Document:

Exhibit
10.1

 

Execution Copy

 

 

$2,000,000,000

CREDIT AGREEMENT

 

dated as of

June 23, 2010

 

AMONG

 

KINDER MORGAN ENERGY PARTNERS, L.P.,

as the Company,

 

KINDER MORGAN OPERATING L.P. “B”,

as the Subsidiary Borrower,

 

THE LENDERS PARTY HERETO,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as the Administrative Agent,

 

BANK OF AMERICA, N.A.,

 

CITIBANK, N.A.,

 

and

 

JPMORGAN CHASE BANK, N.A.

as the Syndication Agents,

 

and

 

DNB NOR BANK ASA, NEW YORK BRANCH,

as the Documentation Agent

 

 

WELLS FARGO SECURITIES, LLC,

 

BANC OF AMERICA SECURITIES LLC,

 

CITIGROUP GLOBAL MARKETS, INC.,

 

and

 

J.P. MORGAN SECURITIES INC.,

as the Joint Lead Arrangers and the Joint Book Managers

 

 

2010 Three Year Facility

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I. DEFINITIONS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.01

  	
   

  	
  Defined Terms

  	
   

  	
  2

  
	
  SECTION 1.02

  	
   

  	
  Classification of Loans and Borrowings

  	
   

  	
  24

  
	
  SECTION 1.04

  	
   

  	
  Interpretation

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II. THE CREDITS

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.01

  	
   

  	
  Commitments

  	
   

  	
  25

  
	
  SECTION 2.02

  	
   

  	
  Loans and Borrowings

  	
   

  	
  26

  
	
  SECTION 2.03

  	
   

  	
  Requests for Borrowings

  	
   

  	
  26

  
	
  SECTION 2.04

  	
   

  	
  Intentionally Omitted

  	
   

  	
  27

  
	
  SECTION 2.05

  	
   

  	
  Swingline Loans

  	
   

  	
  27

  
	
  SECTION 2.06

  	
   

  	
  Letters of Credit

  	
   

  	
  28

  
	
  SECTION 2.07

  	
   

  	
  Funding of Borrowings

  	
   

  	
  33

  
	
  SECTION 2.08

  	
   

  	
  Interest Elections

  	
   

  	
  34

  
	
  SECTION 2.09

  	
   

  	
  Termination and Reduction of Commitments

  	
   

  	
  35

  
	
  SECTION 2.10

  	
   

  	
  Repayment of Loans; Evidence of Debt

  	
   

  	
  36

  
	
  SECTION 2.11

  	
   

  	
  Prepayment of Loans

  	
   

  	
  37

  
	
  SECTION 2.12

  	
   

  	
  Fees

  	
   

  	
  38

  
	
  SECTION 2.13

  	
   

  	
  Interest

  	
   

  	
  39

  
	
  SECTION 2.14

  	
   

  	
  Alternate Rate of Interest

  	
   

  	
  40

  
	
  SECTION 2.15

  	
   

  	
  Increased Costs

  	
   

  	
  40

  
	
  SECTION 2.16

  	
   

  	
  Break Funding Payments

  	
   

  	
  42

  
	
  SECTION 2.17

  	
   

  	
  Taxes

  	
   

  	
  42

  
	
  SECTION 2.18

  	
   

  	
  Payments Generally; Pro Rata Treatment; Sharing of Set-offs

  	
   

  	
  44

  
	
  SECTION 2.19

  	
   

  	
  Mitigation Obligations; Replacement of Lenders

  	
   

  	
  45

  
	
  SECTION 2.20

  	
   

  	
  Telephonic Notices

  	
   

  	
  46

  
	
  SECTION 2.21

  	
   

  	
  Defaulting Lenders

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III. CONDITIONS
  PRECEDENT

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.01

  	
   

  	
  Conditions Precedent to the Initial Credit Event

  	
   

  	
  49

  
	
  SECTION 3.02

  	
   

  	
  Conditions Precedent to All Credit Events

  	
   

  	
  51

  
	
  SECTION 3.03

  	
   

  	
  Delivery of Documents

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV. REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.01

  	
   

  	
  Organization and Qualification

  	
   

  	
  52

  
	
  SECTION 4.02

  	
   

  	
  Authorization, Validity, Etc.

  	
   

  	
  52

  
	
  SECTION 4.03

  	
   

  	
  Governmental Consents, Etc.

  	
   

  	
  52

  

 

i

 

	
  SECTION 4.04

  	
   

  	
  No Breach or Violation of Agreements or Restrictions, Etc.

  	
   

  	
  52

  
	
  SECTION 4.05

  	
   

  	
  Properties

  	
   

  	
  53

  
	
  SECTION 4.06

  	
   

  	
  Litigation and Environmental Matters

  	
   

  	
  53

  
	
  SECTION 4.07

  	
   

  	
  Financial Statements

  	
   

  	
  53

  
	
  SECTION 4.08

  	
   

  	
  Disclosure

  	
   

  	
  54

  
	
  SECTION 4.09

  	
   

  	
  Investment Company Act

  	
   

  	
  54

  
	
  SECTION 4.10

  	
   

  	
  ERISA

  	
   

  	
  54

  
	
  SECTION 4.11

  	
   

  	
  Tax Returns and Payments

  	
   

  	
  54

  
	
  SECTION 4.12

  	
   

  	
  Compliance with Laws and Agreements

  	
   

  	
  55

  
	
  SECTION 4.13

  	
   

  	
  Purpose of Loans

  	
   

  	
  55

  
	
  SECTION 4.14

  	
   

  	
  Foreign Assets Control Regulations, etc.

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V. AFFIRMATIVE
  COVENANTS

  	
   

  	
  56

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.01

  	
   

  	
  Financial Statements and Other Information

  	
   

  	
  56

  
	
  SECTION 5.02

  	
   

  	
  Existence, Conduct of Business

  	
   

  	
  58

  
	
  SECTION 5.03

  	
   

  	
  Payment of Obligations

  	
   

  	
  58

  
	
  SECTION 5.04

  	
   

  	
  Maintenance of Properties; Insurance

  	
   

  	
  58

  
	
  SECTION 5.05

  	
   

  	
  Books and Records; Inspection Rights

  	
   

  	
  59

  
	
  SECTION 5.06

  	
   

  	
  Compliance with Laws

  	
   

  	
  59

  
	
  SECTION 5.07

  	
   

  	
  Use of Proceeds

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI. NEGATIVE
  COVENANTS

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.01

  	
   

  	
  Liens

  	
   

  	
  60

  
	
  SECTION 6.02

  	
   

  	
  Fundamental Changes

  	
   

  	
  60

  
	
  SECTION 6.03

  	
   

  	
  Restricted Payments

  	
   

  	
  61

  
	
  SECTION 6.04

  	
   

  	
  Transactions with Affiliates

  	
   

  	
  61

  
	
  SECTION 6.05

  	
   

  	
  Restrictive Agreements

  	
   

  	
  61

  
	
  SECTION 6.06

  	
   

  	
  Ratio of Consolidated Indebtedness to Consolidated EBITDA

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII. EVENTS OF
  DEFAULT

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.01

  	
   

  	
  Events of Default and Remedies

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII. THE
  ADMINISTRATIVE AGENT

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.01

  	
   

  	
  Appointment, Powers and Immunities

  	
   

  	
  65

  
	
  SECTION 8.02

  	
   

  	
  Reliance by Administrative Agent

  	
   

  	
  66

  
	
  SECTION 8.03

  	
   

  	
  Defaults; Events of Default

  	
   

  	
  66

  
	
  SECTION 8.04

  	
   

  	
  Rights as a Lender

  	
   

  	
  66

  
	
  SECTION 8.05

  	
   

  	
  INDEMNIFICATION

  	
   

  	
  66

  
	
  SECTION 8.06

  	
   

  	
  Non-Reliance on Agents and other Lenders

  	
   

  	
  67

  
	
  SECTION 8.07

  	
   

  	
  Action by Administrative Agent

  	
   

  	
  67

  
	
  SECTION 8.08

  	
   

  	
  Resignation or Removal of Administrative Agent

  	
   

  	
  68

  
	
  SECTION 8.09

  	
   

  	
  Duties of Syndication Agents and Documentation Agent

  	
   

  	
  68

  
	
  SECTION 8.10

  	
   

  	
  Trust Indenture Act

  	
   

  	
  68

  

 

ii

 

	
  ARTICLE IX. GUARANTY

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.01

  	
   

  	
  Guaranty

  	
   

  	
  69

  
	
  SECTION 9.02

  	
   

  	
  Continuing Guaranty

  	
   

  	
  69

  
	
  SECTION 9.03

  	
   

  	
  Effect of Debtor Relief Laws

  	
   

  	
  72

  
	
  SECTION 9.04

  	
   

  	
  Waiver

  	
   

  	
  72

  
	
  SECTION 9.05

  	
   

  	
  Full Force and Effect

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X. MISCELLANEOUS

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.01

  	
   

  	
  Notices, Etc.

  	
   

  	
  73

  
	
  SECTION 10.02

  	
   

  	
  Waivers; Amendments

  	
   

  	
  74

  
	
  SECTION 10.03

  	
   

  	
  Payment of Expenses, Indemnities, etc.

  	
   

  	
  76

  
	
  SECTION 10.04

  	
   

  	
  Successors and Assigns

  	
   

  	
  78

  
	
  SECTION 10.05

  	
   

  	
  Assignments and Participations

  	
   

  	
  79

  
	
  SECTION 10.06

  	
   

  	
  Survival; Reinstatement

  	
   

  	
  81

  
	
  SECTION 10.07

  	
   

  	
  Counterparts; Integration; Effectiveness

  	
   

  	
  81

  
	
  SECTION 10.08

  	
   

  	
  Severability

  	
   

  	
  82

  
	
  SECTION 10.09

  	
   

  	
  Right of Setoff

  	
   

  	
  82

  
	
  SECTION 10.10

  	
   

  	
  Governing Law; Jurisdiction; Consent to Service of Process

  	
   

  	
  82

  
	
  SECTION 10.11

  	
   

  	
  WAIVER OF
  JURY TRIAL

  	
   

  	
  83

  
	
  SECTION 10.12

  	
   

  	
  Confidentiality

  	
   

  	
  84

  
	
  SECTION 10.13

  	
   

  	
  Interest Rate Limitation

  	
   

  	
  84

  
	
  SECTION 10.14

  	
   

  	
  EXCULPATION PROVISIONS

  	
   

  	
  85

  
	
  SECTION 10.15

  	
   

  	
  U.S. Patriot Act

  	
   

  	
  85

  
	
  SECTION 10.16

  	
   

  	
  No Advisory or Fiduciary Responsibility

  	
   

  	
  85

  
	
  SECTION 10.17

  	
   

  	
  Liability of Delegate

  	
   

  	
  86

  

 

iii

 

	
  SCHEDULES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  1.01

  	
   

  	
  Commitments

  
	
  Schedule
  6.05

  	
   

  	
  Existing
  Restrictions

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit 1.01-A

  	
   

  	
  Form of
  Assignment and Acceptance

  
	
  Exhibit 1.01-B

  	
   

  	
  Other
  Existing Letters of Credit

  
	
  Exhibit 1.01-C

  	
   

  	
  Form of
  Committed Note

  
	
  Exhibit 1.01-D

  	
   

  	
  Form of
  Swingline Note

  
	
  Exhibit 2.03

  	
   

  	
  Form of
  Borrowing Request

  
	
  Exhibit 2.06

  	
   

  	
  Form of
  Letter of Credit Request

  
	
  Exhibit 2.07

  	
   

  	
  Form of
  Notice of Account Designation

  
	
  Exhibit 2.08

  	
   

  	
  Form of
  Interest Election Request

  
	
  Exhibit 2.11

  	
   

  	
  Form of
  Notice of Prepayment

  
	
  Exhibit 5.01

  	
   

  	
  Form of
  Compliance Certificate

  

 

iv

 

CREDIT AGREEMENT

 

THIS
CREDIT AGREEMENT, dated as of June 23, 2010 (this “Agreement”) is among:

 

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

 

(b)                                 Kinder Morgan
Operating L.P. “B”, a Delaware
limited partnership (the “Subsidiary
Borrower”);

 

(c)                                  the banks and
other financial institutions listed on the signature pages hereof under
the caption “Lenders”
(the “Lenders” and
together with each other Person that becomes a Lender pursuant to Section 2.01(b) or
Section 10.05, collectively, the “Lenders”);

 

(d)                                 Wells Fargo
Bank, National Association, a national banking association, individually as a
Lender and as the administrative agent for the Lenders (in such latter capacity
together with any other Person that becomes Administrative Agent pursuant to Section 8.08,
the “Administrative Agent”);

 

(e)                                  Bank of
America, N.A., Citibank, N.A., and JPMorgan Chase Bank, N.A., as the
Syndication Agents (the “Syndication
Agents”); and

 

(f)                                    DnB NOR Bank
ASA, New York Branch as the Documentation Agent (the “Documentation Agent”).

 

PRELIMINARY STATEMENTS

 

The
Company and the Subsidiary Borrower have requested that a credit facility be
extended to them pursuant to which: (a) the Company may borrow from the
Lenders (i) to repay in full the principal and accrued interest on all
loans and other amounts outstanding (if any) under that certain Credit
Agreement dated as of August 5, 2005 among the Company, the Subsidiary
Borrower, the lenders party thereto, Wells Fargo Bank, National Association (“Wells
Fargo”) (as successor to Wachovia Bank, National Association), as the
administrative agent, an issuing bank and the swingline bank, and the other
agents named therein (as amended to date, the “Existing Credit Agreement”),
(ii) to back commercial paper issuance, and (iii) for general working
capital and other general partnership purposes; and (b) the Company may
obtain the issuance of letters of credit and the letters of credit (including
the Subsidiary Borrower Letter of Credit) issued or otherwise outstanding under
the Existing Credit Agreement will be deemed to be letters of credit issued
hereunder by the issuing bank that issued such letter of credit.

 

NOW,
THEREFORE, the parties hereto agree as follows:

 

 

ARTICLE I.

DEFINITIONS

 

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

 

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

 

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

 

“Administrative Questionnaire” means an
Administrative Questionnaire in the form supplied by the Administrative Agent.

 

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

 

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

 

“Alternate Base Rate” means, for any
day, a rate per annum equal to the greatest of (a) the Federal Funds
Effective Rate in effect on such day plus 1⁄2 of 1%, (b) the
Prime Rate in effect for such day, and (c) the LIBOR Rate for a one month
Interest Period that begins on such day (and if such day is not a Business Day,
the immediately preceding Business Day) plus 1%.  Any change in the Alternate Base Rate due to
a change in the Prime Rate, the Federal Funds Effective Rate or the LIBOR Rate
shall be effective from the effective date of such change in the Prime Rate or
the Federal Funds Effective Rate, respectively.

 

“Applicable Margin” means, as to
any ABR Borrowing or any LIBOR Borrowing, as the case may be, at any time and
from time to time, a percentage per annum equal to the applicable percentage
set forth below for the corresponding Performance Level set forth below:

 

2

 

	
  Performance

  Level

  	
   

  	
  LIBOR Borrowings

  Applicable

  Margin Percentage

  	
   

  	
  ABR Borrowings

  Applicable

  Margin Percentage

  	
   

  
	
  I

  	
   

  	
  1.325

  	
  %

  	
  0.325

  	
  %

  
	
  II

  	
   

  	
  1.550

  	
  %

  	
  0.550

  	
  %

  
	
  III

  	
   

  	
  1.750

  	
  %

  	
  0.750

  	
  %

  
	
  IV

  	
   

  	
  2.125

  	
  %

  	
  1.125

  	
  %

  
	
  V

  	
   

  	
  2.375

  	
  %

  	
  1.375

  	
  %

  

 

The
Applicable Margin shall be determined by reference to the Performance Level in
effect from time to time, and any change in the Applicable Margin shall be effective
from the effective date of the change in the applicable Performance Level
giving rise thereto.

 

“Applicable Percentage” means, with
respect to any Lender, the percentage of the Total Commitment represented by
such Lender’s Commitment.  If the Total
Commitment has terminated or expired, the Applicable Percentages shall be
determined based upon the Total Commitment most recently in effect, giving
effect to any assignments and to any Lender’s status as a Defaulting Lender at
the time of determination.

 

“Application” has the meaning specified in
Section 2.06(c).

 

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

 

“Assignment and Acceptance” means an
assignment and acceptance entered into by a Lender and an assignee (with the
consent of any party whose consent is required by Section 10.05),
and accepted by the Administrative Agent, in the form of Exhibit 1.01-A
or any other form approved by the Administrative Agent.

 

“Available Cash” has the meaning specified
in the Third Amended and Restated Agreement of Limited Partnership of the
Company dated as of May 18, 2001.

 

“Availability Period” means the
period from the Effective Date, to the earlier of the Maturity Date and the
date of termination of the Total Commitment.

 

“Bankruptcy Code” has the meaning specified
in Section 9.01(a).

 

“Benefit
Arrangement” means at any time an employee benefit plan within the meaning
of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.

 

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

 

3

 

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

 

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

 

“Borrowers” means, collectively, the
Company and the Subsidiary Borrower and “Borrower”
means either one of them.

 

“Borrowing” means (a) a borrowing
comprised of Committed Loans of the same Type, made, converted or continued on
the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect or (b) a Swingline Loan.

 

“Borrowing Date” means the Business Day upon
which any Letter of Credit is to be issued or any Loan is to be made available
to the Company.

 

“Borrowing Request” has the meaning
specified in Section 2.03.

 

“Business Day” means any day that is not a
Saturday, Sunday or other day on which commercial banks in Houston, Texas, New
York, New York, or Charlotte, North Carolina, are authorized or required by law
to remain closed; provided that, when used in
connection with a rate of interest determined by reference to LIBOR (other than
the LIM Rate), the term “Business Day”
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.

 

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

 

“Capital Stock” means, with respect to any
Person, any and all shares, interests, rights to purchase, warrants, options,
participations or other equivalents (however designated) of such Person’s
equity, including (a) all common stock and preferred stock, any limited or
general partnership interest and any limited liability company member interest,
(b) beneficial interests in trusts, and (c) any other interest or
participation that confers upon a Person the right to receive a share of the
profits and losses of, or distribution of assets of, the issuing Person.

 

“Change in Control” means any of (a) the
acquisition through beneficial ownership or otherwise after the date hereof by
any person (as such term is used in section 13(d) and section 14(d)(2) of
the Exchange Act as in effect on the date hereof) or related persons
constituting a group (as such term is used in Rule 13d-5 under the
Exchange Act as in effect on the date hereof), excluding the Permitted Holders,
of 30% of the Voting Stock of the General Partner or (b) individuals who,
at the beginning of any period of twelve consecutive months, 

 

4

 

constitute the Delegate’s Board of Directors cease
for any reason (other than death or disability) to constitute a majority of the
Delegate’s Board of Directors then in office.

 

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

 

“Change in Law” means (a) the adoption
of any law, rule or regulation after the date of this Agreement, (b) any
change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this
Agreement or (c) compliance by any Lender or any Issuing Bank (or, for
purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender’s or such Issuing Bank’s holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.  If any Lender (or its applicable lending
office or its holding company, as the case may be) shall be, or shall determine
itself to be, required by any law, rule, regulation, request, guideline or
directive (whether or not having the force of law) relating to capital
requirements adopted after the date of this Agreement or any change in the
interpretation or application of any thereof by any Governmental Authority
after the date of this Agreement (each a “Capital Requirement”) to
maintain (and in any such case such Lender, lending office or holding company,
as the case may be, does in fact maintain) capital against such Lender’s unused
Commitment (or any portion thereof), in whole or in part as a result of such
unused Commitment (or portion), either alone or in combination with any
proposed or agreed extension thereof (whether or not such extension shall be by
its terms at the time be effective), extending or being deemed to extend for a
period of more than one year from its inception or to have an original maturity
of more than one year or otherwise to last for a period of time sufficient to
require maintenance of capital against it, a “Change in Law” shall be
deemed to have occurred for purposes of Section 2.15(b) with
respect to such Capital Requirement.

 

“Charges” has the meaning specified
in Section 10.13.

 

“Citi”
means Citibank Global Markets Inc., Citibank, N.A., Citicorp USA, Inc.,
Citicorp North America Inc., and any of their affiliates.

 

“Class”, when used in reference to
any Loan or Borrowing, refers to whether such Loan, or the Loans comprising
such Borrowing, are Committed Loans or Swingline Loans.

 

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

 

“Commercial
Operation Date” means the date on which a Material Project is substantially
complete and commercially operable.

 

“Commitment” means, with respect to each
Lender, the commitment of such Lender to make Committed Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender’s Credit
Exposure hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.09, (b) reduced in its entirety pursuant
to Section 2.21, (c) increased pursuant to Section 2.01
or (d) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 10.05.  The initial amount of each Lender’s

 

5

 

Commitment
is set forth on Schedule 1.01 hereto, or in the Register maintained by
the Administrative Agent pursuant to Section 10.05.

 

 “Committed
Loan” means a Loan made pursuant to Section 2.03.

 

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

 

“Communications” has the meaning specified
in Section 10.01.

 

“Company” has the meaning specified in
the introduction to this Agreement.

 

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

 

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

 

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

 

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

 

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

 

“Consolidated
Assets” means, at the date of any determination thereof, the total assets
of the Company and the Subsidiaries as set forth on a consolidated balance
sheet of the Company and the Subsidiaries for their most recently completed
fiscal quarter, prepared in accordance with GAAP.

 

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

 

6

 

“Consolidated Indebtedness” means, at the
date of any determination thereof, Indebtedness of the Company and the
Subsidiaries determined on a consolidated basis in accordance with GAAP.

 

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

 

“Consolidated
Net Tangible Assets” means, at the date of any determination thereof,
Consolidated Assets after deducting therefrom: (a) all current liabilities,
excluding (i) any current liabilities that by their terms are extendable
or renewable at the option of the obligor thereon to a time more than 12 months
after the time as of which the amount thereof is being computed; and
(ii) current maturities of long-term debt; and (b) the value, net of any
applicable reserves and accumulated amortization, of all goodwill, trade names,
trademarks, patents and other like intangible assets, all as set forth, or on a
pro forma basis would be set
forth, on a consolidated balance sheet of the Company and the Subsidiaries for
their most recently completed fiscal quarter, prepared in accordance with GAAP.

 

“Credit Event” means the making of any
Loan or the issuance or the extension of any Letter of Credit.

 

“Credit Exposure” means, with respect to any
Lender at any time, the sum of the outstanding principal amount of such Lender’s
Committed Loans and its LC Exposure and Swingline Exposure at such time.

 

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

 

“Defaulting
Lender” means any Lender, as determined by the Administrative Agent, that has
(a) failed to fund any portion of its Loans or participations in Letters of
Credit or Swingline Loans within three Business Days of the date required to be
funded by it hereunder, (b) notified the Company, the Administrative Agent, any
Issuing Bank, the Swingline Lender or any Lender in writing that it does not
intend to comply with any of its funding obligations under this Agreement or
has made a public statement to the effect that it does not intend to comply
with its funding obligations under this Agreement or under other agreements in
which it commits to extend credit (unless such failure is being contested in
good faith by appropriate proceedings), (c) failed, within three Business Days
after request by the Administrative Agent, to confirm that it will comply with
the terms of this Agreement relating to its obligations to fund prospective
Loans and participations in then outstanding Letters of Credit and Swingline
Loans (unless such failure is being contested in good faith by appropriate
proceedings), (d) otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within
three Business Days of the date when due, or (e) (i) has been adjudicated as,
or determined by any Governmental Authority having regulatory authority over
such Person or its assets to be, insolvent or has a parent company that has
been adjudicated as, or determined by any Governmental Authority having
regulatory authority over such Person or its assets to be, insolvent, or (ii)
become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee, administrator, assignee for the benefit of
creditors or similar 

 

7

 

Person charged with
reorganization or liquidation of its business or custodian, appointed for it,
or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment or has a
parent company that has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or custodian appointed for it, or
has taken any action in furtherance of, or indicating its consent to, approval
of or acquiescence in any such proceeding or appointment.  Notwithstanding the foregoing, no Lender
shall be a Defaulting Lender solely by virtue of the ownership or acquisition
of any equity interest in that Lender or any direct or indirect parent company
thereof by a Governmental Authority.  For
avoidance of doubt (A) an assignee of a Defaulting Lender shall not be deemed
to be a Defaulting Lender solely by virtue of the fact that it is an assignee
of a Defaulting Lender, (B) neither the reallocation of funding obligations
provided for in Section 2.21 as a result of a Lender being a Defaulting
Lender nor the performance by non-Defaulting Lenders of such reallocated
funding obligations will by themselves cause the relevant Defaulting Lender to
become a non-Defaulting Lender and (C) when a Defaulting Lender ceases to be a
Defaulting Lender (due to assignment to a new or existing Lender, commitment
reduction pursuant to Section 2.21 or otherwise) all cash collateral
deposited with respect to Letters of Credit pursuant to Section 2.06(k)
shall be promptly released to the Company and all commitment reallocations
under Section 2.21 shall be promptly adjusted.

 

“Delegate” means Kinder Morgan Management,
LLC, a Delaware limited liability company.

 

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

 

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

 

“EBITDA” means, with respect to any
Person for any period (without duplication), the Net Income of such Person,
increased (a) (to the extent deducted in determining Net Income for such
period) by the sum of (i) all income taxes (including state franchise taxes
based upon income) of such Person paid or accrued according to GAAP for such
period; (ii) Consolidated Interest Expense of such Person for such period,
(iii) all depreciation, depletion and amortization (including amortization of
goodwill) of such Person for such period; (iv) other non-cash charges or losses
(including asset impairments, write-downs or write-offs), and
(v) amortization, write-off or write-down of debt discount, capitalized
interest and debt issuance costs and commissions, discounts and other fees,
charges and expenses associated with any letters of credit or Indebtedness,
including in connection with the repurchase or repayment thereof, including any
premium and acceleration of fees or discounts and other expenses, plus (b) the amount of cash dividends actually received
during such period by such Person on a consolidated basis from unconsolidated
Subsidiaries of such Person (provided that
any such cash dividends actually received within thirty days after the last day
of any fiscal quarter attributable to operations during such prior fiscal
quarter shall be deemed to have been received during such prior fiscal quarter
and not in the fiscal quarter actually received) minus
(c) each of the following (i) all non-cash items of income or gain of such
Person which were included in determining such consolidated Net Income for such
period, (ii) any cash payments made during such period in respect of items
described in clause (a)(iv) above subsequent to the fiscal quarter in which the

 

8

 

relevant
non-cash charges or losses were reflected as a charge in determining
consolidated Net Income and (iii) equity earnings from unconsolidated
Subsidiaries, in each case determined in accordance with GAAP.

 

“Effective Date” means the date occurring on
or before June 30, 2010 on which the conditions specified in Section 3.01
are satisfied (or waived in accordance with Section 10.02).

 

“Eligible Assignee” means (a) any
Lender; (b) any Affiliate of any Lender; (c) an Approved Fund and (d) any other
Person (other than a natural person) approved by (i) the Administrative Agent,
(ii) the Issuing Banks and (iii) unless an Event of Default has occurred and is
continuing, the Company (each such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include the
Company or any of the Company’s Affiliates or Subsidiaries.

 

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

 

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

 

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

 

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

 

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

 

“Event of Default” has the meaning
specified in Section 7.01.

 

“Exchange Act” means the Securities
Exchange Act of 1934, as amended.

 

“Excluded Taxes” means, with respect to the
Administrative Agent, any Lender, any Issuing Bank or any other recipient of
any payment to be made by or on account of any 

 

9

 

Obligation,
(a) income or franchise taxes imposed on (or measured by) its net income by the
United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which either Borrower is located, (c) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Company under Section 2.19(b)), any withholding tax that is imposed
on amounts payable to such Foreign Lender at the time such Foreign Lender
becomes a party to this Agreement or is attributable to such Foreign Lender’s
failure or inability to comply with Section 2.17(e), except to the
extent that such Foreign Lender’s assignor (if any) was entitled, at the time
of assignment, to receive additional amounts from a Borrower with respect to
such withholding tax pursuant to Section 2.17(a) and (d) any U.S.
Federal withholding Taxes imposed by FATCA.

 

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

 

 “Existing
Credit Agreement” has the meaning specified in the Preliminary
Statements.

 

“Existing Letters of Credit” means,
collectively, the Subsidiary Borrower Letter of Credit and the letters of
credit issued under the Existing Credit Agreement listed on Exhibit 1.01-B.

 

“Facility
Fee” has the meaning specified in Section 2.12(a).

 

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

 

	
  Performance

  Level

  	
   

  	
  Facility Fee Rate

  	
   

  
	
  I

  	
   

  	
  .175

  	
  %

  
	
  II

  	
   

  	
  .200

  	
  %

  
	
  III

  	
   

  	
  .250

  	
  %

  
	
  IV

  	
   

  	
  .375

  	
  %

  
	
  V

  	
   

  	
  .625

  	
  %

  

 

The
Facility Fee Rate shall be determined by reference to the Performance Level in
effect from time to time and any change in the Facility Fee Rate shall be
effective from the effective date of the change in the applicable Performance
Level giving rise thereto.

