-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C3IKtYhyTuFiSbRhXrIH66nM6z1giKUZXFRBXgNnrz6sidzWJGXAH2orr6oC/0Eo E8parMMlXDs1BTBRGG6w9w== /in/edgar/work/20000811/0001024401-00-000034/0001024401-00-000034.txt : 20000921 0001024401-00-000034.hdr.sgml : 20000921 ACCESSION NUMBER: 0001024401-00-000034 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHERN BORDER PARTNERS LP CENTRAL INDEX KEY: 0000909281 STANDARD INDUSTRIAL CLASSIFICATION: [4922 ] IRS NUMBER: 931120873 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12202 FILM NUMBER: 693144 BUSINESS ADDRESS: STREET 1: 1400 SMITH ST STREET 2: C/O ENRON BLDG CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7138536161 MAIL ADDRESS: STREET 1: 1400 SMITH ST STREET 2: ENRON BUILDING RM 4524 CITY: HOUSTON STATE: TX ZIP: 77002 10-Q 1 0001.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000 Commission File Number 1-12202 NORTHERN BORDER PARTNERS, L.P. (Exact name of registrant as specified in its charter) Delaware 93-1120873 (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) Enron Building 1400 Smith Street Houston, Texas 77002 (Address of principal executive (Zip code) offices) (713) 853-6161 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] 1 of 17 NORTHERN BORDER PARTNERS, L.P. AND SUBSIDIARIES TABLE OF CONTENTS Page No. PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Consolidated Statement of Income - Three Months Ended June 30, 2000 and 1999 and Six Months Ended June 30, 2000 and 1999 3 Consolidated Balance Sheet - June 30, 2000 and December 31, 1999 4 Consolidated Statement of Cash Flows - Six Months Ended June 30, 2000 and 1999 5 Consolidated Statement of Changes in Partners' Capital - Six Months Ended June 30, 2000 6 Notes to Consolidated Financial Statements 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 15 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 16 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS NORTHERN BORDER PARTNERS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (In Thousands, Except Per Unit Amounts) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, 2000 1999 2000 1999 OPERATING REVENUES, NET $82,536 $78,012 $164,053 $156,907 OPERATING EXPENSES Operations and maintenance 14,684 12,564 27,558 25,327 Depreciation and amortization 15,203 13,559 30,705 27,008 Taxes other than income 7,815 7,547 15,698 15,182 Operating expenses 37,702 33,670 73,961 67,517 OPERATING INCOME 44,834 44,342 90,092 89,390 INTEREST EXPENSE 19,249 16,326 37,940 32,570 OTHER INCOME 1,281 1,226 1,303 3,147 MINORITY INTERESTS IN NET INCOME 8,824 8,681 17,447 17,775 NET INCOME TO PARTNERS $18,042 $20,561 $ 36,008 $ 42,192 NET INCOME PER UNIT $ 0.60 $ 0.69 $ 1.19 $ 1.41 NUMBER OF UNITS USED IN COMPUTATION 29,347 29,347 29,347 29,347 The accompanying notes are an integral part of these consolidated financial statements.
PART I. FINANCIAL INFORMATION (Continued) ITEM 1. FINANCIAL STATEMENTS (Continued) NORTHERN BORDER PARTNERS, L.P. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (In Thousands) (Unaudited)
June 30, December 31, ASSETS 2000 1999 CURRENT ASSETS Cash and cash equivalents $ 53,945 $ 22,927 Accounts receivable 35,495 30,238 Materials and supplies, at cost 6,032 4,410 Under recovered cost of service -- 3,068 Total current assets 95,472 60,643 TRANSMISSION PLANT Property, plant and equipment 2,409,926 2,410,133 Less: Accumulated provision for depreciation and amortization 694,277 664,777 Property, plant and equipment, net 1,715,649 1,745,356 INVESTMENTS AND OTHER ASSETS Investment in unconsolidated affiliate 54,537 31,895 Other 26,041 25,543 Total investments and other assets 80,578 57,438 Total assets $1,891,699 $1,863,437 LIABILITIES AND PARTNERS' CAPITAL CURRENT LIABILITIES Current maturities of long-term debt $ 69,285 $ 183,617 Accounts payable 4,709 8,279 Accrued taxes other than income 25,450 26,608 Accrued interest 18,360 17,608 Over recovered cost of service 674 -- Accumulated provision for rate refunds 16,090 2,317 Total current liabilities 134,568 238,429 LONG-TERM DEBT, NET OF CURRENT MATURITIES 985,870 848,369 MINORITY INTERESTS IN PARTNERS' CAPITAL 248,601 250,450 RESERVES AND DEFERRED CREDITS 10,725 10,920 PARTNERS' CAPITAL General Partners 10,239 10,305 Common Units 501,696 504,964 Total partners' capital 511,935 515,269 Total liabilities and partners' capital $1,891,699 $1,863,437 The accompanying notes are an integral part of these consolidated financial statements.
PART I. FINANCIAL INFORMATION (Continued) ITEM 1. FINANCIAL STATEMENTS (Continued) NORTHERN BORDER PARTNERS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (In Thousands) (Unaudited)
Six Months Ended June 30, 2000 1999 CASH FLOWS FROM OPERATING ACTIVITIES: Net income to partners $ 36,008 $ 42,192 Adjustments to reconcile net income to partners to net cash provided by operating activities: Depreciation and amortization 30,837 27,014 Minority interests in net income 17,447 17,775 Provision for rate refunds 13,773 -- Changes in components of working capital (3,590) (2,490) Other 283 1,078 Total adjustments 58,750 43,377 Net cash provided by operating activities 94,758 85,569 CASH FLOWS FROM INVESTING ACTIVITIES: Investment in unconsolidated affiliate (23,299) -- Capital expenditures for property, plant and equipment (4,094) (77,460) Net cash used in investing activities (27,393) (77,460) CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions to Unitholders and General Partners (39,342) (36,580) Distributions to Minority Interests (19,296) (20,332) Issuance of long-term debt 169,783 65,000 Retirement of long-term debt (146,018) (21,366) Long-term debt financing costs (1,474) -- Net cash used in financing activities (36,347) (13,278) NET CHANGE IN CASH AND CASH EQUIVALENTS 31,018 (5,169) Cash and cash equivalents-beginning of period 22,927 41,042 Cash and cash equivalents-end of period $ 53,945 $ 35,873 Supplemental Disclosures of Cash Flow Information: Cash paid for: Interest (net of amount capitalized) $ 37,436 $ 32,159 Changes in components of working capital: Accounts receivable $ (5,257) $ (7,650) Materials and supplies (1,622) 494 Over/under recovered cost of service 3,742 6,904 Accounts payable (47) (1,970) Accrued taxes other than income (1,158) (430) Accrued interest 752 162 Total $ (3,590) $ (2,490) The accompanying notes are an integral part of these consolidated financial statements.
PART I. FINANCIAL INFORMATION (Continued) ITEM 1. FINANCIAL STATEMENTS (Continued) NORTHERN BORDER PARTNERS, L.P. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (In Thousands) (Unaudited)
Total General Common Partners' Partners Units Capital Partners' Capital at December 31, 1999 $10,305 $504,964 $515,269 Net income to partners 1,124 34,884 36,008 Distributions to partners (1,190) (38,152) (39,342) Partners' Capital at June 30, 2000 $10,239 $501,696 $511,935 The accompanying notes are an integral part of this consolidated financial statement.
PART I. FINANCIAL INFORMATION - (Continued) ITEM 1. FINANCIAL STATEMENTS - (Continued) NORTHERN BORDER PARTNERS, L.P. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The consolidated financial statements included herein have been prepared by Northern Border Partners, L.P. (the "Partnership") without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the financial results for the interim periods. Certain information and notes normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. However, the Partnership believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1999. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Partnership owns a 70% general partner interest in Northern Border Pipeline Company ("Northern Border Pipeline"). Black Mesa Holdings, Inc., Black Mesa Pipeline Operations, L.L.C. and NBP Energy Pipelines, L.L.C. ("NBP Energy") are wholly-owned subsidiaries of the Partnership. NBP Energy owns a 39% common membership interest and 80% of the non-voting class A shares in Bighorn Gas Gathering, L.L.C. ("Bighorn"), which is reflected as an investment in unconsolidated affiliate on the consolidated balance sheet. The common membership interest was acquired in December 1999 and the class A shares were acquired in June 2000. 2. In October 1998, Northern Border Pipeline filed a certificate application with the Federal Energy Regulatory Commission ("FERC") to seek approval to expand and extend its pipeline system into Indiana ("Project 2000"). When completed, Project 2000 would afford shippers on the expanded and extended pipeline system access to industrial gas consumers in northern Indiana. The certificate application was subsequently amended by Northern Border Pipeline in March and December 1999. On March 16, 2000, the FERC issued an order granting Northern Border Pipeline's application for a certificate to construct and operate the proposed facilities. The FERC approved Northern Border Pipeline's request for rolled-in rate treatment based upon the proposed project costs. The project has a targeted in-service date of November 2001. The capital expenditures for the project are estimated to be approximately $94 million. 3. Northern Border Pipeline filed a rate proceeding with the FERC in May 1999 for, among other things, a redetermination of its allowed equity rate of return. The total annual cost of service increase due to Northern Border Pipeline's proposed changes is approximately $30 million. A number of Northern Border Pipeline's shippers and competing pipelines have filed interventions and protests. In June 1999, the FERC issued an order in which the proposed changes were suspended until December 1, 1999, after which the proposed changes were implemented with subsequent billings subject to refund. The June order and a subsequent clarification issued by the FERC in August 1999 set for hearing not only Northern Border Pipeline's proposed changes but also several issues raised by intervenors including the appropriateness of Northern Border Pipeline's cost of service tariff; rolled-in rate treatment of The Chicago Project, which was Northern Border Pipeline's expansion and extension project placed in service in December 1998; capital project cost containment mechanism ("PCCM") amount recorded for The Chicago Project; depreciation schedule and creditworthiness standards. As agreed to in a prior rate case settlement, the PCCM was implemented to limit Northern Border Pipeline's ability to include cost overruns on The Chicago Project in rate base and to provide incentives for cost underruns. The PCCM amount is computed by comparing the final cost of The Chicago Project to the budgeted cost, adjusted for the effects of inflation and project scope changes as defined in the prior rate case settlement. Testimony filed by the FERC staff and intervenors in the current rate case proceeding has proposed changes to the PCCM computation, which would result in rate base reductions ranging from $32 million to $43 million. In June 2000, Northern Border Pipeline reached an agreement in principle with a majority of its customers and the FERC staff to settle the issues in the rate case. Terms of the settlement are confidential until a stipulation and agreement is finalized by the parties and filed with the FERC for approval. For the three month and six month periods ending June 30, 2000, respectively, Northern Border Pipeline recorded a $6.7 million and $13.5 million provision for rate refunds, which reflects the anticipated refund obligation to its customers. The provision for rate refunds is netted against operating revenues on the consolidated statement of income. Based upon the agreement in principle, the procedural schedule in the rate case proceeding has been suspended until October 2000. While the parties in the rate case are meeting to finalize the stipulation and agreement, the Partnership can give no assurance whether it will be filed and subsequently approved by the FERC. 4. In June 2000, the Partnership completed a private offering of $150 million of 8 7/8% Senior Notes due 2010 ("Partnership Senior Notes"). The proceeds from the private offering, net of debt discounts and issuance costs, were primarily used to reduce existing indebtedness under a November 1997 credit agreement and to acquire the class A shares in Bighorn (see Note 1). The indenture under which the Partnership Senior Notes were issued does not limit the amount of indebtedness or other obligations that the Partnership may incur, but does contain material financial covenants, including restrictions on the incurrence of secured indebtedness. The Partnership also entered into a registration rights agreement with the initial purchasers in the private offering in which the Partnership agreed, among other things, to use its reasonable best efforts to exchange the Partnership Senior Notes in a registered offering for notes with substantially identical terms. In June 2000, the Partnership entered into interest rate swap agreements with an aggregate notional principal amount of $150 million. The interest rate swap agreements are scheduled to terminate in June 2010. Under the agreements, the Partnership makes payments to counterparties at variable rates based on the London Interbank Offered Rate (6.86% at June 30, 2000) and in return receives payments based on an average fixed rate of 7.64%. In June 2000, the Partnership entered into two credit agreements with certain financial institutions, a $75 million 364- day credit agreement and a $75 million three-year revolving credit agreement (collectively, "Partnership Credit Agreements"). The Partnership Credit Agreements are to be used for capital expenditures, working capital and general business purposes. Upon proper notification to the financial institutions, the maturity date of the Partnership Credit Agreements may be extended to June 2005. The Partnership Credit Agreements permit the Partnership to choose among various interest rate options, to specify the portion of the borrowings to be covered by specific interest rate options and to specify the interest rate period. The Partnership is required to pay a fee on the principal commitment amount of $150 million. At June 30, 2000, no funds had been borrowed under the Partnership Credit Agreements. 5. Net income per unit is computed by dividing net income, after deduction of the general partners' allocation, by the weighted average number of outstanding common units. The general partners' allocation is equal to an amount based upon their collective 2% general partner interest adjusted for incentive distributions. The distribution to partners amount shown on the accompanying consolidated statement of changes in partners' capital includes incentive distributions to the general partners of approximately $0.4 million. On July 19, 2000, the Partnership declared a cash distribution of $0.65 per unit ($2.60 per unit on an annualized basis) for the quarter ended June 30, 2000. The distribution is payable August 14, 2000, to unitholders of record at July 31, 2000. PART I. FINANCIAL INFORMATION - (Continued) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS NORTHERN BORDER PARTNERS, L.P. AND SUBSIDIARIES Results of Operations Northern Border Partners, L.P. (the "Partnership") owns a 70% general partner interest in Northern Border Pipeline Company ("Northern Border Pipeline"). Northern Border Pipeline's revenue is derived from agreements with various shippers for the transportation of natural gas. It transports gas under a Federal Energy Regulatory Commission ("FERC") regulated tariff that provides an opportunity to recover all of the operations and maintenance costs of the pipeline, taxes other than income taxes, interest, depreciation and amortization, an allowance for income taxes and a regulated return on equity. Northern Border Pipeline is generally allowed to collect from its shippers a return on regulated rate base as well as recover that rate base through depreciation and amortization. The return amount Northern Border Pipeline may collect from its shippers declines as the rate base is recovered. Billings for the firm transportation agreements are based on contracted volumes to determine the allocable share of the cost of service and are not dependent upon the percentage of available capacity actually used. Northern Border Pipeline filed a rate proceeding with the FERC in May 1999 for, among other things, a redetermination of its allowed equity rate of return. The total annual cost of service increase due to Northern Border Pipeline's proposed changes is approximately $30 million. In June 1999, the FERC issued an order in which the proposed changes were suspended until December 1, 1999, after which the proposed changes were implemented with subsequent billings subject to refund. In June 2000, Northern Border Pipeline reached an agreement in principle with a majority of its customers and the FERC staff to settle the issues in the rate case. Terms of the settlement are confidential until a stipulation and agreement is finalized by the parties and filed with the FERC for approval. For the three month and six month periods ending June 30, 2000, respectively, Northern Border Pipeline recorded a $6.7 million and $13.5 million provision for rate refunds, which reflects the anticipated refund obligation to its customers. The provision for rate refunds is netted against operating revenues on the consolidated statement of income. While the parties in the rate case are meeting to finalize the stipulation and agreement, the Partnership can give no assurance whether it will be filed and subsequently approved by the FERC. Second Quarter 2000 Compared With Second Quarter 1999 Operating revenues, net increased $4.5 million (6%) for the second quarter of 2000, as compared to the same period in 1999, due primarily to recovery of increased operations and maintenance expense, depreciation and amortization expense and interest expense by Northern Border Pipeline. Operations and maintenance expense increased $2.1 million (17%) for the second quarter of 2000, as compared to the same period in 1999, due primarily to expenses incurred in connection with Northern Border Pipeline's pending rate case as well as increased administrative expenses for the pipeline. Depreciation and amortization expense increased $1.6 million (12%) for the second quarter of 2000, as compared to the same period in 1999, due primarily to an increase in the depreciation rate applied to Northern Border Pipeline's transmission plant from 2.0% to 2.3%. The increase in the depreciation rate was approved as part of a previous rate case settlement. Interest expense increased $2.9 million (18%) for the second quarter of 2000, as compared to the same period in 1999. Interest expense for Northern Border Pipeline increased approximately $1.8 million, due primarily to an increase in interest rates between 1999 and 2000. Interest expense for the Partnership increased approximately $1.2 million, due to additional borrowings and an increase in interest rates. The additional borrowings were made primarily for the acquisition of a 39% common membership interest and 80% of the non-voting class A shares in Bighorn Gas Gathering, L.L.C. ("Bighorn") (see Note 1 - Notes to Consolidated Financial Statements). Six Months June 30, 2000 Compared With Six Months Ended June 30, 1999 Operating revenues, net increased $7.1 million (5%) for the first half of 2000, as compared to the same period in 1999, due primarily to recovery of increased operations and maintenance expense, depreciation and amortization expense and interest expense by Northern Border Pipeline. Operations and maintenance expense increased $2.2 million (9%) for the first half of 2000, as compared to the same period in 1999, due primarily to expenses incurred in connection with Northern Border Pipeline's pending rate case as well as increased administrative expenses for the pipeline. Depreciation and amortization expense increased $3.7 million (14%) for the first half of 2000, as compared to the same period in 1999, due primarily to an increase in the depreciation rate applied to Northern Border Pipeline's transmission plant from 2.0% to 2.3%. The increase in the depreciation rate was approved as part of a previous rate case settlement. Interest expense increased $5.4 million (16%) for the first half of 2000, as compared to the same period in 1999. Interest expense for Northern Border Pipeline increased approximately $3.7 million, due primarily to an increase in interest rates between 1999 and 2000. Interest expense for the Partnership increased approximately $1.8 million, due to additional borrowings and an increase in interest rates. The additional borrowings were made primarily for the acquisition of a 39% common membership interest and 80% of the non-voting class A shares in Bighorn (see Note 1 - Notes to Consolidated Financial Statements). Other income decreased $1.8 million (59%) for the first half of 2000, as compared to the same period in 1999. The 2000 results include $1.2 million of income earned from third-party usage of capacity on Northern Border Pipeline's microwave system. The 1999 results included $3.0 million of other non-operating income. Liquidity and Capital Resources General In August 1999, Northern Border Pipeline completed a private offering of $200 million of 7.75% Senior Notes due 2009, which notes were subsequently exchanged in a registered offering for notes with substantially identical terms ("Pipeline Senior Notes"). The proceeds from the Pipeline Senior Notes were used to reduce indebtedness under a June 1997 credit agreement. In June 1997, Northern Border Pipeline entered into a credit agreement ("Pipeline Credit Agreement") with certain financial institutions. The Pipeline Credit Agreement is comprised of a term loan and a $200 million five-year revolving credit facility, both maturing in June 2002. At June 30, 2000, $429.0 million was outstanding under the term loan. No funds were outstanding under the revolving credit facility. At June 30, 2000, Northern Border Pipeline also had outstanding $250 million of senior notes issued in a private placement under a July 1992 note purchase agreement. The note purchase agreement provides for four series of notes, Series A through D, maturing between August 2000 and August 2003. The Series A Notes with a principal amount of $66 million mature in August 2000. Northern Border Pipeline anticipates borrowing on the revolving credit facility to repay the Series A Notes. In June 2000, the Partnership completed a private offering of $150 million of 8 7/8% Senior Notes due 2010 ("Partnership Senior Notes"). The Partnership also entered into a registration rights agreement with the initial purchasers in the private offering in which the Partnership agreed, among other things, to use its reasonable best efforts to exchange the Partnership Senior Notes in a registered offering for notes with substantially identical terms. In June 2000, the Partnership entered into interest rate swap agreements with an aggregate notional principal amount of $150 million. The interest rate swap agreements are scheduled to terminate in June 2010. Under the agreements, the Partnership makes payments to counterparties at variable rates based on the London Interbank Offered Rate (6.86% at June 30, 2000) and in return receives payments based on an average fixed rate of 7.64%. In June 2000, the Partnership entered into two credit agreements with certain financial institutions, a $75 million 364- day credit agreement and a $75 million three-year revolving credit agreement (collectively, "Partnership Credit Agreements"). The Partnership Credit Agreements are to be used for capital expenditures, working capital and general business purposes. Upon proper notification to and consent of the financial institutions, the maturity date of the Partnership Credit Agreements may be extended to June 2005. Prior to the termination of the Partnership Credit Agreements, the Partnership may request an increase in the commitment level to a maximum $200 million in the aggregate for both agreements. At June 30, 2000, no funds had been borrowed under the Partnership Credit Agreements. Short-term liquidity needs will be met by internal sources and through the credit facilities discussed above. Long-term capital needs may be met through the ability to issue long-term indebtedness as well as additional limited partner interests of the Partnership. Cash Flows From Operating Activities Cash flows provided by operating activities increased $9.2 million to $94.8 million for the first half of 2000, as compared to the same period in 1999, primarily due to recovery of increased depreciation and amortization expense by Northern Border Pipeline and the billings collected subject to refund related to Northern Border Pipeline's current rate proceeding (see Note 3 - Notes to Consolidated Financial Statements). Cash Flows From Investing Activities The investment in unconsolidated affiliate of $23.3 million for the first half of 2000 reflects capital contributions of $2.5 million to Bighorn for construction of gas gathering facilities and the acquisition of 80% of the non-voting class A shares in Bighorn for $20.8 million. The Partnership has agreed to make additional capital contributions to Bighorn for construction of gas gathering facilities. The Partnership's capital contributions to Bighorn are estimated to be approximately $12 million in 2000. The Partnership anticipates financing its obligations using the Partnership Credit Agreements. Capital expenditures of $4.1 million for the first half of 2000 include $2.3 million for Project 2000 (see Note 2 - Notes to Consolidated Financial Statements). For the comparable period in 1999, capital expenditures were $77.5 million and included $70.4 for The Chicago Project, which was Northern Border Pipeline's expansion and extension project placed in service in December 1998. The remaining capital expenditures for 2000 and 1999 were primarily related to renewals and replacements of Northern Border Pipeline's existing facilities. Total capital expenditures for 2000 are estimated to be $21 million, including $10 million for Project 2000. The remaining capital expenditures planned for 2000 are primarily for renewals and replacements of Northern Border Pipeline's existing facilities. Northern Border Pipeline currently anticipates funding its 2000 capital expenditures primarily by using internal sources and borrowing on its revolving credit facility. Cash Flows From Financing Activities Cash flows used in financing activities was $36.3 million for the first half of 2000 as compared to $13.3 million for the same period in 1999. Cash distributions to the unitholders and the general partners increased $2.8 million to $39.3 million reflecting an increase in the quarterly distribution from $0.61 per Unit to $0.65 per Unit. The proceeds from the private offering of the Partnership Senior Notes, net of associated debt discounts and issuance costs, totaled approximately $148.8 million. The net proceeds were used to repay the Partnership's existing indebtedness of $119.5 million and to fund the acquisition of the Bighorn class A shares of $20.8 million discussed previously. Borrowings under the Pipeline Credit Agreement decreased $50 million to $15 million for the first half of 2000 as compared to the same period in 1999. Borrowings in 1999 were used to finance a portion of the capital expenditures for The Chicago Project. Information Regarding Forward Looking Statements The statements in this Quarterly Report that are not historical information are forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward looking statements include the discussions in "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in "Notes to Consolidated Financial Statements" regarding Northern Border Pipeline's efforts to pursue opportunities to further increase its capacity and Northern Border Pipeline's efforts to finalize settlement of its rate case. Although the Partnership believes that its expectations regarding future events are based on reasonable assumptions within the bounds of its knowledge of its business, it can give no assurance that its goals will be achieved or that its expectations regarding future developments will be realized. Important factors that could cause actual results to differ materially from those in the forward looking statements herein include industry results, future demand for natural gas, availability of supplies of Canadian natural gas, political and regulatory developments that impact FERC proceedings involving Northern Border Pipeline, Northern Border Pipeline's success in sustaining its positions in such proceedings or the success of intervenors in opposing Northern Border Pipeline's positions, Northern Border Pipeline's ability to replace its rate base as it is depreciated and amortized, competitive developments by Canadian and U.S. natural gas transmission peers, political and regulatory developments in Canada, and conditions of the capital markets and equity markets. PART I. FINANCIAL INFORMATION - (Concluded) ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK NORTHERN BORDER PARTNERS, L.P. AND SUBSIDIARIES The Partnership's interest rate exposure results from the portion of its consolidated debt portfolio subject to variable rates. To mitigate potential fluctuations in interest rates, the Partnership maintains a significant portion of its consolidated debt portfolio in fixed rate debt. The Partnership also uses interest rate swap agreements to manage its level of exposure to interest rate changes. Since December 31, 1999, there has not been any material change in the Partnership's interest rate exposure. PART II. OTHER INFORMATION NORTHERN BORDER PARTNERS, L.P. AND SUBSIDIARIES ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits. 4.1 Indenture, dated as of June 2, 2000, between the registrants and Bank One Trust Company, N.A., as trustee. 4.2 Registration Rights Agreement, dated June 2, 2000, by and among the registrants and Banc of America Securities LLC, Banc One Capital Markets, Inc. and SunTrust Equitable Securities, as Initial Purchasers. 10.1 364-Day Credit Agreement dated as of June 28, 2000 between Northern Border Partners, L.P., Bank Of America, N.A., Administrative Agent, SunTrust Bank, Syndication Agent, Bank One, NA, Documentation Agent, Banc of America Securities LLC, Lead Arranger and Lenders (as defined therein). 10.2 Revolving Credit Agreement dated as of June 28, 2000 between Northern Border Partners, L.P., Bank Of America, N.A., Administrative Agent, SunTrust Bank, Syndication Agent, Bank One, NA, Documentation Agent, Banc of America Securities LLC, Lead Arranger and Lenders (as defined therein). (b) Reports on Form 8-K. None. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NORTHERN BORDER PARTNERS, L.P. (A Delaware Limited Partnership) Date: August 11, 2000 By: JERRY L. PETERS Jerry L. Peters Chief Financial and Accounting Officer EX-4.1 2 0002.txt INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES EXHIBIT 4.1 EXECUTION COPY - ------------------------------------------------------------------------------- NORTHERN BORDER PARTNERS, L.P. Issuer NORTHERN BORDER INTERMEDIATE LIMITED PARTNERSHIP Guarantor 8 7/8% SENIOR NOTES DUE 2010 8 7/8% SENIOR NOTES DUE 2010, Series A INDENTURE Dated as of June 2, 2000 BANK ONE TRUST COMPANY, N.A. Trustee - ------------------------------------------------------------------------------- CROSS-REFERENCE TABLE(1)
TRUST INDENTURE ACT SECTION INDENTURE SECTION 310 (a)(1)...................................................................................................7.09 (a)(2)...................................................................................................7.09 (a)(3)...................................................................................................N.A. (a)(4)...................................................................................................N.A. (a)(5).............................................................................................7.08; 7.09 (b)..........................................................................................7.08; 7.09; 7.10 (c)......................................................................................................N.A. 311 (a)......................................................................................................7.13 (b)......................................................................................................7.13 (c)......................................................................................................N.A. 312 (a)......................................................................................................2.05 (b).....................................................................................................10.03 (c).....................................................................................................10.03 313 (a)......................................................................................................7.15 (b)(2)...................................................................................................7.15 (c)...............................................................................................7.15, 10.02 (d)......................................................................................................7.15 314 (a)......................................................................................................4.03 (a)(4)............................................................................................4.04; 10.04 (c)(1)...................................................................................................N.A. (c)(2)...................................................................................................N.A. (c)(3)...................................................................................................N.A. (e).....................................................................................................10.05 (f)......................................................................................................N.A. 315 (a)......................................................................................................7.01 (b)......................................................................................................7.02 (c)......................................................................................................7.01 (d)......................................................................................................7.01 (e)......................................................................................................6.14 316 (a)(last sentence).......................................................................................2.09 (a)(1)(A)................................................................................................6.12 (a)(1)(B)................................................................................................6.13 (a)(2)...................................................................................................N.A. (b)......................................................................................................6.08 (c)...............................................................................................2.12; 10.14 317 (a)(1)...................................................................................................6.04 (a)(2)...................................................................................................6.04 (b)......................................................................................................2.04 318 (a).....................................................................................................10.01 (b).....................................................................................................10.01 (c).....................................................................................................10.01
N.A. means not applicable. - ---------- This Cross-Reference Table is not part of this Indenture. -i- TABLE OF CONTENTS ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE 1 SECTION 1.01 Definitions.....................................................................................1 SECTION 1.02 Incorporation by Reference of Trust Indenture Act..............................................12 SECTION 1.03 Rules of Construction..........................................................................13 ARTICLE II THE NOTES SECTION 2.01 Form and Dating................................................................................13 SECTION 2.02 Execution and Authentication...................................................................14 SECTION 2.03 Registrar and Paying Agent.....................................................................14 SECTION 2.04 Paying Agent to Hold Money in Trust............................................................15 SECTION 2.05 Holder Lists...................................................................................15 SECTION 2.06 Transfer and Exchange..........................................................................15 SECTION 2.07 Replacement Notes..............................................................................27 SECTION 2.08 Outstanding Notes..............................................................................28 SECTION 2.09 Treasury Notes.................................................................................28 SECTION 2.10 Temporary Notes................................................................................28 SECTION 2.11 Cancellation...................................................................................29 SECTION 2.12 Defaulted Interest.............................................................................29 SECTION 2.13 CUSIP Numbers..................................................................................29 ARTICLE III REDEMPTION AND PREPAYMENT SECTION 3.01 Notices to Trustee.............................................................................29 SECTION 3.02 Selection of Notes to be Redeemed..............................................................30 SECTION 3.03 Notice of Redemption...........................................................................30 SECTION 3.04 Effect of Notice of Redemption.................................................................31 SECTION 3.05 Deposit of Redemption Price....................................................................31 SECTION 3.06 Notes Redeemed in Part.........................................................................31 SECTION 3.07 Mandatory Redemption...........................................................................32
-ii- ARTICLE IV COVENANTS SECTION 4.01 Payment of Notes...............................................................................32 SECTION 4.02 Maintenance of Office or Agency................................................................32 SECTION 4.03 Reports........................................................................................33 SECTION 4.04 Statement by Officers as to Default............................................................33 SECTION 4.05 Existence......................................................................................34 SECTION 4.06 Limitations on Liens...........................................................................34 SECTION 4.07 Restriction of Sale-Leaseback Transactions.....................................................34 SECTION 4.08 Waiver of Certain Covenants....................................................................35 SECTION 4.09 Payments for Consent...........................................................................35 SECTION 4.10 Money for Note Payments to Be Held in Trust....................................................35 SECTION 4.11 Repurchase Upon a Rating Decline...............................................................36 ARTICLE V SUCCESSORS SECTION 5.01 Partnership and Guarantor May Consolidate, Etc., Only on Certain Terms.........................37 SECTION 5.02 Successor Substituted..........................................................................38 ARTICLE VI DEFAULTS AND REMEDIES SECTION 6.01 Events of Default..............................................................................38 SECTION 6.02 Acceleration of Maturity; Rescission and Annulment.............................................39 SECTION 6.03 Collection of Indebtedness and Suits for Enforcement by Trustee................................40 SECTION 6.04 Trustee May File Proofs of Claim...............................................................41 SECTION 6.05 Trustee May Enforce Claims Without Possession of Notes.........................................41 SECTION 6.06 Application of Money Collected.................................................................42 SECTION 6.07 Limitation on Suits............................................................................42 SECTION 6.08 Unconditional Right of Holders to Receive Principal, Premium, Liquidated Damages and Interest...........................................................................43 SECTION 6.09 Restoration of Rights and Remedies.............................................................43 SECTION 6.10 Rights and Remedies Cumulative.................................................................43 SECTION 6.11 Delay or Omission Not Waiver...................................................................43 SECTION 6.12 Control by Holders.............................................................................44 SECTION 6.13 Waiver of Past Defaults........................................................................44 SECTION 6.14 Undertaking for Costs..........................................................................44 SECTION 6.15 Waiver of Usury, Stay or Extension Laws........................................................45 ARTICLE VII TRUSTEE SECTION 7.01 Certain Duties and Responsibilities............................................................45
-iii- SECTION 7.02 Notice of Defaults.............................................................................46 SECTION 7.03 Certain Rights of Trustee......................................................................46 SECTION 7.04 Not Responsible for Recitals or Issuance of Notes..............................................48 SECTION 7.05 May Hold Notes.................................................................................48 SECTION 7.06 Money Held in Trust............................................................................48 SECTION 7.07 Compensation and Reimbursement.................................................................48 SECTION 7.08 Disqualification; Conflicting Interests........................................................49 SECTION 7.09 Corporate Trustee Required; Eligibility........................................................49 SECTION 7.10 Resignation and Removal; Appointment of Successor..............................................49 SECTION 7.11 Acceptance of Appointment by Successor.........................................................51 SECTION 7.12 Merger, Conversion, Consolidation or Succession to Business....................................51 SECTION 7.13 Preferential Collection of Claims Against Partnership..........................................51 SECTION 7.14 Appointment of Authenticating Agent............................................................52 SECTION 7.15 Reports by Trustee to Holders of the Notes.....................................................53 ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE SECTION 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.......................................53 SECTION 8.02 Legal Defeasance and Discharge.................................................................54 SECTION 8.03 Covenant Defeasance............................................................................54 SECTION 8.04 Conditions to Legal or Covenant Defeasance.....................................................55 SECTION 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.................................................................56 SECTION 8.06 Repayment to Partnership.......................................................................57 SECTION 8.07 Reinstatement..................................................................................57 ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER SECTION 9.01 Without Consent of Holders of Notes............................................................57 SECTION 9.02 With Consent of Holders of Notes...............................................................58 SECTION 9.03 Compliance with Trust Indenture Act............................................................59 SECTION 9.04 Revocation and Effect of Consents..............................................................60 SECTION 9.05 Notation on or Exchange of Notes...............................................................60 SECTION 9.06 Trustee to Sign Amendments, Etc. ..............................................................60 ARTICLE X MISCELLANEOUS SECTION 10.01 Trust Indenture Act Controls...............................................................60 SECTION 10.02 Notices....................................................................................60
-iv- SECTION 10.03 Communication by Holders of Notes with Other Holders of Notes..............................62 SECTION 10.04 Certificate and Opinion as to Conditions Precedent.........................................62 SECTION 10.05 Statements Required in Certificate or Opinion..............................................62 SECTION 10.06 Rules by Trustee and Agents................................................................62 SECTION 10.07 Non-Recourse to the General Partners; No Personal Liability of Directors, Officers, Employees or Partners.................................................63 SECTION 10.08 Governing Law..............................................................................63 SECTION 10.09 No Adverse Interpretation of Other Agreements..............................................63 SECTION 10.10 Successors.................................................................................63 SECTION 10.11 Severability...............................................................................63 SECTION 10.12 Counterpart Originals......................................................................63 SECTION 10.13 Table of Contents, Headings, Etc. .........................................................64 SECTION 10.14 Acts of Holders; Record Dates..............................................................64 ARTICLE XI MEETINGS OF HOLDERS OF NOTES SECTION 11.01 Purposes for Which Meetings May Be Called..................................................65 SECTION 11.02 Call, Notice and Place of Meetings.........................................................65 SECTION 11.03 Persons Entitled to Vote at Meetings.......................................................66 SECTION 11.04 Quorum; Action.............................................................................66 SECTION 11.05 Determination of Voting Rights; Conduct and Adjournment of Meetings...................................................................................66 SECTION 11.06 Counting Votes and Recording Action of Meetings............................................67 ARTICLE XII GUARANTEE OF NOTES SECTION 12.01 Unconditional Guarantee....................................................................68 SECTION 12.02 Limitation of Guarantor's Liability........................................................69 SECTION 12.03 Execution and Delivery of Guarantee........................................................70 SECTION 12.04 Addition of Guarantors.....................................................................70 SECTION 12.05 Release of Guarantee.......................................................................70 Exhibits EXHIBIT A Form of Note..................................................................................A-1 EXHIBIT B-1 Form of Certificate of Transfer.............................................................B-1-1 EXHIBIT B-2 Form of Certificate of Exchange.............................................................B-2-1 EXHIBIT C Form of Certificate to be Delivered by Institutional Accredited Investors.....................C-1 EXHIBIT D Registration Rights Agreement.................................................................D-1
-v- INDENTURE dated as of June 2, 2000 between Northern Border Partners, L.P., a Delaware limited partnership (the "Partnership"), Northern Border Intermediate Limited Partnership, a Delaware limited partnership (the "Guarantor") and Bank One Trust Company, N.A., as trustee (the "Trustee"). The Partnership, the Guarantor and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the 8 7/8% Senior Notes Due 2010 (the "Initial Notes") and the 8 7/8% Senior Notes Due 2010, Series A, issued in the Exchange Offer (the "Exchange Notes" and, together with the Initial Notes, the "Notes"): ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01 Definitions. "Acquired Debt" means, with respect to any specified Person, (i) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person including, without limitation, Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent" means any Registrar, Paying Agent or co-registrar. "Applicable Procedures" means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary that apply to such transfer or exchange. "Attributable Indebtedness" means with respect to a Sale-Leaseback Transaction, as of the time of determination, the lesser of (i) the fair market value of such assets (as determined in good faith by the Partnership Policy Committee); (ii) the present value of the total Net Amount of Rent required to be paid under the lease involved in such Sale-Leaseback Transaction during the remaining term thereof (including any renewal term exercisable at the lessee's option or period for which the lease has been extended), discounted at the rate of interest set forth or implicit in the terms of such lease or, if not practicable to determine such rate, the weighted average interest rate per annum borne by the Notes, compounded semiannually; or (iii) if the obligation with respect to the Sale-Leaseback Transaction constitutes an obligation that is required to be classified and accounted for as a Capital Lease Obligation for financial reporting purposes in accordance with GAAP, the amount equal to the capitalized amount of such obligation required to be paid by the lessee as determined in accordance with GAAP and included in the financial statements of the lessee. "Authenticating Agent" means any person authorized by the Trustee pursuant to Section 7.14 hereof to authenticate the Notes. "Authorized Newspaper" means a newspaper, in the English language or in an official language of the country of publication, customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays, and of general circulation in the place in connection with which the term is used or in the financial community of such place. Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or different newspapers in the same city meeting the foregoing requirements and in each case on any day that is a Business Day in the place of publication. "Bankruptcy Code" means Title 11, U.S. Code, as amended, or any similar federal or state law for the relief of debtors. "Business Day" means any day other than a Legal Holiday. "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP. "Capital Interests" means any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, including, without limitation, with respect to partnerships, partnership interests (whether general or limited) and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership. "Corporate Trust Office of the Trustee" shall be at the address of the Trustee specified in Section 11.02 hereof or such other address as to which the Trustee may give notice to the Partnership. "Consolidated Net Tangible Assets" means, at any date of determination, the aggregate amount of total assets included in the most recent quarterly or annual balance sheet of the Partnership and its consolidated Subsidiaries prepared in accordance with GAAP less applicable reserves reflected in such balance sheet, after deducting the following amounts: (i) all current liabilities reflected in such balance sheet; and (ii) all goodwill, trade names, trademarks, patents, unamortized debt discount and expenses and other like intangibles reflected in such balance sheet. "Currency Hedging Obligations" means, with respect to any Person, the net payment Obligations of such Person under agreements or arrangements designed to protect such Person against fluctuations in the currency exchange rates incurred or entered into in the ordinary course of its business and not for speculative purposes. -2- "Custodian" means any receiver, trustee, assignee, liquidator, sequester or similar official under the Bankruptcy Code. "Debt" means any obligation incurred, created or assumed by any Person for the repayment of money borrowed, any purchase money obligation incurred, created or assumed by such Person and any guarantee of any of the foregoing. "Default" means any event that is or with the passage of time or the giving of notice (or both) would be an Event of Default. "Definitive Note" means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, in the form of Exhibit A-1 hereto except that such Note shall not bear the Global Note Legend and shall not have the "Schedule of Exchanges of Interests in the Global Note" attached thereto. "Depositary" means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exchange Notes" means notes registered under the Securities Act that are issued under Section 2.06 hereof in exchange for the Notes pursuant to the Exchange Offer. "Exchange Offer" has the meaning set forth in the Registration Rights Agreement. "Exchange Offer Registration Statement" has the meaning set forth in the Registration Rights Agreement. "Exempted Indebtedness" means Indebtedness of which the Partnership or any of its Subsidiaries is an obligor or guarantor, or that has been assumed by the Partnership or any of its Subsidiaries, which Indebtedness is secured by a Lien (other than a Permitted Lien), or any Attributable Indebtedness of the Partnership or any of its Subsidiaries, provided that the sum of the aggregate principal amount of all such Indebtedness then outstanding (other than the Notes) so secured by a Lien (other than a Permitted Lien) and the amount of all the outstanding Attributable Indebtedness, in each case not otherwise permitted by Section 4.06 or 4.07, does not at the time such Indebtedness or Attributable Indebtedness is incurred exceed 10% of the Consolidated Net Tangible Assets of the Partnership and its Subsidiaries. "Fair Market Value" means, with respect to consideration received or to be received pursuant to any transaction by any Person, the fair market value of such consideration as determined in good faith by the Partnership Policy Committee. -3- "Financial Hedging Obligations" means, with respect to any Person, the net payment Obligations of such Person under (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements and (ii) other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency exchange rates incurred or entered into in the ordinary course of its business and not for speculative purposes. "Funded Debt" means all Debt maturing one year or more from the date of the incurrence, creation, assumption, or guarantee thereof, all Debt directly or indirectly renewable or extendable, at the option of the debtor, by its terms or by the terms of any instrument or agreement relating thereto, to a date one year or more from the date of the incurrence, creation, assumption, or guarantee thereof, and all Debt under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of one year or more. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, the statements and pronouncements of the Financial Accounting Standards Board and such other statements by such other entities as have been approved by a significant segment of the accounting profession, which are applicable at the date of determination. "General Partners" means Northern Plains Natural Gas Company, a Delaware corporation, Pan Border Gas Company, a Delaware corporation, and Northwest Border Pipeline Company, a Delaware corporation. "Global Note Legend" means the legend set forth in Section 2.06(g)(ii) hereof, which is required to be placed on all Global Notes issued under this Indenture. "Global Notes" means Global Notes, in the form of Exhibit A hereto, issued in accordance with Section 2.01, 2.06(b)(iv), 2.06(d)(iv) or 2.06(f) hereof. "Government Contract Lien" means any Lien in favor of the United States of America or any State thereof, territory or possession thereof (or the District of Columbia), or any department, agency, instrumentality or political subdivision thereof (or the District of Columbia) to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any Indebtedness incurred for the purpose of financing all or any part of the purchase price or the cost of constructing, developing or improving the property subject to such Liens. "Government Securities" means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantees or obligations the full faith and credit of the United States is pledged. "guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof or pledging assets to secure), of all or any part of any Indebtedness. -4- "Guarantor" means Northern Border Intermediate Limited Partnership and (i) each Subsidiary of the Partnership that becomes a guarantor of the Notes pursuant to Section 12.04, (ii) each Subsidiary of the Partnership that executes a supplemental indenture in which such Subsidiary agrees to be bound by Article XII and (iii) any Subsidiary of the Partnership that is a successor corporation of Northern Border Intermediate Limited Partnership or any Subsidiary of the Partnership referred to in clauses (i) and (ii). The term "Guarantor" shall not include any Subsidiary of the Partnership referred to in clauses (i) through (iii) that shall have been released from its obligations under Article XII pursuant to Section 12.05. "Hedging Obligations" means, with respect to any Person, collectively, the Currency Hedging Obligations of such Person and the Financial Hedging Obligations of such Person. "Holder" means a Person in whose name a Note is registered. "Holding Subsidiary" means a Guarantor and any Subsidiary of the Partnership which succeeds such Guarantor and which owns or controls, directly or indirectly, Capital Interests of any one or more other Subsidiaries of the Partnership. "Indebtedness" means, with respect to any Person, at any date, any of the following, without duplication: (i) any liability of such Person (A) for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), (B) evidenced by a note, bond, debenture or similar instrument, or (C) for the payment of money relating to a Capital Lease Obligation or other obligation (whether issued or assumed) relating to the deferred purchase price of property; (ii) all conditional sale obligations and all obligations under any title retention agreement (even if the rights and remedies of the seller under such agreement in the event of default are limited to repossession or sale of such property); (iii) all obligations for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit translation, other than as entered into in the ordinary course of business; (iv) all indebtedness of others secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on any asset or property (including, without limitation, leasehold interests and any other tangible or intangible property) of such Person, whether or not such indebtedness is assumed by such Person or is not otherwise such Person's legal liability in full (except obligations of others secured by Liens, neither assumed nor guaranteed by such Person nor on which it customarily pays interest, existing upon real estate or rights in or relating to real estate acquired by such Person for substation, metering station, gathering line, transmission line, transportation line, distribution line or right of way purposes, and any Liens reserved in leases for rent and for compliance with the terms of the leases in the case of leasehold estates, to the extent that any such Lien referred to in this clause (iv) does not materially impair the use of the property), the amount of such indebtedness for the purposes of this definition shall be limited to the lesser of the amount of such indebtedness secured by such Lien or the fair market value of the assets or the property securing such lien, (v) all indebtedness of others (including all interest and dividends on any Indebtedness or preferred securities of any other Person) the payment of which is guaranteed, directly or indirectly, by such Person or that is otherwise its legal liability or which such Person has agreed to purchase or repurchase or in respect of which such Person has agreed contingently to supply or advance funds; and (vi) to the extent not otherwise included in this definition, obligations in respect of Hedging Obligations. Indebtedness shall not include (a) accounts payable arising in the -5- ordinary course of business and (b) any obligations in respect of prepayments for natural gas or oil production or natural gas or oil imbalances. "Indenture" means this Indenture, as amended or supplemented from time to time. "Indirect Participant" means a Person who holds a beneficial interest in a Global Note through a Participant. "Initial Purchasers" means Banc of America Securities LLC, Banc One Capital Markets, Inc. and SunTrust Equitable Securities. "Institutional Accredited Investor" means an institution that is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) of the Securities Act. "Initial Notes" has the meaning set forth in the preamble to this Indenture. "Interest Payment Date" means June 15 and December 15. "Investment Grade" means BBB- or above, in the case of S&P (or its equivalent under any successor Rating Categories of S&P), Baa3 or above, in the case of Moody's (or its equivalent under any successor Rating Categories of Moody's), and the equivalent in respect of the Rating Categories of any Rating Agencies substituted for S&P or Moody's. "Issue Date" means the date on which the Notes are first authenticated and delivered under the Indenture. "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. "Letter of Transmittal" means the letter of transmittal to be prepared by the Partnership and sent to all Holders of the Notes for use by such Holders in connection with the Exchange Offer. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in any asset and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction). "Liquidated Damages" means all additional interest then owing pursuant to Section 5 of the Registration Rights Agreement. "Moody's" means Moody's Investors Service, Inc. and its successors. -6- "Net Amount of Rent" as to any lease for any period means the aggregate amount of rent payable by the lessee with respect to such period after excluding amounts, whether or not designated as rent or additional rent, required to be paid on account of or contingent upon maintenance and repairs, insurance, taxes, assessments, water rates and similar charges. In the case of any lease that is terminable by the lessee upon the payment of a penalty, such net amount shall be the lesser of (i) the net amount determined assuming termination of the lease on the first date such lease may be terminated (in which case such net amount shall also include the amount of such penalty, but no rent shall be considered as payable under such lease subsequent to the first date upon which it may be so terminated) or (ii) such net amount assuming no such termination. "Note Custodian" means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto. "Notes" has the meaning assigned to it in the preamble to this Indenture. "Obligations" means any principal, premium (if any), Liquidated Damages (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Partnership or its Subsidiaries whether or not a claim for post-filing interest is allowed in such proceeding), penalties, fees, charges, expenses, indemnifications, reimbursement obligations, damages (including Liquidated Damages, if any,), guarantees and other liabilities or amounts payable under the documentation governing any Indebtedness or in respect thereof. "Offering" means the offering of the Initial Notes by the Partnership. "Offering Memorandum" means the Offering Memorandum of the Partnership dated May 26, 2000 with respect to the Offering. "Officer" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial and Accounting Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person; provided, however, that an Officer with respect to a partnership shall mean an Officer of its general partner or general partners or, as applicable in the case of the Partnership, a member of its Partnership Policy Committee or equivalent governing body. "Officers' Certificate" means a certificate signed on behalf of the Partnership by two Officers of the Partnership, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Partnership, that meets the requirements of Section 10.05 hereof. "Opinion of Counsel" means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 10.05 hereof. The counsel may be an employee of or counsel to the Partnership or the Guarantor. "Participant" means, with respect to DTC, a Person who has an account with DTC. -7- "Participating Broker-Dealer" has the meaning set forth in the Registration Rights Agreement. "Partnership" means the Person named as the "Partnership" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Partnership" shall mean such successor Person. "Partnership Policy Committee" means the committee that oversees management of the Partnership. "Partnership Request" or "Partnership Order" means a written request or order signed in the name of the Partnership by a member of the Partnership Policy Committee or the chief executive officer or the chief financial and accounting officer of the Partnership, and delivered to the Trustee, or if the Partnership shall change its form of entity to other than a limited partnership, by Persons or officers, members, agents and the like positions comparable to those of the foregoing nature, as applicable. "Paying Agent" means any Person authorized by the Partnership to pay the principal of or any premium, interest or Liquidated Damages on the Notes on behalf of the Partnership. "Permitted Liens" means, with respect to any Person: (i) with respect to the Notes issued under this Indenture, Liens existing on or provided for under the terms of agreements existing on the date the Notes are issued; (ii) Liens on property, shares of stock, Indebtedness or other assets of any Person (which is not a Subsidiary) existing at the time such Person is merged into or consolidated with or into the Partnership or any of its Subsidiaries; provided that such Liens are not incurred in anticipation of such Person becoming a Subsidiary; or Liens existing at the time of a sale, lease or other disposition of properties of a Person as an entirety or substantially as an entirety to the Partnership or any of its Subsidiaries; (iii) Liens on property, shares of stock, Indebtedness or other assets existing at the time of acquisition thereof by the Partnership or any of its Subsidiaries, or Liens to secure all or part of the purchase price thereof; (iv) Liens on property, shares of stock, indebtedness for borrowed money, or other assets to secure any Indebtedness incurred prior to, at the time of or within 24 months after, the latest of the acquisition thereof or, in the case of property, the completion of construction, the completion of development or improvements or the commencement of commercial operation of such property for the purpose of financing all or part of the purchase price thereof, such construction or the making of such developments or improvements; (v) Liens securing Indebtedness owed to the Partnership or any of its Subsidiaries; -8- (vi) Liens on property to secure all or part of the cost of acquiring, constructing, altering, improving, developing or repairing any property or asset, or improvements used in connection with that property or Liens incurred by the Partnership or any of its Subsidiaries to provide funds for any such activities; (vii) Government Contract Liens; (viii) Liens on any property to secure bonds for the construction, installation or financing of pollution control or abatement facilities or other forms of industrial revenue bond financing, or indebtedness issued or guaranteed by the United States, any state or any department, agency or instrumentality thereof; (ix) Liens contemplated by Section 7.07 hereof; (x) Liens deemed to exist by reason of negative pledges in respect of Indebtedness; and (xi) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements), as a whole or in part, of any Indebtedness secured by any Lien referred to in clauses (i) through (x) above; provided, however, that such Lien(s) shall not extend to any property of the Partnership or any of its Subsidiaries, as the case may be, other than the property specified in clauses (i) through (x) above to which the Lien securing such refinanced, refunded, extended, renewed or replaced Indebtedness applied and improvements thereto or proceeds therefrom. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, limited liability company, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Place of Payment", when used with respect to the Notes, means, unless otherwise specifically provided in notice given pursuant to Section 4.02 hereof, the office or agency of the Partnership in the City of New York and such other place or places where, the principal of and any premium, interest and Liquidated Damages, if any, on the Notes are payable. "Private Placement Legend" means the legend set forth in Section 2.06(g)(i) hereof to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture. "Proceeding" means any voluntary or involuntary insolvency, bankruptcy, receivership, custodianship, liquidation, dissolution, reorganization, assignment for the benefit of creditors, appointment of a custodian, receiver, trustee or other officer with similar powers or any other proceeding for the liquidation, dissolution or other winding up of a Person (including, without limitation, any such proceeding under Bankruptcy Code). "Property" means any right or interest of the Partnership or any of its Subsidiaries in and to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible. -9- "Purchase Agreement" means the Purchase Agreement dated May 26, 2000 among the Partnership and the Initial Purchasers (as defined therein.) "QIB" means a "qualified institutional buyer" as defined in Rule 144A of the rules and regulations promulgated by the SEC under the Securities Act. "Rating Agencies" means (a) S&P and Moody's or (b) if S&P or Moody's or both of them are not making ratings of the notes publicly available, a nationally recognized U.S. rating agency or agencies, as the case may be, selected by the Partnership, which will be substituted for S&P or Moody's or both, as the case may be. "Rating Categories" means: (a) with respect to S&P, any of the following categories (any of which may include a "+" or "-"): AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor categories); (b) with respect to Moody's, any of the following categories (any of which may include a "1," "2" or "3"): Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories); and (c) the equivalent of any such categories of S&P or Moody's used by another Rating Agency, if applicable. "Rating Decline" means the assignment by any Rating Agency of a rating to the Notes that is below Investment Grade. "Redemption Date" means the date on which the Notes are to be redeemed pursuant to Article III, hereof. "Registration Rights Agreement" means the Registration Rights Agreement, dated as of June 2, 2000 by and among the Partnership and the other parties named on the signature pages thereof, attached hereto as Exhibit D, as such agreement may be amended, modified or supplemented from time to time. "Responsible Officer," when used with respect to the Trustee, means any officer, including, without limitation, any vice president, assistant vice president, assistant treasurer or secretary within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer or employee to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Definitive Note" means a Definitive Note bearing the Private Placement Legend. "Restricted Global Note" means a Global Note bearing the Private Placement Legend. -10- "Rule 144" means Rule 144 promulgated under the Securities Act. "Rule 144A" means Rule 144A promulgated under the Securities Act. "Rule 144A Global Note" means the Global Note in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A. "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors. "Sale-Leaseback Transaction" means any arrangement with any Person pursuant to which the Partnership or any of its Subsidiaries leases any Property that has been or is to be sold or transferred by the Partnership or its Subsidiaries to such Person, other than (i) any such transaction involving a lease for a term of not more than two years, (ii) any such transaction between the Partnership and any of its Subsidiaries or between any Subsidiaries of the Partnership, and (iii) any such transaction executed by the time of, or within 12 months after the latest of, the acquisition, the completion of construction, development or improvement, or the commencement of commercial operation of the Partnership's assets subject to such leasing transaction. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended. "Shelf Registration Statement" has the meaning set forth in the Registration Rights Agreement. "Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Indenture. "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof. "Subordinated Indebtedness" means any Indebtedness of the Partnership which is subordinated in right of payment to the Notes. "Subsidiary" of any Person means (i) any Person of which at the time of such determination more than 50% of the total voting power of Capital Interests entitled (without regard to the occurrence of any contingency to vote in the election of directors, managers or trustees thereof (or other Persons constituting an equivalent governing body)) is owned or controlled, directly or indirectly, by such Person or one or more of the Subsidiaries of such Person (or a combination -11- thereof), (ii) in the case of a partnership, any Person of which at the time of such determination more than 50% of the partners' Capital Interests (considering all partners' Capital Interests as a single class) is owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person, or (iii) any other Person in which such Person or one or more of the Subsidiaries of that Person (or a combination thereof) has the power to control by contract or otherwise the board of directors, managers or trustees thereof or equivalent governing body or otherwise controls such entity. Unless otherwise provided, references in this Indenture to a Subsidiary are to a Subsidiary of the Partnership. "TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939 as in effect on the date on which this Indenture is qualified under the TIA. "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder. "Unrestricted Definitive Note" means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend. "Unrestricted Global Note" means a permanent global Note in the form of Exhibit A-1 attached hereto that bears the Global Note Legend and that has the "Schedule of Exchanges of Interests in the Global Note" attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing a series of Notes that do not and are not required to bear the Private Placement Legend. Other Definitions
DEFINED IN TERM SECTION - -------------------------------------------------------------------------------- ---------- "Covenant Defeasance"........................................................... 8.03 "DTC"........................................................................... 2.03 "Event of Default".............................................................. 6.01 "Legal Defeasance".............................................................. 8.02 "Paying Agent".................................................................. 2.03 "Registrar"..................................................................... 2.03
SECTION 1.02 Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "indenture securities" means the Notes; "indenture security holder" means a Holder of a Note; -12- "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; and "obligor" on the Notes means the Partnership and any successor obligor upon the Notes. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them. SECTION 1.03 Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) words in the singular include the plural, and in the plural include the singular; provisions apply to successive events and transactions; and (5) references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time. ARTICLE II THE NOTES SECTION 2.01 Form and Dating. The Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $1,000 and integral multiples thereof. The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Partnership and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling. Notes issued in global form shall be substantially in the form of Exhibit A attached hereto (including the Global Note Legend and the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Note -13- Legend and without the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee, the Depositary or the Note Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof. SECTION 2.02 Execution and Authentication. One Officer shall sign the Notes for the Partnership by manual or facsimile signature. If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid. A Note shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture. The Trustee shall, upon a written order of the Partnership signed by one Officer, authenticate Notes for original issue on the Issue Date up to $150,000,000 aggregate principal amount of the Notes. This series of Notes may be reopened for issuances of additional Notes without the consent of Holders, provided that no additional Notes may be issued if an Event of Default has occurred and is continuing with respect to the Notes. The Trustee may appoint an Authenticating Agent acceptable to the Partnership to authenticate Notes. An Authenticating Agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An Authenticating Agent has the same rights as an Agent to deal with (i) Holders or (ii) an Affiliate of the Partnership. SECTION 2.03 Registrar and Paying Agent. The Partnership shall maintain an office or agency within the City and State of New York where Notes may be presented for registration of transfer or for exchange ("Registrar") and an office or agency where Notes may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Partnership may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional paying agent. The Partnership may change any Paying Agent or Registrar without notice to any Holder. The Partnership shall promptly notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Partnership fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Partnership or any of its Subsidiaries may act as Paying Agent or Registrar. The Partnership initially appoints The Depository Trust Company ("DTC") to act as Depositary with respect to the Global Notes. The Partnership initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Note Custodian with respect to the Global Notes. -14- SECTION 2.04 Paying Agent to Hold Money in Trust. The Partnership shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, or Liquidated Damages, if any, or interest on the Notes, and will notify the Trustee of any default by the Partnership in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Partnership at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Partnership or a Subsidiary) shall have no further liability for the money. If the Partnership or an Affiliate of the Partnership acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Partnership, the Trustee shall serve as Paying Agent for the Notes. SECTION 2.05 Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Partnership shall provide to a Responsible Officer of the Trustee at least seven Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Partnership shall otherwise comply with TIA Section 312(a). SECTION 2.06 Transfer and Exchange. (a) Transfer and Exchange of Global Notes. A Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Partnership for Definitive Notes if (i) the Partnership delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary for the Global Notes or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Partnership within 90 days after the date of such notice from the Depositary or (ii) the Partnership in its sole discretion notifies the Trustee in writing that it elects to cause issuance of the Notes in certificated form. If an Event of Default occurs and is continuing, the Partnership shall, at the request of the Holder thereof, exchange all or part of a Global Note for one or more Definitive Notes in denominations of $1000 or multiples thereof. Upon the occurrence of either of the preceding events in (i) or (ii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.11 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to Section 2.07 or 2.11 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a), however, beneficial interests in a Global Note may be transferred and -15- exchanged as provided in Section 2.06(b), (c) or (f) hereof. Notwithstanding anything in this Section 2.06 to the contrary, no Notes shall be transferred or exchanged for a period of 15 days prior to a selection of Notes to be redeemed pursuant to Article 3. (b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs as applicable: (i) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend. Beneficial interests in any Unrestricted Global Note may be transferred only to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i). (ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests (other than a transfer of a beneficial interest in a Global Note to a Person who takes delivery thereof in the form of a beneficial interest in the same Global Note), the transferor of such beneficial interest must deliver to the Registrar (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above. Upon an Exchange Offer by the Partnership in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture, the Notes and otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof. -16- (iii) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of clause (ii) above and the transferor delivers to the Registrar a certificate in the form of Exhibit B hereto, including the certifications in Item (1) thereof. (iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in the Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of clause (ii) above and: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Partnership; (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in Item (1) thereof; (2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in Item (4) thereof; and (3) in each such case set forth in this subparagraph (D), an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are not required in order to maintain compliance with the Securities Act. -17- If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Partnership shall issue and, upon receipt of an authentication order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above. Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note. (c) Transfer or Exchange of Beneficial Interests for Definitive Notes. (i) If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon receipt by the Registrar of the following documentation: (A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in Item (2) thereof; (B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in Item (1) thereof; (C) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in Item (3)(a) thereof; (D) if such beneficial interest is being transferred pursuant to any other exemption (including a beneficial interest being transferred to an Institutional Accredited Investor) from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by Item (3) thereof, if applicable; (E) if such beneficial interest is being transferred to the Partnership or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in Item (3)(b) thereof; or (F) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in Item (3)(c) thereof, the Trustee, upon notice of receipt of such documentation by the Registrar, shall cause the aggregate principal amount of the applicable Global Note to be reduced -18- accordingly pursuant to Section 2.06(h) hereof, and the Partnership shall execute and the Trustee shall authenticate and make available for delivery to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall make available for delivery such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein. (ii) Notwithstanding Section 2.06(c)(i) hereof, a holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Partnership; (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit C hereto, including the certifications in Item (2) thereof; (2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit B hereto, including the certifications in Item (4) thereof; and -19- (3) in each such case set forth in this subparagraph (D), an Opinion of Counsel in form reasonably acceptable to the Partnership, to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are not required in order to maintain compliance with the Securities Act. (iii) If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Partnership shall execute and the Trustee shall authenticate and make available for delivery to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall make available for delivery such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shall not bear the Private Placement Legend. A beneficial interest in an Unrestricted Global Note cannot be exchanged for a Definitive Note bearing the Private Placement Legend or transferred to a Person who takes delivery thereof in the form of a Definitive Note bearing the Private Placement Legend. (d) Transfer and Exchange of Definitive Notes for Beneficial Interests. (i) If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation: (A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in Item (6) thereof; (B) if such Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in Item (1) thereof; (C) if such Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in Item (3)(a) thereof; -20- (D) if such Definitive Note is being transferred to an Institutional Accredited Investor or in reliance on any other exemption from the registration requirements of the Securities Act, in either case, other than those listed in subparagraphs (B) and (C) above, a certificate in the form of Exhibit B hereto, including certifications, certificates, and any Opinion of Counsel required by Item (3) thereof, if applicable; (E) if such Definitive Note is being transferred to the Partnership or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in Item (3)(b) thereof; or (F) if such Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in Item (3)(c) thereof, the Trustee, upon notice of receipt of such documentation by the Registrar, shall cancel the Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of subparagraph (A) above, the appropriate Restricted Global Note and, in the case of subparagraph (B) above, the Rule 144A Global Note. (ii) A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Partnership; (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in Item (4) thereof; -21- (2) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in Item (4) thereof; and (3) in each such case set forth in this subparagraph (D), an Opinion of Counsel in form reasonably acceptable to the Partnership to the effect that such exchange or transfer is in compliance with the Securities Act, that the restrictions on transfer contained herein and in the Private Placement Legend are not required in order to maintain compliance with the Securities Act, and such Definitive Notes are being exchanged or transferred in compliance with any applicable blue sky securities laws of any State of the United States. Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. (iii) A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. (iv) If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Partnership shall issue and, upon receipt of an authentication order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of beneficial interests transferred pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above. (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by his attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, pursuant to the provisions of this Section 2.06(e). (i) Restricted Definitive Notes may be transferred to and registered in the name of Persons who take delivery thereof if the Registrar receives the following: -22- (A) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in Item (1) thereof; or (B) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by Item (3) thereof, if applicable. (ii) Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Partnership; (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in Item (4) thereof; (2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in Item (4) thereof; and (3) in each such case set forth in this subparagraph (D), an Opinion of Counsel in form reasonably acceptable to the Partnership to the effect that such exchange or transfer is in compliance with the Securities Act, that the restrictions on transfer contained herein and in the Private Placement Legend are not required in order to maintain compliance with the Securities Act, and such Restricted Definitive Note is being exchanged or transferred in compliance with any applicable blue sky securities laws of any State of the United States. -23- (iii) A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request for such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof. Unrestricted Definitive Notes cannot be exchanged for or transferred to Persons who take delivery thereof in the form of a Restricted Definitive Note. (f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Partnership shall issue and, upon receipt of (A) an authentication order in accordance with Section 2.02 hereof and (B) an Opinion of Counsel opining as to the enforceability of the Exchange Notes and the guarantees thereof, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by persons that are not (x) broker-dealers, (y) Persons participating in the distribution of the Exchange Notes or (z) Persons who are affiliates (as defined in Rule 144) of the Partnership and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer. Concurrent with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Partnership shall execute and the Trustee shall authenticate and make available for delivery to the Persons designated by the Holders of Definitive Notes so accepted Definitive Notes in the appropriate principal amount. (g) Legends. The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture. (i) Private Placement Legend. (A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form: "THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR (B) IT IS AN INSTITUTIONAL "ACCREDITED -24- INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI")), (2) AGREES THAT IT WILL NOT RESELL, OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO NORTHERN BORDER PARTNERS, L.P. OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (D) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE WITH A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE TRANSFER AGENT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO NORTHERN BORDER PARTNERS, L.P.), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING." (B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(iv), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend. (ii) Global Note Legend. Each Global Note shall bear a legend in substantially the following form: -25- UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. THE DEPOSITORY TRUST COMPANY SHALL ACT AS THE DEPOSITARY UNTIL A SUCCESSOR SHALL BE APPOINTED BY THE COMPANY AND THE REGISTRAR. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. (h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note, by the Trustee, the Note Custodian or the Depositary at the direction of the Trustee, to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note, by the Trustee, the Note Custodian or by the Depositary at the direction of the Trustee, to reflect such increase. (i) General Provisions Relating to Transfers and Exchanges. (i) To permit registrations of transfers and exchanges, the Partnership shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon the Partnership's order or at the Registrar's request. (ii) No service charge shall be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Partnership may require payment of a sum sufficient to cover any transfer -26- tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06 and 9.05 hereof). (iii) The Registrar shall not be required to register the transfer or exchange of any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part. (iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Partnership, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange. (v) The Partnership shall not be required (A) to issue, to register the transfer of or to exchange Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a record date and the next succeeding Interest Payment Date. (vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Partnership may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Partnership shall be affected by notice to the contrary. (vii) The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof. (viii) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a transfer or exchange may be submitted by facsimile. SECTION 2.07 Replacement Notes. If any mutilated Note is surrendered to the Trustee or the Partnership and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Partnership shall issue and the Trustee, upon the written order of the Partnership signed by two Officers of the Partnership, shall authenticate a replacement Note if the Trustee's requirements are met. If required by the Trustee or the Partnership, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Partnership to protect the Partnership, the Trustee, any Agent and any Authenticating Agent from any loss that any of them may suffer if a Note is replaced. The Partnership may charge for its expenses in replacing a Note. -27- Every replacement Note is an additional obligation of the Partnership and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder. SECTION 2.08 Outstanding Notes. The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Partnership or an Affiliate of the Partnership holds the Note. If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser. If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest and Liquidated Damages, if any, on it cease to accrue. If the Paying Agent (other than the Partnership, a Subsidiary or an Affiliate of any thereof) holds, on a Redemption Date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest and Liquidated Damages, if any. SECTION 2.09 Treasury Notes. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Partnership, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Partnership, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. SECTION 2.10 Temporary Notes. Until Definitive Notes are ready for delivery, the Partnership may prepare and the Trustee shall authenticate temporary Notes upon a written order of the Partnership signed by two Officers of the Partnership. Temporary Notes shall be substantially in the form of Definitive Notes but may have variations that the Partnership considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Partnership shall prepare and the Trustee shall authenticate Definitive Notes in exchange for temporary Notes. Holders of temporary Notes shall be entitled to all of the benefits of this Indenture. -28- SECTION 2.11 Cancellation. The Partnership at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall return such canceled Notes to the Partnership upon the Partnership's written request. The Partnership may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation. SECTION 2.12 Defaulted Interest. If the Partnership defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent record date, in each case at the rate provided in the Notes. The Partnership shall promptly notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Partnership shall fix or cause to be fixed each such record date and payment date, provided that no such record date shall be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the record date, the Partnership (or, upon the written request of the Partnership, the Trustee in the name and at the expense of the Partnership) shall mail or cause to be mailed to Holders a notice that states the record date, the related payment date and the amount of such interest to be paid. SECTION 2.13 CUSIP Numbers. The Partnership in issuing the Notes may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Partnership will promptly notify the Trustee of any change in the "CUSIP" numbers. ARTICLE III REDEMPTION AND PREPAYMENT SECTION 3.01 Notices to Trustee. The Partnership may elect to redeem Notes in whole or in part, provided, however, that it shall furnish to the Trustee, at least 30 days but not more than 60 days before a Redemption Date, an Officers' Certificate setting forth (i) the Redemption Date, (ii) the principal amount of Notes to be redeemed and (iii) the redemption price. -29- SECTION 3.02 Selection of Notes to be Redeemed. If less than all of the Notes are to be redeemed at any time, selection of Notes for redemption shall be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or in accordance with any other method the Trustee considers fair and appropriate; provided that no Notes of $1,000 or less shall be redeemed in part. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the Redemption Date by the Trustee from the outstanding Notes not previously called for redemption. The Trustee shall promptly notify the Partnership in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. SECTION 3.03 Notice of Redemption. At least 30 days but not more than 60 days before a Redemption Date, the Partnership shall mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address. The notice shall identify the Notes (including CUSIP numbers) to be redeemed and shall state (a) the Redemption Date; (b) the redemption price as computed in accordance with the terms of the Notes; (c) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the Redemption Date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note; (d) the name and address of the Paying Agent; (e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; (f) that, unless the Partnership defaults in making such redemption payment, interest and Liquidated Damages, if any, on Notes called for redemption cease to accrue on and after the Redemption Date; (g) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and -30- (h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes. At the Partnership's request, the Trustee shall give the notice of redemption in the Partnership's name and at its expense; provided, however, that the Partnership shall have delivered to the Trustee, at least 30 days prior to the Redemption Date, an Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. SECTION 3.04 Effect of Notice of Redemption. Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the Redemption Date at the redemption price. A notice of redemption may not be conditional. SECTION 3.05 Deposit of Redemption Price. No later than 10:00 a.m. New York City Time on the Redemption Date, the Partnership shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price (as calculated in accordance with the terms of the Notes) of and accrued interest and Liquidated Damages, if any, on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Partnership any money deposited with the Trustee or the Paying Agent by the Partnership in excess of the amounts necessary to pay the redemption price of, and accrued interest and Liquidated Damages, if any, on, all Notes to be redeemed. If the Partnership complies with the provisions of the preceding paragraph, on and after the Redemption Date, interest, and Liquidated Damages, if any, shall cease to accrue on the Notes or the portions of Notes called for redemption. If a Note is redeemed on or after an interest record date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest and Liquidated Damages, if any, shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Partnership to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the Redemption Date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof. SECTION 3.06 Notes Redeemed in Part. Upon surrender of a Note that is redeemed in part, the Partnership shall issue and, upon the Partnership's written request, the Trustee shall authenticate for the Holder at the expense of the Partnership a new Note equal in principal amount to the unredeemed portion of the Note surrendered. -31- EXHIBIT 4.1 SECTION 3.07 Mandatory Redemption The Partnership shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes. ARTICLE IV COVENANTS SECTION 4.01 Payment of Notes. The Partnership shall pay or cause to be paid the principal of, premium, if any, and interest and Liquidated Damages, if any, on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, interest and Liquidated Damages, if any, shall be considered paid on the date due if the Paying Agent, if other than the Partnership or a Subsidiary thereof, holds as of 10:00 a.m. New York City Time on the due date money deposited by the Partnership in immediately available funds and designated for and sufficient to pay all principal, premium, if any, interest and Liquidated Damages, if any, then due. The Partnership shall pay all Liquidated Damages, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement. The Partnership shall pay interest (including post-petition interest in any proceeding under the Bankruptcy Code) on overdue principal at the rate borne on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under the Bankruptcy Code) on overdue installments of interest and Liquidated Damages, if any, (without regard to any applicable grace period) at the same rate to the extent lawful. SECTION 4.02 Maintenance of Office or Agency. The Partnership shall maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Partnership in respect of the Notes and this Indenture may be served. The Partnership shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Partnership shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Partnership may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Partnership of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York for such purposes. The Partnership shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. -32- The Partnership hereby designates the office of the Trustee at 14 Wall Street, 8th floor, New York, New York 10005, as one such office or agency of the Partnership in accordance with Section 2.03 hereof. SECTION 4.03 Reports. (a) The Partnership, pursuant to Section 314(a) of the Trust Indenture Act, shall: (i) For as long as the Partnership is required to file information with the SEC pursuant to the Exchange Act, file with the Trustee, within 15 days after the Partnership is required to file with the SEC, copies of the annual reports and of the information, documents and other reports which the Partnership may be required to file with the SEC pursuant to the Exchange Act; or if the Partnership is not required to file information with the SEC pursuant to the Exchange Act, file with the Trustee and the SEC in accordance with rules and regulations prescribed from time to time by the SEC any supplementary and periodic information, documents and reports which may be required pursuant to the Exchange Act, in respect of a security listed and registered on a national securities exchange as may be prescribed in such rules and regulations. (ii) Transmit within 30 days after the filing thereof with the Trustee, in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act, such summaries of any information, documents and reports required to be filed by the Partnership pursuant to paragraph (i) of this Section as may be required by rules and regulations prescribed from time to time by the SEC. (b) For so long as any Initial Notes remain outstanding, the Partnership shall furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. (c) Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Partnership's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). SECTION 4.04 Statement by Officers as to Default. The Partnership will deliver to the Trustee, within 150 days after the end of each fiscal year of the Partnership ending after the date hereof, an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof the Partnership or the Guarantor is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Partnership or the Guarantor shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. -33- SECTION 4.05 Existence. Subject to Article 5, the Partnership will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the Partnership shall not be required to preserve any such right or franchise if it shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Partnership. SECTION 4.06 Limitations on Liens. The Partnership will not, nor will it permit any Subsidiary of the Partnership to, issue, create, assume or guarantee any Indebtedness of the character specified in clause (i)(A) of the definition of the term "Indebtedness" secured by a Lien upon any Property or upon any Capital Interests or indebtedness of any Subsidiary that owns or leases any Property (whether such Property, Capital Interests or Indebtedness is existing or owned on the date of this Indenture or is hereafter created or acquired), without in any such case making effective provision whereby all of the Notes outstanding hereunder shall be secured equally and ratably with, or prior to, such Indebtedness so long as such Indebtedness shall be so secured. This restriction shall not apply to (1) any Permitted Lien and (2) any Lien securing Exempted Indebtedness. SECTION 4.07 Restriction of Sale-Leaseback Transactions. The Partnership will not, nor will it permit any Subsidiary to, engage in a Sale-Leaseback Transaction with respect to any Property unless: (i) the Partnership or such Subsidiary, as the case may be, would be entitled to incur Indebtedness of the character specified in clause (i)(A) of the definition of the term "Indebtedness" secured by a Lien on the Property to be leased pursuant to such Sale-Leaseback Transaction in a principal amount at least equal to the Attributable Indebtedness with respect to such Sale-Leaseback Transaction without securing the Notes pursuant to Section 4.06; or (ii) within a one-year period after the effective date of such Sale-Leaseback Transaction, the Partnership or such Subsidiary applies or causes to be applied an amount equal to not less than the Attributable Indebtedness of such Sale-Leaseback Transaction to (a) the voluntary defeasance or the repayment, redemption or retirement of the Notes or other Indebtedness of the Partnership or any Subsidiary of the character specified in clause (i)(A) of the definition of the terms "Indebtedness" that matures more than one year after the creation of such Indebtedness, (b) the acquisition, construction, development or improvement of any Property used or useful in the business of the Partnership or any of its Subsidiaries, or (c) any combination of applications referred to sub-clauses (a) and (b) of this clause (ii). -34- SECTION 4.08 Waiver of Certain Covenants. The Partnership may omit in any particular instance to comply with any term, provision or condition set forth in Section 4.05, 4.06 or 4.07 with respect to the Notes or any negative covenant with respect to the Notes contained in resolutions of the Partnership Policy Committee, Officers' Certificate or supplemental indenture authorizing the Notes if before the time for such compliance the Holders of at least a majority in aggregate principal amount of the Notes (voting as one class) shall, by act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Partnership and the Guarantor and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. A waiver which changes or eliminates any term, provision or condition of this Indenture which has expressly been included solely for the benefit of the Holders, or which modifies the rights of the Holders with respect to such term, provision or condition, shall be deemed not to affect the rights under this Indenture of the Holders. SECTION 4.09 Payments for Consent. The Partnership will not, and will not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to or for the benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid and is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. SECTION 4.10 Money for Note Payments to Be Held in Trust. If the Partnership shall at any time act as its own Paying Agent with respect to the Notes, it will, on or before each due date of the principal of, premium, if any, or Liquidated Damages, if any, or interest on the Notes, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal of, premium, if any, and Liquidated Damages, if any, and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act. Whenever the Partnership shall have one or more Paying Agents for the Notes, it will, on or prior to each due date of the principal of, premium, if any, or Liquidated Damages, if any, or interest on the Notes, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Partnership will promptly notify the Trustee of its action or failure so to act. The Partnership will cause each Paying Agent for the Notes other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (1) hold all sums held by it for the payment of the principal of (and premium, if any), Liquidated Damages, if any, or interest, if any, -35- on the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (2) give the Trustee notice of any default by the Partnership (or any other obligor upon the Notes) in the making of any payment of principal (and premium, if any), Liquidated Damages, if any, or interest, if any, on the Notes; and (3) during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Notes. The Partnership may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Partnership Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Partnership or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Partnership or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Partnership, in trust for the payment of the principal of or any premium, Liquidated Damages, if any, or interest on any of the Notes and remaining unclaimed for two years after such principal, premium, if any, or Liquidated Damages, if any, or interest has become due and payable shall be paid to the Partnership on Partnership Request, or (if then held by the Partnership) shall be discharged from such trust; and the Holder of such Notes shall thereafter, as an unsecured general creditor, look only to the Partnership for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Partnership as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Partnership cause to be published once, in an Authorized Newspaper in each Place of Payment with respect to the Notes, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Partnership. SECTION 4.11 Repurchase Upon a Rating Decline. (a) If a Rating Decline occurs and an Investment Grade rating has not been reinstated within 40 days after such occurrence, the Partnership shall make an offer (a "Rating Decline Offer") to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at an offer price in cash equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the date of repurchase (the "Rating Decline Payment"). Within 10 days following any Rating Decline, the Partnership shall mail an initial notice to each Holder and the Trustee stating a Rating Decline has occurred and a repurchase of the Notes by the Partnership may be required. If within 30 days following such initial notice, the Rating Agency or Agencies which downgraded the Notes shall have failed to reinstate an Investment Grade rating to the Notes, then the Partnership shall, on the 40th day following such Rating Decline, mail a subsequent notice to each Holder with a copy to the Trustee stating that: (1) an Investment Grade rating of the Notes has not been reinstated and that such Holder has the right to require the Partnership to repurchase such Holder's notes at a repurchase price in cash equal to 100% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the date of repurchase (the "Repurchase Date"); (2) the Repurchase Date, which shall be a -36- Business Day and be not earlier than 30 days or later than 60 days from the date the initial notice is mailed; (3) interest on any Note not tendered will continue to accrue; (4) interest on any Note accepted for payment in a Rating Decline Offer shall cease to accrue after the Repurchase Date; (5) Holders electing to have a note purchased will be required to surrender the Note with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Repurchase Date; (6) Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the third Business Day, or such shorter periods as may be required by applicable law, preceding the repurchase date, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of notes the Holder delivered for purchase, and a statement that such Holder is withdrawing his election to have such Notes purchased; and (7) Holders which elect to have their notes purchased only in part will be issued new Notes in a principal amount equal to the unpurchased portion of the Notes surrendered. If any of the Notes subject to a Rating Decline Offer are in the form of a Global Note, then the Partnership shall modify such notice to the extent necessary to accord with the procedures of the Depositary applicable to repurchases. Further, the Partnership and the Guarantor shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes in accordance with this Section 4.11. (b) On or before 10:00 a.m. New York time on the Repurchase Date, the Partnership shall, to the extent lawful, (a) accept for payment all Notes or portions thereof properly tendered pursuant to the Rating Decline Offer, (b) deposit with the Paying Agent an amount equal to the Rating Decline Payment in respect of all Notes or portions thereof so tendered and (c) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Partnership. The Paying Agent shall promptly mail to each holder of Notes so tendered the Rating Decline Payment for such Notes, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided, however, that each such new Note will be in a principal amount of $1,000 or an integral multiple thereof. The Partnership shall publicly announce the results of the Rating Decline Offer on or as soon as practicable after the Repurchase Date. ARTICLE V SUCCESSORS SECTION 5.01 Partnership and Guarantor May Consolidate, Etc., Only on Certain Terms. Except as provided in Section 5.02, neither the Partnership nor the Guarantor shall merge, amalgamate or consolidate with or into any other Person (other than a merger or amalgamation with any Subsidiary of the Partnership or the Guarantor, as the case may be, in which the Partnership or the Guarantor is the surviving entity) or sell, convey, lease, transfer or otherwise dispose of its -37- properties and assets as, or substantially as, an entirety to, any Person, whether in a single transaction or series of related transactions, unless: (a) (A) in the case of a merger, the Partnership or the Guarantor, as the case may be, is the surviving entity, or (B) the Person formed by such consolidation or amalgamation or into which the Partnership or the Guarantor is merged or amalgamated or the Person which acquires by sale, conveyance, transfer or disposition, or which leases, all or substantially all of the properties and assets of the Partnership or the Guarantor (i) is an entity organized under the laws of the United States, a state thereof or the District of Columbia, or Canada or a province thereof and (ii) shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, the due and punctual payment of the principal of, premium, if any, and Liquidated Damages, if any, and interest on all the Notes and the performance or observance of every other covenant and condition of this Indenture on the part of the Partnership or the Guarantor, as the case may be, to be performed or observed; (b) immediately before and immediately after giving effect to such transaction, no Default or Event of Default has occurred and is continuing; and (c) the Partnership has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such merger, amalgamation, consolidation, sale, conveyance, transfer, lease or other disposition and the supplemental indenture required in connection with such transaction, if any, comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. SECTION 5.02 Successor Substituted. Upon any consolidation of the Partnership or the Guarantor with, or merger of the Partnership or Guarantor into, any other Person or any sale, transfer, lease or other disposition of the properties and assets of the Partnership or the Guarantor as, or substantially as, an entirety in accordance with Section 5.01, the successor Person formed by such consolidation or into which the Partnership or the Guarantor is merged or to which such sale, transfer, lease or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Partnership or the Guarantor under this Indenture with the same effect as if such successor Person had been named originally as the Partnership or Guarantor herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Notes. ARTICLE VI DEFAULTS AND REMEDIES SECTION 6.01 Events of Default. "Event of Default", wherever used herein with respect to the Notes, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary -38- or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (a) default in the payment of any interest or any Liquidated Damages upon the Notes when it becomes due and payable, and continuance of such default for a period of 30 days; or (b) default in the payment of the principal of (or premium, if any, on), the Notes at their Stated Maturity; or (c) default in the performance, or breach, of any term, covenant or warranty of the Partnership or the Guarantor in this Indenture, and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Partnership or the Guarantor by the Trustee or to the Partnership or the Guarantor and the Trustee by the Holders of at least 25% in principal amount of the Notes then outstanding a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (d) the Partnership pursuant to or within the meaning of the Bankruptcy Code (A) commences a voluntary case, (B) consents to the entry of any order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, or (D) makes a general assignment for the benefit of its creditors; or (e) a court of competent jurisdiction enters an order or decree under the Bankruptcy Code that (A) is for relief against the Partnership in an involuntary case, (B) appoints a Custodian of the Partnership or for all or substantially all of its property, or (C) orders the liquidation of the Partnership; and the order or decree remains unstayed and in effect for 90 days; or (f) any default by the Partnership or any of its Subsidiaries in the payment, at the final maturity date and after the expiration of any applicable grace period, of principal of, premium, if any, or interest on indebtedness for money borrowed in the principal amount then outstanding of $25,000,000 or more, or acceleration of any indebtedness of such amount, such that the indebtedness becomes due and payable prior to its maturity date and such acceleration is not rescinded within 60 days after notice to the Partnership in accordance with this Indenture. SECTION 6.02 Acceleration of Maturity; Rescission and Annulment. If an Event of Default with respect to the Notes occurs and is continuing (other than an Event of Default described in clause (d) or (e) of Section 6.01), then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Notes may declare the principal amount of the Notes to be due and payable immediately, by a notice in writing to the Partnership (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable. Notwithstanding the foregoing, if an Event of Default specified in clause (d) or (e) of Section 6.01 occurs, Notes then outstanding shall be due and payable immediately without further action or notice. -39- At any time after such a declaration of acceleration with respect to the Notes has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the notes then outstanding, by written notice to the Partnership and the Trustee, may rescind and annul such declaration and its consequences if (a) the Partnership has paid or deposited with the Trustee a sum sufficient to pay (A) all overdue interest on all the Notes, (B) the principal of (and premium, if any, on) and Liquidated Damages, if any, on the Notes which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in the Notes, (C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in the Notes, and (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (b) all Events of Default with respect to the Notes, other than the non-payment of the principal of the Notes which have become due solely by such declaration of acceleration, have been cured or waived as provided for below. If an Event of Default occurs and is not subsequently cured, the Trustee shall, in the exercise of its power, use the degree of care of a prudent man in the conduct of his affairs. No such rescission shall affect any subsequent Default or impair any right consequent thereon. SECTION 6.03 Collection of Indebtedness and Suits for Enforcement by Trustee. The Partnership covenants that if (a) default is made in the payment of any interest on the Notes when such interest becomes due and payable and such default continues for a period of 30 days, or (b) default is made in the payment of the principal of (or premium, if any, on) and Liquidated Damages, if any, on the Notes at the maturity date thereof, the Partnership will, upon demand of the Trustee, pay to it, for the benefit of the Holders of the Notes, the whole amount then due and payable on the Notes for principal, premium, if any, and Liquidated Damages, if any, and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium, Liquidated Damages and on any -40- overdue interest, at the rate or rates prescribed therefor in the Notes, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. If the Partnership fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Partnership, the Guarantor or any other obligor upon the Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Partnership, the Guarantor or any other obligor upon the Notes, wherever situated. If an Event of Default with respect to the Notes occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of the Notes by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. SECTION 6.04 Trustee May File Proofs of Claim. In case of any judicial proceeding relative to the Partnership, the Guarantor or any other obligor upon the Notes, their property or their creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors' committee or other similar committee. SECTION 6.05 Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under this Indenture or the Notes may be prosecuted and enforced by the Trustee without the possession of any of the Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its -41- own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Notes in respect of which such judgment has been recovered. SECTION 6.06 Application of Money Collected. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal, premium, if any, or Liquidated Damages, if any, or interest, upon presentation of the Notes and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 7.07; SECOND: To the payment of the amounts then due and unpaid for principal of, premium, if any, and Liquidated Damages, if any, and interest on the Notes, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and Liquidated Damages, if any, and interest, respectively; and THIRD: The balance, if any, to the Partnership. SECTION 6.07 Limitation on Suits. No Holder of the Notes shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (a) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Notes; (b) the Holders of not less than 25% in principal amount of the Notes then outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (c) such Holder or Holders have offered to the Trustee indemnity satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (e) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Notes then outstanding; -42- it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. SECTION 6.08 Unconditional Right of Holders to Receive Principal, Premium, Liquidated Damages and Interest. Notwithstanding any other provision in this Indenture, Holders shall have the right, which is absolute and unconditional, to receive payment of the principal of, premium, if any, and Liquidated Damages, if any, and (subject to Sections 2.06 and the provisions hereof regarding the payment of interest) interest on the Notes on the maturity date expressed in the Notes (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. SECTION 6.09 Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Partnership, the Guarantor, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. SECTION 6.10 Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes herein, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 6.11 Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. -43- SECTION 6.12 Control by Holders. The Holders of a majority in aggregate principal amount of the Notes shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Notes; provided, however, that (a) such direction shall not be in conflict with any rule of law or with this Indenture; (b) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction; and (c) subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall determine that the proceeding so directed would involve the Trustee in personal liability. SECTION 6.13 Waiver of Past Defaults. The Holders of a majority in aggregate principal amount of the Notes may on behalf of the Holders of all the Notes waive any past default hereunder and its consequences, except (a) a continuing default in the payment of the principal of, premium, if any, or Liquidated Damages, if any, or interest on the Notes, or (b) a default in respect of a covenant or provision hereof which cannot be modified or amended hereunder without the consent of each Holder. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture, but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 6.14 Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess reasonable costs, including reasonable legal fees and expenses, against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided, however, that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Partnership or the Trustee. -44- SECTION 6.15 Waiver of Usury, Stay or Extension Laws. The Partnership covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Partnership (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE VII TRUSTEE SECTION 7.01 Certain Duties and Responsibilities. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) Except during the continuance of an Event of Default: (i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and -45- (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.12 hereof. (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Partnership. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. SECTION 7.02 Notice of Defaults. If a Default occurs and is continuing with respect to the Notes, the Trustee shall, within 90 days after it occurs, transmit, in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act, notice of all uncured or unwaived Defaults actually known to it; provided, however, that, except in the case of a Default in payment of the principal of or interest on the Notes, the Trustee may withhold the notice if and so long as the board of directors, the executive committee or a trust committee of its directors and/or its Responsible Officers in good faith determines that withholding such notice is in the interests of Holders; provided further, however, that, in the case of any default or breach of the character specified in Section 6.01(c) with respect to the Notes, no such notice to Holders shall be given until at least 60 days after the occurrence thereof. SECTION 7.03 Certain Rights of Trustee. Subject to the provisions of Section 7.01: (a) the Trustee may conclusively rely on and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request, direction, order or demand of the Partnership mentioned herein shall be sufficiently evidenced by a Partnership Request or Partnership Order (other than delivery of any Security to the Trustee for authentication and delivery pursuant to Section 2.02, which shall be sufficiently evidenced as provided therein) and any resolution of the Partnership Policy Committee shall be sufficiently evidenced; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action -46- hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; (d) the Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (h) the Trustee may request that the Partnership deliver an Officers' Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers' Certificate may be signed by any person authorized to sign an Officers' Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded; (i) the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; (j) the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture; and (k) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder. -47- SECTION 7.04 Not Responsible for Recitals or Issuance of Notes. The recitals contained herein and in the Notes, except the Trustee's certificates of authentication, shall be taken as the statements of the Partnership, and the Trustee or any Authenticating Agent assumes no responsibility for their correctness. Neither the Trustee nor any Authenticating Agent makes any representations as to the validity or sufficiency of this Indenture or of the Notes. The Trustee or any Authenticating Agent shall not be accountable for the use or application by the Partnership of Notes or the proceeds thereof. SECTION 7.05 May Hold Notes. The Trustee, any Authenticating Agent, any Paying Agent, any Registrar or any other agent of the Partnership, in its individual or any other capacity, may become the owner or pledgee of Notes and, subject to Sections 7.08 and 7.13, may otherwise deal with the Partnership with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Registrar or such other agent. SECTION 7.06 Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Partnership. SECTION 7.07 Compensation and Reimbursement. The Partnership and the Guarantor jointly and severally agree: (a) to pay to the Trustee from time to time such compensation as shall be agreed in writing from time to time between the Partnership and the Trustee for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or willful misconduct; and (c) to indemnify each of the Trustee and any predecessor Trustee for, and to hold it harmless against, any and all loss, liability, damages, claim or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim (whether asserted by the Partnership, a Holder or another Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except those attributable to its negligence or willful misconduct. -48- The obligations of the Partnership and the Guarantor under this Section to compensate the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute additional indebtedness when such obligations have been past due for 90 days. Such additional indebtedness shall be secured by a lien prior to that of the Notes upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Notes. Without limiting any rights available to the Trustee under applicable law, when the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 6.01(d) or Section 6.01(e), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for such services are intended to constitute expenses of administration under any applicable provisions of the Bankruptcy Code. The provisions of this Section shall survive the satisfaction and discharge of this Indenture and the defeasance of the Notes. SECTION 7.08 Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. SECTION 7.09 Corporate Trustee Required; Eligibility. There shall at all times be one Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus required by the Trust Indenture Act. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of a supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. SECTION 7.10 Resignation and Removal; Appointment of Successor. No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 7.11. The Trustee may resign at any time with respect to the Notes by giving written notice thereof to the Partnership and the Guarantor. If the instrument of acceptance by a successor Trustee required by Section 7.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition, at the expense of the Partnership, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Notes. -49- The Trustee may be removed at any time with respect to the Notes by Act of the Holders of a majority in principal amount of the Notes then outstanding, delivered to the Trustee and to the Partnership. If the instrument of acceptance by a successor Trustee required by Section 7.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, the Trustee being removed may petition, at the expense of the Partnership, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Notes. If at any time: (1) the Trustee shall fail to comply with Section 7.08 after written request therefor by the Partnership, the Guarantor, or by any Holder who has been a bona fide Holder of a Security for at least six months, or (2) the Trustee shall cease to be eligible under Section 7.09 and shall fail to resign after written request therefor by the Partnership, the Guarantor, or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (A) the Partnership may remove the Trustee, or (B) subject to Section 6.14, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Notes and the appointment of a successor Trustee or Trustees. If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Notes, the Partnership shall promptly appoint a successor Trustee or Trustees with respect to the Notes (it being understood that any such successor Trustee may be appointed with respect to the Notes and that at any time there shall be only one Trustee with respect to the Notes) and shall comply with the applicable requirements of Section 7.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Notes shall be appointed by Act of the Holders of a majority in principal amount of the Notes delivered to the Partnership, the Guarantor, and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 7.11, become the successor Trustee with respect to the Notes and to that extent supersede the successor Trustee appointed by the Partnership. If no successor Trustee with respect to the Notes shall have been so appointed by the Partnership or the Holders and accepted appointment in the manner required by Section 7.11, any Holder who has been a bona fide Holder of Notes for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Notes. The Partnership shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee in the manner provided in Section 10.02. Each notice shall -50- include the name of the successor Trustee with respect to the Notes and the address of its Corporate Trust Office. SECTION 7.11 Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Trustee with respect to all Notes, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Partnership, the Guarantor, and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Partnership, the Guarantor, or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. (b) Upon request of any such successor Trustee, the Partnership and the Guarantor shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) of this Section. (c) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. SECTION 7.12 Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Notes shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Notes so authenticated with the same effect as if such successor Trustee had itself authenticated such Notes. SECTION 7.13 Preferential Collection of Claims Against Partnership. If and when the Trustee shall be or become a creditor directly or indirectly, secured or unsecured, of the Partnership, the Guarantor, or any other obligor upon the Notes, the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Partnership, the Guarantor, or any such other obligor. -51- SECTION 7.14 Appointment of Authenticating Agent. The Trustee (upon notice to the Partnership and the Guarantor) may appoint an Authenticating Agent or Agents which shall be authorized to act on behalf of the Trustee to authenticate the Notes (in accordance with procedures acceptable to the Trustee) and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 2.06, and Notes so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Notes by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Partnership and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by federal or state authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate agency or corporate trust business of such Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or such Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee, to the Partnership, and to the Guarantor. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent, to the Partnership, and to the Guarantor. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Partnership and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders, as their names and addresses appear in the security register of the Trustee. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. -52- The Partnership agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section. If an appointment is made pursuant to this Section, the Notes may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternative certificate of authentication in the following form: This is one of the Notes. BANK ONE TRUST COMPANY, N.A. As Trustee By: ------------------------------------- As Authenticating Agent By: ------------------------------------- Authorized Officer SECTION 7.15 Reports by Trustee to Holders of the Notes. (a) Within 60 days after each May 15 commencing July 15, 2000, the Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture to the extent required pursuant to the Trust Indenture Act at the times and in the manners provided pursuant thereto. (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which the Notes are listed, with the Commission and with the Partnership. The Partnership will promptly notify the Trustee when the Notes are listed on any stock exchange. ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE SECTION 8.01 Option to Effect Legal Defeasance or Covenant Defeasance. The Partnership may, at the option of the Partnership Policy Committee evidenced by a resolution set forth in an exhibit to an Officers' Certificate, at any time, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article VIII. -53- SECTION 8.02 Legal Defeasance and Discharge. Upon the Partnership's exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Partnership shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from its obligations with respect to all outstanding Notes on the date the conditions set forth below are satisfied (hereinafter, "Legal Defeasance") except for (i) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, premium, if any, and interest and Liquidated Damages, if any, on such Notes when such payments are due from the trust referred to below, (ii) the Partnership's obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust, (iii) the rights, powers, trusts, duties and immunities of the Trustee, and the Partnership's and Guarantor's obligations in connection therewith, (iv) rights of registration of transfer and exchange of the Notes and the Partnership's optional rights, (v) the obligations of the Partnership under Section 4.02, (vi) rights of registration of transfer and exchange of the Notes and the Partnership's optional right of redemption and (iv) the Legal Defeasance provisions of this Indenture. For this purpose, Legal Defeasance means that the Partnership, the Guarantor, and any other obligor on the Notes shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations under such Notes and this Indenture (and the Trustee, on demand of and at the expense of the Partnership, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of, premium, if any, and interest and Liquidated Damages, if any, on such Notes when such payments are due, (b) the Partnership's obligations with respect to such Notes under Article II and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Partnership's obligations in connection therewith and (d) this Article VIII. Subject to compliance with this Article VIII, the Partnership may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof. SECTION 8.03 Covenant Defeasance. Upon the Partnership's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Partnership and any other obligor, including the Guarantor, shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from its obligations under the covenants contained in Sections 4.03, 4.04, 4.06, 4.07 and Article V hereof with respect to the outstanding Notes on and after the date the conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Partnership and the Guarantor may omit to comply with and -54- shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Partnership's exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(c) through 6.01(g) hereof shall not constitute Events of Default. SECTION 8.04 Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes: In order to exercise either Legal Defeasance or Covenant Defeasance: (a) the Partnership must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest and Liquidated Damages, if any, on the outstanding Notes on the stated maturity or on the applicable Redemption Date, as the case may be, and the Partnership must specify whether the Notes are being defeased to maturity or to a particular Redemption Date; (b) in the case of an election under Section 8.02 hereof, the Partnership shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Partnership has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (c) in the case of an election under Section 8.03 hereof, the Partnership shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or insofar as Section 6.01(d) or 6.01(e) hereof is concerned, at any time in the period ending on the 91st day after the date of deposit; -55- (e) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Partnership or any of its Subsidiaries is a party or by which the Partnership or any of its Subsidiaries is bound; (f) the Partnership shall have delivered to the Trustee an Opinion of Counsel to the effect that on the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (g) the Partnership shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Partnership with the intent of preferring the Holders of Notes over the other creditors of the Partnership with the intent of defeating, hindering, delaying or defrauding creditors of the Partnership or others; and (h) the Partnership shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with. SECTION 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively, for purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Partnership acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest and Liquidated Damages, if any, but such money need not be segregated from other funds except to the extent required by law. The Partnership shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes. Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Partnership from time to time upon the request of the Partnership any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(h) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. -56- SECTION 8.06 Repayment to Partnership. Any money deposited with the Trustee or any Paying Agent, or then held by the Partnership, in trust for the payment of the principal of, premium, if any, or interest and Liquidated Damages, if any, on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest and Liquidated Damages, if any, has become due and payable shall be paid to the Partnership on its request or (if then held by the Partnership) shall be discharged from such trust; and the Holder of such Note shall thereafter, as a secured creditor, look only to the Partnership for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Partnership as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Partnership cause to be published once, in an Authorized Newspaper in each Place of Payment with respect to the Notes, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Partnership. SECTION 8.07 Reinstatement. If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Partnership's and the Guarantor's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Partnership or the Guarantor makes any payment of principal of, premium, if any, or interest and Liquidated Damages, if any, on any Note following the reinstatement of its obligations, the Partnership or the Guarantor shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent. ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER SECTION 9.01 Without Consent of Holders of Notes. Notwithstanding Section 9.02 hereof, the Partnership, the Guarantor and the Trustee may amend or supplement this Indenture or the Notes without the consent of any Holder of a Note: (a) to cure any ambiguity, defect or inconsistency; (b) to provide for uncertificated Notes in addition to or in place of certificated Notes or to alter the provisions of Article II hereof (including the related definitions) in a manner that does not materially adversely affect any Holder; -57- (c) to provide for the assumption of the Partnership's or the Guarantor's obligations to the Holders of the Notes in the case of a merger, consolidation or sale of assets of the Partnership pursuant to Article V hereof; (d) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any such Holder; (e) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA; or (f) to reflect the release of the Guarantor from its Guarantee, or the addition of any Holding Subsidiary of the Partnership or any other Person as a guarantor hereunder, in the manner provided by this Indenture. Upon the request of the Partnership accompanied by a resolution of the Partnership Policy Committee authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the Trustee of the documents described in Section 7.03 hereof, the Trustee shall join with the Partnership and the Guarantor in the execution of any amended or supplemental Indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture that affects its own rights, duties, liabilities or immunities under this Indenture or otherwise. SECTION 9.02 With Consent of Holders of Notes. Except as provided below in this Section 9.02, the Partnership, the Guarantor and the Trustee may amend or supplement this Indenture and the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a tender offer or exchange offer for the Notes), and, subject to Sections 6.13 and 6.08 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest and Liquidated Damages, if any, on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including consents obtained in connection with a tender offer or exchange offer for the Notes). Upon the request of the Partnership accompanied by a resolution of the Partnership Policy Committee authorizing the execution of any such amended or supplemental Indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by a Responsible Officer of the Trustee of the documents described in Section 7.03 hereof, the Trustee shall join with the Partnership and the Guarantor in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture affects the Trustee's own rights, duties, liabilities or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental Indenture. -58- It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment, supplement or waiver under this Section becomes effective, the Partnership shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Partnership to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture or waiver. Subject to Sections 6.13 and 6.08 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding may waive compliance in a particular instance by the Partnership with any provision of this Indenture or the Notes. However, without the consent of each Holder affected, an amendment or waiver may not (with respect to any Notes held by a nonconsenting Holder): (a) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver of any provision of this Indenture or the Notes; (b) reduce the principal of or change the fixed maturity of any Note or alter or waive in any manner that adversely affects the rights of any Holder of Notes any of the provisions with respect to the redemption of the Notes; (c) reduce the rate of or change the time for payment of interest, including default interest, or Liquidated Damages, if any, on any Note; (d) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest or Liquidated Damages, if any, on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration); (e) make any Note payable in money other than that stated in the Notes; (f) make any change that adversely affects the rights of any Holder of Notes in the provisions of this Indenture relating to waivers of past Defaults or make any change to the rights of Holders of Notes to receive payments of principal of or interest or Liquidated Damages, if any, on the Notes; (g) waive a redemption payment with respect to any Note; or (h) make any change in Section 6.13 or 6.08 hereof or in the foregoing amendment and waiver provisions. SECTION 9.03 Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Notes shall be set forth in a amended or supplemental Indenture that complies with the TIA as then in effect. -59- SECTION 9.04 Revocation and Effect of Consents. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder. SECTION 9.05 Notation on or Exchange of Notes. The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Partnership, in exchange for all Notes, may issue and the Trustee shall authenticate new Notes that reflect the amendment, supplement or waiver. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver. SECTION 9.06 Trustee to Sign Amendments, Etc. The Trustee shall sign any amended or supplemental Indenture authorized pursuant to this Article IX if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties, liabilities or immunities under this Indenture or otherwise. The Partnership may not sign an amendment or supplemental Indenture until the Partnership Policy Committee approves it. In executing any amended or supplemental indenture, the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture. ARTICLE X MISCELLANEOUS SECTION 10.01 Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA Section 318(c), the imposed duties shall control. SECTION 10.02 Notices. Any notice or communication by the Partnership or the Trustee to the others is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified, return -60- receipt requested), telecopier or overnight air courier guaranteeing next day delivery, to the others' address: If to the Partnership: Northern Border Partners, L.P. c/o Northern Plains Natural Gas Company 1111 South 103rd Street Omaha, Nebraska 68124-1000 Telecopier No.: (402) 398-7871 Attention: Director of Finance If to the Trustee: Bank One Trust Company, N.A 1 Banc One Plaza, Suite IL1-0126 Chicago, Illinois 60670-0126 Telecopier No.: (312) 407-1708 Attention: Corporate Trust Services Division The Partnership or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications. All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Partnership mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. -61- SECTION 10.03 Communication by Holders of Notes with Other Holders of Notes. Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Partnership, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). SECTION 10.04 Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Partnership or the Guarantor to the Trustee to take any action under this Indenture, the Partnership shall furnish to the Trustee: (a) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 10.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. SECTION 10.05 Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include: (a) a statement that the Person making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. SECTION 10.06 Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. -62- SECTION 10.07 Non-Recourse to the General Partners; No Personal Liability of Directors, Officers, Employees or Partners. Obligations of the Partnership, or the Guarantor, as such, under this Indenture and the Notes hereunder are non-recourse to the General Partners, and their respective Affiliates (other than the Partnership and the Guarantor), and payable only out of cash flow and assets of the Partnership and the Guarantor. The Trustee, and each Holder of a Note by its acceptance thereof, will be deemed to have agreed in this Indenture that (1) none of the General Partners nor their assets (nor any of their respective Affiliates other than the Partnership or the Guarantor, or their respective assets) shall be liable for any of the obligations of the Partnership or the Guarantor under this Indenture or such Notes, and (2) no director, officer, employee, stockholder or unitholder, as such, of the Partnership, the Guarantor, the Trustee, the General Partners or any Affiliate of any of the foregoing entities and no member of the Partnership Policy Committee or the Partnership's Audit Committee shall have any personal liability in respect of the obligations of the Partnership or the Guarantor under this Indenture or such Notes by reason of his, her or its status. SECTION 10.08 Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF, SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE NOTES. SECTION 10.09 No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Partnership or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. SECTION 10.10 Successors. All agreements of the Partnership in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 10.11 Severability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 10.12 Counterpart Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. -63- SECTION 10.13 Table of Contents, Headings, Etc. The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. SECTION 10.14 Acts of Holders; Record Dates. Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders may be embodied in and evidenced by (a) one or more instruments of substantially similar tenor signed (either physically or by means of a facsimile or an electronic transmission, provided that such electronic transmission is transmitted through the facilities of a Depositary) by such Holders in person or by agent duly appointed in writing; (b) the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with the provisions of Article IX, or (c) a combination of such instruments and record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record are delivered (either physically or by means of a facsimile or an electronic transmission, provided that such electronic transmission is transmitted through the facilities of a Depositary) to the Trustee and, where it is hereby expressly required, to the Partnership. Such instrument or instruments or record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments or of the Holders reflected by such record. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 315 of the Trust Indenture Act) conclusive in favor of the Trustee and the Partnership, if made in the manner provided in this Section. The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient. The ownership, principal amount and serial numbers of Notes held by any Person, and the date of commencement of such Person's holding the same, shall be proved by the security register of the Trustee. Any request, demand, authorization, direction, notice, consent, waiver or other action of the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Partnership in reliance thereon, whether or not notation of such action is made upon such Note. -64- Without limiting the foregoing, a Holder entitled hereunder to give or take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any different part of such principal amount. The Partnership may set any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders, but the Partnership shall have no obligation to do so. With regard to any record date set pursuant to this paragraph, the Holders of Notes on such record date (or their duly appointed agents), and only such Persons, shall be entitled to give or take the relevant action, whether or not such Holders remain Holders after such record date. The record of any meeting of Holders shall be proved as provided in Section 11.06. ARTICLE XI MEETINGS OF HOLDERS OF NOTES SECTION 11.01 Purposes for Which Meetings May Be Called. A meeting of Holders may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other act provided by this Indenture to be made, given or taken by Holders. SECTION 11.02 Call, Notice and Place of Meetings. (a) The Trustee may at any time call a meeting of Holders for any purpose specified in Section 11.01, to be held at such time and at such place in the Borough of Manhattan, The City of New York as the Trustee shall determine. Notice of every meeting of Holders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 10.02, not less than 21 nor more than 180 days prior to the date fixed for the meeting. (b) In case at any time the Partnership (by or pursuant to a resolution of the Partnership Policy Committee or Officers' Certificate) or the Holders of at least 10% in principal amount of the Notes then outstanding have requested the Trustee to call a meeting of the Holders for any purpose specified in Section 11.01, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed notice of such meeting within 21 days after receipt of such request (whichever shall be required pursuant to Section 10.02) or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Partnership or the Holders in the amount above specified, as the case may be, may determine the time and the place in the Borough of Manhattan, The City of New York for such meeting and may call such meeting for such purposes by giving notice thereof as provided in clause (a) of this Section 11.02. -65- SECTION 11.03 Persons Entitled to Vote at Meetings. To be entitled to vote at any meeting of Holders, a Person shall be (1) a Holder of one or more Notes, or (2) a Person appointed by an instrument in writing as proxy for a Holder or Holders by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Partnership and its counsel. SECTION 11.04 Quorum; Action. The presence of Persons holding Notes in an aggregate principal amount sufficient to take action upon the matter for which such meeting was called shall constitute a quorum for a meeting of Holders. In the absence of a quorum within 30 minutes after the time appointed for any such meeting, the meeting shall, if convened at the request of Holders, be dissolved. In any other case, the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in Section 11.02(a), except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Notes that shall constitute a quorum. A resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in principal amount of the Notes; provided, however, that any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other Act which this Indenture expressly provides may be made, given or taken by the Holders of a specified percentage, which is less or more than a majority in principal amount of the Notes may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified percentage in principal amount of the Notes. Any resolution passed or decision taken at any meeting of Holders of Notes duly held in accordance with this Section shall be binding on all the Holders, whether or not such Holders were present or represented at the meeting. SECTION 11.05 Determination of Voting Rights; Conduct and Adjournment of Meetings. (a) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders in regard to proof of the holding of Notes and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Notes shall be proved in the manner specified in Section 10.14 and the appointment of any proxy shall be proved in executing the proxy witnessed or guaranteed by any trust partnership, bank or banker -66- authorized by Section 10.14 to certify to the holding of Notes. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 10.14 or other proof. (b) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Partnership, or by Holders as provided in Section 11.02(b), in which case the Partnership or the Holders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in principal amount of the Notes represented at the meeting. (c) At any meeting each Holder of a Note or proxy shall be entitled to one vote for each $1,000 principal amount of Notes held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Note challenged as not then outstanding and ruled by the chairman of the meeting to be not then outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Note or proxy. (d) Any meeting of Holders duly called pursuant to Section 11.02 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in principal amount of the Notes then outstanding represented at the meeting; and the meeting may be held as so adjourned without further notice. SECTION 11.06 Counting Votes and Recording Action of Meetings. The vote upon any resolution submitted to any meeting of Holders shall be by written ballots on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the principal amounts and serial numbers of the Notes held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in triplicate of all votes cast at the meeting. A record of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 11.02 and, if applicable, Section 11.04. Such record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and a copy of same shall be delivered to the Company and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. -67- ARTICLE XII GUARANTEE OF NOTES SECTION 12.01 Unconditional Guarantee. (1) For value received, the Guarantor, hereby fully, unconditionally and absolutely guarantees (the "Guarantee") to the Holders and to the Trustee the due and punctual payment of the principal of, and premium, if any, and interest on the Notes and all other amounts due and payable under this Indenture and the Notes by the Partnership, when and as such principal, premium, if any, and interest shall become due and payable, whether at the stated maturity or by declaration of acceleration, call for redemption or otherwise, according to the terms of the Notes and this Indenture. (2) Failing payment when due of any amount guaranteed pursuant to the Guarantee, for whatever reason, the Guarantor will be obligated to pay the same immediately. The Guarantee hereunder is intended to be a general, unsecured, senior obligation of the Guarantor and will rank pari passu in right of payment with all Debt of the Guarantor that is not, by its terms, expressly subordinated in right of payment to the Guarantee of the Guarantor. The Guarantor hereby agrees that its obligations hereunder shall be full, unconditional and absolute, irrespective of the validity, regularity or enforceability of the Notes, the Guarantee or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Partnership, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of the Guarantor. The Guarantor hereby agrees that in the event of a default in payment of the principal of, or premium, if any, or interest on the Notes, whether at the stated maturity or by declaration of acceleration, call for redemption or otherwise, legal proceedings may be instituted by the Trustee on behalf of the Holders or, subject to Section 6.07, by the Holders, on the terms and conditions set forth in this Indenture, directly against the Guarantor to enforce the Guarantee without first proceeding against the Partnership. (3) The obligations of the Guarantor under this Article XII shall be as aforesaid full, unconditional and absolute and shall not be impaired, modified, released or limited by any occurrence or condition whatsoever, including, without limitation, (A) any compromise, settlement, release, waiver, renewal, extension, indulgence or modification of, or any change in, any of the obligations and liabilities of the Partnership or the Guarantor contained in the Notes or this Indenture, (B) any impairment, modification, release or limitation of the liability of the Partnership, the Guarantor or any of their estates in bankruptcy, or any remedy for the enforcement thereof, resulting from the operation of any present or future provision of any applicable Bankruptcy Law, as amended, or other statute or from the decision of any court, (C) the assertion or exercise by the Partnership, the Guarantor or the Trustee of any rights or remedies under the Notes or this Indenture or their delay in or failure to assert or exercise any such rights or remedies, (D) the assignment or the purported assignment of any property as security for the Notes, including all or any part of the rights of the Partnership or the Guarantor under this Indenture, (E) the extension of the time for payment by the Partnership or the Guarantor of any payments or other sums or any part thereof owing or payable under any of the terms and provisions of the Notes or this Indenture or of the time for performance by the Partnership or the Guarantor of any other obligations under or arising out of -68- any such terms and provisions or the extension or the renewal of any thereof, (F) the modification or amendment (whether material or otherwise) of any duty, agreement or obligation of the Partnership or the Guarantor set forth in this Indenture, (G) the voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all of the assets, marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting, the Partnership or the Guarantor or any of its respective assets, or the disaffirmance of the Notes, the Guarantee or this Indenture in any such proceeding, (H) the release or discharge of the Partnership or the Guarantor from the performance or observance of any agreement, covenant, term or condition contained in any of such instruments by operation of law, (I) the unenforceability of the Notes, the Guarantee or this Indenture or (J) any other circumstance which might otherwise constitute a legal or equitable discharge of a surety or guarantor. (4) The Guarantor hereby (A) waives diligence, presentment, demand of payment, filing of claims with a court in the event of the merger, insolvency or bankruptcy of the Partnership or the Guarantor, and all demands whatsoever, (B) acknowledges that any agreement, instrument or document evidencing the Guarantee may be transferred and that the benefit of its obligations hereunder shall extend to each holder of any agreement, instrument or document evidencing the Guarantee without notice to them and (C) covenants that its Guarantee will not be discharged except by complete performance of the Guarantee. The Guarantor further agrees that if at any time all or any part of any payment theretofore applied by any person to the Guarantee is, or must be, rescinded or returned for any reason whatsoever, including without limitation, the insolvency, bankruptcy or reorganization of the Partnership or the Guarantor, the Guarantee shall, to the extent that such payment is or must be rescinded or returned, be deemed to have continued in existence notwithstanding such application, and the Guarantee shall continue to be effective or be reinstated, as the case may be, as though such application had not been made. (5) The Guarantor shall be subrogated to all rights of the Holders and the Trustee against the Partnership in respect of any amounts paid by the Guarantor pursuant to the provisions of this Indenture, provided, however, that the Guarantor shall be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until all of the Notes and the Guarantee shall have been paid in full or discharged. (6) A director, officer, employee or unitholder, as such, of the Guarantor shall not have any liability for any obligations of the Guarantor under this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. SECTION 12.02 Limitation of Guarantor's Liability. The Guarantor and by its acceptance hereof each Holder hereby confirms that it is the intention of all such parties that the guarantee by the Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or conveyance for purposes of any federal, state or foreign law. To effectuate the foregoing intention, the Holders and the Guarantor hereby irrevocably agree that the obligations of the Guarantor under its Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of the Guarantor result in the -69- obligations of the Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal, state or foreign law. SECTION 12.03 Execution and Delivery of Guarantee. To further evidence the Guarantee set forth in Section 12.01, the Guarantor hereby agrees that a notation relating to the Guarantee shall be endorsed on each Note authenticated and delivered by the Trustee and executed by either manual or facsimile signature of two officers of the Guarantor. The Guarantor hereby agrees that its Guarantee set forth in Section 12.01 shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation relating to the Guarantee. If an officer of the Guarantor whose signature is on this Indenture or a Note no longer holds that office at the time the Trustee authenticates such Note or at any time thereafter, the Guarantor's Guarantee of such Note shall be valid nevertheless. The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantor. SECTION 12.04 Addition of Guarantors. (1) If any Holding Subsidiary of the Partnership incurs, creates, assumes or guarantees any Funded Debt other than the Notes at any time subsequent to the Issue Date (including, without limitation, following any release of such Holding Subsidiary pursuant to Section 12.05 from the Guarantee previously provided by it under this Article XII), then the Partnership shall (A) cause the Notes to be equally and ratably guaranteed by such Holding Subsidiary, but only to the extent that the Notes are not already guaranteed by such Holding Subsidiary on reasonably comparable terms and (B) cause such Holding Subsidiary to execute and deliver a supplemental indenture evidencing its provision of the Guarantee in accordance with clause (2) below. (2) Any Person that was not the Guarantor on the Issue Date may become a Guarantor by executing and delivering to the Trustee (A) a supplemental indenture in form and substance satisfactory to the Trustee, which subjects such Person to the provisions (including the representations and warranties) of this Indenture as the Guarantor and (B) an Opinion of Counsel and Officers' Certificate to the effect that such supplemental indenture has been duly authorized and executed by such Person and constitutes the legal, valid, binding and enforceable obligation of such Person (subject to such customary exceptions concerning creditors' rights and equitable principles as may be acceptable to the Trustee in its discretion and provided that no opinion need be rendered concerning the enforceability of the Guarantee). SECTION 12.05 Release of Guarantee. Notwithstanding anything to the contrary in this Article XII, in the event that the Guarantor shall no longer be a guarantor of any Funded Debt other than the Notes, and so long as no Default or Event of Default shall have occurred or be continuing, the Guarantor, upon giving notice to the -70- Trustee to the foregoing effect, shall be deemed to be released from all of its obligations under this Indenture and the Guarantee shall be of no further force or effect. Following the receipt by the Trustee of any such notice, the Partnership shall cause this Indenture to be amended as provided in Section 9.01; provided, however, that the failure to so amend this Indenture shall not affect the validity of the termination of the Guarantee of the Guarantor. [Signatures Page(s) Follow] -71- SIGNATURES Dated as of June 2, 2000 ISSUER: NORTHERN BORDER PARTNERS, L.P. By: /s/ Jerry L. Peters ------------------------------------------- Name: Jerry L. Peters Title: Chief Financial and Accounting Officer GUARANTOR: NORTHERN BORDER INTERMEDIATE LIMITED PARTNERSHIP By: /s/ Jerry L. Peters ------------------------------------------- Name: Jerry L. Peters Title: Chief Financial and Accounting Officer TRUSTEE: BANK ONE TRUST COMPANY, N.A. By: /s/ John R. Prendiville ------------------------------------------- Name: John R. Prendiville Title: Authorized Officer -72- FORM OF GUARANTEE The Guarantor (which term includes any successor person under the Indenture), has fully, unconditionally and absolutely guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, the due and punctual payment of the principal of, and premium, if any, and interest on the Notes and all other amounts due and payable under the Indenture and the Notes by the Partnership. The obligations of the Guarantor to the Holders of Notes and to the Trustee pursuant to the Guarantee and the Indenture are expressly set forth in Article XII of the Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee. NORTHERN BORDER INTERMEDIATE LIMITED PARTNERSHIP By: /s/ Jerry L. Peters ---------------------------- Name: Jerry L. Peters Title: Chief Financial and Accounting Officer -73- EXHIBIT A (FACE OF NOTE) CUSIP: 664785 AA 0 87/8% Senior Notes due 2010, [Series A] No. $ ------------- ---------------- NORTHERN BORDER PARTNERS, L.P. promises to pay to or registered assigns, the principal sum of DOLLARS AND NO CENTS ---------------------------------------------------------- on June 15, 2010. Interest Payment Dates: June 15 and December 15 Record Dates: June 1 and December 1 NORTHERN BORDER PARTNERS, L.P. By: --------------------------- Name: Title: This is one of the Notes referred to in the within-mentioned Indenture: BANK ONE TRUST COMPANY, N.A. as Trustee By: --------------------------- Name: Title: Dated: , 2000 A-1 (Back of Note) 87/8% Senior Notes due 2010, [Series A] [Unless and until it is exchanged in whole or in part for Notes in definitive form, this Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. The Depository Trust Company shall act as the Depositary until a successor shall be appointed by the Company and the Registrar. Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) ("DTC"), to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as may be requested by an authorized representative of DTC (and any payment is made to Cede & Co. or such other entity as may be requested by an authorized representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein.](1) [THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI")), (2) AGREES THAT IT WILL NOT RESELL, OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO NORTHERN BORDER PARTNERS, L.P. OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (D) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE WITH A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE TRANSFER AGENT THAT SUCH TRANSFER IS IN - --------- (1) This should be included only if the Note is issued in global form. A-2 COMPLIANCE WITH THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO NORTHERN BORDER PARTNERS, L.P.), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.](2) Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 1. Interest. Northern Border Partners, L.P., a Delaware limited partnership (the "Partnership"), promises to pay interest on the principal amount of this Note at 8 7/8% per annum, from June 2, 2000 until maturity [and shall pay the Liquidated Damages, if any, payable pursuant to Section 5 of the Registration Rights Agreement referred to below].(3) The Partnership will pay interest and Liquidated Damages, if any, semiannually in arrears on June 15 and December 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be December 15, 2000. The Partnership shall pay interest (including post-petition interest in any proceeding under the Bankruptcy Code) on overdue principal and premium, if any, from time to time on demand at the rate borne on the Notes; it shall pay interest (including post-petition interest in any proceeding under the Bankruptcy Code) on overdue installments of interest and Liquidated Damages, if any, (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. Method of Payment. The Partnership will pay interest on the Notes (except defaulted interest) and Liquidated Damages, if any, to the Persons who are registered Holders of Notes at the close of business on the June 1 or December 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except - --------- (2) This bracketed provision applies only to Notes that have not been exchanged for Series A Notes in the Exchange Offer, and it should be removed upon the exchange of such Notes for Series A Notes in the Exchange Offer or upon the transfer of such Notes that have been sold pursuant to the terms of the Shelf Registration contemplated by the Registration Rights Agreement. (3) This bracketed provision applies only to Notes that have not been exchanged for Series A Notes in the Exchange Offer, and it should be removed upon the exchange of such Notes for Series A Notes in the Exchange Offer or upon the transfer of such Notes that have been sold pursuant to the terms of the Shelf Registration contemplated by the Registration Rights Agreement. A-3 as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium and Liquidated Damages, if any, and interest at the office or agency of the Partnership maintained for such purpose within the City and State of New York, or, at the option of the Partnership, payment of interest and Liquidated Damages, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Liquidated Damages, if any, on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Partnership or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 3. Paying Agent and Registrar. Initially, Bank One Trust Company, N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar. The Partnership may change any Paying Agent or Registrar without notice to any Holder. The Partnership may act in any such capacity. 4. Indenture. The Partnership issued the Notes under an Indenture dated as of June 2, 2000 ("Indenture") between the Partnership, Northern Border Intermediate Limited Partnership, as guarantor (the "Guarantor"), and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended ("TIA"). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are obligations of the Partnership and the Guarantor limited to $150,000,000 in aggregate principal amount. 5. Optional Redemption. The Notes will be subject to redemption at any time at the option of the Partnership in whole or in part, at a redemption price equal to the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest and any Liquidated Damages, if any, thereon to the applicable Redemption Date plus the "make-whole premium" as defined below. The "make-whole premium" or "premium," with respect to any Note to be redeemed, shall be equal to the excess, if any, of: (a) the sum of the present values, calculated as of the Redemption Date, of (A) each interest payment that, but for such redemption, would have been payable on the Note or portion thereof being redeemed on each Interest Payment Date occurring after the Redemption Date (excluding any accrued interest for the period prior to the Redemption Date); and (B) the principal amount that, but for such redemption, would have been payable at the final maturity of the Note being redeemed; over (b) the principal amount of the Note being redeemed. The present values of interest and principal payments referred to in clause (a) above will be determined in accordance with generally accepted principles of financial analysis. These present values will be calculated by discounting the amount of each payment of interest or principal from the date that each such payment would have been payable, but for the redemption, to the Redemption Date at a discount rate equal to the comparable treasury yield (as defined below) plus 35 basis points. The make-whole premium will be calculated by an independent investment banking institution of national standing appointed by the Partnership. If the Partnership fails to appoint an independent investment banker at least 45 days prior to the Redemption Date, or if such independent investment banker is unwilling or unable to make the calculation, the calculation will be made by Banc of America Securities L.L.C. If Banc of America Securities L.L.C. is unwilling or unable to A-4 make the calculation, the Partnership will appoint an independent investment banking institution of national standing to make the calculation. For purposes of determining the make-whole premium, comparable treasury yield means a rate of interest per annum equal to the weekly average yield to maturity of United States Treasury Securities that have a constant maturity that corresponds to the remaining term to maturity of the Notes, calculated to the nearest 1/12th of a year. The comparable treasury yield will be determined as of the third business day immediately preceding the applicable Redemption Date. The weekly average yields of United States Treasury Securities will be determined by reference to the most recent statistical release published by the Federal Reserve Bank of New York and designated "H.15(519) Selected Interest Rates" or any successor release. If the H.15 statistical release sets forth a weekly average yield for United States Treasury Securities having a constant maturity that is the same as the remaining term calculated as set forth above, then the comparable treasury yield will be equal to such weekly average yield. In all other cases, the comparable treasury yield will be calculated by interpolation on a straight-line basis, between the weekly average yields on the United States Treasury Securities that have a constant maturity closest to and greater than the remaining term and the United States Treasury Securities that have a constant maturity closest to and less than the remaining term (in each case as set forth in the H.15 statistical release or any successor release). Any weekly average yields calculated by interpolation will be rounded to the nearest 1/100th of 1%, with any figure of 1/200th of 1% or above being rounded upward. If weekly average yields for United States Treasury Securities are not available in the H.15 statistical release or otherwise, then the comparable treasury yield will be calculated by interpolation of comparable rates selected by an independent investment banker selected in the manner described in the second preceding paragraph. 6. Mandatory Redemption. The Partnership shall not be required to make mandatory redemption payments with respect to the Notes. 7. Notice of Redemption. Notice of redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the Redemption Date, interest and Liquidated Damages, if any, cease to accrue on Notes or portions thereof called for redemption. 8. Repurchase Upon a Rating Decline. If a Rating Decline occurs and an Investment Grade rating has not been reinstated within 40 days after such occurrence, each Holder of Notes shall have the right to require the Partnership to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes at an offer price in cash equal to 100% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the date of purchase (the "Rating Decline Payment"). Within 10 days following any Rating Decline, the Partnership shall mail an initial notice to each Holder with a copy to the trustee stating that a Rating Decline has occurred and a repurchase of the Notes by the Partnership may be required. If within 30 days following such initial notice, the Rating Agency or Agencies which downgraded the notes shall have failed to reinstate an Investment Grade rating to the Notes, then the Partnership shall, on the 40th day following such Rating Decline, mail a subsequent notice to each Holder with a copy to the trustee stating that an Investment Grade rating of the Notes has not been reinstated and that such Holder has the right to require the Partnership to repurchase such Holder's notes pursuant A-5 to the terms of the Indenture. The repurchase date shall be made on a Business Day not less than 30 days nor more than 60 days after such initial notice is mailed. The Partnership and the Guarantor will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Rating Decline. 9. Denominations, Transfer, Exchange. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Partnership may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Partnership need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date. 10. Persons Deemed Owners. The registered Holder of a Note may be treated as its owner for all purposes. 11. Amendment, Supplement and Waiver. Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes, and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes. Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Partnership's or the Guarantor's obligations to Holders of the Notes in case of a merger or consolidation or to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, or to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA. 12. Defaults and Remedies. Events of Default include: (a) default in the payment of any interest or Liquidated Damages, if any, upon the Notes when it becomes due and payable, and continuance of such default for a period of 30 days; or (b) default in the payment of the principal of (or premium, if any, on), the Notes at their Stated Maturity; or (c) default in the performance, or breach, of any term, covenant or warranty of the Partnership in this Indenture, and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Partnership by the Trustee or to the Partnership and the Trustee by the Holders of at least 25% in principal amount of the Notes then outstanding a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" under the Indenture; or (d) the Partnership pursuant to or within the meaning of the Bankruptcy Code (A) commences a voluntary case, (B) consents to the entry of any order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, or (D) makes a general assignment for the benefit of its creditors; or (e) a court of competent jurisdiction enters an order or decree under the Bankruptcy Code that (A) is for relief against the Partnership in an involuntary case, (B) appoints a Custodian of the Partnership or for all or substantially all of its property, or (C) orders the liquidation of the Partnership; and the order or decree remains unstayed and in effect for 90 days; or (f) any default by the Partnership or any of its A-6 Subsidiaries in the payment, at the final maturity date and after the expiration of any applicable grace period, of principal of, premium, if any, Liquidated Damages, if any, or interest on indebtedness for money borrowed in the principal amount then outstanding of $25,000,000 or more, or acceleration of any indebtedness of such amount, such that such indebtedness becomes due and payable prior to its maturity date and such acceleration is not rescinded within 60 days after notice to the Partnership. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events (as described in (d) and (e) above) of bankruptcy or insolvency, all outstanding Notes will become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes. The Partnership is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Partnership is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 13. Trustee Dealings with Partnership. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Partnership or its Affiliates, and may otherwise deal with the Partnership or its Affiliates, as if it were not the Trustee. 14. No Recourse Against Others. None of the Partnership's policy committee members, or the of the Partnership's general partners and their Affiliates (other than the Partnership and the Guarantor), if any, and no director, officer, employee, stockholder or unitholder, as such, of the Partnership, the Guarantor, the Trustee, the general partners of the Partnership or any Affiliate of any of the foregoing entities shall have any liability for any obligations of the Partnership under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. 15. Authentication. This Note shall not be valid until authenticated by the manual signature of a Responsible Officer of the Trustee or an Authenticating Agent. 16. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 17. Additional Rights of Holders of Restricted Global Notes and Restricted Definitive Notes. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in and shall be bound by the provisions of the Registration Rights Agreement dated as of June 2, 2000, between the Partnership and the parties named on the signature pages thereof (the "Registration Rights Agreement"). A-7 The Partnership will furnish to any Holder, upon written request, a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: Bank One Trust Company, N.A. 1 Banc One Plaza, Suite IL1-0126 Chicago, Illinois 60670-0126 Telecopier No.: (312) 407-1708 Attention: Corporate Trust Services Division A-8 ASSIGNMENT FORM To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to - -------------------------------------------------------------------------------- (Insert assignee's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint -------------------------------------------------------- to transfer this Note on the books of the Partnership. The agent may substitute another to act for him. - -------------------------------------------------------------------------------- Date: Your Signature: ----------------------------------------------------------------- (Sign exactly as your name appears on the face of this Note) A-9 SIGNATURE GUARANTEE - -------------------------------------------------------------------------------- Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(4) The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:
PRINCIPAL AMOUNT SIGNATURE OF AMOUNT OF AMOUNT OF OF THIS GLOBAL NOTE AUTHORIZED DECREASE IN INCREASE IN FOLLOWING SUCH SIGNATORY OF PRINCIPAL AMOUNT PRINCIPAL AMOUNT DECREASE (OR TRUSTEE OR NOTE DATE OF EXCHANGE OF THIS GLOBAL NOTE OF THIS GLOBAL NOTE INCREASE) CUSTODIAN - ---------------- ------------------- ------------------- -------------------- ---------------
- ---------- (4) This should be included only if the Note is issued in global form. A-11 OPTION OF HOLDER TO ELECT PURCHASE(5) If you want to elect to have this Note purchased by the Partnership pursuant to Section 4.11 of the Indenture, check the box below: [ ] If you want to elect to have only part of the Note purchased by the Partnership pursuant to Section 4.11 of the Indenture, state the amount you elect to have purchased: $__________ Date: Your Signature: ------------------------------------------ (Sign exactly as your name appears on the Note) Social Security or Tax Identification No.: -------------- Signature Guarantee: - ---------- (5) This should be included only if the Note is issued in certificated form. A-12 EXHIBIT B-1 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER OF DEFINITIVE NOTES (Pursuant to Section 2.06(b) of the Indenture) Bank One Trust Company, N.A. as Trustee and Registrar Re: 8 7/8% Notes due 2010 of Northern Border Partners, L.P. Reference is hereby made to the Indenture dated as of June 2, 2000 (the "Indenture") among Northern Border Partners, L.P. (the "Partnership"), Northern Border Intermediate Partnership (the "Guarantor") and Bank One Trust Company, N.A., as trustee (the "Trustee"). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. This relates to $________ principal amount of Notes which are evidenced by one or more Definitive Notes in the name of ____________________ (the "Transferor"). The Transferor has requested an exchange or transfer of such Definitive Note(s) in the form of an equal principal amount of Notes evidenced by one or more Definitive Notes, to be delivered to the Transferor or, in the case of a transfer of such Notes, to such Person as the Transferor instructs the Trustee. In connection with such request and in respect of the Notes surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the Holder of such Surrendered Notes hereby certifies that: [CHECK ONE] [ ] the Surrendered Notes are being acquired for the Transferor's own account, without transfer; or [ ] the Surrendered Notes are being transferred to the Partnership or one of its Subsidiaries; or [ ] the Surrendered Notes are being transferred pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the Surrendered Notes are being transferred to a Person that the Transferor reasonably believes is B-1-1 purchasing the Surrendered Notes for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A, in each case in a transaction meeting the requirements of Rule 144A; or [ ] the Surrendered Notes are being transferred in a transaction permitted by Rule 144 under the Securities Act; or [ ] the Surrendered Notes are being transferred pursuant to an exemption under the Securities Act other than Rule 144A, Rule 144 or Rule 904 to Person who is an Institutional Accredited Investor and the Transferor further certifies that the transfer complies with the transfer restrictions applicable to Definitive Notes bearing the legend set forth in Section 2.06(g) of the Indenture and the requirements of the exemption claimed, which certification is supported by (a) if such transfer is in respect of a principal amount of Notes at the time of transfer of $100,000 or more, a certificate executed by the transferee in the form of Exhibit C to the Indenture, or (b) if such transfer is in respect of a principal amount of Notes at the time of transfer of less than $100,000, (i) a certificate executed in the form of Exhibit C to the Indenture and (ii) an Opinion of Counsel provided by the Transferor or the transferee (a copy of which the Transferor has attached to this certification), to the effect that (1) such transfer is in compliance with the Securities Act and (2) such transfer complies with any applicable blue sky securities laws of any state of the United States; or [ ] the Surrendered Notes are being transferred pursuant to an effective registration statement under the Securities Act; and the Surrendered Notes are being transferred in compliance with any applicable blue sky securities laws of any state of the United States or any other applicable jurisdiction. B-1-2 This certificate and the statements contained herein are made for your benefit and the benefit of the Partnership. [Insert Name of Transferor] By: ---------------------------------- Name: Title: Dated: cc: Northern Border Partners, L.P. B-1-3 EXHIBIT B-2 FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER FROM 144A GLOBAL NOTE TO DEFINITIVE NOTE (Pursuant to Section 2.06(c) of the Indenture) Bank One Trust Company, N.A. as Trustee and Registrar Re: 8 7/8% Notes due 2010 of Northern Border Partners, L.P. Reference is hereby made to the Indenture dated as of June 2, 2000 (the "Indenture") among Northern Border Partners, L.P. (the "Partnership"), Northern Border Intermediate Partnership (the "Guarantor") and Bank One Trust Company, N.A., as trustee (the "Trustee"). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. This letter relates to $__________ principal amount of Notes which are evidenced by a beneficial interest in one or more 144A Global Notes in the name of ___________________ (the "Transferor"). The Transferor has requested an exchange or transfer of such beneficial interest in the form of an equal principal amount of Notes evidenced by one or more Definitive Notes, to be delivered to the Transferor or, in the case of a transfer of such Notes, to such Person as the Transferor instructs the Trustee. In connection with such request and in respect of the Notes surrendered to the Trustee herewith (the "Surrendered Notes"), the Holder of such Surrendered Notes hereby certifies that: [CHECK ONE] [ ] the Surrendered Notes are being transferred to the beneficial owner of such Notes; or [ ] the Surrendered Notes are being transferred to the Partnership or one of its Subsidiaries; or [ ] the Surrendered Notes are being transferred pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the Surrendered Notes are being transferred to a Person that the Transferor reasonably believes is purchasing the Surrendered Notes for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such B-2-1 Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A, in each case in a transaction meeting they requirements of Rule 144A; or [ ] the Surrendered Notes are being transferred in a transaction permitted by Rule 144 under the Securities Act; or [ ] the Surrendered Notes are being transferred pursuant to an effective registration statement under the Securities Act; or [ ] the Surrendered Notes are being transferred pursuant to an exemption under the Securities Act other than Rule 144A, Rule 144 or Rule 904 to a Person who is an Institutional Accredited Investor and the Transferor further certifies that the transfer complies with the transfer restrictions applicable to beneficial interests in Global Notes bearing the legend set forth in Section 2.06(g) of the Indenture and the requirements of the exemption claimed, which certification is supported by (a) if such transfer is in respect of a principal amount of Notes at the time of transfer of $100,000 or more, a certificate executed by the transferee in the form of Exhibit C to the Indenture, or (b) if such transfer is in respect of a principal amount of Notes at the time of transfer of less than $100,000, (i) a certificate executed in the form of Exhibit C to the Indenture and (ii) an Opinion of Counsel provided by the Transferor or the transferee (a copy of which the Transferor has attached to this certification), to the effect that (1) such transfer is in compliance with the Securities Act and (2) such transfer complies with any applicable blue sky securities laws of any state of the United States; and the Surrendered Notes are being transferred in compliance with any applicable blue sky securities laws of any state of the United States or any other applicable jurisdiction. This certificate and the statements contained herein are made for your benefit and the benefit of the Company. [Insert Name of Transferor] By: ----------------------------------- Name: Title: Dated: cc: Northern Border Partners, L.P. B-2-2 EXHIBIT C FORM OF CERTIFICATE TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS ---------------, ----- Bank One Trust Company, N.A., as Trustee and Registrar Ladies and Gentlemen: We are delivering this letter in connection with an offering of a series of 8 7/8% Notes due 2010 (the "Notes") of Northern Border Partners, L.P., a Delaware limited partnership (the "Partnership"), all as described in the offering memorandum (the "Offering Memorandum") dated May 26, 2000 relating to the offering of the Notes. We hereby confirm that: (i) we are an "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the "Securities Act"), or an entity in which all of the equity owners are accredited investors within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act (an "Institutional Accredited Investor"); (ii) any purchase of Notes by us will be for our own account or for the account of one or more other Institutional Accredited Investors; (iii) in the event that we purchase any Notes, we will acquire Notes having a minimum purchase price of at least $100,000 for our own account and for each separate account for which we are acting; (iv) we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of purchasing Notes and we, and any accounts for which we are acting, are able to bear the economic risks of its or their investment; (v) we are not acquiring Notes with a view to any distribution thereof in a transaction that would violate the Securities Act or the securities laws of any State of the United States or any other applicable jurisdiction; provided that the disposition of our property and the property of any accounts for which we are acting as fiduciary shall remain at all times within our control; and (vi) we have received a copy of the Offering Memorandum and acknowledge that we have had access to such financial and other information, and have been afforded the opportunity to ask such questions of representatives of the Partnership and receive answers thereto, as we deem necessary in connection with our decision to purchase Notes. C-1 We understand that the Notes were offered in a transaction not involving any public offering within the meaning of the Securities Act and that the Notes have not been registered under the Securities Act, and we agree, on our own behalf and on behalf of each account for which we acquire any Notes, that such Notes may be offered, resold, pledged or otherwise transferred only (i) to a person whom we reasonably believe to be a qualified institutional buyer (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A under the Securities Act, in a transaction meeting the requirements of Rule 144 under the Securities Act, or in accordance with another exemption from the registration requirements of the Securities Act (and based upon an opinion of counsel if the Partnership so requests), (ii) to the Partnership or (iii) pursuant to an effective registration statement, and in each case, in accordance with any applicable securities laws of any State of the United States or any other applicable jurisdiction, and we will, and each subsequent holder of the Notes is required to, notify any subsequent purchaser from us or it of the resale restrictions set forth in clause (i) above. We acknowledge that the Notes will bear legends substantially to the effect set forth in the Offering Memorandum under the "Notice to Investors." We understand that the registrar will not be required to accept for registration of transfer any Notes, except upon presentation of evidence satisfactory to the Partnership that the foregoing restrictions on transfer have been complied with. We acknowledge that you and the Partnership will rely upon our confirmations, acknowledgments and agreements set forth herein, and we agree to notify you promptly in writing if any of our representations or warranties herein ceases to be accurate and complete. THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. ---------------------------------------- [Name of Purchaser] By ------------------------------------- Name: Title: Address: C-2 EXHIBIT D REGISTRATION RIGHTS AGREEMENT See Exhibit 4.2 D-1 EX-4.2 3 0003.txt INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES EXHIBIT 4.2 Execution Copy REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "Agreement") is made and entered into as of June 2, 2000 by and among Northern Border Partners, L.P., a Delaware limited partnership (the "Partnership"), Northern Border Intermediate Limited Partnership, a Delaware limited partnership, and Banc of America Securities LLC ("BOA"), Banc One Capital Markets, Inc. and SunTrust Equitable Securities (the "Initial Purchasers"), who have agreed to purchase the Partnership's 8 7/8% Senior Notes due 2010 (the "Senior Notes") pursuant to and subject to the terms and conditions of a certain Purchase Agreement, dated May 26, 2000 (the "Purchase Agreement"), by and among the Partnership and the Initial Purchasers. In order to induce the Initial Purchasers to purchase the Senior Notes, the Partnership has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligation of the Initial Purchasers to purchase the Senior Notes pursuant to the Purchase Agreement. The parties hereby agree as follows: SECTION 1. DEFINITIONS As used in this Agreement, the following capitalized terms shall have the following meanings: Advice: As defined in Section 6(d) hereof. Affiliate: With respect to any specified Person, "Affiliate" shall mean any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control," when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise and the terms "affiliated," "controlling" and "controlled" have meanings correlative to the foregoing. Notwithstanding the foregoing, with respect to the Partnership "Affiliate" shall mean Northern Border Pipeline Company, Northern Border Intermediate Limited Partnership, Northern Plains Natural Gas Company, Pan Border Gas Company and Northwest Border Pipeline Company. Authorized Officer: Any of the Chief Executive Officer, Chief Financial and Accounting Officer or any vice president of the Partnership, acting singly. Broker-Dealer: Any broker or dealer registered under the Exchange Act. Broker-Dealer Transfer Restricted Securities: New Senior Notes that are acquired by a Broker-Dealer in the Exchange Offer in exchange for Senior Notes that such Broker-Dealer acquired for its own account as a result of market-making activities or other trading activities (other than Senior Notes acquired directly from the Partnership or any of its Affiliates). Business Day: Any day except a Saturday, Sunday or other day in the City of New York, or in the city of the corporate trust office of the Trustee, on which banks are authorized to close. Closing Date: The date of this Agreement. Commission: The Securities and Exchange Commission. Consummate: The Exchange Offer shall be deemed "consummated" for purposes of this Agreement upon the occurrence of (i) the filing and effectiveness under the Securities Act of the Exchange Offer Registration Statement relating to the New Senior Notes to be issued in the Exchange Offer, (ii) the maintenance of such Exchange Offer Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the minimum period required pursuant to Section 3(b) hereof, and (iii) the delivery by the Partnership to the Trustee under the Indenture of New Senior Notes in the same aggregate principal amount as the aggregate principal amount of Senior Notes that were tendered by Holders thereof pursuant to the Exchange Offer. Damages Payment Date: With respect to the Transfer Restricted Securities, each Interest Payment Date until the earlier of (i) the date on which Liquidated Damages are no longer payable and (ii) maturity of the Notes. Definitive Notes: As defined in the Indenture. Effectiveness Target Date: As defined in Section 5. Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. Exchange Offer: The registration by the Partnership under the Securities Act of the New Senior Notes pursuant to an Exchange Offer Registration Statement pursuant to which the Partnership offers the Holders of all outstanding Transfer Restricted Securities the opportunity to exchange all such outstanding Transfer Restricted Securities held by such Holders for New Senior Notes in an aggregate principal amount equal to the aggregate principal amount of the Transfer Restricted Securities tendered in such exchange offer by such Holders. Exchange Offer Registration Statement: The Registration Statement relating to the Exchange Offer, including the related Prospectus. Exempt Resales: The transactions in which the Initial Purchasers propose to sell the Senior Notes (a) to certain "qualified institutional buyers," as such term is defined in Rule 144A -2- under the Securities Act and (b) to certain institutional "accredited investors" as such term is defined in Rule 501(a)(1),(2),(3) or (7) of Regulation D under the Securities Act. Global Note Holder: A "Holder" as defined in the Indenture. Holders: As defined in Section 2(b) hereof. Indenture: The Indenture, dated as of the Closing Date, among the Partnership and Bank One Trust Company, N.A., as trustee (the "Trustee"), pursuant to which the Notes are to be issued, as such Indenture is amended or supplemented from time to time in accordance with the terms thereof. Initial Purchasers: As defined in the preamble hereto. Interest Payment Date: As defined in the Indenture and the Notes. Liquidated Damages: As defined in Section 5 hereof. Memorandum: As defined in the Purchase Agreement. NASD: National Association of Securities Dealers, Inc. Notes: The Senior Notes and the New Senior Notes. New Senior Notes: The Partnership's 8 7/8% Senior Notes due 2010, Series A to be issued pursuant to the Indenture (i) in the Exchange Offer or (ii) upon the request of any holder of Senior Notes covered by a Shelf Registration Statement, in exchange for such Senior Notes. Person: An individual, partnership, corporation, limited liability company, joint venture, association, joint-stock company, trust or unincorporated organization, or a government or agency or political subdivision thereof or any other entity. Prospectus: The prospectus included in a Registration Statement at the time such Registration Statement is declared effective, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus. Record Holder: With respect to any Damages Payment Date relating to Notes, each Person who is a Holder of Notes on the record date with respect to the Interest Payment Date on which such Damages Payment Date shall occur. Registration Default: As defined in Section 5 hereof. -3- Registration Statement: Any registration statement of the Partnership relating to (a) an offering of New Senior Notes pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, in each case (i) which is filed pursuant to the provisions of this Agreement, and (ii) including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and material incorporated by reference therein. Restricted Broker-Dealer: Any Broker-Dealer that holds Broker-Dealer Transfer Restricted Securities. Securities Act: The Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. Shelf Filing Deadline: As defined in Section 4 hereof. Shelf Registration Statement: As defined in Section 4 hereof. TIA: The Trust Indenture Act of 1939, as amended, as in effect on the date of the Indenture. Transfer Restricted Securities: Each Senior Note, until the earliest to occur of (a) the date on which such Senior Note is exchanged in the Exchange Offer and entitled to be resold to the public by the Holder thereof without complying with the prospectus delivery requirements of the Securities Act, (b) the date on which such Senior Note has been effectively registered under the Securities Act and disposed of in accordance with a Shelf Registration Statement, (c) the date on which such Senior Note is distributed to the public pursuant to Rule 144 or is saleable pursuant to Rule 144(k) under the Securities Act and (d) the date on which such Senior Note is distributed by a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the Exchange Offer Registration Statement (including delivery of the Prospectus contained therein). Underwritten Registration or Underwritten Offering: A registration in which securities of the Partnership are sold to an underwriter for reoffering to the public. SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT (a) Transfer Restricted Securities. The securities entitled to the benefits of this Agreement are the Transfer Restricted Securities. (b) Holders of Transfer Restricted Securities. A Person is deemed to be a holder of Transfer Restricted Securities (each, a "Holder") whenever such Person owns Transfer Restricted Securities. -4- SECTION 3. REGISTERED EXCHANGE OFFER (a) Unless the Exchange Offer shall not be permissible under applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with), the Partnership shall (i) cause to be filed with the Commission as soon as practicable after the Closing Date, but in no event later than 120 days after the Closing Date, the Exchange Offer Registration Statement under the Securities Act relating to the New Senior Notes and the Exchange Offer, (ii) use its reasonable best efforts to cause such Exchange Offer Registration Statement to become effective at the earliest possible time, but in no event later than 180 days after the Closing Date, (iii) in connection with the foregoing, (A) file all pre-effective amendments to such Exchange Offer Registration Statement as may be necessary in order to cause such Exchange Offer Registration Statement to become effective, (B) if applicable, file a post-effective amendment to such Exchange Offer Registration Statement pursuant to Rule 430A under the Securities Act and (C) cause all necessary filings, if any, in connection with the registration and qualification of the New Senior Notes to be made under the Blue Sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer and (iv) upon the effectiveness of such Exchange Offer Registration Statement, commence and Consummate the Exchange Offer. The Exchange Offer Registration Statement shall be on the appropriate form permitting registration of the New Senior Notes to be offered in exchange for the Transfer Restricted Securities and to permit sales of Broker- Dealer Transfer Restricted Securities by Broker-Dealers as contemplated by Section 3(c) below. (b) The Partnership shall use its reasonable best efforts to cause the Exchange Offer Registration Statement to be effective continuously for a period of thirty (30) days from the date on which the Exchange Offer Registration Statement is declared effective and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however, that in no event shall such period be less than 20 Business Days. The Partnership shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Notes shall be included in the Exchange Offer Registration Statement. The Partnership shall use its reasonable best efforts to cause the Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in no event later than 30 Business Days thereafter. (c) The Partnership shall include a "Plan of Distribution" section in the Prospectus contained in the Exchange Offer Registration Statement and indicate that any Restricted Broker-Dealer who holds Senior Notes that are Transfer Restricted Securities and that were acquired for the account of such Broker-Dealer as a result of market-making activities or other trading activities (other than Transfer Restricted Securities acquired directly from the Partnership or one of its Affiliates) may exchange such Senior Notes pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be an "underwriter" within the meaning of the Securities Act and must, therefore, deliver a prospectus meeting the requirements of the Securities Act in connection with its initial sale of the New Senior Notes received by such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement may be satisfied by the delivery by such Broker-Dealer of -5- the Prospectus contained in the Exchange Offer Registration Statement. Such "Plan of Distribution" section shall also contain all other information with respect to such resales of Broker-Dealer Transfer Restricted Securities that the Commission may require in order to permit such sales pursuant thereto but such "Plan of Distribution" shall not name any such Broker-Dealer or disclose the amount of Notes held by any such Broker-Dealer except to the extent required by the Commission as a result of a change in policy after the date of this Agreement. The Partnership shall use its reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 6(c) below to the extent necessary to ensure that it is available for resales of Broker-Dealer Transfer Restricted Securities acquired by Restricted Broker-Dealers and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of 120 days from the date on which the Exchange Offer Registration Statement is declared effective or, if shorter, until all Broker-Dealer Transfer Restricted Securities have been sold thereunder. The Partnership shall provide sufficient copies of the latest version of such Prospectus to such Restricted Broker-Dealers promptly upon request at any time during such 120 day period in order to facilitate such sales. SECTION 4. SHELF REGISTRATION (a) Shelf Registration. If (i) the Partnership is not required to file an Exchange Offer Registration Statement or to consummate the Exchange Offer because the Exchange Offer is not permitted by applicable law or Commission policy (after the procedures set forth in Section 6(a) below have been complied with) or (ii) if any Holder of Transfer Restricted Securities shall notify the Partnership within twenty (20) Business Days of the Consummation of the Exchange Offer that (A) such Holder is prohibited by applicable law or Commission policy from participating in the Exchange Offer, or (B) such Holder may not resell the New Senior Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and that the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder, or (C) such Holder is a Broker-Dealer and holds Senior Notes acquired directly from the Partnership or one of its Affiliates, then the Partnership shall: (x) cause to be filed a shelf registration statement pursuant to Rule 415 under the Securities Act, which may be an amendment to the Exchange Offer Registration Statement (in either event, the "Shelf Registration Statement") on or prior to the earliest to occur of (1) the 60th day after the date on which the Partnership receives notice from the Commission or determines that it is not required to file the Exchange Offer Registration Statement pursuant to clause (i) above, (2) the 60th day after the date on which the Partnership receives notice from a Holder of Transfer Restricted Securities as contemplated by clause (ii) above, and (3) the 150th day after the Closing Date (such earliest date being the "Shelf Filing Deadline"), which Shelf Registration Statement shall provide for resales of all Transfer -6- Restricted Securities the Holders of which shall have provided the information required pursuant to Section 4(b) hereof; and (y) use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective by the Commission on or before the 60th day after the Shelf Filing Deadline. The Partnership shall use its reasonable best efforts to keep such Shelf Registration Statement continuously effective, supplemented and amended as required by and subject to the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure that it is available for sales of Transfer Restricted Securities by the Holders thereof entitled to the benefit of this Section 4(a), and to ensure that it conforms with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of at least 18 months (as extended pursuant to Section 6(c)(i)) following the date on which such Shelf Registration Statement first becomes effective under the Securities Act or such shorter period ending when all of the Transfer Restricted Securities available for sale thereunder have been sold pursuant thereto. (b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Partnership in writing, within 15 Business Days after receipt of a request therefor, such information as the Partnership may reasonably request for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. No Holder of Transfer Restricted Securities shall be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until such Holder shall have provided all such reasonably requested information. Each Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Partnership all information required to be disclosed in order to make the information previously furnished to the Partnership by such Holder not materially misleading. SECTION 5. LIQUIDATED DAMAGES If (i) any of the Registration Statements required by this Agreement are not filed with the Commission on or prior to the date specified for such filing in this Agreement then additional interest shall accrue on the principal amount of the Senior Notes at a rate of 0.25% per annum from the date such filing was required; (ii) any of such Registration Statements have not been declared effective by the Commission on or prior to the date specified for such effectiveness in this Agreement (the "Effectiveness Target Date") then additional interest shall accrue on the principal amount of the Senior Notes at a rate of 0.25% per annum from the Effectiveness Target Date; (iii) the Exchange Offer has not been Consummated within 30 Business Days after the Effectiveness Target Date with respect to the Exchange Offer Registration Statement then additional interest shall accrue on the principal amount of the Senior Notes at a rate of 0.25% per annum from the 31st Business Day after the Effectiveness Target Date; or (iv) any Registration Statement required by this -7- Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded within 30 days by a post-effective amendment to such Registration Statement, the effectiveness of another Registration Statement or the use of the Prospectus (as amended or supplemented) is again permitted that cures such failure then additional interest shall accrue on the principal amount of the Senior Notes at a rate of 0.25% per annum from the 31st day following such Registration Statement ceasing to be effective (each such event referred to in clauses (i) through (iv), a "Registration Default"). The additional interest rate owing pursuant to the preceding clauses (i) through (iv) shall be increased by 0.25% per annum each 90-day period that such Registration Default continues, provided such additional interest does not exceed the Maximum Rate, as defined below. All accrued Liquidated Damages (as defined below) shall be paid to the Global Note Holders or Holders of certificated Notes by the Partnership on each Interest Payment Date generally in accordance with the provisions in the Indenture regarding payment of interest. Notwithstanding anything to the contrary set forth herein, (1) upon filing of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (i) above, (2) upon the effectiveness of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (ii) above, (3) upon Consummation of the Exchange Offer, in the case of (iii) above, or (4) upon the filing of a post-effective amendment to the Registration Statement or an additional Registration Statement that causes the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement) to again be declared effective or the Prospectus to be made usable in the case of (iv) above, the Liquidated Damages payable with respect to the Transfer Restricted Securities as a result of such clause (i), (ii), (iii) or (iv) ("Liquidated Damages"), as applicable, shall cease. Liquidated Damages on the Senior Notes may not exceed, in the aggregate, 1% of the face amount of the Senior Notes per annum (the "Maximum Rate"). All obligations of the Partnership set forth in the preceding paragraph that are outstanding with respect to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted Security shall survive until such time as all such obligations with respect to such security shall have been satisfied in full. SECTION 6. REGISTRATION PROCEDURES (a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Partnership shall comply with all applicable provisions of Section 6(c) below, shall use its reasonable best efforts to effect such exchange to permit the sale of Broker-Dealer Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof (which shall be in a manner consistent with the terms of this Agreement), and shall comply with all of the following provisions: (i) If, following the date hereof and prior to the Consummation of the Exchange Offer, there has been published a change in Commission policy with respect to exchange -8- offers such as the Exchange Offer, such that in the reasonable opinion of counsel to the Partnership there is a substantial question as to whether the Exchange Offer is permitted by applicable law or Commission policy, the Partnership hereby agrees to seek a no-action letter or other favorable decision from the Commission staff allowing the Partnership to Consummate an Exchange Offer for such Senior Notes. The Partnership hereby agrees to pursue the issuance of such a decision to the Commission staff level but shall not be required to take commercially unreasonable action to effect a change of Commission policy. The Partnership hereby agrees, however, to take all such other actions as are reasonably requested by the Commission or the Commission staff or otherwise required in connection with the issuance of such decision, including without limitation, to (A) participate in telephonic conferences with the Commission or the Commission staff, (B) deliver to the Commission or the Commission staff an analysis prepared by counsel to the Partnership setting forth the legal bases, if any, upon which such counsel has concluded that such an Exchange Offer should be permitted and (C) diligently pursue a resolution (which need not be favorable) by the Commission staff of such submission. (ii) As a condition to its participation in the Exchange Offer pursuant to the terms of this Agreement, each Holder of Transfer Restricted Securities shall furnish, upon the request of the Partnership, prior to the Consummation thereof, a written representation to the Partnership (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an Affiliate of the Partnership, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any Person to participate in, a distribution (within the meaning of the Securities Act) of the New Senior Notes to be issued in the Exchange Offer and (C) it is acquiring the New Senior Notes in its ordinary course of business. In addition, all such Holders of Transfer Restricted Securities shall otherwise reasonably cooperate in the Partnership's preparations for the Exchange Offer. Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Exchange Offer to participate in a distribution of the securities to be acquired in the Exchange Offer (1) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission's letter to Sherman & Sterling dated July 2, 1993, and similar no-action letters (including any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and that such a secondary resale transaction should be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K if the resales are of New Senior Notes obtained by such Holder in exchange for Senior Notes acquired by such Holder directly from the Partnership or an Affiliate thereof. (iii) Prior to effectiveness of the Exchange Offer Registration Statement, the Partnership shall provide a supplemental letter to the Commission (A) stating that the -9- Partnership is registering the Exchange Offer in reliance on the position of the Commission enunciated in Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) and, if applicable, any no-action letter obtained pursuant to clause (i) above, (B) including a representation that the Partnership has not entered into any arrangement or understanding with any Person to distribute the New Senior Notes to be received in the Exchange Offer and that, to the best of the Partnership's information and belief, each Holder participating in the Exchange Offer is acquiring the New Senior Notes in its ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the New Senior Notes received in the Exchange Offer and (C) any other undertaking or representation required by the Commission as set forth in any no-action letter obtained pursuant to clause (i) above. (b) Shelf Registration Statement. In connection with the Shelf Registration Statement, the Partnership shall comply with all the provisions of Section 6(c) below and shall use its reasonable best efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and pursuant thereto the Partnership will as expeditiously as possible, and in any event within the time periods and otherwise in accordance with the provisions hereof, prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Securities Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof. (c) General Provisions. In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities (including, without limitation, any Exchange Offer Registration Statement and the related Prospectus required to permit resales of Transfer Restricted Securities by Restricted Broker-Dealers), the Partnership shall: (i) use its reasonable best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements for the period specified in Section 3 or 4 of this Agreement, as applicable, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold; upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Partnership shall (1) file promptly an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and (2) in the case of either clause (A) or (B), use its reasonable best efforts to cause such amendment to be declared effective and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter; -10- (ii) prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as applicable, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424, 430A and 462, as applicable under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus; (iii) advise the managing underwriter(s), if any, and selling Holders promptly and, if requested by such Persons, to confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment thereto has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue in any material respect, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, the Partnership shall use its reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest practicable time; (iv) upon written request, furnish to the Initial Purchasers, and, upon written request, to each of the selling Holders and each of the managing underwriter(s) in connection with such sale, if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus, which documents will be subject to the review of such selling Holders and underwriter(s) in connection with such sale, if any, for a period of at least five Business Days, and the Partnership will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or -11- Prospectus to which a selling Holder of Transfer Restricted Securities covered by such Registration Statement or the underwriter(s) in connection with such sale, if any, shall reasonably object within five Business Days after the receipt thereof. A selling Holder or managing underwriter in connection with such sale, if any, shall be deemed to have reasonably objected to such filing (A) if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission or fails to comply with the applicable requirements of the Securities Act or (B) if any of the information furnished to the Partnership by the selling Holder or managing underwriter in connection with such sale, if any, and included in such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed is incorrect in any respect; (v) upon written request, promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to the selling Holders and to the underwriter(s) in connection with such sale, if any, make the Partnership's representatives available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such selling Holders or underwriters, if any, reasonably may request; (vi) in the case of a shelf registration, make available at reasonable times for inspection by the selling Holders, any managing underwriter participating in the disposition pursuant to such Registration Statement, if any, and any attorney or accountant retained by such selling Holders or any of the underwriter(s), all relevant financial and other records, pertinent corporate documents and properties of the Partnership and cause the officers, directors and employees of the Partnership to supply all information reasonably requested by any such underwriter, attorney or accountant in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness; (vii) if requested by any selling Holders or the managing underwriter(s) in connection with such sale, if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such managing underwriter(s), if any, may request to have included therein, including, without limitation, information relating to the "Plan of Distribution" of the Transfer Restricted Securities, information with respect to the principal amount of Transfer Restricted Securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Partnership is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment; (viii) cause the Transfer Restricted Securities covered by the Registration Statement to be rated by the appropriate rating agencies, if so requested by the Holders of a majority in -12- aggregate principal amount of Notes covered thereby or the managing underwriter(s) in connection with such sale, if any, unless such Transfer Restricted Securities are already so rated; (ix) furnish to each selling Holder and each of the managing underwriter(s) in connection with such sale, if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference); (x) deliver to each selling Holder and each of the managing underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; the Partnership hereby consents to the use of the Prospectus and any amendment or supplement thereto by each of the selling Holders and each of the underwriter(s), if any, in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto; (xi) enter into such agreements (including an underwriting agreement), and make such representations and warranties with respect to the business of the Partnership as are customarily addressed in representations and warranties made by issuers to underwriters in underwritten offerings, and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any Registration Statement contemplated by this Agreement, all to such extent as may be requested by the Initial Purchasers or by any Holder of Transfer Restricted Securities or managing underwriter in connection with any sale or resale pursuant to any Registration Statement contemplated by this Agreement; and whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Registration, the Partnership shall: (A) furnish to each Initial Purchaser, each selling Holder and each managing underwriter, if any, in such substance and scope as they may reasonably request and as are customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the Consummation of the Exchange Offer and, if applicable, the effectiveness of the Shelf Registration Statement: (1) a certificate, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, signed on behalf of the Partnership by any Authorized Officer, confirming, as of the date thereof, the matters set forth in paragraph (g) of Section 7 of the Purchase Agreement and such other matters as such parties may reasonably request; -13- (2) opinions, dated the date of Consummation of the Exchange Offer or of effectiveness of the Shelf Registration Statement, as the case may be, of counsel or counsels for the Partnership, covering the matters set forth in paragraphs (c) and (d) of Section 7 of the Purchase Agreement and such other matters as such parties may reasonably request, and in any event including a statement to the effect that such counsel for the Partnership has participated in conferences with officers of the Partnership and other representatives of the Partnership, representatives of the independent public accountants for the Partnership and representatives of and counsel to the Initial Purchasers at which the contents of such Registration Statement and the related Prospectus were discussed and, although such counsel is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained therein (except as specifically stated in such opinion), on the basis of the foregoing, no facts have come to the attention of such counsel that have caused such counsel to believe that the applicable Registration Statement, at the time such Registration Statement or any post-effective amendment thereto became effective, and, in the case of the Exchange Offer Registration Statement, as of the date of Consummation, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or that the Prospectus contained in such Registration Statement as of its date and, in the case of the opinion dated the date of Consummation of the Exchange Offer, as of the date of Consummation, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that such counsel need make no comment as to the financial statements and related statistical or financial information and schedules included in any Registration Statement contemplated by this Agreement or the related Prospectus); and (3) customary comfort letters, dated as of the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, from the Partnership's independent accountants, in the customary form and covering matters of the type customarily covered in comfort letters by underwriters in connection with Underwritten Offerings, and affirming the matters set forth in the comfort letters delivered pursuant to Section 7(e) and (f) of the Purchase Agreement, without exception; (B) set forth in full or incorporate by reference in the underwriting agreement, if any, the indemnification provisions and procedures of Section 8 hereof with respect to all parties to be indemnified pursuant to said Section; and (C) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with clause (A) above and with any -14- customary conditions contained in the underwriting agreement or other agreement entered into by the Partnership pursuant to this clause (xi), if any. The above shall be done at each closing under such underwriting or similar agreement, as and to the extent required thereunder, and, if at any time the representations and warranties of the Partnership contemplated in clause (A)(1) above cease to be true and correct in any material respect, the Partnership shall so advise the Initial Purchasers and the managing underwriter(s), if any, each selling Holder and each Restricted Broker-Dealer promptly and, if requested by such Persons, shall confirm such advice in writing; (xii) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders, the managing underwriter(s), if any, and its counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions in the United States as the selling Holders or managing underwriter(s), if any, may request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the applicable Registration Statement; provided, however, that the Partnership shall not be required to register or qualify as a foreign entity where it is not now so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not now so subject; (xiii) shall issue, upon the request of any Holder of Senior Notes covered by any Shelf Registration Statement contemplated by this Agreement, New Senior Notes, having an aggregate principal amount equal to the aggregate principal amount of the Senior Notes surrendered to the Partnership by such Holder in exchange therefor or being sold by such Holder; such New Senior Notes to be registered in the name of such Holder or in the name of the purchaser(s) of such Notes, as the case may be; in return, the Senior Notes held by such Holder shall be surrendered to the Partnership for cancellation; (xiv) cooperate with the selling Holders and the managing underwriter(s), if any, to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and enable such Transfer Restricted Securities to be in such denominations and registered in such names as the Holders or the underwriter(s), if any, may request at least two Business Days prior to any sale of Transfer Restricted Securities made by such underwriter(s); (xv) use its reasonable best efforts to cause the disposition of the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter(s), if any, to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in clause (xii) above; -15- (xvi) subject to Section 6(c)(i), if any fact or event contemplated by clause 6(c)(iii)(D) above shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading; (xvii) provide a CUSIP number for all Transfer Restricted Securities not later than the effective date of the Registration Statement covering such Transfer Restricted Securities and provide the Trustee under the Indenture with printed certificates for the Transfer Restricted Securities which are in a form eligible for deposit with The Depository Trust Company; (xviii) cooperate and assist in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter (including any "qualified independent underwriter" that is required to be retained in accordance with the rules and regulations of the NASD), and use its reasonable best efforts to cause such Registration Statement to become effective and approved by such governmental agencies or authorities as may be necessary to enable the Holders selling Transfer Restricted Securities to consummate the disposition of such Transfer Restricted Securities; (xix) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) for the twelve-month period (A) commencing at the end of any fiscal quarter in which Transfer Restricted Securities are sold to underwriters in a firm or reasonable best efforts Underwritten Offering or (B) if not sold to underwriters in such an offering, beginning with the first month of the Partnership's first fiscal quarter commencing after the effective date of the Registration Statement; (xx) cause the Indenture to be qualified under the TIA not later than the effective date of the first Registration Statement required by this Agreement, and, in connection therewith, cooperate with the Trustee and the Holders of Notes to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the TIA; and execute and use its reasonable best efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; (xxi) cause all Transfer Restricted Securities covered by the Registration Statement to be listed on each securities exchange on which similar securities issued by the Partnership -16- are then listed if requested by the Holders of a majority in aggregate principal amount of Senior Notes or the managing underwriter(s), if any; and (xxii) promptly provide or make available to the Holders of the Notes, all financial information and reports at the time and in the manner provided for in Section 4.03 of the Indenture. (d) Restrictions on Holders. (i) Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of the notice from the Partnership of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof, or until it is advised in writing (the "Advice") by the Partnership that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus. If so directed by the Partnership, each Holder will deliver to the Partnership (at the Partnership's expense) all copies, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of such notice. In the event the Partnership shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 6(c)(i) or Section 6(c)(iii)(D) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or shall have received the Advice. (ii) The Partnership may require a Holder of Transfer Restricted Securities to be included in a Registration Statement to furnish to the Partnership such information as required by law to be disclosed by such Holder in such Registration Statement, and the Partnership may exclude from such Registration Statement the Transfer Restricted Securities of any Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request. SECTION 7. REGISTRATION EXPENSES All expenses incident to the Partnership's performance of or compliance with this Agreement will be borne by the Partnership, regardless of whether a Registration Statement becomes effective, including, without limitation: (i) all registration and filing fees and expenses (including filings made by any Initial Purchaser or Holder with the NASD (and, if applicable, the fees and expenses of any "qualified independent underwriter") and its counsel that may be required by the rules and regulations of the NASD); (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing certificates for the New Senior Notes to be issued in the Exchange Offer and printing of Prospectuses); (iv) all fees and disbursements of counsel for the Partnership; (v) all messenger and delivery services and telephone expenses of the Partnership; and (vi) all fees and disbursements of independent certified -17- public accountants of the Partnership (including the expenses of any special audit and comfort letters required by or incident to such performance). The Partnership will, in any event, bear its internal expenses (including, without limitation, all salaries and expenses of any of the Partnership's officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Partnership. SECTION 8. INDEMNIFICATION (a) The Partnership shall indemnify and hold harmless each Holder, its directors, officers and employees and each Person, if any, who controls such Holder within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act, from and against any and all losses, claims, damages, liabilities, judgments and actions, joint or several, or any action in respect thereof (including, but not limited to, any loss, claim, damage, liability, judgment or action relating to purchases and sales of Notes), to which that Holder, its directors, officers, employees or controlling Persons may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability, judgment or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained (A) in any Registration Statement, Preliminary Prospectus or Prospectus or in any amendment or supplement thereto or (B) in any Blue Sky application or other document prepared or executed by the Partnership (or based upon any written information furnished by the Partnership) specifically for the purpose of qualifying any or all of the Notes under the securities laws of any state or other jurisdiction (any such application, document or information being hereinafter called a "Blue Sky Application") or (ii) the omission or alleged omission to state in any Registration Statement, Preliminary Prospectus or Prospectus, or in any amendment or supplement thereto, or in any Blue Sky Application any material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse such Holder and each director, officer, employee or controlling Person promptly upon demand for any legal or other expenses reasonably incurred by such Holder, director, officer, employee or controlling Person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability, judgment or action as such expenses are incurred; provided, however, that the Partnership shall not be liable in any such case to the extent that any such loss, claim, damage, liability, judgment or action arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged omission made in any Registration Statement, Preliminary Prospectus or Prospectus, or in any such amendment or supplement or in any Blue Sky Application in reliance upon and in conformity with written information furnished to the Partnership by or on behalf of such Holder specifically for inclusion therein. (b) Each Holder, severally and not jointly, shall indemnify and hold harmless the Partnership, the Partnership Policy Committee of the Partnership, the Audit Committee of the Partnership, the employees and officers of the Partnership, the General Partners, the employees and officers of the General Partners, and each Person, if any, who controls the Partnership within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act (collectively, the -18- "Partnership Indemnitees"), from and against any and all losses, claims, damages, liabilities, judgments or actions, joint or several, or any action in respect thereof, to which the Partnership Indemnitees may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability, judgment or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, Preliminary Prospectus or Prospectus or in any amendment or supplement thereto or (ii) the omission or alleged omission to state in any Registration Statement, Preliminary Prospectus or Prospectus, or in any amendment or supplement thereto, or in any Blue Sky Memorandum any material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Partnership by or on behalf of such Holder specifically for inclusion therein and described in Section 8(e), and shall reimburse the Partnership Indemnitee or controlling Person for any legal or other expenses reasonably incurred by the Partnership Indemnitee in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability, judgment or action as such expenses are incurred. The foregoing indemnity agreement is in addition to any liability which any Holder may otherwise have to the Partnership Indemnitees. (c) Promptly after receipt by any indemnified party under this Section 8 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 8 except to the extent it has been materially prejudiced by such failure and, provided further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 8. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel satisfactory to the indemnified party and the payment of all fees and expenses of such counsel shall be the responsibility of the indemnifying party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 8 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation, provided, however, that the indemnified party shall have the right to employ separate counsel to represent all indemnified parties who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the indemnified parties against the indemnifying parties under this Section 8 if, (i) the employment of such counsel shall have been specifically authorized in writing by the indemnifying party, (ii) the indemnifying party shall have failed to assume the defense of such action or employ counsel reasonably satisfactory to the indemnified party or (iii) counsel for any of the indemnified parties shall have reasonably concluded that there may be defenses available to the indemnified parties that are in addition to or in conflict with those available to the indemnifying party. In any case, the indemnifying party shall not, in -19- connection with any one action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) of all indemnified parties, and all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by BOA, in the case of the parties indemnified pursuant to Section 8(a) and by the Partnership, in the case of parties indemnified pursuant to Section 8(b). No indemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding, or (ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with the consent of the indemnifying party or if there be a final judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. (d) If the indemnification provided for in this Section 8 shall for any reason be unavailable or insufficient to hold harmless an indemnified party under Section 8(a) or 8(b) in respect of any loss, claim, damage, liability, judgment or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage, liability, judgment or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Partnership, on the one hand, and the Holders, on the other, from the offering of the Notes or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Partnership, on the one hand, and the Holders, on the other, with respect to the statements or omissions which resulted in such loss, claim, damage, liability, judgment or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Partnership, on the one hand, and the Holders, on the other, with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Notes purchased under the Purchase Agreement (before deducting expenses) received by the Partnership as set forth in the table on the cover page of the Memorandum, on the one hand, and the total net proceeds received by such Holder upon its resale of Notes less the amount paid by such Holder for such Notes, on the other hand, bear to the total sum of such amounts. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Partnership or such Holder, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Partnership and the Holders agree that it would not be just and equitable if contributions pursuant to this Section 8 were to be determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to herein. The -20- amount paid or payable by an indemnified party as a result of the loss, claim, damage, liability, judgment or action in respect thereof, referred to above in this Section 8 shall be deemed to include, for purposes of this Section 8(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8(d), no Holder, and none of its directors, officers, employees or controlling Persons, shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total net proceeds received by such Holder upon its resale of Notes exceeds the sum of the amount paid by such Holder for such Notes and the amount of any damages which such Holder has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders' obligations to contribute as provided in this Section 8(d) are several in proportion to the respective principal amount of Notes held by each of the Holders hereunder and not joint. (e) The Holders severally confirm, and the Partnership acknowledges, that the statements with respect to the offering of the Notes set forth in the bottom paragraph on the cover page of, and the disclosure in the second, fifth and seventh through tenth paragraphs under the caption "Plan of Distribution" in the Memorandum are correct and constitute the only information furnished in writing to the Partnership by or on behalf of the Holders specifically for inclusion in the Memorandum. SECTION 9. RULE 144A The Partnership hereby agrees with each Holder, for so long as any Transfer Restricted Securities remain outstanding and during any period in which the Partnership is not subject to Section 13 or 15(d) of the Exchange Act, to make available to any Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities from such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A. SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATION No Holder may participate in any Underwritten Registration hereunder unless such Holder (a) agrees to sell such Holder's Transfer Restricted Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements. -21- SECTION 11. SELECTION OF UNDERWRITERS For any Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer such offering will be selected by the Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included in such offering; provided, that such investment bankers and managers must be reasonably satisfactory to the Partnership. Such investment bankers and managers are referred to herein as the "managing underwriters." SECTION 12. MISCELLANEOUS (a) Remedies. Each Holder, in addition to being entitled to exercise all rights provided herein, in the Indenture, the Purchase Agreement or granted by law, including recovery of liquidated or other damages, will be entitled to specific performance of its rights under this Agreement. The Partnership agrees that monetary damages (including the Liquidated Damages contemplated hereby) would not be adequate compensation for any loss incurred by reason of a breach by them of the provisions of this Agreement and hereby agree to waive the defense in any action for specific performance that a remedy at law would be adequate. (b) No Inconsistent Agreements. The Partnership will not on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The Partnership is not currently bound by any agreement granting registration rights with respect to its securities that conflicts with the registration rights set forth herein. (c) Adjustments Affecting the Notes. The Partnership will not take any action, or permit any change to occur, with respect to the Notes that would materially and adversely affect the ability of the Holders to Consummate any Exchange Offer. (d) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless (i) in the case of Section 5 hereof and this Section 12(d), the Holders of all outstanding Transfer Restricted Securities and (ii) in the case of all other provisions hereof, the Partnership has obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose securities are being tendered pursuant to the Exchange Offer and that does not affect directly or indirectly the rights of other Holders whose securities are not being tendered pursuant to such Exchange Offer may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities being tendered or registered. -22- (e) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery: (i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and With a copy to: Banc of America Securities, LLC 100 North Tryon Street Charlotte, North Carolina 28255 Attention: Syndicate Operations Telecopy No.: (704) 388-9212 (ii) if to the Initial Purchasers, to the Initial Purchasers' address specified in Section 12(a) of the Purchase Agreement. (iii) if to the Partnership: Northern Border Partners, L.P. c/o Northern Plains Natural Gas Company 1111 South 103rd Street Omaha, Nebraska 68124-1000 Telecopy No.: (402) 398-7871 Attention: Director of Finance All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture. (f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders of Transfer Restricted Securities; provided, however, that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Transfer Restricted Securities in violation of the terms hereof or of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Transfer Restricted -23- Securities in any manner, whether by operation of law or otherwise, such Transfer Restricted Securities shall be held subject to all of the terms of this Agreement, and by owning and holding such Transfer Restricted Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement and, if applicable, the Purchase Agreement, and such Person shall be entitled to receive the benefits hereof. (g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK. (j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable by a court of competent jurisdiction, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (k) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Partnership with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. (l) No Personal Liability. None of the members of the Partnership Policy Committee or the General Partners or the General Partners' directors, officers, employees, partners, incorporators or stockholders, if any, shall have any liability for any of the Partnership's obligations under the notes or the indenture or hereunder or for any claim based on, in respect of, or by reason of, such obligations or their creation. -24- IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. NORTHERN BORDER PARTNERS, L.P. By: /s/ Jerry L. Peters -------------------------------------- Name: Jerry L. Peters Title: Chief Financial and Accounting Officer NORTHERN BORDER INTERMEDIATE LIMITED PARTNERSHIP By: /s/ Jerry L. Peters -------------------------------------- Name: Jerry L. Peters Title: Chief Financial and Accounting Officer BANC OF AMERICA SECURITIES LLC BANC ONE CAPITAL MARKETS, INC. SUNTRUST EQUITABLE SECURITIES By: BANC OF AMERICA SECURITIES LLC By: /s/ Lynn McConnell -------------------------------- Name: Lynn T. McConnell Title: Managing Director EX-10 4 0004.txt MATERIAL CONTRACTS EXHIBIT 10.__ HAYNES AND BOONE, LLP 6/26/00 364-DAY CREDIT AGREEMENT among NORTHERN BORDER PARTNERS, L.P., Borrower BANK OF AMERICA, N.A., Administrative Agent SUNTRUST BANK, Syndication Agent and BANK ONE, NA Documentation Agent, and THE LENDERS NAMED HEREIN, Lenders $75,000,000 DATED AS OF JUNE 28, 2000 BANC OF AMERICA SECURITIES LLC, Lead Arranger and Book Manager NBPLP CREDIT AGREEMENT TABLE OF CONTENTS
Page SECTION 1 DEFINITIONS AND TERMS...........................................................................1 1.1 Definitions.....................................................................................1 1.2 Number and Gender of Words; Other References...................................................12 1.3 Accounting Principles..........................................................................12 SECTION 2 BORROWING PROVISIONS...........................................................................12 2.1 Facility.......................................................................................12 2.2 Terminations, Reductions or Increases of Commitments...........................................12 2.3 Increase in Commitments........................................................................13 2.4 Borrowing Procedure............................................................................14 2.5 Extension of Maturity Date.....................................................................15 SECTION 3 TERMS OF PAYMENT...............................................................................16 3.1 Loan Accounts, Notes, and Payments.............................................................16 3.2 Interest and Principal Payments................................................................16 3.3 Prepayments....................................................................................17 3.4 Interest Options...............................................................................18 3.5 Quotation of Rates.............................................................................18 3.6 Default Rate...................................................................................18 3.7 Interest Recapture.............................................................................18 3.8 Interest Calculations..........................................................................18 3.9 Maximum Rate...................................................................................18 3.10 Interest Periods...............................................................................19 3.11 Conversions....................................................................................19 3.12 Order of Application...........................................................................19 3.13 Sharing of Payments, Etc.......................................................................20 3.14 Offset.........................................................................................20 3.15 Booking Borrowings.............................................................................20 SECTION 4 CHANGE IN CIRCUMSTANCES........................................................................21 4.1 Increased Cost and Reduced Return..............................................................21 4.2 Limitation on Types of Loans...................................................................22 4.3 Illegality.....................................................................................22 4.4 Treatment of Affected Loans....................................................................22 4.5 Compensation...................................................................................23 4.6 Taxes..........................................................................................23 SECTION 5 FEES...........................................................................................25 5.1 Treatment of Fees..............................................................................25 5.2 Fees of Administrative Agent and Arranger......................................................25 5.3 Commitment Fees................................................................................25 5.4 Utilization Fee................................................................................25 SECTION 6 GUARANTY.......................................................................................26 6.1 Guaranty.......................................................................................26 SECTION 7 CONDITIONS PRECEDENT...........................................................................26 7.1 Conditions Precedent to Closing................................................................26 7.2 Conditions Precedent to Each Borrowing.........................................................26
NBPLP CREDIT AGREEMENT (i) SECTION 8 REPRESENTATIONS AND WARRANTIES.................................................................26 8.1 Purpose of Credit Facility.....................................................................26 8.2 Existence, Good Standing, Authority, and Authorizations........................................26 8.3 Subsidiaries...................................................................................27 8.4 Authorization and No Contravention.............................................................27 8.5 Binding Effect.................................................................................27 8.6 Financial Statements...........................................................................27 8.7 Litigation, Claims, Investigations.............................................................27 8.8 Taxes..........................................................................................27 8.9 Environmental Matters..........................................................................28 8.10 Employee Benefit Plans.........................................................................28 8.11 Properties; Liens..............................................................................28 8.12 Government Regulations.........................................................................28 8.13 Transactions with Affiliates...................................................................28 8.14 Material Agreements............................................................................28 8.15 Insurance......................................................................................28 8.16 Compliance with Laws...........................................................................29 8.17 Regulation U...................................................................................29 8.18 Full Disclosure................................................................................29 8.19 No Default.....................................................................................29 SECTION 9 AFFIRMATIVE COVENANTS..........................................................................29 9.1 Use of Proceeds................................................................................29 9.2 Books and Records..............................................................................29 9.3 Items to be Furnished..........................................................................29 9.4 Inspections....................................................................................30 9.5 Taxes..........................................................................................30 9.6 Payment of Obligations.........................................................................31 9.7 Maintenance of Existence, Assets, and Business.................................................31 9.8 Compliance with Laws, etc......................................................................31 9.9 Insurance......................................................................................31 9.10 Preservation and Protection of Rights..........................................................31 9.11 Pari Passu Status..............................................................................31 9.12 Maintenance of Tax Status......................................................................31 SECTION 10 NEGATIVE COVENANTS.............................................................................31 10.1 Debt and Guaranties............................................................................32 10.2 Liens..........................................................................................32 10.3 Transactions with Affiliates...................................................................33 10.4 Assignment.....................................................................................33 10.5 Government Regulations.........................................................................33 10.6 Mergers; Sale of Assets........................................................................33 10.7 Loan and Investments...........................................................................34 10.8 Distributions..................................................................................34 10.9 Limitation on Business Activities..............................................................34 10.10 Certain Amendments to Cash Distribution Policies and Partnership Agreements....................34 10.11 Restrictive Agreements, etc....................................................................34 10.12 Employee Benefit Plans.........................................................................34 10.13 Capitalization Ratio...........................................................................34 SECTION 11 DEFAULT........................................................................................35 11.1 Payment of Obligation..........................................................................35
NBPLP CREDIT AGREEMENT (ii) 11.2 Covenants......................................................................................35 11.3 Debtor Relief..................................................................................35 11.4 Judgments and Attachments......................................................................35 11.5 Misrepresentation..............................................................................35 11.6 Change of Control..............................................................................35 11.7 Default Under Other Debt and Agreements........................................................35 11.8 Employee Benefit Plans.........................................................................36 11.9 Validity and Enforceability of Loan Documents..................................................36 11.10 Environmental Liability........................................................................36 11.11 Dissolution....................................................................................36 SECTION 12 RIGHTS AND REMEDIES............................................................................36 12.1 Remedies Upon Default..........................................................................36 12.2 Loan Party Waivers.............................................................................37 12.3 Performance by Administrative Agent............................................................37 12.4 Delegation of Duties and Rights................................................................37 12.5 Not in Control.................................................................................37 12.6 Course of Dealing..............................................................................38 12.7 Cumulative Rights..............................................................................38 12.8 Application of Proceeds........................................................................38 12.9 Certain Proceedings............................................................................38 12.10 Expenditures by Lenders........................................................................38 12.11 INDEMNIFICATION................................................................................38 SECTION 13 AGREEMENT AMONG LENDERS........................................................................39 13.1 Administrative Agent...........................................................................39 13.2 Expenses.......................................................................................40 13.3 Proportionate Absorption of Losses.............................................................40 13.4 Delegation of Duties; Reliance.................................................................41 13.5 Limitation of Liability........................................................................41 13.6 Default........................................................................................42 13.7 Limitation of Liability........................................................................42 13.8 Relationship of Lenders........................................................................42 13.9 Benefits of Agreement..........................................................................42 13.10 Agents.........................................................................................43 13.11 Obligations Several............................................................................43 SECTION 14 MISCELLANEOUS..................................................................................43 14.1 Headings.......................................................................................43 14.2 Nonbusiness Days...............................................................................43 14.3 Communications.................................................................................43 14.4 Form and Number of Documents...................................................................43 14.5 Exceptions to Covenants........................................................................43 14.6 Survival.......................................................................................44 14.7 Governing Law..................................................................................44 14.8 Invalid Provisions.............................................................................44 14.9 Entirety.......................................................................................44 14.10 Jurisdiction; Venue; Service of Process........................................................44 14.11 Amendments, Consents, Conflicts, and Waivers...................................................45 14.12 Multiple Counterparts..........................................................................45 14.13 Successors and Assigns; Assignments and Participations.........................................45 14.14 Confidentiality................................................................................48 14.15 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances....................48
NBPLP CREDIT AGREEMENT (iii) 14.16 No General Partners' Liability.................................................................48
NBPLP CREDIT AGREEMENT (iv) SCHEDULES AND EXHIBITS Schedule 2.1 - Lenders and Commitments Schedule 7.1 - Conditions Precedent to Closing Schedule 8.3 - Subsidiaries; Partnership Interests Schedule 10.1 - Existing Debt Schedule 13.3 - Address for Notices Exhibit A - Form of Note Exhibit B-1 - Form of Borrowing Notice Exhibit B-2 - Form of Conversion Notice Exhibit C - Form of Guaranty Exhibit D - Form of Compliance Certificate Exhibit E - Form of Assignment and Acceptance Agreement Exhibit F-1 - Form of Opinion of Counsel of Borrower Exhibit F-2 - Form of Opinion of General Counsel Exhibit F-3 - Form of Opinion of Counsel of Pan Border Exhibit F-4 - Form of Opinion of Counsel of Northwest Border
NBPLP CREDIT AGREEMENT (v) 364-DAY CREDIT AGREEMENT THIS CREDIT AGREEMENT is entered into as of June 28, 2000, among NORTHERN BORDER PARTNERS, L.P., a Delaware limited partnership ("BORROWER"), NORTHERN BORDER INTERMEDIATE LIMITED PARTNERSHIP, a Delaware limited partnership ("INTERMEDIATE PARTNERSHIP"), Lenders (hereinafter defined), BANK OF AMERICA, N.A., as Administrative Agent (hereinafter defined) for itself and the other Lenders, SUNTRUST BANK, as Syndication Agent (hereinafter defined) and BANK ONE, NA, as Documentation Agent (hereinafter defined). RECITALS A. Borrower has requested that Lenders extend credit to Borrower, providing for a revolving loan in the aggregate principal amount of $75,000,000, for repayment of existing indebtedness, working capital, capital expenditures, permitted investments and other lawful purposes. B. Upon and subject to the terms and conditions of this Agreement, Lenders are willing to extend such credit to Borrower. Accordingly, in consideration of the mutual covenants contained herein, the parties agree as follows: SECTION 1 DEFINITIONS AND TERMS. 1.1 DEFINITIONS. As used herein: ACQUISITION means any transaction or series of related transactions for the purpose of, or resulting in, directly or indirectly, (a) the acquisition by a Person of all or substantially all of the assets of another Person or of any business or division of another Person, (b) the acquisition by a Person of more than 50% of any class of Voting Stock (or similar ownership interests) of any other Person (provided that, formation or organization of any entity shall not constitute an "Acquisition" to the extent that the amount of the loan, advance, investment, or capital contribution in such entity constitutes a permitted investment under SECTION 10.7); or (c) a merger, consolidation, amalgamation, or other combination by any Person with another Person if a Loan Party is the surviving entity; provided that, in any merger involving Borrower, Borrower must be the surviving entity. ADMINISTRATIVE AGENT means Bank of America, N.A., and its permitted successors or assigns as "Administrative Agent" for Lenders under the Loan Documents. AFFILIATE of any Person means any other individual or entity who directly or indirectly controls, or is controlled by, or is under common control with, such Person, and, for purposes of this definition only, "control," "controlled by," and "under common control with" mean possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of voting securities, by contract, or otherwise). AGENTS means, collectively, Administrative Agent, Syndication Agent and Documentation Agent. AGREEMENT means this Revolving Credit Agreement (as the same may hereafter be amended, modified, supplemented, or restated from time to time). APPLICABLE LENDING OFFICE means, for each Lender and for each Type of Borrowing, the "Lending Office" of such Lender (or an affiliate of such Lender) designated on SCHEDULE 13.3 attached hereto or such other office that such Lender (or an affiliate of such Lender) may from time to time specify to Administrative Agent and Borrower by written notice in accordance with the terms hereof. NBPLP CREDIT AGREEMENT 1 APPLICABLE AMOUNT AND APPLICABLE MARGIN means, on any date of determination, with respect to Borrowings under the Facility and commitment fees and utilization fees under the Facility the following annualized rates (stated in terms of basis points ("bps")) that correspond to the ratings established by both S&P and Moody's applicable to the Borrower's long-term senior unsecured non-credit enhanced indebtedness for borrowed money ("INDEX DEBT") at such date of determination:
APPLICABLE MARGIN --------------------------------- BASE RATE EURODOLLAR RATE UNUSED SENIOR UNSECURED BORROWINGS BORROWINGS UTILIZATION FEE COMMITMENT DEBT RATING (bps) (bps) (bps) FEE (bps) - ------------------------- ----------------- --------------------- ------------------ ------------------- Category 1 Greater than or 0.0 50.0 12.5 10.0 equal to A-/A3 Category 2 0.0 62.5 12.5 12.5 BBB+/Baa1 Category 3 0.0 75.0 12.5 15.0 BBB/Baa2 Category 4 0.0 87.5 12.5 20.0 BBB-/Baa3 Category 5 0.0 112.5 12.5 25.0 Less than BBB- /Baa3
For purposes of determining the Applicable Amount and the Applicable Margin, with respect to the debt ratings criteria: (i) if neither Moody's nor S&P shall have in effect a rating for Index Debt (other than by reason of the circumstances referred to in the last sentence of this definition), then both such rating agencies will be deemed to have established ratings for Index Debt in Category 5; (ii) if either of Moody's or S&P shall fail to have in effect a rating for Index Debt (other than by reason of the circumstances referred to in the last sentence of this definition), then such rating agency shall be deemed to have established a rating in Category 5; (iii) if the ratings established by Moody's and S&P shall differ, the Applicable Amount and the Applicable Margin shall be based on the higher of the two ratings unless one of the ratings is two or more Categories lower than the other, in which case the Applicable Amount and the Applicable Margin shall be determined by reference to the Category next above that of the lower of the two ratings; and (iv) if any rating established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change. If the rating system of either Moody's or S&P shall change, or if either Moody's or S&P shall cease to be in the business of rating corporate debt obligations, Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating system or the unavailability of ratings from such rating agency and pending the effectiveness of such amendment, the Applicable Amount and the Applicable Margin shall be determined by reference to the rating most recently in effect prior to such change or cessation. ARRANGER means Banc of America Securities LLC, and its successors and assigns, in its capacity as lead arranger and book manager under the Loan Documents. NBPLP CREDIT AGREEMENT 2 AUTHORIZATIONS means all filings, recordings, and registrations with, and all validations or exemptions, approvals, orders, authorizations, consents, franchises, licenses, certificates, and permits from, any Governmental Authority. BANK OF AMERICA means Bank of America, N.A., in its individual capacity as a Lender, and its successors and assigns. BASE RATE means, for any day, the rate per annum equal to the higher of (a) the Federal Funds Rate for such day plus one-half of one percent (0.5%) and (b) the Prime Rate for such day. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective on the effective date of such change in the Prime Rate or the Federal Funds Rate. BASE RATE BORROWING means a Borrowing bearing interest at the sum of the Base Rate plus the Applicable Margin for Base Rate Borrowings. BORROWER is defined in the preamble to this Agreement. BORROWING means any amount disbursed (a) by one or more Lenders under the Loan Documents, whether such amount constitutes an original disbursement of funds, or the continuation or conversion of an amount outstanding, or (b) by any Lender in accordance with, and to satisfy the obligations of any Loan Party under, any Loan Document. BORROWING DATE is defined in SECTION 2.5(a). BORROWING NOTICE means a request for Borrowing made pursuant to SECTION 2.5(a), substantially in the form of EXHIBIT B-1. BUSINESS DAY means (a) for all purposes, any day other than Saturday, Sunday, and any other day on which commercial banking institutions are required or authorized by Law to be closed in Dallas, Texas, and (b) in addition to the foregoing, in respect of any Eurodollar Rate Borrowing, a day on which dealings in United States dollars are conducted in the London interbank market and commercial banks are open for international business in London. CAPITAL LEASE means any capital lease or sublease which should be capitalized on a balance sheet in accordance with GAAP. CAPITALIZATION means, the sum of Funded Debt plus partners' capital, determined in accordance with GAAP. CAPITALIZATION RATIO means, at any date of determination thereof, (a) the Funded Debt outstanding on such date to (b) Capitalization outstanding on such date, each determined for Borrower and the Intermediate Partnership on a consolidated basis without regard to any other Subsidiaries of either which would otherwise be consolidated under the requirements of GAAP. CHANGE OF CONTROL means (i) the failure of Subsidiaries of Enron Corp. and/or the Williams Companies to own, free and clear of all Liens, general partnership interests in Borrower and the Intermediate Partnership such that the aggregate voting rights of such Persons is greater than 50% of the outstanding voting rights of all general partners of Borrower and the Intermediate Partnership, or (ii) the failure of Borrower directly, or indirectly through Intermediate Partnership, to own as a general partner, free and clear of all Liens, at least 60% of the partnership interests in NBPC. NBPLP CREDIT AGREEMENT 3 CLOSING DATE means the date upon which this Agreement has been executed by Borrower, Lenders, and Administrative Agent and all conditions precedent specified in SECTION 7.1 have been satisfied or waived. CODE means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder. COMMITMENT means, on any date of determination, the sum of all Committed Sums then in effect for all Lenders in respect of the Facility. COMMITMENT PERCENTAGE means, at any date of determination, for any Lender, the proportion (stated as a percentage) that its Committed Sum bears to the aggregate Committed Sums of all Lenders. COMMITMENT USAGE means, at the time of any determination thereof, the aggregate Principal Debt. COMMITTED SUM means for any Lender, with respect to the Facility, at any date of determination occurring prior to the Termination Date for the Facility, the amount stated beside such Lender's name on the most-recently amended SCHEDULE 2.1 to this Agreement (which amount is subject to increase, reduction, or cancellation in accordance with the Loan Documents). COMMON UNIT means units representing limited partnership interests in Borrower offered for sale to the public. COMPLIANCE CERTIFICATE means a certificate signed by a Responsible Officer, substantially in the form of EXHIBIT D. CONSEQUENTIAL LOSS means any loss or expense which any Lender may reasonably incur in respect of a Eurodollar Rate Borrowing as a consequence of any event described in SECTION 4.5. CONVERSION NOTICE means a request pursuant to SECTION 3.11, substantially in the form of EXHIBIT B-2. CURRENT FINANCIALS means, at the time of any determination thereof, the more recently delivered to Lenders of either (a) the Financial Statements of the type described in SECTIONS 9.3(b) and 9.3(C) for the fiscal year ended December 31, 1999, or (b) the most recent Financial Statements required to be delivered under SECTIONS 9.3(b) and 9.3(C). DEBT means (without duplication), for any Person, the sum of the following: (a) all liabilities, obligations, and indebtedness of such Person which in accordance with GAAP should be classified upon such Person's balance sheet as liabilities in respect of (i) money borrowed, including, without limitation, the Principal Debt, (ii) obligations of such Person under Capital Leases, and (iii) obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations, and obligations under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business); (b) the face amount of all letters of credit and banker's acceptances issued for the account of such Person, and without duplication, all drafts drawn and unpaid thereunder; (c) any liability with respect to obligations to deliver goods or services in consideration of advance payments therefor, including any liability with respect to payments received in consideration of oil, gas, or other minerals yet to be acquired or produced at the time of payment (such as obligations under contracts to deliver oil or gas in return for payments already received and production payments created by such Person or for the creation of which such Person directly or indirectly received payment); (d) all obligations of the type referred to in CLAUSES (a) through (c) preceding of other Persons for the payment of which such Person is responsible or liable as obligor, guarantor, or otherwise; and (e) all obligations of the type referred to in CLAUSES (a) through (d) preceding of other Persons secured by any Lien on any property or asset of such Person whether or not such NBPLP CREDIT AGREEMENT 4 obligation is assumed by such Person (except obligations of others secured by Liens, neither assumed nor guaranteed by such Person nor on which it customarily pays interest, existing upon real estate or rights in or relating to real estate acquired by such Person for substation, metering station, gathering line, transmission line, transportation line, distribution line or right of way purposes, and any Liens reserved in leases for rent and for compliance with the terms of the leases in the case of leasehold estates, to the extent that any such Lien referred to in this CLAUSE (e) does not materially impair the use of the property), and, the amount of such obligation being deemed to be the lesser of the value of such property or assets or the amount of the obligation so secured. The Debt of any Person shall include the Debt of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Debt provide that such Person is not liable therefor. DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States of America and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent transfer or conveyance, suspension of payments, or similar Laws from time to time in effect affecting the Rights of creditors generally. DEFAULT is defined in SECTION 11. DEFAULT RATE means an interest rate equal to the lesser of (a) Base Rate plus the Applicable Margin, if any, applicable to Base Rate Borrowings plus 2% per annum and (b) the Maximum Rate; provided, however, that with respect to a Eurodollar Rate Borrowing, the Default Rate shall be an interest rate equal to the lesser of (x) the interest rate (including any Applicable Margin) otherwise applicable to such Borrowing plus 2% per annum, and (y) the Maximum Rate. DERIVATIVE TRANSACTION means (a) any rate, basis, commodity, currency, debt or equity swap, (b) any cap, collar or floor agreement, (c) any rate, basis, commodity, currency, debt or equity exchange or forward agreement, (d) any rate, basis, commodity, currency, debt or equity option, (e) any other similar agreement, (f) any option to enter into any of the foregoing, (g) any master agreement or other agreement providing for any of the foregoing and (h) any combination of any of the foregoing. DETERMINATION DATE means each of June 26, 2001 and June 25, 2002. DISTRIBUTION for any Person means, with respect to any shares of any capital stock or other equity securities issued by such Person, (a) the retirement, redemption, purchase, or other acquisition for value of any such securities, (b) the declaration or payment of any dividend on or with respect to any such securities, and (c) any other payment by such Person with respect to such securities. DOCUMENTATION AGENT means Bank One, NA and its respective permitted successors and assigns as "Documentation Agent" under the Loan Documents. DOLLARS and the symbol $ means lawful money of the United States of America. ELIGIBLE ASSIGNEE means a Lender or any other Person approved by Administrative Agent (which approval will not be unreasonably withheld or delayed by Administrative Agent) and, unless a Default or Potential Default has occurred and is continuing at the time any assignment is effected in accordance with SECTION 14.13, Borrower, such approval not to be unreasonably withheld or delayed by Borrower and such approval to be deemed given by Borrower if no objection is received by the assigning Lender and Administrative Agent from Borrower within five Business Days after notice of such proposed assignment has been provided by the assigning Lender to Borrower; provided, however, that neither Borrower nor any Affiliate of Borrower shall qualify as an Eligible Assignee. NBPLP CREDIT AGREEMENT 5 EMPLOYEE PLAN means an employee pension benefit plan covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and established or maintained by any Loan Party, Subsidiary thereof, or ERISA Affiliate, but not including any Multiemployer Plan. ENVIRONMENTAL LAW means any applicable Law that relates to (a) the condition or protection of air, groundwater, surface water, soil, or other environmental media, (b) the environment, including natural resources or any activity which affects the environment, (c) the regulation of any pollutants, contaminants, wastes, substances, and Hazardous Substances, or (d) the Release or threatened Release of Hazardous Substances. ENVIRONMENTAL LIABILITY means any obligation, liability (including, without limitation, any strict liability), loss, fine, penalty, charge, Lien, damage, cost, or expense of any kind to the extent that it results (a) from any violation of or any obligation or liability under any Environmental Law, (b) from the presence, Release, or threatened Release of any Hazardous Substance, or (c) from actual or threatened damages to natural resources. ERISA means the Employee Retirement Income Security Act of 1974, as amended, and the regulations and rulings thereunder. ERISA AFFILIATE means any company or trade or business (whether or not incorporated) which, for purposes of Title IV of ERISA, is, or has been within the past six years, a member of any Loan Party's controlled group or which is, or has been within the past six years, under common control with any Loan Party within the meaning of Section 414(b), (c), (m), or (o) of the Code. ERISA EVENT means any of the following: (a) the occurrence of a Reportable Event; (b) the application for a minimum funding waiver with respect to an Employee Plan, or becoming obligated to file with the PBGC a notice of failure to make a required payment with respect to any Employee Plan; (c) the provision by the administrator of any Employee Plan of a notice of intent to terminate such Employee Plan; (d) the withdrawal by any Loan Party, Subsidiary thereof, or ERISA Affiliate, in whole or in part, from a Multiemployer Plan; (e) the occurrence of any condition (under ERISA, the Code, or otherwise) for the imposition of a Lien in favor of the PBGC on the assets of any Loan Party, Subsidiary thereof, or ERISA Affiliate; (f) the adoption of an amendment to an Employee Plan requiring the provision of security to such Employee Plan; (g) institution by the PBGC of proceedings to terminate or impose liability in respect of (other than premiums under Section 4007 of ERISA), any Employee Plan, or the occurrence of any event or condition that constitutes grounds for termination of, or the appointment of a trustee to administer, any Employee Plan; (h) institution by the sponsor of a Multiemployer Plan of proceedings to terminate or reorganize such Multiemployer Plan, or to impose withdrawal liability on any Loan Party, Subsidiary thereof, or ERISA Affiliate with respect to such Multiemployer Plan; (i) the cessation of operations at a facility of any Loan Party, Subsidiary thereof, or ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; or (j) any Loan Party, Subsidiary thereof, or ERISA Affiliate has engaged in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code). EURODOLLAR RATE means, for any Eurodollar Rate Borrowing for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Dow Jones Markets Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term "Eurodollar Rate" shall mean, for any Eurodollar Rate Borrowing for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%). NBPLP CREDIT AGREEMENT 6 EURODOLLAR RATE BORROWING means a Borrowing bearing interest at the sum of the Eurodollar Rate plus the Applicable Margin for Eurodollar Rate Borrowings. EXISTING CREDIT AGREEMENTS means (a) that certain Credit Agreement dated as of November 6, 1997 among Borrower, Canadian Imperial Bank of Commerce as administrative agent and the lenders therein named, and (b) that certain Credit Agreement dated as of December 15, 1999 among Borrower, SunTrust Bank, Atlanta, as administrative agent and the lenders therein named. EXHIBIT means an exhibit to this Agreement unless otherwise specified. FACILITY means the credit facility as described in and subject to the limitations set forth in SECTION 2.1 hereof. FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined (which determination shall be conclusive and binding, absent manifest error) by Administrative Agent to be equal to the weighted average of the rates on overnight Federal funds transactions with member banks of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to Administrative Agent (in its individual capacity) on such day on such transactions as determined by Administrative Agent (which determination shall be conclusive and binding, absent manifest error). FINANCIAL STATEMENTS is defined in SECTION 9.3(a). FUNDED DEBT means (without duplication), for any Person, the sum of the following: (a) all liabilities, obligations, and indebtedness of such Person which in accordance with GAAP should be classified upon such Person's balance sheet as liabilities in respect of (i) money borrowed, including, without limitation, the Principal Debt, (ii) obligations of such Person under Capital Leases, and (iii) obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations, and obligations under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business); (b) all reimbursement obligations with respect to letters of credit, banker's acceptances, surety bonds and similar instruments; (c) any liability with respect to obligations to deliver goods or services in consideration of advance payments therefor, including any liability with respect to payments received in consideration of oil, gas, or other minerals yet to be acquired or produced at the time of payment (such as obligations under contracts to deliver oil or gas in return for payments already received and production payments created by such Person or for the creation of which such Person directly or indirectly received payment); (d) all obligations of the type referred to in CLAUSES (a) through (c) preceding of other Persons for the payment of which such Person is responsible or liable as obligor, guarantor, or otherwise; and (e) all obligations of the type referred to in CLAUSES (a) through (d) preceding of other Persons secured by any Lien on any property or asset of such Person whether or not such obligation is assumed by such Person (except obligations of others secured by Liens, neither assumed nor guaranteed by such Person nor on which it customarily pays interest, existing upon real estate or rights in or relating to real estate acquired by such Person for substation, metering station, gathering line, transmission line, transportation line, distribution line or right of way purposes, and any Liens reserved in leases for rent and for compliance with the terms of the leases in the case of leasehold estates, to the extent that any such Lien referred to in this CLAUSE (e) does not materially impair the use of the property), and the amount of such obligation being deemed to be the lesser of the value of such property or assets or the amount of the obligation so secured. The Funded Debt of any Person shall include the Funded Debt of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result NBPLP CREDIT AGREEMENT 7 of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Funded Debt provide that such Person is not liable therefor. GAAP means generally accepted accounting principles of the Accounting Principles Board of the American Institute of Certified Public Accountants and the Financial Accounting Standards Board which are applicable from time to time. GENERAL PARTNER means any of Northern Plains, Pan Border, Northwest Border, any other general partner of Borrower and each of their successors and assigns in such capacity. GOVERNMENTAL AUTHORITY means any (a) local, state, municipal, or federal judicial, executive, or legislative instrumentality, (b) private arbitration board or panel, or (c) central bank. GUARANTOR means Intermediate Partnership. GUARANTY means (a) a Guaranty in substantially the form and upon the terms of EXHIBIT C, executed and delivered by any Person pursuant to the requirements of the Loan Documents; and (b) any amendments, modifications, supplements, restatements, ratifications, or reaffirmations of any Guaranty made in accordance with the Loan Documents. HAZARDOUS SUBSTANCE means (a) any substance that is designated, defined, or classified as a hazardous waste, hazardous material, pollutant, contaminant, or toxic or hazardous substance, or that is otherwise regulated, under any Environmental Law, including without limitation, any hazardous substance within the meaning of Section 101(14) of CERCLA, (b) petroleum, oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel, and other petroleum hydrocarbons, (c) asbestos and asbestos-containing materials in any form, (d) polychlorinated biphenyls, or (e) urea formaldehyde foam. INTEREST PERIOD is determined in accordance with SECTION 3.10. INTERMEDIATE PARTNERSHIP is defined in the recitals to this Agreement. INTERMEDIATE PARTNERSHIP AGREEMENT means that certain Amended and Restated Agreement of Limited Partnership of Northern Border Intermediate Limited Partnership dated as of October 1, 1993 as the same may have been or may hereafter be amended, supplemented, restated or otherwise modified from time to time. LAWS means all applicable statutes, laws, treaties, ordinances, tariff requirements, rules, regulations, orders, writs, injunctions, decrees, judgments, opinions, or interpretations of any Governmental Authority. LENDERS means, on any date, the financial institutions named on SCHEDULE 2.1 (as the same may be amended from time to time by Administrative Agent to reflect the assignments made in accordance with SECTION 14.13(b) of this Agreement), and subject to the terms and conditions of this Agreement, and their respective successors and assigns (but not any Participant who is not otherwise a party to this Agreement). LIEN means any lien, mortgage, security interest, pledge, assignment, charge, title retention agreement, encumbrance of any kind, Right or arrangement with or for the benefit of any creditor (other than under or relating to subordination or other intercreditor arrangements) to have its claim satisfied out of any property or assets, or the proceeds therefrom, prior to the general creditors of the owner thereof. LIMITED PARTNERSHIP UNITS means Common Units and any other units representing a limited partner's interest in Borrower. LITIGATION means any action by or before any Governmental Authority. NBPLP CREDIT AGREEMENT 8 LOAN DOCUMENTS means (a) this Agreement, the Notes, and each Guaranty, (b) all agreements, documents, or instruments in favor of Agents or Lenders now or hereafter delivered pursuant to this Agreement or otherwise delivered in connection with all or any part of the Obligation, and (c) any and all future renewals, extensions, restatements, reaffirmations, or amendments of, or supplements to, all or any part of the foregoing. LOAN PARTIES means, on any date of determination, Borrower and all Guarantors. MATERIAL ADVERSE EVENT means any set of one or more circumstances or events which, individually or collectively, result in any (a) material impairment of the ability of any Loan Party to perform any of its payment or other material obligations under the Loan Documents or the ability of Administrative Agent or any Lender to enforce any such obligations or any of their respective Rights under the Loan Documents, (b) material and adverse effect on the business, properties, condition (financial or otherwise), or results of operations of any Loan Party, NBPC, or any Loan Party and its Subsidiaries taken as a whole, or (c) a Default or Potential Default. MATERIAL SUBSIDIARY means any Subsidiary the assets of which comprised more than 5% of consolidated assets of Borrower and its Subsidiaries at the end of the fiscal year of Borrower immediately prior to the date of determination, or the gross revenue of which for any of the three fiscal years of Borrower immediately prior to the date of determination comprised more than 5% of consolidated gross revenue, all as determined by reference to the applicable financial statements of such Subsidiary and Borrower. MAXIMUM AMOUNT and MAXIMUM RATE respectively mean, for each Lender, the maximum non-usurious amount and the maximum non-usurious rate of interest which, under applicable Law, such Lender is permitted to contract for, charge, take, reserve, or receive on the Obligation. MOODY'S means Moody's Investor Service, Inc. or any successor thereto. MULTIEMPLOYER PLAN means a multiemployer plan as defined in Sections 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code to which Borrower or any of its Subsidiaries, or any ERISA Affiliate of Borrower or any of its Subsidiaries is making, has made, is accruing, or has accrued, an obligation to make contributions or has, within any of the preceding five plan years, made or accrued an obligation to make contributions. MULTI-YEAR REVOLVING AGREEMENT means that certain Revolving Credit Agreement dated of even date herewith among Borrower, Intermediate Partnership, Administrative Agent and Lenders. NBPC means Northern Border Pipeline Company, a Texas general partnership. NBPC CAPITALIZATION RATIO means the ratio calculated in accordance with SECTION 6.3 of the Credit Agreement dated June 16, 1997 among NBPC, First National Bank of Chicago, as Agent, and the Lenders therein defined, as in effect on the date hereof, without regard to whether said Credit Agreement is amended or ceases to be in effect after the date hereof. NORTHERN BORDER PARTNERSHIP AGREEMENT means that certain General Partnership Agreement relating to the formation of NBPC effective as of March 9, 1978 as heretofore amended, modified and supplemented and as such agreement may hereafter from time to time be further amended, modified or supplemented. NORTHERN PLAINS means Northern Plains Natural Gas Company, a Delaware corporation. NORTHWEST BORDER means Northwest Border Pipeline Company, a Delaware corporation. NBPLP CREDIT AGREEMENT 9 NOTE means a promissory note substantially in the form of EXHIBIT A, and all renewals and extensions of all or any part thereof. OBLIGATION means all present and future indebtedness, liabilities, and obligations, and all renewals and extensions thereof, or any part thereof, now or hereafter owed to Administrative Agent, any other Agent, any Lender, or any Affiliate of any Lender by any Loan Party or any Subsidiary thereof arising from, by virtue of, or pursuant to any Loan Document, together with all interest accruing thereon, fees, costs, and expenses (including, without limitation, all attorneys' fees and expenses incurred in the enforcement or collection thereof) payable under the Loan Documents. PAN BORDER means Pan Border Gas Company, a Delaware corporation. PARTICIPANT is defined in SECTION 14.13(e). PARTNERSHIP AGREEMENT means the Amended and Restated Agreement of Limited Partnership of Northern Border Partners, L.P., dated as of October 1, 1993 as the same may have been or may hereafter be amended, supplemented, restated or otherwise modified from time to time. PBGC means the Pension Benefit Guaranty Corporation, or any successor thereof, established pursuant to ERISA. PERMITTED LIENS means Liens permitted under SECTION 10.2 as described in such Section. PERSON means any individual, entity, or Governmental Authority. POTENTIAL DEFAULT means the occurrence of any event or existence of any circumstance which, with the giving of notice or lapse of time or both, would become a Default. PRIME RATE means the per annum rate of interest established from time to time by Bank of America, N.A., as its prime rate, which rate may or may not be the lowest rate of interest charged by Bank of America, N.A. to its customers. PRINCIPAL DEBT means, on any date of determination, the aggregate unpaid principal balance of all Borrowings under the Facility. PRO RATA or PRO RATA PART, for each Lender, means on any date of determination (a) for purposes of sharing any amount or fee payable to any Lender in respect of the Facility the proportion which the portion of the Principal Debt for the Facility owed to such Lender bears to the Principal Debt under the Facility owed to all Lenders at the time in question, and (b) for all other purposes, the proportion which the portion of the Principal Debt owed to such Lender bears to the Principal Debt owed to all Lenders at the time in question, or if no Principal Debt is outstanding, then the proportion that the aggregate of such Lender's Committed Sum then in effect under the Facility bears to the Commitment then in effect. REGISTER is defined in SECTION 14.13(c). REGULATION T means Regulation T of the Board of Governors of the Federal Reserve System, as amended. REGULATION U means Regulation U of the Board of Governors of the Federal Reserve System, as amended. REGULATION X means Regulation X of the Board of Governors of the Federal Reserve System, as amended. NBPLP CREDIT AGREEMENT 10 RELEASE means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposal, deposit, dispersal, migrating, or other movement into the air, ground, or surface water, or soil. REPORTABLE EVENT shall have the meaning specified in Section 4043 of ERISA or the regulations issued thereunder in connection with an Employee Plan, excluding events for which the notice requirement is waived under applicable PBGC regulations other than those events described in sections 4043.21, 4043.24, and 4043.28 of such regulations, including each such provision as it may subsequently be renumbered. REPORTING ENTITIES is defined in SECTION 8.6. REPRESENTATIVES means representatives, officers, directors, employees, attorneys, and agents. REQUIRED LENDERS means (a) on any date of determination on and after the Closing Date and prior to the date of the initial Borrowing Date under the Loan Documents, those Lenders holding 51% or more of the Commitment; (b) on any date of determination on and after the date of the initial Borrowing Date under the Loan Documents and prior to the Termination Date for the Facility, those Lenders holding 51% of the Commitment; and (c) on any date of determination on or after the Termination Date for the Facility, those Lenders holding 51% or more of the Principal Debt. RESPONSIBLE OFFICER means the chief executive officer, chief financial officer, senior vice president, or treasurer of Borrower, or, for all purposes under the Loan Documents, any other officer designated from time to time by the Partnership Policy Committee of Borrower, which designated officer is acceptable to Administrative Agent. REVOLVING TERMINATION DATE means, the earlier of (i) June 26, 2001 (or such later date as may be established pursuant to SECTION 2.5), and (ii) the effective date of any other termination, cancellation, or acceleration of all commitments to lend under the Facility. RIGHTS means rights, remedies, powers, privileges, and benefits. ROLLING PERIOD means, on any date of determination, the most recent four fiscal quarters ended on March 31, June 30, September 30, or December 31 (as the case may be). S&P means Standard and Poor's Rating Group (a division of McGraw-Hill, Inc.). SCHEDULE means, unless specified otherwise, a schedule attached to this Agreement, as the same may be supplemented and modified from time to time in accordance with the terms of the Loan Documents. SUBSIDIARY of any Person means (a) any entity of which an aggregate of more than 50% (in number of votes) of the stock is owned of record or beneficially, directly or indirectly, by such Person, or (b) any partnership (limited or general) of which such Person shall, directly or indirectly, at any time be the controlling general partner determined in accordance with GAAP or own fifty percent (50%) or more of the issued and outstanding partnership interests. TAXES means, for any Person, taxes, assessments, or other governmental charges or levies imposed upon such Person, its income, or any of its properties, franchises, or assets. TERMINATION DATE means the earlier of (i) the Revolving Termination Date (or such later date as may be established pursuant to SECTION 3.2(b)), and (ii) the effective date of any other termination, cancellation, or acceleration of all commitments to lend under the Facility. NBPLP CREDIT AGREEMENT 11 TYPE means any type of Borrowing determined with respect to the interest option applicable thereto. VOTING STOCK means securities (as such term is defined in Section 2(1) of the Securities Act of 1933, as amended) of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the corporate directors (or Persons performing similar functions). 