Document:

Exhibit
10.1

 

AGREEMENT OF LEASE

 

by and between

 

ATRIUM BUILDING, LLC

 

and

 

TESSCO TECHNOLOGIES, INC.

 

(375 WEST PADONIA ROAD, SUITE 100)

 

 

AGREEMENT OF LEASE

ATRIUM BUILDING, LLC

TESSCO TECHNOLOGIES, INC.

 

TABLE OF CONTENTS

 

	
  1.

  	
  Definitions and
  Attachments

  
	
  2.

  	
  Demise

  
	
  3.

  	
  Commencement Date and
  Term

  
	
  4.

  	
  Intentionally
  Deleted

  
	
  5.

  	
  Use

  
	
  6.

  	
  Rent

  
	
  7.

  	
  Requirements of
  Applicable Law

  
	
  8.

  	
  Certificate of
  Occupancy

  
	
  9.

  	
  Contest-Statute,
  Ordinance, Etc.

  
	
  10.

  	
  Tenant’s
  Improvements

  
	
  11.

  	
  Repairs
  and Maintenance

  
	
  12.

  	
  Conduct
  on Premises

  
	
  13.

  	
  Insurance

  
	
  14.

  	
  Rules
  and Regulations

  
	
  15.

  	
  Mechanics’
  Liens

  
	
  16.

  	
  Tenant’s Failure to
  Repair

  
	
  17.

  	
  Property — Loss,
  Damage

  
	
  18.

  	
  Destruction
  — Fire or Other Casualty

  
	
  19.

  	
  Eminent
  Domain

  
	
  20.

  	
  Assignment

  
	
  21.

  	
  Default;
  Remedies; Bankruptcy of Tenant

  
	
  22.

  	
  Intentionally
  Deleted

  
	
  23.

  	
  Services
  and Utilities

  
	
  24.

  	
  Electric
  Current

  
	
  25.

  	
  Telephone and
  Telecommunications

  
	
  26.

  	
  Acceptance
  of Premises

  
	
  27.

  	
  Inability
  to Perform

  
	
  28.

  	
  No Waivers

  
	
  29.

  	
  Access
  to Premises and Change in Services

  
	
  30.

  	
  Estoppel
  Certificates

  
	
  31.

  	
  Subordination

  
	
  32.

  	
  Attornment

  
	
  33.

  	
  Notices

  
	
  34.

  	
  Intentionally
  Deleted

  
	
  35.

  	
  Tenant’s
  Space

  
	
  36.

  	
  Quiet
  Enjoyment

  
	
  37.

  	
  Vacation
  of Premises

  
	
  38.

  	
  Members’
  Liability

  
	
  39.

  	
  Separability

  
	
  40.

  	
  Indemnification

  
	
  41.

  	
  Captions

  
	
  42.

  	
  Brokers

  
	
  43.

  	
  Recordation

  
	
  44.

  	
  Successors
  and Assigns

  
	
  45.

  	
  Integration of Agreements

  
	
  46.

  	
  Hazardous Material;
  Indemnity

  
	
  47.

  	
  Americans With
  Disabilities Act

  
	
  48.

  	
  Several
  Liability

  
	
  49.

  	
  Financial
  Statements

  
	
  50.

  	
  Definition of Day
  and Days

  
	
  51.

  	
  Right
  of Termination

  
	
  52.

  	
  Generator

  
	
  53.

  	
  Telecommunications
  Equipment

  
	
  54.

  	
  Exterior
  Signage

  
	
  55.

  	
  Tenant’s
  Installation of Security System

  
	
  56.

  	
  Landlord
  Renovation

  

 

 

AGREEMENT OF LEASE

 

THIS AGREEMENT OF LEASE (this “Lease”)
made this
                     
day of
                     ,
2003 (the “Effective Date”), by
and between ATRIUM BUILDING, LLC (the
“Landlord”) and TESSCO TECHNOLOGIES, INC. (the “Tenant”), witnesseth that the parties
hereby agree as follows:

 

W
I T N E S S E T H:

 

THAT FOR AND IN CONSIDERATION of the mutual covenants and agreements
herein contained, the parties hereto do hereby covenant and agree as follows:

 

1.                                       Definitions
and Attachments.

 

1.1                                 Certain Defined Terms.

 

1.1.1                        “Building” means the office building located
at 375 West Padonia Road, Timonium, Maryland 21093, which is located within
Baltimore County, Maryland.

 

1.1.2                        “Rentable Area of the Building” means 110,328
rentable square feet, subject to adjustment in accordance with BOMA standards.

 

1.1.3                        “Premises” means that portion of the Building
located on the first and second floors designated as Suite 100 described on the
schedule attached hereto as Exhibit “A” and made a part hereof.

 

1.1.4                        “Rentable Area of the Premises” means 93,549
rentable square feet.

 

1.1.5                        “Term” means a period of three (3) years.

 

1.1.6                        “Annual Base Rent” means the amount set forth
on the following schedule:

 

	
  Rental
  Year

  	
   

  	
  Annual
  Base Rent

  	
   

  	
  Monthly
  Installments of Annual Base Rent

  	
   

  
	
  1

  	
   

  	
  $

  	
  1,276,008.36

  	
   

  	
  $

  	
  106,334.03

  	
   

  
	
  2

  	
   

  	
  $

  	
  1,314,288.60

  	
   

  	
  $

  	
  109,524.05

  	
   

  
	
  3

  	
   

  	
  $

  	
  1,353,717.24

  	
   

  	
  $

  	
  112,809.77

  	
   

  

 

1.1.7                        Intentionally Deleted.

 

1.1.8                        Intentionally Deleted.

 

1.1.9                        “Base Year Building Expenses” shall mean the
actual Building Expenses per rentable square foot incurred by Landlord for the
2002 calendar year.

 

1.1.10                  “Base Year Taxes” shall mean the actual Taxes
incurred by Landlord per rentable square foot for the 2002 calendar year.

 

1.1.11                  “Allowance” means the sum of $350,808.75. See
Section 35.

 

1.1.12                  “Broker” means Blue/Obrecht and KLNB.

 

1

 

1.2                                 Additional Defined Terms.

 

The following additional terms are defined in the places in this Lease
noted below:

 

	
  Term

  	
   

  	
  Section

  
	
  “ADA”

  	
   

  	
  47

  
	
  “Applicable Laws”

  	
   

  	
  7

  
	
  “Approved Plans and
  Specifications”

  	
   

  	
  35

  
	
  “Building Expenses”

  	
   

  	
  6.2.2

  
	
  “Commencement Date”

  	
   

  	
  3.1

  
	
  “Common Areas”

  	
   

  	
  6.2.4

  
	
  “Cost of Building Expenses
  Per Square Foot”

  	
   

  	
  6.4.1

  
	
  “Cost of Taxes Per Square
  Foot”

  	
   

  	
  6.3.1

  
	
  “Default Rate”

  	
   

  	
  6.6

  
	
  “Hazardous Material”

  	
   

  	
  46

  
	
  “HVAC”

  	
   

  	
  23

  
	
  “Lease Year”

  	
   

  	
  6.2.5

  
	
  “Mortgagee”

  	
   

  	
  31

  
	
  “Normal Business Hours”

  	
   

  	
  23

  
	
  “Property”

  	
   

  	
  6.2.1

  
	
  “Successor”

  	
   

  	
  32

  
	
  “Target Date”

  	
   

  	
  3.2

  
	
  “Taxes”

  	
   

  	
  6.2.3

  
	
  “Tenant Improvements”

  	
   

  	
  35

  

 

1.3                               Attachments.

 

The following documents are attached hereto, and such documents, as
well as all drawings and documents prepared pursuant thereto, shall be deemed
to be a part hereof:

 

	
  Exhibit “A”

  	
  -

  	
  Floor Plan

  
	
  Exhibit “B”

  	
  -

  	
  Rules and Regulations

  
	
  Exhibit “C”

  	
  -

  	
  Inventory of DB Property

  
	
  Exhibit “D”

  	
  -

  	
  Estoppel Certificate

  
	
  Exhibit “E”

  	
  -

  	
  Subordination, Attornment
  and Non-Disturbance Agreement

  
	
  Exhibit “F”

  	
  -

  	
  Building Expense
  Exclusions

  

 

2. 
                                 Demise.  Landlord hereby leases unto Tenant, and Tenant
does hereby rent from Landlord the Premises. 
In addition thereto, Tenant shall have the right to use, on a
non-exclusive basis, and in common with the other tenants of the Building the
Common Areas of the Building (as that term is defined in Section 6.2.4
hereof).

 

3. 
                                 Commencement
Date and Term.  This
Lease shall commence on the “Commencement Date” (as herein defined) and shall
be for the Term, plus the portion of a calendar month, if any, from the
Commencement Date to the last day of the calendar month in which such
Commencement Date occurs.  Landlord
acknowledges that Tenant is currently occupying the Premises pursuant to that
certain Sublease dated November 21, 2002 (the “DB Sublease”) by and between
Tenant, as subtenant, and Deutsche Bank Securities, Inc. (“DB”), as
sublandlord, for a term that expires on May 31, 2004, and it is the intention
of the parties hereunder that this Lease will commence at the expiration of the
DB Sublease.  As used in this
Lease, the term “Commencement Date” shall mean June 1, 2004.

 

4. 
                                 Intentionally
Deleted.

 

5.                                     Use.  Tenant covenants that it shall use and occupy
the Premises continuously during the Term of this Lease solely for general
office purposes and for in-house training or training for Tenant’s customers,
all of the foregoing in accordance with applicable zoning regulations and for
no other purpose; provided, however, that the ingress and egress of Tenant’s
customers shall not unreasonably interfere with the use and enjoyment by the
other tenants of the Building.  For
purposes of this Lease, the term “general office use” shall not include use as
a school, college, university or educational institution of any type, use for
any purpose which is not consistent with

 

2

 

the operation of the Building as a
first-class office building, use as an recruitment or temporary help service or
agency, or any use involving regular traffic by the general public. Tenant
recognizes that its occupancy of the Premises throughout the Term of this Lease
provides Landlord a significant benefit in the perception of the Building by
other prospective tenants who will negotiate with Landlord for space in the
Building in the future as well as the perception of other existing tenants who
will be negotiating with Landlord to renew their leases and remain in the
Building.  Landlord acknowledges that as
of the Effective Date, there currently exists a delicatessen within the
Premises pursuant to that certain Sublease dated July 31, 1987, as amended by
that First Amendment to Sublease dated April 30, 1997 (collectively, the “Deli
Sublease”), and Tenant shall have the right to retain such delicatessen subject
to the terms and conditions of the Deli Sublease.  Landlord further acknowledges that as of the Effective Date,
McGyver’s Catering (“McGyver’s”) operates a kiosk in the atrium of the
Building.  Tenant shall be responsible
to ensure that McGyver complies with all applicable laws and code regulations
related to food preparation and service and that McGyver’s use remains subject
at all times to the terms and conditions of this Lease.

 

6. 
                                 Rent.

 

6.1                                 Base Rent.  As rent for the Premises during each year of the Term, Tenant
shall pay to Landlord an Annual Base Rent, in equal monthly installments, in
advance on the first day of each calendar month during the Term, and without
deduction, setoff or demand in accordance with the schedule set forth in Section
1.1.6 above.  In addition to the Base Rent, if the Term should
commence on a day other than the first day of a calendar month, Tenant shall
pay to Landlord upon the Commencement Date, a sum equaling that percentage of
the monthly rent installment which equals the percentage of such calendar month
falling within the Term.

 

6.2                                 Definitions.  For the purposes hereof, the following definitions shall apply:

 

6.2.1  “Property” shall mean the Building, the land
upon which same is situated and all fixtures and equipment thereon or therein,
all commonly owned or shared appurtenances, including but not limited to, parking
areas, walkways, landscaping and utilities, whether located on the land upon
which the Building is situated or elsewhere.

 

6.2.2  “Building Expenses” shall be all those
expenses paid or incurred by Landlord in connection with the owning,
maintaining, operating and repairing of the Property or any part thereof, in a
manner deemed reasonable and appropriate by Landlord and shall include, without
limitation, the following:

 

6.2.2.1  All costs and
expenses of operating, repairing, lighting, cleaning, and insuring (including
liability for personal injury, death and property damage and workers’
compensation insurance covering personnel) the Property or any part thereof, as
well as all costs incurred in removing snow, ice and debris therefrom and of
policing and regulating traffic with respect thereto, and depreciation of all
machinery and equipment used therein or thereon, replacing or repairing of
pavement, parking areas, curbs, walkways, drainage, lighting facilities,
landscaping (including replanting and replacing flowers and other planting);

 

6.2.2.2  Electricity,
steam and fuel used in lighting, heating, ventilating and air conditioning and
all costs, charges, and expenses incurred by Landlord in connection with any
change of any company providing electricity service, including, without
limitation, maintenance, repair, installation and service costs associated
therewith;

 

6.2.2.3  Maintenance
and repair of mechanical and electrical equipment including heating,
ventilating and air conditioning equipment;

 

6.2.2.4  Window
cleaning and janitor service, including equipment, uniforms, and supplies and
sundries;

 

6.2.2.5  Maintenance of
elevators, stairways, rest rooms, lobbies, hallways and other Common Areas;

 

3

 

6.2.2.6  Repainting and
redecoration of all Common Areas;

 

6.2.2.7 Repair and
maintenance of the parking areas, including without limitation, the resurfacing
and striping of said areas;

 

6.2.2.8  Sales or use
taxes on supplies or services;

 

6.2.2.9  Management
fees, wages, salaries and compensation of all persons engaged in the
maintenance, operation or repair of the Property and the provision of amenities
to all tenants in the Property (including Landlord’s share of all payroll taxes
and the cost of an on-site or near-site office and segregated storage area for
Landlord’s parts, tools and supplies);

 

6.2.2.10  Legal,
accounting and engineering fees and expenses, except for those related to
disputes with tenants or which are a result of and/or are based on Landlord’s
negligence or other tortious conduct;

 

6.2.2.11 Costs and expenses
that may result from compliance with any governmental laws or regulations that
were not applicable to the Common Areas at the time same were originally
constructed; and

 

6.2.2.12  All other expenses which under generally
accepted accounting principles would be considered as an expense of
maintaining, operating, or repairing the Property.  Notwithstanding the foregoing, all expenses (whether or not such
expenses are enumerated on items 1 through 11 of this Section 6.2.2)
which would be considered capital in nature under generally accepted accounting
principles shall be included in “Building Expenses” if same are amortized in
accordance with generally accepted accounting principles, except the roof and
any structural defects, which shall be excluded in all instances except as set
forth in Section 56.

 

6.2.2.13  Notwithstanding anything to the contrary
contained herein, Building Expenses shall not include any items for which
Tenant is paying directly under the terms of this Lease, including, (a)
electricity charges within the Premises; (b) janitorial services within the
Premises; (c) HVAC maintenance charges within the Premises; and (d) electrical
equipment maintenance charges within the Premises.

 

6.2.2.14  All of the costs and expenses listed
on Exhibit “F” attached hereto shall be excluded from Building
Expenses.  To the extent there is any
conflict between this Lease and Exhibit F, the terms of Exhibit F shall
control.

 

6.2.3  “Taxes” shall
mean all real property taxes including currently due installments of
assessments, sewer rents, ad valorem charges, water rates, rents and charges,
front foot benefit charges, and all other governmental impositions in the
nature of any of the foregoing. 
Excluded from Taxes are (i) federal, state or local income taxes, (ii)
franchise, gift, transfer, excise, capital stock, estate or inheritance taxes,
and (iii) penalties or interest charged for late payment of Taxes.  If at
any time during the Term the method of taxation prevailing at the commencement
of the Term shall be altered so as to cause the whole or any part of the items
listed in the first sentence of this subparagraph to be levied, assessed or
imposed, wholly or partly as a capital levy, or otherwise, on the rents
received from the Building, wholly or partly in lieu of imposition of or in
addition to the increase of taxes in the nature of real estate taxes issued
against the Property, then the charge to Landlord resulting from such altered additional
method of taxation shall be deemed to be within the definition of “Taxes.”

 

6.2.4  “Common Areas” shall mean those areas and
facilities which may be from time to time furnished to the Building by Landlord
for the non-exclusive general common use of tenants and other occupants of the
Building, their officers, employees, and invitees, including (without
limitation) the hallways, stairs, parking facilities, washrooms, and elevators.

 

6.2.5  “Lease Year” shall mean the first twelve
(12) month period following the Commencement Date and each succeeding twelve
(12) month period thereafter up to the end of the Term; provided, however, that
if the Commencement Date shall occur on a day other than the first day of a
calendar month, then the first Lease Year shall include that portion of a
calendar

 

4

 

month in which the Commencement Date occurs
in addition to the first twelve (12) month period.

 

6.3                                 Rent Adjustments for Taxes.

 

6.3.1  On or before
March 31 of each Lease Year, Landlord shall total the Taxes and shall allocate
such Taxes to the Rentable Area of the Building in the following manner: 
Taxes for the foregoing calendar year shall be totaled and such total shall be
divided by the total rentable square feet in the Building thereby deriving the
“Cost of Taxes Per Square Foot” of rentable area.

 

6.3.2  In the event
that the Cost of Taxes Per Square Foot assessed for any calendar year which is
wholly or partly within the Term are greater than the Base Year Taxes, Tenant
shall pay to Landlord, as additional rent at the time such Taxes are due and
payable, the amount of such excess times the number of Rentable Area of the
Premises.  Any additional rent due Landlord under this Section shall be
due and payable within thirty (30) days after Landlord shall have submitted a
written statement to Tenant showing the amount due.  For Tenant’s
obligation for such additional rent at the beginning or end of the Lease, see Section
6.5.  Landlord may, in its discretion, make a reasonable estimate of
such additional rent with respect to Taxes, and require Tenant to pay each
month during such year 1/12 of such amount, at the time of payment of monthly
installments of Base Rent.  In such event,
Tenant shall pay, or Landlord shall refund or credit to Tenant’s account, any
underpayment or overpayment of such additional rent within thirty (30) days of
Landlord’s annual written statement of Taxes due.  Tenant shall have the right to examine, at Tenant’s sole expense,
Landlord’s records with respect to any such increases in additional rent;
provided, however, that unless Tenant shall have given Landlord written notice
of exception to any such statement within thirty (30) days after delivery
thereof, the same shall be conclusive and binding on Tenant.  No credit shall be given to Tenant if the
cost of Taxes Per Square Foot are less than the Base Year Taxes.

 

All reasonable expenses incurred by Landlord (including attorneys’,
appraisers’ and consultants’ fees, and other costs) in contesting any increase
in Taxes or any increase in the assessment of the Property shall be included as
an item of Taxes for the purpose of computing additional rent due hereunder.

 

6.4                                 Rent Adjustments for Building Expenses.

 

6.4.1  On or before
March 31 of each Lease Year, Landlord shall compute the Building Expenses for
such year and shall allocate such costs to the Rentable Area of the Building in
the following manner:  Building Expenses shall be totaled and such total
shall be divided by the total Rentable Area of the Building thereby deriving
the “Cost of Building Expenses Per Square Foot” of rentable area.  If Landlord incurs an extraordinary,
uncontrollable expense during the Base Year to determine Building Expenses (e.g.,
excessive snow or blizzard), such extraordinary expenses shall not be included
in the computation of Base Year Building Expenses, but such item shall be
included in Base Year Building Expenses in an amount equal to the average
amount of ordinary expenses for such item by averaging the three (3) prior
years’ expenses for such item.

 

6.4.2  In the event
that the cost of Building Expenses Per Square Foot of rentable area for any
year which is wholly or partly within the Term are greater than the Base Year
Building Expenses, Tenant shall pay to Landlord, as additional rent, the amount
of such excess times the number of square feet of Rentable Area of the
Premises, as set forth in Section 1 above.  If occupancy of the Building during any calendar year, including
the Base Year for Building Expenses, is less than ninety percent (90%), then
Building Expenses for that calendar year shall be “grossed up” to that amount
of Building Expenses that, using reasonable projections, would normally be
expected to be incurred during the calendar year in question if the Building
was ninety percent (90%) occupied during the applicable calendar year period,
as determined under generally accepted accounting principles; it being
understood that the written statement submitted to Tenant shall provide a
reasonably detailed description of how the Building Expenses were grossed up
and that only those component expenses that are affected by variations in
occupancy levels shall be grossed up.  Such additional rent shall be
computed on a

 

5

 

year-to-year basis.  Any such additional
rent shall be due within thirty (30) days after Landlord has submitted a
written statement to Tenant showing the amount due.  Landlord may, in its
discretion, make a reasonable estimate of such additional rent with respect to
any calendar year, and require Tenant to pay each month during such year 1/12
of such amount, at the time of payment of monthly installments of Base
Rent.  In such event, Tenant shall pay, or Landlord shall refund or credit
to Tenant’s account, any underpayment or overpayment of such additional rent
within thirty (30) days of Landlord’s written statement of actual Building
Expenses for the Calendar year.  Tenant, at Tenant’s sole expense, shall
have the right to examine Landlord’s records with respect to any such increases
in additional rent; provided, however, that unless Tenant shall have given
Landlord written notice of exception to any such statement within thirty (30)
days after delivery thereof, the same shall be conclusive and binding on
Tenant.  No credit shall be given to Tenant if the cost of Building
Expenses Per Square Foot are less than the Base Year Building Expenses.  Notwithstanding anything to the contrary
contained herein, Landlord shall use diligent efforts to keep Building Expenses
at reasonable amounts, while maintaining the Building as a first class office
building. Tenant acknowledges that with regard to certain Building Expenses,
some tenants may be paying various fees directly to the service provider
(including, without limitation, janitorial services and electricity charges),
in which event the computation of Building Expenses per rentable square foot
for such items shall be determined by using the total rentable square footage
of the Building reduced by the rentable square footage of the tenants who are
paying such fees directly to the service provider.

 

6.5                                 Additional Rent Payments.  Tenant’s obligation to pay any
additional rent accruing during the Term pursuant to Sections 6.3 and 6.4
hereof shall apply pro rata to the proportionate part of a calendar year as to
Taxes and Building Expenses, in which this Lease begins or ends, for the
portion of each such year during which this Lease is in effect.  Such
obligation to make payments of such additional rent shall survive the
expiration or sooner termination of the Term.

 

6.6                                 Payments.  All payments or installments of any rent hereunder and all sums
whatsoever due under this Lease (including but not limited to court costs and
attorneys’ fees) shall be deemed rent and shall be paid to Landlord at the
address designated by Landlord.  If any
amount of Annual Base Rent or additional rent shall not be paid when due and
remains unpaid for five (5) calendar days following receipt of written
notice  (provided, that, in no event
shall Landlord be required to give Tenant more than one (1) notice in any
twelve (12) month period), Tenant shall pay Landlord, without notice or demand,
a late charge equal to the greater of (i) $35.00 and (ii) five percent (5%) of
the such overdue amount to partially compensate Landlord for its administrative
costs in connection with such overdue payment; which administrative costs
Tenant expressly acknowledges are reasonable and do not constitute a
penalty.  In addition, such overdue
amounts shall bear interest at the rate of 15% per annum (but not more than the
maximum allowable legal rate applicable to Tenant) (the “Default Rate”) until
paid.  Additionally, if any of Tenant’s
checks for payment of rent or additional rent are returned to Landlord for insufficient
funds, Tenant shall pay to Landlord as additional rent the greater of (i)
$50.00 or (ii) the amount of actual charges incurred by Landlord, for each such
check returned for insufficient funds, and if two or more of Tenant’s checks in
payment of rent or additional rent due hereunder are returned for insufficient
funds in any calendar year, Landlord reserves the right upon ten (10) days
advance written notice to Tenant to thereafter require Tenant to pay all rent
and additional rent and other sums whatsoever due under this Lease in cash, by
money order or by certified check or cashier’s check.  If an attorney is
employed to enforce Landlord’s rights under this Lease, Tenant shall pay all
fees and expenses of such attorney whether or not legal proceedings are
instituted by Landlord.  Time is of the
essence in this Lease.

 

7.                                     Requirements
of Applicable Law.  Landlord warrants that on the Commencement Date, the Premises shall
comply with all applicable laws, ordinances, rules and regulations of governmental
authorities having jurisdiction over the Property (“Applicable Laws”).  Tenant, at its sole cost and expense, shall
thereafter comply promptly with all Applicable Laws now in force or which may
hereafter be in force, which impose any duty upon Landlord or Tenant with
respect to Tenant’s particular use, occupancy or alteration of the Premises or
any part thereof and for the prevention of fires; provided, however, that
Landlord and not Tenant shall correct all structural defects in the Building
necessary to comply with Applicable Laws, and make all repairs, changes or
alterations necessary because the Building was not constructed in compliance

 

6

 

with any of the Applicable Laws.

 

8. 
                                 Certificate
of Occupancy.  Tenant shall not use or occupy the Premises in violation of any
certificate of occupancy, permit, or other governmental consent issued for the
Building.  If any governmental authority, after the commencement of the
Term, shall contend or declare that the Premises is being used for a purpose
which is in violation of such certificate of occupancy, permit, or consent,
then Tenant shall, upon five (5) days’ notice from Landlord, immediately
discontinue such use of the Premises.  If thereafter the governmental
authority asserting such violation threatens, commences or continues criminal
or civil proceedings against Landlord for Tenant’s failure to discontinue such
use, in addition to any and all rights, privileges and remedies given to
Landlord under this Lease for default therein, Landlord shall have the right to
terminate this Lease forthwith.  Tenant shall indemnify and hold Landlord
harmless of and from any and all liability for any such violation or
violations.

 

9. 
                                 Contest-Statute, Ordinance, Etc.  Tenant may, after notice to Landlord,
by appropriate proceedings conducted promptly at Tenant’s own expense in
Tenant’s name and whenever necessary in Landlord’s name, contest in good faith
the validity or enforcement of any such statute, ordinance, law, order,
regulation or requirement and may similarly contest any assertion of violation
of any certificate of occupancy, permit, or any consent issued for the
Building.  Tenant may, pending such contest, defer compliance therewith
if, in the opinion of counsel for Landlord, such deferral shall not subject
either Landlord or the Premises or the Property (or any part thereof) to any
penalty, fine or forfeiture, and if Tenant shall post a bond with corporate
surety approved by Landlord sufficient, in Landlord’s opinion, fully to
indemnify Landlord from loss.

 

10.                             Tenant’s
Improvements.  Except to the extent that Landlord is providing the Allowance pursuant
to Section 35 of this Lease, Tenant shall make such improvements to the
Premises as it may deem necessary at its sole cost and expense.  Tenant
shall not make any alterations, decorations, installations, additions or
improvements to the Premises, including but not limited to, the Tenant
Improvements (as defined herein), the installation of any fixtures, amenities,
equipment, appliances, or other apparatus, without Landlord’s prior written
consent, which consent shall not be unreasonably withheld or delayed, and then
only by contractors or mechanics employed or approved by Landlord, which
approval shall not be unreasonable withheld or delayed.  Notwithstanding
the foregoing, Tenant shall be permitted to make decorative or non-structural
alterations within the Premises costing less than $50,000 without the necessity
of Landlord’s prior consent, but in accordance with all other terms and
conditions of this Section 10 and only upon prior written notice to
Landlord thereof.  All such work,
alterations, decorations, installations, additions or improvements shall be
done at Tenant’s sole expense, other than the Allowance which shall be provided
by Landlord for the Tenant Improvements, and at such times and in such manner
as Landlord may from time to time designate. 
Landlord’s consent to and/or approval of Tenant’s plans and specifications
for the aforesaid improvements shall create no responsibility or liability on
the part of Landlord for their completeness, design sufficiency, or compliance
with all laws, rules and regulations of governmental agencies or
authorities. All alterations, decorations, installations, additions or
improvements made by either of the parties hereto upon the Premises, except
movable office furniture put in at the expense of Tenant and other items as
mutually agreed upon in writing, shall be the property of Landlord and shall
remain upon and be surrendered with the Premises at the termination of this
Lease without molestation or injury. 
Upon request by Landlord, such request given at the time Landlord
provides consent under this Section 10, Tenant, at Tenant’s expense,
shall remove any and all special improvements to the Premises or Common Areas
made by or on behalf of Tenant, including, without limitation, supplemental
HVAC and raised flooring. If Tenant fails to remove any such items, Landlord
shall have the right, but not the obligation, to remove and dispose of such
items, and restore the Premises accordingly and Tenant shall reimburse Landlord
for the costs of such removal, disposal and restoration within thirty (30) days
after receipt of an invoice therefore, together with interest at the Default
Rate, which shall accrue from the date the costs were incurred by Landlord.
Notwithstanding the foregoing, Tenant shall have the right to remove all trade
fixtures, if owned by Tenant, at the termination of this Lease, provided Tenant
repairs any damage caused by such removal and returns the Premises in the
condition required by Section 11.4 of this Lease.

 

7

 

The parties acknowledge that DB will leave certain property in the
Premises at the expiration of the DB Sublease, including the existing
furniture, raised flooring, wiring, emergency generator and corresponding
underground fuel storage tank and a vault (the “DB Property”), all as more
particularly shown on Exhibit “C,” attached hereto and made a part hereof.  The DB Property may be used by Tenant
during the Term, at no cost to Tenant, but shall be the property of Landlord
and shall remain upon and be surrendered with the Premises at the termination
of this Lease without molestation or injury. 
Landlord makes no representations or warranties as to the condition of
the DB Property.

 

11. 
                           Repairs
and Maintenance.

 

11.1                           Tenant’s Care of the Premises and Building. 
During the Term Tenant shall:

 

(i)                                     keep the Premises, mechanical systems,
electrical systems, plumbing facilities, fixtures, appurtenances and
improvements, to the extent all of the foregoing are within the Premises, in
good order and condition;

 

(ii)                                  make repairs and replacements to the Premises
required because of Tenant’s misuse or primary negligence, except to the extent
that the repairs or replacements are covered by Landlord’s insurance as
required hereunder;

 

(iii)                               maintain,
repair and replace the heating, ventilating and air conditioning system
(“HVAC”) within and serving the Premises;

 

(iv)                              repair and replace special equipment or
decorative treatments installed by or at Tenant’s request and that serve the
Premises only, except to the extent the repairs or replacements are needed
because of Landlord’s misuse or primary negligence, and are not covered by
Tenant’s insurance as required hereunder;

 

(v)                                 pay for all damage to the Building, its
fixtures and appurtenances, as well as all damages sustained by Tenant or
occupants of the Building due to any waste, misuse or neglect of the Premises,
its fixtures and appurtenances by Tenant, except to the extent that the repair
of such damage is covered by Landlord’s insurance as required hereunder to the
extent that Landlord actually receives proceeds therefrom;

 

(vi)                              enter into a
regular maintenance contract for janitorial services, including, but not
limited to, trash removal, on a daily basis, such trash to be deposited in a
dumpster in the Common Areas to be provided by Landlord; and

 

(vii)                           not commit waste.

 

If Tenant fails to perform any of the aforementioned
services and does not cure such deficiency within three (3) days after written notice from
Landlord, Landlord shall have the right to perform such service(s) and Tenant
shall reimburse Landlord for the costs incurred by Landlord for such services,
as additional rent, together with interest at the Default Rate.

 

In addition Tenant shall not
place a load upon any floor of the Premises exceeding the floor load per square
foot area which such floor was designed to carry and which may be allowed under
Applicable Laws.  Landlord reserves the
right to prescribe the weight and position of all heavy equipment brought onto
the Premises and prescribe any reinforcing required under the circumstances,
all such reinforcing to be at Tenant’s expense.

 

Notwithstanding
anything herein to the contrary, Landlord shall: (i) procure a maintenance
contract for the HVAC system that is currently installed and serving the
Premises and Tenant shall reimburse Landlord for the costs of such contract,
such amounts due and owing on a quarterly basis within thirty (30) days
following receipt of an invoice from Landlord; 
(ii) maintain, at Tenant’s sole cost and expense, the mechanical
systems, electrical systems and plumbing facilities currently installed and
serving the Premises, such amounts due and owing by Tenant within thirty (30)
days following receipt of an invoice from Landlord and (iii) repair and/or
replace the HVAC system referenced in subsection (iiii) above, at Tenant’s sole
cost and expense, such amounts due and owing by Tenant within thirty (30) days
following receipt of an 

 

8

 

invoice from Landlord.

 

The parties acknowledge
that the fire suppression systems, the air handling equipment, the Liebert UPS
equipment and the Liebert PDU equipment (collectively, the “DB Equipment”),
requires periodic preventive maintenance. 
Within sixty (60) days prior to the expiration of the Term, Landlord
shall engage a third party contractor to evaluate the DB Equipment.  In the event any of the DB Equipment is not
in good order and condition as determined by the third party contractor, Tenant
shall either (i) repair the applicable DB Equipment prior to the expiration of
the Term or (ii) remove the applicable DB Equipment at the expiration of the
Term.

 

11.2                           Landlord’s Repairs. 
Except for the repairs and replacements that Tenant is required to make
pursuant to Section 11.1 above, Landlord shall make all other
repairs and replacements to the Premises, Common Areas and Building (including
Building fixtures and equipment) as shall be reasonably deemed necessary to
maintain the Building in a condition comparable to other first class suburban
office buildings in the Baltimore-Washington corridor area.  This maintenance shall include the roof,
foundation, exterior walls, interior structural walls, all structural
components, and all systems such as mechanical, electrical, multi-tenant HVAC,
and plumbing.  The costs associated with
such repairs shall be deemed a part of Building Expenses; provided, however,
that costs of all of such repairs which would be considered capital in nature
under generally accepted accounting principles shall be paid by Landlord.  There shall be no allowance to Tenant for a
diminution of rental value, no abatement of rent, and no liability on the part
of Landlord by reason of inconvenience, annoyance or injury to business arising
from Landlord, Tenant or others making any repairs or performing maintenance as
provided for herein.

 

11.3                           Time for Repairs. 
Repairs or replacements required pursuant to Section 11.1 and 11.2
above shall be made within a reasonable time (depending on the nature of the
repair or replacement needed - generally no more than fifteen (15) days) after
receiving notice or having actual knowledge of the need for a repair or
replacement.

 

11.4                           Surrender of the Premises. 
Upon the termination of this Lease, without the need for prior notice
from Landlord, Tenant shall surrender the Premises to Landlord in the same
broom clean condition that the Premises were in on the Commencement Date except
for:

 

(i)                                     ordinary wear and tear;

 

(ii)                                  damage by the elements, fire, and other
casualty unless Tenant would be required to repair under the provisions of this
Lease;

 

(iii)                               damage arising from any cause not required to
be repaired or replaced by Tenant; and

 

(iv)                              alterations as permitted by this Lease unless
consent was conditioned on their removal.

 

On surrender Tenant shall remove from the Premises its personal
property, trade fixtures and any alterations required to be removed pursuant to
the terms of this Lease and repair any damage to the Premises caused by this
removal.  Any items not removed by
Tenant as required above shall be considered abandoned.  Landlord may dispose of abandoned items as
Landlord chooses and bill Tenant for the cost of their disposal.

 

12. 
                           Conduct on
Premises.  Tenant shall not do, or permit anything to be done in the Premises, or
bring or keep anything therein which shall, in any way, increase the rate of
fire insurance on the Building, or invalidate or conflict with the fire
insurance policies on the Building, fixtures or on property kept therein, or
obstruct or interfere with the rights of Landlord or of other tenants, or in
any other way injure or annoy Landlord or the other tenants, or subject
Landlord to any liability for injury to persons or damage to property, or
interfere with the good order of the Building, or conflict with Applicable
Laws, or the Maryland Fire Underwriters Rating Bureau.  Tenant agrees that any increase of fire insurance
premiums on the Building or contents caused by

 

9

 

the occupancy of Tenant and any expense or
cost incurred in consequence of negligence or carelessness or the willful
action of Tenant, Tenant’s employees, agents, servants, or invitees shall, as
they accrue be added to the rent heretofore reserved and be paid as a part
thereof; and Landlord shall have all the rights and remedies for the collection
of same as are conferred upon Landlord for the collection of rent provided to
be paid pursuant to the terms of this Lease.

 

13. 
                           Insurance.

 

13.1                           Tenant’s Insurance. 
Tenant shall keep in force at its own expense, so long as this Lease
remains in effect, (a) public liability insurance, including insurance against
assumed or contractual liability under this Lease, with respect to the
Premises, to afford protection with limits, per person and for each occurrence,
of not less than Two Million Dollars ($2,000,000), combined single limit, with
respect to personal injury and death and property damage, such insurance to
provide for only a reasonable deductible, (b) all-risk property and casualty
insurance, including theft, written at replacement cost value and with
replacement cost endorsement, covering all of Tenant’s personal property in the
Premises and all improvements and installed in the Premises by or on behalf of
Tenant whether pursuant to the terms of Section 35, Section 10,
or otherwise, such insurance to provide for only a reasonable deductible, (c)
if, and to the extent, required by law, workmen’s compensation or similar
insurance offering statutory coverage and containing statutory limits, (d)
insurance of all plate and other interior glass in the Premises for and in the
name of Landlord, and (e) business interruption insurance in an amount
sufficient to reimburse Tenant for loss of earnings attributable to prevention
of access to the Building or the Premises for a period of at least twelve (12)
months.  Such policies shall be
maintained in companies and in form reasonably acceptable to Landlord and shall
be written as primary policy coverage and not contributing with, or in excess
of, any coverage which Landlord shall carry.  Tenant shall deposit the
policy or policies of such required insurance or certificates thereof with
Landlord prior to the Commencement Date, which policies shall name Landlord or
its designee and, at the request of Landlord, its mortgagees, as additional
insured and shall also contain a provision stating that such policy or policies
shall not be canceled except after thirty (30) days’ written notice to Landlord
or its designees.  All such policies of insurance shall be effective as of
the date Tenant occupies the Premises and shall be maintained in force at all
times during the Term of this Lease and all other times during which Tenant
shall occupy the Premises. Any insurance required of Tenant hereunder may
be furnished by Tenant under a blanket policy carried by it, provided that such
blanket policy shall contain an endorsement that names Landlord as an
additional insured, specifically references the Premises, and guarantees a
minimum limit available for the Premises equal to or greater than the insurance
amounts required under this Article.

 

In addition to the foregoing insurance coverage, Tenant shall require
any contractor retained by it to perform work on the Premises to carry and
maintain, at no expense to Landlord, during such times as contractor is working
in the Premises, a non-deductible (i) comprehensive general liability insurance
policy, including, but not limited to, contractor’s liability coverage,
contractual liability coverage, completed operations coverage, broad form
property damage endorsement and contractor’s protective liability coverage, to
afford protection with limits per person and for each occurrence, of not less
than Two Hundred Thousand Dollars ($200,000.00), combined single limit, with
respect to personal injury and death and property damage, such insurance to
provide for no deductible, and (ii) workmen’s compensation insurance or similar
insurance in form and amounts as required by law.

 

In the event of damage to or destruction of the Premises and the
termination of this Lease by Landlord pursuant to Section 18 herein,
Tenant agrees that it shall pay Landlord all of its insurance proceeds relating
to improvements made in the Premises by or on behalf of Tenant whether pursuant
to the terms of Section 35, Section 10, or otherwise.  If
Tenant fails to comply with its covenants made in this Section, if such
insurance would terminate or if Landlord has reason to believe such insurance
is about to be terminated, Landlord may at its option cause such insurance as
it in its sole judgment deems necessary to be issued, and in such event Tenant
agrees to pay promptly upon Landlord’s demand, as additional rent the premiums
for such insurance.