 

10

 

“FATCA”
means Sections 1471 through 1474 of the Code and any regulations or official
interpretations thereof.

 

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

 

“Fee Letters” has the meaning specified
in Section 2.12.

 

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

 

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

 

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

 

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

 

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

 

“Guarantee” of or by any Person (the “guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the “primary obligor”)
in any manner, whether directly or indirectly, and including any obligation of
the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security
for the payment thereof, (b) to purchase or lease property, securities or
services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Indebtedness or obligation; provided that the term 

 

11

 

Guarantee
shall not include endorsements for collection or deposit in the ordinary course
of business.

 

“Guaranteed Obligations” has the meaning
specified in Section 9.01.

 

“Guaranty” means the guaranty of the
Company contained in Article IX.

 

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

 

“Hedging Agreement” means a
financial instrument or security which is used as a cash flow or fair value
hedge to manage the risk associated with a change in interest rates, foreign
currency exchange rates or commodity prices.

 

“Hybrid
Securities” means any trust preferred securities, or deferrable interest
subordinated debt with a maturity of at least 20 years, which provides for the
optional or mandatory deferral of interest or distributions, issued by the
Company, or any business trusts, limited liability companies, limited
partnerships or similar entities (i) substantially all of the common equity,
general partner or similar interests of which are owned (either directly or
indirectly through one or more Wholly-owned Subsidiaries) at all times by the
Company or any of the Subsidiaries, (ii) that have been formed for the purpose
of issuing trust preferred securities or deferrable interest subordinated debt,
and (iii) substantially all the assets of which consist of (A) subordinated
debt of the Company or a Subsidiary, and (B) payments made from time to
time on the subordinated debt.

 

“Indebtedness” of any Person means,
without duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or similar
instruments (other than surety, performance and guaranty bonds), (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding trade accounts payable incurred in the ordinary course of business),
(e) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (f) all Guarantees by such
Person of Indebtedness of others (provided that
in the event that any Indebtedness of the Company or any Subsidiary shall be
the subject of a Guarantee by one or more Subsidiaries or by the Company, as
the case may be, the aggregate amount of the outstanding Indebtedness of the
Company and the Subsidiaries in respect thereof shall be determined by
reference to the primary Indebtedness so guaranteed, and without duplication by
reason of the existence of any such guarantee), (g) all Capital Lease
Obligations of such Person, (h) all obligations of such Person as an account
party in respect of (i) the full face amount of all letters of credit (drawn or
undrawn) supporting the exposure of such Person under Hedging Agreements and
(ii) the drawn portion of all other letters of credit and letters of guaranty,
(i) all obligations, contingent or otherwise, of such Person in respect of
funded 

 

12

 

bankers’
acceptances and (j) Hybrid Securities. 
The Indebtedness of any Person shall include the Indebtedness of any
other Person (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except
to the extent the terms of such Indebtedness provide that such Person is not
liable therefor: provided that Indebtedness shall
not include (1) non-recourse debt, (2) performance guaranties, (3) monetary
obligations or guaranties of monetary obligations of Person as lessees under
leases that are in accordance with GAAP, recorded as operating leases, and (4)
guarantees by such Person of obligations of others which are not obligations
described in clauses (a) through (j) of this definition, and provided further, that where any such indebtedness or
obligation of such Person is made jointly, or jointly and severally, with any
third party or parties other than any Subsidiary of such Person, the amount
thereof for the purpose of this definition only shall be the pro rata portion
thereof payable by such Person, so long as such third party or parties have not
defaulted on its or their joint and several portions thereof and can reasonably
be expected to perform its or their obligations thereunder.  For the avoidance of doubt, except as
expressly provided in clause (h)(i) above, “Indebtedness” of a Person in
respect of such letters of credit shall include, without duplication, only the
principal amount of the unreimbursed obligations of such Person in respect of
such letters of credit that have been drawn upon by the beneficiaries to the
extent of the amount drawn, and shall include no other obligations in respect
of such letters of credit.

 

“Indemnified
Parties” has the meaning specified in Section 10.03.

 

“Indemnified Taxes” means Taxes
other than Excluded Taxes.

 

“Indemnity
Matters” means, with respect to any Indemnified Party, all losses,
liabilities, claims and damages (including reasonable legal fees and expenses).

 

“Information
Memorandum” means the Information Memorandum dated May, 2010.

 

“Interest Election Request” has the
meaning specified in Section 2.08.

 

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

 

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

 

“Interest Payment Date” means (a) with
respect to any ABR Loan (including a Swingline Loan), the last Business Day of
each March, June, September and December, and (b) with respect to any
Eurodollar Loan, the last Business Day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months’ duration, each day
prior to the last day of such 

 

13

 

Interest
Period that occurs at intervals of three months’ duration after the first day
of such Interest Period.

 

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

 

“Issuing Banks” means each bank issuing an
Existing Letter of Credit, including Wells Fargo, for itself and as a successor
to Wachovia Bank, National Association, and each other consenting Lender that
is designated to the Administrative Agent in writing by the Company, in each
case in its capacity as an issuer of one or more Letters of Credit hereunder.

 

 “LC
Disbursement” means a payment made by an Issuing Bank pursuant to
a Letter of Credit.

 

“LC Exposure” means, at any time, the sum
of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such
time plus (b) the aggregate amount of all LC
Disbursements that have not yet been reimbursed by or on behalf of the
applicable Borrower at such time.  The LC
Exposure of any Lender at any time shall be its Applicable Percentage of the
total LC Exposure at such time.

 

 “Lenders” has the
meaning specified in the introduction to this Agreement.  Unless the context otherwise requires, the
term “Lenders” includes
the Swingline Lender.

 

“Letter of Credit” means any
Existing Letter of Credit or any letter of credit issued pursuant to this
Agreement.

 

“Letter of Credit Request” has the meaning
specified in Section 2.06.

 

“LIBOR” means for any Interest
Period:

 

(a)                                  the rate per
annum equal to the rate determined by the Administrative Agent to be the
offered rate that appears on the page of the Reuters Reference screen (or any
successor thereto) that displays an average British Bankers Association
Interest Settlement Rate for deposits in dollars (for delivery on the first day
of such Interest Period) with a term 

 

14

 

equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period; or

 

(b)                                 if the rate
referenced in the preceding clause (a) does not appear on such page or service
or such page or service shall not be available, the rate per annum equal to the
rate determined by the Administrative Agent to be the offered rate on such
other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in dollars (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period; or

 

(c)                                  if the rates
referenced in the preceding clauses (a) and (b) are not available, the rate per
annum determined by the Administrative Agent as the rate of interest at which
deposits in dollars (for delivery on the first day of such Interest Period in
same day funds) in the approximate amount of the Eurodollar Loan as to which
such determination is being made (or, if Wells Fargo is making or converting a
simultaneous Eurodollar Loan in the approximate amount of such Eurodollar Loan
being made, continued or converted by Wells Fargo) and with a term equivalent
to such Interest Period would be offered by Wells Fargo’s London branch to
major banks in the London interbank eurodollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period.

 

“LIBOR
Market Index” means for any day:

 

(a)                                  the rate per annum equal to
the rate determined by the Swingline Lender to be the offered rate that appears
on the page of the Reuters Reference screen (or any successor thereto) that
displays an average British Bankers Association Interest Settlement Rate for
deposits in dollars (for delivery on such day) with a term equivalent to one
month, determined as of approximately 11:00 a.m. (London time) on such day; or

 

(b)                                 if the rate referenced in
the preceding clause (a) does not appear on such page or service or such page
or service shall not be available, the rate per annum equal to the rate
determined by the Swingline Lender to be the offered rate on such other page or
other service that displays an average British Bankers Association Interest
Settlement Rate for deposits in dollars (for delivery on such day) with a term
equivalent to one month, determined as of approximately 11:00 a.m. (London
time) on such day; or

 

(c)                                  if the rates referenced in
the preceding clauses (a) and (b) are not available, the rate per annum
determined by the Swingline Lender as the rate of interest at which deposits in
dollars of $5,000,000 and for a one month maturity (for delivery on such day in
same day funds) are offered by Wells Fargo’s London branch to major banks in
the London interbank eurodollar market at their request at approximately 11:00
a.m. (London time) on such day.

 

“LIBOR Rate” shall mean, with respect to
any Eurodollar Loan for any Interest Period for such Loan, a rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by the
Administrative Agent to be equal to the quotient of (i) LIBOR for such

 

15

 

Loan
for such Interest Period divided by (ii) 1 minus the
Reserve Requirement for such Loan for such Interest Period.

 

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

 

“LIM
Rate” shall mean, with respect to any Swingline Loan for any day, a rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
determined by the Swingline Lender to be equal to the quotient of (i) LIBOR
Market Index for such Loan for such day divided by (ii) 1 minus
the Reserve Requirement for such Loan for such day.

 

“Loan Documents” mean, collectively, this
Agreement (including the Guaranty), the Notes, if any, the Applications, the
Fee Letters and all other instruments and documents from time to time executed
and delivered by either Borrower in connection herewith and therewith.

 

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

 

 “Material
Adverse Effect” means, relative to any occurrence of whatever
nature, a material adverse effect on (a) the business assets, liabilities or
financial condition of the Company and the Subsidiaries taken as a whole, (b)
the ability of the Borrowers to collectively perform the Obligations or (c) the
rights of the Administrative Agent, any Issuing Bank or any Lender against the
Borrower under any material provision of this Agreement or any other Loan
Document.

 

“Material
Project” means the construction or expansion of a capital project of the
Company or any of the Subsidiaries, the aggregate capital cost of which exceeds
$50,000,000.

 

“Material
Project EBITDA Adjustments” means, with respect to each Material Project

 

(A)                              prior to the Commercial
Operation Date of a Material Project (but including the fiscal quarter in which
such Commercial Operation Date occurs) a percentage (based on the then-current
completion percentage of such Material Project) of an amount to be approved by
the Administrative Agent as the projected Consolidated EBITDA attributable to
such Material Project for the first 12-month period following the scheduled
Commercial Operation Date of such Material Project (such amount to be
determined based on customer contracts relating to such Material Project, the
creditworthiness of the other parties to such contracts, or such tariff-based
customers and projected revenues from such contracts, tariffs capital costs and
expenses, scheduled Commercial Operation Date, oil and gas reserve and
production estimates, commodity price assumptions and other factors deemed
appropriate by the Administrative Agent) which may, at the Company’s option, be
added to actual Consolidated EBITDA for the fiscal quarter in which
construction of such Material Project commences and for each fiscal quarter
thereafter until the Commercial Operation Date of such Material Project 

 

16

 

(including
the fiscal quarter in which such Commercial Operation Date occurs, but without
duplication of any actual Consolidated EBITDA attributable to such Material
Project following such Commercial Operation Date); provided
that if the actual Commercial Operation Date does not occur by the scheduled
Commercial Operation Date, the foregoing amount shall be reduced, for quarters
ending after the scheduled Commercial Operation Date to (but excluding) the
first full quarter after the actual Commercial Operation Date, by the following
percentage amounts depending on the period of delay (based on the actual period
of delay or then-estimated delay, whichever is longer): (i) 90 days or less,
0%, (ii) longer than 90 days, but not more than 180 days, 25%, (iii) longer
than 180 days but not more than 270 days, 50%, and (iv) longer than 270 days,
100%; and

 

(B)                                beginning with the first
full fiscal quarter following the Commercial Operation Date of a Material
Project and for the two immediately succeeding fiscal quarters, an amount to be
approved by the Administrative Agent as the projected Consolidated EBITDA
attributable to such Material Project (determined in the same manner set forth
in clause (A) above) for the balance of the four full fiscal quarter period
following such Commercial Operation Date, which may, at the Company’s option,
be added to actual Consolidated EBITDA for such fiscal quarters.

 

Notwithstanding
the foregoing:

 

(i)                                     no such additions shall be
allowed with respect to any Material Project unless:

 

(a)                                  not later than 10 days (or
such shorter period as reasonably acceptable to the Administrative Agent) prior
to the delivery of any certificate required by the terms and provisions of Section
5.01(c) to the extent Material Project EBITDA Adjustments will be made to
Consolidated EBITDA in determining compliance with Section 6.06, the
Company shall have delivered to the Administrative Agent written pro forma projections of Consolidated EBITDA attributable to
such Material Project, and

 

                                                (b)                                 prior to the
date the certificate required by the terms and provisions of Section 5.01(c)
is required to be delivered, the Administrative Agent shall have approved (such
approval not to be unreasonably withheld) such projections and shall have
received such other information and documentation as the Administrative Agent
may reasonably request, all in form and substance satisfactory to the
Administrative Agent, and

 

(ii)                                  the aggregate amount of all
Material Project EBITDA Adjustments during any period shall be limited to 20%
of the total actual Consolidated EBITDA for such period (which total actual
Consolidated EBITDA shall be determined without including any Material Project
EBITDA Adjustments).

 

Any Material Project EBITDA Adjustment with respect
to any Material Project of an entity with respect to which the Company holds an
equity method 

 

17

 

investment
of at least 40% shall be determined as set forth above based upon the projected
(prior to the Commercial Operation Date) and actual (on and after the 

Commercial Operation Date) cash dividends projected to be received or actually
received by the Company on a consolidated basis from such entity.

 

“Material
Subsidiary” means any Subsidiary the value of the assets of which exceeds
5% of Consolidated Assets as of the fiscal quarter most recently ended for
which financial statements have been delivered pursuant to Section 5.01(a)
or (b), as the case may be.

 

“Maturity Date” means the earlier of (a)
the Stated Maturity Date and (b) the acceleration of the Obligations pursuant
to Section 7.01.

 

“Maximum Rate” has the meaning specified in
Section 10.13.

 

“Moody’s” means Moody’s Investors
Service, Inc.

 

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

 

“Net
Income” means with respect to any Person for any period that net income of
such Person for such period determined in accordance with GAAP; provided that there shall be excluded,
without duplication, from such net income (to the extent otherwise included
therein).

 

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

 

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

 

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

 

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

 

“Net
Worth” means, as to the Company at any date, the sum of the amount of
partners’ capital of the Company determined as of such date in accordance with
GAAP, provided there shall be excluded,
without duplication, from such determination (to the extent otherwise included
therein) the amount of accumulated other comprehensive gain or loss as of such
date.

 

“Note”  means a Committed Note or a
Swingline Note.

 

“Notice of Account Designation” has the meaning
specified in Section 2.07.

 

“Notice of Default” has the meaning
specified in Section 7.01.

 

“Notice of Prepayment” has the
meaning specified in Section 2.11.

 

18

 

“Obligations” means collectively:

 

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

 

(b)                                 all obligations
of the Company and the Subsidiary Borrower under, with respect to, and relating
to the Letters of Credit whether contingent or matured;

 

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

 

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

 

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

 

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

 

“Participant” has the meaning specified in
Section 10.05(e).

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

“Permitted
Holders” means any of the holders of the Voting Stock of the General
Partner on the date of this Agreement

 

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

 

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

 

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

 

“Pledged Bonds” has the meaning specified
in Section 2.06.

 

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

 

“Principal Office” shall mean the
principal office of the Administrative Agent, presently located in Charlotte,
North Carolina, or such other location as designated by the Administrative
Agent from time to time.

 

“Register” has the meaning specified
in Section 10.05.

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

“Required Lenders” means, at any
time, Lenders having Credit Exposure and unused Commitments representing more
than 50% of the sum of the total Credit Exposures and unused Commitments at
such time.

 

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

 

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

 

“Responsible Officer” means, as used
with respect to the Company or the Subsidiary Borrower, the Chairman, Vice
Chairman, President, any Vice President, Chief Executive Officer, Chief
Financial Officer, Controller or Treasurer of the Delegate.

 

“Restricted Payment” means any
distribution (whether in cash, securities or other property) with respect to
any partnership interest in the Company, or any payment (whether in cash,
securities or other property), including any deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such partnership interest or any option or other right to acquire any such
partnership interest; provided, however,
that (a) distributions with respect to the partnership interests in the
Company that do not exceed, with respect to any fiscal quarter of the Company,
the amount of Available Cash for such quarter shall 

 

21

 

not
constitute Restricted Payments so long as both before and after the making of
such distribution, no Default exists under Section 7.01(b) and no Event
of Default shall have occurred and be continuing, (b) any partnership interest
split, partnership interest reverse split, dividend of Company partnership
interests or similar transaction will not constitute a Restricted Payment and
(c) the Company’s open market repurchases of any of its partnership interests
and acquisitions by officers, directors and employees of the Company of
partnership interests in the Company through cashless exercise of options
pursuant to the Company’s Common Unit Option Plan shall not constitute
Restricted Payments.

 

“S&P” means Standard & Poor’s
Ratings Group, a division of The McGraw-Hill Companies, Inc.

 

“SEC”
means the Securities and Exchange Commission or any Governmental Authority
succeeding to its function.

 

“Specified
Acquisition” means, at the election of the Company, one or more
acquisitions of assets or entities or operating lines or divisions in any
rolling 12-month period for an aggregate purchase price of not less than
$100,000,000.

 

“Stated
Maturity Date” means June 23, 2013.

 

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

 

“Subsidiary Borrower” has the
meaning specified in the introduction to this Agreement.

 

“Subsidiary Borrower Letter of Credit” means
irrevocable letter of credit No. S113181 issued by First Union National
Bank (now Wells Fargo) in the original face amount of $24,128,548 for the
account of the Subsidiary Borrower and for the benefit of Trustee.

 

“Swingline Exposure” means, at any
time, the aggregate principal amount of all Swingline Loans outstanding at such
time.  The Swingline Exposure of any
Lender at any time shall be its Applicable Percentage of the total Swingline
Exposure at such time.

 

22

 

“Swingline Lender” means Wells
Fargo, in its capacity as lender of Swingline Loans hereunder.

 

“Swingline Loan” means a Loan made pursuant
to Section 2.05.

 

“Swingline Note” means a promissory note of
the Company payable to the order of the Swingline Lender in substantially the
form of Exhibit 1.01-D, together with all modifications, extensions,
renewals and rearrangements thereof.

 

“Syndication Agents” has the
meaning specified in the introduction to this Agreement.

 

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

 

“Total
Capitalization” means, as to the Company at any date, the sum of
Consolidated Indebtedness (determined at such date) and the Net Worth
(determined as at the end of the most recent fiscal quarter of the Company for
which financial statements pursuant to Section 5.01(a) or Section 5.01(b),
as applicable, have been delivered).

 

“Total Commitment” means the sum
of the Commitments of the Lenders.

 

“Transactions” means the execution,
delivery and performance by the Borrowers of this Agreement and the other Loan
Documents, the borrowing of Loans, the use of the proceeds thereof and the
Existing Letters of Credit and the issuance of the other Letters of Credit
hereunder.

 

“Trustee” means The Bank of New York
Mellon Trust Company, N.A., as the beneficiary of the Subsidiary Borrower
Letter of Credit and any successor beneficiary.

 

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

 

“United States” and “U.S.”  each means
United States of America.

 

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

 

“Wells
Fargo” has the meaning specified in the Preliminary Statements.

 

“Wholly-owned Subsidiary” means a
Subsidiary of which all issued and outstanding Capital Stock (excluding (a) in
the case of a corporation, directors’ qualifying shares, (b) in the case of a
limited partnership, a 2% general partner interest and (c) in the case of 

 

23

 

a
limited liability company, a 2% managing member interest) is directly or
indirectly owned by the Company.

 

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

 

“Withholding
Agent” means the Administrative Agent.

 

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

 

SECTION
1.03                    Accounting
Terms; Changes in GAAP.  All
accounting and financial terms used herein and not otherwise defined herein and
the compliance with each covenant contained herein which relates to financial
matters shall be determined in accordance with GAAP applied by the Company on a
consistent basis, except to the extent that a deviation therefrom is expressly
stated.  Should there be a change in GAAP
from that in effect on the Execution Date, such that any of the defined terms
set forth in Section 1.01 and/or compliance with the covenants set
forth in Article VI would then be calculated in a different manner or
with different components or any of such covenants and/or defined terms used
therein would no longer constitute meaningful criteria for evaluating the
matters addressed thereby prior to such change in GAAP (a) the Company and the
Required Lenders agree, within the 60-day period following any such change, to
negotiate in good faith and enter into an amendment to this Agreement in order
to modify the defined terms set forth in Section 1.01 or the covenants
set forth in Article VI, or both, in such respects as shall reasonably
be deemed necessary by the Required Lenders that the criteria for evaluating
the matters addressed by such covenants are substantially the same criteria as
were effective prior to any such change in GAAP, and (b) the Company shall be
deemed to be in compliance with such covenants during the 60-day period
following any such change, or until the earlier date of execution of such
amendment, if and to the extent that the Company would have been in compliance
therewith under GAAP as in effect immediately prior to such change.

 

SECTION 1.04                    Interpretation.  In this Agreement, unless a clear contrary
intention appears:

 

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

 

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

 

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

 

(iv)                              reference to
any Person includes such Person’s successors and assigns but, if applicable,
only if such successors and assigns are permitted by this Agreement, and
reference to a Person in a particular capacity excludes such Person in any

 

24

 

other capacity or individually;
provided that nothing in this
clause (iv) is intended to authorize any assignment not otherwise permitted by
this Agreement;

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE II.

THE CREDITS

 

SECTION 2.01                    Commitments.

 

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

 

(b)                                 The Company
shall have the right, without the consent of the Lenders but with the prior
approval of the Administrative Agent, not to be unreasonably withheld, to cause
from time to time an increase in the total Commitments of the Lenders by adding
to this Agreement one or more additional Lenders or by allowing one or more
Lenders to increase their respective Commitments; provided however (i) no Event of Default shall have
occurred hereunder which is continuing, (ii) no such increase shall cause
the aggregate Commitments

 

25

 

hereunder to exceed $2,300,000,000 and (iii) no
Lender’s Commitment shall be increased without such Lender’s consent.

 

SECTION 2.02                    Loans and
Borrowings.

 

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

 

(b)                                 Subject to Section 2.14,
each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as
the Company may request in accordance herewith. 
Each Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect
the obligation of the Company to repay such Loan in accordance with the terms
of this Agreement.

 

(c)                                  At the
commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $3,000,000. 
At the time that each ABR Borrowing is made, such Borrowing shall be in
an aggregate amount that is an integral multiple of $1,000,000 and not less
than $1,000,000; provided that an ABR Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the
Total Commitment or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.06(f).  Each Swingline Loan shall be in an amount
that is an integral multiple of $100,000 and not less than $1,000,000.  There shall not at any time be more than a
total of twelve Eurodollar Borrowings outstanding.

 

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

 

SECTION 2.03                    Requests for
Borrowings.

 

To
request a Borrowing, the Company shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later
than 11:00 a.m., Charlotte, North Carolina, time, three Business Days
before the date of the proposed Borrowing and (b) in the case of an ABR
Borrowing, not later than 11:00 a.m., Charlotte, North Carolina, time, on
the date of the proposed Borrowing.  Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery, telecopy or electronic communication (e-mail) to the
Administrative Agent of a written Borrowing Request in a form of Exhibit 2.03
(a “Borrowing Request”)
and signed by the Company.  Each such
telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:

 

(i)                                     the aggregate
amount of the requested Borrowing;

 

26

 

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

 

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

 

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

 

(v)                                 the location
and number of the Company’s account to which funds are to be disbursed, which
shall comply with the requirements of Section 2.07.

 

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 Company shall be deemed to have selected an Interest Period
of one month’s duration.  Promptly
following receipt of a Borrowing Request in accordance with this Section 2.03,
the Administrative Agent shall advise each Lender of the details thereof and of
the amount of such Lender’s Loan to be made as part of the requested Borrowing.

 

SECTION 2.04                    Intentionally
Omitted

 

SECTION 2.05                    Swingline Loans.

 

(a)                                  Subject to the
terms and conditions set forth herein, the Swingline Lender agrees to make
Swingline Loans to the Company from time to time during the Availability
Period, in an aggregate principal amount at any time outstanding that will not
result in (i) the aggregate principal amount of outstanding Swingline
Loans exceeding $25,000,000 or (ii) the sum of the total Credit Exposures
exceeding the Total Commitment; provided that
the Swingline Lender shall not be required to make a Swingline Loan to
refinance an outstanding Swingline Loan. 
Within the foregoing limits and subject to the terms and conditions set
forth herein, the Company may borrow, prepay and reborrow Swingline Loans.

 

(b)                                 To request a
Swingline Loan, the Company shall notify the Administrative Agent of such
request by telephone (confirmed by telecopy), not later than 12:00 noon,
Charlotte, North Carolina, time, on the day of a proposed Swingline Loan.  Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day) and amount of
the requested Swingline Loan.  The
Administrative Agent (if not the Swingline Lender) will promptly advise the
Swingline Lender of any such notice received from the Company.  So long as the Swingline Lender and the
Administrative Agent are Wells Fargo or (if not Wells Fargo), the same
institution is acting both as the Administrative Agent and as the Swingline
Lender, the Swingline Lender shall make each Swingline Loan available to the
Company by means of a credit to the deposit account of the Company with the
Swingline Lender identified in the most recent Notice of Account Designation by
3:00 p.m., Charlotte, North Carolina, time, on the requested date of such
Swingline Loan.

 

(c)                                  The Swingline
Lender may by written notice given to the Administrative Agent not later than
12:00 noon, Charlotte, North Carolina, time, on any Business Day require

 

27

 

the Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding.  Such notice shall specify the aggregate
amount of Swingline 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 Applicable Percentage of such Swingline Loan or
Loans.  Each Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the
account of the Swingline Lender, such Lender’s Applicable Percentage of such
Swingline Loan or Loans.  Each Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is irrevocable and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or Event of Default or reduction or termination of
the Total Commitment, 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, in the
same manner as provided in Section 2.07
with respect to Loans made by such Lender (and Section 2.07 shall
apply, mutatis mutandis, to the
payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from the
Lenders.  The Administrative Agent shall
notify the Company of any participations in any Swingline Loan acquired
pursuant to this paragraph, and thereafter payments in respect of such Swingline
Loan shall be made to the Administrative Agent and not to the Swingline
Lender.  Any amounts received by the
Swingline Lender from the Company (or other party on behalf of the Company) in
respect of a Swingline Loan after receipt by the Swingline 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 Swingline
Lender, as their interests may appear. 
The purchase of participations in a Swingline Loan pursuant to this
paragraph shall not relieve the Company or the Subsidiary Borrower of any
default in the payment thereof.

 

SECTION 2.06                    Letters of
Credit.

 

(a)                                  Existing
Letters of Credit.  The parties
hereto acknowledge that on and after the Effective Date, each Existing Letter
of Credit shall be a Letter of Credit issued by the Issuing Bank shown as the
issuer thereof on Exhibit 1.01-B for the account of the Subsidiary
Borrower in the case of the Subsidiary Borrower Letter of Credit and for the
account of the Company with respect to all other Existing Letters of
Credit.  Any Letter of Credit issued by
Wachovia Bank, National Association, or First Union National Bank shall be
deemed to be a Letter of Credit issued by Wells Fargo.  The Subsidiary Borrower hereby pledges,
assigns, transfers and delivers to Wells Fargo, as the Issuing Bank that has
issued the Subsidiary Borrower Letter of Credit, all its right, title and
interest to all Bonds purchased with funds drawn under the Subsidiary Borrower
Letter of Credit (the “Pledged
Bonds”), and hereby grants to such Issuing Bank a first lien on, and
security interest in, its rights, title and interest in and to the Pledged
Bonds, the interest thereon and all proceeds thereof or substitutions therefor,
as collateral security for the prompt and complete payment when due of the
amounts payable in respect of the Subsidiary Borrower Letter of Credit.  During such time as any Bonds are Pledged
Bonds, the Issuing Bank that has issued the Subsidiary Borrower Letter of
Credit shall be entitled to exercise all of the rights of a holder of Bonds
with respect to voting, consenting and directing 

 

28

 

the Trustee as if such Issuing Bank were the owner
of such Bonds, and the Subsidiary Borrower hereby grants and assigns to such
Issuing Bank all such rights.

 

(b)                                 General.  Subject to the terms and conditions set forth
herein, the Company may request the issuance, amendment, renewal or extension
of Letters of Credit from an Issuing Bank for its own account individually or
for its own account and that of any Subsidiary as co-applicants, in a form
reasonably acceptable to the Administrative Agent and such Issuing Bank, at any
time and from time to time during the Availability Period.  In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any
Application or other agreement submitted by the Company to, or entered into by
the Company with, the Issuing Bank thereof relating to any Letter of Credit,
the terms and conditions of this Agreement shall control.

