Exhibit 10.1

EXECUTION COPY

 

 

 

CREDIT AGREEMENT

among

SPRAGUE OPERATING RESOURCES LLC,

as Borrower,

and

The Several Lenders

from time to time Parties Hereto,

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent,

and

JPMORGAN CHASE BANK, N.A.

and BNP PARIBAS,

as Co-Collateral Agents

and

NATIXIS

RBS CITIZENS, N.A.,

and WELLS FARGO BANK, N.A.

as Co-Syndication Agents

and

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK

NEDERLAND”, NEW YORK BRANCH,

STANDARD CHARTERED BANK

and SOCIÉTÉ GÉNÉRALE,

as Co-Documentation Agents

Dated as of October 30, 2013

J.P. MORGAN SECURITIES LLC,

BNP PARIBAS,

NATIXIS,

RBS CITIZENS, N.A.,

and WELLS FARGO SECURITIES, LLC,

as Joint Lead Arrangers and Joint Bookrunners

 

 

 

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TABLE OF CONTENTS

 

         Page  

SECTION 1

  DEFINITIONS      1   

1.1

  Defined Terms      1   

1.2

  Other Definitional Provisions      56   

1.3

  Rounding      57   

SECTION 2

  AMOUNT AND TERMS OF THE LOANS AND COMMITMENTS      57   

2.1

  Working Capital Facility Loans      57   

2.2

  [Reserved]      58   

2.3

  Swing Line Loans      58   

2.4

  Acquisition Facility Loans      58   

2.5

  Procedure for Borrowing Loans      58   

2.6

  Refunding of Swing Line Loans      60   

2.7

  [Reserved]      61   

2.8

  Commitment Fee      61   

SECTION 3

  LETTERS OF CREDIT      61   

3.1

  Working Capital Facility Letters of Credit      61   

3.2

  Acquisition Facility Letters of Credit      62   

3.3

  Procedure for the Issuance and Amendments of Letters of Credit      62   

3.4

  General Terms of Letters of Credit      63   

3.5

  Fees, Commissions and Other Charges      65   

3.6

  L/C Participations      66   

3.7

  Reimbursement Obligations of the Borrower      67   

3.8

  Obligations Absolute      68   

3.9

  Role of the Issuing Lenders      68   

3.10

  Letter of Credit Request      69   

SECTION 4

  GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT      69   

4.1

  Increase, Termination or Reduction of Commitments      69   

4.2

  Interest Rates and Payment Dates      71   

4.3

  Conversion and Continuation Options      72   

4.4

  Minimum Amounts of Tranches; Maximum Number of Tranches      72   

4.5

  Repayment of Loans; Evidence of Debt      73   

4.6

  Optional Prepayments      73   

4.7

  Mandatory Prepayments      74   

4.8

  Computation of Interest and Fees      75   

4.9

  Pro Rata Treatment and Payments      76   

4.10

  Requirements of Law      77   

4.11

  Taxes      78   

4.12

  Lending Offices      81   

4.13

  Credit Utilization Reporting      82   

4.14

  Indemnity      82   

4.15

  Inability to Determine Interest Rate      82   

4.16

  Illegality      83   

4.17

  Replacement of Lenders      83   

4.18

  Defaulting Lender      84   

 

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SECTION 5

  REPRESENTATIONS AND WARRANTIES      86   

5.1

  Financial Condition      86   

5.2

  No Change      87   

5.3

  Existence; Compliance with Law      87   

5.4

  Power; Authorization; Enforceable Obligations      87   

5.5

  No Legal Bar      87   

5.6

  No Material Litigation      88   

5.7

  No Default      88   

5.8

  Ownership of Property; Liens      88   

5.9

  Intellectual Property      88   

5.10

  No Burdensome Restrictions      88   

5.11

  Taxes      88   

5.12

  Federal Regulations      89   

5.13

  ERISA      89   

5.14

  Investment Company Act; Other Regulations      90   

5.15

  Subsidiaries      90   

5.16

  Security Documents      90   

5.17

  Accuracy and Completeness of Information      90   

5.18

  Labor Relations      91   

5.19

  Insurance      91   

5.20

  Solvency      91   

5.21

  Use of Letters of Credit and Proceeds of Loans      92   

5.22

  Environmental Matters      92   

5.23

  Risk Management Policy      93   

5.24

  AML Laws      93   

SECTION 6

  CONDITIONS PRECEDENT      94   

6.1

  Conditions Precedent      94   

6.2

  Conditions to Each Credit Extension      101   

SECTION 7

  AFFIRMATIVE COVENANTS      103   

7.1

  Financial Statements      103   

7.2

  Certificates; Other Information      105   

7.3

  Payment of Obligations      106   

7.4

  Conduct of Business and Maintenance of Existence      106   

7.5

  Maintenance of Property; Insurance      106   

7.6

  Inspection of Property; Books and Records; Discussions      107   

7.7

  Notices      107   

7.8

  Environmental Laws      108   

7.9

  Periodic Audit of Borrowing Base Assets      108   

7.10

  Risk Management Policy      109   

7.11

  Collections of Accounts Receivable      109   

7.12

  Taxes      109   

7.13

  Additional Collateral; Further Actions      109   

7.14

  Use of Proceeds      111   

7.15

  Cash Management      112   

7.16

  New Business Valuations of Approved Acquisition Assets      112   

7.17

  [Reserved]      112   

7.18

  AML Laws      112   

 

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SECTION 8

  NEGATIVE COVENANTS      112   

8.1

  Financial Condition Covenants      112   

8.2

  Limitation on Indebtedness      113   

8.3

  Limitation on Liens      114   

8.4

  Limitation on Fundamental Changes      116   

8.5

  Restricted Payments      116   

8.6

  Limitation on Sale of Assets      117   

8.7

  Limitation on Capital Expenditures      118   

8.8

  Limitation on Investments, Loans and Advances      118   

8.9

  Limitation on Payments or Modifications of Junior Debt Instruments      119   

8.10

  Limitation on Transactions with Affiliates      119   

8.11

  Accounting Changes      120   

8.12

  Limitation on Negative Pledge Clauses      120   

8.13

  Limitation on Lines of Business      121   

8.14

  Governing Documents      121   

8.15

  Limitations on Clauses Restricting Subsidiary Distributions      121   

SECTION 9

  EVENTS OF DEFAULT      122   

9.1

  Events of Default      122   

SECTION 10

  THE AGENTS      125   

10.1

  Appointment      125   

10.2

  Delegation of Duties      125   

10.3

  Exculpatory Provisions      125   

10.4

  Reliance by Agents      126   

10.5

  Notice of Default      126   

10.6

  Non-Reliance on Agents and Other Lenders      126   

10.7

  Indemnification      127   

10.8

  Agents in Their Individual Capacity      127   

10.9

  Successor Agents      127   

10.10

  Collateral Matters      128   

10.11

  The Co-Collateral Agents; Co-Documentation Agents and the Co-Syndication
Agents      129   

SECTION 11

  MISCELLANEOUS      129   

11.1

  Amendments and Waivers      129   

11.2

  Notices      131   

11.3

  No Waiver; Cumulative Remedies      132   

11.4

  Survival of Representations and Warranties      133   

11.5

  Release of Collateral and Guarantee Obligations      133   

11.6

  Payment of Costs and Expenses      133   

11.7

  Successors and Assigns; Participations and Assignments      134   

11.8

  Adjustments; Set-off      138   

11.9

  Counterparts      139   

11.10

  Severability      139   

11.11

  Integration      139   

11.12

  Governing Law      139   

11.13

  Submission to Jurisdiction      139   

11.14

  Acknowledgements      140   

11.15

  Waivers of Jury Trial      140   

11.16

  Confidentiality      140   

11.17

  Specified Laws      141   

11.18

  [Reserved]      141   

11.19

  Additional Borrowers      141   

11.20

  Joint and Several Liability      143   

11.21

  Contribution and Indemnification among the Borrower; Subordination      144   

11.22

  Express Waivers by Borrower Parties in Respect of Cross Guaranties and Cross
Collateralization.      144   

11.23

  Limitation on Obligations of Borrower Parties      145   

 

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SCHEDULES     

Schedule 1.0

  Lenders, Commitments, and Applicable Lending Offices   

Schedule 1.1(A)

  Approved Inventory Locations   

Schedule 1.1(B)

  Cash Management Banks   

Schedule 1.1(C)

  Eligible Foreign Counterparties   

Schedule 1.1(D)

  Independent Entity Schedule   

Schedule 1.1 (E)

  Mortgaged Property   

Schedule 2.2

  Wire Instructions for Working Capital Facility Loans and Swing Line Loans   

Schedule 3.1

  Existing Working Capital Facility Letters of Credit   

Schedule 3.2

  Existing Acquisition Facility Letters of Credit   

Schedule 5.1(c)

  Liabilities   

Schedule 5.1(f)

  Acquisitions   

Schedule 5.4

  Consents and Authorizations   

Schedule 5.9

  Intellectual Property   

Schedule 5.15

  Subsidiaries   

Schedule 5.16

  Filing Jurisdictions   

Schedule 5.19

  Insurance   

Schedule 5.22

  Environmental Matters   

Schedule 8.2

  Existing Indebtedness   

Schedule 8.3

  Existing Liens   

Schedule 8.8

  Investments   

Schedule 8.10

  Transactions with Affiliates   

EXHIBITS

    

Exhibit A-1

  Form of Working Capital Facility Note   

Exhibit A-2

  Form of Swing Line Note   

Exhibit A-3

  Form of Acquisition Facility Note   

Exhibit B

  Form of Security Agreement   

Exhibit C

  Form of Pledge Agreement   

Exhibit D-1

  Form of Section 4.11 Certificate (For Non-U.S. Lenders That Are Not
Partnerships)   

Exhibit D-2

  Form of Section 4.11 Certificate (For Non-U.S. Participants That Are Not
Partnerships)   

Exhibit D-3

  Form of Section 4.11 Certificate (For Non-U.S. Participants That Are
Partnerships)   

Exhibit D-4

  Form of Section 4.11 Certificate (For Non-U.S. Lenders That Are Partnerships)
  

Exhibit E

  Form of Secretary’s Certificate   

Exhibit F

  Form of Assignment and Acceptance   

Exhibit G

  Form of Borrowing Base Report   

Exhibit H-1

  Form of Intercompany Subordination Agreement   

Exhibit H-2

  Form of Axel Johnson Subordination Agreement   

Exhibit I

  Risk Management Policy   

Exhibit J

  [Reserved]   

Exhibit K

  Cash Collateral Documentation   

Exhibit L

  Form of Mortgage and Security Agreement   

Exhibit M

  Form of Position Report   

Exhibit N

  Form of Guarantee   

 

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Exhibit O

  Form of Compliance Certificate   

Exhibit P

  Form of Increase and New Lender Agreement   

Exhibit Q

  Form of Perfection Certificate   

Exhibit R

  Form of Marked-to-Market Report   

Exhibit S

  Form of Borrower’s Certificate   

Exhibit T

  Form of Hedging Agreement Qualification Notification   

Exhibit U

  Form of Joinder Agreement   

Exhibit V

  Form of Solvency Certificate   

ANNEXES

    

Annex I

  Form of Borrowing Notice   

Annex II

  Form of Continuation/Conversion Notice   

Annex III

  Form of Notice of Prepayment   

Annex IV

  Form of Credit Utilization Summary   

 

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CREDIT AGREEMENT

CREDIT AGREEMENT, dated as of October 30, 2013, among SPRAGUE OPERATING
RESOURCES LLC, a Delaware limited liability company (the “Borrower”), the
several banks and other financial institutions or entities from time to time
parties to this Agreement, as lenders (the “Lenders”), JPMORGAN CHASE BANK,
N.A., (“JPMorgan Chase Bank”), as administrative agent (together with any
successor Administrative Agent appointed pursuant to Section 10.9, in such
capacity the “Administrative Agent”), JPMORGAN CHASE BANK and BNP PARIBAS (“BNP
Paribas”), as Co-Collateral agents (together with any successor Co-Collateral
Agent appointed pursuant to Section 10.9, in such capacities the “Co-Collateral
Agents”), NATIXIS, RBS CITIZENS, N.A. and WELLS FARGO BANK, N.A. , as
co-syndication agents (in such capacities, the “Co-Syndication Agents”) and THE
BANK OF TOKYO-MITSUBISHI UFJ, LTD., COÖPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK NEDERLAND”, NEW YORK BRANCH, STANDARD
CHARTERED BANK and SOCIÉTÉ GÉNÉRALE, as co-documentation agents (in such
capacities, the “Co-Documentation Agents”).

The parties hereto hereby agree as follows:

SECTION 1 DEFINITIONS

1.1 Defined Terms. As used in this Agreement, the following terms shall have the
following meanings:

“Acceptable Investment Grade Credit Enhancement”: with respect to any Account
Receivable, (i) a letter of credit in form and substance reasonably acceptable
to the Administrative Agent issued by a bank which is Investment Grade and which
letter of credit does not terminate earlier than fifteen (15) days after the
expected payment date of such Account Receivable; provided, that, upon the
request of the Administrative Agent during the continuance of an Event of
Default, with respect to each letter of credit described in this clause (i), the
applicable Loan Party shall (A) assign the proceeds of such letter of credit to
the Administrative Agent, (B) cause the issuing bank of such letter of credit to
consent to such assignment and (C) cause any such letter of credit issued to be
advised by the Administrative Agent, or (ii) a parent guarantee, insurance
policy, surety bond or other customary credit support, in each case,
(A) provided by any Person who is Investment Grade and (B) in form and substance
reasonably acceptable to the Administrative Agent.

“Account”: as defined in Section 9-102 of the New York Uniform Commercial Code.

“Account Control Agreements”: with respect to any Deposit Account, Commodity
Account or Securities Account of a Loan Party (other than Excluded Accounts), an
account control agreement in form and substance reasonably acceptable to the
applicable Loan Party and the Administrative Agent.

“Account Debtor”: a Person who is obligated to a Loan Party under an Account
Receivable or Exchange Receivable of such Loan Party.

“Account Receivable”: an Account or Payment Intangible of a Loan Party.

“Acquisition”: as to any Person, the acquisition by such Person of (a) Capital
Stock of any other Person if, after giving effect to the acquisition of such
Capital Stock, such other Person would be a Subsidiary, (b) all or substantially
all of the assets of any other Person or (c) assets constituting one or more
business units of any other Person.

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“Acquisition Assets”: all assets of the Loan Parties (other than Exempt CFCs or
any Subsidiaries thereof) other than (a) assets included in the Borrowing Base
and (b) Excluded Assets (as defined in the Security Agreement); provided that no
such asset shall be an Acquisition Asset unless it is subject to a Perfected
First Lien and is free and clear of all Liens other than Liens permitted
hereunder.

“Acquisition Facility”: the Acquisition Facility Commitments and the extensions
of credit thereunder.

“Acquisition Facility Acquisition Extensions of Credit”: at any date, as to any
Acquisition Facility Lender, that portion of the Acquisition Facility Extensions
of Credit that are not Acquisition Facility Working Capital Extensions of
Credit.

“Acquisition Facility Acquisition Letter of Credit”: each Acquisition Facility
Letter of Credit that is an Acquisition Facility Acquisition Extension of
Credit.

“Acquisition Facility Acquisition Loan”: each Acquisition Facility Loan that is
an Acquisition Facility Acquisition Extension of Credit.

“Acquisition Facility Commitment”: at any date, as to any Acquisition Facility
Lender, the obligation of such Acquisition Facility Lender to make Acquisition
Facility Loans to the Borrower pursuant to Section 2.4 and to participate in
Acquisition Facility Letters of Credit in an aggregate principal and/or face
amount at any one time outstanding not to exceed the amount set forth opposite
such Acquisition Facility Lender’s name on Schedule 1.0 under the caption
“Acquisition Facility Commitment” or, as the case may be, in the Assignment and
Acceptance pursuant to which such Acquisition Facility Lender becomes a party
hereto, as such amount may be changed from time to time in accordance with the
terms of this Agreement. As of the Closing Date, the original aggregate amount
of the Acquisition Facility Commitments is $250,000,000.

“Acquisition Facility Commitment Percentage”: as to any Acquisition Facility
Lender at any time, the percentage which such Acquisition Facility Lender’s
Acquisition Facility Commitment then constitutes of the aggregate Acquisition
Facility Commitments of all Acquisition Facility Lenders at such time (or, at
any time after the Acquisition Facility Commitments shall have expired or
terminated, such Acquisition Facility Lender’s Acquisition Facility Credit
Exposure Percentage).

“Acquisition Facility Commitment Period”: the period from and including the
Closing Date to but not including the Acquisition Facility Commitment
Termination Date or such earlier date on which all of the Acquisition Facility
Commitments shall terminate as provided herein.

“Acquisition Facility Commitment Termination Date”: the date that is the fifth
anniversary of the Closing Date, or, if such date is not a Business Day, the
next preceding Business Day.

“Acquisition Facility Credit Exposure”: as to any Acquisition Facility Lender at
any time, the Available Acquisition Facility Commitment of such Acquisition
Facility Lender plus, the amount of the Acquisition Facility Extensions of
Credit of such Acquisition Facility Lender.

“Acquisition Facility Credit Exposure Percentage”: as to any Acquisition
Facility Lender at any time, the fraction (expressed as a percentage), the
numerator of which is the Acquisition Facility Credit Exposure of such
Acquisition Facility Lender at such time and the denominator of which is the
aggregate Acquisition Facility Credit Exposures of all of the Acquisition
Facility Lenders at such time.

 

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“Acquisition Facility Extensions of Credit”: at any date, as to any Acquisition
Facility Lender at any time, an amount equal to the aggregate principal amount
of Acquisition Facility Loans made by such Acquisition Facility Lender plus the
amount of the undivided interest of such Acquisition Facility Lender (based on
such Acquisition Facility Lenders’ Acquisition Facility Credit Exposure
Percentage) in any then-outstanding Acquisition Facility L/C Obligations.

“Acquisition Facility Increase”: as defined in Section 4.1(b).

“Acquisition Facility Issuing Lenders”: JPMorgan Chase Bank, N.A., BNP Paribas,
Societe Generale, Natixis, New York Branch and each other Acquisition Facility
Lender from time to time designated by the Borrower (and agreed to by such
Lender) as an Acquisition Facility Issuing Lender with the prior consent of the
Administrative Agent (such consent not to be unreasonably withheld, conditioned
or delayed), each in its capacity as issuer of any Acquisition Facility Letter
of Credit.

“Acquisition Facility L/C Obligations”: at any time, an amount equal to the sum
of (a) the aggregate then undrawn and unexpired amount of the then outstanding
Acquisition Facility Letters of Credit and (b) the aggregate amount of drawings
under Acquisition Facility Letters of Credit which have not then been reimbursed
or converted to an Acquisition Facility Loan pursuant to Section 3.7.

“Acquisition Facility L/C Participants”: with respect to any Acquisition
Facility Letter of Credit, all of the Acquisition Facility Lenders other than
the Acquisition Facility Issuing Lender thereof.

“Acquisition Facility L/C Participation Obligations”: the obligations of the
Acquisition Facility L/C Participants to purchase participations in the
obligations of the Acquisition Facility Issuing Lenders under outstanding
Acquisition Facility Letters of Credit pursuant to Section 3.6.

“Acquisition Facility Lender”: each Lender having an Acquisition Facility
Commitment (or, after the termination of the Acquisition Facility Commitments,
each Lender holding Acquisition Facility Extensions of Credit), and, as the
context requires, includes the Acquisition Facility Issuing Lenders. As of the
Closing Date, each Acquisition Facility Lender is specified on Schedule 1.0.

“Acquisition Facility Letter of Credit”: as defined in Section 3.2.

“Acquisition Facility Letter of Credit Sub-Limit”: $50,000,000 at any time
outstanding.

“Acquisition Facility Loans”: as defined in Section 2.4(a).

“Acquisition Facility Maintenance Cap-Ex Extensions of Credit”: Acquisition
Facility Loans and Acquisition Facility Letters of Credit which are used to
finance Capital Expenditures for the maintenance of existing assets or property
of the Loan Parties, as designated by the Borrower in good faith.

“Acquisition Facility Maintenance Cap-Ex Sub-Limit”: $25,000,000 during any
Fiscal Year.

“Acquisition Facility Maturity Date”: with respect to any Acquisition Facility
Loan, the earliest to occur of (i) the date on which the Acquisition Facility
Loans become due and payable pursuant to Section 9, (ii) the date on which the
Acquisition Facility Commitments terminate pursuant to Section 4.1 and (iii) the
Acquisition Facility Commitment Termination Date.

 

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“Acquisition Facility Working Capital Availability Time”: any time during the
period commencing on August 1 of any year and ending on March 31 of the next
year when the aggregate Available Working Capital Facility Commitments is $0.

“Acquisition Facility Working Capital Extensions of Credit”: Acquisition
Facility Loans and Acquisition Facility Letters of Credit which are used for
general working capital purposes, including to finance assets included in the
Borrowing Base.

“Acquisition Facility Working Capital Letter of Credit”: each Acquisition
Facility Letter of Credit that is an Acquisition Facility Working Capital
Extension of Credit.

“Acquisition Facility Working Capital Loan”: each Acquisition Facility Loan that
is an Acquisition Facility Working Capital Extension of Credit.

“Acquisition Facility Working Capital Sub-Limit”: an amount at the time of the
incurrence of any Acquisition Facility Working Capital Extension of Credit equal
to (a) at any time when an Acquisition Facility Working Capital Availability
Time is in effect, the lesser of (i) the Borrowing Base Availability and
(ii) the Available Acquisition Facility Commitment, and (b) at any time other
than when an Acquisition Facility Working Capital Availability Time is in
effect, $0.

“Additional Borrower”: as defined in Section 11.19.

“Additional Borrower Collateral Risk Review”: as defined in Section 11.19.

“Administrative Agent”: as defined in the introductory paragraph of this
Agreement.

“Affiliate”: as to any Person, any other Person (other than a Subsidiary) which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, “control” of a
Person (including, with its correlative meanings, “controlled by” and “under
common control with”) means the power, directly or indirectly, either to
(a) vote 25% or more of the securities having ordinary voting power for the
election of directors (or, if such Person is not a corporation, similar
governing Persons) of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.

“Agent-Related Person”: as defined in Section 10.3.

“Agents”: the Administrative Agent and the Co-Collateral Agents, and “Agent”
means each of them, as the context requires.

“Aggregate Eligible In the Money Forward Contract Amount”: the aggregate of all
Eligible In the Money Forward Contract Amounts with respect to all Forward
Contract Counterparties.

“Agreement”: this Credit Agreement.

“Allowed Reserve”: with respect to any Fiscal Year, an amount equal to the
transportation and hedged storage gains or losses arising under contracts in
place that the Borrower and the Guarantors have elected to defer for use in
calculations hereunder, which shall be reflected in the Borrower’s and the
Guarantors’ Reconciliation Summary.

“AML Laws”: as defined in Section 5.24.

 

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“Annual Budget”: the annual budget of the MLP and its consolidated Subsidiaries
which encompasses, among other things, environmental matters, in form and
substance satisfactory to the Administrative Agent, as updated from time to time
pursuant to Section 7.1(d).

“Applicable Commitment Fee Rate”: on any day,

(a) with respect to the Working Capital Facility, the rate per annum set forth
in the table below as the Applicable Commitment Fee Rate opposite the applicable
Working Capital Facility Utilization for the immediately preceding fiscal
quarter.

 

Working Capital

Facility Utilization

   Applicable
Commitment
Fee Rate  

Category 1:

³ 75%

     0.50 % 

Category 2:

< 75%

     0.375 % 

(b) with respect to the Acquisition Facility, the rate per annum set forth in
the table below as the Applicable Commitment Fee Rate opposite the applicable
Consolidated Total Leverage Ratio for the immediately preceding fiscal quarter.

 

Consolidated Total

Leverage Ratio

   Applicable
Commitment
Fee Rate  

Category 1:

³ 3.0:1.0

     0.50 % 

Category 2:

< 3.0:1.0

     0.375 % 

For purposes of the foregoing, (i) the Applicable Commitment Fee Rate shall be
determined as of the end of each fiscal quarter of the Borrower, and (A) in the
case of any determination of the Applicable Commitment Fee Rate based on Working
Capital Facility Utilization, shall be based on the Borrowing Base Reports that
are delivered from time to time pursuant to Section 7.2 and (B) in the case of
any determination of the Applicable Commitment Fee Rate based on the
Consolidated Total Leverage Ratio, based upon those monthly consolidated
financial statements of the Borrower that are delivered after the end of each
fiscal quarter pursuant to Section 7.1(c) and (ii) each change in the Applicable
Commitment Fee Rate resulting from a change in the Consolidated Total Leverage
Ratio shall be effective during the period commencing on and including the date
of delivery to the Administrative Agent of such consolidated financial
statements indicating such change and ending on the date immediately preceding
the effective date of the next such change, provided that (x) subject to clause
(y) below, the Applicable Commitment Fee Rate determined pursuant to clause
(a) shall be deemed to be Category 2 until the delivery pursuant to Section 7.2
of the first Borrowing Base Report delivered after the end of the first fiscal
quarter ending after the Closing Date (it being understood that the first
determination of the Applicable Commitment Fee Rate pursuant to clause (a) in
accordance with this clause (x) shall be calculated with respect to Working
Capital Facility Utilization for the portion of the preceding fiscal quarter
ended on and after the Closing Date) and the Applicable Commitment Fee Rate
determined

 

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pursuant to clause (b) shall be deemed to be Category 2 until the delivery
pursuant to Section 7.1(c) of the first financial statements after the end of
the first fiscal quarter ending after the Closing Date and (y) the Applicable
Commitment Fee Rate determined pursuant to each of clauses (a) and (b) shall be
deemed to be in Category 1 (A) at any time that an Event of Default has occurred
and is continuing or (B) at the option of the Administrative Agent or at the
request of the Required Lenders if the Borrower fails to deliver the
consolidated financial statements required to be delivered by it pursuant to
Section 7.1(c) or any Borrowing Base Report required to be delivered by it
pursuant to Section 7.2, during the period from the expiration of the time for
delivery thereof specified in Section 7.1 or Section 7.2, as applicable, until
such consolidated financial statements or Borrowing Base Report, as applicable,
are delivered.

“Applicable L/C Fee Rate”: on any day,

(a) with respect to each Working Capital Facility Letter of Credit, the rate per
annum set forth in the table below for such Working Capital Facility Letter of
Credit opposite the applicable Working Capital Facility Utilization for the
immediately preceding fiscal quarter.

 

Working Capital

Facility Utilization

   Applicable L/C Fee
Rate
(Trade Letters of
Credit – Working
Capital Facility)     Applicable L/C Fee
Rate
(Performance
Letters of Credit –
Working Capital
Facility)  

Category 1:

³ 75%

     2.50 %      2.50 % 

Category 2:

< 75% but > 40%

     2.25 %      2.25 % 

Category 3:

< 40%

     2.00 %      2.00 % 

(b) with respect to any Acquisition Facility Letter of Credit, the rate per
annum set forth in the table below for such Acquisition Facility Letter of
Credit opposite the applicable Consolidated Total Leverage Ratio for the
immediately preceding fiscal quarter.