 

13.2                           Landlord’s Insurance. 
Landlord shall keep in force at its own expense (a)

 

10

 

contractual
and comprehensive general liability insurance, including public liability and
property damage, with a minimum combined single limit of liability of Two
Million Dollars ($2,000,000.00) for personal injuries or death of persons
occurring in or about the Building and Premises, and (b) all-risk property and
casualty insurance written at replacement cost value covering the Building and
all of Landlord’s improvements in and about same.

 

13.3                           Waiver of Subrogation. 
Each party hereto waives claims arising in any manner in its favor and
against the other party and agrees that neither party hereto shall be liable to
the other party or to any insurance company (by way of subrogation or
otherwise) insuring the other party for any loss or damage to the Building, the
Premises or other tangible property, or any resulting loss of income, or losses
under worker’s compensation laws and benefits, or against liability on or about
the Building, even though such loss or damage might have been occasioned by the
negligence of such party, its agents or employees if any such loss or damage is
covered by insurance benefiting the party suffering such loss or damage as was
required to be covered by insurance carried pursuant to this Lease.  Landlord shall cause each insurance policy
carried by it insuring against liability on or about the Building or insuring
the Premises and the Building or income resulting therefrom against loss by
fire or any of the casualties covered by the all-risk insurance carried by it
hereunder to be written in such a manner as to provide that the insurer waives
all right of recovery by way of subrogation against Tenant in connection with
any loss or damage covered by such policies.  Tenant shall cause each
insurance policy carried by it insuring against liability or insuring the
Premises (including the contents thereof and Tenant’s Improvements installed
therein by Tenant or on its behalf) against loss by fire or any of the
casualties covered by the all-risk insurance required hereunder to be written
in such a manner as to provide that the insurer waives all right of recovery by
way of subrogation against Landlord in connection with any loss or damage
covered by such policies.

 

14. 
                           Rules and
Regulations.  Tenant shall be bound by the rules
and regulations set forth on the schedule attached hereto as Exhibit “B”
and made a part hereof.  Landlord shall have the right, from time to time,
to issue additional or amended rules and regulations regarding the use of the
Building, so long as the rules shall be reasonable and non-discriminatory
between tenants and shall not materially or adversely affect Tenant’s use of
the Premises.   When so issued the same
shall be considered a part of this Lease and Tenant covenants that the
additional or amended rules and regulations shall likewise be faithfully
observed by Tenant, the employees of Tenant and all persons invited by Tenant
into the Building, provided, that the additional or amended rules are made
applicable to all office tenants similarly situated as Tenant.  Landlord
shall not be liable to Tenant for the violation of any of the rules and
regulations, or the breach of any covenant or condition in any lease, by any
other tenant in the Building.

 

15. 
                           Mechanics’
Liens.  Tenant shall not do or suffer to be done any act, matter or thing
whereby Tenant’s interest in the Premises, or any part thereof, may be
encumbered by any mechanics’ lien.  Tenant shall discharge or bond off,
within ten (10) days after the date of filing, any mechanics’ liens filed
against Tenant’s interest in the Premises, or any part thereof, purporting to
be for labor or material furnished or to be furnished to Tenant.  Landlord
shall not be liable for any labor or materials furnished or to be furnished to
Tenant upon credit, and no mechanics’ or other lien for labor or materials
shall attach to or affect the reversionary or other estate or interest of
Landlord in and to the Premises, or the Property.

 

16. 
                           Tenant’s
Failure to Repair.  In the event that Tenant fails after reasonable prior written notice
from Landlord, to keep the Premises in a good state of condition and repair
pursuant to Section 11 above, or to do any act or make any payment
required under this Lease or otherwise fails to comply herewith, Landlord may,
at its option (but without being obliged to do so) immediately, or at any time
thereafter and without notice, perform the same for the account of Tenant,
including the right to enter upon the Premises at all reasonable hours to make
such repairs, or do any act or make any payment or compliance which Tenant has
failed to do, and upon demand, Tenant shall reimburse Landlord for any such
expense incurred by Landlord including but not limited to any costs, damages
and counsel fees.  Any moneys expended by Landlord, as aforesaid, shall be
deemed additional rent, collectible as such by Landlord.  All rights given
to Landlord in this Section shall be in addition to any other right or remedy
of Landlord herein contained.

 

11

 

17. 
                           Property — Loss, Damage.  Landlord, its agents and employees shall not be liable to
Tenant for (i) any damage or loss of property of Tenant placed in the custody
of persons employed to provide services for or stored in or about the Premises
and/or the Building, unless such damage or loss is the result of the negligence
of Landlord, (ii) any injury or damage to persons, property or the business of
Tenant resulting from a latent defect in or material change in the condition of
the Building, and (iii) interference with the light, air, or other
incorporeal hereditaments of the Premises.

 

18. 
                           Destruction
— Fire or Other Casualty.  In case of partial damage to the Premises by fire or other casualty
insured against by Landlord, Tenant shall give immediate notice thereof to
Landlord, who shall thereupon cause damage to all property owned by it to be
repaired with reasonable speed at expense of Landlord, to the extent of
insurance proceeds actually received by Landlord, due allowance being made for
reasonable delay which may arise by reason of adjustment of loss under
insurance policies on the part of Landlord and/or Tenant, and for reasonable
delay on account of “labor troubles” or any other cause beyond Landlord’s
control, and to the extent that the Premises is rendered untenantable the rent
shall proportionately abate from the date of such casualty, provided the damage
above mentioned occurred without the fault or neglect of Tenant, Tenant’s
servants, employees, agents or visitors.  If such partial damage is due to
the fault or neglect of Tenant, or Tenant’s servants, employees, agents, or
invitees, the damage shall be repaired by Landlord to the extent of Landlord’s
insurance coverage, but there shall be no apportionment or abatement of
rent.  In the event fifty percent (50%) or more of the floor area of the
Building is rendered untenantable or the cost to repair the Building shall
amount to more than fifty percent (50%) of the cost of replacement
thereof,  and Landlord shall decide not
to repair or rebuild the Building, this Lease, at the option of Landlord, shall
be terminated upon written notice to Tenant and the rent shall, in such event,
be paid to or adjusted as of the date of such damage, and the terms of this
Lease shall expire by lapse of time and conditional limitation upon the third
day after such notice is mailed, and Tenant shall thereupon vacate the Premises
and surrender the same to Landlord, but no such termination shall release
Tenant from any liability to Landlord arising from such damage or from any
breach of the obligations imposed on Tenant hereunder, or from any obligations
accrued hereunder prior to such termination. 
In addition, in the event that (a) Landlord fails to notify Tenant of
the estimated time to complete the restoration within thirty (30) days after
the casualty, (b) Landlord estimates that its repairs will take more than two
hundred ten (210) days for any areas of the Premises or (c) Tenant is actually
deprived of the use of all or any substantial portion of the Premises for a
period in excess of two hundred ten (210) days, Tenant shall have the right, by
written notice to Landlord to terminate this Lease as of the date of the
casualty, provided that Tenant gives its notice within (45) days after the date
of the casualty in the case of subparagraph (a) above, within thirty (30) days
after receipt of Landlord’s notice of the estimated time to complete the
restoration or repair in the case of subparagraph (b) above, or within thirty
(30) days after failing to meet the deadline set forth in subparagraph (c)
above.  If Tenant fails to exercise its
termination rights strictly in accordance with the foregoing provision, this
Lease shall remain in full force and effect. 
Additionally, if Landlord tenders exclusive possession of the entire
Premises, with repairs complete, prior to the expiration of the 30-day notice
period for subparagraph (c), then Tenant’s termination notice shall be
abrogated, and this Lease shall remain in full force and effect.

 

Notwithstanding the foregoing, if the casualty occurs during the final
eighteen (18) months of the Term, and (a) Landlord estimates that its repairs
will take more than one hundred twenty (120) days for any area of the Premises
or (b) Tenant is actually deprived of the use of all or any substantial portion
of the Premises for a period in excess of one hundred twenty (120) days, Tenant
shall have the right, by written notice to Landlord to terminate this Lease as
of the date of the casualty, provided that Tenant gives its notice within
thirty (30) days after receipt of Landlord’s notice of the estimated time to complete
the restoration or repair in the case of subparagraph (a) above, or within
thirty (30) days after failing to meet the deadline set forth in subparagraph
(b) above.  If Tenant fails to exercise
its termination rights strictly in accordance with the foregoing provision,
this Lease shall remain in full force and effect.  Additionally, if Landlord tenders exclusive possession of the
entire Premises, with repairs complete, prior to the expiration of the 30-day
notice period for subparagraph (b), then Tenant’s termination notice shall be
abrogated, and this Lease shall remain in full force and effect.

 

12

 

19. 
                           Eminent Domain. 
If (1) the whole or more
than fifty percent (50%) of the floor area of the Premises shall be taken or
condemned by Eminent Domain for any public or quasi-public use or purpose, and
either party shall elect, by giving written notice to the other, or (2) more
than twenty-five percent (25%) of the floor area of the Building shall be so taken,
and Landlord shall elect, in its sole discretion, by giving written notice to
Tenant, any written notice to be given not more than sixty (60) days after the
date on which title shall vest in such condemnation proceeding, to terminate
this Lease, then, in either such event, the Term of this Lease shall cease and
terminate as of the date of title vesting.  In case of any taking or
condemnation, whether or not the Term of this Lease shall cease and terminate,
the entire award shall be the property of Landlord, and Tenant hereby assigns
to Landlord all its right, title and interest in and to any such award, except
that Tenant shall be entitled to claim, prove and receive in the proceedings
such awards as may be allowed for moving expenses, loss of profit and fixtures
and other equipment installed by it which shall not, under the terms of this
Lease, be or become the property of Landlord at the termination hereof, but
only if such awards shall be made by the condemnation, court or other authority
in addition to, and be stated separately from, the award made by it for the
Property or part thereof so taken.

 

20. 
                           Assignment.  So long as Tenant is not in default of any of the terms and conditions
hereof, and further provided that Tenant has fully and faithfully performed all
of the terms and conditions of this Lease, Landlord shall not unreasonably
withhold its consent to an assignment of this Lease or sublease of the Premises
for any of the then remaining portion of the unexpired Term provided:  (i) the net assets of the assignee or
sublessee shall be reasonably acceptable to Landlord; (ii) in the event of an
assignment, such assignee shall assume in writing all of Tenant’s obligations
under this Lease; (iii) in the event of a sublease, such sublease shall in all
respects be subject to and in conformance with the terms of this Lease; and
(iv) in all events Tenant continues to remain liable on this Lease for the
performance of all terms, including but not limited to, payment of all rent due
hereunder.  Landlord and Tenant
acknowledge and agree that it shall not be unreasonable for Landlord to
withhold its consent to an assignment if in Landlord’s reasonable business
judgment, the assignee lacks sufficient business experience or net worth to
successfully operate its business within the Premises in accordance with the
terms, covenants and conditions of this Lease. 
If this Lease be assigned, or if the Premises or any part thereof be
sublet or occupied by anybody other than Tenant, Landlord may, after default by
Tenant, collect rent from the assignee, subtenant or occupant and apply the net
amount collected to the rent herein reserved, but no such collection shall be
deemed a waiver of this covenant, or the acceptance of the assignee, subtenant
or occupant as tenant, or a release of Tenant from the further observance and
performance by Tenant of the covenants herein contained.  In addition, in the event of a proposed
assignment, Landlord shall have the right, but not the obligation, to terminate
this Lease by giving Tenant thirty (30) days’ advance written notice
(“Landlord’s Termination Notice”); provided, however, that Tenant shall have
the right to abrogate Landlord’s Termination Notice by notifying Landlord
within ten (10) days after receipt of Landlord’s Termination Notice of the
withdrawal of the request for consent to the assignment.  For purposes of the foregoing, a transfer by
operation of law or transfer of a controlling interest in Tenant as same exists
as of the date hereof, shall be deemed to be an assignment of this Lease.  No assignment or sublease, regardless of
whether Landlord’s consent has been granted or withheld, shall be deemed to
release Tenant from any of its obligations nor shall the same be deemed to
release any person guaranteeing the obligations of Tenant hereunder from their
obligations as guarantor.  Landlord’s
acceptance of any name submitted by Tenant, an agent of Tenant, or anyone
acting by, through or under Tenant for the purpose of being listed on the Building
directory will not be deemed, nor will it substitute for, Landlord’s consent,
as required by this Lease, to any sublease, assignment, or other occupancy of
the Premises by anyone other than Tenant or Tenant’s employees.  Any profit or additional consideration or
rent in excess of the Base Rent or additional rent payable by Tenant hereunder
which is payable to Tenant as a result of any assignment or subletting shall be
paid to Landlord as additional rent when received by Tenant.  All the foregoing notwithstanding, Tenant
shall not enter into any lease, sublease, license, concession or other
agreement for the use, occupancy or utilization of the Premises or any portion
thereof, which provides for a rental or other payment for such use, occupancy
or utilization based in whole or in part on the income or profits derived by
any person or entity from the property leased, used, occupied or utilized. Any
such purported lease, sublease, license, concession or other agreement shall be
absolutely void and ineffective as a conveyance of any right or interest in the
possession, use or occupancy of any part of the Premises. Any consent by

 

13

 

Landlord hereunder shall not constitute a
waiver of strict future compliance by Tenant with the provisions of this Section
20.  In no event shall the proposed
assignee or sublessee be occupying other space in the Building, nor shall it be
a prospective tenant either then negotiating with Landlord or has negotiated
with Landlord for premises within the prior six (6) month period.  Landlord hereby consents to the Deli Lease
and to a future deli sublease with McGyver’s if requested; provided, however,
that Tenant shall be bound by all of the terms and conditions of this Section
20 in the event such Deli Lease expires or is terminated and Tenant wishes to
enter into any additional subleases or assignments, other than a deli sublease
with McGyver’s, regardless of whether such sublease or assignment is to another
food provider.  If Tenant enters into a
deli sublease with McGyver’s, Tenant shall provide Landlord at least ten (10)
days’ prior written notice, along with a true and correct copy of the sublease.

 

Notwithstanding the
foregoing, without the consent and approval of Landlord, Tenant shall have the
right to assign or sublease the Premises or any portion thereof without
Landlord’s consent (however, Tenant shall endeavor to provide ten (10) days’
prior written notice thereof along with a true and complete copy of the
sublease or assignment document) to any subsidiary or affiliate of Tenant or in
the event of a merger or a sale of all or substantially all of the Tenant’s
assets, and in any event shall notify Landlord in writing within thirty (30)
days of the effective date of such assignment or sublease.  For the purposes hereof, “affiliate” shall
mean an entity or individual that controls, is controlled by or is under the
common control with Tenant. Tenant shall remain liable under the terms hereof
if Tenant exercises its rights under this paragraph to the extent it survives such
corporate event.

 

21. 
                           Default;
Remedies; Bankruptcy
of Tenant.  Any one or
more of the following events shall constitute an “Event of Default” hereunder,
at Landlord’s election:  (a) the sale of Tenant’s interest in the Premises
under attachment, execution or similar legal process or, the adjudication of
Tenant as a bankrupt or insolvent, unless such adjudication is vacated within
thirty (30) days; (b) the filing of a voluntary petition proposing the
adjudication of Tenant (or any guarantor of Tenant’s obligations hereunder) as
a bankrupt or insolvent, or the reorganization of Tenant (or any such
guarantor), or an arrangement by Tenant (or any such guarantor) with its
creditors, whether pursuant to the Federal Bankruptcy Code or any similar
federal or state proceeding, unless such petition is filed by a party other
than Tenant (or any such guarantor) and is withdrawn or dismissed within thirty
(30) days after the date of its filing; (c) the admission, in writing, by
Tenant (or any such guarantor) of its inability to pay its debts when due; (d)
the appointment of a receiver or trustee for the business or property of Tenant
(or any such guarantor), unless such appointment is vacated within thirty (30)
days of its entry; (e) the making by Tenant (or any such guarantor) of an
assignment for the benefit of its creditors, or if, in any other manner,
Tenant’s interest in this Lease shall pass to another by operation of law; (f)
the failure of Tenant to pay any rent, additional rent or other sum of money
when due and such failure continues for a period of ten (10) days after receipt
of written notice that the same is past due hereunder;  (g) if Tenant fails to pay any rent or
additional rent when due after Landlord shall have given Tenant written notice
with respect to such non-payment twice in any twelve (12) month period as
provided in subsection (f) above;; and (h) the default by Tenant in the
performance or observance of any covenant or agreement of this Lease (other
than a default involving the payment of money), which default is not cured
within thirty (30) days after the giving of notice thereof by Landlord, unless
such default is of such nature that it cannot be cured within such thirty (30)
day period, in which case no Event of Default shall occur so long as Tenant
shall commence the curing of the default within such thirty (30) day period and
shall thereafter diligently prosecute the curing of same.

 

Upon the occurrence and continuance of an Event of Default, Landlord,
with such notice to Tenant as provided for by law or as expressly provided for
herein, may do any one or more of the following:  (a) sell, at public or
private sale, all or any part of the goods, chattels, fixtures and other
personal property belonging to Tenant which are or may be put into the Premises
during the Term, whether or not exempt from sale under execution or attachment
(it being agreed that the property shall at all times be bound with a lien in
favor of Landlord and shall be chargeable for all rent and for the fulfillment
of the other covenants and agreements herein contained), and apply the proceeds
of such sale, first, to the payment of all costs and expenses of conducting the
sale or caring for or storing the property; second, toward the payment of any
indebtedness, including, without limitation, indebtedness for rent, which may
be or may become due from

 

14

 

Tenant
to Landlord; and third, to pay Tenant, on demand in writing, any surplus
remaining after all indebtedness of Tenant to Landlord has been fully paid; (b)
perform, on behalf and at the expense of Tenant, any obligation of Tenant under
this Lease which Tenant has failed to perform and of which Landlord shall have
given Tenant notice, the cost of which performance by Landlord, together, with
interest thereon at the Default Rate, from the date of such expenditure, shall
be deemed additional rent and shall be payable by Tenant to Landlord upon
demand; (c) elect to terminate this Lease and the tenancy created hereby by
giving notice of such election to Tenant in which event Tenant shall be liable
for an amount equal to the sum of Base Rent, additional rent, 
other indebtedness that otherwise would have been payable by Tenant
during the remainder of the Term had there been no Event of Default, and
all reasonable costs, fees and expenses, including, but not limited to,
attorneys’ fees, incurred by Landlord in pursuit of its remedies hereunder,
such total amount to be paid, at Landlord’s election, either in a one-time lump
sum payment, discounted to present value, using a discount rate of 12%, or in
monthly installments, in advance on the first day of each calendar month
following termination of this Lease and continuing until the date on which the
Term would have expired but for such termination, and on notice reenter the Premises, by summary proceedings or
otherwise, and remove Tenant and all other persons and property from the
Premises, and store such property in a public warehouse or elsewhere at the
cost and for the account of Tenant, without resort to legal process and without
Landlord being deemed guilty of trespass or becoming liable for any loss or
damage occasioned thereby; and also the right, but not the obligation, to
re-let the Premises for any unexpired balance of the Term, and collect the rent
therefor.  In the event of such re-letting by Landlord, the
re-letting shall be on such terms, conditions and rental as Landlord may deem
proper, and the proceeds that may be collected from the same, less the expense
of re-letting (including reasonable leasing fees and commissions and reasonable
costs of renovating the Premises), shall be applied upon Tenant’s rental
obligation as set forth in this Lease for the unexpired portion of the
Term.  Tenant shall be liable for any balance that may be due under this
Lease, although Tenant shall have no further right of possession of the
Premises; and (d) exercise any other legal or equitable right or remedy
which it may have at law or in equity.  Notwithstanding the provisions of
clause (b) above and regardless of whether an Event of Default shall have
occurred, Landlord may exercise the remedy described in clause (b) without any
notice to Tenant if Landlord, in its good faith judgment, believes it would be
materially injured by the failure to take rapid action, or if the unperformed
obligation of Tenant constitutes an emergency.  In the event Landlord elects to collect damages in clause (c)
above on a monthly basis, any suit or action brought to collect any such
damages for any month shall not in any manner prejudice the right of Landlord
to collect any such damages for any subsequent month by a similar proceeding.

 

TO THE EXTENT PERMITTED BY LAW, TENANT HEREBY EXPRESSLY WAIVES ANY AND
ALL RIGHTS OF REDEMPTION, GRANTED BY OR UNDER ANY PRESENT OR FUTURE LAWS IN THE
EVENT OF TENANT’S BEING EVICTED OR DISPOSSESSED FOR ANY CAUSE, OR IN THE EVENT
OF LANDLORD’S OBTAINING POSSESSION OF THE PREMISES, BY REASON OF THE VIOLATION
BY TENANT OF ANY OF THE COVENANTS AND CONDITIONS OF THIS LEASE, OR OTHERWISE. LANDLORD
AND TENANT HEREBY EXPRESSLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER PARTY ON ANY AND
EVERY MATTER, DIRECTLY OR INDIRECTLY ARISING OUT OF OR WITH RESPECT TO THIS
LEASE, INCLUDING, WITHOUT LIMITATION, THE RELATIONSHIP OF LANDLORD AND TENANT,
THE USE AND OCCUPANCY BY TENANT OF THE PREMISES, ANY STATUTORY REMEDY AND/OR
CLAIM OF INJURY OR DAMAGE REGARDING THIS LEASE.

 

Any costs and expenses incurred by Landlord (including, without limitation,
reasonable attorneys’ fees) in enforcing any of its rights or remedies under
this Lease shall be deemed to be additional rent and shall be repaid to
Landlord by Tenant upon demand.

 

Notwithstanding any of the other provisions of this Lease, in the event
Tenant shall voluntarily or involuntarily come under the jurisdiction of the
Federal Bankruptcy Code and thereafter Tenant or its trustee in bankruptcy,
under the authority of and pursuant to applicable provisions thereof, shall
have the power and so using same determine to assign this Lease,

 

15

 

Tenant
agrees that (i) Tenant or its trustee shall provide to Landlord sufficient
information enabling it to independently determine whether Landlord will incur
actual and substantial detriment by reason of such assignment and (ii)
“adequate assurance of future performance” under this Lease, as that term is
generally defined under the Federal Bankruptcy Code, shall be provided to
Landlord by Tenant and its assignee as a condition of the assignment.

 

Notwithstanding anything to
the contrary contained herein, Tenant shall be considered in “Habitual Default”
of this Lease upon (a) Tenant’s failure, on three (3) or more occasions during
any twelve month period to pay by the sixth (6th) day of the
applicable month any installment of Base Rent, additional rent or any other sum
required by the terms of this Lease, or upon (b) Tenant’s failure, on three (3)
or more occasions during any twelve month period to comply with any term,
covenant or condition of this Lease after written notice by Landlord to
Tenant.  Upon the occurrence of an event
of Habitual Default on the part of Tenant, then without limiting any other
rights or remedies to which Landlord may be entitled as a result of such
defaults:  (i) Tenant shall immediately
be deemed to have relinquished any and all options or rights granted, or to be
granted, to Tenant under the terms of this Lease or any amendment hereto (including,
without limitation, rights of renewal, rights to terminate, rights of first
offer or rights of first refusal); and (ii) in the event of a monetary event of
Habitual Default, Tenant shall thereafter pay all Base Rent and additional rent
and other sums whatsoever due under this Lease in cash, by money order or by
certified check or cashier’s check.

 

22. 
                           Intentionally
Deleted.

 

23. 
                           Services
and Utilities.  Landlord shall provide the following listed services and utilities,
namely:

 

(a)                                  heating, ventilation, and air conditioning
(“HVAC”) for the Premises during “Normal Business Hours” (as defined below) to
maintain temperatures for comfortable use and occupancy;

 

(b)                                 electric energy in accordance with Section
24 following;

 

(c)                                  automatic passenger elevators providing
adequate service leading to the floor on which the Premises is located;

 

(d)                                 hot and cold water sufficient for drinking,
lavatory toilet and ordinary cleaning purposes from fixtures either within the
Premises (if provided pursuant to this Lease) or on the floor on which the
Premises is located;

 

 

(e)                                  extermination and pest control when and if
necessary; and

 

(f)                                    maintenance of Common Areas in a manner
comparable to other first class suburban office buildings in the
Baltimore-Washington corridor.

 

Notwithstanding the foregoing, if at any time during the Term, Landlord
shall, after reasonable investigation determine that trash and similar waste
generated by Tenant and/or emanating from the Premises is in excess of that of
other standard office tenants within the Building leasing a premises of the
same or similar size to that of the Premises, Landlord shall bill Tenant and
Tenant shall pay to Landlord as additional rent hereunder within thirty (30)
days of the date of Landlord’s invoice for the same, those costs and expenses
of trash removal which are reasonably attributable to such excess trash and
similar waste generated by Tenant and/or emanating from the Premises.  “Normal Business Hours” as used herein is
defined from 8:00 a.m. to 6:00 p.m. on business days and from 8:00 a.m. to
1:00 p.m. on Saturdays.  Landlord shall
have no responsibility to provide any services under (a) above except during
Normal Business Hours unless arrangements for after-hours services have been
made pursuant to terms and conditions acceptable to Landlord and embodied in a
separate written agreement between Landlord and Tenant.  To the extent
Tenant requires after-hours HVAC services, Landlord shall provide at no cost to
Tenant. The parties acknowledge that the cooling tower at the Building operates
twenty-four hours per day, seven days a week and that any such operation after
Normal

 

16

 

Business
Hours is solely for the use and benefit of Tenant.  Landlord reserves the right to stop service of the HVAC,
elevator, plumbing and electric systems, when necessary, by reason of accident,
or emergency, or for repairs, alterations, replacements, or improvements, which
in the judgment of Landlord are desirable or necessary to be made, until the
repairs, alterations, replacements, or improvements shall have been
completed.  Landlord shall have no responsibility or liability for failure
to supply HVAC, elevator, plumbing, cleaning, and electric service, during the
period when prevented from so doing by laws, orders, or regulations of any
Federal, State, County or Municipal authority or by strikes, accidents or by
any other cause whatsoever beyond Landlord’s control.  Landlord’s
obligations to supply HVAC are subject to applicable laws and regulations as to
energy conservation and other such restrictions.  In the event that Tenant
should require supplemental HVAC for the Premises, any maintenance repair
and/or replacement required for such supplemental service shall be performed by
Landlord but the cost of such maintenance repair and/or replacement (including
labor and materials) shall be paid by Tenant as additional rent.

 

All utility and other
services to and for the Premises, including, without limitation, HVAC services,
will be available twenty-four (24) hours a day, seven (7) days a week (provided
that if Tenant requires HVAC outside of the Normal Business Hours, Landlord
shall have the right to charge Tenant as described above), and Tenant will have
access to the Premises twenty-four (24) hours a day, seven (7) days a week.

 

In the event of any interruption of services and utilities, Landlord
shall use commercially reasonable efforts to promptly restore such services and
utilities.  If Landlord fails to
provide any service or utilities that Landlord is obligated to provide or make
under this Lease, and such failure is not the result of any reason listed in Section
27 herein, and as a result thereof, Tenant shall be not able to use all or
any portion of the Premises and does not in fact use all or any portion of the
Premises for a period of five (5) consecutive business days or more after
notice thereof to Landlord then, except as provided herein with respect to
casualty, Tenant shall be entitled to abate Base Rent and additional rent, such
abatement commencing as of the sixth (6th) business day after which
any of the foregoing services have been stopped and shall continue to be abated
until such time as the applicable service have been restored.

 

24.                                 Electric
Current.  Landlord
has supplied or will supply the Premises with the necessary lines to provide
electric service to the Premises for normal office and data center operations,
as well as separate meters so that Tenant’s consumption of electric power can
be separately measured and charged to Tenant. 
Tenant shall pay all charges (including meter installation and
adjustment) for electric and similar utilities or services so supplied directly
to the utility company supplying same when due and before penalties or late
charges on same shall accrue. Tenant shall not at any time overburden or exceed
the capacity of the mains, feeders, ducts, conduits, or other facilities by
which electric and similar utilities are supplied to, distributed in or serve
the Premises.  If Tenant desires to
install any equipment which shall require additional electric or similar
facilities of a greater capacity than as provided by Landlord, such
installation shall be subject to Landlord’s prior written approval of Tenant’s
plans and specifications therefor, which approval shall not be unreasonably
withheld.  If such installation is
approved by Landlord, all costs for providing such additional electrical and
similar facilities shall be paid by Tenant.

 

25.                                 Telephone
and Telecommunications.  Landlord has arranged for the installation of
telephone service within the Building to the ground floor telephone utility
closet and conduit to the ground floor telephone and electrical riser closets.
Tenant shall be responsible for contacting the utility company supplying the
telephone service and arranging to have such telephone facilities as it may
desire to be extended and put into operation in the Premises, including without
limitation, obtaining a low voltage permit for phone and data wiring. Tenant
acknowledges and agrees that all telephone and telecommunications services
desired by Tenant shall be ordered and utilized at the sole expense of
Tenant.  All costs related to
installation and the provision of such service shall be borne and paid for
directly by Tenant.  Upon request by
Landlord, Tenant, at Tenant’s expense, shall remove the telephone facilities at
the expiration or sooner termination of the Term.  Tenant shall obtain the requisite permit and complete the ceiling
work in cooperation with Landlord in order not to interfere with or delay the
completion of the Tenant Improvements by Landlord pursuant to Section 35,
including, without limitation, the closing of the ceiling and the carpet
installation, if applicable.  Landlord
will allow Tenant access

 

17

 

for wiring, including electric, data and telecom, within the Building’s
public areas and designated chases, but will not guarantee access of the wiring
through another tenant’s space. Tenant, at Tenant’s expense, shall be
responsible for the relocation and its associated costs, if requested, of any
data, telecom or electrical wiring that runs through another tenant’s space,
including the plenum area or otherwise.

 

In the event Tenant wishes to utilize the services of a telephone or
telecommunications provider whose equipment is not servicing the Building at
such time Tenant wishes to install its telecommunications equipment serving the
Premises (“Provider”), no such Provider shall be permitted to install its lines
or other equipment without first securing the prior written consent of
Landlord, which consent shall not be unreasonably withheld.  Prior to the commencement of any work in or
about the Building by the Provider, the Provider shall agree to abide by such
rules and regulations, job site rules, and such other requirements as
reasonably determined by Landlord to be necessary to protect the interest of
the Building and Property, the other tenants and occupants of the Building and
Landlord, including, without limitation, providing security in such form and
amount as reasonable determined by Landlord. 
Each Provider must be duly licensed, insured and reputable.  Landlord shall incur no expense whatsoever
with respect to any aspect of Provider’s provision of its services, including
without limitation, the costs of installation, materials and service.

 

In addition, Landlord reserves exclusively to itself and its successors
and assigns the right to install, operate, maintain, repair, replace and remove
fiber optic cable and conduit and associated equipment and appurtenances within
the Building and the Premises so as to provide telecommunications service to
and for the benefit of tenants and other occupants of the Building.

 

26.                             Acceptance
of Premises.  Tenant accepts the
Premises in “as is,” “where is” condition as of the Effective Date.

 

27. 
                           Inability
to Perform.  This Lease and the obligation of Tenant to pay rent hereunder and
perform all of the other covenants and agreements hereunder on the part of
Tenant to be performed shall in no way be affected, impaired or excused because
Landlord is unable to fulfill any of its obligations under this Lease or to
supply, or is delayed in supplying, any service to be supplied by it under the
terms of this Lease or is unable to make, or is delayed in making any repairs,
additions, alterations, or decorations or is unable to supply, or is delayed in
supplying, any equipment or fixtures if Landlord is prevented or delayed from
so doing by reason of strikes or labor troubles or any outside cause whatsoever
including, but not limited to, governmental preemption in connection with a
National Emergency, or by reason of any rule, order or regulation of any
department or subdivision of any government agency or by reason of the
conditions of supply and demand which have been or are affected by war or other
emergency.  Similarly, Landlord shall not be liable for any interference
with any services supplied to Tenant by others if such interference is caused
by any of the reasons listed in this Section.  Nothing contained in this
Section shall be deemed to impose any obligation on Landlord not expressly
imposed by other sections of this Lease.

 

28. 
                           No Waivers. 
The failure of Landlord
to insist, in any one or more instances, upon a strict performance of any of
the covenants of this Lease, or to exercise any option herein contained, shall
not be construed as a waiver, or a relinquishment for the future, of such
covenant or option, but the same shall continue and remain in full force and
effect.  The receipt by Landlord of rent, with knowledge of the breach of
any covenant hereof, shall not be deemed a waiver of such breach, and no waiver
by Landlord of any provision hereof shall be deemed to have been made unless
expressed in writing and signed by Landlord.

 

29. 
                           Access to Premises and Change in Services.  Landlord
shall have the right, without abatement of rent, to enter the Premises at any
hour to examine the same, or to make such repairs and alterations as Landlord
shall deem necessary for the safety and preservation of the Building, and also
to exhibit the Premises to be let during the last six (6) months of the Term;
provided, however, that except in the case of emergency such entry shall only
be after notice first given to Tenant.  If, during the last month of the
Term, Tenant shall have removed all or substantially all of Tenant’s property
therefrom, Landlord may immediately enter and alter, renovate and redecorate
the Premises, without elimination or abatement of rent, or incurring liability
to Tenant

 

18

 

for any compensation, and such acts shall
have no effect upon this Lease.  Nothing herein contained, however, shall
be deemed or construed to impose upon Landlord any obligation, responsibility
or liability whatsoever, for the care, supervision or repair, of the Building
or any part thereof, other than as herein elsewhere expressly provided. 
Landlord shall also have the right at any time, without the same constituting
an actual or constructive eviction and without incurring any liability to Tenant
therefor, to change the arrangement and/or location of entrances or
passageways, doors and doorways, and corridors, stairs, toilets, elevators, or
other public parts of the Building, and to change the name by which the
Building is commonly known and/or its mailing address.

 

30. 
                           Estoppel
Certificates.  Tenant agrees, at any time and from time to time, upon not less than
ten (10) days’ prior request by Landlord to execute, acknowledge and deliver to
Landlord an estoppel certificate substantially in the form attached hereto as Exhibit “D”
or such other reasonable form requested by Landlord which certifies that this
Lease is unmodified and in full force (or if there have been modifications,
that the same is in full force and effect as modified and stating the
modifications) and the dates through which the rent and other charges have been
paid in advance, if any, and stating whether or not to the best knowledge of
the signer of such certificate Landlord is in default in performance of any
covenant, agreement or condition contained in this Lease and, if so, specifying
each such default of which the signer may have knowledge, it being intended
that any such statement delivered hereunder may be relied upon by third parties
not a party to this Lease.

 

31. 
                           Subordination. 
Tenant accepts this
Lease, and the tenancy created hereunder, subject and subordinate to any
mortgages, overleases, leasehold mortgages or other security interests now or
hereafter a lien upon or affecting the Building or the Property or any part
thereof.  Tenant shall, at any time hereafter, within ten (10) days after
request from Landlord, execute a Subordination, Non-Disturbance Agreement
substantially in the form of Exhibit “E” attached hereto and made a part
hereof or any instruments or leases or other documents that may be required by
any mortgage or mortgagee or overlandlord (herein a “Mortgagee”) for the
purpose of subjecting or subordinating this Lease and the tenancy created
hereunder to the lien of any such mortgage or mortgages or underlying lease,
and the failure of Tenant to execute any such instruments, releases or
documents shall constitute a default hereunder.

 

32. 
                           Attornment. 
Tenant agrees that upon
any termination of Landlord’s interest in the Premises, Tenant shall, upon request,
attorn to the person or organization then holding title to the reversion of the
Premises (the “Successor”) and to all subsequent Successors, and shall pay to
the Successor all of the rents and other monies required to be paid by Tenant
hereunder and perform all of the other terms, covenants, conditions and
obligations in this Lease contained; provided, however, that if in connection
with such attornment Tenant shall so request from such Successor in writing,
such Successor shall execute and deliver to Tenant an instrument wherein such
Successor agrees that as long as Tenant performs all of the terms, covenants
and conditions of this Lease, on Tenant’s part to be performed, Tenant’s
possession under the provisions of this Lease shall not be disturbed by such
Successor.  In the event that the
Mortgagee succeeds to the interest of Landlord hereunder and is advised by its
counsel that all or any portion of the Base Rent or additional rent payable by
Tenant hereunder is or may be deemed to be unrelated business income within the
meaning of the United States Internal Revenue Code or regulations issued
thereunder, Mortgagee, as Landlord, shall have the right at any time, from time
to time, to notify Tenant in writing of the required changes to the Lease. Tenant
shall execute all documents necessary to effect any such amendment within ten
(10) days after written request from Mortgagee, as landlord, provided that in
no event shall such amendment increase Tenant’s payment obligations or other
liability under this Lease or reduce Landlord’s obligations hereunder.

 

33. 
                           Notices.  All notices and other communications to be
made hereunder shall be in writing and shall be delivered to the addresses set
forth below by any of the following means: (a) personal service or receipted
courier service; (b) telecopying (if confirmed in writing sent by the methods
specified in clauses (a), (c) or (d) of this Section), (c) registered or
certified first class mail, return receipt requested, or (d)
nationally-recognized overnight delivery service.  Such addresses may be changed by notice to the other parties
given in the same manner as provided above. 
Any notice or other communication sent pursuant to clause (a) or (b)
hereof shall be

 

19

 

deemed received upon such
personal service or upon dispatch by electronic means, if sent pursuant to
subsection (c) shall be deemed received five (5) days following deposit in the
mail and/or if sent pursuant to subsection (d) shall be deemed received the
next succeeding business day following deposit with such nationally recognized
overnight delivery service.

 

	
  If to Landlord:

  	
   

  	
  ATRIUM BUILDING, LLC

  
	
   

  	
   

  	
  c/o Corporate Office
  Properties, L.P.

  
	
   

  	
   

  	
  8815 Centre Park Drive,
  Suite 400

  
	
   

  	
   

  	
  Columbia, Maryland 21045

  
	
   

  	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
  Telecopier: 410-740—1174

  
	
   

  	
   

  	
   

  
	
  If to Tenant:

  	
   

  	
  At the Premises,
  Attn:  Finance Team

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Neuberger, Quinn, Gielen,
  Rubin & Gibber, P.A.

  
	
   

  	
   

  	
  One South Street, 27th
  Floor

  
	
   

  	
   

  	
  Baltimore, Maryland
  21202-3282

  
	
   

  	
   

  	
  Attn:  Richard Rubin

  
	
   

  	
   

  	
  Telecopier:  (410) 332-8562.

  

 

Any party may designate a change of address
by written notice to the above parties, given at least ten (10) days before
such change of address is to become effective.

 

34. 
                           Intentionally
Deleted.

 

35. 
                           Tenant’s Space. 
Landlord shall deliver
possession of the Premises to Tenant (“Delivery of Possession”) as of the
Effective Date in “as-is,” “ where-is” condition.

 

35.1                           Tenant Improvements and Document Submission
and Approval.  All liability and responsibility for the
improvements of the Premises, which improvements shall be non-structural,
including, by way of example, painting, carpeting, electrical wiring, signage,
shall be the obligation, liability and responsibility of Tenant (the “Tenant
Improvements”).  Tenant, at Tenant’s
expense, shall perform the Tenant Improvements at any time after the Effective
Date in accordance with the terms and conditions of this Lease; provided,
however, that Tenant agrees to protect, indemnify and save Landlord harmless
from any liability for damage to person or property occurring as a result of
the Tenant Improvements being performed prior to the Commencement Date.  Tenant shall perform all Tenant Improvements
in accordance with Section 10 of this Lease.