1.2 NUMBER AND GENDER OF WORDS; OTHER REFERENCES. Unless otherwise specified in the Loan Documents, (a) where appropriate, the singular includes the plural and vice versa, and words of any gender include each other gender, (b) heading and caption references may not be construed in interpreting provisions, (c) monetary references are to currency of the United States of America, (d) section, paragraph, annex, schedule, exhibit, and similar references are to the particular Loan Document in which they are used, (e) references to "telecopy," "facsimile," "fax," or similar terms are to facsimile or telecopy transmissions, (f) references to "including" mean including without limiting the generality of any description preceding that word, (g) the rule of construction that references to general items that follow references to specific items are limited to the same type or character of those specific items is not applicable in the Loan Documents, (h) references to any Person include that Person's heirs, personal representatives, successors, trustees, receivers, and permitted assigns, (i) references to any Law include every amendment or supplement to it, rule and regulation adopted under it, and successor or replacement for it, and (j) references to any Loan Document or other document include every renewal and extension of it, amendment and supplement to it, and restatement, replacement or substitution for it. 1.3 ACCOUNTING PRINCIPLES. All accounting and financial terms used in the Loan Documents and the compliance with each financial covenant therein shall be determined in accordance with GAAP, and, all accounting principles shall be applied on a consistent basis so that the accounting principles in a current period are comparable in all material respects to those applied during the preceding comparable period. SECTION 2 BORROWING PROVISIONS. 2.1 FACILITY. Each Lender severally, but not jointly, agrees to lend to Borrower such Lender's Commitment Percentage of one or more Borrowings under the Facility not to exceed such Lender's Committed Sum under the Facility, which Borrowings may be repaid and reborrowed from time to time in accordance with the terms and provisions of the Loan Documents; provided that, (a) each such Borrowing must occur on a Business Day and no later than the Business Day immediately preceding the Revolving Termination Date for the Facility; (b) each such Borrowing shall be in an amount not less than $5,000,000 or a greater integral multiple of $1,000,000; (c) on any date of determination, the Commitment Usage shall never exceed the Commitment; and (d) amounts repaid on or after the Revolving Termination Date may not be reborrowed. 2.2 TERMINATIONS, REDUCTIONS OR INCREASES OF COMMITMENTS. (a) Voluntary Commitment Reduction. Without premium or penalty, and upon giving not less than three Business Days prior written and irrevocable notice to Administrative Agent, Borrower may terminate in whole or in part the unused portion of the Commitment, provided that: (i) each partial termination of the Commitment shall be in an amount of not less than $5,000,000 or a greater integral multiple of $1,000,000; and (ii) on any date of determination, the amount of the Commitment may not be reduced below the Commitment Usage. At the time of any commitment termination under this SECTION 2.2, Borrower shall pay to Administrative Agent, for the account of each Lender any amounts that may then be due under SECTION 3.3(c), all accrued and unpaid fees then due and payable under this Agreement, the interest attributable to the amount of that reduction, and any related Consequential Loss. Any part of the Commitment that is terminated may not be reinstated. NBPLP CREDIT AGREEMENT 12 (b) Revolving Termination Date Effect. Effective immediately upon the Revolving Termination Date, the Commitment shall be equal to the amount of Principal Debt then outstanding, provided however, that any amount repaid after the Revolving Termination Date may not be reborrowed. (c) Ratable Allocation of Commitment Reductions. Each reduction of the Commitment under this SECTION 2.2 shall be allocated among the Lenders in accordance with their respective Commitment Percentages under the Facility. 2.3 INCREASE IN COMMITMENTS. (a) Prior to the Revolving Termination Date, Borrower may, by written notice to the Administrative Agent (which shall promptly deliver a copy of each to the Lenders), request that the Commitment be increased by an amount not less than $10,000,000 for any such increase; provided (i) that such request for increase may be given only once during the term hereof and (ii) that after giving effect to any such increase the sum of the Commitment and the commitments under the Multi- Year Revolving Agreement shall not exceed $200,000,000 minus any amount by which the Commitment and the commitments under the Multi-Year Revolving Agreement shall have been reduced pursuant to SECTION 2.2 and SECTION 2.3 of the Multi-Year Revolving Agreement. Such notice shall set forth the amount of the requested increase in the Commitment and the date on which such increase is requested to become effective (which shall be not less than 45 days or more than 60 days after the date of such notice), and at Borrower's option, may offer to one or more existing Lenders and/or other banks or financial institutions (any such Lender or other bank or other financial institution referred to in this clause (a) being called an "AUGMENTING LENDER") the opportunity to extend credit hereunder or increase their existing Committed Sums in an aggregate amount equal to the proposed increase; provided that no Lender shall be obligated to agree to increase its Committed Sum; and provided further that each Augmenting Lender, if not already a Lender hereunder, shall be subject to the approval of the Administrative Agent (which approval shall not be unreasonably withheld) and the Borrower and each Augmenting Lender shall execute all such documentation as the Administrative Agent shall reasonably specify to evidence its Commitment Percentage and status as a Lender hereunder. Any increase in the Commitment may be made in an amount which is less than the increase requested by Borrower if Borrower is unable to arrange for Augmenting Lenders with sufficient Committed Sums. (b) On the effective date (the "INCREASE EFFECTIVE DATE") of any increase in the Commitment pursuant to this SECTION 2.3 (the "COMMITMENT INCREASE"), (i) the aggregate principal amount of the Borrowings outstanding (the "INITIAL LOANS") immediately prior to giving effect to the Commitment Increase on the Increase Effective Date shall be deemed to be paid, (ii) each Augmenting Lender that shall have been a Lender prior to the Commitment Increase shall pay to the Administrative Agent in same day funds an amount equal to the difference between (A) the product of (1) such Lender's Commitment Percentage (calculated after giving effect to the Commitment Increase) multiplied by (2) the amount of the Subsequent Borrowings (as hereinafter defined) and (B) the product of (1) such Lender's Commitment Percentage (calculated without giving effect to the Commitment Increase) multiplied by (2) the amount of the Initial Loans, (iii) each Augmenting Lender that shall not have been a Lender prior to the Commitment Increase shall pay to Administrative Agent in same day funds an amount equal to the product of (1) such Augmenting Lender's Commitment Percentage (calculated after giving effect to the Commitment Increase) multiplied by (2) the amount of the Subsequent Borrowings, and (iv) after the Administrative Agent receives the funds specified in clauses (ii) and (iii) above, the Administrative Agent shall pay to each Lender whose Committed Sum is not being increased (a "NON-INCREASING LENDER") the portion of such funds that is equal to the difference between (A) the product of (1) such Non-Increasing Lender's Commitment Percentage (calculated without giving effect to the Commitment Increase) multiplied by (2) the amount of the Initial Loans, and (B) the product of (1) such Non-Increasing NBPLP CREDIT AGREEMENT 13 Lender's Commitment Percentage (calculated after giving effect to the Commitment Increase) multiplied by (2) the amount of the Subsequent Borrowings, (v) after the effectiveness of the Commitment Increase, the Borrower shall be deemed to have made new Borrowings (the "SUBSEQUENT BORROWINGS") in an aggregate principal amount of the Initial Loans and of the types and for the Interest Periods specified in a Borrowing Request delivered to the Administrative Agent in accordance with SECTION 2.4, (vi) each Non-Increasing Lender and each Augmenting Lender shall be deemed to hold its Commitment Percentage of each Subsequent Borrowing (each calculated after giving effect to the Commitment Increase) and (vii) the Borrower shall pay each Augmenting Lender that shall have been a Lender prior to the Commitment Increase and each Non-Increasing Lender any and all accrued but unpaid interest on the Initial Loans. The deemed payments made pursuant to clause (i) above in respect of each Eurodollar Loan shall be subject to indemnification by Borrower pursuant to the provisions of SECTION 4.5 if the Increase Effective Date occurs other than on the last day of the Interest Period relating thereto and breakage costs result. (c) Increases and new Commitments created pursuant to this SECTION 2.3 shall become effective on the date specified in the notice delivered by Borrower pursuant to the first sentence of paragraph (a) above. (d) Notwithstanding the foregoing, no increase in the total Commitments (or in the Commitment of any Lender) or addition of a new Lender shall become effective under this Section unless, (i) on the date of such increase, the conditions set forth in SECTIONS 7.1 and 7.2 shall be satisfied and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Responsible Officer, and (ii) the Administrative Agent shall have received (with sufficient copies for each of the Lenders) documents consistent with those delivered on the Effective Date under SECTIONS 7.1 and 7.2 as to the partnership power and authority of Borrower to borrow hereunder after giving effect to such increase. 2.4 BORROWING PROCEDURE. The following procedures apply to all Borrowings: (a) Borrowing Request. Borrower may request a Borrowing by making or delivering a Borrowing Notice to Administrative Agent requesting that Lenders fund a Borrowing on a certain date (the "BORROWING DATE"), which Borrowing Notice (i) shall be irrevocable and binding on Borrower, (ii) shall specify the Borrowing Date, amount, Type, and (for a Borrowing comprised of Eurodollar Rate Borrowings) Interest Period, and (iii) must be received by Administrative Agent no later than 10:00 a.m. Dallas, Texas time on the third Business Day preceding the Borrowing Date for any Eurodollar Rate Borrowing or on the requested Borrowing Date (which shall be a Business Date for any Base Rate Borrowing. Administrative Agent shall timely notify each Lender with respect to each Borrowing Notice. (b) Funding. Each Lender shall remit its Commitment Percentage for the Facility of each requested Borrowing to Administrative Agent's office in Dallas, Texas, in funds which are or will be available for immediate use by Administrative Agent by 1:00 p.m. Dallas, Texas time on the applicable Borrowing Date. Subject to receipt of such funds, Administrative Agent shall (unless to its actual knowledge any of the conditions precedent therefor have not been satisfied by Borrower or waived by the requisite Lenders under SECTION 14.11) make such funds available to Borrower by causing such funds to be deposited to Borrower's account as designated to Administrative Agent by Borrower. (c) Funding Assumed. Absent contrary written notice from a Lender, Administrative Agent may assume that each Lender has made its Commitment Percentage of the requested Borrowing available to Administrative Agent on the applicable Borrowing Date, and Administrative Agent may, in reliance upon such assumption (but shall not be required to), make available to Borrower a corresponding amount. If a Lender fails to make its Commitment Percentage of any NBPLP CREDIT AGREEMENT 14 requested Borrowing available to Administrative Agent on the applicable Borrowing Date, Administrative Agent may recover the applicable amount on demand, (i) from that Lender together with interest, commencing on the Borrowing Date and ending on (but excluding) the date Administrative Agent recovers the amount from that Lender, at an annual interest rate equal to the Federal Funds Rate, or (ii) if that Lender fails to pay its amount upon demand, then from Borrower. No Lender is responsible for the failure of any other Lender to make its Commitment Percentage of any Borrowing available as required by SECTION 2.4(b); however, failure of any Lender to make its Commitment Percentage of any Borrowing so available does not excuse any other Lender from making its Commitment Percentage of any Borrowing so available. 2.5 EXTENSION OF MATURITY DATE. (a) Borrower may, by written notice to the Administrative Agent (a "REQUEST FOR EXTENSION OF REVOLVING TERMINATION DATE") given not less than 45 nor more than 60 days prior to each Determination Date, advise the Lenders that it requests an extension of the then effective Revolving Termination Date (the "EXISTING REVOLVING TERMINATION DATE") by 364 days, effective on the relevant Determination Date (the "RELEVANT DETERMINATION DATE"). The Administrative Agent will promptly, and in any event within five Business Days of the receipt of such Request for Extension, notify the Lenders of the contents of each such Request for Extension of Revolving Termination Date. (b) Each Request for Extension of Revolving Termination Date shall (i) be irrevocable and (ii) constitute a representation by Borrower that (A) neither any Default nor any Potential Default has occurred and is continuing and (B) the representations and warranties contained in SECTION 8 are correct on and as of the Relevant Determination Date, as though made on and as of such date (unless any representation and warranty expressly relates to an earlier date). (c) In the event a Request for Extension of Revolving Termination Date is given to the Administrative Agent as provided in SECTION 2.5(a) and the Administrative Agent notifies a Lender of the contents thereof, such Lender shall on or before the 30th day next preceding the then Relevant Determination Date advise the Administrative Agent in writing whether or not such Lender consents to the extension requested thereby. Each Lender shall have the right to consent to or reject such extension request in the exercise of its sole discretion. If any Lender fails so to advise the Administrative Agent, such Lender shall be deemed to have not consented to such extension. If all Lenders consent, the then effective Revolving Termination Date shall be extended by 364 days from the then effective Revolving Termination Date. (d) If (i) any Lender notifies the Administrative Agent that it will not consent to a Request for Extension of Revolving Termination Date, or (ii) all of the Lenders have not in writing expressly consented to a Request for Extension of Revolving Termination Date within the time period set forth in SECTION 2.5(a), then Borrower may, at its option, replace each Lender which has not agreed to the Request for Extension of Revolving Termination Date (a "NONEXTENDING LENDER") with another bank or financial institution approved by the Administrative Agent (which approval shall not be unreasonably withheld) (a "REPLACEMENT LENDER") and/or one or more existing Lenders by giving (not less than 10 days prior to the Relevant Determination Date) notice of the name of such Replacement Lender or such existing Lenders to the Administrative Agent. Each Nonextending Lender shall promptly assign all of its interests hereunder to such Replacement Lender and/or existing Lenders in accordance with SECTION 14.13. In connection with any such assignment, the Borrower shall be responsible for payment of the processing fee set forth in SECTION 14.13(b)(iii). (e) If all Lenders consent to a Request for Extension of Revolving Termination Date (or, if all Nonextending Lenders are replaced in accordance with this SECTION), then, as of the NBPLP CREDIT AGREEMENT 15 Determination Date, the Revolving Termination Date shall be deemed to have been extended for, and shall be the date that is, 364 days after the then effective Revolving Termination Date. If any Lender declines to consent to any such Request for Extension of Revolving Termination Date and such Lender is not replaced in accordance with this Section, then the Revolving Termination Date then in effect shall not be extended. SECTION 3 TERMS OF PAYMENT. 3.1 LOAN ACCOUNTS, NOTES, AND PAYMENTS. (a) Loan Accounts. The Principal Debt owed to each Lender shall be evidenced by one or more Loan Accounts or records maintained by such Lender in the ordinary course of business. The Loan Accounts or records maintained by Administrative Agent (including, without limitation, the Register) and each Lender shall be prima facie evidence absent manifest error of the amount of the Borrowings made by Borrower from each Lender under this Agreement and the interest and principal payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of Borrower under the Loan Documents to pay any amount owing with respect to the Obligation. (b) Notes. Upon the request of any Lender, made through Administrative Agent, the Principal Debt owed to such Lender may be evidenced by a Note. (c) Payment. All payments of principal, interest, and other amounts to be made by Borrower under this Agreement and the other Loan Documents shall be made to Administrative Agent at its office in Dallas, Texas in Dollars and in funds which are or will be available for immediate use by Administrative Agent by 12:00 noon Dallas, Texas time on the day due, without setoff, deduction, or counterclaim. Payments made after 12:00 noon, Dallas, Texas, time shall be deemed made on the Business Day next following. Administrative Agent shall pay to each Lender any payment of principal, interest, or other amount to which such Lender is entitled hereunder on the same day Administrative Agent shall have received the same from Borrower; provided such payment is received by Administrative Agent prior to 12:00 noon, Dallas, Texas time, and otherwise before 12:00 noon Dallas, Texas time on the Business Day next following. (d) Payment Assumed. Unless Administrative Agent has received notice from Borrower prior to the date on which any payment is due under this Agreement that Borrower will not make that payment in full, Administrative Agent may assume that Borrower has made the full payment due and Administrative Agent may, in reliance upon that assumption, cause to be distributed to the appropriate Lender on that date the amount then due to such Lenders. If and to the extent Borrower does not make the full payment due to Administrative Agent, each Lender shall repay to Administrative Agent on demand the amount distributed to that Lender by Administrative Agent together with interest for each day from the date that Lender received payment from Administrative Agent until the date that Lender repays Administrative Agent (unless such repayment is made on the same day as such distribution), at an annual interest rate equal to the Federal Funds Rate. 3.2 INTEREST AND PRINCIPAL PAYMENTS. (a) Interest. Accrued interest on each Eurodollar Rate Borrowing is due and payable on the last day of its respective Interest Period and on the Termination Date for the Facility; provided that, if any Interest Period is greater than three months, then accrued interest is also due and payable on the three month anniversary of the date on which such Interest Period commences and on each three month anniversary thereafter, as well as on the last day of such Interest Period. Accrued interest on each Base Rate Borrowing shall be due and payable on each March 31, June 30, September 30, and December 31, and on the Termination Date for the Facility. NBPLP CREDIT AGREEMENT 16 (b) Principal Debt. The Principal Debt outstanding on the Revolving Termination Date is due and payable, at Borrower's option, on (i) the Revolving Termination Date or (ii) the date which is the two-year anniversary of the Revolving Termination Date. In the event Borrower elects to repay the Principal Debt pursuant to clause (ii) above, Borrower shall by written notice to Administrative Agent (a "NOTICE OF EXTENSION OF TERMINATION DATE") not less than 45 nor more than 60 days prior to the Revolving Termination Date, advise the Lenders that it shall repay the Principal Debt pursuant to clause (ii). The Administrative Agent will promptly, and in any event within five Business Days of the receipt of such Notice of Extension of Termination Date, notify the Lenders of the contents such Notice of Extension of Termination Date. Such Notice of Extension of Termination Date shall constitute a representation by Borrower that (A) neither any Default nor any Potential Default has occurred and is continuing and (B) the representations and warranties contained in SECTION 8 are correct on and as of the Notice of Extension of Termination Date, as though made on and as of such date (unless any representation and warranty expressly relates to an earlier date). In addition, Borrower shall provide a certificate on the Revolving Termination Date constituting a representation by Borrower that (A) neither any Default nor any Potential Default has occurred and is continuing and (B) the representations and warranties contained in SECTION 8 are correct on and as of the Revolving Termination Date, as though made on and as of such date (unless any representation and warranty expressly relates to an earlier date). 3.3 PREPAYMENTS. (a) Optional Prepayments. Except as set forth herein, after giving Administrative Agent advance written notice of the intent to prepay, Borrower may voluntarily prepay all or any part of the Principal Debt, from time to time and at any time, in whole or in part, without premium or penalty; provided that: (i) such notice must be received by Administrative Agent by 12:00 noon, Dallas, Texas time, on or before the date of prepayment of any Borrowing; (ii) each such partial prepayment must be in a minimum amount of at least $5,000,000 or a greater integral multiple of $1,000,000 thereof or such lesser amount as may be outstanding under the Facility; (iii) any Eurodollar Rate Borrowing may only be prepaid at the end of an applicable Interest Period (unless Borrower pays the amount of any Consequential Loss); and (iv) Borrower shall pay any related Consequential Loss within ten (10) days after demand therefor. Conversions under SECTION 3.11 are not prepayments. Each notice of prepayment shall specify the prepayment date, the applicable loan hereunder of Principal Debt being prepaid, and the Type of Borrowing(s) and amount(s) of such Borrowing(s) to be prepaid and shall constitute a binding obligation of Borrower to make a prepayment on the date stated therein, together with (unless such prepayment is made with respect to a Base Rate Borrowing) accrued and unpaid interest to the date of such payment on the aggregate principal amount prepaid. Any voluntary prepayment of the Principal Debt shall be applied to the Principal Debt and shall be allocated Pro Rata to each Lender. Unless a Default or Potential Default has occurred and is continuing (or would arise as a result thereof), any payment or prepayment of the Principal Debt may be reborrowed by Borrower, subject to the terms and conditions of the Loan Documents. (b) Mandatory Payments/Reductions. On any date of determination if the Commitment Usage exceeds the Commitment then in effect, then Borrower shall make a mandatory prepayment of the Principal Debt, in at least the amount of such excess, together with (x) all accrued and unpaid interest on the principal amount so prepaid and (y) any Consequential Loss arising as a result thereof. All mandatory prepayments or commitment reductions under the Facility hereunder shall be allocated among the Lenders in accordance with their respective Commitment Percentages under the Facility. NBPLP CREDIT AGREEMENT 17 (c) Mandatory Prepayments of Interest/Consequential Loss. All prepayments under SECTION 3.3 shall be made, together with accrued interest to the date of such prepayment on the principal amount prepaid, together with any Consequential Loss arising as a result thereof. 3.4 INTEREST OPTIONS. Except that the Eurodollar Rate may not be selected when a Default or Potential Default exists and except as otherwise provided in this Agreement, Borrowings bear interest at a rate per annum equal to the lesser of (a) as to the respective Type of Borrowing (as designated by Borrower in accordance with this Agreement), the Base Rate plus the Applicable Margin for Base Rate Borrowings, or the Eurodollar Rate plus the Applicable Margin for Eurodollar Rate Borrowings, and (b) the Maximum Rate. Each change in the Base Rate or the Maximum Rate, subject to the terms of this Agreement, will become effective, without notice to Borrower or any other Person, upon the effective date of such change. 3.5 QUOTATION OF RATES. It is hereby acknowledged that an appropriately designated Representative of Borrower may call Administrative Agent on or before the date on which a Borrowing Notice is to be delivered by Borrower in order to receive an indication of the rates then in effect, but such indicated rates shall neither be binding upon Administrative Agent or Lenders nor affect the rate of interest which thereafter is actually in effect when the Borrowing Notice is given or on the Borrowing Date. 3.6 DEFAULT RATE. While any Default exists or after acceleration, Borrower shall pay interest on the principal amount of all Borrowing at the Default Rate until paid, regardless whether such payment is made before or after entry of a judgment. 3.7 INTEREST RECAPTURE. If the designated rate applicable to any Borrowing exceeds the Maximum Rate, the rate of interest on such Borrowing shall be limited to the Maximum Rate, but any subsequent reductions in such designated rate shall not reduce the rate of interest thereon below the Maximum Rate until the total amount of interest accrued thereon equals the amount of interest which would have accrued thereon if such designated rate had at all times been in effect. In the event that at maturity (stated or by acceleration), or at final payment of the Principal Debt, the total amount of interest paid or accrued is less than the amount of interest which would have accrued if such designated rates had at all times been in effect, then, at such time and to the extent permitted by Law, Borrower shall pay an amount equal to the difference between (a) the lesser of the amount of interest which would have accrued if such designated rates had at all times been in effect and the amount of interest which would have accrued if the Maximum Rate had at all times been in effect, and (b) the amount of interest actually paid or accrued on the Principal Debt. 3.8 INTEREST CALCULATIONS. Interest will be calculated on the basis of actual number of days (including the first day but excluding the last day) elapsed but computed as if each calendar year consisted of 360 days in the case of an Eurodollar Rate Borrowing (unless the calculation would result in an interest rate greater than the Maximum Rate, in which event interest will be calculated on the basis of a year of 365 or 366 days, as the case may be) and 365 or 366 days, as the case may be, in the case of a Base Rate Borrowing. All interest rate determinations and calculations by Administrative Agent are conclusive and binding absent manifest error. 3.9 MAXIMUM RATE. Regardless of any provision contained in any Loan Document, neither Administrative Agent nor any Lender shall ever be entitled to contract for, charge, take, reserve, receive, or apply, as interest on all or any part of the Obligation, any amount in excess of the Maximum Rate, and, if Lenders ever do so, then such excess shall be deemed a partial prepayment of principal and treated hereunder as such and any remaining excess shall be refunded to Borrower. In determining if the interest paid or payable exceeds the Maximum Rate, Borrower and Lenders shall, to the maximum extent permitted under applicable Law, (a) treat all Borrowings as but a single extension of credit (and Lenders and Borrower agree that such is the case and that provision herein for multiple Borrowings is for convenience only), (b) characterize any nonprincipal payment as an expense, fee, or premium rather than as interest, (c) exclude voluntary prepayments and the effects thereof, and (d) amortize, prorate, allocate, and spread the total NBPLP CREDIT AGREEMENT 18 amount of interest throughout the entire contemplated term of the Obligation. However, if the Obligation is paid and performed in full prior to the end of the full contemplated term thereof, and if the interest received for the actual period of existence thereof exceeds the Maximum Amount, Lenders shall refund such excess, and, in such event, Lenders shall not, to the extent permitted by Law, be subject to any penalties provided by any Laws for contracting for, charging, taking, reserving, or receiving interest in excess of the Maximum Amount. If the Laws of the State of Texas are applicable for purposes of determining the "Maximum Rate" or the "Maximum Amount," then those terms mean the "weekly ceiling" from time to time in effect under Texas Finance Code Section 303.305, as amended. Borrower agrees that Chapter 346 of the Texas Finance Code, as amended (which regulates certain revolving credit loan accounts and revolving tri-party accounts), does not apply to the Obligation. 3.10 INTEREST PERIODS. When Borrower requests any Eurodollar Rate Borrowing, Borrower may elect the interest period (each an "INTEREST PERIOD") applicable thereto, which shall be, at Borrower's option and subject to availability, one, two, three, or six months; provided, however, that: (a) the initial Interest Period for a Eurodollar Rate Borrowing shall commence on the date of such Borrowing (including the date of any conversion thereto), and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period applicable thereto expires; (b) if any Interest Period for a Eurodollar Rate Borrowing begins on a day for which there is no numerically corresponding Business Day in the calendar month at the end of such Interest Period, such Interest Period shall end on the next Business Day immediately following what otherwise would have been such numerically corresponding day in the calendar month at the end of such Interest Period (unless such date would be in a different calendar month from what would have been the month at the end of such Interest Period, or unless there is no numerically corresponding day in the calendar month at the end of the Interest Period; whereupon, such Interest Period shall end on the last Business Day in the calendar month at the end of such Interest Period); (c) no Interest Period may be chosen with respect to any portion of the Principal Debt which would (i) extend beyond the scheduled repayment date (including any dates on which mandatory prepayments are required to be made) for such portion of the Principal Debt or (ii) extend beyond the Revolving Termination Date if such Interest Period commences prior to the Revolving Termination Date; and (d) no more than an aggregate of five (5) Interest Periods shall be in effect at one time. 3.11 CONVERSIONS. Borrower may (a) convert a Eurodollar Rate Borrowing on the last day of the applicable Interest Period to a Base Rate Borrowing, (b) convert a Base Rate Borrowing at any time to a Eurodollar Rate Borrowing, and (c) elect a new Interest Period (in the case of a Eurodollar Rate Borrowing), by giving a Conversion Notice of such intent to Administrative Agent no later than 10:00 a.m. Dallas, Texas time on the third Business Day prior to the date of conversion or the last day of the Interest Period, as the case may be (in the case of a conversion to a Eurodollar Rate Borrowing or an election of a new Interest Period), and no later than 10:00 a.m. Dallas, Texas time on the last Business Day of the Interest Period (in the case of a conversion to a Base Rate Borrowing); provided that, the principal amount converted to, or continued as, a Eurodollar Rate Borrowing shall be in an amount not less than $5,000,000 or a greater integral multiple of $1,000,000 (or such lesser amount as may be outstanding under the Facility). Administrative Agent shall timely notify each Lender with respect to each Conversion Notice. Absent Borrower's Conversion Notice or election of a new Interest Period, a Eurodollar Rate Borrowing shall be deemed converted to a Base Rate Borrowing effective as of the expiration of the Interest Period applicable thereto. No Eurodollar Rate Borrowing may be either made or continued as a Eurodollar Rate Borrowing, and no Base Rate Borrowing may be converted to a Eurodollar Rate Borrowing, if the interest rate for such Eurodollar Rate Borrowing would exceed the Maximum Rate. The right to convert from a Base Rate Borrowing to a Eurodollar Rate Borrowing, or to continue as a Eurodollar Rate Borrowing shall not be available during the occurrence of a Default or Potential Default. 3.12 ORDER OF APPLICATION. (a) No Default. If no Default or Potential Default exists and if no order of application is otherwise specified in SECTION 3.3 or otherwise in the Loan Documents, payments and NBPLP CREDIT AGREEMENT 19 prepayments of the Obligation shall be applied first to fees, second to accrued interest then due and payable on the Principal Debt, and then to the remaining Obligation in the order and manner as Borrower may direct. (b) Default. If a Default or Potential Default exists (or if Borrower fails to give directions as permitted under SECTION 3.12(a)), any payment or prepayment (including proceeds from the exercise of any Rights) shall be applied to the Obligation in the following order: (i) to the ratable payment of all fees, expenses, and indemnities for which Agents or Lenders have not been paid or reimbursed in accordance with the Loan Documents (as used in this SECTION 3.12(b)(i), a "ratable payment" for any Lender or any Agent shall be, on any date of determination, that proportion which the portion of the total fees, expenses, and indemnities owed to such Lender or such Agent bears to the total aggregate fees and indemnities owed to all Lenders and Agents on such date of determination); (ii) to the ratable payment of accrued and unpaid interest on the Principal Debt (as used in this SECTION 3.12(b)(ii), "ratable payment" means, for any Lender, on any date of determination, that proportion which the accrued and unpaid interest on the Principal Debt owed to such Lender bears to the total accrued and unpaid interest on the Principal Debt owed to all Lenders); (iii) to the ratable payment of the Principal Debt (as used in this SECTION 3.12(b)(iv), "ratable payment" means for any Lender, on any date of determination, that proportion which the Principal Debt owed to such Lender bears to the Principal Debt owed to all Lenders); and (iv) to the payment of the remaining Obligation in the order and manner Required Lenders deem appropriate. Subject to the provisions of SECTION 12 and provided that Administrative Agent shall not in any event be bound to inquire into or to determine the validity, scope, or priority of any interest or entitlement of any Lender and may suspend all payments or seek appropriate relief (including, without limitation, instructions from Required Lenders or an action in the nature of interpleader) in the event of any doubt or dispute as to any apportionment or distribution contemplated hereby, Administrative Agent shall promptly distribute such amounts to each Lender in accordance with the Agreement and the related Loan Documents. 3.13 SHARING OF PAYMENTS, ETC. If any Lender shall obtain any payment or prepayment with respect to the Obligation (whether voluntary, involuntary, or otherwise, including, without limitation, as a result of exercising its Rights under SECTION 3.14) which is in excess of its share of any such payment in accordance with the relevant Rights of the Lenders under the Loan Documents, then such Lender shall purchase from the other Lenders such participations as shall be necessary to cause such purchasing Lender to share the excess payment with each other Lender in accordance with the relevant Rights under the Loan Documents. If all or any portion of such excess payment is subsequently recovered from such purchasing Lender, then the purchase shall be rescinded and the purchase price restored to the extent of such recovery. Borrower agrees that any Lender purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by Law, exercise all of its Rights of payment (including the Right of offset) with respect to such participation as fully as if such Lender were the direct creditor of Borrower in the amount of such participation. 3.14 OFFSET. If a Default exists, each Lender shall be entitled to exercise (for the benefit of all Lenders in accordance with SECTION 3.13) the Rights of offset and/or banker's Lien against each and every account and other property, or any interest therein, which any Loan Party may now or hereafter have with, or which is now or hereafter in the possession of, such Lender to the extent of the full amount of the Obligation. 3.15 BOOKING BORROWINGS. To the extent permitted by Law, any Lender may make, carry, or transfer its Borrowings at, to, or for the account of any of its branch offices or the office of any of its Affiliates; provided that, no Affiliate shall be entitled to receive any greater payment under SECTION 4 than the transferor Lender would have been entitled to receive with respect to such Borrowings. In the event a Lender shall transfer its Borrowings to or make its Borrowings from any office other than that designated on SCHEDULE 13.3, it shall notify the Administrative Agent and the Administrative Agent shall provide a NBPLP CREDIT AGREEMENT 20 copy of such notice to Borrower; provided, however, that the failure of a Lender or of Administrative Agent to provide notice under this Section shall not relieve Borrower from any obligations under this Agreement. SECTION 4 CHANGE IN CIRCUMSTANCES. 4.1 INCREASED COST AND REDUCED RETURN. (a) Changes in Law. If, after the date hereof, the adoption of any applicable Law or any change in any applicable Law or any change in the interpretation or administration thereof by any Governmental Authority, or compliance by any Lender (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) of any such Governmental Authority: (i) shall subject such Lender (or its Applicable Lending Office) to any Tax or other charge with respect to any Eurodollar Rate Borrowing, its Notes, or its obligation to loan Eurodollar Rate Borrowings, or change the basis of taxation of any amounts payable to such Lender (or its Applicable Lending Office) under the Loan Documents in respect of any Eurodollar Rate Borrowings (other than Taxes imposed on the overall net income of such Lender by the jurisdiction in which such Lender has its principal office or such Applicable Lending Office); (ii) shall impose, modify, or deem applicable any reserve, special deposit, assessment, or similar requirement relating to any extensions of credit or other assets of, or any deposits with or other liabilities or commitments of, such Lender (or its Applicable Lending Office), including the commitment of such Lender hereunder; or (iii) shall impose on such Lender (or its Applicable Lending Office) or the London interbank market any other condition affecting the Loan Documents or any of such extensions of credit or liabilities or commitments; and the result of any of the foregoing is to increase the cost to such Lender (or its Applicable Lending Office) of making, converting into, continuing, or maintaining any Eurodollar Rate Borrowings or to reduce any sum received or receivable by such Lender (or its Applicable Lending Office) under the Loan Documents with respect to any Eurodollar Rate Borrowing, then Borrower shall pay to such Lender on demand such amount or amounts as will compensate such Lender for such increased cost or reduction. If any Lender requests compensation by Borrower under this SECTION 4.1(a), Borrower may, by notice to such Lender (with a copy to Administrative Agent), suspend the obligation of such Lender to loan or continue Borrowings of the Type with respect to which such compensation is requested, or to convert Borrowings of any other Type into Borrowings of such Type, until the event or condition giving rise to such request ceases to be in effect (in which case the provisions of SECTION 4.4 shall be applicable); provided, that such suspension shall not affect the Right of such Lender to receive the compensation so requested. (b) Capital Adequacy. If, after the date hereof, any Lender shall have determined that the adoption of any applicable Law regarding capital adequacy or any change therein or in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender's obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change, request, or directive (taking into consideration its policies with respect to capital adequacy), then from time to time upon demand Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. NBPLP CREDIT AGREEMENT 21 (c) Changes in Applicable Lending Office. Compensation Statement. Each Lender shall promptly notify Borrower and Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming compensation under this Section shall furnish to Borrower and Administrative Agent a statement setting forth the additional amount or amounts to be paid to it hereunder and calculations in reasonable detail which shall be conclusive in the absence of manifest error. In determining such amount, such Lender may use any reasonable averaging and attribution methods. Borrower shall not be obligated to compensate any Lender pursuant to this SECTION 4.1 for any amounts attributable to a period more than 120 days prior to the giving of notice by such Lender to Borrower of its request for compensation under this SECTION 4.1. 4.2 LIMITATION ON TYPES OF LOANS. If on or prior to the first day of any Interest Period for any Eurodollar Rate Borrowing: (a) Inability to Determine Eurodollar Rate. Administrative Agent determines (which determination shall be conclusive) that by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period; or (b) Cost of Funds. Required Lenders determine (which determination shall be conclusive) and notify Administrative Agent that the Eurodollar Rate will not adequately and fairly reflect the cost to the Lenders of funding Eurodollar Rate Borrowings for such Interest Period; then Administrative Agent shall give Borrower prompt notice thereof specifying the relevant amounts or periods, and so long as such condition remains in effect, the Lenders shall be under no obligation to fund additional Eurodollar Rate Borrowings, continue Eurodollar Rate Borrowings, or to convert Base Rate Borrowings into Eurodollar Rate Borrowings, and Borrower shall, on the last day(s) of the then current Interest Period(s) for the outstanding Eurodollar Rate Borrowings, either prepay such Borrowings or convert such Borrowings into Base Rate Borrowings in accordance with the terms of this Agreement. 4.3 ILLEGALITY. Notwithstanding any other provision of the Loan Documents, in the event that it becomes unlawful for any Lender or its Applicable Lending Office to make, maintain, or fund Eurodollar Rate Borrowings hereunder, then such Lender shall promptly notify Borrower thereof and such Lender's obligation to make or continue Eurodollar Rate Borrowings and to convert other Base Rate Borrowings into Eurodollar Rate Borrowings shall be suspended until such time as such Lender may again make, maintain, and fund Eurodollar Rate Borrowings (in which case the provisions of SECTION 4.4 shall be applicable). 4.4 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to fund Eurodollar Rate Borrowings or to continue, or to convert Base Rate Borrowings into Eurodollar Rate Borrowings, shall be suspended pursuant to SECTIONS 4.1, 4.2, or 4.3 hereof, such Lender's Eurodollar Rate Borrowings shall be automatically converted into Base Rate Borrowings on the last day(s) of the then current Interest Period(s) for Eurodollar Rate Borrowings (or, in the case of a conversion required by SECTION 4.3 hereof, on such earlier date as such Lender may specify to Borrower with a copy to Administrative Agent) and, unless and until such Lender gives notice as provided below that the circumstances specified in SECTIONS 4.1, 4.2, or 4.3 hereof that gave rise to such conversion no longer exist: (a) to the extent that such Lender's Eurodollar Rate Borrowings have been so converted, all payments and prepayments of principal that would otherwise be applied to such Lender's Eurodollar Rate Borrowings shall be applied instead to its Base Rate Borrowings; and NBPLP CREDIT AGREEMENT 22 (b) all Borrowings that would otherwise be made or continued by such Lender as Eurodollar Rate Borrowings shall be made or continued instead as Base Rate Borrowings, and all Borrowings of such Lender that would otherwise be converted into Eurodollar Rate Borrowings shall be converted instead into (or shall remain as) Base Rate Borrowings. If such Lender gives notice to Borrower (with a copy to Administrative Agent) that the circumstances specified in SECTIONS 4.1, 4.2, or 4.3 hereof that gave rise to the conversion of such Lender's Eurodollar Rate Borrowings pursuant to this SECTION 4.4 no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when Eurodollar Rate Borrowings made by other Lenders are outstanding, such Lender's Base Rate Borrowings shall be automatically converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding Eurodollar Rate Borrowings, to the extent necessary so that, after giving effect thereto, all Eurodollar Rate Borrowings held by the Lenders and by such Lender are held pro rata (as to principal amounts, Types, and Interest Periods) in accordance with their respective Committed Sums. 4.5 COMPENSATION. Upon the request of any Lender, Borrower shall pay to such Lender such amount or amounts as shall be sufficient (in the reasonable opinion of such Lender) to compensate it for any loss, cost, or expense (excluding loss of anticipated profits) incurred by it as a result of: (a) any payment, prepayment, or conversion of a Eurodollar Rate Borrowing for any reason (including, without limitation, the acceleration of the loan pursuant to SECTION 12.1) on a date other than the last day of the Interest Period for such Borrowing; or (b) any failure by Borrower for any reason (including, without limitation, the failure of any condition precedent specified in SECTION 7.2 to be satisfied) to borrow, convert, continue, or prepay a Eurodollar Rate Borrowing on the date for such borrowing, conversion, continuation, or prepayment specified in the relevant Borrowing Notice, prepayment, continuation, or conversion under this Agreement. 4.6 TAXES. (a) General. Any and all payments by Borrower to or for the account of any Lender or Administrative Agent hereunder or under any other Loan Document shall be made free and clear of and without deduction for any and all present or future Taxes, excluding, in the case of each Lender and Administrative Agent, Taxes imposed on its income and franchise Taxes imposed on it by the jurisdiction under the laws of which such Lender (or its Applicable Lending Office) or Administrative Agent (as the case may be) is organized, or any political subdivision thereof. If Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable under any Loan Document to any Lender or Administrative Agent, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this SECTION 4.6) such Lender or Administrative Agent receives an amount equal to the sum it would have received had no such deductions been made, (ii) Borrower shall make such deductions, (iii) Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law, and (iv) Borrower shall furnish to Administrative Agent, at its address listed in SCHEDULE 2.1, the original or a certified copy of a receipt evidencing payment thereof. (b) Stamp and Documentary Taxes. In addition, Borrower agrees to pay any and all present or future stamp or documentary taxes and any other excise or property taxes or charges or similar levies which arise from any payment made under any Loan Document or from the execution or delivery of, or otherwise with respect to, any Loan Document (hereinafter referred to as "OTHER TAXES"). NBPLP CREDIT AGREEMENT 23 (c) Indemnification for Taxes. Borrower agrees to indemnify each Lender and Administrative Agent for the full amount of Taxes, excluding, in the case of each Lender and Administrative Agent, Taxes imposed on its income and franchise Taxes imposed on it by the jurisdiction under the laws of which such Lender (or its Applicable Lending Office) or Administrative Agent (as the case may be) is organized, or any political subdivision thereof and Other Taxes (including, without limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this SECTION 4.6) paid by such Lender or Administrative Agent (as the case may be) and any liability (including penalties, interest, and expenses) arising therefrom or with respect thereto. (d) Withholding Tax Forms. Each Lender organized under the Laws of a jurisdiction outside the United States, on or prior to the Closing Date in the case of each Lender listed on the signature pages hereof and on or prior to the date on which it becomes a Lender in the case of each other Lender, and from time to time thereafter if requested in writing by Borrower or Administrative Agent (but only so long as such Lender remains lawfully able to do so), shall provide Borrower and Administrative Agent with (i) if such Lender is a "bank" within the meaning of Section 881(c)(3)(A) of the Code, Internal Revenue Service Form 1001 or 4224, as appropriate, or any successor form prescribed by the Internal Revenue Service, certifying that such Lender is entitled to benefits under an income tax treaty to which the United States is a party which reduces the rate of withholding tax on payments of interest or certifying that the income receivable pursuant to the Loan Documents is effectively connected with the conduct of a trade or business in the United States, or (ii) if such Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and intends to claim an exemption from United States withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of "portfolio interest," a Form W-8, or any successor form prescribed by the Internal Revenue Service, and a certificate representing that such Lender is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of Borrower, and is not a controlled foreign corporation related to Borrower (within the meaning of Section 864(d)(4) of the Code). Each Lender which so delivers a W-8, Form 1001, or 4224 further undertakes to deliver to Borrower and Administrative Agent additional forms (or a successor form) on or before the date such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form so delivered by it, in each case certifying that such Lender is entitled to receive payments from Borrower under any Loan Document without deduction or withholding (or at a reduced rate of deduction or withholding) of any United States federal income taxes, unless an event (including without limitation any change in treaty, law, or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it, and such Lender advises Borrower and Administrative Agent that it is not capable of receiving such payments without any deduction or withholding of United States federal income tax. (e) Failure to Provide Withholding Forms; Changes in Tax Laws. For any period with respect to which a Lender has failed to provide Borrower and Administrative Agent with the appropriate form pursuant to SECTION 4.6(d) (unless such failure is due to a change in Law occurring subsequent to the date on which a form originally was required to be provided), such Lender shall not be entitled to indemnification under SECTION 4.6(a) or 4.6(b) with respect to Taxes imposed by the United States; provided, however, that should a Lender, which is otherwise exempt from or subject to a reduced rate of withholding tax, become subject to Taxes because of its failure to deliver a form required hereunder, Borrower shall take such steps as such Lender shall reasonably request to assist such Lender to recover such Taxes. (f) Change in Applicable Lending Office. If Borrower is required to pay additional amounts to or for the account of any Lender pursuant to this SECTION 4.6, then such Lender will agree to use reasonable efforts to change the jurisdiction of its Applicable Lending Office so as to NBPLP CREDIT AGREEMENT 24 eliminate or reduce any such additional payment which may thereafter accrue if such change, in the judgment of such Lender, is not otherwise disadvantageous to such Lender. (g) Tax Payment Receipt. Within thirty (30) days after the date of any payment of Taxes, Borrower shall furnish to Administrative Agent the original or a certified copy of a receipt evidencing such payment. (h) Survival. Without prejudice to the survival of any other agreement of Borrower hereunder, the agreements and obligations of Borrower contained in this SECTION 4.6 shall survive the termination of the Commitment and the payment in full of the Obligation. SECTION 5 FEES. 5.1 TREATMENT OF FEES. Except as otherwise provided by Law, the fees described in this SECTION 5: (a) do not constitute compensation for the use, detention, or forbearance of money, (b) are in addition to, and not in lieu of, interest and expenses otherwise described in the Loan Documents, (c) shall be payable in accordance with SECTION 3.1(c), (d) shall be non-refundable (subject to the provisions of SECTION 3.9, if applicable), (e) shall, to the fullest extent permitted by Law, bear interest, if not paid when due, at the Default Rate, and (f) shall be calculated on the basis of actual number of days (including the first day but excluding the last day) elapsed, but computed as if each calendar year consisted of 360 days, unless such computation would result in interest being computed in excess of the Maximum Rate in which event such computation shall be made on the basis of a year of 365 or 366 days, as the case may be. 5.2 FEES OF ADMINISTRATIVE AGENT AND ARRANGER. Borrower shall pay to Administrative Agent and Arranger, as the case may be, solely for their respective accounts, the fees described in that certain separate letter agreement dated as of April 18, 2000, among Borrower, Administrative Agent, and Arranger. 5.3 COMMITMENT FEES. Following the Closing Date, Borrower shall pay to Administrative Agent, for the ratable account of Lenders, a commitment fee, calculated daily from the Closing Date until the Revolving Termination Date but payable in installments in arrears each March 31, June 30, September 30, and December 31 and on the Revolving Termination Date for the Facility, commencing June 30, 2000. On any day of determination, the commitment fee shall be an amount equal to the Applicable Margin for Commitment Fees multiplied by the amount by which (a) the Commitment on such day exceeds (b) the Commitment Usage on such day. Each such installment shall be calculated in accordance with SECTION 5.1(f). Solely for the purposes of this SECTION 5.3, "ratable" shall mean, for any period of determination, with respect to any Lender, that proportion which (x) the average daily unused Committed Sum of such Lender during such period bears to (y) the amount of the average daily unused Commitment during such period. 5.4 UTILIZATION FEE. Borrower shall pay to the Administrative Agent for the Pro Rata account of the Lenders a utilization fee equal to the amount set forth in the definition of Applicable Amount multiplied by the Commitment Usage hereunder as follows: (1) from the Closing Date to and including the Revolving Termination Date said fee shall be payable for each day that the Commitment Usage hereunder plus the Commitment Usage as defined under the Multi-Year Revolving Agreement exceeds thirty-three percent (33.0%) of the Commitment hereunder plus the Commitment under the Multi-Year Revolving Agreement and (2) said fee shall be payable for each day from and after the Revolving Termination Date to and including the Termination Date. Such utilization fee shall accrue from the Closing Date to the Termination Date for the Facility and shall be due and payable each March 31, June 30, September 30 and December 31 and on the Termination Date for the Facility, commencing June 30, 2000. Each such installment shall be calculated in accordance with SECTION 5.1(f). NBPLP CREDIT AGREEMENT 25 SECTION 6 GUARANTY. 6.1 GUARANTY. As an inducement to Agents and Lenders to enter into this Agreement, Borrower shall cause Intermediate Partnership to execute and deliver to Administrative Agent a Guaranty substantially in the form and upon the terms of EXHIBIT C, providing for the guaranty of payment and performance of the Obligation. SECTION 7 CONDITIONS PRECEDENT. 7.1 CONDITIONS PRECEDENT TO CLOSING. This Agreement shall not become effective, and Lenders shall not be obligated to advance any Borrowing, unless Administrative Agent has received all of the agreements, documents, instruments, and other items described on SCHEDULE 7.1. 7.2 CONDITIONS PRECEDENT TO EACH BORROWING. In addition to the conditions stated in SECTION 7.1, Lenders will not be obligated to fund (as opposed to continue or convert) any Borrowing unless on the date of such Borrowing (and after giving effect thereto): (a) Administrative Agent shall have timely received therefor a Borrowing Notice; (b) all of the representations and warranties of any Loan Party set forth in the Loan Documents are true and correct in all material respects (except such representations and warranties which expressly refer to an earlier date, which are true and correct in all material respects as of such earlier date); (c) no Default or Potential Default shall have occurred and be continuing; and (d) the funding of such Borrowings is permitted by Law. Each Borrowing Notice delivered to Administrative Agent shall constitute the representation and warranty by Borrower to Administrative Agent that, as of the Borrowing Date, the statements above are true and correct in all respects. Each condition precedent in this Agreement is material to the transactions contemplated in this Agreement, and time is of the essence in respect of each thereof. Subject to the prior approval of Required Lenders, Lenders may fund any Borrowing without all conditions being satisfied, but, to the extent permitted by Law, the same shall not be deemed to be a waiver of the requirement that each such condition precedent be satisfied as a prerequisite for any subsequent funding, unless Required Lenders specifically waive each such item in writing. SECTION 8 REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Administrative Agent and Lenders as follows: 8.1 PURPOSE OF CREDIT FACILITY. (a) Borrower will use all proceeds of Borrowings for one or more of the following (or will loan such proceeds to, or make capital contributions to, Intermediate Partnership to so use such proceeds) (i) to repay the Debt existing under the Existing Credit Agreements; (ii) to finance capital expenditures; (iii) for investments permitted hereunder; (iv) for working capital; and (v) for general business purposes. No proceeds of any Borrowing will be used to make any distribution with respect to the Limited Partnership Units or General Partners' interests in Borrower, or to make any distribution with respect to partnership interests in Intermediate Partnership. (b) Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any "margin stock" within the meaning of Regulation U. No part of the proceeds of any Borrowing will be used, directly or indirectly, for a purpose which violates any Law, including, without limitation, the provisions of Regulations T, U, or X (as enacted by the Board of Governors of the Federal Reserve System, as amended). 8.2 EXISTENCE, GOOD STANDING, AUTHORITY, AND AUTHORIZATIONS. Each of the Loan Parties, each Subsidiary thereof is duly organized, validly existing, and in good standing under the Laws of its jurisdiction of organization. Each of the Loan Parties and its Subsidiaries is duly qualified to transact business and is in good standing in each jurisdiction where the nature and extent of its business and properties require the same, except to the extent failure to so qualify or be in good standing is not reasonably likely, in the aggregate, to result in a Material Adverse Event. Each of the Loan Parties, and each Subsidiary NBPLP CREDIT AGREEMENT 26 thereof, possesses all Authorizations necessary or required in the conduct of its respective business(es), except to the extent that failure to possess such Authorization(s) is not reasonably likely, in the aggregate, to result in a Material Adverse Event. No authorization, consent, approval, waiver, license, or formal exemptions from, nor any filing, declaration, or registration with, any Governmental Authority (federal, state, or local), non-governmental entity, or Person under the terms of contracts or otherwise, is required by reason of or in connection with the execution and performance of the Loan Documents by the Loan Parties or their respective Subsidiaries. 8.3 SUBSIDIARIES. Borrower has no direct Subsidiaries except as disclosed on SCHEDULE 8.3. As of the Closing Date, Intermediate Partnership has no Subsidiaries except as disclosed on SCHEDULE 8.3. As of the Closing Date, the number and percentage of shares or partnership and other equity interests in each Subsidiary, and the ownership thereof, are accurately set forth on SCHEDULE 8.3 attached hereto. All such partnership and other equity interests are validly issued under the terms of the applicable Partnership Agreements and applicable Law. 8.4 AUTHORIZATION AND NO CONTRAVENTION. The execution and delivery by each Loan Party of each Loan Document to which it is a party and the performance by such Loan Party of its obligations thereunder (a) are within its partnership power; (b) will have been duly authorized by all necessary partnership action when such Loan Document is executed and delivered, (c) require no action by or in respect of, or filing with, any Governmental Authority, which action or filing has not been taken or made on or prior to the Closing Date (or if later, the date of execution and delivery of such Loan Document), (d) will not violate any provision of the partnership agreement of such Loan Party, (e) will not violate any provision of Law applicable to it, (f) will not violate any material written or oral agreements, contracts, commitments, or understandings to which it is a party, other than such violations which could not be a Material Adverse Event, or (g) will not result in the creation or imposition of any Lien on any asset of any Loan Party. 8.5 BINDING EFFECT. Upon execution and delivery by all parties thereto, each Loan Document will constitute a legal, valid, and binding obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable Debtor Relief Laws and general principles of equity. 8.6 FINANCIAL STATEMENTS. (a) The Current Financials were prepared in accordance with GAAP and present fairly, in all material respects, the consolidated financial condition, results of operations, and cash flows of the Loan Parties and Subsidiaries thereof covered thereby ("REPORTING ENTITIES") as of and for the portion of the fiscal year ending on the date or dates thereof (subject only to normal year-end audit adjustments for interim statements). There were no material liabilities, direct or indirect, fixed or contingent, of the Reporting Entities as of the date or dates of the Current Financials which are required under GAAP to be reflected therein or in the notes thereto, and are not so reflected. (b) Since December 31, 1999, there has been no Material Adverse Event. 8.7 LITIGATION, CLAIMS, INVESTIGATIONS. No Loan Party is subject to, or aware of the threat of, any Litigation which is reasonably likely to be determined adversely to any Loan Party, or any Subsidiary thereof, and, if so adversely determined, could (individually or collectively with other Litigation) be a Material Adverse Event. There are no formal complaints, suits, claims, investigations, or proceedings initiated at or by any Governmental Authority pending or threatened by or against any Loan Party, or any Subsidiary thereof, which could reasonably be expected to result in a Material Adverse Event, nor any judgments, decrees, or orders of any Governmental Authority outstanding against any Loan Party, or any Subsidiary thereof, that could reasonably be expected to result in a Material Adverse Event. 8.8 TAXES. All Tax returns of each Loan Party and each Subsidiary thereof required to be filed have been filed (or extensions have been granted) prior to delinquency, and all Taxes imposed upon each Loan Party and each Subsidiary thereof which are due and payable have been paid prior to delinquency, NBPLP CREDIT AGREEMENT 27 other than Taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. 8.9 ENVIRONMENTAL MATTERS. No Loan Party (a) knows of any environmental condition or circumstance, such as the presence or Release of any Hazardous Substance, on any property presently or previously owned by any Loan Party and any Subsidiary thereof that could reasonably be expected to be a Material Adverse Event, (b) knows of any violation by any Loan Party, any Subsidiary thereof of any Environmental Law, except for such violations that could not reasonably be expected to be a Material Adverse Event, or (c) knows that any Loan Party and any Subsidiary thereof is under any obligation to remedy any violation of any Environmental Law, except for such obligations that could not reasonably be expected to be a Material Adverse Event. 8.10 EMPLOYEE BENEFIT PLANS. (a) No Employee Plan has incurred an "accumulated funding deficiency" (as defined in Section 302 of ERISA and Section 412 of the Code), (b) no Loan Party or any Subsidiary or ERISA Affiliate thereof has incurred material liability to the PBGC or with respect to an Employee Plan, which liability is currently due and remains unpaid under Title IV of ERISA, (c) each Employee Plan subject to ERISA and the Code complies in all material respects, both in form and operation, with ERISA and the Code, (d) no ERISA Event has occurred or is reasonably expected to occur with respect to any Employee Plan or Multiemployer Plan which, individually or collectively with all other ERISA Events then existing, could reasonably be expected to be a Material Adverse Event, (e) the present value of all accrued benefits under each Employee Plan (based on actuarial assumptions used for funding purposes in the most recent actuarial valuation prepared by the Employee Plan's actuary with respect to such Employee Plan) did not, as of the last annual actuarial valuation date for such Employee Plan, exceed the then-current value of the assets of such Employee Plan in such an amount which could reasonably be expected to result in a Material Adverse Event, and (f) the present value of vested benefits under each Employee Plan (based on PBGC actuarial assumptions used for plan termination), does not exceed the value of the assets of such Employee Plan in such an amount which could reasonably be expected to result in a Material Adverse Event. 8.11 PROPERTIES; LIENS. Each Loan Party has good and marketable title to all its property reflected on the Current Financials and each of its Subsidiaries has sufficient title to permit such Subsidiary to operate its facilities. Except for Permitted Liens, there is no Lien on any property of any Loan Party, and the execution, delivery, performance, or observance of the Loan Documents will not require or result in the creation of any Lien on such property. 8.12 GOVERNMENT REGULATIONS. No Loan Party or Subsidiary thereof is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the Federal Power Act, as amended, or any other Law (other than Regulations T, U, and X of the Board of Governors of the Federal Reserve System and the requirements of any public service commission) which regulates the incurrence of Debt. 8.13 TRANSACTIONS WITH AFFILIATES. No Loan Party or any Subsidiary thereof is a party to a material transaction with any of its Affiliates (excluding transactions between or among such Loan Parties or any Subsidiary thereof), other than transactions upon fair and reasonable terms not materially less favorable than such entity could obtain or could become entitled to in an arm's-length transaction with a Person that was not its Affiliate. 8.14 MATERIAL AGREEMENTS. No Loan Party or any Subsidiary thereof is in default with respect to any material agreements, contracts, commitments, or understandings which could reasonably be expected to be a Material Adverse Event. 8.15 INSURANCE. Each Loan Party and each Subsidiary thereof maintains, with financially sound, responsible, and reputable insurance companies or associations, insurance concerning its properties and NBPLP CREDIT AGREEMENT 28 businesses against such casualties and contingencies and of such types and in such amounts (and with co-insurance and deductibles) as is customary in the case of same or similar businesses. 8.16 COMPLIANCE WITH LAWS. No Loan Party or any Subsidiary thereof is in violation of any Laws (including, without limitation, Environmental Laws), other than such violations which could not, individually or collectively, reasonably be expected to be a Material Adverse Event. No Loan Party or any Subsidiary thereof has received notice alleging any noncompliance with any Laws, except for such noncompliance which no longer exists, or which could not reasonably be expected to be a Material Adverse Event. 8.17 REGULATION U. "Margin Stock" (as defined in Regulation U) constitutes less than 25% of those assets of the Loan Parties which are subject to any limitation on sale, pledge, or other restrictions hereunder. 8.18 FULL DISCLOSURE. All information heretofore furnished by any Loan Party to any Lender or Administrative Agent in connection with the Loan Documents was, and all such information hereafter furnished by any Loan Party to any Lender or Administrative Agent will be, taken as a whole, true and accurate in all material respects or based on reasonable estimates on the date as of which such information is stated or certified. 8.19 NO DEFAULT. No Default or Potential Default has occurred and is continuing or will arise as a result of the execution of the Loan Documents or of any Borrowing hereunder. SECTION 9 AFFIRMATIVE COVENANTS. Borrower, and Guarantor, by its execution and delivery of a Guaranty, covenants and agrees to perform, observe, and comply with each of the following covenants from the Closing Date and so long thereafter as Lenders are committed to fund Borrowings under this Agreement and thereafter until the payment in full of the Principal Debt and payment in full of all other interest, fees, and other amounts of the Obligation then due and owing, unless Borrower receives a prior written consent to the contrary by Administrative Agent as authorized by Required Lenders: 9.1 USE OF PROCEEDS. Borrower shall, and shall cause each of its Subsidiaries to, use the proceeds of Borrowings only for the purposes represented in SECTION 8.1(a). 9.2 BOOKS AND RECORDS. The Loan Parties shall, and shall cause each of their Subsidiaries to, maintain books, records, and accounts necessary to prepare financial statements in accordance with GAAP. 9.3 ITEMS TO BE FURNISHED. Borrower shall cause the following to be furnished to Administrative Agent for delivery to Lenders: (a) Promptly after preparation, and no later than 60 days after the last day of each of the first three fiscal quarters of Borrower, (i) balance sheets and statements of earnings and cash flow ("FINANCIAL STATEMENTS") showing the consolidated financial condition and results of operations calculated for Borrower and its Subsidiaries, for such fiscal quarter and for the period from the beginning of the then-current fiscal year to such last day, (ii) Financial Statements showing the consolidating financial condition and results of operations calculated for Borrower and Intermediate Partnership, exclusive of any other Subsidiaries for such fiscal quarter and for the period from the beginning of the then-current fiscal year to such last day, and (iii) a statement reconciling the items of Debt and Capitalization as reported on the balance sheets contained in the financial statements described in clauses (i) and (ii) above; each accompanied by a Compliance Certificate. (b) Promptly after preparation, and no later than 120 days after the last day of each fiscal year of Borrower, Financial Statements showing the consolidated financial condition and NBPLP CREDIT AGREEMENT 29 results of operations calculated separately for Borrower, as of, and for the year ended on, such day, each accompanied by: (i) the unqualified opinion of a firm of nationally-recognized independent certified public accountants, based on an audit using generally accepted auditing standards, that such Financial Statements were prepared in accordance with GAAP and present fairly the consolidated financial condition and results of operations of Borrower; (ii) a Compliance Certificate. (c) Promptly after preparation, and no later than 120 days after the last day of the fiscal year of the Borrower, (i) Financial Statements showing the consolidated financial condition and results of operations calculated for Borrower and its Subsidiaries for such fiscal year, (ii) Financial Statements showing the consolidating financial condition and results of operations calculated for Borrower and Intermediate Partnership, exclusive of any other Subsidiaries, for such fiscal year, and (iii) a statement reconciling the items of Debt and Capitalization as reported on the balance sheets contained in the financial statements described in clauses (i) and (ii) above, each accompanied by a Compliance Certificate. (d) Promptly upon receipt thereof, and in any event within ten (10) Business Days after receipt thereof, copies of all auditor's annual management letters delivered to Borrower. (e) Notice, promptly (but in any event within five (5) Business Days) after any Loan Party knows or has reason to know of (i) a Default or Potential Default specifying the nature thereof and what action any Loan Party or any Subsidiary thereof has taken, is taking, or proposes to take with respect thereto, or (ii) any other event or circumstance that results in, or could reasonably be expected to result in, a Material Adverse Event. (f) Promptly after the filing thereof, a true, correct, and complete copy of each Form 10-K, Form 10-Q, and Form 8-K filed by or on behalf of any Loan Party or any Subsidiary thereof with the Securities and Exchange Commission, and of all material reports or filings filed by or on behalf of any Loan Party with any Governmental Authority. (g) Promptly upon request therefor by Administrative Agent or Lenders, such information (not otherwise required to be furnished under the Loan Documents) respecting the business affairs, assets, and liabilities of the Loan Parties or Subsidiary thereof, and such opinions, certifications, and documents, in addition to those mentioned in this Agreement, as reasonably requested. 9.4 INSPECTIONS. Upon reasonable notice, the Loan Parties shall allow, and shall cause their Subsidiaries to allow, Administrative Agent or any Lender (or their respective Representatives) to inspect any of their properties, to review reports, files, and other records and to make and take away copies thereof, to conduct tests or investigations, and to discuss any of their respective affairs, conditions, and finances with other creditors, directors, officers, employees, other representatives, and independent accountants of the Loan Parties and their Subsidiaries, from time to time, during reasonable business hours. 9.5 TAXES. Each Loan Party (a) shall, and shall cause each of its Subsidiaries to, promptly pay when due any and all Taxes other than Taxes the applicability, amount, or validity of which is being contested in good faith by lawful proceedings diligently conducted, and against which reserve or other provision required by GAAP has been made, and in respect of which levy and execution of any lien securing same have been and continue to be stayed. NBPLP CREDIT AGREEMENT 30 9.6 PAYMENT OF OBLIGATIONS. Borrower shall pay the Obligation in accordance with the terms and provisions of the Loan Documents. Each Loan Party shall, and shall cause its Subsidiaries to, promptly pay (or renew and extend) all of their respective material obligations as the same become due (unless such obligations other than the Obligation are being contested in good faith by appropriate proceedings). 9.7 MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS. Except as otherwise permitted by SECTION 10.9, each Loan Party shall, and shall cause each of its Subsidiaries to, at all times: (a) maintain its existence and good standing in the jurisdiction of its organization and its authority to transact business in all other jurisdictions where the nature of its business so requires; (b) maintain all licenses, permits, and franchises necessary for the normal business; (c) keep all of its assets which are useful in and necessary to its business in good working order and condition (ordinary wear and tear excepted) and make all necessary repairs thereto and replacements thereof; and (d) do all things necessary to obtain, renew, extend, and continue in effect all Authorizations which may at any time and from time to time be necessary for the Loan Parties and Subsidiaries thereof to operate their businesses in compliance with applicable Law; except in the case of each of CLAUSES (a) through (d), where the failure to so renew, extend, or continue in effect could not reasonably be expected to be a Material Adverse Event. 9.8 COMPLIANCE WITH LAWS, ETC. The Loan Parties will comply, and will cause each of its Subsidiaries to comply, in all material respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards except where the failure to so comply will not reasonably be expected to cause a Material Adverse Event. 9.9 INSURANCE. Each Loan Party will, and will cause each of its Subsidiaries to, maintain or cause to be maintained with responsible insurance companies insurance with respect to its properties and business against such casualties and contingencies and of such types and in such amounts as is consistent with prudent industry practice and will, upon request of the Administrative Agent, furnish to each Lender at reasonable intervals a certificate of insurance setting forth the nature and extent of all insurance maintained by the Borrower in accordance with this Section. 9.10 PRESERVATION AND PROTECTION OF RIGHTS. Each Loan Party shall perform such acts and duly authorize, execute, acknowledge, deliver, file, and record any additional agreements, documents, instruments, and certificates as Administrative Agent or Required Lenders may reasonably deem necessary or appropriate in order to preserve and protect the Rights of Administrative Agent and Lenders under any Loan Document. 9.11 PARI PASSU STATUS. Each Loan Party will ensure the claims and rights of the Lenders against it under this Agreement and each other Loan Document will not be subordinate to, and will rank at all times at least pari passu with, all other unsecured Debt of such Loan Party. 9.12 MAINTENANCE OF TAX STATUS. Borrower shall take all action necessary to prevent Borrower, Intermediate Partnership or NBPC from being, and will take no action which would have the effect of causing any of Borrower, Intermediate Partnership or NBPC to be, treated as an association taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes. SECTION 10 NEGATIVE COVENANTS. Borrower, and Guarantor, by its execution and delivery of a Guaranty, covenants and agrees to perform, observe, and comply with each of the following covenants from the Closing Date and so long thereafter as Lenders are committed to fund Borrowings under this Agreement and thereafter until the payment in full of the Principal Debt and payment in full of all other interest, fees, and other amounts of the Obligation then due and owing, unless Borrower receives a prior written consent to the contrary by Administrative Agent as authorized by Required Lenders: NBPLP CREDIT AGREEMENT 31 10.1 DEBT AND GUARANTIES. (a) No Loan Party shall, or permit any of its Subsidiaries (other than NBPC) to, directly, or indirectly, create, incur, or suffer to exist any direct, indirect or contingent liability for any obligations under Capital Leases in excess of $20,000,000 outstanding at any time in the aggregate; and (b) No Subsidiary of Borrower shall, directly or indirectly, create, incur, or suffer to exist any direct, indirect, fixed, or contingent liability for any Debt, other than: (i) The Obligation and Guaranties thereof; (ii) Debt of Black Mesa Holdings, Inc. and Black Mesa Pipeline, Inc. existing on the Closing Date as described in SCHEDULE 10.1 (but not renewals, extensions or increases in or of, such Debt); (iii) Trade Debt for goods furnished or services rendered in the ordinary course of business and payable in accordance with customary trade terms that are not more than 90 days past due; (iv) Endorsements of checks or drafts in the ordinary course of business; (v) Debt of NBPC described on SCHEDULE 10.1 and other Debt of NBPC, so long as the NBPC Capitalization Ratio does not exceed 0.65 to 1.0; (vi) Other Debt of Subsidiaries other than NBPC which does not exceed $25,000,000 outstanding at any time in the aggregate; and (vii) Debt of Subsidiaries resulting from loans made by Borrower to Intermediate Partnership, loans by Intermediate Partnership to another Subsidiary or other loans by a Subsidiary to another Subsidiary; provided, however, that any Debt of Intermediate Partnership resulting from loans made by any Subsidiary to Intermediate Partnership shall be subordinated on terms and conditions satisfactory to Administrative Agent and the Required Lenders in right of payment to its obligations under the Guaranty; provided, however, no Debt otherwise permitted by clauses (a) or (b) shall be permitted if, after giving effect to the incurrence thereof, any Default or Potential Default shall have occurred and be continuing. 10.2 LIENS. No Loan Party shall, or permit any of its Subsidiaries (except NBPC) to, directly or indirectly, create, incur, or suffer or permit to be created or incurred or to exist any Lien upon any of its assets, except: (a) Liens existing as a result of any Capital Lease, to the extent permitted pursuant to SECTION 10.1; (b) Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books; (c) Liens of carriers, operators, warehousemen, mechanics, materialmen and landlords, and statutory Liens of producers of hydrocarbons, incurred in the ordinary course of business for sums not overdue or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books; NBPLP CREDIT AGREEMENT 32 (d) Deposits in the ordinary course of business in connection with workmen's compensation, unemployment insurance or other forms of governmental insurance or benefits, or to secure performance of tenders, statutory obligations, leases and contracts (other than for borrowed money) entered into in the ordinary course of business or to secure obligations on surety or appeal bonds; and (e) Judgment Liens in existence less than 30 days after the entry thereof or with respect to which execution has been stayed or the payment of which is covered in full (subject to a customary deductible) by insurance maintained with responsible insurance companies. 10.3 TRANSACTIONS WITH AFFILIATES. No Loan Party shall, or permit any of its Subsidiaries to, enter into any transaction with any of its Affiliates, other than transactions upon fair and reasonable terms not less favorable than such Loan Party or Subsidiary could obtain or could become entitled to in an arm's-length transaction with a Person that was not its Affiliate. 10.4 ASSIGNMENT. No Loan Party shall assign or transfer any of its Rights, duties, or obligations under any of the Loan Documents. 10.5 GOVERNMENT REGULATIONS. No Loan Party will conduct its business in such a way that it will become subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the Federal Power Act, as amended, or any other Law (other than Regulations T, U, and X of the Board of Governors of the Federal Reserve System) which regulates the incurrence of Debt. 10.6 MERGERS; SALE OF ASSETS. (a) No Loan Party will, nor will it permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all (or substantially all) of its assets, or all or substantially all of the stock of or other equity interest in any of its Subsidiaries (in each case, whether now owned or hereafter acquired), unless: (i) at the time thereof and immediately after giving effect thereto no Default or Potential Default shall have occurred and be continuing, (ii) if the Borrower is involved in any such transaction, the Borrower is the surviving entity or the recipient of any such sale, transfer, lease or other disposition of assets, and if any other Loan Party is involved in any such transaction a Loan Party is the surviving entity or the recipient of any such sale, transfer, lease or other disposition of assets; provided, however, that in no event shall any such merger, consolidation, sale, transfer, lease or other disposition whether or not otherwise permitted by this SECTION 10.6 have the effect of releasing any Loan Party from any of its obligations and liabilities under this Agreement. The Loan Parties will not permit NBPC to merge or consolidate with or into any other Person, or sell, assign, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its business and assets (whether now owned or hereafter acquired) to, any Person, except pursuant to Section 14 or Section 15 (to the extent it applies to a merger pursuant to Section 14) of NBPC's Partnership Agreement. (b) The Loan Parties shall not permit NBPC to lease, sell or otherwise dispose of its assets to any other Person except: (i) sales of inventory and other assets in the ordinary course of business, (ii) leases, sales or other dispositions of its assets that, together with all other assets of NBPC previously leased, sold or disposed of (other than disposed of pursuant to this SECTION 10.6(b)) during the twelve-month period ending with the month in which any such lease, sale or other disposition occurs, do not constitute a substantial portion of the assets of NBPC, (iii) sales of assets which are concurrently leased back, and (iv) dispositions of assets which are obsolete or no longer used or useful in the business of NBPC. NBPLP CREDIT AGREEMENT 33 10.7 LOAN AND INVESTMENTS. Borrower shall not purchase or acquire or make any commitment therefor, any capital stock, equity interest, or any obligations or other securities of, or any interest in, any Person, or commit to make any Acquisitions, or make or commit to make any advance, loan, extension of credit or capital contribution to or any other investment in, any Person including any Affiliate of the Company (together, "Investments"), except for: (a) Investments held by Borrower in the form of cash equivalents or short-term marketable securities; and (b) Investments in and through Intermediate Partnership permitted by SECTION 10.9. 10.8 DISTRIBUTIONS. Borrower will not declare, pay or make any distribution (in cash, property or obligations) on any interests (now or hereafter outstanding) in Borrower or apply any of its funds, property or assets to the purchase of any partnership interests in Borrower; provided, that at any time during which no Default or Potential Default is outstanding, Borrower (a) may make distributions on the Limited Partnership Units and General Partners' interests in accordance with the Partnership Agreement and (b) may purchase its partnership interests provided that the aggregate purchase price therefor does not exceed $20 million in the aggregate during the term of this Agreement. 10.9 LIMITATION ON BUSINESS ACTIVITIES. Borrower shall not engage in any business activity except the ownership of a limited partner interest in Intermediate Partnership and such activities as may be incidental or related thereto. Intermediate Partnership shall not, and the Loan Parties shall not permit any of their Subsidiaries to, engage, directly or indirectly, in any business activity except (a) existing business activities consisting of the ownership and operation of natural gas and coal pipelines, the extension and expansion of such pipelines and related facilities, services related to transportation and marketing of natural gas and coal and such activities as may be incidental or related to the aforementioned and (b) new business activities in the area of exploration, development, production, processing, refining, transportation or marketing of gas, oil, coal or products thereof, provided the gross income of such activities allows Borrower to meet the exception in Section 7704 of the Code. 10.10 CERTAIN AMENDMENTS TO CASH DISTRIBUTION POLICIES AND PARTNERSHIP AGREEMENTS. Each Loan Party agrees that it shall not consent to, vote in favor of or permit any amendment of (a) the cash distribution policies of NBPC or Intermediate Partnership in any manner which would result in a Material Adverse Event with respect to any Loan Party or materially adversely affect the rights and remedies of the Lenders under and in connection with this Agreement, the Notes or any other Loan Document; or (b) the Partnership Agreement, the Northern Border Partnership Agreement or the Intermediate Partnership Agreement in any manner which would (i) have a material adverse effect on the rights and remedies of the Lenders under and in connection with this Agreement, the Notes or any other Loan Document; or (ii) result in a Material Adverse Event. 10.11 RESTRICTIVE AGREEMENTS, ETC. No Loan Party will, nor will it permit any of its Material Subsidiaries to, enter into any agreement restricting the ability of any Material Subsidiary to make any payments, directly or indirectly, to a Loan Party by way of distributions, advances, repayments of loans or advances, reimbursements of management and other intercompany charges, expenses and accruals or other returns on investments, or any other agreement or arrangement which restricts the ability of any such Subsidiary to make any payment, directly or indirectly, to a Loan Party or to guarantee Debt of a Loan Party. 10.12 EMPLOYEE BENEFIT PLANS. No Loan Party shall, or shall permit any of its ERISA Affiliates to, permit any of the events or circumstances described in SECTION 8.10 to exist or occur. 10.13 CAPITALIZATION RATIO. Borrower and Intermediate Partnership (unconsolidated with other subsidiaries) shall never permit the Capitalization Ratio to be greater than thirty-five percent (35%). NBPLP CREDIT AGREEMENT 34 SECTION 11 DEFAULT. The term "DEFAULT" means the occurrence of any one or more of the following events: 11.1 PAYMENT OF OBLIGATION. The failure of Borrower to pay (a) any amount of principal of any Borrowing or any reimbursement obligation in respect of a drawing under an LC when the same becomes due (whether by its terms, by acceleration, or as otherwise provided in the Loan Documents); or (b) within five (5) days after the same becomes due, any interest, fee or any other amount payable hereunder or under any other Loan Document. 11.2 COVENANTS. The failure or refusal of Borrower (and, if applicable, any other Loan Party or Subsidiary of any Loan Party) to punctually and properly perform, observe, and comply with: (a) Any covenant, agreement, or condition contained in SECTIONS 10.1 through 10.13; and (b) Any other covenant, agreement, or condition contained in any Loan Document (other than the covenants to pay the Obligation set forth in SECTION 11.1 and the covenants in SECTION 11.2(a)), and such failure or refusal continues for 30 days after the earlier of (i) the date upon which a Responsible Officer (or, in the case of a failure or refusal of Guarantor to perform, observe or comply, an officer of Guarantor) knew or reasonably should have known of such failure or refusal, or (ii) the date upon which written notice thereof is given to Borrower (or, if applicable, Guarantor) by the Administrative Agent or any Bank. 11.3 DEBTOR RELIEF. Any Loan Party or any Material Subsidiary thereof (a) fails to pay, or admits in writing its inability to pay its Debts generally as they become due, (b) voluntarily seeks, consents to, or acquiesces in the benefit of any Debtor Relief Law, other than as a creditor or claimant, or (c) becomes a party to or is made the subject of any proceeding provided for by any Debtor Relief Law, other than as a creditor or claimant, (unless, in the event such proceeding is involuntary, the petition instituting same is dismissed within 60 days after its filing). 11.4 JUDGMENTS AND ATTACHMENTS. Any Loan Party or any Material Subsidiary thereof fails, within 60 days after entry, to pay, bond, or otherwise discharge any judgment or order for the payment of money in excess of $15,000,000 (individually or collectively) or any warrant of attachment, sequestration, or similar proceeding against any of their respective assets having a value (individually or collectively) of $15,000,000 which is not stayed on appeal. 11.5 MISREPRESENTATION. Any representation or warranty made herein or in any Loan Document shall at any time prove to have been incorrect in any material respect when made. 11.6 CHANGE OF CONTROL. A Change of Control shall occur. 11.7 DEFAULT UNDER OTHER DEBT AND AGREEMENTS. (a) A default shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any Debt (other than Debt described in SECTION 11.1) of any Loan Party or any of its Subsidiaries having a principal amount (including undrawn or committed or available amounts), individually or in the aggregate, in excess of $15,000,000, or a default shall occur in the performance or observance of any obligation or condition with respect to such Debt, or any other event shall occur or condition exist under any agreement relating to such Debt the effect of which default, condition or event is to cause, or to permit the holder or holders of such Debt (or any trustee or agent for such holders) to cause (with the giving of notice if required or lapse of time or both), such Debt to become due and payable prior to its expressed maturity NBPLP CREDIT AGREEMENT 35 (whether by acceleration, redemption, repurchase or otherwise); provided, that no Default will result from a Rating Decline Offer, or the event causing such offer, under Borrower's 8-7/8% Senior Notes due 2010 (the "SENIOR NOTES") unless one or more holders of Senior Note(s) elect to exercise its or their rights to have all or any portion of their Senior Notes repurchased by Borrower (as used herein Rating Decline Offer has the meaning assigned in Borrower's Indenture for the 8-7/8% Senior Notes due 2010); or (b) A Loan Party or any of its Subsidiaries shall: (i) default in making any payment, delivery or exchange, or in the performance of any of its other obligations, under one or more agreements or instruments (individually or collectively) governing or otherwise relating to one or more Derivative Transactions, which default shall have resulted in early termination, liquidation or other similar payments in an aggregate amount in excess of $15,000,000 becoming, or becoming capable at such time (after giving effect to any applicable notice requirement or grace period) of being declared or designated, due and payable by a Loan Party, or one or more of its Subsidiaries; or (ii) default (after giving effect to any applicable notice requirement or grace period) in making any payment or delivery due on the last payment, delivery or exchange date of, or on the early termination or liquidation of, one or more Derivative Transactions and such default relates to one or more payments or deliveries of cash or property having an aggregate value in excess of $15,000,000. 11.8 EMPLOYEE BENEFIT PLANS. (a) Any Loan Party or ERISA Affiliate shall fail to pay when due an amount or amounts for which it is liable under Title IV of ERISA, which aggregate unpaid amounts for all such entities exceed $15,000,000 in the aggregate; or (b) an ERISA Event shall occur or exist with respect to any Employee Plan or Multiemployer Plan, and as a result of such ERISA Event and all other ERISA Events then-existing, the aggregate liabilities incurred (or in the reasonable judgment of Required Lenders, likely to be incurred) of the Loan Parties and the ERISA Affiliates to any Employee Plan, Multiemployer Plan, or the PBGC (or any combination thereof) shall exceed $15,000,000. 11.9 VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS. Any Loan Document shall, at any time after its execution and delivery and for any reason, cease to be in full force and effect in any material respect or be declared to be null and void (other than in accordance with the terms hereof or thereof) or the validity or enforceability thereof be contested by any Loan Party thereto or any Loan Party shall deny in writing that it has any or any further liability or obligations under any Loan Document to which it is a party. 11.10 ENVIRONMENTAL LIABILITY. If any event or condition shall occur or exist with respect to any activity or substance regulated under the Environmental Law and, as a result of such event or condition, any Loan Party or any of their respective Subsidiaries shall have incurred or in the opinion of the Required Lenders will be reasonably likely to incur a liability in excess of $15,000,000 during any consecutive twelve (12) month period. 11.11 DISSOLUTION. Any Loan Party or NBPC shall dissolve, liquidate, or otherwise terminate their existence. SECTION 12 RIGHTS AND REMEDIES. 12.1 REMEDIES UPON DEFAULT. (a) Debtor Relief. If a Default exists under SECTION 11.3(b) or 11.3(c), the commitment to extend credit hereunder shall automatically terminate and the entire unpaid balance of the Obligation shall automatically become due and payable without any action or notice of any kind whatsoever. NBPLP CREDIT AGREEMENT 36 (b) Other Defaults. If any Default exists, Administrative Agent may (and, subject to the terms of SECTION 13, shall upon the request of Required Lenders) or Required Lenders may, do any one or more of the following: (i) if the maturity of the Obligation has not already been accelerated under SECTION 12.1(a), declare the entire unpaid balance of the Obligation, or any part thereof, immediately due and payable, whereupon it shall be due and payable; (ii) terminate the commitments of Lenders to extend credit hereunder; (iii) reduce any claim to judgment; (iv) to the extent permitted by Law, exercise (or request each Lender to, and each Lender shall be entitled to, exercise) the Rights of offset or banker's Lien against the interest of each Loan Party in and to every account and other property of any Loan Party which are in the possession of Administrative Agent or any Lender to the extent of the full amount of the Obligation (to the extent permitted by Law, each Loan Party being deemed directly obligated to each Lender in the full amount of the Obligation for such purposes); and (v) exercise any and all other legal or equitable Rights afforded by the Loan Documents, the Laws of the State of Texas, or any other applicable jurisdiction as Administrative Agent or Required Lenders (as the case may be) shall deem appropriate, or otherwise, including, but not limited to, the Right to bring suit or other proceedings before any Governmental Authority either for specific performance of any covenant or condition contained in any of the Loan Documents or in aid of the exercise of any Right granted to Administrative Agent or any Lender in any of the Loan Documents. 12.2 LOAN PARTY WAIVERS. To the extent permitted by Law, the Loan Parties hereby waive presentment and demand for payment, protest, notice of intention to accelerate, notice of acceleration, and notice of protest and nonpayment, and agree that their respective liability with respect to the Obligation (or any part thereof) shall not be affected by any renewal or extension in the time of payment of the Obligation (or any part thereof), by any indulgence, or by any release or change in any security for the payment of the Obligation (or any part thereof). 12.3 PERFORMANCE BY ADMINISTRATIVE AGENT. If any covenant, duty, or agreement of any Loan Party is not performed in accordance with the terms of the Loan Documents, after the occurrence and during the continuance of a Default, Administrative Agent may, at its option (but subject to the approval of Required Lenders), perform or attempt to perform such covenant, duty, or agreement on behalf of such Loan Party. In such event, any amount expended by Administrative Agent in such performance or attempted performance shall be payable by the Loan Parties, jointly and severally, to Administrative Agent on demand, shall become part of the Obligation, and shall bear interest at the Default Rate from the date of such expenditure by Administrative Agent until paid. Notwithstanding the foregoing, it is expressly understood that Administrative Agent does not assume, and shall never have, except by its express written consent, any liability or responsibility for the performance of any covenant, duty, or agreement of any Loan Party. 12.4 DELEGATION OF DUTIES AND RIGHTS. Lenders may perform any of their duties or exercise any of their Rights under the Loan Documents by or through their respective Representatives. 