Document:

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                                  EXHIBIT 10.2

                                     Form of
                               Advisory Agreement

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                               ADVISORY AGREEMENT

         THIS ADVISORY AGREEMENT, dated as of _________________, 2004 is between
CNL RETIREMENT PROPERTIES, INC., a corporation organized under the laws of the
State of Maryland (the "Company") and CNL RETIREMENT CORP., a corporation
organized under the laws of the State of Florida (the "Advisor").

                               W I T N E S S E T H

         WHEREAS, the Company filed with the Securities and Exchange Commission
("SEC") a Registration Statement (No. 333-47411) on Form S-11 covering
15,500,000 of its common shares, par value $.01 per share ("Shares"), to be
offered to the public ("Initial Offering");

         WHEREAS, the Company filed with the SEC a Registration Statement (No.
333-37480) on Form S-11 covering 15,500,000 of its Shares, to be offered to the
public (the "2000 Offering");

         WHEREAS, the Company filed with the SEC a Registration Statement (No.
333-76538) on Form S-11 covering 45,000,000 of its Shares, to be offered to the
public (the "2002 Offering");

         WHEREAS, the Company filed with the SEC a Registration Statement (No.
333-100347) on Form S-11 covering 175,000,000 of its Shares, to be offered to
the public (the "2003 Offering");

         WHEREAS, the Company filed with the SEC a Registration Statement (No.
333-[   ]) on Form S-11 covering 400,000,000 of its Shares, to be offered to the
public (the "2004 Offering"), and the Company may subsequently issue securities
other than such Shares ("Securities") or otherwise raise additional capital;

         WHEREAS, the Initial Offering was terminated on September 18, 2000 and
the 2000 Offering of 15,500,000 Shares commenced;

         WHEREAS, the 2000 Offering was terminated on May 24, 2002 and the 2002
Offering of 45,000,000 Shares commenced;

         WHEREAS, the 2002 Offering was terminated on April 3, 2003 and the 2003
Offering of 175,000,000 Shares commenced;

         WHEREAS, the Company intends to commence the 2004 Offering of
400,000,000 Shares at such time that the 2003 Offering of 175,000,000 Shares is
terminated;

         WHEREAS, the Company is currently qualified as a REIT (as defined
below), and intends to continue to invest its funds in investments permitted by
the terms of the Registration Statement and Sections 856 through 860 of the Code
(as defined below);

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         WHEREAS, the Company desires to avail itself of the experience, sources
of information, advice, assistance and certain facilities available to the
Advisor and to have the Advisor undertake the duties and responsibilities
hereinafter set forth, on behalf of, and subject to the supervision, of the
Board of Directors of the Company all as provided herein; and

         WHEREAS, the Advisor is willing to undertake to render such services,
subject to the supervision of the Board of Directors, on the terms and
conditions hereinafter set forth;

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

         (1)      DEFINITIONS. As used in this Advisory Agreement (the
"Agreement"), the following terms have the definitions hereinafter indicated:

         Acquisition Expenses. Any and all expenses incurred by the Company, the
Advisor, or any Affiliate of either in connection with the selection or
acquisition of any Property or the making of any Mortgage Loan, whether or not
acquired, including, without limitation, legal fees and expenses, travel and
communication expenses, costs of appraisals, nonrefundable option payments on
property not acquired, accounting fees and expenses, and title insurance.

         Acquisition Fees. Any and all fees and commissions, exclusive of
Acquisition Expenses, paid by any person or entity to any other person or entity
(including any fees or commissions paid by or to any Affiliate of the Company or
the Advisor) in connection with making or investing in Mortgage Loans or the
purchase, development or construction of a Property, including, without
limitation, real estate commissions, acquisition fees, finder's fees, selection
fees, Development Fees, Construction Fees, nonrecurring management fees,
consulting fees, loan fees, points, the Secured Equipment Lease Servicing Fee,
or any other fees or commissions of a similar nature. Excluded shall be
development fees and construction fees paid to any person or entity not
affiliated with the Advisor in connection with the actual development and
construction of any Property.

         Advisor. CNL Retirement Corp., a Florida corporation, any successor
advisor to the Company, or any person or entity to which CNL Retirement Corp. or
any successor advisor subcontracts substantially all of its functions.

         Affiliate or Affiliated. As to any individual, corporation,
partnership, trust or other association (other than the Excess Shares Trust),
(i) any Person or entity directly or indirectly through one or more
intermediaries controlling, controlled by, or under common control with another
person or entity; (ii) any Person or entity, directly or indirectly owning,
controlling or holding with power to vote ten percent (10%) or more of the
outstanding voting securities of another Person or entity; (iii) any officer,
director, partner, or trustee of such Person or entity; (iv) any Person ten
percent (10%) or more of whose outstanding voting securities are directly or
indirectly owned, controlled, or held, with power to vote, by such other Person;
and (v) if such other Person or entity is an officer, director, partner, or
trustee of a Person or entity, the Person or entity for which such Person or
entity acts in any such capacity.

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         Appraised Value. Value according to an appraisal made by an Independent
Appraiser.

         Articles of Incorporation. The Articles of Incorporation of the
Company, as amended from time to time.

         Asset Management Fee. The fee payable to the Advisor for day-to-day
professional management services in connection with the Company and its
investments in Properties and Mortgage Loans pursuant to this Agreement.

         Assets. Properties, Mortgage Loans and Secured Equipment Leases,
collectively.

         Average Invested Assets. For a specified period, the average of the
aggregate book value of the assets of the Company invested, directly or
indirectly, in equity interests in and loans secured by real estate before
reserves for depreciation or bad debts or other similar non-cash reserves,
computed by taking the average of such values at the end of each month during
such period.

         Board of Directors or Board. The persons holding such office, as of any
particular time, under the Articles of Incorporation of the Company, whether
they be the Directors named therein or additional or successor Directors.

         Bylaws. The bylaws of the Company, as the same are in effect from time
to time.

         Cause. With respect to the termination of this Agreement, fraud,
criminal conduct, willful misconduct or willful or negligent breach of fiduciary
duty by the Advisor, breach of this Agreement, a default by the Sponsor under
the guarantee by the Sponsor to the Company or the bankruptcy of the Sponsor.

         Change of Control. A change of control of the Company of such a nature
that would be required to be reported in response to the disclosure requirements
of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act
of 1934, as amended, as enacted and in force on the date hereof (the "Exchange
Act"), whether or not the Company is then subject to such reporting
requirements; provided, however, that, without limitation, a change of control
shall be deemed to have occurred if: (i) any "person" (within the meaning of
Section 13(d) of the Exchange Act) is or becomes the "beneficial owner" (as that
term is defined in Rule 13d-3, as enacted and in force on the date hereof, under
the Exchange Act) of securities of the Company representing 8.5% or more of the
combined voting power of the Company's securities then outstanding; (ii) there
occurs a merger, consolidation or other reorganization of the Company which is
not approved by the Board of Directors of the Company; (iii) there occurs a
sale, exchange, transfer or other disposition of substantially all of the assets
of the Company to another entity, which disposition is not approved by the Board
of Directors of the Company; or (iv) there occurs a contested proxy solicitation
of the Stockholders of the Company that results in the contesting party electing
candidates to a majority of the Board of Directors' positions next up for
election.

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         Code. Internal Revenue Code of 1986, as amended from time to time, or
any successor statute thereto. Reference to any provision of the Code shall mean
such provision as in effect from time to time, as the same may be amended, and
any successor provision thereto, as interpreted by any applicable regulations as
in effect from time to time.

         Company. CNL Retirement Properties, Inc., a corporation organized under
the laws of the State of Maryland.

         Company Property. Any and all property, real, personal or otherwise,
tangible or intangible, including Mortgage Loans and Secured Equipment Leases,
which is transferred or conveyed to the Company (including all rents, income,
profits and gains therefrom), and which is owned or held by, or for the account
of, the Company.

         Competitive Real Estate Commission. A real estate or brokerage
commission for the purchase or sale of property, which is reasonable, customary,
and competitive in light of the size, type, and location of the property. The
total of all real estate commissions paid by the Company to all Persons
(including the Subordinated Disposition Fee payable to the Advisor) in
connection with any Sale of one or more of the Company's Properties shall not
exceed the lesser of (i) a Competitive Real Estate Commission or (ii) six
percent of the gross sales price of the Property or Properties.

         Construction Fee. A fee or other remuneration for acting as a general
contractor and/or construction manager to construct improvements, supervise and
coordinate projects or provide major repairs or rehabilitation on a Property.

         Contract Purchase Price. The amount actually paid or allocated (as of
the date of purchase) to the purchase, development, construction or improvement
of property, exclusive of Acquisition Fees and Acquisition Expenses.

         Contract Sales Price. The total consideration received by the Company
for the sale of Company Property.

         Development Fee. A fee for such activities as negotiating and approving
plans and undertaking to assist in obtaining zoning and necessary variances and
necessary financing for a specific Property, either initially or at a later
date.

         Director. A member of the Board of Directors of the Company.

         Distributions. Any distribution of money or other property by the
Company to owners of Equity Shares, including distributions that may constitute
a return of capital for federal income tax purposes.

         Equipment. The furniture, fixtures and equipment used at Retirement
Facilities by operators of Retirement Facilities.

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         Equity Interest. The stock of or other interests in, or warrants or
other rights to purchase the stock of or other interests in, any entity that has
borrowed money from the Company or that is a tenant of the Company or that is a
parent or controlling Person of any such borrower or tenant.

         Equity Shares. This term shall have the same meaning as the definition
of "Equity Shares" in the Company's Articles of Incorporation.

         Good Reason. With respect to the termination of this Agreement, (i) any
failure to obtain a satisfactory agreement from any successor to the Company to
assume and agree to perform the Company's obligations under this Agreement; or
(ii) any material breach of this Agreement of any nature whatsoever by the
Company.

         Gross Proceeds. The aggregate purchase price of all Shares sold for the
account of the Company through the 2004 Offering, without deduction for selling
commissions, volume discounts, the marketing support fee, due diligence expense
reimbursements or Offering Expenses. For the purpose of computing Gross
Proceeds, the purchase price of any Share for which reduced selling commissions
are paid to the Managing Dealer or a Soliciting Dealer (where net proceeds to
the Company are not reduced) shall be deemed to be the full offering price of
the Shares.

         Independent Appraiser. A qualified appraiser of real estate as
determined by the Board. Membership in a nationally recognized appraisal society
such as the American Institute of Real Estate Appraisers ("M.A.I.") or the
Society of Real Estate Appraisers ("S.R.E.A.") shall be conclusive evidence of
such qualification.

         Independent Director. A Director who is not and within the last two
years has not been directly or indirectly associated with the Advisor by virtue
of (i) ownership of an interest in the Advisor or its Affiliates, (ii)
employment by the Advisor or its Affiliates, (iii) service as an officer or
director of the Advisor or its Affiliates, (iv) performance of services, other
than as a Director, for the Company, (v) service as a director or trustee of
more than three real estate investment trusts advised by the Advisor, or (vi)
maintenance of a material business or professional relationship with the Advisor
or any of its Affiliates. A business or professional relationship is considered
material if the gross revenue derived by the Director from the Advisor and
Affiliates exceeds 5% of either the Director's annual gross revenue during
either of the last two years or the Director's net worth on a fair market value
basis. An indirect relationship shall include circumstances in which a
Director's spouse, parents, children, siblings, mothers- or fathers-in-law,
sons- or daughters-in-law, or brothers- or sisters-in-law are or have been
associated with the Advisor, any of its Affiliates, or the Company.

         Independent Expert. A person or entity with no material current or
prior business or personal relationship with the Advisor or the Directors and
who is engaged to a substantial extent in the business of rendering opinions
regarding the value of assets of the type held by the Company.

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         Initial Offering. The initial public offering of up to 15,500,000
Shares that was terminated on September 18, 2000.

         Invested Capital. The amount calculated by multiplying the total number
of Shares purchased by stockholders by the issue price, reduced by the portion
of any Distribution that is attributable to Net Sales Proceeds and by any
amounts paid by the Company to repurchase Shares pursuant to the Company's plan
for redemption of Shares.

         Joint Ventures. The joint venture or general partnership arrangements
in which the Company is a co-venturer or general partner which are established
to acquire Properties.

         Line of Credit. One or more lines of credit in an aggregate amount up
to $125,000,000 (or such greater amount as shall be approved by the Board of
Directors), the proceeds of which will be used to acquire Properties and make
Mortgage Loans and Secured Equipment Leases and for any other authorized
purpose. The Line of Credit may be in addition to any Permanent Financing.

         Listing. The listing of the Shares of the Company on a national
securities exchange or over-the-counter market.

         Managing Dealer. CNL Securities Corp., an Affiliate of the Advisor, or
such entity selected by the Board of Directors to act as the managing dealer for
the 2003 Offering. CNL Securities Corp. is a member of the National Association
of Securities Dealers, Inc.

         Mortgage Loans. In connection with mortgage financing provided by the
Company, the notes or other evidence of indebtedness or obligations which are
secured or collateralized by real estate, owned by the borrowers.

         Net Income. For any period, the total revenues applicable to such
period, less the total expenses applicable to such period excluding additions to
reserves for depreciation, bad debts or other similar non-cash reserves;
provided, however, Net Income for purposes of calculating total allowable
Operating Expenses (as defined herein) shall exclude the gain from the sale of
the Company's assets.

         Net Sales Proceeds. In the case of a transaction described in clause
(i)(A) of the definition of Sale, the proceeds of any such transaction less the
amount of all real estate commissions and closing costs paid by the Company. In
the case of a transaction described in clause (i)(B) of such definition, Net
Sales Proceeds means the proceeds of any such transaction less the amount of any
legal and other selling expenses incurred in connection with such transaction.
In the case of a transaction described in clause (i)(C) of such definition, Net
Sales Proceeds means the proceeds of any such transaction actually distributed
to the Company from the Joint Venture. In the case of a transaction or series of
transactions described in clause (i)(D) of the definition of Sale, Net Sales
Proceeds means the proceeds of any such transaction less the amount of all
commissions and closing costs paid by the Company. In the case of a transaction
described in clause (ii) of the definition of Sale, Net Sales Proceeds means the
proceeds of such transaction or series of transactions less all amounts
generated thereby and reinvested in one or

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more Properties within 180 days thereafter and less the amount of any real
estate commissions, closing costs, and legal and other selling expenses incurred
by or allocated to the Company in connection with such transaction or series of
transactions. Net Sales Proceeds shall also include, in the case of any lease of
a Property consisting of a building only, any Mortgage Loan or any Secured
Equipment Lease, any amounts from tenants, borrowers or lessees that the Company
determines, in its discretion, to be economically equivalent to proceeds of a
Sale. Net Sales Proceeds shall not include, as determined by the Company in its
sole discretion, any amounts reinvested in one or more Properties, Mortgage
Loans, or Secured Equipment Leases, to repay outstanding indebtedness, or to
establish reserves.

         Offering Expenses. Any and all costs and expenses (other than selling
commissions, the marketing support fee, due diligence expense reimbursements
and, in connection with the 2000 Offering, any Soliciting Dealer Servicing Fees)
incurred by the Company, the Advisor or any Affiliate of either in connection
with the qualification and registration of the Company and the marketing and
distribution of Shares, including, without limitation, the following: legal,
accounting and escrow fees; printing, amending, supplementing, mailing and
distributing costs; filing, registration and qualification fees and taxes;
telegraph and telephone costs; and all advertising and marketing expenses,
including the costs related to investor and broker-dealer sales meetings.

         Operating Expenses. All costs and expenses incurred by the Company, as
determined under generally accepted accounting principles, which in any way are
related to the operation of the Company or to Company business, including (a)
advisory fees, (b) in connection with the 2000 Offering, any Soliciting Dealer
Servicing Fees, (c) the Asset Management Fee, (d) the Performance Fee and (e)
the Subordinated Incentive Fee, but excluding (i) the expenses of raising
capital such as Offering Expenses, legal, audit, accounting, underwriting,
brokerage, listing, registration, and other fees, printing and other such
expenses and tax incurred in connection with the issuance, distribution,
transfer, registration and Listing of the Shares, (ii) interest payments, (iii)
taxes, (iv) non-cash expenditures such as depreciation, amortization and bad
loan reserves, (v) the Advisor's subordinated 10% share of Net Sales Proceeds,
and (vi) Acquisition Fees and Acquisition Expenses, real estate commissions on
the sale of property, and other expenses connected with the acquisition, and
ownership of real estate interests, mortgage loans or other property (such as
the costs of foreclosure, insurance premiums, legal services, maintenance,
repair and improvement of property).

         Performance Fee. The fee payable to the Advisor upon termination of
this Agreement under certain circumstances if certain performance standards have
been met and the Subordinated Incentive Fee has not been paid.

         Permanent Financing. The financing (i) to acquire Assets, (ii) to pay
the Secured Equipment Lease Servicing Fee, (iii) to pay a fee of 4.5% of any
Permanent Financing, excluding amounts to fund Secured Equipment Leases, as
Acquisition Fees, and (iv) to refinance outstanding amounts on the Line of
Credit. Permanent Financing may be in addition to any borrowing under the Line
of Credit.

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         Person. An individual, corporation, partnership, estate, trust
(including a trust qualified under Section 401(a) or 501(c)(17) of the Code), a
portion of a trust permanently set aside for or to be used exclusively for the
purposes described in Section 642(c) of the Code, association, private
foundation within the meaning of Section 509(a) of the Code, joint stock company
or other entity, or any government or any agency or political subdivision
thereof, and also includes a group as that term is used for purposes of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, but does not
include an underwriter that participates in a public offering of Equity Shares
for a period of sixty (60) days following the initial purchase by such
underwriter of such Equity Shares in such public offering, provided that the
foregoing exclusion shall apply only if the ownership of such Equity Shares by
an underwriter would not cause the Company to fail to qualify as a REIT by
reason of being "closely held" within the meaning of Section 856(a) of the Code
or otherwise cause the Company to fail to qualify as a REIT.

         Property or Properties. (i) The real properties, including the
buildings located thereon, or (ii) the real properties only, or (iii) the
buildings only, which are acquired by the Company, either directly or through
joint venture arrangements or other partnerships.

         Prospectus. "Prospectus" means the same as that term as defined in
Section 2(10) of the Securities Act of 1933, including a preliminary prospectus,
an offering circular as described in Rule 253 of the General Rules and
Regulations under the Securities Act of 1933 or, in the case of an intrastate
offering, any document by whatever name known, utilized for the purpose of
offering and selling securities to the public.

         Real Estate Asset Value. The amount actually paid or allocated to the
purchase, development, construction or improvement of a Property, exclusive of
Acquisition Fees and Acquisition Expenses.

         Registration Statement. The Registration Statement (No. 333-[   ]) on
Form S-11 registering the Shares to be sold in the 2004 Offering.

         REIT. A "real estate investment trust" under Sections 856 through 860
of the Code.

         Retirement Facilities. Facilities at which health care services are
provided, including, but not limited to, congregate living, assisted living, and
skilled nursing facilities, continuing care retirement communities and life care
communities, and medical office buildings and walk-in clinics.

         Sale or Sales. (i) Any transaction or series of transactions whereby:
(A) the Company sells, grants, transfers, conveys, or relinquishes its ownership
of any Property or portion thereof, including the lease of any Property
consisting of the building only, and including any event with respect to any
Property which gives rise to a significant amount of insurance proceeds or
condemnation awards; (B) the Company sells, grants, transfers, conveys, or
relinquishes its ownership of all or substantially all of the interest of the
Company in any Joint Venture in which it is a co-venturer or partner; (C) any
Joint Venture in which the Company as a co-venturer or partner sells, grants,
transfers, conveys, or relinquishes its ownership of any Property or portion
thereof, including any event with respect to any Property which gives rise to
insurance claims or

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condemnation awards; or (D) the Company sells, grants, conveys or relinquishes
its interest in any Mortgage Loan or Secured Equipment Lease or portion thereof,
including any event with respect to any Mortgage Loan or Secured Equipment Lease
which gives rise to a significant amount of insurance proceeds or similar
awards, but (ii) not including any transaction or series of transactions
specified in clause (i)(A), (i)(B), or (i)(C) above in which the proceeds of
such transaction or series of transactions are reinvested in one or more
Properties within 180 days thereafter.

         Secured Equipment Leases. The Equipment financing made available by the
Company to operators of Retirement Facilities pursuant to which the Company will
finance, through loans or direct financing leases, the Equipment.

         Secured Equipment Lease Servicing Fee. The fee payable to the Advisor
by the Company out of the proceeds of the Line of Credit or Permanent Financing
for negotiating Secured Equipment Leases and supervising the Secured Equipment
Lease program equal to 2% of the purchase price of the Equipment subject to each
Secured Equipment Lease and paid upon entering into such lease or loan.

         Securities. Any Equity Shares, Excess Shares, (as such terms are
defined in the Company's Articles of Incorporation), any other stock, shares or
other evidences of equity or beneficial or other interests, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in, temporary or interim certificates for, receipts
for, guarantees of, or warrants, options or rights to subscribe to, purchase or
acquire, any of the foregoing.

         Shares. The common shares of the Company.

         Soliciting Dealers. Broker-dealers who are members of the National
Association of Securities Dealers, Inc., or that are exempt from broker-dealer
registration, and who, in either case, have executed participating broker or
other agreements with the Managing Dealer to sell Shares.

         Soliciting Dealer Servicing Fee. An annual fee of .20% of Invested
Capital (calculated using Shares sold only in the 2000 Offering) on December 31
of each year, commencing in 2003, payable to the Managing Dealer, which in turn
may reallow all or a portion of such fee to the Soliciting Dealers whose clients
hold Shares purchased in the 2000 Offering on such date.

         Sponsor. Any Person directly or indirectly instrumental in organizing,
wholly or in part, the Company or any Person who will control, manage or
participate in the management of the Company, and any Affiliate of such Person.
Not included is any Person whose only relationship with the Company is that of
an independent property manager of Company assets, and whose only compensation
is as such. Sponsor does not include independent third parties such as
attorneys, accountants, and underwriters whose only compensation is for
professional services. A Person may also be deemed a Sponsor of the Company by:

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         a.       taking the initiative, directly or indirectly, in founding or
                  organizing the business or enterprise of the Company, either
                  alone or in conjunction with one or more other Persons;

         b.       receiving a material participation in the Company in
                  connection with the founding or organizing of the business of
                  the Company, in consideration of services or property, or both
                  services and property;

         c.       having a substantial number of relationships and contacts with
                  the Company;

         d.       possessing significant rights to control Company properties;

         e.       receiving fees for providing services to the Company which are
                  paid on a basis that is not customary in the industry; or

         f.       providing goods or services to the Company on a basis which
                  was not negotiated at arms length with the Company.

         Stockholders. The registered holders of the Company's Equity Shares.

         Stockholders' 8% Return. As of each date, an aggregate amount equal to
an 8% cumulative, noncompounded, annual return on Invested Capital.

         Subordinated Disposition Fee. The Subordinated Disposition Fee as
defined in Paragraph 9(c).

         Subordinated Incentive Fee. The fee payable to the Advisor under
certain circumstances if the Shares are listed on a national securities exchange
or over-the-counter market. The Subordinated Incentive Fee will not be paid if
Listing occurs on the Pink Sheets or the OTC Bulletin Board.

         Termination Date. The date of termination of the Agreement.

         Total Proceeds. The Gross Proceeds plus loan proceeds from Permanent
Financing and amounts outstanding on the Line of Credit, if any, at the time of
Listing, but excluding loan proceeds used to finance Secured Equipment Leases.

         Total Property Cost. With regard to any Company Property, an amount
equal to the sum of the Real Estate Asset Value of such Property plus the
Acquisition Fees paid in connection with such Property.

         2%/25% Guidelines. The requirement pursuant to the guidelines of the
North American Securities Administrators Association, Inc. that, in any 12 month
period, total Operating Expenses not exceed the greater of 2% of the Company's
Average Invested Assets during such 12 month period or 25% of the Company's Net
Income over the same 12 month period.

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         2000 Offering. The 2000 public offering of 15,500,000 Shares that
commenced upon completion of the Initial Offering.

         2002 Offering. The 2002 public offering of 45,000,000 Shares that
commenced upon completion of the 2000 Offering.

         2003 Offering. The 2003 public offering of 175,000,000 Shares that
commenced upon completion of the 2002 Offering.

         2004 Offering. The 2004 public offering of 400,000,000 Shares that the
Company intends to commence upon completion of the 2003 Offering.

         Valuation. An estimate of value of the assets of the Company as
determined by an Independent Expert.

         (2)      APPOINTMENT. The Company hereby appoints the Advisor to serve
as its advisor on the terms and conditions set forth in this Agreement, and the
Advisor hereby accepts such appointment.

         (3)      DUTIES OF THE ADVISOR. The Advisor undertakes to use its best
efforts to present to the Company potential investment opportunities and to
provide a continuing and suitable investment program consistent with the
investment objectives and policies of the Company as determined and adopted from
time to time by the Directors. In performance of this undertaking, subject to
the supervision of the Directors and consistent with the provisions of the
Registration Statement, Articles of Incorporation and Bylaws of the Company, the
Advisor shall, either directly or by engaging an Affiliate:

                  (a)      serve as the Company's investment and financial
                           advisor and provide research and economic and
                           statistical data in connection with the Company's
                           assets and investment policies;

                  (b)      provide the daily management of the Company and
                           perform and supervise the various administrative
                           functions reasonably necessary for the management of
                           the Company;

                  (c)      investigate, select, and, on behalf of the Company,
                           engage and conduct business with such Persons as the
                           Advisor deems necessary to the proper performance of
                           its obligations hereunder, including but not limited
                           to consultants, accountants, correspondents, lenders,
                           technical advisors, attorneys, brokers, underwriters,
                           corporate fiduciaries, escrow agents, depositaries,
                           custodians, agents for collection, insurers,
                           insurance agents, banks, builders, developers,
                           property owners, mortgagors, and any and all agents
                           for any of the foregoing, including Affiliates of the
                           Advisor, and Persons acting in any other capacity
                           deemed by the Advisor necessary or desirable for the
                           performance of any of the services herein, including
                           but

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                           not limited to entering into contracts in the name of
                           the Company with any of the foregoing;

                  (d)      consult with the officers and Directors of the
                           Company and assist the Directors in the formulation
                           and implementation of the Company's financial
                           policies, and, as necessary, furnish the Directors
                           with advice and recommendations with respect to the
                           making of investments consistent with the investment
                           objectives and policies of the Company and in
                           connection with any borrowings proposed to be
                           undertaken by the Company;

                  (e)      subject to the provisions of Paragraphs 3(g) and 4
                           hereof, (i) locate, analyze and select potential
                           investments in Properties and Mortgage Loans and
                           potential lessees of Secured Equipment Leases, (ii)
                           structure and negotiate the terms and conditions of
                           transactions pursuant to which investment in
                           Properties and Mortgage Loans will be made and
                           Secured Equipment Leases will be offered by the
                           Company; (iii) make investments in Properties and
                           Mortgage Loans and enter into Secured Equipment
                           Leases on behalf of the Company in compliance with
                           the investment objectives and policies of the
                           Company; (iv) arrange for financing and refinancing
                           and make other changes in the asset or capital
                           structure of, and dispose of, reinvest the proceeds
                           from the sale of, or otherwise deal with the
                           investments in, Properties, Mortgage Loans and
                           Secured Equipment Leases; and (v) enter into leases
                           and service contracts for Company Property and, to
                           the extent necessary, perform all other operational
                           functions for the maintenance and administration of
                           such Company Property;

                  (f)      provide the Directors with periodic reports regarding
                           prospective investments in Properties and Mortgage
                           Loans and prospective lessees or borrowers of Secured
                           Equipment Leases;

                  (g)      obtain the prior approval of the Directors for any
                           and all investments in Properties; and Mortgage Loans
                           and in connection with the offering of Secured
                           Equipment Leases (the vote of a majority of all
                           Independent Directors must also be obtained with
                           respect to Mortgage Loans and Secured Equipment
                           Leases);

                  (h)      negotiate on behalf of the Company with banks or
                           lenders for loans to be made to the Company and
                           negotiate on behalf of the Company with investment
                           banking firms and broker-dealers or negotiate private
                           sales of Shares and Securities or obtain loans for
                           the Company, but in no event in such a way so that
                           the Advisor shall be acting as broker-dealer or
                           underwriter; and provided, further, that any fees and
                           costs payable to third parties incurred by the
                           Advisor in connection with the foregoing shall be the
                           responsibility of the Company;

                                       12
<PAGE>

                  (i)      obtain reports (which may be prepared by the Advisor
                           or its Affiliates), where appropriate, concerning the
                           value of investments or contemplated investments of
                           the Company;

                  (j)      from time to time, or at any time reasonably
                           requested by the Directors, make reports to the
                           Directors of its performance of services to the
                           Company under this Agreement;

                  (k)      provide the Company with all necessary cash
                           management services;

                  (l)      do all things necessary to assure its ability to
                           render the services described in this Agreement;

                  (m)      deliver to or maintain on behalf of the Company
                           copies of all appraisals obtained in connection with
                           the investments in Properties and Mortgage Loans;

                  (n)      notify the Board of all proposed material
                           transactions before they are completed; and

                  (o)      administer the Secured Equipment Lease program on
                           behalf of the Company.

         (4)      AUTHORITY OF ADVISOR.

                  (a)      Pursuant to the terms of this Agreement (including
the restrictions included in this Paragraph 4 and in Paragraph 7), and subject
to the continuing and exclusive authority of the Directors over the management
of the Company, the Directors hereby delegate to the Advisor the authority to
(1) locate, analyze and select investment opportunities, (2) structure the terms
and conditions of transactions pursuant to which investments will be made or
acquired for the Company, (3) acquire Properties, make Mortgage Loans and offer
Secured Equipment Leases in compliance with the investment objectives and
policies of the Company, (4) arrange for financing or refinancing with respect
to Properties, Mortgage Loans and Secured Equipment Leases, (5) enter into
leases and service contracts for the Company's Property, and perform other
property management services, (6) oversee non-affiliated property managers and
other non-affiliated Persons who perform services for the Company; and (7)
undertake accounting and other record-keeping functions at the Property level.

                  (b)      Notwithstanding the foregoing, any investment in
Properties or Mortgage Loans; or extension of a Secured Equipment Lease,
(whether directly or indirectly), including any acquisition of a Property by the
Company (as well as any financing acquired by the Company in connection with
such acquisition), will require the prior approval of the Directors (including a
majority of the Independent Directors with respect to investments in Mortgage
Loans and Secured Equipment Leases).

                                       13
<PAGE>

                  (c)      If a transaction requires approval by the Independent
Directors, the Advisor will deliver to the Independent Directors all documents
required by them to properly evaluate the proposed investment in the Property,
Mortgage Loan or Secured Equipment Lease.

         The prior approval of a majority of the Independent Directors and a
majority of the Directors not otherwise interested in the transaction will be
required for each transaction with the Advisor or its Affiliates.

         The Directors may, at any time upon the giving of notice to the
Advisor, modify or revoke the authority set forth in this Paragraph 4. If and to
the extent the Directors so modify or revoke the authority contained herein, the
Advisor shall henceforth submit to the Directors for prior approval such
proposed transactions involving investments as thereafter require prior
approval, provided, however, that such modification or revocation shall be
effective upon receipt by the Advisor and shall not be applicable to investment
transactions to which the Advisor has committed the Company prior to the date of
receipt by the Advisor of such notification.

         (5)      BANK ACCOUNTS. The Advisor may establish and maintain one or
more bank accounts in its own name for the account of the Company or in the name
of the Company and may collect and deposit into any such account or accounts,
and disburse from any such account or accounts, any money on behalf of the
Company, under such terms and conditions as the Directors may approve, provided
that no funds shall be commingled with the funds of the Advisor; and the Advisor
shall from time to time render appropriate accountings of such collections and
payments to the Directors and to the auditors of the Company.

         (6)      RECORDS; ACCESS. The Advisor shall maintain appropriate
records of all its activities hereunder and make such records available for
inspection by the Directors and by counsel, auditors and authorized agents of
the Company, at any time or from time to time during normal business hours. The
Advisor shall at all reasonable times have access to the books and records of
the Company.

         (7)      LIMITATIONS ON ACTIVITIES. Anything else in this Agreement to
the contrary notwithstanding, the Advisor shall refrain from taking any action
which, in its sole judgment made in good faith, would (a) adversely affect the
status of the Company as a REIT, (b) subject the Company to regulation under the
Investment Company Act of 1940, or (c) violate any law, rule, regulation or
statement of policy of any governmental body or agency having jurisdiction over
the Company, its Equity Shares or its Securities, or otherwise not be permitted
by the Articles of Incorporation or Bylaws of the Company, except if such action
shall be ordered by the Directors, in which case the Advisor shall notify
promptly the Directors of the Advisor's judgment of the potential impact of such
action and shall refrain from taking such action until it receives further
clarification or instructions from the Directors. In such event the Advisor
shall have no liability for acting in accordance with the specific instructions
of the Directors so given. Notwithstanding the foregoing, the Advisor, its
directors, officers, employees and stockholders, and stockholders, directors and
officers of the Advisor's Affiliates shall not be liable to the Company or to
the Directors or Stockholders for any act or omission by the Advisor, its
directors, officers or employees, or stockholders, directors or officers of the
Advisor's Affiliates except as provided in Paragraphs 19 and 20 of this
Agreement.

                                       14
<PAGE>

         (8)      RELATIONSHIP WITH DIRECTORS. Directors, officers and employees
of the Advisor or an Affiliate of the Advisor or any corporate parents of an
Affiliate, or directors, officers or stockholders of any director, officer or
corporate parent of an Affiliate may serve as a Director and as officers of the
Company, except that no director, officer or employee of the Advisor or its
Affiliates who also is a Director or officer of the Company shall receive any
compensation from the Company for serving as a Director or officer of the
Company other than reasonable reimbursement for travel and related expenses
incurred in attending meetings of the Directors of the Company.

         (9)      FEES.

                  (a)      Asset Management Fee. The Company shall pay to the
Advisor as compensation for the advisory services rendered to the Company under
Paragraph 3 above a monthly fee in an amount equal to one-twelfth of .60% of the
Company's Real Estate Asset Value and the outstanding principal amount of the
Mortgage Loans (the "Asset Management Fee"), as of the end of the preceding
month. Specifically, Real Estate Asset Value equals the amount invested in the
Properties wholly owned by the Company, determined on the basis of cost, plus,
in the case of Properties owned by any Joint Venture or partnership in which the
Company is a co-venturer or partner, the portion of the cost of such Properties
paid by the Company, exclusive of Acquisition Fees and Acquisition Expenses. The
Asset Management Fee shall be payable monthly on the last day of such month, or
the first business day following the last day of such month. The Asset
Management Fee, which will not exceed fees which are competitive for similar
services in the same geographic area, may or may not be taken, in whole or in
part as to any year, in the sole discretion of the Advisor. All or any portion
of the Asset Management Fee not taken as to any fiscal year shall be deferred
without interest and may be taken in such other fiscal year as the Advisor shall
determine.

                  (b)      Acquisition Fees. The Company shall pay the Advisor a
fee in the amount of 4.5% of Total Proceeds as Acquisition Fees. Acquisition
Fees shall be reduced to the extent that, and, if necessary to limit, the total
compensation paid to all persons involved in the acquisition of any Property to
the amount customarily charged in arm's-length transactions by other persons or
entities rendering similar services as an ongoing public activity in the same
geographical location and for comparable types of Properties and to the extent
that other acquisition fees, finder's fees, real estate commissions, or other
similar fees or commissions are paid by any person in connection with the
transaction. The total of all Acquisition Fees and any Acquisition Expenses
shall be limited in accordance with the Articles of Incorporation.

                  (c)      Subordinated Disposition Fee. If the Advisor or an
Affiliate provides a substantial amount of the services (as determined by a
majority of the Independent Directors) in connection with the Sale of one or
more Properties, the Advisor or an Affiliate shall receive a Subordinated
Disposition Fee equal to the lesser of (i) one-half of a Competitive Real Estate
Commission or (ii) 3% of the sales price of such Property or Properties. The
Subordinated Disposition Fee will be paid only if Stockholders have received
total Distributions in an amount equal to the sum of their aggregate Invested
Capital and their aggregate Stockholders' 8% Return. To the extent that
Subordinated Disposition Fees are not paid by the Company on a current basis due
to the foregoing limitation, the unpaid fees will be accrued and paid at such

                                       15
<PAGE>

time as the subordination conditions have been satisfied. The Subordinated
Disposition Fee may be paid in addition to real estate commissions paid to
non-Affiliates, provided that the total real estate commissions paid to all
Persons by the Company (including the Subordinated Disposition Fee) shall not
exceed an amount equal to the lesser of (i) 6% of the Contract Sales Price of a
Property or (ii) the Competitive Real Estate Commission. In the event this
Agreement is terminated prior to such time as the Stockholders have received
total Distributions in an amount equal to 100% of Invested Capital plus an
amount sufficient to pay the Stockholders' 8% Return through the Termination
Date, an appraisal of the Properties then owned by the Company shall be made and
the Subordinated Disposition Fee on Properties previously sold will be deemed
earned if the Appraised Value of the Properties then owned by the Company plus
total Distributions received prior to the Termination Date equals 100% of
Invested Capital plus an amount sufficient to pay the Stockholders' 8% Return
through the Termination Date. Upon Listing, if the Advisor has accrued but not
been paid such Subordinated Disposition Fee, then for purposes of determining
whether the subordination conditions have been satisfied, Stockholders will be
deemed to have received a Distribution in the amount equal to the product of the
total number of Shares outstanding and the average closing price of the Shares
over a period, beginning 180 days after Listing, of 30 days during which the
Shares are traded.