 

(c)                                  Notice of
Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit
(or the amendment, renewal or extension of an outstanding Letter of Credit),
the Company shall hand deliver or telecopy (or transmit by electronic
communication (e-mail), if arrangements for doing so have been approved by the
designated Issuing Bank) to the designated Issuing Bank and the Administrative
Agent (not less than five Business Days (unless otherwise acceptable to such
Issuing Bank) in advance of the requested date of issuance, amendment, renewal
or extension) a notice (a “Letter
of Credit Request”) requesting the issuance of a Letter of Credit,
or identifying the Letter of Credit to be amended, renewed or extended, the
date of issuance, amendment, renewal or extension, the date on which such
Letter of Credit is to expire (which shall comply with Section 2.06(d)),
the amount of such Letter of Credit, the name and address of the beneficiary
thereof and such other information as shall be necessary to prepare, amend,
renew or extend such Letter of Credit. 
If requested by the Issuing Bank that has been requested to issue such
Letter of Credit, the Company also shall submit a letter of credit application
on such Issuing Bank’s standard form (an “Application”)
in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended,
renewed or extended only if, after giving effect to such issuance, amendment,
renewal or extension (i) at any time prior to the Stated Maturity Date the
sum of the total Credit Exposures at any time shall not exceed the Total
Commitment, and (ii) at any time on and after the Stated Maturity Date
(A) no Lender shall have any Credit Exposure other than its LC Exposure,
and (B) the total Credit Exposure of all Lenders (consistent of their
respective LC Exposures) shall not exceed 20% of the amount of the Total
Commitment immediately prior to the Stated Maturity Date.  Upon the issuance, amendment, renewal or
extension of each Letter of Credit, the Issuing Bank that has issued such
Letter of Credit will notify the Administrative Agent, who, in turn, will
notify the Lenders, of the amount and type of such Letter of Credit that is
issued, amended, renewed or extended pursuant to this Agreement.

 

(d)                                 Expiration Date.  Each Letter of Credit (other than the
Subsidiary Borrower Letter of Credit) shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) June 23,
2014.

 

(e)                                  Participations.  On the Effective Date with respect to the
Existing Letters of Credit and by the issuance of each other Letter of Credit
(or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing

 

29

 

Banks or the Lenders, the Issuing Bank that has
issued such Letter of Credit hereby grants to each Lender, and each Lender
hereby acquires from such Issuing Bank, a participation in such Letter of
Credit equal to such Lender’s Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit.  In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of such Issuing Bank, such Lender’s
Applicable Percentage of each LC Disbursement made by such Issuing Bank and not
reimbursed by the Company on the date due as provided in Section 2.06(f), or of any reimbursement
payment required to be refunded to the Company for any reason.  Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is irrevocable and unconditional and shall not be affected by
any circumstance whatsoever, including any amendment, renewal or extension of
any Letter of Credit or the occurrence and continuance of a Default or an Event
of Default or reduction or termination of the Total Commitment, and that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.

 

(f)                                    Reimbursement.  If any Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower for whose account
such Letter of Credit was issued shall reimburse such LC Disbursement by paying
to the Administrative Agent an amount equal to such LC Disbursement not later
than 12:00 noon, Charlotte, North Carolina, time, on (i) the Business Day
that such Borrower receives such notice, if such notice is received prior to
10:00 a.m., Charlotte, North Carolina, time, on the day of receipt, or (ii) the
Business Day immediately following the day that such Borrower receives such
notice, if such notice is not received prior to such time; provided
that if such Borrower fails to make such payment when due, then, upon demand by
such Issuing Bank sent to the Administrative Agent and each Lender before 10:00 a.m.,
Charlotte, North Carolina, time, each Lender shall pursuant to Section 2.07
on the same day make available to the Administrative Agent for delivery to such
Issuing Bank, immediately available funds in an amount equal to such Lender’s
Applicable Percentage of the amount of such payment by such Issuing Bank, and
the funding of such amount shall be treated as the funding of an ABR Loan by
such Lender to such Borrower. 
Notwithstanding anything herein or in any other Loan Document to the
contrary, the funding obligations of the Lenders set forth in this Section 2.06(f) shall
be binding regardless of whether or not a Default or an Event of Default shall
exist or the other conditions precedent in Article III are
satisfied at such time. If and to the extent any Lender fails to effect any
payment due from it under this Section 2.06(f) to the
Administrative Agent, then interest shall accrue on the obligation of such
Lender to make such payment from the date such payment became due to the date
such obligation is paid in full at a rate per annum equal to the Federal Funds
Effective Rate.  The failure of any
Lender to pay its Applicable Percentage of any payment under any Letter of
Credit shall not relieve any other Lender of its obligation hereunder to pay to
the Administrative Agent its Applicable Percentage of any payment under any
Letter of Credit on the date required, as specified above, but no Lender shall
be responsible for the failure of any other Lender to pay to the Administrative
Agent such other Lender’s Applicable Percentage of any such payment.

 

(g)                                 Obligations
Absolute.  The Company’s
obligation to reimburse (or in the case of the Subsidiary Borrower Letter of
Credit, the Subsidiary Borrower’s obligation to reimburse) LC Disbursements as provided in Section 2.06(f) shall, to the
extent permitted by law, be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance

 

30

 

with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of:

 

(i)                                     any lack of validity
or enforceability of any Letter of Credit, this Agreement or any other Loan
Document, or any term or provision herein or therein;

 

(ii)                                  any amendment
or waiver of or any consent to departure from all or any of the provisions of
any Letter of Credit, this Agreement or any other Loan Document;

 

(iii)                               the existence
of any claim, setoff, defense or other right that either Borrower, or any
Affiliate thereof or any other Person may at any time have against the
beneficiary under any Letter of Credit, any Issuing Bank, the Administrative
Agent or any Lender or any other Person, whether in connection with this
Agreement or any other related or unrelated agreement or transaction;

 

(iv)                              any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect;

 

(v)                                 payment by any
Issuing Bank under a Letter of Credit against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit; and

 

(vi)                              any other act
or omission to act or delay of any kind of the Issuing Banks, the Lenders, the
Administrative Agent or any other Person or any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section 2.06, constitute a legal or
equitable discharge of either Borrower’s obligations hereunder.

 

Neither
the Administrative Agent, the Lenders nor the Issuing Banks, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder, including any of the circumstances
specified in clauses (i) through (vi) above, as well as any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of any Issuing Bank; provided that
the foregoing shall not be construed to excuse any Issuing Bank from liability
to the Borrower for whose account such Letter of Credit was issued to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by each Borrower to the extent permitted by
applicable law) suffered by such Borrower that are caused by such Issuing Bank’s
failure to exercise the agreed standard of care (as set forth below) in
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. 
The parties hereto expressly agree that each Issuing Bank shall have
exercised the agreed standard of care in the absence of gross negligence,
willful misconduct or unlawful conduct on the part of such Issuing Bank.  Without limiting the generality of the
foregoing, it is understood that each Issuing Bank

 

31

 

may
accept documents that appear on their face to be in substantial compliance with
the terms of a Letter of Credit, without responsibility for further
investigation, regardless of any notice or information to the contrary, and may
make payment upon presentation of documents that appear on their face to be in
substantial compliance with the terms of such Letter of Credit; provided that each Issuing Bank shall have the right, in its
sole discretion, to decline to accept such documents and to make such payment
if such documents are not in strict compliance with the terms of such Letter of
Credit.

 

(h)                                 Disbursement
Procedures.  Each
Issuing Bank shall, promptly following its receipt thereof, examine all
documents purporting to represent a demand for payment under a Letter of Credit
issued by it.  Each Issuing Bank shall
promptly notify the Administrative Agent and the Borrower for whose account
such Letter of Credit was issued by telephone (confirmed by telecopy) or by
electronic communication (e-mail) of such demand for payment and whether such
Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such
notice shall not relieve either Borrower of its obligation to reimburse such
Issuing Bank and the Lenders with respect to any such LC Disbursement.

 

(i)                                     Interim
Interest.  If any
Issuing Bank shall make any LC Disbursement, then, unless the Company (or, in
the case of the Subsidiary Borrower Letter of Credit, the Subsidiary Borrower)
shall reimburse such LC Disbursement in full on the date specified in Section 2.06(f),
the unpaid amount thereof shall bear interest, for each day from the date such
LC Disbursement is made to the date that the Company (or, in the case of the
Subsidiary Borrower Letter of Credit, the Subsidiary Borrower) reimburses such
LC Disbursement (or all Lenders make the payments to the Administrative Agent
contemplated by Section 2.06(f) and treated pursuant to said Section as
constituting the funding of ABR Loans), at the rate per annum then applicable
to ABR Committed Loans.

 

(j)                                     Intentionally
Omitted.

 

(k)                                  Cash
Collateralization.  If (i) any
Event of Default shall occur and be continuing, on the Business Day that the
Company receives notice from the Administrative Agent or the Required Lenders
(or, if the maturity of the Loans has been accelerated, Lenders with LC
Exposure representing greater than 51% of the total LC Exposure) demanding the
deposit of cash collateral pursuant to this paragraph, (ii) a Change in
Control shall occur, or (iii) any Letter of Credit (A) remains
outstanding on the fifth Business Day prior to the Stated Maturity Date, or
(B) is issued during the period commencing with such fifth Business Day
and ending on the Business Day immediately preceding the Stated Maturity Date,
the Company shall deposit in an account with the Administrative Agent, in the
name of the Administrative Agent and for the benefit of the Lenders, an amount
in cash equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon (or in the case
of any issuance of a Letter of Credit referred to in the foregoing clause
(iii)(B), an amount in cash equal to the LC Exposure in respect of such Letter
of Credit); provided that the obligation
to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or notice of
any kind, upon (A) the occurrence of any event described in the foregoing
clauses (i), (ii) or (iii)(B) or (B) the occurrence of any Event
of Default with respect to either Borrower described in clause (g) or (h) of
Section 7.01.  Such deposit
shall be held by the Administrative Agent as collateral for the payment and
performance of the obligations of the

 

32

 

Borrowers under this Agreement and the other Loan
Documents.  The Administrative Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account.  Other
than any interest earned on the investment of such deposits (which investments
shall be made at the option and sole discretion of the Administrative Agent,
but only in investments rated at least AA (or equivalent) by at least one
nationally recognized rating agency, if such deposit has been made by reason of
a Change in Control having occurred, or any Letter of Credit remaining
outstanding on the Stated Maturity Date, and in any event at the Company’s risk
and expense) such deposits shall not bear interest.  Interest or profits, if any, on such
investments shall accumulate in such account and may, subject to the
immediately preceding sentence be reinvested from time to time.  Moneys in such account shall be applied by
the Administrative Agent to reimburse each Issuing Bank for LC Disbursements
for which it has not been reimbursed and, to the extent not so applied, shall
be held for the satisfaction of the reimbursement obligations of the Borrowers
for the LC Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Lenders with LC Exposure
representing greater than 51% of the total LC Exposure), be applied to satisfy
other obligations of the Borrowers under this Agreement and the other Loan
Documents.  If the Company is required to
provide an amount of cash collateral hereunder as a result of the occurrence of
an Event of Default, such amount (to the extent not applied as aforesaid) shall
be returned to the Company within three Business Days after all Events of
Default have been cured or waived.  If
the Company is required to provide an amount of cash collateral hereunder as a
result of any Letter of Credit remaining outstanding on the Stated Maturity
Date, then such cash collateral or portion thereof shall be released promptly
following: (i) the elimination of the applicable LC Exposure or (ii) the
Administrative Agent’s good faith determination that there exists excess cash
collateral.

 

SECTION 2.07                    Funding of
Borrowings.

 

(a)                                  Each Lender
shall make each Loan to be made by it hereunder on the proposed date thereof by
wire transfer of immediately available funds by 2:00 p.m., Charlotte,
North Carolina, time, to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as provided in Section 2.05.  The Company hereby irrevocably authorizes the
Administrative Agent to disburse the proceeds of each Borrowing requested
pursuant to Section 2.03 in immediately available funds by
crediting or wiring such proceeds to the deposit account of the Company
identified in the most recent Notice of Account Designation substantially in
the form of Exhibit 2.07 hereto (a Notice of Account Designation”) delivered by the Company to the Administrative Agent or
otherwise agreed upon by the Company and the Administrative Agent from time to
time; provided that ABR Committed Loans made
to finance the reimbursement of an LC Disbursement as provided in Sections 2.06(e) and (f) shall
be remitted by the Administrative Agent to the Issuing Bank that has made such
LC Disbursement.

 

(b)                                 Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing (or prior to 12:00 noon, Charlotte, North Carolina,
time, on such date in the case of an ABR Borrowing) that such Lender will not
make available to the Administrative Agent such Lender’s Applicable Percentage
of such Borrowing, the Administrative Agent may assume that such Lender has
made such Applicable Percentage available on such date in accordance with Section 2.07(a) and
may, in reliance upon such

 

33

 

assumption, make available to the Company a
corresponding amount.  In such event, if
a Lender has not in fact made its Applicable Percentage of the applicable
Borrowing available to the Administrative Agent, then the applicable Lender and
the Company severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount with interest thereon, for each day from the
date such amount is made available to the Company to the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the Federal Funds
Effective Rate or (ii) in the case of the Company, the interest rate
applicable to ABR Loans.  If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender’s Loan included in such Borrowing.

 

SECTION 2.08                    Interest
Elections.

 

(a)                                  Subject to Section 2.14,
each Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request.  Thereafter, subject to Section 2.14,
the Company may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect
Interest Periods therefor, all as
provided in this Section 2.08.  The Company may elect different options with
respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.  This Section 2.08
shall not apply to Swingline Borrowings, which may not be converted or
continued.

 

(b)                                 To make an
election pursuant to this Section 2.08, the Company shall notify
the Administrative Agent of such election by telephone or by electronic communication
(e-mail) receipt of which, in each case, is confirmed by the Administrative
Agent by the time that a Borrowing Request would be required under Section 2.03
if the Company were requesting a Borrowing of the Type resulting from such
election to be made on the effective date of such election.  Each such Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy or by
electronic communication (e-mail) to the Administrative Agent of a written
Interest Election Request in the form of Exhibit 2.08 (an “Interest Election Request”).

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

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

 

SECTION 2.09                    Termination and
Reduction of Commitments.

 

(a)                                  Unless
previously terminated, the Total Commitment shall terminate on the Maturity
Date.

 

(b)                                 The Company may
at any time terminate, or from time to time reduce, the Total Commitment, in
whole or in part; provided that (i) each
partial reduction of the Total Commitment shall be in an amount that is an
integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the
Company shall not terminate or reduce the Commitments if, after giving effect
to any concurrent prepayment of the Loans in accordance with Section 2.11,
the total Credit Exposures would exceed the Total Commitment.

 

(c)                                  The Company
shall notify the Administrative Agent of any election to terminate or reduce
the Total Commitment under Section 2.09(b) at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof.  Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Company pursuant
to this Section 2.09 shall be irrevocable; provided
that a notice of termination of the Total Commitment delivered by the Company
may state that such notice is conditioned upon the effectiveness of other credit
facilities or other event, in which case such notice may be revoked by the
Company (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied.  Any termination or reduction of the Total Commitment
shall be permanent.  Except as expressly
provided in Section 2.21, each reduction of the Total Commitment
shall be made ratably among the Lenders in accordance with their Applicable
Percentages.

 

35

 

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

 

SECTION 2.10                    Repayment of
Loans; Evidence of Debt.

 

(a)                                  The Company
hereby unconditionally promises to pay (i) to the Administrative Agent for
the account of each Lender the then unpaid principal amount of each Committed
Loan on the Maturity Date and (ii) to the Swingline Lender the then unpaid
principal amount of each Swingline Loan not later than seven days after the
date such Loan is made.  In addition, if
the total Credit Exposures exceeds the Total Commitment, the Company shall pay
to the Administrative Agent for the account of each Lender an aggregate
principal amount of Committed Loans or Swingline Loans sufficient to cause the
Credit Exposures not to exceed the Total Commitment; provided,
however, if the repayment of the outstanding Committed Loans and/or
Swingline Loans does not cause the total Credit Exposures, to be equal to or
less than the Total Commitment, the Company shall deposit in an account with
the Administrative Agent in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the amount by which the
total Credit Exposures exceeds the Total Commitment, which cash deposit shall
be held by the Administrative Agent for the payment of the Obligations of the
Borrowers under this Agreement and the other Loan Documents.  The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account other than any interest earned on the investment of such deposit (which
investments shall be made at the option and sole discretion of the
Administrative Agent, but only in investments rated at least AA (or equivalent)
by at least one nationally recognized rating agency, unless an Event of Default
shall have occurred and be continuing, and in any event at the Company’s risk
and expense).  Interest or profits, if
any, on such investments shall accumulate in such account.  Moneys in such account shall be applied by
the Administrative Agent to reimburse such Issuing Bank for LC Disbursements
for which it has not been reimbursed and, to the extent not so applied, shall
be held for the satisfaction of the reimbursement obligations of the Borrowers
for the LC Exposure at such time, or if the maturity of the Loans has been
accelerated (but subject to the consent of the Lenders with LC Exposure
representing greater than 51% of the total LC Exposure), be applied to satisfy
other obligations of the Borrowers under this Agreement and the other Loan
Documents.  At any time when the sum of
the total Credit Exposures does not exceed the Total Commitment and so long as
no Default under Section 7.01(b) or Event of Default shall
then exist, upon the request of the Company the amount of such deposit (to the
extent not applied as aforesaid) shall be returned to the Company within three
Business Days after receipt of such request.

 

(b)                                 On the date
that a Change in Control occurs, the Company shall repay the outstanding
principal amount of the Loans and all other amounts outstanding hereunder and
under the other Loan Documents and shall comply with the provisions of Section 2.06(k).

 

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

 

36

 

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

 

(e)                                  The entries
made in the accounts maintained pursuant to Section 2.10(c) or
(d) shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error or conflict therein shall not in any manner affect the obligation
of the Borrowers to repay the Loans in accordance with the terms of this
Agreement.

 

(f)                                    Any Lender may
request that Loans made by it be evidenced by a Committed Note.  In such event, the Company shall prepare,
execute and deliver to such Lender a Committed Note.  Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.05) be represented by one or more
promissory notes in such forms payable to the order of the payee named therein.

 

SECTION 2.11                    Prepayment of
Loans.

 

(a)                                  The Company
shall have the right at any time and from time to time to prepay any Borrowing
in whole or in part, subject to prior notice in accordance with Section 2.11(b).

 

(b)                                 The Company
shall notify the Administrative Agent (and, in the case of prepayment of a
Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy or
electronic communication (e-mail) in the form of Exhibit 2.11 (a “Notice of Prepayment”)) of
any prepayment hereunder (i) in the case of prepayment of a Eurodollar
Borrowing, not later than 11:00 a.m., Charlotte, North Carolina, time,
three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., Charlotte,
North Carolina, time, on the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 11:00 a.m., Charlotte,
North Carolina, time, on the date of prepayment.  Each such notice shall be irrevocable and
shall specify the prepayment date, Type and the principal amount of each
Borrowing or portion thereof to be prepaid; provided that,
if a notice of prepayment is given in connection with a conditional notice of
termination of the Total Commitment as contemplated by Section 2.09,
then such notice of prepayment may be revoked if such notice of termination of
the Total Commitment is revoked in accordance with Section 2.09.  Each partial prepayment shall be in an
aggregate amount not less than, and shall be an integral multiple of, the
amounts shown below with respect to the applicable Type of Loan or Borrowing:

 

37

 

	
  Type of

  Loan/Borrowing

  	
   

  	
  Integral

  Multiple of

  	
   

  	
  Minimum

  Aggregate Amount

  	
   

  
	
  Eurodollar Borrowing

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  ABR Borrowing

  	
   

  	
  1,000,000

  	
   

  	
  1,000,000

  	
   

  
	
  Swingline Loan

  	
   

  	
  100,000

  	
   

  	
  1,000,000

  	
   

  
								

 

Promptly
following receipt of any such notice relating to a Borrowing, the
Administrative Agent shall advise the Lenders of the contents thereof.  If the Company fails to designate the Type of
Borrowings to be prepaid, partial prepayments shall be applied first to the
outstanding Swingline Loans until the outstanding principal amount of all Swingline
Loans is repaid in full, then to the outstanding ABR Borrowings until the
outstanding principal amount of all ABR Borrowings is repaid in full, and then
to the outstanding principal amount of Eurodollar Borrowings.  Each partial prepayment of any Borrowing
shall be in an amount that would be permitted in the case of an advance of a
Borrowing of the same Type as provided
in Section 2.02.  Each
prepayment of a Borrowing shall be applied to the Loans included in the prepaid
Borrowing in accordance with the Lenders’ Applicable Percentages of such
Borrowing.  Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.13.

 

SECTION 2.12                    Fees.

 

(a)                                  The Company
agrees to pay to the Administrative Agent for the account of each Lender (other
than a Defaulting Lender) a facility fee (the “Facility Fee”), which
shall accrue at the applicable Facility Fee Rate on the daily amount of the
Commitment of such Lender, whether used or unused and when the Commitment has
terminated, on the outstanding Loans of such Lender, during the period from the
date of this Agreement to the later of (i) the date on which such
Commitment terminates and (ii) the date on which the Loans are paid in
full.  Accrued Facility Fees shall be
payable in arrears on the last Business Day of March, June, September and December of
each year and on the date on which the Commitments terminate and the date the
Loans are paid in full, commencing on the first such date to occur after the
date hereof.  All Facility Fees shall be
computed on the basis of a year of 365 or 366 days, as the case may be and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).

 

(b)                                 The Company
agrees to pay (i) to the Administrative Agent for the account of each
Lender (other than a Defaulting Lender) a participation fee with respect to its
participations in Letters of Credit which shall accrue at a rate per annum
equal to the Applicable Margin for Eurodollar Loans on the average daily amount
of such Lender’s LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender’s
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to each Issuing Bank a fronting fee, which shall accrue
at a rate per annum equal to .150% times the daily maximum amount available to
be drawn under each Letter of Credit issued, renewed or extended by such
Issuing Bank during the period from the Effective Date to the Stated Maturity
Date. The Company also agrees to pay each Issuing Bank’s standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of
Credit issued 

 

38

 

by it or the processing of drawings thereunder.  Accrued participation fees and fronting fees
shall be payable in arrears on the last Business Day of March, June, September and
December of each year, commencing on the first such date to occur after
the Effective Date; provided that
all such fees shall be payable on the date on which the Total Commitment
terminates and any such fees accruing after the date on which the Total
Commitment terminates shall be payable on demand.  Any other fees payable to any Issuing Bank
pursuant to this paragraph shall be payable within 10 days after demand.  All participation fees shall be computed on
the basis of a year of 365 or 366 days, as applicable, and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).

 

(c)                                  The Company
agrees to pay to the Administrative Agent and each Joint Book Manager, for
their own accounts, fees payable in the amounts and at the times specified in (i) 
that letter agreement dated May 20, 2010 among the Company, Wells Fargo
Securities, LLC, and Wells Fargo, and (ii) that letter agreement dated May 20,
2010 among the Company, Bank of America Securities LLC, Citi, J.P. Morgan
Securities Inc., Bank of America, N.A., Citibank, N.A., and JPMorgan Chase
Bank, N.A. (as from time to time amended, collectively, the “Fee Letters”).

 

(d)                                 All fees
payable hereunder shall be paid on the dates due, in immediately available
funds, to the Administrative Agent (or to each Issuing Bank, in the case of
fees payable to it) (for distribution, in the case of Facility Fees and
participation fees to the Lenders). 
Except as required by law, fees paid shall not be refundable under any
circumstance.

 

SECTION 2.13                    Interest.

 

(a)                                  The Loans
comprising each ABR Borrowing (excluding each Swingline Loan) shall bear
interest at a rate per annum equal to the sum of
Alternate Base Rate plus the
Applicable Margin.  Each Swingline Loan
shall (i) prior to the acquisition by any Lender of a participation
therein pursuant to Section 2.05(c), bear interest on each day at
the LIM Rate for such date plus an amount
equal to the Applicable Margin that would be applicable to LIBOR Borrowings on
such day, and (ii) upon and following the acquisition by any Lender of a
participation therein, be an ABR Loan and shall bear interest at the Alternate
Base Rate plus the Applicable Margin.

 

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

 

(c)                                  Notwithstanding
the foregoing, if any principal of or interest on any Loan or any fee or other
amount payable by the Company hereunder is not paid when due, whether at stated
maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to (i) in
the case of overdue principal of any Loan, 2% plus
the rate otherwise applicable to such Loan as provided
above or (ii) in the case of any other amount, 2% plus
the Alternate Base Rate.

 

(d)                                 Accrued
interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan; provided that (i) interest
accrued pursuant to Section 2.13(c) shall be payable on
demand, (ii) in the event of any repayment or prepayment of any Loan
(other than 

 

39

 

a prepayment of an ABR Committed Loan prior to the
end of the Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment,
(iii) in the event of any conversion of any Eurodollar Committed Loan
prior to the end of the current Interest Period therefor, accrued interest on
such Loan shall be payable on the effective date of such conversion and (iv) all
accrued interest shall be payable upon termination of the Total Commitment.

 

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

 

SECTION 2.14                    Alternate Rate
of Interest.  If prior to
the commencement of any Interest Period for a Eurodollar Borrowing:

 

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

 

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

 

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

 

SECTION 2.15                    Increased Costs.

 

(a)                                  If any Change
in Law shall:

 

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

 

(ii)                                  subject any
Lender or Issuing Bank to any tax of any kind whatsoever with respect to this
Agreement, any Letter of Credit, any participation in a Letter of Credit or any
Eurodollar Loan made by it, or change the basis of taxation of payments to such
Lender in respect thereof (except for Indemnified Taxes or Other Taxes

 

40

 

covered by Section 2.17
and the imposition of, or any change in the rate of, any Excluded Tax payable
by such Lender or Issuing Bank); or

 

(iii)                               impose on any
Lender or any Issuing Bank or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender or any Letter
of Credit or participation therein;

 

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

 

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

 

(c)                                  A certificate
of a Lender or any Issuing Bank setting forth the amount or amounts necessary
to compensate such Lender or such Issuing Bank or its holding company, as the
case may be, as specified in paragraph (a) or (b) of this Section 2.15
shall be delivered to the Company and shall be conclusive absent manifest
error.  The Company shall pay such Lender
or such Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 Business Days after receipt thereof.

 

(d)                                 Failure or
delay on the part of any Lender or any Issuing Bank to demand compensation
pursuant to this Section 2.15 shall not constitute a waiver of such
Lender’s or such Issuing Bank’s right to demand such compensation; provided that the Company shall not be required to
compensate a Lender or any Issuing Bank pursuant to this Section 2.15
for any increased costs or reductions incurred more than six months prior to
the date that such Lender or such Issuing Bank, as the case may be, notifies
the Company of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s or such Issuing Bank’s intention to claim compensation
therefor; provided  further that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the six-month period
referred to above shall be extended to include the period of retroactive effect
thereof.

 

41

 

SECTION 2.16                    Break Funding
Payments.  In the
event of (a) the payment of any principal of any Eurodollar Loan other
than on the last day of an Interest Period applicable thereto (including as a
result of an Event of Default), (b) the conversion of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto, (c) the
failure to borrow (unless such failure was caused by the failure of a Lender to
make such Loan), convert, continue or prepay any Eurodollar Loan, or the
failure to convert an ABR Loan to a Eurodollar Loan, on the date specified in
any notice delivered pursuant hereto (regardless of whether such notice is permitted
to be revocable under Section 2.09 and is revoked in accordance
herewith), or (d) the assignment of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto as a result of a request by
the Company pursuant to Section 2.19, then, in any such event, the
Company shall compensate each Lender for the loss, cost and expense
attributable to such event.  In the case
of a Eurodollar Loan, the loss to any Lender attributable to any such event shall
be deemed to include an amount determined by such Lender to be equal to the
excess, if any, of (i) the amount of interest that such Lender would pay
for a deposit equal to the principal amount of such Loan for the period from
the date of such payment, conversion, failure or assignment to the last day of
the then current Interest Period for such Loan (or, in the case of a failure to
borrow, convert or continue, the duration of the Interest Period that would
have resulted from such borrowing, conversion or continuation) if the interest
rate payable on such deposit were equal to the LIBOR Rate for such Interest
Period, over (ii) the amount of interest that such Lender would earn on
such principal amount for such period if such Lender were to invest such
principal amount for such period at the interest rate that would be bid by such
Lender (or an affiliate of such Lender) for dollar deposits from other banks in
the Eurodollar market at the commencement of such period.  A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this Section 2.16
shall be delivered to the Company and shall be conclusive absent manifest
error.  The Company shall pay such Lender
the amount shown as due on any such certificate within 10 Business Days after receipt
thereof.

 

SECTION 2.17                    Taxes.

 

(a)                                  Any and all
payments by or on account of any obligation of either Borrower hereunder shall
be made free and clear of and without deduction or withholding for any
Indemnified Taxes or Other Taxes; provided that
if either Borrower shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.17) the
Administrative Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) such Borrower shall make such deductions and (iii) such Borrower
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.

 

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

 

(c)                                  The Company
shall indemnify the Administrative Agent, each Lender and each Issuing Bank,
within 10 Business Days after written demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other
Taxes imposed or

 

42

 

asserted on or attributable to amounts payable under
this Section 2.17(c)) paid by the Administrative Agent, such Lender
or such Issuing Bank, as the case may be, and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority.  A certificate as to the amount of such
payment or liability delivered to the Company by a Lender or an Issuing Bank,
or by the Administrative Agent on its own behalf or on behalf of a Lender or an
Issuing Bank, shall be conclusive absent manifest error.

