregate principal amount prepaid;
provided, however, that (i) each partial prepayment shall be
        in an aggregate principal amount of $1,000,000 in the case of Eurodollar
        Rate
        Loans and $1,000,000 in the case of Alternate Base Rate Loans, or in each
        case
        an integral multiple of $1,000,000 in excess thereof and (ii) if any prepayment
        of a Eurodollar Rate Loan is made on a date other than the last day of an
        Interest Period for such Loan, the Borrower shall also pay any amounts owing
        pursuant to Section 12.2(b) (Reimbursement of Expenses-breakage expenses).
        The
        Administrative Agent shall promptly notify each Bank of any notice received
        from
        Borrower pursuant to this Section 2.5.

       

      (b)           Mandatory
        Prepayments.  No later than the first Business Day following the
        date of receipt by Borrower or any of its Subsidiaries of any repayment of
        principal by or on behalf of CCC of the Inter-Company Loan including repayments
        made pursuant to Section 8.5, Borrower shall prepay the Loan in an aggregate
        amount equal to the amount of principal of the Inter-Company Loan so prepaid,
        together with interest on the principal amount of the Loan being prepaid
        that is
        accrued but unpaid to the date of such Loan prepayment hereunder;
provided, that if any prepayment of a Eurodollar Rate Loan is made on a
        date other than the last day of an Interest Period for such Loan, the Borrower
        shall also pay any amounts owing pursuant to Section 12.2(b) (Reimbursement
        of
        Expenses-breakage expenses).

       

      2.6             Interest.  

       

      (a)           The
        Borrower shall pay interest on the unpaid principal amount of each Loan owing
        to
        each Bank from the date of such Loan until such principal amount shall be
        paid
        in full, at the following rates per annum:

       

      (i)           During
        such periods as such Loan is an Alternate Base Rate Loan, a rate per annum
        equal
        at all times to the sum of (a) the Alternate Base Rate in effect from time
        to
        time, plus (b) the Applicable Margin in effect from time to time,
        payable in arrears quarterly on the last day of each March, June, September
        and
        December during such periods and on the date such Alternate Base Rate Loan
        shall
        be Converted or paid in full.

       

      (ii)           During
        such periods as such Loan is a Eurodollar Rate Loan, a rate per annum equal
        at
        all times during each Interest Period for such Loan to the sum of (a) the
        Eurodollar Rate for such Interest Period for such Loan (b) the Applicable
        Margin
        in effect on the first day of such Interest Period, payable in arrears on
        the
        last day of such Interest Period and, if such Interest Period has a duration
        of
        more than three months, on each day that occurs during such
        Interest

       

      
        
                

                              
                            
      

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      Period
        every three months from the first day of such Interest Period and on the
        date
        such Eurodollar Rate Loan shall be Converted or paid in full.

       

      (b)           To
        the fullest extent permitted by applicable law, the amount of any principal,
        interest, fee or other amount payable under this Agreement or any other Loan
        Document to any Administrative Agent or any Bank that is not paid when due,
        from
        the date such amount shall be due until such amount shall be paid in full,
        payable in arrears on the date such amount shall be paid in full and on demand,
        at a rate per annum equal at all times to 2% per annum above the rate per
        annum
        required to be paid, in the case of principal or interest, on the Type of
        Loan
        relating to such principal or interest pursuant to clause (i) or (ii) of
        clause
        (a) above, as applicable, and, in all other cases, on Alternate Base Rate
        Loans
        pursuant to clause (i) of clause (a) above.

       

      (c)           Promptly
        after receipt of the Notice of Borrowing pursuant to Section 2.2(a) (Making
        of
        the Loans), a notice of Conversion pursuant to Section 2.8 (Conversion of
        Loans)
        or a notice of selection of an Interest Period pursuant to the terms of the
        definition of “Interest Period”, the Administrative Agent shall give notice to
        the Borrower and each Bank of the applicable Interest Period and the applicable
        interest rate determined by the Administrative Agent for purposes of clause
        (a)(i) or (a)(ii) above.  If the Borrower shall fail to select the
        duration of any Interest Period for any Eurodollar Rate Loans in accordance
        with
        the provisions contained in the definition of “Interest Period”, the
        Administrative Agent will forthwith so notify the Borrower and the Banks,
        whereupon the Borrower shall be deemed to have selected a one-month Interest
        Period for each such Eurodollar Rate Loan.

       

      2.7             Fees.  

       

      (a)           
        Each of the Borrower and the Guarantors agrees, jointly and severally, to
        pay or
        cause to be paid to the Administrative Agent and the Joint Lead Arrangers
        such
        fees as may from time to time be agreed between the Borrower and the
        Administrative Agent, including the fees specified in the Fee
        Letter.

       

      (b)           All
        fees payable hereunder shall be paid on the dates due, in immediately available
        funds, to the Administrative Agent, (or to such other person as may be specified
        in the Fee Letter).  Fees paid shall not be refundable under any
        circumstances.

       

      2.8             Conversion
        of Loans.  

       

      (a)           The
        Borrower may on any Business Day, upon notice given to the Administrative
        Agent
        not later than 11:00 A.M. (New York City time) on the third Business Day
        prior
        to the date of the proposed Conversion and subject to the provisions of Section
        2.6 (Interest) and 2.9 (Increased Costs), Convert all or any portion of the
        Loans of one Type into Loans of the other Type; provided,
however, that any Conversion of Eurodollar Rate Loans into Alternate
        Base Rate Loans shall be made only on the last day of an Interest Period
        for
        such Eurodollar Rate Loans and each Conversion of Loans shall be made ratably
        among the Banks in accordance with their Pro Rata Percentages; and also
provided that, upon giving effect to such Conversions, no more than
        five Interest

       

      
        
                

                              
                            
      

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      Periods
        shall be in effect.  Each such notice of Conversion shall, within the
        restrictions specified above, specify (i) the date of such Conversion, (ii)
        the
        Loans to be Converted and (iii) if such Conversion is into Eurodollar Rate
        Loans, the duration of the initial Interest Period for such
        Loans.  Each notice of Conversion shall be in writing and shall be
        irrevocable and binding on the Borrower.  The Administrative Agent
        shall promptly notify each Bank of any notice received from the Borrower
        pursuant to this Section 2.8.

       

      (b)           Upon
        the occurrence and during the continuation of any Default and if the Required
        Banks shall so direct, (i) each Eurodollar Rate Loan will automatically,
        on the
        last day of the then existing Interest Period therefor, Convert into an
        Alternate Base Rate Loan and (ii) the obligation of the Banks to make, or
        to
        Convert Loans into, Eurodollar Rate Loans shall be suspended.

       

      2.9             Increased
        Costs, Etc.  

       

      (a)           If,
        due to a Change in Law, there shall be any increase in the cost to any Bank
        of
        agreeing to make or of making, funding or maintaining Eurodollar Rate Loans
        (excluding, for purposes of this Section 2.9, any such increased costs resulting
        from (i) Taxes or Other Taxes (as to which Section 2.11 (Taxes) shall govern),
        (ii) changes in the rate of taxation or basis of taxation of overall net
        income
        or overall gross income by the United States or by the foreign jurisdiction
        or
        state under the laws of which such Bank is organized or has its principal
        office
        or Applicable Lending Office or any political subdivision thereof and (iii)
        reserve requirements contemplated by Section 2.9(b) below, then the Borrower
        shall from time to time, within 10 days of receipt of a certificate from
        such
        Bank setting forth in reasonable detail a calculation of the amount necessary
        to
        compensate such Bank (with a copy of such certificate to the Administrative
        Agent), pay to the Administrative Agent, for the account of such Bank,
        additional amounts sufficient to compensate such Bank for such increased
        cost;
provided, however, that a Bank claiming additional amounts under this
        Section 2.9(a) agrees to use reasonable efforts (consistent with its internal
        policy and legal and regulatory restrictions) to designate a different
        Applicable Lending Office if the making of such a designation would avoid
        the
        need for, or reduce the amount of, such increased cost that may thereafter
        accrue and would not, in the reasonable judgment of such Bank, be otherwise
        disadvantageous to such Bank.  A certificate as to the amount of such
        increased cost, submitted to the Borrower by such Bank, shall be conclusive
        and
        binding for all purposes, absent manifest error.

       

      (b)           The
        Borrower shall pay to each Bank, as long as such Bank shall be required to
        maintain reserves with respect to liabilities or assets consisting of or
        including Eurocurrency funds or deposits (currently known as
“Eurocurrency Liabilities”), additional interest on the unpaid
        principal amount of each Eurodollar Rate Loan equal to the actual costs of
        such
        reserves allocated to such Loan by such Bank (as determined by such Bank
        in good
        faith, which determination shall be conclusive), which shall be due and payable
        on each date on which interest is payable on such Loan, provided the
        Borrower shall have received at least 10 days’ prior notice (with a copy to the
        Administrative Agent) of such additional interest from such Bank (which notice
        shall contain a calculation of such additional interest in reasonable
        detail).  If a Bank fails to

       

      
        
                

                              
                            
      

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      give
        notice 10 days prior to the relevant date on which interest is payable, such
        additional interest shall be due and payable 10 days from receipt of such
        notice.

       

      (c)           If,
        with respect to any Eurodollar Rate Loans, the Majority Banks notify the
        Administrative Agent that the Eurodollar Rate for any Interest Period for
        such
        Loans will not adequately reflect the cost to the Banks of making, funding
        or
        maintaining their Eurodollar Rate Loans for such Interest Period, the
        Administrative Agent shall forthwith so notify the Borrower and the Banks,
        whereupon (i) each such Eurodollar Rate Loan will automatically, on the last
        day
        of the then existing Interest Period therefor, Convert into an Alternate
        Base
        Rate Loan and (ii) the obligation of the Banks to make, or to Convert Loans
        into, Eurodollar Rate Loans shall be suspended until the Administrative Agent
        shall notify the Borrower that the Banks have determined that the circumstances
        causing such suspension no longer exist.

       

      (d)           Notwithstanding
        any other provision of this Agreement, if the introduction or effectiveness
        of
        or any change in the interpretation of any law or regulation shall make it
        unlawful, or any central bank or other Governmental Authority shall assert
        that
        it is unlawful, for any Bank or its Eurodollar Lending Office to perform
        its
        obligations hereunder to make Eurodollar Rate Loans or to continue to fund
        or
        maintain Eurodollar Rate Loans hereunder, then, on notice thereof and demand
        therefor by such Bank to the Borrower through the Administrative Agent, (i)
        each
        Eurodollar Rate Loan will automatically, upon such demand, Convert into an
        Alternate Base Rate Loan and (ii) the obligation of the Banks to make, or
        to
        Convert Loans into, Eurodollar Rate Loans shall be suspended until the
        Administrative Agent shall notify the Borrower that such Bank has determined
        that the circumstances causing such suspension no longer exist;
provided, however, that, before making any such demand, such
        Bank agrees to use reasonable efforts (consistent with its internal policy
        and
        legal and regulatory restrictions) to designate a different Eurodollar Lending
        Office if the making of such a designation would allow such Bank or its
        Eurodollar Lending Office to continue to perform its obligations to make
        Eurodollar Rate Loans or to continue to fund or maintain Eurodollar Rate
        Loans
        and would not, in the judgment of such Bank, be otherwise disadvantageous
        to
        such Bank.

       

      (e)           A
        Bank shall only be entitled to recover increased costs pursuant to this Section
        2.9 to the extent such costs were incurred during any time or period commencing
        not more than 120 days prior to the date on which such Bank notifies the
        Administrative Agent and the Borrower that it proposes to demand such
        compensation and identifies to the Administrative Agent and the Borrower
        the
        statute, regulation or other basis upon which the claimed compensation is
        or
        will be based; provided that, if the Change in Law giving rise to such
        increased costs is retroactive, then the 120-day period referred to above
        shall
        be extended to include the period of retroactive effect thereof.

       

      2.10             Payments
        and Computations.  

       

      (a)           The
        Borrower shall make each payment hereunder and under the Notes, irrespective
        of
        any right of counterclaim or set-off, not later than 12:00 P.M. (New York
        City
        time) on the day when due in U.S. dollars to the Administrative Agent at
        the

       

      
        
                

                              
                            
      

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      Administrative
        Agent’s account in same day funds, with payments being received by the
        Administrative Agent after such time being deemed to have been received on
        the
        next succeeding Business Day.  The Administrative Agent will promptly
        thereafter cause like funds to be distributed (x) if such payment by the
        Borrower is in respect of principal, interest or any other Obligation then
        payable hereunder and under the Notes to more than one Bank, to such Banks
        for
        the account of their respective Applicable Lending Offices ratably in accordance
        with the amounts of such respective Obligations then payable to such Banks
        and
        (y) if such payment by the Borrower is in respect of any Obligation then
        payable
        hereunder to one Bank, to such Bank for the account of its Applicable Lending
        Office, in each case to be applied in accordance with the terms of this
        Agreement.  Upon its acceptance of an Assignment and Acceptance and
        recording of the information contained therein in the Register pursuant to
        Section 12.14(d) (Sale or Assignment), from and after the effective date
        of such
        Assignment and Acceptance, the Administrative Agent shall make all payments
        hereunder and under the Notes in respect of the interest assigned thereby
        to the
        Bank assignee thereunder, and the parties to such Assignment and Acceptance
        shall make all appropriate adjustments in such payments for periods prior
        to
        such effective date directly between themselves.

       

      (b)           The
        Borrower hereby authorizes each Bank and each of its Affiliates, if and to
        the
        extent payment owed to such Bank is not made when due hereunder or, in the
        case
        of a Bank, under the Note held by such Bank, to charge from time to time,
        to the
        fullest extent permitted by law, against any or all of the Borrower’s accounts
        with such Bank or such Affiliate any amount so due.

       

      (c)           (x)
        All computations of interest based on the Prime Rate shall be made by the
        Administrative Agent on the basis of a year of 365 or 366 days, as the case
        may
        be, and (y) all computations of interest based on the Eurodollar Rate or
        the
        Federal Funds Rate shall be made by the Administrative Agent on the basis
        of a
        year of 360 days, in each of (x) and (y) above, the computation shall be
        for the
        actual number of days (including the first day but excluding the last day)
        occurring in the period for which such interest is payable.  Each
        determination by the Administrative Agent of an interest rate hereunder shall
        be
        conclusive and binding for all purposes, absent manifest error.

       

      (d)           Whenever
        any payment hereunder or under the Notes is stated to be due on a day other
        than
        a Business Day, such payment shall be made on the next succeeding Business
        Day,
        and such extension of time shall in such case be included in the computation
        of
        payment of interest; provided, however, that if such extension
        causes the payment of interest on or principal of Eurodollar Rate Loans to
        be
        made in the next following calendar month, such payment shall be made on
        the
        next preceding Business Day.

       

      (e)           Unless
        the Administrative Agent receives notice from the Borrower prior to the date
        on
        which any payment is due to any Bank hereunder that the Borrower will not
        make
        such payment in full, the Administrative Agent may assume that the Borrower
        has
        made such payment in full to the Administrative Agent on such date and the
        Administrative Agent may, in reliance upon such assumption, cause to be
        distributed to each such Bank on such due date an amount equal to the amount
        then due such Bank.  If

       

      
        
                

                              
                            
      

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      and
        to
        the extent the Borrower does not make such payment in full to the Administrative
        Agent, each such Bank shall repay to the Administrative Agent forthwith on
        demand such amount distributed to such Bank together with interest thereon,
        for
        each day from the date such amount is distributed to such Bank until the
        date
        such Bank repays such amount to the Administrative Agent, at the Federal
        Funds
        Rate.

       

      (f)           If
        the Administrative Agent receives funds for application to the Obligations
        of
        the Loan Parties under or in respect of the Loan Documents under circumstances
        for which the Loan Documents do not specify the Loans to which, or the manner
        in
        which, such funds are to be applied, the Administrative Agent may, but shall
        not
        be obligated to, elect to distribute such funds to each of the Banks in
        accordance with such Bank’s pro rata share of the aggregate principal amount of
        all Loans outstanding at such time, for application to such principal repayment
        installments thereof, as the Administrative Agent shall direct.

       

      2.11             Taxes.  

       

      (a)           Any
        and all payments by any Loan Party to or for the account of any Bank or any
        Administrative Agent hereunder or under the Notes or any other Loan Document
        shall be made, in accordance with Section 2.10 (Payments and Computations)
        or
        the applicable provisions of such other Loan Document, if any, free and clear
        of
        and without deduction for any and all present or future taxes, levies, imposts,
        deductions, charges or withholdings, and all liabilities with respect thereto,
        excluding, in the case of each Bank and each Administrative Agent,
        taxes that are imposed on its overall net income by the United States (and
        franchise taxes imposed in lieu thereof) and taxes that are imposed on its
        overall net income (and franchise taxes imposed in lieu thereof) by the state
        or
        foreign jurisdiction under the laws of which such Bank or such Administrative
        Agent, as the case may be, is organized or any political subdivision thereof
        and, in the case of each Bank, taxes that are imposed on its overall net
        income
        (and franchise taxes imposed in lieu thereof) by the state or foreign
        jurisdiction of such Bank’s principal office or Applicable Lending Office or any
        political subdivision thereof (all such non-excluded taxes, levies, imposts,
        deductions, charges, withholdings and liabilities in respect of payments
        hereunder or under the Notes being hereinafter referred to as
“Taxes”).  If any Loan Party shall be required by law
        to deduct any Taxes from or in respect of any sum payable hereunder or under
        any
        Note or any other Loan Document to any Bank or any Administrative Agent,
        (i) the
        sum payable by such Loan Party shall be increased as may be necessary so
        that
        after such Loan Party and the Administrative Agent have made all required
        deductions (including deductions applicable to additional sums payable under
        this Section 2.11) such Bank or such Administrative Agent, as the case may
        be,
        receives an amount equal to the sum it would have received had no such
        deductions been made, (ii) such Loan Party shall make all such deductions
        and
        (iii) such Loan Party shall pay the full amount deducted to the relevant
        taxation authority or other authority in accordance with applicable
        law.

       

      (b)           In
        addition, a Loan Party shall pay any present or future stamp, documentary,
        excise, property or similar taxes, charges or levies that arise from any
        payment
        made by such Loan Party hereunder or under any Notes or any other
        Loan

       

      
        
                

                              
                            
      

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      Documents
        or from the execution, delivery or registration of, performance under, or
        otherwise with respect to, this Agreement, the Notes or the other Loan Documents
        (hereinafter referred to as “Other Taxes”).

       

      (c)           Panhandle
        Eastern, Borrower and CCC shall indemnify each Bank and the Administrative
        Agent
        for and hold them harmless against the full amount of Taxes and Other Taxes,
        imposed on or paid by such Bank or such Administrative Agent (as the case
        may
        be) with respect to any payment by or on account of any obligation of the
        Loan
        Parties hereunder (including Taxes or Other Taxes imposed or asserted by
        any
        jurisdiction on amounts payable under this Section 2.11) and any liability
        (including penalties, additions to tax, interest and expenses) arising therefrom
        or with respect thereto.  This indemnification shall be made within 30
        days from the date such Bank or such Administrative Agent (as the case may
        be)
        makes written demand therefor.

       

      (d)           Within
        30 days after the date of any payment of Taxes, the appropriate Loan Party
        shall
        furnish to the Administrative Agent, at its address referred to in Section
        12.3
        (Notices), the original or a certified copy of a receipt evidencing such
        payment, to the extent such a receipt is issued therefor, or other written
        proof
        of payment thereof that is reasonably satisfactory to the Administrative
        Agent.  In the case of any payment hereunder or under the Notes or the
        other Loan Documents by or on behalf of a Loan Party through an account or
        branch outside the United States or by or on behalf of a Loan Party by a
        payor
        that is not a United States person, if such Loan Party determines that no
        Taxes
        are payable in respect thereof, such Loan Party shall furnish, or shall cause
        such payor to furnish, to the Administrative Agent, at such address, an opinion
        of counsel reasonably acceptable to the Administrative Agent stating that
        such
        payment is exempt from Taxes.  For purposes of subsections (d) and (e)
        of this Section 2.11, the terms “United States” and
“United States person” shall have the meanings specified in
        Section 7701 of the Internal Revenue Code.

       

      (e)           Each
        Bank organized under the laws of a jurisdiction outside the United States
        shall,
        on or prior to the date of its execution and delivery of this Agreement or
        on
        the date of the Assignment and Acceptance pursuant to which it becomes a
        Bank,
        as the case may be, and from time to time thereafter as reasonably requested
        in
        writing by a Loan Party (but only so long thereafter as such Bank remains
        lawfully able to do so), or upon the obsolescence or invalidity of any form
        previously provided provide each of the Administrative Agent and such Loan
        Party
        with two original Internal Revenue Service Forms W-8BEN or W-8ECI, as
        appropriate, or any other form prescribed by the Internal Revenue Service,
        certifying that such Bank is exempt from or entitled to a reduced rate of
        United
        States withholding tax on payments pursuant to this Agreement or the Notes
        or
        any other Loan Document, or (in the case of a Bank that is claiming exemption
        from U.S. federal withholding with respect to payments of “portfolio interest”
and has certified in writing to the Administrative Agent that it is not (i)
        a
“bank” as defined in Section 881(c)(3)(A) of the Internal Revenue Code, (ii) a
        10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the
        Internal Revenue Code) of such Loan Party or (iii) a controlled foreign
        corporation related to such Loan Party (within the meaning of Section 864(d)(4)
        of the Internal Revenue Code)) Internal Revenue Service Form W-8BEN, or any
        successor or other form prescribed by the Internal Revenue Service, or,
        in

       

      
        
                

                              
                            
      

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      the
        case
        of a Bank that certifies that it is not a “bank” as described above, certify
        that such Bank is a foreign corporation, partnership, estate or
        trust.  If the forms provided by a Bank at the time such Bank first
        becomes a party to this Agreement indicate a United States interest withholding
        tax rate in excess of zero, withholding tax at such rate shall be considered
        excluded from Taxes unless and until such Bank provides the appropriate forms
        certifying that a lesser rate applies, whereupon withholding tax at such
        lesser
        rate only shall be considered excluded from Taxes for periods governed by
        such
        forms; provided, however, that if, at the effective date of
        the Assignment and Acceptance pursuant to which a Bank becomes a party to
        this
        Agreement, the Bank assignor was entitled to payments under subsection (a)
        of
        this Section 2.11 in respect of United States withholding tax with respect
        to
        interest paid at such date, then, to such extent, the term Taxes shall include
        (in addition to withholding taxes that may be imposed in the future or other
        amounts otherwise includable in Taxes) United States withholding tax, if
        any,
        applicable with respect to the Bank assignee on such date.  If any
        form or document referred to in this subsection (e) requires the disclosure
        of
        information, other than information necessary to compute the tax payable
        and
        information required on the date hereof by Internal Revenue Service Form
        W-8BEN
        or W-8ECI or the related certificate described above, that the applicable
        Bank
        reasonably considers to be confidential, such Bank shall give notice thereof
        to
        the applicable Loan Party and shall not be obligated to include in such form
        or
        document such confidential information.

       

      (f           For
        any period with respect to which a Bank fails to provide a Loan Party with
        the
        appropriate form, certificate or other document described in subsection (e)
        above (other than if such failure is due to a change in law, or in the
        interpretation or application thereof, occurring after the date on which
        a form,
        certificate or other document originally was required to be provided or if
        such
        form, certificate or other document otherwise is not required under subsection
        (e) above), such Bank shall not be entitled to indemnification under subsection
        (a) or (c) of this Section 2.11 with respect to Taxes imposed by the United
        States by reason of such failure; provided, however, that
        should a Bank become subject to Taxes because of its failure to deliver a
        form,
        certificate or other document required hereunder, the Loan Parties shall,
        at the
        sole expense of such Bank, take such steps as such Bank shall reasonably
        request
        to assist such Bank to recover such Taxes.