 

35.2                           Disbursement of Allowance.

 

35.2.1                  The Allowance shall be paid by Landlord to
Tenant for amounts actually paid by Tenant in connection with the Tenant
Improvements to Tenant’s vendors, suppliers or contractors, provided that
Landlord shall have received (i) a certificate signed by Tenant setting forth
(a) that the sum then requested was paid by Tenant to contractors,
subcontractors, materialmen, engineers and other persons who have rendered
services or furnished materials in connection with work on the Tenant Improvements,
(b) a complete description of such services and materials and the amounts paid
or to be paid to each of such persons in respect thereof, and (c) that the work
described in the certificate was performed any time after June 1, 2003 and (ii)
paid receipts or such other proof of payment as Landlord shall reasonably
require for all such work completed. 
Landlord shall reimburse Tenant within thirty (30) days after Landlord’s
receipt of a written request for reimbursement from Tenant and shall debit the
Allowance therefor.  Upon completion of
the Tenant Improvements, Tenant shall provide Landlord a copy of a final
unconditional lien waivers satisfactory to Landlord executed by any contractors
or subcontractors for whose labor or material Tenant has previously been
reimbursed pursuant to this Section 35.

 

35.2.2                  Tenant shall have the right to receive
disbursements of the Allowance no more than five (5) times following the
Effective Date of this Lease (the “FiveDisbursements”).  If Tenant does not fully utilize the
Allowance within the Five Disbursements, Tenant shall forfeit

 

20

 

the remainder of the Allowance and shall
receive no credit therefor.

 

35.2.3                  Tenant shall bear any costs to complete the
Tenant Improvements in excess of the Allowance or to the extent such Tenant
Improvements are completed after the Five Disbursements.

 

36. 
                           Quiet
Enjoyment.  Tenant, upon the payment of rent and the performance of all the terms
of this Lease, shall at all times during the Term peaceably and quietly enjoy
the Premises without any disturbance from Landlord or any other person claiming
through Landlord.

 

37. 
                           Vacation
of Premises.  Tenant shall vacate the Premises at the end of the Term.  If
Tenant fails to vacate at such time there shall be payable to Landlord an
amount equal to one hundred fifty percent (150%) of the monthly Base Rent
stated in Section 1.1.6 paid immediately prior to the holding over
period for each month or part of a month that Tenant holds over, plus all other
payments provided for herein, and the payment and acceptance of such payments
shall not constitute an extension or renewal of this Lease.  In event of
any such holdover, Landlord shall also be entitled to all remedies provided by
law for the speedy eviction of tenants, and to the payment of all attorneys’
fees and expenses incurred in connection therewith.

 

38. 
                           Members’
Liability.  It is understood that the Owner of the Building is a Maryland limited
liability company.  All obligations of
the Owner hereunder are limited to the net assets of the Owner from time to
time.  No member of Owner, or of any successor partnership, whether now or
hereafter a member, shall have any personal responsibility or liability for the
obligations of Owner hereunder.

 

39. 
                           Separability. 
If any term or provision
of this Lease or the application thereof to any person or circumstances shall,
to any extent, be invalid or unenforceable, the remainder of this Lease or the
application of such term or provision of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term and provision of this Lease shall
be valid and be enforced to the fullest extent permitted by law.

 

40.                                 Indemnification.  Tenant shall indemnify and hold harmless Landlord and all of its and
their respective partners, directors, officers, agents and employees from any
and all liability, loss, cost or expense arising from all third-party claims
resulting from or in connection with:

 

(i)                                     the conduct or management of the Premises or
of any business therein, or any work or thing whatsoever done, or any condition
created in or about the Premises during the Term of this Lease or during the
period of time, if any, prior to the Commencement Date that Tenant may have
been given access to the Premises;

 

(ii)                                  any act, omission or negligence of Tenant or
any of its subtenants or licensees or its or their partners, directors,
officers, agents, employees, invitees or contractors;

 

(iii)                               any accident, injury or damage whatever
occurring in, at or upon the Premises; and

 

(iv)                              any breach or default by Tenant in the full
and prompt payment and performance of Tenant’s obligations under this Lease;

 

together with all costs and expenses
reasonably incurred or paid in connection with each such claim or action or
proceeding brought thereon, including, without limitation, all reasonable
attorneys’ fees and expenses.

 

In case any action or proceeding is brought against Landlord and/or any
of its and their respective partners, directors, officers, agents or employees
and such claim is a claim from which Tenant is obligated to indemnify Landlord
pursuant to this Section 40, Tenant, upon notice from Landlord shall
resist and defend such action or proceeding (by counsel reasonably satisfactory
to Landlord).  The obligations of Tenant
under this Section shall survive termination of this Lease.

 

21

 

41.                                 Captions  All headings anywhere contained in this
Lease are intended for convenience or reference only and are not to be deemed
or taken as a summary of the provisions to which they pertain or as a
construction thereof.

 

42. 
                           Brokers.  Tenant represents that Tenant has dealt
directly with, only with, the Broker as broker in connection with this Lease,
and Tenant warrants that no other broker negotiated this Lease or is entitled
to any commissions in connection with this Lease.  Landlord shall pay the Broker pursuant to the terms of a separate
written agreement by and between Landlord and Broker.

 

43. 
                           Recordation. 
Tenant covenants that it
shall not, without Landlord’s prior written consent, which consent may be
withheld in Landlord’s sole and absolute discretion, record this Lease or any
memorandum of this Lease or offer this Lease or any memorandum of this Lease
for recordation.  If at any time Landlord or any mortgagee of Landlord’s
interest in the Premises shall require the recordation of this Lease or any
memorandum of this Lease, such recordation shall be at Landlord’s
expense.  If at any time Tenant shall require the recordation of this
Lease or any memorandum of this Lease, such recordation shall be at Tenant’s
expense.  If the recordation of this Lease or any memorandum of this Lease
shall be required by any valid governmental order, or if any government
authority having jurisdiction in the matter shall assess and be entitled to
collect transfer taxes or documentary stamp taxes, or both transfer taxes and
documentary stamp taxes on this Lease or any memorandum of this Lease, Tenant
shall execute such acknowledgments as may be necessary to effect such
recordations and pay, upon request of Landlord, one half of all recording fees,
transfer taxes and documentary stamp taxes payable on, or in connection with
this Lease or any memorandum of this Lease or such recordation.

 

44.                                 Successors
and Assigns.  The covenants, conditions and agreements contained in this Lease shall
bind and inure to the benefit of Landlord and Tenant, and their respective
heirs, personal representatives, successors and assigns (subject, however, to
the terms of Section 20 hereof).

 

45.                                 Integration
of Agreements.  This writing is intended by the Parties as a final expression of their
agreement and is a complete and exclusive statement of its terms, and all
negotiations, considerations and representations between the Parties are
incorporated.  No course of prior dealings between the Parties or their
affiliates shall be relevant or admissible to supplement, explain, or vary any of
the terms of this Lease.  Acceptance of, or acquiescence to, a course of
performance rendered under this Lease or any prior agreement between the
Parties or their affiliates shall not be relevant or admissible to determine
the meaning of any of the terms or covenants of this Lease.  Other than as
specifically set forth in this Lease, no representations, understandings, or
agreements have been made or relied upon in the making of this Lease.

 

46.                                 Hazardous
Material; Indemnity. Tenant further agrees to the following:

 

46.1                           As used in this Lease, the following terms
shall have the following meanings:

 

46.1.1                  “Environmental Laws” shall mean all federal,
state or local statutes, regulations, rules, ordinances, codes, licenses,
permits, orders, approvals, authorizations, agreements, ordinances,
administrative or judicial rulings or similar items relating to the protection
of the environment or the protection of human health, including, without
limitation, all requirements pertaining to reporting, licensing, permitting,
investigation and remediation of emissions, discharges, Releases or Threats of
Releases (as defined below) of Hazardous Materials into the air, surface water,
groundwater or land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials
or relating to storage tanks.

 

46.1.2                  “Hazardous Materials” shall mean (i) any
substance, gas, material or chemical which is defined as or included in the
definition of “hazardous substances”, “toxic substances”, “hazardous
materials”, “hazardous wastes” under any federal, state or local statute, law,
or ordinance or under the regulations adopted or guidelines promulgated
pursuant thereto, including, but not limited to, the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§9061 et
seq. (“CERCLA”); the Hazardous

 

22

 

Materials Transportation Act, as amended 49
U.S.C. §§1801, et seq.; the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. §§6901, et seq.; (ii) radon gas in excess of four (4)
picocuries per liter, friable asbestos, urea formaldehyde foam insulation,
petroleum products, transformers or other equipment which contain dielectric
fluid containing levels of polychlorinated biphenyls in excess of federal,
state or local safety guidelines, whichever are more stringent; and (iii) any
other substance, gas, material or chemical, exposure to or release of which is
prohibited, limited or regulated by any governmental or quasi-governmental
entity or authority that asserts or may assert jurisdiction over the
Premises,  the Building or the Property.

 

46.1.3                  “Hazardous Materials Inventory” shall mean a
comprehensive inventory of all Hazardous Materials used, generated, stored,
treated or disposed of by Tenant at the Premises.

 

46.1.4                  “Losses” shall mean all claims, liabilities,
obligations, losses (including, without limitation, diminution in the value of
the Premises, the Building, or the Property, damages for the loss or
restriction on use of rentable or usable space or of any amenity of the
Premises, the Building and/or the Property, damages arising from any adverse
impact on marketing of space), damages, penalties, fees, actions, judgments, lawsuits,
costs, expenses, disbursements, orders or decrees, including, without
limitation, attorneys’ and consultants’ fees and expenses.

 

46.1.5                  “Release” means any releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, disposing or dumping into soil, surface waters,
groundwaters, land, stream sediments, surface or subsurface strata, ambient air
and any environmental medium comprising or proximate to and affecting the
Premises, the Building or the Property.

 

46.1.6                  “Threat of Release” means a substantial
likelihood of a Release which requires action to prevent or mitigate damage to
the soil, surface waters, groundwaters, land, stream sediments, surface or
subsurface strata, ambient air and any environmental medium comprising or
proximate to and affecting the Premises, the Building or the Property.

 

46.2                           Tenant shall not generate, use, manufacture,
recycle, handle, store, place, transport, treat, discharge or dispose of any
Hazardous Materials at, on, in or near the Premises, the Building or the
Property or cause any of the foregoing to occur at, on, in, or near the
Premises, the Building or the Property, shall comply with all Environmental
Laws in connection with Tenant’s use or occupancy of the Premises and the
Building, and promptly shall take all remedial action, at Tenant’s sole cost
and expense, but with Landlord’s prior approval, necessary or desirable to
remedy, clean-up and remove the presence of any Hazardous Materials resulting
from Tenant’s violation of the prohibitions set forth in this sentence or
Tenant’s failure to comply with Environmental Laws. Notwithstanding the
foregoing, Tenant shall not be deemed to be prohibited from using products
containing Hazardous Materials so long as such products are commonly found in
an office environment and are handled, stored, used and disposed of in
compliance with all Environmental Laws. In addition, Tenant shall (i) obtain,
maintain in full force and effect, and comply with, all permits required under Environmental
Laws; (ii) comply with all record keeping and reporting requirements imposed by
Environmental Laws concerning the use, handling, treatment, storage, disposal
or release of Hazardous Materials on the Premises, the Building and the
Property; (iii) report to Landlord any release or discharge of Hazardous
Materials within two (2) business days of such discharge or release; (iv)
provide to Landlord copies of all written reports concerning such discharge of
Hazardous Materials that are required to be filed with governmental or
quasi-governmental entities under Environmental Laws; (vi) maintain and
annually update a Hazardous Materials Inventory with respect to Hazardous
Materials used, generated, treated, stored or disposed of at the Premises, the Building
and the Property; and (vii) make available to Landlord for inspection and
copying, at Landlord’s expense, upon reasonable notice and at reasonable times,
such Hazardous Materials Inventory and any other reports, inventories or other
records required to be kept under Environmental Laws concerning the use,
generation, treatment, storage, disposal or release of Hazardous Materials.

 

46.3                           Without limitation on any other indemnities
by or obligations of Tenant to Landlord under this Lease or otherwise, Tenant
hereby covenants and agrees to indemnify,

 

23

 

defend
and hold harmless Landlord from and against any Losses incurred by Landlord as
a result of Tenant’s breach of any representation, covenant or warranty hereof;
or as a result of any claim, demand, liability, obligation, right or cause of
action, including, but not limited to governmental action or other third party
action (collectively, “Claims”), that is asserted against Landlord, the
Premises, the Building or the Property as a result of or which arises directly
or indirectly, in whole or in part, out of the Release, Threat of Release,
discharge, deposit, presence, treatment, transport, handling or disposal of any
Hazardous Materials at, on, under, in, about, or from the Premises, the
Building or the Property attributable to or arising out of the operations or
activities or presence of Tenant or any assignee, sublessee, agent or
representative of Tenant at or about the Premises, the Building or the Property.  This indemnification of Landlord and its
Mortgagee(s) by Tenant includes, without limitation, costs incurred in
connection with any investigation of site conditions or any cleanup, remedial,
removal, or restoration work required by any federal, state or local
governmental agency or political subdivision because of Hazardous Material
present in the soil or ground water on or under the Building.

 

46.4                           The indemnities, warranties and covenants
contained in this Article shall survive termination of this Lease.

 

47.                                 Americans
With Disabilities Act.  Notwithstanding any other provisions
contained in this Lease and with the purpose of superseding any such provisions
herein that might be construed to the contrary, it is the intent of Landlord
and Tenant that at all times while this Lease shall be in effect that the
following provisions shall be deemed their specific agreement as to how the
responsibility for compliance (and cost) with the Americans With Disabilities
Act and amendments to same (“ADA”), both as to the Premises and the Property,
shall be allocated between them, namely:

 

47.1                           Landlord and Tenant agree to cooperate
together in the initial design, planning and preparation of specifications for
construction of the Premises so that same shall be in compliance with the
ADA.  Any costs associated with assuring
that the plans and specifications for the construction of the Premises are in
compliance with the ADA shall be borne by the party whose responsibility it is hereunder
to bear the cost of preparation of the plans and specifications.  Similarly those costs incurred in the
initial construction of the Premises so that same are built in compliance with
the ADA shall be included within Tenant’s Improvements and handled in the
manner as provided for in other Sections of this Lease.

 

47.2                           Subject to Section 47.4,
modifications, alterations and/or other changes required to and within the
Common Areas which are not capital in nature shall be the responsibility of
Landlord to perform and the cost of same shall be considered a part of the
Building Expenses and treated as such.

 

47.3                           Subject to Section 47.4,
modifications, alterations and/or other changes required to and within the
Common Areas which are capital in nature shall be the responsibility of
Landlord and at its cost and expense.

 

47.4                           Modifications, alterations and/or other
changes required to and within the Common Areas, whether capital in nature or
not, which are required as a result of Tenant’s specific use of the Premises,
as compared to office uses generally, shall be paid by Tenant within thirty
(30) days after receipt of an invoice from Landlord, together with reasonable
supporting documentation.

 

47.5                           Modifications, alterations and/or other
changes required to and within the Premises (after the initial construction of
same), whether capital in nature or non-capital in nature, shall be the
responsibility of Tenant and at its cost and expense; unless the changes are
structural in nature and result from the original design of the Building or
exist as of the Effective Date, in which instance they shall be the
responsibility of Landlord and at its cost and expense.

 

Each party hereto shall indemnify and hold harmless the other party
from any and all liability, loss, cost or expense arising as a result of a
party not fulfilling its obligations as to compliance with the ADA as set forth
in this Section.

 

24

 

48. 
                           Several
Liability.  If Tenant shall be one or more individuals, corporations or other
entities, whether or not operating as a partnership or joint venture, then each
such individual, corporation, entity, joint venturer or partner shall be deemed
to be both jointly and severally liable for the payment of the entire rent and
other payments specified herein.

 

49.                                 Financial
Statements.  Tenant represents and warrants to Landlord
that the financial statements heretofore delivered by Tenant to Landlord are
true, correct and complete in all respects, have been prepared in accordance
with generally accepted accounting principles, and fairly represent the
financial condition of Tenant as of the date thereof, and that no material
change has thereafter occurred in the financial conditions reflected
therein.  Within fifteen (15) days after
request from Landlord, Tenant agrees to deliver to Landlord such future
financial statements and other information as Landlord from time to time may
reasonably request.

 

50.                                 Definition
of “Day” and “Days” .  As used in the Lease, the terms “day” and
“days” shall refer to calendar days unless specified to the contrary; provided,
however, that if the deadline established for either party’s performance
hereunder occurs on a Saturday, Sunday or banking holiday in the State of
Maryland, the date of performance shall be extended to the next occurring
business day.

 

51.                                 Right of
Termination.  Tenant shall have the continuing right to
terminate this Lease as of or after June 1, 2005, provided that (i) Tenant
gives Landlord at least twelve (12) months prior written notice of its intent
to terminate the Lease, (ii) there is no outstanding Event of Default at the
time that Tenant notifies Landlord of its intent to terminate this Lease and
there is no default in the payment of Base Rent beyond applicable notice and
cure periods as of the date of termination (in which event the notice of
termination shall be rescinded at Landlord’s option), and (iii) simultaneously
with the delivery of its termination notice, Tenant pays to Landlord a
termination fee in the amount equal to the sum of (x) the unamortized amount of
the Allowance actually disbursed in accordance with the provisions of Section
35 applying an interest rate of ten percent (10%) per annum and (y)
the unamortized amount of the commission paid to Broker in connection
with Section 42 of this Lease, applying an interest rate of ten percent
(10%) per annum.  If Tenant fails to exercise its termination
rights strictly in accordance with the foregoing provision, this Lease shall
remain in full force and effect.

 

52.                                 Generator.  The
parties acknowledge that the Premises are currently served by a generator and
underground storage tank (collectively, the “Generator”) and Tenant shall have
the exclusive use of the Generator during the Term of this Lease.  The Generator shall be the property of
Landlord and shall remain upon and be surrendered with the Premises at the
termination of this Lease without molestation or injury.  Landlord makes no representations or
warranties as to the condition of the Generator.

 

Tenant’s maintenance and use of the Generator during the Term shall be
performed by or on behalf of Tenant (a) at Tenant’s sole risk, cost and
expense, (b)  in a timely, good and
workman-like manner, (c) using only licensed contractors approved by Landlord, and
(d) without interference to Landlord, or other tenants or occupants of Building
and Property.  Tenant shall bear all
costs incurred in the exercise of its rights set forth above and shall exercise
these rights in full compliance with all applicable federal, state, and local
governmental laws, regulations and rules (including without limitation the
obtaining of all required permits) or any other requirements reasonably imposed
by Landlord or covenants of record encumbering the Property.  Tenant shall provide copies of all such
required approvals when issued.  Tenant
shall take all precautionary steps to protect its facilities and the facilities
of Landlord and others affected by performance of work and shall police same
properly.  Tenant shall replace or
restore any disturbance or damage it caused to the Building or Property.  Notwithstanding anything to the contrary
contained in this Lease, Tenant shall fully indemnify Landlord and its
mortgagee against all loss or damage of whatever kind or nature, including but
not limited to third party claims, arising or in any manner connected with
Tenant’s use or maintenance of the Generator.

 

Tenant shall provide Landlord with a maintenance schedule and
corresponding work tickets on a quarterly basis, or more frequently at
Landlord’s request if Landlord believes that the Generator is not being
properly maintained.  If Tenant
fails to perform any of the services necessary to maintain the Generator in
good and efficient working order and condition, and

 

25

 

Tenant fails to correct
such deficiency within three (3) days after written notice from Landlord,
Landlord shall have the right to perform such service(s) and Tenant shall
reimburse Landlord for the costs incurred by Landlord for such services, as
additional rent, together with interest at the Default Rate.

 

53.                                 Telecommunications
Equipment.  Tenant shall have the non-exclusive right to
enter upon and utilize the roof of the Building for the purposes of installing,
maintaining and repairing any equipment or utilities required in its operation
of its business in the Premises; provided that 
(i) such equipment is used solely in connection with Tenant’s business
in the Premises and is not available for use by third-parties, (ii) Tenant
submits to Landlord for Landlord’s prior written approval, such approval not to
be unreasonably withheld, conditioned or delayed, the desired location on the
roof to install the equipment and the make, model and specifications of the
equipment, (iii) Tenant, at Tenant’s expense, shall install, maintain and
remove the equipment in coordination with Landlord’s rooftop consultant,
provided, however, that Landlord, at Tenant’s expense, shall have the right,
but not the obligation, to install, maintain and/or remove the equipment, (iv)
Tenant shall reimburse Landlord for any costs incurred by Landlord from its
rooftop consultant, in an amount not to exceed $1,750.00, and (v) Tenant shall
indemnify and hold Landlord, its successors, assigns, agents, licensees and
invitees harmless from any and all damages, costs, claims, expenses, actions
(including reasonable attorney’s fees in connection with the equipment, unless
resulting form Landlord’s negligence.

 

54.                                 Exterior Signage.  Tenant, at Tenant’s sole cost and expense, shall have the
right to install and thereafter display an exterior sign on the front and back
of the Building, provided that (i) Tenant obtains Landlord’s prior written
approval, such approval not to be unreasonably withheld, with regard to the
size, location, and method of installation of the signage, (ii) the Lease has
not been amended to reduce the area of the Premises, and (iii) Tenant remains
open for business in the Premises. 
Tenant, at Tenant’s expense, shall maintain the signage, and obtain all
required permits from any governmental authorities.  At the expiration or sooner termination of this Lease, Tenant
shall remove the exterior signage on the Building and restore the Building’s
surface to that condition which existed immediately prior to the installation
of the signage.  In addition, if, after
installation of the signage, any of the conditions set forth in subsections (i)
through (iv) inclusive of the first sentence of this paragraph are not
satisfied, Tenant, at Tenant’s expense, shall remove the signage upon fifteen
(15) days’ advance written notice from Landlord and restore the Building’s
surface to that condition which existed immediately prior to the installation
of the signage.

 

55.                                 Tenant’s Installation of Security
System.  Tenant shall have the
right, at its sole cost and expense, to install within the Premises electronic
badge door lock systems as well as additional locks (collectively, the
“Security System”); provided, however, that Tenant’s installation and use of
such Security System shall be subject to each of the following
requirements:  (i) prior to the
installation of such Security System, Tenant shall secure Landlord’s approval
(which shall not be unreasonably withheld) to the manufacture, model and method
of installation of such Security System within the Premises where the same
shall be installed; (ii) Tenant’s Security System and the installation of the
same shall be by reputable, licensed and insured contractors; (iii) Tenant’s
Security System and the installation of the same shall be in compliance with
applicable governmental laws, rules, ordinances and regulations; (iv) in no
event shall Tenant’s installation and use of the Security System interfere with
the use and quiet enjoyment of the Common Areas and other tenanted areas within
the Building by Landlord, other tenants of the Building, and its and their
employees, guests, contractors, agents and invitees; (v)  Tenant provides Landlord with keys to any
new locks installed; and (vi) at the expiration or earlier termination of the
Term, the Security System placed or installed within the Premises by Tenant
shall be removed by Tenant at its sole cost and expense and all damage
(including the removal of existing door locks) to the Premises and Building
caused by the installation and removal of the Security System by Tenant shall
be immediately repaired by Tenant at its sole cost and expense using
Building-standard materials.

 

56.                                 Landlord
Renovation.  Landlord has advised Tenant that it intends
to perform certain renovation work in the Building (the “Renovations”).  Landlord agrees to use reasonable efforts to
commence the Renovations within a reasonable period of time and to diligently
complete such Renovations in a reasonable period of time once Landlord receives
all necessary permits.  The parties
acknowledge that the costs of such Renovations shall be included in Building
Expenses.

 

26

 

Notwithstanding Section 6.2.2.12, the
costs of any structural or roof work completed in connection with the
Renovations shall be included in Building Expenses provided that such costs are
amortized over twenty (20) years.

 

 

IN WITNESS WHEREOF, Landlord and Tenant have respectively affixed their
hands and seals to this Lease as of the day and year first above written.

 

 

	
  WITNESS OR ATTEST:

  	
   

  	
  LANDLORD:

  	
   

  
	
   

  	
   

  	
  ATRIUM BUILDING, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  (SEAL)

  
	
   

  	
   

  	
   

  	
  Roger A. Waesche, Jr.

  	
   

  
	
   

  	
   

  	
   

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WITNESS OR ATTEST:

  	
   

  	
  TENANT:

  	
   

  
	
   

  	
   

  	
  TESSCO TECHNOLOGIES, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  (SEAL)

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

STATE OF
MARYLAND,                     ,
TO WIT:

 

I HEREBY CERTIFY, that on
this       day of 
               ,
2003, before me, the undersigned Notary Public of the State, personally
appeared ROGER A. WAESCHE, JR., who acknowledged himself to be the Senior Vice
President of ATRIUM BUILDING, LLC, a Maryland limited liability company, known
to me (or satisfactorily proven) to be the person whose name is subscribed to
the within instrument, and acknowledged that he executed the same on behalf of
the corporation for the purposes therein contained as the duly authorized
Senior Vice President of the corporation by signing the name of the corporation
by himself as such Senior Vice President.

 

WITNESS my hand and Notarial Seal.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  	
   

  	
   

  
	
  My Commission Expires:

  	
   

  	
   

  

 

27

 

STATE OF
MARYLAND,                     ,
TO WIT:

 

I HEREBY CERTIFY, that on this
        day of
                     ,
2003, before me, the undersigned Notary Public of the State, personally
appeared
                     ,
known to me (or satisfactorily proven) to be the person whose name is
subscribed to the within instrument, and acknowledged himself/herself to be the
          of TESSCO TECHNOLOGIES,
INC. a
                     
corporation, and that he/she, as such
                     ,
being authorized so to do, executed the foregoing instrument on behalf of the
corporation by himself/herself as such
                     .

 

WITNESS my hand and Notarial Seal.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  	
   

  	
   

  
	
  My Commission Expires:

  	
   

  	
   

  

 

28

 

EXHIBIT “A”

to Agreement of Lease by and between

ATRIUM BUILDING, LLC, Landlord

and TESSCO TECHNOLOGIES, INC., Tenant

 

FLOOR PLAN

 

 

EXHIBIT “B”

to Agreement of Lease by and between

ATRIUM BUILDING, LLC, Landlord

and TESSCO TECHNOLOGIES, INC., Tenant

 

RULES AND REGULATIONS

 

To the extent that any of the following Rules and
Regulations, or any Rules and Regulations subsequently enacted conflict with
the provisions of the Lease, the provisions of the Lease shall control.

 

1.  Tenant shall not obstruct or permit its agents, clerks or
servants to obstruct, in any way, the sidewalks, entry passages, corridors,
halls, stairways or elevators of the Building, or use the same in any other way
than as a means of passage to and from the offices of Tenant; bring in, store,
test or use any materials in the Building which could cause a fire or an
explosion or produce any fumes or vapor; make or permit any improper noises in
the Building; smoke in the elevators, the Premises, the Building or the Common
Areas except in the exterior areas specifically designated by Landlord; throw
substances of any kind out of the windows or doors, or down the passages of the
Building, in the halls or passageways; sit on or place anything upon the window
sills; or clean the windows.

 

2.  Waterclosets and urinals shall not be used for any purpose
other than those for which they were constructed; and no sweepings, rubbish,
ashes, newspaper or any other substances of any kind shall be thrown into
them.  Waste and excessive or unusual use of electricity or water is
prohibited.

 

3.  Tenant shall not (i) obstruct the windows, doors, partitions
and lights that reflect or admit light into the halls or other places in the
Building, or (ii) inscribe, paint, affix, or otherwise display signs,
advertisements or notices in, on, upon or behind any windows or on any door,
partition or other part of the interior or exterior of the Building without the
prior written consent of Landlord which shall not be unreasonably
withheld.  If such consent be given by Landlord, any such sign,
advertisement, or notice shall be inscribed, painted or affixed by Landlord, or
a company approved by Landlord, but the cost of the same shall be charged to
and be paid by Tenant, and Tenant agrees to pay the same promptly, on demand.

 

4.  No contract of any kind with any supplier of towels, water,
ice, toilet articles, waxing, rug shampooing, venetian blind washing, furniture
polishing, lamp servicing, cleaning of electrical fixtures, removal of waste
paper, rubbish or garbage, or other like service shall be entered into by
Tenant, nor shall any vending machine of any kind be installed in the Building,
without the prior written consent of Landlord, which consent of Landlord shall
not be unreasonably withheld.

 

5.  When electric wiring of any kind is introduced, it must be
connected as directed by Landlord, and no stringing or cutting of wires shall
be allowed, except with the prior written consent of Landlord which shall not
be unreasonably withheld, and shall be done only by contractors approved by
Landlord.  The number and location of telephones, telegraph instruments,
electric appliances, call boxes, etc., shall be subject to Landlord’s approval. 
No tenants shall lay linoleum or other similar floor covering so that the same
shall be in direct contact with the floor of the Premises; and if linoleum or
other similar floor covering is desired to be used, an interlining of builder’s
deadening felt shall be first affixed to the floor by a paste or other
material, the use of cement or other similar adhesive material being expressly
prohibited.

 

6.  No additional lock or locks shall be placed by Tenant on any
door in the Building, without prior written consent of Landlord.  Two keys
will be furnished Tenant by Landlord; two additional keys will be supplied to
Tenant by Landlord, upon request, without charge; any additional keys requested
by Tenant shall be paid for by Tenant.  Tenant, its agents and employees,
shall not have any duplicate keys made and shall not change any locks. 
All keys to doors and washrooms shall be returned to Landlord at the
termination of the tenancy, and in the event of any loss of any keys furnished,
Tenant shall pay Landlord the cost thereof.

 

B-1

 

7.  Tenant shall not employ any person or persons other than
Landlord’s janitors for the purpose of cleaning the Premises, without prior
written consent of Landlord which shall not be unreasonably withheld. 
Landlord shall not be responsible to Tenant for any loss of property from the
Premises however occurring, or for any damage done to the effects of Tenant by
such janitors or any of its employees, or by any other person or any other cause.

 

8.  No bicycles, vehicles or animals of any kind (other than
animals to assist the disabled) shall be brought into or kept in or about the
Premises.

 

9.  Tenant shall not conduct, or permit any other person to
conduct, any auction upon the Premises; manufacture or store goods, wares or
merchandise upon the Premises, without the prior written approval of Landlord,
except the storage of usual supplies and inventory to be used by Tenant in the
conduct of its business; permit the Premises to be used for gambling; make any
unusual noises in the Building; permit to be played any musical instrument in
the Premises; permit to be played any radio, television, recorded or wired
music in such a loud manner as to disturb or annoy other tenants; or permit any
unusual odors to be produced upon the Premises.  Tenant shall not permit
any portion of the Premises to be used for the storage, manufacture, or sale of
intoxicating beverages, narcotics, tobacco in any form, or as a barber or
manicure shop.

 

10.  No awnings or other projections shall be attached to the
outside walls of the Building.  No curtains, blinds, shades or screens
shall be attached to or hung in, or used in connection with, any window or door
of the Premises, without the prior written consent of Landlord which consent
shall not be unreasonably withheld.  Such curtains, blinds and shades must
be of a quality, type, design, and color, and attached in a manner reasonably
approved by Landlord.

 

11.  Canvassing, soliciting and peddling in the Building are prohibited,
and Tenant shall cooperate to prevent the same.

 

12.  There shall not be used in the Premises or in the Building,
either by Tenant or by others in the delivery or receipt of merchandise, any
hand trucks except those equipped with rubber tires and side guards, and no
hand trucks will be allowed in passenger elevators.

 

13.  Tenant, before closing and leaving its Premises, shall ensure
that all entrance doors to same are locked.

 

14.  Landlord shall have the right to prohibit any advertising by
Tenant which in Landlord’s opinion tends to impair the reputation of the
Building or its desirability as a building for offices, and upon written notice
from Landlord, Tenant shall refrain from or discontinue such advertising.

 

15.  Landlord hereby reserves to itself any and all rights not
granted to Tenant hereunder, including, but not limited to, the following
rights which are reserved to Landlord for its purposes in operating the
Building:

 

(a)  the exclusive right to the use of the name
of the Building for all purposes, except that Tenant may use the name as its
business address and for no other purpose;

 

(b)  the right to change the name or address of
the Building, without incurring any liability to Tenant for so doing;

 

(c)  the right to install and maintain a sign or
signs on the exterior of the Building;

 

(d)  the exclusive right to use
or dispose of the use of the roof of the Building;

 

(e)  the non-exclusive right to use the area
above the ceiling of the Premises for the purpose of installing and maintaining
telecommunications, water lines, utility lines, other conduit, sprinklers,
drainlines, ductwork and HVAC connections and any other equipment necessary to
provide services to any area in the Building;

 

B-2

 

(f)  the right to limit the space on the
directory of the Building to be allotted to Tenant; and

 

(g)  the right to grant to anyone the right to
conduct any particular business or undertaking in the Building.

 

16.  As used herein the term “Premises” shall mean and refer to
the “Premises” as defined in Section 1 of the Lease.

 

17.  Tenant shall not operate
space heaters or other heating or ventilating equipment without the express
prior written consent of Landlord in each instance first obtained.  Tenant shall not install or operate any
electrical equipment, appliances or lighting fixtures in the Premises which are
not listed and labeled by Underwriter’s Laboratories or other testing
organization acceptable to Landlord.

 

B-3

 

EXHIBIT “C”

to Agreement of Lease by and between

ATRIUM
BUILDING, LLC, Landlord

and TESSCO TECHNOLOGIES, INC., Tenant

 

INVENTORY OF DB PROPERTY

 

•                  Raised flooring;

•                  DB furniture located in the Premises as of
the Effective Date;

•                  Voice, data and electrical wiring;

•                  Emergency generator and fuel storage tank;

•                  Vault;

•                  Fire suppression systems;

•                  Air handling equipment;

•                  Liebert UPS equipment;

•                  Liebert PDU equipment; and

•                  Cabinetry and shelving located in the
Premises as of the Effective Date.

 

 

EXHIBIT “D”

to Agreement of Lease by and between

ATRIUM BUILDING, LLC, Landlord

and TESSCO TECHNOLOGIES, INC., Tenant

 

ESTOPPEL CERTIFICATE

 

Tenant:                                                       TESSCO TECHNOLOGIES, INC.

 

To:                              ATRIUM BUILDING, LLC

c/o Corporate Office Properties Trust

Suite 400, 8815 Centre Park Drive

Columbia, Maryland  21045

 

Deutsche Bank Trust Company
Americas f/k/a Bankers Trust Company

200 Crescent Court, Suite
550

Dallas, Texas 75201

 

Re:                               [Building Address]

Linthicum, Maryland 21090

 

1.                                       TESSCO TECHNOLOGIES, INC., a
                        
corporation is the named Tenant (“Tenant”), and ATRIUM BUILDING, LLC is the
Landlord (“Landlord”) under a Lease dated
                        ,
located at the Property (“Property”) identified above.  The Lease, together with the amendments:                                                
(collectively, “Lease”) constitutes the entire agreement between Landlord and
Tenant with respect to the Property and the Premises (hereafter defined).  There are no other lease documents, commitments,
options or rights with respect to the Property or the Premises and there are no
other representations, warranties, agreements, concessions, commitments, or
other understandings between the Tenant and the Landlord regarding the Property
or the premises demised other than as set forth in the Lease or this paragraph
1.

 

2.                                       Tenant occupies Suite Number 100, with a
Rentable Square Footage Area of 93,549 (the “Premises”).  Tenant’s Pro Rata Share of the Property is
          %

 

3.                                       The Term of the Lease commenced
                        
and will expire
                        .  Tenant is the actual occupant in possession
of the Premises and has not sublet, assigned or hypothecated its leasehold
interest.  All improvements to be
constructed on the Premises by Landlord have been completed and accepted by
Tenant and any tenant construction or improvement allowances have been paid.

 

4.                                       As of this date, no breach or default exists
on the part of Tenant under the Lease, and there exists no facts that, with the
passage of time or the giving of notice, or both, would constitute a
default.  To the best knowledge of
Tenant, no breach or default exists on the part of Landlord under the Lease,
and there exists no facts that, with the passage of time or the giving of notice,
or both, would constitute a default. 
Neither Tenant nor Landlord has commenced any action or given or
received any notice for the purpose of terminating the Lease.

 

5.                                       Base Rent is currently payable in the amount
of
                        
per month (which includes an operating expense stop based on the greater of
                        
per square foot or                         
actual operating expenses, and a real estate tax expense stop based on the
greater of                         
per square foot or
                        
actual real estate taxes).  Pursuant to
the Lease, Tenant is obligated to pay as additional rent its pro-rata share of
operating expenses and real estate taxes which exceed the operating expense
stop and real estate expense stop set forth in the Lease.   The monthly base rent has been paid through
                        ,
except:
                                                                        .

 

D-1

 

6.                                       No rent has been paid in advance, and Tenant
has no claim or defense against Landlord under the Lease and is asserting no
offsets or credits against either the rent or Landlord.  Tenant has no claim against Landlord for any
security or other deposits except $ which was paid pursuant to the
Lease.  Tenant has no right to any free
rent, rent abatement, rent credit, or other rent concession.

 

7.                                       Tenant has no right to renew or extend the
term of the Lease, or to expand the size of the Premises,
except:                                                .

 

Tenant has no interest in or option or
preferential right to purchase all or any part of the Premises or the Property
of which it forms a part, other than its right to lease the Premises as Tenant
under the Lease.

 

8.                                       Tenant has no rights of termination or
expansion with the terms of the Lease
except:                                                .

 

9.                                       All insurance required of Tenant by the Lease
has been provided by Tenant and all premiums paid.

 

10.                                 There has not been filed by or against Tenant
a petition in bankruptcy, voluntary or otherwise, any assignment for the
benefit of creditors, any petition seeking reorganization or arrangement under
the bankruptcy laws of the United States or any state thereof, or any other action
brought under the bankruptcy laws with respect to Tenant.

 

11.                                 Tenant has not received any notice of
Landlord’s prior sale, transfer, or assignment, hypothecation or pledge of the
Lease or any of the rents or other amounts to be paid by Tenant pursuant
thereto.

 

12.                                 Tenant has received no notice from any
governmental authority or other person or party claiming a violation of, or
requiring compliance with, any Federal, State or local statute, ordinance, rule
or regulation or the requirement of law for environmental contamination at the
Premises, to the best knowledge of Tenant, the Tenant is in compliance with all
applicable provisions of the Industry Site Recovery Act, and no hazardous,
toxic, or polluting substances or wastes have been generated, treated,
manufactured, stored, refined, used, handled, transported, released, spilled,
disposed of or deposited by Tenant on, in or under the Premises.

 

This Tenant Estoppel Certificate may be
relied upon by the Landlord, Bankers Trust Company and its and their respective
successors and assigns.

 

	
  DATED:        ,
  200

  	
   

  
	
   

  	
   

  
	
  WITNESS/ATTEST:

  	
  TESSCO
  TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  BY:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							

 

D-2

 

EXHIBIT “E”

to Agreement of Lease by and between

ATRIUM BUILDING, LLC, Landlord

and TESSCO TECHNOLOGIES, INC., Tenant

 

FORM OF

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

 

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

 

Note:  This Subordination,
Non-Disturbance and Attornment Agreement results in your leasehold estate in
the Property becoming subject to and of lower priority than the lien of some
other or later security instrument.

 

 

THIS AGREEMENT is entered into by and among TESSCO TECHNOLOGIES, INC. (“Tenant”), ATRIUM BUILDING, LLC, a Maryland limited liability
company (“Landlord”), and DEUTSCHE
BANK TRUST COMPANY AMERICAS f/k/a BANKERS TRUST COMPANY, a New York Banking
corporation (“Beneficiary”).

 

R E C I T A L S:

 

A.                                   Tenant has entered into a lease (the “Lease”)
covering a portion of the real property described on Exhibit A hereto (the “Property”).  The Lease and the premises leased thereunder are more
particularly described on Exhibit B
hereto (the “Premises”).