         (d)      Subordinated Share of Net Sales Proceeds. The Subordinated
Share of Net Sales Proceeds shall be payable to the Advisor in an amount equal
to 10% of Net Sales Proceeds from Sales of assets of the Company after the
Stockholders have received Distributions equal to the sum of the Stockholders'
8% Return and 100% of Invested Capital. Following Listing, no Subordinated Share
of Net Sales Proceeds will be paid to the Advisor.

         (e)      Subordinated Incentive Fee. Upon Listing (other than on the
Pink Sheets or the OTC Bulletin Board), the Advisor shall be paid the
Subordinated Incentive Fee in an amount equal to 10% of the amount by which (i)
the market value of the Company, measured by taking the average closing price or
average of bid and asked price, as the case may be, over a period of 30 days
during which the Shares are traded, with such period beginning 180 days after
Listing (the "Market Value"), plus the total Distributions paid to Stockholders
from the Company's inception until the date of Listing, exceeds (ii) the sum of
(A) 100% of Invested Capital and (B) the total Distributions required to be paid
to the Stockholders in order to pay the Stockholders' 8% Return from inception
through the date the Market Value is determined. The Company shall have the
option to pay such fee in the form of cash, Securities, a promissory note or any
combination of the foregoing. The Subordinated Incentive Fee will be reduced by
the amount of any prior payment to the Advisor of a deferred, subordinated share
of Net Sales Proceeds from Sales of assets of the Company.

         (f)      Secured Equipment Lease Servicing Fee. The Company shall pay
to the Advisor out of the Proceeds of the Line of Credit or Permanent Financing
as compensation for negotiating its respective Secured Equipment Leases and
supervising the Secured Equipment Lease program a fee equal to 2% of the
purchase price of the Equipment subject to each Secured Equipment Lease upon
entering into such lease or loan.

                                       16
<PAGE>

         (g)      Loans from Affiliates. If any loans are made to the Company by
an Affiliate of the Advisor, the maximum amount of interest that may be charged
by such Affiliate shall be the lesser of (i) 1% above the prime rate of interest
charged from time to time by The Bank of New York and (ii) the rate that would
be charged to the Company by unrelated lending institutions on comparable loans
for the same purpose. The terms of any such loans shall be no less favorable
than the terms available between non-Affiliated Persons for similar commercial
loans.

         (h)      Changes to Fee Structure. In the event of Listing, the Company
and the Advisor shall negotiate in good faith to establish a fee structure
appropriate for a perpetual-life entity. A majority of the Independent Directors
must approve the new fee structure negotiated with the Advisor. In negotiating a
new fee structure, the Independent Directors shall consider all of the factors
they deem relevant, including, but not limited to: (i) the amount of the
advisory fee in relation to the asset value, composition and profitability of
the Company's portfolio; (ii) the success of the Advisor in generating
opportunities that meet the investment objectives of the Company; (iii) the
rates charged to other REITs and to investors other than REITs by advisors
performing the same or similar services; (iv) additional revenues realized by
the Advisor and its Affiliates through their relationship with the Company,
including loan administration, underwriting or broker commissions, servicing,
engineering, inspection and other fees, whether paid by the Company or by others
with whom the Company does business; (v) the quality and extent of service and
advice furnished by the Advisor; (vi) the performance of the investment
portfolio of the Company, including income, conversion or appreciation of
capital, and number and frequency of problem investments; and (vii) the quality
of the Property, Mortgage Loan and Secured Equipment Lease portfolio of the
Company in relationship to the investments generated by the Advisor for its own
account. The new fee structure can be no more favorable to the Advisor than the
current fee structure.

         (10)     EXPENSES.

                  (a)      In addition to the compensation paid to the Advisor
pursuant to Paragraph 9 hereof, the Company shall pay directly or reimburse the
Advisor for all of the expenses paid or incurred by the Advisor in connection
with the services it provides to the Company pursuant to this Agreement,
including, but not limited to:

                        (i)      the Company's Offering Expenses;

                        (ii)     Acquisition Expenses incurred in connection
with the selection and acquisition of Properties or the making of Mortgage
Loans, for goods and services provided by the Advisor at the lesser of the
actual cost or 90% of the competitive rate charged by unaffiliated persons
providing similar goods and services in the same geographic location;

                        (iii)    the actual cost of goods and materials used
by the Company and obtained from entities not affiliated with the Advisor, other
than Acquisition Expenses, including brokerage fees paid in connection with the
purchase and sale of securities;

                        (iv)     interest and other costs for borrowed money,
including discounts, points and other similar fees;

                                       17
<PAGE>

                        (v)      taxes and assessments on income or Property
and taxes as an expense of doing business;

                        (vi)     costs associated with insurance required in
connection with the business of the Company or by the Directors;

                        (vii)    expenses of managing and operating
Properties owned by the Company, whether payable to an Affiliate of the Company
or a non-affiliated Person;

                        (viii)   all expenses in connection with payments to
the Directors and meetings of the Directors and Stockholders;

                        (ix)     expenses associated with Listing or with the
issuance and distribution of Shares and Securities, such as selling commissions
and fees, advertising expenses, taxes, legal and accounting fees, Listing and
registration fees, and other Offering Expenses;

                        (x)      expenses connected with payments of
Distributions in cash or otherwise made or caused to be made by the Directors to
the Stockholders;

                        (xi)     expenses of organizing, revising, amending,
converting, modifying, or terminating the Company or the Articles of
Incorporation;

                        (xii)    expenses of maintaining communications with
Stockholders, including the cost of preparation, printing, and mailing annual
reports and other Stockholder reports, proxy statements and other reports
required by governmental entities;

                        (xiii)   expenses related to negotiating and servicing
Mortgage Loans and Secured Equipment Leases;

                        (xiv)    expenses related to negotiating and servicing
Secured Equipment Leases and administering the Secured Equipment Lease program;

                        (xv)     administrative service expenses (including
personnel costs; provided, however, that no reimbursement shall be made for
costs of personnel to the extent that such personnel perform services in
transactions for which the Advisor receives a separate fee at the lesser of
actual cost or 90% of the competitive rate charged by unaffiliated persons
providing similar goods and services in the same geographic location); and

                        (xvi)    audit, accounting and legal fees.

                  (b)      Expenses incurred by the Advisor on behalf of the
Company and payable pursuant to this Paragraph 10 shall be reimbursed no less
than monthly to the Advisor. The Advisor shall prepare a statement documenting
the expenses of the Company during each quarter, and shall deliver such
statement to the Company within 45 days after the end of each quarter.

                                       18
<PAGE>

         (11)     OTHER SERVICES. Should the Directors request that the Advisor
or any director, officer or employee thereof render services for the Company
other than set forth in Paragraph 3, such services shall be separately
compensated at such rates and in such amounts as are agreed by the Advisor and
the Independent Directors of the Company, subject to the limitations contained
in the Articles of Incorporation, and shall not be deemed to be services
pursuant to the terms of this Agreement.

         (12)     REIMBURSEMENT TO THE ADVISOR. The Company shall not reimburse
the Advisor at the end of any fiscal quarter for Operating Expenses that, in the
four consecutive fiscal quarters then ended (the "Expense Year") exceed the
greater of 2% of Average Invested Assets or 25% of Net Income (the "2%/25%
Guidelines") for such year. Within 60 days after the end of any fiscal quarter
of the Company for which total Operating Expenses for the Expense Year exceed
the 2%/25% Guidelines, the Advisor shall reimburse the Company the amount by
which the total Operating Expenses paid or incurred by the Company exceed the
2%/25% Guidelines. The Company will not reimburse the Advisor or its Affiliates
for services for which the Advisor or its Affiliates are entitled to
compensation in the form of a separate fee. All figures used in the foregoing
computation shall be determined in accordance with generally accepted accounting
principles applied on a consistent basis.

         (13)     OTHER ACTIVITIES OF THE ADVISOR. Nothing herein contained
shall prevent the Advisor from engaging in other activities, including, without
limitation, the rendering of advice to other Persons (including other REITs) and
the management of other programs advised, sponsored or organized by the Advisor
or its Affiliates; nor shall this Agreement limit or restrict the right of any
director, officer, employee, or stockholder of the Advisor or its Affiliates to
engage in any other business or to render services of any kind to any other
partnership, corporation, firm, individual, trust or association. The Advisor
may, with respect to any investment in which the Company is a participant, also
render advice and service to each and every other participant therein. The
Advisor shall report to the Directors the existence of any condition or
circumstance, existing or anticipated, of which it has knowledge, which creates
or could create a conflict of interest between the Advisor's obligations to the
Company and its obligations to or its interest in any other partnership,
corporation, firm, individual, trust or association. The Advisor or its
Affiliates shall promptly disclose to the Directors knowledge of such condition
or circumstance. If the Sponsor, Advisor, Director or Affiliates thereof have
sponsored other investment programs with similar investment objectives which
have investment funds available at the same time as the Company, it shall be the
duty of the Directors (including the Independent Directors) to adopt the method
set forth in the Registration Statement or another reasonable method by which
properties are to be allocated to the competing investment entities and to use
their best efforts to apply such method fairly to the Company.

         The Advisor shall be required to use its best efforts to present a
continuing and suitable investment program to the Company which is consistent
with the investment policies and objectives of the Company, but neither the
Advisor nor any Affiliate of the Advisor shall be obligated generally to present
any particular investment opportunity to the Company even if the opportunity is
of the character which, if presented to the Company, could be taken by the
Company. The Advisor or its Affiliates may make such an investment in a property
only after (i)

                                       19
<PAGE>

such investment has been offered to the Company and all public partnerships and
other investment entities affiliated with the Company with funds available for
such investment and (ii) such investment is found to be unsuitable for
investment by the Company, such partnerships and investment entities.

         In the event that the Advisor or its Affiliates is presented with a
potential investment which might be made by the Company and by another
investment entity which the Advisor or its Affiliates advises or manages, the
Advisor and its Affiliates shall consider the investment portfolio of each
entity, cash flow of each entity, the effect of the acquisition on the
diversification of each entity's portfolio, rental payments during any renewal
period, the estimated income tax effects of the purchase on each entity, the
policies of each entity relating to leverage, the funds of each entity available
for investment and the length of time such funds have been available for
investment. In the event that an investment opportunity becomes available which
is suitable for both the Company and a public or private entity which the
Advisor or its Affiliates are Affiliated, then the entity which has had the
longest period of time elapse since it was offered an investment opportunity
will first be offered the investment opportunity.

         (14)     RELATIONSHIP OF ADVISOR AND COMPANY. The Company and the
Advisor are not partners or joint venturers with each other, and nothing in this
Agreement shall be construed to make them such partners or joint venturers or
impose any liability as such on either of them.

         (15)     TERM; TERMINATION OF AGREEMENT. This Agreement shall continue
in force until ______________, 2005, subject to an unlimited number of
successive one-year renewals upon mutual consent of the parties. It is the duty
of the Directors to evaluate the performance of the Advisor annually before
renewing the Agreement, and each such agreement shall have a term of no more
than one year.

         (16)     TERMINATION BY EITHER PARTY. This Agreement may be terminated
upon 60 days written notice without Cause or penalty, by either party (by a
majority of the Independent Directors of the Company or a majority of the Board
of Directors of the Advisor, as the case may be).

         (17)     ASSIGNMENT TO AN AFFILIATE. This Agreement may be assigned by
the Advisor to an Affiliate with the approval of a majority of the Directors
(including a majority of the Independent Directors). The Advisor may assign any
rights to receive fees or other payments under this Agreement without obtaining
the approval of the Directors. This Agreement shall not be assigned by the
Company without the consent of the Advisor, except in the case of an assignment
by the Company to a corporation or other organization which is a successor to
all of the assets, rights and obligations of the Company, in which case such
successor organization shall be bound hereunder and by the terms of said
assignment in the same manner as the Company is bound by this Agreement.

         (18)     PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION. Payments
to the Advisor pursuant to this Paragraph (18) shall be subject to the 2%/25%
Guidelines to the extent applicable.

                                       20
<PAGE>

                  (a)      After the Termination Date, the Advisor shall not be
entitled to compensation for further services hereunder except it shall be
entitled to receive from the Company within 30 days after the effective date of
such termination all unpaid reimbursements of expenses and all earned but unpaid
fees payable to the Advisor prior to termination of this Agreement, exclusive of
disputed items arising out of possible unauthorized transactions.

                  (b)      Upon termination, the Advisor shall be entitled to
payment of the Performance Fee if performance standards satisfactory to a
majority of the Board of Directors, including a majority of the Independent
Directors, when compared to (a) the performance of the Advisor in comparison
with its performance for other entities, and (b) the performance of other
advisors for similar entities, have been met. If Listing has not occurred, the
Performance Fee, if any, shall equal 10% of the amount, if any, by which (i) the
appraised value of the assets of the Company on the Termination Date, less the
amount of all indebtedness secured by such assets, plus the total Distributions
paid to stockholders from the Company's inception through the Termination Date,
exceeds (ii) Invested Capital plus an amount equal to the Stockholders' 8%
Return from inception through the Termination Date. The Advisor shall be
entitled to receive all accrued but unpaid compensation and expense
reimbursements in cash within 30 days of the Termination Date. All other amounts
payable to the Advisor in the event of a termination shall be evidenced by a
promissory note and shall be payable from time to time.

                  (c)      The Performance Fee shall be paid in 12 equal
quarterly installments without interest on the unpaid balance, provided,
however, that no payment will be made in any quarter in which such payment would
jeopardize the Company's REIT status, in which case any such payment or payments
will be delayed until the next quarter in which payment would not jeopardize
REIT status. Notwithstanding the preceding sentence, any amounts which may be
deemed payable at the date the obligation to pay the Performance Fee is incurred
which relate to the appreciation of the Company's assets shall be an amount
which provides compensation to the terminated Advisor only for that portion of
the holding period for the respective assets during which the Advisor provided
services to the Company.

                  (d)      If Listing occurs, the Performance Fee, if any,
payable thereafter will be as negotiated between the Company and the Advisor.
The Advisor shall not be entitled to payment of the Performance Fee in the event
this Agreement is terminated because of failure of the Company and the Advisor
to establish, pursuant to Paragraph 9(h) hereof, a fee structure appropriate for
a perpetual-life entity at such time, if any, as Listing occurs.

                  (e)      The Advisor shall promptly upon termination:

                           (i)      pay over to the Company all money collected
and held for the account of the Company pursuant to this Agreement, after
deducting any accrued compensation and reimbursement for its expenses to which
it is then entitled;

                           (ii)     deliver to the Directors a full accounting,
including a statement showing all payments collected by it and a statement of
all money held by it, covering the period following the date of the last
accounting furnished to the Directors;

                                       21
<PAGE>

                           (iii)    deliver to the Directors all assets,
including Properties, Mortgage Loans, and Secured Equipment Leases, and
documents of the Company then in the custody of the Advisor; and

                           (iv)     cooperate with the Company to provide an
orderly management transition.

         (19)     INDEMNIFICATION BY THE COMPANY. The Company shall indemnify
and hold harmless the Advisor and its Affiliates, including their respective
officers, directors, partners and employees, from all liability, claims, damages
or losses arising in the performance of their duties hereunder, and related
expenses, including reasonable attorneys' fees, to the extent such liability,
claims, damages or losses and related expenses are not fully reimbursed by
insurance, subject to any limitations imposed by the laws of the State of
Maryland or the Articles of Incorporation of the Company. Notwithstanding the
foregoing, the Advisor shall not be entitled to indemnification or be held
harmless pursuant to this Paragraph 19 for any activity for which the Advisor
shall be required to indemnify or hold harmless the Company pursuant to
Paragraph 20. Any indemnification of the Advisor may be made only out of the net
assets of the Company and not from Stockholders.

         (20)     INDEMNIFICATION BY ADVISOR. The Advisor shall indemnify and
hold harmless the Company from contract or other liability, claims, damages,
taxes or losses and related expenses including attorneys' fees, to the extent
that such liability, claims, damages, taxes or losses and related expenses are
not fully reimbursed by insurance and are incurred by reason of the Advisor's
bad faith, fraud, misconduct or negligence, but the Advisor shall not be held
responsible for any action of the Board of Directors in following or declining
to follow any advice or recommendation given by the Advisor.

         (21)     NOTICES. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing unless some other method of
giving such notice, report or other communication is required by the Articles of
Incorporation, the Bylaws, or accepted by the party to whom it is given, and
shall be given by being delivered by hand or by overnight mail or other
overnight delivery service to the addresses set forth herein:

To the Directors and to the Company:             CNL Retirement Properties, Inc.
                                                 CNL Center at City Commons
                                                 450 South Orange Avenue
                                                 Orlando, Florida 32801

To the Advisor:                                  CNL Retirement Corp.
                                                 CNL Center at City Commons
                                                 450 South Orange Avenue
                                                 Orlando, Florida 32801

Either party may at any time give notice in writing to the other party of a
change in its address for the purposes of this Paragraph 21.

                                       22
<PAGE>

         (22)     MODIFICATION. This Agreement shall not be changed, modified,
terminated, or discharged, in whole or in part, except by an instrument in
writing signed by both parties hereto, or their respective successors or
assignees.

         (23)     SEVERABILITY. The provisions of this Agreement are independent
of and severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.

         (24)     CONSTRUCTION. The provisions of this Agreement shall be
interpreted, construed and enforced in all respects in accordance with the laws
of the State of Florida applicable to contracts to be made and performed
entirely in said state.

         (25)     ENTIRE AGREEMENT. This Agreement contains the entire agreement
and understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.

         (26)     INDULGENCES, NOT WAIVERS. Neither the failure nor any delay on
the part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.

         (27)     GENDER. Words used herein regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context requires.

         (28)     TITLES NOT TO AFFECT INTERPRETATION. The titles of paragraphs
and subparagraphs contained in this Agreement are for convenience only, and they
neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.

         (29)     EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.

                                       23
<PAGE>

         (30)     NAME. CNL Retirement Corp. has a proprietary interest in the
name "CNL." Accordingly, and in recognition of this right, if at any time the
Company ceases to retain CNL Retirement Corp. or an Affiliate thereof to perform
the services of Advisor, the Directors of the Company will, promptly after
receipt of written request from CNL Retirement Corp., cease to conduct business
under or use the name "CNL" or any diminutive thereof and the Company shall use
its best efforts to change the name of the Company to a name that does not
contain the name "CNL" or any other word or words that might, in the sole
discretion of the Advisor, be susceptible of indication of some form of
relationship between the Company and the Advisor or any Affiliate thereof.
Consistent with the foregoing, it is specifically recognized that the Advisor or
one or more of its Affiliates has in the past and may in the future organize,
sponsor or otherwise permit to exist other investment vehicles (including
vehicles for investment in real estate) and financial and service organizations
having "CNL" as a part of their name, all without the need for any consent (and
without the right to object thereto) by the Company or its Directors.

         (31)     INITIAL INVESTMENT. The Advisor has contributed to the Company
$200,000 in exchange for 20,000 Equity Shares (the "Initial Investment"). The
Advisor may not sell these shares while the Advisory Agreement is in effect,
although the Advisor may transfer such shares to Affiliates. The restrictions
included above shall not apply to any Equity Shares, other than the Equity
Shares acquired through the Initial Investment, acquired by the Advisor or its
Affiliates. The Advisor shall not vote any Equity Shares it now owns, or
hereafter acquires, in any vote for the removal of Directors or any vote
regarding the approval or termination of any contract with the Advisor or any of
its Affiliates.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.

                                              CNL RETIREMENT PROPERTIES, INC.

                                              By:  __________________________
                                              Name:  James M. Seneff, Jr.
                                              Title: Chairman of the Board and
                                                     Chief Executive Officer CNL

                                              RETIREMENT CORP.

                                              By:  __________________________
                                              Name:  Thomas J. Hutchison III
                                              Title: President

                                       24exv10w52

 

EXHIBIT 10.52

EXECUTION COUNTERPART

CREDIT AGREEMENT

among

TEPPCO PARTNERS, L.P.,

as Borrower,

SUNTRUST BANK,

as Administrative Agent and LC Issuing Bank

and

THE LENDERS PARTY HERETO,

as Lenders

dated as of June 27, 2003

$550,000,000 Revolving Facility

SUNTRUST ROBINSON HUMPHREY CAPITAL MARKETS,

a division of SunTrust Capital Markets, Inc.,

as Sole Lead Arranger

WACHOVIA BANK, NATIONAL ASSOCIATION

and

BANK ONE, NA

as Co-Syndication Agents

BNP PARIBAS

and

KEY BANK, N.A.,

as Co-Documentation Agents

 

 

TABLE OF CONTENTS

	 	 	 	 	Page
	SCHEDULES AND EXHIBITS
	Schedule 2	 	
—
	 	Lenders and Commitments
	Schedule 5	 	
—
	 	Closing Documents
	Schedule 7.2	 	
—
	 	List of Companies and Significant Subsidiaries
	Schedule 7.8	 	
—
	 	Litigation
	Schedule 7.10	 	
—
	 	Environmental Matters
	Schedule 7.11	 	
—
	 	Employee Plan Matters
	Schedule 7.12	 	
—
	 	Existing Debt
	Schedule 7.13	 	
—
	 	Existing Liens
	Schedule 7.15	 	
—
	 	Affiliate Transactions
	Schedule 7.20	 	
—
	 	Restrictions on Distributions
	 	 	
 
	Exhibit A	 	
—
	 	Form of Note
	Exhibit B	 	
—
	 	Form of Guaranty
	Exhibit C-1	 	
—
	 	Form of Borrowing Request
	Exhibit C-2	 	
—
	 	Form of Notice of Conversion
	Exhibit C-3	 	
—
	 	Form of Request for Issuance
	Exhibit C-4	 	
—
	 	Form of Compliance Certificate
	Exhibit D	 	
—
	 	Form of Opinion of Counsel
	Exhibit E	 	
—
	 	Form of Assignment and Assumption Agreement

 

 

CREDIT AGREEMENT

     THIS CREDIT AGREEMENT (this “Agreement”) is entered into as of June 27,
2003, among TEPPCO PARTNERS, L.P., a Delaware limited partnership (the
“Borrower”), the Lenders (defined below), SUNTRUST BANK (“SunTrust”), as the
Administrative Agent for the Lenders and as the issuer of Letters of Credit
(defined below) (the “LC Issuing Bank”), Wachovia Bank, National Association
and Bank One, NA as Co-Syndication Agents (the “Co-Syndication Agents”) and BNP
Paribas and Key Bank, N.A. as Co-Documentation Agents (the “Co-Documentation
Agents”).

     The Borrower has requested that the Lenders extend to the Borrower a
revolving credit facility not to exceed at any time outstanding $550,000,000
(as that amount may be increased, reduced or cancelled pursuant to this
Agreement) to be used by the Borrower as provided in Section 7.1.

     ACCORDINGLY, for adequate and sufficient consideration, the Borrower, the
Lenders, the LC Issuing Bank, the Administrative Agent, the Co-Syndication
Agents, and the Co-Documentation Agents agree as follows:

ARTICLE I

DEFINITIONS AND TERMS

     SECTION 1.1. Definitions.

     As used in the Credit Documents:

		
	 	     “Acquisition” by any Person means any transaction or series of
transactions on or after the date hereof pursuant to which that Person
directly or indirectly, whether in the form of a capital expenditure, an
Investment, a merger, a consolidation or otherwise and whether through a
solicitation of tender of Equity Interests, one or more negotiated block,
market, private or other transactions, or any combination of the
foregoing, purchases (a) all or substantially all of the business or
assets of any other Person or operating division or business unit of any
other Person, or (b) more than 25% of the Equity Interests in any other
Person.
	 
	 	     “Additional Debt” means Funded Debt issued or incurred by any
Company after the date hereof, other than Funded Debt under this
Agreement and Funded Debt (a) that is Permitted Non-Recourse Debt of any
Person used for the purposes described in clause (i) of the definition of
“Permitted Non-Recourse Debt” or (b) the proceeds of which are used to
refinance the Senior Notes, provided that the principal amount of the
refinancing shall not exceed the sum of (i) the principal amount of, and
accrued interest on, the Senior Notes so refinanced and (ii) reasonable
fees and expenses and the premium, if any, incurred in connection with
any such refinancing.
	 
	 	     “Administrative Agent” means, at any time, SunTrust Bank (or its
successor appointed under Section 13.1), acting as administrative agent
for the Lenders under the Credit Documents.

 

 

		
	 	     “Affiliate” of a Person means any other individual or entity that
directly or indirectly controls, is controlled by or is under common
control with that Person. For purposes of this definition, (a)
“control”, “controlled by” and “under common control with” mean
possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of voting
securities or other interests, by contract or otherwise), and (b) the
General Partner and all of the Companies are Affiliates with each other.
	 
	 	     “Agreement” is defined in the preamble to this Agreement.
	 
	 	     “Applicable Margin” means, for any LIBOR Rate Borrowing, (i) on any
date the Consolidated Funded Debt to Pro Forma EBITDA ratio of the
Borrower is less than or equal to 4.5:1.0, the number of basis points set
forth below in the columns identified as Level 1, Level 2, Level 3, Level
4 or Level 5, opposite the LIBOR Rate, and (ii) on any date the
Consolidated Funded Debt to Pro Forma EBITDA ratio of the Borrower is
greater than 4.5:1.0, the number of basis points set forth below in the
columns identified as Level 1, Level 2, Level 3, Level 4 or Level 5,
opposite the Leveraged LIBOR Rate.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEVEL 1	 	LEVEL 2	 	LEVEL 3	 	LEVEL 4	 	 	 	 
	 	 	Reference	 	Reference	 	Reference	 	Reference	 	 	 	 
	 	 	Rating at	 	Rating at	 	Rating at	 	Rating at	 	 	 	 
	 	 	least A- by	 	least BBB+	 	least BBB by	 	least BBB-	 	LEVEL 5
	 	 	S&P and	 	by S&P and	 	S&P and	 	by S&P and	 	Reference
	 	 	A3 by	 	Baa1 by	 	Baa2 by	 	Baa3 by	 	Rating Lower
	Basis for Pricing	 	Moody’s	 	Moody’s	 	Moody’s	 	Moody’s	 	Than Level 4
	
	 	
	 	
	 	
	 	
	 	

	LIBOR Rate
	 	 	50.0	 	 	 	60.0	 	 	 	70.0	 	 	 	100.0	 	 	 	137.5	 
	Leveraged LIBOR Rate
	 	 	62.5	 	 	 	72.5	 	 	 	82.5	 	 	 	112.5	 	 	 	150.0	 

		
	 	The Applicable Margin will be based upon the Level corresponding to the
Reference Rating, and the corresponding Consolidated Funded Debt to Pro
Forma EBITDA ratio, in each case in effect at the time of determination.
For any LIBOR Rate Borrowing, the Applicable Margin will be based upon
the Level corresponding to the Reference Rating, and the corresponding
Consolidated Funded Debt to Pro Forma EBITDA ratio, in each case in
effect on the initial day of the Interest Period for such Borrowing.
	 
	 	     “Assignee” is defined in Section 14.10(d).
	 
	 	     “Assignment” is defined in Section 14.10(d).
	 
	 	     “Base Rate” means, for any day, the greater of (a) the annual
interest rate most recently announced by the Administrative Agent as its
prime lending rate (which may not necessarily represent the lowest or
best rate actually charged to any customer, as the Administrative Agent
may make commercial loans or other loans at interest rates higher or
lower than that prime lending rate) in effect at its principal office in
Atlanta, Georgia,

2

 

	 	 	which rate may automatically increase or decrease without notice to
the Borrower or any other Person, and (b) the sum of the Fed Funds Rate
plus 0.5%.

		
	 	     “Base Rate Borrowing” means a Borrowing bearing interest at the Base
Rate.
	 
	 	     “Borrower” is defined in the preamble to this Agreement.
	 
	 	     “Borrowing” means any amount disbursed to or on behalf of the
Borrower by one or more Lenders under Section 2.1 pursuant to the
procedures specified in Section 2.2, either as an original disbursement
of funds, a renewal, extension or continuation of an amount outstanding.
	 
	 	     “Borrowing Date” is defined in Section 2.2(a).
	 
	 	     “Borrowing Request” means a request pursuant to Section 2.2(a),
substantially in the form of Exhibit C-1.
	 
	 	     “Business Day” means (a) for purposes of any LIBOR Rate Borrowing, a
day on which commercial banks are open for international business in
London, England, and (b) for all other purposes, any day other than
Saturday, Sunday, and any other day on which commercial banks are
authorized by Legal Requirement to be closed in Georgia or New York.
	 
	 	     “Cash Collateral Account” is defined in Section 12.1(c).
	 
	 	     “Capital Lease” means any capital lease or sublease that is required
by GAAP to be capitalized on a balance sheet.
	 
	 	     “Centennial Guaranty” means the guaranty by TE Products of certain
Debt of Centennial Pipeline LLC in a principal amount not to exceed, at
any one time outstanding, $75,000,000.
	 
	 	     “CERCLA” means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. §§9601 et seq.
	 
	 	     “Closing Date” means the date, which must be a Business Day
occurring no later than June 27, 2003, upon which all of the conditions
precedent set forth in Article V to the effectiveness of this Agreement
have been satisfied.
	 
	 	     “Commitment” means, as the context may require and at any time and
for any Lender, either (a) the amount stated beside that Lender’s name
under the column captioned “Commitment” on the most recently amended
Schedule 2 (which amount is subject to reduction and cancellation as
provided in this Agreement), or (b) the commitment of such Lender to make
Extensions of Credit.
	 
	 	     “Commitment Percentage” means, for any Lender and at any time, the
proportion (stated as a percentage) that its Commitment bears to the
total Commitments of all the Lenders.

3

 

		
	 	     “Company” means, at any time, each of the Borrower and any of its
Subsidiaries, and “Companies” means, collectively, the Borrower and all
of its Subsidiaries.
	 
	 	     “Compliance Certificate” means a certificate substantially in the
form of Exhibit C-4 and signed by a Responsible Officer on behalf of the
Borrower.
	 
	 	     “Consolidated EBITDA” means EBITDA of the Borrower and its
consolidated Subsidiaries.
	 
	 	     “Consolidated Funded Debt” means Funded Debt of the Borrower and its
Subsidiaries on a consolidated basis other than (i) Permitted
Non-Recourse Debt of such Subsidiaries and (ii) Debt arising under the
Centennial Guaranty.
	 
	 	     “Consolidated Net Worth” means as at any date total partners’
capital of the Borrower and its consolidated Subsidiaries as at such
date, excluding the effects of any write-ups of assets after December 31,
2002, determined in accordance with GAAP. The effect of any increase or
decrease in total partners’ capital in any period as a result of (i)
items of income or loss not reflected in the determination of net income
but reflected in the determination of comprehensive income, to the extent
required by FASB Statement 130 or (ii) items of assets, liabilities,
income or loss reflected in the determination of the statement of
financial position, to the extent required by FASB Statement 133, each as
in effect from time to time, shall be excluded in determining
Consolidated Net Worth.
	 
	 	     “Constituent Documents” means, for any Person, the documents for its
formation and organization, which, for example, (a) for a corporation are
its corporate charter and bylaws, (b) for a partnership is its
partnership agreement, (c) for a limited liability company are its
certificate of organization and regulations, and (d) for a trust is the
trust agreement or indenture under which it is created.
	 
	 	     “Conversion Notice” means a request pursuant to Section 3.10,
substantially in the form of Exhibit C-2.
	 
	 	     “Credit Documents” means (a) this Agreement, all certificates and
reports delivered by or on behalf of any Company or the General Partner
under this Agreement and all exhibits and schedules to this Agreement,
(b) all agreements, documents and instruments in favor of the
Administrative Agent, the LC Issuing Bank or the Lenders (or the
Administrative Agent on behalf of the LC Issuing Bank or the Lenders)
delivered by or on behalf of any Company or the General Partner in
connection with or under this Agreement or otherwise delivered by or on
behalf of any Company or the General Partner in connection with all or
any part of the Obligations, and (c) all renewals, extensions and
restatements of, and amendments and supplements to, any of the foregoing.
	 
	 	     “Current Financials” means, unless otherwise specified, either (a)
the Borrower’s consolidated Financials for the year ended December 31,
2002, or (b) at any time after annual Financials are first delivered
under Section 8.1, the Borrower’s annual Financials then most recently
delivered to the Lenders under Section 8.1(a), together with the
Borrower’s quarterly Financials then most recently delivered to the
Lenders under Section 8.1(b).

4

 

		
	 	     “Debt” means, for any Person, at any time and without duplication,
the sum of the following obligations of such Person and its consolidated
Subsidiaries: (a) all Funded Debt, (b) all obligations arising under
acceptance facilities or facilities for the discount or sale of accounts
receivable, (c) all direct or contingent obligations in respect of
letters of credit and (d) all guaranties, endorsements and other
contingent obligations in respect of obligations of other Persons or
entities of the nature described in clauses (a) through (c) above.
	 
	 	     “Debtor Laws” means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency,
re-organization, suspension of payments or similar Legal Requirements
affecting creditors’ Rights.
	 
	 	     “Default Percentage” means, for any Lender and at any time, the
proportion (stated as a percentage) that the aggregate principal amount
of Borrowings owed to it bears to the aggregate principal amount of
Borrowings owed all the Lenders.
	 
	 	     “Default Rate” means, for any day, an annual interest rate equal
from day to day to the lesser of (a) the sum of the rate of interest
applicable to Base Rate Borrowings plus 2%, and (b) the Maximum Rate.
	 
	 	     “Diluted Value” means, with respect to any assets of the Borrower,
the Fair Market Value of such assets, and, with respect to any assets of
any other Person, the Fair Market Value of such assets multiplied by the
percentage of the Equity Interests held directly or indirectly by the
Borrower in such Person.
	 
	 	     “Distribution” means, with respect to any Equity Interests issued by
a Person (a) the retirement, redemption, purchase or other acquisition
for value of those Equity Interests, (b) the declaration or payment of
any dividend on or with respect to those Equity Interests, (c) any
Investment by that Person in the holder of any of those Equity Interests,
and (d) any other payment by that Person with respect to those Equity
Interests.
	 
	 	     “EBITDA” means, for any Person and its consolidated Subsidiaries and
for any period, the sum of, without duplication, (i) Net Income of such
Person and its consolidated Subsidiaries (other than any Excluded
Subsidiary of such Person) for such period plus (ii) to the extent
deducted in determining Net Income of such Person and its consolidated
Subsidiaries for such period, Interest Expense, Tax Expense, depreciation
and amortization, in each case, of such Person and its consolidated
Subsidiaries (other than any Excluded Subsidiary of such Person) for such
period.
	 
	 	     “Employee Plan” means any employee pension benefit plan covered by
Title IV of ERISA and established or maintained by any Company or any
ERISA Affiliate (other than a Multiemployer Plan).
	 
	 	     “Environmental Law” means any applicable Legal Requirement that
relates to protection of the environment or to the regulation of any
Hazardous Substances, including CERCLA, the Hazardous Materials
Transportation Act (49 U.S.C. § 1801 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. § 6901 et seq.), the Clean

5

 

		
	 	Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. §
7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et
seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.
§ 136 et seq.), the Emergency Planning and Community Right-to-Know Act
(42 U.S.C. § 11001 et seq.), the Safe Drinking Water Act (42 U.S.C. § 201
and § 300f et seq.), the Rivers and Harbors Act (33 U.S.C. § 401 et
seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), analogous state
and local Legal Requirements, and any analogous future enacted or adopted
Legal Requirement.
	 
	 	     “Environmental Liability” means any liability, loss, fine, penalty,
charge, lien, damage, cost or expense of any kind to the extent that it
results (a) from the violation of any Environmental Law, (b) from the
Release or threatened Release of any Hazardous Substance, or (c) from
actual or threatened damages to natural resources.
	 
	 	     “Environmental Permit” means any permit or license from any Person
defined in clause (a) of the definition of Governmental Authority that is
required under any Environmental Law for the lawful conduct of any
business, process or other activity.
	 