       

      (g)           Any
        Bank claiming any additional amounts payable pursuant to this Section 2.11
        agrees to use reasonable efforts (consistent with its internal policy and
        legal
        and regulatory restrictions) to change the jurisdiction of its Applicable
        Lending Office or assign its rights and obligations under this Agreement
        to
        another of its offices, branches or Affiliates if the making of such a change
        or
        assignment would avoid the need for, or reduce the amount of, any such
        additional amounts that may thereafter accrue and would not, in the reasonable
        judgment of such Bank, be otherwise disadvantageous to such Bank.

       

      (h)           If
        a Bank or Administrative Agent actually receives a refund of any Taxes or
        Other
        Taxes as to which it has been indemnified by a Loan Party or with respect
        to
        which a Loan Party has paid additional amounts pursuant to this Section 2.11,
        it
        shall pay such refund to the Loan Party (but only to the extent of indemnity
        payments made, or

       

      
        
                

                              
                            
      

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      additional
        amounts paid, by the Loan Party under this Section 2.11 with respect to the
        Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
        expenses of the Administrative Agent or such Bank or Administrative Agent
        and
        without interest (other than any interest paid by the relevant Governmental
        Authority with respect to such refund); provided that the Loan Party,
        upon the request of the Administrative Agent or such Bank or Administrative
        Agent, agrees to repay the amount paid over to the Loan Party (plus any
        penalties, interest or other charges imposed by the relevant Governmental
        Authority) to the Administrative Agent or such Bank or Administrative Agent
        in
        the event the Administrative Agent or such Bank or Administrative Agent is
        required to repay such refund to such Governmental Authority. This Section
        2.11(h) shall not be construed to require the Administrative Agent or any
        Bank
        or Administrative Agent to claim a refund or make available its tax returns
        (or
        any other information relating to its taxes which it deems confidential)
        to the
        Loan Parties or any other Person.

       

      2.12             Sharing
        of Payments, Etc.  If any Bank shall obtain at any time any
        payment (whether voluntary, involuntary, through the exercise of any right
        of
        set-off, or otherwise, other than as a result of an assignment pursuant to
        Section 12.14 (Sale and Assignment)) (a) on account of Obligations due and
        payable to such Bank hereunder and under the Notes and the other Loan Documents
        at such time in excess of its ratable share (according to the proportion
        of (i)
        the amount of such Obligations due and payable to such Bank at such time
        to (ii)
        the aggregate amount of the Obligations due and payable to all Banks hereunder
        and under the Notes and the other Loan Documents at such time) of payments
        on
        account of the Obligations due and payable to all Banks hereunder and under
        the
        Notes at such time obtained by all the Banks at such time or (b) on account
        of
        Obligations owing (but not due and payable) to such Bank hereunder and under
        the
        Notes and the other Loan Documents at such time in excess of its ratable
        share
        (according to the proportion of (i) the amount of such Obligations owing
        to such
        Bank at such time to (ii) the aggregate amount of the Obligations owing (but
        not
        due and payable) to all Banks hereunder and under the Notes and the other
        Loan
        Documents at such time) of payments on account of the Obligations owing (but
        not
        due and payable) to all Banks hereunder and under the Notes at such time
        obtained by all of the Banks at such time, such Bank shall forthwith purchase
        from the other Banks such interests or participating interests in the
        Obligations due and payable or owing to them, as the case may be, as shall
        be
        necessary to cause such purchasing Bank to share the excess payment ratably
        with
        each of them; provided, however, that if all or any portion of such
        excess payment is thereafter recovered from such purchasing Bank, such purchase
        from each other Bank shall be rescinded and such other Bank shall repay to
        the
        purchasing Bank the purchase price to the extent of such Bank’s ratable share
        (according to the proportion of (i) the purchase price paid to such Bank
        to (ii)
        the aggregate purchase price paid to all Banks) of such recovery together
        with
        an amount equal to such Bank’s ratable share (according to the proportion of (i)
        the amount of such other Bank’s required repayment to (ii) the total amount so
        recovered from the purchasing Bank) of any interest or other amount paid
        or
        payable by the purchasing Bank in respect of the total amount so recovered;
        provided, further that, so long as the Obligations under the Loan
        Documents shall not have been accelerated, any excess payment received by
        any
        Bank shall be shared on a pro rata basis only with other Banks.  The
        Borrower agrees that any Bank so purchasing an interest or participating
        interest from another Bank pursuant to this Section 2.12 may, to the fullest
        extent permitted by law, exercise all its rights of payment (including the
        right
        of set-off) with respect to such interest or

       

      
        
                

                              
                            
      

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      participating
        interest, as the case may be, as fully as if such Bank were the direct creditor
        of the Borrower in the amount of such interest or participating interest,
        as the
        case may be.

       

      2.13             Use
        of Proceeds.  The Borrower used the proceeds of the loans
        under the Original Credit Agreement to fund the Inter-Company Loan to
        CCC.  CCC used the proceeds of the Inter-Company Loan received by it
        to repay in full (a) the then-existing Debt under the Amended and Restated
        Credit Agreement dated as of December 21, 2005 by and among Transwestern
        Holding
        Company, LLC, CCC, the lenders party thereto, Wachovia Bank, National
        Association, as administrative agent, Bank of America, N.A., as syndication
        agent, and JPMorgan Chase Bank, N.A., Sun Trust Bank and Calyon, New York
        Branch, as co-documentation agents and (b) the then-existing Debt under the
        notes issued pursuant to the Note Purchase Agreement, dated as of November
        17,
        2004, between Transwestern Holding Company, LLC and the holders listed therein
        (the Debt referred to in clause (a) and (b) shall collectively be referred
        to as
        the “TWH Indebtedness”).

       

      2.14             Evidence
        of Debt.  

       

      (a)           (i)  Each
        Bank shall maintain in accordance with its usual practice an account or accounts
        evidencing the indebtedness of the Borrower to such Bank resulting from each
        Loan owing to such Bank from time to time, including the amounts of principal
        and interest payable and paid to such Bank from time to time
        hereunder.  The Borrower agrees that upon request by any Bank to the
        Borrower (with a copy of such request to the Administrative Agent) to the
        effect
        that a promissory note or other evidence of indebtedness is required or
        appropriate in order for such Bank to evidence (whether for purposes of pledge,
        enforcement or otherwise) the Loans owing to, or to be made by, such Bank,
        the
        Borrower shall promptly execute and deliver to such Bank, with a copy to
        the
        Administrative Agent, a Note payable to the order of such Bank in a principal
        amount equal to the Loans of such Bank.  All references to Notes in
        the Loan Documents shall mean Notes, if any, to the extent issued
        hereunder.

       

      (b)           The
        Register maintained by the Administrative Agent pursuant to Section 12.14(d)
        (Sale and Assignment) shall include a control account, and a subsidiary account
        for each Bank, in which accounts (taken together) shall be recorded (i) the
        date
        and amount of each Borrowing made hereunder, the Type of Loans comprising
        such
        Borrowing and, if appropriate, the Interest Period applicable thereto, (ii)
        the
        terms of each Assignment and Acceptance delivered to and accepted by it,
        (iii)
        the amount of any principal or interest due and payable or to become due
        and
        payable from the Borrower to each Bank hereunder, and (iv) the amount of
        any sum
        received by the Administrative Agent from the Borrower hereunder and each
        Bank’s
        share thereof.

       

      (c)           Entries
        made in good faith by the Administrative Agent in the Register pursuant to
        subsection (b) above, and by each Bank in its account or accounts pursuant
        to
        subsection (a) above, shall be prima facie evidence of the amount of
        principal and interest due and payable or to become due and payable from
        the
        Borrower to, in the case of the Register, each Bank and, in the case of such
        account or accounts, such Bank, under this Agreement, absent manifest error;
        provided, however, that the failure of the Administrative Agent or such
        Bank to make an entry, or any finding that an entry is

       

      
        
                

                              
                            
      

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      incorrect,
        in the Register or such account or accounts shall not limit or otherwise
        affect
        the obligations of the Borrower under this Agreement.

       

      2.15             Replacement
        of Banks.  If (a) any Bank requests compensation under
        Section 2.9 (Increased Costs) or asserts, pursuant to Section 2.9(d) that
        it is
        unlawful for such Bank to make Eurodollar Rate Loans, (b) the Borrower is
        required to pay any additional amount to any Bank or any Governmental Authority
        for the account of any Bank pursuant to Section 2.11 (Taxes), (c) any Bank
        defaults in its obligation to fund Loans hereunder, or (d) with respect to
        any
        Bank that does not approve any amendment or waiver of any provision of any
        Loan
        Document that requires the unanimous consent of all of the Banks pursuant
        to
        Section 12.1 (Amendments; Waivers, Etc.), if such amendment or waiver is
        agreed
        to by the Required Banks, then the Borrower may, at its sole expense, upon
        prior
        notice to such Bank and the Administrative Agent, require such Bank to assign
        and delegate, without recourse (in accordance with and subject to the
        restrictions contained in Section 12.14 (Sale and Assignment)), all its
        interests, rights and obligations under this Agreement to an assignee that
        shall
        assume such obligations (which assignee may be another Bank, if a Bank accepts
        such assignment); provided that (i) to the extent required under
        Section 12.14 (Sale and Assignment), the Borrower shall have received the
        prior
        written consent of the Administrative Agent, which consent shall not
        unreasonably be withheld, (ii) such Bank 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) and (iii) in the
        case
        of any such assignment resulting from a claim for compensation under Section
        2.9
        (Increased Costs) or payments required to be made pursuant to Section 2.11
        (Taxes), such assignment will result in a reduction in such compensation
        or
        payments.  A Bank shall not be required to make any such assignment
        and delegation if, prior thereto, as a result of a waiver by such Bank or
        otherwise, the circumstances entitling the Borrower to require such assignment
        and delegation cease to apply.

       

      3.                      REPRESENTATIONS
        AND WARRANTIES OF THE LOAN PARTIES.  

       

      Each
        of
        Panhandle Eastern, Borrower and CCC represents and warrants to the
        Administrative Agent and the Banks that:

       

      3.1             Organization
        and Qualification.  Such Loan Party: 

       

      (a)           is
        duly organized, validly existing, and in good standing under the laws of
        its
        state of organization;

       

      (b)           has
        the corporate or organizational power to own its properties and to carry
        on its
        respective businesses as now conducted; and

       

      (c)           is
        duly qualified as a foreign limited partnership or limited liability company,
        as
        applicable, to do business and is in good standing in every jurisdiction
        where
        such qualification is necessary except when the failure to so qualify would
        not
        or does not have a Material Adverse Effect.

       

      
        
                

                              
                            
      

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      The
        Borrower has the Subsidiaries as applicable listed on Schedule 3.1
        attached hereto and made a part hereof for all purposes, and no others, each
        of
        which is a Delaware limited liability company unless otherwise noted on
Schedule 3.1.

       

      3.2             Authorization,
        Validity, Etc.  Each such Loan Party has the limited
        liability company or limited partnership power and authority to make, execute,
        deliver and perform under this Agreement, the Loan Documents and the
        Inter-Company Note to which it is a party and the transactions contemplated
        herein and therein, and all such action has been duly authorized by all
        necessary limited partnership or limited liability company proceedings on
        its
        part.  Each Loan Document and the Inter-Company Note to which a Loan
        Party is a party has been duly and validly executed and delivered by such
        Loan
        Party and constitutes the valid and legally binding agreement of such Loan
        Party
        enforceable against such Loan Party in accordance with its terms, except
        as
        limited by Debtor Laws.

       

      3.3             Conflicting
        or Adverse Agreements or Restrictions.  No Loan Party is a
        party to any contract or agreement or subject to any restriction which would
        materially adversely affect the ability of any Loan Party to perform its
        obligations under the Loan Documents and the Inter-Company Note to which
        it is a
        party.  Neither the execution and delivery of this Agreement, any
        other Loan Document or the Inter-Company Note by any Loan Party that is or
        is to
        become a party thereto, nor the consummation of the transactions contemplated
        hereby or thereby, nor the fulfillment of and compliance with the respective
        terms, conditions and provisions hereof or thereof or of any instruments
        required hereby will conflict with or result in a breach of any of the terms,
        conditions or provisions of, or constitute a default under, or result in
        any
        violation of, or result in the creation or imposition of any lien (other
        than as
        contemplated or permitted by this Agreement) on any of the property of such
        Loan
        Party pursuant to (a) the charter or bylaws or similar organizational documents
        applicable to such Loan Party; (b) any law or any regulation of any Government
        Authority; (c) any order, writ, injunction or decree of any court; or (d)
        the
        terms, conditions or provisions of any agreement or instrument to which such
        Loan Party is a party or by which it is bound or to which it is subject,
        except
        in the case of clauses (b), (c) and (d) for conflicts, breaches, defaults,
        violations or the creation or imposition of liens that could not be reasonably
        expected to have a Material Adverse Effect.

       

      3.4             No
        Consents Required.  No action, approval, consent, waiver,
        exemption, variance, franchise, order, permit, authorization, right or license
        of or from a Governmental Authority, and no notice to or filing with, any
        Governmental Authority (including without limitation the SEC under PUHCA)
        or any
        other third party is required for (a) the due execution, delivery or performance
        by any Loan Party of any Loan Document or the Inter-Company Note to which
        it is
        or is to be a party, or for the consummation of the transactions contemplated
        hereby, including without limitation the incurrence of Debt under this Agreement
        and the Inter-Company Note and the borrowing and repayment of Loans hereunder
        and thereunder; or (b) the exercise by any Administrative Agent or any Bank
        of
        its rights under the Loan Documents, except for those authorizations, approvals,
        actions, notices and filings (A) which have been duly obtained or made or
        which
        are not required under the terms of the Loan Documents to have been obtained
        or
        made on or prior to such date or (B) with respect to the consummation of
        the
        transactions contemplated hereby, the failure of which to be obtained or
        made
        could not reasonably be expected to have a Material Adverse Effect.

       

      
        
                

                              
                            
      

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      3.5             Financial
        Statements.  

       

      (a)           Panhandle
        Eastern has furnished the Banks with its audited financial report as of the
        fiscal year ending December 31, 2006 and its unaudited financial reports
        as of
        the quarterly period ending March 31, 2007.  These statements are
        complete and correct and present fairly, in all material respects, in accordance
        with GAAP, consistently applied throughout the periods involved, the
        Consolidated financial position of Panhandle Eastern and its Subsidiaries
        and
        the results of their operations as at the dates and for the periods
        indicated.

       

      (b)           The
        Borrower has furnished the Banks with the Borrower’s unaudited financial report
        as of the fiscal year ending December 31, 2006 and its unaudited financial
        reports as of the quarterly period ending March 31, 2007.  These
        statements are complete and correct and present fairly, in all material
        respects, in accordance with GAAP, consistently applied throughout the periods
        involved, the Consolidated financial position of the Borrower and its
        Subsidiaries and the results of their operations as at the dates and for
        the
        periods indicated.

       

      (c)           CCC
        has furnished the Banks with its unaudited financial report as of the fiscal
        year ending December 31, 2006 and its unaudited financial reports as of the
        quarterly period ending March 31, 2007.  These statements are complete
        and correct and present fairly, in all material respects, in accordance with
        GAAP, consistently applied throughout the periods involved, the Consolidated
        financial position of CCC and the results of its operations as at the dates
        and
        for the periods indicated.

       

      (d)           Since
        December 31, 2006, there has not occurred any event or condition which,
        individually or in the aggregate, has resulted in, or could reasonably be
        expected to result in, a Material Adverse Change respecting Panhandle Eastern,
        Borrower or CCC.

       

      3.6             Litigation.  Except
        as disclosed pursuant to Section 3.17 (Environmental Matters), there is no:
        (a)
        action or proceeding pending or, to the knowledge of Panhandle Eastern, Borrower
        or CCC, threatened against any Loan Party before any court, administrative
        agency or arbitrator which is reasonably expected to have a Material Adverse
        Effect; (b) unsatisfied judgment outstanding against such Loan Party for
        the
        payment of money; or (c) other outstanding judgment, order or decree affecting
        such Loan Party before or by any administrative or governmental authority,
        compliance with or satisfaction of which may reasonably be expected to have
        a
        Material Adverse Effect.

       

      3.7             Default.  No
        Loan Party is in default under or in violation of the provisions of any
        instrument evidencing any Debt or of any agreement relating thereto or any
        judgment, order, writ, injunction or decree of any court or any order,
        regulation or demand of any administrative or governmental instrumentality,
        which default or violation could reasonably be expected to have a Material
        Adverse Effect.

       

      3.8             Compliance.  Each
        Loan Party is in compliance with all laws, regulations and orders of any
        Governmental Authority applicable to it or its property, except where the
        failure to

       

      
        
                

                              
                            
      

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      do
        so,
        individually or in the aggregate, could not reasonably be expected to result
        in
        a Material Adverse Effect.

       

      3.9             Title
        to Assets.  Each Loan Party has good title to its respective
        assets, subject to no Liens except those permitted in Section 6.2 (Liens,
        Etc.),
        Section 7.1 (Liens, Etc.), Section 8.1 (Liens, Etc.) and Permitted
        Encumbrances.  For purposes of this Section 3.9, “Permitted
        Encumbrances” shall mean easements, rights-of-way, restrictions, minor
        defects or irregularities in title and other similar charges or encumbrances
        not
        interfering in any material respect with the ordinary conduct of the business
        of
        such Loan Party.

       

      3.10             Payment
        of Taxes.  Each Loan Party has filed all material tax returns
        required to be filed and has paid all taxes shown on said returns and all
        assessments which are due and payable (except such as are being contested
        in
        good faith by appropriate proceedings for which adequate reserves for their
        payment have been provided in a manner consistent with the accounting practices
        followed by the applicable Loan Party as of December 31, 2006).  No
        Loan Party is aware of any pending investigation by any taxing authority
        or of
        any claims by any Governmental Authority for any unpaid taxes.  Except
        as disclosed on Schedule 3.10, no Loan Party is party to any tax sharing
        agreement or arrangement.

       

      3.11             Investment
        Company Act Not Applicable.  No Loan Party is an “investment
        company” or a company “controlled” by an “investment company”, within the
        meaning of the Investment Company Act of 1940, as amended.

       

      3.12             Reserved

       

      3.13             Regulations
        G, T, U and X.  No Loan shall be a “purpose credit secured
        directly or indirectly by margin stock” within the meaning of Regulation U of
        the Board of Governors of the Federal Reserve System (“margin stock”); none of
        the proceeds of any Loan will be used by any Loan Party to extend credit
        to
        others for the purpose of purchasing or carrying any margin stock, or for
        any
        other purpose which would constitute this transaction a “purpose credit secured
        directly or indirectly by margin stock” within the meaning of said Regulation U,
        as now in effect or as the same may hereafter be in effect.  No Loan
        Party will take or permit any action which would involve the Banks in a
        violation of Regulation G, Regulation T, Regulation U, Regulation X or any
        other
        regulation of the Board of Governors of the Federal Reserve System or a
        violation of the Securities Exchange Act of 1934, in each case as now or
        hereafter in effect.

       

      3.14             ERISA.  Except
        as provided in Schedule 3.14, (a) no Reportable Event (as defined in §
4043(c) of ERISA) has occurred with respect to any Plan, (b) each
        Plan complies
        in all material respects with applicable provisions of ERISA, and each Loan
        Party has filed all reports required by ERISA and the Code to be filed with
        respect to each Plan, (c) no Loan Party has any knowledge of any event which
        could result in a liability of a Loan Party to the Pension Benefit Guaranty
        Corporation, and (d) each Loan Party has met all requirements with respect
        to
        funding the Plans imposed by ERISA or the Code.  Since the effective
        date of Title IV of ERISA, there have not been any, nor are there now existing
        any, events or conditions that would permit any Plan to be terminated under
        circumstances which would cause the lien provided under § 4068 of ERISA to
        attach to any property of a Loan Party.

       

      
        
                

                              
                            
      

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      3.15             No
        Financing of Certain Security Acquisitions.  None of the
        proceeds of any Loan will be used to acquire any security in any transaction
        that is subject to §13 or §14 of the Securities Exchange Act of 1934, as
        amended.

       

      3.16             Franchises,
        Co-Licenses, Etc.  Each Loan Party owns or has obtained all
        the material governmental permits, certificates of authority, leases, patents,
        trademarks, service marks, trade names, copyrights, franchises and licenses,
        and
        rights with respect thereto, required or necessary (or, in the sole and
        independent judgment of the Borrower, prudent) in connection with the conduct
        of
        their respective businesses as presently conducted or as proposed to be
        conducted, except where the failure to have any of the foregoing could not
        be
        reasonably expected to have a Material Adverse Effect.

       

      3.17             Environmental
        Matters.  Except as disclosed in Schedule 3.17, (a)
        all facilities and property owned or leased by a Loan Party have been and
        continue to be, owned or leased and operated by such Loan Party in material
        compliance with all Environmental Laws; (b) there has not been (during the
        period of such Loan Party’s ownership or lease) any Release of Hazardous
        Materials at, on, under or from any property now (or, to such Loan Party’s
        knowledge, previously) owned or leased by such Loan Party (i) that required,
        or
        may reasonably be expected to require, such Loan Party to expend funds on
        remediation or cleanup activities pursuant to any Environmental Law except
        for
        remediation or clean-up activities that would not be reasonably expected
        to have
        a Material Adverse Effect, or (ii) that otherwise, singly or in the aggregate,
        has, or may reasonably be expected to have, a Material Adverse Effect; (c)
        each
        Loan Party has been issued and is in material compliance with all permits,
        certificates, approvals, orders, licenses and other authorizations relating
        to
        environmental matters necessary for the conduct of its businesses; (d) there
        are
        no polychlorinated biphenyls (PCB’s) or asbestos-containing materials or surface
        impoundments in any of the facilities now (or, to the knowledge of such Loan
        Party, previously) owned or leased by such Loan Party, except for PCB’s and
        asbestos-containing materials of the type and in quantities that, to the
        knowledge of such Loan Party, do not currently require remediation, and if
        remediation of such PCB’s and asbestos-containing materials is hereafter
        required for any reason, such remediation activities would not reasonably
        be
        expected to have a Material Adverse Effect; (e) Hazardous Materials have
        not
        been generated, used, treated, recycled, stored or disposed of at, on, under
        or
        from any of the facilities or property now (or, to the knowledge of such
        Loan
        Party, previously) owned or leased by such Loan Party during the time of
        such
        Loan Party’s ownership or lease of such property that may require remediation or
        clean-up activities that would be reasonably expected to have a Material
        Adverse
        Effect; and (f) all underground storage tanks located on the property now
        (or,
        to the knowledge of such Loan Party, previously) owned or leased by such
        Loan
        Party have been (and to the extent currently owned or leased are) operated
        in
        material compliance with all applicable Environmental Laws.

       

      3.18             Existing
        Liens.  There shall not exist any Liens on any Property of
        the Borrower or its Subsidiaries other than Permitted Liens.  There
        shall not exist any Liens on any Property of CCC or its
        Subsidiaries.

