Exhibit 10.1
EXECUTION VERSION
 
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of September 30, 2008
Among
MXENERGY INC. and
MXENERGY ELECTRIC INC.
as Borrowers,
MXENERGY HOLDINGS INC. AND CERTAIN SUBSIDIARIES THEREOF,
as Guarantors,
THE LENDERS FROM TIME TO TIME PARTY HERETO,
as Lenders,
and
SOCIÉTÉ GÉNÉRALE,
as Administrative Agent
 
SOCIÉTÉ GÉNÉRALE,
Lead Arranger and Sole Bookrunner
 

 

 

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TABLE OF CONTENTS

              Page  
 
       
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
    1  
Section 1.01 Certain Defined Terms
    1  
Section 1.02 Computation of Time Periods
    29  
Section 1.03 Accounting Terms
    29  
Section 1.04 Types of Advances
    30  
Section 1.05 Miscellaneous
    30  
ARTICLE II THE ADVANCES
    31  
Section 2.01 The Advances
    31  
Section 2.02 Method of Borrowing
    35  
Section 2.03 Fees
    38  
Section 2.04 Reduction of the Revolving Commitments
    40  
Section 2.05 Repayment
    40  
Section 2.06 Interest
    40  
Section 2.07 Prepayments
    41  
Section 2.08 Funding Losses
    43  
Section 2.09 Increased Costs
    44  
Section 2.10 Payments and Computations
    45  
Section 2.11 Taxes
    46  
Section 2.12 Sharing of Payments, Etc
    49  
Section 2.13 Applicable Lending Offices
    49  
Section 2.14 Letters of Credit
    50  
Section 2.15 Mitigation Obligations; Replacement of Lenders
    55  
ARTICLE III CONDITIONS OF LENDING
    56  
Section 3.01 Initial Conditions Precedent
    56  
Section 3.02 Conditions Precedent to Each Credit Event
    59  
Section 3.03 Determinations Under Section 3.01 and 3.02
    60  
ARTICLE IV REPRESENTATIONS AND WARRANTIES
    60  
Section 4.01 Existence; Subsidiaries
    60  
Section 4.02 Power and Authority
    60  
Section 4.03 Authorization and Approvals
    61  

 

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TABLE OF CONTENTS
(continued)

              Page  
 
       
Section 4.04 Enforceable Obligations
    61  
Section 4.05 Financial Statements; No Material Adverse Effect
    61  
Section 4.06 True and Complete Disclosure
    62  
Section 4.07 Litigation
    62  
Section 4.08 Compliance with Laws
    62  
Section 4.09 No Default
    63  
Section 4.10 Subsidiaries; Corporate Structure
    63  
Section 4.11 Condition of Properties
    63  
Section 4.12 Environmental Condition
    64  
Section 4.13 Insurance
    64  
Section 4.14 Taxes
    65  
Section 4.15 ERISA Compliance
    65  
Section 4.16 Security Interests
    65  
Section 4.17 Bank Accounts
    66  
Section 4.18 Labor Relations
    66  
Section 4.19 Intellectual Property
    66  
Section 4.20 Solvency
    67  
Section 4.21 Senior Indebtedness
    67  
Section 4.22 Margin Regulations
    67  
Section 4.23 Investment Company Act; Public Utility Holding Company Act
    67  
Section 4.24 Names and Locations
    67  
Section 4.25 Revisions or Updates to the Schedules
    67  
ARTICLE V AFFIRMATIVE COVENANTS
    68  
Section 5.01 Preservation of Existence, Etc
    68  
Section 5.02 Compliance with Laws, Etc
    68  
Section 5.03 Maintenance of Property
    68  
Section 5.04 Maintenance of Insurance
    69  
Section 5.05 Payment of Taxes, Etc
    69  
Section 5.06 Reporting Requirements
    69  

 

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TABLE OF CONTENTS
(continued)

              Page  
 
       
Section 5.08 Books and Records; Inspection
    74  
Section 5.09 Use of Proceeds
    75  
Section 5.10 Nature of Business
    75  
Section 5.11 Risk Management Policy
    75  
Section 5.12 Additional Guarantors
    75  
Section 5.13 Additional Collateral Requirements
    76  
Section 5.14 Further Assurances in General
    76  
Section 5.15 Secured Counterparty Guaranty
    76  
Section 5.16 Borrowing Base
    76  
Section 5.17 Sowood Borrowing
    76  
ARTICLE VI NEGATIVE COVENANTS
    77  
Section 6.01 Liens, Etc
    77  
Section 6.02 Debts, Guaranties and Other Obligations
    78  
Section 6.03 Merger or Consolidation
    79  
Section 6.04 Asset Sales
    79  
Section 6.05 Investments and Acquisitions
    80  
Section 6.06 Restricted Payments
    80  
Section 6.07 Change in Nature of Business
    81  
Section 6.08 Transactions With Affiliates
    81  
Section 6.09 Agreements Restricting Liens and Distributions
    81  
Section 6.10 Limitation on Accounting Changes or Changes in Fiscal Periods
    82  
Section 6.11 Limitation on Speculative Hedging
    82  
Section 6.12 Operating Leases
    82  
Section 6.13 Sale and Leaseback Transactions and other Off-Balance Sheet
Liabilities
    82  
Section 6.14 Subordinated Debt
    82  
Section 6.15 Amendment of Material Contracts
    83  
Section 6.16 Capital Expenditures
    83  
Section 6.17 Minimum Consolidated Tangible Net Worth
    83  
Section 6.18 Minimum Consolidated Working Capital
    83  

 

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TABLE OF CONTENTS
(continued)

              Page  
 
       
Section 6.19 Maximum Aggregate Negative EBITDA
    83  
Section 6.20 Interest Coverage Ratio
    83  
Section 6.21 Average Leverage Ratio
    84  
Section 6.22 Monthly Leverage Ratio
    84  
ARTICLE VII EVENTS OF DEFAULT
    84  
Section 7.01 Events of Default
    84  
Section 7.02 Optional Acceleration of Maturity
    86  
Section 7.03 Automatic Acceleration of Maturity
    87  
Section 7.04 Non-exclusivity of Remedies
    87  
Section 7.05 Right of Set-off
    87  
Section 7.06 Application of Proceeds
    88  
Section 7.07 Administrative Agent’s Account
    89  
ARTICLE VIII GUARANTY
    89  
Section 8.01 Liabilities Guaranteed
    89  
Section 8.02 Nature of Guaranty
    90  
Section 8.03 Agent’s Rights
    90  
Section 8.04 Guarantor’s Waivers
    90  
Section 8.05 Maturity of Obligations, Payment
    91  
Section 8.06 Agent’s Expenses
    91  
Section 8.07 Liability
    92  
Section 8.08 Events and Circumstances Not Reducing or Discharging any
Guarantor’s Obligations
    92  
Section 8.09 Subordination of All Guarantor Claims
    94  
Section 8.10 Claims in Bankruptcy
    95  
Section 8.11 Payments Held in Trust
    95  
Section 8.12 Benefit of Guaranty
    95  
Section 8.13 Reinstatement
    95  
Section 8.14 Liens Subordinate
    96  
Section 8.15 Guarantor’s Enforcement Rights
    96  
Section 8.16 Limitation
    96  

 

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TABLE OF CONTENTS
(continued)

              Page  
 
       
Section 8.17 Contribution Rights
    96  
Section 8.18 Release of Guarantors
    97  
ARTICLE IX THE ADMINISTRATIVE AGENT
    97  
Section 9.01 Appointment and Authority
    97  
Section 9.02 Rights as a Lender
    97  
Section 9.03 Exculpatory Provisions
    98  
Section 9.04 Reliance by the Administrative Agent
    98  
Section 9.05 Delegation of Duties
    99  
Section 9.06 Resignation of the Administrative Agent
    99  
Section 9.07 Non-Reliance on Administrative Agent and Other Lenders
    100  
Section 9.08 Indemnification
    100  
Section 9.09 Collateral and Guaranty Matters
    101  
Section 9.10 Intercreditor Agreement and Security Documents
    102  
Section 9.11 No Other Duties, etc
    102  
ARTICLE X MISCELLANEOUS
    103  
Section 10.01 Amendments, Etc
    103  
Section 10.02 Notices, Etc
    104  
Section 10.03 No Waiver; Cumulative Remedies
    105  
Section 10.04 Costs and Expenses
    105  
Section 10.05 Indemnification
    106  
Section 10.06 Successors and Assigns
    107  
Section 10.07 Confidentiality
    110  
Section 10.08 Execution in Counterparts
    111  
Section 10.09 Survival of Representations, etc
    111  
Section 10.10 Severability
    111  
Section 10.11 Interest Rate Limitation
    112  
Section 10.12 Governing Law
    112  
Section 10.13 Joint and Several Liability
    112  
Section 10.14 Submission to Jurisdiction
    113  
Section 10.15 Waiver of Jury
    114  
Section 10.16 Entire Agreement
    114  

 

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EXHIBITS:
       
 
       
Exhibit A
  -   Form of Assignment and Acceptance Agreement
Exhibit B
  -   Form of Borrowing Base Report
Exhibit C
  -   Form of Compliance Certificate
Exhibit D
  -   Form of Letter of Credit Request
Exhibit E
  -   Form of Note
Exhibit F
  -   Form of Notice of Borrowing
Exhibit G
  -   Form of Notice of Conversion or Continuation
Exhibit H
  -   Form of Pledge Agreement
Exhibit I
  -   Form of Security Agreement
Exhibit J
  -   Form of Qualifying Supplier Letter of Credit
Exhibit K
  -   Form of Risk Management Policy Certification

         
SCHEDULES:
       
 
       
Schedule 1.01(a)
  -   Tier II Eligible Exchange Accounts
Schedule 1.01(b)
  -   Guarantors
Schedule 1.01(c)
  -   LDCs
Schedule 1.01(e)
  -   Material Contracts
Schedule 2.01
  -   Commitments and Pro Rata Shares of the Lenders
Schedule 4.01
  -   Licensed Jurisdictions
Schedule 4.10
  -   Subsidiaries
Schedule 4.13
  -   Insurance
Schedule 4.17
  -   Bank Accounts
Schedule 4.24
  -   Locations
Schedule 6.01
  -   Existing Liens
Schedule 6.02
  -   Existing Debt
Schedule 6.05
  -   Investments
Schedule 6.08
  -   Affiliate Transactions
Schedule 6.09
  -   Restrictive Agreements
Schedule 10.02
  -   Addresses for Notice

 

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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amended and Restated Credit Agreement dated as of September 30, 2008
is among MxEnergy Inc., a Delaware corporation (“MxEnergy”), MxEnergy Electric
Inc., a Delaware corporation (“MxEnergy Electric”; MxEnergy and MxEnergy
Electric are each individually, a “Borrower” and collectively, the “Borrowers”),
the Guarantors, the Lenders, and Société Générale, as Administrative Agent for
the Lenders.
Reference is made to the First Amended and Restated Credit Agreement dated as of
August 1, 2006, as amended (the “Existing Credit Agreement”) executed among the
Borrowers, the Lenders party thereto, and the Administrative Agent, pursuant to
which the Lenders parties thereto agreed to make available to the Borrower a
revolving credit facility for loans and letters of credit upon the terms and
conditions set forth therein and in the other Loan Documents (as defined
therein).
The Borrowers have requested the Lenders, and the Lenders have agreed, to amend
and restate the Existing Credit Agreement, subject to the terms and conditions
of this Agreement.
The Borrowers, the Guarantors, the Lenders, and the Administrative Agent agree
as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms. Any terms used in this Agreement that are
defined in Article 9 of the Uniform Commercial Code as adopted in the State of
New York (“UCC”) shall have the meanings assigned to those terms by the UCC as
of the date of this Agreement. As used in this Agreement, the terms defined
above shall have the meanings set forth therein and the following terms shall
have the following meanings (unless otherwise indicated, such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
“Acceptable Credit Support” means one or more letters of credit payable in
Dollars for the benefit of a Borrower or one of its Subsidiaries to support
payment of an Eligible Exchange Account or Eligible Account of such Loan Party,
which letter of credit is in form and substance acceptable to the Administrative
Agent and issued by a bank or other financial institution approved by the
Administrative Agent, each in its sole discretion, and for which an Acceptable
Security Interest exists on all letter-of-credit rights associated with such
letter of credit.
“Acceptable Security Interest” in any Property means a Lien which (a) exists in
favor of the Administrative Agent for the benefit of the Secured Parties;
(b) secures the Obligations; and (c) is perfected and enforceable against the
Loan Party that created such security interest in preference to any rights of
any Person therein, other than Excepted Liens.

 

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“Account Control Agreement” shall mean, if any deposit or securities account of
a Borrower or any Loan Party is held with a financial institution that is not
the Administrative Agent, an agreement or agreements in form and substance
reasonably acceptable to the Administrative Agent between the Administrative
Agent and such other financial institution governing any such deposit accounts
or securities accounts of such Borrower or such Loan Party.
“Acquisition” means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Parent or any
of its Subsidiaries (a) acquires any going business or all or substantially all
of the assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise, (b) directly
or indirectly acquires (in one transaction or as the most recent transaction in
a series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of the
outstanding ownership interests of a partnership or limited liability company,
or (c) acquires customers or customer lists and related assets from another
Person.
“Adjusted Base Rate” means, for any day, a fluctuating rate of interest per
annum equal to the higher of (a) the Prime Rate in effect for such day, (b) the
sum of the Federal Funds Effective Rate in effect for such day plus 1/2 of 1%
per annum, and (c) in the case of Base Rate Advances made in the circumstances
set forth in Section 2.02(c)(iv), the Cost of Funds. “Cost of Funds” means the
Administrative Agent’s determination, made on each day, as to the effective cost
of its obtaining funds on such day for maintaining a Base Rate Advance, which
shall be expressed as a rate of interest per annum to be charged on each day
from the date of such Base Rate Advance until paid when due. Any change in the
Adjusted Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate, or the Cost of Funds shall be effective on the effective date of
such change in the Prime Rate, Federal Funds Effective Rate, or the Cost of
Funds.
“Administrative Agent” means SG in its capacity as administrative agent for the
Lenders under the Loan Documents and any successor in such capacity appointed
pursuant to Section 9.06.
“Administrative Agent’s Account” means account no. 193852 maintained at SG, and
is the “Collateral Account” established and maintained pursuant to Section 7.07,
in the name of the Borrowers but under the sole dominion and control of, and
exclusive right of withdrawal at the direction of, the Administrative Agent and
subject to the terms of this Agreement.
“Administrative Questionnaire” means an administrative questionnaire in a form
supplied by the Administrative Agent.
“Affiliate” of any Person, means any other Person that, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such Person or any Subsidiary of such Person. The term
“control” (including the terms “controlled by” or “under common control with”)
means the possession, directly or indirectly, of the power to (a) vote or direct
the voting of 10% or more of the outstanding shares of Voting Stock of such
Person or (b) direct or cause the direction of the management and policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise.

 

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“Agreement” means this Second Amended and Restated Credit Agreement dated as of
September 30, 2008 among the Borrowers, the Guarantors, the Lenders, and the
Administrative Agent, as it may be amended or modified and in effect from time
to time.
“Applicable Lending Office” means (a) with respect to any Lender, the office,
branch, subsidiary, affiliate or correspondent bank of such Lender specified in
its Administrative Questionnaire or such other office, branch, subsidiary,
affiliate or correspondent bank as such Lender may from time to time specify to
the Borrowers and the Administrative Agent from time to time and (b) with
respect to the Administrative Agent, the address specified for such Person on
Schedule 10.02 or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a notice to
the other parties.
“Applicable Margin” means, for any day, with respect to Revolving Advances of
any Type, Swing Line Advance, letter of credit fees or commitment fees, the
applicable percentage rate per annum set forth below:

                                          Swing Line                      
Advance     Revolving Advance                     Federal                  
Letter       Funds     Euro-     Base             of   Prime   Effective    
dollar     Rate     Commitment     Credit   Rate   Rate     Advances    
Advances     Fees     Fees      
1.750%
    3.625 %     3.000 %     2.000 %     0.500 %     2.750 %

“Arranger” means SG in its capacity as lead arranger and sole bookrunner.
“Asset Disposition” or “Dispose” means the disposition, whether by sale, lease,
license, transfer, loss, damage, destruction, condemnation or otherwise, of any
or all of the Property of the Parent or any of its Subsidiaries other than
(a) any sale or issuance of Equity Interests of any of the Parent’s Subsidiaries
to any Loan Party, (b) sales of inventory in the ordinary course of business,
(c) dispositions of assets having a fair market value of $2,000,000.00 or less
individually or in the aggregate of $5,000,000.00 or less in any fiscal year of
the Parent, (d) dispositions of accounts to LDCs under guaranteed receivables
agreements entered into in the ordinary course of business and (e) dispositions
of assets which have become obsolete or no longer useful in the business of any
Loan Party.

 

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“Assignment and Acceptance” shall mean an assignment and assumption entered into
by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.06), and accepted by the Administrative Agent,
in substantially the form of Exhibit A or any other form approved by the
Administrative Agent in its sole discretion and the Borrowers, which consent by
the Borrowers shall not be unreasonably withheld or delayed.
“Attributable Indebtedness” means, on any date, (a) in respect of any Capital
Lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a Capital Lease.
“Audited Financial Statements” means the audited consolidated balance sheet of
the Parent and its Subsidiaries for the fiscal year ended June 30, 2005,
June 30, 2006 and June 30, 2007 together with the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such
fiscal year of the Parent and its Subsidiaries including the notes thereto and
including an unaudited reconciliation from GAAP to Non-GAAP Financial Reporting.
“Base Rate Advance” means a Revolving Advance that bears interest at a rate
determined by reference to the Adjusted Base Rate.
“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act.
“Blocked Accounts” has the meaning set forth in Section 5.13(b).
“Borrowing” means a borrowing consisting of simultaneous Revolving Advances of
the same Type made, converted or continued on the same Business Day, and, in the
case of Eurodollar Advances, as to which a single Interest Period is in effect.
“Borrowing Base” means, as of any date of determination, an amount equal to the
sum of the following (without duplication), determined as of the date of the
Borrowing Base Report then most recently delivered pursuant to this Agreement,
but subject to such additional eligibility requirements and reserves as may be
reasonably determined by the Administrative Agent after consultation with the
Borrowers (but not subject to the Borrowers’ approval thereof):
(a) an amount equal to 100% of cash and Cash Equivalents of the Borrowers and
their Subsidiaries in Dollars that are subject to an Acceptable Security
Interest; plus
(b) 90% of Tier I Eligible Accounts; plus
(c) 80% of Tier II Eligible Accounts; plus
(d) 85% of Tier I Unbilled Eligible Accounts; plus

 

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(e) 80% of Tier II Unbilled Eligible Accounts; plus
(f) 80% of the positive value of Eligible Exchange Accounts; plus
(g) 80% of the positive value of Imbalances; plus
(h) 85% of Eligible Inventory; plus
(i) 85% of Eligible LDC Residual Contract Rights; plus
(j) 80% of Undelivered Product Value; minus
(k) 120% of the Swap Termination Value owed by a Borrower or any of its
Subsidiaries for any Swap Contract between a Borrower or any of its Subsidiaries
and a Swap Counterparty; minus
(l) 100% of First Purchaser Liens.
“Borrowing Base Availability” means the excess, if any, of the Borrowing Base
over the sum of the Revolving Advances, the Letter of Credit Exposure and the
Swing Line Advances.
“Borrowing Base Report” means a certificate and schedule duly executed by a
Financial Officer of the Parent appropriately completed and in substantially the
form of Exhibit B.
“Borrowing Date” means the date on which any Revolving Advance or Swing Line
Advance is made or any Letter of Credit is issued hereunder.
“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the laws of, or are in fact
closed in, New York and, if such day relates to any Eurodollar Advance, means
any such day on which dealings in Dollar deposits are conducted by and between
banks in the London interbank eurodollar market.
“Capital Expenditures” means all expenditures of any Person in respect of the
purchase or other acquisition, construction or improvement of any fixed or
capital assets that are required to be capitalized under GAAP on a balance sheet
as property, plant, equipment or other fixed assets or intangibles; provided,
however that Capital Expenditures shall in any event exclude (a) normal
replacements and maintenance which are properly charged to current operations
and (b) amounts expended with the proceeds of insurance to repair or replace
fixed or capital assets.
“Capital Lease” of a Person means any lease of any Property by such Person as
lessee that would, in accordance with GAAP, be required to be classified and
accounted for as a capital lease on the balance sheet of such Person.
“Cash Equivalents” means:
(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

 

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(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody’s;
(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, the Administrative Agent or any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof that has a combined capital and surplus and undivided profits of not
less than $500,000,000.00;
(d) fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria of clause (c) above; and
(e) investments in “money market funds” within the meaning of Rule 2a-7 of the
Investment Company Act of 1940, as amended, substantially all of whose assets
are invested in investments of the type described in clauses (a) through
(d) above.
“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption of taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority (other
than any request, guideline or directive that provides that compliance is
optional and that there is no penalty or charge of any kind for failure to
comply).
“Change of Control” means the occurrence of any of the following events:
(a) prior to the consummation of an Initial Public Offering, (i) the failure of
Jeffrey Mayer (the “Key Executive”) to be employed by the Parent on a full-time
basis in his capacity as President and Chief Executive Officer and involved in
the day-to-day operations of the Parent and its Subsidiaries and (ii) if such
failure is due to death, accident, illness, or legal incapacity of the Key
Executive and the Key Executive is not replaced within 90 days after such
failure with an executive consented to by the Majority Banks in writing;
(b) the failure of either Borrower to be a Wholly-Owned Subsidiary of the
Parent;
(c) except for the consummation of an Initial Public Offering, the direct or
indirect sale, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the properties or assets of the Parent and its Subsidiaries
taken as a whole to any “person” (as that term is used in Section 13(d) of the
Exchange Act, but excluding any employee benefit plan of the Parent or any of
its Subsidiaries, and any person or entity acting in its capacity as trustee,
agent or other fiduciary or administrator of any such plan);

 

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(d) except for the consummation of an Initial Public Offering, the consummation
of any transaction (including any merger or consolidation) the result of which
is that any “person” (as defined above) (other than Sowood, Charterhouse
Financial, Greenhill Capital Partners, Jeffrey Mayer or Carol Roberta
Artman-Hodge (or any of their Affiliates)) becomes the Beneficial Owner,
directly or indirectly, of more than 25% of the Voting Stock of the Parent,
measured by voting power rather than number of shares;
(e) prior to the consummation of an Initial Public Offering, Sowood fails to be
the Beneficial Owner, directly or indirectly, of at least 20% of the Voting
Stock of the Parent;
(f) prior to the consummation of an Initial Public Offering, the first day on
which a majority of the members of the Board of Directors of the Parent are not
Continuing Directors; or
(g) the Parent consolidates with, or merges with or into, any Person, or any
Person consolidates with, or merges with or into, the Parent, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of the
Parent or such other Person is converted into or exchanged for cash, securities
or other property, other than any such transaction where the Voting Stock of the
Parent outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock of the surviving or transferee Person constituting a
majority of the outstanding shares of such Voting Stock of such surviving or
transferee Person (immediately after giving effect to such issuance).
“Closing Date” means September 30, 2008.
“Code” means the United States Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time, and any successor statute and
all rules and regulations promulgated thereunder.
“Collateral” means all the “Collateral” as defined in any Security Document.
“Collecting Banks” has the meaning set forth in Section 5.13.
“Compliance Certificate” means a Compliance Certificate signed by a Financial
Officer of the Parent in substantially the form of the attached Exhibit C.
“Confidential Information Memorandum” means the Confidential Information
Memorandum dated August 2008 (together with all amendments and supplements
thereto) and furnished to the initial Lenders in connection with the syndication
of the Revolving Advances made hereunder.
“Consolidated Current Assets” means, as to any Person at any date, all amounts
which would, in conformity with GAAP, be included under current assets (other
than amounts owing to such Person from an Affiliate (other than a Subsidiary of
such Person) thereof) on a balance sheet of such Person determined on a
consolidated basis at such date.
“Consolidated Current Liabilities” means, as to any Person at any date, (a) all
amounts which would, in conformity with GAAP, be included under current
liabilities on a balance sheet of a Person plus (b) to the extent not included
in the foregoing clause (a), all outstanding Revolving Advances, Swing Line
Advances, and Reimbursement Obligations, all determined on a consolidated basis
at such date.

 

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“Consolidated EBITDA” means, for any period, without duplication, the sum of the
following for the Parent and its Subsidiaries on a consolidated basis, each
calculated for such period:
(a) Consolidated Net Income for such period of determination plus
(b) to the extent deducted in determining Consolidated Net Income, Consolidated
Interest Expense, charges against income for foreign, federal, state, and local
taxes, depreciation and amortization expense and other non-cash charges,
extraordinary, unusual or non-recurring expenses or losses, amortization or
write off of debt discount and debt issuance costs and commissions, discounts
and other fees and charges associated with letters of credit or Debt, and any
losses on sales of assets outside the ordinary course of business minus
(c) extraordinary or non-recurring gains for such period minus
(d) any gain realized upon the sale or other disposition of any assets of the
Parent or any of its Subsidiaries for such period (other than in the ordinary
course of business) minus
(e) the income of any Person (other than Wholly-Owned Subsidiaries of the
Parent) in which the Parent or a Wholly-Owned Subsidiary of the Parent has an
ownership interest except to the extent such income is received by the Parent or
such Wholly-Owned Subsidiary in a cash distribution during such period, all as
determined on a consolidated basis in accordance with GAAP, plus the loss or
minus
(f) the income of any Person accrued prior to the date it becomes a Subsidiary
of the Parent or is merged into or consolidated with the Parent or any of its
Subsidiaries, minus
(g) non-cash gains (if the gain is the result of an overhedged position), losses
or adjustments under FASB Statement 133 as a result of changes in the fair
market value of derivatives, plus losses or minus gains
(h) from settled financial hedges with a term of one year or less for inventory
before it is sold to customers.
“Consolidated Interest Expense” means, for any period, the interest expense net
of interest income of the Parent and its Subsidiaries calculated on a
consolidated basis in accordance with GAAP for such period excluding, however,
the amortization of upfront fees and discounts paid in connection with this
Agreement, the Existing Credit Agreement, the Senior Notes, the Master
Transaction Agreement dated as of August 1, 2006 between MxEnergy and SG, and
the renewal and replacement of the Master Transaction Agreement.
“Consolidated Net Income” means, for any period, (a) for all purposes other than
Section 6.17, the net income of the Parent and its Subsidiaries calculated on a
consolidated basis for such period after taxes, as determined in accordance with
GAAP and (b) for purposes of Section 6.17 only, the result of the following for
the Parent and it Subsidiaries on a consolidated basis, each calculated for such
period beginning with the fiscal period ending June 30, 2008:
(i) the net income after taxes, as determined in accordance with GAAP plus
(ii) non-cash losses to the extent they reduced Consolidated Net Income under
FASB Statement 133 as a result of changes in the fair market value of
derivatives minus

 

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(iii) non-cash gains to the extent they increased Consolidated Net Income under
FASB Statement 133 as a result of changes in the fair market value of
derivatives plus losses or minus gains
(iv) from settled financial hedges with a term of one year or less for inventory
before it is sold to customers.
“Consolidated Tangible Net Worth” means, as of any date of determination, for
the Parent and its Subsidiaries on a consolidated basis, (a) Shareholders’
Equity of the Parent and its Subsidiaries on that date minus (b) the Intangible
Assets of the Parent and its Subsidiaries on that date, minus (c) assets that
are the result of non-cash gains or adjustments under FASB Statement 133 as a
result of changes in the fair market value of derivatives, plus (d) liabilities
that are the result of non-cash losses or adjustments under FASB Statement 133
as a result of changes in the fair market value of derivatives minus (e) any
Accounts due from any Affiliates (other than Subsidiaries) of the Parent plus or
minus (f) the Preferred Stock Adjustment, as applicable, plus (g) the book value
of customer accounts plus losses or minus gains (h) from settled financial
hedges with a term of one year or less for inventory before it is sold to
customers for the 12-month period ending as of such date plus (i) non-cash
compensation expenses from July 1, 2006 through such date to the extent included
in the calculation of Consolidated Net Income for such period.
“Consolidated Working Capital” means (a) Consolidated Current Assets of the
Parent (excluding all non-cash assets under FASB 133 and any accounts due from
any Affiliates (other than any Subsidiary) of the Parent) minus (b) Consolidated
Current Liabilities of the Parent (excluding non-cash obligations under FASB 133
and any accounts due from any Affiliates (other than any Subsidiary) of the
Parent) plus (c) any applicable Preferred Stock Adjustment to current
liabilities.
“Continue”, “Continuation”, and “Continued” each refers to a continuation of
Revolving Advances for an additional Interest Period upon the expiration of the
Interest Period then in effect for such Revolving Advances.
“Continuing Directors” means, as of any date of determination, any member of the
Board of Directors of the Parent who (a) was a member of such Board of Directors
on the Closing Date or (b) was nominated for election or elected to such Board
of Directors with the approval of a majority of the Continuing Directors who
were members of such Board at the time of such nomination or election.
“Convert”, “Conversion”, and “Converted” each refers to a conversion of
Revolving Advances of one Type into Revolving Advances of another Type pursuant
to Section 2.02(b).

 

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“Debt,” means, for any Person, without duplication, all of the following,
whether or not included as indebtedness or liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments;
(b) obligations of such Person to pay the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business);
(c) Capital Leases;
(d) all obligations of such Person in respect of letters of credit, bankers’
acceptances, bank guarantees, surety bonds or similar instruments which are
issued upon the application of such Person or upon which such Person is an
account party or for which such Person is in any way liable;
(e) net obligations of such Person under any Swap Contract;
(f) Off-Balance Sheet Liabilities;
(g) indebtedness secured by a Lien on Property now or hereafter owned or
acquired by such Person (including indebtedness arising under conditional sales
or other title retention agreements), whether or not such indebtedness shall
have been assumed by such Person or is limited in recourse (provided, that if
such Person has not assumed or otherwise become liable in respect of such Debt,
such Debt shall be deemed to be in an amount equal to the lesser of the amount
of such Debt and the fair market value of the Property encumbered by such Lien);
and
(h) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, the Debt of any Person shall include the Debt of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Debt is expressly made non-recourse to
such Person. The amount of any net obligation under any Swap Contract on any
date shall be deemed to be the Swap Termination Value thereof as of such date.
The amount of any Capital Lease or Off-Balance Sheet Liability as of any date
shall be deemed to be the amount of Attributable Indebtedness in respect thereof
as of such date.
“Default” means (a) an Event of Default or (b) any event or condition which with
notice or lapse of time or both would, unless cured or waived, become an Event
of Default.
“Dollars” and “$” means the lawful money of the United States of America.
“Domestic Subsidiary” means a Subsidiary that is organized or incorporated under
the laws of the United States or a State thereof.
“Eligible Accounts” means, as at any date of determination, accounts payable in
Dollars of a Borrower or any of its Subsidiaries resulting from the sale of
electricity or natural gas in the United States of America:
(a) in which the Administrative Agent has an Acceptable Security Interest;

 

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(b) that consist of valid, bona fide accounts receivable and contract
receivables, each owed to and owned by a Borrower or one of its Subsidiaries
arising out or resulting from goods actually sold and delivered or for services
fully rendered by such Loan Party;
(c) that are payable within 30 days after the invoice date and not unpaid for
more than 60 days after the due date specified in the original invoice or after
the invoice date if no due date was specified;
(d) that are otherwise eligible with respect to which the account debtor is owed
a credit, discount, allowance or other similar adjustment by a Borrower or one
of its Subsidiaries, but only to the extent such accounts are not subject to
such credit, discount, allowance or other similar adjustment;
(e) with respect to which the account debtor is not a Governmental Authority,
unless, to the extent required, such Borrower has, with respect to such
accounts, complied with the Federal Assignment of Claims Act of 1940 as amended
(31 U.S.C. Section 3727 et seq.) or any applicable statute or municipal
ordinance of similar purpose and effect;
(f) with respect to which the account debtor is not an Affiliate of the Parent
or a director, officer, agent, stockholder or employee of the Parent or any of
its Affiliates;
(g) that are not due from an account debtor (i) for which more than 50% of the
aggregate amount of accounts of such Person to the Borrowers and their
Subsidiaries collectively has at the time remained unpaid for more than 60 days
after due date specified in the original invoice or after the invoice date if no
due date was specified or (ii) that is in default on any other Debt owed by such
Person to the Borrowers and their Subsidiaries, collectively;
(h) with respect to which there is no offset or counterclaim or unresolved
dispute with the respective account debtor (but only to the extent such accounts
are not subject to such potential offset or counterclaim or unresolved dispute);
(i) with respect to which no Borrower has mark-to-market exposure to the account
debtor under any Swap Contracts, including forward sales or purchases of gas,
power, or another commodity, (but only to the extent such accounts exceed such
mark-to-market exposure, net of any letters of credit or cash margin held by the
account debtor to support such mark-to-market exposure);
(j) with respect to which the account debtor is the subject of no bankruptcy or
other insolvency proceeding;
(k) with respect to which the account debtor’s obligation to pay is
unconditional and not subject to a repurchase obligation or right to return or
with respect to which the goods or services giving rise to such account have
been delivered (or performed, as applicable) and accepted by such account
debtor;
(l) with respect to which the account debtor is not located in New Jersey or any
other state denying creditors access to its courts in the absence of a Notice of
Business Activities Report or other similar filing, unless the applicable
Borrower or Subsidiary has either qualified as a foreign corporation authorized
to transact business in such state or has filed a Notice of Business Activities
Report or similar filing with the applicable state agency for the then current
year;

 

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(m) with respect to which the account debtor is not a creditor of a Borrower or
any of its Subsidiaries; provided, however, that any such account shall only be
ineligible as to that portion of such account which is less than or equal to the
amount owed by such Loan Party to such Person;
(n) that, if no invoice has been issued for such accounts, have been included in
a Borrowing Base Report during not more than one calendar month, excluding the
portion accumulated under budget billing customer plans entered into in the
ordinary course of business; and
(o) that have not been deemed to be ineligible for borrowing purposes by the
Administrative Agent in its reasonable credit judgment.
“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, and
(c) any other Person (other than a natural person) approved by the
Administrative Agent in its sole discretion, and, so long as no Event of Default
exists, the Borrowers, in either case, such approval not to be unreasonably
withheld or delayed; provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include any Borrower or any of any Borrower’s Affiliates or
Subsidiaries.
“Eligible Exchange Account” means the amount of any account or general
intangible of a Borrower or any of its Subsidiaries that:
(a) would otherwise be an Eligible Account except that the consideration due to
such Loan Party is natural gas or electricity;
(b) consists of an enforceable right of such Loan Party to receive natural gas
or electricity in exchange for the sale or trade of natural gas or electricity
previously delivered to the exchange debtor by such Loan Party;
(c) is evidenced by a written agreement enforceable against the exchange debtor
thereof;
(d) is valued at the current market price as reasonably determined by the
Administrative Agent;
(e) if such account or general intangible is from a Tier II Account Party and
all such accounts and general intangibles from such Tier II Account Party
exceeds $500,000.00, it is by a Tier II Account Party listed on the attached
Schedule 1.01(a) or pre-approved by the Majority Lenders in their reasonable
credit discretion or it is supported by Acceptable Credit Support;
(f) in the case of natural gas, provides for the delivery to such Loan Party of
natural gas that will constitute Eligible Inventory, and
(g) has not been otherwise determined by the Administrative Agent in its sole
discretion to be unacceptable.

