Exhibit 10.1

Execution Copy

HERITAGE OPERATING, L.P.

SEVENTH AMENDMENT AGREEMENT

 

Re:

  

Note Purchase Agreement dated as of June 25, 1996

Note Purchase Agreement dated as of November 19, 1997

Note Purchase Agreement dated as of August 10, 2000

Dated as of

February 22, 2011

To each of the Holders named

in Schedule 1 to this Seventh

Amendment Agreement

Ladies and Gentlemen:

Reference is made to

(i) the Note Purchase Agreement dated as of June 25, 1996 (the “Original 1996
Agreement”), among Heritage Operating, L.P., a Delaware limited partnership (the
“Company”) and the Purchasers named in the Purchaser Schedule attached thereto,
as amended by a letter agreement (the “Letter Agreement”) dated July 25, 1996, a
First Amendment Agreement (the “First Amendment Agreement”) dated as of
October 15, 1998, a Second Amendment Agreement (the “Second Amendment
Agreement”) dated as of September 1, 1999, a Third Amendment Agreement (the
“Third Amendment Agreement”) dated as of May 31, 2000, a Fourth Amendment
Agreement (the “Fourth Amendment Agreement”) dated as of August 10, 2000, a
Fifth Amendment Agreement (the “Fifth Amendment Agreement”) dated as of
December 28, 2000, and a Sixth Amendment Agreement (the “Sixth Amendment
Agreement”) dated as of November 18, 2003 (said Original 1996 Agreement, as
amended by the Letter Agreement, the First Amendment Agreement, the Second
Amendment Agreement, the Third Amendment Agreement, the Fourth Amendment
Agreement, the Fifth Amendment Agreement and the Sixth Amendment Agreement,
being hereinafter referred to as the “Outstanding 1996 Agreement”) under and
pursuant to which the Company issued, and there are presently outstanding,
$12,000,000 aggregate principal amount of its 8.55% Senior Secured Notes due
June 30, 2011 (the “1996 Notes”); and

(ii) the Note Purchase Agreement dated as of November 19, 1997 (the “Original
1997 Agreement”), among the Company and the Purchasers named in the Initial
Purchaser Schedule attached thereto, as amended by the First Amendment Agreement
dated as of October 15, 1998, a Second Amendment Agreement (the “Second
Amendment Agreement”) dated as of September 1, 1999, a Third Amendment Agreement
(the “Third Amendment Agreement”) dated as of

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May 31, 2000, a Fourth Amendment Agreement (the “Fourth Amendment Agreement”)
dated August 10, 2000, a Fifth Amendment Agreement (the “Fifth Amendment
Agreement”) dated as of December 28, 2000, and a Sixth Amendment Agreement (the
“Sixth Amendment Agreement”) dated as of November 18, 2003 (said Original 1997
Agreement, as so amended by the First Amendment Agreement, the Second Amendment
Agreement, the Third Amendment Agreement, the Fourth Amendment Agreement, the
Fifth Amendment Agreement and the Sixth Amendment Agreement, being hereinafter
referred to as the “Amended Original 1997 Agreement”), under and pursuant to
which the Company issued, and there are presently outstanding, $4,000,000
aggregate principal amount of its 7.26% Series B Senior Secured Notes due
November 19, 2012 (the “Series B Notes”), as supplemented by the First
Supplemental Note Purchase Agreement dated as of March 13, 1998 (the “First
Supplemental Agreement”) among the Company and the Purchasers named in the
Supplemental Purchaser Schedule attached thereto (the Amended Original 1997
Agreement as supplemented by the First Supplemental Agreement is hereinafter
sometimes referred to as the “Outstanding 1997 Agreement”); and

(iii) the Note Purchase Agreement dated as of August 10, 2000 (the “Original
2000 Agreement”), among the Company and the Purchasers named in the Initial
Purchaser Schedule attached thereto, as amended by the Fifth Amendment Agreement
(the “Fifth Amendment Agreement”) dated as of December 28, 2000 and the Sixth
Amendment Agreement (the “Sixth Amendment Agreement”) dated as of November 18,
2003 (said Original 2000 Agreement, as so amended by the Fifth Amendment
Agreement and the Sixth Amendment Agreement, being hereinafter referred to as
the “Amended Original 2000 Agreement”) under and pursuant to which the Company
issued, and there are presently outstanding, (a) $25,400,000 aggregate principal
amount of its 8.67% Series D Senior Secured Notes due August 15, 2012 (the “2000
Series D Notes”), (b) $5,000,000 aggregate principal amount of its 8.75% Series
E Senior Secured Notes due August 15, 2015 (the “2000 Series E Notes”), and
(c) $36,363,636 aggregate principal amount of its 8.87% Series F Senior Secured
Notes due August 15, 2020 (the “2000 Series F Notes”), as supplemented by the
First Supplemental Note Purchase Agreement dated as of May 24, 2001 (the “First
Supplemental Agreement”) among the Company and the Purchasers named in the
Supplemental Purchaser Schedule attached thereto, under and pursuant to which
the Company issued, and there are presently outstanding, (i) $4,363,637
aggregate principal amount of its 7.89% Series H Senior Secured Notes due
May 15, 2016 (the “2001 Series H Notes”) and (ii) $16,000,000 aggregate
principal amount to its 7.99% Series I Senior Secured Notes due May 15, 2013
(the “2001 Series I Notes”) (the Amended Original 2000 Agreement as supplemented
by the First Supplemental Agreement is hereinafter sometimes referred to as the
“Outstanding 2000 Agreement”).

 

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The Outstanding 1996 Agreement, the Outstanding 1997 Agreement and the
Outstanding 2000 Agreement are hereinafter sometimes collectively referred to as
the “Outstanding Agreements”. The 1996 Notes, Series B Notes, 2000 Series D
Notes, 2000 Series E Notes, 2000 Series F Notes, 2001 Series H Notes and 2001
Series I Notes are hereinafter sometimes collectively referred to as the
“Outstanding Notes.” Capitalized terms used herein without definition shall have
the respective meanings assigned to such terms in the Outstanding Agreements.