 

Consolidated Total

Leverage Ratio

   Applicable L/C Fee
Rate
(Acquisition Facility
Letters of Credit)  

Category 1:

³ 3.0:1.0

     3.25 % 

Category 2:

< 3.0:1.0 and > 2.0:1.0

     3.125 % 

Category 3:

< 2.0:1.0

     3.00 % 

 

6

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For purposes of the foregoing, (i) the Applicable L/C Fee Rate shall be
determined as of the end of each fiscal quarter of the Borrower, and (A) in the
case of any determination of the Applicable L/C Fee Rate based on Working
Capital Facility Utilization, shall be based on the Borrowing Base Reports that
are delivered from time to time pursuant to Section 7.2 and (B) in the case of
any determination of the Applicable L/C Fee Rate based on the Consolidated Total
Leverage Ratio, based upon those monthly consolidated financial statements of
the Borrower that are delivered after the end of each fiscal quarter pursuant to
Section 7.1(c) and (ii) each change in the Applicable L/C Fee Rate resulting
from a change in the Consolidated Total Leverage Ratio shall be effective during
the period commencing on and including the date of delivery to the
Administrative Agent of such consolidated financial statements indicating such
change and ending on the date immediately preceding the effective date of the
next such change, provided that (x) subject to clause (y) below, the Applicable
L/C Fee Rate determined pursuant to clause (a) shall be deemed to be Category 2
until the delivery pursuant to Section 7.2 of the first Borrowing Base Report
delivered after the end of the first fiscal quarter ending after the Closing
Date (it being understood that the first determination of the Applicable L/C Fee
Rate pursuant to clause (a) in accordance with this clause (x) shall be
calculated with respect to Working Capital Facility Utilization for the portion
of the preceding fiscal quarter ended on and after the Closing Date) and the
Applicable L/C Fee Rate determined pursuant to clause (b) shall be deemed to be
Category 2 until the delivery pursuant to Section 7.1(c) of the first financial
statements after the end of the first fiscal quarter ending after the Closing
Date and (y) the Applicable L/C Fee Rate determined pursuant to each of clauses
(a) and (b) shall be deemed to be in Category 1 (A) at any time that an Event of
Default has occurred and is continuing or (B) at the option of the
Administrative Agent or at the request of the Required Lenders if the Borrower
fails to deliver the consolidated financial statements required to be delivered
by it pursuant to Section 7.1(c) or any Borrowing Base Report required to be
delivered by it pursuant to Section 7.2, during the period from the expiration
of the time for delivery thereof specified in Section 7.1 or Section 7.2, as
applicable, until such consolidated financial statements or Borrowing Base
Report, as applicable, are delivered.

“Applicable Lending Office”: for each Lender and for each Type of Loan, and/or
participation in any Reimbursement Obligation, the lending office of such Lender
designated on Schedule 1.0 (or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto) for such Type of
Loan and/or participation in any Reimbursement Obligation (or any other lending
office from time to time notified to the Administrative Agent by such Lender) as
the office at which its Loans and/or participation in any Reimbursement
Obligation of such Type are to be made and maintained.

“Applicable Margin”: on any date:

(a) on any day with respect to each Working Capital Facility Loan or Swing Line
Loan, the rate per annum set forth in the table below for such Loans opposite
the applicable Working Capital Facility Utilization for the immediately
preceding fiscal quarter.

 

7

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Working Capital

Facility Utilization

   Applicable Margin
(Base Rate Loans)     Applicable Margin
(Eurodollar Loans)  

Category 1:

³ 75%

     1.50 %      2.50 % 

Category 2:

<75% but > 40%

     1.25 %      2.25 % 

Category 3:

< 40%

     1.00 %      2.00 % 

(b) on any day with respect to any Acquisition Facility Loan, the rate per annum
set forth in the table below opposite the applicable Consolidated Total Leverage
Ratio for the immediately preceding fiscal quarter.

 

Consolidated Total

Leverage Ratio

   Applicable
Margin
(Base Rate Loans)     Applicable Margin
(Eurodollar Loans)  

Category 1:

³ 3.0:1.0

     2.25 %      3.25 % 

Category 2:

<3.0:1.0 and > 2.0:1.0

     2.125 %      3.125 % 

Category 3:

< 2.0:1.0

     2.00 %      3.00 % 

For purposes of the foregoing, (i) the Applicable Margin shall be determined as
of the end of each fiscal quarter of the Borrower (A) in the case of any
determination of the Applicable Margin based on Working Capital Facility
Utilization shall be based on the Borrowing Base Reports that are delivered from
time to time pursuant to Section 7.2 and (B) in the case of any determination of
the Applicable Margin based on the Consolidated Total Leverage Ratio shall be
based upon those monthly consolidated financial statements of the Borrower that
are delivered after the end of each fiscal quarter pursuant to Section 7.1(c)
and (ii) each change in the Applicable Margin resulting from a change in the
Consolidated Total Leverage Ratio shall be effective during the period
commencing on and including the date of delivery to the Administrative Agent of
such consolidated financial statements indicating such change and ending on the
date immediately preceding the effective date of the next such change, provided
that (x) subject to clause (y) below, the Applicable Margin determined pursuant
to clause (a) shall be deemed to be Category 2 until the delivery pursuant to
Section 7.2 of the first Borrowing Base Report delivered after the end of the
first fiscal quarter ending after the Closing Date (it being understood that the
first determination of the Applicable Margin pursuant to clause (a) in
accordance with this clause (x) shall be calculated with respect to Working
Capital Facility Utilization for the portion of the preceding fiscal quarter
ended on and after the Closing Date) and the Applicable Margin determined
pursuant to clause (b) shall be deemed to be Category 2 until the delivery
pursuant to Section 7.1(c) of the first financial statements after the end of
the first fiscal quarter ending after the Closing Date and (y) the Applicable
Margin determined pursuant to each of clauses (a) and (b) shall be deemed to be
in Category 1 (A) at any time that an Event of Default has occurred and is
continuing or (B) at the option of the Administrative Agent or at the request of
the Required Lenders if the Borrower fails to deliver the consolidated financial

 

8

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statements required to be delivered by it pursuant to Section 7.1(c) or any
Borrowing Base Report required to be delivered by it pursuant to Section 7.2,
during the period from the expiration of the time for delivery thereof specified
in Section 7.1 or Section 7.2, as applicable, until such consolidated financial
statements or Borrowing Base Report, as applicable, are delivered.

“Applicable Sub-Limit”: each of the following:

(a) [reserved];

(b) with respect to Working Capital Facility Non-Maintenance Cap-Ex Extensions
of Credit, the Working Capital Facility Non-Maintenance Cap-Ex Sub-Limit;

(c) with respect to Swing Line Loans, the Swing Line Loan Sub-Limit;

(d) with respect to Working Capital Facility Letters of Credit, the Working
Capital Facility Letter of Credit Sub-Limit;

(e) with respect to Working Capital Facility Performance Letters of Credit, the
Performance Letter of Credit Sub-Limit;

(f) with respect to Working Capital Facility Long Tenor Letters of Credit, the
Long Tenor Letter of Credit Sub-Limit;

(g) with respect to Acquisition Facility Letters of Credit, the Acquisition
Facility Letter of Credit Sub-Limit;

(h) with respect to Acquisition Facility Working Capital Extensions of Credit,
the Acquisition Facility Working Capital Sub-Limit; and

(i) with respect to Acquisition Facility Maintenance Cap-Ex Extensions of
Credit, the Acquisition Facility Maintenance Cap-Ex Sub-Limit.

“Approved Acquisition Assets”: each Acquisition Asset for which the
Administrative Agent has received a Business Valuation meeting the requirements
of the definition therefor; provided that no such asset shall be an Approved
Acquisition Asset unless it is subject to a Perfected First Lien and is free and
clear of all Liens other than Liens permitted hereunder.

“Approved Fund”: (a) with respect to any Lender, any Bank CLO of such Lender,
and (b) with respect to any Lender that is a fund that invests in commercial
loans and similar extensions of credit, any other fund that invests in
commercial loans and similar extensions of credit and is managed by the same
investment advisor as such Lender or by an Affiliate or Subsidiary of such
investment advisor.

“Approved Inventory Location”: (a) any pipeline or storage facility owned by any
Loan Party and (b) any other pipeline, third-party carrier or third party
storage facility that (i) within forty-five (45) days after the Closing Date,
has been sent notice of the Administrative Agent’s Perfected First Lien on the
inventory owned by any Loan Party located in or at such pipeline, third party
carrier or third party storage facility in accordance with the Security
Agreement, and (ii) (A) is identified on Schedule 1.1(A) (the “Approved
Inventory Location Schedule”) or (B) has been approved by the Administrative
Agent, in its sole discretion (exercised in good faith), from time to time after
the Closing Date, unless in each case, the status of such pipeline, third party
carrier or third party storage facility as an Approved Inventory Location has
been revoked upon ten (10) Business Days’ notice to the Borrower from the
Administrative Agent, acting in its reasonable discretion. The Approved
Inventory Location Schedule shall be deemed amended to include such Approved
Inventory Locations without further action immediately upon the Administrative
Agent’s approval.

 

9

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“Arrangers”: the Lead Arranger, BNP Paribas, Natixis, RBS Citizens, N.A. and
Wells Fargo Securities, LLC.

“Asset Sale”: any conveyance, sale, lease, sub-lease, assignment, transfer or
other disposition of property or series of related sales, leases or other
dispositions of property (excluding any such sale, lease or other disposition
permitted by Section 8.6) which yields Net Cash Proceeds to the Borrower or any
other Loan Party (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of
$5,000,000.

“Assignee”: as defined in Section 11.7(c).

“Assignment and Acceptance”: as defined in Section 11.7(c).

“Assignment of Claims Act”: the Federal Assignment of Claims Act of 1940 (31
U.S.C. §3727 et seq.) and any similar state or local laws, together with all
rules, regulations, interpretations and binding court decisions related thereto.

“Auto-Renewal Letter of Credit”: as defined in Section 3.4(c).

“Availability Certification”: as defined in Section 6.2(e)(vii).

“Available Acquisition Facility Commitment”: as to any Acquisition Facility
Lender at any time, an amount equal to the excess, if any, of (i) the amount of
such Acquisition Facility Lender’s Acquisition Facility Commitment at such time
over (ii) such Acquisition Facility Lender’s Acquisition Facility Extensions of
Credit outstanding at such time; provided, that such amount shall never be less
than zero.

“Available Commitment”: at any time as to any Lender, the Available Working
Capital Facility Commitment or the Available Acquisition Facility Commitment of
such Lender at such time, or both, as the context requires.

“Available Working Capital Facility Commitment”: as to any Working Capital
Facility Lender at any time, an amount equal to the excess, if any, of (i) the
amount of such Working Capital Facility Lender’s Working Capital Facility
Commitment at such time over (ii) such Working Capital Facility Lender’s Working
Capital Facility Extensions of Credit outstanding at such time; provided, that
such amount shall never be less than zero; provided further that solely for
purposes of determining fees pursuant to Section 2.8, the amount of outstanding
Working Capital Facility Extensions of Credit consisting of Swing Line Loans
shall be deemed to be zero.

“Axel Johnson Affiliate”: any Person that is directly or indirectly in control
of, controlled by, or under common control with, Axel Johnson Inc., excluding
any Loan Party and any other Person with respect to whom any Loan Party has the
power, directly or indirectly to (x) vote any of the securities having ordinary
voting power for the election of directors (or, if such Person is not a
corporation, similar governing Persons) of such Person or (y) direct or cause
the direction of the management and policies of such Person, whether by contract
or otherwise. For purposes of this definition, “control” of a Person (including,
with its correlative meanings, “controlled by” and “under common control with”)
means the

 

10

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power, directly or indirectly, either to (a) vote more than 50% of the
securities having ordinary voting power for the election of directors (or, if
such Person is not a corporation, similar governing Persons) of such Person or
(b) direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise.

“Axel Johnson Subordinated Indebtedness”: with respect to any Loan Party,
unsecured Indebtedness owed by such Loan Party to any Axel Johnson Affiliate
that is subject to a subordination agreement substantially in the form of
Exhibit H-2, which such form provides that there shall be no restriction as to
the incurrence of such Indebtedness by any Loan Party, or the interest rate or
stated maturity applicable thereto, or, except as provided in Section 8.9, as to
the repayment of such Indebtedness.

“Bank CLO”: as to any Lender, any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the ordinary
course of its business and is administered or managed by such Lender or an
Affiliate or Subsidiary of such Lender.

“Bankruptcy Code”: Title 11 of the United States Code (11 U.S.C. § 101 et seq.).
“Barrel”: forty-two U.S. gallons.

“Base Rate”: for any day, the rate per annum equal to the greatest of (a) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1.00%, (b) the
Prime Rate in effect on such day (rounded upward, if necessary, to the next 1/16
of 1.00%) and (c) the one-month Eurodollar Rate in effect on such day plus
1.00%. For purposes hereof: “Prime Rate” shall mean the rate of interest per
annum publicly announced from time to time by JPMorgan Chase Bank as its prime
rate in effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by JPMorgan Chase Bank
in connection with extensions of credit to debtors). Any change in the Base Rate
due to a change in the Prime Rate, the Federal Funds Effective Rate or the
Eurodollar Rate shall be effective as of the opening of business on the day such
change in the Prime Rate, the Federal Funds Effective Rate or the Eurodollar
Rate becomes effective, respectively.

“Base Rate Loans”: Loans the rate of interest of which is based upon a Base
Rate.

“Benefited Lender”: as defined in Section 11.8(a).

“BNP Paribas”: as defined in the introductory paragraph of this Agreement.

“Board”: the Board of Governors of the Federal Reserve System of the United
States (or any successor).

“Borrower Materials”: as defined in Section 11.2.

“Borrower”: as defined in the introductory paragraph of this Agreement.

“Borrower Parties”: collectively, the Borrower and any Additional Borrowers.

“Borrowing Base”: on any date, solely with respect to the assets of the Loan
Parties, an amount equal to:

(i) 100% of Eligible Cash and Cash Equivalents; plus

 

11

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(ii) 90% of Eligible Tier 1 Accounts Receivable; plus

(iii) 85% of Eligible Unbilled Tier 1 Accounts Receivable; plus

(iv) 85% of Eligible Tier 2 Accounts Receivable; plus

(v) 80% of Eligible Unbilled Tier 2 Accounts Receivable; plus

(vi) 85% of Eligible Hedged Petroleum Inventory; plus

(vii) 80% of Eligible Petroleum Inventory; plus

(viii) 85% of Eligible Hedged Natural Gas Inventory; plus

(ix) 80% of Eligible Natural Gas Inventory; plus

(x) 70% of Eligible Coal Inventory; plus

(xi) 70% of Eligible Asphalt Inventory; plus

(xii) 75% of Prepaid Purchases; plus

(xiii) 85% of Eligible Net Liquidity in Futures Accounts; plus

(xiv) 80% of Eligible Exchange Receivables; plus

(xv) 80% of Eligible Short Term Unrealized Forward Gains; plus

(xvi) 70% of Eligible Medium Term Unrealized Forward Gains; plus

(xvii) 60% of Eligible Long Term Unrealized Forward Gains; plus

(xviii) 80% of Eligible Letters of Credit Issued for Commodities Not Yet
Received; plus

(xix) 100% of Paid But Unexpired Letters of Credit; plus

(xx) 70% of Eligible RINs; less

(1) 100% of the First Purchaser Lien Amount; less

(2) 100% of Product Taxes; less

(3) 110% of any Swap Amounts due to Qualified Counterparties solely to the
extent, and if, such Swap Amounts due to Qualified Counterparties are in excess
of $20,000,000; less

(4) 100% of the Overcollateralization Amount.

Any amounts described in categories (i) through (xx) and (1) through (4) above
which may fall into more than one of such categories shall be counted only once
under the category with the highest applicable advance rate percentage, when
making the calculation under this definition. In addition, any deductions

 

12

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made from the value of any asset included in the Borrowing Base in respect of
counterparty contra, offsets, counterclaims, unrealized forward losses and any
other similar charges or claims shall be without duplication. In calculating the
Borrowing Base, the following adjustments shall be made:

(A) the value of Accounts Receivable to be included in clauses (ii) through
(v) shall not exceed $30,000,000 in the aggregate for the following two
categories of Accounts Receivable and $15,000,000 individually for each of the
following two categories of Accounts Receivable: (i) Accounts Receivable the
Account Debtor of which is any Kildair Entity, and (ii) Accounts Receivables the
Account Debtors of which are Eligible Foreign Counterparties;

(B) (i) the value of that portion of the Borrowing Base described in clauses
(xv) through (xvii) shall not exceed (1) in the aggregate, the lesser of (a) 40%
of the Borrowing Base then in effect and (b) $250,000,000, (2) $175,000,000 from
Forward Contracts relating to Petroleum Products, or (3) $75,000,000 from
Forward Contracts relating to Natural Gas Products and (ii) the value of that
portion of the Borrowing Base described in clause (xvii) shall not exceed
$10,000,000;

(C) any category of the Borrowing Base shall be calculated taking into account
any elimination and reduction related to any potential offset to such asset
category;

(D) the Co-Collateral Agents may, in their reasonable discretion, determine that
one or more assets described in clauses (ii), (iii), (iv), (v), (xiv), (xv),
(xvi), (xvii) or (xx) does not meet the eligibility requirements for inclusion
in the Borrowing Base, and any such assets shall not be included in the
Borrowing Base;

(E) notwithstanding anything herein to the contrary, no asset shall be eligible
in whole or in part for inclusion in the Borrowing Base to the extent such asset
is in violation of the Risk Management Policy;

(F) the calculation of the value of the assets included in clauses (ii), (iii),
(iv), (v) and (xiii) with respect to a counterparty shall be net of any Out of
the Money Forward Contract Amount attributable to such counterparty (for
purposes of this clause (F), any reference to a counterparty shall include all
Subsidiaries and Affiliates of such counterparty which affiliation is known or
should be known by the Loan Parties, except for a counterparty that holds itself
out as an independent credit and separate legal entity with respect to its
Subsidiaries and Affiliates, together with such counterparty’s independent
Subsidiaries and Affiliates, and is listed on the Independent Entity Schedule);

(G) the calculation of the value of the assets included in clauses (ii), (iii),
(iv), (v), (xii), (xiv), (xv), (xvi) and (xvii) that are attributable to a
single counterparty shall be netted against any contra, offset, counterclaim,
unrealized forward losses or obligations of the Loan Parties with such
counterparty including amounts payable to such counterparty (for purposes of
this clause (G), any reference to a counterparty shall include all Subsidiaries
and Affiliates of such counterparty which affiliation is known or should be
known by the Loan Parties, except for a counterparty that holds itself out as an
independent credit and separate legal entity with respect to its Subsidiaries
and Affiliates, together with such counterparty’s independent Subsidiaries and
Affiliates, and is listed on the Independent Entity Schedule);

 

13

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(H) the value of that portion of the Borrowing Base described in clause
(xviii) relating to Letters of Credit for the transportation of Eligible
Commodities shall not exceed $10,000,000; and

(I) the value of that portion of the Borrowing Base described in clause
(xx) shall not exceed $10,000,000.

The value of the Borrowing Base at any time shall be the value of the Borrowing
Base as of the applicable Borrowing Base Date.

“Borrowing Base Availability”: at any time, an amount equal to the Borrowing
Base at such time minus the Total Working Capital Facility Extensions of Credit
at such time minus the Total Acquisition Facility Working Capital Extensions of
Credit.

“Borrowing Base Date”: the most recent date as of which the Borrower has based a
Borrowing Base Report to be delivered by the Borrower pursuant to
Section 7.2(c).

“Borrowing Base Report”: with respect to the Borrowing Base, a report certified
by a Responsible Person of the Borrower, substantially in the form of Exhibit G,
with appropriate insertions and schedules, showing the Borrowing Base as of the
date set forth therein and the basis on which it was calculated, together with
the following detailed supporting information:

(i) for Eligible Cash and Cash Equivalents, a statement as of the applicable
Borrowing Base Date of the account balance, issued by each Cash Management Bank;

(ii) for Eligible Tier 1 Accounts Receivable, Eligible Tier 2 Accounts
Receivable, Eligible Unbilled Tier 1 Accounts Receivable, and Eligible Tier 2
Unbilled Accounts Receivable,

(A) a schedule listing each Account Receivable which is supported by a letter of
credit, together with the amount of such Account Receivable, the Account Debtor
of such Account Receivable, the issuing bank, the applicant and the expiration
date of the related letter of credit, the terms of the auto-renewal provision,
if any, and the face amount of the related letter of credit (or, if applicable,
the maximum value of the related letter of credit after giving effect to any
tolerance included therein, and the amount of such tolerance);

(B) a schedule of each Eligible Account Receivable and Eligible Unbilled Account
Receivable, listing the counterparty thereof, and each of the offsets and
deductions to the amount of such Eligible Account Receivable or Eligible
Unbilled Account Receivable, as applicable, including, if applicable, (1) the
contra account balance thereof, (2) any offset or counterclaim resulting from
trade liabilities, (3) the net marked-to-market net-off calculation of any
losses applied to the Account Debtor after deduction for all margin monies
received and/or paid and the details of any related letters of credit described
in clause (A) above, (4) any Out of the Money Forward Contract Amounts applied
thereto pursuant to clause (F) of the definition of “Borrowing Base”) and
(5) any adjustments described in the definitions of Borrowing Base, to the
extent applicable; and

 

14

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(C) with respect to each Eligible Account Receivable, other than Eligible
Unbilled Accounts Receivable, to the extent applicable, an aging report in form
and substance satisfactory to the Co-Collateral Agents;

(iii) for Eligible Inventory, a schedule of (A) inventory locations, (B) Market
Value and inventory volumes by location and type of Eligible Commodity, (C) if
requested by the Co-Collateral Agents, in the case of Eligible Hedged Petroleum
Inventory and Eligible Hedged Natural Gas Inventory, evidence of the hedge as
demonstrated to the reasonable satisfaction of the Co-Collateral Agents in the
Position Report delivered concurrently with the applicable Borrowing Base
Report, (D) each of the offsets and deductions used in determining the value of
the Eligible Inventory, including any exchange payable or other offsets and any
adjustments described in the definitions of Borrowing Base, to the extent
applicable, (E) except to the extent covered by clause (F) or clause (G) below,
available supporting documentation for the inventory volumes as of such
Borrowing Base Date, (F) within thirty (30) days after each Borrowing Base Date
with respect to a calendar month (provided that the Borrower shall use best
efforts to provide within thirty (30) days following receipt therefor a
Borrowing Base Report requested by the Co-Collateral Agents), a volume
difference reconciliation comparing the inventory volumes reflected in the
Borrower’s accounting records with the Borrower’s third party statements,
together with a copy of such statements (provided, that a copy of such third
party statements shall not be required with respect to any storage site not
owned or operated by the Borrower or any of its Affiliates where less than 5,000
Barrels of Eligible Petroleum Inventory is held) and (G) within thirty (30) days
after each Borrowing Base Date that occurs on the last day of March, June,
September and December of each year, if requested by the Co-Collateral Agents,
inventory and field reports supplied by 25% of the terminals owned by the Loan
Parties (so that, in one calendar year, reports with respect to each terminal
owned by any Loan Party shall have been delivered);

(iv) for Eligible Net Liquidity in Futures Accounts, copies of summary account
statements (or if requested by the Co-Collateral Agents, the full account
statements) issued by the Eligible Broker where such assets are held as of the
applicable Borrowing Base Date together with additional statements for each
commodities futures account that account for any (x) discounted face value of
any U.S. Treasury Securities held in such account that are zero coupon
securities issued by the United States of America and (y) unearned interest on
such U.S. Treasury Securities;

(v) for Eligible Exchange Receivables, (A) a schedule of each Eligible Exchange
Receivable, the counterparty thereof, the time outstanding and each of the
offsets and deductions to the amount of such Eligible Exchange Receivable used
in determining the value of Eligible Exchange Receivables, including any contra
account balance thereof and, if applicable, any Out of the Money Forward
Contract Amounts applied thereto pursuant to clause (F) of the definition of
“Borrowing Base” and any other adjustments described in the definitions of
Borrowing Base, to the extent applicable, and (B) to the extent applicable,
information described in clause (ii)(A) above;

(vi) for the Eligible Short Term Unrealized Forward Gains, Eligible Medium Term
Unrealized Forward Gains and Eligible Long Term Unrealized Forward Gains, a
summary schedule thereof listing:

 

15

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(A) the Marked-to-Market Value and the date of the final cash or physical
settlement of each Forward Contract;

(B) the aggregate amount of each of the offsets and deductions to the
Marked-to-Market Value of such Forward Contracts included in the calculation of
the Counterparty Forward Contract Amount with respect to a Forward Contract
Counterparty, including, to the extent applicable, the aggregate contra account
balance of such Forward Contract Counterparty (and the calculation of such
contra balance), all margin monies received and/or paid with respect to such
Forward Contracts and the details of any related letters of credit and any
adjustments described in the definitions of Borrowing Base, to the extent
applicable; and

(C) the Counterparty Forward Contract Amount for each Forward Contract
Counterparty;

(vii) for Eligible Letters of Credit Issued for Commodities Not Yet Received,
(A) a schedule listing each Letter of Credit giving rise to Eligible Letters of
Credit Issued for Commodities Not Yet Received, together with the name of the
applicant, the expiration date of the related Letter of Credit and the face
value thereof (or, if applicable, the maximum value of such Letter of Credit
after giving effect to any tolerance included therein, and the amount of such
tolerance), (B) a calculation supporting the value of physical volume delivered
and the liability owed by the Borrower to the beneficiary of the Letter of
Credit in connection therewith versus the face amount of such Letters of Credit,
and (C) a schedule of each of the offsets and deductions used in determining the
value of Eligible Letters of Credit Issued for Commodities Not Yet Received,
including the amounts and a calculation, by type (i.e., mark-to-market loss,
exchange payables and other type of liability owed), supporting the value of any
other liabilities owed by the Borrower to the beneficiary of the Letter of
Credit versus the face amount of such Letters of Credit and any adjustments
described in the definitions of Borrowing Base, to the extent applicable;

(viii) for Paid but Unexpired Letters of Credit, (A) a schedule listing each
Letter of Credit giving rise to Paid but Unexpired Letters of Credit, together
with the name of the applicant, the expiration date of the related Letter of
Credit and the face value thereof (or, if applicable, the maximum value of such
Letter of Credit after giving effect to any tolerance included therein, and the
amount of such tolerance), (B) a statement describing the existing liabilities
that may be satisfied with such Letter of Credit and the amount therefor, (C) a
schedule of any payments made by the Borrower to satisfy the obligations for
which such Letter of Credit was issued, (D) a schedule of the underlying
“operational tolerance” with respect to any such Trade Letter of Credit (if
applicable) and (E) a schedule of each of the offsets and deductions used in
determining the value of Paid but Unexpired Letters of Credit, including the
amounts and a calculation, by type (i.e. mark-to-market loss, exchange payables
and other type of liability owed), supporting the value of any other liabilities
owed by the Borrower to the beneficiary of the Letter of Credit versus the face
amount of such Letters of Credit and any adjustments described in the
definitions of Borrowing Base, to the extent applicable;

(ix) for Eligible RINS, a schedule summarizing the value of the RINs inventory
available for sale, including the total RINs volume separated by fuel category.
For each fuel category the RINs volumes and values for each RINs year for which
there is inventory also will be shown;

 

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(x) for the First Purchaser Lien Amount, a schedule setting forth the holder of
each First Purchaser Lien, the amount of the obligations outstanding giving rise
to the First Purchaser Lien Amount to such holder, each of the offsets and
deductions to the amount of such obligations used in determining the First
Purchaser Lien Amount, including the portion thereof reduced by any Letter of
Credit, and any adjustments described in the definitions of Borrowing Base, to
the extent applicable;

(xi) for Product Taxes, a schedule listing the amounts of each tax liability by
taxing authority, the description thereof and the period(s) for which such taxes
were assessed;

(xii) for Swap Amounts due to Qualified Counterparties, a schedule listing the
aggregate net unrealized gains or losses with respect to each Commodity OTC
Agreement with a Qualified Counterparty and each Financial Hedging Agreement
with a Qualified Counterparty (whether or not the Swap Amounts due to Qualified
Counterparties is equal to or in excess of $20,000,000);

(xiii) a summary report showing the total amount outstanding under each type of
extension of credit made hereunder; and

(xiv) a summary of the Working Capital Facility Utilization for the period from
the immediately preceding Borrowing Base Date (or, in the case of the first
Borrowing Base Report, the Closing Date) to (but not including) the Borrowing
Base Date for such Borrowing Base Report.