 

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“Eligible Inventory” means, as at any date of determination, the value
(determined at the current market value as reasonably determined by the
Borrowers and agreed to by the Administrative Agent) of all inventory owned by a
Borrower or any of its Subsidiaries that is subject to an Acceptable Security
Interest. Without limiting the generality of the foregoing, the following is not
Eligible Inventory:
(a) inventory that does not consist of natural gas;
(b) inventory located at any location other than those identified pursuant to
Section 4.24, as the same may be updated from time to time;
(c) inventory located at a leased location or with a warehouseman, bailee,
processor, supplier or similar third party in each case unless (i) the
Administrative Agent has given its prior consent thereto, (ii) a Lien waiver and
collateral access agreement, in form and substance satisfactory to the
Administrative Agent has been delivered to the Administrative Agent, or
(iii) rent reserves reasonably satisfactory to the Administrative Agent have
been established with respect thereto;
(d) inventory which the Administrative Agent determines in its reasonable credit
judgment is unacceptable for borrowing purposes due to quality or quantity;
(e) inventory produced in violation of the Fair Labor Standards Act and subject
to the so-called “hot goods” provisions contained in Title 29 U.S.C. 215 (a)(i)
or any replacement statute;
(f) inventory located at a vendor’s location or with a consignee;
(g) inventory with respect to which there is an unresolved claim or dispute with
the respective LDC or other Person that has any contractual rights with respect
to such inventory (but only to the extent of the amounts the subject of the
unresolved claim or dispute); and
(h) inventory that has been specifically reserved against by a Borrower or any
of its Subsidiaries.
“Eligible LDC Residual Contract Right” means, as at any date of determination,
the value (determined at the current market value as reasonably determined by
the Borrowers and agreed to by the Administrative Agent) of a Borrower’s or any
of its Subsidiaries’ enforceable right to receive payment for its natural gas
that an LDC holds, or to obtain the return of its natural gas from, an LDC
(a) that is subject to an Acceptable Security Interest, (b) that is approved by
the Administrative Agent in its sole discretion, and (c) with respect to which
there is no offset or counterclaim or unresolved claim or dispute with such LDC
(but only to the extent of the amounts of such offset or counterclaim or
unresolved claim or dispute).
“End User” means a retail residential or commercial or industrial buyer of
natural gas or electricity from a Borrower or any of its Subsidiaries in
deregulated energy markets.

 

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“Environmental Claim” means any allegation, notice of violation, action,
lawsuit, claim, demand, judgment, order or proceeding by any Governmental
Authority or any Person for liability or damage, including, without limitation,
personal injury, property damage, contribution, indemnity, direct or
consequential damages, damage to the environment, nuisance, pollution, or
contamination, or for fines, penalties, fees, costs, expenses or restrictions
arising under or otherwise related to an obligation under Environmental Law.
“Environmental Law” means all former, current and future Federal, state, local
and foreign laws (including common law), treaties, regulations, rules,
ordinances, codes, decrees, judgments, directives, orders (including consent
orders), and agreements in each case, relating to protection of the environment,
natural resources, human health and safety or the presence, Release of, or
exposure to, Hazardous Materials, or the generation, manufacture, processing,
distribution, use, treatment, storage, transport, recycling or handling of, or
the arrangement for such activities with respect to, Hazardous Materials.
“Environmental Liability” shall mean all liabilities, obligations, damages,
losses, claims, actions, suits, judgments, orders, fines, penalties, fees,
expenses and costs (including administrative oversight costs, natural resource
damages and remediation costs), whether contingent or otherwise, arising out of
or relating to (a) compliance or non-compliance with any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the Release of any Hazardous Materials or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
“Environmental Permit” means any permit, license, order, approval or other
authorization under any Environmental Law.
“Equity Interests” shall mean shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity interests in any person, or any obligations convertible
into or exchangeable for, or giving any person a right, option or warrant to
acquire, such equity interests or such convertible or exchangeable obligations.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time-to-time, and any successor statute and all rules and regulations
promulgated thereunder.
“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Parent within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Parent or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Parent or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Parent or any ERISA Affiliate.

 

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“Eurocurrency Liabilities” has the meaning assigned to that term in
Regulation D.
“Eurodollar Advance” means a Revolving Advance that bears interest based on the
Eurodollar Rate.
“Eurodollar Rate” means, with respect to a Eurodollar Advance for the relevant
Interest Period, the applicable British Bankers’ Association Interest Settlement
Rate for deposits in Dollars appearing on Page 3750 of the Dow Jones Markets
Screen as of 11:00 a.m. (London, England time) two Business Days prior to the
first day of such Interest Period, and having a maturity equal to such Interest
Period, provided that if the Dow Jones Markets Screen is not available to the
Administrative Agent for any reason, then the applicable Eurodollar Rate for the
relevant Interest Period shall instead be the rate determined by the
Administrative Agent to be the rate at which SG or one of its Affiliate banks
offers to place deposits in Dollars with first class banks in the London
interbank market at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, in the approximate amount of
SG’s relevant Eurodollar Advance and having a maturity equal to such Interest
Period.
“Eurodollar Rate Reserve Percentage” of any Lender for the Interest Period for
any Eurodollar Advance means the reserve percentage applicable during such
Interest Period (or if more than one such percentage shall be so applicable, the
daily average of such percentages for those days in such Interest Period during
which any such percentage shall be so applicable) under regulations issued from
time-to-time by the Federal Reserve Board for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period. The Eurodollar Rate Reserve Percentage shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.
“Events of Default” has the meaning set forth in Section 7.01.
“Excepted Liens” means:
(a) Liens for taxes, assessments or governmental charges or levies on its
Property if the same shall not at the time be delinquent or thereafter can be
paid without penalty, or are being contested in good faith and by appropriate
proceedings diligently conducted and for which adequate reserves in accordance
with and to the extent required by GAAP shall have been set aside on its books;
(b) Liens imposed by law, or arising by operation of law, including, without
limitation, carriers’, warehousemen’s, landlord’s, mechanics’, materialmen’s,
and other similar liens arising in the ordinary course of business which secure
payment of obligations not more than 30 days past due or which are being
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves shall have been set aside on the books of the applicable
Person;

 

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(c) Liens incurred and pledges or deposits made in the ordinary course of
business in connection with worker’s compensation, unemployment insurance or
other social security or retirement benefits, or similar legislation, other than
any Lien imposed by ERISA;
(d) deposits to secure the performance of bids and leases (other than Debt),
statutory obligations, surety bonds (other than bonds related to judgments or
litigation), performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;
(f) Liens in the Collateral (which Liens may be superior to the Administrative
Agent’s Lien in the Collateral) provided by the Intercreditor Agreement; and
(g) Liens on up to $40,000,000.00 in the aggregate of cash and Cash Equivalents
(i) deposited by a Borrower or any of its Subsidiaries in margin accounts with
or on behalf of futures contract brokers or paid over to other counterparties or
(ii) pledged or deposited as collateral to a contract counterparty by a Borrower
or any of its Subsidiaries, in the case of clause (i) or (ii), to secure
obligations with respect to (A) contracts for trading activities in the ordinary
course of business and contracts (including physical delivery, option (whether
cash or financial), exchange, swap and futures contracts) for the purchase,
transmission, distribution, sale, lease or hedge of any energy-related commodity
or service or (B) commodity price management contracts or derivatives.
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the Issuing Bank, the Swing Line Lender or any other recipient of any payment to
be made by or on account of any obligation of the Borrowers hereunder, (a) taxes
imposed on or measured by its overall net income (however denominated), and
franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction
(or any political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the applicable Lender is located and (c) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrower under Section 2.15), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
hereto (or designates a new lending office) or is attributable to such Foreign
Lender’s failure or inability (other than as a result of a Change in Law) to
comply with Section 2.11(e), except to the extent that such Foreign Lender (or
its assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrowers with
respect to such withholding tax pursuant to Section 2.11(a).
“Existing Credit Agreement” has the meaning set forth in the recitals.

 

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“Federal Funds Effective Rate” means, for any day, a fluctuating interest rate
per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (New
York time) on such day on such transactions received by the Administrative Agent
from three Federal funds brokers of recognized standing selected by it.
“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System or any of its successors.
“Fee Letters” means (a) the letter agreement dated as of July 24, 2008 among the
Borrowers, the Administrative Agent and the Arranger and (b) the letter
agreement dated as of the Closing Date by the Borrowers to the Lenders.
“Financial Officer” for any Person means the chief financial officer, treasurer
or senior financial officer of such Person, as applicable.
“First Purchaser Lien” means all accounts and inventory which are subject to a
Lien securing the obligations of a “first purchaser” of oil and gas production
as provided in Texas Bus. & Com. Code Section 9.343, or any other similar law in
any other jurisdiction, except for inventory which has been purchased by a
Borrower or any of its Subsidiaries pursuant to a Letter of Credit issued
pursuant to this Agreement.
“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which a Borrower is resident for tax purposes.
For purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.
“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.
“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
“GAAP” means United States generally accepted accounting principles applied on a
consistent basis.
“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank, or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

 

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“Governmental Proceedings” means any action or proceedings by or before any
Governmental Authority, including, without limitation, the promulgation,
enactment or entry of any Legal Requirement.
“Guarantors” means (a) the Parent and each of its Subsidiaries listed on
Schedule 1.01(b) and (b) any other Person that becomes a guarantor of all or a
portion of the Obligations.
“Guarantee” means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Debt payable by another Person (the “primary obligor”) in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt,
(ii) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Debt of the payment or performance of such Debt,
(iii) to maintain working capital, equity capital or any other financial
statement condition or liquidity or level of income or cash flow of the primary
obligor so as to enable the primary obligor to pay such Debt, or (iv) entered
into for the purpose of assuring in any other manner the owner of such Debt of
the payment or performance thereof or to protect such owner against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of such
Person securing any Debt of any other Person, whether or not such Debt is
assumed by such Person; provided, however, that the term “Guarantee” shall not
include endorsements for collection or deposit in the ordinary course of
business. The amount of any Guarantee shall be deemed to be an amount equal to
the stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. The term “Guarantee” as a
verb has a corresponding meaning.
“Hazardous Material” means (a) any petroleum products or byproducts and all
other hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, chlorofluorocarbons and all other
ozone-depleting substances and (b) any chemical, material, substance or waste
that is prohibited, limited or regulated by or pursuant to any Environmental
Law.
“Imbalances” means, for any period, the difference between the amount of natural
gas or electricity delivered by the Borrowers and their Subsidiaries to an LDC
during such period and the amount of natural gas or electricity consumed by End
Users that such LDC supplies during the same period that are subject to an
Acceptable Security Interest. For the purposes of calculating the Borrowing
Base, (a) positive Imbalances will only be included to the extent that those
Imbalances are reconciled by the applicable LDC on a monthly basis in a written
report that such LDC generates and is timely delivered to the Administrative
Agent and (b) negative Imbalances will be offset against (i) first, the maximum
amount available to be drawn under a Letter of Credit or surety bond issued for
the benefit of such LDC and (ii) second, Eligible Residual LDC Contract Rights,
Eligible Accounts and Eligible Inventory of the Borrowers and their Subsidiaries
controlled by or in the possession of a LDC.

 

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“Indemnified Taxes” means any Taxes other than Excluded Taxes.
“Initial Public Offering” means an underwritten public offering of shares of the
Parent wherein the aggregate net proceeds to the Parent are at least
$50,000,000.00.
“Intangible Assets” means assets that are considered to be intangible assets
under GAAP, including customer lists, goodwill, computer software (other than
systems software if accounted as a tangible asset under GAAP), copyrights, trade
names, trademarks, patents, franchises, licenses, unamortized deferred charges,
unamortized debt discount and capitalized research and development costs.
“Intercreditor Agreement” means the Intercreditor Agreement dated as of
December 19, 2005 among the Loan Parties, Virginia Power Energy Marketing, Inc.,
as Secured Counterparty, Sowood and the Administrative Agent, as amended.
“Interest Period” means, for each Eurodollar Advance comprising part of a
Borrowing, the period commencing on the date of such Eurodollar Advance or the
date of the Conversion of any existing Base Rate Advance into such Eurodollar
Advance and ending on the last day of the period selected by the applicable
Borrower pursuant to the provisions below and Section 2.02 and, thereafter, each
subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the
applicable Borrower pursuant to the provisions below and Section 2.02. The
duration of each such Interest Period shall be one, two, three, or six months
(or, if available to all of the Lenders, nine or 12 months), in each case as the
applicable Borrower may select; provided, however, that:
(a) Interest Periods commencing on the same date for Revolving Advances by each
Lender comprising part of the same Borrowing shall be of the same duration;
(b) whenever the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day;
(c) any Interest Period which begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month; and
(d) no Borrower may select any Interest Period for any Revolving Advance which
ends after the Maturity Date.
“Investment” of any Person means any investment of such Person so classified
under GAAP, and whether or not so classified, any loan, advance (other than
prepayments or deposits made in the ordinary course of business), extension of
credit that constitutes Debt of the Person to whom it is extended, any direct or
indirect guaranty of the obligations of such Person, or contribution of capital
by such Person; and any stocks, bonds, mutual funds, partnership interests,
notes (including structured notes), debentures or other securities owned by such
Person (but excluding capital expenditures of such Person determined in
accordance with GAAP).

 

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“Investment Grade Rating” of a Person means that such Person has a minimum
unenhanced investment grade rating on its senior unsecured debt securities of at
least BBB- as determined by S&P, and Baa3 as determined by Moody’s.
“Issuing Bank” means SG and any successor Issuing Bank pursuant to Section
2.14(h).
“LC Cash Collateral Account” means special cash collateral accounts pledged by
each Borrower to the Administrative Agent for the ratable benefit of the Secured
Parties containing cash deposited pursuant to Section 2.14(e), 7.02 or 7.03 to
be maintained at the Administrative Agent’s office in accordance with
Section 2.14(g) and be invested in the Administrative Agent’s reasonable
discretion.
“LDC” means a local distribution company that supplies natural gas or
electricity beyond the “citygate” or other specified delivery point to the End
User on behalf of a Borrower or any of its Subsidiaries and includes, without
limitation, those LDCs set forth on Schedule 1.01(c).
“Legal Requirement” means, as to any Person, any law, statute, ordinance,
decree, award, requirement, order, writ, judgment, injunction, rule, regulation
(or official interpretation of any of the foregoing) of, and the terms of any
license or permit issued by, any Governmental Authority which is binding on such
Person.
“Lenders” means the lenders listed on the signature pages of this Agreement and
any other person that has become a party hereto pursuant to an Assignment and
Acceptance (other than any such person that has ceased to be a party hereto
pursuant to an Assignment and Acceptance).
“Letter of Credit” means any letter of credit issued hereunder.
“Letter of Credit Application” means (a) a request for issuance of a Letter of
Credit in substantially the form of the attached Exhibit D and (b) an
application and agreement for the issuance or amendment of a Letter of Credit in
the form from time to time in use by the Issuing Bank.
“Letter of Credit Documents” means, with respect to any Letter of Credit, such
Letter of Credit, the related Letter of Credit Application and any agreements,
documents, and instruments entered into in connection with or relating to such
Letter of Credit.
“Letter of Credit Exposure” means, at any time, the sum of (a) the aggregate
undrawn maximum face amount of each Letter of Credit at such time and (b) the
aggregate unpaid amount of all Reimbursement Obligations owing with respect to
such Letters of Credit at such time.
“Letter of Credit Obligations” means any obligations of the Borrowers under this
Agreement in connection with the Letters of Credit, including the Reimbursement
Obligations.
“Leverage Ratio” means, as of any date of determination, the ratio of (a) Total
Funded Debt on such date, to (b) Consolidated EBITDA for the period of the
twelve months most recently ended for which financial statements are available.
For purposes of calculating the Leverage Ratio, (i) under Section 6.21, Total
Funded Debt shall be based on the month-end average for the last 12 months most
recently ended, and (ii) under Section 6.22, Total Funded Debt shall be
determined as of the end of each month.

 

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“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust,
lien (statutory or other), pledge, assignment, preference, deposit arrangement,
encumbrance, charge, security interest, priority or other security or
preferential arrangement of any kind or nature whatsoever, whether voluntary or
involuntary in or on such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
“Loan Documents” means this Agreement, any Notes issued pursuant to Section
2.02(g), the Letter of Credit Documents, the Security Documents, the Fee Letters
and each other agreement, instrument or document executed by any Loan Party or
any of their respective officers at any time in connection with this Agreement,
all as amended, restated, supplemented or modified from time to time.
“Loan Party” means any Borrower, the Parent, any Guarantor and any other Person
(other than the Administrative Agent or any Lender) that is or becomes a party
to any Loan Document.
“Majority Lenders” means, as of any date of determination, (a) before the
Revolving Commitments terminate, Lenders holding at least 51% of the then
aggregate Revolving Commitments and (b) thereafter, Lenders holding at least 51%
of the aggregate unpaid principal amount of the Revolving Advances and
participation interests in the Letter of Credit Exposure at such time.
“Material Adverse Effect” shall mean a material adverse effect upon (a) the
business, results of operations, prospects, Properties or condition (financial
or otherwise) of the Parent and its Subsidiaries taken as a whole, (b) the
ability of any Borrower or the Loan Parties taken as a whole to perform its or
their respective material obligations under the Loan Documents to which it is a
party or (c) the validity or enforceability against any Loan Party of any of the
Loan Documents or any of the material rights or remedies of the Administrative
Agent or the Lenders thereunder.
“Material Contracts” means as of any date of determination, (a) each of the
contracts listed on Schedule 1.01(e), (b) any other similar agreement that
supersedes or replaces the agreement described in clause (a) and (c) any
contract of a Borrower or its Subsidiary with a LDC that provides for more than
(i) 10,000 residential End User accounts or (ii) 1,000 commercial or industrial
End User accounts.
“Maturity Date” means July 31, 2009.
“Maximum Rate” means the maximum nonusurious interest rate under applicable law
(determined under such laws after giving effect to any items which are required
by such laws to be construed as interest in making such determination, including
without limitation if required by such laws, certain fees and other costs).

 

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“Moody’s” means Moody’s Investors Service, Inc.
“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Parent or any ERISA Affiliate makes or
is obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.
“Non-GAAP Financial Reporting” means financial reporting in accordance with GAAP
that has been adjusted to exclude (a) non-cash gains, losses or adjustments
under FASB Statement 133, (b) settled hedge amounts related to purchases of
inventory prior to the inventory being sold to the end customer, and (c) other
non-cash charges.
“Note” means a promissory note made by the Borrowers in favor of a Lender
evidencing Revolving Advances made by such Lender substantially in the form of
Exhibit E.
“Notice of Borrowing” means a notice of borrowing in the form of the attached
Exhibit F signed by a Responsible Officer of the applicable Borrower.
“Notice of Conversion or Continuation” means a notice of conversion or
continuation in the form of the attached Exhibit G signed by a Responsible
Officer of the applicable Borrower.
“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Revolving Advance, Swing Line Advance, Letter of
Credit or any Swap Contract to which a Lender or its Affiliate is a party,
whether direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party or any Affiliate thereof of any proceeding under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors naming such Person
as the debtor in such proceeding, regardless of whether such interest and fees
are allowed claims in such proceeding.
“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) Synthetic Lease Obligations, or (c) any obligation arising with
respect to any other transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the balance
sheets of such Person, other than any lease that constitutes an Operating Lease.
“Operating Lease” of a Person means any lease of Property (other than a Capital
Lease) by such Person as lessee which has an original term (including any
required renewals and any renewals effective at the option of the lessor) of one
year or more.
“Other Taxes” means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.
“Parent” means MxEnergy Holdings Inc.

 

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“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
“Permitted Liens” has the meaning set forth in Section 6.01.
“Person” means and includes natural persons, corporations, limited partnerships,
general partnerships, limited liability companies, limited liability
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Parent or any
ERISA Affiliate or to which the Parent or any ERISA Affiliate contributes or has
an obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during
the immediately preceding five plan years.
“Pledge Agreement” means the First Amended and Restated Pledge Agreement in
substantially the form of Exhibit H among one or more of the Loan Parties and
the Administrative Agent for the benefit of the Secured Parties.
“Preferred Stock Adjustment” means, beginning with the fiscal period ending
June 30, 2008:
(a) before a holder of the Parent’s preferred stock exercises its right to
request a redemption of such preferred stock, (i) the amount for such preferred
stock on the Parent’s consolidated balance sheet (A) excluding accrued dividends
on such preferred stock, shall be treated as equity for the calculation of
Consolidated Tangible Net Worth and (B) including the accrued dividends on such
preferred stock, shall not be treated as Total Funded Debt or a current
liability, and (ii) the accrued dividends on such preferred stock shall not
increase or decrease Consolidated Tangible Net Worth and
(b) after a holder of the Parent’s preferred stock exercises its right to
request a redemption of such preferred stock, the amount for such preferred
stock on the Parent’s consolidated balance sheet (i) if a current liability,
shall be treated as a current liability and as Total Funded Debt, (ii) if a
long-term liability, shall be treated as Total Funded Debt, and (iii) if not a
liability, shall be treated as equity for the calculation of Consolidated
Tangible Net Worth.
“Prime Rate” means a fluctuating rate of interest per annum as shall be in
effect from time-to-time equal to the prime rate of interest publicly announced
by the Administrative Agent from time to time as its prime rate in effect at its
principal office in New York City, whether or not either Borrower has notice
thereof, when and as said prime rate changes.
“Projections” means the Parent’s forecasted consolidated annual with monthly
breakdowns: (a) balance sheets; (b) profit and loss statements; (c) cash flow
statements; and (d) capitalization statements, in each case for fiscal years
2008, 2009 and 2010, together with supporting details.

 

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“Property” of any Person means any interest of such Person in any property or
asset (whether real, personal or mixed, tangible or intangible).
“Pro Rata Share” means, with respect to each Lender at any time, (a) before the
Revolving Commitments terminate, the ratio (expressed as a percentage) of such
Lender’s Revolving Commitment to the aggregate Revolving Commitments of all the
Lenders at such time and (b) thereafter, the ratio (expressed as a percentage)
of such Lender’s aggregate outstanding Revolving Advances at such time to the
aggregate outstanding Revolving Advances of all the Lenders at such time. The
initial Pro Rata Share of each Lender is set forth opposite the name of such
Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which
such Lender becomes a party hereto, as applicable.
“Qualifying Supplier Letter of Credit” means a Letter of Credit supporting the
physical purchase of gas or electricity by a Borrower in substantially the form
of the attached Exhibit J or other form acceptable to the Administrative Agent.
“Regulations T, U, X and D” means Regulations T, U, X, and D of the Federal
Reserve Board, as the same is from time-to-time in effect, and all official
rulings and interpretations thereunder or thereof.
“Reimbursement Obligations” means all of the obligations of the Borrowers to
reimburse the Issuing Bank for amounts paid by the Issuing Bank under Letters of
Credit as established by the Letter of Credit Applications and Section 2.14(c).
“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.
“Release” means any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into or
through the environment or within or upon any building, structure, facility or
fixture.
“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA.
“Responsible Officer” for any Person means, the Chief Executive Officer,
President, Chief Financial Officer, any Executive or Senior Vice President, Vice
President, Treasurer or any other member of senior management of such Person.
“Restricted Payment” means: (a) the declaration or making by the Parent or any
Subsidiary of any dividend or other distribution (whether in cash, securities or
other property) with respect to any Equity Interest of such Person; (b) any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any Equity Interests in the Parent
or any Subsidiary or any option, warrant or other right to acquire any such
Equity Interests in the Parent or any Subsidiary; (c) any payment of principal
of, premium, if any, or interest on, any Subordinated Indebtedness; and (d) any
management fee, consulting fee, advisory fee, investment banking or transaction
fee or commission, bonus, salary, or similar remuneration paid or payable, or
any loans, advances or similar investments made, to any Affiliate of the Parent
or any payment to any such Affiliate with respect to any allocation of overhead
costs and expenses, excluding salaries, bonuses and commissions payable to
officers, directors and employees and directors’ fees and executive compensation
and benefits, in each case, payable in the ordinary course of business
consistent with past practice.

 

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“Revolving Advance” means a loan by a Lender to a Borrower as part of a
Borrowing and refers to a Base Rate Advance or a Eurodollar Advance.
“Revolving Commitment” means, as to each Lender, its obligation to (a) make
Revolving Advances to the Borrowers pursuant to Section 2.01, (b) purchase
participation in L/C Obligations pursuant to Section 2.14(b) and (c) purchase
participations in Swing Line Advances pursuant to Section 2.01(b), in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement. The initial aggregate amount of the Revolving Commitments on the
Closing Date is $255,000,000.00.
“Risk Management Policy” has the meaning set forth in Section 3.01(a)(xiii) and
includes any amendment thereto approved by the Administrative Agent in its sole
discretion.
“S&P” means Standard & Poor’s Rating Agency Group, a division of Mc-Graw Hill
Companies, Inc., or any successor that is a national credit rating organization.
“SEC” means the Securities and Exchange Commission, and any successor entity.
“Secured Counterparty” has the meaning set forth in the Intercreditor Agreement.
“Secured Counterparty Contracts” means any gas supply contract or hedging
arrangements with a Secured Counterparty.
“Secured Counterparty Event” means:
(a) in the case of a Secured Counterparty for which any Borrower has received a
guaranty from a Secured Counterparty Parent that has an Investment Grade Rating,
the failure of such Secured Counterparty to be a Wholly-Owned Subsidiary of the
Secured Counterparty Parent;
(b) (i) for any Secured Counterparty that has provided a guaranty of its Secured
Counterparty Parent to a Borrower, such Borrower fails to maintain the guaranty
of such Secured Counterparty Parent or (ii) a Secured Counterparty that has not
delivered a guaranty of its Secured Counterparty Parent or a Secured
Counterparty Parent that has delivered a guaranty for such Secured Counterparty
to a Borrower fails to have an Investment Grade Rating;
(c) the mark-to-market exposure of a Secured Counterparty to a Borrower for
which such Borrower has received a guaranty from a Secured Counterparty Parent
exceeds the amount of such guaranty; or
(d) an event of default or termination event, however described or defined, with
respect to a Secured Counterparty shall occur under a Secured Counterparty
Contract.

 

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“Secured Counterparty Parent” means a Person that is the sole direct or indirect
owner of the Equity Interests of a Secured Counterparty.
“Secured Parties” means the Administrative Agent, the Lenders, the Issuing Bank,
the Swing Line Lender, the Swap Counterparties and the beneficiaries of each
indemnification obligation undertaken by any Loan Party under any Loan Document.
“Security Agreement” means the First Amended and Restated Security Agreement in
substantially the form of Exhibit I among one or more of the Loan Parties and
the Administrative Agent for the benefit of the Secured Parties, and each other
document, instrument or agreement executed by any Loan Party in connection
therewith in order to comply with the Legal Requirements of any jurisdiction
other than the United States of America or any state thereof.
“Security Documents” means the Security Agreement, the Pledge Agreement and each
other document, instrument or agreement executed in connection therewith or
otherwise executed in order to secure all or a portion of the Obligations.
“Senior Notes” means the Parent’s Floating Rate Senior Notes due 2011 issued
under the Indenture dated as of August 4, 2006 among the Parent, the guarantors
party thereto, and Law Debenture Trust Company of New York, as Trustee.
“SG” means Société Générale.
“Shareholders’ Equity” means, as of any date of determination, consolidated
shareholders equity of the Parent and its Subsidiaries as of that date
determined in accordance with GAAP.
“Sowood” means Denham Commodity Partners Fund LP, a Delaware limited partnership
formerly known as Sowood Commodity Partners Fund LP.
“Sowood Document” has the meaning set forth in the Intercreditor Agreement.
“Subordinated Indebtedness” means any Debt of the Parent or any of its
Subsidiaries (including the Borrowers) that is contractually subordinated to the
Obligations on terms and in form and substance reasonably acceptable to the
Administrative Agent.
“Subsidiary” of a Person means any corporation, association, partnership or
other business entity of which more than 50% of the outstanding Equity Interests
having by the terms thereof ordinary voting power under ordinary circumstances
to elect a majority of the board of directors or Persons performing similar
functions (or, if there are no such directors or Persons, having general voting
power) of such entity (irrespective of whether at the time Equity Interests of
any other class or classes of such entity shall or might have voting power upon
the occurrence of any contingency) is at the time directly or indirectly owned
or controlled by such Person, by such Person and one or more Subsidiaries of
such Person or by one or more Subsidiaries of such Person. Unless otherwise
indicated herein, each reference to the term “Subsidiary” shall mean a
Subsidiary of the Parent.

 

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“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, commodity futures contracts,
equity or equity index swaps or options, bond or bond price or bond index swaps
or options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether or
not any such transaction is governed by or subject to any master agreement, and
(b) any and all transactions of any kind, and the related confirmations, which
are subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association,
Inc., any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a
“Master Agreement”), including any such obligations or liabilities under any
Master Agreement.
“Swap Counterparty” means any Lender or any Affiliate thereof that is party to a
Swap Contract with a Borrower or one of its Subsidiaries.
“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
“Swing Line” means the revolving credit facility made available by the Swing
Line Lender pursuant to Section 2.01(b).
“Swing Line Lender” means SG in its capacity as provider of Swing Line Advances,
or if SG shall resign as Swing Line Lender, another Lender selected by the
Administrative Agent and reasonably acceptable to the Borrowers.
“Swing Line Advance” has the meaning specified in Section 2.01(b)(i).
“Swing Line Sublimit” means $25,000,000.00. The Swing Line Sublimit is part of,
and not in addition to, the Revolving Commitments.
“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of Property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

 

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“Tier I Account Party” means an account debtor (a) that has an Investment Grade
Rating, (b) whose obligations with respect to Eligible Accounts owing to a
Borrower is guaranteed by a Person with an Investment Grade Rating or supported
with Acceptable Credit Support, or (c) that is guaranteed by an LDC or is an
LDC, in each case otherwise approved by the Administrative Agent in its
reasonable credit discretion.
“Tier I Eligible Account” means an Eligible Account due from a Tier I Account
Party.
“Tier I Unbilled Eligible Account” means an Eligible Account due from a Tier I
Account Party, the invoice for which has not yet been issued by or on behalf of
the applicable Borrower or one of its Subsidiaries.
“Tier II Account Party” means any account debtor that is not a Tier I Account
Party.
“Tier II Eligible Account” means an Eligible Account due from a Tier II Account
Party and, if the aggregate amount of all such Eligible Accounts from such Tier
II Account Party are greater than $500,000.00, then the Majority Lenders shall
have approved in their reasonable credit discretion any amount in excess of
$500,000.00.
“Tier II Unbilled Eligible Account” means an Eligible Account due from a Tier II
Account Party, the invoice for which has not yet been issued by or on behalf of
the applicable Borrower or one of its Subsidiaries.
“Total Funded Debt” means, as of any date of determination, for the Parent and
its Subsidiaries on a consolidated basis, the sum of (a) the outstanding
principal amount of all obligations, whether current or long-term, for borrowed
money (including (i) Obligations hereunder, (ii) obligations under the Senior
Notes and (iii) obligations under the Sowood Documents outstanding on the last
Business Day of the month) and all obligations evidenced by bonds, debentures,
notes, loan agreements or other similar instruments, (b) all purchase money
Debt, (c) all direct obligations arising under bankers’ acceptances, bank
guaranties, surety bonds and similar instruments, (d) all obligations in respect
of the deferred purchase price of property or services (other than trade
accounts payable in the ordinary course of business), (e) Attributable
Indebtedness in respect of Capital Leases, (f) without duplication, all
Guarantees (but only to the extent required to be recorded as a liability on the
consolidated financial statements of the Borrower pursuant to GAAP) with respect
to outstanding Debt of the types specified in clauses (a) through (e) above of
Persons other than the Parent or any Subsidiary, (g) any applicable Preferred
Stock Adjustment, and (h) all Debt of the types referred to in clauses
(a) through (f) above of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company) in which the
Parent or a Subsidiary is a general partner or joint venturer, unless such Debt
is expressly made non-recourse to the Parent or such Subsidiary.
“Type” has the meaning set forth in Section 1.04.
“UCC” means the Uniform Commercial Code as in effect on the date hereof in the
State of New York, as amended from time to time, and any successor statute.