The Company now desires to amend and modify certain provisions of the
Outstanding Agreements. You are the owner and holder of the Outstanding Notes
set forth opposite your name on Schedule 1 hereto. The Company hereby requests
that, from and after the satisfaction of each of the conditions to effectiveness
set forth in Article III below, said amendments and modifications shall be
deemed to have been given and said Outstanding Agreements shall be amended in
the respects, but only in the respects, hereinafter set forth.

ARTICLE I

AMENDMENTS TO OUTSTANDING AGREEMENTS

I-A. Section 6(A) of each of the Outstanding Agreements is hereby deleted in its
entirety and the following shall be inserted in lieu thereof:

Section 6A. Financial Ratios. The Company will not permit:

(i) Ratio of Consolidated Funded Indebtedness to Consolidated EBITDA. The ratio
as of the end of any fiscal quarter of Consolidated Funded Indebtedness to
Consolidated EBITDA to exceed 3.25 to 1.00; or

(ii) Minimum Interest Coverage. The ratio as of the end of any fiscal quarter of
Consolidated EBITDA to Consolidated Interest Expense to be less than 2.25 to
1.00.

I-B. Section 6(B)(ii) of each of the Outstanding Agreements is hereby deleted in
its entirety and the following shall be inserted in lieu thereof:

(ii) [reserved];

I-C. Section 6(B)(iii) of each of the Outstanding Agreements is hereby deleted
in its entirety and the following shall be inserted in lieu thereof:

(iii) the Company may become and remain liable with respect to up to $10,000,000
of Indebtedness owing from time to time to the seller(s) in Asset Acquisition(s)
(in addition to Non-Compete Obligations permitted pursuant to the provisions of
clause (xii) of this Section 6B); provided that the aggregate principal amount
of indebtedness permitted under this clause (iii) shall not at any time exceed
the Contracted Dollar;

I-D. Section 6(B)(xiii) of each of the Outstanding Agreements is hereby deleted
in its entirety and the following shall be inserted in lieu thereof:

 

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(xiii) the Company and its Subsidiaries may become and remain liable with
respect to the Notes and other Indebtedness, in addition to that otherwise
permitted by the other clauses of this Section 6B, if on the date the Company or
any of its Subsidiaries becomes liable with respect to any such additional
Indebtedness and immediately after giving effect thereto and to the
substantially concurrent repayment of any other Indebtedness, no Default or
Event of Default shall exist;

I-E. Section 6(B) of each of the Outstanding Agreements is hereby amended to
insert the following clause (xiv) immediately following clause (xiii) contained
therein, as follows:

(xiv) the Company may become and remain liable with respect to subordinated
extensions of credit made to the Company by the Master Partnership or any of the
Master Partnership’s affiliates; provided that any such extension of credit
shall be evidenced by a promissory note which will contain the provisions set
forth in Annex A attached hereto (and the Master Partnership or such affiliate
shall agree to be bound by such provisions).

I-F. Section 6(C)(xiv) of the 2000 Outstanding Agreement is hereby deleted in
its entirety and the following shall be inserted in lieu thereof:

(xiv) Liens created by any of the Security Documents securing (a) Indebtedness
evidenced by the 1996 Senior Secured Notes and the 1997 Senior Secured Notes and
(b) the Notes and other Additional Parity Debt; and

I-G. Section 6(I)(ii) of each of the Outstanding Agreements is hereby deleted in
its entirety and the following shall be inserted in lieu thereof:

(ii) such transaction is in connection with the incurrence of Indebtedness
pursuant to Section 6B(viii) or Section 6B(xiv),

I-H. Section 7(A)(xv) of each of the Outstanding Agreements is hereby deleted in
its entirety and the following shall be inserted in lieu thereof:

(xv) any of the events described in clauses (a), (b) or (c) shall occur: (a) the
General Partner shall be engaged in any business or activities other than those
permitted by the Partnership Agreement as in effect from time to time and in
accordance with Section 6H, or (b) the General Partner ceases to be the sole
general partner of the Company or the Master Partnership, or (c) the Specified
Entities shall own, directly or indirectly through Wholly-Owned Subsidiaries, in
the aggregate less than 51% of the Capital Stock of the General Partner; or

I-I. The definition of “Remaining Scheduled Payments” set forth in Section 10(A)
of each of the Outstanding Agreements is hereby deleted in its entirety and the
following shall be inserted in lieu thereof:

“Remaining Scheduled Payments” shall mean, with respect to the Called Principal
of any Note, all payments of such Called Principal and interest (calculated at
all times assuming that such interest is based upon the interest rate on such
Note at the time of its initial issuance) thereon that would be due on or after
the Settlement Date with respect to such Called Principal if no payment of such
Called Principal were made prior to its scheduled due date.

 

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I-J. Section 10(B) of each of the Outstanding Agreements is hereby amended to
delete the definitions of “Acquisition Facility,” “Adjusted Consolidated
EBITDA,” “Adjusted Consolidated Funded Indebtedness,” “Designated Current
Manager,” “Heritage,” “Lock-Up Period,” “Proposed Reorganization,” and
“Revolving Working Capital Facility” in their entirety and, for purposes of
further clarification, all references to those terms in each of the Outstanding
Agreements are hereby deleted in their entirety and any provision which refers
to those terms is hereby deleted in its entirety.

I-K. The definition of “Consolidated Funded Indebtedness” set forth in
Section 10(B) of each of the Outstanding Agreements is hereby deleted in its
entirety and the following shall be inserted in lieu thereof:

“Consolidated Funded Indebtedness” shall mean, as of any date of determination,
the aggregate amount of Indebtedness of the Company and its Subsidiaries
outstanding on that date, whether current or long-term, including the Notes, the
1996 Senior Secured Notes and the 1997 Senior Secured Notes.