12.5 NOT IN CONTROL. Nothing in any Loan Document shall, or shall be deemed to (a) give any Agent or any Lender the Right to exercise control over the assets (including real property), affairs, or management of any Loan Party or any Subsidiary thereof, (b) preclude or interfere with compliance by any Loan Party or any Subsidiary thereof with any Law, or (c) require any act or omission by any Loan Party or any Subsidiary thereof that may be harmful to Persons or property. Any "Material Adverse Event" or other materiality qualifier in any representation, warranty, covenant, or other provision of any Loan Document is included for credit documentation purposes only and shall not, and shall not be deemed to, mean that any Agent or any Lender acquiesces in any non-compliance by any Loan Party or any Subsidiary thereof with any Law or document, or that any Agent or any Lender does not expect the Loan Parties and their respective Subsidiaries to promptly, diligently, and continuously carry out all appropriate removal, remediation, and termination activities required or appropriate in accordance with all Environmental Laws. The Agents and the Lenders have no fiduciary relationship with or fiduciary duty to any Loan Party or any Subsidiary thereof arising out of or in connection with the Loan Documents, and the relationship between the Agents and the Lenders, on the one hand, and Loan Parties, on the other hand, in connection with the Loan Documents is NBPLP CREDIT AGREEMENT 37 solely that of debtor and creditor. The power of the Agents and Lenders under the Loan Documents is limited to the Rights provided in the Loan Documents, which Rights exist solely to assure payment and performance of the Obligation and may be exercised in a manner calculated by the Agents and Lenders in their respective good faith business judgment. 12.6 COURSE OF DEALING. The acceptance by Administrative Agent or Lenders at any time and from time to time of partial payment on the Obligation shall not be deemed to be a waiver of any Default then existing. No waiver by Administrative Agent, Required Lenders, or Lenders of any Default shall be deemed to be a waiver of any other then-existing or subsequent Default. No delay or omission by Administrative Agent, Required Lenders, or Lenders in exercising any Right under the Loan Documents shall impair such Right or be construed as a waiver thereof or any acquiescence therein, nor shall any single or partial exercise of any such Right preclude other or further exercise thereof, or the exercise of any other Right under the Loan Documents or otherwise. 12.7 CUMULATIVE RIGHTS. All Rights available to Administrative Agent and Lenders under the Loan Documents are cumulative of and in addition to all other Rights granted to Administrative Agent and Lenders at law or in equity, whether or not the Obligation is due and payable and whether or not Administrative Agent or Lenders have instituted any suit for collection, foreclosure, or other action in connection with the Loan Documents. 12.8 APPLICATION OF PROCEEDS. Any and all proceeds ever received by Administrative Agent or Lenders from the exercise of any Rights pertaining to the Obligation shall be applied to the Obligation in the order and manner set forth in SECTION 3.12. 12.9 CERTAIN PROCEEDINGS. Each Loan Party will promptly execute and deliver, or cause the execution and delivery of, all applications, certificates, instruments, registration statements, and all other documents and papers Administrative Agent or Lenders may reasonably request in connection with the obtaining of any consent, approval, registration, qualification, permit, license, or Authorization of any Governmental Authority or other Person necessary or appropriate for the effective exercise of any Rights under the Loan Documents. 12.10 EXPENDITURES BY LENDERS. Borrower shall promptly pay within fifteen (15) Business Days after request therefor (a) all reasonable costs, fees, and expenses paid or incurred by Administrative Agent and Arranger, incident to any Loan Document (including, but not limited to, the reasonable fees and expenses of counsel to Administrative Agent and Arranger in connection with the negotiation, preparation, delivery, execution, coordination and administration of the Loan Documents and any related amendment, waiver, or consent) and (b) all costs and expenses of Lenders and Administrative Agent incurred by Administrative Agent or any Lender in connection with the enforcement of the obligations of any Loan Party arising under the Loan Documents (including, without limitation, costs and expenses incurred in connection with any workout or bankruptcy) or the exercise of any Rights arising under the Loan Documents (including, but not limited to, reasonable attorneys' fees, court costs and other costs of collection), all of which shall be a part of the Obligation and shall bear interest at the Default Rate from the date due until the date repaid. 12.11 INDEMNIFICATION. BORROWER AND EACH OTHER LOAN PARTY (BY EXECUTION OF A GUARANTY) AGREES TO INDEMNIFY AND HOLD HARMLESS EACH AGENT, ARRANGER, AND EACH LENDER AND EACH OF THEIR RESPECTIVE AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, AND ADVISORS (EACH, AN "INDEMNIFIED PARTY") FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES, LIABILITIES (INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL LIABILITIES), COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES) THAT MAY BE INCURRED BY OR ASSERTED OR AWARDED AGAINST ANY INDEMNIFIED PARTY, IN EACH CASE ARISING OUT OF OR IN CONNECTION WITH OR BY REASON OF (INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH ANY INVESTIGATION, LITIGATION, OR PROCEEDING OR PREPARATION OF DEFENSE IN CONNECTION THEREWITH) THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL NBPLP CREDIT AGREEMENT 38 OR PROPOSED USE OF THE PROCEEDS OF THE BORROWINGS (INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF THE INDEMNIFIED PARTY), EXCEPT TO THE EXTENT SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE IS FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IN THE CASE OF AN INVESTIGATION, LITIGATION OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 12.11 APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY THE BORROWER, ITS DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNIFIED PARTY OR ANY OTHER PERSON OR ANY INDEMNIFIED PARTY IS OTHERWISE A PARTY THERETO AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED. BORROWER AND EACH OTHER LOAN PARTY (BY EXECUTION OF A GUARANTY) AGREE NOT TO ASSERT ANY CLAIM AGAINST ANY INDEMNIFIED PARTY ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING OUT OF OR OTHERWISE RELATING TO THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE BORROWINGS. WITHOUT PREJUDICE TO THE SURVIVAL OF ANY OTHER AGREEMENT OF THE BORROWER OR GUARANTORS HEREUNDER, THE AGREEMENTS AND OBLIGATIONS OF THE LOAN PARTIES CONTAINED IN THIS SECTION 12.11 SHALL SURVIVE THE PAYMENT IN FULL OF THE BORROWINGS AND ALL OTHER AMOUNTS PAYABLE UNDER THE LOAN DOCUMENTS. SECTION 13 AGREEMENT AMONG LENDERS. 13.1 ADMINISTRATIVE AGENT. (a) Appointment of Administrative Agent. Each Lender hereby appoints Bank of America, N.A. (and Bank of America, N.A. hereby accepts such appointment) as its nominee and agent, in its name and on its behalf: (i) to act as nominee for and on behalf of such Lender in and under all Loan Documents; (ii) to arrange the means whereby the funds of Lenders are to be made available to Borrower under the Loan Documents; (iii) to take such action as may be requested by any Lender under the Loan Documents (when such Lender is entitled to make such request under the Loan Documents and after such requesting Lender has obtained the concurrence of such other Lenders as may be required under the Loan Documents); (iv) to receive all documents and items to be furnished to Lenders under the Loan Documents; (v) to timely distribute, and Administrative Agent agrees to so distribute, to each Lender all material information, requests, documents, and items received from Borrower under the Loan Documents; (vi) to promptly distribute to each Lender its ratable part of each payment or prepayment (whether voluntary, as proceeds of collateral upon or after foreclosure, as proceeds of insurance thereon, or otherwise) in accordance with the terms of the Loan Documents; (vii) to deliver to the appropriate Persons requests, demands, approvals, and consents received from Lenders; and (viii) to execute, on behalf of Lenders, such releases or other documents or instruments as are permitted by the Loan Documents or as directed by Lenders from time to time; provided, however, Administrative Agent shall not be required to take any action which exposes Administrative Agent to personal liability or which is contrary to the Loan Documents or applicable Law. (b) Resignation of Administrative Agent; Successor Administrative Agents. Administrative Agent may resign at any time as Administrative Agent under the Loan Documents by giving written notice thereof to Lenders and to Borrower. Should the initial or any successor Administrative Agent ever cease to be a party hereto or should the initial or any successor Administrative Agent ever resign as Administrative Agent, then Required Lenders shall elect the successor Administrative Agent from among the Lenders (other than the resigning Administrative Agent). Unless a Default or Potential Default has occurred and is continuing, such successor Administrative Agent shall be subject to Borrower's approval, which approval shall not be unreasonably withheld or delayed. If no successor Administrative Agent shall have been so appointed by Required Lenders, within 30 days after the retiring Administrative Agent's giving of notice of resignation, then the retiring Administrative Agent may, on behalf of Lenders, appoint a NBPLP CREDIT AGREEMENT 39 successor Administrative Agent, which shall be a commercial bank having a combined capital and surplus of at least $1,000,000,000. Upon the acceptance of any appointment as Administrative Agent under the Loan Documents by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the Rights of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations of Administrative Agent under the Loan Documents, and each Lender shall execute such documents as any Lender may reasonably request to reflect such change in and under the Loan Documents. After any retiring Administrative Agent's resignation as Administrative Agent under the Loan Documents, the provisions of this SECTION 13 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under the Loan Documents. (c) Administrative Agent as a Lender; Non-Fiduciary. Administrative Agent, in its capacity as a Lender, shall have the same Rights under the Loan Documents as any other Lender and may exercise the same as though it were not acting as Administrative Agent; the term "Lender" shall, unless the context otherwise indicates, include Administrative Agent hereunder; and any resignation, or removal of by Administrative Agent hereunder shall not impair or otherwise affect any Rights which it has or may have in its capacity as an individual Lender. Each Lender and Borrower agree that Administrative Agent is not a fiduciary for Lenders or for Borrower but simply is acting in the capacity described herein to alleviate administrative burdens for both Borrower and Lenders, that Administrative Agent has no duties or responsibilities to Lenders or Borrower except those expressly set forth herein, and that Administrative Agent in its capacity as a Lender has all Rights of any other Lender. (d) Other Activities of Administrative Agent. Administrative Agent and its Affiliates may now or hereafter be engaged in one or more loan, letter of credit, leasing, or other financing transactions with Borrower, act as trustee or depositary for Borrower, or otherwise be engaged in other transactions with Borrower (collectively, the "OTHER ACTIVITIES") not the subject of the Loan Documents. Without limiting the Rights of Lenders specifically set forth in the Loan Documents, Administrative Agent and its Affiliates shall not be responsible to account to Lenders for such other activities, and no Lender shall have any interest in any other activities, any present or future guaranties by or for the account of Borrower which are not contemplated or included in the Loan Documents, any present or future offset exercised by Administrative Agent and its Affiliates in respect of such other activities, any present or future property taken as security for any such other activities, or any property now or hereafter in the possession or control of Administrative Agent or its Affiliates which may be or become security for the obligations of Borrower arising under the Loan Documents by reason of the general description of indebtedness secured or of property contained in any other agreements, documents or instruments related to any such other activities; provided that, if any payments in respect of such guaranties or such property or the proceeds thereof shall be applied to reduction of the Obligation arising under the Loan Documents, then each Lender shall be entitled to share in such application ratably. 13.2 EXPENSES. Upon demand by Administrative Agent, each Lender shall pay its ratable portion of any expenses (including, without limitation, court costs, attorneys' fees, and other costs of collection) incurred by Administrative Agent in connection with any of the Loan Documents if and to the extent Administrative Agent does not receive reimbursement therefor from other sources within 60 days after incurred; provided that, each Lender shall be entitled to receive its ratable portion of any reimbursement for such expenses, or part thereof, which Administrative Agent subsequently receives from such other sources. 13.3 PROPORTIONATE ABSORPTION OF LOSSES. Except as otherwise provided in the Loan Documents, nothing in the Loan Documents shall be deemed to give any Lender any advantage over any other Lender insofar as the Obligation arising under the Loan Documents is concerned, or to relieve any Lender from absorbing its ratable portion of any losses sustained with respect to the Obligation (except to NBPLP CREDIT AGREEMENT 40 the extent such losses result from unilateral actions or inactions of any Lender that are not made in accordance with the terms and provisions of the Loan Documents). 13.4 DELEGATION OF DUTIES; RELIANCE. Administrative Agent may perform any of its duties or exercise any of its Rights under the Loan Documents by or through its Representatives. Administrative Agent and its Representatives shall (a) be entitled to rely upon (and shall be protected in relying upon) any writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telecopy, telegram, telex or teletype message, statement, order, or other documents or conversation believed by it or them to be genuine and correct and to have been signed or made by the proper Person and, with respect to legal matters, upon opinion of counsel selected by Administrative Agent, (b) be entitled to deem and treat each Lender as the owner and holder of the Obligation owed to such Lender for all purposes until, subject to SECTION 14.13, written notice of the assignment or transfer thereof shall have been given to and received by Administrative Agent (and any request, authorization, consent, or approval of any Lender shall be conclusive and binding on each subsequent holder, assignee, or transferee of the Obligation owed to such Lender or portion thereof until such notice is given and received), (c) not be deemed to have notice of the occurrence of a Default or Potential Default unless a responsible officer of Administrative Agent, who handles matters associated with the Loan Documents and transactions thereunder, has received written notice from a Lender or Borrower and stating that such notice is a "Notice of Default," and (d) be entitled to consult with legal counsel (including counsel for Borrower), independent accountants, and other experts selected by Administrative Agent and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts. 13.5 LIMITATION OF LIABILITY. (a) General. Neither the Administrative Agent nor any of its Representatives shall be liable for any action taken or omitted to be taken by it under the Loan Documents in good faith and reasonably believed by it to be within the discretion or power conferred upon it by the Loan Documents or be responsible for the consequences of any error of judgment, except for fraud, gross negligence, or willful misconduct; and neither the Administrative Agent nor any of its Representatives has a fiduciary relationship with any Lender by virtue of the Loan Documents (provided that, nothing herein shall negate the obligation of Administrative Agent to account for funds received by it for the account of any Lender). (b) Non-Discretionary Actions. Indemnification. Unless indemnified to its satisfaction against loss, cost, liability, and expense, the Administrative Agent shall not be compelled to do any act under the Loan Documents or to take any action toward the execution or enforcement of the powers thereby created or to prosecute or defend any suit in respect of the Loan Documents. If Administrative Agent requests instructions from Lenders or Required Lenders, as the case may be, with respect to any act or action (including, but not limited to, any failure to act) in connection with any Loan Document, Administrative Agent shall be entitled (but shall not be required) to refrain (without incurring any liability to any Person by so refraining) from such act or action unless and until it has received such instructions. Except where action of Required Lenders or all Lenders is required in the Loan Documents, Administrative Agent may act hereunder in its own discretion without requesting instructions. In no event, however, shall Administrative Agent or any of its respective Representatives be required to take any action which it or they determine could incur for it or them criminal or onerous civil liability. Without limiting the generality of the foregoing, no Lender shall have any right of action against Administrative Agent as a result of Administrative Agent's acting or refraining from acting hereunder in accordance with the instructions of Required Lenders (or all Lenders if required in the Loan Documents). (c) Independent Credit Decision. Neither Administrative Agent nor any other Agent shall be responsible in any manner to any Lender or any Participant for, and each Lender represents and warrants that it has not relied upon Administrative Agent or any other Agent in respect of, (i) the NBPLP CREDIT AGREEMENT 41 creditworthiness of any Loan Party and the risks involved to such Lender, (ii) the effectiveness, enforceability, genuineness, validity, or the due execution of any Loan Document, (iii) any representation, warranty, document, certificate, report, or statement made therein or furnished thereunder or in connection therewith, or (iv) observation of or compliance with any of the terms, covenants, or conditions of any Loan Document on the part of any Loan Party. Each Lender agrees to indemnify Administrative Agent and its respective Representatives and hold them harmless from and against (but limited to such Lender's Pro Rata Part of) 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, asserted against, or incurred by them in any way relating to or arising out of the Loan Documents or any action taken or omitted by them under the Loan Documents (INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF ADMINISTRATIVE AGENT OR ITS REPRESENTATIVES), to the extent Administrative Agent and its respective Representatives are not reimbursed for such amounts by any Loan Party (provided that, Administrative Agent and its respective Representatives shall not have the right to be indemnified hereunder for its or their own fraud, gross negligence, or willful misconduct). 13.6 DEFAULT. (a) Upon the occurrence and continuance of a Default, Lenders agree to promptly confer in order that Required Lenders or Lenders, as the case may be, may agree upon a course of action for the enforcement of the Rights of Lenders; and Administrative Agent shall be entitled to refrain from taking any action (without incurring any liability to any Person for so refraining) unless and until Administrative Agent shall have received instructions from Required Lenders. All Rights of action under the Loan Documents, if any, hereunder may be enforced by Administrative Agent and any suit or proceeding instituted by Administrative Agent in furtherance of such enforcement shall be brought in its name as Administrative Agent without the necessity of joining as plaintiffs or defendants any other Lender, and the recovery of any judgment shall be for the benefit of Lenders subject to the expenses of Administrative Agent. In actions with respect to any property of Borrower, Administrative Agent is acting for the ratable benefit of each Lender. Any and all agreements to subordinate (whether made heretofore or hereafter) other indebtedness or obligations of Borrower to the Obligation shall be construed as being for the ratable benefit of each Lender. (b) Except to the extent unanimity is required hereunder, each Lender agrees that any action taken by the Required Lenders in accordance with the provisions of the Loan Documents, and the exercise by the Required Lenders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders. 13.7 LIMITATION OF LIABILITY. To the extent permitted by Law, (a) neither Administrative Agent nor any other Agent (acting in their respective agent capacities) shall incur any liability to any other Lender, Agent, or Participant except for acts or omissions resulting from its own fraud, gross negligence or wilful misconduct, and (b) neither Administrative Agent nor any other Agent, Lender, or Participant shall incur any liability to any other Person for any act or omission of any other Lender, Agent, or Participant. 13.8 RELATIONSHIP OF LENDERS. Nothing herein shall be construed as creating a partnership or joint venture among Agents and Lenders. 13.9 BENEFITS OF AGREEMENT. None of the provisions of this SECTION 13 (other than Borrower's right to consent to a successor agent as set forth in SECTION 13.1(b)) shall inure to the benefit of any Loan Party, Guarantor, or any other Person other than Lenders; consequently, no Loan Party or any other Person shall be entitled to rely upon, or to raise as a defense, in any manner whatsoever, the failure of any Agent or any Lender to comply with such provisions. NBPLP CREDIT AGREEMENT 42 13.10 AGENTS. None of the Persons identified in this Agreement or on the cover page as "Syndication Agent," "Documentation Agent," "Lead Arranger" or "Book Manager" shall have any Rights, powers, obligations, liabilities, responsibilities, or duties under the Loan Documents other than those applicable to all Lenders as such. Without limiting the foregoing, none of the Persons so identified as a "Syndication Agent," "Documentation Agent," "Lead Arranger" or "Book Manager" shall have or be deemed to have any fiduciary relationship with any Lender. Any Person that is a "Syndication Agent," "Documentation Agent," "Lead Arranger" or "Book Manager" may voluntarily relinquish its title by giving written notice thereof to Administrative Agent and Borrower. Upon such relinquishments, a successor "Syndication Agent," "Documentation Agent," "Lead Arranger" or "Book Manager" may be appointed upon the mutual agreement of Borrower and Administrative Agent. 13.11 OBLIGATIONS SEVERAL. The obligations of Lenders hereunder are several, and each Lender hereunder shall not be responsible for the obligations of the other Lenders hereunder, nor will the failure of one Lender to perform any of its obligations hereunder relieve the other Lenders from the performance of their respective obligations hereunder. SECTION 14 MISCELLANEOUS. 14.1 HEADINGS. The headings, captions, and arrangements used in any of the Loan Documents are, unless specified otherwise, for convenience only and shall not be deemed to limit, amplify, or modify the terms of the Loan Documents, nor affect the meaning thereof. 14.2 NONBUSINESS DAYS. In any case where any payment or action is due under any Loan Document on a day which is not a Business Day, such payment or action may be delayed until the next- succeeding Business Day, but interest and fees shall continue to accrue in respect of any payment to which it is applicable until such payment is in fact made; provided that, if, in the case of any such payment in respect of a Eurodollar Rate Borrowing, the next-succeeding Business Day is in the next calendar month, then such payment shall be made on the next-preceding Business Day. 14.3 COMMUNICATIONS. Unless specifically otherwise provided, whenever any Loan Document requires or permits any consent, approval, notice, request, or demand from one party to another, such communication must be in writing (which may be by telex or telecopy) to be effective and shall be deemed to have been given (a) if by telecopy, when transmitted to the telecopy number for such party (and all such communications sent by telecopy shall be confirmed promptly thereafter by personal delivery or mailing in accordance with the provisions of this Section; provided, that any requirement in this parenthetical shall not affect the date on which such telecopy shall be deemed to have been delivered), (b) if by mail, on the third Business Day after it is enclosed in an envelope, properly addressed to such party, properly stamped, sealed, and deposited in the appropriate official postal service, or (c) if by any other means, when actually delivered to such party. Until changed by notice pursuant hereto, the address (and telecopy numbers) for Administrative Agent and each Lender, Administrative Agent, and other Agents is set forth on SCHEDULE 14.3, and for each Loan Party is the address set forth by Borrower's signature on the signature page of this Agreement and for each Guarantor is the address set forth by such Guarantor's signature on the signature page of its Guaranty. A copy of each communication to Administrative Agent shall also be sent to Haynes and Boone, LLP, 1000 Louisiana, Suite 4300, Houston, Texas 77002, Fax: 713/547-2600, Attn: Theresa Einhorn. 14.4 FORM AND NUMBER OF DOCUMENTS. Each agreement, document, instrument, or other writing to be furnished under any provision of the Loan Documents must be in form and substance and in such number of counterparts as may be reasonably satisfactory to Administrative Agent and its counsel. 14.5 EXCEPTIONS TO COVENANTS. No Loan Party shall take any action or fail to take any action which is permitted as an exception to any of the covenants contained in any Loan Document if such action or omission would result in the breach of any other covenant contained in any of the Loan Documents. NBPLP CREDIT AGREEMENT 43 14.6 SURVIVAL. All covenants, agreements, undertakings, representations, and warranties made in any of the Loan Documents shall survive all closings under the Loan Documents and, except as otherwise indicated, shall not be affected by any investigation made by any party. All rights of, and provisions relating to, reimbursement and indemnification of Administrative Agent, any Agent, or any Lender (and any other provision of the Loan Documents that expressly provides for such survival) shall survive termination of this Agreement and payment in full of the Obligation. 14.7 GOVERNING LAW. THE LAWS OF THE STATE OF TEXAS, AND THE APPLICABLE FEDERAL LAWS OF THE UNITED STATES OF AMERICA, SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THE LOAN DOCUMENTS. 14.8 INVALID PROVISIONS. If any provision in any Loan Document is held to be illegal, invalid, or unenforceable, such provision shall be fully severable; the appropriate Loan Document shall be construed and enforced as if such provision had never comprised a part thereof; and the remaining provisions thereof shall remain in full force and effect and shall not be affected by such provision or by its severance therefrom. Administrative Agent, Lenders, and each Loan Party party to such Loan Document agree to negotiate, in good faith, the terms of a replacement provision as similar to the severed provision as may be possible and be legal, valid, and enforceable. 14.9 ENTIRETY. THE RIGHTS AND OBLIGATIONS OF EACH LOAN PARTY, LENDERS, AND AGENTS SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN SUCH PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS. THIS AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY ANY LOAN PARTY, ANY GUARANTOR, ANY LENDER, AND/OR ANY AGENT (TOGETHER WITH ALL FEE LETTERS AS THEY RELATE TO THE PAYMENT OF FEES AFTER THE CLOSING DATE) REPRESENT THE FINAL AGREEMENT BETWEEN THE LOAN PARTIES, LENDERS, AND AGENTS, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN SUCH PARTIES. 14.10 JURISDICTION; VENUE; SERVICE OF PROCESS. EACH PARTY HERETO (INCLUDING EACH GUARANTOR BY EXECUTION OF A GUARANTY), IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, HEREBY (A) IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN DALLAS IN THE STATE OF TEXAS, AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION BY SERVICE OF PROCESS AS PROVIDED BY TEXAS LAW, (B) 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 LITIGATION ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION BROUGHT IN ANY SUCH COURT, (C) IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (D) AGREES TO DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN TEXAS IN CONNECTION WITH ANY SUCH LITIGATION AND TO DELIVER TO ADMINISTRATIVE AGENT EVIDENCE THEREOF, IF REQUESTED, (E) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH LITIGATION BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, AT ITS ADDRESS SET FORTH HEREIN, AND (F) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY HERETO ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE OBLIGATION SHALL BE BROUGHT IN ONE OF THE AFOREMENTIONED COURTS. The scope of each of the foregoing waivers is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including, without limitation, contract claims, tort claims, breach of duty claims, and all other common law and statutory claims. The Loan Parties and each other party to the Loan Documents acknowledge that this waiver is a material inducement to the agreement of each party hereto to enter into a business relationship, that each has already relied on this waiver in entering into the Loan Documents, and NBPLP CREDIT AGREEMENT 44 each will continue to rely on each of such waivers in related future dealings. The Loan Parties and each other party to the Loan Documents warrant and represent that they have reviewed these waivers with their legal counsel, and that they knowingly and voluntarily agree to each such waiver following consultation with legal counsel. THE WAIVERS IN THIS SECTION 14.10 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS, AND REPLACEMENTS TO OR OF THIS OR ANY OTHER LOAN DOCUMENT. 14.11 AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS. (a) Except as otherwise specifically provided, this Agreement and the other Loan Documents may be amended, modified, or waived only by an instrument in writing executed jointly by Borrower and Required Lenders (or by Administrative Agent acting upon directions of the Required Lenders), and by Administrative Agent. (b) Any amendment to or consent or waiver under any Loan Document which purports to accomplish any of the following must be by an instrument in writing executed by Borrower and executed (or approved, as the case may be) by each Lender affected thereby and by Administrative Agent: (i) increases the Commitment Sum of such Lender or extends such Lender's commitment hereunder; (ii) postpones or delays any date fixed by the Loan Documents for any payment or mandatory prepayment of all or any part of the Obligation payable to such Lender or Administrative Agent; (iii) reduces the interest rate or decreases the amount of any payment of principal, interest, fees, or other sums payable to Administrative Agent or any such Lender hereunder; (iv) changes the definition of "REQUIRED LENDERS"; (v) releases a Guaranty; or (vi) changes this CLAUSE (b) or any other matter specifically requiring the consent of all Lenders hereunder. (c) Any conflict or ambiguity between the terms and provisions of this Agreement and terms and provisions in any other Loan Document shall be controlled by the terms and provisions herein. (d) No course of dealing nor any failure or delay by Administrative Agent, any Lender, or any of their respective Representatives with respect to exercising any Right of Administrative Agent or any Lender hereunder shall operate as a waiver thereof. A waiver must be in writing and signed by Administrative Agent and Required Lenders (or by all Lenders, if required hereunder) to be effective, and such waiver will be effective only in the specific instance and for the specific purpose for which it is given. 14.12 MULTIPLE COUNTERPARTS. The Loan Documents may be executed in a number of identical counterparts, each of which shall be deemed an original for all purposes and all of which constitute, collectively, one agreement; but, in making proof of any Loan Document, it shall not be necessary to produce or account for more than one such counterpart. It is not necessary that each Lender execute the same counterpart so long as identical counterparts are executed by Borrower, each Lender, and Administrative Agent. This Agreement shall become effective when counterparts hereof shall have been executed and delivered to Administrative Agent by each Lender, Administrative Agent, and Borrower, or, when Administrative Agent shall have received telecopied, telexed, or other evidence satisfactory to it that such party has executed and is delivering to Administrative Agent a counterpart hereof. 14.13 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS. (a) This Agreement shall be binding upon, and inure to the benefit of the parties hereto and their respective successors and assigns, except that (i) Borrower may not, directly or indirectly, assign or transfer, or attempt to assign or transfer, any of its Rights, duties, or obligations under any Loan Documents without the express written consent of all Lenders, and (ii) except as permitted NBPLP CREDIT AGREEMENT 45 under this Section, no Lender may transfer, pledge, assign, sell any participation in, or otherwise encumber its portion of the Obligation. (b) Each Lender may assign to one or more Eligible Assignees all or a portion of its Rights and obligations under the Loan Documents (including, without limitation, all or a portion of its Borrowings and its Notes to the extent any Principal Debt owed to such assigning Lender is evidenced by a Note or Notes); provided, however, that: (i) each such assignment shall be to an Eligible Assignee; (ii) except in the case of an assignment to another Lender or in the case of an assignment of all of a Lender's Rights and obligations under the Loan Documents, any such partial assignment under the Facility shall not be less than $5,000,000 unless Borrower and Administrative Agent consent thereto (in their sole discretion) in writing which may be evidenced by their acceptance and execution of the related Assignment and Acceptance Agreement; provided that, no partial assignment for the Facility (including any assignment among Lenders) may result in any Lender holding less than $10,000,000, provided further that, a Lender may hold an amount less than $10,000,000 but greater than $5,000,000 only if such Lender shall hold at least $10,000,000 in the aggregate of this Facility and the Multi- Year Revolving Agreement (notwithstanding the foregoing, in the event the Multi-Year Revolving Agreement is terminated, any Lender may continue to hold an amount in this Facility greater than or equal to the amount such Lender held on the date of the termination of the Multi-Year Revolving Agreement); (iii) the parties to such assignment shall execute and deliver to Administrative Agent for its acceptance an Assignment and Acceptance Agreement in the form of EXHIBIT E hereto, together with any Notes (to the extent any Principal Debt owed to such assigning Lender is evidenced by a Note or Notes) subject to such assignment and a processing fee of $3,500, including, without limitation, any assignment between Lenders; and (iv) so long as any Lender is an Agent under this Agreement, such Lender (or an Affiliate of such Lender) shall retain an economic interest in the Loan Documents, will not assign all of its Rights, duties, or obligations under the Loan Documents, except to an Affiliate of such Lender, and will not enter into any Assignment and Acceptance Agreement that would have the effect of such Lender assigning all of its Rights, duties, or obligations under the Loan Documents to any Person other than an Affiliate of such Lender unless such Agent has relinquished such title in accordance with SECTION 13.1 (with respect to Administrative Agent) or SECTION 13.10 (with respect to the other Agents). Upon execution, delivery, and acceptance of such Assignment and Acceptance Agreement, the assignee thereunder shall be a party hereto and, to the extent of such assignment, have the obligations, Rights, and benefits of a Lender under the Loan Documents and the assigning Lender shall, to the extent of such assignment, relinquish its Rights and be released from its obligations under the Loan Documents. Upon the consummation of any assignment pursuant to this Section, but only upon the request of the assignor or assignee made through Administrative Agent, Borrower shall issue appropriate Notes to the assignor and the assignee, reflecting such Assignment and Acceptance. If the assignee is not incorporated under the laws of the United States of America or a state thereof, it shall deliver to Borrower and Administrative Agent certification as to exemption from deduction or withholding of Taxes in accordance with SECTION 4.6. (c) Administrative Agent shall maintain at its address referred to in SECTION 14.3 a copy of each Assignment and Acceptance Agreement delivered to and accepted by it and a register for NBPLP CREDIT AGREEMENT 46 the recordation of the names and addresses of the Lenders and the Commitment Percentage, and principal amount of the Borrowings owing to, each Lender from time to time (the "REGISTER"). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and Borrower, Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of the Loan Documents. The Register shall be available for inspection by Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice. Upon the consummation of any assignment in accordance with this SECTION 14.13, SCHEDULE 2.1 shall automatically be deemed amended (to the extent required) by Administrative Agent to reflect the name, address, and, where appropriate, respective Committed Sums under the Facility (as the case may be) of the assignor and assignee. (d) Upon its receipt of an Assignment and Acceptance Agreement executed by the parties thereto, together with any Notes (to the extent any Principal Debt owed to such assigning Lender is evidenced by a Note or Notes) subject to such assignment and payment of the processing fee, Administrative Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of EXHIBIT E hereto, (i) accept such Assignment and Acceptance Agreement, (ii) record the information contained therein in the Register, and (iii) give prompt notice thereof to the parties thereto. (e) Subject to the provisions of this Section and in accordance with applicable Law, any Lender may, in the ordinary course of its commercial banking business and in accordance with applicable Law, at any time sell to one or more Persons (each a "PARTICIPANT") participating interests in its portion of the Obligation. In the event of any such sale to a Participant, (i) such Lender shall remain a "Lender" under the Loan Documents and the Participant shall not constitute a "Lender" hereunder, (ii) such Lender's obligations under the Loan Documents shall remain unchanged, (iii) such Lender shall remain solely responsible for the performance thereof, (iv) such Lender shall remain the holder of its share of the Principal Debt for all purposes under the Loan Documents, (v) Borrower and Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender's Rights and obligations under the Loan Documents, and (vi) such Lender shall be solely responsible for any withholding taxes or any filing or reporting requirements relating to such participation and shall hold Borrower and Administrative Agent and their respective successors, permitted assigns, officers, directors, employees, agents, and representatives harmless against the same. Participants shall have no Rights under the Loan Documents, other than certain voting Rights as provided below. Subject to the following, each Lender shall be entitled to obtain (on behalf of its Participants) the benefits of SECTION 4 with respect to all participations in its part of the Obligation outstanding from time to time, so long as Borrower shall not be obligated to pay any amount in excess of the amount that would be due to such Lender under SECTION 4 calculated as though no participations have been made. No Lender shall sell any participating interest under which the Participant shall have any Rights to approve any amendment, modification, or waiver of any Loan Document, except to the extent such amendment, modification, or waiver extends the due date for payment of any amount in respect of principal (other than mandatory prepayments), interest, or fees due under the Loan Documents, reduces the interest rate or the amount of principal or fees applicable to the Obligation (except such reductions as are contemplated by the Loan Documents), or releases all or any substantial portion of the Guaranties under the Loan Documents; provided that, in those cases where a Participant is entitled to the benefits of SECTION 4 or a Lender grants Rights to its Participants to approve amendments to or waivers of the Loan Documents respecting the matters previously described in this sentence, such Lender must include a voting mechanism in the relevant participation agreement or agreements, as the case may be, whereby a majority of such Lender's portion of the Obligation (whether held by such Lender or Participant) shall control the vote for all of such Lender's portion of the Obligation. Except in the case of the sale of a participating interest to another Lender, the relevant participation agreement shall not permit the Participant to transfer, pledge, assign, sell participations in, or otherwise encumber its portion of the Obligation, unless the consent of the transferring Lender (which consent will not be unreasonably withheld) has been obtained. NBPLP CREDIT AGREEMENT 47 (f) Notwithstanding any other provision set forth in this Agreement, any Lender may, without notice to, or the consent of Borrower or Administrative Agent, at any time assign and pledge all or any portion of its Borrowings and its Notes (to the extent any Principal Debt owed to such assigning Lender is evidenced by a Note or Notes) to any Federal Reserve Bank as collateral security pursuant to Regulation A and any Operating Circular issued by such Federal Reserve Bank or any Lender which is a fund may pledge all or any portion of its Borrowings and its Notes (to the extent any Principal Debt owed to such assigning Lender is evidenced by a Note or Notes) to its trustee in support of its obligations to its trustee. No such assignment shall release the assigning Lender from its obligations hereunder. (g) Any Lender may furnish any information concerning the Loan Parties in the possession of such Lender from time to time to Eligible Assignees and Participants (including prospective Eligible Assignees and Participants), subject to the provisions of SECTION 14.14. 14.14 CONFIDENTIALITY. The Administrative Agent and each Lender (each, a "LENDING PARTY") agrees to keep confidential any information furnished or made available to it by any Loan Party pursuant to this Agreement that is marked confidential; provided that nothing herein shall prevent any Lending Party from disclosing such information (a) to any other Lending Party or any affiliate of any Lending Party, or any officer, director, employee, agent, or advisor of any Lending Party or affiliate of any Lending Party, (b) to any other Person if reasonably incidental to the administration of the credit facility provided herein, (c) as required by any law, rule, or regulation, (d) upon the order of any court or administrative agency, (e) upon the request or demand of any regulatory agency or authority, (f) that is or becomes available to the public or that is or becomes available to any Lending Party other than as a result of a disclosure by any Lending Party prohibited by this Agreement, (g) in connection with any litigation to which such Lending Party or any of its affiliates may be a party, (h) to the extent necessary in connection with the exercise of any remedy under this Agreement or any other Loan Document, and (i) subject to provisions substantially similar to those contained in this Section, to any actual or proposed Participant or Eligible Assignee. 14.15 DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN CIRCUMSTANCES. The obligations of each Loan Party under the Loan Documents shall remain in full force and effect until termination of the Commitment, payment in full of the Principal Debt and of all interest, fees, and other amounts of the Obligation then due and owing, except that SECTIONS 4, 12, and 14, and any other provisions under the Loan Documents expressly intended to survive by the terms hereof or by the terms of the applicable Loan Documents, shall survive such termination. If at any time any payment of the principal of or interest on any Note or any other amount payable by Borrower under any Loan Document is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy, or reorganization of Borrower or otherwise, the obligations of each Loan Party under the Loan Documents with respect to such payment shall be reinstated as though such payment had been due but not made at such time. 14.16 NO GENERAL PARTNERS' LIABILITY. The Lenders agree for themselves and their respective successors and assigns, including any subsequent holder of any Note, that any claim against Borrower which may arise under any Loan Document shall be made only against and shall be limited to the assets of Borrower, except to the extent Intermediate Partnership may have obligations with respect to such claim pursuant to the terms of its Guaranty, and that no judgment, order or execution entered in any suit, action or proceeding, whether legal or equitable, on this Agreement, such Note or any of the other Loan Documents shall be obtained or enforced against any General Partner or its assets for the purpose of obtaining satisfaction and payment of such Note, the Debt evidenced thereby or any claims arising thereunder or under this Agreement or any other Loan Document, any right to proceed against the General Partners individually or their respective assets being hereby expressly waived, renounced and remitted by the Lenders for themselves and their respective successor and assigns. Nothing in this SECTION 14.16, however, shall be construed so as to prevent the Administrative Agent, any Lender or any other holder of any Note from NBPLP CREDIT AGREEMENT 48 commencing any action, suit or proceeding with respect to or causing legal papers to be served upon any General Partner for the purpose of obtaining jurisdiction over Borrower. [REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURE PAGES FOLLOW.] NBPLP CREDIT AGREEMENT 49 NORTHERN BORDER PARTNERS, L.P. By: /s/ JERRY L. PETERS ------------------------------------------------- Name: Jerry L. Peters -------------------------------------------- Title: Chief Financial and Accounting Officer ------------------------------------------- Address for Notices: Northern Border Partners, L.P. 1400 Smith Street Houston, TX 77002 Attn: Angus Hardie Davis NBP Services Corporation Telephone: 713/853-6941 Telecopy: 713/646-4970 with a copy to: Mr. Jerry L. Peters Chief Financial and Accounting Officer Northern Border Partners, L.P. 1111 South 103rd Street Omaha, NE 68124-1000 Telephone: 402/398-7722 Telecopy: 402/398-7803 and with a copy to: Ms. Janet Place Vice President, Legal Northern Plains Natural Gas Company 1111 South 103rd Street Omaha, NE 68124-1000 Telephone: 402/398-7886 Telecopy: 402/398-7780 [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] BANK OF AMERICA, N.A., as Administrative Agent and as a Lender By: /s/ DENISE A. SMITH ------------------------------------------------------ Denise A. Smith Managing Director [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] SUNTRUST BANK By: /s/ STEVEN J. NEWBY ------------------------------------------------- Name: Steven J. Newby ------------------------------------------- Title: Vice President ------------------------------------------- [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] BANK ONE, NA By: /s/ HELEN A. CARR ---------------------------------------- Name: Helen A. Carr --------------------------------- Title: First Vice President --------------------------------- [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] BANK OF MONTREAL By: /s/ CAHAL B. CARMODY ---------------------------------------- Name: Cahal B. Carmody --------------------------------- Title: Director --------------------------------- [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] ROYAL BANK OF CANADA By: /s/ DAVID A. McCLUSKEY ---------------------------------------- Name: David A. McCluskey --------------------------------- Title: Manager --------------------------------- [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] THE FUJI BANK, LIMITED By: /s/ JACQUES AZAGURY ---------------------------------------- Name: Jacques Azagury --------------------------------- Title: Senior Vice President & Manager --------------------------------- [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] FIRST NATIONAL BANK OF OMAHA By: /s/ JEFF A. SIMS ---------------------------------------- Name: Jeff A. Sims --------------------------------- Title: Vice President --------------------------------- [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] SCHEDULE 2.1 LENDERS AND COMMITMENTS
COMMITMENT LENDER COMMITMENT PERCENTAGE - ------------------------------- ------------ -------------- Bank of America, N.A. $ 15,000,000 20.000000000% SunTrust Bank 12,500,000 16.666666667% Bank One, NA 12,500,000 16.666666667% Bank of Montreal 10,000,000 13.333333333% Royal Bank of Canada 10,000,000 13.333333333% The Fuji Bank, Limited 10,000,000 13.333333333% First National Bank of Omaha 5,000,000 06.666666667% ------------ Total $ 75,000,000 100.000000000%
SCHEDULE 7.1 CONDITIONS PRECEDENT TO CLOSING The Agreement and related Loan Documents shall not become effective unless Administrative Agent has received all of the following (unless otherwise indicated, all documents shall be dated as of the Closing Date, and all terms used with their initial letters capitalized are used herein with their meanings as defined in the Agreement): 1. The Agreement. The Agreement (together with all Schedules and Exhibits thereto) executed by Borrower, each Lender, and Administrative Agent. 2. Delivery of Notes. With respect to any Lender requesting Notes, the Administrative Agent shall have received, for the account of each such Lender, its Notes duly executed and delivered by Borrower. 3. Guaranty. The Administrative Agent shall have received the Guaranty duly executed and delivered by Intermediate Partnership. 4. Resolutions, etc. (a) The Administrative Agent shall have received from the Secretary or an Assistant Secretary of the Administrator of each of Borrower and Intermediate Partnership a certificate, dated the Closing Date, as to: (i) copies of action taken by the Partnership Policy Committee of Borrower or Intermediate Partnership or other partnership action of Borrower or Intermediate Partnership with respect to the Agreement, the Notes, the Guaranty and any other Loan Document to be signed by Borrower or Intermediate Partnership, as the case may be; (ii) the incumbency and signatures of those of the officers of Borrower and Intermediate Partnership authorized to act with respect to the Agreement, the Notes, the Guaranty and each other Loan Document executed on behalf of Borrower or Intermediate Partnership, as the case may be; (iii) the Partnership Agreement or Intermediate Partnership Agreement (as the case may be) and all amendments and supplements thereto; and (iv) the Partnership Agreement of NBPC and all amendments and supplements thereto. (b) The Administrative Agent shall have received from the Borrower and Intermediate Partnership certificates of appropriate public officials as to the existence and good standing of such entity in its jurisdiction of organization. (c) The Administrative Agent shall have received a certificate executed by a Responsible Officer stating that the representations and warranties contained in SECTION 8 are true and correct in all respects on and as of the Closing Date, and no Potential Default or Default has occurred and is continuing as of the Closing Date. 5. Opinions of Counsel. The Administrative Agent shall have received opinions, dated the date of the Closing Date and addressed to the Administrative Agent and all Lenders, from (i) Vinson & Elkins, L.L.P. counsel to Borrower and Intermediate Partnership, substantially in the form of EXHIBIT F-1 hereto; (ii) Janet Place, Vice President and General Counsel of Northern Plains Natural Gas Company, substantially in the form of EXHIBIT F-2 hereto; (iii) counsel for Pan Border, substantially in the form of EXHIBIT F-3 hereto and (iv) counsel for Northwest Border, substantially in the form of EXHIBIT F-4 hereto. 6. Terminating Commitments under Existing Credit Agreements. Repayment of all amounts owed under the Existing Credit Agreements and evidence satisfactory to Administrative Agent of termination of commitments to extend credit thereunder. 7. Debt Ratings. Evidence satisfactory to Administrative Agent that Borrower shall have received from Moody's and S&P investment-grade ratings for its long-term senior unsecured, non-credit enhanced debt. 8. Borrowing Notice. If applicable, a duly completed Borrowing Notice for the initial Borrowing, delivered to Administrative Agent. 9. Payment of Fees and Closing Fees. Payment of all fees payable on or prior to the Closing Date to Administrative Agent, Arranger, or any Lender, including those provided for in SECTION 5 of the Agreement, together with reimbursements to Administrative Agent and Arranger for all fees and expenses incurred in connection with the negotiation, preparation, and closing of the transactions evidenced by the Loan Documents (including, without limitation, attorneys' fees and expenses). 10. Appointment of Agent. Evidence satisfactory to Administrative Agent that each of Borrower and Guarantor has appointed an agent for service of process pursuant to SECTION 14.10. 11. Other Documents. Such other agreements, documents, instruments, opinions, certificates, and evidences as Administrative Agent may reasonably request. 2 SCHEDULE 8.3 SUBSIDIARIES AND PARTNERSHIP INTERESTS
Subsidiary of Borrower Name of Subsidiary Percentage Owned - ------------------ ---------------- Northern Border Intermediate Limited Partnership 99% (limited partnership interest)
Subsidiaries of Intermediate Partnership Name of Subsidiary Percentage Owned - ------------------ ---------------- Northern Border Pipeline Company, a Texas 70% (general partnership interest) general partnership NBP Energy Pipelines, L.L.C., a Delaware 100% limited liability company Black Mesa Holdings, Inc., a Delaware corporation 100% Black Mesa Pipeline Operations, L.L.C., 100% a Delaware limited liability company Black Mesa Technologies, Inc., 100% an Oklahoma corporation Black Mesa Technologies Services, L.L.C. 60% an Oklahoma limited liability company Subsidiaries of Black Mesa Holdings, Inc. Black Mesa Pipeline, Inc., a Delaware corporation 100% Other Investments Bighorn Gas Gathering, L.L.C. 39% (common membership interest) 80% of Preferred A shares
SCHEDULE 10.1 EXISTING DEBT (THOUSANDS OF DOLLARS)
NORTHERN BORDER PIPELINE COMPANY: 4/30/00 --------- Senior Notes - average 8.43% due from 2000 to 2003 250,000 Pipeline Credit Agreement Term loan due 2002 429,000 Five-year revolving credit facility 15,000 Senior Notes - 7.75% due 2009 200,000 Unamortized proceeds from termination of interest rate forward agreements 12,074 Unamortized debt discount (913) --------- 905,161 BLACK MESA HOLDINGS, INC. AND BLACK MESA PIPELINE, INC.: 10.7% Note Agreement, due quarterly to 2004 15,509
SCHEDULE 14.3 ADDRESSES FOR NOTICES ADMINISTRATIVE AGENT Notices (other than Requests for Extensions of Credit): Bank of America, N.A. 901 Main Street, 64th Floor Dallas, Texas 75202 Attn: Ms. Denise Smith Managing Director Phone: (214) 209-1261 Fax: (214) 209-1285 with a copy to: Bank of America, N.A. 901 Main Street, 64th Floor Dallas, Texas 75202 Attn: Mr. Ben Cosgrove Phone: (214) 209-9254 Fax: (214) 290-9439 Requests for Extensions of Credit (Borrowings and LCs): Bank of America, N.A., as Administrative Agent 901 Main Street, 64th Floor Dallas, Texas 75202 Attn: Mr. Ben Cosgrove Phone: (214) 209-9254 Fax: (214) 290-9439 BANK OF AMERICA, N.A., as a Bank Address for Notices: Bank of America, N.A. 901 Main Street, 64th Floor Dallas, Texas 75202 Attn: Ms. Denise Smith Managing Director Phone: (214) 209-1261 Fax: (214) 209-1285 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): Bank of America, N.A. 901 Main Street Dallas, Texas 75202 Attn: Mr. Ben Cosgrove Phone: (214) 209-9254 Fax: (214) 290-9439 SUNTRUST BANK Address For Notices: SunTrust Bank 303 Peachtree Street NE, Third Floor Atlanta, Georgia 30308 Attn: Mr. Todd Davis Vice President Phone: (404) 658-4917 Fax: (404) 827-6270 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): SunTrust Bank 25 Park Place M/C 1941, 21st Floor Atlanta, Georgia 30303 Attn: Ms. Ernestine Fambraugh Corporate Banking Assistant Phone: (404) 581-1612 Fax: (404) 575-2730 BANK ONE, NA Address for Notices: Bank One, NA 1 Bank One Plaza 10th Floor, Suite 0634 Chicago, Illinois 60670 Attn: Mr. John Beirne Phone: (312) 732-3659 Fax: (312) 732-4840 with a copy to: Bank One, NA 910 Travis Street, 6th Floor Houston, Texas 77002 Attn: Ms. Helen Carr Phone: (713) 751-3731 Fax: (713) 751-3760 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): Bank One, NA 1 Bank One Plaza 10th Floor, Suite 0634 Chicago, Illinois 60670 Attn: Mr. John Beirne Phone: (312) 732-3659 Fax: (312) 732-4840 BANK OF MONTREAL Addresses For Notices: BMO Nesbitt Burns 700 Louisiana Street, Suite 4400 Houston, Texas 77002 Attn: Mr. Cahal Carmody Vice President Phone: (713) 546-9750 Fax: (713) 223-4007 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): Bank of Montreal 115 South LaSalle Floor 11 West Chicago, Illinois 60603 Attn: Mr. Keiko Kuze Client Services Officer Phone: (312) 750-3771 Fax: (312) 750-4304 ROYAL BANK OF CANADA Address For Notices: Royal Bank of Canada c/o New York Branch One Liberty Plaza, 4th Floor New York, New York 10006 Attn: Ms. Linda Joannou Phone: (416) 955-6569 Fax: (416) 955-6720 with a copy to: Royal Bank of Canada 5700 Williams Tower 2800 Post Oak Boulevard Houston, Texas 77056 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): First National Bank of Omaha 1620 Dodge Omaha, Nebraska 68102 Attn: Mr. Jeff Sims Phone: (402) 633-3511 Fax: (402) 633-33519 Attn: Mr. David A. McCluskey Manager Phone: (713) 403-5666 Fax: (713) 403-5624 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): Royal Bank of Canada, New York c/o New York Branch One Liberty Plaza, 4th Floor New York, New York 10006 Attn: Ms. Linda Joannou Phone: (416) 955-6569 Fax: (416) 955-6720 THE FUJI BANK, LIMITED Address For Notices: The Fuji Bank, Limited One Houston Center, Suite 4100 1221 McKinney Street Houston, Texas 77010 Attn: Mr. Jacques Azagury Phone: (713) 650-7845 Fax: (713) 759-0048 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): The Fuji Bank, Limited 2 World Trade Center, 79th Floor New York, New York 10048 Attn: Tina Catapano Phone: (212) 898-2099 Fax: (212) 488-8216 FIRST NATIONAL BANK OF OMAHA Address For Notices: First National Bank of Omaha 1620 Dodge Omaha, Nebraska 68102 Attn: Mr. Jeff Sims Phone: (402) 633-3511 Fax: (402) 633-3519 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): First National Bank of Omaha 1620 Dodge Omaha, Nebraska 68102 Attn: Mr. Jeff Sims Phone: (402) 633-3511 Fax: (402) 633-3519 EXHIBIT A FORM OF NOTE $ ------------ ------------ --, ---- FOR VALUE RECEIVED, the undersigned, NORTHERN BORDER PARTNERS, L.P., a Delaware limited partnership ("BORROWER"), hereby promises to pay to the order of ______________________ ("LENDER"), at the offices of BANK OF AMERICA, N.A., as Administrative Agent for Lender and others as hereinafter described, on the Termination Date for the Facility, the lesser of (a) $_______________ and (b) the aggregate Principal Debt disbursed by Lender to Borrower and outstanding and unpaid on the Termination Date for the Facility (together with accrued and unpaid interest thereon). This note has been executed and delivered under, and is subject to the terms of, the 364-Day Credit Agreement, dated as of June 28, 2000 (as amended, modified, supplemented, or restated from time to time, the "CREDIT AGREEMENT"), among Borrower, Administrative Agent, and Lender and other lenders and Agents party thereto, and is one of the "Notes" referred to therein. Unless defined herein, capitalized terms used herein that are defined in the Credit Agreement have the meaning given to such terms in the Credit Agreement. Reference is made to the Credit Agreement for provisions affecting this note regarding applicable interest rates, principal and interest payment dates, final maturity, voluntary and mandatory prepayments, acceleration of maturity, exercise of Rights, payment of attorneys' fees, court costs, and other costs of collection, certain waivers by Borrower and others now or hereafter obligated for payment of any sums due hereunder and security for the payment hereof. Without limiting the immediately preceding sentence, reference is made to SECTION 3.9 of the Credit Agreement for usury savings provisions. THE LAWS OF THE STATE OF TEXAS, AND THE APPLICABLE FEDERAL LAWS OF THE UNITED STATES OF AMERICA, SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION HEREOF. NORTHERN BORDER PARTNERS, L.P. By: ------------------------------ Name: ------------------------- Title: ------------------------ EXHIBIT B-1 FORM OF BORROWING NOTICE (Northern Border Partners, L.P.) Dated: , -------------- -- ---- Bank of America, N.A. as Administrative Agent for the Lenders as defined in the Credit Agreement referred to below 901 Main Street Dallas, TX 75202 Attn: Ben Cosgrove Reference is made to the 364-Day Credit Agreement, dated as of June 28, 2000 (as amended, modified, supplemented, or restated from time to time, the "CREDIT AGREEMENT"), among Northern Border Partners, L.P., a Delaware limited partnership ("BORROWER"), Bank of America, N.A., as Administrative Agent, and Lenders party thereto. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. Borrower hereby gives you notice pursuant to SECTION 2.4 of the Credit Agreement that it requests a Borrowing under the Credit Agreement, and in that connection sets forth below the terms on which such Borrowing is requested to be made: (A) Borrowing Date of Borrowing(1) (A) --------------------- (B) Amount of Borrowing(2) (B) --------------------- (C) Type of Borrowing(3) (C) --------------------- (D) For a Eurodollar Rate Borrowing, the Interest Period and the last day thereof(4) (D) --------------------- Borrower hereby certifies that the following statements are true and correct on the date hereof, and will be true and correct on the Borrowing Date specified herein after giving effect to such Borrowing: (a) The requested Borrowing will not cause the Principal Debt to exceed the Commitment; (b) All of the representations and warranties of the Loan Parties set forth in the Loan Documents are true and correct in all material respects (except to the extent that the representations and warranties speak to a specific date); (c) No Default or Potential Default has occurred and is continuing or will arise after giving effect to the requested Borrowing. Very truly yours, NORTHERN BORDER PARTNERS, L.P. By: ------------------------------ Name: ----------------------- Title: ----------------------- Notes: (1) For any Borrowing under the Facility must be a Business Day occurring prior to the Termination Date and be at least (a) three Business Days following receipt by Administrative Agent of this Borrowing Notice for any Eurodollar Rate Borrowing, and (b) on or before the Business Day following receipt by Administrative Agent of this Borrowing Notice for any Base Rate Borrowing. (2) Not less than $5,000,000 or an integral multiple of $1,000,000 for the Facility. (3) Eurodollar Rate Borrowing or Base Rate Borrowing. (4) 1, 2, 3, or 6 months -- in no event may the Interest Period for the Facility end after the Termination Date. EXHIBIT B-2 FORM OF CONVERSION NOTICE (Northern Border Partners, L.P.) Dated: , -------------- -- ---- Bank of America, N.A. as Administrative Agent for the Lenders as defined in the Credit Agreement referred to below 901 Main Street Dallas, TX 75202 Attn: Ben Cosgrove Reference is made to the 364-Day Credit Agreement, dated as of June 28, 2000 (as amended, modified, supplemented, or restated from time to time, the "CREDIT AGREEMENT"), among Northern Border Partners, L.P., a Delaware limited partnership ("BORROWER"), Bank of America, N.A., as Administrative Agent, and Lenders party thereto. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. Borrower hereby gives you notice pursuant to SECTION 3.11 of the Credit Agreement that it elects to convert a Borrowing under the Credit Agreement from one Type to another Type or elects a new Interest Period for a Eurodollar Rate Borrowing, and in that connection sets forth below the terms on which such election is requested to be made: (A) Date of conversion or last day of applicable Interest Period(1) (A) ---------------------- (B) Principal amount of existing Borrowing being converted or continued(2) (B) ---------------------- (C) New Type of Borrowing selected (or Type of Borrowing continued)(3) (C) ---------------------- (D) For conversion to, or continuation of, a Eurodollar Rate Borrowing, Interest Period and the last day thereof(4) (D) ---------------------- As of the date hereof and of the requested Conversion, no Default or Potential Default has occurred and is continuing. Very truly yours, NORTHERN BORDER PARTNERS, L.P. By: ------------------------------ Name: ----------------------- Title: ----------------------- (1) Must be a Business Day at least (a) three Business Days following receipt by Administrative Agent of this Conversion Notice for any conversion from a Base Rate Borrowing to a Eurodollar Rate Borrowing or a continuation of a Eurodollar Rate Borrowing for an additional Interest Period, and (b) on or before the Business Day following receipt by Administrative Agent of this Conversion Notice for a conversion from a Eurodollar Rate Borrowing to a Base Rate Borrowing. (2) Not less than $5,000,000 or a greater integral multiple of $1,000,000 (if a Eurodollar Rate Borrowing). (3) Eurodollar Rate Borrowing or Base Rate Borrowing. (4) 1, 2, 3, or 6 months -- in no event may the Interest Period for the Facility end after the Termination Date. EXHIBIT C FORM OF GUARANTY 364-DAY CREDIT AGREEMENT THIS GUARANTY is executed as of June 28, 2000, by the undersigned ("GUARANTOR"), for the benefit of BANK OF AMERICA, N.A., a national banking association (in its capacity as Administrative Agent for the benefit of Lenders) (this "GUARANTY"). A. Contemporaneously herewith Borrower shall enter into that certain 364-Day Credit Agreement dated as of even date herewith among Borrower, Lenders, Bank of America, N.A., as Administrative Agent, for itself and the other Lenders, SunTrust Bank, Atlanta, as Syndication Agent and Banc One Capital Markets, Inc., as Documentation Agent (as amended, restated or otherwise modified, the "CREDIT AGREEMENT"); and B. As a condition precedent to the making of the initial Borrowing under the Credit Agreement, the Guarantor is required to execute and deliver this Guaranty; and C. The Guarantor has duly authorized the execution, delivery and performance of this Guaranty; and D. It is in the best interests of the Guarantor to execute this Guaranty inasmuch as the Guarantor will derive substantial direct and indirect benefits from the Borrowings made from time to time to Borrower by the Lenders pursuant to the Credit Agreement; and E. This Guaranty is integral to the transactions contemplated by the Loan Documents, and the execution and delivery thereof, is a condition precedent to Lenders' obligations to extend credit under the Loan Documents. ACCORDINGLY, for adequate and sufficient consideration, the receipt and adequacy of which are hereby acknowledged, Guarantor guarantees to Administrative Agent and Lenders the prompt payment of the Guaranteed Debt (defined below) and agrees as follows: 1. DEFINITIONS. Terms defined in the Credit Agreement have the same meanings when used, unless otherwise defined, in this Guaranty. As used in this Guaranty: BORROWER means Borrower, Borrower as a debtor-in-possession, and any receiver, trustee, liquidator, conservator, custodian, or similar party appointed for Borrower or for all or substantially all of Borrower's assets under any Debtor Relief Law. CREDIT AGREEMENT is defined in the recitals to this Guaranty. GUARANTEED DEBT means, collectively, (a) the Obligation, (b) any and all present and future indebtedness, obligations and liabilities of any Loan Party under any present or future Derivative Transactions between any Loan Party and any Lender (or Affiliate of any Lender) and (b) all present and future costs, attorneys' fees, and expenses reasonably incurred by Administrative Agent or any Lender to enforce Borrower's, Guarantor's, or any other obligor's payment of any of the Guaranteed Debt, including, without limitation (to the extent lawful), all present and future amounts that would become due but for the operation of Sections 502 or 506 or any other provision of Title 11 of the United States Code and all present and future accrued and unpaid interest (including, without limitation, all post-maturity interest and any post-petition interest in any proceeding under Debtor Relief Laws to which Borrower or Guarantor becomes subject). GUARANTOR is defined in the preamble to this Guaranty. LENDER means, individually, or LENDERS means, collectively, on any date of determination, Administrative Agent and Lenders. SUBORDINATED DEBT means all present and future obligations of Borrower to Guarantor, whether those obligations are (a) direct, indirect, fixed, contingent, liquidated, unliquidated, joint, several, or joint and several, (b) due or to become due to Guarantor, (c) held by or are to be held by Guarantor, (d) created directly or acquired by assignment or otherwise, or (e) evidenced in writing. 2. GUARANTY. This is an absolute, irrevocable, and continuing guaranty of payment, not collection, and the circumstance that at any time or from time to time the Guaranteed Debt may be paid in full does not affect the obligation of Guarantor with respect to the Guaranteed Debt incurred after that. This Guaranty remains in effect until the Guaranteed Debt is fully paid and performed, all commitments to extend any credit under the Loan Documents have terminated. Guarantor may not rescind or revoke its obligations with respect to the Guaranteed Debt. Notwithstanding any contrary provision, it is the intention of Guarantor, Lenders, and Administrative Agent that the amount of the Guaranteed Debt guaranteed by Guarantor by this Guaranty shall be in, but not in excess of, the maximum amount permitted by fraudulent conveyance, fraudulent transfer, or similar Laws applicable to Guarantor. Accordingly, notwithstanding anything to the contrary contained in this Guaranty or any other agreement or instrument executed in connection with the payment of any of the Guaranteed Debt, the amount of the Guaranteed Debt guaranteed by Guarantor by this Guaranty shall be limited to an aggregate amount equal to the largest amount that would not render Guarantor's obligations hereunder subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provision of any applicable state law. 3. CONSIDERATION. Guarantor represents and warrants that its liability under this Guaranty may reasonably be expected to directly or indirectly benefit it. 4. CUMULATIVE RIGHTS. If Guarantor becomes liable for any indebtedness owing by Borrower to Administrative Agent or any Lender, other than under this Guaranty, that liability may not be in any manner impaired or affected by this Guaranty. The Rights of Administrative Agent or Lenders under this Guaranty are cumulative of any and all other Rights that Administrative Agent or Lenders may ever have against Guarantor. The exercise by Administrative Agent or Lenders of any Right under this Guaranty or otherwise does not preclude the concurrent or subsequent exercise of any other Right. 5. PAYMENT UPON DEMAND. If a Default exists, Guarantor shall, on demand and without further notice of dishonor and without any notice having been given to Guarantor previous to that demand of either the acceptance by Administrative Agent or Lenders of this Guaranty or the creation or incurrence of any Guaranteed Debt, pay the amount of the Guaranteed Debt then due and payable to Administrative Agent and Lenders; provided that, if a Default exists and Administrative Agent or Lenders can not, for any reason, accelerate the Obligation, then the Guaranteed Debt shall be, as among Guarantor, Administrative Agent, and Lenders, a fully matured, due, and payable obligation of Guarantor to Administrative Agent and Lenders. It is not necessary for Administrative Agent or Lenders, in order to enforce that payment by Guarantor, first or contemporaneously to institute suit or exhaust remedies against Borrower or others liable on any Guaranteed Debt. 6. SUBORDINATION. The Subordinated Debt is expressly subordinated to the full and final payment of the Guaranteed Debt. Guarantor agrees not to accept any payment of any Subordinated Debt from any Loan Party, or any Subsidiary thereof, if a Default exists. If Guarantor receives any payment of any Subordinated Debt in violation of the foregoing, Guarantor shall hold that payment in trust for Administrative Agent and Lenders and promptly turn it over to Administrative Agent, in the form received (with any necessary endorsements), to be applied to the Guaranteed Debt. 7. SUBROGATION AND CONTRIBUTION. Until payment in full of the Guaranteed Debt, and the termination of the Obligation of Lenders to extend credit under the Loan Documents, (a) Guarantor may not assert, enforce, or otherwise exercise any Right of subrogation to any of the Rights or Liens of Administrative Agent or Lenders or any other beneficiary against Borrower or any other obligor on the Guaranteed Debt or other security or any Right of recourse, reimbursement, subrogation, contribution, indemnification, or similar Right against Borrower or any other obligor on any Guaranteed Debt or any guarantor of it, (b) Guarantor defers all of the foregoing Rights (whether they arise in equity, under contract, by statute, under common law, or otherwise), and (c) Guarantor defers the benefit of, and subordinates any Right to participate in, any security given to Administrative Agent or Lenders or any other beneficiary to secure payment of any Guaranteed Debt. 8. NO RELEASE. Guarantor's obligations under this Guaranty may not be released, diminished, or affected by the occurrence of any one or more of the following events: (a) any taking or accepting of any security or assurance for any Guaranteed Debt; (b) any release, surrender, exchange, subordination, impairment, or loss of any collateral securing any Guaranteed Debt; (c) any full or partial release of the liability of any other obligor on the Obligation, except for any final release resulting from payment in full of such Obligation; (d) the modification of, or waiver of compliance with, any terms of any other Loan Document; (e) the insolvency, bankruptcy, or lack of corporate or partnership power of any other obligor at any time liable for any Guaranteed Debt, whether now existing or occurring in the future; (f) any renewal, extension, or rearrangement of any Guaranteed Debt or any adjustment, indulgence, forbearance, or compromise that may be granted or given by Administrative Agent or any Lender to any other obligor on the Obligation; (g) any neglect, delay, omission, failure, or refusal of Administrative Agent or any Lender to take or prosecute any action in connection with the Guaranteed Debt or to foreclose, take, or prosecute any action in connection with any Loan Document; (h) any failure of Administrative Agent or any Lender to notify Guarantor of any renewal, extension, or assignment of any Guaranteed Debt, or the release of any security or of any other action taken or refrained from being taken by Administrative Agent or any Lender against Borrower or any new agreement between Administrative Agent, any Lender, and Borrower; it being understood that neither Administrative Agent nor any Lender is required to give Guarantor any notice of any kind under any circumstances whatsoever with respect to or in connection with any Guaranteed Debt, other than any notice required to be given to Guarantor by Law or elsewhere in this Guaranty; (i) the unenforceability of any Guaranteed Debt against any other obligor or any security securing same because it exceeds the amount permitted by Law, the act of creating it is ultra vires, the officers creating it exceeded their authority or violated their fiduciary duties in connection with it, or otherwise; or (j) any payment of the Obligation to Administrative Agent or any Lender is held to constitute a preference under any Debtor Relief Law or for any other reason Administrative Agent or any Lender is required to refund that payment or make payment to someone else (and in each such instance this Guaranty will be reinstated in an amount equal to that payment). 9. WAIVERS. By execution hereof, Guarantor acknowledges and agrees to the waivers set forth in SECTION 11.2 of the Credit Agreement. To the maximum extent lawful, Guarantor waives all Rights by which it might be entitled to require suit on an accrued right of action in respect of any Guaranteed Debt or require suit against Borrower or others, whether arising under Section 34.02 of the Texas Business and Commerce Code, as amended (regarding its Right to require Administrative Agent or Lenders to sue Borrower on accrued right of action following its written notice to Administrative Agent or Lenders), Section 17.001 of the Texas Civil Practice and Remedies Code, as amended (allowing suit against it without suit against Borrower, but precluding entry of judgment against it before entry of judgment against Borrower), Rule 31 of the Texas Rules of Civil Procedure, as amended (requiring Administrative Agent or Lenders to join Borrower in any suit against it unless judgment has been previously entered against Borrower), or otherwise. 10. LOAN DOCUMENTS. By execution hereof, Guarantor covenants and agrees that all representations, warranties, terms, covenants, and conditions set forth in the Credit Agreement which state that they apply to Guarantor are applicable to Guarantor and shall be imposed upon Guarantor, and Guarantor reaffirms that each such representation and warranty is true and correct and covenants and agrees to promptly and properly perform, observe, and comply with each such term, covenant, or condition. Guarantor acknowledges and agrees that this Guaranty is subject to the offset provisions of SECTION 3.14 of the Credit Agreement in favor of Administrative Agent and Lenders. In the event the Credit Agreement or any other Loan Document shall cease to remain in effect for any reason whatsoever during any period when any part of the Guaranteed Debt remains unpaid, the terms, covenants, and agreements of the Credit Agreement or such other Loan Document incorporated herein by reference shall nevertheless continue in full force and effect as obligations of Guarantor under this Guaranty. 11. RELIANCE AND DUTY TO REMAIN INFORMED. Guarantor confirms that it has executed and delivered this Guaranty after reviewing the terms and conditions of the Loan Documents and such other information as it has deemed appropriate in order to make its own credit analysis and decision to execute and deliver this Guaranty. Guarantor confirms that it has made its own independent investigation with respect to Borrower's creditworthiness and is not executing and delivering this Guaranty in reliance on any representation or warranty by Administrative Agent or any Lender as to that creditworthiness. Guarantor expressly assumes all responsibilities to remain informed of the financial condition of Borrower and any circumstances affecting Borrower's ability to perform under the Loan Documents to which it is a party. 12. NO REDUCTION. The Guaranteed Debt may not be reduced, discharged, or released because or by reason of any existing or future offset, claim, or defense (except for the defense of complete and final payment of the Guaranteed Debt) of Borrower or any other obligor against Administrative Agent or any Lender or against payment of the Guaranteed Debt, whether that offset, claim, or defense arises in connection with the Guaranteed Debt or otherwise. Those claims and defenses include, without limitation, failure of consideration, breach of warranty, fraud, bankruptcy, incapacity/infancy, statute of limitations, lender liability, accord and satisfaction, usury, forged signatures, mistake, impossibility, frustration of purpose, and unconscionability. 13. INSOLVENCY OF GUARANTOR. Should Guarantor become insolvent, or fail to pay Guarantor's debts generally as they become due, or voluntarily seek, consent to, or acquiesce in, the benefit or benefits of any Debtor Relief Law (other than as a creditor or claimant), or become a party to (or be made the subject of) any proceeding provided for by any Debtor Relief Law (other than as a creditor or claimant) that could suspend or otherwise adversely affect the Rights of Administrative Agent or any Lender granted hereunder, then, in any such event, the Guaranteed Debt shall be, as among Guarantor, Administrative Agent and Lenders, a fully matured, due, and payable obligation of Guarantor to Administrative Agent and Lenders (without regard to whether Borrower is then in default under the Loan Documents or whether the Obligation, or any part thereof, is then due and owing by Borrower to any Lender), payable in full by Guarantor to Lenders upon demand, and the amount thereof so payable shall be the estimated amount owing in respect of the contingent claim created hereunder. 14. LOAN DOCUMENT. This Guaranty is a Loan Document and is subject to the applicable provisions of SECTIONS 1 and 14 of the Credit Agreement, including, without limitation, the provisions relating to GOVERNING LAW, JURISDICTION, VENUE AND SERVICE OF PROCESS, all of which are incorporated into this Guaranty by reference the same as if set forth in this Guaranty verbatim. 15. NOTICES. For purposes of SECTION 14.3 of the Credit Agreement, Guarantor's address and telecopy number are as set forth next to Guarantor's signature on the signature page hereof. 16. AMENDMENTS, ETC. No amendment, waiver, or discharge to or under this Guaranty is valid unless it is in writing and is signed by the party against whom it is sought to be enforced and is otherwise in conformity with the requirements of SECTION 14.11 of the Credit Agreement. 17. ADMINISTRATIVE AGENT AND LENDERS. Administrative Agent is Administrative Agent for each Lender under the Credit Agreement. All Rights granted to Administrative Agent under or in connection with this Guaranty are for each Lender's ratable benefit. Administrative Agent may, without the joinder of any Lender, exercise any Rights in Administrative Agent's or Lenders' favor under or in connection with this Guaranty. Administrative Agent's and each Lender's Rights and obligations vis-a-vis each other may be subject to one or more separate agreements between those parties. However, Guarantor is not required to inquire about any such agreement or is subject to any terms of it unless Guarantor specifically joins such agreement. Therefore, neither Guarantor nor its successors or assigns is entitled to any benefits or provisions of any such separate agreement or is entitled to rely upon or raise as a defense any party's failure or refusal to comply with the provisions of such agreement. 18. PARTIES. This Guaranty benefits Administrative Agent, Lenders, and their respective successors and assigns and binds Guarantor and its successors and assigns. Upon appointment of any successor Administrative Agent under the Credit Agreement, all of the Rights of Administrative Agent under this Guaranty automatically vest in that new Administrative Agent as successor Administrative Agent on behalf of Lenders without any further act, deed, conveyance, or other formality other than that appointment. The Rights of Administrative Agent and Lenders under this Guaranty may be transferred with any assignment of the Guaranteed Debt. The Credit Agreement contains provisions governing assignments of the Guaranteed Debt and of Rights and obligations under this Guaranty. 19. NO GENERAL PARTNERS' LIABILITY. By their acceptance of this Guaranty, the Administrative Agent and the Lenders agree for themselves and their respective successors and assigns, including any subsequent holder of any Note, that any claim against Guarantor which may arise under this Guaranty shall be made only against and shall be limited to the assets of Guarantor, and that no judgment, order or execution entered in any suit, action or proceeding, whether legal or equitable, on this Guaranty shall be obtained or enforced against any general partner of Guarantor (individually, a "GENERAL PARTNER", and collectively, "GENERAL PARTNERS") or its or their assets for the purpose of obtaining satisfaction and payment of this Guaranty, the Guaranteed Debt or any claims arising hereunder, any right to proceed against the General Partners individually or their respective assets being hereby expressly waived, renounced and remitted by the Lenders for themselves and their respective successor and assigns. Nothing in this SECTION 19, however, shall be construed so as to prevent the Administrative Agent, any Lender or any other holder of any Note from commencing any action, suit or proceeding with respect to or causing legal papers to be served upon any General Partner for the purpose of obtaining jurisdiction over Guarantor. REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURE PAGE TO FOLLOW. EXECUTED as of the date first stated in this Guaranty. Address: NORTHERN BORDER INTERMEDIATE LIMITED PARTNERSHIP Northern Border Intermediate Partnership 1400 Smith Street GUARANTOR: Houston, TX 77002 Attn: Angus Hardie Davis NBP Services Corporation By: Telephone: 713/853-6941 ------------------------------ Facsimile: 713/646-4970 Name: ----------------------- with a copy to: Title: ----------------------- Mr. Jerry L. Peters Chief Financial and Accounting Officer Northern Border Partners, L.P. 1111 South 103rd Street Omaha, NE 68124-1000 Telephone: 402/398-7722 Telecopy: 402/398-7803 and with a copy to: Ms. Janet Place Vice President, Legal Northern Plains Natural Gas Company 1111 South 103rd Street Omaha, NE 68124-1000 Telephone: 402/398-7886 Facsimile: 402/398-7780 GUARANTY SIGNATURE PAGE EXHIBIT D FORM OF COMPLIANCE CERTIFICATE (Northern Border Partners, L.P.) FOR ENDED , --------------- ------------------------ ---- DATE: , ---------------------------- ---- ADMINISTRATIVE AGENT: Bank of America, N.A. BORROWER: NORTHERN BORDER PARTNERS, L.P. This certificate is delivered under the 364-Day Credit Agreement, dated as of June 28, 2000 (as amended, modified, supplemented, or restated from time to time, the "CREDIT AGREEMENT"), among Borrower, Administrative Agent, and Lenders party thereto. Capitalized terms used herein and not otherwise defined herein shall have the meaning given to such terms in the Credit Agreement. I certify to Lenders that: (a) I am a Responsible Officer in the position(s) set forth under my signature below; (b) the Financial Statements of the Loan Parties, and their respective Subsidiaries, as applicable (the "REPORTING ENTITIES"), attached to this certificate were prepared in accordance with GAAP, and present fairly in all material respects the consolidated financial condition and results of operations of the Reporting Entities as of, and for the (three, six, or nine months, or fiscal year) ended on, _______________, _______ (the "SUBJECT PERIOD") (subject only to normal year-end audit adjustments); (c) a review of the activities of the Reporting Entities during the Subject Period has been made under my supervision with a view to determining whether, during the Subject Period, the Loan Parties have fulfilled their respective obligations under the Loan Documents, and during the Subject Period, (i) the Loan Parties have observed or performed all of the covenants and conditions of the Loan Documents (except for the deviations, if any, set forth on ANNEX A to this certificate) in all material respects, (ii) no Default (nor any Potential Default) has occurred and is continuing (except the Defaults or Potential Defaults, if any, described on ANNEX A to this Certificate) and (iii) the representation and warranties of Borrower contained in SECTION 8 of the Agreement are true and correct in all material respects as though made on and as of the date hereof (except such representations and warranties which expressly refer to an earlier date, which are true and correct in all material respects as of such earlier date); and (d) the status of compliance by the Loan Parties with SECTION 10.12 of the Credit Agreement at the end of the Subject Period is as set forth on ANNEX B to this certificate. By: ------------------------------ Name: ----------------------- Title: ----------------------- ANNEX A TO COMPLIANCE CERTIFICATE DEVIATIONS FROM LOAN DOCUMENTS/ DEFAULTS OR POTENTIAL DEFAULTS (If none, so state.) ANNEX B TO COMPLIANCE CERTIFICATE Status of Compliance with SECTION 10.12 of the Credit Agreement SECTION 10.12 - CAPITALIZATION RATIO a. Funded Debt $ ------- b. Capitalization (Funded Debt plus partners' capital) $ ------- c. Capitalization Ratio (the ratio of Line a to Line b) % ------- d. Maximum Ratio 35% EXHIBIT E FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT Reference is made to the 364-Day Credit Agreement dated as of June 28, 2000 (as amended, modified, supplemented, or restated to the Effective Date, the "CREDIT AGREEMENT") among Northern Border Partners, L.P., a Delaware limited partnership ("BORROWER"), Bank of America, N.A., as Administrative Agent for Lenders ("ADMINISTRATIVE AGENT"), and Lenders party thereto. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. "ASSIGNOR" and "ASSIGNEE" referred to on SCHEDULE 1 agree as follows: 1. Assignor hereby sells and assigns to Assignee, without recourse and without representation or warranty except as expressly set forth herein, and Assignee hereby purchases and assumes from Assignor, an interest in and to Assignor's Rights and obligations under the Credit Agreement and the related Loan Documents as of the Effective Date equal to the percentage interest specified on SCHEDULE 1 of all outstanding Rights and obligations with respect to the Facilities under the Credit Agreement as set forth on SCHEDULE 1 (the "ASSIGNED FACILITY"). After giving effect to such sale and assignment, Assignor's and Assignee's Committed Sum under the Facility under the Credit Agreement will be as set forth on SCHEDULE 1. 2. Assignor (a) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (b) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties, or representations made in or in connection with the Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency, or value of the Loan Documents or any other instrument or document furnished pursuant thereto; (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any party to any Loan Document or the performance or observance by any such party of any of its obligations under the Loan Documents or any other instrument or document furnished pursuant thereto; and (d) attaches the Notes held by Assignor (to the extent any of the Principal Debt being assigned and owed to Assignor is evidenced by Notes) and requests that Administrative Agent exchange such Notes for new Notes if so requested by either Assignor or Assignee. Any such new Notes shall be prepared in accordance with the provisions of SECTION 3.1(b) of the Credit Agreement and will reflect the respective Committed Sums or Principal Debt of Assignee and Assignor after giving effect to this Assignment and Acceptance Agreement. 3. Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance Agreement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the Current Financials and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance Agreement; (c) agrees that it will, independently and without reliance upon Administrative Agent, Assignor, or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (d) confirms that it is an Eligible Assignee; (e) appoints and authorizes Administrative Agent to take such action as Administrative Agent on its behalf and to exercise such powers and discretion under the Credit Agreement as are delegated to Administrative Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; (f) agrees that it will perform in accordance with their terms all of the obligations that by the terms of the Credit Agreement are required to be performed by it as a Lender; and (g) attaches any U.S. Internal Revenue Service or other forms required under SECTION 4.6(d) of the Credit Agreement. 4. Following the execution of this Assignment and Acceptance Agreement by Assignor, Assignee, and Borrower (to the extent required hereunder), it will be delivered to Administrative Agent for acceptance and recording by Administrative Agent pursuant to the Credit Agreement. The effective date for this Assignment and Acceptance Agreement shall be the date described on SCHEDULE 1 (the "EFFECTIVE DATE"), which shall not, unless otherwise agreed to by Administrative Agent, be earlier than five Business Days from the date of such acceptance and recording by Administrative Agent. 5. Upon such acceptance and recording by Administrative Agent, as of the Effective Date, (a) Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance Agreement, have the Rights and obligations of a Lender thereunder, and (b) Assignor shall, to the extent provided in this Assignment and Acceptance Agreement, relinquish its Rights and be released from its obligations under the Agreement. 6. Upon such acceptance and recording by Administrative Agent, from and after the Effective Date, Administrative Agent shall make all payments under the Credit Agreement, the Notes (to the extent any of the Principal Debt owed to Assignee is evidenced by Notes), and loan accounts in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest, and commitment fees and other fees with respect thereto) to Assignee. Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement and the other Loan Documents for periods prior to the Effective Date directly between themselves. 7. Unless Assignee is a Lender or an Affiliate of a Lender or unless a Default or Potential Default then exists, this Assignment and Acceptance Agreement is conditioned upon the consent of Borrower and Administrative Agent pursuant to the definition of "Eligible Assignee" in the Credit Agreement. The execution and delivery of this Assignment and Acceptance Agreement by Borrower and Administrative Agent is evidence of this consent. 8. As contemplated by SECTION 14.13(b)(iv) of the Credit Agreement, Assignor or Assignee (as determined between Assignor and Assignee) agrees to pay to Administrative Agent for its account on the Effective Date in federal funds a processing fee of $3,500. 9. THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. 10. This Assignment and Acceptance Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of SCHEDULE 1 to this Assignment and Acceptance Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance Agreement. IN WITNESS WHEREOF, Assignor and Assignee have caused SCHEDULE 1 to this Assignment and Acceptance Agreement to be executed by their officers thereunto duly authorized as of the date specified thereon. SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE AGREEMENT
COMMITTED SUM OR ASSIGNED FACILITY PRINCIPAL DEBT ASSIGNED COMMITMENT PERCENTAGE ----------------- ----------------------- --------------------- (AS APPLICABLE) (I.E. THE PROPORTION THAT ASSIGNEE'S COMMITTED SUM FOR THE ASSIGNED FACILITY BEARS TO THE AGGREGATE COMMITTED SUM OF ALL LENDERS AFTER GIVING EFFECT TO THE ASSIGNMENT) (SET FORTH TO AT LEAST 8 DECIMAL POINTS) REVOLVER FACILITY