 

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“Undelivered Product Value” means an amount equal to the undrawn face amount of
all Qualifying Supplier Letters of Credit for which the gas or electricity has
not yet been physically delivered to a Borrower, and which, in the case of
natural gas, will become Eligible Inventory upon delivery to a Borrower or will
result in an Eligible Account Receivable or Eligible Exchange Receivable upon
delivery to a Person other than a Borrower. Values included in this category,
Undelivered Product Value, cannot simultaneously be included in other Borrowing
Base categories.
“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
“U.S. Withholding Taxes” means any Taxes imposed by way of deduction or
withholding by the United States federal government.
“Voting Stock” means, with respect to any Person, Equity Interests of such
Person of any class or classes, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of members of the
Board of Directors (or Persons performing similar functions) of such Person.
“Wholly-Owned Subsidiary” of any Person shall mean a subsidiary of such Person
of which Equity Interests representing 100% of the Equity Interests are, at the
time any determination is being made, owned, controlled or held by such Person
or one or more Wholly-Owned Subsidiaries of such Person or by such Person and
one or more Wholly-Owned Subsidiaries of such Person.
Section 1.02 Computation of Time Periods. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
“from” means “from and including” and the words “to” and “until” each means “to
but excluding”.
Section 1.03 Accounting Terms.
(a) For purposes of this Agreement, all accounting terms not otherwise defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Annual Financial Statements.
(b) If at any time any Accounting Change (as defined below) would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrowers or the Majority Lenders shall so request, the
Administrative Agent, the Lenders and the Borrowers shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the Majority
Lenders); provided that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and
(ii) the Borrowers shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP. “Accounting Changes” means: (A) changes in accounting
principles required by GAAP and implemented by the Parent; (B) changes in
accounting principles recommended by the Parent’s accountants; and (C) changes
in carrying value of the Parent’s or any of its Subsidiaries’ assets,
liabilities or equity accounts resulting from any adjustments that, in each
case, were applicable to, but not included in, the Audited Financial Statements.

 

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(c) In addition, all calculations and defined accounting terms used herein
shall, unless expressly provided otherwise, when referring to any Person, refer
to such Person on a consolidated basis and mean such Person and its consolidated
subsidiaries.
Section 1.04 Types of Advances. Revolving Advances are distinguished by “Type”.
The “Type” of a Revolving Advance refers to the determination whether such
Revolving Advance is a Eurodollar Advance or a Base Rate Advance, each of which
constitutes a Type.
Section 1.05 Miscellaneous. The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include,” “includes” and “including” shall be deemed to
be followed by the phrase “without limitation.” The word “will” shall be
construed to have the same meaning and effect as the word “shall.” Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to
any law or regulation herein shall, unless otherwise specified, refer to such
law or regulation as amended, modified or supplemented from time to time and
(f) the words “asset” and “property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.

 

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ARTICLE II
THE ADVANCES
Section 2.01 The Advances.
(a) Revolving Advances. Each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Revolving Advances to the
Borrowers from time-to-time on any Business Day before the Maturity Date in an
aggregate amount up to but not to exceed at any time outstanding (i) the lesser
of (A) its Revolving Commitment and (B) its Pro Rata Share of the Borrowing Base
minus (ii) such Lender’s Pro Rata Share of the Letter of Credit Exposure and the
outstanding Swing Line Advances; provided however that the aggregate outstanding
principal amount of the sum of (x) all Revolving Advances plus (y) the Letter of
Credit Exposure plus (z) the Swing Line Advances shall not at any time exceed
the lesser of (1) aggregate amount of the Revolving Commitments and (2) the
Borrowing Base. Each Revolving Borrowing shall be in an aggregate amount not
less than $2,000,000.00 and in integral multiples of $1,000,000.00 in excess
thereof and shall consist of Revolving Advances of the same Type made on the
same day by the Lenders ratably according to their respective Revolving
Commitments. Within the limits of each Lender’s Revolving Commitment, each
Borrower may from time-to-time borrow, prepay pursuant to Section 2.07(b) and
reborrow under this Section 2.01(a).
(b) Swing Line Advances.
(i) On the terms and conditions set forth in this Agreement, the Swing Line
Lender agrees to, from time-to-time on any Business Day before the Maturity
Date, make advances (“Swing Line Advances”) in Dollars to the Borrowers for
periods of up to seven Business Days (but may be rolled over for an additional
seven Business Day period upon the due date of the Swing Line Advance, except
that no Swing Line Advance may mature after the Maturity Date), bearing interest
at either the Prime Rate plus the Applicable Margin or the Federal Funds
Effective Rate plus the Applicable Margin, as such Borrower elects, in an amount
not less than $1,000,000.00 (or if less, in the aggregate amount of the
remaining unused portion of the aggregate Revolving Commitments) and in integral
multiples of $500,000.00 in excess thereof and in an aggregate principal amount
not to exceed the Swing Line Sublimit outstanding at any time; provided that the
sum of (A) the aggregate principal amount of outstanding Revolving Advances plus
(B) the aggregate principal amount of outstanding Swing Line Advances plus
(C) the Letter of Credit Exposure shall never exceed the lesser of (1) the
aggregate Revolving Commitments at such time and (2) the Borrowing Base; and
provided further than no Swing Line Advance shall be made by the Swing Line
Lender if the statements set forth in Section 3.02 are not true in all material
respects on the date of such Swing Line Advance, it being agreed by the
Borrowers that the giving of the applicable Notice of Borrowing and the
acceptance by the applicable Borrower of the proceeds of such Swing Line Advance
shall constitute a representation and warranty by such Borrower that on the date
of such Swing Line Advance such statements are true in all material respects.
Subject to the other provisions hereof, each Borrower may from time-to-time
borrow, prepay (in whole or in part) and reborrow Swing Line Advances.

 

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(ii) Each request for a Swing Line Advance shall be made pursuant to telephone
notice to the Swing Line Lender given no later than 2:00 p.m. (New York time) on
the date of the proposed Swing Line Advance, promptly confirmed by a completed
and executed Notice of Borrowing telecopied to the Administrative Agent. The
Swing Line Lender will promptly make the Swing Line Advance available to the
applicable Borrower at the Administrative Agent’s Account, if any, or such other
account as such Borrower shall direct.
(iii) The Borrowers and the Lenders agree that in the event any Swing Line
Advance is not repaid on the date due to the Swing Line Lender, the Swing Line
Lender shall give notice to the Administrative Agent to request each Lender,
including the Swing Line Lender, to make a Revolving Advance in an amount equal
to such Lender’s Pro Rata Share of the outstanding principal balance of such
Swing Line Advance outstanding on the date such notice is given and such Advance
shall be deemed to be a Base Rate Advance made pursuant to such Lender’s
Revolving Commitment, whether made before or after termination of the Revolving
Commitments, acceleration of the Revolving Advances, or otherwise, and whether
or not the conditions precedent in Section 3.02 have been satisfied at the time
of such Borrowing. The Administrative Agent shall give each Lender notice of
such Borrowing by 11:00 a.m. (New York time) on the date such Borrowing is to be
made. Each Lender shall, regardless of whether the conditions in Section 3.02
have been met at the time of such Borrowing and regardless of whether there
exists any Default or Event of Default, make its Revolving Advance available to
the Administrative Agent for the account of the Swing Line Lender in immediately
available funds by 1:00 p.m. (New York time) on the date requested, and each
Borrower hereby irrevocably instructs the Swing Line Lender to apply the
proceeds of such Borrowing to the payment of the outstanding Swing Line
Advances.
(iv) At any time before or after a Default or an Event of Default has occurred
and is continuing, if the Revolving Commitments have expired or been terminated
while any Swing Line Advance is outstanding, each Lender, at the sole option of
the Swing Line Lender, shall be deemed, without further action by any Person, to
have purchased from the Swing Line Lender a participation in such Swing Line
Advance, in either case in an amount equal to such Lender’s Pro Rata Share of
the outstanding principal balance of such Swing Line Advances. The
Administrative Agent shall notify each such Lender of the amount of such
participation, and such Lender will transfer to the Administrative Agent for the
account of the Swing Line Lender on the next Business Day following such notice,
in immediately available funds, the amount of such participation.
(v) If any such Lender shall not have so made its Revolving Advance or its
percentage participation available to the Administrative Agent pursuant to this
Section 2.01(b), such Lender agrees to pay interest thereon for each day from
such date until the date such amount is paid at the Federal Funds Effective Rate
for such day for the first three days and thereafter the interest rate
applicable to Base Rate Advances. Whenever, at any time after the Administrative
Agent has received from any Lender such Lender’s Revolving Advance or
participating interest in a Swing Line Advance, the Administrative Agent
receives any payment on account thereof, the Administrative Agent will pay to
such Lender its

 

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\

participating interest in such amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s
Revolving Advance or participating interest was outstanding and funded), which
payment shall be subject to repayment by such Lender if such payment received by
the Administrative Agent is required to be returned. Each Lender’s obligation to
make Revolving Advances or purchase such participating interests pursuant to
this Section 2.01(b) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender or any other
Person may have against the Swing Line Lender, the Administrative Agent or any
other Person for any reason whatsoever; (B) the occurrence or continuance of a
Default or an Event of Default or the termination of the Revolving Commitments;
(C) the occurrence of any Material Adverse Effect; (D) any breach of this
Agreement by any Loan Party or any other Lender; or (E) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
Each Swing Line Advance, once so participated by any Lender, shall cease to be a
Swing Line Advance with respect to that amount for purposes of this Agreement,
but shall continue to be a Revolving Advance.
(vi) The Swing Line Lender may resign at any time by giving 60 days’ prior
written notice to the Administrative Agent, the Lenders and the Borrowers. Upon
the acceptance of any appointment as the Swing Line Lender hereunder by a Lender
that shall agree to serve as successor Swing Line Lender, such successor shall
succeed to and become vested with all the interests, rights and obligations of
the retiring Swing Line Lender and the retiring Swing Line Lender shall be
discharged from its obligations to make additional Swing Line Advances
hereunder. At the time such resignation or removal shall become effective,
unless assumed by the replacement Swing Line Lender, the Borrowers shall pay all
outstanding Swing Line Advances, together with accrued and unpaid interest
thereon. The acceptance of any appointment as the Swing Line Lender hereunder by
a successor Lender shall be evidenced by an agreement entered into by such
successor, in a form satisfactory to the retiring Swing Line Lender and the
Administrative Agent, and, from and after the effective date of such agreement,
(i) such successor Lender shall have all the rights and obligations of the
previous Swing Line Lender under this Agreement and the other Loan Documents and
(ii) references herein and in the other Loan Documents to the term “Swing Line
Lender” shall be deemed to refer to such successor or to any previous Swing Line
Lender, as the context shall require.
(c) Increase in Revolving Commitments.
(i) Request for Increase. Provided there exists no Default, upon notice to the
Administrative Agent (which shall promptly notify the Lenders), the Borrowers
may from time to time, seek and obtain increases in the aggregate Revolving
Commitments from one or more Eligible Assignees by an amount (for all such
requests) not exceeding $25,000,000.00; provided that any such request for an
increase shall be in a minimum amount of $1,000,000.00. With respect to each
such proposed increase in the Revolving Commitments, the existing Lenders shall
have the option to assign (based on their respective Pro Rata Share) their
Revolving Commitments to the Eligible Assignee willing to provide such new
Revolving Commitment; provided that the aggregate amount of such assignments
shall not be greater than 50% of the aggregate Revolving Commitments that such
Eligible Assignee was willing to assume. Any such assignment will be made in
accordance with paragraph (d) of this Section 2.01.

 

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(ii) Lender Elections to Increase. For each increase, the Borrowers shall select
an Eligible Assignee to become a Lender pursuant to a joinder agreement in form
and substance reasonably satisfactory to the Administrative Agent.
(iii) Effective Date and Allocations. If the aggregate Revolving Commitments are
increased in accordance with this Section, the Administrative Agent and the
Borrowers shall determine the effective date (the “Increase Effective Date”) and
the final allocation of such increase. The Administrative Agent shall promptly
notify the Borrowers and the Lenders of the final allocation of such increase
and the Increase Effective Date.
(iv) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, the Borrowers shall deliver to the Administrative Agent a certificate
of each Borrower and each Guarantor dated as of the Increase Effective Date
signed by a Responsible Officer of such Person (A) certifying and attaching the
resolutions adopted by such Person approving or consenting to such increase, and
(B) in the case of each Borrower, certifying that, before and after giving
effect to such increase, (1) the representations and warranties contained in
Article IV and the other Loan Documents are true and correct in all material
respects on and as of the Increase Effective Date, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they are true and correct in all material respects as of such earlier
date, and except that for purposes of this Section 2.01(c), the representations
and warranties contained in Section 4.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 5.06, and (2) no Default exists. The Borrowers shall prepay any
Revolving Advances outstanding on the Increase Effective Date (and pay any
additional amounts required pursuant to Section 2.08) to the extent necessary to
keep the outstanding Revolving Advances ratable with any revised Pro Rata Shares
arising from any nonratable increase in the Revolving Commitments under this
Section.
(v) Conflicting Provisions. This Section shall supersede any provisions in
Sections 2.12 or 10.01 to the contrary.
(d) New Lenders Revolving Commitments through Assignment. The Administrative
Agent shall give the Lenders notice of any Eligible Assignee that has notified
the Administrative Agent that it wishes to obtain a Revolving Commitment. The
Lenders agree that, if an Eligible Assignee desires to obtain a Revolving
Commitment, each Lender shall have the right to assign to such Eligible Assignee
a percentage of its Revolving Commitment equal to (i) the amount of the
Revolving Commitment such Eligible Assignee obtains through assignment divided
by (ii) the aggregate amount of Revolving Commitments of the Lenders agreeing to
assign to such Eligible Assignee. No Lender shall be obligated to assign any
portion of its Revolving Commitment to the Eligible Assignee, but every Lender
shall have the right to so assign its Revolving Commitment as set forth in the
preceding sentence. All assignments to Eligible Assignees (i) shall be made in
accordance with Section 10.06 of this Agreement and (ii) shall be ratable among
the assigning Lenders as set forth in this paragraph (d).

 

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Section 2.02 Method of Borrowing.
(a) Notice. Each Borrowing shall be made pursuant to a Notice of Borrowing,
given not later than (i) if the Borrowing is comprised of Eurodollar Advances,
11:00 a.m. (New York time) on the third Business Day before the requested
Borrowing Date and (ii) if the Borrowing is comprised of Base Rate Advances,
11:00 a.m. (New York time) at least one Business Day in advance of the requested
Borrowing Date, in each case to the Administrative Agent’s Applicable Lending
Office. The Administrative Agent shall give to each Lender prompt notice on the
day of receipt of a timely Notice of Borrowing. The Notice of Borrowing shall be
in writing specifying (A) the Borrowing Date (which shall be a Business Day),
(B) the requested Type of Revolving Advances comprising such Borrowing, (C) the
aggregate amount of such Borrowing, and (D) if such Borrowing is to be comprised
of Eurodollar Advances, the requested Interest Period. In the case of a
requested Borrowing comprised of Eurodollar Advances, the Administrative Agent
shall promptly notify each Lender of the applicable interest rate under
Section 2.06(a)(ii). Each Lender shall make available its Pro Rata Share of such
Borrowing before 12:00 p.m. (New York time) on the Borrowing Date in immediately
available funds to the Administrative Agent at its Applicable Lending Office or
such other location as the Administrative Agent may specify by notice to the
Lenders. After the Administrative Agent’s receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will promptly make such funds available to the applicable
Borrower not later than 2:00 p.m. (New York time) at such account as such
Borrower shall specify in writing to the Administrative Agent.
(b) Conversions and Continuations. In order to elect to Convert or Continue a
Revolving Advance under this Section, a Borrower shall deliver an irrevocable
Notice of Conversion or Continuation to the Administrative Agent at its
Applicable Lending Office no later than (i) 11:00 a.m. (New York time) at least
one Business Day in advance of such requested Conversion date in the case of a
Conversion of a Eurodollar Advance to a Base Rate Advance or (ii) 11:00 a.m.
(New York time) at least three Business Days in advance of such requested
Conversion date in the case of a Conversion into or Continuation of a Eurodollar
Advance to another Eurodollar Advance. Each such Notice of Conversion or
Continuation shall be in writing or by telex, telecopier or telephone, confirmed
promptly in writing specifying (A) the requested Conversion or Continuation date
(which shall be a Business Day), (B) the amount, Type of the Revolving Advance
to be Converted or Continued, (C) whether a Conversion or Continuation is
requested, and if a Conversion, into what Type of Revolving Advance, and (D) in
the case of a Conversion to, or a Continuation of, a Eurodollar Advance, the
requested Interest Period. Promptly after receipt of a Notice of Conversion or
Continuation under this paragraph, the Administrative Agent shall provide each
Lender with a copy thereof and, in the case of a Conversion to or a Continuation
of a Eurodollar Advance, notify each Lender of the interest rate under
Sections 2.06(a)(ii). Conversions of Eurodollar Advances and Base Rate Advances
may be made at any time, subject to the obligation of the Borrowers to pay any
amounts required under Section 2.08. The portion of Revolving Advances
comprising part of the same Borrowing that are converted to Revolving Advances
of another Type shall constitute a new Borrowing. Swing Line Advances may not be
Converted into Eurodollar Advances.

 

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(c) Certain Limitations. Notwithstanding anything in paragraphs (a) and
(b) above:
(i) at no time shall there be more than eight Interest Periods applicable to
outstanding Eurodollar Advances;
(ii) if any Lender shall, at least one Business Day before the date of any
requested Borrowing, notify the Administrative Agent that any Change in Law
makes it unlawful for such Lender or any of its Applicable Lending Offices to
perform its obligations under this Agreement to make Eurodollar Advances, or to
fund or maintain Eurodollar Advances, the right of the Borrowers to select
Eurodollar Advances from such Lender for such Borrowing or for any subsequent
Borrowing shall be suspended until such Lender shall notify the Administrative
Agent that the circumstances causing such suspension no longer exist, and such
Lender’s Revolving Advance for such Borrowing shall be a Base Rate Advance;
(iii) if the Administrative Agent has determined (which determination shall be
conclusive and binding upon the Borrowers) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for any requested Borrowing and the
Administrative Agent gives telephonic or telecopy notice thereof to the
Borrowers as soon as practicable, the right of the Borrowers to select
Eurodollar Advances for such Borrowing or for any subsequent Borrowing and the
obligation of the Lenders to make such Eurodollar Advances shall be suspended
until the Administrative Agent shall notify the Borrowers and the Lenders that
the circumstances causing such suspension no longer exist, and each Revolving
Advance comprising such Borrowing shall be a Base Rate Advance;
(iv) if the Majority Lenders shall, by 11:00 a.m. (New York time) at least one
Business Day before the date of any requested Borrowing, notify the
Administrative Agent that the Eurodollar Rate will not adequately reflect the
cost to such Lenders of making or funding or maintaining their respective
Eurodollar Advances and the Administrative Agent gives telephonic or telecopy
notice thereof to the Borrowers as soon as practicable, the right of the
Borrowers to select Eurodollar Advances for such Borrowing or for any subsequent
Borrowing and the obligation of the Lenders to make Eurodollar Advances shall be
suspended until the Administrative Agent shall notify the Borrowers and the
Lenders that the circumstances causing such suspension no longer exist, and each
Revolving Advance comprising such Borrowing shall be a Base Rate Advance;
(v) if either Borrower shall fail to select the duration or Continuation of any
Interest Period for any Eurodollar Advances in accordance with the provisions
contained in the definition of “Interest Period” in Section 1.01 and paragraphs
(a) and (b) above or shall fail to deliver a Notice of Conversion or
Continuation, the Administrative Agent will forthwith so notify the Borrowers
and the Lenders and such Revolving Advances will be made available to such
Borrower on the date of such Borrowing as Base Rate Advances or, if an existing
Revolving Advance, Convert into Base Rate Advances; and

 

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(vi) no Revolving Advance may be Converted or Continued as a Eurodollar Advance
at any time when a Default or an Event of Default has occurred and is
continuing.
(d) Notices Irrevocable. Each Notice of Borrowing and each Notice of Conversion
or Continuation delivered by a Borrower shall be irrevocable and binding on such
Borrower. In the case of the initial Borrowing or any Borrowing which the
related Notice of Conversion or Continuation specifies is to be comprised of
Eurodollar Advances, the Borrowers shall indemnify each Lender against any loss,
out-of-pocket cost or expense actually incurred by such Lender as a result of
any failure to fulfill on or before the Borrowing Date or the date specified in
such Notice of Conversion or Continuation for such Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss,
cost or expense actually incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund the Revolving Advance
to be made by such Lender as part of such Borrowing when such Revolving Advance,
as a result of such failure, is not made on such date.
(e) Administrative Agent Reliance. Unless the Administrative Agent shall have
received notice from a Lender before the Borrowing Date that such Lender will
not make available to the Administrative Agent such Lender’s Pro Rata Share of
the Borrowing, the Administrative Agent may assume that such Lender has made its
Pro Rata Share of such Borrowing available to the Administrative Agent on the
Borrowing Date in accordance with paragraph (a) of this Section 2.02 and the
Administrative Agent may, in reliance upon such assumption, make available to
the applicable Borrower on the Borrowing Date a corresponding amount. If and to
the extent that such Lender shall not have so made its Pro Rata Share of such
Borrowing available to the Administrative Agent, such Lender and the applicable
Borrower severally agree to immediately repay to the Administrative Agent on
demand such corresponding amount, together with interest on such amount, for
each day from the date such amount is made available to such Borrower until the
date such amount is repaid to the Administrative Agent, at (i) in the case of
such Borrower, the interest rate applicable on such day to Base Rate Advances
and (ii) in the case of such Lender, the greater of the Federal Funds Effective
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation. If such Lender shall repay to
the Administrative Agent such corresponding amount and interest as provided
above, such corresponding amount so repaid shall constitute such Lender’s
Revolving Advance as part of such Borrowing for purposes of this Agreement even
though not made on the same day as the other Revolving Advances comprising such
Borrowing. If such Lender’s Revolving Advance as part of such Borrowing is not
made available by such Lender within three Business Days of the Borrowing Date,
the applicable Borrower shall repay such Lender’s share of such Borrowing
(together with interest thereon at the interest rate applicable during such
period to Base Rate Advances) to the Administrative Agent not later than three
Business Days after receipt of written notice from the Administrative Agent
specifying such Lender’s share of such Borrowing that was not made available to
the Administrative Agent.
(f) Lender Obligations Several. The failure of any Lender to make a Revolving
Advance to be made by it as part of any Borrowing shall not relieve any other
Lender of its obligation, if any, to make its Revolving Advance on the
applicable Borrowing Date. No Lender shall be responsible for the failure of any
other Lender to make a Revolving Advance to be made by such other Lender on any
applicable Borrowing Date.

 

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(g) Noteless Agreement; Evidence of Indebtedness.
(i) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of each Borrower to such Lender
resulting from the Revolving Advances made by such Lender from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(ii) The Administrative Agent shall also maintain accounts in which it will
record (A) the amount of each Revolving Advance made hereunder, the Type thereof
and the Interest Period with respect thereto, (B) the amount of any principal or
interest due and payable or to become due and payable from each Borrower to each
Lender hereunder and (C) the amount of any sum received by the Administrative
Agent hereunder from each Borrower and each Lender’s share thereof.
(iii) The entries maintained in the accounts maintained pursuant to paragraphs
(i) and (ii) above shall be prima facie evidence of the existence and amounts of
the Obligations therein recorded; provided, however, that the failure of the
Administrative Agent or any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrowers to repay
the Obligations in accordance with their terms.
(iv) Any Lender may request that the Revolving Advances owing to such Lender be
evidenced by a Note. In such event, each Borrower shall execute and deliver to
such Lender a Note payable to the order of such Lender and its registered
assigns. Thereafter, the Revolving Advances evidenced by such Note and interest
thereon shall at all times (including after any assignment pursuant to
Section 10.06) be represented by one or more Notes payable to the order of the
payee named therein or any assignee pursuant to Section 10.06, except to the
extent that any such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Revolving Advances once again be evidenced
as described in paragraphs (i) and (ii) above.
Section 2.03 Fees.
(a) Revolving Commitment Fees.
(i) Each Borrower agrees to pay to the Administrative Agent for the account of
each Lender a commitment fee (a “Commitment Fee”) on the average daily amount by
which such Lender’s Revolving Commitment exceeds the sum of (i) the aggregate
principal amount of such Lender’s outstanding Revolving Advances and (ii) such
Lender’s Pro Rata Share of the Letter of Credit Exposure, from the Closing Date
until the Maturity Date at the Applicable Margin for Commitment Fees. Swing Line
Loans shall not count as usage of any Lender’s Revolving Commitment for the
purpose of calculating the Commitment Fees due hereunder. The Commitment Fees
payable pursuant to this clause (a) are payable in arrears on the first Business
Day of each month commencing October 1, 2008 and on the Maturity Date.

 

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(ii) The Borrowers agree to pay to the Administrative Agent, for the account of
each Lender that is a Lender on the Closing Date, on the second Business Day of
each month commencing in January 2009, a fee equal to 0.05% of such Lenders
Revolving Commitment on the first Business Day of each such month.
(b) Agent’s Fees. The Borrowers, jointly and severally, agree to pay to the
Administrative Agent and the Arranger the fees as separately agreed upon by the
Borrowers in such Fee Letter.
(c) Letter of Credit Fees.
(i) The Borrowers, jointly and severally, agree to pay to the Administrative
Agent for the pro rata benefit of each Lender with respect to each Letter of
Credit a letter of credit fee at a per annum rate equal to the greater of
(A) the Applicable Margin for Letters of Credit in effect from time to time or
(B) $700. Each such fee shall be based on the maximum amount available to be
drawn under such Letter of Credit from the date of issuance of the Letter of
Credit until its expiration date and shall be payable in arrears on the first
Business Day of each month until the earlier of its expiration date or the
Maturity Date. All such fees shall be computed on the basis of the actual number
of days elapsed in a year of 360 days.
(ii) The Borrowers, jointly and severally, agree to pay to the Issuing Bank, a
fronting fee for each Letter of Credit equal to 0.125% per annum of the initial
stated amount of such Letter of Credit (or, with respect to any subsequent
increase to the stated amount of any such Letter of Credit, such increase in the
stated amount). Each such fee shall be based on the maximum amount available to
be drawn under such Letter of Credit from the date of issuance of the Letter of
Credit until its expiration date and shall be payable in arrears on the first
Business Day of each month until the earlier of its expiration date or the
Maturity Date. All such fees shall be computed on the basis of the actual number
of days elapsed in a year of 360 days.
(iii) In addition, the Borrowers, jointly and severally, agree to pay to the
Issuing Bank all customary transaction costs and fees charged by the Issuing
Bank in connection with the issuance of a Letter of Credit for such Borrower’s
account, such costs and fees to be due and payable on the date specified by the
Issuing Bank in the invoice for such costs and fees.
(d) Generally. All such fees shall be paid on the dates due, in immediately
available Dollars to the Administrative Agent for distribution, if and as
appropriate, among the Lenders, except that the fees payable pursuant to
Section 2.03(c)(ii) and (iii) shall be paid directly to the Issuing Bank. Once
paid, absent manifest error, none of these fees shall be refundable under any
circumstances.

 

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Section 2.04 Reduction of the Revolving Commitments.
(a) The Borrowers shall have the right, upon at least five days’ irrevocable
notice to the Administrative Agent, to terminate in whole or reduce ratably in
part the unused portion of the Revolving Commitments; provided that each partial
reduction of Revolving Commitments shall be in the minimum aggregate amount of
$5,000,000.00 and in integral multiples of $1,000,000.00 in excess thereof (or
such lesser amount as may then be outstanding); and provided further that the
aggregate amount of the Revolving Commitments may not be reduced by the Borrower
below the aggregate principal amount of the outstanding Revolving Advances plus
the Letter of Credit Exposure plus the outstanding principal amount of the Swing
Line Advances.
(b) Any reduction or termination of the Revolving Commitments pursuant to
Section 2.04 shall be permanent, with no obligation of the Revolving Lenders to
reinstate such Revolving Commitments and the commitment fees provided for in
Section 2.03(a) shall thereafter be computed on the basis of the Revolving
Commitments as so reduced. The Administrative Agent shall give each Lender
prompt notice of any commitment reduction or termination under Section 2.04(a).
Section 2.05 Repayment. The Borrowers shall, jointly and severally, repay the
outstanding principal amount of the Revolving Advances on the Maturity Date.
Section 2.06 Interest. The Borrowers shall, jointly and severally, pay interest
on the unpaid principal amount of each Revolving Advance made by each Lender to
it from the date of such Revolving Advance until such principal amount shall be
paid in full, at the following rates per annum:
(a) Revolving Advances.
(i) Base Rate Advances. If such Revolving Advance is a Base Rate Advance, a rate
per annum equal to the Adjusted Base Rate plus the Applicable Margin in respect
of Base Rate Advances in effect from time to time, payable in arrears on the
earlier of (A) the first Business Day of each month and (B) on the date such
Base Rate Advance shall be paid in full.
(ii) Eurodollar Advances. If such Revolving Advance is a Eurodollar Advance, a
rate per annum equal to the Eurodollar Rate for such Interest Period plus the
Applicable Margin in respect of Eurodollar Advances in effect on each day of
such Interest Period for Eurodollar Advances, payable in arrears on the last day
of such Interest Period, and, in the case of Interest Periods of greater than
one month, on each Business Day which occurs at one month intervals from the
first day of such Interest Period.

 

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(b) Additional Interest on Eurodollar Advances. The Borrowers shall, jointly and
severally, pay to each Lender, so long as any such Lender shall be required
under regulations of the Federal Reserve Board to maintain reserves with respect
to liabilities or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each Eurodollar Advance of
such Lender, from the effective date of such Revolving Advance until such
principal amount is paid in full, at an interest rate per annum equal at all
times to the remainder obtained by subtracting (i) the Eurodollar Rate for the
Interest Period for such Revolving Advance from (ii) the rate obtained by
dividing such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar
Rate Reserve Percentage of such Lender for such Interest Period, payable on each
date on which interest is payable on such Revolving Advance. Such additional
interest payable to any Lender shall be determined by such Lender and notified
to the Borrowers through the Administrative Agent (such notice to include the
calculation of such additional interest, which calculation shall be conclusive
absent demonstrable error, and be accompanied by any evidence indicating the
need for such additional interest as the Borrowers may reasonably request)
within 90 days after such Lender becomes required to maintain such reserves.
(c) Usury Recapture. In the event the rate of interest chargeable under this
Agreement at any time (calculated after giving affect to all items charged which
constitute “interest” under applicable laws, including fees and margin amounts,
if applicable) is greater than the Maximum Rate, the unpaid principal amount of
the Revolving Advances or Swing Line Advances, as applicable, shall bear
interest at the Maximum Rate until the total amount of interest paid or accrued
on the Revolving Advances and Swing Line Advances equals the amount of interest
which would have been paid or accrued on the Revolving Advances and Swing Line
Advances if the stated rates of interest set forth in this Agreement had at all
times been in effect.
In the event, upon payment in full of the Revolving Advances and the Swing Line
Advances, the total amount of interest paid or accrued under the terms of this
Agreement and the Revolving Advances and the Swing Line Advances is less than
the total amount of interest which would have been paid or accrued if the rates
of interest set forth in this Agreement had, at all times, been in effect, then
the Borrowers shall, to the extent permitted by applicable law, jointly and
severally pay the Administrative Agent for the account of the Lenders an amount
equal to the difference between (i) the lesser of (A) the amount of interest
which would have been charged on its Revolving Advances and Swing Line Advances
if the Maximum Rate had, at all times, been in effect and (B) the amount of
interest which would have accrued on its Revolving Advances and Swing Line
Advances if the rates of interest set forth in this Agreement had at all times
been in effect and (ii) the amount of interest actually paid under this
Agreement on its Revolving Advances and Swing Line Advances.
In the event the Lenders or the Swing Line Lender ever receives, collects or
applies as interest any sum in excess of the Maximum Rate, such excess amount
shall, to the extent permitted by law, be applied to the reduction of the
principal balance of the Revolving Advances or Swing Line Advances, as
applicable, and if no such principal is then outstanding, such excess or part
thereof remaining shall be paid to the Borrowers.
(d) Default Interest. When an Event of Default occurs and is continuing, the
Applicable Margin (except for Commitment Fees), to the extent permitted by law,
will increase by 2.00%.
Section 2.07 Prepayments.
(a) Right to Prepay. The Borrowers shall have no right to prepay any principal
amount of any Revolving Advance except as provided in this Section 2.07.