I-L. The definition of “Contracted Dollar” set forth in Section 10(B) of each of
the Outstanding Agreements is hereby deleted in its entirety and the following
shall be inserted in lieu thereof:

“Contracted Dollar” shall mean $10,000,000 (which is the aggregate principal
amount permitted with respect to Indebtedness owing to sellers in Asset
Acquisitions (in addition to permitted Non-Compete Obligations)).

I-M. The definition of “Current Management” set forth in Section 10(B) of each
of the Outstanding Agreements is hereby deleted in its entirety and the
following shall be inserted in lieu thereof:

“Current Management” shall mean any of the following: William G. Powers, R. Paul
Grady, Karen Z. Hicks, Eric P. Beatty, the Chief Executive Officer of either of
the General Partner or Energy Transfer Partners, L.L.C. and the Chief Financial
Officer of either of General Partner or Energy Transfer Partners, L.L.C.,
together with the heirs of, and trusts for the benefit of family members
controlled by, any such executive manager.

I-N. The definition of “General Partner” set forth in Section 10(B) of each of
the Outstanding Agreements is hereby deleted in its entirety and the following
shall be inserted in lieu thereof:

“General Partner” shall mean Energy Transfer Partners GP L.P. (formerly U.S.
Propane), in its capacity as general partner of the Company.

 

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I-O. The definition of “Master Partnership” set forth in Section 10(B) of each
of the Outstanding Agreements is hereby deleted in its entirety and the
following shall be inserted in lieu thereof:

“Master Partnership” shall mean Energy Transfer Partners, L.P., a Delaware
limited partnership.

ARTICLE II

AMENDMENT

II-A. In addition to, and not in limitation of, the Non-Investment Grade
Increase under and as defined in Section II-C of the Sixth Amendment Agreement
that may be applicable to the Notes from time to time, if at any time, the
long-term credit rating of the Company is less than “BBB-” (or its equivalent)
by a Rating Agency, and the long-term credit rating of the Master Partnership is
below BB+ (or its equivalent) by a Rating Agency, or if two or more ratings of
the Master Partnership are withdrawn, the interest rate per annum specified in
each Outstanding Note issued heretofore and outstanding as of the effective date
of this Seventh Amendment as determined in accordance with Article III hereof,
shall increase by 50 basis points (0.50%) (which 50 basis points (0.50%) shall
be referred to herein as the “Downgrade Interest Increase”, any such Downgrade
Interest Increase being in addition to any then applicable Non-Investment Grade
Increase described above); provided, however, that if, at any time, two or more
Rating Agencies shall have given long-term debt ratings to the Company or to the
Master Partnership and such ratings fall within different rating categories
(after giving effect to numerical or other qualifiers), the lower rating (i.e.
worse) of a Rating Agency will control for purposes of the foregoing. After the
Downgrade Interest Increase becomes applicable, (a) if at any time the Company
is rated “BBB-” (or its equivalent) or better by a Rating Agency, and the Master
Partnership is rated BB+ (or its equivalent) or better by a Rating Agency, the
interest rate on the unpaid balance thereof, commencing on the date of such
rating change, shall revert to the interest rate per annum specified in such
Note and interest on such Note shall not include the Downgrade Interest
Increase, and (b) if at any time the Company is rated less than “BBB-” (or its
equivalent) by a Rating Agency, and the Master Partnership is rated below BB+
(or its equivalent) by a Rating Agency, or if two or more ratings of the Master
Partnership are withdrawn, the interest rate on the unpaid balance thereof,
commencing on the date of such rating change, shall be the interest rate per
annum specified in such Note and increased by the Downgrade Interest Increase.
In furtherance of the foregoing, the parties to this Seventh Amendment Agreement
hereby agree and acknowledge that the forms of Notes attached to each of the
Outstanding Agreements are hereby amended and modified with respect to all Notes
issued after the date of the effectiveness of this Seventh Amendment Agreement
to include the above paragraph and interest shall continue to be calculated as
provided in each of the Outstanding Agreements. All Outstanding Notes issued
prior to the date of the effectiveness of this Seventh Amendment Agreement will
remain in their current form; provided that, at the request of any holder of the
Outstanding Notes, the Company will either (x) exchange the Note held by such
holder for a new Note, which will be identical to the Note being exchanged in
all respects except that it will include the above paragraph or (y) execute and
deliver to each such holder an attachment (the “7th Amendment Sticker”) setting
forth the provisions of this Section II-A, which 7th Amendment Sticker shall be
attached to each Outstanding Note held by such holder, in each case, a such
holder may request; and, provided, further, that the failure to attach such 7th
Amendment Sticker to any Outstanding Note shall not affect the validity or
binding effect of this Section II-A.

 

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ARTICLE III

CONDITIONS OF EFFECTIVENESS

The effectiveness of this Seventh Amendment Agreement (and each of the
amendments contained herein) is subject to the satisfaction of the following
conditions:

(a) the Required Holders under each of the Outstanding Agreements shall have
consented to this Seventh Amendment Agreement as evidenced by their execution
hereof;

(b) each of the holders of the Outstanding Notes shall have received an
amendment fee from the Company in an amount equal to 0.15% of the aggregate
principal amount of the Outstanding Notes held by such holder (the “Amendment
Fee”);

(c) the holders of the Outstanding Notes shall have received evidence reasonably
satisfactory to them of the termination of the Acquisition Facility and the
Revolving Working Capital Facility; and

(d) the Company shall have paid all reasonable out-of-pocket costs and expenses
of the holders of the Outstanding Notes in connection with the preparation,
negotiation, execution and delivery of this Seventh Amendment Agreement
(including, without limitation, the reasonable fees and expenses of counsel for
such holders).