“Borrowing Date”: any Business Day specified (i) in a Borrowing Notice as a date
on which a Loan requested by the Borrower is to be made or (ii) in a Letter of
Credit Request as a date on which a Letter of Credit requested by the Borrower
is to be issued, amended or renewed.

“Borrowing Notice”: as defined in Section 2.5(a).

“Brokerage Account Deducts”: as defined in the definition of “Eligible Net
Liquidity in Futures Accounts” in this Section 1.1.

“Business”: as defined in Section 5.22(b).

“Business Day”: (i) for all purposes other than as covered by clause (ii) of
this definition, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by Law to close,
and, (ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day as described in clause (i) of this definition and which is also a
day on which dealings in United States Dollar deposits are carried out in the
London interbank market.

“Business Valuation”: with respect to any Approved Acquisition Asset, a business
valuation commissioned by and addressed to the Administrative Agent and in form
and substance reasonably acceptable to the Administrative Agent (such acceptance
not to be unreasonably withheld, conditioned or delayed) and prepared by a
Valuation Agent.

 

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“Capital Expenditures”: for any period with respect to any Person, all
expenditures made by such Person during such period that, in accordance with
GAAP, should be classified as a capital expenditure.

“Capital Stock”: any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, all
membership interests in a limited liability company, all partnership interests
in a limited partnership, or any and all similar ownership interests in a Person
(other than a corporation, limited liability company or limited partnership) and
any and all warrants, rights or options to purchase any of the foregoing.

“Cash and Carry Transaction”: in respect of a particular commodity, all
transactions that occur during a Contango Market consisting of:

(a) the entering into of future or swap contracts for the purchase of such
commodity offset by the concurrent entering into of future or swap contracts for
the sale of the same quantity of such commodity for a later delivery date and a
maximum period not exceeding twelve (12) months; and/or

(b) the physical purchase by the Borrower or any other Loan Party of such
commodity which shall be stored for a period not exceeding twelve (12) months
from the date of delivery of such commodity to the Borrower or such Loan Party,
and the sale of which shall be Hedged by hedges that have a maximum tenor not
exceeding twelve (12) months; and/or

(c) any combination of the foregoing.

“Cash (100%) Collateralize”; “Cash (100%) Collateralized”: with respect to any
Letter of Credit, to pledge and deposit as collateral for the Obligations Cash
Collateral in an amount equal to 100% of the undrawn face amount of such Letter
of Credit plus unpaid fees associated with such Letter of Credit (including any
letter of credit commissions) then due and payable or to be owed with respect to
such Letter of Credit for the period from the time such Cash Collateral is
deposited as collateral until the expiration date of such Letter of Credit,
pursuant to documentation substantially in the form of Exhibit K or such other
substantially similar form reasonably satisfactory to the Administrative Agent.

“Cash Collateral”: with respect to any Letter of Credit, cash or deposit account
balances denominated in United States Dollars that have been pledged and
deposited with or delivered to the Administrative Agent for the ratable benefit
of the Secured Parties as collateral for the Obligations, including the
repayment of such Letter of Credit.

“Cash Collateralize”, “Cash Collateralized”, “Cash Collateralization”: with
respect to any Letter of Credit, to pledge and deposit as collateral for the
Obligations Cash Collateral in an amount equal to 105% of the undrawn face
amount of such Letter of Credit plus unpaid fees associated with such Letter of
Credit (including any letter of credit commissions) then due and payable or to
be owed with respect to such Letter of Credit for the period from the time such
Cash Collateral is deposited as collateral until the expiration date of such
Letter of Credit, pursuant to documentation substantially in the form of Exhibit
K or such other substantially similar form reasonably satisfactory to the
Administrative Agent.

“Cash Equivalents”: (a) securities with maturities of twelve (12) months or less
from the date of acquisition or acceptance which are issued or fully guaranteed
or insured by the United States, or any agency or instrumentality thereof,
(b) bankers’ acceptances, certificates of deposit and eurodollar time deposits
with maturities of nine (9) months or less from the date of acquisition and
overnight bank deposits, in each case, of any Lender or of any international or
national commercial bank with commercial paper rated, on the day of such
purchase, at least A-1 or the equivalent thereof by S&P or P-1

 

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or the equivalent thereof by Moody’s, (c) commercial paper, variable rate or
auction rate securities, or any other short term, liquid investment having a
rating, on the date of purchase, of at least A-1 or the equivalent thereof by
S&P or at least P-1 or the equivalent thereof by Moody’s and that matures or
resets not more than nine (9) months after the date of acquisition,
(d) obligations of any U.S. state or a division, public instrumentality or
taxing authority thereof, having on the date of purchase a rating of at least AA
or the equivalent thereof by S&P or at least Aa2 or the equivalent thereof by
Moody’s and (e) investments in money market funds, mutual funds or other pooled
investment vehicles, in each case acceptable to the Administrative Agent in its
sole discretion, the assets of which consist solely of the foregoing.

“Cash Management Account”: a Deposit Account or Securities Account maintained
with any Cash Management Bank.

“Cash Management Bank”: JPMorgan Chase Bank and each of the banks and other
financial institutions listed on Schedule 1.1(B) and any other bank or financial
institution (which is reasonably acceptable to the Administrative Agent) from
time to time designated by the Borrower as a bank or financial institution at
which the Borrower or any Guarantor or any of their Subsidiaries maintains any
Controlled Account.

“Cash Management Bank Agreement”: any account agreement, account control
agreement or other agreement governing the relationship between a Cash
Management Bank and the Borrower or Guarantor with respect to a Cash Management
Account.

“Change of Control”: the occurrence of any of the following events: (a) the
Permitted Investors shall cease to own and control, of record and beneficially,
directly or indirectly, more than 50% of the total voting power of all classes
of Capital Stock of the General Partner entitled to vote generally in the
election of directors free and clear of all Liens, other than Liens of the type
permitted pursuant to Section 8.3 (as if Section 8.3 were applicable), (b) the
General Partner shall cease to own and control, of record and beneficially, 100%
of the general partnership interests of the MLP free and clear of all Liens,
other than Liens of the type permitted pursuant to Section 8.3 (as if
Section 8.3 were applicable), or (c) the MLP shall cease to own and control, of
record and beneficially, directly or indirectly, 100% of each class of
outstanding Capital Stock of the Borrower and each other Guarantor (other than
the MLP) free and clear of all Liens, other than Liens permitted pursuant to
Section 8.3, provided that a Change of Control shall not occur as a result of
the exercise of remedies by the lenders under the Kildair Credit Agreement under
their respective security documents.

“Chapter 11 Debtor”: as defined in the definition of “Eligible Account
Receivable” in this Section 1.1.

“Closing Date”: the date on which the conditions precedent set forth in
Section 6.1 shall be satisfied or waived.

“Coal Products”: coal and any other product or by-product of the foregoing and
all rights to transmit, transport or store the foregoing.

“Code”: the Internal Revenue Code of 1986, as amended.

“Co-Collateral Agents”: as defined in the introductory paragraph of this
Agreement.

“Co-Documentation Agents”: as defined in the introductory paragraph of this
Agreement.

 

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“Co-Syndication Agents”: as defined in the introductory paragraph of this
Agreement.

“Collateral”: all property and interests in property of the Loan Parties now
owned or hereafter acquired, upon which a Lien is purported to be created by any
Security Document.

“Commitment”: at any date, as to any Lender, the Working Capital Facility
Commitments and/or the Acquisition Facility Commitments of such Lender, as the
context requires.

“Commitment Percentage”: at any time, as to any Lender, the Acquisition Facility
Commitment Percentage or the Working Capital Facility Commitment Percentage of
such Lender at such time, as the context requires.

“Commitment Period”: the Acquisition Facility Commitment Period or the Working
Capital Facility Commitment Period, as the context requires.

“Commitment Termination Date”: the Acquisition Facility Commitment Termination
Date or the Working Capital Facility Commitment Termination Date, as the context
requires.

“Commodity Account”: as defined in Section 9-102 of the New York Uniform
Commercial Code.

“Commodity Contract”: (a) a Physical Commodity Contract, (b) any Commodity OTC
Agreement or (c) a contract for the storage or transportation of any physical
Eligible Commodity.

“Commodity OTC Agreement”: (i) any forward commodity contracts (excluding any
Forward Contract which is a Physical Commodity Contract), swaps, options,
collars, caps, or floor transactions, in each case based on Eligible Commodities
and (ii) any other similar transaction (including any option to enter into any
of the foregoing) or any combination of the foregoing.

“Commonly Controlled Entity”: an entity, whether or not incorporated, which is
under common control with the Borrower within the meaning of Section 4001(a)(14)
of ERISA or is part of a group which includes the Borrower and which is treated
as a single employer under Section 414(b), (c), (m) or (o) of the Code.

“Compliance Certificate”: as defined in Section 7.2(b).

“Conduit Lender”: any special purpose entity organized and administered by any
Lender (or an affiliate of such Lender) for the purpose of making Loans required
to be made by such Lender or of funding such Lender’s participation in any
unpaid Reimbursement Obligation and designated as its Conduit Lender by such
Lender in a written instrument; provided, that the designation by any Lender of
a Conduit Lender shall not relieve the designating Lender of any of its
obligations to fund a Loan or a participation in any unpaid Reimbursement
Obligation under this Agreement if, for any reason, its Conduit Lender fails to
fund any such Loan or participation in any unpaid Reimbursement Obligation, and
the designating Lender (and not the Conduit Lender) shall have the sole right
and responsibility to deliver all consents and waivers required or requested
under this Agreement with respect to its Conduit Lender; provided, further, that
no Conduit Lender shall (a) be entitled to receive any greater amount pursuant
to Section 11.6 than the designating Lender would have been entitled to receive
in respect of the extensions of credit made by such Conduit Lender or (b) be
deemed to have any commitment hereunder.

“Confidential Information”: as defined in Section 11.16.

 

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“Consolidated Current Assets”: as of any date of determination, all assets of
the Loan Parties that, in accordance with GAAP adjusted on an Economic Basis,
would be classified as current assets on a consolidated balance sheet of the
Loan Parties; provided, that (i) amounts otherwise classified as current assets
which are due from any Affiliate (including shareholders (other than public
shareholders of the MLP)) or Subsidiary of any Loan Party shall not be
classified as current assets and (ii) notwithstanding clause (i) above,
“Consolidated Current Assets” may include amounts due from any Kildair Entity
under Eligible Kildair Transactions in an aggregate amount not to exceed
$15,000,000 for all Kildair Entities.

“Consolidated Current Liabilities”: as of any date of determination, all
liabilities of the Loan Parties that, in accordance with GAAP adjusted on an
Economic Basis, would be classified as current liabilities on a consolidated
balance sheet of the Loan Parties; provided that “Consolidated Current
Liabilities” shall (i) include (A) except to the extent excluded in clause
(ii) below, all Loans outstanding hereunder from time to time, and (B) the
current portion of all Indebtedness with a maturity (as of such date of
determination) of longer than one (1) year, and (ii) exclude any (A) Axel
Johnson Subordinated Indebtedness, (B) Intercompany Subordinated Indebtedness,
(C) unsecured Indebtedness permitted under Section 8.2(h) and (D) Acquisition
Facility Loans.

“Consolidated EBITDA”: for any period, Consolidated Net Income of the Loan
Parties for such period, plus, without duplication and to the extent used in
determining such Consolidated Net Income, the sum of:

(1) provisions for income taxes, interest expense, and depreciation and
amortization expense;

(2) amounts deducted in respect of other non-cash expenses;

(3) the amount of any aggregate net loss (or minus the amount of any gain)
arising from the Disposition of capital assets by such Person and its
Subsidiaries; and

(4) extraordinary, unusual or non-recurring losses and charges;

provided that (i) each of the foregoing items (1)-(4) shall be calculated in
accordance with GAAP adjusted on an Economic Basis and (ii) for the purposes of
this definition, (x) with respect to a business or assets acquired by the Loan
Parties pursuant to an Acquisition permitted under this Agreement (other than
the Motiva Bridgeport Acquisition), Consolidated EBITDA shall be calculated on a
pro forma basis, using historical numbers, in accordance with GAAP and such
calculation shall be determined in good faith by a financial officer of the
Borrower (and the Borrower will provide to the Administrative Agent such
supporting information as Administrative Agent may reasonably request), without
giving effect to any anticipated or proposed change in operations, revenues,
expenses or other items included in the computation of Consolidated EBITDA, and
in a manner which is reasonably satisfactory to the Administrative Agent in all
respects, adjusted on an Economic Basis plus or minus any Allowed Reserve, as if
the acquisition had been consummated on the first day of such period and
(y) with respect to the Motiva Bridgeport Acquisition, Consolidated EBITDA for
the fiscal quarters ending on or prior to September 30, 2013 (and for any period
including such fiscal quarters) shall be increased by the following amounts:
(i) $1,776,165, with respect to the fiscal quarter ending March 31, 2013,
(ii) $761,328, with respect to the fiscal quarter ending June 30, 2013 and
(iii) $223,608, with respect to the fiscal quarter ending September 30, 2013,
and provided, further, that for the purposes of this definition, with respect to
a business or assets disposed of by the Loan Parties pursuant to a disposition
permitted under this Agreement, Consolidated EBITDA shall be calculated on a pro
forma basis, using historical numbers, in accordance with GAAP and such
calculation shall be determined in good faith by a financial officer of the

 

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Borrower (and the Borrower will provide to the Administrative Agent such
supporting information as Administrative Agent may reasonably request), without
giving effect to any anticipated or proposed change in operations, revenues,
expenses or other items included in the computation of Consolidated EBITDA, and
in a manner which is reasonably satisfactory to the Administrative Agent in all
respects, as if such disposition had been consummated on the first day of such
period.

“Consolidated Fixed Charge Coverage Ratio”: for any period, the ratio of
Consolidated EBITDA to Consolidated Fixed Charges for such period.

“Consolidated Fixed Charges”: for any period with respect to the Loan Parties,
the sum (without duplication) of (i) the amounts deducted for the cash portion
of Consolidated Interest Expense in determining Consolidated Net Income for such
period, (ii) letter of credit fees to the extent paid in cash during such
period, and (iii) principal paid or payable during such period in respect of
Indebtedness (excluding (A) principal on any Loan, (B) principal on the Axel
Johnson Subordinated Indebtedness, (C) principal on any Intercompany
Subordinated Indebtedness, (D) principal on unsecured Indebtedness permitted
under Section 8.2(h) incurred for working capital purposes in an aggregate
outstanding amount (as of such date of determination) of $50,000,000 or less
with a maturity (as of such date of determination) of less than one (1) year
that is not a note (other than a promissory note evidencing commercial
Indebtedness), debenture, bond or other like obligation) of the Loan Parties and
(E) principal on any Indebtedness outstanding under a Contango Facility). For
purposes of the above calculation, (1) with respect to a business or assets
acquired by the Loan Parties pursuant to an Acquisition permitted under this
Agreement (other than the Motiva Bridgeport Acquisition), Consolidated Interest
Expense shall be calculated on a pro forma basis, using historical numbers, in
accordance with GAAP and such calculation shall be determined in good faith by a
financial officer of the Borrower (and the Borrower will provide to the
Administrative Agent such supporting information as Administrative Agent may
reasonably request), without giving effect to any anticipated or proposed change
in operations, revenues, expenses or other items included in the computation of
Consolidated Interest Expense, and in a manner which is reasonably satisfactory
to the Administrative Agent in all respects, as if the Indebtedness associated
with the Acquisition had been incurred on the first day of such period, (2) with
respect to the Motiva Bridgeport Acquisition, Consolidated Interest Expense
shall be increased for the fiscal quarters ending on or prior to September 30,
2013 (and for any period including such fiscal quarters) by the following
amounts: (i) $305,356, with respect to the fiscal quarter ending March 31, 2013,
(ii) $305,356, with respect to the fiscal quarter ending June 30, 2013 and
(iii) $101,785, with respect to the fiscal quarter ending September 30, 2013,
and (3) with respect to a business or assets disposed of by the Loan Parties
pursuant to a disposition permitted under this Agreement, Consolidated Interest
Expense shall be calculated on a pro forma basis, using historical numbers, in
accordance with GAAP and such calculation shall be determined in good faith by a
financial officer of the Borrower (and the Borrower will provide to the
Administrative Agent such supporting information as Administrative Agent may
reasonably request), without giving effect to any anticipated or proposed change
in operations, revenues, expenses or other items included in the computation of
Consolidated Interest Expense, and in a manner which is reasonably satisfactory
to the Administrative Agent in all respects, as if such disposition had been
consummated on the first day of such period.

“Consolidated Interest Expense”: for any period with respect to the Loan
Parties, the amount which, in conformity with GAAP adjusted on an Economic Bases
plus or minus any Allowed Reserve, as applicable, would be set forth opposite
the caption “interest expense” or any like caption (including imputed interest
included in payments under Financing Leases) on a consolidated income statement
of the Loan Parties for such period excluding the amortization of any original
issue discount; provided that “Consolidated Interest Expense” shall not include
interest expense with respect to the Maine Dock Liability Obligations or the
Office Building Obligations.

 

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“Consolidated Net Income”: for any period, the consolidated net income (or
deficit) of the Loan Parties for such period (taken as a cumulative whole)
determined in accordance with GAAP adjusted on an Economic Basis plus or minus
any Allowed Reserve, as applicable; provided that there shall be excluded
(a) the income (or deficit) of any Loan Party accrued prior to the date it
becomes a Loan Party or is merged into or consolidated with any Loan Party,
(b) any write-up of any fixed asset (other than write-ups as the result of the
application of purchase accounting), (c) any net gain from the collection of the
proceeds of life insurance policies, and (d) any gain arising from the
acquisition of any securities, or the extinguishment, under GAAP, of any
Indebtedness, of any Loan Party.

“Consolidated Net Working Capital”: as of any date of determination,
(a) Consolidated Current Assets as of such date minus (b) Consolidated Current
Liabilities as of such date.

“Consolidated Senior Secured Leverage Ratio”: as of any date of determination,
the ratio of (a) the aggregate outstanding principal amount of Indebtedness of
the Loan Parties secured by Liens on any assets of any Loan Party as of such
date minus the aggregate outstanding principal amount of Working Capital
Facility Loans and any Unreimbursed Amounts in respect of Working Capital
Facility Letters of Credit outstanding at such time to (b) Consolidated EBITDA
for the twelve (12) month period ending as of such date.

“Consolidated Total Leverage Ratio”: as of any date of determination, the ratio
of (a) the aggregate outstanding principal amount of Indebtedness (excluding any
(A) Axel Johnson Subordinated Indebtedness, (B) Intercompany Subordinated
Indebtedness or (C) unsecured Indebtedness permitted under Section 8.2(h)
incurred for working capital purposes in an aggregate outstanding amount (as of
such date of determination) of $50,000,000 or less with a maturity (as of such
date of determination) of less than one (1) year that is not a note (other than
a promissory note evidencing commercial Indebtedness), debenture, bond or other
like obligation) of the Loan Parties as of such date minus the aggregate
outstanding principal amount of Working Capital Facility Loans and any
Unreimbursed Amounts in respect of Working Capital Facility Letters of Credit
outstanding at such time to (b) Consolidated EBITDA for the twelve (12) month
period ending as of such date.

“Contango Facility”: a senior secured credit facility of any Loan Party solely
to be used to finance Cash and Carry Transactions, the recourse to such Loan
Party with respect to such credit facility Indebtedness is limited to its
interest in the inventory, forward contracts and receivables related to such
Cash and Carry Transactions (and the proceeds thereof); provided, that (a) any
release of Collateral hereunder for inclusion as collateral for the Contango
Facility has been approved by the Administrative Agent and the Supermajority
Lenders and (b) such facility is subject to an intercreditor agreement in form
and substance satisfactory to the Administrative Agent and the Supermajority
Lenders.

“Contango Market”: the market condition in which the price of a commodity for
forward delivery is higher than the price that is quoted for spot settlement, or
where a far forward delivery price is higher than a nearer forward delivery
price.

“Continuation/Conversion Notice”: as defined in Section 4.3(a)

“Continue”, “Continuation” and “Continued”: the continuation of a Eurodollar
Loan from one Interest Period to the next Interest Period.

“Contractual Obligation”: as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is bound.

 

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“Controlled Account”: each Pledged Account that is subject to an Account Control
Agreement.

“Convert”, “Conversion” and “Converted”: a conversion of Base Rate Loans into
Eurodollar Loans, or a conversion of Eurodollar Loans into Base Rate Loans,
which may be accompanied by the transfer by a Lender (at its sole discretion) of
a Loan from one Applicable Lending Office to another.

“Counterparty Forward Contract Amount”: with respect to any Forward Contract
Counterparty, an amount equal to (a) the aggregate Marked-to-Market Value of all
Eligible Forward Contracts of the Loan Parties with such Forward Contract
Counterparty with a positive value, net of (i) cash and Cash Equivalents held by
the Loan Parties from such Forward Contract Counterparty for such Eligible
Forward Contract and (ii) any claim of offset or other counterclaim known to the
Loan Parties to have been asserted in respect of those Eligible Forward
Contracts by such Forward Contract Counterparty, minus, (b) the aggregate
Marked-to-Market Value of all Forward Contracts of the Loan Parties with such
Forward Contract Counterparty with a negative value, net of cash and Cash
Equivalents posted by the Loan Parties with such Forward Contract Counterparty
for such Forward Contract.

“Credit Exposure”: as to any Lender at any time, the sum of its Acquisition
Facility Credit Exposure and its Working Capital Facility Credit Exposure.

“Credit Exposure Percentage”: as to any Lender at any time, the fraction
(expressed as a percentage), the numerator of which is the Credit Exposure of
such Lender at such time and the denominator of which is the aggregate Credit
Exposures of all of the Lenders at such time.

“Credit Utilization Summary”: as defined in Section 4.13.

“Default”: any of the events specified in Section 9.1, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Defaulting Lender”: at any time, any Lender that (a) within two (2) Business
Days of when due, has failed to fund any portion of any Working Capital Facility
Loan, Acquisition Facility Loan, Swing Line Loan, Refunded Swing Line Loan,
Swing Line Participation Amount or L/C Participation Obligation (or any
participation in the foregoing) to, as applicable, the Borrower, the
Administrative Agent, the Swing Line Lender or any Issuing Lender required
pursuant to the terms of this Agreement to be funded by such Lender, or has
notified the Administrative Agent that it does not intend to do so unless such
Lender notifies the Administrative Agent in writing that such failure is the
result of such Lender’s determination that one or more conditions precedent to
funding (each of which conditions precedent, together with any applicable
Default, shall be specifically identified in writing) has not been satisfied; or
(b) notified the Borrower, the Administrative Agent, any Issuing Lender, or any
Lender in writing that it does not intend to comply with any of its funding
obligations under this Agreement (unless such writing states that such position
is based on such Lender’s determination that a condition precedent to funding
(which condition precedent, together with any applicable Default, shall be
specifically identified in writing) cannot be satisfied) or has made a public
statement to the effect that it does not intend to comply with its funding
obligations under this Agreement or under other agreements generally in which it
commits to extend credit; or (c) failed, within three (3) Business Day after
request by the Administrative Agent or the Borrower, to confirm that it will
comply with the terms of this Agreement relating to any of its obligations to
fund prospective Working Capital Facility Loans, Acquisition Facility Loans,
Swing Line Loans, Refunded Swing Line Loans, Swing Line Participation Amounts or
L/C Participation Obligations; or (d) otherwise failed to pay over to the
Administrative Agent, any Issuing Lender, or any other Lender any other amount
required to be paid by it hereunder within one (1) Business Day of the

 

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date when due, unless the subject of a good faith dispute; or (e) (i) has become
or is insolvent or has a parent company that has become or is insolvent or
(ii) has become the subject of a bankruptcy or insolvency proceeding, or has had
a receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or has a parent company that
has become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment.

“Deposit Account”: as defined in Section 9-102 of the New York Uniform
Commercial Code.

“Disclosing Party”: as defined in Section 11.16(b).

“Disposition”: with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof; and
the terms “Dispose” and “Disposed of” shall have correlative meanings.

“Economic Basis”: means GAAP adjusted to include, as applicable and to the
extent not already included in the calculation of GAAP at such time, (a) the
positive Market Value of inventory and exchanges in respect of transactions that
do not qualify for hedging treatment under GAAP; (b) the positive or negative
Marked-to-Market Value of Forward Contracts, including, but not limited to,
forward physical purchase and sales contracts, that do not qualify as
derivatives under GAAP, such as storage and transportation; provided that the
preceding clause (b), with respect to storage and transportation contracts,
shall be limited to the intrinsic value of the underlying contracts, net of any
demand charges; and (c) other Marked-to-Market changes or adjustment as
determined by the Borrower with agreement from the Administrative Agent;
provided, that in its reasonable discretion the Administrative Agent may require
the vote of the Required Lenders.

