Document:

CELERITY                                                                  PURCHASE ORDER

2005/AUG/22/MON 09:48 AM  CELERITY INC.   FAX No. 714 921 0987   P. 002

CELERITY                                                                 PURCHASE ORDER

Celerity Group, Inc.                                                         PURCHASE ORDER NO: S82558

22600 Savi Ranch Parkway Yorba Lind, California 92887

Telephone 714.279.3500 Facsimile 714.921.0987

www.celerity.net                                                                          PURCHASE ORDER DATE: 08-19-05

CAL-RESALE TAX ID: 97091769

VENDOR                                                                                                      SHIP TO

8607                                                                                                              Yorba Linda Mfg.

PROBE MANUFACTURING IND. INC                                                     Unit Instruments, Inc.

3050 PULLMAN STREET                                                                           22600 Savi Ranch Parkway

COSTA MESA, CA 92626                                                                           Yorba Linda, CA 92887

USA                                                                                                               USA

Phone: (714) 424-2960                                            Fax: (714) 424-2972

	CONF

	CONTACT

	SHIP VIA

	F.D.B

	RESALE

	TERMS

	CONF

	Edward Cummings

	Vendor Truck

	DEST

	 	2% 10 1% 30 NE

DESCRIPTION

***Special Instructions:

All ESD sensitive components and assemblies shall be handled in compliance with ANSI/ESD $20.20 or Celerity approved equivalent program from the receipt to shipping.  Anti-static or non-conductive packaging material must be utilized for all ESD sensitive materials.  The supplier shall not change materials, methods of manufacturing, or processing that will affect form, fit, or function of Celeritys product.  The supplier shall not deviate from print requirements.  Any changes must be approved by Celerity prior to change implementation.  Supplier must include a copy of their first article inspection report with initial shipments for all parts which are produced for the first time, delivered to a new revision level, or where there has been a process change.

Form MAT-001-001S. Rev C (Refer to MAT-100-0002

                                                                                    TOTAL PURCHASE ORDER AMOUNT: $20,800.00

                                                                                    BY: (signed by buyer)

                                                                                    BY: (singed by manager.director)

INSTRUCTIONS:

1.

NOTIFY BUYER IMMEDIATELY.  IF YOU ARE UNABLE TO MEET ON DOCK DATE(S).

2.

THE P.O. NUMBER MUST BE SPECIFIED ON ALL PACKAGES.  BILLS OF LANDING INVOICES, PACKING SLIPS AND CORRESPONDENCE.

3.

REFER TO EE COMPLIANCE STATEMENT ON REVERSE

4.

IF APPLICABLE, MSDS REQUIRED WITH EACH SHIPMENTCONFIRMING- DO NOT DUPLICATE                                                PAGE 1

CONFIRMING- DO NOT DUPLICATE                                                PAGE 1

Purchase Order                  NEWPORT              Newport Corporation

                                                                                                           1791 Deere Avenue, Irvine, CA 92606 USA

                                                                                                           Tel: 949/863-3144 Fax: 949/253-1240

PURCHASE ORDER NO. P350947-00

VENDOR                                                                                   SHIP TO

PROBE MANUFACTURING INC                                           NEWPORT CORPORATION

3050 PULLMAN STREET                                                        1791 DEERE AVE.

COSTA MESA, CA 92626                                                        IRVINE CA 92606

USA                                                                                            USA

ORDER PLACED WITH                                                         BILL TO

Ed Cummings                                                                              NEWPORT CORPORATION

P.O. Box 19607

IRVINE CA 92623-9607

 

USA

Phone 714.424.2960 x                           FAX 714.424.2972                   IN US DOLLARS

RESALE PERMIT NUMBER CA SR BA 20-043121 FEDERAL ID NUMBER CA 94-0849175, CA KNS 94-254880 MA 94-3596820

	PO DATE

	VENDOR

	SHIP PREPAID VIA

	F.O.B.

	TERMS

	DELIVERY DATE

	7/01/05

	P1431

	U.P.S.

	SHIPPING POINT

	1% 10 DAYS NET 30

	SEE BODY

BUYER: Jeff Scofield                                                                                  14PRO

PHONE: 949.224.0506

	 	QUANTITY

	U/M

	UNIT PRICE

	AMOUNT

	1 ITEM 9102930010

	 	 	 	 
	ENG DWG 9102930010

	 	 	 	 
	PCB, ASSY, 1930/2930 KEY/DISP BD

	 	 	 	 
	*BLANKET

	50.000

	EA

	46.46

	 
	TOTAL BLANKET ORDER QTY. 88 SEE BELOW

	 	 	 	 
	#0001 DELIVER BY 9/26/06

	25.000

	EA

	46.46

	1161.50

	#0002 DELIVER BY 11/17/05

	25.000

	EA

	46.46

	1161.50

	TOTAL OUTSTANDING

	50.000

	 	 	2323.00

TOTAL

2323.00

BY 

PURCHASING08/16/2005   10:58   FAX

08/16/2005   10:58   FAX 17604311504  ASYMTEK   PURCHASING     →  PROBE  005/005

	NUMBER

	99853

	DATE

	08-16-05

	CHG ORDER

	 
	PAGE

	1

Asymtek®

            PURCHASE ORDER              

       A NORDSON COMPANY

2762 Loker Avenue West

Carlsbad, California 92010-6603

Tel. (760) 431-1919 Fax (760) 431-1504

Accounts Payable Direct Fax (760) 930-7430

VENDOR:

      7447                                                                                                   SHIPPING ADDRESS

      PROBE MANUFACTURING INDUSTRIES                                  ASYMTEK

      3050 PULLMAN ST                                                                         2762 LOKER AVE WEST

      COSTA MESA,  CA 92626                                                              CARLSBAD,  CA 92010-6603

	ATTENTION  

	PHONE

	FAX

	OUR CONTACT

	PHONE

	FAX

	EMAIL

	PETER SALMI

	714-424-2960x118

	714-424-2972

	CAROL TILLINGHAST

	760-930-3353

	760-431-1504

	ctillinghast@asymtek.com

	SHIP VIA

	TERMS

	F.O.B.

	ACK REQ’D

	CONFIRMING PO?

	REQUESTOR

	TAXABLE

	UPS GROUND

	1.00%/10/30

	VENDOR

	YES

	NO

	CAROL

	NO

	LI#      

	QTY

	UDM

	DUE DATE

	OUR PART #

	REV

	DESCRIPTION

	VENDOR PART #

	UNIT PRICE

	EXTENSION

1

33        EA                10-17-05          7200422                D               PWA, MAIN                                                                            479.580                            15,826.14

30        EA                11-21-05

(SAME) 

       D

                    479.580                            14,387.40

30        EA

              12-19-05             (SAME)             D

                    479.580

                    14,387.40

     _ _ _ _ _ _ _ _ _ _ _

TOTAL PURCHASE              $      44, 600.94

(Handwritten)

S/O 4459

W/O  8300

         8301

        8302

Please confirm price &

Delivery of this NEW order

                                                      

	AUTHORIZED SIGNATURE

                          ________________________________________________________________________________________________________________ 

(MPO-13)                                                                                                                           VENDOR COPYPurchase Order from ITW JETLINE ENGINEERING                             Page 1 of 1

Purchase Order from ITW JETLINE ENGINEERING                             Page 1 of 1

Purchase Order from ITW JETLINE ENGINEERING for Vendor PROBE MANUFACTURING

PO#

0070172 00

PO Date:

08/17/05

Buyer:

KIRK HAYWARD

Ship Via:

VENDOR TRUCK

F. O. B.:

ORIGIN

Terms:

NET 30

Vendor:

PROBE MANUFACTURING

Ship to: ITW JETLINE ENGINEERING

3050 PULLMAN ST.

15 GOODYEAR STREET

COSTA MESA CA 92626

IRVINE CA 92618

	Line #

	Part

	Rev

	Loc

	UM

	Part Description

	Qty Ordered

	Unit Price($)

	Extended Price ($)

	Due Date

	001

	9690

	 	 	EA

	u-PROCESSOR ALC CONTROL

	16.00000

	1,787.43

	28,598.88

	10/15/05

	002

	9690

	 	 	EA

	u-PROCESSOR ALC CONTROL

	16.00000

	1,787.43

	28,598.88

	12/15/05

TOTAL

($)

        57,197.76Credit Agreement

    
      

    

    
      Exhibit
        10.1

      

      

      

      

      

      

      

      FOURTH
        AMENDED AND RESTATED 

      REVOLVING
        CREDIT AGREEMENT

      

      DATED
        AS
        OF SEPTEMBER 29, 2005

      

      BY
        AND
        AMONG

      

      SOUTHERN
        UNION COMPANY

      

      as
        the
        Borrower

      

      AND

      

      THE
        BANKS
        NAMED HEREIN

      

      as
        the
        Banks

      

      AND

      

      JPMORGAN
        CHASE BANK, N.A.

      

      as
        the
        Administrative Agent

      AND

      BANK
        OF
        AMERICA, NA

      

      as
        the
        Syndication Agent

      AND

      

      J.P.
        MORGAN SECURITIES INC. &

      WACHOVIA
        CAPITAL MARKETS, LLC

      

      as
        the
        Co-Book Runners and Co-Lead Arrangers

      

      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

          
          

        

      

      FOURTH
        AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

      

      

      Reference
        is hereby made to that certain Third Amended and Restated Revolving Credit
        Agreement dated as of May 28, 2004, executed by and between SOUTHERN UNION
        COMPANY, a corporation organized under the laws of Delaware (the “Borrower”),
        the financial institutions listed on the signature pages of said Revolving
        Credit Agreement (each of said financial institutions now or hereafter a
        party
        to said Revolving Credit Agreement being hereinafter referred to collectively
        as
“Banks” and individually as a “Bank”), and JPMORGAN CHASE BANK, a New York
        banking corporation association now known as JPMORGAN CHASE BANK, N.A., a
        national banking association (“JPMorgan”), in its capacity as agent (the
“Agent”) for the Banks. Said Third Amended and Restated Revolving Credit
        Agreement has been previously amended by that certain First Amendment to
        Third
        Amended and Restated Revolving Credit Agreement dated November 9, 2004, executed
        by and among the Borrower, the Agent and the Majority Banks, and said Third
        Amended and Restated Revolving Credit Agreement, as previously amended, is
        referred to herein as the “Original Agreement.”

      

      As
        a
        result of certain discussions between the Borrower, the Agent and the Banks,
        the
        parties to the Original Agreement now desire to amend and restate the Original
        Agreement in its entirety. Accordingly, the Original Agreement is hereby
        amended
        and restated in its entirety to hereafter be and read as follows:

      

      SOUTHERN
        UNION COMPANY, a corporation organized under the laws of Delaware (hereinafter
        called the “Borrower”), the financial institutions listed on the signature pages
        hereof (collectively, the “Banks” and individually, a “Bank”), JPMORGAN CHASE
        BANK, N.A., a national banking association (“JPMorgan”), in its capacity as
        administrative agent (the “Agent”) for the Banks hereunder, and BANK OF AMERICA,
        NA, in its capacity as syndication agent (“Syndication Agent”) for the Banks
        hereunder, hereby agree as follows:

       

      

      CERTAIN
        DEFINITIONS.
        As used
        in this Agreement, the following terms shall have the following
        meanings:

       

      “Additional
        Costs”
        shall
        mean, with respect to any Rate Period in the case of any Eurodollar Rate
        Loan,
        all costs, losses or payments, as determined by any Bank in its sole and
        absolute discretion (which determination shall be conclusive in the absence
        of
        manifest error) that such Bank or its Domestic Lending Office or its Eurodollar
        Lending Office does, or would, if such Eurodollar Rate Loan were funded during
        such Rate Period by the Domestic Lending Office or the Eurodollar Lending
        Office
        of such Bank, incur, suffer or make by reason of: 

       

      (a) any
        and
        all present or future taxes (including, without limitation, any interest
        equalization tax or any similar tax on the acquisition of debt obligations,
        or
        any stamp or registration tax or duty or official or sealed papers tax),
        levies,
        imposts or any other charge of any nature whatsoever imposed by any taxing
        authority on or with regard to any aspect of the transactions contemplated
        by
        this Agreement, except such taxes as may be measured by the overall net income
        of such Bank or its Domestic Lending Office or its Eurodollar Lending Office
        and
        imposed by the jurisdiction, or any political subdivision or taxing authority
        thereof, in which such Bank's Domestic Lending Office or its Eurodollar Lending
        Office is located; and

       

      (b) any
        increase in the cost to such Bank of agreeing to make or making, funding
        or
        maintaining any Eurodollar Rate Loan because of or arising from (i) the
        introduction of, or any change (other than any change by way of imposition
        or
        increase of reserve requirements, in the case of any Eurodollar Rate Loan,
        included in the Eurodollar Rate Reserve Percentage) in or in the interpretation
        or administration of, any law or regulation or (ii) the compliance with any
        request from any central bank or other governmental authority (whether or
        not
        having the force of law).

       

      “Additional
        Offering”
        shall
        mean, collectively, the previous issuance, offering and sale in any offering
        or
        issuance of capital stock, Equity-Preferred Securities or any other equity
        interests in the Borrower (to the extent permitted under Section 10.5), where
        all net cash proceeds thereof were applied to finance or refinance a portion
        of
        the acquisition costs for the Cross Country Acquisition.

       

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

       

      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

          
          

        

      

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

       

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

       

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

       

      “Alternate
        Base Rate”
        shall
        mean, for any day, a rate, per annum (rounds upward to the nearest 1/16 of
        1%)
        equal to: (a) the greatest of (i) the Prime Rate (computed on the basis of
        the
        actual number of days elapsed over a year of 365 or 366 days, as the case
        may
        be) in effect on such day; or (ii) the Federal Funds Rate in effect for such
        day
plus
        one-half
        of one percent (1/2%) (computed on the basis of the actual number of days
        elapsed over a year of 360 days).

       

      “Alternate
        Base Rate Loan”
        shall
        mean any Loan which bears interest at the Alternate Base Rate.

       

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

       

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

       

      “Assignment
        and Acceptance”
        shall
        have the meaning set forth in Section 13.13.

       

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

       

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

       

      “Borrowing
        Date”
        shall
        mean a date upon which the Borrower has requested a Loan is to be made in
        a
        Notice of Borrowing delivered pursuant to Section 2.1.

       

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

       

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

       

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

       

      “Cash
        Interest Expense”
        shall
        mean, for any period, total interest expense to the extent paid in cash
        (including the interest component of Capitalized Lease Obligations and
        capitalized interest and all dividends and interest paid on or with respect
        to
        Borrower’s Structured Securities) of the Borrower and any Subsidiary for such
        period all as determined in conformity with GAAP.

       

      “CCE
        Acquisition”
        shall
        mean CCE Acquisition LLC, a Delaware limited liability company formed by
        the
        Borrower for the purpose of ultimately owning and holding 50% of all issued
        and
        outstanding equity interest in CCE Holdings. 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      “CCE
        Group”
        means
        CCE Holdings and its Subsidiaries.

       

      “CCE
        Holdings”
        shall
        mean CCE Holdings LLC, a Delaware limited liability company.

       

      “CCE
        Holdings LLC Agreement”
        shall
        mean the Limited Liability Company Agreement of CCE Holdings dated as June
        18,
        2004, as amended from time to time, among the members of CCE
        Holdings.

       

      “Closing
        Date”
        shall
        mean September 29, 2005.

       

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

       

      “Commitment”
        shall
        have the meaning set forth in Section 2.1(a) and “Commitments” shall mean,
        collectively, the Commitments of all of the Banks.

       

      “Consolidated
        Net Income”
        shall
        mean for any period the consolidated net income of the Borrower and all
        Subsidiaries, determined in accordance with GAAP, for such period.

       

      “Consolidated
        Net Worth”
        shall
        mean, for any period for the Borrower and all Subsidiaries, (a) the sum of
        the
        following consolidated items, all determined in accordance with GAAP and
        without
        duplication: the consolidated stockholders' equity of all classes of stock
        (whether common, preferred, mandatorily convertible preferred or preference)
        of
        the Borrower and its Subsidiaries; the Equity-Preferred Securities; the other
        preferred securities of the Borrower’s Subsidiaries not constituting
        Equity-Preferred Securities; and the minority interests in the Borrower’s
        Subsidiaries, less
        (b) the
        sum of the following consolidated items, without duplication: the book amount
        of
        any deferred charges (including, but not limited to, unamortized debt discount
        and expenses, organization expenses, experimental and development expenses,
        but
        excluding prepaid expenses) that are not permitted to be recovered by the
        Borrower or its applicable Subsidiaries under rates permitted under rate
        tariffs, plus
        (c) the
        sum of all amounts contributed or paid by the Borrower to the Rabbi Trusts
        for
        purposes of funding the same, but only to the extent such contributions and
        payments are required to be deducted from the consolidated stockholders’ equity
        of the Borrower and its Subsidiaries in accordance with GAAP.

       

      “Consolidated
        Total Capitalization”
        shall
        mean at any time the sum of: (a) Consolidated Net Worth at such time;
plus
        (b) the
        principal amount of outstanding Debt (other than Equity-Preferred Securities
        (to
        the extent included in Debt of the Borrower and its Subsidiaries) not to
        exceed
        10% of Consolidated Total Capitalization [calculated for purposes of this
        clause
        without reference to any Equity-Preferred Securities]) of the Borrower and
        its
        Subsidiaries.

       

      “Consolidated
        Total Indebtedness”
        shall
        mean all Debt of the Borrower and all Subsidiaries including any current
        maturities thereof, plus,
        without
        duplication, all amounts outstanding under Standby Letters of Credit and,
        without duplication, all Facility Letter of Credit Obligations, less,
        without
        duplication and to the extent included in Debt of the Borrower and its
        Subsidiaries, Equity-Preferred Securities not to exceed 10% of Consolidated
        Total Capitalization (calculated for purposes of this clause without reference
        to any Equity-Preferred Securities).

       

      “Cross
        Country”
        shall
        mean CrossCountry Energy, LLC, a Delaware limited liability
        company.

       

      “Cross
        Country Acquisition”
        shall
        mean the acquisition by CCE Holdings of 100% of all issued and outstanding
        equity interest in Cross Country in accordance with the Cross Country
        Acquisition Agreement, so long as such acquisition is in substantial compliance
        with the following specified terms:

       

      (a) immediately
        after the consummation of such acquisition, Cross Country is a wholly-owned
        Subsidiary of CCE Holdings;

       

      (b) the
        aggregate consideration paid for all equity interest in Cross Country shall
        be
        approximately $2,450,000,000 (which amount includes the assumption of
        approximately $461,000,000 of outstanding Debt of Transwestern Pipeline Company
        and is subject to customary purchase price adjustment as set forth in the
        Cross
        Country Acquisition Agreement);

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      (c) neither
        the Borrower nor any of its Subsidiaries shall have, incur or assume any
        liability with respect to any Debt of Cross Country and its Subsidiaries
        immediately after the consummation of such acquisition; and

       

      (d) all
        material requisite approvals and consents from any Governmental Authority
        with
        respect to such acquisition shall have been received by the Borrower and
        its
        Subsidiaries in a form acceptable to the Agent.

       

      “Cross
        Country Acquisition Agreement”
        shall
        mean that certain Purchase Agreement dated as of June 24, 2004 and amended
        by
        Amendment No. 1 dated as of September 1, 2004, by and among Enron Operations
        Services, LLC, Enron Transportation Services, LLC, EOC Preferred, L.L.C.
        and
        Enron Corp., as sellers, and CCE Holdings, as purchaser, as the same may
        hereafter be amended (the form of any such amendment to be approved by the
        Agent, such approval not to be unreasonably withheld, conditioned or
        delayed).

       

      “Cross
        Country Acquisition Closing Date”
        means
        the date on which the Cross Country Acquisition is consummated.

       

      “Debt”
        means
        (without duplication), for any Person indebtedness for money borrowed determined
        in accordance with GAAP but in any event including, (a) indebtedness of such
        Person for borrowed money or arising out of any extension of credit to or
        for
        the account of such Person (including, without limitation, extensions of
        credit
        in the form of reimbursement or payment obligations of such Person relating
        to
        letters of credit issued for the account of such Person) or for the deferred
        purchase price of property or services, except indebtedness which is owing
        to
        trade creditors in the ordinary course of business and which is due within
        thirty (30) days after the original invoice date; (b) indebtedness of the
        kind
        described in clause (a) of this definition which is secured by (or for which
        the
        holder of such Debt has any existing right, contingent or otherwise, to be
        secured by) any Lien upon or in Property (including, without limitation,
        accounts and contract rights) owned by such Person, whether or not such Person
        has assumed or become liable for the payment of such indebtedness or
        obligations; (c) Capitalized Lease Obligations of such Person; (d) obligations
        under direct or indirect Guaranties other than Guaranties issued by the Borrower
        covering obligations of the Southern Union Trusts under the Structured
        Securities. Whenever the definition of Debt is being used herein in order
        to
        compute a financial ratio or covenant applicable to the consolidated business
        of
        the Borrower and its Subsidiaries, Debt which is already included in such
        computation by virtue of the fact that it is owed by a Subsidiary of the
        Borrower will not also be added by virtue of the fact that the Borrower has
        executed a guaranty with respect to such Debt that would otherwise require
        such
        guaranteed indebtedness to be considered Debt hereunder. Nothing contained
        in
        the foregoing sentence is intended to limit the other provisions of this
        Agreement which contain limitations on the amount and types of Debt which
        may be
        incurred by the Borrower or its Subsidiaries.

       

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

       

      “Default”
        shall
        mean any of the events specified in Section 11, whether or not there has
        been
        satisfied any requirement in connection with such event for the giving of
        notice, or the lapse of time, or the happening of any further condition,
        event
        or act.

       

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

       

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

       

      “EBDIT”
        shall
        mean for any period the sum of (a) consolidated net earnings for the Borrower
        and its Subsidiaries (excluding for all purposes hereof all extraordinary
        items), plus
        (b) each
        of the following to the extent actually deducted in deriving such net earnings:
        (i) depreciation and amortization expense; (ii) interest expense; (iii) federal
        and state income taxes; and (iv) dividends charged against income on or with
        respect to Structured Securities, in each case before adjustment for
        extraordinary items, as shown in the financial statements of
        Borrower

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      and
        its
        Subsidiaries referred to in Section 7.2 hereof (excluding for all
        purposes
        hereof all extraordinary items), and determined in accordance with GAAP,
        and (c)
plus
        (or
minus,
        if
        applicable) the net amount of non-cash deductions from (or additions to,
        if
        applicable) such net earnings for such period attributable to fluctuations
        in
        the market price(s) of securities which the Borrower is obligated to purchase
        in
        future periods under any of the Rabbi Trusts, but only to the extent that
        such
        deductions (or additions, if applicable) are required to be taken in accordance
        with GAAP.

       

      “Eligible
        Assignee”
        shall
        mean: (i) any Bank, or any Affiliate of any Bank, any Approved Fund, or any
        institution 100% of the voting stock of which is directly, or indirectly
        owned
        by such Bank or by the immediate or remote parent of such Bank; or (ii) a
        commercial bank, a foreign branch of a United States commercial bank, a domestic
        branch of a foreign commercial bank or other financial institution having
        in
        each case assets in excess of $1,000,000,000.00.

       

      “Environmental
        Law”
        shall
        mean (a) the Comprehensive Environmental Response, Compensation and Liability
        Act of 1980 (as amended by the Superfund Amendments and Reauthorization Act
        of
        1986, 42 U.S.C.A. § 9601 et
        seq.),
        as
        amended from time to time, and any and all rules and regulations issued or
        promulgated thereunder (“CERCLA”); (b) the Resource Conservation and Recovery
        Act (as amended by the Hazardous and Solid Waste Amendment of 1984, 42 U.S.C.A.
        § 6901 et
        seq.),
        as
        amended from time to time, and any and all rules and regulations promulgated
        thereunder (“RCRA”); (c) the Clean Air Act, 42 U.S.C.A. § 7401 et
        seq.,
        as
        amended from time to time, and any and all rules and regulations promulgated
        thereunder; (d) the Clean Water Act of 1977, 33 U.S.CA § 1251 et
        seq.,
        as
        amended from time to time, and any and all rules and regulations promulgated
        thereunder; (e) the Toxic Substances Control Act, 15 U.S.C.A. § 2601
et seq.,
        as
        amended from time to time, and any and all rules and regulations promulgated
        thereunder; or (f) any other federal or state law, statute, rule, or emulation
        enacted in connection with or relating to the protection or regulation of
        the
        environment (including, without limitation, those laws, statutes, rules,
        and
        regulations regulating the disposal, removal, production, storing, refining,
        handling, transferring, processing, or transporting of Hazardous Materials)
        and
        any rules and regulations issued or promulgated in connection with any of
        the
        foregoing by any governmental authority, and “Environmental
        Laws”
        shall
        mean each of the foregoing.

       

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

       

      “Equity-Preferred
        Securities”
        means
        (i) Debt, preferred equity or any other securities that are mandatorily
        convertible by the issuer thereof at a date certain, without cash payment
        by the
        issuer, into common shares of stock of the Borrower or (ii) any other securities
        (A) that are issued by the Borrower or any Subsidiary, (B) that are not subject
        to mandatory redemption at any time, directly or indirectly, (C) that are
        perpetual or mature not less than 30 years from the date of issuance, (D)
        the
        Debt component, if any, issued in connection therewith, including any guaranty,
        is subordinate in right of payment to all other unsecured and unsubordinated
        Debt of the issuer of such Debt component (including any such guaranty, if
        applicable), and (E) the terms of which permit the issuer thereof to defer
        at
        any time, without any additional payment or premium, the payment of any and
        all
        interest and/or distributions thereon, as applicable, to a date occurring
        after
        the Maturity Date.

       

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

       

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

       

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

       

      “Eurodollar
        Rate”
        shall
        mean with respect to the applicable Rate Period in effect for each Eurodollar
        Rate Loan, the sum of (a) the quotient obtained by dividing (i) the rate
        appearing on Page 3750 of the Dow Jones Market Service (or on any successor
        or
        substitute page of such Service, or any successor to or substitute for such
        Service, providing rate quotations comparable to those currently provided
        on
        such page of such Service, as determined by the

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Agent
        from time to time for purposes of providing quotations of interest rates
        applicable to dollar deposits in the London interbank market) at approximately
        11:00 a.m., London time, two Business Days prior to the commencement of such
        Rate Period, as the rate for dollar deposits with a maturity comparable to
        such
        Rate Period (or in the event that such rate quote is not available at such
        time
        for any reason, then utilizing the rate at which dollar deposits of $5,000,000
        and for a maturity comparable to such Rate Period are offered by the principal
        London office of the Agent in immediately available funds in the London
        interbank market at approximately 11:00 a.m., London time, two Business Days
        prior to the commencement of such Rate Period) by (ii) a percentage equal
        to
        100% minus the Eurodollar Rate Reserve Percentage for such Rate Period,
plus
        (b) an
        additional percentage per annum changing with the rating of the Borrower’s
        unsecured, non-credit enhanced Senior Funded Debt and determined in accordance
        with the following grid:

      

      
        	
                 

                Rating
                  of the Borrower’s unsecured,
                  non-credit enhanced Senior
                  Funded Debt

                 

              	
                 

                Additional
                  Percentage Per Annum

                 

              
	
                 

                Equal
                  to or greater than A3 by Moody’s Investor Service, Inc. and
                  equal to or greater than A- by Standard and Poor’s Ratings Group
                  

                 

              	
                 

                0.325%

                 

              
	
                 

                Baa1
                  by Moody’s Investor Service, Inc. or
                  BBB+ by Standard and Poor’s Ratings Group

                 

              	
                 

                0.400%

                 

              
	
                 

                Baa2
                  by Moody’s Investor Service, Inc. or
                  BBB by Standard and Poor’s Ratings Group

                 

              	
                 

                0.475%

                 

              
	
                 

                Baa3
                  by Moody’s Investor Service, Inc. or
                  BBB- by Standard and Poor’s Ratings Group

                 

              	
                 

                0.625%

                 

              
	
                 

                Ba1
                  by Moody’s Investor Service, Inc. or
                  BB+ by Standard and Poor’s Ratings Group

                 

              	
                 

                1.000%

                 

              
	
                 

                Less
                  than Ba1 by Moody’s Investor Service, Inc. and
                  less than BB+ by Standard and Poor’s Ratings Group

                 

              	
                 

                1.250%

                 

              

      

      

      Notwithstanding
        the foregoing provisions, in the event that ratings of the Borrower’s unsecured,
        non-credit enhanced Senior Funded Debt under Standard & Poor’s Ratings Group
        and under Moody’s Investor Service, Inc. fall within different rating categories
        which are not functional equivalents, the Eurodollar Rate shall be based
        on the
        higher of such ratings if there is only one category differential between
        the
        functional equivalents of such ratings, and if there is a two category
        differential between the functional equivalents of such ratings, the component
        of pricing from the grid set forth above shall be based on the rating category
        which is then in the middle of or between the two category ratings which
        are
        then in effect, and if there is greater than a two category differential
        between
        the functional equivalents of such ratings, the component of pricing from
        the
        grid set forth above shall be based on the rating category which is then
        one
        rating category above the lowest of the two category ratings which are then
        in
        effect. Additionally, in the event that Borrower withdraws from having its
        unsecured, non-credit enhanced Senior Funded Debt being rated by Moody’s
        Investor Service, Inc. or Standard and Poor’s Ratings Group, so that one or both
        of such ratings services fails to rate the Borrower’s unsecured, non-credit
        enhanced Senior Funded Debt, the component of pricing from the grid set forth
        above for purposes of determining the applicable Eurodollar Rate for all
        Rate
        Periods commencing thereafter shall be 1.250% until such time as Borrower
        subsequently causes its unsecured, non-credit enhanced Senior Funded Debt
        to be
        rated by both of said ratings services.

