Exhibit 10.13

 

[Execution]

 

LOAN AND SECURITY AGREEMENT

 

by and among

 

TRAVELCENTERS OF AMERICA LLC

TA LEASING LLC

TA OPERATING LLC

 

as Borrowers

 

and

 

TRAVELCENTERS OF AMERICA HOLDING COMPANY LLC

PETRO STOPPING CENTERS, L.P.

PETRO DISTRIBUTING INC.

PETRO FINANCIAL CORPORATION

PETRO HOLDINGS FINANCIAL CORPORATION

TCA PSC GP LLC

 

as Guarantors

 

WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL)

as Agent

 

and

 

THE LENDERS FROM TIME TO TIME PARTY HERETO

as Lenders

 

and

 

WACHOVIA CAPITAL MARKETS, LLC

as Sole Lead Arranger, Manager and Bookrunner

 

NATIONAL CITY BUSINESS CREDIT, INC.

as Syndication Agent

 

Dated: November 19, 2007

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

 

Page No.

 

 

 

 

SECTION 1.

DEFINITIONS

1

 

 

 

SECTION 2.

CREDIT FACILITIES

36

 

2.1

Loans

36

 

2.2

Letter of Credit Accommodations

37

 

2.3

Increase in Maximum Credit

41

 

2.4

Decrease in Maximum Credit

42

 

2.5

Commitments

43

 

 

 

 

SECTION 3.

INTEREST AND FEES; PROCEDURES FOR BORROWING

43

 

3.1

Interest; Procedures for Borrowing

43

 

3.2

Fees

44

 

3.3

Changes in Laws and Increased Costs of Loans

45

 

 

 

 

SECTION 4.

CONDITIONS PRECEDENT

47

 

4.1

Conditions Precedent to Initial Loans and Letter of Credit Accommodations

47

 

4.2

Conditions Precedent to All Loans and Letter of Credit Accommodations

49

 

 

 

 

SECTION 5.

GRANT AND PERFECTION OF SECURITY INTEREST

49

 

5.1

Grant of Security Interest

49

 

5.2

Perfection of Security Interests

51

 

 

 

 

SECTION 6.

COLLECTION AND ADMINISTRATION

55

 

6.1

Borrowers’ Loan Accounts

55

 

6.2

Statements

55

 

6.3

Collection of Accounts

55

 

6.4

Payments

57

 

6.5

Authorization to Make Loans

58

 

6.6

Use of Proceeds

58

 

6.7

Appointment of Administrative Borrower as Agent for Requesting Loans and
Receipts of Loans and Statements

59

 

6.8

Pro Rata Treatment

59

 

6.9

Sharing of Payments, Etc

59

 

6.10

Settlement Procedures

60

 

6.11

Obligations Several; Independent Nature of Lenders’ Rights

63

 

6.12

Bank Products

63

 

6.13

Taxes

63

 

 

 

 

SECTION 7.

COLLATERAL REPORTING AND COVENANTS

66

 

7.1

Collateral Reporting

66

 

7.2

Accounts Covenants

67

 

7.3

Inventory Covenants

69

 

i

--------------------------------------------------------------------------------

 

 

7.4

Equipment and Real Property Covenants

69

 

7.5

Power of Attorney

70

 

7.6

Right to Cure

71

 

7.7

Access to Premises

71

 

 

 

 

SECTION 8.

REPRESENTATIONS AND WARRANTIES

71

 

8.1

Existence, Power and Authority

72

 

8.2

Name; State of Organization; Chief Executive Office; Collateral Locations

72

 

8.3

Financial Statements; No Material Adverse Change

73

 

8.4

Priority of Liens; Title to Properties

73

 

8.5

Tax Returns

73

 

8.6

Litigation

74

 

8.7

Compliance with Other Agreements and Applicable Laws

74

 

8.8

Environmental Compliance

74

 

8.9

Employee Benefits

75

 

8.10

Bank Accounts

76

 

8.11

Intellectual Property

76

 

8.12

Subsidiaries; Affiliates; Capitalization; Solvency

77

 

8.13

Labor Disputes

77

 

8.14

Restrictions on Subsidiaries

77

 

8.15

Material Contracts

78

 

8.16

Credit Card Agreements

78

 

8.17

Interrelated Businesses

78

 

8.18

Payable Practices

79

 

8.19

Customer Loyalty Account Assets

79

 

8.20

Propco. Each Propco does not own, and will not own or acquire, any assets other
than Real Property and Equipment

79

 

8.21

Accuracy and Completeness of Information

79

 

8.22

Survival of Warranties; Cumulative

79

 

 

 

 

SECTION 9.

AFFIRMATIVE AND NEGATIVE COVENANTS

79

 

9.1

Maintenance of Existence

79

 

9.2

New Collateral Locations

80

 

9.3

Compliance with Laws, Regulations, Etc.

80

 

9.4

Payment of Taxes and Claims

81

 

9.5

Insurance

81

 

9.6

Financial Statements and Other Information

82

 

9.7

Sale of Assets, Consolidation, Merger, Dissolution, Etc.

84

 

9.8

Encumbrances

87

 

9.9

Indebtedness

89

 

9.10

Loans, Investments, Etc.

91

 

9.11

Dividends and Redemptions

94

 

9.12

Transactions with Affiliates and HPT Companies

95

 

9.13

Compliance with ERISA

95

 

9.14

End of Fiscal Years; Fiscal Quarters

96

 

9.15

Change in Business

96

 

ii

--------------------------------------------------------------------------------

 

 

9.16

Limitation of Restrictions Affecting Subsidiaries

96

 

9.17

Minimum Fixed Charge Coverage Ratio

96

 

9.18

Credit Card Agreements

96

 

9.19

License Agreements

97

 

9.20

Costs and Expenses

98

 

9.21

Further Assurances

98

 

9.22

Petro Existing Letters of Credit

100

 

9.23

Petro Existing Security Agreement

100

 

 

 

 

SECTION 10.

EVENTS OF DEFAULT AND REMEDIES

100

 

10.1

Events of Default

100

 

10.2

Remedies

102

 

 

 

 

SECTION 11.

JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

105

 

11.1

Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver

106

 

11.2

Waiver of Notices

107

 

11.3

Amendments and Waivers

107

 

11.4

Waiver of Counterclaims

109

 

11.5

Indemnification

109

 

 

 

 

SECTION 12.

THE AGENT

110

 

12.1

Appointment, Powers and Immunities

110

 

12.2

Reliance by Agent

110

 

12.3

Events of Default

110

 

12.4

Wachovia in its Individual Capacity

111

 

12.5

Indemnification

111

 

12.6

Non-Reliance on Agent and Other Lenders

112

 

12.7

Failure to Act

112

 

12.8

Additional Loans

112

 

12.9

Concerning the Collateral and the Related Financing Agreements

113

 

12.10

Field Audit, Examination Reports and other Information; Disclaimer by Lenders

113

 

12.11

Collateral Matters

113

 

12.12

Agency for Perfection

115

 

12.13

Successor Agent

116

 

12.14

Other Agent Designations

116

 

 

 

 

SECTION 13.

TERM OF AGREEMENT; MISCELLANEOUS

116

 

13.1

Term

116

 

13.2

Interactive Provisions

117

 

13.3

Notices

119

 

13.4

Partial Invalidity

119

 

13.5

Confidentiality

119

 

13.6

Successors

121

 

13.7

Assignments; Participations

121

 

iii

--------------------------------------------------------------------------------

 

 

13.8

USA Patriot Act

123

 

13.9

Entire Agreement

123

 

13.10

Counterparts, Etc

123

 

iv

--------------------------------------------------------------------------------

 

INDEX TO

EXHIBITS AND SCHEDULES

 

 

Exhibit A

Form of Assignment and Acceptance

 

 

 

 

Exhibit B

Information Certificate

 

 

 

 

Exhibit C

Form of Compliance Certificate

 

 

 

 

Exhibit D

Form of Borrowing Base Certificate

 

 

 

 

Schedule 1

Commitments

 

 

 

 

Schedule 1.18

Excluded Capital Leases

 

 

 

 

Schedule 1.66

Excluded Subsidiaries

 

 

 

 

Schedule 1.118

Petro Existing Letters of Credit

 

 

 

 

Schedule 8.16

Credit Card Agreements

 

v

--------------------------------------------------------------------------------

 

LOAN AND SECURITY AGREEMENT

 

This Loan and Security Agreement dated November 19, 2007 is entered into by and
among TravelCenters of America LLC, a Delaware limited liability company,
(“TravelCenters” or “Parent”), TA Leasing LLC, a Delaware limited liability
company (“TA Leasing”), TA Operating LLC, a Delaware limited liability company
(“TA Operating,” and together with TravelCenters, TA Leasing and each other
Person that becomes a “Borrower” after the date hereof in accordance with
Section 9.21 hereof, each individually a “Borrower” and collectively,
“Borrowers”), TravelCenters of America Holding Company LLC, a Delaware limited
liability Company (“Holding”), Petro Stopping Centers, L.P., a Delaware limited
partnership (“Petro”), Petro Distributing Inc., a Delaware corporation (“Petro
Distributing”), Petro Financial Corporation, a Delaware corporation (“Petro
Financial”), Petro Holdings Financial Corporation, a Delaware corporation
(“Petro Holdings”), TCA PSC GP LLC, a Delaware limited liability company (“TCA”
and together with Holding, Petro, Petro Distributing, Petro Financial, Petro
Holdings and each other Person that becomes a “Guarantor” after the date hereof
in accordance with Section 9.21 hereof, each individually a “Guarantor” and
collectively, “Guarantors”), the parties hereto from time to time as lenders,
whether by execution of this Agreement or an Assignment and Acceptance (each
individually, a “Lender” and collectively, “Lenders”) and Wachovia Capital
Finance Corporation (Central), an Illinois corporation, in its capacity as agent
for Lenders (in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, Borrowers and Guarantors have requested that Agent and Lenders enter
into financing arrangements with Borrowers pursuant to which Lenders may make
loans and provide other financial accommodations to Borrowers; and

 

WHEREAS, each Lender is willing to agree (severally and not jointly) to make
such loans and provide such financial accommodations to Borrowers on a pro rata
basis according to its Commitment (as defined below) on the terms and conditions
set forth herein and Agent is willing to act as agent for Lenders on the terms
and conditions set forth herein and the other Financing Agreements;

 

NOW, THEREFORE, in consideration of the mutual conditions and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

 

SECTION 1.                              DEFINITIONS

 

For purposes of this Agreement, the following terms shall have the respective
meanings given to them below:

 

1.1  “Accounts” shall mean, as to each Borrower and Guarantor, all present and
future rights of such Borrower and Guarantor to payment of a monetary
obligation, whether or not earned by performance, which is not evidenced by
chattel paper or an instrument, (a) for property that has been or is to be sold,
leased, licensed, assigned, or otherwise disposed of, (b) for services rendered
or to be rendered, (c) for a secondary obligation incurred or to be incurred,

 

--------------------------------------------------------------------------------

 

or (d) arising out of the use of a credit or charge card or information
contained on or for use with the card.

 

1.2  “Acquired Business” shall have the meaning specified in the definition of
Permitted Acquisitions.

 

1.3  “Adjusted Excess Availability” shall mean the amount, as determined by
Agent, calculated at any date, equal to: (a) the Borrowing Base, minus (b) the
amount of all then outstanding Revolving Loans, minus (c) the amount of all then
outstanding Letter of Credit Accommodations.

 

1.4  “Adjusted Eurodollar Rate” shall mean, with respect to each Interest Period
for any Eurodollar Rate Loan comprising part of the same borrowing (including
conversions, extensions and renewals), the rate per annum determined by dividing
(a) the London Interbank Offered Rate for such Interest Period by (b) a
percentage equal to: (i) one (1) minus (ii) the Reserve Percentage. For purposes
hereof, “Reserve Percentage” shall mean for any day, that percentage (expressed
as a decimal) which is in effect from time to time under Regulation D of the
Board of Governors of the Federal Reserve System (or any successor), as such
regulation may be amended from time to time or any successor regulation, as the
maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable with respect
to Eurocurrency liabilities as that term is defined in Regulation D (or against
any other category of liabilities that includes deposits by reference to which
the interest rate of Eurodollar Rate Loans is determined), whether or not any
Lender has any Eurocurrency liabilities subject to such reserve requirement at
that time. Eurodollar Loans shall be deemed to constitute Eurocurrency
liabilities and as such shall be deemed subject to reserve requirements without
benefits of credits for proration, exceptions or offsets that may be available
from time to time to a Lender. The Adjusted Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the Reserve
Percentage.

 

1.5  “Administrative Borrower” shall mean TravelCenters of America LLC, a
Delaware liability company in its capacity as Administrative Borrower on behalf
of itself and the other Borrowers pursuant to Section 6.7 hereof and its
successors and assigns in such capacity.

 

1.6  “Affiliate” shall mean, with respect to a specified Person, any other
Person which directly or indirectly, through one or more intermediaries,
controls or is controlled by or is under common control with such Person, and
without limiting the generality of the foregoing, includes (a) any Person which
beneficially owns or holds ten (10%) percent or more of any class of Voting
Stock of such Person or other equity interests in such Person, (b) any Person of
which such Person beneficially owns or holds ten (10%) percent or more of any
class of Voting Stock or in which such Person beneficially owns or holds ten
(10%) percent or more of the equity interests and (c) any director or executive
officer of such Person. For the purposes of this definition, the term “control”
(including with correlative meanings, the terms “controlled by” and “under
common control with”), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Stock, by agreement or otherwise. For the avoidance of doubt, no HPT Company
shall be deemed to be an Affiliate of any Borrower or Guarantor unless either
such HPT Company directly or indirectly beneficially owns or holds ten (10%)
percent or more of any class of Voting Stock or other equity interests in such
Borrower or Guarantor or any Borrower or Guarantor beneficially directly or
indirectly

 

2

--------------------------------------------------------------------------------

 

owns or holds ten (10%) percent or more of any class of Voting Stock or other
equity interests in such HPT Company.

 

1.7  “Agent” shall mean Wachovia Capital Finance Corporation (Central), in its
capacity as agent on behalf of Lenders pursuant to the terms hereof and any
replacement or successor agent hereunder.

 

1.8  “Agent Payment Account” shall mean account no. 5000000030266 of Agent at
Wachovia Bank, National Association, or such other account of Agent as Agent
may from time to time designate to Administrative Borrower as the Agent Payment
Account for purposes of this Agreement and the other Financing Agreements.

 

1.9  “Applicable Margin” shall mean, at any time, as to the interest rate for
Prime Rate Loans and the interest rate for Eurodollar Rate Loans, the applicable
percentage (on a per annum basis) set forth below if the Monthly Average
Adjusted Excess Availability for the immediately preceding calendar month is at
or within the amounts indicated for such percentage as of the last day of the
immediately preceding calendar month:

 

Tier

 

Monthly Average Adjusted 
Excess Availability

 

Applicable 
Eurodollar Rate 
Margin

 

Applicable 
Prime Rate 
Margin

 

1

 

Greater than $40,000,000

 

1.00

%

0

%

2

 

Less than or equal to $40,000,000 and greater than $20,000,000

 

1.25

%

0

%

3

 

Less than or equal to $20,000,000

 

1.50

%

.50

%

 

provided, that, (i) the Applicable Margin shall be calculated and established
once each calendar month and shall remain in effect until adjusted thereafter
after the end of the next calendar month, (ii) the Applicable Margin through
March 31, 2008 shall be the amount for Tier 1 set forth above.

 

1.10  “Assignment and Acceptance” shall mean an Assignment and Acceptance
substantially in the form of Exhibit A attached hereto (with blanks
appropriately completed) delivered to Agent in connection with an assignment of
a Lender’s interest hereunder in accordance with the provisions of Section 13.7
hereof.

 

1.11  “Bank Products Provider” shall mean Agent, any Lender, any Affiliate of
any Lender or any other financial institution (in each case as to any Lender,
Affiliate or other financial institution to the extent approved by Agent, which
shall not be unreasonably withheld or delayed) that provides any Bank Products
to Borrowers or Guarantors.

 

1.12  “Bank Products” shall mean any one or more of the following types or
services or facilities provided to a Borrower or Guarantor by Agent, any Lender
or any Affiliate

 

3

--------------------------------------------------------------------------------

 

of any Lender or any other financial institution acceptable to Agent: (a) credit
cards or stored value cards or (b) cash management or related services,
including (i) the automated clearinghouse transfer of funds for the account of a
Borrower or Guarantor pursuant to agreement or overdraft for any accounts of
Borrowers or Guarantors maintained by Agent, any Lender or any Affiliate of any
Lender (in each case to the extent approved by Agent) that are subject to the
control of Agent pursuant to any Deposit Account Control Agreement to which
Agent, such Affiliate of Agent, Lender or Affiliate of Lender is a party, as
applicable, and (ii) controlled disbursement services and (iii) Hedge Agreements
if and to the extent permitted hereunder.

 

1.13  “Blocked Accounts” shall have the meaning set forth in Section 6.3 hereof.

 

1.14  “Borrowing Base” shall mean, at any time, the amount equal to:

 

(A)                                  THE AMOUNT EQUAL TO : (I) EIGHTY FIVE (85%)
OF ELIGIBLE ACCOUNTS, PLUS (II) EIGHTY FIVE (85%) PERCENT OF ELIGIBLE CREDIT
CARD RECEIVABLES, PLUS (III) THE LESSER OF (A) THE FUEL INVENTORY LOAN LIMIT OR
(B) EIGHTY (80%) PERCENT MULTIPLIED BY THE VALUE OF ELIGIBLE INVENTORY
CONSISTING OF GASOLINE AND DIESEL FUEL, PLUS (IV) THE LESSER OF (A) SIXTY FIVE
(65%) PERCENT MULTIPLIED BY THE VALUE OF ELIGIBLE INVENTORY (OTHER THAN ELIGIBLE
INVENTORY CONSISTING OF GASOLINE OR DIESEL FUEL) OR (B) EIGHTY FIVE (85%)
PERCENT OF THE NET RECOVERY PERCENTAGE MULTIPLIED BY THE VALUE OF SUCH ELIGIBLE
INVENTORY, PLUS (V) THE FIXED ASSET AVAILABILITY, PLUS (VI) ONE HUNDRED (100%)
PERCENT OF ELIGIBLE CASH COLLATERAL,

 

minus

 

(B)                                 RESERVES.

 

The amounts of Eligible Inventory of any Borrower shall, at Agent’s option, be
determined based on the lesser of the amount of Inventory set forth in the
general ledger of such Borrower or the perpetual inventory records maintained by
such Borrower.

 

1.15  “Borrowing Base Certificate” shall mean a certificate substantially in the
form of Exhibit D hereto, as such form may from time to time be modified by
Agent, which is duly completed (including all schedules thereto) and executed by
an authorized officer of Administrative Borrower and delivered to Agent.

 

1.16  “Business Day” shall mean any day other than a Saturday, Sunday, or other
day on which commercial banks are authorized or required to close under the laws
of the State of Illinois, the State of New York, or the State of North Carolina,
and a day on which Agent is open for the transaction of business, except that if
a determination of a Business Day shall relate to any Eurodollar Rate Loans, the
term Business Day shall also exclude any day on which banks are closed for
dealings in dollar deposits in the London interbank market or other applicable
Eurodollar Rate market.

 

1.17  “Capital Expenditures” shall mean, for any period, as to any Person and
its Subsidiaries, all expenditures (without duplication) by such Person and its
Subsidiaries for, or contracts for expenditures (other than contracts for such
expenditures where payments for such expenditures are to be made in any
subsequent period) for, any fixed or capital assets or improvements, or for
replacements, substitutions or additions thereto, which have a useful life of

 

4

--------------------------------------------------------------------------------

 

more than one year (1) year, including, but not limited to, the direct or
indirect acquisition of such assets by way of offset items or otherwise and
obligations under Capital Leases incurred in respect of such fixed or capital
assets during such period.

 

1.18  “Capital Leases” shall mean, as applied to any Person, any lease of (or
any agreement conveying the right to use) any property (whether real, personal
or mixed) by such Person as lessee which in accordance with GAAP, is required to
be reflected as a liability on the balance sheet of such Person, excluding each
lease listed on Schedule 1.18 hereto.

 

1.19  “Capital Stock” shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person’s capital stock or partnership, limited liability company or other
equity interests at any time outstanding, and any and all rights, warrants or
options exchangeable for or convertible into such capital stock or other
interests (but excluding any debt security that is exchangeable for or
convertible into such capital stock).

 

1.20  “Cash Dominion Period” shall mean a period either (a) commencing on the
date that an Event of Default shall have occurred and ending on the date
thereafter that such Event of Default shall cease to be continuing or
(b) commencing on the date that Adjusted Excess Availability shall have fallen
below the amount equal to twenty (20%) percent of the Maximum Credit and ending
on the earlier of (i) the date thereafter that Adjusted Excess Availability has
been greater than the amount equal to twenty-five (25%) percent of the Maximum
Credit for ninety (90) consecutive days or (ii) the date thereafter that
(A) Borrowers and Guarantors have received cash proceeds of the issuance and
sale of Capital Stock of Parent in accordance with Section 9.7(b)(iii) hereof,
cash proceeds from the sale or disposition of assets in accordance with
Section 9.7(b)(ii), (x), (xi) or (xii), or cash proceeds of Indebtedness
incurred in accordance with Section 9.9(e) or (h) hereof, (B) no Loans are
outstanding and (C) Adjusted Excess Availability is greater than the sum of the
outstanding Letter of Credit Accommodations plus twenty-five (25%) percent of
the Maximum Credit.

 

1.21  “Cash Equivalents” shall mean, at any time, (a) any evidence of
Indebtedness with a maturity date of ninety (90) days or less from the date of
acquisition issued or directly and fully guaranteed or insured by the United
States of America or any agency or instrumentality thereof; provided, that, the
full faith and credit of the United States of America is pledged in support
thereof; (b) certificates of deposit or bankers’ acceptances with a maturity of
ninety (90) days or less of any financial institution that is a member of the
Federal Reserve System having combined capital and surplus and undivided profits
of not less than $1,000,000,000; (c) commercial paper (including variable rate
demand notes) with a maturity of ninety (90) days or less issued by a
corporation (except an Affiliate of any Borrower or Guarantor) organized under
the laws of any State of the United States of America or the District of
Columbia and rated at least A-1 by Standard & Poor’s Ratings Service, a division
of The McGraw-Hill Companies, Inc. or at least P-1 by Moody’s Investors
Service, Inc.; (d) repurchase obligations with a term of not more than thirty
(30) days for underlying securities of the types described in clause (a) above
entered into with any financial institution having combined capital and surplus
and undivided profits of not less than $1,000,000,000; (e) repurchase agreements
and reverse repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the United States of America or issued
by any governmental agency thereof and backed by the full faith and credit of
the United States of America, in each case maturing within ninety (90) days or
less from the date of acquisition; provided, that, the terms of such agreements

 

5

--------------------------------------------------------------------------------

 

comply with the guidelines set forth in the Federal Financial Agreements of
Depository Institutions with Securities Dealers and Others, as adopted by the
Comptroller of the Currency on October 31, 1985; and (f) investments in money
market funds and mutual funds which invest substantially all of their assets in
securities of the types described in clauses (a) through (e) above.

 

1.22  “Change of Control” shall mean, except as permitted under Section 9.7
hereof (other than in respect of clause (c) below), (a) the transfer (in one
transaction or a series of transactions) of all or substantially all of the
assets of any Borrower or Guarantor to any Person or group (as such term is used
in Section 13(d)(3) of the Exchange Act); (b) the liquidation or dissolution of
any Borrower or Guarantor or the adoption of a plan by the stockholders of any
Borrower or Guarantor relating to the dissolution or liquidation of such
Borrower or Guarantor; (c) the acquisition by any Person or group (as such term
is used in Section 13(d)(3) of the Exchange Act) of beneficial ownership,
directly or indirectly, of 9.8% or more of the voting power of the total
outstanding Voting Stock of Parent; (d) during any period of two (2) consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors of any Borrower or Guarantor (together with any new directors whose
nomination for election by the stockholders of such Borrower or Guarantor, as
the case may be, was approved by a vote of at least sixty-six and two-thirds (66
2/3%) percent of the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of any Borrower or Guarantor then still in office;  (e) the
failure of Parent to directly own and control one hundred (100%) percent of the
voting power of the total outstanding Voting Stock of Holding, TCA or TA
Leasing; (f) the failure of Holding to directly own and control one hundred
(100%) percent of the voting power of the total outstanding Voting Stock of TA
Operating; (g) the failure of Parent and TCA, collectively, to directly own and
control one hundred (100%) percent of the voting power of the total outstanding
Voting Stock of Petro; or (h) the failure of Petro to directly own and control
one hundred (100%) percent of the voting power of the total outstanding Voting
Stock of Petro Distributing, Petro Financial or Petro Holdings.

 

1.23  “Code” shall mean the Internal Revenue Code of 1986, as the same now
exists or may from time to time hereafter be amended, modified, recodified or
supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.

 

1.24  “Collateral” shall have the meaning set forth in Section 5 hereof.

 

1.25  “Collateral Access Agreement” shall mean an agreement in writing, in
form and substance reasonably satisfactory to Agent, from any lessor of premises
to any Borrower or Guarantor, or any other person to whom any Collateral is
consigned or who has custody, control or possession of any such Collateral or is
otherwise the owner or operator of any premises on which any of such Collateral
is located, in favor of Agent with respect to the Collateral at such premises or
otherwise in the custody, control or possession of such lessor, consignee or
other person.

 

1.26  “Commercial Letter of Credit” shall mean any Letter of Credit
Accommodation issued for the purpose of providing the primary manner of payment
for the purchase price of goods or services by a Borrower or Guarantor in the
ordinary course of the business of such Borrower or Guarantor.

 

6

--------------------------------------------------------------------------------

 

1.27  “Commitment” shall mean, at any time, as to each Lender, the principal
amount set forth opposite such Lender’s name on Schedule 1 hereto or on
Schedule 1 to the Assignment and Acceptance Agreement pursuant to which such
Lender became a Lender hereunder in accordance with the provisions of
Section 13.7 hereof, as the same may be adjusted from time to time in accordance
with the terms hereof; sometimes being collectively referred to herein as
“Commitments”.

 

1.28  “Compliance Certificate” shall have the meaning set forth in
Section 9.6(a) hereof.

 

1.29  “Compliance Period” shall mean the period commencing on the date on which
Excess Availability plus Unrestricted Cash has fallen below an amount equal to
thirty-five (35%) percent of the Maximum Credit and ending on a subsequent date
on which Excess Availability plus Unrestricted Cash has been greater than an
amount equal to forty (40%) percent of the Maximum Credit for each day during
three consecutive calendar months.

 

1.30  “Consolidated Net Income” shall mean, with respect to any Person for any
period, the aggregate of the net income (loss) of such Person and its
Subsidiaries, on a consolidated basis, for such period (excluding to the extent
included therein any extraordinary and/or one time or unusual and non-recurring
gains or any non-cash losses) after deducting all charges which should be
deducted before arriving at the net income (loss) for such period and, without
duplication, after deducting the Provision for Taxes for such Period, all as
determined in accordance with GAAP; provided, that, (a) the net income of any
Person that is not a Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid or payable to such Person or a Subsidiary of such Person;
(b) except to the extent included pursuant to the foregoing clause, the net
income of any Person accrued prior to the date it becomes a Subsidiary of such
Person or is merged into or consolidated with such Person or any of its
Subsidiaries of that Person’s assets are acquired by such Person or by its
Subsidiaries shall be excluded; and (c) the net income (if positive) of any
Subsidiary (other than a Borrower or Obligor) to the extent that the declaration
or payment of dividends or similar distributions by such Subsidiary to such
Person or to any other wholly-owned Subsidiary of such Person is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
such Subsidiary shall be excluded. For the purposes of this definition, net
income excludes any gain or non-cash loss, together with any related Provision
for Taxes for such gain or non-cash loss, realized upon the sale or other
disposition of any assets that are not sold in the ordinary course of business
(including, without limitation, dispositions pursuant to sale and leaseback
transactions) or of any Capital Stock of such Person or a Subsidiary of such
Person and any net income realized or loss incurred as a result of changes in
accounting principles or the application thereof to such Person.

 

1.31  “Consolidated Rental Expense” shall mean, with respect to any Person for
any period, the aggregate amount of all real property rental expense of such
Person and its Subsidiaries, on a consolidated basis, as determined in
accordance with GAAP.

 

1.32  “Credit Card Acknowledgments” shall mean, collectively, the agreements by
Credit Card Issuers or Credit Card Processors who are parties to Credit Card
Agreements in favor of Agent acknowledging Agent’s first priority security
interest, for and on behalf of Lenders, in the monies due and to become due to a
Borrower or Guarantor (including, without

 

7

--------------------------------------------------------------------------------

 

limitation, credits and reserves) under the Credit Card Agreements, and agreeing
to transfer all such amounts to the Blocked Accounts, as the same now exist or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced; sometimes being referred to herein individually as a “Credit Card
Acknowledgement.”

 

1.33  “Credit Card Agreements” shall mean all agreements now or hereafter
entered into by any Borrower or Guarantor for the benefit of any Borrower or
Guarantor, in each case with any Credit Card Issuer or any Credit Card
Processor, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, including, but not
limited to, the agreements set forth on Schedule 8.16 hereto.

 

1.34  “Credit Card Issuer” shall mean any person (other than a Borrower or
Guarantor) who issues or whose members issue credit cards, including, without
limitation, MasterCard or VISA bank credit or debit cards or other bank credit
or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc.
or Visa International and American Express, Discover, Diners Club, Carte Blanche
and other non-bank credit or debit cards, including, without limitation, credit
or debit cards issued by or through Comdata Network, Inc., EFS Transportation
Services, Inc., American Express Travel Related Services Company, Inc., and
Discover Financial Services, Inc.

 

1.35  “Credit Card Processor” shall mean any servicing or processing agent or
any factor or financial intermediary who facilitates, services, processes or
manages the credit authorization, billing transfer and/or payment procedures
with respect to any Borrower’s or Guarantor’s sales transactions involving
credit card or debit card purchases by customers using credit cards or debit
cards issued by any Credit Card Issuer.

 

1.36  “Credit Card Receivables” shall mean, collectively, (a) all present and
future rights of any Borrower or Guarantor to payment from any Credit Card
Issuer or Credit Card Processor arising from the sales of goods or rendition of
services to customers who have purchased such goods or services using a credit
or debit card and (b) all present and future rights of any Borrower or Guarantor
to payment from any Credit Card Issuer or Credit Card Processor in connection
with the sale or transfer of Accounts arising pursuant to the sale of goods or
rendition of services to customers who have purchased such goods or services
using a credit card or a debit card, including, but not limited to, all amounts
at any time due or to become due from any Credit Card Issuer or Credit Card
Processor under the Credit Card Agreements or otherwise.

 

1.37  “Credit Facility” shall mean the Loans and Letter of Credit Accommodations
provided to or for the benefit of any Borrower pursuant to Sections 2.1 and 2.2
hereof.

 

1.38  “Customer Loyalty Accounts” shall mean, collectively, (a) the investment
account of Petro maintained with Wells Fargo Institutional Securities, LLC which
bears account number 793-2466633981 and (b) one other investment account of a
Borrower or Guarantor established after the date hereof designated in writing by
the Administrative Borrower to Agent as a Customer Loyalty Account and agreed to
by Agent.

 

1.39  “Customer Loyalty Account Assets” shall mean the Customer Loyalty Accounts
and all cash and Cash Equivalents deposited therein or credit thereto; provided,
that, in no event shall the aggregate balance of all cash and Cash Equivalents
deposited therein or

 

8

--------------------------------------------------------------------------------

 

credited thereto at any time exceed the lesser of (a) the accrued and unpaid
amounts owing by Borrowers and Guarantors under a customer loyalty program
maintained by Borrowers and Guarantors or (b) $8,000,000.

 

1.40  “Debt Incurrence Ratio” shall mean, as to any Person, with respect to any
period, the ratio of (a) EBITDAR of such Person for such Period, to (b) the
Fixed Charges of such Person for such period.

 

1.41  “Default” shall mean an act, condition or event which with notice or
passage of time or both would constitute an Event of Default.

 

1.42  “Defaulting Lender” shall have the meaning set forth in Section 6.10
hereof.

 

1.43  “Deposit Account Control Agreement” shall mean an agreement in writing, in
form and substance satisfactory to Agent, by and among Agent, the Borrower or
Guarantor with a deposit account at any bank and the bank at which such deposit
account is at any time maintained.

 

1.44  “Disqualified Capital Stock” shall mean any Capital Stock if any Borrower
or Guarantor shall be required (a) to pay any cash dividends or cash
distributions in respect of such Capital Stock or (b) to purchase or redeem such
Capital Stock or make any payment in respect of such Capital Stock, in each case
except as otherwise permitted by Section 9.11 hereof.

 

1.45  “EBITDA” shall mean, as to any Person, with respect to any period, an
amount equal to (without duplication): (a) the Consolidated Net Income of such
Person and its Subsidiaries for such period, plus (b) the sum of the following
(in each case to the extent deducted in the computation of Consolidated Net
Income of such Income): (i) depreciation, amortization and other non-cash
charges (including, but not limited to, imputed interest, compensation expenses
settled in Capital Stock of such Person, and deferred compensation) for such
period, all in accordance with GAAP, plus (ii) Interest Expense for such period,
plus (iii) the Provision for Taxes for such period, plus (iv) restructuring
charges for severance, retention, relocation and similar employee payments
incurred during such period, plus (v) non-recurring costs and expenses incurred
during such period in connection with the issuance, extinguishment or defeasance
of Indebtedness of such Person, plus (vi) extraordinary items and the cumulative
effects of a change in accounting principles of such Person during such period,
plus (vii) any loss from discontinued operations of such Person during such
period, plus (viii) other non-recurring charges incurred by such Person during
such period (to the extent approved by Agent in writing), minus (c) any income
from discontinued operations of such Person during such period (to the extent
included in the computation of Consolidated Net Income of such Person);
provided, that, with respect to each of the amounts described in clauses
(b)(iv) through (b)(viii) and (c) above, Agent shall have received calculations
and supporting information relating thereto, which are in form and substance
reasonably satisfactory to Agent.

 

1.46  “EBITDAR” shall mean, as to any Person, with respect to any period, an
amount equal to (without duplication): (a) the EBITDA of such Person and its
Subsidiaries for such period, plus (b) Consolidated Rental Expense for such
period (to the extent deducted in the computation of Consolidated Net Income of
such Person).

 

9

--------------------------------------------------------------------------------

 

1.47  “Eligible Accounts” shall mean Accounts (other than Credit Card
Receivables) created by a Borrower which satisfy and continue to satisfy the
criteria set forth below:

 

(A)                                  SUCH ACCOUNTS ARISE FROM THE ACTUAL AND
BONA FIDE SALE AND DELIVERY OF GOODS BY SUCH BORROWER OR RENDITION OF SERVICES
BY SUCH BORROWER IN THE ORDINARY COURSE OF ITS BUSINESS (INCLUDING ACCOUNTS
WHICH ARISE FROM ANY SALE MADE BY ANY RESTAURANT OWNED AND OPERATED BY A
BORROWER) WHICH TRANSACTIONS ARE COMPLETED IN ACCORDANCE WITH THE TERMS AND
PROVISIONS CONTAINED IN ANY DOCUMENTS RELATED THERETO;

 

(B)                                 SUCH ACCOUNTS ARE NOT UNPAID MORE THAN
THIRTY (30) (OR, SOLELY IN THE CASE OF ACCOUNTS ARISING FROM GOODS SOLD OR
SERVICES RENDERED BY A BORROWER’S REPAIR SHOP, SIXTY (60)) DAYS AFTER THE DATE
OF THE ORIGINAL INVOICE FOR THEM;

 

(C)                                  SUCH ACCOUNTS COMPLY WITH THE TERMS AND
CONDITIONS CONTAINED IN SECTION 7.2(B) OF THIS AGREEMENT;

 

(D)                                 SUCH ACCOUNTS DO NOT ARISE FROM SALES ON
CONSIGNMENT, GUARANTEED SALE, SALE AND RETURN, SALE ON APPROVAL, OR OTHER TERMS
UNDER WHICH PAYMENT BY THE ACCOUNT DEBTOR MAY BE CONDITIONAL OR CONTINGENT;

 

(E)                                  THE CHIEF EXECUTIVE OFFICE OF THE ACCOUNT
DEBTOR WITH RESPECT TO SUCH ACCOUNTS IS LOCATED IN THE UNITED STATES OF AMERICA
OR CANADA (PROVIDED, THAT, PROMPTLY UPON AGENT’S REQUEST, SUCH BORROWER SHALL
EXECUTE AND DELIVER, OR CAUSE TO BE EXECUTED AND DELIVERED, SUCH OTHER
AGREEMENTS, DOCUMENTS AND INSTRUMENTS AS MAY BE REASONABLY REQUIRED BY AGENT TO
PERFECT THE SECURITY INTERESTS OF AGENT IN THOSE ACCOUNTS OF AN ACCOUNT DEBTOR
WITH ITS CHIEF EXECUTIVE OFFICE OR PRINCIPAL PLACE OF BUSINESS IN CANADA IN
ACCORDANCE WITH THE APPLICABLE LAWS OF THE PROVINCE OF CANADA IN WHICH SUCH
CHIEF EXECUTIVE OFFICE OR PRINCIPAL PLACE OF BUSINESS IS LOCATED AND TAKE OR
CAUSE TO BE TAKEN SUCH OTHER AND FURTHER ACTIONS AS AGENT MAY REASONABLY REQUEST
TO ENABLE AGENT AS SECURED PARTY WITH RESPECT THERETO TO COLLECT SUCH ACCOUNTS
UNDER THE APPLICABLE FEDERAL OR PROVINCIAL LAWS OF CANADA) OR, AT AGENT’S
OPTION, IF THE CHIEF EXECUTIVE OFFICE AND PRINCIPAL PLACE OF BUSINESS OF THE
ACCOUNT DEBTOR WITH RESPECT TO SUCH ACCOUNTS IS LOCATED OTHER THAN IN THE UNITED
STATES OF AMERICA OR CANADA, THEN IF EITHER: (I) THE ACCOUNT DEBTOR HAS
DELIVERED TO SUCH BORROWER AN IRREVOCABLE LETTER OF CREDIT ISSUED OR CONFIRMED
BY A BANK SATISFACTORY TO AGENT AND PAYABLE ONLY IN THE UNITED STATES OF AMERICA
AND IN U.S. DOLLARS, SUFFICIENT TO COVER SUCH ACCOUNT, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO AGENT AND IF REQUIRED BY AGENT, THE ORIGINAL OF SUCH
LETTER OF CREDIT HAS BEEN DELIVERED TO AGENT OR AGENT’S AGENT AND THE ISSUER
THEREOF, AND SUCH BORROWER HAS COMPLIED WITH THE TERMS OF SECTION 5.2(F) HEREOF
WITH RESPECT TO THE ASSIGNMENT OF THE PROCEEDS OF SUCH LETTER OF CREDIT TO AGENT
OR NAMING AGENT AS TRANSFEREE BENEFICIARY THEREUNDER, AS AGENT MAY SPECIFY, OR
(II) SUCH ACCOUNT IS SUBJECT TO CREDIT INSURANCE PAYABLE TO AGENT ISSUED BY AN
INSURER AND ON TERMS AND IN AN AMOUNT ACCEPTABLE TO AGENT, OR (III) SUCH ACCOUNT
IS OTHERWISE ACCEPTABLE IN ALL RESPECTS TO AGENT (SUBJECT TO SUCH LENDING
FORMULA WITH RESPECT THERETO AS AGENT MAY DETERMINE);

 

(F)                                    SUCH ACCOUNTS DO NOT CONSIST OF PROGRESS
BILLINGS (SUCH THAT THE OBLIGATION OF THE ACCOUNT DEBTORS WITH RESPECT TO SUCH
ACCOUNTS IS CONDITIONED UPON SUCH BORROWER’S SATISFACTORY COMPLETION OF ANY
FURTHER PERFORMANCE UNDER THE AGREEMENT GIVING RISE THERETO), BILL AND HOLD
INVOICES OR RETAINAGE INVOICES, EXCEPT AS TO BILL AND HOLD INVOICES, IF AGENT
SHALL HAVE RECEIVED AN AGREEMENT IN WRITING FROM THE ACCOUNT DEBTOR, IN FORM AND
SUBSTANCE REASONABLY

 

10

--------------------------------------------------------------------------------

 

SATISFACTORY TO AGENT, CONFIRMING THE UNCONDITIONAL OBLIGATION OF THE ACCOUNT
DEBTOR TO TAKE THE GOODS RELATED THERETO AND PAY SUCH INVOICE;

 

(G)                                 THE ACCOUNT DEBTOR WITH RESPECT TO SUCH
ACCOUNTS HAS NOT ASSERTED A COUNTERCLAIM, DEFENSE OR DISPUTE AND IS NOT OWED OR
DOES NOT CLAIM TO BE OWED ANY AMOUNTS THAT MAY GIVE RISE TO ANY RIGHT OF SETOFF
OR RECOUPMENT AGAINST SUCH ACCOUNTS (BUT THE PORTION OF THE ACCOUNTS OF SUCH
ACCOUNT DEBTOR IN EXCESS OF THE AMOUNT AT ANY TIME AND FROM TIME TO TIME OWED BY
SUCH BORROWER TO SUCH ACCOUNT DEBTOR OR CLAIMED OWED BY SUCH ACCOUNT DEBTOR
MAY BE DEEMED ELIGIBLE ACCOUNTS);

 

(H)                                 THERE ARE NO FACTS, EVENTS OR OCCURRENCES
WHICH WOULD IMPAIR THE VALIDITY, ENFORCEABILITY OR COLLECTABILITY OF SUCH
ACCOUNTS IN ANY MATERIAL RESPECT OR REDUCE THE AMOUNT PAYABLE OR DELAY PAYMENT
THEREUNDER;

 

(I)                                     SUCH ACCOUNTS ARE SUBJECT TO THE FIRST
PRIORITY, VALID AND PERFECTED SECURITY INTEREST OF AGENT AND ANY GOODS GIVING
RISE THERETO ARE NOT, AND WERE NOT AT THE TIME OF THE SALE THEREOF, SUBJECT TO
ANY LIENS EXCEPT THOSE PERMITTED UNDER SECTIONS 9.8(B) AND (I) HEREOF;

 

(J)                                     NEITHER THE ACCOUNT DEBTOR NOR ANY
OFFICER OR EMPLOYEE OF THE ACCOUNT DEBTOR WITH RESPECT TO SUCH ACCOUNTS IS AN
OFFICER, EMPLOYEE, AGENT OR OTHER AFFILIATE OF ANY BORROWER OR GUARANTOR;

 

(K)                                  THE ACCOUNT DEBTORS WITH RESPECT TO SUCH
ACCOUNTS ARE NOT ANY FOREIGN GOVERNMENT, THE UNITED STATES OF AMERICA, ANY
STATE, POLITICAL SUBDIVISION, DEPARTMENT, AGENCY OR INSTRUMENTALITY THEREOF,
UNLESS, IF THE ACCOUNT DEBTOR IS THE UNITED STATES OF AMERICA, ANY STATE,
POLITICAL SUBDIVISION, DEPARTMENT, AGENCY OR INSTRUMENTALITY THEREOF, UPON
AGENT’S REQUEST, THE FEDERAL ASSIGNMENT OF CLAIMS ACT OF 1940, AS AMENDED OR ANY
SIMILAR STATE OR LOCAL LAW, IF APPLICABLE, HAS BEEN COMPLIED WITH IN A MANNER
SATISFACTORY TO AGENT;

 

(L)                                     THERE ARE NO PROCEEDINGS OR ACTIONS
KNOWN TO AGENT OR ANY BORROWER WHICH ARE THREATENED OR PENDING AGAINST THE
ACCOUNT DEBTORS WITH RESPECT TO SUCH ACCOUNTS WHICH  COULD REASONABLY BE
EXPECTED TO RESULT IN ANY MATERIAL ADVERSE CHANGE IN ANY SUCH ACCOUNT DEBTOR’S
FINANCIAL CONDITION (INCLUDING, WITHOUT LIMITATION, ANY BANKRUPTCY, DISSOLUTION,
LIQUIDATION, REORGANIZATION OR SIMILAR PROCEEDING);

 

(M)                               THE AGGREGATE AMOUNT OF SUCH ACCOUNTS OWING BY
A SINGLE ACCOUNT DEBTOR DO NOT CONSTITUTE MORE THAN TEN (10%) PERCENT OF THE
AGGREGATE AMOUNT OF ALL OTHERWISE ELIGIBLE ACCOUNTS (BUT THE PORTION OF THE
ACCOUNTS NOT IN EXCESS OF SUCH PERCENTAGE MAY BE DEEMED ELIGIBLE ACCOUNTS);

 

(N)                                 SUCH ACCOUNTS ARE NOT OWED BY AN ACCOUNT
DEBTOR WHO HAS ACCOUNTS UNPAID MORE THAN THIRTY (30) (OR, SOLELY IN THE CASE OF
ACCOUNTS ARISING FROM GOODS SOLD OR SERVICES RENDERED BY A BORROWER’S REPAIR
SHOP, SIXTY (60)) DAYS AFTER THE ORIGINAL INVOICE DATE FOR THEM WHICH CONSTITUTE
MORE THAN FIFTY (50%) PERCENT OF THE TOTAL ACCOUNTS OF SUCH ACCOUNT DEBTOR;

 

(O)                                 THE ACCOUNT DEBTOR IS NOT LOCATED IN NEW
JERSEY, WEST VIRGINIA, MINNESOTA OR ANOTHER STATE REQUIRING THE FILING OF A
NOTICE OF BUSINESS ACTIVITIES REPORT OR SIMILAR REPORT IN ORDER TO PERMIT SUCH
BORROWER TO SEEK JUDICIAL ENFORCEMENT IN SUCH STATE OF PAYMENT OF SUCH

 

11

--------------------------------------------------------------------------------

 

ACCOUNT, UNLESS SUCH BORROWER HAS QUALIFIED TO DO BUSINESS IN SUCH STATE OR HAS
FILED A NOTICE OF BUSINESS ACTIVITIES REPORT OR EQUIVALENT REPORT FOR THE THEN
CURRENT YEAR OR SUCH FAILURE TO FILE AND INABILITY TO SEEK JUDICIAL ENFORCEMENT
IS CAPABLE OF BEING REMEDIED WITHOUT ANY MATERIAL DELAY OR MATERIAL COST;

 

(P)                                 THE SALE OF GOODS OR THE RENDITION OF
SERVICES GIVING RISE TO SUCH ACCOUNT IS NOT SUPPORTED BY A PERFORMANCE BOND
UNLESS THE ISSUER OF SUCH BOND SHALL HAVE WAIVED IN WRITING ANY RIGHTS OR
INTEREST IN AND TO ALL COLLATERAL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY
TO AGENT;

 

(Q)                                 SUCH ACCOUNTS HAVE BEEN BILLED AND INVOICED
TO THE ACCOUNT DEBTOR WITH RESPECT THERETO, EXCEPT TO THE EXTENT THAT THE AMOUNT
OF ACCOUNTS WHICH HAVE NOT BEEN SO BILLED AND INVOICED DO NOT EXCEED TWENTY FIVE
(25%) PERCENT OF THE MAXIMUM CREDIT AT ANY TIME; PROVIDED, THAT, ANY SUCH
ACCOUNT SHALL CEASE TO BE ELIGIBLE ACCOUNTS UNLESS SUCH ACCOUNT SHALL HAVE BEEN
BILLED AND INVOICED WITHIN SEVEN (7) BUSINESS DAYS AFTER THE DATE SUCH ACCOUNT
IS CREATED; AND

 

(R)                                    SUCH ACCOUNTS ARE OWED BY ACCOUNT DEBTORS
DEEMED CREDITWORTHY AT ALL TIMES BY AGENT IN GOOD FAITH (SUCH THAT IN THE GOOD
FAITH DETERMINATION OF AGENT, SUCH AN ACCOUNT DEBTOR DOES NOT HAVE, OR COULD
REASONABLY BE EXPECTED NOT TO HAVE, THE FINANCIAL ABILITY TO SATISFY ITS
OUTSTANDING ACCOUNTS).

 

The criteria for Eligible Accounts set forth above may only be changed and any
new criteria for Eligible Accounts may only be established by Agent in good
faith based on either: (i) an event, condition or other circumstance arising
after the date hereof, or (ii) an event, condition or other circumstance
existing on the date hereof to the extent Agent has no written notice thereof
from a Borrower prior to the date hereof, in either case under clause (i) or
(ii) which adversely affects or could reasonably be expected to adversely affect
the Accounts in any material respect in the good faith determination of Agent.

 

1.48  “Eligible Cash Collateral” shall mean the cash or Cash Equivalents (in
each case denominated in United States Dollars) of a Borrower which are:
(a) pledged by such Borrower to Agent pursuant to an agreement in form and
substance reasonably satisfactory to Agent; (b) free and clear of any lien,
security interest, claim or other encumbrance or restriction, except (i) liens
in favor of Agent and (ii) the liens of the financial intermediary holding such
cash or Cash Equivalents to the extent such liens are expressly permitted by the
account control agreement described in clause (d) below, (c) subject to the
first priority, valid and perfected security interest and pledge in favor of
Agent, except (as to priority) for liens in favor of the financial intermediary
holding such cash or Cash Equivalents to the extent such liens are expressly
permitted to have priority by the account control agreement described in clause
(d) below; (d) subject to an account control agreement by and among the
financial intermediary holding such cash or Cash Equivalents, such Borrower and
Agent, in form and substance reasonably satisfactory to Agent and duly
authorized, executed and delivered by such financial intermediary and such
Borrower; and (e) available to such Borrower without condition or restriction
except those arising pursuant to the pledge in favor of Agent.

 

1.49  “Eligible Credit Card Receivables” shall mean, as to each Borrower, Credit
Card Receivables of such Borrower which satisfy and continue to satisfy the
criteria set forth below:

 

12

--------------------------------------------------------------------------------

 

(A)                                  SUCH CREDIT CARD RECEIVABLES ARISE FROM THE
ACTUAL AND BONA FIDE SALE AND DELIVERY OF GOODS OR RENDITION OF SERVICES BY SUCH
BORROWER IN THE ORDINARY COURSE OF THE BUSINESS OF SUCH BORROWER (INCLUDING
CREDIT CARD RECEIVABLES WHICH ARISE FROM ANY SALE MADE BY ANY RESTAURANT OWNED
AND OPERATED BY A BORROWER) WHICH TRANSACTIONS ARE COMPLETED IN ACCORDANCE WITH
THE TERMS AND PROVISIONS CONTAINED IN ANY AGREEMENTS BINDING ON SUCH BORROWER OR
THE OTHER PARTY OR PARTIES RELATED THERETO;

 

(B)                                 SUCH CREDIT CARD RECEIVABLES ARE NOT PAST
DUE (BEYOND ANY STATED APPLICABLE GRACE PERIOD, IF ANY, THEREFOR) PURSUANT TO
THE TERMS SET FORTH IN THE CREDIT CARD AGREEMENTS WITH THE CREDIT CARD ISSUER OR
CREDIT CARD PROCESSOR OF THE CREDIT CARD OR DEBIT CARD USED IN THE PURCHASE
WHICH GIVE RISE TO SUCH CREDIT CARD RECEIVABLES;

 

(C)                                  SUCH CREDIT CARD RECEIVABLES ARE NOT UNPAID
MORE THAN FIVE (5) BUSINESS DAYS (OR, SOLELY IN THE CASE OF CREDIT CARD
RECEIVABLES ARISING FROM THE USE OF A CARD ISSUED BY COMDATA NETWORK, INC. OR
EFS TRANSPORTATION SERVICES INC., TEN (10)) BUSINESS DAYS) AFTER THE DATE OF THE
SALE OF INVENTORY OR RENDITION OF SERVICES GIVING RISE TO SUCH CREDIT CARD
RECEIVABLES;

 

(D)                                 ALL MATERIAL PROCEDURES REQUIRED BY THE
CREDIT CARD ISSUER OR THE CREDIT CARD PROCESSOR OF THE CREDIT CARD OR DEBIT CARD
USED IN THE PURCHASE WHICH GAVE RISE TO SUCH CREDIT CARD RECEIVABLES SHALL HAVE
BEEN FOLLOWED BY SUCH BORROWER AND ALL DOCUMENTS REQUIRED FOR THE AUTHORIZATION
AND APPROVAL BY SUCH CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR SHALL HAVE BEEN
OBTAINED IN CONNECTION WITH THE SALE GIVING RISE TO SUCH CREDIT CARD
RECEIVABLES;

 

(E)                                  THE REQUIRED AUTHORIZATION AND APPROVAL BY
SUCH CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR SHALL HAVE BEEN OBTAINED FOR
THE SALE GIVING RISE TO SUCH CREDIT CARD RECEIVABLES;

 

(F)                                    SUCH BORROWER SHALL HAVE SUBMITTED ALL
MATERIALS REQUIRED BY THE CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR OBLIGATED
IN RESPECT OF SUCH CREDIT CARD RECEIVABLES IN ORDER FOR SUCH BORROWER TO BE
ENTITLED TO PAYMENT IN RESPECT THEREOF;

 

(G)                                 THE CREDIT CARD ISSUER OR CREDIT CARD
PROCESSOR OBLIGATED IN RESPECT OF SUCH CREDIT CARD RECEIVABLE HAS NOT FAILED TO
REMIT ANY MONTHLY PAYMENT IN RESPECT OF SUCH CREDIT CARD RECEIVABLE;

 

(H)                                 SUCH CREDIT CARD RECEIVABLES COMPLY WITH THE
APPLICABLE TERMS AND CONDITIONS CONTAINED IN SECTION 7.2 OF THIS AGREEMENT;

 

(I)                                     THE CREDIT CARD ISSUER OR CREDIT CARD
PROCESSOR WITH RESPECT TO SUCH CREDIT CARD RECEIVABLES HAS NOT ASSERTED A
COUNTERCLAIM, DEFENSE OR DISPUTE AND DOES NOT HAVE, AND DOES NOT ENGAGE IN
TRANSACTIONS WHICH MAY GIVE RISE TO, ANY RIGHT OF SETOFF AGAINST SUCH CREDIT
CARD RECEIVABLES (OTHER THAN SETOFFS FOR FEES AND CHARGEBACKS CONSISTENT WITH
THE PRACTICES OF SUCH CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR WITH SUCH
BORROWER AS OF THE DATE HEREOF OR AS SUCH PRACTICES MAY CHANGE AS A RESULT OF
CHANGES TO THE POLICIES OF SUCH CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR
APPLICABLE TO ITS CUSTOMERS GENERALLY AND UNRELATED TO THE CIRCUMSTANCE OF SUCH
BORROWER), BUT THE PORTION OF THE CREDIT CARD RECEIVABLES OWING BY SUCH CREDIT
CARD ISSUER OR CREDIT CARD PROCESSOR IN EXCESS OF THE AMOUNT OWING BY SUCH
BORROWER TO SUCH CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR PURSUANT TO SUCH
FEES, CHARGEBACKS, SETOFFS AND DEDUCTIONS MAY BE DEEMED ELIGIBLE CREDIT CARD
RECEIVABLES;

 

13

--------------------------------------------------------------------------------

 

(J)                                     THE CREDIT CARD ISSUER OR CREDIT CARD
PROCESSOR WITH RESPECT TO SUCH CREDIT CARD RECEIVABLES HAS NOT SETOFF AGAINST
AMOUNTS OTHERWISE PAYABLE BY SUCH CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR TO
SUCH BORROWER FOR THE PURPOSE OF ESTABLISHING A RESERVE OR COLLATERAL FOR
OBLIGATIONS OF SUCH BORROWER TO SUCH CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR
(NOTWITHSTANDING THE FOREGOING THE CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR
MAY HAVE SETOFFS FOR FEES AND CHARGEBACKS CONSISTENT WITH THE PRACTICES OF SUCH
CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR WITH SUCH BORROWER AS OF THE DATE
HEREOF OR AS SUCH PRACTICES MAY HEREAFTER CHANGE AS A RESULT OF CHANGES TO THE
POLICIES OF SUCH CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR APPLICABLE TO ITS
CUSTOMERS GENERALLY AND UNRELATED TO THE CIRCUMSTANCES OF SUCH BORROWER);

 

(K)                                  THERE ARE NO FACTS, EVENTS OR OCCURRENCES
WHICH WOULD IMPAIR THE VALIDITY, ENFORCEABILITY OR COLLECTABILITY OF SUCH CREDIT
CARD RECEIVABLES IN ANY MATERIAL RESPECT OR REDUCE THE AMOUNT PAYABLE OR DELAY
PAYMENT THEREUNDER (OTHER THAN FOR SETOFFS FOR FEES AND CHARGEBACKS CONSISTENT
WITH THE PRACTICES OF SUCH CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR WITH SUCH
BORROWER AS OF THE DATE HEREOF OR AS SUCH PRACTICES MAY HEREAFTER CHANGE AS A
RESULT OF CHANGES TO THE POLICIES OF SUCH CREDIT CARD ISSUER OR CREDIT CARD
PROCESSOR APPLICABLE TO ITS CUSTOMERS GENERALLY AND UNRELATED TO THE
CIRCUMSTANCES OF SUCH BORROWER OR ANY GUARANTOR);

 

(L)                                     SUCH CREDIT CARD RECEIVABLES ARE SUBJECT
TO THE FIRST PRIORITY, VALID AND PERFECTED SECURITY INTEREST AND LIEN OF AGENT,
FOR AND ON BEHALF OF ITSELF AND LENDERS, AND ANY GOODS GIVING RISE THERETO ARE
NOT, AND WERE NOT AT THE TIME OF THE SALE THEREOF, SUBJECT TO ANY SECURITY
INTEREST OR LIEN IN FAVOR OR ANY PERSON OTHER THAN AGENT EXCEPT AS OTHERWISE
PERMITTED IN THIS AGREEMENT, IN EACH CASE SUBJECT TO AND IN ACCORDANCE WITH THE
TERMS AND CONDITIONS APPLICABLE HEREUNDER TO ANY SUCH PERMITTED SECURITY
INTEREST OR LIEN;

 

(M)                               THERE ARE NO PROCEEDINGS OR ACTIONS KNOWN TO
AGENT OR ANY BORROWER WHICH ARE PENDING OR THREATENED AGAINST THE CREDIT CARD
ISSUERS OR CREDIT CARD PROCESSORS WITH RESPECT TO SUCH CREDIT CARD RECEIVABLES
WHICH COULD REASONABLY BE EXPECTED TO RESULT IN ANY MATERIAL ADVERSE CHANGE IN
THE FINANCIAL CONDITION OF ANY SUCH CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR;

 

(N)                                 SUCH CREDIT CARD RECEIVABLES ARE OWED BY
CREDIT CARD ISSUERS OR CREDIT CARD PROCESSOR DEEMED CREDITWORTHY AT ALL TIMES BY
AGENT IN GOOD FAITH (SUCH THAT IN THE GOOD FAITH DETERMINATION OF AGENT, SUCH
CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR DOES NOT HAVE, OR COULD REASONABLY
BE EXPECTED NOT TO HAVE, THE FINANCIAL ABILITY TO SATISFY ITS OUTSTANDING
ACCOUNTS);

 

(O)                                 NO EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING UNDER THE CREDIT CARD AGREEMENT OF SUCH BORROWER WITH THE CREDIT CARD
ISSUER OR CREDIT CARD PROCESSOR WHO HAS ISSUED THE CREDIT CARD OR DEBIT CARD OR
HANDLES PAYMENTS UNDER THE CREDIT CARD OR DEBIT CARD USED IN THE SALE WHICH GAVE
RISE TO SUCH CREDIT CARD RECEIVABLES WHICH EVENT OF DEFAULT GIVES SUCH CREDIT
CARD ISSUER OR CREDIT CARD PROCESSOR THE RIGHT TO CEASE OR SUSPEND PAYMENT TO
SUCH BORROWER OR ANY GUARANTOR AND NO EVENT SHALL HAVE OCCURRED WHICH GIVES SUCH
CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR THE RIGHT TO SETOFF AGAINST AMOUNTS
OTHERWISE PAYABLE TO SUCH BORROWER, INCLUDING ON BEHALF OF A GUARANTOR (OTHER
THAN FOR THEN CURRENT FEES AND CHARGEBACKS CONSISTENT WITH THE CURRENT PRACTICES
OF SUCH CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR AS OF THE DATE HEREOF OR AS
SUCH PRACTICES MAY HEREAFTER CHANGE AS A RESULT OF CHANGES TO THE POLICIES OF
SUCH CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR APPLICABLE TO ITS CUSTOMERS
GENERALLY AND UNRELATED TO THE CIRCUMSTANCES OF SUCH BORROWER OR ANY GUARANTOR),
EXCEPT AS MAY HAVE BEEN

 

14

--------------------------------------------------------------------------------

 

WAIVED IN WRITING ON TERMS AND CONDITIONS REASONABLY SATISFACTORY TO AGENT
PURSUANT TO THE CREDIT CARD ACKNOWLEDGEMENT BY SUCH CREDIT CARD ISSUER OR CREDIT
CARD PROCESSOR), OR THE RIGHT TO ESTABLISH RESERVES OR ESTABLISH OR DEMAND
COLLATERAL, AND THE CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR HAS NOT SENT ANY
WRITTEN NOTICE OF DEFAULT AND/OR NOTICE OF ITS INTENTION TO CEASE OR SUSPEND
PAYMENTS TO SUCH BORROWER IN RESPECT OF SUCH CREDIT CARD RECEIVABLES OR TO
ESTABLISH RESERVES OR CASH COLLATERAL FOR OBLIGATIONS OF SUCH BORROWER TO SUCH
CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR, AND SUCH CREDIT CARD AGREEMENTS ARE
OTHERWISE IN FULL FORCE AND EFFECT AND CONSTITUTE THE LEGAL, VALID, BINDING AND
ENFORCEABLE OBLIGATIONS OF THE PARTIES THERETO;

 

(P)                                 AGENT SHALL HAVE RECEIVED, IN FORM AND
SUBSTANCE SATISFACTORY TO AGENT IN GOOD FAITH, A CREDIT CARD ACKNOWLEDGMENT DULY
AUTHORIZED, EXECUTED AND DELIVERED BY THE CREDIT CARD ISSUER (EXCEPT AS AGENT
MAY OTHERWISE AGREE) OR CREDIT CARD PROCESSOR FOR THE CREDIT CARD OR DEBIT CARD
USED IN THE SALE WHICH GAVE RISE TO SUCH CREDIT CARD RECEIVABLE (EXCEPT AS AGENT
MAY OTHERWISE AGREE), SUCH CREDIT CARD ACKNOWLEDGMENT SHALL BE IN FULL FORCE AND
EFFECT AND THE CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR PARTY THERETO SHALL
BE IN COMPLIANCE WITH THE TERMS THEREOF;

 

(Q)                                 THE TERMS OF THE SALE GIVING RISE TO SUCH
CREDIT CARD RECEIVABLES AND ALL PRACTICES OF SUCH BORROWER AND GUARANTORS WITH
RESPECT TO SUCH CREDIT CARD RECEIVABLES COMPLY IN ALL MATERIAL RESPECTS WITH
APPLICABLE FEDERAL, STATE, AND LOCAL LAWS AND REGULATIONS; AND

 

(R)                                    THE CUSTOMER USING THE CREDIT CARD OR
DEBIT CARD GIVING RISE TO SUCH CREDIT CARD RECEIVABLE SHALL NOT HAVE RETURNED
THE MERCHANDISE PURCHASED GIVING RISE TO SUCH CREDIT CARD RECEIVABLE.

 

Credit Card Receivables which would otherwise constitute Eligible Credit Card
Receivables pursuant to this Section will not be deemed ineligible solely by
virtue of the Credit Card Agreements with respect thereto having been entered
into by any Guarantor, for the benefit of Borrowers. General criteria for
Eligible Credit Card Receivables may only be changed and any new criteria for
Eligible Credit Card Receivables may only be established by Agent in good faith
based on either: (i) an event, condition or other circumstance arising after the
date hereof, or (ii) existing on the date hereof, in either case under clause
(i) or (ii) which adversely affects or could reasonably be expected to adversely
affect the Credit Card Receivables in any material respect in the good faith
determination of Agent.

 

1.50  “Eligible Equipment” shall mean, as to each Borrower, Equipment owned by
such Borrower and included in an appraisal of Equipment received by Agent in
accordance with the requirements of this Agreement, which Equipment is in good
order, repair, running and marketable condition (ordinary wear and tear
excepted) and in each case acceptable to Agent in good faith based on the
criteria set forth below. In general, Eligible Equipment shall not include
(a) Equipment at premises other than those owned or leased and controlled by any
Borrower, except any Equipment which would otherwise be deemed Eligible
Equipment that is not located at premises owned and operated by any Borrower
may nevertheless be considered Eligible Equipment: as to locations which are
leased by a Borrower if either Agent shall have received a Collateral Access
Agreement from the owner and lessor of such location, duly authorized, executed
and delivered by such owner and lessor or Agent shall have established such
Reserves in respect of amounts at any time payable by any Borrower or its
affiliates to the owner and lessor thereof as Agent shall determine in good
faith (it being understood that the Letter Agreements, dated even date herewith,
by HPT and/or certain of its affiliates in favor of Agent

 

15

--------------------------------------------------------------------------------

 

shall not been deemed to be satisfactory Collateral Access Agreements for
purposes of this clause (a)); (b) Equipment subject to a security interest or
lien in favor of any person other than Agent except those permitted hereunder
that are subject to an intercreditor agreement in form and substance  reasonably
satisfactory to Agent between the holder of such security interest or lien and
Agent); (c) Equipment located outside the United States of America;
(d) Equipment that is not subject to the first priority, valid and perfected
security interest of Agent; (e) damaged or defective Equipment or Equipment not
used or usable in the ordinary course of such Borrower’s business as presently
conducted; (f) office equipment or motor vehicles; or (g) Equipment which
constitutes fixtures. The criteria for Eligible Equipment set forth above
may only be changed and any new criteria for Eligible Equipment may only be
established by Agent acting in good faith based on either: (i) an event,
condition or other circumstance arising after the date hereof, or (ii) an event,
condition or other circumstance existing on the date hereof to the extent Agent
has no written notice thereof from any Borrower prior to the date hereof, in
either case under clause (i) or (ii) which adversely affects or could reasonably
be expected to adversely affect such Equipment in any material respect in the
good faith determination of Agent.

 

1.51  “Eligible Inventory” shall mean, as to each Borrower, Inventory of such
Borrower consisting of finished goods (including gasoline and diesel fuel) held
for resale in the ordinary course of the business of such Borrower that are
acceptable to Agent based on the criteria set forth below. In general, Eligible
Inventory shall not include (a) any inventory sold or intended to be sold by any
restaurant owned or operated by any Borrower or Guarantor; (b) components which
are not part of finished goods; (c) spare parts for equipment; (d) packaging and
shipping materials; (e) supplies used or consumed in such Borrower’s business;
(f) Inventory at premises other than those owned or leased and controlled by any
Borrower, except any Inventory which would otherwise be deemed Eligible
Inventory that is not located at premises owned and operated by any Borrower
may nevertheless be considered Eligible Inventory as to locations which are
leased by a Borrower, if either Agent shall have received a Collateral Access
Agreement from the owner and lessor of such location, duly authorized, executed
and delivered by such owner and lessor or Agent shall have established such
Reserves in respect of amounts at any time payable by any Borrower or its
affiliates to the owner and lessor thereof as Agent shall determine in good
faith; (g) Inventory subject to a security interest or lien in favor of any
Person other than Agent except those permitted in this Agreement that are
subject to an intercreditor agreement in form and substance reasonably
satisfactory to Agent between the holder of such security interest or lien and
Agent; (h) bill and hold goods; (i) unserviceable, obsolete or slow moving
Inventory; (j) Inventory that is not subject to the first priority, valid and
perfected security interest of Agent; (k) returned, damaged and/or defective
Inventory; (l) Inventory purchased or sold on consignment; (m) Inventory located
outside the United States of America; (n) Inventory which is subject to or uses
a trademark or other intellectual property licensed by a third party to a
Borrower unless either (i) Agent shall have received an agreement, in form and
substance reasonably satisfactory to Agent, from such third party licensor in
favor of Agent, duly authorized, executed and delivered by such Borrower and
such third party licensor or (ii) Agent shall have otherwise determined that
Agent has the right to sell such Inventory; and (o) inventory (excluding shop
inventory) which is not tracked on a perpetual reporting system reasonably
satisfactory to Agent. The criteria for Eligible Inventory set forth above
may only be changed and any new criteria for Eligible Inventory may only be
established by Agent in good faith based on either: (i) an event, condition or
other circumstance arising after the date hereof, or (ii) an event, condition or
other circumstance existing on the date hereof to the extent Agent has no
written notice thereof from a Borrower prior to the date hereof, in either case
under clause (i) or

 

16

--------------------------------------------------------------------------------

 

(ii) which adversely affects or could reasonably be expected to adversely affect
the Inventory in any material respect in the good faith determination of Agent.

 

1.52  “Eligible Real Property” shall mean, as to each Borrower, Real Property
owned by such Borrower in fee simple and included in an appraisal of such Real
Property received by Agent in accordance with the requirements of this Agreement
and in each case acceptable to Agent in good faith based on the criteria set
forth below. Eligible Real Property shall not include: (a) Real Property which
is not owned and operated by a Borrower; (b) Real Property subject to a security
interest, lien or mortgage or other encumbrance in favor of any person other
than Agent, except those permitted under Sections 9.8(b), (d) and (i) hereof;
(c) Real Property that is not located in the United States of America; (d) Real
Property that is not subject to the valid and enforceable, first priority,
perfected security interest, lien and mortgage of Agent; (e) Real Property where
Agent determines that issues relating to compliance with Environmental Laws
materially adversely affect the value thereof or the ability of Agent to sell or
otherwise dispose thereof (but subject to the right of Agent to establish
Reserves after the date hereof to reflect such material adverse affect);
(f) except as Agent may otherwise determine, Real Property improvements located
on land which is not owned in fee simple by such Borrower; and (g) Real Property
improved with residential housing. The criteria for Eligible Real Property set
forth above may only be changed and any new criteria for Eligible Real Property
may only be established by Agent acting in good faith based on either: (1) an
event, condition or other circumstance arising after the date hereof, or (2) an
event, condition or other circumstance existing on the date hereof to the extent
Agent has no written notice thereof from any Borrower prior to the date hereof,
in either case under clause (i) or (ii) which adversely affects or could
reasonably be expected to adversely affect such Real Property in any material
respect in the good faith determination of Agent.

 

1.53  “Eligible Transferee” shall mean (a) any Lender; (b) the parent company of
any Lender and/or any Affiliate of such Lender which is at least fifty (50%)
percent owned by such Lender or its parent company; (c) any person (whether a
corporation, partnership, trust or otherwise) that is engaged in the business of
making, purchasing, holding or otherwise investing in bank loans and similar
extensions of credit in the ordinary course of its business and is administered
or managed by a Lender or with respect to any Lender that is a fund which
invests in bank loans and similar extensions of credit, any other fund that
invests in bank loans and similar extensions of credit and is managed by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor, and in each case is approved by Agent; and (d) any other commercial
bank, financial institution or “accredited investor” (as defined in Regulation D
under the Securities Act of 1933) approved by Agent (which approval shall not be
unreasonably withheld or delayed), provided, that, (i) in the case of any
assignment to an Eligible Transferee described under clauses (c) and (d) above,
Administrative Borrower shall have the right to approve the assignee under such
assignment, such approval not to be unreasonably withheld, conditioned or
delayed by Administrative Borrower, except, that, Administrative Borrower’s
approval shall not be required (A) after the occurrence and during the
continuance of an Event of Default, or (B) in connection with an assignment by
Lender upon the merger, consolidation, sale of such Lender or other disposition
of all or any portion of any Lender’s business, loan portfolio or other assets,
(ii) neither any Borrower nor any Guarantor or any Affiliate of any Borrower or
Guarantor shall qualify as an Eligible Transferee and (iii) no Person to whom
any Indebtedness which is in any way subordinated in right of payment to any
other Indebtedness of any Borrower

 

17

--------------------------------------------------------------------------------

 

or Guarantor shall qualify as an Eligible Transferee, except as Agent
may otherwise specifically agree.

 

1.54  “Environmental Laws” shall mean all foreign, Federal, State and local laws
(including common law), legislation, rules, codes, licenses, permits (including
any conditions imposed therein), authorizations, judicial or administrative
decisions, injunctions or agreements between any Borrower or Guarantor and any
Governmental Authority, (a) relating to pollution and the protection,
preservation or restoration of the environment (including air, water vapor,
surface water, ground water, drinking water, drinking water supply, surface
land, subsurface land, plant and animal life or any other natural resource), or
to human health or safety, (b) relating to the exposure to, or the use, storage,
recycling, treatment, generation, manufacture, processing, distribution,
transportation, handling, labeling, production, release or disposal, or
threatened release, of Hazardous Materials, or (c) relating to all laws with
regard to recordkeeping, notification, disclosure and reporting requirements
respecting Hazardous Materials. The term “Environmental Laws” includes (i) the
Federal Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Federal Superfund Amendments and Reauthorization Act, the Federal
Water Pollution Control Act of 1972, the Federal Clean Water Act, the Federal
Clean Air Act, the Federal Resource Conservation and Recovery Act of 1976
(including the Hazardous and Solid Waste Amendments thereto), the Federal Solid
Waste Disposal and the Federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water
Act of 1974, (ii) applicable state counterparts to such laws and (iii) any
common law or equitable doctrine that may impose liability or obligations for
injuries or damages due to, or threatened as a result of, the presence of or
exposure to any Hazardous Materials.

 

1.55  “Equipment” shall mean, as to each Borrower and Guarantor, all of such
Borrower’s and Guarantor’s now owned and hereafter acquired equipment, wherever
located, including machinery, data processing and computer equipment (whether
owned or licensed and including embedded software), vehicles, tools, furniture,
fixtures, all attachments, accessions and property now or hereafter affixed
thereto or used in connection therewith, and substitutions and replacements
thereof, wherever located.

 

1.56  “Equipment Availability” shall mean (a) prior to the date on which the
Equipment Availability Conditions have been satisfied, zero (0), and (b) from
and after the date on which the Equipment Availability Conditions have been
satisfied as reasonably determined by Agent, the amount equal to eighty five
(85%) percent of the net liquidation value of the Eligible Equipment as set
forth in the most recent acceptable appraisal of such Equipment received by
Agent in accordance with the terms hereof (net of liquidation expenses, costs
and commissions): provided, that, the Equipment Availability shall be reduced on
the first day of each calendar quarter, commencing with the first full calendar
quarter following the date on which the Equipment Availability Conditions have
been satisfied, by an amount equal to the initial Equipment Availability
Calculated in accordance with this clause (b) divided by twenty (20).

 

1.57  “Equipment Availability Conditions” shall mean, collectively, the
following:  (a) Agent shall have received a written request from Administrative
Borrower to include the Equipment Availability in the Borrowing Base (which
request shall be irrevocable); and (b) Agent shall have received a written
appraisal as to each item of Equipment constituting Eligible Equipment, which
shall be in form, scope and methodology satisfactory to Agent and by an

 

18

--------------------------------------------------------------------------------

 

appraiser acceptable to Agent and which shall be addressed to Agent and shall
reveal results acceptable to Agent.

 

1.58  “ERISA” shall mean the Employee Retirement Income Security Act of 1974,
together with all rules, regulations and interpretations thereunder or related
thereto.

 

1.59  “ERISA Affiliate” shall mean any person required to be aggregated with any
Borrower, any Guarantor or any of its or their respective Subsidiaries under
Sections 414(b), 414(c), 414(m) or 414(o) of the Code.

 

1.60  “ERISA Event” shall mean (a) any “reportable event”, as defined in
Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a
Plan for which the Pension Benefit Guaranty Corporation notice requirement has
not been waived; (b) the adoption of any amendment to a Plan that would require
the provision of security pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; (c) the existence with respect to any Plan of an
“accumulated funding deficiency” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (d) the filing pursuant to
Section 412 of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (e) the
occurrence of a “prohibited transaction” with respect to which any Borrower,
Guarantor or any of its or their respective Subsidiaries is a “disqualified
person” (within the meaning of Section 4975 of the Code) or with respect to
which any Borrower, Guarantor or any of its or their respective Subsidiaries
could otherwise be liable; (f) a complete or partial withdrawal by any Borrower,
Guarantor or any ERISA Affiliate from a Multiemployer Plan or a cessation of
operations which is treated as such a withdrawal or notification that a
Multiemployer Plan is in reorganization; (g) the filing of a notice of intent to
terminate, the treatment of a Plan amendment as a termination under Section 4041
or 4041A of ERISA, or the commencement of proceedings by the Pension Benefit
Guaranty Corporation to terminate a Plan; (h) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan; (i) the
imposition of any liability under Title IV of ERISA, other than the Pension
Benefit Guaranty Corporation premiums due but not delinquent under Section 4007
of ERISA, upon any Borrower, Guarantor or any ERISA Affiliate in excess of
$1,500,000 and (j) any other event or condition with respect to a Plan including
any Plan subject to Title IV of ERISA maintained, or contributed to, by any
ERISA Affiliate that could reasonably be expected to result in liability of any
Borrower in excess of $1,500,000 (other than the funding of benefits in
accordance with the terms of such Plan).

 

1.61  “Eurodollar Rate Loans” shall mean any Loans or portion thereof on which
interest is payable based on the Adjusted Eurodollar Rate in accordance with the
terms hereof.

 

1.62  “Event of Default” shall mean the occurrence or existence of any event or
condition described in Section 10.1 hereof.

 

1.63  “Excess Availability” shall mean the amount, as determined by Agent,
calculated at any date, equal to: (a) the lesser of: (i) the Borrowing Base and
(ii) the Maximum Credit (in each case under (i) or (ii) after giving effect to
any Reserves), minus (b) the sum of: (i) the amount of all then outstanding
Revolving Loans, plus (ii) the amount of all then outstanding Letter of Credit
Accommodations.

 

19

--------------------------------------------------------------------------------

 

1.64  “Exchange Act” shall mean the Securities Exchange Act of 1934, together
with all rules, regulations and interpretations thereunder or related thereto.

 

1.65  “Excluded Assets” shall mean (a) Petro’s accounts receivable and contract
rights which (in each case) represent the right to payments in respect of credit
card receivables paid to Petro by Comdata Network, Inc. under the Agreement,
dated as of March 3, 1999, by and between Petro and Comdata Network, Inc. (the
“1999 Comdata Agreement”), except that the assets described in this clause
(a) shall not constitute Excluded Assets if (i) the prohibition on granting
liens on such assets contained in the 1999 Comdata Agreement is unenforceable
under the UCC or other applicable law or (ii) such prohibition is terminated,
waived or otherwise ceases to be effective, (b) Real Property, except that any
Real Property, automatically and without any further action, shall cease to be
Excluded Assets and shall be subject to the security interest and lien of Agent
at such time as such Real Property shall be included in the calculation of the
Borrowing Base, (c) commercial tort claims other than commercial tort claims
that arise in connection with or are related to any assets which are or at any
time were included in the calculation of the Borrowing Base, (d) investment
property consisting of Capital Stock in any Person which is (i) not publicly
listed unless such Person is a direct Subsidiary of a Borrower or Guarantor, or
(ii) an Excluded Subsidiary, (e) the Customer Loyalty Account Assets and (f) all
proceeds of the foregoing.

 

1.66  “Excluded Subsidiary” shall mean (a) each Subsidiary of Parent listed on
Schedule 1.66 hereto and (b) a Subsidiary of Parent formed or acquired after the
date hereof, which is designated as an “Excluded Subsidiary” in writing by
Parent to Agent after the date hereof and which is not a Borrower, Guarantor or
Specified Subsidiary.

 

1.67  “Existing HPT Leases” shall mean, collectively, (a) the Lease Agreement,
dated as of January 31, 2007, by and among HPT TA Properties Trust, HPT TA
Properties LLC and TA Leasing, as modified by the Letter Agreement, dated  even
date herewith, by and among HPT TA Properties Trust, HPT TA Properties LLC,
Borrowers, Guarantors and Agent, and (b) the Lease Agreement dated as of May 30,
2007, by and among HPT PSC Properties Trust, HPT PSC Properties LLC and Petro
Shopping Centers, L.P., as modified by the Letter Agreement, dated even date
herewith, by and among HPT PSC Properties Trust, HPT PSC Properties LLC,
Borrowers, Guarantors and Agent, in each case as the same now exist or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.

 

1.68  “ExxonMobil” shall mean, collectively, ExxonMobil Oil Corporation and
Mobil Diesel Supply Corporation.

 

1.69  “Fee Letter” shall mean the letter agreement, dated of even date herewith,
by and among Borrowers and Agent, setting forth certain fees payable by
Borrowers to Agent for the benefit of itself and Lenders, as the same now exists
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced.

 

1.70  “Financing Agreements” shall mean, collectively, this Agreement and all
notes, guarantees, security agreements, deposit account control agreements,
investment property control agreements, intercreditor agreements and all other
agreements, documents and instruments now or at any time hereafter executed
and/or delivered by any Borrower or Obligor in connection with this Agreement;
provided, that, the Financing Agreements shall not include Hedge Agreements.

 

20

--------------------------------------------------------------------------------

 

1.71  “Fixed Asset Availability” shall mean the amount equal to the lesser of
(a) the sum of the Equipment Availability and the Real Property Availability or
(b) the Fixed Asset Availability Limit.

 

1.72  “Fixed Asset Availability Limit” shall mean, at any time, the amount equal
to twenty (20%) percent of the Maximum Credit.

 

1.73  “Fixed Charge Coverage Ratio” shall mean, as to any Person, with respect
to any period, the ratio of (a) the amount equal to (i) the EBITDAR of such
Person for such period, minus (ii) all Capital Expenditures of such Person
during such period to the extent such Capital Expenditures are not financed with
the proceeds of (A) Indebtedness permitted under Section 9.9 hereof or
(B) amounts paid by any landlord to Borrowers pursuant to any Lease Agreement
for the purpose of financing such Capital Expenditures (or reimbursing Borrowers
for such Capital Expenditures), minus (iii) taxes paid during such period in
cash, to (b) the Fixed Charges of such Person for such period.

 

1.74  “Fixed Charges” shall mean, as to any Person, with respect to any period,
the sum of, without duplication, (a) all Interest Expense during such period
(other than interest payments in respect of Indebtedness under the Petro
Indenture to the extent such Interest Expense is paid with the proceeds of the
Petro Indenture Cash Collateral), plus (b) all regularly scheduled (as
determined at the beginning of the respective period) principal payments in
respect of (i) Indebtedness for borrowed money (other than (A) payments in
respect of Revolving Loans which do not result in a reduction of the Commitments
and (B) payments in respect of the principal amount of Indebtedness under the
Petro Indenture to the extent such principal payments are paid with the proceeds
of the Petro Indenture Cash Collateral) and (ii) Indebtedness with respect to
Capital Leases (and without duplicating items (a) and (b) of this definition,
the interest component with respect to Indebtedness under Capital Leases) during
such period, plus (c) all Consolidated Rental Expense paid in cash during such
Period, plus (d) all dividends paid (or deemed to have been paid) by Parent
during such period pursuant to Section 9.11(c) hereof.

 

1.75  “Foreign Subsidiary” shall mean any Subsidiary of a Borrower or Guarantor
which is incorporated or formed under the laws of a jurisdiction outside the
United States of America.

 

1.76  “Freightliner Agreement” shall mean the Freightliner Express Operating
Agreement, dated as of July 21, 1999, by and among Freightliner Corporation, TA
Operating Corporation (as predecessor in interest to TA Operating) and TA
Franchise Systems, Inc. (as predecessor in interest to TA Franchise Systems
LLC), as amended by Amendment No. 1 to Operating Agreement dated as of
November 9, 2000, Amendment No. 2 to Operating Agreement dated as of April 15,
2003 and Amendment No. 3 to Operating Agreement dated as of July 26, 2006 and as
the same may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.

 

1.77  “Fuel Inventory Loan Limit” shall mean twenty (20%) percent of the Maximum
Credit.