 

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(b) Optional. The Borrowers may elect to prepay, in whole or in part, any of the
Revolving Advances owing by it to the Lenders, after giving prior written notice
of such election by (i) 11:00 a.m. (New York time) at least three Business Days
before such prepayment date in the case of Borrowings which are comprised of
Eurodollar Advances, and (ii) 11:00 a.m. (New York time) on or before the
Business Day of such prepayment, in case of Borrowings which are comprised of
Base Rate Advances, in each case to the Administrative Agent stating the
proposed date and aggregate principal amount of such prepayment. If any such
notice is given, the Administrative Agent shall give prompt notice thereof to
each Lender and the Borrowers shall prepay Revolving Advances comprising part of
the same Borrowing in whole or ratably in part in an aggregate principal amount
equal to the amount specified in such notice, together with accrued interest to
the date of such prepayment on the principal amount prepaid and amounts, if any,
required to be paid pursuant to Section 2.08 as a result of such prepayment
being made on such date; provided, however, that each partial prepayment shall
be in an aggregate principal amount not less than $2,000,000.00 and in integral
multiples of $1,000,000.00 in excess thereof (or such lesser amount as may then
be outstanding). Either Borrower may elect to prepay, in whole or in part, any
of the Swing Line Advances owing by it to the Swing Line Lender, after giving
prior written notice of such election by noon (New York time) on the Business
Day of such prepayment to the Administrative Agent and the Swing Line Lender
stating the proposed date and the aggregate principal amount of such prepayment.
(c) Mandatory Prepayments of Revolving Advances.
(i) Deficiency. If the outstanding principal amount of the Revolving Advances
plus the Letter of Credit Exposure plus the outstanding principal amount of the
Swing Line Advances exceeds the lesser of (A) the aggregate Revolving
Commitments and (B) the Borrowing Base, the Borrowers, jointly and severally,
agree to make a mandatory prepayment of the Revolving Advances and/or the Swing
Line Advances, together with accrued interest to the date of such prepayment on
the principal amount prepaid and amounts, if any, required to be paid pursuant
to Section 2.08 as a result of such prepayment being made on such date, in the
amount of such excess, or if the Revolving Advances and the Swing Line Advances
have been repaid in full, make deposits into the LC Cash Collateral Account in
the remaining amount of such excess to provide cash collateral for the Letter of
Credit Exposure, not later than 3:00 p.m., New York City time, if the Borrowers
shall have received notice of such deficiency prior to 12:00 noon, New York City
time, on such date, or, if such notice has not been received by the Borrowers
prior to such time on such date, then not later than 12:00 noon, New York City
time, on the Business Day immediately following the day that the Borrowers
receive such notice. Amounts to be applied pursuant to this clause (i) shall be
applied first to reduce outstanding Base Rate Advances, second to the LC Cash
Collateral Account in an amount equal to the Lenders’ aggregate Letter of Credit
Exposure and third to reduce outstanding Eurodollar Advances.
(ii) Reduction of Revolving Commitments. On the date of each reduction of the
aggregate Revolving Commitments pursuant to Section 2.04, the Borrowers, jointly
and severally, agree to make a prepayment in respect of the outstanding amount
of the Revolving Advances to the extent, if any, that the aggregate unpaid
principal amount of all Revolving Advances plus the Letter of Credit Exposure
plus the outstanding principal amount of the Swing Line Advances exceeds the
lesser of (i) the Revolving Commitments and (ii) the Borrowing Base.

 

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(iii) Application of Prepayments. Each prepayment pursuant to this Section
2.07(c) shall be accompanied by accrued interest on the amount prepaid to the
date of such prepayment and amounts, if any, required to be paid pursuant to
Section 2.08 as a result of such prepayment being made on such date.
(d) Illegality. If any Lender shall notify the Administrative Agent and the
Borrowers that any Change in Law makes it unlawful for such Lender or its
Applicable Lending Office to perform its obligations under this Agreement or to
make or maintain Eurodollar Advances then outstanding hereunder, the Borrowers
shall, no later than 11:00 a.m. (New York time) (i) (A) if not prohibited by any
Legal Requirement to maintain such Eurodollar Advances for the duration of the
Interest Period, on the last day of the Interest Period for each outstanding
Eurodollar Advance or (B) if prohibited by any Legal Requirement to maintain
such Eurodollar Advances for the duration of the Interest Period, on the second
Business Day following its receipt of such notice, prepay all Eurodollar
Advances of all of the Lenders then outstanding, together with accrued interest
on the principal amount prepaid to the date of such prepayment and amounts, if
any, required to be paid pursuant to Section 2.08 as a result of such prepayment
being made on such date, (ii) each Lender shall simultaneously make a Base Rate
Advance or, if not otherwise prohibited, make an Eurodollar Advance in an amount
equal to the aggregate principal amount of the affected Eurodollar Advances, and
(iii) the right of the Borrowers to select Eurodollar Advances shall be
suspended until such Lender shall notify Administrative Agent that the
circumstances causing such suspension no longer exist. Each Lender agrees to use
commercially reasonable efforts (consistent with its internal policies and
subject to legal and regulatory restrictions) to designate a different
Applicable Lending Office if the making of such designation would avoid the
effect of this paragraph and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.
(e) Ratable Payments; Effect of Notice. Each payment of any Revolving Advance
pursuant to this Section 2.07 or any other provision of this Agreement shall be
made in a manner such that all Revolving Advances comprising part of the same
Borrowing are paid in whole or ratably in part. All notices given pursuant to
this Section 2.07 shall be irrevocable and binding upon the Borrowers.
Section 2.08 Funding Losses. If (a) any payment of principal of any Eurodollar
Advance is made other than on the last day of the Interest Period for such
Revolving Advance as a result of any payment pursuant to Section 2.07 or the
acceleration of the maturity of the Revolving Advances pursuant to Article VII
or (b) if any Borrower fails to make a principal or interest payment with
respect to any Eurodollar Advance on the date such payment is due and payable,
such Borrower shall, within three Business Days of any written demand sent by
any Lender to such Borrower through the Administrative Agent, pay to
Administrative Agent for the account of such Lender any amounts (without
duplication of any other amounts payable in respect of breakage costs) required
to compensate such Lender for any additional losses, out-of-pocket costs or
expenses which it actually incurs as a result of such payment or nonpayment,
including, without limitation, any loss, cost or expense actually incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
any Lender to fund or maintain such Revolving Advance. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to either Borrower and shall
be conclusive absent manifest error.

 

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Section 2.09 Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement reflected in the Eurodollar Rate Reserve
Percentage), the Issuing Bank or the Swing Line Lender;
(ii) subject any Lender, the Issuing Bank or any Swing Line Lender to any tax of
any kind whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any Eurodollar Advance made by it, or
change the basis of taxation of payments to such Lender, the Issuing Bank or the
Swing Line Lender in respect thereof (except for Indemnified Taxes or Other
Taxes covered by Section 2.11 and the imposition of, or any change in the rate
of, any Excluded Tax payable by such Lender, the Issuing Bank or the Swing Line
Lender); or
(iii) impose on any Lender, the Issuing Bank, the Swing Line Lender or the
London interbank market any other condition, cost or expense affecting this
Agreement or Eurodollar Advances made by such Lender, the Issuing Bank, the
Swing Line Lender, or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Advance (or of maintaining its
obligation to make any such Revolving Advance), or to increase the cost to such
Lender or the Issuing Bank of participating in, issuing or maintaining any
Letter of Credit (or of maintaining its obligation to participate in or to issue
any Letter of Credit), or to reduce the amount of any sum received or receivable
by such Lender, the Issuing Bank or the Swing Line Lender hereunder (whether of
principal, interest or any other amount) then, upon request of such Lender, the
Issuing Bank or the Swing Line Lender, the Borrowers will, jointly and
severally, pay to such Lender, the Issuing Bank or the Swing Line Lender, as the
case may be (provided that such Lender has complied with its obligations under
Section 2.15), such additional amount or amounts as will compensate such Lender,
the Issuing Bank or the Swing Line Lender, as the case may be, for such
additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender, the Issuing Bank or the Swing Line
Lender determines that any Change in Law affecting such Lender, the Issuing Bank
or the Swing Line Lender or any lending office of such Lender, the Issuing Bank
or the Swing Line Lender or such Lender’s, the Issuing Bank’s or the Swing Line
Lender’s holding company, if any, regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender’s, the Issuing
Bank’s or the Swing Line Lender’s capital or on the capital of such Lender’s,
the Issuing Bank’s or the Swing Line Lender’s holding company, if any, as a

 

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consequence of this Agreement, the Commitments of such Lender or the Revolving
Advances made by, or participations in Letters of Credit held by, such Lender,
the Letters of Credit issued by the Issuing Bank, or the Revolving Advances made
by the Swing Line Lender, to a level below that which such Lender, the Issuing
Bank or the Swing Line Lender or such Lender’s, the Issuing Bank’s or the Swing
Line Lender’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s, the Issuing Bank’s or the Swing Line
Lender’s policies and the policies of such Lender’s, the Issuing Bank’s or the
Swing Line Lender’s holding company with respect to capital adequacy), then from
time to time the Borrowers will, jointly and severally, pay to such Lender, the
Issuing Bank or the Swing Line Lender, as the case may be (provided that such
Lender has complied with its obligations under Section 2.15), such additional
amount or amounts as will compensate such Lender, the Issuing Bank or the Swing
Line Lender or such Lender’s, the Issuing Bank’s or the Swing Line Lender’s
holding company for any such reduction suffered.
(c) Certificates for Reimbursement. A certificate of a Lender, the Issuing Bank
or the Swing Line Lender’s setting forth the amount or amounts necessary to
compensate such Lender, the Issuing Bank or the Swing Line Lender or any of
their respective holding companies, as the case may be, as specified in
paragraph (a) or (b) of this Section and setting forth a reasonably detailed
description of the basis for calculating such amount delivered to the Borrowers
shall be conclusive absent manifest error. The Borrowers shall, jointly and
severally, pay such Lender, the Issuing Bank or the Swing Line Lender, as the
case may be, the amount shown as due on any such certificate within 30 days
after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender, the Issuing
Bank or the Swing Line Lender to demand compensation pursuant to this Section
shall not constitute a waiver of such Lender’s, the Issuing Bank’s or the Swing
Line Lender’s right to demand such compensation, provided that the Borrowers
shall not be required to compensate a Lender, the Issuing Bank or the Swing Line
Lender pursuant to this Section for any increased costs incurred or reductions
suffered more than six months prior to the date that such Lender, the Issuing
Bank, or the Swing Line Lender, as the case may be, notifies the Borrowers of
the Change in Law giving rise to such increased costs or reductions and of such
Lender’s, the Issuing Bank’s or the Swing Line Lender’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the six-month period referred
to above shall be extended to include the period of retroactive effect thereof).
Section 2.10 Payments and Computations.
(a) Payment Procedures. The Borrowers shall make each payment under this
Agreement not later than 12:00 p.m. (New York time) on the day when due to the
Administrative Agent at the Administrative Agent’s Applicable Lending Office in
immediately available funds. Each Revolving Advance shall be repaid and each
payment of interest thereon shall be paid in Dollars. All payments shall be made
without setoff, deduction, or counterclaim. The Administrative Agent will
promptly thereafter, and in any event prior to the close of business on the day
any timely payment is made, cause to be distributed like funds relating to the
payment of principal, interest or fees ratably (other than amounts payable
solely to the Administrative Agent, or a specific Lender pursuant to
Section 2.03(b), 2.03(c), 2.08, 2.09 or 2.11, but after taking into account
payments effected pursuant to Section 10.04) in accordance with each Lender’s
Pro Rata Share to the Lenders for the account of their respective Applicable
Lending Offices, and like funds relating to the payment of any other amount
payable to any Lender to such Lender for the account of its Applicable Lending
Offices, in each case to be applied in accordance with the terms of this
Agreement.

 

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(b) Computations. All computations of interest based on the Prime Rate shall be
made by the Administrative Agent on the basis of a year of 365 or 366 days, as
the case may be, and all computations of interest based on the Federal Funds
Effective Rate or the Eurodollar Rate and of fees shall be made by the
Administrative Agent, on the basis of a year of 360 days, in each case for the
actual number of days (including the first day, but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent of an interest rate shall be
conclusive and binding for all purposes, absent manifest error.
(c) Non-Business Day Payments. Whenever any payment shall be stated to be due on
a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be.
(d) Agent Reliance. Unless the Administrative Agent shall have received written
notice from a Borrower prior to the date on which any payment is due to the
Lenders that such Borrower will not make such payment in full, the
Administrative Agent may assume that such Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
date an amount equal to the amount then due to such Lender. If and to the extent
such Borrower shall not have so made such payment in full to Administrative
Agent, each Lender shall repay to the Administrative Agent forthwith on demand
such amount distributed to such Lender, together with interest thereon, for each
day from the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Administrative Agent, at the greater of the
Federal Funds Effective Rate for such day and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
Section 2.11 Taxes.
(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Loan Party hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if any Loan Party shall be required by any
Legal Requirement to deduct any Indemnified Taxes (including any Other Taxes)
from such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, such
Lender, the Issuing Bank or the Swing Line Lender, as the case may be, receives
an amount equal to the sum it would have received had no such deductions been
made; provided however, that the Borrower shall not be required to increase any
such amounts payable to any Administrative Agent, Lender, Issuing Bank or Swing
Line Lender with respect to Indemnified Taxes or Other Taxes that (1) are
attributable to recipient’s failure to comply with the requirements of
Section 2.11(e); (2) are imposed solely as a result of the payment to the
Administrative Agent, Lender, Issuing Bank or Swing Line Lender hereunder and a
connection between such recipient and the taxing jurisdiction imposing such
Indemnified Tax or Other Tax, which connection is unrelated to the transactions
set forth in any Loan Document; or (3) that are U.S. Withholding Taxes imposed
on amounts payable to or for the account of an Administrative Agent, Lender,
Issuing Bank or Swing Line Lender at the time such recipient becomes a party to
this Agreement, except to the extent such U.S. Withholding Taxes are imposed or
increased as a result of a Change in Law, (ii) the Borrowers shall make such
deductions and (iii) the Borrowers shall, jointly and severally, timely pay the
full amount deducted to the relevant Governmental Authority in accordance with
Legal Requirements.

 

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(b) Payment of Other Taxes by the Borrowers. Without limiting the provisions of
paragraph (a) above, the Borrowers shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Indemnification by the Borrowers. The Borrowers shall indemnify the
Administrative Agent, each Lender, the Issuing Bank and the Swing Line Lender,
within 10 days after demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) paid by the
Administrative Agent, such Lender, the Issuing Bank or the Swing Line Lender, as
the case may be, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability and setting forth a reasonably detailed description of the basis for
calculating such amount delivered to the Borrowers by a Lender, the Issuing Bank
or the Swing Line Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, the Issuing
Bank or the Swing Line Lender, shall be conclusive absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority,
the Borrowers shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which each
Borrower is resident for tax purposes, or any treaty to which such jurisdiction
is a party, with respect to payments hereunder or under any other Loan Document
shall deliver to the Borrowers (with a copy to the Administrative Agent), at the
time or times prescribed by applicable law or reasonably requested by the
Borrowers or the Administrative Agent, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrowers or the Administrative Agent as will permit such payments to be made
without withholding or at a reduced rate of withholding. In addition, any
Lender, the Issuing Bank or the Swing Line Lender if requested by the Borrowers
or the Administrative Agent, shall deliver such other documentation prescribed
by applicable law or reasonably requested by the Borrowers or the Administrative
Agent as will enable the Borrowers or the Administrative Agent to determine
whether or not such Lender, the Issuing Bank or the Swing Line Lender is subject
to backup withholding or information reporting requirements.

 

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Without limiting the generality of the foregoing, in the event that a Borrower
is resident for tax purposes in the United States of America, any Foreign Lender
shall deliver to the Borrowers and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrowers or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:
(i) two duly completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States of
America is a party,
(ii) two duly completed copies of Internal Revenue Service Form W-8EC or
Internal Revenue Service Form W-8IMY (or successor form),
(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Parent
within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in section 881(c)(3)(C) of the Code and (y) two
duly completed copies of Internal Revenue Service Form W-8BEN, or
(iv) any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit the Borrowers to determine the withholding or deduction
required to be made.
In addition, each Foreign Lender shall deliver such forms discussed above
promptly upon the obsolescence or invalidity of any form previously delivered by
such Foreign Lender. Each Foreign Lender shall promptly notify the Borrower in
writing at any time it determines that it is no longer in a position to provide
any previously delivered certificate with relation to portfolio interest. Each
Lender who is not a Foreign Lender shall furnish an accurate and complete
Internal Revenue Form W-9 (or successor form) establishing that such Lender is
not subject to U.S. backup withholding, and to the extent it may lawfully do so
at such times, provide a new Form W-9 (or successor form) upon the expiration or
obsolescence of any previously delivered form.
(f) Treatment of Certain Refunds. If the Administrative Agent, a Lender, the
Issuing Bank or the Swing Line Lender determines, in good faith, that it has
received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrowers or with respect to which the Borrowers have paid
additional amounts pursuant to this Section, it shall pay to the Borrowers an
amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrowers under this Section with respect to
the Taxes or Other Taxes giving rise to such refund), net of all reasonable

 

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out-of-pocket expenses of the Administrative Agent, such Lender, the Issuing
Bank or the Swing Line Lender, as the case may be, and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund), provided that the Borrowers, upon the request of the
Administrative Agent, such Lender, the Issuing Bank or the Swing Line Lender,
agree to repay the amount paid over to the Borrowers (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority that
accrue during or in respect of the period of time that the Borrowers hold such
amount and that would have been payable by the Borrowers pursuant to Section
2.11(a) or (b) had the Borrowers not paid the amount refunded to the Borrowers
pursuant to this Section 2.11(f)) to the Administrative Agent, such Lender, the
Issuing Bank or the Swing Line Lender in the event the Administrative Agent,
such Lender, the Issuing Bank or the Swing Line Lender is required to repay such
refund to such Governmental Authority. This paragraph shall not be construed to
require the Administrative Agent, any Lender, the Issuing Bank or the Swing Line
Lender to make available its tax returns (or any other information relating to
its taxes that it deems confidential) to the Borrowers or any other Person.
Section 2.12 Sharing of Payments, Etc. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Revolving Advances or other obligations
hereunder resulting in such Lender’s receiving payment of a proportion of the
aggregate amount of its Revolving Advances and accrued interest thereon or other
such obligations greater than its Pro Rata Share, then the Lender receiving such
greater proportion shall (a) notify the Administrative Agent of such fact, and
(b) purchase (for cash at face value) participations in the Revolving Advances
and such other obligations of the other Lenders, or make such other adjustments
as shall be equitable, so that the benefit of all such payments shall be shared
by the Lenders ratably in accordance with the aggregate amount of principal of
and accrued interest on their respective Revolving Advances and other amounts
owing them, provided that: (i) if any such participations are purchased and all
or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest; and (ii) the provisions of this paragraph
shall not be construed to apply to (x) any payment made by the Borrowers
pursuant to and in accordance with the express terms of this Agreement or
(y) any payment obtained by a Lender as consideration for the assignment of or
sale of a participation in any of its Revolving Advances or participations in
Letters of Credit to any assignee or participant, other than to the Borrowers or
any Subsidiary thereof (as to which the provisions of this paragraph shall
apply). Each Loan Party consents to the foregoing and agrees, to the extent it
may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against each
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of each Loan Party in the
amount of such participation.
Section 2.13 Applicable Lending Offices. Each Lender may book its Revolving
Advances at any Applicable Lending Office selected by such Lender and may change
its Applicable Lending Office from time to time. All terms of this Agreement
shall apply to any such Applicable Lending Office and the Revolving Advances
shall be deemed held by each Lender for the benefit of such Applicable Lending
Office. Each Lender may, by written notice to the Administrative Agent and the
Borrowers designate replacement or additional Applicable Lending Offices through
which Revolving Advances will be made by it and for whose account repayments are
to be made.

 

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Section 2.14 Letters of Credit.
(a) Issuance. Subject to the terms of this Agreement, from time-to-time from the
Closing Date until 30 days before the Maturity Date, at the request of a
Borrower, the Issuing Bank shall, on the terms and conditions hereinafter set
forth, issue, increase, or extend the expiration date of Letters of Credit for
the account of such Borrower or for the account of any Subsidiary of a Borrower
(in which case such Borrower and such Subsidiary shall be co-applicants with
respect to such Letter of Credit) on any Business Day. All Letters of Credit
outstanding under the Existing Credit Agreement will deemed to be issued under
this Agreement on the Closing Date. No Letter of Credit will be issued,
increased, or extended:
(i) if such issuance, increase, or extension would cause the Letter of Credit
Exposure to exceed the lesser of (A) the aggregate Revolving Commitments minus
the sum of the aggregate outstanding principal amount of all Revolving Advances
and the aggregate outstanding principal amount of the Swing Line Advances and
(B) the Borrowing Base minus the sum of the aggregate outstanding principal
amount of all Revolving Advances and the aggregate outstanding principal amount
of the Swing Line Advances;
(ii) unless such Letter of Credit has an expiration date not later than the
earlier of (A) one year after the date of issuance thereof and (B) 180 days
after the Maturity Date; provided that, any such Letter of Credit with a
one-year tenor may expressly provide that it is renewable at the option of the
Issuing Bank for additional one-year periods (which shall in no event extend
beyond the 180th day after the Maturity Date) if such Letter of Credit is
cancelable upon at least 30 days’ notice given by the Issuing Bank to the
beneficiary of such Letter of Credit;
(iii) unless such Letter of Credit is in form and substance acceptable to the
Issuing Bank in its sole discretion;
(iv) unless such Borrower has delivered to the Issuing Bank a completed and
executed Letter of Credit Application; and
(v) unless such Letter of Credit is governed by the Uniform Customs and Practice
for Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, or any successor to such publication or to the
International Standby Practices (1998), International Chamber of Commerce
Publication No. 590, or any successor to such publication.
If the terms of any letter of credit application referred to in the foregoing
clause (iv) conflicts with the terms of this Agreement, the terms of this
Agreement shall control.

 

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(b) Participations. Upon the date of the issuance or increase of a Letter of
Credit occurring on or after the Closing Date, the Issuing Bank shall be deemed
to have sold to each other Lender and each other Lender shall have been deemed
to have purchased from the Issuing Bank a participation in the related Letter of
Credit Obligations equal to such Lender’s Pro Rata Share at such date. The
Issuing Bank shall promptly give notice of the issuance or increase of each
Letter of Credit to the Administrative Agent and the Lenders. In consideration
and in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the Issuing Bank, such Lender’s Pro Rata Share of each payment or disbursement
made by an Issuing Bank pursuant to a Letter of Credit and not reimbursed by a
Borrower (or, if applicable, another party pursuant to its obligations under any
other Loan Document) forthwith on the date due as provided in Section 2.14(c).
Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or an Event of
Default, and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as possible
give telephonic notification, confirmed by fax, to the Administrative Agent and
the applicable Borrower of such demand for payment and whether the Issuing Bank
has made or will make disbursement thereunder; provided that any failure to give
or delay in giving such notice shall not relieve such Borrower of its obligation
to reimburse the Issuing Bank and the Lenders with respect to any such payment
or disbursement. The Administrative Agent shall promptly give each Lender notice
thereof.
(c) Reimbursement. If the Issuing Bank shall make any disbursement in respect of
a Letter of Credit, the Borrowers jointly and severally agree to reimburse such
disbursement by paying to the Administrative Agent an amount equal to such
disbursement not later than 12:00 noon, New York City time, on the date that
such disbursement is made, if the Borrowers shall have received notice of such
disbursement prior to 10:00 a.m., New York City time, on such date, or, if such
notice has not been received by the Borrowers prior to such time on such date,
then not later than 12:00 noon, New York City time, on (i) the Business Day that
the Borrowers receive such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrowers receive such notice, if such
notice is not received prior to such time on the day of receipt; provided that
the Borrowers shall conclusively be deemed, subject to the conditions to
borrowing set forth herein (including the conditions stated in Section 3.02), to
have requested that such payment be financed with an Base Rate Advance in an
equivalent amount and, to the extent so financed, the Borrowers’ obligation to
make such payment shall be discharged and replaced by the resulting Base Rate
Advance. If the Borrowers fail to make such payment when due, the Administrative
Agent shall notify each Lender of the applicable disbursement, the payment then
due from the Borrowers in respect thereof and such Lender’s Pro Rata Share
thereof. Promptly following receipt of such notice, each Lender shall pay to the
Administrative Agent its Pro Rata Share of the payment then due from the
Borrowers, in the same manner as provided in Section 2.02 with respect to
Revolving Advances made by such Lender (and Section 2.02 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the Issuing Bank the amounts so received by it from
the Lenders. If such reimbursement is not made by any Lender to the Issuing Bank
on the same day on which the Issuing Bank shall have made payment on any such
draw, such Lender shall pay interest thereon to the Issuing Bank at a rate per
annum equal to the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation.

 

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(d) Obligations Unconditional. The obligations of the Borrowers under this
Agreement in respect of each Letter of Credit shall be absolute, unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, notwithstanding the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit Documents,
any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all or any of
the provisions of any Letter of Credit Document or any Loan Document;
(iii) the existence of any claim, set-off, defense or other right which either
Borrower, any other party guaranteeing, or otherwise obligated with, such
Borrower, any subsidiary or other Affiliate thereof or any other Person may have
at any time against any beneficiary or transferee of such Letter of Credit (or
any Persons for whom any such beneficiary or any such transferee may be acting),
the Issuing Bank, any Lender or any other Person, whether in connection with
this Agreement, any other Loan Document, the transactions contemplated in this
Agreement or in any Letter of Credit Documents or any unrelated transaction;
(iv) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under such Letter of Credit against presentation
of a draft or certificate which does not strictly comply with the terms of such
Letter of Credit; or
(vi) any other act or omission to act or delay of any kind of the Issuing Bank,
the Administrative Agent the Lenders or any other Person or any other event,
circumstance or happening whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of either Borrower’s obligations hereunder.
Without limiting the generality of the foregoing, it is expressly understood and
agreed that the absolute and unconditional obligation of each Borrower hereunder
to reimburse each payment or disbursement made by an Issuing Bank pursuant to a
Letter of Credit will not be excused by the gross negligence or willful
misconduct of the Issuing Bank; provided that the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrowers to the
extent of any damages that are caused by the Issuing Bank’s failure to exercise
care when determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof. The parties hereto expressly
agree that, in the absence of gross negligence or willful misconduct on the part
of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each
such determination.

 

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(e) Prepayments of Letters of Credit. In the event that any Letters of Credit
shall be outstanding or shall be drawn and not reimbursed on the fifth Business
Day prior to the Maturity Date, the Borrowers shall on or before such date
either (i) jointly and severally, pay to the Administrative Agent an amount
equal to 105% of the Letter of Credit Exposure allocable to such Letters of
Credit to be held in the LC Cash Collateral Account and applied in accordance
with paragraph (g) below or (ii) provide the Issuing Bank with a substitute
letter of credit naming the Issuing Bank as beneficiary, in form and substance
and from a financial institution reasonably satisfactory to the Issuing Bank,
with a face amount equal to 105% of the aggregate Letter of Credit Exposure
allocable to such outstanding Letters of Credit.
(f) Liability of Issuing Bank. Each Borrower assumes all risks of the acts or
omissions of any beneficiary or transferee of any Letter of Credit with respect
to its use of such Letter of Credit. Neither the Issuing Bank nor any of its
officers or directors shall be liable or responsible for:
(i) the use which may be made of any Letter of Credit or any acts or omissions
of any beneficiary or transferee in connection therewith;
(ii) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged;
(iii) payment by the Issuing Bank against presentation of documents which do not
comply with the terms of a Letter of Credit, including failure of any documents
to bear any reference or adequate reference to the relevant Letter of Credit; or
(iv) any other circumstances whatsoever in making or failing to make payment
under any Letter of Credit (including the Issuing Bank’s own negligence),
except that in each case, the Borrowers shall have a claim against the Issuing
Bank, and the Issuing Bank shall be liable to, and shall promptly pay to, the
Borrowers, to the extent of any direct, as opposed to consequential (claims in
respect of which are hereby waived by the Borrowers to the extent permitted by
applicable law), damages suffered by the Borrowers which the Borrowers prove
were caused by the Issuing Bank’s willful misconduct or gross negligence in
determining whether documents presented under a Letter of Credit strictly comply
with the terms of such Letter of Credit it is understood that the applicable
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (i) the Issuing Bank’s exclusive reliance on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the Issuing Bank.

 

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(g) LC Cash Collateral Account.
(i) If the Borrowers are required to deposit funds in the LC Cash Collateral
Account pursuant to Sections 2.07(c), 2.14(e), 7.02(b) or 7.03(b), then the
Borrowers and the Administrative Agent shall establish the LC Cash Collateral
Account and the Borrowers shall execute any documents and agreements, including
the Administrative Agent’s standard form assignment of deposit accounts, that
the Administrative Agent requests in connection therewith to establish the LC
Cash Collateral Account and grant the Administrative Agent an Acceptable
Security Interest in such account and the funds therein. The Borrowers hereby
pledge to the Administrative Agent and grant the Administrative Agent a security
interest in the LC Cash Collateral Account, whenever established, all funds held
in the LC Cash Collateral Account from time to time and all proceeds thereof as
security for the payment of the Obligations.
(ii) Funds held in the LC Cash Collateral Account shall be held as cash
collateral for obligations with respect to Letters of Credit and promptly
applied by the Administrative Agent at the request of the Issuing Bank to any
reimbursement or other obligations under Letters of Credit that exist or occur.
To the extent that any surplus funds are held in the LC Cash Collateral Account
above 105% of the Letter of Credit Exposure during the existence of an Event of
Default the Administrative Agent may (A) hold such surplus funds in the LC Cash
Collateral Account as cash collateral for the Obligations or (B) apply such
surplus funds to any Obligations in any manner directed by the Majority Lenders.
If no Default or Event of Default exists, the Administrative Agent shall release
to the Borrowers at either Borrower’s written request any funds held in the LC
Cash Collateral Account above the amounts required by Section 2.14(e) or
otherwise.
(iii) Funds held in the LC Cash Collateral Account shall be invested in Cash
Equivalents maintained with, and under the sole dominion and control of, the
Administrative Agent or in another investment if mutually agreed upon by the
Borrowers and the Administrative Agent, but the Administrative Agent shall have
no other obligation to make any other investment of the funds therein. The
Administrative Agent shall exercise reasonable care in the custody and
preservation of any funds held in the LC Cash Collateral Account and shall be
deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Administrative Agent accords its own
property, it being understood that the Administrative Agent shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any such funds.
(h) Resignation or Removal of the Issuing Bank. The Issuing Bank may resign at
any time by giving written notice to the Administrative Agent, the Lenders and
the Borrowers, such resignation to be effective upon the appointment of a
successor Issuing Bank, or, if no successor Issuing Bank has been appointed,
60 days after the retiring Issuing Bank gives notice of its intention to resign
or receives notice of its removal. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint, and provided that no Default
or Event of Default exists, with the consent of the Borrowers (which consent
shall not be unreasonably withheld or delayed), a successor Issuing Bank. If no
successor Issuing Bank shall have been so appointed by the Majority Lenders
within such time period, then the Issuing Bank may appoint, and provided that no
Default or Event of Default exists, with the consent of the Borrowers (which
consent shall not be unreasonably withheld or delayed), a successor

 

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Issuing Bank. Subject to the next succeeding sentence, upon the acceptance of
any appointment as the Issuing Bank hereunder by a Lender that shall agree to
serve as successor Issuing Bank, such successor shall succeed to and become
vested with all the interests, rights and obligations of the retiring Issuing
Bank and the retiring Issuing Bank shall be discharged from its obligations to
issue additional Letters of Credit hereunder. At the time such resignation shall
become effective, the Borrowers shall pay all accrued and unpaid fees pursuant
to Sections 2.03(c)(ii) and (iii). The acceptance of any appointment as the
Issuing Bank hereunder by a successor Lender shall be evidenced by an agreement
entered into by such successor, in a form satisfactory to the retiring Issuing
Bank and the Administrative Agent, and, from and after the effective date of
such agreement, (i) such successor Lender shall have all the rights and
obligations of the previous Issuing Bank under this Agreement and the other Loan
Documents and (ii) references herein and in the other Loan Documents to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the resignation or removal of the Issuing Bank
hereunder, the retiring Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of the Issuing Bank under this
Agreement and the other Loan Documents with respect to Letters of Credit issued
by it prior to such resignation, but shall not be required to issue additional
Letters of Credit.
Section 2.15 Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.09, or if the Borrowers
are required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.11, then such
Lender shall use reasonable efforts to promptly designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.09 or Section 2.11, as the case
may be, in the future and (ii) would not subject such Lender to any unreimbursed
cost or expense (unless the Borrowers pay, as a condition precedent to such
Lender’s agreement to take such action, for any such cost or expense) and would
not otherwise be disadvantageous to such Lender. The Borrowers hereby, jointly
and severally agree to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.09 or if the Borrowers
are required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.11, or if any
Lender defaults in its obligation to fund Loans hereunder, then the Borrowers
may, at their sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to promptly assign and delegate,
without recourse, all its interests, rights and obligations under this Agreement
to an assignee acceptable to the Borrowers in their reasonable discretion (it
being understood that it shall not be unreasonable for the Borrowers to withhold
their consent to an assignment to a Foreign Lender that would subject the
Borrowers to withholding in respect of this Agreement at the time of such
assignment) that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrowers
shall have received the prior written consent of the Administrative Agent and
the Issuing Bank, which consent shall not unreasonably

 

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be withheld or delayed, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrowers (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.09 or payments required to be made
pursuant to Section 2.11, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrowers to require such
assignment and delegation cease to apply.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01 Initial Conditions Precedent. The effectiveness of the amendment
and restatement of the Existing Credit Agreement is subject to the following
conditions precedent:
(a) Documentation. On or before the day on which the initial Borrowing is made
or the initial Swing Line Advance is made, or the initial Letter of Credit is
issued, the Administrative Agent and the Lenders shall have received the
following, each dated on or before such day, duly executed by all the parties
thereto, each in form and substance satisfactory to the Administrative Agent and
the Lenders:
(i) this Agreement and all attached Exhibits and Schedules;
(ii) any Note requested by a Lender pursuant to Section 2.02(g) payable to the
order of such requesting Lender in the amount of its Revolving Commitment;
(iii) a certificate dated as of the Closing Date from a Responsible Officer of
the Borrowers stating that (A) all representations and warranties of such Person
set forth in this Agreement and in the other Loan Documents to which it is a
party are true and correct in all material respects; (B) no Default has occurred
and is continuing; and (C) the conditions in this Section 3.01 have been met;
(iv) to the extent any have been entered into on or after August 1, 2006, copies
of amendments to the certificate or articles of incorporation or other
equivalent organizational documents of each Loan Party, certified as of a recent
date by the Secretary of State of the state of its organization;
(v) a certificate of the Secretary or Assistant Secretary of each Loan Party
dated the Closing Date and certifying (A) that attached thereto is a true and
complete copy of any amendments to the organizational documents of such Loan
Party as in effect on the Closing Date and at all times since a date prior to
the date of the resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly adopted by the Board of
Directors of such Loan Party authorizing the execution, delivery and performance
of the Loan Documents to which such Loan Party is a party and, in the case of
the Borrower, the borrowings hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C) that the
certificate or articles of incorporation or other organizational documents of
such Loan Party have not been amended since the date of the last amendment
thereto shown on the certified copy thereof furnished pursuant to clause
(iv) above, and (D) as to the incumbency and specimen signature of each officer
executing any Loan Document, Notices of Borrowing or any other document
delivered in connection herewith on behalf of such Loan Party;

 

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(vi) a certificate of another officer of each Loan Party as to the incumbency
and specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to (v) above;
(vii) certificates from the appropriate Governmental Authority certifying as to
the good standing, existence and authority of each of the Loan Parties in all
jurisdictions where required by the Administrative Agent;
(viii) a favorable opinion dated as of the Closing Date of Paul, Hastings,
Janofsky & Walker LLP, counsel to the Loan Parties substantially similar to the
opinion it delivered pursuant to the Existing Credit Agreement;
(ix) a certificate from a Financial Officer of each Borrower dated as of the
Closing Date addressed to the Administrative Agent and each of the Lenders
regarding the matters set forth in Section 4.20;
(x) a copy of, or a certificate as to coverage under, the insurance policies
required by Section 5.04 and the applicable provisions of the Security
Documents, each of which shall be endorsed or otherwise amended to include a
customary lender’s loss payable endorsement and to name the Administrative Agent
as an additional insured;
(xi) a Borrowing Base Report dated as of September 15, 2008;
(xii) a Compliance Certificate dated as of the Closing Date duly completed and
executed by a Financial Officer of each Borrower with respect to the July 31,
2008 financials;
(xiii) a copy of the risk management policy of the Borrowers (the “Risk
Management Policy”) in form and substance satisfactory to the Majority Lenders
accompanied by a certificate signed by a Responsible Officer certifying
compliance with such Risk Management Policy;
(xiv) copies of any amendments to Material Contracts reflected on
Schedule 1.01(e) to the Existing Credit Agreement in effect on or after
August 1, 2006 and each of the Material Contracts in effect on or after
August 1, 2006 that are not reflected on Schedule 1.01(e) to the Existing Credit
Agreement, each certified as of the Closing Date by a Responsible Officer of the
Borrowers (A) as being true and correct copies of such documents as of the
Closing Date, (B) as being in full force and effect and (C) that no material
term or conditions thereof shall have been amended, modified or waived after the
execution thereof without the prior written consent of the Administrative Agent;
and
(xv) such other documents, governmental certificates and agreements as the
Administrative Agent or any Lender may reasonably request.