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS

In order to induce the holders of the Notes to enter into this Seventh Amendment
Agreement, the Company represents and warrants that:

(a) no Default or Event of Default has occurred and is continuing and after
giving effect to this Seventh Amendment Agreement, no Event of Default shall
have occurred;

(b) the Company has taken all necessary partnership action to authorize the
execution, delivery and performance by it of this Seventh Amendment Agreement
and duly executed and delivered this Seventh Amendment Agreement;

(c) the execution, delivery and performance by the Company of this Seventh
Amendment Agreement are within its limited partnership powers, have been duly
authorized by all necessary limited partnership action and do not and will not
(i) violate any provision of its partnership agreement or other governing
documents, contravene any

 

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material law applicable to it or (ii) conflict with, result in a breach of or
constitute a default under any material agreement to which the Company is a
party, by which it or any of its properties is bound or to which it is subject;
and

(d) this Seventh Amendment Agreement constitutes the legal, valid and binding
obligations of the Company enforceable against it in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
moratorium or similar laws affecting creditors’ rights generally and general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

ARTICLE V

MISCELLANEOUS

V-A. If the foregoing is acceptable to you, kindly note your acceptance in the
space provided below and upon satisfaction of the conditions to effectiveness
set forth in Article II above, your consent to this Seventh Amendment Agreement
shall be deemed to have been given and the Outstanding Agreements shall be
amended as set forth above.

V-B. This Seventh Amendment Agreement may be executed by the parties hereto
individually, or in any combination of the parties hereto in several
counterparts, all of which taken together shall constitute one and the same
Seventh Amendment Agreement.

V-C. Except as amended hereby, all of the representations, warranties,
provisions, covenants, terms and conditions of the Outstanding Agreements shall
remain unaltered and in full force and effect and the Outstanding Agreements, as
amended hereby, are in all respects agreed to, ratified and confirmed by the
Company. The Company acknowledges and agrees that the granting of amendments
herein shall not be construed as establishing a course of conduct on the part of
the holders of the Outstanding Notes upon which the Company may rely at any time
in the future.

V-D. Upon the effectiveness of this Seventh Amendment Agreement, each reference
in each Outstanding Agreement and in other documents describing or referencing
such Outstanding Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,”
or words of like import referring to such Outstanding Agreement, shall mean and
be a referenced to such Outstanding Agreement as amended hereby.

 

 

Very truly yours,

HERITAGE OPERATING, L.P.

By: Energy Transfer Partners GP, L.P., its

General Partner

 

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By: Energy Transfer Partners, L.L.C., its

General Partner

By:  

/s/ Martin Salinas, Jr.

Name:   Martin Salinas, Jr. Its:   Chief Financial Officer

 

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 22, 2011, and the undersigned
hereby confirms that on February 22, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

MONY Life Insurance Company

 

By:

 

/s/ Amy Judd

Its:

 

Investment Officer

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 22, 2011, and the undersigned
hereby confirms that on February 22, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

ALLSTATE LIFE INSURANCE COMPANY

 

By:

 

/s/ Jerry D. Zinkula

Its:

 

Authorized Signatory

 

By:

 

/s/ Mark Cloghessy

Its:

 

Authorized Signatory

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 22, 2011, and the undersigned
hereby confirms that on February 22, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

 

By:

 

Babson Capital Management LLC,

Its Investment Adviser

By:

 

/s/ Elisabeth A. Perenick

Its:

 

Managing Director

C.M. LIFE INSURANCE COMPANY

 

By:

 

Babson Capital Management LLC,

Its Investment Adviser

By:

 

/s/ Elisabeth A. Perenick

Its:

 

Managing Director

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 22, 2011, and the undersigned
hereby confirms that on February 22, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

CONNECTICUT GENERAL LIFE INSURANCE COMPANY

 

By:

  CIGNA Investments, Inc. (authorized agent)

By:

 

/s/ Lori E. Hopkins

Its:

 

Managing Director

LIFE INSURANCE COMPANY OF NORTH AMERICA

 

By:

  CIGNA Investments, Inc. (authorized agent)

By:

 

/s/ Lori E. Hopkins

Its:

 

Managing Director

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 17th, 2011, and the undersigned
hereby confirms that on February 17th, 2011 it held the aggregate principal
amount of Outstanding Notes of the Company set forth on Schedule 1 hereto and
that on the date of execution hereof it continues to hold such Outstanding
Notes.

GENWORTH LIFE INSURANCE COMPANY

 

By:

 

/s/ [illegible]

Its:

 

Investment Officer

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 22, 2011, and the undersigned
hereby confirms that on February 22, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

 

THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA

By:

 

/s/ Brian Keating

Its:

 

Managing Director

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 22, 2011, and the undersigned
hereby confirms that on February 22, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

 

RELIASTAR LIFE INSURANCE COMPANY

By:

  ING Investment Management LLC, as Agent

By:

 

/s/ Paul Aronson

Its:

 

Vice President

RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK

By:

  ING Investment Management LLC, as Agent

By:

 

/s/ Paul Aronson

Its:

 

Vice President

RELIASTAR LIFE INSURANCE COMPANY (successor by merger to Northern Life Insurance
Company)

By:

  ING Investment Management LLC, as Agent

By:

 

/s/ Paul Aronson

Its:

 

Vice President

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 22, 2011, and the undersigned
hereby confirms that on February 22, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

 

John Hancock Life Insurance Company (U.S.A.), successor by merger to John
Hancock Life Insurance Company and John Hancock Variable Life Insurance Company

 

By:

 

/s/ [illegible ]

Its:

 

Director

John Hancock Life Insurance Company of New York

By:

 

/s/ [illegible]

Its:

 

Director

John Hancock Life & Health Insurance Company

By:

 

/s/ [illegible]

Its:

 

Director

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 22, 2011, and the undersigned
hereby confirms that on February 22, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

 

SIGNATURE 6 LIMITED

 

By:

  Hancock Capital Investment Management, LLC, as Portfolio Advisor

By:

 

/s/ Willma H. Davis

Its:

 

Senior Managing Director

SIGNATURE 7 L.P.