 

1.78  “GAAP” shall mean generally accepted accounting principles in the United
States of America as in effect from time to time as set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants

 

21

--------------------------------------------------------------------------------

 

and the statements and pronouncements of the Financial Accounting Standards
Board which are applicable to the circumstances as of the date of determination
consistently applied, except that, for purposes of Section 9.17 hereof, GAAP
shall be determined on the basis of such principles in effect on the date hereof
and consistent with those used in the preparation of the most recent audited
financial statements delivered to Agent prior to the date hereof.

 

1.79  “Governmental Authority” shall mean any nation or government, any state,
province, or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

 

1.80  “Hazardous Materials” shall mean any hazardous, toxic or dangerous
substances, materials and wastes, including hydrocarbons (including naturally
occurring or man-made petroleum and hydrocarbons), flammable explosives,
asbestos, urea formaldehyde insulation, radioactive materials, biological
substances, polychlorinated biphenyls, pesticides, herbicides and any other kind
and/or type of pollutants or contaminants (including materials which include
hazardous constituents), sewage, sludge, industrial slag, solvents and/or any
other similar substances, materials, or wastes and including any other
substances, materials or wastes that are or become regulated under any
Environmental Law (including any that are or become classified as hazardous or
toxic under any Environmental Law).

 

1.81  “Hedge Agreement” shall mean an agreement between any Borrower or
Guarantor and a Bank Product Provider that is a rate swap agreement, basis swap,
forward rate agreement, interest rate option, forward foreign exchange
agreement, spot foreign exchange agreement, rate cap agreement, rate floor
agreement, rate collar agreement, currency swap agreement, cross-currency rate
swap agreement, currency option, any other similar agreement (including any
option to enter into any of the foregoing or a master agreement for any of the
foregoing together with all supplements thereto) for the purpose of protecting
against or managing exposure to fluctuations in interest or exchange rates or
currency valuations, but not for the purpose of protecting against or managing
exposure to fluctuations in commodity prices; sometimes being collectively
referred to herein as “Hedge Agreements.”

 

1.82  “HPT” shall mean Hospitality Properties Trust, a Maryland real estate
investment trust, and its successors and assigns.

 

1.83  “HPT Companies” shall mean the collective reference to HPT and its
Subsidiaries; provided, that, in no event shall the HPT Companies include any
Borrower or Guarantor or any of their respective Subsidiaries.

 

1.84  “Indebtedness” shall mean, with respect to any Person, any liability,
whether or not contingent, (a) in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof) or evidenced by bonds, notes, debentures or similar
instruments; (b) representing the balance deferred and unpaid of the purchase
price of any property or services (except any such balance that constitutes an
account payable to a trade creditor (whether or not an Affiliate) created,
incurred, assumed or guaranteed by such Person in the ordinary course of
business of such Person in connection with obtaining goods, materials or
services payable in accordance with customary trade practices; (c) all
obligations as lessee under leases which have been, or should be, in accordance
with GAAP recorded as Capital Leases; (d) any contractual obligation, contingent
or otherwise, of such

 

22

--------------------------------------------------------------------------------

 

Person to pay or be liable for the payment of any indebtedness described in this
definition of another Person, including, without limitation, any such
indebtedness, directly or indirectly guaranteed, or any agreement to purchase,
repurchase, or otherwise acquire such indebtedness, obligation or liability or
any security therefore, or to provide funds for the payment or discharge
thereof, or to maintain solvency, assets, level of income, or other financial
condition; (e) all obligations with respect to redeemable stock and redemption
or repurchase obligations under any Capital Stock or other equity securities
issued by such Person; (f) without duplication, all reimbursement obligations
and other liabilities of such Person with respect to surety bonds (whether bid,
performance or otherwise), letters of credit, banker’s acceptances, drafts or
similar documents or instruments issued for such Person’s account; (g) all
indebtedness of such Person in respect of indebtedness of another Person for
borrowed money or indebtedness of another Person otherwise described in this
definition which is secured by any consensual lien, security interest,
collateral assignment, conditional sale, mortgage, deed of trust, or other
encumbrance on any asset of such Person, whether or not such obligations,
liabilities or indebtedness are assumed by or are a personal liability of such
Person, all as of such time; (h) all obligations, liabilities and indebtedness
of such Person (marked to market) arising under swap agreements, cap agreements
and collar agreements and other agreements or arrangements designed to protect
such person against fluctuations in interest rates or currency or commodity
values; (i) all obligations owed by such Person under License Agreements with
respect to non-refundable, advance or minimum guarantee royalty payments; and
(j) the principal and interest portions of all rental obligations of such Person
under any synthetic lease or similar off-balance sheet financing where such
transaction is considered to be borrowed money for tax purposes but is
classified as an operating lease in accordance with GAAP.

 

1.85  “Information Certificate” shall mean, collectively, the Information
Certificates of Borrowers and Guarantors constituting Exhibit B hereto
containing material information with respect to Borrowers and Guarantors, their
respective businesses and assets provided by or on behalf of Borrowers and
Guarantors to Agent in connection with the preparation of this Agreement and the
other Financing Agreements and the financing arrangements provided for herein.

 

1.86  “Intellectual Property” shall mean, as to each Borrower and Guarantor,
such Borrower’s and Guarantor’s now owned and hereafter arising or acquired: 
patents, patent rights, patent applications, copyrights, works which are the
subject matter of copyrights, copyright applications, copyright registrations,
trademarks, trade names, trade styles, trademark and service mark applications,
and licenses and rights to use any of the foregoing; all extensions, renewals,
reissues, divisions, continuations, and continuations-in-part of any of the
foregoing; all rights to sue for past, present and future infringement of any of
the foregoing; inventions, trade secrets, formulae, processes, compounds,
drawings, designs, blueprints, surveys, reports, manuals, and operating
standards; goodwill (including any goodwill associated with any trademark or the
license of any trademark); customer and other lists in whatever form maintained;
trade secret rights, copyright rights, rights in works of authorship, domain
names and domain name registration; software and contract rights relating to
computer software programs, in whatever form created or maintained.

 

1.87  “Interest Expense” shall mean, for any period, as to any Person, as
determined in accordance with GAAP, the total interest expense of such Person
and its Subsidiaries, whether paid or accrued during such period (including the
interest component of

 

23

--------------------------------------------------------------------------------

 

Capital Leases for such period), including, without limitation, discounts in
connection with the sale of any Accounts, and bank fees, commissions, discounts
and other fees and charges owed with respect to letters of credit, banker’s
acceptances or similar instruments, but excluding interest paid in property
other than cash during such period.

 

1.88  “Interest Period” shall mean for any Eurodollar Rate Loan, a period of
approximately one (1), two (2), three (3) or six (6) months duration as any
Borrower (or Administrative Borrower on behalf of such Borrower) may elect, the
exact duration to be determined in accordance with the customary practice in the
applicable Eurodollar Rate market; provided, that, such Borrower (or
Administrative Borrower on behalf of such Borrower) may not elect an Interest
Period which will end after the last day of the then-current term of this
Agreement.

 

1.89  “Interest Rate” shall mean,

 

(A)                                  SUBJECT TO CLAUSE (B) OF THIS DEFINITION
BELOW:

 

(I)                                     AS TO PRIME RATE LOANS, A RATE EQUAL TO
THE THEN APPLICABLE MARGIN FOR PRIME RATE LOANS ON A PER ANNUM BASIS PLUS THE
PRIME RATE, AND

 

(II)                                  AS TO EURODOLLAR RATE LOANS, A RATE EQUAL
TO THE THEN APPLICABLE MARGIN FOR EURODOLLAR RATE LOANS ON A PER ANNUM BASIS
PLUS THE ADJUSTED EURODOLLAR RATE (IN EACH CASE, BASED ON THE LONDON INTERBANK
OFFERED RATE APPLICABLE FOR THE INTEREST PERIOD AS IN EFFECT TWO (2) BUSINESS
DAYS PRIOR TO THE COMMENCEMENT OF SUCH INTEREST PERIOD, WHETHER SUCH RATE IS
HIGHER OR LOWER THAN ANY RATE PREVIOUSLY SELECTED BY A BORROWER).

 

(B)                                 NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, AGENT MAY, AT ITS OPTION, AND AGENT SHALL, AT THE DIRECTION OF
THE REQUIRED LENDERS, INCREASE THE APPLICABLE MARGIN OTHERWISE USED TO CALCULATE
THE INTEREST RATE FOR PRIME RATE LOANS AND EURODOLLAR RATE LOANS IN EACH CASE TO
THE HIGHEST PERCENTAGE SET FORTH IN THE DEFINITION OF THE TERM APPLICABLE MARGIN
FOR EACH CATEGORY OF REVOLVING LOANS (WITHOUT REGARD TO THE AMOUNT OF MONTHLY
AVERAGE ADJUSTED EXCESS AVAILABILITY) PLUS TWO (2%) PERCENT PER ANNUM: (I) FOR
THE PERIOD (A) FROM AND AFTER THE EFFECTIVE DATE OF TERMINATION OR NON-RENEWAL
HEREOF UNTIL AGENT AND LENDERS HAVE RECEIVED FULL AND FINAL PAYMENT OF ALL
OUTSTANDING AND UNPAID OBLIGATIONS IN IMMEDIATELY AVAILABLE FUNDS AND (B) FROM
AND AFTER THE DATE OF THE OCCURRENCE OF AN EVENT OF DEFAULT AND FOR SO LONG AS
SUCH EVENT OF DEFAULT IS CONTINUING AND (II) ON REVOLVING LOANS AT ANY TIME
OUTSTANDING IN EXCESS OF THE BORROWING BASE (WHETHER OR NOT SUCH EXCESS(ES)
ARISE OR ARE MADE WITH OR WITHOUT THE KNOWLEDGE OR CONSENT OF AGENT OR ANY
LENDER AND WHETHER MADE BEFORE OR AFTER AN EVENT OF DEFAULT).

 

1.90  “Inventory” shall mean, as to each Borrower and Guarantor, all of such
Borrower’s and Guarantor’s now owned and hereafter existing or acquired goods,
wherever located, which (a) are leased by such Borrower or Guarantor as lessor;
(b) are held by such Borrower for sale or lease or to be furnished under a
contract of service; (c) are furnished by such Borrower or Guarantor under a
contract of service; or (d) consist of raw materials, work in process, finished
goods or materials used or consumed in its business.

 

1.91  “Inventory Loan Limit” shall mean fifty (50%) percent of the Maximum
Credit.

 

24

--------------------------------------------------------------------------------

 

 

1.92  “Investment Property Control Agreement” shall mean an agreement in
writing, in form and substance reasonably satisfactory to Agent, by and among
Agent, any Borrower or Guarantor (as the case may be) and any securities
intermediary, commodity intermediary or other person who has custody, control or
possession of any investment property of such Borrower or Guarantor.

 

1.93  “Lease Agreement” shall mean any Existing HPT Lease or any other lease
agreement entered into by a Borrower or Guarantor or Specified Subsidiary
pursuant to which such Borrower or Guarantor or Specified Subsidiary leases Real
Property (and related personal property) from any other Person.

 

1.94  “Lenders” shall mean the financial institutions who are signatories hereto
as Lenders and other persons made a party to this Agreement as a Lender in
accordance with Section 13.7 hereof, and their respective successors and
assigns; each sometimes being referred to herein individually as a “Lender”.

 

1.95  “Letter of Credit Accommodations” shall mean, collectively,  the letters
of credit, merchandise purchase or other guaranties which are from time to time
either (a) issued or opened by Agent or any Lender for the account of any
Borrower or Obligor or (b) with respect to which Agent or Lenders have agreed to
indemnify the issuer or guaranteed to the issuer the performance by any Borrower
or Obligor of its obligations to such issuer; sometimes being referred to herein
individually as “Letter of Credit Accommodation”.

 

1.96  “License Agreements” shall have the meaning set forth in Section 8.11
hereof.

 

1.97  “Loans” shall mean the Revolving Loans.

 

1.98  “London Interbank Offered Rate” shall mean, with respect to any Eurodollar
Rate Loan for the Interest Period applicable thereto, the rate of interest per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page (or any successor page) as the London interbank offered
rate for deposits in U.S. Dollars at approximately 11:00 A.M. (London time) two
(2) Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, that, if more than one rate is
specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates.

 

1.99  “Material Adverse Effect” shall mean a material adverse effect on (a) the
financial condition, business, performance or operations of Borrowers and
Guarantors (taken as a whole); (b) the legality, validity or enforceability of
this Agreement or any of the other Financing Agreements; (c) the legality,
validity, enforceability, perfection or priority of the security interests and
liens of Agent upon the Collateral; (d) the ability of Borrowers to repay the
Obligations or of any Borrower to perform its obligations under this Agreement
or any of the other Financing Agreements as and when to be performed; or (e) the
ability of Agent or any Lender to enforce the Obligations or realize upon the
Collateral or otherwise with respect to the rights and remedies of Agent and
Lenders under this Agreement or any of the other Financing Agreements.

 

25

--------------------------------------------------------------------------------

 

1.100  “Material Contract” shall mean (a) the Shared Services Agreement, (b)
each of the Existing HPT Leases, (c) the Freightliner Agreement, (d) the
Sublease Agreement, dated as of January 31, 2007, by and between TA Operating
and TA Leasing and (e) any other contract or other agreement (other than the
Financing Agreements), whether written or oral, to which any Borrower or
Guarantor is a party as to which the breach, nonperformance, cancellation or
failure to renew by any party thereto would have a Material Adverse Effect.

 

1.101  “Material License Agreement” shall mean each License Agreement to which
any Borrower or Guarantor is a party which constitutes a Material Contract;
sometimes referred to herein collectively as “Material License Agreements.”

 

1.102  “Maturity Date” shall have the meaning set forth in Section 13.1 hereof.

 

1.103  “Maximum Credit” shall mean the amount of $100,000,000, as such amount
may be increased in accordance with Section 2.3 hereof.

 

1.104  “Monthly Average Adjusted Excess Availability” shall mean, at any time,
the daily average of the Adjusted Excess Availability for the immediately
preceding calendar month.

 

1.105  “Multiemployer Plan” shall mean a “multi-employer plan” as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding six (6) years contributed to by any Borrower,
Guarantor or any ERISA Affiliate.

 

1.106  “Net Recovery Percentage” shall mean the fraction, expressed as a
percentage, (a) the numerator of which is the amount equal to the amount of the
recovery in respect of the Inventory at such time on a “going out of business “
basis as set forth in the most recent acceptable appraisal of Inventory received
by Agent in accordance with Section 7.3, net of operating expenses, liquidation
expenses and commissions, and (b) the denominator of which is the applicable
average cost of the aggregate amount of the Inventory subject to such appraisal.

 

1.107  “New Lending Office” shall have the meaning specified in Section 6.13
hereof.

 

1.108  “Non-US Lender” shall have the meaning set forth in Section 6.13 hereof.

 

1.109  “Obligations” shall mean (a) any and all Loans, Letter of Credit
Accommodations and all other obligations, liabilities and indebtedness of every
kind, nature and description owing by any or all of Borrowers to Agent or any
Lender and/or any of their Affiliates, including principal, interest, charges,
fees, costs and expenses, however evidenced, whether as principal, surety,
endorser, guarantor or otherwise, arising under this Agreement or any of the
other Financing Agreements, whether now existing or hereafter arising, whether
arising before, during or after the initial or any renewal term of this
Agreement or after the commencement of any case with respect to such Borrower
under the United States Bankruptcy Code or any similar statute (including the
payment of interest and other amounts which would accrue and become due but for
the commencement of such case, whether or not such amounts are allowed or
allowable in whole or in part in such case), whether direct or indirect,
absolute or

 

26

--------------------------------------------------------------------------------

 

contingent, joint or several, due or not due, primary or secondary, liquidated
or unliquidated, or secured or unsecured and (b) for purposes of Section 5.1
hereof and the Security Provisions and subject to the priority in right of
payment set forth in Section 6.4 hereof, all obligations, liabilities and
indebtedness of every kind, nature and description owing by any or all of
Borrowers or Guarantors to Agent or any Bank Product Provider arising under or
pursuant to any Bank Products, whether now existing or hereafter arising,
provided, that, (i) as to any such obligations, liabilities and indebtedness
arising under or pursuant to a Hedge Agreement, the same shall only be included
within the Obligations if upon Agent’s request, Agent shall have entered into an
agreement, in form and substance  reasonably satisfactory to Agent, with the
Bank Product Provider that is a counterparty to such Hedge Agreement, as
acknowledged and agreed to by Borrowers and Guarantors, providing for the
delivery to Agent by such counterparty or information with respect to the amount
of such obligations and providing for the other rights of Agent and such Bank
Product Provider in connection with such arrangements, (ii) any Bank Product
Provider, other than Wachovia and its Affiliates, shall have delivered written
notice to Agent that (A) such Bank Product Provider has entered into a
transaction to provide Bank Products to a Borrower and Guarantor and (B) the
obligations arising pursuant to such Bank Products provided to Borrowers and
Guarantors constitute Obligations entitled to the benefits of the security
interest of Agent granted hereunder, and (iii) in no event shall any Bank
Product Provider to whom such obligations, liabilities or indebtedness are owing
be deemed a Lender for purposes hereof to the extent of and as to such
obligations, liabilities or indebtedness other than for purposes of Section 5.1
hereof and other than for purposes of Sections 12.1, 12.2, 12.3(b), 12.6, 12.7.
12.9, 12.12, 13.1(a) (but solely to the extent relating to the delivery of cash
collateral for Obligations arising under or in connection with any Bank
Products), and 13.6 hereof.

 

1.110  “Obligor” shall mean any guarantor, endorser, acceptor, surety or other
person liable on or with respect to the Obligations or who is the owner of any
property which is security for the Obligations (including, without limitation,
Guarantors), other than Borrowers.

 

1.111  “Other Taxes” shall have the meaning specified in Section 6.13 hereof.

 

1.112  “Parent” shall mean TravelCenters of America LLC, a Delaware limited
liability company, and its successors and assigns.

 

1.113  “Participant” shall mean any financial institution that acquires and
holds a participation in the interest of any Lender in any of the Loans and
Letter of Credit Accommodations in conformity with the provisions of Section
13.7 of this Agreement governing participations.

 

1.114  “Perishable Inventory” shall mean Inventory consisting of dairy, frozen
foods, deli, bread, sweet snacks and other perishable grocery items.

 

1.115  “Permitted Acquisitions” shall mean the purchase by a Borrower or
Guarantor (whether directly or indirectly through a Specified Subsidiary) after
the date hereof of all or substantially all of the assets of any Person or a
business or division of such Person (including pursuant to a merger with such
Person or the formation of a wholly owned Subsidiary solely for such purpose
that is merged with such Person) or of all or a majority of the Capital Stock of
such Person (such assets or Person being referred to herein as the “Acquired
Business”) in one or a series of transactions that satisfies each of the
following conditions as determined by Agent:

 

27

--------------------------------------------------------------------------------

 

(A)           THE ACQUIRED BUSINESS SHALL BE AN OPERATING COMPANY THAT ENGAGES
IN A LINE OF BUSINESS SUBSTANTIALLY SIMILAR TO THE BUSINESS THAT BORROWERS ARE
ENGAGED IN ON THE DATE HEREOF OR ANY BUSINESS REASONABLY RELATED OR
COMPLEMENTARY TO SUCH LINE OF BUSINESS,

 

(B)           AGENT SHALL HAVE RECEIVED ALL ITEMS REQUIRED BY SECTIONS 5.2 AND
9.21 IN CONNECTION WITH THE ACQUIRED BUSINESS (SUBJECT TO THE TERMS OF SECTION
9.21(D) HEREOF),

 

(C)           IN THE CASE OF THE ACQUISITION OF THE CAPITAL STOCK OF ANOTHER
PERSON, THE BOARD OF DIRECTORS (OR OTHER COMPARABLE GOVERNING BODY) OF SUCH
OTHER PERSON SHALL HAVE DULY APPROVED SUCH ACQUISITION AND SUCH PERSON SHALL NOT
HAVE ANNOUNCED THAT IT WILL OPPOSE SUCH ACQUISITION OR SHALL NOT HAVE COMMENCED
ANY ACTION WHICH ALLEGES THAT SUCH ACQUISITION WILL VIOLATE APPLICABLE LAW,

 

(D)           EXCESS AVAILABILITY PLUS UNRESTRICTED CASH SHALL NOT BE LESS THAN 
THE AMOUNT EQUAL TO THIRTY-FIVE (35%) PERCENT OF THE MAXIMUM CREDIT, AS OF THE
DATE OF SUCH ACQUISITION AND IMMEDIATELY AFTER GIVING EFFECT THERETO,

 

(E)           NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING AS OF THE DATE OF THE ACQUISITION OR ANY PAYMENT IN RESPECT THEREOF
MADE ON OR ABOUT THE CLOSING DATE OF SUCH ACQUISITION AND AFTER GIVING EFFECT TO
THE ACQUISITION OR SUCH PAYMENT,

 

(F)            IN THE CASE OF AN ACQUISITION OF CAPITAL STOCK OF ANOTHER PERSON,
SUCH PERSON SHALL BE ORGANIZED UNDER THE LAWS OF A JURISDICTION WITHIN THE
UNITED STATES EXCEPT THAT SUCH PERSON ACQUIRED PURSUANT TO SUCH ACQUISITION MAY
BE ORGANIZED UNDER THE LAWS OF A JURISDICTION OUTSIDE THE UNITED STATES IF (I)
ONE OR MORE OTHER PERSONS ACQUIRED PURSUANT TO SUCH ACQUISITION IS ORGANIZED
UNDER THE LAWS OF A JURISDICTION WITHIN THE UNITED STATES AND (II) THE BOOK
VALUE OF THE ASSETS OF SUCH PERSON SHALL NOT EXCEED FIVE (5%) OF THE BOOK VALUE
OF THE ASSETS OF ALL SUCH OTHER PERSONS,

 

(G)           IN THE CASE OF AN ACQUISITION OF ASSETS OR A BUSINESS OR DIVISION
OF ANOTHER PERSON, SUCH ASSETS, BUSINESS OR DIVISION SHALL BE LOCATED WITHIN THE
UNITED STATES EXCEPT THAT SUCH ASSETS, BUSINESS OR DIVISION ACQUIRED PURSUANT TO
SUCH ACQUISITION MAY BE LOCATED OUTSIDE THE UNITED STATES IF (I) OTHER ASSETS,
BUSINESSES OR DIVISIONS WHICH ARE ACQUIRED PURSUANT TO SUCH ACQUISITION ARE
LOCATED WITHIN THE UNITED STATES AND (II) THE BOOK VALUE OF SUCH ASSETS,
BUSINESS OR DIVISION SHALL NOT EXCEED FIVE (5%) PERCENT OF THE BOOK VALUE OF
SUCH OTHER ASSETS, BUSINESS OR DIVISIONS,

 

(H)           IN THE CASE OF AN ACQUISITION WHERE THE CONSIDERATION PAID OR
PAYABLE IS GREATER THAN $25,000,000, AGENT SHALL HAVE RECEIVED NOT LESS THAN
FIVE (5) BUSINESS DAYS’ PRIOR WRITTEN NOTICE (OR SUCH LESSER PERIOD AS TO WHICH
AGENT MAY REASONABLY CONSENT) OF SUCH ACQUISITION;

 

(I)            IN THE CASE OF AN ACQUISITION OF MORE THAN ONE TRAVEL CENTER
LOCATION, AGENT SHALL HAVE RECEIVED A CERTIFICATE OF THE CHIEF FINANCIAL OFFICER
OR CHIEF EXECUTIVE OFFICER OF ADMINISTRATIVE BORROWER CERTIFYING TO AGENT AND
LENDERS AS TO THE MATTERS SET FORTH ABOVE IN THIS DEFINITION, AND

 

(J)            IN THE CASE OF AN ACQUISITION OF ONLY A SINGLE TRAVEL CENTER
LOCATION, AGENT SHALL RECEIVE, ON OR PRIOR TO THE DATE ON WHICH BORROWERS AND
GUARANTORS ARE REQUIRED TO DELIVER

 

28

--------------------------------------------------------------------------------

 

THE NEXT SUCCEEDING COMPLIANCE CERTIFICATE PURSUANT TO SECTION 9.6(A) HEREOF, A
CERTIFICATE OF THE CHIEF FINANCIAL OFFICER OR CHIEF  EXECUTIVE OFFICER OF
ADMINISTRATIVE BORROWER CERTIFYING TO AGENT AND LENDER AS TO THE MATTERS SET
FORTH ABOVE IN THIS DEFINITION.

 

1.116  “Person” or “person” shall mean any individual, sole proprietorship,
partnership, corporation (including any corporation which elects subchapter S
status under the Code), limited liability company, limited liability
partnership, business trust, unincorporated association, joint stock
corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.

 

1.117  “Petro Companies” shall mean, collectively, Petro, Petro Distributing and
Petro Financial.

 

1.118  “Petro Existing Letters of Credit” shall mean the letters of credit
issued for the account of any of the Petro Companies or for which any of the
Petro Companies are liable which are listed on Schedule 1.118 hereto.

 

1.119  “Petro Existing Security Agreement” shall mean the Security, Collateral
Agency and Intercreditor Agreement, dated as of February 9, 2004, among Petro,
certain affiliates of Petro, Wells Fargo Bank, N.A., as agent and collateral
agent, the Petro Indenture Trustee and ExxonMobil Oil, as the same now exists or
may hereafter be amended in accordance with the terms hereof.

 

1.120  “Petro Existing Security Agreement Termination Date” shall have the
meaning set forth in Section 9.23 hereof.

 

1.121  “Petro Indenture” shall mean the Indenture, dated as of February 9, 2004,
by and among the Petro Companies, Petro Stopping Centers Holdings, L.P., Petro,
Inc. and the Petro Indenture Trustee, as amended by the First Supplemental
Indenture, dated as of February 9, 2004.

 

1.122  “Petro Indenture Cash Collateral” shall have the meaning set forth in
Section 8.3 hereof.

 

1.123  “Petro Indenture Trustee” shall mean The Bank of New York, as trustee
under the Petro Indenture.

 

1.124   “Petro Lien Effective Date “ shall mean the earlier of (a) the date
which is ninety (90) days after the date of this Agreement (or such later date
as to which Agent shall consent in writing, which consent shall not be
unreasonably withheld so long as the Petro Companies are continuing to
diligently use their commercially reasonable efforts to cause all of the Petro
Existing Letters of Credit to be terminated), (b) the first date on which all of
the Petro Existing Letters of Credit have expired or been terminated or (c) the
date on which the negative pledge clause contained in the Petro Existing
Security Agreement is waived or otherwise ceases to be effective as to the liens
of Agent; provided, that, in no event shall the Petro Lien Effective Date be
later than August 31, 2008.

 

1.125  “Petro Travel Plaza Operating Agreement” shall mean the Limited Liability
Company Operating Agreement of Petro Travel Plaza LLC, dated as of December 5,

 

29

--------------------------------------------------------------------------------

 

1997, by and among Petro Shopping Centers, L.P., Tejon Development Corporation
and Tejon Ranch Company, as amended by the First Amendment to the Limited
Liability Company Operating Agreement of Petro Travel Plaza LLC, dated as of
January 1, 1999, and the Second Amendment to the Limited Liability Company
Operating Agreement of Petro Travel Plaza LLC, dated as of December 19, 2002, as
in effect on the date hereof.

 

1.126  “Plan” means an employee benefit plan (as defined in Section 3(3) of
ERISA) which any Borrower or Guarantor sponsors, maintains, or to which it
makes, is making, or is obligated to make contributions, or in the case of a
Multiemployer Plan has made contributions at any time during the immediately
preceding six (6) plan years.

 

1.127  “Prime Rate” shall mean the rate from time to time publicly announced by
Wachovia Bank, National Association, or its successors, as its prime rate,
whether or not such announced rate is the best rate available at such bank.

 

1.128  “Prime Rate Loans” shall mean any Loans or portion thereof on which
interest is payable based on the Prime Rate in accordance with the terms
thereof.

 

1.129  “Propco” shall mean any Guarantor formed or acquired after the date
hereof which does not own, and will not own or acquire, any assets other than
Real Property and Equipment and which has been designated in writing after the
date hereof as a “Propco” by Parent to Agent.

 

1.130  “Pro Rata Share” shall mean as to any Lender, the fraction (expressed as
a percentage) the numerator of which is such Lender’s Commitment and the
denominator of which is the aggregate amount of all of the Commitments of
Lenders, as adjusted from time to time in accordance with the provisions of
Section 13.7 hereof; provided, that, if the Commitments have been terminated,
the numerator shall be the unpaid amount of such Lender’s Loans and its interest
in the Letter of Credit Accommodations and the denominator shall be the
aggregate amount of all unpaid Loans and Letter of Credit Accommodations.

 

1.131  “Provision for Taxes” shall mean an amount equal to all taxes imposed on
or measured by net income, whether Federal, State, Provincial, county or local,
and whether foreign or domestic, that are paid or payable by any Person in
respect of any period in accordance with GAAP.

 

1.132  “Qualified Assumed Indebtedness” shall mean Indebtedness of a Person
which becomes a Borrower or Guarantor after the date hereof in connection with a
Permitted Acquisition; provided, that, (a) such Indebtedness existed prior to
the closing of such Permitted Acquisition and (b) such indebtedness was not
created or incurred in connection with, or in anticipation of, such Permitted
Acquisition.

 

1.133  “Real Property” shall mean all now owned and hereafter acquired real
property of each Borrower and Guarantor, including leasehold interests, together
with all buildings, structures, and other improvements located thereon and all
licenses, easements and appurtenances relating thereto, wherever located.

 

1.134  “Real Property Availability” shall mean (a) prior to the date on which
the Real Property Availability Conditions have been satisfied, zero (o), and (b)
from and after the

 

30

--------------------------------------------------------------------------------

 

date on which the Real Property Availability Conditions have been satisfied as
reasonably determined by Agent, the amount equal to sixty five (65%) percent of
the fair market value of Eligible Real Property as set forth in the most recent
acceptable appraisal of such Real Property received by Agent in accordance with
the terms hereof; provided, that, the Real Property Availability shall be
reduced on the first day of each calendar quarter, commencing with the first
full calendar quarter following the date on which the Real Property Availability
Conditions have been satisfied, by an amount equal to the initial Real Property
Availability calculated in accordance with this clause (b) divided by twenty
eight (28).

 

1.135  “Real Property Availability Conditions” shall mean, collectively, the
following:

 

(A)           AGENT SHALL HAVE RECEIVED A WRITTEN REQUEST FROM ADMINISTRATIVE
BORROWER TO INCLUDE THE REAL PROPERTY AVAILABILITY IN THE BORROWING BASE (WHICH
REQUEST SHALL BE IRREVOCABLE);

 

(B)           AGENT SHALL HAVE RECEIVED, AS TO EACH PARCEL OF REAL PROPERTY
CONSTITUTING ELIGIBLE REAL PROPERTY, A MORTGAGE OR DEED OF TRUST ENCUMBERING
SUCH REAL PROPERTY, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO AGENT, DULY
AUTHORIZED, EXECUTED AND DELIVERED BY THE APPLICABLE BORROWER;

 

(C)           AGENT SHALL HAVE RECEIVED A WRITTEN APPRAISAL AS TO EACH PARCEL OF
REAL PROPERTY CONSTITUTING ELIGIBLE REAL PROPERTY, WHICH SHALL BE IN FORM, SCOPE
AND METHODOLOGY REASONABLY ACCEPTABLE TO AGENT AND BY AN APPRAISER ACCEPTABLE TO
AGENT AND WHICH SHALL BE ADDRESSED TO AGENT AND SHALL REVEAL RESULTS ACCEPTABLE
TO AGENT;

 

(D)           AGENT SHALL HAVE RECEIVED ENVIRONMENTAL AUDITS OF EACH PARCEL OF
REAL PROPERTY CONSTITUTING ELIGIBLE REAL PROPERTY, CONDUCTED BY AN INDEPENDENT
ENVIRONMENTAL ENGINEERING FIRM ACCEPTABLE TO AGENT, AND IN FORM, SCOPE AND
METHODOLOGY REASONABLY SATISFACTORY TO AGENT, CONFIRMING THAT (I) EACH BORROWER
AND GUARANTOR IS IN COMPLIANCE WITH ALL MATERIAL APPLICABLE ENVIRONMENTAL LAWS
WITH RESPECT TO SUCH REAL PROPERTY AND (II) THE ABSENCE OF ANY MATERIAL
ENVIRONMENTAL PROBLEMS WITH RESPECT TO SUCH REAL PROPERTY; AND

 

(E)           AGENT SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO AGENT, A VALID AND EFFECTIVE TITLE INSURANCE POLICY ISSUED BY A
COMPANY AND AGENT REASONABLY ACCEPTABLE TO AGENT: (I) INSURING THE PRIORITY,
AMOUNT AND SUFFICIENCY OF EACH MORTGAGE AND DEED OF TRUST DESCRIBED IN CLAUSE
(B) ABOVE, (II) INSURING AGAINST MATTERS THAT WOULD BE DISCLOSED BY SURVEYS AND
(III) CONTAINING ANY LEGALLY AVAILABLE ENDORSEMENTS, ASSURANCES OR AFFIRMATIVE
COVERAGE REQUESTED BY AGENT FOR PROTECTION OF ITS INTERESTS.

 

1.136  “Receivables” shall mean all of the following now owned or hereafter
arising or acquired property of each Borrower and Guarantor: (a) all Accounts;
(b) all interest, fees, late charges, penalties, collection fees and other
amounts due or to become due or otherwise payable in connection with any
Account; (c) all payment intangibles of such Borrower or Guarantor; (d)  letters
of credit, indemnities, guarantees, security or other deposits and proceeds
thereof issued payable to any Borrower or Guarantor or otherwise in favor of or
delivered to any Borrower or Guarantor in connection with any Account; or (e)
all other accounts, contract rights, chattel paper, instruments, notes, general
intangibles and other forms of obligations owing to any Borrower or Guarantor,
whether from the sale and lease of goods or other property, licensing of

 

31

--------------------------------------------------------------------------------

 

any property (including Intellectual Property or other general intangibles),
rendition of services or from loans or advances by any Borrower or Guarantor or
to or for the benefit of any third person (including loans or advances to any
Affiliates or Subsidiaries of any Borrower or Guarantor) or otherwise associated
with any Accounts, Inventory or general intangibles of any Borrower or Guarantor
(including, without limitation, choses in action, causes of action, tax refunds,
tax refund claims, any funds which may become payable to any Borrower or
Guarantor in connection with the termination of any Plan or other employee
benefit plan and any other amounts payable to any Borrower or Guarantor from any
Plan or other employee benefit plan, rights and claims against carriers and
shippers, rights to indemnification, business interruption insurance and
proceeds thereof, casualty or any similar types of insurance and any proceeds
thereof and proceeds of insurance covering the lives of employees on which any
Borrower or Guarantor is a beneficiary).

 

1.137  “Records” shall mean, as to each Borrower and Guarantor, all of such
Borrower’s and Guarantor’s present and future books of account of every kind or
nature, purchase and sale agreements, invoices, ledger cards, bills of lading
and other shipping evidence, statements, correspondence, memoranda, credit files
and other data relating to the Collateral or any account debtor, together with
the tapes, disks, diskettes and other data and software storage media and
devices, file cabinets or containers in or on which the foregoing are stored
(including any rights of any Borrower or Guarantor with respect to the foregoing
maintained with or by any other person).

 

1.138  “Reference Bank” shall mean Wachovia Bank, National Association, or such
other bank as Agent may from time to time designate.

 

1.139  “Register” shall have the meaning set forth in Section 13.7 hereof.

 

1.140  “Required Lenders” shall mean, at any time, those Lenders whose Pro Rata
Shares aggregate more than fifty (50%) percent of the aggregate of the
Commitments of all Lenders, or if the Commitments shall have been terminated,
Lenders to whom more than fifty (50%) percent of the then outstanding
Obligations are owing; provided, that, if there is more than one Lender and the
Pro Rata Share of any Lender is more than fifty (50%) percent, then Required
Lenders shall mean such Lender plus at least one other Lender.

 

1.141  “Reserves” shall mean as of any date of determination, such amounts as
Agent may from time to time establish and revise in good faith reducing the
amount of Revolving Loans and Letter of Credit Accommodations which would
otherwise be available to any Borrower under the lending formula(s) provided for
herein:  (a) to reflect events, conditions, contingencies or risks which, as
determined by Agent in good faith, adversely affect, or would have a reasonable
likelihood of adversely affecting, either (i) the Collateral or any other
property which is security for the Obligations, its value or the amount that
might be received by Agent from the sale or other disposition or realization
upon such Collateral, or (ii) the assets or business of any Borrower or Obligor
or (iii) the security interests and other rights of Agent or any Lender in the
Collateral (including the enforceability, perfection and priority thereof) or
(b) to reflect Agent’s good faith belief that any collateral report or financial
information furnished by or on behalf of any Borrower or Obligor to Agent is or
may have been incomplete, inaccurate or misleading in any material respect or
(c) in respect of any state of facts which constitute a Default or an Event of
Default. Without limiting the generality of the foregoing, Reserves may, at
Agent’s option, be established to reflect any of the following: (i) that
dilution with respect to

 

32

--------------------------------------------------------------------------------

 

the Accounts (based on the ratio of the aggregate amount of non-cash reductions
in Accounts for any period to the aggregate dollar amount of the sales of such
Borrower for such period) as calculated by Agent for any period is or is
reasonably anticipated to be greater than five (5%) percent; (ii) returns,
discounts, claims, vendor rebates, credits and allowances of any nature that are
not paid pursuant to the reduction of Accounts; (iii) a change in the turnover,
age or mix of the categories of Inventory that adversely affects the aggregate
value of all Inventory, (iv) inventory shrinkage, (v) reserves in respect of
markdowns and cost variances (pursuant to discrepancies between the purchase
order price of Inventory and the actual cost thereof), (vi) amounts due or to
become due in respect of sales, use, withholding, excise and/or similar taxes,
(vii) any rental payments, service charges or other amounts to become due to
lessors and operators of real property to the extent Inventory, Equipment or
Records are located in or on such property or such Records are needed to monitor
or otherwise deal with the Collateral (except that Agent will not establish such
reserve for any property for which Agent has received a Collateral Access
Agreement accepted by Agent in writing if all such payments, charges and other
amounts have been paid when due), provided, that, the Reserves established
pursuant to this clause (vii) as to retail store locations that are leased shall
not exceed at any time the aggregate of amounts payable for the next three (3)
months to the lessors of such retail store locations, provided, that, such
limitation on the amount of the Reserves pursuant to this clause (vii) shall
only apply so long as: (A) no Event of Default shall have occurred and be
continuing, (B) neither a Borrower, Guarantor nor Agent shall have received
notice of any event of default under the lease with respect to such location and
(C) no Borrower or Guarantor has granted to the lessor a security interest or
lien upon any assets of such Borrower or Guarantor, (viii) amounts owing by
Borrowers to Credit Card Issuers or Credit Card Processors in connection with
the Credit Card Agreements, (ix) variances between the perpetual inventory
records of Borrowers and the results of the test counts of Inventory conducted
by Agent with respect thereto in excess of the percentage acceptable to Agent,
(x) the aggregate amount of deposits, if any, received by any Borrower from its
customers in respect of unfilled orders for goods, (xi) fifty (50%) percent of
the aggregate amount of gift certificates, and (xii) obligations, liabilities or
indebtedness (contingent or otherwise) of Borrowers or Guarantors to any Bank
Product Provider arising under or in connection with any Bank Products of any
Borrower or Guarantor with a Bank Product Provider or as such Bank Product
Provider may otherwise require in connection therewith to the extent that such
obligation, liabilities or indebtedness constitute Obligations as such term is
defined herein or otherwise receive the benefit of the security interest of
Agent in any Collateral. To the extent Agent may establish a Reserve so as to
address any event, condition or other circumstance in a manner satisfactory to
Agent as determined by Agent in good faith, Agent shall not establish a new
criteria or revise criteria for Eligible Accounts, Eligible Equipment, Eligible
Inventory, Eligible Credit Card Receivables or Eligible Real Property for the
same purpose and Agent shall not make Accounts, Credit Card Receivables,
Equipment, Inventory or Real Property ineligible based on criteria for Eligible
Accounts, Eligible Equipment, Eligible Credit Card Receivables or Eligible Real
Property for the same purpose. The amount of any Reserve established by Agent
shall have a reasonable relationship to the event, condition or other matter
which is the basis for such reserve as determined by Agent in good faith.

 

1.142  “Restricted Payment” shall mean (a) any dividend or other distribution,
direct or indirect, on account of any Capital Stock of any Borrower or Guarantor
now or hereafter outstanding, except a dividend payable solely in Capital Stock
of identical class to the holders of that class; (b) any redemption, conversion,
exchange, retirement, sinking fund or

 

33

--------------------------------------------------------------------------------

 

similar payment, purchase or other acquisition for value, direct or indirect, of
any Capital Stock of any Borrower or Guarantor now or hereafter outstanding; and
(c) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire any Capital Stock of any Borrower
or Guarantor now or hereafter outstanding.

 

1.143  “Revolving Loans” shall mean the loans now or hereafter made by or on
behalf of any Lender or by Agent for the account of any Lender on a revolving
basis pursuant to the Credit Facility (involving advances, repayments and
readvances) as set forth in Section 2.1 hereof.

 

1.144  “Secured Parties” shall mean, collectively, (i) Agent, (ii) Lenders, and
(iii) any Bank Product Provider; provided, that, as to any Bank Product
Provider, only to the extent of the Obligations owing to such Bank Product
Provider; such parties are sometimes referred to herein individually as a
“Secured Party”.

 

1.145  “Security Provisions” shall mean the following provisions of the
Financing Agreements (as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced): (a) Section
1(a) of the Guarantee, dated even date herewith, by Borrowers and Guarantors in
favor of Agent; (b) Sections 1 and 2 of the Pledge and Security Agreement, dated
even date herewith, by TravelCenters in favor of Agent; (c) Sections 1 and 2 of
the Pledge and Security Agreement, dated even date herewith, by Holding in favor
of Agent; (d) Sections 1 and 2 of the Pledge and Security Agreement, dated even
date herewith, by TravelCenters and TCA in favor of Agent; (e) Sections 1 and 2
of the Pledge and Security Agreement, dated even date herewith, by Petro in
favor of Agent; (f) Sections 1 and 2 of the Trademark Collateral Assignment and
Security Agreement, dated even date herewith, by and between Petro and Agent;
(g) Sections 1 and 2 of the Copyright Collateral Assignment and Security
Agreement, dated even date herewith, by and between Petro and Agent; and (h)
such other sections of such other Financing Agreements as Agent may from time to
time designate as a “Security Provision” in a writing delivered by Agent to
Administrative Borrower.

 

1.146  “Shared Services Agreement” shall mean the Management and Shared Services
Agreement, dated as of January 31, 2007, by and between Parent and Reit
Management & Research LLC, as the same exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.

 

1.147  “Solvent” shall mean, at any time with respect to any Person, that at
such time such Person (a) is able to pay its debts as they mature and has (and
has a reasonable basis to believe it will continue to have) sufficient capital
(and not unreasonably small capital) to carry on its business consistent with
its practices as of the date hereof, and (b) the assets and properties of such
Person at a fair valuation (and including as assets for this purpose at a fair
valuation all rights of subrogation, contribution or indemnification arising
pursuant to any guarantees given by such Person) are greater than the
Indebtedness of such Person, and including subordinated and contingent
liabilities computed at the amount which, such person has a reasonable basis to
believe, represents an amount which can reasonably be expected to become an
actual or matured liability (and including as to contingent liabilities arising
pursuant to any guarantee the face amount of such liability as reduced to
reflect the probability of it becoming a matured liability).

 

1.148  “Special Agent Advances” shall have the meaning set forth in Section
12.11 hereof.

 

34

--------------------------------------------------------------------------------

 

1.149  “Specified Subsidiary” shall mean (a) any Person whose Capital Stock is
purchased by a Borrower or Guarantor pursuant to a Permitted Acquisition and (b)
any Subsidiary of a Borrower or Guarantor formed pursuant to Section 9.10(l) for
the purpose of making, or in anticipation of consummating, a Permitted
Acquisition; provided, that, in no event shall a Specified Subsidiary be an
Excluded Subsidiary.

 

1.150  “Store Accounts” shall have the meaning set forth in Section 6.3 hereof.

 

1.151  “Standby Letters of Credit” shall mean all Letter of Credit
Accommodations other than Commercial Letters of Credit.

 

1.152  “Subsidiary” or “subsidiary” shall mean, with respect to any Person, any
corporation, limited liability company, limited liability partnership or other
limited or general partnership, trust, association or other business entity of
which an aggregate of at least a majority of the outstanding Capital Stock or
other interests entitled to vote in the election of the board of directors of
such corporation (irrespective of whether, at the time, Capital Stock of any
other class or classes of such corporation shall have or might have voting power
by reason of the happening of any contingency), managers, trustees or other
controlling persons, or an equivalent controlling interest therein, of such
Person is, at the time, directly or indirectly, owned by such Person and/or one
or more subsidiaries of such Person.

 

1.153  “Taxes” shall have the meaning set forth in Section 6.13 hereof.

 

1.154  “Tested Subsidiaries” shall mean all Subsidiaries of Parent;
provided that, if the EBITDAR or the total assets of the Excluded Subsidiaries
(on a combined basis) for any period for which the Debt Incurrence Ratio or the
Fixed Charge Coverage Ratio is calculated pursuant to this Agreement or any
other Financing Agreement is greater than five (5%) percent of the EBITDAR or
the total assets, respectively, of Parent and its Subsidiaries (on a
consolidated basis) for such period, then Tested Subsidiaries shall mean all
Subsidiaries of Parent other than the Excluded Subsidiaries.

 

1.155  “UCC” shall mean the Uniform Commercial Code as in effect in the State of
New York, and any successor statute, as in effect from time to time (except that
terms used herein which are defined in the Uniform Commercial Code as in effect
in the State of New York on the date hereof shall continue to have the same
meaning notwithstanding any replacement or amendment of such statute except as
Agent may otherwise determine).

 

1.156       “Unrestricted Cash” shall mean, as of any date of determination, the
amount of cash of Borrowers and Guarantors maintained in bank accounts or
securities accounts (a) which is not subject to a perfected security interest in
favor of any Person (other than Agent), (b) with respect to which Agent has
received statements of the available balances thereof from the bank or other
financial institution at which such account is maintained which confirm such
amounts and (c) which is available to Borrower and Guarantors without condition
or restriction except those arising pursuant to the pledge (if any) in favor of
Agent; provided, that, in any event, Unrestricted Cash shall not include
Eligible Cash Collateral, Petro Indenture Cash Collateral or any cash in the
Customer Loyalty Accounts.

 

1.157  “Value” shall mean, as determined by Agent in good faith, with respect to
Inventory, the lower of (a) cost computed on an average basis in accordance with
GAAP or (b)

 

35

--------------------------------------------------------------------------------

 

market value, provided, that, for purposes of the calculation of the Borrowing
Base, (i) the Value of the Inventory shall not include: (A) the portion of the
value of Inventory equal to the profit earned by any Affiliate on the sale
thereof to any Borrower or (B) write-ups or write-downs in value with respect to
currency exchange rates and (ii) notwithstanding anything to the contrary
contained herein, the cost of the Inventory shall be computed in the same manner
and consistent with the most recent appraisal of the Inventory received and
accepted by Agent prior to the date hereof, if any.

 

1.158  “Voting Stock” shall mean with respect to any Person, (a) one (1) or more
classes of Capital Stock of such Person having general voting powers to elect at
least a majority of the board of directors, managers or trustees of such Person,
irrespective of whether at the time Capital Stock of any other class or classes
have or might have voting power by reason of the happening of any contingency,
and (b) any Capital Stock of such Person convertible or exchangeable without
restriction at the option of the holder thereof into Capital Stock of such
Person described in clause (a) of this definition.

 

1.159  “Wachovia” shall mean Wachovia Capital Finance Corporation (Central), an
Illinois corporation, in its individual capacity, and its successors and
assigns.

 

SECTION 2.           CREDIT FACILITIES

 

2.1         Loans.

 

(A)           SUBJECT TO AND UPON THE TERMS AND CONDITIONS CONTAINED HEREIN,
EACH LENDER SEVERALLY (AND NOT JOINTLY) AGREES TO MAKE ITS PRO RATA SHARE OF
REVOLVING LOANS TO BORROWERS FROM TIME TO TIME IN AMOUNTS REQUESTED BY A
BORROWER (OR ADMINISTRATIVE BORROWER ON BEHALF OF SUCH BORROWER) UP TO THE
AMOUNT OUTSTANDING AT ANY TIME EQUAL TO THE LESSER OF: (I) THE BORROWING BASE AT
SUCH TIME OR (II) THE MAXIMUM CREDIT AT SUCH TIME.

 

(B)           EXCEPT IN AGENT’S DISCRETION AND WITH THE CONSENT OF ALL LENDERS,
OR AS OTHERWISE PROVIDED HEREIN, (I) THE AGGREGATE AMOUNT OF THE LOANS AND THE
LETTER OF CREDIT ACCOMMODATIONS OUTSTANDING AT ANY TIME SHALL NOT EXCEED THE
MAXIMUM CREDIT, (II) THE AGGREGATE PRINCIPAL AMOUNT OF THE REVOLVING LOANS AND
LETTER OF CREDIT ACCOMMODATIONS OUTSTANDING AT ANY TIME SHALL NOT EXCEED THE
BORROWING BASE, (III) THE AGGREGATE PRINCIPAL AMOUNT OF THE REVOLVING LOANS AND
LETTER OF CREDIT ACCOMMODATIONS OUTSTANDING AT ANY TIME BASED ON ELIGIBLE
INVENTORY CONSISTING OF GASOLINE AND DIESEL FUEL SHALL NOT EXCEED THE FUEL
INVENTORY LOAN LIMIT, (IV) THE AGGREGATE PRINCIPAL AMOUNT OF THE REVOLVING LOANS
AND LETTER OF CREDIT ACCOMMODATIONS OUTSTANDING AT ANY TIME BASED ON THE
ELIGIBLE INVENTORY WHICH IS PERISHABLE INVENTORY SHALL NOT EXCEED $2,000,000 AND
(V) THE AGGREGATE PRINCIPAL AMOUNT OF REVOLVING LOANS AND LETTER OF CREDIT
ACCOMMODATIONS OUTSTANDING AT ANY TIME BASED ON ELIGIBLE INVENTORY SHALL NOT
EXCEED THE INVENTORY LOAN LIMIT.

 

(C)           IN THE EVENT THAT THE AGGREGATE PRINCIPAL AMOUNT OF THE LOANS AND
LETTER OF CREDIT ACCOMMODATIONS OUTSTANDING EXCEED THE MAXIMUM CREDIT, OR THE
AGGREGATE PRINCIPAL AMOUNT OF REVOLVING LOANS AND LETTER OF CREDIT
ACCOMMODATIONS OUTSTANDING EXCEED THE BORROWING BASE, OR THE AGGREGATE PRINCIPAL
AMOUNT OF REVOLVING LOANS AND LETTER OF CREDIT ACCOMMODATIONS OUTSTANDING BASED
ON ELIGIBLE INVENTORY CONSISTING OF GASOLINE AND DIESEL FUEL EXCEED THE FUEL
INVENTORY LOAN LIMIT, THE AGGREGATE PRINCIPAL AMOUNT OF REVOLVING LOANS AND
LETTER OF CREDIT ACCOMMODATIONS OUTSTANDING BASED ON THE ELIGIBLE INVENTORY
WHICH IS

 

36

--------------------------------------------------------------------------------

 

PERISHABLE INVENTORY EXCEEDS THE SUBLIMIT SET FORTH ABOVE, THE AGGREGATE
PRINCIPAL AMOUNT OF REVOLVING LOANS AND LETTER OF CREDIT ACCOMMODATIONS
OUTSTANDING BASED ON ELIGIBLE INVENTORY EXCEED THE INVENTORY LOAN LIMIT, OR THE
AGGREGATE AMOUNT OF THE OUTSTANDING LETTER OF CREDIT ACCOMMODATIONS EXCEED THE
SUBLIMIT FOR LETTER OF CREDIT ACCOMMODATIONS SET FORTH IN SECTION 2.2(E), SUCH
EVENT SHALL NOT LIMIT, WAIVE OR OTHERWISE AFFECT ANY RIGHTS OF AGENT OR LENDERS
IN SUCH CIRCUMSTANCES OR ON ANY FUTURE OCCASIONS AND BORROWERS SHALL, UPON
DEMAND BY AGENT, WHICH MAY BE MADE AT ANY TIME OR FROM TIME TO TIME, IMMEDIATELY
REPAY TO AGENT THE ENTIRE AMOUNT OF ANY SUCH EXCESS(ES) FOR WHICH PAYMENT IS
DEMANDED.

 

2.2         Letter of Credit Accommodations.

 

(A)           SUBJECT TO AND UPON THE TERMS AND CONDITIONS CONTAINED HEREIN, AT
THE REQUEST OF A BORROWER (OR ADMINISTRATIVE BORROWER ON BEHALF OF SUCH
BORROWER), AGENT AGREES, FOR THE RATABLE RISK OF EACH LENDER ACCORDING TO ITS
PRO RATA SHARE, TO PROVIDE OR ARRANGE FOR LETTER OF CREDIT ACCOMMODATIONS FOR
THE ACCOUNT OF SUCH BORROWER CONTAINING TERMS AND CONDITIONS REASONABLY
ACCEPTABLE TO AGENT AND THE ISSUER THEREOF. ANY PAYMENTS MADE BY OR ON BEHALF OF
AGENT OR ANY LENDER TO ANY ISSUER THEREOF AND/OR RELATED PARTIES IN CONNECTION
WITH THE LETTER OF CREDIT ACCOMMODATIONS PROVIDED TO OR FOR THE BENEFIT OF A
BORROWER SHALL CONSTITUTE ADDITIONAL REVOLVING LOANS TO SUCH BORROWER PURSUANT
TO THIS SECTION 2 (OR SPECIAL AGENT ADVANCES AS THE CASE MAY BE).

 

(B)           IN ADDITION TO ANY CUSTOMARY CHARGES, FEES OR EXPENSES CHARGED BY
ANY BANK OR ISSUER IN CONNECTION WITH THE LETTER OF CREDIT ACCOMMODATIONS,
BORROWERS SHALL PAY TO AGENT, FOR THE BENEFIT OF LENDERS, A LETTER OF CREDIT FEE
AT A RATE EQUAL TO THE PERCENTAGE (ON A PER ANNUM BASIS) SET FORTH BELOW ON THE
DAILY OUTSTANDING BALANCE OF THE COMMERCIAL LETTERS OF CREDIT AND STANDBY
LETTERS OF CREDIT DURING THE IMMEDIATELY PRECEDING MONTH (OR PART THEREOF),
PAYABLE IN ARREARS AS OF THE FIRST DAY OF EACH SUCCEEDING MONTH, PROVIDED, THAT,
SUCH PERCENTAGE SHALL BE INCREASED OR DECREASED, AS THE CASE MAY BE, TO THE
PERCENTAGE (ON A PER ANNUM BASIS) SET FORTH BELOW BASED ON THE MONTHLY AVERAGE
ADJUSTED EXCESS AVAILABILITY FOR THE IMMEDIATELY PRECEDING CALENDAR MONTH BEING
AT OR WITHIN THE AMOUNTS INDICATED FOR SUCH PERCENTAGE:

 

Tier

 

Monthly Average Excess
Adjusted Availability

 

Commercial
Letter of
Credit Rate

 

Standby
Letter of
Credit Rate

 

 

 

 

 

 

 

 

 

1

 

Greater than $40,000,000

 

.50

%

1.00

%

 

 

 

 

 

 

 

 

2

 

Less than or equal to $40,000,000 and greater than $20,000,000

 

.625

%

1.25

%

 

 

 

 

 

 

 

 

3

 

Less than or equal to $20,000,000

 

.750

%

1.50

%

 

37

--------------------------------------------------------------------------------

 

provided, that, (i) the applicable percentage shall be calculated and
established once each calendar month and shall remain in effect until adjusted
thereafter after the end of the next calendar month, and (ii) the applicable
percentage through March 31, 2008 shall be the amount for Tier 1 set forth above
and (iii) notwithstanding anything to the contrary contained herein, Agent may,
and upon the written direction of Required Lenders shall, require Borrowers to
pay to Agent for the benefit of Lenders, such letter of credit fee at a rate
equal to two (2%) percent per annum on such daily outstanding balance higher
than the rate set forth in Tier 3 for the period (1) from and after the
effective date of termination or non-renewal hereof until Agent and Lenders have
received full and final payment of all outstanding and unpaid Obligations in
immediately available funds and (2) from and after the date of the occurrence of
an Event of Default and for so long as such Event of Default is continuing. Such
letter of credit fee shall be calculated on the basis of a three hundred sixty
(360) day year and actual days elapsed and the obligation of Borrowers to pay
such fee shall survive the termination of this Agreement.

 

(C)           THE BORROWER REQUESTING SUCH LETTER OF CREDIT ACCOMMODATION (OR
ADMINISTRATIVE BORROWER ON BEHALF OF SUCH BORROWER) SHALL GIVE AGENT TWO (2)
BUSINESS DAYS’ PRIOR WRITTEN NOTICE OF SUCH BORROWER’S REQUEST FOR THE ISSUANCE
OF A LETTER OF CREDIT ACCOMMODATION. SUCH NOTICE SHALL BE IRREVOCABLE AND SHALL
SPECIFY THE ORIGINAL FACE AMOUNT OF THE LETTER OF CREDIT ACCOMMODATION
REQUESTED, THE EFFECTIVE DATE (WHICH DATE SHALL BE A BUSINESS DAY AND IN NO
EVENT SHALL BE A DATE LESS THAN TEN (10) DAYS PRIOR TO THE END OF THE THEN
CURRENT TERM OF THIS AGREEMENT) OF ISSUANCE OF SUCH REQUESTED LETTER OF CREDIT
ACCOMMODATION, WHETHER SUCH LETTER OF CREDIT ACCOMMODATION MAY BE DRAWN IN A
SINGLE OR IN PARTIAL DRAWS, THE DATE ON WHICH SUCH REQUESTED LETTER OF CREDIT
ACCOMMODATION IS TO EXPIRE (WHICH DATE SHALL BE A BUSINESS DAY), THE PURPOSE FOR
WHICH SUCH LETTER OF CREDIT ACCOMMODATION IS TO BE ISSUED, AND THE BENEFICIARY
OF THE REQUESTED LETTER OF CREDIT ACCOMMODATION. THE BORROWER REQUESTING THE
LETTER OF CREDIT ACCOMMODATION (OR ADMINISTRATIVE BORROWER ON BEHALF OF SUCH
BORROWER) SHALL ATTACH TO SUCH NOTICE THE PROPOSED TERMS OF THE LETTER OF CREDIT
ACCOMMODATION.

 

(D)           IN ADDITION TO BEING SUBJECT TO THE SATISFACTION OF THE APPLICABLE
CONDITIONS PRECEDENT CONTAINED IN SECTIONS 2.1 AND 4 HEREOF AND THE OTHER TERMS
AND CONDITIONS CONTAINED HEREIN, NO LETTER OF CREDIT ACCOMMODATION SHALL BE
AVAILABLE UNLESS EACH OF THE FOLLOWING CONDITIONS PRECEDENT HAVE BEEN SATISFIED
IN A MANNER REASONABLY SATISFACTORY TO AGENT:  (I) THE BORROWER REQUESTING SUCH
LETTER OF CREDIT ACCOMMODATION (OR ADMINISTRATIVE BORROWER ON BEHALF OF SUCH
BORROWER) SHALL HAVE DELIVERED TO THE PROPOSED ISSUER OF SUCH LETTER OF CREDIT
ACCOMMODATION AT SUCH TIMES AND IN SUCH MANNER AS SUCH PROPOSED ISSUER MAY
REQUIRE, AN APPLICATION, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO SUCH
PROPOSED ISSUER AND AGENT, FOR THE ISSUANCE OF THE LETTER OF CREDIT
ACCOMMODATION AND SUCH OTHER DOCUMENTS AS MAY BE REASONABLY REQUIRED PURSUANT TO
THE TERMS THEREOF, (II) AS OF THE DATE OF ISSUANCE, NO ORDER OF ANY COURT,
ARBITRATOR OR OTHER GOVERNMENTAL AUTHORITY SHALL PURPORT BY ITS TERMS TO ENJOIN
OR RESTRAIN MONEY CENTER BANKS GENERALLY FROM ISSUING LETTERS OF CREDIT OF THE
TYPE AND IN THE AMOUNT OF THE PROPOSED LETTER OF CREDIT ACCOMMODATION, AND NO
LAW, RULE OR REGULATION APPLICABLE TO MONEY CENTER BANKS GENERALLY AND NO
REQUEST OR DIRECTIVE (WHETHER OR NOT HAVING THE FORCE OF LAW) FROM

 

38

--------------------------------------------------------------------------------

 

ANY GOVERNMENTAL AUTHORITY WITH JURISDICTION OVER MONEY CENTER BANKS GENERALLY
SHALL PROHIBIT, OR REQUEST THAT THE PROPOSED ISSUER OF SUCH LETTER OF CREDIT
ACCOMMODATION REFRAIN FROM, THE ISSUANCE OF LETTERS OF CREDIT GENERALLY OR THE
ISSUANCE OF SUCH LETTERS OF CREDIT ACCOMMODATION; AND (III) THE EXCESS
AVAILABILITY, PRIOR TO GIVING EFFECT TO THE ISSUANCE OF SUCH LETTER OF CREDIT
ACCOMMODATIONS, SHALL BE EQUAL TO OR GREATER THAN AN AMOUNT EQUAL TO ONE HUNDRED
(100%) PERCENT OF THE FACE AMOUNT THEREOF AND ALL OTHER COMMITMENTS AND
OBLIGATIONS MADE OR INCURRED BY AGENT WITH RESPECT THERETO.

 

(E)           EXCEPT IN AGENT’S DISCRETION, WITH THE CONSENT OF ALL LENDERS, THE
AMOUNT OF ALL OUTSTANDING LETTER OF CREDIT ACCOMMODATIONS AND ALL OTHER
COMMITMENTS AND OBLIGATIONS MADE OR INCURRED BY AGENT OR ANY LENDER IN
CONNECTION THEREWITH SHALL NOT AT ANY TIME EXCEED SEVENTY-FIVE (75%) PERCENT OF
THE MAXIMUM CREDIT.

 

(F)            BORROWERS AND GUARANTORS SHALL INDEMNIFY AND HOLD AGENT AND
LENDERS HARMLESS FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES,
LIABILITIES, COSTS AND EXPENSES WHICH AGENT OR ANY LENDER MAY SUFFER OR INCUR IN
CONNECTION WITH ANY LETTER OF CREDIT ACCOMMODATION AND ANY DOCUMENTS, DRAFTS OR
ACCEPTANCES RELATING THERETO, INCLUDING ANY LOSSES, CLAIMS, DAMAGES,
LIABILITIES, COSTS AND EXPENSES DUE TO ANY ACTION TAKEN BY ANY ISSUER OR
CORRESPONDENT WITH RESPECT TO ANY LETTER OF CREDIT ACCOMMODATION, EXCEPT FOR
SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES, COSTS OR EXPENSES THAT ARE A DIRECT
RESULT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF AGENT OR ANY LENDER AS
DETERMINED PURSUANT TO A FINAL NON-APPEALABLE ORDER OF A COURT OF COMPETENT
JURISDICTION. EACH BORROWER AND GUARANTOR ASSUMES ALL RISKS WITH RESPECT TO THE
ACTS OR OMISSIONS OF THE DRAWER UNDER OR BENEFICIARY OF ANY LETTER OF CREDIT
ACCOMMODATION AND FOR SUCH PURPOSES THE DRAWER OR BENEFICIARY SHALL BE DEEMED
SUCH BORROWER’S AGENT. EACH BORROWER AND GUARANTOR ASSUMES ALL RISKS FOR, AND
AGREES TO PAY, ALL FOREIGN, FEDERAL, STATE AND LOCAL TAXES, DUTIES AND LEVIES
RELATING TO ANY GOODS SUBJECT TO ANY LETTER OF CREDIT ACCOMMODATION OR ANY
DOCUMENTS, DRAFTS OR ACCEPTANCES THEREUNDER. EACH BORROWER AND GUARANTOR HEREBY
RELEASES AND HOLDS AGENT AND LENDERS HARMLESS FROM AND AGAINST ANY ACTS,
WAIVERS, ERRORS, DELAYS OR OMISSIONS, WHETHER CAUSED BY ANY BORROWER, GUARANTOR,
BY ANY ISSUER OR CORRESPONDENT OR OTHERWISE WITH RESPECT TO OR RELATING TO ANY
LETTER OF CREDIT ACCOMMODATION, EXCEPT FOR THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF AGENT OR ANY LENDER AS DETERMINED PURSUANT TO A FINAL,
NON-APPEALABLE ORDER OF A COURT OF COMPETENT JURISDICTION. THE PROVISIONS OF
THIS SECTION 2.2(F) SHALL SURVIVE THE PAYMENT OF OBLIGATIONS AND THE TERMINATION
OF THIS AGREEMENT.

 

(G)           IN CONNECTION WITH INVENTORY PURCHASED PURSUANT TO LETTER OF
CREDIT ACCOMMODATIONS, BORROWERS AND GUARANTORS SHALL, AT AGENT’S REQUEST,
INSTRUCT ALL SUPPLIERS, CARRIERS, FORWARDERS, CUSTOMS BROKERS, WAREHOUSES OR
OTHERS RECEIVING OR HOLDING CASH, CHECKS, DOCUMENTS OR INSTRUMENTS IN WHICH
AGENT HOLDS A SECURITY INTEREST TO DELIVER THEM, UPON AGENT’S PRIOR WRITTEN
REQUEST, TO AGENT AND/OR SUBJECT TO AGENT’S ORDER, AND IF THEY SHALL COME INTO
SUCH BORROWER’S OR GUARANTOR’S POSSESSION, TO DELIVER THEM, UPON AGENT’S PRIOR
WRITTEN REQUEST, TO AGENT IN THEIR ORIGINAL FORM. AGENT SHALL NOT EXERCISE SUCH
RIGHT TO REQUEST SUCH ITEMS SO LONG AS NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING. EXCEPT AS AGENT MAY OTHERWISE SPECIFY, BORROWERS AND
GUARANTORS SHALL ALSO, AT AGENT’S REQUEST, DESIGNATE AGENT AS THE CONSIGNEE ON
ALL BILLS OF LADING AND OTHER NEGOTIABLE AND NON-NEGOTIABLE DOCUMENTS UNDER ANY
LETTER OF CREDIT ACCOMMODATION.

 

(H)           EACH BORROWER AND GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND
DIRECTS ANY ISSUER OF A LETTER OF CREDIT ACCOMMODATION TO NAME SUCH BORROWER OR
GUARANTOR AS THE

 

39

--------------------------------------------------------------------------------

 

ACCOUNT PARTY THEREIN AND TO DELIVER TO AGENT ALL INSTRUMENTS, DOCUMENTS AND
OTHER WRITINGS AND PROPERTY RECEIVED BY ISSUER PURSUANT TO THE LETTER OF CREDIT
ACCOMMODATIONS AND TO ACCEPT AND RELY UPON AGENT’S INSTRUCTIONS AND AGREEMENTS
WITH RESPECT TO ALL MATTERS ARISING IN CONNECTION WITH THE LETTER OF CREDIT
ACCOMMODATIONS OR THE APPLICATIONS THEREFOR. NOTHING CONTAINED HEREIN SHALL BE
DEEMED OR CONSTRUED TO GRANT ANY BORROWER OR GUARANTOR ANY RIGHT OR AUTHORITY TO
PLEDGE THE CREDIT OF AGENT OR ANY LENDER IN ANY MANNER. AGENT AND LENDERS SHALL
HAVE NO LIABILITY OF ANY KIND WITH RESPECT TO ANY LETTER OF CREDIT ACCOMMODATION
PROVIDED BY AN ISSUER OTHER THAN AGENT OR ANY LENDER UNLESS AGENT HAS DULY
EXECUTED AND DELIVERED TO SUCH ISSUER THE APPLICATION OR A GUARANTEE OR
INDEMNIFICATION IN WRITING WITH RESPECT TO SUCH LETTER OF CREDIT ACCOMMODATION.
BORROWERS AND GUARANTORS SHALL BE BOUND BY ANY REASONABLE INTERPRETATION MADE IN
GOOD FAITH BY AGENT, OR ANY OTHER ISSUER OR CORRESPONDENT UNDER OR IN CONNECTION
WITH ANY LETTER OF CREDIT ACCOMMODATION OR ANY DOCUMENTS, DRAFTS OR ACCEPTANCES
THEREUNDER, NOTWITHSTANDING THAT SUCH INTERPRETATION MAY BE INCONSISTENT WITH
ANY INSTRUCTIONS OF ANY BORROWER OR GUARANTOR.

 

(I)            ANY RIGHTS, REMEDIES, DUTIES OR OBLIGATIONS GRANTED OR UNDERTAKEN
BY ANY BORROWER OR GUARANTOR TO ANY ISSUER OR CORRESPONDENT IN ANY APPLICATION
FOR ANY LETTER OF CREDIT ACCOMMODATION, OR ANY OTHER AGREEMENT IN FAVOR OF ANY
ISSUER OR CORRESPONDENT RELATING TO ANY LETTER OF CREDIT ACCOMMODATION, SHALL BE
DEEMED TO HAVE BEEN GRANTED OR UNDERTAKEN BY SUCH BORROWER OR GUARANTOR TO AGENT
FOR THE RATABLE BENEFIT OF LENDERS. ANY DUTIES OR OBLIGATIONS UNDERTAKEN BY
AGENT TO ANY ISSUER OR CORRESPONDENT IN ANY APPLICATION FOR ANY LETTER OF CREDIT
ACCOMMODATION, OR ANY OTHER AGREEMENT BY AGENT IN FAVOR OF ANY ISSUER OR
CORRESPONDENT TO THE EXTENT RELATING TO ANY LETTER OF CREDIT ACCOMMODATION,
SHALL BE DEEMED TO HAVE BEEN UNDERTAKEN BY BORROWERS AND GUARANTORS TO AGENT FOR
THE RATABLE BENEFIT OF LENDERS AND TO APPLY IN ALL RESPECTS TO BORROWERS AND
GUARANTORS.

 

(J)            IMMEDIATELY UPON THE ISSUANCE OR AMENDMENT OF ANY LETTER OF
CREDIT ACCOMMODATION, EACH LENDER SHALL BE DEEMED TO HAVE IRREVOCABLY AND
UNCONDITIONALLY PURCHASED AND RECEIVED, WITHOUT RECOURSE OR WARRANTY, AN
UNDIVIDED INTEREST AND PARTICIPATION TO THE EXTENT OF SUCH LENDER’S PRO RATA
SHARE OF THE LIABILITY WITH RESPECT TO SUCH LETTER OF CREDIT ACCOMMODATION
(INCLUDING, WITHOUT LIMITATION, ALL OBLIGATIONS WITH RESPECT THERETO).

 

(K)           EACH BORROWER IS IRREVOCABLY AND UNCONDITIONALLY OBLIGATED,
WITHOUT PRESENTMENT, DEMAND OR PROTEST, TO PAY TO AGENT ANY AMOUNTS PAID BY AN
ISSUER OF A LETTER OF CREDIT ACCOMMODATION WITH RESPECT TO SUCH LETTER OF CREDIT
ACCOMMODATION (WHETHER THROUGH THE BORROWING OF LOANS IN ACCORDANCE WITH SECTION
2.2(A) OR OTHERWISE). IN THE EVENT THAT ANY BORROWER FAILS TO PAY AGENT ON THE
DATE OF ANY PAYMENT UNDER A LETTER OF CREDIT ACCOMMODATION IN AN AMOUNT EQUAL TO
THE AMOUNT OF SUCH PAYMENT, AGENT (TO THE EXTENT IT HAS ACTUAL NOTICE THEREOF)
SHALL PROMPTLY NOTIFY EACH LENDER OF THE UNREIMBURSED AMOUNT OF SUCH PAYMENT AND
EACH LENDER AGREES, UPON ONE (1) BUSINESS DAY’S NOTICE, TO FUND TO AGENT THE
PURCHASE OF ITS PARTICIPATION IN SUCH LETTER OF CREDIT ACCOMMODATION IN AN
AMOUNT EQUAL TO ITS PRO RATA SHARE OF THE UNPAID AMOUNT. THE OBLIGATION OF EACH
LENDER TO DELIVER TO AGENT AN AMOUNT EQUAL TO ITS RESPECTIVE PARTICIPATION
PURSUANT TO THE FOREGOING SENTENCE IS ABSOLUTE AND UNCONDITIONAL AND SUCH
REMITTANCE SHALL BE MADE NOTWITHSTANDING THE OCCURRENCE OR CONTINUANCE OF ANY
EVENT OF DEFAULT, THE FAILURE TO SATISFY ANY OTHER CONDITION SET FORTH IN
SECTION 4 OR ANY OTHER EVENT OR CIRCUMSTANCE. IF SUCH AMOUNT IS NOT MADE
AVAILABLE BY A LENDER WHEN DUE, AGENT SHALL BE ENTITLED TO RECOVER SUCH AMOUNT
ON DEMAND FROM SUCH LENDER WITH INTEREST THEREON, FOR EACH DAY FROM THE DATE
SUCH AMOUNT WAS DUE UNTIL THE DATE SUCH AMOUNT IS PAID TO AGENT AT THE INTEREST
RATE

 

40

--------------------------------------------------------------------------------

 

THEN PAYABLE BY ANY BORROWER IN RESPECT OF LOANS THAT ARE PRIME RATE LOANS AS
SET FORTH IN SECTION 3.1(A) HEREOF.

 

2.3         Increase in Maximum Credit.

 

(A)           ADMINISTRATIVE BORROWER MAY, AT ANY TIME, DELIVER A WRITTEN
REQUEST TO AGENT TO INCREASE THE MAXIMUM CREDIT. ANY SUCH WRITTEN REQUEST SHALL
SPECIFY THE AMOUNT OF THE REQUESTED INCREASE IN THE MAXIMUM CREDIT THAT
ADMINISTRATIVE BORROWER IS REQUESTING, PROVIDED, THAT, (I) IN NO EVENT SHALL THE
AGGREGATE AMOUNT OF ANY INCREASE IN THE MAXIMUM CREDIT CAUSE THE MAXIMUM CREDIT
TO EXCEED $200,000,000, (II) ANY SUCH REQUEST FOR AN INCREASE SHALL BE FOR AN
INCREASE OF NOT LESS THAN $10,000,000, (III) ANY SUCH REQUEST SHALL BE
IRREVOCABLE, AND (IV) IN NO EVENT SHALL MORE THAN TWO SUCH WRITTEN REQUESTS BE
DELIVERED TO AGENT IN ANY CALENDAR YEAR.

 

(B)           UPON THE RECEIPT BY AGENT OF A WRITTEN REQUEST TO INCREASE THE
MAXIMUM CREDIT, AGENT SHALL NOTIFY EACH OF THE LENDERS OF SUCH REQUEST AND EACH
LENDER SHALL HAVE THE OPTION (BUT NOT THE OBLIGATION) TO INCREASE THE AMOUNT OF
ITS COMMITMENT BY AN AMOUNT UP TO ITS PRO RATA SHARE OF THE AMOUNT OF THE
INCREASE IN THE MAXIMUM CREDIT REQUESTED BY ADMINISTRATIVE BORROWER AS SET FORTH
IN THE NOTICE FROM AGENT TO SUCH LENDER. EACH LENDER SHALL NOTIFY AGENT WITHIN
THIRTY (30) DAYS AFTER THE RECEIPT OF SUCH NOTICE OF A REQUEST FOR SUCH INCREASE
FROM AGENT WHETHER IT IS WILLING TO SO INCREASE ITS COMMITMENT, AND IF SO, THE
AMOUNT OF SUCH INCREASE; PROVIDED, THAT, NO LENDER SHALL BE OBLIGATED TO PROVIDE
SUCH INCREASE IN ITS COMMITMENT AND THE DETERMINATION TO INCREASE THE COMMITMENT
OF A LENDER SHALL BE WITHIN THE SOLE AND ABSOLUTE DISCRETION OF SUCH LENDER. IF
THE AGGREGATE AMOUNT OF THE INCREASES IN THE COMMITMENTS RECEIVED FROM THE
LENDERS DOES NOT EQUAL OR EXCEED THE AMOUNT OF THE INCREASE IN THE MAXIMUM
CREDIT REQUESTED BY ADMINISTRATIVE BORROWER, AGENT MAY SEEK ADDITIONAL INCREASES
FROM LENDERS OR COMMITMENTS FROM SUCH ELIGIBLE TRANSFEREES AS IT MAY DETERMINE,
AFTER CONSULTATION WITH ADMINISTRATIVE BORROWER. IN THE EVENT LENDERS (OR
LENDERS AND ANY SUCH ELIGIBLE TRANSFEREES, AS THE CASE MAY BE) HAVE COMMITTED IN
WRITING TO PROVIDE INCREASES IN THEIR COMMITMENTS OR NEW COMMITMENTS IN AN
AGGREGATE AMOUNT IN EXCESS OF THE INCREASE IN THE MAXIMUM CREDIT REQUESTED BY
BORROWERS OR PERMITTED HEREUNDER, AGENT SHALL THEN HAVE THE RIGHT TO ALLOCATE
SUCH COMMITMENTS, FIRST TO LENDERS AND THEN TO ELIGIBLE TRANSFEREES, IN SUCH
AMOUNTS AND MANNER AS AGENT MAY DETERMINE, AFTER CONSULTATION WITH
ADMINISTRATIVE BORROWER.

 

(C)           IN THE EVENT OF A REQUEST TO INCREASE THE MAXIMUM CREDIT, THE
MAXIMUM CREDIT SHALL BE INCREASED BY THE AMOUNT OF THE INCREASE IN COMMITMENTS
FROM LENDERS OR NEW COMMITMENTS FROM ELIGIBLE TRANSFEREES, IN EACH CASE SELECTED
IN ACCORDANCE WITH SECTION 2.3(B), FOR WHICH AGENT HAS RECEIVED ASSIGNMENT AND
ACCEPTANCES (OR OTHER AGREEMENTS ACCEPTABLE TO AGENT) SIXTY (60) DAYS AFTER THE
DATE OF THE REQUEST BY ADMINISTRATIVE BORROWER FOR THE INCREASE OR SUCH EARLIER
DATE AS AGENT AND ADMINISTRATIVE BORROWER MAY AGREE (BUT SUBJECT TO THE
SATISFACTION OF THE CONDITIONS SET FORTH BELOW), WHETHER OR NOT THE AGGREGATE
AMOUNT OF THE INCREASE IN COMMITMENTS AND NEW COMMITMENTS, AS THE CASE MAY BE,
EQUAL OR EXCEED THE AMOUNT OF THE INCREASE IN THE MAXIMUM CREDIT REQUESTED BY
ADMINISTRATIVE BORROWER IN ACCORDANCE WITH THE TERMS HEREOF, EFFECTIVE ON THE
DATE THAT EACH OF THE FOLLOWING CONDITIONS HAVE BEEN SATISFIED:

 

(I)            AGENT SHALL HAVE RECEIVED FROM EACH LENDER OR ELIGIBLE TRANSFEREE
THAT IS PROVIDING AN ADDITIONAL COMMITMENT AS PART OF THE INCREASE IN THE
MAXIMUM CREDIT, AN ASSIGNMENT AND ACCEPTANCE (OR ANOTHER AGREEMENT ACCEPTABLE TO
AGENT) DULY EXECUTED BY SUCH LENDER OR ELIGIBLE TRANSFEREE AND ADMINISTRATIVE
BORROWER;

 

41

--------------------------------------------------------------------------------

 

(II)           THE CONDITIONS PRECEDENT TO THE MAKING OF REVOLVING LOANS SET
FORTH IN SECTION 4.2 HEREOF SHALL BE SATISFIED AS OF THE DATE OF THE INCREASE IN
THE MAXIMUM CREDIT, BOTH BEFORE AND AFTER GIVING EFFECT TO SUCH INCREASE;

 

(III)          AGENT SHALL HAVE RECEIVED SUCH AGREEMENTS, DOCUMENTS AND
INSTRUMENTS (INCLUDING LEGAL OPINIONS) AS AGENT MAY REQUEST, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO AGENT;

 

(IV)          SUCH INCREASE IN THE MAXIMUM CREDIT ON THE DATE OF THE
EFFECTIVENESS THEREOF SHALL NOT VIOLATE ANY APPLICABLE LAW, REGULATION OR ORDER
OR DECREE OF ANY COURT OR OTHER GOVERNMENTAL AUTHORITY AND SHALL NOT BE
ENJOINED, TEMPORARILY, PRELIMINARILY OR PERMANENTLY;

 

(V)           THERE SHALL HAVE BEEN PAID TO EACH LENDER AND ELIGIBLE TRANSFEREE
PROVIDING AN ADDITIONAL COMMITMENT IN CONNECTION WITH SUCH INCREASE IN THE
MAXIMUM CREDIT ALL FEES (INCLUDING ANY ADDITIONAL COMMITMENT FEES) DUE AND
PAYABLE TO SUCH PERSON ON OR BEFORE THE EFFECTIVENESS OF SUCH INCREASE; AND

 

(VI)          THERE SHALL HAVE BEEN PAID TO AGENT ALL COSTS AND EXPENSES
(INCLUDING REASONABLE FEES AND EXPENSES OF COUNSEL) DUE AND PAYABLE TO AGENT
PURSUANT TO ANY OF THE FINANCING AGREEMENTS ON OR BEFORE THE EFFECTIVENESS OF
SUCH INCREASE.

 

(D)           AS OF THE EFFECTIVE DATE OF ANY SUCH INCREASE IN THE MAXIMUM
CREDIT, EACH REFERENCE TO THE TERM MAXIMUM CREDIT AND COMMITMENTS HEREIN AND IN
ANY OF THE OTHER FINANCING AGREEMENTS SHALL BE DEEMED AMENDED TO MEAN THE AMOUNT
OF THE MAXIMUM CREDIT AND COMMITMENTS SPECIFIED IN THE MOST RECENT WRITTEN
NOTICE FROM AGENT TO ADMINISTRATIVE BORROWER OF THE INCREASE IN THE MAXIMUM
CREDIT AND COMMITMENTS.

 

2.4         Decrease in Maximum Credit.

 

(A)           ADMINISTRATIVE BORROWER MAY, AT ANY TIME, DELIVER A WRITTEN
REQUEST TO AGENT TO DECREASE THE MAXIMUM CREDIT. ANY SUCH WRITTEN REQUEST SHALL
SPECIFY THE AMOUNT OF THE DECREASE IN THE MAXIMUM CREDIT THAT ADMINISTRATIVE
BORROWER IS REQUESTING AND THE EFFECTIVE DATE OF SUCH DECREASE (WHICH DATE SHALL
NOT BE LESS THAN FIVE (5) NOR MORE THAN TEN (10) BUSINESS DAYS AFTER THE DATE OF
SUCH REQUEST); PROVIDED, THAT, (I) ANY SUCH REQUEST FOR A DECREASE SHALL BE FOR
AN AMOUNT OF NOT LESS THAN $10,000,000, (II) ANY SUCH REQUEST SHALL BE
IRREVOCABLE, AND (III) IN NO EVENT SHALL MORE THAN ONE SUCH WRITTEN REQUEST FOR
A DECREASE BE DELIVERED TO AGENT IN ANY CALENDAR YEAR.

 

(B)           UPON THE RECEIPT BY AGENT OF A WRITTEN REQUEST TO DECREASE THE
MAXIMUM CREDIT, AGENT SHALL NOTIFY EACH OF THE LENDERS OF SUCH REQUEST AND,
SUBJECT TO THE TERMS OF SECTION 2.3(C) HEREOF, THE COMMITMENT OF EACH LENDER
SHALL BE DECREASED ON THE DATE REQUESTED BY ADMINISTRATIVE BORROWER BY AN AMOUNT
EQUAL TO SUCH LENDER’S PRO RATA SHARE OF THE AMOUNT OF THE DECREASE IN THE
MAXIMUM CREDIT REQUESTED BY ADMINISTRATIVE BORROWER AS SET FORTH IN THE NOTICE
FROM AGENT TO SUCH LENDER.