“Eligible Account Receivable”: as of any Borrowing Base Date, an Account
Receivable as to which the following requirements have been fulfilled:

(a) such Account Receivable relates to a Materials Handling Contract, Commodity
Contract or Financial Hedging Agreement;

(b) the relevant Loan Party has lawful and absolute title to such Account
Receivable subject only to Permitted Borrowing Base Liens or Liens in favor of
the Administrative Agent for the benefit of the Secured Parties under the Loan
Documents; provided that the amount of the Eligible Account Receivable, if any,
included in the Borrowing Base shall be net of the aggregate amount secured by
such Permitted Borrowing Base Lien (other than Liens created by the Security
Documents);

(c) with respect to any such Account Receivable relating to a Financial Hedging
Agreement, the amount of such Account Receivable payable by the Account Debtor
thereof has been determined;

(d) such Account Receivable is a valid, legally enforceable obligation of the
party who is obligated under such Account Receivable;

(e) the amount of such Account Receivable included as an Eligible Account
Receivable shall have been reduced by any portion that is, or which any Loan
Party has a reasonable basis to believe may be, subject to any dispute, offset,
counterclaim or other claim or defense on the part of the

 

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Account Debtor (including offset or netting relating to trade or any other
payables, contra, accrued liabilities, unrealized forward losses and net
exchange payables specific to such Account Debtor) or to any claim on the part
of the Account Debtor denying payment liability under such Account Receivable
(provided that any amount so deducted shall not be further deducted from the
Borrowing Base);

(f) such Account Receivable is not evidenced by any chattel paper, promissory
note or other instrument unless such chattel paper, promissory note or other
instrument is subject to a Perfected First Lien and delivered to the
Administrative Agent for the benefit of the Secured Parties;

(g) such Account Receivable is subject to a Perfected First Lien, and such
Account Receivable is not subject to any Liens other than Perfected First Liens
or Permitted Borrowing Base Liens;

(h) (i) such Account Receivable has been fully earned and such Account
Receivable has been invoiced (if the issuance of such an invoice is a condition
precedent to the Account Debtor’s obligation to pay) or is, as of such Borrowing
Base Date, within four (4) Business Days of being invoiced or (ii) payment of
the Account Receivable is otherwise due and payable; provided that such Account
Receivable shall qualify as an Eligible Account Receivable only (A) if such
Account Receivable arises from the sale of wholesale Natural Gas Products where
it is customary industry practice for the payment for such Natural Gas Product
to be due on the 25th of each month, not more than five (5) Business Days have
elapsed after the due date specified in the original invoice; (B) if such
Account Receivable arises from a Financial Hedging Agreement and not more than
five (5) Business Days have elapsed after the date on which the payment of the
Account Receivable is required to be paid under the terms of such Financial
Hedging Agreement; and (C) for any other Account Receivable not covered by
clauses (A) or (B), not more than 60 days have elapsed after the due date
specified in the original invoice; provided, further, that an “Eligible Account
Receivable” shall not include any Account Receivable that is outstanding longer
than 90 days after the date such Account Receivable arose;

(i) such Account Receivable complies with all applicable Laws (excluding any
prohibition, limitation or restriction in any agreement with a Governmental
Authority to the extent that such prohibition, limitation or restriction would
be ineffective under applicable Law (including as provided under Sections 9-406
and 9-408 of the Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction)) to which the relevant Loan Party is subject;

(j) such Account Receivable is reduced by any prepayment or cash collateral from
the applicable Account Debtor;

(k) if the Account Debtor of such Account Receivable is a debtor under the
Bankruptcy Code (a “Chapter 11 Debtor”), such Account Receivable arose after the
commencement of the bankruptcy case (the “Petition Date”) of such Account Debtor
or has been assumed by such Account Debtor;

(l) at the time of the sale giving rise to such Account Receivable, the Account
Debtor is not in contractual default on any other obligations to any Loan Party
(other than (i) any amounts subject to a good faith dispute under the applicable
contract, (ii) amounts due and owing within the applicable time periods
specified in clause (h) above and (iii) with respect to any Account Debtor that
is a Chapter 11 Debtor, payment defaults that occurred prior to the Petition
Date of such Chapter 11 Debtor or other defaults that arose as a result of such
Account Debtor becoming a Chapter 11 Debtor); provided, however, that this
clause (l) shall not apply to any Account Debtor to which a Loan Party,
consistent with its internal credit policies, has granted a waiver of a
contractual default to lift a specified volume of product;

 

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(m) except with respect to an Account Receivable described in clause (k) above,
the Account Debtor obligated on such Account Receivable (i) has not admitted in
writing its inability to pay its debts generally or made a general assignment
for the benefit of its creditors, (ii) has not instituted or had instituted
against it a proceeding seeking to adjudicate it a debtor, bankrupt or insolvent
or seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any Law relating to
bankruptcy, insolvency or reorganization or relief of debtors or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official of it or for any substantial part of its property, and
(iii) has not taken any corporate action to authorize any of the foregoing;

(n) (i) the Account Debtor of such Account Receivable shall not be a
Governmental Authority unless all actions required under any Assignment of
Claims Act applicable to such Account Receivable and such Governmental Authority
shall have been taken to approve and permit the assignment of rights to payment
thereunder or thereon to the Administrative Agent, for the ratable benefit of
the Secured Parties, under the Security Documents and (ii) the Account Debtor of
such Account Receivable shall not be a Governmental Authority of a State within
the United States unless such state has waived any claim of sovereign immunity
with respect to such Account Receivable by statute, applicable case law,
contract or otherwise;

(o) if the Account Debtor of such Account Receivable is a Subsidiary or an
Affiliate of the Borrower, such Account Debtor is approved by the Required
Lenders in their sole discretion (exercised in good faith); provided, that any
Account Receivable the Account Debtor of which is a Kildair Entity arising from
an Eligible Kildair Transaction may be an “Eligible Account Receivable”;

(p) if the Account Debtor of such Account Receivable is incorporated in, or
primarily conducts business in, any jurisdiction outside the United States or
Canada, such Account Debtor is an Eligible Foreign Counterparty; provided,
however, that this clause (p) shall not be applicable to any Kildair Entity;

(q) the Account Debtor of such Account Receivable is creditworthy in accordance
with the Risk Management Policy; provided, that such Account Debtor may be
deemed non-creditworthy (and therefore such Account Receivable thereof shall be
ineligible for inclusion as an “Eligible Account Receivable”) in the judgment of
the Co-Collateral Agents after consultation with the Borrower;

(r) such Account Receivable is denominated in United States Dollars and payable
in the United States;

(s) such Account Receivable is not inclusive of any demurrage claim; and

(t) with respect to any such Account Receivable relating to a Materials Handling
Contract, such Account Receivable has been billed in arrears.

“Eligible Acquisition Asset Value”: 65% multiplied by the aggregate Estimated
Going Concern Value of the Approved Acquisition Assets taken as a whole.

“Eligible Asphalt Inventory”: as of any Borrowing Base Date, all Eligible
Inventory of the Loan Parties consisting of asphalt.

“Eligible Broker”: as defined in the definition of “Eligible Net Liquidity in
Futures Accounts” in this Section 1.1.

 

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“Eligible Cash and Cash Equivalents”: as of any Borrowing Base Date, currency
consisting of United States Dollars or Cash Equivalents, in each case, which
(i) has been deposited in a Deposit Account or a Securities Account with a Cash
Management Bank that is subject to an Account Control Agreement, (ii) is subject
to a Perfected First Lien, and (iii) is subject to no other Liens other than
Permitted Cash Management Liens.

“Eligible Coal Inventory”: as of any Borrowing Base Date, all Eligible Inventory
of the Loan Parties consisting of Coal Products.

“Eligible Commodities”: collectively, Coal Products, Natural Gas Products,
Petroleum Products and asphalt.

“Eligible Exchange Receivable”: an Exchange Receivable of any Loan Party that
would be an Eligible Account Receivable but for the fact that the consideration
to be received by such Loan Party consists in whole or in part of the delivery
of Eligible Commodities; provided, however, that the value of an Eligible
Exchange Receivable shall be the Value as of any Borrowing Base Date of the
Eligible Commodities required to be delivered to such Loan Party.

“Eligible Foreign Counterparty”: means an Account Debtor that is incorporated
in, or primarily conducts business in, any jurisdiction outside the United
States or Canada, and (A) is set forth on Schedule 1.1(C) or (B) has been
approved by the Required Lenders, in their sole discretion, from time to time
after the Closing Date in accordance with the following procedure: (x) the
Borrower shall deliver a written request to the Administrative Agent for such
approval by the Required Lenders of such counterparty and credit exposure, which
request shall be provided by the Administrative Agent to the Lenders, including,
if requested by a Lender, through posting on Intralinks or other web site in use
to distribute information to the Lenders, or by other electronic mail, or other
notice procedure permitted under Section 11.2; and (y) the Required Lenders
shall inform the Administrative Agent of such approval in writing (by electronic
communication, telecopy or facsimile) within five (5) Business Days after
receipt of notice from the Administrative Agent; provided that failure of a
Lender to respond to any request for approval within the time period provided
for hereby shall be deemed to be an acceptance of such counterparty as a
Eligible Foreign Counterparty by such Lender; provided, further, that, the
Supermajority Lenders, in their sole discretion, may from time to time revoke
the Eligible Foreign Counterparty status of any counterparty previously approved
as a Eligible Foreign Counterparty or reduce the previously-approved credit
exposure of the Loan Parties to such counterparty, which revocation or reduction
shall be effective as of the first Borrowing Base Date that is at least ten
(10) days after the delivery of written notice of such revocation or reduction
by the Administrative Agent to the Borrower. The Administrative Agent may, in
its sole discretion, extend such five (5) Business Day period if the
Administrative Agent determines that any counterparty requires additional review
by the Lenders. Schedule 1.1(C) shall be deemed amended to include such Eligible
Foreign Counterparties and the related credit exposure without further action
immediately upon the Required Lenders’ approval of such Eligible Foreign
Counterparty and the related credit exposure in accordance with the procedure
described in this definition.

“Eligible Forward Contract”: a Forward Contract of a Loan Party which
(a) conforms to the Risk Management Policy, (b) is evidenced by a written
agreement or a trade confirmation enforceable against the party thereto, (c) is
subject to a Perfected First Lien, subject only to Permitted Borrowing Base
Liens, (d) has not been terminated and is not subject to termination by reason
of an occurrence of a default or any other termination event having occurred
thereunder, (e) the Forward Contract Counterparty thereto is not a Subsidiary or
an Affiliate of any Loan Party, (f) has not been deemed ineligible as to its
form by the Co-Collateral Agents acting in their sole discretion, and (g) the
Forward Contract Counterparty thereto is not a Governmental Authority unless all
actions required under any applicable

 

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Assignment of Claims Act, if any, applicable to such Forward Contract and such
Governmental Authority shall have been taken to approve and permit the
assignment of rights to payment thereunder or thereon to the Administrative
Agent, for the ratable benefit of the Secured Parties under the Security
Documents.

“Eligible Hedged Natural Gas Inventory”: as of any Borrowing Base Date, the
Value of Eligible Natural Gas Inventory as of such date that has been Hedged.

“Eligible Hedged Petroleum Inventory”: as of any Borrowing Base Date, the Value
of Eligible Petroleum Inventory as of such date that has been Hedged.

“Eligible In the Money Forward Contract Amount”: to the extent that the
Counterparty Forward Contract Amount with respect to any Forward Contract
Counterparty is positive, such Counterparty Forward Contract Amount.

“Eligible Inventory”: as of any Borrowing Base Date, all inventory of any Loan
Party consisting of Eligible Commodities valued at the then current Value, and
in all instances as to which the following requirements have been fulfilled:

(a) the inventory is owned by such Loan Party;

(b) the inventory is subject to a Perfected First Lien and is free and clear of
all other Liens except Permitted Borrowing Base Liens;

(c) all requirements set forth in Section 5(k) of the Security Agreement
applicable to such inventory have been satisfied;

(d) the inventory has not been identified for deliveries with the result that a
buyer may have rights to the inventory that could be superior to the Perfected
First Liens, nor shall such inventory have become subject to a customer’s
ownership or lien;

(e) the inventory is in transit, in a pipeline or in a storage facility at an
Approved Inventory Location in the U.S. or Canada and, if such inventory is in
transit on a water borne vessel chartered, rented, owned or leased by such Loan
Party, either a bill of lading related thereto has been issued to or endorsed to
the order of such Loan Party (without further endorsement as of such Borrowing
Base Date) or a letter of indemnity for payment, provided by the holder or named
shipper thereof, has been issued to or addressed to such Loan Party;

(f) the inventory is in good saleable condition, is not deteriorating in quality
and is not obsolete;

(g) with respect to any inventory consisting of biofuels, biodiesel or ethanol,
not more than six (6) months has passed since the receipt thereof; and

(h) the inventory has not been placed on consignment;

provided that (i) the value of Eligible Inventory shall be reduced by the Value
of any net volumetric balance owed by any Loan Party to a counterparty with whom
such Loan Party holds title to the inventory, and (ii) (A) line fill and tank
bottoms (other than any tank bottoms consisting of distillates, gasolines or
other light oil products or residual fuel oils acceptable to the Co-Collateral
Agents in their sole discretion) in transportation or storage facilities owned
by any Loan Party and (B) the portion of commodities held in third party
transportation or storage facilities (1) that are tank bottoms (other than

 

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any tank bottoms consisting of distillates, gasolines or other light oil
products or residual fuel oils acceptable to the Co-Collateral Agents in their
sole discretion) or (2) line fill or working inventory (however designated) that
is not subject to an agreement recognizing such Loan Party’s ownership and/or
the withdrawal of which is subject to contractual restrictions (other than any
tank bottoms consisting of distillates, gasolines or other light oil products or
residual fuel oils acceptable to the Co-Collateral Agents in their sole
discretion), will not be considered “Eligible Inventory”. For the purposes of
this definition, “tank bottoms” with respect to asphalt shall be deemed to be
that portion of asphalt that is located at or below the suction point.

“Eligible Kildair Transaction” any transaction between the Borrower or a
Guarantor or any of their respective Subsidiaries, on the one hand, and any
Kildair Entity, on the other hand, which (A) include terms no less favorable in
a material respect to the payee than would be obtainable in comparable
arm’s-length transactions with a Person that is not an Affiliate of such payee
and (B) are for goods or services in the ordinary course of business.

“Eligible Letters of Credit Issued for Commodities Not Yet Received”: as of any
Borrowing Base Date, the aggregate face amount of either standby and/or
documentary Letters of Credit for the purchase or transportation of Eligible
Commodities for which title has passed to a Loan Party as of such Borrowing Base
Date, as long as such Loan Party is able to calculate drawable liability thereof
in a manner acceptable to the Co-Collateral Agents in their sole discretion
(exercised in good faith), which such manner shall be in such Loan Party’s
normal course of business and consistent with its month-end reconciliation
processes, minus any amounts drawn or paid under such Letters of Credit minus
any other liabilities then existing that may be satisfied by any such Letters of
Credit minus any other liabilities that may be owed by such Loan Party to the
beneficiary of any such Letters of Credit and which may be satisfied by any such
Letters of Credit minus, with regard to any such Letters of Credit for
transportation, any liabilities that may be satisfied by any such Letters of
Credit as reasonably estimated by such Borrower through the immediately
following calendar month, if the applicable Borrowing Base Date is as of the end
of the month, and otherwise through the end of the current calendar month.

“Eligible Long Term Unrealized Forward Gain”: as of any Borrowing Base Date, the
Aggregate Eligible In the Money Forward Contract Amount at such date for
Eligible Forward Contract obligations whose final cash or physical settlement is
during the period exceeding twenty-four (24) months but no greater than
thirty-six (36) months after such Borrowing Base Date; provided that,
notwithstanding the foregoing, an Eligible Forward Contract shall be excluded
from the calculation of Eligible Long Term Unrealized Forward Gain if it is not
in compliance with the Risk Management Policy or is a Futures Contract.

“Eligible Medium Term Unrealized Forward Gain”: as of any Borrowing Base Date,
the Aggregate Eligible In the Money Forward Contract Amount at such date for
Eligible Forward Contract obligations whose final cash or physical settlement is
during the period exceeding twelve (12) months but no greater than twenty-four
(24) months after such Borrowing Base Date; provided that, notwithstanding the
foregoing, an Eligible Forward Contract shall be excluded from the calculation
of Eligible Medium Term Unrealized Forward Gain if it is not in compliance with
the Risk Management Policy or is a Futures Contract.

“Eligible Natural Gas Inventory”: as of any Borrowing Base Date, all Eligible
Inventory of the Loan Parties consisting of Natural Gas Products.

 

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“Eligible Net Liquidity in Futures Accounts”: as of any Borrowing Base Date, the
Net Liquidation Value of any Commodity Account of any Loan Party as of such date
maintained with BNP Paribas Commodity Futures, Inc., Citigroup Global Markets
Inc., NewEdge USA, LLC or a reputable broker reasonably acceptable to the
Administrative Agent (each, so long as such Person remains qualified as such
pursuant to the next succeeding sentence, an “Eligible Broker”) with respect to
positions held by such Eligible Broker on a regulated exchange (including the
New York Mercantile Exchange, the Intercontinental Commodities Exchange and CME
ClearPort) that have been maintained at all times and in all respects in
accordance with the Risk Management Policy and this Agreement (including for the
avoidance of doubt, all transactions credited to such Commodity Account or
related thereto) which such Commodity Account is subject to (i) a Perfected
First Lien, subject only to Permitted Borrowing Base Liens and any Lien of such
Eligible Broker in connection with any indebtedness of such Loan Party to such
Eligible Broker permitted by the applicable Account Control Agreement
(including, but not limited to, if permitted, any right of the Eligible Broker
to close out open positions of such Loan Party without prior demand for
additional margin and without prior notice) (such amounts in a Commodity Account
subject to the liens and close-out rights of the Eligible Broker set forth in
this clause (i), the “Brokerage Account Deducts”), and (ii) an Account Control
Agreement among the Administrative Agent, such Loan Party holding such account
and the Eligible Broker with which such account is maintained. For the avoidance
of doubt, a broker may, at any time, cease to qualify as an “Eligible Broker”
for all purposes hereunder upon two (2) Business Days’ notice thereof by the
Administrative Agent, acting in its reasonable discretion, to the Borrower.
Eligible Net Liquidity in Futures Accounts shall include any discounted face
value of any U.S. Treasury Securities held as of such date in such account that
are zero coupon securities issued by the United States of America, minus any
unearned interest on such U.S. Treasury Securities as of such date; provided
that the maturity date thereof is within six (6) months of the relevant
Borrowing Base Date; provided, further, that the Eligible Net Liquidity in
Futures Accounts as calculated pursuant to this definition shall be net of any
Brokerage Account Deducts.

“Eligible Petroleum Inventory”: as of any Borrowing Base Date, all Eligible
Inventory of the Loan Parties consisting of Petroleum Products.

“Eligible RINs”: as of any Borrowing Base Date, all inventory of any Loan Party
consisting of RINs valued at the then current Value, and in all instances as to
which the following requirements have been fulfilled:

(a) the Eligible RIN is owned by such Loan Party;

(b) the Eligible RIN is subject to a Perfected First Lien and is free and clear
of all other Liens except Permitted Borrowing Base Liens;

(c) if the Eligible RIN is credited to a Commodity Account or Securities
Account, such account is a Controlled Account;

(d) all requirements of applicable law with respect to the Eligible RIN have
been satisfied; and

(e) the Eligible RIN has an expiration date at least 31 days after the
applicable Borrowing Base Date.

“Eligible Short Term Unrealized Forward Gain”: as of any Borrowing Base Date,
the Aggregate Eligible In the Money Forward Contract Amount at such time for
Eligible Forward Contract obligations whose final cash or physical settlement is
during the period ending twelve (12) months after such Borrowing Base Date;
provided that, notwithstanding the foregoing, an Eligible Forward Contract shall
be excluded from the calculation of Eligible Short Term Unrealized Forward Gain
if it is not in compliance with the Risk Management Policy or is a Futures
Contract.

 

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“Eligible Tier 1 Account Receivable”: at the time of any determination thereof,
each Eligible Account Receivable the Account Debtor of which is a Tier 1
Counterparty.

“Eligible Tier 2 Account Receivable”: at the time of any determination thereof,
each Eligible Account Receivable the Account Debtor of which is a Tier 2
Counterparty.

“Eligible Unbilled Account Receivable”: as of any Borrowing Base Date, each
Account Receivable of any Loan Party which would be an Eligible Account
Receivable but for the fact that such Account Receivable has not actually been
invoiced prior to such Borrowing Base Date.

“Eligible Unbilled Tier 1 Account Receivable”: at the time of any determination
thereof, each Eligible Unbilled Account Receivable the Account Debtor of which
is a Tier 1 Counterparty.

“Eligible Unbilled Tier 2 Account Receivable”: at the time of any determination
thereof, each Eligible Unbilled Account Receivable the Account Debtor of which
is a Tier 2 Counterparty.

“Employee Benefit Plans”: any benefit plan or arrangements in respect of any
employees or past employees operated by any Loan Party or in which any Loan
Party participates and which provides benefits on retirement or voluntary
withdrawal from or involuntary termination of employment, including termination
indemnity payments and post-retirement medical benefits.

“Environmental Laws”: any and all federal, state or local statutes, orders,
regulations or other Law having the force and effect of law, including common
law, guidelines, decrees, orders, injunctions, rules, judgments, consents,
directives, instructions, standards, judicial or administrative decisions or
other requirements by Governmental Authority having the force and effect of law,
including judicial interpretation of any of the foregoing concerning the
environment or health and safety (including regulating, relating to or imposing
liability or standards of conduct concerning Materials of Environmental Concern)
which are in existence now or in the future and are binding at any time on any
Loan Party in the relevant jurisdiction in which such Loan Party has been or is
operating (including by the export of its products or its waste to that
jurisdiction). Notwithstanding anything in this Agreement or in any other Loan
Document to the contrary, the defined term “Laws” and the usage of such term
(including as used in the defined term “Requirement of Law”) herein and in each
other Loan Document shall not include any of the items in the definition of the
term “Laws” to the extent they both (i) concern the environment or health and
safety (including regulating, relating to or imposing liability or standards of
conduct concerning Materials of Environmental Concern) and (ii) do not have the
force and effect of law.

“Environmental Permits”: any permit, license, registration, consent, approval
and other authorization from a Governmental Authority required under any
Environmental Law for the operation of the business, including facilities and
equipment, of any Loan Party conducted on, at the Properties.

“ERISA”: the Employee Retirement Income Security Act of 1974, as amended.

“ESA”: as defined in Section 7.13(d).

“Estimated Going Concern Value”: with respect to any Approved Acquisition Asset,
the “going concern value” of such Approved Acquisition Asset as reflected in the
most recent Business Valuation of such Approved Acquisition Asset obtained by
the Administrative Agent on or prior to the Closing Date (or with respect to any
Approved Acquisition Asset acquired after the Closing Date, upon acquisition
thereof), pursuant to Section 7.16, or at the request of the Borrower (at the
Borrower’s sole expense).

 

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“Eurocurrency Reserve Requirements”: for any day as applied to a Eurodollar
Loan, the aggregate (without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements current on such day (including basic,
supplemental, marginal and emergency reserves under any regulations of the Board
or other Governmental Authority having jurisdiction with respect thereto), as
now and from time to time hereafter in effect, dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of such Board) maintained by a member bank of the
Federal Reserve System.

“Eurodollar Base Rate”: with respect to any Eurodollar Loan for any Interest
Period, the London interbank offered rate as administered by the British Bankers
Association (or any other Person that takes over the administration of such
rate) for United States Dollars for a period equal in length to such Interest
Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters Screen that
displays such rate (or, in the event such rate does not appear on a Reuters page
or screen, on any successor or substitute page on such screen that displays such
rate, or on the appropriate page of such other information service that
publishes such rate from time to time as selected by the Administrative Agent in
its reasonable discretion; in each case, the “Screen Rate”) at approximately
11:00 A.M., London time, two Business Days prior to the commencement of such
Interest Period; provided, that, if the Screen Rate shall not be available at
such time for such Interest Period (an “Impacted Interest Period”) with respect
to United States Dollars, then the Eurodollar Base Rate shall be the
Interpolated Rate at such time. “Interpolated Rate” means, at any time, the rate
per annum determined by the Administrative Agent (which determination shall be
conclusive and binding absent manifest error) to be equal to the rate that
results from interpolating on a linear basis between: (a) the Screen Rate for
the longest period (for which that Screen Rate is available in United States
Dollars) that is shorter than the Impacted Interest Period and (b) the Screen
Rate for the shortest period (for which that Screen Rate is available for United
States Dollars) that exceeds the Impacted Interest Period, in each case, at such
time.

“Eurodollar Loans”: Loans for which the applicable rate of interest is based
upon the Eurodollar Rate.

“Eurodollar Rate”: with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula:

 

  Eurodollar Base Rate     1.00 - Eurocurrency Reserve Requirements  

“Event of Default”: any of the events specified in Section 9.1 for which all
applicable requirements for the giving of notice, the lapse of time, or both,
have been satisfied.

“Exchange Receivable”: any right to receive consideration that would be an
Account Receivable but for the fact that the consideration to be received by the
relevant Loan Party consists in whole or in part of the delivery of Eligible
Commodities.

“Excluded Accounts”: collectively, Deposit Accounts of any Grantor solely to the
extent that the amount on deposit in such Deposit Accounts, in aggregate, at any
one time is less than $200,000.

“Excluded Swap Obligation”: with respect to any Guarantor, any Swap Obligation
if, and to the extent that, and only for so long as, all or a portion of the
guarantee of such Guarantor of, or the grant by such Guarantor of a security
interest to secure, as applicable, such Swap Obligation (or any guarantee
thereof) is or becomes illegal under the Commodity Exchange Act or any rule,
regulation or order of the Commodity Futures Trading Commission (or the
application or official interpretation of any thereof) by virtue of such
Guarantor’s failure to constitute an “eligible contract participant,” as defined
in

 

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the Commodity Exchange Act and the regulations thereunder, at the time the
guarantee of (or grant of such security interest by, as applicable) such
Guarantor becomes or would become effective with respect to such Swap
Obligation. If a Swap Obligation arises under a master agreement governing more
than one Swap, such exclusion shall apply only to the portion of such Swap
Obligation that is attributable to Swaps for which such guarantee or security
interest is or becomes illegal.

“Executive Order”: as defined in Section 5.24(a).

“Exempt CFC”: Any “controlled foreign corporation” (as defined in Section 957 of
the Code) of which the MLP or a Subsidiary of the MLP is a “United States
shareholder” (within the meaning of Section 951 of the Code).