	 	     “Equity Event” means (a) the contribution in cash of capital (x) to
the Borrower by any Person or (y) to any Significant Subsidiary (other
than an Excluded Subsidiary) by any Person other than the Borrower or a
Wholly-Owned Subsidiary of the Borrower, or (b) any issuance of Equity
Interests (x) by the Borrower to any Person or (y) by any Significant
Subsidiary (other than an Excluded Subsidiary) to any Person other than
the Borrower or a Wholly-Owned Subsidiary of the Borrower.
	 
	 	     “Equity Interests” means, (a) with respect to a corporation, shares
of capital stock of such corporation or any other interest convertible or
exchangeable into any such interest, (b) with respect to a limited
liability company, a membership interest in such company, (c) with
respect to a partnership, a partnership interest in such partnership, and
(d) with respect to any other Person, an interest in such Person
analogous to interests described in clauses (a) through (c).
	 
	 	     “ERISA” means the Employee Retirement Income Security Act of 1974.
	 
	 	     “ERISA Affiliate” means any Person that, for purposes of Title IV of
ERISA, is a member of any Company’s controlled group or is under common
control with any Company within the meaning of Section 414 of the IRC.
	 
	 	     “Event of Default” is defined in Article 11.
	 
	 	     “Excluded Subsidiary” means, for any Person (the “first Person”),
any other Person (the “second Person”) in which the first Person owns
Equity Interests and where the second Person (a) has no Funded Debt other
than Permitted Non-Recourse Debt and (b) the sole purpose of which is to
engage in the acquisition, construction, development and/or operation
activities financed or refinanced with such Permitted Non-Recourse Debt.

6

 

		
	 	     “Existing Credit Agreement” means that certain Amended and Restated
Credit Agreement, dated as of March 28, 2002, as amended, by and among
the Borrower, SunTrust Bank, as Administrative Agent and the lenders from
time to time party thereto.
	 
	 	     “Extension of Credit” means (a) the disbursement of the proceeds of
any Borrowing, (b) the issuance of a Letter of Credit or the amendment of
any Letter of Credit having the effect of extending the stated
termination date thereof or increasing the maximum amount available to be
drawn thereunder or (c) the funding of a participation in the unpaid
reimbursement obligation of the Borrower with respect to a payment made
by the LC Issuing Bank under a Letter of Credit (excluding any
reimbursement obligation that has been repaid with the proceeds of any
Borrowing).
	 
	 	     “FASB” means the United States Financial Accounting Standards Board.
	 
	 	     “Facility Fee” means, for any day, a fee payable on the amount of
the Commitment of each Lender on such day, irrespective of usage, payable
at the rate (expressed in basis points per annum) set forth below in the
columns identified as Level 1, Level 2, Level 3, Level 4 or Level 5 based
on the Reference Ratings.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEVEL 1	 	LEVEL 2	 	LEVEL 3	 	LEVEL 4	 	 	 	 
	 	 	Reference	 	Reference	 	Reference	 	Reference	 	 	 	 
	 	 	Rating at	 	Rating at	 	Rating at	 	Rating at	 	 	 	 
	 	 	least A- by	 	least BBB+	 	least BBB by	 	least BBB-	 	LEVEL 5
	 	 	S&P and	 	by S&P and	 	S&P and	 	by S&P and	 	Reference
	 	 	A3 by	 	Baa1 by	 	Baa2 by	 	Baa3 by	 	Rating Lower
	Basis for Pricing	 	Moody’s	 	Moody’s	 	Moody’s	 	Moody’s	 	Than Level 4
	
	 	
	 	
	 	
	 	
	 	

	Facility Fee
	 	 	12.5	 	 	 	15.0	 	 	 	17.5	 	 	 	25.0	 	 	 	37.5	 

		
	 	     The Facility Fee will be based upon the Level corresponding to the
Reference Rating at the time of determination. Any change in the
Facility Fee resulting from a change in the Reference Rating shall be
effective as of the date on which the applicable rating agency announces
the applicable change in rating.
	 
	 	     “Fair Market Value” means, with respect to any Equity Interest or
other property or asset, the price obtainable for such Equity Interest or
other property or asset in an arm’s-length sale between an informed and
willing purchaser under no compulsion to purchase and an informed and
willing seller under no compulsion to sell.
	 
	 	     “Fed Funds Rate” means, for any day, the annual rate (rounded
upwards, if necessary, to the nearest 0.01%) determined (which
determination is conclusive and binding, absent manifest error) by the
Administrative Agent to be equal to (a) the weighted average of the rates
on overnight federal funds transactions with member banks of the Federal
Reserve System arranged by federal funds brokers on that day (or, if such
day is not a Business Day, then on the immediately preceding Business
Day), as published by the Federal Reserve Bank of New York on the next
Business Day, or (b) if

7

 

		
	 	those rates are not published for any such day, the average of the
quotations at approximately 10:00 a.m. received by the Administrative
Agent from three federal funds brokers of recognized standing selected by
the Administrative Agent in its sole discretion.
	 
	 	     “Fee Letter” shall mean that certain fee letter, dated as of the
date hereof, executed by SunTrust Capital Markets, Inc. and SunTrust Bank
and accepted by Borrower.
	 
	 	     “Financials” of a Person means balance sheets, profit and loss
statements, reconciliations of capital and surplus and statements of cash
flow of such Person prepared (a) according to GAAP (subject to year-end
audit adjustments with respect to interim Financials) and (b) except as
stated in Section 1.4, in comparative form to prior year-end figures or
corresponding periods of the preceding fiscal year or other relevant
period, as applicable.
	 
	 	     “Funded Debt” means, for any Person at any time, and without
duplication, the sum of the following for such Person and its
consolidated Subsidiaries: (a) the unpaid principal amount or component
of all obligations for borrowed money, (b) the unpaid principal amount or
component of all obligations evidenced by bonds, debentures, notes or
similar instruments, (c) the unpaid principal amount or component of all
obligations to pay the deferred purchase price of property or services
except trade accounts payable arising in the ordinary course of business,
(d) in respect of all obligations that are secured (or for which the
holder of any such obligation has an existing Right, contingent or
otherwise, to be so secured) by any Lien on property owned or acquired by
that Person, the lesser of (x) the unpaid amount of all of those
obligations from time to time outstanding and (y) the Fair Market Value
of the property securing all of those obligations, liabilities secured
(or for which the holder of such obligations has an existing Right,
contingent or otherwise, to be so secured) by any Lien existing on
property owned or acquired by that Person, (e) all Capital Lease
obligations, (f) the unpaid principal amount or component of all
obligations under synthetic leases, and (g) the unpaid principal amount
or component of all guaranties, endorsements, and other contingent
obligations in respect of obligations of other Persons or entities of the
nature described in clauses (a) through (f) above.
	 
	 	     “Funding Loss” means any loss, expense or reduction in yield (but
not any Applicable Margin) that any Lender reasonably incurs because (i)
the Borrower fails or refuses (for any reason whatsoever other than a
default by the Administrative Agent or the Lender claiming that loss,
expense or reduction in yield) to take any Borrowing or convert a
Borrowing that it has requested, or given notice for, under this
Agreement, or (ii) the Borrower voluntarily or involuntarily prepays or
pays any LIBOR Rate Borrowing or converts any LIBOR Rate Borrowing to a
Borrowing of another Type, in each case, other than on the last day of
the applicable Interest Period. The amount of any Funding Loss shall be
determined by the relevant Lender to be the excess, if any, of (A) the
amount of interest that would have accrued on the principal amount of
such Borrowing had such event not occurred, at the LIBOR Rate, for the
period from the date of such event to the last day of the then current
Interest Period (or, in the case of a failure

8

 

		
	 	to borrow, convert or continue, for the period that would have been
the Interest Period for that Borrowing), over (B) the amount of interest
that would accrue on such principal amount for such period at the
interest rate that such Lender would bid (were it to bid), at the
commencement of such period, for dollar deposits of a comparable amount
and period from other banks in the London interbank market.
	 
	 	     “GAAP” means generally accepted accounting principles of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and the FASB that are applicable from time to time.
	 
	 	     “General Partner” means Texas Eastern or any other Person that
serves as the general partner of the Borrower without causing the
occurrence of a Potential Default or an Event of Default under Section
11.7(b).
	 
	 	     “Governmental Authority” means any (a) local, state, territorial,
federal or foreign judicial, executive, regulatory, administrative,
legislative or governmental agency, board, bureau, commission, department
or other instrumentality, (b) private arbitration board or panel or (c)
central bank.
	 
	 	     “Guarantor” means each Person delivering a Guaranty as required by
Article 6.
	 
	 	     “Guaranty” means a guaranty substantially in the form of Exhibit B.
	 
	 	     “Hazardous Substance” means any substance that is designated,
defined, classified or regulated as a hazardous waste, hazardous
material, pollutant, contaminant, explosive, corrosive, flammable,
infectious, carcinogenic, mutagenic, radioactive or toxic or hazardous
substance under any Environmental Law, including, without limitation, any
hazardous substance within the meaning of § 101(14) of CERCLA.
	 
	 	     “Hedging Agreement” means any swap, cap or collar arrangement or any
other derivative product customarily offered by banks or other
institutions to their customers in order to manage the exposure of such
customers to interest rate fluctuations or commodity price fluctuations.
	 
	 	     “Interest Expense” means, for any Person and its consolidated
Subsidiaries and for any period, all interest expense (including all
amortization of debt discount and expenses and reported interest) on all
Funded Debt of such Person and its consolidated Subsidiaries during such
period.
	 
	 	     “Interest Period” is defined in Section 3.9.
	 
	 	     “Investment” means, in respect of any Person, any loan, advance,
extension of credit or capital contribution to that Person, any other
investment in that Person, or any purchase or commitment to purchase any
Equity Interest or Debt issued by that Person or substantially all of the
assets or a division or other business unit of that Person. The term
“Investment”, however, does not include any extension of trade debt in
the ordinary course of business or, as a result of collection efforts,
the receipt of any equity in or property of a Person.

9

 

		
	 	     “IRC” means the Internal Revenue Code of 1986.
	 
	 	     “Jonah Gas” means the Jonah Gas Gathering Company, a Wyoming general
partnership.
	 
	 	     “LC Fee” is defined in Section 4.3.
	 
	 	     “LC Issuing Bank” is defined in the preamble to this Agreement.
	 
	 	     “LC Outstandings” means, on any date of determination, the sum of
the undrawn stated amounts of all Letters of Credit that are outstanding
on such date plus the aggregate principal amount of all unpaid
reimbursement obligations of the Borrower on such date with respect to
payments made by the LC Issuing Bank under Letters of Credit (excluding
reimbursement obligations that have been repaid with the proceeds of any
Borrowing).
	 
	 	     “Legal Requirements” means all applicable statutes, laws, treaties,
ordinances, rules, regulations, orders, writs, injunctions, decrees,
judgments, opinions and interpretations of any Governmental Authority.
	 
	 	     “Lender” means (a) each financial institution (including, without
limitation, SunTrust, in its capacity as a Lender, in respect of its
Commitment) initially named on Schedule 2, (b) each Assignee pursuant to
Section 14.10(d) and (c) each Additional Lender.
	 
	 	     “Letter of Credit” means letters of credit issued by the LC Issuing
Bank pursuant to Section 2.5.
	 
	 	     “LIBOR Rate” means, for a LIBOR Rate Borrowing and its Interest
Period, the quotient of (a) the annual interest rate for deposits in
United States dollars of amounts equal or comparable to the principal
amount of that LIBOR Rate Borrowing offered for a term comparable to that
Interest Period, which rate appears on the Telerate Page 3750 as of 11:00
a.m. (London, England time) two Business Days before the beginning of
that Interest Period or, if no such offered rates appear on such page,
then the rate used for that Interest Period shall be the arithmetic
average (rounded upwards, if necessary, to the next higher 0.001%) of the
rates offered to the Administrative Agent by not less than two major
banks in New York, New York at approximately 10:00 a.m. (Atlanta, Georgia
time) two Business Days before the beginning of that Interest Period for
deposits in United States dollars in the London interbank market of the
principal amount of that LIBOR Rate Borrowing offered for a term
comparable to that Interest Period, divided by (b) a number equal to 1.00
minus the LIBOR Reserve Percentage. The rate so determined in accordance
herewith shall be rounded upwards to the nearest multiple of 0.001%, and
the term “Telerate Page 3750” means the display designated as “Page 3750”
on the Dow Jones Markets Service, Inc. (or such other page as may replace
Page 3750 on that service or another service as may be nominated by the
British Bankers’ Association as the information vendor for the purpose of
displaying British Bankers’ Association Interest Settlement Rates for
United States dollars).

10

 

		
	 	     “LIBOR Rate Borrowing” means a Borrowing bearing interest at the sum
of the LIBOR Rate plus the Applicable Margin.
	 
	 	     “LIBOR Reserve Percentage” means, for any Interest Period with
respect to a LIBOR Rate Borrowing, the reserve percentage applicable to
that Interest Period (or, if more than one such percentage shall be so
applicable, then the daily average of such percentages for those days in
that Interest Period during which any such percentage shall be
applicable) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) for the Lenders with
respect to liabilities or assets consisting of or including “eurocurrency
liabilities” (as defined in Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time) having a term
equal to that Interest Period.
	 
	 	     “Lien” means any lien, mortgage, security interest, pledge,
assignment, charge, title retention agreement or encumbrance of any kind
and any other arrangement for a creditor’s claim to be satisfied from
assets or proceeds prior to the claims of other creditors or the owners
(other than title of the lessor under an operating lease).
	 
	 	     “Litigation” means any action by or before any Governmental
Authority.
	 
	 	     “Margin Regulations” means Regulations T, U and X of the Board of
Governors of the Federal Reserve System, as amended.
	 
	 	     “Material Adverse Event” means any circumstance or event that,
individually or collectively, is, or is reasonably expected to result in,
any (a) material impairment of (i) the ability of the Borrower or any
other Company to perform any of their respective payment or other
material obligations under any Credit Document, or (ii) the ability of
the Administrative Agent, the LC Issuing Bank or any Lender to enforce
any of those obligations or any of their respective Rights under the
Credit Documents (other than as a result of its own act or omission), (b)
material and adverse effect on the financial condition of the Borrower
and its Subsidiaries, taken as a whole, as represented to the Lenders in
the Current Financials most recently delivered before the date of this
Agreement, or (c) Event of Default or Potential Default.
	 
	 	     “Maximum Amount” and “Maximum Rate” respectively mean, for any
Lender, the maximum non-usurious amount and the maximum non-usurious rate
of interest that, under applicable Legal Requirement, that such Lender is
permitted to contract for, charge, take, reserve or receive on the
Obligations.
	 
	 	     “Midstream” means TEPPCO Midstream Companies, L.P., a Delaware
limited partnership.
	 
	 	     “Moody’s” means Moody’s Investors Service, Inc. or any successor
thereto.
	 
	 	     “Multiemployer Plan” means a multiemployer plan as defined in
Sections 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the IRC to
which any Company or any

11

 

		
	 	ERISA Affiliate is making, or has made, or is accruing, or has
accrued, an obligation to make contributions.
	 
	 	     “Net Cash Proceeds” means, with respect to any Equity Event (for
purposes of this definition, a “transaction”), the aggregate amount of
cash received, as the case may be, by (x) the Borrower or (y) any
Significant Subsidiary and legally available to be distributed to the
Borrower in the form of dividends or distributions in connection with
such transaction after, in each case, deducting therefrom customary
transaction costs that are paid or reserved for payment (A) to a Person
that is not an Affiliate of the Borrower or (B) to the Borrower or an
Affiliate of the Borrower to reimburse such Person for payments made by
such Person to another Person that is not the Borrower or an Affiliate of
the Borrower in respect of such transaction costs.
	 
	 	     “Net Income” means, for any Person and its consolidated Subsidiaries
and for any period, the profit or loss of such Person and its
consolidated Subsidiaries for such period after deducting all operating
expenses, provision for Taxes and reserves (including reserves for
deferred income Taxes), and all other deductions calculated, in each
case, in accordance with GAAP, but excluding (a) extraordinary items, and
(b) the profit or loss of any Subsidiary accrued before the date that (i)
it becomes a Subsidiary of such Person, (ii) it is merged with such
Person or any of its Subsidiaries, or (iii) its assets are acquired by
such Person of any of its Subsidiaries.
	 
	 	     “Non-Recourse” means, with respect to any Person as applied to any
Funded Debt (or portion thereof), (a) that such Person is not directly or
indirectly liable to make any payments with respect to such Funded Debt
(or portion thereof), other than payments deemed made by or on behalf of
such Person as a result of any realization on assets that were pledged to
secure such Funded Debt and that consist of such Person’s Equity
Interests in the Person primarily incurring such Funded Debt (or any
shareholder, partner, member or participant of such Person), (b) that
such Funded Debt (or portion thereof) does not constitute Funded Debt of
such Person other than to the extent of recourse to such Person’s Equity
Interests in the Person primarily incurring such Debt (or any
shareholder, partner, member or participant of such Person) and that (c)
such Funded Debt (or portion thereof) is not secured by a Lien on any
asset of such Person other than such Person’s Equity Interests in the
Person primarily incurring such Funded Debt or any shareholder, partner,
member, participant or other owner, directly or indirectly, of such
Person or the Person the obligations of which were guaranteed.
	 
	 	     “Note” means one of the promissory notes substantially in the form
of Exhibit A.
	 
	 	     “Obligations” means all present and future (a) Debts, liabilities
and obligations of the Borrower to the Administrative Agent, the LC
Issuing Bank or any Lender that arise under any Credit Document, whether
for principal, interest, fees, costs, attorneys’ fees or otherwise and
(b) renewals, extensions and modifications of any of the foregoing.
	 
	 	     “OSHA” means the Occupational Safety and Health Act of 1970, 29
U.S.C. § 651 et seq.

12

 

		
	 	     “Outstanding Credits” means, on any date of determination, an amount
equal to the sum of (a) the aggregate principal amount of all Borrowings
outstanding on such date plus (b) the LC Outstandings on such date.
	 
	 	     “Participant” is defined in Section 14.10(c).
	 
	 	     “PBGC” means the Pension Benefit Guaranty Corporation.
	 
	 	     “Permitted Debt” is defined in Section 9.1.
	 
	 	     “Permitted Liens” is defined in Section 9.3.
	 
	 	     “Permitted Non-Recourse Debt” means Funded Debt of any Person (other
than the Borrower) that is Non-Recourse to any Company other than such
Person and is used by such Person to acquire, construct, develop and/or
operate assets not owned by any Company as of the date hereof.
	 
	 	     “Person” means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company or other entity, or a
Governmental Authority.
	 
	 	     “Potential Default” means any event, occurrence or circumstance, the
existence of which upon any required notice, time lapse, or both, would
become an Event of Default.
	 
	 	     “Predecessor” means any Person for whose obligations and liabilities
any Company is reasonably expected to be liable as the result of any
merger, de facto merger, stock purchase, asset purchase or divestiture,
combination, joint venture, investment, reclassification or other similar
business transaction.
	 
	 	     “Pro Forma EBITDA” means, for any fiscal period of the Borrower, the
sum of Consolidated EBITDA for such period plus, to the extent not
already reflected in Consolidated EBITDA for such period, EBITDA for such
period of any other Person or all or substantially all of the business or
assets of any other Person or operating division or business unit of any
other Person acquired in an Acquisition during such period.
	 
	 	     “Real Property” means any land, buildings, fixtures and other
improvements to land now or in the future directly or indirectly owned by
any Company, leased to or otherwise operated by any Company or subleased
by any Company to any other Person.
	 
	 	     “Reference Rating” means (i) the ratings assigned by S&P and Moody’s
to the senior unsecured non-credit enhanced long-term debt of the
Borrower, or (ii) if S&P and Moody’s have not assigned ratings to the
senior unsecured non-credit enhanced long-term debt of the Borrower, the
ratings that are one level below the ratings assigned by S&P and Moody’s
to the senior unsecured non-credit enhanced long-term debt of TE
Products. For purposes of the foregoing, (x) if the ratings assigned by
S&P and Moody’s are not comparable (i.e., a “split rating”), the higher
of such two ratings shall control, unless the split in ratings is two or
more ratings, in which case the level above the lower

13

 

		
	 	of the two ratings shall control, and (y) for purposes of illustration an S&P
rating of BBB will be considered to be “one level below” an S&P rating of
BBB+.
	 
	 	     “Release” means any “release” as defined under any Environmental
Law.
	 
	 	     “Representatives” means officers, directors, employees, accountants,
attorneys and agents.
	 
	 	     “Request for Issuance” shall mean a request made pursuant to Section
2.5 in the form of Exhibit C-3.
	 
	 	     “Required Lenders” means any combination of the Lenders holding
(directly or indirectly) more than (a) 50% of the total Commitments, if
there are no Borrowings outstanding, (b) 50% of the sum of (i) the total
unused Commitments plus (ii) the aggregate principal amount of all
Outstanding Credits, if there are any Borrowings or Letters of Credit
outstanding and the maturity of the Obligations has not been accelerated
and the Commitments have not been terminated under Section 12.1(a) or
(b), as the case may be, and (c) 50% of the aggregate principal amount of
all Outstanding Credits if there are any Borrowings or Letters of Credit
outstanding and the maturity of the Obligations has been accelerated or
the Commitments have been terminated under Section 12.1(a) or (b), as the
case may be.
	 
	 	     “Responsible Officer” means the chairman, president, vice president,
chief executive officer, chief financial officer, treasurer, managing
member or manager of the General Partner or Person of comparable
authority and responsibility.
	 
	 	     “Rights” means rights, remedies, powers, privileges and benefits.
	 
	 	     “S&P” means Standard & Poor’s Ratings Services, a division of
McGraw-Hill Companies, Inc., or any successor thereto.
	 
	 	     “Senior Notes” means (i) the 6.45% Senior Notes Due 2008 in the
original aggregate principal amount of $180,000,000 and the 7.51% Senior
Notes Due 2028 in the original aggregate principal amount of
$210,000,000, in each case issued by TE Products under the Indenture
dated as of January 27, 1998, between TE Products and The Bank of New
York, Trustee, (ii) the 7.625% Senior Notes Due 2012 in the original
aggregate principal amount of $500,000,000 issued by the Borrower under
the Indenture dated as of February 20, 2002 (the “TPP Indenture”), among
the Borrower, as issuer, TE Products, TCTM, Midstream and Jonah Gas, as
subsidiary guarantors, and Wachovia Bank, National Association (formerly
known as First Union National Bank), as Trustee, as amended by the First
Supplemental Indenture thereto dated as of even date therewith among such
parties and the Second Supplemental Indenture thereto, dated as of June
29, 2002, among such parties and Val Verde, and (iii) the 6.125% Senior
Notes Due 2013 in the original aggregate principal amount of $200,000,000
issued by the Borrower under the TPP Indenture, as amended by the Third
Supplemental Indenture thereto among the Borrower, as issuer, TE
Products, TCTM, Midstream, Jonah Gas and Val Verde as subsidiary
guarantors, and Wachovia Bank, National Association, as Trustee, dated as
of January 30, 2003.

14

 

		
	 	     “Service Agreement” means the Service and Transportation Agreement,
dated February 9, 1999, among TE Products, BASF Fina Petrochemicals
Limited Partnership, BASF Corporation and FINA Oil and Chemical Company,
as amended and in effect from time to time.
	 
	 	     “Significant Subsidiary” means (a) each of TCTM, TE Products,
Midstream, Jonah Gas and Val Verde, (b) each other Subsidiary of the
Borrower solely during the period that it guarantees any Debt of the
Borrower and (c) each other Person acquired by the Borrower or any of its
Subsidiaries after the Closing Date, which, as of such acquisition date,
(i) becomes a Subsidiary of the Borrower and (ii), in respect to the
Borrower and its consolidated Subsidiaries, meets the conditions of a
“significant subsidiary” (as such term is defined in Section 210.1-02(w)
of Regulation S-X), however, substituting, in lieu of the 10% conditions
referred to therein, 20% for each condition specified therein.
	 
	 	     “Solvent” means, as to any Person, that (a) the aggregate fair
market value of its assets exceeds its liabilities, (b) it is able to pay
its debts as they mature, and (c) it does not have unreasonably small
capital to conduct its businesses.
	 
	 	     “Stated Termination Date” means June 30, 2006.
	 
	 	     “Subsidiary” of any Person means any corporation, limited liability
company, general or limited partnership or other entity of which more
than 50% (in number of votes) of the Equity Interests is owned of record
or beneficially, directly or indirectly, by that Person.
	 
	 	     “SunTrust” is defined in the preamble to this Agreement.
	 
	 	     “Taxes” means, for any Person, taxes, assessments or other
governmental charges or levies imposed upon it, its income or any of its
properties, franchises or assets.
	 
	 	     “Tax Expense” means, for any Person and its consolidated
Subsidiaries and for any period, income tax and franchise tax expense of
that Person and its consolidated Subsidiaries accrued during that period.
	 
	 	     “TCTM” means TCTM, L.P., a Delaware limited partnership.
	 
	 	     “TE Products” means TE Products Pipeline Company, Limited
Partnership, a Delaware limited partnership.
	 
	 	     “TEPPCO Crude” means TEPPCO Crude Oil, L.P., a Delaware limited
partnership.
	 
	 	     “TEPPCO Crude Pipeline” means TEPPCO Crude Pipeline, L.P., a
Delaware limited partnership.
	 
	 	     “TEPPCO GP” means TEPPCO GP, Inc., a Delaware corporation.

15

 

		
	 	     “Termination Date” means the earlier of (a) the Stated Termination
Date and (b) the effective date on which the Commitments are fully
canceled or terminated.
	 
	 	     “Texas Eastern” means Texas Eastern Products Pipeline Company, LLC,
a Delaware limited liability company.
	 
	 	     “Type” means any type of Borrowing determined with respect to the
applicable interest option.
	 
	 	     “Val Verde” means Val Verde Gas Gathering Company, L.P., a Delaware
limited partnership.
	 
	 	     “Wholly-Owned Subsidiary” means any Subsidiary of a Person, all of
the issued and outstanding Equity Interests of which are directly or
indirectly owned by such Person, excluding (a) any general partner
interests owned by the General Partner in any such Subsidiary that is a
partnership and (b) any directors’ qualifying shares or similar type of
Equity Interests, as applicable.

     SECTION 1.2. Time References.

     Unless otherwise specified, in the Credit Documents: (a) time references
(e.g., 10:00 a.m.) are to time in Atlanta, Georgia, on the applicable date, and
(b) in calculating a period from one date to another, the word “from” means
“from and including” and the word “to” or “until” means “to but excluding”.

     SECTION 1.3. Other References.

     Unless otherwise specified, in the Credit Documents: (a) where
appropriate, the singular includes the plural and vice versa , and words of any
gender include each other gender, (b) where appropriate, words include their
respective cognate expressions, (c) heading and caption references may not be
construed in interpreting provisions, (d) monetary references are to currency
of the United States of America, (e) section, paragraph, annex, schedule,
exhibit and similar references are to the particular Credit Document in which
they are used, (f) references to “telecopy”, “facsimile”, “fax” or similar
terms are to facsimile or telecopy transmissions, (g) references to “including”
(in its various forms) mean including without limiting the generality of any
description preceding that word, (h) the rule of construction that references
to general items that follow references to specific items are limited to the
same type or character of those specific items is not applicable in the Credit
Documents, (i) references to “writing” include printing, typing, lithography
and other means of reproducing words in a tangible, visible form, (j)
references to any Person include that Person’s heirs, personal representatives,
successors, trustees, receivers and permitted assigns, (k) references to any
Legal Requirement include every amendment or supplement to it, rule and
regulation adopted under it and successor or replacement for it, (l) references
to any Governmental Authority include any Person succeeding to its relevant
function, (m) references to any Credit Document or other document include (to
the extent not prohibited by the terms of the Credit Documents) every renewal
and extension of it, amendment and supplement to it and replacement or
substitution for it and (n) the terms “assets” or “property” in relation to any
Person includes all asset, property and Equity Interests owned, used or
acquired, or to be owned, used or acquired, by such Person, as the context may
require.

16

 

     SECTION 1.4. Accounting Principles.

     Unless otherwise specified, in the Credit Documents: (a) GAAP determines
all accounting and financial terms and compliance with financial covenants, (b)
GAAP in effect on the date of this Agreement determines compliance with
financial covenants, (c) otherwise, all accounting principles applied in a
current period must be comparable in all material respects to those applied
during the preceding comparable period and (d) all financial terms and
compliance with reporting and financial covenants must be on a consolidated
basis, as applicable.

ARTICLE II

THE COMMITMENTS

     Each Lender severally but not jointly agrees to extend credit to the
Borrower and the LC Issuing Bank agrees to issue Letters of Credit, in each
case, in accordance with the following provisions and subject to the other
terms and conditions of the Credit Documents.

     SECTION 2.1. Revolving Facility.

     Each Borrowing is subject to all of the provisions in the Credit
Documents, including the following: (a) each Borrowing may occur only on a
Business Day on or after the Closing Date and before the Termination Date and
(b) the Outstanding Credits may never exceed the total Commitments at such
time. Notwithstanding the foregoing, until such time as the Borrower delivers
certified copies of resolutions of the Borrower’s general partner authorizing
Borrowings by the Borrower of at least $550,000,000 at any one time outstanding
and an opinion of counsel to the Borrower with respect to such action, each in
form and substance satisfactory to the Administrative Agent, the Outstanding
Credits may not exceed $500,000,000 at any one time outstanding.

     SECTION 2.2. Borrowing Procedure.

     The following procedures apply to Borrowings:

     (a)     Borrowing Request. The Borrower may request a Borrowing by making or
delivering a Borrowing Request to the Administrative Agent, which is
irrevocable and binding on the Borrower, stating the Type, amount, and Interest
Period for each Borrowing and which must be received by the Administrative
Agent no later than (i) 10:00 a.m. on the third Business Day before the date on
which funds are requested (the “Borrowing Date”) for any LIBOR Rate Borrowing,
or (ii) 11:00 a.m. on the Borrowing Date for any Base Rate Borrowing. The
Administrative Agent shall promptly on the day received notify each Lender of
any Borrowing Request. Each LIBOR Rate Borrowing must be in the amount of
$5,000,000 or an integral multiple of $1,000,000 in excess of $5,000,000, and
each Base Rate Borrowing must be in the amount of $1,000,000 or an integral
multiple of $100,000 in excess of $1,000,000, or if less than $1,000,000, the
total unused Commitments.

     (b)     Funding. Each Lender shall remit its Commitment Percentage of each
requested Borrowing to the Administrative Agent’s principal office in Atlanta,
Georgia, in funds that are available for immediate use by the Administrative
Agent by 2:00 p.m. on the applicable

17

 

Borrowing Date. Subject to receipt of those funds, the Administrative
Agent shall (unless to its actual knowledge any of the applicable conditions
precedent have not been satisfied by the Borrower or waived by the requisite
Lenders) make those funds available to the Borrower by wiring the funds to or
for the account of the Borrower.

     (c)     Funding Assumed. Absent contrary written notice from a Lender, the
Administrative Agent may assume that each Lender has made its Commitment
Percentage of the requested Borrowing available to the Administrative Agent on
the applicable Borrowing Date, and the Administrative Agent may, in reliance
upon such assumption (but shall not be required to), make available to the
Borrower a corresponding amount. If a Lender fails to make its Commitment
Percentage of any requested Borrowing available to the Administrative Agent on
the applicable Borrowing Date, the Administrative Agent may recover the
applicable amount on demand (i) from that Lender together with interest,
commencing on the Borrowing Date and ending on (but excluding) the date the
Administrative Agent recovers the amount from that Lender, at an annual
interest rate equal to the Fed Funds Rate, or (ii) if that Lender fails to pay
its amount upon demand, then from the Borrower, together with interest at the
rate applicable to that Borrowing. No Lender is responsible for the failure of
any other Lender to make its share of any Borrowing available as required by
Section 2.2(b); however, failure of any Lender to make its share of any
Borrowing so available does not excuse any other Lender from making its share
of any Borrowing so available.

     SECTION 2.3. Effect of Requests.

     Each Borrowing Request and Request for Issuance constitutes a
representation and warranty by the Borrower that as of the date of the
requested Extension of Credit all of the applicable conditions precedent in
Article 5 have been satisfied.

     SECTION 2.4. Termination of the Commitments.

     (a)     Voluntary. The Borrower may, upon giving at least five Business Days
prior written and irrevocable notice to the Administrative Agent, terminate all
or part of the Commitments; provided, however, that any such termination may
not result in the aggregate Commitments being reduced to an amount less than
the LC Outstandings. Each partial termination under this subsection (a) must
be in an amount of not less than $5,000,000 or a greater integral multiple of
$1,000,000 and must be ratable in accordance with each Lender’s Commitment
Percentage.

     (b)     Mandatory. On the date of any prepayment of Borrowings (or cash
collateralization of LC Outstandings) pursuant to Section 3.2(c)(ii), the
Commitments shall automatically reduce by an amount equal to such prepayment
(or cash collateralization).

     (c)     Miscellaneous. At the time of any termination of the Commitments
under this Section 2.4, the Borrower shall pay to the Administrative Agent, for
the account of each Lender, as applicable, all accrued and unpaid fees under
this Agreement, the interest attributable to the amount of that reduction, and
any related Funding Loss. Any part of the Commitments that is terminated may
not be reinstated except as permitted under Section 2.6.

18

 

     SECTION 2.5. Letters of Credit.

     (a)     Subject to the terms and conditions hereof, each Letter of Credit
shall be issued (or the stated maturity thereof extended or terms thereof
modified or amended) on not less than three Business Days’ prior notice thereof
by delivery of a Request for Issuance to the Administrative Agent (which shall
promptly distribute copies thereof to the Lenders) and the LC Issuing Bank.
Each Request for Issuance shall specify (i) the date (which shall be a Business
Day) of issuance of such Letter of Credit (or the date of effectiveness of such
extension, modification or amendment) and the stated expiry date thereof (which
shall be no later than the eighth Business Day preceding the Stated Termination
Date), (ii) the proposed stated amount of such Letter of Credit (which shall
not be less than $1,000,000), (iii) the name and address of the beneficiary of
such Letter of Credit and (iv) a statement of drawing conditions applicable to
such Letter of Credit, and if such Request for Issuance relates to an amendment
or modification of a Letter of Credit, it shall be accompanied by the consent
of the beneficiary of the Letter of Credit thereto. Each Request for Issuance
shall be irrevocable unless modified or rescinded by the Borrower not less than
two days prior to the proposed date of issuance (or effectiveness) specified
therein. Not later than 12:00 noon on the proposed date of issuance (or
effectiveness) specified in such Request for Issuance, and upon fulfillment of
the applicable conditions precedent and the other requirements set forth
herein, the LC Issuing Bank shall issue (or extend, amend or modify) such
Letter of Credit and provide notice and a copy thereof to the Administrative
Agent, which shall promptly furnish copies thereof to the Lenders.

     (b)     No Letter of Credit shall be requested or issued hereunder if, after
the issuance thereof, (i) the aggregate undrawn stated amounts of all Letters
of Credit outstanding would exceed $20,000,000; or (ii) the Outstanding Credits
would exceed the total Commitments.

     (c)     The Borrower hereby agrees to pay to the Administrative Agent for the
account of the LC Issuing Bank and, if they shall have purchased participations
in the reimbursement obligations of the Borrower pursuant to subsection (d)
below, the Lenders, on demand made by the LC Issuing Bank to the Borrower, on
and after each date on which the LC Issuing Bank shall pay any amount under any
Letter of Credit issued by the LC Issuing Bank, a sum equal to the amount so
paid plus interest on such amount from the date so paid by the LC Issuing Bank
until repayment to the LC Issuing Bank in full at a fluctuating interest rate
per annum equal to the interest rate applicable to Base Rate Borrowings plus,
if any amount paid by the LC Issuing Bank under a Letter of Credit is not
reimbursed by the Borrower within three Business Days, 2%.

     (d)     If the LC Issuing Bank shall not have been reimbursed in full for any
payment made by the LC Issuing Bank under a Letter of Credit issued by the LC
Issuing Bank on the date of such payment, the LC Issuing Bank shall give the
Administrative Agent and each Lender prompt notice thereof (an “LC Payment
Notice”) no later than 12:00 noon on the Business Day immediately succeeding
the date of such payment by the LC Issuing Bank. Each Lender severally agrees
to purchase a participation in the reimbursement obligation of the Borrower to
the LC Issuing Bank by paying to the Administrative Agent for the account of
the LC Issuing Bank an amount equal to such Lender’s Commitment Percentage of
such unreimbursed amount paid by the LC Issuing Bank, plus interest on such
amount at a rate per annum equal to the Fed Funds Rate from the date of the
payment by the LC Issuing Bank to the date of payment to the

19

 

LC Issuing Bank by such Lender. Each such payment by a Lender shall be
made not later than 3:00 P.M. on the later to occur of (i) the Business Day
immediately following the date of such payment by the LC Issuing Bank and (ii)
the Business Day on which Lender shall have received an LC Payment Notice from
the LC Issuing Bank. Each Lender’s obligation to make each such payment to the
Administrative Agent for the account of the LC Issuing Bank shall be several
and shall not be affected by the occurrence or continuance of a Potential
Default or Event of Default or the failure of any other Lender to make any
payment under this Section 2.5(d). Each Lender further agrees that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.