       

      3.19             Disclosure.  No
        written information (other than any projections) concerning any Loan Party
        and
        the transactions contemplated hereby furnished by or on behalf of such Loan
        Party to the Administrative Agent or any Bank in connection with the negotiation
        of this

       

      
        
          
          

        

        
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      Agreement
        or delivered hereunder (as modified or supplemented by other information
        so
        furnished), taken as a whole, contains any untrue statement of a material
        fact
        or omits to state a material fact necessary in order to make the statements
        contained therein not misleading in any material respect in light of the
        circumstances under which such statements were, or are, made.  The
        projections were prepared by or on behalf of each Loan Party in good faith
        based
        upon assumptions that such Loan Party believes to be reasonable as of the
        Closing Date (it being understood that such projections are subject to
        significant uncertainties and contingencies, many of which are beyond such
        Loan
        Party’s control, and accordingly no assurance can be given and no
        representations are made that the assumptions are correct or that the
        projections will be realized).

       

      3.20             Insurance.  Each
        Loan Party has insurance with a responsible and reputable insurer covering
        its
        assets against loss or damage of the kinds customarily insured against by
        companies similarly situated in the industry in which such Person conducts
        its
        business, in such amounts and with such deductibles as are customary for
        similarly situated companies; and such Person (a) has not received notice
        from
        any insurer or agent of such insurer that any material capital improvements
        or
        other material expenditures are required or necessary to be made in order
        to
        continue such insurance or (b) does not have any reason to believe that it
        will
        not be able to renew its existing insurance coverage as and when such coverage
        expires or to obtain similar coverage at commercially available rates from
        similar insurers as may be necessary to continue its business.

       

      3.21             Subsidiaries.  TLNG
        is wholly owned by the Borrower.  The Borrower is wholly owned,
        directly or indirectly, by Panhandle Eastern.  CCC is an Affiliate of
        the Borrower and is wholly owned by Southern Union.

       

      4.                      CONDITIONS
        TO THE CLOSING DATE.  

       

      The
        obligation on the Closing Date of the Banks to make any Loans on the Closing
        Date is subject to the following conditions:

       

      4.1             Representations
        True and No Defaults.  

       

      (a)           The
        representations and warranties contained in Section 3 (Representations and
        Warranties of the Loan Parties) shall be true and correct on and as of the
        Closing Date as though made on and as of such date;

       

      (b)           None
        of Panhandle Eastern, Borrower or CCC shall be in default in the due performance
        of any covenant on its part contained in this Agreement;

       

      (c)           No
        Material Adverse Change shall have occurred with respect to (i) Panhandle
        Eastern reflected in the Consolidated annual financial statements of Panhandle
        Eastern dated December 31, 2006, (ii) the Borrower reflected in the Consolidated
        annual financial statements of the Borrower dated December 31, 2006, or (iii)
        CCC reflected in the annual financial statements of CCC dated December 31,
        2006;
        and

       

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

       

      
        
                

                              
                            
      

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      4.2           Intentionally
        Omitted.

       

      4.3             Compliance
        With Law.  The business and operations of each Loan Party as
        conducted at all times relevant to the transactions contemplated by this
        Agreement to and including the close of business on the Closing Date shall
        have
        been and shall be in compliance in all material respects with all applicable
        State and Federal laws, regulations and orders affecting such Loan Party
        and the
        business and operations of any of them.

       

      4.4             Notice
        of Borrowing and Other Documents.  The Banks shall have
        received (a) the Notice of Borrowing; and (b) such other documents and
        certificates relating to the transactions herein contemplated as the Banks
        may
        reasonably request.

       

      4.5             Payment
        of Fees and Expenses.  The Borrower shall have paid (a) all
        expenses of the type described in Section 12.2 (Reimbursement of Expenses)
        through the date of such Loan and (b) all closing, structuring and other
        invoiced fees owed as of the Closing Date to the Administrative Agent or
        any of
        the Banks by the Borrower under this Agreement or any other written agreement
        between a Loan Party and the Administrative Agent, the applicable Bank(s),
        or
        any of their Affiliates.

       

      4.6             Repayment
        of Debt. The Borrower shall have repaid, or simultaneously with the
        Borrowing hereunder shall repay, (i) to all Withdrawing Banks the outstanding
        principal balance of their loans under the Original Credit Agreement, together
        with all accrued interest, applicable breakage expenses and other expenses
        owed
        in relation to such repayment; and (ii) to each Continuing Bank that has
        communicated its intention to reduce its loans under the Original Credit
        Agreement in part, an amount equal to the reduction of such Continuing Bank’s
        loan under the Original Credit Agreement, together with all accrued interest,
        applicable breakage expenses and other expenses owed in relation to such
        partial
        repayment. 

       

      4.7             Loan
        Documents Satisfactory.  The Administrative Agent shall have
        received a copy of each of the Loan Documents, each of which shall be in
        form
        and substance reasonably satisfactory to the Administrative Agent.

       

      4.8             Inter-Company
        Note Satisfactory.  The Administrative Agent shall have
        received a copy of the Inter-Company Note together with any amendments and
        waivers thereto, which Note shall be in form and substance reasonably
        satisfactory to the Administrative Agent.

       

      4.9             Loan
        Documents, Opinions and Other Instruments.  As of the Closing
        Date, the Loan Parties shall have delivered to the Administrative Agent the
        following:

       

      (a)           this
        Agreement, each of the Notes, all other Loan Documents and the Inter-Company
        Note required by the Administrative Agent and the Banks to be executed and
        delivered by the applicable Loan Parties in connection with this
        Agreement;

       

      (b)           a
        certificate from the Secretary of State of the State of Delaware as to the
        continued existence and good standing of Panhandle Eastern, the Borrower
        and CCC
        in the State of Delaware;

       

      
        
                

                              
                            
      

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      (c)           a
        certificate from Secretary of State of each State in which such certification
        is
        necessary as to the good standing of TLNG and each Loan Party as a foreign
        entity to do business in such State;

       

      (d)           a
        Secretary’s Certificate executed by the duly elected Secretary or a duly elected
        Assistant Secretary of Panhandle Eastern, the Borrower and CCC, in a form
        acceptable to the Administrative Agent, whereby such Secretary or Assistant
        Secretary certifies that one or more resolutions adopted by the Board of
        Managers of such Loan Party (or, in the case of Panhandle Eastern, the Board
        of
        Managers of its general partner) remain in full force and effect authorizing
        such Loan Party to enter into the transactions contemplated hereby and perform
        its obligations under the Loan Documents and the Inter-Company Note;
        and

       

      (e)           a
        legal opinion from in house counsel for the Borrower and each Guarantor,
        and New
        York counsel to the Administrative Agent and the BAS, each dated as of the
        Closing Date, addressed to the Administrative Agent and the Banks and otherwise
        acceptable in all respects to the Administrative Agent in its
        discretion.

       

      4.10             PATRIOT
        Act.  Pursuant to the requirements of the USA PATRIOT
        Act (Title III of Pub. L. 107-56 (signed into law October
        26, 2001)), the Administrative Agent shall have obtained, verified and
        recorded information that identifies the Loan Parties, which information
        includes the name and address of the Loan Parties and other information that
        will allow such Bank to identify the Loan Parties in accordance with said
        Act.

       

      5.                      AFFIRMATIVE
        COVENANTS OF THE LOAN PARTIES.  

       

      Each
        of
        Panhandle Eastern, Borrower and CCC covenants and agrees that, so long as
        the
        Borrower may borrow hereunder and until payment in full of the Obligations,
        each
        of Panhandle Eastern, Borrower and CCC, as applicable, will:

       

      5.1             Financial
        Statements and Information.  

       

      Deliver
        to the Banks:

       

      (a)           as
        soon as available, and in any event within 120 days after the end of each
        fiscal
        year of Panhandle Eastern, a copy of the annual audit report of Panhandle
        Eastern and its Subsidiaries for such fiscal year containing a balance sheet,
        statement of income and stockholders equity and a cash flow statement, all
        in
        reasonable detail and certified by PriceWaterhouseCoopers or another independent
        certified public accountant of recognized standing reasonably satisfactory
        to
        the Banks; and

       

      (b)           as
        soon as available, and in any event within 120 days after the end of each
        fiscal
        year of the Borrower and CCC, an unaudited financial report of the Borrower
        and
        its Subsidiaries and an unaudited report of CCC and its Subsidiaries for
        such
        fiscal year containing a balance sheet, statement of income and stockholders
        equity and cash flow statement, all in reasonable detail and certified by
        a
        financial officer of such Loan Party to have been prepared in accordance
        with
        GAAP, except as may be explained in such certificate; and

       

      
        
          
          

        

        
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                 (c)           as
        soon as available, and in any event within 60 days after the end of each
        quarterly accounting period in each fiscal year of Panhandle Eastern, CCC
        and
        the Borrower (excluding the fourth quarter), an unaudited financial report
        of
        Panhandle Eastern and its Subsidiaries, CCC and its Subsidiaries and the
        Borrower and its Subsidiaries as at the end of such quarter and for the period
        then ended, containing a balance sheet, statements of income and stockholders
        equity and a cash flow statement, all in reasonable detail and certified
        by a
        financial officer of such Loan Party to have been prepared in accordance
        with
        GAAP, except as may be explained in such certificate;

       

      (d)           such
        additional financial or other information as the Banks may reasonably request;
        and

       

      (e)           copies
        of all regular, periodic and special reports, and all registration statements,
        that such Loan Party files with the SEC or any governmental authority that
        may
        be substituted therefor, or with any national securities exchange.

       

      All
        financial statements specified in clauses (a), (b) and (c) above shall be
        furnished in Consolidated form for Panhandle Eastern and its Subsidiaries,
        CCC
        and its Subsidiaries and the Borrower and its Subsidiaries with comparative
        Consolidated figures for the corresponding period in the preceding
        year.  Together with each delivery of financial statements required by
        clauses (a), (b) and (c) above, each of Panhandle Eastern, CCC and the Borrower,
        as applicable, will deliver to the Banks an Officer’s Certificate stating that
        there exists no Event of Default or Default, or, if any such Event of Default
        or
        Default exists, stating the nature thereof, the period of existence thereof
        and
        what action the Borrower has taken or proposes to take with respect
        thereto.  Together with each delivery of financial statements required
        by clauses (a) and (c) above, Panhandle Eastern will deliver to the Banks
        an
        Officer’s Certificate demonstrating compliance with the covenants set forth in
        Section 6.1 (Financial Covenant). The Banks are authorized to deliver a copy
        of
        any financial statement delivered to it to any regulatory body having
        jurisdiction over them, and to disclose same to any prospective assignees
        or
        participant Banks.

       

      5.2             Books
        and Records.  Maintain, and cause each of its Subsidiaries to
        maintain, proper books of record and account in accordance with sound accounting
        practices in which true, full and correct entries will be made of all their
        respective dealings and business affairs.

       

      5.3             Insurance.  Maintain,
        and cause each of its Subsidiaries to maintain, insurance with financially
        sound, responsible and reputable companies in such types and amounts and
        against
        such casualties, risks and contingencies as is customarily carried by owners
        of
        similar businesses and properties.

       

      5.4             Maintenance
        of Property.  Maintain and preserve, and cause each of its
        Subsidiaries to maintain and preserve, all of its properties that are used
        or
        useful in the conduct of its business in accordance with such Loan Party’s
        established maintenance plan as in effect from time to time consistent with
        past
        practices.

       

      5.5             Inspection
        of Property and Records.  Permit any officer, director or
        agent of the Administrative Agent or any Bank, on written notice and at such
        Bank’s expense, to visit and

       

      
        
                

                              
                            
      

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      inspect
        during normal business hours any of the properties, corporate books and
        financial records of each Loan Party and discuss their respective affairs
        and
        finances with their principal officers, all at such times as the Administrative
        Agent or any Bank may reasonably request.

       

      5.6             Existence,
        Laws, Obligations, Taxes.  Maintain, and cause each of its
        Subsidiaries to maintain, its corporate existence and franchises, and any
        license agreements and tariffs that permit the recovery of a return that
        such
        Loan Party considers to be fair (and as to licenses, franchises, and tariffs
        that are subject to regulatory determinations of recovery of returns, such
        Loan
        Party has presented or is presenting favorable defense thereof); and to comply,
        and cause each of its Subsidiaries to comply, with all statutes and governmental
        regulations noncompliance with which might have a Material Adverse Effect,
        and
        pay, and cause each of its Subsidiaries to pay, all taxes, assessments,
        governmental charges, claims for labor, supplies, rent and other obligations
        which if unpaid might become a lien against the property of such Loan Party
        and
        its Subsidiaries except liabilities being contested in good faith.

       

      5.7             Notice
        of Certain Matters.  Notify the Administrative Agent promptly
        upon acquiring knowledge of the occurrence of any of the following
        events:

       

      (a)           the
        institution or threatened institution of any lawsuit or administrative
        proceeding affecting a Loan Party that is not covered by insurance (less
        applicable deductible amounts) and which, if determined adversely to such
        Loan
        Party, could reasonably be expected to have a Material Adverse
        Effect;

       

      (b)           the
        occurrence of any Material Adverse Change, or of any event that in the good
        faith opinion of such Loan Party is likely to result in a Material Adverse
        Change, affecting such Loan Party;

       

      (c)           the
        occurrence of any Event of Default or any Default;

       

      (d)           a
        change by Moody’s Investors Service, Inc. or by Standard and Poor’s Ratings
        Group in the rating of the Funded Debt of Panhandle Eastern; and

       

      (e)           such
        other information respecting the business, financial condition, operations
        or
        assets of the Loan Parties as any Administrative Agent, or any Bank through
        the
        Administrative Agent, may from time to time reasonably request.

       

      5.8             ERISA.  

       

      (a)           to
        the extent required of a Loan Party under applicable law, maintain and keep
        in
        full force and effect each Plan, subject to Southern Union’s right, in
        accordance with applicable legal requirements, (i) to amend any such Plans,
        (ii)
        to merge any such Plans, and to (iii) cease benefit accruals under any such
        Plans;

       

      (b)           to
        the extent required of a Loan Party under applicable law, make contributions
        to
        each Plan in a timely manner and in an amount sufficient to comply with the
        minimum funding standards requirements of ERISA;

       

      
        
                

                              
                            
      

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      (c)           promptly
        after acquiring knowledge of any “reportable event” or of any “prohibited
        transaction” (as such terms are defined in § 4043 and § 406 of ERISA) in
        connection with any Plan, furnish the Banks with a statement executed by
        the
        president or chief financial officer of a Loan Party setting forth the details
        thereof and the action which the Borrower proposes to take with respect thereto
        and, when known, any action taken by the Internal Revenue Service with respect
        thereto;

       

      (d)           notify
        the Banks promptly upon receipt by a Loan Party or any Subsidiary of any
        notice
        of the institution of any proceeding or other action which may result in
        the
        termination of any Plan and furnish to the Banks copies of such
        notice;

       

      (e)           to
        the extent required of a Loan Party under applicable law, acquire and maintain
        Pension Benefit Guaranty Corporation employer liability coverage insurance
        required under ERISA;

       

      (f)           furnish
        the Banks with copies of the summary annual report for each Plan filed with
        the
        Internal Revenue Service as the Administrative Agent or the Banks may request;
        and

       

      (g)           furnish
        the Banks with copies of any request for waiver of the funding standards
        or
        extension of the amortization periods required by § 303 and § 304 of ERISA or §
412 of the Code promptly after the request is submitted to the Secretary
        of the
        Treasury, the Department of Labor or the Internal Revenue Service, as the
        case
        may be.

       

      5.9             Compliance
        with Environmental Laws.  At all times:

       

      (a)           (i)
        use and operate, and cause each of its Subsidiaries to use and operate, all
        of
        their respective facilities and properties in material compliance with all
        Environmental Laws; (ii) keep, and cause each of its Subsidiaries to keep,
        all
        necessary permits, approvals, orders, certificates, licenses and other
        authorizations relating to environmental matters in effect and remain in
        material compliance therewith; (iii) handle, and cause each of its Subsidiaries
        to handle, all Hazardous Materials in material compliance with all applicable
        Environmental Laws; and (iv) dispose, and cause each of its Subsidiaries
        to
        dispose, of all Hazardous Materials with carriers that maintain valid permits,
        approvals, certificates, licenses or other authorizations for such disposal
        in
        material compliance with applicable Environmental Laws;

       

      (b)           promptly
        notify the Administrative Agent and provide copies upon receipt of all written
        claims, complaints, notices or inquiries relating to the condition of the
        facilities and properties of such Loan Party under, or their respective
        compliance with, applicable Environmental Laws wherein the condition or the
        noncompliance that is the subject of such claim, complaint, notice, or inquiry
        involves, or could reasonably be expected to involve, liability of or
        expenditures of (1) in the case of Borrower, CCC or any of their respective
        Subsidiaries, $10,000,000 or more, and (2) in the case of Panhandle Eastern
        and
        its Subsidiaries taken as a whole, $30,000,000 or more, to the extent in
        each
        case that such matters are not reflected in the financial statements provided
        pursuant to Sections 3.5 (a) and (b) hereof for the period ended March 31,
        2007;
        and

       

      
        
                

                              
                            
      

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      (c)           provide
        such information and certifications which the Banks may reasonably request
        from
        time to time to evidence compliance with this Section 5.9.

       

      6.                      NEGATIVE
        COVENANTS OF PANHANDLE EASTERN.  

       

      So
        long
        as the Borrower may borrow hereunder and until payment in full of the
        Obligations, except with the written consent of the Banks:

       

      6.1             Financial
        Covenant.  Panhandle Eastern will not permit its
        Debt/Capitalization Ratio as of the last day of any fiscal quarter to be
        greater
        than 65.0%.

       

      6.2             Liens,
        Etc. Panhandle Eastern will not, and will not permit any of its
        Subsidiaries to, create, incur, assume or suffer to exist any Lien on or
        with
        respect to any of its Property, or sign or file or suffer to exist, under
        the
        Uniform Commercial Code of any jurisdiction, a financing statement that names
        Panhandle Eastern or any of its Subsidiaries as debtor, or sign or suffer
        to
        exist any security agreement authorizing any secured party thereunder to
        file
        such financing statement, or assign any accounts or other right to receive
        income, except:

       

      (a)           Permitted
        Liens for Panhandle Eastern and its Subsidiaries;

       

      (b)           Liens
        existing on the date hereof and any replacement, extension or renewal of
        the
        indebtedness secured by such Lien, provided that the amount of Debt or
        other obligations secured thereby is not increased and is not secured by
        any
        additional assets; and

       

      (c)           Liens
        arising in connection with Capitalized Leases; provided that no such
        Lien shall extend to or cover any assets other than the assets subject to
        such
        Capitalized Leases) and purchase money Liens upon or in real property, equipment
        or other fixed or capital assets acquired or held by Panhandle Eastern or
        any of
        its Subsidiaries to secure the purchase price of such property, equipment
        or
        other fixed or capital assets or to secure Debt incurred for the purpose
        of
        financing the acquisition, construction or improvement of any such property,
        equipment or other fixed or capital assets, or Liens existing on any such
        property, equipment or other fixed or capital assets at the time of acquisition,
        or extensions, renewals or replacements of any of the foregoing for the same
        or
        a lesser amount (provided that no such Lien shall extend to or cover
        any property other than the property, equipment or other fixed or capital
        assets
        being acquired, constructed or improved, and no such extension, renewal or
        replacement shall extend to or cover any property not theretofore subject
        to the
        Lien being extended, renewed or replaced); provided that the aggregate
        principal amount of the Debt secured by Liens permitted by this clause (c)
        shall
        not exceed $50,000,000 at any time outstanding;

       

      provided,
        however, that Panhandle Eastern or any of its Subsidiaries may create or
        assume any other Lien securing Debt if, after giving effect to such Debt,
        the
        Priority Obligations Amount does not exceed 10% of the Consolidated Net Tangible
        Assets.

       

      6.3             Debt.  Panhandle
        Eastern will not, and will not permit any Subsidiary (other than the Borrower
        or
        TLNG) to, create, incur, assume or suffer to exist any Debt, unless if
        after

       

      
        
                

                              
                            
      

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      giving
        effect to such Debt, the Priority Obligations Amount does not exceed 10%
        of the
        Consolidated Net Tangible Assets.

       

      6.4             Change
        in Nature of Business.  Panhandle Eastern will not make any
        material change in the nature of Panhandle Eastern’s business as carried on at
        the date hereof.

       

      6.5             Mergers,
        Consolidation.  Panhandle Eastern will not merge into or
        consolidate with any Person or permit any Person to merge into it, or liquidate,
        wind up or dissolve itself (or suffer any liquidation or dissolution), or
        permit
        any of its Subsidiaries to do so, except that:

       

      (a)           any
        Subsidiary of Panhandle Eastern may merge into or consolidate with Panhandle
        Eastern, provided that Panhandle Eastern is the continuing or surviving
        Person;

       

      (b)           any
        Subsidiary of Panhandle Eastern may merge into or consolidate with any other
        Subsidiary of Panhandle Eastern; provided that if such Subsidiary is
        the Borrower, such transaction shall comply with Section 7.3(c);

       

      (c)           any
        Subsidiary of Panhandle Eastern may be liquidated or dissolved if Panhandle
        Eastern determines in good faith that such liquidation or dissolution is
        in the
        best interest of Panhandle Eastern and is not materially disadvantageous
        to the
        Banks;

       

      (d)           any
        Subsidiary of Panhandle Eastern may merge into or consolidate with any other
        Person or permit any other Person to merge into or consolidate with it;
provided that either (i) the Person surviving such merger shall be a
        Subsidiary of Panhandle Eastern or (ii) such transaction complies with Sections
        6.6(b), 7.3 and 7.4; and

       

      (e)           Panhandle
        Eastern may merge with any Person; provided that if Panhandle Eastern
        is not the surviving entity, the surviving entity agrees to assume and be
        bound
        by the terms and conditions of this Agreement pursuant to documentation
        satisfactory to the Administrative Agent to such effect;

       

      provided,
        however, that in each case, immediately before and after giving effect
        thereto, no Default or Event of Default shall have occurred and be continuing
        and such transaction shall not cause or have caused a Material Adverse
        Effect.

       

      6.6             Sale
        of Assets.  Panhandle Eastern will not, and will not permit
        any of its Subsidiaries to, sell, lease, transfer or otherwise dispose of,
        in
        one transaction or in a series of transactions, assets representing all or
        substantially all of the Consolidated assets of Panhandle Eastern,
        except:

       

      (a)           in
        a transaction authorized by Section 6.5 (Mergers); and

       

      (b)           sales,
        transfers or other dispositions of assets among Panhandle Eastern and its
        Subsidiaries.

       

      6.7             Restricted
        Payments.  Panhandle Eastern will not, and will not permit
        any of its Subsidiaries to, pay or declare any Restricted Payment, except
        that,
        (a) any of its Subsidiaries

       

      
        
                

                              
                            
      

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      may
        make
        Restricted Payments to Panhandle Eastern or another Subsidiary of Panhandle
        Eastern (except that the Borrower may not make any such payment to any Person
        other than Panhandle Eastern and Subsidiaries of the Borrower may not make
        any
        such payment to any Person other than the Borrower or Panhandle Eastern)
        and (b)
        so long as no Event of Default has occurred and is continuing and Panhandle
        Eastern is in pro forma compliance with Section 6.1(b) (Financial Covenant)
        after giving effect to such Restricted Payments, Panhandle Eastern may make
        distributions to Southern Union and Southern Union Panhandle, LLC.