      

      “Eurodollar
        Rate Loan”
        shall
        mean any Loan that bears interest at the Eurodollar Rate.

      

      “Eurodollar
        Rate Reserve Percentage”
        of the
        Agent for any Rate Period for any Eurodollar Rate Loan shall mean the reserve
        percentage applicable during such Rate Period (or if more than one such
        percentages shall be so applicable, the daily average of such percentages
        for
        those days in such Rate Period during which any such

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      percentage
        shall be so applicable) under regulations issued from time to time by the
        Board
        of Governors of the Federal Reserve System (or any successor) for determining
        the maximum reserve requirement (including, without limitation, any emergency,
        supplemental, or other marginal reserve requirement) for member banks of
        the
        Federal Reserve System with deposits exceeding $1,000,000,000 with respect
        to
        liabilities or assets consisting of or including Eurocurrency Liabilities
        having
        a term equal to such Rate Period.

       

      “Event
        of Default”
        shall
        mean any of the events specified in Section 11, provided that
        there
        has been satisfied any requirement in connection with such event for the
        giving
        of notice, or the lapse of time, or the happening of any further condition,
        event or act.

       

      “Expiration
        Date”
        shall
        mean the last day of a Rate Period.

       

      “Facility
        Letter(s) of Credit”
        shall
        mean, in the singular form, any Standby Letter of Credit issued by an Issuing
        Bank for the account of the Borrower pursuant to Section 3 and, in the plural
        form, all such Standby Letters of Credit issued for the account of the
        Borrower.

       

      “Facility
        Letter of Credit Fee Percentage”
        shall
        mean a fee expressed as a percent per annum for all periods equal to a
        percentage per annum changing with the rating of the Borrower’s unsecured,
        non-credit enhanced Senior Funded Debt and determined in accordance with
        the
        following grid:

      

      

      
        	
                 

                Rating
                  of the Borrower’s unsecured,
                  non-credit enhanced Senior Funded Debt

                 

              	
                 

                Additional
                  Percentage Per Annum

                 

              
	
                 

                Equal
                  to or greater than A3 by Moody’s Investor Service, Inc. and
                  equal to or greater than A- by Standard and Poor’s Ratings Group
                  

                 

              	
                 

                0.325%

                 

              
	
                 

                Baa1
                  by Moody’s Investor Service, Inc. or
                  BBB+ by Standard and Poor’s Rating

                 

              	
                 

                0.400%

                 

              
	
                 

                Baa2
                  by Moody’s Investor Service, Inc. or
                  BBB by Standard and Poor’s Rating Group

                 

              	
                 

                0.475%

                 

              
	
                 

                Baa3
                  by Moody’s Investor Service, Inc. or
                  BBB- by Standard and Poor’s Rating Group

                 

              	
                 

                0.625%

                 

              
	
                 

                Ba1
                  Moody’s Investor Service, Inc. or
                  BB+ by Standard and Poor’s Rating Group

                 

              	
                 

                1.000%

                 

              
	
                 

                Less
                  than Ba1 by Moody’s Investor Service, Inc. and
                  less than BB+ by Standard and Poor’s Rating Group

                 

              	
                 

                1.250%

                 

              

      

       

      Notwithstanding
        the foregoing provisions, in the event that ratings of the Borrower’s unsecured,
        non-credit enhanced Senior Funded Debt under Standard & Poor’s Ratings Group
        and under Moody’s Investor Service, Inc. fall within different rating categories
        which are not functional equivalents, the Facility Letter of Credit Fee
        Percentage shall be based on the higher of such ratings if there is only
        one
        category differential between the functional equivalents of such ratings,
        and if
        there is a two category differential between the functional equivalents of
        such
        ratings, the component of pricing from the grid set forth above shall be
        based
        on the rating category which is then in the middle of or between the two
        category ratings which are then in effect, and if there is greater than a
        two
        category differential between the functional equivalents of such ratings,
        the
        component of pricing from the grid set forth above shall be based on the
        rating
        category which is then one rating category above the lowest of the two category
        ratings which are then in effect. Additionally, in the event that Borrower
        withdraws from having its unsecured, non-credit enhanced Senior Funded Debt
        being rated by Moody’s Investor Service, Inc. or Standard and

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Poor’s
        Ratings Group, so that one or both of such ratings services fails to rate
        the
        Borrower’s unsecured, non-credit enhanced Senior Funded Debt, the component of
        pricing from the grid set forth above for purposes of determining the applicable
        Facility Letter of Credit Fee Percentage for all periods thereafter shall
        be
        1.250% until such time as the Borrower subsequently causes its unsecured,
        non-credit enhanced Senior Funded Debt to be rated by both of said ratings
        services.

      

      “Facility
        Letter of Credit Obligations”
        shall
        mean, at any particular time, the sum of (a) the Reimbursement Obligations,
        plus
        (b) the
        aggregate undrawn face amount of all outstanding Facility Letters of Credit,
        in
        each case as determined by the Agent.

      

      “Federal
        Funds Rate”
        shall
        mean, for any period, a fluctuating interest rate per annum equal for each
        day
        during such period to the weighted average of the rates (rounded to the nearest
        1/100 of 1%) on overnight federal fund transactions with members of the Federal
        Reserve System arranged by federal funds brokers, as published for such day
        (or,
        if such day is not a Business Day, for the next preceding Business Day) by
        the
        Federal Reserve Bank of New York, or, if such rate is not so published for
        any
        day which is a Business Day, the average of the quotations for such day on
        such
        transactions received by the Agent from Fulton Prebon and Garvin Guy Butler
        or
        two other federal funds brokers of recognized standing selected by the
        Agent.

       

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

       

      “GAAP”
        shall
        mean generally accepted accounting principles, applicable to the circumstances
        as of the date of determination, applied consistently with such principles
        as
        applied in the preparation of the Borrowers audited financial statements
        referred to in Section 7.2.

       

      “General
        Intangibles”
        shall
        mean all of the Borrower’s contract rights now existing or hereafter acquired,
        arising or created under contracts or arrangements for the purchase, sale,
        storage or transportation of gas or other Inventory.

       

      “Governmental
        Authority”
        shall
        mean any (domestic or foreign) federal, state, county, municipal, parish,
        provincial, or other government, or any department, commission, board, court,
        agency (including, without limitation, the EPA), or any other instrumentality
        of
        any of them or any other political subdivision thereof, and any entity
        exercising executive, legislative, judicial, regulatory, or administrative
        functions of, or pertaining to, government, including, without limitation,
        any
        arbitration panel, any court, or any commission.

       

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

       

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

       

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

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

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

       

      “Indemnified
        Parties”
        shall
        have the meaning set forth in Section 13.16.

       

      “Interest
        Payment Date”
        shall
        mean (a) as to any Eurodollar Rate Loan in which the Rate Period with respect
        thereto is not greater than three (3) months, the date on which such Rate
        Period
        ends; (b) as to any Eurodollar Rate Loan in which the Rate Period with respect
        thereto is greater than three (3) months, the date on which the third month
        of
        such Rate Period ends, and the date on which each such Rate Period ends;
        (c) as
        to any Alternate Base Rate Loan in which the Rate Period with respect thereto
        is
        not greater than ninety (90) days, the date on which such Rate Period ends;
        (d)
        as to any Alternate Base Rate Loan in which the Rate Period with respect
        thereto
        is greater than ninety (90) days, the ninetieth (90th) day of such Rate Period,
        and the date on which each such Rate Period ends; and (e) as to all Loans,
        such
        time as the principal of and interest on the Notes shall have been paid in
        full.

       

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

       

      “Investment”
        of any
        Person means any investment so classified under GAAP, and, whether or not
        so
        classified, includes (a) any direct or indirect loan advance made by it to
        any
        other Person; (b) any direct or indirect Guaranty for the benefit of such
        Person; provided,
        however,
        that
        for purposes of determining Investments of Borrower hereunder, the existing
        Guaranty by Borrower of certain tax increment financing extended by The Fidelity
        Deposit and Discount Bank to The Redevelopment Authority of the County of
        Lackawanna shall be deemed to not be an Investment; (c) any capital contribution
        to any other Person; and (d) any ownership or similar interest in any other
        Person; and the amount of any Investment shall be the original principal
        or
        capital amount thereof (plus
        any
        subsequent principal or capital amount) minus
        all cash
        returns of principal or capital thereof.

       

      “Issuing
        Bank”
        shall
        mean (a) any Bank and/or any Affiliate of any Bank listed on the signature
        pages
        of this Agreement attached hereto and made a part hereof, or (b) any Bank
        or any
        Affiliate of any Bank not listed on the signature pages of this Agreement,
        but
        only in the event that such Bank or such Affiliate agrees, in its sole
        discretion at the request of the Borrower, and on the terms and conditions
        mutually acceptable to such Bank or such Affiliate, as the case may be, to
        become an Issuing Bank for the purpose of issuing one or more Facility Letters
        of Credit pursuant to Section 3. When a Bank is referred to as an Issuing
        Bank
        under this Agreement, such reference to such Bank shall be interpreted to
        refer
        to such Bank solely in its capacity as an Issuing Bank.

       

      “L/C
        Subfacility”
        shall
        mean that portion of the Commitments equal to $40,000,000.00.

       

      “Letter(s)
        of Credit”
        shall
        mean, in the singular form, any letter of credit issued by any Person for
        the
        account of the Borrower and, in the plural form, all such letters of credit
        issued by any Person for the account of the Borrower.

       

      “Letter
        of Credit Commitment”
        shall
        mean, with respect to each Issuing Bank, such Issuing Bank's commitment to
        issue
        Facility Letters of Credit.

       

      “Letter
        of Credit Reimbursement Agreement”
        shall
        mean, with respect to a Facility Letter of Credit, such form of application
        therefor and form of reimbursement agreement therefor (whether in a single
        or
        several

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      documents,
        taken together) as the Issuing Bank from which the Facility Letter of Credit
        is
        requested may employ in the ordinary course of business for its own account,
        whether or not providing for collateral security, with such modifications
        thereto as may be agreed upon by such Issuing Bank and the account party
        and as
        are not materially adverse to the interests of any Bank; provided,
        however,
        in the
        event of any conflict between the terms of any Letter of Credit Reimbursement
        Agreement and this Agreement, the terms of this Agreement shall control;
        and
provided,
        further,
        that
        any grant or purported grant of a security interest in favor of the Issuing
        Bank
        contained in any Letter of Credit Reimbursement Agreement shall be
        void.

       

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

       

      “Loan”
        or
“Loans”
        shall
        mean a loan or loans, respectively, from the Banks to the Borrower made under
        Section 2.1.

       

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

       

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

       

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

       

      “Maturity
        Date”
        shall
        mean May 28, 2010.

       

      “Non-Facility
        Letter of Credit”
        shall
        mean any Letter of Credit which is not a Facility Letter of Credit.

       

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

       

      “Notice
        of Borrowing”
        shall
        have the meaning set forth in Section 2.1(c).

       

      “Obligations”
        shall
        mean (a) all obligations of the Borrower to the Bank under this Agreement,
        the
        Notes and all other Loan Documents to which it is a party; (b) all Reimbursement
        Obligations; and (c) any other obligations of the Borrower with respect to
        a
        Facility Letter of Credit.

       

      “Officer’s
        Certificate”
        shall
        mean a certificate signed in the name of the Borrower or a Subsidiary, as
        the
        case may be, by either its President, one of its Vice Presidents, its Treasurer,
        its Secretary, or one of its Assistant Treasurers or Assistant
        Secretaries.

       

      “Panhandle
        Eastern”
        shall
        mean Panhandle Eastern Pipe Line Company, LP, a Delaware limited partnership.
        

       

      “Panhandle
        Eastern Refinancing Debt”
        shall
        mean any Debt of Panhandle Eastern and/or any of its Subsidiaries issued
        in
        exchange for, or the net proceeds of which are used to extend, refinance,
        renew,
        replace, defease or refund, any Debt of Panhandle Eastern and/or any of its
        Subsidiaries existing as of the Closing Date, provided,
        that:

      

      (a) the
        principal amount of such Panhandle Eastern Refinancing Debt does not exceed
        the
        then outstanding principal amount of the Debt so extended, refinanced, renewed,
        replaced, defeased or refunded;

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      (b) the
        interest rate or rates to accrue under such Panhandle Eastern Refinancing
        Indebtedness do not exceed the lesser of (i) the interest rate or rates then
        accruing on the Debt so extended, refinanced, renewed, replaced, defeased
        or
        refunded or (ii) the prevailing market interest rate or rates which are then
        applicable to, and generally available for, Debt which is similar in type,
        amount, maturity and other terms to the Indebtedness so extended, refinanced,
        renewed, replaced, defeased or refunded;

      

      (c) the
        maturities, amortization schedules, covenants, defaults, remedies, collateral
        security provisions (or absence thereof) and other terms of such Panhandle
        Eastern Refinancing Indebtedness, including without limitation, any restrictions
        on the payment by Panhandle Eastern and/or its applicable Subsidiaries of
        any
        dividends or other shareholder distributions, are in each case the same or
        more
        favorable to Panhandle Eastern and/or its applicable Subsidiaries as those
        in
        the Debt so extended, refinanced, renewed, replaced, defeased or refunded;
        and

      

      (d) no
        Default or Event of Default has occurred and is continuing or would result
        from
        the issuance or origination of such Panhandle Eastern Refinancing
        Indebtedness.

      

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

       

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

       

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

       

      “Prior
        Acquisitions”
        shall
        mean collectively the Borrower’s previous acquisitions of and mergers with Fall
        River Gas Company, Providence Energy Corporation and Valley Resources,
        Inc.

       

      “Pro-Rata
        Percentage”
        shall
        mean with respect to any Bank, a fraction (expressed as a percentage), the
        numerator of which shall be the amount of such Bank's Commitment and the
        denominator of which shall be the aggregate amount of all the Commitments
        of the
        Banks, as adjusted from time to time in accordance with Section
        4.6.

       

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

       

      “Qualifying
        Assets”
        shall
        mean (i) equity interests owned one hundred percent (100%) by the Borrower
        in
        entities engaged primarily in one or more of the Borrower’s lines of business
        described in Section 7.15 (singly, a “Qualified Entity,” collectively,
“Qualified Entities”), or productive assets used in one or more of such lines of
        business; and (ii) equity interests of less than one hundred percent (100%)
        owned by the Borrower in one or more Qualifying Entities, provided that at
        any
        time the aggregate amount of the Borrower’s investment in Qualifying Assets
        described in clause (ii) that are then held by the Borrower as of the applicable
        determination date (measured by the aggregate purchase price paid therefor,
        including the aggregate amount of Debt assumed or deemed incurred by Borrower
        in
        connection with such acquisitions) does not exceed twenty percent (20%) of
        the
        Consolidated Net Worth of the Borrower and its Subsidiaries as of the applicable
        determination date.

       

      “Rabbi
        Trusts”
        shall
        mean those four (4) certain non-qualified deferred compensation irrevocable
        trusts existing as of the Closing Date, previously established by the Borrower
        for the benefit of its executive employees, so long as the assets in each
        of
        such trusts which have not yet been distributed to one or more executive
        employees of the Borrower remain subject to the claims of the Borrower’s general
        creditors.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      “Rate
        Period”
        shall
        mean the period of time for which the Alternate Base Rate or the Eurodollar
        Rate
        shall be in effect as to any Alternate Base Rate Loan or Eurodollar Rate
        Loan,
        as the case may be, commencing with the Borrowing Date or the Expiration
        Date of
        the immediately preceding Rate Period, as the case may be, applicable to
        and
        ending on the effective date of any reborrowing made as provided in Section
        2.2(a) as the Borrower may specify in the related Notice of Borrowing, subject,
        however, to the early termination provisions of the second sentence of Section
        2.3(c) relating to any Eurodollar Rate Loan; provided,
        however,
        that
        any Rate Period that would otherwise end on a day which is not a Business
        Day
        shall be extended to the next succeeding Business Day unless such Business
        Day
        falls in another calendar month, in which case such Rate Period shall end
        on the
        next preceding Business Day. For any Alternate Base Rate Loan, the Rate Period
        shall be 90 days; and for any Eurodollar Rate Loan the Rate Period may be
        15
        days, 1, 2, 3, or 6 months, in each case as specified in the applicable Notice
        of Borrowing, subject to the provisions of Sections 2.2 and 2.3.

       

      “Reimbursement
        Obligations”
        shall
        mean the reimbursement or repayment obligations of the Borrower to Issuing
        Banks
        pursuant to this Agreement or the applicable Letter of Credit Reimbursement
        Agreement with respect to Facility Letters of Credit issued for the account
        of
        the Borrower.

       

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

       

      “Restricted
        Payment”
        shall
        mean the Borrower's declaration or payment of any dividend on, or purchase
        or
        agreement to purchase any of, or making of any other distribution with respect
        to, any of its capital stock, except any such dividend, purchase or distribution
        consisting solely of capital stock of the Borrower, and except any dividend
        or
        interest paid on or with respect to the Borrower’s Structured Securities to the
        extent that such amounts are included in Cash Interest Expense.

       

      “Securities
        Act”
        shall
        have the meaning set forth in Section 13.1.

       

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

       

      “Senior
        Notes”
        means
        (a) the $475,000,000 of 7.6% Senior Notes of the Borrower previously placed
        with
        investors on or about January 31, 1994, and (b) the $300,000,000 of 8.25%
        Senior
        Notes of the Borrower previously placed with investors on or about November
        3,
        1999, as such Senior Notes may be amended, modified, or supplemented from
        time
        to time in accordance with the terms of this Agreement; and “Senior
        Note”
        means
        each such note individually.

       

      “Significant
        Property”
        shall
        mean at any time property or assets of the -Borrower or any Subsidiary having
        a
        book value (net of accumulated depreciation taken in accordance with GAAP)
        of at
        least $5,000,000.00 or that contributed (or is an integrated physical portion
        of
        an assemblage of assets that contributed) at least 5% of the gross income
        of the
        owner thereof for the fiscal quarter most recently ended.

       

      “Southern
        Union Panhandle” shall
        mean Southern Union Panhandle LLC, a Delaware limited liability
        company.

      

      “Southern
        Union Trust”
        means
        any of those certain Delaware business trusts organized for the sole purpose
        of
        purchasing Subordinated Debt Securities constituting a portion of, and described
        in the definition of, Structured Securities and issuing the Preferred Securities
        and Common Securities also constituting a portion of, and described in the
        definition of, Structured Securities, and having no assets other than the
        Borrower’s Subordinated Debt Securities, the Guaranties (as described in the
        definition of Structured Securities) and the proceeds thereof. Southern Union
        Trusts shall be considered to be Subsidiaries for purposes hereof so long
        as
        their affairs are consolidated under GAAP and for federal income tax purposes
        with the affairs of the Borrower.

       

      “Standby
        Letter of Credit”
        shall
        mean any standby letter of credit issued to support obligations (contingent
        or
        otherwise) of the Borrower.

       

      “Structured
        Securities”
        shall
        mean collectively (a) the Subordinated Debt Securities, the Guaranties, the
        Common Securities and the Preferred Securities of the Southern Union Trusts,
        all
        as described and defined in the Registration Statement on Form S-3 filed
        by the
        Borrower with the Securities and Exchange Commission on March 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      25,
        1995,
        and (b) subordinated debt securities, guaranties, common securities and/or
        preferred securities issued in connection with the consummation of the Prior
        Acquisitions in an aggregate face amount of not more than $150,000,000 upon
        terms and conditions substantially similar in all material respects to the
        terms
        and conditions described and defined in such Registration Statement on Form
        S-3
        filed by the Borrower with the Securities and Exchange Commission on March
        25,
        1995. For all purposes of this Agreement, the amounts payable by Southern
        Union
        Trusts under the Preferred Securities and Common Securities (or similar
        securities provided for under subclause (b) above) and the amounts payable
        by
        the Borrower under the Subordinated Debt Securities or the Guaranties (or
        similar securities provided for under subclause (b) above) shall be treated
        without duplication, it being recognized that the amounts payable by Southern
        Union Trusts are funded with payments made or to be made by the Borrower
        to
        Southern Union Trusts and are also guaranteed by the Borrower under the
        Guaranties described in the S-3 mentioned above (or similar guaranties provided
        for under subclause (b) above).

       

      “Subsidiary”
        of a
        Person shall mean a corporation, partnership, limited liability company or
        other
        business entity of which a majority of the shares of securities or other
        interests having ordinary voting power for the election of directors or other
        governing body (other than securities or interests having such power only
        by
        reason of the happening of a contingency) are at the time beneficially owned,
        or
        the management of which is otherwise controlled, directly, or indirectly
        through
        one or more intermediaries, or both, by such Person. Notwithstanding the
        fact
        that the management of Cross Country is or may be controlled by the Borrower,
        neither Cross Country nor any of its subsidiaries shall be deemed to constitute
        a Subsidiary of the Borrower for purposes of this Agreement so long as the
        Borrower does not beneficially own, directly, or indirectly, a majority of
        the
        shares of securities or other interests in Cross Country having ordinary
        voting
        power for the election of directors or other governing body (other than
        securities or interests having such power only by reason of the happening
        of a
        contingency). 

       

      “Trunkline
        LNG Holdings”
        shall
        mean CMS Trunkline LNG Holdings, LLC, a Delaware limited liability
        company.

       

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

       

      “Unused
        L/C Subfacility”
        shall
        mean, at any time, the amount, if any, by which the L/C Subfacility then
        in
        effect exceeds the aggregate outstanding amount of all Facility Letter of
        Credit
        Obligations.

      

      

      THE
        LOANS

       

      The
        Loans

       

      Subject
        to the terms and conditions and relying upon the representations and warranties
        of the Borrower herein set forth, each Bank severally agrees to make Loans
        to
        the Borrower on any one or more Business Days prior to the Maturity Date,
        up to
        an aggregate principal amount of Loans not exceeding at any time outstanding:
        (i) the amount set opposite such Banks name on the signature pages hereof
        (such
        Bank's “Commitment”); minus (ii) such
        Bank’s Pro Rata Percentage of the Facility Letter of Credit Obligations. Within
        such limits and during such period and subject to the terms and conditions
        of
        this Agreement, the Borrower may borrow, repay and reborrow
        hereunder.

       

      The
        Borrower shall execute and deliver to the Agent for each Bank to evidence
        the
        Loans made by each Bank under such Bank’s Commitment, a Note, which shall be:
        (i) dated the date of the Closing 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Date;
        (ii) in the principal amount of such Bank’s maximum Commitment; (iii) in
        substantially the form attached hereto as Exhibit
        A, with blanks appropriately filled; (iv) payable to
        the
        order of such Bank on the Maturity Date; and (v) subject to acceleration
        upon
        the occurrence of an Event of Default. Each Note shall bear interest on the
        unpaid principal amount thereof from time to time outstanding at the rate
        per
        annum determined as specified in Sections 2.2(a), 2.2(b), 2.3(b) and
        2.3(c), payable on each Interest Payment Date and at maturity, commencing
        with
        the first Interest Payment Date following the date of each
        Note.

       

      Each
        Loan shall be: (i) in the case of any Eurodollar Rate Loan, in an amount
        of not
        less than $1,000,000.00 or an integral multiple of $1,000,000.00 in excess
        thereof; or (ii) in the case of any Alternate Base Rate Loan, in an amount
        of
        not less than $500,000.00 or an integral multiple of $100,000.00 in excess
        thereof and, at the option of the Borrower, any borrowing under this Section
        2.1(c) may be comprised of two or more such Loans bearing different rates
        of
        interest. Each such borrowing shall be made upon prior notice from the Borrower
        to the Agent in the form attached hereto as Exhibit
        B
        (the “Notice of Borrowing”) delivered to the Agent not later than 11:00 am
        (Houston time): (i) on the third Business Day prior to the Borrowing Date,
        if
        such borrowing consists of Eurodollar Rate Loans; and (ii) on the Borrowing
        Date, if such borrowing consists of Alternate Base Rate Loans. Each Notice
        of
        Borrowing shall be irrevocable and shall specify: (i) the amount of the proposed
        borrowing and of each Loan comprising a part thereof; (ii) the Borrowing
        Date;
        (iii) the rate of interest that each such Loan shall bear; (iv) the Rate
        Period
        with respect to each such Loan and the Expiration Date of each such Rate
        Period;
        and (v) the demand deposit account of the Borrower at JPMorgan into which
        the
        proceeds of the borrowing are to be deposited by the Agent. The Borrower
        may
        give the Agent telephonic notice by the required time of any proposed borrowing
        under this Section 2.1(c); provided that
        such telephonic notice shall be confirmed in writing by delivery to the Agent
        promptly (but in no event later than the Borrowing Date relating to any such
        borrowing) of a Notice of Borrowing. Neither the Agent nor any Bank shall
        incur
        any liability to the Borrower in acting upon any telephonic notice referred
        to
        above which the Agent believes in good faith to have been given by the Borrower,
        or for otherwise acting in good faith under this
        Section 2.1(c).

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      In
        the case of a proposed borrowing comprised of Eurodollar Rate Loans, the
        Agent
        shall promptly notify each Bank of the applicable interest rate under
        Section 2.2. Each Bank shall, before 11:00 am (Houston time) on the
        Borrowing Date, make available for the account of its Applicable Lending
        Office
        to the Agent at the Agent's address set forth in Section 13.4, in same day
        funds, its Pro Rata Percentage of such borrowing. After the Agent's receipt
        of
        such funds and upon fulfillment of the applicable conditions set forth in
        Section 8, on the Borrowing Date, the Agent shall make the borrowing
        available to the Borrower at its Applicable Lending Office in immediately
        available funds. Each Bank shall post on a schedule attached to its Note(s):
        (i)
        the date and principal amount of each Loan made under such Note; (ii) the
        rate of interest each such Loan will bear; and (iii) each payment of principal
        thereon; provided,
however,
        that any failure of such Bank
        so to mark such Note shall not affect the Borrower's obligations thereunder;
        and
provided further
        that such Bank's records as to such matters shall be controlling whether
        or not
        such Bank has so marked such Note. Any deposit to the Borrower’s demand deposit
        account by the Agent or by JPMorgan Chase Bank (of funds received from the
        Agent) pursuant to a request (whether written or oral) believed by the Agent
        or
        by JPMorgan Chase Bank to be an authorized request by the Borrower for a
        Loan
        hereunder shall be deemed to be a Loan hereunder for all purposes with the
        same
        effect as if the Borrower had in fact requested the Agent to make such
        Loan.

       

      Unless
        the Agent shall have received notice from a Bank prior to the date of any
        borrowing that such Bank will not make available to the Agent such Bank’s Pro
        Rata Percentage of such borrowing, the Agent may assume that such Bank has
        made
        such portion available to the Agent on the date of such borrowing in accordance
        with this Section 2.1 and the Agent may, in reliance upon such assumption,
        make
        available to the Borrower on such date a corresponding amount. If and to
        the
        extent that such Bank shall not have so made such Pro Rata Percentage available
        to the Agent, such Bank and the Borrower severally agree to repay to the
        Agent
        forthwith on demand such corresponding amount together with interest thereon,
        for each day from the date such amount is made available to the Borrower
        until
        the date such amount is repaid to the Agent, (i) in the case of the Borrower,
        at
        the interest rate applicable at the time to the Loans comprising such borrowing,
        and (ii) in the case of such Bank, at the Federal Funds Rate. If such Bank
        shall
        repay to the Agent such corresponding amount, such amount so repaid shall
        constitute such 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Bank's
        Loan as part of such borrowing for purposes of this
        Agreement.