     (e)     The failure of any Lender to make any payment to the Administrative
Agent for the account of the LC Issuing Bank in accordance with subsection (d)
above shall not relieve any other Lender of its obligation to make payment, but
no Lender shall be responsible for the failure of any other Lender. If any
Lender (a “non-performing Lender”) shall fail to make any payment to the
Administrative Agent for the account of the LC Issuing Bank in accordance with
subsection (d) above within five Business Days after the LC Payment Notice
relating thereto, then, for so long as such failure shall continue, the LC
Issuing Bank shall be deemed, for purposes of Section 14.8 and Article XII
hereof, to be a Lender owed a Borrowing in an amount equal to the outstanding
principal amount due and payable by such non-performing Lender to the
Administrative Agent for the account of the LC Issuing Bank pursuant to
subsection (d) above. Any non-performing Lender and the Borrower (without
waiving any claim against such Lender for such Lender’s failure to purchase a
participation in the reimbursement obligations of the Borrower under subsection
(d) above) severally agree to pay to the Administrative Agent for the account
of the LC Issuing Bank forthwith on demand such amount, together with interest
thereon for each day from the date such Lender would have purchased its
participation had it complied with the requirements of subsection (d) above
until the date such amount is paid to the Administrative Agent at (i) in the
case of the Borrower, the interest rate applicable at the time to Base Rate
Borrowings and (ii) in the case of such Lender, the Fed Funds Rate.

     (f)     The payment obligations of each Lender under Section 2.5(d) and of the
Borrower under this Agreement in respect of any payment under any Letter of
Credit by the LC Issuing Bank shall be unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:

		
	 	     (i)     any lack of validity or enforceability of this Agreement, any
other Credit Document or any other agreement or instrument relating
thereto or to such Letter of Credit;
	 
	 	     (ii)     any amendment or waiver of, or any consent to departure from,
the terms of this Agreement, any other Credit Document or such Letter of
Credit;
	 
	 	     (iii)     the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against any beneficiary, or any
transferee, of such Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the LC Issuing Bank,
or any other Person, whether in connection with this

20

 

		
	 	Agreement, the transactions contemplated hereby, thereby or by such
Letter of Credit, or any unrelated transaction;
	 
	 	     (iv)     any statement or any other document presented under such Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect;
	 
	 	     (v)     payment in good faith by the LC Issuing Bank under the Letter of
Credit issued by the LC Issuing Bank against presentation of a draft or
certificate that does not comply with the terms of such Letter of Credit;
or
	 
	 	     (vi)     any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.

     (g)     The Borrower assumes all risks of the acts and omissions of any
beneficiary or transferee of any Letter of Credit. Neither the LC Issuing
Bank, the Lenders nor any of their respective officers, directors, employees,
agents or Affiliates shall be liable or responsible for (i) the use that may
be made of such Letter of Credit or any acts or omissions of any beneficiary or
transferee thereof in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (iii) payment by the LC Issuing Bank against presentation of documents
that do not comply with the terms of such Letter of Credit, including failure
of any documents to bear any reference or adequate reference to such Letter of
Credit; or (iv) any other circumstances whatsoever in making or failing to make
payment under such Letter of Credit. Notwithstanding any provision to the
contrary contained in any Credit Document, the Borrower and each Lender shall
have the right to bring suit against the LC Issuing Bank, and the LC Issuing
Bank shall be liable to the Borrower and any Lender, to the extent of any
direct, as opposed to consequential, damages suffered by the Borrower or such
Lender which the Borrower or such Lender proves were caused by the LC Issuing
Bank’s willful misconduct or gross negligence, including, in the case of the
Borrower, the LC Issuing Bank’s willful failure to make timely payment under
such Letter of Credit following the presentation to it by the beneficiary
thereof of a draft and accompanying certificate(s) that strictly comply with
the terms and conditions of such Letter of Credit. In furtherance and not in
limitation of the foregoing, the LC Issuing Bank may accept sight drafts and
accompanying certificates presented under the Letter of Credit issued by the LC
Issuing Bank that appear on their face to be in order, without responsibility
for further investigation, regardless of any notice or information to the
contrary, and payment against such documents shall not constitute willful
misconduct or gross negligence by the LC Issuing Bank. Notwithstanding the
foregoing, no Lender shall be obligated to indemnify the Borrower for damages
caused by the LC Issuing Bank’s willful misconduct or gross negligence.

     SECTION 2.6. Increase of Commitments; Additional Lenders.

     (a)     So long as no Potential Default or Event of Default has occurred and
is continuing, Borrower may, from time to time, upon prior notice to the
Administrative Agent (which shall promptly notify each Lender following its
receipt thereof), propose to increase the total Commitments up to an amount in
each instance not less than $50,000,000, but in no event

21

 

by more than an amount that would cause the total Commitments to exceed
$700,000,000 (the amount of any such increase, the “Additional Commitment
Amount”). Each Lender shall have the right for a period of 15 days following
receipt of such notice to elect by written notice to the Borrower and the
Administrative Agent to increase its Commitment by a principal amount equal to
its pro rata share of the Additional Commitment Amount. No Lender (or any
successor thereto) shall have any obligation to increase its Commitment or its
other obligations under this Agreement or the other Credit Documents, any
decision by a Lender to increase its Commitment shall be made in its sole
discretion independently from any other Lender and any Lender which does not
respond within such 15 day period shall be deemed to have advised the
Administrative Agent and the Borrower that it elected not to increase its
Commitment.

     (b)     If any one or more Lenders shall elect not to increase its Commitment
pursuant to subsection (a) of this Section (each a “Non-Consenting Lender”),
the Administrative Agent shall, promptly after the end of such 15-day period or
promptly after the date the Administrative Agent shall have received all
Lenders’ related election, whichever shall occur first, notify all other
Lenders (the “Consenting Lenders”) of the amount of the Additional Commitment
Amount that remains unsubscribed (the “Unsubscribed Amount”). Each such
Consenting Lender shall have the right for a period of 10 days following
receipt of such notice to elect by written notice to the Borrower and the
Administrative Agent to increase its Commitment by a principal amount up to the
remaining Unsubscribed Amount. The sum of the increases in the Commitments of
the Consenting Lenders pursuant to subsections (a) and (b) shall not in the
aggregate exceed the Additional Commitment Amount; provided, however, that if
accepted by the Borrower, and subject to the right of any Consenting Lender to
promptly revoke its prior election to increase its Commitment in such event,
such increases in the Commitments of the Consenting Lenders may exceed the
Unsubscribed Amount (but shall in no event cause the total Commitments in
effect to exceed $700,000,000). If the sum of the additional increases in the
Commitments of the Consenting Lenders pursuant to this subsection (b) exceeds
the Unsubscribed Amount, or any greater amount accepted by the Borrower as
provided in the immediately preceding sentence, then the additional increases
in Commitments pursuant to this subsection (b) shall be reduced pro-rata such
that amount of the Consenting Lenders’ Commitments increased pursuant to this
subsection (b) shall not exceed the Unsubscribed Amount or such greater amount,
as applicable.

     (c)     If the Consenting Lenders shall not increase their Commitments
pursuant to subsection (a) and (b) of this Section in an amount equal to the
Additional Commitment Amount, then not later than 10 days prior to the
effective date of the increase in the Commitments the Borrower may designate in
writing to the Administrative Agent other banks or financial institutions which
at the time agree to become parties to this Agreement (each an “Additional
Lender”); provided, however, that any new bank or financial institution must be
acceptable to the Administrative Agent. The sum of the increases in the
Commitments of the Consenting Lenders pursuant to subsections (a) and (b), plus
the Commitments of the Additional Lenders pursuant to this subsection (c),
shall not in the aggregate exceed the Additional Commitment Amount.

     (d)     An increase in the aggregate amount of the Commitments pursuant to
this Section 2.6 shall become effective upon the receipt by the Administrative
Agent of (i) an agreement in form and substance satisfactory to the
Administrative Agent signed by the Borrower, by each

22

 

Additional Lender and by
each Consenting Lender, setting forth the new Commitments of such
Lenders and setting forth the agreement of each Additional Lender to
become a party to this Agreement and to be bound by all the terms and
provisions hereof, together with such evidence of appropriate authorization on
the part of the Borrower with respect to the increase in the Commitments and
such opinions of counsel for the Borrower with respect to the increase in the
Commitments as the Administrative Agent may reasonably request, and (ii) Notes
executed and delivered by the Borrower for each Consenting Lender and each
Additional Lender, evidencing such Lenders’ Commitments.

     (e)     Upon the acceptance of any such agreement by the Administrative Agent,
the total Commitments shall automatically be increased by the amount of the
Commitments added through such agreement and Schedule 2 shall automatically be
deemed amended to reflect the Commitments of all Lenders after giving effect to
such additional Commitments and Additional Lenders, as applicable.

     (f)     Upon any increase in the aggregate amount of the Commitments pursuant
to this Section 2.6 that is not pro rata among all Lenders, (x) within five
Business Days, in the case of any Base Rate Borrowings then outstanding, and at
the end of the then current Interest Period with respect thereto, in the case
of any Eurodollar Borrowings then outstanding, the Borrower shall prepay such
Borrowings in their entirety and, to the extent the Borrower elects to do so
and subject to the conditions specified in Article V, the Borrower shall
reborrow Borrowings from the Lenders (including any Additional Lenders) in
proportion to their respective Commitments after giving effect to such
increase, until such time as all outstanding Borrowings are held by the Lenders
(including any Additional Lenders) in such proportion and (y) effective upon
such increase, the amount of the participations held by the Lenders (including
any Additional Lenders) in the LC Outstandings shall be adjusted such that,
after giving effect to such adjustments, each Lender (including each Additional
Lender) shall hold participations in each such LC Outstandings in the
proportion its respective Commitment bears to the aggregate Commitments after
giving effect to such increase.

ARTICLE III

PAYMENT TERMS

     SECTION
3.1. Notes and Payments.

     The Borrowings are evidenced by the Notes, one payable to each Lender in
the amount of its Commitment. The Borrower must make each payment and
prepayment on the Obligations to the Administrative Agent’s principal office in
Atlanta, Georgia, in immediately available funds by 1:00 p.m. on the day due;
otherwise, but subject to Section 3.6, that portion of the Obligations in
respect of which such payment or prepayment was made shall continue to accrue
interest until the Business Day upon which such payment shall be received by
the Administrative Agent at the time and in the manner specified above. The
Administrative Agent shall promptly pay to each Lender the part of any payment
or prepayment to which that Lender is entitled under this Agreement on the same
day the Administrative Agent receives the funds from the Borrower. Unless the
Administrative Agent has received notice from the Borrower before the date on
which any payment is due under this Agreement that the Borrower will not make
that payment in full,

23

 

then on the date that payment is due the Administrative
Agent may assume that the Borrower has made the full payment due and the Administrative Agent may, in reliance
upon that assumption, cause to be distributed to each Lender on that date the
amount then due to each Lender. If and to the extent the Borrower does not
make the full payment due to the Administrative Agent, each Lender shall repay
to the Administrative Agent on demand the amount distributed to that Lender by
the Administrative Agent together with interest for each day from the date that
Lender received payment from the Administrative Agent until the date that
Lender repays the Administrative Agent (unless such repayment is made on the
same day as such distribution), at an interest rate equal to the Fed Funds
Rate.

     SECTION 3.2. Interest and Principal Payments.

     (a)     Interest. Accrued interest on each LIBOR Rate Borrowing shall be due
and payable on the last day of its Interest Period. If any Interest Period for
a LIBOR Rate Borrowing is greater than three months, then accrued interest
shall also be due and payable on the date three months after the commencement
of the Interest Period. Accrued interest on the unpaid principal amount of
each Base Rate Borrowing shall be due and payable in arrears on the last day of
each March, June, September and December, commencing on the first such date
that follows the Closing Date, and on the date such Borrowing becomes due and
payable or is otherwise paid in full.

     (b)     Principal. The principal amount of all Borrowings shall be due and
payable on the Termination Date.

     (c)     Prepayments.

		
	 	     (i)     The Borrower may, from time to time, by giving notice to the
Administrative Agent no later than three Business Days before the date of
the prepayment, prepay, without premium or penalty and in whole or part,
the principal amount of any Borrowing so long as:

		
	 	     (A)     the notice by the Borrower specifies the amount and
Borrowing to be prepaid,
	 
	 	     (B)     each voluntary partial prepayment must be in a principal
amount of not less than $1,000,000 or a greater integral multiple
of $1,000,000, plus accrued interest on the amount prepaid to the
date of such prepayment, and
	 
	 	     (C)     the Borrower shall pay the Funding Loss, if any, within 5
Business Days following an affected Lender’s demand and delivery to
the Borrower of the certificate as provided in Section 3.18.
Conversions on the last day of Interest Period pursuant to Section
3.10 are not prepayments.

		
	 	     (ii)     Reserved.
	 
	 	     (iii)     If at any time, the sum of the aggregate principal amount of
Borrowings outstanding plus LC Outstandings shall exceed the total
Commitments, the Borrower shall forthwith prepay Borrowings, and, to the
extent provided for by this Section

24

 

		
	 	3.2(c)(iii), deposit funds in the
Cash Collateral Account in respect of LC Outstandings
pursuant to Section 12.1(d), in a principal amount equal to such
excess, together with accrued interest to the date of such prepayment on
the principal amount of Borrowings prepaid and any Funding Losses owing
in connection therewith.
	 
	 	     (iv)     Prepayments of the Borrowings pursuant to this Section 3.2(c)
shall be applied, first, to prepay Base Rate Borrowings, second, to
prepay any LIBOR Rate Borrowing that has an Interest Period the last day
of which is the same as the date of such requirement prepayment, and,
third to prepay other LIBOR Rate Borrowings, as selected by the Borrower,
or, at the Borrower’s option, to cash collateralize such other LIBOR Rate
Borrowings (which cash collateral will be applied on the last day of the
Interest Period of each such LIBOR Rate Borrowing to prepay such LIBOR
Rate Borrowings).

     SECTION 3.3. Interest Options.

     Except as otherwise provided in this Agreement, Borrowings shall bear
interest at an annual rate equal to the lesser of (i) the Base Rate or the
LIBOR Rate plus the Applicable Margin, in each case as designated or deemed
designated by the Borrower, and (ii) the Maximum Rate; provided that the LIBOR
Rate may not be selected when an Event of Default or Potential Default has
occurred and is continuing.

     SECTION 3.4. Quotation of Rates.

     The Borrower may contact the Administrative Agent prior to delivering a
Borrowing Request to receive an indication of the interest rates then in
effect, but the indicated rates do not bind the Administrative Agent or the
Lenders or affect the interest rate that is actually in effect when the
Borrower makes a Borrowing Request or on the Borrowing Date.

     SECTION 3.5. Default Rate.

     To the extent lawful, any amount payable under any Credit Document that is
not paid when due (including interest on any such unpaid amount) shall bear
interest from the date due (stated or by acceleration) at the Default Rate
until paid, regardless whether payment is made before or after entry of a
judgment, payable on demand.

     SECTION 3.6. Interest Recapture.

     If the designated interest rate applicable to any amount exceeds the
Maximum Rate, the interest rate on that amount is limited to the Maximum Rate,
but any subsequent reductions in the designated rate shall not reduce the
interest rate thereon below the Maximum Rate until the total amount of accrued
interest equals the amount of interest that would have accrued if that
designated rate had always been in effect. If at maturity (stated or by
acceleration), or at final payment of the Notes, the total interest paid or
accrued is less than the interest that would have accrued if the designated
rates had always been in effect, then, at that time and to the extent lawful,
the Borrower shall pay an amount equal to the difference between (a) the lesser
of the amount of interest that would have accrued if the designated rates had
always been in effect and the amount of interest that would have accrued if the
Maximum Rate had always been in effect, and (b) the amount of interest actually
paid or accrued on the Notes.

25

 

     SECTION 3.7. Interest and Fee Calculations.

     All computations of interest based on the prime lending rate of the
Administrative Agent shall be made by the Administrative Agent on the basis of
a year of 365 or 366 days, as the case may be. All computations of facility
fees, the LC Fee and interest based on the LIBOR Rate or the Fed Funds Rate
shall be made by the Administrative Agent on the basis of a year of 360 days
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which such facility fees, the LC Fee or
interest are payable. Each determination by the Administrative Agent of an
interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.

     SECTION 3.8. Maximum Rate.

     Regardless of any provision contained in any Credit Document, no Lender is
entitled to contract for, charge, take, reserve, receive or apply, as interest
on all or any part of the Obligations, any amount in excess of the Maximum
Rate, and, if any Lender ever does so, then any excess shall be treated as a
partial prepayment of principal (without regard to Section 3.9) and any
remaining excess shall be refunded to the Borrower. In determining if the
interest paid or payable exceeds the Maximum Rate, the Borrower and the Lenders
shall, to the maximum extent lawful, (a) characterize any nonprincipal payment
as an expense, fee or premium rather than as interest, (b) exclude voluntary
prepayments and their effects, and (c) amortize, prorate, allocate and spread
the total amount of interest throughout the entire contemplated term of the
relevant Borrowings. However, if the Obligations are paid in full before the
end of their full contemplated term, and if the interest received for the
period that the Obligations were outstanding exceeds the Maximum Amount, then
the Lenders shall refund any excess (and the Lenders may not, to the extent
lawful, be subject to any penalties provided by any Legal Requirements for
contracting for, charging, taking, reserving or receiving interest in excess of
the Maximum Amount). If the Legal Requirements of the State of Texas are
applicable for purposes of determining the “Maximum Rate” or the “Maximum
Amount”, then those terms mean the “indicated rate ceiling” from time to time
in effect under Chapter 303 of the Texas Finance Code. The Borrower agrees
that Chapter 346 of the Texas Finance Code (which regulates certain revolving
credit loan accounts and revolving tri-party accounts) does not apply to any
Borrowings.

     SECTION 3.9. Interest Periods.

     When the Borrower requests a LIBOR Rate Borrowing, the Borrower may elect
the applicable interest period (each an “Interest Period”), which may be, at
the Borrower’s option, one, two, three or six months for LIBOR Rate Borrowings,
subject to Section 14.1 and the following conditions: (a) the initial Interest
Period for a LIBOR Rate Borrowing commences on the applicable Borrowing Date or
conversion date, and each subsequent Interest Period applicable to any
Borrowing commences on the day when the next preceding applicable Interest
Period expires; (b) if any Interest Period for a LIBOR Rate Borrowing begins on
a day for which no numerically corresponding Business Day in the calendar month
at the end of the Interest Period exists, then the Interest Period ends on the
last Business Day of that calendar month; (c) if the Borrower is required to
pay any portion of a LIBOR Rate Borrowing before the end of its Interest Period
in order to comply with the payment provisions of the Credit Documents, the

26

 

Borrower shall also pay any related Funding Loss; and (d) no more than six
Interest Periods may be in effect at one time.

     SECTION 3.10. Conversions.

     The Borrower may in accordance with the procedures set forth below (a)
convert a LIBOR Rate Borrowing on the last day of the applicable Interest
Period to a Base Rate Borrowing, (b) convert a Base Rate Borrowing at any time
to a LIBOR Rate Borrowing, and (c) elect a new Interest Period for a LIBOR Rate
Borrowing to commence upon expiration of the then-current Interest Period;
provided that the Borrower may not convert to or select a new Interest Period
for a LIBOR Rate Borrowing at any time when an Event of Default or Potential
Default has occurred and is continuing. Any such conversion or election may be
made by telephonic request to the Administrative Agent no later than 10:00 a.m.
on the third Business Day before the conversion date or the last day of the
Interest Period, as the case may be (for conversion to a LIBOR Rate Borrowing
or election of a new Interest Period), and no later than 11:00 a.m. on the last
day of the Interest Period (for conversion to a Base Rate Borrowing). The
Borrower shall provide a Conversion Notice to the Administrative Agent no later
than two days after the date of the conversion or election. Absent the
Borrower’s telephonic request for conversion or election of a new Interest
Period or if an Event of Default or Potential Default has occurred and is
continuing, then, a LIBOR Rate Borrowing shall be deemed converted to a Base
Rate Borrowing effective when the applicable Interest Period expires.

     SECTION 3.11. Order of Application.

     Each payment (including proceeds from the exercise of any Rights) of the
Obligations shall be applied either (a) if no Event of Default or Potential
Default has occurred and is continuing, then in the order and manner specified
elsewhere herein, and if not so specified, then in the order and manner as the
Borrower directs, or (b) if an Event of Default or Potential Default has
occurred and is continuing or if the Borrower fails to give any direction
required under clause (a) above, then in the following order: (i) to all fees,
expenses, and indemnified amounts for which the Administrative Agent has not
been paid or reimbursed in accordance with the Credit Documents and, except
while an Event of Default under Section 11.1 has occurred and is continuing, as
to which the Borrower has been invoiced and has failed to pay within ten
Business Days of that invoice; (ii) to all fees, expenses and indemnified
amounts for which the LC Issuing Bank has not been paid or reimbursed in
accordance with the Credit Documents and, except while an Event of Default
under Section 11.1 has occurred and is continuing, as to which the Borrower has
been invoiced and has failed to pay within ten Business Days of that invoice;
(iii) to all fees, expenses and indemnified amounts for which any Lender has
not been paid or reimbursed in accordance with the Credit Documents (and if any
payment is less than all unpaid or unreimbursed fees and expenses, then that
payment shall be applied against unpaid and unreimbursed fees and expenses in
the order of incurrence or due date) and, except while an Event of Default
under Section 11.1 has occurred and is continuing, as to which the Borrower has
been invoiced and has failed to pay within ten Business Days of that invoice;
(iv) to accrued interest on the principal amount of the Borrower’s
reimbursement obligations outstanding in respect of Letters of Credit; (v) to
the principal amount of the Borrower’s reimbursement obligations outstanding in
respect of Letters of Credit; (vi) to the cash collateralization of the
Borrower’s reimbursement obligations in respect of LC Outstandings not paid
pursuant to clause

27

 

(v) by deposit of funds in the Cash Collateral Account; (vii) to accrued
interest on the principal amount of the Borrowings outstanding; (viii) to the
principal amount of the Borrowings outstanding in such order as the Required
Lenders may elect (but the Lenders agree to apply proceeds in an order that
will minimize any Funding Loss); and (ix) to the remaining Obligations in the
order and manner the Required Lenders deem appropriate.

     SECTION 3.12. Sharing of Payments, Etc.

     Except as otherwise specifically provided, (a) principal and interest
payments on Borrowings and, if the Lenders have purchased a participation in
the Borrower’s reimbursement obligations in respect of LC Outstandings, such
reimbursement obligations, shall be shared by the Lenders in accordance with
their respective Commitment Percentages and (b) each other payment on the
Obligations shall be shared by the Lenders in the proportion that the
Obligations are owed to the Lenders on the date of the payment. If any Lender
obtains any payment or prepayment with respect to the Obligations (whether
voluntary, involuntary or otherwise, including, without limitation, as a result
of exercising its Rights under Section 3.13) that exceeds the part of that
payment or prepayment that it is then entitled to receive under the Credit
Documents, then that Lender shall purchase from the other Lenders
participations that will cause the purchasing Lender to share the excess
payment or prepayment ratably with each other Lender. If all or any portion of
any excess payment or prepayment is subsequently recovered from the purchasing
Lender, then the purchase shall be rescinded and the purchase price restored to
the extent of the recovery. The Borrower agrees that any purchase of a
participation in any Outstanding Credits from a Lender may, to the fullest
extent lawful, exercise all of its Rights of payment (including the Right of
offset) with respect to that participation as fully as if that purchaser were
the direct creditor of the Borrower in the amount of that participation.

     SECTION 3.13. Offset.

     If an Event of Default has occurred and is continuing, each Lender is
entitled to exercise (for the benefit of all the Lenders) the Rights of offset
and banker’s Lien against each and every account and other property, or any
interest therein, that the Borrower or any Company, other than an Excluded
Subsidiary, may now or hereafter have with, or which is now or hereafter in the
possession of, that Lender to the extent of the full amount of the Obligations
then matured and owed (directly or participated) to it.

     SECTION 3.14. Booking Borrowings.

     To the extent lawful, any Lender may make, carry or transfer its
Borrowings at, to or for the account of any of its branch offices or the office
or branch of any of its Affiliates. However, no Affiliate or branch is
entitled to receive any greater payment under Section 3.16 than the transferor
Lender would have been entitled to receive with respect to those Borrowings,
and a transfer may not be made if, as a direct result of it, Section 3.16 or
3.17 would apply to any of the Obligations. If any of the conditions of
Sections 3.16 or 3.17 ever apply to a Lender, that Lender shall, to the extent
possible, carry or transfer its Borrowings at, to or for the account of any of
its branch offices or the office or branch of any of its Affiliates so long as
the transfer is consistent with the other provisions of this section, does not
create any burden or adverse

28

 

circumstance for that Lender that would not otherwise exist, and
eliminates or ameliorates the conditions of Section 3.16 or 3.17 as applicable.

     SECTION 3.15. Basis Unavailable or Inadequate for LIBOR Rate.

     If, on or before any date when a LIBOR Rate is to be determined for a
Borrowing, the Administrative Agent reasonably determines that the basis for
determining the applicable rate is not available or any Lender reasonably
determines that the resulting rate does not accurately reflect the cost to that
Lender of making or converting Borrowings at that rate for the applicable
Interest Period, then the Administrative Agent shall promptly notify the
Borrower and the Lenders of that determination (which is conclusive and binding
on the Borrower absent manifest error) and the applicable Borrowing shall bear
interest at the sum of the Base Rate plus the Applicable Margin. Until the
Administrative Agent notifies the Borrower that those circumstances no longer
exist, the Lenders’ commitments under this Agreement to make, or to convert to,
LIBOR Rate Borrowings, as the case may be, are suspended.

     SECTION 3.16. Additional Costs.

     (a)     Reserves. With respect to any LIBOR Rate Borrowing (i) if any change
in any present Legal Requirement, any change in the interpretation or
application of any present Legal Requirement, or any future Legal Requirement
imposes, modifies or deems applicable (or if compliance by any Lender with any
requirement of any Governmental Authority results in) any requirement that any
reserves (including, without limitation, any marginal, emergency, supplemental
or special reserves) be maintained (other than any reserve included in the
LIBOR Reserve Percentage), and (ii) if those reserves reduce any sums
receivable by that Lender under this Agreement or increase the costs incurred
by that Lender in advancing or maintaining any portion of any LIBOR Rate
Borrowing, then (A) that Lender (through the Administrative Agent) shall
deliver to the Borrower a certificate setting forth in reasonable detail the
calculation of the amount necessary to compensate it for its reduction or
increase (which certificate is conclusive and binding absent manifest error),
and (B) the Borrower shall pay that amount to that Lender within five Business
Days after demand. The provisions of and undertakings and indemnification in
this subsection (a) survive the satisfaction and payment of the Obligations and
termination of this Agreement.

     (b)     Capital Adequacy. With respect to any Borrowing, if any change in any
present Legal Requirement (whether or not having the force of law), any change
in the interpretation or application of any present Legal Requirement (whether
or not having the force of law), or any future Legal Requirement (whether or
not having the force of law) regarding capital adequacy, or if compliance by
any Lender with any request, directive or requirement imposed in the future by
any Governmental Authority regarding capital adequacy, or if any change by any
Lender, its holding company, or its applicable lending office in its written
policies or in the risk category of this transaction, in any of the foregoing
events or circumstances, reduces the rate of return on its capital as a
consequence of its obligations under this Agreement to a level below that which
it otherwise could have achieved (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by it to be material (and it
may, in determining the amount, utilize reasonable assumptions and allocations
of costs and expenses and use any reasonable averaging or attribution method),
then (unless the effect is already reflected in the rate of interest

29

 

then applicable under this Agreement) the Administrative Agent or that
Lender (through the Administrative Agent) shall notify the Borrower and deliver
to the Borrower a certificate setting forth in reasonable detail the
calculation of the amount necessary to compensate it (which certificate is
conclusive and binding absent manifest error), and the Borrower shall pay that
amount to the Administrative Agent or that Lender within five Business Days
after demand. The provisions of and undertakings and indemnification in this
subsection (b) shall survive the satisfaction and payment of the Obligations
and termination of this Agreement.

     (c)     Taxes. Subject to Section 3.19, any Taxes payable by the
Administrative Agent or any Lender or ruled (by a Governmental Authority)
payable by the Administrative Agent or any Lender in respect of this Agreement
or any other Credit Document shall, if permitted by Legal Requirement, be paid
by the Borrower, together with interest and penalties, if any, except for Taxes
payable on or measured by the overall net income or capital of the
Administrative Agent or that Lender (or the Administrative Agent or that
Lender, as the case may be, together with any other Person with whom the
Administrative Agent or that Lender files a consolidated, combined, unitary or
similar Tax return) and except for interest and penalties incurred as a result
of the gross negligence or willful misconduct of the Administrative Agent or
any Lender. The Administrative Agent or that Lender (through the
Administrative Agent) shall notify the Borrower and deliver to the Borrower a
certificate setting forth in reasonable detail the calculation of the amount of
payable Taxes, which certificate is conclusive and binding (absent manifest
error), and the Borrower shall pay that amount to the Administrative Agent for
its account or the account of that Lender, as the case may be within five
Business Days after demand. If the Administrative Agent or that Lender
subsequently receives a refund of the Taxes paid to it by the Borrower, then
the recipient shall promptly pay the refund to the Borrower.

     SECTION 3.17. Change in Legal Requirements.

     If any Legal Requirement makes it unlawful for any Lender to make or
maintain LIBOR Rate Borrowings, then that Lender shall promptly notify the
Borrower and the Administrative Agent, and (a) as to undisbursed funds, that
requested Borrowing shall be made as a Base Rate Borrowing, and (b) as to any
outstanding Borrowing, (i) if maintaining the Borrowing until the last day of
the applicable Interest Period is unlawful, then the Borrowing shall be
converted to a Base Rate Borrowing as of the date of notice, in which event the
Borrower will not be required to pay any related Funding Loss, or (ii) if not
prohibited by Legal Requirement, then the Borrowing shall be converted to a
Base Rate Borrowing as of the last day of the applicable Interest Period, or
(iii) if any conversion will not resolve the unlawfulness, then the Borrower
shall promptly prepay the Borrowing, without penalty but with related Funding
Loss.

     SECTION 3.18. Funding Loss.

     The Borrower shall indemnify each Lender against, and pay to it within
five Business Days following demand and delivery by such Lender to the Borrower
of the certificate herein provided, any Funding Loss of that Lender. When any
Lender demands that the Borrower pay any Funding Loss, that Lender shall
deliver to the Borrower and the Administrative Agent a certificate setting
forth in reasonable detail the basis for imposing Funding Loss and the
calculation of the amount, which calculation is conclusive and binding absent
manifest error.

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The provisions of and undertakings and indemnification in this section
survive the satisfaction and payment of the Obligations and termination of this
Agreement.

     SECTION 3.19. Foreign Lenders, Participants and Assignees.

     Each Lender, Participant (by accepting a participation interest under this
Agreement) and Assignee (by executing an Assignment) that is not organized
under the Legal Requirements of the United States of America or one of its
states (a) represents to the Administrative Agent and the Borrower that (i) no
Taxes are required to be withheld by the Administrative Agent or the Borrower
with respect to any payments to be made to it in respect of the Obligations and
(ii) it has furnished to the Administrative Agent and the Borrower two duly
completed copies of either U.S. Internal Revenue Service Form W-8BEN or W-8ECI
or any other form acceptable to the Administrative Agent and the Borrower that
entitles it to a complete exemption from U.S. federal withholding Tax on all
interest or fee payments under the Credit Documents, and (b) covenants to (i)
provide the Administrative Agent and the Borrower a new Form W-8BEN or W-8ECI
or other form acceptable to the Administrative Agent and the Borrower upon the
expiration or obsolescence according to Legal Requirement of any previously
delivered form, duly executed and completed by it, entitling it to a complete
exemption from U.S. federal withholding Tax on all interest and fee payments
under the Credit Documents, and (ii) comply from time to time with all Legal
Requirements with regard to the withholding Tax exemption. If any of the
foregoing is not true at any time or the applicable forms are not provided,
then the Borrower and the Administrative Agent (without duplication) may deduct
and withhold from interest and fee payments under the Credit Documents any Tax
at the maximum rate under the IRC or other applicable Legal Requirement, and
amounts so deducted and withheld shall be treated as paid to that Lender,
Participant or Assignee, as the case may be, for all purposes under the Credit
Documents.

     SECTION 3.20. Discharge and Reinstatement.

     Each Company’s obligations under the Credit Documents remain in full force
and effect until no Lender has any commitment to extend credit under the Credit
Documents and the Obligations are fully paid (except for provisions under the
Credit Documents which by their terms expressly survive payment of the
Obligations and termination of the Credit Documents). If any payment under any
Credit Document is ever rescinded or must be restored or returned for any
reason, then all Rights and obligations under the Credit Documents in respect
of that payment are automatically reinstated as though the payment had not been
made when due.

ARTICLE IV

FEES

     SECTION 4.1. Treatment of Fees.

     The fees described in this Section 4.1 (a) are not compensation for the
use, detention or forbearance of money, (b) are in addition to, and not in lieu
of, interest and expenses otherwise described in this Agreement, (c) are
payable in accordance with Section 3.1, (d) are non-refundable and (e) to the
fullest extent permitted by Legal Requirement, bear interest, if not paid when
due, at the Default Rate.

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     SECTION 4.2. Facility Fee.

     The Borrower shall pay to the Administrative Agent for the account of each
Lender the Facility Fee from the date hereof until the Termination Date,
payable on the last day of each March, June, September and December, commencing
on the first such date that follows the Closing Date, and on the Termination
Date.

     SECTION 4.3. Letter of Credit Fees.

     The Borrower shall pay to the Administrative Agent for the account of each
Lender a fee (the “LC Fee”) on the average daily amount of the sum of the
undrawn stated amounts of all Letters of Credit outstanding on each such day,
from the date hereof until the later to occur of the Termination Date and the
date that no Letters of Credit are outstanding, payable on the last day of each
March, June, September and December, commencing on the first such date that
follows the date of this Agreement and such later date, at a rate equal at all
times to the Applicable Margin in effect from time to time for LIBOR Rate
Borrowings. In addition, the Borrower shall pay to the LC Issuing Bank such
fees for the issuance and maintenance of Letters of Credit and for drawings
thereunder as may be separately agreed between the Borrower and the LC Issuing
Bank.

ARTICLE V

CONDITIONS PRECEDENT

     This Agreement shall not be effective unless the Administrative Agent has
received all of the items described in Schedule 5. In addition, no Lender is
obligated to fund (as opposed to continue or convert) any Borrowing, and the LC
Issuing Bank is not obligated to issue any Letter of Credit, unless on the date
of the applicable Extension of Credit (and after giving effect to the requested
Extension of Credit): (a) the Administrative Agent has timely received a
properly completed and duly executed Borrowing Request or Request for Issuance,
as applicable; (b) all of the representations and warranties of the Companies
in the Credit Documents are true and correct in all material respects (unless
they speak to a specific date or are based on facts which have changed by
transactions contemplated or expressly permitted (including as an express
exception to the restrictions set forth in Article IX hereof) by this
Agreement); (c) no Material Adverse Event, Event of Default or Potential
Default has occurred and is continuing; and (d) no limitation in Section 2.1 or
2.5 is or would be exceeded by the requested Extension of Credit. Each
Borrowing Request and Request for Issuance, however delivered, constitutes the
Borrower’s representation and warranty that the conditions in subsections (b)
through (d) above are satisfied. Upon the Administrative Agent’s or any
Lender’s reasonable request, the Borrower shall deliver to the Administrative
Agent or such Lender evidence substantiating any of the matters in the Credit
Documents that are necessary to enable the Borrower to qualify for the
requested Extension of Credit. Each condition precedent in this Agreement
(including, without limitation, those on Schedule 5) is material to the
transactions contemplated by this Agreement, and time is of the essence with
respect to each condition precedent.

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ARTICLE VI

GUARANTIES

     The Borrower shall cause each Significant Subsidiary (other than any
Excluded Subsidiary of the Borrower), whether now existing or in the future
formed or acquired as permitted by the Credit Documents to unconditionally
guarantee the full payment and performance of the Obligations by execution of a
Guaranty. Any Guaranty delivered by a Guarantor after the Closing Date
pursuant to this Article VI shall be accompanied by (a) an opinion of counsel
to such Guarantor as to the enforceability of such Guaranty and such other
matters as the Administrative Agent may reasonably request, (b) certified
copies of the Constituent Documents of such Guarantor, (c) certified copies of
all corporate or partnership (as the case may be) authorizations and approvals
of Governmental Authorities required in connection with the execution, delivery
and performance by such Guarantor of such Guaranty, and (d) such other
certificates, documents and other information regarding such Guarantor as the
Administrative Agent may reasonably request.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants to the Administrative Agent, the LC
Issuing Bank and the Lenders as follows:

     SECTION 7.1. Purpose.