       

      6.8             Sales
        and Leasebacks.  Panhandle Eastern will not enter into any
        arrangement with any Person (other than Subsidiaries of Panhandle Eastern)
        providing for the leasing by Panhandle Eastern or any Subsidiary of real
        or
        personal property that has been or is to be sold or transferred by Panhandle
        Eastern or such Subsidiary to such Person or to any other Person to whom
        funds
        have been or are to be advanced by such Person on the security of such property
        or rental obligations of Panhandle Eastern or such Subsidiary (each a
“Sale-Leaseback Transaction”), unless if after giving effect to
        such Sale-Leaseback Transaction, the Priority Obligations Amount does not
        exceed
        10% of the Consolidated Net Tangible Assets.

       

      6.9             Transactions
        with Related Parties.  Panhandle Eastern will not, and will
        not permit any Subsidiary to, enter into any transaction or agreement with
        any
        officer, director or holder (other than Southern Union and its Subsidiaries)
        of
        ten percent (10%) or more of any class of the outstanding capital stock of
        Panhandle Eastern or any Subsidiary (or any Affiliate of any such Person)
        unless
        the same is upon terms substantially similar to those obtainable from wholly
        unrelated sources.

       

      6.10             Hazardous
        Materials.  Panhandle Eastern will not, and will not permit
        any Subsidiary to, (a) cause or permit any Hazardous Materials to be placed,
        held, used, located, or disposed of on, under or at any of such Person’s
        property or any part thereof by any Person in a manner which could reasonably
        be
        expected to have a Material Adverse Effect; (b) cause or permit any part
        of any
        of such Person’s property to be used as a manufacturing, storage, treatment or
        disposal site for Hazardous Materials, where such action could reasonably
        be
        expected to have a Material Adverse Effect; or (c) cause or suffer any liens
        to
        be recorded against any of such Person’s property as a consequence of, or in any
        way related to, the presence, remediation, or disposal of Hazardous Materials
        in
        or about any of such Person’s property, including any so-called state, federal
        or local “superfund” lien relating to such matters, where such recordation could
        reasonably be expected to have a Material Adverse Effect.

       

      7.                      NEGATIVE
        COVENANTS OF THE BORROWER.  

       

      So
        long
        as the Borrower may borrow hereunder and until payment in full of the
        Obligations, except with the written consent of the Banks:

       

      7.1             Liens,
        Etc.  The Borrower will not, and will not permit any
        Subsidiary to, create, incur, assume or suffer to exist any Lien on or with
        respect to any of its Property, or sign or file or suffer to exist, under
        the
        Uniform Commercial Code of any jurisdiction, a financing statement that names
        the Borrower or any of its Subsidiaries as debtor, or sign or suffer to exist
        any security agreement authorizing any secured party thereunder to file such
        financing statement, or assign any accounts or other right to receive income,
        except:

       

      
        
                

                              
                            
      

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      (a)           Permitted
        Liens for the Borrower and its Subsidiaries;

       

      (b)           Liens
        existing on the date hereof and any replacement, extension or renewal of
        the
        indebtedness secured by such Lien, provided that the amount of Debt or
        other obligations secured thereby is not increased and is not secured by
        any
        additional assets; and

       

      (c)           Liens
        arising in connection with Capitalized Leases; provided that no such
        Lien shall extend to or cover any assets other than the assets subject to
        such
        Capitalized Leases) and purchase money Liens upon or in real property, equipment
        or other fixed or capital assets acquired or held by the Borrower or any
        of its
        Subsidiaries to secure the purchase price of such property, equipment or
        other
        fixed or capital assets or to secure Debt incurred for the purpose of financing
        the acquisition, construction or improvement of any such property, equipment
        or
        other fixed or capital assets, or Liens existing on any such property, equipment
        or other fixed or capital assets at the time of acquisition, or extensions,
        renewals or replacements of any of the foregoing for the same or a lesser
        amount
        (provided that no such Lien shall extend to or cover any property other
        than the property, equipment or other fixed or capital assets being acquired,
        constructed or improved, and no such extension, renewal or replacement shall
        extend to or cover any property not theretofore subject to the Lien being
        extended, renewed or replaced); provided that the aggregate principal
        amount of the Debt secured by Liens permitted by this clause (c) shall not
        exceed $10,000,000 at any time outstanding.

       

      7.2             Debt.  The
        Borrower will not, and will not permit any Subsidiary to, incur or permit
        to
        exist any Debt, except:

       

      (a)           Debt
        under this Agreement;

       

      (b)           Debt
        of TLNG to the Borrower and unsecured Debt of the Borrower to any
        Subsidiary;

       

      (c)           Debt
        under the March 2007 Credit Agreement;

       

      (d)           endorsements
        in the ordinary course of business of negotiable instruments in the course
        of
        collection;

       

      (e)           Debt
        of TLNG or any other Subsidiary of the Borrower subordinated to the Loans
        on
        terms and pursuant to documentation satisfactory to the Administrative
        Agent;

       

      (f)           Unsecured
        Debt of the Borrower; and

       

      (g)           Capitalized
        Leases of the Borrower with Subsidiaries as permitted pursuant to
        7.1(c).

       

      7.3             Merger,
        Consolidation.  The Borrower will not, and will not permit
        any Subsidiary to, merge or consolidate with any other Person or sell, lease,
        transfer or otherwise dispose of (whether in one transaction or a series
        of
        transactions) all or a substantial part of its

       

      
        
                

                              
                            
      

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      assets
        or
        acquire (whether in one transaction or a series of transactions) all or a
        substantial part of the assets of any Person, except that:

       

      (a)           any
        Subsidiary of the Borrower may merge or consolidate with the Borrower
        (provided that the Borrower shall be the continuing or surviving
        corporation) or with any one or more Subsidiaries of the Borrower;

       

      (b)           any
        Subsidiary of the Borrower may sell, lease, transfer or otherwise dispose
        of any
        of its assets to the Borrower or another Subsidiary of the
        Borrower;

       

      (c)           the
        Borrower may acquire the assets of or merge with any Person, provided
        that if the Borrower is not the surviving entity, the surviving entity agrees
        to
        assume and be bound by the terms and conditions of this Agreement pursuant
        to
        documentation satisfactory to the Administrative Agent; and

       

      (d)           the
        Borrower or any Subsidiary of the Borrower may sell, lease, assign or otherwise
        dispose of assets as otherwise permitted under Section 7.4 (Sale of Assets),
        which shall include without limitation the transfer of assets to a Subsidiary
        and the subsequent sale of the equity interests in such Subsidiary;

       

      provided
        that, after giving effect to any transaction, no Default or Event of Default
        shall have occurred and be continuing and such transaction shall not cause
        or
        have caused a Material Adverse Effect.

       

      7.4             Sale
        of Assets.  The Borrower will not, and will not permit any
        Subsidiary to, except as permitted under this Section 7.4, sell, assign,
        lease,
        or otherwise dispose of (whether in one transaction or in a series of
        transactions) all or any part of its Property (whether now owned or hereafter
        acquired); provided, however, that 

       

      (a)           the
        Borrower or any Subsidiary may in the ordinary course of business dispose
        of (i)
        Property consisting of Inventory; and (ii) Property consisting of goods or
        equipment that are, in the opinion of the Borrower or any Subsidiary of the
        Borrower, obsolete or unproductive, but if in the good faith judgment of
        the
        Borrower or any Subsidiary of the Borrower such disposition without replacement
        thereof would have a Material Adverse Effect, such goods and equipment shall
        be
        replaced, or their utility and function substituted, by new or existing goods
        or
        equipment; and

       

      (b)           the
        Borrower or any Subsidiary may dispose of Property other than Inventory (in
        consideration of such amount as in the good faith judgment of the Borrower
        or
        such Subsidiary represents a fair consideration therefor), provided
        that the aggregate value of such property disposed of (determined after
        depreciation and in accordance with GAAP) after the Closing Date does not
        exceed
        ten percent (10%) of the aggregate value of all of the Borrower’s and its
        Subsidiaries’ real property and tangible personal property other than Inventory
        considered on a Consolidated basis and determined after depreciation and
        in
        accordance with GAAP, as of December 31, 2006.

       

      
        
                

                              
                            
      

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      7.5           Restricted
        Payments.  The Borrower will not pay or declare any
        Restricted Payment to any Person other than to Panhandle Eastern.  The
        Borrower will not permit any Subsidiary to pay or declare any Restricted
        Payment
        to any Person other than the Borrower.

       

      7.6             Securities
        Credit Regulations.  Neither the Borrower nor any Subsidiary
        will take or permit any action which might cause the Loans or this Agreement
        to
        violate Regulation G, Regulation T, Regulation U, Regulation X or any other
        regulation of the Board of Governors of the Federal Reserve System or a
        violation of the Securities Exchange Act of 1934, in each case as now or
        hereafter in effect.

       

      7.7             Nature
        of Business.  The Borrower will not, and will not permit any
        Subsidiary, to, make any material change in the nature of the Borrower’s
        business as carried on at the date hereof.

       

      7.8             Transactions
        with Related Parties.  The Borrower will not, and will not
        permit any Subsidiary to, enter into any transaction or agreement with any
        officer, director or holder (other than Southern Union and its Subsidiaries)
        of
        ten percent (10%) or more of any class of the outstanding capital stock of
        the
        Borrower or any Subsidiary (or any Affiliate of any such Person) unless the
        same
        is upon terms substantially similar to those obtainable from wholly unrelated
        sources.

       

      7.9             Hazardous
        Materials.  The Borrower will not, and will not permit any
        Subsidiary to, (a) cause or permit any Hazardous Materials to be placed,
        held,
        used, located, or disposed of on, under or at any of such Person’s property or
        any part thereof by any Person in a manner which could reasonably be expected
        to
        have a Material Adverse Effect; (b) cause or permit any part of any of such
        Person’s property to be used as a manufacturing, storage, treatment or disposal
        site for Hazardous Materials, where such action could reasonably be expected
        to
        have a Material Adverse Effect; or (c) cause or suffer any liens to be recorded
        against any of such Person’s property as a consequence of, or in any way related
        to, the presence, remediation, or disposal of Hazardous Materials in or about
        any of such Person’s property, including any so-called state, federal or local
“superfund” lien relating to such matters, where such recordation could
        reasonably be expected to have a Material Adverse Effect.

       

      7.10             Use
        of Proceeds.  The Borrower will not, and will not permit any
        Subsidiary to, use the proceeds of any Loan for any purpose other than for
        purposes set forth in Section 2.13 (Use of Proceeds); or use any such proceeds
        in a manner which violates or results in a violation of any law or
        regulation.

       

      7.11             Changes
        to Inter-Company Note or Other Debt Documents.  The Borrower
        will not, and will not permit any Subsidiary to, amend, restate or otherwise
        modify or waive any provision or condition of (a) any instrument or
        agreement relating to any secured Debt of such Person if the effect of such
        modification or waiver is to increase the obligations of such Person in a
        manner
        that is adverse to the Banks without the consent of the Majority Banks or
        (b)
        the Inter-Company Note if the effect of such modification or waiver is to
        violate Section 7.8 (Transactions with Related Parties), decrease the interest
        rate to a rate below the interest rate under this Agreement in effect at
        such
        time, alter the frequency of interest payments if the effect of
        such

       

      
        
                

                              
                            
      

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      alteration
        would be that CCC pays interest less frequently than once per calendar quarter
        or extend the maturity date thereof to a date that is later than the Maturity
        Date.

       

      8.                      NEGATIVE
        COVENANTS OF CCC.  

       

      So
        long
        as the Borrower may borrow hereunder and until payment in full of the
        Obligations, except with the written consent of the Banks:

       

      8.1             Liens,
        Etc.  CCC will not, and will not permit any Subsidiary to,
        create, incur, assume or suffer to exist any Lien on or with respect to any
        of
        its Property, or sign or file or suffer to exist, under the Uniform Commercial
        Code of any jurisdiction, a financing statement that names CCC or any of
        its
        Subsidiaries as debtor, or sign or suffer to exist any security agreement
        authorizing any secured party thereunder to file such financing statement,
        or
        assign any accounts or other right to receive income, except:

       

      (a)           Permitted
        Liens for CCC and its Subsidiaries;

       

      (b)           Liens
        arising in connection with Capitalized Leases; provided that no such
        Lien shall extend to or cover any assets other than the assets subject to
        such
        Capitalized Leases) and purchase money Liens upon or in real property, equipment
        or other fixed or capital assets acquired or held by CCC or any of its
        Subsidiaries to secure the purchase price of such property, equipment or
        other
        fixed or capital assets or to secure Debt incurred for the purpose of financing
        the acquisition, construction or improvement of any such property, equipment
        or
        other fixed or capital assets, or Liens existing on any such property, equipment
        or other fixed or capital assets at the time of acquisition, or extensions,
        renewals or replacements of any of the foregoing for the same or a lesser
        amount
        (provided that no such Lien shall extend to or cover any property other
        than the property, equipment or other fixed or capital assets being acquired,
        constructed or improved, and no such extension, renewal or replacement shall
        extend to or cover any property not theretofore subject to the Lien being
        extended, renewed or replaced); provided that the aggregate principal
        amount of the Debt secured by Liens permitted by this clause (c) shall not
        exceed $10,000,000 at any time outstanding.

       

      8.2             Debt.  CCC
        will not, and will not permit any Subsidiary to, incur or permit to exist
        any
        Debt, except: 

       

      (a)           Debt
        under this Agreement;

       

      (b)           Debt
        under the Inter-Company Note;

       

      (c)           Debt
        existing as of March 31, 2007 as reflected on CCC’s financial statements
        delivered under Section 3.2 (Financial Statements) and refinancings thereof,
        other than the Debt constituting TWH Indebtedness;

       

      (d)           endorsements
        in the ordinary course of business of negotiable instruments in the course
        of
        collection;

       

      
        
                

                              
                            
      

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      (e)           Debt
        of Subsidiaries of CCC subordinated to the Loans on terms and pursuant to
        documentation satisfactory to the Administrative Agent;

       

      (f)           Unsecured
        Debt of CCC in a principal amount not to exceed $10,000,000; and

       

      (g)           Capitalized
        Leases of CCC with Subsidiaries as permitted pursuant to 8.1(b).

       

      8.3             Merger,
        Consolidation.  CCC will not, and will not permit any
        Subsidiary to, merge or consolidate with any other Person or sell, lease,
        transfer or otherwise dispose of (whether in one transaction or a series
        of
        transactions) all or a substantial part of its assets or acquire (whether
        in one
        transaction or a series of transactions) all or a substantial part of the
        assets
        of any Person, except that:

       

      (a)           any
        Subsidiary of CCC may merge or consolidate with CCC (provided that CCC
        shall be the continuing or surviving corporation) or with any one or more
        Subsidiaries of CCC;

       

      (b)           any
        Subsidiary of CCC may sell, lease, transfer or otherwise dispose of any of
        its
        assets to CCC or another Subsidiary of CCC;

       

      (c)           CCC
        may acquire the assets of or merge with any Person, provided that if
        the Borrower is not the surviving entity, the surviving entity agrees to
        assume
        and be bound by the terms and conditions of this Agreement pursuant to
        documentation satisfactory to the Administrative Agent.

       

      (d)           CCC
        or any Subsidiary of CCC may sell, lease, assign or otherwise dispose of
        assets
        as otherwise permitted under Section 8.4 (Sale of Assets), which shall include
        without limitation the transfer of assets to a Subsidiary and the subsequent
        sale of the equity interests in such Subsidiary;

       

      provided
        that, after giving effect to any transaction, no Default or Event of Default
        shall have occurred and be continuing and such transaction shall not cause
        or
        have caused a Material Adverse Effect.

       

      8.4             Sale
        of Assets.  CCC will not, and will not permit any Subsidiary
        to, except as permitted under this Section 8.4, sell, assign, lease, or
        otherwise dispose of (whether in one transaction or in a series of transactions)
        all or any part of its Property (whether now owned or hereafter acquired);
        provided, however, that

       

      (a)           CCC
        or any Subsidiary may in the ordinary course of business dispose of (i) Property
        consisting of Inventory; and (ii) Property consisting of goods or equipment
        that
        are, in the opinion of CCC or any Subsidiary of CCC, obsolete or unproductive,
        but if in the good faith judgment of CCC or any Subsidiary of CCC such
        disposition without replacement thereof would have a Material Adverse Effect,
        such goods and equipment shall be replaced, or their utility and function
        substituted, by new or existing goods or equipment; and

       

      
        
                

                              
                            
      

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      (b)           CCC
        or any Subsidiary may dispose of Property other than Inventory (in consideration
        of such amount as in the good faith judgment of CCC or such Subsidiary
        represents a fair consideration therefor), provided that the aggregate
        value of such property disposed of (determined after depreciation and in
        accordance with GAAP) after the Closing Date does not exceed ten percent
        (10%)
        of the aggregate value of all of CCC’s and its Subsidiaries’ real property and
        tangible personal property other than Inventory considered on a Consolidated
        basis and determined after depreciation and in accordance with GAAP, as of
        December 31, 2006.

       

      8.5             Restricted
        Payments.  CCC will not pay or declare any Restricted Payment
        to any Person other than to Southern Union and its Subsidiaries. Restricted
        Payments by CCC in any period shall not exceed the sum of (i) Consolidated
        Net
        Income of CCC in such period (provided that for purpose of this Section
        8.5(i), Consolidated Net Income shall not include special dividends and
        distributions received by CCC) and (ii) 75% of (a) special dividends or
        distributions received by CCC in such period less (b) the portion of any
        special
        dividends or distributions that are required to be paid by CCC to third parties
        under indemnification or refund arrangements with such third parties in such
        period, provided that, concurrent with the making of a Restricted
        Payment by CCC based on a special dividend or distribution received, CCC
        shall
        prepay the Inter-Company Loan in an amount equal to 25% of (a) special dividends
        or distributions received by CCC in such period less (b) the portion of any
        special dividends or distributions that are required to be paid by CCC to
        third
        parties under indemnification or refund arrangements with such third parties
        in
        such period.  Notwithstanding the foregoing, CCC may use the proceeds
        of the Inter-Company Loan as contemplated by Section 2.13 (Use of Proceeds).
        CCC
        will not permit any Subsidiary to pay or declare any Restricted Payment to
        any
        Person other than CCC.

       

      8.6             Securities
        Credit Regulations.  Neither CCC nor any Subsidiary will take
        or permit any action which might cause the Loans or this Agreement to violate
        Regulation G, Regulation T, Regulation U, Regulation X or any other regulation
        of the Board of Governors of the Federal Reserve System or a violation of
        the
        Securities Exchange Act of 1934, in each case as now or hereafter in
        effect.

       

      8.7             Nature
        of Business.  CCC will not, and will not permit any
        Subsidiary to, make any material change in the nature of CCC’s business as
        carried on at the date hereof.

       

      8.8             Transactions
        with Related Parties.  CCC will not, and will not permit any
        Subsidiary to, enter into any transaction or agreement with any officer director
        or holder (other than Southern Union and its Subsidiaries) of ten percent
        (10%)
        or more of any class of the outstanding capital stock of CCC or any Subsidiary
        (or any Affiliate of any such Person) unless the same is upon terms
        substantially similar to those obtainable from wholly unrelated
        sources.

       

      8.9             Hazardous
        Materials.  CCC will not, and will not permit any Subsidiary
        to, (a) cause or permit any Hazardous Materials to be placed, held, used,
        located, or disposed of on, under or at any of such Person’s property or any
        part thereof by any Person in a manner which could reasonably be expected
        to
        have a Material Adverse Effect; (b) cause or permit any part of any of such
        Person’s property to be used as a manufacturing, storage, treatment or disposal
        site for Hazardous Materials, where such action could reasonably be expected
        to
        have a Material

       

      
        
                

                              
                            
      

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      Adverse
        Effect; or (c) cause or suffer any liens to be recorded against any of such
        Person’s property as a consequence of, or in any way related to, the presence,
        remediation, or disposal of Hazardous Materials in or about any of such Person’s
        property, including any so-called state, federal or local “superfund” lien
        relating to such matters, where such recordation could reasonably be expected
        to
        have a Material Adverse Effect.

       

      8.10             Use
        of Proceeds.  CCC will not, and will not permit any
        Subsidiary to, use the proceeds of any Loan for any purpose other than for
        purposes set forth in Section 2.13 (Use of Proceeds); or use any such proceeds
        in a manner which violates or results in a violation of any law or
        regulation.

       

      8.11             Other
        Documents.  CCC will not, and will not permit any Subsidiary
        to, amend, restate or otherwise modify or waive any provision or condition
        of
        any instrument or agreement relating to any secured Debt of such Person if
        the
        effect of such modification or waiver is to increase the obligations of such
        Person in a manner that is adverse to the Banks without the consent of the
        Majority Banks.

       

      9.                      EVENTS
        OF DEFAULT; REMEDIES.  

       

      If
        any of
        the following events shall occur, then the Administrative Agent shall at
        the
        request, or may with the consent, of the Majority Banks, declare the Notes
        and
        all interest accrued and unpaid thereon, and all other amounts payable under
        the
        Notes, this Agreement and the other Loan Documents, to be forthwith due and
        payable, whereupon the Notes, all such interest and all such other amounts,
        shall become and be forthwith due and payable without presentment, demand,
        protest, or further notice of any kind (including, without limitation, notice
        of
        default, notice of intent to accelerate and notice of acceleration), all
        of
        which are hereby expressly waived by the Borrower; provided, however,
        that with respect to any Event of Default described in Sections 9.7 (Bankruptcy)
        or 9.8 (Dissolution) hereof, the entire unpaid principal amount of the Notes,
        all interest accrued and unpaid thereon, and all such other amounts payable
        under the Notes, this Agreement and the other Loan Documents, shall
        automatically become immediately due and payable, without presentment, demand,
        protest, or any notice of any kind (including, without limitation, notice
        of
        default, notice of intent to accelerate and notice of acceleration), all
        of
        which are hereby expressly waived by the Borrower:

       

      9.1             Failure
        to Pay Obligations When Due.  The Borrower fails to pay,
        repay or prepay any principal on the date when due, or any other Obligation
        within five (5) Business Days after the date when due.

       

      9.2             Intentionally
        Omitted.  

       

      9.3             Failure
        to Pay Other Debt.  (a) The Borrower or any Subsidiary of the
        Borrower fails to pay principal or interest on any unsecured Debt aggregating
        more than $10,000,000 or any secured Debt when due and any related grace
        period
        has expired, or the holder of any of such other Debt declares such Debt due
        prior to its stated maturity because of the Borrower’s or any Subsidiary’s
        default thereunder and the expiration of any related grace period; (b) Panhandle
        Eastern or any of its Subsidiaries fails to pay principal or interest on
        any
        other Debt aggregating more than $50,000,000 when due and any related grace
        period has

       

      
        
                

                              
                            
      

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      expired,
        or the holder of any of such other Debt declares such Debt due prior to its
        stated maturity because of Panhandle Eastern’s or any such Subsidiary’s default
        thereunder and the expiration of any related grace period; (c) CCC or any
        of its
        Subsidiaries fails to pay principal or interest on any other Debt aggregating
        more than $10,000,000 when due and any related grace period has expired,
        or the
        holder of any of such other Debt declares such Debt due prior to its stated
        maturity because of CCC’s or any such Subsidiary’s default thereunder and the
        expiration of any related grace period; or (d) the holder of any Debt
        aggregating more than $10,000,000 of Citrus Corp. declares such Debt due
        prior
        to its stated maturity because of Citrus Corp.’s default thereunder and the
        expiration of any related grace period.

       

      9.4             Misrepresentation
        or Breach of Warranty.  Any representation or warranty made
        by any Loan Party herein or otherwise furnished to the Bank in connection
        with
        this Agreement or any other Loan Document shall be incorrect, false or
        misleading in any material respect when made.