 

(C)           IN THE EVENT OF A REQUEST TO DECREASE THE MAXIMUM CREDIT, THE
MAXIMUM CREDIT SHALL BE DECREASED BY THE AMOUNT OF THE DECREASE IN MAXIMUM
CREDIT REQUESTED BY ADMINISTRATIVE BORROWER IN ACCORDANCE WITH THE TERMS HEREOF;
PROVIDED, THAT, AFTER GIVING EFFECT

 

42

--------------------------------------------------------------------------------

 

TO SUCH DECREASE, THE MAXIMUM CREDIT SHALL NOT BE LESS THAN THE AGGREGATE AMOUNT
OF THE LOANS AND LETTER OF CREDIT ACCOMMODATIONS OUTSTANDING AT SUCH TIME.

 

(D)           AS OF THE EFFECTIVE DATE OF ANY SUCH DECREASE IN THE MAXIMUM
CREDIT, EACH REFERENCE TO THE TERM MAXIMUM CREDIT AND COMMITMENTS HEREIN AND IN
ANY OF THE OTHER FINANCING AGREEMENTS SHALL BE DEEMED AMENDED TO MEAN THE AMOUNT
OF THE MAXIMUM CREDIT AND COMMITMENTS SPECIFIED IN THE MOST RECENT WRITTEN
NOTICE FROM AGENT TO ADMINISTRATIVE BORROWER OF THE DECREASE IN THE MAXIMUM
CREDIT AND COMMITMENTS.

 

2.5           Commitments.  The aggregate amount of each Lender’s Pro Rata Share
of the Loans and Letter of Credit Accommodations shall not exceed the amount of
such Lender’s Commitment, as the same may from time to time be amended in
accordance with the provisions hereof.

 

SECTION 3.           INTEREST AND FEES; PROCEDURES FOR BORROWING

 

3.1         Interest; Procedures for Borrowing.

 

(A)           BORROWERS SHALL PAY TO AGENT, FOR THE BENEFIT OF LENDERS, INTEREST
ON THE OUTSTANDING PRINCIPAL AMOUNT OF THE LOANS AT THE INTEREST RATE. ALL
INTEREST ACCRUING HEREUNDER UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF
ANY EVENT OF DEFAULT OR AFTER THE TERMINATION HEREOF SHALL BE PAYABLE ON DEMAND.

 

(B)           EACH BORROWER (OR ADMINISTRATIVE BORROWER ON BEHALF OF SUCH
BORROWER) MAY FROM TIME TO TIME REQUEST PRIME RATE LOANS. SUBJECT TO THE TERMS
AND CONDITIONS CONTAINED HEREIN, IF AGENT RECEIVES SUCH A REQUEST ON ANY
BUSINESS DAY, THE PRIME RATE LOAN REQUESTED IN SUCH REQUEST SHALL BE MADE ON
SUCH BUSINESS DAY; PROVIDED, THAT, IF AGENT RECEIVES SUCH A REQUEST AFTER 12:00
NOON CHICAGO, ILLINOIS TIME ON ANY BUSINESS DAY, THE PRIME RATE LOAN REQUESTED
IN SUCH REQUEST SHALL BE MADE NOT LATER THAN THE NEXT SUCCEEDING BUSINESS DAY.
EACH BORROWER (OR ADMINISTRATIVE BORROWER ON BEHALF OF SUCH BORROWER) MAY FROM
TIME TO TIME REQUEST EURODOLLAR RATE LOANS OR MAY REQUEST THAT PRIME RATE LOANS
BE CONVERTED TO EURODOLLAR RATE LOANS OR THAT ANY EXISTING EURODOLLAR RATE LOANS
CONTINUE FOR AN ADDITIONAL INTEREST PERIOD. SUCH REQUEST FROM A BORROWER (OR
ADMINISTRATIVE BORROWER ON BEHALF OF SUCH BORROWER) SHALL SPECIFY THE AMOUNT OF
THE EURODOLLAR RATE LOANS OR THE AMOUNT OF THE PRIME RATE LOANS TO BE CONVERTED
TO EURODOLLAR RATE LOANS OR THE AMOUNT OF THE EURODOLLAR RATE LOANS TO BE
CONTINUED (SUBJECT TO THE LIMITS SET FORTH BELOW) AND THE INTEREST PERIOD TO BE
APPLICABLE TO SUCH EURODOLLAR RATE LOANS. SUBJECT TO THE TERMS AND CONDITIONS
CONTAINED HEREIN, THREE (3) BUSINESS DAYS AFTER RECEIPT BY AGENT OF SUCH A
REQUEST (OR DEEMED REQUEST) FROM A BORROWER (OR ADMINISTRATIVE BORROWER ON
BEHALF OF SUCH BORROWER), SUCH EURODOLLAR RATE LOANS SHALL BE MADE OR PRIME RATE
LOANS SHALL BE CONVERTED TO EURODOLLAR RATE LOANS OR SUCH EURODOLLAR RATE LOANS
SHALL CONTINUE, AS THE CASE MAY BE, PROVIDED, THAT, (I) NO DEFAULT OR EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, (II) SUCH BORROWER (OR
ADMINISTRATIVE BORROWER ON BEHALF OF SUCH BORROWER) SHALL HAVE COMPLIED WITH
SUCH CUSTOMARY PROCEDURES AS ARE REASONABLY ESTABLISHED BY AGENT AND SPECIFIED
BY AGENT TO ADMINISTRATIVE BORROWER FROM TIME TO TIME FOR REQUESTS BY BORROWERS
FOR EURODOLLAR RATE LOANS, (III) NO MORE THAN SIX (6) INTEREST PERIODS MAY BE IN
EFFECT AT ANY ONE TIME, (IV) THE AGGREGATE AMOUNT OF THE EURODOLLAR RATE LOANS
MUST BE IN AN AMOUNT NOT LESS THAN $1,000,000 OR AN INTEGRAL MULTIPLE OF
$1,000,000 IN EXCESS THEREOF, AND (V) AGENT SHALL HAVE DETERMINED THAT THE
INTEREST PERIOD OR ADJUSTED EURODOLLAR RATE IS AVAILABLE AND CAN BE READILY
DETERMINED AS OF THE DATE OF THE REQUEST FOR SUCH EURODOLLAR RATE LOAN BY SUCH
BORROWER. ANY

 

43

--------------------------------------------------------------------------------

 

REQUEST (OR DEEMED REQUEST) BY OR ON BEHALF OF A BORROWER FOR EURODOLLAR RATE
LOANS OR TO CONVERT PRIME RATE LOANS TO EURODOLLAR RATE LOANS OR TO CONTINUE ANY
EXISTING EURODOLLAR RATE LOANS SHALL BE IRREVOCABLE. NOTWITHSTANDING ANYTHING TO
THE CONTRARY CONTAINED HEREIN, AGENT AND LENDERS SHALL NOT BE REQUIRED TO
PURCHASE UNITED STATES DOLLAR DEPOSITS IN THE LONDON INTERBANK MARKET OR OTHER
APPLICABLE EURODOLLAR RATE MARKET TO FUND ANY EURODOLLAR RATE LOANS, BUT THE
PROVISIONS HEREOF SHALL BE DEEMED TO APPLY AS IF AGENT AND LENDERS HAD PURCHASED
SUCH DEPOSITS TO FUND THE EURODOLLAR RATE LOANS.

 

(C)           UNLESS AGENT HAS RECEIVED A REQUEST TO THE CONTRARY FROM A
BORROWER (OR ADMINISTRATIVE BORROWER ON BEHALF OF SUCH BORROWER) AT LEAST THREE
(3) BUSINESS DAYS PRIOR TO THE LAST DAY OF THE INTEREST PERIOD FOR ANY
EURODOLLAR RATE LOAN, ADMINISTRATIVE BORROWER SHALL, AUTOMATICALLY AND WITHOUT
ANY FURTHER ACTION, BE DEEMED TO HAVE REQUESTED THAT THE ENTIRE AMOUNT OF SUCH
EURODOLLAR RATE LOAN BE CONTINUED AS A NEW EURODOLLAR RATE LOAN HAVING AN
INTEREST PERIOD OF ONE (1) MONTH; PROVIDED, THAT, IF THE CONDITIONS CONTAINED IN
SECTION 3.1(B) HEREOF WITH RESPECT TO THE CONTINUATION OF SUCH EURODOLLAR RATE
LOAN ARE NOT SATISFIED, THEN SUCH EURODOLLAR RATE LOAN SHALL AUTOMATICALLY
CONVERT TO PRIME RATE LOANS UPON THE LAST DAY OF THE APPLICABLE INTEREST PERIOD.
ANY EURODOLLAR RATE LOANS SHALL, AT AGENT’S OPTION, UPON NOTICE BY AGENT TO
PARENT, BE SUBSEQUENTLY CONVERTED TO PRIME RATE LOANS IN THE EVENT THAT THIS
AGREEMENT SHALL TERMINATE OR NOT BE RENEWED. BORROWERS SHALL PAY TO AGENT, FOR
THE BENEFIT OF LENDERS, UPON DEMAND BY AGENT (OR AGENT MAY, AT ITS OPTION,
CHARGE ANY LOAN ACCOUNT OF ANY BORROWER) ANY AMOUNTS REQUIRED TO COMPENSATE ANY
LENDER OR PARTICIPANT FOR ANY LOSS (INCLUDING LOSS OF ANTICIPATED PROFITS), COST
OR EXPENSE INCURRED BY SUCH PERSON, AS A RESULT OF THE CONVERSION OF EURODOLLAR
RATE LOANS TO PRIME RATE LOANS PURSUANT TO ANY OF THE FOREGOING.

 

(D)           INTEREST SHALL BE PAYABLE BY BORROWERS TO AGENT, FOR THE ACCOUNT
OF LENDERS, MONTHLY IN ARREARS NOT LATER THAN THE FIRST DAY OF EACH CALENDAR
MONTH AND SHALL BE CALCULATED ON THE BASIS OF A THREE HUNDRED SIXTY (360) DAY
YEAR (OR, IN THE CASE OF PRIME RATE LOANS, A 365 OR 366 DAY YEAR, AS THE CASE
MAY BE) AND ACTUAL DAYS ELAPSED. THE INTEREST RATE ON NON-CONTINGENT OBLIGATIONS
(OTHER THAN EURODOLLAR RATE LOANS) SHALL INCREASE OR DECREASE BY AN AMOUNT EQUAL
TO EACH INCREASE OR DECREASE IN THE PRIME RATE EFFECTIVE ON THE DAY OF ANY
CHANGE IN SUCH PRIME RATE IS ANNOUNCED. IN NO EVENT SHALL CHARGES CONSTITUTING
INTEREST PAYABLE BY BORROWERS TO AGENT AND LENDERS EXCEED THE MAXIMUM AMOUNT OR
THE RATE PERMITTED UNDER ANY APPLICABLE LAW OR REGULATION, AND IF ANY SUCH PART
OR PROVISION OF THIS AGREEMENT IS IN CONTRAVENTION OF ANY SUCH LAW OR
REGULATION, SUCH PART OR PROVISION SHALL BE DEEMED AMENDED TO CONFORM THERETO.

 

3.2         Fees.

 

(A)           BORROWERS SHALL PAY TO AGENT, FOR THE ACCOUNT OF LENDERS, MONTHLY
AN UNUSED LINE FEE AT A RATE EQUAL TO ONE-QUARTER (.25%) PERCENT PER ANNUM
CALCULATED UPON THE AMOUNT BY WHICH THE MAXIMUM CREDIT EXCEEDS THE AVERAGE DAILY
PRINCIPAL BALANCE OF THE OUTSTANDING REVOLVING LOANS AND LETTER OF CREDIT
ACCOMMODATIONS DURING THE IMMEDIATELY PRECEDING MONTH (OR PART THEREOF) WHILE
THIS AGREEMENT IS IN EFFECT AND FOR SO LONG THEREAFTER AS ANY OF THE OBLIGATIONS
ARE OUTSTANDING, WHICH FEE SHALL BE PAYABLE ON THE FIRST DAY OF EACH MONTH IN
ARREARS.

 

(B)           BORROWERS AGREE TO PAY TO AGENT THE OTHER FEES AND AMOUNTS SET
FORTH IN THE FEE LETTER IN THE AMOUNTS AND AT THE TIMES SPECIFIED THEREIN.

 

44

--------------------------------------------------------------------------------

 

3.3         Changes in Laws and Increased Costs of Loans.

 

(A)           IF AFTER THE DATE HEREOF, EITHER (I) ANY CHANGE IN, OR IN THE
INTERPRETATION OF, ANY LAW OR REGULATION IS INTRODUCED, INCLUDING, WITHOUT
LIMITATION, WITH RESPECT TO RESERVE REQUIREMENTS (OTHER THAN RESERVE
REQUIREMENTS TO THE EXTENT REFLECTED IN THE ADJUSTED EURODOLLAR RATE AS
DETERMINED BY AGENT IN GOOD FAITH), APPLICABLE TO LENDER OR ANY BANKING OR
FINANCIAL INSTITUTION FROM WHOM ANY LENDER BORROWS FUNDS OR OBTAINS CREDIT (A
“FUNDING BANK”), OR (II) A FUNDING BANK OR ANY LENDER COMPLIES WITH ANY FUTURE
GUIDELINE OR REQUEST FROM ANY CENTRAL BANK OR OTHER GOVERNMENTAL AUTHORITY OR
(III) A FUNDING BANK OR ANY LENDER DETERMINES THAT THE ADOPTION AFTER THE DATE
HEREOF OF ANY APPLICABLE LAW, RULE OR REGULATION REGARDING CAPITAL ADEQUACY, OR
ANY CHANGE THEREIN, OR ANY CHANGE IN THE INTERPRETATION OR ADMINISTRATION
THEREOF BY ANY GOVERNMENTAL AUTHORITY, CENTRAL BANK OR COMPARABLE AGENCY CHARGED
WITH THE INTERPRETATION OR ADMINISTRATION THEREOF HAS OR WOULD HAVE THE EFFECT
DESCRIBED BELOW, OR A FUNDING BANK OR ANY LENDER COMPLIES WITH ANY REQUEST OR
DIRECTIVE REGARDING CAPITAL ADEQUACY (WHETHER OR NOT HAVING THE FORCE OF LAW) OF
ANY SUCH AUTHORITY, CENTRAL BANK OR COMPARABLE AGENCY, AND IN THE CASE OF ANY
EVENT SET FORTH IN THIS CLAUSE (III), SUCH ADOPTION, CHANGE OR COMPLIANCE HAS OR
WOULD HAVE THE DIRECT OR INDIRECT EFFECT OF REDUCING THE RATE OF RETURN ON ANY
LENDER’S CAPITAL AS A CONSEQUENCE OF ITS OBLIGATIONS HEREUNDER TO A LEVEL BELOW
THAT WHICH LENDER COULD HAVE ACHIEVED BUT FOR SUCH ADOPTION, CHANGE OR
COMPLIANCE (TAKING INTO CONSIDERATION THE FUNDING BANK’S OR LENDER’S POLICIES
WITH RESPECT TO CAPITAL ADEQUACY) BY AN AMOUNT DEEMED BY SUCH LENDER TO BE
MATERIAL, AND THE RESULT OF ANY OF THE FOREGOING EVENTS DESCRIBED IN CLAUSES
(I), (II) OR (III) IS OR RESULTS IN AN INCREASE IN THE COST TO ANY LENDER OF
FUNDING OR MAINTAINING THE LOANS, THE LETTER OF CREDIT ACCOMMODATIONS OR ITS
COMMITMENT, THEN BORROWERS AND GUARANTORS SHALL FROM TIME TO TIME, NO LATER THAN
TEN (10) BUSINESS DAYS FOLLOWING DEMAND BY AGENT, PAY TO AGENT ADDITIONAL
AMOUNTS SUFFICIENT TO INDEMNIFY LENDERS AGAINST SUCH INCREASED COST ON AN
AFTER-TAX BASIS (AFTER TAKING INTO ACCOUNT APPLICABLE DEDUCTIONS AND CREDITS IN
RESPECT OF THE AMOUNT INDEMNIFIED). A CERTIFICATE AS TO THE AMOUNT OF SUCH
INCREASED COST SHALL BE SUBMITTED TO ADMINISTRATIVE BORROWER BY AGENT AND SHALL
BE CONCLUSIVE, ABSENT MANIFEST ERROR. FAILURE OR DELAY ON THE PART OF AGENT TO
DEMAND COMPENSATION PURSUANT TO THIS SECTION 3.1(A) SHALL NOT CONSTITUTE A
WAIVER OF AGENT’S RIGHT TO DEMAND SUCH COMPENSATION; PROVIDED, THAT, BORROWERS
AND GUARANTORS SHALL NOT BE REQUIRED TO COMPENSATE A LENDER PURSUANT TO THIS
SECTION 3.1(A) FOR ANY INCREASED COSTS INCURRED MORE THAN NINE MONTHS PRIOR TO
THE DATE AGENT NOTIFIES ADMINISTRATIVE BORROWER OF SUCH INCREASED COSTS (EXCEPT,
THAT, IF THE CHANGE IN LAW OR OTHER EVENT GIVING RISE TO SUCH INCREASED COSTS IS
RETROACTIVE, THEN THE NINE-MONTH PERIOD REFERRED TO ABOVE SHALL BE EXTENDED TO
INCLUDE THE PERIOD OF RETROACTIVE EFFECT THEREOF).

 

(B)           IF PRIOR TO THE FIRST DAY OF ANY INTEREST PERIOD, (I) AGENT SHALL
HAVE DETERMINED IN GOOD FAITH (WHICH DETERMINATION SHALL BE CONCLUSIVE AND
BINDING UPON BORROWERS AND GUARANTORS) THAT, BY REASON OF CIRCUMSTANCES
AFFECTING THE RELEVANT MARKET, ADEQUATE AND REASONABLE MEANS DO NOT EXIST FOR
ASCERTAINING THE ADJUSTED EURODOLLAR RATE FOR SUCH INTEREST PERIOD, (II) AGENT
HAS RECEIVED NOTICE FROM THE REQUIRED LENDERS THAT ADJUSTED EURODOLLAR RATE
DETERMINED OR TO BE DETERMINED FOR SUCH INTEREST PERIOD WILL NOT ADEQUATELY AND
FAIRLY REFLECT THE COST TO LENDERS OF MAKING OR MAINTAINING EURODOLLAR RATE
LOANS DURING SUCH INTEREST PERIOD, OR (III) DOLLAR DEPOSITS IN THE PRINCIPAL
AMOUNTS OF THE EURODOLLAR RATE LOANS TO WHICH SUCH INTEREST PERIOD IS TO BE
APPLICABLE ARE NOT GENERALLY AVAILABLE IN THE LONDON INTERBANK MARKET, AGENT
SHALL GIVE TELECOPY OR TELEPHONIC NOTICE THEREOF TO ADMINISTRATIVE BORROWER AS
SOON AS PRACTICABLE THEREAFTER, AND WILL ALSO GIVE PROMPT WRITTEN NOTICE TO
ADMINISTRATIVE BORROWER WHEN SUCH CONDITIONS NO LONGER EXIST. IF SUCH NOTICE IS
GIVEN (A) ANY EURODOLLAR RATE LOANS REQUESTED TO BE

 

45

--------------------------------------------------------------------------------

 

MADE ON THE FIRST DAY OF SUCH INTEREST PERIOD SHALL BE MADE AS PRIME RATE LOANS,
(B) ANY LOANS THAT WERE TO HAVE BEEN CONVERTED ON THE FIRST DAY OF SUCH INTEREST
PERIOD TO OR CONTINUED AS EURODOLLAR RATE LOANS SHALL BE CONVERTED TO OR
CONTINUED AS PRIME RATE LOANS AND (C) EACH OUTSTANDING EURODOLLAR RATE LOAN
SHALL BE CONVERTED, ON THE LAST DAY OF THE THEN-CURRENT INTEREST PERIOD THEREOF,
TO PRIME RATE LOANS. UNTIL SUCH NOTICE HAS BEEN WITHDRAWN BY AGENT, NO FURTHER
EURODOLLAR RATE LOANS SHALL BE MADE OR CONTINUED AS SUCH, NOR SHALL ANY BORROWER
(OR ADMINISTRATIVE BORROWER ON BEHALF OF ANY BORROWER) HAVE THE RIGHT TO CONVERT
PRIME RATE LOANS TO EURODOLLAR RATE LOANS.

 

(C)           NOTWITHSTANDING ANY OTHER PROVISION HEREIN, IF THE ADOPTION OF OR
ANY CHANGE IN ANY LAW, TREATY, RULE OR REGULATION OR FINAL, NON-APPEALABLE
DETERMINATION OF AN ARBITRATOR OR A COURT OR OTHER GOVERNMENTAL AUTHORITY OR IN
THE INTERPRETATION OR APPLICATION THEREOF OCCURRING AFTER THE DATE HEREOF SHALL
MAKE IT UNLAWFUL FOR AGENT OR ANY LENDER TO MAKE OR MAINTAIN EURODOLLAR RATE
LOANS AS CONTEMPLATED BY THIS AGREEMENT, (I) AGENT OR SUCH LENDER SHALL PROMPTLY
GIVE WRITTEN NOTICE OF SUCH CIRCUMSTANCES TO ADMINISTRATIVE BORROWER (WHICH
NOTICE SHALL BE WITHDRAWN WHENEVER SUCH CIRCUMSTANCES NO LONGER EXIST), (II) THE
COMMITMENT OF SUCH LENDER HEREUNDER TO MAKE EURODOLLAR RATE LOANS, CONTINUE
EURODOLLAR RATE LOANS AS SUCH AND CONVERT PRIME RATE LOANS TO EURODOLLAR RATE
LOANS SHALL FORTHWITH BE CANCELED AND, UNTIL SUCH TIME AS IT SHALL NO LONGER BE
UNLAWFUL FOR SUCH LENDER TO MAKE OR MAINTAIN EURODOLLAR RATE LOANS, SUCH LENDER
SHALL THEN HAVE A COMMITMENT ONLY TO MAKE A PRIME RATE LOAN WHEN A EURODOLLAR
RATE LOAN IS REQUESTED AND (III) SUCH LENDER’S LOANS THEN OUTSTANDING AS
EURODOLLAR RATE LOANS, IF ANY, SHALL BE CONVERTED AUTOMATICALLY TO PRIME RATE
LOANS ON THE RESPECTIVE LAST DAYS OF THE THEN CURRENT INTEREST PERIODS WITH
RESPECT TO SUCH LOANS OR WITHIN SUCH EARLIER PERIOD AS REQUIRED BY LAW. IF ANY
SUCH CONVERSION OF A EURODOLLAR RATE LOAN OCCURS ON A DAY WHICH IS NOT THE LAST
DAY OF THE THEN CURRENT INTEREST PERIOD WITH RESPECT THERETO, BORROWERS AND
GUARANTORS SHALL PAY TO SUCH LENDER SUCH AMOUNTS, IF ANY, AS MAY BE REQUIRED
PURSUANT TO SECTION 3.3(D) BELOW.

 

(D)           BORROWERS AND GUARANTORS SHALL INDEMNIFY AGENT AND EACH LENDER AND
TO HOLD AGENT AND EACH LENDER HARMLESS FROM ANY LOSS OR EXPENSE WHICH AGENT OR
SUCH LENDER MAY SUSTAIN OR INCUR AS A CONSEQUENCE OF (I) DEFAULT BY BORROWER IN
MAKING A BORROWING OF, CONVERSION INTO OR EXTENSION OF EURODOLLAR RATE LOANS
AFTER SUCH BORROWER (OR ADMINISTRATIVE BORROWER ON BEHALF OF SUCH BORROWER) HAS
GIVEN A NOTICE REQUESTING THE SAME IN ACCORDANCE WITH THE PROVISIONS OF THIS
LOAN AGREEMENT, (II) DEFAULT BY ANY BORROWER IN MAKING ANY PREPAYMENT OF A
EURODOLLAR RATE LOAN AFTER SUCH BORROWER HAS GIVEN A NOTICE THEREOF IN
ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT, AND (III) THE MAKING OF A
PREPAYMENT OF EURODOLLAR RATE LOANS ON A DAY WHICH IS NOT THE LAST DAY OF AN
INTEREST PERIOD WITH RESPECT THERETO. WITH RESPECT TO EURODOLLAR RATE LOANS,
SUCH INDEMNIFICATION MAY INCLUDE AN AMOUNT EQUAL TO THE EXCESS, IF ANY, OF (A)
THE AMOUNT OF INTEREST WHICH WOULD HAVE ACCRUED ON THE AMOUNT SO PREPAID, OR NOT
SO BORROWED, CONVERTED OR EXTENDED, FOR THE PERIOD FROM THE DATE OF SUCH
PREPAYMENT OR OF SUCH FAILURE TO BORROW, CONVERT OR EXTEND TO THE LAST DAY OF
THE APPLICABLE INTEREST PERIOD (OR, IN THE CASE OF A FAILURE TO BORROW, CONVERT
OR EXTEND, THE INTEREST PERIOD THAT WOULD HAVE COMMENCED ON THE DATE OF SUCH
FAILURE) IN EACH CASE AT THE APPLICABLE RATE OF INTEREST FOR SUCH EURODOLLAR
RATE LOANS PROVIDED FOR HEREIN OVER (B) THE AMOUNT OF INTEREST (AS DETERMINED BY
SUCH AGENT OR SUCH LENDER) WHICH WOULD HAVE ACCRUED TO AGENT OR SUCH LENDER ON
SUCH AMOUNT BY PLACING SUCH AMOUNT ON DEPOSIT FOR A COMPARABLE PERIOD WITH
LEADING BANKS IN THE INTERBANK EURODOLLAR MARKET. THIS COVENANT SHALL SURVIVE
THE TERMINATION OR NON-RENEWAL OF THIS LOAN AGREEMENT AND THE PAYMENT OF THE
OBLIGATIONS.

 

46

--------------------------------------------------------------------------------

 

SECTION 4.           CONDITIONS PRECEDENT

 

4.1           Conditions Precedent to Initial Loans and Letter of Credit
Accommodations. Each of the following is a condition precedent to Agent and
Lenders making the initial Loans and providing the initial Letter of Credit
Accommodations hereunder:

 

(A)           AGENT SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO AGENT, ALL RELEASES, TERMINATIONS AND SUCH OTHER DOCUMENTS AS
AGENT MAY REQUEST TO EVIDENCE AND EFFECTUATE THE TERMINATION BY ANY PERSON OF
ANY LIEN OR SECURITY INTEREST IN AND TO ANY ASSETS AND PROPERTIES OF A BORROWER
AND GUARANTOR HELD BY SUCH PERSON (OTHER THAN LIENS AND SECURITY INTERESTS
PERMITTED BY SECTION 9.8 HEREOF), DULY AUTHORIZED, EXECUTED AND DELIVERED BY
SUCH PERSON, INCLUDING, BUT NOT LIMITED TO, (I) UCC TERMINATION STATEMENTS FOR
ALL UCC FINANCING STATEMENTS PREVIOUSLY FILED BY SUCH PERSON, AS SECURED PARTY
AND ANY BORROWER OR GUARANTOR, AS DEBTOR; AND (II) SATISFACTIONS AND DISCHARGES
OF ANY MORTGAGES, DEEDS OF TRUST OR DEEDS TO SECURE DEBT BY ANY BORROWER OR
GUARANTOR IN FAVOR OF SUCH PERSON, IN FORM ACCEPTABLE FOR RECORDING WITH THE
APPROPRIATE GOVERNMENTAL AUTHORITY;

 

(B)           ALL REQUISITE CORPORATE ACTION AND PROCEEDINGS IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER FINANCING AGREEMENTS SHALL BE SATISFACTORY IN FORM
AND SUBSTANCE TO AGENT, AND AGENT SHALL HAVE RECEIVED ALL INFORMATION AND COPIES
OF ALL DOCUMENTS, INCLUDING RECORDS OF REQUISITE CORPORATE ACTION AND
PROCEEDINGS WHICH AGENT MAY HAVE REQUESTED IN CONNECTION THEREWITH, SUCH
DOCUMENTS WHERE REQUESTED BY AGENT OR ITS COUNSEL TO BE CERTIFIED BY APPROPRIATE
CORPORATE OFFICERS OR GOVERNMENTAL AUTHORITY (AND INCLUDING A COPY OF THE
CERTIFICATE OF INCORPORATION OR FORMATION OF EACH BORROWER AND GUARANTOR
CERTIFIED BY THE SECRETARY OF STATE (OR EQUIVALENT GOVERNMENTAL AUTHORITY) WHICH
SHALL SET FORTH THE SAME COMPLETE NAME OF SUCH BORROWER OR GUARANTOR AS IS SET
FORTH HEREIN AND SUCH DOCUMENT AS SHALL SET FORTH THE ORGANIZATIONAL
IDENTIFICATION NUMBER OF EACH BORROWER OR GUARANTOR, IF ONE IS ISSUED IN ITS
JURISDICTION OF INCORPORATION);

 

(C)           NO MATERIAL ADVERSE CHANGE SHALL HAVE OCCURRED IN THE ASSETS OR
BUSINESS OF BORROWERS SINCE THE DATE OF AGENT’S LATEST FIELD EXAMINATION (NOT
INCLUDING FOR THIS PURPOSE THE FIELD REVIEW REFERRED TO IN CLAUSE (D) BELOW) AND
NO CHANGE OR EVENT SHALL HAVE OCCURRED WHICH WOULD IMPAIR THE ABILITY OF ANY
BORROWER OR OBLIGOR TO PERFORM ITS OBLIGATIONS HEREUNDER OR UNDER ANY OF THE
OTHER FINANCING AGREEMENTS TO WHICH IT IS A PARTY OR OF AGENT OR ANY LENDER TO
ENFORCE THE OBLIGATIONS OR REALIZE UPON THE COLLATERAL;

 

(D)           AGENT SHALL HAVE COMPLETED A FIELD REVIEW OF THE RECORDS AND SUCH
OTHER INFORMATION WITH RESPECT TO THE COLLATERAL AS AGENT MAY REQUIRE TO
DETERMINE THE AMOUNT OF LOANS AVAILABLE TO BORROWERS (INCLUDING, WITHOUT
LIMITATION, CURRENT PERPETUAL INVENTORY RECORDS AND/OR ROLL-FORWARDS OF ACCOUNTS
AND INVENTORY THROUGH THE DATE OF CLOSING AND TEST COUNTS OF THE INVENTORY IN A
MANNER SATISFACTORY TO AGENT, TOGETHER WITH SUCH SUPPORTING DOCUMENTATION AS MAY
BE NECESSARY OR APPROPRIATE, AND OTHER DOCUMENTS AND INFORMATION THAT WILL
ENABLE AGENT TO ACCURATELY IDENTIFY AND VERIFY THE COLLATERAL), THE RESULTS OF
WHICH IN EACH CASE SHALL BE SATISFACTORY TO AGENT;

 

(E)           AGENT SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO AGENT, ALL CONSENTS, WAIVERS, ACKNOWLEDGMENTS AND OTHER
AGREEMENTS FROM THIRD PERSONS WHICH AGENT MAY DEEM NECESSARY OR DESIRABLE IN
ORDER TO PERMIT, PROTECT AND PERFECT ITS SECURITY

 

47

--------------------------------------------------------------------------------

 

INTERESTS IN AND LIENS UPON THE COLLATERAL OR TO EFFECTUATE THE PROVISIONS OR
PURPOSES OF THIS AGREEMENT AND THE OTHER FINANCING AGREEMENTS;

 

(F)            THE EXCESS AVAILABILITY AS DETERMINED BY AGENT, AS OF THE DATE
HEREOF, SHALL BE NOT LESS THAN $50,000,000 AFTER GIVING EFFECT TO THE INITIAL
LOANS MADE OR TO BE MADE AND LETTER OF CREDIT ACCOMMODATIONS ISSUED OR TO BE
ISSUED IN CONNECTION WITH THE INITIAL TRANSACTIONS HEREUNDER;

 

(G)           AGENT SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO AGENT, DEPOSIT ACCOUNT CONTROL AGREEMENTS BY AND AMONG AGENT,
EACH BORROWER AND GUARANTOR, AS THE CASE MAY BE AND EACH BANK WHERE SUCH
BORROWER (OR GUARANTOR) HAS A CONCENTRATION ACCOUNT, IN EACH CASE, DULY
AUTHORIZED, EXECUTED AND DELIVERED BY SUCH BANK AND BORROWER OR GUARANTOR, AS
THE CASE MAY BE (OR AGENT SHALL BE THE BANK ‘S CUSTOMER WITH RESPECT TO SUCH
DEPOSIT ACCOUNT AS AGENT MAY SPECIFY);

 

(H)           AGENT SHALL HAVE RECEIVED EVIDENCE, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO AGENT, THAT AGENT HAS A VALID PERFECTED FIRST
PRIORITY SECURITY INTEREST IN ALL OF THE COLLATERAL;

 

(I)            AGENT SHALL HAVE RECEIVED AND REVIEWED LIEN AND JUDGMENT SEARCH
RESULTS FOR THE JURISDICTION OF ORGANIZATION OF EACH BORROWER AND GUARANTOR, THE
JURISDICTION OF THE CHIEF EXECUTIVE OFFICE OF EACH BORROWER AND GUARANTOR AND
ALL JURISDICTIONS IN WHICH ASSETS OF BORROWERS AND GUARANTORS ARE LOCATED, WHICH
SEARCH RESULTS SHALL BE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO AGENT;

 

(J)            AGENT SHALL HAVE RECEIVED A WRITTEN APPRAISAL AS TO THE INVENTORY
OF BORROWERS BY AN APPRAISER ACCEPTABLE TO AGENT, IN FORM, SCOPE AND METHODOLOGY
REASONABLY ACCEPTABLE TO AGENT, ADDRESSED TO AGENT AND UPON WHICH AGENT AND
LENDERS ARE EXPRESSLY PERMITTED TO RELY;

 

(K)           AGENT SHALL HAVE RECEIVED ORIGINALS OF THE SHARES OF THE STOCK
CERTIFICATES (IF ANY) REPRESENTING ALL OF THE ISSUED AND OUTSTANDING SHARES OF
THE CAPITAL STOCK OF EACH BORROWER AND GUARANTOR (OTHER THAN PARENT) AND OWNED
BY ANY BORROWER OR GUARANTOR, IN EACH CASE TOGETHER WITH STOCK POWERS DULY
EXECUTED IN BLANK WITH RESPECT THERETO;

 

(L)            AGENT SHALL HAVE RECEIVED EVIDENCE OF INSURANCE AND LOSS PAYEE
ENDORSEMENTS REQUIRED HEREUNDER AND UNDER THE OTHER FINANCING AGREEMENTS, IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO AGENT, AND CERTIFICATES OF
INSURANCE POLICIES AND/OR ENDORSEMENTS NAMING AGENT AS LOSS PAYEE;

 

(M)          AGENT SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE SATISFACTORY TO
AGENT, PROJECTED INCOME STATEMENTS, BALANCE SHEETS AND STATEMENTS OF CASH FLOW
FOR PARENT AND ITS SUBSIDIARIES (ON A CONSOLIDATED BASIS) PREPARED ON A
QUARTERLY BASIS FOR THE PERIOD THROUGH THE END OF THE 2008 FISCAL YEAR AND
THEREAFTER, ON AN ANNUAL BASIS FOR EACH FISCAL YEAR THROUGH THE END OF THE 2011
FISCAL YEAR, IN EACH CASE WITH THE RESULTS AND ASSUMPTIONS SET FORTH IN ALL OF
SUCH PROJECTIONS IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO AGENT;

 

(N)           AGENT SHALL HAVE RECEIVED A BORROWING BASE CERTIFICATE SETTING
FORTH THE REVOLVING LOANS AND LETTER OF CREDIT ACCOMMODATIONS AVAILABLE TO
BORROWERS AS OF THE DATE

 

48

--------------------------------------------------------------------------------

 

HEREOF AS COMPLETED IN A MANNER REASONABLY SATISFACTORY TO AGENT AND DULY
AUTHORIZED, EXECUTED AND DELIVERED ON BEHALF OF ADMINISTRATIVE BORROWER;

 

(O)           AGENT SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO AGENT, SUCH OPINION LETTERS OF COUNSEL TO BORROWERS AND
GUARANTORS WITH RESPECT TO THE FINANCING AGREEMENTS AND SUCH OTHER MATTERS AS
AGENT MAY REQUEST; AND

 

(P)           THE OTHER FINANCING AGREEMENTS AND ALL INSTRUMENTS AND DOCUMENTS
HEREUNDER AND THEREUNDER SHALL HAVE BEEN DULY EXECUTED AND DELIVERED TO AGENT,
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO AGENT.

 

4.2           Conditions Precedent to All Loans and Letter of Credit
Accommodations. Each of the following is an additional condition precedent to
the Loans and/or providing Letter of Credit Accommodations to Borrowers,
including the initial Loans and Letter of Credit Accommodations and any future
Loans and Letter of Credit Accommodations:

 

(A)           ALL REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN AND IN THE
OTHER FINANCING AGREEMENTS SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS
WITH THE SAME EFFECT AS THOUGH SUCH REPRESENTATIONS AND WARRANTIES HAD BEEN MADE
ON AND AS OF THE DATE OF THE MAKING OF EACH SUCH LOAN OR PROVIDING EACH SUCH
LETTER OF CREDIT ACCOMMODATION AND AFTER GIVING EFFECT THERETO, EXCEPT TO THE
EXTENT THAT SUCH REPRESENTATIONS AND WARRANTIES EXPRESSLY RELATE SOLELY TO AN
EARLIER DATE (IN WHICH CASE SUCH REPRESENTATIONS AND WARRANTIES SHALL HAVE BEEN
TRUE AND ACCURATE ON AND AS OF SUCH EARLIER DATE);

 

(B)           NO LAW, REGULATION, ORDER, JUDGMENT OR DECREE OF ANY GOVERNMENTAL
AUTHORITY SHALL EXIST, AND NO ACTION, SUIT, INVESTIGATION, LITIGATION OR
PROCEEDING SHALL BE PENDING OR THREATENED IN ANY COURT OR BEFORE ANY ARBITRATOR
OR GOVERNMENTAL AUTHORITY, WHICH (I) PURPORTS TO ENJOIN, PROHIBIT, RESTRAIN OR
OTHERWISE AFFECT (A) THE MAKING OF THE LOANS OR PROVIDING THE LETTER OF CREDIT
ACCOMMODATIONS, OR (B) THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
PURSUANT TO THE TERMS HEREOF OR THE OTHER FINANCING AGREEMENTS OR (II) HAS OR
HAS A REASONABLE LIKELIHOOD OF HAVING A MATERIAL ADVERSE EFFECT; AND

 

(C)           NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING ON AND AS OF THE DATE OF THE MAKING OF SUCH LOAN OR PROVIDING EACH
SUCH LETTER OF CREDIT ACCOMMODATION AND AFTER GIVING EFFECT THERETO.

 

SECTION 5.           GRANT AND PERFECTION OF SECURITY INTEREST

 

5.1           Grant of Security Interest. To secure payment and performance of
all Obligations, each Borrower and Guarantor hereby grants to Agent, for itself
and the benefit of Secured Parties, a continuing security interest in, a lien
upon, and a right of set off against, and hereby assigns to Agent, for itself
and the benefit of Secured Parties, as security, all personal property, and
interests in personal property, of each Borrower and Guarantor, whether now
owned or hereafter acquired or existing, and wherever located (together with all
other collateral security for the Obligations at any time granted to or held or
acquired by Agent or any Lender, but subject to the exclusions contained in the
last paragraph of this Section, collectively, the “Collateral”), including:

 

(A)           ALL ACCOUNTS;

 

49

--------------------------------------------------------------------------------

 

(B)           ALL GENERAL INTANGIBLES, INCLUDING, WITHOUT LIMITATION, ALL
INTELLECTUAL PROPERTY;

 

(C)           ALL GOODS, INCLUDING, WITHOUT LIMITATION, INVENTORY AND EQUIPMENT;

 

(D)           ALL CHATTEL PAPER, INCLUDING, WITHOUT LIMITATION, ALL TANGIBLE AND
ELECTRONIC CHATTEL PAPER;

 

(E)           ALL INSTRUMENTS, INCLUDING, WITHOUT LIMITATION, ALL PROMISSORY
NOTES;

 

(F)            ALL DOCUMENTS;

 

(G)           ALL DEPOSIT ACCOUNTS;

 

(H)           ALL LETTERS OF CREDIT, BANKER’S ACCEPTANCES AND SIMILAR
INSTRUMENTS AND INCLUDING ALL LETTER-OF-CREDIT RIGHTS;

 

(I)            ALL SUPPORTING OBLIGATIONS AND ALL PRESENT AND FUTURE LIENS,
SECURITY INTERESTS, RIGHTS, REMEDIES, TITLE AND INTEREST IN, TO AND IN RESPECT
OF RECEIVABLES AND OTHER COLLATERAL, INCLUDING (I) RIGHTS AND REMEDIES UNDER OR
RELATING TO GUARANTIES, CONTRACTS OF SURETYSHIP, LETTERS OF CREDIT AND CREDIT
AND OTHER INSURANCE RELATED TO THE COLLATERAL, (II) RIGHTS OF STOPPAGE IN
TRANSIT, REPLEVIN, REPOSSESSION, RECLAMATION AND OTHER RIGHTS AND REMEDIES OF AN
UNPAID VENDOR, LIENOR OR SECURED PARTY, (III) GOODS DESCRIBED IN INVOICES,
DOCUMENTS, CONTRACTS OR INSTRUMENTS WITH RESPECT TO, OR OTHERWISE REPRESENTING
OR EVIDENCING, RECEIVABLES OR OTHER COLLATERAL, INCLUDING RETURNED, REPOSSESSED
AND RECLAIMED GOODS, AND (IV) DEPOSITS BY AND PROPERTY OF ACCOUNT DEBTORS OR
OTHER PERSONS SECURING THE OBLIGATIONS OF ACCOUNT DEBTORS;

 

(J)            ALL (I) INVESTMENT PROPERTY (INCLUDING SECURITIES, WHETHER
CERTIFICATED OR UNCERTIFICATED, SECURITIES ACCOUNTS, SECURITY ENTITLEMENTS,
COMMODITY CONTRACTS OR COMMODITY ACCOUNTS) AND (II) MONIES, CREDIT BALANCES,
DEPOSITS AND OTHER PROPERTY OF ANY BORROWER OR GUARANTOR NOW OR HEREAFTER HELD
OR RECEIVED BY OR IN TRANSIT TO AGENT, ANY LENDER OR ITS AFFILIATES OR AT ANY
OTHER DEPOSITORY OR OTHER INSTITUTION FROM OR FOR THE ACCOUNT OF ANY BORROWER OR
GUARANTOR, WHETHER FOR SAFEKEEPING, PLEDGE, CUSTODY, TRANSMISSION, COLLECTION OR
OTHERWISE;

 

(K)           ALL COMMERCIAL TORT CLAIMS, INCLUDING, WITHOUT LIMITATION, THOSE
IDENTIFIED IN THE INFORMATION CERTIFICATE;

 

(L)            TO THE EXTENT NOT OTHERWISE DESCRIBED ABOVE, ALL RECEIVABLES;

 

(M)          ALL RECORDS; AND

 

(N)           ALL PRODUCTS AND PROCEEDS OF THE FOREGOING, IN ANY FORM, INCLUDING
INSURANCE PROCEEDS AND ALL CLAIMS AGAINST THIRD PARTIES FOR LOSS OR DAMAGE TO OR
DESTRUCTION OF OR OTHER INVOLUNTARY CONVERSION OF ANY KIND OR NATURE OF ANY OR
ALL OF THE OTHER COLLATERAL.

 

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR ANY OF
THE OTHER FINANCING AGREEMENTS, THE SECURITY INTEREST IN, LIEN UPON, AND RIGHT
OF SETOFF AGAINST, ANY COLLATERAL OF THE PETRO COMPANIES OR ANY CAPITAL STOCK IN
PETRO GRANTED PURSUANT TO THIS AGREEMENT AND THE OTHER FINANCING AGREEMENTS
SHALL NOT BECOME EFFECTIVE UNTIL THE PETRO LIEN

 

50

--------------------------------------------------------------------------------

 

EFFECTIVE DATE, AT WHICH TIME EACH SUCH GRANT SHALL AUTOMATICALLY BECOME
EFFECTIVE WITHOUT THE NEED FOR ANY FURTHER ACTION, CONSENT OR OTHERWISE.

 

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION 5.1, THE
COLLATERAL CONSISTING OF CAPITAL STOCK OF ANY FOREIGN SUBSIDIARY OF ANY BORROWER
OR GUARANTOR SHALL NOT EXCEED SIXTY FIVE (65%) PERCENT OF THE ISSUED AND
OUTSTANDING CAPITAL STOCK OF SUCH FOREIGN SUBSIDIARY. NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED IN THIS SECTION 5.1, THE TYPES OR ITEMS OF COLLATERAL
DESCRIBED IN SUCH SECTION SHALL NOT INCLUDE (A) ANY EXCLUDED ASSETS; AND (B) ANY
RIGHTS OR INTEREST IN ANY CONTRACT, LEASE, PERMIT, LICENSE, CHARTER OR LICENSE
AGREEMENT COVERING REAL OR PERSONAL PROPERTY OF A BORROWER OF A GUARANTOR, AS
SUCH, IF UNDER THE ITEMS OF SUCH CONTRACT, LEASE, PERMIT, LICENSE, CHARTER OR
LICENSE AGREEMENT, OR APPLICABLE LAW WITH RESPECT THERETO, THE VALID GRANT OF A
SECURITY INTEREST OR LIEN THEREIN TO AGENT IS PROHIBITED AND SUCH PROHIBITION
HAS NOT BEEN OR IS NOT WAIVED OR THE CONSENT OF THE OTHER PARTY TO SUCH
CONTRACT, LEASE, PERMIT, LICENSE, CHARTER OR LICENSE AGREEMENT HAS NOT BEEN OR
IS NOT OTHERWISE OBTAINED; PROVIDED, THAT, THE FOREGOING EXCLUSION SHALL IN NO
WAY BE CONSTRUED (I) TO APPLY IF ANY SUCH PROHIBITION IS UNENFORCEABLE UNDER THE
UCC OR OTHER APPLICABLE LAW OR (II) SO AS TO LIMIT, IMPAIR OR OTHERWISE AFFECT
AGENT’S UNCONDITIONAL CONTINUING SECURITY INTERESTS IN AND LIENS UPON ANY RIGHTS
OR INTERESTS OF SUCH BORROWER OR GUARANTOR IN OR TO MONIES DUE OR TO BECOME DUE
UNDER SUCH CONTRACT, LEASE, PERMIT, LICENSE, CHARTER OR LICENSE AGREEMENT
(INCLUDING ANY RECEIVABLES).

 

5.2         Perfection of Security Interests.

 

(A)           EACH BORROWER AND GUARANTOR IRREVOCABLY AND UNCONDITIONALLY
AUTHORIZES AGENT (OR ITS AGENT) TO FILE AT ANY TIME AND FROM TIME TO TIME SUCH
FINANCING STATEMENTS WITH RESPECT TO THE COLLATERAL NAMING AGENT OR ITS DESIGNEE
AS THE SECURED PARTY AND SUCH BORROWER OR GUARANTOR AS DEBTOR, AS AGENT MAY
REQUIRE, AND INCLUDING ANY OTHER INFORMATION WITH RESPECT TO SUCH BORROWER OR
GUARANTOR OR OTHERWISE REQUIRED BY PART 5 OF ARTICLE 9 OF THE UNIFORM COMMERCIAL
CODE OF SUCH JURISDICTION AS AGENT MAY DETERMINE, TOGETHER WITH ANY AMENDMENT
AND CONTINUATIONS WITH RESPECT THERETO, WHICH AUTHORIZATION SHALL APPLY TO ALL
FINANCING STATEMENTS FILED ON, PRIOR TO OR AFTER THE DATE HEREOF. EACH BORROWER
AND GUARANTOR HEREBY RATIFIES AND APPROVES ALL FINANCING STATEMENTS NAMING AGENT
OR ITS DESIGNEE AS SECURED PARTY AND SUCH BORROWER OR GUARANTOR, AS THE CASE MAY
BE, AS DEBTOR WITH RESPECT TO THE COLLATERAL (AND ANY AMENDMENTS WITH RESPECT TO
SUCH FINANCING STATEMENTS) FILED BY OR ON BEHALF OF AGENT PRIOR TO THE DATE
HEREOF AND RATIFIES AND CONFIRMS THE AUTHORIZATION OF AGENT TO FILE SUCH
FINANCING STATEMENTS (AND AMENDMENTS, IF ANY). EACH BORROWER AND GUARANTOR
HEREBY AUTHORIZES AGENT TO ADOPT ON BEHALF OF SUCH BORROWER AND GUARANTOR ANY
SYMBOL REQUIRED FOR AUTHENTICATING ANY ELECTRONIC FILING. IN THE EVENT THAT THE
DESCRIPTION OF THE COLLATERAL IN ANY FINANCING STATEMENT NAMING AGENT OR ITS
DESIGNEE AS THE SECURED PARTY AND ANY BORROWER OR GUARANTOR AS DEBTOR INCLUDES
ASSETS AND PROPERTIES OF SUCH BORROWER OR GUARANTOR THAT DO NOT AT ANY TIME
CONSTITUTE COLLATERAL, WHETHER HEREUNDER, UNDER ANY OF THE OTHER FINANCING
AGREEMENTS OR OTHERWISE, THE FILING OF SUCH FINANCING STATEMENT SHALL
NONETHELESS BE DEEMED AUTHORIZED BY SUCH BORROWER OR GUARANTOR TO THE EXTENT OF
THE COLLATERAL INCLUDED IN SUCH DESCRIPTION AND IT SHALL NOT RENDER THE
FINANCING STATEMENT INEFFECTIVE AS TO ANY OF THE COLLATERAL OR OTHERWISE AFFECT
THE FINANCING STATEMENT AS IT APPLIES TO ANY OF THE COLLATERAL. IN NO EVENT
SHALL ANY BORROWER OR GUARANTOR AT ANY TIME FILE, OR PERMIT OR CAUSE TO BE
FILED, ANY CORRECTION STATEMENT OR TERMINATION STATEMENT WITH RESPECT TO ANY
FINANCING STATEMENT (OR AMENDMENT OR CONTINUATION WITH RESPECT THERETO) NAMING
AGENT OR ITS DESIGNEE AS SECURED PARTY AND SUCH BORROWER OR GUARANTOR AS DEBTOR.

 

51

--------------------------------------------------------------------------------

 

(B)           EACH BORROWER AND GUARANTOR DOES NOT HAVE ANY CHATTEL PAPER
(WHETHER TANGIBLE OR ELECTRONIC) OR INSTRUMENTS AS OF THE DATE HEREOF, EXCEPT AS
SET FORTH IN THE INFORMATION CERTIFICATE. IN THE EVENT THAT ANY BORROWER OR
GUARANTOR SHALL BE ENTITLED TO OR SHALL RECEIVE ANY CHATTEL PAPER OR INSTRUMENT
AFTER THE DATE HEREOF WITH A VALUE IN EXCESS OF $500,000 INDIVIDUALLY OR
$1,000,000 IN THE AGGREGATE (OR, IF AN EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING, THEN WITH ANY VALUE), BORROWERS AND GUARANTORS SHALL PROMPTLY NOTIFY
AGENT THEREOF IN WRITING. PROMPTLY UPON THE RECEIPT THEREOF BY OR ON BEHALF OF
ANY BORROWER OR GUARANTOR (INCLUDING BY ANY AGENT OR REPRESENTATIVE), SUCH
BORROWER OR GUARANTOR SHALL DELIVER, OR CAUSE TO BE DELIVERED TO AGENT, ALL
TANGIBLE CHATTEL PAPER AND INSTRUMENTS THAT SUCH BORROWER OR GUARANTOR HAS OR
MAY AT ANY TIME ACQUIRE, ACCOMPANIED BY SUCH INSTRUMENTS OF TRANSFER OR
ASSIGNMENT DULY EXECUTED IN BLANK AS AGENT MAY FROM TIME TO TIME SPECIFY, IN
EACH CASE EXCEPT AS AGENT MAY OTHERWISE AGREE. AT AGENT’S OPTION, EACH BORROWER
AND GUARANTOR SHALL, OR AGENT MAY AT ANY TIME ON BEHALF OF ANY BORROWER OR
GUARANTOR, CAUSE THE ORIGINAL OF ANY SUCH INSTRUMENT OR CHATTEL PAPER TO BE
CONSPICUOUSLY MARKED IN A FORM AND MANNER ACCEPTABLE TO AGENT WITH THE FOLLOWING
LEGEND REFERRING TO CHATTEL PAPER OR INSTRUMENTS AS APPLICABLE: “THIS [CHATTEL
PAPER][INSTRUMENT] IS SUBJECT TO THE SECURITY INTEREST OF WACHOVIA CAPITAL
FINANCE CORPORATION (CENTRAL), AS AGENT AND ANY SALE, TRANSFER, ASSIGNMENT OR
ENCUMBRANCE OF THIS [CHATTEL PAPER][INSTRUMENT] VIOLATES THE RIGHTS OF SUCH
SECURED PARTY.”

 

(C)           IN THE EVENT THAT ANY BORROWER OR GUARANTOR SHALL AT ANY TIME HOLD
OR ACQUIRE AN INTEREST IN ANY ELECTRONIC CHATTEL PAPER OR ANY “TRANSFERABLE
RECORD” (AS SUCH TERM IS DEFINED IN SECTION 201 OF THE FEDERAL ELECTRONIC
SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT OR IN SECTION 16 OF THE UNIFORM
ELECTRONIC TRANSACTIONS ACT AS IN EFFECT IN ANY RELEVANT JURISDICTION), SUCH
BORROWER OR GUARANTOR SHALL PROMPTLY NOTIFY AGENT THEREOF IN WRITING. PROMPTLY
UPON AGENT’S REQUEST, SUCH BORROWER OR GUARANTOR SHALL TAKE, OR CAUSE TO BE
TAKEN, SUCH ACTIONS AS AGENT MAY REQUEST TO GIVE AGENT CONTROL OF SUCH
ELECTRONIC CHATTEL PAPER UNDER SECTION 9-105 OF THE UCC AND CONTROL OF SUCH
TRANSFERABLE RECORD UNDER SECTION 201 OF THE FEDERAL ELECTRONIC SIGNATURES IN
GLOBAL AND NATIONAL COMMERCE ACT OR, AS THE CASE MAY BE, SECTION 16 OF THE
UNIFORM ELECTRONIC TRANSACTIONS ACT, AS IN EFFECT IN SUCH JURISDICTION.

 

(D)           EACH BORROWER AND GUARANTOR DOES NOT HAVE ANY DEPOSIT ACCOUNTS AS
OF THE DATE HEREOF, EXCEPT AS SET FORTH IN THE INFORMATION CERTIFICATE.
BORROWERS AND GUARANTORS SHALL NOT, DIRECTLY OR INDIRECTLY, AFTER THE DATE
HEREOF OPEN, ESTABLISH OR MAINTAIN ANY DEPOSIT ACCOUNT UNLESS EACH OF THE
FOLLOWING CONDITIONS IS SATISFIED: (I) AGENT SHALL HAVE RECEIVED NOT LESS THAN
FIVE (5) BUSINESS DAYS PRIOR WRITTEN NOTICE OF THE INTENTION OF ANY BORROWER OR
GUARANTOR TO OPEN OR ESTABLISH SUCH ACCOUNT WHICH NOTICE SHALL SPECIFY IN
REASONABLE DETAIL AND SPECIFICITY ACCEPTABLE TO AGENT THE NAME OF THE ACCOUNT,
THE OWNER OF THE ACCOUNT, THE NAME AND ADDRESS OF THE BANK AT WHICH SUCH ACCOUNT
IS TO BE OPENED OR ESTABLISHED, THE INDIVIDUAL AT SUCH BANK WITH WHOM SUCH
BORROWER OR GUARANTOR IS DEALING AND THE PURPOSE OF THE ACCOUNT, EXCEPT AS TO
ANY STORE ACCOUNT OPENED OR ESTABLISHED AFTER THE DATE HEREOF, SO LONG AS NO
EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, AGENT SHALL ONLY HAVE
RECEIVED SUCH INFORMATION AS TO SUCH STORE ACCOUNT ON THE NEXT MONTHLY REPORT
WITH RESPECT TO DEPOSIT ACCOUNTS IN ACCORDANCE WITH SECTION 7.1(A) HEREOF, (II)
THE BANK WHERE SUCH ACCOUNT IS OPENED OR MAINTAINED SHALL BE ACCEPTABLE TO
AGENT, AND (III) ON OR BEFORE THE OPENING OF SUCH DEPOSIT ACCOUNT (OTHER THAN A
STORE ACCOUNT OR A DISBURSEMENT ACCOUNT SO LONG AS NO EVENT OR DEFAULT SHALL
EXIST OR HAVE OCCURRED AND BE CONTINUING OR SO LONG AS SUCH STORE ACCOUNT OR
DISBURSEMENT ACCOUNT IS NOT MAINTAINED AT A BANK WHICH ALSO MAINTAINS A
COLLECTION, LOCKBOX OR CONCENTRATION ACCOUNT OF A BORROWER OR GUARANTOR) SUCH
BORROWER OR GUARANTOR SHALL DELIVER TO AGENT A DEPOSIT ACCOUNT

 

52

--------------------------------------------------------------------------------

 

CONTROL AGREEMENT WITH RESPECT TO SUCH DEPOSIT ACCOUNT DULY AUTHORIZED, EXECUTED
AND DELIVERED BY SUCH BORROWER OR GUARANTOR AND THE BANK AT WHICH SUCH DEPOSIT
ACCOUNT IS OPENED AND MAINTAINED. THE TERMS OF THIS SUBSECTION (D) SHALL NOT
APPLY TO ESCROW ACCOUNTS, PETTY CASH ACCOUNTS, OR DEPOSIT ACCOUNTS SPECIFICALLY
AND EXCLUSIVELY USED FOR LOTTERY PAYMENTS, PAYROLL, PAYROLL TAXES, WORKERS
COMPENSATION INSURANCE PAYMENTS AND OTHER EMPLOYEE WAGE AND BENEFIT PAYMENTS TO
OR FOR THE BENEFIT OF ANY BORROWER’S OR GUARANTOR’S SALARIED EMPLOYEES.

 

(E)           NO BORROWER OR GUARANTOR OWNS OR HOLDS, DIRECTLY OR INDIRECTLY,
BENEFICIALLY OR AS RECORD OWNER OR BOTH, ANY INVESTMENT PROPERTY, AS OF THE DATE
HEREOF, OR HAVE ANY INVESTMENT ACCOUNT, SECURITIES ACCOUNT, COMMODITY ACCOUNT OR
OTHER SIMILAR ACCOUNT WITH ANY BANK OR OTHER FINANCIAL INSTITUTION OR OTHER
SECURITIES INTERMEDIARY OR COMMODITY INTERMEDIARY AS OF THE DATE HEREOF, IN EACH
CASE EXCEPT AS SET FORTH IN THE INFORMATION CERTIFICATE.

 

(F)            IN THE EVENT THAT ANY BORROWER OR GUARANTOR SHALL BE ENTITLED TO
OR SHALL AT ANY TIME AFTER THE DATE HEREOF HOLD OR ACQUIRE ANY CERTIFICATED
SECURITIES (OTHER THAN SECURITIES CONSISTING OF EXCLUDED ASSETS OR CONSISTING OF
CAPITAL STOCK OF ANY EXCLUDED SUBSIDIARY), SUCH BORROWER OR GUARANTOR SHALL
PROMPTLY ENDORSE, ASSIGN AND DELIVER THE SAME TO AGENT, ACCOMPANIED BY SUCH
INSTRUMENTS OF TRANSFER OR ASSIGNMENT DULY EXECUTED IN BLANK AS AGENT MAY FROM
TIME TO TIME SPECIFY. IF ANY SECURITIES (OTHER THAN SECURITIES CONSISTING OF
EXCLUDED ASSETS OR CONSISTING OF CAPITAL STOCK OF ANY EXCLUDED SUBSIDIARY), NOW
OR HEREAFTER ACQUIRED BY ANY BORROWER OR GUARANTOR ARE UNCERTIFICATED AND ARE
ISSUED TO SUCH BORROWER OR GUARANTOR OR ITS NOMINEE DIRECTLY BY THE ISSUER
THEREOF, SUCH BORROWER OR GUARANTOR SHALL IMMEDIATELY NOTIFY AGENT THEREOF AND
SHALL AS AGENT MAY SPECIFY, EITHER (A) CAUSE THE ISSUER TO AGREE TO COMPLY WITH
INSTRUCTIONS FROM AGENT AS TO SUCH SECURITIES, WITHOUT FURTHER CONSENT OF ANY
BORROWER OR GUARANTOR OR SUCH NOMINEE, OR (B) ARRANGE FOR AGENT TO BECOME THE
REGISTERED OWNER OF THE SECURITIES.

 

(G)           BORROWERS AND GUARANTORS SHALL NOT, DIRECTLY OR INDIRECTLY, AFTER
THE DATE HEREOF OPEN, ESTABLISH OR MAINTAIN ANY INVESTMENT ACCOUNT, SECURITIES
ACCOUNT, COMMODITY ACCOUNT OR ANY OTHER SIMILAR ACCOUNT (OTHER THAN A DEPOSIT
ACCOUNT OR A CUSTOMER LOYALTY ACCOUNT) WITH ANY SECURITIES INTERMEDIARY OR
COMMODITY INTERMEDIARY UNLESS EACH OF THE FOLLOWING CONDITIONS IS SATISFIED: (A)
AGENT SHALL HAVE RECEIVED NOT LESS THAN FIVE (5) BUSINESS DAYS PRIOR WRITTEN
NOTICE OF THE INTENTION OF SUCH BORROWER OR GUARANTOR TO OPEN OR ESTABLISH SUCH
ACCOUNT WHICH NOTICE SHALL SPECIFY IN REASONABLE DETAIL AND SPECIFICITY
ACCEPTABLE TO AGENT THE NAME OF THE ACCOUNT, THE OWNER OF THE ACCOUNT, THE NAME
AND ADDRESS OF THE SECURITIES INTERMEDIARY OR COMMODITY INTERMEDIARY AT WHICH
SUCH ACCOUNT IS TO BE OPENED OR ESTABLISHED, THE INDIVIDUAL AT SUCH INTERMEDIARY
WITH WHOM SUCH BORROWER OR GUARANTOR IS DEALING AND THE PURPOSE OF THE ACCOUNT,
(B) THE SECURITIES INTERMEDIARY OR COMMODITY INTERMEDIARY (AS THE CASE MAY BE)
WHERE SUCH ACCOUNT IS OPENED OR MAINTAINED SHALL BE ACCEPTABLE TO AGENT, AND (C)
ON OR BEFORE THE OPENING OF SUCH INVESTMENT ACCOUNT, SECURITIES ACCOUNT OR OTHER
SIMILAR ACCOUNT WITH A SECURITIES INTERMEDIARY OR COMMODITY INTERMEDIARY, SUCH
BORROWER OR GUARANTOR SHALL AS AGENT MAY SPECIFY EITHER (1) EXECUTE AND DELIVER,
AND CAUSE TO BE EXECUTED AND DELIVERED TO AGENT, AN INVESTMENT PROPERTY CONTROL
AGREEMENT WITH RESPECT THERETO DULY AUTHORIZED, EXECUTED AND DELIVERED BY SUCH
BORROWER OR GUARANTOR AND SUCH SECURITIES INTERMEDIARY OR COMMODITY INTERMEDIARY
OR (2) ARRANGE FOR AGENT TO BECOME THE ENTITLEMENT HOLDER WITH RESPECT TO SUCH
INVESTMENT PROPERTY ON TERMS AND CONDITIONS ACCEPTABLE TO AGENT.

 

(H)           BORROWERS AND GUARANTORS ARE NOT THE BENEFICIARY OR OTHERWISE
ENTITLED TO ANY RIGHT TO PAYMENT UNDER ANY LETTER OF CREDIT, BANKER’S ACCEPTANCE
OR SIMILAR INSTRUMENT AS OF

 

53

--------------------------------------------------------------------------------

 

THE DATE HEREOF, EXCEPT AS SET FORTH IN THE INFORMATION CERTIFICATE. IN THE
EVENT THAT ANY BORROWER OR GUARANTOR SHALL BE ENTITLED TO OR SHALL RECEIVE ANY
RIGHT TO PAYMENT UNDER ANY LETTER OF CREDIT, BANKER’S ACCEPTANCE OR ANY SIMILAR
INSTRUMENT, WHETHER AS BENEFICIARY THEREOF OR OTHERWISE AFTER THE DATE HEREOF,
SUCH BORROWER OR GUARANTOR SHALL PROMPTLY NOTIFY AGENT THEREOF IN WRITING. SUCH
BORROWER OR GUARANTOR SHALL IMMEDIATELY, AS AGENT MAY SPECIFY, EITHER (I)
DELIVER, OR CAUSE TO BE DELIVERED TO AGENT, WITH RESPECT TO ANY SUCH LETTER OF
CREDIT, BANKER’S ACCEPTANCE OR SIMILAR INSTRUMENT, THE WRITTEN AGREEMENT OF THE
ISSUER AND ANY OTHER NOMINATED PERSON OBLIGATED TO MAKE ANY PAYMENT IN RESPECT
THEREOF (INCLUDING ANY CONFIRMING OR NEGOTIATING BANK), IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO AGENT, CONSENTING TO THE ASSIGNMENT OF THE PROCEEDS
OF THE LETTER OF CREDIT TO AGENT BY SUCH BORROWER OR GUARANTOR AND AGREEING TO
MAKE ALL PAYMENTS THEREON DIRECTLY TO AGENT OR AS AGENT MAY OTHERWISE DIRECT OR
(II) CAUSE AGENT TO BECOME, AT BORROWERS’ EXPENSE, THE TRANSFEREE BENEFICIARY OF
THE LETTER OF CREDIT, BANKER’S ACCEPTANCE OR SIMILAR INSTRUMENT (AS THE CASE MAY
BE).

 

(I)            BORROWERS AND GUARANTORS DO NOT HAVE ANY COMMERCIAL TORT CLAIMS
AS OF THE DATE HEREOF, EXCEPT AS SET FORTH IN THE INFORMATION CERTIFICATE. IN
THE EVENT THAT ANY BORROWER OR GUARANTOR SHALL AT ANY TIME AFTER THE DATE HEREOF
HAVE ANY COMMERCIAL TORT CLAIMS THAT ARISE IN CONNECTION WITH OR RELATE TO ANY
ASSETS WHICH ARE OR WERE AT ANY TIME INCLUDED IN THE CALCULATION OF THE
BORROWING BASE, SUCH BORROWER OR GUARANTOR SHALL PROMPTLY NOTIFY AGENT THEREOF
IN WRITING, WHICH NOTICE SHALL (I) SET FORTH IN REASONABLE DETAIL THE BASIS FOR
AND NATURE OF SUCH COMMERCIAL TORT CLAIM AND (II) INCLUDE THE EXPRESS GRANT BY
SUCH BORROWER OR GUARANTOR TO AGENT OF A SECURITY INTEREST IN SUCH COMMERCIAL
TORT CLAIM (AND THE PROCEEDS THEREOF). IN THE EVENT THAT SUCH NOTICE DOES NOT
INCLUDE SUCH GRANT OF A SECURITY INTEREST, THE SENDING THEREOF BY SUCH BORROWER
OR GUARANTOR TO AGENT SHALL BE DEEMED TO CONSTITUTE SUCH GRANT TO AGENT. UPON
THE SENDING OF SUCH NOTICE, ANY COMMERCIAL TORT CLAIM DESCRIBED THEREIN SHALL
CONSTITUTE PART OF THE COLLATERAL AND SHALL BE DEEMED INCLUDED THEREIN. WITHOUT
LIMITING THE AUTHORIZATION OF AGENT PROVIDED IN SECTION 5.2(A) HEREOF OR
OTHERWISE ARISING BY THE EXECUTION BY SUCH BORROWER OR GUARANTOR OF THIS
AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS, AGENT IS HEREBY IRREVOCABLY
AUTHORIZED FROM TIME TO TIME AND AT ANY TIME TO FILE SUCH FINANCING STATEMENTS
NAMING AGENT OR ITS DESIGNEE AS SECURED PARTY AND SUCH BORROWER OR GUARANTOR AS
DEBTOR, OR ANY AMENDMENTS TO ANY FINANCING STATEMENTS, COVERING ANY SUCH
COMMERCIAL TORT CLAIM AS COLLATERAL. IN ADDITION, EACH BORROWER AND GUARANTOR
SHALL PROMPTLY UPON AGENT’S REQUEST, EXECUTE AND DELIVER, OR CAUSE TO BE
EXECUTED AND DELIVERED, TO AGENT SUCH OTHER AGREEMENTS, DOCUMENTS AND
INSTRUMENTS AS AGENT MAY REQUIRE IN CONNECTION WITH SUCH COMMERCIAL TORT CLAIM.

 

(J)            BORROWERS AND GUARANTORS DO NOT HAVE ANY GOODS, DOCUMENTS OF
TITLE OR OTHER COLLATERAL IN THE CUSTODY, CONTROL OR POSSESSION OF A THIRD PARTY
AS OF THE DATE HEREOF, EXCEPT AS SET FORTH IN THE INFORMATION CERTIFICATE AND
EXCEPT FOR GOODS LOCATED IN THE UNITED STATES IN TRANSIT TO A LOCATION OF A
BORROWER OR GUARANTOR PERMITTED HEREIN IN THE ORDINARY COURSE OF BUSINESS OF
SUCH BORROWER OR GUARANTOR IN THE POSSESSION OF THE PERSON TRANSPORTING SUCH
GOODS. IN THE EVENT THAT ANY GOODS, DOCUMENTS OF TITLE OR OTHER COLLATERAL ARE
AT ANY TIME AFTER THE DATE HEREOF IN THE CUSTODY, CONTROL OR POSSESSION OF ANY
OTHER PERSON NOT REFERRED TO IN THE INFORMATION CERTIFICATE OR SUCH CARRIERS,
BORROWERS AND GUARANTORS SHALL PROMPTLY NOTIFY AGENT THEREOF IN WRITING AND SUCH
GOODS SHALL NOT CONSTITUTE ELIGIBLE INVENTORY OR ELIGIBLE EQUIPMENT UNLESS THE
CRITERIA FOR ELIGIBLE EQUIPMENT OR ELIGIBLE EQUIPMENT (AS THE CASE MAY BE) HAVE
BEEN SATISFIED. PROMPTLY UPON AGENT’S REQUEST, BORROWERS AND GUARANTORS SHALL
USE COMMERCIALLY REASONABLE EFFORTS TO DELIVER TO AGENT A COLLATERAL ACCESS
AGREEMENT DULY AUTHORIZED, EXECUTED AND DELIVERED BY SUCH PERSON AND THE
BORROWER OR GUARANTOR THAT IS THE OWNER OF SUCH COLLATERAL,

 

54

--------------------------------------------------------------------------------

 

EXCEPT THAT BORROWERS AND GUARANTORS SHALL NOT BE REQUIRED TO USE SUCH EFFORTS
TO DELIVER A COLLATERAL ACCESS AGREEMENT WITH RESPECT TO A RETAIL STORE LOCATION
OPENED AFTER THE DATE HEREOF UNLESS SUCH RETAIL STORE LOCATION IS LEASED FROM
HPT OR ANY OF ITS AFFILIATES.

 

(K)           BORROWERS AND GUARANTORS SHALL TAKE ANY OTHER ACTIONS REASONABLY
REQUESTED BY AGENT FROM TIME TO TIME TO CAUSE THE ATTACHMENT, PERFECTION AND
FIRST PRIORITY OF, AND THE ABILITY OF AGENT TO ENFORCE, THE SECURITY INTEREST OF
AGENT IN ANY AND ALL OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, (I)
EXECUTING, DELIVERING AND, WHERE APPROPRIATE, FILING FINANCING STATEMENTS AND
AMENDMENTS RELATING THERETO UNDER THE UCC OR OTHER APPLICABLE LAW, TO THE
EXTENT, IF ANY, THAT ANY BORROWER’S OR GUARANTOR’ S SIGNATURE THEREON IS
REQUIRED THEREFORE, (II) COMPLYING WITH ANY PROVISION OF ANY STATUTE, REGULATION
OR TREATY OF THE UNITED STATES AS TO ANY COLLATERAL IF COMPLIANCE WITH SUCH
PROVISION IS A CONDITION TO ATTACHMENT, PERFECTION OR PRIORITY OF, OR ABILITY OF
AGENT TO ENFORCE, THE SECURITY INTEREST OF AGENT IN SUCH COLLATERAL, AND (III)
OBTAINING THE CONSENTS AND APPROVALS OF ANY GOVERNMENTAL AUTHORITY OR THIRD
PARTY, INCLUDING, WITHOUT LIMITATION, ANY CONSENT OF ANY LICENSOR, LESSOR OR
OTHER PERSON OBLIGATED ON COLLATERAL, AND TAKING ALL ACTIONS REQUIRED BY ANY
EARLIER VERSIONS OF THE UCC OR BY OTHER LAW, AS APPLICABLE IN ANY RELEVANT
JURISDICTION.

 

SECTION 6.                                COLLECTION AND ADMINISTRATION

 

6.1           Borrowers’ Loan Accounts. Agent shall maintain one or more loan
account(s) on its books in which shall be recorded (a) all Loans, Letter of
Credit Accommodations and other Obligations and the Collateral, (b) all payments
made by or on behalf of any Borrower or Guarantor and (c) all other appropriate
debits and credits as provided in this Agreement, including fees, charges,
costs, expenses and interest. All entries in the loan account(s) shall be made
in accordance with Agent’s customary practices as in effect from time to time.

 

6.2           Statements. Agent shall render to Administrative Borrower each
month a statement setting forth the balance in the Borrowers’ loan account(s)
maintained by Agent for Borrowers pursuant to the provisions of this Agreement,
including principal, interest, fees, costs and expenses. Each such statement
shall, absent manifest errors or omissions, be conclusively binding upon
Borrowers and Guarantors as an account stated except to the extent that Agent
receives a written notice from Administrative Borrower of any specific
exceptions of Administrative Borrower thereto within sixty (60) days after the
date such statement has been received by Administrative Borrower. Until such
time as Agent shall have rendered to Administrative Borrower a written statement
as provided above, the balance in any Borrower’s loan account(s) shall be
presumptive evidence of the amounts due and owing to Agent and Lenders by
Borrowers and Guarantors.

 

6.3           Collection of Accounts.

 

(A)           EACH BORROWER AND GUARANTOR SHALL ESTABLISH AND MAINTAIN, AT ITS
EXPENSE, DEPOSIT ACCOUNT ARRANGEMENTS AND MERCHANT PAYMENT ARRANGEMENTS WITH THE
BANKS SET FORTH ON SCHEDULE 8.10 TO THE INFORMATION CERTIFICATE AND, SUBJECT TO
SECTION 5.2(D) HEREOF, SUCH OTHER BANKS AS SUCH BORROWER OR GUARANTOR MAY
HEREAFTER SELECT. THE BANKS SET FORTH ON SCHEDULE 8.10 TO THE INFORMATION
CERTIFICATE CONSTITUTE ALL OF THE BANKS WITH WHICH BORROWERS AND GUARANTORS HAVE
DEPOSIT ACCOUNT ARRANGEMENTS AND MERCHANT PAYMENT ARRANGEMENTS AS OF THE DATE
HEREOF AND IDENTIFIES EACH OF THE DEPOSIT ACCOUNTS AT SUCH BANKS THAT ARE USED
SOLELY FOR RECEIVING STORE RECEIPTS FROM A RETAIL STORE LOCATION OF A BORROWER
(TOGETHER WITH ANY OTHER DEPOSIT ACCOUNTS AT

 

55

--------------------------------------------------------------------------------

 

ANY TIME ESTABLISHED OR USED BY ANY BORROWER FOR RECEIVING SUCH STORE RECEIPTS
FROM ANY RETAIL STORE LOCATION, COLLECTIVELY, THE “STORE ACCOUNTS” AND EACH
INDIVIDUALLY, A “STORE ACCOUNT”) OR OTHERWISE DESCRIBES THE NATURE OF THE USE OF
SUCH DEPOSIT ACCOUNT BY SUCH BORROWER.

 

(B)           EACH BORROWER SHALL DEPOSIT ALL PROCEEDS OF COLLATERAL IN EVERY
FORM, INCLUDING, WITHOUT LIMITATION, CASH, CHECKS, CREDIT CARD SALES DRAFTS,
CREDIT CARD SALES OR CHARGE SLIPS OR RECEIPTS AND OTHER FORMS OF DAILY STORE
RECEIPTS, FROM EACH RETAIL STORE LOCATION OF SUCH BORROWER ON EACH BUSINESS DAY
INTO THE STORE ACCOUNT OF SUCH BORROWER USED SOLELY FOR SUCH PURPOSE; PROVIDED,
THAT, THE RETAIL STORES OF BORROWERS SHALL BE PERMITTED TO RETAIN CASH AT SUCH
RETAIL STORES IN AN AGGREGATE AMOUNT AS TO ALL SUCH RETAIL STORES EQUAL TO THE
PRODUCT OF $40,000 MULTIPLIED BY THE NUMBER OF SUCH RETAIL STORES, IMMEDIATELY
AFTER GIVING EFFECT TO THE DEPOSIT OF FUNDS FROM SUCH STORE INTO THE APPLICABLE
STORE ACCOUNT. ALL SUCH AVAILABLE FUNDS DEPOSITED INTO THE STORE ACCOUNTS SHALL
BE SENT BY WIRE TRANSFER OR OTHER ELECTRONIC FUNDS TRANSFER ON EACH BUSINESS DAY
TO THE BLOCKED ACCOUNTS AS PROVIDED IN SECTION 6.3(C), EXCEPT FOR AMOUNTS
REQUIRED TO BE MAINTAINED IN SUCH STORE ACCOUNTS UNDER THE TERMS OF SUCH
BORROWER’S ARRANGEMENTS WITH THE BANK AT WHICH SUCH STORE ACCOUNTS ARE
MAINTAINED (WHICH AMOUNTS IN ALL SUCH STORE ACCOUNTS IN THE AGGREGATE SHALL NOT
AT ANY TIME EXCEED THE PRODUCT OF $50,000 MULTIPLIED BY THE NUMBER OF THE RETAIL
STORES OF BORROWERS).

 

(C)           EACH BORROWER SHALL ESTABLISH AND MAINTAIN, AT ITS EXPENSE,
DEPOSIT ACCOUNTS WITH SUCH BANKS AS ARE ACCEPTABLE TO AGENT (THE “BLOCKED
ACCOUNTS”) INTO WHICH EACH BORROWER SHALL PROMPTLY EITHER CAUSE ALL AMOUNTS ON
DEPOSIT IN THE STORE ACCOUNTS OF SUCH BORROWER TO BE SENT AS PROVIDED IN SECTION
6.3(B) ABOVE  OR SHALL ITSELF DEPOSIT OR CAUSE TO BE DEPOSITED ALL PROCEEDS OF
COLLATERAL, INCLUDING ALL PROCEEDS FROM SALES OF INVENTORY, ALL AMOUNTS PAYABLE
TO EACH BORROWER FROM CREDIT CARD ISSUERS AND CREDIT CARD PROCESSORS AND ALL
OTHER PROCEEDS OF COLLATERAL (IT BEING UNDERSTOOD THAT THE BANKS LISTED ON
SCHEDULE 8.10 TO THE INFORMATION CERTIFICATE ARE ACCEPTABLE TO AGENT FOR
PURPOSES OF THIS SECTION). BORROWERS AND GUARANTORS SHALL DELIVER, OR CAUSE TO
BE DELIVERED TO AGENT A DEPOSIT ACCOUNT CONTROL AGREEMENT DULY AUTHORIZED,
EXECUTED AND DELIVERED BY EACH BANK WHERE A BLOCKED ACCOUNT IS MAINTAINED AS
PROVIDED IN SECTION 5.2 HEREOF. AT ANY TIME AN EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, PROMPTLY UPON AGENT’S REQUEST, BORROWERS AND
GUARANTORS SHALL DELIVER, OR CAUSE TO BE DELIVERED, TO AGENT A DEPOSIT ACCOUNT
CONTROL AGREEMENT DULY AUTHORIZED, EXECUTED AND DELIVERED BY SUCH BANKS WHERE A
STORE ACCOUNT IS MAINTAINED AS AGENT SHALL SPECIFY. WITHOUT LIMITING ANY OTHER
RIGHTS OR REMEDIES OF AGENT OR LENDERS, AGENT MAY, AT ITS OPTION, INSTRUCT THE
DEPOSITORY BANKS AT WHICH THE BLOCKED ACCOUNTS ARE MAINTAINED TO TRANSFER ALL
AVAILABLE FUNDS RECEIVED OR DEPOSITED INTO THE BLOCKED ACCOUNTS TO THE AGENT
PAYMENT ACCOUNT AT ANY TIME THAT A CASH DOMINION PERIOD EXISTS. WITHOUT LIMITING
ANY OTHER RIGHTS OR REMEDIES OF AGENT OR LENDERS, IN THE EVENT THAT A DEPOSIT
ACCOUNT CONTROL AGREEMENT IS IN EFFECT FOR A STORE ACCOUNT, THEN AGENT MAY, AT
ITS OPTION, INSTRUCT THE DEPOSITORY BANK AT WHICH THE STORE ACCOUNT IS
MAINTAINED TO TRANSFER ALL AVAILABLE FUNDS RECEIVED OR DEPOSITED INTO THE STORE
ACCOUNT TO THE AGENT PAYMENT ACCOUNT AT ANY TIME THAT AN EVENT OF DEFAULT SHALL
HAVE OCCURRED AND BE CONTINUING. AT ALL TIMES THAT AGENT SHALL HAVE NOTIFIED ANY
DEPOSITORY BANK TO TRANSFER FUNDS FROM A BLOCKED ACCOUNT OR STORE ACCOUNT TO THE
AGENT PAYMENT ACCOUNT, ALL PAYMENTS MADE TO SUCH BLOCKED ACCOUNTS OR STORE
ACCOUNTS, WHETHER IN RESPECT OF THE RECEIVABLES, AS PROCEEDS OF INVENTORY OR
OTHER COLLATERAL OR OTHERWISE SHALL BE TREATED AS PAYMENTS TO AGENT IN RESPECT
OF THE OBLIGATIONS AND THEREFORE SHALL CONSTITUTE THE PROPERTY OF AGENT AND
LENDERS TO THE EXTENT OF THE THEN OUTSTANDING OBLIGATIONS.

 

56

--------------------------------------------------------------------------------

 

(D)           FOR PURPOSES OF CALCULATING THE AMOUNT OF THE LOANS AVAILABLE TO
EACH BORROWER, ALL PAYMENTS RECEIVED IN THE AGENT PAYMENT ACCOUNT WILL BE
APPLIED (CONDITIONAL UPON FINAL COLLECTION) TO THE OBLIGATIONS ON THE BUSINESS
DAY OF RECEIPT BY AGENT OF IMMEDIATELY AVAILABLE FUNDS IN THE AGENT PAYMENT
ACCOUNT PROVIDED SUCH PAYMENTS AND NOTICE THEREOF ARE RECEIVED IN ACCORDANCE
WITH AGENT’S USUAL AND CUSTOMARY PRACTICES AS IN EFFECT FROM TIME TO TIME AND
WITHIN SUFFICIENT TIME TO CREDIT SUCH BORROWER’S LOAN ACCOUNT ON SUCH DAY, AND
IF NOT, THEN ON THE NEXT BUSINESS DAY. FOR THE PURPOSES OF CALCULATING INTEREST
ON THE OBLIGATIONS, SUCH PAYMENTS OR OTHER FUNDS RECEIVED WILL BE APPLIED
(CONDITIONAL UPON FINAL COLLECTION) TO THE OBLIGATIONS ON THE BUSINESS DAY OF
RECEIPT OF IMMEDIATELY AVAILABLE FUNDS BY AGENT IN THE AGENT PAYMENT ACCOUNT
PROVIDED SUCH PAYMENTS OR OTHER FUNDS AND NOTICE THEREOF ARE RECEIVED IN
ACCORDANCE WITH AGENT’S USUAL AND CUSTOMARY PRACTICES AS IN EFFECT FROM TIME TO
TIME AND WITHIN SUFFICIENT TIME TO CREDIT SUCH BORROWER’S LOAN ACCOUNT ON SUCH
DAY, AND IF NOT, THEN ON THE NEXT BUSINESS DAY.