By:

 

Hancock Capital Investment Management, LLC, as Portfolio Advisor

By:

 

/s/ Willma H. Davis

Its:

 

Senior Managing Director

JPMORGAN CHASE BANK, not individually but solely in its capacity as Directed
Trustee for the SBC Master Pension Trust (fka AT&T Long Term Investment Trust)

By:

 

/s/ Jacqueline Savage

Its:

 

Assistant Vice President

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 22, 2011, and the undersigned
hereby confirms that on February 22, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

 

METROPOLITAN LIFE INSURANCE COMPANY

By:

 

/s/ John A. Tanyeri

Name:

 

John A. Tanyeri

Title:

 

Director

UNION FIDELITY LIFE INSURANCE COMPANY

By:

  MetLife Investment Advisors Company, LLC, its investment adviser

By:

 

/s/ John A. Tanyeri

Name:

 

John A. Tanyeri

Title:

 

Director

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 22, 2011, and the undersigned
hereby confirms that on February 22, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

 

NEW YORK LIFE INSURANCE COMPANY

By:

 

/s/ Trinh Nguyen

Its:

 

Corporate Vice President

By:

 

 

Its:

 

 

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION By:   New York Life Investment
Management LLC, its Investment Manager

By:

 

/s/ Trinh Nguyen

Its:

 

Director

By:

 

 

Its:

 

 

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 22, 2011, and the undersigned
hereby confirms that on February 22, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

 

PACIFIC LIFE INSURANCE COMPANY

By:

 

/s/ [illegible]

Its:

 

Assistant Vice President

By:

 

/s/ Diane W. Oales

Its:

 

Assistant Secretary

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 22, 2011, and the undersigned
hereby confirms that on February 22, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

 

PHOENIX LIFE INSURANCE COMPANY

(f/k/a PHOENIX HOME LIFE MUTUAL
INSURANCE COMPANY)

By:

 

/s/ [illegible]

Its:

 

Executive VP / CIO

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 22, 2011, and the undersigned
hereby confirms that on February 22, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

PRINCIPAL LIFE INSURANCE COMPANY

(fka Principal Mutual Life Insurance Company)

 

By:

 

Principal Global Investors, LLC,

Its authorized signatory

By:

 

/s/ Colin Pennycooke

Its:

 

Counsel

By:

 

/s/ Joellen J. Watts

Its:

 

Counsel

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 17, 2011, and the undersigned
hereby confirms that on February 17, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

 

PROTECTIVE LIFE INSURANCE COMPANY

By:

 

/s/ Lance P. Black

Its:

 

Treasurer

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The foregoing Seventh Amendment Agreement and the amendments referred to therein
are hereby accepted and agreed to as of February 22, 2011, and the undersigned
hereby confirms that on February 22, 2011 it held the aggregate principal amount
of Outstanding Notes of the Company set forth on Schedule 1 hereto and that on
the date of execution hereof it continues to hold such Outstanding Notes.

PRUDENTIAL RETIREMENT INSURANCE AND

ANNUITY COMPANY

 

By:

 

Prudential Investment Management, Inc.,

As investment manager

By:

 

/s/ Timothy M. Laczkowski

Its:

 

Vice President

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SCHEDULE 1

 

NAME OF HOLDER

OF OUTSTANDING NOTES

  

PRINCIPAL AMOUNT AND

SERIES OF OUTSTANDING

NOTES HELD AS OF

FEBRUARY 22, 2011

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ANNEX A

Section 1. Definitions. Capitalized terms defined in the Outstanding Agreements1
(as defined in the promissory note to which this Annex A is attached (the
“Intercompany Note”)) and not otherwise defined herein have, as used in this
Annex A, the respective meanings provided for therein. The following additional
terms, as used herein, have the following respective meanings:

“Secured Party” means the Collateral Agent any holder of the 1996 Notes, the
Series B Notes, 2000 Series D Notes, 2000 Series E Notes, 2000 Series F Notes,
2001 Series H Notes, 2001 Series I Notes or of any Parity Debt.

“Senior Debt” means (x) the principal of, Premium, if any, with respect to, and
interest on (including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of the Company, whether or not an allowable claim)
under the 1996 Notes, the Series B Notes, 2000 Series D Notes, 2000 Series E
Notes, 2000 Series F Notes, 2001 Series H Notes, 2001 Series I Notes, the
Outstanding Agreements, any Parity Debt and any agreements governing such Parity
Debt (including all reimbursement obligations thereunder) and (y) all other
obligations and indebtedness of the General Partner and the Company (including,
without limitation, indemnities, fees and expenses and interest thereon) of the
General Partner and the Company to the holders of Notes and the Collateral Agent
now existing or hereafter incurred under, arising out of, or in connection with,
the 1996 Notes, the Series B Notes, 2000 Series D Notes, 2000 Series E Notes,
2000 Series F Notes, 2001 Series H Notes, 2001 Series I Notes, the Outstanding
Agreements, the Parity Debt, the agreements governing the Parity Debt and the
Security Documents, together with all renewals, extensions, increases or
rearrangements thereof.

“Subordinated Debt” means the principal of, premium, if any, with respect to,
and interest on (including, without limitation, any interest which accrues after
the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Company, whether or not an
allowable claim) under the Intercompany Note and other obligations and
indebtedness (including, without limitation, indemnities, fees and expenses and
interest thereon) of the General Partner and the Company to [INSERT NAME OF
AFFILIATE]2 now existing or hereafter incurred under, arising out of, or in
connection with, the Intercompany Note.

Section 2. Subordination by [INSERT NAME OF AFFILIATE]. [INSERT NAME OF
AFFILIATE] hereby covenants and agrees that the payment of the Subordinated Debt
shall be subordinate and subject in right of payment, to the extent set forth
herein, to the prior payment in full in cash of the Senior Debt. The provisions
of this Annex A shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of, or continue to hold, Senior
Debt, and such provisions are made for the benefit of the

 

 

1 

Outstanding Agreements to be defined as in the preamble to the 7th Amendment
Agreement, as such Outstanding Agreements may be amended, supplemented,
replaced, refinanced or modified from time to time.

2 

The term to include all successors and assigns.