“Extensions of Credit”: at any date, as to any Lender at any time, the amount of
its Working Capital Facility Extensions of Credit or its the Acquisition
Facility Extensions of Credit at such time, as the context requires.

“Existing Acquisition Facility Letter of Credit”: each outstanding “Acquisition
Facility Letter of Credit” (as defined in the Existing Credit Agreement) set
forth on Schedule 3.2.

“Existing Credit Agreement”: that certain Credit Agreement, dated as of May 28,
2010, as amended pursuant to (i) the First Amendment to Credit Agreement, dated
as of March 22, 2011, (ii) the Second Amendment, dated as of September 27, 2012
and (iii) the Third Amendment, dated as of May 15, 2013, and as otherwise
amended, supplemented, waived or modified prior to the date hereof.

“Existing Working Capital Facility Letter of Credit”: each “Working Capital
Facility Letter of Credit” (as defined in the Existing Credit Agreement) set
forth on Schedule 3.1.

“Facility”: the Acquisition Facility or the Working Capital Facility, as the
context requires.

“Facility Increase”: as defined in Section 4.1(b).

“FATCA”: Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b)(1) of the Code and any intergovernmental agreements
entered into in connection with the implementation of such Sections of the Code.

“Federal Funds Effective Rate”: for any day, the rate per annum equal to the
weighted average of the interest rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by
JPMorgan Chase Bank from three federal funds brokers of recognized standing
selected by it.

“Fee Letter”: the fee letter dated as of August 19, 2013, among J.P. Morgan
Securities LLC, JPMorgan Chase Bank and the Borrower.

“FERC”: the U.S. Federal Energy Regulatory Commission.

“FERC Contract Collateral”: as defined in the Security Agreement.

 

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“Financial Hedging Agreement”: any currency swap, cross-currency rate swap,
currency option, interest rate option, interest rate swap, cap or collar
agreement or similar arrangement or any other similar transaction (including any
option to enter into any of the foregoing) or any combination of the foregoing
including any derivative relating to interest rate or currency rate risk, in
each case which is not a Commodity OTC Agreement.

“Financing Lease”: any lease of property, real or personal, the obligations of
the lessee in respect of which are required in accordance with GAAP to be
capitalized on a balance sheet of the lessee.

“First Purchaser Lien”: a so-called “first purchaser” Lien, as defined in Texas
Bus. & Com. Code Section 9.343, comparable Laws of the states of Oklahoma,
Kansas, Mississippi, Wyoming or New Mexico, or any other comparable Law of any
such jurisdiction or any other applicable jurisdiction.

“First Purchaser Lien Amount”: as of any Borrowing Base Date, in respect of any
property of a Loan Party subject to a First Purchaser Lien, the aggregate amount
of the obligations outstanding as of such date giving rise to such First
Purchaser Lien, less any portion of such obligations that are secured or
supported by a Letter of Credit.

“Fiscal Year”: with respect to any Person, such Person’s fiscal year, which
consists of a twelve (12) month period beginning on each January 1 and ending on
each December 31.

“Forward Contract”: as of any date of determination, a Commodity Contract with a
delivery date or, with respect to a Commodity OTC Agreement, price settlement
date, one day or later after such date of determination.

“Forward Contract Counterparty”: any counterparty to a Forward Contract of any
Loan Party.

“Futures Contracts”: contracts for making or taking delivery of Eligible
Commodities that are traded on a market-recognized commodity exchange, which
such contracts meet the specification and delivery requirements of futures
contracts on such commodity exchange.

“GAAP”: generally accepted accounting principles in the United States of America
in effect from time to time.

“General Partner”: Sprague Resources GP LLC, a Delaware limited liability
company.

“Governing Documents”: with respect to (a) a corporation, its articles or
certificate of incorporation, continuance or amalgamation and by-laws; (b) a
partnership, its certificate of limited partnership or partnership declaration,
as applicable, and partnership agreement; (c) a limited liability company, its
certificate of formation and operating agreement; and (d) any other Person, the
other organizational or governing documents of such Person.

“Governmental Authority”: any nation or government, any state, provincial or
other political subdivision thereof and any agency, authority, instrumentality,
court, central bank or other similar entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.

“Grantor”: any Person executing and delivering a Security Document, or becoming
party to a Security Document (by supplement or otherwise), as a grantor or
pledgor (or in a similar role), pursuant to this Agreement.

 

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“Guarantee”: the Guarantee to be executed and delivered by the Loan Parties,
substantially in the form of Exhibit N.

“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation of (a) the guaranteeing person or (b) another Person (including any
bank under any letter of credit) to induce the creation of an obligation for
which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the “primary obligations”)
of a third Person (the “primary obligor”) in any manner, whether directly or
indirectly, including any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The terms “Guarantee” and “Guaranteed” used as a verb shall have a
correlative meaning. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person’s
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith. Guaranteed Obligation shall not include any performance
bonds, surety bonds, appeal bonds or customs bonds required in the ordinary
course of business or in connection with the enforcement of rights or claims of
any Loan Party or in connection with judgments that have not resulted in a
Default or an Event of Default.

“Guarantors”: the MLP, Sprague Energy Solutions Inc., Sprague Connecticut
Properties LLC and Sprague Terminal Services LLC and, after the Closing Date,
each other Person executing and delivering the Guarantee, or becoming a party to
the Guarantee (by supplement or otherwise), pursuant to this Agreement.

“Hedged”: at any time in relation to Eligible Inventory, if the purchase or sale
price thereof has been effectively hedged as evidenced by the most recent
Position Report or, if not in such Position Report, as otherwise reasonably
acceptable to the Co-Collateral Agents through one or a combination of Commodity
Contracts or Futures Contracts entered into or held in accordance with the Risk
Management Policy for the corresponding volume of physical Eligible Commodities
held in Eligible Inventory; provided that the applicable Loan Parties’ rights
under such Commodity Contracts or Futures Contracts and all amounts due or to
become due to the relevant Loan Party under or in respect of such Commodity
Contracts or Futures Contracts are subject to a Perfected First Lien.

“Hedging Agreement Qualification Notification”: a notification in substantially
in the form of Exhibit T.

“Increase Amount”: as defined in Section 4.1(b)(iii).

“Increase and New Lender Agreement”: as defined in Section 4.1(b)(iii).

 

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“Increase Period”: the period from the Closing Date until (but excluding) the
Termination Date.

“Increasing Lender”: as defined in Section 4.1(b)(iii).

“Indebtedness”: of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money (whether by loan or the issuance
and sale of debt securities) or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the ordinary course
of business and payable in accordance with customary practice), (b) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) all obligations of such Person under Financing Leases or
Synthetic Leases, (d) all obligations of such Person in respect of letters of
credit, acceptances or similar instruments issued or created for the account of
such Person, (e) all liabilities of a third party secured by (or for which the
holder of such obligations has an existing right, contingent or otherwise, to be
secured by) any Lien on any property owned by such Person even though such
Person has not assumed or otherwise become liable for the payment thereof,
(f) all Guarantee Obligations of such Person in respect of obligations of the
kind referred to in clauses (a) through (e) above, and (g) for the purposes of
Section 9.1(f) only, all obligations of such Person in respect of Commodity OTC
Agreements and Financial Hedging Agreements. The amount of any Indebtedness
under (x) clause (e) shall be equal to the lesser of (A) the stated amount of
the relevant obligations and (B) the fair market value of the property subject
to the relevant Lien, and (y) clause (g) shall be the net amount, including any
net termination payments, required to be paid to a counterparty rather than the
notional amount of the applicable Commodity OTC Agreement or Financial Hedging
Agreement. Notwithstanding the foregoing, the Maine Dock Liability Obligations
and the Office Building Obligations shall not be considered Indebtedness for
purposes of this Agreement.

“Indemnified Liabilities”: as defined in Section 11.6.

“Indemnitee”: as defined in Section 11.6.

“Independent Entity Schedule”: Schedule 1.1(D) hereto, which sets forth each
counterparty with which any Loan Party transacts that has an Affiliate and/or
Subsidiary that holds itself out as an independent credit and a separate legal
entity, together with any of such counterparty’s independent Affiliates and/or
Subsidiaries, provided, that (a) a new Person may be added to such Schedule
1.1(D) at the sole discretion (exercised in good faith) of the Administrative
Agent after the Closing Date and (b) a Person may be removed from such Schedule
1.1(D) by the Administrative Agent, acting in its reasonable discretion, upon
ten (10) Business Days’ notice to the Borrower.

“Ineligible Participant”: Persons identified by the Borrower to the
Administrative Agent and the Lenders from time-to-time as Persons to whom no
Participation may be sold pursuant to Section 11.7 for competitive reasons, and
as to which the Administrative Agent has consented to the designation of such
Person as an Ineligible Participant.

“Insolvency”: with respect to any Multiemployer Plan, the condition that such
plan is insolvent within the meaning of Section 4245 of ERISA.

“Insolvent”: pertaining to a condition of Insolvency.

“Intellectual Property”: as defined in Section 5.9.

 

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“Intercompany Subordinated Indebtedness”: with respect to any Loan Party,
Indebtedness owed by such Loan Party to the MLP or any Subsidiary that is
subject to a subordination agreement substantially in the form of Exhibit H-1.

“Interest Payment Date”: (a) with respect to any Base Rate Loan (including, for
the avoidance of doubt, any Swing Line Loan), (i) prior to the Working Capital
Facility Maturity Date or the Acquisition Facility Maturity Date, as applicable,
the first Business Day of each month and (ii) the Working Capital Facility
Maturity Date or the Acquisition Facility Maturity Date, as applicable, (b) with
respect to any Eurodollar Loan, the last day of each Interest Period with
respect thereto and, with respect to any Eurodollar Loan having an Interest
Period of six (6) months, the last day of such Interest Period and the date
which is three (3) months after the start of such Interest Period and (c) with
respect to any Loan (other than as provided in the first sentence of
Section 4.9(b)), the date of any repayment or prepayment of principal made in
respect thereof.

“Interest Period”: (a) with respect to any Eurodollar Loan:

(i) initially, the period commencing on the Borrowing Date or Conversion date,
as the case may be, with respect to such Eurodollar Loan and ending one (1), two
(2), three (3) or six (6) months thereafter, as irrevocably selected by the
Borrower of such Eurodollar Loan in its Borrowing Notice or
Continuation/Conversion Notice, as the case may be, given with respect thereto;
and

(ii) thereafter, each period commencing on the last day of the immediately
preceding Interest Period applicable to such Eurodollar Loan and ending one (1),
two (2), three (3) or six (6) months thereafter, as irrevocably selected by the
Borrower in its Continuation/Conversion Notice to the Administrative Agent not
less than three (3) Business Days prior to the last day of the then current
Interest Period with respect thereto;

provided that:

(A) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;

(B) any Interest Period with respect to any Loan that would otherwise extend
beyond the applicable Termination Date, shall end on the applicable Termination
Date; and

(C) any Interest Period that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
the applicable calendar month.

“Interpolated Rate”: as defined in the definition of “Eurodollar Base Rate” in
this Section 1.1.

“Investment”: any advance, loan or extension of credit (other than trade
receivables incurred in the ordinary course of the applicable Person’s business
and payable in accordance with customary market practices) or capital
contribution to, investment in, or purchase or acquisition of any stock, bonds,
notes, debentures or other securities of or any assets constituting a business
unit of, any Person.

 

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“Investment Grade”: with respect to any Person, the long term senior unsecured
non-credit enhanced credit rating or shadow rating of which is BBB- or higher by
S&P or Baa3 or higher by Moody’s.

“IPO”: the initial public offering of common units in the MLP on the Closing
Date.

“IPO Distributed Assets”: the cash and Accounts Receivable to be distributed to
Axel Johnson Inc. or any Subsidiary thereof (excluding the Loan Parties) on the
Closing Date in connection with the IPO.

“ISP 98”: as defined in Section 3.4(g).

“Issuing Lenders”: collectively, the Acquisition Facility Issuing Lenders and
the Working Capital Facility Issuing Lenders; provided that there shall be no
more than five Issuing Lenders at any time unless otherwise agreed by the
Administrative Agent and notified to Lenders (it being understood that any
financial institution may be both an Acquisition Facility Issuing Lender and a
Working Capital Facility Issuing Lender and shall for purposes of this proviso
be considered one Issuing Lender).

“JPMorgan Chase Bank”: as defined in the introductory paragraph of this
Agreement.

“Junior Indebtedness”: as defined in Section 8.9.

“Kildair”: Kildair Services Ltd., a corporation formed under the laws of Canada.

“Kildair Credit Agreement”: that certain Credit Agreement, dated as of the
Closing Date, among Kildair, the lenders and agents party thereto, and JPMorgan
Chase Bank, N.A., Toronto Branch, as administrative agent.

“Kildair Entities”: collectively, Sprague International Properties LLC, Sprague
Canadian Properties LLC, Kildair, Wintergreen Transport Corporation Ltd. and
Transit P.M. Inc.

“Laws”: collectively, all international, foreign, Federal, state, provincial,
territorial and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities,
including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration
thereof, and all applicable administrative orders, directed duties, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“L/C Fee Payment Date”: (a) the fifth day after the first Business Day of each
January, April, July and October (or, if such day is not on a Business Day, the
next succeeding Business Day) and (b) the expiration date of the last
outstanding Post-Termination LOC.

“L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate
undrawn amount of the then-outstanding Letters of Credit and (b) the aggregate
amount of drawings under Letters of Credit that have not then been reimbursed or
converted into a Loan pursuant to Section 3.7(b) or (c).

 

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“L/C Participants”: with respect to any Acquisition Facility Letter of Credit,
the Acquisition Facility L/C Participants, and with respect to any Working
Capital Facility Letter of Credit, the Working Capital Facility L/C
Participants.

“L/C Participation Obligations”: at any time, the Acquisition Facility L/C
Participation Obligations and/or the Working Capital Facility L/C Participation
Obligations at such time, as the context requires.

“L/C Reimbursement Loan”: as defined in Section 3.7(c).

“Lead Arranger”: J.P. Morgan Securities LLC.

“Lender Party”: each Agent, each Lender, the Co-Documentation Agents and the
Co-Syndication Agents.

“Lenders”: as defined in the introductory paragraph to this Agreement and, as
the context requires, includes, the Issuing Lenders and the Swing Line Lender.
As of the Closing Date, each Lender is specified on Schedule 1.0.

“Letter of Credit”: any Acquisition Facility Letter of Credit and any Working
Capital Facility Letter of Credit.

“Letter of Credit Request”: a request by the Borrower for a new Letter of Credit
or an amendment to an existing Letter of Credit, in each case pursuant to
Section 3.3, which request for a new Letter of Credit shall be in form
reasonably satisfactory to the relevant Issuing Lender and the Administrative
Agent and which request for an amendment to an existing Letter of Credit shall
be in form reasonably satisfactory to the relevant Issuing Lender and the
Administrative Agent.

“Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any Financing Lease having substantially the same
economic effect as any of the foregoing), and the filing of any financing
statement under the Uniform Commercial Code or comparable Law of any
jurisdiction in order to perfect any of the foregoing; provided that “Lien”
shall refer to neither (a) any interest or title of a lessor under any leases or
subleases entered into by the Loan Parties in the ordinary course of business
nor (b) licenses, sub-licenses, leases or sub-leases granted to third parties in
the ordinary course of business consistent with past practices.

“Loan”: any loan made pursuant to this Agreement.

“Loan Documents”: this Agreement, the Notes, any Letter of Credit Requests, the
Perfection Certificate, the Guarantee and the Security Documents.

“Loan Parties”: the Borrower and each Guarantor.

“Long Tenor Letter of Credit”: any (a) Trade Letter of Credit that is a Working
Capital Facility Letter of Credit that is initially issued with a maximum tenor
of more than ninety (90) days but less than three hundred sixty-four (364) days
and (b) Auto-Renewal Letter of Credit.

“Long Tenor Letter of Credit Sub-Limit”: $75,000,000 at any time outstanding.

 

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“Maine Dock Liability Obligations”: indebtedness of the Borrower with respect to
the State of Maine Port Authority dock liability in an aggregate principal
amount of $9,772,708 as of August 31, 2013 (which amount may be reduced (but not
increased) from time to time).

“Majority Facility Lenders”: at any time, (a) with respect to the Acquisition
Facility, Lenders having Acquisition Facility Credit Exposure Percentages which
aggregate more than 50%; provided, that the Acquisition Facility Credit Exposure
of any Defaulting Lender shall be excluded from the calculation of Acquisition
Facility Credit Exposure Percentages in determining the Majority Facility
Lenders and (b) with respect to the Working Capital Facility, Lenders having
Working Capital Facility Credit Exposure Percentages which aggregate more than
50%; provided, that the Working Capital Facility Credit Exposure of any
Defaulting Lender shall be excluded from the calculation of Working Capital
Facility Credit Exposure Percentages in determining the Majority Facility
Lenders.

“Marked-to-Market Report”: a comprehensive marked-to-market report, in form and
substance reasonably similar to Exhibit R, of the Loan Parties’ Product purchase
and sale positions identified in the related Position Report. Such report shall
include all positions for all future time periods and cover all instruments that
create either an obligation to purchase or sell Product or that generate price
exposure and shall include unrealized marked-to-market margin for the position
considered. The positions shall include, but not be limited to, positions under
Physical Commodity Contracts for spot purchase and sale of Eligible Commodities,
Forward Contracts, exchanges, Commodity OTC Agreements, Financial Hedging
Agreements and Futures Contracts. The report shall exclude positions in carbon
credits, wood pellets and any other energy products approved by the Required
Lenders as “Product” pursuant to Section 5.21 after the Closing Date, in each
case, to the extent that the Loan Parties’ positions in any such energy product
are not material.

“Marked-to-Market Value”: with respect to any Commodity Contract of any Person
on any date:

(a) in the case of a Commodity Contract for the purchase, sale, transfer or
exchange of any physical Eligible Commodities, the unrealized gain or loss on
such Commodity Contract, determined by comparing (i) the amount to be paid or
received under such Commodity Contract for such Eligible Commodities pursuant to
the terms thereof to (ii) the Value of such Eligible Commodities on such date,
and

(b) in the case of any other Commodity Contract, the unrealized gain or loss on
such Commodity Contract determined by calculating the amount to be paid or
received under such other Commodity Contract pursuant to the terms thereof as if
the cash settlement of such other Commodity Contract were to be calculated on
such date of determination by reference to the Value of the Eligible Commodities
that are the subject of such other Commodity Contract;

provided, that (i) in the case of any Commodity Contract that is, in whole or in
part, an option by its terms, the amount so calculated shall reflect industry
standard valuation models approved by the Co-Collateral Agents and (ii) the
Marked-to-Market Value of any Commodity Contract for the storage or
transportation of any physical Eligible Commodity shall be limited to its
intrinsic value and shall take into account any demand charges associated with
such Commodity Contract.

“Market Value”: with respect to an Eligible Commodity or Eligible RIN on any
date, the price at which such Eligible Commodity or Eligible RIN could be
purchased or sold for delivery on that date or during the applicable period
adjusted to reflect the specifications thereof and the location and
transportation differential, determined by using prices (a) on the New York
Mercantile Exchange, the COMEX, the London Metal Exchange, the New York Board of
Trade, the International Petroleum

 

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Exchange, the Intercontinental Commodities Exchange, the Chicago Board of Trade,
the Chicago Mercantile Exchange or, if a price for any such Eligible Commodity
or Eligible RIN (or, in each case, delivery period or location) is not available
on such exchanges, such other markets or exchanges recognized as such in the
commodities trading industry, including over-the-counter markets and private
quotations, or as published in an independent industry recognized source, in
each case reasonably selected by the Borrower, (b) if such a price for any such
Eligible Commodity or Eligible RIN is not available in any market or exchange
described in clause (a) above, any other exchange or market reasonably selected
by the Borrower and reasonably satisfactory to the Co-Collateral Agents on such
date or (c) if such a price for any such Eligible Commodity or Eligible RIN is
not available in any market or exchange described in clause (a) or (b) above,
such other value determined pursuant to methodology reasonably selected by the
Borrower and reasonably satisfactory to the Co-Collateral Agents. With respect
to any Eligible Commodity consisting of tank bottoms consisting of distillates,
gasolines or other light oil products or residual fuel oils acceptable to the
Co-Collateral Agents in their sole discretion (exercised in good faith), the
Market Value thereof shall be 50% of the value as determined by the immediately
preceding sentence.

“Material Adverse Effect”: a development or an event that has resulted in a
material adverse change in (a) the operations, business, assets, properties or
condition (financial or other condition) of the MLP and its Subsidiaries taken
as a whole, (b) the ability of the Loan Parties, taken as a whole, to perform
their obligations under this Agreement or any of the other Loan Documents, or
(c) the legality, validity, binding effect or enforceability of this Agreement
or any of the other Loan Documents or the rights or remedies of the Agents or
the Lenders hereunder or thereunder.

“Materials Handling Contract”: any fee-based contractual arrangement entered
into by any Loan Party whereby such Loan Party performs business services
relating to materials handling or through-put for a third party.

“Materials of Environmental Concern”: any gasoline, natural gas or petroleum
(including crude oil or any fraction or derivative thereof) or petroleum
products or any other pollutant, contaminant, dangerous goods, hazardous or
toxic substances, materials or wastes, defined or regulated as such in or under,
or which form the basis of liability under, any Environmental Law or
Environmental Permit, including asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation, medical waste, radioactive materials and
electromagnetic fields.

“Maturity Date”: the Acquisition Facility Maturity Date or the Working Capital
Facility Maturity Date, as the context requires.

“Maximum Consolidated Senior Secured Leverage Ratio”: 3.5:1.0.

“Maximum Consolidated Total Leverage Ratio”: 4.5:1.0.

“Minimum Consolidated Fixed Charge Coverage Ratio”: 1.2:1.0.

“Minimum Consolidated Net Working Capital Amount”: $35,000,000.

“MLP”: Sprague Resources LP.

“MLP Partnership Agreement”: that certain First Amended and Restated Agreement
of Limited Partnership of Sprague Resources LP, dated on or about the Closing
Date, by and among the General Partner and the limited partners from time to
time parties thereto.

 

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“Moody’s”: Moody’s Investors Service, Inc., or any successor to its rating
agency business.

“Mortgage and Security Agreement”: (i) each Mortgage, Security Agreement,
Assignment of Leases and Rents and Fixture Filing covering the Mortgaged
Properties owned on the Closing Date and (ii) each Mortgage, Security Agreement,
Assignment of Leases and Rents and Fixture Filing, substantially in the form of
Exhibit L, with respect to each Mortgaged Property acquired after the Closing
Date located in the United States.

“Mortgaged Properties”: each property listed on Schedule 1.1(E) and any other
properties as to which the Administrative Agent, for the ratable benefit of the
Secured Parties, has after the Closing Date been granted a Lien pursuant to one
or more Mortgage and Security Agreements.

“Motiva Bridgeport Acquisition”: the acquisition by Sprague Connecticut
Properties LLC of the oil product terminal and associated dock and equipment
located in Bridgeport, Connecticut from Motiva Enterprises LLC pursuant to that
certain Purchase and Sale Agreement, dated as of July 30, 2013, by and between
Motiva Enterprises LLC and Sprague Connecticut Properties LLC.

“Multiemployer Plan”: a Plan which is a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA and which is subject to Title IV of ERISA.

“Natural Gas Products”: natural gas and natural gas liquids and any other
product or by-product of any of the foregoing, and all rights to transmit,
transport or store any of the foregoing.

“net after-Tax basis”: with respect to any payment to be received by a Person
from the Borrower pursuant to Section 4.10 (a “Section 4.10 Payment”) or
pursuant to Section 11.6 in respect of an Indemnified Liability (a “Section 11.6
Payment”), the amount of such Section 4.10 Payment or Section 11.6 Payment plus
a further payment or payments so that the net amount received by such Person,
after all Taxes imposed on such Person with respect to such amounts (net of any
actual current reduction in Taxes payable by such Person as a result of the
costs or expenses for which such Person receives a Section 4.10 Payment or
Section 11.6 Payment) is equal to the original payment required to be received
pursuant to Section 4.10 or Section 11.6, respectively. For avoidance of doubt,
if a Lender incurs a cost of $100 for which the Borrower pays the Lender $100
pursuant to Section 11.6, and the cost gives rise to a tax deduction that
reduces such Person’s Taxes by $35, and the payment increases such Person’s
Taxes by $35, then the net after-Tax basis payment shall be $100 because the
increase in Tax of $35 with respect to the Indemnified Liability is offset by
the reduction in Taxes of $35 that arises from the cost. However, if the cost
was not deductible and the payment increased such Person’s Taxes by $35, then
the net-after Tax basis payment would be at least $135.

“Net Cash Proceeds”: with respect to any Disposition of any Property or assets
by any Person or any Recovery Event with respect to any asset of any Person, the
aggregate amount of cash received from time to time by or on behalf of such
Person for its own account in connection with any such transaction, after
deducting therefrom (a) brokerage commissions, underwriting fees and discounts,
legal fees, finder’s fees and other similar fees, costs and commissions and
reasonable related expenses that, in each case, are incurred in connection with
such event and are actually paid to or earned by a Person that is not a
Subsidiary or Affiliate of any of the Loan Parties or any of their Subsidiaries
or Affiliates, (b) reasonable reserves for liabilities, indemnities, escrows and
purchase price adjustments in connection with any such Disposition or Recovery
Event and (c) the amount of taxes payable by such Person (or, in the case of a
Person that is a disregarded entity for U.S. federal income tax purposes, by the
owner of such Person, in the case of a Person that is a partnership for U.S.
federal income tax purposes, by the owners of such Person, or in the case of a
Person that is a member of a consolidated or unitary tax group, by such

 

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group, in each case, only to the extent the payor of such taxes is the Borrower
or a direct or indirect Subsidiary of the Borrower) in connection with or as a
result of such transaction that, in each case, are actually paid at the time of
receipt of such cash to the applicable taxation authority or other Governmental
Authority or, so long as such Person is not otherwise indemnified therefor, are
reserved for in accordance with GAAP, as in effect at the time of receipt of
such cash, based upon such Person’s reasonable estimate of such taxes, and paid
to the applicable taxation authority or other Governmental Authority within 16
months after the date of receipt of such cash; provided that if, at the time any
of the liabilities, indemnities, escrows or purchase price adjustments referred
to in clause (b) and/or taxes referred to in clause (c) are actually paid or
otherwise satisfied, the reserve therefor exceeds the amount paid or otherwise
satisfied, then the amount of such excess reserve shall constitute “Net Cash
Proceeds” on and as of the date of such payment or other satisfaction for all
purposes of this Agreement.

“Net Liquidation Value”: with respect to any Commodity Account, the sum of
(i) the aggregate marked-to-market value of all futures positions, (ii) the
aggregate liquidation value of all option positions, and (iii) the cash balance,
in each case credited to such Commodity Account.

“New Lenders”: as defined in Section 4.1(b)(iii).