     The Borrower will use the proceeds of the Extensions of Credit for (i)
general purposes, including without limitation the making of Investments in
Subsidiaries and Affiliates of the Borrower, (ii) acquisitions and (iii)
capital expenditures. No Company is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any “margin stock” within the meaning of the Margin
Regulations, and no part of the proceeds of any Borrowing will be used,
directly or indirectly, for a purpose that violates any Legal Requirement,
including the Margin Regulations.

     SECTION 7.2. Subsidiaries and Significant Subsidiaries.

     Schedule 7.2 describes the Borrower, all of its direct and indirect
Subsidiaries and all of its Significant Subsidiaries as of the date hereof.

     SECTION 7.3. Existence, Authority and Good Standing.

     Each Company (other than any Excluded Subsidiary) is duly organized,
validly existing and in good standing under the Legal Requirements of its
jurisdiction of formation. Except where not a Material Adverse Event, each
such Company is duly qualified to transact business and is in good standing in
each jurisdiction where the nature and extent of its business and properties
require due qualification and good standing (each of which jurisdictions is
identified on Schedule 7.2). Each Company (other than any Excluded Subsidiary)
possesses all requisite authority and power to conduct its business as is now
being conducted and as proposed under the

33

 

Credit Documents to be conducted and to own and operate its assets as now
owned and operated and as proposed to be owned and operated under the Credit
Documents.

     SECTION 7.4. Authorization and Contravention.

     The execution and delivery by each Company of each Credit Document to
which it is a party and the performance by it of its obligations under those
Credit Documents (a) are within its corporate, partnership or comparable
organizational powers, (b) have been duly authorized by all necessary
corporate, partnership or comparable organizational action, (c) require no
notice to, consents or approval of, action by or filing with, any Governmental
Authority (except any action or filing that has been taken or made on or before
the Closing Date), (d) do not violate any provision of any of its Constituent
Documents, and (e) except violations that individually or collectively are not
a Material Adverse Event, do not violate any provision of Legal Requirement
applicable to it or any material agreement to which it is a party.

     SECTION 7.5. Binding Effect.

     Upon execution and delivery by all parties to it, each Credit Document
will constitute a legal and binding obligation of each Company party to it,
enforceable against it in accordance with that Credit Document’s terms except
as that enforceability may be limited by Debtor Laws and general principles of
equity.

     SECTION 7.6. Current Financials.

     The Current Financials were prepared in accordance with GAAP and present
fairly, in all material respects, the consolidated financial condition, results
of operations and cash flows of the Companies as of, and for the portion of the
fiscal year ending on their dates (subject only to normal year-end adjustments
for interim statements). Except for transactions contemplated or expressly
permitted (including as an express exception to the restrictions set forth in
Article IX hereof) by the Credit Documents, no material adverse changes have
occurred in such consolidated financial condition from that shown in the
Current Financials.

     SECTION 7.7. Solvency.

     Each of the Borrower and each Guarantor is Solvent.

     SECTION 7.8. Litigation.

     Except as disclosed on Schedule 7.8 and matters covered (subject to
reasonable and customary deductible and retention) by insurance or
indemnification agreements as to which the insurer or indemnifying party, as
applicable, has acknowledged liability, (a) no Company is subject to, or aware
of the threat of, any Litigation that is reasonably likely to be determined
adversely to any Company and, if so adversely determined, would be a Material
Adverse Event, and (b) no outstanding and unpaid judgments against any Company
exist that would be a Material Adverse Event.

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     SECTION 7.9. Taxes.

     Except where not a Material Adverse Event, (a) all Tax returns of each
Company required to be filed have been filed (or extensions have been granted)
before delinquency, and (b) all Taxes imposed upon each Company that are due
and payable have been paid before delinquency except as being contested as
permitted by Section 8.5.

     SECTION 7.10. Compliance with Law and Environmental Matters.

     Except as disclosed on Schedule 7.10, (a) no Company has received notice
from any Governmental Authority that it has actual or potential Environmental
Liability and no Company has knowledge that it has any Environmental Liability,
which actual or potential Environmental Liability in either case constitutes a
Material Adverse Event, and (b) no Company has received notice from any
Governmental Authority that any Real Property is affected by, and no Company
has knowledge that any Real Property is affected by, any Release of any
Hazardous Substance which constitutes a Material Adverse Event. Further,
except as otherwise provided in any Credit Document, each Company (other than
any Excluded Subsidiary) is in compliance with clause (a) of Section 9.6.

     SECTION 7.11. Employee Plans.

     Except as disclosed on Schedule 7.11 or where not a Material Adverse
Event, (a) no Employee Plan subject to ERISA has incurred an “accumulated
funding deficiency” (as defined in Section 302 of ERISA or Section 512 of the
IRC), (b) neither any Company nor any ERISA Affiliate has incurred liability,
except for liabilities for premiums that have been paid or that are not past
due, under ERISA to the PBGC in connection with any Employee Plan, (c) neither
any Company nor any ERISA Affiliate has withdrawn in whole or in part from
participation in a Multiemployer Plan in a manner that has given rise to a
withdrawal liability under Title IV of ERISA, (d) neither the Borrower nor any
ERISA Affiliate has engaged in any “prohibited transaction” (as defined in
Section 406 of ERISA or Section 4975 of the IRC), (e) no “reportable event” (as
defined in Section 4043 of ERISA) has occurred excluding events for which the
notice requirement is waived under applicable PBGC regulations, (f) neither any
Company nor any ERISA Affiliate has any liability, or is subject to any Lien,
under ERISA or the IRC to or on account of any Employee Plan, (g) each Employee
Plan subject to ERISA and the IRC complies in all material respects, both in
form and operation, with ERISA and the IRC, and (h) no Multiemployer Plan
subject to the IRC is in reorganization within the meaning of Section 418 of
the IRC. None of the matters disclosed on Schedule 7.11 give rise to any other
“reportable events”, as defined above.

     SECTION 7.12. Debt.

     No Company has any Debt except as described on Schedule 7.12 or otherwise
incurred after the date hereof in accordance with this Agreement.

     SECTION 7.13. Properties; Liens.

     Each Company (other than any Excluded Subsidiary) has good and
indefeasible title to all of its property reflected on the Current Financials
as being owned by it except for property

35

 

that is obsolete or that has been disposed of in the ordinary course of
business between the date of the Current Financials and the date of this
Agreement or, after the date of this Agreement, as permitted by Sections 9.8
and 9.9. No Lien exists on any property of any Company (other than any
Excluded Subsidiary) except as described on Schedule 7.13 and other Permitted
Liens. No Company (other than any Excluded Subsidiary) is party or subject to
any agreement, instrument or order which in any way restricts any such
Company’s ability to allow Liens to exist upon any of its assets except
relating to Permitted Liens.

     SECTION 7.14. Governmental Regulations.

     No Company is subject to regulation under the Investment Company Act of
1940 or the Public Utility Holding Company Act of 1935.

     SECTION 7.15. Transactions with Affiliates.

     Except as otherwise disclosed on Schedule 7.15 or permitted by Section
9.5, no Company is a party to a material transaction with any of its
Affiliates.

     SECTION 7.16. Leases.

     Except where not a Material Adverse Event, (a) each Company enjoys
peaceful and undisturbed possession under all leases necessary for the
operation of its properties and assets, and (b) all material leases under which
any Company is a lessee are in full force and effect.

     SECTION 7.17. Labor Matters.

     Except where not a Material Adverse Event, (a) no actual or threatened
strikes, labor disputes, slow downs, walkouts, work stoppages or other
concerted interruptions of operations that involve any employees employed at
any time in connection with the business activities or operations at the Real
Property exist, (b) hours worked by and payment made to the employees of any
Company or any Predecessor have not been in violation of the Fair Labor
Standards Act or any other applicable Legal Requirements pertaining to labor
matters, (c) all payments due from any Company for employee health and welfare
insurance, including, without limitation, workers compensation insurance, have
been paid or accrued as a liability on its books, and (d) the business
activities and operations of each Company are in compliance with OSHA and other
applicable health and safety Legal Requirements.

     SECTION 7.18. Intellectual Property.

     Except where not a Material Adverse Event, (a) each Company owns or has
the right to use all material licenses, patents, patent applications,
copyrights, service marks, trademarks, trademark applications and trade names
necessary to continue to conduct its businesses as presently conducted by it
and proposed to be conducted by it immediately after the date of this
Agreement, (b) each Company is conducting its business without infringement or
claim of infringement of any license, patent, copyright, service mark,
trademark, trade name, trade secret or other intellectual property right of
others and (c) no infringement or claim of infringement by others of any
material license, patent, copyright, service mark, trademark, trade name, trade
secret or other intellectual property of any Company exists.

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     SECTION 7.19. Insurance.

     All insurance required under Section 8.9 is in full force and effect.

     SECTION 7.20. Restrictions on Distributions.

     Except as disclosed on Schedule 7.20, no Subsidiary (other than any
Excluded Subsidiary) of the Borrower is subject to any restriction on such
Subsidiary’s ability to directly or indirectly declare, make or pay
Distributions to the Borrower.

     SECTION 7.21. Full Disclosure.

     Each fact or condition relating to any Company’s financial condition,
business or property that is a Material Adverse Event has been disclosed in
writing to the Administrative Agent. All information previously furnished by
any Company to the Administrative Agent in connection with the Credit Documents
(the “Disclosed Information”) was (and all information furnished in the future
by any Company to the Administrative Agent will be) true and accurate in all
material respects. As of the Closing Date, the Disclosed Information taken as
a whole, was not misleading in any material respect and did not omit to
disclose any matter the failure of which to be disclosed would result in any
information contained in the Disclosed Information being misleading in any
material respect.

ARTICLE VIII

AFFIRMATIVE COVENANTS

     Until the Commitments have been terminated and the Obligations have been
fully paid and performed, the Borrower covenants and agrees with the
Administrative Agent, the LC Issuing Bank and the Lenders that, without first
obtaining the Required Lenders’ written consent to the contrary:

     SECTION 8.1. Certain Items Furnished.

     The Borrower shall furnish or shall cause the following to be furnished to
each Lender:

     (a)     Annual Financials of the Borrower. Promptly after preparation but no
later than 90 days after the last day of each fiscal year of the Borrower,
Financials showing the consolidated financial condition and results of
operations of the Borrower and its Subsidiaries as of, and for the year ended
on, that last day setting forth in comparative form the figures for the
previous fiscal year, accompanied by (i) the opinion, without material
qualification, of KPMG LLP or other firm of nationally-recognized independent
certified public accountants reasonably acceptable to the Required Lenders,
based on an audit (other than in the case of consolidating Financials) using
generally accepted auditing standards, that those Financials were prepared in
accordance with GAAP and present fairly, in all material respects, the
consolidated and consolidating financial condition and results of operations of
the Borrower and its Subsidiaries, and (ii) a related Compliance Certificate
from a Responsible Officer, on behalf of the Borrower.

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     (b)     Quarterly Reports. Promptly after preparation but no later than 45
days after the last day of each of the first three fiscal quarters of the
Borrower and the Companies each year, Financials showing the consolidated
financial condition and results of operations of the Borrower and its
Subsidiaries for that fiscal quarter and for the period from the beginning of
the current fiscal year to the last day of that fiscal quarter setting forth in
each case in comparative form the figures for the corresponding quarter and the
corresponding portion of the previous fiscal year, accompanied, in each case,
by a related Compliance Certificate, together with a completed copy of the
schedule to that certificate, signed by a Responsible Officer, on behalf of the
Borrower.

     (c)     Other Reports. Promptly after preparation and distribution, accurate
and complete copies of all reports and other material communications about
material financial matters or material corporate plans or projections by or for
any Company for distribution to any Governmental Authority or any creditor,
other than credit, trade and other reports prepared and distributed in the
ordinary course of business and information otherwise furnished to the
Administrative Agent and the Lenders under this Agreement.

     (d)     Employee Plans. As soon as possible and within 30 days after any
Company knows that any event which would constitute a reportable event under
Section 4043(b) of Title IV of ERISA with respect to any Employee Plan subject
to ERISA has occurred, or that the PBGC has instituted or will institute
proceedings under ERISA to terminate that plan, deliver a certificate of a
Responsible Officer of the Borrower setting forth details as to that reportable
event and the action that the Borrower or an ERISA Affiliate, as the case may
be, proposes to take with respect to it, together with a copy of any notice of
that reportable event which may be required to be filed with the PBGC, or any
notice delivered by the PBGC evidencing its intent to institute those
proceedings or any notice to the PBGC that the plan is to be terminated, as the
case may be. For all purposes of this section, each Company is deemed to have
all knowledge of all facts attributable to the plan administrator under ERISA.

     (e)     Other Notices. Notice, promptly after the Borrower knows, of (i) the
existence and status of any Litigation that is reasonably likely to be
adversely determined and, if determined adversely to any Company, would be a
Material Adverse Event, (ii) any change in any material fact or circumstance
represented or warranted by any Company in any Credit Document and (iii) an
Event of Default or Potential Default, specifying the nature thereof and what
action the Companies have taken, are taking or propose to take with respect to
such event.

     (f)     Other Information. Promptly when reasonably requested by the
Administrative Agent, the LC Issuing Bank or any Lender, such reasonable
information (not otherwise required to be furnished under this Agreement) about
any Company’s business affairs, assets and liabilities.

     SECTION 8.2. Use of Credit.

     The Borrower shall use the proceeds of Borrowings only for the purposes
specified in this Agreement.

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     SECTION 8.3. Books and Records.

     The Borrower shall, and shall cause each other Company to, maintain books,
records, and accounts necessary to prepare Financials in accordance with GAAP.

     SECTION 8.4. Inspections.

     Upon reasonable request and subject to compliance with applicable safety
standards, with contractual privilege and non-disclosure agreements, and with
the same conditions applicable to any Company in respect of property of that
Company on the premises of other Persons, the Borrower shall, and shall cause
each other Company to, allow the Administrative Agent, the LC Issuing Bank or
any Lender (or their respective Representatives) to inspect any of its
properties, to review reports, files and other records and to make and take
away copies thereof, to conduct reasonable tests or investigations, and to
discuss any of its affairs, conditions and finances with its other creditors,
directors, officers, employees or representatives from time to time, during
reasonable business hours.

     SECTION 8.5. Taxes.

     The Borrower shall, and shall cause each other Company to, promptly pay
when due any and all Taxes except Taxes that are being contested in good faith
by lawful proceedings diligently conducted, against which reserve or other
provision required by GAAP has been made, and in respect of which levy and
execution of any Lien sufficient to be enforced has been and continues to be
stayed.

     SECTION 8.6. Payment of Material Obligations.

     The Borrower shall, and shall cause each other Company (other than any
Excluded Subsidiary) to, promptly pay (or renew and extend) all of its material
obligations as they become due (unless the obligations are being contested in
good faith by, if required, appropriate proceedings).

     SECTION 8.7. Expenses.

     Within ten Business Days after demand accompanied by an invoice describing
the costs, fees and expenses in reasonable detail (and subject to any
limitations separately agreed to in writing by the Borrower and the
Administrative Agent in respect of costs, fees and expenses of the
Administrative Agent or any of its Representatives), the Borrower shall pay (a)
all costs, fees and reasonable expenses paid or incurred by the Administrative
Agent incident to any Credit Document (including the reasonable fees and
expenses of the Administrative Agent’s counsel in connection with the
negotiation, preparation, delivery and execution of the Credit Documents and
any related amendment, waiver or consent) and (b) all reasonable costs and
expenses incurred by the Administrative Agent, the LC Issuing Bank or any
Lender in connection with the enforcement of the obligations of any Company
under the Credit Documents or the exercise of any Rights under the Credit
Documents (including reasonable attorneys’ fees and court costs), all of which
are part of the Obligations, bearing interest (if not paid within ten Business
Days after demand accompanied by an invoice describing the costs, fees and
expenses in reasonable detail) on the portion thereof from time to time unpaid
at the Default Rate until paid.

39

 

     SECTION 8.8. Maintenance of Existence, Assets and Business.

     The Borrower shall, and shall cause each other Company (other than any
Excluded Subsidiary) to, (a) except in connection with dispositions permitted
under Section 9.8, mergers, consolidations and dissolutions permitted under
Section 9.9 and statutory conversions to another form of entity as permitted by
applicable Legal Requirements, maintain its existence and good standing in its
state of formation, and (b) except where not a Material Adverse Event, (i)
maintain its authority to transact business and good standing in all other
states, (ii) maintain all licenses, permits and franchises (including
Environmental Permits) necessary for its business, and (iii) keep all of its
material assets that are useful in and necessary to its business in good
working order and condition (ordinary wear and tear excepted) and make all
necessary repairs and replacements.

     SECTION 8.9. Insurance.

     The Borrower shall, and shall cause each other Company (other than any
Excluded Subsidiary) to, at its cost and expense, maintain with financially
sound, responsible and reputable insurance companies or associations (or, as to
workers’ compensation or similar insurance, with an insurance fund or by
self-insurance authorized by the jurisdictions in which it operates) insurance
concerning its properties and businesses against casualties and contingencies
and of types and in amounts (and with co-insurance and deductibles) as is
customary in the case of similar businesses.

     SECTION 8.10. Environmental Matters.

     The Borrower shall, and shall cause each other Company to, (a) operate and
manage its businesses and otherwise conduct its affairs in compliance with all
Environmental Laws and Environmental Permits except to the extent noncompliance
does not constitute a Material Adverse Event, (b) promptly deliver to the
Administrative Agent a copy of any notice received from any Governmental
Authority alleging that any such Company is not in compliance with any
Environmental Law or Environmental Permit if the allegation constitutes a
Material Adverse Event, and (c) promptly deliver to the Administrative Agent a
copy of any notice received from any Governmental Authority alleging that any
such Company has any potential Environmental Liability if the allegation
constitutes a Material Adverse Event.

     SECTION 8.11. Indemnification.

     (a)     AS USED IN THIS SECTION: (I) “INDEMNITEE” MEANS THE ADMINISTRATIVE
AGENT, THE LC ISSUING BANK, EACH LENDER, EACH PRESENT AND FUTURE AFFILIATE
(WITH WHICH ANY COMPANY HAS ENTERED INTO A WRITTEN CONTRACTUAL ARRANGEMENT) OF
THE ADMINISTRATIVE AGENT, THE LC ISSUING BANK OR ANY LENDER, EACH PRESENT AND
FUTURE REPRESENTATIVE OF THE ADMINISTRATIVE AGENT, THE LC ISSUING BANK, ANY
LENDER OR ANY OF THOSE AFFILIATES AND EACH PRESENT AND FUTURE SUCCESSOR AND
PERMITTED ASSIGN OF THE ADMINISTRATIVE AGENT, THE LC ISSUING BANK, ANY LENDER
OR ANY OF THOSE AFFILIATES OR REPRESENTATIVES; AND (II) “INDEMNIFIED
LIABILITIES” MEANS ALL KNOWN

40

 

AND UNKNOWN, FIXED AND CONTINGENT, ADMINISTRATIVE, INVESTIGATIVE, JUDICIAL
AND OTHER CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, INVESTIGATIONS, SUITS,
PROCEEDINGS, AMOUNTS PAID IN SETTLEMENT, DAMAGES, JUDGMENTS, PENALTIES, COURT
COSTS, LIABILITIES AND OBLIGATIONS — AND ALL COSTS AND REASONABLE EXPENSES AND
DISBURSEMENTS (INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND EXPENSES WHETHER OR
NOT SUIT OR OTHER PROCEEDING EXISTS OR ANY INDEMNITEE IS PARTY TO ANY SUIT OR
OTHER PROCEEDING) IN ANY WAY RELATED TO ANY OF THE FOREGOING — THAT MAY AT ANY
TIME BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE AND IN ANY
WAY ARISING OUT OF ANY (A) CREDIT DOCUMENT, TRANSACTION CONTEMPLATED BY ANY
CREDIT DOCUMENT OR REAL PROPERTY, (B) ENVIRONMENTAL LIABILITY IN ANY WAY
RELATED TO ANY COMPANY, PREDECESSOR, REAL PROPERTY OR ACT, OMISSION, STATUS,
OWNERSHIP OR OTHER RELATIONSHIP, CONDITION OR CIRCUMSTANCE CONTEMPLATED BY,
CREATED UNDER OR ARISING PURSUANT TO OR IN CONNECTION WITH ANY CREDIT DOCUMENT,
OR (C) INDEMNITEE’S SOLE OR CONCURRENT ORDINARY NEGLIGENCE.

     (b)     THE BORROWER SHALL INDEMNIFY EACH INDEMNITEE FROM AND AGAINST, PROTECT
AND DEFEND EACH INDEMNITEE FROM AND AGAINST, HOLD EACH INDEMNITEE HARMLESS FROM
AND AGAINST, AND ON DEMAND PAY OR REIMBURSE EACH INDEMNITEE FOR, ALL
INDEMNIFIED LIABILITIES.

     (c)     THE FOREGOING PROVISIONS (i) ARE NOT LIMITED IN AMOUNT EVEN IF THAT
AMOUNT EXCEEDS THE OBLIGATIONS, (ii) INCLUDE, WITHOUT LIMITATION, REASONABLE
FEES AND EXPENSES OF ATTORNEYS AND OTHER COSTS AND EXPENSES OF LITIGATION OR
PREPARING FOR LITIGATION AND DAMAGES OR INJURY TO PERSONS, PROPERTY OR NATURAL
RESOURCES ARISING UNDER ANY STATUTORY OR COMMON LEGAL REQUIREMENT, PUNITIVE
DAMAGES, FINES AND OTHER PENALTIES, AND (iii) ARE NOT AFFECTED BY THE SOURCE OR
ORIGIN OF ANY HAZARDOUS SUBSTANCE, AND (iv) ARE NOT AFFECTED BY ANY
INDEMNITEE’S INVESTIGATION, ACTUAL OR CONSTRUCTIVE KNOWLEDGE, COURSE OF DEALING
OR WAIVER.

     (d)     HOWEVER, NO INDEMNITEE IS ENTITLED TO BE INDEMNIFIED UNDER THE CREDIT
DOCUMENTS FOR ITS OWN SOLE GROSS NEGLIGENCE OR SOLE WILLFUL MISCONDUCT.

41

 

     SECTION 8.12. Post Closing Covenant. No later than July 3, 2003, the
Borrower shall deliver to the Administrative Agent a supplemental opinion from
counsel to Jonah Gas, addressed to the Administrative Agent and the Lenders, in
form and substance reasonably satisfactory to the Administrative Agent, as to
the matters that are the subject of the opinion from counsel to the other
Guarantors delivered pursuant to Article V.

ARTICLE IX

NEGATIVE COVENANTS

     Until the Commitments have been terminated and the Obligations have been
fully paid and performed, the Borrower covenants and agrees with the
Administrative Agent, the LC Issuing Bank and the Lenders that, without first
obtaining the Required Lenders’ written consent to the contrary:

     SECTION 9.1. Debt.

     The Borrower will not cause or permit any other Company to create, incur,
assume or suffer to exist any Debt except the following (the “Permitted Debt”):

     (a)     Subsidiary Guaranties. Guaranties of any Debt of the Borrower.

     (b)     Permitted
Non-Recourse Debt. Permitted Non-Recourse Debt.

     (c)     Centennial Guaranty. Debt arising under the Centennial Guaranty.

     (d)     Additional Debt. Additional Debt not described in clauses (a) through
(c) above incurred by the Guarantors in an aggregate principal amount not to
exceed $25,000,000 outstanding at any one time.

     (e)     Existing Debt. The Debt described on Schedule 7.12, together with all
renewals, extensions, amendments, modifications and refinancings of (but not
any principal increases to) any of such Debt.

     SECTION 9.2. Prepayments.

     The Borrower will not, and will not cause or permit any other Company,
other than an Excluded Subsidiary, to, prepay or redeem or cause to be prepaid
or redeemed any principal of, or any interest on, any of its Debt except (a)
the Obligations and (b) any of its other Debt if (i) no Event of Default or
Potential Default has occurred and is continuing immediately before, or will
occur as a result of (or otherwise will occur immediately after), the
prepayment or redemption, and (ii) in respect of any prepayment or redemption
of the Senior Notes, the Borrower concurrently prepays to the Lenders
Borrowings (and/or cash collateralizes LC Outstandings) in a principal amount
that is in the same proportion to the total Outstanding Credits immediately
before such prepayment as the amount of principal of the Senior Notes then
being prepaid or redeemed bears to the total principal amount of the Senior
Notes immediately before such prepayment or redemption in accordance with
Section 3.2(c)(iv).

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     SECTION 9.3. Liens.

     The Borrower will not, and will not cause or permit any other Company:
(a) to create, incur or suffer or permit to be created or incurred or to exist
any Lien upon any of its assets except Permitted Liens or (b) to enter into or
permit to exist any arrangement or agreement that directly or indirectly
prohibits any Company from creating or incurring any Lien on any of its assets
except (i) the Credit Documents, (ii) any lease that places a Lien prohibition
on only the property subject to that lease and (iii) arrangements and
agreements that apply only to property subject to Permitted Liens. The
following are “Permitted Liens”:

     (a)     Existing Liens. The Liens existing on the date of this Agreement and
described on Schedule 7.13 and any renewal, extension, amendment or
modification of any of such Lien, provided that the total principal amount
secured by any such Lien never exceeds the total principal amount secured by
such Lien on the date of this Agreement.

     (b)     This Transaction. Liens, if any, ever granted to the Administrative
Agent in favor of the LC Issuing Bank and the Lenders to secure all of any part
of the Obligations.

     (c)     Bonds. Liens securing any industrial development, pollution control
or similar revenue bonds that never exceed a total principal amount of
$25,000,000.

     (d)     Foreclosed Properties. Liens existing on any property acquired by any
Company in connection with the foreclosure or other exercise of its Lien on the
property.

     (e)     Setoffs. Rights of set off or recoupment and banker’s Liens, subject
to any limitations imposed upon them in the Credit Documents.

     (f)     Insurance. Pledges or deposits made to secure payment of workers’
compensation, unemployment insurance or other forms of governmental insurance
or benefits or to participate in any fund in connection with workers’
compensation, unemployment insurance, pensions or other social security
programs.

     (g)     Bids and Bonds. Good faith pledges or deposits (i) for 10% or less of
the amounts due under (and made to secure) any Company’s performance of bids,
tenders, contracts (except for the repayment of borrowed money), (ii) in
respect of any operating lease, that are for up to but not more than the
greater of either 10% of the total rental obligations for the term of the lease
or 50% of the total rental obligations payable during the first year of the
lease, or (iii) made to secure statutory obligations, surety or appeal bonds,
or indemnity, performance or other similar bonds benefiting any Company in the
ordinary course of its business.

     (h)     Permits. Conditions in any permit, license or order issued by a
Governmental Authority for the ownership and operation of a pipeline that do
not materially impair the ownership or operation of such pipeline.

     (i)     Property Restrictions. Zoning and similar restrictions on the use of,
and easements, restrictions, covenants, title defects and similar encumbrances
on, any Real Property or pipeline right-of-way that, (i) do not materially
impair the Company’s use of the Real Property

43

 

or pipeline right-of-way and (ii) are not violated in any material respect
by existing or proposed structures (including the pipeline) or land use.

     (j)     Eminent Domain. The Right reserved to, or vested in, any Governmental
Authority (or granted by a Governmental Authority to another Person) by the
terms of any Right, franchise, grant, license, permit or Legal Requirements to
purchase or recapture, or to designate a purchaser of, any property.

     (k)     Inchoate Liens. If no Lien has been filed in any jurisdiction or
agreed to, (i) claims and Liens for Taxes not yet due and payable or which are
being contested in good faith and for which any reserves required by GAAP have
been established, (ii) mechanic’s Liens and materialman’s Liens for services or
materials and similar Liens incident to construction and maintenance of real
property, in each case for which payment is not yet due and payable, or which
are being contested in good faith and for which any reserves required by GAAP
have been established, (iii) landlord ’s Liens for rents or leases incurred in
the ordinary course of business, in each case which are not yet due and payable
or which are being contested in good faith and for which any reserves required
by GAAP have been established, and (iv) Liens of warehousemen and carriers and
similar Liens which were incurred in the ordinary course of business, in each
case for which payment is not yet due and payable, or which are being contested
in good faith and for which any reserves required by GAAP have been
established.

     (l)     Permitted Non-Recourse Debt. Liens securing obligations in respect of
Permitted Non-Recourse Debt of any Subsidiary of the Borrower.

     (m)     Miscellaneous. Any of the following to the extent that the validity
or amount is being contested in good faith and by appropriate and lawful
proceedings diligently conducted, reserve or other appropriate provision (if
any) required by GAAP has been made, levy and execution has not issued or
continues to be stayed, and they do not individually or collectively detract
materially from the value of the property of the Company in question or
materially impair the use of that property in the operation of its business:
(i) claims and Liens for Taxes; (ii) claims and Liens upon, and defects of
title to, real or personal property, including any attachment of personal or
real property or other legal process before adjudication of a dispute on the
merits; (iii) claims and Liens of mechanics, materialmen, warehousemen,
carriers, landlords or other similar Liens; (iv) Liens incident to construction
and maintenance of real property; and (v) adverse judgments, attachments or
orders on appeal for the payment of money.

     SECTION 9.4. Employee Plans.

     Except as disclosed on Schedule 7.11 or where not a Material Adverse
Event, the Borrower will not, and will not cause or permit any other Company
to, permit any of the events or circumstances described in Section 7.11 to
exist or occur.

     SECTION 9.5. Transactions with Affiliates.

     The Borrower will not, and will not cause or permit any other Company to,
enter into any material transaction with any of its Affiliates except (a) those
described on Schedule 7.15, (b) transactions between the Borrower and a
Guarantor, (c) transactions permitted under Section 9.1 or 9.7, (d)
transactions in the ordinary course of business and upon fair and reasonable
terms not

44

 

materially less favorable than it could obtain or could become entitled to
in an arm’s-length transaction with a Person that was not its Affiliate, and
(e) compensation arrangements in the ordinary course of business with directors
and officers of the Companies.

     SECTION 9.6. Compliance with Legal Requirements and Documents.

     The Borrower will not, and will not cause or permit any other Company to:
(a) violate the provisions of any Legal Requirements (including, without
limitation, OSHA and Environmental Laws) applicable to it or of any material
agreement to which it is a party if that violation alone, or when aggregated
with all other violations of Legal Requirements or other material agreements,
would be a Material Adverse Event, (b) violate in any material respect any
provision of its Constituent Documents, or (c) repeal, replace or amend any
provision of its Constituent Documents if that action would be a Material
Adverse Event.

     SECTION 9.7. Distributions.

     The Borrower will not, and will not cause or permit any other Company to
declare, make or pay any Distribution other than (a) Distributions from any
Subsidiary of the Borrower to the Borrower and the other owners (if any) of
Equity Interests in such Subsidiary, and (b) Distributions by the Borrower that
(i) will not violate its Constituent Documents and (ii) do not exceed
“Available Cash” as defined in the Borrower’s Agreement of Limited Partnership,
in each case, so long as no Event of Default or Potential Default has occurred
and is continuing or will occur as a result of such Distribution.

     SECTION 9.8. Disposition of Assets.

     The Borrower will not, and will not cause or permit any other Company
(other than any Excluded Subsidiary) to, sell, assign, lease, transfer or
otherwise dispose of any of its assets (including equity interests in any other
Company) other than (a) dispositions in the ordinary course of business for
fair and adequate consideration, (b) dispositions for fair and adequate
consideration having a Diluted Value of not more than $40,000,000 in the
aggregate in any fiscal year and not more than $100,000,000 in the aggregate
from the Closing Date through the Stated Termination Date (other than
dispositions in the ordinary course of business, the proceeds of which are
reinvested in other assets used by or useful to the Borrower or such Company in
conducting its customary business if (i) a binding purchase, subscription or
similar agreement relating to such reinvestment is entered into within 180 days
after the receipt of all or substantially all of the cash proceeds from the
disposition of such assets and (ii) the Net Cash Proceeds from such disposition
are so reinvested within one year after the receipt of such cash proceeds), (c)
dispositions to any other Company that is a Guarantor, (d) dispositions to any
Excluded Subsidiary in connection with a transaction involving the issuance by
such Excluded Subsidiary of Permitted Non-Recourse Debt for the purposes
described in clause (ii) of the definition of “Permitted Non-Recourse Debt” and
(e) dispositions of assets that are obsolete or are no longer in use and are
not significant to the continuation of such Company’s business

     SECTION 9.9. Mergers, Consolidations and Dissolutions. The Borrower will
not, and will not cause or permit any other Company (other than any Excluded
Subsidiary) to, merge or consolidate with any other Person or dissolve, except
(a) so long as no Event of Default or

45

 

Potential Default has occurred and is continuing or will occur as a result
of such transaction, any merger or consolidation involving one or more
Companies (so long as, if the Borrower is involved, it is the survivor), and
(b) dissolution of any Company (other than the Borrower) if substantially all
of its assets have been conveyed to any Company or disposed of as permitted in
Section 9.8.

     SECTION 9.10. Amendment of Constituent Documents.

     The Borrower will not, and will not cause or permit any other Company
(other than any Excluded Subsidiary) to, materially amend or modify its
Constituent Documents.

     SECTION 9.11. Assignment.

     The Borrower will not, and will not cause or permit any other Company to,
assign or transfer any of its Rights, duties or obligations under any of the
Credit Documents.

     SECTION 9.12. Fiscal Year and Accounting Methods.

     The Borrower will not, and will not cause or permit any other Company to,
change its fiscal year for accounting purposes or any material aspect of its
method of accounting except to conform any new Subsidiary’s accounting methods
to the Borrower’s accounting methods.

     SECTION 9.13. New Business.

     The Borrower will not, and will not cause or permit any other Company to,
engage in any business except the businesses in which it is presently engaged
and any other reasonably related business.

     SECTION 9.14. Government Regulations.

     The Borrower will not, and will not cause or permit any other Company to,
conduct its business in a way that causes the Borrower or such Company to
become regulated under the Investment Company Act of 1940 or the Public Utility
Holding Company Act of 1935.

     SECTION 9.15. Senior Notes.

     The Borrower will not, and will not cause or permit any other Company to,
(i) secure the obligations of any Company under the Senior Notes or the related
Indentures relating to such Senior Notes, (ii) increase the principal amount of
the Senior Notes, (iii) amend or modify any scheduled date of payment of
principal under the Senior Notes or the related Indentures relating to such
Senior Notes, or (iv) increase the stated rate of any interest applicable to
the Senior Notes.

     SECTION 9.16. Strict Compliance.

     The Borrower will not, and will not cause or permit any other Company to,
do indirectly anything that it may not do directly under any covenant in any
Credit Document.

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     SECTION 9.17. Restrictive Agreements.

     The Borrower will not, and will not cause or permit any other Company to,
enter into any agreement, contract, arrangement or other obligation if the
effect of such agreement, contract, arrangement or other obligation is (a) to
impose any restriction, other than in connection with the issuance by any
Subsidiary of the Borrower of Permitted Non-Recourse Debt, on the ability of
any such Subsidiary to make or declare Distributions to the holders of its
Equity Interests that is more restrictive than the restrictions that are in
effect on the date of this Agreement and disclosed on Schedule 7.20 or (b) to
restrict the ability of any Company to create or maintain Liens on its assets
in favor of the Administrative Agent, the LC Issuing Bank and the Lenders to
secure, in whole or part, the Obligations, except with respect to (i)
agreements, contracts, arrangements or other obligations of any Subsidiary of
the Borrower acquired by the Borrower or any Subsidiary of the Borrower after
the date hereof to the extent that such acquired Subsidiary was a party to such
agreements, contracts, arrangements or other obligations prior to its
acquisition by the Borrower or any Subsidiary of the Borrower and (ii) the
issuance by any Subsidiary of the Borrower of Permitted Non-Recourse Debt.

ARTICLE X

FINANCIAL COVENANTS

     Until the Commitments have been terminated and the Obligations have been
fully paid and performed, the Borrower covenants and agrees with the
Administrative Agent, the LC Issuing Bank and the Lenders that, without first
obtaining the Required Lenders’ consent to the contrary:

     SECTION 10.1. Minimum Net Worth.

     As of the last day of each fiscal quarter of the Borrower, Consolidated
Net Worth will not be less than the sum of (a) 75% of Consolidated Net Worth as
of December 31, 2002, plus (b) 50% of the Net Cash Proceeds of all Equity
Events occurring after December 31, 2002.

     SECTION 10.2. Consolidated Funded Debt to Pro Forma EBITDA.