Annex A - 1

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holders of the Senior Debt. The holders of the Senior Debt are hereby made
obligees hereunder with the same force and effect as if their names were written
herein as such, and they and/or each of them may proceed to enforce such
provisions.

Section 3. Priority and Payment Over in Certain Events.

(a) Priority and Payment Over Upon Insolvency and Dissolution. In the event of
(x) any insolvency or bankruptcy case or proceeding or any receivership,
liquidation, reorganization or similar case or proceeding in connection
therewith relative to the Company or its creditors, as such, or to its assets,
or (y) any liquidation, dissolution or other winding up of the Company, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy
or (z) any assignment for the benefit of creditors or other marshaling of assets
and liabilities of the Company, then and in any such event:

(i) the holders of the Senior Debt shall be entitled to receive payment in full
in cash of all amounts due or to become due on or in respect of all Senior Debt
before [INSERT NAME OF AFFILIATE] shall be entitled to receive and retain any
direct or indirect payment on account of the principal, interest or other
amounts due or to become due on the Subordinated Debt, including, without
limitation, by exercise of any right of set off and any payment which might be
payable or deliverable by reason of any other indebtedness being subordinated in
right of payment to the Subordinated Debt (other than in the form of securities
permitted to be paid in accordance with the first parenthetical in clause
(ii) below); and

(ii) any payment or distribution of any kind or character, whether in cash,
property or securities which may be payable or deliverable in respect of the
Subordinated Debt in any such case, proceeding, dissolution, liquidation or
other winding up or event, including any such payment or distribution which may
be payable or deliverable by reason of the payment of any other indebtedness of
the Company which is subordinated to the payment of the Subordinated Debt
(except for any such payment or distribution (each an “Excepted Payment”)
(A) authorized by an unstayed, final, nonappealable order or decree stating that
effect is being given to the subordination of the Subordinated Debt to the
Senior Debt and made by a court of competent jurisdiction in a reorganization
proceeding under any applicable bankruptcy law and (B) of securities which, if
debt securities, are subordinated to at least the same extent as the
Subordinated Debt is to (y) the Senior Debt or (z) any securities issued in
exchange for the Senior Debt; provided, however, that (i) the final maturity
date of such securities shall not be earlier than one year following the
maturity date of the last to mature of the Senior Debt (including any securities
issued in exchange therefor) at the time outstanding and (ii) such securities
shall contain covenants and shall not contain greater defaults than as are
contained in such instruments), shall be paid by the Company or by the trustee
in bankruptcy, debtor-in-possession, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of assets of the
Company directly to the Collateral Agent to the extent necessary to pay all
Senior Debt in full in cash after giving effect to any concurrent payment or
distribution to or for the benefit of the holders of the Senior Debt.

Annex A - 2

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The consolidation of the Company with, or the merger of the Company into,
another Person or the liquidation or dissolution of the Company following the
conveyance or transfer of its assets substantially as an entirety to another
Person upon terms and conditions permitted under the Outstanding Agreements
shall not be deemed a dissolution, winding up, liquidation, reorganization,
assignment for the benefit of creditors or marshaling of assets and liabilities
of the Company for purposes of this Section 3(a) if the Person formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance or transfer such property and assets substantially as an entirety,
as the case may be, shall comply with the conditions set forth in the
Outstanding Agreements as a prerequisite for such consolidation, merger,
conveyance or transfer.

(b) Payment on Subordinated Debt Suspended When Senior Debt is in Default. In
the event and during the continuation of any Default or Event of Default under
the Outstanding Agreements or under any other agreement or instrument evidencing
or securing any Senior Debt, then unless and until such Default or Event of
Default shall have been cured or waived or shall have ceased to exist and any
resulting acceleration shall have been rescinded or annulled, or in the event
any judicial proceeding shall be pending with respect to any such Default or
Event of Default, then no direct or indirect payment, including any payment
which may be payable by reason of the payment of any other indebtedness of the
Company which is subordinated to the payment of the Subordinated Debt) (but
excluding any Excepted Payment), shall be made by or on behalf of the Company on
account of the principal of or interest on the Subordinated Debt or on account
of the purchase or other acquisition by it of the Subordinated Debt. The
provisions of this Section 3(b) shall not apply to any payment with respect to
which Section 3(a) would be applicable.

(c) Rights and Obligations of [INSERT NAME OF AFFILIATE]. If, notwithstanding
the foregoing provisions of this Section 3, [INSERT NAME OF AFFILIATE] shall
have received any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Company which is subordinated to the
payment of the Subordinated Debt (but excluding any Excepted Payment), before
all amounts due or to become due on or in respect of all Senior Debt have been
irrevocably paid in full in cash, then and in such event such payment or
distribution shall be received in trust for the Secured Parties and other
holders of the Senior Debt and shall be forthwith paid over or delivered by
[INSERT NAME OF AFFILIATE] receiving the same directly to the Collateral Agent
or, to the extent legally required, to the trustee in bankruptcy,
debtor-in-possession, receiver, liquidating trustee, custodian, assignee, agent
or other Person making such payment or distribution of assets of the Company,
for application to the payment of all Senior Debt remaining unpaid to the extent
necessary to pay all Senior Debt in full after giving effect to any concurrent
payment or distribution to or for the benefit of the holders of the Senior Debt.