       

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

       

      

      

      

      Interest
        Rate Determination

       

      Except
        as specified in Sections 2.3(b) and 2.3(c), the Loans shall bear interest
        on the
        unpaid principal amount thereof from time to time outstanding, until maturity,
        at a rate per annum (calculated based on a year of 360 days in the case of
        the
        Eurodollar Rate or the Alternate Base Rate based on the Federal Funds Rate
        and a
        year of 365 or 366 days, as the case may be, in the case of the Alternate
        Base
        Rate based on the Prime Rate) equal to the lesser of (A) the rate specified
        in
        the Notice of Borrowing with respect thereto or (B) the Highest Lawful Rate
        from
        the first day to, but not including, the Expiration Date of the Rate Period
        then
        in effect with respect thereto.

       

      Any
        principal, interest, fees or other amount owing hereunder, under any Note
        or
        under any other Loan Document that is not paid when due (whether at stated
        maturity, by acceleration or otherwise) shall bear interest at a rate per
        annum
        equal to the lesser of (i) two percent (2%) above the Alternate Base Rate
        in
        effect from time to time or (ii) the Highest Lawful Rate.

       

      Additional
        Interest Rate Provisions

       

      The
        Note may be held by each Bank for the account of its respective Domestic
        Lending
        Office or its respective Eurodollar Lending Office, and may be transferred
        from
        one to the other from time to time as each Bank may
        determine.

       

      If
        the Borrower shall have chosen the Eurodollar Rate in a Notice of Borrowing
        and
        prior to the Borrowing Date, any Bank in good faith determines (which
        determination shall be conclusive) that (i) deposits in Dollars in the principal
        amount of such Eurodollar Rate Loan are not being offered to the Eurodollar
        Lending Office of such 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Bank
        in the Eurodollar interbank market selected by such Bank in its sole discretion
        in good faith or (ii) adequate and reasonable means do not exist for
        ascertaining the chosen Eurodollar Rate in respect of such Eurodollar Rate
        Loan
        or (iii) the Eurodollar Rate for any Rate Period for such Eurodollar Rate
        Loan
        will not adequately reflect the cost to such Bank of making such Eurodollar
        Rate
        Loan for such Rate Period, then such Bank will so notify the Borrower and
        the
        Agent and such Eurodollar Rate shall not become effective as to such Eurodollar
        Rate Loan on such Borrowing Date or at any time thereafter until such time
        thereafter as the Borrower receives notice from the Agent that the circumstances
        giving rise to such determination no longer apply.

       

      Anything
        in this Agreement to the contrary notwithstanding, if at any time any Bank
        in
        good faith determines (which determination shall be conclusive) that the
        introduction of or any change in any applicable law, rule or regulation or
        any
        change in the interpretation or administration thereof by any governmental
        or
        other regulatory authority charged with the interpretation or administration
        thereof shall make it unlawful for the Bank (or the Eurodollar Lending Office
        of
        such Bank) to maintain or fund any Eurodollar Rate Loan, such Bank shall
        give
        notice thereof to the Borrower and the Agent. With respect to any Eurodollar
        Rate Loan which is outstanding when such Bank so notifies the Borrower, upon
        such date as shall be specified in such notice the Rate Period shall end
        and the
        lesser of (i) the Alternate Base Rate or (ii) the Highest Lawful Rate shall
        commence to apply in lieu of the Eurodollar Rate in respect of such Eurodollar
        Rate Loan and shall continue to apply unless and until the Borrower changes
        the
        rate as provided in Section 2.2(a). No more than five (5) Business Days after
        such specified date, the Borrower shall pay to such Bank (x) accrued and
        unpaid
        interest on such Eurodollar Rate Loan at the Eurodollar Rate in effect at
        the
        time of such notice to but not including such specified date
plus
        (y) such amount or amounts (to the extent that such amount or amounts would
        not
        be usurious under applicable law) as may be necessary to compensate such
        Bank
        for any direct or indirect costs and losses incurred by it (to the extent
        that
        such amounts have not been included in the Additional Costs in calculating
        such
        Eurodollar Rate), but otherwise without penalty. If notice has been given
        by
        such Bank pursuant to the foregoing provisions of this Section 2.3(c), then,
        unless and until such Bank notifies the Borrower that the circumstances giving
        rise to such notice no longer apply, such Eurodollar Rate shall not again
        apply
        to such Loan or any other Loan and the obligation of such Bank to

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      continue
        any Eurodollar Rate Loan as a Eurodollar Rate Loan shall be suspended. Any
        such
        claim by such Bank for compensation under clause (y) above shall be accompanied
        by a certificate setting forth the computation upon which such claim is based,
        and such certificate shall be conclusive and binding for all purposes, absent
        manifest error.

       

      THE
        BORROWER WILL INDEMNIFY EACH BANK AGAINST, AND REIMBURSE EACH BANK ON DEMAND
        FOR, ANY LOSS (INCLUDING LOSS OF REASONABLY ANTICIPATED PROFITS DETERMINED
        USING
        REASONABLE ATTRIBUTION AND ALLOCATION METHODS), OR REASONABLE COST OR EXPENSE
        INCURRED OR SUSTAINED BY SUCH BANK (INCLUDING WITHOUT LIMITATION, ANY LOSS
        OR
        EXPENSE INCURRED BY REASON OF THE LIQUIDATION OR REEMPLOYMENT OF DEPOSITS
        OR
        OTHER FUNDS ACQUIRED BY SUCH BANK TO FUND OR MAINTAIN ANY EURODOLLAR RATE
        LOAN)
        AS A RESULT OF (i) ANY ADDITIONAL COSTS INCURRED BY SUCH BANK; (ii) ANY PAYMENT
        OR REPAYMENT (WHETHER AUTHORIZED OR REQUIRED HEREUNDER OR OTHERWISE) OF ALL
        OR A
        PORTION OF ANY LOAN ON A DAY OTHER THAN THE EXPIRATION DATE OF A RATE PERIOD
        FOR
        SUCH LOAN; (iii) ANY PAYMENT OR PREPAYMENT (WHETHER REQUIRED HEREUNDER OR
        OTHERWISE) OF ANY LOAN MADE AFTER THE DELIVERY OF A NOTICE OF BORROWING BUT
        BEFORE THE APPLICABLE BORROWING DATE IF SUCH PAYMENT OR PREPAYMENT PREVENTS
        THE
        PROPOSED BORROWING FROM BECOMING FULLY EFFECTIVE; OR (iv) AFTER RECEIPT BY
        THE
        AGENT OF A NOTICE OF BORROWING, THE FAILURE OF ANY LOAN TO BE MADE OR EFFECTED
        BY SUCH BANK DUE TO ANY CONDITION PRECEDENT TO A BORROWING NOT BEING SATISFIED
        BY THE BORROWER OR DUE TO ANY OTHER ACTION OR INACTION OF THE BORROWER. ANY
        BANK
        DEMANDING PAYMENT UNDER THIS SECTION 2.3(d) SHALL DELIVER TO THE BORROWER
        AND
        THE AGENT A STATEMENT REASONABLY SETTING FORTH THE AMOUNT AND MANNER OF
        DETERMINING SUCH LOSS, COST OR EXPENSE. THE FACTS SET FORTH IN SUCH STATEMENT
        SHALL BE CONCLUSIVE AND BINDING FOR ALL PURPOSES, ABSENT MANIFEST ERROR.
        

       

      If,
        after the date of this Agreement, any Bank shall have determined that the
        adoption of any applicable law, rule, guideline, interpretation or regulation
        regarding capital adequacy, or any change therein, or any change in the
        interpretation or administration thereof by any governmental authority, central
        bank or comparable 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      agency
        charged with the interpretation or administration thereof, or compliance
        by such
        Bank with any request or directive regarding capital adequacy (whether or
        not
        having the force of law) of any such authority, central bank or comparable
        agency, has or would have the effect of reducing the rate of return on such
        Bank's capital as a consequence of its obligations hereunder and under similar
        lending arrangements to a level below that which such Bank could have achieved
        but for such adoption, change or compliance (taking into consideration such
        Bank's policies with respect to capital adequacy) by an amount deemed by
        such
        Bank to be material then the Borrower shall pay to such Bank such additional
        amount or amounts as will compensate such Bank for such
        reduction.

       

      A
        certificate of such Bank setting forth such amount or amounts as shall be
        necessary to compensate such Bank as specified in subparagraph (e) above
        shall
        be delivered as soon as practicable to the Borrower (with a copy thereof
        to the
        agent) and to the extent determined in accordance with subparagraph (e) above
        shall be conclusive and binding, absent manifest error. The Borrower shall
        pay
        such Bank the amount shown as due on any such certificate within fifteen
        (15)
        days after such Bank delivers such certificate. In preparing such certificate,
        such Bank may employ such assumptions and allocations (consistently applied
        with
        respect to advances made by such Bank or commitments by such Bank to make
        advances) of costs and expenses as it shall in good faith deem reasonable
        and
        may use any reasonable averaging and attribution method (consistently applied
        with respect to advances made by such Bank or commitments by such Bank to
        make
        advances).

       

      Increase
        of Commitments

       

      At
        any time after the Closing Date, provided that no Default or Event of Default
        shall have occurred and be continuing, the Borrower may request from time
        to
        time one or more increases of the Commitments by notice to the Agent in writing
        of the amount of each such proposed increase (each such notice, a
“Commitment Increase Notice”). Any such
        Commitment Increase Notice must offer each Bank the opportunity to subscribe
        for
        its pro rata share of the requested increase in the Commitments, and the
        Agent
        shall promptly provide to each Bank a copy of any Commitment Increase Notice
        received by the Agent. Within 10 Business Days after receipt by the Agent
        of the
        applicable Commitment Increase Notice, each Bank wishing to subscribe for
        its
        pro rata share of the requested 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      increase
        in the Commitments must deliver written notice of such fact to the Agent.
        If any
        portion of the requested increase in the Commitments is not subscribed for
        by
        the Banks within such 10-day period, the Borrower may, in its sole discretion,
        but with the consent of the Agent as to any Person that is not at such time
        a
        Bank (which consent shall not be unreasonably withheld or delayed so long
        as
        such Person is an Eligible Assignee), offer to any existing Bank or to one
        or
        more additional banks or financial institutions the opportunity to participate
        in all or a portion of such unsubscribed portion of the requested increase
        in
        the Commitments pursuant to Section 2.4 (b) or (c) below, as
        applicable;

       

      Any
        additional bank or financial institution that the Borrower selects to offer
        a
        participation in the unsubscribed portion of the increased Commitments, and
        that
        elects to become a party to this Agreement and obtain a Commitment, shall
        execute an agreement (a “New
        Bank Agreement”),
        in the form required by the Agent, with the Borrower and the Agent, whereupon
        such bank or financial institution (a “New
        Bank”)
        shall become a Bank for all purposes hereunder to the same extent as if
        originally a party hereto and shall be bound by and entitled to the benefits
        of
        this Agreement, and the signature pages hereof shall be deemed to add the
        name
        and Commitment of such New Bank, provided that the Commitment of any such
        New
        Bank shall be in an amount not less than $5,000,000;

       

      Any
        Bank that accepts an offer by the Borrower to increase its Commitment pursuant
        to this Section 2.4 shall, in each case, execute a commitment increase agreement
        (a “Commitment
        Increase Agreement”),
        in the form required by the Agent, with the Borrower and the Agent, whereupon
        such Bank shall be bound by and entitled to the benefits of this Agreement
        with
        respect to the full amount of its Commitment as so increased, and the signature
        pages hereof shall be deemed to be amended to reflect such increase in the
        Commitment of such Bank;

       

      The
        effectiveness of any New Bank Agreement or Commitment Increase Agreement
        shall
        be contingent upon receipt by the Agent of such corporate resolutions of
        the
        Borrower and legal opinions of in-house counsel to the Borrower, if any,
        as the
        Agent shall reasonably request with respect thereto;

       

      If
        any bank or financial institution becomes a New Bank pursuant to Section
        2.4(b)
        or if any Bank’s Commitment is increased pursuant to Section 2.4(c), additional
        Loans and additional liability for 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Facility
        Letters of Credit made or issued on or after the effectiveness thereof (the
        “Re-Allocation Date”) shall be made pro
        rata based on each Bank’s (including each New Bank’s) respective Commitment in
        effect on and after such Re-Allocation Date (except to the extent that any
        such
        pro rata borrowings or incurring of liability would result in any Bank making
        an
        aggregate principal amount of Loans and incurring liability for the Facility
        Letters of Credit in excess of its Commitment, in which case such excess
        amount
        will be allocated to, and made or incurred by, such New Bank and/or Banks
        with
        such increased Commitments to the extent of, and pro rata based on, their
        respective Commitments), and continuations of Eurodollar Rate Loans outstanding
        on such Re-Allocation Date shall be effected by repayment of such Eurodollar
        Rate Loans on the last day of the Rate Period applicable thereto and the
        extension of new Eurodollar Rate Loans pro rata based on the Banks’ respective
        Commitments in effect on and after such Re-Allocation Date. In the event
        that on
        any such Re-Allocation Date there are Alternate Base Rate Loans outstanding,
        the
        Borrower shall make prepayments thereof and borrow new Alternate Base Rate
        Loans
        so that, after giving effect thereto, the Alternate Base Rate Loans outstanding
        are held pro rata based on the Banks’ respective Commitments in effect on and
        after such Re-Allocation Date. In the event that on any such Re-Allocation
        Date
        there are Eurodollar Rate Loans outstanding, such Eurodollar Rate Loans shall
        remain outstanding with the respective holders thereof until the expiration
        of
        their respective Rate Periods (unless the Borrower elects to prepay any thereof
        in accordance with the applicable provisions of this Agreement), and interest
        on
        and repayments of such Eurodollar Rate Loans will be paid thereon to the
        respective Banks holding such Eurodollar Rate Loans pro rata based on the
        respective principal amounts thereof outstanding;

       

      Notwithstanding
        anything to the contrary in this Section 2.4, (i) no Bank shall have any
        obligation to increase its Commitment under this Section 2.4 unless it agrees
        in
        writing to do so in its sole discretion, (ii) no Bank shall have any right
        to
        decrease the amount of its Commitment as a result of any requested increase
        of
        the Commitments pursuant to this Section 2.4, (iii) the Agent shall have
        no
        obligation to find or locate any New Bank to participate in any unsubscribed
        portion of any increase in the Commitments requested by the Borrower, (iv)
        each
        increase in the Commitments requested by the Borrower shall not be less than
        $10,000,000, (v) after giving effect to any increase in the Commitments pursuant
        to this Section 2.4, the sum of the Commitments shall not exceed $500,000,000,
        and (vi) in 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      the
        event the Borrower reduces the Commitments pursuant to Section 4.6 or any
        other
        provision of this Agreement more than one time during the term of this
        Agreement, the ability of the Borrower to request increases in the Commitments
        pursuant to this Section 2.4 shall automatically terminate;
        and

       

      The
        Borrower shall execute and deliver to the Agent (for delivery by the Agent
        to
        each applicable Bank) a new Note payable to each applicable Bank (including
        each
        New Bank) participating in any increase of the Commitments in the original
        principal amount of such Bank’s Commitment after giving effect to any such
        increase of the Commitments.

       

      LETTERS
        OF CREDIT

       

      Obligation
        to Issue. Subject to the terms and conditions of this Agreement,
        and in reliance upon the representations and warranties of the Borrower set
        forth herein or in any other Loan Document, each Issuing Bank hereby severally
        agrees to issue, from time to time during the period commencing on the Closing
        Date and ending on the Business Day immediately prior to the Maturity Date,
        for
        the account of the Borrower through such of the Issuing Bank's branches as
        it
        and the Borrower may jointly agree, one or more Facility Letters of Credit
        in
        accordance with this Section 3. Notwithstanding the foregoing, no
        Issuing
        Bank shall have any obligation to issue, and shall not issue, any Facility
        Letter of Credit at any time if:

       

      the
        aggregate undrawn face amount of Facility Letters of Credit theretofore issued
        by such Issuing Bank, after giving effect to all requested but unissued Facility
        Letters of Credit, exceeds any limit imposed by law or regulation upon such
        Issuing Bank;

       

      after
        taking into account the face amount of the requested Facility Letter of Credit
        the aggregate principal amount of Facility Letter of Credit Obligations with
        respect to Facility Letters of Credit issued by such Issuing Bank for the
        account of the Borrower (which amount shall be calculated without giving
        effect
        to the participation of the Banks pursuant to Section 3.5) would exceed such
        Issuing Bank's Letter of Credit Commitment;

       

      immediately
        after giving effect to the issuance of such Facility Letter of Credit, the
        aggregate Facility Letter of Credit Obligations would exceed the L/C
        Subfacility;

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      immediately
        after giving effect to the issuance of such Facility Letter of Credit, the
        aggregate of outstanding Loans, would exceed the Banks' aggregate Commitments;
        or

       

      such
        Facility Letter of Credit has an expiry date (i) more than one year after
        the
        date of issuance; or (ii) after the Business Day immediately preceding the
        Maturity Date.

       

      Conditions.
        The
        obligation of an Issuing Bank to issue any Facility Letter of Credit, and
        of
        each Bank to participate therein as provided in Section 3.5 is subject to
        the
        satisfaction in full of the applicable conditions precedent set forth in
        Section
        8 and each of the following conditions:

       

      the
        Borrower shall have delivered to the Issuing Bank, at such times and -in
        such
        manner as such Issuing Bank may prescribe, a Letter of Credit application,
        a
        Letter of Credit Reimbursement Agreement, and such other documents and materials
        as may be required pursuant to the terms thereof;

       

      the
        terms of the proposed Facility Letter of Credit shall not be inconsistent
        with
        any term or provision of this Agreement and otherwise shall be satisfactory
        to
        such Issuing Bank; and

       

      as
        of the date of issuance of such Facility Letter of Credit, no order, judgment,
        or decree of any court, arbitrator, or governmental authority shall purport
        by
        its terms to enjoin or restrain the Issuing Bank from issuing such Facility
        Letter of Credit, and no law, rule, or regulation applicable to such Issuing
        Bank, and no request or directive (whether or not having the force of law)
        from
        any governmental authority having jurisdiction over such Issuing Bank, shall
        prohibit or request that such Issuing Bank refrain from the issuance of Letters
        of Credit, generally or the issuance of such Facility Letter of
        Credit.

       

      Issuance
        of Facility Letters of Credit 

       

      The
        Borrower shall give the Agent written notice (or telephonic notice confirmed
        in
        writing by the Borrower not later than the requested issuance date of the
        Facility Letter of Credit) of its request for the issuance of a Facility
        Letter
        of Credit no later than 11:00 a.m. four (4) Business Days prior to the date
        such
        Facility Letter of Credit is requested to be issued. Such notice shall be
        irrevocable and shall specify, with respect to such requested Facility Letter
        of
        Credit, the 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      face
        amount, beneficiary, effective date of issuance, expiry date (which effective
        date and expiry date shall be a Business Day and, with respect to the expiry
        date, shall be no later than the Business Day immediately preceding the Maturity
        Date), the identity of the Issuing Bank selected by the Borrower, and the
        purpose for which such Facility Letter of Credit is to be issued. At the
        time a
        request for the issuance of a Facility Letter of Credit is made, the Borrower
        shall also provide the Agent with a copy of the form of Letter of Credit
        that
        the proposed Issuing Bank has agreed to issue. If the face amount of the
        requested Facility Letter of Credit is less than or equal to the Unused L/C
        Subfacility, as determined by the Agent as of the close of business on the
        date
        of its receipt of written notice of the requested issuance, the Agent shall
        so
        notify the proposed Issuing Bank in writing (or by telephonic notice promptly
        confirmed thereafter in writing) not later than the close of business on
        the
        second Business Day following the Agent’s receipt of the Borrower’s written
        notice. The Issuing -Bank shall issue such Facility Letter of Credit on the
        date
        requested by the Borrower, unless (i)
        on or before the Business Day prior to such issuance date, such Issuing Bank
        shall have received written notice from the Agent or any Bank that the
        conditions precedent to the issuance of a Facility Letter of Credit as set
        forth
        in Section 3.2 have not been met; or (ii) on the requested issuance date,
        such
        Issuing Bank has actual knowledge that such conditions precedent have not
        been
        met. If an Issuing Bank receives written notice, or has actual knowledge,
        that
        the conditions precedent to the issuance of a Facility Letter of Credit have
        not
        been met, then such Issuing Bank shall have no obligation to issue, and shall
        not issue, any Facility Letter of Credit until (i) such notice is withdrawn;
        or
        (ii) such Issuing Bank receives a notice from the Agent that the condition(s)
        described in such notice have been waived in accordance with the provisions
        of
        this Agreement. The Issuing Bank shall give the Agent prompt written notice
        (or
        telephonic notice promptly confirmed in writing) of the issuance of any Facility
        Letter of Credit. Any Letter of Credit issued by an Issuing Bank in compliance
        with the provisions of this Section 3.3 shall be a Facility Letter of
        Credit.

       

      An
        Issuing Bank shall not extend or amend any Facility Letter of Credit unless
        the
        requirements of this Section 3.3 are met as though a new Facility Letter
        of
        Credit was being requested and issued.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      An
        Issuing Bank or any Bank may issue Non-Facility Letters of Credit for its
        own
        account, and at its own risk. None of the provisions of this Section 3 shall
        apply to any Non-Facility Letter of Credit.

       

      Reimbursement
        Obligations; Duties of Issuing Bank

       

      Notwithstanding
        any provisions to the contrary in any Letter of Credit Reimbursement
        Agreement:

       

      the
        Borrower shall reimburse the applicable Issuing Bank for a drawing under
        a
        Facility Letter of Credit issued by such Issuing Bank no later than the earlier
        of (A) the time specified in the related Letter of Credit Reimbursement
        Agreement; or (B) one (1) Business Day after the payment of such drawing
        by such
        Issuing Bank; and

       

      the
        Borrower’s Reimbursement Obligations with respect to a drawing under a Facility
        Letter of Credit shall bear interest from the date of such drawing to the
        date
        paid in full at the higher of (A) the interest rate specified in the applicable
        Letter of Credit Reimbursement Agreement; or (B) the interest rate for past
        due
        Alternate Base Rate Loans; but not
        greater than the Highest Lawful Rate.

       

      No
        action taken or omitted to be taken by an Issuing Bank in connection -with
        any
        Facility Letter of Credit shall (i) result in any liability on the part of
        such
        Issuing Bank to any Bank, unless such Issuing Bank’s action or omission
        constitutes willful misconduct or gross negligence; or (ii) relieve any Bank
        of
        any of its obligations to such Issuing Bank hereunder, unless the Facility
        Letter of Credit in question was issued in contravention of the provisions
        of
        Section 3.3 or at a time during which a notice, described in Section 3.3,
        from
        such Bank to such Issuing Bank remained in effect. Each Bank agrees that,
        prior
        to making any payment to a beneficiary with respect to a drawing under a
        Facility Letter of Credit, the Issuing Bank shall be responsible only to
        confirm
        that documents required by the terms of such Facility Letter of Credit to
        be
        delivered as a condition precedent to such drawing have been delivered and
        that
        the same appear on their face to conform with the requirements thereof. Each
        Bank further agrees that such Issuing Bank may assume that documents appearing
        on their face to be the documents required to be delivered as a condition
        precedent to a drawing do in fact comply.

       

      Participations

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Immediately
        upon the issuance by an Issuing Bank of any Facility Letter of Credit in
        compliance with the provisions of Section 3.3, and immediately upon conversion
        of a Letter of Credit of an Issuing Bank to a Facility Letter of Credit pursuant
        to Section 3.10, each Bank shall be deemed to have irrevocably and
        unconditionally purchased and received from such Issuing Bank, without recourse
        or warranty, an undivided interest and participation to the extent of such
        Bank's Pro Rata Percentage in such Facility Letter of Credit, including without
        limitation, all obligations of the Borrower with respect thereto and any
        security therefor or guaranty pertaining thereto.

       

      An
        Issuing Bank shall promptly notify the Agent, and the Agent shall promptly
        notify the other Banks, if the Borrower fails to reimburse such Issuing Bank
        for
        payments made by such Issuing Bank in respect of drawings by a beneficiary
        under
        a Facility Letter of Credit. Upon each such other Banks receipt of such notice,
        such Bank shall unconditionally pay to the Agent, for the account of such
        Issuing Bank, an amount equal to such Bank's Pro Rata Percentage of the
        unreimbursed payment made by such Issuing Bank under the Facility Letter
        of
        Credit. Such payment shall be made by such Bank in Dollars and in same day
        funds
        on the day such Bank receives notice from the Agent that such payment is
        owing,
        if such notice is received by such Bank prior to 11:00 a.m. (Houston
        time)
        on a Business Day; if such notice is not received by such time, then such
        Bank
        shall remit its payment on the next Business Day following the day such notice
        is received. Any amount payable by a Bank under this Section 3.5(b) which
        is not
        paid when due pursuant to the terms hereof shall be payable on demand, together
        with interest thereon at the Federal Funds Rate from the date such payment
        was
        due until paid in full. The failure of any Bank to make any payment owing
        by it
        under this Section 3.5(b) shall neither relieve nor increase the obligation
        of
        any other Bank to make any payment owing by it under this Section 3.5(b).
        The
        Agent shall promptly remit to the applicable Issuing Bank all amounts received
        by the Agent, for the account of such Issuing Bank, from each Bank pursuant
        to
        this Section 3.5(b). No payment made by a Bank pursuant to this Section 3.5(b)
        shall prejudice the ability of such Bank to claim that the Issuing Bank to
        which
        such payment is made is subject to liability under Section 3.4(b).

       

      Whenever
        an Issuing Bank receives a payment with respect to a Reimbursement Obligation
        (including any interest thereon) for which such Issuing Bank has received
        payments from a Bank pursuant to 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Section
        3.5(b), such Issuing Bank shall promptly remit to the Agent and the Agent
        shall
        promptly remit to each Bank which has funded its participating interest therein,
        in Dollars and in the kind of funds so received, an amount equal to each
        Bank's
        Pro Rata Percentage thereof. Each such payment shall be made by the Issuing
        Bank
        or the Agent, as the case may be, on the Business Day on which such Person
        receives the funds paid to such Person pursuant to the preceding sentence,
        if
        received prior to 11:00 a.m. (Houston time) on such Business Day,
        and
        otherwise on the next succeeding Business Day.

       

      Upon
        the request of the Agent or any Bank, an Issuing Bank shall furnish to the
        Agent
        or each Bank copies of any Facility Letter of Credit, Letter of Credit
        Reimbursement Agreement, or Letter of Credit application to which Issuing
        Bank
        is party, and such other documentation as may reasonably be requested by
        the
        Agent or such Bank with respect to a Facility Letter of Credit issued by
        such
        Issuing Bank.

       

      The
        obligations of a Bank under Section 3.5(b) to make payments to the Agent
        for the
        account of an Issuing Bank with respect to a Facility Letter of Credit shall
        be
        irrevocable, not subject to any qualification or exception whatsoever, and
        shall
        be made in accordance with, but not subject to, the terms and conditions
        of this
        Agreement under all circumstances (assuming that such Issuing Bank has issued
        such Facility Letter of Credit in compliance with the provisions of
        Section 3.3), including, without limitation, any of the following
        circumstances:

       

      any
        lack of validity or enforceability of this Agreement or any other Loan
        Document;

       

      the
        existence of any claim, set off, defense, or other right which the Borrower
        may
        have at any time against a beneficiary named in a Facility Letter of Credit
        or
        any transferee of any Facility Letter of Credit (or any Person for whom any
        such
        transferee may be acting), the Agent, any Bank, the Issuing Bank, or any
        Person,
        whether in connection with this Agreement, any Facility Letter of Credit,
        the
        transactions contemplated herein, or any unrelated transactions (including
        any
        un-der-lying transactions between the Borrower and the beneficiary named
        in any
        Facility Letter of Credit);

       

      any
        draft, certificate, of any other document presented under the Facility Letter
        of
        Credit proving to be forged, fraudulent, invalid, or 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      insufficient
        in any respect or any statement therein being untrue or inaccurate in any
        respect; 

       

      the
        surrender or impairment of any security for the performance or observance
        of any
        of the terms of any Loan Document;

       

      any
        failure by the Agent or an Issuing Bank to make any reports required pursuant
        to
        Section 3.8; or

       

      the
        occurrence of any Default or Event of Default.