 

(E)           EACH BORROWER AND GUARANTOR AND THEIR RESPECTIVE SUBSIDIARIES
SHALL, ACTING AS TRUSTEE FOR AGENT, RECEIVE, AS THE PROPERTY OF AGENT, ANY
MONIES, CHECKS, NOTES, DRAFTS OR ANY OTHER PAYMENT RELATING TO AND/OR PROCEEDS
OF ACCOUNTS OR OTHER COLLATERAL WHICH COME INTO THEIR POSSESSION OR UNDER THEIR
CONTROL AND PROMPTLY UPON RECEIPT THEREOF SHALL DEPOSIT OR CAUSE THE SAME TO BE
DEPOSITED IN THE STORE ACCOUNTS OR THE BLOCKED ACCOUNTS IN ACCORDANCE WITH
SECTIONS 6.3(B) AND (C) HEREOF. IN NO EVENT SHALL THE SAME BE COMMINGLED WITH
ANY BORROWER’S OR GUARANTOR’S OTHER FUNDS. BORROWERS AGREE TO REIMBURSE AGENT ON
DEMAND FOR ANY AMOUNTS OWED OR PAID TO ANY BANK OR OTHER FINANCIAL INSTITUTION
AT WHICH A BLOCKED ACCOUNT OR ANY OTHER DEPOSIT ACCOUNT OR INVESTMENT ACCOUNT IS
ESTABLISHED OR ANY OTHER BANK, FINANCIAL INSTITUTION OR OTHER PERSON INVOLVED IN
THE TRANSFER OF FUNDS TO OR FROM THE BLOCKED ACCOUNTS ARISING OUT OF AGENT’S
PAYMENTS TO OR INDEMNIFICATION OF SUCH BANK, FINANCIAL INSTITUTION OR OTHER
PERSON. THE OBLIGATIONS OF BORROWERS TO REIMBURSE AGENT FOR SUCH AMOUNTS
PURSUANT TO THIS SECTION 6.3 SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.

 

6.4           Payments.

 

(A)           ALL OBLIGATIONS SHALL BE PAYABLE TO THE AGENT PAYMENT ACCOUNT AS
PROVIDED IN SECTION 6.3 OR SUCH OTHER PLACE AS AGENT MAY DESIGNATE FROM TIME TO
TIME. SUBJECT TO THE OTHER TERMS AND CONDITIONS CONTAINED HEREIN, AGENT SHALL
APPLY PAYMENTS RECEIVED OR COLLECTED FROM ANY BORROWER OR GUARANTOR OR FOR THE
ACCOUNT OF ANY BORROWER OR GUARANTOR (INCLUDING THE MONETARY PROCEEDS OF
COLLECTIONS OR OF REALIZATION UPON ANY COLLATERAL) AS FOLLOWS: FIRST, TO PAY ANY
FEES, INDEMNITIES OR EXPENSE REIMBURSEMENTS THEN DUE TO AGENT AND LENDERS FROM
ANY BORROWER OR GUARANTOR; SECOND, TO PAY INTEREST DUE IN RESPECT OF ANY LOANS
(AND INCLUDING ANY SPECIAL AGENT ADVANCES); THIRD, TO PAY OR PREPAY PRINCIPAL IN
RESPECT OF SPECIAL AGENT ADVANCES; FOURTH, ON A PRO RATA BASIS, TO THE PAYMENT
OR PREPAYMENT OF PRINCIPAL IN RESPECT OF THE REVOLVING LOANS THEN DUE AND TO THE
PAYMENT OR PREPAYMENT OF OBLIGATIONS THEN DUE ARISING UNDER OR PURSUANT TO ANY
HEDGE AGREEMENT (BUT, AS TO OBLIGATIONS ARISING UNDER OR PURSUANT TO ANY HEDGE
AGREEMENT, ONLY UP TO THE AMOUNT OF ANY EFFECTIVE RESERVE ESTABLISHED IN RESPECT
OF SUCH OBLIGATIONS); FIFTH, TO PAY OR PREPAY ANY OTHER OBLIGATIONS (BUT
EXCLUDING FOR THIS PURPOSE ANY OBLIGATIONS ARISING UNDER OR PURSUANT TO BANK
PRODUCTS) WHETHER OR NOT THEN DUE, IN SUCH ORDER AND MANNER AS AGENT DETERMINES
AND, AT ANY TIME AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, TO BE HELD
AS CASH COLLATERAL IN CONNECTION WITH ANY LETTER OF CREDIT; AND SIXTH, TO PAY
OBLIGATIONS ARISING UNDER OR PURSUANT TO ANY BANK PRODUCT (OTHER THAN TO THE
EXTENT PROVIDED FOR ABOVE) ON A PRO RATA BASIS. SO LONG AS NO DEFAULT OR EVENT
OF DEFAULT SHALL HAVE

 

57

--------------------------------------------------------------------------------

 

OCCURRED AND BE CONTINUING, THE IMMEDIATELY PRECEDING SENTENCE SHALL NOT BE
DEEMED TO APPLY TO ANY PAYMENT BY BORROWERS SPECIFIED BY ADMINISTRATIVE BORROWER
TO BE FOR THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON ANY OF THE LOANS.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, (I) UNLESS
SO DIRECTED BY ADMINISTRATIVE BORROWER, OR UNLESS A DEFAULT OR AN EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, AGENT SHALL NOT APPLY ANY
PAYMENTS WHICH IT RECEIVES TO ANY EURODOLLAR RATE LOANS, EXCEPT (A) ON THE
EXPIRATION DATE OF THE INTEREST PERIOD APPLICABLE TO ANY SUCH EURODOLLAR RATE
LOANS OR (B) IN THE EVENT THAT THERE ARE NO OUTSTANDING PRIME RATE LOANS AND
(II) TO THE EXTENT ANY BORROWER USES ANY PROCEEDS OF THE LOANS OR LETTER OF
CREDIT ACCOMMODATIONS TO ACQUIRE RIGHTS IN OR THE USE OF ANY COLLATERAL OR TO
REPAY ANY INDEBTEDNESS USED TO ACQUIRE RIGHTS IN OR THE USE OF ANY COLLATERAL,
PAYMENTS IN RESPECT OF THE OBLIGATIONS SHALL BE DEEMED APPLIED FIRST TO THE
OBLIGATIONS ARISING FROM LOANS AND LETTER OF CREDIT ACCOMMODATIONS THAT WERE NOT
USED FOR SUCH PURPOSES AND SECOND TO THE OBLIGATIONS ARISING FROM LOANS AND
LETTER OF CREDIT ACCOMMODATIONS THE PROCEEDS OF WHICH WERE USED TO ACQUIRE
RIGHTS IN OR THE USE OF ANY COLLATERAL IN THE CHRONOLOGICAL ORDER IN WHICH SUCH
BORROWER ACQUIRED SUCH RIGHTS IN OR THE USE OF SUCH COLLATERAL.

 

(B)           AT AGENT’S OPTION, ALL PRINCIPAL, INTEREST, FEES, COSTS, EXPENSES
AND OTHER CHARGES PROVIDED FOR IN THIS AGREEMENT OR THE OTHER FINANCING
AGREEMENTS MAY BE CHARGED DIRECTLY TO THE LOAN ACCOUNT(S) OF ANY BORROWER
MAINTAINED BY AGENT. IF AFTER RECEIPT OF ANY PAYMENT OF, OR PROCEEDS OF
COLLATERAL APPLIED TO THE PAYMENT OF, ANY OF THE OBLIGATIONS, AGENT OR ANY
LENDER IS REQUIRED TO SURRENDER OR RETURN SUCH PAYMENT OR PROCEEDS TO ANY PERSON
FOR ANY REASON, THEN THE OBLIGATIONS INTENDED TO BE SATISFIED BY SUCH PAYMENT OR
PROCEEDS SHALL BE REINSTATED AND CONTINUE AND THIS AGREEMENT SHALL CONTINUE IN
FULL FORCE AND EFFECT AS IF SUCH PAYMENT OR PROCEEDS HAD NOT BEEN RECEIVED BY
AGENT OR SUCH LENDER. BORROWERS AND GUARANTORS SHALL BE LIABLE TO PAY TO AGENT,
AND DO HEREBY INDEMNIFY AND HOLD AGENT AND LENDERS HARMLESS FOR THE AMOUNT OF
ANY PAYMENTS OR PROCEEDS SURRENDERED OR RETURNED. THIS SECTION 6.4(B) SHALL
REMAIN EFFECTIVE NOTWITHSTANDING ANY CONTRARY ACTION WHICH MAY BE TAKEN BY AGENT
OR ANY LENDER IN RELIANCE UPON SUCH PAYMENT OR PROCEEDS. THIS SECTION 6.4 SHALL
SURVIVE THE PAYMENT OF THE OBLIGATIONS AND THE TERMINATION OF THIS AGREEMENT.

 

6.5           Authorization to Make Loans. Agent and Lenders are authorized to
make the Loans and provide the Letter of Credit Accommodations based upon
telephonic or other instructions received from anyone purporting to be an
officer of Administrative Borrower or any Borrower or other authorized person
or, at the discretion of Agent, if such Loans are necessary to satisfy any
Obligations then due and payable. All requests for Loans or Letter of Credit
Accommodations hereunder shall specify the date on which the requested advance
is to be made or Letter of Credit Accommodations established (which day shall be
a Business Day) and the amount of the requested Loan. Requests received after
12:00 noon Chicago, Illinois time on any day shall be deemed to have been made
as of the opening of business on the immediately following Business Day. All
Loans and Letter of Credit Accommodations under this Agreement shall be
conclusively presumed to have been made to, and at the request of and for the
benefit of, any Borrower or Guarantor when deposited to the credit of any
Borrower or Guarantor or otherwise disbursed or established in accordance with
the instructions of any Borrower or Guarantor or in accordance with the terms
and conditions of this Agreement.

 

6.6           Use of Proceeds. All Loans made or Letter of Credit Accommodations
provided to or for the benefit of any Borrower pursuant to the provisions hereof
shall be used by such Borrower only for general operating, working capital, and
other proper corporate purposes of any

 

58

--------------------------------------------------------------------------------

 

Borrower or Guarantor not otherwise prohibited by the terms hereof. None of the
proceeds will be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security or for the purposes of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might cause any of the Loans to be
considered a “purpose credit” within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System, as amended.

 

6.7          Appointment of Administrative Borrower as Agent for Requesting
Loans and Receipts of Loans and Statements.

 

(A)           EACH BORROWER HEREBY IRREVOCABLY APPOINTS AND CONSTITUTES
ADMINISTRATIVE BORROWER AS ITS AGENT TO REQUEST AND RECEIVE LOANS AND LETTER OF
CREDIT ACCOMMODATIONS PURSUANT TO THIS AGREEMENT AND THE OTHER FINANCING
AGREEMENTS FROM AGENT OR ANY LENDER IN THE NAME OR ON BEHALF OF SUCH BORROWER.
AGENT AND LENDERS MAY DISBURSE THE LOANS TO SUCH BANK ACCOUNT OF ADMINISTRATIVE
BORROWER OR A BORROWER OR OTHERWISE MAKE SUCH LOANS TO A BORROWER AND PROVIDE
SUCH LETTER OF CREDIT ACCOMMODATIONS TO A BORROWER AS ADMINISTRATIVE BORROWER
MAY DESIGNATE OR DIRECT, WITHOUT NOTICE TO ANY OTHER BORROWER OR OBLIGOR.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, AGENT MAY AT ANY TIME
AND FROM TIME TO TIME REQUIRE THAT LOANS TO OR FOR THE ACCOUNT OF ANY BORROWER
BE DISBURSED DIRECTLY TO AN OPERATING ACCOUNT OF SUCH BORROWER.

 

(B)           ADMINISTRATIVE BORROWER HEREBY ACCEPTS THE APPOINTMENT BY
BORROWERS TO ACT AS THE AGENT OF BORROWERS PURSUANT TO THIS SECTION 6.7.
ADMINISTRATIVE BORROWER SHALL ENSURE THAT THE DISBURSEMENT OF ANY LOANS TO EACH
BORROWER REQUESTED BY OR PAID TO OR FOR THE ACCOUNT OF PARENT, OR THE ISSUANCE
OF ANY LETTER OF CREDIT ACCOMMODATIONS FOR A BORROWER HEREUNDER, SHALL BE PAID
TO OR FOR THE ACCOUNT OF SUCH BORROWER.

 

(C)           EACH BORROWER AND OTHER GUARANTOR HEREBY IRREVOCABLY APPOINTS AND
CONSTITUTES ADMINISTRATIVE BORROWER AS ITS AGENT TO RECEIVE STATEMENTS ON
ACCOUNT AND ALL OTHER NOTICES FROM AGENT AND LENDERS WITH RESPECT TO THE
OBLIGATIONS OR OTHERWISE UNDER OR IN CONNECTION WITH THIS AGREEMENT AND THE
OTHER FINANCING AGREEMENTS.

 

(D)           ANY NOTICE, ELECTION, REPRESENTATION, WARRANTY, AGREEMENT OR
UNDERTAKING BY OR ON BEHALF OF ANY OTHER BORROWER OR ANY GUARANTOR BY
ADMINISTRATIVE BORROWER SHALL BE DEEMED FOR ALL PURPOSES TO HAVE BEEN MADE BY
SUCH BORROWER OR GUARANTOR, AS THE CASE MAY BE, AND SHALL BE BINDING UPON AND
ENFORCEABLE AGAINST SUCH BORROWER OR GUARANTOR TO THE SAME EXTENT AS IF MADE
DIRECTLY BY SUCH BORROWER OF GUARANTOR.

 

(E)           NO PURPORTED TERMINATION OF THE APPOINTMENT OF ADMINISTRATIVE
BORROWER AS AGENT AS AFORESAID SHALL BE EFFECTIVE, EXCEPT AFTER TEN (10) DAYS’
PRIOR WRITTEN NOTICE TO AGENT.

 

6.8          Pro Rata Treatment. Except to the extent otherwise provided in this
Agreement:  (a) the making and conversion of Loans shall be made among the
Lenders based on their respective Pro Rata Shares as to the Loans and (b) each
payment on account of any Obligations to or for the account of one or more of
Lenders in respect of any Obligations due on a particular day shall be allocated
among the Lenders entitled to such payments based on their respective Pro Rata
Shares and shall be distributed accordingly.

 

6.9          Sharing of Payments, Etc.

 

59

--------------------------------------------------------------------------------

 

(A)           EACH BORROWER AND GUARANTOR AGREES THAT, IN ADDITION TO (AND
WITHOUT LIMITATION OF) ANY RIGHT OF SETOFF, BANKER’S LIEN OR COUNTERCLAIM AGENT
OR ANY LENDER MAY OTHERWISE HAVE, EACH LENDER SHALL BE ENTITLED, AT ITS OPTION
(BUT SUBJECT, AS AMONG AGENT AND LENDERS, TO THE PROVISIONS OF SECTION 12.3(B)
HEREOF), TO OFFSET BALANCES HELD BY IT FOR THE ACCOUNT OF SUCH BORROWER OR
GUARANTOR AT ANY OF ITS OFFICES, IN DOLLARS OR IN ANY OTHER CURRENCY, AGAINST
ANY PRINCIPAL OF OR INTEREST ON ANY LOANS OWED TO SUCH LENDER OR ANY OTHER
AMOUNT PAYABLE TO SUCH LENDER HEREUNDER, THAT IS NOT PAID WHEN DUE (REGARDLESS
OF WHETHER SUCH BALANCES ARE THEN DUE TO SUCH BORROWER OR GUARANTOR), IN WHICH
CASE IT SHALL PROMPTLY NOTIFY ADMINISTRATIVE BORROWER AND AGENT THEREOF;
PROVIDED, THAT , SUCH LENDER’S FAILURE TO GIVE SUCH NOTICE SHALL NOT AFFECT THE
VALIDITY THEREOF.

 

(B)           IF ANY LENDER (INCLUDING AGENT) SHALL OBTAIN FROM ANY BORROWER OR
GUARANTOR PAYMENT OF ANY PRINCIPAL OF OR INTEREST ON ANY LOAN OWING TO IT OR
PAYMENT OF ANY OTHER AMOUNT UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING
AGREEMENTS THROUGH THE EXERCISE OF ANY RIGHT OF SETOFF, BANKER’S LIEN OR
COUNTERCLAIM OR SIMILAR RIGHT OR OTHERWISE (OTHER THAN FROM AGENT AS PROVIDED
HEREIN), AND, AS A RESULT OF SUCH PAYMENT, SUCH LENDER SHALL HAVE RECEIVED MORE
THAN ITS PRO RATA SHARE OF THE PRINCIPAL OF THE LOANS OR MORE THAN ITS SHARE OF
SUCH OTHER AMOUNTS THEN DUE HEREUNDER OR THEREUNDER BY ANY BORROWER OR GUARANTOR
TO SUCH LENDER THAN THE PERCENTAGE THEREOF RECEIVED BY ANY OTHER LENDER, IT
SHALL PROMPTLY PAY TO AGENT, FOR THE BENEFIT OF LENDERS, THE AMOUNT OF SUCH
EXCESS AND SIMULTANEOUSLY PURCHASE FROM SUCH OTHER LENDERS A PARTICIPATION IN
THE LOANS OR SUCH OTHER AMOUNTS, RESPECTIVELY, OWING TO SUCH OTHER LENDERS (OR
SUCH INTEREST DUE THEREON, AS THE CASE MAY BE) IN SUCH AMOUNTS, AND MAKE SUCH
OTHER ADJUSTMENTS FROM TIME TO TIME AS SHALL BE EQUITABLE, TO THE END THAT ALL
LENDERS SHALL SHARE THE BENEFIT OF SUCH EXCESS PAYMENT (NET OF ANY EXPENSES THAT
MAY BE INCURRED BY SUCH LENDER IN OBTAINING OR PRESERVING SUCH EXCESS PAYMENT)
IN ACCORDANCE WITH THEIR RESPECTIVE PRO RATA SHARES OR AS OTHERWISE AGREED BY
LENDERS. TO SUCH END ALL LENDERS SHALL MAKE APPROPRIATE ADJUSTMENTS AMONG
THEMSELVES (BY THE RESALE OF PARTICIPATION SOLD OR OTHERWISE) IF SUCH PAYMENT IS
RESCINDED OR MUST OTHERWISE BE RESTORED.

 

(C)           EACH BORROWER AND GUARANTOR AGREES THAT ANY LENDER PURCHASING A
PARTICIPATION (OR DIRECT INTEREST) AS PROVIDED IN THIS SECTION MAY EXERCISE, IN
A MANNER CONSISTENT WITH THIS SECTION, ALL RIGHTS OF SETOFF, BANKER’S LIEN,
COUNTERCLAIM OR SIMILAR RIGHTS WITH RESPECT TO SUCH PARTICIPATION AS FULLY AS IF
SUCH LENDER WERE A DIRECT HOLDER OF LOANS OR OTHER AMOUNTS (AS THE CASE MAY BE)
OWING TO SUCH LENDER IN THE AMOUNT OF SUCH PARTICIPATION.

 

(D)           NOTHING CONTAINED HEREIN SHALL REQUIRE ANY LENDER TO EXERCISE ANY
RIGHT OF SETOFF, BANKER’S LIEN, COUNTERCLAIMS OR SIMILAR RIGHTS OR SHALL AFFECT
THE RIGHT OF ANY LENDER TO EXERCISE, AND RETAIN THE BENEFITS OF EXERCISING, ANY
SUCH RIGHT WITH RESPECT TO ANY OTHER INDEBTEDNESS OR OBLIGATION OF ANY BORROWER
OR GUARANTOR. IF, UNDER ANY APPLICABLE BANKRUPTCY, INSOLVENCY OR OTHER SIMILAR
LAW, ANY LENDER RECEIVES A SECURED CLAIM IN LIEU OF A SETOFF TO WHICH THIS
SECTION APPLIES, SUCH LENDER SHALL, TO THE EXTENT PRACTICABLE, ASSIGN SUCH
RIGHTS TO AGENT FOR THE BENEFIT OF LENDERS AND, IN ANY EVENT, EXERCISE ITS
RIGHTS IN RESPECT OF SUCH SECURED CLAIM IN A MANNER CONSISTENT WITH THE RIGHTS
OF LENDERS ENTITLED UNDER THIS SECTION TO SHARE IN THE BENEFITS OF ANY RECOVERY
ON SUCH SECURED CLAIM.

 

6.10        Settlement Procedures.

 

(A)           IN ORDER TO ADMINISTER THE CREDIT FACILITY IN AN EFFICIENT MANNER
AND TO MINIMIZE THE TRANSFER OF FUNDS BETWEEN AGENT AND LENDERS, AGENT SHALL (SO
LONG AS THE AGGREGATE

 

60

--------------------------------------------------------------------------------

 

AMOUNT OF REVOLVING LOANS SINCE THE LAST DAY OF THE IMMEDIATELY PRECEDING
SETTLEMENT PERIOD PLUS THE AMOUNT OF THE REQUESTED REVOLVING LOANS DOES NOT
EXCEED $25,000,000) AND OTHERWISE AGENT MAY, AT ITS OPTION, IN ANY CASE SUBJECT
TO THE TERMS OF THIS SECTION, MAKE AVAILABLE, ON BEHALF OF LENDERS AND IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, THE FULL AMOUNT OF THE LOANS
REQUESTED OR CHARGED TO ANY BORROWER’S LOAN ACCOUNT(S) OR OTHERWISE TO BE
ADVANCED BY LENDERS PURSUANT TO THE TERMS HEREOF, WITHOUT REQUIREMENT OF PRIOR
NOTICE TO LENDERS OF THE PROPOSED LOANS.

 

(B)           WITH RESPECT TO ALL LOANS MADE BY AGENT ON BEHALF OF LENDERS AS
PROVIDED IN THIS SECTION, THE AMOUNT OF EACH LENDER’S PRO RATA SHARE OF THE
OUTSTANDING LOANS SHALL BE COMPUTED WEEKLY, AND SHALL BE ADJUSTED UPWARD OR
DOWNWARD ON THE BASIS OF THE AMOUNT OF THE OUTSTANDING LOANS AS OF 5:00 P.M.
CHICAGO, ILLINOIS TIME ON THE BUSINESS DAY IMMEDIATELY PRECEDING THE DATE OF
EACH SETTLEMENT COMPUTATION; PROVIDED, THAT, AGENT RETAINS THE ABSOLUTE RIGHT AT
ANY TIME OR FROM TIME TO TIME TO MAKE THE ABOVE DESCRIBED ADJUSTMENTS AT
INTERVALS MORE FREQUENT THAN WEEKLY, BUT IN NO EVENT MORE THAN TWICE IN ANY
WEEK. AGENT SHALL DELIVER TO EACH OF THE LENDERS AFTER THE END OF EACH WEEK, OR
AT SUCH LESSER PERIOD OR PERIODS AS AGENT SHALL DETERMINE, A SUMMARY STATEMENT
OF THE AMOUNT OF OUTSTANDING LOANS FOR SUCH PERIOD (SUCH WEEK OR LESSER PERIOD
OR PERIODS BEING HEREINAFTER REFERRED TO AS A “SETTLEMENT PERIOD”). IF THE
SUMMARY STATEMENT IS SENT BY AGENT AND RECEIVED BY A LENDER PRIOR TO 12:00 NOON
CHICAGO, ILLINOIS TIME, THEN SUCH LENDER SHALL MAKE THE SETTLEMENT TRANSFER
DESCRIBED IN THIS SECTION BY NO LATER THAN 3:00 P.M. CHICAGO, ILLINOIS TIME ON
THE SAME BUSINESS DAY AND IF RECEIVED BY A LENDER AFTER 12:00 NOON CHICAGO,
ILLINOIS TIME, THEN SUCH LENDER SHALL MAKE THE SETTLEMENT TRANSFER BY NOT LATER
THAN 3:00 P.M. CHICAGO, ILLINOIS CHICAGO TIME ON THE NEXT BUSINESS DAY FOLLOWING
THE DATE OF RECEIPT. IF, AS OF THE END OF ANY SETTLEMENT PERIOD, THE AMOUNT OF A
LENDER’S PRO RATA SHARE OF THE OUTSTANDING LOANS IS MORE THAN SUCH LENDER’S PRO
RATA SHARE OF THE OUTSTANDING LOANS AS OF THE END OF THE PREVIOUS SETTLEMENT
PERIOD, THEN SUCH LENDER SHALL FORTHWITH (BUT IN NO EVENT LATER THAN THE TIME
SET FORTH IN THE PRECEDING SENTENCE) TRANSFER TO AGENT BY WIRE TRANSFER IN
IMMEDIATELY AVAILABLE FUNDS THE AMOUNT OF THE INCREASE. ALTERNATIVELY, IF THE
AMOUNT OF A LENDER’S PRO RATA SHARE OF THE OUTSTANDING LOANS IN ANY SETTLEMENT
PERIOD IS LESS THAN THE AMOUNT OF SUCH LENDER’S PRO RATA SHARE OF THE
OUTSTANDING LOANS FOR THE PREVIOUS SETTLEMENT PERIOD, AGENT SHALL FORTHWITH
TRANSFER TO SUCH LENDER BY WIRE TRANSFER IN IMMEDIATELY AVAILABLE FUNDS THE
AMOUNT OF THE DECREASE. THE OBLIGATION OF EACH OF THE LENDERS TO TRANSFER SUCH
FUNDS AND EFFECT SUCH SETTLEMENT SHALL BE IRREVOCABLE AND UNCONDITIONAL AND
WITHOUT RECOURSE TO OR WARRANTY BY AGENT. AGENT AND EACH LENDER AGREES TO MARK
ITS BOOKS AND RECORDS AT THE END OF EACH SETTLEMENT PERIOD TO SHOW AT ALL TIMES
THE DOLLAR AMOUNT OF ITS PRO RATA SHARE OF THE OUTSTANDING LOANS AND LETTER OF
CREDIT ACCOMMODATIONS. EACH LENDER SHALL ONLY BE ENTITLED TO RECEIVE INTEREST ON
ITS PRO RATA SHARE OF THE LOANS TO THE EXTENT SUCH LOANS HAVE BEEN FUNDED BY
SUCH LENDER. BECAUSE THE AGENT ON BEHALF OF LENDERS MAY BE ADVANCING AND/OR MAY
BE REPAID LOANS PRIOR TO THE TIME WHEN LENDERS WILL ACTUALLY ADVANCE AND/OR BE
REPAID SUCH LOANS, INTEREST WITH RESPECT TO LOANS SHALL BE ALLOCATED BY AGENT IN
ACCORDANCE WITH THE AMOUNT OF LOANS ACTUALLY ADVANCED BY AND REPAID TO EACH
LENDER AND THE AGENT AND SHALL ACCRUE FROM AND INCLUDING THE DATE SUCH LOANS ARE
SO ADVANCED TO BUT EXCLUDING THE DATE SUCH LOANS ARE EITHER REPAID BY BORROWERS
OR ACTUALLY SETTLED WITH THE APPLICABLE LENDER AS DESCRIBED IN THIS SECTION.

 

(C)           TO THE EXTENT THAT AGENT HAS MADE ANY SUCH AMOUNTS AVAILABLE AND
THE SETTLEMENT DESCRIBED ABOVE SHALL NOT YET HAVE OCCURRED, UPON REPAYMENT OF
ANY LOANS BY A BORROWER, AGENT MAY APPLY SUCH AMOUNTS REPAID DIRECTLY TO ANY
AMOUNTS MADE AVAILABLE BY AGENT PURSUANT TO THIS SECTION. IN LIEU OF WEEKLY OR
MORE FREQUENT SETTLEMENTS, AGENT MAY, AT ITS

 

61

--------------------------------------------------------------------------------

 

OPTION, AT ANY TIME REQUIRE EACH LENDER TO PROVIDE AGENT WITH IMMEDIATELY
AVAILABLE FUNDS REPRESENTING ITS PRO RATA SHARE OF EACH LOAN, PRIOR TO AGENT’S
DISBURSEMENT OF SUCH LOAN TO BORROWER. IN SUCH EVENT, UPON RECEIPT BY AGENT OF
ANY REQUEST TO BORROW LOANS BY A BORROWER, AGENT SHALL PROMPTLY NOTIFY EACH
LENDER THEREOF. IN SUCH EVENT, (A) IF A LENDER RECEIVES NOTICE OF A BORROWER’S
REQUEST TO BORROW A PRIME RATE LOAN BY 1:00 P.M. CHICAGO, ILLINOIS TIME ON ANY
BUSINESS DAY, SUCH LENDER SHALL MAKE THE AMOUNT OF ITS PRO RATA SHARE OF SUCH
PRIME RATE LOAN AVAILABLE TO AGENT BY 3:00 P.M. CHICAGO, ILLINOIS TIME ON SUCH
BUSINESS DAY; PROVIDED, THAT, IF A LENDER RECEIVES NOTICE OF A BORROWER’S
REQUEST TO BORROW PRIME RATE LOANS AFTER 1:00 P.M. CHICAGO, ILLINOIS TIME ON ANY
BUSINESS DAY, SUCH LENDER SHALL MAKE THE AMOUNT OF ITS PRO RATA SHARE OF SUCH
PRIME RATE LOAN AVAILABLE TO AGENT BY 1:00 P.M. CHICAGO, ILLINOIS TIME ON THE
NEXT SUCCEEDING BUSINESS DAY, AND (B) IF A LENDER RECEIVES NOTICE OF A
BORROWER’S REQUEST TO BORROW A EURODOLLAR RATE LOAN BY 5:00 P.M. CHICAGO,
ILLINOIS TIME ON ANY BUSINESS DAY, SUCH LENDER SHALL MAKE THE AMOUNT OF ITS PRO
RATA SHARE OF SUCH EURODOLLAR RATE LOAN AVAILABLE TO AGENT BY 1:000 P.M.
CHICAGO, ILLINOIS TIME ON THE THIRD BUSINESS DAY FOLLOWING THE RECEIPT BY SUCH
LENDER OF SUCH NOTICE; PROVIDED, THAT, IF A LENDER RECEIVES NOTICE OF A
BORROWER’S REQUEST TO BORROW A EURODOLLAR RATE LOAN AFTER 5:00 P.M. CHICAGO,
ILLINOIS TIME ON ANY BUSINESS DAY, SUCH LENDER SHALL MAKE THE AMOUNT OF ITS PRO
RATA SHARE OF SUCH EURODOLLAR RATE LOAN AVAILABLE TO AGENT BY 1:00 P.M. CHICAGO,
ILLINOIS TIME ON THE FOURTH BUSINESS DAY FOLLOWING THE RECEIPT BY SUCH LENDER OF
SUCH NOTICE. NO LENDER SHALL BE RESPONSIBLE FOR ANY DEFAULT BY ANY OTHER LENDER
IN THE OTHER LENDER’S OBLIGATION TO MAKE A LOAN REQUESTED HEREUNDER NOR SHALL
THE COMMITMENT OF ANY LENDER BE INCREASED OR DECREASED AS A RESULT OF THE
DEFAULT BY ANY OTHER LENDER IN THE OTHER LENDER’S OBLIGATION TO MAKE A LOAN
HEREUNDER.

 

(D)           IF AGENT IS NOT FUNDING A PARTICULAR LOAN TO A BORROWER (OR
ADMINISTRATIVE BORROWER FOR THE BENEFIT OF SUCH BORROWER) PURSUANT TO SECTIONS
6.10(A) AND 6.10(B) ABOVE ON ANY DAY, BUT IS REQUIRING EACH LENDER TO PROVIDE
AGENT WITH IMMEDIATELY AVAILABLE FUNDS ON THE DATE OF SUCH LOAN AS PROVIDED IN
SECTION 6.10(C) ABOVE, AGENT MAY ASSUME THAT EACH LENDER WILL MAKE AVAILABLE TO
AGENT SUCH LENDER’S PRO RATA SHARE OF THE LOAN REQUESTED OR OTHERWISE MADE ON
SUCH DAY AND AGENT MAY, IN ITS DISCRETION, BUT SHALL NOT BE OBLIGATED TO, CAUSE
A CORRESPONDING AMOUNT TO BE MADE AVAILABLE TO OR FOR THE BENEFIT OF SUCH
BORROWER ON SUCH DAY. IF AGENT MAKES SUCH CORRESPONDING AMOUNT AVAILABLE TO A
BORROWER AND SUCH CORRESPONDING AMOUNT IS NOT IN FACT MADE AVAILABLE TO AGENT BY
SUCH LENDER, AGENT SHALL BE ENTITLED TO RECOVER SUCH CORRESPONDING AMOUNT ON
DEMAND FROM SUCH LENDER TOGETHER WITH INTEREST THEREON FOR EACH DAY FROM THE
DATE SUCH PAYMENT WAS DUE UNTIL THE DATE SUCH AMOUNT IS PAID TO AGENT AT THE
FEDERAL FUNDS RATE FOR EACH DAY DURING SUCH PERIOD (AS PUBLISHED BY THE FEDERAL
RESERVE BANK OF NEW YORK OR AT AGENT’S OPTION BASED ON THE ARITHMETIC MEAN
DETERMINED BY AGENT OF THE RATES FOR THE LAST TRANSACTION IN OVERNIGHT FEDERAL
FUNDS ARRANGED PRIOR TO 9:00 A.M. (CHICAGO, ILLINOIS TIME) ON THAT DAY BY EACH
OF THE THREE LEADING BROKERS OF FEDERAL FUNDS TRANSACTIONS IN CHICAGO, ILLINOIS
SELECTED BY AGENT) AND IF SUCH AMOUNTS ARE NOT PAID WITHIN THREE (3) DAYS OF
AGENT’S DEMAND, AT THE HIGHEST INTEREST RATE PROVIDED FOR IN SECTION 3.1 HEREOF
APPLICABLE TO PRIME RATE LOANS. DURING THE PERIOD IN WHICH SUCH LENDER HAS NOT
PAID SUCH CORRESPONDING AMOUNT TO AGENT, NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS,
THE AMOUNT SO ADVANCED BY AGENT TO OR FOR THE BENEFIT OF ANY BORROWER SHALL, FOR
ALL PURPOSES HEREOF, BE A LOAN MADE BY AGENT FOR ITS OWN ACCOUNT. UPON ANY SUCH
FAILURE BY A LENDER TO PAY AGENT, AGENT SHALL PROMPTLY THEREAFTER NOTIFY
ADMINISTRATIVE BORROWER OF SUCH FAILURE AND BORROWERS SHALL PAY SUCH
CORRESPONDING AMOUNT TO AGENT FOR ITS OWN ACCOUNT WITHIN FIVE (5) BUSINESS DAYS
OF ADMINISTRATIVE BORROWER’S RECEIPT OF SUCH NOTICE. A LENDER WHO FAILS TO PAY
AGENT ITS PRO RATA SHARE OF ANY LOANS MADE AVAILABLE BY THE AGENT

 

62

--------------------------------------------------------------------------------

 

ON SUCH LENDER’S BEHALF, OR ANY LENDER WHO FAILS TO PAY ANY OTHER AMOUNT OWING
BY IT TO AGENT, IS A “DEFAULTING LENDER”. AGENT SHALL NOT BE OBLIGATED TO
TRANSFER TO A DEFAULTING LENDER ANY PAYMENTS RECEIVED BY AGENT FOR THE
DEFAULTING LENDER’S BENEFIT, NOR SHALL A DEFAULTING LENDER BE ENTITLED TO THE
SHARING OF ANY PAYMENTS HEREUNDER (INCLUDING ANY PRINCIPAL, INTEREST OR FEES).
AMOUNTS PAYABLE TO A DEFAULTING LENDER SHALL INSTEAD BE PAID TO OR RETAINED BY
AGENT. AGENT MAY HOLD AND, IN ITS DISCRETION, RELEND TO A BORROWER THE AMOUNT OF
ALL SUCH PAYMENTS RECEIVED OR RETAINED BY IT FOR THE ACCOUNT OF SUCH DEFAULTING
LENDER. FOR PURPOSES OF VOTING OR CONSENTING TO MATTERS WITH RESPECT TO THIS
AGREEMENT AND THE OTHER FINANCING AGREEMENTS AND DETERMINING PRO RATA SHARES,
SUCH DEFAULTING LENDER SHALL BE DEEMED NOT TO BE A “LENDER” AND SUCH LENDER’S
COMMITMENT SHALL BE DEEMED TO BE ZERO (0). THIS SECTION SHALL REMAIN EFFECTIVE
WITH RESPECT TO A DEFAULTING LENDER UNTIL SUCH DEFAULT IS CURED. THE OPERATION
OF THIS SECTION SHALL NOT BE CONSTRUED TO INCREASE OR OTHERWISE AFFECT THE
COMMITMENT OF ANY LENDER, OR RELIEVE OR EXCUSE THE PERFORMANCE BY ANY BORROWER
OR OBLIGOR OF THEIR DUTIES AND OBLIGATIONS HEREUNDER.

 

(E)           NOTHING IN THIS SECTION OR ELSEWHERE IN THIS AGREEMENT OR THE
OTHER FINANCING AGREEMENTS SHALL BE DEEMED TO REQUIRE AGENT TO ADVANCE FUNDS ON
BEHALF OF ANY LENDER OR TO RELIEVE ANY LENDER FROM ITS OBLIGATION TO FULFILL ITS
COMMITMENT HEREUNDER OR TO PREJUDICE ANY RIGHTS THAT ANY BORROWER MAY HAVE
AGAINST ANY LENDER AS A RESULT OF ANY DEFAULT BY ANY LENDER HEREUNDER IN
FULFILLING ITS COMMITMENT.

 

6.11         Obligations Several; Independent Nature of Lenders’ Rights. The
obligation of each Lender hereunder is several, and no Lender shall be
responsible for the obligation or commitment of any other Lender hereunder.
Nothing contained in this Agreement or any of the other Financing Agreements and
no action taken by the Lenders pursuant hereto or thereto shall be deemed to
constitute the Lenders to be a partnership, an association, a joint venture or
any other kind of entity. The amounts payable at any time hereunder to each
Lender shall be a separate and independent debt, and subject to Section 12.3
hereof, each Lender shall be entitled to protect and enforce its rights arising
out of this Agreement and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.

 

6.12         Bank Products. Borrowers and Guarantors, or any of their
Subsidiaries, may (but no such Person is required to) request that the Bank
Product Providers provide or arrange for such Person to obtain Bank Products
from Bank Product Providers, and each Bank Product Provider may, in its sole
discretion, provide or arrange for such Person to obtain the requested Bank
Products. This Section 6.12 shall survive the payment of the Obligations and the
termination of this Agreement. Borrowers and Guarantors and their respective
Subsidiaries acknowledge and agree that the obtaining of Bank Products from Bank
Product Providers (a) is in the sole discretion of such Bank Product Provider,
and (b) is subject to all rules and regulations of such Bank Product Provider.
Each Bank Product Provider shall be deemed a party hereto for purposes of any
reference in a Financing Agreement to the parties for whom Agent is acting,
provided, that, the rights of such Bank Product Provider hereunder and under any
of the other Financing Agreements shall consist exclusively of such Bank Product
Provider’s right to share in payments and collections out of the Collateral as
set forth herein. In connection with any such distribution of payments and
collections, Agent shall be entitled to assume that no amounts are due to any
Bank Product Provider unless such Bank Product Provider has notified Agent in
writing of any such liability owed to it as of the date of any such
distribution.

 

6.13        Taxes

 

63

--------------------------------------------------------------------------------

 

(a)           Any and all payments by any Borrower or Guarantor hereunder or
under the other Financing Agreements shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings imposed by any Governmental Authority, and all
liabilities with respect thereto, excluding (x) taxes imposed on (or measured
by) the net income or franchise taxes of Agent or any Lender by the jurisdiction
in which such Person is organized or has its principal office or, in the case of
any Lender, by the jurisdiction in which its applicable lending office is
located or (y) any branch profits taxes imposed by the United States of America
or any other Governmental Authority (all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities, collectively or
individually, “Taxes”). If any Borrower or Guarantor shall be required to deduct
any Taxes from or in respect of any sum payable hereunder or under any other
Financing Agreement to Agent or any Lender, (i) the sum payable shall be
increased by the amount (an “additional amount”) necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 6.13) Agent or such Lender shall receive an amount
equal to the sum it would have received had no such deductions been made, (ii)
such Borrower or Guarantor shall make such deductions and (iii) such Borrower or
Guarantor shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

 

(b)           In addition, each Borrower and Guarantor agrees to pay to the
relevant Governmental Authority in accordance with applicable law any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Financing Agreement (“Other Taxes”). Each Borrower and
Guarantor shall deliver to Agent and each Lender official receipts in respect of
any Taxes or Other Taxes payable hereunder promptly after payment of such Taxes
or Other Taxes.

 

(c)           Each Borrower and Guarantor hereby indemnifies and agrees to hold
Agent and each Lender harmless from and against Taxes and Other Taxes
(including, without limitation, Taxes and Other Taxes imposed on any amounts
payable under this Section 6.13) paid by such Person, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Such indemnification shall be
paid within 10 days from the date on which any such Person makes written demand
therefor specifying in reasonable detail the nature and amount of such Taxes or
Other Taxes, which demand shall be conclusive and binding absent manifest error.

 

(d)           (i) Each Lender that is organized under the laws of a jurisdiction
outside the United States of America (a “Non US Lender”) agrees that it shall,
no later than the date of this Agreement (or, in the case of a Lender which
becomes a party hereto pursuant to Section 13.7 hereof after the date of this
Agreement, promptly after the date upon which such Lender becomes a party
hereto) deliver to the Agent two properly completed and duly executed copies of
either United States Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY or
any subsequent versions thereof or successors thereto, in each case, claiming
complete exemption from, or reduced rate of, United States Federal withholding
tax and payments of interest hereunder. In addition, in the case of a Non US
Lender claiming exemption from U.S. Federal withholding tax under Section 871(h)
or 881(c) of the Internal Revenue Code, such Non US Lender hereby represents to
the Agent and the Borrower that such Non US Lender is not a bank for purposes of
Section 881(c) of the Internal Revenue Code, is not a 10 percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of any
Borrower and

 

64

--------------------------------------------------------------------------------

 

is not a controlled foreign corporation related to any Borrower (within the
meaning of Section 864(d)(4) of the Internal Revenue Code), and such Non US
Lender agrees that it shall promptly notify the Agent in the event any such
representation is no longer accurate. Such forms shall be delivered by each Non
US Lender on or before the date it becomes a party to this Agreement and on or
before the date, if any, such Non US Lender changes its applicable lending
office by designating a different lending office (a “New Lending Office”). In
addition, each Non US Lender shall deliver such forms within 20 days after
receipt of a written request therefor from Agent or the assigning Lender, as
applicable. Notwithstanding any other provision of this Section 6.13, a Non US
Lender shall not be required to deliver any form pursuant to this Section 6.13
that such Non US Lender is not legally able to deliver. Upon the Administrative
Borrower’s written request, Agent shall deliver to the Administrative Borrower
all such forms received by Agent to the date of such written request.

 

(ii)           Each Lender that is organized under the laws of a jurisdiction
inside the United States of America shall deliver to Agent  two properly
completed and duly executed copies of U.S. Internal Revenue Service Form W-9 (or
any successor form thereto) certifying that such Lender is exempt from U.S.
backup withholding tax. Such forms shall be delivered by each such Lender on or
before the date it becomes a party to this Agreement and thereafter within 20
days after receipt of a written request therefor from any Agent. Upon
Administrative Borrower’s written request, Agent shall deliver to Administrative
Borrower all such forms received by Agent to the date of such written request.
Notwithstanding any other provision of this Section 6.13, a Lender described in
this Section 6.13 shall not be required to deliver any form pursuant to this
Section 6.13 that such Lender is not legally able to deliver.

 

(e)           Notwithstanding anything contained herein to the contrary,
Borrowers and Guarantors shall not be required to indemnify any Non US Lender,
or pay any additional amounts to any Non US Lender, in respect of U.S. Federal
withholding tax pursuant to this Agreement or any other Financing Agreement to
the extent that (i) the obligation to withhold amounts with respect to U.S.
Federal withholding tax existed on the date such Non US Lender became a party to
this Agreement or, with respect to payments to a New Lending Office, the date
such Non US Lender designated such New Lending Office with respect to a
Revolving Loan; provided, however that this clause (i) shall not apply to the
extent the indemnity payment or additional amounts any assignee or transferee of
any Lender, or any Lender through a New Lending Office, would be entitled to
receive (without regard to this clause (i)) do not exceed the indemnity payment
or additional amounts that the person making the assignment or transfer to such
assignee or transferee, or such Lender making the designation of such New
Lending Office, would have been entitled to receive in the absence of such
assignment, transfer or designation, or (ii) the obligation to pay such
additional amounts would not have arisen but for a failure by such Non US Lender
to comply with the provisions of clause (d) above (irrespective of such Non US
Lender’s legal ability to so comply). In addition, the Borrowers and Guarantors
shall not be required to indemnify or pay any additional amounts in respect of
U.S. backup withholding tax to any Lender pursuant to this Agreement or any
other Financing Agreement to the extent the obligation to pay such additional
amounts would not have arisen but for a failure by such Lender to comply with
the provisions of this Section 6.13 (irrespective of such Lender’s legal ability
to so comply).

 

(f)            Agent or any Lender claiming any indemnity payment or additional
payment amounts payable pursuant to this Section 6.13 shall use reasonable
efforts (consistent

 

65

--------------------------------------------------------------------------------

 

with legal and regulatory restrictions) to file any certificate or document
reasonably requested in writing by Administrative Borrower or to change the
jurisdiction of its applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any such indemnity
payment or additional amount which may thereafter accrue, would not require
Agent or such Lender to disclose any information Agent or such Lender deems
confidential and would not, in the sole determination of Agent or such Lender,
be otherwise disadvantageous to Agent or such Lender.

 

(g)           If Agent or any Lender determines, in its sole discretion, that it
has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by any Borrower or Guarantor pursuant to this Section or with
respect to which any Borrower or Guarantor has paid additional amounts pursuant
to this Section, it shall pay to such Borrower or Guarantor an amount equal to
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by such Borrower or Guarantor under this Section with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of Agent or such 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 Borrowers and Guarantors shall, promptly
upon the request of Agent or any such Lender, repay the amount paid over to any
Borrower or Guarantor (plus any penalties, interest or other charges imposed by
the relevant Governmental Authority) to Agent or any such Lender in the event
Agent or any such Lender is required to repay such refund to such Governmental
Authority. This paragraph shall not be construed to require Agent or any Lender
to make available its tax returns (or any other information relating to its
taxes that it deems confidential) to any Borrower, Guarantor, or any other
Person.

 

(h)           The obligations of Borrowers and Guarantors under this Section
6.13 shall survive the termination of this Agreement and the payment of the
Obligations.

 

SECTION 7.           COLLATERAL REPORTING AND COVENANTS

 

7.1           Collateral Reporting. (a)  Borrowers shall provide Agent with the
following documents in a form satisfactory to Agent:

 

(I)            AS SOON AS POSSIBLE AFTER THE END OF EACH MONTH (BUT IN ANY EVENT
WITHIN FIFTEEN (15) BUSINESS DAYS AFTER THE END THEREOF OR, SOLELY IN THE CASE
OF EACH MONTH IN 2007, WITHIN TWENTY (20) BUSINESS DAYS AFTER THE END THEREOF),
ON A MONTHLY BASIS OR MORE FREQUENTLY AS AGENT MAY REQUEST IF AN EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING OR A COMPLIANCE PERIOD EXISTS, (A)
GENERAL LEDGER INVENTORY REPORTS WITH RESPECT TO SUCH INVENTORY OR, TO THE
EXTENT AVAILABLE, PERPETUAL INVENTORY REPORTS WITH RESPECT TO SUCH INVENTORY,
(B) INVENTORY REPORTS BY LOCATION AND CATEGORY (WITH THE AMOUNTS AND VALUE OF
PERISHABLE INVENTORY SPECIFIED AND INCLUDING THE AMOUNTS OF INVENTORY AND THE
VALUE THEREOF AT PREMISES OF WAREHOUSES, PROCESSORS OR OTHER THIRD PARTIES
EXCLUDING LEASED LOCATIONS), (C) AGINGS OF ACCOUNTS RECEIVABLE, (D) ACCOUNTS
PAYABLE REPORTS (AND INCLUDING INFORMATION INDICATING THE AMOUNTS OWING TO
OWNERS AND LESSORS OF LEASED PREMISES, WAREHOUSES, AND OTHER THIRD PARTIES FROM
TIME TO TIME IN POSSESSION OF ANY COLLATERAL), (E) A BORROWING BASE CERTIFICATE
SETTING FORTH ADMINISTRATIVE BORROWER’S CALCULATION OF THE REVOLVING LOANS AND
LETTER OF CREDIT ACCOMMODATIONS AVAILABLE TO BORROWERS PURSUANT TO THE TERMS AND
CONDITIONS CONTAINED HEREIN AS OF THE LAST DAY OF THE

 

66

--------------------------------------------------------------------------------

 

IMMEDIATELY PRECEDING PERIOD, DULY COMPLETED AND EXECUTED BY AN AUTHORIZED
OFFICER OF ADMINISTRATIVE BORROWER, TOGETHER WITH ALL SCHEDULES REQUIRED
PURSUANT TO THE TERMS OF THE BORROWING BASE CERTIFICATE DULY COMPLETED;

 

(II)           AS SOON AS POSSIBLE AFTER THE END OF EACH MONTH (BUT IN ANY EVENT
FIFTEEN (15) BUSINESS DAYS AFTER THE END THEREOF OR, SOLELY IN THE CASE OF EACH
MONTH IN 2007, WITHIN TWENTY (20) BUSINESS DAYS AFTER THE END THEREOF), ON
MONTHLY A BASIS OR MORE FREQUENTLY AS AGENT MAY REQUEST IF AN EVENT OF DEFAULT
HAS OCCURRED AND IS CONTINUING OR A COMPLIANCE PERIOD EXISTS, IN EACH CASE
CERTIFIED BY AN AUTHORIZED OFFICER OF ADMINISTRATIVE BORROWER AS TRUE AND
CORRECT: (A) A STATEMENT CONFIRMING THE PAYMENT OF RENT AND OTHER AMOUNTS DUE TO
OWNERS AND LESSORS OF REAL PROPERTY USED BY ANY BORROWER OR GUARANTOR IN THE
IMMEDIATELY PRECEDING MONTH, (B) THE ADDRESSES OF ALL NEW RETAIL STORE LOCATIONS
AND OTHER NEW LOCATIONS (INCLUDING NEW WAREHOUSE LOCATIONS) OF BORROWERS AND
GUARANTORS OPENED AND EXISTING RETAIL STORE LOCATIONS CLOSED OR SOLD, IN EACH
CASE SINCE THE DATE OF THE MOST RECENT CERTIFICATE DELIVERED TO AGENT CONTAINING
THE INFORMATION REQUIRED UNDER THIS CLAUSE, AND (C) A REPORT OF ANY NEW DEPOSIT
ACCOUNT ESTABLISHED OR USED BY ANY BORROWER OR GUARANTOR WITH ANY BANK OR OTHER
FINANCIAL INSTITUTION, INCLUDING THE BORROWER OR GUARANTOR IN WHOSE NAME THE
ACCOUNT IS MAINTAINED, THE ACCOUNT NUMBER, THE NAME AND ADDRESS OF THE FINANCIAL
INSTITUTION AT WHICH SUCH ACCOUNT IS MAINTAINED, THE PURPOSE OF SUCH ACCOUNT
AND, IF ANY, THE AMOUNT HELD IN SUCH ACCOUNT ON OR ABOUT THE DATE OF SUCH
REPORT; AND

 

(III)          SUCH OTHER REPORTS, DOCUMENTS AND INFORMATION AS TO THE
COLLATERAL AS AGENT SHALL REASONABLY REQUEST FROM TIME TO TIME.

 

(B)           IF ANY BORROWER’S OR GUARANTOR’S RECORDS OR REPORTS OF THE
COLLATERAL ARE PREPARED OR MAINTAINED BY AN ACCOUNTING SERVICE, CONTRACTOR,
SHIPPER OR OTHER AGENT, SUCH BORROWER AND GUARANTOR HEREBY IRREVOCABLY
AUTHORIZES SUCH SERVICE, CONTRACTOR, SHIPPER OR AGENT TO DELIVER SUCH RECORDS,
REPORTS, AND RELATED DOCUMENTS TO AGENT AND TO FOLLOW AGENT’S INSTRUCTIONS WITH
RESPECT TO FURTHER SERVICES AT ANY TIME THAT AN EVENT OF DEFAULT HAS OCCURRED
AND IS CONTINUING.

 

(C)           NOTHING CONTAINED IN ANY BORROWING BASE CERTIFICATE SHALL BE
DEEMED TO LIMIT, IMPAIR OR OTHERWISE AFFECT THE RIGHTS OF AGENT CONTAINED HEREIN
AND IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE CALCULATION OF THE
REVOLVING LOANS AND LETTER OF CREDIT ACCOMMODATIONS AVAILABLE TO BORROWERS AS
SET FORTH IN ANY BORROWING BASE CERTIFICATE AND AS DETERMINED BY AGENT IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, THE GOOD FAITH DETERMINATION OF
AGENT SHALL GOVERN AND BE CONCLUSIVE AND BINDING UPON BORROWERS. WITHOUT
LIMITING THE FOREGOING, BORROWERS SHALL FURNISH TO AGENT ANY INFORMATION WHICH
AGENT MAY REASONABLY REQUEST REGARDING THE DETERMINATION AND CALCULATION OF ANY
OF THE AMOUNTS SET FORTH IN THE BORROWING BASE CERTIFICATE.

 

7.2          Accounts Covenants.

 

(A)           BORROWERS SHALL NOTIFY AGENT PROMPTLY OF: (I) ANY MATERIAL DELAY
IN ANY BORROWER’S PERFORMANCE OF ANY OF ITS MATERIAL OBLIGATIONS TO ANY ACCOUNT
DEBTOR, CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR WHICH OWES BORROWERS MORE
THAN $750,000 OR THE ASSERTION OF ANY MATERIAL CLAIMS, OFFSETS, DEFENSES OR
COUNTERCLAIMS BY ANY ACCOUNT DEBTOR, CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR
WHICH OWES BORROWERS MORE THAN $750,000, OR ANY MATERIAL DISPUTES WITH ANY
ACCOUNT DEBTOR, CREDIT CARD ISSUERS OR CREDIT CARD PROCESSOR WHICH OWES
BORROWERS

 

67

--------------------------------------------------------------------------------

 

MORE THAN $750,000, OR ANY SETTLEMENT, ADJUSTMENT OR COMPROMISE THEREOF, (II)
ALL MATERIAL ADVERSE INFORMATION KNOWN TO ANY BORROWER OR GUARANTOR RELATING TO
THE FINANCIAL CONDITION OF ANY ACCOUNT DEBTOR, CREDIT CARD ISSUERS OR CREDIT
CARD PROCESSOR  WHICH OWES BORROWERS MORE THAN $750,000 AND (III) ANY EVENT OR
CIRCUMSTANCE WHICH, TO THE BEST OF ANY BORROWER’S OR GUARANTOR’S KNOWLEDGE,
WOULD CAUSE AGENT TO CONSIDER ANY THEN EXISTING ACCOUNTS AS NO LONGER
CONSTITUTING ELIGIBLE ACCOUNTS OR ELIGIBLE CREDIT CARD RECEIVABLES. NO CREDIT,
DISCOUNT, ALLOWANCE OR EXTENSION OR AGREEMENT FOR ANY OF THE FOREGOING SHALL BE
GRANTED TO ANY ACCOUNT DEBTOR, CREDIT CARD ISSUERS OR CREDIT CARD PROCESSOR
WITHOUT AGENT’S CONSENT, EXCEPT IN THE ORDINARY COURSE OF A BORROWER’S OR
GUARANTOR’S BUSINESS IN ACCORDANCE WITH SUCH BORROWER’S OR GUARANTOR’S EXISTING
PRACTICES AND POLICIES AND EXCEPT AS SET FORTH IN THE SCHEDULES DELIVERED TO
AGENT PURSUANT TO SECTION 7.1(A) ABOVE. SO LONG AS NO EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING, BORROWERS AND GUARANTORS SHALL SETTLE, ADJUST OR
COMPROMISE ANY CLAIM, OFFSET, COUNTERCLAIM OR DISPUTE WITH ANY ACCOUNT DEBTOR,
CREDIT CARD ISSUERS OR CREDIT CARD PROCESSOR. AT ANY TIME THAT AN EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING, AGENT SHALL, AT ITS OPTION, HAVE THE
EXCLUSIVE RIGHT TO SETTLE, ADJUST OR COMPROMISE ANY CLAIM, OFFSET, COUNTERCLAIM
OR DISPUTE WITH ACCOUNT DEBTORS OR GRANT ANY CREDITS, DISCOUNTS OR ALLOWANCES.

 

(B)           WITH RESPECT TO EACH ACCOUNT: (I) THE AMOUNTS SHOWN ON ANY INVOICE
DELIVERED TO AGENT OR SCHEDULE THEREOF DELIVERED TO AGENT SHALL BE TRUE AND
COMPLETE IN ALL MATERIAL RESPECTS, (II) NO PAYMENTS SHALL BE MADE THEREON EXCEPT
PAYMENTS PROMPTLY REMITTED IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, (III)
NO CREDIT, DISCOUNT, ALLOWANCE OR EXTENSION OR AGREEMENT FOR ANY OF THE
FOREGOING SHALL BE GRANTED TO ANY ACCOUNT DEBTOR, CREDIT CARD ISSUER OR CREDIT
CARD PROCESSOR EXCEPT AS REPORTED TO AGENT IN ACCORDANCE WITH THIS AGREEMENT AND
EXCEPT FOR CREDITS, DISCOUNTS, ALLOWANCES OR EXTENSIONS MADE OR GIVEN IN THE
ORDINARY COURSE OF EACH BORROWER’S BUSINESS IN ACCORDANCE WITH SUCH BORROWER’S
EXISTING PRACTICES AND POLICIES, (IV) WHICH CONSISTS OF ELIGIBLE ACCOUNTS THERE
SHALL BE NO SETOFFS, DEDUCTIONS, CONTRAS, DEFENSES, COUNTERCLAIMS OR DISPUTES
EXISTING OR ASSERTED WITH RESPECT THERETO EXCEPT AS REPORTED TO AGENT IN
ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, (V) NONE OF THE TRANSACTIONS GIVING
RISE THERETO WILL VIOLATE ANY APPLICABLE FOREIGN, FEDERAL, STATE OR LOCAL LAWS
OR REGULATIONS, ALL DOCUMENTATION RELATING THERETO WILL BE LEGALLY SUFFICIENT
UNDER SUCH LAWS AND REGULATIONS AND ALL SUCH DOCUMENTATION WILL BE LEGALLY
ENFORCEABLE IN ACCORDANCE WITH ITS TERMS.

 

(C)           BORROWERS SHALL NOTIFY AGENT PROMPTLY OF:  (I) ANY NOTICE OF A
MATERIAL DEFAULT BY ANY BORROWER OR GUARANTOR UNDER ANY OF THE CREDIT CARD
AGREEMENTS OR OF ANY DEFAULT WHICH HAS A REASONABLE LIKELIHOOD OF RESULTING IN
THE CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR CEASING TO MAKE PAYMENTS OR
SUSPENDING PAYMENTS TO ANY BORROWER OR GUARANTOR, (II) ANY NOTICE FROM ANY
CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR THAT SUCH PERSON IS CEASING OR
SUSPENDING, OR WILL CEASE OR SUSPEND, ANY PRESENT OR FUTURE PAYMENTS DUE OR TO
BECOME DUE TO ANY BORROWER OR GUARANTOR FROM SUCH PERSON, OR THAT SUCH PERSON IS
TERMINATING OR WILL TERMINATE ANY OF THE CREDIT CARD AGREEMENTS, AND (III) THE
FAILURE OF ANY BORROWER OR GUARANTOR TO COMPLY WITH ANY MATERIAL TERMS OF THE
CREDIT CARD AGREEMENTS OR ANY TERMS THEREOF WHICH HAS A REASONABLE LIKELIHOOD OF
RESULTING IN THE CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR CEASING OR
SUSPENDING PAYMENTS TO ANY BORROWER OR GUARANTOR.

 

(D)           AGENT SHALL HAVE THE RIGHT, IN AGENT’S NAME (AT ANY TIME DURING
WHICH AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING) OR IN THE NAME
OF A NOMINEE OF AGENT (AT ALL OTHER TIMES), TO VERIFY THE VALIDITY, AMOUNT OR
ANY OTHER MATTER RELATING TO ANY RECEIVABLES OR OTHER COLLATERAL, BY MAIL,
TELEPHONE, FACSIMILE TRANSMISSION OR OTHERWISE.

 

68

--------------------------------------------------------------------------------

 

7.3           Inventory Covenants. With respect to the Inventory: (a) each
Borrower and Guarantor shall at all times maintain inventory records reasonably
satisfactory to Agent in substantially the same manner as being maintained on
the date hereof (subject, however, to the terms of clause (o) of the definition
of Eligible Inventory), keeping correct and accurate records itemizing and
describing the kind, type, quality and quantity of Inventory and such Borrower’s
or Guarantor’s cost therefor; (b) Borrowers and Guarantors shall conduct a
physical count of the Inventory no less frequently than is consistent with the
past practices of Borrowers and Guarantors, but at any time or times as Agent
may request upon the occurrence and during the continuance of an Event of
Default, and following such physical inventory shall, promptly upon Agent’s
request, supply Agent with a report in the form and with such specificity as may
be satisfactory to Agent concerning such physical count; (c) Borrowers and
Guarantors shall not remove any Inventory from the locations set forth or
permitted herein, without the prior written consent of Agent, except for sales
of Inventory in the ordinary course of its business and except to move Inventory
directly from one location set forth or permitted herein to another such
location and except for Inventory shipped from the manufacturer or distributor
thereof to such Borrower or Guarantor which is in transit to the locations set
forth or permitted herein; (d) upon Agent’s request, Borrowers shall, at their
expense, no more than one (1) time in any twelve (12) month period, but at any
time or times as Agent may request at the expense of Agent or at the expense of
Borrowers upon the occurrence and during the continuance of an Event of Default,
deliver or cause to be delivered to Agent written appraisals as to the Inventory
in form, scope and methodology reasonably acceptable to Agent and by an
appraiser reasonably acceptable to Agent, addressed to Agent and Lenders and
upon which Agent and Lenders are expressly permitted to rely; (e) Borrowers and
Guarantors shall produce, use, store and maintain the Inventory with all
reasonable care and caution and in accordance with applicable standards of any
insurance and in conformity with applicable laws (including the requirements of
the Federal Fair Labor Standards Act of 1938, as amended and all rules,
regulations and orders related thereto); (f) none of the Inventory or other
Collateral constitutes farm products or the proceeds thereof; (g) each Borrower
and Guarantor assumes all responsibility and liability arising from or relating
to the production, use, sale or other disposition of the Inventory, (h)
Borrowers and Guarantors shall not sell Inventory to any customer on approval,
or any other basis which entitles the customer to return or may obligate any
Borrower or Guarantor to repurchase such Inventory, except for the right of
return given to customers of such Borrower or Guarantor in the ordinary course
of the business of such Borrower or Guarantor in accordance with the then
current return policy of such Borrower or Guarantor; (i) Borrowers and
Guarantors shall keep the Inventory in good and marketable condition; and (j)
Borrowers and Guarantors shall not, without prior written notice to Agent or the
specific identification of such Inventory in a report with respect thereto
provided by Administrative Borrower to Agent pursuant to Section 7.1(a) hereof,
acquire or accept any Inventory on consignment or approval.

 

7.4           Equipment and Real Property Covenants . With respect to the
Equipment and Real Property: (a) upon Agent’s request at any time that an Event
of Default has occurred and is continuing, Borrowers and Guarantors shall, at
their expense, deliver or cause to be delivered to Agent written appraisals as
to the Equipment and/or the Real Property in form, scope and methodology
reasonably acceptable to Agent and by an appraiser reasonably acceptable to
Agent, addressed to Agent and upon which Agent is expressly permitted to rely;
provided, that, in no event shall Borrowers and Guarantors be liable for the
expense of (i) any appraisal of Equipment pursuant to this Section 7.4 prior to
the date on which the Equipment Availability Conditions have been satisfied or
(ii) any appraisal of Real Property pursuant to this Section 7.4

 

69

--------------------------------------------------------------------------------

 

prior to the date on which the Real Property Availability Conditions have been
satisfied; (b) Borrowers and Guarantors shall keep the Equipment in good order
and repair (ordinary wear and tear excepted); (c) Borrowers and Guarantors shall
use the Equipment and Real Property with all reasonable care and caution and in
accordance with applicable standards of any insurance and in conformity with all
applicable laws; (d) the Equipment is and shall be used in the business of
Borrowers and Guarantors and not for personal, family, household or farming use;
(e) Borrowers and Guarantors shall not remove any Equipment from the locations
set forth or permitted herein, except to the extent necessary to have any
Equipment repaired or maintained in the ordinary course of its business or to
move Equipment directly from one location set forth or permitted herein to
another such location and except for the movement of motor vehicles used by or
for the benefit of such Borrower or Guarantor in the ordinary course of
business; and (f) each Borrower and Guarantor assumes all responsibility and
liability arising from the use of the Equipment and Real Property.

 

7.5           Power of Attorney. Each Borrower and Guarantor hereby irrevocably
designates and appoints Agent (and all persons designated by Agent) as such
Borrower’s and Guarantor’s true and lawful attorney-in-fact, and authorizes
Agent, in such Borrower’s, Guarantor’s or Agent’s name, to: (a) at any time an
Event of Default has occurred and is continuing (i) demand payment on
Receivables or other Collateral, (ii) enforce payment of Receivables by legal
proceedings or otherwise, (iii) exercise all of such Borrower’s or Guarantor’s
rights and remedies to collect any Receivable or other Collateral, (iv) sell or
assign any Receivable upon such terms, for such amount and at such time or times
as the Agent deems advisable, (v) settle, adjust, compromise, extend or renew an
Account, (vi) discharge and release any Receivable, (vii) prepare, file and sign
such Borrower’s or Guarantor’s name on any proof of claim in bankruptcy or other
similar document against an account debtor or other obligor in respect of any
Receivables or other Collateral, (viii) notify the post office authorities to
change the address for delivery of remittances from account debtors or other
obligors in respect of Receivables or other proceeds of Collateral to an address
designated by Agent, and open and dispose of all mail addressed to such Borrower
or Guarantor and handle and store all mail relating to the Collateral; and (ix)
do all acts and things which are necessary, in Agent’s determination, to fulfill
such Borrower’s or Guarantor’s obligations under this Agreement and the other
Financing Agreements and (b) at any time to (i) take control in any manner of
any item of payment in respect of Receivables or constituting Collateral if a
Cash Dominion Period exists or any items or payment constituting Collateral is
otherwise received in or for deposit in the Blocked Accounts or otherwise
received by Agent or any Lender, (ii) if a Cash Dominion Period exists, have
access to any lockbox or postal box into which remittances from account debtors
or other obligors in respect of Receivables or other proceeds of Collateral are
sent or received, (iii) if a Cash Dominion Period exists, endorse such
Borrower’s or Guarantor’s name upon any items of payment in respect of
Receivables or constituting Collateral or otherwise received by Agent and any
Lender and deposit the same in Agent’s account for application to the
Obligations, (iv) endorse such Borrower’s or Guarantor’s name upon any chattel
paper, document, instrument, invoice, or similar document or agreement relating
to any Receivable or any goods pertaining thereto or any other Collateral,
including any warehouse or other receipts, or bills of lading and other
negotiable or non-negotiable documents, (v) clear Inventory the purchase of
which was financed with Letter of Credit Accommodations through U.S. Customs or
foreign export control authorities in such Borrower’s or Guarantor’s name,
Agent’s name or the name of Agent’s designee, and to sign and deliver to customs
officials powers of attorney in such Borrower’s or Guarantor’s name for such
purpose, and to complete in such Borrower’s or Guarantor’s or Agent’s

 

70

--------------------------------------------------------------------------------

 

name, any order, sale or transaction, obtain the necessary documents in
connection therewith and collect the proceeds thereof, and (vi) sign such
Borrower’s or Guarantor’s name on any verification of Receivables and notices
thereof to account debtors or any secondary obligors or other obligors in
respect thereof. Each Borrower and Guarantor hereby releases Agent and Lenders
and their respective officers, employees and designees from any liabilities
arising from any act or acts under this power of attorney and in furtherance
thereof, whether of omission or commission, except as a result of Agent’s or any
Lender’ s own gross negligence or willful misconduct as determined pursuant to a
final non-appealable order of a court of competent jurisdiction.

 

7.6           Right to Cure. Agent may, at its option, upon not less than ten
(10) days prior notice to Administrative Borrower (except that no such prior
notice shall be required in the case of exigent circumstances as determined by
Agent in good faith), (a) cure any material default by any Borrower or Guarantor
under any material agreement with a third party that affects the Collateral, its
value or the ability of Agent to collect, sell or otherwise dispose of the
Collateral or the rights and remedies of Agent or any Lender therein or the
ability of any Borrower or Guarantor to perform its obligations hereunder or
under any of the other Financing Agreements, (b) pay or bond on appeal any
material judgment entered against any Borrower or Guarantor, (c) discharge
taxes, liens, security interests or other encumbrances (other than liens,
security interests and encumbrances permitted under Section 9.8 hereof) at any
time levied on or existing with respect to the Collateral and pay any amount,
incur any expense or perform any act which, in Agent’s good faith judgment, is
necessary or appropriate to preserve, protect, insure or maintain the Collateral
and the rights of Agent and Lenders with respect thereto. Agent may add any
amounts so expended to the Obligations and charge any Borrower’s account
therefor, such amounts to be repayable by Borrowers on demand. Agent and Lenders
shall be under no obligation to effect such cure, payment or bonding and shall
not, by doing so, be deemed to have assumed any obligation or liability of any
Borrower or Guarantor. Any payment made or other action taken by Agent or any
Lender under this Section shall be without prejudice to any right to assert an
Event of Default hereunder and to proceed accordingly.

 

7.7           Access to Premises. From time to time as requested by Agent, at
the cost and expense of Borrowers, (a) Agent or its designee shall have complete
access to all of each Borrower’s and Guarantor’s premises during normal business
hours and after notice to Parent, or at any time and without notice to
Administrative Borrower if an Event of Default has occurred and is continuing,
for the purposes of inspecting, verifying and auditing the Collateral and all of
each Borrower’s and Guarantor ‘s books and records, including the Records,
provided, that, (i) unless a Compliance Period exists, Agent shall not conduct
such an inspection, verification or audit more than one (1) time during any
calendar year and (ii) unless an Event of Default has occurred and is continuing
or the expense of such inspection, verification or audit is borne by Agent,
Agent shall not conduct such an inspection, verification or audit more than two
(2) times during any calendar year, and (b) each Borrower and Guarantor shall
promptly furnish to Agent such copies of such books and records or extracts
therefrom as Agent may request, and Agent or any Lender or Agent’s designee may
use during normal business hours such of any Borrower’s and Guarantor’s
personnel, equipment, supplies and premises as may be reasonably necessary for
the foregoing and if an Event of Default has occurred and is continuing for the
collection of Receivables and realization of other Collateral.

 

SECTION 8.           REPRESENTATIONS AND WARRANTIES

 

71

--------------------------------------------------------------------------------

 

Each Borrower and Guarantor hereby represents and warrants to Agent and Lenders
the following (which shall survive the execution and delivery of this
Agreement), the truth and accuracy of which are a continuing condition of the
making of Loans and providing Letter of Credit Accommodations to Borrowers:

 

8.1           Existence, Power and Authority. Each Borrower and Guarantor is a
corporation or limited liability company duly organized and in good standing
under the laws of its state of incorporation or formation and is duly qualified
as a foreign corporation or limited liability company and in good standing in
all states or other jurisdictions where the nature and extent of the business
transacted by it or the ownership of assets makes such qualification necessary,
except for those jurisdictions in which the failure to so qualify would not have
a material adverse effect on such Borrower’s or Guarantor’ s financial
condition, results of operation or business or the rights of Agent in or to any
of the Collateral. The execution, delivery and performance of this Agreement,
the other Financing Agreements and the transactions contemplated hereunder and
thereunder (a) are all within each Borrower’s and Guarantor’s corporate powers,
(b) have been duly authorized, (c) are not in contravention the terms of any
Borrower’s or Guarantor’s certificate of incorporation or formation, by-laws,
operating agreement or other organizational documentation, (d) are not in
contravention in any material respect of any law or any indenture, agreement or
undertaking to which any Borrower or Guarantor is a party or by which any
Borrower or Guarantor or its property are bound and (e) will not result in the
creation or imposition of, or require or give rise to any obligation to grant,
any lien, security interest, charge or other encumbrance upon any property of
any Borrower or Guarantor, except for the creation of a lien in favor of Agent.
This Agreement and the other Financing Agreements to which any Borrower or
Guarantor is a party constitute legal, valid and binding obligations of such
Borrower and Guarantor enforceable in accordance with their respective terms
,except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar law limiting creditors’ rights generally
and by general equitable principles.

 

8.2           Name; State of Organization; Chief Executive Office; Collateral
Locations.

 

(A)           AS OF THE DATE HEREOF, THE EXACT LEGAL NAME OF EACH BORROWER AND
GUARANTOR IS AS SET FORTH ON THE SIGNATURE PAGE OF THIS AGREEMENT AND IN THE
INFORMATION CERTIFICATE. NO BORROWER OR GUARANTOR HAS, DURING THE FIVE YEARS
PRIOR TO THE DATE OF THIS AGREEMENT, BEEN KNOWN BY OR USED ANY OTHER CORPORATE
OR FICTITIOUS NAME OR BEEN A PARTY TO ANY MERGER OR CONSOLIDATION, OR ACQUIRED
ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF ANY PERSON, OR ACQUIRED ANY OF ITS
PROPERTY OR ASSETS OUT OF THE ORDINARY COURSE OF BUSINESS, EXCEPT AS SET FORTH
IN THE INFORMATION CERTIFICATE.

 

(B)           AS OF THE DATE HEREOF, EACH BORROWER AND GUARANTOR IS AN
ORGANIZATION OF THE TYPE AND ORGANIZED IN THE JURISDICTION SET FORTH IN THE
INFORMATION CERTIFICATE. THE INFORMATION CERTIFICATE ACCURATELY SETS FORTH THE
ORGANIZATIONAL IDENTIFICATION NUMBER OF EACH BORROWER AND GUARANTOR OR
ACCURATELY STATES THAT SUCH BORROWER OR GUARANTOR HAS NONE AND ACCURATELY SETS
FORTH THE FEDERAL EMPLOYER IDENTIFICATION NUMBER OF EACH BORROWER AND GUARANTOR.

 

(C)           THE CHIEF EXECUTIVE OFFICE AND MAILING ADDRESS OF EACH BORROWER
AND GUARANTOR AND EACH BORROWER’S AND GUARANTOR’S RECORDS CONCERNING ACCOUNTS
ARE LOCATED ONLY AT THE ADDRESS IDENTIFIED AS SUCH IN SCHEDULE 8.2 TO THE
INFORMATION CERTIFICATE AND ITS ONLY OTHER PLACES OF BUSINESS AND THE ONLY OTHER
LOCATIONS OF COLLATERAL, IF ANY, ARE THE ADDRESSES SET FORTH IN SCHEDULE 8.2 TO
THE INFORMATION CERTIFICATE, SUBJECT TO THE RIGHTS OF ANY BORROWER OR GUARANTOR
TO

 

72

--------------------------------------------------------------------------------

 

ESTABLISH NEW LOCATIONS IN ACCORDANCE WITH SECTION 9.2 BELOW. THE INFORMATION
CERTIFICATE CORRECTLY IDENTIFIES ANY OF SUCH LOCATIONS WHICH ARE NOT OWNED BY A
BORROWER OR GUARANTOR AND SETS FORTH THE OWNERS AND/OR OPERATORS THEREOF.

 

8.3           Financial Statements; No Material Adverse Change. All financial
statements relating to any Borrower or Guarantor which have been or may
hereafter be delivered by any Borrower or Guarantor to Agent and Lenders have
been prepared in accordance with GAAP (except as to any interim financial
statements, to the extent such statements are subject to normal year-end
adjustments and do not include complete footnotes) and fairly present in all
material respects the financial condition and the results of operation of such
Borrower and Guarantor as at the dates and for the periods set forth therein.
Except as disclosed in any interim financial statements furnished by Borrowers
and Guarantors to Agent prior to the date of this Agreement, there has been no
act, condition or event which has had or is reasonably likely to have a Material
Adverse Effect since the date of the most recent audited financial statements of
any Borrower or Guarantor furnished by any Borrower or Guarantor to Agent prior
to the date of this Agreement. The Petro Companies have, prior to the date
hereof and in accordance with the terms of the Petro Indenture, deposited with
the Petro Indenture Trustee a sufficient amount of cash or cash equivalents to
redeem in full the aggregate outstanding principal amount of all Indebtedness
owing under and in connection with the Petro Indenture, together with all
interest, fees, premiums and penalties owing in respect thereof, through
February 15, 2008 (the “Petro Indenture Cash Collateral”). All such Indebtedness
(including all such interest, fees, premiums and penalties) will be redeemed in
full by no later than February 15, 2008 with the proceeds of the Petro Indenture
Cash Collateral previously deposited with the Petro Indenture Trustee, at which
time all liens and security interest of the Petro Indenture Trustee on the
assets of the Petro Companies and the Capital Stock in Petro will be
automatically released and the Petro Companies will promptly instruct the Petro
Indenture Trustee to execute all such agreements and instruments and take all
such further actions as may be reasonably requested by the Petro Companies or
Agent to evidence the release of such liens and security interests.

 

8.4           Priority of Liens; Title to Properties. The security interests and
liens granted to Agent under this Agreement and the other Financing Agreements
constitute valid and perfected first priority liens and security interests in
and upon the Collateral subject only to the liens indicated on Schedule 8.4 to
the Information Certificate and the other liens permitted under Section 9.8
hereof; provided, that, the security interests and liens in the Collateral of
the Petro Companies and the Capital Stock in Petro granted under this Agreement
and the other Financing Agreements shall not constitute valid and perfected
liens and security interests in and upon such Collateral and Capital Stock until
the Petro Lien Effective Date. Each Borrower and Guarantor has good and
marketable fee simple title to or valid leasehold interests in all of its Real
Property and good, valid and merchantable title to all of its other properties
and assets subject to no liens, mortgages, pledges, security interests,
encumbrances or charges of any kind, except those granted to Agent and such
others as are specifically listed on Schedule 8.4 to the Information Certificate
or permitted under Section 9.8 hereof.

 

8.5           Tax Returns. Each Borrower and Guarantor has filed, or caused to
be filed, in a timely manner all federal and other material tax returns, reports
and declarations which are required to be filed by it. All information in such
tax returns, reports and declarations is complete and accurate in all material
respects. Each Borrower and Guarantor has paid or caused to be paid all material
taxes due and payable or claimed due and payable in any assessment

 

73

--------------------------------------------------------------------------------

 

received by it, except taxes the validity of which are being contested in good
faith by appropriate proceedings diligently pursued and available to such
Borrower or Guarantor and with respect to which adequate reserves have been set
aside on its books. Adequate provision has been made for the payment of all
accrued and unpaid Federal, State, county, local, foreign and other taxes
whether or not yet due and payable and whether or not disputed.

 

8.6           Litigation. Except as set forth on Schedule 8.6 to the Information
Certificate, (a) there is no investigation by any Governmental Authority
pending, or to the best of any Borrower’s or Guarantor’s knowledge threatened,
against or affecting any Borrower or Guarantor, its or their assets or business
and (b) there is no action, suit, proceeding or claim by any Person pending, or
to the best of any Borrower’s or Guarantor’s knowledge threatened, against any
Borrower or Guarantor or its or their assets or goodwill, or against or
affecting any transactions contemplated by this Agreement, in each case, which
has had or could reasonably be expected to have a Material Adverse Effect.

 

8.7          Compliance with Other Agreements and Applicable Laws.

 

(A)           BORROWERS AND GUARANTORS ARE NOT IN DEFAULT IN ANY RESPECT UNDER,
OR IN VIOLATION IN ANY RESPECT OF THE TERMS OF, ANY AGREEMENT, CONTRACT,
INSTRUMENT, LEASE OR OTHER COMMITMENT TO WHICH IT IS A PARTY OR BY WHICH IT OR
ANY OF ITS ASSETS ARE BOUND, EXCEPT FOR SUCH DEFAULTS OR VIOLATIONS WHICH COULD
NOT BE REASONABLY EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT. BORROWERS AND
GUARANTORS ARE IN COMPLIANCE WITH THE REQUIREMENTS OF ALL APPLICABLE LAWS,
RULES, REGULATIONS AND ORDERS OF ANY GOVERNMENTAL AUTHORITY RELATING TO THEIR
RESPECTIVE BUSINESSES, INCLUDING, WITHOUT LIMITATION, THOSE SET FORTH IN OR
PROMULGATED PURSUANT TO THE OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970, AS
AMENDED, THE FAIR LABOR STANDARDS ACT OF 1938, AS AMENDED, ERISA, THE CODE, AS
AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, ENVIRONMENTAL LAWS, ALL
FEDERAL, STATE AND LOCAL STATUTES, REGULATIONS, RULES AND ORDERS RELATING TO
CONSUMER CREDIT (INCLUDING, WITHOUT LIMITATION, AS EACH HAS BEEN AMENDED, THE
TRUTH-IN-LENDING ACT, THE FAIR CREDIT BILLING ACT, THE EQUAL CREDIT OPPORTUNITY
ACT AND THE FAIR CREDIT REPORTING ACT, AND REGULATIONS, RULES AND ORDERS
PROMULGATED THEREUNDER), AND ALL FEDERAL, STATE AND LOCAL STATES, REGULATIONS,
RULES AND ORDERS PERTAINING TO SALES OF CONSUMER GOODS (INCLUDING, WITHOUT
LIMITATION, THE CONSUMER PRODUCTS SAFETY ACT OF 1972, AS AMENDED, AND THE
FEDERAL TRADE COMMISSION ACT OF 1914, AS AMENDED, AND ALL REGULATIONS, RULES AND
ORDERS PROMULGATED THEREUNDER), EXCEPT IN ANY CASE FOR SUCH NON-COMPLIANCE WHICH
COULD NOT BE REASONABLY EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(B)           BORROWERS AND GUARANTORS HAVE OBTAINED ALL PERMITS, LICENSES,
APPROVALS, CONSENTS, CERTIFICATES, ORDERS OR AUTHORIZATIONS OF ANY GOVERNMENTAL
AUTHORITY REQUIRED FOR THE LAWFUL CONDUCT OF ITS BUSINESS (THE “PERMITS”),
EXCEPT WHERE THE FAILURE TO SO OBTAIN COULD NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT. ALL OF THE PERMITS ARE VALID AND SUBSISTING AND IN FULL
FORCE AND EFFECT, EXCEPT WHERE THE FAILURE TO BE VALID, SUBSISTING OR IN FULL
FORCE AND EFFECT COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT. EXCEPT AS COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT, THERE ARE NO ACTIONS, CLAIMS OR PROCEEDINGS PENDING OR TO THE BEST OF
ANY BORROWER’S OR GUARANTOR’S KNOWLEDGE, THREATENED THAT SEEK THE REVOCATION,
CANCELLATION, SUSPENSION OR MODIFICATION OF ANY OF THE PERMITS.