Section 4. Rights of the Creditors Not to be Impaired. No right of the
Collateral Agent or any other Secured Party or any other present or future
holder of the Senior Debt to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act in
good faith by the Collateral Agent or any other such Secured Party or other
holder of the Senior Debt or by any noncompliance by [INSERT NAME

Annex A - 3

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OF AFFILIATE] with the terms and provisions and covenants herein regardless of
any knowledge thereof the Collateral Agent or any other such Secured Party or
other holder may have or otherwise be charged with. The holders of the Senior
Debt may, without in any way affecting the obligations of [INSERT NAME OF
AFFILIATE] with respect thereto, at any time or from time to time in their
absolute discretion, change the manner, place or terms or payment of, change or
extend the time or payment of or renew or alter any Senior Debt, or amend,
supplement or modify any agreement or instrument governing or evidencing such
Senior Debt or any other document referred to therein, or exercise or refrain
from exercising any other of their rights under the Senior Debt including,
without limitation, the waiver of any Default or Event of Default thereunder and
the release of any collateral securing such Senior Debt, all without notice to
or assent from [INSERT NAME OF AFFILIATE]. The provisions of this Annex A are
intended to be for the benefit of the Secured Parties and each other holder of
the Senior Debt and shall be enforceable directly by the Collateral Agent or
other Secured Parties, as applicable, or any other present or future holder or
holders of the Senior Debt.

Section 5. Restriction on Assignment of Subordinated Debt. [INSERT NAME OF
AFFILIATE] agrees not to sell, assign or transfer all or any part of the
Subordinated Debt while any Senior Debt remains unpaid. [INSERT NAME OF
AFFILIATE] represents that no other subordination of the Subordinated Debt is in
existence on the date hereof, and [INSERT NAME OF AFFILIATE] agrees that the
Subordinated Debt will not be subordinated to any indebtedness other than the
Senior Debt.

Section 6. Reliance on Subordination. [INSERT NAME OF AFFILIATE] consents and
agrees that all Senior Debt shall be deemed to have been made or incurred at the
request of [INSERT NAME OF AFFILIATE] and in reliance upon the subordination of
the Subordinated Debt pursuant to this Annex A.

Section 7. Actions Against the Company; Exercise of Remedies. [INSERT NAME OF
AFFILIATE] will not (i) commence (unless the Collateral Agent or other holders
of the Senior Debt shall have commenced) any action or proceeding against the
Company to recover all or any part of the Subordinated Debt or (ii) join with
any creditor (unless the Collateral Agent or other holders of the Senior Debt
shall also join) in bringing any proceeding against the Company under the United
States Bankruptcy Code or any other state, federal or foreign insolvency statute
unless and until, in each case, the Senior Debt shall have been irrevocably paid
in full in cash. [INSERT NAME OF AFFILIATE] will not ask, demand, sue for, take
or receive from the Company, directly or indirectly, in cash, property or
securities or by set off or in any other manner (including, without limitation,
from or by way of attachment or seizure of or foreclosure upon any property or
assets of the Company which may now or hereafter constitute collateral for any
Subordinated Debt), payment of all or any part of the Subordinated Debt if an
Event of Default shall have occurred and be continuing under the Outstanding
Agreements or under any other agreement or instrument evidencing or securing the
Senior Debt unless and until all Senior Debt shall have been irrevocably paid in
full in cash or the benefits of this sentence waived by or on behalf of the
Creditors or the other holder or holders of the Senior Debt.

Annex A - 4

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Section 8. Subrogation. [INSERT NAME OF AFFILIATE] shall be subrogated to the
rights of the holders of the Senior Debt to receive payments or distributions of
assets of the Company applicable to the Senior Debt until all amounts owing on
the Subordinated Debt have been paid in full; provided that [INSERT NAME OF
AFFILIATE] shall not enforce any payment by way of subrogation (whether
contractual, under Section 509 of the United States Bankruptcy Code or
otherwise) until all amounts payable under or with respect to the Senior Debt
have been irrevocably paid in full in cash. For the purposes of the rights of
subrogation set forth in this Section 8, no payments or distributions to any
Secured Party or other holder or holders of the Senior Debt of any cash,
property or securities to which [INSERT NAME OF AFFILIATE] would be entitled but
for the provisions of this Annex A, and no payments over pursuant to the
provisions of this Annex A to any Secured Party or holder or other holders of
the Senior Debt by [INSERT NAME OF AFFILIATE], shall, as among the Company, its
creditors (other than the Secured Parties and any other holder or holders of the
Senior Debt) and [INSERT NAME OF AFFILIATE], be deemed to be a payment or
distribution by the Company to or on account of the Senior Debt, it being
understood that the provisions of this Annex A are solely for the purpose of
defining the relative rights of the Secured Parties or any other holder or
holders of the Senior Debt and [INSERT NAME OF AFFILIATE].

If any payment or distribution to which [INSERT NAME OF AFFILIATE] would
otherwise have been entitled but for the provisions of this Annex A shall have
been applied, pursuant to the provisions of this Annex A, to the payment of all
amounts payable under the Senior Debt, then [INSERT NAME OF AFFILIATE] shall be
entitled to receive from the Secured Parties or other holder or holders of the
Senior Debt at the time outstanding any payments or distributions received by
the Secured Parties or such holder or holders of the Senior Debt in excess of
the amount sufficient to irrevocably pay all amounts under or in respect of the
Senior Debt in full in cash.

Section 9. Waiver of UCC Provisions. If any applicable provisions of the Uniform
Commercial Code as in effect in the State of New York or any other relevant
jurisdiction (the “UCC”) requires the Collateral Agent or any other Secured
Party or holder of the Senior Debt or any representative thereof to notify
[INSERT NAME OF AFFILIATE] that the Collateral Agent or such other Secured Party
or holder or representative thereof will foreclose or otherwise realize upon any
collateral or other property provided to secure the Senior Debt, whether
pursuant to Article 9 of the UCC or otherwise, [INSERT NAME OF AFFILIATE] hereby
waives, to the extent permitted by applicable law, all such required notice(s)
and, to the extent such requirement of notice may not be waived under applicable
law, agrees that five Business Days’ written notice of any such foreclosure or
other realization shall be commercially reasonable [INSERT NAME OF AFFILIATE]
further waives, to the extent permitted by applicable law, any and all rights it
may have to require the Collateral Agent or any other Secured Party or other
holder of the Senior Debt or representative thereof to marshal any collateral or
other property provided as security for the Senior Debt and any and all other
rights and remedies now or hereafter available to [INSERT NAME OF AFFILIATE]
under Section 9-611 of the UCC. [INSERT NAME OF AFFILIATE] agrees that the
Collateral Agent and any other Secured Party or holder of the Senior Debt or
representative thereof may sell inventory that constitutes collateral or other
security for any Senior Debt pursuant to a repurchase agreement, that such sale
shall not be deemed a transfer subject to Section 9-618 of the UCC or any
similar provisions of any other applicable law (such provisions, to the extent
otherwise applicable to such sale, being hereby waived), and that the repurchase
of inventory by a seller under a repurchase agreement shall be a commercially
reasonable method of disposition.