       

      Payment
        of Reimbursement Obligations 

       

      The
        Borrower agrees to pay to each Issuing Bank the amount of all Reimbursement
        Obligations, interest, and other amounts payable to such Issuing Bank under
        or
        in connection with any Facility Letter of Credit immediately when due,
        irrespective of any claim, set off, defense, or other right which the Borrower
        may have at any time against any Issuing Bank or any other
        Person.

       

      In
        the event any payment by the Borrower received by an Issuing Bank with respect
        to a Facility Letter of Credit and distributed to Banks on account of their
        respective participation is thereafter set aside, avoided, or recovered from
        such Issuing Bank in connection with any Debtor Laws, each Bank which received
        such distribution shall, upon demand by such Issuing Bank, contribute each
        Bank's Pro Rata Percentage of the amount set aside, avoided, or recovered
        together with interest at the rate required to be paid by the Issuing Bank
        upon
        the amount required to be repaid by it.

       

      Exoneration.
        As between the Borrower, each Bank, and each Issuing Bank, the Borrower assumes
        all risks of the acts and omissions of, or misuse of the Facility Letter
        of
        Credit issued by such Issuing Bank by, the respective beneficiaries of such
        Facility Letter of Credit. In furtherance and not in limitation of the
        foregoing, subject to the provisions of the Letter of Credit applications,
        the
        Issuing Bank and the Banks shall not be responsible for:

       

      the
        form, validity, sufficiency, accuracy, genuineness, or legal effect of any
        document submitted by any party in connection with the application for and
        issuance of a Facility Letter of Credit, even if it should in fact prove
        to be
        in any or all respects invalid, insufficient, inaccurate, fraudulent, or
        forged;

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      the
        validity or sufficiency of any instrument transferring or assigning or
        purporting to transfer or assign a Facility Letter of Credit or the rights
        or
        benefits thereunder or proceeds thereof, in whole or in part, which may prove
        to
        be invalid or ineffective for any reason;

       

      failure
        of the beneficiary of a Facility Letter of Credit to comply duly with conditions
        required in order to draw upon such Facility Letter of Credit,
provided that
        the Issuing Bank complies with the provisions of Section
        3.4(b);

       

      errors,
        omissions, interruptions, or delays in transmission or delivery of any messages,
        by mail, cable, telegraph, telex, or otherwise, whether or not they be in
        cipher;

       

      errors
        in interpretation of technical terms;

       

      any
        loss or delay in the transmission or otherwise of any document required in
        order
        to make a drawing under any Facility Letter of Credit or of the proceeds
        thereof;

       

      the
        misapplication by the beneficiary of a Facility Letter of Credit;
        or

       

      any
        consequences arising from causes beyond the control of the Agent, any Bank,
        or
        any Issuing Bank, including, without limitation, any act or omission, whether
        rightful or wrongful, of any present or future de jure or de facto government
        or
        Governmental Authority. In furtherance and extension and not in limitation
        of
        the specific provisions hereinabove set forth, any action taken or omitted
        by an
        Issuing Bank under or in connection with the Facility Letters of Credit or
        any
        related certificates, if taken or omitted in good faith and not constituting
        gross negligence or willful misconduct, shall not put the Issuing Bank, the
        Agent, or any Bank under any resulting liability to the Borrower or relieve
        the
        Borrower of any of its obligations hereunder to any such
        Person.

       

      Issuing
        Bank's Reporting Requirements. In addition to the reports required
        by Section 3.5, each Issuing Bank shall, no later than the tenth (10th) Business
        Day following the last day of each quarter of such Issuing Bank's fiscal
        year,
        provide to the Agent and the Borrower a schedule for Standby Letters of Credit
        issued as Facility Letters of Credit, in form and substance reasonably
        satisfactory to the Agent, showing the date of issue, beneficiary, face amount,
        expiration date, and the reference number of each Facility Letter of Credit
        issued 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      by
        such Issuing Bank which was outstanding at any time during such quarter and
        the
        aggregate amount payable by the Borrower during the quarter pursuant to Section
        3.9.

       

      Compensation
        for Facility Letters of Credit 

       

      Facility
        Letter of Credit Fee. The Borrower agrees to pay to the
        Agent, for the account of each Bank, in the case of each Letter of Credit
        issued
        as, or converted to (for transactions which convert Letters of Credit in
        existence on the Closing Date to Facility Letters of Credit pursuant to Section
        3.10), a Facility Letter of Credit, a facility letter of credit fee (the
        “Facility Letter of Credit Fee”) payable quarterly in arrears equal to the
        applicable Facility Letter of Credit Fee Percentage of the average amount
        available to be drawn under such Letter of Credit during the quarter then
        ending
        multiplied by the actual number of days during such quarter on which such
        Letter
        of Credit was outstanding, divided by 360 but no less than $500.00 per Facility
        Letter of Credit per year. The Borrower shall also pay to the Agent in the
        event
        of any extension or modification of a Facility Letter of Credit which extends
        the expiration date or increases the maximum amount available for drawing
        thereunder an additional fee calculated and payable on the same basis as
        that
        set forth in the first sentence of this Section 3.9(a) with respect to any
        such
        extension or additional amount. Whenever an Issuing Bank receives a payment
        from
        the Borrower with respect to any fees incurred in connection with any Facility
        Letter of Credit issued by such Issuing Bank, such Issuing Bank shall promptly
        remit to the Agent, and the Agent shall promptly remit to each Bank which
        has
        funded its participation in such Facility Letter of Credit, in Dollars and
        in
        same day funds, an amount equal to such Bank's Pro Rata Percentage of such
        fees.

       

      Issuing
        Bank's Charges.
        Each Issuing Bank shall have the right to receive, solely for its own account,
        such amounts as it and the Borrower may agree, in writing, to compensate
        such
        Issuing Bank with respect to issuance fees and such Issuing Bank's out-of-pocket
        costs of issuing and servicing Facility Letters of Credit.

       

      Increased
        Capital.
        If either (i) the introduction of or any change in or in the interpretation
        of
        any law or regulation, or (ii) compliance by any Issuing Bank or any Bank
        with
        any guideline or request from any central bank or other Governmental Authority
        (whether or not having the force of law) affects or would affect (by an amount
        deemed by such Issuing Bank to be material) the capital required or expected
        

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      to
        be maintained by it or any corporation controlling it, and such Bank or such
        Issuing Bank determines, on the basis of reasonable allocations, that the
        amount
        of such capital is increased by (an amount deemed by such Issuing Bank to
        be
        material) or is based (to a degree deemed by such Issuing Bank to be material)
        upon its issuance or maintenance of or participation in, or commitment to
        issue
        or to participate in, the Facility Letters of Credit then, upon demand by
        such
        Bank or such Issuing Bank, the Borrower shall immediately pay to the Agent
        (for
        the account of each Bank) or such Issuing Bank, from time to time as specified
        by such Bank or such Issuing Bank, additional amounts sufficient to compensate
        such Bank or such Issuing Bank therefor. A certificate as to such amounts
        submitted to the Borrower by such Bank or such Issuing Bank shall, in the
        absence of manifest error, be conclusive and binding for all
        purposes.

       

      Transitional
        Provisions. Schedule
        3.10
        contains a schedule of certain Letters of Credit issued for the account of
        the
        Borrower prior to the Closing Date by one or more of the Issuing Banks. Subject
        to the satisfaction of the conditions precedent contained in Section 8, on
        the
        Closing Date (a) such Letters of Credit shall be deemed to be converted into
        Facility Letters of Credit issued pursuant to Section 3.3; and (b) the face
        amount of such Letters of Credit shall be included in the calculation of
        the
        Facility Letter of Credit Obligations.

       

      PAYMENTS
        AND PREPAYMENTS

       

      Required
        Prepayments

       

      The
        Borrower agrees that if at any time it or the Agent determines that the sum
        of
        (i) the aggregate principal amount of Loans outstanding and (ii) the face
        amount
        of Facility Letters of Credit issued hereunder exceeds the Commitments, then
        the
        Borrower shall make a prepayment of principal of the Loans in an amount at
        least
        equal to such excess.

       

      Upon
        the Borrower's reduction or termination of the Commitments under Section
        4.6,
        the Borrower shall make such prepayments as are required by the terms of
        Section
        4.6.

       

      Repayment
        of the Loans. Borrower shall repay the principal amount of each
        Loan, on the last day of the Rate Period for such Loan, together with all
        accrued and unpaid interest thereon as of such 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      date,
        irrespective of any claim, set off, defense, or other right which the Borrower
        may have at any time against any Bank, the Agent or any other
        Person.

       

      Place
        of
        Payment or Prepayment. All
        payments and prepayments made in accordance with the provisions of this
        Agreement or of the Notes or of any other Loan Document or of the Letter
        of
        Credit Reimbursement Agreements in respect of commitment fees or of principal
        or
        interest on the Notes shall be made to the Agent for the account of the Banks
        at
        its Domestic Lending Office, no later than noon, Houston time, in immediately
        available funds. Unless the Agent shall have received notice from the Borrower
        prior to the date on which any payment is due to the Banks hereunder that
        the
        Borrower will not make any payment due hereunder in full, the Agent may assume
        that the Borrower has made such payment in full to the Agent on such date
        and
        the Agent may, in reliance upon such assumption, cause to be distributed
        to each
        Bank on such due date an amount equal to the amount then due to such Bank.
        If
        and to the extent the Borrower shall not have so made such payment in full
        to
        the Agent, each Bank shall repay to the Agent forthwith on demand such amount
        distributed to such Bank together with interest thereon, for each day from
        the
        date such amount is distributed to such Bank until the date such Bank repays
        such amount to the Agent, at the Federal Funds Rate. If and to the extent
        that
        the Agent receives any payment or prepayment from the Borrower and fails
        to
        distribute such payment or prepayment to the Banks ratably on the basis of
        their
        respective Pro Rata Percentage on the day the Agent receives such payment
        or
        prepayment, and such distribution shall not be so made by the Agent in full
        on
        the required day, the Agent shall pay to each Bank such Bank's Pro Rata
        Percentage thereof together with interest thereon at the Federal Funds Rate
        for
        each day from the date such amount is paid to the Agent by the Borrower until
        the date the Agent pays such amount to such Bank.

       

      No
        Prepayment Premium or Penalty.
        Each prepayment pursuant to Section 4.1 or 4.3 shall be without premium or
        penalty, subject in the case of Eurodollar Rate Loans to the provisions of
        Section 2.3(d).

       

      Taxes.
        All payments (whether of principal, interest, reimbursements or otherwise)
        under
        this Agreement or on the Notes or in respect of Facility Letter of Credit
        Obligations shall be made by 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      the
        Borrower without set off or counterclaim and shall be made free and clear
        of and
        without deduction for any present or future tax, levy, impost or any other
        charge, if any, of any nature whatsoever now or hereafter imposed by any
        taxing
        authority. If the making of such payments is prohibited by law, unless such
        a
        tax, levy, impost or other charge is deducted or withheld therefrom, the
        Borrower shall pay to the Banks, on the date of each such payment, such
        additional amounts as may be necessary in order that the net amounts received
        by
        the Banks after such deduction or withholding shall equal the amounts which
        would have been received if such deduction or withholding were not
        required.

       

      Reduction
        or Termination of Commitments.
        The Borrower may at any time or from time to time reduce or terminate the
        Commitment of each Bank by giving not less than ten (10) full Business Days'
        prior written notice to such effect to the Agent, provided that any partial
        reduction shall be in the amount of $1,000,000.00 or an integral multiple
        thereof. Concurrently with each such reduction or termination, all amounts
        in
        excess of the reduced Commitments shall be automatically due and payable
        and it
        is a condition to the effectiveness of such reduction that the Borrower shall
        immediately prepay the entire amount of such excess together with all accrued
        interest thereon and such other amounts that may be required to be paid in
        consequence of such prepayment under Section 2.3(d). Promptly after the Agent's
        receipt of such notice of reduction, the Agent shall notify each Bank of
        the
        proposed reduction and such reduction shall be effective on the date specified
        in the Borrower's notice with respect to such reduction and shall reduce
        the
        Commitment of each Bank proportionately in accordance with its Pro Rata
        Percentage (and such reduction shall also ratably reduce the Commitments
        related
        to Facility Letters of Credit). After each such reduction, the commitment
        fee
        shall be calculated upon the Commitments as so reduced. The Commitment of
        each
        Bank shall automatically terminate on the Maturity Date or in the event of
        acceleration of the maturity date of the Notes. Each reduction of the Commitment
        hereunder shall be irrevocable.

       

      COMMITMENT
        FEE AND OTHER FEES

       

      Commitment
        Fee. The
        Borrower agrees to pay to the Agent for the account of each Bank a commitment
        fee based on a year of 360 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      days,
        from the Closing Date to, but not including, the Maturity Date (or such earlier
        date as of which all Commitments shall have terminated), on the daily average
        unused amount of each Bank’s Commitment, such commitment fee to be payable
        quarterly in arrears on (a) the last day of each March, June, September,
        and
        December, commencing on September 30, 2005 and (b) the Maturity Date, at
        a rate
        per annum changing with the rating of the Borrower’s unsecured, non-credit
        enhanced Senior Funded Debt, and determined in accordance with the following
        grid:

       

      
        	
                 

                Rating
                  of the Borrower’s
                  unsecured, non-credit enhanced Senior Funded Debt

                 

              	
                 

                Percentage
                  Per Annum

                 

              
	
                 

                Equal
                  to or greater than A3 by Moody’s Investor Service, Inc. and
                  equal to or greater than A- by Standard and Poor’s Ratings
                  Group

                 

              	
                 

                0.080%

                 

              
	
                 

                Baa1
                  by Moody’s Investor Service, Inc. or
                  BBB+ by Standard and Poor’s Ratings Group

                 

              	
                 

                0.100%

                 

              
	
                 

                Baa2
                  by Moody’s Investor Service, Inc. or
                  BBB by Standard and Poor’s Ratings Group

                 

              	
                 

                0.110%

                 

              
	
                 

                Baa3
                  by Moody’s Investor Service, Inc. or
                  BBB- by Standard and Poor’s Ratings Group

                 

              	
                 

                0.150%

                 

              
	
                 

                Ba1
                  by Moody’s Investor Service, Inc. or
                  BB+ by Standard and Poor’s Ratings Group

                 

              	
                 

                0.200%

                 

              
	
                 

                Less
                  than Ba1 by Moody’s Investor Service, Inc. and
                  less than BB+ by Standard and Poor’s Ratings Group

                 

              	
                 

                0.250%

                 

              

      

      

      Notwithstanding
        the foregoing provisions, in the event that ratings of the Borrower’s unsecured,
        non-credit enhanced Senior Funded Debt under Standard & Poor’s Ratings Group
        and under Moody’s Investor Service, Inc. fall within different rating categories
        which are not functional equivalents, the above-described commitment fee
        shall
        be based on the higher of such ratings if there is only one category
        differential between the functional equivalents of such ratings, and if there
        is
        a two category differential between the functional equivalents of such ratings,
        the component of pricing from the grid set forth above shall be based on
        the
        rating category which is then in the middle of or between the two category
        ratings which are then in effect, and if there is greater than a two category
        differential between the functional equivalents of such ratings, the component
        of pricing from the grid set forth above shall be based on the rating category
        which is then one rating category above the lowest of the two category ratings
        which are then in effect. Additionally, in the event that Borrower withdraws
        from having its unsecured, non-

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      credit
        enhanced Senior Funded Debt being rated by Moody’s Investor Service, Inc. or
        Standard and Poor’s Ratings Group, so that one or both of such ratings services
        fails to rate the Borrower’s unsecured, non-credit enhanced Senior Funded Debt,
        the component of pricing from the grid set forth above for purposes of
        determining the applicable commitment fee for all periods thereafter shall
        be
        0.250% until such time as the Borrower subsequently causes its unsecured,
        non-credit enhanced Senior Funded Debt to be rated by both of said ratings
        services.

       

      

      Facility
        Letter of Credit Fee. The
        Borrower shall pay to the Agent, for the account of each Issuing Bank, the
        Facility Letter of Credit Fees as set forth in Section
        3.9.

       

      Fees
        Not
        Interest; Nonpayment. The
        fees described in this Agreement represent compen-sation for services rendered
        and to be rendered separate and apart from the lending of money or the provision
        of credit and do not constitute compensation for the use, detention, or
        forbearance of money, and the obligation of the Borrower to pay each fee
        described herein shall be in addition to, and not in lieu of, the obligation
        of
        the Borrower to pay interest, other fees described in this Agree-ment, and
        expenses otherwise described in this Agreement. Fees shall be payable when
        due
        in Dollars and in immediately available funds. The commitment fee referred
        to in
        Section 5.1 shall be non-refundable, and shall, to the fullest extent permitted
        by law, bear interest, if not paid when due, at a rate per annum equal to
        the
        lesser of (a) five percent (5%) above the Alternate Base Rate as in effect
        from
        time to time or (b) the Highest Lawful Rate.

       

      Utilization
        Fee.
        The Borrower agrees to pay to Agent, for the account of each Bank, a utilization
        fee at a rate per annum equal to 0.100%, based on a year of 360 days, from
        the
        Closing Date to, but not including, the Maturity Date (or such earlier date
        as
        of which the Commitments have been terminated), on the daily average of the
        aggregate principal amount of the Loans outstanding on those days when such
        aggregate principal amount of the Loans outstanding exceeds fifty percent
        (50%)
        of the aggregate amount of the Commitments, such utilization fee to be payable
        quarterly in arrears on (a) the last day of each March, June, September,
        and
        December, commencing on September 30, 2005, and (b) the Maturity
        Date.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      APPLICATION
        OF PROCEEDS

       

       

      6.1 Application
        of Proceeds. The
        Borrower agrees that the proceeds of the Loans shall be used to provide working
        capital and for general corporate purposes, including without limitation,
        financing the Borrower’s (i) acquisition of Qualifying Assets, (ii) open market
        acquisition of its Senior Notes, and (iii) repurchase of its own common stock
        and preferred equity securities to the extent permitted under the terms of
        Section
        10.11.

       

      

      

      REPRESENTATIONS
        AND WARRANTIES

       

      The
        Borrower represents and warrants that:

      

      Organization
        and Qualification.
        The Borrower and each Subsidiary: (a) are corporations duly organized, validly
        existing, and in good standing under the laws of their respective states
        of
        incorporation; (b) have the corporate or organizational power to own their
        respective properties and to carry on their respective businesses as now
        conducted; and (c) are duly qualified as foreign corporations (or, in the
        case
        of any Southern Union Trust, trusts) to do business and are in good standing
        in
        every jurisdiction where such qualification is necessary except when the
        failure
        to so qualify would not or does not have a Material Adverse Effect. The Borrower
        is a corporation organized under the laws of Delaware and has the Subsidiaries
        listed on Schedule
        7.1
        attached hereto and made a part hereof for all purposes, and no others, each
        of
        which is a Delaware corporation unless otherwise noted on Schedule
        7.1.
        None of the Subsidiaries listed on Schedule
        7.1
        as “Inactive Subsidiaries” conducts or will conduct any business, and none of
        such Subsidiaries has any assets other than minimum legal
        capitalization.

       

      Financial
        Statements.
        The Borrower has furnished the Banks with (a) the Borrower’s annual audit
        reports containing the Borrower’s consolidated balance sheets, statements of
        income and stockholder's equity and a cash flow statements as at and for
        the
        twelve month period ending December 31, 2004, accompanied by the certificate
        of
        Price Waterhouse Coopers and (b) the Borrower’s unaudited financial report as of
        the fiscal quarter ending June 30, 2005. These statements are complete and
        correct and present fairly in accordance with GAAP, consistently applied
        throughout the periods involved, the consolidated financial position of the
        Borrower and the Subsidiaries 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      and
        the results of its and their operations as at the dates -and for the periods
        indicated subject, as to interim statements only, to changes resulting from
        customary end-of-year credit adjustments which in the aggregate will not
        be
        material. 

       

      Litigation.
        Except as disclosed on Schedule
        7.3
        or pursuant to Section 7.16, there is no: (a) action or proceeding pending
        or,
        to the knowledge of the Borrower, threatened against the Borrower or any
        Subsidiary before any court, administrative agency or arbitrator which is
        reasonably expected to have a Material Adverse Effect; (b) judgment outstanding
        against the Borrower for the payment of money; or (c) other outstanding
        judgment, order or decree affecting the Borrower or any Subsidiary before
        or by
        any administrative or governmental authority, compliance with or satisfaction
        of
        which may reasonably be expected to have a Material Adverse Effect.

       

      Default.
        Neither the Borrower nor any Subsidiary is in default under or in violation
        of
        the provisions of any instrument evidencing any Debt or of any agreement
        relating thereto or any judgment, order, writ, injunction or decree of any
        court
        or any order, regulation or demand of any administrative or governmental
        instrumentality which default or violation might have a Material Adverse
        Effect.

       

      Title
        to
        Assets. The
        Borrower and each Subsidiary have good and marketable title to their respective
        assets, subject to no Liens except those permitted in Section
        10.2.

       

      Payment
        of Taxes. The
        Borrower and each Subsidiary have filed all tax returns required to be filed
        and
        have paid all taxes shown on said returns and all assessments which are due
        and
        payable (except such as are being contested in good faith by appropriate
        proceedings for which adequate reserves for their payment have been provided
        in
        a manner consistent with the accounting practices followed by the Borrower
        as of
        June 30, 2005). The Borrower is not aware of any pending investigation by
        any
        taxing authority or of any claims by any governmental authority for any unpaid
        taxes, except as disclosed on Schedule
        7.6.

       

      Conflicting
        or Adverse Agreements or Restrictions.
        Neither the Borrower nor any Subsidiary is a party to any contract or agreement
        or subject to any restriction which would have a Material Adverse

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Effect.
        Neither the execution and delivery of this Agreement or the Notes or any
        other
        Loan Document nor the consummation of the transactions contemplated hereby
        nor
        fulfillment of and compliance with the respective terms, conditions and
        provisions hereof or of the Notes or of any instruments required hereby will
        conflict with or result in a breach of any of the terms, conditions or
        provisions of, or constitute a default under, or result in any violation
        of, or
        result in the creation or imposition of any lien (other than as contemplated
        or
        permitted by this Agreement) on any of the property of the Borrower or any
        Subsidiary pursuant to (a) the charter or bylaws applicable to the Borrower
        or
        any Subsidiary; (b) any law or any regulation of any administrative or
        governmental instrumentality; (c) any order, writ, injunction or decree of
        any
        court; or (d) the terms, conditions or provisions of any agreement or instrument
        to which the Borrower or any Subsidiary is a party or by which it is bound
        or to
        which it is subject.

       

      Authorization,
        Validity, Etc.
        The Borrower has the corporate power and authority to make, execute, deliver
        and
        carry out this Agreement and the transactions contemplated herein, to make
        the
        borrowings provided for herein, to execute and deliver the Notes and to perform
        its obligations hereunder and under the Notes and the other Loan Documents
        to
        which it is a party and all such action has been duly authorized by all
        necessary corporate proceedings on its part. This Agreement has been duly
        and
        validly executed and delivered by the Borrower and constitutes the valid
        and
        legally binding agreement of the Borrower enforceable in accordance with
        its
        terms, except as limited by Debtor Laws; and the Notes and the other Loan
        Documents, when duly executed and delivered by the Borrower pursuant to the
        provisions hereof, will constitute the valid and legally binding obligation
        of
        the Borrower enforceable in accordance with the terms thereof and of this
        Agreement, except as limited by Debtor Laws.

       

      Investment
        Company Act Not Applicable. Neither
        the Borrower nor any Subsidiary is an "investment company” or a company
        "controlled” by an "investment company”, within the meaning of the Investment
        Company Act of 1940, as amended.

       

      Public
        Utility Holding Company Act Not Applicable. Neither
        the Borrower nor any Subsidiary is a "holding company”, or a "subsidiary

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      company”
        of a "holding company”, or an "affiliate” of a "holding company”, or an
        affiliate of a "subsidiary company” of a "holding company”, as such terms are
        defined in the Public Utility Holding Company Act of 1935, as
        amended.

       

      Regulations
        G, T, U and X. No
        Loan shall be a "purpose credit secured directly or indirectly by margin
        stock”
        within the meaning of Regulation U of the Board of Governors of the Federal
        Reserve System ("margin stock”); none of the proceeds of any Loan will be used
        to extend credit to others for the purpose of purchasing or carrying any
        margin
        stock, or for any other purpose which would constitute this transaction a
        "purpose credit secured directly or indirectly by margin stock” within the
        meaning of said Regulation U, as now in effect or as the same may hereafter
        be
        in effect. Neither the Borrower nor any Subsidiary will take or permit any
        action which would involve the Banks in a violation of Regulation G, Regulation
        T, Regulation U, Regulation X or any other regu-lation of the Board of Governors
        of the Federal Reserve System or a violation of the Securities Exchange Act
        of
        1934, in each case as now or hereafter in effect. After applying proceeds
        of the
        Loans used to acquire the equity interests described in the definition of
        "Qualifying Assets”, not more than twenty-five percent (25%) of the value (as
        determined by any reasonable method) of the assets subject to the negative
        pledge set forth in Section 10.2 of the Credit Agreement and the restrictions
        on
        dis-position of assets set forth in Section 10.8 of the Credit Agreement
        is
        represented by margin stock.

       

      ERISA.
        No
        Reportable Event (as defined in § 4043(c) of ERISA) has occurred with respect to
        any Plan. Except
        as
        provided in Schedule 7.12,
        each Plan complies in all material respects with applicable provisions of
        ERISA,
        and the Borrower and each Subsidiary have filed all reports required by ERISA
        and the Code to be filed with respect to each Plan. Except
        as provided in Schedule 7.12, the
        Borrower has no knowledge of any event which could result in a liability
        of the
        Borrower or any Subsidiary to the Pension Benefit Guaranty Corporation. The
        Borrower and each Subsidiary have met all requirements with respect to funding
        the Plans imposed by ERISA or the Code. Since the effective date of Title
        IV of
        ERISA, there have not been any, nor are there now existing any, events or
        conditions that would permit any Plan to be terminated under circumstances
        

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      which
        would cause the lien provided under § 4068 of ERISA to attach to any property of
        the Borrower or any Subsidiary. 

       

      No
        Financing of Certain Security Acquisitions.
        None of the proceeds of any Loan will be used to acquire any security in
        any
        transaction that is subject to §13 or §14 of the Securities Exchange Act of
        1934, as amended, except the equity interests described in subparagraph (ii)
        of
        the definition of "Qualifying Assets”.

       

      Franchises,
        Co-Licenses, Etc. The
        Borrower and each Subsidiary own or have obtained all the material governmental
        permits, certificates of authority, leases, patents, trademarks, service
        marks,
        trade names, copyrights, franchises and licenses, and rights with respect
        thereto, required or necessary (or, in the sole and independent judgment
        of the
        Borrower, prudent) in connection with the conduct of their respective businesses
        as presently conducted or as proposed to be conducted.

       

      Lines
        of
        Business. The
        nature of the Borrower's lines of business are predominately the following:
        (a)
        the operation of energy distribution and transportation services, including
        without limitation, natural gas sales, storage and transportation and
        distribution, propane sales and distribution and promotion, marketing and
        sale
        of compressed natural gas and the terminalling and storage of liquefied natural
        gas; (b) the development and marketing of fuel cell and distributive energy
        options; (c) electric marketing/generation; (d) the operation of fuel oil
        distribution and transportation networks; and (e) sales and rentals of
        appliances utilizing one or more of the fuel or energy options specified
        in this
        Section 7.15.