 

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

 

(e)                                  Any Foreign
Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which the Borrowers are located, or any
treaty to which such jurisdiction is a party, with respect to payments under
this Agreement shall deliver to the Company (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law or reasonably
requested by the Company, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate.  In
addition, any Lender, if requested by the Company, or the Administrative Agent
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Company or the Administrative Agent as will enable
the Company or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.  If a payment made to the Lender under any
Loan Document would be subject to U.S. Federal withholding Tax imposed by
FATCA, then if such Lender fails to comply with the applicable reporting
requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such Lender shall deliver to the
Withholding Agent (A) a certification signed by an authorized officer
thereof and (B) other documentation reasonably requested by the
Withholding Agent sufficient for the Withholding Agent to comply with its
obligations under FATCA and to determine whether such Lender has complied with
us applicable reporting requirements.

 

(f)                                    If the
Administrative Agent, a Lender, or any Issuing Bank determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by either Borrower or with respect to which
either Borrower has paid additional amounts pursuant to this Section 2.17,
it shall pay over such refund to such Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by such Borrower under
this Section 2.17 with respect to the Taxes and Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent, such Lender or such Issuing Bank, as the case may be, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided,
that the Borrowers, upon the request of the Administrative Agent, such Lender
or such Issuing Bank, agrees to repay the amount paid over to either Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent, such Lender or
Issuing Bank in the event the Administrative Agent, such Lender or Issuing Bank
is required to repay such refund to such Governmental Authority.  This Section shall not be construed to
require the

 

43

 

Administrative Agent, any Lender or Issuing Bank to
make available its tax returns (or any other information relating to its taxes
which it deems confidential) to the Borrowers or any other Person.

 

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

 

(a)                                  The Company
shall make or, in the case of the Subsidiary Borrower Letter of Credit, the
Subsidiary Borrower shall make, each payment required to be made by such
Borrower hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or under Section 2.15, 2.16 or 2.17,  or otherwise) prior to 12:00 noon, Charlotte,
North Carolina, time, on the date when due, in immediately available funds,
without set-off or counterclaim.  Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.  All such payments shall be made to the
Administrative Agent at its Principal Office, except payments to be made
directly to an Issuing Bank or the Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.15, 2.16, 2.17 and 10.03
shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such
extension.  All payments hereunder shall
be made in dollars.

 

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

 

(c)                                  If any Lender
shall, by exercising any right of set-off or counterclaim or otherwise, obtain
payment in respect of any principal of or interest on any of its Committed
Loans or participations in LC Disbursements or Swingline Loans resulting in
such Lender receiving payment of a greater proportion of the aggregate amount
of its Committed Loans and participations in LC Disbursements and Swingline Loans
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Committed Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Committed Loans and participations in LC Disbursements and
Swingline Loans; provided, that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to

 

44

 

apply to any payment made by either Borrower
pursuant to and in accordance with the express terms of this Agreement or any
payment obtained by a Lender as consideration for the assignment of or sale of
a participation in any of its Loans or participations in LC Disbursements or
Swingline Loans to any assignee or participant, other than to a Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply).  Each Borrower consents to
the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Company or the Subsidiary Borrower, as the case may
be, in the amount of such participation.

 

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

 

(e)                                  If any Lender
shall fail to make any payment required to be made by it pursuant to Section 2.05(c),
2.06(e), 2.07(b),  2.18(d) or 8.05, then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), (i) apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are
fully paid and/or (ii) hold any such amounts in a segregated account as
cash collateral for, and application to, any future funding obligations of such
Lender under such Sections; in the case of each of (i) and (ii) above,,
in any order as determined by the Administrative Agent in its discretion..

 

SECTION 2.19                    Mitigation
Obligations; Replacement of Lenders.

 

(a)                                  If any Lender
requests compensation under Section 2.15, or if either Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17,
as the case may be, in the future and (ii) would not subject such Lender
to any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender.  The Company hereby
agrees to pay all reasonable costs and expenses incurred by ay Lender in
connection with any such designation or assignment.

 

45

 

(b)                                 If (i) any
Lender requests compensation under Section 2.15, (ii) either
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
(iii) any Lender becomes a Defaulting Lender or (iv) any Lender has
failed to consent to a proposed amendment, waiver or other modification, or a
discharge or termination that, in each case, under Section 10.02
requires the consent of all the Lenders and with respect to which the Required
Lenders (or, in circumstances where Section 10.02 does not require
the consent of the Required Lenders, a majority in interest of the affected
Lenders) shall have granted their consent, then the Company may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in Section 10.05),
all its interests, rights and obligations under this Agreement to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided, that
except in the case of an assignment to an existing Lender (i) the Company
shall have received the prior written consent of the Administrative Agent (and,
if a Commitment is being assigned, the Issuing Banks and Swingline Lender),
which consent shall not be unreasonably withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans and participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Company (in the case of all other amounts) and (iii) in
the case of any such assignment resulting from a claim for compensation under Section 2.15
or payments required to be made pursuant to Section 2.17, such
assignment will result in a reduction in such compensation or payments.  A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Company to require
such assignment and delegation cease to apply.

 

SECTION 2.20                    Telephonic
Notices.  Without in any way limiting
the obligation of the Company or the Subsidiary Borrower to confirm in writing
any telephonic notice it is entitled to give under this Agreement or any other
Loan Document, the Administrative Agent may act without liability upon the
basis of a telephonic notice believed in good faith by the Administrative Agent
to be from the Company or the Subsidiary Borrower prior to receipt of written
confirmation.  In each such case, each of
the Company and the Subsidiary Borrower hereby waives the right to dispute the
Administrative Agent’s record of the terms of such telephonic notice.

 

SECTION 2.21                    Defaulting
Lenders.  Notwithstanding any provision
of this Agreement to the contrary, if any Lender becomes a Defaulting Lender,
then the following provisions shall apply for so long as such Lender is a
Defaulting Lender.

 

(a)                                  Facility Fees
shall cease to accrue on the unfunded portion of the Commitment of such
Defaulting Lender pursuant to Section 2.12 and such Defaulting
Lender shall not be entitled to receive any Facility Fee pursuant to Section 2.12(a);

 

(b)                                 If any
Swingline Exposure or LC Exposure exists at the time a Lender becomes a
Defaulting Lender then solely for purposes of computing the amount of the
obligation 

 

46

 

of each non-Defaulting Lender to acquire, refinance
or fund participations in Swingline Loans and Letters of Credit pursuant to Sections
2.05 and 2.06:

 

(i)                                     all or any part
of such Swingline Exposure and LC Exposure shall be reallocated among the
non-Defaulting Lenders in accordance with their respective Applicable
Percentages but only to the extent that (x) the sum of all non-Defaulting
Lenders’ Credit Exposures plus such Defaulting
Lender’s Swingline Exposure and LC Exposure does not exceed the total of all
non-Defaulting Lenders’ Commitments and (y) each non-Defaulting Lender’s
total Credit Exposure may not in any event exceed the Commitment of such
Non-Defaulting Lender as in effect at the time of such reallocation;

 

(ii)                                  if the
reallocation described in clause (i) above cannot, or can only partially,
be effected, the Company shall within one Business Day following notice by the
Administrative Agent (x) first, prepay such Swingline Exposure and (y) second,
cash collateralize such Defaulting Lender’s LC Exposure (after giving effect to
any partial reallocation pursuant to clause (i) above) in accordance with
the procedures set forth in Section 2.06(k) for so long as
such LC Exposure is outstanding;

 

(iii)                               if the Company
cash collateralizes any portion of such Defaulting Lender’s LC Exposure
pursuant to this Section 2.21(b), the Company shall not be required
to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with
respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized; if the LC Exposure of
the non-Defaulting Lenders is reallocated pursuant to this Section 2.21(b),
then the fees payable to the Lenders pursuant to Section 2.12(a) and
Section 2.12(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages with the balance of such fee, if
any, being retained by the Company for its own account or, to the extent any LC
Exposure shall then be outstanding, being payable to the Issuing Bank for its
own account to the extent such fee relates to the amount of such LC Exposure;
or

 

(iv)                              if any
Defaulting Lender’s LC Exposure is neither cash collateralized nor reallocated
pursuant to this Section 2.21(b), then, without prejudice to any
rights or remedies of any Issuing Bank or any Lender hereunder, all Facility
Fees that otherwise would have been payable to such Defaulting Lender (solely
with respect to the portion of such Defaulting Lender’s Commitment that was
utilized by such LC Exposure) and letter of credit fees payable under Section 2.12(b) with
respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing
Bank until such LC Exposure is cash collateralized and/or reallocated.

 

(c)                                  so long as any
Lender is a Defaulting Lender, the Swingline Lender shall not be required to
fund any Swingline Loan and the Issuing Banks shall not be required to issue,
amend or increase any Letter of Credit, unless it is satisfied that the related
exposure will be 100% covered by the Commitments of the non-Defaulting Lenders
and/or cash collateral will be provided by the Company in accordance with Section 2.21(b),
and participating interests in any such newly issued or increased Letter of
Credit or newly made Swingline Loan shall be allocated among non-Defaulting
Lenders in a manner consistent with Section 2.21(b)(i) (and
Defaulting Lenders shall not participate therein);

 

47

 

(d)                                 Such Defaulting
Lender’s right to approve or disapprove any amendment, waiver or consent with
respect to this Agreement or any other Loan Document shall be restricted as set
forth in Section 10.02;

 

(e)                                  any payment of
principal, interest, fees or other amounts received by the Administrative Agent
for the account of such Defaulting Lender (whether voluntary or mandatory, at
maturity, pursuant to Section 2.10 or 2.11, or otherwise),  shall be applied at such time or times as may be determined
by the Administrative Agent as follows:

 

(i)                                     first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder;

 

(ii)                                  second, to the
payment on a pro rata basis of any amounts owing by such Defaulting Lender to
an Issuing Bank hereunder;

 

(iii)                               third, if so
determined by the Administrative Agent or requested by an Issuing Bank, to be
held as cash collateral for future funding obligations of such Defaulting
Lender of any participation in any Letter of Credit;

 

(iv)                              fourth, as the
Company may request (so long as no Default or Event of Default exists), to the
funding of any Loan in respect of which such Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent;

 

(v)                                 fifth, if so
determined by the Administrative Agent and the Company, to be held in a
non-interest bearing deposit account and released in order to satisfy
obligations of such Defaulting Lender to fund Loans under this Agreement;

 

(vi)                              sixth, to the payment
of any amounts owing to the Lenders or an Issuing Bank as a result of any
judgment of a court of competent jurisdiction obtained by any Lender or Issuing
Bank against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement;

 

(vii)                           seventh, so long as no
Default or Event of Default exists, to the payment of any amounts owing to the
Company as a result of any judgment of a court of competent jurisdiction
obtained by the Company against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement; and

 

(viii)                        eighth, to such
Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if (x) such
payment is a payment of the principal amount of any Loans or LC Disbursements
in respect of which that Defaulting Lender has not fully funded its appropriate
share and (y) in the case of such Loans, such Loans were made at a time
when the conditions set forth in Section 3.02 were satisfied or
waived, such payment shall be applied solely to pay the Loans and LC
Disbursements of all non-Defaulting Lenders on a pro rata basis prior to being
applied to the payment of any Loans or LC Disbursements of such Defaulting
Lender.

 

48

 

Any
payments, prepayments or other amounts paid or payable to any Defaulting Lender
that are applied (or held) to pay amounts owed by such Defaulting Lender or to
post cash collateral pursuant to Section 2.21(b) shall be
deemed paid to and redirected by such Defaulting Lender, and each Lender
irrevocably consents to the foregoing. 
Notwithstanding the foregoing, neither Borrower shall be released from
any of its Obligations owed to the 

Defaulting Lender.

 

(f)                                    if any Lender
is a Defaulting Lender, then the Company may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to
be replaced in accordance with Section 2.19(b);

 

(g)                                 the Company may
terminate the unused amount of the Commitment of a Defaulting Lender upon not
less than three Business Days’ prior notice to the Administrative Agent (which
will promptly notify the Lenders thereof), provided, that
such termination will not be deemed to be a waiver or release of any claim
either Borrower, the Administrative Agent, any Issuing Bank or any Lender may
have against such Defaulting Lender.

 

In
the event that the Administrative Agent, the Company, the Issuing Banks and the
Swingline Lender each agrees that a Defaulting Lender has adequately remedied
all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure and LC Exposure of the Lenders shall be readjusted to
reflect the inclusion of such Defaulting Lender’s Commitment and on such date
such Defaulting Lender shall purchase at par such of the Loans of the other
Lenders (other than Swingline Loans) as the Administrative Agent shall
determine may be necessary in order for such Lender to hold such Loans in
accordance with its Applicable Percentage; provided, that
no adjustments will be made retroactively with respect to fees accrued or
payments made by or on behalf of the Company while such Lender was a Defaulting
Lender; and provided, further, that except to the
extent otherwise expressly agreed by the affected parties, no change hereunder
from Defaulting Lender to Lender will constitute a waiver or release of any
claim that the Borrowers, the Administrative Agent, the Issuing Banks or any
other Lender may have against such Defaulting Lender or cause such Defaulting
Lender to be a non-Defaulting Lender except as expressly set forth above.

 

ARTICLE III.

CONDITIONS PRECEDENT

 

SECTION 3.01                    Conditions
Precedent to the Initial Credit Event.  The obligations of the Lenders to make Loans
hereunder or the obligation of the Issuing Banks to issue Letters of Credit
hereunder shall not become effective until the date on which each of the
following conditions is satisfied or waived in accordance with Section 10.02:

 

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

 

(i)                                     this Agreement
executed by each party hereto;

 

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

 

49

 

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

 

(iv)                              letters from C
T Corporation System in form and substance satisfactory to the Administrative
Agent evidencing the obligation of CT Corporation System, Inc. to accept
service of process in the State of New York on behalf of each Borrower that is
not authorized to do business as a foreign corporation in the State of New
York;

 

(v)                                 a favorable,
signed opinion addressed to the Administrative Agent and the Lenders from
Bracewell & Giuliani LLP, counsel to the Borrowers, the General
Partner and the Delegate, given upon the express instruction of such Persons;

 

(vi)                              certificates of
appropriate public officials as to the existence, good standing and
qualification to do business as a foreign entity of each Borrower, the General
Partner and the Delegate in the States of Texas and Delaware; and

 

(vii) a
completed Notice of Account Designation executed by the Company.

 

(b)                                 The
Administrative Agent shall be reasonably satisfied that all required consents
and approvals of any Governmental Authority and any other Person in connection
with the transactions contemplated by this Section 3.01 shall have
been obtained and remain in effect (except where the failure to obtain such
approvals would not have a Material Adverse Effect).

 

(c)                                  The Company
shall have paid to Wells Fargo Securities, LLC, Banc of America Securities
LLC,  Citigroup Global Markets, Inc.,
J.P. Morgan Securities Inc., and the Administrative Agent all fees and expenses
pursuant to the Fee Letters agreed upon by such parties to be paid on or prior
to the Execution Date.

 

50

 

(d)                                 The Existing
Credit Agreement shall have been terminated and all amounts outstanding
thereunder paid in full.

 

(e)                                  The Company
shall have paid to Andrews Kurth LLP pursuant to Section 10.03 all
reasonable fees and disbursements invoiced to the Company on or prior to the
Execution Date.

 

SECTION 3.02                    Conditions
Precedent to All Credit Events.  Except with respect to Committed Loans made
by the Lenders pursuant to Section 2.06(f), the obligation of the
Lenders to make any Loans or to issue or extend any Letter of Credit under this
Agreement (including any Loan made or Letter of Credit issued (including for
the purpose of the Existing Letters of Credit) on the initial Borrowing Date)
is subject to the further conditions precedent that on the date of such Credit
Event:

 

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

 

(b)                                 The
representations and warranties set forth in Article IV (other than
the representation set forth in Section 4.07(c)) and in the other Loan
Documents shall be true and correct in all material respects as of, and as if
such representations and warranties were made on, the Borrowing Date of the
proposed Loan or Letter of Credit, as the case may be (unless such
representation and warranty expressly relates to an earlier date), and by the Company’s
delivery of a Borrowing Request, the Borrowers shall be deemed to have
certified to the Administrative Agent and the Lenders that such representations
and warranties are true and correct in all material respects;

 

(c)                                  The Company
shall have complied with the provisions of Section 2.03, Section 2.05
or Section 2.06, as the case may be; and

 

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

 

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

 

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

 

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

 

Each
Borrower makes for itself, and the Company makes for itself and the Subsidiary
Borrower, the following representations and warranties to the Administrative
Agent and the Lenders:

 

51

 

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

 

SECTION 4.02                    Authorization,
Validity, Etc.  Each
Borrower has all requisite partnership and other power and authority to execute
and deliver, and to incur and perform its obligations under this Agreement and
under the other Loan Documents to which it is a party and to make the
Borrowings hereunder, and all such actions have been duly authorized by all
necessary proceedings on its behalf. 
This Agreement and the other Loan Documents have been duly and validly
executed and delivered by or on behalf of each Borrower party thereto and
constitute valid and legally binding agreements of such Borrower enforceable
against such Borrower in accordance with the respective terms thereof, except (a) as
may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer, fraudulent conveyance or other similar laws relating to or
affecting the enforcement of creditors’ rights generally, and by general
principles of equity (including principles of good faith, reasonableness,
materiality and fair dealing) which may, among other things, limit the right to
obtain equitable remedies (regardless of whether considered in a proceeding in equity
or at law) and (b) as to the enforceability of provisions for
indemnification for violation of applicable securities laws, limitations
thereon arising as a matter of law or public policy.

 

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

 

SECTION 4.04                    No Breach or
Violation of Agreements or Restrictions, Etc.  Neither the execution and delivery of, nor
the incurrence and performance by either Borrower of its obligations under, the
Loan Documents to which it is a party, nor the extensions of credit
contemplated by the Loan Documents, will (a) breach or violate any
applicable Requirement of Law, (b) result in any breach or violation of
any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of its property or assets (other than Liens
created or contemplated by this Agreement) pursuant to the terms of, any
indenture, mortgage, deed of trust, agreement or other instrument to which it
or any of the Subsidiaries is party or by which any of its properties or
assets, or those of any of the Subsidiaries is bound or to which it is subject,
except for breaches, violations and defaults under clauses (a) and (b) that
neither individually nor in the aggregate could reasonably be expected to
result in a Material Adverse Effect, or (c) violate any provision of the
organic documents of such Borrower.

 

52

 

SECTION 4.05                    Properties.  Each of the Company and the Material
Subsidiaries has good title to, or valid leasehold or other interests in, all
its real and personal property material to its business free of all Liens
securing Indebtedness except for such Liens permitted under Section 6.01.

 

SECTION 4.06                    Litigation and
Environmental Matters.  (a) Except
as disclosed in the most recent Annual Report on Form 10-K delivered by
the Company to the Lenders, there is no action, suit or proceeding by or before
any arbitrator or Governmental Authority pending against or, to the knowledge
of the Company, threatened against or affecting the Company or any of the
Material Subsidiaries (i) as to which there is a reasonable possibility of
an adverse determination and that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect or (ii) that involves this
Agreement or the Transactions.

 

(b)                                 Except as
disclosed in the most recent Annual Report on Form 10-K delivered by the
Company to the Lenders, the associated liabilities and costs of the Company’s
compliance with Environmental Laws (including any capital or operating
expenditures required for clean-up or closure of properties currently or
previously owned, any capital or operating expenditures required to achieve or
maintain compliance with environmental protection standards imposed by
Environmental Laws or as a condition of any license, permit or contract, any
related constraints on operating activities, including any periodic or
permanent shutdown of any facility or reduction in the level of or change in
the nature of operations conducted thereat, any costs or liabilities in
connection with off-site disposal of wastes or Hazardous Materials, and any
actual or potential liabilities to third parties, including employees, and any
related costs and expenses) are unlikely to result in a Material Adverse
Effect.

 

SECTION 4.07                    Financial
Statements.

 

(a)                                  The
consolidated balance sheet of the Company and the Subsidiaries as at December 31,
2009 and the related consolidated statements of income, comprehensive income,
partners’ capital and cash flows of the Company and the Subsidiaries for the
fiscal year ended on said date, with the opinion thereon of
PricewaterhouseCoopers LLP and set forth in the Company’s 2009 Annual Report on
Form 10-K, as filed with the SEC, fairly present, in all material
respects, the consolidated financial position of the Company and the
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such fiscal year in accordance with GAAP.

 

(b)                                 The unaudited
consolidated balance sheets of the Company and the Subsidiaries as at March 31,
2010 and the related consolidated statements of income and cash flows of the
Company and the Subsidiaries for the three month period ended on such date and
set forth in the Company’s Quarterly Report on Form 10-Q for its fiscal
quarter then ended, as filed with the SEC, fairly present, in all material
respects, the consolidated financial position of the Company and the
Subsidiaries as at said date and their consolidated results of their operations
cash flows for the six-month period ended on said date (subject to the absence
of footnotes and to normal year-end and audit adjustments), in accordance with
GAAP applied on a basis consistent with the financial statements referred to in
Section 4.07(a).

 

53

 

(c)                                  Since the date
of the most recent Annual Report on Form 10-K delivered by the Company to
the Lenders, there has been no material adverse change in the business, assets,
liabilities or financial condition of the Company and the Subsidiaries, taken
as a whole.

 

SECTION 4.08                    Disclosure.  As of the Effective Date only, information
heretofore furnished by the Company to the Administrative Agent or any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated hereby, together with the Information Memorandum is, when taken as
a whole, true and accurate in all material respects on the date as of which
such information is stated or certified. 
The Information Memorandum and the reports, financial statements,
certificates or other written information furnished by or on behalf of the
Company to the Administrative Agent or any Lender in connection with the
syndication or negotiation of this Agreement or delivered hereunder (as modified
or supplemented by other information so furnished) on or prior to the Effective
Date, when taken as a whole, do not contain any material misstatement of fact
or omits to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading; provided that, with respect to any projected financial
information, the Company represents only that such information was prepared in
good faith based upon assumptions believed by the Company to be reasonable at
the time (it being recognized, however, that projections as to future events
are not to be viewed as facts and that the actual results during the period or
periods covered by any projects may materially different from the projected
results).

 

SECTION 4.09                    Investment
Company Act.  Neither
Borrower is, or is regulated as, an “investment
company,” as such term is defined in the Investment Company Act of
1940, as amended.

 

SECTION 4.10                    ERISA.  Each member of the ERISA Group has fulfilled
its obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan and is in compliance in all material respects with the
presently applicable provisions of ERISA and the Code with respect to each
Plan, except where the failure to so fulfill such obligations and such
noncompliance could individually, or together with all such failures to fulfill
such obligations and all such noncompliance could reasonably be expected to
result in a Material Adverse Effect.  No
member of the ERISA Group has (i) sought a waiver of the minimum funding
standard under Section 412 of the Code in respect of any Plan, (ii) failed
to make any contribution or payment to any Plan or Multiemployer Plan or in
respect of any Benefit Arrangement, or made any amendment to any Plan or
Benefit Arrangement, which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under ERISA or the Code or (iii) incurred
any liability under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA, which waiver, failure or liability
individually, or collectively with all such waivers, failures or liabilities,
could reasonably be expected to result in a Material Adverse Effect.

 

SECTION 4.11                    Tax Returns and
Payments.  The Company
and the Material Subsidiaries have caused to be filed all federal income tax
returns and other material tax returns, statements and reports (or obtained
extensions with respect thereto) which are required to be filed and have paid
or deposited or made adequate provision in accordance with GAAP for the payment
of all taxes (including estimated taxes shown on such returns, statements and
reports) 

 

54

 

which are shown to be due pursuant to such returns,
except for taxes being contested in good faith by appropriate proceedings for
which adequate reserves in accordance with GAAP have been created on the books
of the Company and the Subsidiaries and where the failure to pay such taxes (individually
or in the aggregate for the Company and the Subsidiaries) would not have a
Material Adverse Effect.

 

SECTION 4.12                    Compliance with
Laws and Agreements.  Each of the
Company and the Material Subsidiaries is in compliance with all laws,
regulations and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it
or its property, except where the failure to do so, individually or in the
aggregate for the Company and the Material Subsidiaries, could not reasonably
be expected to result in a Material Adverse Effect.

 

SECTION 4.13                    Purpose of
Loans.

 

(a)                                  All proceeds of
the Loans will be used for the purposes set forth in Section 5.07.

 

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

 

SECTION 4.14                    Foreign Assets
Control Regulations, etc.

 

(a)                                  Neither any
Letter of Credit nor any part of the proceeds of the Loans will violate the
Trading with the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating
thereto.

 

(b)                                 Neither the
Company nor any Subsidiary (i) is, or will become, a Person described or
designated in the Specially Designated Nationals and Blocked Persons List of
the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism
Order or (ii) engages or will engage in any dealings or transactions, or
is or will be otherwise associated, with any such Person.  The Company and the Subsidiaries are in
compliance, in all material respects, with the USA PATRIOT ACT.

 

(c)                                  Neither any
Letter of Credit nor any part of the proceeds of the Loans will be used,
directly or indirectly, for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in

 

55

 

 

an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases
that such Act applies to the Company or one of the Subsidiaries.

 

ARTICLE V.

AFFIRMATIVE COVENANTS

 

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

 

SECTION 5.01                    Financial
Statements and Other Information.  The Company will furnish to the
Administrative Agent:

 

(a)                                  within ten days
after the date in each fiscal year on which the Company is required to file its
Annual Report on Form 10-K with the SEC or, if earlier, 100 days after the
end of each fiscal year (i) such Annual Report, and (ii) its audited
consolidated balance sheet and the related consolidated statements of income,
comprehensive income, operations, partners’ capital and cash flows as of the
end of and for such year, setting forth in each case in comparative form the
figures as of the end of and for the previous fiscal year, all reported on by,
and accompanied by an opinion (without a “going
concern” or like qualification or exception and without any
qualification or exception as to the scope of their audit) of,
PricewaterhouseCoopers LLP, or other independent public accountants of
recognized national standing to the effect that such consolidated financial
statements present fairly in all material respects the financial position,
results of operations and cash flows of the Company and the Subsidiaries on a
consolidated basis in accordance with GAAP; provided,
however, that (x) the
Company shall be deemed to have furnished said Annual Report on Form 10-K
for purposes of clause (i) if it shall have timely made the same available
on “EDGAR” and/or on its home page on the worldwide web (at the date of
this Agreement located at http://www.kindermorgan.com) and complied with the
last grammatical paragraph of this Section 5.01 in respect thereof,
and (y) if said Annual Report contains such consolidated balance sheet and
such consolidated statements of results of income, comprehensive income,
partners’ capital and cash flows, and the report thereon of such independent
public accountants (without qualification or exception, and to the effect, as
specified above), the Company shall not be required to comply with clause (ii);

 

(b)                                 within five
days after each date in each fiscal year on which the Company is required to
file a Quarterly Report on Form 10-Q with the SEC or, if earlier, fifty
days after the end of each fiscal quarter (i) such Quarterly Report, and (ii) its
consolidated balance sheet and the related consolidated statements of income
and cash flows as of the end of and for the fiscal quarter to which said
Quarterly Report relates and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures as of the end and
for the corresponding period or periods of the previous fiscal year, all
certified by a Responsible Officer as presenting fairly in all material
respects the financial condition and results of operations of the Company and
the Subsidiaries on a consolidated basis in accordance with GAAP, subject to
normal year-end audit adjustments and the absence of footnotes; provided, however,
that (x) the Company shall be deemed to have furnished said Quarterly
Report for purposes of clause (i) if it 

 

56

 

shall have timely made the same available on “EDGAR”
and/or on its home page on the worldwide web (at the date of this
Agreement located at http://www.kindermorgan.com) and complied with the last
grammatical paragraph of this Section 5.01 in respect thereof, and (y) if
said Quarterly Report contains such consolidated balance sheet and consolidated
statements of income and cash flows, and such certifications, the Company shall
not be required to comply with clause (ii);

 

(c)                                  simultaneously
with the delivery of each set of financial statements referred to in clauses (a) and
(b) above, a certificate in substantially the form of Exhibit 5.01
signed by an authorized financial or accounting officer of the Company (i) setting
forth in reasonable detail the calculations required to establish whether the
Company was in compliance with the requirements of Section 6.06  on the date of such
financial statements, and (ii) stating whether any Default or Event of
Default exists on the date of such certificate and, if any Default or Event of
Default then exists, setting forth the details thereof and the action which the
Company is taking or proposes to take with respect thereto;

 

(d)                                 prompt written
notice of the following:

 

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

 

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

 

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

 

(e)                                  without
duplication of any other requirement of this Section 5.01, promptly
upon the mailing thereof to the public unitholders of the Company generally,
copies of all financial statements, reports and proxy statements so mailed;

 

(f)                                    promptly upon
the filing thereof with the SEC, copies of all registration statements (other
than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and reports on Form 8-K which the Company shall have filed
with the SEC;

 

(g)                                 if and when any
member of the ERISA Group (i) gives or is required to give notice to the
PBGC of any “reportable event”  (as defined in Section 4043 of ERISA)
(other than such event as to which the 30-day notice requirement is waived)
with respect to any Plan which would reasonably be expected to constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows that
the plan administrator of any Plan has given or is required to give notice of
any such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been terminated, a
copy of such notice; (iii) receives notice from the PBGC under Title IV of
ERISA of an intent to terminate, impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (iv) applies for a waiver of
the minimum funding standard under Section 412 of the Code, a copy of 

 

57

 

such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting officer of
the Company setting forth details as to such occurrence and action, if any,
which the Company or applicable member of the ERISA Group is required or
proposes to take; and

 

(h)                                 from time to
time such other information (other than projections) regarding the business,
affairs or financial condition of the Company or any Subsidiary as the Required
Lenders or the Administrative Agent may reasonably request.