       

      9.5             Violation
        of Certain Covenants.  Any Loan Party violates any covenant,
        agreement or condition contained in Sections 5.6 (Existence), 5.7(c) (Notice
        of
        Defaults), 6.1 (Financial Covenant), 6.2 (Liens), 6.3 (Debt), 6.5 (Merger),
        6.6
        (Sale of Assets), 6.7 (Restricted Payments), 7.1 (Liens), 7.2 (Debt), 7.3
        (Merger, Consolidation), 7.4 (Sale of Assets), 7.5 (Restricted Payments),
        8.1
        (Liens), 8.2 (Debt), 8.3 (Merger, Consolidation), 8.4 (Sale of Assets) or
        8.5
        (Restricted Payments).

       

      9.6             Violation
        of Other Covenants, Etc.  Any Loan Party violates any other
        covenant, agreement or condition contained herein (other than the covenants,
        agreements and conditions set forth or described in Sections 9.1 (Failure
        to Pay
        Obligations When Due), 9.3 (Cross Default), 9.4 (Representations), and 9.5
        (Certain Covenants) above) or in any other Loan Document and such violation
        shall not have been remedied within (30) days after the earlier of (i) actual
        discovery by a Loan Party of such violation or (ii) written notice has been
        received by the Borrower from the Bank or the holder of the Note.

       

      9.7             Bankruptcy
        and Other Matters.  Any Loan Party or Southern Union (a)
        makes an assignment for the benefit of creditors; or (b) admits in writing
        its
        inability to pay its debts generally as they become due; or (c) generally
        fails
        to pay its debts as they become due; or (d) files a petition or answer seeking
        for itself, or consenting to or acquiescing in, any reorganization, arrangement,
        composition, readjustment, liquidation, dissolution, or similar relief under
        any
        applicable Debtor Law (including, without limitation, the Federal Bankruptcy
        Code); or (e) there is appointed a receiver, custodian, liquidator, fiscal
        agent, or trustee of any Loan Party or Southern Union or of the whole or
        any
        substantial part of their respective assets; or (f) any court enters an order,
        judgment or decree approving a petition filed against any Loan Party or Southern
        Union seeking reorganization, arrangement, composition, readjustment,
        liquidation, dissolution, or similar relief under any Debtor Law and either
        such
        order, decree or judgment so filed against it is not dismissed or stayed
        (unless
        and until such stay is no longer in effect) within thirty (30) days of entry
        thereof or an order for relief is entered pursuant to any such law.

       

      9.8             Dissolution.  Any
        order is entered in any proceeding against any Loan Party or Southern Union
        decreeing the dissolution, liquidation, winding-up or split-up of any Loan
        Party
        or Southern Union, and such order remains in effect for thirty (30)
        days.

       

      
        
                

                              
                            
      

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      9.9             Undischarged
        Judgment.  (a) A final judgment or judgments in the
        aggregate, that might be or give rise to Liens on any property of the Borrower
        or any of its Subsidiaries, for the payment of money in excess of $10,000,000
        shall be rendered against the Borrower or any of its Subsidiaries and the
        same
        shall remain undischarged for a period of sixty (60) days during which execution
        shall not be effectively stayed, (b) a final judgment or judgments in the
        aggregate, that might be or give rise to Liens on any property of Panhandle
        Eastern or any of its Subsidiaries, for the payment of money in excess of
        $50,000,000 shall be rendered against Panhandle Eastern or any of its
        Subsidiaries and the same shall remain undischarged for a period of sixty
        (60)
        days during which execution shall not be effectively stayed or (c) a final
        judgment or judgments in the aggregate, that might be or give rise to Liens
        on
        any property of CCC or any of its Subsidiaries, for the payment of money
        in
        excess of $10,000,000 shall be rendered against CCC or any of its Subsidiaries
        and the same shall remain undischarged for a period of sixty (60) days during
        which execution shall not be effectively stayed.

       

      9.10             Loan
        Documents.  Any material provision in any Loan Document or
        the Inter-Company Note shall for any reason cease to be valid and binding
        on any
        party thereto except upon fulfillment of such party’s obligations thereunder (or
        any such party shall so state in writing), or shall be declared null and
        void,
        or the validity or enforceability thereof shall be contested by any party
        thereto (other than the Administrative Agent and the Banks) or any Governmental
        Authority, or any such party shall deny in writing that it has any liability
        or
        obligation thereunder, except upon fulfillment of its obligations
        thereunder.

       

      9.11             Change
        of Control.  Any of the following events shall
        occur:

       

      (a)           Panhandle
        Eastern shall cease to own or control, directly or indirectly, 100% of the
        Equity Interests and voting power of the Borrower;

       

      (b)           Southern
        Union shall cease to own, or control, directly or indirectly, at least 51%
        of
        the Equity Interests and voting power of Panhandle Eastern or of
        CCC;

       

      (c)           CCC
        shall cease to own or control, directly or indirectly, at least 50% of the
        Equity Interests and voting power of Citrus Corp.; or

       

      (d)           CCC
        shall cease to own or control, directly or indirectly, at least 40% of the
        Equity Interests and voting power of Florida Gas Transmission
        Company.

       

      9.12             Other
        Remedies.  In addition to and cumulative of any rights or
        remedies expressly provided for in this Section 9, if any one or more Events
        of
        Default shall have occurred, the Administrative Agent shall at the request,
        and
        may with the consent, of the Majority Banks proceed to protect and enforce
        the
        rights of the Banks hereunder by any appropriate proceedings.  The
        Administrative Agent shall at the request, and may with the consent, of the
        Majority Banks also proceed either by the specific performance of any covenant
        or agreement contained in this Agreement or by enforcing the payment of the
        Notes or by enforcing any other legal or equitable right provided under this
        Agreement or the Notes or otherwise existing under any law in favor of the
        holder of the Notes.

       

      9.13             Remedies
        Cumulative.  No remedy, right or power conferred upon the
        Banks is intended to be exclusive of any other remedy, right or power given
        hereunder or now or hereafter

       

      
        
                

                              
                            
      

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      existing
        at law, in equity, or otherwise, and all such remedies, rights and powers
        shall
        be cumulative.

       

      10.                      THE
        ADMINISTRATIVE AGENT.  

       

      10.1             Authorization
        and Action.  Each Bank hereby appoints HVB as its
        Administrative Agent under and irrevocably authorizes the Administrative
        Agent
        (subject to this Section 10.1 and Section 10.7 (Successor Administrative
        Agent))
        to take such action as the Administrative Agent and to exercise such powers
        under this Agreement, the Loan Documents and the Notes as are delegated to
        the
        Administrative Agent by the terms thereof, together with such powers as are
        reasonably incidental thereto.  Without limitation of the foregoing,
        each Bank expressly authorizes the Administrative Agent to execute, deliver,
        and
        perform its obligations under this Agreement and the Loan Documents, and
        to
        exercise all rights, powers, and remedies that the Administrative Agent may
        have
        hereunder and thereunder.  As to any matters not expressly provided
        for by this Agreement (including, without limitation, enforcement or collection
        of the Notes), the Administrative Agent shall not be required to exercise
        any
        discretion or take any action, but shall be required to act, or to refrain
        from
        acting (and shall be fully protected in so acting or refraining from acting),
        upon the instructions of the Majority Banks, and such instructions shall
        be
        binding upon all the Banks and all holders of any Note; provided,
        however, that the Administrative Agent shall not be required to take any
        action which exposes the Administrative Agent to personal liability or which
        is
        contrary to this Agreement or applicable law.  The Administrative
        Agent agrees to give to each Bank prompt notice of each notice given to it
        by
        the Borrower pursuant to the terms of this Agreement.

       

      10.2             Administrative
        Agent’s Reliance, Etc.  Neither the Administrative Agent nor
        any of its directors, officers, agents, or employees shall be liable to any
        Bank
        for any action taken or omitted to be taken by it or them under or in connection
        with this Agreement, the Notes and the other Loan Documents, except for its
        or
        their own gross negligence or willful misconduct.  Without limitation
        of the generality of the foregoing, the Administrative Agent: (a) may treat
        the
        original or any successor holder of any Note as the holder thereof until
        the
        Administrative Agent receives notice from the Bank which is the payee of
        such
        Note concerning the assignment of such Note; (b) may employ and consult with
        legal counsel (including counsel for the Borrower), independent public
        accountants, and other experts selected by it and shall not be liable to
        any
        Bank for any action taken, or omitted to be taken, in good faith by it or
        them
        in accordance with the advice of such counsel, accountants, or experts received
        in such consultations and shall not be liable for any negligence or misconduct
        of any such counsel, accountants, or other experts; (c) makes no warranty
        or
        representation to any Bank and shall not be responsible to any Bank for any
        opinions, certifications, statements, warranties, or representations made
        in or
        in connection with this Agreement; (d) shall not have any duty to any Bank
        to
        ascertain or to inquire as to the performance or observance of any of the
        terms,
        covenants, or conditions of this Agreement or any other instrument or document
        furnished pursuant thereto or to satisfy itself that all conditions to and
        requirements for any Loan have been met or that the Borrower is entitled
        to any
        Loan or to inspect the property (including the books and records) of the
        Borrower or any Subsidiary; (e) shall not be responsible to any Bank for
        the due
        execution, legality, validity, enforceability, genuineness, sufficiency,
        or
        value of this Agreement or any other instrument or document furnished pursuant
        thereto; and (f) shall incur no liability under or in respect of this Agreement
        by acting upon any notice, consent, certificate, or

       

      
        
                

                              
                            
      

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      other
        instrument or writing believed by it to be genuine and signed or sent by
        the
        proper party or parties.

       

      10.3             Defaults.  The
        Administrative Agent shall not be deemed to have knowledge of the occurrence
        of
        a Default (other than the nonpayment of principal of or interest hereunder
        or of
        any fees) unless the Administrative Agent has received notice from a Bank
        or the
        Borrower specifying such Default and stating that such notice is a Notice
        of
        Default.  In the event that the Administrative Agent receives such a
        notice of the occurrence of a Default, the Administrative Agent shall give
        prompt notice thereof to the Banks (and shall give each Bank prompt notice
        of
        each such nonpayment).  The Administrative Agent shall (subject to
        Section 10.7 (Successor Administrative Agent)) take such action with respect
        to
        such Default; provided that, unless and until the Administrative Agent
        shall have received the directions referred to in Sections 10.1 (Authorization
        and Action) or 10.7 (Successor Administrative Agent), the Administrative
        Agent
        may (but shall not be obligated to) take such action, or refrain from taking
        such action, with respect to such Default as it shall deem advisable and
        in the
        best interest of the Banks.

       

      10.4             HVB
        and Affiliates.  With respect to its Commitment, any Loan
        made by it, and the Note issued to it, HVB shall have the same rights and
        powers
        under this Agreement as any other Bank and may exercise the same as though
        it
        were not the Administrative Agent; and the term “Bank” or “Banks” shall, unless
        otherwise expressly indicated, include HVB in its individual
        capacity.  HVB and its respective Affiliates may accept deposits from,
        lend money to, act as trustee under indentures of, and generally engage in
        any
        kind of business with, the Borrower, any of its respective Affiliates and
        any
        Person who may do business with or own securities of the Borrower or any
        such
        Affiliate, all as if HVB were not the Administrative Agent and without any
        duty
        to account therefor to the Banks.

       

      10.5             Non-Reliance
        on Administrative Agent and Other Banks.  Each Bank agrees
        that it has, independently and without reliance on the Administrative Agent
        or
        any other Bank, and based on such documents and information as it has deemed
        appropriate, made its own credit analysis of the Borrower and each Subsidiary
        and its decision to enter into the transactions contemplated by this Agreement
        and that it will, independently and without reliance upon the Administrative
        Agent or any other Bank, and based on such documents and information as it
        shall
        deem appropriate at the time, continue to make its own analysis and decisions
        in
        taking or not taking action under this Agreement.  The Administrative
        Agent shall not be required to keep itself informed as to the performance
        or
        observance by the Borrower of this Agreement or to inspect the properties
        or
        books of Panhandle Eastern, the Borrower or any Subsidiary.  Except
        for notices, reports, and other documents and information expressly required
        to
        be furnished to the Banks by the Administrative Agent hereunder, the
        Administrative Agent shall not have any duty or responsibility to provide
        any
        Bank with any credit or other information concerning the affairs, financial
        condition, or business of Southern Union, Panhandle Eastern, the Borrower
        or any
        Subsidiary (or any of their Affiliates) which may come into the possession
        of
        the Administrative Agent or any of its Affiliates.

       

      10.6             Indemnification.  Notwithstanding
        anything to the contrary herein contained, the Administrative Agent shall
        be
        fully justified in failing or refusing to take any action hereunder unless
        it
        shall first be indemnified to its satisfaction by the Banks against any and
        all
        liabilities, obligations, losses, damages, penalties, actions, judgments,
        suits,
        costs, expenses, and

       

      
        
                

                              
                            
      

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      disbursements
        of any kind or nature whatsoever which may be imposed on, incurred by or
        asserted against the Administrative Agent in any way relating to or arising
        out
        of its taking or continuing to take any action.  Each Bank agrees to
        indemnify the Administrative Agent (to the extent not reimbursed by the
        Borrower), according to such Bank’s Pro Rata Percentage, from and against any
        and all liabilities, obligations, losses, damages, penalties, actions,
        judgments, suits, costs, expenses, and disbursements of any kind or nature
        whatsoever which may be imposed on, incurred by, or asserted against the
        Administrative Agent in any way relating to or arising out of this Agreement
        or
        the Notes or any action taken or omitted by the Administrative Agent under
        this
        Agreement or the Notes; provided that no Bank shall be liable for any
        portion of such liabilities, obligations, losses, damages, penalties, actions,
        judgments, suits, costs, expenses, or disbursements resulting from the gross
        negligence or willful misconduct of the person being indemnified; and
provided, further, that it is the intention of each Bank to indemnify
        the Administrative Agent against the consequences of the Administrative Agent’s
        own negligence, whether such negligence be sole, joint, concurrent, active
        or
        passive.  Without limitation of the foregoing, each Bank agrees to
        reimburse the Administrative Agent promptly upon demand for its Pro Rata
        Percentage of any out-of-pocket expenses (including attorneys’ fees) incurred by
        the Administrative Agent in connection with the preparation, administration,
        or
        enforcement of, or legal advice in respect of rights or responsibilities
        under,
        this Agreement and the Notes, to the extent that the Administrative Agent
        is not
        reimbursed for such expenses by the Borrower.

       

      10.7             Successor
        Administrative Agent.  The Administrative Agent may resign at
        any time as Administrative Agent under this Agreement by giving written notice
        thereof to the Banks and the Borrower and may be removed at any time with
        or
        without cause by the Majority Banks.  Upon any such resignation or
        removal, the Majority Banks shall have the right to appoint a successor
        Administrative Agent.  If no successor Administrative Agent shall have
        been so appointed by the Majority Banks or shall have accepted such appointment
        within thirty (30) days after the retiring Administrative Agent’s giving of
        notice of resignation or the Majority Banks’ removal of the retiring
        Administrative Agent, then the retiring Administrative Agent may, on behalf
        of
        the Banks, appoint a successor Administrative Agent, which shall be a commercial
        bank organized under the laws of the United States of America or of any State
        thereof and having a combined capital and surplus of at least $500,000,000.
        Upon
        the acceptance of any appointment as Administrative Agent hereunder by a
        successor Administrative Agent, such successor Administrative Agent shall
        thereupon succeed to and become vested with all the rights, powers, privileges
        and duties of the retiring Administrative Agent, and the retiring Administrative
        Agent shall be discharged from its duties and obligations under this
        Agreement.  After any retiring Administrative Agent’s resignation or
        removal hereunder as Administrative Agent, the provisions of this Section
        10
        shall inure to its benefit as to any actions taken or omitted to be taken
        by it
        while it was Administrative Agent under this Agreement.

       

      10.8                        Administrative
        Agent’s Reliance.  The Borrower shall notify the
        Administrative Agent in writing of the names of its officers and employees
        authorized to request a Loan on behalf of the Borrower and shall provide
        the
        Administrative Agent with a specimen signature of each such officer or
        employee.  The Administrative Agent shall be entitled to rely
        conclusively on such officer’s or employee’s authority to request a Loan on
        behalf of the Borrower until the Administrative Agent receives written notice
        from the Borrower to the contrary.  The Administrative Agent shall
        have no duty to verify the authenticity of the signature appearing on any
        Notice
        of Borrowing, and, with respect to any oral request for a Loan, the

       

      
        
                

                              
                            
      

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      Administrative
        Agent shall have no duty to verify the identity of any Person representing
        himself as one of the officers or employees authorized to make such request
        on
        behalf of the Borrower.  Neither the Administrative Agent nor any Bank
        shall incur any liability to the Borrower in acting upon any telephonic notice
        referred to above which the Administrative Agent or such Bank believes in
        good
        faith to have been given by a duly authorized officer or other Person authorized
        to borrow on behalf of the Borrower or for otherwise acting in good
        faith.

       

      11.                      GUARANTY.  

       

      11.1             Guaranty.  Each
        Guarantor hereby absolutely, unconditionally and irrevocably guarantees the
        punctual payment when due, whether at scheduled maturity or by acceleration,
        demand or otherwise, of all Obligations of the Borrower now or hereafter
        existing under or in respect of the Loan Documents (including, without
        limitation, any extensions, modifications, substitutions, amendments or renewals
        of any or all of the foregoing Obligations), whether direct or indirect,
        absolute or contingent, and whether for principal, interest, premiums, fees,
        indemnities, contract causes of action, costs, expenses or otherwise (such
        Obligations being the “Guaranteed Obligations”).

       

      11.2             Guaranty
        Absolute.  Each Guarantor guarantees that the Guaranteed
        Obligations will be paid strictly in accordance with the terms of the Loan
        Documents, regardless of any law, regulation or order now or hereafter in
        effect
        in any jurisdiction affecting any of such terms or the rights of any Bank
        with
        respect thereto.  The Obligations of each Guarantor under or in
        respect of this Guaranty are independent of any Obligations of the Borrower
        under or in respect of the Loan Documents, and a separate action or actions
        may
        be brought and prosecuted against each Guarantor to enforce this Guaranty,
        irrespective of whether any action is brought against the Borrower or whether
        the Borrower is joined in any such action or actions.  The liability
        of each Guarantor under this Guaranty shall be irrevocable, absolute and
        unconditional irrespective of, and each Guarantor hereby irrevocably waives
        any
        defenses it may now have or hereafter acquire in any way relating to, any
        or all
        of the following:

       

      (a)           any
        lack of validity or enforceability of any Loan Document or any agreement
        or
        instrument relating thereto;

       

      (b)           any
        change in the time, manner or place of payment of, or in any other term of,
        all
        or any of the Guaranteed Obligations or any other Obligations of the Borrower
        under or in respect of the Loan Documents, or any other amendment or waiver
        of
        or any consent to departure from any Loan Document, including, without
        limitation, any increase in the Guaranteed Obligations resulting from the
        extension of additional credit to any Loan Party or any of its Subsidiaries
        or
        otherwise;

       

      (c)           any
        taking, exchange, release or non-perfection of any collateral, or any taking,
        release or amendment or waiver of, or consent to departure from, any other
        guaranty, for all or any of the Guaranteed Obligations;

       

      (d)           any
        manner of application of any collateral, or proceeds thereof, to all or any
        of
        the Guaranteed Obligations, or any manner of sale or other disposition of
        any
        collateral for all or any of the Guaranteed Obligations or any other Obligations
        of any

       

      
        
                

                              
                            
      

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      Loan
        Party under the Loan Documents or any other assets of any Loan Party or any
        of
        its Subsidiaries;

       

      (e)           any
        change, restructuring or termination of the corporate structure or existence
        of
        any Loan Party or any of its Subsidiaries;

       

      (f)           any
        failure of any Bank to disclose to any Loan Party any information relating
        to
        the business, operations, financial condition, assets or prospects of any
        other
        Loan Party now or hereafter known to such Bank (each Guarantor waiving any
        duty
        on the part of the Banks to disclose such information);

       

      (g)           the
        failure of any other Person to execute or deliver any other guaranty or
        agreement or the release or reduction of liability of any other guarantor
        or
        surety with respect to the Guaranteed Obligations; or

       

      (h)           any
        other circumstance (including, without limitation, any statute of limitations)
        or any existence of or reliance on any representation by any Bank that might
        otherwise constitute a defense available to, or a discharge of, any Loan
        Party
        or any other guarantor or surety.

       

      This
        Guaranty shall continue to be effective or be reinstated, as the case may
        be, if
        at any time any payment of any of the Guaranteed Obligations is rescinded
        or
        must otherwise be returned by any Bank or any other Person upon the insolvency,
        bankruptcy or reorganization of the Borrower or otherwise, all as though
        such
        payment had not been made.

       

      11.3             Waivers
        and Acknowledgments.  

       

      (a)           Each
        Guarantor hereby unconditionally and irrevocably waives promptness, diligence,
        notice of acceptance, presentment, demand for performance, notice of
        nonperformance, default, acceleration, protest or dishonor and any other
        notice
        with respect to any of the Guaranteed Obligations and this Guaranty and any
        requirement that any Bank protect, secure, perfect or insure any Lien or
        any
        property subject thereto or exhaust any right or take any action against
        any
        Loan Party or any other Person or any collateral.

       

      (b)           Each
        Guarantor hereby unconditionally and irrevocably waives any right to revoke
        this
        Guaranty and acknowledges that this Guaranty is continuing in nature and
        applies
        to all Guaranteed Obligations, whether existing now or in the
        future.

       

      (c)           Each
        Guarantor hereby unconditionally and irrevocably waives (i) any defense arising
        by reason of any claim or defense based upon an election of remedies by any
        Bank
        that in any manner impairs, reduces, releases or otherwise adversely affects
        the
        subrogation, reimbursement, exoneration, contribution or indemnification
        rights
        of each Guarantor or other rights of such Guarantor to proceed against the
        Borrower, any other guarantor or any other Person and (ii) any defense based
        on
        any right of set-off or counterclaim against or in respect of the Obligations
        of
        such Guarantor hereunder.

       

      
        
                

                              
                            
      

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      (d)           Each
        Guarantor hereby unconditionally and irrevocably waives any duty on the part
        of
        any Bank to disclose to any Guarantor any matter, fact or thing relating
        to the
        business, operations, financial condition, assets or prospects of the Borrower
        or any of its Subsidiaries now or hereafter known by such Bank.

       

      (e)           Each
        Guarantor acknowledges that it will receive substantial direct and indirect
        benefits from the financing arrangements contemplated by the Loan Documents
        and
        that the waivers set forth in Section 11.2 (Guaranty Absolute) and this Section
        11.3 are knowingly made in contemplation of such benefits.