EFFECTIVE DATE OF ASSIGNMENT: * , -------------- --- ------ [NAME OF ASSIGNOR], as Assignor By: ------------------------------------------ Name: ------------------------------ Title: ------------------------------ Date: --------------------------------------- Address for Notice: -------------------------- --------------------------------------------- Attn: ---------------------------------------- Telephone: ---------------------------------- Telecopier: ---------------------------------- [NAME OF ASSIGNEE], as Assignee By: ------------------------------------------ Name: ------------------------------ Title: ------------------------------ Date: --------------------------------------- Address for Notice: -------------------------- --------------------------------------------- Attn: ---------------------------------------- Telephone: ---------------------------------- Telecopier: ---------------------------------- * This date should be no earlier than five Business Days after the delivery of this Assignment and Acceptance Agreement to Administrative Agent. If SECTION 14.13(b) and the definition of "Eligible Assignee" of the Credit Agreement so require, Borrower and Administrative Agent consent to this Assignment and Acceptance Agreement. NORTHERN BORDER PARTNERS, L.P. By: ----------------------------------- Name: ----------------------------- Title: ----------------------------- Date: ----------------------------------- BANK OF AMERICA, N.A., as Administrative Agent By: ----------------------------------- Name: ----------------------------- Title: ----------------------------- Date: , -------------------- -------------- ASSIGNMENT AND ACCEPTANCE AGREEMENT SIGNATURE PAGE EXHIBIT F-1 FORM OF LEGAL OPINION OF VINSON & ELKINS L.L.P. June ___, 2000 To each of the Lenders party to the Credit Agreement referred to below and Bank of America, N.A., as Administrative Agent Re: Northern Border Partners, L.P. Ladies and Gentlemen: This opinion is furnished to you pursuant to Section 7.1 of the 364-Day Credit Agreement dated as of June 28, 2000 (the "CREDIT AGREEMENT") among Northern Border Partners, L.P., a Delaware limited partnership, as Borrower (the "BORROWER"), the Lenders (defined therein), and Bank of America, N.A., as Administrative Agent (in such capacity, the "ADMINISTRATIVE AGENT"). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned such terms in the Credit Agreement. In our examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies, and the authenticity of the originals of such copies. As to any facts material to this opinion, we have relied upon representations and warranties of the Borrower and the Intermediate Partnership contained in the Credit Agreement and the Guaranty. We have also relied on the matters contained in the opinions rendered by counsels to the Borrower and Intermediate Partnership and the General Partners. In rendering the opinions set forth herein, we have examined and relied on originals or copies, certified or otherwise identified to our satisfaction of the following ("LOAN DOCUMENTS"): (a) the Credit Agreement; (b) the Notes; and (c) the Guaranty executed by the Intermediate Partnership. 1. Based upon the foregoing and subject to the limitations, qualifications and exceptions set forth herein, we are of the opinion that the Credit Agreement and each of the Notes constitute valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms, and that the Guaranty constitutes valid and binding obligations of the Intermediate Partnership enforceable against the Intermediate Partnership in accordance with its terms. 2. We are of the opinion that neither the Borrower nor the Intermediate Partnership is an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended. 3. The execution and delivery of the Loan Documents by the Borrower and the Intermediate Partnership, and the performance of their respective obligations thereunder will not violate any Texas law. 4. No action by or in respect of, or filing with, any Governmental Authority under any Texas Law is required in connection with the execution and delivery of the Loan Documents by the Borrower and/or The Intermediate Partnership. The opinion in paragraph 1 above is subject to the following qualifications and comments: (i) The enforceability of the Loan Documents may be subject to bankruptcy, insolvency, reorganization, fraudulent transfer or moratorium or similar laws affecting creditors' rights generally and general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). (ii) We express no opinion as to (A) provisions releasing, exculpating or exempting a party from, or requiring indemnification of a party for, liability for its own action or inaction, to the extent the same are inconsistent with public policy; (B) any provision of the Loan Documents to the extent it authorizes or permits any Person to set-off or apply any deposit, property or indebtedness owing to such party to or for the account of the Borrower or any Subsidiary of the Borrower; (C) provisions purporting to waive rights to notices, objections, demands, legal defenses, statutes of limitations, rights to trial by jury, or other benefits or rights that cannot be waived under applicable law; (D) the effect of the law of any jurisdiction (other than the State of Texas) wherein any Lender may be located which limits rates of interest which may be charged or collected by such Lender or imposes any tax on such Lender; (E) provisions granting to the Administrative Agent powers of attorney or authority to execute documents or to act by power of attorney on behalf of another party to the extent the Administrative Agent could not, under applicable law, take actions in its own name that it purports to take as attorney-in-fact for the grantor of such power of attorney; (F) provisions purporting to establish evidentiary standards for suits or proceedings to enforce the Loan Documents; and (G) provisions that decisions by a party are conclusive. In addition, we wish to highlight that provisions of the Loan Documents which permits either the Administrative Agent or the Lender to take action or to make determinations, or to benefit from indemnities and similar undertakings of the Borrower or the Intermediate Partnership, may be subject to a requirement that such action be taken or such determinations be made, and that any action or inaction by the Administrative Agent or a Lender which may give rise to a request for payment under such an undertaking be taken or made, on a reasonable basis and in good faith. (iii) We express no opinion as to the laws of any jurisdiction other than the laws of the State of Texas and the United States of America. In addition, we have not been called upon to, and accordingly do not, express any opinion as to the various state and federal laws regulating banks or the conduct of their business that may relate to the Loan Documents or the transactions contemplated thereby. This opinion is being furnished only to the addressees named above, and is solely for the benefit of such addressees and is not to be used, circulated, quoted, relied upon or otherwise referred to for any purpose without our prior written consent; provided, however, that any Person that becomes a Lender or successor Agent pursuant to the terms of the Credit Agreement may rely on this opinion as if it were addressed to such Person and delivered on the date hereof. Very truly yours, VINSON & ELKINS L.L.P. EXHIBIT F-2 FORM OF OPINION OF GENERAL COUNSEL TO NORTHERN PLAINS NATURAL GAS COMPANY June ____, 2000 To each of the Lenders party to the Credit Agreement referred to below, and Bank of America, N.A., as Administrative Agent Re: Northern Border Partners, L.P. Gentlemen: This opinion is furnished to you pursuant to Section 7.1 of the Credit Agreement dated as of June 28, 2000 (the "CREDIT AGREEMENT") among Northern Border Partners L.P., a Delaware limited partnership, as Borrower (the "BORROWER"), the Lenders (defined therein), and Bank of America, N.A., as Administrative Agent (in such capacity, the "ADMINISTRATIVE AGENT"). Terms defined in the Credit Agreement not otherwise defined herein are used herein as therein defined. I am Vice President and General Counsel of Northern Plains Natural Gas Company, a general partner of the Borrower ("GENERAL PARTNER"), and in such capacity am familiar with the negotiation, preparation, execution and delivery of the Credit Agreement. In that connection, I have examined the Credit Agreement, the Guaranty and the documents furnished pursuant to SECTION 7 of the Credit Agreement. I have also examined the originals, or copies certified to my satisfaction, of such other partnership records of the Borrower and the Intermediate Partnership, certificates of public officials and of authorized representatives of the Borrower and the Intermediate Partnership, and such other agreements, instruments and documents, as I have deemed necessary as a basis for the opinions hereinafter expressed. As to questions of fact material to such opinions, I have relied upon certificates of authorized representatives of the Borrower and the Intermediate Partnership or of public officials. In rendering my opinions, I have assumed the due execution and delivery, pursuant to the due authorization, of the Loan Documents by each party thereto other than the Borrower and the Intermediate Partnership, and that the Loan Documents constitute valid and binding agreements of such other parties. Based upon the foregoing and upon such investigation as I have deemed necessary, I am of the opinion that: 1. Each of the Borrower and the Intermediate Partnership is a limited partnership duly existing under the Delaware Revised Uniform Limited Partnership Act ("DELAWARE ACT"). Each of the Partnership Agreement and the Intermediate Partnership Agreement is in full force and effect and each of the Borrower and the Intermediate Partnership has full power and authority under its respective partnership agreement and the Delaware Act to own its property and to conduct the business in which it is currently engaged and execute and deliver, and to perform its obligations, if any, under each of the Loan Documents to which it is a party. Each of the Borrower and the Intermediate Partnership is duly authorized to do business wherever the nature of its properties or its activities requires such authorization except where failure to have such authorization would not be or result in a Material Adverse Event. 2. The General Partner is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. The General Partner is duly authorized to do business wherever the nature of its properties or its activities requires such authorization except where failure to have such authorization would not be or result in a Material Adverse Event. The General Partner has full power and authority to own its property and to conduct the business in which it is currently engaged. 3. The Credit Agreement and the Notes have been duly executed and delivered by the Borrower. The Guaranty has been duly executed and delivered by the Intermediate Partnership. 4. The execution, delivery and performance by each of the Borrower and the Intermediate Partnership of each of the Loan Documents to which it is a party are within its partnership powers, have been duly authorized by all necessary partnership action and do not and will not: (i) result in a breach of or constitute a default under any of the following: (A) its respective Partnership agreement or any agreement known to me of the Borrower and the Intermediate Partnership or among the General Partners which governs the management or operations of the Borrower and the Intermediate Partnership, (B) any indenture or loan or credit agreement known to me to which the Borrower or the Intermediate Partnership is a party or by which it or any of its property or assets is bound, or (C) any other agreement, lease or instrument known to me to which the Borrower or the Intermediate Partnership is a party or by which it or any of its property or assets is bound and which is material to the Borrower or the Intermediate Partnership, or (ii) violate any provision of any law, rule or regulation, or, to the best of my knowledge, any order, writ judgment, injunction, decree, determination or award binding on the Borrower or the Intermediate Partnership or any of its property or assets, or (iii) result in or require, under any document referred to above in clause (i), the creation or imposition of any Lien upon or with respect to any of the properties or assets now owned or hereafter acquired by the Borrower or the Intermediate Partnership. 5. Each of the Borrower and the Intermediate Partnership has obtained all material government approvals which are required for its due execution, delivery and performance of the Loan Documents to which it is a party. 6. There is no pending or, to my knowledge, threatened action or proceeding to which the Borrower, the Intermediate Partnership or the General Partner is or would become a party before any court, governmental agency or arbitrator which could reasonably be expected to be or result in any Material Adverse Event. 7. None of the Borrower, the Intermediate Partnership or the General Partner are subject to, or they are exempt from, regulation as a "holding company" or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended ("PUHCA"). 8. If all material facts and issues of law were presented and properly argued, a court applying the laws of the State of Nebraska would decide, as a matter of conflicts of laws, to give effect to the governing law provision contained in Section 13.7 of the Credit Agreement and Section 14 of the Guaranty. Very truly yours, ----------------------------------- Janet K. Place Vice President & General Counsel NORTHERN PLAINS NATURAL GAS COMPANY, A General Partner EXHIBIT F-3 FORM OF OPINION OF COUNSEL TO PAN BORDER June ____, 2000 To each of the Lenders party to the Credit Agreement referred to below, and Bank of America, N.A., as Administrative Agent, Re: Northern Border Partners, L.P. Gentlemen: This opinion is furnished to you pursuant to Section 7.1 of the 364-Day Credit Agreement dated as of June 28, 2000 (the "CREDIT AGREEMENT") among Northern Border Partners, L.P., a Delaware limited partnership, as Borrower (the "BORROWER"), the Lenders (defined therein), and Bank of America, N.A., as Administrative Agent (in such capacity, the "ADMINISTRATIVE AGENT"). Terms defined in the Credit Agreement not otherwise defined herein are used herein as therein defined. I am Vice President and General Counsel of Pan Border Gas Company, a general partner of the Borrower ("GENERAL PARTNER"), and in such capacity am familiar with the negotiation, preparation, execution and delivery of the Credit Agreement. In that connection, I have examined the Credit Agreement. I have also examined the originals, or copies certified to my satisfaction, of such other corporate records of the General Partner, certificates of public officials and of authorized representatives of the General Partner, and such other agreements, instruments and documents, as I have deemed necessary as a basis for the opinions hereinafter expressed. As to questions of fact material to such opinions, I have relied upon certificates of authorized representatives of the General Partner or of public officials. In rendering my opinions, I have assumed the due execution and delivery, pursuant to the due authorization, of the Credit Agreement by each party thereto other than the General Partner, and that the Credit Agreement constitutes a valid and binding agreement of such other parties. Based upon the foregoing and upon such investigation as I have deemed necessary, I am of the opinion that: 1. The General Partner is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, and has full power and authority under its certificate of incorporation and By-laws to own its property and to conduct the business in which it is currently engaged. The General Partner is duly authorized to do business wherever the nature of its properties or its activities requires such authorization except where failure to have such authorization would not have be or result in a Material Adverse Event. 2. There is no pending or, to my knowledge, threatened action or proceeding to which the General Partner is or would become a party before any court, governmental agency or arbitrator which could reasonably be expected to be or result in a Material Adverse Event. 3. The General Partner is not subject to, or is exempt from, regulation as a "holding company" or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, as amended. Very truly yours, ----------------------------------- Janet K. Place Vice President and General Counsel Pan Border Gas Company EXHIBIT F-4 FORM OF OPINION OF COUNSEL TO NORTHWEST BORDER June ____, 2000 To each of the Lenders party to the Credit Agreement referred to below, and Bank of America, N.A., as Administrative Agent. Re: Northern Border Partners, L.P. Gentlemen: I am General Counsel of The Williams Companies, Inc. ("TWC") the ultimate parent corporation of Northwestern Border Pipeline Company, a Delaware corporation, (the "General Partner") and have acted as counsel to the General Partner in connection with the Credit Agreement dated as of June 28, 2000 (the "Credit Agreement") among Northern Border Partners, L.P., a Delaware limited partnership, as Borrower (the "Borrower"), the Lenders (defined therein) and Bank of America, N.A., as Administrative Agent (in such capacity, the "Administrative Agent"). This opinion is furnished to you pursuant to Section 7.1 of the Credit Agreement. Terms defined in the Credit Agreement not otherwise defined herein are used herein as therein defined. In connection with the opinions expressed herein, I, or other attorneys reporting to me, have examined and relied upon copies of the following documents: (a) the Credit Agreement and all exhibits and attachments thereto; (b) TWC Secretary's Certificate attached hereto; (c) Certificate of Incorporation and By Laws of the General Partner. Those documents identified in items (a) through (c) above are collectively referred to herein as the "Transaction Documents." In connection with this opinion, I or other attorneys working under my supervision have (i) investigated such questions of law, (ii) examined such corporate documents and records of the General Partner and certificates of public officials, and (iii) received such information from officers and representatives of the General Partner and made such investigations as I or other attorneys under my supervision have deemed necessary or appropriate for the purposes of this opinion. I have not, nor have other attorneys under my supervision, conducted independent investigations or inquiries to determine the existence of matters, actions, proceedings, items, documents, facts, judgments, decrees, franchises, certificates, permits, or the like and have made no independent search of the records of any court, arbitrator, or Governmental Authority affecting any Person, and no inference as to my knowledge thereof shall be drawn from the fact of my representation of any party or otherwise. This opinion is governed by, and shall be interpreted in accordance with, the Legal Opinion Accord (the "Accord") of the American Bar Association Section of Business Law (1991). As a consequence, this opinion letter is subject to a number of qualifications, exceptions, definitions, limitations on coverage, and other limitations, in addition to those set forth herein, all as more particularly described in such Accord, and should be read in connection therewith. Based upon and subject to the foregoing and the other qualifications, limitations, and assumptions set forth below and upon such other matters as I have deemed appropriate, I am of the opinion that: 1. The General Partner is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, and has full power and authority under its certificate of incorporation and By-laws to own its property and to conduct the business in which it is currently engaged. 2. The General Partner is duly authorized to do business wherever the nature of its properties or its activities requires such authorization and where failure to have such authorization would result in a Material Adverse Event. 3. There is no pending or, to my knowledge, threatened action or proceeding to which the General Partner is or would become a party before any court, governmental agency or arbitrator which could reasonably be expected to be or result in a Material Adverse Event. 4. The General Partner is not subject to regulation as a "holding company" or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. The opinions expressed in this letter are subject to the following additional qualifications and limitations: A. My opinions in paragraphs 1 and 2 with respect to incorporation, good standing, and qualification of the General Partner is based solely on the Certificate of the TWC Secretary attesting to the existence, good standing and qualification of the General Partner. B. Qualification of any statement or opinion herein by the use of the words "to my knowledge" means that during the course of representation in connection with the transactions contemplated by the Transaction Documents, no information has come to the attention of me or other attorneys working under my supervision that would give me or such attorneys current actual knowledge of the existence of facts or matters so qualified. Neither I, nor other attorneys working under my supervision, have undertaken any investigation to determine the existence of facts, and no inference as to our knowledge thereof shall be drawn from the fact of the representation by me or attorneys reporting to me of any party or otherwise. I am qualified to practice law in the States of New York and Oklahoma and do not hold myself out as an expert on, or express any opinion herein concerning, the laws of any jurisdiction other than the Delaware Revised Uniform Limited Partnership Act and applicable federal law of the Unites States of America as in effect on the date hereof. This opinion letter is limited to the matters expressly set forth herein, and no opinions are intended to be implied or may be inferred beyond those expressly stated herein. These opinions are rendered as of the date hereof and are based on the facts and circumstances related to the substance of the opinions expressed herein as they exist on the date hereof, and I disclaim any undertaking to advise you of any subsequent events or circumstances that would affect the opinions herein. This opinion letter is solely for the use and benefit of Lenders and Administrative Agent in consummating the transaction contemplated by the Transaction Documents, and may not be used or relied upon by, quoted, transmitted to, or filed with any other Person or for any other purpose whatsoever without in each instance my prior written consent. Very truly yours, William G. von Glahn EX-10 5 0005.txt MATERIAL CONTRACTS EXHIBIT 10.____ HAYNES AND BOONE, LLP 6/26/00 REVOLVING CREDIT AGREEMENT among NORTHERN BORDER PARTNERS, L.P., Borrower BANK OF AMERICA, N.A., Administrative Agent SUNTRUST BANK, Syndication Agent and BANK ONE, NA Documentation Agent, and THE LENDERS NAMED HEREIN, Lenders $75,000,000 DATED AS OF JUNE 28, 2000 BANC OF AMERICA SECURITIES LLC, Lead Arranger and Book Manager NBPLP CREDIT AGREEMENT TABLE OF CONTENTS
Page SECTION 1 DEFINITIONS AND TERMS ........................................................................1 1.1 Definitions ..................................................................................1 1.2 Number and Gender of Words; Other References ................................................12 1.3 Accounting Principles .......................................................................12 SECTION 2 BORROWING PROVISIONS ........................................................................13 2.1 Facility ....................................................................................13 2.2 LC Subfacility ..............................................................................13 2.3 Terminations, Reductions or Increases of Commitments ........................................16 2.4 Increase in Commitments .....................................................................16 2.5 Borrowing Procedure .........................................................................18 2.6 Extension of Maturity Date ..................................................................18 SECTION 3 TERMS OF PAYMENT ............................................................................19 3.1 Loan Accounts, Notes, and Payments ..........................................................19 3.2 Interest and Principal Payments .............................................................20 3.3 Prepayments .................................................................................20 3.4 Interest Options ............................................................................21 3.5 Quotation of Rates ..........................................................................21 3.6 Default Rate ................................................................................21 3.7 Interest Recapture ..........................................................................21 3.8 Interest Calculations .......................................................................21 3.9 Maximum Rate ................................................................................22 3.10 Interest Periods ............................................................................22 3.11 Conversions .................................................................................22 3.12 Order of Application ........................................................................23 3.13 Sharing of Payments, Etc ....................................................................23 3.14 Offset ......................................................................................24 3.15 Booking Borrowings ..........................................................................24 SECTION 4 CHANGE IN CIRCUMSTANCES .....................................................................24 4.1 Increased Cost and Reduced Return ...........................................................24 4.2 Limitation on Types of Loans ................................................................25 4.3 Illegality ..................................................................................25 4.4 Treatment of Affected Loans .................................................................26 4.5 Compensation ................................................................................26 4.6 Taxes .......................................................................................26 SECTION 5 FEES ........................................................................................28 5.1 Treatment of Fees ...........................................................................28 5.2 Fees of Administrative Agent and Arranger ...................................................28 5.3 Commitment Fees .............................................................................28 5.4 LC Fees .....................................................................................28 5.5 Utilization Fee .............................................................................29 SECTION 6 GUARANTY ....................................................................................29 6.1 Guaranty ....................................................................................29 SECTION 7 CONDITIONS PRECEDENT ........................................................................29
(i) NBPLP CREDIT AGREEMENT 7.1 Conditions Precedent to Closing .............................................................29 7.2 Conditions Precedent to Each Borrowing ......................................................29 SECTION 8 REPRESENTATIONS AND WARRANTIES ..............................................................30 8.1 Purpose of Credit Facility ..................................................................30 8.2 Existence, Good Standing, Authority, and Authorizations .....................................30 8.3 Subsidiaries ................................................................................30 8.4 Authorization and No Contravention ..........................................................31 8.5 Binding Effect ..............................................................................31 8.6 Financial Statements ........................................................................31 8.7 Litigation, Claims, Investigations ..........................................................31 8.8 Taxes .......................................................................................31 8.9 Environmental Matters .......................................................................31 8.10 Employee Benefit Plans ......................................................................31 8.11 Properties; Liens ...........................................................................32 8.12 Government Regulations ......................................................................32 8.13 Transactions with Affiliates ................................................................32 8.14 Material Agreements .........................................................................32 8.15 Insurance ...................................................................................32 8.16 Compliance with Laws ........................................................................32 8.17 Regulation U ................................................................................32 8.18 Full Disclosure .............................................................................32 8.19 No Default ..................................................................................33 SECTION 9 AFFIRMATIVE COVENANTS .......................................................................33 9.1 Use of Proceeds .............................................................................33 9.2 Books and Records ...........................................................................33 9.3 Items to be Furnished .......................................................................33 9.4 Inspections .................................................................................34 9.5 Taxes .......................................................................................34 9.6 Payment of Obligations ......................................................................34 9.7 Maintenance of Existence, Assets, and Business ..............................................34 9.8 Compliance with Laws, etc. ..................................................................35 9.9 Insurance ...................................................................................35 9.10 Preservation and Protection of Rights .......................................................35 9.11 Pari Passu Status ...........................................................................35 9.12 Maintenance of Tax Status ...................................................................35 SECTION 10 NEGATIVE COVENANTS ..........................................................................35 10.1 Debt and Guaranties .........................................................................35 10.2 Liens .......................................................................................36 10.3 Transactions with Affiliates ................................................................36 10.4 Assignment ..................................................................................37 10.5 Government Regulations ......................................................................37 10.6 Mergers; Sale of Assets. ....................................................................37 10.7 Loan and Investments ........................................................................37 10.8 Distributions ...............................................................................38 10.9 Limitation on Business Activities ...........................................................38 10.10 Certain Amendments to Cash Distribution Policies and Partnership Agreements .................38 10.11 Restrictive Agreements, etc .................................................................38 10.12 Employee Benefit Plans ......................................................................38 10.13 Capitalization Ratio ........................................................................38
(ii) NBPLP CREDIT AGREEMENT SECTION 11 DEFAULT .....................................................................................38 11.1 Payment of Obligation .......................................................................38 11.2 Covenants ...................................................................................38 11.3 Debtor Relief ...............................................................................39 11.4 Judgments and Attachments ...................................................................39 11.5 Misrepresentation ...........................................................................39 11.6 Change of Control ...........................................................................39 11.7 Default Under Other Debt and Agreements .....................................................39 11.8 Employee Benefit Plans ......................................................................40 11.9 Validity and Enforceability of Loan Documents ...............................................40 11.10 Environmental Liability .....................................................................40 11.11 Dissolution .................................................................................40 SECTION 12 RIGHTS AND REMEDIES .........................................................................40 12.1 Remedies Upon Default .......................................................................40 12.2 Loan Party Waivers ..........................................................................41 12.3 Performance by Administrative Agent .........................................................41 12.4 Delegation of Duties and Rights .............................................................41 12.5 Not in Control ..............................................................................41 12.6 Course of Dealing ...........................................................................41 12.7 Cumulative Rights ...........................................................................42 12.8 Application of Proceeds .....................................................................42 12.9 Certain Proceedings .........................................................................42 12.10 Expenditures by Lenders .....................................................................42 12.11 INDEMNIFICATION .............................................................................42 SECTION 13 AGREEMENT AMONG LENDERS .....................................................................43 13.1 Administrative Agent ........................................................................43 13.2 Expenses ....................................................................................44 13.3 Proportionate Absorption of Losses ..........................................................44 13.4 Delegation of Duties; Reliance ..............................................................45 13.5 Limitation of Liability .....................................................................45 13.6 Default .....................................................................................46 13.7 Limitation of Liability .....................................................................46 13.8 Relationship of Lenders .....................................................................46 13.9 Benefits of Agreement .......................................................................46 13.10 Agents ......................................................................................46 13.11 Obligations Several .........................................................................47 SECTION 14 MISCELLANEOUS ...............................................................................47 14.1 Headings ....................................................................................47 14.2 Nonbusiness Days ............................................................................47 14.3 Communications ..............................................................................47 14.4 Form and Number of Documents ................................................................47 14.5 Exceptions to Covenants .....................................................................47 14.6 Survival ....................................................................................47 14.7 Governing Law ...............................................................................48 14.8 Invalid Provisions ..........................................................................48 14.9 Entirety ....................................................................................48 14.10 Jurisdiction; Venue; Service of Process .....................................................48 14.11 Amendments, Consents, Conflicts, and Waivers ................................................49 14.12 Multiple Counterparts .......................................................................49 14.13 Successors and Assigns; Assignments and Participations ......................................49
(iii) NBPLP CREDIT AGREEMENT 14.14 Confidentiality .............................................................................52 14.15 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances .................52 14.16 No General Partners' Liability ..............................................................52
(iv) NBPLP CREDIT AGREEMENT SCHEDULES AND EXHIBITS Schedule 2.1 - Lenders and Commitments Schedule 7.1 - Conditions Precedent to Closing Schedule 8.3 - Subsidiaries; Partnership Interests Schedule 10.1 - Existing Debt Schedule 13.3 - Address for Notices Exhibit A - Form of Note Exhibit B-1 - Form of Borrowing Notice Exhibit B-2 - Form of Conversion Notice Exhibit B-3 - Form of LC Request Exhibit C - Form of Guaranty Exhibit D - Form of Compliance Certificate Exhibit E - Form of Assignment and Acceptance Agreement Exhibit F-1 - Form of Opinion of Counsel of Borrower Exhibit F-2 - Form of Opinion of General Counsel Exhibit F-3 - Form of Opinion of Counsel of Pan Border Exhibit F-4 - Form of Opinion of Counsel of Northwest Border
(v) NBPLP CREDIT AGREEMENT REVOLVING CREDIT AGREEMENT THIS CREDIT AGREEMENT is entered into as of June 28, 2000, among NORTHERN BORDER PARTNERS, L.P., a Delaware limited partnership ("BORROWER"), NORTHERN BORDER INTERMEDIATE LIMITED PARTNERSHIP, a Delaware limited partnership ("INTERMEDIATE PARTNERSHIP"), Lenders (hereinafter defined), BANK OF AMERICA, N.A., as Administrative Agent (hereinafter defined) for itself and the other Lenders, SUNTRUST BANK, as Syndication Agent (hereinafter defined) and BANK ONE, NA, as Documentation Agent (hereinafter defined). RECITALS A. Borrower has requested that Lenders extend credit to Borrower, providing for a revolving loan and standby letter of credit facility in the aggregate principal amount of $75,000,000, for repayment of existing indebtedness, working capital, capital expenditures, permitted investments and other lawful purposes. B. Upon and subject to the terms and conditions of this Agreement, Lenders are willing to extend such credit to Borrower. Accordingly, in consideration of the mutual covenants contained herein, the parties agree as follows: SECTION 1 DEFINITIONS AND TERMS. 1.1 DEFINITIONS. As used herein: ACQUISITION means any transaction or series of related transactions for the purpose of, or resulting in, directly or indirectly, (a) the acquisition by a Person of all or substantially all of the assets of another Person or of any business or division of another Person, (b) the acquisition by a Person of more than 50% of any class of Voting Stock (or similar ownership interests) of any other Person (provided that, formation or organization of any entity shall not constitute an "Acquisition" to the extent that the amount of the loan, advance, investment, or capital contribution in such entity constitutes a permitted investment under SECTION 10.7); or (c) a merger, consolidation, amalgamation, or other combination by any Person with another Person if a Loan Party is the surviving entity; provided that, in any merger involving Borrower, Borrower must be the surviving entity. ADMINISTRATIVE AGENT means Bank of America, N.A., and its permitted successors or assigns as "Administrative Agent" for Lenders under the Loan Documents. AFFILIATE of any Person means any other individual or entity who directly or indirectly controls, or is controlled by, or is under common control with, such Person, and, for purposes of this definition only, "control," "controlled by," and "under common control with" mean possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of voting securities, by contract, or otherwise). AGENTS means, collectively, Administrative Agent, Syndication Agent and Documentation Agent. AGREEMENT means this Revolving Credit Agreement (as the same may hereafter be amended, modified, supplemented, or restated from time to time). ANNIVERSARY DATE means each of June 28, 2001 and June 28, 2002. APPLICABLE LENDING OFFICE means, for each Lender and for each Type of Borrowing, the "Lending Office" of such Lender (or an affiliate of such Lender) designated on SCHEDULE 13.3 attached hereto or such NBPLP CREDIT AGREEMENT 1 other office that such Lender (or an affiliate of such Lender) may from time to time specify to Administrative Agent and Borrower by written notice in accordance with the terms hereof. APPLICABLE AMOUNT AND APPLICABLE MARGIN means, on any date of determination, with respect to Borrowings under the Facility and commitment fees, letter of credit fees and utilization fees under the Facility the following annualized rates (stated in terms of basis points ("bps")) that correspond to the ratings established by both S&P and Moody's applicable to the Borrower's long-term senior unsecured non-credit enhanced indebtedness for borrowed money ("INDEX DEBT") at such date of determination:
APPLICABLE MARGIN -------------------------------- EURODOLLAR RATE BASE RATE BORROWINGS AND UNUSED SENIOR UNSECURED BORROWINGS LETTERS OF UTILIZATION FEE COMMITMENT DEBT RATING (bps) CREDIT(bps) (bps) FEE(bps) - ---------------- ---------- --------------- --------------- ---------- Category 1 Greater than or equal to A-/A3 0.0 50.0 12.5 12.5 Category 2 BBB+/Baa1 0.0 62.5 12.5 15.0 Category 3 BBB/Baa2 0.0 75.0 12.5 17.5 Category 4 BBB-/Baa3 0.0 87.5 12.5 25.0 Category 5 Less than BBB- /Baa3 0.0 112.5 12.5 30.0
For purposes of determining the Applicable Amount and the Applicable Margin, with respect to the debt ratings criteria: (i) if neither Moody's nor S&P shall have in effect a rating for Index Debt (other than by reason of the circumstances referred to in the last sentence of this definition), then both such rating agencies will be deemed to have established ratings for Index Debt in Category 5; (ii) if either of Moody's or S&P shall fail to have in effect a rating for Index Debt (other than by reason of the circumstances referred to in the last sentence of this definition), then such rating agency shall be deemed to have established a rating in Category 5; (iii) if the ratings established by Moody's and S&P shall differ, the Applicable Amount and the Applicable Margin shall be based on the higher of the two ratings unless one of the ratings is two or more Categories lower than the other, in which case the Applicable Amount and the Applicable Margin shall be determined by reference to the Category next above that of the lower of the two ratings; and (iv) if any rating established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change. If the rating system of either Moody's or S&P shall change, or if either Moody's or S&P shall cease to be in the business of rating corporate debt obligations, Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating system or the unavailability of ratings from such rating agency and pending the effectiveness of such amendment, the Applicable Amount and the Applicable Margin shall be determined by reference to the rating most recently in effect prior to such change or cessation. 2 NBPLP CREDIT AGREEMENT ARRANGER means Banc of America Securities LLC, and its successors and assigns, in its capacity as lead arranger and book manager under the Loan Documents. AUTHORIZATIONS means all filings, recordings, and registrations with, and all validations or exemptions, approvals, orders, authorizations, consents, franchises, licenses, certificates, and permits from, any Governmental Authority. BANK OF AMERICA means Bank of America, N.A., in its individual capacity as a Lender, and its successors and assigns. BASE RATE means, for any day, the rate per annum equal to the higher of (a) the Federal Funds Rate for such day plus one-half of one percent (0.5%) and (b) the Prime Rate for such day. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective on the effective date of such change in the Prime Rate or the Federal Funds Rate. BASE RATE BORROWING means a Borrowing bearing interest at the sum of the Base Rate plus the Applicable Margin for Base Rate Borrowings. BORROWER is defined in the preamble to this Agreement. BORROWING means any amount disbursed (a) by one or more Lenders under the Loan Documents (under the Facility or the LC Subfacility), whether such amount constitutes an original disbursement of funds, the continuation or conversion of an amount outstanding, or payment of a draft under an LC, or (b) by any Lender in accordance with, and to satisfy the obligations of any Loan Party under, any Loan Document. BORROWING DATE is defined in SECTION 2.5(a). BORROWING NOTICE means a request for Borrowing made pursuant to SECTION 2.5(a), substantially in the form of EXHIBIT B-1. BUSINESS DAY means (a) for all purposes, any day other than Saturday, Sunday, and any other day on which commercial banking institutions are required or authorized by Law to be closed in Dallas, Texas, and (b) in addition to the foregoing, in respect of any Eurodollar Rate Borrowing, a day on which dealings in United States dollars are conducted in the London interbank market and commercial banks are open for international business in London. CAPITAL LEASE means any capital lease or sublease which should be capitalized on a balance sheet in accordance with GAAP. CAPITALIZATION means, the sum of Funded Debt plus partners' capital, determined in accordance with GAAP. CAPITALIZATION RATIO means, at any date of determination thereof, (a) the Funded Debt outstanding on such date to (b) Capitalization outstanding on such date, each determined for Borrower and the Intermediate Partnership on a consolidated basis without regard to any other Subsidiaries of either which would otherwise be consolidated under the requirements of GAAP. CHANGE OF CONTROL means (i) the failure of Subsidiaries of Enron Corp. and/or the Williams Companies to own, free and clear of all Liens, general partnership interests in Borrower and the Intermediate Partnership such that the aggregate voting rights of such Persons is greater than 50% of the outstanding voting rights of all general partners of Borrower and the Intermediate Partnership, or (ii) the failure of Borrower directly, or indirectly through Intermediate Partnership, to own as a general partner, free and clear of all Liens, at least 60% of the partnership interests in NBPC. 3 NBPLP CREDIT AGREEMENT CLOSING DATE means the date upon which this Agreement has been executed by Borrower, Lenders, and Administrative Agent and all conditions precedent specified in SECTION 7.1 have been satisfied or waived. CODE means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder. COMMITMENT means, on any date of determination, the sum of all Committed Sums then in effect for all Lenders in respect of the Facility. COMMITMENT PERCENTAGE means, at any date of determination, for any Lender, the proportion (stated as a percentage) that its Committed Sum bears to the aggregate Committed Sums of all Lenders. COMMITMENT USAGE means, at the time of any determination thereof, the sum of (a) the aggregate Principal Debt plus, without duplication, (b) the LC Exposure. COMMITTED SUM means for any Lender, with respect to the Facility, at any date of determination occurring prior to the Termination Date for the Facility, the amount stated beside such Lender's name on the most-recently amended SCHEDULE 2.1 to this Agreement (which amount is subject to increase, reduction, or cancellation in accordance with the Loan Documents). COMMON UNIT means units representing limited partnership interests in Borrower offered for sale to the public. COMPLIANCE CERTIFICATE means a certificate signed by a Responsible Officer, substantially in the form of EXHIBIT D. CONSEQUENTIAL LOSS means any loss or expense which any Lender may reasonably incur in respect of a Eurodollar Rate Borrowing as a consequence of any event described in SECTION 4.5. CONVERSION NOTICE means a request pursuant to SECTION 3.11, substantially in the form of EXHIBIT B-2. CURRENT FINANCIALS means, at the time of any determination thereof, the more recently delivered to Lenders of either (a) the Financial Statements of the type described in SECTIONS 9.3(b) and 9.3(c) for the fiscal year ended December 31, 1999, or (b) the most recent Financial Statements required to be delivered under SECTIONS 9.3(b) and 9.3(c). DEBT means (without duplication), for any Person, the sum of the following: (a) all liabilities, obligations, and indebtedness of such Person which in accordance with GAAP should be classified upon such Person's balance sheet as liabilities in respect of (i) money borrowed, including, without limitation, the Principal Debt, (ii) obligations of such Person under Capital Leases, and (iii) obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations, and obligations under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business); (b) the face amount of all letters of credit and banker's acceptances issued for the account of such Person, and without duplication, all drafts drawn and unpaid thereunder; (c) any liability with respect to obligations to deliver goods or services in consideration of advance payments therefor, including any liability with respect to payments received in consideration of oil, gas, or other minerals yet to be acquired or produced at the time of payment (such as obligations under contracts to deliver oil or gas in return for payments already received and production payments created by such Person or for the creation of which such Person directly or indirectly received payment); (d) all obligations of the type referred to in CLAUSES (a) through (c) preceding of other Persons for the payment of which such Person is responsible or liable as 4 NBPLP CREDIT AGREEMENT obligor, guarantor, or otherwise; and (e) all obligations of the type referred to in CLAUSES (a) through (d) preceding of other Persons secured by any Lien on any property or asset of such Person whether or not such obligation is assumed by such Person (except obligations of others secured by Liens, neither assumed nor guaranteed by such Person nor on which it customarily pays interest, existing upon real estate or rights in or relating to real estate acquired by such Person for substation, metering station, gathering line, transmission line, transportation line, distribution line or right of way purposes, and any Liens reserved in leases for rent and for compliance with the terms of the leases in the case of leasehold estates, to the extent that any such Lien referred to in this CLAUSE (e) does not materially impair the use of the property), and, the amount of such obligation being deemed to be the lesser of the value of such property or assets or the amount of the obligation so secured. The Debt of any Person shall include the Debt of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Debt provide that such Person is not liable therefor. DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States of America and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent transfer or conveyance, suspension of payments, or similar Laws from time to time in effect affecting the Rights of creditors generally. DEFAULT is defined in SECTION 11. DEFAULT RATE means an interest rate equal to the lesser of (a) Base Rate plus the Applicable Margin, if any, applicable to Base Rate Borrowings plus 2% per annum and (b) the Maximum Rate; provided, however, that with respect to a Eurodollar Rate Borrowing, the Default Rate shall be an interest rate equal to the lesser of (x) the interest rate (including any Applicable Margin) otherwise applicable to such Borrowing plus 2% per annum, and (y) the Maximum Rate. DERIVATIVE TRANSACTION means (a) any rate, basis, commodity, currency, debt or equity swap, (b) any cap, collar or floor agreement, (c) any rate, basis, commodity, currency, debt or equity exchange or forward agreement, (d) any rate, basis, commodity, currency, debt or equity option, (e) any other similar agreement, (f) any option to enter into any of the foregoing, (g) any master agreement or other agreement providing for any of the foregoing and (h) any combination of any of the foregoing. DISTRIBUTION for any Person means, with respect to any shares of any capital stock or other equity securities issued by such Person, (a) the retirement, redemption, purchase, or other acquisition for value of any such securities, (b) the declaration or payment of any dividend on or with respect to any such securities, and (c) any other payment by such Person with respect to such securities. DOCUMENTATION AGENT means Bank One, NA and its respective permitted successors and assigns as "Documentation Agent" under the Loan Documents. DOLLARS and the symbol $ means lawful money of the United States of America. ELIGIBLE ASSIGNEE means a Lender or any other Person approved by Administrative Agent (which approval will not be unreasonably withheld or delayed by Administrative Agent) and, unless a Default or Potential Default has occurred and is continuing at the time any assignment is effected in accordance with SECTION 14.13, Borrower, such approval not to be unreasonably withheld or delayed by Borrower and such approval to be deemed given by Borrower if no objection is received by the assigning Lender and Administrative Agent from Borrower within five Business Days after notice of such proposed assignment has been provided by the assigning Lender to Borrower; provided, however, that neither Borrower nor any Affiliate of Borrower shall qualify as an Eligible Assignee. 5 NBPLP CREDIT AGREEMENT EMPLOYEE PLAN means an employee pension benefit plan covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and established or maintained by any Loan Party, Subsidiary thereof, or ERISA Affiliate, but not including any Multiemployer Plan. ENVIRONMENTAL LAW means any applicable Law that relates to (a) the condition or protection of air, groundwater, surface water, soil, or other environmental media, (b) the environment, including natural resources or any activity which affects the environment, (c) the regulation of any pollutants, contaminants, wastes, substances, and Hazardous Substances, or (d) the Release or threatened Release of Hazardous Substances. ENVIRONMENTAL LIABILITY means any obligation, liability (including, without limitation, any strict liability), loss, fine, penalty, charge, Lien, damage, cost, or expense of any kind to the extent that it results (a) from any violation of or any obligation or liability under any Environmental Law, (b) from the presence, Release, or threatened Release of any Hazardous Substance, or (c) from actual or threatened damages to natural resources. ERISA means the Employee Retirement Income Security Act of 1974, as amended, and the regulations and rulings thereunder. ERISA AFFILIATE means any company or trade or business (whether or not incorporated) which, for purposes of Title IV of ERISA, is, or has been within the past six years, a member of any Loan Party's controlled group or which is, or has been within the past six years, under common control with any Loan Party within the meaning of Section 414(b), (c), (m), or (o) of the Code. ERISA EVENT means any of the following: (a) the occurrence of a Reportable Event; (b) the application for a minimum funding waiver with respect to an Employee Plan, or becoming obligated to file with the PBGC a notice of failure to make a required payment with respect to any Employee Plan; (c) the provision by the administrator of any Employee Plan of a notice of intent to terminate such Employee Plan; (d) the withdrawal by any Loan Party, Subsidiary thereof, or ERISA Affiliate, in whole or in part, from a Multiemployer Plan; (e) the occurrence of any condition (under ERISA, the Code, or otherwise) for the imposition of a Lien in favor of the PBGC on the assets of any Loan Party, Subsidiary thereof, or ERISA Affiliate; (f) the adoption of an amendment to an Employee Plan requiring the provision of security to such Employee Plan; (g) institution by the PBGC of proceedings to terminate or impose liability in respect of (other than premiums under Section 4007 of ERISA), any Employee Plan, or the occurrence of any event or condition that constitutes grounds for termination of, or the appointment of a trustee to administer, any Employee Plan; (h) institution by the sponsor of a Multiemployer Plan of proceedings to terminate or reorganize such Multiemployer Plan, or to impose withdrawal liability on any Loan Party, Subsidiary thereof, or ERISA Affiliate with respect to such Multiemployer Plan; (i) the cessation of operations at a facility of any Loan Party, Subsidiary thereof, or ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; or (j) any Loan Party, Subsidiary thereof, or ERISA Affiliate has engaged in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code). EURODOLLAR RATE means, for any Eurodollar Rate Borrowing for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Dow Jones Markets Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term "Eurodollar Rate" shall mean, for any Eurodollar Rate Borrowing for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%). 6 NBPLP CREDIT AGREEMENT EURODOLLAR RATE BORROWING means a Borrowing bearing interest at the sum of the Eurodollar Rate plus the Applicable Margin for Eurodollar Rate Borrowings. EXISTING CREDIT AGREEMENTS means (a) that certain Credit Agreement dated as of November 6, 1997 among Borrower, Canadian Imperial Bank of Commerce as administrative agent and the lenders therein named, and (b) that certain Credit Agreement dated as of December 15, 1999 among Borrower, SunTrust Bank, Atlanta, as administrative agent and the lenders therein named. EXHIBIT means an exhibit to this Agreement unless otherwise specified. FACILITY means the credit facility as described in and subject to the limitations set forth in SECTION 2.1 hereof, including the LC Subfacility. FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined (which determination shall be conclusive and binding, absent manifest error) by Administrative Agent to be equal to the weighted average of the rates on overnight Federal funds transactions with member banks of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to Administrative Agent (in its individual capacity) on such day on such transactions as determined by Administrative Agent (which determination shall be conclusive and binding, absent manifest error). FINANCIAL STATEMENTS is defined in SECTION 9.3(a). FUNDED DEBT means (without duplication), for any Person, the sum of the following: (a) all liabilities, obligations, and indebtedness of such Person which in accordance with GAAP should be classified upon such Person's balance sheet as liabilities in respect of (i) money borrowed, including, without limitation, the Principal Debt, (ii) obligations of such Person under Capital Leases, and (iii) obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations, and obligations under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business); (b) all reimbursement obligations with respect to letters of credit, banker's acceptances, surety bonds and similar instruments; (c) any liability with respect to obligations to deliver goods or services in consideration of advance payments therefor, including any liability with respect to payments received in consideration of oil, gas, or other minerals yet to be acquired or produced at the time of payment (such as obligations under contracts to deliver oil or gas in return for payments already received and production payments created by such Person or for the creation of which such Person directly or indirectly received payment); (d) all obligations of the type referred to in CLAUSES (a) through (c) preceding of other Persons for the payment of which such Person is responsible or liable as obligor, guarantor, or otherwise; and (e) all obligations of the type referred to in CLAUSES (a) through (d) preceding of other Persons secured by any Lien on any property or asset of such Person whether or not such obligation is assumed by such Person (except obligations of others secured by Liens, neither assumed nor guaranteed by such Person nor on which it customarily pays interest, existing upon real estate or rights in or relating to real estate acquired by such Person for substation, metering station, gathering line, transmission line, transportation line, distribution line or right of way purposes, and any Liens reserved in leases for rent and for compliance with the terms of the leases in the case of leasehold estates, to the extent that any such Lien referred to in this CLAUSE (e) does not materially impair the use of the property), and the amount of such obligation being deemed to be the lesser of the value of such property or assets or the amount of the obligation so secured. The Funded Debt of any Person shall include the Funded Debt of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result 7 NBPLP CREDIT AGREEMENT of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Funded Debt provide that such Person is not liable therefor. GAAP means generally accepted accounting principles of the Accounting Principles Board of the American Institute of Certified Public Accountants and the Financial Accounting Standards Board which are applicable from time to time. GENERAL PARTNER means any of Northern Plains, Pan Border, Northwest Border, any other general partner of Borrower and each of their successors and assigns in such capacity. GOVERNMENTAL AUTHORITY means any (a) local, state, municipal, or federal judicial, executive, or legislative instrumentality, (b) private arbitration board or panel, or (c) central bank. GUARANTOR means Intermediate Partnership. GUARANTY means (a) a Guaranty in substantially the form and upon the terms of EXHIBIT C, executed and delivered by any Person pursuant to the requirements of the Loan Documents; and (b) any amendments, modifications, supplements, restatements, ratifications, or reaffirmations of any Guaranty made in accordance with the Loan Documents. HAZARDOUS SUBSTANCE means (a) any substance that is designated, defined, or classified as a hazardous waste, hazardous material, pollutant, contaminant, or toxic or hazardous substance, or that is otherwise regulated, under any Environmental Law, including without limitation, any hazardous substance within the meaning of Section 101(14) of CERCLA, (b) petroleum, oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel, and other petroleum hydrocarbons, (c) asbestos and asbestos-containing materials in any form, (d) polychlorinated biphenyls, or (e) urea formaldehyde foam. INTEREST PERIOD is determined in accordance with SECTION 3.10. INTERMEDIATE PARTNERSHIP is defined in the recitals to this Agreement. INTERMEDIATE PARTNERSHIP AGREEMENT means that certain Amended and Restated Agreement of Limited Partnership of Northern Border Intermediate Limited Partnership dated as of October 1, 1993 as the same may have been or may hereafter be amended, supplemented, restated or otherwise modified from time to time. LAWS means all applicable statutes, laws, treaties, ordinances, tariff requirements, rules, regulations, orders, writs, injunctions, decrees, judgments, opinions, or interpretations of any Governmental Authority. LC means the letter(s) of credit issued hereunder in the form agreed upon among Borrower, Administrative Agent, and the beneficiary thereof at the time of issuance thereof and participated in by Lenders pursuant to the terms and conditions of SECTION 2.2 hereof. LC AGREEMENT means a letter of credit application and agreement (in form and substance satisfactory to Administrative Agent) submitted by Borrower to Administrative Agent for an LC for its own account (and for its benefit or the benefit of any of Borrower's Subsidiaries); provided that this Agreement shall control any conflict between this Agreement and any such LC Agreement. LC EXPOSURE means, at any time and without duplication, the sum of (a) the aggregate undrawn portion of all uncancelled and unexpired LCs plus (b) the aggregate unpaid reimbursement obligations of Borrower in respect of drawings of drafts under any LC. LC REQUEST means a request pursuant to SECTION 2.2(a), substantially in the form of EXHIBIT B-3. 8 NBPLP CREDIT AGREEMENT LC SUBFACILITY means a subfacility of the Facility for the issuance of LCs as described in and subject to the limitations of SECTION 2.2, under which the LC Exposure may never (a) collectively exceed $50,000,000 and (b) together with the Principal Debt may never exceed the Commitment. LENDERS means, on any date, the financial institutions named on SCHEDULE 2.1 (as the same may be amended from time to time by Administrative Agent to reflect the assignments made in accordance with SECTION 14.13(b) of this Agreement), and subject to the terms and conditions of this Agreement, and their respective successors and assigns (but not any Participant who is not otherwise a party to this Agreement). LETTER OF CREDIT CASH COLLATERAL ACCOUNT means a blocked deposit account held by Administrative Agent with respect to which Borrower hereby pledges and grants a security interest in and lien on such account to Administrative Agent for and on behalf of the Lenders as security for LC Exposure and with respect to which Borrower agrees to execute and deliver from time to time such documentation as Administrative Agent may reasonably request to further assure and confirm such security interest. LIEN means any lien, mortgage, security interest, pledge, assignment, charge, title retention agreement, encumbrance of any kind, Right or arrangement with or for the benefit of any creditor (other than under or relating to subordination or other intercreditor arrangements) to have its claim satisfied out of any property or assets, or the proceeds therefrom, prior to the general creditors of the owner thereof. LIMITED PARTNERSHIP UNITS means Common Units and any other units representing a limited partner's interest in Borrower. LITIGATION means any action by or before any Governmental Authority. LOAN DOCUMENTS means (a) this Agreement, the Notes, each Guaranty, LCs, and LC Agreements, (b) all agreements, documents, or instruments in favor of Agents or Lenders now or hereafter delivered pursuant to this Agreement or otherwise delivered in connection with all or any part of the Obligation, and (c) any and all future renewals, extensions, restatements, reaffirmations, or amendments of, or supplements to, all or any part of the foregoing. LOAN PARTIES means, on any date of determination, Borrower and all Guarantors. MATERIAL ADVERSE EVENT means any set of one or more circumstances or events which, individually or collectively, result in any (a) material impairment of the ability of any Loan Party to perform any of its payment or other material obligations under the Loan Documents or the ability of Administrative Agent or any Lender to enforce any such obligations or any of their respective Rights under the Loan Documents, (b) material and adverse effect on the business, properties, condition (financial or otherwise), or results of operations of any Loan Party, NBPC, or any Loan Party and its Subsidiaries taken as a whole, or (c) a Default or Potential Default. MATERIAL SUBSIDIARY means any Subsidiary the assets of which comprised more than 5% of consolidated assets of Borrower and its Subsidiaries at the end of the fiscal year of Borrower immediately prior to the date of determination, or the gross revenue of which for any of the three fiscal years of Borrower immediately prior to the date of determination comprised more than 5% of consolidated gross revenue, all as determined by reference to the applicable financial statements of such Subsidiary and Borrower. MAXIMUM AMOUNT and MAXIMUM RATE respectively mean, for each Lender, the maximum non-usurious amount and the maximum non-usurious rate of interest which, under applicable Law, such Lender is permitted to contract for, charge, take, reserve, or receive on the Obligation. MOODY'S means Moody's Investor Service, Inc. or any successor thereto. 9 NBPLP CREDIT AGREEMENT MULTIEMPLOYER PLAN means a multiemployer plan as defined in Sections 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code to which Borrower or any of its Subsidiaries, or any ERISA Affiliate of Borrower or any of its Subsidiaries is making, has made, is accruing, or has accrued, an obligation to make contributions or has, within any of the preceding five plan years, made or accrued an obligation to make contributions. NBPC means Northern Border Pipeline Company, a Texas general partnership. NBPC CAPITALIZATION RATIO means the ratio calculated in accordance with SECTION 6.3 of the Credit Agreement dated June 16, 1997 among NBPC, First National Bank of Chicago, as Agent, and the Lenders therein defined, as in effect on the date hereof, without regard to whether said Credit Agreement is amended or ceases to be in effect after the date hereof. NORTHERN BORDER PARTNERSHIP AGREEMENT means that certain General Partnership Agreement relating to the formation of NBPC effective as of March 9, 1978 as heretofore amended, modified and supplemented and as such agreement may hereafter from time to time be further amended, modified or supplemented. NORTHERN PLAINS means Northern Plains Natural Gas Company, a Delaware corporation. NORTHWEST BORDER means Northwest Border Pipeline Company, a Delaware corporation. NOTE means a promissory note substantially in the form of EXHIBIT A, and all renewals and extensions of all or any part thereof. OBLIGATION means all present and future indebtedness, liabilities, and obligations, and all renewals and extensions thereof, or any part thereof, now or hereafter owed to Administrative Agent, any other Agent, any Lender, or any Affiliate of any Lender by any Loan Party or any Subsidiary thereof arising from, by virtue of, or pursuant to any Loan Document, together with all interest accruing thereon, fees, costs, and expenses (including, without limitation, all attorneys' fees and expenses incurred in the enforcement or collection thereof) payable under the Loan Documents. PAN BORDER means Pan Border Gas Company, a Delaware corporation. PARTICIPANT is defined in SECTION 14.13(e). PARTNERSHIP AGREEMENT means the Amended and Restated Agreement of Limited Partnership of Northern Border Partners, L.P., dated as of October 1, 1993 as the same may have been or may hereafter be amended, supplemented, restated or otherwise modified from time to time. PBGC means the Pension Benefit Guaranty Corporation, or any successor thereof, established pursuant to ERISA. PERMITTED LIENS means Liens permitted under SECTION 10.2 as described in such Section. PERSON means any individual, entity, or Governmental Authority. POTENTIAL DEFAULT means the occurrence of any event or existence of any circumstance which, with the giving of notice or lapse of time or both, would become a Default. 10 NBPLP CREDIT AGREEMENT PRIME RATE means the per annum rate of interest established from time to time by Bank of America, N.A., as its prime rate, which rate may or may not be the lowest rate of interest charged by Bank of America, N.A. to its customers. PRINCIPAL DEBT means, on any date of determination, the aggregate unpaid principal balance of all Borrowings under the Facility, together with the aggregate unpaid reimbursement obligations of Borrower in respect of drawings under any LC. PRO RATA or PRO RATA PART, for each Lender, means on any date of determination (a) for purposes of sharing any amount or fee payable to any Lender in respect of the Facility or the LC Subfacility (as the case may be) the proportion which the portion of the Principal Debt for the Facility or LC Subfacility owed to such Lender (whether held directly or through a participation in respect of the LC Subfacility and determined after giving effect thereto) bears to the Principal Debt under the Facility or LC Subfacility (as the case may be) owed to all Lenders at the time in question, and (b) for all other purposes, the proportion which the portion of the Principal Debt owed to such Lender bears to the Principal Debt owed to all Lenders at the time in question, or if no Principal Debt is outstanding, then the proportion that the aggregate of such Lender's Committed Sum then in effect under the Facility and LC Subfacility bears to the Commitment then in effect. REGISTER is defined in SECTION 14.13(c). REGULATION T means Regulation T of the Board of Governors of the Federal Reserve System, as amended. REGULATION U means Regulation U of the Board of Governors of the Federal Reserve System, as amended. REGULATION X means Regulation X of the Board of Governors of the Federal Reserve System, as amended. RELEASE means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposal, deposit, dispersal, migrating, or other movement into the air, ground, or surface water, or soil. REPORTABLE EVENT shall have the meaning specified in Section 4043 of ERISA or the regulations issued thereunder in connection with an Employee Plan, excluding events for which the notice requirement is waived under applicable PBGC regulations other than those events described in sections 4043.21, 4043.24, and 4043.28 of such regulations, including each such provision as it may subsequently be renumbered. REPORTING ENTITIES is defined in SECTION 8.6. REPRESENTATIVES means representatives, officers, directors, employees, attorneys, and agents. REQUIRED LENDERS means (a) on any date of determination on and after the Closing Date and prior to the date of the initial Borrowing Date under the Loan Documents, those Lenders holding 51% or more of the Commitment; (b) on any date of determination on and after the date of the initial Borrowing Date under the Loan Documents and prior to the Termination Date for the Facility, those Lenders holding 51% of the Commitment; and (c) on any date of determination on or after the Termination Date for the Facility, those Lenders holding 51% or more of the Principal Debt. RESPONSIBLE OFFICER means the chief executive officer, chief financial officer, senior vice president, or treasurer of Borrower, or, for all purposes under the Loan Documents, any other officer designated from 11 NBPLP CREDIT AGREEMENT time to time by the Partnership Policy Committee of Borrower, which designated officer is acceptable to Administrative Agent. RIGHTS means rights, remedies, powers, privileges, and benefits. ROLLING PERIOD means, on any date of determination, the most recent four fiscal quarters ended on March 31, June 30, September 30, or December 31 (as the case may be). S&P means Standard and Poor's Rating Group (a division of McGraw-Hill, Inc.). SCHEDULE means, unless specified otherwise, a schedule attached to this Agreement, as the same may be supplemented and modified from time to time in accordance with the terms of the Loan Documents. SUBSIDIARY of any Person means (a) any entity of which an aggregate of more than 50% (in number of votes) of the stock is owned of record or beneficially, directly or indirectly, by such Person, or (b) any partnership (limited or general) of which such Person shall, directly or indirectly, at any time be the controlling general partner determined in accordance with GAAP or own fifty percent (50%) or more of the issued and outstanding partnership interests. TAXES means, for any Person, taxes, assessments, or other governmental charges or levies imposed upon such Person, its income, or any of its properties, franchises, or assets. TERMINATION DATE means, the earlier of (i) June 27, 2003 (or such later date as may be established pursuant to SECTION 2.6), and (ii) the effective date of any other termination, cancellation, or acceleration of all commitments to lend under the Facility. 364-DAY AGREEMENT means that certain 364-Day Credit Agreement dated as of even date herewith executed by Borrower, Bank of America, N.A., as Administrative Agent and as a lender, and the other agents and lenders therein named. TYPE means any type of Borrowing determined with respect to the interest option applicable thereto. VOTING STOCK means securities (as such term is defined in Section 2(1) of the Securities Act of 1933, as amended) of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the corporate directors (or Persons performing similar functions). 1.2 NUMBER AND GENDER OF WORDS; OTHER REFERENCES. Unless otherwise specified in the Loan Documents, (a) where appropriate, the singular includes the plural and vice versa, and words of any gender include each other gender, (b) heading and caption references may not be construed in interpreting provisions, (c) monetary references are to currency of the United States of America, (d) section, paragraph, annex, schedule, exhibit, and similar references are to the particular Loan Document in which they are used, (e) references to "telecopy," "facsimile," "fax," or similar terms are to facsimile or telecopy transmissions, (f) references to "including" mean including without limiting the generality of any description preceding that word, (g) the rule of construction that references to general items that follow references to specific items are limited to the same type or character of those specific items is not applicable in the Loan Documents, (h) references to any Person include that Person's heirs, personal representatives, successors, trustees, receivers, and permitted assigns, (i) references to any Law include every amendment or supplement to it, rule and regulation adopted under it, and successor or replacement for it, and (j) references to any Loan Document or other document include every renewal and extension of it, amendment and supplement to it, and restatement, replacement or substitution for it. 1.3 ACCOUNTING PRINCIPLES. All accounting and financial terms used in the Loan Documents and the compliance with each financial covenant therein shall be determined in accordance with GAAP, and, 12 NBPLP CREDIT AGREEMENT all accounting principles shall be applied on a consistent basis so that the accounting principles in a current period are comparable in all material respects to those applied during the preceding comparable period. SECTION 2 BORROWING PROVISIONS. 2.1 FACILITY. Each Lender severally, but not jointly, agrees to lend to Borrower such Lender's Commitment Percentage of one or more Borrowings under the Facility not to exceed such Lender's Committed Sum under the Facility, which Borrowings may be repaid and reborrowed from time to time in accordance with the terms and provisions of the Loan Documents; provided that, (a) each such Borrowing must occur on a Business Day and no later than the Business Day immediately preceding the Termination Date for the Facility; (b) each such Borrowing shall be in an amount not less than $5,000,000 or a greater integral multiple of $1,000,000; and (c) on any date of determination, the Commitment Usage shall never exceed the Commitment. 2.2 LC SUBFACILITY. (a) Conditions. Subject to the terms and conditions of this Agreement and applicable Law, Administrative Agent agrees to issue LCs upon Borrower's application therefor (denominated in Dollars) by delivering to Administrative Agent a properly completed LC Request and an LC Agreement with respect thereto no later than 10:00 a.m. Dallas, Texas time three Business Days before such LC is to be issued; provided that, (i) on any date of determination and after giving effect to any LC to be issued on such date, the Commitment Usage shall never exceed the Commitment then in effect, (ii) on any date of determination and after giving effect to any LC to be issued on such date, the LC Exposure shall never exceed $50,000,000 (as such commitment under the LC Subfacility may be reduced or canceled as herein provided), (iii) at the time of issuance of such LC, no Default or Potential Default shall have occurred and be continuing, and (iv) each LC must expire no later than the earlier of the 30th day prior to the Termination Date or one year from its issuance. (b) Participations. Immediately upon the issuance by Administrative Agent of any LC, Administrative Agent shall be deemed to have sold and transferred to each other Lender, and each other such Lender shall be deemed irrevocably and unconditionally to have purchased and received from Administrative Agent, without recourse or warranty, an undivided interest and participation, to the extent of such Lender's Commitment Percentage (based upon the Facility), in such LC, the LC Application related thereto, and all Rights of Administrative Agent in respect thereof (other than Rights to receive certain fees provided for in SECTION 5.4(b)). (c) Reimbursement Obligation. To induce Administrative Agent to issue and maintain LCs and to induce Lenders to participate in issued LCs, Borrower agrees to pay or reimburse Administrative Agent (i) on the date on which any draft is presented under any LC, the amount of any draft paid or to be paid by Administrative Agent and (ii) promptly, upon demand, the amount of any fees (in addition to the fees described in SECTION 5) which Administrative Agent customarily charges to a Person similarly situated in the ordinary course of its business for amending LC Agreements, for honoring drafts under letters of credit, and taking similar action in connection with letters of credit. If Borrower has not reimbursed Administrative Agent for any drafts paid or to be paid within 24 hours of demand therefor by Administrative Agent, Administrative Agent is hereby irrevocably authorized to fund such reimbursement obligations as a Base Rate Borrowing under the Facility to the extent of availability under the Facility and if the conditions precedent in this Agreement for such a Borrowing (other than any notice requirements or minimum funding amounts) have, to Administrative Agent's knowledge, been satisfied. The proceeds of such Borrowing under the Facility shall be advanced directly to Administrative Agent in payment of Borrower's unpaid reimbursement obligation. If for any reason, funds cannot be advanced under the Facility, then Borrower's reimbursement obligation shall continue to be due and payable. Borrower's obligations under this SECTION 2.2(c) shall be absolute and unconditional under any and all circumstances and 13 NBPLP CREDIT AGREEMENT irrespective of any setoff, counterclaim, or defense to payment which Borrower may have at any time against Administrative Agent or any other Person. From the date that Administrative Agent pays a draft under an LC until the related reimbursement obligation of Borrower is paid or funded by proceeds of a Borrowing, (x) unpaid reimbursement obligations which are funded pursuant to a Base Rate Borrowing shall accrue interest at the rate then applicable to Base Rate Borrowings, and (y) unpaid reimbursement obligations which are not so funded shall accrue interest at the Default Rate, which accrued interest shall be payable on demand. (d) General. Administrative Agent shall promptly notify Borrower of the date and amount of any draft presented for honor under any LC (but failure to give any such notice shall not affect Borrower's obligations under this Agreement). Administrative Agent shall pay the requested amount upon presentment of a draft for honor unless such presentment on its face does not comply with the terms of the applicable LC. When making payment, Administrative Agent may disregard (i) any default or potential default that exists under any other agreement and (ii) the obligations under any other agreement that have or have not been performed by the beneficiary or any other Person (and Administrative Agent shall not be liable for any obligation of any Person thereunder). Borrower's reimbursement obligations to Administrative Agent and Lenders, and each Lender's obligations to Administrative Agent, under this SECTION 2.2 are absolute and unconditional irrespective of, and Administrative Agent is not responsible for, (i) the validity, enforceability, sufficiency, accuracy, or genuineness of documents or endorsements which appear appropriate on their face (even if they are in any respect invalid, unenforceable, insufficient, inaccurate, fraudulent, or forged), (ii) any dispute by Borrower or any of its Subsidiaries with Borrower's or any of its Subsidiaries' claims, setoffs, defenses, counterclaims, or other Rights against Administrative Lender, any Lender, or any other Person, or (iii) the occurrence of any Potential Default or Default. However, nothing in this SECTION 2.2 constitutes a waiver of the Rights of Borrower or any Lender to assert any claim or defense based upon the gross negligence or willful misconduct of Administrative Agent. To the extent any Lender has funded its ratable share of any draft under an LC, then Administrative Agent shall promptly distribute reimbursement payments received from Borrower to such Lender according to its ratable share. In the event any payment by Borrower received by Administrative Agent with respect to an LC and distributed to Lenders on account of their participations therein is thereafter set aside, avoided, or recovered from Administrative Agent in connection with any receivership, liquidation, or bankruptcy proceeding, each Lender which received such distribution shall, upon demand by Administrative Agent, contribute such Lender's ratable portion of the amount set aside, avoided, or recovered, together with interest at the rate required to be paid by Administrative Agent upon the amount required to be repaid by it. (e) Obligation of Lenders. If Borrower fails to reimburse Administrative Agent as provided in SECTION 2.2(c) within twenty-four (24) hours of the demand therefor by Administrative Agent and funds cannot be advanced under the Facility to satisfy the reimbursement obligations, then Administrative Agent shall promptly notify each Lender of Borrower's failure, of the date and amount of the draft paid, and of such Lender's Commitment Percentage (based upon the Facility) thereof. Each Lender shall promptly and unconditionally fund its participation interest in such unreimbursed draft by making available to Administrative Agent in immediately available funds such Lender's Commitment Percentage (based upon the Facility) of the unreimbursed draft. Funds are due and payable to Administrative Agent on or before the close of business on the Business Day when Administrative Agent gives notice to each Lender of Borrower's reimbursement failure (if given prior to 1:00 p.m., Dallas, Texas time) or on the next succeeding Business Day (if notice was given after 1:00 p.m., Dallas, Texas time). All amounts payable by any Lender shall accrue interest at the Federal Funds Rate from the day the applicable draft is paid by Administrative Agent to (but not including) the date the amount is paid by the Lender to Administrative Agent. (f) Duties of Administrative Agent as Issuing Lender. Administrative Agent agrees with each Lender that it will exercise and give the same care and attention to each LC as it gives to 14 NBPLP CREDIT AGREEMENT its other letters of credit . Administrative Agent's sole liability to each Lender with respect to such LCs (other than liability arising from the gross negligence or willful misconduct of Administrative Agent) shall be to distribute promptly to each Lender who has acquired a participating interest therein such Lender's ratable portion of any payments made to Administrative Agent by Borrower pursuant to SECTION 2.2(d). Each Lender and Borrower agree that, in paying any draw under any LC, Administrative Agent shall not have any responsibility to obtain any document (other than any documents required by the respective LC) or to ascertain or inquire as to any document's validity, enforceability, sufficiency, accuracy, or genuineness or the authority of any Person delivering any such document. Administrative Agent, Lenders, and their respective Representatives shall not be liable to any other Lender or Borrower or any of its Subsidiaries for any LCs use or for any beneficiary's acts or omissions. (g) Cash Collateral. On the Termination Date for the Facility, or on any date that the LC Exposure exceeds the then-effective commitment under the LC Subfacility, or upon any demand by Administrative Agent upon the occurrence and during the continuance of a Default, Borrower shall provide to Administrative Agent, for the benefit of the Lenders, (i) cash collateral in Dollars in an amount equal to 110% of the LC Exposure existing on such date, such cash and all interest thereon shall constitute cash collateral for all LCs, and (ii) such additional cash collateral as Administrative Agent may from time to time require, so that the cash collateral amount shall at all times equal or exceed 110% the LC Exposure. Any cash collateral deposited under this CLAUSE (g), and all interest earned thereon, shall be deposited into a Letter of Credit Cash Collateral Account. (h) Letter of Credit Cash Collateral Account. (i) Borrower hereby pledges and grants a security interest in and lien on the Letter of Credit Cash Collateral Account and all funds, cash and instruments at any time on deposit or held therein to the Administrative Agent for and on behalf of the Lenders as security for the Obligation. The Letter of Credit Cash Collateral Account shall be under the exclusive dominion and control of the Administrative Agent. The Administrative Agent may, at any time during the continuation of a Default without notice to Borrower, apply funds then held in the Letter of Credit Cash Collateral Account to the payment of Obligation in respect of LCs (and, if no LCs are outstanding or the face amount thereof is less than the amount on deposit in the Cash Collateral Account, to other amounts owed under this Agreement). (ii) The rate of interest earned on the Letter of Credit Cash Collateral Account shall be comparable to the rates paid by Administrative Agent on other similar accounts as in effect time to time; provided, however, that Administrative Agent shall not be obligated to pay interest on said account during the continuation of a Default. (iii) There shall be no release to Borrower of funds from the Letter of Credit Cash Collateral Account at any time during the continuance of a Potential Default or a Default. (iv) Borrower agrees to pay to Bank of America all customary fees, costs and expenses which Bank of America incurs in connection with opening and maintaining the Letter of Credit Cash Collateral Account. (i) INDEMNIFICATION. BORROWER SHALL PROTECT, INDEMNIFY, PAY, AND SAVE ADMINISTRATIVE AGENT AND EACH LENDER HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES, OR LOSSES OF, OR OWED TO THIRD PARTIES (INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF ADMINISTRATIVE AGENT, LENDERS, OR THEIR RESPECTIVE REPRESENTATIVES), AND ANY AND ALL RELATED COSTS, CHARGES, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES), WHICH ADMINISTRATIVE AGENT, OR ANY LENDER MAY INCUR OR BE SUBJECT TO AS A CONSEQUENCE, 15 NBPLP CREDIT AGREEMENT DIRECT OR INDIRECT, OF (A) THE ISSUANCE OF ANY LC, (B) ANY DISPUTE ABOUT AN LC, OR (C) THE FAILURE OF ADMINISTRATIVE AGENT TO HONOR A DRAFT UNDER SUCH LC AS A RESULT OF ANY ACT OR OMISSION (WHETHER RIGHT OR WRONG) OF ANY PRESENT OR FUTURE GOVERNMENTAL AUTHORITY. HOWEVER, NO PERSON IS ENTITLED TO INDEMNITY HEREUNDER FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THE FOREGOING INDEMNITY PROVISIONS SHALL SURVIVE THE SATISFACTION AND PAYMENT OF THE OBLIGATION AND TERMINATION OF THIS AGREEMENT. (j) LC Agreements. Although referenced in any LC, terms of any particular agreement or other obligation to the beneficiary are not incorporated into this Agreement in any manner. The fees and other amounts payable with respect to each LC are as provided in this Agreement, drafts under any LC shall be deemed part of the Obligation, and in the event of any conflict between the terms of this Agreement and any LC Agreement, the terms of this Agreement shall be controlling. 2.3 TERMINATIONS, REDUCTIONS OR INCREASES OF COMMITMENTS. (a) Voluntary Commitment Reduction. Without premium or penalty, and upon giving not less than three Business Days prior written and irrevocable notice to Administrative Agent, Borrower may terminate in whole or in part the unused portion of the Commitment, or the commitment under the LC Subfacility; provided that: (i) each partial termination of the Commitment shall be in an amount of not less than $5,000,000 or a greater integral multiple of $1,000,000; each partial termination of the commitment under the LC Subfacility shall be in an amount of not less than $1,000,000 or a greater integral multiple of $500,000; and (ii) on any date of determination, the amount of the Commitment may not be reduced below the Commitment Usage, and the commitment under the LC Subfacility shall not be reduced below the LC Exposure. At the time of any commitment termination under this SECTION 2.3, Borrower shall pay to Administrative Agent, for the account of each Lender any amounts that may then be due under SECTION 3.3(c), all accrued and unpaid fees then due and payable under this Agreement, the interest attributable to the amount of that reduction, and any related Consequential Loss. Any part of the Commitment or the commitment under the LC Subfacility that is terminated may not be reinstated. (b) Additional Reductions. The commitment under the LC Subfacility shall be reduced from time to time on the date of any mandatory or voluntary reduction of the Commitment by the amount, if any, by which such LC Subfacility exceeds the Commitment after giving effect to such reduction of the Commitment. (c) Ratable Allocation of Commitment Reductions. Each reduction of the Commitment under this SECTION 2.3 shall be allocated among the Lenders in accordance with their respective Commitment Percentages under the Facility. 2.4 INCREASE IN COMMITMENTS. (a) Borrower may, by written notice to the Administrative Agent (which shall promptly deliver a copy of each to the Lenders), request that the Commitment be increased by an amount not less than $10,000,000 for any such increase; provided (i) that such request for increase may be given only once during the term hereof and (ii) that after giving effect to any such increase the sum of the Commitment and the commitments under the 364-Day Credit Agreement shall not exceed $200,000,000 minus any amount by which the Commitment and the commitments under the 364-Day Agreement shall have been reduced pursuant to SECTION 2.3 and SECTION 2.2 of the 364-Day Agreement. Such notice shall set forth the amount of the requested increase in the Commitment and the date on which such increase is requested to become effective (which shall be not less than 45 days or more than 60 days after the date of such notice), and at Borrower's option, may offer to one or more existing Lenders and/or other banks or financial institutions (any such Lender or other 16 NBPLP CREDIT AGREEMENT bank or other financial institution referred to in this clause (a) being called an "AUGMENTING LENDER") the opportunity to extend credit hereunder or increase their existing Committed Sums in an aggregate amount equal to the proposed increase; provided that no Lender shall be obligated to agree to increase its Committed Sum; and, provided further, that each Augmenting Lender, if not already a Lender hereunder, shall be subject to the approval of the Administrative Agent (which approval shall not be unreasonably withheld) and the Borrower and each Augmenting Lender shall execute all such documentation as the Administrative Agent shall reasonably specify to evidence its Commitment Percentage and status as a Lender hereunder. Any increase in the Commitment may be made in an amount which is less than the increase requested by Borrower if Borrower is unable to arrange for Augmenting Lenders with sufficient Committed Sums. (b) On the effective date (the "INCREASE EFFECTIVE DATE") of any increase in the Commitment pursuant to this SECTION 2.4 (the "COMMITMENT INCREASE"), (i) the aggregate principal amount of the Borrowings outstanding (the "INITIAL LOANS") immediately prior to giving effect to the Commitment Increase on the Increase Effective Date shall be deemed to be paid, (ii) each Augmenting Lender that shall have been a Lender prior to the Commitment Increase shall pay to the Administrative Agent in same day funds an amount equal to the difference between (A) the product of (1) such Lender's Commitment Percentage (calculated after giving effect to the Commitment Increase) multiplied by (2) the amount of the Subsequent Borrowings (as hereinafter defined) and (B) the product of (1) such Lender's Commitment Percentage (calculated without giving effect to the Commitment Increase) multiplied by (2) the amount of the Initial Loans, (iii) each Augmenting Lender that shall not have been a Lender prior to the Commitment Increase shall pay to Administrative Agent in same day funds an amount equal to the product of (1) such Augmenting Lender's Commitment Percentage (calculated after giving effect to the Commitment Increase) multiplied by (2) the amount of the Subsequent Borrowings, and (iv) after the Administrative Agent receives the funds specified in clauses (ii) and (iii) above, the Administrative Agent shall pay to each Lender whose Committed Sum is not being increased (a "NON-INCREASING LENDER") the portion of such funds that is equal to the difference between (A) the product of (1) such Non-Increasing Lender's Commitment Percentage (calculated without giving effect to the Commitment Increase) multiplied by (2) the amount of the Initial Loans, and (B) the product of (1) such Non-Increasing Lender's Commitment Percentage (calculated after giving effect to the Commitment Increase) multiplied by (2) the amount of the Subsequent Borrowings, (v) after the effectiveness of the Commitment Increase, the Borrower shall be deemed to have made new Borrowings (the "SUBSEQUENT BORROWINGS") in an aggregate principal amount of the Initial Loans and of the types and for the Interest Periods specified in a Borrowing Request delivered to the Administrative Agent in accordance with SECTION 2.5, (vi) each Non-Increasing Lender and each Augmenting Lender shall be deemed to hold its Commitment Percentage of each Subsequent Borrowing (each calculated after giving effect to the Commitment Increase) and (vii) the Borrower shall pay each Augmenting Lender that shall have been a Lender prior to the Commitment Increase and each Non-Increasing Lender any and all accrued but unpaid interest on the Initial Loans. The deemed payments made pursuant to clause (i) above in respect of each Eurodollar Loan shall be subject to indemnification by Borrower pursuant to the provisions of SECTION 4.5 if the Increase Effective Date occurs other than on the last day of the Interest Period relating thereto and breakage costs result. (c) Increases and new Commitments created pursuant to this SECTION 2.4 shall become effective on the date specified in the notice delivered by Borrower pursuant to the first sentence of paragraph (a) above. (d) Notwithstanding the foregoing, no increase in the total Commitments (or in the Commitment of any Lender) or addition of a new Lender shall become effective under this Section unless, (i) on the date of such increase, the conditions set forth in SECTIONS 7.1 and 7.2 shall be satisfied and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Responsible Officer, and (ii) the Administrative Agent shall have received (with 17 NBPLP CREDIT AGREEMENT sufficient copies for each of the Lenders) documents consistent with those delivered on the Effective Date under SECTIONS 7.1 and 7.2 as to the partnership power and authority of Borrower to borrow hereunder after giving effect to such increase. 2.5 BORROWING PROCEDURE. The following procedures apply to all Borrowings: (a) Borrowing Request. Borrower may request a Borrowing by making or delivering a Borrowing Notice to Administrative Agent requesting that Lenders fund a Borrowing on a certain date (the "BORROWING DATE"), which Borrowing Notice (i) shall be irrevocable and binding on Borrower, (ii) shall specify the Facility or LC Subfacility, (iii) shall specify the Borrowing Date, amount, Type, and (for a Borrowing comprised of Eurodollar Rate Borrowings) Interest Period, and (iv) must be received by Administrative Agent no later than 10:00 a.m. Dallas, Texas time on the third Business Day preceding the Borrowing Date for any Eurodollar Rate Borrowing or on the requested Borrowing Date (which shall be a Business Date for any Base Rate Borrowing. Administrative Agent shall timely notify each Lender with respect to each Borrowing Notice. (b) Funding. Each Lender shall remit its Commitment Percentage for the Facility of each requested Borrowing to Administrative Agent's office in Dallas, Texas, in funds which are or will be available for immediate use by Administrative Agent by 1:00 p.m. Dallas, Texas time on the applicable Borrowing Date. Subject to receipt of such funds, Administrative Agent shall (unless to its actual knowledge any of the conditions precedent therefor have not been satisfied by Borrower or waived by the requisite Lenders under SECTION 14.11) make such funds available to Borrower by causing such funds to be deposited to Borrower's account as designated to Administrative Agent by Borrower. (c) Funding Assumed. Absent contrary written notice from a Lender, Administrative Agent may assume that each Lender has made its Commitment Percentage of the requested Borrowing available to Administrative Agent on the applicable Borrowing Date, and Administrative Agent may, in reliance upon such assumption (but shall not be required to), make available to Borrower a corresponding amount. If a Lender fails to make its Commitment Percentage of any requested Borrowing available to Administrative Agent on the applicable Borrowing Date, Administrative Agent may recover the applicable amount on demand, (i) from that Lender together with interest, commencing on the Borrowing Date and ending on (but excluding) the date Administrative Agent recovers the amount from that Lender, at an annual interest rate equal to the Federal Funds Rate, or (ii) if that Lender fails to pay its amount upon demand, then from Borrower. No Lender is responsible for the failure of any other Lender to make its Commitment Percentage of any Borrowing available as required by SECTION 2.5(b); however, failure of any Lender to make its Commitment Percentage of any Borrowing so available does not excuse any other Lender from making its Commitment Percentage of any Borrowing so available. 2.6 EXTENSION OF MATURITY DATE. (a) Borrower may, by written notice to the Administrative Agent (a "REQUEST FOR EXTENSION") given not less than 45 nor more than 60 days prior to each Anniversary Date, advise the Lenders that it requests an extension of the then effective Termination Date (the "EXISTING TERMINATION DATE") by one year, effective on the relevant Anniversary Date (the "RELEVANT ANNIVERSARY DATE"). The Administrative Agent will promptly, and in any event within five Business Days of the receipt of such Request for Extension, notify the Lenders of the contents of each such Request for Extension. (b) Each Request for Extension shall (i) be irrevocable and (ii) constitute a representation by Borrower that (A) neither any Default nor any Potential Default has occurred and is continuing and (B) the representations and warranties contained in SECTION 8 are correct on and 18 NBPLP CREDIT AGREEMENT as of the Relevant Anniversary Date, as though made on and as of such date (unless any representation and warranty expressly relates to an earlier date). (c) In the event a Request for Extension is given to the Administrative Agent as provided in SECTION 2.6(a) and the Administrative Agent notifies a Lender of the contents thereof, such Lender shall on or before the 30th day next preceding the then Relevant Anniversary Date advise the Administrative Agent in writing whether or not such Lender consents to the extension requested thereby. Each Lender shall have the right to consent to or reject such extension request in the exercise of its sole discretion. If any Lender fails so to advise the Administrative Agent, such Lender shall be deemed to have not consented to such extension. If all Lenders consent, the then effective Termination Date shall be extended by one year from the then effective Termination Date. (d) If (i) any Lender notifies the Administrative Agent that it will not consent to a Request for Extension, or (ii) all of the Lenders have not in writing expressly consented to a Request for Extension within the time period set forth in SECTION 2.6(a), then Borrower may, at its option, replace each Lender which has not agreed to the Request for Extension (a "NONEXTENDING LENDER") with another bank or financial institution approved by the Administrative Agent (which approval shall not be unreasonably withheld) (a "REPLACEMENT LENDER") and/or one or more existing Lenders by giving (not less than 10 days prior to the Relevant Anniversary Date) notice of the name of such Replacement Lender or such existing Lenders to the Administrative Agent. Each Nonextending Lender shall promptly assign all of its interests hereunder to such Replacement Lender and/or existing Lenders in accordance with SECTION 14.13. In connection with any such assignment, the Borrower shall be responsible for payment of the processing fee set forth in SECTION 14.13(b)(iii). (e) If all Lenders consent to a Request for Extension (or, if all Nonextending Lenders are replaced in accordance with this Section), then, as of the Anniversary Date, the Termination Date shall be deemed to have been extended for, and shall be the date that is, one year after the then effective Termination Date. If any Lender declines to consent to any such Request for Extension and such Lender is not replaced in accordance with this Section, then the Termination Date then in effect shall not be extended. SECTION 3 TERMS OF PAYMENT. 3.1 LOAN ACCOUNTS, NOTES, AND PAYMENTS. (a) Loan Accounts. The Principal Debt owed to each Lender shall be evidenced by one or more Loan Accounts or records maintained by such Lender in the ordinary course of business. The Loan Accounts or records maintained by Administrative Agent (including, without limitation, the Register) and each Lender shall be prima facie evidence absent manifest error of the amount of the Borrowings made by Borrower from each Lender under this Agreement (and the LC Subfacility hereunder) and the interest and principal payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of Borrower under the Loan Documents to pay any amount owing with respect to the Obligation. (b) Notes. Upon the request of any Lender, made through Administrative Agent, the Principal Debt owed to such Lender may be evidenced by a Note. (c) Payment. All payments of principal, interest, and other amounts to be made by Borrower under this Agreement and the other Loan Documents shall be made to Administrative Agent at its office in Dallas, Texas in Dollars and in funds which are or will be available for immediate use by Administrative Agent by 12:00 noon Dallas, Texas time on the day due, without setoff, deduction, or counterclaim. Payments made after 12:00 noon, Dallas, Texas, time shall be deemed made on the Business Day next following. Administrative Agent shall pay to each Lender 19 NBPLP CREDIT AGREEMENT any payment of principal, interest, or other amount to which such Lender is entitled hereunder on the same day Administrative Agent shall have received the same from Borrower; provided such payment is received by Administrative Agent prior to 12:00 noon, Dallas, Texas time, and otherwise before 12:00 noon Dallas, Texas time on the Business Day next following. (d) Payment Assumed. Unless Administrative Agent has received notice from Borrower prior to the date on which any payment is due under this Agreement that Borrower will not make that payment in full, Administrative Agent may assume that Borrower has made the full payment due and Administrative Agent may, in reliance upon that assumption, cause to be distributed to the appropriate Lender on that date the amount then due to such Lenders. If and to the extent Borrower does not make the full payment due to Administrative Agent, each Lender shall repay to Administrative Agent on demand the amount distributed to that Lender by Administrative Agent together with interest for each day from the date that Lender received payment from Administrative Agent until the date that Lender repays Administrative Agent (unless such repayment is made on the same day as such distribution), at an annual interest rate equal to the Federal Funds Rate. 3.2 INTEREST AND PRINCIPAL PAYMENTS. (a) Interest. Accrued interest on each Eurodollar Rate Borrowing is due and payable on the last day of its respective Interest Period and on the Termination Date for the Facility; provided that, if any Interest Period is greater than three months, then accrued interest is also due and payable on the three month anniversary of the date on which such Interest Period commences and on each three month anniversary thereafter, as well as on the last day of such Interest Period. Accrued interest on each Base Rate Borrowing shall be due and payable on each March 31, June 30, September 30, and December 31, and on the Termination Date for the Facility. (b) Principal Debt. The Principal Debt is due and payable on the Termination Date. 3.3 PREPAYMENTS. (a) Optional Prepayments. Except as set forth herein, after giving Administrative Agent advance written notice of the intent to prepay, Borrower may voluntarily prepay all or any part of the Principal Debt, from time to time and at any time, in whole or in part, without premium or penalty; provided that: (i) such notice must be received by Administrative Agent by 12:00 noon, Dallas, Texas time, on or before the date of prepayment of any Borrowing; (ii) each such partial prepayment must be in a minimum amount of at least $5,000,000 or a greater integral multiple of $1,000,000 thereof or such lesser amount as may be outstanding under the Facility; (iii) any Eurodollar Rate Borrowing may only be prepaid at the end of an applicable Interest Period (unless Borrower pays the amount of any Consequential Loss); and (iv) Borrower shall pay any related Consequential Loss within ten (10) days after demand therefor. Conversions under SECTION 3.11 are not prepayments. Each notice of prepayment shall specify the prepayment date, the applicable loan hereunder of Principal Debt being prepaid, and the Type of Borrowing(s) and amount(s) of such Borrowing(s) to be prepaid and shall constitute a binding obligation of Borrower to make a prepayment on the date stated therein, together with (unless such prepayment is made with respect to a Base Rate Borrowing) accrued and unpaid interest to the date of such payment on the aggregate principal amount prepaid. Any voluntary prepayment of the Principal Debt shall be applied to the Principal Debt and shall be allocated Pro Rata to each Lender. Unless a Default or Potential Default has occurred and is continuing (or would arise as a result thereof), any payment or prepayment of the Principal Debt may be reborrowed by Borrower, subject to the terms and conditions of the Loan Documents. 