 

8.8          Environmental Compliance.

 

74

--------------------------------------------------------------------------------

 

(A)           BORROWERS, GUARANTORS AND ANY SUBSIDIARY OF ANY BORROWER OR
GUARANTOR HAVE NOT GENERATED, USED, STORED, TREATED, TRANSPORTED, MANUFACTURED,
HANDLED, PRODUCED OR DISPOSED OF ANY HAZARDOUS MATERIALS, ON OR OFF ITS PREMISES
(WHETHER OR NOT OWNED BY IT) IN ANY MANNER WHICH AT ANY TIME VIOLATES ANY
APPLICABLE ENVIRONMENTAL LAW OR PERMIT, EXCEPT FOR SUCH VIOLATIONS WHICH COULD
NOT BE REASONABLY EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, AND THE OPERATIONS
OF BORROWERS, GUARANTORS AND ANY SUBSIDIARY OF ANY BORROWER OR GUARANTOR COMPLY
WITH ALL ENVIRONMENTAL LAWS AND ALL PERMITS, EXCEPT FOR SUCH NON-COMPLIANCE
WHICH COULD NOT BE REASONABLY EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(B)           THERE HAS BEEN NO INVESTIGATION BY ANY GOVERNMENTAL AUTHORITY OR
ANY PROCEEDING, COMPLAINT, ORDER, DIRECTIVE, CLAIM, CITATION OR NOTICE BY ANY
GOVERNMENTAL AUTHORITY OR ANY OTHER PERSON NOR IS ANY PENDING OR TO THE BEST OF
ANY BORROWER’S OR GUARANTOR’S KNOWLEDGE THREATENED, WITH RESPECT TO ANY
NON-COMPLIANCE WITH OR VIOLATION OF THE REQUIREMENTS OF ANY ENVIRONMENTAL LAW BY
ANY BORROWER OR GUARANTOR AND ANY SUBSIDIARY OF ANY BORROWER OR GUARANTOR OR THE
RELEASE, SPILL OR DISCHARGE, THREATENED OR ACTUAL, OF ANY HAZARDOUS MATERIAL OR
THE GENERATION, USE, STORAGE, TREATMENT, TRANSPORTATION, MANUFACTURE, HANDLING,
PRODUCTION OR DISPOSAL OF ANY HAZARDOUS MATERIALS OR ANY OTHER ENVIRONMENTAL,
HEALTH OR SAFETY MATTER, WHICH IN ANY CASE COULD BE REASONABLY EXPECTED TO HAVE
A MATERIAL ADVERSE EFFECT.

 

(C)           BORROWERS, GUARANTORS AND THEIR SUBSIDIARIES HAVE NO LIABILITY
(CONTINGENT OR OTHERWISE) IN CONNECTION WITH A RELEASE, SPILL OR DISCHARGE,
THREATENED OR ACTUAL, OF ANY HAZARDOUS MATERIALS OR THE GENERATION, USE,
STORAGE, TREATMENT, TRANSPORTATION, MANUFACTURE, HANDLING, PRODUCTION OR
DISPOSAL OF ANY HAZARDOUS MATERIALS, WHICH IN ANY CASE COULD BE REASONABLY
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(D)           BORROWERS, GUARANTORS AND THEIR SUBSIDIARIES HAVE ALL PERMITS
REQUIRED TO BE OBTAINED OR FILED IN CONNECTION WITH THE OPERATIONS OF BORROWERS
AND GUARANTORS UNDER ANY ENVIRONMENTAL LAW AND ALL OF SUCH LICENSES,
CERTIFICATES, APPROVALS OR SIMILAR AUTHORIZATIONS AND OTHER PERMITS ARE VALID
AND IN FULL FORCE AND EFFECT, EXCEPT (IN ANY CASE) WHERE SUCH FAILURE TO OBTAIN
OR FILE (OR BE VALID IN FULL FORCE AND EFFECT) COULD NOT REASONABLY BE EXPECTED
TO HAVE A MATERIAL ADVERSE EFFECT.

 

8.9          Employee Benefits.

 

(A)           EACH PLAN IS IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH THE
APPLICABLE PROVISIONS OF ERISA, THE CODE AND OTHER FEDERAL OR STATE LAW. EACH
PLAN WHICH IS INTENDED TO QUALIFY UNDER SECTION 401(A) OF THE CODE HAS RECEIVED
A FAVORABLE DETERMINATION LETTER FROM THE INTERNAL REVENUE SERVICE AND TO THE
BEST OF ANY BORROWER’S OR GUARANTOR’S KNOWLEDGE, NOTHING HAS OCCURRED WHICH
WOULD CAUSE THE LOSS OF SUCH QUALIFICATION. EACH BORROWER AND ITS ERISA
AFFILIATES HAVE MADE ALL REQUIRED CONTRIBUTIONS TO ANY 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.

 

(B)           THERE ARE NO PENDING, OR TO THE BEST OF ANY BORROWER’S OR
GUARANTOR’S KNOWLEDGE, THREATENED CLAIMS, ACTIONS OR LAWSUITS, OR ACTION BY ANY
GOVERNMENTAL AUTHORITY, WITH RESPECT TO ANY PLAN. THERE HAS BEEN NO PROHIBITED
TRANSACTION OR VIOLATION OF THE FIDUCIARY RESPONSIBILITY RULES WITH RESPECT TO
ANY PLAN.

 

75

--------------------------------------------------------------------------------

 

(C)           NO ERISA EVENT HAS OCCURRED OR IS REASONABLY EXPECTED TO OCCUR;
(I) THE CURRENT VALUE OF EACH PLAN’S ASSETS (DETERMINED IN ACCORDANCE WITH THE
ASSUMPTIONS USED FOR FUNDING SUCH PLAN PURSUANT TO SECTION 412 OF THE CODE) ARE
NOT LESS THAN SUCH PLAN’S LIABILITIES UNDER SECTION 4001(A)(16) OF ERISA; (II)
EACH BORROWER AND GUARANTOR, AND THEIR ERISA AFFILIATES, HAVE NOT INCURRED AND
DO NOT REASONABLY EXPECT TO INCUR, ANY LIABILITY UNDER TITLE IV OF ERISA WITH
RESPECT TO ANY PLAN (OTHER THAN PREMIUMS DUE AND NOT DELINQUENT UNDER SECTION
4007 OF ERISA); (III) EACH BORROWER AND GUARANTOR, AND THEIR ERISA AFFILIATES,
HAVE NOT INCURRED AND DO NOT REASONABLY EXPECT 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 SECTION 4201 OR 4243 OF ERISA WITH RESPECT
TO A MULTIEMPLOYER PLAN; AND (IV) EACH BORROWER AND GUARANTOR, AND THEIR ERISA
AFFILIATES, HAVE NOT ENGAGED IN A TRANSACTION THAT WOULD BE SUBJECT TO SECTION
4069 OR 4212(C) OF ERISA.

 

8.10        Bank Accounts. All of the deposit accounts, investment accounts or
other accounts in the name of or used by any Borrower or Guarantor maintained at
any bank or other financial institution are set forth on Schedule 8.10 to the
Information Certificate, subject to the right of each Borrower and Guarantor to
establish new accounts in accordance with Section 5.2 hereof.

 

8.11        Intellectual Property. Each Borrower and Guarantor owns or licenses
or otherwise has the right to use all Intellectual Property necessary for the
operation of its business as presently conducted or proposed to be conducted. As
of the date hereof, Borrowers and Guarantors do not have any Intellectual
Property registered, or subject to pending applications, in the United States
Patent and Trademark Office or any similar office or agency in the United
States, any State thereof, any political subdivision thereof or in any other
country, other than those described in Schedule 8.11 to the Information
Certificate and has not granted any licenses with respect thereto other than as
set forth in Schedule 8.11 to the Information Certificate. No event has occurred
which permits or would permit after notice or passage of time or both, the
revocation, suspension or termination of such rights. No slogan or other
advertising device, product, process, method, substance or other Intellectual
Property or goods bearing or using any Intellectual Property presently
contemplated to be sold by or employed by any Borrower or Guarantor infringes
any patent, trademark, servicemark, tradename, copyright, license or other
Intellectual Property owned by any other Person presently and no claim or
litigation is pending or threatened against or affecting any Borrower or
Guarantor contesting its right to sell or use any such Intellectual Property,
which could reasonably be expected to have a Material Adverse Effect. Schedule
8.11 to the Information Certificate sets forth all of the agreements or other
arrangements of each Borrower and Guarantor pursuant to which such Borrower or
Guarantor has a license or other right to use any trademarks, logos, designs,
representations or other Intellectual Property owned by another person as in
effect on the date hereof (collectively, together with such agreements or other
arrangements as may be entered into by any Borrower or Guarantor after the date
hereof, collectively, the “License Agreements” and individually, a “License
Agreement”). No trademark, servicemark, copyright or other Intellectual Property
at any time used by any Borrower or Guarantor which is owned by another person,
or owned by such Borrower or Guarantor subject to any security interest, lien,
collateral assignment, pledge or other encumbrance in favor of any person other
than Agent, is affixed to any Eligible Inventory, except (a) to the extent
permitted under the term of the license agreements listed on Schedule 8.11 to
the Information Certificate and (b) to the extent the sale of Inventory to which
such Intellectual Property is affixed is permitted to be sold by such Borrower
or Guarantor under applicable law (including the United States Copyright Act of
1976).

 

76

--------------------------------------------------------------------------------

 

8.12        Subsidiaries; Affiliates; Capitalization; Solvency.

 

(A)           AS OF THE DATE HEREOF, EACH BORROWER AND GUARANTOR DOES NOT HAVE
ANY DIRECT OR INDIRECT SUBSIDIARIES OR AFFILIATES AND IS NOT ENGAGED IN ANY
JOINT VENTURE OR PARTNERSHIP EXCEPT AS SET FORTH IN SCHEDULE 8.12 TO THE
INFORMATION CERTIFICATE.

 

(B)           AS OF THE DATE HEREOF, EACH BORROWER AND GUARANTOR IS THE RECORD
AND BENEFICIAL OWNER OF ALL OF THE ISSUED AND OUTSTANDING SHARES OF CAPITAL
STOCK OF EACH OF THE SUBSIDIARIES LISTED ON SCHEDULE 8.12 TO THE INFORMATION
CERTIFICATE AS BEING OWNED BY SUCH BORROWER OR GUARANTOR AND THERE ARE NO
PROXIES, IRREVOCABLE OR OTHERWISE, WITH RESPECT TO SUCH SHARES AND NO EQUITY
SECURITIES OF ANY OF THE SUBSIDIARIES ARE OR MAY BECOME REQUIRED TO BE ISSUED BY
REASON OF ANY OPTIONS, WARRANTS, RIGHTS TO SUBSCRIBE TO, CALLS OR COMMITMENTS OF
ANY KIND OR NATURE AND THERE ARE NO CONTRACTS, COMMITMENTS, UNDERSTANDINGS OR
ARRANGEMENTS BY WHICH ANY SUBSIDIARY IS OR MAY BECOME BOUND TO ISSUE ADDITIONAL
SHARES OF IT CAPITAL STOCK OR SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR
SUCH SHARES.

 

(C)           AS OF THE DATE HEREOF, THE ISSUED AND OUTSTANDING SHARES OF
CAPITAL STOCK OF EACH BORROWER AND GUARANTOR (OTHER THAN PARENT) ARE DIRECTLY
AND BENEFICIALLY OWNED AND HELD BY THE PERSONS INDICATED IN THE INFORMATION
CERTIFICATE, AND IN EACH CASE ALL OF SUCH SHARES HAVE BEEN DULY AUTHORIZED AND
ARE FULLY PAID AND NON-ASSESSABLE, FREE AND CLEAR OF ALL CLAIMS, LIENS, PLEDGES
AND ENCUMBRANCES OF ANY KIND, EXCEPT AS DISCLOSED IN WRITING TO AGENT PRIOR TO
THE DATE HEREOF.

 

(D)           EACH BORROWER AND GUARANTOR IS SOLVENT AND WILL CONTINUE TO BE
SOLVENT AFTER THE CREATION OF THE OBLIGATIONS, THE SECURITY INTERESTS OF AGENT
AND THE OTHER TRANSACTION CONTEMPLATED HEREUNDER.

 

8.13        Labor Disputes.

 

(A)           SET FORTH ON SCHEDULE 8.13 TO THE INFORMATION CERTIFICATE IS A
LIST (INCLUDING DATES OF TERMINATION) OF ALL COLLECTIVE BARGAINING OR SIMILAR
AGREEMENTS BETWEEN OR APPLICABLE TO EACH BORROWER AND GUARANTOR AND ANY UNION,
LABOR ORGANIZATION OR OTHER BARGAINING AGENT IN RESPECT OF THE EMPLOYEES OF ANY
BORROWER OR GUARANTOR ON THE DATE HEREOF.

 

(B)           EXCEPT AS COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT THERE IS (I) NO UNFAIR LABOR PRACTICE COMPLAINT PENDING AGAINST
ANY BORROWER OR GUARANTOR OR, TO THE BEST OF ANY BORROWER’S OR GUARANTOR’S
KNOWLEDGE, THREATENED AGAINST IT, BEFORE THE NATIONAL LABOR RELATIONS BOARD, AND
NO GRIEVANCE OR ARBITRATION PROCEEDING ARISING OUT OF OR UNDER ANY COLLECTIVE
BARGAINING AGREEMENT IS PENDING AGAINST ANY BORROWER OR GUARANTOR OR, TO BEST OF
ANY BORROWER’S OR GUARANTOR’ S KNOWLEDGE, THREATENED AGAINST IT, AND (II) NO
STRIKE, LABOR DISPUTE, SLOWDOWN OR STOPPAGE IS PENDING AGAINST ANY BORROWER OR
GUARANTOR OR, TO THE BEST OF ANY BORROWER’S OR GUARANTOR’S KNOWLEDGE, THREATENED
AGAINST ANY BORROWER OR GUARANTOR.

 

8.14         Restrictions on Subsidiaries. Except for restrictions contained in
this Agreement or any other agreement with respect to Indebtedness of any
Borrower or Guarantor permitted hereunder as in effect on the date hereof, there
are no contractual or consensual restrictions on any Borrower or Guarantor which
prohibit or otherwise restrict (a) the transfer of cash or other assets between
any Borrower or Guarantor or (b) the ability of any Borrower or Guarantor to
incur Indebtedness or grant security interests to Agent or any Lender in the
Collateral.

 

77

--------------------------------------------------------------------------------

 

8.15         Material Contracts. Schedule 8.15 to the Information Certificate
sets forth all Material Contracts to which any Borrower or Guarantor is a party
or is bound as of the date hereof. Borrowers and Guarantors have delivered true,
correct and complete copies of such Material Contracts to Agent on or before the
date hereof. Borrowers and Guarantors are not in breach or in default in any
material respect of or under any Material Contract and have not received any
notice of the intention of any other party thereto to terminate any Material
Contract which termination could be reasonably expected to have a Material
Adverse Effect.

 

8.16         Credit Card Agreements. Set forth in Schedule 8.16 hereto is a
correct and complete list of all of the material Credit Card Agreements and all
other material agreements, documents and instruments existing as of the date
hereof between or among any Borrower or Guarantor (on the one hand) and any
Credit Card Issuer or Credit Card Processor (on the other hand). The Credit Card
Agreements constitute all of such agreements necessary for each Borrower to
operate its business as presently conducted with respect to credit cards and
debit cards and no Receivables of any Borrower arise from purchases by customers
of Inventory with credit cards or debit cards, other than those which are issued
by Credit Card Issuers with whom such Borrower has entered into one of the
Credit Card Agreements set forth on Schedule 8.16 hereto or with whom Borrower
has entered into a Credit Card Agreement in accordance with Section 9.18 hereof.
Each of the Credit Card Agreements constitutes the legal, valid and binding
obligations of the Borrower that is party thereto and to the best of each
Borrower’s and Guarantor’s knowledge, the other parties thereto, enforceable in
accordance with their respective terms and is in full force and effect. No
material default or material event of default, or act, condition or event which
after notice or passage of time or both, would constitute a material default or
a material event of default under any of the Credit Card Agreements exists or
has occurred that would entitle the other party thereto to suspend, withhold or
reduce amounts that would otherwise be payable to a Borrower. Each Borrower and
the other parties thereto have complied in all material respects with all of the
terms and conditions of the Credit Card Agreements to the extent necessary for
such Borrower to be entitled to receive all payments thereunder. Borrowers have
delivered, or caused to be delivered to Agent, true, correct and complete copies
of all of the Credit Card Agreements.

 

8.17         Interrelated Businesses. Borrowers and Guarantors make up a related
organization of various entities constituting a single economic and business
enterprise so that Borrowers and Guarantors share an identity of interests such
that any benefit received by any one of them benefits the others. Certain
Borrowers and Guarantors render services to or for the benefit of the other
Borrowers and/or Guarantors, as the case may be, purchase or sell and supply
goods to or from or for the benefit of certain others, make loans, advances and
provide other financial accommodations to or for the benefit of certain other
Borrowers and Guarantors (including inter alia, the payment by certain Borrowers
and Guarantors of creditors of certain other Borrowers or Guarantors and
guarantees by certain Borrowers and Guarantors of indebtedness of certain other
Borrowers and Guarantors and provide administrative, marketing, payroll and
management services to or for the benefit of certain other Borrowers and
Guarantors). Certain Borrowers and Guarantors have centralized accounting and
legal services, certain common officers and directors and generally do not
provide consolidating financial statements to creditors and Borrowers and
Guarantors have the same chief executive office.

 

78

--------------------------------------------------------------------------------

 

8.18         Payable Practices. Each Borrower and Guarantor have not made any
material change in the historical accounts payable practices from those in
effect immediately prior to the date hereof.

 

8.19         Customer Loyalty Account Assets . All cash, Cash Equivalents and
other financial assets at any time deposited in or credited to a Customer
Loyalty Account represent funds held by a Borrower or Guarantor to pay amounts
owing by Borrowers and Guarantors under a customer loyalty program maintained by
Borrowers and Guarantors. No Borrower or Guarantor shall use any such cash, Cash
Equivalents or other financial assets for any purpose other than to pay such
amounts, except as Agent may agree in writing. The aggregate balance of all
cash, Cash Equivalents and other financial assets at any time deposited in or
credited to the Customer Loyalty Accounts shall not exceed the lesser of (a) the
accrued and unpaid amounts owing by Borrowers and Guarantors under a customer
loyalty program maintained by Borrowers and Guarantors or (b) $8,000,000.

 

8.20         Propco. Each Propco does not own, and will not own or acquire, any
assets other than Real Property and Equipment.

 

8.21         Accuracy and Completeness of Information. All information furnished
by or on behalf of any Borrower or Guarantor in writing to Agent or any Lender
in connection with this Agreement or any of the other Financing Agreements or
any transaction contemplated hereby or thereby, including all information on the
Information Certificate is true and correct in all material respects on the date
as of which such information is dated or certified and does not omit any
material fact necessary in order to make such information not misleading. No
event or circumstance has occurred which has had or could reasonably be expected
to have a Material Adverse Affect, which has not been fully and accurately
disclosed to Agent in writing (including through the public filings of
TravelCenters which have been made with the Securities and Exchange Commission)
prior to the date hereof.

 

8.22         Survival of Warranties; Cumulative. All representations and
warranties contained in this Agreement or any of the other Financing Agreements
shall survive the execution and delivery of this Agreement and shall be deemed
to have been made again to Agent and Lenders on the date of each additional
borrowing or other credit accommodation hereunder and shall be conclusively
presumed to have been relied on by Agent and Lenders regardless of any
investigation made or information possessed by Agent or any Lender. The
representations and warranties set forth herein shall be cumulative and in
addition to any other representations or warranties which any Borrower or
Guarantor shall now or hereafter give, or cause to be given, to Agent or any
Lender.

 

SECTION 9.                                AFFIRMATIVE AND NEGATIVE COVENANTS

 

9.1          Maintenance of Existence.

 

(A)           EACH BORROWER AND GUARANTOR SHALL AT ALL TIMES PRESERVE, RENEW AND
KEEP IN FULL FORCE AND EFFECT ITS CORPORATE OR LIMITED LIABILITY COMPANY
EXISTENCE AND RIGHTS AND FRANCHISES WITH RESPECT THERETO AND MAINTAIN IN FULL
FORCE AND EFFECT ALL LICENSES, TRADEMARKS, TRADENAMES, APPROVALS,
AUTHORIZATIONS, LEASES, CONTRACTS AND PERMITS NECESSARY TO CARRY ON THE BUSINESS
AS PRESENTLY OR PROPOSED TO BE CONDUCTED, EXCEPT AS TO ANY GUARANTOR AS
PERMITTED IN SECTION 9.7 HERETO.

 

79

--------------------------------------------------------------------------------

 

(B)           NO BORROWER OR GUARANTOR SHALL CHANGE ITS NAME UNLESS EACH OF THE
FOLLOWING CONDITIONS IS SATISFIED: (I) AGENT SHALL HAVE RECEIVED NOT LESS THAN
THIRTY (30) DAYS PRIOR WRITTEN NOTICE FROM ADMINISTRATIVE BORROWER OF SUCH
PROPOSED CHANGE IN ITS CORPORATE NAME, WHICH NOTICE SHALL ACCURATELY SET FORTH
THE NEW NAME; AND (II) AGENT SHALL HAVE RECEIVED A COPY OF THE AMENDMENT TO THE
CERTIFICATE OF INCORPORATION OR FORMATION OF SUCH BORROWER OR GUARANTOR
PROVIDING FOR THE NAME CHANGE CERTIFIED BY THE SECRETARY OF STATE OF THE
JURISDICTION OF INCORPORATION OR ORGANIZATION OF SUCH BORROWER OR GUARANTOR AS
SOON AS IT IS AVAILABLE.

 

(C)           NO BORROWER OR GUARANTOR SHALL CHANGE ITS CHIEF EXECUTIVE OFFICE
OR ITS MAILING ADDRESS OR ORGANIZATIONAL IDENTIFICATION NUMBER (OR IF IT DOES
NOT HAVE ONE, SHALL NOT ACQUIRE ONE) UNLESS AGENT SHALL HAVE RECEIVED NOT LESS
THAN THIRTY (30) DAYS’ PRIOR WRITTEN NOTICE FROM ADMINISTRATIVE BORROWER OF SUCH
PROPOSED CHANGE, WHICH NOTICE SHALL SET FORTH SUCH INFORMATION WITH RESPECT
THERETO AS AGENT MAY REASONABLY REQUIRE AND AGENT SHALL HAVE RECEIVED SUCH
AGREEMENTS AS AGENT MAY REASONABLY REQUIRE IN CONNECTION THEREWITH. NO BORROWER
OR GUARANTOR SHALL CHANGE ITS TYPE OF ORGANIZATION, JURISDICTION OF ORGANIZATION
OR OTHER LEGAL STRUCTURE, EXCEPT THAT ANY BORROWER OR GUARANTOR MAY CHANGE ITS
TYPE OF ORGANIZATION TO A CORPORATION OR LIMITED LIABILITY COMPANY AND MAY
CHANGE ITS JURISDICTION OF ORGANIZATION TO ANY STATE IN THE UNITED STATES OF
AMERICA; PROVIDED, THAT, (I) AGENT SHALL HAVE RECEIVED NOT LESS THAN FIVE (5)
BUSINESS DAYS’ PRIOR WRITTEN NOTICE (OR SUCH LESSER PERIOD AS TO WHICH AGENT MAY
AGREE) OF THE INTENTION OF SUCH BORROWER OR GUARANTOR TO MAKE SUCH CHANGE, (II)
AGENT SHALL PROMPTLY RECEIVE TRUE, CORRECT AND COMPLETE COPIES OF ALL MATERIAL
AGREEMENTS, DOCUMENTS AND INSTRUMENTS RELATING TO SUCH CHANGE, (III) AS OF THE
EFFECTIVE DATE OF SUCH CHANGE AND AFTER GIVING EFFECT THERETO, NO DEFAULT OR
EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AND (IV) SUCH BORROWER OR
GUARANTOR SHALL EXECUTE AND DELIVER SUCH AGREEMENTS, DOCUMENTS AND INSTRUMENTS
AS AGENT MAY REASONABLY REQUEST IN CONNECTION THEREWITH.

 

9.2          New Collateral Locations. Each Borrower and Guarantor may only open
any new location within the United States other than locations outside the
United States acquired pursuant to a Permitted Acquisition.

 

9.3          Compliance with Laws, Regulations, Etc.

 

(A)           EACH BORROWER AND GUARANTOR SHALL, AT ALL TIMES, COMPLY IN ALL
MATERIAL RESPECTS WITH ALL LAWS, RULES, REGULATIONS, LICENSES, APPROVALS, ORDERS
AND OTHER PERMITS APPLICABLE TO IT AND DULY OBSERVE ALL REQUIREMENTS OF ANY
FOREIGN, FEDERAL, STATE OR LOCAL GOVERNMENTAL AUTHORITY, EXCEPT WHERE SUCH
NON-COMPLIANCE COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT.

 

(B)           BORROWERS AND GUARANTORS SHALL GIVE WRITTEN NOTICE TO AGENT
IMMEDIATELY UPON ANY BORROWER’S OR GUARANTOR’S RECEIPT OF ANY NOTICE OF, OR ANY
BORROWER’S OR GUARANTOR’S OTHERWISE OBTAINING KNOWLEDGE OF, (I) THE OCCURRENCE
OF ANY EVENT INVOLVING THE MATERIAL RELEASE, SPILL OR DISCHARGE, THREATENED OR
ACTUAL, OF ANY HAZARDOUS MATERIAL IN CONTRAVENTION OF ANY APPLICABLE
ENVIRONMENTAL LAW WITH RESPECT TO ANY REAL PROPERTY INCLUDED IN THE CALCULATION
OF THE BORROWING BASE OR (II) ANY INVESTIGATION, PROCEEDING, COMPLAINT, ORDER,
DIRECTIVE, CLAIMS, CITATION OR NOTICE WITH RESPECT TO: (A) ANY MATERIAL
NON-COMPLIANCE WITH OR MATERIAL VIOLATION OF ANY ENVIRONMENTAL LAW BY ANY
BORROWER OR GUARANTOR WITH RESPECT TO ANY REAL PROPERTY INCLUDED IN THE
CALCULATION OF THE

 

80

--------------------------------------------------------------------------------

 

BORROWING BASE OR (B) THE MATERIAL RELEASE, SPILL OR DISCHARGE, THREATENED OR
ACTUAL, OF ANY HAZARDOUS MATERIAL IN CONTRAVENTION OF ANY APPLICABLE
ENVIRONMENTAL LAW WITH RESPECT TO ANY REAL PROPERTY INCLUDED IN THE CALCULATION
OF THE BORROWING BASE. PROMPTLY UPON THE REQUEST OF AGENT, COPIES OF ALL
ENVIRONMENTAL SURVEYS, AUDITS, ASSESSMENTS, FEASIBILITY STUDIES AND RESULTS OF
REMEDIAL INVESTIGATIONS SHALL BE FURNISHED, OR CAUSED TO BE FURNISHED, BY SUCH
BORROWER OR GUARANTOR TO AGENT. EACH BORROWER AND GUARANTOR SHALL TAKE PROMPT
ACTION TO RESPOND TO ANY MATERIAL NON-COMPLIANCE WITH ANY OF THE ENVIRONMENTAL
LAWS AND, PROMPTLY UPON THE REQUEST OF AGENT, SHALL REGULARLY REPORT TO AGENT ON
SUCH RESPONSE.

 

(C)           WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, WHENEVER AGENT
REASONABLY DETERMINES THAT THERE IS MATERIAL NON-COMPLIANCE, OR ANY CONDITION
WHICH REQUIRES ANY ACTION BY OR ON BEHALF OF ANY BORROWER OR GUARANTOR IN ORDER
TO AVOID ANY MATERIAL NON-COMPLIANCE, WITH ANY ENVIRONMENTAL LAW WITH RESPECT TO
ANY REAL PROPERTY INCLUDED IN THE CALCULATION OF THE BORROWING BASE, BORROWERS
SHALL, AT AGENT’S REQUEST AND BORROWERS’ EXPENSE: (I) CAUSE AN INDEPENDENT
ENVIRONMENTAL ENGINEER REASONABLY ACCEPTABLE TO AGENT TO CONDUCT SUCH TESTS OF
THE SITE WHERE MATERIAL NON-COMPLIANCE OR ALLEGED MATERIAL NON-COMPLIANCE WITH
SUCH ENVIRONMENTAL LAWS HAS OCCURRED AS TO SUCH MATERIAL NON-COMPLIANCE AND
PREPARE AND DELIVER TO AGENT A REPORT AS TO SUCH MATERIAL NON-COMPLIANCE SETTING
FORTH THE RESULTS OF SUCH TESTS, A PROPOSED PLAN FOR RESPONDING TO ANY
ENVIRONMENTAL PROBLEMS DESCRIBED THEREIN, AND AN ESTIMATE OF THE COSTS THEREOF
AND (II) PROVIDE TO AGENT A SUPPLEMENTAL REPORT OF SUCH ENGINEER WHENEVER THE
SCOPE OF SUCH MATERIAL NON-COMPLIANCE, OR SUCH BORROWER’S OR GUARANTOR’S
RESPONSE THERETO OR THE ESTIMATED COSTS THEREOF, SHALL CHANGE IN ANY MATERIAL
RESPECT.

 

(D)           EACH BORROWER AND GUARANTOR SHALL INDEMNIFY AND HOLD HARMLESS
AGENT AND LENDERS AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
INVITEES, REPRESENTATIVES, SUCCESSORS AND ASSIGNS, FROM AND AGAINST ANY AND ALL
LOSSES, CLAIMS, DAMAGES, LIABILITIES, COSTS, AND EXPENSES (INCLUDING REASONABLE
ATTORNEYS’ FEES AND EXPENSES) DIRECTLY OR INDIRECTLY ARISING OUT OF OR
ATTRIBUTABLE TO THE USE, GENERATION, MANUFACTURE, REPRODUCTION, STORAGE,
RELEASE, THREATENED RELEASE, SPILL, DISCHARGE, DISPOSAL OR PRESENCE OF A
HAZARDOUS MATERIAL, INCLUDING THE COSTS OF ANY REQUIRED OR NECESSARY REPAIR,
CLEANUP OR OTHER REMEDIAL WORK WITH RESPECT TO ANY PROPERTY OF ANY BORROWER OR
GUARANTOR AND THE PREPARATION AND IMPLEMENTATION OF ANY CLOSURE, REMEDIAL OR
OTHER REQUIRED PLANS ,EXCEPT TO THE EXTENT SUCH LOSSES, CLAIMS, DAMAGES,
LIABILITIES, COSTS AND EXPENSES ARE CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF AGENT OR ANY LENDER. ALL REPRESENTATIONS, WARRANTIES, COVENANTS
AND INDEMNIFICATIONS IN THIS SECTION 9.3 SHALL SURVIVE THE PAYMENT OF THE
OBLIGATIONS AND THE TERMINATION OF THIS AGREEMENT.

 

9.4          Payment of Taxes and Claims. Each Borrower and Guarantor shall duly
pay and discharge all federal income taxes and other material taxes,
assessments, contributions and governmental charges upon or against it or its
properties or assets, except for (a) taxes the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to such Borrower or Guarantor, as the case may be, and with respect to
which adequate reserves have been set aside on its books, or (b) taxes for which
a valid and effective extension to file the applicable tax return has been
granted.

 

9.5          Insurance. Each Borrower and Guarantor shall at all times, maintain
with financially sound and reputable insurers insurance with respect to the
Collateral against loss or damage and all other insurance of the kinds and in
the amounts customarily insured against or carried by corporations of
established reputation engaged in the same or similar businesses and similarly
situated (it being understood that the insurers of Borrowers and Guarantors and
the kind and amount of insurance maintained by Borrowers and Guarantors are
acceptable to Agent as of the date hereof); provided, that, nothing in this
Section 9.5 shall require Borrowers and

 

81

--------------------------------------------------------------------------------

 

Guarantors to maintain insurance to insure against liabilities arising from any
non-compliance or alleged non-compliance with Environmental Laws. Said policies
of insurance shall be reasonably satisfactory to Agent as to form, amount and
insurer (it being understood that such policies of insurance are satisfactory to
Agent as of the date hereof). Borrowers and Guarantors shall furnish
certificates, policies or endorsements to Agent as Agent shall reasonably
require as proof of such insurance, and, if any Borrower or Guarantor fails to
do so, Agent is authorized, but not required, to obtain such insurance at the
expense of Borrowers. All policies shall provide for at least thirty (30) days
prior written notice to Agent of any cancellation or reduction of coverage and
that Agent may act as attorney for each Borrower and Guarantor, at any time an
Event of Default has occurred and is continuing, in obtaining adjusting,
settling, amending and canceling such insurance. Borrowers and Guarantors shall
cause Agent to be named as a loss payee and an additional insured (but without
any liability for any premiums) under such insurance policies and Borrowers and
Guarantors shall obtain non-contributory lender’s loss payable endorsements to
all insurance policies in form and substance reasonably satisfactory to Agent.
Such lender ‘s loss payable endorsements shall specify that the proceeds of such
insurance shall be payable to Agent as its interests may appear and further
specify that Agent and Lenders shall be paid regardless of any act or omission
by any Borrower, Guarantor or any of its or their Affiliates. Without limiting
any other rights of Agent or Lenders, any insurance proceeds received by Agent
at any time may be applied to payment of the Obligations, whether or not then
due, in any order and in such manner as Agent may determine. Upon application of
such proceeds to the Revolving Loans, Revolving Loans may be available subject
and pursuant to the terms hereof to be used for the costs of repair or
replacement of the Collateral lost or damages resulting in the payment of such
insurance proceeds. If an Event of Default has occurred and is continuing or a
Compliance Period or a Cash Dominion Period exists, Borrowers and Guarantors
shall, promptly upon the request of Agent, maintain (a) a separate property
insurance policy covering the assets leased to a Borrower or Guarantor pursuant
to a Lease Agreement and (b) a separate property insurance policy covering all
other assets of Borrowers and Guarantors which comply with the terms of this
Section 9.5.

 

9.6          Financial Statements and Other Information.

 

(A)           EACH BORROWER AND GUARANTOR SHALL KEEP PROPER BOOKS AND RECORDS IN
WHICH TRUE AND COMPLETE ENTRIES SHALL BE MADE OF ALL DEALINGS OR TRANSACTIONS OF
OR IN RELATION TO THE COLLATERAL AND THE BUSINESS OF SUCH BORROWER, GUARANTOR
AND ITS SUBSIDIARIES IN ACCORDANCE WITH GAAP. BORROWERS AND GUARANTORS SHALL
PROMPTLY FURNISH TO AGENT AND LENDERS ALL SUCH FINANCIAL AND OTHER INFORMATION
AS AGENT SHALL REASONABLY REQUEST RELATING TO THE COLLATERAL AND THE ASSETS,
BUSINESS AND OPERATIONS OF BORROWERS AND GUARANTORS. WITHOUT LIMITING THE
FOREGOING, BORROWERS AND GUARANTORS SHALL FURNISH OR CAUSE TO BE FURNISHED TO
AGENT, THE FOLLOWING: (I) IN THE EVENT THAT EXCESS AVAILABILITY PLUS
UNRESTRICTED CASH SHALL HAVE FALLEN BELOW THE AMOUNT EQUAL TO THIRTY-FIVE (35%)
PERCENT OF THE MAXIMUM CREDIT DURING ANY MONTH, THEN WITHIN FORTY-FIVE (45) DAYS
AFTER THE END OF SUCH FISCAL MONTH, MONTHLY UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS (INCLUDING BALANCE SHEETS, STATEMENTS OF INCOME AND LOSS, AND A CASH
FLOW REPORT WHICH SETS FORTH THE ITEMS NECESSARY TO CALCULATE THE FIXED CHARGE
COVERAGE RATIO OF  PARENT AND ITS SUBSIDIARIES), ALL IN REASONABLE DETAIL FAIRLY
PRESENTING IN ALL MATERIAL RESPECTS THE FINANCIAL POSITION AND RESULTS OF THE
OPERATIONS OF PARENT AND ITS SUBSIDIARIES AS OF THE END OF AND THROUGH SUCH
FISCAL MONTH, CERTIFIED TO BE CORRECT BY THE CHIEF FINANCIAL OFFICER OF PARENT,
SUBJECT TO NORMAL YEAR-END ADJUSTMENTS AND NO FOOTNOTES AND ACCOMPANIED BY A
COMPLIANCE CERTIFICATE SUBSTANTIALLY IN THE FORM OF EXHIBIT C HERETO (A
“COMPLIANCE CERTIFICATE”), ALONG WITH A SCHEDULE

 

82

--------------------------------------------------------------------------------

 

IN A FORM SATISFACTORY TO AGENT OF THE CALCULATIONS USED IN DETERMINING, AS OF
THE END OF SUCH MONTH, WHETHER BORROWERS AND GUARANTORS ARE IN COMPLIANCE WITH
THE COVENANTS SET FORTH IN SECTION 9.17 OF THIS AGREEMENT FOR SUCH MONTH, (II)
WITHIN FORTY-FIVE (45) DAYS AFTER THE END OF EACH FISCAL QUARTER (OTHER THAN THE
LAST FISCAL QUARTER OF EACH FISCAL YEAR), QUARTERLY UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS (INCLUDING IN EACH CASE BALANCE SHEETS, STATEMENTS OF
INCOME AND LOSS, AND STATEMENTS OF CASH FLOW), ALL IN REASONABLE DETAIL, FAIRLY
PRESENTING IN ALL MATERIAL RESPECTS THE FINANCIAL POSITION AND THE RESULTS OF
THE OPERATIONS OF PARENT AND ITS SUBSIDIARIES AS OF THE END OF AND THROUGH SUCH
FISCAL QUARTER, CERTIFIED TO BE CORRECT BY THE CHIEF FINANCIAL OFFICER OF
PARENT, SUBJECT TO NORMAL YEAR-END ADJUSTMENTS AND NO FOOTNOTES AND ACCOMPANIED
BY A COMPLIANCE CERTIFICATE, ALONG WITH A SCHEDULE IN A FORM SATISFACTORY TO
AGENT OF THE CALCULATIONS USED IN DETERMINING, AS OF THE END OF SUCH QUARTER,
WHETHER BORROWERS AND GUARANTORS ARE IN COMPLIANCE WITH THE COVENANTS SET FORTH
IN SECTION 9.17 OF THIS AGREEMENT FOR SUCH QUARTER AND (III) WITHIN NINETY (90)
DAYS AFTER THE END OF EACH FISCAL YEAR, AUDITED CONSOLIDATED FINANCIAL
STATEMENTS OF PARENT AND ITS SUBSIDIARIES (INCLUDING IN EACH CASE BALANCE
SHEETS, STATEMENTS OF INCOME AND LOSS, STATEMENTS OF CASH FLOW, AND STATEMENTS
OF SHAREHOLDERS’ EQUITY), AND THE ACCOMPANYING NOTES THERETO, ALL IN REASONABLE
DETAIL, FAIRLY PRESENTING IN ALL MATERIAL RESPECTS THE FINANCIAL POSITION AND
THE RESULTS OF THE OPERATIONS OF PARENT AND ITS SUBSIDIARIES AS OF THE END OF
AND FOR SUCH FISCAL YEAR, TOGETHER WITH THE UNQUALIFIED OPINION OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS, WHICH ACCOUNTANTS SHALL BE A “BIG FOUR” ACCOUNTING
FIRM OR ANOTHER INDEPENDENT ACCOUNTING FIRM SELECTED BY BORROWERS AND ACCEPTABLE
TO AGENT, THAT SUCH AUDITED FINANCIAL STATEMENTS HAVE BEEN PREPARED IN
ACCORDANCE WITH GAAP, AND PRESENT FAIRLY IN ALL MATERIAL RESPECTS THE RESULTS OF
OPERATIONS AND FINANCIAL CONDITION OF PARENT AND ITS SUBSIDIARIES AS OF THE END
OF AND FOR THE FISCAL YEAR THEN ENDED.

 

(B)           BORROWERS AND GUARANTORS SHALL PROMPTLY NOTIFY AGENT IN WRITING OF
THE DETAILS OF (I) ANY LOSS, DAMAGE, INVESTIGATION, ACTION, SUIT, PROCEEDING OR
CLAIM RELATING TO COLLATERAL HAVING A VALUE OF MORE THAN $1,000,000 OR WHICH IF
ADVERSELY DETERMINED COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT, (II) ANY MATERIAL CONTRACT BEING TERMINATED OR OF ANY MATERIAL CONTRACT
BEING AMENDED IN ANY MATERIAL RESPECT OR ANY NEW MATERIAL CONTRACT ENTERED INTO
(IN WHICH EVENT BORROWERS AND GUARANTORS SHALL PROVIDE AGENT WITH A COPY OF SUCH
MATERIAL CONTRACT), (III) ANY ORDER, JUDGMENT OR DECREE IN EXCESS OF $1,000,000
SHALL HAVE BEEN ENTERED AGAINST ANY BORROWER OR GUARANTOR ANY OF ITS OR THEIR
PROPERTIES OR ASSETS, (IV) ANY NOTIFICATION OF A MATERIAL VIOLATION OF LAWS OR
REGULATIONS RECEIVED BY ANY BORROWER OR GUARANTOR, (V) ANY ERISA EVENT, AND (VI)
THE OCCURRENCE OF ANY DEFAULT OR EVENT OF DEFAULT.

 

(C)           BORROWERS AND GUARANTORS SHALL PROMPTLY AFTER THE SENDING OR
FILING THEREOF FURNISH OR CAUSE TO BE FURNISHED TO AGENT COPIES OF ALL REPORTS
WHICH ANY BORROWER OR GUARANTOR SENDS TO ITS STOCKHOLDERS GENERALLY AND COPIES
OF ALL REPORTS AND REGISTRATION STATEMENTS WHICH ANY BORROWER OR GUARANTOR FILES
WITH THE SECURITIES AND EXCHANGE COMMISSION, ANY NATIONAL SECURITIES EXCHANGE OR
THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.

 

(D)           BORROWERS AND GUARANTORS SHALL FURNISH OR CAUSE TO BE FURNISHED TO
AGENT PROJECTIONS OF PARENT AND ITS SUBSIDIARIES FOR EACH FISCAL YEAR, NO LATER
THAN THIRTY (30) DAYS PRIOR TO THE START OF SUCH FISCAL YEAR, AND SHALL FURNISH
OR CAUSE TO BE FURNISHED TO AGENT SUCH OTHER INFORMATION RESPECTING THE
COLLATERAL AND THE BUSINESS OF BORROWERS AND GUARANTORS, AS AGENT MAY, FROM TIME
TO TIME, REASONABLY REQUEST; PROVIDED, THAT, BORROWERS AND GUARANTORS SHALL NOT
BE REQUIRED TO DELIVER THE PROJECTIONS FOR THE FISCAL YEAR ENDING DECEMBER 31,
2008 UNTIL

 

83

--------------------------------------------------------------------------------

 

MARCH 31, 2008. SUBJECT TO THE TERMS OF SECTION 13.5 HEREOF, AGENT IS HEREBY
AUTHORIZED TO DELIVER A COPY OF ANY FINANCIAL STATEMENT OR ANY OTHER INFORMATION
RELATING TO THE BUSINESS OF BORROWERS AND GUARANTORS TO ANY COURT OR OTHER
GOVERNMENTAL AUTHORITY OR TO ANY LENDER OR PARTICIPANT OR PROSPECTIVE LENDER OR
PARTICIPANT OR ANY AFFILIATE OF ANY LENDER OR PARTICIPANT. EACH BORROWER AND
GUARANTOR HEREBY AUTHORIZES AND DIRECTS ANY SECURITIES INTERMEDIARY OR OTHER
FINANCIAL INSTITUTION AT WHICH ANY CASH OR CASH EQUIVALENTS OF A BORROWER
CONSTITUTING ELIGIBLE CASH COLLATERAL ARE MAINTAINED TO PROVIDE DIRECTLY TO
AGENT SUCH INFORMATION WITH RESPECT TO THE ACCOUNTS IN WHICH SUCH CASH OR CASH
EQUIVALENTS ARE HELD AND WITH RESPECT TO THE CASH OR CASH EQUIVALENTS THEREIN AS
AGENT MAY REQUEST AND BORROWERS AND GUARANTORS SHALL SO NOTIFY SUCH SECURITIES
INTERMEDIARIES OR OTHER FINANCIAL INSTITUTIONS PROMPTLY UPON AGENT’S REQUEST.
ANY DOCUMENTS, SCHEDULES, INVOICES OR OTHER PAPERS DELIVERED TO AGENT OR ANY
LENDER MAY BE DESTROYED OR OTHERWISE DISPOSED OF BY AGENT OR SUCH LENDER ONE (1)
YEAR AFTER THE SAME ARE DELIVERED TO AGENT OR SUCH LENDER, EXCEPT AS OTHERWISE
DESIGNATED BY ADMINISTRATIVE BORROWER TO AGENT OR SUCH LENDER IN WRITING.

 

9.7          Sale of Assets, Consolidation, Merger, Dissolution, Etc. Each
Borrower and Guarantor shall not directly or indirectly:

 

(a)           merge into or with or consolidate with any other Person or permit
any other Person to merge into or with or consolidate with it except that (i)
any Borrower or Guarantor may merge with or into or consolidate with any other
Borrower or Guarantor (including any Person which becomes a Borrower or
Guarantor in connection with a Permitted Acquisition subject to the terms of
Section 9.21(d) hereof) and (ii) any Borrower or Guarantor may merge with a
newly formed corporation or limited liability company organized in any state in
the United States of America which has no assets or liabilities solely for the
purpose of either changing the type of organization of such Borrower or
Guarantor to a corporation or limited liability company or changing the
jurisdiction of organization of such Borrower or Guarantor to any state in the
United States of America, provided, that, in each case each of the following
conditions is satisfied as determined by Agent in good faith: (A) Agent shall
receive prompt written notice of any such merger or consolidation, (B) as of the
effective date of the merger or consolidation and after giving effect thereto,
no Default or Event of Default shall have occurred and be continuing, (C) in the
case of a merger between any Borrower or Guarantor and such newly formed
corporation or limited liability company where such corporation or limited
liability company is the surviving corporation or limited liability company,
such corporation or limited liability company shall have expressly confirmed,
ratified and assumed the Obligations of such Borrower or Guarantor and the
Financing Agreements to which such Borrower or Guarantor is a party, in form and
substance reasonably satisfactory to Agent, and in the case of a merger between
any Borrower or Guarantor and such newly formed corporation or limited liability
company, such Borrower, Guarantor or newly formed corporation or limited
liability company shall execute and deliver such other agreements, documents and
instruments as Agent may reasonably request in connection therewith, and (D)
Agent shall promptly receive true, correct and complete copies of all material
agreements, documents and instruments relating to such merger or consolidation;
provided, further, that, prior to the Petro Existing Security Agreement
Termination Date, no Petro Company shall be merged with or consolidate into any
Borrower or Guarantor other than another Petro Company;

 

84

--------------------------------------------------------------------------------

 

(B)           SELL, ISSUE, ASSIGN, LEASE, LICENSE, TRANSFER, ABANDON OR
OTHERWISE DISPOSE OF ANY CAPITAL STOCK OR INDEBTEDNESS TO ANY OTHER PERSON OR
ANY OF ITS ASSETS TO ANY OTHER PERSON, EXCEPT FOR

 

(I)            SALES OF INVENTORY IN THE ORDINARY COURSE OF BUSINESS,

 

(II)           THE SALE OR OTHER DISPOSITION OF EQUIPMENT (INCLUDING WORN-OUT OR
OBSOLETE EQUIPMENT OR EQUIPMENT NO LONGER USED OR USEFUL IN THE BUSINESS OF ANY
BORROWER OR GUARANTOR) AND THE SALE OF REAL PROPERTY OR THE CAPITAL STOCK OF ANY
PROPCO; PROVIDED, THAT, (A) AS OF THE DATE OF SUCH SALE OR DISPOSITION AND AFTER
GIVING EFFECT THERETO, NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING, (B) SUCH SALE OR DISPOSITION SHALL BE ON COMMERCIALLY REASONABLE
TERMS IN A BONA FIDE ARMS LENGTH TRANSACTION, (C) AS OF THE DATE OF SUCH SALE OR
DISPOSITION AND AFTER GIVING EFFECT THERETO, EXCESS AVAILABILITY PLUS
UNRESTRICTED CASH SHALL NOT BE LESS THAN $20,000,000, (D) SUCH SALE OR
DISPOSITION SHALL NOT BE IN CONNECTION WITH ANY SALE-LEASEBACK TRANSACTION (IT
BEING UNDERSTOOD THAT ANY SUCH SALE-LEASEBACK TRANSACTION SHALL BE GOVERNED BY
THE TERMS OF SECTION 9.7(B)(X) HEREOF), (E) IF THE EQUIPMENT OR REAL PROPERTY TO
BE SOLD OR DISPOSED OF (INCLUDING THE EQUIPMENT OR REAL PROPERTY OWNED BY ANY
PROPCO) IS INCLUDED IN THE BORROWING BASE OR IF A CASH DOMINION PERIOD EXISTS,
ALL OF THE NET CASH PROCEEDS OF SUCH SALE OR DISPOSITION SHALL PROMPTLY BE PAID
TO AGENT FOR APPLICATION TO THE OBLIGATIONS IN ACCORDANCE WITH SECTION 6.4(A)
HEREOF,

 

(III)          THE ISSUANCE AND SALE BY PARENT OF CAPITAL STOCK OF PARENT (OTHER
THAN DISQUALIFIED CAPITAL STOCK) AFTER THE DATE HEREOF; PROVIDED, THAT, (A) IF A
CASH DOMINION PERIOD EXISTS, AGENT SHALL RECEIVE PROMPT WRITTEN NOTICE OF SUCH
ISSUANCE AND SALE AND (B) IF A CASH DOMINION PERIOD EXISTS, ALL OF THE NET CASH
PROCEEDS OF THE SALE AND ISSUANCE OF SUCH CAPITAL STOCK SHALL PROMPTLY BE PAID
TO AGENT FOR APPLICATION TO THE OBLIGATIONS IN ACCORDANCE WITH SECTION 6.4(A)
HEREOF,

 

(IV)          THE ISSUANCE OF CAPITAL STOCK OF ANY BORROWER OR GUARANTOR
CONSISTING OF COMMON STOCK PURSUANT TO AN EMPLOYEE STOCK OPTION OR GRANT OR
SIMILAR EQUITY PLAN OR 401(K) PLANS OF SUCH BORROWER OR GUARANTOR FOR THE
BENEFIT OF ITS EMPLOYEES, DIRECTORS AND CONSULTANTS, PROVIDED, THAT, IN NO EVENT
SHALL SUCH BORROWER OR GUARANTOR BE REQUIRED TO ISSUE, OR SHALL SUCH BORROWER OR
GUARANTOR ISSUE, CAPITAL STOCK PURSUANT TO SUCH STOCK PLANS OR 401(K) PLANS
WHICH WOULD RESULT IN A CHANGE OF CONTROL OR OTHER EVENT OF DEFAULT, AND

 

(V)           THE SALE, TRANSFER, LEASE, SUBLEASE OR OTHER DISPOSITION OF ASSETS
OF ANY BORROWER OR GUARANTOR TO ANOTHER BORROWER OR GUARANTOR,

 

(VI)          THE GRANT OF NON-EXCLUSIVE LICENSES OF INTELLECTUAL PROPERTY IN
THE ORDINARY COURSE OF BUSINESS,

 

(VII)         LEASES OR SUBLEASES OF REAL PROPERTY PERMITTED UNDER SECTION
9.8(M) OR 9.12 HEREOF,

 

(VIII)        THE SALE OR OTHER DISPOSITION OF CASH EQUIVALENTS FOR FAIR MARKET
VALUE IN THE ORDINARY COURSE OF BUSINESS,

 

(IX)           THE ISSUANCE AND SALE BY ANY BORROWER (OTHER THAN PARENT) OR
GUARANTOR OF ITS CAPITAL STOCK (OTHER THAN DISQUALIFIED CAPITAL STOCK) TO
ANOTHER BORROWER OR

 

85

--------------------------------------------------------------------------------

 

GUARANTOR; PROVIDED, THAT, AGENT SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO AGENT (A) EVIDENCE THAT AGENT HAS A VALID AND
PERFECTED FIRST PRIORITY SECURITY INTEREST IN AND LIEN UPON ALL SUCH CAPITAL
STOCK AND (B) SUCH OTHER AGREEMENTS, DOCUMENTS AND INSTRUMENTS AS AGENT MAY
REASONABLY REQUEST TO EFFECTUATE THE PURPOSE AND INTENT OF CLAUSE (A) ABOVE,

 

(X)            THE SALE OF REAL ESTATE AND EQUIPMENT IN CONNECTION WITH A
SALE-LEASEBACK TRANSACTION PERMITTED UNDER SECTION 9.7(D) HEREOF (INCLUDING THE
SALE OF THE CAPITAL STOCK OF ANY PROPCO AND THE LEASEBACK OF REAL PROPERTY AND
EQUIPMENT OWNED BY SUCH PROPCO),

 

(XI)           THE SALE, TRANSFER OR OTHER DISPOSITION BY THE PETRO COMPANIES TO
AN EXCLUDED SUBSIDIARY OF THE FRANCHISE AGREEMENTS BETWEEN ANY OF THE PETRO
COMPANIES AND ITS FRANCHISEES; PROVIDED, THAT, AS OF THE DATE OF SUCH SALE,
TRANSFER OR DISPOSITION AND AFTER GIVING EFFECT THERETO, NO DEFAULT OR EVENT OF
DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, AND

 

(XII)          THE SALE OR OTHER DISPOSITION OF ASSETS OF ANY BORROWER OR
GUARANTOR NOT OTHERWISE PERMITTED UNDER THE FOREGOING PROVISIONS OF THIS SECTION
9.7(B) ABOVE (OTHER THAN THE SALE OR DISPOSITION OF ACCOUNTS OF ANY BORROWER OR
GUARANTOR OR CAPITAL STOCK OF ANY BORROWER); PROVIDED, THAT, (A) AS OF THE DATE
OF SUCH SALE OR DISPOSITION AND AFTER GIVING EFFECT THERETO, NO DEFAULT OR EVENT
OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, (B) SUCH SALE OR DISPOSITION
SHALL BE ON COMMERCIALLY REASONABLE TERMS IN A BONA FIDE ARMS LENGTH
TRANSACTION, (C) AS OF THE DATE OF SUCH SALE OR DISPOSITION AND AFTER GIVING
EFFECT THERETO, THE AGGREGATE NET BOOK VALUE OF ALL OF THE ASSETS SO SOLD OR
DISPOSED OF IN ANY FISCAL YEAR OF PARENT SHALL NOT EXCEED $20,000,000, (D) AS OF
THE DATE OF SUCH SALE OR DISPOSITION AND AFTER GIVING EFFECT THERETO, EXCESS
AVAILABILITY PLUS UNRESTRICTED CASH SHALL NOT BE LESS THAN $20,000,000, (E) SUCH
SALE OR DISPOSITION SHALL NOT BE IN CONNECTION WITH ANY SALE-LEASEBACK
TRANSACTION (IT BEING UNDERSTOOD THAT ANY SUCH SALE-LEASEBACK TRANSACTION SHALL
BE GOVERNED BY THE TERMS OF SECTION 9.7(B)(X) HEREOF), (F) IF ANY OF THE ASSETS
TO BE SOLD OR DISPOSED OF (INCLUDING THE EQUIPMENT OR REAL PROPERTY OWNED BY ANY
PROPCO) IS INCLUDED IN THE BORROWING BASE OR IF A CASH DOMINION PERIOD EXISTS,
ALL OF THE NET CASH PROCEEDS OF SUCH SALE OR DISPOSITION SHALL PROMPTLY BE PAID
TO AGENT FOR APPLICATION TO THE OBLIGATIONS IN ACCORDANCE WITH SECTION 6.4(A)
HEREOF,

 

(C)           WIND UP, LIQUIDATE OR DISSOLVE EXCEPT THAT ANY GUARANTOR MAY WIND
UP, LIQUIDATE AND DISSOLVE, PROVIDED, THAT, EACH OF THE FOLLOWING CONDITIONS IS
SATISFIED, (I) EFFECTIVE UPON SUCH WINDING UP, LIQUIDATION OR DISSOLUTION, ALL
OF THE ASSETS AND PROPERTIES OF SUCH GUARANTOR SHALL BE DULY AND VALIDLY
TRANSFERRED AND ASSIGNED TO A BORROWER OR ANOTHER GUARANTOR, (II) AGENT SHALL
HAVE RECEIVED ALL DOCUMENTS AND AGREEMENTS THAT ANY BORROWER OR GUARANTOR HAS
FILED WITH ANY GOVERNMENTAL AUTHORITY OR AS ARE OTHERWISE REQUIRED TO EFFECTUATE
SUCH WINDING UP, LIQUIDATION OR DISSOLUTION, (III) NO BORROWER OR GUARANTOR
SHALL ASSUME ANY INDEBTEDNESS, OBLIGATIONS OR LIABILITIES AS A RESULT OF SUCH
WINDING UP, LIQUIDATION OR DISSOLUTION, OR OTHERWISE BECOME LIABLE IN RESPECT OF
ANY OBLIGATIONS OR LIABILITIES OF THE ENTITY THAT IS WINDING UP, LIQUIDATING OR
DISSOLVING, UNLESS SUCH INDEBTEDNESS IS OTHERWISE EXPRESSLY PERMITTED HEREUNDER,
(IV) AGENT SHALL RECEIVE PROMPT WRITTEN NOTICE OF ANY SUCH WINDING UP,
LIQUIDATION OR DISSOLUTION, AND (V) AS OF THE DATE OF SUCH WINDING UP,
LIQUIDATION OR DISSOLUTION AND AFTER GIVING EFFECT THERETO, NO DEFAULT OR EVENT
OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING;

 

(D)           ENTER INTO ANY SALE-LEASEBACK TRANSACTION, EXCEPT FOR THE
SALE-LEASEBACK OF REAL PROPERTY AND EQUIPMENT (INCLUDING THE SALE OF THE CAPITAL
STOCK OF ANY PROPCO AND THE LEASEBACK OF REAL PROPERTY AND EQUIPMENT OWNED BY
SUCH PROPCO); PROVIDED, THAT, EACH OF THE

 

86

--------------------------------------------------------------------------------

 

FOLLOWING CONDITIONS IS SATISFIED: (I) AGENT SHALL RECEIVE PROMPT WRITTEN NOTICE
OF ANY SUCH SALE-LEASEBACK, (II) PROMPTLY UPON AGENT’S REQUEST, AGENT SHALL HAVE
RECEIVED TRUE, CORRECT AND COMPLETE COPIES OF ALL MATERIAL AGREEMENTS, DOCUMENTS
AND INSTRUMENTS RELATED TO SUCH SALE-LEASEBACK, (III) AS OF THE DATE OF THE
CONSUMMATION OF SUCH SALE-LEASEBACK AND AFTER GIVING EFFECT THERETO, NO DEFAULT
OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, (IV) IF ANY EQUIPMENT
OR REAL PROPERTY SUBJECT TO SUCH SALE LEASEBACK TRANSACTION (WHETHER DIRECTLY OR
INDIRECTLY THROUGH PROPCO) IS INCLUDED IN THE BORROWING BASE OR IF A CASH
DOMINION PERIOD EXISTS, ALL OF THE NET CASH PROCEEDS OF SUCH SALE-LEASEBACK
SHALL PROMPTLY BE PAID TO AGENT FOR APPLICATION TO THE OBLIGATIONS IN ACCORDANCE
WITH SECTION 6.4(A) HEREOF, (V) SUCH SALE-LEASEBACK TRANSACTION SHALL BE ON
COMMERCIALLY REASONABLE TERMS IN A BONA FIDE ARMS-LENGTH TRANSACTION, AND (VI)
AS OF THE DATE OF SUCH SALE-LEASEBACK TRANSACTION AND AFTER GIVING EFFECT
THERETO, EXCESS AVAILABILITY PLUS UNRESTRICTED CASH SHALL NOT BE LESS THAN
$20,000,000; AND

 

(E)           AGREE TO DO ANY OF THE FOREGOING.

 

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, NO
BORROWER OR GUARANTOR (OTHER THAN A PETRO COMPANY) SHALL, PRIOR TO THE PETRO
EXISTING SECURITY AGREEMENT TERMINATION DATE, SELL, LEASE, TRANSFER, ASSIGN,
LICENSE, ABANDON OR OTHERWISE DISPOSE OF ANY CAPITAL STOCK, INDEBTEDNESS OR
OTHER ASSETS TO A PETRO COMPANY UNLESS, AS OF THE DATE OF ANY SUCH SALE, LEASE,
TRANSFER, ASSIGNMENT, LICENSE, ABANDONMENT OR DISPOSITION, NO DEFAULT OR EVENT
OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AND EXCESS AVAILABILITY PLUS
UNRESTRICTED CASH SHALL NOT BE LESS THAN AN AMOUNT EQUAL TO THE THIRTY-FIVE
(35%) PERCENT OF THE MAXIMUM CREDIT.

 

9.8           Encumbrances. Each Borrower and Guarantor shall not create, incur,
assume or suffer to exist any security interest, mortgage, pledge, lien, charge
or other encumbrance of any nature whatsoever on any of its assets or
properties, including the Collateral, or file or permit the filing of, or permit
to remain in effect, any financing statement or other similar notice of any
security interest or lien with respect to any such assets or properties, except:

 

(A)           THE SECURITY INTERESTS AND LIENS OF AGENT FOR ITSELF AND THE
BENEFIT OF SECURED PARTIES;

 

(B)           LIENS SECURING THE PAYMENT OF TAXES, ASSESSMENTS OR OTHER
GOVERNMENTAL CHARGES OR LEVIES EITHER NOT YET OVERDUE OR THE VALIDITY OF WHICH
ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS DILIGENTLY PURSUED
AND AVAILABLE TO SUCH BORROWER OR GUARANTOR, AS THE CASE MAY BE AND WITH RESPECT
TO WHICH ADEQUATE RESERVES HAVE BEEN SET ASIDE ON ITS BOOKS;

 

(C)           NON-CONSENSUAL STATUTORY LIENS (OTHER THAN LIENS SECURING THE
PAYMENT OF TAXES) ARISING IN THE ORDINARY COURSE OF SUCH BORROWER’S OR
GUARANTOR’S BUSINESS TO THE EXTENT: (I) SUCH LIENS SECURE OBLIGATIONS WHICH ARE
NOT OVERDUE OR (II) SUCH LIENS SECURE OBLIGATIONS RELATING TO CLAIMS OR
LIABILITIES WHICH ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS
DILIGENTLY PURSUED AND AVAILABLE TO SUCH BORROWER OR GUARANTOR, IN EACH CASE
PRIOR TO THE COMMENCEMENT OF FORECLOSURE OR OTHER SIMILAR PROCEEDINGS AND WITH
RESPECT TO WHICH ADEQUATE RESERVES HAVE BEEN SET ASIDE ON ITS BOOKS;

 

(D)           ZONING RESTRICTIONS, EASEMENTS, LICENSES, COVENANTS AND OTHER
RESTRICTIONS AFFECTING THE USE OF REAL PROPERTY WHICH DO NOT INTERFERE IN ANY
MATERIAL RESPECT WITH THE USE OF SUCH REAL PROPERTY OR ORDINARY CONDUCT OF THE
BUSINESS OF SUCH BORROWER OR, GUARANTOR AS

 

87

--------------------------------------------------------------------------------

 

PRESENTLY CONDUCTED THEREON OR MATERIALLY IMPAIR THE VALUE OF THE REAL PROPERTY
WHICH MAY BE SUBJECT THERETO;

 

(E)           PURCHASE MONEY SECURITY INTERESTS IN EQUIPMENT (INCLUDING CAPITAL
LEASES) TO SECURE INDEBTEDNESS PERMITTED UNDER SECTION 9.9(B) HEREOF;

 

(F)            PLEDGES AND DEPOSITS OF CASH BY ANY BORROWER OR GUARANTOR AFTER
THE DATE HEREOF IN THE ORDINARY COURSE OF BUSINESS IN CONNECTION WITH WORKERS’
COMPENSATION, UNEMPLOYMENT INSURANCE AND OTHER TYPES OF SOCIAL SECURITY BENEFITS
CONSISTENT WITH THE CURRENT PRACTICES OF SUCH BORROWER OR GUARANTOR AS OF THE
DATE HEREOF;

 

(G)           PLEDGES AND DEPOSITS OF CASH BY ANY BORROWER OR GUARANTOR AFTER
THE DATE HEREOF TO SECURE THE PERFORMANCE OF TENDERS, BIDS, LEASES, TRADE
CONTRACTS (OTHER THAN FOR THE REPAYMENT OF INDEBTEDNESS), STATUTORY OBLIGATIONS
AND OTHER SIMILAR OBLIGATIONS IN EACH CASE IN THE ORDINARY COURSE OF BUSINESS
CONSISTENT WITH THE CURRENT PRACTICES OF SUCH BORROWER OR GUARANTOR AS OF THE
DATE HEREOF;

 

(H)           LIENS ARISING FROM (I) ANY LEASE AGREEMENT (OR SUBLEASE WITH
RESPECT THERETO) AND THE PRECAUTIONARY UCC FINANCING STATEMENT FILINGS IN
RESPECT THEREOF AND (II) EQUIPMENT OR OTHER MATERIALS WHICH ARE NOT OWNED BY ANY
BORROWER OR GUARANTOR LOCATED ON THE PREMISES OF SUCH BORROWER OR GUARANTOR (BUT
NOT IN CONNECTION WITH, OR AS PART OF, THE FINANCING THEREOF) FROM TIME TO TIME
IN THE ORDINARY COURSE OF BUSINESS AND CONSISTENT WITH CURRENT PRACTICES OF SUCH
BORROWER OR GUARANTOR AND THE PRECAUTIONARY UCC FINANCING STATEMENT FILINGS IN
RESPECT THEREOF;

 

(I)            JUDGMENTS AND OTHER SIMILAR LIENS ARISING IN CONNECTION WITH
COURT PROCEEDINGS THAT DO NOT CONSTITUTE AN EVENT OF DEFAULT, PROVIDED, THAT,
(I) ADEQUATE RESERVES OR OTHER APPROPRIATE PROVISION, IF ANY, AS ARE REQUIRED BY
GAAP HAVE BEEN MADE THEREFOR, (II) SUCH JUDGMENT OR LIEN SHALL BE EFFECTIVELY
STAYED OR BONDED WITHIN THIRTY (30) DAYS AFTER THE DATE SUCH JUDGMENT OR LIEN
FIRST AROSE AND (III) AGENT MAY ESTABLISH A RESERVE WITH RESPECT THERETO;

 

(J)            LIENS OR RIGHTS OF SETOFF AGAINST CREDIT BALANCES OF BORROWERS
AND GUARANTORS WITH CREDIT CARD ISSUERS OR CREDIT CARD PROCESSORS OR AMOUNTS
OWING BY SUCH CREDIT CARD ISSUERS OR CREDIT CARD PROCESSORS TO BORROWERS OR
GUARANTORS IN THE ORDINARY COURSE OF BUSINESS, BUT NOT LIENS ON OR RIGHTS OF
SETOFF AGAINST ANY OTHER PROPERTY OR ASSETS OF BORROWERS OR GUARANTORS, PURSUANT
TO THE CREDIT CARD AGREEMENTS TO SECURE THE OBLIGATIONS OF BORROWERS AND
GUARANTORS TO THE CREDIT CARD ISSUERS OR CREDIT CARD PROCESSORS AS A RESULT OF
FEES AND CHARGEBACKS;

 

(K)           LIENS IN FAVOR OF JPMORGAN CHASE BANK (“CHASE”) AND/OR WELLS FARGO
BANK (“WELLS”) ON CASH COLLATERAL DEPOSITED WITH CHASE AND/OR WELLS ON OR PRIOR
TO THE DATE HEREOF IN AN AGGREGATE AMOUNT NOT TO EXCEED $36,837,000 TO SECURE
THE LETTERS OF CREDIT ISSUED BY CHASE AND/OR WELLS WHICH ARE LISTED ON SCHEDULE
9.9 TO THE INFORMATION CERTIFICATE;

 

(L)            SECURITY INTERESTS IN OR LIENS ON EQUIPMENT AND REAL PROPERTY OF
BORROWERS AND GUARANTORS (OTHER THAN EQUIPMENT OR REAL PROPERTY INCLUDED IN THE
BORROWING BASE) OR THE CAPITAL STOCK OF ANY PROPCO TO SECURE INDEBTEDNESS
PERMITTED UNDER SECTION 9.9(H) HEREOF;

 

88

--------------------------------------------------------------------------------

 

(M)          LEASES OR SUBLEASES OF REAL PROPERTY GRANTED BY ANY BORROWER OR
GUARANTOR IN THE ORDINARY COURSE OF BUSINESS AND CONSISTENT WITH PAST PRACTICE
(I) TO ITS FRANCHISEES AND (II) TO ANY PERSON SO LONG AS ANY SUCH LEASES OR
SUBLEASES PURSUANT TO THIS CLAUSE (II) DO NOT INTERFERE IN ANY MATERIAL RESPECT
WITH THE USE OF SUCH REAL PROPERTY OR THE ORDINARY CONDUCT OF THE BUSINESS OF
SUCH BORROWER OR GUARANTOR AS PRESENTLY CONDUCTED THEREON OR MATERIALLY IMPAIR
THE VALUE OF SUCH REAL PROPERTY;

 

(N)           SECURITY INTERESTS IN AND LIENS ON THE ASSETS OF THE PETRO
COMPANIES (INCLUDING, WITHOUT LIMITATION, THE PETRO INDENTURE CASH COLLATERAL)
AND THE CAPITAL STOCK IN PETRO IN FAVOR OF THE PETRO INDENTURE TRUSTEE TO SECURE
THE INDEBTEDNESS PERMITTED UNDER SECTION 9.9(J) HEREOF; PROVIDED, THAT, SUCH
SECURITY INTERESTS AND LIENS ON THE PETRO INDENTURE CASH COLLATERAL SHALL BE
TERMINATED AND RELEASED BY NO LATER THAN MAY 15, 2008 AND SUCH SECURITY
INTERESTS AND LIENS ON THE ASSETS OF THE PETRO COMPANIES (OTHER THAN THE PETRO
INDENTURE CASH COLLATERAL) AND THE CAPITAL STOCK IN PETRO SHALL BE TERMINATED ON
THE PETRO EXISTING SECURITY AGREEMENT TERMINATION DATE;

 

(O)           SECURITY INTERESTS IN AND LIENS ON THE ASSETS OF THE PETRO
COMPANIES (EXCLUDING THE PETRO INDENTURE CASH COLLATERAL) AND THE CAPITAL STOCK
IN PETRO IN FAVOR OF EXXONMOBIL TO SECURE TRADE LIABILITIES OWING BY THE PETRO
COMPANIES TO EXXONMOBIL IN AN AGGREGATE AMOUNT NOT TO EXCEED $15,000,000;
PROVIDED, THAT, SUCH SECURITY INTERESTS AND LIENS SHALL BE TERMINATED AND
RELEASED ON THE PETRO EXISTING SECURITY AGREEMENT TERMINATION DATE; AND

 

(P)           THE SECURITY INTERESTS AND LIENS SET FORTH ON SCHEDULE 8.4 TO THE
INFORMATION CERTIFICATE WHICH ARE NOT OTHERWISE PERMITTED UNDER THIS SECTION 9.8
ABOVE.

 

9.9      Indebtedness. Each Borrower and Guarantor shall not incur, create,
assume, become or be liable in any manner with respect to, or permit to exist,
any Indebtedness, or guarantee, assume, endorse, or otherwise become responsible
for (directly or indirectly), the Indebtedness, performance, obligations or
dividends of any other Person, except:

 

(A)           THE OBLIGATIONS;

 

(B)           PURCHASE MONEY INDEBTEDNESS (INCLUDING CAPITAL LEASES) ARISING
AFTER THE DATE HEREOF TO THE EXTENT SECURED BY PURCHASE MONEY SECURITY INTERESTS
IN EQUIPMENT (INCLUDING CAPITAL LEASES) NOT TO EXCEED $25,000,000 IN THE
AGGREGATE AT ANY TIME OUTSTANDING SO LONG AS SUCH SECURITY INTERESTS DO NOT
APPLY TO ANY PROPERTY OF SUCH BORROWER OR GUARANTOR OTHER THAN THE EQUIPMENT SO
ACQUIRED, AND THE INDEBTEDNESS SECURED THEREBY DOES NOT EXCEED THE COST OF THE
EQUIPMENT SO ACQUIRED, AS THE CASE MAY BE;

 

(C)           (I) GUARANTEES BY ANY BORROWER OR GUARANTOR OF ANY INDEBTEDNESS OF
ANOTHER BORROWER OR GUARANTOR WHICH IS PERMITTED UNDER THIS SECTION 9.9 AND (II)
GUARANTEES BY ANY BORROWER OR GUARANTOR OF ANY LIABILITIES (OTHER THAN
INDEBTEDNESS) OF ANOTHER BORROWER OR GUARANTOR SO LONG AS SUCH OTHER BORROWER OR
GUARANTOR IS NOT PROHIBITED FROM INCURRING SUCH LIABILITIES BY THE TERMS OF THIS
AGREEMENT;

 

(D)           THE INDEBTEDNESS OF ANY BORROWER OR GUARANTOR TO ANY OTHER
BORROWER OR GUARANTOR ARISING AFTER THE DATE HEREOF PURSUANT TO LOANS BY ANY
BORROWER OR GUARANTOR PERMITTED UNDER SECTION 9.10(G) HEREOF;

 

89

--------------------------------------------------------------------------------

 

(E)           UNSECURED INDEBTEDNESS OF ANY BORROWER OR GUARANTOR ARISING AFTER
THE DATE HEREOF TO ANY THIRD PERSON (BUT NOT TO ANY OTHER BORROWER OR
GUARANTOR), PROVIDED, THAT, EACH OF THE FOLLOWING CONDITIONS IS SATISFIED AS
DETERMINED BY AGENT: (I) IF THE AMOUNT OF SUCH INDEBTEDNESS TO BE INCURRED
EXCEEDS $20,000,000, AGENT SHALL HAVE RECEIVED NOT LESS THAN FIVE (5) BUSINESS
DAYS (OR SUCH LESSER PERIOD AS TO WHICH AGENT MAY AGREE) OF THE INTENTION OF
SUCH BORROWER OR GUARANTOR TO INCUR SUCH INDEBTEDNESS, (II) UPON AGENT’S REQUEST
AGENT SHALL HAVE RECEIVED TRUE, CORRECT AND COMPLETE COPIES OF ALL MATERIAL
AGREEMENTS, DOCUMENTS AND INSTRUMENTS EVIDENCING OR OTHERWISE RELATED TO SUCH
INDEBTEDNESS, (III) AS OF THE DATE OF INCURRING SUCH INDEBTEDNESS AND AFTER
GIVING EFFECT THERETO, NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING, AND (IV) BORROWERS AND GUARANTORS SHALL FURNISH TO AGENT ALL DEMANDS
OR MATERIAL NOTICES IN CONNECTION WITH SUCH INDEBTEDNESS EITHER RECEIVED BY ANY
BORROWER OR GUARANTOR OR ON ITS BEHALF PROMPTLY AFTER THE RECEIPT THEREOF, OR
SENT BY ANY BORROWER OR GUARANTOR OR ON ITS BEHALF CONCURRENTLY WITH THE SENDING
THEREOF, AS THE CASE MAY BE;

 

(F)            INDEBTEDNESS OF ANY BORROWER OR GUARANTOR ENTERED INTO IN THE
ORDINARY COURSE OF BUSINESS PURSUANT TO A HEDGE AGREEMENT; PROVIDED, THAT, (I)
SUCH ARRANGEMENTS ARE WITH A BANK PRODUCT PROVIDER, (II) SUCH ARRANGEMENTS ARE
FOR BONA FIDE HEDGING PURPOSES, AND (III) SUCH INDEBTEDNESS SHALL BE UNSECURED,
EXCEPT TO THE EXTENT SUCH INDEBTEDNESS CONSTITUTES PART OF THE OBLIGATIONS
ARISING UNDER OR PURSUANT TO HEDGE AGREEMENTS WITH ANY BANK PRODUCT PROVIDER
THAT ARE SECURED UNDER THE TERMS HEREOF;

 

(G)           UNSECURED GUARANTEES BY A BORROWER OR GUARANTOR OF THE OBLIGATIONS
OF A SPECIFIED SUBSIDIARY OR ANOTHER BORROWER OR GUARANTOR ARISING UNDER A LEASE
AGREEMENT (OR A SUBLEASE WITH RESPECT THERETO); PROVIDED, THAT, (I) THE PERSON
ISSUING SUCH GUARANTEE IS PERMITTED HEREUNDER TO INCUR DIRECTLY THE OBLIGATION
THAT IS BEING GUARANTEED AND (II) AS OF THE DATE ON WHICH SUCH GUARANTEE IS
ISSUED AND AFTER GIVING EFFECT THERETO, NO EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING;

 

(H)           INDEBTEDNESS OF ANY BORROWER OR GUARANTOR ARISING AFTER THE DATE
HEREOF TO ANY THIRD PERSON (BUT NOT TO ANY OTHER BORROWER OR GUARANTOR) SECURED
BY A SECURITY INTEREST IN OR LIEN ON REAL PROPERTY OR EQUIPMENT OF ANY BORROWER
OR GUARANTOR OR THE CAPITAL STOCK OF ANY PROPCO, PROVIDED, THAT, EACH OF THE
FOLLOWING CONDITIONS IS SATISFIED AS REASONABLY DETERMINED BY AGENT: (I) AGENT
SHALL HAVE RECEIVED NOT LESS THAN FIVE (5) BUSINESS DAYS PRIOR WRITTEN NOTICE
(OR SUCH LESSER NOTICE PERIOD AS TO WHICH AGENT MAY REASONABLY AGREE) OF THE
INTENTION OF SUCH BORROWER OR GUARANTOR TO INCUR SUCH INDEBTEDNESS, EXCEPT THAT,
IF SUCH INDEBTEDNESS IS INCURRED IN CONNECTION WITH A PERMITTED ACQUISITION
WHERE THE CONSIDERATION PAID OR PAYABLE IS LESS THAN OR EQUAL TO $25,000,000,
AGENT SHALL RECEIVE PROMPT WRITTEN NOTICE THEREOF AS IS REASONABLY PRACTICABLE
UNDER THE CIRCUMSTANCES, (II) PROMPTLY UPON AGENT’S REQUEST, AGENT SHALL HAVE
RECEIVED TRUE, CORRECT AND COMPLETE COPIES OF ALL MATERIAL AGREEMENTS, DOCUMENTS
AND INSTRUMENTS EVIDENCING OR OTHERWISE RELATED TO SUCH INDEBTEDNESS, (III) AS
OF THE DATE OF INCURRING SUCH INDEBTEDNESS (EXCLUDING QUALIFIED ASSUMED
INDEBTEDNESS), AGENT SHALL HAVE RECEIVED EVIDENCE, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO IT, WHICH DEMONSTRATES THAT PARENT AND ITS TESTED
SUBSIDIARIES (ON A CONSOLIDATED BASIS) WOULD HAVE HAD A DEBT INCURRENCE RATIO OF
NOT LESS THAN 1.10 TO 1.00 FOR THE MOST RECENTLY ENDED PERIOD OF TWELVE (12)
CONSECUTIVE MONTHS FOR WHICH AGENT HAS RECEIVED FINANCIAL STATEMENTS OF PARENT
AND ITS SUBSIDIARIES, DETERMINED ON A PRO FORMA BASIS AS IF SUCH INDEBTEDNESS
(EXCLUDING QUALIFIED ASSUMED INDEBTEDNESS INCURRED ON SUCH DATE) HAD BEEN
INCURRED ON THE FIRST DAY OF SUCH PERIOD; (IV) AS OF THE DATE OF INCURRING SUCH
INDEBTEDNESS AND AFTER GIVING EFFECT THERETO, NO DEFAULT OR EVENT OF DEFAULT
SHALL HAVE OCCURRED

 

90

--------------------------------------------------------------------------------

 

AND BE CONTINUING, AND (V) BORROWERS AND GUARANTORS SHALL FURNISH TO AGENT ALL
DEMANDS OR MATERIAL NOTICES IN CONNECTION WITH SUCH INDEBTEDNESS EITHER RECEIVED
BY ANY BORROWER OR GUARANTOR OR ON ITS BEHALF PROMPTLY AFTER THE RECEIPT
THEREOF, OR SENT BY ANY BORROWER OR GUARANTOR OR ON BEHALF CONCURRENTLY WITH THE
SENDING THEREOF, AS THE CASE MAY BE;

 

(I)            INDEBTEDNESS OF ANY BORROWER OR GUARANTOR UNDER ANY COMMODITY
HEDGE, COMMODITY SWAP OR SIMILAR AGREEMENT ENTERED INTO IN THE ORDINARY COURSE
OF BUSINESS FOR THE PURPOSE OF PROTECTING AGAINST OR MANAGING EXPOSURE TO
FLUCTUATIONS IN COMMODITY PRICES; PROVIDED, THAT, (I) SUCH ARRANGEMENTS ARE WITH
A BANK OR OTHER FINANCIAL INSTITUTION THAT HAS COMBINED CAPITAL AND SURPLUS AND
UNDIVIDED PROFITS OF NOT LESS THAN $1,000,000,000, (II) SUCH ARRANGEMENTS ARE
FOR BONA FIDE HEDGING PURPOSES, AND (III) SUCH INDEBTEDNESS SHALL BE UNSECURED
(BUT SUCH INDEBTEDNESS MAY BE SUPPORTED BY A LETTER OF CREDIT ACCOMMODATION
ISSUED IN ACCORDANCE WITH THE TERMS HEREOF);

 

(J)            INDEBTEDNESS OF THE PETRO COMPANIES EVIDENCED BY OR ARISING UNDER
THE PETRO INDENTURE; PROVIDED, THAT, (I) THE AGGREGATE OUTSTANDING PRINCIPAL
AMOUNT OF SUCH INDEBTEDNESS SHALL NOT EXCEED $250,000,000, (II) SUCH
INDEBTEDNESS SHALL AT ALL TIMES BE SECURED BY THE PETRO INDENTURE CASH
COLLATERAL AND (III) THE PETRO INDENTURE CASH COLLATERAL SHALL BE APPLIED TO
REDEEM ALL SUCH INDEBTEDNESS, TOGETHER WITH ALL INTEREST, FEES, PREMIUMS, AND
PENALTIES OWING IN RESPECT THEREOF, BY NO LATER THAN FEBRUARY 15, 2008; AND

 

(K)           THE INDEBTEDNESS SET FORTH ON SCHEDULE 9.9 TO THE INFORMATION
CERTIFICATE WHICH IS NOT OTHERWISE PERMITTED BY THIS SECTION 9.9 ABOVE;
PROVIDED, THAT, BORROWERS AND GUARANTORS SHALL FURNISH TO AGENT ALL DEMANDS OR
MATERIAL NOTICES IN CONNECTION WITH SUCH INDEBTEDNESS EITHER RECEIVED BY ANY
BORROWER OR GUARANTOR OR ON ITS BEHALF, PROMPTLY AFTER THE RECEIPT THEREOF, OR
SENT BY ANY BORROWER OR GUARANTOR OR ON ITS BEHALF, CONCURRENTLY WITH THE
SENDING THEREOF, AS THE CASE MAY BE.

 

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, THE PETRO
COMPANIES AND PETRO HOLDINGS SHALL NOT, PRIOR TO THE PETRO EXISTING SECURITY
AGREEMENT TERMINATION DATE, INCUR, CREATE, ASSUME, BECOME LIABLE WITH RESPECT
TO, OR PERMIT TO EXIST ANY INDEBTEDNESS, OR GUARANTEE, ASSUME, ENDORSE, OR
BECOME RESPONSIBLE FOR (DIRECTLY OR INDIRECTLY), THE INDEBTEDNESS OF ANY OTHER
PERSON, EXCEPT FOR INDEBTEDNESS PERMITTED UNDER SECTIONS 9.9(A), (E), (J) AND
(K); PROVIDED, THAT, ANY SUCH INDEBTEDNESS OF THE PETRO COMPANIES AND PETRO
HOLDINGS UNDER SECTION 9.9(E) HEREOF SHALL BE SUBORDINATED IN AN MANNER
REASONABLY SATISFACTORY TO AGENT.