     As of the last day of each fiscal quarter of the Borrower, the ratio of
Consolidated Funded Debt to Pro Forma EBITDA for the period consisting of four
consecutive fiscal quarters taken as a single accounting period and ending on
such day will be less than 4.75 to 1.00 (the “Required Threshold”); provided,
however, that if the Borrower consummates one or more Acquisitions not
prohibited hereunder and as a result of such Acquisitions the ratio of
Consolidated Funded Debt to Pro Forma EBITDA equals or exceeds 4.75 to 1.00,
then the Required Threshold shall be increased to 5.00 to 1.00 for the first
two full fiscal quarterly periods immediately following the consummation of
each such Acquisition.

     SECTION 10.3. Interest Coverage Ratio.

     As of the last day of each fiscal quarter of the Borrower, the ratio of
(a) EBITDA of the Borrower to (b) Interest Expense of the Borrower (x) for the
four consecutive fiscal quarters

47

 

taken as a single accounting period and ending on such day and (y)
excluding Interest Expense of any Excluded Subsidiary of the Borrower, will not
be less than 3.00 to 1.00.

ARTICLE XI

EVENTS OF DEFAULT

     The term “Event of Default” means the occurrence of any one or more of the
following:

     SECTION 11.1. Payment of Obligations.

     The Borrower’s failure or refusal to pay (a) principal of any Note on or
before the date due or (b) any other part of the Obligations (including fees
due under the Credit Documents) on or before three Business Days after the date
due.

     SECTION 11.2. Covenants.

     Any Company’s failure or refusal to punctually and properly perform,
observe and comply with any covenant (other than covenants to pay the
Obligations) applicable to it:

     (a)     In Article 9 or 10; or

     (b)     In Section 8.1, and such failure or refusal continues for ten days
after the earlier of (i) any Company’s obtaining knowledge of such failure or
refusal and (ii) any Company’s being notified of such failure or refusal by the
Administrative Agent, the LC Issuing Bank or any Lender; or

     (c)     In any other provision of any Credit Document, and that failure or
refusal continues for 30 days after the earlier of (i) any Company’s obtaining
knowledge of such failure or refusal and (ii) any Company’s being notified of
such failure or refusal by the Administrative Agent, the LC Issuing Bank or any
Lender.

     SECTION 11.3. Debtor Relief.

     The Borrower or any Significant Subsidiary (a) is not Solvent, (b) fails
to pay its Debts generally as they become due, (c) voluntarily seeks, consents
to or acquiesces in the benefit of any Debtor Law, or (d) becomes a party to or
is made the subject of any proceeding (except as a creditor or claimant)
provided for by any Debtor Law (unless, if the proceeding is involuntary, the
applicable petition is dismissed within 60 days after its filing).

     SECTION 11.4. Judgments and Attachments.

     Where the amounts in controversy or of any judgments, as the case may be,
exceed (from and after the date hereof and individually or collectively)
$25,000,000 for the Borrower or TE Products or $10,000,000 for any other
Company, and such Person fails (a) to have discharged, within 60 days after its
commencement, any attachment, sequestration or similar proceeding against any
of its assets or (b) to pay any money judgment against it within ten days
before the date on which any of its assets may be lawfully sold to satisfy that
judgment.

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     SECTION 11.5. Government Action.

     Either (a) a final non-appealable order is issued by any Governmental
Authority (including the United States Justice Department) seeking to cause any
Company (other than any Excluded Subsidiary) to divest a significant portion of
its assets under any antitrust, restraint of trade, unfair competition,
industry or similar Legal Requirements, or (b) any Governmental Authority
condemns, seizes or otherwise appropriates or takes custody or control of all
or any substantial portion of any Company’s (other than any Excluded
Subsidiary) assets and, in either case, such event constitutes a Material
Adverse Event.

     SECTION 11.6. Misrepresentation.

     Any representation or warranty made by any Company in any Credit Document
at any time proves to have been materially incorrect when made.

     SECTION 11.7. Change of Control.

     Any one or more of the following occurs or exists: (a) the Borrower
ceases to own (i) at least 99.999% of the limited partner interests in TE
Products, TCTM or Midstream; or (ii) directly or indirectly, 100% of the
ownership interests of TEPPCO GP; or (b) Texas Eastern or any direct or
indirect wholly owned Subsidiary of Duke Energy Field Services, LLC which has
no other assets or businesses other than partnership interests of the Borrower
ceases to be the sole general partner of the Borrower; or (c) TEPPCO GP or any
direct or indirect wholly owned Subsidiary of the Borrower which has no other
assets other than general partner interests of TE Products, TCTM, Midstream,
Jonah Gas, or any other Subsidiary of the Borrower and has no businesses other
than serving as a general partner in such entities ceases to be the sole
general partner of TE Products, TCTM or Midstream; or (d) TEPPCO GP and
Midstream or any one or more direct or indirect wholly owned Subsidiaries of
the Borrower, each of which has no other assets other than general partner
interests of TE Products, TCTM, Midstream or any other Subsidiary of the
Borrower and has no businesses other than serving as a general partner in such
entities cease to be the sole general partners of (or if Jonah Gas has only one
general partner, the sole general partner of) Jonah Gas; or (e) Duke Energy
Field Services, LLC ceases to own, directly or indirectly, 100% of the
ownership interests of Texas Eastern; or (f) Midstream ceases to own (i) at
least 99.999% of the limited partner interests in Val Verde, and (ii) 100% of
the member interests in TEPPCO NGL Pipelines, LLC, the general partner of Val
Verde.

     SECTION 11.8. Other Debt.

     In respect of the Senior Notes or any other Debt owed by any Company
(other than the Obligations) individually or collectively of at least
$10,000,000 (a) any Company fails to make any payment when due (inclusive of
any grace, extension, forbearance or similar period), or (b) any default or
other event or condition occurs or exists beyond the applicable grace or cure
period, the effect of which is to cause or to permit any holder of that Debt to
cause (whether or not it elects to cause) any of that Debt to become due before
its stated maturity or regularly scheduled payment dates, or (c) any of that
Debt is declared to be due and payable or required to be prepaid by any Company
before its stated maturity.

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     SECTION 11.9. Reserved.

     SECTION 11.10. Validity and Enforceability.

     Once executed, this Agreement, any Note or Guaranty ceases to be in full
force and effect in any material respect or is declared to be null and void or
its validity or enforceability is contested in writing by any Company party to
it or any Company party to it denies in writing that it has any further
liability or obligations under it except in accordance with that document’s
express provisions or as the appropriate parties under Section 14.8 below may
otherwise agree in writing.

     SECTION 11.11. Hedging Agreements.

     In respect of any obligation under any Hedging Agreement entered into by
any Company individually or collectively of at least $10,000,000 (a) any
Company fails to make any payment when due (inclusive of any grace, extension,
forbearance or similar period), the effect of which is to cause or permit the
counterparty to cause (whether or not it elects to cause) any of the
obligations under such Hedging Agreement to become due before its stated
payment date, or (b) any default or other event or condition occurs or exists
beyond the applicable grace or cure period, the effect of which is to cause or
permit the counterparty to cause (whether or not it elects to cause) any of the
obligations under such Hedging Agreement to become due before its stated
payment date or (c) any such obligation is declared to be due and payable or
required to be prepaid by any Company before its stated payment date.

ARTICLE XII

RIGHTS AND REMEDIES

     SECTION 12.1. Remedies Upon Event of Default.

     (a)     Debtor Relief. Upon the occurrence of an Event of Default under
Section 11.3, the Commitments and the obligation of the LC Issuing Bank to
issue Letters of Credit shall automatically terminate, and the entire
outstanding principal amount of the Borrowings and all other accrued and unpaid
portions of the Obligations shall automatically become due and payable without
any action of any kind whatsoever.

     (b)     Other Events of Default. If any Event of Default has occurred and is
continuing, subject to the terms of Section 13.5(b), the Administrative Agent
shall at the request, or may with the consent, of the Required Lenders, upon
notice to the Borrower, do any one or more of the following: (i) If the
maturity of the Obligations has not already been accelerated under Section
12.1(a), declare the outstanding principal amount of the Borrowings and all
other accrued and unpaid portion of the Obligations immediately due and
payable, whereupon they shall be due and payable; (ii) terminate the
Commitments and the obligation of the LC Issuing Bank to issue Letters of
Credit; (iii) reduce any claim to judgment and (iv) exercise any and all other
legal or equitable Rights afforded by the Credit Documents, by applicable Legal
Requirements, or in equity.

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     (c)     Cash Collateral Account. Notwithstanding anything to the contrary
contained herein, no notice given or declaration made by the Administrative
Agent pursuant to this Article XII shall affect (i) the obligation of the LC
Issuing Bank to make any payment under any Letter of Credit in accordance with
the terms of such Letter of Credit or (ii) the obligations of each Lender in
respect of each such Letter of Credit; provided, however, that if an Event of
Default has occurred and is continuing, the Administrative Agent shall at the
request, or may with the consent, of the Required Lenders, upon notice to the
Borrower, require the Borrower to deposit with the Administrative Agent an
amount in the cash collateral account (the “Cash Collateral Account”) described
below equal to the LC Outstandings on such date. Such Cash Collateral Account
shall at all times be free and clear of all rights or claims of third parties.
The Cash Collateral Account shall be maintained with the Administrative Agent
in the name of, and under the sole dominion and control of, the Administrative
Agent, and amounts deposited in the Cash Collateral Account shall bear interest
at a rate equal to the rate generally offered by SunTrust for deposits equal to
the amount deposited by the Borrower in the Cash Collateral Account, for a term
to be determined by the Administrative Agent, in its sole discretion. The
Borrower hereby grants to the Administrative Agent for the benefit of the LC
Issuing Bank and the Lenders a Lien in and hereby assigns to the Administrative
Agent for the benefit of LC Issuing Bank and the Lenders all of its right,
title and interest in, the Cash Collateral Account and all funds from time to
time on deposit therein to secure its reimbursement obligations in respect of
Letters of Credit. If any drawings then outstanding or thereafter made are not
reimbursed in full immediately upon demand or, in the case of subsequent
drawings, upon being made, then, in any such event, the Administrative Agent
may apply the amounts then on deposit in the Cash Collateral Account, in such
priority as specified in Section 3.11, toward the payment in full of any of the
Obligations as and when such obligations shall become due and payable. Upon
payment in full, after the termination of the Letters of Credit, of all such
obligations, the Administrative Agent will repay and reassign to the Borrower
any cash then in the Cash Collateral Account and the Lien of the Administrative
Agent on the Cash Collateral Account and the funds therein shall automatically
terminate.

     (d)     In addition, if at any time the Borrower is required to make a
prepayment under Section 3.2(c), no Borrowings are outstanding, the Borrower
shall deposit in the Cash Collateral Account an amount equal to the LC
Outstandings on such date. If, at any time no Event of Default has occurred
and is continuing and the cash on deposit in the Cash Collateral Account shall
exceed the LC Outstandings, then the Administrative Agent will repay and
reassign to the Borrower cash in an amount equal to such excess, and the Lien
of the Administrative Agent on such cash shall automatically terminate.

     (e)     Offset. If an Event of Default has occurred and is continuing, to the
extent lawful, upon notice to the Borrower, each Lender may exercise the Rights
of offset and banker’s lien against each and every account and other property,
or any interest therein, which the Borrower may now or hereafter have with, or
which is now or hereafter in the possession of, such Lender to the extent of
the full amount of the Obligations then matured and owed to that Lender.

     SECTION 12.2. Company Waivers.

     To the extent lawful, the Borrower waives all other presentment and demand
for payment, protest, notice of intention to accelerate, notice of acceleration
and notice of protest

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and nonpayment and agrees that its liability with respect to all or any
part of the Obligations is not affected by any renewal or extension in the time
of payment of all or any part of the Obligations, by any indulgence, or by any
release or change in any security for the payment of all or any part of the
Obligations.

     SECTION 12.3. Not in Control.

     Nothing in any Credit Documents gives or may be deemed to give to the
Administrative Agent, the LC Issuing Bank or any Lender the Right to exercise
control over any Company’s Real Property, other assets, affairs or management
or to preclude or interfere with any Company’s compliance with any Legal
Requirement or require any act or omission by any Company that may be harmful
to Persons or property. Any “Material Adverse Event” or other materiality or
substantiality qualifier of any representation, warranty, covenant, agreement
or other provision of any Credit Document is included for credit documentation
purposes only and does not imply or be deemed to mean that the Administrative
Agent, the LC Issuing Bank or any Lender acquiesces in any non-compliance by
any Company with any Legal Requirement, document, or otherwise or does not
expect the Companies to promptly, diligently and continuously carry out all
appropriate removal, remediation, compliance, closure or other activities
required or appropriate in accordance with all Environmental Laws. The
Administrative Agent’s, the LC Issuing Bank’s and the Lenders’ power is limited
to the Rights provided in the Credit Documents. All of those Rights exist
solely (and may be exercised in manner calculated by the Administrative Agent,
the LC Issuing Bank or the Lenders in their respective good faith business
judgment) to assure payment and performance of the Obligations.

     SECTION 12.4. Course of Dealing.

     The acceptance by the Administrative Agent, the LC Issuing Bank or the
Lenders of any partial payment on the Obligations is not a waiver of any Event
of Default then existing. No waiver by the Administrative Agent, the LC
Issuing Bank, the Required Lenders or the Lenders of any Event of Default is a
waiver of any other then-existing or subsequent Event of Default. No delay or
omission by the Administrative Agent, the LC Issuing Bank, the Required Lenders
or the Lenders in exercising any Right under the Credit Documents impairs that
Right or is a waiver thereof or any acquiescence therein, nor will any single
or partial exercise of any Right preclude other or further exercise thereof or
the exercise of any other Right under the Credit Documents or otherwise.

     SECTION 12.5. Cumulative Rights.

     All Rights available to the Administrative Agent, the LC Issuing Bank, the
Required Lenders and the Lenders under the Credit Documents are cumulative of
and in addition to all other Rights granted to the Administrative Agent, the LC
Issuing Bank, the Required Lenders and the Lenders at law or in equity, whether
or not the Obligations are due and payable and whether or not the
Administrative Agent, the LC Issuing Bank, the Required Lenders or the Lenders
have instituted any suit for collection, foreclosure or other action in
connection with the Credit Documents.

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     SECTION 12.6. Application of Proceeds.

     Any and all proceeds ever received by the Administrative Agent or the
Lenders from the exercise of any Rights pertaining to the Obligations shall be
applied to the Obligations according to Section 3.11.

     SECTION 12.7. Expenditures by Lenders.

     Any costs and reasonable expenses spent or incurred by the Administrative
Agent, the LC Issuing Bank or any Lender in the exercise of any Right under any
Credit Document shall be payable by the Borrower to the Administrative Agent
within ten Business Days after such Person made demand for payment of such
amount from Borrower, accompanied by copies of supporting invoices or
statements (if any), shall become part of the Obligations and shall bear
interest at the Default Rate from the date spent until the date repaid.

     SECTION 12.8. Limitation of Liability.

     Neither the Administrative Agent, the LC Issuing Bank nor any Lender shall
be liable to any Company for any amounts representing indirect, special or
consequential damages suffered by any Company, except where such amounts are
based substantially on willful misconduct by the Administrative Agent, the LC
Issuing Bank or such Lender, but then only to the extent any damages resulting
from such willful misconduct are covered by the Administrative Agent’s or that
the Lender’s fidelity bond or other insurance.

ARTICLE XIII

ADMINISTRATIVE AGENT AND LENDERS

     SECTION 13.1. The Administrative Agent.

     (a)     Appointment. Each of the LC Issuing Bank and each Lender appoints the
Administrative Agent (including, without limitation, each successor
Administrative Agent in accordance with this Section 13.1) as its nominee and
agent to act in its name and on its behalf (and the Administrative Agent and
each such successor accepts that appointment): (i) To act as its nominee and
on its behalf in and under all Credit Documents; (ii) to arrange the means
whereby its funds are to be made available to the Borrower under the Credit
Documents; (iii) to take any action that it properly requests under the Credit
Documents (subject to the concurrence of other Lenders as may be required under
the Credit Documents); (iv) to receive all documents and items to be furnished
to it under the Credit Documents; (v) to be the secured party, mortgagee,
beneficiary, recipient and similar party in respect of the Cash Collateral
Account and any other collateral for the benefit of the Lenders and the LC
Issuing Bank (at any time an Event of Default or Potential Default has occurred
and is continuing); (vi) to promptly distribute to it all material information,
requests, documents and items received from any Company under the Credit
Documents; (vii) to promptly distribute to it its ratable part of each payment
or prepayment (whether voluntary, as proceeds of collateral upon or after
foreclosure, as proceeds of insurance thereon or otherwise) in accordance with
the terms of the Credit Documents; and (viii) to deliver to the appropriate
Persons requests, demands, approvals and consents received from it. The
Administrative Agent, however, may not be required to take any action that
exposes

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it to personal liability or that is contrary to any Credit Document or
applicable Legal Requirement.

     (b)     Successor. The Administrative Agent may, subject (at any time no
Event of Default or Potential Default has occurred and is continuing) to the
Borrower’s prior written consent that may not be unreasonably withheld, assign
all of its Rights and obligations as the Administrative Agent under the Credit
Documents to any of its Affiliates, which Affiliate shall then be the successor
Administrative Agent under the Credit Documents. The Administrative Agent may
also, upon 30 days’ prior notice to the Borrower, voluntarily resign. If the
initial or any successor Administrative Agent ever ceases to be a party to this
Agreement or if the initial or any successor Administrative Agent ever resigns,
then the Required Lenders shall (which, if no Event of Default or Potential
Default has occurred and is continuing, is subject to the Borrower’s approval
that may not be unreasonably withheld) appoint the successor Administrative
Agent from among the Lenders (other than the resigning Administrative Agent).
If the Required Lenders fail to appoint a successor Administrative Agent within
30 days after the resigning Administrative Agent has given notice of
resignation, then the resigning Administrative Agent may, on behalf of the
Lenders, upon 30 days prior notice to the Borrower, appoint a successor
Administrative Agent, subject (at any time no Event of Default or Potential
Default has occurred and is continuing) to the Borrower’s prior written consent
that may not be unreasonably withheld, which must be a commercial bank having a
combined capital and surplus of at least $1,000,000,000 (as shown on its most
recently published statement of condition). Upon its acceptance of appointment
as successor Administrative Agent, the successor Administrative Agent shall
succeed to and become vested with all of the Rights of the prior Administrative
Agent, and the prior Administrative Agent shall be discharged from its duties
and obligations as Administrative Agent under the Credit Documents, and each
Lender shall execute the documents that any Lender, the resigning
Administrative Agent or the successor Administrative Agent reasonably requests
to reflect the change. After any Administrative Agent’s resignation as the
Administrative Agent under the Credit Documents, the provisions of this section
inure to its benefit as to any actions taken or not taken by it while it was
the Administrative Agent under the Credit Documents.

     (c)     Rights as Lender. The Administrative Agent, in its capacity as a
Lender, has the same Rights under the Credit Documents as any other Lender and
may exercise those Rights as if it were not acting as the Administrative Agent.
The Administrative Agent’s resignation or removal does not impair or otherwise
affect any Rights that it has or may have in its capacity as an individual
Lender. Each Lender, the LC Issuing Bank and the Borrower agree that the
Administrative Agent is not a fiduciary for the Lenders, the LC Issuing Bank or
the Borrower but is simply acting in the capacity described in this Agreement
to alleviate administrative burdens for the Borrower, the LC Issuing Bank and
the Lenders, that the Administrative Agent has no duties or responsibilities to
the Lenders, the LC Issuing Bank or the Borrower except those expressly set
forth in the Credit Documents, and that the Administrative Agent in its
capacity as a Lender has the same Rights as any other Lender.

     (d)     Other Activities. The Administrative Agent or any Lender may now or
in the future be engaged in one or more loan, letter of credit, leasing or
other financing transactions with the Borrower, act as trustee or depositary
for the Borrower or otherwise be engaged in other transactions with the
Borrower (collectively, the “other activities”) not the subject of the Credit

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Documents. Without limiting the Rights of the Lenders or the LC Issuing
Bank specifically set forth in the Credit Documents, neither the Administrative
Agent, the LC Issuing Bank nor any Lender is responsible to account to the
other Lenders or the LC Issuing Bank for those other activities, and neither
any Lender nor the LC Issuing Bank shall have any interest in any other
Lender’s or the LC Issuing Bank’s activities, any present or future guaranties
by or for the account of the Borrower that are not contemplated by or included
in the Credit Documents, any present or future offset exercised by the
Administrative Agent, the LC Issuing Bank or any Lender in respect of those
other activities, any present or future property taken as security for any of
those other activities or any property now or hereafter in the Administrative
Agent’s or any other Lender’s possession or control that may be or become
security for the obligations of the Borrower arising under the Credit Documents
by reason of the general description of indebtedness secured or of property
contained in any other agreements, documents or instruments related to any of
those other activities (but, if any payments in respect of those guaranties or
that property or the proceeds thereof is applied by the Administrative Agent,
the LC Issuing Bank or any Lender to reduce the Obligations, then each of the
LC Issuing Bank and each Lender is entitled to share in the application as
provided in the Credit Documents).

     SECTION 13.2. Expenses.

     Each Lender shall pay its Commitment Percentage of any reasonable expenses
(including court costs, reasonable attorneys’ fees and other costs of
collection) incurred by the Administrative Agent or in connection with any of
the Credit Documents if the Administrative Agent is not reimbursed from other
sources within 30 days after incurrence. Each Lender is entitled to receive
its Commitment Percentage of any reimbursement that it makes to the
Administrative Agent if the Administrative Agent is subsequently reimbursed
from other sources.

     SECTION 13.3. Proportionate Absorption of Losses.

     Except as otherwise provided in the Credit Documents, nothing in the
Credit Documents gives any Lender any advantage over any other Lender insofar
as the Obligations are concerned or relieves any Lender from ratably absorbing
any losses sustained with respect to the Obligations (except to the extent
unilateral actions or inactions by any Lender result in the Borrower or any
other obligor on the Obligations having any credit, allowance, setoff, defense
or counterclaim solely with respect to all or any part of that Lender’s part of
the Obligations).

     SECTION 13.4. Delegation of Duties; Reliance.

     The Lenders may perform any of their duties or exercise any of their
Rights under the Credit Documents by or through the Administrative Agent, and
the Lenders, the LC Issuing Bank and the Administrative Agent may perform any
of their duties or exercise any of their Rights under the Credit Documents by
or through their respective Representatives. The Administrative Agent, the LC
Issuing Bank, the Lenders and their respective Representatives (a) are entitled
to rely upon (and shall be protected in relying upon) any written or oral
statement believed by it or them to be genuine and correct and to have been
signed or made by the proper Person and, with respect to legal matters, upon
opinion of counsel selected by the Administrative Agent, the LC Issuing Bank or
that Lender (but nothing in this clause (a) permits the

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Administrative Agent to rely on (i) oral statements if a writing is
required by this Agreement or (ii) any other writing if a specific writing is
required by this Agreement), (b) are entitled to deem and treat each Lender as
the owner and holder of its portion of the Obligations for all purposes until
written notice of the assignment or transfer is given to and received by the
Administrative Agent (and any request, authorization, consent or approval of
any Lender is conclusive and binding on each subsequent holder, assignee or
transferee of or Participant in that Lender’s portion of the Obligations until
that notice is given and received), (c) are not deemed to have notice of the
occurrence of an Event of Default unless a responsible officer of the
Administrative Agent, who handles matters associated with the Credit Documents
and transactions thereunder, has actual knowledge or the Administrative Agent
has been notified by a Lender, the LC Issuing Bank or the Borrower, and (d) are
entitled to consult with legal counsel (including counsel for the Borrower),
independent accountants, and other experts selected by the Administrative Agent
and are not liable for any action taken or not taken in good faith by it in
accordance with the advice of counsel, accountants or experts.

     SECTION
13.5. Limitation of the Administrative Agent’s Liability.

     (a)     Exculpation. Neither the Administrative Agent nor any of its
Affiliates or Representatives will be liable to the LC Issuing Bank or any
Lender for any action taken or omitted to be taken by it or them under the
Credit Documents in good faith and believed by it to be within the discretion
or power conferred upon it or them by the Credit Documents or be responsible
for the consequences of any error of judgment (except for gross negligence or
willful misconduct), and neither the Administrative Agent nor any of its
Affiliates or Representatives has a fiduciary relationship with any Lender or
the LC Issuing Bank by virtue of the Credit Documents (but nothing in this
Agreement negates the obligation of the Administrative Agent to account for
funds received by it for the account of any Lender).

     (b)     Indemnity. Unless indemnified to its satisfaction against loss, cost,
liability and expense, the Administrative Agent may not be compelled to do any
act under the Credit Documents or to take any action toward the execution or
enforcement of the powers thereby created or to prosecute or defend any suit in
respect of the Credit Documents. If the Administrative Agent requests
instructions from the Lenders, the LC Issuing Bank or the Required Lenders, as
the case may be, with respect to any act or action in connection with any
Credit Document, the Administrative Agent is entitled to refrain (without
incurring any liability to any Person by so refraining) from that act or action
unless and until it has received instructions. In no event, however, may the
Administrative Agent or any of its Representatives be required to take any
action that it or they determine could incur for it or them criminal or onerous
civil liability. Without limiting the generality of the foregoing, neither the
LC Issuing Bank nor any Lender has any right of action against the
Administrative Agent as a result of the Administrative Agent’s acting or
refraining from acting under this Agreement in accordance with instructions of
the Required Lenders.

     (c)     Reliance. The Administrative Agent is not responsible to the LC
Issuing Bank or any Lender or any Participant for, and each of the LC Issuing
Bank and each Lender represents and warrants that it has not relied upon the
Administrative Agent in respect of, (i) the creditworthiness of any Company and
the risks involved to the LC Issuing Bank or such Lender, as the case may be,
(ii) the effectiveness, enforceability, genuineness, validity or the due

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execution of any Credit Document, (iii) any representation, warranty,
document, certificate, report or statement made therein or furnished thereunder
or in connection therewith, (iv) the adequacy of any collateral now or
hereafter securing the Obligations or the existence, priority or perfection of
any Lien now or hereafter granted or purported to be granted on the collateral
under any Credit Document, or (v) observation of or compliance with any of the
terms, covenants or conditions of any Credit Document on the part of the
General Partner or any Company. EACH LENDER AGREES TO INDEMNIFY THE
ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES AND HOLD THEM HARMLESS FROM AND
AGAINST (BUT LIMITED TO SUCH LENDER’S COMMITMENT PERCENTAGE OF) ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, REASONABLE EXPENSES AND REASONABLE DISBURSEMENTS OF ANY KIND OR
NATURE WHATSOEVER THAT MAY BE IMPOSED ON, ASSERTED AGAINST OR INCURRED BY THEM
IN ANY WAY RELATING TO OR ARISING OUT OF THE CREDIT DOCUMENTS OR ANY ACTION
TAKEN OR OMITTED BY THEM UNDER THE CREDIT DOCUMENTS IF THE ADMINISTRATIVE AGENT
AND ITS REPRESENTATIVES ARE NOT REIMBURSED FOR SUCH AMOUNTS BY ANY COMPANY.
ALTHOUGH THE ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES HAVE THE RIGHT TO BE
INDEMNIFIED UNDER THIS AGREEMENT BY THE LENDERS FOR ITS OR THEIR OWN ORDINARY
NEGLIGENCE, THE ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES DO NOT HAVE THE
RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR OWN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.

     SECTION 13.6. Event of Default.

     If an Event of Default has occurred and is continuing, the Lenders agree
to promptly confer in order that the Required Lenders or the Lenders, as the
case may be, may agree upon a course of action for the enforcement of the
Rights of the Lenders. The Administrative Agent is entitled to act or refrain
from taking any action (without incurring any liability to any Person for so
acting or refraining) unless and until it has received instructions from the
Required Lenders. In actions with respect to any Company’s property, the
Administrative Agent is acting for the ratable benefit of each Lender.

     SECTION 13.7. Limitation of Liability.

     No Lender or any Participant will incur any liability to any other Lender
or Participant except for acts or omissions in bad faith, and neither the
Administrative Agent nor any Lender or Participant will incur any liability to
any other Person for any act or omission of any other Lender or any
Participant.

     SECTION 13.8. Other Agents.

     SunTrust Robinson Humphrey Capital Markets, a division of SunTrust Capital
Markets, Inc., is named on the cover page as “Sole Lead Arranger” but does not,
in such capacity, and nor do the entities listed as Co-Syndication Agents or
Co-Documentation Agents, assume any responsibility or obligation under this
Agreement for syndication, documentation, servicing,

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enforcement or collection of any part of the Obligations, nor any other
duties, as agent for the LC Issuing Bank or the Lenders.

     SECTION 13.9. Relationship of Lenders.

     The Credit Documents do not create a partnership or joint venture among
the Administrative Agent, the LC Issuing Bank and the Lenders or among the
Lenders.

     SECTION 13.10. Benefits of Agreement.

     None of the provisions of this Article XIII inure to the benefit of any
Company or any other Person except the Administrative Agent, the LC Issuing
Bank and the Lenders. Therefore, no Company or any other Person is responsible
or liable for, entitled to rely upon or entitled to raise as a defense, in any
manner whatsoever, the failure of the Administrative Agent, the LC Issuing Bank
or any Lender to comply with these provisions.

ARTICLE XIV

MISCELLANEOUS

     SECTION 14.1. Nonbusiness Days.

     Any payment or action that is due under any Credit Document on a
non-Business Day may be delayed until the next succeeding Business Day (but
interest accrues on any payment until it is made). If, however, the payment
concerns a LIBOR Rate Borrowing and if the next succeeding Business Day is in
the next calendar month, then that payment must be made on the next preceding
Business Day.

     SECTION 14.2. Communications.

     Unless otherwise specified, any communication from one party to another
under any Credit Document must be in writing (which may be by fax) to be
effective and will be deemed to have been given (a) if by fax, when transmitted
to the appropriate fax number (which, without affecting the date when deemed
given, must be promptly confirmed by telephone) or (b) if by any other means,
when actually delivered; provided, further, that any such communication to a
Company from any Person that is not a Company shall be deemed made to that
Company only if it is sent to the Borrower or, if other than the Borrower, to
such Company in care of the Borrower. Until changed by notice under this
Agreement, the address, fax number and telephone number for the Borrower, the
LC Issuing Bank and the Administrative Agent are stated beside their respective
signatures to this Agreement and for each Lender are stated beside its name on
Schedule 2.

     SECTION 14.3. Form and Number.

     The form, substance and number of counterparts of each writing to be
furnished under this Agreement must be satisfactory to the Administrative Agent
and the Borrower.

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     SECTION
14.4. Exceptions.

     An exception to any Credit Document covenant or agreement does not permit
violation of any other Credit Document covenant or agreement.

     SECTION
14.5. Survival.

     All Credit Document provisions survive all closings and are not affected
by any investigation by any party.

     SECTION
14.6. Governing Law.

     Unless otherwise specified, each Credit Document shall be governed by, and
construed in accordance with, the law of the State of New York and the United
States of America.

     SECTION
14.7. Invalid Provisions.

     If any provision of a Credit Document is judicially determined to be
unenforceable, then all other provisions of it remain enforceable. If the
provision determined to be unenforceable is a material part of that Credit
Document, then, to the extent lawful, it shall be replaced by a
judicially-construed provision that is enforceable but otherwise as similar in
substance and content to the original provision as the context of it reasonably
allows.

     SECTION
14.8. Amendments, Supplements, Waivers, Consents and Conflicts.

     (a)     All Lenders. Any amendment or supplement to, or waiver or consent
under, any Credit Document that purports to accomplish any of the following
must be by a writing executed by the Borrower and executed (or approved in
writing, as the case may be) by all the Lenders: (i) extends the due date for,
decreases the amount or rate of calculation of or waives the late or
non-payment of, any scheduled payment or mandatory prepayment of principal or
interest of any of the Obligations or any fees payable ratably to the Lenders
under the Credit Documents, except, in each case, any adjustments or
reductions that are contemplated by any Credit Document; (ii) changes the
definition of “Commitment”, “Commitment Percentage”, “Default Percentage” or
“Required Lenders”, (iii) fully or partially releases or amends any Guaranty or
cash collateral delivered pursuant to Section 12.1(c), except, in each case, as
expressly provided by any Credit Document or as a result of a merger,
consolidation or dissolution expressly permitted in the Credit Documents; (v)
consents to any assignment by the Borrower under Section 14.10(a); or (vi)
changes this clause (a) or any other matter specifically requiring the consent
of all the Lenders under any Credit Document; provided further, that any
amendment or supplement to, or waiver or consent under, any Credit Document
that purports to increase or extend any part of any Lender’s Commitment must be
by a writing executed by the Borrower and executed (or approved in writing, as
the case may be) by such Lender. Notwithstanding anything contained herein to
the contrary, this Agreement may be amended and restated without the consent of
any Lender or the Administrative Agent if, upon giving effect to such amendment
and restatement, such Lender or the Administrative Agent, as the case may be,
shall no longer be a party to this Agreement (as so amended and restated) or
have any Commitment or other obligation hereunder and shall have been paid in
full all amounts payable hereunder to such lender or the Administrative Agent,
as the case may be.

59

 

     (b)     The Administrative Agent. Any amendment or supplement to, or waiver or
consent under, any Credit Document that purports to accomplish any of the
following must be by a writing executed by the Borrower and executed (or
approved in writing, as the case may be) by the Administrative Agent: (i)
extends the due date for, decreases the amount or rate of calculation of, or
waives the late or non-payment of, any fees payable to the Administrative Agent
under any Credit Document, except, in each case, any adjustments or reductions
that are contemplated by any Credit Document; (ii) increases the Administrative
Agent’s obligations beyond its agreements under any Credit Document; or (iii)
changes this clause (b) or any other matter specifically requiring the consent
of the Administrative Agent under any Credit Document.

     (c)     The LC Issuing Bank. Any amendment or supplement to, or waiver or
consent under, any Credit Document that purports to accomplish any of the
following must be in writing executed by the Borrower and executed (or approved
in writing, as the case may be) by the LC Issuing Bank: (i) extends the due
date for, decreases the amount or rate of calculation of, or waives the late or
non-payment of, any reimbursement obligation or fees payable to the LC Issuing
Bank under or in connection with any Credit Document, except, in each case, any
adjustments or reductions that are contemplated by any Credit Document; (ii)
increases the LC Issuing Bank’s obligations beyond its agreements under any
Credit Document; or (iii) changes this clause (c) or any other matter
specifically requiring the consent of the LC Issuing Bank under any Credit
Document.

     (d)     The Required Lenders. Except as specified above (i) the provisions of
this Agreement may be amended and supplemented, and waivers and consents under
it may be given, in writing executed by the Borrower, the Required Lenders and
the Administrative Agent, if applicable, and otherwise supplemented only by
documents delivered in accordance with the express terms of this Agreement, and
(ii) each other Credit Document may only be amended and supplemented, and
waivers and consents under it may be given, in a writing executed by the
parties to that Credit Document that is also executed or approved by the
Required Lenders and the Administrative Agent, if applicable, and otherwise
supplemented only by documents delivered in accordance with the express terms
of that other Credit Document.

     (e)     Waivers. No course of dealing or any failure or delay by the
Administrative Agent, the LC Issuing Bank, any Lender or any of their
respective Representatives with respect to exercising any Right of the
Administrative Agent, the LC Issuing Bank or any Lender under any Credit
Document operates as a waiver of that Right. A waiver must be in writing and
signed by the parties otherwise required by this Section 14.8 to be effective
and will be effective only in the specific instance and for the specific
purpose for which it is given.

     (f)     Conflicts. Although this Agreement and other Credit Documents may
contain additional and different terms and provisions, any conflict or
ambiguity between the express terms and provisions of this Agreement and
express terms and provisions in any other Credit Document is controlled by the
express terms and provisions of this Agreement.

60

 

     SECTION 14.9. Counterparts.

     Any Credit Document may be executed in a number of identical counterparts
(including, at the Administrative Agent’s discretion, counterparts or signature
pages executed and transmitted by fax) with the same effect as if all
signatories had signed the same document. All counterparts must be construed
together to constitute one and the same instrument. Certain parties to this
Agreement may execute multiple signature pages to this Agreement as well as one
or more complete counterparts of it, and the Borrower, the LC Issuing Bank and
the Administrative Agent are authorized to execute, where applicable, those
separate signature pages and insert them, along with signature pages of other
parties to this Agreement, into one or more complete counterparts of this
Agreement that contain signatures of all parties to it.

     SECTION
14.10. Parties.

     (a)     Parties and Beneficiaries. Each Credit Document binds and inures to
the parties to it and each of their respective successors and permitted
assigns. Only those Persons may rely upon or raise any defense about this
Agreement. No Company may assign or transfer any Rights or obligations under
any Credit Document without first obtaining the consent of all the Lenders and
the LC Issuing Bank, and any purported assignment or transfer without the
consent of all the Lenders and the LC Issuing Bank is void.