 

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(b) Payment of Fees. On the Closing Date, the Borrowers shall have paid the fees
required to be paid to the Administrative Agent, the Arranger, and the Lenders
on the Closing Date, including, without limitation, the fees set forth in the
Fee Letters and all other costs and expenses which have been invoiced and are
payable pursuant to Section 10.04.
(c) Due Diligence; Corporate Structure. The Administrative Agent and the Lenders
shall have completed satisfactory due diligence review of the assets,
liabilities, business, operations and condition (financial or otherwise) of the
Parent and its Subsidiaries, and all legal, financial, accounting, governmental,
tax and regulatory matters, and fiduciary aspects of the proposed financing and
the terms and conditions of all material obligations of the Loan Parties. The
documentation reflecting the ownership, capital, corporate, tax, organizational
and legal structure of the Loan Parties shall be acceptable to the
Administrative Agent.
(d) Security Documents. The Administrative Agent shall have received all
appropriate evidence required by the Administrative Agent in its sole discretion
necessary to determine that arrangements have been made for the Administrative
Agent for the benefit of Secured Parties to have an Acceptable Security Interest
in the Collateral, including, without limitation, (i) the delivery to the
Administrative Agent of such financing statements under the Uniform Commercial
Code for filing in such jurisdictions as the Administrative Agent may require
and (ii) lien, tax and judgment searches conducted on Loan Parties reflecting no
Liens other than Permitted Liens against any of the Collateral as to which
perfection of a Lien is accomplished by the filing of a financing statement.
(e) Financial Statements. The Lenders shall have received true and correct
copies of (i) the Audited Financial Statements (ii) the draft unaudited
consolidated balance sheets and related statements of operations, cash flows and
stockholders’ equity of the Parent and its Subsidiaries, each as of and for the
twelve-month period ended June 30, 2008 and the one-month ended July 31, 2008
and including a reconciliation from GAAP to mark-to-market accounting, (iii) the
Projections in form and substance reasonably satisfactory to the Administrative
Agent and the Lenders, and (iv) such other financial information as the
Administrative Agent may reasonably request.
(f) Authorizations and Approvals. All Governmental Authorities and Persons shall
have approved or consented to the transactions contemplated hereby, including,
without limitation, those required in connection with the continued operation of
the Parent and its Subsidiaries, to the extent required, and such approvals
shall be in full force and effect, and all applicable waiting periods shall have
expired without any action being taken or threatened that would restrain,
prevent or otherwise impose adverse conditions on this Agreement and the actions
contemplated hereby.
(g) Field Examination. The Administrative Agent shall have received a field
examination and review of the December 31, 2007 Borrowing Base in form and
substance satisfactory to the Administrative Agent.

 

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(h) No Proceeding or Litigation; No Injunctive Relief. No action, suit,
investigation or other proceeding (including, without limitation, the enactment
or promulgation of a statute or rule) by or before any arbitrator or any
Governmental Authority shall be threatened or pending and no preliminary or
permanent injunction or order by a state or federal court shall have been
entered (i) in connection with this Agreement, the Secured Counterparty
Contracts or any transaction contemplated hereby or thereby or (ii) which, in
any case, in the reasonable judgment of the Administrative Agent, could
reasonably be expected to cause a Material Adverse Effect.
(i) No Default. No Default shall have occurred and be continuing or would result
from such Advance or from the application of the proceeds therefrom.
(j) Representations and Warranties. The representations and warranties contained
in Article IV hereof and in each other Loan Document shall be true and correct
before and after giving effect to the Revolving Advances and to the application
of the proceeds from such Revolving Advances from the date of the Revolving
Advances, as though made on and as of such date.
(k) No Material Adverse Effect. Since June 30, 2007, there has been no material
adverse change in the condition (financial or otherwise), results of operations,
assets, properties, business or prospects of the Parent and its Subsidiaries,
taken as a whole.
Section 3.02 Conditions Precedent to Each Credit Event. The obligation of each
Lender to make a Revolving Advance on the occasion of each Borrowing (including
the initial Borrowing) or Convert to or Continue a Eurodollar Advance, the
obligation of the Swing Line Lender to make any Swing Line Advance, and the
obligation of the Issuing Bank to issue, extend or increase Letters of Credit
shall be subject to the further conditions precedent that on the Borrowing Date,
the date of Continuation or Conversion, the date of the Swing Line Advance, or
issuance, extension or increase date of such Letters of Credit, the following
statements shall be true (and each of the giving of the applicable Notice of
Borrowing or Notice of Conversion or Continuation and the acceptance by the
applicable Borrower of the proceeds of such Revolving Advance or Swing Line
Advance or the request for the issuance, extension or increase of a Letter of
Credit shall constitute a representation and warranty by such Borrower that on
the date of such Revolving Advance or Swing Line Advance, the date of such
Conversion or Continuation, or the date of such issuance, extension or increase
such statements are true):
(a) the representations and warranties contained in Article IV and in each other
Loan Document are true and correct in all material respects on and as of the
date of such Revolving Advance or Swing Line Advance, Continuation or
Conversion, or the issuance, extension or increase of such Letter of Credit
before and after giving effect to such Revolving Advance or Swing Line Advance
and to the application of the proceeds from such Revolving Advance or Swing Line
Advance, such Continuation or Conversion, or to the issuance, extension or
increase of such Letter of Credit, as applicable, as though made on, and as of
such date;
(b) no Default has occurred and is continuing or would result from such
Revolving Advance or Swing Line Advance or from the application of the proceeds
therefrom or from such issuance, extension or increase of such Letter of Credit;

 

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(c) the Borrowing Base Availability is greater than or equal to zero after
giving effect to such Borrowing or the issuance, increase, or extension of such
Letter of Credit;
(d) no material adverse change has occurred and is continuing with respect to
the Collateral detailed in the then current Borrowing Base Report; and
(e) in the case of making any Revolving Advances or Swing Line Advances, the
Borrowers shall have drawn in full the entire available amount under the Sowood
Documents before the date of such Revolving Advances or Swing Line Advances.
Section 3.03 Determinations Under Sections 3.01 and 3.02. For purposes of
determining compliance with the conditions specified in Sections 3.01 and 3.02,
each Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received written notice from such Lender prior to the
Borrowings hereunder specifying its objection thereto and such Lender shall not
have made available to the Administrative Agent such Lender’s ratable portion of
such Borrowings.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each Loan Party jointly and severally represents and warrants as follows:
Section 4.01 Existence; Subsidiaries. Each of the Loan Parties is (a) duly
formed, validly existing, and in good standing under the laws of the
jurisdiction of its formation, (b) duly qualified as a foreign entity and is
licensed and in good standing in each jurisdiction where its ownership, lease or
operation of Property or conduct of its business requires such qualification or
license other than such failures to so qualify that could not, individually or
in the aggregate reasonably be expected to have a Material Adverse Effect. Each
of the Loan Parties is licensed and in good standing to supply natural gas or
electricity or related products by each of the state public utility commissions
identified on Schedule 4.01, as the same may be updated from time to time.
Section 4.02 Power and Authority. Each of the Loan Parties has the requisite
power and authority and all requisite governmental licenses, authorizations,
consents and approvals to (a) own its assets and carry on its business,
including without limitation, to supply natural gas or electricity or related
products to End Users in each of the jurisdictions identified in Schedule 4.01,
and (b) execute, deliver and perform the Loan Documents to which it is a party
and to perform its obligations thereunder. The execution, delivery, and
performance by each Loan Party of this Agreement and the other Loan Documents to
which it is a party and the consummation of the transactions contemplated hereby
(a) have been duly authorized by all necessary organizational action, (b) do not
and will not (i) contravene the terms of any such Person’s organizational
documents, (ii) violate any material Legal Requirement, or (iii) conflict with
or result in any breach or contravention of, or the creation of any Lien under
(A) the provisions of any indenture, instrument or material agreement to which
such Loan Party is a party or is subject, or by which it, or its Property, is
bound or (B) any order, injunction, writ or decree of any Governmental Authority
or any arbitral award to which such Person or its property is subject.

 

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Section 4.03 Authorization and Approvals. No authorization, approval, consent,
exemption, or other action by, or notice to or filing with, any Governmental
Authority or any other Person is necessary or required on the part of any Loan
Party in connection with (a) the execution, delivery and performance by, or
enforcement against, any Loan Party of this Agreement and the other Loan
Documents to which it is a party or the consummation of the Transactions or the
transactions contemplated hereby or thereby, (b) the grant by any Loan Party of
the Liens granted by it pursuant to the Loan Documents, or (c) the perfection or
maintenance of the Liens created under the Loan Documents (including the first
priority nature thereof) (other than the filing of UCC-1 Financing Statements),
all of which have been duly obtained, taken, given or made and are in full force
and effect, except actions by, and notices to or filings with, Governmental
Authorities (including, without limitation, the SEC) that may be required in the
ordinary course of business from time to time or that may be required to comply
with the express requirements of the Loan Documents (including, without
limitation, to release existing Liens on the Collateral or to comply with
requirements to perfect, and/or maintain the perfection of, Liens created for
the benefit of the Secured Parties).
Section 4.04 Enforceable Obligations. This Agreement has been, and each other
Loan Document, when delivered hereunder, will have been, duly executed and
delivered by each Loan Party that is a party thereto. This Agreement
constitutes, and each other Loan Document when so delivered will constitute, a
legal, valid and binding obligation of such Loan Party, enforceable against each
Loan Party that is party thereto in accordance with its terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, or similar law affecting
creditors’ rights generally or general principles of equity.
Section 4.05 Financial Statements; No Material Adverse Effect.
(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present in all material respects the
financial condition of the Parent and its Subsidiaries as of the date thereof
and their results of operations for the period covered thereby in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (iii) show all material indebtedness and
other liabilities, direct or contingent, of the Parent and its Subsidiaries as
of the date thereof, including liabilities for taxes, material commitments and
Debt.
(b) The Projections have been prepared in good faith by the Parent, based on
assumptions believed by the Parent to be reasonable on the date hereof.
(c) Schedule 4.05 sets forth all material indebtedness and other liabilities,
direct or contingent, of the Parent and its Subsidiaries as of the date of such
financial statements, including liabilities for taxes, contingent liabilities
and Debt.

 

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(d) Since June 30, 2007, there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.
(e) The Borrowers are in compliance with the covenants set forth in
Sections 6.17 through 6.22 as of June 30, 2008 and July 31, 2008 based on the
draft financials ended June 30, 2008 and July 31, 2008.
Section 4.06 True and Complete Disclosure. As of the Closing Date, each Loan
Party has disclosed to the Administrative Agent and the Lenders all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. None of (a) the Confidential Information Memorandum or (b) any
other information, report, financial statement, exhibit or schedule furnished by
or on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto contained, contains or will contain any misstatement
of material fact or omitted, omits or will omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are or will be made, not misleading; provided that, with
respect to projected financial information, the Loan Parties represent only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
Section 4.07 Litigation. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of any Responsible Officer of a Loan Party
after due and diligent investigation, threatened or contemplated, at law, in
equity, in arbitration or before any Governmental Authority, by or against any
Loan Party or any of their Subsidiaries or against any of their properties or
revenues that (a) purport to affect or pertain to this Agreement or any other
Loan Document, or any of the transactions contemplated thereby, or (b) either
individually or in the aggregate, if determined adversely, could reasonably be
expected to have a Material Adverse Effect. No regulatory commission is
currently conducting and has conducted within the five-year period immediately
preceding the date hereof, an investigation of the Parent or any of its
Subsidiaries, other than an investigation conducted by such regulatory
commission in its routine general administrative practice.
Section 4.08 Compliance with Laws. None of the Loan Parties or any of the
Subsidiaries or any of the Loan Parties’ operation of their respective material
properties (a) is in violation of, nor will the continued operation by the Loan
Parties of their material properties as currently conducted violate, any Legal
Requirement (including any Environmental Law, but excluding any Legal
Requirement with respect to their ability to supply natural gas or electricity
or related products to End Users in each of the jurisdictions identified in
Schedule 4.01) the violation of which could reasonably be expected to have a
Material Adverse Effect, (b) is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority the default of which
could reasonably be expected to have a Material Adverse Effect, or (c) in
material violation of any Legal Requirement with respect to their ability to
supply natural gas or electricity or related products to End Users in each of
the jurisdictions identified in Schedule 4.01.

 

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Section 4.09 No Default. None of the Loan Parties or any of its Subsidiaries is
a party to any agreement or instrument or subject to any corporate restriction
that has resulted or could, either individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. None of the Parent or any of its
Subsidiaries is in default in any manner under any provision of any indenture or
other agreement or instrument evidencing Debt, any Material Contract or any
other material agreement or instrument to which it is a party or by which it or
any of its properties or assets are or may be bound, where such default could
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.
Section 4.10 Subsidiaries; Corporate Structure. Schedule 4.10 sets forth as of
the Closing Date a list of all Subsidiaries of the Parent and, as to each such
Subsidiary, the jurisdiction of formation and the outstanding Equity Interests
therein and the percentage of each class of such Equity Interests owned by the
Parent and the Subsidiaries. The Equity Interests indicated to be owned by the
Parent and the Subsidiaries on Schedule 4.10 are fully paid and non-assessable
and are owned by the persons indicated on such Schedule, free and clear of all
Liens (other than Permitted Liens).
Section 4.11 Condition of Properties.
(a) Each Loan Party has good record and marketable title in fee simple to, or
valid leasehold interests in, all real property necessary or used in the
ordinary conduct of its business, except for such minor defects in title that do
not materially interfere with its ability to conduct its business as currently
conducted or to utilize such properties and assets for their intended purposes.
None of the property of Loan Parties is subject to Liens, other than Permitted
Liens.
(b) Each Loan Party has complied in all material respects with all obligations
under all material leases to which it is a party and all such leases are in full
force and effect. Each Loan Party enjoys peaceful and undisturbed possession
under all such material leases.
(c) Neither the business nor the material Properties of any Loan Party has been
affected as a result of any fire, explosion, earthquake, flood, drought,
windstorm, accident, strike or other labor disturbance, embargo, requisition or
taking of Property or cancellation of contracts, permits or concessions by a
Governmental Authority, riot, activities of armed forces or acts of God or of
any public enemy.

 

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Section 4.12 Environmental Condition.
(a) Except as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, the Loan Parties (i) have obtained
all Environmental Permits necessary for the ownership and operation of their
respective material Properties and the conduct of their respective businesses;
(ii) have been and are in compliance with all terms and conditions of such
Environmental Permits and with all other requirements of applicable
Environmental Laws; (iii) have not received notice of any violation or alleged
violation of any Environmental Law or Environmental Permit; and (iv) are not
subject to any actual or contingent Environmental Claim.
(b) None of the present or previously owned or operated Properties of the Loan
Parties or of any of their present or former Subsidiaries, wherever located,
(i) has been placed on or proposed to be placed on the National Priorities List,
CERCLIS, or their state or local analogs, nor has the Parent or any of its
Subsidiaries been otherwise notified of the designation, listing or
identification of any Property of such Loan Party or any of its present or
former Subsidiaries as a potential site for removal, remediation, cleanup,
closure, restoration, reclamation, or other response activity under any
Environmental Laws (except as such activities may be required by permit
conditions); (ii) is subject to a Lien, arising under or in connection with any
Environmental Laws, that attaches to any revenues or to any Property owned or
operated by the Loan Parties or any of their present or former Subsidiaries,
wherever located; or (iii) has been the site of any Release (as defined under
any Environmental Law) of Hazardous Substances from present or past operations
which has caused at the site or at any third-party site any condition that has
resulted in or could reasonably be expected to result in the need for Response
(as defined under any Environmental Law) and none of the Loan Parties or any of
their present or former Subsidiaries has generated or transported or has caused
to be generated or transported Hazardous Substances to any third party site
which could reasonably be expected to result in the need for Response.
(c) Without limiting the foregoing, the present and future liability, if any, of
the Parent or any of its Subsidiaries, which could reasonably be expected to
arise in connection with requirements under Environmental Laws could not
reasonably be expected to have a Material Adverse Effect.
Section 4.13 Insurance.
(a) Schedule 4.13 sets forth a true, complete and correct description of all
insurance maintained by the Loan Parties as of the Closing Date. As of such
date, such insurance is in full force and effect and all premiums have been duly
paid.
(b) The properties of the Loan Parties are insured with financially sound and
reputable insurance companies not Affiliates of any Loan Party, in such amounts,
with such deductibles and covering such risks as are customarily carried by
companies engaged in similar businesses and owning similar properties in
localities where applicable Loan Party operates.

 

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Section 4.14 Taxes. Each Loan Party has filed all material Federal, state and
other tax returns and reports required to be filed, and have paid all material
Federal, state and other taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP. There is no written proposed tax assessment
against the Parent or any Subsidiary thereof that would, if made, have a
Material Adverse Effect.
Section 4.15 ERISA Compliance.
(a) Except as could not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect, the Parent and its ERISA Affiliates
is in compliance in all material respects with the applicable provisions of
ERISA and the Code and the regulations and published interpretations thereunder.
(b) Except as could not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect, each Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
Federal or state Laws. Each Plan that is intended to qualify under Section
401(a) of the Code has received a favorable determination letter from the IRS or
an application for such a letter is currently being processed by the IRS with
respect thereto and, to the best knowledge of the Parent, nothing has occurred
which would prevent, or cause the loss of, such qualification. The Parent and
each ERISA Affiliate have made all required contributions to each Plan subject
to Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code has
been made with respect to any Plan.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur that,
when taken together with all other such ERISA Events, could reasonably be
expected to result in material liability of the Parent or any of its ERISA
Affiliates; (ii) no Pension Plan has any Unfunded Pension Liability;
(iii) neither the Parent nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of
ERISA); (iv) neither the Parent nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer
Plan; and (v) neither the Parent nor any ERISA Affiliate has engaged in a
transaction that could be subject to Sections 4069 or 4212(c) of ERISA.
Section 4.16 Security Interests.
(a) The Pledge Agreement is effective to create in favor of the Administrative
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable security interest in the Collateral (as defined in such Pledge
Agreement) and, when such Collateral (to the extent such Collateral constitutes
a certificated security under the applicable Uniform Commercial Code) is
delivered to such Administrative Agent, such Pledge Agreement shall constitute a
fully perfected first priority Lien on, and security interest in, all right,
title and interest of the pledgors thereunder in such Collateral, in each case
prior and superior in right to any other person.

 

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(b) The Security Agreement is effective to create in favor of the Administrative
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable security interest in the Collateral (as defined in such Security
Agreement) and, when financing statements in appropriate form are filed in the
offices specified on Schedule 1 to the Security Agreement, such Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in such portion of the
Collateral in which a security interest may be perfected by the filing of a
financing statement under the applicable Uniform Commercial Code, in each case
prior and superior in right to any other person, other than Permitted Liens.
Section 4.17 Bank Accounts. Schedule 4.17 sets forth the account numbers and
locations of all bank accounts of the Loan Parties as of the Closing Date.
Section 4.18 Labor Relations. Except as could not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect, there
(a) is no unfair labor practice complaint pending against the Parent or any of
its Subsidiaries or, to the knowledge of any Responsible Officer of a Loan
Party, threatened against any of them, before the National Labor Relations Board
(or any successor United States federal agency that administers the National
Labor Relations Act), and no grievance or arbitration proceeding arising out of
or under any collective bargaining agreement is so pending against the Parent or
any of its Subsidiaries or, to the knowledge of any Responsible Officer of a
Loan Party, threatened against any of them, (b) are no strikes, lockouts,
slowdowns or stoppage against the Parent or any Subsidiary pending or, to the
knowledge of any Loan Party, threatened and (c) no union representation petition
existing with respect to the employees of the Parent or any of its Subsidiaries
and no union organizing activities are taking place. The hours worked by and
payments made to employees of the Parent and the Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable federal,
state, provincial, local or foreign law dealing with such matters, except where
such violation, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. All payments due from the Parent or
any Subsidiary, or for which any claim may be made against the Parent or any
Subsidiary, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of the
Parent or such Subsidiary, except where the failure to do the same, either
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. The consummation of the transactions contemplated
hereby will not give rise to any right of termination or right of renegotiation
on the part of any union under any collective bargaining agreement to which the
Parent or any Subsidiary is bound.
Section 4.19 Intellectual Property. Each Loan Party owns or is licensed or
otherwise has full legal right to use all of the patents, trademarks, service
marks, trade names, copyrights, franchises, authorizations and other rights that
are reasonably necessary for the operation of its business, without conflict
with the rights of any other Person with respect thereto that could reasonably
be expected to have a Material Adverse Effect.

 

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Section 4.20 Solvency. Immediately following the making of each Revolving
Advance and Swing Line Advance and after giving effect to the application of the
proceeds of each Revolving Advance and Swing Line Advance, (a) the fair value of
the assets of each of the Borrowers, Holdings and the Loan Parties, taken as a
whole, will exceed their respective debts and liabilities, subordinated,
contingent or otherwise; (b) the present fair saleable value of the property of
each of the Borrowers, Holdings and the Loan Parties, taken as a whole, will be
greater than the amount that will be required to pay the probable liability of
their respective debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured;
(c) each of the Borrowers, Holdings and the Loan Parties, taken as a whole, will
be able to pay their respective debts and liabilities, subordinated, contingent
or otherwise, as such debts and liabilities become absolute and matured; and
(d) each of the Borrowers, Holdings and the Loan Parties, taken as a whole, will
not have unreasonably small capital with which to conduct the business in which
they are engaged as such business is now conducted and is proposed to be
conducted following the Closing Date.
Section 4.21 Senior Indebtedness. The obligations of the Loan Parties hereunder
constitute senior indebtedness (however denominated) in respect of any
Subordinated Indebtedness of the Parent and its Subsidiaries.
Section 4.22 Margin Regulations. None of the Loan Parties is engaged and will
engage, principally or as one of its important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U), or
extending credit for the purpose of purchasing or carrying margin stock. No part
of the proceeds of any Revolving Advance or Swing Line Advance will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry any margin stock (within the meaning of
Regulation U) or to refinance any Debt originally incurred for such purpose, or
for any other purpose that entails a violation of, or that is inconsistent with,
the provisions of the Regulations of the Board, including Regulation T, U or X.
Section 4.23 Investment Company Act. None of the Parent, any Person Controlling
the Parent, or any Subsidiary is or is required to be registered as an
“investment company” under the Investment Company Act of 1940.
Section 4.24 Names and Locations. As of the Closing Date, Schedule 4.24 sets
forth (a) all legal names and all other names (including trade names, fictitious
names and business names) under which the Loan Parties currently conduct
business, or has at any time during the past five years conducted business,
(b) the name of any entity which any Loan Party has acquired in whole or in part
or from whom any Loan Party has acquired a significant amount of assets within
the past five years, (c) the state or other jurisdiction of organization or
incorporation for each Loan Party and sets forth each Loan Party’s
organizational identification number or specifically designates that one does
not exist, and (d) the location of all offices of the Loan Parties and the
locations of all inventory of the Borrowers and their Subsidiaries.
Section 4.25 Revisions or Updates to the Schedules. Should any of the
information or disclosures provided on Schedules 1.01(c), 4.01 or 4.24
originally attached hereto become outdated or incorrect in any material respect,
the Borrowers from time to time shall deliver to the Administrative Agent and
the Lenders such revisions or updates to such schedule(s) whereupon such
schedules shall be deemed to be amended by such revisions or updates, as may be
necessary or appropriate to update or correct such schedule(s), provided that,
notwithstanding the foregoing, no such revisions or updates shall be deemed to
have amended, modified, or superseded any such schedules as originally attached
hereto, or to have cured any breach of warranty or representation resulting from
the inaccuracy or incompleteness of any such schedules, unless and until the
Administrative Agent shall have accepted in writing such revisions or updates to
any such schedules.

 

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ARTICLE V
AFFIRMATIVE COVENANTS
So long as the Revolving Advances or Swing Line Advances or any amount under any
Loan Document shall remain unpaid, any Lender shall have any Revolving
Commitment hereunder, or there shall exist any Letter of Credit Exposure, unless
the Majority Lenders shall otherwise consent in writing, each Loan Party shall:
Section 5.01 Preservation of Existence, Etc. Except as permitted by Section
6.03, (a) preserve, renew and maintain in full force and effect its legal
existence and good standing under the Legal Requirements of the jurisdiction of
its formation, (b) in the case of the Borrowers and their Subsidiaries, be
licensed and in good standing to supply natural gas or electricity or related
products by each of the state public utility commissions identified on
Schedule 4.01 so long as the such Loan Party is still supplying natural gas or
electricity or related products in the relevant jurisdiction, (c) take all
reasonable action to obtain, preserve, renew, extend, maintain and keep in full
force and effect all rights, privileges, permits, licenses, authorizations and
franchises necessary or desirable in the normal conduct of its business,
including, in the case of the Borrowers and their Subsidiaries, those rights,
privileges, permits, licenses, authorizations and franchises necessary to supply
natural gas or electricity or related products to End Users in each of the
jurisdictions identified in Schedule 4.01 so long as the such Loan Party is
still supplying natural gas or electricity or related products in the relevant
jurisdiction, and (d) qualify and remain qualified as a foreign entity in each
jurisdiction in which qualification is necessary in view of its business and
operations or the ownership of its Properties other than such failures to so
qualify that could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
Section 5.02 Compliance with Laws, Etc. Comply (a) with all Legal Requirements
(including without limitation, all Environmental Laws and ERISA but excluding,
in the case of the Borrowers and their Subsidiaries, any Legal Requirement with
respect to their ability to supply natural gas or electricity or related
products to End Users in each of the jurisdictions identified in Schedule 4.01)
applicable to it or to its business or property, except in such instances in
which such Legal Requirement is being contested in good faith by appropriate
proceedings diligently conducted and for which the failure to so comply could
not reasonably be expected to have a Material Adverse Effect and (b) in all
material respects with, in the case of the Borrowers and their Subsidiaries, any
Legal Requirement with respect to their ability to supply natural gas or
electricity or related products to End Users in each of the jurisdictions
identified in Schedule 4.01.
Section 5.03 Maintenance of Property. (a) Maintain and preserve all Property
material to the conduct of its business and keep such Property in good repair,
working order and condition, (b) from time to time make, or cause to be made,
all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times and (c) use the
standard of care typical in the industry in the operation and maintenance of its
facilities.

 

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Section 5.04 Maintenance of Insurance.
(a) Maintain with financially sound and reputable insurance companies not
Affiliates of any Loan Party, insurance with respect to its Properties and
business, to the extent and against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts as are customarily carried under similar circumstances
by such other Persons and such other insurance as may be required by law.
(b) (i) Cause all such policies covering any Collateral to be endorsed or
otherwise amended to include a customary lender’s loss payable endorsement, in
form and substance reasonably satisfactory to the Administrative Agent, which
endorsement shall provide that, from and after the Closing Date, if the
insurance carrier shall have received written notice from the Administrative
Agent of the occurrence of an Event of Default, the insurance carrier shall pay
all proceeds otherwise payable to a Loan Party under such policies directly to
the Administrative Agent; (ii) deliver original or certified copies of all such
policies to the Administrative Agent; cause each such policy to provide that it
shall not be canceled, modified or not renewed upon not less than 30 days’ prior
written notice thereof by the insurer to the Administrative Agent; and
(iii) deliver to the Administrative Agent, prior to the cancellation,
modification or nonrenewal of any such policy of insurance, a copy of a renewal
or replacement policy (or other evidence of renewal of a policy previously
delivered to the Administrative Agent) together with evidence satisfactory to
the Administrative Agent of payment of the premium therefor.
Section 5.05 Payment of Taxes, Etc. Pay and discharge as the same shall become
due and payable, all its obligations and liabilities in accordance with their
terms, including (a) all material taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or in respect of its
Property, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the applicable Loan Party; (b) all lawful claims which,
if unpaid, might by law become a Lien upon its Property in violation of this
Agreement; and (c) all Debt, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Debt, including, without limitation, the Intercreditor Agreement.
Section 5.06 Reporting Requirements. Deliver to the Administrative Agent and
each Lender, in form and detail reasonably satisfactory to the Administrative
Agent and the Lenders:
(a) Audited Annual Financials. As soon as available and in any event not later
than 120 days after the end of each fiscal year of the Parent (beginning for the
fiscal year ending June 30, 2008), copies of (i) the audited consolidated and
unaudited consolidating balance sheets of the Parent and its Subsidiaries, in
each case, as at the end of such fiscal year, together with, in each case, the
related audited consolidated and unaudited consolidating statements of income or
operations, shareholders’ equity and cash flows for such fiscal year, and the
notes thereto, all in reasonable detail and setting forth in each case in
comparative form the audited consolidated figures as of the end of and for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP (subject only to normal year-end audit adjustments and the absence of
footnotes with respect to any consolidating statements) and (x) in the case of
each of such audited consolidated financial statements (excluding any statements
in comparative form to be corresponding figures from the consolidated budget),
accompanied by a report and opinion of an

 

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independent certified public accountant of nationally recognized standing
reasonably acceptable to the Lenders, which report and opinion shall be prepared
in accordance with generally accepted auditing standards and shall not be
subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit and shall state that
such consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Parent and its respective
Subsidiaries as at the end of such fiscal year and their consolidated results of
operations and cash flows for such fiscal year in conformity with GAAP; or words
substantially similar to the foregoing and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards, and (y) in the
case of such unaudited consolidating financial statements, certified by a
Financial Officer of the Parent that such financial statements have been
prepared in accordance with GAAP consistently applied and presents fairly, in
all material respects, the information contained therein as at the date and for
the periods covered thereby and (ii) the consolidated and consolidating
unaudited Non-GAAP Financial Reporting financial statements of the Parent and
its Subsidiaries for such fiscal year including a reconciliation to the GAAP
financial statements;
(b) Monthly Financials. As soon as available and in any event not later than
45 days after the end of each month (beginning with the month ending August 31,
2008), (i) a consolidated and, for the end of March, June, September, and
December, consolidating balance sheet of the Parent and its Subsidiaries as at
the end of such month, and the related consolidated and, for the end of March,
June, September, and December, consolidating statements of income or operations,
shareholders’ equity and cash flows for such month and for the portion of the
Parent’s fiscal year then ended, and setting forth in each case with respect to
such consolidated statements, in comparative form the consolidated figures for
the corresponding month of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail and certified by a
Financial Officer of the Parent as fairly presenting in all material respects
the financial condition, results of operations, shareholders’ equity and cash
flows of the Parent and its Subsidiaries in accordance with GAAP, subject only
to normal year-end audit adjustments and the absence of footnotes and (ii) the
Parent’s and its Subsidiaries’ consolidated and, for the end of March, June,
September, and December, consolidating Non-GAAP Financial Reporting financial
statements including a reconciliation with the GAAP financial statements
described in the foregoing clause (i) and a management discussion and analysis
of the financial results;
(c) Compliance Certificates. (i) Concurrently with the delivery of the financial
statements referred to in Section 5.06(a), a certificate of its independent
certified public accountants rendering the report thereon stating whether, in
connection with their audit examination, anything has come to their attention
which would cause them to believe that any Default or Event of Default with
respect to accounting matters existed on the date of such financial statements,
and if such a condition or event has come to their attention, specifying in
reasonable detail the nature and period, if known, of existence thereof and
(ii) concurrently with the delivery of the financial statements referred to in
Sections 5.06(a) and (b), a duly completed Compliance Certificate signed by a
Financial Officer of the Parent;

 