“Non-Defaulting Lender”: at any time, each Lender that is not a Defaulting
Lender at such time.

“Non-Excluded Taxes”: as defined in Section 4.11(a).

“Non-Exempt Agent”: as defined in Section 4.11(e).

“Non-Exempt Lender”: as defined in Section 4.1 1(e).

“Non-Renewal Notice Date”: as defined in Section 3.4(c).

“Note” and “Notes”: as defined in Section 4.5(e).

“Notice of Prepayment”: as defined in Section 4.6.

“Obligations”: the unpaid principal amount of, and interest (including interest
accruing after the maturity of the Loans and Reimbursement Obligations and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
any of the Loan Parties, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) on the Loans and Reimbursement
Obligations, and all other obligations and liabilities of any of the Loan
Parties to the Secured Parties and the Lenders, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, or out of or in connection with this Agreement,
the Notes, the Security Documents, any other Loan Documents, any Letter of
Credit, any Commodity OTC Agreement with a Qualified Counterparty, any Financial
Hedging Agreement with a Qualified Counterparty or any Cash Management Bank
Agreement with a Qualified Cash Management Bank, or any other document made,
delivered or given in connection therewith or herewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including all fees and disbursements of counsel to the Agents or to
the Lenders that are required to be paid by a Loan Party pursuant to the terms
of the Loan Documents or other agreement or instrument evidencing such
obligations or liabilities) or otherwise; provided that, for purposes of
determining any Guarantor Obligations of any Guarantor under this Agreement, the
definition of “Obligations” shall not create any guarantee by any Guarantor of
any Excluded Swap Obligations of such Guarantor, provided further that,
(i) obligations of any Loan Party under any Commodity OTC

 

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Agreement to a Qualified Counterparty, Financial Hedging Agreement to a
Qualified Counterparty or any Cash Management Bank Agreement to a Qualified Cash
Management Bank (such obligations, the “Hedging and Bank Product Obligations”),
shall be secured pursuant to the Security Documents and guaranteed pursuant to
the Guarantee only to the extent that, and for so long as, those obligations and
liabilities of the Loan Parties listed above not consisting of Hedging and Bank
Product Obligations (the “Other Obligations”) are so secured and guaranteed,
unless the Other Obligations cease to be so secured and guaranteed either (A) as
a result of the Administrative Agent’s undertaking an Enforcement Action (as
defined in the Security Agreement) or (B) following an Insolvency Proceeding (as
defined in the Security Agreement) with respect to any Loan Party, in which
cases the Hedging and Bank Product Obligations shall continue to be secured
pursuant to the Security Documents and guaranteed pursuant to the Guarantee and
(ii) any release of Collateral or Guarantors effected in the manner permitted by
this Agreement shall not require the consent of holders of any Hedging and Bank
Product Obligations. The Hedging and Bank Product Obligations shall be
subordinated to the Other Obligations pursuant to the terms of the Security
Agreement.

“OFAC”: as defined in Section 5.24(b)(i).

“Office Building Obligations”: indebtedness with respect to the building to be
built at 185 International Drive, Portsmouth, NH 03801 in an aggregate principal
amount not to exceed $15,000,000 (which amount may be reduced (but not
increased) from time to time).

“Operating Forecast”: the monthly operating forecast of the income statement and
balance sheet of the MLP and its consolidated Subsidiaries in form and substance
satisfactory to the Administrative Agent, as updated from time to time pursuant
to Section 7.1(e).

“Other Connection Taxes”: with respect to any Lender or any Agent, Taxes imposed
as a result of a present or former connection between such Lender or Agent and
the jurisdiction imposing such Tax (other than connections arising solely from
such Lender or Agent, as applicable, having executed, delivered, become a party
to, performed its obligations under, received payments under, received or
perfected a security interest under, engaged in any other transaction pursuant
to or enforced any Loan Document, or sold or assigned an interest in any Loan or
Loan Document).

“Other Taxes”: as defined in Section 4.11(b).

“Out of the Money Forward Contract Amount”: to the extent that the Counterparty
Forward Contract Amount with respect to any Forward Contract Counterparty is
negative, the absolute value of such Counterparty Forward Contract Amount.

“Out of the Money Swap Amount”: to the extent that the Qualified Counterparty
Swap Amount with respect to any Qualified Counterparty is negative, the absolute
value of such Qualified Counterparty Swap Amount.

“Overcollateralization Amount”: with respect to any counterparty under a
Commodity Contract of any Loan Party, the amount by which the cash collateral
deposited with or prepayments made to such Loan Party by such counterparty
exceeds the amount of the obligations such cash collateral was pledged to secure
or with respect to which such prepayment was made.

“Paid but Unexpired Letters of Credit”: as of any Borrowing Base Date, the sum
of (a) the amount of any payment made by any Loan Party within 45 calendar days
prior to such Borrowing Base Date to satisfy the obligation for which a Letter
of Credit was issued solely to the extent that such Letter of Credit has not
been reduced, cancelled or drawn upon and (b) for any Trade Letter of Credit
with

 

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respect to which no amount can be drawn with respect to mark-to-market
liability, an amount equal to 20%, times, the lesser of (i) the then applicable
undrawn portion of such Trade Letter of Credit and (ii) the operational
tolerance with respect to the underlying purchase contract with respect to which
such Trade Letter of Credit was issued.

“Participant” and “Participants”: as defined in Section 11.7(b).

“Participant Register”: as defined in Section 11.7(b).

“Participation”: as defined in Section 11.7(b).

“Payment Intangible”: as defined in Section 9-102 of the New York Uniform
Commercial Code.

“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA.

“Perfected First Lien”: any perfected, first priority Lien or security interest
(or its substantial equivalent under applicable Laws) granted by a Loan Party
pursuant to a Security Document in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties; provided that, in the case of inventory
that is not located in the United States or contracts, Accounts Receivable or
Payment Intangibles not governed by Laws of the United States of America or any
state or political subdivision thereof, the validity and, if customarily
available, priority of such Lien shall be confirmed by an opinion of special
local counsel, the form and substance of which shall be customary and reasonably
satisfactory to the Administrative Agent.

“Perfection Certificate”: the Perfection Certificate to be executed and
delivered by the Loan Parties, substantially in the form of Exhibit Q.

“Performance Letter of Credit”: a standby Working Capital Facility Letter of
Credit issued to support bonding, swap transaction, performance, transportation
and tariff requirements relating to Eligible Commodities (other than the
obligation to pay for the purchase of Eligible Commodities).

“Performance Letter of Credit Sub-Limit”: $50,000,000 at any time outstanding.

“Permitted Borrowing Base Liens”: (a) carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s, landlords’, or other similar Liens arising in the
ordinary course of business which are not overdue for a period of more than 60
days or which are being contested in good faith by appropriate proceedings or
which have been bonded over or otherwise adequately secured against,
(b) Permitted Cash Management Liens, (c) Liens created pursuant to the Security
Documents and the other Loan Documents (provided, that such permitted Liens
shall not include any Liens purported to be granted to any commodity
intermediary on assets other than assets credited to a Controlled Account
maintained with such commodity intermediary or such Controlled Account as a
result of the incorporation by reference of a separate security agreement),
(d) First Purchaser Liens, (e) inchoate tax Liens, (f) Liens arising from
unauthorized Uniform Commercial Code financing statements and (g) netting and
other offset rights granted by any Loan Party to counterparties under Commodity
Contracts and Financial Hedging Agreements on or with respect to payment and
other obligations owed by such Loan Party to such counterparties.

 

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“Permitted Cash Management Liens”: (a) Liens with respect to (i) all amounts due
to the Cash Management Bank, in respect of customary fees and expenses for the
routine maintenance and operation of any Cash Management Account, (ii) the face
amount of any checks which have been credited to any Cash Management Account,
but are subsequently returned unpaid because of uncollected or insufficient
funds, or (iii) other returned items or mistakes made in crediting such Cash
Management Account, (b) any other Liens permitted under the Account Control
Agreement for a Cash Management Account, (c) Liens created by the Security
Documents and the other Loan Documents, (d) inchoate tax Liens, (e) Liens
arising from unauthorized Uniform Commercial Code financing statements, (f) any
Overcollateralization Amounts and (g) Liens on currency, Cash Equivalents,
commodities or Commodities Contracts of the Loan Parties deposited in, or
credited to, any Controlled Account that are subject to an Account Control
Agreement; provided that, such Liens are specifically permitted by such Account
Control Agreement or arise by operation of law.

“Permitted Investors”: Antonia A. Johnson, together with her spouse, children,
grandchildren and heirs (and any trust of which any of the foregoing (or any
combination thereof) constitute at least 80% of the then current beneficiaries).

“Permitted Refinancing Indebtedness”: as defined in Section 8.2(d).

“Person”: an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.

“Petition Date”: as defined in the definition of “Eligible Account Receivable”
in this Section 1.1.

“Petroleum Products”: crude oil and refined petroleum products (including
heating oil, diesel, gasoline, kerosene, jet fuel and propane) and any other
product or by-product of either of the foregoing, residual fuels, biodiesel,
biofuels and ethanol and all rights to transmit, transport or store any of the
foregoing.

“Physical Commodity Contract”: a contract for the purchase, sale, transfer or
exchange of any physical Eligible Commodity.

“Plan”: at a particular time, any employee benefit plan which is covered by
ERISA and in respect of which any of the Loan Parties or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5)
of ERISA or to which any Loan Party or Commonly Controlled Entity has any actual
or contingent liability.

“Platform”: as defined in Section 11.2.

“Pledge Agreement”: the Pledge Agreement to be executed and delivered by the
Loan Parties party thereto, substantially in the form of Exhibit C.

“Pledged Accounts”: all Commodity Accounts, Deposit Accounts (other than
Excluded Accounts) and Securities Accounts of any Grantor.

“Pledged Collateral”: the “Pledged Collateral” as defined in the Pledge
Agreement.

“Position Report”: a position report in form and substance substantially similar
to Exhibit M which shows in detail the calculations supporting the Borrower’s
certification of the Loan Parties’ compliance with the position limits in the
Risk Management Policy.

 

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“Post-Termination LOC”: as defined in Section 3.6(c).

“Prepaid Purchases”: Eligible Commodities (consisting of Natural Gas Products
and Petroleum Products) valued at the then current Value purchased and prepaid
by the Loan Parties from suppliers reasonably acceptable to the Co-Collateral
Agents in their sole discretion, with respect to which (w) title shall not have
passed to the any Loan Party, (x) such Eligible Commodities shall not have been
delivered to any Loan Party; provided that such products must be supported by an
invoice from said supplier (i) specifying the purpose of the applicable
prepayment, and (ii) including a copy of the underlying purchase contract;
(y) (A) with respect to the prepayments by the Borrower under that certain
Master Agreement for the Purchase and Sale of Petroleum Products, Crude Oil and
Natural Gas Liquids, effective March 15, 2009 (as amended, restated,
supplemented or otherwise modified and in effect from time to time), between the
Borrower and Morgan Stanley Capital Group Inc., not more than sixty (60) days
shall have elapsed since such prepayment was made or (B) with respect to
prepayment by any Loan Party under any other agreement or arrangement, not more
than five (5) Business Days shall have elapsed since such prepayment was made
and (z) the Administrative Agent shall have a Perfected First Lien in the right
of such Loan Party to receive such Eligible Commodities (including that no
provision of any agreement between such supplier and such Loan Party shall
prohibit the assignment of a security interest by such Loan Party to the
Administrative Agent in such Loan Party’s right to receive such Eligible
Commodities).

“Product”: as defined in Section 5.21(a).

“Product Taxes”: any amounts which are due and owing to any Governmental
Authority, including excise or sales taxes, applicable to services provided
under any Materials Handling Contract or the sale of Eligible Commodities, to
the extent such amounts are collected or collectable by any Loan Party from such
Loan Party’s customer to be remitted to such Governmental Authority.

“Pro Forma Basis”: with respect to the covenants set forth in Section 8.1 on any
date of determination, the calculation of such covenants as at such date of
determination; provided that the amount of Consolidated EBITDA and Consolidated
Fixed Charges in any such calculation shall be the amount of Consolidated EBITDA
and Consolidated Fixed Charges for the most recently ended four (4) fiscal
quarter period.

“Pro Forma Financial Statements”: as defined in Section 6.1(r)

“Projections”: as defined in Section 6.1(r).

“Properties”: as defined in Section 5.22(a).

“Public Lender”: as defined in Section 11.2.

“Qualified Cash Management Bank”: any Cash Management Bank that, at the time a
Cash Management Bank Agreement was entered into between a Loan Party and such
Cash Management Bank, was a Lender (or an Affiliate thereof).

“Qualified Counterparty”: any counterparty to any Financial Hedging Agreement or
Commodity OTC Agreement entered into between a Loan Party and a Person that,
(i) at the time such Financial Hedging Agreement or Commodity OTC Agreement was
entered into, was a Lender or (ii) if such Financial Hedging Agreement or
Commodity OTC Agreement was entered into prior to the Closing Date, was a lender
under the Existing Credit Agreement at the time such Financial Hedging Agreement
or Commodity OTC Agreement was entered into and is a Lender on the Closing Date;
provided, that, with

 

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respect to either clause (i) or clause (ii), such counterparty (other than any
counterparty that is the Administrative Agent) shall be a “Qualified
Counterparty” with respect to any Financial Hedging Agreement or Commodity OTC
Agreement solely to the extent such counterparty has delivered a Hedging
Agreement Qualification Notification to the Administrative Agent.

“Qualified Counterparty Swap Amount”: with respect to any Qualified
Counterparty, an amount equal to (a) the aggregate unrealized gains to each
relevant Loan Party, based upon such Loan Party’s reasonable calculation of such
amount in accordance with industry standard valuation models, under all
Commodity OTC Agreements and Financial Hedging Agreements between such Qualified
Counterparty and such Loan Party minus (b) the aggregate unrealized losses to
such Loan Party, based upon such Loan Party’s reasonable calculation of such
amount in accordance with industry standard valuation models, under all
Commodity OTC Agreements and Financial Hedging Agreements between such Qualified
Counterparty and such Loan Party.

“Reconciliation Summary”: with respect to the annual and monthly consolidated
financial statements (other than the statements of cash flow and owners’ equity)
delivered pursuant to Section 7.1, (i) a schedule showing the elimination of
transactions between any Loan Party and any Subsidiary of a Loan Party that is
not itself a Loan Party and transactions between any Loan Party and any
Affiliate of a Loan Party (other than any Subsidiary of a Loan Party), (ii) a
statement showing the adjustments made to report such financial statements on an
Economic Basis plus or minus any Allowed Reserve, as applicable, and (iii) a
statement showing the adjustments made to such financial statements with respect
to any Allowed Reserve.

“Recovery Event”: any settlement of or payment in respect of any Property or
casualty insurance claim or any condemnation proceeding relating to any asset of
any Loan Party resulting in Net Cash Proceeds to the applicable Loan Party in
excess of $5,000,000.

“Refunded Swing Line Loan”: as defined in Section 2.6(a).

“Register”: as defined in Section 11.7(d).

“Regulation U”: Regulation U of the Board.

“Reimbursement Date”: as defined in Section 3.7(b).

“Reimbursement Obligations”: the obligation of the Borrower to reimburse any
Issuing Lender, pursuant to Section 3.7(a) for Unreimbursed Amounts.

“Reinvestment Deferred Amount”: with respect to any Reinvestment Event, the
aggregate Net Cash Proceeds received by any Loan Party in connection therewith
which are not applied to prepay outstanding Loans pursuant to Section 4.7(c) as
a result of the delivery of a Reinvestment Notice.

“Reinvestment Event”: any Asset Sale or Recovery Event in respect of which the
Borrower has delivered a Reinvestment Notice.

“Reinvestment Notice”: a written notice executed by a Responsible Person of the
Borrower stating that no Event of Default has occurred and is continuing and
that the relevant Loan Party either (i) intends and expects to use all or a
specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to
acquire assets (directly or through the purchase of the Capital Stock of a
Person pursuant to an Acquisition or otherwise) to replace, repair or upgrade
the assets subject to such Asset Sale or Recovery Event, or (ii) in the case of
a Recovery Event, has replaced, repaired or upgraded the asset subject to such
Recovery Event prior to such Person’s receipt of the Net Cash Proceeds thereof
and the amount expended therefor.

 

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“Reinvestment Prepayment Amount”: with respect to any Reinvestment Event, the
Reinvestment Deferred Amount relating thereto less any amount expended prior to
the relevant Reinvestment Prepayment Date to acquire assets (directly or through
the purchase of the Capital Stock of a Person pursuant to an Acquisition or
otherwise) to replace, repair or upgrade the assets subject to such Reinvestment
Event (including, in the case of a Recovery Event, amounts expended to replace,
repair or upgrade the asset subject to such Recovery Event prior to the receipt
by the relevant Loan Party of the Net Cash Proceeds thereof).

“Reinvestment Prepayment Date”: with respect to any Reinvestment Event, the
earlier of (a) the date occurring 12 months after such Reinvestment Event and
(b) the date on which the applicable Loan Party shall have determined not to, or
shall have otherwise ceased to, acquire assets (directly or through the purchase
of the Capital Stock of a Person pursuant to an Acquisition or otherwise) to
replace, repair or upgrade the assets subject to such Reinvestment Event with
all or any portion of the relevant Reinvestment Deferred Amount.

“Related Person” means with respect to any Person, each officer, employee,
director, trustee, agent, advisor, affiliate, partner and controlling person of
such Person.

“Relevant Facility Lender”: with respect to any Acquisition Facility Loan, an
Acquisition Facility Lender, and with respect to any Working Capital Facility
Loan, a Working Capital Facility Lender.

“Relevant Facility Loan”: with respect to any L/C Reimbursement Loan related to
an Acquisition Facility Letter of Credit, an Acquisition Facility Loan, and with
respect to any L/C Reimbursement Loan related to a Working Capital Facility
Letter of Credit, a Working Capital Facility Loan.

“Relevant L/C Participant”: with respect to an Acquisition Facility Letter of
Credit, an Acquisition Facility L/C Participant, and with respect to a Working
Capital Facility Letter of Credit, a Working Capital Facility L/C Participant.

“Relevant Letter of Credit”: with respect to an Acquisition Facility Issuing
Lender, an Acquisition Facility Letter of Credit, and with respect to a Working
Capital Facility Issuing Lender, a Working Capital Facility Letter of Credit.

“Renewal Notice Date”: as defined in Section 3.4(c).

“Reorganization”: with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.

“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty (30) day notice period is waived
under PBGC Reg. § 4043.

“Representatives”: as defined in Section 11.16.

“Requested Increase Amount”: as defined in Section 4.1(b)(i).

“Requested Increase Effective Date”: as defined in Section 4.1(b)(i).

 

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“Required Lenders”: at any time, Lenders, the Credit Exposure Percentages of
which aggregate more than 50%; provided, that the Credit Exposure of any
Defaulting Lender shall be excluded from the calculation of Credit Exposure
Percentages in determining the Required Lenders.

“Requirement of Law”: as to any Person, any Law or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

“Responsible Person”: (i) with respect to the Borrower or any Subsidiary, the
chief executive officer, president, chairman, chief operating officer, chief
accounting officer, chief financial officer, chief risk officer, chief
compliance officer, senior vice-president, executive vice-president,
vice-president of finance, controller, treasurer or assistant treasurer of the
Borrower or such Subsidiary, as applicable, or any additional natural person
notified to the Administrative Agent in an officer’s certificate signed by one
or more then existing Responsible Persons of the MLP and that contains a
specimen signature of such additional natural person; provided that, with
respect to any Borrowing Base Report, “Responsible Person” shall include any
vice president responsible for the oversight of the trading and financial
operations of the Borrower or such Subsidiary, as applicable, or any additional
natural person notified to the Administrative Agent in an officer’s certificate
signed by one or more then existing Responsible Persons of the MLP and that
contains a specimen signature of such additional natural person; and (ii) with
respect to the MLP, the chief executive officer, president, chairman, chief
operating officer, chief accounting officer, chief financial officer, chief risk
officer, chief compliance officer, senior vice-president, executive
vice-president, vice-president of finance, controller, treasurer or assistant
treasurer or any additional natural person notified to the Administrative Agent
in an officer’s certificate signed by one or more then existing Responsible
Persons of the MLP and that contains a specimen signature of such additional
natural person.

“Restricted Payments”: as defined in Section 8.5.

“RIN”: any renewable identification number associated with the
government-mandated renewable fuel standards.

“Risk Management Policy”: the risk management policy of the Loan Parties
applicable to the funding activities of the Loan Parties as approved by the
board of directors of the General Partner and as in effect as of the date
hereof, and as the same may be modified in accordance with Section 7.10.

“SEC”: the United States Securities and Exchange Commission.

“SEC Filings”: as defined in Section 7.1.

“Section 4.11 Certificate”: as defined in Section 4.11(e).

“Secured Parties”: collectively, the Agents, the Lenders (including any Issuing
Lender in its capacity as Issuing Lender and the Swing Line Lender in its
capacity as Swing Line Lender), any Qualified Cash Management Bank, any
Qualified Counterparty and, in each instance, their respective successors and
permitted assigns.

“Securities Account”: as defined in Section 8-501 of the New York Uniform
Commercial Code.

“Security Agreement”: the Security Agreement to be executed and delivered by the
Loan Parties, substantially in the form of Exhibit B.

 

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“Security Documents”: the collective reference to each Account Control
Agreement, the Pledge Agreement, the Security Agreement, each Mortgage and
Security Agreement and each other security documents hereafter delivered to the
Administrative Agent granting a Lien on any asset or assets of any Person to
secure any of the Obligations or to secure any guarantee of any such
Obligations.

“Semi-Monthly Reporting Date”: the fifteenth (15th) day and the last day of each
month.

“Single Employer Plan”: any Plan which is subject to Title IV of ERISA, but
which is not a Multiemployer Plan.

“S&P”: Standard and Poor’s Financial Services LLC, or any successor to its
rating agency business.

“Specified Laws”: (i) Trading with the Enemy Act, and each of the foreign assets
control regulations of the United States Treasury Department (31 C.F.R.,
Subtitle B, Chapter V) and any other enabling legislation or executive order
relating thereto, and (ii) the USA PATRIOT Act.

“Subsidiary”: as to any Person, a corporation, partnership or other entity of
which shares of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership or other entity are
at the time owned, or the management of which is otherwise controlled, directly
or indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of
the MLP. As of the Closing Date, the Subsidiaries of the MLP are listed on
Schedule 5.15.

“Supermajority Lenders”: at any time, Lenders the Credit Exposure Percentages of
which aggregate more than 66 2/3%; provided that the Credit Exposure of any
Defaulting Lender shall be excluded from the calculation of Credit Exposure
Percentage in determining Supermajority Lenders.

“Swap”: any agreement, contract, or transaction that constitutes a “swap” within
the meaning of section 1a(47) of the Commodity Exchange Act.

“Swap Amounts due to Qualified Counterparties”: as of any date, the aggregate of
all Out of the Money Swap Amounts.

“Swap Obligation”: with respect to any Person, any obligation to pay or perform
under any Swap.

“Swing Line Lender”: JPMorgan Chase Bank, in its capacity as lender of Swing
Line Loans hereunder.

“Swing Line Loan Sub-Limit”: $75,000,000 at any time outstanding.

“Swing Line Loans”: as defined in Section 2.3(a).

“Swing Line Participation Amount”: as defined in Section 2.6(b).

“Synthetic Lease”: any lease of property, real or personal, the obligations of
the lessee in respect of which are treated as an operating lease for financial
accounting purposes and a financing lease for tax purposes, in accordance with
GAAP.

 

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“Taxes”: as defined in Section 4.11(a).

“Termination Date”: the date that is the fifth anniversary of the Closing Date,
or, if such date is not a Business Day, the next preceding Business Day.

“Tier 1 Counterparty”: in relation to an Eligible Account Receivable or Eligible
Unbilled Account Receivable, the counterparty thereto to the extent that
(a) such counterparty is Investment Grade or (b) such counterparty’s obligations
with respect thereto are supported by Acceptable Investment Grade Credit
Enhancement.

“Tier 2 Counterparty”: in relation to an Eligible Account Receivable or Eligible
Unbilled Account Receivable, the counterparty thereto to the extent that it is
not a Tier 1 Counterparty.

“Title Insurance Company”: as defined in Section 6.1(o).

“Total Acquisition Facility Acquisition Extensions of Credit”: an amount equal
to the sum of (a) the aggregate unpaid principal amount of Acquisition Facility
Loans outstanding at such time, plus (b) the aggregate amount of Acquisition
Facility L/C Obligations outstanding at such time, that are, in each case,
Acquisition Facility Acquisition Extensions of Credit.

“Total Acquisition Facility Extensions of Credit”: an amount equal to the sum of
(a) the aggregate unpaid principal amount of Acquisition Facility Loans
outstanding at such time, plus (b) the aggregate amount of Acquisition Facility
L/C Obligations outstanding at such time.

“Total Acquisition Facility Working Capital Extensions of Credit”: an amount
equal to the sum of (a) the aggregate unpaid principal amount of Acquisition
Facility Loans outstanding at such time, plus (b) the aggregate amount of
Acquisition Facility L/C Obligations outstanding at such time, that are, in each
case, Acquisition Facility Working Capital Extensions of Credit.

“Total Extensions of Credit”: at any time, the Total Working Capital Facility
Extensions of Credit or the Total Acquisition Facility Extensions of Credit at
such time, as the context requires.

“Total Working Capital Facility Extensions of Credit”: an amount equal to the
sum of (a) the aggregate unpaid principal amount of Working Capital Facility
Loans and Swing Line Loans outstanding at such time, plus (b) the aggregate
amount of Working Capital Facility L/C Obligations outstanding at such time.

“Trade Letter of Credit”: a commercial or standby Letter of Credit supporting
the purchase of Eligible Commodities giving rise to Eligible Inventory and/or an
Eligible Account Receivable no later than sixty (60) days following the date of
issuance of such Letter of Credit.

“Trading Business”: with respect to each Lender, the day-to-day activities of
such Lender or a division, Subsidiary or Affiliate of such Lender relating to
the proprietary purchase, sale, hedging and/or trading of commodities, including
Eligible Commodities, and any related derivative transactions.

“Tranche”: Eurodollar Loans, the then-current Interest Periods of which all
begin on the same date and end on the same later date (whether or not such
Eurodollar Loans shall originally have been made on the same day).

“Transferee”: as defined in Section 11.7(f).

 

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“Type”: as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.

“UCP 600”: as defined in Section 3.4(g).

“United States Dollars” and “$”: dollars in lawful currency of the United States
of America.

“Unreimbursed Amount”: as defined in Section 3.7(a).

“USA PATRIOT Act”: as defined in Section 5.24(a).

“Valuation Agent”: Muse, Stancil & Co. or such other business valuation firm
acceptable to the Borrower and the Administrative Agent.