       

      Environmental
        Matters.
        Except as disclosed in Schedule
        7.16,
        all facilities and property owned or leased by the Borrower or any Subsidiary
        have been and continue to be, owned or leased and operated by the Borrower
        and
        each Subsidiary in material compliance with all Environmental Laws; (i) there
        has not been (during the period of the Borrower’s, or a Subsidiary's ownership
        or lease) any Release of Hazardous Materials at, on or under any property
        now
        (or, to the Borrower’s knowledge, previously) owned or leased by the Borrower or
        any Subsidiary (A) in quantities that would be required to be reported under
        any
        Environmental Law, (B) that required, or may reasonably be expected to require,
        the Borrower to expend funds on 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      remediation
        or cleanup activities pursuant to any Environmental Law except for remediation
        or clean-up activities that would not be reasonably expected to have a Material
        Adverse Effect, or (C) that otherwise, singly or in the aggregate, has, or
        may
        reasonably be expected to have, a Material Adverse Effect; (ii) the Borrower
        and
        each Subsidiary have been issued and are in material compliance with all
        permits, certificates, approvals, orders, licenses and other authorizations
        relating to environmental matters necessary for their respective businesses;
        and
        (iii) there are no polychlorinated biphenyls (PCB’s) or asbestos-containing
        materials or surface impoundments in any of the facilities now (or, to the
        knowledge of the Borrower, previously) owned or leased by the Borrower or
        any
        Subsidiary, except for PCB’s, surface impoundments, and asbestos-containing
        materials of the type and in quantities that, to the knowledge of the borrower,
        do not currently require remediation, and if remediation of such materials
        or
        conditions is hereafter required for any reason, such remediation activities
        would not reasonably be expected to have a Material Adverse Effect; (iv)
        Hazardous Materials have not been generated, used, treated, recycled, stored
        or
        disposed of in any of the facilities or on any of the property now (or, to
        the
        knowledge of the Borrower, previously) owned or leased by the Borrower or
        any
        Subsidiary during the time of the Borrower’s or such Subsidiary’s ownership or
        leased by the Borrower or any Subsidiary during the time of the Borrower’s or
        such Subsidiary's ownership except in material compliance with all applicable
        Environmental Laws; and (v) all underground storage tanks located on the
        property now (or, to the knowledge of the Borrower, previously) owned or
        leased
        by the Borrower or any Subsidiary have been (and to the extent currently
        owned
        or leased are) operated in material compliance with all applicable Environmental
        Laws.

       

      No
        Agreements Prohibiting Pledge of Southern Union Panhandle Stock. Except
        for the
        applicable negative covenants of this Agreement, the Borrower is not a party
        to
        any contract or other agreement with any Person that directly or indirectly
        prohibits the Borrower from granting any Lien against the stock or other
        equity
        interests in Southern Union Panhandle (whether common, preferred or another
        class of equity ownership) at any time owned and held by the Borrower as
        security for any Debt of the Borrower or any of its
        Subsidiaries.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      No
        Agreements Prohibiting Pledge of CCE Holdings Equity. Except
        for the applicable negative covenants of this Agreement
        and the CCE Holdings LLC Agreement, neither the Borrower nor Southern Union
        Panhandle is a party to any contract or other agreement with any Person that
        directly or indirectly prohibits the Borrower or Southern Union Panhandle
        from
        granting any Lien against the equity interests in CCE Holdings (whether common,
        preferred or another class of equity ownership) at any time owned and held
        by
        the Borrower or any of its Subsidiaries as security for any Debt of the Borrower
        or any of its Subsidiaries.

       

      CONDITIONS

       

      The
        obligation of the Banks to make any Loans or issue any Facility Letters of
        Credit is subject to the following conditions:

      

      Representations
        True and No Defaults

       

      The
        representations and warranties contained in Section 7 shall be true and correct
        on and as of the particular Borrowing Date as though made on and as of such
        date;

       

      The
        Borrower shall not be in default in the due performance of any covenant on
        its
        part contained in this Agreement; and

       

      no
        Event of Default or Default shall have occurred and be
        continuing.

       

      Governmental
        Approvals. The
        Borrower shall have obtained all orders, approvals or consents of all public
        regulatory bodies required for the making and carrying out of this Agreement,
        the making of the borrowings pursuant hereto, the issuance of the Notes to
        evidence such borrowings, and the execution and delivery of the Security
        Documents.

       

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

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

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

       

      Payment
        of Fees and Expenses.
        The Borrower shall have paid (a) all expenses of the type described in Section
        13.3 through the date of such Loan or the issuance of such Facility Letter
        of
        Credit and (b) all closing, structuring and other invoiced fees owed as of
        the
        Closing Date to the Agent, any of the Banks and/or J. P. Morgan Securities
        Inc.
        by the Borrower under this Agreement or any other written agreement between
        the
        Borrower and the Agent, the applicable Bank(s) or J. P. Morgan Securities
        Inc.

       

      Loan
        Documents, Opinions and Other Instruments.
        As of the Closing Date, the Borrower shall have delivered to the Agent the
        following: (a) this Agreement, each of the Notes and all other Loan Documents
        required by the Agent and the Banks to be executed and delivered by the Borrower
        in connection with this Agreement; (b) a certificate from the Secretary of
        State
        of the State of Delaware as to the continued existence and good standing
        of the
        Borrower in the State of Delaware; (c) a certificate from Secretary of State
        of
        the State of Texas as to the continued qualification of the Borrower to do
        business in the State of Texas; (d) a current certificate from the Office
        of the
        Comptroller of the State of Texas as to the good standing of the Borrower
        in the
        State of Texas; (e) a Secretary’s Certificate executed by the duly elected
        Secretary or a duly elected Assistant Secretary of the Borrower, in a form
        acceptable to the Agent, whereby such Secretary or Assistant Secretary certifies
        that one or more corporate resolutions adopted by the Board of Directors
        of the
        Borrower remain in full force and effect authorizing the Borrower to secure
        Loans and Facility Letters of Credit in accordance with the terms of this
        Agreement; and (f) a legal opinion from in-house counsel for the Borrower,
        dated
        as of the Closing Date, addressed to the Agent and the Lenders and otherwise
        acceptable in all respects to the Agent in its discretion.

       

      Financial
        Condition.
        As of the Closing Date only, no material adverse change shall have occurred
        with
        respect to the business, assets, properties or condition (financial or
        otherwise) of the Borrower reflected in the quarterly financial statements
        of
        the 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Borrower
        dated June 30, 2005 (copies of such audited financial statements having been
        supplied to the Agent and each Bank)

       

      AFFIRMATIVE
        COVENANTS 

       

      The
        Borrower covenants and agrees that, so long as the Borrower may borrow hereunder
        and until payment in full of the Notes, and its other obligations under this
        Agreement and the other Loan Documents the Borrower will:

      

      Financial
        Statements and Information.
        Deliver to the Banks:

       

      as
        soon as available, and in any event within 120 days after the end of each
        fiscal
        year of the Borrower, a copy of the annual audit report of the Borrower and
        the
        Subsidiaries for such fiscal year containing a balance sheet, statements
        of
        income and stockholders equity and a cash flow statement, all in reasonable
        detail and certified by Price Waterhouse Coopers or another independent
        certified public accountant of recognized standing satisfactory to the Banks.
        The Borrower will obtain from such accountants and deliver to the Banks at
        the
        time said financial statements are delivered the written statement of the
        accountants that in making the examination necessary to said certification
        they
        have obtained no knowledge of any Event of Default or Default, or if such
        accountants shall have obtained knowledge of any such Event of Default or
        Default, they shall state the nature and period of existence thereof in such
        statement; provided that such
        accountants shall not be liable directly or indirectly to the Banks for failure
        to obtain knowledge of any such Event of Default or Default;
        and

       

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

       

      copies
        of all statements and reports sent to stockholders of the Borrower or filed
        with
        the Securities and Exchange Commission; and

       

      such
        additional financial or other information as the Banks may reasonably request
        including, without limitation, copies of such monthly, quarterly, and annual
        reports of gas purchases and sales 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      that
        the Borrower is required to deliver to or file with governmental bodies pursuant
        to tariffs and/or franchise agreements.

       

      All
        financial statements specified in clauses (a) and (b) above shall be furnished
        in consolidated and consolidating form for the Borrower and all Subsidiaries
        with comparative consolidated figures for the corresponding period in the
        preceding year. Together with each delivery of financial statements required
        by
        clauses (a) and (b) above, the Borrower will deliver to the Banks (i) such
        schedules, computations and other information as may be required to demonstrate
        that the Borrower is in compliance with its covenants in Section 10.1 or
        reflecting any noncompliance therewith as at the applicable date and (ii)
        an
        Officer’s Certificate stating that there exists no Event of Default or Default,
        or, if any such Event of Default or Default exists, stating the nature thereof,
        the period of existence thereof and what action the Borrower has taken or
        proposes to take with respect thereto. The Banks are authorized to deliver
        a
        copy of any financial statement delivered to it to any regulatory body having
        jurisdiction over them, and to disclose same to any prospective assignees
        or
        participant Lenders.

      

      Lease
        and Investment Schedules.
        Deliver to the Banks:

       

      from
        time to time and, in any event, with each delivery of annual financial
        statements under Section 9.1(a), a current, complete schedule (in the form
        of
Schedule 9.2) of all agreements to rent
        or lease any property (personal, real or mixed, but not including oil and
        gas
        leases) to which the Borrower or any Subsidiary is a party lessee and which,
        considered independently or collectively with other leases with the same
        lessor,
        involve an obligation by the Borrower or a Subsidiary to make payments of
        at
        least $1,000,000.00 in any year, showing the total amounts payable under
        each
        such agreement, the amounts and due dates of payments thereunder and containing
        a description of the rented or leased property, and all other information
        the
        Majority Banks may request; and

       

      with
        each delivery of annual financial statements under Section 9.1(a) a current
        complete schedule (in the form of Schedule
        9.2)
        listing all debt exceeding $1,000,000.00 in principal amount outstanding
        and
        equity owned or held by the Borrower or any Subsidiary containing all
        information required by, and in a form satisfactory to, the Banks, except
        for
        such debt or equity of Subsidiaries.

       

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

       

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

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      businesses
        and properties, and furnish to the Banks, together with each delivery of
        annual
        financial statements under Section 9.1(a), an Officer's Certificate containing
        full information as to the insurance carried.

       

      Maintenance
        of Property. Cause
        its Significant Property and the Significant Property of each Subsidiary
        to be
        maintained, preserved, protected and kept in good repair, working order and
        condition so that the business carried on in connection therewith may be
        conducted properly and efficiently, except for normal wear and
        tear.

       

      Inspection
        of Property and Records. Permit
        any officer, director or agent of the Agent or any Bank, on written notice
        and
        at such Banks expense, to visit and inspect during normal business hours
        any of
        the properties, corporate books and financial records of the Borrower and
        each
        Subsidiary and discuss their respective affairs and finances with their
        principal officers, all at such times as the Agent or any Bank may reasonably
        request.

       

      Existence,
        Laws, Obligations. Maintain,
        and cause each Subsidiary to maintain, its corporate existence and franchises,
        and any license agreements and tariffs that permit the recovery of a return
        that
        the Borrower considers to be fair (and as to licenses, franchises, and tariffs
        that are subject to regulatory determinations of recovery of returns, the
        Borrower has presented or is presenting favorable defense thereof); and to
        comply, and cause each Subsidiary to comply, with all statutes and governmental
        regulations noncompliance with which might have a Material Adverse Effect,
        and
        pay, and cause each Subsidiary to pay, all taxes, assessments, governmental
        charges, claims for labor, supplies, rent and other obligations which if
        unpaid
        might become a lien against the property of the Borrower or any Subsidiary
        except liabilities being contested in good faith. Notwithstanding the foregoing,
        the Borrower may dissolve those certain inactive and minimally capitalized
        Subsidiaries designated as such on Schedule
        7.1.

       

      Notice
        of
        Certain Matters. Notify
        the Agent Bank immediately upon acquiring knowledge of the occurrence of
        any of
        the following events: (a) the institution or threatened institution of any
        lawsuit or administrative proceeding affecting the Borrower or any Subsidiary
        that is not covered by insurance (less applicable deductible amounts)

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      and
        which, if determined adversely to the Borrower or such Subsidiary, could
        reasonably be expected to have a Material Adverse Effect; (b) the occurrence
        of
        any material adverse change, or of any event that in the good faith opinion
        of
        the Borrower is likely, to result in a material adverse change, in the assets,
        liabilities, financial condition, business or affairs of the Borrower or
        any
        Subsidiary; (c) the occurrence of any Event of Default or any Default; or
        (d) a
        change by Moody's Investors Service, Inc. or by Standard and Poor's Ratings
        Group in the rating of the Borrower’s Funded Debt.

       

      ERISA.
        At all times:

       

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

       

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

       

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

       

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

       

      to
        the extent required of Borrower under applicable law, maintain
        Pension Benefit Guaranty Corporation liability coverage insurance required
        under
        ERISA;

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

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

       

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

       

      Compliance
        with Environmental Laws.
        At all times:

       

      use
        and operate, and cause each Subsidiary to use and operate, all of their
        respective facilities and properties in material compliance with all
        Environmental Laws; keep, and cause each Subsidiary to keep, all necessary
        permits, approvals, orders, certificates, licenses and other authorizations
        relating to environmental matters in effect and remain in material compliance
        therewith; handle, and cause each Subsidiary to handle, all Hazardous Materials
        in material compliance with all applicable Environmental Laws; and dispose,
        and
        cause each Subsidiary to dispose, of all Hazardous Materials generated by
        the
        Borrower or any Subsidiary or at any property owned or leased by them at
        facilities or with carriers that maintain valid permits, approvals,
        certificates, licenses or other authorizations for such disposal under
        applicable Environmental Laws;

       

      promptly
        notify the Agent and provide copies upon receipt of all written claims,
        complaints, notices or inquiries relating to the condition of the facilities
        and
        properties of the Borrower and each Subsidiary under, or their respective
        compliance with, applicable Environmental Laws wherein the condition or the
        noncompliance that is the subject of such claim, complaint, notice, or inquiry
        involves, or could reasonably be expected to involve, liability of or
        expenditures by the Borrower and its Subsidiaries of $10,000,000.00 or more;
        and

       

      provide
        such information and certifications which the Banks may reasonably request
        from
        time to time to evidence compliance with this Section
        9.10.

       

      PGA
        Clauses. The
        Borrower will use its best efforts to maintain in force provisions in all
        of its
        tariffs and franchise agreements that permit the Borrower to recover from
        customers substantially all of the amount by which the cost of gas purchases
        exceeds the amount 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      currently
        billed to customers for the delivery of such gas (sometimes referred to as
        PGA
        clauses).

       

      NEGATIVE
        COVENANTS

       

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

      

      Capital
        Requirements.
        The Borrower will not:

       

      permit
        its Consolidated Net Worth at the end of any fiscal quarter to be less than
        the
        sum of (i) $1,267,663,000; (ii) 40% of Consolidated Net Income (if positive)
        for
        the period commencing on January 1, 2004 and ending on the date of
        determination, and treated as a single accounting period; (iii) the difference
        between (A) 100% of the net proceeds of any issuance of capital or preferred
        stock or any other Equity-Preferred Securities by the Borrower or any
        consolidated Subsidiary, including without limitation, the Additional Offering,
        received by the Borrower or such consolidated Subsidiary at any time after
        January 1, 2004; and (B) the aggregate amount of all redemption or repurchase
        payments hereafter made, if any, by the Borrower and any such consolidated
        Subsidiary in connection with the repurchase by the Borrower or any such
        consolidated Subsidiary of any of their respective capital or preferred stock;
        (iv) without duplication, the difference between (A) 100% of the net proceeds
        heretofore and hereafter received by the Borrower and any consolidated
        Subsidiary in respect of the issuance by the Borrower or such consolidated
        Subsidiary of the Structured Securities, and (B) the aggregate amount of
        all
        redemption payments hereafter made, if any, by the Borrower and any such
        consolidated Subsidiary in connection with the redemption of any of the
        Structured Securities; and (v) the minority interests in the Borrower’s
        Subsidiaries; or 

       

      permit
        the ratio of its Consolidated Total Indebtedness to its Consolidated Total
        Capitalization to be greater than 0.65 to 1.00 at the end of any fiscal quarter;
        or

       

      acquire,
        or permit any Subsidiary to acquire, any assets other than (i) investments
        permitted under Section 10.4, or (ii) Qualifying Assets;
        or

       

      permit
        the ratio of EBDIT to Cash Interest Expense for the four fiscal quarters
        most
        recently ended (considered as a single accounting period) at any time to
        be less
        than 2.00 to 1.00 at all times.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Mortgages,
        Liens, Etc. The
        Borrower will not, and will not permit any Subsidiary to, create or permit
        to
        exist any Lien (including the charge upon assets purchased under a conditional
        sales agreement, purchase money mortgage, security agreement or other title
        retention agreement) upon any of its respective assets, whether now owned
        or
        hereafter acquired, or assign or otherwise convey any right to receive income,
        except:

       

      Liens
        for taxes not yet due or that are being contested in good faith by appropriate
        proceedings;

       

      other
        Liens incidental to the conduct of its business or the ownership of its assets
        that were not incurred in connection with the borrowing of money or the
        obtaining of advances or credit, and that do not in the aggregate materially
        detract from the value of such assets or materially impair the use thereof
        in
        the operation of such business;

       

      Liens
        on assets of a Subsidiary to secure obligations of such Subsidiary to the
        Borrower or another Subsidiary; and

       

      (i)
        Liens on property existing at the time of acquisition thereof by the Borrower
        or
        any Subsidiary, including without limitation, (A) any property acquired by
        the
        Borrower in consummating and finalizing any of the Prior Acquisitions, (B)
        any
        Liens existing on any property of Panhandle Eastern or any of its Subsidiaries
        to secure existing Debt of Panhandle Eastern or any of its Subsidiaries as
        of
        the Closing Date and (C) any Liens against any property of Panhandle Eastern
        or
        any of its Subsidiaries to secure Panhandle Eastern Refinancing Debt
        (provided such Liens are limited to
        property of Panhandle Eastern or any of its Subsidiaries securing the Debt
        so
        extended, refinanced, renewed, replaced, defeased or refunded), or (ii) purchase
        money Liens placed on an item of real or personal property purchased by the
        Borrower or any Subsidiary to secure a portion of the purchase price of such
        property; provided that no such Lien
        may encumber or cover any other property of the Borrower or any
        Subsidiary.

       

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

       

      Debt
        evidenced by the Notes or the Facility Letter of Credit Obligations, or issued
        pursuant to the Additional Offering and any 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Equity-Preferred
        Securities (to the extent the same constitutes Debt) not in default, as well
        as
        (i) Debt of Panhandle Eastern and/or any of its Subsidiaries outstanding
        as of
        the Closing Date, (ii) any Panhandle Eastern Refinancing Debt, (iii) any
        working
        capital credit facility or facilities provided directly to Panhandle Eastern
        and/or any of Panhandle Eastern’s Subsidiaries by any party other than the
        Borrower, so long as the principal amount of all such outstanding working
        capital facilities, together with the outstanding principal amount of any
        working capital loans or advances by the Borrower to Panhandle Eastern and/or
        any of Panhandle Eastern’s Subsidiaries, does not exceed (A) $50,000,000 in the
        aggregate at any time that the ratio of Consolidated Total Indebtedness to
        Consolidated Total Capitalization for Panhandle Eastern and Panhandle Eastern’s
        Subsidiaries (excluding the Borrower and all other Subsidiaries of the Borrower
        for purposes of such calculation) is greater than 0.65 to 1.00 and (B)
        $75,000,000 in the aggregate at any time that the ratio of Consolidated Total
        Indebtedness to Consolidated Total Capitalization for Panhandle Eastern and
        Panhandle Eastern’s Subsidiaries (excluding the Borrower and all other
        Subsidiaries of the Borrower for purposes of such calculation) is less than
        or
        equal to 0.65 to 1.00, (iv) any loans or advances of proceeds of the Additional
        Offering by the Borrower (or Panhandle Eastern, if applicable) to CCE
        Acquisition for purposes of financing the Cross Country Acquisition and (v)
        any
        loans or advances by the Borrower to Panhandle Eastern and/or any of the
        Borrower’s other Subsidiaries permitted under Section 10.4(b);

       

      Debt
        of any Subsidiary to the Borrower or any other Subsidiary, except to the
        extent
        limited by the terms of Section 10.4(b), and Debt of the Borrower to any
        Subsidiary; 

       

      Debt
        existing as of June 30, 2005 as reflected on financial statements delivered
        under Section 7.2(b) and refinancings thereof other than Debt that has been
        refinanced by the proceeds of Loans;

       

      endorsements
        in the ordinary course of business of negotiable instruments in the course
        of
        collection;

       

      Debt
        of the Borrower or any Subsidiary representing the portion of the purchase
        price
        of property acquired by the Borrower or such Subsidiary that is secured by
        Liens
        permitted by the provisions of Section 10.2(d); provided,
        however,
        that at no time may the aggregate principal amount of such Debt outstanding
        exceed thirty percent (30%) of the Consolidated Net Worth of the Borrower
        and
        its Subsidiaries as of the applicable determination date;

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Debt
        evidenced by Senior Notes; 

       

      additional
        Debt of the Borrower and Structured Securities of the Borrower and the Southern
        Union Trusts, provided that after
        giving effect to the issuance thereof, there shall exist no Default or Event
        of
        Default; and: (i) the ratio of Consolidated Total Indebtedness to Consolidated
        Total Capitalization shall be no greater than 0.65 to 1.00 at all times;
        (ii)
        the ratio of EBDIT for the four fiscal quarters most recently ended to pro
        forma
        Cash Interest Expense for the following four fiscal quarters shall be no
        less
        than 2.00 to 1.0 at all times;
provided,
however,
        that if the additional Debt
        for which the determinations required to be made by this subparagraph (g)
        will
        be used to finance in whole or in part the consideration to be paid by the
        Borrower for the acquisition of any entity otherwise permitted under the
        terms
        of this Agreement, the determination of EBDIT for purposes of this ratio
        shall
        include not only the EBDIT of the Borrower and its Subsidiaries for the four
        fiscal quarters most recently ended, but shall also include the EBDIT of
        such
        entity to be acquired for such four fiscal quarters most recently ended;
        and
        (iii) (A) such Debt and Structured Securities shall have a final maturity
        or
        mandatory redemption date, as the case may be, no earlier than the Maturity
        Date
        and shall mature or be subject to mandatory redemption or mandatory defeasance
        no earlier than the Maturity Date (as so extended) and shall be subject to
        no
        mandatory redemption or “put” to the Borrower or any Southern Union Trust
        exercisable, or sinking fund or other similar mandatory principal payment
        provisions that require payments to be made toward principal, prior to such
        Maturity Date (as so extended); or (B) (x) such additional Debt shall have
        a
        final maturity date prior to the Maturity Date, (y) such additional Debt
        shall
        not exceed Two Hundred Fifty Million Dollars ($250,000,000.00) in the aggregate
        plus Twenty Million Dollars ($20,000,000.00) of reimbursement obligations
        incurred in connection with Non-Facility Letters of Credit issued by a Bank
        or
        Banks or by any other financial institution, and (z) such additional Debt
        shall
        be borrowed from a Bank or Banks as a loan or loans arising independent of
        this
        Agreement or shall be borrowed from a financial institution that is not a
        Bank
        under this Agreement; and

       

      additional
        Debt of Trunkline LNG Holdings or any of its Subsidiaries, so long as (i)
        such
        Debt is to Trunkline LNG Holdings and/or any of its Subsidiaries only and
        is not
        recourse in any respect to the Borrower or any other Subsidiary of the Borrower
        (other than Panhandle Eastern and its Subsidiaries), (ii) the proceeds of
        such

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Debt
        is used solely to finance capital expenditures of Trunkline LNG Holdings
        and/or
        its Subsidiaries, and (iii) after giving effect to such Debt, no Default
        or
        Event of Default shall exist.

       

      Loans,
        Advances and Investments.
        The Borrower will not, and will not permit any Subsidiary to, make or have
        outstanding any loan or advance to, or own or acquire any stock or securities
        of
        or equity interest or other Investment in, any Person, except (without
        duplication):

       

      stock
        or other equity interests of (i) the Subsidiaries named in Section 7.1; (ii)
        other entities that are acquired by the Borrower or any Subsidiary but that
        are
        promptly merged with and into the Borrower; (iii) Southern Union Panhandle,
        Panhandle Eastern and any Subsidiaries of Panhandle Eastern acquired as a
        result
        of the Panhandle Eastern Acquisition; (iv) CCE Holdings; and (v) the same
        Qualifying Entities as the Qualifying Entities under subparagraph (ii) of
        the
        definition of "Qualifying Assets,”provided that at any one time the
        aggregate purchase price paid for such stock and other equity interests in
        such
        Qualifying Entities then held by the Borrower as of the determination date,
        including the aggregate amount of Debt assumed or deemed incurred by the
        Borrower in connection with the purchase of such stock and other equity
        interests, is not more than twenty percent (20%) of the Consolidated Net
        Worth
        of the Borrower and its Subsidiaries as of the applicable determination date;
        

       

      loans
        or advances to a Subsidiary, as well as advances of proceeds of the Additional
        Offering by the Borrower or Panhandle Eastern to CCE Acquisition for purposes
        of
        facilitating the consummation of the Cross Country Acquisition;
provided,
        however,
        that the principal amount of such loans and advances for working capital
        purposes at any time outstanding to Panhandle Eastern and/or any of Panhandle
        Eastern’s Subsidiaries, together with the principal amount of any outstanding
        working capital credit facility or facilities provided directly to Panhandle
        Eastern and/or any of Panhandle Eastern’s Subsidiaries by any party other than
        the Borrower, does not exceed $25,000,000 in the aggregate at any
        time;

       

      Securities
        maturing no more than 180 days after Borrower’s purchase that are
        either:

       

      readily
        marketable securities issued by the United States or its agencies or
        instrumentalities; or

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      commercial
        paper rated "Prime 2” by Moody’s Investors Service, Inc. ("Moody’s”) or A-2 by
        Standard and Poor’s Ratings Group ("S&P”); or

       

      certificates
        of deposit or repurchase contracts on customary terms with financial
        institutions in which deposits are insured by any agency or instrumentality
        of
        the United States; or

       

      readily
        marketable securities received in settlement of liabilities created in the
        ordinary course of business; or

       

      obligations
        of states, agencies, counties, cities and other political subdivisions of
        any
        state rated at lest MIG2, VMIG2 or Aa by Moody’s or AA by S&P;
        or

       

      loan
        participations in credits in which the borrower’s debt is rated at least Aa or
        Prime 2 by Moody’s or AA or A-2 by S&P; or

       

      money
        market mutual funds that are regulated by the Securities and Exchange
        Commission, have a dollar-weighted average stated maturity of 90 days or
        fewer
        on their investments and include in their investment objectives the maintenance
        of a stable net asset value of $1 for each share.

       

      other
        equity interests owned by a Subsidiary on the date of this Agreement and
        such
        additional equity interests to the extent (but only to the extent) that such
        Subsidiary is legally obligated to acquire those interests on the date of
        this
        Agreement, in each case as disclosed to the Banks in
        writing;

       

      loans
        or advances by the Borrower to customers in connection with and pursuant
        to
        marketing and merchandising products that the Borrower reasonably expects
        to
        increase sales of the Borrower or Subsidiaries,
provided that: (i) such loans must be
        either less than $2,000,000.00 to any one customer (or group of affiliated
        customers, shown on the Borrower’s records to be Affiliates) or must be
        disclosed on Schedule 9.2 hereof; and
        (ii) all such loans must not exceed $24,000,000.00 in the aggregate outstanding
        at any time;

       

      travel
        and expense advances in the ordinary course of business to officers and
        employees;

       

      stock
        or securities of or equity interests in, any Person provided that, after
        giving
        effect to the acquisition and ownership 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      thereof,
        the Borrower is in compliance with the provisions of Section 10.1(c) of this
        Agreement; 

       

      loans
        or advances to any member of the CCE Group by the Borrower or any Subsidiary
        not
        otherwise permitted under the other provisions of this Section 10.4, so long
        as
        the sum of such loans and advances does not exceed $25,000,000 in the aggregate
        at any time; and

       

      loans,
        advances or other Investments by the Borrower or any Subsidiary not otherwise
        permitted under the other provisions of this Section 10.4, so long as the
        sum of
        the outstanding balance of all of such loans and advances and the purchase
        price
        paid for all of such other Investments does not exceed in the aggregate seven
        percent (7%) of the Consolidated Net Worth of the Borrower and its Subsidiaries
        as of the applicable determination date.