 

Information
required to be delivered pursuant to Section 5.01(a), 5.01(b) or
5.01(f) above shall be deemed to have been delivered on the date on
which the Company provides notice to the Administrative Agent and the Lenders
that such information has been posted on “EDGAR” or the Company’s website or
another website identified in such notice and accessible by the Administrative
Agent and the Lenders without charge (and the Company hereby agrees to provide
such notice); provided that such
notice may be included in a certificate delivered pursuant to Section 5.01(c).

 

SECTION 5.02                    Existence,
Conduct of Business.  The Company
will, and will cause each of the Material Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business, except where the failure to
do so (individually or collectively with all such failures) could not
reasonably expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section 6.02.

 

SECTION 5.03                    Payment of
Obligations.  The Company
will, and will cause each of the Material Subsidiaries to, pay, before the same
shall become delinquent or in default, its Indebtedness and tax liabilities but
excluding Indebtedness (other than the Obligations) than is not in excess of
$75,000,000, except where (a) the validity or amount thereof is being
contested in good faith by appropriate proceedings, (b) the Company or
such Material Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP or (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.

 

SECTION 5.04                    Maintenance of
Properties; Insurance.

 

(a)                                  The Company
will keep, and will cause each Material Subsidiary to keep, all property
material to the conduct its business (taken as a whole) in good working order
and condition, ordinary wear and tear excepted, in the reasonable judgment of
the Company.

 

(b)                                 The Company
will maintain or cause to be maintained with, in the good faith judgment of the
Company, financially sound and reputable insurers, or through self-

 

58

 

insurance, insurance with respect to its properties
and business and the properties and businesses of the Subsidiaries against loss
or damage of the kinds customarily insured against by business enterprises of
established reputation engaged in the same or similar business and similarly
situated, of such types and in such amounts as are customarily carried under
similar circumstances by such other corporations. Such insurance may include
self-insurance or be subject to co-insurance, deductibility or similar clauses
which, in effect, result in self-insurance of certain losses, provided that such self-insurance is in
accord with the approved practices of business enterprises of established
reputation similarly situated and adequate insurance reserves are maintained in
connection with such self-insurance, and, notwithstanding the foregoing
provisions of this Section 5.04  the Company or any Subsidiary may effect
workers’ compensation or similar insurance in respect of operations in any
state or other jurisdiction any through an insurance fund operated by such
state or other jurisdiction or by causing to be maintained a system or systems
of self-insurance in accord with applicable laws.

 

SECTION 5.05                    Books and
Records; Inspection Rights.  The Company will, and will cause each of the
Material Subsidiaries to, keep, in accordance with GAAP, books of record and
account.  The Company will, and will
cause each of the Material Subsidiaries to, permit any representatives designated
by the Administrative Agent or any Lender, upon reasonable prior notice during
normal business hours, and, if the Company shall so request, in the presence of
a Responsible Officer or an appointee of a Responsible Officer, at the expense
of the Administrative Agent or such Lender (unless an Event of Default exists,
in which event the expense shall be that of the Company) to visit and inspect
its properties, to examine and make extracts from its books and records
(subject to compliance with confidentiality agreements and applicable copyright
law), and to discuss its affairs, finances and condition with its officers, all
at such times, and as often, as reasonably requested, but unless an Event of
Default exists, no more frequently than once during each calendar year.

 

SECTION 5.06                    Compliance with
Laws.  The Company will, and will
cause each of the Material Subsidiaries to, comply with all Requirements of Law
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

 

SECTION 5.07                    Use of Proceeds.  The proceeds of the Loans will be used only
for (a) refinancing (i) amounts outstanding under the Existing Credit
Agreement, (ii) other Indebtedness of the Company and the Subsidiaries,
and (iii) commercial paper, and (b) working capital and other general
partnership purposes.

 

ARTICLE VI.

NEGATIVE COVENANTS

 

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

 

59

 

SECTION 6.01                    Liens.  The Company will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien securing
Indebtedness on any property or asset now owned or hereafter acquired by it
except:

 

(a)                                  Capital Lease
Obligations;

 

(b)                                 Liens existing
on any property or asset prior to the acquisition thereof by the Company or any
Subsidiary or existing on any property or asset of any Person that becomes a
Subsidiary after the date hereof prior to the time such Person becomes a
Subsidiary and securing Indebtedness whose incurrence, for purposes of this
Agreement, by virtue of acquisition of such property or asset, or by virtue of
such Person so becoming a Subsidiary, would not result in a violation of Section 6.06;
provided that (i) such Lien
is not created in contemplation of or in connection with such acquisition or
such Person becoming a Subsidiary, as the case may be, (ii) such Lien
shall not apply to any other property or assets of the Company or any
Subsidiary, (iii) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be, and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof.  For purposes of this Section 6.01(b),
the Indebtedness so secured shall be deemed to have been incurred on the last
day of the fiscal quarter then most recently ended; and

 

(c)                                  Liens, not
otherwise permitted by the foregoing clauses (a) and (b), securing
Indebtedness in an aggregate amount not exceeding 15% of Consolidated Net
Tangible Assets.

 

SECTION 6.02                    Fundamental
Changes.  The Company will not, and will
not permit any Material Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all (or substantially all) of its assets, or all or
substantially all of the stock of or other equity interest in any of the
Material Subsidiaries (in each case, whether now owned or hereafter acquired),
or liquidate or dissolve, unless: (a) at the time thereof and immediately
after giving effect thereto no Event of Default or Default shall have occurred
and be continuing; and (b) the Company or such Material Subsidiary is the
surviving entity or the recipient of the assets so sold, transferred, leased or
otherwise disposed of in any such sale, transfer, lease or other disposition of
assets, provided, that no such
merger, consolidation, sale, transfer, lease or other disposition shall have
the effect of releasing the Company from any of the Obligations.  Notwithstanding the foregoing, this Section 6.02
shall not be deemed to prohibit, or to have prohibited, any sale, transfer,
lease or other disposition by the Company or any Material Subsidiary of any
assets (each, an “Asset Disposition”) if the sum of

 

(i)                                     the value, on
the Disposition Date with respect thereto, of the assets subject to such Asset
Disposition, plus

 

(ii)                                  the values, on
the respective Disposition Dates with respect thereto, of any and all other
assets subject to Asset Dispositions whose Disposition Dates occurred during
the same Test Period as the Disposition Date of the Asset Disposition referred
to in the preceding clause (i)

 

60

 

did
not exceed Consolidated EBITDA for such Test Period.  For purposes of the next preceding sentence

 

(x)                                   the term “Disposition
Date”, with respect to any Asset Disposition, shall mean the date of the
closing (or the first closing, if more than one) of such Asset Disposition; and

 

(y)                                 the term “Test Period”
shall mean, as at the Disposition Date with respect to any Asset Disposition
referred to in clause (i) of such sentence, the period consisting
of the four full fiscal quarters then most recently ended in respect of which
financial statements shall have been delivered pursuant to Section 5.01(a) or
(b), as the case may be.

 

SECTION 6.03                    Restricted
Payments.  The Company
will not declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment.

 

SECTION 6.04                    Transactions
with Affiliates.  The Company
will not, and will not permit any of the Subsidiaries to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) in the ordinary
course of business at prices and on terms and conditions not less favorable to
the Company or such Subsidiary than could be obtained on an arm’s-length basis
from unrelated third parties, as determined by the Conflicts Committee of the
Board of Directors of the Delegate, (b) transactions between or among the
Company, the Wholly-owned Subsidiaries and SFPP, L.P. not involving any other
Affiliate, (c) any payment which would constitute a Restricted Payment but
for the proviso to the definition of said term in Section 1.01, (d) loans
and advances by the Company to the General Partner to enable the General
Partner to pay general and administrative costs and expenses pursuant to the
partnership agreement of the Company and in accordance with past practices, (e) the
Company or any of its Subsidiaries from engaging in a transaction with an
Affiliate if such transaction has been approved by the Conflicts Committee of
the Board of Directors of the Delegate, and (f) any corporate sharing
agreements with respect to tax sharing and general overhead and administrative
matters.

 

SECTION 6.05                    Restrictive
Agreements.  The Company
will not, and will not permit any of the Material Subsidiaries to, directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon the ability
of any Material Subsidiary to pay dividends or other distributions with respect
to any shares of its Capital Stock or to make or repay loans (including
subordinate loans) or advances to the Company or any other such Material
Subsidiary, provided that the
foregoing shall not apply to (a) restrictions and conditions imposed by
law or by this Agreement, (b) customary restrictions and conditions
contained in agreements relating to the sale of all or substantially all of the
Capital Stock or assets of a Subsidiary pending such sale, provided such restrictions and conditions
apply only to the Subsidiary that is to be sold and such sale is permitted
hereunder, (c) restrictions and conditions existing on the date hereof
identified on Schedule 6.05 (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope of, any such
restriction or condition) and (d) restrictions or conditions contained in,
or existing by reason of, any agreement or instrument relating to any Subsidiary
at the time such Subsidiary 

 

61

 

was merged or consolidated with or into, or acquired
by, the Company or a Subsidiary or became a Subsidiary and not created in
contemplation thereof.

 

SECTION 6.06                    Ratio of
Consolidated Indebtedness to Consolidated EBITDA. The Company
will not at any time permit the ratio of Consolidated Indebtedness to
Consolidated EBITDA for the four full fiscal quarters most recently ended in
respect of which financial statements shall have been delivered pursuant to Section 5.01(a) or
(b), as the case may be, to exceed

 

(i)                                     5.50 to 1.0, in
the case of any such period ended on the last day of (A) a fiscal quarter
in which the Company makes any Specified Acquisition, or (B) the first or
second fiscal quarter next succeeding such a fiscal quarter, or

 

(ii)                                  5.00 to 1.0, in
the case of any such period ended on the last day of any other fiscal quarter.

 

For
purposes of this Section 6.06, if during any period the Company, or
any Subsidiary or any entity with respect to which the Company holds an equity
method investment of not less than 40% acquires any Person (or any interest in
any Person) or all or substantially all of the assets of any Person, the EBITDA
attributable to such assets or an amount equal to the percentage of ownership
of the Company in such Person times the EBITDA of such Person, for such period
determined on a pro  forma
basis may be included as Consolidated EBITDA for such period, if on the date of
such acquisition such Person, or the entity acquiring such assets, as the case
may be, is a Subsidiary or the Company. 
In addition, for purposes of this Section 6.06, Hybrid
Securities up to an aggregate amount of 15% of Total Capitalization shall be
excluded from Consolidated Indebtedness and Consolidated EBITDA may include, at
the Company’s option, any Material Project EBITDA Adjustments as provided in
the definition thereof.

 

ARTICLE VII.

EVENTS OF DEFAULT

 

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

 

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

 

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

 

(c)                                  any
representation or warranty made or, for purposes of Article III,
deemed made by or on behalf of either Borrower herein, at the direction of
either Borrower or by either Borrower in any other Loan Document or in any
document, certificate or financial statement delivered in connection with this
Agreement or any other Loan Document shall prove 

 

62

 

to have been incorrect in any material respect when
made or deemed made or reaffirmed, as the case may be;

 

(d)                                 either Borrower
shall fail to observe or perform any covenant, condition or agreement contained
in Section 5.01(d)(i), 5.02 (with respect to such Borrower’s
existence) or 5.07 or in Article VI;

 

(e)                                  either Borrower
shall fail to perform or observe any other term, covenant or agreement
contained in this Agreement (other than those specified in Section 7.01(a),
Section 7.01(b) or Section 7.01(d)) or any other
Loan Document to which it is a party and, in any event, such failure shall
remain unremedied for 30 calendar days after the earlier of (i) written
notice of such failure shall have been given to the Company by the Administrative
Agent or any Lender or, (ii) a Responsible Officer of either Borrower
becomes aware of such failure;

 

(f)                                    other than as
specified in Section 7.01(a) or (b), (i) the
Company or any Subsidiary fails to make (whether as primary obligor or as
guarantor or other surety) any payment of principal of, or interest or premium,
if any, on any item or items of Indebtedness (other than as specified in Section 7.01(a),
Section 7.01(b) or Article IX) or any payment in
respect of any Hedging Agreement, in each case when the same becomes due and
payable (whether by scheduled maturity, required payment or prepayment,
acceleration, demand or otherwise),beyond any period of grace provided with respect thereto (not to
exceed 30 days); provided that the aggregate
outstanding principal amount of all Indebtedness or payment obligations in
respect of all Hedging Agreements as to which such a payment default shall
occur and be continuing is equal to or exceeds $75,000,000, or (ii) the
Company or any Subsidiary fails to duly observe, perform or comply with any
agreement with any Person or any term or condition of any instrument, if such
failure, either individually or in the aggregate, shall have resulted in the
acceleration of the payment of Indebtedness with an aggregate face amount which
is equal to or exceeds $75,000,000; provided that
this Section 7.01(f) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness, so long as such Indebtedness is paid in
full when due;

 

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

 

(h)                                 the Company or
any Material Subsidiary shall (i) voluntarily commence any proceeding or
file any petition seeking liquidation, winding-up, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution
of, or fail to contest in a timely and appropriate manner, any proceeding or
petition described in Section 7.01(g), (iii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or any Material Subsidiary or
for a substantial part of its assets, (iv) file an answer 

 

63

 

admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for
the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;

 

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

 

(j)                                     (i) the
General Partner fails to make (whether as primary obligor or as guarantor or
other surety) any payment of principal of, or interest or premium, if any, on
any item or items of Indebtedness, when the same becomes due and payable
(whether by scheduled maturity, required payment or prepayment, acceleration,
demand or otherwise), beyond any period of grace provided with respect thereto (not to exceed 30 days); provided that the aggregate outstanding principal amount of
all such Indebtedness as to which such a payment default shall occur and be
continuing is equal to or exceeds $75,000,000, or (ii) the General Partner
fails to duly observe, perform or comply with any agreement with any Person or
any term or condition of any instrument, if such failure, individually or in
the aggregate, shall have resulted in the acceleration of the payment of
Indebtedness with an aggregate face amount which is equal to or exceeds
$75,000,000; provided that this Section 7.01(j) shall
not apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such Indebtedness so long
as such Indebtedness is paid in full when due;

 

(k)                                  one or more
judgments for the payment of money in an aggregate amount in excess of
$75,000,000 shall be rendered against the Company, any Subsidiary or any
combination thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of the Company or any Subsidiary to enforce any such judgment;

 

(l)                                     any member of
the ERISA Group shall fail to pay when due an amount which it shall have become
liable to pay under Title IV of ERISA; or notice of intent to terminate a Plan
shall be filed under Title IV of ERISA by any member of the ERISA Group, any
plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to
cause a trustee to be appointed to administer any Plan; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Plan must be terminated; or there shall occur a complete
or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which could cause one
or more members of the ERISA Group to incur a current payment obligation; and
in each of the foregoing instances such condition could reasonably be expected
to result in a Material Adverse Effect;

 

then,
and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, may, and upon the written
request of the Required Lenders shall, by written notice (including notice sent
by telecopy) to the Company (a “Notice
of Default”) take any or all of the following actions, without
prejudice to the rights of the Administrative Agent, any Lender or other holder
of any of the Obligations to enforce its claims against either Borrower (provided that, if an Event of Default specified in Section 7.01(g) or

 

64

 

Section 7.01(h) shall
occur with respect to the Company or any Subsidiary, the result of which would
occur upon the giving of a Notice of Default as specified in clauses (i), (ii) and
(v) below, shall occur automatically without the giving of any Notice of
Default):  (i) declare the Total
Commitment terminated, whereupon the Commitments of the Lenders shall forthwith
terminate immediately and any accrued facility fees shall forthwith become due
and payable without any other notice of any kind; (ii) declare the
principal of and any accrued interest in respect of all Loans, and all the
other Obligations owing hereunder and under the other Loan Documents, to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, notice of demand or of dishonor and nonpayment, protest, notice of
protest, notice of intent to accelerate, declaration or notice of acceleration
or any other notice of any kind, all of which are hereby waived by each
Borrower; (iii) exercise any rights or remedies under the Loan Documents; (iv) terminate
any Letter of Credit which may be terminated in accordance with its terms
(whether by the giving of written notice to the beneficiary or otherwise); and (v) direct
the Company to comply, and the Company agrees that upon receipt of such notice
(or upon the occurrence of an Event of Default specified in Section 7.01(g) or
Section 7.01(h)) it will comply, with the provisions of Section 2.06(k).

 

ARTICLE VIII.

THE ADMINISTRATIVE AGENT

 

SECTION 8.01                    Appointment,
Powers and Immunities.  Each
Lender hereby irrevocably appoints and authorizes the Administrative Agent to
act as its agent hereunder and under the other Loan Documents with such powers
as are specifically delegated to the Administrative Agent by the terms of this
Agreement and such other Loan Documents, together with such other powers as are
reasonably incidental thereto.  The
Administrative Agent (which term as used in this sentence and in Section 8.05
and the first sentence of Section 8.06 shall include reference to
its Affiliates and its Affiliates’ officers, directors, employees, attorneys,
accountants, experts and agents):  (a) shall
have no duties or responsibilities except those expressly set forth in the Loan
Documents, and shall not by reason of the Loan Documents be a trustee or
fiduciary for any Lender; (b) makes no representation or warranty to any
Lender and shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement, or in any
certificate or other document referred to or provided for in, or received by any of them under, this
Agreement, or for the value, validity, effectiveness, genuineness, execution,
legality, enforceability or sufficiency of this Agreement, any other Loan
Document or any other document referred to or provided for herein or therein or for any failure by either
Borrower or any other Person (other than the Administrative Agent) to perform any
of its obligations hereunder or thereunder or for the existence or value of, or
the perfection or priority of any Lien upon, any collateral security or the
financial or other condition of the Company, the Subsidiaries or any other
obligor or guarantor; (c) except pursuant to Section 8.07
shall not be required to initiate or conduct any litigation or collection
proceedings hereunder; and (d) shall not be responsible for any action
taken or omitted to be taken by it hereunder or under any other document or
instrument referred to or provided
for herein or in connection herewith including its own ordinary negligence,
except for its own gross negligence, willful misconduct or unlawful
conduct.  The Administrative Agent may
employ agents, accountants, attorneys and experts and shall not be responsible
for the negligence or misconduct of any such agents, accountants, attorneys or
experts selected by it in good faith or any action taken or omitted to be taken
in good faith by it in accordance with the advice of such agents,

 

65

 

 

accountants, attorneys or experts.  The Administrative Agent may deem and treat
the payee named in any Note as the holder thereof for all purposes hereof
unless and until a written notice of the assignment or transfer thereof
permitted hereunder shall have been filed with the Administrative Agent.  The Administrative Agent is authorized to
release any cash collateral that is permitted to be released pursuant to the
terms of this Agreement.

 

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

 

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

 

SECTION 8.04                    Rights as a
Lender.  With respect to its
Commitments and the Loans made by it and its issuance, or its participation in
the issuance, of each Letter of Credit, Wells Fargo (and any successor acting
as Administrative Agent) in its capacity as a Lender hereunder shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting as the Administrative Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity.  Wells Fargo (and any successor acting as
Administrative Agent) and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to and generally engage
in any kind of banking, trust or other business with either Borrower (and any
of its Affiliates) as if it were not acting as the Administrative Agent.  Wells Fargo and its Affiliates may accept
fees and other consideration from the Company or the Subsidiary Borrower for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.

 

SECTION 8.05                    INDEMNIFICATION.  THE LENDERS AGREE TO INDEMNIFY THE ADMINISTRATIVE
AGENT, THE SYNDICATION AGENTS AND THE DOCUMENTATION AGENT RATABLY IN ACCORDANCE
WITH THEIR APPLICABLE PERCENTAGES FOR THE INDEMNITY MATTERS AS DESCRIBED IN SECTION 10.03
TO THE EXTENT NOT INDEMNIFIED OR REIMBURSED BY THE COMPANY UNDER SECTION 10.03,
BUT WITHOUT LIMITING THE OBLIGATIONS OF THE COMPANY UNDER SAID SECTION 10.03
AND FOR ANY AND ALL OTHER LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND AND
NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED 

 

66

 

BY OR ASSERTED AGAINST THE
ADMINISTRATIVE AGENT, ANY SYNDICATION AGENT OR THE DOCUMENTATION AGENT IN ANY
WAY RELATING TO OR ARISING OUT OF:  (A) THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED BY OR REFERRED TO HEREIN OR
THE TRANSACTIONS CONTEMPLATED HEREBY, BUT EXCLUDING, UNLESS A DEFAULT OR AN
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, NORMAL ADMINISTRATIVE COSTS
AND EXPENSES INCIDENT TO THE PERFORMANCE OF ITS AGENCY DUTIES, IF ANY,
HEREUNDER OR (B) THE ENFORCEMENT OF ANY OF THE TERMS OF THIS AGREEMENT OR
OF ANY OTHER LOAN DOCUMENT; WHETHER OR NOT ANY OF THE FOREGOING SPECIFIED IN
THIS SECTION 8.05 ARISES FROM THE SOLE OR CONCURRENT NEGLIGENCE OF
THE ADMINISTRATIVE AGENT, ANY SYNDICATION AGENT OR THE DOCUMENTATION AGENT, AS
THE CASE MAY BE; PROVIDED
THAT NO LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY
ARISE FROM THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR UNLAWFUL CONDUCT OF THE
ADMINISTRATIVE AGENT, ANY SYNDICATION AGENT OR THE DOCUMENTATION AGENT.

 

SECTION 8.06                    Non-Reliance on
Agents and other Lenders.  Each
Lender acknowledges and agrees that it has, independently and without reliance
on the Administrative Agent, any Syndication Agent, the Documentation Agent or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and the Subsidiaries
and its decision to enter into this Agreement, and that it will, independently
and without reliance upon the Administrative Agent, any Syndication Agent, the
Documentation Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement.  Neither the Administrative Agent, any
Syndication Agent nor the Documentation Agent shall be required to keep itself
informed as to the performance or observance by either Borrower of this
Agreement, the other Loan Documents or any other document referred to or provided for herein or to inspect the
properties or books of either Borrower. 
Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, neither the Administrative Agent, any Syndication Agent nor the
Documentation Agent shall have any duty or responsibility to provide any Lender
with any credit or other information concerning the affairs, financial
condition or business of either Borrower (or any of its Affiliates) which may
come into the possession of the Administrative Agent, any Syndication Agent,
the Documentation Agent or any of its respective Affiliates.  In this regard, each Lender acknowledges that
Andrews Kurth L.L.P. is acting in this transaction as special counsel to the
Administrative Agent only.  Each Lender
will consult with its own legal counsel to the extent that it deems necessary
in connection with this Agreement and other Loan Documents and the matters
contemplated herein and therein.

 

SECTION 8.07                    Action by
Administrative Agent.  Except for
action or other matters expressly required of the Administrative Agent
hereunder, the Administrative Agent shall in all cases be fully justified in
failing or refusing to act hereunder unless it shall (a) receive written
instructions from the Required Lenders (or all of the Lenders as expressly
required by Section 10.02) specifying the action to be taken, and (b) be
indemnified to its satisfaction by the 

 

67

 

Lenders against any and all liability and expenses
which may be incurred by it by reason of taking or continuing to take any such
action.  The instructions of the Required
Lenders (or all of the Lenders as expressly required by Section 10.02)
and any action taken or failure to act pursuant thereto by the Administrative
Agent shall be binding on all of the Lenders. 
If a Default or Event of Default has occurred and is continuing, the
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be directed by the Required Lenders (or all of the
Lenders as required by Section 10.02) in the written instructions
(with indemnities) described in this Section 8.07; provided that, unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.  In no
event, however, shall the Administrative Agent be required to take any action
which exposes the Administrative Agent to personal liability or which is
contrary to this Agreement or applicable law.

 

SECTION 8.08                    Resignation or
Removal of Administrative Agent.  Subject to the appointment and acceptance of
a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving notice thereof
to the Lenders and the Company, and the Administrative Agent may be removed at
any time with or without cause by the Required Lenders.  Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Administrative
Agent (so long as no Default or Event of Default exists) with the prior written
consent of the Company (which consent will not unreasonably be withheld).  If no successor Administrative Agent shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent’s
giving of notice of resignation or the Required Lenders’ removal of the
retiring Administrative Agent, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent (so long as no
Default or Event of Default exists) with the prior written consent of the
Company (which consent will not unreasonably be withheld).  Upon the acceptance of such appointment
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder.  After any retiring
Administrative Agent’s resignation or removal hereunder as Administrative
Agent, the provisions of this Article VIII and Section 10.03
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent.

 

SECTION 8.09                    Duties of
Syndication Agents and Documentation Agent. Notwithstanding the
indemnity of the Syndication Agents and the Documentation Agent contained in Section 8.05
and in Section 9.03, nothing contained in this Agreement shall be
construed to impose any obligation or duty whatsoever on any Person named on
the cover of this Agreement or elsewhere in this Agreement as a Syndication
Agent, the Documentation Agent, a Joint Lead Arranger or a Joint Book Manager,
other than those applicable to all Lenders as such.

 

SECTION 8.10                    Trust Indenture
Act.  In the event that Wells Fargo
or any of its Affiliates shall be or become an indenture trustee under the
Trust Indenture Act of 1939 (as amended, the “Trust Indenture Act”) in
respect of any securities issued or guaranteed by either Borrower, the parties
hereto acknowledge and agree that any payment or property received in 

 

68

 

satisfaction of or in respect of any Obligation of
such Borrower hereunder or under any other Loan Document by or on behalf of
Wells Fargo in its capacity as the Administrative Agent for the benefit of any
Lender or any Issuing Bank under any Loan Document (other than Wells Fargo or
an Affiliate of Wells Fargo) and which is applied in accordance with the Loan
Documents shall be deemed to be exempt from the requirements of
Section 311 of the Trust Indenture Act pursuant to Section 311(b)(3) of
the Trust Indenture Act.

 

ARTICLE IX.

GUARANTY

 

SECTION 9.01                    Guaranty.

 

(a)                                  In
consideration of, and in order to induce the Administrative Agent and the
Lenders to enter into this Agreement and to induce the Lenders to make the
Loans and the Issuing Bank thereof to maintain the Subsidiary Borrower Letter
of Credit and the other Existing Letters of Credit and the Issuing Banks to
issue new Letters of Credit hereunder, the Company hereby absolutely,
unconditionally and irrevocably guarantees the punctual payment and performance
when due, whether at stated maturity, by acceleration or otherwise, of the Obligations
of the Subsidiary Borrower, and all covenants of the Subsidiary Borrower, now
or hereafter existing under this Agreement and the other Loan Documents to
which the Subsidiary Borrower is a party, whether for principal, interest
(including interest accruing or becoming owing both prior to and subsequent to
the commencement of any proceeding against or with respect to the Subsidiary
Borrower under any chapter of Title 11 of the United States Code, as now or
hereafter in effect, or any successor thereto (the “Bankruptcy Code”)), fees, commissions, expenses (including
reasonable attorneys’ fees and expenses) or otherwise (all such obligations
being the “Guaranteed Obligations”).  The Company agrees to pay any and all
expenses incurred by each Lender and the Administrative Agent in enforcing this
Guaranty against the Company.

 

(b)                                 This Guaranty
is an absolute, unconditional, present and continuing guaranty of payment and
not of collectibility and is in no way conditioned upon any attempt to collect
from the Subsidiary Borrower or any other action, occurrence or circumstance
whatsoever.

 

SECTION 9.02                    Continuing
Guaranty.