 

9.10         Loans, Investments, Etc. Each Borrower and Guarantor shall not,
directly or indirectly, make any loans or advance money or property to any
person, or invest in (by capital contribution, dividend or otherwise) or
purchase or repurchase the Capital Stock or Indebtedness or all or a substantial
part of the assets or property of any person, or form or acquire any
Subsidiaries, or agree to do any of the foregoing, except:

 

(A)           THE ENDORSEMENT OF INSTRUMENTS FOR COLLECTION OR DEPOSIT IN THE
ORDINARY COURSE OF BUSINESS;

 

(B)           INVESTMENTS IN CASH OR CASH EQUIVALENTS, PROVIDED, THAT, (I) IF A
CASH DOMINION PERIOD EXISTS, NO LOANS ARE THEN OUTSTANDING, EXCEPT THAT
NOTWITHSTANDING THAT ANY LOANS ARE OUTSTANDING IF A CASH DOMINION PERIOD EXISTS,
(A) BORROWERS AND GUARANTORS MAY FROM TIME TO TIME IN THE ORDINARY COURSE OF
BUSINESS CONSISTENT WITH THEIR CURRENT PRACTICES AS OF

 

91

--------------------------------------------------------------------------------

 

THE DATE HEREOF MAKE DEPOSITS OF CASH IN BANK ACCOUNTS USED FOR DISBURSEMENTS TO
THE EXTENT REQUIRED TO PROVIDE FUNDS FOR AMOUNTS DRAWN OR ANTICIPATED TO BE
DRAWN SHORTLY ON SUCH ACCOUNTS AND SUCH FUNDS MAY BE HELD IN CASH EQUIVALENTS
CONSISTING OF OVERNIGHT INVESTMENTS UNTIL SO DRAWN (SO LONG AS SUCH FUNDS AND
CASH EQUIVALENTS ARE NOT HELD MORE THAN THREE (3) BUSINESS DAYS FROM THE DATE OF
THE INITIAL DEPOSIT THEREOF) AND (B) BORROWERS AND GUARANTORS MAY HAVE CASH AT
RETAIL STORE LOCATIONS AND IN STORE ACCOUNTS TO THE EXTENT PERMITTED IN SECTION
6.3(A) HEREOF AND (II) THE TERMS AND CONDITIONS OF SECTION 5.2 HEREOF SHALL HAVE
BEEN SATISFIED WITH RESPECT TO THE DEPOSIT ACCOUNT, INVESTMENT ACCOUNT OR OTHER
ACCOUNT IN WHICH SUCH CASH OR CASH EQUIVALENTS ARE HELD;

 

(C)           THE EQUITY INVESTMENTS MADE BY EACH BORROWER AND GUARANTOR PRIOR
TO THE DATE HEREOF IN ANY OF ITS SUBSIDIARIES WHICH ARE NOT BORROWERS OR
GUARANTORS;

 

(D)           LOANS AND ADVANCES BY ANY BORROWER OR GUARANTOR TO EMPLOYEES OF
SUCH BORROWER OR GUARANTOR NOT TO EXCEED THE PRINCIPAL AMOUNT OF $5,000,000 IN
THE AGGREGATE AT ANY TIME OUTSTANDING FOR: (I) REASONABLY AND NECESSARY
WORK-RELATED TRAVEL OR OTHER ORDINARY BUSINESS EXPENSES TO BE INCURRED BY SUCH
EMPLOYEE IN CONNECTION WITH THEIR WORK FOR SUCH BORROWER OR GUARANTOR AND (II)
REASONABLE AND NECESSARY RELOCATION EXPENSES OF SUCH EMPLOYEES (INCLUDING HOME
MORTGAGE FINANCING FOR RELOCATED EMPLOYEES);

 

(E)           STOCK OR OBLIGATIONS ISSUED TO ANY BORROWER OR GUARANTOR BY ANY
PERSON (OR THE REPRESENTATIVE OF SUCH PERSON) IN RESPECT OF INDEBTEDNESS OF SUCH
PERSON OWING TO SUCH BORROWER OR GUARANTOR IN CONNECTION WITH THE INSOLVENCY,
BANKRUPTCY, RECEIVERSHIP OR REORGANIZATION OF SUCH PERSON OR A COMPOSITION OR
READJUSTMENT OF THE DEBTS OF SUCH PERSON;

 

(F)            OBLIGATIONS OF ACCOUNT DEBTORS TO ANY BORROWER OR GUARANTOR
ARISING FROM ACCOUNTS WHICH ARE PAST DUE EVIDENCED BY A PROMISSORY NOTE MADE BY
SUCH ACCOUNT DEBTOR PAYABLE TO SUCH BORROWER OR GUARANTOR; PROVIDED, THAT,
PROMPTLY UPON THE RECEIPT OF THE ORIGINAL OF ANY SUCH PROMISSORY NOTE BY SUCH
BORROWER OR GUARANTOR, SUCH PROMISSORY NOTE SHALL BE ENDORSED TO THE ORDER OF
AGENT BY SUCH BORROWER OR GUARANTOR AND PROMPTLY DELIVERED TO AGENT AS SO
ENDORSED TO THE EXTENT REQUIRED BY SECTION 5.2(B) HEREOF;

 

(G)           LOANS BY A BORROWER OR GUARANTOR TO ANOTHER BORROWER OR GUARANTOR
AFTER THE DATE HEREOF, PROVIDED, THAT,

 

(I)            AS TO ALL OF SUCH LOANS, THE INDEBTEDNESS ARISING PURSUANT TO ANY
SUCH LOAN SHALL NOT BE EVIDENCED BY A PROMISSORY NOTE OR OTHER INSTRUMENT,
UNLESS THE SINGLE ORIGINAL OF SUCH NOTE OR OTHER INSTRUMENT IS PROMPTLY
DELIVERED TO AGENT UPON ITS REQUEST TO HOLD AS PART OF THE COLLATERAL, WITH SUCH
ENDORSEMENT AND/OR ASSIGNMENT BY THE PAYEE OF SUCH NOTE OR OTHER INSTRUMENT AS
AGENT MAY REQUIRE, AND

 

(II)           AS TO LOANS BY A GUARANTOR TO A BORROWER, (A) THE INDEBTEDNESS
ARISING PURSUANT TO SUCH LOAN SHALL BE SUBJECT TO, AND SUBORDINATE IN RIGHT OF
PAYMENT TO, THE RIGHT OF AGENT AND LENDERS TO RECEIVE THE PRIOR FINAL PAYMENT
AND SATISFACTION IN FULL OF ALL OF THE OBLIGATIONS ON TERMS AND CONDITIONS
REASONABLY ACCEPTABLE TO AGENT, AND (B) PROMPTLY UPON AGENT’S REQUEST, AGENT
SHALL HAVE RECEIVED A SUBORDINATION AGREEMENT, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO AGENT, PROVIDING FOR THE TERMS OF THE SUBORDINATION IN RIGHT OF
PAYMENT OF SUCH INDEBTEDNESS OF SUCH BORROWER TO THE PRIOR FINAL PAYMENT AND
SATISFACTION IN FULL OF ALL OF THE OBLIGATIONS, DULY AUTHORIZED, EXECUTED AND
DELIVERED BY SUCH GUARANTOR AND SUCH BORROWER

 

92

--------------------------------------------------------------------------------

 

(IT BEING UNDERSTOOD THAT, SO LONG AS NO EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING, SUCH BORROWER MAY PAY, AND SUCH GUARANTOR MAY RECEIVE, PAYMENTS OF
PRINCIPAL AND INTEREST IN RESPECT OF SUCH INDEBTEDNESS);

 

(H)           ANY PERMITTED ACQUISITION; PROVIDED, THAT, IN NO EVENT SHALL ANY
ASSETS ACQUIRED PURSUANT TO ANY PERMITTED ACQUISITION BE DEEMED TO BE ELIGIBLE
ACCOUNTS, ELIGIBLE EQUIPMENT, ELIGIBLE REAL PROPERTY, ELIGIBLE CREDIT CARD
RECEIVABLES OR ELIGIBLE INVENTORY UNLESS THE FOLLOWING CONDITIONS SHALL BE
SATISFIED AS DETERMINED BY AGENT: (1) AGENT SHALL HAVE RECEIVED AN APPRAISAL OF
THE INVENTORY OF THE ACQUIRED BUSINESS AND SUCH OTHER ASSETS OF THE ACQUIRED
BUSINESS AS AGENT MAY SPECIFY, IN EACH CASE IN FORM AND CONTAINING ASSUMPTIONS
AND APPRAISAL METHODS SATISFACTORY TO AGENT BY AN APPRAISER ACCEPTABLE TO AGENT,
ON WHICH AGENT AND LENDERS ARE EXPRESSLY PERMITTED TO RELY, AND (2) AGENT SHALL
HAVE COMPLETED A FIELD EXAMINATION WITH RESPECT TO THE BUSINESS AND ASSETS OF
THE ACQUIRED BUSINESS IN ACCORDANCE WITH AGENT’S CUSTOMARY PROCEDURES AND
PRACTICES AND AS OTHERWISE REQUIRED BY THE NATURE AND CIRCUMSTANCES OF THE
BUSINESS OF THE ACQUIRED BUSINESS, THE SCOPE AND RESULTS OF WHICH SHALL BE
SATISFACTORY TO AGENT AND ANY ACCOUNTS, CREDIT CARD RECEIVABLES, INVENTORY,
EQUIPMENT OR REAL ESTATE OF THE ACQUIRED BUSINESS SHALL ONLY BE ELIGIBLE
ACCOUNTS, ELIGIBLE CREDIT CARD RECEIVABLES, ELIGIBLE INVENTORY, ELIGIBLE
EQUIPMENT OR ELIGIBLE REAL PROPERTY (AS THE CASE MAY BE) TO THE EXTENT THE
CRITERIA FOR ELIGIBLE ACCOUNTS, ELIGIBLE CREDIT CARD RECEIVABLES, ELIGIBLE
INVENTORY, ELIGIBLE EQUIPMENT OR ELIGIBLE REAL PROPERTY (AS THE CASE MAY BE) SET
FORTH HEREIN ARE SATISFIED WITH RESPECT THERETO IN ACCORDANCE WITH THIS
AGREEMENT (OR SUCH OTHER OR ADDITIONAL CRITERIA AS AGENT MAY IN GOOD FAITH
ESTABLISH WITH RESPECT THERETO IN ACCORDANCE WITH THIS AGREEMENT AND SUBJECT TO
SUCH RESERVES AS AGENT MAY IN GOOD FAITH ESTABLISH IN CONNECTION WITH THE
ACQUIRED BUSINESS);

 

(I)            EQUITY INVESTMENTS BY EACH BORROWER AND GUARANTOR IN ANOTHER
BORROWER OR GUARANTOR;

 

(J)            LOANS AND OTHER INVESTMENTS BY A BORROWER OR GUARANTOR TO A
PERSON THAT IS NEITHER AN HPT COMPANY OR AN AFFILIATE OF A BORROWER OR
GUARANTOR; PROVIDED, THAT, (I) AS OF THE DATE OF SUCH LOAN OR INVESTMENT AND
AFTER GIVING EFFECT THERETO, EXCESS AVAILABILITY PLUS UNRESTRICTED CASH SHALL
NOT BE LESS THAN THE AMOUNT EQUAL TO THIRTY-FIVE (35%) PERCENT OF THE MAXIMUM
CREDIT, (II) SUCH LOANS AND INVESTMENTS ARE NOT MADE IN CONNECTION WITH A
PERMITTED ACQUISITION, AND (III) AS OF THE DATE OF SUCH LOAN OR INVESTMENT AND
AFTER GIVING EFFECT THERETO, NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED
AND BE CONTINUING;

 

(K)           LOANS AND OTHER INVESTMENTS BY A BORROWER OR GUARANTOR TO EXCLUDED
SUBSIDIARIES; PROVIDED, THAT, (I) AS OF THE DATE OF SUCH LOAN OR INVESTMENT AND
AFTER GIVING EFFECT THERETO, EXCESS AVAILABILITY PLUS UNRESTRICTED CASH SHALL
NOT BE LESS THAN THE AMOUNT EQUAL TO THIRTY-FIVE (35%) PERCENT OF THE MAXIMUM
CREDIT, (II) AS OF THE DATE OF SUCH LOAN OR INVESTMENT AND AFTER GIVING EFFECT
THERETO, NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING,
(III) ALL INDEBTEDNESS AND OTHER OBLIGATIONS OF THE EXCLUDED SUBSIDIARIES SHALL
BE NON-RECOURSE TO BORROWERS AND GUARANTORS AND THEIR RESPECTIVE ASSETS AND (IV)
THE AGGREGATE AMOUNT OF ALL SUCH LOANS AND INVESTMENTS IN EXCLUDED SUBSIDIARIES
SHALL NOT EXCEED $5,000,000;

 

(L)            THE FORMATION OF ANY SUBSIDIARY; PROVIDED, THAT, IF ANY
SUBSIDIARY IS FORMED FOR THE PURPOSE OF MAKING, OR IN ANTICIPATION OF
CONSUMMATING, A PERMITTED ACQUISITION, AGENT SHALL HAVE RECEIVED ALL ITEMS
REQUIRED BY SECTIONS 5.2 AND 9.21 HEREOF WITH RESPECT TO SUCH SUBSIDIARY
(SUBJECT TO THE TERMS OF SECTION 9.21(D) HEREOF); AND

 

93

--------------------------------------------------------------------------------

 

(M)          THE LOANS AND ADVANCES SET FORTH ON SCHEDULE 9.10 TO THE
INFORMATION CERTIFICATE WHICH ARE NOT OTHERWISE PERMITTED BY THIS SECTION 9.10
ABOVE; PROVIDED , THAT, AS TO SUCH LOANS AND ADVANCES, BORROWERS AND GUARANTORS
SHALL NOT, DIRECTLY OR INDIRECTLY, AMEND, MODIFY, ALTER OR CHANGE THE TERMS OF
SUCH LOANS AND ADVANCES OR ANY AGREEMENT, DOCUMENT OR INSTRUMENT RELATED
THERETO.

 

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, NO
BORROWER OR GUARANTOR (OTHER THAN A PETRO COMPANY) SHALL, PRIOR TO THE PETRO
EXISTING SECURITY AGREEMENT TERMINATION DATE, MAKE ANY LOANS OR ADVANCES TO,
INVEST IN, OR PURCHASE OR REPURCHASE ANY CAPITAL STOCK, INDEBTEDNESS OR OTHER
ASSETS OF, ANY PETRO COMPANY UNLESS, AS OF THE DATE OF ANY SUCH LOAN, ADVANCE,
INVESTMENT, PURCHASE OR REPURCHASE, NO DEFAULT OF EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING AND EXCESS AVAILABILITY PLUS UNRESTRICTED CASH SHALL
NOT BE LESS THAN AN AMOUNT EQUAL TO THIRTY-FIVE (35%) PERCENT OF THE MAXIMUM
CREDIT.

 

9.11         Dividends and Redemptions. Each Borrower and Guarantor shall not
through any manner or means, directly or indirectly, declare, order, pay, make
or set apart, or agree to declare, order, pay, make or set apart, any sum for
any Restricted Payment except that:

 

(A)           ANY BORROWER OR GUARANTOR (OTHER THAN PARENT) MAY MAKE RESTRICTED
PAYMENTS TO ANY OTHER BORROWER OR GUARANTOR;

 

(B)           BORROWERS AND GUARANTORS MAY PAY DIVIDENDS TO THE EXTENT PERMITTED
IN SECTION 9.12 BELOW;

 

(C)           PARENT MAY MAKE RESTRICTED PAYMENTS IN CASH, FROM FUNDS LEGALLY
AVAILABLE THEREFOR; PROVIDED, THAT, WITH RESPECT TO EACH SUCH RESTRICTED
PAYMENT: (I) AGENT SHALL HAVE RECEIVED AT LEAST FIVE (5) BUSINESS DAYS PRIOR
WRITTEN NOTICE (OR SUCH LESSER NOTICE PERIOD AS TO WHICH AGENT MAY AGREE)
THEREOF, (II) AS OF THE DATE OF ANY SUCH PAYMENT AND AFTER GIVING EFFECT
THERETO, EXCESS AVAILABILITY PLUS UNRESTRICTED CASH SHALL NOT BE LESS THAN THE
AMOUNT EQUAL TO THIRTY-FIVE (35%) PERCENT OF THE MAXIMUM CREDIT, AND (III) AS OF
THE DATE OF ANY SUCH RESTRICTED PAYMENT AND AFTER GIVING EFFECT THERETO, NO
DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING; AND

 

(D)           PARENT MAY MAKE RESTRICTED PAYMENTS IN THE FORM OF CAPITAL STOCK
OF PARENT (OTHER THAN DISQUALIFIED CAPITAL STOCK); AND

 

(E)           PARENT MAY REPURCHASE CAPITAL STOCK OF PARENT DEEMED TO OCCUR UPON
THE CASHLESS EXERCISE OF STOCK OPTIONS OR WARRANTS IF SUCH CAPITAL STOCK
REPRESENTS A PORTION OF THE EXERCISE PRICE OF SUCH OPTIONS OR WARRANTS;
PROVIDED, THAT, NO BORROWER OR GUARANTOR SHALL PAY, OR BE REQUIRED TO PAY, ANY
AMOUNTS IN RESPECT OF ANY SUCH REPURCHASE OTHER THAN IN THE FORM OF CAPITAL
STOCK OF PARENT (OTHER THAN DISQUALIFIED CAPITAL STOCK).

 

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, NO
BORROWER OR GUARANTOR (OTHER THAN A PETRO COMPANY) SHALL, PRIOR TO THE PETRO
EXISTING SECURITY AGREEMENT TERMINATION DATE, MAKE OR PAY ANY RESTRICTED PAYMENT
TO ANY PETRO COMPANY (EXCEPT FOR A RESTRICTED PAYMENT IN THE FORM OF CAPITAL
STOCK OTHER THAN DISQUALIFIED CAPITAL STOCK) UNLESS, AS OF THE DATE OF ANY SUCH
RESTRICTED PAYMENT, NO DEFAULT OF EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
CONTINUING AND EXCESS AVAILABILITY PLUS UNRESTRICTED CASH SHALL NOT BE LESS THAN
AN AMOUNT EQUAL TO THIRTY-FIVE (35%) PERCENT OF THE MAXIMUM CREDIT.

 

94

--------------------------------------------------------------------------------

 

9.12    Transactions with Affiliates and HPT Companies. Each Borrower and
Guarantor shall not, directly or indirectly:

 

(A)           PURCHASE, ACQUIRE OR LEASE ANY PROPERTY FROM, OR SELL, TRANSFER OR
LEASE ANY PROPERTY TO, ANY AFFILIATE OF SUCH BORROWER OR GUARANTOR, EXCEPT (I)
IN THE ORDINARY COURSE OF AND PURSUANT TO THE REASONABLE REQUIREMENTS OF SUCH
BORROWER’S OR GUARANTOR’S BUSINESS (AS THE CASE MAY BE) AND UPON FAIR AND
REASONABLE TERMS IN A BONA FIDE ARM’S LENGTH TRANSACTION AS REASONABLY
DETERMINED BY THE INDEPENDENT DIRECTORS OF PARENT, (II) TRANSACTIONS AMONG OR
BETWEEN ANY BORROWER OR GUARANTOR AND ANY OTHER BORROWER OR GUARANTOR WHICH ARE
NOT PROHIBITED BY THIS AGREEMENT OR ANY OTHER FINANCING AGREEMENT, AND (III) THE
TRANSACTIONS CONTEMPLATED BY THE PETRO TRAVEL PLAZA OPERATING AGREEMENT (AS IN
EFFECT ON THE DATE HEREOF);

 

(B)           MAKE ANY PAYMENTS (WHETHER BY DIVIDEND, LOAN OR OTHERWISE) OF
MANAGEMENT, CONSULTING OR OTHER FEES FOR MANAGEMENT OR SIMILAR SERVICES, OR OF
ANY INDEBTEDNESS OWING TO ANY AFFILIATE OF SUCH BORROWER OR GUARANTOR, EXCEPT
(I) REASONABLE COMPENSATION TO EXECUTIVE OFFICERS OR DIRECTORS FOR SERVICES
RENDERED TO SUCH BORROWER OR GUARANTOR IN THE ORDINARY COURSE OF BUSINESS, AND
(II) REGULARLY SCHEDULED PAYMENTS OF MANAGEMENT FEES DUE AND PAYABLE IN
ACCORDANCE WITH THE TERMS OF THE SHARED SERVICES AGREEMENT AS IN EFFECT ON THE
DATE HEREOF;

 

(C)           PURCHASE, ACQUIRE OR LEASE ANY PROPERTY FROM, OR SELL, TRANSFER OR
LEASE ANY PROPERTY TO, ANY HPT COMPANY, EXCEPT PURSUANT TO THE REASONABLE
REQUIREMENTS OF SUCH BORROWER’S OR GUARANTOR’S BUSINESS AND UPON FAIR AND
REASONABLE TERMS AS REASONABLY DETERMINED BY THE INDEPENDENT DIRECTORS OF
PARENT;

 

(D)           ENTER INTO ANY LEASE WITH ANY HPT COMPANY AFTER THE DATE HEREOF
UNLESS AGENT SHALL HAVE RECEIVED AN AGREEMENT, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO AGENT, DULY EXECUTED AND DELIVERED BY SUCH HPT COMPANY (IT BEING
AGREED THAT SUCH AGREEMENT SHALL BE SATISFACTORY TO AGENT IF IT IS SUBSTANTIALLY
SIMILAR TO THE LETTER AGREEMENT, DATED ON OR ABOUT THE DATE HEREOF, AMONG HPT TA
PROPERTIES TRUST, HPT TA PROPERTIES LLC AND AGENT); OR

 

(E)           REQUEST OR OBTAIN, WITHOUT THE PRIOR WRITTEN CONSENT OF AGENT, ANY
SERVICES IN WHICH A PERSON (OTHER THAN A BORROWER OR GUARANTOR) WOULD, DIRECTLY
OR INDIRECTLY, MONITOR, INVOICE OR COLLECT ANY COLLATERAL OF A BORROWER OR
GUARANTOR, PREPARE OR GENERATE ANY FINANCIAL STATEMENTS OF A BORROWER OR
GUARANTOR, OR ADMINISTER ALL OR ANY PART OF THE CASH MANAGEMENT SYSTEM OF A
BORROWER OR GUARANTOR.

 

9.13    Compliance with ERISA. Each Borrower and Guarantor shall, and shall
cause each of its ERISA Affiliates, to: (a) maintain each Plan in compliance in
all material respects with the applicable provisions of ERISA, the Code and
other Federal and State law; (b) cause each Plan which is qualified under
Section 401(a) of the Code to maintain such qualification; (c) not terminate any
of such Plans so as to incur any material liability to the Pension Benefit
Guaranty Corporation; (d) not allow or suffer to exist any prohibited
transaction involving any of such Plans or any trust created thereunder which
would subject such Borrower, Guarantor or such ERISA Affiliate to a material tax
or penalty or other liability on prohibited transactions imposed under Section
4975 of the Code or ERISA; (e) make all required contributions to any Plan which
it is obligated to pay under Section 302 of ERISA, Section 412 of the Code or
the terms of such Plan; (f) not allow or suffer to exist any accumulated funding
deficiency, whether or not waived, with respect to any such Plan; or (g) allow
or suffer to exist any occurrence of a reportable event

 

95

--------------------------------------------------------------------------------

 

or any other event or condition which presents a material risk of termination by
the Pension Benefit Guaranty Corporation of any such Plan that is a single
employer plan, which termination could result in any material liability to the
Pension Benefit Guaranty Corporation.

 

9.14        End of Fiscal Years; Fiscal Quarters. Each Borrower and Guarantor
shall, for financial reporting purposes, cause its, and each of its
Subsidiaries’ (a) fiscal years to end on December 31 of each year and (b) fiscal
quarters to end on March 31, June 30, September 30 and December 31 of each year.

 

9.15        Change in Business. Each Borrower and Guarantor shall not engage in
any business other than the business of such Borrower or Guarantor on the date
hereof and any business reasonably related, ancillary or complimentary to the
business in which such Borrower or Guarantor is engaged on the date hereof.

 

9.16        Limitation of Restrictions Affecting Subsidiaries. Each Borrower and
Guarantor shall not, directly, or indirectly, create or otherwise cause or
suffer to exist any encumbrance or restriction which prohibits or limits the
ability of any Borrower or Guarantor to (a) pay dividends or make other
distributions or pay any Indebtedness owed to  such Borrower or Guarantor; (b)
make loans or advances to such Borrower or Guarantor, (c) transfer any of its
properties or assets to such Borrower or Guarantor; or (d) create, incur, assume
or suffer to exist any lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, other than encumbrances and
restrictions arising under (i) applicable law, (ii) this Agreement, (iii)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of such Borrower or Guarantor, (iv) customary restrictions
on dispositions of real property interests found in reciprocal easement
agreements of such Borrower or Guarantor, (v) any agreement relating to
permitted Indebtedness incurred by such Borrower or Guarantor prior to the date
hereof or relating to any Indebtedness incurred by such Borrower or Guarantor
after the date hereof which is permitted under Section 9.9(e), (f), (h) and (i),
(vi) customary provisions in license agreements restricting assignments or
transfers of the rights of a licensee under such license agreement and (vii) the
Existing HPT Leases (as in effect on the date hereof) and any other Lease
Agreement entered into after the date hereof; provided, that, any such
encumbrances or restrictions contained in any other Lease Agreement (taken as a
whole) are not materially less favorable to Borrowers, Guarantors, Agent or
Lenders than those encumbrances and restrictions under the Existing HPT Leases
(as in effect on the date hereof).

 

9.17        Minimum Fixed Charge Coverage Ratio. If a Compliance Period exists,
the Fixed Charge Coverage Ratio of Parent and its Tested Subsidiaries (on a
consolidated basis) for the most recently ended period of twelve (12)
consecutive months for which Agent has received financial statements of Parent
and its Subsidiaries shall not be less than 1.00 to 1.00.

 

9.18        Credit Card Agreements. Each Borrower and Guarantor shall (a)
observe and perform in all material respects all material terms, covenants,
conditions and provisions of the Credit Card Agreements to be observed and
performed by it at the times set forth therein; and (b) at all times maintain in
full force and effect the Credit Card Agreements, except, that, any Borrower or
Guarantor may terminate or cancel any of the Credit Card Agreements in the
ordinary course of the business of such Borrower or Guarantor; provided, that,
such Borrower or Guarantor shall give Agent prior written notice of its
intention to do so. Upon any Borrower or Guarantor entering any new Credit Card
Agreements with a new Credit Card Issuer or Credit Card Processor, such Borrower
or Guarantor shall furnish to Agent prior written notice of the

 

96

--------------------------------------------------------------------------------

 

intention of such Borrower or Guarantor to enter into such agreement (together
with such other information with respect thereto as Agent may reasonably
request) and, promptly upon Agent’s request,  a Credit Card Acknowledgment in
favor of Agent, as executed by such new Credit Card Issuer or Credit Card
Processor. Promptly upon the request of Agent, Borrowers shall furnish to Agent
such information and evidence as Agent may reasonably require from time to time
concerning the observance, performance and compliance by Borrowers or the other
party or parties thereto with the terms, covenants or provisions of the Credit
Card Agreements.

 

9.19    License Agreements.

 

(A)           EACH BORROWER AND GUARANTOR SHALL (I) PROMPTLY AND FAITHFULLY
OBSERVE AND PERFORM ALL OF THE TERMS, COVENANTS, CONDITIONS AND PROVISIONS OF
THE MATERIAL LICENSE AGREEMENTS TO BE OBSERVED AND PERFORMED BY IT, AT THE TIMES
SET FORTH THEREIN, IF ANY, (II) NOT DO, PERMIT, SUFFER OR REFRAIN FROM DOING
ANYTHING THAT COULD REASONABLY BE EXPECTED TO RESULT IN A DEFAULT UNDER OR
BREACH OF ANY OF THE TERMS OF ANY MATERIAL LICENSE AGREEMENT, (III) NOT CANCEL,
SURRENDER, MODIFY, AMEND, WAIVE OR RELEASE ANY MATERIAL LICENSE AGREEMENT IN ANY
MATERIAL RESPECT OR ANY TERM, PROVISION OR RIGHT OF THE LICENSEE THEREUNDER IN
ANY MATERIAL RESPECT, OR CONSENT TO OR PERMIT TO OCCUR ANY OF THE FOREGOING;
EXCEPT, THAT, SUBJECT TO SECTION 9.19(B) BELOW, SUCH BORROWER OR GUARANTOR MAY
MODIFY, AMEND, WAIVE, CANCEL, SURRENDER OR RELEASE ANY MATERIAL LICENSE
AGREEMENT; PROVIDED, THAT, SUCH BORROWER OR GUARANTOR (AS THE CASE MAY BE) SHALL
GIVE AGENT NOT LESS THAN THIRTY (30) DAYS PRIOR WRITTEN NOTICE (OR SUCH LESSER
NOTICE PERIOD AS TO WHICH AGENT MAY AGREE) OF ITS INTENTION TO SO CANCEL,
SURRENDER AND RELEASE ANY SUCH MATERIAL LICENSE AGREEMENT, (IV) GIVE AGENT
PROMPT WRITTEN NOTICE OF ANY MATERIAL LICENSE AGREEMENT ENTERED INTO BY SUCH
BORROWER OR GUARANTOR AFTER THE DATE HEREOF, TOGETHER WITH A TRUE, CORRECT AND
COMPLETE COPY THEREOF AND SUCH OTHER INFORMATION WITH RESPECT THERETO AS AGENT
MAY REASONABLY REQUEST, (V) GIVE AGENT PROMPT WRITTEN NOTICE OF ANY MATERIAL
BREACH OF ANY OBLIGATION, OR ANY DEFAULT, BY ANY PARTY UNDER ANY MATERIAL
LICENSE AGREEMENT, AND DELIVER TO AGENT (PROMPTLY UPON THE RECEIPT THEREOF BY
SUCH BORROWER OR GUARANTOR IN THE CASE OF A NOTICE SUCH BORROWER OR GUARANTOR
AND CONCURRENTLY WITH THE SENDING THEREOF IN THE CASE OF A NOTICE TO SUCH
BORROWER OR GUARANTOR) A COPY OF EACH NOTICE OF DEFAULT AND EVERY OTHER SIMILAR
NOTICE OR OTHER COMMUNICATION RECEIVED OR DELIVERED BY SUCH BORROWER OR
GUARANTOR IN CONNECTION WITH ANY MATERIAL LICENSE AGREEMENT WHICH RELATES TO THE
RIGHT OF SUCH BORROWER OR GUARANTOR TO CONTINUE TO USE PROPERTY SUBJECT TO SUCH
LICENSE AGREEMENT, AND (VI) FURNISH TO AGENT, PROMPTLY UPON THE REQUEST OF
AGENT, SUCH INFORMATION AND EVIDENCE AS AGENT MAY REASONABLY REQUIRE FROM TIME
TO TIME CONCERNING THE OBSERVANCE, PERFORMANCE AND COMPLIANCE BY SUCH BORROWER
OR GUARANTOR OF THE OTHER PARTY OR PARTIES THERETO WITH THE MATERIAL TERMS,
COVENANTS OR PROVISIONS OF ANY MATERIAL LICENSE AGREEMENT.

 

(B)           EACH BORROWER AND GUARANTOR WILL EITHER EXERCISE ANY OPTION TO
RENEW OR EXTEND THE TERM OF EACH MATERIAL LICENSE AGREEMENT TO WHICH IT IS A
PARTY IN SUCH MANNER AS WILL CAUSE THE TERM OF SUCH MATERIAL LICENSE AGREEMENT
TO BE EFFECTIVELY RENEWED OR EXTENDED FOR THE PERIOD PROVIDED BY SUCH OPTION AND
GIVE PROMPT WRITTEN NOTICE THEREOF TO AGENT OR GIVE AGENT PRIOR WRITTEN NOTICE
THAT SUCH BORROWER OR GUARANTOR DOES NOT INTEND TO RENEW OR EXTEND THE TERM OF
ANY SUCH MATERIAL LICENSE AGREEMENT OR THAT THE TERM THEREOF SHALL OTHERWISE BE
EXPIRING, NOT LESS THAN THIRTY (30) DAYS PRIOR TO THE DATE OF ANY SUCH
NON-RENEWAL OR EXPIRATION. IN THE EVENT OF THE FAILURE OF SUCH BORROWER OR
GUARANTOR TO EXTEND OR RENEW ANY MATERIAL LICENSE AGREEMENT TO WHICH IT IS A
PARTY, AGENT SHALL HAVE, AND IS HEREBY GRANTED, THE IRREVOCABLE RIGHT AND
AUTHORITY, EXERCISABLE AT ITS OPTION AT ANY TIME THAT AN EVENT OF DEFAULT SHALL
HAVE OCCURRED AND BE

 

97

--------------------------------------------------------------------------------

 

CONTINUING, TO RENEW OR EXTEND THE TERM OF SUCH MATERIAL LICENSE AGREEMENT,
WHETHER IN ITS OWN NAME AND BEHALF, OR IN THE NAME AND BEHALF OF A DESIGNEE OR
NOMINEE OF AGENT OR IN THE NAME AND BEHALF OF SUCH BORROWER OR GUARANTOR, AS
AGENT SHALL DETERMINE IN GOOD FAITH. IF AN EVENT OF DEFAULT SHALL HAVE OCCURRED
AND BE CONTINUING, AGENT MAY, BUT SHALL NOT BE REQUIRED TO, PERFORM ANY OR ALL
OF SUCH OBLIGATIONS OF SUCH BORROWER OR GUARANTOR UNDER ANY OF THE LICENSE
AGREEMENTS, INCLUDING, BUT NOT LIMITED TO, THE PAYMENT OF ANY OR ALL SUMS DUE
FROM SUCH BORROWER OR GUARANTOR THEREUNDER. ANY SUMS SO PAID BY AGENT SHALL
CONSTITUTE PART OF THE OBLIGATIONS.

 

9.20        Costs and Expenses. Subject to the limitations contained in Sections
7.3, 7.4 and 7.7 hereof, Borrowers and Guarantors shall pay to Agent on demand
all costs, expenses, filing fees and taxes paid or payable in connection with
the preparation, negotiation, execution, delivery, recording, syndication,
administration, collection, liquidation, enforcement and defense of the
Obligations, Agent’s rights in the Collateral, this Agreement, the other
Financing Agreements and all other documents related hereto or thereto,
including any amendments, supplements or consents which may hereafter be
contemplated (whether or not executed) or entered into in respect hereof and
thereof, including:  (a) all costs and expenses of filing or recording
(including Uniform Commercial Code financing statement filing taxes and fees,
documentary taxes, intangibles taxes and mortgage recording taxes and fees, if
applicable); (b) costs and expenses and fees for insurance premiums,
environmental audits, title insurance premiums, surveys, assessments,
engineering reports and inspections, appraisal fees (subject to the limitations
contained in Sections 7.3(d) and 7.4(a) hereof) and search fees, costs and
expenses of remitting loan proceeds, collecting checks and other items of
payment, and establishing and maintaining the Blocked Accounts, together with
Agent’s customary charges and fees with respect thereto; (c) charges, fees or
expenses charged by any bank or issuer in connection with the Letter of Credit
Accommodations; (d) costs and expenses of preserving and protecting the
Collateral; (e) costs and expenses paid or incurred in connection with obtaining
payment of the Obligations, enforcing the security interests and liens of Agent,
selling or otherwise realizing upon the Collateral, and otherwise enforcing the
provisions of this Agreement and the other Financing Agreements or defending any
claims made or threatened against Agent or any Lender arising out of the
transactions contemplated hereby and thereby (including preparations for and
consultations concerning any such matters); (f) all out-of-pocket expenses and
costs heretofore and from time to time hereafter incurred by Agent during the
course of periodic field examinations of the Collateral and such Borrower’s or
Guarantor’s operations, plus a per diem charge at Agent’s then standard rate for
Agent’s examiners in the field and office (which rate as of the date hereof is
$850 per person per day); and (g) the fees and disbursements of counsel
(including legal assistants) to Agent in connection with any of the foregoing.

 

9.21        Further Assurances. (a)  In the case of the formation or acquisition
by a Borrower or Guarantor of any Subsidiary after the date hereof (other than
an Excluded Subsidiary), as to any such Subsidiary, (i) the Borrower or
Guarantor forming such Subsidiary shall cause any such Subsidiary (other than a
Subsidiary organized under the laws of a jurisdiction outside the United States)
to execute and deliver to Agent, the following (each in form and substance
reasonably satisfactory to Agent), (A) an absolute and unconditional guarantee
of payment of the Obligations, (B) a security agreement granting to Agent a
first security interest and lien (except as otherwise consented to in writing by
Agent and subject to the liens permitted under Section 9.8 hereof) upon all of
the assets of any such Subsidiary of the type or category of the assets of

 

98

--------------------------------------------------------------------------------

 

Borrowers subject to the security interests and liens pursuant hereto, and (C)
such other agreements, documents and instruments as Agent may reasonably require
in connection with the documents referred to above in order to make such
Subsidiary a party to this Agreement as a “Borrower” or as a “Guarantor” as
Agent may determine, including, but not limited to, supplements and amendments
hereto, authorization to file UCC financing statements, Collateral Access
Agreements and other consents, waivers, acknowledgments and other agreements
from third persons which Agent may deem necessary or desirable in order to
permit, protect and perfect its security interests in and liens upon the assets
purchased, corporate resolutions and other organization and authorizing
documents of such Person, and favorable opinions of counsel to such person and
(ii) the Borrower or Guarantor forming such Subsidiary shall (A) execute and
deliver to Agent, a pledge and security agreement, in form and substance
satisfactory to Agent, granting to Agent a first pledge of and lien on all of
the issued and outstanding shares of Capital Stock of any such Subsidiary or, in
the case of a Subsidiary organized under the laws of a jurisdiction outside the
United States, sixty-five (65%) percent of the issued and outstanding shares of
Capital Stock of such Subsidiary, and (B) deliver the original stock
certificates evidencing such shares of Capital Stock (or such other evidence as
may be issued in the case of a limited liability company), together with stock
powers with respect thereto duly executed in blank (or the equivalent thereof in
the case of a limited liability company in which such interests are
certificated, or otherwise take such actions as Agent shall require with respect
to Agent’s security interests therein).

 

(b)  In the case of an acquisition of assets (other than Capital Stock) by a
Borrower or Guarantor (including indirectly through a Specified Subsidiary)
pursuant to a Permitted Acquisition after the date hereof, Agent shall have
received, in form and substance reasonably satisfactory to Agent, (i) evidence
that Agent has valid and perfected security interests in and liens upon all
purchased assets of the type or category of assets of Borrowers subject to the
security interests and liens pursuant hereto (except for Excluded Assets, such
assets encumbered by a lien permitted under Section 9.8(e) or (l) hereof and
such assets owned by a Subsidiary organized under the laws of a jurisdiction
outside the United States), and (ii) such other agreements, documents and
instruments as Agent may require in connection with the documents referred to
above, including, but not limited to, supplements and amendments hereto,
corporate resolutions and other organization and authorizing documents and
favorable opinions of counsel to such person.

 

(c)  At the request of Agent at any time and from time to time, Borrowers and
Guarantors shall, and shall cause each Specified Subsidiary to, at their
expense, duly execute and deliver, or cause to be duly executed and delivered,
such further agreements, documents and instruments, and do or cause to be done
such further acts as may be necessary or proper to evidence, perfect, maintain
and enforce the security interests and the priority thereof in the Collateral
and to otherwise effectuate the provisions or purposes of this Agreement or any
of the other Financing Agreements. Agent may at any time and from time to time
request a certificate from an officer of any Borrower or Guarantor representing
that all conditions precedent to the making of Loans and providing Letter of
Credit Accommodations contained herein are satisfied. In the event of such
request by Agent, Agent and Lenders may, at Agent’s option, cease to make any
further Loans or provide any further Letter of Credit Accommodations until Agent
has received such certificate and, in addition, Agent has determined that such
conditions are satisfied.

 

99

--------------------------------------------------------------------------------

 

(d)  Notwithstanding the requirements set forth in Sections 5.2 and 9.21(a) and
(b) above, Agent shall not require compliance with the requirements of those
sections contemporaneously upon the formation of a Subsidiary, or the
consummation of a Permitted Acquisition; provided, that, Borrowers and
Guarantors and such new Subsidiaries shall comply therewith within forty-five
(45) days of the occurrence of the formation of such Subsidiary or the
consummation of such Permitted Acquisition (unless Agent extends or waives such
compliance either in whole or in part).

 

9.22         Petro Existing Letters of Credit . Borrowers and Guarantors shall
promptly notify Agent in writing when all of the Petro Existing Letters of
Credit have expired or been terminated and when the Petro Lien Effective Date
has occurred. Borrowers and Guarantors shall not permit any of the Petro
Existing Letters of Credit to be amended, supplemented, restated, renewed or
otherwise modified and shall not permit the expiry date of any of the Petro
Existing Letters of Credit to be renewed or otherwise extended, in each case
without the prior written consent of Agent.

 

9.23         Petro Existing Security Agreement . Borrowers and Guarantors shall
promptly notify Agent in writing of the occurrence of the date on which the
Petro Existing Security Agreement or the liens granted thereunder have been
terminated or released (such date being the “Petro Existing Security Agreement
Termination Date”). Borrowers and Guarantors shall not permit the Petro Existing
Security Agreement to be amended, supplemented, restated, renewed or otherwise
modified, without the prior written consent of Agent. Borrowers and Guarantors
shall not permit any Person to become a Secured Trade Creditor (as defined in
the Petro Existing Security Agreement) other than ExxonMobil. After the Petro
Existing Security Agreement Termination Date, Borrower and Guarantors shall,
promptly upon the request of Agent, furnish evidence, in form and substance
reasonably satisfactory to Agent, that all Uniform Commercial Code financing
statements and similar lien registrations filed in connection with the Petro
Existing Security Agreement have been terminated.

 

SECTION 10.    EVENTS OF DEFAULT AND REMEDIES

 

10.1         Events of Default. The occurrence or existence of any one or more
of the following events are referred to herein individually as an “Event of
Default”, and collectively as “Events of Default”:

 

(A)           (I) ANY BORROWER FAILS TO PAY ANY OF THE OBLIGATIONS WHEN DUE OR
(II) ANY BORROWER OR GUARANTOR FAILS TO PERFORM ANY OF THE COVENANTS CONTAINED
IN SECTIONS 9.1(B), 9.1(C), 9.3, 9.4, 9.13, 9.14, 9.15, 9.16 AND 9.18 OF THIS
AGREEMENT AND SUCH FAILURE SHALL CONTINUE FOR TWENTY (20) DAYS; PROVIDED, THAT,
SUCH TWENTY (20) DAY PERIOD SHALL NOT APPLY IN THE CASE OF: (A) ANY FAILURE TO
OBSERVE ANY SUCH COVENANT WHICH IS NOT CAPABLE OF BEING CURED AT ALL OR WITHIN
SUCH TWENTY (20) DAY PERIOD OR WHICH HAS BEEN THE SUBJECT OF A PRIOR FAILURE
WITHIN A THREE (3) MONTH PERIOD OR (B) A WILLFUL BREACH BY ANY BORROWER OR
OBLIGOR OF ANY SUCH COVENANT OR (III) ANY BORROWER OR OBLIGOR FAILS TO PERFORM
ANY OF THE TERMS, COVENANTS, CONDITIONS OR PROVISIONS CONTAINED IN THIS
AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OTHER THAN THOSE DESCRIBED IN
SECTIONS 10.1(A)(I) AND 10.1(A)(II) ABOVE;

 

100

--------------------------------------------------------------------------------

 

(B)           ANY REPRESENTATION, WARRANTY OR STATEMENT OF FACT MADE BY ANY
BORROWER OR GUARANTOR TO AGENT IN THIS AGREEMENT, THE OTHER FINANCING AGREEMENTS
OR ANY OTHER WRITTEN AGREEMENT, SCHEDULE, CONFIRMATORY ASSIGNMENT OR DOCUMENT
SHALL WHEN MADE OR DEEMED MADE BE FALSE OR MISLEADING IN ANY MATERIAL RESPECT;

 

(C)           ANY OBLIGOR REVOKES OR TERMINATES OR PURPORTS TO REVOKE OR
TERMINATE OR FAILS TO PERFORM ANY OF THE TERMS, COVENANTS, CONDITIONS OR
PROVISIONS OF ANY GUARANTEE, ENDORSEMENT OR OTHER AGREEMENT OF SUCH PARTY IN
FAVOR OF AGENT OR ANY LENDER;

 

(D)           ANY ONE OR MORE JUDGMENTS FOR THE PAYMENT OF MONEY IS OR ARE
RENDERED AGAINST ANY BORROWER OR OBLIGOR IN EXCESS OF $1,500,000 IN THE
AGGREGATE (TO THE EXTENT NOT COVERED BY INSURANCE WHERE THE INSURER HAS ASSUMED
RESPONSIBILITY IN WRITING FOR SUCH JUDGMENT) AND SHALL REMAIN UNDISCHARGED OR
UNVACATED FOR A PERIOD IN EXCESS OF THIRTY (30) DAYS OR EXECUTION SHALL AT ANY
TIME NOT BE EFFECTIVELY STAYED, OR ANY JUDGMENT OTHER THAN FOR THE PAYMENT OF
MONEY, OR INJUNCTION, ATTACHMENT, GARNISHMENT OR EXECUTION IS RENDERED AGAINST
ANY BORROWER OR OBLIGOR OR ANY OF THE COLLATERAL HAVING A VALUE IN EXCESS OF
$1,500,000 WHICH IS NOT EFFECTIVELY STAYED OR BONDED;

 

(E)           ANY BORROWER OR OBLIGOR, WHICH IS A PARTNERSHIP, LIMITED LIABILITY
COMPANY, LIMITED LIABILITY PARTNERSHIP OR A CORPORATION, DISSOLVES OR SUSPENDS
OR DISCONTINUES DOING BUSINESS, EXCEPT AS PERMITTED UNDER SECTION 9.7(C) HEREOF;

 

(F)            ANY BORROWER OR OBLIGOR MAKES AN ASSIGNMENT FOR THE BENEFIT OF
CREDITORS, MAKES OR SENDS NOTICE OF A BULK TRANSFER OR CALLS A MEETING OF ITS
CREDITORS OR PRINCIPAL CREDITORS IN CONNECTION WITH A MORATORIUM OR ADJUSTMENT
OF THE INDEBTEDNESS DUE TO THEM;

 

(G)           A CASE OR PROCEEDING UNDER THE BANKRUPTCY LAWS OF THE UNITED
STATES OF AMERICA NOW OR HEREAFTER IN EFFECT OR UNDER ANY INSOLVENCY,
REORGANIZATION, RECEIVERSHIP, READJUSTMENT OF DEBT, DISSOLUTION OR LIQUIDATION
LAW OR STATUTE OF ANY JURISDICTION NOW OR HEREAFTER IN EFFECT (WHETHER AT LAW OR
IN EQUITY) IS FILED AGAINST ANY BORROWER OR OBLIGOR OR ALL OR ANY PART OF ITS
PROPERTIES AND SUCH PETITION OR APPLICATION IS NOT DISMISSED WITHIN FORTY-FIVE
(45) DAYS AFTER THE DATE OF ITS FILING OR ANY BORROWER OR OBLIGOR SHALL FILE ANY
ANSWER ADMITTING OR NOT CONTESTING SUCH PETITION OR APPLICATION OR INDICATES ITS
CONSENT TO, ACQUIESCENCE IN OR APPROVAL OF, ANY SUCH ACTION OR PROCEEDING OR THE
RELIEF REQUESTED IS GRANTED SOONER;

 

(H)           A CASE OR PROCEEDING UNDER THE BANKRUPTCY LAWS OF THE UNITED
STATES OF AMERICA NOW OR HEREAFTER IN EFFECT OR UNDER ANY INSOLVENCY,
REORGANIZATION, RECEIVERSHIP, READJUSTMENT OF DEBT, DISSOLUTION OR LIQUIDATION
LAW OR STATUTE OF ANY JURISDICTION NOW OR HEREAFTER IN EFFECT (WHETHER AT A LAW
OR EQUITY) IS FILED BY ANY BORROWER OR OBLIGOR OR FOR ALL OR ANY PART OF ITS
PROPERTY;

 

(I)            (I) ANY DEFAULT IN RESPECT OF ANY INDEBTEDNESS OF ANY BORROWER OR
OBLIGOR (OTHER THAN INDEBTEDNESS OWING TO AGENT AND LENDERS HEREUNDER), IN ANY
CASE IN AN AMOUNT IN EXCESS OF $1,500,000, WHICH DEFAULT CONTINUES FOR MORE THAN
THE APPLICABLE CURE PERIOD, IF ANY, WITH RESPECT THERETO, OR (II) ANY DEFAULT BY
ANY BORROWER OR OBLIGOR UNDER ANY MATERIAL CONTRACT, WHICH DEFAULT CONTINUES FOR
MORE THAN THE APPLICABLE CURE PERIOD, IF ANY, WITH RESPECT THERETO AND/OR IS NOT
WAIVED IN WRITING BY THE OTHER PARTIES THERETO, OR (III) ANY CREDIT CARD ISSUER
OR CREDIT CARD PROCESSOR WITHHOLDS PAYMENT OF AMOUNTS OTHERWISE PAYABLE TO A
BORROWER OR GUARANTOR TO FUND A RESERVE ACCOUNT OR OTHERWISE HOLD AS COLLATERAL,
OR SHALL REQUIRE A BORROWER

 

101

--------------------------------------------------------------------------------

 

OR GUARANTOR TO PAY FUNDS INTO A RESERVE ACCOUNT OR FOR SUCH CREDIT CARD ISSUER
OR CREDIT CARD PROCESSOR TO OTHERWISE HOLD AS COLLATERAL, OR ANY BORROWER OR
GUARANTOR SHALL PROVIDE A LETTER OF CREDIT, GUARANTEE, INDEMNITY OR SIMILAR
INSTRUMENT TO OR IN FAVOR OF SUCH CREDIT CARD ISSUER OR CREDIT CARD PROCESSOR
SUCH THAT IN THE AGGREGATE ALL OF SUCH FUNDS IN THE RESERVE ACCOUNT, OTHER
AMOUNTS HELD AS COLLATERAL AND THE AMOUNT OF SUCH LETTERS OF CREDIT, GUARANTEES,
INDEMNITIES OR SIMILAR INSTRUMENTS SHALL EXCEED $1,500,000 OR ANY SUCH CREDIT
CARD ISSUER OR CREDIT CARD PROCESSOR SHALL DEBIT OR DEDUCT ANY AMOUNTS IN EXCESS
OF $1,500,000 IN THE AGGREGATE IN ANY FISCAL YEAR OF BORROWERS AND GUARANTORS
FROM ANY DEPOSIT ACCOUNT OF ANY BORROWER OR GUARANTOR;

 

(J)            ANY MATERIAL PROVISION HEREOF OR OF ANY OF THE OTHER FINANCING
AGREEMENTS SHALL FOR ANY REASON CEASE TO BE VALID, BINDING AND ENFORCEABLE WITH
RESPECT TO ANY PARTY HERETO OR THERETO (OTHER THAN AGENT) IN ACCORDANCE WITH ITS
TERMS, OR ANY SUCH PARTY SHALL CHALLENGE THE ENFORCEABILITY HEREOF OR THEREOF,
OR SHALL ASSERT IN WRITING, OR TAKE ANY ACTION OR FAIL TO TAKE ANY ACTION BASED
ON THE ASSERTION THAT ANY PROVISION HEREOF OR OF ANY OF THE OTHER FINANCING
AGREEMENTS HAS CEASED TO BE OR IS OTHERWISE NOT VALID, BINDING OR ENFORCEABLE IN
ACCORDANCE WITH ITS TERMS, OR ANY SECURITY INTEREST PROVIDED FOR HEREIN OR IN
ANY OF THE OTHER FINANCING AGREEMENTS SHALL CEASE TO BE A VALID AND PERFECTED
FIRST PRIORITY SECURITY INTEREST IN ANY OF THE COLLATERAL PURPORTED TO BE
SUBJECT THERETO (EXCEPT AS OTHERWISE PERMITTED HEREIN OR THEREIN);

 

(K)           AN ERISA EVENT SHALL OCCUR WHICH RESULTS IN OR COULD REASONABLY BE
EXPECTED TO RESULT IN LIABILITY OF ANY BORROWER IN AN AGGREGATE AMOUNT IN EXCESS
OF $1,500,000;

 

(L)            ANY CHANGE OF CONTROL;

 

(M)          THE INDICTMENT BY ANY GOVERNMENTAL AUTHORITY, OR THE THREATENED
INDICTMENT IN WRITING BY ANY GOVERNMENTAL AUTHORITY OF ANY BORROWER OR OBLIGOR
OF WHICH ANY BORROWER, OBLIGOR OR AGENT RECEIVES NOTICE, IN EITHER CASE, AS TO
WHICH THERE IS A REASONABLE PROBABILITY OF AN ADVERSE DETERMINATION UNDER ANY
CRIMINAL STATUTE, OR COMMENCEMENT OR THREATENED COMMENCEMENT OF CRIMINAL OR
CIVIL PROCEEDINGS AGAINST SUCH BORROWER OR OBLIGOR, PURSUANT TO WHICH STATUTE OR
PROCEEDINGS THE PENALTIES OR REMEDIES SOUGHT OR AVAILABLE INCLUDE FORFEITURE OF
(I) ANY OF THE COLLATERAL HAVING A VALUE IN EXCESS OF $1,500,000 OR (II) ANY
OTHER PROPERTY OF ANY BORROWER OR GUARANTOR WHICH IS NECESSARY OR MATERIAL TO
THE CONDUCT OF ITS BUSINESS; OR

 

(N)           THERE SHALL BE AN EVENT OF DEFAULT UNDER ANY OF THE OTHER
FINANCING AGREEMENTS.

 

10.2    Remedies.

 

(A)           AT ANY TIME AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING,
AGENT AND LENDERS SHALL HAVE ALL RIGHTS AND REMEDIES PROVIDED IN THIS AGREEMENT,
THE OTHER FINANCING AGREEMENTS, THE UCC AND OTHER APPLICABLE LAW, ALL OF WHICH
RIGHTS AND REMEDIES MAY BE EXERCISED WITHOUT NOTICE TO OR CONSENT BY ANY
BORROWER OR OBLIGOR, EXCEPT AS SUCH NOTICE OR CONSENT IS EXPRESSLY PROVIDED FOR
HEREUNDER OR REQUIRED BY APPLICABLE LAW. ALL RIGHTS, REMEDIES AND POWERS GRANTED
TO AGENT AND LENDERS HEREUNDER, UNDER ANY OF THE OTHER FINANCING AGREEMENTS, THE
UCC OR OTHER APPLICABLE LAW, ARE CUMULATIVE, NOT EXCLUSIVE AND ENFORCEABLE, IN
AGENT’S DISCRETION, ALTERNATIVELY, SUCCESSIVELY, OR CONCURRENTLY ON ANY ONE OR
MORE OCCASIONS, AND SHALL INCLUDE, WITHOUT LIMITATION, THE RIGHT TO APPLY TO A
COURT OF EQUITY FOR AN INJUNCTION TO RESTRAIN A BREACH OR THREATENED BREACH BY
ANY BORROWER OR OBLIGOR OF THIS AGREEMENT OR ANY OF

 

102

--------------------------------------------------------------------------------

 

THE OTHER FINANCING AGREEMENTS. SUBJECT TO SECTION 12 HEREOF, AGENT MAY, AND AT
THE DIRECTION OF THE REQUIRED LENDERS SHALL, AT ANY TIME OR TIMES, PROCEED
DIRECTLY AGAINST ANY BORROWER OR OBLIGOR TO COLLECT THE OBLIGATIONS WITHOUT
PRIOR RECOURSE TO THE COLLATERAL.

 

(B)           WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AT ANY TIME AN
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, AGENT MAY, AT ITS OPTION AND
SHALL UPON THE DIRECTION OF THE REQUIRED LENDERS, (I) UPON NOTICE TO
ADMINISTRATIVE BORROWER, ACCELERATE THE PAYMENT OF ALL OBLIGATIONS AND DEMAND
IMMEDIATE PAYMENT THEREOF TO AGENT FOR ITSELF AND THE BENEFIT OF LENDERS
(PROVIDED, THAT, UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT DESCRIBED IN
SECTIONS 10.1(G) AND 10.1(H), ALL OBLIGATIONS SHALL AUTOMATICALLY BECOME
IMMEDIATELY DUE AND PAYABLE), AND (II) TERMINATE THE COMMITMENTS AND THIS
AGREEMENT (PROVIDED, THAT, UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT DESCRIBED
IN SECTIONS 10.1(G) AND 10.1(H), THE COMMITMENTS AND ANY OTHER OBLIGATION OF THE
AGENT OR A LENDER HEREUNDER SHALL AUTOMATICALLY TERMINATE).

 

(C)           WITHOUT LIMITING THE FOREGOING, AT ANY TIME AN EVENT OF DEFAULT
HAS OCCURRED AND IS CONTINUING, AGENT MAY, IN ITS DISCRETION (I) WITH OR WITHOUT
JUDICIAL PROCESS OR THE AID OR ASSISTANCE OF OTHERS, ENTER UPON ANY PREMISES ON
OR IN WHICH ANY OF THE COLLATERAL MAY BE LOCATED AND TAKE POSSESSION OF THE
COLLATERAL OR COMPLETE PROCESSING, MANUFACTURING AND REPAIR OF ALL OR ANY
PORTION OF THE COLLATERAL, (II) REQUIRE ANY BORROWER OR OBLIGOR, AT BORROWERS’
EXPENSE, TO ASSEMBLE AND MAKE AVAILABLE TO AGENT ANY PART OR ALL OF THE
COLLATERAL AT ANY PLACE AND TIME DESIGNATED BY AGENT, (III) COLLECT, FORECLOSE,
RECEIVE, APPROPRIATE, SETOFF AND REALIZE UPON ANY AND ALL COLLATERAL, (IV)
REMOVE ANY OR ALL OF THE COLLATERAL FROM ANY PREMISES ON OR IN WHICH THE SAME
MAY BE LOCATED FOR THE PURPOSE OF EFFECTING THE SALE, FORECLOSURE OR OTHER
DISPOSITION THEREOF OR FOR ANY OTHER PURPOSE, (V) SELL, LEASE, TRANSFER, ASSIGN,
DELIVER OR OTHERWISE DISPOSE OF ANY AND ALL COLLATERAL (INCLUDING ENTERING INTO
CONTRACTS WITH RESPECT THERETO, PUBLIC OR PRIVATE SALES AT ANY EXCHANGE,
BROKER’S BOARD, AT ANY OFFICE OF AGENT OR ELSEWHERE) AT SUCH PRICES OR TERMS AS
AGENT MAY DEEM REASONABLE, FOR CASH, UPON CREDIT OR FOR FUTURE DELIVERY, WITH
THE AGENT HAVING THE RIGHT TO PURCHASE THE WHOLE OR ANY PART OF THE COLLATERAL
AT ANY SUCH PUBLIC SALE, ALL OF THE FOREGOING BEING FREE FROM ANY RIGHT OR
EQUITY OF REDEMPTION OF ANY BORROWER OR OBLIGOR, WHICH RIGHT OR EQUITY OF
REDEMPTION IS HEREBY EXPRESSLY WAIVED AND RELEASED BY BORROWERS AND OBLIGORS
AND/OR (VI) TERMINATE THIS AGREEMENT. IF ANY OF THE COLLATERAL IS SOLD OR LEASED
BY AGENT UPON CREDIT TERMS OR FOR FUTURE DELIVERY, THE OBLIGATIONS SHALL NOT BE
REDUCED AS A RESULT THEREOF UNTIL PAYMENT THEREFOR IS FINALLY COLLECTED BY
AGENT. IF NOTICE OF DISPOSITION OF COLLATERAL IS REQUIRED BY LAW, TEN (10) DAYS
PRIOR NOTICE BY AGENT TO ADMINISTRATIVE BORROWER DESIGNATING THE TIME AND PLACE
OF ANY PUBLIC SALE OR THE TIME AFTER WHICH ANY PRIVATE SALE OR OTHER INTENDED
DISPOSITION OF COLLATERAL IS TO BE MADE, SHALL BE DEEMED TO BE REASONABLE NOTICE
THEREOF AND BORROWERS AND OBLIGORS WAIVE ANY OTHER NOTICE. IN THE EVENT AGENT
INSTITUTES AN ACTION TO RECOVER ANY COLLATERAL OR SEEKS RECOVERY OF ANY
COLLATERAL BY WAY OF PREJUDGMENT REMEDY, EACH BORROWER AND OBLIGOR WAIVES THE
POSTING OF ANY BOND WHICH MIGHT OTHERWISE BE REQUIRED. AT ANY TIME AN EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING, UPON AGENT’S REQUEST, BORROWERS WILL
EITHER, AS AGENT SHALL SPECIFY, FURNISH CASH COLLATERAL TO THE ISSUER TO BE USED
TO SECURE AND FUND AGENT’S REIMBURSEMENT OBLIGATIONS TO THE ISSUER IN CONNECTION
WITH ANY LETTER OF CREDIT ACCOMMODATIONS OR FURNISH CASH COLLATERAL TO AGENT FOR
THE LETTER OF CREDIT ACCOMMODATIONS. SUCH CASH COLLATERAL SHALL BE IN THE AMOUNT
EQUAL TO ONE HUNDRED TWO (102%) PERCENT OF THE AMOUNT OF THE LETTER OF CREDIT
ACCOMMODATIONS PLUS THE AMOUNT OF ANY FEES AND EXPENSES PAYABLE IN CONNECTION
THEREWITH THROUGH THE END OF THE LATEST EXPIRATION DATE OF SUCH LETTER OF CREDIT
ACCOMMODATIONS.

 

103

--------------------------------------------------------------------------------

 

(D)           AT ANY TIME OR TIMES THAT AN EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING, AGENT MAY, IN ITS DISCRETION, ENFORCE THE RIGHTS OF ANY BORROWER OR
OBLIGOR AGAINST ANY ACCOUNT DEBTOR, SECONDARY OBLIGOR OR OTHER OBLIGOR IN
RESPECT OF ANY OF THE ACCOUNTS OR OTHER RECEIVABLES. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, AGENT MAY, IN ITS DISCRETION, AT SUCH TIME OR TIMES
(I) NOTIFY ANY OR ALL ACCOUNT DEBTORS (INCLUDING CREDIT CARD ISSUERS AND CREDIT
CARD PROCESSORS), SECONDARY OBLIGORS OR OTHER OBLIGORS IN RESPECT THEREOF THAT
THE RECEIVABLES HAVE BEEN ASSIGNED TO AGENT AND THAT AGENT HAS A SECURITY
INTEREST THEREIN AND AGENT MAY DIRECT ANY OR ALL ACCOUNTS DEBTORS (INCLUDING
CREDIT CARD AND CREDIT CARD PROCESSORS), SECONDARY OBLIGORS AND OTHER OBLIGORS
TO MAKE PAYMENT OF RECEIVABLES DIRECTLY TO AGENT, (II) EXTEND THE TIME OF
PAYMENT OF, COMPROMISE, SETTLE OR ADJUST FOR CASH, CREDIT, RETURN OF MERCHANDISE
OR OTHERWISE, AND UPON ANY TERMS OR CONDITIONS, ANY AND ALL RECEIVABLES OR OTHER
OBLIGATIONS INCLUDED IN THE COLLATERAL AND THEREBY DISCHARGE OR RELEASE THE
ACCOUNT DEBTOR OR ANY SECONDARY OBLIGORS OR OTHER OBLIGORS IN RESPECT THEREOF
WITHOUT AFFECTING ANY OF THE OBLIGATIONS, (III) DEMAND, COLLECT OR ENFORCE
PAYMENT OF ANY RECEIVABLES OR SUCH OTHER OBLIGATIONS, BUT WITHOUT ANY DUTY TO DO
SO, AND AGENT AND LENDERS SHALL NOT BE LIABLE FOR ANY FAILURE TO COLLECT OR
ENFORCE THE PAYMENT THEREOF NOR FOR THE NEGLIGENCE OF ITS AGENTS OR ATTORNEYS
WITH RESPECT THERETO AND (IV) TAKE WHATEVER OTHER ACTION AGENT MAY DEEM
NECESSARY OR DESIRABLE FOR THE PROTECTION OF ITS INTERESTS AND THE INTERESTS OF
LENDERS. AT ANY TIME THAT AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, AT
AGENT ‘S REQUEST, ALL INVOICES AND STATEMENTS SENT TO ANY ACCOUNT DEBTOR SHALL
STATE THAT THE ACCOUNTS AND SUCH OTHER OBLIGATIONS HAVE BEEN ASSIGNED TO AGENT
AND ARE PAYABLE DIRECTLY AND ONLY TO AGENT AND BORROWERS AND OBLIGORS SHALL
DELIVER TO AGENT SUCH ORIGINALS OF DOCUMENTS EVIDENCING THE SALE AND DELIVERY OF
GOODS OR THE PERFORMANCE OF SERVICES GIVING RISE TO ANY ACCOUNTS AS AGENT MAY
REQUIRE. IN THE EVENT ANY ACCOUNT DEBTOR RETURNS INVENTORY WHEN AN EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING, BORROWERS SHALL, UPON AGENT’S REQUEST,
HOLD THE RETURNED INVENTORY IN TRUST FOR AGENT, SEGREGATE ALL RETURNED INVENTORY
FROM ALL OF ITS OTHER PROPERTY, DISPOSE OF THE RETURNED INVENTORY SOLELY
ACCORDING TO AGENT’S INSTRUCTIONS, AND NOT ISSUE ANY CREDITS, DISCOUNTS OR
ALLOWANCES WITH RESPECT THERETO WITHOUT AGENT’S PRIOR WRITTEN CONSENT.

 

(E)           TO THE EXTENT THAT APPLICABLE LAW IMPOSES DUTIES ON AGENT OR ANY
LENDER TO EXERCISE REMEDIES IN A COMMERCIALLY REASONABLE MANNER (WHICH DUTIES
CANNOT BE WAIVED UNDER SUCH LAW), EACH BORROWER AND GUARANTOR ACKNOWLEDGES AND
AGREES THAT IT IS NOT COMMERCIALLY UNREASONABLE FOR AGENT OR ANY LENDER (I) TO
FAIL TO INCUR EXPENSES REASONABLY DEEMED SIGNIFICANT BY AGENT OR ANY LENDER TO
PREPARE COLLATERAL FOR DISPOSITION OR OTHERWISE TO COMPLETE RAW MATERIAL OR WORK
IN PROCESS INTO FINISHED GOODS OR OTHER FINISHED PRODUCTS FOR DISPOSITION, (II)
TO FAIL TO OBTAIN THIRD PARTY CONSENTS FOR ACCESS TO COLLATERAL TO BE DISPOSED
OF, OR TO OBTAIN OR, IF NOT REQUIRED BY OTHER LAW, TO FAIL TO OBTAIN CONSENTS OF
ANY GOVERNMENTAL AUTHORITY OR OTHER THIRD PARTY FOR THE COLLECTION OR
DISPOSITION OF COLLATERAL TO BE COLLECTED OR DISPOSED OF, (III) TO FAIL TO
EXERCISE COLLECTION REMEDIES AGAINST ACCOUNT DEBTORS, SECONDARY OBLIGORS OR
OTHER PERSONS OBLIGATED ON COLLATERAL OR TO REMOVE LIENS OR ENCUMBRANCES ON OR
ANY ADVERSE CLAIMS AGAINST COLLATERAL, (IV) TO EXERCISE COLLECTION REMEDIES
AGAINST ACCOUNT DEBTORS AND OTHER PERSONS OBLIGATED ON COLLATERAL DIRECTLY OR
THROUGH THE USE OF COLLECTION AGENCIES AND OTHER COLLECTION SPECIALISTS, (V) TO
ADVERTISE DISPOSITIONS OF COLLATERAL THROUGH PUBLICATIONS OR MEDIA OF GENERAL
CIRCULATION, WHETHER OR NOT THE COLLATERAL IS OF A SPECIALIZED NATURE, (VI) TO
CONTACT OTHER PERSONS, WHETHER OR NOT IN THE SAME BUSINESS AS ANY BORROWER OR
GUARANTOR, FOR EXPRESSIONS OF INTEREST IN ACQUIRING ALL OR ANY PORTION OF THE
COLLATERAL, (VII) TO HIRE ONE OR MORE PROFESSIONAL AUCTIONEERS TO ASSIST IN THE
DISPOSITION OF COLLATERAL, WHETHER OR NOT THE COLLATERAL IS OF A SPECIALIZED
NATURE, (VIII) TO DISPOSE OF COLLATERAL BY UTILIZING INTERNET SITES THAT PROVIDE
FOR THE AUCTION OF ASSETS OF THE TYPES INCLUDED IN THE COLLATERAL OR THAT HAVE
THE REASONABLE CAPABILITY OF DOING SO, OR THAT MATCH

 

104

--------------------------------------------------------------------------------

 

BUYERS AND SELLERS OF ASSETS, (IX) TO DISPOSE OF ASSETS IN WHOLESALE RATHER THAN
RETAIL MARKETS, (X) TO DISCLAIM DISPOSITION WARRANTIES, (XI) TO PURCHASE
INSURANCE OR CREDIT ENHANCEMENTS TO INSURE AGENT OR LENDERS AGAINST RISKS OF
LOSS, COLLECTION OR DISPOSITION OF COLLATERAL OR TO PROVIDE TO AGENT OR LENDERS
A GUARANTEED RETURN FROM THE COLLECTION OR DISPOSITION OF COLLATERAL, OR (XII)
TO THE EXTENT DEEMED APPROPRIATE BY AGENT, TO OBTAIN THE SERVICES OF OTHER
BROKERS, INVESTMENT BANKERS, CONSULTANTS AND OTHER PROFESSIONALS TO ASSIST AGENT
IN THE COLLECTION OR DISPOSITION OF ANY OF THE COLLATERAL. EACH BORROWER AND
GUARANTOR ACKNOWLEDGES THAT THE PURPOSE OF THIS SECTION IS TO PROVIDE
NON-EXHAUSTIVE INDICATIONS OF WHAT ACTIONS OR OMISSIONS BY AGENT OR ANY LENDER
WOULD NOT BE COMMERCIALLY UNREASONABLE IN THE EXERCISE BY AGENT OR ANY LENDER OF
REMEDIES AGAINST THE COLLATERAL AND THAT OTHER ACTIONS OR OMISSIONS BY AGENT OR
ANY LENDER SHALL NOT BE DEEMED COMMERCIALLY UNREASONABLE SOLELY ON ACCOUNT OF
NOT BEING INDICATED IN THIS SECTION. WITHOUT LIMITATION OF THE FOREGOING,
NOTHING CONTAINED IN THIS SECTION SHALL BE CONSTRUED TO GRANT ANY RIGHTS TO ANY
BORROWER OR GUARANTOR OR TO IMPOSE ANY DUTIES ON AGENT OR LENDERS THAT WOULD NOT
HAVE BEEN GRANTED OR IMPOSED BY THIS AGREEMENT OR BY APPLICABLE LAW IN THE
ABSENCE OF THIS SECTION.

 

(F)            FOR THE PURPOSE OF ENABLING AGENT TO EXERCISE THE RIGHTS AND
REMEDIES HEREUNDER, EACH BORROWER AND OBLIGOR HEREBY GRANTS TO AGENT, TO THE
EXTENT ASSIGNABLE, AN IRREVOCABLE, NON-EXCLUSIVE LICENSE (EXERCISABLE AT ANY
TIME AN EVENT OF DEFAULT SHALL EXIST OR HAVE OCCURRED AND FOR SO LONG AS THE
SAME IS CONTINUING) WITHOUT PAYMENT OF ROYALTY OR OTHER COMPENSATION TO ANY
BORROWER OR OBLIGOR, TO USE, ASSIGN, LICENSE OR SUBLICENSE ANY OF THE
TRADEMARKS, SERVICE-MARKS, TRADE NAMES, BUSINESS NAMES, TRADE STYLES, DESIGNS,
LOGOS AND OTHER SOURCE OF BUSINESS IDENTIFIERS AND OTHER INTELLECTUAL PROPERTY
AND GENERAL INTANGIBLES NOW OWNED OR HEREAFTER ACQUIRED BY ANY BORROWER OR
OBLIGOR, WHEREVER THE SAME MAYBE LOCATED, INCLUDING IN SUCH LICENSE REASONABLE
ACCESS TO ALL MEDIA IN WHICH ANY OF THE LICENSED ITEMS MAY BE RECORDED OR STORED
AND TO ALL COMPUTER PROGRAMS USED FOR THE COMPILATION OR PRINTOUT THEREOF.

 

(G)           AT ANY TIME AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING,
AGENT MAY APPLY THE CASH PROCEEDS OF COLLATERAL ACTUALLY RECEIVED BY AGENT FROM
ANY SALE, LEASE, FORECLOSURE OR OTHER DISPOSITION OF THE COLLATERAL TO PAYMENT
OF THE OBLIGATIONS, IN WHOLE OR IN PART AND IN ACCORDANCE WITH THE TERMS HEREOF,
WHETHER OR NOT THEN DUE OR MAY HOLD SUCH PROCEEDS AS CASH COLLATERAL FOR THE
OBLIGATIONS. BORROWERS AND GUARANTORS SHALL REMAIN LIABLE TO AGENT AND LENDERS
FOR THE PAYMENT OF ANY DEFICIENCY WITH INTEREST AT THE HIGHEST RATE PROVIDED FOR
HEREIN AND ALL COSTS AND EXPENSES OF COLLECTION OR ENFORCEMENT, INCLUDING
ATTORNEYS’ FEES AND EXPENSES.

 

(H)           WITHOUT LIMITING THE FOREGOING, UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF A DEFAULT OR AN EVENT OF DEFAULT, (I) AGENT AND LENDERS MAY, AT
AGENT’S OPTION, AND UPON THE OCCURRENCE OF AN EVENT OF DEFAULT AT THE DIRECTION
OF THE REQUIRED LENDERS, AGENT AND LENDERS SHALL, WITHOUT NOTICE, (A) CEASE
MAKING LOANS OR ARRANGING FOR LETTER OF CREDIT ACCOMMODATIONS OR REDUCE THE
LENDING FORMULAS OR AMOUNTS OF LOANS AND LETTER OF CREDIT ACCOMMODATIONS
AVAILABLE TO BORROWERS AND/OR (B) TERMINATE ANY PROVISION OF THIS AGREEMENT
PROVIDING FOR ANY FUTURE LOANS OR LETTER OF CREDIT ACCOMMODATIONS TO BE MADE BY
AGENT AND LENDERS TO BORROWERS AND (II) AGENT MAY, AT ITS OPTION, ESTABLISH SUCH
RESERVES AS AGENT DETERMINES, WITHOUT LIMITATION OR RESTRICTION, NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN.

 

SECTION 11.                          JURY TRIAL WAIVER; OTHER WAIVERS AND
CONSENTS; GOVERNING LAW

 

105

--------------------------------------------------------------------------------

 

11.1         Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver.

 

(A)           THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT AND
THE OTHER FINANCING AGREEMENTS (EXCEPT AS OTHERWISE PROVIDED THEREIN) AND ANY
DISPUTE ARISING OUT OF THE RELATIONSHIP BETWEEN THE PARTIES HERETO, WHETHER IN
CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK BUT EXCLUDING ANY PRINCIPLES OF CONFLICTS OF LAW OR OTHER
RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAW OF ANY JURISDICTION
OTHER THAN THE LAWS OF THE STATE OF NEW YORK.

 

(B)           BORROWERS, GUARANTORS, AGENT AND LENDERS IRREVOCABLY CONSENT AND
SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF
NEW YORK, NEW YORK COUNTY IN THE BOROUGH OF MANHATTAN AND UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WHICHEVER AGENT MAY ELECT, AND
WAIVE ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY
ACTION INSTITUTED THEREIN ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER
FINANCING AGREEMENTS OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE
OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT,
TORT, EQUITY OR OTHERWISE, AND AGREE THAT ANY DISPUTE WITH RESPECT TO ANY SUCH
MATTERS SHALL BE HEARD ONLY IN THE COURTS DESCRIBED ABOVE (EXCEPT THAT AGENT AND
LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST ANY
BORROWER OR GUARANTOR OR ITS OR THEIR PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION WHICH AGENT DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON
THE COLLATERAL OR TO OTHERWISE ENFORCE ITS RIGHTS AGAINST ANY BORROWER OR
GUARANTOR OR ITS OR THEIR PROPERTY).

 

(C)           EACH BORROWER AND GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE
MADE BY CERTIFIED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO ITS ADDRESS SET
FORTH HEREIN AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS
AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAILS, OR, AT AGENT’S
OPTION, BY SERVICE UPON ANY BORROWER OR GUARANTOR (OR ADMINISTRATIVE BORROWER ON
BEHALF OF SUCH BORROWER OR GUARANTOR) IN ANY OTHER MANNER PROVIDED UNDER THE
RULES OF ANY SUCH COURTS. WITHIN THIRTY (30) DAYS AFTER SUCH SERVICE, SUCH
BORROWER OR GUARANTOR SHALL APPEAR IN ANSWER TO SUCH PROCESS, FAILING WHICH SUCH
BORROWER OR GUARANTOR SHALL BE DEEMED IN DEFAULT AND JUDGMENT MAY BE ENTERED BY
AGENT AGAINST SUCH BORROWER OR GUARANTOR FOR THE AMOUNT OF THE CLAIM AND OTHER
RELIEF REQUESTED.

 

(D)           BORROWERS, GUARANTORS, AGENT AND LENDERS EACH HEREBY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN
RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE
TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.
BORROWERS, GUARANTORS, AGENT AND LENDERS EACH 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 BORROWER, ANY GUARANTOR, AGENT OR ANY LENDER
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS

 

106

--------------------------------------------------------------------------------

 

AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

(E)           AGENT AND LENDERS SHALL NOT HAVE ANY LIABILITY TO ANY BORROWER OR
GUARANTOR (WHETHER IN TORT, CONTRACT, EQUITY OR OTHERWISE) FOR LOSSES SUFFERED
BY SUCH BORROWER OR GUARANTOR IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY
RELATED TO THE TRANSACTIONS OR RELATIONSHIPS CONTEMPLATED BY THIS AGREEMENT, OR
ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION HEREWITH, UNLESS IT IS
DETERMINED BY A FINAL AND NON-APPEALABLE JUDGMENT OR COURT ORDER BINDING ON
AGENT AND SUCH LENDER, THAT THE LOSSES WERE THE RESULT OF ACTS OR OMISSIONS
CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IN ANY SUCH LITIGATION,
AGENT AND LENDERS SHALL BE ENTITLED TO THE BENEFIT OF THE REBUTTABLE PRESUMPTION
THAT IT ACTED IN GOOD FAITH AND WITH THE EXERCISE OF ORDINARY CARE IN THE
PERFORMANCE BY IT OF THE TERMS OF THIS AGREEMENT. EACH BORROWER AND GUARANTOR:
(I) CERTIFIES THAT NEITHER AGENT, ANY LENDER NOR ANY REPRESENTATIVE, AGENT OR
ATTORNEY ACTING FOR OR ON BEHALF OF AGENT OR ANY LENDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT AGENT AND LENDERS WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE ANY OF THE WAIVERS PROVIDED FOR IN THIS AGREEMENT OR
ANY OF THE OTHER FINANCING AGREEMENTS AND (II) ACKNOWLEDGES THAT IN ENTERING
INTO THIS AGREEMENT AND THE OTHER FINANCING AGREEMENTS, AGENT AND LENDERS ARE
RELYING UPON, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS SET FORTH IN
THIS SECTION 11.1 AND ELSEWHERE HEREIN AND THEREIN.

 

11.2    Waiver of Notices . Each Borrower and Guarantor hereby expressly waives
demand, presentment, protest and notice of protest and notice of dishonor with
respect to any and all instruments and chattel paper, included in or evidencing
any of the Obligations or the Collateral, and any and all other demands and
notices of any kind or nature whatsoever with respect to the Obligations, the
Collateral and this Agreement, except such as are expressly provided for herein.
No notice to or demand on any Borrower or Guarantor which Agent or any Lender
may elect to give shall entitle such Borrower or Guarantor to any other or
further notice or demand in the same, similar or other circumstances.

 

11.3    Amendments and Waivers.

 

(A)           NEITHER THIS AGREEMENT NOR ANY OTHER FINANCING AGREEMENT NOR ANY
TERMS HEREOF OR THEREOF MAY BE AMENDED, WAIVED, DISCHARGED OR TERMINATED UNLESS
SUCH AMENDMENT, WAIVER, DISCHARGE OR TERMINATION IS IN WRITING SIGNED BY AGENT
AND THE REQUIRED LENDERS OR AT AGENT’S OPTION, BY AGENT WITH THE AUTHORIZATION
OF THE REQUIRED LENDERS, AND AS TO AMENDMENTS TO ANY OF THE FINANCING AGREEMENTS
(OTHER THAN WITH RESPECT TO ANY PROVISION OF SECTION 12 HEREOF), BY ANY
BORROWER; EXCEPT, THAT, NO SUCH AMENDMENT, WAIVER, DISCHARGE OR TERMINATION
SHALL:

 

(I)            REDUCE THE INTEREST RATE OR ANY FEES OR EXTEND THE TIME OF
PAYMENT OF PRINCIPAL, INTEREST OR ANY FEES OR REDUCE THE PRINCIPAL AMOUNT OF ANY
LOAN OR LETTER OF CREDIT ACCOMMODATIONS, IN EACH CASE WITHOUT THE CONSENT OF
EACH LENDER DIRECTLY AFFECTED THEREBY,

 

(I)            INCREASE THE COMMITMENT OF ANY LENDER OVER THE AMOUNT THEREOF
THEN IN EFFECT OR PROVIDED HEREUNDER, IN EACH CASE WITHOUT THE CONSENT OF THE
LENDER DIRECTLY AFFECTED THEREBY,

 

107

--------------------------------------------------------------------------------

 

(II)           RELEASE ANY COLLATERAL (EXCEPT AS EXPRESSLY REQUIRED HEREUNDER OR
UNDER ANY OF THE OTHER FINANCING AGREEMENTS OR APPLICABLE LAW AND EXCEPT AS
PERMITTED UNDER SECTION 12.11(B) HEREOF), WITHOUT THE CONSENT OF AGENT AND ALL
OF LENDERS,

 

(III)          REDUCE ANY PERCENTAGE SPECIFIED IN THE DEFINITION OF REQUIRED
LENDERS, WITHOUT THE CONSENT OF AGENT AND ALL OF LENDERS,

 

(IV)          CONSENT TO THE ASSIGNMENT OR TRANSFER BY ANY BORROWER OR GUARANTOR
OF ANY OF THEIR RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT, WITHOUT THE CONSENT
OF AGENT AND ALL OF LENDERS,

 

(V)           AMEND, MODIFY OR WAIVE ANY TERMS OF THIS SECTION 11.3 OR SECTION
6.4 HEREOF, WITHOUT THE CONSENT OF AGENT AND ALL OF LENDERS, OR

 

(VI)          (A) INCREASE THE ADVANCE RATES CONSTITUTING PART OF THE BORROWING
BASE OR INCREASE THE SUBLIMITS WITH RESPECT TO THE INVENTORY LOAN LIMIT, THE
FUEL INVENTORY LOAN LIMIT, THE FIXED ASSET AVAILABILITY LIMIT, REVOLVING LOANS
BASED ON ELIGIBLE INVENTORY OR PERISHABLE INVENTORY OR FOR LETTER OF CREDIT
ACCOMMODATIONS, WITHOUT THE CONSENT OF AGENT AND ALL OF LENDERS OR (B) AMEND,
MODIFY OR WAIVE ANY PROVISIONS OF THE DEFINITION OF THE TERM BORROWING BASE OR
ANY OF THE DEFINED TERMS REFERRED TO IN THE DEFINITION OF THE TERM BORROWING
BASE, IN EACH CASE IF THE EFFECT THEREOF INCREASES THE AMOUNT OF THE BORROWING
BASE, WITHOUT THE CONSENT OF AGENT AND ALL OF LENDERS.

 

(B)           AGENT AND LENDERS SHALL NOT, BY ANY ACT, DELAY, OMISSION OR
OTHERWISE BE DEEMED TO HAVE EXPRESSLY OR IMPLIEDLY WAIVED ANY OF ITS OR THEIR
RIGHTS, POWERS AND/OR REMEDIES UNLESS SUCH WAIVER SHALL BE IN WRITING AND SIGNED
AS PROVIDED HEREIN. ANY SUCH WAIVER SHALL BE ENFORCEABLE ONLY TO THE EXTENT
SPECIFICALLY SET FORTH THEREIN. A WAIVER BY AGENT OR ANY LENDER OF ANY RIGHT,
POWER AND/OR REMEDY ON ANY ONE OCCASION SHALL NOT BE CONSTRUED AS A BAR TO OR
WAIVER OF ANY SUCH RIGHT, POWER AND/OR REMEDY WHICH AGENT OR ANY LENDER WOULD
OTHERWISE HAVE ON ANY FUTURE OCCASION, WHETHER SIMILAR IN KIND OR OTHERWISE.