       

      Stock
        and Debt of Subsidiaries. The
        Borrower will not, and will not permit any Subsidiary to, sell or otherwise
        dispose of any shares of stock, other equity interests or Debt of any
        Subsidiary, or permit any Subsidiary to issue or dispose of its stock (other
        than directors' qualifying shares), except for the following: (i) the sale,
        transfer or issuance of stock, other equity interests or Debt of any Subsidiary
        to the Borrower or another Subsidiary of the Borrower; (ii) the sale of stock
        in
        Sea Robin Pipeline Company and Debt of Sea Robin Pipeline Company, (iii)
        the
        issuance by Southern Union Trusts of preferred beneficial interests in public
        offerings of Borrower’s Structured Securities, and (iv) the issuance by other
        Subsidiaries of the Borrower formed for the purpose of issuing Equity-Preferred
        Securities.

       

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

       

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

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

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

       

      the
        Borrower may acquire the assets of any Person,
provided that, after giving effect to
        such acquisition, the Borrower is in compliance with the provisions of Sections
        10.1(c); and

       

      the
        Borrower or any Subsidiary may sell, lease, assign or otherwise dispose of
        assets as otherwise permitted under Section 10.8.

       

      Supply
        and Purchase Contracts. The
        Borrower will not, and will not permit any Subsidiary to, enter into or be
        a
        party to any contract for the purchase of materials, supplies or other property
        if such contract requires that payment for such materials, supplies or other
        property shall be made regardless of whether or not delivery is ever made
        or
        tendered of such materials, supplies and other property, except in those
        circumstances and involving those supply or purchase contracts that the Borrower
        reasonably considers to be necessary or helpful in its operations in the
        ordinary course of business and that the Borrower reasonably considers not
        to be
        unnecessarily burdensome on the Borrower or its
        Subsidiaries.

       

      Sale
        or
        Other Disposition of Assets. The
        Borrower will not, and will not permit any Subsidiary to, except as permitted
        under this Section 10.8, sell, assign, lease, or otherwise dispose of (whether
        in one transaction or in a series of transactions) all or any part of its
        Property (whether now owned or hereafter acquired); provided,
        however,
        that (i) the Borrower or any Subsidiary may in the ordinary course of business
        dispose of (a) Property consisting of Inventory; and (b) Property con-sist-ing
        of goods or equipment that are, in the opinion of the Borrower or any
        Subsidiary, obsolete or unproductive, but if in the good faith judgment of
        the
        Borrower or any Subsidiary such disposition with-out replacement thereof
        would
        have a Material Adverse Effect, such goods and equipment shall be replaced,
        or
        their utility and function substituted, by new or existing goods or equipment;
        (ii) the Borrower may transfer or dispose of any of its Significant
        Property (in any transaction or series of transactions) to any Subsidiary
        or
        Subsidiaries only if such Property so transferred or disposed of after the
        Closing Date has an aggregate value (determined after depreciation and in
        accordance with GAAP) of not 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      more
        than ten percent (10%) of the aggregate value of all of the Borrower’s and its
        Subsidiaries’ real property and tangible personal property other than Inventory
        considered on a consolidated basis and determined after depreciation and
        in
        accordance with GAAP, as of June 30, 2005; (iii) the Borrower may dispose
        of its
        real property in one or more sale/leaseback transactions, provided that any
        Debt
        incurred in connection with such transaction does not create a Default as
        defined herein; (iv) a Southern Union Trust may distribute the Borrower’s
        subordinated debt securities constituting a portion of the Structured
        Securities, on the terms and under the conditions set out in the registration
        state-ment therefor filed with the Securities and Exchange Commission on
        March
        25, 1995 or any similar registration statement filed with the Securities
        and
        Exchange Commission in connection with any other Structured Securities issued
        in
        connection with the Prior Acquisitions; (v) the Borrower or any Subsidiary
        may dispose of real property or tangible personal property other than Inven-tory
        (in consideration of such amount as in the good faith judgment of the Borrower
        or such Subsidiary represents a fair consideration therefor), provided that
        the
        aggregate value of such property disposed of (determined after depreciation
        and
        in accordance with GAAP) after the Closing Date does not exceed ten percent
        (10%) of the aggregate value of all of the Borrower’s and its Subsidiaries’ real
        property and tangible personal property other than Inventory considered on
        a
        consolidated basis and deter-mined after depreciation and in accordance with
        GAAP, as of June 30, 2005; (vi) the Borrower may dispose of Qualifying
        Assets of the type described in clause (ii) of the definition of Qualifying
        Assets, provided that the Borrower applies the net proceeds from such
        disposition against the Loans in an amount equal to the amount of Loan proceeds
        previously advanced to finance the acquisition of such clause (ii) Qualifying
        Assets; (vii) the Borrower may dispose of other Investments of the
        type
        acquired under the terms of Section 10.4(h), provided that the Borrower applies
        the net proceeds from such disposition against the Loans in an amount equal
        to
        the amount of Loan proceeds previously advanced to finance the acquisition
        of
        such other Investments; and (viii) the Borrower may sell all stock or all
        or
        substantially all of the assets in Sea Robin Pipeline
        Company.

       

      Discount
        or Sale of Receivables. The
        Borrower will not, and will not permit any Subsidiary, other than Southern
        Union
        Total Energy 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Services,
        Inc., to discount or sell with recourse, or sell for less than the face value
        thereof (including any accrued interest) any of its notes receivable,
        receivables under leases or other accounts
        receivable.

       

      Change
        in
        Accounting Method.
        The Borrower will not, and will not permit any Subsidiary to, make any change
        in
        the method of computing depreciation for either tax or book purposes or any
        other material change in accounting method representing any departure from
        GAAP
        without the Majority Banks' prior written approval.

       

      Restricted
        Payment. The
        Borrower will not pay or declare any -Restricted Payment unless immediately
        prior to such payment and
        after giving effect to such payment, the Borrower could incur at least $1
        of
        additional Debt without violating the provisions of Section 10.3(g)
        and
        after giving effect thereto no Default or Event of Default -exists hereunder;
        provided,
        however,
        that the Borrower’s ability to purchase or agree to purchase its common stock
        and/or preferred equity securities (including without limitation,
        Equity-Preferred Securities) shall be limited as follows: (a) not more than
        $50,000,000 in the aggregate of common stock and preferred equity securities
        may
        be repurchased per each fiscal year of the Borrower at any time the ratio
        of
        Consolidated Total Indebtedness to Consolidated Total Capitalization for
        the
        Borrower and its Subsidiaries is greater than 0.60 to 1.00; (b) not more
        than
        $100,000,000 in the aggregate of common stock and preferred equity securities
        may be repurchased per each fiscal year of the Borrower at any time the ratio
        of
        Consolidated Total Indebtedness to Consolidated Total Capitalization for
        the
        Borrower and its Subsidiaries is less than or equal to 0.60 to 1.00; and
        (c) no
        repurchases of common stock or preferred equity securities may be made if
        the
        Borrower’s unsecured, non-credit enhanced senior debt as specified by Standard
& Poor’s Ratings Group and Moody’s Investor Service, Inc. falls below either
        BBB- or Baa3, respectively.

       

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

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Nature
        of Business; Management. The
        Borrower will not, and will not permit any Subsidiary to: (a) change its
        principal line of business; or (b) enter into any business not within the
        scope
        of Section 7.15 and the definition of Qualifying Assets; or (c) permit any
        material overall change in the management of the Borrower.

       

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

       

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

       

      Limitations
        on Payments on Subordinated Debt. The
        Borrower will not, and will not permit any Subsidiary to, make any payment
        in
        respect of interest on, principal of, or other-wise relating to, the borrower’s
        subordinated debt securities issued in connection with the Structured Securities
        if, after giving effect to such payment, a Default or Event of Default would
        exist.

       

      No
        Agreements Prohibiting Pledge of Southern Union Panhandle Stock. The
        Borrower will not enter into any contract or other agreement with any Person
        that directly or indirectly prohibits the Borrower from granting any Lien
        against the stock or other equity 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      interests
        in Southern Union Panhandle (whether common, preferred or another class of
        equity ownership) at any time owned and held by the Borrower as security
        for any
        Debt of the Borrower or any of its Subsidiaries, other than the applicable
        negative covenants of this Agreement.

       

      No
        Agreements Prohibiting Pledge of CCE Holdings Equity. Neither
        the Borrower nor Southern Union Panhandle nor CCE Acquisition will enter
        into
        any contract or other agreement with any Person that directly or indirectly
        prohibits the Borrower or Southern Union Panhandle or CCE Acquisition from
        granting any Lien against the equity interests in CCE Holdings (whether common,
        preferred or another class of equity ownership) at any time owned and held
        by
        the Borrower or any of its Subsidiaries as security for any Debt of the Borrower
        or any of its Subsidiaries, other than the applicable negative covenants
        of this
        Agreement and the CCE Holdings LLC Agreement.

       

      EVENTS
        OF DEFAULT; REMEDIES

       

      If
        any of
        the following events shall occur, then the Agent shall at the request, or
        may
        with the consent, of the holders of more than fifty percent (50%) in principal
        amount of the Notes then outstanding or, if no Note is then outstanding,
        Banks
        having more than fifty percent (50%) of the Commitments, (a) by notice to
        the
        Borrower, declare the Commit-ment of each Bank and the several obligation
        of
        each Bank to make Loans hereunder to be termi-nated, whereupon the same shall
        forthwith terminate, and (b) declare the Notes and all interest accrued and
        unpaid thereon, and all other amounts payable under the Notes, this agreement
        and the other Loan Documents, to be forthwith due and payable, whereupon
        the
        Notes, all such interest and all such other amounts, shall become and be
        forthwith due and payable without presentment, demand, protest, or further
        notice of any kind (including, without limitation, notice of default, notice
        of
        intent to accelerate and notice of acceleration), all of which are hereby
        expressly waived by the Borrower; provided,
        however,
        that
        with respect to any Event of Default described in Sections 11.7 or 11.8 here-of,
        (i) the Commitment of each Bank and the obligation of the Banks to make Loans
        shall automati-cally be terminated and (ii) the entire unpaid principal amount
        of the Notes, all interest accrued and unpaid thereon, and all such other
        amounts payable under the Notes, this Agreement and the other Loan Documents,
        shall automatically become immediately due and payable, without presentment
        demand, protest, or any notice of any kind (including, without limitation,
        notice of default, notice of intent to accelerate and notice of acceleration),
        all of which are hereby expressly waived by the Borrower:

       

      Failure
        to Pay Principal or Interest.
        The Borrower does not pay, repay or prepay any principal of or interest on
        any
        Note when due.

       

      Failure
        to Pay Commitment Fee or Other Amounts.
        The Borrower does not pay any commitment fee or any other obligation or amount
        payable under this Agreement, the Notes, or any Letter of Credit Reimbursement
        Agreement within five (5) calendar days after the same shall have become
        due.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Failure
        to Pay Other Debt.
        The Borrower or any Subsidiary fails to pay principal or interest on any
        other
        Debt aggregating more than $3,000,000.00 when due and any related grace period
        has expired, or the holder of any of such other Debt declares such Debt due
        prior to its stated maturity because of the Borrower's or any Subsidiary's
        default thereunder and the expiration of any related grace
        period.

       

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

       

      Violation
        of Negative Covenants. The
        Borrower violates any covenant, agreement or condition contained in Sections
        10.2, 10.3, 10.5, 10.6, 10.8, 10.9, 10.10, 10.11, or
        10.15.

       

      Violation
        of Other Covenants, Etc. The
        Borrower violates any other covenant, agreement or condition contained herein
        (other than the covenants, agreements and conditions set forth or described
        in
        Sections 11.1, 11.2, 11.3, 11.4, and 11.5 above) or in any other Loan Document
        and such violation shall not have been remedied within (30) days after the
        earlier of (i) actual discovery by the Borrower of such violation or (ii)
        written notice has been received by the Borrower from the Bank or the holder
        of
        the Note.

       

      Bankruptcy
        and Other Matters.
        The Borrower or any Subsidiary (a) makes an assignment for the benefit of
        creditors; or (b) admits in writing its inability to pay its debts generally
        as
        they become due; or (c) generally fails to pay its debts as they become due;
        or
        (d) files a petition or answer seeking for itself, or consenting to or
        acquiescing in, any reorganization, arrangement, composition, readjustment,
        liquidation, dissolution, or similar relief under any applicable Debtor Law
        (including, without limitation, the Federal Bankruptcy Code); or (i) there
        is
        appointed a receiver, custodian, liquidator, fiscal agent, or trustee of
        the
        Borrower or any Subsidiary or of the whole or any substantial part of their
        respective assets; or (ii) any court enters an order, judgment or decree
        approving a petition filed against the Borrower or any Subsidiary seeking
        reorganization, arrangement, composition, readjustment, liquidation,
        dissolution, or similar relief under any Debtor Law and either such order,
        decree or judgment so 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      filed
        against it is not dismissed or stayed (unless and until such stay is no longer
        in effect) within thirty (30) days of entry thereof or an order for relief
        is
        entered pursuant to any such law.

       

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

       

      Undischarged
        Judgment.
        Final Judgment or judgments in the aggregate, that might be or give rise
        to
        Liens on any property of the Borrower or any Subsidiary, for the payment
        of
        money in excess of $5,000,000.00 shall be rendered against the Borrower or
        any
        Subsidiary and the same shall remain undischarged for a period of thirty
        (30)
        days during which execution shall not be effectively
        stayed.

       

      Environmental
        Matters. The
        occurrence of any of the following events that could result in liability
        to the
        Borrower or any Subsidiary under any Environmental Law or the creation of
        a Lien
        on any property of the Borrower or any Subsidiary in favor of any governmental
        authority or any other Person for any liability under any Environmental Law
        or
        for damages arising from costs incurred by such Person in response to a Release
        or threatened Release of Hazardous Materials into the environment if any
        such
        asserted liability or Lien exceeds $10,000,000.00 and if any such lien would
        cover any property of the Borrower or any Subsidiary which property is or
        would
        reasonably be considered to be integral to the operations of the Borrower
        or any
        Subsidiary in the ordinary course of business:

       

      the
        Release of Hazardous Materials at, upon, under or within the property owned
        or
        leased by the Borrower or any Subsidiary or any contiguous
        property;

       

      the
        receipt by the Borrower or any Subsidiary of any summons, claim, complaint,
        judgment, order or similar notice that it is not in compliance with or that
        any
        governmental authority is investigating its compliance with any Environmental
        Law;

       

      the
        receipt by the Borrower or any Subsidiary of any notice or claim to the effect
        that it is or may be liable for the Release or threatened Release of Hazardous
        Materials into the environment; or

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      any
        governmental authority incurs costs or expenses in response to the Release
        of
        any Hazardous Material which affects in any way the properties of the Borrower
        or any Subsidiary.

       

      Other
        Remedies.
        In addition to and cumulative of any rights or remedies expressly provided
        for
        in this Section 11, if any one or more Events of Default shall have occurred,
        the Agent shall at the request, and may with the consent, of the Majority
        Banks
        proceed to protect and enforce the rights of the Banks hereunder by any
        appropriate proceedings. The Agent shall at the request, and may with the
        consent, of the Majority Banks also proceed either by the specific performance
        of any covenant or agreement contained in this Agreement or by enforcing
        the
        payment of the Notes or by enforcing any other legal or equitable right provided
        under this Agreement or the Notes or otherwise existing under any law in
        favor
        of the holder of the Notes.

       

      Remedies
        Cumulative. No
        remedy, right or power conferred upon the Banks is intended to be exclusive
        of
        any other remedy, right or power given hereunder or now or hereafter existing
        at
        law, in equity, or otherwise, and all such remedies, rights and powers shall
        be
        cumulative.

       

      

      

      THE
        AGENT

       

      Authorization
        and Action.
        Each Bank hereby appoints JPMorgan as its Agent under and irrevocably authorizes
        the Agent (subject to Sections 12.1 and 12.7) to take such action as the
        Agent
        on its behalf and to exercise such powers under this Agreement and the Notes
        as
        are delegated to the Agent by the terms thereof, together with such powers
        as
        are reasonably incidental thereto. Without limitation of the foregoing, each
        Bank expressly authorizes the Agent to execute, deliver, and perform its
        obligations under this Agreement, and to exercise all rights, powers, and
        remedies that the Agent may have hereunder. As to any matters not expressly
        provided for by this Agreement (including, without limitation, enforcement
        or
        collection of the Notes), the Agent shall not be required to exercise any
        discretion or take any action, but shall be required to act, or to refrain
        from
        acting (and shall be fully protected in so acting or refraining from acting),
        upon the instructions of the Majority Banks, and such 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      instructions
        shall be binding upon all the Banks and all holders of any Note;
provided,
however,
        that the Agent shall not be
        required to take any action which exposes the Agent to personal liability
        or
        which is contrary to this Agreement or applicable law. The Agent agrees to
        give
        to each Bank prompt notice of each notice given to it by the Borrower pursuant
        to the terms of this Agreement.

       

      Agent's
        Reliance, Etc.
        Neither the Agent nor any of its directors, officers, agents, or employees
        shall
        be liable to any Bank for any action taken or omitted to be taken by it or
        them
        under or in connection with this Agreement, the Notes and the other Loan
        Documents, except for its or their own gross negligence or willful misconduct.
        Without limitation of the generality of the foregoing, the Agent: (a) may
        treat
        the original or any successor holder of any Note as the holder thereof until
        the
        Agent receives notice from the Bank which is the payee of such Note concerning
        the assignment of such Note; (b) may employ and consult with legal counsel
        (including counsel for the Borrower), independent public accountants, and
        other
        experts selected by it and shall not be liable to any Bank for any action
        taken,
        or omitted to be taken, in good faith by it or them in accordance with the
        advice of such counsel, accountants, or experts received in such consultations
        and shall not be liable for any negligence or misconduct of any such counsel,
        accountants, or other experts; (c) makes no warranty or representation to
        any
        Bank and shall not be responsible to any Bank for any opinions, certifications,
        statements, warranties, or representations made in or in connection with
        this
        Agreement; (d) shall not have any duty to any Bank to ascertain or to inquire
        as
        to the performance or observance of any of the terms, covenants, or conditions
        of this Agreement or any other instrument or document furnished pursuant
        thereto
        or to satisfy itself that all conditions to and requirements for any Loan
        have
        been met or that the Borrower is entitled to any Loan or to inspect the property
        (including the books and records) of the Borrower or any Subsidiary; (e)
        shall
        not be responsible to any Bank for the due execution, legality, validity,
        enforceability, genuineness, sufficiency, or value of this Agreement or any
        other instrument or document furnished pursuant thereto; and (f) shall incur
        no
        liability under or in respect of this Agreement by acing upon any notice,
        consent, certificate, or other instrument or writing (which may be by telegram,
        cable, telex, or 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      otherwise)
        believed by it to be genuine and signed or sent by the
proper party or
        parties.

       

      Defaults.
        The Agent shall not be deemed to have knowledge of the occurrence of a Default
        (other than the nonpayment of principal of or interest hereunder or of any
        fees)
        unless the Agent has received notice from a Bank or the Borrower specifying
        such
        Default and stating that such notice is a Notice of Default. In the event
        that
        the Agent receives such a notice of the occurrence of a Default, the Agent
        shall
        give prompt notice thereof to the Banks (and shall give each Bank prompt
        notice
        of each such nonpayment). The Agent shall (subject to Section 12.7) take
        such
        action with respect to such Default; provided that,
        unless and until the Agent shall have received the directions referred to
        in
        Sections 12.1 or 12.7, the Agent may (but shall not be obligated to) take
        such
        action, or refrain from taking such action, with respect to such Default
        as it
        shall deem advisable and in the best interest of the
        Banks.

       

      JPMorgan
        and Affiliates. With
        respect to its Commitment, any Loan made by it, and the Note issued to it,
        JPMorgan shall have the same rights and powers under this Agreement as any
        other
        Bank and may exercise the same as though it were not the Agent; and the term
        "Bank" or "Banks" shall, unless otherwise expressly indicated, include JPMorgan
        in its individual capacity. JPMorgan and its respective Affiliates may accept
        deposits from, lend money to, act as trustee under indentures of, and generally
        engage in any kind of business with, the Borrower, any of its respective
        Affiliates and any Person who may do business with or own securities of the
        Borrower or any such Affiliate, all as if JPMorgan were not the Agent and
        without any duty to account therefor to the Banks.

       

      Non-Reliance
        on Agent and Other Banks.
        Each Bank agrees that it has, independently and without reliance on the Agent
        or
        any other Bank, and based on such documents and information as it has deemed
        appropriate, made its own credit analysis of the Borrower and each Subsidiary
        and its decision to enter into the transactions contemplated by this Agreement
        and that it will, independently and without reliance upon the Agent or any
        other
        Bank, and based on such documents and information as it shall deem appropriate
        at the time, continue to make its own analysis and decisions in taking or
        not
        taking action under this Agreement. The Agent shall not be required

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      to
        keep itself informed as to the performance or observance by the Borrower
        of this
        Agreement or to inspect the properties or books of the Borrower or any
        Subsidiary. Except for notices, reports, and other documents and information
        expressly required to be furnished to the Banks by the Agent hereunder, the
        Agent shall not have any duty or responsibility to provide any Bank with
        any
        credit or other information concerning the affairs, financial condition,
        or
        business of the Borrower or any Subsidiary (or any of their Affiliates) which
        may come into the possession of the Agent or any of its
        Affiliates.

       

      Indemnification.
        Notwithstanding anything to the contrary herein contained, the Agent shall
        be
        fully justified in failing or refusing to take any action hereunder unless
        it
        shall first be indemnified to its satisfaction by the Banks against any and
        all
        liabilities, obligations, losses, damages, penalties, actions, judgments,
        suits,
        costs, expenses, and disbursements of any kind or nature whatsoever which
        may be
        imposed on, incurred by or asserted against the Agent in any way relating
        to or
        arising out of its taking or continuing to take any action. Each Bank agrees
        to
        indemnify the Agent (to the extent not reimbursed by the Borrower), according
        to
        such Bank's Commitment, from and against any and all liabilities, obligations,
        losses, damages, penalties, actions, judgments, suits, costs, expenses, and
        disbursements of any kind or nature whatsoever which may be imposed on, incurred
        by, or asserted against the Agent in any way relating to or arising out of
        this
        Agreement or the Notes or any action taken or omitted by the Agent under
        this
        Agreement or the Notes; provided that
        no Bank
        shall be liable for any portion of such liabilities, obligations, losses,
        damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
        resulting from the gross negligence or willful misconduct of the person being
        indemnified; and provided further
        that it
        is the intention of each Bank to indemnify the Agent against the consequences
        of
        the Agent's own negligence, whether such negligence be sole, joint, concurrent,
        active or passive. Without limitation of the foregoing, each Bank agrees
        to
        reimburse the Agent promptly upon demand for its Pro Rata Percentage of any
        out-of-pocket expenses (including attorneys' fees) incurred by the Agent
        in
        connection with the preparation, administration, or enforcement of, or legal
        advice in respect of rights or responsibilities under, this Agreement and
        the
        Notes, to the extent that the Agent is not reimbursed for such expenses by
        the
        Borrower.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Successor
        Agent. The
        Agent may resign at any time as Agent under this Agreement by giving written
        notice thereof to the Banks and the Borrower and may be removed at any time
        with
        or without cause by the Majority Banks. Upon any such resignation or removal,
        the Majority Banks shall have the right to appoint a successor Agent. If
        no
        successor Agent shall have been so appointed by the Majority Banks or shall
        have
        accepted such appointment within thirty (30) days after the retiring Agent's
        giving of notice of resignation or the Majority Banks' removal of the retiring
        Agent, then the retiring Agent may, on behalf of the Banks, appoint a successor
        Agent, which shall be a commercial bank organized under the laws of the United
        States of America or of any State thereof and having a combined capital and
        surplus of at least $500,000,000.00. Upon the acceptance of any appointment
        as
        Agent hereunder by a successor Agent, such successor Agent shall thereupon
        succeed to and become vested with all the rights, powers, privileges and
        duties
        of the retiring Agent, and the retiring Agent shall be discharged from its
        duties and obligations under this Agreement. After any retiring Agent's
        resignation or removal hereunder as Agent, the provisions of this
        Section 12 shall inure to its benefit as to any actions taken or omitted
        to
        be taken by it while it was Agent under this Agreement.

       

      Agent's
        Reliance.
        The Borrower shall notify the Agent in writing of the names of its officers
        and
        employees authorized to request a Loan on behalf of the Borrower and shall
        provide the Agent with a specimen signature of each such officer or employee.
        The Agent shall be entitled to rely conclusively on such officer’s or employee's
        authority to request a Loan on behalf of the Borrower until the Agent receives
        written notice from the Borrower to the contrary. The Agent shall have no
        duty
        to verify the authenticity of the signature appearing on any Notice of
        Borrowing, and, with respect to any oral request for a Loan, the Agent shall
        have no duty to verify the identity of any Person representing himself as
        one of
        the officers or employees authorized to make such request on behalf of the
        Borrower. Neither the Agent nor any Bank shall incur any liability to the
        Borrower in acting upon any telephonic notice referred to above which the
        Agent
        or such Bank believes in good faith to have been given by a duly authorized
        officer or other Person authorized to borrow on behalf of the Borrower or
        for
        otherwise acting in good faith.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      MISCELLANEOUS

       

      Representation
        by the Banks. Each
        Bank represents that it is the intention of such Bank, as of the date of
        its
        acquisition of its Note, to acquire the Note for its account or for the account
        of its Affiliates, and not with a view to the distribution or sale thereof,
        and,
        subject to any applicable laws, the disposition of such Bank's property shall
        at
        all times be within its control. The Notes have not been registered under
        the
        Securities Act of 1933, as amended (the "Securities Act"), and may not be
        transferred, sold or otherwise -disposed of except
        (a) in a registered Offering under the Securities Act; (b) pursuant to an
        exemption from the registration provisions of the Securities Act; or (c)
        if the
        Securities Act shall not apply to the Notes or the transactions contemplated
        hereunder as commercial lending transactions.

       

      Amendments,
        Waivers, Etc.
        No amendment or waiver of any provision of any Loan Document, nor consent
        to any
        departure by the Borrower therefrom, shall in any event be effective unless
        the
        same shall be in writing and signed by the Borrower and the Majority Banks,
        and
        then such waiver or consent shall be effective only in the specific instance
        and
        for the specific purpose for which given; provided,
        however,
        that no amendment, waiver, or consent shall, unless in writing and signed
        by
        each Bank, do any of the following: (a) waive any of the conditions specified
        in
        Section 8; (b) increase the Commitment of any Bank or alter the term thereof,
        or
        subject any Bank to any additional or extended obligations; (c) change the
        principal of, or rate of interest on, any Note, or any fees or other amounts
        payable hereunder; (d) postpone any date fixed for any payment of principal
        of,
        or interest on, any Note, or any fees (including, without limitation, any
        fee)
        or other amounts payable hereunder; (e) change the percentage of the Commitments
        or of the aggregate unpaid principal amount of any Note, or the number of
        Banks
        which shall be required for Banks, or any of them, to take any action hereunder;
        or (f) amend this Section 13.2; and provided,
        further,
        that no amendment, waiver, or consent shall, unless in writing and signed
        by the
        Agent in addition to each Bank, affect the rights or duties of the Agent
        under
        any Loan Document. No failure or delay on the part of any Bank or the Agent
        in
        exercising any power or right hereunder shall operate as a waiver thereof
        nor
        shall any single or 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      partial
        exercise of any such right or power, or any abandonment or discontinuance
        of
        steps to enforce such a right or power, preclude any other or further exercise
        thereof or the exercise of any other right or power. No course of dealing
        between the Borrower and any Bank or the Agent shall operate as a waiver
        of any
        right of any Bank or the Agent. No modification or waiver of any provision
        of
        this Agreement or the Note nor consent to any departure by the Borrower
        therefrom shall in any event be effective unless the same shall be in writing,
        and then such waiver or consent shall be effective only in the specific instance
        and for the purpose for which given. No notice to or demand on the Borrower
        in
        any case shall entitle the Borrower to any other or further notice or demand
        in
        similar or other circumstances.

