JPMorgan - KASE

equivalent thereof or from Moody’s is at least P-l or the equivalent thereof (any such bank being
an “Approved Lender”), in each case with maturities of not more than twelve months from the
date of acquisition; (d) commercial paper and variable or fixed rate Notes issued by any Approved
Lender (or by the parent company thereof) or commercial paper or any variable rate Notes issued
by, or guaranteed by, any U.S. or Canadian corporation rated A-l (or the equivalent thereof) by
Standard & Poor’s or P-l (or the equivalent thereof) by Moody’s and maturing within twelve
months of the date of acquisition; (e) repurchase agreements with a bank or trust company
having capital and surplus in excess of $500.0 million for direct obligations issued by or fully
guaranteed by the United States of America or Canada in which the Company shall have a
perfected first priority security interest (subject to no other Liens) and having, on the date of
purchase thereof, a Fair Market Value of at least 100% of the amount of repurchase obligations;
(f) interests in money market mutual funds which invest solely in assets or securities of the type
described in subparagraphs (a), (b) or (d) hereof; and (g) deposits available for withdrawal on
demand with any commercial bank that is not an Approved Lender but which is organized under
the laws of (i) any country that has been a member of the Organization for Economic
Cooperation and Development for 10 years as of the Issue Date and has total assets in excess of
$500.0 million or (ii) any other country in which the Company or any Restricted Subsidiary
maintains its chief executive office or conducts material operations in the Oil and Gas Business,
provided that, in either case (1) all such deposits are required to be made in such accounts in the
ordinary course of business and (2) such deposits in any one country do not at any one time
exceed in the aggregate the greater of (A) $20.0 million and (B) 5% of sales of the Company and
its Restricted Subsidiaries in such country included in Consolidated Net Income of the Company
for the last four full fiscal quarters for which internal financial statements are available, except
that the restriction contained in clause (g)(ii)(2) shall not apply in respect of deposits made with
any commercial bank which is a branch or subsidiary of an Approved Lender or a holding
company of an Approved Lender.
“Commission” means the U.S. Securities and Exchange Commission.
“Consolidated Cashflow” means, with respect to the Company and its Restricted Subsidiaries for
any period, the sum of, without duplication, (i) the Consolidated Net Income for such period, plus
(ii) to the extent deducted from Consolidated Net Income for such period, (x) the Fixed Charges
for such period, plus (y) non-cash dividends on the Company’s preferred stock and HOP’s
preferred stock, plus (iii) Consolidated Income Taxes for such period, plus (iv) consolidated
depreciation, amortization, depletion and other non-cash charges of the Company and its
Restricted Subsidiaries required to be reflected as expenses on the books and records of the
Company, minus (v) cash payments with respect to any nonrecurring, non-cash charges previously
added back pursuant to clause (iv), minus (vi) the impact of foreign currency translations.
Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and
the depreciation and amortization and other non-cash charges of, a Restricted Subsidiary of a
Person shall be added to Consolidated Net Income to compute Consolidated Cashflow only to the
extent that the Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person and only if a corresponding amount would be permitted
at the date of determination to be dividended to the Company by such Restricted Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders.
“Consolidated Income Taxes” means, with respect to any Person for any period, taxes imposed
upon such Person or other payments required to be made by such Person by any governmental
authority which taxes or other payments are calculated by reference to the income, return on
investment or profits of such Person or such Person and its Subsidiaries, divisions or operations
(to the extent such income, returns on investment or profits were included in computing
Consolidated Net Income for such period), regardless of whether such taxes or payments are
required to be remitted to any governmental authority.
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