       

      11.4             Subrogation.  Each
        Guarantor hereby unconditionally and irrevocably agrees not to exercise any
        rights that it may now have or hereafter acquire against the Borrower that
        arise
        from the existence, payment, performance or enforcement of such Guarantor’s
        Obligations under or in respect of this Guaranty or any other Loan Document,
        including, without limitation, any right of subrogation, reimbursement,
        exoneration, contribution or indemnification and any right to participate
        in any
        claim or remedy of any Bank against the Borrower or any other insider guarantor,
        whether or not such claim, remedy or right arises in equity or under contract,
        statute or common law, including, without limitation, the right to take or
        receive from the Borrower, directly or indirectly, in cash or other property
        or
        by set-off or in any other manner, payment or security on account of such
        claim,
        remedy or right, unless and until all of the Guaranteed Obligations and all
        other amounts payable under this Guaranty shall have been paid in full in
        cash
        and the Commitments shall have expired or been terminated.  If any
        amount shall be paid to any Guarantor in violation of the immediately preceding
        sentence at any time prior to the later of (a) the payment in full in cash
        of
        the Guaranteed Obligations and all other amounts payable under this Guaranty
        and
        (b) the Maturity Date, such amount shall be received and held in trust for
        the
        benefit of the Banks, shall be segregated from other property and funds of
        such
        Guarantor and shall forthwith be paid or delivered to the Administrative
        Agent
        in the same form as so received (with any necessary endorsement or assignment)
        to be credited and applied to the Guaranteed Obligations and all other amounts
        payable under this Guaranty, whether matured or unmatured, in accordance
        with
        the terms of the Loan Documents or other amounts payable under this Guaranty
        thereafter arising.  If (i) any Guarantor shall make payment to any
        Bank of all or any part of the Guaranteed Obligations, (ii) all of the
        Guaranteed Obligations and all other amounts payable under this Guaranty
        shall
        have been paid in full in cash and (iii) the Maturity Date shall have occurred,
        the Banks will, at such Guarantor’s request and expense, execute and deliver to
        such Guarantor appropriate documents, without recourse and without
        representation or warranty, necessary to evidence the transfer by subrogation
        to
        such Guarantor of an interest in the Guaranteed Obligations resulting from
        such
        payment made by such Guarantor pursuant to this Guaranty.

       

      11.5             Subordination.  Each
        Guarantor hereby subordinates any and all debts, liabilities and other
        Obligations owed to such Guarantor by the Borrower (the “Subordinated
        Obligations”) to the Guaranteed Obligations to the extent and in the
        manner hereinafter set forth in this Section 11.5:

       

      (a)Except
        during the continuance of a Default (including the commencement and continuation
        of any proceeding under any Debtor Law relating to the Borrower), a Guarantor
        may receive regularly scheduled payments from the Borrower on account
        of

       

      
        
                

                              
                            
      

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      the
        Subordinated Obligations.  After the occurrence and during the
        continuance of any Default (including the commencement and continuation of
        any
        proceeding under any Debtor Law relating to the Borrower), however, unless
        the
        Administrative Agent otherwise agrees, no Guarantor shall demand, accept
        or take
        any action to collect any payment on account of the Subordinated
        Obligations.

       

      (b)           In
        any proceeding under any Debtor Law relating to the Borrower, each Guarantor
        agrees that the Banks shall be entitled to receive payment in full in cash
        of
        all Guaranteed Obligations (including all interest and expenses accruing
        after
        the commencement of a proceeding under any Debtor Law, whether or not
        constituting an allowed claim in such proceeding (“Post Petition
        Interest”)) before any Guarantor receives payment of any Subordinated
        Obligations.

       

      (c)           After
        the occurrence and during the continuance of any Default (including the
        commencement and continuation of any proceeding under any Debtor Law relating
        to
        the Borrower), each Guarantor shall, if the Administrative Agent so requests,
        collect, enforce and receive payments on account of the Subordinated Obligations
        as trustee for the Banks and deliver such payments to the Administrative
        Agent
        on account of the Guaranteed Obligations (including all Post Petition Interest),
        together with any necessary endorsements or other instruments of transfer,
        but
        without reducing or affecting in any manner the liability of such Guarantor
        under the other provisions of this Guaranty.

       

      (d)           After
        the occurrence and during the continuance of any Default (including the
        commencement and continuation of any proceeding under any Debtor Law relating
        to
        the Borrower), the Administrative Agent is authorized and empowered (but
        without
        any obligation to so do), in its discretion, (i) in the name of a Guarantor,
        to
        collect and enforce, and to submit claims in respect of, Subordinated
        Obligations and to apply any amounts received thereon to the Guaranteed
        Obligations (including any and all Post Petition Interest), and (ii) to require
        each Guarantor (A) to collect and enforce, and to submit claims in respect
        of,
        Subordinated Obligations and (B) to pay any amounts received on such obligations
        to the Administrative Agent for application to the Guaranteed Obligations
        (including any and all Post Petition Interest).

       

      11.6             Continuing
        Guaranty.  This Guaranty is a continuing guaranty and shall
        remain in full force and effect until the later of (a) the payment in full
        in
        cash of the Guaranteed Obligations and all other amounts payable under this
        Guaranty and (b) the Maturity Date.

       

      12.                      MISCELLANEOUS.  

       

      12.1             Amendments,
        Waivers, Etc.  No amendment or waiver of any provision of any
        Loan Document, nor consent to any departure by any Loan Party therefrom,
        shall
        in any event be effective unless the same shall be in writing and signed
        by the
        Borrower and the Majority Banks, and then such waiver or consent shall be
        effective only in the specific instance and for the specific purpose for
        which
        given; provided, however, that no amendment, waiver or consent shall,
        unless in writing and signed by each Bank, do any of the following:

       

      
        
                

                              
                            
      

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      (a)           waive
        any of the conditions specified in Section 4 (Conditions to
        Funding);

       

      (b)           increase
        the Commitment of any Bank or alter the term thereof, or subject any Bank
        to any
        additional or extended obligations;

       

      (c)           change
        the principal of, or decrease the rate of interest on, the Loans or any Note,
        or
        any fees or other amounts payable hereunder (except that the Required Banks
        may
        waive in writing the increase in Applicable Margin resulting from the occurrence
        of an SUG Change of Control);

       

      (d)           postpone
        any date fixed for any payment of principal of, or interest on, the Loans
        or any
        Note, or any fees (including, without limitation, any fee) or other amounts
        payable hereunder;

       

      (e)           change
        the definition of “Majority Banks” or “Required Banks”, or the number of Banks
        which shall be required for Banks, or any of them, to take any action
        hereunder;

       

      (f)           amend
        this Section 12.1; or

       

      (g)           reduce
        or limit the obligations of any Guarantor under the Loan Documents or release
        any Guarantor from its obligations under the Loan Documents;

       

      provided,
        further, that (x) no amendment, waiver or consent shall, unless in writing
        and signed by the Agent in addition to each Bank, affect the rights or duties
        of
        the Agent under any Loan Document and (y) at any time after the occurrence
        of an
        SUG Change of Control, the approval of the Required Banks shall be required
        in
        order to (a) amend or waive, or consent to any departure from, Section 6.1
        (Financial Covenant), Section 6.2 (Liens, Etc.), Section 6.7 (Restricted
        Payments), Section 7.1 (Liens, Etc.), Section 7.5 (Restricted Payments),
        8.1
        (Liens, Etc.) or 8.5 (Restricted Payments) or (b) to amend any defined term
        relating to any such provision if the effect of any such amendment contemplated
        in this clause (b) would be to cause such provision to be less onerous on
        the
        relevant Loan Party. No failure or delay on the part of any Bank or the Agent
        in
        exercising any power or right hereunder shall operate as a waiver thereof
        nor
        shall any single or partial exercise of any such right or power, or any
        abandonment or discontinuance of steps to enforce such a right or power,
        preclude any other or further exercise thereof or the exercise of any other
        right or power.  No course of dealing between the Borrower and any
        Bank or the Agent shall operate as a waiver of any right of any Bank or the
        Agent. No modification or waiver of any provision of this Agreement or the
        Note
        nor consent to any departure by the Borrower therefrom shall in any event
        be
        effective unless the same shall be in writing, and then such waiver or consent
        shall be effective only in the specific instance and for the purpose for
        which
        given.  No notice to or demand on the Borrower in any case shall
        entitle the Borrower to any other or further notice or demand in similar
        or
        other circumstances.

       

      12.2           Reimbursement
        of Expenses.  

       

      (a)           The
        Borrower agrees to pay on demand (and whether or not the Closing Date occurs)
        (1) all reasonable and documented out-of-pocket costs and expenses of

       

      
        
          
          

        

        
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the
          Administrative
          Agent and the Joint Lead Arrangers, including reasonable and documented
          fees and
          expenses of a single counsel for the Administrative Agent and the Joint
          Lead Arrangers, in connection with the syndication of the credit facilities
          provided for herein, the preparation and administration of this Agreement
          or any
          amendments, modifications or waivers of the provisions hereof, and (2)
          all costs
          and expenses of the Administrative Agent and each Bank in connection with
          the
          enforcement of the Loan Documents, whether in any action, suit or litigation,
          or
          any bankruptcy, insolvency or other similar proceeding affecting creditors’
rights generally (including, without limitation, the reasonable fees and
          expenses of counsel for the Administrative Agent and each Bank with respect
          thereto).  The Borrower further agrees to pay any stamp or other taxes
          that may be payable in connection with the execution or delivery of any
          Loan
          Document.

      

      
         

      

       

      (b)           If
        any payment of principal of, or Conversion of, any Eurodollar Rate Loan is
        made
        by the Borrower to or for the account of a Bank other than on the last day
        of
        the Interest Period for such Loan, as a result of a payment or Conversion
        pursuant to Section 2.5 (Prepayments), 2.8 (Conversion of Loans) or 2.9(d)
        (Increased Costs, Etc.), acceleration of the maturity of the Notes pursuant
        to
        Section 9 (Events of Default; Remedies) or for any other reason, or by an
        Eligible Assignee to a Bank other than on the last day of the Interest Period
        for such Loan upon an assignment of rights and obligations under this Agreement
        pursuant to Section 12.14 (Sale or Assignment) as a result of a demand by
        the
        Borrower pursuant to Section 12.14(a), or if the Borrower fails to make any
        payment or prepayment of a Loan for which a notice of prepayment has been
        given,
        whether pursuant to Section 2.3 (Repayment of Loans), 2.5 (Prepayments) or
        Section 9 (Events of Default; Remedies) or otherwise, the Borrower shall,
        upon
        demand by such Bank (with a copy of such demand to the Administrative Agent),
        pay to the Administrative Agent for the account of such Bank any amounts
        required to compensate such Bank for any additional losses, costs or expenses
        reasonably incurred by such Bank as a result of such payment or Conversion
        or
        such failure to pay or prepay, as the case may be, including, without
        limitation, any loss, cost or expense incurred by reason of the liquidation
        or
        reemployment of deposits or other funds acquired by any Bank to fund or maintain
        such Loan.

       

      (c)           The
        obligations of the Borrower under this Section 12.2 shall survive the
        termination of this Agreement and/or the payment of the Notes.

       

      12.3             Notices.  Any
        communications between the parties hereto or notices provided herein to be
        given
        shall be given to the following addresses:

       

      (a)           If
        to Panhandle Eastern,
        to:                 Panhandle
        Eastern Pipe Line Company, LP

      c/o
        Southern Union Company

      5444
        Westheimer Road

      Houston,
        Texas  77056

      Attn:    Richard
        N. Marshall,

          
Senior
        Vice
        President and

           Chief
        Financial Officer

      Phone:
        (713) 989-7000

      
        
                

                              
                            
      

                              NEWY1\8114089.7              
    

          
          

        

        
          58

          
            

          

        

        
          
          

        

      

      Fax:
        (713) 989-1213

      

      with
        copies
        to:                                           Southern
        Union Company

      5444
        Westheimer Road

      Houston,
        Texas  77056

      
        	
                 

              	
                              
                  Attn:

              	
                Monica
                  M. Gaudiosi,

              

      

      
        	
                 

              	
                Senior
                  Vice President and

              

      

      
        	
                 

              	
                Associate
                  General Counsel

              

      

      Phone:
        (713) 989-7567

      Fax:
        (713) 989-1213

       

      and

       

      Fleischman
        and Walsh, L.L.P.

      1919
        Pennsylvania Avenue, N.W.

      Suite
        600

      Washington,
        D.C. 20006

      Attn:  Seth
        M. Warner

      Phone:
        (202) 939-7945

      Fax:
        (202) 265-5706

       

      (b)           If
        to the Borrower,
        to:                          Trunkline
        LNG Holdings LLC

      c/o
        Southern Union Company

      5444
        Westheimer Road

      Houston,
        Texas  77056

      
        	
                 

              	
                Attn:

              	
                Richard
                  N. Marshall,

              

      

      
        	
                 

              	
                Senior
                  Vice President and

              

      

      
        	
                 

              	
                Chief
                  Financial Officer

              

      

      Phone:
        (713) 989-7000

      Fax:
        (713) 989-1213

       

      with
        copies
        to:                                      Southern
        Union Company

      5444
        Westheimer Road

      Houston,
        Texas  77056

      
        	
                 

              	
                Attn:

              	
                Monica
                  M. Gaudiosi,

              

      

      
        	
                 

              	
                Senior
                  Vice President and

              

      

      
        	
                 

              	
                Associate
                  General Counsel

              

      

      Phone:
        (713) 989-7567

      Fax:
        (713) 989-1213

       

      and

       

      Fleischman
        and Walsh, L.L.P.

      1919
        Pennsylvania Avenue, N.W.

      Suite
        600

      Washington,
        D.C. 20006

      Attn:  Seth
        M. Warner

      Phone:
        (202) 939-7945

      
        
                

                              
                            
      

                              NEWY1\8114089.7              
    

          
          

        

        
          59

          
            

          

        

        
          
          

        

      

      Fax:
        (202) 265-5706

      

      (c)           If
        to CCC,
        to:                                          CrossCountry
        Citrus, LLC

      c/o
        Southern Union Company

      5444
        Westheimer Road

      Houston,
        Texas  77056

      
        	
                 

              	
                Attn:

              	
                Richard
                  N. Marshall,

              

      

      
        	
                 

              	
                Senior
                  Vice President and

              

      

      
        	
                 

              	
                Chief
                  Financial Officer

              

      

      Phone:
        (713) 989-7000

      Fax:
        (713) 989-1213

       

      with
        copies
        to:                                       Southern
        Union Company

      5444
        Westheimer Road

      Houston,
        Texas  77056

      
        	
                 

              	
                Attn:

              	
                Monica
                  M. Gaudiosi,

              

      

      
        	
                 

              	
                Senior
                  Vice President and

              

      

      
        	
                 

              	
                Associate
                  General Counsel

              

      

      Phone:
        (713) 989-7567

      Fax:
        (713) 989-1213

       

      and

       

      Fleischman
        and Walsh, L.L.P.

      1919
        Pennsylvania Avenue, N.W.

      Suite
        600

      Washington,
        D.C. 20006

      Attn:  Seth
        M. Warner

      Phone:
        (202) 939-7945

      Fax:
        (202) 265-5706

       

      If
        to the
        Administrative                      
Bayerische Hypo- und Vereinsbank AG,

      Agent,
        to:                                             
New York Branch

      150
        East
        42nd Street

      New
        York,
        NY  10017-4679

      Attn:  Agency
        Services, Wayne Miller and Michael Whitman

      Tel:  212-672-5930/212-672-6076

      Fax:  212-672-6025

       

      
        
                

                              
                            
      

                              NEWY1\8114089.7              
    

          
          

        

        
          60

          
            

          

        

        
          
          

        

      

                  with
        copies
        to:                                  DLA
        Piper US LLP

      1251
        Avenue of the Americas

      New
        York,
        NY 10020

      Attn:  Nicolai
        Sarad

      Phone:
        (212) 335-4642

      Fax:
        (212) 884-8542

       

      and
        if to
        any Bank, at the address specified in Annex 1 hereto, or as to the Borrower
        or
        the Administrative Agent, to such other address as shall be designated by
        such
        party in a written notice to the other party and, as to each other party,
        at
        such other address as shall be designated by such party in a written notice
        to
        the Borrower and the Administrative Agent.  All notices or other
        communications required or permitted to be given hereunder shall be in writing
        and shall be considered as properly given (a) if delivered in person, (b)
        if
        sent by overnight delivery service (including Federal Express, UPS, ETA,
        Emery,
        DHL, AirBorne and other similar overnight delivery services), (c) if mailed
        by
        first class United States Mail, postage prepaid, registered or certified
        with
        return receipt requested or (d) if sent by facsimile or other electronic
        transmission.  Notice so given shall be effective upon receipt by the
        addressee, except that communication or notice so transmitted by direct written
        electronic means shall be deemed to have been validly and effectively given
        on
        the day (if a Business Day and, if not, on the next following Business Day)
        on
        which it is transmitted if transmitted before 4:00 p.m. (New York time),
        recipient’s time, and if transmitted after that time, on the next following
        Business Day; provided, however, that if any notice is tendered to an
        addressee and the delivery thereof is refused by such addressee, such notice
        shall be effective upon such tender.  Any party shall have the right
        to change its address for notice hereunder to any other location within the
        continental United States by giving of 30 days’ notice to the other parties in
        the manner set forth above.

       

      12.4             Governing
        Law.  This Agreement, and any instrument or agreement
        required hereunder (to the extent not otherwise expressly provided for therein),
        shall be governed by, and construed under, the laws of the State of New York,
        without reference to conflicts of laws (other than Section 5-1401 and Section
        5-1402 of the New York General Obligations Law).

       

      12.5             Waiver
        of Jury Trial|.  THE ADMINISTRATIVE AGENT, THE BANKS
        AND EACH LOAN PARTY HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE
        ANY
        RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
        HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
        ANY
        OTHER LOAN DOCUMENT, OR ANY COURSE OR CONDUCT, COURSE OF DEALING, STATEMENTS
        (WHETHER VERBAL OR WRITTEN), OR ACTIONS, OF THE ADMINISTRATIVE AGENT, THE
        BANKS
        OR THE LOAN PARTIES.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
        BANKS TO ENTER INTO THIS AGREEMENT.

       

      12.6             Consent
        to Jurisdiction.  The Administrative Agent, the Banks and
        each Loan Party agree that any legal action or proceeding by or against any
        Loan
        Party or with respect to or arising out of this Agreement or any other Loan
        Document may be brought in or removed to the Supreme Court of the State of
        New
        York, in and for the County of New York, or the United States District Court
        for
        the Southern District of New York, and any court of appeals from
        either

       

      
        
                

                              
                            
      

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      therefrom
        as the Administrative Agent may elect.  By execution and delivery of
        the Agreement, each of the Banks, the Administrative Agent and each Loan
        Party
        accepts, for themselves and in respect of their property, generally and
        unconditionally, the jurisdiction of the aforesaid courts.  The
        Administrative Agent, the Banks and each Loan Party irrevocably consent to
        the
        service of process out of any of the aforementioned courts in any manner
        permitted by law.  Nothing herein shall affect the right of the
        Administrative Agent and the Banks to bring legal action or proceedings in
        any
        other competent jurisdiction.  The Administrative Agent, the Banks and
        each Loan Party further agree that the aforesaid courts of the State of New
        York
        and of the United States of America shall have exclusive jurisdiction with
        respect to any claim or counterclaim of any Loan Party based upon the assertion
        that the rate of interest charged by the Banks on or under this Agreement,
        the
        Loans and/or the other Loan Documents is usurious. The Administrative Agent,
        the
        Banks and each Loan Party hereby waive any right to stay or dismiss any action
        or proceeding under or in connection with this Agreement or any other Loan
        Document brought before the foregoing courts on the basis of an inconvenient
        forum.  

       

      12.7             Survival
        of Representations, Warranties and Covenants.  All
        representations, warranties and covenants contained herein or made in writing
        by
        any Loan Party in connection herewith shall survive the execution and delivery
        of the Loan Documents and the Notes, and will bind and inure to the benefit
        of
        the respective successors and assigns of the parties hereto, whether so
        expressed or not, provided that the undertaking of the Banks to make
        the Loans to the Borrower shall not inure to the benefit of any successor
        or
        assign of the Borrower.  No investigation at any time made by or on
        behalf of the Banks shall diminish the Banks’ rights to rely on any
        representations made herein or in connection herewith.  All statements
        contained in any certificate or other written instrument delivered by any
        Loan
        Party or by any Person authorized by the Borrower under or pursuant to this
        Agreement or in connection with the transactions contemplated hereby shall
        constitute representations and warranties hereunder as of the time made by
        such
        Loan Party.

       

      12.8             Counterparts.  This
        Agreement may be executed in several counterparts, and by the parties hereto
        on
        separate counterparts, and each counterpart, when so executed and delivered,
        shall constitute an original instrument and all such separate counterparts
        shall
        constitute but one and the same instrument.

       

      12.9             Severability.  Should
        any clause, sentence, paragraph or section of this Agreement be judicially
        declared to be invalid, unenforceable or void, such decision shall not have
        the
        effect of invalidating or voiding the remainder of this Agreement, and the
        parties hereto agree that the part or parts of this Agreement so held to
        be
        invalid, unenforceable or void will be deemed to have been stricken herefrom
        and
        the remainder will have the same force and effectiveness as if such part
        or
        parts had never been included herein.  Each covenant contained in this
        Agreement shall be construed (absent an express contrary provision herein)
        as
        being independent of each other covenant contained herein, and compliance
        with
        any one covenant shall not (absent such an express contrary provision) be
        deemed
        to excuse compliance with one or more other covenants.

       

      12.10                      Descriptive
        Headings.  The section headings in this Agreement have been
        inserted for convenience only and shall be given no substantive meaning or
        significance whatsoever in construing the terms and provisions of this
        Agreement.

       

      
        
                

                              
                            
      

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      12.11                      Accounting
        Terms.  All accounting terms used herein which are not
        expressly defined in the Agreement, or the respective meanings of which are
        not
        otherwise qualified, shall have the respective meanings given to them in
        accordance with GAAP.

       

      12.12                      Limitation
        of Liability.  No claim may be made by any Person for any
        special, indirect, consequential, or punitive damages in respect to any claim
        for breach of contract arising out of or related to the transactions
        contemplated by this Agreement, or any act, omission, or event occurring
        in
        connection herewith and the parties hereto hereby waive, release, and agree
        not
        to sue upon any claim for any such damages, whether or not accrued and whether
        or not known or suspected to exist in its favor.

       

      12.13                      Set-Off.  Each
        Loan Party hereby gives and confirms to each Bank a right of set-off of all
        moneys, securities and other property of such Loan Party (whether special,
        general or limited) and the proceeds thereof, now or hereafter delivered
        to
        remain with or in transit in any manner to such Bank, its Affiliates,
        correspondents or agents from or for such Loan Party, whether for safekeeping,
        custody, pledge, transmission, collection or otherwise or coming into possession
        of such Bank, its Affiliates, correspondents or agents in any way, and also,
        any
        balance of any deposit accounts and credits of such Loan Party with, and
        any and
        all claims of security for the payment of the Loans and of all other liabilities
        and obligations now or hereafter owed by any Loan Party to such Bank, contracted
        with or acquired by such Bank, whether such liabilities and obligations be
        joint, several, absolute, contingent, secured, unsecured, matured or unmatured,
        and each Loan Party hereby authorizes each Bank, its Affiliates, correspondents
        or agents at any time or times, without prior notice, to apply such money,
        securities, other property, proceeds, balances, credits of claims, or any
        part
        of the foregoing, to such liabilities in such amounts as it may select, whether
        such liabilities be contingent, unmatured or otherwise, and whether any
        collateral security therefor is deemed adequate or not.  The rights
        described herein shall be in addition to any collateral security, if any,
        described in any separate agreement executed by any Loan Party.