       

      Reimbursement
        of Expenses.
        The Borrower agrees to reimburse each Bank for its reasonable out-of-pocket
        expenses, including the reasonable fees and expenses of counsel to each Bank,
        in
        connection with the transactions contemplated by this Agreement, whether
        or not
        such contemplated transactions shall be consummated, or any of them, or
        otherwise in connection with this Agreement, including its negotiation,
        preparation, execution, administration, modification and enforcement, and
        all
        reasonable fees, including the reasonable fees and expenses of counsel to
        the
        Agent and each Bank, costs and expenses of the Agent for environmental
        consultants and costs and expenses of the Agent and each Bank in connection
        with
        due diligence, transportation, computer time and research and duplication.
        The
        Borrower agrees to pay any and all stamp and other taxes which may be payable
        or
        determined to be payable in connection with the execution and delivery of
        this
        Agreement or the Notes, and to save any holder of any Note harmless from
        any and
        all liabilities with respect to or resulting from any delay or omission to
        pay
        any such taxes. The obligations of the Borrower under this Section 13.3 shall
        survive the termination of this Agreement and/or the payment of the
        Notes.

       

      Notices.
        All
        notices and other communications provided for herein shall be in writing
        (including telex, facsimile, or cable communication) and shall be mailed,
        telecopied, telexed, cabled or delivered addressed as
        follows:

       

      

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      (a) If
        to the
        Borrower, to it at:     Southern
        Union Company

          
        One PEI
        Center

      Wilkes-Barre,
        Pennsylvania 18711-0601

      Attention:
        Mr. Richard N. Marshall

      Fax:
        (570) 820-2401

      

      with
        copies to:           
Southern
        Union Company

         5444
        Westheimer
        Road

          Houston,
        Texas 77056

          Attention:
        Dennis K. Morgan, Esq.

          Fax:
        (713)
        989-1166

      

      (b) If
        to the
        Agent, to it at:             JPMorgan
        Chase Bank, N.A.

        700
        Lavaca, 2nd
        Floor

        Austin,
        Texas
        78701

       
Attention:
        Manager/Commercial
        Lending 

        Fax:
        (512)
        479-2853

      

      with
        a
        copy to:              JPMorgan
        Chase Bank,
        N.A.

       
Loan
        and Agency
        Services

        1111
        Fannin, Floor
        10

        Houston,
        Texas
        77002

        Attention:
        Rosemarie
        Salvacion 

        Fax:
        (713) 427-6307

      

      and
        if to
        any Bank, at the address specified below its name on the signature pages
        hereof,
        or as to the Borrower or the Agent, to such other address as shall be designated
        by such party in a written notice to the other party and, as to each other
        party, at such other address as shall be designated by such party in a written
        notice to the Borrower and the Agent. All such notices and communications
        shall,
        when mailed, telecopied, telexed, transmitted, or cabled, become effective
        when
        deposited in the mail, confirmed by telex answer back, transmitted to the
        telecopier, or delivered to the cable company, except that notices and
        communications to the Agent under Sections 2.1(c) or 2.2 shall not be effective
        until actually received by the Agent.

      

      Governing
        Law; Venue.
        THIS
        AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
        WITH
        THE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA; provided,
        however,
        that Chapter 346 of the Texas Finance Code, as amended, shall not apply to
        this
        Agreement and the Notes issued hereunder. Travis County, Texas shall be a
        proper
        place of venue to enforce payment or performance of this Agreement and the
        other
        Loan Documents by the Borrower, unless the Agent shall give its prior written
        consent to a different venue. The
        Borrower hereby irrevocably waives, to the fullest extent permitted by law,
        any
        objection which it may now or hereafter have to the laying of venue of any
        suit,
        action or proceeding arising out of or relating to any of the Loan Documents
        in
        the District Courts of Travis County, Texas, or in the United States District
        Court for the Western District of Texas, Austin Division, and hereby further
        irrevocably waives any claims that any such suit, action or proceeding brought
        in any such court has 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      been
        brought in an inconvenient forum. The Borrower hereby irrevocably agrees
        that,
        provided that the Borrower can obtain personal jurisdiction over and service
        of
        process upon the Agent or the applicable Bank, any legal proceeding against
        the
        Agent or any Bank arising out of or in connection with this Agreement or
        the
        other Loan Documents shall be brought in the district courts of Travis County,
        Texas, or in the United States District Court for the Western District of
        Texas,
        Austin Division. Nothing contained in this Section or in any other provision
        of
        any Loan Document (unless expressly provided otherwise) shall be deemed or
        construed as an agreement by any Bank to be subject to the jurisdiction of
        such
        courts.

       

      Survival
        of Representations, Warranties and Covenants.
        All representations, warranties and covenants contained herein or made in
        writing by the Borrower in connection herewith shall survive the execution
        and
        delivery of this Agreement and the Notes, and will bind and inure to the
        benefit
        of the respective successors and assigns of the parties hereto, whether so
        expressed or not, provided that
        the undertaking of the Banks to make the Loans to the Borrower shall not
        inure
        to the benefit of any successor or assign of the Borrower. No investigation
        at
        any time made by or on behalf of the Banks shall diminish the Banks' rights
        to
        rely on any representations made herein or in connection herewith. All
        statements contained in any certificate or other written instrument delivered
        by
        the Borrower or by any Person authorized by the Borrower under or pursuant
        to
        this Agreement or in connection with the transactions contemplated hereby
        shall
        constitute representations and warranties hereunder as of the time made by
        the
        Borrower.

       

      Counterparts.
        This Agreement may be executed in several counterparts, and by the parties
        hereto on separate counterparts, and each counterpart, when so executed and
        delivered, shall constitute an original instrument and all such separate
        counterparts shall constitute but one and the same
        instrument.

       

      Separability.
        Should any clause, sentence, paragraph or section of this Agreement be
        judicially declared to be invalid, unenforceable or void, such decision shall
        not have the effect of invalidating or voiding the remainder of this Agreement,
        and the parties hereto agree that the part or parts of this Agreement so
        held to
        be invalid, unenforceable or void will be deemed to have been stricken herefrom
        

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      and
        the remainder will have the same force and effectiveness as if such part
        or
        parts had never been included herein. Each covenant contained in this Agreement
        shall be construed (absent an express contrary provision herein) as being
        independent of each other covenant contained herein, and compliance with
        any one
        covenant shall not (absent such an express contrary provision) be deemed
        to
        excuse compliance with one or more other covenants.

       

      Descriptive
        Headings.
        The section headings in this Agreement have been inserted for convenience
        only
        and shall be given no substantive meaning or significance whatsoever in
        construing the terms and provisions of this Agreement.

       

      Accounting
        Terms.
        All accounting terms used herein which are not expressly defined in the
        Agreement, or the respective meanings of which are not otherwise qualified,
        shall have the respective meanings given to them in accordance with
        GAAP.

       

      Limitation
        of Liability. No
        claim may be made by the Borrower or any other Person against the Agent or
        any
        Bank or the Affiliates, directors, officers, employees, attorneys, or agents
        of
        the Agent or any Bank for any special, indirect, consequential, or punitive
        damages in respect to any claim for breach of contract arising out of or
        related
        to the transactions contemplated by this Agreement, or any act, omission,
        or
        event occurring in connection herewith and the Borrower hereby waives, releases,
        and agrees not to sue upon any claim for any such damages, whether or not
        accrued and whether or not known or suspected to exist in its
        favor.

       

      Set-Off.
        The Borrower hereby gives and confirms to each Bank a right of set-off of
        all
        moneys, securities and other property of the Borrower (whether special, general
        or limited) and the proceeds thereof, now or hereafter delivered to remain
        with
        or in transit in any manner to such Bank, its Affiliates, correspondents
        or
        agents from or for the Borrower, whether for safekeeping, custody, pledge,
        transmission, collection or otherwise or coming into possession of such Bank,
        its Affiliates, correspondents or agents in any way, and also, any balance
        of
        any deposit accounts and credits of the Borrower with, and any and all claims
        of
        security for the payment of the Notes and of all other liabilities and
        obligations now or hereafter owed by the Borrower to such Bank, contracted
        with
        or acquired by such 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Bank,
        whether such liabilities and obligations be joint, several, absolute,
        contingent, secured, unsecured, matured or unmatured, and the Borrower hereby
        authorizes each Bank, its Affiliates, correspondents or agents at any time
        or
        times, without prior notice, to apply such money, securities, other property,
        proceeds, balances, credits of claims, or any part of the foregoing, to such
        liabilities in such amounts as it may select, whether such liabilities be
        contingent, unmatured or otherwise, and whether any collateral security therefor
        is deemed adequate or not. The rights described herein shall be in addition
        to
        any collateral security, if any, described in any separate agreement executed
        by
        the Borrower.

       

      Sale
        or
        Assignment 

       

      Subject
        to the prior written consent of the Agent and the Borrower, such consent
        not to
        be unreasonably withheld or delayed, each Bank may assign to an Eligible
        Assignee all or a portion of its rights and obligations under this Agreement
        (including, without limitation, all or a portion of its Commitments and the
        Note
        held by it); provided,
however,
        that: (i) each such assignment
        shall be of a constant, and not a varying, percentage of all of the assigning
        Banks rights and obligations under this Agreement; (ii) the amount of the
        Commitments so assigned shall equal or exceed $5,000,000.00; (iii) the
        Commitment of each Bank shall be not less than $5,000,000.00 (subject only
        to
        reductions pursuant to Sections 4.6 and 11 hereof); (iv) the parties to each
        such assignment shall execute and deliver to the Agent, for its acceptance
        and
        recording in the Register (as hereinafter defined), an Assignment and Acceptance
        in the form of Exhibit C attached
        hereto and made a part hereof (the "Assignment and Acceptance"), together
        with
        any Note subject to such assignment and a processing and recordation fee
        of
        $5,000.00; (v) any such assignment from one Bank to another Bank shall not
        require the consent of the Agent or the Borrower if such assignment does
        not
        result in any Bank holding more than 60% of the aggregate outstanding
        Commitments; and (vi) any such assignment shall not require the consent of
        the
        Borrower if a Default or Event of Default shall have occurred and is then
        continuing. Upon such execution, delivery, acceptance, and recording, from
        and
        after the effective date specified in each Assignment and Acceptance, which
        effective date shall be the date on which such Assignment and Acceptance
        is
        accepted by the Agent, (A) the Eligible Assignee thereunder shall be a party
        hereto and, to the extent that rights and obligations hereunder

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      have
        been assigned to it pursuant to such Assignment and Acceptance, have the
        rights
        and obligations of a Bank under the Loan Documents, and (B) the Bank assignor
        thereunder shall, to the extent that rights and obligations hereunder have
        been
        assigned by it pursuant to such Assignment and Acceptance, relinquish its
        rights
        and be released from its obligations under the Loan Documents (and, in the
        case
        of an Assignment and Acceptance covering all or the remaining portion of
        an
        assigning Bank's rights and obligations under the Loan Documents, such Bank
        shall cease to be a party thereto).

       

      By
        executing and delivering an Assignment and Acceptance, the Bank assignor
        thereunder and the Eligible Assignee thereunder confirm to and agree with
        each
        other and the other parties hereto as follows: (i) other than as provided
        in
        such Assignment and Acceptance, such assigning Bank makes no representation
        or
        warranty and assumes no responsibility with respect to any statements,
        warranties, or representations made in or in connection with any Loan Document
        or the execution, legality, validity, enforceability, genuineness, sufficiency,
        or value of any Loan Document or any other instrument or document furnished
        pursuant thereto; (ii) such assigning Bank makes no representation or warranty
        and assumes no responsibility with respect to the financial condition of
        the
        Borrower or any Subsidiary or the performance or observance by the Borrower
        of
        any of its obligations under any Loan Document or any other instrument or
        document furnished pursuant thereto; (iii) such Eligible Assignee confirms
        that
        it has received a copy of the Loan Documents, together with copies of the
        financial statements referred to in Section 7.2 and such other documents
        and
        information as it has deemed appropriate to make its own credit analysis
        and
        decision to enter into such Assignment and Acceptance; (iv) such Eligible
        Assignee, independently and without reliance upon the Agent, such assigning
        Bank, or any Bank and based on such documents and information as it shall
        deem
        appropriate at the time, will continue to make its own credit decisions in
        taking or not taking action under this Agreement; (v) such Eligible Assignee
        appoints and authorizes the Agent to take such action as agent on its behalf
        and
        to exercise such powers under any Loan Document as are delegated to the Agent
        by
        the terms thereof, together with such powers as are reasonably incidental
        thereto; and (vi) such Eligible Assignee agrees that it will perform in
        accordance with their terms all of the obligations which by the terms of
        any
        Loan Document are required to be performed by it as a
        Bank.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      The
        Agent shall maintain at its address referred to in Section 13.4 a copy of
        each
        Assignment and Acceptance delivered to and accepted by it and a register
        for the
        recordation of the names and addresses of Banks and the Commitment of, and
        principal amount of the Loans owing to, each Bank from time to time (the
        "Register"). The entries in the Register shall be conclusive and binding
        for all
        purposes, absent manifest error, and the Borrower, the Agent, and Banks may
        treat each Person whose name is recorded in the Register as Bank hereunder
        for
        all purposes of the Loan Documents. The Register shall be available for
        inspection by the Borrower or any Bank at any reasonable time and from time
        to
        time upon reasonable prior notice.

       

      Upon
        its receipt of an Assignment and Acceptance executed by an assigning Bank,
        together with any Note subject to such assignment, the Agent, if such Assignment
        and Acceptance has been completed and is in substantially the form of
Exhibit C, shall (i) accept such
        Assignment and Acceptance; (ii) record the information contained therein
        in the
        Register; and (iii) give prompt notice thereof to the Borrower. Within three
        (3)
        Business Days after its receipt of such notice, the Borrower at its own expense,
        shall execute and deliver to the Agent in exchange for each surrendered Note
        a
        new Note to the order of such Eligible Assignee in an amount equal to the
        Commitment assumed by it pursuant to such Assignment and Acceptance and,
        if the
        assigning Bank has retained a Commitment hereunder, a new Note to the order
        of
        the assigning Bank in an amount equal to the Commitment retained by it
        hereunder. The new Notes shall be in an aggregate principal amount equal
        to the
        aggregate principal amount of the surrendered Notes, shall be dated the
        effective date of such Assignment and Acceptance and shall otherwise be in
        substantially the form of
Exhibit C attached hereto and made
        a part hereof. Upon receipt by the Agent of each such new Note conforming
        to the
        requirements set forth in the preceding sentences, the Agent shall return
        to the
        Borrower each such surrendered Note marked to show that each such surrendered
        Note has been replaced, renewed, and extended by such new
        Note.

       

      Each
        Bank may sell participations to one or more banks or other entities in or
        to all
        or a portion of its rights and/or obligations under this Agreement (including,
        without limitation, all or a portion of its Commitment and the Note held
        by it);
provided,
        however,
        that (i) each Bank's obligations under this Agreement (including, without
        limitation, its Commitment to the Borrower hereunder) shall remain

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      unchanged;
        (ii) such Bank shall remain solely responsible to the other parties hereto
        for
        the performance of such obligations; (iii) except as provided below, such
        Bank
        shall remain the holder of any such Note for all purposes of this Agreement;
        and
        (iv) the participating banks or other entities shall be entitled to the benefits
        of Sections 2.3 and 4.6 to recover costs, losses and expenses in the
        circumstances, and to the extent provided in Section 2.3, as though such
        participant were a Bank; provided,
however,
        the amounts to which a
        participant shall be entitled to obtain pursuant to Sections 2.3 and 4.6
        shall
        be determined by reference to such participant's selling Bank and shall be
        recoverable solely from such selling Bank and (v) the Borrower, the Agent
        and
        the other Banks shall continue to deal solely and directly with the selling
        Bank
        in connection with such Bank's rights and obligations under this Agreement
        and
        the other Loan Documents; provided,
however,
        the selling Bank may grant a
        participant rights with respect to amendments, modification or waivers with
        respect to any fees payable hereunder to such Bank (including the amount
        and the
        dates fixed for the payment of any such fees) or the amount of principal
        or the
        rate of interest payable on, the dates fixed for any payment of principal
        or
        interest on, the Loans, or the release of any obligations of the Borrower
        hereunder and under the other Loan Documents, or the release of any security
        for
        any of the Obligations. Except with respect to cost protections contained
        in
        Sections 2.3 and 4.6, no participant shall be a third party beneficiary of
        this
        Agreement and shall not be entitled to enforce any rights provided to its
        selling Bank against the Company under this Agreement.

       

      Notwithstanding
        anything herein to the contrary, each Bank may pledge and assign all or any
        portion of its rights and interests under the Loan Documents to any Federal
        Reserve Bank.

       

      Notwithstanding
        anything herein to the contrary, each Bank may assign all or a portion of
        its
        interests, rights and obligations under this Agreement (including, without
        limitation, all or a portion of its Commitments and the Note held by it)
        to one
        or more Bank Affiliates without the prior written consent of the Borrower.
        For
        purposes of this Section 12.13, “Bank Affiliate” shall mean (a) with respect to
        any Bank, (i) an Affiliate of such Bank or (ii) any entity (whether a
        corporation, partnership, trust or otherwise) that is engaged in making,
        purchasing, holding or otherwise investing in bank loans and similar extensions
        of credit in the ordinary course of its business and is administered or managed
        by a Bank or an Affiliate 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      of
        such Bank and (b) with respect to any Bank that is a fund which invests in
        bank
        loans and similar extensions of credit, any other fund that invests in bank
        loans and similar extensions of credit and is managed by the same investment
        advisor as such Bank or by an Affiliate of such investment advisor. Each
        Bank
        Affiliate shall be deemed for purposes hereof to be an “Eligible
        Assignee.”

       

      Non
        U.S. Banks. Prior
        to the date of the initial Borrowings hereunder, and from time to time
        thereafter if requested by the Borrower or the Agent, each Bank organized
        under
        the laws of a jurisdiction outside the United States of America shall provide
        the Agent and the Borrower with the forms prescribed by the Internal Revenue
        Service of the United States of America certifying such Banks exemption from
        United States withholding taxes with respect to all payments to be made to
        such
        Bank hereunder or under such Bank's Note. Unless the Borrower and the Agent
        have
        received forms or other documents satisfactory to them indicating that payments
        hereunder or under such Bank's Note are not subject to United States withholding
        tax or are subject to such tax at a rate reduced by an applicable tax treaty,
        the Borrower or the Agent shall withhold taxes from such payments at the
        applicable statutory rate in the case of payments to or for any Bank organized
        under the laws of a jurisdiction outside the United
        States.

       

      Interest.
        All agreements between the Borrower, the Agent or any Bank, whether now existing
        or hereafter arising and whether written or oral, are hereby expressly limited
        so that in no contingency or event whatsoever, whether by reason of demand
        being
        made on any Note or otherwise, shall the amount paid, or agreed to be paid,
        to
        the Agent or any Bank for the use, forbearance, or detention of the money
        to be
        loaned under this Agreement or otherwise or for the payment or performance
        of
        any covenant or obligation contained herein or in any document related hereto
        exceed the amount permissible at the Highest Lawful Rate. If, as a result
        of any
        circumstances whatsoever, fulfillment of any provision hereof or of any of
        such
        documents, at the time performance of such provision shall be due, shall
        involve
        transcending the limit of validity prescribed by applicable usury law, then,
        ipso facto, the obligation to be filled shall be reduced to the limit of
        such
        validity, and if, from any such circumstance, the Agent or any Bank shall
        ever
        receive interest or anything which might be deemed interest under applicable
        law
        which would exceed the amount 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      permissible
        at the Highest Lawful Rate, such amount which would be excessive interest
        shall
        be applied to the reduction of the principal amount owing on account of the
        Notes or the amounts owing on other obligations of the Borrower to the Agent
        or
        any Bank under this Agreement or any document related hereto and not to the
        payment of interest, or if such excessive interest exceeds the unpaid principal
        balance of the Notes and the amounts owing on other obligations of the Borrower
        to the Agent or any Bank under this Agreement or any document related hereto,
        as
        the case may be, such excess shall be refunded to the Borrower. All sums
        paid or
        agreed to be paid to the Agent or any Bank for the use, forbearance, or
        detention of the indebtedness of the Borrower to the Agent or any Bank shall,
        to
        the extent permitted by applicable law, be amortized, prorated, allocated,
        and
        spread throughout the full term of such indebtedness until payment in full
        of
        the principal thereof (Including the period of any renewal or extension thereof)
        so that the interest on account of such indebtedness shall not exceed the
        Highest Lawful Rate. The terms and provisions of this Section 13.15 shall
        control and supersede every other provision of all agreements between the
        Borrower and the Banks.

       

      Indemnification.
        THE BORROWER AGREES TO INDEMNIFY, DEFEND, AND SAVE HARMLESS THE AGENT, EACH
        BANK
        AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, AND ATTORNEYS,
        AND
        EACH OF THEM (THE "INDEMNIFIED PARTIES”), FROM AND AGAINST ALL CLAIMS, ACTIONS,
        SUITS, AND OTHER LEGAL PROCEEDINGS, DAMAGES, COSTS, INTEREST, CHARGES, TAXES,
        COUNSEL FEES, AND OTHER EXPENSES AND PENALTIES (INCLUDING WITHOUT LIMITATION
        ALL
        ATTORNEY FEES AND COSTS OR EXPENSES OF SETTLEMENT) WHICH ANY OF THE INDEMNIFIED
        PARTIES MAY SUSTAIN OR INCUR BY REASON OF OR ARISING OUT OF (a) THE MAKING
        OF
        ANY LOAN HEREUNDER, THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE
        NOTES
        AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED THEREBY AND THE EXERCISE
        OF ANY OF THE BANKS' RIGHTS UNDER THIS AGREEMENT AND THE NOTES OR OTHERWISE,
        INCLUDING, WITHOUT LIMITATION, DAMAGES, COSTS, AND EXPENSES INCURRED BY ANY
        OF
        THE INDEMNIFIED PARTIES IN INVESTIGATING, PREPARING FOR, DEFENDING AGAINST,
        OR
        PROVIDING EVIDENCE, PRODUCING DOCUMENTS, OR TAKING ANY 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      OTHER
        ACTION IN RESPECT OF ANY COMMENCED OR THREATENED LITIGATION UNDER ANY FEDERAL
        SECURITIES LAW OR ANY SIMILAR LAW OF ANY JURISDICTION OR AT COMMON LAW OR
        (b)
        ANY AND ALL CLAIMS OR PROCEEDINGS (WHETHER BROUGHT BY A PRIVATE PARTY,
        GOVERNMENTAL AUTHORITY OR OTHERWISE) FOR BODILY INJURY, PROPERTY DAMAGE,
        ABATEMENT, REMEDIATION, ENVIRONMENTAL DAMAGE, OR IMPAIRMENT OR ANY OTHER
        INJURY
        OR DAMAGE RESULTING FROM OR RELATING TO THE RELEASE OF ANY HAZARDOUS MATERIALS
        LOCATED UPON, MIGRATING INTO, FROM, OR THROUGH OR OTHERWISE RELATING TO ANY
        PROPERTY OWNED OR LEASED BY THE BORROWER OR ANY SUBSIDIARY (WHETHER OR NOT
        THE
        RELEASE OF SUCH HAZARDOUS MATERIALS WAS CAUSED BY THE BORROWER, ANY SUBSIDIARY,
        A TENANT, OR SUBTENANT OF THE BORROWER OR ANY SUBSIDIARY, A PRIOR OWNER,
        A
        TENANT, OR SUBTENANT OF ANY PRIOR OWNER OR ANY OTHER PARTY AND WHETHER OR
        NOT
        THE ALLEGED LIABILITY IS ATTRIBUTABLE TO THE HANDLING, STORAGE, GENERATION,
        TRANSPORTATION, OR DISPOSAL OF ANY HAZARDOUS MATERIALS OR THE MERE PRESENCE
        OF
        ANY HAZARDOUS MATERIALS ON SUCH PROPERTY; PROVIDED THAT THE BORROWER
        SHALL NOT BE LIABLE TO THE INDEMNIFIED PARTIES WHERE THE RELEASE OF SUCH
        HAZARDOUS MATERIALS OCCURS AT ANY TIME AT WHICH THE BORROWER OR ANY SUBSIDIARY
        CEASES TO OWN OR LEASE SUCH PROPERTY); AND PROVIDED FURTHER THAT NO
        INDEMNIFIED PARTY SHALL BE ENTITLED TO THE BENEFITS OF THIS SECTION 13.16
        TO THE
        EXTENT ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT CONTRIBUTED TO ITS
        LOSS;
        AND PROVIDED FURTHER THAT IT IS THE INTENTION OF THE BORROWER TO
        INDEMNIFY THE INDEMNIFIED PARTIES AGAINST THE CONSEQUENCES OF THEIR OWN
        NEGLIGENCE. THIS AGREEMENT IS INTENDED TO PROTECT AND INDEMNIFY THE INDEMNIFIED
        PARTIES AGAINST ALL RISKS HEREBY ASSUMED BY THE BORROWER. FOR PURPOSES OF
        THE
        FOREGOING SECTION 13.16, THE PHRASE "CONSUMMATION OF THE TRANSACTIONS
        CONTEMPLATED THEREBY” SET FORTH IN SUBPARAGRAPH (a) ABOVE SHALL INCLUDE, BUT NOT
        BE LIMITED TO, THE FINANCING OF ANY CORPORATE TAKEOVER PERMITTED HEREUNDER
        AND
        THE BORROWER’S USE OF THE LOAN PROCEEDS FOR THE PURPOSE OF ACQUIRING ANY EQUITY
        INTERESTS DESCRIBED IN 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      SUBPARAGRAPH
        (ii) OF THE DEFINITION OF "QUALIFYING ASSETS” SET FORTH IN THIS AGREEMENT (AS
        AMENDED). THE OBLIGATIONS OF THE BORROWER UNDER THIS SECTION 13.16 SHALL
        SURVIVE
        ANY TERMINATION OF THIS AGREEMENT AND THE REPAYMENT OF THE
        NOTES.

       

      Payments
        Set Aside.
        To the extent that the Borrower makes a payment or payments to the Agent
        or any
        Bank or the Agent or any Bank exercises its right of set off, and such payment
        or payments or the proceeds of such set off or any part thereof are subsequently
        invalidated, declared to be fraudulent or preferential, set aside and/or
        required to be repaid to a trustee, receiver or any other Person under any
        Debtor Law or equitable cause, then, to the extent of such recovery, the
        obligation or part thereof originally intended to be satisfied, and all rights
        and remedies therefor, shall be revived and shall continue in full force
        and
        effect as if such payment had not been made or set off had not
        occurred.

       

      Loan
        Agreement Controls. If
        there are any conflicts or inconsistencies among this Agreement and any other
        document executed in connection with the transactions connected herewith,
        the
        provisions of this Agreement shall prevail and control.

       

      Obligations
        Several. The
        obligations of each Bank under this Agreement and the Note to which it is
        a
        party are several, and no Bank shall be responsible for any obligation or
        Commitment of any other Bank under this Agreement and the Note to which it
        is a
        party. Nothing contained in this Agreement or the Note to which it is a party,
        and no action taken by any Bank pursuant thereto, shall be deemed to constitute
        the Banks to be a partnership, an association, a joint venture, or any other
        kind of entity.

       

      Pro
        Rata
        Treatment.
        All Loans under, and all payments and other amounts received in connection
        with
        this Agreement (including, without limitation, amounts received as a result
        of
        the exercise by any Bank of any right of set off) shall be effectively shared
        by
        the Banks ratably in accordance with the respective Pro Rata Percentages
        of the
        Banks. If any Bank shall obtain any payment (whether voluntary, involuntary,
        through the exercise of any right of set off, or otherwise) on account of
        the
        principal of, or interest on, or fees in respect of, any Note held by it
        (other
        than pursuant to Section 2.3(d)) in excess of its 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      Pro
        Rata Percentage of payments on account of similar Notes obtained by all the
        Banks, such Bank shall forthwith purchase from the other Banks such
        participations in the Notes or Loans made by them as shall be necessary to
        cause
        such purchasing Bank to share the excess payment ratably with each of them;
        provided, however, that if all or
        any portion of such excess payment is thereafter recovered from such purchasing
        Bank, such purchase from each Bank shall be rescinded and such Bank shall
        repay
        to the purchasing Bank the purchase price to the extent of such recovery
        together with an amount equal to such Bank's ratable share (according to
        the
        proportion of (a) the amount of such Bank's required repayment to (b) the
        total
        amount so recovered from the purchasing Bank) of any interest or other amount
        paid or payable by the purchasing Bank in respect of the total amount so
        recovered. Disproportionate payments of interest shall be shared by the purchase
        of separate participations in unpaid interest obligations, disproportionate
        payments of fees shall be shared by the purchase of separate participations
        in
        unpaid fee obligations, and disproportionate payments of principal shall
        be
        shared by the purchase of separate participations in unpaid principal
        obligations. The Borrower agrees that any Bank so purchasing a participation
        from another Bank pursuant to this Section 13.20 may, to the fullest extent
        permitted by law, exercise all its rights of payment (including the right
        of
        set-off) with respect to such participation as fully as if such Bank were
        the
        direct creditor of the Borrower in the amount of such participation.
        Notwithstanding the foregoing, a Bank may receive and retain an amount in
        excess
        of its Pro Rata Percentage to the extent but only to the extent, that such
        excess results from such Bank’s Highest Lawful Rate exceeding another Bank’s
        Highest Lawful Rate.