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(d) Management Letters. Promptly upon receipt thereof, copies of any detailed
audit reports, management letters and any reports as to material inadequacies in
accounting controls (including reports as to the absence of any such
inadequacies) or recommendations submitted to the board of directors (or the
audit committee of the board of directors) of the Parent by independent
accountants in connection with the accounts or books of the Parent or any
Subsidiary thereof, or any audit of any of them;
(e) Borrowing Base Reports. (i) Within seven Business Days after the fifteenth
and last Business Day of each calendar month, a Borrowing Base Report as of the
end of such applicable period, together with supporting documentation reasonably
acceptable to the Administrative Agent, including without limitation, aggregate
account receivable agings for each LDC and of End Users by LDC, accounts payable
agings, aggregate account receivables past due for each LDC and End Users by
LDC, a schedule of Imbalances and Eligible LDC Residual Contract Rights, copies
of all Imbalance statements from LDCs received since the delivery of the last
Borrowing Base Report, potential First Purchaser Liens, cash reconciliations, a
schedule of inventory balances, a schedule of any net mark to market gains or
losses with respect to Swap Contracts, and a listing of outstanding loans,
letters of credit and offset reconciliations, each in such reasonable detail and
in a format as the Administrative Agent may require and (ii) within 60 days
following the last day of each fiscal quarter, a Borrowing Base Report as of the
last day of such fiscal quarter, together with supporting documentation
reasonably acceptable to the Administrative Agent, setting forth (A) the actual
Borrowing Base as of the end of such fiscal quarter, (B) any significant
discrepancies in the Borrowing Base since the date of the Borrowing Base Report
delivered on the last day of such fiscal quarter and (C) a statement explaining
the reasons for any such discrepancies;
(f) Risk Management Policy Certification and Report. (i) Within seven Business
Days after the fifteenth and last Business Day of each calendar month, a
certificate in substantially the form of the attached Exhibit K from a
Responsible Officer of a Borrower certifying that the Borrowers are in
compliance with the Borrower’s Risk Management Policy; (ii) simultaneously with
any modification of the Risk Management Policy, a written notice with a
description of such modification, a copy of such modification, and, if the
Majority Lenders have not consented to such modification, a certification that
the modification does not materially change the Risk Management Policy; and
(iii) within seven Business Days after the last Business Day of each calendar
month, a monthly comprehensive risk management report in a format reasonably
acceptable to the Administrative Agent, setting forth the Borrowers’ overall
hedging positions, forward book, inventory positions, and transportation and
storage capacities;
(g) Marketing Report. Within seven Business Days after the last Business Day of
each calendar month, a monthly comprehensive marketing report detailing (i) the
Borrowers’ and their Subsidiaries’ acquisition of any new End User accounts by
LDC and by fixed or floating price contract and specifying the weighted average
costs for each new End User and whether such acquisitions were through organic
customer growth or acquisition from a third party and (ii) the natural gas and
electricity break even price for each LDC, all in a format reasonably acceptable
to the Administrative Agent;
(h) Securities Law Filings and other Public Information. Promptly after the same
are available, copies of each annual report, proxy or financial statement or
other report or communication sent to the stockholders of the Parent, and copies
of all annual, regular, periodic and special reports and registration statements
which the Parent may file or be required to file with the SEC under Section 13
or 15(d) of the Securities Exchange Act of 1934 or any other securities
Governmental Authority, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto;

 

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(i) USA Patriot Act. Promptly, following a request by any Lender, all
documentation and other information that such Lender reasonably requests in
order to comply with its ongoing obligations under applicable “know your
customer” and anti-money laundering rules and regulations, including the USA
Patriot Act; and
(j) Parent Guarantees. (i) With the delivery of the financial statements under
Section 5.01(b), a list of the Parent’s guarantees of obligations of its
Subsidiaries, including the name of each beneficiary and the maximum amount
guaranteed, and (ii) promptly, and in any event with five Business Days after
receipt thereof, any notice of default or claim delivered under any such
guarantees; and
(k) Other Information. Such other information respecting the business,
Properties or Collateral, or the condition or operations, financial or
otherwise, of the Parent and its Subsidiaries as the Administrative Agent or any
Lender may from time to time reasonably request.
Section 5.07 Other Notices. Deliver to the Administrative Agent and each Lender
prompt written notice of the following:
(a) Defaults. The occurrence of any Default or Event of Default or any other
Debt of any Loan Party being declared when due and payable before its expressed
maturity, or any holder of such Debt having the right to declare such Debt due
and payable before its expressed maturity, because of the occurrence of any
default (or any event which, with notice and/or the lapse of time, shall
constitute any default) under such Debt;
(b) Litigation. The filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or proceeding,
whether at law or in equity or by or before any Governmental Authority, against
the Parent, any Subsidiary or any Affiliate thereof, or any material development
in any such action, suit, proceeding, that, in either case, could reasonably be
expected to result in a Material Adverse Effect; and
(c) ERISA Events. The occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Loan Parties in an aggregate amount exceeding
$500,000.00;
(d) Environmental Notices. A copy of any form of notice, summons, material
correspondence or citation received from any Governmental Authority or any other
Person, concerning (i) material violations or alleged violations of
Environmental Laws, which seeks or threatens to impose liability therefor,
(ii) any material action or omission on the part of the Parent or any of its
Subsidiaries in connection with Hazardous Material, (iii) any notice of
potential responsibility or liability under any Environmental Law, or
(iv) concerning the filing of a Lien other than a Permitted Lien upon, against
or in connection with the Parent or any of its Subsidiaries, or any of their
leased or owned material Property, wherever located;

 

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(e) Collateral. Furnish to the Administrative Agent:
(i) written notice of:
(A) any change of its legal name, corporate structure, jurisdiction of
organization or formation or its organizational identification number within
30 days before the occurrence thereof;
(B) an Asset Disposition within 30 days before the occurrence thereof;
(C) a casualty or condemnation with respect to any portion of Collateral with a
market value in excess of $500,000.00 promptly and in any event within five
Business Days after the occurrence thereof;
(D) an account in excess of $250,000.00 or accounts in excess of $500,000.00 in
the aggregate becoming subject to any dispute or claim or other circumstances
known to any Loan Party that may materially impair the validity or
collectibility of such accounts promptly and in any event within five Business
Days after the occurrence thereof;
(E) any material correspondence received by any Loan Party from any insurer with
respect to any insurance maintained in accordance with Section 5.04 promptly and
in any event with five Business Days after the receipt thereof;
(F) a Borrower or any of its Subsidiaries holding or obtaining any (1) Chattel
Paper, (2) Instrument, or (3) Letter of Credit, each in excess of $250,000.00
individually and $500,000.00 in the aggregate promptly and in any event with two
Business Days after the receipt thereof;
(G) Collateral with an aggregate value in excess of $500,000.00 at any time
being in the possession or control of any warehouse or bailee not previously
disclosed promptly and in any event within 10 Business Days before the
occurrence thereof;
(H) Collateral with an aggregate value in excess of $500,000.00 being of a type
where a Lien may be registered, recorded or filed under, or notice thereof given
under, any federal statute or regulation or any material Collateral constitutes
a claim against the United States of America, or any State or municipal
government or any department, instrumentality or agency thereof, the assignment
of which claim is restricted by law promptly and in any event within five
Business Days of the existence thereof;
(I) a new LDC with which a Borrower or any of its Subsidiaries has entered into
any agreement and a copy of all such agreements within five Business Days after
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(J) any notice received from an LDC of default or claim under any agreement
between a Borrower or any of its Subsidiaries and such LDC promptly and in any
event within two Business Days after the receipt thereof and
(ii) from time to time upon request, statements and schedules further
identifying, updating, and describing the Collateral and such other information,
reports and evidence concerning the Collateral, as Collateral Agent may
reasonably request, all in reasonable detail;
(f) Casualties and Takings. Any actual or constructive loss by reason of fire,
explosion, theft or other casualty, of any Property of any Loan Party or any
taking of title to, or the use of, any Property of any Loan Party pursuant to
eminent domain or condemnation proceedings or any settlement or compromise
thereof, in each case, with a value equal to or greater than $1,000,000.00, and
a certificate of a Responsible Officer of the Borrowers describing the nature
and status of such occurrence;
(g) Material Contracts. Prompt written notice of (i) any nonrenewal of the
initial term or any renewal term under any Material Contract, (ii) any event or
condition which results in, or could be expected to result in, an early
termination or cancellation of any Material Contract, and (iii) any default by a
Borrower or, to the knowledge of a Borrower, any other Person party to any
Material Contract; and
(h) Material Changes. Any development that has resulted in, or could reasonably
be expected to result in, a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrowers setting forth details of the occurrence
referred to therein and stating what action the Borrowers have taken and propose
to take with respect thereto. Each notice pursuant to Section 5.07(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.
Section 5.08 Books and Records; Inspection. (a) Keep proper records and books of
account in which full, true and correct entries will be made in accordance with
GAAP and all Legal Requirements, reflecting all financial transactions and
matters involving the assets and business of the Loan Parties and their
Subsidiaries; (b) maintain such books and records of account in material
conformity with all applicable requirements of any Governmental Authority having
regulatory jurisdiction over the Loan Parties and their Subsidiaries, as the
case may be; (c) from time-to-time during regular business hours upon reasonable
prior notice to the applicable Loan Party or Subsidiary, permit representatives
and independent contractors of the Administrative Agent and each Lender, for
purposes of performing a Collateral field examination, (i) to visit and inspect
any of its Properties, (ii) to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom and (iii) to discuss its
affairs, finances and accounts with its directors, officers, and independent
public accountants, all at the expense of the Borrowers and at such reasonable
times during normal business hours and as often as may be reasonably desired,
(d) permit the Administrative Agent, upon request, to conduct, or hire a third
party to conduct, on behalf of the Secured Parties, a review of position reports
and Risk Management Policies of the Borrowers and their Subsidiaries, and
(e) within 180 days after the Closing, permit the Administrative Agent or its
designee to perform, on behalf of the Secured Parties and at the expense of the
Borrowers, one assessment of the Borrowers’ procedures, policies and systems
relating to the Risk Management Policy. Unless a Default has occurred and is
continuing, the Collateral field exams shall be performed no more often than on
a semi-annual basis commencing on the date three months following the Closing
Date at the Borrowers’ expense. Any additional Collateral field examinations
shall be at the Lenders’ expense unless a Default has occurred and is continuing
at the time of such review.

 

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Section 5.09 Use of Proceeds. Use the proceeds of the Revolving Advances, the
Swing Line Advances, and Letters of Credit only for working capital purposes,
including the purchase and sale of natural gas or electricity, including to
facilitate the Borrowers’ and their Subsidiaries’ purchase, transportation,
storage and sale of natural gas or electricity, for Swap Contracts related to
hedging of natural gas or electricity, for margin financing of natural gas or
electricity.
Section 5.10 Nature of Business. Maintain and operate such business in
substantially the manner in which it is presently conducted and operated.
Section 5.11 Risk Management Policy. Comply with the Risk Management Policy
delivered on the Closing Date and any amendments to such Risk Management Policy.
Section 5.12 Additional Guarantors. Notify the Administrative Agent at the time
that any Person becomes a Subsidiary of the Parent, and promptly thereafter (and
in any event within 30 days), (a) cause such Person to (i) become a Guarantor by
executing and delivering to the Administrative Agent a counterpart of the
Guaranty or such other document as the Administrative Agent shall deem
appropriate for such purpose, (ii) deliver to the Administrative Agent documents
of the types referred to in clauses Section 3.01(a)(viii), (ix) and (x) and
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to in clause (i)), all in form, content and scope
reasonably satisfactory to the Administrative Agent and (iii) execute such other
Security Documents as the Administrative Agent or any Lender may reasonably
request, in each case to secure the Obligations and (b) cause the stockholder of
such Person to execute a Pledge Agreement pledging 100% of its interests in the
Equity Interest of such Person to secure the Obligations and such evidence of
corporate authority to enter into and such legal opinions in relation to such
Pledge Agreement as the Administrative Agent may reasonably request, along with
share certificates pledged thereby and appropriately executed stock powers in
blank; provided that, no new Subsidiary that is a controlled foreign corporation
under Section 957 of the Code shall be required to become a Guarantor or enter
into any Security Documents if such Guaranty or the entering into of such
Security Documents would reasonably be expected to result in any material
incremental income tax liability and the Parent or any Subsidiary domiciled in
the United States that is an equity holder of a controlled foreign corporation
under Section 957 of the Code shall only be required to pledge 65% of the Equity
Interest of such controlled foreign corporation pursuant to the applicable
Pledge Agreement.

 

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Section 5.13 Additional Collateral Requirements.
(a) Accounts. At their own expense, use its reasonable efforts to assure prompt
payment of all amounts due or to become due under accounts;
(b) Deposit Accounts. Establish lockboxes and blocked accounts (collectively,
“Blocked Accounts”) in the name of a Borrower or any of its Subsidiaries with
such banks (“Collecting Banks”) as are reasonably acceptable to the
Administrative Agent (subject to irrevocable instructions acceptable to
Administrative Agent as hereinafter set forth) or with the Administrative Agent
and all invoices evidencing accounts (other than accounts payable to an LDC)
shall bear a notice that such invoices are payable to such Blocked Accounts and
in which a Borrower or one of its Subsidiaries, as applicable, and each LDC will
immediately deposit all payments made for inventory or other payments
constituting proceeds of Collateral, in the case of the Borrowers and their
Subsidiaries, in the identical form in which such payment was made, whether by
cash or check. The Collecting Banks shall acknowledge and agree, pursuant to an
Account Control Agreement, that all payments made to the Blocked Accounts are
for the benefit of the Administrative Agent and the Secured Parties, and that
the Collecting Banks have no right to setoff against the Blocked Accounts, other
than for customary charges of the Collecting Bank for depositary services. Upon
the occurrence and continuance of an Event of Default, each Borrower and each
Subsidiary shall irrevocably instruct each Collecting Bank to promptly transfer
all payments or deposits (with certain exceptions as agreed to by the
Administrative Agent) into the Blocked Accounts into the Administrative Agent’s
Account on each Business Day. If any Loan Party shall receive any monies,
checks, notes, drafts or any other payments relating to and/or proceeds of
accounts or other Collateral, such Person shall hold such instrument or funds in
trust for the Administrative Agent, and, immediately upon receipt thereof, shall
remit the same or cause the same to be remitted, in kind, to the Blocked
Accounts or after the occurrence and continuance of an Event of Default, to the
Administrative Agent at its address set forth in Section 10.02 below.
Section 5.14 Further Assurances in General. Execute any and all further
documents, financing statements, agreements and instruments, and take all such
further actions (including the filing and recording of financing or continuation
statements or amendments thereto (or similar documents required by any laws of
any applicable jurisdiction)), which may be required under any Legal
Requirement, or which the Administrative Agent or the Majority Lenders may
reasonably request, all at the expense of the Borrowers. Each Borrower also
agrees to provide to the Administrative Agent, from time to time upon request,
evidence reasonably satisfactory to the Administrative Agent as to the
perfection and priority of the Liens created or intended to be created by the
Security Documents. Each Borrower agrees not to effect or permit any change
referred to in Section 5.07(e)(i)(A) unless all filings have been made under the
Uniform Commercial Code or otherwise that are required in order for the
Administrative Agent to continue at all times following such change to have, and
each Loan Party agrees to take all necessary action to ensure that the
Administrative Agent does continue at all times to have, a valid, legal and
perfected security interest in all the Collateral. Each Borrower also agrees
promptly to notify the Administrative Agent if any material portion of the
Collateral is damaged or destroyed.
Section 5.15 Secured Counterparty Guaranty Maintain in full force for any
Secured Counterparty without an Investment Grade Rating, a Secured Counterparty
Parent Guaranty or Acceptable Credit Support.
Section 5.16 Borrowing Base Draw down the entire available amount under the
Sowood Documents if at any time the Borrowing Base Availability is less than
$10,000,000.
Section 5.17 Sowood Borrowing Draw down the entire available amount under the
Sowood Documents on or before November 7, 2008.

 

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ARTICLE VI
NEGATIVE COVENANTS
So long as the Revolving Advances or the Swing Line Advances or any amount under
any Loan Document shall remain unpaid, any Lender shall have any Revolving
Commitment, or there shall exist any Letter of Credit Exposure, unless the
Majority Lenders otherwise consent in writing, no Loan Party shall:
Section 6.01 Liens, Etc. Create, assume, incur or suffer to exist, any Lien on
or in respect of any of its Property whether now owned or hereafter acquired,
other than the following (“Permitted Liens”):
(a) Liens pursuant to any Loan Document;
(b) Excepted Liens;
(c) Liens existing on the Closing Date and described in Schedule 6.01; provided
that such Liens shall secure only those obligations which they secure on the
date hereof and extensions, renewals and replacements thereof permitted
hereunder;
(d) Liens arising out of judgments or awards in respect of which the Parent or
any of the Subsidiaries shall in good faith be prosecuting an appeal or
proceedings for review in respect of which there shall be secured a subsisting
stay of execution pending such appeal or proceedings; provided that the
aggregate amount of all such judgments or awards (and any cash and the fair
market value of any property subject to such Liens) does not exceed $500,000.00
at any time outstanding;
(e) Liens securing Debt permitted under Section 6.02(e)(i) and purchase money
security interests securing Debt permitted under Section 6.02(e)(ii) in any
fixed or capital assets and improvements thereto or equipment hereafter acquired
(or, in the case of improvements, constructed) by the Parent or any of its
Subsidiaries; provided that (i) such Liens do not at any time encumber any
property other than the property financed by such Debt and the Proceeds thereof,
(ii) the Debt secured thereby does not exceed the lesser of the cost or fair
market value of the property being acquired or financed on the date of
acquisition or financing, and (iii) in the case of purchase money security
interests, such security interests are created within 120 days after such
acquisition (or completion of such improvements);
(f) rights of set-off of banks and other Persons in the ordinary course of
banking and trading arrangements;
(g) Liens in favor of the Secured Counterparties (as defined in the
Intercreditor Agreement) and Sowood which are subject to the Intercreditor
Agreement;

 

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(h) security interests (i) in inventory held by and granted to an LDC in the
ordinary course of business and (ii) in accounts purchased and collected by and
granted to an LDC that has agreed to make payment to the Borrowers or one of
their Subsidiaries for such accounts in the ordinary course of business; and
(i) other Liens securing obligations, actual or contingent, in an aggregate
amount not greater than $200,000.00 at any time.
Section 6.02 Debts, Guaranties and Other Obligations. Create, assume, suffer to
exist or in any manner become or be liable, in respect of any Debt except:
(a) Debt under the Loan Documents;
(b) (i) Debt existing on the Closing Date and described in Schedule 6.02, Debt
under the Sowood Documents, Debt under the Senior Notes and (ii) any
refinancings, extensions, renewals or replacements of such Debt to the extent
the principal amount of such Debt is not increased (it being understood that any
accrued but unpaid fees or interest added to any principal amount shall not
constitute an increase of such Debt for these purposes), neither the final
maturity nor the weighted average life to maturity of such Debt is decreased,
such Debt, if subordinated to the obligations of a Loan Party hereunder, remains
so subordinated on terms (in their entirety) no less favorable to the Lenders
and no more restrictive on the Loan Parties than the Subordinated Indebtedness
being refinanced;
(c) Debt of the Borrowers to Guarantors, and of Guarantors to the Borrowers or
other Guarantors; provided that (i) such Debt is subordinated to the Obligations
pursuant to a subordination agreement in form and substance reasonably
acceptable to the Administrative Agent; and (ii) any such loans and advances
made by a Loan Party shall be evidenced by a promissory note pledged to the
Administrative Agent for the ratable benefit of the Secured Parties;
(d) Guarantees of the Parent or any Wholly-Owned Subsidiary in respect of Debt
or other obligations otherwise permitted hereunder of the Parent or any
Wholly-Owned Subsidiary;
(e) (i) Debt incurred to finance the acquisition, construction or improvement of
any fixed or capital assets and (ii) Debt in respect of Capital Leases and
Synthetic Lease Obligations and extensions, renewals and replacements of any
such Debt that do not increase the outstanding principal amount thereof;
provided that (i) in the case of Debt to finance the acquisition, construction
or improvements of fixed or capital assets, such Debt is incurred prior to or
within 120 days after such acquisition or the completion of such construction or
improvement and (ii) the aggregate principal amount of Debt permitted by this
paragraph shall not exceed $4,000,000.00 at any time outstanding;
(f) obligations (contingent or otherwise) of any Borrower or any Wholly-Owned
Subsidiary existing or arising under any Swap Contract, provided that such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person, and not for purposes of speculation or taking a “market view”; and

 

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(g) unsecured Debt in an aggregate principal amount not to exceed $2,000,000.00
at any time outstanding.
Section 6.03 Merger or Consolidation. Merge, dissolve, liquidate, consolidate
with or into another Person, or Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default exists or would result therefrom:
(a) any Subsidiary may merge with (i) a Borrower or the Parent, provided that
such Borrower or the Parent, as the case may be, shall be the continuing or
surviving Person, or (ii) any one or more other Wholly-Owned Subsidiaries,
provided that when any Guarantor is merging with another Wholly-Owned
Subsidiary, the Guarantor shall be the continuing or surviving Person and when
any Wholly-Owned Subsidiary is merging with another Subsidiary, the Wholly-Owned
Subsidiary shall be the continuing or surviving Person; and
(b) any Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Parent, any Borrower or to another
Wholly-Owned Subsidiary; provided that if the transferor in such a transaction
is a Guarantor, then the transferee must either be a Borrower or a Guarantor.
Section 6.04 Asset Sales. Make any Asset Disposition or enter into any agreement
to make any Asset Disposition, except:
(a) Asset Dispositions of equipment or real property to the extent that
(i) Asset Disposition is in the ordinary course of business and (ii) (x) such
property is exchanged for credit against the purchase price of similar
replacement property or (y) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
(b) Asset Dispositions of property by the Parent or any Wholly-Owned Subsidiary
to the Parent or to a Wholly-Owned Subsidiary in the ordinary course of
business; provided that if the transferor of such property is a Guarantor, the
transferee thereof must either be a Borrower or a Guarantor; and
(c) Asset Dispositions by the Parent and its Wholly-Owned Subsidiaries to any
Person that is not a Loan Party or a Subsidiary of any Loan Party not otherwise
permitted under this Section 6.04; provided that (i) at the time of such
Disposition, no Default or Event of Default shall exist or would result from
such Disposition and (ii) the aggregate book value of all property Disposed of
in reliance on this clause (c) in any fiscal year shall not exceed $1,000,000.00
(or the equivalent in any other currency); and
(d) Asset Dispositions permitted by Section 6.03, Investments permitted by
Section 6.05 and Restricted Payments permitted by Section 6.06.

 

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Section 6.05 Investments and Acquisitions. Make any Investments or Acquisitions
except:
(a) Investments held by any Loan Party in the form of Cash Equivalents;
(b) Existing Investments in Subsidiaries and other Investments in existence on
the Closing Date and described in Schedule 6.05;
(c) advances to officers, directors and employees of the Parent and Wholly-Owned
Subsidiaries in an aggregate amount not to exceed $500,000.00 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
(d) Investments of a Loan Party in another Loan Party;
(e) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;
(f) Guarantees permitted by Section 6.02;
(g) Investments in newly-formed Subsidiaries that become Guarantors pursuant to
Section 5.10;
(h) Investments under Swap Contracts permitted under Section 6.02(g);
(i) Acquisition of certain customer accounts from (a) Commerce Energy, Inc. and
(b) Catalyst Natural Gas, LLC, which acquisitions shall not exceed $100,000.00
in the aggregate so long as both before and after giving effect to such
acquisition, no Default or Event of Default exists or will exist or would result
therefrom; and
(j) other Investments not exceeding $1,000,000.00 in the aggregate in any fiscal
year of the Parent.
Section 6.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment or defease, redeem, repurchase, retire or acquire the notes
issued under the Senior Notes or incur any obligation (contingent or otherwise)
to do so, except that:
(a) each Wholly-Owned Subsidiary of the Parent may make Restricted Payments to
any other Wholly-Owned Subsidiary or the Parent;
(b) the Parent may declare and make dividend payments or other distributions
payable to the holders of its Equity Interests solely in the common stock or
other common equity interests of such Person;
(c) the Parent may (i) purchase, redeem or otherwise acquire shares of its
common stock or other common equity interests or warrants or options to acquire
any such shares held by any current or former officer, director or employee (or
their assigns, heirs or estates); provided that the aggregate price paid for all
such purchases, redemptions or acquisitions shall not exceed $2,000,000.00 in
any twelve month period and (ii) repurchase Equity Interests deemed to occur
upon the exercise of stock options or warrants to the extent such Equity
Interests represent a portion of the exercise price of those options or warrants
or corresponding statutory withholding taxes due in connection with such
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(d) the Parent may purchase, redeem or otherwise acquire shares of its stock or
other equity interests or warrants or options to acquire any such shares with
the proceeds received from the substantially concurrent issue of new shares of
its stock or other equity interests;
(e) any Loan Party may defease, redeem, repurchase, retire or acquire
Subordinated Indebtedness or the Senior Notes (i) with the net cash proceeds
from a substantially concurrent incurrence of Debt permitted by Section 6.02(b)
(other than Debt incurred under the Sowood Documents), (ii) with the net
proceeds from the issuance of Equity Interests, or (iii) in the case of the
Senior Notes, for an amount not to exceed $12,006,000, so long as the purchase
price therefor is equal to 100% or less of their par value and paid with cash on
hand of any Loan Party;
(f) the Parent or any of its Subsidiaries may pay management, consulting,
advisory fees, and other transactions fees to (i) Greenhill Capital Partners
pursuant to the agreements listed on the attached Schedule 6.08 in the amounts
set forth in such agreements and (ii) its Affiliates in the ordinary course of
business not to exceed $500,000.00 (not including legal fees and expenses) in
any fiscal year; and
(g) any payments permitted under Section 6.14 may be made.
Section 6.07 Change in Nature of Business. Engage in any line of business
substantially different from those lines of business conducted by the Parent and
its Subsidiaries on the date hereof or any business substantially related or
incidental thereto.
Section 6.08 Transactions With Affiliates. Enter into any transaction of any
kind with any Affiliate of the Parent, whether or not in the ordinary course of
business, including, without limitation, any payment by the Parent or any of its
Wholly-Owned Subsidiaries of any management, consulting or similar fees to any
Affiliate, whether pursuant to a management agreement or otherwise, other than
on fair and reasonable terms substantially as favorable or more favorable to the
Parent or such Subsidiary as would be obtainable by the Parent or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate, other than (a) transactions between Loan Parties,
(b) employment agreements entered into the ordinary course of business, (c) the
issuance of equity securities, (d) Restricted Payments and Investments permitted
by this Agreement, (e) otherwise expressly provided for in this Agreement, or
(f) pursuant to arrangements existing on the date hereof and set forth on
Schedule 6.08.
Section 6.09 Agreements Restricting Liens and Distributions. Create or otherwise
cause or suffer to exist any prohibition, encumbrance or restriction which
prohibits or otherwise (a) restricts the ability (i) of any Subsidiary to make
Restricted Payments to any Loan Party or to otherwise transfer property to any
Loan Party, (ii) of any Subsidiary to Guarantee the Debt of any Loan Party, or
(iii) of the Parent or any Subsidiary to create, incur, assume or suffer to
exist Liens on property of such Person; provided, however, that the preceding
restrictions shall not apply to prohibitions, encumbrances or restrictions under
or by reason of: (A) agreements or instruments governing Debt set forth on
Schedule 6.09 and any amendments or other modifications thereto (including any
refinancing thereof); provided that such amendments or modifications are no more
restrictive, taken as a whole, with respect to such prohibition, encumbrance or
restriction than those contained in those agreements as in effect on the Closing
Date, (B) applicable law, rule, regulation or order, (C) customary
non-assignment provisions in contracts, leases, real property licenses entered
into in the ordinary course of business or (D) (with respect to clause
(iii) only), any negative pledge incurred or provided in favor of any holder of
Debt permitted under Section 6.02(e) solely to the extent any such negative
pledge relates to the Property financed by or the subject of such Debt; or
(b) requires the grant of a Lien to secure an obligation of such Person if a
Lien is granted to secure another obligation of such Person.

 

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Section 6.10 Limitation on Accounting Changes or Changes in Fiscal Periods.
Permit (a) any change in any of its accounting policies affecting the
presentation of financial statements or reporting practices, except as required
or permitted by GAAP or (b) the fiscal year of the Parent or any of its
Subsidiaries to end on a day other than June 30 or change the Parent’s method of
determining fiscal quarters.
Section 6.11 Limitation on Speculative Hedging. (a) Purchase, assume, or hold a
speculative position in any commodities market or futures market or enter into
any Swap Contract for speculative purposes, (b) be party to or otherwise enter
into any Swap Contract which (i) is entered into for reasons other than as a
part of its normal business operations as a risk management strategy and/or
hedge against changes resulting from market conditions related to the Borrowers’
or their Subsidiaries’ operations, (ii) is longer than three years in duration,
or (iii) obligates any Loan Party to any margin call requirements not permitted
under this Agreement, or (c) materially change its Risk Management Policy
without the Majority Lenders’ prior written consent.
Section 6.12 Operating Leases. Enter into or remain liable upon any Operating
Lease, except for Operating Leases which have Operating Lease Obligations of not
more than $2,000,000.00 at any one time outstanding.
Section 6.13 Sale and Leaseback Transactions and other Off-Balance Sheet
Liabilities. Enter into or suffer to exist any (a) Sale and Leaseback
Transaction or (b) any other transaction pursuant to which it incurs or has
incurred Off-Balance Sheet Liabilities, except for Swap Contracts permitted to
be incurred under the terms of Section 6.02.
Section 6.14 Subordinated Debt. Except as expressly permitted in Section 2 of
the Intercreditor Agreement: (a) make any optional, mandatory or scheduled
payments on account of principal or interest (whether by redemption, purchase,
retirement, defeasance, set-off or otherwise) in respect of Subordinated
Indebtedness; or (b) permit any waiver, supplement, modification, amendment,
termination or release of any indenture, instrument or agreement pursuant to
which any Subordinated Indebtedness is outstanding if such waiver, supplement,
modification, amendment, termination or release would (i) increase the maximum
principal amount of such Subordinated Indebtedness or the ordinary interest rate
or the default interest rate on such Subordinated Indebtedness; (ii) change the
dates upon which payments of principal or interest are due on such Subordinated
Indebtedness; (iii) change any event of default or add any covenant with respect
to such Subordinated Indebtedness; (iv) change the payment, redemption or
prepayment provisions of such Subordinated Indebtedness; (v) change the
subordination provisions thereof; or (vi) change or amend any other term if such
change or amendment would materially increase the obligations of the obligor or
confer additional material rights on the holder of such Subordinated
Indebtedness in a manner adverse to any Loan Party or any Secured Party.