 

B.                                     Pursuant to that certain Second Amended and
Restated Senior Secured Credit Agreement dated March 8, 2002, as amended from
time to time, Beneficiary and certain other financial institutions that are or
may become parties to such agreements (collectively “Lenders”) have made or
agreed to make a revolving loan and
to extend certain other financial accommodations (collectively the “Loan”) to
an entity of which Landlord is a subsidiary, CORPORATE
OFFICE PROPERTIES, L.P., a Delaware limited partnership, and to
certain of its subsidiaries.  The Loan
is evidenced by promissory notes (collectively, as amended, the “Notes”), which
Notes are or will be secured by a mortgage or deed of trust in favor of
Beneficiary covering the Property (the “Mortgage”).

 

C.                                     In order to induce Beneficiary to make the
Loan and to maintain the financial accommodations extended thereunder, the
parties hereto have agreed to subordinate the Lease to the lien of the Mortgage
on the terms set forth in this Agreement. 
In order to induce Tenant to execute and deliver this Agreement,
Beneficiary has agreed not to disturb Tenant’s possession of the Premises under
certain circumstances set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants
contained herein and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.                                       Subordination. 
Notwithstanding anything to the contrary set forth in the Lease, the
Lease and the leasehold estate created thereby and all of Tenant’s rights
thereunder shall be and shall at all times remain subject, subordinate and
inferior to the Mortgage and the lien thereof, and all rights of Beneficiary
thereunder and to any and all renewals, modifications, consolidations,
replacements and extensions thereof.

 

2.                                       Acknowledgments and
Agreements by Tenant.  Tenant acknowledges and agrees that:

 

2.1.                              Landlord has executed and delivered to
Beneficiary a Mortgage, including an assignment of the Lease and the rents
thereunder, and certain other agreements evidencing and securing the Loan.  Tenant hereby recognizes and agrees to honor
such assignment of the

 

E-1

 

Lease and rents thereunder.  If Beneficiary notifies Tenant in writing of
a default under the Mortgage and demands that Tenant pay its rent and all other
sums due under the Lease to the Beneficiary, Tenant shall honor such written
demand and pay its rent and all other sums due under the Lease directly to
Beneficiary or as otherwise required pursuant to such notice.  Beneficiary shall indemnify, defend and hold
harmless Tenant from and against any losses, liabilities, claims or causes of
action Tenant may suffer as a result of compliance with Beneficiary’s notice.

 

2.2.                              Tenant shall send a copy of any notice or
statement required to be delivered under the Lease to Beneficiary at the same
time such notice or statement is sent to Landlord, in the manner specified in
this Agreement.

 

2.3.                              In the event of any act or omission by
Landlord which would give Tenant the right, either immediately or after the
lapse of time, to terminate the Lease or to claim a partial or total eviction,
Tenant will not exercise any such right until:

 

2.3.1                        it has given written notice of such act or
omission to Beneficiary pursuant to the foregoing Section 2.2; and

 

2.3.2.                     the same period of time as is given to
Landlord under the Lease to cure such act or omission shall have elapsed
following such giving of notice to Beneficiary.

 

 

2.4.                              Tenant has no right or option to purchase the
Premises or the Property, or any portion thereof or any interest therein.  To the extent that Tenant hereafter acquires
any such right or option to purchase the Premises or the Property, the same is
hereby acknowledged to be subject and subordinate to the Mortgage and is hereby
waived and released as against Beneficiary except to the extent Beneficiary
agrees in writing to the contrary.

 

2.5.                              Beneficiary, in making any disbursements to
Landlord, is under no obligation or duty to oversee or direct the application
of the proceeds of such disbursements, and such proceeds may be used by
Landlord for purposes other than improvement of the Property.

 

2.6.                              This Agreement satisfies any condition or
requirement in the Lease relating to the grant of a non-disturbance agreement
by Beneficiary.

 

3.                                       Foreclosure.  In
the event of foreclosure of the Mortgage, or upon a transfer of the Property by
conveyance in lieu of foreclosure, then:

 

3.1.  So long as Tenant complies with this
Agreement and is not in default under the terms, covenants or conditions of the
Lease (beyond the expiration of any applicable notice and cure periods), Tenant
may continue in occupancy of the Premises on the terms and conditions contained
in the Lease for the balance of the term of the Lease.  Tenant shall attorn to and accept any
successor owner of the Building as landlord under the Lease, and be bound by
and perform all of the obligations imposed by the Lease, and any successor
owner of the Property will not disturb the possession of Tenant, and will be
bound by all of the obligations imposed on the Landlord by the Lease.  Any purchaser at a foreclosure sale, by deed
in lieu thereof, or any other successor owner of the Property shall not be:

 

3.1.1.                     liable for any act or omission of a prior
landlord (including Landlord); or

 

3.1.2.                     subject to any offsets or defenses which
Tenant might have against any prior landlord (including Landlord); or

 

3.1.3.                     bound by any rent or additional rent which
Tenant might have paid in advance to any prior landlord (including Landlord)
for a period in excess of one month or any security deposit or other prepaid

 

E-2

 

charge which Tenant might have paid in advance to any prior landlord
(including Landlord) other than the security deposit, and then only to the
extent actually turned over to such successor owner; or

 

3.1.4.                     bound by any agreement or material
modification of the Lease made without the written consent of Beneficiary.

 

3.2.                              Upon the written request of either
Beneficiary or Tenant to the other given following any foreclosure or
conveyance in lieu thereof, the parties agree to execute a lease of the
Premises upon the same terms and conditions as the Lease between Landlord and
Tenant which lease shall cover any unexpired term of the Lease existing prior
to such foreclosure or conveyance in lieu of foreclosure.

 

4.                                       Acknowledgments and
Agreements by Landlord.  Landlord, as landlord under the Lease and
mortgagor under the Mortgage, acknowledges and agrees for itself and its heirs,
successors and assigns that:

 

4.1.                              This Agreement does not waive any of
Beneficiary’s rights under the Mortgage, or in any modify or release Landlord
from its obligations to comply with the Mortgage;

 

4.2.                              The Mortgage remains unmodified and in full
force and effect; and

 

4.3.                              Landlord hereby irrevocably directs Tenant to
recognize and honor Landlord’s assignment to Beneficiary of the Lease and the
rents thereunder.  If Beneficiary
notifies Tenant in writing of a default under the Mortgage and demands that
Tenant pay its rent and all other sums due under the Lease to Beneficiary,
Landlord hereby irrevocably directs Tenant to honor such written demand and pay
its rent and all other sums due under the Lease directly to Beneficiary or as
otherwise required pursuant to such notice. 
Landlord shall indemnify, defend and hold harmless Tenant from and
against any losses, liabilities, claims or causes of action Tenant may suffer
as a result of compliance with Beneficiary’s notice.

 

5.                                       Obligations of Beneficiary. 
Beneficiary shall have no obligation or incur any liability with respect
to the erection or completion of the improvements in which the Premises is
located or for completion of the Premises or any improvements for Tenant’s use
and occupancy.  Anything herein or in the
Lease to the contrary notwithstanding, no successor owner of the Property shall
have any obligation, or incur any liability, beyond the then existing interest,
if any, of the Purchaser in the Property and Tenant shall look exclusively to
such interest of the Purchaser, if any, in the Property for the payment and
discharge of any obligations imposed upon the Purchaser hereunder or under the
Lease, and the Purchaser is hereby released and relieved of any other liability
hereunder and under the Lease.  As regards
the Purchaser, Tenant shall look solely to the estate or interest owned by the
Purchaser in the Property and Tenant will not collect or attempt to collect any
such judgment out of any other assets of the Purchaser.  Nothing contained in this Section impairs,
limits or otherwise modifies the obligations of Landlord to Tenant under the
Lease.

 

6.                                       No Merger. 
Landlord, Tenant and Beneficiary agree that unless Beneficiary otherwise
consents in writing, Landlord’s estate in and to the Property and the leasehold
estate created by the Lease shall not merge but shall remain separate and
distinct, notwithstanding the union of the estates either in Landlord or Tenant
or any third party by purchase, assignment or otherwise.

 

7.                                       Notice.  All
notices and other communications to be made hereunder shall be in writing and
shall be delivered to the addresses set forth below by any of the following
means: (a) personal service or receipted courier service; (b) telecopying (if
confirmed in writing sent by the methods specified in clauses (a), (c) or (d)
of this Section), (c) registered or certified first class mail, return receipt
requested, or (d) nationally-recognized overnight delivery service.  Such addresses may be changed by notice to
the other parties given in the same manner as provided above.  Any notice or other communication sent
pursuant to clause (a) or (b) hereof shall be

 

E-3

 

deemed
received upon such personal service or upon dispatch by electronic means, if
sent pursuant to subsection (c) shall be deemed received five (5) days
following deposit in the mail and/or (d) if sent pursuant to subsection (d)
shall be deemed received the next succeeding business day following deposit
with such nationally recognized overnight delivery service.

 

	
  To Beneficiary:

  	
   

  	
  Deutsche Bank Trust
  Company Americas

  
	
   

  	
   

  	
  200 Crescent Court, Suite
  550

  
	
   

  	
   

  	
  Dallas, Texas 75201

  
	
   

  	
   

  	
  Attention: Ms. Linda Davis

  
	
   

  	
   

  	
  Telecopier: 214-740-7904

  
	
   

  	
   

  	
   

  
	
  To Landlord:

  	
   

  	
  c/o Corporate Office
  Properties, L.P.

  
	
   

  	
   

  	
  8815 Centre Park Drive,
  Suite 400

  
	
   

  	
   

  	
  Columbia, Maryland 21045

  
	
   

  	
   

  	
  Telecopier: 410-992-7534

  
	
   

  	
   

  	
   

  
	
  To Tenant:

  	
   

  	
  TESSCO TECHNOLOGIES, INC.

  
	
   

  	
   

  	
  375 West Padonia Road

  
	
   

  	
   

  	
  Timonium, Maryland 21093

  
	
   

  	
   

  	
  Attention: Finance Team

  
	
   

  	
   

  	
  Telecopier:                          

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Neuberger, Quinn, Gielen,
  Rubin & Gibber, P.A.

  
	
   

  	
   

  	
  One South Street, 27th
  Floor

  
	
   

  	
   

  	
  Baltimore, Maryland
  21202-3282

  
	
   

  	
   

  	
  Attn:  Richard Rubin

  
	
   

  	
   

  	
  Telecopier:  (410) 332-8562.

  

 

 

8.                                       Miscellaneous.

 

8.1.                              This Agreement supersedes any inconsistent
provision of the Lease.

 

8.2.                              Nothing contained in this Agreement shall be
construed to derogate from or in any way impair or affect the lien and charge
of the Mortgage.

 

8.3.                              This Agreement shall inure to the benefit of
the parties hereto, their respective successors and permitted assigns; provided
however, that in the event of the assignment or transfer of the interest of
Beneficiary, all obligations and liabilities of Beneficiary under this
Agreement shall terminate, and thereupon all such obligations and liabilities
shall be the responsibility of the party to whom Beneficiary’s interest is
assigned or transferred.  The interest
of Tenant under this Agreement may be assigned or transferred in connection
with a permitted assignment or transfer of Tenant’s interest under the Lease.

 

8.4.                              This Agreement is the whole and only
agreement with regard to the subjection and subordination of the Lease and the
leasehold estate created thereby, together with all rights and privileges of
Tenant thereunder, to the lien or charge of the Mortgage and all related loan
and security documents and shall supersede and cancel, but only insofar as
would affect the priority between the Lease and the Mortgage, any prior
agreements as to such subjection or subordination, including, but not limited
to, those provisions contained in the Lease which provide for the subjection or
subordination of the Lease and the leasehold estate created thereby to a
mortgage or mortgages.

 

8.5.                              This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed
to be an original and all of which counterparts taken together shall constitute
but one and the same instrument. 
Signature and acknowledgments pages may be detached from the
counterparts and attached to a single copy of this Agreement to physically form
one document, which may be recorded.

 

E-4

 

8.6.                              This Agreement may not be modified orally or
in any manner other than by agreement in writing signed by the parties hereto
or their respective successors in interest.

 

8.7.                              If any legal action or proceeding is
commenced to interpret or enforce the terms of, or obligations arising out of,
this Agreement, or to recover damages for the breach thereof, the party
prevailing in any such action or proceeding shall be entitled to recover from
the non-prevailing party all reasonable attorney’s fees, costs and expenses
incurred by the prevailing party.

 

8.8.                              This Agreement shall be governed by and
construed in accordance with the laws of the State in which the Property is
located.

 

 

IN WITNESS WHEREOF, the parties have executed this Subordination,
Non-Disturbance and Attornment Agreement as of
                              ,
2003.

 

NOTICE: THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT CONTAINS PROVISIONS WHICH ALLOW THE PERSON OBLIGATED ON THE LEASE TO
OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN
IMPROVEMENT OF THE PROPERTY.

IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT, THE PARTIES CONSULT
WITH THEIR ATTORNEYS WITH RESPECT THERETO.

 

	
  BENEFICIARY:

  	
   

  	
  DEUTSCHE BANK TRUST
  COMPANY AMERICAS,

  
	
   

  	
   

  	
  a New York banking
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TENANT:

  	
   

  	
  TESSCO TECHNOLOGIES, INC.

  
	
   

  	
   

  	
  a 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LANDLORD:

  	
   

  	
  ATRIUM BUILDING, LLC

  
	
   

  	
   

  	
  a Maryland limited
  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
									

 

E-5

 

ACKNOWLEDGMENTS

 

STATE OF
                  ,
CITY/COUNTY OF
                  ,
TO WIT:

 

I HEREBY CERTIFY that on this
          day of
                                    ,
2003, before me, the subscriber, a Notary Public of the State and City/County
aforesaid, personally appeared
                                                      ,
known to me or satisfactorily proven to be the individual whose name is
subscribed above, who acknowledged himself/herself to be the
                  
of DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, and
that he/she, as such
                  ,
being authorized so to do, executed the foregoing instrument on behalf of such
Corporation by signing the name of such Corporation by himself/herself as such
                  .

 

WITNESS, my Hand and Notarial Seal.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  	
   

  	
   

  
	
  My Commission Expires:

  	
   

  	
   

  

 

STATE OF
                      ,
CITY/COUNTY OF
                      ,
TO WIT:

 

                                                I HEREBY CERTIFY that on this
         day of
                                            ,
2003, before me, the subscriber, a Notary Public of the State and City/County
aforesaid, personally appeared
                                            ,
known to me or satisfactorily proven to be the individual whose name is
subscribed above, who acknowledged himself/herself to be the
                      
of TESSCO TECHNOLOGIES, INC., a
                      
corporation, and that he/she, as such
                      ,
being authorized so to do, executed the foregoing instrument on behalf of such
Corporation by signing the name of such Corporation by himself/herself as such
                      .

 

WITNESS, my Hand and Notarial Seal.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  	
   

  	
   

  
	
  My Commission Expires:

  	
   

  	
   

  

 

STATE OF MARYLAND, COUNTY OF HOWARD, TO WIT:

 

I HEREBY CERTIFY that on this        day
of
                         ,
2003, before me, the subscriber, a Notary Public of the State and City/County
aforesaid, personally appeared ROGER A. WAESCHE, JR., known to me or
satisfactorily proven to be the individual whose name is subscribed above, who
acknowledged himself to be the Senior Vice President of ATRIUM BUILDING, LLC, a
Maryland limited liability company, as such Senior Vice President, being
authorized so to do, executed the foregoing instrument on behalf of such
limited liability company by signing the name of such limited liability company
by himself as such Senior Vice President.

 

WITNESS, my Hand and Notarial Seal.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  	
   

  	
   

  
	
  My Commission Expires:

  	
   

  	
   

  

 

E-6

 

EXHIBIT A

THE PROPERTY

 

E-7

 

EXHIBIT B

DESCRIPTION OF PREMISES AND LEASE DOCUMENTS

 

THE LEASE

 

Lease dated
           between ATRIUM
BUILDING, LLC as landlord and TESSCO TECHNOLOGIES, INC. as tenant, and all
amendments thereto.

 

THE PREMISES

 

Suite 100 in the Building.

 

E-8

 

EXHIBIT “F”

to Agreement of Lease by and between

ATRIUM BUILDING, LLC, Landlord

and TESSCO TECHNOLOGIES, INC., Tenant

 

Building Expense Exclusions

 

The following expenses
should be excluded from Building Expenses:

 

(i)                                     Costs
attributable to seeking and obtaining new tenants as well as retaining existing
tenants, such as advertising, brokerage commissions, architectural,
engineering, attorney’s fees not incurred in connection with the normal
operation of the Building, capital renovations and improvements;

 

(ii)                                  Costs
attributable to enforcing leases against tenants in the Building, such as
attorney’s fees, court costs, adverse judgments, and similar expenses;

 

(iii)                               Costs
that are reimbursable to the Landlord by tenants as a result of provisions
contained in their specific lease, such as excessive use of utilities;

 

(iv)                              Costs
for alteration and additions that are in the nature of capital improvements,
unless amortized in accordance with Section 11 of the Lease;

 

(v)                                 Depreciation
and amortization of debt;

 

(vi)                              Costs
incurred due to violation by the Landlord of any of the terms and conditions of
any leases in the Building;

 

(vii)                           Profit
paid to subsidiaries or affiliates of the Landlord for management services or materials
to the extent that the cost of those items would not have been paid had the
services and materials been provided by unaffiliated parties on a competitive
basis;

 

(viii)                        Interest
on any mortgages of the Landlord and rental under any ground or underlying
leases;

 

(ix)                                Any
compensation paid to clerks, attendants or other persons in commercial
concessions operated by the Landlord;

 

(x)                                   Rentals
and other related expenses incurred in leasing air conditioning systems,
elevators, or other equipment ordinarily considered to be of a capital nature,
except equipment used in providing janitorial services not affixed to the
building, and except when needed in connection with normal repairs and
maintenance of the Building;

 

(xi)                                All
items and services for which tenants reimburse the Landlord or pay third
persons or which the Landlord provides selectively to one or more tenants
without reimbursement;

 

(xii)                             Advertising
and promotional expenditures unless part of a specific marketing plan agreed
upon by the Tenant;

 

(xiii)                          Repairs
and other work occasioned by fire, windstorm or other casualty that the
Landlord is reimbursed by insurance that was required to be carried under the
Lease or for which the Landlord would have been reimbursed had such required
insurance been carried;

 

(xiv)                         Cost
incurred in operating and maintaining the Building’s parking facilities if the
Landlord charges for parking, or alternatively, uses the income from the
parking facility as a credit against operating expenses;

 

(xv)                            Any
costs, fines or penalties incurred due to violations by Landlord of any
governmental rule or authority;

 

(xvi)                         Costs for
sculpture, paintings or other objects of art;

 

(xvii)                      Wages,
salaries or other compensation paid to any executive employee above the grade
of Property Manager;

 

(xviii)                   The cost of
correcting any code violations by the Landlord or in the Building to the extent
such codes are in effect prior to the Commencement Date;

 

(xix)                           Costs
attributable to repairing items that are covered by warranties; and

 

(xx)                              Repairs
and maintenance performed in a tenant’s exclusive space and not in the common
areas.Exhibit 10.1

 

 

$400,000,000

 

364-DAY CREDIT AGREEMENT

 

 

CHEVRON PHILLIPS CHEMICAL
COMPANY LLC,

a Borrower,

 

 

CHEVRON PHILLIPS CHEMICAL
COMPANY LP,

a Borrower,

 

 

BARCLAYS BANK PLC,

Administrative Agent,

 

 

THE ROYAL BANK OF SCOTLAND
plc,

Syndication Agent,

 

 

THE BANK OF NOVA SCOTIA,

 

THE BANK OF TOKYO-MITSUBISHI
LTD.,

 

and,

 

SUMITOMO MITSUI BANKING
CORPORATION,

Co-Documentation Agents

 

Dated
as of August 28, 2003

 

 

BARCLAYS CAPITAL,

as Co-Lead Arranger and Book Manager

 

THE ROYAL BANK OF SCOTLAND
plc,

as Co-Lead Arranger

 

 

TABLE OF
CONTENTS

 

	
  SECTION 1.

  	
  DEFINITIONS

  
	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Defined Terms

  
	
   

  	
   

  	
   

  
	
   

  	
  1.2

  	
  Other Definitional
  Provisions

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  AMOUNT AND TERMS OF COMMITMENTS

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Commitment

  
	
   

  	
   

  	
   

  
	
   

  	
  2.2

  	
  Repayment of
  Loans; Evidence of Debt

  
	
   

  	
   

  	
   

  
	
   

  	
  2.3

  	
  Procedure for
  Revolving Credit Borrowing

  
	
   

  	
   

  	
   

  
	
   

  	
  2.4

  	
  Same
  Day Loans

  
	
   

  	
   

  	
   

  
	
   

  	
  2.5

  	
  Termination or
  Reduction of Commitments

  
	
   

  	
   

  	
   

  
	
   

  	
  2.6

  	
  Optional and
  Mandatory Prepayments

  
	
   

  	
   

  	
   

  
	
   

  	
  2.7

  	
  Conversion and
  Continuation Options

  
	
   

  	
   

  	
   

  
	
   

  	
  2.8

  	
  Maximum Number of Tranches

  
	
   

  	
   

  	
   

  
	
   

  	
  2.9

  	
  Fees

  
	
   

  	
   

  	
   

  
	
   

  	
  2.10

  	
  Interest
  Rate

  
	
   

  	
   

  	
   

  
	
   

  	
  2.11

  	
  Computation of
  Interest and Fees

  
	
   

  	
   

  	
   

  
	
   

  	
  2.12

  	
  Inability to
  Determine Interest Rate

  
	
   

  	
   

  	
   

  
	
   

  	
  2.13

  	
  Pro Rata Treatment and
  Payments

  
	
   

  	
   

  	
   

  
	
   

  	
  2.14

  	
  Increased
  Costs

  
	
   

  	
   

  	
   

  
	
   

  	
  2.15

  	
  Illegality

  
	
   

  	
   

  	
   

  
	
   

  	
  2.16

  	
  Taxes

  
	
   

  	
   

  	
   

  
	
   

  	
  2.17

  	
  Break Funding Payments

  
	
   

  	
   

  	
   

  
	
   

  	
  2.18

  	
  Extension
  of 364-Day Commitment Termination Date

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  REPRESENTATIONS AND
  WARRANTIES

  
	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Existence and Power

  
	
   

  	
   

  	
   

  
	
   

  	
  3.2

  	
  Requisite
  and Governmental Authorization; Contravention

  
	
   

  	
   

  	
   

  
	
   

  	
  3.3

  	
  Enforceability

  
	
   

  	
   

  	
   

  
	
   

  	
  3.4

  	
  Litigation

  
	
   

  	
   

  	
   

  
	
   

  	
  3.5

  	
  Financial
  Statements; No Material Change

  
	
   

  	
   

  	
   

  
	
   

  	
  3.6

  	
  Employee Benefit Plans

  
	
   

  	
   

  	
   

  
	
   

  	
  3.7

  	
  Taxes

  
	
   

  	
   

  	
   

  
	
   

  	
  3.8

  	
  Material Subsidiaries

  

 

i

 

	
   

  	
  3.9

  	
  Investment Company Act

  
	
   

  	
   

  	
   

  
	
   

  	
  3.10

  	
  Regulation
  U

  
	
   

  	
   

  	
   

  
	
   

  	
  3.11

  	
  Compliance with Laws

  
	
   

  	
   

  	
   

  
	
   

  	
  3.12

  	
  Purpose
  of Loans

  
	
   

  	
   

  	
   

  
	
  SECTION
  4.

  	
  CONDITIONS
  PRECEDENT

  
	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Conditions to
  Effectiveness of Agreement

  
	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
  Conditions to Each Loan

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  AFFIRMATIVE
  COVENANTS OF THE BORROWERS

  
	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Obligations

  
	
   

  	
   

  	
   

  
	
   

  	
  5.2

  	
  Financial Reporting
  Requirements

  
	
   

  	
   

  	
   

  
	
   

  	
  5.3

  	
  Notices

  
	
   

  	
   

  	
   

  
	
   

  	
  5.4

  	
  Maintenance of
  Property; Insurance

  
	
   

  	
   

  	
   

  
	
   

  	
  5.5

  	
  Compliance with Laws

  
	
   

  	
   

  	
   

  
	
   

  	
  5.6

  	
  Books
  and Records

  
	
   

  	
   

  	
   

  
	
   

  	
  5.7

  	
  Further Assurances

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  NEGATIVE COVENANTS
  OF THE BORROWERS

  
	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Negative
  Pledge

  
	
   

  	
   

  	
   

  
	
   

  	
  6.2

  	
  Consolidations,
  Mergers and Sales of Assets

  
	
   

  	
   

  	
   

  
	
  SECTION
  7.

  	
  EVENTS OF
  DEFAULT

  
	
   

  	
   

  	
   

  
	
  SECTION
  8.

  	
  THE ADMINISTRATIVE AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Appointment
  of Administrative Agent; No Other Duties

  
	
   

  	
   

  	
   

  
	
   

  	
  8.2

  	
  Delegation of Duties

  
	
   

  	
   

  	
   

  
	
   

  	
  8.3

  	
  Exculpatory Provisions

  
	
   

  	
   

  	
   

  
	
   

  	
  8.4

  	
  Reliance by
  Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  8.5

  	
  Notice
  of Default

  
	
   

  	
   

  	
   

  
	
   

  	
  8.6

  	
  Non-Reliance
  on Administrative Agent and Other Lenders

  
	
   

  	
   

  	
   

  
	
   

  	
  8.7

  	
  Indemnification

  
	
   

  	
   

  	
   

  
	
   

  	
  8.8

  	
  Administrative
  Agent in Its Individual Capacity

  
	
   

  	
   

  	
   

  
	
   

  	
  8.9

  	
  Successor
  or Substitute Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  8.10

  	
  Syndication
  Agent; Co-Documentation Agents; Co-Lead Arrangers

  
	
   

  	
   

  	
   

  
	
  SECTION
  9.

  	
  MISCELLANEOUS

  

 

ii

 

	
   

  	
  9.1

  	
  Amendments and Waivers

  
	
   

  	
   

  	
   

  
	
   

  	
  9.2

  	
  Notices

  
	
   

  	
   

  	
   

  
	
   

  	
  9.3

  	
  No Waiver; Cumulative
  Remedies

  
	
   

  	
   

  	
   

  
	
   

  	
  9.4

  	
  Confidentiality

  
	
   

  	
   

  	
   

  
	
   

  	
  9.5

  	
  Payment of
  Expenses; Indemnification

  
	
   

  	
   

  	
   

  
	
   

  	
  9.6

  	
  Successors
  and Assigns; Participations; Purchasing Lenders

  
	
   

  	
   

  	
   

  
	
   

  	
  9.7

  	
  Adjustments; Set-off

  
	
   

  	
   

  	
   

  
	
   

  	
  9.8

  	
  Counterparts

  
	
   

  	
   

  	
   

  
	
   

  	
  9.9

  	
  GOVERNING
  LAW

  
	
   

  	
   

  	
   

  
	
   

  	
  9.10

  	
  Jurisdiction; Venue

  
	
   

  	
   

  	
   

  
	
   

  	
  9.11

  	
  Survival and
  Termination of Agreement

  
	
   

  	
   

  	
   

  
	
   

  	
  9.12

  	
  Entire
  Agreement

  
	
   

  	
   

  	
   

  
	
   

  	
  9.13

  	
  WAIVER OF JURY TRIAL

  
	
   

  	
   

  	
   

  
	
   

  	
  9.14

  	
  Severability

  
	
   

  	
   

  	
   

  
	
   

  	
  9.15

  	
  Joint and Several Liability

  

 

	
  SCHEDULE
  I

  	
  Lender
  Information

  
	
   

  	
   

  	
   

  
	
  ANNEX A

  	
  Pricing Grid

  
	
   

  	
   

  
	
  EXHIBIT
  A

  	
  Form
  of Note

  
	
  EXHIBIT B

  	
  Form of Assignment
  and Acceptance

  
	
  EXHIBIT
  C

  	
  Form
  of Closing Certificate

  
	
  EXHIBIT
  D

  	
  Form
  of Secretary’s Certificate

  
	
  EXHIBIT E-1

  	
  Form of Opinion
  of Counsel to the Borrowers

  
	
  EXHIBIT E-2

  	
  Form of Opinion
  of Counsel to the Borrowers

  
	
  EXHIBIT F

  	
  Form of Borrowing Request

  
	
  EXHIBIT G

  	
  Form of Exemption
  Certificate

  
	
  EXHIBIT H

  	
  Form of Same Day
  Borrowing Request

  
	
  EXHIBIT I

  	
  Form of
  Conversion or Continuation Request

  
			

 

iii

 

364-DAY CREDIT AGREEMENT,
dated as of August 28, 2003, among CHEVRON PHILLIPS CHEMICAL COMPANY LLC, a
Delaware limited liability company (the “LLC”), CHEVRON PHILLIPS
CHEMICAL COMPANY LP, a Delaware limited partnership which is wholly-owned,
indirectly, by the LLC (the “LP”; and together with the LLC, the
“Borrowers” and, each, a “Borrower”), the several lenders from time to
time parties to this Agreement (collectively, the “Lenders”;
individually, a “Lender”), BARCLAYS BANK PLC, as administrative agent
(the “Administrative Agent”), THE ROYAL BANK OF SCOTLAND plc, as
syndication agent (the “Syndication Agent”), and THE BANK OF NOVA
SCOTIA, THE BANK OF TOKYO-MITSUBISHI LTD. and SUMITOMO MITSUI BANKING
CORPORATION, as co-documentation agents (each a “Co-Documentation Agent”
and together the “Co-Documentation Agents”).

 

The parties hereto hereby
agree as follows:

 

SECTION 1.  DEFINITIONS

 

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

 

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

 

“Administrative Agent”:
as defined in the preamble.

 

“Administrative
Agent-Related Person”: as defined in subsection 8.3.

 

“Affiliate”: as to
any Person, any other Person that, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person.  For purposes of this definition, “control”
of a Person means the power, directly or indirectly, either to (a) vote 10% or
more of the securities having ordinary voting power for the election of
directors (or persons performing similar functions) of such Person or (b)
direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise.

 

“Agent’s/Arranger’s Fees”:
as defined in subsection 2.9(c).

 

“Agreement”: this
364-Day Credit Agreement, as amended, supplemented or otherwise modified from
time to time.

 

“Alternate Base Rate”:
for any day, a rate per annum equal to the greater of (a) the Prime Rate in
effect on such day or (b) the Federal Funds Effective Rate in effect on such
day plus 1⁄2 of 1%.  Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
“Federal Funds Effective Rate”: as used in this definition, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not

 

 

so published for any day that is a Business Day, the average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day
for such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.  “Prime Rate”: as used in this definition, the rate of interest
per annum publicly announced from time to time by Barclays Bank PLC as its
“prime rate” in New York City. Such “prime rate” is a rate set by Barclays Bank
PLC, based upon various factors, including Barclays Bank PLC’s cost and desired
return, general economic conditions and other factors, and is used as a reference
point for pricing some loans, which may be priced at, above, or below such
announced rate.  Any change in such rate
announced by Barclays Bank PLC, shall take effect at the opening of business on
the day specified in the public announcement of such change.

 

“Applicable Commitment
Fee Rate”: the “Applicable Commitment Fee Rate” determined in accordance
with the Pricing Grid.

 

“Applicable Eurodollar
Margin”: for each Eurodollar Loan, the applicable rate per annum set forth
on the Pricing Grid.

 

“Applicable Utilization
Fee Rate”: the “Applicable Utilization Fee Rate” determined in accordance
with the Pricing Grid.

 

“Assignment and
Acceptance”: an Assignment and Acceptance, substantially in the form of
Exhibit B; collectively, the “Assignments and Acceptances”.

 

“Available Commitment”:
as to any Lender, at a particular time, an amount equal to the excess, if any,
of (a) the amount of such Lender’s Commitment at such time, minus (b) the
aggregate unpaid principal amount at such time of all Loans of such Lender, and
minus (c) an amount equal to such Lender’s Commitment Percentage of the
aggregate unpaid principal amount at such time of all Same Day Loans, provided
that for purposes of calculating Available Commitments for purposes of
subsection 2.9(a), such amount under clauses (b) and (c) consisting of Same Day
Loans shall be zero; collectively, the “Available Commitments”.

 

“Borrower(s)”: as
defined in the preamble.

 

“Borrowing Date”: any
Business Day specified in a notice pursuant to subsection 2.3 as a date on
which a Borrower requests the Lenders to make Loans hereunder.

 

“Business Day”: a day
other than a Saturday, Sunday or other day on which commercial banks in New
York City or Houston, Texas, are authorized or required by law to close,
provided, that with respect to notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Loans, such day is also a
day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.

 

“Capital Stock”: with
respect to any Person, any and all shares, interests, participations, rights in
or other equivalents in the equity interests (however designated) in such
Person, and any warrants or options exercisable for, exchangeable for or
convertible into such an equity interest in such Person.

 

“ChevronTexaco”:
ChevronTexaco Corporation, a Delaware corporation.

 

2

 

“Closing Date”:
August 28, 2003.

 

“Code”: the Internal
Revenue Code of 1986, as amended from time to time.

 

“Co-Documentation Agent”:
as defined in the preamble.

 

“Co-Lead Arranger”:
means either Barclays Capital, the investment banking division of Barclays Bank
PLC or The Royal Bank of Scotland plc, each a Co-Lead Arranger and together the
“Co-Lead Arrangers”).

 

“Commitment”: as to
any Lender, its obligation to make Loans to the Borrowers pursuant to
subsection 2.1 and to make or participate in Same Day Loans pursuant to
subsection 2.4, in each case in an aggregate amount not to exceed at any one
time outstanding the amount set forth opposite such Lender’s name on Schedule
I, as such amount may change from time to time as provided herein; provided
that the Commitments shall not at any time exceed $400,000,000 in the
aggregate; collectively, the “Commitments”; provided further, that the
Commitments with respect to Same Day Loans shall not at any time exceed
$50,000,000 in the aggregate.

 

“Commitment Fee”: as
defined in subsection 2.9(a); collectively, the “Commitment Fees”.

 

“Commitment Percentage”:
at a particular time, as to any Lender, the percentage of the aggregate
Commitments in effect at such time constituted by such Lender’s Commitment.

 

“Commitment Period”:
the period from and including the Closing Date to but not including the 364-Day
Commitment Termination Date or such earlier date as all the Commitments shall
terminate as provided herein.

 

“Commitment Utilization
Percentage”: on any day the percentage equivalent to a fraction (a) the
numerator of which is the sum of the aggregate outstanding principal amount of
the Loans, excluding the Term-out Loans, and (b) the denominator of which is
the sum of the aggregate Commitments, excluding the aggregate Commitments with
respect to the Term-out Loans (or, on any day after termination of the
Commitments pursuant to Section 7, the aggregate Commitments in effect
immediately preceding such termination, excluding the aggregate Commitments
with respect to the Term-out Loans).

 

“Common Stock”: of
any Person means Capital Stock of such Person that does not rank prior, as to
the payment of dividends or as to the distribution of assets upon any voluntary
or involuntary liquidation, dissolution or winding-up of such Person, to shares
of Capital Stock of any other class of such Person.

 

“Confidential Information”:
as defined in subsection 9.4.

 

“ConocoPhillips”:
ConocoPhillips, a Delaware corporation.

 

“Consolidated Net Assets”:
at any date, the total amount (without duplication) of assets of the LLC and
its Subsidiaries after deducting therefrom (a) all current liabilities (without
duplication) of the LLC and its Subsidiaries (excluding any thereof which are
by their terms

 

3

 

extendible or renewable at the option of the LLC or the applicable
Subsidiary, as the case may be, to a time more than 12 months after the time as
of which the amount thereof is being computed), and (b) total prepaid expenses
and deferred charges of the LLC and its Subsidiaries.

 

“Continuing Lender”:
as defined in subsection 2.18(b).

 

“Debt”: as to any Person,
at any date, without duplication, (i) all obligations of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person to pay the deferred purchase price of property or services, except trade
accounts payable arising in the ordinary course of business, (iv) all
obligations of such Person as lessee under capital leases, and (v) all Debt of
others Guaranteed by such Person.

 

“Default”: any of the
events specified in Section 7, whether or not any requirement for the giving of
notice, the lapse of time, or both, or any other condition, has been satisfied.

 

“Dollars” and “$”:
dollars in lawful currency of the United States of America.

 

“Early Commitment
Termination Date”: as defined in subsection 2.5(b).

 

“EDGAR”: as defined
in subsection 5.2(a).

 

“Environmental Laws”:
mean any and all principles of common law and any and all laws, statutes,
ordinances, rules, regulations, orders, decrees, judgments, injunctions or
binding agreements of any Governmental Authority pertaining to the protection
or reclamation of the natural environment or to Hazardous Materials in any and
all jurisdictions in which the Borrowers and their Subsidiaries own property or
conduct business, including, without limitation, the Clean Air Act, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
the Federal Water Pollution Control Act, the Occupational Safety and Health Act
of 1970, the Resource Conservation and Recovery Act of 1976, the Safe Drinking
Water Act, the Toxic Substances Control Act, the Hazardous & Solid Waste
Amendments Act of 1984, the Superfund Amendments and Reauthorization Act of
1986, the Hazardous Materials Transportation Act, the Oil Pollution Act of
1990, any state or local laws implementing or substantially equivalent to the
foregoing federal laws, and all other environmental conservation or protection
laws, all as amended from time to time.

 

“ERISA”: the Employee
Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate”:
any trade or business (whether or not incorporated) that, together with either
Borrower, is treated as a single employer under Section 414 of the Code.

 

“ERISA Event”: (a)
any “reportable event”, as defined in Section 4043 of ERISA or the regulations
issued thereunder with respect to a Plan (other than an event for which the
30-day notice period is waived under the regulations); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c)
the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of
an application for a waiver of the minimum funding standard with respect to

 

4

 

any Plan; (d) the incurrence by either Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by either Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by either Borrower or any of its ERISA Affiliates
of any liability with respect to the withdrawal or partial withdrawal from any
Plan or Multiemployer Plan; or (g) the receipt by either Borrower or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from either
Borrower or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.

 

“Eurodollar”: when
used in reference to any Loan or borrowing, refers to whether such Loan, or the
Loans comprising such borrowing, are bearing interest at a rate determined by
reference to the Eurodollar Rate.

 

“Eurodollar Rate”:
with respect to an Interest Period pertaining to any Eurodollar Loan, the rate
of interest determined on the basis of the rate for deposits in Dollars for a
period equal to such Interest Period commencing on the first day of such
Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest
Period.  In the event that such rate
does not appear on such page of the Telerate screen (or otherwise on the
Telerate Service), the “Eurodollar Rate” with respect to such Eurodollar
borrowing for such Interest Period shall be the average of the rates at which
dollar deposits of $5,000,000 and for a maturity comparable to such Interest
Period are offered by the principal London offices of the Reference Banks (or,
if any Reference Bank does not at the time maintain a London office, the
principal London office of any affiliate of such Reference Bank) for
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.

 

“Event of Default”:
means any of the events described in Section 7.

 

“Excess Utilization Day”:
each day on which the Commitment Utilization Percentage exceeds 33%.

 

“Existing Commitment
Termination Date”: as defined in subsection 2.18(a).

 

“Fee Letters”: as
defined in subsection 2.9(c).

 

“GAAP”: generally
accepted accounting principles in the United States of America as in effect
from time to time.