       

      No
        Rights, Duties or Obligations of Syndication Agent.
        The Borrower, the Agent and each Bank acknowledge and agree that except for
        the
        rights, powers, obligations and liabilities under this Agreement and the
        other
        Loan Documents as a Bank, Fleet National Bank, as Syndication Agent, shall
        have
        no additional rights, powers, obligations or liabilities under this agreement
        or
        any other Loan Documents in its capacity as Syndication
        Agent.

       

      Final
        Agreement. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN
        THE
        PARTIES AND MAY NOT BE 

       

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      CONTRADICTED
        BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT'S OF
        THE
        PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
        PARTIES.

       

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

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, the parties hereto, by their respective officers thereunto
        duly
        authorized, have executed this Agreement on the dates set forth below to
        be
        effective as of September 29, 2005.

      

      

      

      SOUTHERN
        UNION COMPANY

      

      

      By:       

      Name:      

      Title:      

      

      

      

      

      

      Commitment:     JPMORGAN
        CHASE BANK, N.A.,

      $36,000,000     for
        itself and as Agent for the Banks

      

      By:  

      Name:  

      Title:  

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

        

      

      WACHOVIA
        BANK, N.A.

      Commitment  

      $36,000,000 

      By:  

      Name:  

      Title:  

      Address
        for Notices:

      

      Wachovia
        Bank, N.A.

      301
        South
        College Street, DC-6 NC0760

      Charlotte,
        North Carolina 28288

      Attention:
        Allison Newman

      Fax
        No.:
        (704) 383-6647

      

      

      

      

      Commitment:     BANK
        OF
        AMERICA, N.A.

      $35,000,000

      By:  

      Name:  

      Title:  

       

      Address
        for Notices:

      
      

      Bank
        of
        America, N.A.

      100
        N.
        Tryon Street, NC1-007-13-13

      Charlotte,
        North Carolina 28255

      Attention:
        Kevin Bertelsen

      Fax
        No.:
        (704) 386-1319

      

      Separate
        Domestic and Eurodollar Lending Office:

      

      Bank
        of
        America, N.A.

      901
        Main
        Street

      Dallas,
        Texas 75202

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      Commitment:     UFJ
        BANK
        LIMITED, NEW YORK BRANCH

      $25,000,000

      By:  

      Name:  

      Title:  

       

      Address
        for Notices:

      

      UFJ
        Bank
        Limited, New York Branch

      55
        East
        52nd
        Street

      New
        York,
        New York 10055

      Attention:
        John T. Feeney

      Fax
        No.:
        (212) 754-1304

      

      

      

      

      Commitment:      KBC
        BANK
        N.V. 

      $20,000,000

      By:  

      Name:  

      Title:  

       

      Address
        for Notices:

      

      KBC
        Bank,
        N.V.

      Atlanta
        Representative Office

      245
        Peachtree Center Avenue, Suite 2550

      Atlanta,
        Georgia 30303

      Attention:
        Thomas Van Craen

      Fax
        No.:
        (404) 584-5465

       

      Separate
        Domestic and Eurodollar Lending Office:

      

      KBC
        Bank,
        N.V. 

      New
        York
        Branch

      125
        West
        55th
        Street

      New
        York,
        New York 10019

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      Commitment:     WELLS
        FARGO BANK, NA

      $20,000,000

      By:  

      Name:  

      Title:  

      

      Address
        for Notices:

      

      Wells
        Fargo Bank, NA

      1000
        Louisiana Street, 9th Floor 

      Houston,
        Texas 77002

      Attention:
        Marc Cuenod

      Fax
        No.:
        (713) 739-1087

      

      Separate
        Domestic and Eurodollar Lending Office:

      

      Wells
        Fargo Bank, NA

      201
        Third
        Street

      San
        Francisco, California 94103

      

      

      Commitment:     CALYON
        NEW YORK BRANCH

      $20,000,000

      By:  

      Name:  

      Title:  

      

      Address
        for Notices:

      

      Calyon
        New York Branch

      1301
        Travis, Suite 2100

      Houston,
        Texas 77002

      Attention:
        Darrell Stanley

      Fax
        No.:
        (713) 890-8668

      

      Separate
        Domestic and Eurodollar Lending Office:

      

      Calyon
        New York Branch

      1301
        Avenue of the Americas

      New
        York,
        New York 10019

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      

      

      Commitment:     MERRILL
        LYNCH BANK USA 

      $20,000,000     

      

      By:  

      Name:  

      Title:  

      

       

      Address
        for Notices:

      

      Merrill
        Lynch Bank USA

      15
        W.
        South Temple, Suite 300

      Salt
        Lake
        City, Utah 84101

      Attention:
        Derek Befus

      Fax
        No.:
        (801) 531-7470

      

      

      

      

      Commitment:     SOVEREIGN
        BANK

      $20,000,000

      

      By:  

      Name:  

      Title:  

      

       

      Address
        for Notices:

      

      Sovereign
        Bank

      75
        State
        Street, 4th
        Floor

      Boston,
        Massachusetts 02109

      Attention:
        Robert Lanigan

      Fax
        No.:
        (617) 346-7249

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      

      

      

      Commitment:      LASALLE
        BANK N.A. 

      $20,000,000

      By:  

      Name:  

      Title:  

      

       

      Address
        for Notices:

      

      LaSalle
        Bank N.A.

      135
        S.
        LaSalle Street, Suite 625

      Chicago,
        Illinois 60603

      Attention:
        Sean Drinan

      Fax
        No.:
        (312) 904-1994

      

      

      

      

      Commitment:     THE
        BANK
        OF TOKYO-MITSUBISHI, LTD.

      $20,000,000     HOUSTON
        AGENCY     

      

      By:  

      Name:  

      Title:  

      

       

      Address
        for Notices:

      

      The
        Bank
        of Tokyo-Mitsubishi, Ltd., 

      Houston
        Agency

      1100
        Louisiana, Suite 2800

      Houston,
        Texas 77002

      Attention:
        Bryan E. Hulshof

      Fax
        No.:
        (713) 658-0116

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      

      Commitment:     UMB
        BANK,
        N.A.

      $19,000,000      

      By:  

      Name:  

      Title:  

       

      Address
        for Notices:

      

      UMB
        Bank,
        N.A.

      1010
        Grand Blvd.

      Kansas
        City, Missouri 64106

      Attention:
        David A. Proffitt

      Fax
        No.:
        (816) 860-7143

      

      

      

      

      

      

      Commitment:     BAYERISCHE
        LANDESBANK,

      $15,000,000     CAYMAN
        ISLANDS BRANCH

      

      By:  

      Name:  

      Title:  

      

       

      Address
        for Notices:

      

      Bayerische
        Landesbank, 

      Cayman
        Islands Branch

      560
        Lexington Avenue

      New
        York,
        New York 10022

      Attention:
        Dietmar Rieg

      Fax
        No.:
        (212) 230-9166

      

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      

      

      Commitment:     CREDIT
        SUISSE, CAYMAN ISLANDS 

      $15,000,000     BRANCH    

      

      By:  

      Name:  

      Title:  

      

       

      Address
        for Notices:

      

      Credit
        Suisse, Cayman Islands Branch

      Eleven
        Madison Avenue

      New
        York,
        New York 10010

      Attention:
        Sarah Wu

      Fax
        No.:
        (212) 743-2042

      

      

      

      

      Commitment:     PNC
        BANK,
        NATIONAL ASSOCIATION

      $15,000,000

      By:  

      Name:  

      Title:  

      

       

      Address
        for Notices:

      

      PNC
        Bank,
        National Association

      Two
        Tower
        Center Blvd.

      East
        Brunswick, New Jersey 08816

      Attention:
        Michael Nardo

      Fax
        No.:
        (732) 220-3270

      

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      

      Commitment:     SUMITOMO
        MITSUI BANKING 

      $15,000,000     CORPORATION

      By:  

      Name:  

      Title:  

      

       

      Address
        for Notices:

      

      Sumitomo
        Mitsui Banking Corporation

      277
        Park
        Avenue

      New
        York,
        New York 10172

      Attention:
        Robert Dupree

      Fax
        No.:
        (212) 224-4384

      

      

      

      Commitment:     MIZUHO
        CORPORATE BANK (USA)

      $15,000,000      

      

      By:  

      Name:  

      Title:  

      

       

      Address
        for Notices:

      

      Mizuho
        Corporate Bank (USA)

      1251
        Avenue of the Americas

      New
        York,
        New York 10020-1104

      Attention:
        Yoshimi Tsushima

      Fax
        No.:
        (212) 282-4488

      

      

      

      

      

      

      

      

      Commitment:     BANK
        OF
        CHINA, NEW YORK BRANCH

      $12,000,000      

      By:  

      Name:  

      Title:  

      

       

      Address
        for Notices:

      

      Bank
        of
        China, New York Branch

      410
        Madison Avenue

      New
        York,
        New York 10017

      Attention:
        Joseph Zeng

      Fax
        No.:
        (212) 308-4993

      

      

      

      

      

      

      Commitment:     ROYAL
        BANK OF CANADA.

      $12,000,000      

      By:  

      Name:  

      Title:  

       

      Address
        for Notices:

      

      Royal
        Bank of Canada

      New
        York
        Branch

      One
        Liberty Plaza, 3rd Floor

      New
        York,
        New York 1006-1404

      Attention:
        Compton Singh

      Fax
        No.:
        (212) 428-2372

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      

      Commitment:     BANK
        OF
        COMMUNICATIONS,

      $5,000,000     NEW
        YORK
        BRANCH      

      By:  

      Name:  

      Title:  

      

       

      Address
        for Notices:

      

      Bank
        of
        Communications,

      New
        York
        Branch

      One
        Exchange Plaza

      55
        Broadway, 31st
        Floor

      New
        York,
        New York 10006-3008

      Attention:
        Richard Thornhill

      Fax
        No.:
        (212) 376-8089

      

      

      

      

      Commitment:     CHINATRUST
        COMMERCIAL BANK,

      $5,000,000     NEW
        YORK
        BRANCH      

      By:  

      Name:  

      Title:  

      

       

      Address
        for Notices:

      

      Chinatrust
        Commercial Bank,

      New
        York
        Branch

      366
        Madison Avenue, 3/F

      New
        York,
        New York 10017

      Attention:
        Laurence Chui

           Fax
        No.:
        (212) 949-4774

      

      

      

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      

      EXHIBIT
        A

      

      REVOLVING
        NOTE

      

      

      $___________       ____________,
        200__

      

      FOR
        VALUE
        RECEIVED, the undersigned, SOUTHERN UNION COMPANY, a corporation organized
        under
        the laws of Delaware (the “Borrower”), HEREBY PROMISES TO PAY to the order of
        ___________________________________ (the “Bank”), on or before
        _______________________ (the "Maturity Date”), the principal sum of
        ________________ Million and No/ 100ths Dollars ($_,000,000.00) in accordance
        with the terms and provisions of that certain Fourth Amended and Restated
        Revolving Credit Agreement dated August ____, 2005, by and among the Borrower,
        the Bank, the other banks named on the signature pages thereof, and JPMORGAN
        CHASE BANK, N.A., as Agent (the “Credit Agreement”). Capitalized terms used
        herein and not otherwise defined shall have the meanings ascribed to such
        terms
        in the Credit Agreement.

      

      The
        outstanding principal balance of this Revolving Note shall be payable at
        the
        Maturity Date. The Borrower promises to pay interest on the unpaid principal
        balance of this Revolving Note from the date of any Loan evidenced by this
        Revolving Note until the principal balance thereof is paid in full. Interest
        shall accrue on the outstanding principal balance of this Revolving Note
        from
        and including the date of any Loan evidenced by this Revolving Note to but
        not
        including the Maturity Date at the rate or rates, and shall be due and payable
        on the dates, set forth in the Credit Agreement. Any amount not paid when
        due
        with respect to principal (whether at stated maturity, by acceleration or
        otherwise), costs or expenses, or, to the extent permitted by applicable
        law,
        interest, shall bear interest from the date when due to and excluding the
        date
        the same is paid in full, payable on demand, at the rate provided for in
        Section
        2.2(b) of the Credit Agreement.

      

      Payments
        of principal and interest, and all amounts due with respect to costs and
        expenses, shall be made in lawful money of the United States of America in
        immediately available funds, without deduction, set off or counterclaim to
        the
        account of the Agent at the principal office of JPMorgan Chase Bank, N.A.
        in
        Houston, Texas (or such other address as the Agent under the Credit Agreement
        may specify) not later than noon (Houston time) on the dates on which such
        payments shall become due pursuant to the terms and provisions set forth
        in the
        Credit Agreement.

      

      If
        any
        payment of interest or principal herein provided for is not paid when due,
        then
        the owner or holder of this Revolving Note may at its option, by notice to
        the
        Borrower, declare the unpaid, principal balance of this Revolving Note, all
        accrued and unpaid interest thereon and all other amounts payable under this
        Revolving Note to be forthwith due and payable, whereupon this Revolving
        Note,
        all such interest and all such amounts shall become and be forthwith due
        and
        payable in full, without presentment, demand, protest, notice of intent to
        accelerate, notice of actual acceleration or further notice of any kind,
        all of
        which are hereby expressly waived by the Borrower.

      

      If
        any
        payment of principal or interest on this Revolving Note shall become due
        on a
        Saturday, Sunday, or public holiday on which the Agent is not open for business,
        such payment shall be made on the next succeeding Business Day and such
        extension of time shall in such case be included in computing interest in
        connection with such payment.

      

      In
        addition to all principal and accrued interest on this Revolving Note, the
        Borrower agrees to pay (a) all reasonable costs and expenses incurred by
        the
        Agent and all owners and holders of this Revolving Note in collecting this
        Revolving Note through any probate, reorganization bankruptcy or any other
        proceeding and (b) reasonable attorneys' fees when and if this Revolving
        Note is
        placed in the hands of an attorney for collection after default.

      

      All
        agreements between the Borrower and the Bank, whether now existing or hereafter
        arising and whether written or oral, are hereby expressly limited so that
        in no
        contingency or event whatsoever, whether by reason of demand being made on
        this
        Revolving Note or otherwise, shall the amount paid, or agreed to be paid,
        to the
        Bank for the use, forbearance, or detention of the money to be loaned under
        the
        Credit Agreement and evidenced by this Revolving Note or otherwise or for
        the
        payment or performance of any covenant or obligation contained in the Credit
        Agreement or this Revolving Note exceed the amount permissible at Highest
        Lawful
        Rate. If as a result of any circumstances whatsoever, fulfillment of any
        provision hereof or of the Credit Agreement at the time performance of such
        provision shall be due, shall involve transcending the limit of validity
        prescribed by applicable usury law, then, ipso
        facto,
        the
        obligation to be fulfilled shall be reduced to the limit of such validity,
        and
        if from any such circumstance, the Bank shall ever receive interest or anything
        which might be deemed interest under applicable law which would exceed the
        amount permissible at the Highest Lawful Rate, such amount which would be
        excessive interest shall be applied to the reduction of the principal amount
        owing on account of this Revolving Note or the amounts owing on other
        obligations of the Borrower to the Bank under the Credit Agreement and not
        to
        the payment of interest, or if such excessive interest exceeds the unpaid
        principal balance of this Revolving Note and the amounts owing on other
        obligations of the Borrower to the Bank under the Credit Agreement, as the
        case
        may be, such excess shall be refunded to the Borrower. In determining whether
        or
        not the interest paid or payable under any specific contingencies exceeds
        the
        Highest Lawful Rate, the Borrower and the Bank shall, to the maximum extent
        permitted under applicable law, (a) characterize any nonprincipal payment
        as an
        expense, fee or premium rather than as interest; (b) exclude voluntary
        prepayments and the effects thereof, and (c) amortize, prorate, allocate
        and
        spread in equal parts during the period of the full stated term of this
        Revolving Note, all interest at any time contracted for, charged, received
        or
        reserved in connection with the indebtedness evidenced by this Revolving
        Note.

      

      This
        Revolving Note is one of the Notes provided for in, and is entitled to the
        benefits of, the Credit Agreement, which Credit Agreement, among other things,
        contains provisions for acceleration of the maturity hereof upon the happening
        of certain stated events, for prepayments on account of principal hereof
        prior
        to the maturity hereof upon the terms and conditions and with the effect
        therein
        specified, and provisions to the effect that no provision of the Credit
        Agreement or this Revolving Note shall require the payment or permit the
        collection of interest in excess of the Highest Lawful Rate. It is contemplated
        that by reason of prepayments or repayments hereon prior to the Maturity
        Date,
        there may be times when no indebtedness is owing hereunder prior to such
        date;
        but notwithstanding such occurrence this Revolving Note shall remain valid
        and
        shall be in full force and effect as to Loans made pursuant to the Credit
        Agreement subsequent to each such occurrence.

      

      Except
        as
        otherwise specifically provided for in the Credit Agreement, the Borrower
        and
        any and all endorsers, guarantors and sureties severally waive grace, demand,
        presentment for payment, notice of dishonor or default, protest, notice of
        protest, notice of intent to accelerate, notice of acceleration and diligence
        in
        collecting and bringing of suit against any party hereto, and agree to all
        renewals, extensions or partial payments hereon and to any release or
        substitution of security hereof, in whole or in part, with or without notice,
        before or after maturity.

      

      THIS
        REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
        LAWS
        OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.

      

      IN
        WITNESS WHEREOF, the Borrower has caused this Revolving Note to be executed
        and
        delivered by its officer thereunto duly authorized effective as of the date
        first above written.

      

      SOUTHERN
        UNION COMPANY

      

      

      By:_________________________________

      Name:_______________________________

      Title:________________________________

      

      

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      EXHIBIT
        B

      

      NOTICE
        OF BORROWING

      

      The
        undersigned hereby certifies that s/he is an officer of SOUTHERN UNION COMPANY,
        a corporation organized under the laws of Delaware (the “Borrower”), authorized
        to execute this Notice of Borrowing on behalf of the Borrower. With reference
        to
        that certain Fourth Amended and Restated Revolving Credit Agreement dated
        September 29, 2005 (as same may be amended, modified, increased, supplemented
        and/or restated from time to time, the “Credit Agreement”) entered into by and
        between the Borrower, JPMORGAN CHASE BANK, N.A., as Agent, and the Banks
        identified therein, the undersigned further certifies, represents and warrants
        to Banks on behalf of the Borrower that to his best knowledge and belief
        after
        reasonable and due investigation and review, all of the following statements
        are
        true and correct (each capitalized term used herein having the same meaning
        given to it in the Credit Agreement unless otherwise specified):

      

      (a) Borrower
        requests that the Banks advance to the Borrower the aggregate sum of
        $__________by no later than ____________, 200__ (the “Borrowing Date”).
        Immediately following such Loan, the aggregate outstanding balance of Loans
        shall equal $__________. Borrower requests that the Loans bear interest as
        follows:

      

      (i) The
        principal amount of the Loans, if any, which shall bear interest at the
        Alternate Base Rate requested to be made by the Banks is $________. The initial
        Rate Period for such Loans shall be 90
        days.

      

      (ii) The
        principal amount of the Loans, if any, which shall bear interest at the
        Eurodollar Rate for which the Rate Period shall be fifteen
        days
        requested to be made by the Banks is $________________.

      

      (iii) The
        principal amount of the Loans, if any, which shall bear interest at the
        Eurodollar Rate for which the Rate Period shall be one
        month
        requested to be made by the Banks is $__________.

      

      (iv) The
        principal amount of the Loans, if any, which shall bear interest at the
        Eurodollar Rate for which the Rate Period shall be two
        months
        requested to be made by the Banks is $_________.

      

      (v) The
        principal amount of the Revolving Loans, if any, which shall bear interest
        at
        the Eurodollar Rate for which the Rate Period shall be three
        months
        requested to be made by the Banks is $_________.

      

      (vi) The
        principal amount of the Revolving Loans, if any, which shall bear interest
        at
        the Eurodollar Rate for which the Rate Period shall be six
        months
        requested to be made by the Banks is $__________.

      

      (b) The
        proceeds of the borrowing shall be deposited into Borrower's demand deposit
        account at JPMorgan Chase Bank, N.A. more fully described as
        follows:

      

      Account
        No. 09916100522, styled Southern Union Company.

      

      (c) Of
        the
        aggregate sum to be advanced, $_____________ will be advanced to provide
        working
        capital pursuant to Section 6.1(a) of the Credit Agreement and $__________will
        be advanced for the purposes set forth in Section 6.1(b) of the Credit
        Agreement; and $__________ will be advanced for the purposes set forth in
        Section 6.1(c) of the Credit Agreement; and $___________ will be advanced
        for
        the purposes of replacing Loans currently outstanding under the Credit
        Agreement.

      

      (d) The
        Expiration Date of each Rate Period specified in (a) above shall be the last
        day
        of such Rate Period.

      

      (e) As
        of the
        date hereof, and as a result of the making of the requested Loans, there
        does
        not and will not exist any Default or Event of Default.

      

      (f) The
        representations and warranties contained in Section 7 of the Credit Agreement
        are true and correct in all material respects as of the date hereof and shall
        be
        true and correct upon the making of the requested Loan, with the same force
        and
        effect as though made on and as of the date hereof and thereof.

      

      EXECUTED
        AND DELIVERED this _____ day of _______________, 200__.

      

      

      SOUTHERN
        UNION COMPANY

      

      

      By:_________________________

      Name:_______________________

      Title:________________________

      

      

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

      EXHIBIT
        C

      

      ASSIGNMENT
        AND ACCEPTANCE

      

      

      [NAME
        AND
        ADDRESS OF

      ASSIGNING
        BANK]

      

      

      

      _______________,
        200__

      

      

      ________________

      ________________

      ________________

      ________________

      

      
        	 	 	
                Re:

              	
                Southern
                  Union Company Fourth Amended and Restated Revolving Credit Agreement
                  

              

      

      

      Ladies
        and Gentlemen:

      We
        have
        entered into a Fourth Amended and Restated Revolving Credit Agreement dated
        as
        of September 29, 2005 (the “Credit Agreement”), among certain banks (including
        us), JPMorgan Chase Bank, N.A. (the "Agent") and Southern Union Company (the
        "Company"). Capitalized terms used herein and not otherwise defined shall
        have
        the meanings ascribed to such terms in the Credit Agreement.

      

      Each
        reference to the Credit Agreement, the Notes, or any other document evidencing
        or governing the Loans (all such documents collectively, the "Financing
        Documents”) includes each such document as amended, modified, extended or
        replaced from time to time. All times are Houston times.

      

      1. Assignment.
        We hereby sell you and assign to you without recourse, and you hereby
        unconditionally and irrevocably acquire for your own account and risk, a
        percent
        ( %) undivided interest ("your assigned share”) in each of the following (the
        "Assigned Obligations”):

      

      a. our
        Note;

      

      b. all
        Loans
        and interest thereon as provided in Section 2 of the Credit Agreement [,except
        that interest shall accrue on your assigned share in the principal of Alternate
        Base Rate Loans and Eurodollar Rate Loans at an annual rate equal to the
        rate
        provided in the Credit Agreement minus _____%]; and

      

      c. commitment
        fees payable pursuant to Section 5 of the Credit Agreement[, except that
        your
        assigned share in such fees shall be at an annual rate equal to the rate
        provided in the Credit Agreement minus ____%].

      

      	2.  	
              Materials
                Provided Assignee

            

      

      a. We
        will
        promptly request that the Company issue new Notes to us and to you in
        substitution for our Note to reflect the assignment set forth herein. Upon
        issuance of such substitute Notes, (i) you will become a Bank under the Credit
        Agreement, (ii) you will assume our obligations under the Credit Agreement
        to
        the extent of your assigned share, and (iii) the Company will release us
        from
        our obligations under the Credit Agreement to the extent, but only to the
        extent, of your assigned share. The Company consents to such release by signing
        this Agreement where indicated below. As a Bank, you will be entitled to
        the
        benefits and subject to the obligations of a "Bank”, as set forth in the Credit
        Agreement, and your rights and liabilities with respect to the other Banks
        and
        the Agent will be governed by the Credit Agreement, including without limitation
        Section 12 thereof.

       

      b. We
        have
        furnished you copies of the Credit Agreement, our Note and each other Financing
        Document you have requested. We do not represent or warrant (i) the priority,
        legality, validity, binding effect or enforceability of any Financing Document
        or any security interest created thereunder, (ii) the truthfulness and accuracy
        of any representation contained in any Financing Document, (iii) the filing
        or
        recording of any Financing Document necessary to perfect any security interest
        created thereunder, (iv) the financial condition of the Company or any other
        Person obligated under any Financing Document, any financial or other
        information, certificate, receipt or other document furnished or to be furnished
        under any Financing Document or (v) any other matter not specifically set
        forth
        herein having any relation to any Financing Document, your interest in one
        Note,
        the Company or any other Person. You represent to us that you are able to
        make,
        and have made, your own independent investigation and determination of the
        foregoing matters, including, without limitation, the credit worthiness of
        the
        Company and the structure of the transaction.

       

      3. Governing
        law; Jurisdiction.
        This
        Agreement shall be governed by, and construed in accordance with, the laws
        of
        the State of Texas. You irrevocably submit to the jurisdiction of any State
        or
        Federal court sitting in Austin, Texas in any suit, action or proceeding
        arising
        out of or relating to this Agreement and irrevocably waive any objection
        you may
        have to this laying of venue of any such suit, action or proceeding brought
        in
        any such court and any claim that any such suit, action or proceeding has
        been
        brought in an inconvenient forum. We may serve process in any manner permitted
        by law and may bring proceedings against you in any other
        jurisdiction.

       

      4. Notices. All
        notices and other communications given hereunder to a party shall be given
        in
        writing (including bank wire, telecopy, telex or similar writing) at such
        party's address set forth on the signature pages hereof or such other address
        as
        such party may hereafter specify by notice to the other party. Notice may
        also
        be given by telephone to the Person, or any other officer in the office,
        listed
        on the signature pages hereof if confirmed promptly by telex or telecopy.
        Notices shall be effective immediately, if given by telephone; upon
        transmission, if given by bank wire, telecopy or telex; five days after deposit
        in the mails, if mailed; and when delivered, if given by other
        means.

       

      5. Authority.
        Each of
        us represents and warrants that the execution and delivery of this Agreement
        have been validly authorized by all necessary corporate action and that this
        Agreement constitutes a valid and legally binding obligation enforceable
        against
        it in accordance with its terms.

      

      6. Counterparts. This
        Agreement may be executed in one or more counterparts, and by each party
        on
        separate counterparts, each of which shall be an original but all of which
        taken
        together shall be but one instrument.

      

      7. Amendments. No
        amendment modification or waiver of any provision of this Agreement shall
        be
        effective unless in writing and signed by the party against whom enforcement
        is
        sought.

      

      If
        the
        foregoing correctly sets forth our agreement, please so indicate by signing
        the
        enclosed copy of this Agreement and returning it to us.

      

      Very
        truly yours,

      

      

      __________________________________________

      

      By:
        ______________________________________

      Name:
        ____________________________________

      Title:
        _____________________________________

      

      [Street
        Address]      

      [City,
        State, Zip Code]     

      Telephone:
              

      Telecopy:
              

      

      AGREED
        AND ACCEPTED:

      

      _______________________________

      

      By: _________________________

      _________________________

      _________________________

      _________________________

      

      Attention: ___________________

      Telephone: ___________________

      Telecopy: ___________________

      Account
        for Payments: ____________

      

      ASSIGNMENT
        APPROVED PURSUANT TO SECTION 13.13 OF THE CREDIT

      AGREEMENT
        AND RELEASE APPROVED IN SECTION 2 OF THIS AGREEMENT:

      

      SOUTHERN
        UNION COMPANY

      

      

      By: _______________________

      Name: _______________________

      Title: _______________________

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