 

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Section 6.15 Amendment of Material Contracts. Amend, modify or supplement any
Material Contract, including, the Secured Counterparty Contracts, and the Senior
Notes, if such amendment, modification or supplement would materially increase
the obligations of the obligor or be materially adverse to the interests of any
Loan Party or any Secured Party.
Section 6.16 Capital Expenditures. Make or become legally obligated to make any
Capital Expenditure in respect of the purchase or other acquisition of any fixed
or capital asset (excluding normal replacements and maintenance which are
properly charged to current operations but including Acquisitions), except for
Capital Expenditures in the ordinary course of business not exceeding in the
aggregate for the Parent and its Subsidiaries $3,000,000.00 for each fiscal
year; provided, however that the amount of permitted Capital Expenditures in
respect of any fiscal year commencing with the fiscal year ending on June 30,
2009, shall be increased by the unused amount of permitted Capital Expenditures
for the immediately preceding fiscal year (and in determining any such unused
amount, Capital Expenditures during any fiscal year will be applied first
against any amounts carried forward from the prior year).
Section 6.17 Minimum Consolidated Tangible Net Worth. Permit Consolidated
Tangible Net Worth at any time to be less than the sum of (a) $30,000,000.00
plus (b) an amount equal to 50% of the sum of (i) the positive year-to-date
Consolidated Net Income (plus, to the extent deducted from Consolidated Net
Income, non-cash compensation expenses) through such date and (ii) other than
for the then current fiscal year, the positive Consolidated Net Income (plus, to
the extent deducted from Consolidated Net Income, non-cash compensation
expenses) for each full fiscal year ending on and after June 30, 2007 plus
(c) an amount equal to 100% of the net proceeds from any equity issued by the
Parent.
Section 6.18 Minimum Consolidated Working Capital. Permit the Consolidated
Working Capital at any time to be less than $138,500,000; provided that (a) such
amount shall be reduced on a dollar for dollar basis by (i) the purchase price
paid for the redemption of the Senior Notes permitted under Section 6.06(e)(iii)
and (ii) any repayment of all or any portion of the principal outstanding under
the Sowood Documents on or after December 17, 2007, and (b) such amount shall be
increased on a dollar for dollar basis by any advances made under the Sowood
Documents on or after December 17, 2007.
Section 6.19 Maximum Aggregate Negative EBITDA. Permit the negative Consolidated
EBITDA to be less than ($2,000,000.00) during any consecutive three-month period
beginning with the first full month before any day on which the Borrowing Base
Availability is less than $30,000,000.00 and continuing for each three-month
period thereafter until the Borrowing Base Availability is more than
$30,000,000.00 for three consecutive months.
Section 6.20 Interest Coverage Ratio. Permit, as of last day of any month
occurring during any period set forth below, the ratio of Consolidated EBITDA
for the twelve months then ending to Consolidated Interest Expense for such
period set forth below to be less than the ratio set forth below opposite such
period:

          Period   Interest Coverage Ratio  
 
       
Through August 31, 2008
    1.40 to 1.00  
 
       
From September 1, 2008 through the Maturity Date
    1.60 to 1.00  

 

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Section 6.21 Average Leverage Ratio. Permit the Leverage Ratio at any time
during the relevant period set forth below to be greater than the ratio set
forth below opposite such period:

              Maximum   Relevant Period   Leverage Ratio  
 
       
Through August 31, 2008
    4.75 to 1.00  
 
       
From September 1, 2008 through September 30, 2008
    4.50 to 1.00  
 
       
From October 1, 2008 through January 31, 2009
    4.00 to 1.00  
 
       
From February 1, 2009 through the Maturity Date
    3.75 to 1.00  

Section 6.22 Monthly Leverage Ratio. Permit the Leverage Ratio at any time at
the end of each month to be greater than 4.50 to 1.00.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 Events of Default. The occurrence of any of the following events
shall constitute an “Event of Default” under any Loan Document:
(a) Payment. Any Borrower shall fail to pay (i) any principal of any Revolving
Advance or Swing Line Advance (including, without limitation, any mandatory
prepayment required by Section 2.07) or reimburse any drawing under any Letter
of Credit when the same becomes due and payable, or (ii) any interest on the
Revolving Advances or Swing Line Advances, any fees, reimbursements,
indemnifications, or other amounts payable in connection with the Obligations,
this Agreement or under any other Loan Document within three Business Days after
the same becomes due and payable;

 

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(b) Representation and Warranties. Any representation or statement made or
deemed to be made by any Borrower or any other Loan Party (or any of their
respective officers) in this Agreement, in any other Loan Document, or in
connection with this Agreement or any other Loan Document shall prove to have
been incorrect in any material respect when made or deemed to be made;
(c) Covenant Breaches. Any Loan Party shall (i) fail to perform or observe any
covenant contained in Sections 5.01, 5.07(a), 5.09, 5.11, and 5.12 and
Article VI of this Agreement (provided that, with respect to Section 6.23 only,
such failure shall remain unremedied for 15 days) or (ii) fail to perform or
observe any other term or covenant set forth in this Agreement or in any other
Loan Document which is not covered by clause (i) above or any other provision of
this Section 7.01 if such failure shall remain unremedied for 30 days;
(d) Cross-Default. (i)  Any Loan Party shall fail to pay any principal of or
premium or interest on any of its Debt which, individually or in the aggregate,
is outstanding in a principal amount of at least $5,000,000.00 (or the
equivalent in any other currency) individually or when aggregated with all such
Debt of the Person so in default (but excluding Debt evidenced by the Revolving
Advances and the Swing Line Advances) when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), (ii) any other event shall occur or condition shall exist under any
agreement or instrument relating to Debt which is outstanding in a principal
amount of at least $5,000,000.00 (or the equivalent in any other currency)
individually or when aggregated with all such Debt of the Person so in default
(but excluding Debt evidenced by the Revolving Advances and the Swing Line
Advances), if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Debt; or (iii) any such Debt
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), prior to the stated maturity
thereof;
(e) Insolvency. Any Loan Party shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
commences negotiations with one or more of its creditors with a view to
rescheduling any of its indebtedness which it would not otherwise be able to pay
as it falls due or shall make a general assignment for the benefit of creditors;
or any proceeding shall be instituted by or against the Parent or any of its
Subsidiaries seeking to adjudicate it as a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar
official for it or for any substantial part of its property and, in the case of
any such proceeding instituted against such Person, either such proceeding shall
remain undismissed for a period of 60 days or any of the actions sought in such
proceeding shall occur; or such Person shall take any action to authorize any of
the actions set forth above in this paragraph (e) or any analogous procedure or
step is taken in any jurisdiction.
(f) Judgments. Any judgment, decree or order for the payment of money shall be
rendered against any Loan Party in an amount in excess of $2,500,000.00 (or the
equivalent in any other currency) and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect;

 

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(g) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of a Loan Party under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of
$5,000,000.00, or (ii) the Parent or any ERISA Affiliate fails to pay when due,
after the expiration of any applicable grace period, any installment payment
with respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of $5,000,000.00; or
(h) Loan Documents. Any Loan Document, at any time after its execution and
delivery and for any reason other than as expressly permitted hereunder or
satisfaction in full of all the Obligations, ceases to be in full force and
effect; or any Loan Party or any other Person contests in any manner the
validity or enforceability of any Loan Document; or any Loan Party denies that
it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any Loan Document; or
(i) Security Documents. The Administrative Agent and the Lenders shall fail to
have an Acceptable Security Interest in a material portion of the Collateral;
(j) Material Contracts. There shall have been a termination or cancellation of,
or a default that would permit the termination or cancellation of, any Material
Contract and such termination or cancellation could reasonably be expected to
have a Material Adverse Effect; or
(k) Change in Control. A Change of Control shall occur; or
(l) Secured Counterparty Event. A Secured Counterparty Event shall occur.
Section 7.02 Optional Acceleration of Maturity. If any Event of Default (other
than an Event of Default pursuant to paragraph (e) of Section 7.01) shall have
occurred and be continuing, then, and in any such event:
(a) the Administrative Agent (i) shall at the request, or may with the consent,
of the Majority Lenders, by notice to the Borrowers, declare the Commitments and
the obligation of each Lender, the Swing Line Lender, and the Issuing Bank to
make extensions of credit hereunder, including making Revolving Advances, Swing
Line Advances, and issuing Letters of Credit, to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrowers, declare all
principal, interest, fees, reimbursements, indemnifications, and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon all such amounts shall become and be
forthwith due and payable in full, without notice of intent to demand, demand,
presentment for payment, notice of nonpayment, protest, notice of protest,
grace, notice of dishonor, notice of intent to accelerate, notice of
acceleration, and all other notices, all of which are hereby expressly waived by
each Borrower;
(b) each Borrower shall, on demand of the Administrative Agent at the request or
with the consent of the Majority Lenders, deposit with the Administrative Agent
into the LC Cash Collateral Account an amount of cash in Dollars equal to 105%
of the outstanding Letter of Credit Exposure as security for the Obligations to
the extent the Letter of Credit Obligations are not otherwise paid at such time;
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(c) the Administrative Agent shall at the request of, or may with the consent
of, the Majority Lenders proceed to enforce its rights and remedies under the
Security Documents, this Agreement, and any other Loan Document for the ratable
benefit of the Lenders by appropriate proceedings.
Section 7.03 Automatic Acceleration of Maturity. If any Event of Default
pursuant to paragraph (e) of Section 7.01 shall occur:
(a) (i) the Commitments and the obligation of each Lender, the Swing Line Lender
and the Issuing Bank to make extensions of credit hereunder, including making
Revolving Advances and Swing Line Advances and issuing Letters of Credit, shall
terminate, and (ii) all principal, interest, fees, reimbursements,
indemnifications, and all other amounts payable under this Agreement and the
other Loan Documents shall become and be forthwith due and payable in full,
without notice of intent to demand, demand, presentment for payment, notice of
nonpayment, protest, notice of protest, grace, notice of dishonor, notice of
intent to accelerate, notice of acceleration, and all other notices, all of
which are hereby expressly waived by each Borrower;
(b) each Borrower shall deposit with the Administrative Agent into the LC Cash
Collateral Account an amount of cash in Dollars equal to 105% of the outstanding
Letter of Credit Exposure as security for the Obligations to the extent the
Letter of Credit Obligations are not otherwise paid at such time; and
(c) the Administrative Agent shall at the request of, or may with the consent
of, the Majority Lenders proceed to enforce its rights and remedies under the
Security Documents, this Agreement, and any other Loan Document for the ratable
benefit of the Lenders by appropriate proceedings.
Section 7.04 Non-exclusivity of Remedies. No remedy conferred upon the
Administrative Agent, the Swing Line Lender, the Issuing Bank and the Lenders is
intended to be exclusive of any other remedy, and each remedy shall be
cumulative of all other remedies existing by contract, at law, in equity, by
statute or otherwise.
Section 7.05 Right of Set-off. If an Event of Default shall have occurred and be
continuing, each Lender, the Issuing Bank, the Swing Line Lender, and each of
their respective Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by applicable law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final,
in whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by such Lender, Swing Line Lender, the Issuing Bank
or any such Affiliate to or for the credit or the account of any Loan Party
against any and all of the obligations of such Loan Party now or hereafter
existing under this Agreement or any other Loan Document to such Lender, the
Swing Line Lender, or the Issuing Bank, irrespective of whether or not such
Lender, the Swing Line Lender, or the Issuing Bank shall have made any demand
under this Agreement or any other Loan Document and although such obligations of
such Loan Party may be contingent or unmatured or are owed to a branch or office
of such Lender, the Swing Line Lender, or the Issuing Bank different from the
branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender, the Swing Line Lender, the Issuing Bank and their
respective Affiliates under this Section are in addition to other rights and
remedies (including other rights of setoff) that such Lender, the Swing Line
Lender, the Issuing Bank or their respective Affiliates may have. Each Lender,
the Swing Line Lender, and the Issuing Bank agrees to notify the Parent and the
Administrative Agent promptly after any such setoff and application, provided
that the failure to give such notice shall not affect the validity of such
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Section 7.06 Application of Proceeds. From and during the continuance of any
Event of Default, any monies or property actually received by the Administrative
Agent pursuant to this Agreement or any other Loan Document, the exercise of any
rights or remedies under any Security Document or any other agreement with any
Loan Party which secures any of the Obligations, shall be applied in the
following order:
(a) First, to payment of the reasonable expenses, liabilities, losses, costs,
duties, fees, charges or other moneys whatsoever (together with interest payable
thereon) as may have been paid or incurred in, about or incidental to any sale
or other realization of Collateral, including reasonable compensation to the
Administrative Agent and its agents and counsel, and to the ratable payment of
any other unreimbursed reasonable expenses and indemnities for which the
Administrative Agent or any Secured Party is to be reimbursed pursuant to this
Agreement or any other Loan Document, in each case that are then due and
payable;
(b) Second, to the ratable payment of accrued but unpaid fees of the
Administrative Agent, commitment fees, letter of credit fees, and fronting fees
owing to the Administrative Agent, the Issuing Bank, and the Lenders in respect
of the Revolving Advances, and Letters of Credit under this Agreement;
(c) Third, to the ratable payment of accrued but unpaid interest on the
Revolving Advances and the Swing Line Advances then due and payable under this
Agreement;
(d) Fourth, ratably, according to the then unpaid amounts thereof, without
preference or priority of any kind among them, to the ratable payment of all
other Obligations then due and payable which relate to Revolving Advances, the
Swing Line Advances, and Letters of Credit and which are owing to the
Administrative Agent, the Issuing Bank, the Swing Line Lender and the Lenders;
(e) Fifth, ratably, according to the unpaid termination amounts thereof, to the
payment of all obligations of any Borrower or its Subsidiaries owing to any Swap
Counterparty under any Swap Contract, if any, then due and payable;
(f) Sixth, to the ratable payment of any other outstanding Obligations then due
and payable; and
(g) Seventh, any excess after payment in full of all Obligations shall be paid
to the Parent or any other Loan Party as appropriate or to such other Person who
may be lawfully entitled to receive such excess.

 

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Section 7.07 Administrative Agent’s Account. The Borrowers and the
Administrative Agent shall establish a Collateral Account and each Borrower
shall execute any documents and agreements, including the Administrative Agent’s
standard form assignment of deposit accounts, that the Administrative Agent
reasonably requests in connection therewith to establish the Collateral Account
and grant the Administrative Agent an Acceptable Security Interest in such
account and the funds therein. Each Borrower hereby pledges to the
Administrative Agent and grants the Administrative Agent a security interest in
the Collateral Account, all funds held therein from time to time, and all
proceeds thereof as security for the payment of the Obligations. Funds held in
the Collateral Account shall be held as cash collateral for the Obligations and
promptly applied by the Administrative Agent to any outstanding Obligations for
Revolving Advances, Letter of Credit Exposure, or Swing Line Advances that exist
or occur. After the occurrence and continuance of an Event of Default, funds
held in the Collateral Account shall be held as cash collateral for the
Obligations and promptly applied by the Administrative Agent to any outstanding
Obligations that exist or occur. Provided that no Default or Event of Default
has occurred and is continuing, to the extent that any surplus funds are held in
the Collateral Account above the sum of the outstanding Revolving Advance and
Swing Line Advances, the Administrative Agent may release to the Borrowers at
either Borrower’s written request any funds held in the Collateral Account. The
Administrative Agent shall exercise reasonable care in the custody and
preservation of any funds held in the Collateral Account and shall be deemed to
have exercised such care if such funds are accorded treatment substantially
equivalent to that which the Administrative Agent accords its own property, it
being understood that the Administrative Agent shall not have any responsibility
for taking any necessary steps to preserve rights against any parties with
respect to any such funds. Funds held in the Administrative Agent’s Account
shall be invested in Cash Equivalents maintained with, and under the sole
dominion and control of, the Administrative Agent or in another investment if
mutually agreed upon by the Borrowers and the Administrative Agent, but the
Administrative Agent shall have no other obligation to make any other investment
of the funds therein. The Administrative Agent shall exercise reasonable care in
the custody and preservation of any funds held in the Administrative Agent’s
Account and shall be deemed to have exercised such care if such funds are
accorded treatment substantially equivalent to that which the Administrative
Agent accords its own property, it being understood that the Administrative
Agent shall not have any responsibility for taking any necessary steps to
preserve rights against any parties with respect to any such funds.
ARTICLE VIII
THE GUARANTY
Section 8.01 Liabilities Guaranteed. Each Guarantor hereby, jointly and
severally, irrevocably and unconditionally guarantees the prompt payment at
maturity of the Obligations.

 

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Section 8.02 Nature of Guaranty. This guaranty is an absolute, irrevocable,
completed and continuing guaranty of payment and not a guaranty of collection,
and no notice of the Obligations or any extension of credit already or hereafter
contracted by or extended to any Borrower need be given to any Guarantor. This
guaranty may not be revoked by any Guarantor and shall continue to be effective
with respect to the Obligations arising or created after any attempted
revocation by such Guarantor and shall remain in full force and effect until the
Obligations are paid in full and the Commitments are terminated, notwithstanding
that from time to time prior thereto no Obligations may be outstanding. The
Borrowers and the Lenders may modify, alter, rearrange, extend for any period
and/or renew from time to time, the Obligations, and the Lenders may waive any
Default or Events of Default without notice to any Guarantor and in such event
each Guarantor will remain fully bound hereunder on the Obligations. This
guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of the Obligations is rescinded or must otherwise be
returned by any of the Lenders upon the insolvency, bankruptcy or reorganization
of any Borrower or otherwise, all as though such payment had not been made. This
guaranty may be enforced by the Administrative Agent and any subsequent holder
of any of the Obligations and shall not be discharged by the assignment or
negotiation of all or part of the Obligations. Each Guarantor hereby expressly
waives presentment, demand, notice of non-payment, protest and notice of protest
and dishonor, notice of Default or Event of Default, and also notice of
acceptance of this guaranty, acceptance on the part of the Lenders being
conclusively presumed by the Lenders’ request for this guaranty and the
Guarantors’ being party to this Agreement.
Section 8.03 Agent’s Rights. Each Guarantor authorizes the Administrative Agent,
without notice or demand and without affecting any Guarantor’s liability
hereunder, to take and hold security for the payment of its obligations under
this Article VIII and/or the Obligations, and exchange, enforce, waive and
release any such security; and to apply such security and direct the order or
manner of sale thereof as the Administrative Agent in its discretion may
determine, and to obtain a guaranty of the Obligations from any one or more
Persons and at any time or times to enforce, waive, rearrange, modify, limit or
release any of such other Persons from their obligations under such guaranties.
Section 8.04 Guarantor’s Waivers.
(a) General. Each Guarantor waives any right to require any of the Lenders to
(i) proceed against either Borrower or any other person liable on the
Obligations, (ii) enforce any of their rights against any other guarantor of the
Obligations, (iii) proceed or enforce any of their rights against or exhaust any
security given to secure the Obligations, (iv) have either Borrower joined with
any Guarantor in any suit arising out of this Article VIII and/or the
Obligations, or (v) pursue any other remedy in the Lenders’ powers whatsoever.
It is agreed between the Guarantors and the Lenders that the foregoing waivers
are of the essence of the transaction contemplated by this Agreement and the
other Loan Documents and that, but for this Guaranty and such waivers, the
Lenders would not extend or continue to extend credit under this Agreement. The
Lenders shall not be required to mitigate damages or take any action to reduce,
collect or enforce the Obligations. Each Guarantor waives any defense arising by
reason of any disability, lack of corporate authority or power, or other defense
of any Borrower or any other guarantor of the Obligations, and shall remain
liable hereon regardless of whether any Borrower or any other guarantor be found
not liable thereon for any reason. Whether and when to exercise any of the
remedies of the Lenders under any of the Loan Documents shall be in the sole and
absolute discretion of the Administrative Agent, and no delay by the
Administrative Agent in enforcing any remedy, including delay in conducting a
foreclosure sale, shall be a defense to any Guarantor’s liability under this
Article VIII.

 

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(b) Marshalling, etc. In addition to the waivers contained in Section 8.04(a)
hereof, the Guarantors waive, and agree that they shall not at any time insist
upon, plead or in any manner whatsoever claim or take the benefit or advantage
of, any appraisal, valuation, stay, extension, marshaling of assets or
redemption laws, or exemption, whether now or at any time hereafter in force,
which may delay, prevent or otherwise affect the performance by the Guarantors
of their obligations under, or the enforcement by the Administrative Agent or
the Lenders of, this Guaranty. The Guarantors hereby waive diligence,
presentment and demand (whether for nonpayment or protest or of acceptance,
maturity, extension of time, change in nature or form of the Obligations,
acceptance of further security, release of further security, composition or
agreement arrived at as to the amount of, or the terms of, the Obligations,
notice of adverse change in the Borrowers’ financial condition or any other fact
which might materially increase the risk to the Guarantors) with respect to any
of the Obligations or all other demands whatsoever and waive the benefit of all
provisions of law which are or might be in conflict with the terms of this
Article VIII. The Guarantors, jointly and severally, represent, warrant and
agree that, as of the date of this Guaranty, their obligations under this
Guaranty are not subject to any offsets or defenses of any kind against the
Administrative Agent, the Lenders, the Borrowers or any other Person that
executes a Loan Document. The Guarantors further jointly and severally agree
that their obligations under this Guaranty shall not be subject to any
counterclaims, offsets or defenses of any kind which may arise in the future
against the Administrative Agent, the Lenders, the Borrowers or any other Person
that executes a Loan Document.
(c) Subrogation. Until the Obligations have been paid in full, each Guarantor
waives all rights of subrogation or reimbursement against the Borrowers, whether
arising by contract or operation of law (including, without limitation, any such
right arising under any federal, state or other applicable bankruptcy or
insolvency laws) and waives any right to enforce any remedy which the Lenders
now have or may hereafter have against any Borrower, and waives any benefit or
any right to participate in any security now or hereafter held by the
Administrative Agent or any Lender.
Section 8.05 Maturity of Obligations, Payment. Each Guarantor agrees that if the
maturity of any of the Obligations is accelerated by bankruptcy or otherwise,
such maturity shall also be deemed accelerated for the purpose of this
Article VIII without demand or notice to any Guarantor. Each Guarantor will,
forthwith upon notice from the Administrative Agent, jointly and severally pay
to the Administrative Agent the amount due and unpaid by the Borrowers and
guaranteed hereby. The failure of the Administrative Agent to give this notice
shall not in any way release any Guarantor hereunder.
Section 8.06 Agent’s Expenses. If any Guarantor fails to pay the Obligations
after notice from the Administrative Agent of any Borrower’s failure to pay any
Obligations at maturity, and if the Administrative Agent obtains the services of
an attorney for collection of amounts owing by any Guarantor hereunder, or
obtaining advice of counsel in respect of any of their rights under this
Article VIII, or if suit is filed to enforce this Article VIII, or if
proceedings are had in any bankruptcy, probate, receivership or other judicial
proceedings for the establishment or collection of any amount owing by any
Guarantor hereunder, or if any amount owing by any Guarantor hereunder is
collected through such proceedings, each Guarantor jointly and severally agrees
to pay to the Administrative Agent the Administrative Agent’s reasonable
attorneys’ fees.

 

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Section 8.07 Liability. It is expressly agreed that the liability of each
Guarantor for the payment of the Obligations guaranteed hereby shall be primary
and not secondary.
Section 8.08 Events and Circumstances Not Reducing or Discharging any
Guarantor’s Obligations. Each Guarantor hereby consents and agrees to each of
the following to the fullest extent permitted by law, and agrees that each
Guarantor’s obligations under this Article VIII shall not be released,
diminished, impaired, reduced or adversely affected by any of the following, and
waives any rights (including without limitation rights to notice) which each
Guarantor might otherwise have as a result of or in connection with any of the
following:
(a) Modifications, etc. Any renewal, extension, modification, increase,
decrease, alteration or rearrangement of all or any part of the Obligations, or
this Agreement or any instrument executed in connection therewith, or any
contract or understanding between any Borrower and any of the Lenders, or any
other Person, pertaining to the Obligations, or the waiver or consent by the
Administrative Agent or the Lenders with respect to any of the provisions hereof
or thereof, or any modification or termination of the terms of any intercreditor
or subordination agreement pursuant to which claims of other creditors against
any Guarantor or Borrower are subordinated to the claims of the Lenders or
pursuant to which the Obligations are subordinated to claims of other creditors;
(b) Adjustment, etc. Any adjustment, indulgence, forbearance or compromise that
might be granted or given by any of the Lenders to any Borrower or any Guarantor
or any Person liable on the Obligations;
(c) Condition of any Borrower or any Guarantor. The insolvency, bankruptcy
arrangement, adjustment, composition, liquidation, disability, dissolution,
death or lack of power of any Borrower or any other Guarantor or any other
Person at any time liable for the payment of all or part of the Obligations; or
any dissolution of any Borrower or any other Guarantor, or any sale, lease or
transfer of any or all of the assets of any Borrower or any other Guarantor, or
any changes in the shareholders, partners, or members of any Borrower or any
other Guarantor; or any reorganization of any Borrower or any other Guarantor;
(d) Invalidity of Obligations. The invalidity, illegality or unenforceability of
all or any part of the Obligations, or any document or agreement executed in
connection with the Obligations, for any reason whatsoever, including without
limitation the fact that the Obligations, or any part thereof, exceed the amount
permitted by law, the act of creating the Obligations or any part thereof is
ultra vires, the officers or representatives executing the documents or
otherwise creating the Obligations acted in excess of their authority, the
Obligations violate applicable usury laws, either Borrower has valid defenses,
claims or offsets (whether at law, in equity or by agreement) which render the
Obligations wholly or partially uncollectible from such Borrower, the creation,
performance or repayment of the Obligations (or the execution, delivery and
performance of any document or instrument representing part of the Obligations
or executed in connection with the Obligations, or given to secure the repayment
of the Obligations) is illegal, uncollectible, legally impossible or
unenforceable, or this Agreement or other documents or instruments pertaining to
the Obligations have been forged or otherwise are irregular or not genuine or
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(e) Release of Obligors. Any full or partial release of the liability of either
Borrower from the Obligations or any part thereof, of any co-guarantors, or any
other Person now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or assure the
payment of the Obligations or any part thereof, it being recognized,
acknowledged and agreed by any Guarantor that such Guarantor may be required to
pay the Obligations in full without assistance or support of any other Person,
and no Guarantor has been induced to enter into this Article VIII on the basis
of a contemplation, belief, understanding or agreement that other parties other
than the Borrowers will be liable to perform the Obligations, or the Lenders
will look to other parties to perform the Obligations;
(f) Other Security. The taking or accepting of any other security, collateral or
guaranty, or other assurance of payment, for all or any part of the Obligations;
(g) Release of Collateral etc. Any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment (including without limitation
negligent, willful, unreasonable or unjustifiable impairment) of any collateral,
property or security, at any time existing in connection with, or assuring or
securing payment of, all or any part of the Obligations;
(h) Care and Diligence. The failure of the Lenders or any other Person to
exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of such
collateral, property or security;
(i) Status of Liens. The fact that any collateral, security, security interest
or lien contemplated or intended to be given, created or granted as security for
the repayment of the Obligations shall not be properly perfected or created, or
shall prove to be unenforceable or subordinate to any other security interest or
lien, it being recognized and agreed by each Guarantor that no Guarantor is
entering into this Article VIII in reliance on, or in contemplation of the
benefits of, the validity, enforceability, collectibility or value of any of the
collateral for the Obligations;
(j) Payments Rescinded. Any payment by either Borrower to the Lenders is held to
constitute a preference under the bankruptcy laws, or for any reason the Lenders
are required to refund such payment or pay such amount to the Borrowers or
someone else; or
(k) Other Actions Taken or Omitted. Any other action taken or omitted to be
taken with respect to this Agreement, the Obligations, or the security and
collateral therefor, whether or not such action or omission prejudices any
Guarantor or increases the likelihood that any Guarantor will be required to pay
the Obligations pursuant to the terms hereof, it being the unambiguous and
unequivocal intention of each Guarantor that each Guarantor shall be obligated
to joint and severally pay the Obligations when due, notwithstanding any
occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, except for the full and final payment and satisfaction of the
Obligations.

 

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Section 8.09 Subordination of All Guarantor Claims.
(a) As used herein, the term “Guarantor Claims” shall mean all debts and
liabilities of either Borrower or any Subsidiary of either Borrower to any
Guarantor, whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligation of such Borrower or such Subsidiary
thereon be direct, contingent, primary, secondary, several, joint and several,
or otherwise, and irrespective of whether such debts or liabilities be evidenced
by note, contract, open account, or otherwise, and irrespective of the person or
persons in whose favor such debts or liabilities may, at their inception, have
been, or may hereafter be created, or the manner in which they have been or may
hereafter be acquired by any Guarantor. The Guarantor Claims shall include
without limitation all rights and claims of any Guarantor against either
Borrower or any Subsidiary of either Borrower arising as a result of subrogation
or otherwise as a result of such Guarantor’s payment of all or a portion of the
Obligations. Until the Obligations shall be paid and satisfied in full, all
Revolving Commitments have expired or been terminated and all Letters of Credit
have expired or been cash collateralized on the terms set forth in this
Agreement and each Guarantor shall have performed all of its obligations
hereunder, no Guarantor shall receive or collect, directly or indirectly, from
either Borrower or any Subsidiary of either Borrower or any other party any
amount upon the Guarantor Claims.
(b) Each Borrower and each Guarantor hereby (i) authorizes the Administrative
Agent and the Lenders to demand specific performance of the terms of this
Section 8.09, whether or not either Borrower or any Guarantor shall have
complied with any of the provisions hereof applicable to it, at any time when it
shall have failed to comply with any provisions of this Section 8.09 which are
applicable to it and (ii) irrevocably waives any defense based on the adequacy
of a remedy at law, which might be asserted as a bar to such remedy of specific
performance.
(c) Upon any distribution of assets of any Loan Party in any dissolution,
winding up, liquidation or reorganization (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
otherwise):
(i) The Lenders shall first be entitled to receive payment in full of the
Obligations before either Borrower or any Guarantor is entitled to receive any
payment on account of the Guarantor Claims.
(ii) Any payment or distribution of assets of any Loan Party of any kind or
character, whether in cash, property or securities, to which either Borrower or
any Guarantor would be entitled except for the provisions of this
Section 8.09(c), shall be paid by the liquidating trustee or agent or other
Person making such payment or distribution directly to the Lenders, to the
extent necessary to make payment in full of all Obligations remaining unpaid
after giving effect to any concurrent payment or distribution or provisions
therefor to the Lenders.
(d) No right of the Lenders or any other present or future holders of any
Obligations to enforce the subordination provisions herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Loan Party or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by either Borrower or any Guarantor with the
terms hereof, regardless of any knowledge thereof which any such holder may have
or be otherwise charged with.

 

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Section 8.10 Claims in Bankruptcy. In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief, or other insolvency proceedings
involving either Borrower or any Subsidiary of either Borrower, as debtor, the
Lenders shall have the right to prove their claim in any proceeding, so as to
establish their rights hereunder and receive directly from the receiver, trustee
or other court custodian, dividends and payments which would otherwise be
payable upon Guarantor Claims. Each Guarantor hereby assigns such dividends and
payments to the Lenders. Should the Administrative Agent or any Lender receive,
for application upon the Obligations, any such dividend or payment which is
otherwise payable to any Guarantor, and which, as between either Borrower or any
Subsidiary of either Borrower and any Guarantor, shall constitute a credit upon
the Guarantor Claims, then upon payment in full of the Obligations and the
expiration or cash collateralization of the Letters of Credit in accordance with
the terms of this Agreement and termination of the Revolving Commitments, such
Guarantor shall become subrogated to the rights of the Lenders to the extent
that such payments to the Lenders on the Guarantor Claims have contributed
toward the liquidation of the Obligations and such subrogation shall be with
respect to that proportion of the Obligations which would have been unpaid if
the Administrative Agent or a Lender had not received dividends or payments upon
the Guarantor Claims.
Section 8.11 Payments Held in Trust. In the event that notwithstanding Sections
8.09 and 8.10 above, any Guarantor should receive any funds, payments, claims or
distributions which is prohibited by such Sections, such Guarantor agrees to
hold in trust for the Lenders an amount equal to the amount of all funds,
payments, claims or distributions so received, and agrees that it shall have
absolutely no dominion over the amount of such funds, payments, claims or
distributions except to pay them promptly to the Administrative Agent, and each
Guarantor covenants promptly to pay the same to the Administrative Agent.
Section 8.12 Benefit of Guaranty. The provisions of this Article VIII are for
the benefit of the Lenders, their successors, and their permitted transferees,
endorsees and assigns. In the event all or any part of the Obligations are
transferred, endorsed or assigned by the Lenders, as the case may be, to any
Person or Persons in accordance with the terms of this Agreement, any reference
to the “Lenders” herein, as the case may be, shall be deemed to refer equally to
such Person or Persons.
Section 8.13 Reinstatement. This Article VIII shall remain in full force and
effect and continue to be effective in the event any petition is filed by or
against any Borrower, any Guarantor or any other Loan Party for liquidation or
reorganization, in the event that any of them becomes insolvent or makes an
assignment for the benefit of creditors or in the event a receiver, trustee or
similar Person is appointed for all or any significant part of any of their
assets, and shall continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Obligations, or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by the Lenders, whether as a “voidable
preference,” “fraudulent conveyance,” or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.

 

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Section 8.14 Liens Subordinate. Each Guarantor agrees that any liens, security
interests, judgment liens, charges or other encumbrances upon either Borrower’s
or any Subsidiary of either Borrower’s assets securing payment of the Guarantor
Claims shall be and remain inferior and subordinate to any liens, security
interests, judgment liens, charges or other encumbrances upon either Borrower’s
or any Subsidiary of either Borrower’s assets securing payment of the
Obligations, regardless of whether such encumbrances in favor of any Guarantor,
the Administrative Agent or the Lenders presently exist or are hereafter created
or attach.
Section 8.15 Guarantor’s Enforcement Rights. Without the prior written consent
of the Lenders, no Guarantor shall (a) exercise or enforce any creditor’s right
it may have against either Borrower or any Subsidiary of either Borrower, or
(b) foreclose, repossess, sequester or otherwise take steps or institute any
action or proceeding (judicial or otherwise, including without limitation the
commencement of or joinder in any liquidation, bankruptcy, rearrangement,
debtor’s relief or insolvency proceeding) to enforce any lien, mortgages, deeds
of trust, security interest, collateral rights, judgments or other encumbrances
on assets of either Borrower or any Subsidiary of either Borrower held by
Guarantor.
Section 8.16 Limitation. It is the intention of the Guarantors and each Secured
Party that the amount of the Obligations guaranteed by each Guarantor shall be
in, but not in excess of, the maximum amount permitted by fraudulent conveyance,
fraudulent transfer and similar Legal Requirement applicable to such Guarantor.
Accordingly, notwithstanding anything to the contrary contained in this
Article VIII or in any other agreement or instrument executed in connection with
the payment of any of the Obligations guaranteed hereby, the amount of the
Obligations guaranteed by a Guarantor under this Article VIII shall be limited
to an aggregate amount equal to the largest amount that would not render such
Guarantor’s obligations hereunder subject to avoidance under Section 548 of the
United States Bankruptcy Code or any comparable provision of any other
applicable law.
Section 8.17 Contribution Rights.
(a) To the extent that any payment is made under this Guaranty (a “Guarantor
Payment”), by a Guarantor, which Guarantor Payment, taking into account all
other Guarantor Payments then previously or concurrently made by all other
Guarantors, exceeds the amount which such Guarantor would otherwise have paid if
each Guarantor had paid the aggregate Obligations satisfied by such Guarantor
Payment in the same proportion that such Guarantor’s Allocable Amount (as
defined below) (in effect immediately prior to such Guarantor Payment) bore to
the aggregate Allocable Amounts of all of the Guarantors in effect immediately
prior to the making of such Guarantor Payment, then, following the date on which
the Obligations shall be paid and satisfied in full and the expiration or cash
collateralization of the Letters of Credit in accordance with the terms of this
Agreement and termination of the Revolving Commitments and each Guarantor shall
have performed all of its obligations hereunder, such Guarantor shall be
entitled to receive contribution and indemnification payments from, and be
reimbursed by, each of the other Guarantors for the amount of such excess, pro
rata based upon their respective Allocable Amounts in effect immediately prior
to such Guarantor Payment.
(b) As of any date of determination, the “Allocable Amount” of any Guarantor
shall be equal to the maximum amount of the claim which could then be recovered
from such Guarantor under this Guaranty without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law.

 

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(c) This Section 8.17 is intended only to define the relative rights of the
Guarantors and nothing set forth in this Section 8.17 is intended to or shall
impair the obligations of the Guarantors, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Guaranty.
(d) The rights of the parties under this Section 8.17 shall be exercisable upon
the date the Obligations shall be paid and satisfied in full and the expiration
or cash collateralization of the Letters of Credit in accordance with the terms
of this Agreement and termination of the Revolving Commitments and each
Guarantor shall have performed all of its obligations hereunder.
(e) The parties hereto acknowledge that the right of contribution and
indemnification hereunder shall constitute assets of any Guarantor to which such
contribution and indemnification is owing.
Section 8.18 Release of Guarantors. Upon the sale or disposition of any
Guarantor pursuant to the terms of this Agreement to any Person other than
either Borrower or any other Guarantor, the Collateral Agent shall, at the
Borrowers’ expense, execute and deliver to such Guarantor such documents as such
Guarantor shall reasonably require and take any other actions reasonably
required to evidence or effect the release of such Guarantor from this Agreement
and the other Loan Documents.
ARTICLE IX
THE ADMINISTRATIVE AGENT
Section 9.01 Appointment and Authority. Each of the Lenders and the Issuing Bank
hereby irrevocably appoints SG to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to such Agent by the terms hereof or thereof, together with such
actions and powers as are reasonably incidental thereto. The provisions of this
Article are solely for the benefit of the Administrative Agent, the Lenders and
the Issuing Bank, and no Loan Party shall have rights as a third party
beneficiary of any of such provisions.
Section 9.02 Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Parent or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.