20 NBPLP CREDIT AGREEMENT (b) Mandatory Payments/Reductions. On any date of determination if the Commitment Usage exceeds the Commitment then in effect, then Borrower shall make a mandatory prepayment of the Principal Debt, in at least the amount of such excess, together with (x) all accrued and unpaid interest on the principal amount so prepaid and (y) any Consequential Loss arising as a result thereof; provided that, on any such reduction date, if no Principal Debt is then outstanding, but the LC Exposure exceeds the Commitment, then Borrower shall provide to Administrative Agent, for the benefit of Lenders, cash collateral in Dollars for deposit into the Letter of Credit Cash Collateral Account in an amount at least equal to 110% such excess. All mandatory prepayments or commitment reductions under the Facility hereunder shall be allocated among the Lenders in accordance with their respective Commitment Percentages under the Facility. (c) Mandatory Prepayments of Interest/Consequential Loss. All prepayments under SECTION 3.3 shall be made, together with accrued interest to the date of such prepayment on the principal amount prepaid, together with any Consequential Loss arising as a result thereof. 3.4 INTEREST OPTIONS. Except that the Eurodollar Rate may not be selected when a Default or Potential Default exists and except as otherwise provided in this Agreement, Borrowings bear interest at a rate per annum equal to the lesser of (a) as to the respective Type of Borrowing (as designated by Borrower in accordance with this Agreement), the Base Rate plus the Applicable Margin for Base Rate Borrowings, or the Eurodollar Rate plus the Applicable Margin for Eurodollar Rate Borrowings, and (b) the Maximum Rate. Each change in the Base Rate or the Maximum Rate, subject to the terms of this Agreement, will become effective, without notice to Borrower or any other Person, upon the effective date of such change. 3.5 QUOTATION OF RATES. It is hereby acknowledged that an appropriately designated Representative of Borrower may call Administrative Agent on or before the date on which a Borrowing Notice is to be delivered by Borrower in order to receive an indication of the rates then in effect, but such indicated rates shall neither be binding upon Administrative Agent or Lenders nor affect the rate of interest which thereafter is actually in effect when the Borrowing Notice is given or on the Borrowing Date. 3.6 DEFAULT RATE. While any Default exists or after acceleration, Borrower shall pay interest on the principal amount of all Borrowing at the Default Rate until paid, regardless whether such payment is made before or after entry of a judgment. 3.7 INTEREST RECAPTURE. If the designated rate applicable to any Borrowing exceeds the Maximum Rate, the rate of interest on such Borrowing shall be limited to the Maximum Rate, but any subsequent reductions in such designated rate shall not reduce the rate of interest thereon below the Maximum Rate until the total amount of interest accrued thereon equals the amount of interest which would have accrued thereon if such designated rate had at all times been in effect. In the event that at maturity (stated or by acceleration), or at final payment of the Principal Debt, the total amount of interest paid or accrued is less than the amount of interest which would have accrued if such designated rates had at all times been in effect, then, at such time and to the extent permitted by Law, Borrower shall pay an amount equal to the difference between (a) the lesser of the amount of interest which would have accrued if such designated rates had at all times been in effect and the amount of interest which would have accrued if the Maximum Rate had at all times been in effect, and (b) the amount of interest actually paid or accrued on the Principal Debt. 3.8 INTEREST CALCULATIONS. Interest will be calculated on the basis of actual number of days (including the first day but excluding the last day) elapsed but computed as if each calendar year consisted of 360 days in the case of an Eurodollar Rate Borrowing (unless the calculation would result in an interest rate greater than the Maximum Rate, in which event interest will be calculated on the basis of a year of 365 or 366 days, as the case may be) and 365 or 366 days, as the case may be, in the case of a Base Rate Borrowing. All interest rate determinations and calculations by Administrative Agent are conclusive and binding absent manifest error. 21 NBPLP CREDIT AGREEMENT 3.9 MAXIMUM RATE. Regardless of any provision contained in any Loan Document, neither Administrative Agent nor any Lender shall ever be entitled to contract for, charge, take, reserve, receive, or apply, as interest on all or any part of the Obligation, any amount in excess of the Maximum Rate, and, if Lenders ever do so, then such excess shall be deemed a partial prepayment of principal and treated hereunder as such and any remaining excess shall be refunded to Borrower. In determining if the interest paid or payable exceeds the Maximum Rate, Borrower and Lenders shall, to the maximum extent permitted under applicable Law, (a) treat all Borrowings as but a single extension of credit (and Lenders and Borrower agree that such is the case and that provision herein for multiple Borrowings is for convenience only), (b) characterize any nonprincipal payment as an expense, fee, or premium rather than as interest, (c) exclude voluntary prepayments and the effects thereof, and (d) amortize, prorate, allocate, and spread the total amount of interest throughout the entire contemplated term of the Obligation. However, if the Obligation is paid and performed in full prior to the end of the full contemplated term thereof, and if the interest received for the actual period of existence thereof exceeds the Maximum Amount, Lenders shall refund such excess, and, in such event, Lenders shall not, to the extent permitted by Law, be subject to any penalties provided by any Laws for contracting for, charging, taking, reserving, or receiving interest in excess of the Maximum Amount. If the Laws of the State of Texas are applicable for purposes of determining the "Maximum Rate" or the "Maximum Amount," then those terms mean the "weekly ceiling" from time to time in effect under Texas Finance Code Section 303.305, as amended. Borrower agrees that Chapter 346 of the Texas Finance Code, as amended (which regulates certain revolving credit loan accounts and revolving tri-party accounts), does not apply to the Obligation. 3.10 INTEREST PERIODS. When Borrower requests any Eurodollar Rate Borrowing, Borrower may elect the interest period (each an "INTEREST PERIOD") applicable thereto, which shall be, at Borrower's option and subject to availability, one, two, three, or six months; provided, however, that: (a) the initial Interest Period for a Eurodollar Rate Borrowing shall commence on the date of such Borrowing (including the date of any conversion thereto), and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period applicable thereto expires; (b) if any Interest Period for a Eurodollar Rate Borrowing begins on a day for which there is no numerically corresponding Business Day in the calendar month at the end of such Interest Period, such Interest Period shall end on the next Business Day immediately following what otherwise would have been such numerically corresponding day in the calendar month at the end of such Interest Period (unless such date would be in a different calendar month from what would have been the month at the end of such Interest Period, or unless there is no numerically corresponding day in the calendar month at the end of the Interest Period; whereupon, such Interest Period shall end on the last Business Day in the calendar month at the end of such Interest Period); (c) no Interest Period may be chosen with respect to any portion of the Principal Debt which would extend beyond the scheduled repayment date (including any dates on which mandatory prepayments are required to be made) for such portion of the Principal Debt; and (d) no more than an aggregate of five (5) Interest Periods shall be in effect at one time. 3.11 CONVERSIONS. Borrower may (a) convert a Eurodollar Rate Borrowing on the last day of the applicable Interest Period to a Base Rate Borrowing, (b) convert a Base Rate Borrowing at any time to a Eurodollar Rate Borrowing, and (c) elect a new Interest Period (in the case of a Eurodollar Rate Borrowing), by giving a Conversion Notice of such intent to Administrative Agent no later than 10:00 a.m. Dallas, Texas time on the third Business Day prior to the date of conversion or the last day of the Interest Period, as the case may be (in the case of a conversion to a Eurodollar Rate Borrowing or an election of a new Interest Period), and no later than 10:00 a.m. Dallas, Texas time on the last Business Day of the Interest Period (in the case of a conversion to a Base Rate Borrowing); provided that, the principal amount converted to, or continued as, a Eurodollar Rate Borrowing shall be in an amount not less than $5,000,000 or a greater integral multiple of $1,000,000 (or such lesser amount as may be outstanding under the Facility). Administrative Agent shall timely notify each Lender with respect to each Conversion Notice. Absent Borrower's Conversion Notice or election of a new Interest Period, a Eurodollar Rate Borrowing shall be deemed converted to a Base Rate Borrowing effective as of the expiration of the Interest Period applicable 22 NBPLP CREDIT AGREEMENT thereto. No Eurodollar Rate Borrowing may be either made or continued as a Eurodollar Rate Borrowing, and no Base Rate Borrowing may be converted to a Eurodollar Rate Borrowing, if the interest rate for such Eurodollar Rate Borrowing would exceed the Maximum Rate. The right to convert from a Base Rate Borrowing to a Eurodollar Rate Borrowing, or to continue as a Eurodollar Rate Borrowing shall not be available during the occurrence of a Default or Potential Default. 3.12 ORDER OF APPLICATION. (a) No Default. If no Default or Potential Default exists and if no order of application is otherwise specified in SECTION 3.3 or otherwise in the Loan Documents, payments and prepayments of the Obligation shall be applied first to fees, second to accrued interest then due and payable on the Principal Debt, and then to the remaining Obligation in the order and manner as Borrower may direct. (b) Default. If a Default or Potential Default exists (or if Borrower fails to give directions as permitted under SECTION 3.12(a)), any payment or prepayment (including proceeds from the exercise of any Rights) shall be applied to the Obligation in the following order: (i) to the ratable payment of all fees, expenses, and indemnities for which Agents or Lenders have not been paid or reimbursed in accordance with the Loan Documents (as used in this SECTION 3.12(b)(i), a "ratable payment" for any Lender or any Agent shall be, on any date of determination, that proportion which the portion of the total fees, expenses, and indemnities owed to such Lender or such Agent bears to the total aggregate fees and indemnities owed to all Lenders and Agents on such date of determination); (ii) to the ratable payment of accrued and unpaid interest on the Principal Debt (as used in this SECTION 3.12(b)(ii), "ratable payment" means, for any Lender, on any date of determination, that proportion which the accrued and unpaid interest on the Principal Debt owed to such Lender bears to the total accrued and unpaid interest on the Principal Debt owed to all Lenders); (iii) to the ratable payment of any reimbursement obligation with respect to any LC issued pursuant to the Agreement which is due and payable and which remains unfunded by any Borrowing under the Facility; provided that, such payments shall be allocated ratably among the issuer of the LC and the Lenders which have funded their participations in such LC; (iv) to the ratable payment of the Principal Debt (as used in this SECTION 3.12(b)(iv), "ratable payment" means for any Lender, on any date of determination, that proportion which the Principal Debt owed to such Lender bears to the Principal Debt owed to all Lenders); (v) to provide cash collateral in an amount equal to 110% of the LC Exposure then existing in accordance with SECTION 2.2(g); and (vi) to the payment of the remaining Obligation in the order and manner Required Lenders deem appropriate. Subject to the provisions of SECTION 12 and provided that Administrative Agent shall not in any event be bound to inquire into or to determine the validity, scope, or priority of any interest or entitlement of any Lender and may suspend all payments or seek appropriate relief (including, without limitation, instructions from Required Lenders or an action in the nature of interpleader) in the event of any doubt or dispute as to any apportionment or distribution contemplated hereby, Administrative Agent shall promptly distribute such amounts to each Lender in accordance with the Agreement and the related Loan Documents. 3.13 SHARING OF PAYMENTS, ETC. If any Lender shall obtain any payment or prepayment with respect to the Obligation (whether voluntary, involuntary, or otherwise, including, without limitation, as a result of exercising its Rights under SECTION 3.14) which is in excess of its share of any such payment in accordance with the relevant Rights of the Lenders under the Loan Documents, then such Lender shall purchase from the other Lenders such participations as shall be necessary to cause such purchasing Lender to share the excess payment with each other Lender in accordance with the relevant Rights under the Loan Documents. If all or any portion of such excess payment is subsequently recovered from such purchasing Lender, then the purchase shall be rescinded and the purchase price restored to the extent of such recovery. Borrower agrees that any Lender purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by Law, exercise all of its Rights of payment (including the Right of 23 NBPLP CREDIT AGREEMENT offset) with respect to such participation as fully as if such Lender were the direct creditor of Borrower in the amount of such participation. 3.14 OFFSET. If a Default exists, each Lender shall be entitled to exercise (for the benefit of all Lenders in accordance with SECTION 3.13) the Rights of offset and/or banker's Lien against each and every account and other property, or any interest therein, which any Loan Party may now or hereafter have with, or which is now or hereafter in the possession of, such Lender to the extent of the full amount of the Obligation. 3.15 BOOKING BORROWINGS. To the extent permitted by Law, any Lender may make, carry, or transfer its Borrowings at, to, or for the account of any of its branch offices or the office of any of its Affiliates; provided that, no Affiliate shall be entitled to receive any greater payment under SECTION 4 than the transferor Lender would have been entitled to receive with respect to such Borrowings. In the event a Lender shall transfer its Borrowings to or make its Borrowings from any office other than that designated on SCHEDULE 13.3, it shall notify the Administrative Agent and the Administrative Agent shall provide a copy of such notice to Borrower; provided, however, that the failure of a Lender or of Administrative Agent to provide notice under this Section shall not relieve Borrower from any obligations under this Agreement. SECTION 4 CHANGE IN CIRCUMSTANCES. 4.1 INCREASED COST AND REDUCED RETURN. (a) Changes in Law. If, after the date hereof, the adoption of any applicable Law or any change in any applicable Law or any change in the interpretation or administration thereof by any Governmental Authority, or compliance by any Lender (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) of any such Governmental Authority: (i) shall subject such Lender (or its Applicable Lending Office) to any Tax or other charge with respect to any Eurodollar Rate Borrowing, its Notes, or its obligation to loan Eurodollar Rate Borrowings, or change the basis of taxation of any amounts payable to such Lender (or its Applicable Lending Office) under the Loan Documents in respect of any Eurodollar Rate Borrowings (other than Taxes imposed on the overall net income of such Lender by the jurisdiction in which such Lender has its principal office or such Applicable Lending Office); (ii) shall impose, modify, or deem applicable any reserve, special deposit, assessment, or similar requirement relating to any extensions of credit or other assets of, or any deposits with or other liabilities or commitments of, such Lender (or its Applicable Lending Office), including the commitment of such Lender hereunder; or (iii) shall impose on such Lender (or its Applicable Lending Office) or the London interbank market any other condition affecting the Loan Documents or any of such extensions of credit or liabilities or commitments; and the result of any of the foregoing is to increase the cost to such Lender (or its Applicable Lending Office) of making, converting into, continuing, or maintaining any Eurodollar Rate Borrowings or to reduce any sum received or receivable by such Lender (or its Applicable Lending Office) under the Loan Documents with respect to any Eurodollar Rate Borrowing, then Borrower shall pay to such Lender on demand such amount or amounts as will compensate such Lender for such increased cost or reduction. If any Lender requests compensation by Borrower under this SECTION 4.1(a), Borrower may, by notice to such Lender (with a copy to Administrative Agent), suspend the obligation of such Lender to loan or continue Borrowings of the Type with respect to which such compensation is requested, or to convert Borrowings of any other Type into Borrowings of such Type, until the event or condition giving rise to such request ceases to be in effect (in which 24 NBPLP CREDIT AGREEMENT case the provisions of SECTION 4.4 shall be applicable); provided, that such suspension shall not affect the Right of such Lender to receive the compensation so requested. (b) Capital Adequacy. If, after the date hereof, any Lender shall have determined that the adoption of any applicable Law regarding capital adequacy or any change therein or in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender's obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change, request, or directive (taking into consideration its policies with respect to capital adequacy), then from time to time upon demand Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. (c) Changes in Applicable Lending Office. Compensation Statement. Each Lender shall promptly notify Borrower and Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming compensation under this Section shall furnish to Borrower and Administrative Agent a statement setting forth the additional amount or amounts to be paid to it hereunder and calculations in reasonable detail which shall be conclusive in the absence of manifest error. In determining such amount, such Lender may use any reasonable averaging and attribution methods. Borrower shall not be obligated to compensate any Lender pursuant to this SECTION 4.1 for any amounts attributable to a period more than 120 days prior to the giving of notice by such Lender to Borrower of its request for compensation under this SECTION 4.1. 4.2 LIMITATION ON TYPES OF LOANS. If on or prior to the first day of any Interest Period for any Eurodollar Rate Borrowing: (a) Inability to Determine Eurodollar Rate. Administrative Agent determines (which determination shall be conclusive) that by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period; or (b) Cost of Funds. Required Lenders determine (which determination shall be conclusive) and notify Administrative Agent that the Eurodollar Rate will not adequately and fairly reflect the cost to the Lenders of funding Eurodollar Rate Borrowings for such Interest Period; then Administrative Agent shall give Borrower prompt notice thereof specifying the relevant amounts or periods, and so long as such condition remains in effect, the Lenders shall be under no obligation to fund additional Eurodollar Rate Borrowings, continue Eurodollar Rate Borrowings, or to convert Base Rate Borrowings into Eurodollar Rate Borrowings, and Borrower shall, on the last day(s) of the then current Interest Period(s) for the outstanding Eurodollar Rate Borrowings, either prepay such Borrowings or convert such Borrowings into Base Rate Borrowings in accordance with the terms of this Agreement. 4.3 ILLEGALITY. Notwithstanding any other provision of the Loan Documents, in the event that it becomes unlawful for any Lender or its Applicable Lending Office to make, maintain, or fund Eurodollar Rate Borrowings hereunder, then such Lender shall promptly notify Borrower thereof and such Lender's obligation to make or continue Eurodollar Rate Borrowings and to convert other Base Rate Borrowings into Eurodollar Rate Borrowings shall be suspended until such time as such Lender may again make, maintain, and fund Eurodollar Rate Borrowings (in which case the provisions of SECTION 4.4 shall be applicable). 25 NBPLP CREDIT AGREEMENT 4.4 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to fund Eurodollar Rate Borrowings or to continue, or to convert Base Rate Borrowings into Eurodollar Rate Borrowings, shall be suspended pursuant to SECTIONS 4.1, 4.2, or 4.3 hereof, such Lender's Eurodollar Rate Borrowings shall be automatically converted into Base Rate Borrowings on the last day(s) of the then current Interest Period(s) for Eurodollar Rate Borrowings (or, in the case of a conversion required by SECTION 4.3 hereof, on such earlier date as such Lender may specify to Borrower with a copy to Administrative Agent) and, unless and until such Lender gives notice as provided below that the circumstances specified in SECTIONS 4.1, 4.2, or 4.3 hereof that gave rise to such conversion no longer exist: (a) to the extent that such Lender's Eurodollar Rate Borrowings have been so converted, all payments and prepayments of principal that would otherwise be applied to such Lender's Eurodollar Rate Borrowings shall be applied instead to its Base Rate Borrowings; and (b) all Borrowings that would otherwise be made or continued by such Lender as Eurodollar Rate Borrowings shall be made or continued instead as Base Rate Borrowings, and all Borrowings of such Lender that would otherwise be converted into Eurodollar Rate Borrowings shall be converted instead into (or shall remain as) Base Rate Borrowings. If such Lender gives notice to Borrower (with a copy to Administrative Agent) that the circumstances specified in SECTIONS 4.1, 4.2, or 4.3 hereof that gave rise to the conversion of such Lender's Eurodollar Rate Borrowings pursuant to this SECTION 4.4 no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when Eurodollar Rate Borrowings made by other Lenders are outstanding, such Lender's Base Rate Borrowings shall be automatically converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding Eurodollar Rate Borrowings, to the extent necessary so that, after giving effect thereto, all Eurodollar Rate Borrowings held by the Lenders and by such Lender are held pro rata (as to principal amounts, Types, and Interest Periods) in accordance with their respective Committed Sums. 4.5 COMPENSATION. Upon the request of any Lender, Borrower shall pay to such Lender such amount or amounts as shall be sufficient (in the reasonable opinion of such Lender) to compensate it for any loss, cost, or expense (excluding loss of anticipated profits) incurred by it as a result of: (a) any payment, prepayment, or conversion of a Eurodollar Rate Borrowing for any reason (including, without limitation, the acceleration of the loan pursuant to SECTION 12.1) on a date other than the last day of the Interest Period for such Borrowing; or (b) any failure by Borrower for any reason (including, without limitation, the failure of any condition precedent specified in SECTION 7.2 to be satisfied) to borrow, convert, continue, or prepay a Eurodollar Rate Borrowing on the date for such borrowing, conversion, continuation, or prepayment specified in the relevant Borrowing Notice, prepayment, continuation, or conversion under this Agreement. 4.6 TAXES. (a) General. Any and all payments by Borrower to or for the account of any Lender or Administrative Agent hereunder or under any other Loan Document shall be made free and clear of and without deduction for any and all present or future Taxes, excluding, in the case of each Lender and Administrative Agent, Taxes imposed on its income and franchise Taxes imposed on it by the jurisdiction under the laws of which such Lender (or its Applicable Lending Office) or Administrative Agent (as the case may be) is organized, or any political subdivision thereof. If Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable under any Loan Document to any Lender or Administrative Agent, (i) the sum payable shall be increased 26 NBPLP CREDIT AGREEMENT as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this SECTION 4.6) such Lender or Administrative Agent receives an amount equal to the sum it would have received had no such deductions been made, (ii) Borrower shall make such deductions, (iii) Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law, and (iv) Borrower shall furnish to Administrative Agent, at its address listed in SCHEDULE 2.1, the original or a certified copy of a receipt evidencing payment thereof. (b) Stamp and Documentary Taxes. In addition, Borrower agrees to pay any and all present or future stamp or documentary taxes and any other excise or property taxes or charges or similar levies which arise from any payment made under any Loan Document or from the execution or delivery of, or otherwise with respect to, any Loan Document (hereinafter referred to as "OTHER TAXES"). (c) Indemnification for Taxes. Borrower agrees to indemnify each Lender and Administrative Agent for the full amount of Taxes, excluding, in the case of each Lender and Administrative Agent, Taxes imposed on its income and franchise Taxes imposed on it by the jurisdiction under the laws of which such Lender (or its Applicable Lending Office) or Administrative Agent (as the case may be) is organized, or any political subdivision thereof and Other Taxes (including, without limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this SECTION 4.6) paid by such Lender or Administrative Agent (as the case may be) and any liability (including penalties, interest, and expenses) arising therefrom or with respect thereto. (d) Withholding Tax Forms. Each Lender organized under the Laws of a jurisdiction outside the United States, on or prior to the Closing Date in the case of each Lender listed on the signature pages hereof and on or prior to the date on which it becomes a Lender in the case of each other Lender, and from time to time thereafter if requested in writing by Borrower or Administrative Agent (but only so long as such Lender remains lawfully able to do so), shall provide Borrower and Administrative Agent with (i) if such Lender is a "bank" within the meaning of Section 881(c)(3)(A) of the Code, Internal Revenue Service Form 1001 or 4224, as appropriate, or any successor form prescribed by the Internal Revenue Service, certifying that such Lender is entitled to benefits under an income tax treaty to which the United States is a party which reduces the rate of withholding tax on payments of interest or certifying that the income receivable pursuant to the Loan Documents is effectively connected with the conduct of a trade or business in the United States, or (ii) if such Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and intends to claim an exemption from United States withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of "portfolio interest," a Form W-8, or any successor form prescribed by the Internal Revenue Service, and a certificate representing that such Lender is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of Borrower, and is not a controlled foreign corporation related to Borrower (within the meaning of Section 864(d)(4) of the Code). Each Lender which so delivers a W-8, Form 1001, or 4224 further undertakes to deliver to Borrower and Administrative Agent additional forms (or a successor form) on or before the date such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form so delivered by it, in each case certifying that such Lender is entitled to receive payments from Borrower under any Loan Document without deduction or withholding (or at a reduced rate of deduction or withholding) of any United States federal income taxes, unless an event (including without limitation any change in treaty, law, or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it, and such Lender advises Borrower and Administrative Agent that it is not capable of receiving such payments without any deduction or withholding of United States federal income tax. 27 NBPLP CREDIT AGREEMENT (e) Failure to Provide Withholding Forms; Changes in Tax Laws. For any period with respect to which a Lender has failed to provide Borrower and Administrative Agent with the appropriate form pursuant to SECTION 4.6(d) (unless such failure is due to a change in Law occurring subsequent to the date on which a form originally was required to be provided), such Lender shall not be entitled to indemnification under SECTION 4.6(a) or 4.6(b) with respect to Taxes imposed by the United States; provided, however, that should a Lender, which is otherwise exempt from or subject to a reduced rate of withholding tax, become subject to Taxes because of its failure to deliver a form required hereunder, Borrower shall take such steps as such Lender shall reasonably request to assist such Lender to recover such Taxes. (f) Change in Applicable Lending Office. If Borrower is required to pay additional amounts to or for the account of any Lender pursuant to this SECTION 4.6, then such Lender will agree to use reasonable efforts to change the jurisdiction of its Applicable Lending Office so as to eliminate or reduce any such additional payment which may thereafter accrue if such change, in the judgment of such Lender, is not otherwise disadvantageous to such Lender. (g) Tax Payment Receipt. Within thirty (30) days after the date of any payment of Taxes, Borrower shall furnish to Administrative Agent the original or a certified copy of a receipt evidencing such payment. (h) Survival. Without prejudice to the survival of any other agreement of Borrower hereunder, the agreements and obligations of Borrower contained in this SECTION 4.6 shall survive the termination of the Commitment and the payment in full of the Obligation. SECTION 5 FEES. 5.1 TREATMENT OF FEES. Except as otherwise provided by Law, the fees described in this SECTION 5: (a) do not constitute compensation for the use, detention, or forbearance of money, (b) are in addition to, and not in lieu of, interest and expenses otherwise described in the Loan Documents, (c) shall be payable in accordance with SECTION 3.1(c), (d) shall be non-refundable (subject to the provisions of SECTION 3.9, if applicable), (e) shall, to the fullest extent permitted by Law, bear interest, if not paid when due, at the Default Rate, and (f) shall be calculated on the basis of actual number of days (including the first day but excluding the last day) elapsed, but computed as if each calendar year consisted of 360 days, unless such computation would result in interest being computed in excess of the Maximum Rate in which event such computation shall be made on the basis of a year of 365 or 366 days, as the case may be. 5.2 FEES OF ADMINISTRATIVE AGENT AND ARRANGER. Borrower shall pay to Administrative Agent and Arranger, as the case may be, solely for their respective accounts, the fees described in that certain separate letter agreement dated as of April 18, 2000, among Borrower, Administrative Agent, and Arranger. 5.3 COMMITMENT FEES. Following the Closing Date, Borrower shall pay to Administrative Agent, for the ratable account of Lenders, a commitment fee, calculated daily from the Closing Date but payable in installments in arrears each March 31, June 30, September 30, and December 31 and on the Termination Date for the Facility, commencing June 30, 2000. On any day of determination, the commitment fee shall be an amount equal to the Applicable Margin for Commitment Fees multiplied by the amount by which (a) the Commitment on such day exceeds (b) the Commitment Usage on such day. Each such installment shall be calculated in accordance with SECTION 5.1(f). Solely for the purposes of this SECTION 5.3, "ratable" shall mean, for any period of determination, with respect to any Lender, that proportion which (x) the average daily unused Committed Sum of such Lender during such period bears to (y) the amount of the average daily unused Commitment during such period. 5.4 LC FEES. As an inducement for the issuance (including, without limitation, any extension) of each LC, Borrower agrees to pay to Administrative Agent: 28 NBPLP CREDIT AGREEMENT (a) For the account of each Lender, according to each Lender's Commitment Percentage under the Facility, a letter of credit fee payable quarterly in arrears for so long as each such LC is outstanding, on the last Business Day of each March, June, September, and December and on the expiry date of the LC. The issuance fee for each LC or any extension thereof shall be in an amount equal to the product of (a) the letter of credit fee set forth in the definition of Applicable Amount in effect on the date of determination of such fee (calculated on a per annum basis) multiplied by (b) the stated amount of such LC. If there is any change in the Applicable Margin during any period, the stated amount of such LC shall be multiplied by the Applicable Margin separately for each such period that such Applicable Margin was in effect. (b) For the account of Administrative Agent, as the issuer of LCs, payable on the date of issuance of any LC (or any extension thereof) a fronting fee equal to one-eighth of one percent (0.125%) of the face amount of such LC (or extensions thereof). In addition, Borrower shall pay to Administrative Agent, for its individual account, standard administrative charges for LC amendments. 5.5 UTILIZATION FEE. Borrower shall pay to the Administrative Agent for the Pro Rata account of the Lenders a utilization fee equal to the amount set forth in the definition of Applicable Amount multiplied by the Commitment Usage hereunder, as follows: (1) from the Closing Date to and including the Revolving Termination Date (as defined in the 364-Day Agreement), said fee shall be payable for each day that the Commitment Usage hereunder plus the Commitment Usage as defined under the 364-Day Agreement exceeds thirty-three percent (33.0%) of the Commitment hereunder plus the Commitment under the 364-Day Agreement, and (2) from and after such Revolving Termination Date to and including the Termination Date, said fee shall be payable for each day that the Commitment Usage hereunder exceeds thirty-three percent (33.0%) of the Commitment hereunder. Such utilization fee shall accrue from the Closing Date to the Termination Date for the Facility and shall be due and payable each March 31, June 30, September 30 and December 31 and on the Termination Date for the Facility, commencing June 30, 2000. Each such installment shall be calculated in accordance with SECTION 5.1(f). SECTION 6. GUARANTY. 6.1 GUARANTY. As an inducement to Agents and Lenders to enter into this Agreement, Borrower shall cause Intermediate Partnership to execute and deliver to Administrative Agent a Guaranty substantially in the form and upon the terms of EXHIBIT C, providing for the guaranty of payment and performance of the Obligation. SECTION 7 CONDITIONS PRECEDENT. 7.1 CONDITIONS PRECEDENT TO CLOSING. This Agreement shall not become effective, and Lenders shall not be obligated to advance any Borrowing or issue any LC, unless Administrative Agent has received all of the agreements, documents, instruments, and other items described on SCHEDULE 7.1. 7.2 CONDITIONS PRECEDENT TO EACH BORROWING. In addition to the conditions stated in SECTION 7.1, Lenders will not be obligated to fund (as opposed to continue or convert) any Borrowing, and Administrative Agent will not be obligated to issue any LC, as the case may be, unless on the date of such Borrowing or issuance (and after giving effect thereto), as the case may be: (a) Administrative Agent shall have timely received therefor a Borrowing Notice or a LC Request (together with the applicable LC Agreement), as the case may be; (b) Administrative Agent shall have received the LC fronting fees provided for in SECTION 5.4(b) hereof; (c) all of the representations and warranties of any Loan Party set forth in the Loan Documents are true and correct in all material respects (except such representations and warranties which expressly refer to an earlier date, which are true and correct in all material respects as of such earlier date); (d) no Default or Potential Default shall have occurred and be continuing; and (e) the funding of such 29 NBPLP CREDIT AGREEMENT Borrowings and issuance of such LC, as the case may be, is permitted by Law. Each Borrowing Notice and LC Request delivered to Administrative Agent shall constitute the representation and warranty by Borrower to Administrative Agent that, as of the Borrowing Date or the date of issuance of the request LC, as the case may be, the statements above are true and correct in all respects. Each condition precedent in this Agreement is material to the transactions contemplated in this Agreement, and time is of the essence in respect of each thereof. Subject to the prior approval of Required Lenders, Lenders may fund any Borrowing, and Administrative Agent may issue any LC, without all conditions being satisfied, but, to the extent permitted by Law, the same shall not be deemed to be a waiver of the requirement that each such condition precedent be satisfied as a prerequisite for any subsequent funding or issuance, unless Required Lenders specifically waive each such item in writing. SECTION 8 REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Administrative Agent and Lenders as follows: 8.1 PURPOSE OF CREDIT FACILITY. (a) Borrower will use all proceeds of Borrowings for one or more of the following (or will loan such proceeds to, or make capital contributions to, Intermediate Partnership to so use such proceeds) (i) to repay the Debt existing under the Existing Credit Agreements; (ii) to finance capital expenditures; (iii) for investments permitted hereunder; (iv) for working capital; and (v) for general business purposes. No proceeds of any Borrowing will be used to make any distribution with respect to the Limited Partnership Units or General Partners' interests in Borrower, or to make any distribution with respect to partnership interests in Intermediate Partnership. (b) Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any "margin stock" within the meaning of Regulation U. No part of the proceeds of any Borrowing will be used, directly or indirectly, for a purpose which violates any Law, including, without limitation, the provisions of Regulations T, U, or X (as enacted by the Board of Governors of the Federal Reserve System, as amended). 8.2 EXISTENCE, GOOD STANDING, AUTHORITY, AND AUTHORIZATIONS. Each of the Loan Parties, each Subsidiary thereof is duly organized, validly existing, and in good standing under the Laws of its jurisdiction of organization. Each of the Loan Parties and its Subsidiaries is duly qualified to transact business and is in good standing in each jurisdiction where the nature and extent of its business and properties require the same, except to the extent failure to so qualify or be in good standing is not reasonably likely, in the aggregate, to result in a Material Adverse Event. Each of the Loan Parties, and each Subsidiary thereof, possesses all Authorizations necessary or required in the conduct of its respective business(es), except to the extent that failure to possess such Authorization(s) is not reasonably likely, in the aggregate, to result in a Material Adverse Event. No authorization, consent, approval, waiver, license, or formal exemptions from, nor any filing, declaration, or registration with, any Governmental Authority (federal, state, or local), non-governmental entity, or Person under the terms of contracts or otherwise, is required by reason of or in connection with the execution and performance of the Loan Documents by the Loan Parties or their respective Subsidiaries. 8.3 SUBSIDIARIES. Borrower has no direct Subsidiaries except as disclosed on SCHEDULE 8.3. As of the Closing Date, Intermediate Partnership has no Subsidiaries except as disclosed on SCHEDULE 8.3. As of the Closing Date, the number and percentage of shares or partnership and other equity interests in each Subsidiary, and the ownership thereof, are accurately set forth on SCHEDULE 8.3 attached hereto. All such partnership and other equity interests are validly issued under the terms of the applicable Partnership Agreements and applicable Law. 30 NBPLP CREDIT AGREEMENT 8.4 AUTHORIZATION AND NO CONTRAVENTION. The execution and delivery by each Loan Party of each Loan Document to which it is a party and the performance by such Loan Party of its obligations thereunder (a) are within its partnership power; (b) will have been duly authorized by all necessary partnership action when such Loan Document is executed and delivered, (c) require no action by or in respect of, or filing with, any Governmental Authority, which action or filing has not been taken or made on or prior to the Closing Date (or if later, the date of execution and delivery of such Loan Document), (d) will not violate any provision of the partnership agreement of such Loan Party, (e) will not violate any provision of Law applicable to it, (f) will not violate any material written or oral agreements, contracts, commitments, or understandings to which it is a party, other than such violations which could not be a Material Adverse Event, or (g) will not result in the creation or imposition of any Lien on any asset of any Loan Party. 8.5 BINDING EFFECT. Upon execution and delivery by all parties thereto, each Loan Document will constitute a legal, valid, and binding obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable Debtor Relief Laws and general principles of equity. 8.6 FINANCIAL STATEMENTS. (a) The Current Financials were prepared in accordance with GAAP and present fairly, in all material respects, the consolidated financial condition, results of operations, and cash flows of the Loan Parties and Subsidiaries thereof covered thereby ("REPORTING ENTITIES") as of and for the portion of the fiscal year ending on the date or dates thereof (subject only to normal year-end audit adjustments for interim statements). There were no material liabilities, direct or indirect, fixed or contingent, of the Reporting Entities as of the date or dates of the Current Financials which are required under GAAP to be reflected therein or in the notes thereto, and are not so reflected. (b) Since December 31, 1999, there has been no Material Adverse Event. 8.7 LITIGATION, CLAIMS, INVESTIGATIONS. No Loan Party is subject to, or aware of the threat of, any Litigation which is reasonably likely to be determined adversely to any Loan Party, or any Subsidiary thereof, and, if so adversely determined, could (individually or collectively with other Litigation) be a Material Adverse Event. There are no formal complaints, suits, claims, investigations, or proceedings initiated at or by any Governmental Authority pending or threatened by or against any Loan Party, or any Subsidiary thereof, which could reasonably be expected to result in a Material Adverse Event, nor any judgments, decrees, or orders of any Governmental Authority outstanding against any Loan Party, or any Subsidiary thereof, that could reasonably be expected to result in a Material Adverse Event. 8.8 TAXES. All Tax returns of each Loan Party and each Subsidiary thereof required to be filed have been filed (or extensions have been granted) prior to delinquency, and all Taxes imposed upon each Loan Party and each Subsidiary thereof which are due and payable have been paid prior to delinquency, other than Taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. 8.9 ENVIRONMENTAL MATTERS. No Loan Party (a) knows of any environmental condition or circumstance, such as the presence or Release of any Hazardous Substance, on any property presently or previously owned by any Loan Party and any Subsidiary thereof that could reasonably be expected to be a Material Adverse Event, (b) knows of any violation by any Loan Party, any Subsidiary thereof of any Environmental Law, except for such violations that could not reasonably be expected to be a Material Adverse Event, or (c) knows that any Loan Party and any Subsidiary thereof is under any obligation to remedy any violation of any Environmental Law, except for such obligations that could not reasonably be expected to be a Material Adverse Event. 8.10 EMPLOYEE BENEFIT PLANS. (a) No Employee Plan has incurred an "accumulated funding deficiency" (as defined in Section 302 of ERISA and Section 412 of the Code), (b) no Loan Party or any Subsidiary or ERISA Affiliate thereof has incurred material liability to the PBGC or with respect to an 31 NBPLP CREDIT AGREEMENT Employee Plan, which liability is currently due and remains unpaid under Title IV of ERISA, (c) each Employee Plan subject to ERISA and the Code complies in all material respects, both in form and operation, with ERISA and the Code, (d) no ERISA Event has occurred or is reasonably expected to occur with respect to any Employee Plan or Multiemployer Plan which, individually or collectively with all other ERISA Events then existing, could reasonably be expected to be a Material Adverse Event, (e) the present value of all accrued benefits under each Employee Plan (based on actuarial assumptions used for funding purposes in the most recent actuarial valuation prepared by the Employee Plan's actuary with respect to such Employee Plan) did not, as of the last annual actuarial valuation date for such Employee Plan, exceed the then-current value of the assets of such Employee Plan in such an amount which could reasonably be expected to result in a Material Adverse Event, and (f) the present value of vested benefits under each Employee Plan (based on PBGC actuarial assumptions used for plan termination), does not exceed the value of the assets of such Employee Plan in such an amount which could reasonably be expected to result in a Material Adverse Event. 8.11 PROPERTIES; LIENS. Each Loan Party has good and marketable title to all its property reflected on the Current Financials and each of its Subsidiaries has sufficient title to permit such Subsidiary to operate its facilities. Except for Permitted Liens, there is no Lien on any property of any Loan Party, and the execution, delivery, performance, or observance of the Loan Documents will not require or result in the creation of any Lien on such property. 8.12 GOVERNMENT REGULATIONS. No Loan Party or Subsidiary thereof is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the Federal Power Act, as amended, or any other Law (other than Regulations T, U, and X of the Board of Governors of the Federal Reserve System and the requirements of any public service commission) which regulates the incurrence of Debt. 8.13 TRANSACTIONS WITH AFFILIATES. No Loan Party or any Subsidiary thereof is a party to a material transaction with any of its Affiliates (excluding transactions between or among such Loan Parties or any Subsidiary thereof), other than transactions upon fair and reasonable terms not materially less favorable than such entity could obtain or could become entitled to in an arm's-length transaction with a Person that was not its Affiliate. 8.14 MATERIAL AGREEMENTS. No Loan Party or any Subsidiary thereof is in default with respect to any material agreements, contracts, commitments, or understandings which could reasonably be expected to be a Material Adverse Event. 8.15 INSURANCE. Each Loan Party and each Subsidiary thereof maintains, with financially sound, responsible, and reputable insurance companies or associations, insurance concerning its properties and businesses against such casualties and contingencies and of such types and in such amounts (and with co-insurance and deductibles) as is customary in the case of same or similar businesses. 8.16 COMPLIANCE WITH LAWS. No Loan Party or any Subsidiary thereof is in violation of any Laws (including, without limitation, Environmental Laws), other than such violations which could not, individually or collectively, reasonably be expected to be a Material Adverse Event. No Loan Party or any Subsidiary thereof has received notice alleging any noncompliance with any Laws, except for such noncompliance which no longer exists, or which could not reasonably be expected to be a Material Adverse Event. 8.17 REGULATION U. "Margin Stock" (as defined in Regulation U) constitutes less than 25% of those assets of the Loan Parties which are subject to any limitation on sale, pledge, or other restrictions hereunder. 8.18 FULL DISCLOSURE. All information heretofore furnished by any Loan Party to any Lender or Administrative Agent in connection with the Loan Documents was, and all such information hereafter 32 NBPLP CREDIT AGREEMENT furnished by any Loan Party to any Lender or Administrative Agent will be, taken as a whole, true and accurate in all material respects or based on reasonable estimates on the date as of which such information is stated or certified. 8.19 NO DEFAULT. No Default or Potential Default has occurred and is continuing or will arise as a result of the execution of the Loan Documents or of any Borrowing hereunder. SECTION 9 AFFIRMATIVE COVENANTS. Borrower, and Guarantor, by its execution and delivery of a Guaranty, covenants and agrees to perform, observe, and comply with each of the following covenants from the Closing Date and so long thereafter as Lenders are committed to fund Borrowings and Administrative Agent is committed to issue LCs under this Agreement and thereafter until the payment in full of the Principal Debt (and termination of outstanding LCs, if any) and payment in full of all other interest, fees, and other amounts of the Obligation then due and owing, unless Borrower receives a prior written consent to the contrary by Administrative Agent as authorized by Required Lenders: 9.1 USE OF PROCEEDS. Borrower shall, and shall cause each of its Subsidiaries to, use the proceeds of Borrowings only for the purposes represented in SECTION 8.1(a). 9.2 BOOKS AND RECORDS. The Loan Parties shall, and shall cause each of their Subsidiaries to, maintain books, records, and accounts necessary to prepare financial statements in accordance with GAAP. 9.3 ITEMS TO BE FURNISHED. Borrower shall cause the following to be furnished to Administrative Agent for delivery to Lenders: (a) Promptly after preparation, and no later than 60 days after the last day of each of the first three fiscal quarters of Borrower, (i) balance sheets and statements of earnings and cash flow ("FINANCIAL STATEMENTS") showing the consolidated financial condition and results of operations calculated for Borrower and its Subsidiaries, for such fiscal quarter and for the period from the beginning of the then-current fiscal year to such last day, (ii) Financial Statements showing the consolidating financial condition and results of operations calculated for Borrower and Intermediate Partnership, exclusive of any other Subsidiaries for such fiscal quarter and for the period from the beginning of the then-current fiscal year to such last day, and (iii) a statement reconciling the items of Debt and Capitalization as reported on the balance sheets contained in the financial statements described in clauses (i) and (ii) above; each accompanied by a Compliance Certificate. (b) Promptly after preparation, and no later than 120 days after the last day of each fiscal year of Borrower, Financial Statements showing the consolidated financial condition and results of operations calculated separately for Borrower, as of, and for the year ended on, such day, each accompanied by: (i) the unqualified opinion of a firm of nationally-recognized independent certified public accountants, based on an audit using generally accepted auditing standards, that such Financial Statements were prepared in accordance with GAAP and present fairly the consolidated financial condition and results of operations of Borrower; (ii) a Compliance Certificate. (c) Promptly after preparation, and no later than 120 days after the last day of the fiscal year of the Borrower, (i) Financial Statements showing the consolidated financial condition and results of operations calculated for Borrower and its Subsidiaries for such fiscal year, (ii) Financial Statements showing the consolidating financial condition and results of operations calculated for Borrower and Intermediate Partnership, exclusive of any other Subsidiaries, for such fiscal year, and 33 NBPLP CREDIT AGREEMENT (iii) a statement reconciling the items of Debt and Capitalization as reported on the balance sheets contained in the financial statements described in clauses (i) and (ii) above, each accompanied by a Compliance Certificate. (d) Promptly upon receipt thereof, and in any event within ten (10) Business Days after receipt thereof, copies of all auditor's annual management letters delivered to Borrower. (e) Notice, promptly (but in any event within five (5) Business Days) after any Loan Party knows or has reason to know of (i) a Default or Potential Default specifying the nature thereof and what action any Loan Party or any Subsidiary thereof has taken, is taking, or proposes to take with respect thereto, or (ii) any other event or circumstance that results in, or could reasonably be expected to result in, a Material Adverse Event. (f) Promptly after the filing thereof, a true, correct, and complete copy of each Form 10-K, Form 10-Q, and Form 8-K filed by or on behalf of any Loan Party or any Subsidiary thereof with the Securities and Exchange Commission, and of all material reports or filings filed by or on behalf of any Loan Party with any Governmental Authority. (g) Promptly upon request therefor by Administrative Agent or Lenders, such information (not otherwise required to be furnished under the Loan Documents) respecting the business affairs, assets, and liabilities of the Loan Parties or Subsidiary thereof, and such opinions, certifications, and documents, in addition to those mentioned in this Agreement, as reasonably requested. 9.4 INSPECTIONS. Upon reasonable notice, the Loan Parties shall allow, and shall cause their Subsidiaries to allow, Administrative Agent or any Lender (or their respective Representatives) to inspect any of their properties, to review reports, files, and other records and to make and take away copies thereof, to conduct tests or investigations, and to discuss any of their respective affairs, conditions, and finances with other creditors, directors, officers, employees, other representatives, and independent accountants of the Loan Parties and their Subsidiaries, from time to time, during reasonable business hours. 9.5 TAXES. Each Loan Party (a) shall, and shall cause each of its Subsidiaries to, promptly pay when due any and all Taxes other than Taxes the applicability, amount, or validity of which is being contested in good faith by lawful proceedings diligently conducted, and against which reserve or other provision required by GAAP has been made, and in respect of which levy and execution of any lien securing same have been and continue to be stayed. 9.6 PAYMENT OF OBLIGATIONS. Borrower shall pay the Obligation in accordance with the terms and provisions of the Loan Documents. Each Loan Party shall, and shall cause its Subsidiaries to, promptly pay (or renew and extend) all of their respective material obligations as the same become due (unless such obligations other than the Obligation are being contested in good faith by appropriate proceedings). 9.7 MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS. Except as otherwise permitted by SECTION 10.9, each Loan Party shall, and shall cause each of its Subsidiaries to, at all times: (a) maintain its existence and good standing in the jurisdiction of its organization and its authority to transact business in all other jurisdictions where the nature of its business so requires; (b) maintain all licenses, permits, and franchises necessary for the normal business; (c) keep all of its assets which are useful in and necessary to its business in good working order and condition (ordinary wear and tear excepted) and make all necessary repairs thereto and replacements thereof; and (d) do all things necessary to obtain, renew, extend, and continue in effect all Authorizations which may at any time and from time to time be necessary for the Loan Parties and Subsidiaries thereof to operate their businesses in compliance with applicable Law; except in the case of each of CLAUSES (a) through (d), where the failure to so renew, extend, or continue in effect could not reasonably be expected to be a Material Adverse Event. 34 NBPLP CREDIT AGREEMENT 9.8 COMPLIANCE WITH LAWS, ETC. The Loan Parties will comply, and will cause each of its Subsidiaries to comply, in all material respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards except where the failure to so comply will not reasonably be expected to cause a Material Adverse Event. 9.9 INSURANCE. Each Loan Party will, and will cause each of its Subsidiaries to, maintain or cause to be maintained with responsible insurance companies insurance with respect to its properties and business against such casualties and contingencies and of such types and in such amounts as is consistent with prudent industry practice and will, upon request of the Administrative Agent, furnish to each Lender at reasonable intervals a certificate of insurance setting forth the nature and extent of all insurance maintained by the Borrower in accordance with this Section. 9.10 PRESERVATION AND PROTECTION OF RIGHTS. Each Loan Party shall perform such acts and duly authorize, execute, acknowledge, deliver, file, and record any additional agreements, documents, instruments, and certificates as Administrative Agent or Required Lenders may reasonably deem necessary or appropriate in order to preserve and protect the Rights of Administrative Agent and Lenders under any Loan Document. 9.11 PARI PASSU STATUS. Each Loan Party will ensure the claims and rights of the Lenders against it under this Agreement and each other Loan Document will not be subordinate to, and will rank at all times at least pari passu with, all other unsecured Debt of such Loan Party. 9.12 MAINTENANCE OF TAX STATUS. Borrower shall take all action necessary to prevent Borrower, Intermediate Partnership or NBPC from being, and will take no action which would have the effect of causing any of Borrower, Intermediate Partnership or NBPC to be, treated as an association taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes. SECTION 10 NEGATIVE COVENANTS. Borrower, and Guarantor, by its execution and delivery of a Guaranty, covenants and agrees to perform, observe, and comply with each of the following covenants from the Closing Date and so long thereafter as Lenders are committed to fund Borrowings and Administrative Agent is committed to issue LCs under this Agreement and thereafter until the payment in full of the Principal Debt (and termination of outstanding LCs, if any) and payment in full of all other interest, fees, and other amounts of the Obligation then due and owing, unless Borrower receives a prior written consent to the contrary by Administrative Agent as authorized by Required Lenders: 10.1 DEBT AND GUARANTIES. (a) No Loan Party shall, or permit any of its Subsidiaries (other than NBPC) to, directly, or indirectly, create, incur, or suffer to exist any direct, indirect or contingent liability for any obligations under Capital Leases in excess of $20,000,000 outstanding at any time in the aggregate; and (b) No Subsidiary of Borrower shall, directly or indirectly, create, incur, or suffer to exist any direct, indirect, fixed, or contingent liability for any Debt, other than: (i) The Obligation and Guaranties thereof; (ii) Debt of Black Mesa Holdings, Inc. and Black Mesa Pipeline, Inc. existing on the Closing Date as described in SCHEDULE 10.1 (but not renewals, extensions or increases in or of, such Debt); 35 NBPLP CREDIT AGREEMENT (iii) Trade Debt for goods furnished or services rendered in the ordinary course of business and payable in accordance with customary trade terms that are not more than 90 days past due; (iv) Endorsements of checks or drafts in the ordinary course of business; (v) Debt of NBPC described on SCHEDULE 10.1 and other Debt of NBPC, so long as the NBPC Capitalization Ratio does not exceed 0.65 to 1.0; (vi) Other Debt of Subsidiaries other than NBPC which does not exceed $25,000,000 outstanding at any time in the aggregate; and (vii) Debt of Subsidiaries resulting from loans made by Borrower to Intermediate Partnership, loans by Intermediate Partnership to another Subsidiary or other loans by a Subsidiary to another Subsidiary; provided, however, that any Debt of Intermediate Partnership resulting from loans made by any Subsidiary to Intermediate Partnership shall be subordinated on terms and conditions satisfactory to Administrative Agent and the Required Lenders in right of payment to its obligations under the Guaranty; provided, however, no Debt otherwise permitted by clauses (a) or (b) shall be permitted if, after giving effect to the incurrence thereof, any Default or Potential Default shall have occurred and be continuing. 10.2 LIENS. No Loan Party shall, or permit any of its Subsidiaries (except NBPC) to, directly or indirectly, create, incur, or suffer or permit to be created or incurred or to exist any Lien upon any of its assets, except: (a) Liens existing as a result of any Capital Lease, to the extent permitted pursuant to SECTION 10.1; (b) Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books; (c) Liens of carriers, operators, warehousemen, mechanics, materialmen and landlords, and statutory Liens of producers of hydrocarbons, incurred in the ordinary course of business for sums not overdue or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books; (d) Deposits in the ordinary course of business in connection with workmen's compensation, unemployment insurance or other forms of governmental insurance or benefits, or to secure performance of tenders, statutory obligations, leases and contracts (other than for borrowed money) entered into in the ordinary course of business or to secure obligations on surety or appeal bonds; and (e) Judgment Liens in existence less than 30 days after the entry thereof or with respect to which execution has been stayed or the payment of which is covered in full (subject to a customary deductible) by insurance maintained with responsible insurance companies. 10.3 TRANSACTIONS WITH AFFILIATES. No Loan Party shall, or permit any of its Subsidiaries to, enter into any transaction with any of its Affiliates, other than transactions upon fair and reasonable terms 36 NBPLP CREDIT AGREEMENT not less favorable than such Loan Party or Subsidiary could obtain or could become entitled to in an arm's-length transaction with a Person that was not its Affiliate. 10.4 ASSIGNMENT. No Loan Party shall assign or transfer any of its Rights, duties, or obligations under any of the Loan Documents. 10.5 GOVERNMENT REGULATIONS. No Loan Party will conduct its business in such a way that it will become subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the Federal Power Act, as amended, or any other Law (other than Regulations T, U, and X of the Board of Governors of the Federal Reserve System) which regulates the incurrence of Debt. 10.6 MERGERS; SALE OF ASSETS. (a) No Loan Party will, nor will it permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all (or substantially all) of its assets, or all or substantially all of the stock of or other equity interest in any of its Subsidiaries (in each case, whether now owned or hereafter acquired), unless: (i) at the time thereof and immediately after giving effect thereto no Default or Potential Default shall have occurred and be continuing, (ii) if the Borrower is involved in any such transaction, the Borrower is the surviving entity or the recipient of any such sale, transfer, lease or other disposition of assets, and if any other Loan Party is involved in any such transaction a Loan Party is the surviving entity or the recipient of any such sale, transfer, lease or other disposition of assets; provided, however, that in no event shall any such merger, consolidation, sale, transfer, lease or other disposition whether or not otherwise permitted by this SECTION 10.6 have the effect of releasing any Loan Party from any of its obligations and liabilities under this Agreement. The Loan Parties will not permit NBPC to merge or consolidate with or into any other Person, or sell, assign, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its business and assets (whether now owned or hereafter acquired) to, any Person, except pursuant to Section 14 or Section 15 (to the extent it applies to a merger pursuant to Section 14) of NBPC's Partnership Agreement. (b) The Loan Parties shall not permit NBPC to lease, sell or otherwise dispose of its assets to any other Person except: (i) sales of inventory and other assets in the ordinary course of business, (ii) leases, sales or other dispositions of its assets that, together with all other assets of NBPC previously leased, sold or disposed of (other than disposed of pursuant to this SECTION 10.6(b)) during the twelve-month period ending with the month in which any such lease, sale or other disposition occurs, do not constitute a substantial portion of the assets of NBPC, (iii) sales of assets which are concurrently leased back, and (iv) dispositions of assets which are obsolete or no longer used or useful in the business of NBPC. 10.7 LOAN AND INVESTMENTS. Borrower shall not purchase or acquire or make any commitment therefor, any capital stock, equity interest, or any obligations or other securities of, or any interest in, any Person, or commit to make any Acquisitions, or make or commit to make any advance, loan, extension of credit or capital contribution to or any other investment in, any Person including any Affiliate of the Company (together, "Investments"), except for: (a) Investments held by Borrower in the form of cash equivalents or short-term marketable securities; and (b) Investments in and through Intermediate Partnership permitted by SECTION 10.9. 37 NBPLP CREDIT AGREEMENT 10.8 DISTRIBUTIONS. Borrower will not declare, pay or make any distribution (in cash, property or obligations) on any interests (now or hereafter outstanding) in Borrower or apply any of its funds, property or assets to the purchase of any partnership interests in Borrower; provided, that at any time during which no Default or Potential Default is outstanding, Borrower (a) may make distributions on the Limited Partnership Units and General Partners' interests in accordance with the Partnership Agreement and (b) may purchase its partnership interests provided that the aggregate purchase price therefor does not exceed $20 million in the aggregate during the term of this Agreement. 10.9 LIMITATION ON BUSINESS ACTIVITIES. Borrower shall not engage in any business activity except the ownership of a limited partner interest in Intermediate Partnership and such activities as may be incidental or related thereto. Intermediate Partnership shall not, and the Loan Parties shall not permit any of their Subsidiaries to, engage, directly or indirectly, in any business activity except (a) existing business activities consisting of the ownership and operation of natural gas and coal pipelines, the extension and expansion of such pipelines and related facilities, services related to transportation and marketing of natural gas and coal and such activities as may be incidental or related to the aforementioned and (b) new business activities in the area of exploration, development, production, processing, refining, transportation or marketing of gas, oil, coal or products thereof, provided the gross income of such activities allows Borrower to meet the exception in Section 7704 of the Code. 10.10 CERTAIN AMENDMENTS TO CASH DISTRIBUTION POLICIES AND PARTNERSHIP AGREEMENTS. Each Loan Party agrees that it shall not consent to, vote in favor of or permit any amendment of (a) the cash distribution policies of NBPC or Intermediate Partnership in any manner which would result in a Material Adverse Event with respect to any Loan Party or materially adversely affect the rights and remedies of the Lenders under and in connection with this Agreement, the Notes or any other Loan Document; or (b) the Partnership Agreement, the Northern Border Partnership Agreement or the Intermediate Partnership Agreement in any manner which would (i) have a material adverse effect on the rights and remedies of the Lenders under and in connection with this Agreement, the Notes or any other Loan Document; or (ii) result in a Material Adverse Event. 10.11 RESTRICTIVE AGREEMENTS, ETC. No Loan Party will, nor will it permit any of its Material Subsidiaries to, enter into any agreement restricting the ability of any Material Subsidiary to make any payments, directly or indirectly, to a Loan Party by way of distributions, advances, repayments of loans or advances, reimbursements of management and other intercompany charges, expenses and accruals or other returns on investments, or any other agreement or arrangement which restricts the ability of any such Subsidiary to make any payment, directly or indirectly, to a Loan Party or to guarantee Debt of a Loan Party. 10.12 EMPLOYEE BENEFIT PLANS. No Loan Party shall, or shall permit any of its ERISA Affiliates to, permit any of the events or circumstances described in SECTION 8.10 to exist or occur. 10.13 CAPITALIZATION RATIO. Borrower and Intermediate Partnership (unconsolidated with other subsidiaries) shall never permit the Capitalization Ratio to be greater than thirty-five percent (35%). SECTION 11 DEFAULT. The term "DEFAULT" means the occurrence of any one or more of the following events: 11.1 PAYMENT OF OBLIGATION. The failure of Borrower to pay (a) any amount of principal of any Borrowing or any reimbursement obligation in respect of a drawing under an LC when the same becomes due (whether by its terms, by acceleration, or as otherwise provided in the Loan Documents); or (b) within five (5) days after the same becomes due, any interest, fee or any other amount payable hereunder or under any other Loan Document. 11.2 COVENANTS. The failure or refusal of Borrower (and, if applicable, any other Loan Party or Subsidiary of any Loan Party) to punctually and properly perform, observe, and comply with: 38 NBPLP CREDIT AGREEMENT (a) Any covenant, agreement, or condition contained in SECTIONS 10.1 through 10.13; and (b) Any other covenant, agreement, or condition contained in any Loan Document (other than the covenants to pay the Obligation set forth in SECTION 11.1 and the covenants in SECTION 11.2(a)), and such failure or refusal continues for 30 days after the earlier of (i) the date upon which a Responsible Officer (or, in the case of a failure or refusal of Guarantor to perform, observe or comply, an officer of Guarantor) knew or reasonably should have known of such failure or refusal, or (ii) the date upon which written notice thereof is given to Borrower (or, if applicable, Guarantor) by the Administrative Agent or any Bank. 11.3 DEBTOR RELIEF. Any Loan Party or any Material Subsidiary thereof (a) fails to pay, or admits in writing its inability to pay its Debts generally as they become due, (b) voluntarily seeks, consents to, or acquiesces in the benefit of any Debtor Relief Law, other than as a creditor or claimant, or (c) becomes a party to or is made the subject of any proceeding provided for by any Debtor Relief Law, other than as a creditor or claimant, (unless, in the event such proceeding is involuntary, the petition instituting same is dismissed within 60 days after its filing). 11.4 JUDGMENTS AND ATTACHMENTS. Any Loan Party or any Material Subsidiary thereof fails, within 60 days after entry, to pay, bond, or otherwise discharge any judgment or order for the payment of money in excess of $15,000,000 (individually or collectively) or any warrant of attachment, sequestration, or similar proceeding against any of their respective assets having a value (individually or collectively) of $15,000,000 which is not stayed on appeal. 11.5 MISREPRESENTATION. Any representation or warranty made herein or in any Loan Document shall at any time prove to have been incorrect in any material respect when made. 11.6 CHANGE OF CONTROL. A Change of Control shall occur. 11.7 DEFAULT UNDER OTHER DEBT AND AGREEMENTS. (a) A default shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any Debt (other than Debt described in SECTION 11.1) of any Loan Party or any of its Subsidiaries having a principal amount (including undrawn or committed or available amounts), individually or in the aggregate, in excess of $15,000,000, or a default shall occur in the performance or observance of any obligation or condition with respect to such Debt, or any other event shall occur or condition exist under any agreement relating to such Debt the effect of which default, condition or event is to cause, or to permit the holder or holders of such Debt (or any trustee or agent for such holders) to cause (with the giving of notice if required or lapse of time or both), such Debt to become due and payable prior to its expressed maturity (whether by acceleration, redemption, repurchase or otherwise); provided, that no Default will result from a Rating Decline Offer, or the event causing such offer, under Borrower's 8-7/8% Senior Notes due 2010 (the "SENIOR NOTES") unless one or more holders of Senior Note(s) elect to exercise its or their rights to have all or any portion of their Senior Notes repurchased by Borrower (as used herein Rating Decline Offer has the meaning assigned in Borrower's Indenture for the 8-7/8% Senior Notes due 2010); or (b) A Loan Party or any of its Subsidiaries shall: (i) default in making any payment, delivery or exchange, or in the performance of any of its other obligations, under one or more agreements or instruments (individually or collectively) governing or otherwise relating to one or more Derivative Transactions, which default shall have resulted in early termination, liquidation or other similar payments in an aggregate amount in excess of $15,000,000 becoming, or becoming 39 NBPLP CREDIT AGREEMENT capable at such time (after giving effect to any applicable notice requirement or grace period) of being declared or designated, due and payable by a Loan Party, or one or more of its Subsidiaries; or (ii) default (after giving effect to any applicable notice requirement or grace period) in making any payment or delivery due on the last payment, delivery or exchange date of, or on the early termination or liquidation of, one or more Derivative Transactions and such default relates to one or more payments or deliveries of cash or property having an aggregate value in excess of $15,000,000. 11.8 EMPLOYEE BENEFIT PLANS. (a) Any Loan Party or ERISA Affiliate shall fail to pay when due an amount or amounts for which it is liable under Title IV of ERISA, which aggregate unpaid amounts for all such entities exceed $15,000,000 in the aggregate; or (b) an ERISA Event shall occur or exist with respect to any Employee Plan or Multiemployer Plan, and as a result of such ERISA Event and all other ERISA Events then-existing, the aggregate liabilities incurred (or in the reasonable judgment of Required Lenders, likely to be incurred) of the Loan Parties and the ERISA Affiliates to any Employee Plan, Multiemployer Plan, or the PBGC (or any combination thereof) shall exceed $15,000,000. 11.9 VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS. Any Loan Document shall, at any time after its execution and delivery and for any reason, cease to be in full force and effect in any material respect or be declared to be null and void (other than in accordance with the terms hereof or thereof) or the validity or enforceability thereof be contested by any Loan Party thereto or any Loan Party shall deny in writing that it has any or any further liability or obligations under any Loan Document to which it is a party. 11.10 ENVIRONMENTAL LIABILITY. If any event or condition shall occur or exist with respect to any activity or substance regulated under the Environmental Law and, as a result of such event or condition, any Loan Party or any of their respective Subsidiaries shall have incurred or in the opinion of the Required Lenders will be reasonably likely to incur a liability in excess of $15,000,000 during any consecutive twelve (12) month period. 11.11 DISSOLUTION. Any Loan Party or NBPC shall dissolve, liquidate, or otherwise terminate their existence. SECTION 12 RIGHTS AND REMEDIES. 12.1 REMEDIES UPON DEFAULT. (a) Debtor Relief. If a Default exists under SECTION 11.3(b) or 11.3(c), the commitment to extend credit hereunder shall automatically terminate and the entire unpaid balance of the Obligation shall automatically become due and payable without any action or notice of any kind whatsoever, and Borrower shall be required to deposit cash collateral in the Letter of Credit Cash Collateral Account in an amount equal to 110% of the LC Exposure then existing in accordance with SECTION 2.2(g). (b) Other Defaults. If any Default exists, Administrative Agent may (and, subject to the terms of SECTION 13, shall upon the request of Required Lenders) or Required Lenders may, do any one or more of the following: (i) if the maturity of the Obligation has not already been accelerated under SECTION 12.1(a), declare the entire unpaid balance of the Obligation, or any part thereof, immediately due and payable, whereupon it shall be due and payable; (ii) terminate the commitments of Lenders to extend credit hereunder; (iii) reduce any claim to judgment; (iv) to the extent permitted by Law, exercise (or request each Lender to, and each Lender shall be entitled to, exercise) the Rights of offset or banker's Lien against the interest of each Loan Party in and to every account and other property of any Loan Party which are in the possession of Administrative Agent or any Lender to the extent of the full amount of the Obligation (to the extent permitted by Law, each Loan Party being deemed directly obligated to each Lender in the full amount of the Obligation 40 NBPLP CREDIT AGREEMENT for such purposes); (v) if the maturity of the Obligation has not already been accelerated under SECTION 12.1(a), demand Borrower to deposit cash collateral in the Letter of Credit Cash Collateral Account in an amount equal to 110% of the LC Exposure then existing in accordance with SECTION 2.2(g); and (vi) exercise any and all other legal or equitable Rights afforded by the Loan Documents, the Laws of the State of Texas, or any other applicable jurisdiction as Administrative Agent or Required Lenders (as the case may be) shall deem appropriate, or otherwise, including, but not limited to, the Right to bring suit or other proceedings before any Governmental Authority either for specific performance of any covenant or condition contained in any of the Loan Documents or in aid of the exercise of any Right granted to Administrative Agent or any Lender in any of the Loan Documents. 12.2 LOAN PARTY WAIVERS. To the extent permitted by Law, the Loan Parties hereby waive presentment and demand for payment, protest, notice of intention to accelerate, notice of acceleration, and notice of protest and nonpayment, and agree that their respective liability with respect to the Obligation (or any part thereof) shall not be affected by any renewal or extension in the time of payment of the Obligation (or any part thereof), by any indulgence, or by any release or change in any security for the payment of the Obligation (or any part thereof). 12.3 PERFORMANCE BY ADMINISTRATIVE AGENT. If any covenant, duty, or agreement of any Loan Party is not performed in accordance with the terms of the Loan Documents, after the occurrence and during the continuance of a Default, Administrative Agent may, at its option (but subject to the approval of Required Lenders), perform or attempt to perform such covenant, duty, or agreement on behalf of such Loan Party. In such event, any amount expended by Administrative Agent in such performance or attempted performance shall be payable by the Loan Parties, jointly and severally, to Administrative Agent on demand, shall become part of the Obligation, and shall bear interest at the Default Rate from the date of such expenditure by Administrative Agent until paid. Notwithstanding the foregoing, it is expressly understood that Administrative Agent does not assume, and shall never have, except by its express written consent, any liability or responsibility for the performance of any covenant, duty, or agreement of any Loan Party. 12.4 DELEGATION OF DUTIES AND RIGHTS. Lenders may perform any of their duties or exercise any of their Rights under the Loan Documents by or through their respective Representatives. 12.5 NOT IN CONTROL. Nothing in any Loan Document shall, or shall be deemed to (a) give any Agent or any Lender the Right to exercise control over the assets (including real property), affairs, or management of any Loan Party or any Subsidiary thereof, (b) preclude or interfere with compliance by any Loan Party or any Subsidiary thereof with any Law, or (c) require any act or omission by any Loan Party or any Subsidiary thereof that may be harmful to Persons or property. Any "Material Adverse Event" or other materiality qualifier in any representation, warranty, covenant, or other provision of any Loan Document is included for credit documentation purposes only and shall not, and shall not be deemed to, mean that any Agent or any Lender acquiesces in any non-compliance by any Loan Party or any Subsidiary thereof with any Law or document, or that any Agent or any Lender does not expect the Loan Parties and their respective Subsidiaries to promptly, diligently, and continuously carry out all appropriate removal, remediation, and termination activities required or appropriate in accordance with all Environmental Laws. The Agents and the Lenders have no fiduciary relationship with or fiduciary duty to any Loan Party or any Subsidiary thereof arising out of or in connection with the Loan Documents, and the relationship between the Agents and the Lenders, on the one hand, and Loan Parties, on the other hand, in connection with the Loan Documents is solely that of debtor and creditor. The power of the Agents and Lenders under the Loan Documents is limited to the Rights provided in the Loan Documents, which Rights exist solely to assure payment and performance of the Obligation and may be exercised in a manner calculated by the Agents and Lenders in their respective good faith business judgment. 12.6 COURSE OF DEALING. The acceptance by Administrative Agent or Lenders at any time and from time to time of partial payment on the Obligation shall not be deemed to be a waiver of any Default then existing. No waiver by Administrative Agent, Required Lenders, or Lenders of any Default shall be 41 NBPLP CREDIT AGREEMENT deemed to be a waiver of any other then-existing or subsequent Default. No delay or omission by Administrative Agent, Required Lenders, or Lenders in exercising any Right under the Loan Documents shall impair such Right or be construed as a waiver thereof or any acquiescence therein, nor shall any single or partial exercise of any such Right preclude other or further exercise thereof, or the exercise of any other Right under the Loan Documents or otherwise. 12.7 CUMULATIVE RIGHTS. All Rights available to Administrative Agent and Lenders under the Loan Documents are cumulative of and in addition to all other Rights granted to Administrative Agent and Lenders at law or in equity, whether or not the Obligation is due and payable and whether or not Administrative Agent or Lenders have instituted any suit for collection, foreclosure, or other action in connection with the Loan Documents. 12.8 APPLICATION OF PROCEEDS. Any and all proceeds ever received by Administrative Agent or Lenders from the exercise of any Rights pertaining to the Obligation shall be applied to the Obligation in the order and manner set forth in SECTION 3.12. 12.9 CERTAIN PROCEEDINGS. Each Loan Party will promptly execute and deliver, or cause the execution and delivery of, all applications, certificates, instruments, registration statements, and all other documents and papers Administrative Agent or Lenders may reasonably request in connection with the obtaining of any consent, approval, registration, qualification, permit, license, or Authorization of any Governmental Authority or other Person necessary or appropriate for the effective exercise of any Rights under the Loan Documents. 12.10 EXPENDITURES BY LENDERS. Borrower shall promptly pay within fifteen (15) Business Days after request therefor (a) all reasonable costs, fees, and expenses paid or incurred by Administrative Agent and Arranger, incident to any Loan Document (including, but not limited to, the reasonable fees and expenses of counsel to Administrative Agent and Arranger in connection with the negotiation, preparation, delivery, execution, coordination and administration of the Loan Documents and any related amendment, waiver, or consent) and (b) all costs and expenses of Lenders and Administrative Agent incurred by Administrative Agent or any Lender in connection with the enforcement of the obligations of any Loan Party arising under the Loan Documents (including, without limitation, costs and expenses incurred in connection with any workout or bankruptcy) or the exercise of any Rights arising under the Loan Documents (including, but not limited to, reasonable attorneys' fees, court costs and other costs of collection), all of which shall be a part of the Obligation and shall bear interest at the Default Rate from the date due until the date repaid. 12.11 INDEMNIFICATION. BORROWER AND EACH OTHER LOAN PARTY (BY EXECUTION OF A GUARANTY) AGREES TO INDEMNIFY AND HOLD HARMLESS EACH AGENT, ARRANGER, AND EACH LENDER AND EACH OF THEIR RESPECTIVE AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, AND ADVISORS (EACH, AN "INDEMNIFIED PARTY") FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES, LIABILITIES (INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL LIABILITIES), COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES) THAT MAY BE INCURRED BY OR ASSERTED OR AWARDED AGAINST ANY INDEMNIFIED PARTY, IN EACH CASE ARISING OUT OF OR IN CONNECTION WITH OR BY REASON OF (INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH ANY INVESTIGATION, LITIGATION, OR PROCEEDING OR PREPARATION OF DEFENSE IN CONNECTION THEREWITH) THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE BORROWINGS (INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF THE INDEMNIFIED PARTY), EXCEPT TO THE EXTENT SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE IS FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM SUCH INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IN THE CASE OF AN INVESTIGATION, LITIGATION OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 12.11 APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY THE BORROWER, ITS DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNIFIED PARTY OR ANY OTHER PERSON OR ANY INDEMNIFIED 42 NBPLP CREDIT AGREEMENT PARTY IS OTHERWISE A PARTY THERETO AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED. BORROWER AND EACH OTHER LOAN PARTY (BY EXECUTION OF A GUARANTY) AGREE NOT TO ASSERT ANY CLAIM AGAINST ANY INDEMNIFIED PARTY ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING OUT OF OR OTHERWISE RELATING TO THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE BORROWINGS. WITHOUT PREJUDICE TO THE SURVIVAL OF ANY OTHER AGREEMENT OF THE BORROWER OR GUARANTORS HEREUNDER, THE AGREEMENTS AND OBLIGATIONS OF THE LOAN PARTIES CONTAINED IN THIS SECTION 12.11 SHALL SURVIVE THE PAYMENT IN FULL OF THE BORROWINGS AND ALL OTHER AMOUNTS PAYABLE UNDER THE LOAN DOCUMENTS. SECTION 13 AGREEMENT AMONG LENDERS. 13.1 ADMINISTRATIVE AGENT. (a) Appointment of Administrative Agent. Each Lender hereby appoints Bank of America, N.A. (and Bank of America, N.A. hereby accepts such appointment) as its nominee and agent, in its name and on its behalf: (i) to act as nominee for and on behalf of such Lender in and under all Loan Documents; (ii) to arrange the means whereby the funds of Lenders are to be made available to Borrower under the Loan Documents; (iii) to take such action as may be requested by any Lender under the Loan Documents (when such Lender is entitled to make such request under the Loan Documents and after such requesting Lender has obtained the concurrence of such other Lenders as may be required under the Loan Documents); (iv) to receive all documents and items to be furnished to Lenders under the Loan Documents; (v) to timely distribute, and Administrative Agent agrees to so distribute, to each Lender all material information, requests, documents, and items received from Borrower under the Loan Documents; (vi) to promptly distribute to each Lender its ratable part of each payment or prepayment (whether voluntary, as proceeds of collateral upon or after foreclosure, as proceeds of insurance thereon, or otherwise) in accordance with the terms of the Loan Documents; (vii) to deliver to the appropriate Persons requests, demands, approvals, and consents received from Lenders; and (viii) to execute, on behalf of Lenders, such releases or other documents or instruments as are permitted by the Loan Documents or as directed by Lenders from time to time; provided, however, Administrative Agent shall not be required to take any action which exposes Administrative Agent to personal liability or which is contrary to the Loan Documents or applicable Law. (b) Resignation of Administrative Agent; Successor Administrative Agents. Administrative Agent may resign at any time as Administrative Agent under the Loan Documents by giving written notice thereof to Lenders and to Borrower. Should the initial or any successor Administrative Agent ever cease to be a party hereto or should the initial or any successor Administrative Agent ever resign as Administrative Agent, then Required Lenders shall elect the successor Administrative Agent from among the Lenders (other than the resigning Administrative Agent). Unless a Default or Potential Default has occurred and is continuing, such successor Administrative Agent shall be subject to Borrower's approval, which approval shall not be unreasonably withheld or delayed. If no successor Administrative Agent shall have been so appointed by Required Lenders, within 30 days after the retiring Administrative Agent's giving of notice of resignation, then the retiring Administrative Agent may, on behalf of Lenders, appoint a successor Administrative Agent, which shall be a commercial bank having a combined capital and surplus of at least $1,000,000,000. Upon the acceptance of any appointment as Administrative Agent under the Loan Documents by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the Rights of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations of Administrative Agent under the Loan Documents (provided, however, that when used in connection with LCs issued and outstanding prior to the appointment of the successor Administrative Agent, "Administrative Agent" shall continue to refer solely to the bank that issued 43 NBPLP CREDIT AGREEMENT the outstanding LC; provided further that any LCs issued or renewed after the appointment of any successor Administrative Agent shall be issued by such successor Administrative Agent), and each Lender shall execute such documents as any Lender may reasonably request to reflect such change in and under the Loan Documents. After any retiring Administrative Agent's resignation as Administrative Agent under the Loan Documents, the provisions of this SECTION 13 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under the Loan Documents. (c) Administrative Agent as a Lender; Non-Fiduciary. Administrative Agent, in its capacity as a Lender, shall have the same Rights under the Loan Documents as any other Lender and may exercise the same as though it were not acting as Administrative Agent; the term "Lender" shall, unless the context otherwise indicates, include Administrative Agent and any issuer of an LC hereunder; and any resignation, or removal of by Administrative Agent hereunder shall not impair or otherwise affect any Rights which it has or may have in its capacity as an individual Lender. Each Lender and Borrower agree that Administrative Agent is not a fiduciary for Lenders or for Borrower but simply is acting in the capacity described herein to alleviate administrative burdens for both Borrower and Lenders, that Administrative Agent has no duties or responsibilities to Lenders or Borrower except those expressly set forth herein, and that Administrative Agent in its capacity as a Lender has all Rights of any other Lender. (d) Other Activities of Administrative Agent. Administrative Agent and its Affiliates may now or hereafter be engaged in one or more loan, letter of credit, leasing, or other financing transactions with Borrower, act as trustee or depositary for Borrower, or otherwise be engaged in other transactions with Borrower (collectively, the "OTHER ACTIVITIES") not the subject of the Loan Documents. Without limiting the Rights of Lenders specifically set forth in the Loan Documents, Administrative Agent and its Affiliates shall not be responsible to account to Lenders for such other activities, and no Lender shall have any interest in any other activities, any present or future guaranties by or for the account of Borrower which are not contemplated or included in the Loan Documents, any present or future offset exercised by Administrative Agent and its Affiliates in respect of such other activities, any present or future property taken as security for any such other activities, or any property now or hereafter in the possession or control of Administrative Agent or its Affiliates which may be or become security for the obligations of Borrower arising under the Loan Documents by reason of the general description of indebtedness secured or of property contained in any other agreements, documents or instruments related to any such other activities; provided that, if any payments in respect of such guaranties or such property or the proceeds thereof shall be applied to reduction of the Obligation arising under the Loan Documents, then each Lender shall be entitled to share in such application ratably. 13.2 EXPENSES. Upon demand by Administrative Agent, each Lender shall pay its ratable portion of any expenses (including, without limitation, court costs, attorneys' fees, and other costs of collection) incurred by Administrative Agent in connection with any of the Loan Documents if and to the extent Administrative Agent does not receive reimbursement therefor from other sources within 60 days after incurred; provided that, each Lender shall be entitled to receive its ratable portion of any reimbursement for such expenses, or part thereof, which Administrative Agent subsequently receives from such other sources. 13.3 PROPORTIONATE ABSORPTION OF LOSSES. Except as otherwise provided in the Loan Documents, nothing in the Loan Documents shall be deemed to give any Lender any advantage over any other Lender insofar as the Obligation arising under the Loan Documents is concerned, or to relieve any Lender from absorbing its ratable portion of any losses sustained with respect to the Obligation (except to the extent such losses result from unilateral actions or inactions of any Lender that are not made in accordance with the terms and provisions of the Loan Documents). 44 NBPLP CREDIT AGREEMENT 13.4 DELEGATION OF DUTIES; RELIANCE. Administrative Agent may perform any of its duties or exercise any of its Rights under the Loan Documents by or through its Representatives. Administrative Agent and its Representatives shall (a) be entitled to rely upon (and shall be protected in relying upon) any writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telecopy, telegram, telex or teletype message, statement, order, or other documents or conversation believed by it or them to be genuine and correct and to have been signed or made by the proper Person and, with respect to legal matters, upon opinion of counsel selected by Administrative Agent, (b) be entitled to deem and treat each Lender as the owner and holder of the Obligation owed to such Lender for all purposes until, subject to SECTION 14.13, written notice of the assignment or transfer thereof shall have been given to and received by Administrative Agent (and any request, authorization, consent, or approval of any Lender shall be conclusive and binding on each subsequent holder, assignee, or transferee of the Obligation owed to such Lender or portion thereof until such notice is given and received), (c) not be deemed to have notice of the occurrence of a Default or Potential Default unless a responsible officer of Administrative Agent, who handles matters associated with the Loan Documents and transactions thereunder, has received written notice from a Lender or Borrower and stating that such notice is a "Notice of Default," and (d) be entitled to consult with legal counsel (including counsel for Borrower), independent accountants, and other experts selected by Administrative Agent and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts. 13.5 LIMITATION OF LIABILITY. (a) General. Neither the Administrative Agent nor any of its Representatives shall be liable for any action taken or omitted to be taken by it under the Loan Documents in good faith and reasonably believed by it to be within the discretion or power conferred upon it by the Loan Documents or be responsible for the consequences of any error of judgment, except for fraud, gross negligence, or willful misconduct; and neither the Administrative Agent nor any of its Representatives has a fiduciary relationship with any Lender by virtue of the Loan Documents (provided that, nothing herein shall negate the obligation of Administrative Agent to account for funds received by it for the account of any Lender). (b) Non-Discretionary Actions. Indemnification. Unless indemnified to its satisfaction against loss, cost, liability, and expense, the Administrative Agent shall not be compelled to do any act under the Loan Documents or to take any action toward the execution or enforcement of the powers thereby created or to prosecute or defend any suit in respect of the Loan Documents. If Administrative Agent requests instructions from Lenders or Required Lenders, as the case may be, with respect to any act or action (including, but not limited to, any failure to act) in connection with any Loan Document, Administrative Agent shall be entitled (but shall not be required) to refrain (without incurring any liability to any Person by so refraining) from such act or action unless and until it has received such instructions. Except where action of Required Lenders or all Lenders is required in the Loan Documents, Administrative Agent may act hereunder in its own discretion without requesting instructions. In no event, however, shall Administrative Agent or any of its respective Representatives be required to take any action which it or they determine could incur for it or them criminal or onerous civil liability. Without limiting the generality of the foregoing, no Lender shall have any right of action against Administrative Agent as a result of Administrative Agent's acting or refraining from acting hereunder in accordance with the instructions of Required Lenders (or all Lenders if required in the Loan Documents). (c) Independent Credit Decision. Neither Administrative Agent nor any other Agent shall be responsible in any manner to any Lender or any Participant for, and each Lender represents and warrants that it has not relied upon Administrative Agent or any other Agent in respect of, (i) the creditworthiness of any Loan Party and the risks involved to such Lender, (ii) the effectiveness, enforceability, genuineness, validity, or the due execution of any Loan Document, (iii) any representation, warranty, document, certificate, report, or statement made therein or furnished 45 NBPLP CREDIT AGREEMENT thereunder or in connection therewith, or (iv) observation of or compliance with any of the terms, covenants, or conditions of any Loan Document on the part of any Loan Party. Each Lender agrees to indemnify Administrative Agent and its respective Representatives and hold them harmless from and against (but limited to such Lender's Pro Rata Part of) 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, asserted against, or incurred by them in any way relating to or arising out of the Loan Documents or any action taken or omitted by them under the Loan Documents (INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF ADMINISTRATIVE AGENT OR ITS REPRESENTATIVES), to the extent Administrative Agent and its respective Representatives are not reimbursed for such amounts by any Loan Party (provided that, Administrative Agent and its respective Representatives shall not have the right to be indemnified hereunder for its or their own fraud, gross negligence, or willful misconduct). 