       

      12.14                      Sale
        or Assignment.  

       

      (a)           Each
        Bank may assign and, so long as no Default shall have occurred and be continuing
        pursuant to Section 9.1 (Failure to Pay Obligations When Due) or 9.7 (Bankruptcy
        and Other Matters), if demanded by the Borrower (pursuant to Section 2.15
        (Replacement of Banks)) upon at least five Business Days’ notice to such Bank
        and the Administrative Agent, a Bank will assign, to one or more Eligible
        Assignees all or a portion of its rights and obligations under this Agreement
        and the other Loan Documents (including, without limitation, all or a portion
        of
        the Loans owing to it and the Note or Notes held by it); provided
        that

       

      (i)           each
        such assignment shall be of a uniform, and not a varying, percentage of all
        rights and obligations under and in respect of the Loan Agreement;

       

      (ii)           except
        in the case of an assignment of all of a Bank’s rights and obligations under
        this Agreement or any assignment to any Bank, an Affiliate of any Bank or
        an
        Approved Fund, the aggregate amount of the Loans being

       

      
        
                

                              
                            
      

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      assigned
        to such assignee pursuant to such assignment (determined as of the date of
        the
        Assignment and Acceptance with respect to such assignment) shall in no event
        be
        less than $5,000,000;

       

      (iii)           except
        in the case of an assignment to a Person that, immediately prior to such
        assignment, was a Bank, an Affiliate of any Bank or an Approved Fund, such
        assignment shall be approved by the Administrative Agent, and so long as
        no
        Default shall have occurred and be continuing pursuant to Section 9.1 (Failure
        to Pay Obligations When Due) or 9.7 (Bankruptcy and Other Matters) at the
        time
        of effectiveness of such assignment, the Borrower (in each case such approvals
        not to be unreasonably withheld or delayed); provided that no Borrower
        approval shall be required for any assignment made by HVB to any Eligible
        Assignee from the Closing Date through and including the two-month anniversary
        of the Closing Date;

       

      (iv)           each
        such assignment made as a result of a demand by the Borrower pursuant to
        this
        Section 12.14 shall be made in accordance with Section 2.15 (Replacement
        of
        Banks);

       

      (v)           no
        Bank shall be obligated to make any such assignment as a result of a demand
        by
        the Borrower pursuant to this Section 12.14 unless and until such Bank shall
        have received one or more payments from either the Borrower or one or more
        assignees in an aggregate amount at least equal to the aggregate outstanding
        principal amount of the Loans owing to such Bank, together with accrued interest
        thereon to the date of payment of such principal amount and all other amounts
        payable to such Bank under this Agreement;

       

      (vi)           the
        parties to each such assignment shall execute and deliver to the Administrative
        Agent, for its acceptance and recording in the Register, an Assignment and
        Acceptance, together with any Note or Notes subject to such assignment and
        a
        processing and recordation fee of $3,500 (provided, however, that for
        each such assignment made as a result of a demand by the Borrower pursuant
        to
        this Section 12.14, the Borrower shall pay to the Administrative Agent the
        applicable processing and recordation fee); and

       

      (vii)           the
        assignee, if it shall not be a Bank, shall deliver to the Administrative
        Agent
        an administrative questionnaire in the form prepared by the Administrative
        Agent.

       

      (b)           Upon
        such execution, delivery, acceptance and recording, from and after the effective
        date specified in such Assignment and Acceptance,

       

      (i)           the
        assignee thereunder shall be a party hereto and, to the extent that rights
        and
        obligations hereunder have been assigned to it pursuant to such Assignment
        and
        Acceptance, have the rights and obligations of a Bank hereunder and

       

      
        
                

                              
                            
      

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      (ii)           the
        Bank assignor thereunder shall, to the extent that rights and obligations
        hereunder have been assigned by it pursuant to such Assignment and Acceptance,
        relinquish its rights (other than its rights under Sections 2.9 (Increased
        Costs), 2.11 (Taxes) and 12.2 (Reimbursement of Expenses)) to the extent
        any
        claim thereunder relates to an event arising prior to such assignment) and
        be
        released from its obligations under this Agreement (and, in the case of an
        Assignment and Acceptance covering all of the remaining portion of an assigning
        Bank’s rights and obligations under this Agreement, such Bank shall cease to be
        a party hereto).

       

      (c)           By
        executing and delivering an Assignment and Acceptance, each Bank assignor
        thereunder and each assignee thereunder confirm to and agree with each other
        and
        the other parties thereto and hereto as follows:

       

      (i)           other
        than as provided in such Assignment and Acceptance, such assigning Bank makes
        no
        representation or warranty and assumes no responsibility with respect to
        any
        statements, warranties or representations made in or in connection with any
        Loan
        Document or the execution, legality, validity, enforceability, genuineness,
        sufficiency or value of, or the perfection or priority of any lien or security
        interest created or purported to be created under or in connection with,
        any
        Loan Document or any other instrument or document furnished pursuant
        thereto;

       

      (ii)           such
        assigning Bank makes no representation or warranty and assumes no responsibility
        with respect to the financial condition of any Loan Party or the performance
        or
        observance by any Loan Party of any of its obligations under any Loan Document
        or any other instrument or document furnished pursuant thereto;

       

      (iii)           such
        assignee confirms that it has received a copy of this Agreement, together
        with
        copies of the financial statements most recently delivered hereunder and
        such
        other documents and information as it has deemed appropriate to make its
        own
        credit analysis and decision to enter into such Assignment and
        Acceptance;

       

      (iv)           such
        assignee will, independently and without reliance upon any Administrative
        Agent,
        such assigning Bank or any other Bank and based on such documents and
        information as it shall deem appropriate at the time, continue to make its
        own
        credit decisions in taking or not taking action under this
        Agreement;

       

      (v)           such
        assignee confirms that it is an Eligible Assignee;

       

      (vi)           such
        assignee appoints and authorizes the Administrative Agent to take such action
        as
        agent on its behalf and to exercise such powers and discretion under the
        Loan
        Documents as are delegated to such Administrative Agent by the terms hereof
        and
        thereof, together with such powers and discretion as are reasonably incidental
        thereto; and

       

      
        
                

                              
                            
      

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      (vii)           such
        assignee agrees that it will perform in accordance with their terms all of
        the
        obligations that by the terms of this Agreement are required to be performed
        by
        it as a Bank.

       

      (d)           The
        Administrative Agent shall maintain at its address a copy of each Assignment
        and
        Acceptance delivered to and accepted by it and a register for the recordation
        of
        the names and addresses of the Banks and the principal amount of the Loans
        owing
        to, each Bank from time to time (the
“Register”).  The entries in the Register shall be
        conclusive and binding for all purposes, absent manifest error, and the
        Borrower, the Administrative Agent and the Banks may treat each Person whose
        name is recorded in the Register as a Bank hereunder for all purposes of
        this
        Agreement.  The Register shall be available for inspection by the
        Borrower or any Administrative Agent or any Bank at any reasonable time and
        from
        time to time upon reasonable prior notice.

       

      (e)           Upon
        its receipt of an Assignment and Acceptance executed by an assigning Bank
        and an
        assignee, together with any Note or Notes subject to such assignment, the
        Administrative Agent shall, if such Assignment and Acceptance has been completed
        and is in substantially the form of Exhibit C hereto, (1) accept such
        Assignment and Acceptance, (2) record the information contained therein in
        the
        Register and (3) give prompt notice thereof to the Borrower.  In the
        case of any assignment by a Bank, within five Business Days after its receipt
        of
        such notice, the Borrower, at its own expense, shall execute and deliver
        to the
        Administrative Agent in exchange for the surrendered Note or Notes a new
        Note to
        the order of such Eligible Assignee in an amount equal to the Loans assumed
        by
        it pursuant to such Assignment and Acceptance and, if any assigning Bank
        has
        retained any Loans hereunder, a new Note to the order of such assigning Bank
        in
        an amount equal to the Loans retained by it hereunder.  Such new Note
        or Notes shall be in an aggregate principal amount equal to the aggregate
        principal amount of such surrendered Note or Notes and shall be dated the
        effective date of such Assignment and Acceptance.  No assignment shall
        be effective for purposes of this Agreement unless it has been recorded in
        the
        Register as provided in this Section 12.14.

       

      (f)           Each
        Bank may sell participations to one or more Persons (other than any Loan
        Party
        or any of its Affiliates) in or to all or a portion of its rights and
        obligations under this Agreement (including, without limitation, all or a
        portion of its Commitments, the Loans owing to it and the Note or Notes (if
        any)
        held by it); provided, however, that (1) such Bank’s obligations under
        this Agreement shall remain unchanged, (2) such Bank shall remain solely
        responsible to the other parties hereto for the performance of such obligations,
        (3) such Bank shall remain the holder of any such Note for all purposes of
        this
        Agreement, (4) the Borrower, the Administrative Agent and the other Banks
        shall
        continue to deal solely and directly with such Bank in connection with such
        Bank’s rights and obligations under this Agreement and (5) no participant under
        any such participation shall have any right to approve any amendment or waiver
        of any provision of any Loan Document, or any consent to any departure by
        any
        Loan Party therefrom, except to the extent that such amendment, waiver or
        consent would reduce the principal of, or interest on, the Notes or any fees
        or
        other amounts payable hereunder, in each case to the extent subject to such
        participation, postpone any date fixed for any payment of principal of, or
        interest on, the Notes or any fees or other amounts payable hereunder, in
        each
        case to the

       

      
        
                

                              
                            
      

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          66

          
            

          

        

        
          
          

        

      

      extent
        subject to such participation, or release any Guarantor.  Subject to
        the last two sentences of this clause (f), the Borrower agrees that each
        participant shall be entitled to the benefits of Section 2.9 (Increased Costs),
        2.11 (Taxes) and 12.2(b) (Breakage Expenses) to the same extent as if it
        were a
        Bank and had acquired its interest by assignment.  To the extent
        permitted by law, each participant also shall be entitled to the benefits
        of
        Section 12.13 (Set-Off) as though it were a Bank, provided such
        participant agrees to be subject to Section 2.12 (Sharing of Payments, Etc.)
        as
        though it were a Bank.  A participant shall not be entitled to receive
        any greater payment under Section 2.9 (Increased Costs) or 2.11 (Taxes) than
        the
        applicable Bank 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 is organized under the laws of a jurisdiction outside the
        United States shall not be entitled to the benefits of Section 2.11 (Taxes)
        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 2.11(e) as though it were a Bank.

       

      (g)           Any
        Bank may, in connection with any assignment or participation or proposed
        assignment or participation pursuant to this Section 12.14, disclose to the
        assignee or participant or proposed assignee or participant any information
        relating to the Borrower furnished to such Bank by or on behalf of the Borrower;
        provided, however, that, prior to any such disclosure, the assignee or
        participant or proposed assignee or participant shall agree to preserve the
        confidentiality of any Confidential Information received by it from such
        Bank.

       

      (h)           Notwithstanding
        any other provision to the contrary set forth in this Agreement, any Bank
        may at
        any time create a security interest in all or any portion of its rights under
        this Agreement and the other Loan Documents (including, without limitation,
        the
        Loans owing to it and the Note or Notes held by it) in favor of any Federal
        Reserve Bank.

       

      (i)           Notwithstanding
        anything to the contrary contained herein, any Bank that is a fund that invests
        in bank loans may create a security interest in all or any portion of the
        Loans
        owing to it and the Note or Notes held by it to the trustee for holders of
        obligations owed, or securities issued, by such fund as security for such
        obligations or securities, provided, that unless and until such trustee
        actually becomes a Bank in compliance with the other provisions of this Section
        12.14, (1) no such pledge shall release the pledging Bank from any of its
        obligations under the Loan Documents and (2) such trustee shall not be entitled
        to exercise any of the rights of a Bank under the Loan Documents even though
        such trustee may have acquired ownership rights with respect to the pledged
        interest through foreclosure or otherwise.

       

      12.15                      Interest.  All
        agreements between a Loan Party, the Administrative Agent or any Bank, whether
        now existing or hereafter arising and whether written or oral, are hereby
        expressly limited so that in no contingency or event whatsoever, whether
        by
        reason of demand being made on any Note or otherwise, shall the amount paid,
        or
        agreed to be paid, to the Administrative Agent or any Bank for the use,
        forbearance, or detention of the money to be loaned under this Agreement
        or
        otherwise or for the payment or performance of any covenant or

       

      
        
                

                              
                            
      

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      obligation
        contained herein or in any document related hereto exceed the amount permissible
        at the Highest Lawful Rate.  If, as a result of any circumstances
        whatsoever, fulfillment of any provision hereof or of any of such documents,
        at
        the time performance of such provision shall be due, shall involve transcending
        the limit of validity prescribed by applicable usury law, then, ipso
        facto, the obligation to be filled shall be reduced to the limit of such
        validity, and if, from any such circumstance, the Administrative Agent or
        any
        Bank shall ever receive interest or anything which might be deemed interest
        under applicable law which would exceed the amount permissible at the Highest
        Lawful Rate, such amount which would be excessive interest shall be applied
        to
        the reduction of the principal amount owing on account of the Notes or the
        amounts owing on other obligations of the Borrower to the Administrative
        Agent
        or any Bank under this Agreement or any document related hereto and not to
        the
        payment of interest, or if such excessive interest exceeds the unpaid principal
        balance of the Notes and the amounts owing on other obligations of the Borrower
        to the Administrative Agent or any Bank under this Agreement or any document
        related hereto, as the case may be, such excess shall be refunded to the
        Borrower. All sums paid or agreed to be paid to the Administrative Agent
        or any
        Bank for the use, forbearance, or detention of the indebtedness of the Borrower
        to the Administrative Agent or any Bank shall, to the extent permitted by
        applicable law, be amortized, prorated, allocated, and spread throughout
        the
        full term of such indebtedness until payment in full of the principal thereof
        (including the period of any renewal or extension thereof) so that the interest
        on account of such indebtedness shall not exceed the Highest Lawful
        Rate.  The terms and provisions of this Section 12.15 shall control
        and supersede every other provision of all agreements between the Borrower
        and
        the Banks.

       

      12.16                      Indemnification.  THE
        BORROWER AGREES TO INDEMNIFY, DEFEND, AND SAVE HARMLESS THE ADMINISTRATIVE
        AGENT, EACH BANK AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
        AND ATTORNEYS, AND EACH OF THEM (THE “INDEMNIFIED PARTIES”),
        FROM AND AGAINST ALL CLAIMS, ACTIONS, SUITS, AND OTHER LEGAL PROCEEDINGS,
        DAMAGES, COSTS, INTEREST, CHARGES, TAXES, COUNSEL FEES, AND OTHER EXPENSES
        AND
        PENALTIES (INCLUDING WITHOUT LIMITATION ALL ATTORNEY FEES AND COSTS OR EXPENSES
        OF SETTLEMENT) WHICH ANY OF THE INDEMNIFIED PARTIES MAY SUSTAIN OR INCUR
        BY
        REASON OF OR ARISING OUT OF (a) THE MAKING OF ANY LOAN HEREUNDER, THE EXECUTION
        AND DELIVERY OF THIS AGREEMENT AND THE NOTES AND THE CONSUMMATION OF THE
        TRANSACTIONS CONTEMPLATED HEREBY AND THE EXERCISE OF ANY OF THE BANKS’ RIGHTS
        UNDER THIS AGREEMENT AND THE NOTES OR OTHERWISE, INCLUDING, WITHOUT LIMITATION,
        DAMAGES, COSTS, AND EXPENSES INCURRED BY ANY OF THE INDEMNIFIED PARTIES IN
        INVESTIGATING, PREPARING FOR, DEFENDING AGAINST, OR PROVIDING EVIDENCE,
        PRODUCING DOCUMENTS, OR TAKING ANY OTHER ACTION IN RESPECT OF ANY COMMENCED
        OR
        THREATENED LITIGATION UNDER ANY FEDERAL SECURITIES LAW OR ANY SIMILAR LAW
        OF ANY
        JURISDICTION OR AT COMMON LAW OR (b) ANY AND ALL CLAIMS OR PROCEEDINGS (WHETHER
        BROUGHT BY A PRIVATE PARTY, GOVERNMENTAL AUTHORITY OR OTHERWISE) FOR BODILY
        INJURY, PROPERTY DAMAGE, ABATEMENT, REMEDIATION, ENVIRONMENTAL DAMAGE, OR
        IMPAIRMENT OR ANY OTHER INJURY OR DAMAGE RESULTING FROM OR RELATING TO THE
        RELEASE OF ANY HAZARDOUS MATERIALS LOCATED UPON, MIGRATING INTO,

       

      
        
                

                              
                            
      

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      FROM,
        OR
        THROUGH OR OTHERWISE RELATING TO ANY PROPERTY OWNED OR LEASED BY THE BORROWER
        OR
        ANY SUBSIDIARY (WHETHER OR NOT THE RELEASE OF SUCH HAZARDOUS MATERIALS WAS
        CAUSED BY THE BORROWER, ANY SUBSIDIARY, A TENANT, OR SUBTENANT OF THE BORROWER
        OR ANY SUBSIDIARY, A PRIOR OWNER, A TENANT, OR SUBTENANT OF ANY PRIOR OWNER
        OR
        ANY OTHER PARTY AND WHETHER OR NOT THE ALLEGED LIABILITY IS ATTRIBUTABLE
        TO THE
        HANDLING, STORAGE, GENERATION, TRANSPORTATION, OR DISPOSAL OF ANY HAZARDOUS
        MATERIALS OR THE MERE PRESENCE OF ANY HAZARDOUS MATERIALS ON SUCH PROPERTY;
        PROVIDED THAT THE BORROWER SHALL NOT BE LIABLE TO THE INDEMNIFIED
        PARTIES WHERE THE RELEASE OF SUCH HAZARDOUS MATERIALS OCCURS AT ANY TIME
        AT
        WHICH THE BORROWER OR ANY SUBSIDIARY CEASES TO OWN OR LEASE SUCH PROPERTY);
        AND
PROVIDED FURTHER THAT NO INDEMNIFIED PARTY SHALL BE ENTITLED TO THE
        BENEFITS OF THIS SECTION 12.16 TO THE EXTENT ITS OWN GROSS NEGLIGENCE OR
        WILLFUL
        MISCONDUCT CONTRIBUTED TO ITS LOSS; AND PROVIDED FURTHER THAT IT IS THE
        INTENTION OF THE BORROWER TO INDEMNIFY THE INDEMNIFIED PARTIES AGAINST THE
        CONSEQUENCES OF THEIR OWN NEGLIGENCE.  THIS AGREEMENT IS INTENDED TO
        PROTECT AND INDEMNIFY THE INDEMNIFIED PARTIES AGAINST ALL RISKS HEREBY ASSUMED
        BY THE BORROWER.  THE OBLIGATIONS OF THE BORROWER UNDER THIS SECTION
        12.16 SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT AND THE REPAYMENT OF
        THE
        NOTES.

       

      12.17                      Payments
        Set Aside.  To the extent that the Borrower makes a payment
        or payments to the Administrative Agent or any Bank, or the Administrative
        Agent
        or any Bank exercises its right of set off, and such payment or payments
        or the
        proceeds of such set off or any part thereof are subsequently invalidated,
        declared to be fraudulent or preferential, set aside and/or required to be
        repaid to a trustee, receiver or any other Person under any Debtor Law or
        equitable cause, then, to the extent of such recovery, the obligation or
        part
        thereof originally intended to be satisfied, and all rights and remedies
        therefor, shall be revived and shall continue in full force and effect as
        if
        such payment had not been made or set off had not occurred.

       

      12.18                      Loan
        Agreement Controls.  If there are any conflicts or
        inconsistencies among this Agreement and any other document executed in
        connection with the transactions connected herewith, the provisions of this
        Agreement shall prevail and control.

       

      12.19                      Obligations
        Several.  The obligations of each Bank under this Agreement
        and the Note to which it is a party are several, and no Bank shall be
        responsible for any obligation or Commitment of any other Bank under this
        Agreement and the Note to which it is a party.  Nothing contained in
        this Agreement or the Note to which it is a party, and no action taken by
        any
        Bank pursuant thereto, shall be deemed to constitute the Banks to be a
        partnership, an association, a joint venture, or any other kind of
        entity.

       

      12.20                      Final
        Agreement.  THIS WRITTEN AGREEMENT REPRESENTS THE
        FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
        OF
        PRIOR, CONTEMPORANEOUS, OR

       

      
        
                

                              
                            
      

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      SUBSEQUENT
        ORAL AGREEMENT’S OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL
        AGREEMENTS BETWEEN THE PARTIES.

       

      

       

      
        
                

                              
                            
      

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      IN
        WITNESS WHEREOF, the parties hereto, by their respective officers thereunto
        duly
        authorized, have executed this Agreement on the dates set forth below to
        be
        effective as of June ___, 2007.

       

      
        	 	
                TRUNKLINE
                  LNG HOLDINGS LLC

                As
                  Borrower

              
	 	
                By:

              	 
	 	
                Name:

              	 
	 	
                Title:

              	 
	 	
                PANHANDLE
                  EASTERN PIPE LINE COMPANY, LP

                As
                  a Guarantor

              
	 	
                By:

              	 
	 	
                Name:

              	 
	 	
                Title:

              	 
	 	
                CROSSCOUNTRY
                  CITRUS, LLC

                As
                  a Guarantor

              
	 	
                By:

              	 
	 	
                Name:

              	 
	 	
                Title:

              	
                _______________________________

              
	 	 	 
	 	
                 

                BAYERISCHE
                  HYPO- UND VEREINSBANK AG, NEW YORK BRANCH

                As
                  a Bank, as the Administrative Agent for the Banks, and on behalf
                  of
                  Unicredit Markets and Investment Banking, Joint Lead Arranger and
                  Joint
                  Book Manager.

                and
                  on behalf of Unicredit Markets & Investment Banking, as Joint Lead
                  Arranger and Joint Book Manager.

                 

              
	 	
                By:

              	 
	 	
                Name:

              	 
	 	
                Title:

              	 
	 	
                By:

              	 
	 	
                Name:

              	 
	 	
                Title:

              	 
	
                [Signature
                  Page to Credit Agreement]

              
	 	
                BANK
                  OF AMERICA N.A.

                As
                  Syndication
                  Agent

                 

              
	 	
                By:
                  ___________________________________

              
	 	
                Name:
                  ________________________________

              
	 	
                Title:
                  _________________________________

              
	 	
                ADDRESS
                  FOR NOTICE:

                ____________________

                ____________________

                ____________________

                Tel:

                Fax:

              
	 	 
	 	
                JPMORGAN
                  CHASE BANK, N.A.,

                As
                  Co-Documentation Agent

              
	 	
                By:
                  ___________________________________

              
	 	
                Name:
                  ________________________________

              
	 	
                Title:
                  _________________________________

              
	 	
                ADDRESS
                  FOR NOTICE:

                ____________________

                ____________________

                ____________________

                Tel:

                Fax:

              
	
                 

                 

                [Signature
                  Page to Credit Agreement]

              
	 	
                BAYERSICHE
                  LANDESBANK, New York Branch

                 As
                  Co-Documentation Agent

              
	 	
                By:
                  ___________________________________

              
	 	
                Name:
                  ________________________________

              
	 	
                Title:
                  _________________________________

              
	 	
                ADDRESS
                  FOR NOTICE:

                ____________________

                ____________________

                ____________________

                Tel:

                Fax:

                 

              
	 
	 	
                MIZUHO
                  CORPORATE BANK, LTD.