 

“Governmental Authority”:
any nation or government, any state or other political subdivision thereof and
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

 

“Guarantee”: as to
any Person, any obligation, contingent or otherwise, of such Person directly or
indirectly guaranteeing any Debt or other obligation of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or

 

5

 

payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in
any other manner the obligee of such Debt or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part), provided that the term “Guarantee” shall not include endorsements for
collection or deposit in the ordinary course of business or performance, surety
and similar bonds or completion guarantees provided in the ordinary course of
business.  The term “Guarantee” used as
a verb has a corresponding meaning.

 

“Hazardous Materials”:
means (a) any chemicals, materials or substances defined or as included in the
definition of “hazardous substances,” “hazardous materials,” “toxic substances,”
or words of similar import, under any Environmental Law; (b) radioactive
materials (other than naturally occurring radioactive materials below threshold
regulated levels), asbestos in any form that is or could be friable,
polychlorinated biphenyls, radon, mercury, lead-based paint; and (c) regulated
constituents or substances in concentrations or levels that exceed numeric or
risk-based standards established pursuant to Environmental Laws.

 

“Highest Lawful Rate”:
with respect to each Lender, the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received with respect to any Loan hereunder or on other amounts, if
any, due to such Lender pursuant to this Agreement or any Note under applicable
law.  “Applicable law”: as used in this
definition, with respect to each Lender, that law in effect from time to time
that permits the charging and collection by such Lender of the highest permissible
lawful, nonusurious rate of interest on the transactions herein contemplated
including, without limitation, the laws of each State that may be held to be
applicable, and of the United States of America, if applicable.

 

“Interest Payment Date”:
(a)  as to any ABR Loan, the last day of
each March, June, September and December, (b) as to any Eurodollar Loan in
respect of which the applicable Borrower has selected an Interest Period of
one, two or three months, the last day of such Interest Period, (c) as to any
Eurodollar Loan in respect of which the applicable Borrower has selected an
Interest Period longer than 3 months, each date which is three months, or a
whole multiple thereof, from the first day of such Interest Period and the last
day of such Interest Period, and (d) with respect to any Same Day Loan, the
last day of each Interest Period.

 

“Interest Period”:
(a) with respect to any Eurodollar Loan:

 

(i)                                     initially, the period commencing on the
Borrowing Date or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the applicable Borrower in its notice of borrowing or notice of
conversion, as the case may be, given pursuant to subsection 2.3 or 2.7,
respectively; and

 

(ii)                                  thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to such Eurodollar
Loan, and ending one, two, three or six months thereafter, as selected by the
applicable Borrower in its notice of continuation given pursuant to subsection
2.7;

 

6

 

(b)                                 with respect to any ABR Loan, the period
commencing on the Borrowing Date or conversion date, as the case may be, with
respect to such ABR Loan and ending on the day next preceding the date on which
such ABR Loan is converted into a Eurodollar Loan pursuant to subsection 2.7;

 

(c)                                  with respect to any Same Day Loan, the period
commencing on the Borrowing Date with respect to such Same Day Loan and ending
on a Business Day not later than 15 days after such Borrowing Date as selected
by the applicable Borrower in its notice of borrowing or if the applicable
Borrower does not specify an Interest Period in its notice of borrowing, ending
on the first Business Day after such Borrowing Date;

 

provided, that all of the foregoing provisions
relating to Interest Periods are subject to the following:

 

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

 

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

 

(iii)                               notwithstanding anything to the contrary in
this definition of “Interest Period” and except as provided in subsection
2.2(a), any Interest Period that would otherwise extend beyond the 364-Day
Commitment Termination Date shall end on the 364-Day Commitment Termination
Date.

 

“Investment Grade Rating”:
ratings of at least BBB- by S&P (with not less than a stable outlook) and
Baa3 by Moody’s.

 

“Lender”: as defined
in the preamble hereto; collectively, the “Lenders”.  Unless the context otherwise requires, the term “Lenders”
includes the Same Day Lender.

 

“Lien”: with respect
to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.  For the purposes of this Agreement, a Borrower or any Subsidiary
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.

 

“LLC”: as defined in
the preamble.

 

“Loans”: any loan
made by a Lender (including the Same Day Lender) hereunder; each, a “Loan”.

 

“LP”: as defined in
the preamble.

 

7

 

“Material Subsidiary”:
at any time, any Subsidiary which as of such time meets the definition of a
“significant subsidiary” contained as of the date hereof in Regulation S-X of
the Securities and Exchange Commission.

 

“Money Market Rate”:
for any Interest Period, with respect to any Same Day Loan, the fixed rate of
interest per annum quoted by the Administrative Agent to the applicable
Borrower to be the fixed rate of interest for such Same Day Loan at
approximately 3:00 P.M., New York City time, on the relevant Borrowing Date.

 

“Moody’s”: Moody’s Investors
Service, Inc., and its successors.

 

“Multiemployer Plan”:
a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“Non-U.S. Lender”: as
defined in subsection 2.16(b).

 

“Note”: as defined in
subsection 2.2(e); collectively, the “Notes”.

 

“Participant”: as
defined in subsection 9.6(b).

 

“Permitted Encumbrances”:
(a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with subsection 5.1; (b) carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not overdue by
more than 30 days or are being contested in compliance with subsection 5.1; (c)
pledges and deposits made in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance and other social security laws or
regulations; (d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business; (e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrowers or any of their respective Subsidiaries;
(f) any Lien arising out of judgments or awards against a Borrower or any
Subsidiary with respect to which such Borrower or such Subsidiary at the time
shall be prosecuting an appeal or proceedings for review and with respect to
which it shall have secured a stay of execution pending such appeal or
proceedings for review to the extent such proceeding has not resulted in an
Event of Default under subsection 7(i); and (g) Liens not otherwise covered by
clauses (a) - (f) inclusive which are incidental to the conduct of the business
of the Borrowers and their Subsidiaries or the ownership of their assets which
do not in the aggregate materially detract from the value of such assets or
materially impair their use in the operation of such Borrower’s or such
Subsidiary’s business; provided that the term “Permitted Encumbrances” shall
not include any Lien securing Debt.

 

“Person”: an
individual, partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.

 

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

 

8

 

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

 

“Pricing Grid”: the
Pricing Grid attached hereto as Annex A.

 

“Prior Credit Agreement”:
as defined in subsection 4.1(i).

 

“Purchasing Lender”:
as defined in subsection 9.6(c).

 

“Reference Banks”:
Barclays Bank PLC and such other banks acceptable to the Borrowers designated
by the Administrative Agent from time to time.

 

“Register”: as
defined in subsection 9.6(d).

 

“Requested Commitment
Termination Date”: as defined in subsection 2.18(a).

 

“Required Lenders”:
at a particular time, (a) prior to the 364-Day Commitment Termination Date,
Lenders, the Commitment Percentages of which aggregate more than 50%, and (b)
if the Commitments have been terminated and there are Loans outstanding,
Lenders holding Loans aggregating more than 50% of the aggregate outstanding
principal amount of Loans.

 

“S&P”: Standard
& Poor’s Ratings Service, a division of the McGraw-Hill Companies, Inc.,
and its successors.

 

“Same Day Lender”: Barclays
Bank PLC, in its capacity as lender of Same Day Loans hereunder.

 

“Same Day Loan”: a
Loan made pursuant to subsection 2.4.

 

“Senior Debt”: the
LLC’s and LP’s joint and several senior unsecured, non-credit enhanced, long
term debt for which a rating has been established by Moody’s and/or S&P as
provided in the Pricing Grid.

 

“Subsidiary”: as to
each Borrower, any corporation, partnership, limited liability company or other
entity of which shares of stock or other ownership interests having ordinary voting
power (other than stock or such other ownership interests having such power
only by reason of the happening of a contingency) to elect a majority of the
board of directors or other Persons performing similar functions are at the
time directly or indirectly owned by such Borrower.

 

“Successor”: as
defined in subsection 6.2.

 

“Syndication Agent”:
as defined in the preamble.

 

9

 

“Terminating Lender”:
as defined in subsection 2.18(a).

 

“Term-out Loans”: Loans
the principal amount of which the Borrowers allow to remain outstanding after
the 364-Day Commitment Termination Date, but prior to the first anniversary of
the 364-Day Commitment Termination Date, in accordance with subsection 2.2(a).

 

“364-Day Commitment
Termination Date”: August 26, 2004.

 

“Tranche”: the
collective reference to Eurodollar Loans, the Interest Periods with respect to
all of which begin on the same date and end on the same later date (whether or
not the Loans comprising any such Tranche were originally made on the same
day).

 

“Transferee”: as
defined in subsection 9.4.

 

“Transfer Effective Date”:
as defined in each Assignment and Acceptance.

 

“Type”: as to any
Loan its nature as a Eurodollar Loan, an ABR Loan or a Same Day Loan.

 

“Voting Stock”: any
class or classes of Capital Stock pursuant to which the holders thereof have
the general voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of any Person
(irrespective of whether or not, at the time, stock of any other class or
classes shall have, or might have, voting power by reason of the happening of
any contingency).

 

1.2                               Other Definitional Provisions. 
(a)  Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.

 

(b)                                 As used herein and in any Notes, and any
certificate or other document made or delivered pursuant hereto, accounting terms
relating to each Borrower and its respective Subsidiaries not defined in
subsection 1.1 and accounting terms partly defined in subsection 1.1, to the
extent not defined, shall have the respective meanings given to them under
GAAP.

 

(c)                                  The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
section, subsection, schedule and exhibit references are to this Agreement
unless otherwise specified.

 

(d)                                 The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such
terms.

 

SECTION 2.  AMOUNT AND TERMS OF COMMITMENTS

 

2.1                               Commitment.  (a) Subject to the terms and conditions
hereof, each Lender severally agrees to make Loans to the Borrowers from time
to time during the Commitment Period in an aggregate principal amount at any
one time outstanding which, when added to such Lender’s Commitment Percentage
of the outstanding Same Day Loans, does not exceed the

 

10

 

amount of such Lender’s then
current Commitment; provided, that the aggregate amount of the Loans
outstanding shall not at any time exceed the aggregate amount of the
Commitments.  During the Commitment
Period, each Borrower may use the Commitments by borrowing, prepaying the Loans
in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.

 

(b)                                 The Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans, (iii) a combination thereof, or (iv) Same Day
Loans, as determined by the applicable Borrower, and notified to the
Administrative Agent in accordance with subsection 2.3, 2.4 or 2.7; provided,
that unless the Borrowers have given notice to extend payment of the principal
amount of the Loans until the first anniversary of the 364-Day Commitment
Termination Date in accordance with subsection 2.2(a), no Loan shall be made as
a Eurodollar Loan after the day that is one month prior to the 364-Day
Commitment Termination Date.

 

2.2                               Repayment of Loans; Evidence of Debt. 
(a)  The Borrowers, jointly and
severally, hereby unconditionally promise to pay to the Administrative Agent
for the account of each Lender the then unpaid principal amount of the Loans of
such Lender on the 364-Day Commitment Termination Date (or such earlier date on
which the Loans become due and payable pursuant to Section 7).  The Borrowers, jointly and severally, hereby
unconditionally promise to the Same Day Lender to pay the then unpaid principal
amount of each Same Day Loan on the earlier of the 364-Day Commitment
Termination Date and the first Business Day after the Borrowing Date for such
Same Day Loan or, if an Interest Period was selected in the applicable
Borrower’s notice of borrowing for such Same Day Loan, the last day of such
Interest Period.  The Borrowers, jointly
and severally, hereby further agree to pay interest on the unpaid principal
amount of the Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
subsection 2.10.  The Borrowers may,
upon written notice to the Administrative Agent given at least 30 days prior to
the 364-Day Commitment Termination Date, extend the date upon which the
principal amount of the Loans of all the Lenders outstanding as of the 364-Day
Commitment Termination Date will be due and payable to the first anniversary of
the 364-Day Commitment Termination Date. 
If the Borrowers give notice to the Administrative Agent in accordance
with the preceding sentence, the Borrowers, jointly and severally, hereby
unconditionally promise to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of the Loans of such Lender on the
first anniversary of the 364-Day Commitment Termination Date (or such earlier
date on which the Loans become due and payable pursuant to Section 7).

 

(b)                                 Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing indebtedness of each
Borrower to such Lender resulting from each Loan of such Lender from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.

 

(c)                                  The Administrative Agent shall maintain the
Register pursuant to subsection 9.6(d) in which shall be recorded with respect
to each Borrower (i) the amount of each Loan made hereunder, the Type thereof
and each Interest Period applicable thereto, (ii) the amount of any principal
or interest due and payable or to become due and payable from such Borrower to
each Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from such Borrower and each Lender’s share
thereof.

 

11

 

(d)                                 The entries made in the Register and the
accounts of each Lender maintained pursuant to subsection 2.2(b) shall, to the
extent permitted by applicable law, be prima facie evidence of the existence
and amounts of the obligations of each Borrower therein recorded; provided,
however, that the failure of any Lender or the Administrative Agent to maintain
the Register or any such account, or any error therein, shall not in any manner
affect the obligation of the Borrowers to repay (with applicable interest) the
Loans made to either Borrower by such Lender in accordance with the terms of
this Agreement.

 

(e)                                  The Borrowers agree that, upon the request to
the Administrative Agent by any Lender, the Borrowers will execute and deliver
to such Lender a promissory note of the Borrowers evidencing the Loans of such
Lender, substantially in the form of Exhibit A with appropriate insertions as
to date and principal amount (a “Note”).

 

2.3                               Procedure for Revolving Credit Borrowing. 
(a)  Each Borrower may borrow
under the Commitments during the Commitment Period on any Business Day;
provided, that the applicable Borrower shall give the Administrative Agent
irrevocable written notice, substantially in the form of Exhibit F hereto, (i)
prior to 12:00 P.M., New York City time, three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans and (ii) prior to
12:00 P.M., New York City time, on the requested Borrowing Date, in the case of
ABR Loans, specifying (A) the amount to be borrowed, (B) the requested
Borrowing Date, (C) whether the borrowing is to be a Eurodollar Loan, an ABR
Loan, or a combination thereof and (D) the length of the Interest Period for
each Eurodollar Loan included in such notice. 
If no election as to the Type of borrowing is specified, then the
requested borrowing shall be an ABR borrowing. If no Interest Period is
specified with respect to any requested Eurodollar borrowing, then the Interest
Period shall be deemed to be one month. 
Each Eurodollar or ABR borrowing under the Commitments shall be in an
aggregate principal amount of the lesser of (1) $10,000,000 or a whole multiple
of $1,000,000 in excess thereof, and (2) the then Available Commitments.

 

(b)                                 Upon receipt of such notice from the
applicable Borrower, the Administrative Agent shall promptly notify each Lender
thereof (but in any event no later than (i) the date of receipt of such notice
from such Borrower in the case of Eurodollar Loans and (ii) 2:00 P.M., New York
City time, on the requested Borrowing Date in the case of ABR Loans).  Each Lender will make the amount of its pro rata share of each borrowing available
to the Administrative Agent for the account of such Borrower at the office of
the Administrative Agent set forth in subsection 9.2 prior to (i) 4:00 P.M.,
New York City time, in the case of ABR Loans, and (ii) 12:00 P.M., New York
City time, in the case of Eurodollar Loans on the Borrowing Date requested by
such Borrower in funds immediately available to the Administrative Agent in
Dollars.  The proceeds of all Loans will
then be made available to such Borrower by the Administrative Agent by
crediting the account of such Borrower on the books of the Administrative Agent,
or such other account of such Borrower as shall have been designated by such
Borrower to the Administrative Agent.

 

(c)                                  Unless the Administrative Agent shall have
been notified in writing by any Lender prior to a proposed Borrowing Date that
such Lender will not make available to the Administrative Agent the amount
which would constitute its Commitment Percentage of the borrowing on such
Borrowing Date, the Administrative Agent may assume that such Lender has made
such amount available to the Administrative Agent on such Borrowing Date, and the

 

12

 

Administrative Agent may, in
reliance upon such assumption, make available to the applicable Borrower an
amount equal to such Lender’s Commitment Percentage of the borrowing on such
Borrowing Date.  The Administrative
Agent shall notify such Borrower as promptly as practicable if such Lender’s
Commitment Percentage of such borrowing is not made available to the
Administrative Agent on such Borrowing Date. 
If such amount is made available to the Administrative Agent on a date
after such Borrowing Date, such Lender shall pay to the Administrative Agent on
demand an amount equal to the product of (i) the daily average overnight
federal funds rate during such period as quoted by the Administrative Agent, times
(ii) the amount of such Lender’s Commitment Percentage of such borrowing (minus
the amount, if any, which such Lender has made available to the Administrative
Agent), times (iii) a fraction the numerator of which is the number of days
that elapse from and including such Borrowing Date to the date on which such
Lender’s Commitment Percentage of such borrowing shall have become immediately
available to the Administrative Agent and the denominator of which is 360.  A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this subsection
2.3(c) shall be prima facie
evidence of the accuracy of the information set forth therein, absent manifest
error.  If such Lender’s Commitment
Percentage of such borrowing is not in fact made available to the
Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the Administrative Agent shall be entitled to recover the
amount of such Lender’s Commitment Percentage of such borrowing (minus the amount,
if any, which such Lender had made available to the Administrative Agent) on
demand from such Borrower with interest thereon (i) for the period from and
including such Borrowing Date to the date one day after such demand, at a rate
per annum equal to the daily average overnight federal funds rate during such
period as quoted by the Administrative Agent and calculated on the basis of a
360-day year for the actual days elapsed and (ii) thereafter, at the rate per
annum applicable to ABR Loans hereunder. 
Nothing contained in this subsection 2.3(c) shall prejudice in any
manner whatsoever any right or remedy of such Borrower against such Lender.

 

2.4                               Same Day Loans. 
(a)  Subject to the terms and
conditions set forth herein, the Same Day Lender agrees to make Same Day Loans
to the Borrowers from time to time during the Commitment Period, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of outstanding Same Day Loans exceeding
$50,000,000 or (ii) the aggregate principal amount of outstanding Loans
exceeding $400,000,000.  Borrowings of
Same Day Loans under the Commitments shall be in an aggregate principal amount
of not less than (1) $1,000,000, and (2) not greater than the then Available
Commitments with respect to Same Day Loans. 
With respect to borrowings of Same Day Loans in excess of $1,000,000,
any such excess amount shall be in a whole multiple of $100,000.  Within the foregoing limits and subject to
the terms and conditions set forth herein, each Borrower may borrow, prepay and
reborrow Same Day Loans.

 

(b)                                 To request a Same Day Loan, a Borrower shall
notify the Administrative Agent of such request by telephone (confirmed by
telecopy in a form substantially the same as Exhibit H), not later than 12:00
P.M., New York City time, on the day of a proposed Same Day Loan.  Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day), amount of the
requested Same Day Loan and any Interest Period selected.  The Administrative Agent will promptly
advise the Same Day Lender of any such notice received from such Borrower.  The Same Day Lender shall make each Same Day
Loan available to such Borrower by means of a credit to the general deposit
account of such Borrower with the Same

 

13

 

Day Lender by 3:00 P.M., New
York City time, on the requested date of such Same Day Loan.  Subject to subsection 2.4(c), each payment
(including each prepayment) by either Borrower on account of Same Day Loans
shall be made to the Same Day Lender for the Same Day Lender’s sole account.

 

(c)                                  The Same Day Lender may by written notice
given to the Administrative Agent not later than 1:00 P.M., New York City time,
on any Business Day require the Lenders to acquire participations on such
Business Day in all or a portion of the Same Day Loans outstanding.  Such notice shall specify the aggregate
amount of Same Day Loans in which Lenders will participate.  Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Lender, specifying in
such notice such Lender’s Commitment Percentage of such Same Day Loan or
Loans.  Each Lender hereby absolutely
and unconditionally agrees, upon receipt of notice as provided above, to pay to
the Same Day Lender, such Lender’s Commitment Percentage of such Same Day Loan
or Loans.  Each Lender acknowledges and
agrees that its obligation to acquire participations in Same Day Loans pursuant
to this paragraph is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including the occurrence and continuance of a
Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.  Each Lender shall comply
with its obligation under this paragraph by wire transfer of immediately
available funds by 3:00 P.M., New York City time, on the date of receipt of the
notice referenced above, to the account of the Same Day Lender most recently
designated by it for such purpose by notice to the Lenders.  The Administrative Agent shall notify the
Borrower of any participations in any Same Day Loan acquired pursuant to this
paragraph, and thereafter payments in respect of such Same Day Loan shall be
made to the Administrative Agent and not to the Same Day Lender.  Any amounts received by the Same Day Lender
from the Borrower (or other party on behalf of the Borrower) in respect of a
Same Day Loan after receipt by the Same Day Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Administrative Agent;
any such amounts received by the Administrative Agent shall be promptly
remitted by the Administrative Agent to the Lenders that shall have made their
payments pursuant to this paragraph and to the Same Day Lender, as their
interests may appear.  The purchase of
participations in a Same Day Loan pursuant to this paragraph shall not relieve
the Borrowers of any default in the payment thereof.  Notwithstanding the foregoing, a Lender shall not have any
obligation to acquire a participation in a Same Day Loan pursuant to this
paragraph if an Event of Default shall have occurred and be continuing at the time
such Same Day Loan was made and such Lender shall have notified the Same Day
Lender in writing, at least one Business Day prior to the time such Same Day
Loan was made, that such Event of Default has occurred and that such Lender
will not acquire participations in Same Day Loans made while such Event of
Default is continuing.

 

2.5                               Termination or Reduction of Commitments. 
(a)  The Borrowers shall have the
right, upon not less than five Business Days’ written notice to the
Administrative Agent, to terminate the Commitments or, from time to time, to
reduce the amount thereof; provided, 
that no such termination or reduction shall be permitted if, after
giving effect thereto and to any prepayments of the Loans made on the effective
date thereof, the then outstanding principal amount of the Loans would exceed
the amount of the Commitments then in effect. 
Any such reduction shall be in an amount of $10,000,000, or a whole
multiple of $5,000,000 in excess thereof, and shall reduce permanently the
amount of such Commitments then in effect.

 

14

 

(b)                                 Unless an Event of Default has occurred and
is continuing, the Borrowers shall have the right, in their sole discretion, to
terminate the Commitment of any Lender by giving the Administrative Agent and
such Lender a written notice setting forth its election and a termination date
(the “Early Commitment Termination Date”), which date shall not be
earlier than 30 days after the date on which such notice has been given, except
as otherwise provided in subsections 2.14(c), 2.15 and 2.16(f).  On the Early Commitment Termination Date,
such Lender’s Commitment shall terminate and the Borrowers shall (i) prepay all
of such Lender’s outstanding Loans together with interest thereon accrued to
such Early Commitment Termination Date and any amounts payable pursuant to
subsection 2.17, (ii) pay all Commitment Fees accrued to such Early Commitment
Termination Date with respect to such Lender’s Commitment and (iii) pay all
amounts then owing to such Lender pursuant to subsections 2.14, 2.16, 2.17 and
9.5 for which demand has been made to the Borrowers prior to such Early
Commitment Termination Date.  Upon
termination of such Lender’s Commitment in accordance with this subsection
2.5(b), such Lender shall cease to be a party hereto subject to the provisions
of subsection 8.7.

 

(c)                                  In the event that the Borrowers elect to
terminate the Commitment of any Lender pursuant to subsection 2.5(b), the
Borrowers shall have the right, in their sole discretion, upon notice to the
Administrative Agent, to request one or more Lenders or Purchasing Lenders, or
to seek another lender, to acquire, pursuant to subsection 9.6(c), such
terminated Commitment and all amounts owing to such Lender in respect of its
Loans hereunder; provided, however, that if such terminated Commitments are in
the aggregate greater than 15% of the then aggregate Commitments, the Borrowers
will replace such terminated Lender or Lenders with one or more replacement
lenders (which may be a Lender or Lenders) which will acquire on the date of
such termination, pursuant to subsection 9.6(c), an amount of such terminated
Commitment or Commitments, as applicable, which will result in the then
aggregate Commitments, after giving effect to such acquisition, being at least
85% of the aggregate Commitments as of the Closing Date (as the same may be
reduced pursuant to subsection 2.5(a), but excluding any reductions pursuant to
subsection 2.5(b)).

 

2.6                               Optional and Mandatory Prepayments. 
(a)  Optional Prepayments.  The Borrowers may at any time and from time
to time prepay the Loans, in whole or in part, without premium or penalty upon
(i) in the case of Eurodollar Loans, at least three Business Days’ irrevocable
written notice to the Administrative Agent, specifying the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans or a combination
of Eurodollar Loans and ABR Loans, and if a combination thereof, the amount of
prepayment allocable to each, (ii) in the case of ABR Loans, at least one
Business Day’s irrevocable written notice to the Administrative Agent,
specifying the date and amount of prepayment and (iii) in the case of Same Day
Loans, upon irrevocable written notice to the Administrative Agent received no
later than 12:00 P.M. on the day of such prepayment, specifying the date and
amount of prepayment.  Upon receipt of
such notice the Administrative Agent shall promptly notify each Lender
thereof.  If such notice is given, the
payment amount specified in such notice shall be due and payable on the date specified
therein, together with any interest thereon accrued to such prepayment date and
any amounts payable pursuant to subsection 2.17.

 

(b)                                 Mandatory Prepayments.  If,
after giving effect to any termination or reduction of the Commitments pursuant
to subsection 2.5, the aggregate outstanding principal

 

15

 

amount of the Loans exceeds
the Commitments as so reduced, the Borrowers shall, simultaneously with any
such termination or reduction of the Commitments pay or prepay an amount equal
to such excess together with interest thereon accrued to such date of payment
or prepayment and any amount payable pursuant to subsection 2.17.

 

2.7                               Conversion and Continuation Options. 
(a)  Each Borrower may elect from
time to time to convert its Eurodollar Loans to ABR Loans by giving the
Administrative Agent prior irrevocable notice, in a form substantially the same
as Exhibit I, of such election by 12:00 P.M., New York City time, on a Business
Day; provided, that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto.  Each Borrower may elect from time to time to
convert its ABR Loans to Eurodollar Loans by giving the Administrative Agent at
least three Business Days’ prior irrevocable notice of such election.  Any such notice of conversion to Eurodollar
Loans shall specify the length of the Interest Periods therefor.  Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof.  All or any part of the outstanding
Eurodollar Loans and  ABR Loans may be
converted as provided herein; provided, that no Loan may be converted
into a Eurodollar Loan when any Event of Default has occurred and is continuing
if the Administrative Agent, upon the request of the Required Lenders, shall
determine not to permit such conversions.

 

(b)                                 Any Eurodollar Loans may be continued as such
upon the expiration of the then current Interest Period with respect thereto by
the applicable Borrower giving notice, in a form substantially the same as
Exhibit I, to the Administrative Agent, in accordance with the appropriate
notification provisions therefor set forth in subsection 2.7(a), of the length
of the next Interest Period to be applicable to such Loans; provided, that if
the applicable Borrower shall fail to give any required notice as described
above in this paragraph, such Loans shall automatically be continued as
Eurodollar Loans with an Interest Period of one month; provided, further, that
no Eurodollar Loan may be continued as such when any Event of Default has
occurred and is continuing if the Administrative Agent, upon the request of the
Required Lenders, shall determine not to permit such continuations; and further
provided, that if such continuation is not permitted pursuant to the preceding
proviso, such Loans shall automatically be converted to ABR Loans.

 

(c)                                  This subsection 2.7 shall not apply to Same
Day Loans, which may not be converted or continued.

 

2.8                               Maximum Number of Tranches.  All conversions and
continuations of Loans outstanding at any one time hereunder and all selections
of Interest Periods hereunder shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, there shall be no more
than 15 Tranches.

 

2.9                               Fees.  (a) 
The Borrowers agree to pay to the Administrative Agent for the ratable
account of each Lender a commitment fee (the “Commitment Fee”) from and
including the first day of the Commitment Period to the 364-Day Commitment
Termination Date, at the rate per annum equal to the Applicable Commitment Fee
Rate on the average daily amount of the Available Commitment of such Lender
during the period for which payment is made. 
Such Commitment Fees shall be payable quarterly in arrears on the last
Business Day of each March, June, September and December and on the 364-Day
Commitment Termination Date or such

 

16

 

earlier date as the
Commitment of such Lender shall terminate as provided herein, commencing on the
first of such dates to occur after the Closing Date.

 

(b)                                 The Borrowers agree to pay to the
Administrative Agent for the ratable account of each Lender, a utilization fee
(a “Utilization Fee”) at a rate per annum equal to the Applicable Utilization
Fee Rate for each Excess Utilization Day on the outstanding Loans of such
Lender on such Excess Utilization Day during the period for which payment is
made.  Such Utilization Fees shall be
payable quarterly in arrears on the last Business Day of each March, June,
September and December and on the 364-Day Commitment Termination Date or such
earlier date as the Commitment of such Lender shall terminate as provided
herein, commencing on the first of such dates to occur after the Closing Date.

 

(c)                                  The Borrowers agree to pay to the
Administrative Agent and the Co-Lead Arrangers, for their own respective
accounts, the fees heretofore agreed in writing pursuant to the fee letter
dated as of June 30, 2003 (the “Fee Letter”) with the Administrative
Agent and the Co-Lead Arrangers (any such fees, the “Agent’s/Arranger’s Fees”).
The Borrowers agree to pay to the Administrative Agent for the respective
accounts of the Lenders, pro rata
according to their Commitment amounts, an upfront fee in an amount set forth in
the Fee Letter.

 

2.10                        Interest Rate.  (a)
Each Eurodollar Loan shall bear interest for the Interest Period applicable
thereto on the unpaid principal amount thereof at a rate per annum equal to the
Eurodollar Rate determined for such Interest Period plus the Applicable
Eurodollar Margin.

 

(b)                                 Each Same Day Loan shall bear interest on the
unpaid principal amount thereof at a rate per annum equal to the Money Market
Rate plus the Applicable Eurodollar Margin; provided, however, that, at any
time as there shall be a Same Day Loan outstanding past the date such Same Day
Loan is due and payable or there shall have occurred and be continuing an Event
of Default, each Same Day Loan as to which the Lenders shall have acquired
participations pursuant to subsection 2.4(c) shall bear interest from and after
the earlier of (i) the date after which such Same Day Loan is due and payable
or (ii) the date on which such Event of Default shall have occurred, in each
case at a rate per annum equal to the Alternate Base Rate.

 

(c)                                  Each ABR Loan shall bear interest at a rate
per annum equal to the Alternate Base Rate.

 

(d)                                 If all or a portion of the principal amount
of or any interest on any Loan shall not be paid when due (without regard to
any applicable grace periods, whether at the stated maturity, by acceleration
or otherwise), such overdue amount shall, without limiting the rights of any
Lender under Section 7, bear interest at a rate per annum equal to the rate
which would otherwise be applicable pursuant to subsection 2.10(a), (b) or (c),
as applicable, plus 2%, in each case from the date of nonpayment until paid in
full (as well after as before judgment).

 

(e)                                  Interest on each Loan shall be payable in
arrears on each Interest Payment Date with respect thereto.

 

2.11                        Computation of Interest and Fees.  (a)
Interest in respect of the ABR Loans shall be calculated on the basis of a 365
(or 366, as the case may be) day year for the actual days

 

17

 

elapsed.  Interest in respect of Eurodollar Loans,
Same Day Loans, Commitment Fees, Utilization Fees, and other amounts owing
shall be calculated on the basis of a 360 day year for the actual days
elapsed.  The Administrative Agent shall
as soon as practicable notify the Borrowers and the Lenders of each
determination of a Eurodollar Rate.  Any
change in the interest rate on a Loan resulting from a change in the Alternate
Base Rate or the Applicable Eurodollar Margin shall become effective as of the
opening of business on the day on which such change in the Alternate Base Rate
is announced or such Applicable Eurodollar Margin changes as provided herein,
as the case may be.  The Administrative
Agent shall as soon as practicable notify the Borrowers and the Lenders of the
effective date and the amount of each such change.

 

(b)                                 Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrowers and the Lenders in the absence of
manifest error.  Upon the request of a
Borrower, the Administrative Agent shall deliver to the Borrowers a statement
showing the determination of  any
interest rate pursuant to subsections 2.10(a), (b) or (c), as applicable.

 

2.12                        Inability to Determine Interest Rate.  In
the event that prior to the first day of any Interest Period with respect to a
Eurodollar Loan:

 

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

 

(ii)                                  the Administrative Agent shall have received
notice prior to the first day of such Interest Period from the Required Lenders
that the interest rate determined pursuant to subsection 2.10(a) for such
Interest Period does not accurately reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining Eurodollar
Loans during such Interest Period,

 

with respect to a Loan that is to be made as or converted to or continued
as a Eurodollar Loan, the Administrative Agent shall forthwith give telecopy or
telephonic notice of such determination to the Borrowers and each Lender at
least one day prior to the relevant Borrowing Date, conversion date or
continuation date for such Eurodollar Loan. 
If such notice is given, any Loan that is to be made as or converted to
or continued as a Eurodollar Loan shall be made as or converted to an ABR Loan.

 

2.13                        Pro Rata Treatment and Payments.  (a)
Except as provided by subsection 2.4, each borrowing by either Borrower from
the Lenders hereunder and, except as otherwise provided by subsection 2.5(b),
in the Fee Letter or by subsection 2.9(c), each payment by either Borrower on
account of any fee payable hereunder in respect of the Commitments and any
reduction of the Commitments of the Lenders hereunder shall be made pro rata according to the respective
Commitment Percentages of the Lenders. 
Except as otherwise provided in subsections 2.4 and 2.5(b), each payment
(including each prepayment) by either Borrower on account of principal of and
interest on the Loans shall be made pro rata
according to the respective outstanding principal amounts of the Loans then
held by the Lenders.

 

18

 

(b)                                 All payments (including prepayments) to be
made by either Borrowers hereunder and under any Notes on account of principal,
interest and fees shall be made prior to 3:00 PM, New York City time, on the
date when due without set-off or counterclaim and shall be made to the
Administrative Agent (except payments to be made directly to the Same Day
Lender as expressly provided in this Agreement), for the account of the Lenders
(or, in the case of payments made pursuant to subsection 2.5(b), for the
account of each Lender whose Commitment has been terminated pursuant to any
such subsection or, in the case of Agent’s/Arranger’s Fees, to the
Administrative Agent or the Co-Lead Arrangers as agreed in writing), at the
Administrative Agent’s office set forth in subsection 9.2, in lawful money of
the United States of America and in immediately available funds.  Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon.  The Administrative
Agent shall distribute such payments to each Lender promptly upon receipt in
like funds as received.

 

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

 

2.14                        Increased Costs.  (a)
If the adoption of any applicable law, rule or regulation after the date of
this Agreement, or any change in any law, rule or regulation, or in the
interpretation, application or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation,
application or administration thereof after the date of this Agreement, or
compliance by any Lender with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency made
after the date of this Agreement shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal Reserve
System or any Person or Persons performing similar functions with respect to a
foreign bank) against assets of, deposits with or for the account of, or credit
extended by, any Lender which are not otherwise included in the determination
of the applicable Eurodollar Rate hereunder, or shall impose any other
condition (including, without limitation, any assessment for deposit insurance
under any applicable laws) regarding this Agreement; and the result of any of
the foregoing is to increase the cost to such Lender, by an amount which such
Lender deems to be material, of making, converting into, continuing or
maintaining extensions of credit or to reduce any amount receivable hereunder,
in each case, in respect of its Eurodollar Loans, then, in any such case, the
Borrowers shall promptly pay such Lender, upon its demand, any additional
amounts necessary to compensate such Lender for such additional cost or reduced
amount receivable.

 

(b)                                 If any Lender shall have determined
reasonably and in good faith that the adoption of any law, rule, regulation or
guideline regarding capital adequacy after the date of this Agreement, or any
change in any of the foregoing after the date of this Agreement or in the
interpretation or administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof after the

 

19

 

date of this Agreement, or
compliance by such Lender (or any lending office of such Lender) with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such Governmental Authority, central bank or comparable
agency after the date of this Agreement, has or would have the effect of
reducing the rate of return on such Lender’s capital or on the capital of such
Lender’s holding company as a consequence of its obligations hereunder to a
level below that which such Lender or such Lender’s holding company could have
achieved but for this Agreement and such adoption, change or compliance (taking
into consideration such Lender’s policies and the policies of such Lender’s
holding company with respect to capital adequacy) by an amount which such
Lender deems to be material, then from time to time promptly after demand by such
Lender, the Borrowers shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender’s holding company for
such reduction.

 

(c)                                  If a Lender becomes entitled to claim any
additional amounts pursuant to this subsection 2.14, it shall promptly notify
the Borrowers, through the Administrative Agent, of the event by reason of
which it has become so entitled.  A
certificate as to any additional amounts payable pursuant to this subsection
2.14 and setting forth in reasonable detail the basis for such claim, submitted
by such Lender (through the Administrative Agent) to the Borrowers, shall be
conclusive in the absence of manifest error. 
The Borrowers shall pay such Lender the amount shown as due on any such
certificate promptly upon receipt thereof. 
Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s right
to demand such compensation; provided, that the Borrowers shall not be required
to compensate a Lender pursuant to this subsection 2.14 for any increased costs
or reductions incurred more than six months prior to the date that such Lender
notifies the Borrowers of such Lender’s intention to claim compensation
therefor and, if the circumstances giving rise to such increased cost or
reduction have a retroactive effect, then such six-month period shall be
extended to include the period of such retroactive effect.  Each Lender shall designate a different
lending office for funding or booking its Loans hereunder or assign its rights
and obligations hereunder to another of its offices, branches or affiliates, if
such designation or assignment will avoid the need for, or reduce the amount
of, compensation pursuant to this subsection 2.14 and will not, in the judgment
of such Lender, be otherwise disadvantageous to such Lender.  Upon receipt of notice from such Lender of a
claim pursuant to this subsection 2.14, the Borrowers may terminate such
Lender’s Commitment pursuant to subsection 2.5(b) upon three Business Days’
notice to the Administrative Agent and such Lender unless such Lender shall
have designated a different lending office or assigned its rights and
obligations hereunder to another of its offices, branches or affiliates as
provided in the preceding sentence.

 

2.15                        Illegality. 
Notwithstanding any other provision of this Agreement, if any
requirement of law or any change therein or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain Eurodollar
Loans as contemplated by this Agreement, such Lender shall promptly notify the
Borrowers and the Administrative Agent thereof and the Commitment of such
Lender hereunder to make and continue Eurodollar Loans as such and convert ABR
Loans to Eurodollar Loans shall forthwith be suspended to the extent required
by law until such time as such Lender may again make and maintain Eurodollar
Loans.  To the extent required by law
such Lender’s Loans then outstanding as Eurodollar Loans, if any, shall be converted
into ABR Loans on the last day of the Interest Period therefor, or within such

 

20

 

earlier period as required
by law, to the extent necessary to maintain such Lender’s Commitment Percentage
of outstanding Loans.  Such Lender shall
designate a different lending office for funding or booking its Eurodollar
Loans or assign its rights and obligations hereunder to another of its offices,
branches or affiliates if such designation or assignment will permit such
Lender to lawfully make and maintain Eurodollar Loans hereunder and will not,
in the judgment of such Lender, be otherwise disadvantageous to such
Lender.  Upon receipt of notice from
such Lender as specified in the first sentence of this subsection 2.15, the
Borrowers may terminate such Lender’s Commitment pursuant to subsection 2.5(b)
upon three Business Days’ notice to the Administrative Agent unless such Lender
shall have designated a different lending office or assigned its rights and
obligations hereunder to another of its offices, branches or affiliates as
provided in the preceding sentence.