 

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Section 9.03 Exculpatory Provisions. The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Majority Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Parent or any of its Affiliates that
is communicated to or obtained by the Person serving as Agent or any of its
Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Majority Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01) or (ii) in the absence of its own
gross negligence or willful misconduct. The Administrative Agent shall be deemed
not to have knowledge of any Default unless and until notice describing such
Default is given to the Administrative Agent by the Parent or either Borrower, a
Lender or the Issuing Bank.
The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article III or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
Section 9.04 Reliance by the Administrative Agent. The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing (including any electronic message, Internet or intranet website
posting or other distribution) believed by it to be genuine and to have been
signed, sent or otherwise authenticated by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon. In determining compliance with any condition
hereunder to the making of a Revolving Advance, Swing Line Advance, or the
issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the Issuing Bank, the Administrative Agent may
presume that such condition is satisfactory to such Lender or the Issuing Bank
unless the Administrative Agent shall have received notice to the contrary from
such Lender or the Issuing Bank prior to the making of such Revolving Advance,
Swing Line Advance, or the issuance of such Letter of Credit. The Administrative
Agent may consult with legal counsel (who may be counsel for a Loan Party),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

 

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Section 9.05 Delegation of Duties. The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as the Administrative Agent.
Section 9.06 Resignation of the Administrative Agent. The Administrative Agent
may at any time give notice of its resignation to the Lenders, the Issuing Bank
and the Borrowers. Upon receipt of any such notice of resignation, the Majority
Lenders shall have the right, and provided that no Default or Event of Default
exists, with the consent of the Borrowers (which consent shall not be
unreasonably withheld or delayed), to appoint a successor, which shall be a
Lender with an office in New York, or an Affiliate of any such Lender with an
office in New York. If no such successor shall have been so appointed by the
Majority Lenders and shall have accepted such appointment within 60 days after
the retiring Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders and the Issuing Bank, appoint
a successor Administrative Agent meeting the qualifications set forth above
provided and consented to by the Borrowers (provided that no Default or Event of
Default exists and which consent shall not be unreasonably withheld or delayed)
that if the Administrative Agent shall notify the Borrowers and the Lenders that
no qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the retiring
Agent shall be discharged from its duties and obligations hereunder and under
the other Loan Documents (except that in the case of any collateral security
held by the Administrative Agent on behalf of the Lenders or the Issuing Bank
under any of the Loan Documents, the retiring Administrative Agent shall
continue to hold such collateral security until such time as a successor
Administrative Agent is appointed) and (2) all payments, communications and
determinations provided to be made by, to or through such Administrative Agent
shall instead be made by or to each Lender and the Issuing Bank directly, until
such time as the Majority Lenders appoint a successor Administrative Agent as
provided for above in this paragraph. Upon the acceptance of a successor’s
appointment as Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring (or
retired) Administrative Agent, and the retiring Administrative Agent shall be
discharged from all of its duties and obligations hereunder or under the other
Loan Documents (if not already discharged therefrom as provided above in this
paragraph). The fees payable by the Borrowers to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between the Borrower and such successor. After the retiring
Administrative Agent’s resignation hereunder and under the other Loan Documents,
the provisions of this Article and Section 10.04 shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.

 

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Section 9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
and the Issuing Bank acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and the Issuing Bank also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
Section 9.08 Indemnification. WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED
HEREBY ARE CONSUMMATED, THE LENDERS SEVERALLY AGREE TO INDEMNIFY UPON DEMAND THE
ADMINISTRATIVE AGENT AND THE ISSUING BANK, IN THEIR CAPACITY AS ADMINISTRATIVE
AGENT AND ISSUING BANK, AND EACH RELATED PARTY OF ANY OF THE FOREGOING (TO THE
EXTENT NOT REIMBURSED BY THE LOAN PARTIES), ACCORDING TO THEIR RESPECTIVE PRO
RATA SHARES, AND HOLD HARMLESS SUCH INDEMNITEE FROM AND AGAINST ANY AND ALL
INDEMNIFIED LIABILITIES (AS DEFINED IN SECTION 10.05) IN ALL CASES, WHETHER OR
NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE NEGLIGENCE OF ANY
RELATED PARTY; PROVIDED, HOWEVER THAT NO LENDER SHALL BE LIABLE FOR THE PAYMENT
TO ANY INDEMNITEE FOR ANY PORTION OF SUCH INDEMNIFIED LIABILITIES TO THE EXTENT
DETERMINED IN A FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED FROM SUCH RELATED PARTY’S OWN GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT; PROVIDED, HOWEVER, THAT NO ACTION TAKEN IN ACCORDANCE WITH
THE DIRECTIONS OF THE MAJORITY LENDERS SHALL BE DEEMED TO CONSTITUTE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT FOR PURPOSES OF THIS SECTION. WITHOUT
LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO REIMBURSE THE ADMINISTRATIVE
AGENT AND THE ISSUING BANK PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE OF ANY
OUT-OF-POCKET EXPENSES (INCLUDING ALL FEES, EXPENSES AND DISBURSEMENTS OF ANY
LAW FIRM OR OTHER EXTERNAL COUNSEL INCURRED BY THE ADMINISTRATIVE AGENT OR THE
ISSUING BANK IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY,
ADMINISTRATION, MODIFICATION, AMENDMENT, OR ENFORCEMENT (WHETHER THROUGH
NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF
RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, TO
THE EXTENT THAT THE ADMINISTRATIVE AGENT OR THE ISSUING BANK IS NOT REIMBURSED
FOR SUCH BY THE LOAN PARTIES. THE UNDERTAKING IN THIS SECTION SHALL SURVIVE
TERMINATION OF THE COMMITMENTS, THE PAYMENT OF ALL OTHER OBLIGATIONS AND THE
RESIGNATION OF THE ADMINISTRATIVE AGENT.

 

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Section 9.09 Collateral and Guaranty Matters.
(a) The Lenders irrevocably authorize the Administrative Agent, at its option
and in its discretion, without the necessity of any notice to or further consent
from the Secured Parties:
(i) to release any Lien on any property granted to or held by the Administrative
Agent under any Security Document (i) upon termination of the Revolving
Commitments and payment in full of all Obligations (other than contingent
indemnification obligations) and the expiration or termination of all Letters of
Credit, (ii) that is sold or to be sold as part of or in connection with any
sale permitted hereunder or under any other Loan Document, or (iii) subject to
Section 10.01, if approved, authorized or ratified in writing by the Majority
Lenders;
(ii) to take any actions with respect to any Collateral or Security Documents
which may be necessary to perfect and maintain Acceptable Security Interests in
and Liens upon the Collateral granted pursuant to the Security Documents; and
(iii) to take any action in exigent circumstances as may be reasonably necessary
to preserve any rights or privileges of the Secured Parties under the Loan
Documents or applicable Legal Requirements.
(b) Upon the request of the Administrative Agent at any time, the Lenders will
confirm in writing the Administrative Agent’s authority to release particular
types or items of Collateral pursuant to this Section 9.09.
(c) Each Loan Party hereby irrevocably appoints the Administrative Agent as such
Loan Party’s attorney-in-fact, with full authority to, after the occurrence and
during the continuance of an Event of Default, act for such Loan Party and in
the name of such Loan Party to, in the Administrative Agent’s discretion upon
the occurrence and during the continuance of an Event of Default, (i) file one
or more financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of such Loan Party
where permitted by law, (ii) to receive, endorse, and collect any drafts or
other instruments, documents, and chattel paper which are part of the
Collateral, (iii) to ask, demand, collect, sue for, recover, compromise,
receive, and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral, (iv) to file any claims or take
any action or institute any proceedings which the Administrative Agent may
reasonably deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of the Administrative Agent with
respect to any of the Collateral and (v) if any Loan Party fails to perform any
covenant contained in this Agreement or the other Security Documents after the
expiration of any applicable grace periods, the Administrative Agent may itself
perform, or cause performance of, such covenant, and such Loan Party shall pay
for the expenses of the Administrative Agent incurred in connection therewith in
accordance with Section 10.04. The power of attorney granted hereby is coupled
with an interest and is irrevocable.

 

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(d) The powers conferred on the Administrative Agent under this Agreement and
the other Security Documents are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Beyond the safe custody thereof, the Administrative Agent and each Lender shall
have no duty with respect to any Collateral in its possession or control (or in
the possession or control of any agent or bailee) or with respect to any income
thereon or the preservation of rights against prior parties or any other rights
pertaining thereto. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Administrative Agent accords its own property. Neither the
Administrative Agent nor any Lender shall be liable or responsible for any loss
or damage to any of the Collateral, or for any diminution in the value thereof,
by reason of the act or omission of any warehouseman, carrier, forwarding
agency, consignee, broker or other agent or bailee selected by Borrower or
selected by the Administrative Agent in good faith.
Section 9.10 Intercreditor Agreement and Security Documents. Each Lender hereby
further authorizes the Administrative Agent, on behalf of and for the benefit of
Secured Parties, without further authorization or consent of the Lenders, to
enter into the Intercreditor Agreement, Amendment No. 1 to the Intercreditor
Agreement in substantially in the form distributed to the Lenders, and each
Security Document as secured party, exercise all the powers, rights and remedies
under the Intercreditor Agreement and the other Security Documents for the
benefit of Secured Parties in accordance with the terms thereof, and each Lender
agrees to be bound by the terms of the Intercreditor Agreement and each such
Security Document, provided that the Administrative Agent shall not enter into
or consent to any amendment, modification, termination or waiver of any
provision contained in any such Security Document or the Intercreditor Agreement
except as otherwise permitted by Section 10.01.
Section 9.11 No Other Duties, etc. Anything herein to the contrary
notwithstanding, none of the Arranger or the Syndication Agent or Sole
Bookrunner listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except
in its capacity, as applicable, as the Administrative Agent, a Lender or the
Issuing Bank.

 

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ARTICLE X
MISCELLANEOUS
Section 10.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document (other than the Fee Letters), and no
consent to any departure by the Parent or any other Loan Party therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Majority Lenders or by the Administrative Agent, with the consent of the
Majority Lenders and the Borrowers and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall:
(a) waive any condition set forth in Section 3.01 without the written consent of
each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 7.02) without the written consent of such Lender;
(c) postpone any date fixed by this Agreement or any other Loan Document for any
payment or mandatory prepayment of principal, interest, fees or other amounts
due to the Lenders (or any of them) hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate or amount of interest specified herein
on, any Revolving Advance, Swing Line Advance, or Reimbursement Obligation, or
(subject to clause (v) of the second proviso to this Section 10.01) any fees or
other amounts payable hereunder or under any other Loan Document without the
prior written consent of each Lender directly affected thereby; provided,
however, that only the consent of the Majority Lenders shall be necessary to
waive any obligation of either Borrower to pay interest at the Default Rate;
(e) change Section 2.02 or 2.12 in a manner that would alter the pro rata
sharing of payments required thereby without the written consent of each Lender;
(f) change any provision of this Section, or the definition of “Majority
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender directly affected thereby;
(g) release any Guarantor from the Guaranty or all or any substantial portion of
the Collateral without the written consent of each Lender; provided, however,
that any Guarantor or Collateral may be released if they are sold or transferred
as permitted hereunder; or
(h) amend, modify, terminate or waive any provision contained in Section 2, 3,
or 5 of the Intercreditor Agreement without the consent of all of the Lenders,
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank in addition to the Lenders required
above, affect the rights or duties of the Issuing Bank under this Agreement or
any Letter of Credit Application relating to any Letter of Credit issued or to
be issued by it; (ii) no amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Lender in addition to the Lenders required above,
affect the rights or duties of the Swing Line Lender under this Agreement;
(iii) no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; (iv) Section 10.06(g) may not be amended, waived or otherwise
modified without the consent of each Granting Lender all or any part of whose
Revolving Advances are being funded by a SPC at the time of such amendment,
waiver or other modification; and (v) the Fee Letters may be amended, or rights
or privileges thereunder waived, in a writing executed only by the parties
thereto.

 

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Section 10.02 Notices, Etc.
(a) General. Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in paragraph
(c) below), all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail, sent by telecopier or (subject to subsection
(c) below) electronic mail address as follows:
(i) if to either Borrower or any other Loan Party, the Administrative Agent, the
Issuing Bank or the Swing Line Lender, to the address, facsimile number,
electronic mail address or telephone number specified for such Person on
Schedule 10.02 or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a notice to
the other parties; and
(ii) if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number specified in its Administrative Questionnaire or to
such other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the Administrative
Agent.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given on the next Business Day for the recipient) and confirmed received.
Notices delivered through electronic communications to the extent provided in
paragraph (c) below, shall be effective as provided in said paragraph (c). In no
event shall a voicemail message be effective as a notice, communication or
confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may be
transmitted and/or signed by facsimile. The effectiveness of any such documents
and signatures shall, subject to applicable Legal Requirements, have the same
force and effect as manually-signed originals and shall be binding on all Loan
Parties, the Administrative Agent and the Lenders. The Administrative Agent may
also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.
(c) Limited Use of Electronic Mail. Notices and other communications to the
Lenders and the Issuing Bank hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent in its sole
discretion, provided that the foregoing shall not apply to notices to any Lender
or the Issuing Bank pursuant to Article II if such Lender or the Issuing Bank,
as applicable, has notified the Administrative Agent that it is incapable of
receiving notices under such Article by electronic communication. The
Administrative Agent or the Borrowers may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications. Unless the
Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of
an acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

 

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(d) Reliance by Administrative Agent and Lenders. The Administrative Agent and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic Borrowing Notices and Swing Line Loan Notices) purportedly given by
or on behalf of a Loan Party even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. THE BORROWERS SHALL, JOINTLY
AND SEVERALLY, INDEMNIFY THE ADMINISTRATIVE AGENT, THE ISSUING BANK, EACH LENDER
AND THEIR RELATED PARTIES FROM ALL LOSSES, COSTS, EXPENSES AND LIABILITIES
RESULTING FROM THE RELIANCE BY SUCH PERSON ON EACH NOTICE PURPORTEDLY GIVEN BY
OR ON BEHALF OF A BORROWER; PROVIDED THAT SUCH INDEMNITY SHALL NOT BE AVAILABLE
TO THE EXTENT THAT SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
CLAIMS, DEMANDS, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS ARE
DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NON-APPEALABLE
JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
PERSON SEEKING INDEMNIFICATION. All telephonic notices to and other
communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.
Section 10.03 No Waiver; Cumulative Remedies. No failure on the part of any
Lender or the Administrative Agent to exercise, and no delay by any such Person
in exercising, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided in this Agreement are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
Section 10.04 Costs and Expenses. The Borrowers shall, jointly and severally pay
(i) all reasonable out-of-pocket expenses incurred by the Administrative Agent
and their Affiliates (including the reasonable fees, charges and disbursements
of counsel for the Administrative Agent) in connection with the syndication of
the credit facilities provided for herein, the preparation, negotiation,
execution, delivery and administration of this Agreement and the other Loan
Documents or any amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions contemplated hereby or thereby shall
be consummated), (ii) all reasonable out-of-pocket expenses incurred by the
Issuing Bank in connection with the issuance, amendment, renewal or extension of
any Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, any Lender or the
Issuing Bank (including the fees, charges and disbursements of any counsel for
the Administrative Agent, any Lender or the Issuing Bank) in connection with the
enforcement or protection of its rights (A) in connection with this Agreement
and the other Loan Documents, including its rights under this Section, or (B) in
connection with the Revolving Advances or Swing Line Advances made or Letters of
Credit issued hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit. The foregoing costs and expenses shall include all search,
filing, recording, title insurance and appraisal charges and fees and taxes
related thereto, and other out-of-pocket expenses incurred by the Administrative
Agent and the cost of independent public accountants and other outside experts
retained by the Administrative Agent or any Lender. All amounts due under this
Section 10.04 shall be payable within ten Business Days after demand therefor.
The agreements in this Section shall survive the termination of the Commitments
and repayment of all other Obligations.

 

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Section 10.05 Indemnification. THE BORROWERS SHALL, JOINTLY AND SEVERALLY
INDEMNIFY THE ADMINISTRATIVE AGENT, EACH LENDER AND THE ISSUING BANK, AND EACH
RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN
“INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS (INCLUDING ALL REASONABLY
INCURRED FEES, EXPENSES AND DISBURSEMENTS OF ANY LAW FIRM OR OTHER EXTERNAL
COUNSEL) OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY,
OR ASSERTED AGAINST ANY INDEMNITEE IN ANY WAY RELATING TO OR ARISING OUT OF OR
IN CONNECTION WITH (A) THE EXECUTION, DELIVERY, ENFORCEMENT, PERFORMANCE, OR
ADMINISTRATION OF THIS AGREEMENT, ANY LOAN DOCUMENT, OR ANY OTHER AGREEMENT,
LETTER OR INSTRUMENT DELIVERED IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED
THEREBY OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED THEREBY, (B) ANY
COMMITMENT, REVOLVING ADVANCE, SWING LINE ADVANCE, OR LETTER OF CREDIT OR THE
USE OR PROPOSED USE OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL BY THE
ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE
DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH
THE TERMS OF SUCH LETTER OF CREDIT), (C) ANY ACTION TAKEN OR OMITTED BY THE
ADMINISTRATIVE AGENT OR THE ISSUING BANK UNDER THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT (INCLUDING THE ADMINISTRATIVE AGENT’S AND THE ISSUING BANK’S OWN
NEGLIGENCE), (D) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS
MATERIALS ON OR FROM ANY PROPERTY CURRENTLY OR FORMERLY OWNED OR OPERATED BY THE
BORROWER, ANY SUBSIDIARY OR ANY OTHER LOAN PARTY, OR ANY ENVIRONMENTAL LIABILITY
RELATED IN ANY WAY TO THE BORROWER, ANY SUBSIDIARY OR ANY OTHER LOAN PARTY, OR
(E) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING
RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY (INCLUDING ANY INVESTIGATION OF, PREPARATION FOR, OR DEFENSE OF ANY
PENDING OR THREATENED CLAIM, INVESTIGATION, LITIGATION OR PROCEEDING) AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO (ALL THE FOREGOING,
COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”); PROVIDED THAT SUCH INDEMNITY SHALL
NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, DEMANDS, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES OR DISBURSEMENTS ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.

 

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TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, NO LOAN PARTY SHALL ASSERT,
AND HEREBY WAIVES, ANY CLAIM AGAINST ANY INDEMNITEE, ON ANY THEORY OF LIABILITY,
FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT
OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED
HEREBY, THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, ANY LOAN OR LETTER OF
CREDIT OR THE USE OF THE PROCEEDS THEREOF. NO INDEMNITEE SHALL BE LIABLE FOR ANY
DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR
OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR
OTHER INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
ALL AMOUNTS DUE UNDER THIS SECTION 10.05 SHALL BE PAYABLE WITHIN TEN BUSINESS
DAYS AFTER DEMAND THEREFOR. THE AGREEMENTS IN THIS SECTION SHALL SURVIVE THE
RESIGNATION OF THE ADMINISTRATIVE AGENT, THE REPLACEMENT OF ANY LENDER, THE
TERMINATION OF THE COMMITMENTS AND THE REPAYMENT, SATISFACTION OR DISCHARGE OF
ALL THE OTHER OBLIGATIONS.
Section 10.06 Successors and Assigns.
(a) Generally. The terms and provisions of this Agreement and the other Loan
Documents shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that no
Loan Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an Eligible Assignee in accordance with the provisions of subsection
(b) of this Section, (ii) by way of participation in accordance with the
provisions of subsection (d) of this Section, (iii) by way of pledge or
assignment of a security interest subject to the restrictions of subsection
(f) or (i) of this Section, or (iv) to an SPC in accordance with the provisions
of subsection (h) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and, to
the extent expressly contemplated hereby, the Indemnitees) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

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(b) Assignments by Lenders. Any Lender may assign to one or more Eligible
Assignees all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the
Revolving Advances owing to it, participations in Letter of Credit Obligations
and in Swing Line Advances) at the time owing to it); provided, however, that
(i) except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Revolving Commitment and the Revolving Advances owing to it
or in the case of an assignment to a Lender or an Affiliate of a Lender or an
SPC (as defined in subsection (g) of this Section) with respect to a Lender, the
aggregate amount of the Revolving Commitments and Revolving Advances of such
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall not
be less than $5,000,000.00;
(ii) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance; and
(iii) each Eligible Assignee (other than an Eligible Assignee that is a Lender
or an Affiliate of a Lender) shall pay to the Administrative Agent a $3,500
processing and recording fee. Any such assignment need not be ratable as among
the Facilities.
Upon such execution, delivery, acceptance and recording thereof by the
Administrative Agent pursuant to paragraph (c) of this Section, from and after
the effective date specified in each Assignment and Acceptance, (A) the Eligible
Assignee thereunder shall be a party hereto for all purposes and, to the extent
that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (B) such assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of such Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto) but shall continue to
be entitled to the benefits of Sections 2.09, 2.11, 10.04 and 10.05 with respect
to facts and circumstances occurring prior to the effective date of such
assignment). Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this subsection shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with subsection (d) of this Section.
(c) Register. The Administrative Agent shall maintain at its Applicable Lending
Office a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders and
the Commitments of, and principal amount of the Revolving Advances 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
each of the Loan Parties, the Administrative Agent, the Issuing Bank, and the
Lenders may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by any Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.

 

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(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrowers or the Administrative Agent, sell participations to any
Person (other than a natural person or either Borrower or any of either
Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a
portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Revolving Commitment and/or the Revolving
Advances (including such Lender’s participations in Letter of Credit Obligations
and/or Swing Line Advances) owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrowers, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in the first proviso to
Section 10.01 that directly affects such Participant. Subject to subsection
(e) of this Section, the Borrowers agree that each Participant shall be entitled
to the benefits of Sections 2.08, 2.09, 2.11, 10.04 and 10.05 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
subsection (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 7.05 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.12 as though
it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment under
Section 2.09 or 2.11 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrowers’ prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.11 unless the
Borrowers are notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with
Section 2.11(e) as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

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(g) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle identified as
such in writing from time to time by the Granting Lender to the Administrative
Agent and the Borrowers (an “SPC”) the option to provide all or any part of any
Revolving Advance that such Granting Lender would otherwise be obligated to make
pursuant to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to fund any Revolving Advance, and (ii) if a SPC elects
not to exercise such option or otherwise fails to make all or any part of such
Revolving Advance, the Granting Lender shall be obligated to make such Revolving
Advance pursuant to the terms hereof. Each party hereto hereby agrees that
(i) neither the grant to any SPC nor the exercise by any SPC of such option
shall increase the costs or expenses or otherwise increase or change the
obligations of the Borrowers under this Agreement, (ii) no SPC shall be liable
for any indemnity or similar payment obligation under this Agreement for which a
Lender would be liable, and (iii) the Granting Lender shall for all purposes,
including the approval of any amendment, waiver or other modification of any
provision of any Loan Document, remain the lender of record hereunder and retain
all obligations under this Agreement. The making of a Revolving Advance by a SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Revolving Advance were made by such Granting Lender. In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior debt of any SPC, it will not institute against, or join
any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the
laws of the United States or any State thereof. Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without prior
consent of the Borrowers and the Administrative Agent and without paying any
processing fee therefor, assign all or any portion of its right to receive
payment with respect to any Revolving Advance to the Granting Lender and
(ii) disclose on a confidential basis any non-public information relating to its
funding of Revolving Advances to any rating agency, commercial paper dealer or
provider of any surety or Guarantee or credit or liquidity enhancement to such
SPC.
(h) Notwithstanding anything to the contrary contained herein, any Lender that
is a Fund may create a security interest in all or any portion of the Revolving
Advances owing to it and the Note, if any, held by it to the trustee for holders
of obligations owed, or securities issued, by such Fund as security for such
obligations or securities, provided that unless and until such trustee actually
becomes a Lender in compliance with the other provisions of this Section 10.06,
(i) no such pledge shall release the pledging Lender from any of its obligations
under the Loan Documents and (ii) such trustee shall not be entitled to exercise
any of the rights of a Lender under the Loan Documents even though such trustee
may have acquired ownership rights with respect to the pledged interest through
foreclosure or otherwise.
Section 10.07 Confidentiality. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those

 

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of this Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors) to
any swap or derivative transaction relating to the Borrowers and its
obligations, (g) with the consent of the Borrowers or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to the Administrative Agent or any Lender
on a nonconfidential basis from a source other than the Borrowers. For purposes
of this Section, “Information” means all information received from any Loan
Party relating to any Loan Party or any of their respective businesses, other
than any such information that is available to the Administrative Agent or any
Lender on a nonconfidential basis prior to disclosure by any Loan Party,
provided that, in the case of information received from a Loan Party after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
Section 10.08 Execution in Counterparts. This 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.
Section 10.09 Survival of Representations, etc. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Revolving Advance or Swing Line Advance, and
shall continue in full force and effect as long as any Revolving Advance or
Swing Line Advance or any other Obligation hereunder shall remain unpaid or
unsatisfied or any Letter of Credit shall remain outstanding.
Section 10.10 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

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Section 10.11 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Revolving Advances
or, if it exceeds such unpaid principal, refunded to the Borrowers. In
determining whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to
the extent permitted by applicable Law, (a) characterize any payment that is not
principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations hereunder.
Section 10.12 Governing Law. This Agreement and each of the other Loan Documents
shall be governed by and construed in accordance with the laws of the State of
New York and the applicable laws of the United States of America.
Section 10.13 Joint and Several Liability.
(a) Each of the Borrowers is accepting joint and several liability hereunder in
consideration of the financial accommodations to be provided by the Secured
Parties under this Agreement with respect to the Revolving Advances, Swing Line
Advances, and Reimbursement Obligations, for the mutual benefit, directly and
indirectly, of each of the Borrowers and in consideration of the undertakings of
each of the Borrowers to accept joint and several liability for the Obligations
of each of them.
(b) Each of the Borrowers jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrower, with respect to the payment and
performance of all of the Obligations arising under this Agreement, it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of all the Borrowers without preferences or distinction
among them.
(c) If and to the extent that any of the Borrowers shall fail to make any
payment with respect to any of the Obligations hereunder as and when due or to
perform any of such Obligations in accordance with the terms thereof, then in
each such event the other Borrower will make such payment with respect to, or
perform, such Obligation.
(d) The obligations of each Borrower under the provisions of this Section 10.13
constitute full recourse obligations of such Borrower enforceable against it to
the full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement or any other circumstance
whatsoever.

 

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(e) Except as otherwise expressly provided herein or in the other Loan
Documents, each Borrower hereby waives notice of acceptance of its joint and
several liability, notice of any and all Revolving Advances or Swing Line
Advances made or Letters of Credit issued under this Agreement, notice of
occurrence of any Default or Event of Default, or of any demand for any payment
under this Agreement, notice of any action at any time taken or omitted by any
Secured Party under or in respect of any of the Obligations hereunder, any
requirement of diligence and, generally, all demands, notices and other
formalities of every kind in connection with this Agreement. Each Borrower
hereby assents to, and waives notice of, any extension or postponement of the
time for the payment of any of the Obligations hereunder, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
any Secured Party at any time or times in respect of any default by any Borrower
in the performance or satisfaction of any term, covenant, condition or provision
of this Agreement, any and all other indulgences whatsoever by the Secured
Parties in respect of any of the Obligations hereunder, and the taking,
addition, substitution or release, in whole or in part, at any time or times, of
any security for any of such Obligations or the addition, substitution or
release, in whole or in part, of any Borrower. Without limiting the generality
of the foregoing, each Borrower assents to any other action or delay in acting
or failure to act on the part of the Secured Parties including, without
limitation, any failure strictly or diligently to assert any right or to pursue
any remedy or to comply fully with applicable laws or regulations thereunder,
which might, but for the provisions of this Section 10.13, afford grounds for
terminating, discharging or relieving such Borrower, in whole or in part, from
any of its obligations under this Section 10.13, it being the intention of each
Borrower that, so long as any of the Obligations hereunder remain unsatisfied,
the obligations of such Borrower under this Section 10.13 shall not be
discharged except by performance and then only to the extent of such
performance. The obligations of each Borrower under this Section 10.13 shall not
be diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect to
the other Borrower. The joint and several liability of the Borrowers hereunder
shall continue in full force and effect notwithstanding any absorption, merger,
amalgamation or any other change whatsoever in the name, membership,
constitution or place of formation of either Borrower.
(f) The provisions of this Section 10.13 are made for the benefit of the Secured
Parties and their successors and assigns, and may be enforced by them in
accordance with the terms of this Agreement from time to time against either of
the Borrowers as often as occasion therefor may arise and without requirement on
the part of any Secured Party first to marshall any of their claims or to
exercise any of their rights against the other Borrower or to exhaust any
remedies available to them against the other Borrower or to resort to any other
source or means of obtaining payment of any of the Obligations hereunder or to
elect any other remedy. The provisions of this Section 10.13 shall remain in
effect until all the Obligations hereunder shall have been paid in full or
otherwise fully satisfied and the Revolving Commitments have been terminated. If
at any time, any payment, or any part thereof, made in respect of any of the
Obligations, is rescinded or must otherwise be restored or returned by any
Secured Party upon the insolvency, bankruptcy or reorganization of the
Borrowers, or otherwise, the provisions of this Section 10.13 will forthwith be
reinstated in effect, as though such payment had not been made.
Section 10.14 SUBMISSION TO JURISDICTION.
(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN
NEW YORK CITY OR OF THE UNITED STATES FOR THE EASTERN DISTRICT OF SUCH STATE,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWERS, THE
ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWERS, THE
ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE BORROWERS, THE ADMINISTRATIVE AGENT AND EACH
LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

 

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(b) Each Loan Party has irrevocably appointed CT Corporation System (the
“Process Agent”), with an office on the date hereof at 111 Eighth Ave., New
York, New York, 10011, as its agent to receive on its behalf and on behalf of
its property service of copies of any summons or complaint or any other process
which may be served in any action. Such service may be made by mailing or
delivering a copy of such process to such Loan Party in care of the Process
Agent at the Process Agent’s above address, and each Loan Party hereby
irrevocably authorizes and directs the Process Agent to accept such service on
its behalf. As an alternative method of service, each Loan Party also
irrevocably consents to the service of any and all process in any such action or
proceeding by the mailing of copies of such process to it at the address
specified for it on the signature pages of this Agreement.
(c) Nothing in this Section 10.14 shall affect the right of the Administrative
Agent or any other Lender to serve legal process in any other manner permitted
by law or affect the right of the Administrative Agent or any Lender to bring
any action or proceeding against any Loan Party (as a Borrower or as a
Guarantor) in the courts of any other jurisdiction.
Section 10.15 WAIVER OF JURY. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
Section 10.16 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[Signature pages follow]

 

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EXECUTED as of the date first above written.

            BORROWERS:

MXENERGY INC.
      By:   /s/ Carole R. Artman-Hodge         Carole R. Artman-Hodge       
Executive Vice President        MXENERGY ELECTRIC INC.
      By:   /s/ Carole R. Artman-Hodge         Carole R. Artman-Hodge       
Executive Vice President        GUARANTORS:

MXENERGY HOLDINGS INC.
      By:   /s/ Carole R. Artman-Hodge         Carole R. Artman-Hodge       
Executive Vice President        ONLINE CHOICE INC.
MXENERGY GAS CAPITAL HOLDINGS CORP.
MXENERGY ELECTRIC CAPITAL HOLDINGS CORP.
MXENERGY GAS CAPITAL CORP.
MXENERGY ELECTRIC CAPITAL CORP.
MXENERGY CAPITAL HOLDINGS CORP.
INFOMETER.COM INC.
MXENERGY CAPITAL CORP.
      By:   /s/ Carole R. Artman-Hodge         Carole R. Artman-Hodge       
Vice President        MXENERGY SERVICES INC.
      By:   /s/ Carole R. Artman-Hodge         Carole R. Artman-Hodge       
Chief Operating Officer   

 

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            ADMINISTRATIVE AGENT:

SOCIÉTÉ GÉNÉRALE,
as Administrative Agent
      By:   /s/ Barbara Paulsen         Name:   Barbara Paulsen        Title:  
Managing Director        By:   /s/ Chung-Taek Oh         Name:   Chung-Taek Oh 
      Title:   Vice President        LENDERS:

SOCIÉTÉ GÉNÉRALE
      By:   /s/ Barbara Paulsen         Name:   Barbara Paulsen        Title:  
Managing Director            By:   /s/ Chung-Taek Oh         Name:   Chung-Taek
Oh        Title:   Vice President        WACHOVIA BANK, N.A.
      By:   /s/ John Puckhaber         Name:   John Puckhaber        Title:  
Senior Vice President        CoBANK, ACB
      By:   /s/ Dale Keyes         Name:   Dale Keyes        Title:   Vice
President   

 

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            MORGAN STANLEY BANK
      By:   /s/ Stephen B. King         Name:   Stephen B. King        Title:  
Authorized Signatory        LASALLE BANK NATIONAL ASSOCIATION
      By:   /s/ David Maiorella         Name:   David Maiorella        Title:  
Senior Vice President        ALLIED IRISH BANKS p.l.c.
      By:   /s/ Vaughn Buck         Name:   Vaughn Buck        Title:  
Executive Vice President            By:   /s/ Mark Connelly         Name:   Mark
Connelly        Title:   Senior Vice President        RZB FINANCE LLC
      By:   /s/ Astrid Wilke         Name:   Astrid Wilke        Title:   Vice
President            By:   /s/ Pearl Geffers         Name:   Pearl Geffers     
  Title:   First Vice President   

 

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