 

(a)                                  The Company
guarantees that the Guaranteed Obligations will be paid strictly in accordance
with the terms of this Agreement and the other Loan Documents.  The Company agrees that, to the maximum
extent permitted by applicable law, the Guaranteed Obligations and Loan
Documents to which the Subsidiary Borrower is a party may be extended or
renewed, and indebtedness thereunder repaid and reborrowed in whole or in part,
without notice to or assent by the Company, and that it will remain bound upon
this Guaranty notwithstanding any extension, renewal or other alteration of any
Guaranteed Obligations or such Loan Documents, or any repayment and reborrowing
of Loans.  To the maximum extent
permitted by applicable law, except as otherwise expressly provided in this
Agreement or any other Loan Document to which the Company is a party, the
obligations of the Company under 

 

69

 

this Guaranty shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms
hereof under any circumstances whatsoever, including:

 

(i)                                     any
modification, amendment, supplement, renewal, extension for any period,
increase, decrease, alteration or rearrangement of all or any part of the
Guaranteed Obligations, or of this Agreement or any other Loan Document
executed in connection herewith, or any contract or understanding among the Company,
the Subsidiary Borrower, the Administrative Agent and/or the Lenders, or any
other Person, pertaining to the Guaranteed Obligations;

 

(ii)                                  any adjustment,
indulgence, forbearance or compromise that might be granted or given by the
Lenders to the Company or any other Person liable on the Guaranteed
Obligations;

 

(iii)                               the insolvency,
bankruptcy, arrangement, adjustment, composition, liquidation, disability,
dissolution or lack of power of the Company, the Subsidiary Borrower or any
other Person at any time liable for the payment of all or part of the
Guaranteed Obligations; or any dissolution of the Company, the Subsidiary
Borrower or any sale, lease or transfer of any or all of the assets of the
Company or the Subsidiary Borrower, or any changes in the shareholders of the
Company, the Subsidiary Borrower, or any reorganization of the Company or the
Subsidiary Borrower;

 

(iv)                              the invalidity,
illegality or unenforceability of all or any part of the Guaranteed
Obligations, or any document or agreement executed in connection with the
Guaranteed Obligations, for any reason whatsoever, including the fact that (A) the
Guaranteed Obligations, or any part thereof, exceeds the amount permitted by
law, (B) the act of creating the Guaranteed Obligations or any part
thereof is ultra vires,
(C) the officers or representatives executing the documents or otherwise
creating the Guaranteed Obligations acted in excess of their authority, (D) the
Guaranteed Obligations or any part thereof violate applicable usury laws, (E) the
Company or the Subsidiary Borrower has valid defenses, claims and offsets
(whether at law or in equity, by agreement or by statute) which render the
Guaranteed Obligations wholly or partially uncollectible from the Company or
the Subsidiary Borrower, (F) the creation, performance or repayment of the
Guaranteed Obligations (or execution, delivery and performance of any document
or instrument representing part of the Guaranteed Obligations or executed in
connection with the Guaranteed Obligations, or given to secure the repayment of
the Guaranteed Obligations) is illegal, uncollectible, legally impossible or
unenforceable, or (G) this Agreement, any other Loan Document, or any
other document or instrument pertaining to the Guaranteed Obligations has been
forged or otherwise is irregular or not genuine or authentic;

 

(v)                                 any full or
partial release of the liability of the Company or the Subsidiary Borrower on
the Guaranteed Obligations or any part thereof, or any other Person now or
hereafter liable, whether directly or indirectly, jointly, severally, or
jointly and severally, to pay, perform, guarantee or assure the payment of the
Guaranteed Obligations or any part thereof; it being recognized, acknowledged
and agreed by the Company that the Company may be required to pay the
Guaranteed Obligations in full 

 

70

 

without assistance or
support of any other Person, and the Company has not been induced to enter into
this Guaranty on the basis of a contemplation, belief, understanding or
agreement that any other Person will be liable to perform the Guaranteed
Obligations, or that the Administrative Agent or any Lender will look to any
other Person to perform the Guaranteed Obligations;

 

(vi)                              the taking or
accepting of any other security, collateral or guaranty, or other assurance of
payment, for all or any part of the Guaranteed Obligations;

 

(vii)                           any release,
surrender, exchange, subordination, deterioration, waste, loss or impairment of
any collateral, property or security, at any time existing in connection with,
or assuring or securing payment of, all or any part of the Guaranteed
Obligations;

 

(viii)                        the failure of
the Administrative Agent, the Lenders or any other Person to exercise diligence
or reasonable care in the preservation, protection, enforcement, sale or other
handling or treatment of all or any part of such collateral, property or
security;

 

(ix)                                the fact that
any collateral, security or Lien contemplated or intended to be given, created
or granted as security for the repayment of the Guaranteed Obligations shall
not be properly perfected or created, or shall prove to be unenforceable or
subordinate to any other Lien; it being recognized and agreed by the Company
that the Company is not entering into this Guaranty in reliance on, or in
contemplation of the benefits of, the validity, enforceability, collectibility
or value of any of the collateral for the Guaranteed Obligations;

 

(x)                                   any payment by
the Subsidiary Borrower or the Company to the Administrative Agent or any
Lender is held to constitute a preference under bankruptcy laws, or for any
other reason any of the Administrative Agent or any Lender is required to
refund such payment or pay such amount to the Subsidiary Borrower or any other
Person; or

 

(xi)                                any other
action taken or omitted to be taken with respect to this Agreement, any other
Loan Document, the Guaranteed Obligations, or any security and collateral
therefor, whether or not such action or omission prejudices the Company or
increases the likelihood that the Company will be required to pay the
Guaranteed Obligations pursuant to the terms hereof;

 

it
being the unambiguous and unequivocal intention of the Company that the Company
shall be obligated to pay the Guaranteed Obligations when due, notwithstanding
any occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, except for the full and final payment and satisfaction of the
Guaranteed Obligations after the termination of the Commitments of all Lenders
and the expiration or termination of the Subsidiary Borrower Letter of Credit.

 

71

 

(b)                                 The Company
further agrees that, to the fullest extent permitted by law, as between the
Company, on the one hand, and the Lenders and the Administrative Agent, on the
other hand, (i) the maturity of the Guaranteed Obligations may be
accelerated as provided in Article VII
for the purposes of this Guaranty, notwithstanding any stay, injunction or
other prohibition preventing such acceleration of the Guaranteed Obligations,
and (ii) in the event of any acceleration of the Guaranteed Obligations as
provided in Article VII,
the Guaranteed Obligations (whether or not due and payable) shall forthwith
become due and payable by the Company for the purpose of this Guaranty.

 

SECTION 9.03                    Effect of
Debtor Relief Laws.  If after
receipt of any payment of all or any part of the Guaranteed Obligations, the
Administrative Agent, any Issuing Bank or any Lender is for any reason
compelled to surrender or voluntarily surrenders, such payment to any Person (a) because
such payment is or may be avoided, invalidated, declared fraudulent, set aside,
determined to be void or voidable as a preference, fraudulent conveyance,
fraudulent transfer, impermissible set-off or a diversion of trust funds or (b) for
any other reason, including (i) any judgment, decree or order of any court
or administrative body having jurisdiction over the Administrative Agent, any
Issuing Bank, any Lender or any of their respective properties or (ii) any
settlement or compromise of any such claim effected by the Administrative
Agent, any Issuing Bank or any Lender with any such claimant (including the Subsidiary
Borrower), then the Guaranteed Obligations or part thereof intended to be
satisfied shall be reinstated and continue, and this Guaranty shall continue in
full force as if such payment had not been received, notwithstanding any
revocation thereof or the cancellation of any instrument evidencing any of the
Guaranteed Obligations or otherwise; and the Company shall be liable to pay the
Administrative Agent, the Issuing Banks and the Lenders, and hereby does
indemnify the Administrative Agent, the Issuing Banks and the Lenders and holds
them harmless for the amount of such payment so surrendered and all reasonable
expenses (including reasonable attorneys’ fees, court costs and expenses
attributable thereto) incurred by the Administrative Agent, any Issuing Bank or
any Lender in the defense of any claim made against it that any payment
received by the Administrative Agent, any Issuing Bank or any Lender in respect
of all or part of the Guaranteed Obligations must be surrendered.  The provisions of this paragraph shall
survive the termination of this Guaranty, and any satisfaction and discharge of
the Subsidiary Borrower by virtue of any payment, court order or any Federal or
state law.

 

SECTION 9.04                    Waiver.  The Company hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this Guaranty and waives presentment, demand for
payment, notice of intent to accelerate, notice of dishonor or nonpayment and
any requirement that the Administrative Agent or any Lender institute suit,
collection proceedings or take any other action to collect the Guaranteed
Obligations, including any requirement that the Administrative Agent or any
Lender exhaust any right or take any action against the Subsidiary Borrower or
any other Person or any collateral (it being the intention of the
Administrative Agent, the Lenders and the Company that this Guaranty is to be a
guaranty of payment and not of collection). 
It shall not be necessary for the Administrative Agent or any Lender, in
order to enforce any payment by the Company hereunder, to institute suit or
exhaust its rights and remedies against the Subsidiary Borrower or any other
Person, including others liable to pay any Guaranteed Obligations, or to enforce
its rights against any security ever given to secure payment thereof.  The Company hereby expressly waives to the
maximum extent permitted by applicable law each and every right to which it may

 

72

 

be entitled by virtue of the suretyship laws of the
State of New York or any other state in which it may be located, including any
and all rights it may have pursuant to Rule 31, Texas Rules of Civil
Procedure, Section 17.001 of the Texas Civil Practice and Remedies Code
and Chapter 34 of the Texas Business and Commerce Code.

 

SECTION 9.05                    Full Force and
Effect.  This Guaranty is a continuing
guaranty and shall remain in full force and effect until all of the Guaranteed
Obligations under this Agreement and the other Loan Documents to which the
Subsidiary Borrower is a party and all other amounts payable under this
Guaranty have been paid in full (after the termination of the Commitments of
the Lenders and the termination or expiration of the Subsidiary Borrower Letter
of Credit).  All rights, remedies and
powers provided in this
Guaranty may be exercised, and all waivers contained in this Guaranty may be
enforced, only to the extent that the exercise or enforcement thereof does not
violate any provisions of applicable law which may not be waived.

 

ARTICLE X.

MISCELLANEOUS

 

SECTION 10.01              Notices, Etc.

 

(a)                                  The
Administrative Agent, any Issuing Bank, any Lender or the holder of any of the
Obligations, giving consent or notice or making any request of either Borrower provided for hereunder, shall notify
each Lender (in the case of the Administrative Agent and/or any Issuing Bank)
and the Administrative Agent (in the case of a Lender or an Issuing Bank)
thereof.  In the event that the holder of
any Note or any of the Obligations (including any Lender) shall transfer such
Note or Obligations, it shall promptly so advise the Administrative Agent which
shall be entitled to assume conclusively that no transfer of any Note or any of
the Obligations has been made by any holder (including any Lender) unless and
until the Administrative Agent receives written notice to the contrary.

 

(b)                                 Except with
respect to notices and other communications expressly permitted to be given by
telephone, all notices, consents, requests, approvals, demands and other
communications (collectively “Communications”)
provided for herein shall be in
writing (including facsimile Communications) and mailed, telecopied or
delivered:

 

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

 

500 Dallas, Suite 1000

Houston, Texas 77002

Attention:         C. Park Shaper

Telecopy No.:  (713) 369-9499;

 

(ii)                                  if to the Subsidiary
Borrower, to it in care of the Company;

 

73

 

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

 

c/o Wells Fargo Bank

MAC
D1114-029

1525 West W. T. Harris Boulevard

Charlotte, North Carolina 28262

 

Attention:  Agency Services

 

Telecopy No.:  (704) 509-2782;

 

(iv)                              if to the Swingline Lender,
to it at:

 

c/o Wells Fargo
Bank

MAC D1114-029

1525 West W. T. Harris Boulevard

Charlotte, North Carolina 28262

 

Attention:  Agency Services

 

Telecopy No.:  (704) 509-2782; and

 

(v)                                 if to any other
Lender or to any Issuing Bank, to it at its address (or telecopy number) set
forth in the Administrative Questionnaire delivered by such Person to the
Administrative Agent or in the Assignment and Acceptance executed by such
Person;

 

or,
in the case of any party hereto, such other address or telecopy number as such
party may hereafter specify for such purpose by notice to the other parties.

 

(c)                                  Communications
to the Lenders hereunder may be delivered or furnished by electronic
communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by
the Administrative Agent and the applicable Lender.  The Administrative Agent or the Company may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures
may be limited to particular notices or communications.

 

(d)                                 Any party
hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.  All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt.

 

SECTION 10.02              Waivers; Amendments.

 

(a)                                  No failure or
delay by the Administrative Agent, any Issuing Bank or any Lender in
exercising, and no course of dealing with respect to, any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or 

 

74

 

any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof
or the exercise of any other right or power. No notice to or demand on either
Borrower in any case shall entitle such Borrower to any other or further notice
or demand in similar or other circumstances. 
No waiver of any provision of this Agreement or consent to any departure
therefrom shall in any event be effective unless the same shall be permitted by
Section 10.02(b), and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which
given.  Without limiting the generality
of the foregoing, the making of a Loan or issuance of a Letter of Credit shall
not be construed as a waiver of any Default or Event of Default, regardless of
whether the Administrative Agent, any Lender or any Issuing Bank may have had
notice or knowledge of such Default at the time.

 

(b)                                 No provision of
this Agreement or any other Loan Document provision may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Borrowers and the Required Lenders or by the Borrowers and the
Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the
Commitment of any Lender without the written consent of such Lender, (ii) reduce
the principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder or under the Fee Letter,
without the written consent of each Lender affected thereby, (iii) postpone
the scheduled date of payment of the principal amount of any Loan or LC
Disbursement (including any payment required by Section 2.10(b)),
or any interest thereon, or any fees payable hereunder or under the Fee Letter,
or reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Section 2.18(b) or
(c) in a manner that would alter the pro rata sharing of payments
required thereby, without the written consent of each Lender, (v) amend Section 2.21
without the consent of the Administrative Agent, the Swingline Lender and the
Issuing Banks in addition to the consent of the Required Lenders or (vi) release
the Company from its guaranty contained in Article IX, change any
of the provisions of this Section 10.02(b), or the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; provided
further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent or any Issuing Bank hereunder without the prior written
consent of the Administrative Agent or such Issuing Bank, as the case may
be.  Except as provided herein, during such
period as a Lender is a Defaulting Lender, to the fullest extent permitted by
applicable law, such Lender will not be entitled to vote in respect of
amendments and waivers hereunder and the Commitment and the outstanding Loans
or other extensions of credit of such Lender hereunder will not be taken into
account in determining whether the Required Lenders or all of the Lenders, as
required, have approved any such amendment or waiver (and the definition of “Required Lenders” will automatically be deemed modified
accordingly for the duration of such period); provided
that any such amendment or waiver referred to in clauses (i) through (vi) or
the first of this Section 10.02(b) above or that would alter
the terms of such proviso shall require the consent of such Defaulting Lender.

 

75

 

 

SECTION 10.03              Payment of Expenses, Indemnities, etc.  The Company agrees:

 

(a)                                  to pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates, including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement or any amendments, modifications or waivers of the provisions hereof,
(ii) all reasonable out-of-pocket expenses incurred by any Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder and (iii) all out-of-pocket
expenses incurred by the Administrative Agent, any Issuing Bank or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent, any Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section, or in connection with the Loans made
or Letters of Credit issued hereunder, including all such out-of-pocket
expenses incurred during  any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.

 

(b)                                 TO
INDEMNIFY THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENTS, THE DOCUMENTATION
AGENT, EACH ISSUING BANK AND EACH LENDER AND EACH OF THEIR AFFILIATES AND EACH
OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS, ATTORNEYS,
ACCOUNTANTS AND EXPERTS (“INDEMNIFIED
PARTIES”) FROM, HOLD EACH OF THEM HARMLESS AGAINST AND PROMPTLY UPON
DEMAND PAY OR REIMBURSE EACH OF THEM FOR, THE INDEMNITY MATTERS WHICH MAY BE
REASONABLY INCURRED BY OR ASSERTED AGAINST OR INVOLVE ANY OF THEM (WHETHER OR
NOT ANY OF THEM IS DESIGNATED A PARTY THERETO) AS A RESULT OF, ARISING OUT OF
OR IN ANY WAY RELATED TO (I) ANY ACTUAL OR PROPOSED USE BY EITHER BORROWER
OF THE PROCEEDS OF ANY OF THE LOANS OR ANY LETTER OF CREDIT, (II) THE
EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS, (III) THE
OPERATIONS OF THE BUSINESS OF THE COMPANY AND THE SUBSIDIARIES, (IV) THE
FAILURE OF THE COMPANY OR ANY SUBSIDIARY TO COMPLY WITH THE TERMS OF THIS
AGREEMENT, OR WITH ANY REQUIREMENT OF LAW, (V) ANY INACCURACY OF ANY
REPRESENTATION OR ANY BREACH OF ANY WARRANTY OF EITHER BORROWER SET FORTH IN
ANY OF THE LOAN DOCUMENTS, (VI) THE ISSUANCE, EXECUTION AND DELIVERY OR
TRANSFER OF OR PAYMENT OR FAILURE TO PAY UNDER ANY LETTER OF CREDIT,
(VII) THE PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING
THE NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE MANUALLY
EXECUTED DRAFT(S) AND CERTIFICATION(S) OR (VIII) ANY OTHER
ASPECT OF THE LOAN DOCUMENTS, INCLUDING THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH
INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY SUCH ACTION, SUIT,
PROCEEDING (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM AND
INCLUDING ALL INDEMNITY MATTERS ARISING BY REASON 

 

76

 

OF THE ORDINARY NEGLIGENCE OF ANY
INDEMNIFIED PARTY, BUT EXCLUDING ALL INDEMNITY MATTERS ARISING SOLELY BY REASON
OF CLAIMS BETWEEN THE LENDERS OR ANY LENDER AND THE ADMINISTRATIVE AGENT, ANY
SYNDICATION AGENT, OR THE DOCUMENTATION AGENT OR A LENDER’S SHAREHOLDERS
AGAINST THE ADMINISTRATIVE AGENT OR LENDER OR BY REASON OF THE GROSS
NEGLIGENCE, WILLFUL MISCONDUCT OR UNLAWFUL CONDUCT ON THE PART OF THE
INDEMNIFIED PARTY SEEKING INDEMNIFICATION.

 

(c)                                  TO
INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE INDEMNIFIED PARTIES FROM AND
AGAINST ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE
ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES TO WHICH ANY SUCH PERSON MAY BECOME
SUBJECT (I) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO THE COMPANY OR ANY
SUBSIDIARY OR ANY OF THEIR PROPERTIES OR ASSETS, INCLUDING THE TREATMENT
OR DISPOSAL OF HAZARDOUS MATERIALS ON ANY OF THEIR PROPERTIES OR ASSETS, (II) AS
A RESULT OF THE BREACH OR NON-COMPLIANCE BY THE COMPANY OR ANY SUBSIDIARY WITH
ANY ENVIRONMENTAL LAW APPLICABLE TO THE COMPANY OR ANY SUBSIDIARY, (III) DUE
TO PAST OWNERSHIP BY THE COMPANY OR ANY SUBSIDIARY OF ANY OF THEIR PROPERTIES
OR ASSETS OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES OR ASSETS WHICH, THOUGH LAWFUL
AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (IV) THE
PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS MATERIALS
ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWERS OR ANY
SUBSIDIARY, OR (V) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN
CONNECTION WITH THE LOAN DOCUMENTS (EXPRESSLY INCLUDING ANY SUCH CLAIM, DAMAGE
LOSS, LIABILITY, COST, PENALTY, FEE OR EXPENSE ATTRIBUTABLE TO THE ORDINARY,
SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH INDEMNIFIED PARTY, BUT EXCLUDING ANY
SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, PENALTY, FEE OR EXPENSE RESULTING
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY).

 

(d)                                 No Indemnified
Party may settle any claim to be indemnified without the consent of the
indemnitor, such consent not to be unreasonably withheld; provided
that the indemnitor may not reasonably withhold consent to any settlement that
an Indemnified Party proposes, if the indemnitor does not have the financial
ability to pay all its obligations outstanding and asserted against the
indemnitor at that time, including the maximum potential claims against the
Indemnified Party to be indemnified pursuant to this Section 10.03.

 

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

 

77

 

(f)                                    THE
FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES NOTWITHSTANDING
THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER,
WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING,
ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS
OF ONE OR MORE OF THE INDEMNIFIED PARTIES OR BY REASON OF STRICT LIABILITY
IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNIFIED PARTIES.  TO THE EXTENT THAT AN INDEMNIFIED PARTY IS
FOUND TO HAVE COMMITTED AN ACT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR
ENGAGED IN UNLAWFUL CONDUCT, THIS CONTRACTUAL OBLIGATION OF INDEMNIFICATION
SHALL CONTINUE BUT SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED
TO HAVE OCCURRED BY REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE, WILLFUL
MISCONDUCT OR UNLAWFUL CONDUCT OF THE INDEMNIFIED PARTY.

 

(g)                                 The Company’s
obligations under this Section 10.03 shall survive any termination
of this Agreement, the payment of the Loans and the expiration of the Letters
of Credit and shall continue thereafter in full force and effect, for a period
of six years.

 

(h)                                 To the extent
that the Company fails to pay any amount required to be paid by it to the
Administrative Agent or any Issuing Bank under this Section 10.03,
each Lender severally agrees to pay to the Administrative Agent or such Issuing
Bank, as the case may be, such Lender’s Applicable Percentage (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that
the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent or such Issuing Bank in its capacity as such.

 

(i)                                     The Company
shall pay any amounts due under this Section 10.03 within thirty
(30) days of the receipt by the Company of notice of the amount due.

 

(j)                                     To the fullest
extent permitted by applicable law, no party shall assert, and each party
hereby waives, any claim against any other party, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof; provided, however,
that the foregoing limitation shall not be deemed to impair or affect the
indemnification obligations of either Borrower under the Loan Documents.. No
Indemnified Party referred to in paragraph (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby.

 

SECTION 10.04              Successors and Assigns.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors 

 

78

 

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

 

SECTION 10.05              Assignments and
Participations(a)        Neither Borrower may assign its rights or
obligations hereunder or under the Notes or any Letter of Credit without the prior
consent of all of the Lenders and the Administrative Agent.

 

(b)                                 Any Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it); provided that (i) except
in the case of an assignment to a Lender or an Affiliate of a Lender, each of
the Company and the Administrative Agent (and, in the case of an assignment of
all or a portion of a Commitment or any Lender’s obligations in respect of its
LC Exposure or Swingline Exposure, the Issuing Banks and the Swingline Lender)
must give their prior written consent to such assignment (which consent shall
not be unreasonably withheld), (ii) except in the case of an assignment to
a Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender’s Commitment, the amount of the Commitment of
the assigning Lender subject to each such assignment (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $10,000,000 unless each of the
Company and the Administrative Agent otherwise consent, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement, (iv) the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, together with a processing and recordation
fee of $3,500 for each such assignment, and (v) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; provided  further that any consent of the Company
otherwise required under this Section 10.05(b) shall not be
required if an Event of Default has occurred and is continuing.  Upon acceptance and recording pursuant to Section 10.05(d),
from and after the effective date specified in each Assignment and Acceptance,
the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 10.03).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with Section 10.05(e).

 

(c)                                  The
Administrative Agent, acting for this purpose as an agent of the Borrowers,
shall maintain at one of its offices in Charlotte, North Carolina a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the 

 

79

 

“Register”).  The entries in the Register shall be
conclusive, and each Borrower, the Administrative Agent, the Issuing Banks and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by either Borrower, any Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

 

(d)                                 Upon its
receipt of a duly completed Assignment and Acceptance executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the processing and
recordation fee referred to in Section 10.05(b) and any
written consent to such assignment required by Section 10.05(b),
the Administrative Agent shall accept such Assignment and Acceptance and record
the information contained therein in the Register.  No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in this
paragraph.

 

(e)                                  Any Lender may,
without the consent of either Borrower, the Administrative Agent or any Issuing
Bank, sell participations to one or more banks or other entities (a “Participant”) in all or a
portion of such Lender’s rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans owing to it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Company, the Administrative Agent, the Issuing Banks and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver described in the first proviso to Section 10.02(b) that
affects such Participant.  Subject to Section 10.05(f),
each Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to Section 10.05(b),
and be indemnified under Section 10.03 as if it were a Lender.  In addition, each agreement creating any
participation must include an agreement by the Participant to be bound by the
provisions of Section 10.12.

 

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

 

(g)                                 The Lenders may
furnish any information concerning the Borrowers in the possession of the
Lenders from time to time to assignees and Participants (including prospective 

 

80

 

assignees and participants); provided
that, such Persons agree to be bound by the provisions of Section 10.12
hereof.

 

(h)                                 Notwithstanding
anything in this Section 10.05 to the contrary, without the consent
of the Company, the Administrative Agent or any other Lender, any Lender may
assign and pledge its Notes to (i) any central bank having jurisdiction
over the assigning Lender and (ii) any Federal Reserve Bank or the United
States Treasury as collateral security pursuant to Regulation A and any
operating circular issued by such Federal Reserve System and/or such Federal
Reserve Bank.  No such assignment and/or
pledge shall release the assigning and/or pledging Lender from its obligations
hereunder.

 

(i)                                     Notwithstanding
any other provisions of this Section 10.05, no transfer or
assignment of the interests or obligations of any Lender or any grant of
participations therein shall be permitted if such transfer, assignment or grant
would require either Borrower to file a registration statement with the SEC or
to qualify the Loans under the “Blue Sky” laws
of any state.

 

SECTION 10.06              Survival; Reinstatement.

 

(a)                                  All covenants,
agreements, representations and warranties made by the Borrowers herein and in
the certificates or other instruments delivered in connection with or pursuant
to this Agreement shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of this Agreement
and the making of any Loans and issuance of any Letters of Credit, regardless
of any investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent, any Issuing Bank or any Lender
may have had notice or knowledge of any Default or Event of Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated.  The provisions of Sections 2.15,
2.16, 2.17 and 10.03 and Article VIII shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.

 

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

 

SECTION 10.07              Counterparts; Integration;
Effectiveness.  This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.  This Agreement, the other Loan Documents and
the Fee Letters constitute the entire contract among the parties hereto
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter 

 

81

 

hereof (including the Information Memorandum).  Except as provided in Section 3.01, this Agreement shall
become effective when it shall have been executed by the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Agreement.

 

SECTION 10.08              Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

SECTION 10.09              Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Lender to or for the
credit or the account of either Borrower against any of and all the Obligations
now or hereafter existing under this Agreement and the other Loan Documents
held by such Lender, irrespective of whether or not such Lender shall have made
any demand under this Agreement and although such Obligations may be unmatured.  The rights of each Lender under this Section 10.09
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.

 

SECTION 10.10              Governing Law; Jurisdiction;
Consent to Service of Process(a)     This Agreement and the other
Loan Documents shall be construed in accordance with and governed by the laws
of the State of New York.

 

(b)                                 ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
SITTING IN THE BOROUGH OF MANHATTAN OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY AND ASSETS, UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING.  EACH BORROWER HEREBY IRREVOCABLY DESIGNATES,
APPOINTS AND EMPOWERS C T CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF
AT 111 8TH AVENUE, NEW YORK, NEW YORK 10011, AS ITS DESIGNEE, APPOINTEE AND
AGENT TO RECEIVE AND ACCEPT FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS
PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS
WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING.  IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE
AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH SUCH BORROWER AGREES
TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW 

 

82

 

YORK, NEW YORK ON THE TERMS AND FOR
THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE ADMINISTRATIVE AGENT.  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 PROVIDED IN SECTION 10.01,
SUCH SERVICE TO BECOME EFFECTIVE THIRTY DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
EITHER BORROWER IN ANY OTHER JURISDICTION.

 

(c)                                  EACH OF THE BORROWERS HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE
COURTS REFERRED TO IN CLAUSE (b) ABOVE AND HEREBY FURTHER IRREVOCABLY
WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO PLEAD
OR CLAIM, AND AGREES NOT TO PLEAD OR CLAIM, THAT ANY SUCH ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(d)                                 EACH PARTY HERETO HEREBY (i) IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (ii) CERTIFIES THAT
NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iii) ACKNOWLEDGES
THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION 10.10.

 

SECTION 10.11              WAIVER OF JURY TRIAL.  EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) 

 

83

 

ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.11.

 

SECTION 10.12              Confidentiality.  Each of the Administrative Agent, the Issuing
Banks and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its
Affiliates, directors, officers and employees and to its agents, including
accountants, legal counsel and other advisors who have been informed of the
confidential nature of the information provided,
(b) disclosures in connection with any pledge or assignment permitted
under Section 10.05(h) and, to the extent requested by any
regulatory authority, including the National Association of Insurance
Commissioners or any similar organization, or any nationally recognized rating
agency that requires access to information about a Lender’s investment
portfolio, (c) to the extent a Lender reasonably believes it is required
by applicable laws or regulations or by any subpoena or similar legal process
(and, to the extent not prohibited under applicable law), such Lender will
provide prompt notice thereof to the Company), (d) to any other party to
this Agreement, (e) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject
to an understanding with such Person that such Person will comply with this Section 10.12,
to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (g) with
the consent of the Company or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section 10.12
or (ii) becomes available to the Administrative Agent, any Issuing Bank or
any Lender from a source other than a Borrower (unless such source is actually
known by the individual providing the information to be bound by a
confidentiality agreement or other legal or contractual obligation of
confidentiality with respect to such information).  For the purposes of this Section 10.12,
“Information” means all
information received from either Borrower relating to either Borrower or its
business, other than any such information that is known to a Lender, publicly
known or otherwise available to the Administrative Agent, any Issuing Bank or
any Lender other than through disclosure (a) by a Borrower, or (b) from
a source actually known to a Lender to be bound by a confidentiality agreement
or other legal or contractual obligation of confidentiality with respect to
such information.  Any Person required to
maintain the confidentiality of Information as provided in this Section 10.12 shall be considered
to have complied with its obligation to do so if such Person maintains the
confidentiality of such Information in accordance with procedures adopted in
good faith to protect confidential Information of third parties delivered to a
lender.

 

SECTION 10.13              Interest Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved by the Lender holding such
Loan in accordance with applicable law, the rate of interest payable in respect
of such Loan hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest
and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section 10.13 shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or 

 

84

 

periods shall be increased (but not above the
Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.