                As
                  Co-Documentation Agent

              
	 	
                By:
                  ___________________________________

              
	 	
                Name:
                  ________________________________

              
	 	
                Title:
                  _________________________________

              
	 	
                ADDRESS
                  FOR NOTICE:

                ____________________

                ____________________

                ____________________

                Tel:

                Fax:

                 

              
	
                 

                 

                 

                 

                 

                 

                [Signature
                  Page to Credit Agreement]

              
	 	
                BANC
                  OF AMERICA SECURITIES LLC

                As
                  Joint Lead Arranger and Joint
                  Book Manager

                 

              
	 	
                By:
                  ___________________________________

              
	 	
                Name:
                  ________________________________

              
	 	
                Title:
                  _________________________________

              
	 	
                ADDRESS
                  FOR NOTICE:

                ____________________

                ____________________

                ____________________

                Tel:

                Fax:

              

      

      

       

      
        
                

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                CALYON
                  NEW YORK BRANCH

              
	 	
                By:
                  ___________________________________

              
	 	
                Name:
                  ________________________________

              
	 	
                Title:
                  _________________________________

              
	 	
                ADDRESS
                  FOR NOTICE:

                ____________________

                ____________________

                ____________________

                Tel:

                Fax:

                 

              

      

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      [Signature
        Page to Credit Agreement]

      
        
                

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                MALAYAN
                  BANKING BERHAD, NEW YORK BRANCH

              
	 	
                By:
                  ___________________________________

              
	 	
                Name:
                  ________________________________

              
	 	
                Title:
                  _________________________________

              
	 	
                ADDRESS
                  FOR NOTICE:

                ____________________

                ____________________

                ____________________

                Tel:

                Fax:

                 

              

      

      

       

      

       

      

       

      

       

      

       

      

       

      
        
                

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                [SUNTRUST
                  BANK]

              
	 	
                By:
                  ___________________________________

              
	 	
                Name:
                  ________________________________

              
	 	
                Title:
                  _________________________________

              
	 	
                ADDRESS
                  FOR NOTICE:

                ____________________

                ____________________

                ____________________

                Tel:

                Fax:

                 

              

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      [Signature
        Page to Credit Agreement]

      
        	 	
                THE
                  BANK OF TOKYO-MITSUBISHI UFJ, LTD.

              
	 	
                By:
                  ___________________________________

              
	 	
                Name:
                  ________________________________

              
	 	
                Title:
                  _________________________________

              
	 	
                ADDRESS
                  FOR NOTICE:

                ____________________

                ____________________

                ____________________

                Tel:

                Fax:

                 

              

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      [Signature
        Page to Credit Agreement]

      
        
                

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                NATIONAL
                  BANK OF EGYPT, NEW YORK BRANCH

              
	 	
                By:
                  ___________________________________

              
	 	
                Name:
                  ________________________________

              
	 	
                Title:
                  _________________________________

              
	 	
                ADDRESS
                  FOR NOTICE:

                ____________________

                ____________________

                ____________________

                Tel:

                Fax:

                 

              

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      [Signature
        Page to Credit Agreement]

      
        
                

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                WELLS
                  FARGO BANK, N.A.

              
	 	
                By:
                  ___________________________________

              
	 	
                Name:
                  ________________________________

              
	 	
                Title:
                  _________________________________

              
	 	
                ADDRESS
                  FOR NOTICE:

                ____________________

                ____________________

                ____________________

                Tel:

                Fax:

                 

              

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      [Signature
        Page to Credit Agreement]

      
        
                

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                [UMB
                  BANK]

              
	 	
                By:
                  ___________________________________

              
	 	
                Name:
                  ________________________________

              
	 	
                Title:
                  _________________________________

              
	 	
                ADDRESS
                  FOR NOTICE:

                ____________________

                ____________________

                ____________________

                Tel:

                Fax:

                 

              

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      [Signature
        Page to Credit Agreement]

      
        
                

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      ANNEX
        1

       

      

       

      COMMITMENTS

       

      [to
        the extent you have more than one address for delivery of specific notices,
        please specify]

       

      
        	
                No.

              	
                Bank
                  and Address

              	
                Commitment

              
	
                1

              	
                BAYERISCHE
                  HYPO- UND VEREINSBANK AG,

                NEW
                  YORK BRANCH,

                 

                Address
                  for Legal Notices, Financial Statements and Compliance
                  Notices:

                 

                150
                  East 42nd Street

                New
                  York, NY  10017-4679

                Attn:  Yoram
                  Dankner and William Hunter

                Tel:  212-672-5446
                  and 212-672-5340

                Fax:  212-672-5530

                 

                Address
                  for Notices related to Borrowings, Fees and Payments:

                 

                150
                  East 42nd Street

                New
                  York, NY  10017-4679

                Attn:
                  Wayne Miller and Mike Whitman

                Tel:
                  212-672-5930 and  212-672-6076

                Fax:
                  212-672-6025

                 

              	
                $[60,000,000]

              
	
                2

              	
                Bank
                  of  America, N.A.

                 

                214
                  North Tryon Street, 18th Floor

                Charlotte,
                  NC 28255

                Attn:

                Fax:
                  [704-387-3624]

                 

              	
                $[60,000,000]

              
	
                3

              	 	 
	
                4

              	 	 
	
                5

              	 	 

      

      

       

      
        
                

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      EXHIBIT
        A

       

      NOTE

       

      $___________                                                                                       ____________,
        200__

       

      FOR
        VALUE
        RECEIVED, the undersigned, TRUNKLINE LNG HOLDINGS LLC, a limited liability
        company organized under the laws of Delaware (the “Borrower”),
        HEREBY PROMISES TO PAY to the order of ___________________________________
        (the
“Bank”), on or before the Maturity Date, the principal sum of
        ________________ Million and No/ 100ths Dollars ($_,000,000) in accordance
        with
        the terms and provisions of that certain Credit Agreement dated as of June
        __,
        2007, by and among the Borrower, Panhandle Eastern Pipe Line Company, LP
        and
        CrossCountry Citrus, LLC, as Guarantors, the Bank, the other banks named
        on the
        signature pages thereof, BAYERISCHE HYPO- UND VEREINSBANK AG, NEW YORK BRANCH
        as
        Administrative Agent for the Banks, Bank of America, N.A. as Syndication
        Agent,
        JPMorgan Chase Bank, N.A., Bayerische Landesbank, New York Branch and Mizuho
        Corporate Bank Ltd., as Co-Documentation Agents and Unicredit Markets &
Investment Banking acting through HVB and Banc of America Securities LLC
        as
        Joint Lead Arrangers and Joint Book Managers (as same may be amended, modified,
        increased, supplemented and/or restated from time to time, the “Credit
        Agreement”).  Capitalized terms used herein and not otherwise
        defined shall have the meanings ascribed to such terms in the Credit
        Agreement.

       

      The
        outstanding principal balance of this Note shall be payable at the Maturity
        Date.  The Borrower promises to pay interest on the unpaid principal
        balance of this Note from the date of any Loan evidenced by this Note until
        the
        principal balance thereof is paid in full.  Interest shall accrue on
        the outstanding principal balance of this Note from and including the date
        of
        any Loan evidenced by this Note to but not including the Maturity Date at
        the
        rate or rates, and shall be due and payable on the dates, set forth in the
        Credit Agreement.  Any amount not paid when due with respect to
        principal (whether at stated maturity, by acceleration or otherwise), costs
        or
        expenses, or, to the extent permitted by applicable law, interest, shall
        bear
        interest from the date when due to and excluding the date the same is paid
        in
        full, payable on demand, at the rate provided for in Section 2.6(b) of the
        Credit Agreement.

       

      Payments
        of principal and interest, and all amounts due with respect to costs and
        expenses, shall be made in lawful money of the United States of America in
        immediately available funds, without deduction, set off or counterclaim to
        the
        account of the Administrative Agent at the principal office of Bayerische
        Hypo-
        und Vereinsbank AG, New York Branch in New York, New York (or such other
        address
        as the Administrative Agent under the Credit Agreement may specify) not later
        than noon (New York time) on the dates on which such payments shall become
        due
        pursuant to the terms and provisions set forth in the Credit
        Agreement.

       

      If
        any
        payment of interest or principal herein provided for is not paid when due,
        then
        the owner or holder of this Note may at its option, by notice to the Borrower,
        declare the unpaid, principal balance of this Note, all accrued and unpaid
        interest thereon and all other amounts payable under this Note to be forthwith
        due and payable, whereupon this Note, all such interest

       

      
        
                

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      and
        all
        such amounts shall become and be forthwith due and payable in full, without
        presentment, demand, protest, notice of intent to accelerate, notice of actual
        acceleration or further notice of any kind, all of which are hereby expressly
        waived by the Borrower.

       

      If
        any
        payment of principal or interest on this Note shall become due on a Saturday,
        Sunday, or public holiday on which the Administrative Agent is not open for
        business, such payment shall be made on the next succeeding Business Day
        and
        such extension of time shall in such case be included in computing interest
        in
        connection with such payment.

       

      In
        addition to all principal and accrued interest on this Note, the Borrower
        agrees
        to pay (a) all reasonable costs and expenses incurred by the Administrative
        Agent and all owners and holders of this Note in collecting this Note through
        any probate, reorganization bankruptcy or any other proceeding and (b)
        reasonable attorneys’ fees when and if this Note is placed in the hands of an
        attorney for collection after default.

       

      All
        agreements between the Borrower and the Bank, whether now existing or hereafter
        arising and whether written or oral, are hereby expressly limited so that
        in no
        contingency or event whatsoever, whether by reason of demand being made on
        this
        Note or otherwise, shall the amount paid, or agreed to be paid, to the Bank
        for
        the use, forbearance, or detention of the money to be loaned under the Credit
        Agreement and evidenced by this Note or otherwise or for the payment or
        performance of any covenant or obligation contained in the Credit Agreement
        or
        this Note exceed the amount permissible at Highest Lawful Rate.  If as
        a result of any circumstances whatsoever, fulfillment of any provision hereof
        or
        of the Credit Agreement at the time performance of such provision shall be
        due,
        shall involve transcending the limit of validity prescribed by applicable
        usury
        law, then, ipso facto, the obligation to be fulfilled shall be reduced
        to the limit of such validity, and if from any such circumstance, the Bank
        shall
        ever receive interest or anything which might be deemed interest under
        applicable law which would exceed the amount permissible at the Highest Lawful
        Rate, such amount which would be excessive interest shall be applied to the
        reduction of the principal amount owing on account of this Note or the amounts
        owing on other obligations of the Borrower to the Bank under the Credit
        Agreement and not to the payment of interest, or if such excessive interest
        exceeds the unpaid principal balance of this Note and the amounts owing on
        other
        obligations of the Borrower to the Bank under the Credit Agreement, as the
        case
        may be, such excess shall be refunded to the Borrower.  In determining
        whether or not the interest paid or payable under any specific contingencies
        exceeds the Highest Lawful Rate, the Borrower and the Bank shall, to the
        maximum
        extent permitted under applicable law, (a) characterize any nonprincipal
        payment
        as an expense, fee or premium rather than as interest, (b) exclude voluntary
        prepayments and the effects thereof and (c) prorate, allocate and spread
        in
        equal parts during the period of the full stated term of this Note, all interest
        at any time contracted for, charged, received or reserved in connection with
        the
        indebtedness evidenced by this Note.

       

      This
        Note
        is one of the Notes provided for in, and is entitled to the benefits of,
        the
        Credit Agreement, which Credit Agreement, among other things, contains
        provisions for acceleration of the maturity hereof upon the happening of
        certain
        stated events, for prepayments on account of principal hereof prior to the
        maturity hereof upon the terms and conditions and with the effect therein
        specified, and provisions to the effect that no provision of the Credit
        Agreement or this Note shall require the payment or permit the collection
        of
        interest in excess of the Highest Lawful Rate.  It is contemplated
        that by reason of prepayments or repayments hereon prior to the

       

      
        
                

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      Maturity
        Date, there may be times when no indebtedness is owing hereunder prior to
        such
        date; but notwithstanding such occurrence this Note shall remain valid and
        shall
        be in full force and effect as to Loans made pursuant to the Credit Agreement
        subsequent to each such occurrence.

       

      Except
        as
        otherwise specifically provided for in the Credit Agreement, the Borrower
        and
        any and all endorsers, guarantors and sureties severally waive grace, demand,
        presentment for payment, notice of dishonor or default, protest, notice of
        protest, notice of intent to accelerate, notice of acceleration and diligence
        in
        collecting and bringing of suit against any party hereto, and agree to all
        renewals, extensions or partial payments hereon and to any release or
        substitution of security hereof, in whole or in part, with or without notice,
        before or after maturity.

       

      THIS
        NOTE
        SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
        OF
        NEW YORK AND APPLICABLE FEDERAL LAW.

       

      IN
        WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered
        by its officer thereunto duly authorized effective as of the date first above
        written.

       

      
        	 	
                TRUNKLINE
                  LNG HOLDINGS LLC

                 

              
	 	
                By:

              	 
	 	
                Name:

              	 
	 	
                Title:

              	 
	 	 

      

      

      
        
                

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      EXHIBIT
        B

       

      ASSIGNMENT
        AND ACCEPTANCE

       

      [NAME
        AND
        ADDRESS OF

      ASSIGNING
        BANK]

       

                                                                                                  _______________,
        200__

      ________________

      ________________

      ________________

      ________________

       

      Re:                                Trunkline
        LNG Holdings Credit Agreement

       

      Ladies
        and Gentlemen:

       

      We
        have
        entered into An Amended and Restated Credit Agreement dated as of June __,
        2007
        (as same may be amended, modified, increased, supplemented and/or restated
        from
        time to time, the “Credit Agreement”), among certain banks
        (including us), Bayerische Hypo- und Vereinsbank AG, New York Branch (the
        “Administrative Agent”), Trunkline LNG Holdings LLC (the
“Company”) and the Guarantors party
        thereto.  Capitalized terms used herein and not otherwise defined
        shall have the meanings ascribed to such terms in the Credit
        Agreement.

       

      Each
        reference to the Credit Agreement, the Notes or any other document evidencing
        or
        governing the Loans (all such documents collectively, the “Financing
        Documents”) includes each such document as amended, modified, extended
        or replaced from time to time.  All times are New York
        times.

       

      1.           Assignment.  We
        hereby sell and assign to you without recourse, and you hereby unconditionally
        and irrevocably acquire for your own account and risk, a ___ percent (__%)
        undivided interest (“your assigned share”) in our Note and all Loans and
        interest thereon as provided in Section 2 of the Credit Agreement [, except
        that
        interest shall accrue on your assigned share in the principal of Alternate
        Base
        Rate Loans and Eurodollar Rate Loans at an annual rate equal to the rate
        provided in the Credit Agreement minus _____%] (collectively, the
“Assigned Obligations”)

       

      2.Materials
        Provided Assignee

       

      a.           We
        will promptly request that the Company issue new Notes to us and to you in
        substitution for our Note to reflect the assignment set forth
        herein.  Upon issuance of such substitute Notes, (i) you will become a
        Bank under the Credit Agreement, (ii) you will assume our obligations under
        the
        Credit Agreement to the extent of your assigned share, and (iii) the Company
        will release us from our obligations under the Credit Agreement to the extent,
        but only to the extent, of your assigned share.  [The Company consents
        to such release by signing this Agreement where indicated below.]  As
        a Bank, you will be entitled to the benefits and subject to

       

      
        
                

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      the
        obligations of a “Bank”, as set forth in the Credit Agreement, and your rights
        and liabilities with respect to the other Banks and the Administrative Agent
        will be governed by the Credit Agreement, including without limitation Section
        10 (The Administrative Agent) thereof.

       

      b.           We
        have furnished you copies of the Credit Agreement, our Note and each other
        Financing Document you have requested.  We do not represent or warrant
        (i) the priority, legality, validity, binding effect or enforceability of
        any
        Loan Document or any security interest created thereunder, (ii) the truthfulness
        and accuracy of any representation contained in any Loan Document, (iii)
        the
        filing or recording of any Loan Document necessary to perfect any security
        interest created thereunder, (iv) the financial condition of the Company
        or any
        other Person obligated under any Loan Document, any financial or other
        information, certificate, receipt or other document furnished or to be furnished
        under any Loan Document or (v) any other matter not specifically set forth
        herein having any relation to any Loan Document, your interest in one Note,
        the
        Company or any other Person.  You represent to us that you are able to
        make, and have made, your own independent investigation and determination
        of the
        foregoing matters, including, without limitation, the creditworthiness of
        the
        Company and the structure of the transaction.

       

      3.           Governing
        Law; Jurisdiction.  This Agreement, and any instrument
        or agreement required hereunder (to the extent not otherwise expressly provided
        for therein), shall be governed by, and construed under, the laws of the
        State
        of New York, without reference to conflicts of laws (other than Section 5-1401
        and Section 5-1402 of the New York General Obligations Law).

       

      4.           Notices.  All
        notices and other communications given hereunder to a party shall be given
        in
        writing (including bank wire, telecopy, telex or similar writing) at such
        party’s address set forth on the signature pages hereof or such other address as
        such party may hereafter specify by notice to the other party.  Notice
        may also be given by telephone to the Person, or any other officer in the
        office, listed on the signature pages hereof if confirmed promptly by telex
        or
        telecopy.  Notices shall be effective immediately, if given by
        telephone; upon transmission, if given by bank wire, electronic mail, telecopy;
        five days after deposit in the mails, if mailed; and when delivered, if given
        by
        other means.

       

      5.           Authority.  Each
        of us represents and warrants that the execution and delivery of this Agreement
        have been validly authorized by all necessary corporate action and that this
        Agreement constitutes a valid and legally binding obligation enforceable
        against
        it in accordance with its terms.

       

      6.           Counterparts.  This
        Agreement may be executed in one or more counterparts, and by each party
        on
        separate counterparts, each of which shall be an original but all of which
        taken
        together shall be but one instrument.

       

      7.           Amendments.  No
        amendment modification or waiver of any provision of this Agreement shall
        be
        effective unless in writing and signed by the party against whom enforcement
        is
        sought.

       

      If
        the
        foregoing correctly sets forth our agreement, please so indicate by signing
        the
        enclosed copy of this Agreement and returning it to us.

       

      
        	 	
                Very
                  truly yours,

              
	 	 
	 	
                By:

              	 
	 	
                Name:

              	 
	 	
                Title:

              	 
	 	
                [Street
                  Address]

              	 
	 	
                [City,
                  State, Zip Code]

              	 
	 	
                Telephone:

              	 
	 	
                Telecopy:

              	 
	
                AGREED
                  AND ACCEPTED:

              	 
	
                By:

              	 	 
	 	 	 
	 	 	 
	 	 	 
	
                Attention:

              	 	 
	
                Telephone:

              	 	 
	
                Telecopy:

              	 	 
	
                Account
                  for Payments:

              	 	 
	 	 

      

      ASSIGNMENT
        APPROVED PURSUANT TO SECTION 12.14 (SALE OR ASSIGNMENT) OF THE CREDIT AGREEMENT
        AND RELEASE APPROVED IN SECTION 2 OF THIS AGREEMENT:

       

      
        	 	
                TRUNKLINE
                  LNG HOLDINGS LLC

                 

              
	 	
                By:

              	 
	 	
                Name:

              	 
	 	
                Title:

              	 
	 	 

      

      

      
        
                

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      Schedule
        3.1

      Subsidiaries

      

      

      Trunkline
        LNG Company, LLC

      
        
                

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      Schedule
        3.10

      Tax
        Matters

      

      Tax
        Sharing Agreement, effective as of April 25, 2005, among Panhandle Eastern
        Pipe
        Line Company, LP, Trunkline LNG Holdings LLC, Trunkline LNG Company, LLC,
        PanGas
        Storage, LLC, Panhandle Holdings, LLC, Trunkline Gas Company, LLC, Trunkline
        Field Services, LLC, Panhandle Storage, LLC,  Trunkline Offshore
        Pipeline, LLC, Trunkline Deepwater Pipeline, LLC, Sea Robin Pipeline Company,
        LLC, Panhandle Lake Charles Generation, LLC and any other subsidiaries that
        may
        become a part of the Panhandle group.

      

      
        
                

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      Schedule
        3.14

      ERISA
        Matters

      

                 Southern
        Union and the members of its “controlled group of corporations,” as defined in
        the Code, inadvertently failed to timely submit the information required
        by
        ERISA Section 4010 to the Pension Benefit Guaranty Corporation (the “PBGC”) for
        the information year ending December 31, 2003.  This information was
        required to be filed by April 15, 2004.  Upon discovery of this inadvertent
        failure, Eric Herschmann, Acting General Counsel of Southern Union, advised
        the
        PBGC and requested a waiver of any penalties that might otherwise be assessed
        against Southern Union, and the Borrower and Panhandle Eastern, as members
        of
        Southern Union’s controlled group.  For the information years ending
        December 31, 2004 and December 31, 2005, Southern Union submitted the
        information required by ERISA Section 4010 to the PBGC on a timely
        basis.

      

      2.           Southern
        Union recently made certain contributions to two of the ERISA Title IV plans
        that it sponsors 37 days after such contributions were required to be made
        to
        the plans.  Specifically, on February 21, 2007, Southern Union made
        the following two fourth quarterly installments for the 2006 plan years that
        were due January 15, 2007.  On February 21, 2007, Southern Union
        contributed $3,185,000 to Plan B under the Southern Union Company Retirement
        Income Plan (“Plan B”).  Also on February 21, 2007, Southern Union
        contributed $132,099 to the Southern Union Company Fall River Pension Plan
        for
        Union Employees (the “Fall River Plan”).

      

      The
        missed contributions were the
        result of a reorganization and restructuring within the business organization
        and the resulting reallocation of responsibilities.  Steps have been
        taken to ensure that this does not occur again.

      

      The
        late contributions to Plan B and
        the Fall River Plan constituted reportable events under ERISA Section
        4043(c)(5).  Two Forms 10 have been filed with the PBGC to report the
        late contributions.

      

      In
        addition, because the late
        contribution to Plan B exceeded $1,000,000, a statutory lien in the amount
        of
        $3,185,000 (the amount of the missed contribution) arose in favor of Plan
        B
        under Code Section 412(n) and ERISA Section 302(f) on January 15, 2007 (the
        due
        date of the missed contribution).  A published February 6, 2001 letter
        from the General Counsel of the PBGC states that this type of statutory lien
        is
        imposed to secure the amount of missed contributions.  The lien, which
        extends to all property and rights to property, whether real or personal,
        belonging to Southern Union and each member of its controlled group, as
        determined under Code Section 414(b), (c), (m) or (o), may
        be perfected and enforced only by the PBGC, or at the direction of the PBGC,
        by
        Southern Union or a member of its controlled group.  Although Code
        Section 412(n) and ERISA Section 302(f) provide that the lien continues to
        December 31, 2007, the funding obligation that resulted in the imposition
        of the
        lien has been satisfied as a result of Southern Union’s February 21, 2007
        contribution to Plan B.  A Form 200 has been filed with the PBGC to
        report the missed contribution in excess of $1,000,000.

      

      Although
        it is possible that the PBGC
        could assess late filing penalties with respect to the

      
        
                

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      Forms
        10
        and the Form 200 that were filed March 1, 2007, it is not yet known whether
        penalties will be assessed.  If assessed, it is anticipated that the
        penalties could be approximately $85,000.

      

      Notwithstanding
        the foregoing, the
        contributions have now been made, all administrative responsibilities (e.g.,
        PBGC filings) with respect to the delayed contributions have been satisfied,
        and
        steps have been taken to ensure that the administrative oversight does not
        recur. Moreover, because the required contributions were made prior to the
        60th day after
        they were due, no notification to plan participants is required.

      

      

      

      

      
        
                

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                    TABLE
              OF
              CONTENTS      
                     

                                                                                                                         Page

          

        

      

      Schedule
        3.17

      Environmental
        Matters

      

      None.

      

      
        
                
        

            
              	 	
                        

                       -i- 

                    	                

                                                            NEWY1\8114089.7

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