“Value”: means with respect to any Eligible Commodity or Eligible RIN, the
Market Value thereof.

“Weighted Average Life to Maturity”: means, when applied to any Indebtedness at
any date, the number of years obtained by dividing (i) the sum of the products
obtained by multiplying (x) the amount of each then remaining installment or
other required scheduled payments of principal, including payment at final
maturity, in respect thereof, by (y) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making of such
payment by (ii) the then outstanding principal amount of such Indebtedness.

“Wells Fargo Credit Agreement”: that certain Credit Agreement, dated as of
September 24, 2012, by and among the Borrower, the lenders from time to time
party thereto and Wells Fargo Bank, National Association, as administrative
agent, as amended, supplemented, waived or modified prior to the date hereof.

“Wholly Owned Subsidiary”: as to any Person, any other Person all of the Capital
Stock of which (other than directors’ qualifying shares required by law) is
owned by such Person directly and/or through other Wholly Owned Subsidiaries.

“Working Capital Facility”: the Working Capital Facility Commitments and the
extensions of credit thereunder.

“Working Capital Facility Commitment”: at any date, as to any Working Capital
Facility Lender, the obligation of such Working Capital Facility Lender to make
Working Capital Facility Loans to the Borrower pursuant to Section 2.1 and to
participate in Swing Line Loans and Working Capital Facility Letters of Credit
in an aggregate principal and/or face amount at any one time outstanding not to
exceed the amount set forth opposite such Working Capital Facility Lender’s name
on Schedule 1.0 under the caption “Working Capital Facility Commitment” or, as
the case may be, in the Assignment and Acceptance pursuant to which such Working
Capital Facility Lender becomes a party hereto, as such amount may be changed
from time to time in accordance with the terms of this Agreement. As of the
Closing Date, the original aggregate amount of the Working Capital Facility
Commitments is $750,000,000.

“Working Capital Facility Commitment Percentage”: as to any Working Capital
Facility Lender at any time, the percentage which such Working Capital Facility
Lender’s Working Capital Facility Commitment then constitutes of the aggregate
Working Capital Facility Commitments of all Working Capital Facility Lenders at
such time (or, at any time after the Working Capital Facility Commitments shall
have expired or terminated, such Working Capital Facility Lenders’ Working
Capital Facility Credit Exposure Percentage).

 

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“Working Capital Facility Commitment Period”: the period from and including the
Closing Date to but not including the Working Capital Facility Commitment
Termination Date or such earlier date on which all of the Working Capital
Facility Commitments shall terminate as provided herein.

“Working Capital Facility Commitment Termination Date”: the date that is the
fifth anniversary of the Closing Date, or, if such date is not a Business Day,
the next preceding Business Day.

“Working Capital Facility Credit Exposure”: as to any Working Capital Facility
Lender at any time, the Available Working Capital Facility Commitment of such
Working Capital Facility Lender plus the amount of the Working Capital Facility
Extensions of Credit of such Working Capital Facility Lender.

“Working Capital Facility Credit Exposure Percentage”: as to any Working Capital
Facility Lender at any time, the fraction (expressed as a percentage), the
numerator of which is the Working Capital Facility Credit Exposure of such
Working Capital Facility Lender at such time and the denominator of which is the
aggregate Working Capital Facility Credit Exposures of all of the Working
Capital Facility Lenders at such time.

“Working Capital Facility Extensions of Credit”: at any date, as to any Working
Capital Facility Lender at any time, the aggregate outstanding principal amount
(without duplication) of Working Capital Facility Loans, Swing Line Loans and
Refunded Swing Line Loans made by such Working Capital Facility Lender plus
(without duplication) the amount of the undivided interest of such Working
Capital Facility Lender in any then-outstanding Working Capital Facility L/C
Obligations and Swing Line Loans.

“Working Capital Facility Increase”: as defined in Section 4.1(b).

“Working Capital Facility Issuing Lenders”: JPMorgan Chase Bank, BNP Paribas,
Societe Generale, Natixis, New York Branch and each other Working Capital
Facility Lender from time to time designated by the Borrower (and agreed to by
such Lender) as a Working Capital Facility Issuing Lender with the prior consent
of the Administrative Agent (such consent not to be unreasonably withheld,
conditioned or delayed), each in its capacity as issuer of any Working Capital
Facility Letter of Credit.

“Working Capital Facility L/C Obligations”: at any time, an amount equal to the
sum of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Working Capital Facility Letters of Credit and (b) the aggregate
amount of drawings under Working Capital Facility Letters of Credit which have
not then been reimbursed or converted to a Working Capital Facility Loan
pursuant to Section 3.7.

“Working Capital Facility L/C Participants”: with respect to any Working Capital
Facility Letter of Credit, all of the Working Capital Facility Lenders other
than the Working Capital Facility Issuing Lender thereof.

“Working Capital Facility L/C Participation Obligations”: the obligations of the
Working Capital Facility L/C Participants to purchase participations in the
obligations of the Working Capital Facility Issuing Lenders under outstanding
Working Capital Facility Letters of Credit pursuant to Section 3.6.

 

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“Working Capital Facility Lender”: each Lender having a Working Capital Facility
Commitment (or, after the termination of the Working Capital Facility
Commitments, each Lender holding Working Capital Facility Extensions of Credit),
and, as the context requires, includes the Working Capital Facility Issuing
Lenders. As of the Closing Date, each Working Capital Facility Lender is
specified on Schedule 1.0.

“Working Capital Facility Letter of Credit”: as defined in Section 3.1.

“Working Capital Facility Letter of Credit Sub-Limit”: $250,000,000 at any time
outstanding.

“Working Capital Facility Loans”: as defined in Section 2.1(a).

“Working Capital Facility Long Tenor Letters of Credit”: Working Capital
Facility Letters of Credit which are Long Tenor Letters of Credit.

“Working Capital Facility Maturity Date”: with respect to any Working Capital
Facility Loan, the earliest to occur of (i) the date on which the Working
Capital Facility Loans become due and payable pursuant to Section 9, (ii) the
date on which the Working Capital Facility Commitments terminate pursuant to
Section 4.1 and (iii) the Working Capital Facility Commitment Termination Date.

“Working Capital Facility Non-Maintenance Cap-Ex Extensions of Credit”: Working
Capital Facility Loans and Working Capital Facility Letters of Credit which are
used to finance Capital Expenditures other than for the maintenance of existing
assets and property of the Loan Parties as determined in good faith by the
Borrower.

“Working Capital Facility Non-Maintenance Cap-Ex Sub-Limit”: $10,000,000 at any
time outstanding.

“Working Capital Facility Performance Letters of Credit”: Working Capital
Facility Letters of Credit which are Performance Letters of Credit.

“Working Capital Facility Utilization”: with respect to the aggregate Working
Capital Facility Commitments, for any fiscal quarter, an amount (expressed as a
percentage) equal to the quotient of (a) the quotient of (i) the sum of the
applicable Total Working Capital Facility Extensions of Credit outstanding as of
the close of business on each day during such fiscal quarter divided by (ii) the
number of days in such fiscal quarter divided by (b) the aggregate Working
Capital Facility Commitments in effect on the last Business Day of such fiscal
quarter.

1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all
terms defined in this Agreement shall have the defined meanings when used in any
Notes or any other Loan Documents or any certificate or other document made or
delivered pursuant hereto or thereto.

(b) As used herein and in any Notes, any other Loan Documents and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the MLP and its Subsidiaries not defined in
Section 1.1 and (subject to Section 1.2(c)) accounting terms partly defined in
Section 1.1, to the extent not defined, shall have the respective meanings given
to them under GAAP (provided that all terms of an accounting or financial nature
used herein shall be construed, and all computations of amounts and ratios
referred to herein shall be made, without giving effect to (i) any election
under Accounting Standards Codification 825-10-25 (previously referred to as
Statement of Financial Accounting Standards 159) (or any other Accounting
Standards Codification or Financial

 

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Accounting Standard having a similar result or effect) to value any Indebtedness
or other liabilities of the Borrower or any Subsidiary at “fair value”, as
defined therein and (ii) any treatment of Indebtedness in respect of convertible
debt instruments under Accounting Standards Codification 470-20 (or any other
Accounting Standards Codification or Financial Accounting Standard having a
similar result or effect) to value any such Indebtedness in a reduced or
bifurcated manner as described therein, and such Indebtedness shall at all times
be valued at the full stated principal amount thereof).

(c) The words “hereof”, “herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule, Exhibit and
Annex references are to this Agreement unless otherwise specified.

(d) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

(e) Unless otherwise expressly provided herein, (i) references to Governing
Documents, agreements (including the Loan Documents) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements,
extensions, waivers, supplements and other modifications thereto and
(ii) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.

(f) As used herein and in any Notes, any other Loan Documents and any
certificate or other document made or delivered pursuant hereto or thereto,
(i) the words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation” and (ii) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
Capital Stock, securities, revenues, accounts, leasehold interests and contract
rights.

1.3 Rounding. Any financial ratios required to be maintained by the Borrower
and/or the Loan Parties pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).

SECTION 2 AMOUNT AND TERMS OF THE LOANS AND COMMITMENTS

2.1 Working Capital Facility Loans. (a) Subject to the terms and conditions
hereof, each Working Capital Facility Lender severally shall make revolving
credit loans under the Working Capital Facility Commitments (the “Working
Capital Facility Loans”) to the Borrower in an amount requested by the Borrower
from time to time during the Working Capital Facility Commitment Period in an
aggregate principal amount at any one time outstanding which, when added to such
Working Capital Facility Lender’s then outstanding Working Capital Facility
Extensions of Credit, does not exceed such Lender’s Working Capital Facility
Commitment at such time; provided that, after giving effect to any Working
Capital Facility Loan requested by the Borrower, each of the conditions set
forth in Section 6.2 shall be satisfied or waived. During the Working Capital
Facility Commitment Period, the Borrower may borrow, prepay the Working Capital
Facility Loans in whole or in part, and reborrow Working Capital Facility Loans,
all in accordance with the terms and conditions hereof.

(b) Working Capital Facility Loans may be denominated only in United States
Dollars and may from time to time be (i) Eurodollar Loans, (ii) Base Rate Loans
or (iii) a combination thereof, in each case, as the Borrower shall notify the
Administrative Agent in accordance with Sections 2.5 and 4.3. No Working Capital
Facility Loan shall be made as a Eurodollar Loan after the day that is one
(1) month prior to the Termination Date.

 

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2.2 [Reserved].

2.3 Swing Line Loans. (a) Subject to the terms and conditions hereof, the Swing
Line Lender shall make a portion of the credit under the Working Capital
Facility Commitments available to the Borrower by making swing line loans
(individually, a “Swing Line Loan” and, collectively, the “Swing Line Loans”) to
the Borrower from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding not to exceed the Swing Line Loan
Sub-Limit then in effect; provided that (i) the aggregate principal amount of
Swing Line Loans outstanding at any time (including any such new Swing Line
Loans), when aggregated with the Swing Line Lender’s Working Capital Facility
Commitment Percentage of the Total Working Capital Facility Extensions of
Credit, may exceed such Swing Line Lender’s Working Capital Facility Commitment
then in effect and (ii) the Borrower shall not request, and the Swing Line
Lender shall not make, any Swing Line Loan if, after giving effect to the making
of such Swing Line Loan, the aggregate amount of the Available Working Capital
Facility Commitments would be less than zero; provided further that, after
giving effect to any Swing Line Loan requested by the Borrower, each of the
conditions set forth in Section 6.2 shall be satisfied or waived. During the
Working Capital Facility Commitment Period, the Borrower may use the Swing Line
Loan Sub-Limit by borrowing, repaying and reborrowing, all in accordance with
the terms and conditions hereof.

(b) Swing Line Loans shall be Base Rate Loans.

2.4 Acquisition Facility Loans. (a) Subject to the terms and conditions hereof,
each Acquisition Facility Lender severally shall make loans under the
Acquisition Facility Commitments (the “Acquisition Facility Loans”) to the
Borrower in an amount requested by the Borrower from time to time during the
Acquisition Facility Commitment Period in an aggregate principal amount at any
one time outstanding which does not exceed such Acquisition Facility Lender’s
Acquisition Facility Commitment at such time; provided that, after giving effect
to any Acquisition Facility Loan requested by the Borrower, each of the
conditions set forth in Section 6.2 shall be satisfied or waived. During the
Acquisition Facility Commitment Period, the Borrower may borrow, prepay the
Acquisition Facility Loans in whole or in part, and reborrow Acquisition
Facility Loans, all in accordance with the terms and conditions hereof.

(b) Acquisition Facility Loans may be denominated only in United States Dollars
and may from time to time be (i) Eurodollar Loans, (ii) Base Rate Loans or
(iii) a combination thereof, in each case, as the Borrower shall notify the
Administrative Agent in accordance with Sections 2.5 and 4.3. No Acquisition
Facility Loan shall be made as a Eurodollar Loan after the day that is one
(1) month prior to the Termination Date.

2.5 Procedure for Borrowing Loans. (a) The Borrower may borrow Acquisition
Facility Loans, Working Capital Facility Loans and Swing Line Loans during the
applicable Commitment Period on any Business Day; provided that the Borrower
shall give the Administrative Agent, irrevocable notice (which notice must be
received by the Administrative Agent, (x) in the case of a Working Capital
Facility Loan or Acquisition Facility Loan, prior to 1:00 p.m. (New York City
time), (A) three (3) Business Days prior to the requested Borrowing Date, if all
or any part of the requested Working Capital Facility Loans or Acquisition
Facility Loans are to be initially Eurodollar Loans, or (B) on the same Business
Day of the requested Borrowing Date, otherwise, and (y) in the case of a Swing
Line Loan, prior to 3:00 p.m. (New York City time) on the requested Borrowing
Date, in each case, in the form attached hereto as Annex I (the “Borrowing
Notice”), specifying:

 

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(i) whether the borrowing is to be an Acquisition Facility Loan, Working Capital
Facility Loan or a Swing Line Loan;

(ii) the amount to be borrowed;

(iii) the requested Borrowing Date;

(iv) in the case of a Working Capital Facility Loan, whether the borrowing is to
be a Working Capital Facility Non-Maintenance Cap-Ex Extension of Credit;

(v) in the case of an Acquisition Facility Loan, whether the borrowing is to be
an Acquisition Facility Acquisition Extension of Credit, an Acquisition Facility
Working Capital Extension of Credit or an Acquisition Facility Maintenance
Cap-Ex Extension of Credit;

(vi) in the case of a Working Capital Facility Loan or an Acquisition Facility
Loan, the purpose of such Loan;

(vii) in the case of a Working Capital Facility Loan or an Acquisition Facility
Loan, whether the borrowing is to be a Base Rate Loan, a Eurodollar Loan or a
combination thereof; and

(viii) in the case of a Working Capital Facility Loan or an Acquisition Facility
Loan, if the borrowing is to be entirely or partly of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Periods therefor.

(b) Each borrowing of Acquisition Facility Loans, Working Capital Facility Loans
and Swing Line Loans shall be in an amount equal to (x) in the case of Base Rate
Loans, $100,000 or a whole multiple of $100,000 in excess thereof (or, if the
then aggregate Available Commitments applicable to such Loans of all Lenders of
such Loans are less than $100,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $1,000,000 or a whole multiple of $100,000 in excess thereof.

(c) Upon receipt of any notice from the Borrower pursuant to Section 2.5(a) with
respect to a requested borrowing of Acquisition Facility Loans, the
Administrative Agent shall promptly notify each Acquisition Facility Lender
thereof, and upon receipt of any notice from the Borrower pursuant to
Section 2.5(a) with respect to a requested borrowing of Working Capital Facility
Loans, the Administrative Agent shall promptly notify each Working Capital
Facility Lender thereof. Subject to the satisfaction or waiver of the conditions
contained in Section 6.2, each Working Capital Facility Lender shall make the
amount of its Working Capital Facility Commitment Percentage of each such
borrowing of Working Capital Facility Loans, and each Acquisition Facility
Lender shall make the amount of its Acquisition Facility Commitment Percentage
of each such borrowing of Acquisition Facility Loans, available to the
Administrative Agent for the account of the Borrower at the Administrative
Agent’s office specified in Section 11.2 prior to 3:00 p.m. (New York City time)
on the Borrowing Date requested by the Borrower in funds immediately available
to the Administrative Agent. Each Loan so requested will then promptly, and not
later than 3:30 p.m. (New York City time), be made available on the Borrowing
Date to the Borrower by the Administrative Agent by wire transfer to the account
of the Borrower set forth on Schedule 2.2 or to such other account as may be
specified by the Borrower in like funds as received by the Administrative Agent.

(d) Upon receipt of any notice from the Borrower pursuant to Section 2.5(a) with
respect to a requested borrowing of a Swing Line Loan, the Swing Line Lender
will make the amount of the requested Swing Line Loan available to the Borrower
within two (2) hours of receipt of the Borrowing Notice therefor on the
Borrowing Date by wire transfer to the account of the Borrower set forth on
Schedule 2.2 or such other account as may be specified by the Borrower.

 

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(e) [Reserved].

(f) [Reserved].

2.6 Refunding of Swing Line Loans. (a) The Borrower unconditionally promises to
pay each Swing Line Loan on or before 1:00 p.m. (New York City time) on the
fifth Business Day following the making of such Swing Line Loan (or, if earlier,
the Working Capital Facility Maturity Date), including by arranging to refinance
such Swing Line Loan with a Working Capital Facility Loan in accordance with
procedures specified herein. If the Administrative Agent shall not have received
full repayment in cash of any Swing Line Loan on or before 1:00 p.m. (New York
City time) on the day that is five (5) Business Days after the making of such
Swing Line Loan, the Swing Line Lender may, not later than 3:00 p.m. (New York
City time), on such day, request on behalf of the Borrower (which hereby
irrevocably authorizes the Swing Line Lender to act on its behalf solely in this
regard), that each Working Capital Facility Lender, including the Swing Line
Lender, make a Working Capital Facility Loan (which initially shall be a Base
Rate Loan) in an amount equal to such Working Capital Facility Lender’s Working
Capital Facility Commitment Percentage of the outstanding amount of such Swing
Line Loan (a “Refunded Swing Line Loan”). In accordance with Section 2.5(c),
unless any of the conditions contained in Section 6.2 shall not have been
satisfied or waived (in which event the procedures of clause (b) of this
Section 2.6 shall apply), each Working Capital Facility Lender shall make the
proceeds of its Working Capital Facility Loan available to the Swing Line Lender
for the account of the Swing Line Lender at the Swing Line Lender’s Applicable
Lending Office for Base Rate Loans prior to 4:00 p.m. (New York City time) in
funds immediately available on the Business Day such request is made. The
proceeds of such Working Capital Facility Loans shall be immediately applied to
repay the Refunded Swing Line Loans.

(b) If for any reason any Swing Line Loan cannot be refinanced by a Working
Capital Facility Loan in accordance with paragraph (a) of this Section 2.6, the
Swing Line Lender irrevocably agrees to grant to each Working Capital Lender,
and, to induce the Swing Line Lender to make Swing Line Loans hereunder, each
Working Capital Lender irrevocably agrees to accept and purchase from the Swing
Line Lender, on the terms and conditions hereinafter stated, for such Working
Capital Lender’s own account and risk on the date such Working Capital Facility
Loan was to have been made, an undivided participation interest in the
then-outstanding Swing Line Loans in an amount equal to its Working Capital
Facility Commitment Percentage of such Swing Line Loans that were to have been
repaid with such Working Capital Facility Loans (the “Swing Line Participation
Amount”). Each Working Capital Facility Lender shall pay to the Administrative
Agent for the account of the Swing Line Lender in immediately available funds
such Working Capital Lender’s Swing Line Participation Amount, and upon receipt
thereof, the Administrative Agent shall promptly distribute such funds to the
Swing Line Lender in like funds received.

(c) If any Working Capital Facility Lender failed to timely pay to the
Administrative Agent all or a portion of its Swing Line Participation Amount
required to be paid pursuant to Section 2.6(b), such overdue amounts shall bear
interest payable by such Working Capital Facility Lender at the rate per annum
applicable to Base Rate Loans under the Working Capital Facility until such
overdue amounts are paid in full.

(d) Each Working Capital Facility Lender’s obligation to make Working Capital
Facility Loans referred to in Section 2.6(a) and to purchase participation
interests pursuant to Section 2.6(b) shall be absolute and unconditional and
shall not be affected by any circumstance, including (i) any set-off,
counterclaim, recoupment, defense or other right which such Working Capital
Facility Lender

 

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may have against the Swing Line Lender, the Borrower, or any other Person for
any reason whatsoever, (ii) the occurrence or continuance of an Event of
Default, (iii) any failure to satisfy any condition precedent to the applicable
extension of credit set forth in Section 6, (iv) any adverse change in the
condition (financial or otherwise) of any Loan Party, (v) any breach of this
Agreement or any Loan Document by any Loan Party or any other Lender or (vi) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.

(e) Whenever, at any time after the Swing Line Lender has received from any
Working Capital Facility Lender its Swing Line Participation Amount, the Swing
Line Lender receives any payment on account thereof (whether directly from the
Borrower or otherwise, including proceeds of collateral applied thereto by the
Swing Line Lender) or any payment of interest on account thereof, the Swing Line
Lender shall distribute to such Working Capital Facility Lender its Working
Capital Facility Commitment Percentage of such payments; provided, however, that
in the event that any such payment received by the Swing Line Lender shall be
required to be returned by the Swing Line Lender, such Working Capital Facility
Lender shall return to the Swing Line Lender the portion thereof previously
distributed by the Swing Line Lender to it in like funds received.

2.7 [Reserved].

2.8 Commitment Fee. Subject to Section 4.18(b)(i), the Borrower agrees to pay to
the Administrative Agent for the account of each Lender under each Facility a
commitment fee for the period from and including the first day of the Commitment
Period for such Facility to but not including the Commitment Termination Date
for such Facility, computed at the Applicable Commitment Fee Rate for such
Facility on the average daily amount of the Available Commitment of such Lender
under such Facility during the period for which payment is made, payable
quarterly in arrears on the fifth day after the first Business Day of each
January, April, July and October (or, if such day is not on a Business Day, the
next succeeding Business Day) and on the Commitment Termination Date for such
Facility or such earlier date as all of the Commitments under such Facility
shall terminate as provided herein, commencing on the first of such dates to
occur after the date hereof.

SECTION 3 LETTERS OF CREDIT

3.1 Working Capital Facility Letters of Credit. On the Closing Date, upon the
satisfaction of the conditions specified in Section 6.1, each of the Existing
Working Capital Facility Letters of Credit shall automatically be deemed to be
Working Capital Facility Letters of Credit outstanding under this Agreement.
Subject to the terms and conditions hereof, each Working Capital Facility
Issuing Lender severally agrees to issue letters of credit (“Working Capital
Facility Letters of Credit”) for the account of the Borrower for use by the
Borrower or any other Loan Party from time to time during the Working Capital
Facility Commitment Period; provided that, after giving effect to any Working
Capital Facility Letter of Credit requested by the Borrower:

(i) each of the conditions set forth in Section 6.2 shall be satisfied or
waived; and

(ii) Section 3.4 shall not be contravened by any Loan Party at any time.

The Borrower acknowledges and agrees that, for the avoidance of doubt, each
Letter of Credit designated as Working Capital Facility Letter of Credit shall
be entirely a Working Capital Facility Letter of Credit and no portion thereof
will be an Acquisition Facility Letter of Credit.

 

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3.2 Acquisition Facility Letters of Credit. On the Closing Date, upon the
satisfaction of the conditions specified in Section 6.1, each of the Existing
Acquisition Facility Letters of Credit shall automatically be deemed to be
Acquisition Facility Letters of Credit outstanding under this Agreement. Subject
to the terms and conditions hereof, each Acquisition Facility Issuing Lender
severally agrees to issue letters of credit (“Acquisition Facility Letters of
Credit”) for the account of the Borrower from time to time during the
Acquisition Facility Commitment Period; provided that, after giving effect to
any Acquisition Facility Letter of Credit requested by the Borrower:

(i) each of the conditions set forth in Section 6.2 shall be satisfied or
waived; and

(ii) Section 3.4 shall not be contravened by any Loan Party at any time.

The Borrower acknowledges and agrees that, for the avoidance of doubt, each
Letter of Credit designated as Acquisition Facility Letter of Credit shall be
entirely an Acquisition Facility Letter of Credit and no portion thereof will be
a Working Capital Facility Letter of Credit.

3.3 Procedure for the Issuance and Amendments of Letters of Credit.

(a) Procedure for the Issuance of Letters of Credit. The Borrower may from time
to time request the issuance of an Acquisition Facility Letter of Credit from an
Acquisition Facility Issuing Lender or a Working Capital Facility Letter of
Credit from a Working Capital Facility Issuing Lender by delivering to the
Issuing Lender of such Letter of Credit and the Administrative Agent a Letter of
Credit Request, and such other certificates, documents and other papers and
information as such Issuing Lender may reasonably request (consistent with
requests made by such Issuing Lender from other similarly situated account
parties). Such Letter of Credit Request shall specify:

(i) whether the Letter of Credit requested is to be an Acquisition Facility
Letter of Credit or a Working Capital Facility Letter of Credit;

(ii) the maximum amount of such Letter of Credit and the account party therefor;

(iii) in the case of a Working Capital Facility Letter of Credit, if such
Working Capital Facility Letter of Credit is a Performance Letter of Credit, a
Long Tenor Letter of Credit and/or a Trade Letter of Credit;

(iv) in the case of an Acquisition Facility Letter of Credit, if such Letter of
Credit is to be an Acquisition Facility Acquisition Extension of Credit, an
Acquisition Facility Working Capital Extension of Credit or an Acquisition
Facility Maintenance Cap-Ex Extension of Credit;

(v) the requested date on which such Letter of Credit is to be issued;

(vi) the purpose and nature of the proposed Letter of Credit;

(vii) the name and address of the beneficiary of such Letter of Credit;

(viii) the expiration or termination date of the Letter of Credit;

(ix) the documents to be presented by such beneficiary in the case of a drawing
or demand for payment thereunder; and

(x) the delivery instructions for such Letter of Credit.

 

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If requested by the Issuing Lender, the Borrower also shall submit a letter of
credit application on the Issuing Bank’s standard form in connection with any
request for a Letter of Credit. To the extent that any material provision of any
such application is inconsistent with the provisions of this Section 3 or adds
events of default, grants of security, or remedies not already contained in the
Loan Documents, the provisions of this Section 3 and this Agreement shall apply
and such provision shall not be given effect.

(b) Procedure for Amendments of Letters of Credit. The Borrower may from time to
time request an amendment (including any extension) to any outstanding Letter of
Credit by delivering to the Issuing Lender of such Letter of Credit and the
Administrative Agent a Letter of Credit Request which shall specify:

(i) the Letter of Credit to be amended;

(ii) the requested date of the proposed amendment;

(iii) the nature of the proposed amendment; and

(iv) the delivery instructions for such amendment.