 

2.16                        Taxes.  (a) Except as otherwise provided hereunder,
payments made by a Borrower, the Administrative Agent or any Lender under this
Agreement and any Notes shall be made free and clear of, and without reduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority excluding, in the case of the Administrative
Agent and each Lender, net income and franchise taxes imposed on or
withholdings required on payments made to the Administrative Agent or such
Lender by the jurisdiction under the laws of which the Administrative Agent or
such Lender is organized or any political subdivision or taxing authority
thereof or therein, or by any jurisdiction in which such Lender’s lending
office is located or any political subdivision or taxing authority thereof or
therein (all such non-excluded taxes, levies, imposts, deductions, charges or
withholdings being hereinafter called “Taxes”).  If any Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder or
under any Notes, the amounts so payable to the Administrative Agent or such
Lender shall be increased to the extent necessary to yield to the
Administrative Agent or such Lender (after payment of all Taxes) interest or
any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement and any Notes; provided, that no such increase to
the amounts payable hereunder shall be made or be payable (i) to the extent
that such Taxes are attributable to the failure of the Administrative Agent or
such Lender to comply with the requirements of subsection 2.16(b) hereof or
(ii) that are United States withholding taxes imposed on amounts payable to
such Lender at the time such Lender becomes a party to this Agreement, except
to the extent that such Lender’s assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to
such Taxes pursuant to this subsection 2.16(a).

 

(b)                                 Each Lender (or transferee) that is not a
“U.S. Person” as defined in Section 7701(a)(30) of the Code (a “Non-U.S.
Lender”) shall deliver to the Borrowers and the Administrative Agent (or,
in the case of a Participant, to the Lender from which the related
participation shall have been purchased) two copies of either U.S. Internal
Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a Non-U.S.
Lender claiming exemption from U.S. federal withholding tax under Section
871(h) or 881(c) of the Code with respect to payments of “portfolio interest”,
a statement substantially in the form of Exhibit G and a Form W-8BEN, or any
subsequent versions thereof or successors thereto, properly completed and duly
executed by such Non-U.S. Lender claiming complete exemption from, or a reduced
rate of, U.S. federal withholding tax on all payments by the Borrowers under
this Agreement and the Notes.

 

21

 

Such forms shall be
delivered by each Non-U.S. Lender on or before the later of (i) the date it becomes
a party to this Agreement (or, in the case of any Participant, on or before the
date such Participant purchases the related participation) or (ii) prior to
receipt by such Lender or Participant of any payment subject to withholding
under the Code.  In addition, each
Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender.  Each Non-U.S. Lender shall promptly notify
the Borrowers at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrowers (or any other
form of certification adopted by the U.S. taxing authorities for such
purpose).  Notwithstanding any other
provision of this subsection 2.16(b), a Non-U.S. Lender shall not be required
to deliver any form pursuant to this subsection 2.16(b) that such Non-U.S.
Lender is not legally able to deliver.

 

(c)                                  The applicable Borrower shall promptly send
to the Administrative Agent for its own account or for the account of any
Lender, as the case may be, a copy of an original official receipt received by
such Borrower showing payment to the proper taxing authority by such Borrower
of any Taxes withheld.  If a Borrower
fails to withhold and pay over to the proper taxing authority any Taxes when
due or fails to remit to the Administrative Agent or any Lender the required
receipts or other required documentary evidence, the Borrowers shall indemnify
the Administrative Agent and any such Lender for any interest or penalties that
may become payable by the Administrative Agent or any Lender as a result of any
such failure.

 

(d)                                 Each Lender shall designate a different
lending office for its Loans or assign its rights and obligations hereunder to
another of its offices, branches or affiliates if such designation or
assignment will avoid the need for, or reduce the amount of, increased amounts
payable pursuant to subsection 2.16(a) and will not, in the judgment of such
Lender, be otherwise disadvantageous to such Lender.

 

(e)                                  Each Borrower agrees to pay, indemnify, and
hold each Lender and the Administrative Agent harmless from any and all present
or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any Notes.

 

(f)                                    If an amount payable by a Borrower hereunder
for the account of any Lender is increased pursuant to subsection 2.16(a), or
the Borrowers become liable to indemnify the Administrative Agent or any Lender
under subsection 2.16 (e), the Borrowers shall have the right to terminate
the Commitment of such Lender pursuant to subsection 2.5(b) upon three Business
Days’ notice to the Administrative Agent and such Lender unless such Lender
shall have designated a different lending office or assigned its rights and
obligations hereunder to another of its offices, branches or affiliates as
provided in subsection 2.16 (d).

 

2.17                        Break Funding Payments.  In the event of: (a) the
payment of any principal of any Eurodollar Loan or Same Day Loan other than on
the last day of an Interest Period applicable thereto (including as a result of
an Event of Default), (b) the conversion of any Eurodollar Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Loan on the date specified in any
notice delivered pursuant hereto, (d) the assignment of any Eurodollar Loan
other than on the last day of the 

 

22

 

Interest Period applicable
thereto as a result of a request by the Borrowers pursuant to subsections
2.5(b) or (c), then, in any such event, the Borrowers shall compensate each
Lender for the loss, cost and expense attributable to such event.  The loss to any Lender attributable to any
such event shall be an amount determined by such Lender to be equal to the
excess, if any, of (i) the amount of interest that would have accrued to such Lender
on the amount so paid or not borrowed, continued or converted at a rate of
interest equal to the Eurodollar Rate for such Eurodollar Loan, for the period
from the date of such payment or failure to borrow, continue or convert to the
last day (x) in the case of a payment other than on the last day of the  Interest Period for such Loan, of the then
current Interest Period for such Loan, or (y) in the case of such failure to
borrow, continue or convert, of the Interest Period for such Loan which would
have commenced on the date of such failure to borrow, continue or convert, over
(ii) the amount of interest which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
Lenders in the London interbank market. 
If a Lender becomes entitled to claim any amounts pursuant to this
subsection 2.17, it shall promptly notify the Borrowers, through the
Administrative Agent, of the event by reason of which it has become so
entitled.  A certificate as to any
amounts payable pursuant to this subsection 2.17 and setting forth in
reasonable detail the basis for such claim, submitted by such Lender (through
the Administrative Agent) to the Borrowers, shall be conclusive in the absence
of manifest error.  The Borrowers shall
pay such Lender the amount shown as due on any such certificate promptly after
receipt thereof.

 

2.18                        Extension of 364-Day Commitment Termination Date.  (a)
The Borrowers may request, in a notice given as herein provided to the
Administrative Agent and each of the Lenders not less than 45 days and not more
that 60 days prior to the 364-Day Commitment Termination Date (the “Existing
Commitment Termination Date”), that the 364-Day Commitment Termination Date
be extended for 364 days (such 364th day, the “Requested Commitment
Termination Date”).  Each Lender,
acting in its sole discretion, shall, not later than a date 30 days after its
receipt of any such notice from the Borrowers, notify the Borrowers and the
Administrative Agent in writing of its election to extend or not to extend the
364-Day Commitment Termination Date with respect to its Commitment.  Any Lender which shall not timely notify the
Borrower and the Administrative Agent of its election to extend the 364-Day
Commitment Termination Date shall be deemed not to have elected to extend the
364-Day Commitment Termination Date with respect to its Commitment (any Lender
who timely notifies the Borrower and the Administrative Agent of an election
not to extend  and any Lender who fails
to timely notify the Borrower and the Administrative Agent of its election
being referred to as a “Terminating Lender”).  The election of any Lender to agree to a requested extension
shall not obligate any other Lender to agree.

 

(b)                                 If and only if the Required Lenders
(including Commitments of all Terminating Lenders on such date) shall have
agreed during the 30 day period referred to in subsection 2.18(a) to extend the
Existing Commitment Termination Date, then (i) the Commitments of the Lenders
other than Terminating Lenders (the “Continuing Lenders”) shall, subject
to the other provisions of this Agreement, be extended to the Requested
Commitment Termination Date specified in the notice from the Borrower, and as
to such Lenders the term “364-Day Commitment Termination Date”, as used herein,
shall on and after the date as of which the requested extension is effective
mean such Requested Commitment Termination Date, provided that if such date is
not a Business Day, then such Requested Commitment Termination

 

23

 

Date shall be the next
preceding Business Day and (ii) the Commitments of the Terminating Lenders
shall continue until the Existing Commitment Termination Date, and shall then
terminate, and as to the Terminating Lenders, the term “364-Day Commitment
Termination Date”, as used herein, shall continue to mean such Existing
Commitment Termination Date.  All Loans
of the Terminating Lenders will be due and payable on such Existing Commitment
Termination Date.

 

(c)                                  In the event that the 364-Day Commitment
Termination Date shall have been extended for the Continuing Lenders in
accordance with paragraph (b) above and, in connection with such extension,
there are Terminating Lenders, the Borrower may, at its own expense, require
any Terminating Lender to transfer and assign, without recourse (in accordance
with subsection 9.6(c)) all or part of its interests, rights and obligations
under this Agreement to an assignee (which assignee may be another Lender, if
another Lender accepts such assignment) that shall assume such assigned
obligations and that shall agree that its Commitment will expire on the 364-Day
Commitment Termination Date in effect for Continuing Lenders pursuant to
subsection 2.18(a); provided, however, that (i) the Borrowers shall have given
written notice to the Administrative Agent in the case of an assignee that is
not a Lender and (ii) the assigning Lender shall have received from the
Borrower or such assignee full payment in immediately available funds of the
principal of and interest accrued to the date of such payment on the Loans made
by it hereunder to the extent that such Loans are subject to such assignment
and all other amounts owed to it hereunder (including any amounts that would be
payable to the assigning Lender pursuant to subsection 2.17 if such assignment
were, instead, a prepayment of the Loans of such Lender).  Any such assignee’s initial 364-Day
Commitment Termination Date shall be the 364-Day Commitment Termination Date in
effect for the Continuing Lenders at the time of such assignment.  No Borrower shall have any right to require
a Lender to assign any part of its interests, rights and obligations under this
Agreement pursuant to this subsection 2.18(c) unless it has notified such Lender
of its intention to require the assignment thereof at least ten days prior to
the proposed assignment date.

 

SECTION 3.  REPRESENTATIONS AND WARRANTIES

 

Each Borrower as to itself
hereby represents and warrants to the Administrative Agent and to each Lender
that:

 

3.1                               Existence and Power.  The LLC is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all limited liability company powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.  The
LP is a limited partnership duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has all partnership
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.

 

3.2                               Requisite and Governmental Authorization; Contravention.  The
execution, delivery and performance by such Borrower of this Agreement and any
Notes are within its limited liability company or partnership, as applicable,
powers, have been duly authorized by all necessary limited liability company or
partnership, as applicable, action, require no action by or in respect of, or filing
with, any Governmental Authority and do not contravene, or constitute a

 

24

 

breach or a default under,
any provision of any applicable law, regulation or order of any Governmental
Authority, or (i) in the case of the LLC, its Certificate of Formation, as
amended, and the Second Amended and Restated Limited Liability Company
Agreement, as amended, (ii) in the case of the LP, its Certificate of Limited
Partnership and Agreement of Limited Partnership, as amended, or (iii) in the
case of both the LLC and the LP, any agreement, judgment, injunction, order,
decree or other instrument binding upon such Borrower or resulting in the
creation or imposition of any Lien on any asset of such Borrower or any of its Subsidiaries.

 

3.3                               Enforceability. 
This Agreement and any Notes constitute the legal, valid and binding
obligation of such Borrower, enforceable against such Borrower in accordance
with their respective terms, subject, as to enforceability only, to applicable
bankruptcy, moratorium, insolvency or similar laws affecting the rights of
creditors generally and to general principles of equity.

 

3.4                               Litigation. 
Neither Borrower nor any of their respective Subsidiaries is a party to
any, and there are no pending or, to Borrowers’ knowledge, threatened, legal,
administrative, arbitral or other proceedings, claims, actions or governmental
or regulatory investigations of any nature against or affecting either Borrower
or any of its respective Subsidiaries that (i) individually or in the
aggregate, would reasonably be expected to materially adversely affect the
business, consolidated financial position or results of operations of the
Borrowers and their Subsidiaries taken as a whole or (ii) that involve this
Agreement or the transactions under this Agreement and could reasonably be
expected to adversely affect the enforceability of any material provision of
this Agreement.

 

3.5                               Financial Statements; No Material Change.  (a)
The consolidated balance sheet of the LLC as of June 30, 2003, and the related
consolidated statement of operations, of members’ capital and of cash flows for
the period January 1, 2003 through June 30, 2003, copies of which have been
presented to the Lenders, present fairly, in all material respects, the
financial condition of the Borrowers and their Subsidiaries, taken as a whole,
at June 30, 2003, and the results of their operations and their cash flows for
the period January 1, 2003 through June 30, 2003, respectively, in conformity
with GAAP.

 

(b)                                 Since June 30, 2003, as reflected in (a)
above, there has been no material adverse change in the business, consolidated
financial position or results of operations of the Borrowers and their
Subsidiaries taken as a whole.

 

3.6                               Employee Benefit Plans.  No “Prohibited Transaction”
(as such term is defined in ERISA) has occurred or ERISA Event has occurred or
is reasonably expected to occur with respect to any “Employee Benefit Plans”
(as such term is defined in ERISA) of the LLC or any of its Subsidiaries or any
ERISA Affiliate which would reasonably be expected to materially adversely
affect the business, consolidated financial position or results of operations
of the Borrowers and their Subsidiaries taken as a whole.  No “Prohibited Transaction” under ERISA or
the Code which would have a material adverse effect on the business,
consolidated financial position or results of operations of the Borrowers and
their Subsidiaries taken as a whole has occurred with respect to the LLC or any
of its Subsidiaries or any ERISA Affiliate or will occur upon the issuance of
any Notes or the execution of this Agreement. The present value of all

 

25

 

accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of  Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed the fair market value of the assets of such
Plan by an amount that could reasonably be expected to result in a material
adverse effect on the business, consolidated financial position or results of
operations of the Borrowers and their Subsidiaries taken as a whole, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumption used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed the fair market value of the assets
of all such underfunded Plans by an amount that could reasonably be expected to
result in a material adverse effect on the business, consolidated financial
position or results of operations of the Borrowers and their Subsidiaries taken
as a whole.

 

3.7                               Taxes.  The LLC and its Subsidiaries have filed all
United States federal income tax returns which are required to be filed by
them.  The LLC and its Subsidiaries have
filed all United States federal information tax returns and all other material
tax returns which are required to be filed by them and their Subsidiaries and
have paid, where applicable, all taxes due pursuant to such returns or pursuant
to any assessment received by the LLC or any of its Subsidiaries, except (i)
those which are currently being contested in good faith by appropriate
proceedings and for which LLC or such Subsidiary, as applicable, would be
liable for the contested taxes if the appeal is unsuccessful and has set aside
on its books adequate reserves to the extent required by GAAP or (ii) where the
failure to do so, individually or in the aggregate, would not reasonably
be  expected to result in a material
adverse effect on the business, consolidated financial position or results of
operations of the LLC and its Subsidiaries taken as a whole. The charges,
accruals and reserves on the books of the LLC and its Subsidiaries in respect
of taxes or other governmental charges assessable against the LLC are, in the
opinion of  the LLC, adequate.  The federal tax identification number for
the LLC is 73-1590261 and the federal tax identification number for the LP is
73-1587712.

 

3.8                               Material Subsidiaries.  Each of such Borrower’s
Material Subsidiaries is a corporation or other legal entity duly incorporated
or formed, validly existing and in good standing under the laws of its
jurisdiction of incorporation or formation, and has all corporate, partnership,
or other powers and all material governmental licenses, authorizations,
consents and approvals required to carry on business as now conducted.

 

3.9                               Investment Company Act.  Neither Borrower is an
“investment company” or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended.

 

3.10                        Regulation U.  No
part of the proceeds of the Loans will be used by either Borrower for any
purpose which violates or would be inconsistent with the provisions of
Regulation U of the Board of Governors of the Federal Reserve.

 

3.11                        Compliance with Laws.  Each Borrower and its
Subsidiaries are in compliance with all laws, regulations, and orders
(including, without limitations, ERISA and Environmental Laws) of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do

 

26

 

so, individually or in the
aggregate, could not reasonably be expected to result in a material adverse
effect on the business, consolidated financial position or results of
operations of the Borrowers and their Subsidiaries taken as a whole.

 

3.12                        Purpose of Loans.  The
proceeds of the Loans shall be used for general limited liability company and
partnership purposes of either or both Borrowers.

 

SECTION 4.  CONDITIONS PRECEDENT

 

4.1                               Conditions to Effectiveness of Agreement.  The
effectiveness of this Agreement is subject to the satisfaction of the following
conditions on the Closing Date:

 

(a)                                  Loan Documents.  The
Administrative Agent shall have received (i) this Agreement, executed and
delivered by a duly authorized officer of each Borrower and each Lender and
(ii) for the account of each Lender that has requested a Note, a Note
conforming to the requirements of subsection 2.2(e) and executed by a duly
authorized officer of each Borrower.

 

(b)                                 Closing Certificate.  The
Administrative Agent shall have received a Closing Certificate of each
Borrower, substantially in the form of Exhibit C and dated the Closing Date;
such Closing Certificate shall be satisfactory in form and substance to the
Administrative Agent and its counsel and shall be executed by the Chairman of
the Board of Directors, the President or any Vice President or the Treasurer or
any Assistant Treasurer, and the Secretary or any Assistant Secretary of the
applicable Borrower.

 

(c)                                  Secretary’s Certificate.  The
Administrative Agent shall have received a certificate of the Secretary or
Assistant Secretary of each Borrower, substantially in the form of Exhibit D
and dated the Closing Date and in form and substance satisfactory to the
Administrative Agent, which certificate shall (i) certify as to the incumbency
and signature of the officers of such Borrower executing this Agreement and any
Notes (with the President or a Vice President of such Borrower attesting to the
incumbency and signature of the Secretary or Assistant Secretary providing such
certificate), (ii) have attached to it a true, complete and correct copy of
each of the certificate of incorporation and by-laws or equivalent
organizational documents of such Borrower, (iii) have attached to it a true and
correct copy of the resolutions of the Board of Directors or General Partner,
as applicable, of such Borrower, which resolutions shall authorize the
execution, delivery and performance of this Agreement and the Notes and the
borrowings by such Borrower hereunder and (iv) certify that, as of the date of
such certificate, none of such certificate of incorporation, by-laws or
partnership agreements, as applicable, or board resolutions or resolutions of
the general partner, as applicable, shall have been amended, supplemented,
modified, revoked or rescinded.

 

(d)                                 Fees and Expenses.  The
Administrative Agent, the Co-Lead Arrangers and the Lenders shall have received
their respective fees referred to in subsection 2.9(c) and any expenses for
which an invoice has been submitted to be received on the Closing Date.

 

27

 

(e)                                  Legal Opinion.  The
Administrative Agent shall have received executed legal opinions substantially
in the form of Exhibits E-1 and E-2 and dated the Closing Date, with such
changes therein as shall be requested or approved by the Administrative Agent.

 

(f)                                    Approvals.  The Administrative Agent
shall have received a certificate of an officer of the Borrowers certifying
that any governmental and third party approvals necessary and material in
connection with the financing contemplated hereby and the continuing operations
of either Borrower and its Subsidiaries shall have been obtained and be in full
force and effect.

 

(g)                                 Representations and Warranties.  The
Administrative Agent shall have received a certificate of an officer of the
Borrowers certifying that each of the representations and warranties made by
each Borrower in this Agreement shall be true and correct in all material respects
on and as of such date as if made on and as of such date.

 

(h)                                 No Default.  The Administrative Agent
shall have received a certificate of an officer of each of the Borrowers
certifying that no Default or Event of Default shall have occurred and be continuing
on such date or after giving effect to the extensions of credit, if any,
requested to be made on such date.

 

(i)                                     Payment and Termination of Existing
Commitments.  The Administrative Agent shall have received
payment in full on the Closing Date of any outstanding amounts due under that
certain 364-Day Credit Agreement (the “Prior Credit Agreement”) entered
into as of August 29, 2002 by and among the Borrowers, Barclays Bank PLC, as
administrative agent, The Royal Bank of Scotland plc, as syndication agent, The
Bank of Tokyo-Mitsubishi Ltd. and Sumitomo Mitsui Banking Corporation, as
co-documentation agents, and the Lenders, along with a certificate of an
officer of the Borrowers certifying that there has been a complete termination
of all commitments under the Prior Credit Agreement.

 

4.2                               Conditions to Each Loan.  The agreement of each Lender
to make any Loan requested to be made by it on any date pursuant to subsection
2.3 (including, without limitation, its initial Loan requested to be made by
it) and subsection 2.4 is subject to the satisfaction of the following
conditions precedent as of the date such Loan is requested to be made:

 

(a)                                  Representations and Warranties. 
Each of the representations and warranties made by each Borrower in this
Agreement shall be true and correct in all material respects on and as of such
date as if made on and as of such date, except that the representations and
warranties contained in subsections 3.4 and 3.5 shall not be restated on any
Borrowing Date.

 

(b)                                 No Default.  No Event of Default and no
Default shall have occurred and be continuing on such date or after giving
effect to the Loans requested to be made on such date.

 

Each borrowing by either
Borrower shall constitute a representation and warranty by the Borrowers
hereunder as of the date of each such borrowing that the conditions in this
subsection 4.2 have been satisfied.

 

28

 

SECTION 5.  AFFIRMATIVE COVENANTS OF THE
BORROWERS

 

So long as any Commitment
remains in effect, any Note remains outstanding and unpaid or any other amount
is owing to any Lender or the Administrative Agent hereunder:

 

5.1                               Obligations. 
Each Borrower will pay and discharge, and will cause each of its
Subsidiaries to pay and discharge, at or before maturity or before they become
delinquent, all their respective material obligations and liabilities,
including, without limitation, tax liabilities, except (i) where such
obligations or liabilities may be contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of such Borrower, or (ii) where the failure to do so, individually or
in the aggregate, would not reasonably be expected to result in a material
adverse effect on the business, consolidated financial position or results of
operations of the Borrowers and their Subsidiaries taken as a whole.

 

5.2                               Financial Reporting Requirements.  The
LLC will:

 

(a)                                  furnish to the Administrative Agent and each
Lender fiscal year audited financial statements or make available its Annual
Report on Form 10-K via the EDGAR system of the Securities and Exchange
Commission (“EDGAR”) on the Internet, in either case, as soon as
available and in any event within 90 days after the end of each fiscal year of
the LLC, which fiscal year audited financial statements will include an audited
consolidated balance sheet of the LLC and its consolidated Subsidiaries as of
the end of such fiscal year and the related audited consolidated statements of
income and cash flows and changes in members’ capital for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by independent public accountants of nationally
recognized standing;

 

(b)                                 furnish to the Administrative Agent and each
Lender unaudited quarterly financial statements or make available its Quarterly
Report on Form 10-Q via EDGAR on the Internet, in either case, as soon as
available and in any event within 45 days after the end of each of the first
three quarters of each fiscal year of the LLC, which unaudited quarterly
financial statements will include a consolidated balance sheet of the LLC and
its consolidated Subsidiaries as of the end of such quarter and the related (i)
consolidated statement of income for such quarter and for the portion of the
LLC’s fiscal year ended at the end of such quarter, and (ii) consolidated
statement of cash flows for the portion of the LLC’s fiscal year ended at the
end of such quarter, setting forth in each case in comparative form (A) for the
consolidated balance sheet, the figures as of the end of the LLC’s previous
fiscal year, (B) for the consolidated statement of income, the figures for the
corresponding quarter and the corresponding portion of the LLC’s previous
fiscal year and (C) for the consolidated statement of cash flows, the figures
for the corresponding portion of the LLC’s previous fiscal year, the furnishing
or making available of such financial statements shall constitute a certification
(subject to normal year-end adjustments) as to fairness of presentation and
GAAP;

 

(c)                                  furnish to the Administrative Agent within 10
days of so furnishing or making available via EDGAR each set of financial
statements referred to in clause (a) above, a certificate of the chief
financial officer, Treasurer or the chief accounting officer of the LLC stating
whether there exists on the date of such certificate any Default or Event of
Default and, if

 

29

 

any Default or Event of
Default then exists, setting forth the details thereof and the action which
such Borrower is taking or proposes to take with respect thereto.  The Administrative Agent will furnish a copy
of such certificate to each Lender within a reasonable time after receipt from
the Borrowers;

 

(d)                                 furnish to the Administrative Agent from time
to time such additional information regarding the financial position or
business of the Borrowers and their Subsidiaries as the Administrative Agent
may reasonably request.

 

5.3                               Notices.  Each Borrower as to itself will promptly
furnish, or cause to be furnished, to the Administrative Agent notice of:  (i) the occurrence of any Default or Event
of Default hereunder; (ii) the institution of any litigation or proceeding
involving it or a Subsidiary that could reasonably be expected to materially
and adversely affect the business, financial condition or results of operations
of such Borrower and its Subsidiaries taken as a whole (whether or not the
claim asserted therein is considered to be covered by insurance); (iii) any
default by such Borrower or any of its Subsidiaries in the payment of principal
of or interest on Debt of such Borrower and/or its Subsidiaries in an aggregate
amount of $100,000,000 or more; and (iv) any downward change in the ratings
publicly announced by S&P or Moody’s of 
the LLC’s and LP’s then current 
joint and several Senior Debt.

 

5.4                               Maintenance of Property; Insurance. 
Each Borrower will, and will cause each of its Subsidiaries to, (a) keep
and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted, and (b) maintain,
with financially sound insurance companies, insurance in such amounts and
against such risks as are customarily maintained, in the reasonable judgment of
the Borrowers, by companies engaged in the same or similar businesses operating
in the same or similar locations; provided, that any such insurance may be
maintained through a program of self-insurance to the extent consistent with
prudent business practice.

 

5.5                               Compliance with Laws.  Each Borrower will comply,
and cause each of its Subsidiaries to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of any
Governmental Authority (including, without limitation, ERISA and the rules and
regulations thereunder and Environmental Laws), except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings or
to the extent that failure to comply therewith would not reasonably be expected
to have a material adverse effect on the business, financial position or
results of operations  of the Borrowers
and their Subsidiaries taken as a whole.

 

5.6                               Books and Records. 
Each Borrower will, and will cause each Subsidiary to, keep proper books
of record and account in which full, true and correct entries in conformity
with GAAP shall be made of all dealings and transactions in relation to its
business and activities.

 

5.7                               Further Assurances.  Each Borrower will from time to time, at its
expense, promptly execute and deliver to the Administrative Agent and the
Lenders such further instruments and documents, and take such further action,
that may be reasonably necessary, or that the Administrative Agent or the
Lenders may reasonably request, in order to enable the

 

30

 

Administrative Agent and the
Lenders to exercise or enforce their respective rights or remedies under or in
connection with this Agreement and any Notes.

 

SECTION 6.  NEGATIVE COVENANTS OF THE BORROWERS

 

So long as any Commitment
remains in effect, any Note remains outstanding and unpaid or any other amount
is owing to any Lender or the Administrative Agent hereunder:

 

6.1                               Negative Pledge. 
Neither Borrower and no Subsidiary will create, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired by it, except:

 

(a)                                  any Lien existing on any asset of any Person
at the time such Person becomes a Subsidiary and not created in contemplation
of such event;

 

(b)                                 any Lien on any asset securing Debt incurred
or assumed for the purpose of financing all or any part of the cost of
acquiring such asset, provided, that such Lien attached to such asset
concurrently with or within six months after the acquisition thereof;

 

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

 

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

 

(e)                                  any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by any Lien permitted by
any of the foregoing clauses of this subsection 6.1; provided, that the
principal amount of such Debt is not increased and such Debt is not secured by
any additional assets;

 

(f)                                    Permitted Encumbrances;

 

(g)                                 Liens to secure indebtedness of the pollution
control or industrial revenue bond type and Liens in favor of the United States
or any state thereof, or any department, agency, instrumentality or political
subdivision of any such jurisdiction, to secure any Debt incurred for the
purpose of financing all or any part of the purchase price or cost of
constructing or improving the property subject thereto; and

 

(h)                                 Liens not otherwise permitted by the
foregoing clauses of this subsection 6.1, securing Debt in an aggregate
principal amount at any time outstanding not to exceed 10% of Consolidated Net
Assets.

 

6.2                               Consolidations, Mergers and Sales of Assets. 
Neither of the Borrowers will merge with or into or consolidate with or
sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions and including by means of any liquidation, dissolution,
merger or sale of Capital Stock or otherwise) all or substantially all of its
assets and those of its Subsidiaries, taken as a whole, to a Person unless (i)
the resulting, surviving or transferee Person (the “Successor”) shall
(unless such Successor is a Borrower) expressly assume, by amendment

 

31

 

to this Agreement executed
by the Borrowers, the Successor and the Administrative Agent, all of the
obligations of such Borrower under this Agreement, the Loans and any Notes;
(ii) immediately after giving effect to such transaction, no Default or Event
of Default shall have occurred and be continuing; and (iii) such Successor,
immediately after giving effect to such transaction, shall have an Investment
Grade Rating, if, immediately before the transaction, the Senior Debt has an
Investment Grade Rating; provided, if, immediately before the
transaction, the Senior Debt does not have an Investment Grade Rating, in no
event shall the rating by S&P and Moody’s of the long term unsecured senior
debt securities of such Successor, immediately after the transaction, be less
than such ratings of the Senior Debt immediately prior to the transaction.

 

SECTION 7.  EVENTS OF DEFAULT

 

Upon the occurrence and
during the continuance of any of the following events:

 

(a)                                  any principal of any Loan shall not be paid
when due in accordance with the terms hereof; or

 

(b)                                 any interest on any Loan, any Commitment Fee,
Utilization Fee or Agent’s/Arranger’s Fees shall not be paid when due, and, in
each case, such amount shall remain unpaid for 5 days; or

 

(c)                                  any representation or warranty made by either
Borrower in Section 3 or in any certificate, financial or other statement
furnished by such Borrower pursuant to this Agreement shall prove to have been
incorrect in any material adverse respect when made; or

 

(d)                                 either Borrower shall fail to perform or
observe any of its covenants or agreements contained in Section 6 and such
failure continues unremedied for 30 days; or

 

(e)                                  either Borrower shall fail to perform or
observe any other term, covenant or agreement contained in this Agreement or
any Notes, and any such failure shall remain unremedied for 30 days after notice
of such failure shall have been given to the Borrowers by the Administrative
Agent or the Required Lenders; or

 

(f)                                    either Borrower or any of its Material
Subsidiaries shall default beyond any applicable period of grace in any payment
of principal of or interest on any indebtedness for any borrowed money for
which such Borrower or such Material Subsidiary is liable (other than
indebtedness as to which the lenders thereof have agreed that there shall be no
recourse against the assets of the Borrower or any Material Subsidiary, as the
case may be, other than the assets securing such indebtedness) in an amount
then outstanding of $100,000,000 or more when due, whether by its terms or as a
result of such indebtedness becoming or being declared due and payable prior to
the date on which it could otherwise become due and payable; or

 

(g)                                 an involuntary proceeding shall be commenced
or an involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of either Borrower or any Material
Subsidiary or their respective debts, or of a substantial part of their
respective assets, under any  Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator,

 

32

 

conservator or similar
official for either Borrower or any Material Subsidiary or for a substantial
part of their respective assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

 

(h)                                 (i) with respect to clause (A),
ConocoPhillips, ChevronTexaco or any of their respective Affiliates shall as to
either Borrower, and (ii) with respect to all clauses in this subsection 7(h),
either Borrower or any Material Subsidiary, shall (A) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (B) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (g) of this Section, (C) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for such Borrower or such Material Subsidiary or for a
substantial part of its assets, (D) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (E) make a
general assignment for the benefit of creditors or (F) take any action for the
purpose of effecting any of the foregoing; or

 

(i)                                     one or more judgments or decrees shall be entered
against either Borrower or any of their respective Subsidiaries or any
combination thereof involving in the aggregate a liability (not paid or covered
by insurance) of $100,000,000 or more with respect to such Borrower or such
Subsidiary and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of either Borrower or any Subsidiary to enforce any such judgment or
judgments ; or

 

(j)                                     an ERISA Event shall have occurred that, when
taken together with all other ERISA Events that have occurred, would reasonably
be expected to result in liability of the LLC and its Subsidiaries in an
aggregate amount that would reasonably be expected to result in a material
adverse effect on the business, consolidated financial position or results of
operations of the Borrowers and their Subsidiaries taken as a whole; or

 

(k)                                  ConocoPhillips and/or ChevronTexaco shall
cease to own, directly or indirectly, in the aggregate at least 50% of the
Common Stock of, and the total voting power of the outstanding Voting Stock of,
each of LLC, LP, and all partners in LP;

 

then, and in any such event, (A) if such event is an Event of Default
specified in subsections 7(g) or (h) above with respect to either Borrower,
automatically the Commitments shall terminate and the Loans hereunder (with
accrued interest thereon) and all other amounts  owing under this Agreement and any Notes
shall immediately become due and payable, and (B) if such event is any other
Event of Default, either or both of the following actions may be taken: (i)
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
of default to the Borrowers, declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice of
default to the Borrowers, declare the Loans hereunder (with accrued interest
thereon) and all other amounts 

 

33

 

owing under this Agreement and any Notes to be due and payable
forthwith, whereupon the same shall immediately become due and payable.  Except as expressly provided above in this
Section 7, presentment, demand, protest, notice of acceleration, notice of
intent to accelerate, and all other notices of any kind are hereby expressly
waived.

 

SECTION 8.  THE ADMINISTRATIVE AGENT

 

8.1                               Appointment of Administrative Agent; No Other Duties. 
Subject to subsection 8.9, each Lender hereby irrevocably designates and
appoints Barclays Bank PLC as the Administrative Agent of such Lender under
this Agreement, and each such Lender irrevocably authorizes Barclays Bank PLC
as the Administrative Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent. Without limiting
the generality of the foregoing sentence, the use of the term “agent” in this
Agreement with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. 
Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
independent contracting parties.

 

8.2                               Delegation of Duties.  The Administrative Agent may
execute any of its duties under this Agreement by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it in the absence of the
Administrative Agent’s gross negligence or willful misconduct.

 

8.3                               Exculpatory Provisions.  Neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates (collectively, the “Administrative Agent-Related Persons”)
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement (except for its or
such Person’s own gross negligence or willful misconduct), or (ii) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by either Borrower or any officer thereof
contained in this Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any Notes or for any failure of either Borrower to perform its obligations hereunder
or thereunder.  No Administrative
Agent-Related Person shall be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement, or to inspect the properties,
books or records of either Borrower or any Subsidiary or Affiliate thereof.

 

34

 

8.4                               Reliance by Administrative Agent.  (a)
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, communication, signature,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex, teletype or telephone message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to
either Borrower), independent accountants and other experts selected by the
Administrative Agent.  The
Administrative Agent may deem and treat the registered owner of any Note as the
owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent.  The Administrative Agent shall
be fully justified in failing or refusing to take any action under this
Agreement and any Note unless it shall first receive such advice or concurrence
of the Required Lenders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.  The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and any Notes in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders
of any Notes.  Where this Agreement
expressly permits or prohibits an action unless Required Lenders otherwise
determine, and in all other instances, the Administrative Agent may, but shall
not be required to, initiate any solicitation for the consent or a vote of the
Lenders.

 

(b)                                 For purposes of determining compliance with
the conditions specified in subsection 4.1, each Lender shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter either sent by the Administrative Agent to each Lender for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender.

 

8.5                               Notice of Default.  The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder (other than an Event of
Default described in subsection 7(a)) unless the Administrative Agent has
received written notice from a Lender or either Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default”, and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement, (ii)
the contents of any certificate, report or other document delivered hereunder
or in connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Section 4 or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative
Agent.  In the event that the
Administrative Agent receives such a notice or any notice pursuant to subsection
5.2 or 5.3, the Administrative Agent shall give prompt notice thereof to the
Lenders.  The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders in accordance with Section 7;
provided, that unless and until the Administrative Agent shall have received
any such directions, the Administrative Agent may

 

35

 

(but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interests
of the Lenders.

 

8.6                               Non-Reliance on Administrative Agent and Other Lenders. 
Each Lender expressly acknowledges that no Administrative Agent-Related
Person has made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any consent to and acceptance
of any assignment or review of the affairs of each Borrower or any of their
Subsidiaries or Affiliates, shall be deemed to constitute any representation or
warranty by any Administrative Agent-Related Person to any Lender, including
whether any Administrative Agent-Related Persons have disclosed material
information in their possession.  Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon any Administrative Agent-Related Person or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of each Borrower and its Subsidiaries and Affiliates, and all
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to make its portion of the Loans hereunder
and enter into this Agreement.  Each
Lender also represents that it will, independently and without reliance upon
any Administrative Agent-Related Person or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and any Notes, and to make such investigation as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of each Borrower
and their Subsidiaries and Affiliates. 
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of
either Borrower or any of their Subsidiaries or Affiliates which may come into
the possession of any Administrative Agent-Related Person.

 

8.7                               Indemnification. 
Whether or not the transactions contemplated hereby are consummated, the
Lenders agree to indemnify each Administrative Agent-Related Person in its
capacity as such (to the extent not reimbursed by the Borrower within a
reasonable period after demand has been made by the Administrative Agent to the
Borrowers for those amounts owing by either Borrower, and without limiting the
obligation of the Borrowers to do so), ratably according to the respective
principal amounts of their Commitments and hold harmless each Administrative
Agent-Related Person, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including without
limitation at any time following the payment of the Loans) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of this Agreement, or any documents contemplated by or referred
to herein or the transactions contemplated hereby or any action taken or
omitted by any Administrative Agent-Related Person under or in connection with
any of the foregoing; provided, that no Lender shall be liable for the payment
of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from any Administrative Agent-Related Person’s gross negligence or willful
misconduct; provided, however, that no action taken in accordance with the
directions

 

36

 

of Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of
this Section.  Without limitation of the
foregoing, each Lender shall reimburse the Administrative Agent upon demand for
its ratable share of any costs or out-of-pocket expenses (including legal fees
and expenses) incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
or any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of either
Borrower.  The undertaking in this
Section shall survive the payment of all obligations hereunder and the
resignation or replacement of the Administrative Agent.

 

8.8                               Administrative Agent in Its Individual Capacity. 
Barclays Bank PLC and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in
and generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with either Borrower and its Subsidiaries and
Affiliates as though Barclays Bank PLC were not the Administrative Agent or the
Same Day Lender hereunder and without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant to
such activities, Barclays Bank PLC or its Affiliates may receive information
regarding any Borrower or its Affiliates (including information that may be
subject to confidentiality obligations in favor of either Borrower or such
Affiliate) and acknowledge that the Administrative Agent shall be under no obligation
to provide such information to them. 
With respect to its Loans, Barclays Bank PLC shall have the same rights
and powers under this Agreement as any other Lender and may exercise the same
as though it were not the Administrative Agent or the Same Day Lender.

 

8.9                               Successor or Substitute Administrative Agent.  (a)
The Administrative Agent may resign as Administrative Agent upon not less than
10 days’ notice to the Lenders and the Borrowers.  If the Administrative Agent shall resign as Administrative Agent
under this Agreement, then the Borrowers shall appoint from among the Lenders a
successor agent for the Lenders; provided, if an Event of Default under
subsections 7(g) or (h) has occurred and is continuing, then the Required
Lenders shall appoint from among the Lenders a successor agent for the
Lenders.  If no successor administrative
agent is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint a successor
administrative agent from among the Lenders (i) after consulting with the
Lenders and (ii) unless an Event of Default has occurred and is continuing,
subject to the Borrowers’ consent (such consent not to be unreasonably
withheld).