 

SECTION 10.14              EXCULPATION
PROVISIONS.  EACH OF THE
PARTIES HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT,
THE NOTES AND (IN THE CASE OF THE COMPANY AND THE ADMINISTRATIVE AGENT) THE FEE
LETTER AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS
AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS,
CONDITIONS AND EFFECTS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT
HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY
ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING
THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY.  EACH PARTY HERETO AGREES AND COVENANTS THAT
IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION
OF THIS AGREEMENT ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF
SUCH PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”

 

SECTION 10.15              U.S. Patriot Act.  Each Lender that is subject to the
requirements of the USA PATRIOT ACT (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Patriot Act”) hereby notifies the
Borrowers that pursuant to the requirements of the Patriot Act, it is required
to obtain, verify, and record information that identifies the Borrowers, which
information includes the name and address of each Borrower and other information
that will allow such Lender to identify such Borrower in accordance with the
Patriot Act.

 

SECTION 10.16              No Advisory or Fiduciary
Responsibility.  In
connection with all aspects of each transaction contemplated hereby, each
Borrower acknowledges and agrees, and acknowledges its Affiliates’
understanding, that: (i) the credit facility provided for hereunder and
any related arranging or other services in connection therewith (including in
connection with any amendment, waiver or other modification hereof or of any
other Loan Document) are an arm’s-length commercial transaction between the
Borrowers, on the one hand, and the Administrative Agent, the Lenders and the
Issuing Banks, on the other hand, and each Borrower is capable of evaluating
and understanding and understands and accepts the terms, risks and conditions
of the transactions contemplated hereby and by the other Loan Documents
(including any amendments, waiver or other modification hereof or thereof);
(ii) in connection with the process leading to such transaction, the
Administrative Agent, the Lenders and the Issuing Banks are and have been
acting solely as principals and are not the financial advisors, agents or
fiduciaries, for either Borrower or any of their respective Affiliates,
stockholders,

 

85

 

 

creditors or employees or any other Person;
(iii) the Administrative Agent, the Lenders and the Issuing Banks have not
assumed or will assume an advisory, agency or fiduciary responsibility in favor
of either Borrower with respect to any of the transactions contemplated hereby
or the process leading thereto, including with respect to any amendment, waiver
or other modification hereof or of any other Loan Document (irrespective of
whether the Administrative Agent, any Lender or any Issuing Bank advised or is
currently advising either Borrower or any of their respective Affiliates on
other matters) and the Administrative Agent, the Lenders and the Issuing Banks
have no obligation to either Borrower or any of their respective Affiliates
with respect to the transactions contemplated hereby except those obligations
expressly set forth herein and in the other Loan Documents; (iv) the
Administrative Agent, the Lenders, the Issuing Banks, and their respective
Affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Borrowers and their respective
Affiliates, and the Administrative Agent, the Lenders and the Issuing Banks
have no obligation to disclose any of such interests by virtue of any advisory,
agency or fiduciary relationship; and (v) the Administrative Agent, the
Lenders and the Issuing Banks have not provided and will not provide any legal,
accounting, regulatory or tax advice with respect to any of the transactions
contemplated hereby (including any amendment, waiver or other modification
hereof or of any other Loan Document) and each of the Borrowers has consulted
its own legal, accounting, regulatory and tax advisors to the extent it has
deemed appropriate.  Each of the
Borrowers hereby waives and releases, to the fullest extent permitted by law,
any claims that it may have against the Administrative Agent, the Lenders or
any Issuing Bank with respect to any breach or alleged breach of agency or
fiduciary duty.

 

SECTION 10.17             Liability of Delegate.  It is hereby understood and agreed that the
Delegate shall have no personal liability for the payment of any amount owing
or to be owing hereunder or under the other Loan Documents.

 

[The rest of this page intentionally left blank]

 

86

 

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

 

	
   

  	
  KINDER
  MORGAN ENERGY PARTNERS, L.P.,

  
	
   

  	
  as
  the Company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Kinder
  Morgan G.P., Inc.,

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Kinder
  Morgan Management, LLC,

  
	
   

  	
   

  	
   

  	
  its Delegate

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  David D. Kinder

  
	
   

  	
   

  	
   

  	
  Name:

  	
  David
  D. Kinder

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice
  President and Treasurer

  

 

	
   

  	
  Signature
  Page

  	
  KMEP 2010 Credit Agreement

  

 

 

	
   

  	
  KINDER
  MORGAN OPERATING L.P. “B”,

  
	
   

  	
  as
  the Subsidiary Borrower

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Kinder
  Morgan G.P., Inc.,

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Kinder
  Morgan Management, LLC,

  
	
   

  	
   

  	
   

  	
  its Delegate

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  David D. Kinder

  
	
   

  	
   

  	
   

  	
  Name:

  	
  David
  D. Kinder

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice
  President and Treasurer

  

 

	
   

  	
  Signature Page

  	
  2010
  Three Year Facility

  

 

 

	
   

  	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION,

  
	
   

  	
  as
  the Administrative Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Shannan Townsend

  
	
   

  	
  Name:

  	
  Shannan
  Townsend

  
	
   

  	
  Title:

  	
  Managing
  Director

  

 

Signature Page

 

 

	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
  as
  a Syndication Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Christen A. Lacey

  
	
   

  	
  Name:

  	
  Christen
  A. Lacey

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  

 

Signature Page

 

 

	
   

  	
  CITIBANK,
  N.A.,

  
	
   

  	
  as
  a Syndication Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lawrence Martin

  
	
   

  	
  Name:

  	
  Lawrence
  Martin

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

Signature
Page

 

 

	
   

  	
  JPMORGAN
  CHASE BANK, N.A.

  
	
   

  	
  as
  a Syndication Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stephanie Balette

  
	
   

  	
  Name:

  	
  Stephanie
  Balette

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  

 

Signature
Page

 

 

	
   

  	
  DnB
  NOR BANK ASA,

  
	
   

  	
  as
  the Documentation Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Nikolai A. Nachamkin

  
	
   

  	
  Name:

  	
  Nikolai
  A. Nachamkin

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stlan Lovseth

  
	
   

  	
  Name:

  	
  Stlan
  Lovseth

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

Signature
Page

 

 

	
   

  	
  BARCLAYS
  BANK PLC,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Sam Yoo

  
	
   

  	
  Name:

  	
  Sam
  Yoo

  
	
   

  	
  Title:

  	
  Assistant
  Vice President

  

 

Signature
Page

 

 

	
   

  	
  CREDIT
  SUISSE AG, CAYMAN ISLANDS BRANCH,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Nupur Kumar

  
	
   

  	
  Name:

  	
  Nupur
  Kumar

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kevin Buddhdew

  
	
   

  	
  Name:

  	
  Kevin
  Buddhdew

  
	
   

  	
  Title:

  	
  Associate

  

 

Signature
Page

 

 

	
   

  	
  DEUTSCHE
  BANK AG NEW YORK BRANCH,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Andreas Neumeier

  
	
   

  	
  Name:

  	
  Andreas
  Neumeier

  
	
   

  	
  Title:

  	
  Managing
  Director

  

 

	
   

  	
  By:

  	
  /s/
  Ming K. Chu

  
	
   

  	
  Name:

  	
  Ming
  K. Chu

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

 

Signature
Page

 

 

	
   

  	
  GOLDMAN
  SACHS LENDING PARTNERS LLC,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mark Walton

  
	
   

  	
  Name:

  	
  Mark
  Walton

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

Signature
Page

 

 

	
   

  	
  MORGAN
  STANLEY BANK, N.A.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ryan Vetsch

  
	
   

  	
  Name:

  	
  Ryan
  Vetsch

  
	
   

  	
  Title:

  	
  Authorized Signatory

  

 

Signature
Page

 

 

	
   

  	
  ROYAL
  BANK OF CANADA,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jason S. York

  
	
   

  	
  Name:

  	
  Jason
  S. York

  
	
   

  	
  Title:

  	
  Authorized Signatory

  

 

Signature
Page

 

 

	
   

  	
  RBC
  BANK (USA),

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard Marshall

  
	
   

  	
  Name:

  	
  Richard
  Marshall

  
	
   

  	
  Title:

  	
  Market Executive -
  National Division

  

 

Signature
Page

 

 

	
   

  	
  SUNTRUST
  BANK,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gregory C. Magnuson

  
	
   

  	
  Name:

  	
  Gregory
  C. Magnuson

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

Signature
Page

 

 

	
   

  	
  THE
  ROYAL BANK OF SCOTLAND plc,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Steve Ray

  
	
   

  	
  Name:

  	
  Steve
  Ray

  
	
   

  	
  Title:

  	
  Senior Vice President

  

 

Signature
Page

 

 

	
   

  	
  UBS
  AG, STAMFORD BRANCH,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Irja R. Otsa

  
	
   

  	
  Name:

  	
  Irja
  R. Otsa

  
	
   

  	
  Title:

  	
  Associate
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mary E. Evans

  
	
   

  	
  Name:

  	
  Mary
  E. Evans

  
	
   

  	
  Title:

  	
  Associate Director

  

 

Signature
Page

 

 

	
   

  	
  THE
  BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Linda Terry

  
	
   

  	
  Name:

  	
  Linda
  Terry

  
	
   

  	
  Title:

  	
  Authorized Signatory

  

 

Signature
Page

 

 

	
   

  	
  COMPASS
  BANK,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Greg Determann

  
	
   

  	
  Name:

  	
  Greg
  Determann

  
	
   

  	
  Title:

  	
  Senior Vice President

  

 

Signature
Page

 

 

	
   

  	
  ING
  CAPITAL LLC,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Subha Pasumarti

  
	
   

  	
  Name:

  	
  Subha
  Pasumarti

  
	
   

  	
  Title:

  	
  Director

  

 

Signature
Page

 

 

	
   

  	
  NATIXIS,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Louis P. Laville, III

  
	
   

  	
  Name:

  	
  Louis
  P. Laville, III

  
	
   

  	
  Title:

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Daniel Payer

  
	
   

  	
  Name:

  	
  Daniel
  Payer

  
	
   

  	
  Title:

  	
  Managing
  Director

  

 

Signature
Page

 

 

	
   

  	
  REGIONS
  BANK,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Charles De Lacey

  
	
   

  	
  Name:

  	
  Charles
  De Lacey

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  

 

Signature
Page

 

 

	
   

  	
  SUMITOMO
  MITSUI BANKING CORPORATION,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Natsuhiro Samejima

  
	
   

  	
  Name:

  	
  Natsuhiro
  Samejima

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  

 

Signature
Page

 

 

	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Monte E. Deckerd

  
	
   

  	
  Name:

  	
  Monte
  E. Deckerd

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  

 

Signature Page

 

 

SCHEDULE 1.01

 

COMMITMENTS

 

	
  Wells Fargo Bank, National Association

  	
   

  	
  $

  	
  130,000,000.00

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  120,000,000.00

  	
   

  
	
  Citibank, N.A.

  	
   

  	
  120,000,000.00

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  120,000,000.00

  	
   

  
	
  DnB NOR Bank ASA

  	
   

  	
  120,000,000.00

  	
   

  
	
  Barclays Bank PLC

  	
   

  	
  110,000,000.00

  	
   

  
	
  Credit Suisse AG, Cayman Islands Branch

  	
   

  	
  110,000,000.00

  	
   

  
	
  Deutsche Bank AG New York Branch

  	
   

  	
  110,000,000.00

  	
   

  
	
  Goldman Sachs Lending Partners LLC

  	
   

  	
  110,000,000.00

  	
   

  
	
  Morgan Stanley Bank, N.A.

  (Morgan Stanley MUFG Loan Partners, LLC)

  	
   

  	
  110,000,000.00

  	
   

  
	
  Royal Bank of Canada:

  	
   

  	
   

  	
   

  
	
  Royal Bank of Canada

  	
   

  	
  84,333,333.33

  	
   

  
	
  RBC Bank (USA)

  	
   

  	
  25,666,666.67

  	
   

  
	
  SunTrust Bank

  	
   

  	
  110,000,000.00

  	
   

  
	
  The Royal Bank of Scotland plc

  	
   

  	
  110,000,000.00

  	
   

  
	
  UBS AG, Stamford Branch

  	
   

  	
  110,000,000.00

  	
   

  
	
  The Bank of Tokyo-Mitsubishi UFJ, Ltd.

  (Morgan Stanley MUFG Loan Partners, LLC)

  	
   

  	
  100,000,000.00

  	
   

  
	
  Compass Bank

  	
   

  	
  50,000,000.00

  	
   

  
	
  ING Capital LLC

  	
   

  	
  50,000,000.00

  	
   

  
	
  Natixis

  	
   

  	
  50,000,000.00

  	
   

  
	
  Regions Bank

  	
   

  	
  50,000,000.00

  	
   

  
	
  Sumitomo Mitsui Banking Corporation

  	
   

  	
  50,000,000.00

  	
   

  
	
  U.S. Bank National Association

  	
   

  	
  50,000,000.00

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  2,000,000,000.00

  	
   

  

 

KMEP
2010 Credit Agreement

 

 

SCHEDULE  6.05

 

EXISTING RESTRICTIONS

 

Port
Authority Refunding Revenue Bonds Series 1994 (Kinder Morgan Operating
L.P. “B” Bonds relating to the Cora Terminal) in the aggregate amount of
$23,700,000, as issued by the Jackson-Union Counties Regional Port District.

 

 

 

EXHIBIT 1.01-A

 

	
  FORM OF ASSIGNMENT AND ACCEPTANCE

  
	
   

  
	
   

  	
  Dated:

  	
   

  	
   

  

 

Reference
is made to the Credit Agreement dated as of June 23, 2010 (as restated,
amended, modified, supplemented and in effect from time to time, the “Credit Agreement”), among
Kinder Morgan Energy Partners, L.P., a Delaware limited partnership (the “Company”), Kinder Morgan
Operating L.P. “B”, a Delaware
limited partnership (the “Subsidiary
Borrower”), the Lenders named therein, Wells Fargo Bank, National
Association, as the Administrative Agent (the “Administrative Agent”), and the other agents named
therein.  Capitalized terms used herein
and not otherwise defined shall have the meanings assigned to such terms in the
Credit Agreement.

 

This
Assignment and Acceptance, between the Assignor (as defined and set forth in Schedule
I hereto and made a part hereof) and the Assignee (as defined and set forth
on Schedule I hereto and made a part hereof) is dated as of the
Effective Date of Assignment (as set forth on Schedule I hereto and made
a part hereof).

 

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 Effective Date of Assignment, an undivided
interest (the “Assigned Interest”)
in and to all the Assignor’s rights, obligations and claims under the Credit
Agreement respecting those, and only those, credit facilities contained in the
Credit Agreement as set forth on Schedule I (collectively, the “Assigned Facilities”,
individually, an “Assigned Facility”),
in a principal amount for each Assigned Facility as set forth on Schedule I.

 

2.             The Assignor (i) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Loan Document or any other instrument or document
furnished pursuant thereto, other than that it is the legal and beneficial
owner of the Assigned Interest and that the Assigned Interest is free and clear
of any adverse claim; (ii) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrowers or
their respective Subsidiaries or the performance or observance by the Borrowers
or their respective Subsidiaries of any of its respective obligations under the
Credit Agreement, any other Loan Document or any other instrument or document
furnished pursuant thereto; and (iii) attaches the Note if any, held by it
evidencing the Assigned Facility or Facilities, as the case may be, and
requests that the Administrative Agent exchange such Note(s) for a new
Note payable to the Assignor (if the Assignor has retained any interest in the
Assigned Facility or Facilities) and a new Note payable to the Assignee in the
amount which reflects the assignment being made hereby (and after giving effect
to any other assignments which have become effective on the Effective Date of
Assignment).

 

 

3.             The Assignee (i) represents
and warrants that it is legally authorized to enter into this Assignment and
Acceptance; (ii) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in Section 4.07
thereof, or, if later, the most recent financial statements delivered pursuant
to Section 5.01 thereof, and such other documents and information
as it has deemed appropriate to make its own credit analysis; (iii) agrees
that it will independently and without reliance upon the Administrative Agent,
the Assignor, any Issuing Bank or any other Lender and based on such other
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iv) appoints and authorizes the Administrative Agent to take
such action as such agent on its behalf and to exercise such powers as are
reasonably incidental thereto; (v) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its
terms all the obligations which by the terms of the Credit Agreement are
required to be performed by it as a Lender; (vi) confirms that it is an
Eligible Assignee; (vii) if the Assignee is organized under the laws of a
jurisdiction outside the United States, attaches the forms prescribed by the
Internal Revenue Services of the United States certifying as to the Assignee’s
exemption from United States withholding taxes with respect to all payments to
be made to the Assignee under the Credit Agreement or such other documents as
are necessary to indicate that all such payments are subject to such tax at a
rate by an applicable tax treaty, and (viii) has supplied the information
requested on the administrative questionnaire provided by the Administrative
Agent.

 

4.             Following the execution of this
Assignment and Acceptance, it will be delivered to the Administrative Agent for
acceptance by it and the Borrowers and recording by the Administrative Agent
pursuant to Section 10.05 of the Credit Agreement, effective as of
the Effective Date of Assignment (which Effective Date of Assignment shall,
unless otherwise agreed to by the Administrative Agent, be at least five
Business Days after the execution of this Assignment and Acceptance).

 

5.             Upon such acceptance and recording,
from and after the Effective Date of Assignment, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignee, whether such
amounts have accrued prior to the Effective Date of Assignment or accrue
subsequent to the Effective Date of Assignment. 
The Assignor and Assignee shall make all appropriate adjustments in
payments for periods prior to the Effective Date of Assignment by the
Administrative Agent or with respect to the making of this assignment directly
between themselves.

 

6.             From and after the Effective Date
of Assignment, (i) the Assignee shall be party to the Credit Agreement
and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder, and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance or the Credit Agreement, relinquish its claims and
rights and be released from its obligations under the Credit Agreement.

 

7.             THIS ASSIGNMENT AND ACCEPTANCE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.

 

2010
Three Year Facility

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance
to be executed by their respective duly authorized officers on Schedule I
hereto.

 

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

Schedule I to Assignment and Acceptance

 

	
  Legal
  Name of Assignor:

  	
   

  
	
   

  
	
  Legal
  Name of Assignee:

  	
   

  
	
   

  
	
  Effective
  Date of Assignment:

  	
   

  
				

 

	
  Assigned
  Facilities

  	
   

  	
  Principal

  Amount of

  Assigned Interest

  	
   

  	
  Percentage Assigned of Each

  Facility (to at least 8

  decimals) (Shown as a

  percentage of aggregate

  held by all applicable

  Lenders)

  	
   

  
	
  Commitment

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
	
  Committed Loans

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT 1.01-B

 

OTHER EXISTING LETTERS OF CREDIT

As of June 2010

 

	
  Issuer and

  LC Number

  	
   

  	
  Beneficiary

  	
   

  	
  Issue

  Date

  	
   

  	
  Current

  Expiry

  Date

  	
   

  	
  Auto-

  Renewal

  (y/n)

  	
   

  	
  Total

  Amount

  Supported

  	
   

  	
  Purpose

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SM201374W

  	
   

  	
  Bank of New York

  	
   

  	
  12/23/02

  	
   

  	
  12/23/2010

  	
   

  	
  no

  	
   

  	
  $

  	
  19,792,633

  	
   

  	
  Nassau County, OHPA
  Bonds

  	
   

  
	
  SM212961W

  	
   

  	
  Paribas

  	
   

  	
  12/31/08

  	
   

  	
  12/31/2010

  	
   

  	
  no

  	
   

  	
  1

  	
   

  	
  Hedging Activities

  	
   

  
	
  SM206600

  	
   

  	
  Morgan Stanley

  	
   

  	
  12/31/04

  	
   

  	
  12/31/2010

  	
   

  	
  no

  	
   

  	
  5,000,000

  	
   

  	
  Hedging Activities

  	
   

  
	
  SM211314W

  	
   

  	
  National Union Fire Ins.
  Co.

  	
   

  	
  12/13/04

  	
   

  	
  12/31/2010

  	
   

  	
  yes

  	
   

  	
  490,000

  	
   

  	
  Workers Comp Insurance
  Policy

  	
   

  
	
  SM215665W

  	
   

  	
  TCEQ

  	
   

  	
  09/06/05

  	
   

  	
  12/31/2010

  	
   

  	
  yes

  	
   

  	
  7,000,000

  	
   

  	
  KM Liquids Facility

  	
   

  
	
  SM230086W/ SM230084W

  	
   

  	
  BNY Trust Company

  	
   

  	
  02/26/08

  	
   

  	
  03/20/2010

  	
   

  	
  yes

  	
   

  	
  45,500,000

  	
   

  	
  Support IMT Bonds

  	
   

  
	
  S113181

  	
   

  	
  Bank of New York

  	
   

  	
  03/03/97

  	
   

  	
  04/2010

  	
   

  	
  yes

  	
   

  	
  24,128,548

  	
   

  	
  Cora Revenue Bonds

  	
   

  
	
  SM231529W

  	
   

  	
  Port Authority of
  NY & NJ

  	
   

  	
  06/05/08

  	
   

  	
  04/30/2010

  	
   

  	
  yes

  	
   

  	
  300,000

  	
   

  	
  KMBT

  	
   

  
	
  SM235293W

  	
   

  	
  Port of Portland

  	
   

  	
  07/29/09

  	
   

  	
  08/01/2010

  	
   

  	
  yes

  	
   

  	
  300,000

  	
   

  	
  KM Cochin

  	
   

  
	
  SM421263C

  	
   

  	
  Travelers

  	
   

  	
  06/04/03

  	
   

  	
  06/04/2010

  	
   

  	
  yes

  	
   

  	
  200,000

  	
   

  	
  Workers Comp Insurance
  Policy

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Total
  Wachovia

  	
   

  	
  $

  	
  102,711,182

  	
   

  	
   

  	
   

  
	
  JPMorgan

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TPTS-211032

  	
   

  	
  TCEQ

  	
   

  	
  10/31/05

  	
   

  	
  12/31/2010

  	
   

  	
  yes

  	
   

  	
  $

  	
  8,000,000

  	
   

  	
  KM Liquids Facility

  	
   

  
	
  TPTS-302402

  	
   

  	
  Shell Oil Company

  	
   

  	
  12/28/06

  	
   

  	
  05/15/2010

  	
   

  	
  yes

  	
   

  	
  21,427,500

  	
   

  	
  Cortez

  	
   

  
	
  TPTS-330400

  	
   

  	
  RBC/BC Maritime

  	
   

  	
  05/22/07

  	
   

  	
  05/18/2010

  	
   

  	
  yes

  	
   

  	
  399,018

  	
   

  	
  Van Wharves - Union

  	
   

  
	
  TPTS-603696

  	
   

  	
  CPUC

  	
   

  	
  07/01/08

  	
   

  	
  06/30/2010

  	
   

  	
  yes

  	
   

  	
  100,000,000

  	
   

  	
  SFPP

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Total
  JPMorgan

  	
   

  	
  $

  	
  129,826,518

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Total
  LCs

  Outstanding

  	
   

  	
  $

  	
  232,537,700

  	
   

  	
   

  	
   

  

 

 

EXHIBIT 1.01-C

 

FORM OF COMMITTED NOTE

 

                                    ,          

 

FOR
VALUE RECEIVED, the undersigned, KINDER MORGAN ENERGY PARTNERS, L.P., a
Delaware limited partnership (the “Company”),
HEREBY PROMISES TO PAY to the order of
                                                                                                              
(the “Lender”), the
lesser of (i) such Lender’s Commitment and (ii) the aggregate amount
of Committed Loans made by the Lender and outstanding on the Maturity
Date.  The principal amount of the
Committed Loans made by the Lender to the Company shall be due and payable on
the dates and in the amounts as are specified in that certain Credit Agreement
dated as of June 23, 2010 (as restated, amended, modified, supplemented
and in effect from time to time, the “Credit
Agreement”) among the Company, the Subsidiary Borrower, the Lender,
certain other lenders that are party thereto, Wells Fargo Bank, National
Association, as Administrative Agent for the Lender and such other lenders, and
the other agents named therein.  All
capitalized terms used herein and not otherwise defined shall have the meanings
as defined in the Credit Agreement.

 

The
Company promises to pay interest on the unpaid principal amount of each
Committed Loan outstanding from time to time from the date thereof until such
principal amount is paid in full, at such interest rates and payable on such
dates as are specified in the Credit Agreement. 
Both principal and interest are payable in same day funds in lawful money
of the United States of America to the Administrative Agent at its Principal
Office, or at such other place as the Administrative Agent shall designate in
writing to the Company.

 

This
Note is one of the Committed Notes referred to in, and this Note and all
provisions herein are entitled to the benefits of, the Credit Agreement.  The Credit Agreement, among other things (a) provides
for the making of Committed Loans by the Lender and the other lenders to the
Company from time to time, and (b) contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events, for
prepayments on account of principal hereof prior to the maturity hereof upon
the terms and conditions therein specified, and for limitations on the amount
of interest paid such that no provision of the Credit Agreement or this Note
shall require the payment or permit the collection of interest in excess of the
Maximum Rate.

 

This
Note may be held by the Lender for the account of its applicable lending office
and may be transferred from one lending office to another lending office from
time to time as the Lender may determine.

 

The
Company and any and all endorsers, guarantors and sureties severally waive
grace, demand, presentment for payment, notice of dishonor, default or intent
to accelerate, protest and notice of protest and diligence in collecting and
bringing of suit against any party hereto, and agree to all renewals,
extensions or partial payments hereon and to any release or substitution of
security herefor, in whole or in part, with or without notice, before or after
maturity.

 

 

This
Note shall be governed by and construed under the laws of the State of New York
and  the applicable laws of the United
States of America.

 

	
   

  	
  KINDER
  MORGAN ENERGY PARTNERS, L.P.,

  
	
   

  	
  as
  the Company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Kinder
  Morgan G.P., Inc.,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Kinder
  Morgan Management, LLC,

  
	
   

  	
   

  	
  its
  Delegate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

2

 

EXHIBIT 1.01-D

 

FORM OF SWINGLINE NOTE

 

	
  $25,000,000

  	
                                        

  	
  ,           

  

 

FOR
VALUE RECEIVED, the undersigned, KINDER MORGAN ENERGY PARTNERS, L.P., a
Delaware limited partnership (the “Company”),
HEREBY PROMISES TO PAY to the order of
                                                                                                    
(the “Swingline Lender”),
the lesser of (i) $25,000,000 and (ii) the aggregate amount of
Swingline Loans made by the Swingline Lender and outstanding on the Maturity
Date.  The principal amount of the Swingline
Loans made by the Swingline Lender to the Company shall be due and payable on
the dates and in the amounts as are specified in that certain Credit Agreement
dated as of June 23, 2010 (as restated, amended, modified, supplemented
and in effect from time to time, the “Credit
Agreement”) among the Company, the Subsidiary Borrower, the
Swingline Lender, certain other lenders that are party thereto, Wells Fargo
Bank, National Association, as Administrative Agent for the Swingline Lender
and such other lenders, and the other agents named therein.  All capitalized terms used herein and not
otherwise defined shall have the meanings as defined in the Credit Agreement.

 

The
Company promises to pay interest on the unpaid principal amount of each
Swingline Loan outstanding from time to time from the date thereof until such
principal amount is paid in full, at such interest rates and payable on such
dates as are specified in the Credit Agreement. 
Both principal and interest are payable in same day funds in lawful
money of the United States of America to the Swingline Lender at 1525 West W.
T. Harris Boulevard, Charlotte, North Carolina 28262 or such other place as the
Swingline Lender shall designate in writing to the Company.

 

This
Note is the Swingline Note referred to in, and this Note and all provisions
herein are entitled to the benefits of, the Credit Agreement.  The Credit Agreement, among other things (a) provides
for the making of Swingline Loans by the Swingline Lender to the Company from
time to time, and (b) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events, for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and conditions
therein specified, and for limitations on the amount of interest paid such that
no provision of the Credit Agreement or this Note shall require the payment or
permit the collection of interest in excess of the Maximum Rate.

 

The
Company and any and all endorsers, guarantors and sureties severally waive
grace, demand, presentment for payment, notice of dishonor, default or intent
to accelerate, protest and notice of protest and diligence in collecting and
bringing of suit against any party hereto, and agree to all renewals,
extensions or partial payments hereon and to any release or substitution of
security herefor, in whole or in part, with or without notice, before or after
maturity.

 

This
Note shall be governed by and construed under the laws of the State of New York
and the applicable laws of the United States of America.

 

 

	
   

  	
  KINDER
  MORGAN ENERGY PARTNERS, L.P.,

  
	
   

  	
  as
  the Company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Kinder
  Morgan G.P., Inc.,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Kinder
  Morgan Management, LLC,

  
	
   

  	
   

  	
  its
  Delegate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

2

EXHIBIT 2.03

 

FORM OF BORROWING REQUEST

 

	
   

  	
  Dated

  	
   

  	
   

  

 

Wells
Fargo Bank, National Association,

as
Administrative Agent

1525
West W.T. Harris Boulevard

Charlotte,
North Carolina  28262-0680

Attn:  Syndication Agency Services

 

Ladies
and Gentlemen:

 

This
Borrowing Request is delivered to you by Kinder Morgan Energy Partners, L.P.
(the “Company”), a
Delaware limited partnership, under Section 2.03 of the Credit
Agreement dated as of June 23 2010 (as restated, amended, modified,
supplemented and in effect, the “Credit
Agreement”), by and among the Company, the Subsidiary Borrower, the
Lenders party thereto, Wells Fargo Bank, National Association, as
Administrative Agent, and the other agents named therein.