     (b)     Relationship of Parties. The relationship between (x) each of the LC
Issuing Bank and each Lender and (y) each Company is that of creditor/secured
party and obligor, respectively. Financial covenant and reporting provisions
in the Credit Documents are intended solely for the benefit of each of the LC
Issuing Bank and each Lender to protect its interest as a creditor/secured
party. Nothing in the Credit Documents may be construed as (i) permitting or
obligating the LC Issuing Bank or any Lender to act as a financial or business
advisor or consultant to any Company, (ii) permitting or obligating the LC
Issuing Bank or any Lender to control any Company or conduct its operations,
(iii) creating any fiduciary obligation of the LC Issuing Bank or any Lender to
any Company, or (iv) creating any joint venture, agency or other relationship
between the parties except as expressly specified in the Credit Documents.

     (c)     Participations. Any Lender may (subject to the provisions of this
section, in accordance with applicable Legal Requirement, in the ordinary
course of its business, at any time, and with notice to the Borrower) sell to
one or more Persons (each a “Participant”) participating interests in its
portion of the Obligations so long as the minimum amount of such participating
interest is $5,000,000. The selling Lender remains a “Lender” under the Credit
Documents, the Participant does not become a “Lender” under the Credit
Documents, and the selling Lender’s obligations under the Credit Documents
remain unchanged. The selling Lender remains solely responsible for the
performance of its obligations and remains the holder of its share of the
Borrowings for all purposes under the Credit Documents. The Borrower, the LC
Issuing Bank and the Administrative Agent shall continue to deal solely and
directly with the selling Lender in connection with that Lender’s Rights and
obligations under the Credit Documents, and each Lender must retain the sole
right and responsibility to enforce due obligations of the Companies.
Participants have no Rights under the Credit Documents except as provided in
the except clause of the last sentence of this Section 14.10(c). Subject to
the following, each Lender may obtain (on behalf of its Participants) the
benefits of Article 3 with

61

 

respect to all participations in its part of the Obligations outstanding
from time to time so long as the Borrower is not obligated to pay any amount in
excess of the amount that would be due to that Lender under Article 3
calculated as though no participations have been made. No Lender may sell any
participating interest under which the Participant has any Rights to approve
any amendment, modification or waiver of any Credit Document except as to
matters in Section 14.8(a)(i) and (ii).

     (d)     Assignments. Each Lender may make assignments to any Federal Reserve
Bank, provided that any related costs, fees and expenses incurred by such
Lender in connection with such assignment or the re-assignment back to it free
of any interests of the Federal Reserve Bank, shall be for the sole account of
Lender. Each Lender may also assign to one or more assignees (each an
“Assignee”) all or any part of its Rights and obligations under the Credit
Documents so long as (i) the assignor Lender and Assignee execute and deliver
to the Administrative Agent, the LC Issuing Bank and the Borrower for their
consent and acceptance (that may not be unreasonably withheld in any instance
and is not required by the Borrower if an Event of Default has occurred and is
continuing) an assignment and assumption agreement in substantially the form of
Exhibit E (an “Assignment”) and pay to the Administrative Agent a processing
fee of $1,000 (which payment obligation is the sole liability, joint and
several, of that Lender and Assignee), (ii) the assignment must be for a
minimum total Commitment of $5,000,000, and, if the assignor Lender retains any
Commitment, it must be a minimum total Commitment of $10,000,000, and (iii) the
conditions for that assignment set forth in the applicable Assignment are
satisfied. The Effective Date in each Assignment must (unless a shorter period
is agreed to by the Borrower and the Administrative Agent) be at least five
Business Days after it is executed and delivered by the assignor Lender and the
Assignee to the Administrative Agent and the Borrower for acceptance. Once
such Assignment is accepted by the Administrative Agent, the LC Issuing Bank
and the Borrower, and subject to all of the following occurring, then, on and
after the Effective Date stated in it (A) the Assignee automatically shall
become a party to this Agreement and, to the extent provided in that
Assignment, shall have the Rights and obligations of a Lender under the Credit
Documents, (B) in the case of an Assignment covering all of the remaining
portion of the assignor Lender’s Rights and obligations under the Credit
Documents, the assignor Lender shall cease to be a party to the Credit
Documents, (C) the Borrower shall execute and deliver to the assignor Lender
and the Assignee the appropriate Notes in accordance with this Agreement
following the transfer, (D) upon delivery of the Notes under clause (C) the
assignor Lender shall return to the Borrower all Notes previously delivered to
that Lender under this Agreement, and (E) Schedule 2 shall be automatically
amended to reflect the name, address, telecopy number and Commitment of the
Assignee and the remaining Commitment (if any) of the assignor Lender, and the
Administrative Agent shall prepare and circulate to the Borrower, the LC
Issuing Bank and the Lenders an amended Schedule 2 reflecting those changes.

Notwithstanding the foregoing, no Assignee may be recognized as a party to the
Credit Documents (and the assignor Lender shall continue to be treated for all
purposes as the party to the Credit Documents) with respect to the Rights and
obligations assigned to that Assignee until the actions described in clauses
(C) and (D) have occurred. The Obligation is registered on the books of the
Borrower as to both principal and any stated interest, and transfers of (as
opposed to participations in) principal of and interest on the Obligations may
be made only in accordance with this Section.

62

 

     SECTION 14.11. Venue, Service of Process and Jury Trial.

     THE BORROWER IN EACH CASE FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS,
IRREVOCABLY (A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS IN NEW YORK, (B) WAIVES, TO THE FULLEST EXTENT LAWFUL, ANY
OBJECTION THAT IT MAY NOW OR IN THE FUTURE HAVE TO THE LAYING OF VENUE OF ANY
LITIGATION ARISING OUT OF OR IN CONNECTION WITH ANY CREDIT DOCUMENT AND THE
OBLIGATIONS BROUGHT IN ANY STATE COURT IN THE CITY OF NEW YORK, NEW YORK OR IN
ANY UNITED STATES DISTRICT COURT IN THE STATE OF NEW YORK, (C) WAIVES ANY
CLAIMS THAT ANY LITIGATION BROUGHT IN ANY OF THE FOREGOING COURTS HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM, (D) CONSENTS TO THE SERVICE OF PROCESS OUT OF
ANY OF THOSE COURTS IN ANY LITIGATION BY THE MAILING OF COPIES OF THAT PROCESS
BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, BY HAND DELIVERY
OR BY DELIVERY BY A NATIONALLY-RECOGNIZED COURIER SERVICE, AND SERVICE SHALL BE
DEEMED COMPLETE UPON DELIVERY OF THE LEGAL PROCESS AT ITS ADDRESS FOR PURPOSES
OF THIS AGREEMENT, (E) AGREES THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY TO
ANY CREDIT DOCUMENT ARISING OUT OF OR IN CONNECTION WITH THE CREDIT DOCUMENTS
OR THE OBLIGATIONS MAY BE BROUGHT IN ONE OF THE FOREGOING COURTS, AND (F)
IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
ANY CREDIT DOCUMENT. The scope of each of the foregoing waivers is intended to
be all encompassing of any and all disputes that may be filed in any court and
that relate to the subject matter of this transaction, including, without
limitation, contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. THE BORROWER ACKNOWLEDGES THAT THESE WAIVERS
ARE A MATERIAL INDUCEMENT TO THE ADMINISTRATIVE AGENT’S, THE LC ISSUING BANK’S
AND EACH LENDER’S AGREEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT THE
ADMINISTRATIVE AGENT AND EACH LENDER HAS ALREADY RELIED ON THESE WAIVERS IN
ENTERING INTO THIS AGREEMENT, AND THAT ADMINISTRATIVE AGENT, THE LC ISSUING
BANK AND EACH LENDER WILL CONTINUE TO RELY ON EACH OF THESE WAIVERS IN RELATED
FUTURE DEALINGS. THE BORROWER FURTHER WARRANTS AND REPRESENTS THAT IT HAS
REVIEWED THESE WAIVERS WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND
VOLUNTARILY AGREES TO EACH WAIVER FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. The waivers in this section are irrevocable, meaning that they may not be
modified either orally or in writing, and these waivers apply to any future
renewals, extensions, amendments, modifications or replacements in respect of
the applicable Credit Document. In connection with any Litigation, this
Agreement may be filed as a written consent to a trial by the court.

63

 

     SECTION 14.12. Non-Recourse to the General Partner.

     Neither the General Partner nor any director, officer, employee,
stockholder, member, manager or agent of the General Partner shall have any
liability for any obligations of the Borrower or any other Company under this
Agreement or any other Credit Document or for any claim based on, in respect of
or by reason of, such obligations or their creation, including any liability
based upon or arising by operation of law as a result of, the status or
capacity of the General Partner as the “general partner” of the Borrower or any
other Company. By executing this Agreement, the Administrative Agent, the LC
Issuing Bank and each Lender expressly waives and releases all such liability.

     SECTION
14.13. Confidentiality.

The Administrative Agent, the LC Issuing Bank and each Lender agrees (on behalf
of itself and each of its Affiliates, and its and each of their respective
Representatives) to keep and maintain any non-public information supplied to it
by or on behalf of any Company which is identified as being confidential and
shall not use any such information for any purpose other than in connection
with the administration or enforcement of this transaction. However, nothing
herein shall limit the disclosure of any such information (a) to the extent
required by Legal Requirement, (b) to counsel of the Administrative Agent, the
LC Issuing Bank or any Lender in connection with the transactions provided for
in this Agreement, (c) to bank examiners, auditors and accountants, or (d) any
Assignee or Participant (or prospective Assignee or Participant) so long as
such Assignee or Participant (or prospective Assignee or Participant) first
enters into a confidentiality agreement with the Administrative Agent or such
Lender. Notwithstanding anything contained herein to the contrary, the parties
agree that this Agreement does not limit the ability of any party hereto (or
any employee, representative, or other agent of such party) to disclose to any
Person, without limitation of any kind, the tax treatment and tax structure of
the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to such party
relating to such tax treatment and tax structure; provided,
however, the foregoing is not intended to waive the attorney-client privilege or any other
privileges, including the tax advisor privilege under Section 7525 of the
Internal Revenue Code of 1986, as amended from time to time.

     SECTION
14.14. Entirety.

     THE CREDIT DOCUMENTS AND THE FEE LETTER REPRESENT THE FINAL AGREEMENT
AMONG THE BORROWER, THE LENDERS, THE LC ISSUING BANK AND THE ADMINISTRATIVE
AGENT WITH RESPECT TO SUBJECT MATTER SET FORTH THEREIN AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

64

 

1

     EXECUTED as of the date first stated in this Credit Agreement.

	 	 	 	 	 
	TEPPCO Partners, L.P.	 	TEPPCO
PARTNERS, L.P., as Borrower
	America Tower Bldg.	 	 	 	 
	2929 Allen Parkway, Suite 3200	 	
By:
	 	TEXAS EASTERN PRODUCTS
	Houston, TX 77019	 	 	 	PIPELINE COMPANY, LLC, as General
	Attn:	 	 	 	Partner
	 
	Phone: 713-759-3636	 	 	 	 
	Fax:      713-759-3957	 	
By:
	 	/s/ CHARLES H. LEONARD
	 	 	 	 	

	 	 	 	 	Charles H. Leonard
	 	 	 	 	Senior Vice President & Chief Financial

Officer
	 	 	 	 	 
	SunTrust Bank	 	SUNTRUST BANK, as Administrative Agent
	303 Peachtree Street, N.E.,
10th Floor	 	and Lender
	Atlanta, GA 30308	 		 	
	Attn:	 	
By:
	 	/s/ JAMES M. WARREN
	 	 	 	 	

	Phone: 404-588-7824	 	 	 	Name: James M. Warren
	Fax:     404-827-6270	 	 	 	Title: Director

 

 

	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION,

as Co-Syndication Agent
	 	 	 	 	 
	 	 	
By:
	 	/s/ RUSSELL CLINGMAN
	 	 	 	 	

	 	 	 	 	Name: Russell Clingman
	 	 	 	 	Title:   Director

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	BANK
ONE, NA, as Co-Syndication Agent
	 	 	 	 	 
	 	 	
By:
	 	/s/ JOSEPH GIAMPETRONI
	 	 	 	 	

	 	 	 	 	Name: Joseph Giampetroni
	 	 	 	 	Title:   Director

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	KEY
BANK, N.A., as Co-Documentation Agent
	 	 	 	 	 
	 	 	
By:
	 	/s/ KEVIN D. SMITH
	 	 	 	 	

	 	 	 	 	Name: Kevin D. Smith
	 	 	 	 	Title:   Vice President

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	BNP
PARIBAS, as Co-Documentation Agent
	 	 	 	 	 
	 	 	
By:
	 	/s/ J. ONISCHUK
	 	 	 	 	

	 	 	 	 	Name: J. Onischuk
	 	 	 	 	Title:   Director
	 	 	 	 	 
	 	 	
By:
	 	/s/ GREG SMOTHERS
	 	 	 	 	

	 	 	 	 	Name: Greg Smothers
	 	 	 	 	Title:   Vice President

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	THE ROYAL BANK OF SCOTLAND PLC
	 	 	 	 	 
	 	 	
By:
	 	/s/ KEVIN J. HOWARD
	 	 	 	 	

	 	 	 	 	Name: Kevin J. Howard
	 	 	 	 	Title:   Managing Director

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	THE BANK OF NEW YORK
	 	 	 	 	 
	 	 	
By:
	 	/s/ PETER W. KELLER
	 	 	 	 	

	 	 	 	 	Name: Peter W. Keller
	 	 	 	 	Title:   Vice President

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	CREDIT LYONNAIS NEW YORK BRANCH
	 	 	 	 	 
	 	 	
By:
	 	/s/ PHILLIPPE SOUSTRA
	 	 	 	 	

	 	 	 	 	Name: Phillippe Soustra
	 	 	 	 	Title:   Executive Vice President

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	UBS AG, CAYMAN ISLANDS BRANCH
	 	 	 	 	 
	 	 	
By:
	 	/s/ PATRICIA O’KICKI
	 	 	 	 	

	 	 	 	 	Name: Patricia O’Kicki
	 	 	 	 	Title:   Director
	 	 	 	 	 
	 	 	
By:
	 	/s/ WILFRED V. SAINT
	 	 	 	 	

	 	 	 	 	Name: Wilfred V. Saint
	 	 	 	 	Title:   Associate Director

            Banking Products Services US

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	ROYAL BANK OF CANADA
	 	 	 	 	 
	 	 	
By:
	 	/s/ J. OBERAIGNER
	 	 	 	 	

	 	 	 	 	Name: J. Oberaigner
	 	 	 	 	Title:   Senior Manager

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	NATIONAL AUSTRALIA BANK, LTD.
	 	 	 	 	 
	 	 	
By:
	 	/s/ MIKE LORUSSO
	 	 	 	 	

	 	 	 	 	Name: Mike Lorusso
	 	 	 	 	Title:   SVP

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	WELLS FARGO BANK TEXAS, NA
	 	 	 	 	 
	 	 	
By:
	 	/s/ RICHARD A. GOULD
	 	 	 	 	

	 	 	 	 	Name: Richard A. Gould
	 	 	 	 	Title:   Vice President

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	KBC BANK N.V.
	 	 	 	 	 
	 	 	
By:
	 	/s/ ROBERT SNAUFFER
	 	 	 	 	

	 	 	 	 	Name: Robert Snauffer
	 	 	 	 	Title:   First Vice President
	 	 	 	 	 
	 	 	
By:
	 	/s/ ERIC RASKIN
	 	 	 	 	

	 	 	 	 	Name: Eric Raskin
	 	 	 	 	Title:   Vice President

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	BANK OF COMMUNICATIONS, NEW YORK

BRANCH
	 	 	 	 	 
	 	 	
By:
	 	/s/ DE CAI LI
	 	 	 	 	

	 	 	 	 	Name: De Cai Li
	 	 	 	 	Title:   General Manager

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	COMMERCE BANK
	 	 	 	 	 
	 	 	
By:
	 	/s/ EDWARD P. TIETJEN
	 	 	 	 	

	 	 	 	 	Name: Edward P. Tietjen
	 	 	 	 	Title:   Senior Vice President
	 	 	 	 	 
	 	 	
By:
	 	/s/ WAYNE MILLER
	 	 	 	 	

	 	 	 	 	Name: Wayne Miller
	 	 	 	 	Title:   Vice President

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

	 	 	 	 	 
	 	 	BANK HAPOALIM B.M.
	 	 	 	 	 
	 	 	
By:
	 	/s/ HELEN H. GATESON
	 	 	 	 	

	 	 	 	 	Name: Helen H. Gateson
	 	 	 	 	Title:   Vice President
	 	 	 	 	 
	 	 	
By:
	 	/s/ LAURA ANNE RAFFA
	 	 	 	 	

	 	 	 	 	Name: Laura Anne Raffa
	 	 	 	 	Title:
  Senior Vice President and Corporate

            Manager

[SIGNATURE PAGE TO TEPPCO PARTNERS, L.P. CREDIT AGREEMENT]

 

 

1

SCHEDULE 2

LENDERS AND COMMITMENTS

	 	 	 	 	 
	             Lender	 	 	Commitment	 
	SunTrust Bank	 	 	
60,000,000.00	 
	303 Peachtree St. N.E.	 	 	 	 
	10th Floor	 	 	 	 
	Atlanta, GA 30308	 	 	 	 
	Attn:	 	 	 	 
	 	 	 	 	 
	Phone: 404-	 	 	 	 
	Fax:     404-	 	 	 	 
	 	 	 	 	 
	Wachovia Bank, N.A.	 	 	
55,000,000.00	 
	1001 Fannin Street	 	 	 	 
	Suite 2255	 	 	 	 
	Houston, TX 77002	 	 	 	 
	Attn:     Russell Clingman	 	 	 	 
	Phone:  713-346-2716	 	 	 	 
	Fax:      713-650-1071	 	 	 	 
	 	 	 	 	 
	Bank One, NA	 	 	
55,000,000.00	 
	Mail Code IL1-0362	 	 	 	 
	1 Bank One Plaza	 	 	 	 
	Chicago, IL 60670	 	 	 	 
	Attn:    Joseph Giampetroni	 	 	 	 
	            Vice President	 	 	 	 
	Phone: 312-732-1489	 	 	 	 
	Fax:     312-732-3055	 	 	 	 
	 	 	 	 	 
	Key Bank, N.A.	 	 	
55,000,000.00	 
	Mail Code WA-31-18-0512	 	 	 	 
	601 108th Avenue NE, 5th Floor	 	 	 	 
	Bellevue, WA 98004	 	 	 	 
	Attn:      Keven D. Smith	 	 	 	 
	              Vice President	 	 	 	 
	Phone:   425-709-4579	 	 	 	 
	Fax:       425-709-4587	 	 	 	 

 

 

	 	 	 	 	 
	                          Lender	 	 	Commitment	 
	BNP Paribas	 	 	
55,000,000.00	 
	1200 Smith Street, Suite 3100	 	 	 	 
	Houston, TX 77002	 	 	 	 
	Attn:    Leah E. Hughes	 	 	 	 
	            Assistant Vice President	 	 	 	 
	Phone: 713-982-1126	 	 	 	 
	Fax:     713-659-5305	 	 	 	 
	 	 	 	 	 
	The Royal Bank of Scotland plc	 	 	
55,000,000.00	 
	New York Branch	 	 	 	 
	65 East 55th Street,
21st Floor	 	 	 	 
	New York, NY 10022	 	 	 	 
	Attn:      Sheila Shaw	 	 	 	 
	Phone:   212-401-1406	 	 	 	 
	Fax:       212-401-1494	 	 	 	 
	 	 	 	 	 
	The Bank of New York	 	 	
40,000,000.00	 
	Oil & Gas Division	 	 	 	 
	One Wall Street	 	 	 	 
	New York, NY 10286	 	 	 	 
	Attn:       Peter W. Keller	 	 	 	 
	               Vice President	 	 	 	 
	Phone:    212-635-7861	 	 	 	 
	Fax:        212-635-7923	 	 	 	 
	 	 	 	 	 
	Credit Lyonnais New York Branch	 	 	
40,000,000.00	 
	1301 Avenue of the Americas	 	 	 	 
	New York, NY 10019-6022	 	 	 	 
	Attn:       Philippe Soustra	 	 	 	 
	               Executive Vice President	 	 	 	 
	Phone:    212-261-7000	 	 	 	 
	Fax:        212-459-3170	 	 	 	 

 

 

	 	 	 	 	 
	                          Lender	 	 	Commitment	 
	UBS AG, Cayman Islands Branch	 	 	
20,000,000.00	 
	677 Washington Boulevard	 	 	 	 
	Stamford, CT 06901	 	 	 	 
	Attn:    Christopher M. Aitkin	 	 	 	 
	Phone: 203-719-3845	 	 	 	 
	Fax:     203-719-3888	 	 	 	 
	 	 	 	 	 
	Royal Bank of Canada	 	 	
20,000,000.00	 
	(Royal Bank Financial Group)	 	 	 	 
	Global Bank - Debt Products	 	 	 	 
	2800 Post Oak Blvd.	 	 	 	 
	Houston, TX 77056	 	 	 	 
	Attn:    David McCluskey	 	 	 	 
	            Manager	 	 	 	 
	Phone: 713-403-5666	 	 	 	 
	Fax:     713-403-5624	 	 	 	 
	 	 	 	 	 
	National Australia Bank Ltd.	 	 	
20,000,000.00	 
	200 Park Avenue, 34th Floor	 	 	 	 
	New York, NY 10166	 	 	 	 
	Attn:    Mike Lorusso	 	 	 	 
	Phone: 212-916-9602	 	 	 	 
	Fax:     212-983-7360	 	 	 	 
	 	 	 	 	 
	Wells Fargo Bank Texas, NA	 	 	
20,000,000.00	 
	1000 Louisiana Street,
3rd Floor	 	 	 	 
	Houston, TX 77002	 	 	 	 
	Attn:    Richard Gould	 	 	 	 
	            Relationship Manager	 	 	 	 
	Phone: 713-319-1343	 	 	 	 
	Fax:     713-739-1087	 	 	 	 
	 	 	 	 	 
	KBC Bank N.V.	 	 	
15,000,000.00	 
	New York Branch	 	 	 	 
	125 West 55th Street	 	 	 	 
	New York, NY 10019	 	 	 	 
	Attn:    Patrick A. Janssens	 	 	 	 
	            Vice President	 	 	 	 
	Phone: 212-541-0714

            212-541-0784	 	 	 	 

 

 

	 	 	 	 	 
	                                           Lender	 	 	  Commitment	 
	Bank of Communications, New York Branch	 	 	
15,000,000.00	 
	One Exchange Plaza	 	 	 	 
	55 Broadway, 31st Floor	 	 	 	 
	New York, NY 10006	 	 	 	 
	Attn:    Anders Lai	 	 	 	 
	            Senior Vice President & Senior Manager	 	 	 	 
	Phone: 212-376-8030 ext. 120	 	 	 	 
	Fax:     212-376-8089	 	 	 	 
	 	 	 	 	 
	Commerce Bank	 	 	
15,000,000.00	 
	1600 Smith Street, Suite 4025	 	 	 	 
	Houston, TX 77002	 	 	 	 
	Attn:    Lance Ramesh	 	 	 	 
	Phone: 713-571-8010	 	 	 	 
	Fax:     713-571-7080	 	 	 	 
	 	 	 	 	 
	Bank Hapoalim B.M.	 	 	
10,000,000.00	 
	1177 Avenue of the Americas	 	 	 	 
	New York, NY 10036	 	 	 	 
	Attn:     Helen Gateson	 	 	 	 
	             Assistant Vice President	 	 	 	 
	Phone:  212-782-2161	 	 	 	 
	Fax:      212-782-2382	 	 	 	 
	 
	Total Commitments	 	 	
$550,000,000.00	 

 

 

SCHEDULE 5

CLOSING DOCUMENTS

Unless otherwise specified, all
documents are dated either June 27, 2003 (the
“Closing Date” ), or

a date no earlier than 30 days before the Closing Date (a “Current Date”).

	1.	 	CREDIT AGREEMENT (the “Credit Agreement”), dated as of June 27, 2003,
among TEPPCO PARTNERS, L.P., a Delaware limited partnership (the
“Borrower”), certain Lenders, SUNTRUST
BANK, as the Administrative Agent
and the LC Issuing Bank, Wachovia Bank, National Association and Bank One,
NA as Co-Syndication Agents and BNP Paribas and Key Bank, N.A. as
Co-Documentation Agents (the defined terms in which have the same meanings
when used in this schedule), accompanied by:

	 	 	 	 	 	 
	 	Schedule 2	 	
—
	 	Lenders and Commitments
	 	Schedule 5	 	
—
	 	Closing Documents
	 	Schedule 7.2	 	
—
	 	List of Companies and Significant Subsidiaries
	 	Schedule 7.8	 	
—
	 	Litigation
	 	Schedule 7.10	 	
—
	 	Environmental Matters
	 	Schedule 7.11	 	
—
	 	Employee Plan Matters
	 	Schedule 7.12	 	
—
	 	Existing Debt
	 	Schedule 7.13	 	
—
	 	Existing Liens
	 	Schedule 7.15	 	
—
	 	Affiliate Transactions
	 	Schedule 7.20	 	
—
	 	Restrictions on Distributions
	 	 	 	 	 	 
	 	Exhibit A	 	
—
	 	Form of Note
	 	Exhibit B	 	
—
	 	Form of Guaranty
	 	Exhibit C-1	 	
—
	 	Form of Borrowing Request
	 	Exhibit C-2	 	
—
	 	Form of Notice of Conversion
	 	Exhibit C-3	 	
—
	 	Form of Request for Issuance
	 	Exhibit C-4	 	
—
	 	Form of Compliance Certificate (Borrower)
	 	Exhibit D	 	
—
	 	Form of Opinion of Counsel
	 	Exhibit E	 	
—
	 	Form of Assignment and Assumption Agreement

	2.	 	NOTES, dated the Closing Date, executed by the Borrower, substantially in
the form of Exhibit A to the Credit Agreement, one payable to each Lender
in the amount stated beside its name below:

	 	 	 	 	 
	Lender	 	Amount
	
	 	

	SunTrust
	 	$	60,000,000.00	 
	Wachovia Bank, N.A.
	 	 	55,000,000.00	 
	Bank One, NA
	 	 	55,000,000.00	 
	Key Bank, N.A.
	 	 	55,000,000.00	 
	BNP Paribas
	 	 	55,000,000.00	 
	Royal Bank of Scotland plc
	 	 	55,000,000.00	 
	The Bank of New York
	 	 	40,000,000.00	 
	Credit Lyonnais, New York Branch
	 	 	40,000,000.00	 
	UBS AG, Cayman Islands Branch
	 	 	20,000,000.00	 
	Royal Bank of Canada
	 	 	20,000,000.00	 
	National Australia Bank Ltd.
	 	 	20,000,000.00	 
	Wells Fargo Bank Texas, N.A.
	 	 	20,000,000.00	 
	KBC Bank N.V.
	 	 	15,000,000.00	 
	Bank of Communications
	 	 	15,000,000.00	 
	Commerce Bank
	 	 	15,000,000.00	 
	Bank Hapoalim B.M.
	 	 	10,000,000.00	 

 

 

	3.	 	GUARANTY, executed by each of TCTM, TE Products, Midstream, Jonah Gas and
Val Verde, each dated as of the Closing Date, each in substantially the
form of Exhibit B to the Credit Agreement.
	 
	4.	 	COMPLIANCE CERTIFICATE, dated and prepared as of the initial Extension of
Credit (the “Funding Date”), executed by a Responsible Officer on behalf
of the Borrower in substantially the form of Exhibit C-4 to the Credit
Agreement.
	 
	5.	 	INSURANCE POLICIES OR BINDERS dated as of Current Dates and reflecting
the insurance coverage required by Section 8.9 of the Credit Agreement.
	 
	6.	 	PAYMENT OF ALL FEES payable to the Administrative Agent, its Affiliates,
the LC Issuing Bank and the Lenders pursuant to Section 4 of the Credit
Agreement and each Credit Document, on or before the Funding Date.
	 
	7.	 	PAYMENT OF LEGAL FEES and expenses incurred by counsel to Administrative
Agent through the Funding Date.
	 
	8.	 	CONSTITUENT DOCUMENTS of the Borrower and each Guarantor as of the
Closing Date certified by a Responsible Officer of the Borrower.
	 
	9.	 	CERTIFICATES OF APPROPRIATE GOVERNMENTAL AUTHORITIES of the following
jurisdictions, dated as of Current Dates, with respect to the existence,
authority to transact business and good standing of the following Persons:

	 	 	 
	Person	 	Jurisdiction(s)
	
	 	

	TCTM	 	
Delaware
	 	 	 
	 	 	
Texas
	 	 	 
	Midstream	 	
Colorado
	 	 	 
	 	 	
Delaware
	 	 	 
	 	 	
Texas
	 	 	 
	 	 	
Wyoming
	 	 	 
	TE Products	 	
Arkansas
	 	 	 
	 	 	
Delaware
	 	 	 
	 	 	
Illinois
	 	 	 
	 	 	
Indiana
	 	 	 
	 	 	
Kentucky
	 	 	 
	 	 	
Louisiana
	 	 	 
	 	 	
Missouri
	 	 	 
	 	 	
New York
	 	 	 
	 	 	
Ohio
	 	 	 
	 	 	
Pennsylvania

-2-

 

	 	 	 
	Person	 	Jurisdiction(s)
	
	 	

	 	 	
Rhode Island
	 	 	 
	 	 	
Texas
	 	 	 
	 	 	
West Virginia
	 	 	 
	TEPPCO GP	 	
Arkansas
	 	 	 
	 	 	
Delaware
	 	 	 
	 	 	
Illinois
	 	 	 
	 	 	
Indiana
	 	 	 
	 	 	
Kentucky
	 	 	 
	 	 	
Louisiana
	 	 	 
	 	 	
Missouri
	 	 	 
	 	 	
New York
	 	 	 
	 	 	
Pennsylvania
	 	 	 
	 	 	
Rhode Island
	 	 	 
	 	 	
Texas
	 	 	 
	 	 	
West Virginia
	 	 	 
	 	 	
Wyoming
	 	 	 
	Borrower	 	
Delaware
	 	 	 
	 	 	
Texas
	 	 	 
	Texas Eastern	 	
Delaware
	 	 	 
	Val Verde	 	
Delaware

	10.	 	OFFICERS’ CERTIFICATE dated as of the Closing Date, executed by the
President or a Vice President and by the Secretary of an Assistant
Secretary of Texas Eastern certifying (a) resolutions adopted by Texas
Eastern’s directors authorizing the executing and delivery of the Credit
Documents on behalf of Texas Eastern and the Borrower, as the case may be,
and (b) the incumbency and signatures of officers of Texas Eastern
authorized to execute and deliver any Credit Document.

	 	 	 	 	 
	Annex A	 	
—
	 	Resolutions of Texas Eastern’s’s Directors
	Annex B	 	
—
	 	Certificate of Formation of Texas Eastern
	Annex C	 	
—
	 	Limited Liability Company Agreement of Texas Eastern
	Annex D	 	
—
	 	Agreement of Limited Partnership of the Borrower

	11.	 	OFFICERS’ CERTIFICATE executed by the President or a Vice President and
by the Secretary or an Assistant Secretary of TEPPCO GP certifying (a)
resolutions adopted by TEPPCO GP’s directors authorizing the executing and
delivery of the Credit Documents on behalf of TEPPCO GP and each
Guarantor, and (b) the incumbency and signatures of officers of TEPPCO GP
authorized to execute and deliver any Credit Document.

-3-

 

	 	 	 	 	 
	Annex A	 	
—
	 	Resolutions of TEPPCO GP’s Directors
	Annex B	 	
—
	 	Certificate of Organization/Formation of TEPPCO GP, TE Products,
	 	 	 	 	Midstream, TCTM, TEPPCO NGL Pipeline, LLC and Val Verde
	Annex C	 	
—
	 	Partnership Agreement of each Guarantor
	Annex D	 	 	 	Limited Liability Company Agreement of TEPPCO NGL Pipeline, LLC

	12.	 	OPINION dated the Funding Date, of Fulbright & Jaworski L.L.P., as
counsel to Texas Eastern, the Borrower, TEPPCO GP and the Guarantors
(other than Jonah Gas), addressed to the Administrative Agent and the
Lenders, and in substantially the form of Exhibit D to the Credit
Agreement.
	 
	13.	 	COPIES of the Current Financials.
	 
	14.	 	EVIDENCE that the Existing Credit Agreement shall have been terminated
and all amounts thereunder shall have been paid in full.
	 
	15.	 	Such other documents and items as the Administrative Agent may reasonably
request.

-4-

 

SCHEDULE 7.2

COMPANIES AND NAMES

	 	 	 	 	 
	 	 	 	 	 	Qualified	 	 	Other Names	 	 	Name Change
	 	 	Jurisdiction	 	 	to do	 	 	Used in	 	 	in Last
	Company	 	of Formation	 	 	Business	 	 	Past 5 Years	 	 	4 Months	 	 	Owned By

 

 

SCHEDULE 7.8

LITIGATION

 

 

SCHEDULE 7.10

ENVIRONMENTAL MATTERS

 

 

SCHEDULE 7.11

EMPLOYEE PLAN MATTERS

 

 

SCHEDULE 7.12

EXISTING DEBT

 

 

SCHEDULE 7.13

EXISTING LIENS

 

 

SCHEDULE 7.15

AFFILIATE TRANSACTIONS

 

 

EXHIBIT A

FORM OF NOTE

	 	 	 
	$     	 	
[Date]

     FOR
VALUE RECEIVED, TEPPCO PARTNERS, L.P., a Delaware limited partnership
(the “Maker”), promises to pay to the order of           (the
“Payee”), the principal amount of
$                 , together with interest on the
unpaid amounts thereof from time to time outstanding.

     This note is a “Note” under the Credit Agreement, dated as of June 27,
2003 (as renewed, extended, amended, supplemented or restated, the “Credit
Agreement”), among the Maker, the Payee, certain other Lenders from time to
time, SunTrust Bank, as the Administrative Agent for the Lenders and as the LC
Issuing Bank, Wachovia Bank, National Association and Bank One, NA as
Co-Syndication Agents and BNP Paribas and Key Bank, N.A. as Co-Documentation
Agents. All of the terms defined in the Credit Agreement have the same
meanings when used, unless otherwise defined, in this note.

     This note incorporates by reference the principal and interest payment
terms in the Credit Agreement for this note, including, without limitation, the
final maturity date for this note, which is the Stated Termination Date.
Principal and interest are payable to the holder of this note by payment to the
Administrative Agent at its offices at 303 Peachtree Street, N.E., 10th Floor,
Atlanta, Georgia 30308 or at any other address of which the Administrative
Agent may notify the Maker in writing.

     This note also incorporates by reference all other provisions in the
Credit Agreement applicable to this note including provisions for disbursement
of principal, applicable interest rates before and after certain Events of
Default, voluntary and mandatory prepayments, acceleration of maturity,
exercise of Rights, payment of attorney’s fees, courts costs and other costs of
collection, certain waivers by the Maker and other obligors, assurances and
security, choice of New York and United States federal law, usury savings and
other matters applicable to the Credit Documents under the Credit Agreement.

	 	 	 	 	 	 	 
	 	 	TEPPCO PARTNERS, L.P., as the Maker
	 	 	 	 	 	 	 
	 	 	By	 	TEXAS EASTERN PRODUCTS PIPELINE
	 	 	 	 	COMPANY, LLC, as General Partner
	 	 	 	 	 	 	 
	 	 	 	 	By	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	Title:

 

 

EXHIBIT B

FORM OF GUARANTY

     THIS GUARANTY (this “Guaranty”) is executed as of [         ], by
[NAME OF GUARANTOR], a           (the “Guarantor”) and a subsidiary of
TEPPCO PARTNERS, L.P., a Delaware limited partnership (the “Borrower”), for the
benefit of SUNTRUST BANK (in its capacity as the Administrative Agent for the
lenders (the “Lenders”) now or in the future party to the Credit Agreement
described below, the “Administrative Agent”), the LC Issuing Bank (as defined
in the Credit Agreement) and the Lenders.

     The Borrower, the Administrative Agent, the LC Issuing Bank, the Lenders,
Wachovia Bank, National Association and Bank One, NA as Co-Syndication Agents
and BNP Paribas and Key Bank, N.A. as Co-Documentation Agents have executed the
Credit Agreement, dated as of June 27, 2003 (as renewed, extended, amended,
supplemented or restated, the “Credit Agreement”). The execution and delivery
of this Guaranty are conditions precedent to the obligations of the Lenders and
the LC Issuing Bank to make Extensions of Credit under the Credit Agreement.
All of the terms defined in the Credit Agreement have the same meanings when
used, unless otherwise defined, in this Guaranty.