 

(C)           NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTION
11.3(A) ABOVE, IN CONNECTION WITH ANY AMENDMENT, WAIVER, DISCHARGE OR
TERMINATION, IN THE EVENT THAT ANY LENDER WHOSE CONSENT THERETO IS REQUIRED
SHALL FAIL TO CONSENT OR FAIL TO CONSENT IN A TIMELY MANNER (SUCH LENDER BEING
REFERRED TO HEREIN AS A “NON-CONSENTING LENDER”), BUT THE CONSENT OF ANY OTHER
LENDERS TO SUCH AMENDMENT, WAIVER, DISCHARGE OR TERMINATION THAT IS REQUIRED ARE
OBTAINED, IF ANY, THEN WACHOVIA OR, WITH THE PRIOR WRITTEN CONSENT OF AGENT,
ADMINISTRATIVE BORROWER, SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, AT ANY
TIME THEREAFTER, AND UPON THE EXERCISE BY WACHOVIA OR, WITH THE PRIOR WRITTEN
CONSENT OF AGENT, ADMINISTRATIVE BORROWER OF SUCH RIGHT, SUCH NON-CONSENTING
LENDER SHALL HAVE THE OBLIGATION, TO SELL, ASSIGN AND TRANSFER TO WACHOVIA OR
SUCH ELIGIBLE TRANSFEREE AS WACHOVIA OR, WITH THE PRIOR WRITTEN CONSENT OF
AGENT, ADMINISTRATIVE BORROWER MAY SPECIFY, THE COMMITMENT OF SUCH
NON-CONSENTING LENDER AND ALL RIGHTS AND INTERESTS OF SUCH NON-CONSENTING LENDER
PURSUANT THERETO. WACHOVIA OR, WITH THE PRIOR WRITTEN CONSENT OF AGENT,
ADMINISTRATIVE BORROWER SHALL PROVIDE THE NON-CONSENTING LENDER WITH PRIOR
WRITTEN NOTICE OF ITS INTENT TO EXERCISE ITS RIGHT UNDER THIS SECTION, WHICH
NOTICE SHALL SPECIFY ON DATE ON WHICH SUCH PURCHASE AND SALE SHALL OCCUR. SUCH
PURCHASE AND SALE SHALL BE PURSUANT TO THE TERMS OF AN ASSIGNMENT AND ACCEPTANCE
(WHETHER OR NOT EXECUTED BY THE NON-CONSENTING LENDER), EXCEPT THAT ON THE DATE
OF SUCH PURCHASE AND SALE, WACHOVIA, OR SUCH ELIGIBLE TRANSFEREE SPECIFIED BY
WACHOVIA OR, WITH THE PRIOR WRITTEN CONSENT OF AGENT,

 

108

--------------------------------------------------------------------------------

 

ADMINISTRATIVE BORROWER, SHALL PAY TO THE NON-CONSENTING LENDER (EXCEPT AS
WACHOVIA AND SUCH NON-CONSENTING LENDER MAY OTHERWISE AGREE) THE AMOUNT EQUAL
TO: (I) THE PRINCIPAL BALANCE OF THE LOANS HELD BY THE NON-CONSENTING LENDER
OUTSTANDING AS FOR THE CLOSE OF BUSINESS ON THE BUSINESS DAY IMMEDIATELY
PRECEDING THE EFFECTIVE DATE OF SUCH PURCHASE AND SALE, PLUS (II) AMOUNTS
ACCRUED AND UNPAID IN RESPECT OF INTEREST AND FEES PAYABLE TO THE NON-CONSENTING
LENDER TO THE EFFECTIVE DATE OF THE PURCHASE (BUT IN NO EVENT SHALL THE
NON-CONSENTING LENDER BE DEEMED ENTITLED TO ANY EARLY TERMINATION FEE). SUCH
PURCHASE AND SALE SHALL BE EFFECTIVE ON THE DATE OF THE PAYMENT OF SUCH AMOUNT
TO THE NON-CONSENTING LENDER AND THE COMMITMENT OF THE NON-CONSENTING LENDER
SHALL TERMINATE ON SUCH DATE.

 

(D)           THE CONSENT OF AGENT SHALL BE REQUIRED FOR ANY AMENDMENT, WAIVER
OR CONSENT AFFECTING THE RIGHTS OR DUTIES OF AGENT HEREUNDER OR UNDER ANY OF THE
OTHER FINANCING AGREEMENTS, IN ADDITION TO THE CONSENT OF THE LENDERS OTHERWISE
REQUIRED BY THIS SECTION AND THE EXERCISE BY AGENT OF ANY OF ITS RIGHTS
HEREUNDER WITH RESPECT TO RESERVES OR ELIGIBLE ACCOUNTS OR ELIGIBLE INVENTORY
SHALL NOT BE DEEMED AN AMENDMENT TO THE ADVANCE RATES PROVIDED FOR IN THIS
SECTION 11.3.

 

(E)           THE CONSENT OF AGENT AND ANY BANK PRODUCT PROVIDER THAT IS
PROVIDING BANK PRODUCTS AND HAS OUTSTANDING ANY SUCH BANK PRODUCTS AT SUCH TIME
THAT ARE SECURED HEREUNDER SHALL BE REQUIRED FOR ANY AMENDMENT TO THE PRIORITY
OF PAYMENT OF OBLIGATIONS ARISING UNDER OR PURSUANT TO ANY HEDGE AGREEMENTS OF A
BORROWER OR GUARANTOR OR OTHER BANK PRODUCTS AS SET FORTH IN SECTION 6.4(A)
HEREOF.

 

11.4         Waiver of Counterclaims. Each Borrower and Guarantor waives all
rights to interpose any claims, deductions, setoffs or counterclaims of any
nature (other then compulsory counterclaims) in any action or proceeding with
respect to this Agreement, the Obligations, the Collateral or any matter arising
therefrom or relating hereto or thereto.

 

11.5         Indemnification. Each Borrower and Guarantor shall, jointly and
severally, indemnify and hold Agent and each Lender, and its officers,
directors, agents, employees, advisors and counsel and their respective
Affiliates (each such person being an “Indemnitee”), harmless from and against
any and all losses, claims, damages, liabilities, costs or expenses (including
attorneys’ fees and expenses) imposed on, incurred by or asserted against any of
them in connection with any litigation, investigation, claim or proceeding
commenced or threatened related to the negotiation, preparation, execution,
delivery, enforcement, performance or administration of this Agreement, any
other Financing Agreements, or any undertaking or proceeding related to any of
the transactions contemplated hereby or any act, omission, event or transaction
related or attendant thereto, including amounts paid in settlement, court costs,
and the fees and expenses of counsel except that Borrowers and Guarantors shall
not have any obligation under this Section 11.5 to indemnify an Indemnitee with
respect to a matter covered hereby resulting from the gross negligence or
willful misconduct of such Indemnitee as determined pursuant to a final,
non-appealable order of a court of competent jurisdiction (but without limiting
the obligations of Borrowers or Guarantors as to any other Indemnitee). To the
extent that the undertaking to indemnify, pay and hold harmless set forth in
this Section may be unenforceable because it violates any law or public policy,
Borrowers and Guarantors shall pay the maximum portion which it is permitted to
pay under applicable law to Agent and Lenders in satisfaction of indemnified
matters under this Section. To the extent permitted by applicable law, no
Borrower or Guarantor shall assert, and each Borrower and Guarantor hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential

 

109

--------------------------------------------------------------------------------

 

or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any of the other Financing
Agreements or any undertaking or transaction contemplated hereby. All amounts
due under this Section shall be payable upon demand. The foregoing indemnity
shall survive the payment of the Obligations and the termination or non-renewal
of this Agreement.

 

SECTION 12.         THE AGENT

 

12.1         Appointment, Powers and Immunities. Each Secured Party irrevocably
designates, appoints and authorizes Wachovia to act as Agent hereunder and under
the other Financing Agreements with such powers as are specifically delegated to
Agent by the terms of this Agreement and of the other Financing Agreements,
together with such other powers as are reasonably incidental thereto. Agent (a)
shall have no duties or responsibilities except those expressly set forth in
this Agreement and in the other Financing Agreements, and shall not by reason of
this Agreement or any other Financing Agreement be a trustee or fiduciary for
any Secured Party; (b) shall not be responsible to Lenders for any recitals,
statements, representations or warranties contained in this Agreement or in any
of the other Financing Agreements, or in any certificate or other document
referred to or provided for in, or received by any of them under, this Agreement
or any other Financing Agreement, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Financing Agreement or any other document referred to or provided for herein or
therein or for any failure by any Borrower or any Obligor or any other Person to
perform any of its obligations hereunder or thereunder; and (c) shall not be
responsible to Lenders for any action taken or omitted to be taken by it
hereunder or under any other Financing Agreement or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence or willful misconduct
as determined by a final non-appealable judgment of a court of competent
jurisdiction. Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. Agent may deem and treat the
payee of any note as the holder thereof for all purposes hereof unless and until
the assignment thereof pursuant to an agreement (if and to the extent permitted
herein) in form and substance reasonably satisfactory to Agent shall have been
delivered to and acknowledged by Agent. Wachovia Capital Markets LLC is hereby
designated as the sole lead arranger, manager and bookrunner with respect to the
Credit Facility. The designation of Wachovia Capital Markets LLC as sole lead
arranger, manager and bookrunner shall not create any rights in favor of it in
such capacity nor subject it to any duties or obligations in such capacity.

 

12.2         Reliance by Agent. Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telecopy, telex, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by Agent. As to any matters not expressly
provided for by this Agreement or any other Financing Agreement, Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
or thereunder in accordance with instructions given by the Required Lenders or
all of Lenders as is required in such circumstance, and such instructions of
such Agents and any action taken or failure to act pursuant thereto shall be
binding on all Lenders.

 

12.3    Events of Default.

 

110

--------------------------------------------------------------------------------

 

(A)           AGENT SHALL NOT BE DEEMED TO HAVE KNOWLEDGE OR NOTICE OF THE
OCCURRENCE OF A DEFAULT OR AN EVENT OF DEFAULT OR OTHER FAILURE OF A CONDITION
PRECEDENT TO THE LOANS AND LETTER OF CREDIT ACCOMMODATIONS HEREUNDER, UNLESS AND
UNTIL AGENT HAS RECEIVED WRITTEN NOTICE FROM A LENDER, OR A BORROWER SPECIFYING
SUCH EVENT OF DEFAULT OR ANY UNFULFILLED CONDITION PRECEDENT, AND STATING THAT
SUCH NOTICE IS A “NOTICE OF DEFAULT OR FAILURE OF CONDITION”. IN THE EVENT THAT
AGENT RECEIVES SUCH A NOTICE OF DEFAULT OR FAILURE OF CONDITION, AGENT SHALL
GIVE PROMPT NOTICE THEREOF TO THE LENDERS. AGENT SHALL (SUBJECT TO SECTION 12.7)
TAKE SUCH ACTION WITH RESPECT TO ANY SUCH EVENT OF DEFAULT OR FAILURE OF
CONDITION PRECEDENT AS SHALL BE DIRECTED BY THE REQUIRED LENDERS TO THE EXTENT
PROVIDED FOR HEREIN; PROVIDED, THAT, UNLESS AND UNTIL AGENT SHALL HAVE RECEIVED
SUCH DIRECTIONS, AGENT MAY (BUT SHALL NOT BE OBLIGATED TO) TAKE SUCH ACTION, OR
REFRAIN FROM TAKING SUCH ACTION, WITH RESPECT TO OR BY REASON OF SUCH EVENT OF
DEFAULT OR FAILURE OF CONDITION PRECEDENT, AS IT SHALL DEEM ADVISABLE IN THE
BEST INTEREST OF LENDERS. WITHOUT LIMITING THE FOREGOING, AND NOTWITHSTANDING
THE EXISTENCE OR OCCURRENCE AND CONTINUANCE OF AN EVENT OF DEFAULT OR ANY OTHER
FAILURE TO SATISFY ANY OF THE CONDITIONS PRECEDENT SET FORTH IN SECTION 4 OF
THIS AGREEMENT TO THE CONTRARY, UNLESS AND UNTIL OTHERWISE DIRECTED BY THE
REQUIRED LENDERS, AGENT MAY, BUT SHALL HAVE NO OBLIGATION TO, CONTINUE TO MAKE
LOANS AND ISSUE OR CAUSE TO BE ISSUED LETTER OF CREDIT ACCOMMODATIONS FOR THE
RATABLE ACCOUNT AND RISK OF LENDERS FROM TIME TO TIME IF AGENT BELIEVES MAKING
SUCH LOANS OR ISSUING OR CAUSING TO BE ISSUED SUCH LETTER OF CREDIT
ACCOMMODATIONS IS IN THE BEST INTERESTS OF LENDERS.

 

(B)           EXCEPT WITH THE PRIOR WRITTEN CONSENT OF AGENT, NO LENDER MAY
ASSERT OR EXERCISE ANY ENFORCEMENT RIGHT OR REMEDY IN RESPECT OF THE LOANS,
LETTER OF CREDIT ACCOMMODATIONS OR OTHER OBLIGATIONS, AS AGAINST ANY BORROWER OR
OBLIGOR OR ANY OF THE COLLATERAL OR OTHER PROPERTY OF ANY BORROWER OR OBLIGOR.

 

12.4    Wachovia in its Individual Capacity. With respect to its Commitment and
the Loans made and Letter of Credit Accommodations issued or caused to be issued
by it (and any successor acting as Agent), so long as Wachovia shall be a Lender
hereunder, it shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as Agent, and the
term “Lender” or “Lenders” shall, unless the context otherwise indicates,
include Wachovia in its individual capacity as Lender hereunder. Wachovia (and
any successor acting as Agent) and its Affiliates may (without having to account
therefor to any Lender) lend money to, make investments in and generally engage
in any kind of business with Borrowers (and any of its Subsidiaries or
Affiliates) as if it were not acting as Agent, and Wachovia and its Affiliates
may accept fees and other consideration from any Borrower or Guarantor and any
of its Subsidiaries and Affiliates for services in connection with this
Agreement or otherwise without having to account for the same to Lenders.

 

12.5    Indemnification. Lenders agree to indemnify Agent (to the extent not
reimbursed by Borrowers hereunder and without limiting any obligations of
Borrowers hereunder) ratably, in accordance with their Pro Rata Shares, for any
and all claims of any kind and nature whatsoever that may be imposed on,
incurred by or asserted against Agent (including by any Lender) arising out of
or by reason of any investigation in or in any way relating to or arising out of
this Agreement or any other Financing Agreement or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including the costs and expenses that Agent is
obligated to pay hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided, that, no Lender shall be
liable for any of the foregoing to the extent it arises from the gross
negligence or willful misconduct of

 

111

--------------------------------------------------------------------------------

 

the party to be indemnified as determined by a final non-appealable judgment of
a court of competent jurisdiction. The foregoing indemnity shall survive the
payment of the Obligations and the termination or non-renewal of this Agreement.

 

12.6         Non-Reliance on Agent and Other Lenders. Each Lender agrees that it
has, independently and without reliance on Agent or other Lender, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis of Borrowers and Obligors and has made its own decision to enter into
this Agreement and that it will, independently and without reliance upon Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Financing
Agreements. Agent shall not be required to keep itself informed as to the
performance or observance by any Borrower or Obligor of any term or provision of
this Agreement or any of the other Financing Agreements or any other document
referred to or provided for herein or therein or to inspect the properties or
books of any Borrower or Obligor. Agent will use reasonable efforts to provide
Lenders with any information received by Agent from any Borrower or Obligor
which is required to be provided to Lenders or deemed to be requested by Lenders
hereunder and with a copy of any Notice of Default or Failure of Condition
received by Agent from any Borrower or any Lender; provided, that, Agent shall
not be liable to any Lender for any failure to do so, except to the extent that
such failure is attributable to Agent’s own gross negligence or willful
misconduct as determined by a final non-appealable judgment of a court of
competent jurisdiction. Except for notices, reports and other documents
expressly required to be furnished to Lenders by Agent or deemed requested by
Lenders hereunder, Agent shall not have any duty or responsibility to provide
any Lender with any other credit or other information concerning the affairs,
financial condition or business of any Borrower or Obligor that may come into
the possession of Agent.

 

12.7         Failure to Act. Except for action expressly required of Agent
hereunder and under the other Financing- Agreements, Agent shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction from Lenders of their
indemnification obligations under Section 12.5 hereof against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.

 

12.8         Additional Loans. Agent shall not make any Revolving Loans or
provide any Letter of Credit Accommodations to any Borrower on behalf of Lenders
intentionally and with actual knowledge that such Revolving Loans or Letter of
Credit Accommodations would cause the aggregate amount of the total outstanding
Revolving Loans and Letter of Credit Accommodations to such Borrower to exceed
the Borrowing Base of such Borrower, without the prior consent of all Lenders,
except, that, Agent may make such additional Revolving Loans or provide such
additional Letter of Credit Accommodations on behalf of Lenders, intentionally
and with actual knowledge that such Revolving Loans or Letter of Credit
Accommodations will cause the total outstanding Revolving Loans and Letter of
Credit Accommodations to such Borrower to exceed the Borrowing Base of such
Borrower, as Agent may deem necessary or advisable in its discretion, provided,
that: (a) the total principal amount of the additional Revolving Loans or
additional Letter of Credit Accommodations to any Borrower which Agent may make
or provide after obtaining such actual knowledge that the aggregate principal
amount of the Revolving Loans equal or exceed the Borrowing Bases of Borrowers,
plus the amount of

 

112

--------------------------------------------------------------------------------

 

Special Agent Advances made pursuant to Section 12.11(a)(i) or (ii) hereof then
outstanding, shall not exceed the aggregate amount equal to ten (10%) percent of
the Maximum Credit, (b) no such additional Revolving Loan or Letter of Credit
Accommodation shall be outstanding more than ninety (90) days after the date
such additional Revolving Loan or Letter of Credit Accommodation is made or
issued (as the case may be), except as the Required Lenders may otherwise agree
and (c) the total outstanding principal amount of Loans, Letter of Credit
Accommodations and Special Agent Advances made pursuant to Section 12.11(a)(i)
and (ii) hereof shall not exceed the Maximum Credit. Each Lender shall be
obligated to pay Agent the amount of its Pro Rata Share of any such additional
Revolving Loans or Letter of Credit Accommodations.

 

12.9         Concerning the Collateral and the Related Financing Agreements.
Each Lender authorizes and directs Agent to enter into this Agreement and the
other Financing Agreements. Each Lender agrees that any action taken by Agent or
Required Lenders in accordance with the terms of this Agreement or the other
Financing Agreements and the exercise by Agent or Required Lenders of their
respective powers set forth therein or herein, together with such other powers
that are reasonably incidental thereto, shall be binding upon all of the
Lenders.

 

12.10       Field Audit, Examination Reports and other Information; Disclaimer
by Lenders. By signing this Agreement, each Lender:

 

(A)           IS DEEMED TO HAVE REQUESTED THAT AGENT FURNISH SUCH LENDER,
PROMPTLY AFTER IT BECOMES AVAILABLE, A COPY OF EACH FIELD AUDIT OR EXAMINATION
REPORT AND REPORT WITH RESPECT TO THE BORROWING BASE PREPARED OR RECEIVED BY
AGENT (EACH FIELD AUDIT OR EXAMINATION REPORT AND REPORT WITH RESPECT TO THE
BORROWING BASE BEING REFERRED TO HEREIN AS A “REPORT” AND COLLECTIVELY,
“REPORTS”), APPRAISALS WITH RESPECT TO THE COLLATERAL AND FINANCIAL STATEMENTS
WITH RESPECT TO PARENT AND ITS SUBSIDIARIES RECEIVED BY AGENT;

 

(B)           EXPRESSLY AGREES AND ACKNOWLEDGES THAT AGENT (I) DOES NOT MAKE ANY
REPRESENTATION OR WARRANTY AS TO THE ACCURACY OF ANY REPORT, APPRAISAL OR
FINANCIAL STATEMENT OR (II) SHALL NOT BE LIABLE FOR ANY INFORMATION CONTAINED IN
ANY REPORT, APPRAISAL OR FINANCIAL STATEMENT;

 

(C)           EXPRESSLY AGREES AND ACKNOWLEDGES THAT THE REPORTS ARE NOT
COMPREHENSIVE AUDITS OR EXAMINATIONS, THAT AGENT OR ANY OTHER PARTY PERFORMING
ANY AUDIT OR EXAMINATION WILL INSPECT ONLY SPECIFIC INFORMATION REGARDING
BORROWERS AND GUARANTORS AND WILL RELY SIGNIFICANTLY UPON BORROWERS’ AND
GUARANTORS’ BOOKS AND RECORDS, AS WELL AS ON REPRESENTATIONS OF BORROWERS’ AND
GUARANTORS’ PERSONNEL; AND

 

(D)           AGREES TO KEEP ALL REPORTS CONFIDENTIAL AND STRICTLY FOR ITS
INTERNAL USE IN ACCORDANCE WITH THE TERMS OF SECTION 13.5 HEREOF, AND NOT TO
DISTRIBUTE OR USE ANY REPORT IN ANY OTHER MANNER.

 

12.11       Collateral Matters.

 

(A)           AGENT MAY, AT ITS OPTION, FROM TIME TO TIME, AT ANY TIME ON OR
AFTER AN EVENT OF DEFAULT AND FOR SO LONG AS THE SAME IS CONTINUING OR UPON ANY
OTHER FAILURE OF A CONDITION PRECEDENT TO THE LOANS AND LETTER OF CREDIT
ACCOMMODATIONS HEREUNDER, MAKE SUCH DISBURSEMENTS AND ADVANCES (“SPECIAL AGENT
ADVANCES”) WHICH AGENT, IN ITS SOLE DISCRETION, (I)

 

113

--------------------------------------------------------------------------------

 

DEEMS NECESSARY OR DESIRABLE EITHER TO PRESERVE OR PROTECT THE COLLATERAL OR ANY
PORTION THEREOF OR (II) TO ENHANCE THE LIKELIHOOD OR MAXIMIZE THE AMOUNT OF
REPAYMENT BY BORROWERS AND GUARANTORS OF THE LOANS AND OTHER OBLIGATIONS, OR
(III) TO PAY ANY OTHER AMOUNT CHARGEABLE TO ANY BORROWER OR GUARANTOR PURSUANT
TO THE TERMS OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS
CONSISTING OF (A) COSTS, FEES AND EXPENSES AND (B) PAYMENTS TO ANY ISSUER IN
RESPECT OF LETTER OF CREDIT ACCOMMODATIONS WHICH ARE ISSUED IN ACCORDANCE WITH
THE TERMS OF THE OTHER SECTIONS OF THIS AGREEMENT; PROVIDED, THAT, THE TOTAL
OUTSTANDING PRINCIPAL AMOUNT OF THE SPECIAL AGENT ADVANCES PURSUANT TO SECTION
12.11(A)(I) AND (II) HEREOF PLUS THE TOTAL OUTSTANDING PRINCIPAL AMOUNT OF THE
ADDITIONAL LOANS AND LETTER OF CREDIT ACCOMMODATIONS WHICH AGENT MAY MAKE OR
PROVIDE AS SET FORTH IN SECTION 12.8 HEREOF SHALL NOT EXCEED THE AGGREGATE
AMOUNT EQUAL TO TEN (10%) PERCENT OF THE MAXIMUM CREDIT; PROVIDED, FURTHER,
THAT, THE TOTAL OUTSTANDING PRINCIPAL AMOUNT OF LOANS, LETTER OF CREDIT
ACCOMMODATIONS AND THE SPECIAL AGENT ADVANCES PURSUANT TO SECTION 12.11(A)(I)
AND (II) HEREOF SHALL NOT EXCEED THE MAXIMUM CREDIT. SPECIAL AGENT ADVANCES
SHALL BE REPAYABLE ON DEMAND AND TOGETHER WITH ALL INTEREST THEREON SHALL
CONSTITUTE OBLIGATIONS SECURED BY THE COLLATERAL. SPECIAL AGENT ADVANCES SHALL
NOT CONSTITUTE LOANS BUT SHALL OTHERWISE CONSTITUTE OBLIGATIONS HEREUNDER.
INTEREST ON SPECIAL AGENT ADVANCES SHALL BE PAYABLE AT THE INTEREST RATE THEN
APPLICABLE TO PRIME RATE LOANS AND SHALL BE PAYABLE ON DEMAND. WITHOUT
LIMITATION OF ITS OBLIGATIONS PURSUANT TO SECTION 6.10, EACH LENDER AGREES THAT
IT SHALL MAKE AVAILABLE TO AGENT, UPON AGENT’S DEMAND, IN IMMEDIATELY AVAILABLE
FUNDS, THE AMOUNT EQUAL TO SUCH LENDER’S PRO RATA SHARE OF EACH SUCH SPECIAL
AGENT ADVANCE. IF SUCH FUNDS ARE NOT MADE AVAILABLE TO AGENT BY SUCH LENDER,
SUCH LENDER SHALL BE DEEMED A DEFAULTING LENDER AND AGENT SHALL BE ENTITLED TO
RECOVER SUCH FUNDS, ON DEMAND FROM SUCH LENDER TOGETHER WITH INTEREST THEREON
FOR EACH DAY FROM THE DATE SUCH PAYMENT WAS DUE UNTIL THE DATE SUCH AMOUNT IS
PAID TO AGENT AT THE FEDERAL FUNDS RATE FOR EACH DAY DURING SUCH PERIOD (AS
PUBLISHED BY THE FEDERAL RESERVE BANK OF NEW YORK OR AT AGENT’S OPTION BASED ON
THE ARITHMETIC MEAN DETERMINED BY AGENT OF THE RATES FOR THE LAST TRANSACTION IN
OVERNIGHT FEDERAL FUNDS ARRANGED PRIOR TO 9:00 A.M. (NEW YORK CITY TIME) ON THAT
DAY BY EACH OF THE THREE LEADING BROKERS OF FEDERAL FUNDS TRANSACTIONS IN NEW
YORK CITY SELECTED BY AGENT) AND IF SUCH AMOUNTS ARE NOT PAID WITHIN THREE (3)
DAYS OF AGENT ‘S DEMAND, AT THE HIGHEST INTEREST RATE PROVIDED FOR IN SECTION
3.1 HEREOF APPLICABLE TO PRIME RATE LOANS.

 

(B)           LENDERS HEREBY IRREVOCABLY AUTHORIZE AGENT, AT ITS OPTION AND IN
ITS DISCRETION TO RELEASE ANY SECURITY INTEREST IN, MORTGAGE OR LIEN UPON, ANY
OF THE COLLATERAL (I) UPON TERMINATION OF THE COMMITMENTS AND PAYMENT AND
SATISFACTION OF ALL OF THE OBLIGATIONS AND DELIVERY OF CASH COLLATERAL TO THE
EXTENT REQUIRED UNDER SECTION 13.1 BELOW, OR (II) CONSTITUTING PROPERTY BEING
SOLD OR DISPOSED OF IF ADMINISTRATIVE BORROWER OR ANY BORROWER OR GUARANTOR
CERTIFIES TO AGENT THAT THE SALE OR DISPOSITION IS MADE IN COMPLIANCE WITH
SECTION 9.7 HEREOF (AND AGENT MAY RELY CONCLUSIVELY ON ANY SUCH CERTIFICATE,
WITHOUT FURTHER INQUIRY), AND TO THE EXTENT THAT THE CAPITAL STOCK OF ANY PROPCO
IS SOLD IN COMPLIANCE WITH SECTION 9.7 HEREOF, SUCH PROPCO SHALL CEASE TO BE A
GUARANTOR UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS, OR
(III) CONSTITUTING PROPERTY IN WHICH ANY BORROWER OR GUARANTOR DID NOT OWN AN
INTEREST AT THE TIME THE SECURITY INTEREST, MORTGAGE OR LIEN WAS GRANTED OR AT
ANY TIME THEREAFTER, OR (IV) CONSTITUTING PROPERTY BEING PLEDGED TO A THIRD
PARTY IF ADMINISTRATIVE BORROWER OR ANY BORROWER OR GUARANTOR CERTIFIES TO AGENT
THAT SUCH PLEDGE IS MADE IN COMPLIANCE WITH SECTION 9.8(L) HEREOF (AND AGENT MAY
RELY CONCLUSIVELY ON ANY SUCH CERTIFICATE, WITHOUT FURTHER INQUIRY), (V) HAVING
A VALUE IN THE AGGREGATE IN ANY TWELVE (12) MONTH PERIOD OF LESS THAN
$1,000,000, AND TO THE EXTENT AGENT MAY RELEASE ITS SECURITY INTEREST IN AND
LIEN UPON ANY SUCH COLLATERAL PURSUANT TO THE SALE OR OTHER DISPOSITION THEREOF,
SUCH SALE OR OTHER DISPOSITION SHALL BE DEEMED CONSENTED TO BY LENDERS, OR

 

114

--------------------------------------------------------------------------------

 

(VI) IF REQUIRED OR PERMITTED UNDER THE TERMS OF ANY OF THE OTHER FINANCING
AGREEMENTS, INCLUDING ANY INTERCREDITOR AGREEMENT, OR (VII) APPROVED, AUTHORIZED
OR RATIFIED IN WRITING BY ALL OF LENDERS. EXCEPT AS PROVIDED ABOVE, AGENT WILL
NOT RELEASE ANY SECURITY INTEREST IN, MORTGAGE OR LIEN UPON, ANY OF THE
COLLATERAL WITHOUT THE PRIOR WRITTEN AUTHORIZATION OF ALL OF LENDERS. UPON
REQUEST BY AGENT AT ANY TIME, LENDERS WILL PROMPTLY CONFIRM IN WRITING AGENT’S
AUTHORITY TO RELEASE PARTICULAR TYPES OR ITEMS OF COLLATERAL PURSUANT TO THIS
SECTION. NOTHING CONTAINED HEREIN SHALL BE CONSTRUED TO REQUIRE THE CONSENT OF
ANY BANK PRODUCT PROVIDER TO ANY RELEASE OF ANY COLLATERAL OR TERMINATION OF
SECURITY INTERESTS IN ANY COLLATERAL, EXCEPT FOR THE CASH COLLATERAL DELIVERED
PURSUANT TO SECTION 13.1(A) HEREOF FOR OBLIGATIONS ARISING UNDER OR IN
CONNECTION WITH ANY BANK PRODUCTS.

 

(C)           WITHOUT ANY MANNER LIMITING AGENT’S AUTHORITY TO ACT WITHOUT ANY
SPECIFIC OR FURTHER AUTHORIZATION OR CONSENT BY THE REQUIRED LENDERS, EACH
LENDER AGREES TO CONFIRM IN WRITING, UPON REQUEST BY AGENT, THE AUTHORITY TO
RELEASE COLLATERAL CONFERRED UPON AGENT UNDER THIS SECTION. AGENT SHALL (AND IS
HEREBY IRREVOCABLY AUTHORIZED BY LENDERS TO) EXECUTE SUCH DOCUMENTS AS MAY BE
NECESSARY TO EVIDENCE THE RELEASE OF THE SECURITY INTEREST, MORTGAGE OR LIENS
GRANTED TO AGENT UPON ANY COLLATERAL TO THE EXTENT SET FORTH ABOVE; PROVIDED,
THAT,  (I) AGENT SHALL NOT BE REQUIRED TO EXECUTE ANY SUCH DOCUMENT ON TERMS
WHICH, IN AGENT’S OPINION, WOULD EXPOSE AGENT TO LIABILITY OR CREATE ANY
OBLIGATIONS OR ENTAIL ANY CONSEQUENCE OTHER THAN THE RELEASE OF SUCH SECURITY
INTEREST, MORTGAGE OR LIENS WITHOUT RECOURSE OR WARRANTY AND  (II) SUCH RELEASE
SHALL NOT IN ANY MANNER DISCHARGE, AFFECT OR IMPAIR THE OBLIGATIONS OR ANY
SECURITY INTEREST, MORTGAGE OR LIEN UPON (OR OBLIGATIONS OF ANY BORROWER OR
GUARANTOR IN RESPECT OF) THE COLLATERAL RETAINED BY SUCH BORROWER OR GUARANTOR.

 

(D)           AGENT SHALL HAVE NO OBLIGATION WHATSOEVER TO ANY LENDER OR ANY
OTHER PERSON TO INVESTIGATE, CONFIRM OR ASSURE THAT THE COLLATERAL EXISTS OR IS
OWNED BY ANY BORROWER OR GUARANTOR OR IS CARED FOR, PROTECTED OR INSURED OR HAS
BEEN ENCUMBERED, OR THAT ANY PARTICULAR ITEMS OF COLLATERAL MEET THE ELIGIBILITY
CRITERIA APPLICABLE IN RESPECT OF THE LOANS OR LETTER OF CREDIT ACCOMMODATIONS
HEREUNDER, OR WHETHER ANY PARTICULAR RESERVES ARE APPROPRIATE, OR THAT THE LIENS
AND SECURITY INTERESTS GRANTED TO AGENT PURSUANT HERETO OR ANY OF THE FINANCING
AGREEMENTS OR OTHERWISE HAVE BEEN PROPERLY OR SUFFICIENTLY OR LAWFULLY CREATED,
PERFECTED, PROTECTED OR ENFORCED OR ARE ENTITLED TO ANY PARTICULAR PRIORITY, OR
TO EXERCISE AT ALL OR IN ANY PARTICULAR MANNER OR UNDER ANY DUTY OF CARE,
DISCLOSURE OR FIDELITY, OR TO CONTINUE EXERCISING, ANY OF THE RIGHTS,
AUTHORITIES AND POWERS GRANTED OR AVAILABLE TO AGENT IN THIS AGREEMENT OR IN ANY
OF THE OTHER FINANCING AGREEMENTS, IT BEING UNDERSTOOD AND AGREED THAT IN
RESPECT OF THE COLLATERAL, OR ANY ACT, OMISSION OR EVENT RELATED THERETO,
SUBJECT TO THE OTHER TERMS AND CONDITIONS CONTAINED HEREIN, AGENT MAY ACT IN ANY
MANNER IT MAY DEEM APPROPRIATE, IN ITS DISCRETION, GIVEN AGENT’S OWN INTEREST IN
THE COLLATERAL AS A LENDER AND THAT AGENT SHALL HAVE NO DUTY OR LIABILITY
WHATSOEVER TO ANY OTHER LENDER.

 

(E)           WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH LENDER
CONSENTS TO THE HPT LETTER AGREEMENTS (AS DEFINED BELOW) AND ANY OTHER
AGREEMENTS DELIVERED PURSUANT TO SECTION 9.12(D) HEREOF, AND AGREES TO BE BOUND
BY THE TERMS THEREOF, WHETHER OR NOT SUCH LENDER EXECUTES THE HPT LETTER
AGREEMENTS OR ANY SUCH OTHER AGREEMENTS. AS USED HEREIN, “HPT LETTER AGREEMENTS”
SHALL MEAN, COLLECTIVELY, THE LETTER AGREEMENTS REFERRED TO IN SECTION 1.67
HEREOF, AS THE SAME MAY BE AMENDED OR OTHERWISE MODIFIED FROM TIME TO TIME.

 

12.12  Agency for Perfection. Each Lender hereby appoints Agent and each other
Lender as agent and bailee for the purpose of perfecting the security interests
in and liens upon the

 

115

--------------------------------------------------------------------------------

 

Collateral of Agent in assets which, in accordance with Article 9 of the UCC can
be perfected only by possession (or where the security interest of a secured
party with possession has priority over the security interest of another secured
party) and Agent and each Lender hereby acknowledges that it holds possession of
any such Collateral for the benefit of Agent as secured party. Should any Lender
obtain possession of any such Collateral, such Lender shall notify Agent
thereof, and, promptly upon Agent’s request therefor shall deliver such
Collateral to Agent or in accordance with Agent’s instructions.

 

12.13  Successor Agent. Agent may resign as Agent upon thirty (30) days’ notice
to Lenders and Parent. If Agent resigns under this Agreement, the Required
Lenders shall appoint from among the Lenders a successor agent for Lenders. If
no successor agent is appointed prior to the effective date of the resignation
of Agent, Agent may appoint, after consulting with Lenders and Parent, a
successor agent from among Lenders. Upon the acceptance by the Lender so
selected of its appointment as successor agent hereunder, such successor agent
shall succeed to all of the rights, powers and duties of the retiring Agent and
the term “Agent” as used herein and in the other Financing Agreements shall mean
such successor agent and the retiring Agent’s appointment, powers and duties as
Agent shall be terminated. After any retiring Agent’s resignation hereunder as
Agent, the provisions of this Section 12 shall inure to its benefit as to any
actions taken or omitted by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is thirty
(30) days after the date of a retiring Agent ‘s notice of resignation, the
retiring Agent’s resignation shall nonetheless thereupon become effective and
Lenders shall perform all of the duties of Agent hereunder until such time, if
any, as the Required Lenders appoint a successor agent as provided for above.

 

12.14  Other Agent Designations. Agent may at any time and from time to time
determine that a Lender may, in addition, be a “Co-Agent”, “Syndication Agent”,
“Documentation Agent” or similar designation hereunder and enter into an
agreement with such Lender to have it so identified for purposes of this
Agreement. Any such designation shall be effective upon written notice by Agent
to Administrative Borrower of any such designation. Any Lender that is
designated as a Co-Agent, Syndication Agent, Documentation Agent or such similar
designation by Agent shall have no right, power, obligation, liability,
responsibility or duty under this Agreement or any of the other Financing
Agreements other than those applicable to all Lenders as such. Without limiting
the foregoing, the Lenders so identified shall not have or be deemed to have any
fiduciary relationship with any Lender and no Lender shall be deemed to have
relied, nor shall any Lender rely, on a Lender so identified as a Co-Agent,
Syndication Agent, Documentation Agent or such similar designation in deciding
to enter into this Agreement or in taking or not taking action hereunder.

 

SECTION 13.          TERM OF AGREEMENT; MISCELLANEOUS

 

13.1  Term.

 

(A)           THIS AGREEMENT AND THE OTHER FINANCING AGREEMENTS SHALL BECOME
EFFECTIVE AS OF THE DATE SET FORTH ON THE FIRST PAGE HEREOF AND SHALL CONTINUE
IN FULL FORCE AND EFFECT FOR A TERM ENDING ON THE DATE FIVE (5) YEARS FROM THE
DATE HEREOF (THE “MATURITY DATE”). BORROWERS MAY TERMINATE THIS AGREEMENT AT ANY
TIME UPON TEN (10) DAYS PRIOR WRITTEN NOTICE TO AGENT (WHICH NOTICE SHALL BE
IRREVOCABLE) AND AGENT MAY, AT ITS OPTION, AND SHALL AT THE DIRECTION OF
REQUIRED LENDERS, TERMINATE THIS AGREEMENT AT ANY TIME UPON THE OCCURRENCE AND
DURING THE CONTINUANCE OF AN EVENT OF DEFAULT. UPON THE MATURITY DATE OR ANY
OTHER EFFECTIVE DATE OF

 

116

--------------------------------------------------------------------------------

 

TERMINATION OF THE FINANCING AGREEMENTS, BORROWERS SHALL PAY TO AGENT ALL
OUTSTANDING AND UNPAID OBLIGATIONS AND SHALL FURNISH CASH COLLATERAL TO AGENT
(OR AT AGENT’S OPTION, A LETTER OF CREDIT ISSUED FOR THE ACCOUNT OF BORROWERS
AND AT BORROWERS’ EXPENSE, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
AGENT, BY AN ISSUER ACCEPTABLE TO AGENT AND PAYABLE TO AGENT AS BENEFICIARY) IN
SUCH AMOUNTS AS AGENT DETERMINES ARE REASONABLY NECESSARY TO SECURE AGENT AND
LENDERS FROM LOSS, COST, DAMAGE OR EXPENSE, INCLUDING REASONABLE ATTORNEYS’ FEES
AND EXPENSES, IN CONNECTION WITH ANY CONTINGENT OBLIGATIONS (OTHER THAN
UNASSERTED CONTINGENT INDEMNIFICATION CLAIMS), INCLUDING ISSUED AND OUTSTANDING
LETTER OF CREDIT ACCOMMODATIONS AND CHECKS OR OTHER PAYMENTS PROVISIONALLY
CREDITED TO THE OBLIGATIONS AND/OR AS TO WHICH AGENT OR ANY LENDER HAS NOT YET
RECEIVED FINAL AND INDEFEASIBLE PAYMENT AND ANY CONTINUING OBLIGATIONS OF AGENT
OR ANY LENDER PURSUANT TO ANY DEPOSIT ACCOUNT CONTROL AGREEMENT AND FOR ANY OF
THE OBLIGATIONS ARISING UNDER OR IN CONNECTION WITH ANY BANK PRODUCTS IN SUCH
AMOUNTS AS THE PARTY PROVIDING SUCH BANK PRODUCTS MAY REASONABLY REQUIRE (UNLESS
SUCH OBLIGATIONS ARISING UNDER OR IN CONNECTION WITH ANY BANK PRODUCTS ARE PAID
IN FULL IN CASH AND TERMINATED IN A MANNER REASONABLY SATISFACTORY TO SUCH OTHER
PARTY). THE AMOUNT OF SUCH CASH COLLATERAL (OR LETTER OF CREDIT, AS AGENT MAY
DETERMINE) AS TO ANY LETTER OF CREDIT ACCOMMODATIONS SHALL BE IN THE AMOUNT
EQUAL TO ONE HUNDRED TWO (102%) PERCENT OF THE AMOUNT OF THE LETTER OF CREDIT
ACCOMMODATIONS PLUS THE AMOUNT OF ANY FEES AND EXPENSES PAYABLE IN CONNECTION
THEREWITH THROUGH THE END OF THE LATEST EXPIRATION DATE OF SUCH LETTER OF CREDIT
ACCOMMODATIONS. SUCH PAYMENTS IN RESPECT OF THE OBLIGATIONS AND CASH COLLATERAL
SHALL BE REMITTED BY WIRE TRANSFER IN FEDERAL FUNDS TO THE AGENT PAYMENT ACCOUNT
OR SUCH OTHER BANK ACCOUNT OF AGENT, AS AGENT MAY, IN ITS DISCRETION, DESIGNATE
IN WRITING TO ADMINISTRATIVE BORROWER FOR SUCH PURPOSE. INTEREST SHALL BE DUE
UNTIL AND INCLUDING THE NEXT BUSINESS DAY, IF THE AMOUNTS SO PAID BY BORROWERS
TO THE AGENT PAYMENT ACCOUNT OR OTHER BANK ACCOUNT DESIGNATED BY AGENT ARE
RECEIVED IN SUCH BANK ACCOUNT LATER THAN 12:00 NOON, CHICAGO, ILLINOIS TIME.

 

(B)           NO TERMINATION OF THIS AGREEMENT OR THE OTHER FINANCING AGREEMENTS
SHALL RELIEVE OR DISCHARGE ANY BORROWER OR GUARANTOR OF ITS RESPECTIVE DUTIES,
OBLIGATIONS AND COVENANTS UNDER THIS AGREEMENT OR THE OTHER FINANCING AGREEMENTS
UNTIL ALL OBLIGATIONS (OTHER THAN UNASSERTED CONTINGENT INDEMNIFICATION CLAIMS)
HAVE BEEN FULLY AND FINALLY DISCHARGED AND PAID, AND AGENT’S CONTINUING SECURITY
INTEREST IN THE COLLATERAL AND THE RIGHTS AND REMEDIES OF AGENT AND LENDERS
HEREUNDER, UNDER THE OTHER FINANCING AGREEMENTS AND APPLICABLE LAW, SHALL REMAIN
IN EFFECT UNTIL ALL SUCH OBLIGATIONS HAVE BEEN FULLY AND FINALLY DISCHARGED AND
PAID. ACCORDINGLY, EACH BORROWER AND GUARANTOR WAIVES ANY RIGHTS IT MAY HAVE
UNDER THE UCC TO DEMAND THE FILING OF TERMINATION STATEMENTS WITH RESPECT TO THE
COLLATERAL AND AGENT SHALL NOT BE REQUIRED TO SEND SUCH TERMINATION STATEMENTS
TO BORROWERS OR GUARANTORS, OR TO FILE THEM WITH ANY FILING OFFICE, UNLESS AND
UNTIL THIS AGREEMENT SHALL HAVE BEEN TERMINATED IN ACCORDANCE WITH ITS TERMS AND
ALL OBLIGATIONS PAID AND SATISFIED IN FULL IN IMMEDIATELY AVAILABLE FUNDS.

 

13.2  Interactive Provisions.

 

(A)           ALL TERMS USED HEREIN WHICH ARE DEFINED IN ARTICLE 1, ARTICLE 8 OR
ARTICLE 9 OF THE UCC SHALL HAVE THE MEANINGS GIVEN THEREIN UNLESS OTHERWISE
DEFINED IN THIS AGREEMENT.

 

(B)           ALL REFERENCES TO THE PLURAL HEREIN SHALL ALSO MEAN THE SINGULAR
AND TO THE SINGULAR SHALL ALSO MEAN THE PLURAL UNLESS THE CONTEXT OTHERWISE
REQUIRES.

 

117

--------------------------------------------------------------------------------

 

(C)           ALL REFERENCES TO ANY BORROWER, GUARANTOR, AGENT AND LENDERS
PURSUANT TO THE DEFINITIONS SET FORTH IN THE RECITALS HERETO, OR TO ANY OTHER
PERSON HEREIN, SHALL INCLUDE THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.

 

(D)           THE WORDS “HEREOF”, “HEREIN”, “HEREUNDER”, “THIS AGREEMENT” AND
WORDS OF SIMILAR IMPORT WHEN USED IN THIS AGREEMENT SHALL REFER TO THIS
AGREEMENT AS A WHOLE AND NOT ANY PARTICULAR PROVISION OF THIS AGREEMENT AND AS
THIS AGREEMENT NOW EXISTS OR MAY HEREAFTER BE AMENDED, MODIFIED, SUPPLEMENTED,
EXTENDED, RENEWED, RESTATED OR REPLACED.

 

(E)           THE WORD “INCLUDING” WHEN USED IN THIS AGREEMENT SHALL MEAN
“INCLUDING, WITHOUT LIMITATION” AND THE WORD “WILL” WHEN USED IN THIS AGREEMENT
SHALL BE CONSTRUED TO HAVE THE SAME MEANING AND EFFECT AS THE WORD “SHALL”.

 

(F)            AN EVENT OF DEFAULT SHALL CONTINUE OR BE CONTINUING UNTIL SUCH
EVENT OF DEFAULT IS WAIVED IN ACCORDANCE WITH SECTION 11.3 OR IS CURED IN A
MANNER SATISFACTORY TO AGENT, IF SUCH EVENT OF DEFAULT IS CAPABLE OF BEING CURED
AS DETERMINED BY AGENT.

 

(G)           ALL REFERENCES TO THE TERM “GOOD FAITH” USED HEREIN WHEN
APPLICABLE TO AGENT OR ANY LENDER SHALL MEAN, NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED HEREIN OR IN THE UCC, HONESTY IN FACT IN THE CONDUCT OR
TRANSACTION CONCERNED. BORROWERS AND GUARANTORS SHALL HAVE THE BURDEN OF PROVING
ANY LACK OF GOOD FAITH ON THE PART OF AGENT OR ANY LENDER ALLEGED BY ANY
BORROWER OR GUARANTOR AT ANY TIME.

 

(H)           ANY ACCOUNTING TERM USED IN THIS AGREEMENT SHALL HAVE, UNLESS
OTHERWISE SPECIFICALLY PROVIDED HEREIN, THE MEANING CUSTOMARILY GIVEN IN
ACCORDANCE WITH GAAP, AND ALL FINANCIAL COMPUTATIONS HEREUNDER SHALL BE COMPUTED
UNLESS OTHERWISE SPECIFICALLY PROVIDED HEREIN, IN ACCORDANCE WITH GAAP AS
CONSISTENTLY APPLIED AND USING THE SAME METHOD FOR INVENTORY VALUATION AS USED
IN THE PREPARATION OF THE FINANCIAL STATEMENTS OF PARENT MOST RECENTLY RECEIVED
BY AGENT PRIOR TO THE DATE HEREOF. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN GAAP OR ANY INTERPRETATIONS OR OTHER PRONOUNCEMENTS BY THE
FINANCIAL ACCOUNTING STANDARDS BOARD OR OTHERWISE, THE TERM “UNQUALIFIED
OPINION” AS USED HEREIN TO REFER TO OPINIONS OR REPORTS PROVIDED BY ACCOUNTANTS
SHALL MEAN AN OPINION OR REPORT THAT IS NOT ONLY UNQUALIFIED BUT ALSO DOES NOT
INCLUDE ANY EXPLANATION, SUPPLEMENTAL COMMENT OR OTHER COMMENT CONCERNING THE
ABILITY OF THE APPLICABLE PERSON TO CONTINUE AS A GOING CONCERN OR THE SCOPE OF
THE AUDIT.

 

(I)            IN THE COMPUTATION OF PERIODS OF TIME FROM A SPECIFIED DATE TO A
LATER SPECIFIED DATE, THE WORD “FROM” MEANS “FROM AND INCLUDING”, THE WORDS “TO”
AND “UNTIL” EACH MEAN “TO BUT EXCLUDING” AND THE WORD “THROUGH” MEANS “TO AND
INCLUDING”.

 

(J)            UNLESS OTHERWISE EXPRESSLY PROVIDED HEREIN, (I) REFERENCES HEREIN
TO ANY AGREEMENT, DOCUMENT OR INSTRUMENT SHALL BE DEEMED TO INCLUDE ALL
SUBSEQUENT AMENDMENTS, MODIFICATIONS, SUPPLEMENTS, EXTENSIONS, RENEWALS,
RESTATEMENTS OR REPLACEMENTS WITH RESPECT THERETO, BUT ONLY TO THE EXTENT THE
SAME ARE NOT PROHIBITED BY THE TERMS HEREOF OR OF ANY OTHER FINANCING AGREEMENT,
AND (II) REFERENCES TO ANY STATUTE OR REGULATION ARE TO BE CONSTRUED AS
INCLUDING ALL STATUTORY AND REGULATORY PROVISIONS CONSOLIDATING, AMENDING,
REPLACING, RECODIFYING, SUPPLEMENTING OR INTERPRETING THE STATUTE OR REGULATION.

 

(K)           THE CAPTIONS AND HEADINGS OF THIS AGREEMENT ARE FOR CONVENIENCE OF
REFERENCE ONLY AND SHALL NOT AFFECT THE INTERPRETATION OF THIS AGREEMENT.

 

118

--------------------------------------------------------------------------------

 

(L)            THIS AGREEMENT AND OTHER FINANCING AGREEMENTS MAY USE SEVERAL
DIFFERENT LIMITATIONS, TESTS OR MEASUREMENTS TO REGULATE THE SAME OR SIMILAR
MATTERS. ALL SUCH LIMITATIONS, TESTS AND MEASUREMENTS ARE CUMULATIVE AND SHALL
EACH BE PERFORMED IN ACCORDANCE WITH THEIR TERMS.

 

(M)          THIS AGREEMENT AND THE OTHER FINANCING AGREEMENTS ARE THE RESULT OF
NEGOTIATIONS AMONG AND HAVE BEEN REVIEWED BY COUNSEL TO AGENT AND THE OTHER
PARTIES, AND ARE THE PRODUCTS OF ALL PARTIES. ACCORDINGLY, THIS AGREEMENT AND
THE OTHER FINANCING AGREEMENTS SHALL NOT BE CONSTRUED AGAINST AGENT OR LENDERS
MERELY BECAUSE OF AGENT’S OR ANY LENDER’S INVOLVEMENT IN THEIR PREPARATION.

 

13.3  Notices. All notices, requests and demands hereunder shall be in writing
and deemed to have been given or made:  if delivered in person, immediately upon
delivery; if by telex, telegram or facsimile transmission, immediately upon
sending and upon confirmation of receipt; if by nationally recognized overnight
courier service with instructions to deliver the next Business Day, one (1)
Business Day after sending; and if by certified mail, return receipt requested,
five (5) days after mailing. All notices, requests and demands upon the parties
are to be given to the following addresses (or to such other address as any
party may designate by notice in accordance with this Section):

 

If to any Borrower or Guarantor:

 

TravelCenters of America LLC

 

 

24601 Center Ridge Road, Suite 200

 

 

Westlake, Ohio, 44145-5639

 

 

Attention: John R. Hoadley

 

 

Telephone No.: (440) 617-1116

 

 

Telecopy No.: (440) 808-3301

 

 

 

with a copy to:

 

TravelCenters of America LLC

 

 

400 Centre Street

 

 

Newton, Massachusetts 02458

 

 

Attention: Mark R. Young, Esq.

 

 

Telephone No.: (617) 796-8157

 

 

Telecopy No.: (617) 969-4697

 

 

 

If to Agent:

 

Wachovia Capital Finance Corporation

 

 

(Central)

 

 

150 South Wacker Drive

 

 

Chicago, Illinois 60606-4202

 

 

Attention: Portfolio Manager

 

 

Telephone No.: (312) 332-0420

 

 

Telecopy No.: (312) 332-0424

 

13.4  Partial Invalidity. If any provision of this Agreement is held to be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.

 

13.5  Confidentiality.

 

119

--------------------------------------------------------------------------------

 

(A)           AGENT AND EACH LENDER SHALL USE ALL REASONABLE EFFORTS TO KEEP
CONFIDENTIAL, IN ACCORDANCE WITH ITS CUSTOMARY PROCEDURES FOR HANDLING
CONFIDENTIAL INFORMATION AND SAFE AND SOUND LENDING PRACTICES, ANY NON-PUBLIC
INFORMATION SUPPLIED TO IT BY ANY BORROWER PURSUANT TO THIS AGREEMENT WHICH IS
CLEARLY AND CONSPICUOUSLY MARKED AS CONFIDENTIAL AT THE TIME SUCH INFORMATION IS
FURNISHED BY SUCH BORROWER TO AGENT OR SUCH LENDER, PROVIDED, THAT, NOTHING
CONTAINED HEREIN SHALL LIMIT THE DISCLOSURE OF ANY SUCH INFORMATION: (I) TO THE
EXTENT REQUIRED BY STATUTE, RULE, REGULATION, SUBPOENA OR COURT ORDER, (II) TO
THE EXTENT REQUESTED BY ANY BANK EXAMINERS AND OTHER REGULATORS (INCLUDING ANY
SELF-REGULATORY AUTHORITY SUCH AS THE NATIONAL ASSOCIATION OF INSURANCE
COMMISSIONERS), AUDITORS AND/OR ACCOUNTANTS, (III) IN CONNECTION WITH ANY
LITIGATION TO WHICH AGENT OR SUCH LENDER IS A PARTY, (IV) TO ANY LENDER OR
PARTICIPANT (OR PROSPECTIVE LENDER OR PARTICIPANT) OR TO ANY AFFILIATE OF ANY
LENDER SO LONG AS SUCH LENDER OR PARTICIPANT (OR PROSPECTIVE LENDER OR
PARTICIPANT) OR AFFILIATE SHALL AGREED TO TREAT SUCH INFORMATION AS CONFIDENTIAL
IN ACCORDANCE WITH THIS SECTION 13.5, OR (V) TO COUNSEL FOR AGENT OR ANY LENDER
OR PARTICIPANT (OR PROSPECTIVE LENDER OR PARTICIPANT).

 

(B)           IN THE EVENT THAT AGENT OR ANY LENDER RECEIVES A REQUEST OR DEMAND
TO DISCLOSE ANY CONFIDENTIAL INFORMATION PURSUANT TO ANY SUBPOENA OR COURT
ORDER, AGENT OR SUCH LENDER, AS THE CASE MAY BE, AGREES (I) TO THE EXTENT
PERMITTED BY APPLICABLE LAW OR IF PERMITTED BY APPLICABLE LAW, TO THE EXTENT
AGENT OR SUCH LENDER DETERMINES IN GOOD FAITH THAT IT WILL NOT CREATE ANY RISK
OF LIABILITY TO AGENT OR SUCH LENDER, AGENT OR SUCH LENDER WILL PROMPTLY NOTIFY
ADMINISTRATIVE BORROWER OF SUCH REQUEST SO THAT ADMINISTRATIVE BORROWER MAY SEEK
A PROTECTIVE ORDER OR OTHER APPROPRIATE RELIEF OR REMEDY AND (II) IF DISCLOSURE
OF SUCH INFORMATION IS REQUIRED, DISCLOSE SUCH INFORMATION AND, SUBJECT TO
REIMBURSEMENT BY BORROWERS OF AGENT’S OR SUCH LENDER’S EXPENSES, COOPERATE WITH
ADMINISTRATIVE BORROWER IN THE REASONABLE EFFORTS TO OBTAIN AN ORDER OR OTHER
RELIABLE ASSURANCE THAT CONFIDENTIAL TREATMENT WILL BE ACCORDED TO SUCH PORTION
OF THE DISCLOSED INFORMATION WHICH ADMINISTRATIVE BORROWER SO DESIGNATES, TO THE
EXTENT PERMITTED BY APPLICABLE LAW OR IF PERMITTED BY APPLICABLE LAW, TO THE
EXTENT AGENT OR SUCH LENDER DETERMINES IN GOOD FAITH THAT IT WILL NOT CREATE ANY
RISK OF LIABILITY TO AGENT OR SUCH LENDER.

 

(C)           IN NO EVENT SHALL THIS SECTION 13.5 OR ANY OTHER PROVISION OF THIS
AGREEMENT, ANY OF THE OTHER FINANCING AGREEMENTS OR APPLICABLE LAW BE DEEMED:
(I) TO APPLY TO OR RESTRICT DISCLOSURE OF INFORMATION THAT HAS BEEN OR IS MADE
PUBLIC BY ANY BORROWER, GUARANTOR OR ANY THIRD PARTY OR OTHERWISE BECOMES
GENERALLY AVAILABLE TO THE PUBLIC OTHER THAN AS A RESULT OF A DISCLOSURE IN
VIOLATION HEREOF, (II) TO APPLY TO OR RESTRICT DISCLOSURE OF INFORMATION THAT
WAS OR BECOMES AVAILABLE TO AGENT OR ANY LENDER (OR ANY AFFILIATE OF ANY LENDER)
ON A NON-CONFIDENTIAL BASIS FROM A PERSON OTHER THAN A BORROWER OR GUARANTOR,
(III) TO REQUIRE AGENT OR ANY LENDER TO RETURN ANY MATERIALS FURNISHED BY A
BORROWER OR GUARANTOR TO AGENT OR A LENDER OR  PREVENT AGENT OR A LENDER FROM
RESPONDING TO ROUTINE INFORMATIONAL REQUESTS  IN ACCORDANCE WITH THE CODE OF
ETHICS FOR THE EXCHANGE OF CREDIT INFORMATION PROMULGATED BY THE ROBERT MORRIS
ASSOCIATES OR OTHER APPLICABLE INDUSTRY STANDARDS RELATING TO THE EXCHANGE OF
CREDIT INFORMATION. THE OBLIGATIONS OF AGENT AND LENDERS UNDER THIS SECTION 13.5
SHALL SUPERSEDE AND REPLACE THE OBLIGATIONS OF AGENT AND LENDERS UNDER ANY
CONFIDENTIALITY LETTER SIGNED PRIOR TO THE DATE HEREOF.

 

(D)           NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREIN OR IN
ANY OF THE OTHER FINANCING AGREEMENTS OR ANY OTHER WRITTEN OR ORAL UNDERSTANDING
OR AGREEMENT,  ANY OBLIGATIONS OF CONFIDENTIALITY CONTAINED HEREIN, IN ANY OF
THE OTHER FINANCING AGREEMENTS OR ANY SUCH OTHER UNDERSTANDING OR AGREEMENT DO
NOT APPLY AND HAVE NOT APPLIED FROM THE COMMENCEMENT OF DISCUSSIONS BETWEEN THE
PARTIES TO THE TAX TREATMENT AND TAX STRUCTURE OF THE

 

120

--------------------------------------------------------------------------------

 

TRANSACTIONS CONTEMPLATED HEREIN (AND ANY RELATED TRANSACTIONS OR ARRANGEMENTS),
AND  EACH PARTY (AND EACH OF ITS EMPLOYEES, REPRESENTATIVES, OR OTHER AGENTS)
MAY DISCLOSE TO ANY AND ALL PERSONS THE TAX TREATMENT AND TAX STRUCTURING OF THE
TRANSACTIONS CONTEMPLATED HEREIN AND ALL MATERIALS OF ANY KIND (INCLUDING
OPINIONS OR OTHER TAX ANALYSES) THAT ARE PROVIDED TO SUCH PARTY RELATING TO SUCH
TAX TREATMENT AND TAX STRUCTURE, ALL WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.6011-4; PROVIDED, THAT, EACH PARTY RECOGNIZES THAT THE PRIVILEGE THAT
IT MAY, IN ITS DISCRETION, MAINTAIN WITH RESPECT TO THE CONFIDENTIALITY OF A
COMMUNICATION RELATING TO THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING A
CONFIDENTIAL COMMUNICATION WITH ITS ATTORNEY OR A CONFIDENTIAL COMMUNICATION
WITH A FEDERALLY AUTHORIZED TAX PRACTITIONER UNDER SECTION 7525 OF THE INTERNAL
REVENUE CODE, IS NOT INTENDED TO BE AFFECTED BY THE FOREGOING. BORROWERS AND
GUARANTORS DO NOT INTEND TO TREAT THE LOANS AND RELATED TRANSACTIONS AS BEING A
“REPORTABLE TRANSACTION” (WITHIN THE MEANING OF TREASURY REGULATION SECTION
1.6011-4). IN THE EVENT BORROWERS OR GUARANTORS DETERMINE TO TAKE ANY ACTION
INCONSISTENT WITH SUCH INTENTION, IT WILL PROMPTLY NOTIFY AGENT THEREOF. EACH
BORROWER AND GUARANTOR ACKNOWLEDGES THAT ONE OR MORE OF LENDERS MAY TREAT ITS
LOANS AS PART OF A TRANSACTION THAT IS SUBJECT TO TREASURY REGULATION SECTION
1.6011-4 OR SECTION 301.6112-1, AND THE AGENT AND SUCH LENDER OR LENDERS, AS
APPLICABLE, MAY FILE SUCH IRS FORMS OR MAINTAIN SUCH LISTS AND OTHER RECORDS AS
THEY MAY DETERMINE IS REQUIRED BY SUCH TREASURY REGULATIONS.

 

13.6  Successors. This Agreement, the other Financing Agreements and any other
document referred to herein or therein shall be binding upon and inure to the
benefit of and be enforceable by Agent, Lenders, Borrowers, Guarantors and their
respective successors and assigns, except that Borrower may not assign its
rights under this Agreement, the other Financing Agreements and any other
document referred to herein or therein without the prior written consent of
Agent and Lenders. Any such purported assignment without such express prior
written consent shall be void. No Lender may assign its rights and obligations
under this Agreement without the prior written consent of Agent, except as
provided in Section 13.7 below. The terms and provisions of this Agreement and
the other Financing Agreements are for the purpose of defining the relative
rights and obligations of Borrowers, Guarantors, Agent and Lenders with respect
to the transactions contemplated hereby and there shall be no third party
beneficiaries of any of the terms and provisions of this Agreement or any of the
other Financing Agreements.

 

13.7  Assignments; Participations.

 

(a)           Each Lender may, with the prior written consent of Agent (which
consent shall not be unreasonably withheld or delayed), assign all or, if less
than all, a portion equal to at least $10,000,000 (or such lesser amount as
Agent may agree) in the aggregate for the assigning Lender, of such rights and
obligations under this Agreement to one or more Eligible Transferees (but not
including for this purpose any assignments in the form of a participation), each
of which assignees shall become a party to this Agreement as a Lender by
execution of an Assignment and Acceptance; provided, that, (i) such transfer or
assignment will not be effective until recorded by Agent on the Register and
(ii) Agent shall have received for its sole account payment of a processing fee
from the assigning Lender or the assignee in the amount of $5,000.

 

(B)           AGENT SHALL MAINTAIN A REGISTER OF THE NAMES AND ADDRESSES OF
LENDERS, THEIR COMMITMENTS AND THE PRINCIPAL AMOUNT OF THEIR LOANS (THE
“REGISTER”). AGENT SHALL ALSO MAINTAIN A COPY OF EACH ASSIGNMENT AND ACCEPTANCE
DELIVERED TO AND ACCEPTED BY IT AND SHALL MODIFY THE REGISTER TO GIVE EFFECT TO
EACH ASSIGNMENT AND ACCEPTANCE. THE ENTRIES IN THE

 

121

--------------------------------------------------------------------------------

 

REGISTER SHALL BE CONCLUSIVE AND BINDING FOR ALL PURPOSES, ABSENT MANIFEST
ERROR, AND ANY BORROWERS, OBLIGORS, AGENT AND 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 ADMINISTRATIVE
BORROWER AND ANY LENDER AT ANY REASONABLE TIME AND FROM TIME TO TIME UPON
REASONABLE PRIOR NOTICE.

 

(C)           UPON SUCH EXECUTION, DELIVERY, ACCEPTANCE AND RECORDING, FROM AND
AFTER THE EFFECTIVE DATE SPECIFIED IN EACH ASSIGNMENT AND ACCEPTANCE,  THE
ASSIGNEE THEREUNDER SHALL BE A PARTY HERETO AND TO THE OTHER FINANCING
AGREEMENTS 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 (INCLUDING, WITHOUT LIMITATION, THE OBLIGATION TO PARTICIPATE IN
LETTER OF CREDIT ACCOMMODATIONS) OF A LENDER HEREUNDER AND THEREUNDER AND  THE
ASSIGNING LENDER 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.

 

(D)           BY EXECUTION AND DELIVERY OF AN ASSIGNMENT AND ACCEPTANCE, THE
ASSIGNOR AND ASSIGNEE THEREUNDER CONFIRM TO AND AGREE WITH EACH OTHER AND THE
OTHER PARTIES HERETO AS FOLLOWS:  (I) OTHER THAN AS PROVIDED IN SUCH ASSIGNMENT
AND ACCEPTANCE, THE ASSIGNING LENDER MAKES NO REPRESENTATION OR WARRANTY AND
ASSUMES NO RESPONSIBILITY WITH RESPECT TO ANY STATEMENTS, WARRANTIES OR
REPRESENTATIONS MADE IN OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER
FINANCING AGREEMENTS OR THE EXECUTION, LEGALITY, ENFORCEABILITY, GENUINENESS,
SUFFICIENCY OR VALUE OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS
FURNISHED PURSUANT HERETO, (II) THE ASSIGNING LENDER MAKES NO REPRESENTATION OR
WARRANTY AND ASSUMES NO RESPONSIBILITY WITH RESPECT TO THE FINANCIAL CONDITION
OF ANY BORROWER, OBLIGOR OR ANY OF THEIR SUBSIDIARIES OR THE PERFORMANCE OR
OBSERVANCE BY ANY BORROWER OR OBLIGOR OF ANY OF THE OBLIGATIONS; (III) SUCH
ASSIGNEE CONFIRMS THAT IT HAS RECEIVED A COPY OF THIS AGREEMENT AND THE OTHER
FINANCING AGREEMENTS, TOGETHER WITH SUCH OTHER DOCUMENTS AND INFORMATION IT HAS
DEEMED APPROPRIATE TO MAKE ITS OWN CREDIT ANALYSIS AND DECISION TO ENTER INTO
SUCH ASSIGNMENT AND ACCEPTANCE, (IV) SUCH ASSIGNEE WILL, INDEPENDENTLY AND
WITHOUT RELIANCE UPON THE ASSIGNING LENDER, AGENT AND BASED ON SUCH DOCUMENTS
AND INFORMATION AS IT SHALL DEEM APPROPRIATE AT THE TIME, CONTINUE TO MAKE ITS
OWN CREDIT DECISIONS IN TAKING OR NOT TAKING ACTION UNDER THIS AGREEMENT AND THE
OTHER FINANCING AGREEMENTS, (V) SUCH ASSIGNEE APPOINTS AND AUTHORIZES AGENT TO
TAKE SUCH ACTION AS AGENT ON ITS BEHALF AND TO EXERCISE SUCH POWERS UNDER THIS
AGREEMENT AND THE OTHER FINANCING AGREEMENTS AS ARE DELEGATED TO AGENT BY THE
TERMS HEREOF AND THEREOF, TOGETHER WITH SUCH POWERS AS ARE REASONABLY INCIDENTAL
THERETO, AND (VI) SUCH ASSIGNEE AGREES THAT IT WILL PERFORM IN ACCORDANCE WITH
THEIR TERMS ALL OF THE OBLIGATIONS WHICH BY THE TERMS OF THIS AGREEMENT AND THE
OTHER FINANCING AGREEMENTS ARE REQUIRED TO BE PERFORMED BY IT AS A LENDER. AGENT
AND LENDERS MAY FURNISH ANY INFORMATION CONCERNING ANY BORROWER OR OBLIGOR IN
THE POSSESSION OF AGENT OR ANY LENDER FROM TIME TO TIME TO ASSIGNEES AND
PARTICIPANTS.

 

(E)           EACH LENDER MAY SELL PARTICIPATIONS TO ONE OR MORE BANKS OR OTHER
ENTITIES IN OR TO ALL OR A PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER FINANCING AGREEMENTS (INCLUDING, WITHOUT LIMITATION, ALL
OR A PORTION OF ITS COMMITMENTS AND THE LOANS OWING TO IT AND ITS PARTICIPATION
IN THE LETTER OF CREDIT ACCOMMODATIONS, WITHOUT THE CONSENT OF AGENT OR THE
OTHER LENDERS); PROVIDED, THAT, (I) SUCH LENDER’S OBLIGATIONS UNDER THIS
AGREEMENT (INCLUDING, WITHOUT LIMITATION, ITS COMMITMENT HEREUNDER) AND THE
OTHER FINANCING AGREEMENTS

 

122

--------------------------------------------------------------------------------

 

SHALL REMAIN UNCHANGED, (II) SUCH LENDER SHALL REMAIN SOLELY RESPONSIBLE TO THE
OTHER PARTIES HERETO FOR THE PERFORMANCE OF SUCH OBLIGATIONS, AND BORROWERS,
GUARANTORS, THE OTHER LENDERS AND AGENT SHALL CONTINUE TO DEAL SOLELY AND
DIRECTLY WITH SUCH LENDER IN CONNECTION WITH SUCH LENDER’S RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER FINANCING AGREEMENTS, AND
(III) THE PARTICIPANT SHALL NOT HAVE ANY RIGHTS UNDER THIS AGREEMENT OR ANY OF
THE OTHER FINANCING AGREEMENTS (THE PARTICIPANT’S RIGHTS AGAINST SUCH LENDER IN
RESPECT OF SUCH PARTICIPATION TO BE THOSE SET FORTH IN THE AGREEMENT EXECUTED BY
SUCH LENDER IN FAVOR OF THE PARTICIPANT RELATING THERETO) AND ALL AMOUNTS
PAYABLE BY ANY BORROWER OR OBLIGOR HEREUNDER SHALL BE DETERMINED AS IF SUCH
LENDER HAD NOT SOLD SUCH PARTICIPATION.

 

(F)            NOTHING IN THIS AGREEMENT SHALL PREVENT OR PROHIBIT ANY LENDER
FROM PLEDGING ITS LOANS HEREUNDER TO A FEDERAL RESERVE BANK IN SUPPORT OF
BORROWINGS MADE BY SUCH LENDERS FROM SUCH FEDERAL RESERVE BANK; PROVIDED, THAT,
NO SUCH PLEDGE SHALL RELEASE SUCH LENDER FROM ANY OF ITS OBLIGATIONS HEREUNDER
OR SUBSTITUTE ANY SUCH PLEDGEE FOR SUCH LENDER AS A PARTY HERETO.

 

(G)           BORROWERS AND GUARANTORS SHALL ASSIST AGENT OR ANY LENDER
PERMITTED TO SELL ASSIGNMENTS OR PARTICIPATIONS UNDER THIS SECTION 13.7 IN
WHATEVER MANNER REASONABLY NECESSARY IN ORDER TO ENABLE OR EFFECT ANY SUCH
ASSIGNMENT OR PARTICIPATION, INCLUDING (BUT NOT LIMITED TO) THE EXECUTION AND
DELIVERY OF ANY AND ALL AGREEMENTS, NOTES AND OTHER DOCUMENTS AND INSTRUMENTS AS
SHALL BE REQUESTED AND THE DELIVERY OF INFORMATIONAL MATERIALS, APPRAISALS OR
OTHER DOCUMENTS FOR, AND THE PARTICIPATION OF RELEVANT MANAGEMENT IN MEETINGS
AND CONFERENCE CALLS WITH, POTENTIAL LENDERS OR PARTICIPANTS. BORROWERS SHALL
CERTIFY THE CORRECTNESS, COMPLETENESS AND ACCURACY, IN ALL MATERIAL RESPECTS, OF
ALL DESCRIPTIONS OF BORROWERS AND GUARANTORS AND THEIR AFFAIRS PROVIDED,
PREPARED OR REVIEWED BY ANY BORROWER OR GUARANTOR THAT ARE CONTAINED IN ANY
SELLING MATERIALS AND ALL OTHER INFORMATION PROVIDED BY IT AND INCLUDED IN SUCH
MATERIALS.

 

13.8  USA Patriot Act. Each Lender hereby notifies Borrowers and Guarantors that
pursuant to the requirements of the USA Patriot Act, it is required to obtain,
verify and record information that Identifies each Borrower and Guarantor, which
information includes the name and address of such Borrower and Guarantor and
other information that will allow such Lender to identify such Borrower and
Guarantor in accordance with the requirements of such Act and any other
applicable law.

 

13.9  Entire Agreement. This Agreement, the other Financing Agreements, any
supplements hereto or thereto, and any instruments or documents delivered or to
be delivered in connection herewith or therewith represents the entire agreement
and understanding concerning the subject matter hereof and thereof between the
parties hereto, and supersede all other prior agreements, understandings,
negotiations and discussions, representations, warranties, commitments,
proposals, offers and contracts concerning the subject matter hereof, whether
oral or written. In the event of any inconsistency between the terms of this
Agreement and any schedule or exhibit hereto, the terms of this Agreement shall
govern.

 

13.10      Counterparts, Etc. This Agreement or any of the other Financing
Agreements may be executed in any number of counterparts, each of which shall be
an original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Agreement or any of the
other Financing Agreements by telefacsimile shall have the same force and effect
as the delivery of an original executed counterpart of this Agreement or any of
such other Financing Agreements. Any party delivering an executed counterpart of
any such

 

123

--------------------------------------------------------------------------------

 

agreement by telefacsimile shall also deliver an original executed counterpart,
but the failure to do so shall not affect the validity, enforceability or
binding effect of such agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

124

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, Agent, Lenders, Borrowers and Guarantors have caused these
presents to be duly executed as of the day and year first above written.

 

BORROWERS

 

 

 

TRAVELCENTERS OF AMERICA LLC

 

 

 

By:

 /s/ John R. Hoadley

 

 

Title: Treasurer

 

 

 

TA LEASING LLC

 

 

 

By:

 /s/ John R. Hoadley

 

 

Title: Treasurer

 

 

 

TA OPERATING LLC

 

 

 

By:

 /s/ John R. Hoadley

 

 

Title: Treasurer

 

 

 

 

 

GUARANTORS

 

 

 

TRAVELCENTERS OF AMERICA HOLDING
COMPANY LLC

 

 

 

By:

 /s/ John R. Hoadley

 

 

Title: Treasurer

 

 

 

PETRO STOPPING CENTERS, L.P.

 

 

 

By: TCA PSC GP LLC, its

 

General Partner

 

 

 

By:

 /s/ John R. Hoadley

 

 

Title: Treasurer

 

 

 

PETRO DISTRIBUTING INC.

 

 

 

By:

 /s/ John R. Hoadley

 

 

Title: Treasurer

 

[SIGNATURES CONTINUE ON NEXT PAGE]

 

--------------------------------------------------------------------------------

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

PETRO FINANCIAL CORPORATION

 

 

 

By:

 /s/ John R. Hoadley

 

 

Title: Treasurer

 

 

 

PETRO HOLDINGS FINANCIAL
CORPORATION

 

 

 

By:

 /s/ John R. Hoadley

 

 

Title: Treasurer

 

 

 

TCA PSC GP LLC

 

 

 

By:

 /s/ John R. Hoadley

 

 

Title: Treasurer

 

AGENT

 

WACHOVIA CAPITAL FINANCE

 

CORPORATION (CENTRAL),

 

as Agent

 

 

 

By:

 /s/ Laura D. Wheeland

 

 

 

 

Title:

Vice President

 

 

 

 

 

 

LENDERS

 

 

 

WACHOVIA CAPITAL FINANCE CORPORATION

 

(CENTRAL)

 

 

 

By:

 /s/ Laura D. Wheeland

 

 

 

 

Title:

Vice President

 

 

 

--------------------------------------------------------------------------------

 

NATIONAL CITY BUSINESS CREDIT, INC.

 

 

By:

 /s/ Kathryn C. Ellero

 

 

Title:

Vice President

 

 

BANK OF AMERICA, N.A.

 

 

By:

/s/ Michael W. Brunner

 

 

Title:

Vice President

 

 

 

U.S. BANK NATIONAL ASSOCIATION

 

 

By:

/s/ Matthew P. Kasper

 

 

Title:

Assistant Vice President

 

 

 

UBS LOAN FINANCE LLC

 

 

By:

 /s/ Irja R. Olsa

 

/s/ Mary E. Evans

 

 

Title:

Associate Director,

 

Associate Director,

 

 

Banking Products Services, U.S.

Banking Products Services, U.S.

 

 

ROYAL BANK OF CANADA

 

 

By:

/s/ Dustin Craven

 

 

Title:

Attorney-in-fact

 

 

--------------------------------------------------------------------------------

 

EXHIBIT A
TO
LOAN AND SECURITY AGREEMENT

 

ASSIGNMENT AND ACCEPTANCE AGREEMENT

 

This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this “Assignment and Acceptance”)
dated as of                     , 200  is made between
                                 (the “Assignor”) and
                                 (the “Assignee”).

 

WITNESSETH:

 

WHEREAS, Wachovia Capital Finance Corporation (Central), in its capacity as
agent pursuant to the Loan Agreement (as hereinafter defined) acting for and on
behalf of the financial institutions which are parties thereto as lenders (in
such capacity, “Agent”), and the financial institutions which are parties to the
Loan Agreement as lenders (individually, each a “Lender” and collectively,
“Lenders”) have entered or are about to enter into financing arrangements
pursuant to which Agent and Lenders may make loans and advances and provide
other financial accommodations to TravelCenters of America LLC, TA Leasing LLC
and TA Operating LLC (collectively, “Borrowers”) as set forth in the Loan and
Security Agreement, dated November     , 2007, by and among Borrowers, certain
of their affiliates, Agent and Lenders (as the same now exists or may hereafter
be amended, modified, supplemented, extended, renewed, restated or replaced, the
“Loan Agreement”), and the other agreements, documents and instruments referred
to therein or at any time executed and/or delivered in connection therewith or
related thereto (all of the foregoing, together with the Loan Agreement, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced, being collectively referred to herein as the
“Financing Agreements”);

 

WHEREAS, as provided under the Loan Agreement, Assignor committed to making
Loans (the “Committed Loans”) to Borrowers in an aggregate amount not to exceed 
(the “Commitment”);

 

WHEREAS, Assignor wishes to assign to Assignee [part of the] [all] rights and
obligations of Assignor under the Loan Agreement in respect of its Commitment in
an amount equal to $               (the “Assigned Commitment Amount”) on the
terms and subject to the conditions set forth herein and Assignee wishes to
accept assignment of such rights and to assume such obligations from Assignor on
such terms and subject to such conditions;

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:

 

1.  ASSIGNMENT AND ACCEPTANCE.

 

(A)  SUBJECT TO THE TERMS AND CONDITIONS OF THIS ASSIGNMENT AND ACCEPTANCE,
ASSIGNOR HEREBY SELLS, TRANSFERS AND ASSIGNS TO ASSIGNEE, AND ASSIGNEE HEREBY
PURCHASES, ASSUMES AND UNDERTAKES FROM ASSIGNOR, WITHOUT RECOURSE AND WITHOUT
REPRESENTATION OR WARRANTY (EXCEPT AS PROVIDED IN THIS ASSIGNMENT AND
ACCEPTANCE) AN INTEREST IN (I) THE COMMITMENT AND EACH OF THE COMMITTED LOANS OF
ASSIGNOR AND (II) ALL RELATED RIGHTS, BENEFITS, OBLIGATIONS, LIABILITIES AND
INDEMNITIES OF THE ASSIGNOR UNDER AND IN CONNECTION WITH THE LOAN AGREEMENT AND
THE OTHER FINANCING AGREEMENTS, SO THAT AFTER GIVING EFFECT THERETO, THE
COMMITMENT OF ASSIGNEE SHALL BE AS SET FORTH BELOW AND THE PRO RATA SHARE OF
ASSIGNEE SHALL BE                    (      %) PERCENT.

 

A-1

--------------------------------------------------------------------------------

 

(B)  WITH EFFECT ON AND AFTER THE EFFECTIVE DATE (AS DEFINED IN SECTION 5
HEREOF), ASSIGNEE SHALL BE A PARTY TO THE LOAN AGREEMENT AND SUCCEED TO ALL OF
THE RIGHTS AND BE OBLIGATED TO PERFORM ALL OF THE OBLIGATIONS OF A LENDER UNDER
THE LOAN AGREEMENT, INCLUDING THE REQUIREMENTS CONCERNING CONFIDENTIALITY AND
THE PAYMENT OF INDEMNIFICATION, WITH A COMMITMENT IN AN AMOUNT EQUAL TO THE
ASSIGNED COMMITMENT AMOUNT. ASSIGNEE AGREES THAT IT WILL PERFORM IN ACCORDANCE
WITH THEIR TERMS ALL OF THE OBLIGATIONS WHICH BY THE TERMS OF THE LOAN AGREEMENT
ARE REQUIRED TO BE PERFORMED BY IT AS A LENDER. IT IS THE INTENT OF THE PARTIES
HERETO THAT THE COMMITMENT OF ASSIGNOR SHALL, AS OF THE EFFECTIVE DATE, BE
REDUCED BY AN AMOUNT EQUAL TO THE ASSIGNED COMMITMENT AMOUNT AND ASSIGNOR SHALL
RELINQUISH ITS RIGHTS AND BE RELEASED FROM ITS OBLIGATIONS UNDER THE LOAN
AGREEMENT TO THE EXTENT SUCH OBLIGATIONS HAVE BEEN ASSUMED BY ASSIGNEE;
PROVIDED, THAT, ASSIGNOR SHALL NOT RELINQUISH ITS RIGHTS UNDER SECTIONS 2.2,
6.4, 6.8, 11.5 AND 12.5 OF THE LOAN AGREEMENT TO THE EXTENT SUCH RIGHTS RELATE
TO THE TIME PRIOR TO THE EFFECTIVE DATE.

 

(C)  AFTER GIVING EFFECT TO THE ASSIGNMENT AND ASSUMPTION SET FORTH HEREIN, ON
THE EFFECTIVE DATE ASSIGNEE’S COMMITMENT WILL BE $                  .

 

(D)  AFTER GIVING EFFECT TO THE                    ASSIGNMENT AND ASSUMPTION SET
FORTH HEREIN, ON THE EFFECTIVE DATE ASSIGNOR’S COMMITMENT WILL BE
$                   (AS SUCH AMOUNT MAY BE FURTHER REDUCED BY ANY OTHER
ASSIGNMENTS BY ASSIGNOR ON OR AFTER THE DATE HEREOF).

 

2.  PAYMENTS.

 

(A)  AS CONSIDERATION FOR THE SALE, ASSIGNMENT AND TRANSFER CONTEMPLATED IN
SECTION 1 HEREOF, ASSIGNEE SHALL PAY TO ASSIGNOR ON THE EFFECTIVE DATE IN
IMMEDIATELY AVAILABLE FUNDS AN AMOUNT EQUAL TO $                  , REPRESENTING
ASSIGNEE’S PRO RATA SHARE OF THE PRINCIPAL AMOUNT OF ALL COMMITTED LOANS.