 

1.             The Company hereby requests that
the Lenders make a Loan or Loans in the aggregate principal amount of
$                            
(the “Committed Loan” or
the “Committed Loans”).(1)

 

2.             The Company hereby requests that
the Committed Loan or Committed Loans be made on the following Business Day:
                                .(2)

 

3.             The Company hereby requests that
the Committed Loan or Committed Loans bear interest at the following interest
rate, plus the Applicable Margin, as set forth
below:

 

	
  Type of

  Committed Loan

  	
   

  	
  Principal

  Component of

  Committed Loan

  	
   

  	
  Interest

  Rate

  	
   

  	
  Interest Period

  (if applicable)

  	
   

  	
  Maturity Date for

  Interest Period

  (if applicable)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

4.             The Company hereby requests that
the funds from the Committed Loan or Committed Loans be disbursed to the
following bank account: 
                                                            .

 

(1)                                  Complete with an amount in
accordance with Section 2.03 of the Credit Agreement.

 

(2)                                  Complete with a Business Day
in accordance with Section 2.03 of the Credit Agreement.

 

 

5.             After giving effect to the
requested Committed Loan, the aggregate Credit Exposures, outstanding as of the
date hereof (including the requested Loans) does not exceed the maximum amount
permitted to be outstanding pursuant to the terms of the Credit Agreement.

 

6.             All of the conditions applicable to
the Committed Loans requested herein as set forth in the Credit Agreement have
been satisfied as of the date hereof and will remain satisfied to the date of
such Loans.

 

7.             All capitalized undefined terms used
herein have the meanings assigned thereto in the Credit Agreement.

 

IN
WITNESS WHEREOF, the undersigned have executed this Borrowing Request this
           day of
                              ,
            .

 

	
   

  	
  KINDER
  MORGAN ENERGY PARTNERS, L.P.,

  
	
   

  	
  as
  the Company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Kinder
  Morgan G.P., Inc.,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Kinder
  Morgan Management, LLC,

  
	
   

  	
   

  	
   

  	
  its
  Delegate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

2

EXHIBIT 2.06

 

FORM OF LETTER OF CREDIT REQUEST

 

	
   

  	
  Dated

  	
   

  	
   

  

 

Wells
Fargo Bank, National Association,

as
Administrative Agent

1525
West W.T. Harris Boulevard

Charlotte,
North Carolina  28262-0608

Attn:  Syndication Agency Services

 

and

[Name and address of Issuing Bank,

if the issuing Bank is not Wells Fargo]

Ladies
and Gentlemen:

 

This
Letter of Credit Request is delivered to you by Kinder Morgan Energy Partners
L.P. (the “Company”), a
Delaware limited partnership, under Section 2.06 of the Credit
Agreement dated as of June 23, 2010 (as restated, amended, modified,
supplemented, and in effect from time to time, the “Credit Agreement”), by and among the Company, the
Subsidiary Borrower, the Lenders party thereto, Wells Fargo Bank, National
Association, as Administrative Agent, and the other agents named therein.

 

The
Company hereby requests the issuance of a Letter of Credit under the Credit
Agreement, and in that connection sets forth below the information relating to
such Letter of Credit (the “Proposed
Letter of Credit”) as required by Section 2.06(c) of
the Credit Agreement.  The Proposed
Letter of Credit must be issued:

 

(a)           on or before
                                        ,
          (1)

 

(b)           for the benefit of 
                          
whose address is

 

(c)           In the amount of $

 

(d)           having an expiry date of
                                ,
        (2)

 

(e)           attached hereto is any special language to be incorporated
into the Proposed Letter of Credit.

 

or

 

The
Company hereby refers to Letter of Credit Number  (the “Expiring
Letter of Credit”) which has an existing expiry date of
                              .  The Company hereby requests 

 

(1)                                  Must be a date not earlier
than five Business Days after notice is given to the Issuing Bank.

 

(2)                                  Must comply with
Section 2.06(d) of the Credit Agreement.

 

 

that  [the expiry date of the Expiring Letter of
Credit be extended to 
                          .(2)]
[the Issuing Bank that has issued the Expiry Letter of Credit permit the expiry
date of the Expiring Letter of Credit be extended to                                  .(2)]1. After giving effect to the Proposed Letter of
Credit, neither (i) the sum of the Credit Exposures, plus
the aggregate principal amount of Competitive Loans nor (ii) the LC
Exposure of the Lenders exceeds the maximum amount permitted to be outstanding
pursuant to the terms of the Credit Agreement.

 

2.             All of the conditions applicable to
the Loans requested herein as set forth in the Credit Agreement have been
satisfied as of the date hereof and will remain satisfied to the date of the
Proposed Letter of Credit.

 

3.             All capitalized undefined terms
used herein have the meanings assigned thereto in the Credit Agreement.

 

IN
WITNESS WHEREOF, the undersigned have executed this Letter of Credit Request
this            day of
                              ,
          .

 

	
   

  	
  KINDER
  MORGAN ENERGY PARTNERS, L.P.,

  
	
   

  	
  as
  the Company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kinder
  Morgan G.P., Inc.,

  
	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Kinder
  Morgan Management, LLC,

  
	
   

  	
   

  	
  its
  Delegate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

2

EXHIBIT 2.07

 

	
  FORM OF NOTICE OF ACCOUNT DESIGNATION

  
	
   

  
	
   

  	
  Dated

  	
   

  	
   

  

 

Wells
Fargo Bank, National Association,

as
Administrative Agent

1525
West W.T. Harris Boulevard

Charlotte,
North Carolina  28262-0608

Attn:  Syndication Agency Services

 

Ladies
and Gentlemen:

 

This
Notice of Account Designation is delivered to you by Kinder Morgan Energy
Partners, L.P. (the “Company”), a Delaware limited partnership, under Section 2.07
of the Credit Agreement dated as of June 23, 2010 (as restated, amended,
modified, supplemented and in effect from time to time, the “Credit
Agreement”) by and among the Company, the Subsidiary Borrower, the Lenders
party thereto, Wells Fargo Bank, National Association, as Administrative Agent,
and the other agents named therein.

 

1.             The Administrative Agent is hereby
authorized to disburse all Loan proceeds into the following account(s):

 

Name
of Bank:

ABA Routing Number:

Account Number: 

Account Name:

 

2.             This authorization will remain in
effect until revoked or until a subsequent Notice of Account Designation is
provided to the Administrative Agent.

 

IN
WITNESS WHEREOF, the undersigned has executed this Notice of Account
Designation this           
day of
                                      ,
        .

 

	
   

  	
  KINDER
  MORGAN ENERGY PARTNERS, L.P.,

  	 

	
   

  	
  as
  the Company

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
  Kinder
  Morgan G.P., Inc.,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Kinder
  Morgan Management, LLC,

  
	
   

  	
   

  	
   

  	
  its
  Delegate

  
	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
   

  	 

	
   

  	
   

  	
  Name:

  	
   

  	 

	
   

  	
   

  	
  Title:

  	
   

  	 

 

EXHIBIT 2.08

 

	
  FORM OF INTEREST ELECTION REQUEST

  
	
   

  
	
   

  	
  Dated

  	
   

  	
   

  

 

Wells
Fargo Bank, National Association,

as
Administrative Agent

1525
West W.T. Harris Boulevard

Charlotte,
North Carolina  28262-0608

Attn:  Syndication Agency Services

 

Ladies
and Gentlemen:

 

This
irrevocable Interest Election Request (the “Request”) is delivered to you under Section 2.08
of the Credit Agreement dated as of June 23, 2010 (as restated, amended,
modified, supplemented and in effect from time to time, the “Credit Agreement”), by and
among Kinder Morgan Energy Partners, L.P., a Delaware limited partnership (the “Company”), the Subsidiary
Borrower, the Lenders party thereto (the “Lenders”),
Wells Fargo Bank, National Association as Administrative Agent, and the other
agents named therein.

 

1.             This Interest Election Request is
submitted for the purpose of:

 

(a)                                  [Converting] [Continuing] a
                        
Eurodollar Borrowing [into] [as] a                         
Borrowing.(1)

 

(b)                                 The aggregate outstanding
principal balance of such Committed Borrowing is
$                            .

 

(c)                                  The last day of the current
Interest Period for such Eurodollar Borrowing is
                          .(2)

 

(d)                                 The principal amount of such
Committed Borrowing to be [converted] [continued] is
$                          .(3)

 

(e)                                  The requested effective date
of the [conversion] [continuation] of such Committed Loan is                               .(4)

 

(f)                                    The requested Interest
Period applicable to the [converted] [continued] Eurodollar Borrowing is
                                        .(5)

 

(1)                                  Delete the bracketed
language and insert “Alternate Base Rate” or “LIBOR Rate”, as applicable, in
each blank.

 

(2)                                  Insert applicable date for
any Eurodollar Borrowing being converted or continued.

 

(3)                                  Complete with an amount in
compliance with Section 2.08 of the Credit Agreement.

 

(4)                                  Complete with a Business Day
in compliance with Section 2.08 of the Credit Agreement..

 

 

2.             All capitalized undefined terms
used herein have the meanings assigned thereto in the Credit Agreement.

 

IN
WITNESS WHEREOF, the undersigned has executed this Interest Election Request
this            day of
                                      ,
        .

 

	
   

  	
  KINDER
  MORGAN ENERGY PARTNERS, L.P.,

  
	
   

  	
  as the Company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Kinder
  Morgan G.P., Inc.,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Kinder
  Morgan Management, LLC,

  
	
   

  	
   

  	
   

  	
  its
  Delegate

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

(5)                                  Complete for each Eurodollar
Borrowing in compliance with the definition of the term “Interest Period”
specified in Section 1.01.

 

2

EXHIBIT 2.11

 

FORM OF NOTICE OF PREPAYMENT

 

Wells
Fargo Bank, National Association,

as
Administrative Agent

1525
West W.T. Harris Boulevard

Charlotte,
North Carolina  28262-0608

 

Attention:  Syndication Agency Services

 

Ladies
and Gentlemen:

 

This
irrevocable Notice of Prepayment is delivered to you by Kinder Morgan Energy
Partners, L.P. (the “Company”),
a Delaware limited partnership, under Section 2.11 of the Credit
Agreement dated as of June 23, 2010 (as restated, amended, modified,
supplemented and in effect from time to time, the “Credit Agreement”), by and among the Company, the
Subsidiary Borrower, the Lenders party thereto, Wells Fargo Bank, National
Association, as the Administrative Agent, and the other agents named therein.

 

1.             The Company hereby provides notice
to the Administrative Agent that the Company shall repay the following ABR
Loans and/or Eurodollar Loans in the amount of
$                          .(1)

 

 

2.             The Company shall repay the
above-referenced Loans on the following Business Day: 
                                      .(2)

 

 

3.             All capitalized undefined terms
used herein have the meanings assigned thereto in the Credit Agreement.

 

IN
WITNESS WHEREOF, the undersigned have executed this Borrowing Request this
           day of
                              ,
          .

 

	
   

  	
  KINDER
  MORGAN ENERGY PARTNERS, L.P.,

  
	
   

  	
  as
  the Company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Kinder
  Morgan G.P., Inc.,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Kinder
  Morgan Management, LLC,

  
	
   

  	
   

  	
   

  	
  its
  Delegate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

(1)                                  Complete with an amount in
accordance with Section 2.11(b) of the Credit Agreement.

 

(2)                                  Complete with a Business Day
in accordance with Section 2.11(b) of the Credit Agreement.

 

EXHIBIT 5.01

 

FORM OF COMPLIANCE CERTIFICATE

 

The
undersigned hereby certifies that he is the
                                                        
of KINDER MORGAN MANAGEMENT, LLC, a Delaware limited liability company, the
delegate of the KINDER MORGAN G.P., INC., a Delaware corporation, general
partner of KINDER MORGAN ENERGY PARTNERS, L.P., a Delaware limited partnership
(the “Company”), and
that as such he is authorized to execute this certificate on behalf of the
Company.  With reference to the Credit
Agreement dated as of June 23, 2010 (as restated, amended, modified,
supplemented and in effect from time to time, the “Agreement”) among the Company, the Subsidiary Borrower,
Wells Fargo Bank, National Association, as Administrative Agent, for the lenders
(the “Lenders”), and the
other agents named therein, which are or become a party thereto, and such
Lenders, the undersigned represents and warrants as follows (each capitalized
term used herein having the same meaning given to it in the Agreement unless
otherwise specified);

 

(a)           Attached hereto are
the detailed computations necessary to determine whether the Company is in
compliance with Sections 6.02 and 6.06  of the Agreement as of the end of the [fiscal
quarter][fiscal year] ending
                                .

 

(b)           There currently does
not exist any Default or Event of Default under the Agreement.

 

EXECUTED
AND DELIVERED this           
day of
                                ,
            .

 

	
   

  	
  KINDER
  MORGAN ENERGY PARTNERS, L.P.,

  
	
   

  	
  as
  the Company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Kinder
  Morgan G.P., Inc.,

  
	
   

  	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Kinder
  Morgan Management, LLC,

  
	
   

  	
   

  	
  its
  Delegate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:EXHIBIT
4.1

    

    NEITHER
THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
OTHER APPLICABLE STATE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES
LAWS.  NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE
HEREOF MAY BE SOLD, PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF
THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS.  THIS WARRANT MAY NOT
BE EXERCISED BY OR ON BEHALF OF A UNITED STATES PERSON UNLESS REGISTERED UNDER
THE SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.

     

    STOCK
PURCHASE WARRANT

     

    Warrant #
___

     

    To
Purchase [_____] Shares
of Common Stock of

     

    POWER
EFFICIENCY CORPORATION

     

    THIS
CERTIFIES that, for value received, [________________] (the “Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date hereof (the
“Initial Exercise Date”) and on or prior to the close of business on [          ], 2015 (the “Termination
Date”) but not thereafter, to subscribe for and purchase from POWER EFFICIENCY
CORPORATION, a corporation incorporated in the State of Delaware (the
“Company”), up to [_________] shares (the
“Warrant Shares”) of common stock, $0.001 par value, of the Company (the “Common
Stock”).  The purchase price of one share of Common Stock (the
“Exercise Price”) under this Warrant shall be [$______].  The Exercise
Price and the number of shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein.  In the event of any
conflict between the terms of this Warrant and the Securities Purchase Agreement
dated as of [month, date], 2010 pursuant to which this Warrant has been issued
(the “Purchase Agreement”), the Purchase Agreement shall
control.  Capitalized terms used and not otherwise defined herein
shall have the meanings set forth for such terms in the Purchase
Agreement.

     

    1.           Title to
Warrant.  Prior to the Termination Date and subject to
compliance with applicable laws and the terms hereof, this Warrant and all
rights hereunder are transferable, in whole or in part, at the office or agency
of the Company by the holder hereof in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed.

     

    2.           Authorization of
Shares.  The Company covenants that all shares of Common Stock
which may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant
in accordance with the other terms and conditions hereof, be duly authorized,
validly issued, fully paid and non-assessable and free from all taxes, liens and
charges in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.           Exercise of
Warrant.

     

    (a)           Except
as provided in Section 4 herein, exercise of the purchase rights represented by
this Warrant may be made at any time or times on or after the Initial Exercise
Date, and before the close of business on the Termination Date by the surrender
of this Warrant and the Notice of Exercise Form annexed hereto duly executed, at
the office of the Company (or such other office or agency of the Company as it
may designate by notice in writing to the registered holder hereof at the
address of such holder appearing on the books of the Company) and upon payment
of the Exercise Price of the shares thereby purchased by wire transfer or
cashier’s check drawn on a United States bank, the holder of this Warrant shall
be entitled to receive a certificate for the number of shares of Common Stock so
purchased.  Certificates for shares purchased hereunder shall be
delivered to the holder hereof within five (5) Trading Days after
the date on which this Warrant shall have been exercised as
aforesaid.  This Warrant shall be deemed to have been exercised and
such certificate or certificates shall be deemed to have been issued, and Holder
or any other person so designated to be named therein shall be deemed to have
become a holder of record of such shares for all purposes, as of the date the
Warrant has been exercised by payment to the Company of the Exercise Price and
all taxes required to be paid by Holder, if any, pursuant to Section 5 prior to
the issuance of such shares, have been paid.

     

    (b)           If
this Warrant shall have been exercised in part, the Company shall, at the time
of delivery of the certificate or certificates representing Warrant Shares,
deliver to Holder a new Warrant evidencing the rights of Holder to purchase the
unpurchased shares of Common Stock called for by this Warrant, which new Warrant
shall in all other respects be identical with this Warrant.

     

    (c)           Cashless
Exercise.  In the event the Warrant Shares are not registered
for resale under the Securities Act at any time Holder seeks to exercise all or
part of this Warrant, such portion of this Warrant then being exercised may also
be exercised at such time by means of a “cashless exercise” in which the Holder
shall be entitled to receive a certificate for the number of Warrant Shares
equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:

     

    
      (A) = the
closing price on the Trading Day immediately preceding the date on which Holder
elects to exercise this Warrant by means of a “cashless exercise,” as set forth
in the applicable Notice of Exercise;

    

    

    
      (B) = the
Exercise Price of this Warrant, as adjusted hereunder; and

    

    

    
      (X) = the
number of Warrant Shares that would be issuable upon exercise of this Warrant in
accordance with the terms of this Warrant if such exercise were by means of a
cash exercise rather than a cashless exercise.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d)           Mechanics of
Exercise.

     

    (i)           Delivery of Certificates
Upon Exercise.  This Warrant shall be deemed to have been
exercised on the first date on which both the Notice of Exercise and payment of
the Exercise Price shall have been delivered to the Company.  The
Warrant Shares shall be deemed to have been issued, and Holder or any other
person so designated to be named therein shall be deemed to have become a holder
of record of such shares for all purposes, as of the date the Warrant has been
exercised, with payment to the Company of the Exercise Price (or by cashless
exercise) and all taxes required to be paid by the Holder, if any, prior to the
issuance of such shares, having been paid.

    

    (ii)          Delivery of New Warrants
Upon Exercise.  If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.

    

    (e)           Definitions.

    

    (i)           “Trading
Day” means a day on which the principal Trading Market is open for
trading.

     

    (ii)          “Trading
Market” means any of the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the NYSE
Alternext, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange or the OTC Bulletin Board (or
any successors to any of the foregoing).

     

    4.           No Fractional Shares or
Scrip.  No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant.  In lieu
thereof, any fractional shares to which Holder is entitled shall be rounded up
to the nearest whole share.

     

    5.           Charges, Taxes and
Expenses.  Issuance of certificates for shares of Common Stock
upon the exercise of this Warrant shall be made without charge to the holder
hereof for any issue or transfer tax or other incidental expense in respect of
the issuance of such certificate, all of which taxes and expenses shall be paid
by the Company, and such certificates shall be issued in the name of the holder
of this Warrant or in such name or names as may be directed by the holder of
this Warrant; provided, however, in the event certificates for shares of Common
Stock are to be issued in a name other than the name of the holder of this
Warrant, this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the holder hereof; and the
Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.           Closing of
Books.  The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this
Warrant.

     

    7.           Transfer, Division and
Combination.

     

    (a)           Subject
to compliance with any applicable securities laws, transfer of this Warrant and
all rights hereunder, in whole or in part, shall be registered on the books of
the Company to be maintained for such purpose, upon surrender of this Warrant at
the principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer.  Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled.  A Warrant, if properly assigned,
may be exercised by a new holder for the purchase of shares of Common Stock
without having a new Warrant issued.

     

    (b)           This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by Holder or its agent or attorney.  Subject to compliance with
Section 7(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.

     

    (c)           The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this Section 7.

     

    (d)           The
Company agrees to maintain, at its aforesaid office, books for the registration
and the registration of transfer of the Warrants.

     

    8.           No Rights as Shareholder
until Exercise.  This Warrant does not entitle the holder
hereof to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof.  Upon the surrender of this Warrant and
the payment of the aggregate Exercise Price, the Warrant Shares so purchased
shall be and be deemed to be issued to such holder as the record owner of such
shares as of the close of business on the later of the date of such surrender or
payment.

     

    9.           Loss, Theft, Destruction or
Mutilation of Warrant.  The Company covenants that upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant certificate or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which shall not include the
posting of any bond), and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will make and deliver a new Warrant
or stock certificate of like tenor and dated as of such cancellation, in lieu of
such Warrant or stock certificate.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    10.         Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall be a
Saturday, Sunday or a legal holiday, then such action may be taken or such right
may be exercised on the next succeeding day not a Saturday, Sunday or legal
holiday.

     

    11.         Adjustments of Exercise
Price and Number of Warrant Shares; Stock Splits, etc. The number and
kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following.  In case the Company shall (i) pay
a dividend in shares of Common Stock or make a distribution in shares of Common
Stock to holders of its outstanding Common Stock, (ii) subdivide its outstanding
shares of Common Stock into a greater number of shares of Common Stock, (iii)
combine its outstanding shares of Common Stock into a smaller number of shares
of Common Stock or (iv) issue any shares of its capital stock in a
reclassification of the Common Stock, then the number of Warrant Shares
purchasable upon exercise of this Warrant immediately prior thereto shall be
adjusted so that the holder of this Warrant shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which he
would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof.  Upon each such adjustment of the kind
and number of Warrant Shares or other securities of the Company which are
purchasable hereunder, the holder of this Warrant shall thereafter be entitled
to purchase the number of Warrant Shares or other securities resulting from such
adjustment at an Exercise Price per Warrant Share or other security obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares purchasable pursuant hereto immediately prior to
such adjustment and dividing by the number of Warrant Shares or other securities
of the Company resulting from such adjustment.  An adjustment made
pursuant to this paragraph shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.

    

    12.         Reorganization
Reclassification Merger Consolidation or Disposition of
Assets.   In case the Company shall reorganize its
capital, reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation (“Other
Property”), are to be received by or distributed to the holders of Common Stock
of the Company, then Holder shall have the right thereafter to receive, upon
exercise of this Warrant, the number of shares of common stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event.  In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of shares of
Common Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section
12.  For purposes of this Section 12, “common stock of the successor
or acquiring corporation” shall include stock of such corporation of any class
which is not preferred as to dividends or assets over any other class of stock
of such corporation and which is not subject to redemption and shall also
include any evidences of indebtedness, shares of stock or other securities which
are convertible into or exchangeable for any such stock, either immediately or
upon the arrival of a specified date or the happening of a specified event and
any warrants or other rights to subscribe for or purchase any such
stock.  The foregoing provisions of this Section 12 shall similarly
apply to successive reorganizations, reclassifications, mergers, consolidations
or disposition of assets.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    13.         Voluntary Adjustment by the
Company.  The Company may at any time during the term of this
Warrant reduce the then current Exercise Price to any amount and for any period
of time deemed appropriate by the Board of Directors of the
Company.

     

    14.         Notice of
Adjustment.  Whenever the number of Warrant Shares or number or
kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
promptly mail by registered or certified mail, return receipt requested, to the
holder of this Warrant notice of such adjustment or adjustments setting forth
the number of Warrant Shares (and other securities or property) purchasable upon
the exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made.  Such notice, in the
absence of manifest error, shall be conclusive evidence of the correctness of
such adjustment.  Notwithstanding the foregoing, if the Company fails
to give notice to the Holder of any required adjustment set forth in this
Warrant, then so long as the Company has made the adjustment(s) required by this
Warrant, the failure of the Company to give notice of such adjustment to the
Holder will not cause the Company to incur any liability.

     

    15.         Notice of Corporate
Action.  If at any time:

     

    (a)           the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of stock
of any class or any other securities or property, or to receive any other right,
or

     

    (b)           there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to, another
corporation or,

     

    (c)           there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    then, in
any one or more of such cases, the Company shall give to Holder (i) at least 20
days’ (or as many days as is reasonably practicable) prior written notice of the
date on which a record date shall be selected for such dividend, distribution or
right or for determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
liquidation or winding up, and (ii) in the case of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, at least 20 days’ prior written notice
of the date when the same shall take place. Such notice in accordance with the
foregoing clause also shall specify (i) the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, the date on
which the holders of Common Stock shall be entitled to any such dividend,
distribution or right, and the amount and character thereof, and (ii) the date
on which any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up is to take place
and the time, if any such time is to be fixed, as of which the holders of Common
Stock shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such disposition, dissolution, liquidation or
winding up.  Each such written notice shall be sufficiently given if
addressed to Holder at the last address of Holder appearing on the books of the
Company and delivered in accordance with Section 18(c).

     

    16.         Authorized
Shares.  The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this
Warrant.  The Company further covenants that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of the purchase rights
under this Warrant.  The Company will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the principal market upon which the Common Stock may be
listed.

     

    The
Company shall not by any action, including, without limitation, amending its
articles of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder against
impairment.  Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the amount payable therefor
upon such exercise immediately prior to such increase in par value, (b) take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and non-assessable shares of Common Stock
upon the exercise of this Warrant, and (c) use commercially reasonable efforts
to obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under this Warrant.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Before
taking any action which would result in an adjustment in the number of shares of
Common Stock for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

     

    17.         No Net-Cash
Settlement.  In no event will any holder of this Warrant be
entitled to receive a net-cash settlement in lieu of physical settlement in
shares of Common Stock, regardless of whether any of such holder’s Warrant
Shares are registered pursuant to an effective registration
statement.

     

    18.         Miscellaneous.

     

    (a)           Jurisdiction.  This
Warrant shall constitute a contract under the laws of Delaware, without regard
to its conflict of law, principles or rules, and be subject to arbitration
pursuant to the terms set forth in this
Warrant.

     

    (b)           Restrictions.  The
holder hereof acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant, if not registered, will have restrictions upon resale imposed by
state and federal securities laws.

     

    (c)           Notices.  Any
notice, request or other document required or permitted to be given or delivered
to the holder hereof by the Company shall be delivered in accordance with the
notice provisions of the Purchase Agreement.

     

    (d)           Remedies.  Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant.  The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be
adequate.

     

    (e)           Successors and
Assigns.  Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the successors and
permitted assigns of Holder. The provisions of this Warrant are intended to be
for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.

     

    (f)           Amendment.  This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.

     

    (g)           Severability.  Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.

     

    (h)           Headings.  The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (i)           Arbitration.  In
the event any controversy or dispute shall arise between the parties under, out
of, in connection with, or relating to this Warrant or the breach thereof, the
party initiating such controversy or making such claim shall provide to the
other party notice containing a brief and concise statement of the initiating
party’s claims, together with relevant facts supporting
them.  Following the date of said notice, the parties shall make good
faith efforts to settle the dispute.  In the event the parties have
been unable to reach accord using the procedures set forth in this Section 13,
either party may seek binding arbitration before three (3) arbitrators in
accordance with the rules of the American Arbitration Association
(“AAA”).  Each party shall appoint one arbitrator and the appointed
arbitrators shall in turn appoint the third arbitrator.  In the event
the two appointed arbitrators are unable to agree upon the third arbitrator, the
AAA shall designate the third arbitrator to arbitrate the controversy or
dispute.  The arbitration shall be held in Las Vegas,
Nevada.  Within thirty (30) days after initiation of arbitration, the
parties shall reach agreement upon and thereafter follow procedures assuring
that the arbitration will be concluded and the award rendered within no more
than six (6) months from selection of the three arbitrators.  Failing
such agreement, AAA will design, and the parties will follow, such
procedures.  THE ARBITRATORS SHALL NOT AWARD ANY PARTY PUNITIVE OR
EXEMPLARY DAMAGES, AND EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT TO SEEK
SUCH DAMAGES.  Each party has the right before or during the
arbitration to seek and obtain from the appropriate court provisional remedies
such as attachment, preliminary injunction, replevin, etc., to avoid irreparable
harm, maintain the status quo or preserve the subject matter of the
arbitration.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.

    Dated:
[__], 2010

     

    
      
        
          	 
      	
                  POWER
      EFFICIENCY CORPORATION

                
	 
      	 
      
	 
      	
                  By:

                	 
      
	 
      	
                  Name:  

                	 
      
	 
      	
                  Title:

                	 
      

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    NOTICE OF
EXERCISE

     

    To:  Power
Efficiency Corporation.

     

    (1)           The
undersigned hereby elects to purchase ________ shares of Common Stock (the
“Common Stock”), of Power Efficiency Corporation, a Delaware corporation
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if
any.

     

    (2)           Please
issue a certificate or certificates representing said shares of Common Stock in
the name of the undersigned or in such other name as is specified
below:

     

    
      
        
          
            
              
                
                  
                    
                      
                        	 
      	 
      	 
      	 
      	 
      
	 
      	
                                (Name)

                              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 	 	 	 	 
	 
      	
                                (Address)

                              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                Dated:

                              	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                                Signature

                              	 
      	 
      

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ASSIGNMENT
FORM

     

    (To
assign the foregoing warrant, execute

    this form
and supply required information.

    Do not
use this form to exercise the warrant.)

     

    FOR VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to

     

    _____________________________________________________
whose address is
_____________________________________________________________________________.

     

    Dated:                                                      ,
           

    

    Holder’s
Signature:                                                        

     

    Holder’s
Address:                                                          

     

    Signature
Guaranteed:                                                                                                                               

     

    NOTE:  The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company.  Officers of corporations and those acting in an fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.

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