13.6 DEFAULT. (a) Upon the occurrence and continuance of a Default, Lenders agree to promptly confer in order that Required Lenders or Lenders, as the case may be, may agree upon a course of action for the enforcement of the Rights of Lenders; and Administrative Agent shall be entitled to refrain from taking any action (without incurring any liability to any Person for so refraining) unless and until Administrative Agent shall have received instructions from Required Lenders. All Rights of action under the Loan Documents, if any, hereunder may be enforced by Administrative Agent and any suit or proceeding instituted by Administrative Agent in furtherance of such enforcement shall be brought in its name as Administrative Agent without the necessity of joining as plaintiffs or defendants any other Lender, and the recovery of any judgment shall be for the benefit of Lenders subject to the expenses of Administrative Agent. In actions with respect to any property of Borrower, Administrative Agent is acting for the ratable benefit of each Lender. Any and all agreements to subordinate (whether made heretofore or hereafter) other indebtedness or obligations of Borrower to the Obligation shall be construed as being for the ratable benefit of each Lender. (b) Except to the extent unanimity is required hereunder, each Lender agrees that any action taken by the Required Lenders in accordance with the provisions of the Loan Documents, and the exercise by the Required Lenders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders. 13.7 LIMITATION OF LIABILITY. To the extent permitted by Law, (a) neither Administrative Agent nor any other Agent (acting in their respective agent capacities) shall incur any liability to any other Lender, Agent, or Participant except for acts or omissions resulting from its own fraud, gross negligence or wilful misconduct, and (b) neither Administrative Agent nor any other Agent, Lender, or Participant shall incur any liability to any other Person for any act or omission of any other Lender, Agent, or Participant. 13.8 RELATIONSHIP OF LENDERS. Nothing herein shall be construed as creating a partnership or joint venture among Agents and Lenders. 13.9 BENEFITS OF AGREEMENT. None of the provisions of this SECTION 13 (other than Borrower's right to consent to a successor agent as set forth in SECTION 13.1(b)) shall inure to the benefit of any Loan Party, Guarantor, or any other Person other than Lenders; consequently, no Loan Party or any other Person shall be entitled to rely upon, or to raise as a defense, in any manner whatsoever, the failure of any Agent or any Lender to comply with such provisions. 13.10 AGENTS. None of the Persons identified in this Agreement or on the cover page as "Syndication Agent," "Documentation Agent," "Lead Arranger"or "Book Manager" shall have any Rights, powers, obligations, liabilities, responsibilities, or duties under the Loan Documents other than those 46 NBPLP CREDIT AGREEMENT applicable to all Lenders as such. Without limiting the foregoing, none of the Persons so identified as a "Syndication Agent," "Documentation Agent," "Lead Arranger" or "Book Manager" shall have or be deemed to have any fiduciary relationship with any Lender. Any Person that is a "Syndication Agent," "Documentation Agent," "Lead Arranger" or "Book Manager" may voluntarily relinquish its title by giving written notice thereof to Administrative Agent and Borrower. Upon such relinquishments, a successor "Syndication Agent," "Documentation Agent," "Lead Arranger" or "Book Manager" may be appointed upon the mutual agreement of Borrower and Administrative Agent. 13.11 OBLIGATIONS SEVERAL. The obligations of Lenders hereunder are several, and each Lender hereunder shall not be responsible for the obligations of the other Lenders hereunder, nor will the failure of one Lender to perform any of its obligations hereunder relieve the other Lenders from the performance of their respective obligations hereunder. SECTION 14 MISCELLANEOUS. 14.1 HEADINGS. The headings, captions, and arrangements used in any of the Loan Documents are, unless specified otherwise, for convenience only and shall not be deemed to limit, amplify, or modify the terms of the Loan Documents, nor affect the meaning thereof. 14.2 NONBUSINESS DAYS. In any case where any payment or action is due under any Loan Document on a day which is not a Business Day, such payment or action may be delayed until the next-succeeding Business Day, but interest and fees shall continue to accrue in respect of any payment to which it is applicable until such payment is in fact made; provided that, if, in the case of any such payment in respect of a Eurodollar Rate Borrowing, the next-succeeding Business Day is in the next calendar month, then such payment shall be made on the next-preceding Business Day. 14.3 COMMUNICATIONS. Unless specifically otherwise provided, whenever any Loan Document requires or permits any consent, approval, notice, request, or demand from one party to another, such communication must be in writing (which may be by telex or telecopy) to be effective and shall be deemed to have been given (a) if by telecopy, when transmitted to the telecopy number for such party (and all such communications sent by telecopy shall be confirmed promptly thereafter by personal delivery or mailing in accordance with the provisions of this Section; provided, that any requirement in this parenthetical shall not affect the date on which such telecopy shall be deemed to have been delivered), (b) if by mail, on the third Business Day after it is enclosed in an envelope, properly addressed to such party, properly stamped, sealed, and deposited in the appropriate official postal service, or (c) if by any other means, when actually delivered to such party. Until changed by notice pursuant hereto, the address (and telecopy numbers) for Administrative Agent and each Lender, Administrative Agent, and other Agents is set forth on SCHEDULE 14.3, and for each Loan Party is the address set forth by Borrower's signature on the signature page of this Agreement and for each Guarantor is the address set forth by such Guarantor's signature on the signature page of its Guaranty. A copy of each communication to Administrative Agent shall also be sent to Haynes and Boone, LLP, 1000 Louisiana, Suite 4300, Houston, Texas 77002, Fax: 713/547-2600, Attn: Theresa Einhorn. 14.4 FORM AND NUMBER OF DOCUMENTS. Each agreement, document, instrument, or other writing to be furnished under any provision of the Loan Documents must be in form and substance and in such number of counterparts as may be reasonably satisfactory to Administrative Agent and its counsel. 14.5 EXCEPTIONS TO COVENANTS. No Loan Party shall take any action or fail to take any action which is permitted as an exception to any of the covenants contained in any Loan Document if such action or omission would result in the breach of any other covenant contained in any of the Loan Documents. 14.6 SURVIVAL. All covenants, agreements, undertakings, representations, and warranties made in any of the Loan Documents shall survive all closings under the Loan Documents and, except as otherwise 47 NBPLP CREDIT AGREEMENT indicated, shall not be affected by any investigation made by any party. All rights of, and provisions relating to, reimbursement and indemnification of Administrative Agent, any Agent, or any Lender (and any other provision of the Loan Documents that expressly provides for such survival) shall survive termination of this Agreement and payment in full of the Obligation. 14.7 GOVERNING LAW. THE LAWS OF THE STATE OF TEXAS, AND THE APPLICABLE FEDERAL LAWS OF THE UNITED STATES OF AMERICA, SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THE LOAN DOCUMENTS. 14.8 INVALID PROVISIONS. If any provision in any Loan Document is held to be illegal, invalid, or unenforceable, such provision shall be fully severable; the appropriate Loan Document shall be construed and enforced as if such provision had never comprised a part thereof; and the remaining provisions thereof shall remain in full force and effect and shall not be affected by such provision or by its severance therefrom. Administrative Agent, Lenders, and each Loan Party party to such Loan Document agree to negotiate, in good faith, the terms of a replacement provision as similar to the severed provision as may be possible and be legal, valid, and enforceable. 14.9 ENTIRETY. THE RIGHTS AND OBLIGATIONS OF EACH LOAN PARTY, LENDERS, AND AGENTS SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN SUCH PARTIES ARE SUPERSEDED BY AND MERGED INTO SUCH WRITINGS. THIS AGREEMENT (AS AMENDED IN WRITING FROM TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY ANY LOAN PARTY, ANY GUARANTOR, ANY LENDER, AND/OR ANY AGENT (TOGETHER WITH ALL FEE LETTERS AS THEY RELATE TO THE PAYMENT OF FEES AFTER THE CLOSING DATE) REPRESENT THE FINAL AGREEMENT BETWEEN THE LOAN PARTIES, LENDERS, AND AGENTS, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN SUCH PARTIES. 14.10 JURISDICTION; VENUE; SERVICE OF PROCESS. EACH PARTY HERETO (INCLUDING EACH GUARANTOR BY EXECUTION OF A GUARANTY), IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, HEREBY (A) IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN DALLAS IN THE STATE OF TEXAS, AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION BY SERVICE OF PROCESS AS PROVIDED BY TEXAS LAW, (B) 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 LITIGATION ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION BROUGHT IN ANY SUCH COURT, (C) IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (D) AGREES TO DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN TEXAS IN CONNECTION WITH ANY SUCH LITIGATION AND TO DELIVER TO ADMINISTRATIVE AGENT EVIDENCE THEREOF, IF REQUESTED, (E) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH LITIGATION BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, AT ITS ADDRESS SET FORTH HEREIN, AND (F) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY HERETO ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE OBLIGATION SHALL BE BROUGHT IN ONE OF THE AFOREMENTIONED COURTS. The scope of each of the foregoing waivers is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including, without limitation, contract claims, tort claims, breach of duty claims, and all other common law and statutory claims. The Loan Parties and each other party to the Loan Documents acknowledge that this waiver is a material inducement to the agreement of each party hereto to enter into a business relationship, that each has already relied on this waiver in entering into the Loan Documents, and each will continue to rely on each of such waivers in related future dealings. The Loan Parties and each other party to the Loan Documents warrant and represent that they have reviewed these waivers with their 48 NBPLP CREDIT AGREEMENT legal counsel, and that they knowingly and voluntarily agree to each such waiver following consultation with legal counsel. THE WAIVERS IN THIS SECTION 14.10 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS, AND REPLACEMENTS TO OR OF THIS OR ANY OTHER LOAN DOCUMENT. 14.11 AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS. (a) Except as otherwise specifically provided, this Agreement and the other Loan Documents may be amended, modified, or waived only by an instrument in writing executed jointly by Borrower and Required Lenders (or by Administrative Agent acting upon directions of the Required Lenders), and by Administrative Agent. (b) Any amendment to or consent or waiver under any Loan Document which purports to accomplish any of the following must be by an instrument in writing executed by Borrower and executed (or approved, as the case may be) by each Lender affected thereby and by Administrative Agent: (i) increases the Commitment Sum of such Lender or extends such Lender's commitment hereunder; (ii) postpones or delays any date fixed by the Loan Documents for any payment or mandatory prepayment of all or any part of the Obligation payable to such Lender or Administrative Agent; (iii) reduces the interest rate or decreases the amount of any payment of principal, interest, fees, or other sums payable to Administrative Agent or any such Lender hereunder; (iv) changes the definition of "REQUIRED LENDERS"; (v) releases a Guaranty; or (vi) changes this CLAUSE (b) or any other matter specifically requiring the consent of all Lenders hereunder. (c) Any conflict or ambiguity between the terms and provisions of this Agreement and terms and provisions in any other Loan Document shall be controlled by the terms and provisions herein. (d) No course of dealing nor any failure or delay by Administrative Agent, any Lender, or any of their respective Representatives with respect to exercising any Right of Administrative Agent or any Lender hereunder shall operate as a waiver thereof. A waiver must be in writing and signed by Administrative Agent and Required Lenders (or by all Lenders, if required hereunder) to be effective, and such waiver will be effective only in the specific instance and for the specific purpose for which it is given. 14.12 MULTIPLE COUNTERPARTS. The Loan Documents may be executed in a number of identical counterparts, each of which shall be deemed an original for all purposes and all of which constitute, collectively, one agreement; but, in making proof of any Loan Document, it shall not be necessary to produce or account for more than one such counterpart. It is not necessary that each Lender execute the same counterpart so long as identical counterparts are executed by Borrower, each Lender, and Administrative Agent. This Agreement shall become effective when counterparts hereof shall have been executed and delivered to Administrative Agent by each Lender, Administrative Agent, and Borrower, or, when Administrative Agent shall have received telecopied, telexed, or other evidence satisfactory to it that such party has executed and is delivering to Administrative Agent a counterpart hereof. 14.13 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS. (a) This Agreement shall be binding upon, and inure to the benefit of the parties hereto and their respective successors and assigns, except that (i) Borrower may not, directly or indirectly, assign or transfer, or attempt to assign or transfer, any of its Rights, duties, or obligations under any Loan Documents without the express written consent of all Lenders, and (ii) except as permitted under this Section, no Lender may transfer, pledge, assign, sell any participation in, or otherwise encumber its portion of the Obligation. 49 NBPLP CREDIT AGREEMENT (b) Each Lender may assign to one or more Eligible Assignees all or a portion of its Rights and obligations under the Loan Documents (including, without limitation, all or a portion of its Borrowings and its Notes to the extent any Principal Debt owed to such assigning Lender is evidenced by a Note or Notes); provided, however, that: (i) each such assignment shall be to an Eligible Assignee; (ii) except in the case of an assignment to another Lender or in the case of an assignment of all of a Lender's Rights and obligations under the Loan Documents, any such partial assignment under the Facility shall not be less than $5,000,000 unless Borrower and Administrative Agent consent thereto (in their sole discretion) in writing which may be evidenced by their acceptance and execution of the related Assignment and Acceptance Agreement; provided that, no partial assignment for the Facility (including any assignment among Lenders) may result in any Lender holding less than $10,000,000, provided further that, a Lender may hold an amount less than $10,000,000 but greater than $5,000,000 only if such Lender shall hold at least $10,000,000 in the aggregate of this Facility and the 364-Day Agreement (notwithstanding the foregoing, in the event the 364-Day Agreement is terminated, any Lender may continue to hold an amount in this Facility greater than or equal to the amount such Lender held on the date of the termination of the 364-Day Agreement); (iii) the parties to such assignment shall execute and deliver to Administrative Agent for its acceptance an Assignment and Acceptance Agreement in the form of EXHIBIT E hereto, together with any Notes (to the extent any Principal Debt owed to such assigning Lender is evidenced by a Note or Notes) subject to such assignment and a processing fee of $3,500, including, without limitation, any assignment between Lenders; and (iv) so long as any Lender is an Agent under this Agreement, such Lender (or an Affiliate of such Lender) shall retain an economic interest in the Loan Documents, will not assign all of its Rights, duties, or obligations under the Loan Documents, except to an Affiliate of such Lender, and will not enter into any Assignment and Acceptance Agreement that would have the effect of such Lender assigning all of its Rights, duties, or obligations under the Loan Documents to any Person other than an Affiliate of such Lender unless such Agent has relinquished such title in accordance with SECTION 13.1 (with respect to Administrative Agent) or SECTION 13.10 (with respect to the other Agents). Upon execution, delivery, and acceptance of such Assignment and Acceptance Agreement, the assignee thereunder shall be a party hereto and, to the extent of such assignment, have the obligations, Rights, and benefits of a Lender under the Loan Documents and the assigning Lender shall, to the extent of such assignment, relinquish its Rights and be released from its obligations under the Loan Documents. Upon the consummation of any assignment pursuant to this Section, but only upon the request of the assignor or assignee made through Administrative Agent, Borrower shall issue appropriate Notes to the assignor and the assignee, reflecting such Assignment and Acceptance. If the assignee is not incorporated under the laws of the United States of America or a state thereof, it shall deliver to Borrower and Administrative Agent certification as to exemption from deduction or withholding of Taxes in accordance with SECTION 4.6. (c) Administrative Agent shall maintain at its address referred to in SECTION 14.3 a copy of each Assignment and Acceptance Agreement delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment Percentage, and principal amount of the Borrowings owing to, each Lender from time to time (the "REGISTER"). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and 50 NBPLP CREDIT AGREEMENT Borrower, Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of the Loan Documents. The Register shall be available for inspection by Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice. Upon the consummation of any assignment in accordance with this SECTION 14.13, SCHEDULE 2.1 shall automatically be deemed amended (to the extent required) by Administrative Agent to reflect the name, address, and, where appropriate, respective Committed Sums under the Facility (as the case may be) of the assignor and assignee. (d) Upon its receipt of an Assignment and Acceptance Agreement executed by the parties thereto, together with any Notes (to the extent any Principal Debt owed to such assigning Lender is evidenced by a Note or Notes) subject to such assignment and payment of the processing fee, Administrative Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of EXHIBIT E hereto, (i) accept such Assignment and Acceptance Agreement, (ii) record the information contained therein in the Register, and (iii) give prompt notice thereof to the parties thereto. (e) Subject to the provisions of this Section and in accordance with applicable Law, any Lender may, in the ordinary course of its commercial banking business and in accordance with applicable Law, at any time sell to one or more Persons (each a "PARTICIPANT") participating interests in its portion of the Obligation. In the event of any such sale to a Participant, (i) such Lender shall remain a "Lender" under the Loan Documents and the Participant shall not constitute a "Lender" hereunder, (ii) such Lender's obligations under the Loan Documents shall remain unchanged, (iii) such Lender shall remain solely responsible for the performance thereof, (iv) such Lender shall remain the holder of its share of the Principal Debt for all purposes under the Loan Documents, (v) Borrower and Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender's Rights and obligations under the Loan Documents, and (vi) such Lender shall be solely responsible for any withholding taxes or any filing or reporting requirements relating to such participation and shall hold Borrower and Administrative Agent and their respective successors, permitted assigns, officers, directors, employees, agents, and representatives harmless against the same. Participants shall have no Rights under the Loan Documents, other than certain voting Rights as provided below. Subject to the following, each Lender shall be entitled to obtain (on behalf of its Participants) the benefits of SECTION 4 with respect to all participations in its part of the Obligation outstanding from time to time, so long as Borrower shall not be obligated to pay any amount in excess of the amount that would be due to such Lender under SECTION 4 calculated as though no participations have been made. No Lender shall sell any participating interest under which the Participant shall have any Rights to approve any amendment, modification, or waiver of any Loan Document, except to the extent such amendment, modification, or waiver extends the due date for payment of any amount in respect of principal (other than mandatory prepayments), interest, or fees due under the Loan Documents, reduces the interest rate or the amount of principal or fees applicable to the Obligation (except such reductions as are contemplated by the Loan Documents), or releases all or any substantial portion of the Guaranties under the Loan Documents; provided that, in those cases where a Participant is entitled to the benefits of SECTION 4 or a Lender grants Rights to its Participants to approve amendments to or waivers of the Loan Documents respecting the matters previously described in this sentence, such Lender must include a voting mechanism in the relevant participation agreement or agreements, as the case may be, whereby a majority of such Lender's portion of the Obligation (whether held by such Lender or Participant) shall control the vote for all of such Lender's portion of the Obligation. Except in the case of the sale of a participating interest to another Lender, the relevant participation agreement shall not permit the Participant to transfer, pledge, assign, sell participations in, or otherwise encumber its portion of the Obligation, unless the consent of the transferring Lender (which consent will not be unreasonably withheld) has been obtained. 51 NBPLP CREDIT AGREEMENT (f) Notwithstanding any other provision set forth in this Agreement, any Lender may, without notice to, or the consent of Borrower or Administrative Agent, at any time assign and pledge all or any portion of its Borrowings and its Notes (to the extent any Principal Debt owed to such assigning Lender is evidenced by a Note or Notes) to any Federal Reserve Bank as collateral security pursuant to Regulation A and any Operating Circular issued by such Federal Reserve Bank or any Lender which is a fund may pledge all or any portion of its Borrowings and its Notes (to the extent any Principal Debt owed to such assigning Lender is evidenced by a Note or Notes) to its trustee in support of its obligations to its trustee. No such assignment shall release the assigning Lender from its obligations hereunder. (g) Any Lender may furnish any information concerning the Loan Parties in the possession of such Lender from time to time to Eligible Assignees and Participants (including prospective Eligible Assignees and Participants), subject to the provisions of SECTION 14.14. 14.14 CONFIDENTIALITY. The Administrative Agent and each Lender (each, a "LENDING PARTY") agrees to keep confidential any information furnished or made available to it by any Loan Party pursuant to this Agreement that is marked confidential; provided that nothing herein shall prevent any Lending Party from disclosing such information (a) to any other Lending Party or any affiliate of any Lending Party, or any officer, director, employee, agent, or advisor of any Lending Party or affiliate of any Lending Party, (b) to any other Person if reasonably incidental to the administration of the credit facility provided herein, (c) as required by any law, rule, or regulation, (d) upon the order of any court or administrative agency, (e) upon the request or demand of any regulatory agency or authority, (f) that is or becomes available to the public or that is or becomes available to any Lending Party other than as a result of a disclosure by any Lending Party prohibited by this Agreement, (g) in connection with any litigation to which such Lending Party or any of its affiliates may be a party, (h) to the extent necessary in connection with the exercise of any remedy under this Agreement or any other Loan Document, and (i) subject to provisions substantially similar to those contained in this Section, to any actual or proposed Participant or Eligible Assignee. 14.15 DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN CIRCUMSTANCES. The obligations of each Loan Party under the Loan Documents shall remain in full force and effect until termination of the Commitment, payment in full of the Principal Debt and of all interest, fees, and other amounts of the Obligation then due and owing, and expiration of all LCs, except that SECTIONS 4, 12, and 14, and any other provisions under the Loan Documents expressly intended to survive by the terms hereof or by the terms of the applicable Loan Documents, shall survive such termination. If at any time any payment of the principal of or interest on any Note or any other amount payable by Borrower under any Loan Document is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy, or reorganization of Borrower or otherwise, the obligations of each Loan Party under the Loan Documents with respect to such payment shall be reinstated as though such payment had been due but not made at such time. 14.16 NO GENERAL PARTNERS' LIABILITY. The Lenders agree for themselves and their respective successors and assigns, including any subsequent holder of any Note, that any claim against Borrower which may arise under any Loan Document shall be made only against and shall be limited to the assets of Borrower, except to the extent Intermediate Partnership may have obligations with respect to such claim pursuant to the terms of its Guaranty, and that no judgment, order or execution entered in any suit, action or proceeding, whether legal or equitable, on this Agreement, such Note or any of the other Loan Documents shall be obtained or enforced against any General Partner or its assets for the purpose of obtaining satisfaction and payment of such Note, the Debt evidenced thereby or any claims arising thereunder or under this Agreement or any other Loan Document, any right to proceed against the General Partners individually or their respective assets being hereby expressly waived, renounced and remitted by the Lenders for themselves and their respective successor and assigns. Nothing in this SECTION 14.16, however, shall be construed so as to prevent the Administrative Agent, any Lender or any other holder of any Note from commencing any action, suit or proceeding with respect to or causing legal papers to be served upon any General Partner for the purpose of obtaining jurisdiction over Borrower. 52 NBPLP CREDIT AGREEMENT [REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURE PAGES FOLLOW.] 53 NBPLP CREDIT AGREEMENT NORTHERN BORDER PARTNERS, L.P. By: /s/ JERRY L. PETERS --------------------------------- Name: Jerry L. Peters -------------------------- Title: Chief Financial and Accounting Officer -------------------------- Address for Notices: Northern Border Partners, L.P. 1400 Smith Street Houston, TX 77002 Attn: Angus Hardie Davis NBP Services Corporation Telephone: 713/853-6941 Telecopy: 713/646-4970 with a copy to: Mr. Jerry L. Peters Chief Financial and Accounting Officer Northern Border Partners, L.P. 1111 South 103rd Street Omaha, NE 68124-1000 Telephone: 402/398-7722 Telecopy: 402/398-7803 and with a copy to: Ms. Janet Place Vice President, Legal Northern Plains Natural Gas Company 1111 South 103rd Street Omaha, NE 68124-1000 Telephone: 402/398-7886 Telecopy: 402/398-7780 [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] BANK OF AMERICA, N.A., as Administrative Agent and as a Lender By: /s/ DENISE A. SMITH ------------------------------------ Denise A. Smith Managing Director [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] SUNTRUST BANK By: /s/ STEVEN J. NEWBY ------------------------------------ Name: Steven J. Newby ------------------------------ Title: Vice President ------------------------------ [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] BANK ONE, NA By: /s/ HELEN A. CARR ------------------------------------ Name: Helen A. Carr ------------------------------ Title: First Vice President ------------------------------ [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] BANK OF MONTREAL By: /s/ CAHAL B. CARMODY ------------------------------------ Name: Cahal B. Carmody ------------------------------ Title: Director ------------------------------ [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] ROYAL BANK OF CANADA By: /s/ DAVID A. McCLUSKEY ------------------------------------ Name: David A. McCluskey ------------------------------ Title: Manager ------------------------------ [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] THE FUJI BANK, LIMITED By: /s/ JAQUES AZAGURY ------------------------------------ Name: Jaques Azagury ------------------------------ Title: Senior Vice President & Manager ------------------------------ [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] FIRST NATIONAL BANK OF OMAHA By: /s/ JEFF A. SIMS ------------------------------------ Name: Jeff A. Sims ------------------------------ Title: Vice President ------------------------------ [THIS IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT] SCHEDULE 2.1 LENDERS AND COMMITMENTS
COMMITMENT LENDER COMMITMENT PERCENTAGE - ------------------------------- ------------ -------------- Bank of America, N.A. $ 15,000,000 20.000000000% SunTrust Bank 12,500,000 16.666666667% Bank One, NA 12,500,000 16.666666667% Bank of Montreal 10,000,000 13.333333333% Royal Bank of Canada 10,000,000 13.333333333% The Fuji Bank, Limited 10,000,000 13.333333333% First National Bank of Omaha 5,000,000 06.666666667% ------------ Total $ 75,000,000 100.000000000%
SCHEDULE 7.1 CONDITIONS PRECEDENT TO CLOSING The Agreement and related Loan Documents shall not become effective unless Administrative Agent has received all of the following (unless otherwise indicated, all documents shall be dated as of the Closing Date, and all terms used with their initial letters capitalized are used herein with their meanings as defined in the Agreement): 1. The Agreement. The Agreement (together with all Schedules and Exhibits thereto) executed by Borrower, each Lender, and Administrative Agent. 2. Delivery of Notes. With respect to any Lender requesting Notes, the Administrative Agent shall have received, for the account of each such Lender, its Notes duly executed and delivered by Borrower. 3. Guaranty. The Administrative Agent shall have received the Guaranty duly executed and delivered by Intermediate Partnership. 4. Resolutions, etc. (a) The Administrative Agent shall have received from the Secretary or an Assistant Secretary of the Administrator of each of Borrower and Intermediate Partnership a certificate, dated the Closing Date, as to: (i) copies of action taken by the Partnership Policy Committee of Borrower or Intermediate Partnership or other partnership action of Borrower or Intermediate Partnership with respect to the Agreement, the Notes, the Guaranty and any other Loan Document to be signed by Borrower or Intermediate Partnership, as the case may be; (ii) the incumbency and signatures of those of the officers of Borrower and Intermediate Partnership authorized to act with respect to the Agreement, the Notes, the Guaranty and each other Loan Document executed on behalf of Borrower or Intermediate Partnership, as the case may be; (iii) the Partnership Agreement or Intermediate Partnership Agreement (as the case may be) and all amendments and supplements thereto; and (iv) the Partnership Agreement of NBPC and all amendments and supplements thereto. (b) The Administrative Agent shall have received from the Borrower and Intermediate Partnership certificates of appropriate public officials as to the existence and good standing of such entity in its jurisdiction of organization. (c) The Administrative Agent shall have received a certificate executed by a Responsible Officer stating that the representations and warranties contained in SECTION 8 are true and correct in all respects on and as of the Closing Date, and no Potential Default or Default has occurred and is continuing as of the Closing Date. 5. Opinions of Counsel. The Administrative Agent shall have received opinions, dated the date of the Closing Date and addressed to the Administrative Agent and all Lenders, from (i) Vinson & Elkins, L.L.P. counsel to Borrower and Intermediate Partnership, substantially in the form of EXHIBIT F-1 hereto; (ii) Janet Place, Vice President and General Counsel of Northern Plains Natural Gas Company, substantially in the form of EXHIBIT F-2 hereto; (iii) counsel for Pan Border, substantially in the form of EXHIBIT F-3 hereto and (iv) counsel for Northwest Border, substantially in the form of EXHIBIT F-4 hereto. 6. Terminating Commitments under Existing Credit Agreements. Repayment of all amounts owed under the Existing Credit Agreements and evidence satisfactory to Administrative Agent of termination of commitments to extend credit thereunder. 7. Debt Ratings. Evidence satisfactory to Administrative Agent that Borrower shall have received from Moody's and S&P investment-grade ratings for its long-term senior unsecured, non-credit enhanced debt. 8. Borrowing Notice. If applicable, a duly completed Borrowing Notice for the initial Borrowing, delivered to Administrative Agent. 9. Payment of Fees and Closing Fees. Payment of all fees payable on or prior to the Closing Date to Administrative Agent, Arranger, or any Lender, including those provided for in SECTION 5 of the Agreement, together with reimbursements to Administrative Agent and Arranger for all fees and expenses incurred in connection with the negotiation, preparation, and closing of the transactions evidenced by the Loan Documents (including, without limitation, attorneys' fees and expenses). 10. Appointment of Agent. Evidence satisfactory to Administrative Agent that each of Borrower and Guarantor has appointed an agent for service of process pursuant to SECTION 14.10. 11. Other Documents. Such other agreements, documents, instruments, opinions, certificates, and evidences as Administrative Agent may reasonably request. 2 SCHEDULE 8.3 SUBSIDIARIES AND PARTNERSHIP INTERESTS
Subsidiary of Borrower Name of Subsidiary Percentage Owned - ------------------ ---------------- Northern Border Intermediate Limited Partnership 99% (limited partnership interest)
Subsidiaries of Intermediate Partnership Name of Subsidiary Percentage Owned - ------------------ ---------------- Northern Border Pipeline Company, a Texas 70% (general partnership interest) general partnership NBP Energy Pipelines, L.L.C., a Delaware 100% limited liability company Black Mesa Holdings, Inc., a Delaware corporation 100% Black Mesa Pipeline Operations, L.L.C., 100% a Delaware limited liability company Black Mesa Technologies, Inc., 100% an Oklahoma corporation Black Mesa Technologies Services, L.L.C. 60% an Oklahoma limited liability company Subsidiaries of Black Mesa Holdings, Inc. Black Mesa Pipeline, Inc., a Delaware corporation 100% Other Investments Bighorn Gas Gathering, L.L.C. 39% (common membership interest) 80% of Preferred A shares
SCHEDULE 10.1 EXISTING DEBT (THOUSANDS OF DOLLARS)
NORTHERN BORDER PIPELINE COMPANY: 4/30/00 --------- Senior Notes - average 8.43% due from 2000 to 2003 250,000 Pipeline Credit Agreement Term loan due 2002 429,000 Five-year revolving credit facility 15,000 Senior Notes - 7.75% due 2009 200,000 Unamortized proceeds from termination of interest rate forward agreements 12,074 Unamortized debt discount (913) --------- 905,161 BLACK MESA HOLDINGS, INC. AND BLACK MESA PIPELINE, INC.: 10.7% Note Agreement, due quarterly to 2004 15,509
SCHEDULE 14.3 ADDRESSES FOR NOTICES ADMINISTRATIVE AGENT Notices (other than Requests for Extensions of Credit): Bank of America, N.A. 901 Main Street, 64th Floor Dallas, Texas 75202 Attn: Ms. Denise Smith Managing Director Phone: (214) 209-1261 Fax: (214) 209-1285 with a copy to: Bank of America, N.A. 901 Main Street, 64th Floor Dallas, Texas 75202 Attn: Mr. Ben Cosgrove Phone: (214) 209-9254 Fax: (214) 290-9439 Requests for Extensions of Credit (Borrowings and LCs): Bank of America, N.A., as Administrative Agent 901 Main Street, 64th Floor Dallas, Texas 75202 Attn: Mr. Ben Cosgrove Phone: (214) 209-9254 Fax: (214) 290-9439 BANK OF AMERICA, N.A., as a Bank Address for Notices: Bank of America, N.A. 901 Main Street, 64th Floor Dallas, Texas 75202 Attn: Ms. Denise Smith Managing Director Phone: (214) 209-1261 Fax: (214) 209-1285 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): Bank of America, N.A. 901 Main Street Dallas, Texas 75202 Attn: Mr. Ben Cosgrove Phone: (214) 209-9254 Fax: (214) 290-9439 SUNTRUST BANK Address For Notices: SunTrust Bank 303 Peachtree Street NE, Third Floor Atlanta, Georgia 30308 Attn: Mr. Todd Davis Vice President Phone: (404) 658-4917 Fax: (404) 827-6270 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): SunTrust Bank 25 Park Place M/C 1941, 21st Floor Atlanta, Georgia 30303 Attn: Ms. Ernestine Fambraugh Corporate Banking Assistant Phone: (404) 581-1612 Fax: (404) 575-2730 BANK ONE, NA Address for Notices: Bank One, NA 1 Bank One Plaza 10th Floor, Suite 0634 Chicago, Illinois 60670 Attn: Mr. John Beirne Phone: (312) 732-3659 Fax: (312) 732-4840 with a copy to: Bank One, NA 910 Travis Street, 6th Floor Houston, Texas 77002 Attn: Ms. Helen Carr Phone: (713) 751-3731 Fax: (713) 751-3760 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): Bank One, NA 1 Bank One Plaza 10th Floor, Suite 0634 Chicago, Illinois 60670 Attn: Mr. John Beirne Phone: (312) 732-3659 Fax: (312) 732-4840 BANK OF MONTREAL Addresses For Notices: BMO Nesbitt Burns 700 Louisiana Street, Suite 4400 Houston, Texas 77002 Attn: Mr. Cahal Carmody Vice President Phone: (713) 546-9750 Fax: (713) 223-4007 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): Bank of Montreal 115 South LaSalle Floor 11 West Chicago, Illinois 60603 Attn: Mr. Keiko Kuze Client Services Officer Phone: (312) 750-3771 Fax: (312) 750-4304 ROYAL BANK OF CANADA Address For Notices: Royal Bank of Canada c/o New York Branch One Liberty Plaza, 4th Floor New York, New York 10006 Attn: Ms. Linda Joannou Phone: (416) 955-6569 Fax: (416) 955-6720 with a copy to: Royal Bank of Canada 5700 Williams Tower 2800 Post Oak Boulevard Houston, Texas 77056 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): First National Bank of Omaha 1620 Dodge Omaha, Nebraska 68102 Attn: Mr. Jeff Sims Phone: (402) 633-3511 Fax: (402) 633-33519 Attn: Mr. David A. McCluskey Manager Phone: (713) 403-5666 Fax: (713) 403-5624 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): Royal Bank of Canada, New York c/o New York Branch One Liberty Plaza, 4th Floor New York, New York 10006 Attn: Ms. Linda Joannou Phone: (416) 955-6569 Fax: (416) 955-6720 THE FUJI BANK, LIMITED Address For Notices: The Fuji Bank, Limited One Houston Center, Suite 4100 1221 McKinney Street Houston, Texas 77010 Attn: Mr. Jacques Azagury Phone: (713) 650-7845 Fax: (713) 759-0048 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): The Fuji Bank, Limited 2 World Trade Center, 79th Floor New York, New York 10048 Attn: Tina Catapano Phone: (212) 898-2099 Fax: (212) 488-8216 FIRST NATIONAL BANK OF OMAHA Address For Notices: First National Bank of Omaha 1620 Dodge Omaha, Nebraska 68102 Attn: Mr. Jeff Sims Phone: (402) 633-3511 Fax: (402) 633-3519 Applicable Lending Office (Base Rate Borrowings and Eurodollar Rate Borrowings): First National Bank of Omaha 1620 Dodge Omaha, Nebraska 68102 Attn: Mr. Jeff Sims Phone: (402) 633-3511 Fax: (402) 633-3519 EXHIBIT A FORM OF NOTE $ ------------- ------------ --, ---- FOR VALUE RECEIVED, the undersigned, NORTHERN BORDER PARTNERS, L.P., a Delaware limited partnership ("BORROWER"), hereby promises to pay to the order of ______________________ ("LENDER"), at the offices of BANK OF AMERICA, N.A., as Administrative Agent for Lender and others as hereinafter described, on the Termination Date for the Facility, the lesser of (a) $_______________ and (b) the aggregate Principal Debt disbursed by Lender to Borrower and outstanding and unpaid on the Termination Date for the Facility (together with accrued and unpaid interest thereon). This note has been executed and delivered under, and is subject to the terms of, the Revolving Credit Agreement, dated as of June 28, 2000 (as amended, modified, supplemented, or restated from time to time, the "CREDIT AGREEMENT"), among Borrower, Administrative Agent, and Lender and other lenders and Agents party thereto, and is one of the "Notes" referred to therein. Unless defined herein, capitalized terms used herein that are defined in the Credit Agreement have the meaning given to such terms in the Credit Agreement. Reference is made to the Credit Agreement for provisions affecting this note regarding applicable interest rates, principal and interest payment dates, final maturity, voluntary and mandatory prepayments, acceleration of maturity, exercise of Rights, payment of attorneys' fees, court costs, and other costs of collection, certain waivers by Borrower and others now or hereafter obligated for payment of any sums due hereunder and security for the payment hereof. Without limiting the immediately preceding sentence, reference is made to SECTION 3.9 of the Credit Agreement for usury savings provisions. THE LAWS OF THE STATE OF TEXAS, AND THE APPLICABLE FEDERAL LAWS OF THE UNITED STATES OF AMERICA SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION HEREOF. NORTHERN BORDER PARTNERS, L.P. By: ---------------------------- Name: ----------------------- Title: ---------------------- EXHIBIT B-1 FORM OF BORROWING NOTICE (Northern Border Partners, L.P.) Dated: ______________ __, ____ Bank of America, N.A. as Administrative Agent for the Lenders as defined in the Credit Agreement referred to below 901 Main Street Dallas, TX 75202 Attn: Ben Cosgrove Reference is made to the Revolving Credit Agreement, dated as of June 28, 2000 (as amended, modified, supplemented, or restated from time to time, the "CREDIT AGREEMENT"), among Northern Border Partners, L.P., a Delaware limited partnership ("BORROWER"), Bank of America, N.A., as Administrative Agent, and Lenders party thereto. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. Borrower hereby gives you notice pursuant to SECTION 2.5 of the Credit Agreement that it requests a Borrowing under the Credit Agreement, and in that connection sets forth below the terms on which such Borrowing is requested to be made: (A) Borrowing Date of Borrowing(1) (A) -------------------------- (B) Amount of Borrowing(2) (B) -------------------------- (C) Type of Borrowing(3) (C) -------------------------- (D) For a Eurodollar Rate Borrowing, the Interest Period and the last day thereof(4) (D) -------------------------- Borrower hereby certifies that the following statements are true and correct on the date hereof, and will be true and correct on the Borrowing Date specified herein after giving effect to such Borrowing: (a) The requested Borrowing will not cause the Principal Debt to exceed the Commitment; (b) All of the representations and warranties of the Loan Parties set forth in the Loan Documents are true and correct in all material respects (except to the extent that the representations and warranties speak to a specific date); (c) No Default or Potential Default has occurred and is continuing or will arise after giving effect to the requested Borrowing. Very truly yours, NORTHERN BORDER PARTNERS, L.P. By: ------------------------------ Name: ------------------------- Title: ------------------------ Notes: (1) For any Borrowing under the Facility must be a Business Day occurring prior to the Termination Date and be at least (a) three Business Days following receipt by Administrative Agent of this Borrowing Notice for any Eurodollar Rate Borrowing, and (b) on or before the Business Day following receipt by Administrative Agent of this Borrowing Notice for any Base Rate Borrowing. (2) Not less than $5,000,000 or an integral multiple of $1,000,000 for the Facility. (3) Eurodollar Rate Borrowing or Base Rate Borrowing. (4) 1, 2, 3, or 6 months -- in no event may the Interest Period for the Facility end after the Termination Date. 2 EXHIBIT B-2 FORM OF CONVERSION NOTICE (Northern Border Partners, L.P.) Dated: ______________ __, ____ Bank of America, N.A. as Administrative Agent for the Lenders as defined in the Credit Agreement referred to below 901 Main Street Dallas, TX 75202 Attn: Ben Cosgrove Reference is made to the Revolving Credit Agreement, dated as of June 28, 2000 (as amended, modified, supplemented, or restated from time to time, the "CREDIT AGREEMENT"), among Northern Border Partners, L.P., a Delaware limited partnership ("BORROWER"), Bank of America, N.A., as Administrative Agent, and Lenders party thereto. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. Borrower hereby gives you notice pursuant to SECTION 3.11 of the Credit Agreement that it elects to convert a Borrowing under the Credit Agreement from one Type to another Type or elects a new Interest Period for a Eurodollar Rate Borrowing, and in that connection sets forth below the terms on which such election is requested to be made: (A) Date of conversion or last day of applicable Interest Period(1) (A) -------------------------- (B) Principal amount of existing Borrowing being converted or continued(2) (B) -------------------------- (C) New Type of Borrowing selected (or Type of Borrowing continued)(3) (C) -------------------------- (D) For conversion to, or continuation of, a Eurodollar Rate Borrowing, Interest Period and the last day thereof(4) (D) -------------------------- As of the date hereof and of the requested Conversion, no Default or Potential Default has occurred and is continuing. Very truly yours, NORTHERN BORDER PARTNERS, L.P. By: --------------------------- Name: ---------------------- Title: --------------------- (1) Must be a Business Day at least (a) three Business Days following receipt by Administrative Agent of this Conversion Notice for any conversion from a Base Rate Borrowing to a Eurodollar Rate Borrowing or a continuation of a Eurodollar Rate Borrowing for an additional Interest Period, and (b) on or before the Business Day following receipt by Administrative Agent of this Conversion Notice for a conversion from a Eurodollar Rate Borrowing to a Base Rate Borrowing. (2) Not less than $5,000,000 or a greater integral multiple of $1,000,000 (if a Eurodollar Rate Borrowing). (3) Eurodollar Rate Borrowing or Base Rate Borrowing. (4) 1, 2, 3, or 6 months -- in no event may the Interest Period for the Facility end after the Termination Date. 2 EXHIBIT B-3 FORM OF LC REQUEST (Northern Border Partners, L.P.) -------------- --, ---- Bank of America, N.A. as Administrative Agent for the Lenders as defined in the Credit Agreement referred to below 901 Main Street Dallas, TX 75202 Attn: Ben Cosgrove Reference is made to the Revolving Credit Agreement, dated as of June 28, 2000 (as amended, modified, supplemented, or restated from time to time, the "CREDIT AGREEMENT"), among Northern Border Partners, L.P., a Delaware limited partnership ("BORROWER"), Bank of America, N.A., as Administrative Agent, and Lenders party thereto. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. Borrower hereby gives you notice pursuant to SECTION 2.2(A) of the Credit Agreement that it requests the issuance of an LC under the LC Subfacility, and in that connection sets forth below the terms on which such LC is requested to be issued: (A) Face amount of the LC(1) ---------------------- (B) Date on which the LC is to be issued(2) ---------------------- (C) Expiration date of the LC(3) ---------------------- Accompanying this notice is a duly executed and properly completed LC Agreement in the form requested by Administrative Agent, together with the payment of any LC fronting fees due and payable pursuant to SECTION 5.4(b) of the Credit Agreement. Borrower hereby certifies that the following statements are true and correct on the date hereof, and will be true and correct on the date specified herein for issuance of the LC, after giving effect to the issuance of such LC: (a) the Commitment Usage does not exceed the Commitment; (b) the LC Exposure does not exceed $50,000,000; (c) all of the representations and warranties of all Loan Parties, and any of its Subsidiaries, set forth in the Loan Documents are true and correct in all material respects; (d) no Default or Potential Default has occurred and is continuing or will arise after giving effect to the requested LC. Very truly yours, NORTHERN BORDER PARTNERS, L.P. By: ---------------------------- Name: ----------------------- Title: ---------------------- Rate: --------------------------- Confirmed by: ------------------- (1) Amount of requested LC plus the LC Exposure shall not exceed $50,000,000 (as the maximum amount of such LC Subfacility may be reduced or canceled in accordance with the Loan Documents). (2) Must be a Business Day at least three Business Days following receipt by Administrative Agent of this LC Request. (3) Not later than the earlier of one year from the date of issuance or 30 days prior to the Termination Date. 2 EXHIBIT C FORM OF GUARANTY THIS GUARANTY is executed as of June 28, 2000, by the undersigned ("GUARANTOR"), for the benefit of BANK OF AMERICA, N.A., a national banking association (in its capacity as Administrative Agent for the benefit of Lenders). A. Contemporaneously herewith Borrower shall enter into that certain Revolving Credit Agreement dated as of even date herewith among Borrower, Lenders, Bank of America, N.A., as Administrative Agent, for itself and the other Lenders, SunTrust Bank, Atlanta, as Syndication Agent and Banc One Capital Markets, Inc., as Documentation Agent (as amended, restated or otherwise modified, the "CREDIT AGREEMENT"); and B. As a condition precedent to the making of the initial Borrowing under the Credit Agreement, the Guarantor is required to execute and deliver this Guaranty; and C. The Guarantor has duly authorized the execution, delivery and performance of this Guaranty; and D. It is in the best interests of the Guarantor to execute this Guaranty inasmuch as the Guarantor will derive substantial direct and indirect benefits from the Borrowings made from time to time to Borrower by the Lenders pursuant to the Credit Agreement; and E. This Guaranty is integral to the transactions contemplated by the Loan Documents, and the execution and delivery thereof, is a condition precedent to Lenders' obligations to extend credit under the Loan Documents. ACCORDINGLY, for adequate and sufficient consideration, the receipt and adequacy of which are hereby acknowledged, Guarantor guarantees to Administrative Agent and Lenders the prompt payment of the Guaranteed Debt (defined below) and agrees as follows: 1. DEFINITIONS. Terms defined in the Credit Agreement have the same meanings when used, unless otherwise defined, in this Guaranty. As used in this Guaranty: BORROWER means Borrower, Borrower as a debtor-in-possession, and any receiver, trustee, liquidator, conservator, custodian, or similar party appointed for Borrower or for all or substantially all of Borrower's assets under any Debtor Relief Law. CREDIT AGREEMENT is defined in the recitals to this Guaranty. GUARANTEED DEBT means, collectively, (a) the Obligation, (b) any and all present and future indebtedness, obligations and liabilities of any Loan Party under any present or future Derivative Transactions between any Loan Party and any Lender (or Affiliates of any Lender) and (c) all present and future costs, attorneys' fees, and expenses reasonably incurred by Administrative Agent or any Lender to enforce Borrower's, Guarantor's, or any other obligor's payment of any of the Guaranteed Debt, including, without limitation (to the extent lawful), all present and future amounts that would become due but for the operation of Sections 502 or 506 or any other provision of Title 11 of the United States Code and all present and future accrued and unpaid interest (including, without limitation, all post-maturity interest and any post-petition interest in any proceeding under Debtor Relief Laws to which Borrower or Guarantor becomes subject). GUARANTOR is defined in the preamble to this Guaranty. LENDER means, individually, or LENDERS means, collectively, on any date of determination, Administrative Agent and Lenders. SUBORDINATED DEBT means all present and future obligations of Borrower to Guarantor, whether those obligations are (a) direct, indirect, fixed, contingent, liquidated, unliquidated, joint, several, or joint and several, (b) due or to become due to Guarantor, (c) held by or are to be held by Guarantor, (d) created directly or acquired by assignment or otherwise, or (e) evidenced in writing. 2. GUARANTY. This is an absolute, irrevocable, and continuing guaranty of payment, not collection, and the circumstance that at any time or from time to time the Guaranteed Debt may be paid in full does not affect the obligation of Guarantor with respect to the Guaranteed Debt incurred after that. This Guaranty remains in effect until the Guaranteed Debt is fully paid and performed, all commitments to extend any credit under the Loan Documents have terminated, and all LCs have expired or been terminated. Guarantor may not rescind or revoke its obligations with respect to the Guaranteed Debt. Notwithstanding any contrary provision, it is the intention of Guarantor, Lenders, and Administrative Agent that the amount of the Guaranteed Debt guaranteed by Guarantor by this Guaranty shall be in, but not in excess of, the maximum amount permitted by fraudulent conveyance, fraudulent transfer, or similar Laws applicable to Guarantor. Accordingly, notwithstanding anything to the contrary contained in this Guaranty or any other agreement or instrument executed in connection with the payment of any of the Guaranteed Debt, the amount of the Guaranteed Debt guaranteed by Guarantor by this Guaranty shall be limited to an aggregate amount equal to the largest amount that would not render Guarantor's obligations hereunder subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provision of any applicable state law. 3. CONSIDERATION. Guarantor represents and warrants that its liability under this Guaranty may reasonably be expected to directly or indirectly benefit it. 4. CUMULATIVE RIGHTS. If Guarantor becomes liable for any indebtedness owing by Borrower to Administrative Agent or any Lender, other than under this Guaranty, that liability may not be in any manner impaired or affected by this Guaranty. The Rights of Administrative Agent or Lenders under this Guaranty are cumulative of any and all other Rights that Administrative Agent or Lenders may ever have against Guarantor. The exercise by Administrative Agent or Lenders of any Right under this Guaranty or otherwise does not preclude the concurrent or subsequent exercise of any other Right. 5. PAYMENT UPON DEMAND. If a Default exists, Guarantor shall, on demand and without further notice of dishonor and without any notice having been given to Guarantor previous to that demand of either the acceptance by Administrative Agent or Lenders of this Guaranty or the creation or incurrence of any Guaranteed Debt, pay the amount of the Guaranteed Debt then due and payable to Administrative Agent and Lenders; provided that, if a Default exists and Administrative Agent or Lenders can not, for any reason, accelerate the Obligation, then the Guaranteed Debt shall be, as among Guarantor, Administrative Agent, and Lenders, a fully matured, due, and payable obligation of Guarantor to Administrative Agent and Lenders. It is not necessary for Administrative Agent or Lenders, in order to enforce that payment by Guarantor, first or contemporaneously to institute suit or exhaust remedies against Borrower or others liable on any Guaranteed Debt. 6. SUBORDINATION. The Subordinated Debt is expressly subordinated to the full and final payment of the Guaranteed Debt. Guarantor agrees not to accept any payment of any Subordinated Debt from any Loan Party, or any Subsidiary thereof, if a Default exists. If Guarantor receives any payment of any Subordinated Debt in violation of the foregoing, Guarantor shall hold that payment in trust for Administrative Agent and Lenders and promptly turn it over to Administrative Agent, in the form received (with any necessary endorsements), to be applied to the Guaranteed Debt. 7. SUBROGATION AND CONTRIBUTION. Until payment in full of the Guaranteed Debt, and the termination of the Obligation of Lenders to extend credit under the Loan Documents, (a) Guarantor may not assert, enforce, or otherwise exercise any Right of subrogation to any of the Rights or Liens of Administrative Agent or Lenders or any other beneficiary against Borrower or any other obligor on the Guaranteed Debt or other security or any Right of recourse, reimbursement, subrogation, contribution, indemnification, or similar Right against Borrower or any other obligor on any Guaranteed Debt or any guarantor of it, (b) Guarantor defers all of the foregoing Rights (whether they arise in equity, under contract, by statute, under common law, or otherwise), and (c) Guarantor defers the benefit of, and subordinates any Right to participate in, any security given to Administrative Agent or Lenders or any other beneficiary to secure payment of any Guaranteed Debt. 8. NO RELEASE. Guarantor's obligations under this Guaranty may not be released, diminished, or affected by the occurrence of any one or more of the following events: (a) any taking or accepting of any security or assurance for any Guaranteed Debt; (b) any release, surrender, exchange, subordination, impairment, or loss of any collateral securing any Guaranteed Debt; (c) any full or partial release of the liability of any other obligor on the Obligation, except for any final release resulting from payment in full of such Obligation; (d) the modification of, or waiver of compliance with, any terms of any other Loan Document; (e) the insolvency, bankruptcy, or lack of corporate or partnership power of any other obligor at any time liable for any Guaranteed Debt, whether now existing or occurring in the future; (f) any renewal, extension, or rearrangement of any Guaranteed Debt or any adjustment, indulgence, forbearance, or compromise that may be granted or given by Administrative Agent or any Lender to any other obligor on the Obligation; (g) any neglect, delay, omission, failure, or refusal of Administrative Agent or any Lender to take or prosecute any action in connection with the Guaranteed Debt or to foreclose, take, or prosecute any action in connection with any Loan Document; (h) any failure of Administrative Agent or any Lender to notify Guarantor of any renewal, extension, or assignment of any Guaranteed Debt, or the release of any security or of any other action taken or refrained from being taken by Administrative Agent or any Lender against Borrower or any new agreement between Administrative Agent, any Lender, and Borrower; it being understood that neither Administrative Agent nor any Lender is required to give Guarantor any notice of any kind under any circumstances whatsoever with respect to or in connection with any Guaranteed Debt, other than any notice required to be given to Guarantor by Law or elsewhere in this Guaranty; (i) the unenforceability of any Guaranteed Debt against any other obligor or any security securing same because it exceeds the amount permitted by Law, the act of creating it is ultra vires, the officers creating it exceeded their authority or violated their fiduciary duties in connection with it, or otherwise; or (j) any payment of the Obligation to Administrative Agent or any Lender is held to constitute a preference under any Debtor Relief Law or for any other reason Administrative Agent or any Lender is required to refund that payment or make payment to someone else (and in each such instance this Guaranty will be reinstated in an amount equal to that payment). 9. WAIVERS. By execution hereof, Guarantor acknowledges and agrees to the waivers set forth in SECTION 11.2 of the Credit Agreement. To the maximum extent lawful, Guarantor waives all Rights by which it might be entitled to require suit on an accrued right of action in respect of any Guaranteed Debt or require suit against Borrower or others, whether arising under Section 34.02 of the Texas Business and Commerce Code, as amended (regarding its Right to require Administrative Agent or Lenders to sue Borrower on accrued right of action following its written notice to Administrative Agent or Lenders), Section 17.001 of the Texas Civil Practice and Remedies Code, as amended (allowing suit against it without suit against Borrower, but precluding entry of judgment against it before entry of judgment against Borrower), Rule 31 of the Texas Rules of Civil Procedure, as amended (requiring Administrative Agent or Lenders to join Borrower in any suit against it unless judgment has been previously entered against Borrower), or otherwise. 10. LOAN DOCUMENTS. By execution hereof, Guarantor covenants and agrees that all representations, warranties, terms, covenants, and conditions set forth in the Credit Agreement which state that they apply to Guarantor are applicable to Guarantor and shall be imposed upon Guarantor, and Guarantor reaffirms that each such representation and warranty is true and correct and covenants and agrees to promptly and properly perform, observe, and comply with each such term, covenant, or condition. Guarantor acknowledges and agrees that this Guaranty is subject to the offset provisions of Section 3.14 of the Credit Agreement in favor of Administrative Agent and Lenders. In the event the Credit Agreement or any other Loan Document shall cease to remain in effect for any reason whatsoever during any period when any part of the Guaranteed Debt remains unpaid, the terms, covenants, and agreements of the Credit Agreement or such other Loan Document incorporated herein by reference shall nevertheless continue in full force and effect as obligations of Guarantor under this Guaranty. 11. RELIANCE AND DUTY TO REMAIN INFORMED. Guarantor confirms that it has executed and delivered this Guaranty after reviewing the terms and conditions of the Loan Documents and such other information as it has deemed appropriate in order to make its own credit analysis and decision to execute and deliver this Guaranty. Guarantor confirms that it has made its own independent investigation with respect to Borrower's creditworthiness and is not executing and delivering this Guaranty in reliance on any representation or warranty by Administrative Agent or any Lender as to that creditworthiness. Guarantor expressly assumes all responsibilities to remain informed of the financial condition of Borrower and any circumstances affecting Borrower's ability to perform under the Loan Documents to which it is a party. 12. NO REDUCTION. The Guaranteed Debt may not be reduced, discharged, or released because or by reason of any existing or future offset, claim, or defense (except for the defense of complete and final payment of the Guaranteed Debt) of Borrower or any other obligor against Administrative Agent or any Lender or against payment of the Guaranteed Debt, whether that offset, claim, or defense arises in connection with the Guaranteed Debt or otherwise. Those claims and defenses include, without limitation, failure of consideration, breach of warranty, fraud, bankruptcy, incapacity/infancy, statute of limitations, lender liability, accord and satisfaction, usury, forged signatures, mistake, impossibility, frustration of purpose, and unconscionability. 13. INSOLVENCY OF GUARANTOR. Should Guarantor become insolvent, or fail to pay Guarantor's debts generally as they become due, or voluntarily seek, consent to, or acquiesce in, the benefit or benefits of any Debtor Relief Law (other than as a creditor or claimant), or become a party to (or be made the subject of) any proceeding provided for by any Debtor Relief Law (other than as a creditor or claimant) that could suspend or otherwise adversely affect the Rights of Administrative Agent or any Lender granted hereunder, then, in any such event, the Guaranteed Debt shall be, as among Guarantor, Administrative Agent and Lenders, a fully matured, due, and payable obligation of Guarantor to Administrative Agent and Lenders (without regard to whether Borrower is then in default under the Loan Documents or whether the Obligation, or any part thereof, is then due and owing by Borrower to any Lender), payable in full by Guarantor to Lenders upon demand, and the amount thereof so payable shall be the estimated amount owing in respect of the contingent claim created hereunder. 14. LOAN DOCUMENT. This Guaranty is a Loan Document and is subject to the applicable provisions of SECTIONS 1 and 14 of the Credit Agreement, including, without limitation, the provisions relating to GOVERNING LAW, JURISDICTION, VENUE AND SERVICE OF PROCESS, all of which are incorporated into this Guaranty by reference the same as if set forth in this Guaranty verbatim. 15. NOTICES. For purposes of SECTION 14.3 of the Credit Agreement, Guarantor's address and telecopy number are as set forth next to Guarantor's signature on the signature page hereof. 16. AMENDMENTS, ETC. No amendment, waiver, or discharge to or under this Guaranty is valid unless it is in writing and is signed by the party against whom it is sought to be enforced and is otherwise in conformity with the requirements of SECTION 14.11 of the Credit Agreement. 17. ADMINISTRATIVE AGENT AND LENDERS. Administrative Agent is Administrative Agent for each Lender under the Credit Agreement. All Rights granted to Administrative Agent under or in connection with this Guaranty are for each Lender's ratable benefit. Administrative Agent may, without the joinder of any Lender, exercise any Rights in Administrative Agent's or Lenders' favor under or in connection with this Guaranty. Administrative Agent's and each Lender's Rights and obligations vis-a-vis each other may be subject to one or more separate agreements between those parties. However, Guarantor is not required to inquire about any such agreement or is subject to any terms of it unless Guarantor specifically joins such agreement. Therefore, neither Guarantor nor its successors or assigns is entitled to any benefits or provisions of any such separate agreement or is entitled to rely upon or raise as a defense any party's failure or refusal to comply with the provisions of such agreement. 18. PARTIES. This Guaranty benefits Administrative Agent, Lenders, and their respective successors and assigns and binds Guarantor and its successors and assigns. Upon appointment of any successor Administrative Agent under the Credit Agreement, all of the Rights of Administrative Agent under this Guaranty automatically vest in that new Administrative Agent as successor Administrative Agent on behalf of Lenders without any further act, deed, conveyance, or other formality other than that appointment. The Rights of Administrative Agent and Lenders under this Guaranty may be transferred with any assignment of the Guaranteed Debt. The Credit Agreement contains provisions governing assignments of the Guaranteed Debt and of Rights and obligations under this Guaranty. 19. NO GENERAL PARTNERS' LIABILITY. By their acceptance of this Guaranty, the Administrative Agent and the Lenders agree for themselves and their respective successors and assigns, including any subsequent holder of any Note, that any claim against Guarantor which may arise under this Guaranty shall be made only against and shall be limited to the assets of Guarantor, and that no judgment, order or execution entered in any suit, action or proceeding, whether legal or equitable, on this Guaranty shall be obtained or enforced against any general partner of Guarantor (individually, a "GENERAL PARTNER", and collectively, "GENERAL PARTNERS") or its or their assets for the purpose of obtaining satisfaction and payment of this Guaranty, the Guaranteed Debt or any claims arising hereunder, any right to proceed against the General Partners individually or their respective assets being hereby expressly waived, renounced and remitted by the Lenders for themselves and their respective successor and assigns. Nothing in this SECTION 19, however, shall be construed so as to prevent the Administrative Agent, any Lender or any other holder of any Note from commencing any action, suit or proceeding with respect to or causing legal papers to be served upon any General Partner for the purpose of obtaining jurisdiction over Guarantor. REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURE PAGE TO FOLLOW. EXECUTED as of the date first stated in this Guaranty. Address: NORTHERN BORDER INTERMEDIATE LIMITED PARTNERSHIP Northern Border Intermediate Partnership 1400 Smith Street GUARANTOR: Houston, TX 77002 Attn: Angus Hardie Davis NBP Services Corporation By: Telephone: 713/853-6941 ------------------------- Facsimile: 713/646-4970 Name: -------------------- Title: ------------------- with a copy to: Mr. Jerry L. Peters Chief Financial and Accounting Officer Northern Border Partners, L.P. 1111 South 103rd Street Omaha, NE 68124-1000 Telephone: 402/398-7722 Telecopy: 402/398-7803 and with a copy to: Ms. Janet Place Vice President, Legal Northern Plains Natural Gas Company 1111 South 103rd Street Omaha, NE 68124-1000 Telephone: 402/398-7886 Facsimile: 402/398-7780 GUARANTY SIGNATURE PAGE EXHIBIT D FORM OF COMPLIANCE CERTIFICATE (Northern Border Partners, L.P.) FOR ENDED , --------------- -------------------------- ---- DATE: , ----------------------------- ---- ADMINISTRATIVE AGENT: Bank of America, N.A. BORROWER: NORTHERN BORDER PARTNERS, L.P. - -------------------------------------------------------------------------------- This certificate is delivered under the Revolving Credit Agreement, dated as of June 28, 2000 (as amended, modified, supplemented, or restated from time to time, the "CREDIT AGREEMENT"), among Borrower, Administrative Agent, and Lenders party thereto. Capitalized terms used herein and not otherwise defined herein shall have the meaning given to such terms in the Credit Agreement. I certify to Lenders that: (a) I am a Responsible Officer in the position(s) set forth under my signature below; (b) the Financial Statements of the Loan Parties, and their respective Subsidiaries, as applicable (the "REPORTING ENTITIES"), attached to this certificate were prepared in accordance with GAAP, and present fairly in all material respects the consolidated financial condition and results of operations of the Reporting Entities as of, and for the (three, six, or nine months, or fiscal year) ended on, , (the "SUBJECT PERIOD") (subject only to normal year-end audit adjustments); (c) a review of the activities of the Reporting Entities during the Subject Period has been made under my supervision with a view to determining whether, during the Subject Period, the Loan Parties have fulfilled their respective obligations under the Loan Documents, and during the Subject Period, (i) the Loan Parties have observed or performed all of the covenants and conditions of the Loan Documents (except for the deviations, if any, set forth on ANNEX A to this certificate) in all material respects, (ii) no Default (nor any Potential Default) has occurred and is continuing (except the Defaults or Potential Defaults, if any, described on ANNEX A to this Certificate) and (iii) the representation and warranties of Borrower contained in SECTION 8 of the Agreement are true and correct in all material respects as though made on and as of the date hereof (except such representations and warranties which expressly refer to an earlier date, which are true and correct in all material respects as of such earlier date); and (d) the status of compliance by the Loan Parties with SECTION 10.12 of the Credit Agreement at the end of the Subject Period is as set forth on ANNEX B to this certificate. By: --------------------------------- Name: ---------------------------- Title: --------------------------- ANNEX A TO COMPLIANCE CERTIFICATE DEVIATIONS FROM LOAN DOCUMENTS/ DEFAULTS OR POTENTIAL DEFAULTS (If none, so state.) ANNEX B TO COMPLIANCE CERTIFICATE Status of Compliance with SECTION 10.12 of the Credit Agreement SECTION 10.12 - CAPITALIZATION RATIO a. Funded Debt $ ------------ b. Capitalization (Funded Debt plus partners' capital) $ ------------ c. Capitalization Ratio (the ratio of Line a to Line b) % ------------ d. Maximum Ratio 35% EXHIBIT E FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT Reference is made to the Revolving Credit Agreement dated as of June 28, 2000 (as amended, modified, supplemented, or restated to the Effective Date, the "CREDIT AGREEMENT") among Northern Border Partners, L.P., a Delaware limited partnership ("BORROWER"), Bank of America, N.A., as Administrative Agent for Lenders ("ADMINISTRATIVE AGENT"), and Lenders party thereto. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. "ASSIGNOR" and "ASSIGNEE" referred to on SCHEDULE 1 agree as follows: 1. Assignor hereby sells and assigns to Assignee, without recourse and without representation or warranty except as expressly set forth herein, and Assignee hereby purchases and assumes from Assignor, an interest in and to Assignor's Rights and obligations under the Credit Agreement and the related Loan Documents as of the Effective Date equal to the percentage interest specified on SCHEDULE 1 of all outstanding Rights and obligations with respect to the Facilities under the Credit Agreement as set forth on SCHEDULE 1 (the "ASSIGNED FACILITY"). After giving effect to such sale and assignment, Assignor's and Assignee's Committed Sum under the Facility under the Credit Agreement will be as set forth on SCHEDULE 1. 2. Assignor (a) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (b) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties, or representations made in or in connection with the Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency, or value of the Loan Documents or any other instrument or document furnished pursuant thereto; (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any party to any Loan Document or the performance or observance by any such party of any of its obligations under the Loan Documents or any other instrument or document furnished pursuant thereto; and (d) attaches the Notes held by Assignor (to the extent any of the Principal Debt being assigned and owed to Assignor is evidenced by Notes) and requests that Administrative Agent exchange such Notes for new Notes if so requested by either Assignor or Assignee. Any such new Notes shall be prepared in accordance with the provisions of SECTION 3.1(b) of the Credit Agreement and will reflect the respective Committed Sums or Principal Debt of Assignee and Assignor after giving effect to this Assignment and Acceptance Agreement. 3. Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance Agreement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the Current Financials and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance Agreement; (c) agrees that it will, independently and without reliance upon Administrative Agent, Assignor, or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (d) confirms that it is an Eligible Assignee; (e) appoints and authorizes Administrative Agent to take such action as Administrative Agent on its behalf and to exercise such powers and discretion under the Credit Agreement as are delegated to Administrative Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; (f) agrees that it will perform in accordance with their terms all of the obligations that by the terms of the Credit Agreement are required to be performed by it as a Lender; and (g) attaches any U.S. Internal Revenue Service or other forms required under SECTION 4.6(d) of the Credit Agreement. 4. Following the execution of this Assignment and Acceptance Agreement by Assignor, Assignee, and Borrower (to the extent required hereunder), it will be delivered to Administrative Agent for acceptance and recording by Administrative Agent pursuant to the Credit Agreement. The effective date for this Assignment and Acceptance Agreement shall be the date described on SCHEDULE 1 (the "EFFECTIVE DATE"), which shall not, unless otherwise agreed to by Administrative Agent, be earlier than five Business Days from the date of such acceptance and recording by Administrative Agent. 5. Upon such acceptance and recording by Administrative Agent, as of the Effective Date, (a) Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance Agreement, have the Rights and obligations of a Lender thereunder, and (b) Assignor shall, to the extent provided in this Assignment and Acceptance Agreement, relinquish its Rights and be released from its obligations under the Agreement. 6. Upon such acceptance and recording by Administrative Agent, from and after the Effective Date, Administrative Agent shall make all payments under the Credit Agreement, the Notes (to the extent any of the Principal Debt owed to Assignee is evidenced by Notes), and loan accounts in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest, and commitment fees and other fees with respect thereto) to Assignee. Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement and the other Loan Documents for periods prior to the Effective Date directly between themselves. 7. Unless Assignee is a Lender or an Affiliate of a Lender or unless a Default or Potential Default then exists, this Assignment and Acceptance Agreement is conditioned upon the consent of Borrower and Administrative Agent pursuant to the definition of "Eligible Assignee" in the Credit Agreement. The execution and delivery of this Assignment and Acceptance Agreement by Borrower and Administrative Agent is evidence of this consent. 8. As contemplated by SECTION 14.13(b)(iv) of the Credit Agreement, Assignor or Assignee (as determined between Assignor and Assignee) agrees to pay to Administrative Agent for its account on the Effective Date in federal funds a processing fee of $3,500. 9. THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. 10. This Assignment and Acceptance Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of SCHEDULE 1 to this Assignment and Acceptance Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance Agreement. IN WITNESS WHEREOF, Assignor and Assignee have caused SCHEDULE 1 to this Assignment and Acceptance Agreement to be executed by their officers thereunto duly authorized as of the date specified thereon. SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE AGREEMENT
COMMITTED SUM OR PRINCIPAL DEBT ASSIGNED ASSIGNED FACILITY (AS APPLICABLE) COMMITMENT PERCENTAGE ----------------- ----------------------- --------------------- (I.E. THE PROPORTION THAT ASSIGNEE'S COMMITTED SUM FOR THE ASSIGNED FACILITY BEARS TO THE AGGREGATE COMMITTED SUM OF ALL LENDERS AFTER GIVING EFFECT TO THE ASSIGNMENT) (SET FORTH TO AT LEAST 8 DECIMAL POINTS) REVOLVER FACILITY
EFFECTIVE DATE OF ASSIGNMENT: *______________ ___, ______ [NAME OF ASSIGNOR], as Assignor By: ------------------------------------- Name: -------------------------------- Title: ------------------------------- Date: ----------------------------------- Address for Notice: --------------------- ---------------------------------------- Attn: ----------------------------------- Telephone: ------------------------------ Telecopier: ----------------------------- [NAME OF ASSIGNEE], as Assignee By: By: ------------------------------------- Name: -------------------------------- Title: ------------------------------- Date: ----------------------------------- Address for Notice: --------------------- ---------------------------------------- Attn: ----------------------------------- Telephone: ------------------------------ Telecopier: ----------------------------- * This date should be no earlier than five Business Days after the delivery of this Assignment and Acceptance Agreement to Administrative Agent. If SECTION 14.13(b) and the definition of "Eligible Assignee" of the Credit Agreement so require, Borrower and Administrative Agent consent to this Assignment and Acceptance Agreement. NORTHERN BORDER PARTNERS, L.P. By: ------------------------------- Name: -------------------------- Title: ------------------------- Date: ----------------------------- BANK OF AMERICA, N.A., as Administrative Agent By: ------------------------------- Name: -------------------------- Title: ------------------------- Dated: , ------------- ------------- ASSIGNMENT AND ACCEPTANCE AGREEMENT SIGNATURE PAGE EXHIBIT F-1 FORM OF LEGAL OPINION OF VINSON & ELKINS L.L.P. June ___, 2000 To each of the Lenders party to the Credit Agreement referred to below and Bank of America, N.A., as Administrative Agent Re: Northern Border Partners, L.P. Ladies and Gentlemen: This opinion is furnished to you pursuant to Section 7.1 of the Credit Agreement dated as of June 28, 2000 (the "Credit Agreement") among Northern Border Partners, L.P., a Delaware limited partnership, as Borrower (the "Borrower"), the Lenders (defined therein), and Bank of America, N.A., as Administrative Agent (in such capacity, the "Administrative Agent"). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned such terms in the Credit Agreement. In our examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies, and the authenticity of the originals of such copies. As to any facts material to this opinion, we have relied upon representations and warranties of the Borrower and the Intermediate Partnership contained in the Credit Agreement and the Guaranty. We have also relied on the matters contained in the opinions rendered by counsels to the Borrower and Intermediate Partnership and the General Partners. In rendering the opinions set forth herein, we have examined and relied on originals or copies, certified or otherwise identified to our satisfaction of the following ("Loan Documents"): (a) the Credit Agreement; (b) the Notes; and (c) the Guaranty executed by the Intermediate Partnership. 1. Based upon the foregoing and subject to the limitations, qualifications and exceptions set forth herein, we are of the opinion that the Credit Agreement and each of the Notes constitute valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms, and that the Guaranty constitutes valid and binding obligations of the Intermediate Partnership enforceable against the Intermediate Partnership in accordance with its terms. 2. We are of the opinion that neither the Borrower nor the Intermediate Partnership is an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended. 3. The execution and delivery of the Loan Documents by the Borrower and the Intermediate Partnership, and the performance of their respective obligations thereunder will not violate any Texas law. 4. No action by or in respect of, or filing with, any Governmental Authority under any Texas Law is required in connection with the execution and delivery of the Loan Documents by the Borrower and/or The Intermediate Partnership. The opinion in paragraph 1 above is subject to the following qualifications and comments: (i) The enforceability of the Loan Documents may be subject to bankruptcy, insolvency, reorganization, fraudulent transfer or moratorium or similar laws affecting creditors' rights generally and general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law). (ii) We express no opinion as to (A) provisions releasing, exculpating or exempting a party from, or requiring indemnification of a party for, liability for its own action or inaction, to the extent the same are inconsistent with public policy; (B) any provision of the Loan Documents to the extent it authorizes or permits any Person to set-off or apply any deposit, property or indebtedness owing to such party to or for the account of the Borrower or any Subsidiary of the Borrower; (C) provisions purporting to waive rights to notices, objections, demands, legal defenses, statutes of limitations, rights to trial by jury, or other benefits or rights that cannot be waived under applicable law; (D) the effect of the law of any jurisdiction (other than the State of Texas) wherein any Lender may be located which limits rates of interest which may be charged or collected by such Lender or imposes any tax on such Lender; (E) provisions granting to the Administrative Agent powers of attorney or authority to execute documents or to act by power of attorney on behalf of another party to the extent the Administrative Agent could not, under applicable law, take actions in its own name that it purports to take as attorney-in-fact for the grantor of such power of attorney; (F) provisions purporting to establish evidentiary standards for suits or proceedings to enforce the Loan Documents; and (G) provisions that decisions by a party are conclusive. In addition, we wish to highlight that provisions of the Loan Documents which permits either the Administrative Agent or the Lender to take action or to make determinations, or to benefit from indemnities and similar undertakings of the Borrower or the Intermediate Partnership, may be subject to a requirement that such action be taken or such determinations be made, and that any action or inaction by the Administrative Agent or a Lender which may give rise to a request for payment under such an undertaking be taken or made, on a reasonable basis and in good faith. (iii) We express no opinion as to the laws of any jurisdiction other than the laws of the State of Texas and the United States of America. In addition, we have not been called upon to, and accordingly do not, express any opinion as to the various state and federal laws regulating banks or the conduct of their business that may relate to the Loan Documents or the transactions contemplated thereby. This opinion is being furnished only to the addressees named above, and is solely for the benefit of such addressees and is not to be used, circulated, quoted, relied upon or otherwise referred to for any purpose without our prior written consent; provided, however, that any Person that becomes a Lender or successor Agent pursuant to the terms of the Credit Agreement may rely on this opinion as if it were addressed to such Person and delivered on the date hereof. Very truly yours, VINSON & ELKINS L.L.P. EXHIBIT F-2 FORM OF OPINION OF GENERAL COUNSEL TO NORTHERN PLAINS NATURAL GAS COMPANY June ____, 2000 To each of the Lenders party to the Credit Agreement referred to below, and Bank of America, N.A., as Administrative Agent Re: Northern Border Partners, L.P. Gentlemen: This opinion is furnished to you pursuant to Section 7.1 of the Credit Agreement dated as of June 28, 2000 (the "Credit Agreement") among Northern Border Partners L.P., a Delaware limited partnership, as Borrower (the "Borrower"), the Lenders (defined therein), and Bank of America, N.A., as Administrative Agent (in such capacity, the "Administrative Agent"). Terms defined in the Credit Agreement not otherwise defined herein are used herein as therein defined. I am Vice President and General Counsel of Northern Plains Natural Gas Company, a general partner of the Borrower ("General Partner"), and in such capacity am familiar with the negotiation, preparation, execution and delivery of the Credit Agreement. In that connection, I have examined the Credit Agreement, the Guaranty and the documents furnished pursuant to Section 7 of the Credit Agreement. I have also examined the originals, or copies certified to my satisfaction, of such other partnership records of the Borrower and the Intermediate Partnership, certificates of public officials and of authorized representatives of the Borrower and the Intermediate Partnership, and such other agreements, instruments and documents, as I have deemed necessary as a basis for the opinions hereinafter expressed. As to questions of fact material to such opinions, I have relied upon certificates of authorized representatives of the Borrower and the Intermediate Partnership or of public officials. In rendering my opinions, I have assumed the due execution and delivery, pursuant to the due authorization, of the Loan Documents by each party thereto other than the Borrower and the Intermediate Partnership, and that the Loan Documents constitute valid and binding agreements of such other parties. Based upon the foregoing and upon such investigation as I have deemed necessary, I am of the opinion that: 1. Each of the Borrower and the Intermediate Partnership is a limited partnership duly existing under the Delaware Revised Uniform Limited Partnership Act ("Delaware Act"). Each of the Partnership Agreement and the Intermediate Partnership Agreement is in full force and effect and each of the Borrower and the Intermediate Partnership has full power and authority under its respective partnership agreement and the Delaware Act to own its property and to conduct the business in which it is currently engaged and execute and deliver, and to perform its obligations, if any, under each of the Loan Documents to which it is a party. Each of the Borrower and the Intermediate Partnership is duly authorized to do business wherever the nature of its properties or its activities requires such authorization except where failure to have such authorization would not be or result in a Material Adverse Event. 2. The General Partner is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. The General Partner is duly authorized to do business wherever the nature of its properties or its activities requires such authorization except where failure to have such authorization would not be or result in a Material Adverse Event. The General Partner has full power and authority to own its property and to conduct the business in which it is currently engaged. 3. The Credit Agreement and the Notes have been duly executed and delivered by the Borrower. The Guaranty has been duly executed and delivered by the Intermediate Partnership. 4. The execution, delivery and performance by each of the Borrower and the Intermediate Partnership of each of the Loan Documents to which it is a party are within its partnership powers, have been duly authorized by all necessary partnership action and do not and will not: (i) result in a breach of or constitute a default under any of the following: (A) its respective Partnership agreement or any agreement known to me of the Borrower and the Intermediate Partnership or among the General Partners which governs the management or operations of the Borrower and the Intermediate Partnership, (B) any indenture or loan or credit agreement known to me to which the Borrower or the Intermediate Partnership is a party or by which it or any of its property or assets is bound, or (C) any other agreement, lease or instrument known to me to which the Borrower or the Intermediate Partnership is a party or by which it or any of its property or assets is bound and which is material to the Borrower or the Intermediate Partnership, or (ii) violate any provision of any law, rule or regulation, or, to the best of my knowledge, any order, writ judgment, injunction, decree, determination or award binding on the Borrower or the Intermediate Partnership or any of its property or assets, or (iii) result in or require, under any document referred to above in clause (i), the creation or imposition of any Lien upon or with respect to any of the properties or assets now owned or hereafter acquired by the Borrower or the Intermediate Partnership. 5. Each of the Borrower and the Intermediate Partnership has obtained all material government approvals which are required for its due execution, delivery and performance of the Loan Documents to which it is a party. 6. There is no pending or, to my knowledge, threatened action or proceeding to which the Borrower, the Intermediate Partnership or the General Partner is or would become a party before any court, governmental agency or arbitrator which could reasonably be expected to be or result in any Material Adverse Event. 7. None of the Borrower, the Intermediate Partnership or the General Partner are subject to, or they are exempt from, regulation as a "holding company" or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended ("PUHCA"). 8. If all material facts and issues of law were presented and properly argued, a court applying the laws of the State of Nebraska would decide, as a matter of conflicts of laws, to give effect to the governing law provision contained in Section 13.7 of the Credit Agreement and Section 14 of the Guaranty. Very truly yours, ------------------------------------ Janet K. Place Vice President & General Counsel NORTHERN PLAINS NATURAL GAS COMPANY, A General Partner EXHIBIT F-3 FORM OF OPINION OF COUNSEL TO PAN BORDER June ____, 2000 To each of the Lenders party to the Credit Agreement referred to below, and Bank of America, N.A., as Administrative Agent, Re: Northern Border Partners, L.P. Gentlemen: This opinion is furnished to you pursuant to Section 7.1 of the Credit Agreement dated as of June 28, 2000 (the "Credit Agreement") among Northern Border Partners, L.P., a Delaware limited partnership, as Borrower (the "Borrower"), the Lenders (defined therein), and Bank of America, N.A., as Administrative Agent (in such capacity, the "Administrative Agent"). Terms defined in the Credit Agreement not otherwise defined herein are used herein as therein defined. I am Vice President and General Counsel of Pan Border Gas Company, a general partner of the Borrower ("General Partner"), and in such capacity am familiar with the negotiation, preparation, execution and delivery of the Credit Agreement. In that connection, I have examined the Credit Agreement. I have also examined the originals, or copies certified to my satisfaction, of such other corporate records of the General Partner, certificates of public officials and of authorized representatives of the General Partner, and such other agreements, instruments and documents, as I have deemed necessary as a basis for the opinions hereinafter expressed. As to questions of fact material to such opinions, I have relied upon certificates of authorized representatives of the General Partner or of public officials. In rendering my opinions, I have assumed the due execution and delivery, pursuant to the due authorization, of the Credit Agreement by each party thereto other than the General Partner, and that the Credit Agreement constitutes a valid and binding agreement of such other parties. Based upon the foregoing and upon such investigation as I have deemed necessary, I am of the opinion that: 1. The General Partner is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, and has full power and authority under its certificate of incorporation and By-laws to own its property and to conduct the business in which it is currently engaged. The General Partner is duly authorized to do business wherever the nature of its properties or its activities requires such authorization except where failure to have such authorization would not have be or result in a Material Adverse Event. 2. There is no pending or, to my knowledge, threatened action or proceeding to which the General Partner is or would become a party before any court, governmental agency or arbitrator which could reasonably be expected to be or result in a Material Adverse Event. 3. The General Partner is not subject to, or is exempt from, regulation as a "holding company" or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company," within the meaning of the Public Utility Holding Company Act of 1935, as amended. Very truly yours, ---------------------------------- Janet K. Place Vice President and General Counsel Pan Border Gas Company EXHIBIT F-4 FORM OF OPINION OF COUNSEL TO NORTHWEST BORDER June ____, 2000 To each of the Lenders party to the Credit Agreement referred to below, and Bank of America, N.A., as Administrative Agent. Re: Northern Border Partners, L.P. Gentlemen: I am General Counsel of The Williams Companies, Inc. ("TWC") the ultimate parent corporation of Northwestern Border Pipeline Company, a Delaware corporation, (the "General Partner") and have acted as counsel to the General Partner in connection with the Credit Agreement dated as of June 28, 2000 (the "Credit Agreement") among Northern Border Partners, L.P., a Delaware limited partnership, as Borrower (the "Borrower"), the Lenders (defined therein) and Bank of America, N.A., as Administrative Agent (in such capacity, the "Administrative Agent"). This opinion is furnished to you pursuant to Section 7.1 of the Credit Agreement. Terms defined in the Credit Agreement not otherwise defined herein are used herein as therein defined. In connection with the opinions expressed herein, I, or other attorneys reporting to me, have examined and relied upon copies of the following documents: (a) the Credit Agreement and all exhibits and attachments thereto; (b) TWC Secretary's Certificate attached hereto; (c) Certificate of Incorporation and By Laws of the General Partner. Those documents identified in items (a) through (c) above are collectively referred to herein as the "Transaction Documents." In connection with this opinion, I or other attorneys working under my supervision have (i) investigated such questions of law, (ii) examined such corporate documents and records of the General Partner and certificates of public officials, and (iii) received such information from officers and representatives of the General Partner and made such investigations as I or other attorneys under my supervision have deemed necessary or appropriate for the purposes of this opinion. I have not, nor have other attorneys under my supervision, conducted independent investigations or inquiries to determine the existence of matters, actions, proceedings, items, documents, facts, judgments, decrees, franchises, certificates, permits, or the like and have made no independent search of the records of any court, arbitrator, or Governmental Authority affecting any Person, and no inference as to my knowledge thereof shall be drawn from the fact of my representation of any party or otherwise. This opinion is governed by, and shall be interpreted in accordance with, the Legal Opinion Accord (the "Accord") of the American Bar Association Section of Business Law (1991). As a consequence, this opinion letter is subject to a number of qualifications, exceptions, definitions, limitations on coverage, and other limitations, in addition to those set forth herein, all as more particularly described in such Accord, and should be read in connection therewith. Based upon and subject to the foregoing and the other qualifications, limitations, and assumptions set forth below and upon such other matters as I have deemed appropriate, I am of the opinion that: 1. The General Partner is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, and has full power and authority under its certificate of incorporation and By-laws to own its property and to conduct the business in which it is currently engaged. 2. The General Partner is duly authorized to do business wherever the nature of its properties or its activities requires such authorization and where failure to have such authorization would result in a Material Adverse Event. 3. There is no pending or, to my knowledge, threatened action or proceeding to which the General Partner is or would become a party before any court, governmental agency or arbitrator which could reasonably be expected to be or result in a Material Adverse Event. 4. The General Partner is not subject to regulation as a "holding company" or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. The opinions expressed in this letter are subject to the following additional qualifications and limitations: A. My opinions in paragraphs 1 and 2 with respect to incorporation, good standing, and qualification of the General Partner is based solely on the Certificate of the TWC Secretary attesting to the existence, good standing and qualification of the General Partner. B. Qualification of any statement or opinion herein by the use of the words "to my knowledge" means that during the course of representation in connection with the transactions contemplated by the Transaction Documents, no information has come to the attention of me or other attorneys working under my supervision that would give me or such attorneys current actual knowledge of the existence of facts or matters so qualified. Neither I, nor other attorneys working under my supervision, have undertaken any investigation to determine the existence of facts, and no inference as to our knowledge thereof shall be drawn from the fact of the representation by me or attorneys reporting to me of any party or otherwise. I am qualified to practice law in the States of New York and Oklahoma and do not hold myself out as an expert on, or express any opinion herein concerning, the laws of any jurisdiction other than the Delaware Revised Uniform Limited Partnership Act and applicable federal law of the Unites States of America as in effect on the date hereof. This opinion letter is limited to the matters expressly set forth herein, and no opinions are intended to be implied or may be inferred beyond those expressly stated herein. These opinions are rendered as of the date hereof and are based on the facts and circumstances related to the substance of the opinions expressed herein as they exist on the date hereof, and I disclaim any undertaking to advise you of any subsequent events or circumstances that would affect the opinions herein. This opinion letter is solely for the use and benefit of Lenders and Administrative Agent in consummating the transaction contemplated by the Transaction Documents, and may not be used or relied upon by, quoted, transmitted to, or filed with any other Person or for any other purpose whatsoever without in each instance my prior written consent. Very truly yours, William G. von Glahn EX-27 6 0006.txt ARTICLE 5 FDS FOR 2ND QUARTER 10-Q
5 1,000 6-MOS DEC-31-2000 JUN-30-2000 3,537 50,408 35,495 0 6,032 95,472 2,409,926 694,277 1,715,649 134,568 985,870 0 0 0 511,935 1,891,699 0 164,053 0 73,961 0 0 37,940 36,008 0 36,008 0 0 0 36,008 1.19 1.19
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