 

(B)  ASSIGNEE SHALL PAY TO AGENT THE PROCESSING FEE IN THE AMOUNT SPECIFIED IN
SECTION 13.7(A) OF THE LOAN AGREEMENT.

 

3.  REALLOCATION OF PAYMENTS. ANY INTEREST, FEES AND OTHER PAYMENTS ACCRUED TO
THE EFFECTIVE DATE WITH RESPECT TO THE COMMITMENT, COMMITTED LOANS AND
OUTSTANDING LETTER OF CREDIT ACCOMMODATIONS SHALL BE FOR THE ACCOUNT OF
ASSIGNOR. ANY INTEREST, FEES AND OTHER PAYMENTS ACCRUED ON AND AFTER THE
EFFECTIVE DATE WITH RESPECT TO THE ASSIGNED COMMITMENT AMOUNT SHALL BE FOR THE
ACCOUNT OF ASSIGNEE. EACH OF ASSIGNOR AND ASSIGNEE AGREES THAT IT WILL HOLD IN
TRUST FOR THE OTHER PARTY ANY INTEREST, FEES AND OTHER AMOUNTS WHICH IT MAY
RECEIVE TO WHICH THE OTHER PARTY IS ENTITLED PURSUANT TO THE PRECEDING SENTENCE
AND PAY TO THE OTHER PARTY ANY SUCH AMOUNTS WHICH IT MAY RECEIVE PROMPTLY UPON
RECEIPT.

 

4.  INDEPENDENT CREDIT DECISION. ASSIGNEE ACKNOWLEDGES THAT IT HAS RECEIVED A
COPY OF THE LOAN AGREEMENT AND THE SCHEDULES AND EXHIBITS THERETO, TOGETHER WITH
COPIES OF THE MOST RECENT FINANCIAL STATEMENTS OF                            AND
ITS SUBSIDIARIES, AND SUCH OTHER DOCUMENTS AND INFORMATION AS IT HAS DEEMED
APPROPRIATE TO MAKE ITS OWN CREDIT AND LEGAL ANALYSIS AND DECISION TO ENTER INTO
THIS ASSIGNMENT AND ACCEPTANCE AND AGREES THAT IT WILL, INDEPENDENTLY AND
WITHOUT RELIANCE UPON ASSIGNOR, AGENT OR ANY LENDER AND BASED ON SUCH DOCUMENTS
AND INFORMATION AS IT SHALL DEEM APPROPRIATE AT THE TIME, CONTINUE TO MAKE ITS
OWN CREDIT AND LEGAL DECISIONS IN TAKING OR NOT TAKING ACTION UNDER THE LOAN
AGREEMENT.

 

5.  EFFECTIVE DATE; NOTICES.

 

(A)  AS BETWEEN ASSIGNOR AND ASSIGNEE, THE EFFECTIVE DATE FOR THIS ASSIGNMENT
AND

 

A-2

--------------------------------------------------------------------------------

 

ACCEPTANCE SHALL BE                   , 200  (THE “EFFECTIVE DATE”); PROVIDED,
THAT, THE FOLLOWING CONDITIONS PRECEDENT HAVE BEEN SATISFIED ON OR BEFORE THE
EFFECTIVE DATE:

 

(I)            THIS ASSIGNMENT AND ACCEPTANCE SHALL BE EXECUTED AND DELIVERED BY
ASSIGNOR AND ASSIGNEE;

 

(II)           THE CONSENT OF AGENT AS REQUIRED FOR AN EFFECTIVE ASSIGNMENT OF
THE ASSIGNED COMMITMENT AMOUNT BY ASSIGNOR TO ASSIGNEE SHALL HAVE BEEN DULY
OBTAINED AND SHALL BE IN FULL FORCE AND EFFECT AS OF THE EFFECTIVE DATE;

 

(III)          WRITTEN NOTICE OF SUCH ASSIGNMENT, TOGETHER WITH PAYMENT
INSTRUCTIONS, ADDRESSES AND RELATED INFORMATION WITH RESPECT TO ASSIGNEE, SHALL
HAVE BEEN GIVEN TO ADMINISTRATIVE BORROWER AND AGENT;

 

(IV)          ASSIGNEE SHALL PAY TO ASSIGNOR ALL AMOUNTS DUE TO ASSIGNOR UNDER
THIS ASSIGNMENT AND ACCEPTANCE; AND

 

(V)           THE PROCESSING FEE REFERRED TO IN SECTION 2(B) HEREOF SHALL HAVE
BEEN PAID TO AGENT.

 

(B)  PROMPTLY FOLLOWING THE EXECUTION OF THIS ASSIGNMENT AND ACCEPTANCE,
ASSIGNOR SHALL DELIVER TO ADMINISTRATIVE BORROWER AND AGENT FOR ACKNOWLEDGMENT
BY AGENT, A NOTICE OF ASSIGNMENT IN THE FORM ATTACHED HERETO AS SCHEDULE 1.

 

6.  [AGENT. [INCLUDE ONLY IF ASSIGNOR IS AN AGENT]

 

(A)  ASSIGNEE HEREBY APPOINTS AND AUTHORIZES ASSIGNOR IN ITS CAPACITY AS AGENT
TO TAKE SUCH ACTION AS AGENT ON ITS BEHALF TO EXERCISE SUCH POWERS UNDER THE
LOAN AGREEMENT AS ARE DELEGATED TO AGENT BY LENDERS PURSUANT TO THE TERMS OF THE
LOAN AGREEMENT.

 

(B)  ASSIGNEE SHALL ASSUME NO DUTIES OR OBLIGATIONS HELD BY ASSIGNOR IN ITS
CAPACITY AS AGENT UNDER THE LOAN AGREEMENT.]

 

7.  WITHHOLDING TAX. ASSIGNEE (A) REPRESENTS AND WARRANTS TO ASSIGNOR, AGENT AND
BORROWERS THAT UNDER APPLICABLE LAW AND TREATIES NO TAX WILL BE REQUIRED TO BE
WITHHELD BY ASSIGNEE, AGENT OR BORROWERS WITH RESPECT TO ANY PAYMENTS TO BE MADE
TO ASSIGNEE HEREUNDER OR UNDER ANY OF THE FINANCING AGREEMENTS, (B) AGREES TO
FURNISH TO AGENT AND BORROWERS PRIOR TO THE TIME THAT AGENT OR BORROWERS ARE
REQUIRED TO MAKE ANY PAYMENT OF PRINCIPAL, INTEREST OR FEES HEREUNDER, DUPLICATE
EXECUTED ORIGINALS OF EITHER (I) U.S. INTERNAL REVENUE SERVICE FORM W-8BEN,
W-8IMY OR W-8ECI OR (II) U.S. INTERNAL REVENUE SERVICE FORM W-9, AS APPLICABLE
AND AGREES TO PROVIDE NEW SUCH FORMS UPON THE EXPIRATION OF ANY PREVIOUSLY
DELIVERED FORM OR COMPARABLE STATEMENTS IN ACCORDANCE WITH APPLICABLE U.S. LAW
AND REGULATIONS AND AMENDMENTS THERETO, DULY EXECUTED AND COMPLETED BY ASSIGNEE,
AND (C) AGREES TO COMPLY WITH ALL APPLICABLE U.S. LAWS AND REGULATIONS WITH
REGARD TO SUCH WITHHOLDING TAX EXEMPTION.

 

8.  REPRESENTATIONS AND WARRANTIES.

 

(A)  ASSIGNOR REPRESENTS AND WARRANTS THAT (I) IT IS THE LEGAL AND BENEFICIAL
OWNER OF THE INTEREST BEING ASSIGNED BY IT HEREUNDER AND THAT SUCH INTEREST IS
FREE AND CLEAR OF ANY SECURITY INTEREST, LIEN, ENCUMBRANCE OR OTHER ADVERSE
CLAIM, (II) IT IS DULY ORGANIZED AND EXISTING AND IT HAS THE FULL POWER AND
AUTHORITY TO TAKE, AND HAS TAKEN, ALL ACTION NECESSARY TO EXECUTE AND DELIVER
THIS ASSIGNMENT AND

 

A-3

--------------------------------------------------------------------------------

 

ACCEPTANCE AND ANY OTHER DOCUMENTS REQUIRED OR PERMITTED TO BE EXECUTED OR
DELIVERED BY IT IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE AND TO FULFILL
ITS OBLIGATIONS HEREUNDER, (III) NO NOTICES TO, OR CONSENTS, AUTHORIZATIONS OR
APPROVALS OF, ANY PERSON ARE REQUIRED (OTHER THAN ANY ALREADY GIVEN OR OBTAINED)
FOR ITS DUE EXECUTION, DELIVERY AND PERFORMANCE OF THIS ASSIGNMENT AND
ACCEPTANCE, AND APART FROM ANY AGREEMENTS OR UNDERTAKINGS OR FILINGS REQUIRED BY
THE LOAN AGREEMENT, NO FURTHER ACTION BY, OR NOTICE TO, OR FILING WITH, ANY
PERSON IS REQUIRED OF IT FOR SUCH EXECUTION, DELIVERY OR PERFORMANCE, AND
(IV) THIS ASSIGNMENT AND ACCEPTANCE HAS BEEN DULY EXECUTED AND DELIVERED BY IT
AND CONSTITUTES THE LEGAL, VALID AND BINDING OBLIGATION OF ASSIGNOR, ENFORCEABLE
AGAINST ASSIGNOR IN ACCORDANCE WITH THE TERMS HEREOF, SUBJECT, AS TO
ENFORCEMENT, TO BANKRUPTCY, INSOLVENCY, MORATORIUM, REORGANIZATION AND OTHER
LAWS OF GENERAL APPLICATION RELATING TO OR AFFECTING CREDITORS’ RIGHTS AND TO
GENERAL EQUITABLE PRINCIPLES.

 

(B)  ASSIGNOR MAKES NO REPRESENTATION OR WARRANTY AND ASSUMES NO RESPONSIBILITY
WITH RESPECT TO ANY STATEMENTS, WARRANTIES OR REPRESENTATIONS MADE IN OR IN
CONNECTION WITH THE LOAN AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR
THE EXECUTION, LEGALITY, VALIDITY, ENFORCEABILITY, GENUINENESS, SUFFICIENCY OR
VALUE OF THE LOAN AGREEMENT OR ANY OTHER INSTRUMENT OR DOCUMENT FURNISHED
PURSUANT THERETO. ASSIGNOR MAKES NO REPRESENTATION OR WARRANTY IN CONNECTION
WITH, AND ASSUMES NO RESPONSIBILITY WITH RESPECT TO, THE SOLVENCY, FINANCIAL
CONDITION OR STATEMENTS OF BORROWERS, GUARANTORS OR ANY OF THEIR RESPECTIVE
AFFILIATES, OR THE PERFORMANCE OR OBSERVANCE BY BORROWERS, GUARANTORS OR ANY
OTHER PERSON, OF ANY OF ITS RESPECTIVE OBLIGATIONS UNDER THE LOAN AGREEMENT OR
ANY OTHER INSTRUMENT OR DOCUMENT FURNISHED IN CONNECTION THEREWITH.

 

(C)  ASSIGNEE REPRESENTS AND WARRANTS THAT (I) IT IS DULY ORGANIZED AND EXISTING
AND IT HAS FULL POWER AND AUTHORITY TO TAKE, AND HAS TAKEN, ALL ACTION NECESSARY
TO EXECUTE AND DELIVER THIS ASSIGNMENT AND ACCEPTANCE AND ANY OTHER DOCUMENTS
REQUIRED OR PERMITTED TO BE EXECUTED OR DELIVERED BY IT IN CONNECTION WITH THIS
ASSIGNMENT AND ACCEPTANCE, AND TO FULFILL ITS OBLIGATIONS HEREUNDER, (II) NO
NOTICES TO, OR CONSENTS, AUTHORIZATIONS OR APPROVALS OF, ANY PERSON ARE REQUIRED
(OTHER THAN ANY ALREADY GIVEN OR OBTAINED) FOR ITS DUE EXECUTION, DELIVERY AND
PERFORMANCE OF THIS ASSIGNMENT AND ACCEPTANCE, AND APART FROM ANY AGREEMENTS OR
UNDERTAKINGS OR FILINGS REQUIRED BY THE LOAN AGREEMENT, NO FURTHER ACTION BY, OR
NOTICE TO, OR FILING WITH, ANY PERSON IS REQUIRED OF IT FOR SUCH EXECUTION,
DELIVERY OR PERFORMANCE; AND (III) THIS ASSIGNMENT AND ACCEPTANCE HAS BEEN DULY
EXECUTED AND DELIVERED BY IT AND CONSTITUTES THE LEGAL, VALID AND BINDING
OBLIGATION OF ASSIGNEE, ENFORCEABLE AGAINST ASSIGNEE IN ACCORDANCE WITH THE
TERMS HEREOF, SUBJECT, AS TO ENFORCEMENT, TO BANKRUPTCY, INSOLVENCY, MORATORIUM,
REORGANIZATION AND OTHER LAWS OF GENERAL APPLICATION RELATING TO OR AFFECTING
CREDITORS’ RIGHTS TO GENERAL EQUITABLE PRINCIPLES.

 

9.  FURTHER ASSURANCES. ASSIGNOR AND ASSIGNEE EACH HEREBY AGREE TO EXECUTE AND
DELIVER SUCH OTHER INSTRUMENTS, AND TAKE SUCH OTHER ACTION, AS EITHER PARTY MAY
REASONABLY REQUEST IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS
ASSIGNMENT AND ACCEPTANCE, INCLUDING THE DELIVERY OF ANY NOTICES OR OTHER
DOCUMENTS OR INSTRUMENTS TO BORROWERS OR AGENT, WHICH MAY BE REQUIRED IN
CONNECTION WITH THE ASSIGNMENT AND ASSUMPTION CONTEMPLATED HEREBY.

 

10.  MISCELLANEOUS

 

(A)  ANY AMENDMENT OR WAIVER OF ANY PROVISION OF THIS ASSIGNMENT AND ACCEPTANCE
SHALL BE IN WRITING AND SIGNED BY THE PARTIES HERETO. NO FAILURE OR DELAY BY
EITHER PARTY HERETO IN EXERCISING ANY RIGHT, POWER OR PRIVILEGE HEREUNDER SHALL
OPERATE AS A WAIVER THEREOF AND ANY WAIVER OF ANY BREACH OF THE PROVISIONS OF
THIS ASSIGNMENT AND ACCEPTANCE SHALL BE WITHOUT PREJUDICE TO ANY RIGHTS WITH
RESPECT TO ANY OTHER FOR FURTHER BREACH THEREOF.

 

(B)  ALL PAYMENTS MADE HEREUNDER SHALL BE MADE WITHOUT ANY SET-OFF OR
COUNTERCLAIM.

 

A-4

--------------------------------------------------------------------------------

 

(C)  ASSIGNOR AND ASSIGNEE SHALL EACH PAY ITS OWN COSTS AND EXPENSES INCURRED IN
CONNECTION WITH THE NEGOTIATION, PREPARATION, EXECUTION AND PERFORMANCE OF THIS
ASSIGNMENT AND ACCEPTANCE.

 

(D)  THIS ASSIGNMENT AND ACCEPTANCE MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS AND ALL OF SUCH COUNTERPARTS TAKEN TOGETHER SHALL BE DEEMED TO
CONSTITUTE ONE AND THE SAME INSTRUMENT.

 

(E)  THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. ASSIGNOR AND ASSIGNEE EACH
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL
COURT SITTING IN NEW YORK, NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS ASSIGNMENT AND ACCEPTANCE AND IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH NEW YORK STATE OR FEDERAL COURT. EACH PARTY TO THIS ASSIGNMENT AND
ACCEPTANCE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING.

 

(F)  ASSIGNOR AND ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS ASSIGNMENT
AND ACCEPTANCE, THE LOAN AGREEMENT, ANY OF THE OTHER FINANCING AGREEMENTS OR ANY
RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).

 

IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment and
Acceptance to be executed and delivered by their duly authorized officers as of
the date first above written.

 

 

[ASSIGNOR]

 

 

 

By:

 

 

 

 

 

Title:

 

 

 

 

[ASSIGNEE]

 

 

 

By:

 

 

 

 

 

Title:

 

 

A-5

--------------------------------------------------------------------------------

 

SCHEDULE 1

 

NOTICE OF ASSIGNMENT AND ACCEPTANCE

 

, 20

 

Wachovia Capital Finance Corporation

(Central), as Agent

150 South Wacker Drive Chicago, Illinois 60606-4202 Attn.: Portfolio Manager

 

Re:  TravelCenters of America LLC

 

Ladies and Gentlemen:

 

Wachovia Capital Finance Corporation (Central), in its capacity as agent
pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf
of the financial institutions which are parties thereto as lenders (in such
capacity, “Agent”), and the financial institutions which are parties to the Loan
Agreement as lenders (individually, each a “Lender” and collectively, “Lenders”)
have entered or are about to enter into financing arrangements pursuant to which
Agent and Lenders may make loans and advances and provide other financial
accommodations to TravelCenters of America LLC, TA Leasing LLC and TA Operating
LLC (collectively, “Borrowers”) as set forth in the Loan and Security Agreement,
dated November     , 2007, by and among Borrowers, certain of their affiliates,
Agent and Lenders (as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, the “Loan Agreement”),
and the other agreements, documents and instruments referred to therein or at
any time executed and/or delivered in connection therewith or related thereto
(all of the foregoing, together with the Loan Agreement, as the same now exist
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced, being collectively referred to herein as the “Financing
Agreements”). Capitalized terms not otherwise defined herein shall have the
respective meanings ascribed thereto in the Loan Agreement.

 

1.             We hereby give you notice of, and request your consent to, the
assignment by                                          (the “Assignor”) to
                                 (the “Assignee”) such that after giving effect
to the assignment Assignee shall have an interest equal to               
(      %) percent of the total Commitments pursuant to the Assignment and
Acceptance Agreement attached hereto (the “Assignment and Acceptance”). We
understand that the Assignor’s Commitment shall be reduced by $                ,
as the same may be further reduced by other assignments on or after the date
hereof.

 

2.             Assignee agrees that, upon receiving the consent of Agent to such
assignment, Assignee will be bound by the terms of the Loan Agreement as fully
and to the same extent as if the Assignee were the Lender originally holding
such interest under the Loan Agreement.

 

3.             The following administrative details apply to Assignee:

 

(A)          Notice address:

 

Assignee name:

Address:

Attention:

 

1

--------------------------------------------------------------------------------

 

Telephone:

Telecopier:

 

(B)           Payment instructions:

 

Account No.:

At:

Reference:

Attention:

 

4.             You are entitled to rely upon the representations, warranties and
covenants of each of Assignor and Assignee contained in the Assignment and
Acceptance.

 

IN WITNESS WHEREOF, Assignor and Assignee have caused this Notice of Assignment
and Acceptance to be executed by their respective duly authorized officials,
officers or agents as of the date first above mentioned.

 

 

Very truly yours,

 

 

 

[NAME OF ASSIGNOR]

 

 

 

By:

 

 

 

 

 

 

 

Title:

 

 

 

 

[NAME OF ASSIGNEE]

 

 

 

By:

 

 

 

 

Title:

 

 

ACKNOWLEDGED AND ASSIGNMENT CONSENTED TO:

 

WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL), as Agent

 

By:

 

 

 

 

 

Title:

 

 

 

2

--------------------------------------------------------------------------------

 

EXHIBIT B TO LOAN AND SECURITY AGREEMENT

 

INFORMATION CERTIFICATE

OF

TRAVELCENTERS OF AMERICA LLC

and its Subsidiaries

 

November 19, 2007

 

Wachovia Capital Finance Corporation (Central), as Agent
150 South Wacker Drive
Chicago, Illinois 60606

 

In connection with certain financing provided or to be provided or arranged for
Wachovia Capital Finance Corporation (Central) (“Wachovia”) and certain other
lenders (together with Wachovia in its individual capacity, collectively,
“Lenders”) and for whom Wachovia will be acting as agent (in such capacity,
“Agent”), each of the undersigned (individually, a “Company” and, collectively,
the “Companies”) jointly and severally represents and warrants to its knowledge
to Agent and Lenders the following information about it, its organizational
structure and other matters of interest to Agent and Lenders:

 

1.                         THE FULL AND EXACT NAME OF EACH COMPANY AS SET FORTH
IN ITS CERTIFICATE OF INCORPORATION (OR ITS CERTIFICATE OF FORMATION OR OTHER
ORGANIZATIONAL DOCUMENT FILED WITH THE APPLICABLE STATE GOVERNMENTAL AUTHORITY,
AS THE CASE MAY BE) IS AS FOLLOWS:

 

TravelCenters of America LLC (“TCA”)
TravelCenters of America Holding Company LLC
TA Leasing LLC
TA Operating LLC
Petro Stopping Centers, L.P. (“Petro”)

Petro Distributing Inc.

Petro Financial Corporation

Petro Holdings Financial Corporation

TCA PSC GP LLC

 

2.                         EACH COMPANY USES AND OWNS THE FOLLOWING TRADE
NAME(S) IN THE OPERATION OF ITS BUSINESS (E.G. BILLING, ADVERTISING, ETC.; NOTE:
DO NOT INCLUDE NAMES WHICH ARE PRODUCT NAMES ONLY):

 

See Schedule 8.11.

 

3.                         EACH COMPANY IS A REGISTERED ORGANIZATION OF THE
FOLLOWING TYPE (FOR EXAMPLE, CORPORATION, LIMITED PARTNERSHIP, LIMITED LIABILITY
COMPANY, ETC.):

 

Company

 

Date of
Organization

 

Jurisdiction of
Organization

 

 

 

 

 

TCA

 

October 10, 2006

 

Delaware

 

1

--------------------------------------------------------------------------------

 

Company

 

Date of
Organization

 

Jurisdiction of
Organization

 

 

 

 

 

TravelCenters of America Holding Company LLC

 

December 1, 1992

 

Delaware

 

 

 

 

 

TA Operating LLC

 

July 08, 1993

 

Delaware

 

 

 

 

 

TA Leasing LLC

 

November 29, 2006

 

Delaware

 

 

 

 

 

Petro Stopping Centers, L.P.

 

April 13, 1992

 

Delaware

 

 

 

 

 

Petro Distributing Inc.

 

December 8, 1994

 

Delaware

 

 

 

 

 

Petro Financial Corporation

 

February 24, 1994

 

Delaware

 

 

 

 

 

Petro Holdings Financial Corporation

 

July 6, 1999

 

Delaware

 

 

 

 

 

TCA PSC GP LLC

 

May 25, 2007

 

Delaware

 

4.                         THE ORGANIZATIONAL IDENTIFICATION NUMBER OF EACH
COMPANY ISSUED BY ITS JURISDICTION OF ORGANIZATION IS AS SET FORTH BELOW (OR IF
NONE IS ISSUED BY THE JURISDICTION OF ORGANIZATION INDICATE “NONE”):

 

Company

 

ID No.

 

 

 

TCA

 

4233441

 

 

 

TravelCenters of America Holding Company LLC

 

2317439

 

 

 

TA Operating LLC

 

2342992

 

 

 

TA Leasing LLC

 

4258845

 

 

 

Petro Stopping Centers, L.P.

 

2294539

 

 

 

Petro Distributing Inc.

 

2459834

 

 

 

Petro Financial Corporation

 

2380860

 

 

 

Petro Holdings Financial Corporation

 

3065977

 

 

 

TCA PSC GP LLC

 

4359604

 

5.                         THE FEDERAL EMPLOYER IDENTIFICATION NUMBER OF EACH
COMPANY IS AS FOLLOWS:

 

Company

 

FEIN

 

 

 

TCA

 

20-5701514

 

 

 

TravelCenters of America Holding Company LLC

 

34-3856519

 

 

 

TA Operating LLC

 

34-1747077

 

2

--------------------------------------------------------------------------------

 

TA Leasing LLC

 

20-8406016

 

 

 

Petro Stopping Centers, L.P.

 

74-2628339

 

 

 

Petro Distributing Inc.

 

74-2728449

 

 

 

Petro Financial Corporation

 

74-2698614

 

 

 

Petro Holdings Financial Corporation

 

74-2922355

 

 

 

TCA PSC GP LLC

 

26-0390159

 

6.                         EACH COMPANY IS DULY QUALIFIED AND AUTHORIZED TO
TRANSACT BUSINESS AS A FOREIGN ORGANIZATION IN THE FOLLOWING STATES AND IS IN
GOOD STANDING IN SUCH STATES:

 

See Exhibit 1 attached.

 

7.                         SINCE THE DATE OF ITS ORGANIZATION, THE NAME OF EACH
COMPANY AS SET FORTH IN ITS ORGANIZATIONAL DOCUMENTATION AS FILED OF RECORD WITH
THE APPLICABLE STATE AUTHORITY HAS BEEN CHANGED AS FOLLOWS:

 

Company

 

Date of Change

 

Prior Name

 

 

 

 

 

TravelCenters of America Holding Company LLC

 

January 31, 2007

 

TravelCenters of America, Inc.

 

 

 

 

 

TA Operating LLC

 

January 31, 2007

 

TA Operating Corporation

 

 

 

 

 

Petro Stopping Centers, L.P.

 

December 27, 1994

 

Petro PSC Properties, L.P.

 

 

 

 

 

None for any of the other Companies

 

 

 

8.                         SINCE THE DATE OF FIVE (5) YEARS PRIOR TO THE DATE
HEREOF, EACH COMPANY HAS MADE OR ENTERED INTO THE FOLLOWING MERGERS OR
ACQUISITIONS:

 

3

--------------------------------------------------------------------------------

 

Company

 

Merger/Acquisition

 

Date

 

 

 

 

 

TCA

 

On May 30, 2007, TCA acquired Petro Stopping Centers, L.P., pursuant to a
Purchase Agreement dated May 30, 2007.  The Purchase Agreement required TCA to
pay $67,600,000 for Petro, assume certain liabilities associated with employee
retention plans and pay certain other closing costs. The assets TCA acquired
through Petro include two travel centers owned and operated by Petro, two travel
centers that Petro operated and leased from third parties other than Hospitality
Properties Trust (“HPT”), a minority interest in a partnership that operates one
travel center, Petro’s franchise business that provides services to 24 travel
centers operated by Petro franchisees, related businesses, four real estate
parcels which are suitable for future development of new travel centers and
working capital.

 

May 29, 2007

 

 

 

 

 

TCA

 

TCA is a limited liability company formed under Delaware law as a wholly owned
subsidiary of HPT in connection with HPT’s planned acquisition of TravelCenters
of America, Inc. On January 31, 2007, HPT acquired TravelCenters of
America, Inc. by merger, restructured this acquired business and distributed all
of TCA’s common shares to the shareholders of HPT. TCA’s business includes all
of the assets of TravelCenters of America, Inc. not retained by HPT, the right
and obligation to lease and operate the travel centers retained by HPT and cash
that HPT contributed to TCA prior to the spin off.

 

January 31, 2007

 

 

 

 

 

TravelCenters of America Holding Company LLC

 

On December 1, 2004, TravelCenters of America, Inc. acquired from Rip Griffin
Truck Service Center, Inc. the assets related to eleven travel centers located
in seven states, primarily in the southwestern region of the United States. The
acquisition included the land, buildings, equipment, inventories and certain
prepaid assets at the eleven travel centers. The aggregate purchase price was
$129,142,000, all of which was paid in cash or assumed liabilities, and was
funded with borrowings under the 2004 Credit Agreement.

 

December 1, 2004

 

 

 

 

 

None for any of the other Companies

 

 

 

9.                         THE CHIEF EXECUTIVE OFFICE AND MAILING ADDRESS OF
EACH COMPANY IS LOCATED AT THE ADDRESS INDICATED FOR SUCH COMPANY ON SCHEDULE
8.2 HERETO.

 

10.                   THE BOOKS AND RECORDS OF EACH COMPANY PERTAINING TO
ACCOUNTS, CONTRACT RIGHTS, INVENTORY, AND OTHER ASSETS ARE LOCATED AT THE
ADDRESSES INDICATED FOR SUCH COMPANY ON SCHEDULE 8.2 HERETO.

 

11.                   EACH COMPANY HAS OTHER PLACES OF BUSINESS AND/OR MAINTAINS
INVENTORY OR OTHER ASSETS ONLY AT THE ADDRESSES (INDICATE WHETHER LOCATIONS ARE
OWNED, LEASED OR OPERATED BY THIRD PARTIES

 

4

--------------------------------------------------------------------------------

 

AND IF LEASED OR OPERATED BY THIRD PARTIES, THEIR NAME AND ADDRESS) INDICATED
FOR SUCH COMPANY ON SCHEDULE 8.2 HERETO.

 

12.                   THE PLACES OF BUSINESS OR OTHER LOCATIONS OF ANY ASSETS
USED BY EACH COMPANY DURING THE LAST FOUR (4) MONTHS OTHER THAN THOSE LISTED
ABOVE ARE AS INDICATED FOR SUCH COMPANY ON SCHEDULE 8.2 HERETO.

 

13.                   EACH COMPANY’S ASSETS ARE OWNED AND HELD FREE AND CLEAR OF
LIENS, MORTGAGES, PLEDGES, SECURITY INTERESTS, ENCUMBRANCES OR CHARGES EXCEPT AS
SET FORTH ON SCHEDULE 8.4 HERETO.

 

14.                   THERE ARE NO JUDGMENTS OR MATERIAL LITIGATION PENDING BY
OR AGAINST ANY COMPANY, ITS SUBSIDIARIES AND/OR AFFILIATES OR ANY OF ITS
OFFICERS/PRINCIPALS, EXCEPT AS SET FORTH ON SCHEDULE 8.6 HERETO.

 

15.                   EACH COMPANY IS IN COMPLIANCE WITH ALL ENVIRONMENTAL LAWS
APPLICABLE TO ITS BUSINESS OR OPERATIONS EXCEPT AS SET FORTH ON SCHEDULE 8.8
HERETO.

 

16.                   NO COMPANY HAS ANY DEPOSIT ACCOUNTS, INVESTMENT ACCOUNTS,
SECURITIES ACCOUNT OR SIMILAR ACCOUNTS WITH ANY BANK, SAVINGS AND LOAN OR OTHER
FINANCIAL INSTITUTION, EXCEPT AS SET FORTH ON SCHEDULE 8.10 HERETO FOR THE
PURPOSES AND OF THE TYPES INDICATED THEREIN.

 

17.                   NO COMPANY OWNS OR LICENSES ANY TRADEMARKS, PATENTS,
COPYRIGHTS OR OTHER INTELLECTUAL PROPERTY, EXCEPT AS SET FORTH ON SCHEDULE 8.11
HERETO (INDICATE TYPE OF INTELLECTUAL PROPERTY AND WHETHER OWNED OR LICENSED,
REGISTRATION NUMBER, DATE OF REGISTRATION, AND, IF LICENSED, THE NAME AND
ADDRESS OF THE LICENSOR).

 

18.                   EACH COMPANY IS AFFILIATED WITH, OR HAS OWNERSHIP IN, THE
CORPORATIONS (INCLUDING SUBSIDIARIES) AND OTHER ORGANIZATIONS SET FORTH ON
SCHEDULE 8.12 HERETO.

 

19.                   THE NAMES OF THE STOCKHOLDERS (OR MEMBERS OR PARTNERS,
INCLUDING GENERAL PARTNERS AND LIMITED PARTNERS) OF EACH COMPANY AND THEIR
HOLDINGS ARE AS SET FORTH ON SCHEDULE 8.12 HERETO (IF STOCK OR OTHER INTERESTS
ARE WIDELY HELD INDICATE ONLY HOLDERS OWNING 10% OR MORE OF THE VOTING STOCK OR
OTHER INTERESTS).

 

20.                   NO COMPANY IS A PARTY TO OR BOUND BY AN COLLECTIVE
BARGAINING OR SIMILAR AGREEMENT WITH ANY UNION, LABOR ORGANIZATION OR OTHER
BARGAINING AGENT EXCEPT AS SET FORTH ON SCHEDULE 8.13 HERETO (INDICATE DATE OF
AGREEMENT, PARTIES TO AGREEMENT, DESCRIPTION OF EMPLOYEES COVERED, AND DATE OF
TERMINATION).

 

5

--------------------------------------------------------------------------------

 

21.                   NO COMPANY IS A PARTY TO OR BOUND BY ANY “MATERIAL
CONTRACT” EXCEPT AS SET FORTH ON SCHEDULE 8.15 HERETO.  FOR THIS PURPOSE A
“MATERIAL CONTRACT” MEANS ANY CONTRACT OR OTHER AGREEMENT, WRITTEN OR ORAL, TO
WHICH SUCH COMPANY IS A PARTY AS TO WHICH THE BREACH, NONPERFORMANCE,
CANCELLATION OR FAILURE TO RENEW BY ANY PARTY THERETO WOULD HAVE A MATERIAL
ADVERSE EFFECT ON THE BUSINESS, ASSETS, CONDITION (FINANCIAL OR OTHERWISE) OR
RESULTS OF OPERATIONS OR PROSPECTS OF THE COMPANIES TAKEN AS A WHOLE OR THE
VALIDITY OR ENFORCEABILITY OF ANY AGREEMENTS OF SUCH COMPANY WITH AGENT AND
LENDERS OR ANY OF THE RIGHTS AND REMEDIES OF AGENT AND LENDERS UNDER ANY OF SUCH
AGREEMENTS.

 

22.                   NO COMPANY HAS ANY “INDEBTEDNESS” EXCEPT AS SET FORTH ON
SCHEDULE 9.9 HERETO.  FOR THIS PURPOSE, THE TERM “INDEBTEDNESS” MEANS ANY
LIABILITY, WHETHER OR NOT CONTINGENT, (A) IN RESPECT OF BORROWED MONEY (WHETHER
OR NOT THE RECOURSE OF THE LENDER IS TO THE WHOLE OF THE ASSETS OF SUCH COMPANY
OR ONLY TO A PORTION THEREOF) OR EVIDENCED BY BONDS, NOTES, DEBENTURES OR
SIMILAR INSTRUMENTS; (B) REPRESENTING THE BALANCE DEFERRED AND UNPAID OF THE
PURCHASE PRICE OF ANY PROPERTY OR SERVICES (EXCEPT ANY SUCH BALANCE THAT
CONSTITUTES AN ACCOUNT PAYABLE TO A TRADE CREDITOR (WHETHER OR NOT AN AFFILIATE)
CREATED, INCURRED, ASSUMED OR GUARANTEED BY SUCH COMPANY IN THE ORDINARY COURSE
OF BUSINESS OF SUCH COMPANY IN CONNECTION WITH OBTAINING GOODS, MATERIALS OR
SERVICES THAT IS NOT OVERDUE BY MORE THAN NINETY (90) DAYS, UNLESS THE TRADE
PAYABLE IS BEING CONTESTED IN GOOD FAITH); (C) ALL OBLIGATIONS AS LESSEE UNDER
LEASES WHICH HAVE BEEN, OR SHOULD BE, IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES RECORDED AS CAPITAL LEASES; (D) ANY CONTRACTUAL
OBLIGATION, CONTINGENT OR OTHERWISE, OF SUCH COMPANY TO PAY OR BE LIABLE FOR THE
PAYMENT OF ANY INDEBTEDNESS DESCRIBED IN THIS DEFINITION OF ANOTHER PERSON OR
ENTITY, INCLUDING, WITHOUT LIMITATION, ANY SUCH INDEBTEDNESS, DIRECTLY OR
INDIRECTLY GUARANTEED, OR ANY AGREEMENT TO PURCHASE, REPURCHASE, OR OTHERWISE
ACQUIRE SUCH INDEBTEDNESS, OBLIGATION OR LIABILITY OR ANY SECURITY THEREFOR, OR
TO PROVIDE FUNDS FOR THE PAYMENT OR DISCHARGE THEREOF, OR TO MAINTAIN SOLVENCY,
ASSETS, LEVEL OF INCOME, OR OTHER FINANCIAL CONDITION; (E) ALL OBLIGATIONS WITH
RESPECT TO REDEEMABLE STOCK AND REDEMPTION OR REPURCHASE OBLIGATIONS UNDER ANY
CAPITAL STOCK OR OTHER EQUITY SECURITIES ISSUED BY SUCH COMPANY; (F) ALL
REIMBURSEMENT OBLIGATIONS AND OTHER LIABILITIES OF SUCH COMPANY WITH RESPECT TO
SURETY BONDS (WHETHER BID, PERFORMANCE OR OTHERWISE), LETTERS OF CREDIT,
BANKER’S ACCEPTANCES, DRAFTS OR SIMILAR DOCUMENTS OR INSTRUMENTS ISSUED FOR SUCH
COMPANY’S ACCOUNT; (G) ALL INDEBTEDNESS OF SUCH COMPANY IN RESPECT OF
INDEBTEDNESS OF ANOTHER PERSON OR ENTITY FOR BORROWED MONEY OR INDEBTEDNESS OF
ANOTHER PERSON OR ENTITY OTHERWISE DESCRIBED IN THIS DEFINITION WHICH IS SECURED
BY ANY CONSENSUAL LIEN, SECURITY INTEREST, COLLATERAL ASSIGNMENT, CONDITIONAL
SALE, MORTGAGE, DEED OF TRUST, OR OTHER ENCUMBRANCE ON ANY ASSET OF SUCH
COMPANY, WHETHER OR NOT SUCH OBLIGATIONS, LIABILITIES OR INDEBTEDNESS ARE
ASSUMED BY OR ARE A PERSONAL LIABILITY OF SUCH COMPANY, ALL AS OF SUCH TIME;
(H) ALL OBLIGATIONS, LIABILITIES AND INDEBTEDNESS OF SUCH COMPANY (MARKED TO
MARKET) ARISING UNDER SWAP AGREEMENTS, CAP AGREEMENTS AND COLLAR AGREEMENTS AND
OTHER AGREEMENTS OR ARRANGEMENTS DESIGNED TO PROTECT SUCH PERSON AGAINST
FLUCTUATIONS IN INTEREST RATES OR CURRENCY OR COMMODITY VALUES; (I) ALL
OBLIGATIONS OWED BY SUCH COMPANY UNDER LICENSE AGREEMENTS WITH RESPECT TO
NON-REFUNDABLE, ADVANCE OR MINIMUM GUARANTEE ROYALTY PAYMENTS; AND (J) THE
PRINCIPAL AND INTEREST PORTIONS OF ALL RENTAL OBLIGATIONS OF SUCH COMPANY UNDER
ANY SYNTHETIC LEASE OR SIMILAR OFF-BALANCE SHEET FINANCING WHERE SUCH
TRANSACTION IS CONSIDERED TO BE BORROWED MONEY FOR TAX PURPOSES BUT IS
CLASSIFIED AS AN OPERATING LEASE IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES.

 

6

--------------------------------------------------------------------------------

 

23.                   NO COMPANY HAS MADE ANY LOANS OR ADVANCES OR GUARANTEED OR
OTHERWISE BECOME LIABLE FOR THE OBLIGATIONS OF ANY OTHERS, EXCEPT AS SET FORTH
ON SCHEDULE 9.10 HERETO.

 

24.                   NO COMPANY HAS ANY CHATTEL PAPER (WHETHER TANGIBLE OR
ELECTRONIC) OR INSTRUMENTS AS OF THE DATE HEREOF, EXCEPT AS FOLLOWS:

 

None.

 

25.                   NO COMPANY HAS ANY COMMERCIAL TORT CLAIMS, EXCEPT AS
FOLLOWS:

 

None.

 

26.                   THERE IS NO PROVISION IN THE CERTIFICATE OF INCORPORATION,
CERTIFICATE OF FORMATION,  ARTICLES OF ORGANIZATION, BY-LAWS OR OPERATING
AGREEMENT OF ANY COMPANY (AS APPLICABLE) OR THE OTHER ORGANIZATIONAL DOCUMENTS
OF SUCH COMPANY, OR IN THE LAWS OF THE STATE OF ITS ORGANIZATION, REQUIRING ANY
VOTE OR CONSENT OF IT SHAREHOLDERS, MEMBERS OR OTHER HOLDERS OF THE EQUITY
INTERESTS THEREIN TO BORROW OR TO AUTHORIZE THE MORTGAGE OR PLEDGE OF OR
CREATION OF A SECURITY INTEREST IN ANY ASSETS OF SUCH COMPANY OR ANY
SUBSIDIARY.  SUCH POWER IS VESTED EXCLUSIVELY IN ITS BOARD OF DIRECTORS (OR IN
THE CASE OF A LIMITED PARTNERSHIP, THE GENERAL PARTNER THAT IS THE SIGNATORY
HERETO.

 

27.                   THE OFFICERS OF TCA, TRAVELCENTERS OF AMERICA HOLDING
COMPANY LLC, TA LEASING LLC, AND TA OPERATING LLC, AND THEIR RESPECTIVE TITLES
ARE AS FOLLOWS:

 

Title

 

Name

 

 

 

Chief Executive Officer and President

 

Thomas M. O’Brien

 

 

 

Executive Vice President, Chief Financial Officer and Treasurer

 

John R. Hoadley

 

 

 

Executive Vice President and General Counsel

 

Mark R. Young

 

 

 

Executive Vice President of Operations

 

Larry W. Dockray

 

 

 

Executive Vice President of Real Estate Acquisitions and Development

 

Peter P. Greene

 

 

 

Executive Vice President of Sales

 

Michael J. Lombardi

 

 

 

Executive Vice President of Marketing

 

Joseph A. Szima

 

 

 

Senior Vice President of Shop Marketing

 

Ara A. Bagdasarian

 

 

 

Senior Vice President and Controller

 

Andrew J. Rebholz

 

 

 

Secretary

 

Jennifer C. Clark

 

7

--------------------------------------------------------------------------------

 

THE OFFICERS OF PETRO STOPPING CENTERS, L.P., AND THEIR RESPECTIVE TITLES ARE AS
FOLLOWS:

 

Title

 

Name

 

 

 

President

 

Thomas M. O’Brien

 

 

 

Treasurer and Assistant Secretary

 

John R. Hoadley

 

 

 

Executive Vice President and General Counsel

 

Mark R. Young

 

 

 

Secretary

 

Jennifer B. Clark

 

THE OFFICERS OF PETRO DISTRIBUTING INC., PETRO FINANCIAL CORPORATION, PETRO
HOLDINGS FINANCIAL CORPORATION AND TCA PSC GP LLC, AND THEIR RESPECTIVE TITLES
ARE AS FOLLOWS:

 

Title

 

Name

 

 

 

President

 

Thomas M. O’Brien

 

 

 

Treasurer and Assistant Secretary

 

John R. Hoadley

 

 

 

Secretary

 

Jennifer B. Clark

 

The following will have signatory powers as to all transactions of each Company
with Agent and Lenders:

 

John R. Hoadley

 

Mark R. Young

 

Andrew J. Rebholz

 

Nada Van Allen

 

28.                   THE MEMBERS OF THE BOARD OF DIRECTORS OF TCA ARE:

 

Barry M. Portnoy

 

Thomas M. O’Brien

 

Arthur G. Koumantzelis

 

Barbara D. Gilmore

 

Patrick F. Donelan

 

The members of the Board of Directors of TravelCenters of America Holding
Company LLC, TA Leasing LLC, and TA Operating LLC are:

 

Barry M. Portnoy

 

Thomas M. O’Brien

 

8

--------------------------------------------------------------------------------

 

The members of the Board of Directors of Petro Distributing Inc., Petro
Financial Corporation, Petro Holdings Financial Corporation and TCA PSC GP LLC
are:

 

Barry M. Portnoy

 

Thomas M. O’Brien

 

The sole General Partner of Petro Stopping Centers, L.P. is TCA PSC GP LLC and
the sole Limited Partner of Petro Stopping Centers, L.P. is TravelCenters of
America LLC.

 

29.                   AT THE PRESENT TIME, THERE ARE NO DELINQUENT FEDERAL OR
MATERIAL STATE OR LOCAL TAXES DUE (INCLUDING, BUT NOT LIMITED TO, ALL PAYROLL
TAXES, PERSONAL PROPERTY TAXES, REAL ESTATE TAXES OR INCOME TAXES) EXCEPT AS
FOLLOWS:

 

None.

 

30.                   CERTIFIED PUBLIC ACCOUNTANTS FOR EACH COMPANY IS THE FIRM
OF:

 

Name

 

Ernst & Young

 

Address

 

200 Clarendon Street, Boston, MA 02116

 

Partner Handling Relationship

 

Jamie Pereira (617) 859-6453

 

Were statements uncertified for any fiscal year?

No

 

 

9

--------------------------------------------------------------------------------

 

EXHIBIT B TO LOAN AND SECURITY AGREEMENT

 

Agent and Lenders shall be entitled to rely upon the foregoing in all respects
and each of the undersigned is duly authorized to execute and deliver this
Information Certificate on behalf of the Company for which he or she is signing.

 

 

 

 

Very truly yours,

 

 

 

 

 

TRAVELCENTERS OF AMERICA LLC
(for itself and its Subsidiaries)

 

 

 

 

 

 

 

 

By:

/s/ JOHN R. HOADLEY

 

 

 

 

 

 

Title:

Treasurer

 

10

--------------------------------------------------------------------------------

 

EXHIBIT C
TO
LOAN AND SECURITY AGREEMENT

 

Compliance Certificate

 

To:

Wachovia Capital Finance Corporation (Central), as Agent

 

150 South Wacker Drive

 

Chicago, Illinois 60606-4202

 

Ladies and Gentlemen:

 

I hereby certify to you pursuant to Section 9.6 of the Loan Agreement (as
defined below) as follows:

 

1.  I AM THE DULY ELECTED CHIEF FINANCIAL OFFICER OF TRAVELCENTERS OF AMERICA,
LLC, A DELAWARE LIMITED LIABILITY COMPANY, TA LEASING LLC; A DELAWARE LIMITED
LIABILITY COMPANY, AND TA OPERATING LLC, A DELAWARE LIMITED LIABILITY COMPANY
(COLLECTIVELY, “BORROWERS”). CAPITALIZED TERMS USED HEREIN WITHOUT DEFINITION
SHALL HAVE THE MEANINGS GIVEN TO SUCH TERMS IN THE LOAN AND SECURITY AGREEMENT,
DATED NOVEMBER     , 2007, BY AND AMONG WACHOVIA CAPITAL FINANCE CORPORATION
(CENTRAL) AS AGENT FOR THE FINANCIAL INSTITUTIONS PARTY THERETO AS LENDERS (IN
SUCH CAPACITY, “AGENT”) AND THE FINANCIAL INSTITUTIONS PARTY THERETO AS LENDERS
(COLLECTIVELY, “LENDERS”), BORROWERS AND CERTAIN OF THEIR AFFILIATES (AS SUCH
LOAN AND SECURITY AGREEMENT IS AMENDED, MODIFIED OR SUPPLEMENTED, FROM TIME TO
TIME, THE “LOAN AGREEMENT”).

 

2.  I HAVE REVIEWED THE TERMS OF THE LOAN AGREEMENT, AND HAVE MADE, OR HAVE
CAUSED TO BE MADE UNDER MY SUPERVISION, A REVIEW IN REASONABLE DETAIL OF THE
TRANSACTIONS AND THE FINANCIAL CONDITION OF BORROWERS AND GUARANTORS, DURING THE
IMMEDIATELY PRECEDING FISCAL MONTH.

 

3.  THE REVIEW DESCRIBED IN SECTION 2 ABOVE DID NOT DISCLOSE THE EXISTENCE
DURING OR AT THE END OF SUCH FISCAL MONTH, AND I HAVE NO KNOWLEDGE OF THE
EXISTENCE AND CONTINUANCE ON THE DATE HEREOF, OF ANY CONDITION OR EVENT WHICH
CONSTITUTES A DEFAULT OR AN EVENT OF DEFAULT, EXCEPT AS SET FORTH ON SCHEDULE I
ATTACHED HERETO. DESCRIBED ON SCHEDULE I ATTACHED HERETO ARE THE EXCEPTIONS, IF
ANY, TO THIS SECTION 3 LISTING, IN DETAIL, THE NATURE OF THE CONDITION OR EVENT,
THE PERIOD DURING WHICH IT HAS EXISTED AND THE ACTION WHICH ANY BORROWER OR
GUARANTOR HAS TAKEN, IS TAKING, OR PROPOSES TO TAKE WITH RESPECT TO SUCH
CONDITION OR EVENT.

 

4.  I FURTHER CERTIFY THAT, BASED ON THE REVIEW DESCRIBED IN SECTION 2 ABOVE, NO
BORROWER OR GUARANTOR HAS AT ANY TIME DURING OR AT THE END OF SUCH FISCAL MONTH,
EXCEPT AS SPECIFICALLY DESCRIBED ON SCHEDULE II ATTACHED HERETO OR AS PERMITTED
BY THE LOAN AGREEMENT, DONE ANY OF THE FOLLOWING:

 

--------------------------------------------------------------------------------

 

(A)               CHANGED ITS RESPECTIVE CORPORATE NAME, OR TRANSACTED BUSINESS
UNDER ANY TRADE NAME, STYLE, OR FICTITIOUS NAME, OTHER THAN THOSE PREVIOUSLY
DESCRIBED TO YOU AND SET FORTH IN THE FINANCING AGREEMENTS.

 

(B)              CHANGED THE LOCATION OF ITS CHIEF EXECUTIVE OFFICE, CHANGED ITS
JURISDICTION OF INCORPORATION, CHANGED ITS TYPE OF ORGANIZATION OR CHANGED THE
LOCATION OF OR DISPOSED OF ANY OF ITS PROPERTIES OR ASSETS (OTHER THAN PURSUANT
TO THE SALE OF INVENTORY IN THE ORDINARY COURSE OF ITS BUSINESS OR AS OTHERWISE
PERMITTED BY SECTION 9.7 OF THE LOAN AGREEMENT), OR ESTABLISHED ANY NEW ASSET
LOCATIONS.

 

(C)               MATERIALLY CHANGED THE TERMS UPON WHICH IT SELLS GOODS
(INCLUDING SALES ON CONSIGNMENT) OR PROVIDES SERVICES, NOR HAS ANY MATERIAL
VENDOR OR TRADE SUPPLIER TO ANY BORROWER OR GUARANTOR DURING OR AT THE END OF
SUCH PERIOD MATERIALLY ADVERSELY CHANGED THE TERMS UPON WHICH IT SUPPLIES GOODS
TO ANY BORROWER OR GUARANTOR.

 

(D)              PERMITTED OR SUFFERED TO EXIST ANY SECURITY INTEREST IN OR
LIENS ON ANY OF ITS PROPERTIES, WHETHER REAL OR PERSONAL, OTHER THAN AS
SPECIFICALLY PERMITTED IN THE FINANCING AGREEMENTS.

 

(E)               RECEIVED ANY NOTICE OF, OR OBTAINED KNOWLEDGE OF ANY OF THE
FOLLOWING NOT PREVIOUSLY DISCLOSED TO AGENT: (I) THE OCCURRENCE OF ANY EVENT
INVOLVING THE RELEASE, SPILL OR DISCHARGE OF ANY HAZARDOUS MATERIAL IN VIOLATION
OF APPLICABLE ENVIRONMENTAL LAW WITH RESPECT TO ANY REAL PROPERTY INCLUDED IN
THE CALCULATION OF THE BORROWING BASE OR (II) ANY INVESTIGATION, PROCEEDING,
COMPLAINT, ORDER, DIRECTIVE, CLAIMS, CITATION OR NOTICE WITH RESPECT TO: (A) ANY
NON-COMPLIANCE WITH OR VIOLATION OF ANY APPLICABLE ENVIRONMENTAL LAW BY ANY
BORROWER OR GUARANTOR WITH RESPECT TO ANY REAL PROPERTY INCLUDED IN THE
CALCULATION OF THE BORROWING BASE OR (B) THE RELEASE, SPILL OR DISCHARGE OF ANY
HAZARDOUS MATERIAL IN VIOLATION OF APPLICABLE ENVIRONMENTAL LAW WITH RESPECT TO
ANY REAL PROPERTY INCLUDED IN THE CALCULATION OF THE BORROWING BASE OR (C) THE
GENERATION, USE, STORAGE, TREATMENT, TRANSPORTATION, MANUFACTURE, HANDLING,
PRODUCTION OR DISPOSAL OF ANY HAZARDOUS MATERIALS IN VIOLATION OF APPLICABLE
ENVIRONMENTAL LAWS WITH RESPECT TO ANY REAL PROPERTY INCLUDED IN THE CALCULATION
OF THE BORROWING BASE OR (D) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY MATTER,
WHICH COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT OR A
MATERIAL ADVERSE EFFECT WITH RESPECT TO ANY SINGLE PARCEL OF REAL PROPERTY.

 

(F)                 BECOME AWARE OF, OBTAINED KNOWLEDGE OF, OR RECEIVED
NOTIFICATION OF, ANY BREACH OR VIOLATION OF ANY MATERIAL COVENANT CONTAINED IN
ANY INSTRUMENT OR AGREEMENT IN RESPECT OF INDEBTEDNESS FOR MONEY BORROWED BY ANY
BORROWER OR GUARANTOR.

 

--------------------------------------------------------------------------------

 

(G)              FAILED TO PAY WHEN DUE ANY RENT OR OTHER AMOUNTS OWING UNDER
ANY REAL PROPERTY LEASE (OR SIMILAR AGREEMENT) IN AN AGGREGATE AMOUNT IN EXCESS
OF $500,000 AS TO ALL SUCH LEASES AND SIMILAR AGREEMENTS.

 

(H)              FAILED TO PAY WHEN DUE ANY ROYALTY PAYMENT OR OTHER AMOUNTS
OWING UNDER ANY MATERIAL LICENSE AGREEMENT.

 

5.  ATTACHED HERETO AS SCHEDULE III ARE THE CALCULATIONS USED IN DETERMINING, AS
OF THE END OF SUCH FISCAL MONTH WHETHER PARENT AND ITS TESTED SUBSIDIARIES ARE
IN COMPLIANCE WITH THE COVENANTS SET FORTH IN SECTION 9.17 OF THE LOAN AGREEMENT
FOR SUCH FISCAL MONTH (IT BEING UNDERSTOOD THAT SCHEDULE III SHALL CONTAIN THE
CALCULATIONS OF THE FIXED CHARGE COVERAGE RATIO OF PARENT AND ITS TESTED
SUBSIDIARIES, WHETHER OR NOT A COMPLIANCE PERIOD EXISTS).

 

The foregoing certifications are made and delivered this day of
                            , 20    .

 

 

Very truly yours,

 

 

 

TRAVEL CENTERS OF AMERICA LLC

 

TA LEASING LLC

 

TA OPERATING LLC

 

 

 

By:

 

 

 

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

EXHIBIT D

TO

LOAN AND SECURITY AGREEMENT

 

TravelCenters of America LLC

Borrowing Base Certificate

 

To: Wachovia Bank, National Association

150 S Wacker Dr, Hartford Plaza

3rd Floor, MC GA4523

Chicago, IL 60606

Phone: (312) 332-0420

Facsimile: (312) 332-0424

Attn: Laura Wheeland

 

RE: Borrowing Base Certificate as of:

 

DATE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borrowing Base

 

Eligible Amount

 

Advance
Rate

 

Amount Available

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

 

 

100

%

 

 

 

 

 

 

 

 

 

 

Accounts Receivable

 

 

 

85

%

 

 

 

 

 

 

 

 

 

 

Inventory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fuel Inventory

 

 

 

80

%

 

 

 

 

 

 

 

 

 

 

PPSC Warehouse Inventory

 

 

 

46

%

 

 

 

 

 

 

 

 

 

 

Store Inventory

 

 

 

61

%

 

 

 

 

 

 

 

 

 

 

Shop Inventory

 

 

 

35

%

 

 

 

 

 

 

 

 

 

 

Total Inventory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reduction to limitation amount

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

Total Inventory, not to exceed 50% of Revolver Commitment

 

 

 

 

 

$

—

 

 

 

 

 

 

 

 

 

Fixed Asset Availability

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equipment Availability

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Property Availability

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed Asset Availability, not to exceed 20% of Revolver Commitment

 

 

 

 

 

$

—

 

 

 

 

 

 

 

 

 

Gross Borrowing Base

 

 

 

 

 

$

—

 

 

 

 

 

 

 

 

 

Less: Reserve for State Excise Taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: 50% Gift Card Liability Reserve

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal - reserves

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

Net Borrowing Base

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

Revolver commitment

 

$

100,000,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Lesser of net borrowing base or revolver commitment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less Balances Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolver Loans Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Swing Loans Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TA Letter of Credit Exposure Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Petro Letter of Credit Exposure Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excess Availability

 

 

 

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A.  Cash and Cash Equivalents

 

 

 

 

 

 

 

 

 

1.  Cash and Cash Equivalents, subject to a Deposit Control Agreement in favor
of the Agent

 

 

$

—

 

 

 

 

 

 

2.  Rate of advance

 

 

 

 

x

100

%

 

 

 

3. Available Cash and Cash Equivalents

 

 

 

 

 

 

=

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B.  Accounts Receivable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Aging

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Party Credit Card A/R

 

 

 

 

 

 

 

 

 

Direct Billing

 

 

 

 

 

 

 

 

 

National Tire Account

 

 

 

 

 

 

 

 

 

Exchange Card

 

 

 

 

 

 

 

 

 

Wholesale/Franchise

 

 

 

 

 

 

 

 

 

Access TA Billed

 

 

 

 

 

 

 

 

 

Other Income

 

 

 

 

 

 

 

 

 

 

 

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Access TA Unbilled

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2. Accounts Receivable Outstanding

 

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3. Less: Ineligible Accounts Receivable

 

 

$

—

 

 

 

 

 

 

a.  Non-Credit Card Accounts that are unpaid more than thirty (30) days after
the date of the original invoice

 

-

 

 

 

 

 

 

 

     Add-back for Shop Accounts which are unpaid between 30 and 60 days after
the date of original invoice

 

+

 

 

 

 

 

 

 

b.  Accounts from sales on consignment, guaranteed sale, sale and return, sale
on approval, or other terms under which payment by the account debtor may be
conditional or contingent

 

-

 

 

 

 

 

 

 

c.  Accounts due from an account debtor outside the United States, unless
(i) backed by a letter of credit, or (ii) subject to credit insurance payable or
credit insurance, in each case acceptable to the Agent, or (iii) otherwise
approved and acceptable to the Agent in its reasonable discretion.

 

-

 

 

 

 

 

 

 

d.  Accounts consisting of progress billings, bill and hold invoices or
retainage invoices

 

-

 

 

 

 

 

 

 

e.  All offsets, counterclaims, unresolved disputes or contras, but only to the
extent of the amount owed by such Credit Party to the account debtor

 

-

 

 

 

 

 

 

 

f.  Accounts for which there are facts, events or occurrences which would impair
the validity, enforceability or collectability of such Accounts in any material
respect or reduce the amount payable or delay payment there under

 

-

 

 

 

 

 

 

 

g.  Accounts where the Agent does not have a first priority, perfected security
interest in such Account.

 

-

 

 

 

 

 

 

 

h.  Accounts where the account debtor or any officer or employee of the account
debtor with respect to such Accounts is an officer, employee, agent or other
Affiliate of any Borrower or Guarantor

 

-

 

 

 

 

 

 

 

i.  Accounts for which the account debtor is any domestic or foreign govt unless
otherwise approved by Agent

 

-

 

 

 

 

 

 

 

j.  Accounts for which there are proceedings or actions known to Agent or any
Borrower which are threatened or pending against the account debtors with
respect to such Accounts which could reasonably be expected to result in any
material adverse change in any such account debtor’s financial condition
(including, without limitation, any bankruptcy, dissolution, liquidation,
reorganization

 

 

 

 

 

 

 

 

 

 

1

--------------------------------------------------------------------------------

 

or similar proceeding)

 

-

 

 

 

 

 

 

 

 

k.  The aggregate amount owed by a single debtor is greater than ten (10%)
percent of the aggregate amount of all otherwise Eligible Accounts, the amount
of such excess

 

-

 

 

 

$

—

 

 

 

 

l.  Accounts that are unpaid more than thirty (30) (except those Accounts
arising from goods sold or services rendered by a Borrower’s repair shop, sixty
(60)) days after the date of the original invoice for which constitute more than
fifty (50%) percent of the total accounts of such account debtor

 

-

 

 

 

 

 

 

 

 

m.  Accounts for which the account debtor is located in NJ, WV, MN or another
state requiring the filing of a Notice of Business Activities Report or similar
report in order to permit such Borrower to seek judicial enforcement in such
State of payment of such Account, unless such Borrower has qualified to do
business in such state or has filed a Notice of Business Activities Report or
equivalent report for the then current year or such failure to file and
inability to seek judicial enforcement is capable of being remedied without any
material delay or material cost

 

-

 

 

 

 

 

 

 

 

n.  The sale of goods or the rendition of services giving rise to such Account
is supported by a performance bond unless the issuer of such bond shall have
waived in writing any rights or interest in and to all Collateral, in form and
substance reasonably satisfactory to Agent

 

-

 

 

 

 

 

 

 

 

o.  Such Accounts have not been billed and invoiced to the account debtor with
respect thereto, except to the extent that the amount of Accounts which have not
been so billed and invoiced do not exceed twenty five (25%) percent of the
Maximum Credit

 

-

 

 

 

 

 

 

 

 

p.  Such Accounts have not been billed and invoiced to the account debtor with
respect thereto shall cease to be Eligible Accounts unless such Account shall
have been billed and invoiced within seven (7) Business Days after the date such
Account is created

 

-

 

 

 

 

 

 

 

 

q.  Credit card accounts that are unpaid more than five (5) business days (or
solely in the case of credit card receivables arising from the use of a card
issued by Comdata or EFS, ten (10) business days) after the date of the sale of
inventory or rendered services

 

-

 

 

 

 

 

 

 

 

r.  Accounts not otherwise satisfactory to the Agent, in its Reasonable Credit
Judgment

 

-

 

 

 

 

 

 

 

 

s.  Other ineligibles at reasonable discretion of Agent

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4. Total Ineligible Receivables

 

 

$

—

 

 

 

 

 

 

 

Total Eligible Receivables

 

 

$

—

 

 

 

 

 

 

 

Rate of advance

 

 

 

 

x

85

%

 

 

 

Total Available Accounts Receivable

 

 

 

 

 

 

 

=

$

—

 

 

 

 

 

 

 

 

 

 

 

 

C. Fuel Inventory

 

 

 

 

 

 

 

 

 

 

1. Eligible Gasoline Inventory

 

 

$

—

 

 

 

 

 

 

 

2. Eligible Diesel Inventory

 

 

—

 

 

 

 

 

 

 

3. Less: Ineligible Fuel Inventory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

a.  Inventory at premises other than those owned or leased and controlled by any
Borrower, unless Agent shall have received a Collateral Access Agreement from
the owner and lessor of such location, duly authorized, executed and delivered
by such owner and lessor or Agent shall have established Reserves in respect to
such amounts payable to the owner or lessor

 

-

 

 

 

 

 

 

 

 

b.  Inventory subject to a security interest or lien in favor of any Person
other than Agent except those permitted in the LSA that are subject to an
intercreditor agreement in form and substance reasonably satisfactory to Agent 

 

-

 

 

 

 

 

 

 

 

c.  Inventory located outside the United States of America

 

-

 

 

 

 

 

 

 

 

d.  Other ineligibles at reasonable discretion of Agent

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4. Total Eligible Fuel Inventory

 

 

$

 —

 

 

 

 

 

 

 

Rate of advance.

 

 

 

 

x

80

%

 

 

 

Total Available Fuel Inventory, not to exceed

 

$

—

 

 

 

 

 

 

 

 

 

 

 

=

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

D. PPSC Warehouse Inventory

 

 

 

 

 

 

 

 

 

 

1. Gross PPSC Warehouse Inventory

 

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2. Less: Ineligible PPSC Warehouse Inventory

 

 

 

 

 

 

 

 

 

 

a.  Any inventory sold or intended to be sold by any restaurant owned or
operated by any Borrower or Guarantor

 

-

 

 

 

 

 

 

 

 

b.  Components which are not part of finished goods

 

-

 

 

 

 

 

 

 

 

c.  Spare parts for equipment

 

-

 

 

 

 

 

 

 

 

d.  Packaging and shipping materials

 

-

 

 

 

 

 

 

 

 

e.  Supplies used or consumed in such Borrower’s business

 

-

 

 

 

 

 

 

 

 

f.  Inventory at premises other than those owned or leased and controlled by any
Borrower, unless Agent shall have received a Collateral Access Agreement from
the owner and lessor of such location, duly authorized, executed and delivered
by such owner and lessor or Agent shall have established Reserves in respect to
such amounts payable to the owner or lessor

 

-

 

 

 

 

 

 

 

 

g.  Inventory subject to a security interest or lien in favor of any Person
other than Agent except those permitted in the LSA that are subject to an
intercreditor agreement in form and substance reasonably satisfactory to Agent

 

-

 

 

 

 

 

 

 

 

h.  Unserviceable, obsolete or slow moving Inventory

 

-

 

 

 

 

 

 

 

 

i.  Inventory that is not subject to the first priority, valid and perfected
security interest of Agent

 

-

 

 

 

 

 

 

 

 

j.  Returned, damaged and/or defective Inventory

 

-

 

 

 

 

 

 

 

 

k.  Inventory located outside the United States of America

 

-

 

 

 

 

 

 

 

 

l.  Inventory which is subject to or uses a trademark or other intellectual
property licensed by a third party to a Borrower unless either (i) Agent shall
have received an agreement, in form and substance reasonably satisfactory to
Agent, from such third party licensor in favor of Agent, duly authorized,
executed and delivered by such Borrower and such third party licensor or
(ii) Agent shall have otherwise determined that Agent has the right to sell such
Inventory.

 

-

 

 

 

 

 

 

 

 

m.  Other ineligibles at reasonable discretion of Agent

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3. Total Ineligible PPSC Warehouse Inventory

 

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4. Total Eligible PPSC Warehouse Inventory

 

 

$

 —

 

 

 

 

 

 

 

Rate of advance

 

 

 

 

x

46

%

 

 

 

Total Available PPSC Warehouse Inventory

 

 

 

 

 

 

 

=

$

—

 

 

2

--------------------------------------------------------------------------------

 

E. Store Inventory

 

 

 

 

 

 

 

 

 

 

(includes Merchandise, Food, Grocery, and Cigarettes)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Gross Store Inventory

 

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2. Less: Ineligible Store Inventory

 

 

 

 

 

 

 

 

 

 

a.  Any inventory sold or intended to be sold by any restaurant owned or
operated by any Borrower or Guarantor

 

-

 

 

 

 

 

 

 

 

b.  Components which are not part of finished goods

 

-

 

 

 

 

 

 

 

 

c.  Spare parts for equipment

 

-

 

 

 

 

 

 

 

 

d.  Packaging and shipping materials

 

-

 

 

 

 

 

 

 

 

e.  Supplies used or consumed in such Borrower’s business

 

-

 

 

 

 

 

 

 

 

f.  Inventory at premises other than those owned or leased and controlled by any
Borrower, unless Agent shall have received a Collateral Access Agreement from
the owner and lessor of such location, duly authorized, executed and delivered
by such owner and lessor or Agent shall have established Reserves in respect to
such amounts payable to the owner or lessor

 

-

 

 

 

 

 

 

 

 

g.  Inventory subject to a security interest or lien in favor of any Person
other than Agent except those permitted in the LSA that are subject to an
intercreditor agreement in form and substance reasonably satisfactory to Agent

 

-

 

 

 

 

 

 

 

 

h.  Bill and hold goods

 

-

 

 

 

 

 

 

 

 

i.  Unserviceable, obsolete or slow moving Inventory

 

-

 

 

 

 

 

 

 

 

j.  Inventory that is not subject to the first priority, valid and perfected
security interest of Agent

 

-

 

 

 

 

 

 

 

 

k.  Returned, damaged and/or defective Inventory

 

-

 

 

 

 

 

 

 

 

l.  Inventory purchased or sold on consignment

 

-

 

 

 

 

 

 

 

 

m.  Inventory located outside the United States of America

 

-

 

 

 

 

 

 

 

 

n.  Inventory which is subject to or uses a trademark or other intellectual
property licensed by a third party to a Borrower unless either (i) Agent shall
have received an agreement, in form and substance reasonably satisfactory to
Agent, from such third party licensor in favor of Agent, duly authorized,
executed and delivered by such Borrower and such third party licensor or
(ii) Agent shall have otherwise determined that Agent has the right to sell such
Inventory.

 

-

 

 

 

 

 

 

 

 

o.  Perishable inventory in excess of $2MM (includes deli, dairy, bread, etc.)

 

-

 

 

 

 

 

 

 

 

p.  Shrink Reserve

 

-

 

 

 

 

 

 

 

 

q.  Rebate Reserve

 

-

 

 

 

 

 

 

 

 

r.  Store Inventory not maintained on a consolidating perpetual

 

-

 

 

 

 

 

 

 

 

s.  Other ineligibles at reasonable discretion of Agent

 

-

 

 

 

 

 

 

 

 

t.  Store LCM Reserve

 

-

 

 

 

 

 

 

 

 

u.  Store Obsolete Reserve

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3. Total Ineligible Store Inventory

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4. Total Eligible Store Inventory

 

 

$

—

 

 

 

 

 

 

 

Rate of advance

 

 

 

 

x

61

% 

 

 

 

Total Available Store Inventory

 

 

 

 

 

 

 

=

$

—

 

 

 

 

 

 

 

 

 

 

 

 

F. Shop Inventory

 

 

 

 

 

 

 

 

 

 

(includes Tires, Parts, and Oil, and other)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. Gross Shop Inventory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2. Less: Ineligible Shop Inventory

 

 

 

 

 

 

 

 

 

 

a.  Components which are not part of finished goods

 

-

 

 

 

 

 

 

 

 

b.  Spare parts for equipment

 

-

 

 

 

 

 

 

 

 

c.  Packaging and shipping materials

 

-

 

 

 

 

 

 

 

 

d.  Supplies used or consumed in such Borrower’s business

 

-

 

 

 

 

 

 

 

 

e.  Inventory at premises other than those owned or leased and controlled by any
Borrower, unless Agent shall have received a Collateral Access Agreement from
the owner and lessor of such location, duly authorized, executed and delivered
by such owner and lessor or Agent shall have established Reserves in respect to
such amounts payable to the owner or lessor

 

-

 

 

 

 

 

 

 

 

f.  Inventory subject to a security interest or lien in favor of any Person
other than Agent except those permitted in the LSA that are subject to an
intercreditor agreement in form and substance reasonably satisfactory to Agent

 

-

 

 

 

 

 

 

 

 

g.  Bill and hold goods

 

-

 

 

 

 

 

 

 

 

h.  Unserviceable, obsolete or slow moving Inventory

 

-

 

 

 

 

 

 

 

 

i.  Inventory that is not subject to the first priority, valid and perfected
security interest of Agent

 

-

 

 

 

 

 

 

 

 

j.  Returned, damaged and/or defective Inventory

 

-

 

 

 

 

 

 

 

 

k.  Inventory purchased or sold on consignment

 

-

 

 

 

 

 

 

 

 

l.  Inventory located outside the United States of America

 

-

 

 

 

 

 

 

 

 

m.  Inventory which is subject to or uses a trademark or other intellectual
property licensed by a third party to a Borrower unless either (i) Agent shall
have received an agreement, in form and substance reasonably satisfactory to
Agent, from such third party licensor in favor of Agent, duly authorized,
executed and delivered by such Borrower and such third party licensor or
(ii) Agent shall have otherwise determined that Agent has the right to sell such
Inventory.

 

-

 

 

 

 

 

 

 

 

n.  Rebate Reserve

 

-

 

 

 

 

 

 

 

 

o.  Other ineligibles at reasonable discretion of Agent

 

-

 

 

 

 

 

 

 

 

p.  Shrink Reserve

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3. Total Ineligible Shop Inventory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4. Total Eligible Shop Inventory

 

 

 

 

 

 

 

 

 

 

Rate of advance

 

 

 

 

x

35

%

 

 

 

Total Available Shop Inventory

 

 

 

 

 

 

 

=

$

—

 

 

3

--------------------------------------------------------------------------------

 

G. Equipment Availability

 

 

 

 

 

 

 

 

 

 

1.  Net Orderly Liquidation Value of Eligible Equipment

 

 

$

—

 

 

 

 

 

 

 

2.  Rate of advance

 

 

 

 

x

85

%

 

 

 

3. Original Available Equipment

 

 

 

 

 

 

 

=

$

—

 

 

 

 

 

 

 

 

 

 

 

 

Less: Amortization Amount

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

4. Available Equipment

 

 

 

 

 

 

 

=

$

—

 

 

 

 

 

 

 

 

 

 

 

 

H. Real Property Availability

 

 

 

 

 

 

 

 

 

 

1. Fair Market Value of Eligible Real Property

 

 

$

—

 

 

 

 

 

 

 

Less: Environmental Reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Eligible Real Property

 

 

—

 

 

 

 

 

 

 

2. Rate of advance

 

 

 

 

x

65

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3. Original Available Real Property

 

 

 

 

 

 

 

=

$

—

 

 

 

 

 

 

 

 

 

 

 

 

Less: Amortization Amount

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

4. Available Real Property

 

 

 

 

 

 

 

=

$

—

 

 

In connection with the foregoing, we hereby acknowledge and agree that, as of
the date hereof, the Agreement remains in full force and effect, is binding upon
us and enforceable against us in accordance with its terms, and we certify to
you that, as of the date hereof, there exists no Event of Default under said
Agreement or even which, with the passage of time or the giving of notice, or
both, would so constitute an Event of Default. We hereby restate and renew each
and every representation and warranty made by us in the Agreement in connection
therewith, effective as of the date hereof.

 

TravelCenters of America LLC

 

 

 

 

 

 

 

 

 

 

 

 

By:

John R. Hoadley

 

 

Title:

Executive Vice President and CFO

 

 

 

4

--------------------------------------------------------------------------------

 

Schedule 1

 

COMMITMENTS

 

Lender

 

Commitment

 

 

 

 

 

Wachovia Capital Finance Corporation (Central)

 

$

25,000,000

 

 

 

 

 

National City Business Credit, Inc.

 

$

25,000,000

 

 

 

 

 

Bank of America, N.A.

 

$

15,000,000

 

 

 

 

 

U.S. Bank National Association

 

$

10,000,000

 

 

 

 

 

UBS Loan Finance LLC

 

$

15,000,000

 

 

 

 

 

Royal Bank of Canada

 

$

10,000,000

 

 

 

 

 

Total

 

$

100,000,000

 

 

--------------------------------------------------------------------------------

 

 

Schedule 1.18

 

Excluded Capital Leases

 

Pursuant to FAS 198, the subleases at the following sites are technically
considered capital leases:

 

AL

Montgomery

FL

Baldwin

FL

Jacksonville

GA

Jackson

GA

Lake Park

IN

Clayton

IN

Porter

NV

Las Vegas

NV

Sparks

TN

Denmark

TN

Knoxville

TX

Denton

TX

Sweetwater

 

--------------------------------------------------------------------------------

 

Schedule 1.66

 

Excluded Subsidiaries

 

TA Franchise Systems LLC

TA Travel, L.L.C.

3073000 Nova Scotia Company

TravelCentres Canada Inc.

TravelCentres Canada LP

The TravelCenters of America Foundation

 

--------------------------------------------------------------------------------

 

Schedule 1.117

 

Petro Existing Letters of Credit

 

Number

 

Beneficiary

 

Issue Date

 

Expiration
Date

 

Renewal

 

Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS511055

 

City of Laramie (WY)

 

2/9/2004

 

11/1/2008

 

Automatic 1 year periods; 60 day prior cancellation notice

 

$

284,701.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS511053

 

Com’l. Fueling Network

 

2/9/2004

 

2/9/2008

 

Automatic 1 year periods; 60 day prior cancellation notice

 

$

10,000.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS511050

 

Nolin Electric Co-Operative

 

2/9/2004

 

2/14/2008

 

Automatic 1 year periods; 30 day prior cancellation notice

 

$

3,400.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS510844

 

Liberty Mutual Ins. Co.

 

2/9/2004

 

2/9/2008

 

Automatic 1 year periods; 30 day prior cancellation notice

 

$

6,525,000.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS511052

 

Travelers Indemnity Co.

 

2/9/2004

 

2/9/2008

 

Automatic 1 year periods; 90 day prior cancellation notice

 

$

281,000.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS511051

 

State of Louisiana, Worker’s Comp. Admin.

 

2/9/2004

 

2/9/2008

 

Automatic 1 year periods; 30 day prior cancellation notice

 

$

300,000.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS511054

 

RLI Insurance Company

 

2/9/2004

 

2/9/2008

 

Automatic 1 year periods; 40 day prior cancellation notice

 

$

442,000.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS514788

 

Comptroller of Public Accounts

 

3/26/2004

 

3/25/2008

 

Automatic 1 year periods; 30 day prior cancellation notice

 

$

30,000.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS514790

 

Comptroller of Public Accounts

 

3/26/2004

 

3/25/2008

 

Automatic 1 year periods; 30 day prior cancellation notice

 

$

30,000.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS516165

 

State of Nevada Department of Taxation

 

4/14/2004

 

4/14/2008

 

Automatic 1 year periods; 60 day prior cancellation notice

 

$

107,122.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS517446

 

State of Nevada Department of Motor Vehicles

 

4/30/2004

 

4/2/2008

 

Automatic 1 year periods; 30 day prior cancellation notice

 

$

2,722,500.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS545091

 

Florida Dept. of Revenue

 

5/26/2005

 

5/26/2008

 

Automatic 1 year periods; 120 day prior cancellation notice

 

$

200,000.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS564760

 

New York State Electric & Gas Corp.

 

2/15/2006

 

2/15/2008

 

Automatic 1 year periods; 60 day prior cancellation notice

 

$

46,785.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS571882

 

Missouri Dept. of Revenue

 

5/19/2006

 

5/19/2008

 

Automatic 1 year periods; 60 day prior cancellation notice

 

$

184,000.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS569192

 

Pennsylvania Dept. of Revenue

 

5/31/2006

 

8/31/2008

 

Automatic 1 year periods; 60 day prior cancellation notice

 

$

1,000,000.00

 

 

 

 

 

 

 

 

 

 

 

 

 

NZS578920

 

Illinois Department of Revenue

 

8/28/2006

 

8/28/2008

 

Automatic 1 year periods; 30 day prior cancellation notice

 

$

621,000.00

 

 

--------------------------------------------------------------------------------

 

Schedule 8.16

 

Credit Card Agreements

 

Comdata Network, Inc., d/b/a Comdata Corporation

 

Name of Agreement:

 

Master Agreement Comdata Merchant Services

 

 

 

Date of Agreement:

 

January 3, 2006

 

 

 

Names of Parties to the Agreement:

 

Comdata Network, Inc d/b/a Comdata Corporation

TA Operating LLC (successor by conversion to TA Operating Corp.) d/b/a
TravelCenters of America

 

First Data/CTS Holdings, LLC (f/k/a Concord EFS National Bank)

 

Name of Agreement:

 

Concord EFS National Bank Authorization, Settlement and Payment Merchant
Agreement

 

 

 

Date of Agreement:

 

August 1, 2003

 

 

 

Names of Parties to the Agreement:

 

Concord EFS National Bank

TA Operating LLC (successor by conversion to TA Operating Corp.) d/b/a
TravelCenters of America

 

 

 

Amendment:

 

EFSNET Addendum of the Authorization, Settlement and Payment Merchant Agreement

 

 

 

Date:

 

February 10, 2005

 

 

 

Names of Parties:

 

CTS Holdings, LLC

JP Morgan Chase Bank

TA Operating LLC (successor by conversion to TA Operating Corp.) d/b/a
TravelCenters of America

 

 

 

Amendment:

 

Amendment No. 2 of the Authorization, Settle- ment and Payment Merchant
Agreement

 

 

 

Date:

 

January 11, 2007

 

 

 

Names of Parties:

 

CTS Holdings, LLC

Citicorp Payment Services, Inc.

TA Operating LLC (successor by conversion to TA Operating Corp.) d/b/a
TravelCenters of America

 

--------------------------------------------------------------------------------

 

EFS Transportation Services, Inc.

 

Name of Agreement:

 

EFS Truck Stop Master Operating Policies and Procedures Contract

 

 

 

Date of Agreement:

 

January 1, 2002

 

 

 

Names of Parties to the Agreement:

 

EFS Transportation Services Inc.

TA Operating LLC (successor by conversion to TA Operating Corp.) d/b/a
TravelCenters of America

 

BP/Amoco

 

Name of Agreement:

 

Branded Jobber Contract (Retail)

 

 

 

Date of Agreement:

 

March 30, 2004

 

 

 

Names of Parties to the Agreement:

 

BP Products North America Inc.

TA Operating LLC (successor by conversion to TA Operating Corp.) d/b/a
TravelCenters of America

 

 

 

Attachment:

 

Attachment A to Branded Jobber Contract (Retail) - Products, Quantities,
Approved Retail Sites and Jobber’s Designated Terminals

 

 

 

Date:

 

March 16, 2004

 

 

 

Names of Parties:

 

Amoco Oil Company

BP Exploration & Oil, Inc.

TA Operating LLC (successor by conversion to TA Operating Corp.) d/b/a
TravelCenters of America

 

 

 

Attachment:

 

Attachment A-1 to Branded Jobber Contract (Retail) - Annual Minimum Volumes

 

 

 

Date:

 

March 30, 2004

 

 

 

Names of Parties:

 

BP Products North America Inc.

TA Operating LLC (successor by conversion to TA Operating Corp.) d/b/a
TravelCenters of America

 

 

 

Attachment:

 

Trade Signage Agreement (Jobber)

 

 

 

Date:

 

March 30, 2004

 

 

 

Names of Parties:

 

BP Products North America Inc.

TA Operating LLC (successor by conversion to TA Operating Corp.) d/b/a
TravelCenters of America

 

--------------------------------------------------------------------------------

 

American Express Travel Related Services Company, Inc.

 

Name of Agreement:

 

Agreement for American Express Card Acceptance

 

 

 

Date of Agreement:

 

July 1, 2003

 

 

 

Names of Parties to the Agreement:

 

American Express Travel Related Services Company, Inc.

TA Operating LLC (successor by conversion to TA Operating Corp.)

 

TransPlatinum/FleetOne

 

Name of Agreement:

 

FleetOne Merchant Services Agreement

 

 

 

Date of Agreement:

 

September 1, 2002

 

 

 

Names of Parties to the Agreement:

 

FleetOne, L.L.C. subsidiary of TransPlatinum Service Corp.

TravelCenters of America LLC

 

 

 

Attachment:

 

Schedule “A” FleetOne Merchant Services Agreement - Transaction Services and
Fees Settlement

 

 

 

Date:

 

September 1, 2002

 

 

 

Names of Parties:

 

FleetOne, L.L.C. subsidiary of TransPlatinum Service Corp.

TravelCenters of America LLC

 

 

 

Attachment:

 

Schedule “B” FleetOne Merchant Services Agreement - Marketing Fee Rebate

 

 

 

Date:

 

September 1, 2002

 

 

 

Names of Parties:

 

FleetOne, L.L.C. subsidiary of TransPlatinum Service Corp.

TravelCenters of America LLC

 

--------------------------------------------------------------------------------

 

Wright Express

 

Name of Agreement:

 

Wright Express Charge Card Agreement

 

 

 

Date of Agreement:

 

December 16, 2003

 

 

 

Names of Parties to the Agreement:

 

Wright Express LLC

Wright Express Financial Services Corporation

TA Operating LLC (successor by conversion to TA Operating Corp.) d/b/a
TravelCenters of America

 

 

 

Amendment:

 

Wright Express Charge Card Agreement – Retail Acceptance Amendment

 

 

 

Date:

 

June 25, 2004

 

 

 

Names of Parties:

 

Wright Express LLC

Wright Express Financial Services Corporation

TA Operating LLC (successor by conversion to TA Operating Corp.) d/b/a
TravelCenters of America

 

Discover Financial Services LLC

 

Name of Agreement:

 

Merchant Services Agreement

 

 

 

Date of Agreement:

 

July 14, 2006

 

 

 

Names of Parties to the Agreement:

 

Discover Financial Services LLC

TA Operating LLC

 

--------------------------------------------------------------------------------