 

(b)                                 Any successor or substitute agent pursuant to
subsection 8.9(a) shall succeed to the rights, powers and duties of the
Administrative Agent, and the term “Administrative Agent” shall mean such
successor or substitute agent effective upon its acceptance of its appointment,
and the former Administrative Agent’s rights, powers and duties as
Administrative Agent shall be terminated upon the acceptance by such successor
or substitute agent of its appointment, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. 
After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of Section 8 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement.

 

37

 

8.10                        Syndication Agent; Co-Documentation Agents; Co-Lead Arrangers. 
None of the Lenders or other Persons or the Co-Lead Arrangers identified
on the facing page, in this Agreement, or signature pages of this Agreement as
a “syndication agent,” “co-documentation agent,” “managing agent,” “co-agent,”
“co-lead arranger,” or “book manager” shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. 
Without limiting the foregoing, none of the Lenders or other Persons or
the Co-Lead Arrangers so identified as a “syndication agent,” “co-documentation
agent,” “managing agent,” “co-agent,” “lead arranger,” or “book manager” shall
have, or be deemed to have, any fiduciary relationship with any Lender.  Each Lender acknowledges that it has not
relied, and will not rely, on any of the Lenders or the Co-Lead Arrangers so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.

 

SECTION 9.  MISCELLANEOUS

 

9.1                               Amendments and Waivers.  Neither this Agreement, any
Note, nor any terms hereof or thereof may be waived, amended, supplemented or
modified, except in accordance with the provisions of this subsection.  The Required Lenders may, or with the
written consent of the Required Lenders, the Administrative Agent may, from
time to time, enter into with the Borrowers written waivers, amendments,
supplements or modifications hereto for the purpose of adding any provisions to
this Agreement or any Notes or changing in any manner the rights of the Lenders
or the Borrowers hereunder or thereunder or waiving, on such terms and
conditions as may be specified in such instrument, any of the requirements of
this Agreement or any Notes or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (a) reduce the amount or extend the scheduled
date of maturity of any Loan or of any mandatory prepayment thereof, reduce the
stated rate of any interest thereon or fee payable hereunder or extend the
scheduled date of any payment thereof or increase the aggregate amount or
extend the expiration date of any Lender’s Commitment, in each case without the
written consent of each Lender affected thereby, (b) amend, modify or waive any
provision of this subsection 9.1 or reduce the percentage specified in the
definition of Required Lenders, or consent to the assignment or transfer by
either Borrower of any of its rights and obligations under this Agreement, or
release either Borrower from liability hereunder or under any Note, in each
case without the written consent of all the Lenders, or (c) amend, modify or
waive any provision of Section 8 or otherwise affect the rights or duties of
the Administrative Agent without the written consent of the then Administrative
Agent.  In addition, no such agreement
shall amend, modify or otherwise affect the rights or duties of the Same Day
Lender under this Agreement without the prior written consent of the Same Day
Lender. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the
Borrowers, the Lenders, the Administrative Agent and all future holders of the
Loans.  In the case of any waiver, the
Borrowers, the Lenders and the Administrative Agent shall be restored to their
former positions and rights hereunder and under the outstanding Loans, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.

 

9.2                               Notices.  Unless otherwise expressly permitted to be
given by telephone (not voicemail), all notices, requests, demands or other
communications to or upon the respective parties hereto to be effective shall
be in writing (including by telecopy) and shall be deemed to

 

38

 

have been duly given or made
when delivered or on the fourth Business Day after depositing the same in the
mails, registered or certified mail, postage prepaid or in the case of notice
by telecopy, when receipt is confirmed. All notices shall be addressed as
follows in the case of the Borrowers and the Administrative Agent, and as set
forth in Schedule I in the case of any Lender, or to such other address
as any of the parties hereto and any future holders of the Loans may designate
by written notice:

 

	
  The Borrowers:

  	
  Chevron Phillips Chemical Company LLC and Chevron Phillips Chemical
  Company LP

  10001 Six Pines Drive

  The Woodlands, Texas 77380

  Attention: Treasurer

  Telecopier:  (832) 813-4771

  Telephone:  (832) 813-4436

  
	
   

  	
   

  
	
  Notice for Borrowings:

  	
  Barclays Bank PLC, New York Branch

  200 Park Avenue, 4th Floor

  New York, NY 10166

  Attention: Monica Mikolajczk

  Telecopier:  (212) 412-5306

  Telephone:  (212) 412-3709

  Email:  monica.mikolajczk@barcap.com

  
	
   

  	
   

  
	
  The Administrative Agent: (for all notices other than  notices of borrowing)

  	
  Barclays Capital

  200 Park Avenue, 4th Floor

  New York, NY 10166

  Attention: Nicholas A. Bell

  Telecopier: (212) 412-7600

  Telephone: (212) 412-4029

  Email: nicholas.bell@barcap.com

  
	
   

  	
   

  
	
  The Same Day Lender:

  	
  Barclays Bank PLC, New York Branch

  200 Park Avenue, 4th Floor

  New York, NY 10166

  Attention: Monica Mikolajczk

  Telecopier:  (212) 412-5306

  Telephone:  (212) 412-3709

  Email:  monica.mikolajczk@barcap.com

  

 

provided, that any notice, request, demand or other communication to or
upon the Administrative Agent or the Lenders pursuant to subsections 2.3, 2.4,
2.5(b) and (c), and 2.7 shall not be effective until received.  Electronic mail and internet and intranet
websites may be used to

 

39

 

distribute routine communications, such as financial statements and
other information, and to distribute agreements and other documents to be
signed by Administrative Agent, Syndication Agent, Co-Documentation Agents,
Co-Lead Arrangers, Lenders and Borrowers. 
No other legally binding or time-sensitive communication or request for
a Loan or a continuation or conversion thereof may be sent by electronic mail
without the consent of, or confirmation to, the intended recipient in each
instance.

 

9.3                               No Waiver; Cumulative Remedies.  No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.

 

9.4                               Confidentiality. 
Each Lender shall maintain in confidence and not disclose to any Person
any non-public information furnished to it pursuant to this Agreement and
designated by either Borrower as such (“Confidential Information”)
without the prior consent of such Borrower, subject to each Lender’s (a)
obligation to disclose any Confidential Information pursuant to a request or
order under applicable laws and regulations or pursuant to a subpoena or other
legal process, (b) right to disclose any Confidential Information to other
Lenders, to bank examiners, to its Affiliates, auditors and counsel, and to any
Participant or Purchasing Lender (each, a “Transferee”) and prospective
Transferee pursuant to subsection 9.6(c) approved by such Borrower (other than
during the existence of an Event of Default under subsection 7(g) or (h)), (c)
right to disclose any Confidential Information in connection with any
litigation or dispute or the exercise of any remedy hereunder involving the
Administrative Agent or the Lenders and either Borrower or any of its
Subsidiaries; provided, however, that Confidential Information
disclosed pursuant to clause (b) or (c) of this sentence shall be so disclosed
subject to such procedures as are reasonably calculated to maintain the
confidentiality thereof. 
Notwithstanding the foregoing provisions of this subsection 9.4, (a) the
foregoing obligation of confidentiality shall not apply to any Confidential
Information that was known to such Lender or any of their respective Affiliates
prior to the time it received such Confidential Information from either
Borrower pursuant to this Agreement, other than as a result of the disclosure
thereof by a Person who, to the knowledge or reasonable belief of such Lender,
was prohibited from disclosing it by any duty of confidentiality arising (under
this Agreement or otherwise) by contract or law, (b) the foregoing obligation
of confidentiality shall not apply to any Confidential Information that becomes
part of the public domain independently of any act of such Lender not permitted
hereunder or when identical or substantially similar information is received by
such Lender, without restriction as to its disclosure or use, from a Person who
was not prohibited from disclosing it by any duty of confidentiality arising
(under this Agreement or otherwise) by contract or law and (c)  the foregoing obligation of confidentiality
shall not apply to, and each of the Agents and the Lenders (and each Person
employed or retained by such Agents or Lenders who are or are expected to
become engaged in evaluating, approving, structuring or administering the
Loans) may disclose to any Person, without limitation of any kind, the “tax
treatment” and “tax structure” (in each case, within the meaning of United
States Treasury Regulation Section 1.6011-4) of the Loan transactions
contemplated by this Agreement and the Notes, and all materials of any kind
(including opinions or other tax analyses) related thereto that

 

40

 

are or have been provided to
such Agent or Lender relating to such tax treatment or tax structure; provided, that with respect to any
document or similar item that in either case contains confidential information
concerning such tax treatment or tax structure of the Loan transactions
contemplated by this Agreement and the Notes as well as other information, this
sentence shall only apply to such portions of the documents or similar item
that relate to such tax treatment or tax structure.  The obligations of each Lender under this subsection 9.4 shall
survive the termination of this Agreement and the payment of any Notes and all
other amounts payable hereunder.

 

9.5                               Payment of Expenses; Indemnification.  (a)
The Borrowers agree (i) to pay or reimburse the Administrative Agent and the
Co-Lead Arrangers for all their out-of-pocket costs and expenses incurred in
connection with the development, preparation, negotiation, execution and
syndication of this Agreement and any Notes and any other documents prepared in
connection herewith, and the consummation of the transactions contemplated
hereby and thereby, including, without limitation, the reasonable legal fees
and disbursements of Mayer, Brown, Rowe & Maw, counsel to the
Administrative Agent, but excluding all other legal fees and disbursements,
(ii) to pay or reimburse the Administrative Agent for all their costs and
expenses incurred in connection with any amendment, supplement or modification
requested by either or both Borrowers to this Agreement and any Notes and any
other documents prepared in connection herewith, including, without limitation,
the reasonable legal fees and disbursements of counsel to the Administrative
Agent, but excluding all other legal fees and disbursements, and (iii) to pay
or reimburse the Administrative Agent and the Lenders in connection with the
enforcement or preservation of any rights under this Agreement, any Notes and
any such other documents, including, without limitation, legal fees and
disbursements of counsel to the Administrative Agent and counsel to each
Lender.

 

(b)                                 The Borrowers shall indemnify the
Administrative Agent, the Syndication Agent, the Co-Documentation Agents, the
Co-Lead Arrangers and the Lenders and any of their respective Affiliates, and
their respective directors, officers, employees and agents (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance
by the parties hereto of their respective obligations hereunder or the
consummation of the transactions contemplated hereby, (ii) any Loan or the use
of the proceeds therefrom, or (iii) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided, that such indemnity shall not, as
to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses resulted in whole or in part from the
gross negligence or willful misconduct of such Indemnitee.

 

9.6                               Successors and Assigns; Participations; Purchasing Lenders.  (a)
This Agreement shall be binding upon and inure to the benefit of the Borrowers,
the Lenders, the Administrative Agent, all future holders of the Loans and
their respective successors and assigns, except that neither Borrower may
assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.

 

41

 

(b)                                 Any Lender may, in accordance with applicable
law, at any time sell to one or more banks or other entities (each, a “Participant”)
participating interests in any Loan owing to such Lender, any Note held by such
Lender, any Commitment of such Lender or any other interests of such Lender
hereunder.  In the event of any such
sale by a Lender of a participating interest to a Participant, such Lender’s
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the performance
thereof, such Lender shall remain the holder of its Loan for all purposes under
this Agreement, and the Borrowers and the Administrative Agent shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. 
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided, that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in clause (a) of the
proviso to subsection 9.1 that affects such Participant.  Without affecting the limitations in the
preceding sentences, the participating banks or other financial institutions,
shall not be Lenders hereunder for any purpose except, if the participation
agreement so provides, each Participant shall be entitled to the benefits of
subsections 2.14, 2.16, and 2.17 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if it were a Lender;
provided, that no Participant shall be entitled to receive any greater amount
pursuant to any such subsection than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred
by such transferor Lender to such Participant had no such transfer occurred;
and provided further, that, in the case of subsection 2.16, such Participant
shall have complied with the requirements of that subsection.

 

(c)                                  Each Lender may, in accordance with
applicable law, with the consent of the Borrowers (which shall not be unreasonably
withheld and which will not be required during the existence of an Event of
Default under subsections 7(g) or (h)), the Same Day Lender and the
Administrative Agent (except no consent of the Borrowers or the Administrative
Agent shall be required in the case of an assignment to a Lender or an
Affiliate of a Lender) sell or assign to one or more Lenders or additional
banks or other entities (a “Purchasing Lender”) all or a part of its
rights and obligations under this Agreement and any Notes pursuant to an
Assignment and Acceptance executed by such Purchasing Lender, such transferor
Lender, the Administrative Agent, the Same Day Lender and the Borrowers;
provided, that, if such sale is not to one or more Lenders and is to an
additional lender, (i) such sale shall be in a minimum amount of $10,000,000
and (ii) the Commitment retained by such transferor Lender after such sale
shall be at least $10,000,000, unless the transferor Lender sells all of its
Commitment hereunder.  Upon (i) the
execution of such Assignment and Acceptance, (ii) delivery of any executed
forms required by subsection 2.16, (iii) recordation of such transfer in the
Register and (iv) payment by such Purchasing Lender of the registration and
processing fee described in subsection 9.6(e), from and after the Transfer
Effective Date determined pursuant to such Assignment and Acceptance (which
shall not be earlier than the date which is five Business Days after the date
the Administrative Agent has received the Assignment and Acceptance), such
Purchasing Lender shall for all purposes be a Lender party to this Agreement
and shall have all the rights and obligations of a Lender under this Agreement
to the same extent as if it were an original party hereto with a Commitment as
set forth therein and the transferor Lender shall be released from

 

42

 

any further obligations
under this Agreement to the extent of such assigned interests; if such
transferor Lender no longer holds any rights or obligations under this
Agreement, such transferor Lender shall cease to be a “Lender” hereunder except
that its rights under subsections 2.14, 2.16, 2.17 and 9.5 shall not be
affected.  Such Assignment and
Acceptance shall be deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of the Commitments and the Commitment Percentages arising
from the purchase by such Purchasing Lender of all or a portion of the rights
and obligations of such transferor Lender under this Agreement.  Upon the consummation of any transfer to a
Purchasing Lender pursuant to this subsection 9.6(c), the transferor Lender,
the Administrative Agent and the Borrowers shall make appropriate arrangements
so that, if required, a replacement Note is issued to such transferor Lender
and a new Note or, as appropriate, a replacement Note, is issued to such
Purchasing Lender, in each case in principal amounts reflecting their
respective Commitments.  Such new Notes
shall be dated the Closing Date and shall otherwise be in the form of the Notes
replaced thereby.

 

(d)                                 The Administrative Agent shall maintain, as
agent for the Borrowers, at its address referred to in subsection 9.2, a copy
of each Assignment and Acceptance delivered to it and a register (the “Register”)
for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender from
time to time.  The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrowers, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as the owner of the Loan recorded therein for
all purposes of this Agreement.  Any assignment
of any Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register.  Any assignment or transfer of all or part of
a Loan evidenced by a Note shall be registered on the Register only upon
surrender for registration of assignment or transfer of the Note evidencing
such Loan, accompanied by a duly executed Assignment and Acceptance, and
thereupon one or more new Notes shall be issued to the designated Assignee.  The Register shall be available for
inspection by either Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice. 
Upon the written request of the Borrowers, the Administrative Agent shall
deliver promptly a copy of the Register to the Borrowers.

 

(e)                                  Upon its receipt of an Assignment and
Acceptance executed by a transferor Lender, a Purchasing Lender, the Borrowers,
the Same Day Lender, and the Administrative Agent, together with payment by the
Purchasing Lender to the Administrative Agent of a registration and processing
fee of $3,500 from such Purchasing Lender and/or such transferor Lender
(including in the case of assignments to Affiliates of assigning Lenders), the
Administrative Agent shall (i) promptly accept such Assignment and Acceptance,
(ii) on the Transfer Effective Date determined pursuant thereto record the
information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and the Borrowers.

 

(f)                                    Each Borrower authorizes each Lender to
disclose to any Transferee and any prospective Transferee any and all financial
information (other than Confidential Information, except as permitted by
subsection 9.4) in such Lender’s possession concerning such Borrower which has
been delivered to such Lender by such Borrower pursuant to this Agreement

 

43

 

or which has been delivered
to such Lender by such Borrower in connection with such Lender’s credit
evaluation of such Borrower prior to entering into this Agreement.

 

(g)                                 For avoidance of doubt, the parties to this
Agreement acknowledge that the provisions of this subsection 9.6 concerning
assignments of Loans and Notes relate only to absolute assignments and that
such provisions do not prohibit assignments creating security interests,
including, without limitation, any pledge or assignment by a Lender of any Loan
or Note to any Federal Reserve Bank in accordance with applicable law; provided
that no such assignment, whether to a Federal Reserve Bank or other entity,
shall release a Lender from any of its obligations hereunder or substitute any
such Federal Reserve Bank or other entity for such Lender as a party hereto or
permit an absolute assignment to occur other than in accordance with such
provisions of this subsection 9.6.

 

9.7                               Adjustments; Set-off.  (a) Except to the extent that
this Agreement expressly provides for payments to be allocated to a particular
Lender, if any Lender (a “benefited Lender”) shall, at any time after
the Loans have been declared to be due and payable pursuant to Section 7,
receive any payment of all or part of its Loans, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in subsection 7(f), or otherwise) in a greater proportion than any
such payment to and collateral received by any other Lender, if any, in respect
of such other Lender’s Loans, or interest thereon, such benefited Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender’s Loans, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from
such benefited Lender, such purchase shall be rescinded, and the purchase price
and benefits returned, to the extent of such recovery, but without
interest.  Each Borrower agrees that
each Lender purchasing a portion of another Lender’s portion of the Loan pursuant
to this subsection 9.7(a) may exercise all rights of payment (including,
without limitation, rights of set-off) with respect to such portion as fully as
if such Lender were the direct holder of such portion.

 

(b)                                 In addition to any rights and remedies of the
Lenders provided by law, upon the occurrence and during the continuance of an
Event of Default each Lender shall have the right, without prior notice to the
Borrowers, any such notice being expressly waived by each Borrower to the
extent permitted by applicable law, to set off and appropriate and apply
against the obligations under this Agreement any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct
or indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender to or for the credit or the account of either
Borrower.  Each Lender agrees promptly
to notify the Borrowers and the Administrative Agent after any such set-off and
application made by such Lender, provided, that the failure to give such
notice shall not affect the validity of such set-off and application.

 

9.8                               Counterparts. 
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.  A set of the copies of this

 

44

 

Agreement signed by all the
parties hereto shall be lodged with each Borrower and the Administrative
Agent.  Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be as
effective as delivery of a manually executed counterpart of this Agreement.

 

9.9                               GOVERNING LAW.  (a) THIS AGREEMENT AND ANY NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND ANY NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.

 

(b)                                 Notwithstanding anything in subsection 9.9(a)
to the contrary, nothing in this Agreement or in any Note shall be deemed to
constitute a waiver of any rights which any Lender may have under applicable
federal law relating to the amount of interest which any Lender may contract for,
take, receive or charge in respect of any Loans, including any right to take,
receive, reserve and charge interest at the rate allowed by the laws of the
state where such Lender is located.  To
the extent that Texas law is applicable to the determination of the Highest
Lawful Rate, the Lenders and each Borrower agree that (i) if Chapter 303 of the
Texas Finance Code, as amended, is applicable to such determination, the weekly
rate ceiling (formerly known as the indicated (weekly) rate ceiling in Article
1.4, Subtitle 1, Title 79, of the Revised Civil Statutes of Texas, as amended)
as computed from time to time shall apply; provided, that, to the extent
permitted by such Article, the Administrative Agent may from time to time by
notice to the Borrowers revise the election of such interest rate ceiling as
such ceiling affects the then current or future balances of the Loans; and (ii)
the provisions of Chapter 346 of the Texas Finance Code, as amended (formerly
found in Chapter 15 of Subtitle 3, Title 79, of the Revised Civil Statutes of
Texas, 1925, as amended) shall not apply to this Agreement or any Note issued
hereunder.

 

9.10                        Jurisdiction; Venue.  Any legal action or proceeding with respect
to this Agreement may be brought in the courts of the State of New York or of
the United States of America for the Southern District of New York and, by
execution and delivery of this Agreement, each Borrower hereby accepts for and
in respect of its property, generally, irrevocably and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts.  Each Borrower further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail
postage prepaid, to it at its address referred to in subsection 9.2.  Nothing herein shall affect the right of the
Administrative Agent or any Lender to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against either
Borrower in any other jurisdiction. 
Each Borrower hereby irrevocably and unconditionally waives any
objection that it may now or hereafter have to the venue of any action
described in this subsection 9.10, or that such proceeding was brought in an inconvenient
court, and agrees not to plead or claim the same.

 

9.11                        Survival and Termination of Agreement.  All
covenants, agreements, representations and warranties made herein and in any
certificate, document or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement and any
Notes, regardless of any investigation made by any such other party or

 

45

 

on its behalf and
notwithstanding that the Agents or any Lender may have had notice or knowledge
of any Default or incorrect representation or warranty at the time any credit
is extended hereunder, and shall continue in full force and effect so long as
any Loan or any amount payable to any Lender under or in connection with this
Agreement or any Loan is unpaid and so long as the Commitments have not expired
or terminated.  It being expressly
understood that the obligations of the Borrowers to the Administrative Agent
and each Lender under subsections 2.14, 2.16, 2.17 and 9.5 and the obligations
of the Lenders to the Administrative Agent under subsection 8.7 shall survive
the payment in full of the Loans and all other amounts payable hereunder;
provided, that with respect to amounts payable under subsections 2.14, 2.16,
2.17, 8.7 and 9.5, such amounts shall be deemed to have been paid if no claim
therefor is made within one year after payment in full of the Loans and all
other amounts payable hereunder. 
Notwithstanding the foregoing, no Lender shall be entitled to any
payments from either Borrower under subsection 2.14, 2.16, 2.17 or 9.5 unless,
within one year of such Lender’s obtaining actual knowledge of the occurrence
of the event or events giving rise to the operation of any such subsection, it has
notified the Borrowers of the occurrence of such event or events; provided,
however, that the requirement for notice set forth herein shall have no effect
on the nature or scope of the provisions of such subsections other than as
expressly stated in this subsection 9.11.

 

9.12                        Entire Agreement. 
This Agreement sets forth the entire agreement of the parties hereto
with respect to its subject matter, and supersedes all previous understandings,
written or oral, with respect thereto.

 

9.13                        WAIVER OF JURY TRIAL.  EACH
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY NOTE AND FOR ANY COUNTERCLAIM THEREIN.

 

9.14                        Severability.  Any
provision of this Agreement or of any Note which is prohibited, unenforceable
or not authorized in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition, unenforceability or
non-authorization without invalidating the remaining provisions hereof or
thereof or affecting the validity, enforceability or legality of any such
provision in any other jurisdiction.

 

9.15                        Joint and Several Liability.  (a) Any and all obligations
and liabilities of either Borrower under this Agreement shall be the joint and
several obligation and the joint and several liability of the Borrowers.  Except as expressly set forth in Section 7,
each Borrower waives presentation to, demand of payment from and protest to the
Lenders of any of the obligations and liabilities of the other Borrower
hereunder and also waives notice of protest for nonpayment and notice of
acceleration and notice of intent to accelerate, and all other notices of any
kind.  Except as expressly set forth in
Section 7, each Borrower waives notice of any default by the other Borrower
hereunder.  The obligations and
liabilities of each Borrower hereunder shall not be affected by (i) the failure
of any Lender to assert any claim or demand or to enforce any right or remedy
against the other Borrower or any other person under this Agreement or any
Notes; (ii) any extension or renewal of any thereof; (iii) any rescission,
waiver, amendment or modification of any of the terms or provisions of this
Agreement or any Notes; (iv) the release of any

 

46

 

obligation or liability of
the other Borrower by any Lender; (v) the failure of any Lender to exercise any
right or remedy against any Borrower; (vi) any change in the ownership of
either of the Borrowers; or (vii) any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to either of the
Borrowers or any Lender.

 

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

 

(c)                                  The obligations of each Borrower under the
provisions of this subsection 9.15 constitute full recourse obligations of such
Borrower, enforceable in accordance with the terms of this Agreement.

 

(d)                                 The provisions of this subsection 9.15 are
made for the benefit of the Lenders and their successors and assigns, and may
be enforced by the Administrative Agent and the Lenders from time to time
against either of the Borrowers as often as occasion therefor may arise and
without requirement on the part of the Lenders first to marshal any of their
claims or to exercise any of their rights against the other Borrower or to
exhaust any remedies available to them against the other Borrower or to resort
to any other source or means of obtaining payment of all or any part of the
obligations hereunder or to elect any other remedy. The provisions of this
subsection 9.15 shall remain in effect until all of the obligations hereunder
shall have been paid in full or otherwise fully satisfied and all of the
Commitments shall have terminated or expired. 
If at any time, any payment, or any part thereof, made in respect of all
or any part of the obligations hereunder, is rescinded or must otherwise be
restored or returned by any of the Lenders upon the insolvency, bankruptcy or
reorganization of a Borrower, or otherwise, the provisions of this subsection
9.15 will forthwith be reinstated in effect, as though such payment had not
been made.

 

47

 

Signature Page to the

364-Day Credit Agreement

 

 

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

 

 

	
   

  	
  CHEVRON PHILLIPS
  CHEMICAL COMPANY LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  J.M. McKee

  	
   

  
	
   

  	
   

  	
  Vice President and
  Treasurer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CHEVRON PHILLIPS
  CHEMICAL COMPANY LP

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  J.M. McKee

  	
   

  
	
   

  	
   

  	
  Vice President and
  Treasurer

  	
   

  

 

S - 1

 

	
   

  	
  BARCLAYS BANK PLC, as
  Administrative Agent,

  	
   

  
	
   

  	
  Same Day Lender and a
  Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S - 2

 

	
   

  	
  THE ROYAL BANK OF
  SCOTLAND plc, as

  Syndication Agent and a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S - 3

 

	
   

  	
  THE BANK OF NOVA
  SCOTIA, as Co-

  Documentation Agent and a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S - 4

 

	
   

  	
  THE BANK OF
  TOKYO-MITSUBISHI LTD., as Co-

  Documentation Agent and a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S - 5

 

	
   

  	
  SUMITOMO MITSUI BANKING
  CORPORATION,

  as Co-Documentation Agent and a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S - 6

 

	
   

  	
  ING CAPITAL LLC, as a
  Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S - 7

 

	
   

  	
  JP MORGAN CHASE BANK,
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S - 8

 

	
   

  	
  MORGAN STANLEY BANK, as
  a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S - 9

 

	
   

  	
  KBC BANK N.V., as a
  Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S - 10

 

	
   

  	
  RIYAD BANK, HOUSTON
  AGENCY, as a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S - 11

 

	
   

  	
  BANCA MONTE DEI PASCHI
  DI SIENA S.p.A., as a

  Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S - 12

 

	
   

  	
  BANK OF AMERICA, N.A.,
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title: 

  	
   

  

 

S - 13

 

	
   

  	
  THE BANK OF NEW YORK,
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S - 14

 

	
   

  	
  DEN NORSKE BANK ASA, as
  a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S - 15

 

	
   

  	
  BANK ONE, NA (Main
  Office – Chicago), as a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S - 16

 

Schedule I

 

LENDER INFORMATION

 

	
  Lender

  	
   

  	
  Lender’s Maximum

  Commitment

  	
   

  	
  Lender’s Lending Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Administrative Agent

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Barclays Bank PLC

  	
   

  	
  $

  	
  45,000,000.00

  	
   

  	
  Address for Notices:

  Barclays Capital

  200 Park Avenue, 4th Floor

  New York, NY 10166

  Attention: Nicholas A. Bell

  Telecopier: (212) 412-7600

  Telephone: (212) 412-4029

  Email: nicholas.bell@barcap.com

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Lending Office:

  Barclays Bank PLC, New York Branch

  200 Park Avenue, 4th Floor

  New York, NY 10166

  Attention: Monica Mikolajczk

  Telecopier:  (212) 412-5306

  Telephone:  (212) 412-3709

  Email:  monica.mikolajczk@barcap.com

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Syndication Agent

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Royal Bank of Scotland plc

  	
   

  	
  $

  	
  45,000,000.00

  	
   

  	
  Address for Notices:

  The Royal Bank of Scotland plc

  600 Travis Street, Suite 6070

  Houston, TX  77002

  Attention: Jill Gander

  Telecopier: (713) 221-2430

  Telephone: (713) 221-2417

  

  Lending Office:

  The Royal Bank of Scotland plc

  101 Park Avenue, 12th Floor

  New York, NY  10178

  Attention: Sheila Shaw

  Telecopier: (212) 401-1494

  Telephone: (212) 401-1406

  	
   

  

 

I - 1

 

	
  Co-Documentation Agent

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	 
	
  The Bank of Nova Scotia

  	
   

  	
  $

  	
  37,500,000.00

  	
   

  	
  Address for Notices:

  The Bank of Nova Scotia

  600 Peachtree Street N.E., Suite 2700

  Atlanta, GA  30308

  Attention:  A. Millington

  Telecopier:  (404) 888-8998

  Telephone:  (404) 877-1579

  

  Lending Office:

  The Bank of Nova Scotia

  600 Peachtree Street N.E., Suite 2700

  Atlanta, GA  30308

  Attention:  A. Millington

  Telecopier:  (404) 888-8998

  Telephone:  (404) 877-1579

  	
   

  	 

	 
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	 
	
  Co-Documentation Agent

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	 
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	 
	
  The Bank of Tokyo-Mitsubishi, Ltd.

  	
   

  	
  $

  	
  37,500,000.00

  	
    

  	
  Address for Notices:

  The Bank of Tokyo-Mitsubishi, Ltd.

  1100 Louisiana Street

  Suite 2800

  Houston, TX  77002

  Attention:  Joan Stanton

  Telecopier: (713) 658-0116

  Telephone:  (713) 655-3824

  

  Lending Office:

  The Bank of Tokyo-Mitsubishi, Ltd.

  1100 Louisiana Street

  Suite 2800

  Houston, TX  77002

  Attention:  Barrie Hogue

  Telecopier: (713) 658-0116

  Telephone:  (713) 655-3835

  	
   

  	 

	 
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	 
	
  Co-Documentation Agent

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	 
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	 
	
  Sumitomo Mitsui Banking Corporation

  	
   

  	
  $

  	
  37,500,000.00

  	
   

  	
  Address for Notices:

  Sumitomo Mitsui Banking Corporation

  277 Park Avenue

  New York, NY  10172

  Attention:  Kenneth Austin

  Telecopier: (212) 224-4384

  Telephone: (212) 224-4043

  	
   

  	 

												

 

I - 2

 

	
   

  	
   

  	
   

  	
   

  	
  Lending Office:

  Sumitomo Mitsui Banking Corporation

  277 Park Avenue

  New York, NY  10172

  Attention:  Kenneth Austin

  Telecopier: (212) 224-4384

  Telephone: (212) 224-4043

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other Lenders

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ING Capital LLC

  	
   

  	
  $

  	
  25,000,000.00

  	
   

  	
  Address for Notices:

  ING Capital LLC

  1325 Avenue of the Americas

  New York, NY  10019

  Attention:  Cheryl Labelle

  Telecopier:  (646) 424-7229

  Telephone: (646) 424-7207

  

  Lending Office:

  ING Capital LLC

  1325 Avenue of the Americas

  New York, NY  10019

  Attention:  Cheryl Labelle

  Telecopier:  (646) 424-7229

  Telephone: (646) 424-7207

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan Chase Bank

  	
   

  	
  $

  	
  25,000,000.00

  	
   

  	
  Address for Notices:

  JP Morgan Chase Bank

  1111 Fannin – 10th Floor

  Houston, TX 77002

  Attention:  Verna Smith

  Telecopier:  (713) 427-6307

  Telephone:  (713) 750-2424

  e-mail:  verna.smith@chase.com

  

  Lending Office:

  JP Morgan Chase Bank

  600 Travis – 20th Floor

  Houston, TX 77002

  Attention:  Robert Traband

  Telecopier:  (713) 216-8870

  Telephone:  (713) 216-1081

  e-mail: Robert.traband@jpmorgan.com

  	
   

  

 

I - 3

 

	
  Morgan Stanley Bank

  	
   

  	
  $

  	
  25,000,000.00

  	
   

  	
  Address for Notices:

  Morgan Stanley Bank

  1633 Broadway – 25th Floor

  New York, NY 10019

  Attention:  James Morgan

  Telecopier:  (212) 537-1867

  Telephone:  (212) 537-1470

  Lending Office:

  Morgan Stanley Bank

  1633 Broadway – 25th Floor

  New York, NY 10019

  Attention:  James Morgan

  Telecopier:  (212) 537-1867

  Telephone:  (212) 537-1470

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  KBC Bank N.V.

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  	
  Address for Notices:

  KBC Bank N.V.

  Atlanta Representative Office

  245 Peach Tree Center Avenue; Suite 2550

  Atlanta, GA 30303

  Attention:  Filip Berton, AVP

  Telecopier: (404) 584-5465

  Telephone: (404) 584-5466

  

  Lending Office:

  KBC Bank N.V.

  New York Branch

  125 West 55th Street

  New York, NY 10019

  Attention:  Robert Pacific – Loan

  Administration

  Telecopier: (212) 956-5581

  Telephone: (212) 541-0671

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Riyad Bank, Houston Agency

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  	
  Address for Notices:

  Riyad Bank

  700 Louisiana, Suite 4770

  Houston, TX  77002

  Attention:  Paul N. Travis

  Telecopier:  (713) 331-2043

  Telephone: (713) 331-2021

  

  Lending Office:

  Riyad Bank

  700 Louisiana, Suite 4770

  Houston, TX  77002

  Attention:  Pierre J. Herszdorfer

  Telecopier:  (713) 331-2043

  Telephone: (713) 331-2022

  	
   

  

 

I - 4

 

	
  Banca Monte dei Paschi di Siena S.p.A.

  	
   

  	
  $

  	
  17,500,000.00

  	
   

  	
  Address for Notices:

  Banca Monte dei Paschi di Siena S.p.A.

  55 East 59th Street

  New York, New York 10022

  Attention: Nicolas Kanaris

  Telecopier: (212) 891-3661

  Telephone: (212) 891-3655

  

  Lending Office:

  Banca Monte dei Paschi di Siena S.p.A.

  55 East 59th Street

  New York, New York 10022

  Attention: Mei Tam

  Telecopier: (212) 891-3661

  Telephone: (212 ) 891-3649

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  17,500,000.00

  	
   

  	
  Address for Notices:

  Bank of America, N.A.

  333 Clay Street, Suite 4550

  Houston, Texas 77002

  Attention: Claire Liu

  Telecopier: (713) 651-4807

  Telephone: (713) 651-4855

  

  Lending Office:

  Bank of America, N.A.

  901 Main Street, 14th Floor

  Dallas, TX  75202

  Attention:  Ben Cosgrove

  Telecopier:  (214) 290-9439

  Telephone:  (214) 209-9254

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Bank of New York

  	
   

  	
  $

  	
  17,500,000.00

  	
   

  	
  Address for Notices:

  The Bank of New York

  One Wall Street, 17th Floor

  New York, New York 10286

  Attention:  Raymond Palmer

  Telecopier: (212) 635-7923

  Telephone: (212) 635-7834

  

  Lending Office:

  The Bank of New York

  One Wall Street, 17th Floor

  New York, New York 10286

  Attention:  Raymond Palmer

  Telecopier: (212) 635-7923

  Telephone: (212) 635-7834

  	
   

  

 

I - 5

 

	
  Den norske Bank ASA

  	
   

  	
  $

  	
  17,500,000.00

  	
   

  	
  Address for Notices:

  Den norske Bank ASA

  200 Park Avenue, 31st Floor

  New York, NY 10166

  Attention:  Peter M. Dodge

  Telecopier:  (212) 681-3900

  Telephone:  (212) 681-3873

  Email:  peter.dodge@dnb.no

  

  Lending Office:

  Den norske Bank ASA

  200 Park Avenue, 31st Floor

  New York, NY 10166

  Attention:  Teresa Rosu

  Telecopier:  (212) 681-4123

  Telephone:  (212) 681-3845

  Email:  teresa.rosu@dnb.no

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank One, NA (Main Office - Chicago)

  	
   

  	
  $

  	
  12,500,000.00

  	
   

  	
  Address for Notices:

  Bank One, NA

  910 Travis, 6th Floor

  Houston, TX  77002

  Attention:  Jeannie Gonzalez

  Telecopier:  (713) 751-3982

  Telephone:  (713) 751-6174

  Email:  jeanie_gonzalez@bankone.com

  

  Lending Office:

  Bank One, NA

  1 Bank One Plaza

  Suite IL1-0634

  Chicago, IL  60670

  Attention:  Deborah Turner

  Telecopier: (312) 732-4840

  Telephone: (312) 732-3641

  Email:  deborah_a_turner@bankone.com

  	
   

  

 

I - 6

 

Annex A

 

364-DAY
PRICING GRID

 

 

	
   

  	
   

  	
  Level 1

  	
   

  	
  Level 2

  	
   

  	
  Level 3

  	
   

  	
  Level 4

  	
   

  	
  Level 5

  	
   

  	
  Level 5

  
	
  Senior Debt Ratings

  	
   

  	
  > A/A2  (bps)

  	
   

  	
  A-/A3 
  (bps)

  	
   

  	
  BBB+/Baa1 
  (bps)

  	
   

  	
  BBB/Baa2 
  (bps)

  	
   

  	
  BBB-/Baa3 
  (bps)

  	
   

  	
  < BBB-/Baa3 (bps)

  
	
  Applicable Eurodollar Margin(1),(2)

  	
   

  	
  35.0

  	
   

  	
  50.0

  	
   

  	
  62.5

  	
   

  	
  75.0

  	
   

  	
  87.5

  	
   

  	
  112.5

  
	
  Applicable Utilization Fee Rate – Above 33% Usage(1),(2)

  	
   

  	
  10.0

  	
   

  	
  10.0

  	
   

  	
  12.5

  	
   

  	
  12.5

  	
   

  	
  12.5

  	
   

  	
  25.0

  
	
  Applicable Commitment Fee Rate(1)

  	
   

  	
  8.0

  	
   

  	
  9.0

  	
   

  	
  12.5

  	
   

  	
  15.0

  	
   

  	
  20.0

  	
   

  	
  22.5

  

 

The foregoing Pricing Grid is based upon the
Senior Debt ratings as determined from time to time by S&P and Moody’s.

 

(1)  The Commitment Fee, Utilization Fee and Applicable Eurodollar
Margins shall be determined by the highest of the two ratings assigned by
S&P and Moody’s to the Senior Debt. 
If the two ratings for the Senior Debt are two or more rating levels
apart, the Commitment Fee, Utilization Fee and Applicable Eurodollar Margin
shall be determined by reference to the rating level that is one rating level
below the highest rating level in which the Senior Debt’s ratings fall.

 

(2)  If, in accordance with
subsection 2.2(a), the Borrowers elect not to pay all or a portion of the
unpaid principal amount of the Loans until the first anniversary of the 364-Day
Commitment Termination Date, the Applicable Eurodollar Margin shall increase by
an incremental 25 bps per Level.  This
increment to the Applicable Eurodollar Margin shall apply only to any Term-out
Loan.