     ACCORDINGLY, for adequate and sufficient consideration, and in order to
induce the Lenders and the LC Issuing Bank to make Extensions of Credit under
the Credit Agreement, the Guarantor hereby agrees as follows:

	 	1.	 	Guaranty.

		
	 	     (a) The Guarantor hereby guarantees (jointly and severally with any
other “Guarantor” under the Credit Agreement) to the Administrative
Agent, the LC Issuing Bank and the Lenders (collectively, the “Finance
Parties”) the full and punctual payment when due (whether at maturity, by
acceleration or otherwise), and in manner specified under the Credit
Documents, of all of the Obligations, including without limitation,
Obligations arising from any increase in the Commitments as may be
effected from time to time pursuant to the Credit Agreement. This
Guaranty is an absolute, unconditional and continuing guaranty of the
full and punctual payment and not of their collectibility only and is in
no way conditioned upon any other means of obtaining their payment.
Should the Borrower default in the payment of any of the Obligations, the
obligations of the Guarantor hereunder shall become immediately due and
payable to the Finance Parties. The obligations of the Guarantor under
this Guaranty (the “Guarantor Obligations”) are independent of the
Obligations, and a separate action or actions may be brought and
prosecuted against the Guarantor to enforce this Guaranty, irrespective
of whether any action is brought against the Borrower or any other
guarantor of the Obligations or whether the Borrower or any such
guarantor is joined in any such action or actions.
	 
	 	     (b) The Guarantor further agrees, as the principal obligor and not
as a guarantor only, to pay to the Finance Parties, on demand, all costs
and expenses (including court

 

 

		
		costs and reasonable legal expenses) incurred or expended by the
Finance Parties in connection with the enforcement of this Guaranty.

		
	 	     (c) The Guarantor hereby agrees to indemnify each Finance Party on
demand against any loss or liability suffered by such Finance Party if
any of the Obligations is or becomes, unenforceable, invalid or illegal.

     2.          Cumulative
Rights. If the Guarantor becomes liable for any
indebtedness owing by the Borrower to any Finance Party, other than under this
Guaranty, that liability may not be in any manner impaired or affected by this
Guaranty. The Rights of the Finance Parties under this Guaranty are cumulative
of any and all other Rights that any Finance Party may ever have against the
Guarantor. The exercise by Bank of any Right under this Guaranty or otherwise
does not preclude the concurrent or subsequent exercise of any other Right.

     3.          Limitation
on Liability. Anything in this Guaranty to the contrary
notwithstanding, the obligations of the Guarantor hereunder shall be limited to
a maximum aggregate amount equal to the greatest amount that would not render
the Guarantor’s obligations hereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any provisions of applicable state law (collectively, the “fraudulent
transfer laws”), in each case after giving effect to all other liabilities of
the Guarantor, contingent or otherwise, that are relevant under the fraudulent
transfer laws (specifically excluding, however, any liabilities of the
Guarantor (i) in respect of intercompany indebtedness to the Borrower or
Affiliates of the Borrower to the extent that such indebtedness would be
discharged in an amount equal to the amount paid by the Guarantor hereunder and
(ii) under any guaranty of senior unsecured indebtedness or Debt subordinated
in right of payment of the Obligations, which guaranty shall contain a
limitation as to maximum amount similar to that set forth in this Section,
pursuant to which the liability of the Guarantor hereunder is included in the
liabilities taken into account in determining such maximum amount) and after
giving effect as assets to the value (as determined under the applicable
provisions of the fraudulent transfer laws) of any rights to subrogation,
contribution, reimbursement, indemnity or similar rights of the Guarantor
pursuant to (A) applicable law or (B) any agreement providing for an equitable
allocation among the Guarantor and other Affiliates of the Borrower of
obligations arising under guarantees by such parties.

     4.          Subordination. All principal of and interest on all indebtedness,
liabilities and obligations of the Companies to the Guarantor (the
“Subordinated Debt”), whether direct, indirect, fixed, contingent, liquidated,
unliquidated, joint, several or joint and several, now or in the future
existing, due or to become due to the Guarantor, or held or to be held by the
Guarantor, whether created directly or acquired by assignment or otherwise, and
whether evidenced by written instrument or not, is expressly subordinated to
the full and final payment of the Guarantor Obligations (and the Guarantor
agrees not to accept any payment of any Subordinated Debt from the Companies)
during any period when any Event of Default or Potential Default has occurred
and is continuing. If the Guarantor receives any payment of any Subordinated
Debt in violation of the preceding subordination provision, then the Guarantor
shall hold that payment in trust for the Finance Parties and promptly turn it
over to the Administrative Agent, in the form received (with any necessary
endorsements), to be applied to the Guarantor Obligations.

B-2

 

     5.          Subrogation and Contribution. Until the Commitments have been
terminated and the Guarantor Obligations have been fully paid and performed (a)
the Guarantor may not assert, enforce or otherwise exercise any Right of
subrogation to any of the Rights or Liens of any Finance Party or any other
beneficiary against the Borrower or any other obligor on the Obligations or any
collateral or other security or any Right of recourse, reimbursement,
subrogation, contribution, indemnification, or similar Right against the
Borrower or any other obligor on the Obligations or any guarantor thereof, (b)
the Guarantor defers all of the foregoing Rights (whether they arise in equity,
under contract, by statute, under common law or otherwise), and (c) the
Guarantor defers the benefit of, and any Right to participate in, any
collateral or other security given to any Finance Party or to any other
beneficiary to secure payment of any part of the Obligations.

     6.          No
Release. The Guarantor’s obligations under this Guaranty shall not
be released, diminished, or impaired by the occurrence of any one or more of
the following events: (a) Any taking or accepting of any other security or
assurance for the Obligations; (b) any release, surrender, exchange,
subordination, impairment, or loss of any collateral securing the Obligations;
(c) any full or partial release of the liability of any other obligor on the
Obligations (other than as the result of payment on the Obligations); (d) the
modification of, or waiver of compliance with, any terms of any other Credit
Document; (e) any present or future insolvency, bankruptcy, or lack of
corporate, partnership or limited liability company power of any other obligor
at any time liable for the Obligations; (f) any increase of the Obligations and
any renewal, extension or rearrangement of the Obligations or any adjustment,
indulgence, forbearance or compromise that may be granted or given by any
Finance Party to any other obligor on the Obligations; (g) any neglect, delay,
omission, failure or refusal of any Finance Party to take or prosecute any
action in connection with the Obligations; (h) any failure of any Finance Party
to notify the Guarantor of any renewal, extension or assignment of any part of
the Obligations, or the release of any security or of any other action taken or
refrained from being taken by any Finance Party against the Borrower, or any
new agreement among the Finance Parties and the Borrower, it being understood
that no Finance Party is required to give the Guarantor notice of any kind
under any circumstances whatsoever with respect to or in connection with any
part of the Obligations, other than any notice specifically required to be
given to the Guarantor by applicable Legal Requirements or elsewhere in this
Guaranty; (i) the unenforceability of the Obligations against any other obligor
because they exceed the amount permitted by applicable Legal Requirements, the
act of creating the Obligations is ultra vires, the officers creating the
Obligations exceeded their authority or violated their fiduciary duties in
connection with the Obligations, or otherwise; or (j) any payment of any part
of the Obligations to any Finance Party is held to constitute a preference
under any Debtor Law or for any other reason any Finance Party is required to
refund that payment or make payment to someone else (and in each such instance
this Guaranty shall be reinstated in an amount equal to that payment).

     7.          Waivers. The Guarantor waives (to the extent lawful and until full
payment of the Guarantor Obligations) all defenses to the enforcement of this
Guaranty (and Rights that may be asserted as defenses to the enforcement of
this Guaranty) including, but not limited to (i) any Right to revoke this
Guaranty with respect to future indebtedness arising under the Credit
Agreement; (ii) any Right to require any Finance Party to do any of the
following before the Guarantor is obligated to pay any part of the Guarantor
Obligations or before any Finance Party may proceed against the Guarantor: (A)
sue or exhaust remedies against the Borrower and other

B-3

 

guarantors or obligors in respect of the Obligations, (B) sue on an
accrued right of action in respect of the Obligations or bring any other
action, exercise any other right or exhaust all other remedies, or (C) enforce
rights against the Borrower’s assets or the collateral pledged by the Borrower
to secure any part of the Obligations; (iii) any right relating to the timing,
manner or conduct of any Finance Party’s enforcement of rights against the
Borrower’s assets or the collateral pledged by the Borrower to secure any part
of the Obligations; (iv) if the Guarantor and the Borrower (or a third party)
have each pledged assets to secure any part of the Obligations or the
Guaranteed Obligations or the Guaranteed Obligations, any right to require any
Finance Party to proceed first against the other collateral before proceeding
against collateral pledged by the Guarantor; (v) notice that this Guaranty has
been accepted by any Finance Party and notice of any indebtedness to which this
Guaranty may apply; (vi) any right of the Guarantor to receive notice from any
Finance Party of changes that affect the creditworthiness of the Borrower; and
(vii) except for any notice specifically required by this Guaranty,
presentation, presentment, demand for payment, protest, notice of protest,
notice of dishonor or nonpayment of any indebtedness, notice of intent to
accelerate, notice of acceleration, notice of any suit or other action by any
Finance Party against the Borrower, the Guarantor or any other Person and any
notice to any party liable for the obligation that is the subject of the suit
or action.

     8.          Credit
Agreement Provisions. The Guarantor acknowledges that (a) the
Borrower has made certain representations and warranties in the Credit
Agreement with respect to the Guarantor and confirms that each such
representation and warranty is true and correct, with the same effect as set
forth herein, and (b) the Borrower has made certain covenants and agreements in
the Credit Agreement with respect to the Guarantor and agrees to promptly and
properly comply with or be bound by each of them, with the same effect as if
set forth herein.

     9.          Reliance
and Duty to Remain Informed. The Guarantor confirms that it
has executed and delivered this Guaranty after reviewing the terms and
conditions of the Credit Documents and all other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute
and deliver this Guaranty. The Guarantor confirms that it has made its own
independent investigation with respect to the Borrower’s creditworthiness and
is not executing and delivering this Guaranty in reliance on any representation
or warranty by any Finance Party as to that creditworthiness. The Guarantor
expressly assumes all responsibilities to remain informed of the financial
condition of the Borrower and any circumstances affecting the Borrower’s
ability to perform under the Credit Documents to which it is a party or any
collateral securing the Obligations.

     10.          No
Reduction. Subject to Section 3 of this Guaranty, the Guarantor
Obligations may not be reduced, discharged or released because or by reason of
any existing or future offset, claim or defense (except for the defense of
complete and final payment of the Guarantor Obligations) of the Borrower or any
other obligor against any Finance Party or against payment of the Guarantor
Obligations, whether that offset, claim or defense arises in connection with
the Guarantor Obligations or otherwise. Those claims and defenses include,
without limitation, failure of consideration, breach of warranty, fraud,
bankruptcy, incapacity/infancy, statute of limitations, lender liability,
accord and satisfaction, usury, forged signatures, mistake, impossibility,
frustration of purpose and unconscionability.

B-4

 

     11.          Communications. For purposes of Section 14.2 of the Credit Agreement,
the Guarantor’s address and fax number are the same as the Borrower.

     12.          Amendments, Etc. No amendment, waiver or discharge to or under this
Guaranty is valid unless it is in writing and is signed by the party against
whom it is sought to be enforced and is otherwise in conformity with the
requirements of Section 14.8 of the Credit Agreement.

     13.          ENTIRETY. THIS GUARANTY AND ANY OTHER CREDIT DOCUMENT TO WHICH THE
GUARANTOR IS A PARTY REPRESENT THE FINAL AGREEMENT AMONG THE GUARANTOR, THE
ADMINISTRATIVE AGENT, THE LENDERS AND THE LC ISSUING BANK WITH RESPECT TO THE
SUBJECT MATTER OF THIS GUARANTY AND ANY SUCH OTHER CREDIT DOCUMENT AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.

     14.          Administrative Agent and the Lenders and LC Issuing Bank. The
Administrative Agent may, without the joinder of any other Finance Party,
exercise any Rights in any Finance Party’s favor under or in connection with
this Guaranty. The Administrative Agent’s and other Finance Party’s Rights and
obligations vis-a-vis each other may be subject to one or more separate
agreements between those parties. However, the Guarantor is not required to
inquire about any such agreement or is subject to any terms of it unless the
Guarantor specifically joins it. Therefore neither the Guarantor nor its
successors or assigns is entitled to any benefits or provisions of any such
separate agreement or is entitled to rely upon or raise as a defense any
party’s failure or refusal to comply with the provisions of it.

     15.          Parties. This Guaranty benefits the Finance Parties and their
respective successors and permitted assigns and binds the Guarantor and their
successors and assigns. Upon appointment of any successor Administrative Agent
under, and pursuant to the terms of, the Credit Agreement, all of the Rights of
the Administrative Agent under this Guaranty automatically vest in such
successor Administrative Agent without any further act, deed, conveyance or
other formality other than that appointment. The Rights of the Administrative
Agent, the Lenders and the LC Issuing Bank under this Guaranty may be
transferred with any permitted assignment of the Obligations. The Credit
Agreement contains provisions governing assignments of the Obligations and of
Rights and obligations under this Guaranty.

     16.          Venue,
Service of Process, and Jury Trial. THE GUARANTOR, FOR ITSELF
AND ITS SUCCESSORS AND ASSIGNS, IRREVOCABLY (A) SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE STATE AND FEDERAL COURTS IN NEW YORK, (B) WAIVES, TO THE
FULLEST EXTENT LAWFUL, ANY OBJECTION THAT IT MAY NOW OR IN THE FUTURE HAVE TO
THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR IN CONNECTION WITH THIS
GUARANTY AND THE GUARANTEED OBLIGATION BROUGHT IN THE DISTRICT COURTS OF NEW
YORK COUNTY, NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, (C) WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY
OF THE FOREGOING

B-5

 

COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (D) CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THOSE COURTS IN ANY LITIGATION BY THE MAILING
OF COPIES OF THAT PROCESS BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE
PREPAID, BY HAND DELIVERY, OR BY DELIVERY BY A NATIONALLY-RECOGNIZED COURIER
SERVICE, AND SERVICE SHALL BE DEEMED COMPLETE UPON DELIVERY OF THE LEGAL
PROCESS AT ITS ADDRESS FOR PURPOSES OF THIS AGREEMENT, (E) AGREES THAT ANY
LEGAL PROCEEDING AGAINST ANY PARTY TO ANY CREDIT DOCUMENT ARISING OUT OF OR IN
CONNECTION WITH THE CREDIT DOCUMENTS OR THE OBLIGATION MAY BE BROUGHT IN ONE OF
THE FOREGOING COURTS, AND (F) IRREVOCABLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY LAW ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY CREDIT DOCUMENT. The scope of each of
the foregoing waivers is intended to be all encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter
of this transaction, including, without limitation, contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims.
THE GUARANTOR ACKNOWLEDGES THAT THESE WAIVERS ARE A MATERIAL INDUCEMENT TO EACH
FINANCE PARTY’S AGREEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH
FINANCE PARTY HAS ALREADY RELIED ON THESE WAIVERS IN ENTERING INTO THE CREDIT
AGREEMENT AND THAT EACH FINANCE PARTY WILL CONTINUE TO RELY ON EACH OF THESE
WAIVERS IN RELATED FUTURE DEALINGS. THE GUARANTOR FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THESE WAIVERS WITH ITS LEGAL COUNSEL, AND THAT
IT KNOWINGLY AND VOLUNTARILY AGREES TO EACH WAIVER FOLLOWING CONSULTATION WITH
LEGAL COUNSEL. The waivers in this paragraph are irrevocable, meaning that
they may not be modified either orally or in writing, and these waivers apply
to any future renewals, extensions, amendments, modifications, or replacements
in respect of this Guaranty. In connection with any Litigation, this Guaranty
may be filed as a written consent to a trial by the court.

     17.     Governing Law. This Guaranty shall be governed by, and construed in
accordance with, the law of the State of New York and the United States of
America.

B-6

 

     EXECUTED as of the date first stated in this Guaranty.

	 	 	 	 	 
	 	 	[NAME OF GUARANTOR]
	 	 	 	 	 
	 	 	
By	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:

     EXECUTED by the Administrative Agent solely in acknowledgment of Paragraph
15 above.

	 	 	 	 	 
	 	 	SUNTRUST BANK, as Administrative
	 	 	
Agent
	 	 	 	 	 
	 	 	
By	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:

 

 

EXHIBIT C-1

FORM OF BORROWING REQUEST

	 	 	 
	AGENT:           SunTrust Bank	 	
DATE:           ,

BORROWER: TEPPCO PARTNERS, L.P.

     This notice is delivered under Article 2 of the Credit Agreement, dated as
of June 27, 2003 (as renewed, extended, amended, supplemented and restated, the
“Credit Agreement”), among the Borrower, the Administrative Agent, the LC
Issuing Bank, certain lenders, Wachovia Bank, National Association and Bank
One, NA as Co-Syndication Agents and BNP Paribas and Key Bank, N.A. as
Co-Documentation Agents. Terms defined in the Credit Agreement have the same
meanings when used (unless otherwise defined) in this request.

     The Borrower requests a Borrowing under the Credit Agreement as follows:

	 	 	 
	Borrowing Date1	 	 

	 	 	

	Amount of Borrowing2	 	
$
	 	 	

	Type of Borrowing3	 	
 
	 	 	

	LIBOR Rate Borrowing, the Interest Period4	 	
months

     The Borrower certifies that on the date of this request and on the above
Borrowing Date (after giving effect to the requested Borrowing) (a) all of the
representations and warranties in the Credit Documents are and will be true and
correct in all material respects (unless they speak to a specific date or the
facts on which they are based have been changed by transactions contemplated or
expressly permitted (including as an express exception to the restrictions set
forth in Article IX of the Credit Agreement) by the Credit Agreement), (b) no
Material Adverse Event, Event of Default or Potential Default has or will have
occurred and is or will be continuing, and (c) the amount of the Borrowing will
not cause any of the limitations in Section 2.1 or 2.5 to be exceeded.

	 	 	 	 	 
	 	 	TEPPCO PARTNERS, L.P., the Borrower
	 	 	 	 	 
	 	 	
By
	 	      TEXAS EASTERN PRODUCTS PIPELINE
	 	 	 	 	      COMPANY, LLC, as General Partner
	 	 	 	 	 
	 	 	
By	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title5:

	1	 	Business Day of request for Base Rate Borrowing or at least second Business Day after request for LIBOR Rate Borrowing.
	 
	2	 	Not less than $1,000,000 or a $100,000 greater multiple for a Base Rate Borrowing and not less than $10,000,000 or a $1,000,000
greater multiple for a LIBOR Rate Borrowing.
	 
	3	 	LIBOR Rate Borrowing or Base Rate Borrowing.
	 
	4	 	1, 2, 3 or 6 months.
	 
	5	 	Must be a Responsible Officer.

 

 

EXHIBIT C-2

FORM OF NOTICE OF CONVERSION

	 	 	 
	AGENT:          SunTrust Bank	 	
DATE:                 ,

BORROWER: TEPPCO PARTNERS, L.P.

     This notice is delivered under Section 3.10 of the Credit Agreement, dated
as of June 27, 2003 (as renewed, extended, amended, supplemented and restated,
the “Credit Agreement”), among the Borrower, the Administrative Agent, the LC
Issuing Bank, certain lenders, Wachovia Bank, National Association and Bank
One, NA as Co-Syndication Agents and BNP Paribas and Key Bank, N.A.
as

Co-Documentation Agents. Terms defined in the Credit Agreement have the same
meanings when used (unless otherwise defined) in this notice.

     The
Borrower presently has a          6 Borrowing (the
“Existing Borrowing”) in the amount of $          , which, if a LIBOR
Rate Borrowing, has an Interest Period
of          7 ending
on          . On           (the “Conversion Date”), the Borrower shall partially
pay, continue in full or part as the same Type of Borrowing, or convert in full
or part to another Type of Borrowing and (if applicable) with the Interest
Period(s) designated below [check applicable boxes]:

	 	 	 	o     Amount to be paid, if any, $           .
	 
	 	 	 	o     Balance to be in the following Types of Borrowings with (if
applicable) the following Interest Period(s):

	 	 	 	 	 	 	 	 	 
	Type	 	Amount	 	Interest Period
	
	 	
	 	

	 
	 	$	 	 
	 
	 	$	 	 
	 
	 	$	 	 
	 
	 	$	 	 

     The Borrower certifies that on the date of this notice and on the
Conversion Date (and after giving effect to the above actions) (a) all of the
representations and warranties in the Credit Documents will be true and correct
in all material respects (unless they speak to a specific date or the facts on
which they are based have been changed by transactions contemplated or
expressly permitted (including as an express exception to the restrictions set
forth in Article IX of the Credit Agreement) by the Credit Agreement) and (b)
no Material Adverse Event, Default or Potential Default has or will have
occurred and is or will be continuing.

	1	 	Base Rate or LIBOR Rate.
	 
	2	 	1, 2, 3 or 6 months.

 

 

	 	 	 	 	 
	 	 	TEPPCO PARTNERS, L.P., as Borrower
	 	 	 	 	 
	 	 	
By
	 	      TEXAS EASTERN PRODUCTS PIPELINE

      COMPANY, LLC, as General Partner
	 	 	 	 	 
	 	 	
By	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title8:

	8	 	Must be a Responsible Officer.

C-2-2

 

EXHIBIT C-3

FORM OF REQUEST FOR ISSUANCE

	 	 	 
	AGENT:     SunTrust Bank	 	
DATE:           ,

BORROWER: TEPPCO PARTNERS, L.P.

     This notice is delivered under Section 2.5(a) of the Credit Agreement,
dated as of June 27, 2003 (as renewed, extended, amended, supplemented and
restated, the “Credit Agreement”), among the Borrower, the Administrative
Agent, the LC Issuing Bank, certain lenders, Wachovia Bank, National
Association and Bank One, NA as Co-Syndication Agents and BNP Paribas and Key
Bank, N.A. as Co-Documentation Agents. Terms defined in the Credit Agreement
have the same meanings when used (unless otherwise defined) in this request.

     The Borrower requests the [issuance][extension][modification][amendment]
of a Letter of Credit under the Credit Agreement as follows:

	 	 	 	 
	 	Date of [issuance][extension][modification][amendment]	 	 
	 	 	 	

	 	Stated amount	 	
$

	 	Name and Address of the beneficiary	 	 
	 	 	 	

	 
	 		 	

	 
	 		 	

	 	Drawing conditions	 
	 	 	

	 
	 	 	

	 	Stated Expiry Date	 
	 	 	 	

     The Borrower certifies that on the date of this request and on the date of
the Extension of Credit proposed above (after giving effect to the requested
Extension of Credit) (a) all of the representations and warranties in the
Credit Documents are and will be true and correct in all material respects
(unless they speak to a specific date or the facts on which they are based have
been changed by transactions contemplated or expressly permitted (including as
an express exception to the restrictions set forth in Article IX of the Credit
Agreement) by the Credit Agreement), (b) no Material Adverse Event, Event of
Default or Potential Default has or will have occurred and is or will be
continuing, and (c) the amount of the Letter of Credit will not cause any of
the limitations in Section 2.1 or 2.5 to be exceeded.

	 	 	 	 	 
	 	 	TEPPCO PARTNERS, L.P., as Borrower
	 	 	 	 	 
	 	 	
By
	 	      TEXAS EASTERN PRODUCTS PIPELINE

      COMPANY, LLC, as General Partner
	 	 	 	 	 
	 	 	
By	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title9:

	9	 	Must be a Responsible Officer.

 

 

EXHIBIT C-4

FORM OF COMPLIANCE CERTIFICATE

(Borrower)

     FOR THE FISCAL QUARTER/YEAR ENDED          (the “Subject Period”)

	 	 	 
	AGENT:          SunTrust Bank	 	
DATE:           ,

BORROWER: TEPPCO PARTNERS, L.P.

     This notice is delivered under Section 8.1 of the Credit Agreement, dated
as of June 27, 2003 (as renewed, extended, amended, supplemented or restated
the “Credit Agreement”), among the Borrower, the Administrative Agent, the LC
Issuing Bank, certain lenders, Wachovia Bank, National Association and Bank
One, NA as Co-Syndication Agents and BNP Paribas and Key Bank, N.A. as
Co-Documentation Agents. Terms defined in the Credit Agreement have the same
meanings when used (unless otherwise defined) in this certificate.

     In my capacity as a Responsible Officer, and on behalf of the Borrower, I
certify to the Administrative Agent, the LC Issuing Bank and each Lender on the
date of this certificate that (a) I am a Responsible Officer, (b) the
Borrower’s Financial Statements attached to this certificate were prepared in
accordance with GAAP and present fairly its consolidated and (if annual
Financials) consolidating financial condition and results of operation as of,
and for the fiscal quarter or year, as the case may be, ended on, the last day
of the Subject Period, (c) a review of the activities of the Companies during
the Subject Period has been made under my supervision with a view to
determining whether, during the Subject Period, the Companies performed and
complied with all of their obligations under the Credit Documents, and, during
the Subject Period, to my knowledge (i) the Companies performed, and complied
with all of their obligations under the Credit Documents (except for the
deviations, if any, described on a schedule attached to this certificate) in
all material respects and (ii) no Event of Default (nor any Potential Default)
has occurred which has not been cured or waived (except the Events of Default
or Potential Defaults, if any, described on the schedule attached to this
certificate), and (d) to my knowledge, the status of compliance by the
Companies with Article 10 of the Credit Agreement at the end of the Subject
Period is as described on the schedule attached to this certificate.

	 	 	 
	By	 	 
	 	 	

	 	 	
Name:
	 	 	
Title 10:

[COMPLIANCE CERTIFICATE NOT EFFECTIVE WITHOUT COMPLETED

SCHEDULE ATTACHED]

	10	 	Must be a Responsible Officer.

 

 

SCHEDULE TO COMPLIANCE CERTIFICATE

(For Fiscal Quarter/Year Ended                                )

     A.          Describe deviations from performance or compliance with covenants, if
any, pursuant to clause (c)(i) of the attached certificate. If none, so state.

     B.          Describe Potential Defaults and Events of Default, if any, pursuant to
clause (c)(ii) of the attached certificate. If none, so state.

     C.          Reflect compliance with Article 10 at the end of the subject period on
a consolidated basis pursuant to clause (d) of the attached certificate. The
following table is a short-hand reflection of that compliance and must be
completed fully in accordance with the express language of the Credit
Agreement.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Covenant	 	At End of Subject Period
	
	 	

	§ 10.1
	 	Minimum Consolidated Net Worth	 	 	 	 	 	 	 	 
	a.
	 	The Consolidated Net Worth of the Borrower as of the last day of the subject period	 	 	 	 	 	$	 	 
	b.
	 	75% of the Consolidated Net Worth of the Borrower as  of December 31, 2002	 	$	 	 	 	 	 	 
	c.
	 	50% of the Net Cash Proceeds of all Equity Events occurring after December 31, 2002	 	$	 	 	 	 	 	 
	d.
	 	Minimum --- Sum of Line (b) and Line (c)	 	 	 	 	 	$	 	 
	§10.2
	 	Maximum Consolidated Funded Debt/Pro Forma EBITDA Ratio	 	 	 	 	 	 	 	 
	a.
	 	Consolidated Funded Debt as of the last day of subject period	 	 	 	 	 	$	 	 
	b.
	 	Pro Forma EBITDA for the four consecutive fiscal quarters ending with last day of subject period	 	$	 	 	 	 	 	 
	c.
	 	Ratio of Line (a) to Line (b)	 	 	 	 	 	to 1.00
	d.
	 	Maximum -- 	 	 	 	 	 	4.75 to 1.00*
	§10.3
	 	Interest Coverage Ratio	 	 	 	 	 	 	 	 

C-4-2

 

SCHEDULE TO COMPLIANCE
CERTIFICATE (p.  2)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Covenant	 	At End of Subject Period
	
	 	

	a.
	 	EBITDA of the Borrower as of the last day of Subject Period	 	 	 	 	 	$	 	 
	b.
	 	Interest Expense for the four consecutive fiscal quarters ending with last day of Subject Period (excluding Interest Expense of Excluded Subsidiaries)	 	$	 	 	 	 	 	 
	c.
	 	Ratio of Line (a) to Line (b)	 	 	 	 	 	to 1.00
	d.
	 	Minimum	 	 	 	 	 	3.00 to 1.00

*     5.00 to 1.00 for two full fiscal quarterly periods immediately following the
consummation of each permitted Acquisition.

C-4-3

 

EXHIBIT D

OPINION OF COUNSEL

[TO BE COMPLETED ONCE FORM IS AGREED UPON]

 

 

EXHIBIT E

ASSIGNMENT AGREEMENT

     THIS AGREEMENT (the “Agreement”) is entered into as of     
     , between          (the “Assignor”) and          (the “Assignee”).

     TEPPCO
PARTNERS, L.P., a Delaware limited partnership (the
“Borrower”),
the Lenders, SUNTRUST BANK, as the Administrative Agent for the Lenders and as
the LC Issuing Bank, Wachovia Bank, National Association and Bank One, NA as
Co-Syndication Agents and BNP Paribas and Key Bank, N.A. as Co-Documentation
Agents, are parties to the Credit Agreement, dated as of June 27, 2003 (as
renewed, extended, amended, supplemented or restated, the “Credit Agreement”),
all of the defined terms in which have the same meanings when used, unless
otherwise defined, in this Agreement. This Agreement is entered into as
required by Section 14.10(d) of the Credit Agreement and is not effective
(unless otherwise provided in that Section) until consented to by the Borrower,
the Administrative Agent and the LC Issuing Bank, which consents may not under
the Credit Agreement be unreasonably withheld.

     ACCORDINGLY, for adequate and sufficient consideration, the Assignor and
the Assignee agree as follows:

     1.          Assignment. By this agreement, and effective as of          
(which must be at least five Business Days after the execution and delivery
of this agreement to both the Administrative Agent and, if required, the
Borrower, for consent, the “Effective Date”), the Assignor sells and assigns to
the Assignee (without recourse to the Assignor), and the Assignee purchases and
assumes from the Assignor [a           % interest of the Assignor’s Commitment] [and]
[a          % interest in the Assignor’s Borrowings] as of the Effective Date, and
all related rights and obligations under the Credit Agreement (the “Assigned
Interest”), which, if not equal to 100%, must be a percentage, when computed as
an aggregate dollar amount, that is at least $5,000,000.

     2.          Assignor
Provisions. The Assignor (a) represents and warrants to the
Assignee that, as of the Effective Date, the Assignor is the legal and
beneficial owner of the Assigned Interest, which is free and clear of any
adverse claim, and (b) makes no representation or warranty to the Assignee and
assumes no responsibility to the Assignee with respect to (i) any statements,
warranties, or representations made in or in connection with any Credit
Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency, or value of any Credit Document, or (iii) the financial condition
of the Borrower or any Company or the performance or observance by any Company
of any of its obligations under any Credit Document.

     3.          Assignee
Provisions. The Assignee (a) represents and warrants to the
Assignor, the Borrower, the Administrative Agent and the LC Issuing Bank that
the Assignee is legally authorized to enter into this Agreement, (b) confirms
that it has received a copy of the Credit

 

 

Agreement, copies of the Current Financials, and such other documents and
information as it deems appropriate to make its own credit analysis and
decision to enter into this Agreement, (c) agrees with Assignor, the Borrower,
the Administrative Agent and the LC Issuing Bank that the Assignee shall
(independently and without reliance upon the Administrative Agent, the
Assignor, or any other Lender and based on such documents and information as
the Assignee deems appropriate at the time) continue to make its own credit
decisions in taking or not taking action under the Credit Documents, (d)
appoints and authorizes the Administrative Agent to take such action as the
Administrative Agent on its behalf and to exercise such powers under the Credit
Documents as are delegated to the Administrative Agent by the terms of the
Credit Documents and all other reasonably-incidental powers, and (e) agrees
with the Assignor, the Borrower and the Administrative Agent that the Assignee
shall perform and comply with all provisions of the Credit Documents applicable
to the Lenders in accordance with their respective terms. If the Assignee is
not organized under the laws of the United States of America or one of its
states, it (i) represents and warrants to Assignor, the Administrative Agent,
and the Borrower that no Taxes are required to be withheld by Assignor, the
Administrative Agent, or the Borrower with respect to any payments to be made
to it in respect of the Obligation, and it has furnished to the Administrative
Agent and the Borrower two duly completed copies of either U.S. Internal
Revenue Service W-8BEN or W-8ECI or any other form acceptable to the
Administrative Agent that entitles the Assignee to exemption from U.S. federal
withholding Tax on all interest payments under the Credit Documents, (ii)
covenants to provide the Administrative Agent and the Borrower a new Form
W-8BEN or W-8ECI or other form acceptable to the Administrative Agent upon the
expiration or obsolescence of any previously delivered form according to law,
duly executed and completed by it, and to comply from time to time with all
laws with regard to the withholding Tax exemption, and (iii) agrees with the
Administrative Agent and the Borrower that, if any of the foregoing is not true
or the applicable forms are not provided, then the Administrative Agent and the
Borrower (without duplication) may deduct and withhold from interest payments
under the Credit Documents any United States federal-income Tax at the full
rate applicable under the IRC.

     4.          Credit
Agreement and Commitments. From and after the Effective Date
(a) the Assignee shall be a party to the Credit Agreement and (to the extent
provided in this Agreement) shall have the Rights and obligations of a Lender
under the Credit Documents and (b) the Assignor shall (to the extent provided
in this agreement) relinquish its Rights and be released from its obligations
under the Credit Documents. On the Effective Date, after giving effect to this
Agreement, but without giving effect to any other assignments or reductions in
the Commitments by the Borrower that have not yet become effective, the
Assignor’s total Commitment (which must be at least $10,000,000), and the
Assignee’s total Commitment will be $           and
$           , respectively.

     5.          Notes. The Assignor and the Assignee request the Borrower to issue new
Notes to the Assignor and the Assignee in the amounts of their respective
Commitments under Paragraph 4 above and otherwise issued in accordance with the
Credit Agreement. Upon

 

 

delivery of those Notes, the Assignor shall return to the Borrower all
Notes previously delivered to the Assignor under the Credit Agreement.

     6.          Payments
and Adjustments. From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignee. The Assignor and the Assignee shall make all appropriate
adjustments in payments for periods before the Effective Date by the
Administrative Agent or with respect to the making of this assignment directly
between themselves.

     7.          Conditions Precedent. Paragraphs 1 through 6 above are not effective
until (a) counterparts of this agreement are executed and delivered by the
Assignor and the Assignee to (and are executed in the spaces below by) the
Borrower and the Administrative Agent and (b) the Administrative Agent receives
from Assignor a $1,000 processing fee.

     8.          Communications. For purposes of Section 14.2 of the Credit Agreement,
the Assignee’s address, telephone number and telecopy number (until changed
under that Section) are beside its signature below.

     9.          Amendments, Etc. No amendment, waiver or discharge to or under this
Agreement is valid unless in a writing that is signed by the party against whom
it is sought to be enforced and is otherwise in conformity with the
requirements of the Credit Agreement.

     10.        ENTIRETY. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
ASSIGNOR AND THE ASSIGNEE ABOUT ITS SUBJECT MATTER AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
ASSIGNOR AND THE ASSIGNEE. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
ASSIGNOR AND THE ASSIGNEE.

     11.        Parties. This agreement binds and benefits the Assignor, the Assignee
and their respective successors and assigns that are permitted under the Credit
Agreement.

 

 

     EXECUTED as of the date first stated in this Agreement.

	 	 	 	 	 	 	 
	[ASSIGNOR]	 	[ASSIGNEE]
	 	 	 	 	 	 	 
	By	 	 	 	By	 	 
	 	

	 	 	

	 	
Name:
	 	 	Name:
	 	
Title:
	 	 	Title:
	 	
 
	 	 	 
	 	 	 	 	Address	 
	 	 	 	 	 	 	

	 	 	 	 	

	 	 	 	 	

	 	 	 	 	Phone	 
	 	 	 	 	 	

	 	 	 	 	Fax	 	 
	 	 	 	 	 	

     As of the Effective Date, the Borrower, the Administrative Agent and the
LC Issuing Bank consent to this Agreement and the transactions contemplated in
it.

	 	 	 	 	 	 	 
	TEPPCO PARTNERS, L.P., as Borrower	 	SUNTRUST BANK, as Administrative
	 	 	 	 	Agent
	 	 	 	 	 	 	 
	By	 	
TEXAS EASTERN PRODUCTS	 	 	 	 
	 	 	
PIPELINE COMPANY, LLC, as	 	 	 	 
	 	 	
General Partner
	 	By	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	Title:
	 	 	 	 	 	 	 
	 	 	
By	 	 	 	 
	 	 	

	 	 	 	 
	 	 	
       Name:	 	 	 	 
	 	 	
       Title:
	 	By	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	Title:
	 
	 	 	 	 	SUNTRUST BANK, as LC Issuing Bank
	 	 	 	 	 	 	 
	 	 	 	 	By	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}]]