Annex A - 5

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Section 10. Proofs of Claim. [INSERT NAME OF AFFILIATE] may file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of [INSERT NAME OF AFFILIATE] allowed in any judicial
proceedings relative to the Company, its creditors or its property. If [INSERT
NAME OF AFFILIATE] files any claim, proof of claim or similar instrument in any
judicial proceeding referred to above and all Senior Debt has not been
irrevocably paid in full in cash, [INSERT NAME OF AFFILIATE] shall (i) file such
claim, proof of claim or similar instrument on behalf of the Secured Parties and
the other holder or holders of the Senior Debt as such Secured Parties’ or other
holder’s or holders’ interests may appear and (ii) take all such other actions
as may be appropriate to ensure that all payments and distributions made in
respect of any such proceedings are made to the Collateral Agent or the other
Secured Parties, as applicable, and any other holder or holders of the Senior
Debt as its or their interests may appear.

Any term or provision of this Section 10 to the contrary notwithstanding, if any
judicial proceeding referred to above is commenced by or against the Company,
and so long as all Senior Debt has not been irrevocably paid in full in cash:
(i) the Collateral Agent or any other holder or holders of the Senior Debt or
representatives thereof are hereby irrevocably authorized and empowered (in each
case, in its own name, as agent or representative on behalf of the Secured
Parties or in the name of [INSERT NAME OF AFFILIATE] or otherwise), but shall
have no obligation, to (A) demand, sue for, collect and receive every payment or
distribution received in respect of any such proceeding and give acquittance
therefor and to file claims and proofs of claims and (B) exercise any voting
rights otherwise attributable to [INSERT NAME OF AFFILIATE] in any such
proceeding; (ii) [INSERT NAME OF AFFILIATE] shall duly and promptly take, for
the account of the Secured Parties and any other holders or holders of the
Senior Debt, such action as the Collateral Agent or the Secured Parties, as
applicable, or other holder or holders of the Senior Debt or representatives
thereof may request to collect all amounts payable by the Company in respect of
the Subordinated Debt and to file the appropriate claims or proofs of claim in
respect of the Subordinated Debt; and (iii) [INSERT NAME OF AFFILIATE] shall, at
the request of the Collateral Agent or the Secured Parties, as applicable, or
other holder or holders of the Senior Debt or representatives thereof, duly and
promptly consent to or join in or stipulate its agreement with any action or
position which the Secured Parties and each other holder of the Senior Debt may
take in any such judicial proceeding referred to above, including, without
limitation, such actions and positions as the Secured Parties may take with
respect to requests for relief from the automatic stay, for authority to use
cash collateral or to use, sell or lease other property of the estate, for
assumption, assignment or rejection of any executory contract and to obtain
credit. [INSERT NAME OF AFFILIATE] hereby appoints the Collateral Agent or other
holder or holders of the Senior Debt or representatives thereof as its agent(s)
and attorney(s) in fact, all acts of such attorney(s) being hereby ratified and
confirmed and such appointment(s), being coupled with an interest, being
irrevocable until the Senior Debt is irrevocably paid in full in cash, to
exercise the rights and file the claims referred to in this Section 10 and to
execute and deliver any documentation necessary for the exercise of such rights
or to file such claims. Notwithstanding anything to the contrary contained
herein, [INSERT NAME OF AFFILIATE] shall not file any claim or take any action
which competes or interferes with the rights and interests of the Secured
Parties or any other holders of the Senior Debt under the Outstanding
Agreements, any other Financing Document or any other agreement or instrument
evidencing or securing the Senior Debt. Until the Senior Debt has been
irrevocably paid in full in cash, [INSERT NAME OF AFFILIATE] will not (in any
proceeding

Annex A - 6

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of the type described in Section 3(a)) discharge all or any portion of the
obligations of the Company in respect of the Subordinated Debt, whether by
forgiveness, receipt of capital stock, exercise of conversion privileges or
otherwise, without the prior written consent of the Collateral Agent or the
Secured Parties, as applicable, or the holder or holders of the Senior Debt.

Section 11. Obligation of the Company Unconditional. Nothing contained in this
Annex A or in the Intercompany Note is intended to or shall impair, as between
the Company and [INSERT NAME OF AFFILIATE], the obligation of the Company, which
is absolute and unconditional, to pay to [INSERT NAME OF AFFILIATE] the
principal of and interest on the Intercompany Note as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of [INSERT NAME OF AFFILIATE] and creditors of
the Company other than the holders of the Senior Debt, nor shall anything herein
or therein, except as expressly provided, prevent [INSERT NAME OF AFFILIATE]
from exercising all remedies otherwise permitted by applicable law, subject to
the rights, if any, under this Annex A of the holders of Senior Debt in respect
of cash, property, or securities of the Company received upon the exercise of
any such remedy. Upon any distribution of assets of the Company referred to in
this Annex A, [INSERT NAME OF AFFILIATE] shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are pending,
or a certificate of the liquidating trustee or agent or other Person making any
distribution to [INSERT NAME OF AFFILIATE], for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the Senior
Debt and other indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Annex A.

Section 12. Reinstatements in Certain Circumstances. If, at any time, all or
part of any payment with respect to Senior Debt theretofore made by the Company
or any other Person is rescinded or must otherwise be returned by the holders of
Senior Debt for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of Company or such other Persons), the
subordination provisions set forth herein shall continue to be effective or be
reinstated, as the case may be, all as though such payment had not been made.

Annex A - 7