 

A-1

 

Exhibit A to
the

364-Day Credit Agreement

 

FORM OF 364-DAY NOTE

 

New York, New
York

August 28, 2003

 

FOR VALUE RECEIVED, CHEVRON PHILLIPS CHEMICAL COMPANY LLC, a Delaware
limited liability company (the “LLC”),
CHEVRON PHILLIPS CHEMICAL COMPANY LP, a Delaware limited partnership which is
wholly-owned, indirectly, by the LLC (the “LP”;
and together with the LLC, the “Borrowers”
and, each, a “Borrower”), jointly and
severally promise to pay to the order of [Insert Name of Lender] (the “Lender”) 200 Park Avenue, New York, New York
10166, Attention: Monica Mikolajczk, (i) on the 364-Day Commitment Termination
Date (as defined in the 364-Day Credit Agreement referred to below) or (ii) if
in accordance with subsection 2.2(a) the Borrowers have extended the date
upon which the principal amount of the Loans of the Lenders outstanding as of
the 364-Day Commitment Termination Date will be due and payable, on the first
anniversary of the 364-Day Commitment Termination Date; in each case in lawful
money of the United States of America and in immediately available funds, the
principal amount equal to the aggregate unpaid principal amount of all Loans
made by the Lender to the Borrowers pursuant to subsections 2.1, 2.2, 2.3 and
2.4 of the 364-Day Credit Agreement. 
The Borrowers, jointly and severally, hereby further agree to pay
interest on the unpaid principal amount of the Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in subsection 2.10 of the 364-Day
Credit Agreement.  The holder of this
Note is authorized to record the date and amount of each Loan made by the
Lender, each payment of principal with respect thereto and each conversion or
continuation made pursuant to subsection 2.7 of the 364-Day Credit
Agreement, on the schedules annexed hereto and made a part hereof, or on a
continuation thereof which shall be attached hereto and made a part hereof, and
any such recordation shall constitute prima facie evidence, absent
manifest error, of the accuracy of the information recorded; provided, that failure
by the Lender to make any such recordation or any error in such recordation
shall not affect the obligations of the Borrowers hereunder or under the
364-Day Credit Agreement.

 

This Note is one of the Notes referred to in the 364-Day Credit
Agreement, dated as of the date hereof, among LLC and LP, each as a Borrower,
the Lenders parties thereto, Barclays Bank PLC, as the Administrative Agent,
and the other agents therein named (as amended, supplemented or otherwise
modified from time to time, the “364-Day Credit
Agreement”; terms defined therein and not otherwise defined herein
being used herein as therein defined), is entitled to the benefits thereof and
is subject to optional and mandatory prepayment in whole or in part as provided
therein.  The Borrowers agree to pay all
costs and expenses incurred by the Lender in connection with the enforcement of
its rights and remedies under the 364-Day Credit Agreement and this Note.

 

Upon the occurrence of any one or more of the Events of Default
specified in the 364-Day Credit Agreement, all amounts then remaining unpaid on
this Note shall become, or may be declared to be, immediately due and payable
all as provided therein.

 

A - 1

 

THIS NOTE SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

 

 

	
   

  	
  CHEVRON PHILLIPS
  CHEMICAL COMPANY LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CHEVRON PHILLIPS
  CHEMICAL COMPANY LP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

A - 2

 

Schedule A

to Note

 

LOANS,
CONVERSIONS AND REPAYMENTS OF ABR LOANS

 

	
  Date

  	
   

  	
  Amount of
  ABR

  Loans

  	
   

  	
  Amount

  Converted to

  ABR Loans

  	
   

  	
  Amount of

  Principal of

  ABR Loans

  Repaid

  	
   

  	
  Amount of
  ABR

  Loans Converted

  to Eurodollar

  Loans

  	
   

  	
  Unpaid Principal

  Balance of ABR

  Loans

  	
   

  	
  Notation
  Made

  By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A - 3

 

Schedule B

to Note

 

LOANS,
CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS

 

	
  Date

  	
   

  	
  Amount of

  Eurodollar

  Loans

  	
   

  	
  Amount

  Converted to

  Eurodollar

  Loans

  	
   

  	
  Interest Period

  and

  Eurodollar

  Rate with

  Respect

  Thereto

  	
   

  	
  Amount of

  Principal of

  Eurodollar

  Loans Repaid

  	
   

  	
  Amount of

  Eurodollar

  Loans

  Converted to

  ABR Loans

  	
   

  	
  Unpaid

  Principal

  Balance of

  Eurodollar

  Loans

  	
   

  	
  Notation Made

  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A - 4

 

Exhibit B to
the

364-Day Credit Agreement

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

Reference is made to the 364-Day Credit Agreement
dated as of August 28, 2003 (as amended, supplemented or otherwise
modified from time to time, the “364-Day Credit
Agreement”), among CHEVRON PHILLIPS CHEMICAL COMPANY LLC, a Delaware
limited liability company (the “LLC”),
CHEVRON PHILLIPS CHEMICAL COMPANY LP, a Delaware limited partnership which is
wholly-owned, indirectly, by the LLC (the “LP”;
and together with the LLC, the “Borrowers”
and, each, a “Borrower”), the Lenders
parties thereto, Barclays Bank PLC, as the Administrative Agent, and the other
agents therein named. Unless otherwise defined herein, terms defined in the
364-Day Credit Agreement and used herein shall have the meanings given to them
in the 364-Day Credit Agreement.

 

                  
(the “Assignor”) and
                  
(the “Assignee”) agree as follows:

 

1.                                       The
Assignor hereby irrevocably sells and assigns to the Assignee without recourse
to the Assignor, and the Assignee hereby irrevocably purchases and assumes from
the Assignor without recourse to the Assignor, as of the Transfer Effective
Date (as defined below), a     % interest (the “Assigned Interest”) in and to the Assignor’s
rights and obligations under the 364-Day Credit Agreement with respect to the
credit facility contained in the 364-Day Credit Agreement as are set forth on
Schedule 1 (the “Assigned Facility”),
in a principal amount for the Assigned Facility as set forth on
Schedule 1.

 

2.                                       The
Assignor (a) makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with the 364-Day Credit Agreement or any other instrument or
document furnished pursuant thereto or with respect to the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the 364-Day
Credit Agreement, any Note or any other instrument or document furnished
pursuant thereto, other than that the Assignor is the legal and beneficial owner
of the Assigned Facility and the Assignor has not created any adverse claim
upon the interest being assigned by it hereunder and that such interest is free
and clear of any such adverse claim; (b) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrowers or their Subsidiaries or the performance or observance by the
Borrowers of any of their obligations under the 364-Day Credit Agreement or any
Note or any other instrument or document furnished pursuant hereto or thereto;
and (c) attaches any Notes held by it evidencing the Assigned Facility and (i)
requests that the Administrative Agent, upon request by the Assignee, exchange
any attached Notes for a new Note or Notes payable to the Assignee and (ii) if
the Assignor has retained any interest in the Assigned Facility, requests that
the Administrative Agent exchange any attached Notes for a new Note or Notes
payable to the Assignor, in each case in amounts which reflect the assignment
being made hereby (and after giving effect to any other assignments which have
become effective on the Transfer Effective Date).

 

3.                                       The
Assignee (a) represents and warrants that it is legally authorized to enter
into this Assignment and Acceptance; (b) confirms that it has received a copy
of the 364-Day Credit

 

B - 1

 

Agreement, together with copies of the financial
statements delivered pursuant to subsection 3.5 or 5.2, as available,
thereof and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (c) agrees that it will, independently and without reliance upon
the Assignor, the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the 364-Day
Credit Agreement, any Notes or any other instrument or document furnished
pursuant hereto or thereto; (d) appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
and discretion under the 364-Day Credit Agreement, any Notes or any other
instrument or document furnished pursuant hereto or thereto as are delegated to
the Administrative Agent by the terms thereof, together with such powers as are
incidental thereto; and (e) agrees that it will be bound by the provisions of
the 364-Day Credit Agreement and will perform in accordance with its terms all
the obligations which by the terms of the 364-Day Credit Agreement are required
to be performed by it as a Lender including, if it is organized under the laws
of a jurisdiction outside the United States, its obligation pursuant to
subsection 2.15(b) of the 364-Day Credit Agreement.

 

4.                                       The
effective date of this Assignment and Acceptance shall be
         , 20   
(the “Transfer Effective Date”).  Following the execution of this Assignment
and Acceptance, it will be delivered to the Administrative Agent for acceptance
by it and recording by the Administrative Agent pursuant to the 364-Day Credit
Agreement, effective as of the Transfer Effective Date (which shall not, unless
otherwise agreed to by the Administrative Agent, be earlier than five Business
Days after the date of such acceptance and recording by the Administrative
Agent).

 

5.                                       Upon
such acceptance and recording, from and after the Transfer 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 Assignor for amounts which have accrued to the Transfer Effective Date and
to the Assignee for amounts which have accrued subsequent to the Transfer
Effective Date.  The Assignor and the
Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Transfer Effective Date or with
respect to the making of this assignment directly between themselves.

 

6.                                       From
and after the Transfer Effective Date, (a) the Assignee shall be a party to the
364-Day Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and shall be
bound by the provisions thereof and (b) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the 364-Day Credit Agreement, provided, however,
that its rights under subsections 2.14, 2.16, 2.17 and 9.5 thereunder shall not
be affected.

 

7.                                       This
Assignment and Acceptance shall be governed by and construed in accordance with
the laws of the State of New York.

 

B - 2

 

IN WITNESS WHEREOF, the parties hereto have caused
this Assignment and Acceptance to be executed as of the date first above
written by their respective duly authorized officers on Schedule 1 hereto.

 

 

B - 3

 

SCHEDULE 1

TO ASSIGNMENT AND ACCEPTANCE 

RELATING TO THE 364-DAY CREDIT AGREEMENT, DATED AS OF AUGUST 28,
2003,

among

CHEVRON PHILLIPS CHEMICAL COMPANY LLC, as a
Borrower, and

CHEVRON PHILLIPS CHEMICAL COMPANY LP, as a
Borrower,

the Several Lenders from Time to Time Parties
thereto, and

BARCLAYS BANK PLC, as Administrative Agent

 

Name of Assignor:

 

Name of Assignee:

 

Transfer Effective Date:

 

	
  Principal

  Amount Assigned

  	
   

  	
  Commitment

  Percentage Assigned(1)

  
	
   

  	
   

  	
   

  
	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [Name of Assignee]

  	
   

  	
   

  	
   

  	
  [Name of Assignor]

  	
   

  

 

 

	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name:

  	
  Name:

  
	
  Title:

  	
  Title:

  
	
   

  	
   

  
	
  Accepted:

  	
  Consented To(2):

  
	
   

  	
   

  
	
  BARCLAYS BANK PLC, as

  Administrative Agent, Same Day Lender and a Lender

  	
  CHEVRON PHILLIPS CHEMICAL COMPANY LLC,

  as a Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name:

  	
  Name:

  
	
  Title:

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  CHEVRON PHILLIPS CHEMICAL COMPANY LP,

  as a Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

(1)               Calculate the
Commitment Percentage that is assigned to at least 15 decimal places and show
as a percentage of the aggregate commitments of all Banks.

 

(2)                  Not required during the occurrence
and continuation of an Event of Default under subsections 7(g) or (h).

 

B - 4

 

Exhibit C to the

364-Day Credit
Agreement

 

FORM OF

CLOSING CERTIFICATE

OF

CHEVRON PHILLIPS CHEMICAL COMPANY LLC

AND CHEVRON PHILLIPS CHEMICAL COMPANY LP

 

Reference is made to the 364-DAY CREDIT AGREEMENT (as
amended, supplemented or otherwise modified from time to time, the “364-Day Agreement”), dated as of
August 28, 2003, among Chevron Phillips Chemical Company LLC, a Delaware
limited liability company (the “LLC”), and Chevron Phillips Chemical
Company LP, a Delaware limited partnership wholly owned indirectly by the LLC
(the “LP”), each as a Borrower, the Lenders, Barclays Bank PLC, as the
Administrative Agent, and the other agents therein named. Unless otherwise
indicated, capitalized terms used but not defined herein shall have the
respective meanings set forth in the 364-Day Agreement.  This certificate is being delivered pursuant
to subsection 4.1(b) of the 364-Day Agreement.

 

I, J.M. McKee, Vice President and Treasurer of each of
Chevron Phillips Chemical Company LLC and Chevron Phillips Chemical Company LP,
HEREBY CERTIFY that:

 

(a)                                  Each
of the representations and warranties made by the LLC and the LP in or pursuant
to the 364-Day Agreement are true and correct in all material respects on and
as of the date hereof;

 

(b)                                 No
Default or Event of Default has occurred and is continuing on the date hereof
or will occur after giving effect to the extensions of credit requested to be
made on the date hereof; and

 

(c)                                  Any
governmental and third party approvals necessary and material in connection
with the financing contemplated by the 364-Day Agreement and the continuing
operations of the LLC and the LP and their Subsidiaries have been obtained and
are in full force and effect.

 

C - 1

 

IN WITNESS
WHEREOF, I have hereunto signed my name this 28th day of August,
2003.

 

 

	
   

  	
   

  
	
   

  	
  Name:

  	
  J.M. McKee

  
	
   

  	
  Title:

  	
  Vice President and
  Treasurer of both Chevron

  
	
   

  	
  Phillips Chemical Company
  LLC and Chevron Phillips

  Chemical Company LP

  

 

C - 2

 

Exhibit D to
the

364-Day Credit Agreement

 

FORM OF

CERTIFICATE OF SECRETARY

OF

CHEVRON PHILLIPS CHEMICAL COMPANY [LLC][LP]

 

Reference is
made to the 364-DAY CREDIT AGREEMENT (as amended, supplemented or otherwise
modified from time to time, the “364-Day Agreement”), dated as of August 28,
2003, among Chevron Phillips Chemical Company LLC, a Delaware limited liability
company (the “LLC”), and Chevron Phillips Chemical Company LP, a Delaware
limited partnership wholly owned indirectly by the LLC (the “LP”), each as a
Borrower, the Lenders, Barclays Bank PLC, as the Administrative Agent, and the
other agents therein named. Unless otherwise indicated, capitalized terms used
but not defined herein shall have the respective meanings set forth in the
364-Day Agreement.  This certificate is
being delivered pursuant to subsection 4.1(c) of the 364-Day Agreement.

 

I, Lisa Lynch, Assistant Secretary of Chevron Phillips
Chemical Company [LLC][LP], DO HEREBY CERTIFY 
that:

 

(a)                                  annexed
hereto as Exhibit A is a true and correct copy of the Certificate of [Formation
of the LLC][Limited Partnership of the LP] as in effect on [Date] and at all
times thereafter through the date hereof;

 

(b)                                 annexed
hereto as Exhibit B is a true and correct copy of the [Amended and Restated
Limited Liability Company Agreement of the LLC][Agreement of Limited
Partnership of the LP] as in effect on [Date] and at all times thereafter through
the date hereof;

 

(c)                                  annexed
hereto as Exhibit C is a true and correct copy of certain resolutions duly
adopted by the [Board of Managers of the LLC][General Partner of the LP] on
[Date(s)], which resolutions are the only resolutions adopted by the [Board of
Directors of the LLC][General Partner of the LP] or any committee thereof
relating to the 364-Day Agreement and the Notes and borrowings by the [LLC][LP]
thereunder and have not been revoked, amended, supplemented or modified and are
in full force and effect on the date hereof; and

 

(d)                                 each
of the persons named below is and has been at all times since [Date] a duly
elected and qualified officer of the [LLC][LP] holding the respective office
set forth opposite his or her name and the signature set forth opposite the
name of each such person is his or her genuine signature:

 

D - 1

 

	
  Name

  	
   

  	
  Title

  	
   

  	
  Specimen
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [Include all officers of the [LLC][LP] who are signing the 364-Day
  Agreement, the Notes or any closing document.]

  	
   

  	
   

  	
   

  	
   

  

 

[Remainder of page left blank intentionally;
Signature page to follow.]

 

D - 2

 

IN WITNESS WHEREOF, I have hereunto signed my name
this 28th day of August, 2003.

 

 

	
   

  	
   

  
	
   

  	
  Name:  Lisa Lynch

  
	
   

  	
  Title:  Assistant Secretary

  

 

D - 3

 

Exhibit E-1 to
the

364-Day Credit Agreement

 

FORM OF OPINION OF BORROWERS’ COUNSEL

 

August 28,
2003

 

Barclays Bank PLC, as

Administrative Agent for the

Lenders listed on Schedule I
hereto

200 Park Avenue, 4th Floor

New York, NY 10166

Attention: Mr. Nicholas A. Bell

and

The Agents and Lenders listed

on Schedule I hereto

 

Re:                               $400,000,000
364-Day Revolving Credit Facility

 

Ladies and Gentlemen:

 

I am Counsel of Chevron Phillips Chemical Company LLC,
a Delaware limited liability company (the “LLC”)
owned equally, indirectly, by ConocoPhillips and ChevronTexaco Corporation, and
of Chevron Phillips Chemical Company LP, a Delaware limited partnership wholly-owned,
indirectly, by the LLC (the “LP”; and,
together with the LLC, the “Borrowers”).  I am rendering this opinion in connection
with the preparation, execution and delivery of the 364-Day Credit Agreement,
dated as of August 28, 2003 (the “Credit Agreement”),
among the Borrowers, Barclays Bank PLC, as Administrative Agent, the other
agents therein named, and the lenders party thereto (collectively, the “Lenders”).

 

Unless otherwise indicated, capitalized terms used but
not defined herein shall have the respective meanings set forth in the Credit
Agreement. This opinion is furnished to you pursuant to subsection 4.1(e) of the Credit
Agreement.

 

In connection with this opinion, I have examined:

 

(A)                              the
Credit Agreement, signed by the Borrowers and by the Administrative Agent, the
other agents therein named, and the Lenders; and

 

(B)                                the
Notes delivered on the Closing Date pursuant to the Credit Agreement (the
“Notes”).

 

I also have examined the originals, or duplicates or
certified or conformed copies, of such records, agreements, instruments and
other documents and have made such other investigations as I have deemed
relevant and necessary in connection with the opinions expressed herein.  As to

 

E - 1

 

Barclays Bank PLC, as 

Administrative Agent

August    , 2003

 

questions of fact material to this opinion, I have
relied upon certificates of public officials and of officers and
representatives of the Borrowers.  In
addition, I have examined, and have relied as to matters of fact upon, the
representations made in the Credit Agreement.

 

In rendering the opinions set forth below, I have
assumed the genuineness of all signatures (other than officers of the
Borrowers), the legal capacity of natural persons, the authenticity of all
documents submitted to me as originals, the conformity to original documents of
all documents submitted to me as duplicates or certified or conformed copies,
and the authenticity of the originals of such latter documents.

 

Based upon and subject to the foregoing, and subject
to the qualifications and limitations set forth herein, I am of the opinion
that:

 

1.                                       The
LLC (a) has been duly organized and is validly existing and in good standing as
a limited liability company under the laws of the State of Delaware, (b) has
the limited liability company power and authority to execute and deliver the
Credit Agreement and each Note and to borrow and perform its obligations
thereunder, and (c) has duly authorized, executed and delivered the Credit
Agreement and the Notes.

 

2.                                       The
LP (a) has been duly organized and is validly existing and in good standing as
a limited partnership under the laws of the State of Delaware, (b) has the
partnership power and authority to execute and deliver the Credit Agreement and
each Note and to borrow and perform its obligations thereunder, and (c) has
duly authorized, executed and delivered the Credit Agreement and the Notes.

 

3.                                       The
execution and delivery by the LLC of the Credit Agreement and each Note, its
borrowings in accordance with the terms of the Credit Agreement and performance
of its payment and other obligations thereunder will not result in any
violation of (1) its Certificate of Formation or its Amended and Restated
Limited Liability Company Agreement, or (2) assuming that proceeds of
borrowings will be used in accordance with the terms of the Credit Agreement,
any Federal statute or the Delaware Limited Liability Company Act or any rule
or regulation issued pursuant to any Federal statute or the Delaware Limited
Liability Company Act.

 

4.                                       The
execution and delivery by the LP of the Credit Agreement and each Note, its
borrowings in accordance with the terms of the Credit Agreement and performance
of its payment and other obligations thereunder will not result in any
violation of (1) its Certificate of Limited Partnership or its Agreement of
Limited Partnership, or (2) assuming that proceeds of borrowings will be used
in accordance with the terms of the Credit Agreement, any Federal statute or
the Delaware Revised Uniform Limited Partnership Act or any rule or regulation
issued pursuant to any Federal statute or the Delaware Revised Uniform Limited
Partnership Act.

 

5.                                       No
consent, approval, authorization, order, filing, registration or qualification
of or with any Federal governmental agency or body or any Delaware governmental
agency or body acting pursuant to the Delaware Limited Liability Company Act or
the Delaware

 

E - 2

 

Revised Uniform Limited Partnership Act is required
for the execution and delivery by either Borrower of the Credit Agreement and
each Note, the borrowings by either Borrower in accordance with the terms of
the Credit Agreement and each Note or the performance by the Borrowers of their
payment obligations under the Credit Agreement and each Note.

 

6.                                       Neither
Borrower is an “investment company,” “company” or a company “controlled” by an
“investment company” within the meaning of and subject to regulation under the
Investment Company Act of 1940, as amended.

 

I express no opinion with respect to: (a) the effect
of any provision of the Credit Agreement or the Notes which is intended to
permit modification thereof only by means of an agreement signed in writing by
the parties thereto; (b) the effect of any provision of the Credit Agreement or
the Notes insofar as it provides that any Person purchasing a participation
from a Lender or other Person may exercise set-off or similar rights with
respect to such participation or that any Lender or other Person may exercise
set-off or similar rights other than in accordance with applicable law; (c) the
effect of any provision of the Credit Agreement or the Notes imposing penalties
or forfeitures; (d) the enforceability of any provision of the Credit Agreement
or the Notes to the extent that such provision constitutes a waiver of
illegality as a defense to performance of contract obligations; and (e) the
effect of any provision of the Credit Agreement or the Notes relating to
indemnification or exculpation in connection with violations of any securities
laws or relating to indemnification, contribution or exculpation in connection
with willful, reckless or criminal acts or gross negligence of the indemnified
or exculpated Person or the Person receiving contribution.

 

In connection with the provisions of the Credit
Agreement whereby the parties submit to the jurisdiction of the courts of the
United States of America located in the State of New York, I note the
limitations of 28 U.S.C. 1331 and 1332 on subject matter jurisdiction of the
Federal courts.

 

The opinions expressed herein are limited to the
Federal law of the United States, the Delaware Limited Liability Company Law
and the Delaware Uniform Limited Partnership Act.

 

This opinion letter is rendered to you in connection
with the above-described transactions. 
This opinion letter may not be relied upon by you for any other purpose,
or relied upon by, or furnished to, any other person, firm or corporation,
other than Winstead Sechrest & Minick P.C., which can rely on this opinion
for the purposes of rendering the opinions set forth in their Opinion Letter
dated August       , 2003, without my prior
written consent.

 

Very truly yours,

 

David Bargainer

 

E - 3

 

Schedule I

to Exhibit E-1

 

SCHEDULE I

THE ADMINISTRATIVE AGENT AND THE LENDERS

 

Barclays Bank
PLC,

as Administrative Agent and a Lender

 

The Royal Bank
of Scotland plc,

as Syndication Agent and a Lender

 

The Bank of
Nova Scotia,

as Co-Documentation Agent and a Lender

 

The Bank of
Tokyo Mitsubishi Ltd.,

as Co-Documentation Agent and a Lender

 

Sumitomo
Mitsui Banking Corporation,

as Co-Documentation Agent and a Lender

 

ING Capital
LLC, a Lender

 

JP Morgan
Chase Bank, a Lender

 

Morgan Stanley
Bank, a Lender

 

KBC Bank N.V.,
a Lender

 

Riyad Bank,
Houston Agency, a Lender

 

Banca Monte
dei Paschi di Siena S.p.A., a Lender

 

Bank of
America, N.A., a Lender

 

The Bank of
New York, a Lender

 

Den norske
Bank ASA, a Lender

 

Bank One, NA
(Main Office – Chicago), a Lender

 

E - 4

 

Exhibit E-2 to
the

364-Day Credit Agreement

 

FORM OF OPINION OF BORROWERS’ COUNSEL

 

August 28,
2003

 

Barclays Bank PLC, as

Administrative Agent for the

Lenders listed on Schedule I
hereto

200 Park Avenue, 4th Floor

New York, NY 10166

Attention: Mr. Nicholas A. Bell

and

 

The Agents and Lenders listed

on Schedule I hereto

 

Re:                               $400,000,000
364-Day Revolving Credit Facility

 

Ladies and Gentlemen:

 

We have acted as special counsel to Chevron Phillips
Chemical Company LLC, a Delaware limited liability company (the “LLC”), and Chevron Phillips Chemical Company
LP, a Delaware limited partnership (the “LP”;
and, together with the LLC, the “Borrowers”),
in connection with the preparation, execution and delivery of the 364-Day
Credit Agreement, dated as of August 28, 2003 (the “Credit Agreement”), among the Borrowers,
Barclays Bank PLC, as Administrative Agent, the other agents therein named, and
the lenders party thereto (collectively, the “Lenders”).

 

Unless otherwise indicated, capitalized terms used but
not defined herein shall have the respective meanings set forth in the Credit
Agreement. This opinion is furnished to you pursuant to subsection 4.1(e) of the Credit
Agreement.

 

In connection with this opinion, we have examined:

 

(C)                                the
Credit Agreement, signed by the Borrowers and by the Administrative Agent, the
other agents therein named, and the Lenders; and

 

(D)                               the
Notes delivered on the Closing Date pursuant to the Credit Agreement (the
“Notes”).

 

We also have examined the originals, or duplicates or
certified or conformed copies, of such records, agreements, instruments and
other documents and have made such other investigations as we have deemed
relevant and necessary in connection with the opinions expressed herein.  As to questions of fact material to this
opinion, we have relied upon

 

E - 5

 

certificates of public officials and of officers and
representatives of the Borrowers.  In
addition, we have examined, and have relied as to matters of fact upon, the
representations made in the Credit Agreement.

 

In rendering the opinions set forth below, we have
assumed the genuineness of all signatures (other than officers of the Borrowers),
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as duplicates or certified or conformed copies, and
the authenticity of the originals of such latter documents.  In addition, we have relied on the opinions
of David Bargainer, counsel to the LLC and the LP, with respect to all of the
matters set forth in his Opinion Letter dated August    ,
2003.

 

Based upon and subject to the foregoing, and subject
to the qualifications and limitations set forth herein, we are of the opinion
that:

 

1.                                       The
execution and delivery by the LLC of the Credit Agreement and each Note, its
borrowings in accordance with the terms of the Credit Agreement and performance
of its payment and other obligations thereunder will not result in any
violation of, assuming that proceeds of borrowings will be used in accordance
with the terms of the Credit Agreement, any New York statute or any rule or
regulation issued pursuant to any New York statute.

 

2.                                       The
execution and delivery by the LP of the Credit Agreement and each Note, its
borrowings in accordance with the terms of the Credit Agreement and performance
of its payment and other obligations thereunder will not result in any
violation of, assuming that proceeds of borrowings will be used in accordance
with the terms of the Credit Agreement, any New York statute or any rule or
regulation issued pursuant to any New York statute.

 

3.                                       No
consent, approval, authorization, order, filing, registration or qualification
of or with any New York governmental agency or body is required for the
execution and delivery by either Borrower of the Credit Agreement and each
Note, the borrowings by either Borrower in accordance with the terms of the
Credit Agreement and each Note or the performance by the Borrowers of their
payment obligations under the Credit Agreement and each Note.

 

4.                                       The
Credit Agreement and each Note constitute the valid and legally binding
obligation of each Borrower, enforceable against such Borrower in accordance
with its terms.

 

In issuing our opinion in paragraph 4, we have assumed
that the Credit Agreement is a valid and legally binding obligation of each of
the Lenders parties thereto.

 

Our opinion in paragraph 4 above is subject to (i) the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws of general application relating to or
affecting creditors’ rights generally, (ii) general equitable principles (whether
considered in a proceeding in equity or at law) and (iii) an implied covenant
of good faith and fair dealing.

 

E - 6

 

We express no opinion with respect to: (a) the effect
of any provision of the Credit Agreement which is intended to permit
modification thereof only by means of an agreement signed in writing by the
parties thereto; (b) the effect of any provision of the Credit Agreement
insofar as it provides that any Person purchasing a participation from a Lender
or other Person may exercise set-off or similar rights with respect to such
participation or that any Lender or other Person may exercise set-off or
similar rights other than in accordance with applicable law; (c) the effect of
any provision of the Credit Agreement imposing penalties or forfeitures; (d)
the enforceability of any provision of the Credit Agreement to the extent that
such provision constitutes a waiver of illegality as a defense to performance
of contract obligations; and (e) the effect of any provision of the Credit
Agreement relating to indemnification or exculpation in connection with
violations of any securities laws or relating to indemnification, contribution
or exculpation in connection with willful, reckless or criminal acts or gross
negligence of the indemnified or exculpated Person or the Person receiving
contribution.

 

In connection with the provisions of the Credit
Agreement whereby the parties submit to the jurisdiction of the courts of the
United States of America located in the State of New York, we note the
limitations of 28 U.S.C. 1331 and 1332 on subject matter jurisdiction of the
federal courts.

 

Our opinions expressed herein are limited to the law
of the State of New York.

 

This opinion letter is rendered to you in connection
with the above-described transactions. 
This opinion letter may not be relied upon by you for any other purpose,
or relied upon by, or furnished to, any other Person without our prior written
consent.

 

Yours very truly,

 

E - 7

 

Schedule I

to Exhibit E-2

 

SCHEDULE I

 

THE ADMINISTRATIVE AGENT AND THE LENDERS

 

Barclays Bank
PLC,

as Administrative Agent and a Lender

 

The Royal Bank
of Scotland plc,

as Syndication Agent and a Lender

 

The Bank of
Nova Scotia,

as Co-Documentation Agent and a Lender

 

The Bank of
Tokyo Mitsubishi Ltd.,

as Co-Documentation Agent and a Lender

 

Sumitomo
Mitsui Banking Corporation,

as Co-Documentation Agent and a Lender

 

ING Capital
LLC, a Lender

 

JPMorgan Chase
Bank, a Lender

 

Morgan Stanley
Bank, a Lender

 

KBC Bank N.V.,
a Lender

 

Riyad Bank,
Houston Agency, a Lender

 

Banca Monte
dei Paschi di Siena S.p.A., a Lender

 

Bank of
America, N.A., a Lender

 

The Bank of
New York, a Lender

 

Den norske
Bank ASA, a Lender

 

Bank One, NA (Main Office – Chicago), a Lender

 

E - 8

 

Exhibit F to
the

364-Day Credit Agreement

 

FORM
OF BORROWING REQUEST

 

Barclays Bank PLC, 

as Administrative Agent

200 Park Avenue, 4th Floor

New York, NY 10166

 

Attention: Ms. Monica Mikolajczk

 

[Date(1)]

 

Dear Sirs and Madams:

 

The undersigned, Chevron Phillips Chemical Company
[LLC][LP] (the “Requesting Borrower”)
refers to the 364-Day Credit Agreement dated as of August 28, 2003 (as it
may be amended, restated, supplemented or otherwise modified from time to time,
the “364-Day Credit Agreement”), among
Chevron Phillips Chemical Company LP and Chevron Phillips Chemical Company LLC,
each as a Borrower, the several Lenders from time to time party thereto,
Barclays Bank PLC, as Administrative Agent, and the other agents therein named.
Terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the 364-Day Credit Agreement.

 

The Requesting Borrower hereby gives you notice
pursuant to subsection 2.3 of the 364-Day Credit Agreement that it
requests a [Eurodollar][ABR] Loan under the 364-Day Credit Agreement, and in
that connection sets forth below the terms on which such [Eurodollar][ABR] Loan
is requested to be made:

 

(A)                              [the
amount to be borrowed(2)],

 

(B)                                [the
requested Borrowing Date],

 

(C)                                [Interest
rate basis(3)] and

 

(D)                               [length
of the Interest Period for each Eurodollar Loan requested herein(4)].

 

(1)                                                          Prior
to 12:00 P.M., New York City time, at least three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, and prior to 12:00
P.M., New York City time, on the Borrowing Date, in the case of ABR Loans.

(2)                                                          In
an aggregate principle amount of the lesser of (1) $10,000,000 or a whole
multiple of $1,000,000 in excess thereof, and (2) the Available Commitments.

(3)                                                          Eurodollar
Rate, ABR Rate or a combination thereof. If no election as to the Type of
borrowing is specified, the borrowing shall be an ABR borrowing.

(4)                                                          If
no Interest Period is specified, the Interest Period shall be deemed to be one
month.

 

F - 1

 

Upon acceptance of any or all of the Loans made by the
Lenders in response to this request, the Requesting Borrower shall be deemed to
have represented and warranted that the conditions specified in
subsection 4.2 of the 364-Day Credit Agreement have been satisfied.

 

	
   

  	
  Very truly yours,

  	 

	
   

  	
   

  
	
   

  	
  CHEVRON PHILLIPS CHEMICAL

  	 

	
   

  	
  COMPANY [LLC][LP]

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
   

  	 

	
   

  	
   

  	
  Name:

  	 

	
   

  	
   

  	
  Title:

  	 

					

 

F - 2

 

Exhibit G to
the

364-Day Credit Agreement

 

FORM
OF EXEMPTION CERTIFICATE

 

Reference is made to the 364-Day Credit Agreement,
dated as of August 28, 2003 (as amended, supplemented or otherwise modified
from time to time, the “364-Day Credit Agreement”),
among Chevron Phillips Chemical Company LP and Chevron Phillips Chemical
Company LLC, each as a Borrower, the several Lenders from time to time party
thereto, Barclays Bank PLC, as Administrative Agent, and the other agents
therein named. Unless otherwise defined herein, terms defined in the 364-Day
Credit Agreement and used herein shall have the meanings given to them in the
364-Day Credit Agreement.  [Name of
Non-U.S. Lender] (the “Non-U.S. Lender”)
is providing this certificate pursuant to subsection 2.16(b) of the
364-Day Credit Agreement.  The Non-U.S.
Lender hereby represents and warrants that:

 

1.                                       The
Non-U.S. Lender is the sole record and beneficial owner of the Loans in respect
of which it is providing this certificate.

 

2.                                       The
Non-U.S. Lender is not a “bank” for purposes of Section 881(c)(3)(A) of
the Internal Revenue Code of 1986, as amended (the “Code”).  In this regard, the Non-U.S. Lender further
represents and warrants that:

 

(a)                                  the
Non-U.S. Lender is not subject to regulatory or other legal requirements as a
bank in any jurisdiction; and

 

(b)                                 the
Non-U.S. Lender has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any Governmental Authority,
any application made to a rating agency or qualification for any exemption from
tax, securities law or other legal requirements.

 

3.                                       The
Non-U.S. Lender is not a 10-percent shareholder of either Borrower within the
meaning of Section 881(c)(3)(B) of the Code.

 

4.                                       The
Non-U.S. Lender is not a controlled foreign corporation receiving interest from
a related person within the meaning of Section 881(c)(3)(C) of the Code.

 

G - 1

 

IN WITNESS
WHEREOF, the undersigned has duly executed this certificate.

 

	
   

  	
  [NAME OF NON-U.S. LENDER]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
					

 

G - 2

 

Exhibit H to
the

364-Day Credit Agreement

 

FORM
OF SAME DAY BORROWING REQUEST

 

Barclays Bank PLC, 

as Administrative Agent

200 Park Avenue, 4th Floor

New York, NY 10166

Attention: Ms. Monica Mikolajczk

 

[Date(1)]

 

Dear Sirs and Madams:

 

The undersigned, Chevron Phillips Chemical Company
[LLC][LP] (the “Requesting Borrower”)
refers to the 364-Day Credit Agreement dated as of August 28, 2003 (as it
may be amended, restated, supplemented or otherwise modified from time to time,
the “364-Day Credit Agreement”), among
Chevron Phillips Chemical Company LP and Chevron Phillips Chemical Company LLC,
each as a Borrower, the several Lenders from time to time party thereto,
Barclays Bank PLC, as Administrative Agent, and the other agents therein
named.  Terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
364-Day Credit Agreement.  The
Requesting Borrower hereby gives you notice pursuant to subsection 2.4 of
the 364-Day Credit Agreement that it requests a Same Day Loan under the 364-Day
Credit Agreement, and in that connection sets forth below the terms on which
such Same Day Loan is requested to be made:

 

(A)                              Date
of Same Day Loan (which is a Business Day),

 

(B)                                Principal
Amount of Same Day Loan(2), and

 

(C)                                Length
of Interest Period for each Same Day Loan requested herein.(3)

 

(1)                                                          Not
later than 12:00 P.M., New York City time, on the day of a proposed Same Day
Loan.

(2)                                                          In
an aggregate principal amount of the lesser of (1) $1,000,000, and (2) the then
Available Commitments with respect to Same Day Loans.

(3)                                                          Commences
on the Borrowing Date and ends (a) on a Business Day not later than 15 days
after such Borrowing Date, or (b) if an Interest Period is not specified, on
the first Business Day after the Borrowing Date.

 

H - 1

 

Upon acceptance of any or all of the Loans made by the
Same Day Lender in response to this request, the Requesting Borrower shall be
deemed to have represented and warranted that the conditions specified in
subsection 4.2 of the Credit Agreement have been satisfied.

 

	
   

  	
  Very truly yours,

  	 

	
   

  	
   

  
	
   

  	
  CHEVRON PHILLIPS CHEMICAL

  	 

	
   

  	
  COMPANY [LLC][LP]

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
   

  	 

	
   

  	
   

  	
  Name:

  	 

	
   

  	
   

  	
  Title:

  	 

					

 

H - 2

 

Exhibit I to
the

364-Day Credit Agreement

 

FORM OF CONVERSION OR CONTINUATION
REQUEST

 

Barclays Bank PLC, 

as Administrative Agent

200 Park Avenue, 4th Floor

New York, NY 10166

 

Attention: Ms. Monica Mikolajczk

 

[Date]

 

Dear Sirs and Madams:

 

The undersigned, Chevron Phillips Chemical Company
[LLC][LP] (the “Requesting Borrower”),
refers to the 364-Day Credit Agreement dated as of August 28, 2003 (as it
may be amended, restated, supplemented or otherwise modified from time to time,
the “364-Day Credit Agreement”), among
Chevron Phillips Chemical Company LP and Chevron Phillips Chemical Company LLC,
each as a Borrower, the several Lenders from time to time party thereto,
Barclays Bank PLC, as Administrative Agent, and the other agents therein named.
Terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the 364-Day Credit Agreement.

 

Pursuant to subsection 2.7 of the 364-Day Credit
Agreement, this Notice of Conversion/Continuation (the “Notice”) represents the Requesting Borrower’s
irrevocable election to [insert one or more of the following]:

 

1                                          Convert
$               
in aggregate principal amount of ABR Loans to Eurodollar Loans on 
            ,
20   (1).  The initial
Interest Period for such Eurodollar Loans is requested to be a
          month period.

 

2                                          Convert
$             in
aggregate principal amount of Eurodollar Loans with a current Interest Period
ending
            ,
20    to ABR Loans on
            ,
20   (2).

 

3                                          Continue
as Eurodollar Loans
$             in
aggregate principal amount of Eurodollar Loans with a current Interest Period
ending
            ,
20   (3).  The succeeding
Interest Period is requested to be a
         month period.

 

                                                                                                                                                                                                                                                                                                                                                                                                                                                 Very
truly yours,

 

(1)                                                          Not
later than three Business Days’ prior irrevocable notice.

(2)                                                          Not
later than 12:00 P.M., New York City time, on a Business Day; provided, that
any such conversion of Eurodollar Loans may only be made on the last day of an
Interest Period with respect thereto.

(3)                                                          Only
may be continued as such upon the expiration of the then current Interest
Period with respect thereto.

 

I - 1

 

	
   

  	
  CHEVRON PHILLIPS CHEMICAL

  
	
   

  	
  COMPANY [LLC][LP]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

I - 2

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