(c) Timing of Letter of Credit Requests. A Letter of Credit Request must be
received by the applicable Issuing Lender and the Administrative Agent by no
later than 3:00 p.m. (New York City time), on the date such Letter of Credit is
to be issued or amended, or such other time as previously agreed between the
Issuing Lender thereof and the Borrower. Upon the issuance of any Letter of
Credit or any amendment to an outstanding Letter of Credit, the Administrative
Agent and the Acquisition Facility Lenders or the Working Capital Facility
Lenders, as applicable, shall be entitled to assume that the Letter of Credit
Request and certificates, documents and other papers and information reasonably
requested by the Issuing Lender in connection therewith were completed and
delivered to the satisfaction of such Issuing Lender.

(d) Validation Procedure. Upon receipt of a Letter of Credit Request by an
Issuing Lender, such Issuing Lender will confirm with the Administrative Agent
(by telephone and in writing) that the Administrative Agent has received a copy
of such Letter of Credit Request and, if not, such Issuing Lender will provide
the Administrative Agent, with a copy thereof. Upon receipt by such Issuing
Lender of confirmation from the Administrative Agent that the requested Letter
of Credit or amendment is permitted in accordance with the terms hereof, such
Issuing Lender shall, on the requested date, issue a Letter of Credit for the
account of the Borrower or enter into the applicable amendment, as the case may
be, in each case in accordance with such Issuing Lender’s usual and customary
business practices.

3.4 General Terms of Letters of Credit. (a) Each Letter of Credit is to be
denominated only in United States Dollars.

(b) Each Letter of Credit shall, subject to Section 3.4(c), expire no later than
ninety (90) days after the date of issuance (or extension), unless such Letter
of Credit is, subject to the Long Tenor Letter of Credit Sub-Limit, a Long Tenor
Letter of Credit, or, subject to the Performance Letter of Credit Sub-Limit, a
Performance Letter of Credit, in which case, such Letter of Credit shall expire
no later than the earlier of three hundred sixty-four (364) days after the date
of issuance and the Termination Date applicable thereto; provided that (i) at
any time, the aggregate face of amount of all Letters of Credit issued with an
expiration date after the Termination Date applicable thereto shall not exceed
$300,000,000; (ii) all Letters of Credit with an expiration date after the
Termination Date applicable thereto shall be returned and cancelled (with the
beneficiary’s consent) or Cash Collateralized at least 15 Business Days prior to
the Termination Date applicable thereto and (iii) no such Letter of Credit may
be issued with an expiration date after the date that is six months after the
Termination Date applicable thereto.

 

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(c) Upon request by the Borrower in the applicable Letter of Credit Request, the
relevant Issuing Lender may, in its sole and absolute discretion, agree to issue
a Letter of Credit that has automatic renewal provisions (each, an “Auto-Renewal
Letter of Credit”). Unless otherwise agreed upon by the applicable Issuing
Lender at its sole discretion, the Borrower shall make a specific request to
such Issuing Lender for any renewal of an Auto-Renewal Letter of Credit, such
prior notice to be delivered to the applicable Issuing Lender and the
Administrative Agent no later than thirty (30) days prior to the expiration or
termination date of such Auto-Renewal Letter of Credit (the date of the delivery
of such notice, the “Renewal Notice Date”); provided that, unless otherwise
agreed upon by the applicable Issuing Lender at its sole discretion, the
Borrower shall provide to the applicable Issuing Lender and the Administrative
Agent written notice of its intent to not renew such an Auto-Renewal Letter of
Credit no later than thirty (30) days prior to the expiration or termination
date of such Auto-Renewal Letter of Credit (the date of the delivery of such
notice, the “Non-Renewal Notice Date”). Once an Auto-Renewal Letter of Credit
has been issued (or is permitted to be outstanding hereunder in the case of an
outstanding Letter of Credit that is an Auto-Renewal Letter of Credit), the
Lenders shall be deemed to have authorized (but the Lenders may not require)
such Issuing Lender to permit the renewal of such Letter of Credit at any time
to a date not later than six (6) months after the Termination Date; provided,
however, that no Issuing Lender shall permit any renewal of an Auto-Renewal
Letter of Credit if (A) such Issuing Lender has determined that it would have no
obligation at such time to issue such Letter of Credit in its renewed form under
the terms hereof (by reason of the provisions of Section 3.4 or 6.2 or
otherwise), (B) after giving effect to any such renewal, the earlier of the
(x) expiration date of such Auto-Renewal Letter of Credit and (y) the next
occurring Non-Renewal Notice Date of such Auto-Renewal Letter of Credit would
occur after the date that is six (6) months after the Termination Date, or
(C) it has received notice in writing on or before the date that is two
(2) Business Days before the Renewal Notice Date from the Administrative Agent,
any Lender or the Borrower that one or more of the applicable conditions
specified in Section 3.4 or 6.2 is not then satisfied. Notwithstanding anything
to the contrary contained herein, no Issuing Lender shall have any obligation to
permit the renewal of any Auto-Renewal Letter of Credit at any time if any of
the applicable conditions specified in Section 6.2 is not then satisfied.

(d) If any Issuing Lender (other than JPMorgan Chase Bank or an Affiliate
thereof) shall issue, extend or amend any Letter of Credit without obtaining
prior consent of the Administrative Agent (as provided in Section 3.3(d)), or if
any Issuing Lender (other than, in the case of clause (i) below, JPMorgan Chase
Bank or an Affiliate thereof) shall permit the extension or renewal of an
Auto-Renewal Letter of Credit (i) without giving timely prior notice to the
Administrative Agent or (ii) when such extension or renewal is not permitted
hereunder (as provided in sub-section (c) above), such Letter of Credit
(A) shall for all purposes be deemed to have been issued by such Issuing Lender
solely for its own account and risk and (B) shall not be considered a Letter of
Credit outstanding under this Agreement, and no Lender shall be deemed to have
any participation therein, effective as of the date of such issuance, amendment,
extension or renewal, as the case may be, unless the Required Lenders expressly
consent thereto; provided, however, that to be considered a Letter of Credit
outstanding under this Agreement, the consent of all Lenders shall be required
to the extent that any such issuance, amendment, extension or renewal is not
then permitted hereunder by reason of the provisions of this Section 3.4.

(e) Notwithstanding anything herein to the contrary, an Issuing Lender is under
no obligation to issue or provide any Letter of Credit (including any renewal of
an Auto-Renewal Letter of Credit) or renew, extend or amend any Letter of Credit
unless consented to by such Issuing Lender and the Administrative Agent, if:

(i) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain such Issuing Lender from
issuing, renewing, extending or amending such Letter of Credit, or any
Requirement of Law applicable to such Issuing Lender or any request or directive
(whether or not having the force of Law) from any Governmental Authority with

 

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jurisdiction over such Issuing Lender shall prohibit, or request that such
Issuing Lender refrain from, the issuance, renewal, extension or amending of a
Letter of Credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Lender with respect to such Letter of Credit any
restriction, reserve or capital requirement (in the case of an amendment of a
Letter of Credit, for which such Issuing Lender is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon such Issuing
Lender any unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which such Issuing Lender in good faith deems material to it;
or

(ii) such Letter of Credit or the requested amendment is not in form and
substance reasonably acceptable to such Issuing Lender thereof or the issuance
of such Letter of Credit shall violate any applicable policies of such Issuing
Lender.

(f) Within one (1) Business Day after its delivery of any Letter of Credit or
any amendment to a Letter of Credit to an advising bank with respect thereto or
to the beneficiary thereof, the Issuing Lender thereof will also deliver to the
Borrower and the Administrative Agent, a true and complete copy of such Letter
of Credit or amendment.

(g) Each Letter of Credit shall be subject to the International Standby
Practices (“ISP 98”) International Chamber of Commerce Publication No. 590 or
Uniform Customs and Practice for Documentary Credits No. 600 (“UCP 600”), as
applicable, and to the extent not inconsistent with ISP 98 or UCP 600, the Laws
of the State of New York.

3.5 Fees, Commissions and Other Charges.

(a) Letter of Credit Fee. The Borrower shall pay to the Administrative Agent,
for the account of the relevant Issuing Lender and the Acquisition Facility L/C
Participants or Working Capital Facility L/C Participants, as applicable, a
letter of credit commission, with respect to each outstanding Letter of Credit,
in an amount equal to the Applicable L/C Fee Rate times the average daily
maximum amount of such Letter of Credit; provided that such letter of credit
commission shall not be in an amount less than $500 for the period during which
such Letter of Credit is outstanding, and, in each case, such commission shall
be payable to the Acquisition Facility L/C Participants or Working Capital
Facility L/C Participants, as applicable, and the Issuing Lender of such Letter
of Credit to be shared ratably among them in accordance with the average daily
amount of their respective Acquisition Facility Commitment Percentages and
Working Capital Facility Commitment Percentages. Such commission shall be
payable quarterly in arrears on each L/C Fee Payment Date.

(b) Fronting Fee. In addition to the fees and commissions in Sections 3.5(a) and
(c), the Borrower shall pay each relevant Issuing Lender an amount equal to
0.20% per annum times the face amount of each Letter of Credit issued by such
Issuing Lender. Such fee shall be nonrefundable and shall be payable quarterly
in arrears on each L/C Fee Payment Date.

(c) Other Charges. In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse each Issuing Lender of any Letter of Credit for
such normal and customary costs, expenses and fees as are incurred or charged by
such Issuing Lender in issuing, effecting payment under, amending, processing,
negotiating or otherwise administering any Letter of Credit. The Borrower shall
pay each relevant Issuing Lender of any Letter of Credit (i) a fee of no less
than $500 for any issuance of a Letter of Credit by such Issuing Lender and
(ii) a fee of $100 for any amendment of a Letter of Credit issued by such
Issuing Lender (which fees shall be in addition to any fee payable under the
preceding sentence for such issuance or amendment).

 

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(d) Distribution of Fees. The Administrative Agent shall, within two
(2) Business Days following its receipt thereof, distribute to the relevant
Issuing Lenders and the L/C Participants all fees and commissions received by
the Administrative Agent for their respective accounts pursuant to this
Section 3.5.

3.6 L/C Participations. (a) Each Issuing Lender irrevocably agrees to grant and
hereby grants to each Relevant L/C Participant, and, to induce the Issuing
Lenders to issue Letters of Credit hereunder, each Relevant L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
each such Issuing Lender, on the terms and conditions hereinafter stated, for
such Relevant L/C Participant’s own account and risk, an undivided interest in
such Issuing Lender’s obligations and rights under each Relevant Letter of
Credit issued or provided by such Issuing Lender hereunder and the amounts paid
by such Issuing Lender thereunder equal to such Relevant L/C Participant’s
Commitment Percentage.

(b) Each L/C Participant’s obligation to accept and purchase for such L/C
Participant’s own account and risk, an undivided participation interest in an
Issuing Lender’s obligations and rights under each Letter of Credit issued or
provided by such Issuing Lender hereunder and the amounts paid by such Issuing
Lender thereunder equal to such L/C Participant’s Commitment Percentage thereof
shall be absolute and unconditional and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment, defense or
other right which such L/C Participant may have against any Issuing Lender, the
Borrower, or any other Person for any reason whatsoever, (ii) the occurrence or
continuance of a Default or an Event of Default, (iii) any adverse change in the
condition (financial or otherwise) of any Loan Party, (iv) any breach of this
Agreement or any other Loan Document by any Loan Party or any other Lender or
(v) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.

(c) The obligations of the L/C Participants to purchase participations in the
obligations of the Issuing Lenders under outstanding Letters of Credit pursuant
to Section 3.6 shall survive the Termination Date with respect to Letters of
Credit which have been Cash Collateralized pursuant to Section 3.4(b) until the
earliest of (i) the expiration date for such Letters of Credit and all drawings
thereunder having been repaid in full, (ii) the date the entire amount available
under such Letters of Credit are drawn and such drawings are repaid and no
further drawings are permitted under such Letters of Credit, and (iii) the date
that is six (6) months after the Termination Date applicable to such Letters of
Credit; provided that, notwithstanding any other provision of this
Section 3.6(c), with respect to any Letter of Credit having an expiration date
following the Termination Date applicable thereto (such a Letter of Credit, a
“Post-Termination LOC”), in no event shall the obligations of the L/C
Participants to purchase participations in the obligations of an Issuing Lender
under a Post-Termination LOC pursuant to Section 3.6(a) expire or terminate
prior to the Business Day following the expiration, cancellation or termination
of the last remaining outstanding Post-Termination LOC and the payment in full
of all drawings, if any, thereunder.

(d) If for any reason any Unreimbursed Amount cannot be refinanced by an L/C
Reimbursement Loan in accordance with Section 3.7(c), each Relevant L/C
Participant shall, on or before the deadline for such Relevant Facility Loan to
have been made, pay to the Administrative Agent for the account of the
applicable Issuing Lender in immediately available funds such Relevant L/C
Participant’s Commitment Percentage of such Unreimbursed Amount, and upon
receipt thereof, the Administrative Agent shall promptly distribute such funds
to the applicable Issuing Lender in like funds received.

(e) If any L/C Participant fails to timely pay to the Administrative Agent all
or a portion of its Commitment Percentage of any Unreimbursed Amount required to
be paid pursuant to Section 3.6(d), such overdue amounts shall bear interest
payable by such L/C Participant at the rate per annum applicable to Base Rate
Loans under the applicable Facility until such overdue amounts are paid in full.

 

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(f) Whenever, at any time after any Issuing Lender has received from any
Relevant L/C Participant its Commitment Percentage of any Unreimbursed Amount,
such Issuing Lender receives any payment on account thereof (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by such Issuing Lender), or any payment of interest on account thereof, such
Issuing Lender shall distribute to such Relevant L/C Participant its Commitment
Percentage of such payments; provided, however, that in the event that any such
payment received by such Issuing Lender shall be required to be returned by such
Issuing Lender, such Relevant L/C Participant shall return to such Issuing
Lender the portion thereof previously distributed by such Issuing Lender to it
in like funds received.

3.7 Reimbursement Obligations of the Borrower. (a) Upon receipt by the relevant
Issuing Lender from the beneficiary of any Letter of Credit of any notice of a
drawing or demand for payment under such Letter of Credit, such Issuing Lender
shall promptly notify the Borrower and the Administrative Agent thereof. If the
Borrower receives notice (confirmed by telephone) from such Issuing Lender of a
drawing or demand for payment under a Letter of Credit prior to 1:00 p.m. (New
York City time), on any Business Day, the Borrower shall reimburse such Issuing
Lender on such Business Day for the Unreimbursed Amount of such Letter of
Credit. If the Borrower receives notice (confirmed by telephone) from such
Issuing Lender of a drawing or demand for payment under a Letter of Credit at or
after 1:00 p.m. (New York City time), on any Business Day, the Borrower shall so
reimburse such Issuing Lender on the Business Day immediately following the
Business Day upon which such notice was received by the Borrower. Such
reimbursement shall be made directly to such Issuing Lender in an amount in
United Stated Dollars equal to (i) the amount so paid and (ii) any Non-Excluded
Taxes and any reasonable fees, charges or other costs or expenses incurred by
such Issuing Lender at its Applicable Lending Office in immediately available
funds (such amount that has not been reimbursed by the Borrower being, the
“Unreimbursed Amount”).

(b) If the Borrower fails to fully reimburse any Issuing Lender pursuant to
Section 3.7(a) at the time and on the due date specified in such Section (the
“Reimbursement Date”), such Issuing Lender shall so notify the Administrative
Agent (with a copy to the Borrower), which notice shall be provided on a
Business Day, and specify in such notice the amount of the Unreimbursed Amount.
Immediately upon receipt of such notice from such Issuing Lender, the
Administrative Agent shall notify each Relevant L/C Participant of the
Reimbursement Date, the Unreimbursed Amount, and the amount of such Relevant L/C
Participant’s Commitment Percentage thereof.

(c) If there shall be any Unreimbursed Amounts owing to any Issuing Lender on or
after such Unreimbursed Amounts were due pursuant to Section 3.7(a), the
relevant Issuing Lender may request on behalf of the Borrower (which hereby
irrevocably authorizes such Issuing Lender to act on its behalf solely in this
regard), that each Relevant Facility Lender make a Relevant Facility Loan (which
initially shall be a Base Rate Loan) in an amount equal to such Relevant
Facility Lender’s Commitment Percentage of the outstanding amount of such
Unreimbursed Amount (an “L/C Reimbursement Loan”). In accordance with
Section 2.5(c), unless any of the conditions contained in Section 6.2 shall not
have been satisfied or waived (in which event the procedures set forth in
Section 3.6 shall apply), each Relevant Facility Lender shall make the proceeds
of its Relevant Facility Loan available to the Administrative Agent prior to
11:00 a.m. (New York City time) in funds immediately available on the Business
Day next succeeding the date such request is made. The proceeds of such Relevant
Facility Loans shall be immediately applied to repay the applicable Issuing
Lender.

 

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(d) With respect to Unreimbursed Amounts that are not paid on the date due,
interest shall be payable on any and all Unreimbursed Amounts from the date such
amounts become payable (whether at stated maturity, by acceleration, demand or
otherwise) until payment in full (either in cash or upon the making of a
Relevant Facility Loan) at the applicable rate which would be payable on any
outstanding Relevant Facility Loans that were Base Rate Loans which were then
overdue.

3.8 Obligations Absolute. (a) The Borrower’s obligations under this Section 3
shall be absolute, irrevocable and unconditional and shall be performed strictly
in accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Lender under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower’s obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Lender, nor any of their
Related Persons, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Lender; provided that the foregoing shall not be construed to excuse the
Issuing Lender from liability to the Borrower to the extent of any direct
damages (as opposed to special, indirect, consequential or punitive damages,
claims in respect of which are hereby waived by the Borrower to the extent
permitted by applicable law) suffered by the Borrower that are caused by the
Issuing Lender’s failure to exercise care when determining whether drafts and
other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of the Issuing Lender (as finally
determined by a court of competent jurisdiction), the Issuing Lender shall be
deemed to have exercised care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Lender
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

3.9 Role of the Issuing Lenders. (a) The responsibility of any Issuing Lender to
the Borrower in connection with any draft presented for payment under any Letter
of Credit issued on behalf of the Borrower shall, in addition to any payment
obligation expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered by or on behalf
of the beneficiary under such Letter of Credit in connection with such
presentment are in conformity with such Letter of Credit. In addition, each
Lender and the Borrower agree that, in paying any drawing or demand for payment
under any Letter of Credit, the Issuing Lender of such Letter of Credit shall
not have any responsibility to inquire as to the validity or accuracy of any
document presented in connection with such drawing or demand for payment or the
authority of the Person executing or delivering the same.

(b) No Agent-Related Person nor any of the respective correspondents,
participants or assignees of any Issuing Lender shall be liable to any Lender
for: (i) any action taken or omitted in connection herewith in respect of any
Letter of Credit at the request or with the approval or deemed

 

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approved of the Required Lenders; (ii) any action taken or omitted in respect of
any Letter of Credit in the absence of gross negligence or willful misconduct;
or (iii) the due execution, effectiveness, validity or enforceability of any
Letter of Credit or any document delivered in connection with the issuance or
payment of such Letter of Credit.

(c) The Borrower hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude the Borrower from pursuing such rights and remedies as it may have
against such beneficiary or transferee. No Agent-Related Person, nor any of the
respective correspondents, participants or assignees of the Issuing Lenders
shall be liable or responsible for any of the matters described in Section 3.8;
provided, however, that anything in such Section or elsewhere herein to the
contrary notwithstanding, the Borrower may have a claim against any Issuing
Lender and such Issuing Lender may be liable to the Borrower, to the extent, but
only to the extent, of any direct, as opposed to consequential or exemplary,
damages suffered by the Borrower which the Borrower proved were caused (x) by
such Issuing Lender’s willful failure to pay under any Letter of Credit after
the presentation to it by the beneficiary of documents strictly complying with
the terms and conditions of such Letter of Credit or (y) as a result of gross
negligence or willful misconduct by such Issuing Lender with respect to the
payment by such Issuing Lender of any Letter of Credit against presentation of
any document or certificate that does not strictly comply with the terms of such
Letter of Credit. In furtherance and not in limitation of the foregoing: (i) any
Issuing Lender may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) no Issuing Lender shall be responsible for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

3.10 Letter of Credit Request. To the extent that any material provision of any
Letter of Credit Request related to any Letter of Credit is inconsistent with
the provisions of this Section 3, the provisions of this Section 3 shall apply.

SECTION 4 GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT

4.1 Increase, Termination or Reduction of Commitments. (a) The Borrower shall
have the right, from time to time, upon not less than four (4) Business Days’
notice to the Administrative Agent, to terminate the Working Capital Facility
Commitments and Acquisition Facility Commitments or, from time to time, reduce
the Commitments on a ratable basis; provided, that no such termination or
reduction of the relevant Commitments shall be permitted to the extent that,
after giving effect thereto and to any prepayments of the Loans and Cash
Collateralization of the Letters of Credit made on or before the effective date
thereof, (i) the Total Working Capital Facility Extensions of Credit would
exceed the aggregate amount of all Working Capital Facility Commitments of all
Working Capital Facility Lenders then in effect or (ii) the Total Acquisition
Facility Extensions of Credit would exceed the aggregate amount of all
Acquisition Facility Commitments of all Acquisition Facility Lenders then in
effect. Any such reduction shall be in an amount equal to $1,000,000 or a whole
multiple thereof and shall reduce permanently and ratably the applicable
relevant Commitment then in effect.

(b) At any time during the Increase Period, (x) the aggregate Working Capital
Facility Commitments may be increased to an amount not to exceed $950,000,000 (a
“Working Capital Facility Increase”) and (y) the aggregate Acquisition Facility
Commitments may be increased to an amount not to exceed $450,000,000 (an
“Acquisition Facility Increase”; a Working Capital Facility Increase and an
Acquisition Facility Increase, each being a “Facility Increase”) pursuant to the
following procedure:

 

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(i) Not more than thirty (30) days and not less than fifteen (15) days prior to
the proposed effective date of any Facility Increase with respect to any
Facility, the Borrower may make a written request for such Facility Increase to
the Administrative Agent, who shall forward a copy of any such request to the
Lenders under such Facility. Each request by the Borrower pursuant to the
immediately preceding sentence shall specify a proposed effective date of such
increase (the “Requested Increase Effective Date”), the aggregate amount of such
requested increase (the “Requested Increase Amount”), and shall constitute an
invitation to each of the Lenders under such Facility to increase its Commitment
under such Facility by its Commitment Percentage of such Requested Increase
Amount.

(ii) Each Lender under such Facility, acting in its sole discretion and with no
obligations to increase its Commitment under such Facility pursuant to this
Section 4.1(b), shall by written notice to the Borrower and the Administrative
Agent advise the Borrower and the Administrative Agent whether or not such
Lender agrees to all or any portion of such increase in its Commitment under
such Facility within ten (10) days after the Borrower’s request. Any such Lender
may accept all of its Commitment Percentage of such increase, a portion of such
increase, or decline to accept any of such increase in its Commitment under such
Facility. If any such Lender shall not have responded affirmatively within such
ten (10) day period, such Lender shall be deemed to have rejected the Borrower’s
request for an increase in such Commitment in full. Promptly following the
conclusion of such ten (10) day period, the Administrative Agent shall notify
the Borrower of the results of the request for the applicable Facility Increase.

(iii) If the aggregate amount of the increases in the Commitments under any
Facility which the Lenders under such Facility have accepted in accordance with
Section 4.1(b)(ii) shall be less than the Requested Increase Amount, the
Administrative Agent (subject to the approval of the Administrative Agent and
the Issuing Lenders under such Facility, such approvals not to be unreasonably
withheld, delayed or conditioned) may offer to such additional Persons
(including the Lenders under such Facility), as may be agreed by the Borrower
and the Administrative Agent, the opportunity to make available such amount of
new Commitments under such Facility as may be required so that the aggregate
increases in the Commitments under such Facility by the existing Lenders
thereunder together with such new Commitments by such other Persons (the “New
Lenders”) shall equal the Requested Increase Amount (the aggregate Facility
Increase provided by such existing Lenders and the New Lenders, the “Increase
Amount”). Such Increase Amount shall be in an amount equal to $5,000,000 or a
whole multiple thereof. The effectiveness of all such increases in the
Commitments under such Facility are subject to the satisfaction of the following
conditions: (A) each Lender that so elects to increase its Commitment under such
Facility (each an “Increasing Lender”), each New Lender, the Administrative
Agent and the Borrower shall have executed and delivered an agreement,
substantially in the form attached hereto as Exhibit P (an “Increase and New
Lender Agreement”); (B) (i) with respect to the Working Capital Facility,
aggregate Working Capital Facility Commitment after giving effect to such
increases shall not exceed $950,000,000 and (ii) with respect to the Acquisition
Facility, the aggregate Acquisition Facility Commitments after giving effect to
such increase shall not exceed $450,000,000; (C) any fees and other amounts
(including pursuant to Section 11.6) payable by the Borrower in connection with
such increase and accession shall have been paid; (D) no Default or Event of
Default has occurred and is continuing or would result from such increase in the
Commitments; (E) delivery of an Availability Certification dated as of the date
of such increase and (F) the Administrative Agent shall have received in respect
of the Mortgaged Properties (1) such amendments to the Mortgage and Security
Agreements as are in form and substance reasonably satisfactory to the
Administrative Agent, in each case, executed and delivered by a duly authorized
officer of the relevant Loan Party to the extent necessary to reflect the
increase in the Working Capital Facility or the

 

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Acquisition Facility, as applicable (it being understood that, unless requested
by the Administrative Agent, no amendment shall increase the amount secured
thereby if the same will result in the payment of additional mortgage recording
tax) and (2) with respect to each such Mortgage and Security Agreement, a
date-down endorsement to the title insurance policy covering such Mortgage and
Security Agreement (or if a date-down is not available for a particular
jurisdiction, a new title insurance policy in the same insured amount as
originally issued or marked up unconditional title commitment, pro forma policy
or binder for such insurance) in each case in form and substance not materially
less favorable to the Administrative Agent or the Lenders as such title policies
or marked up unconditional title commitments, pro forma policies or binders
delivered on or prior to the Closing Date, (3) evidence satisfactory to it that
all premiums in respect of a related date-down endorsement or title policy (or
policies) have been paid and (4) to the extent required by applicable Law, a
standard flood hazard determination for each Mortgaged Property, and with
respect to any Mortgaged Property that is located in a special flood hazard
area, evidence of flood insurance in form and substance reasonably satisfactory
to the Administrative Agent. For the avoidance of doubt, Extensions of Credit
made under any Facility Increase shall bear interest at the rate otherwise
applicable to corresponding Extensions of Credit under the applicable Facility.

(iv) On any Requested Increase Effective Date with respect to any Facility,
(A) each Increasing Lender or New Lender thereof shall make available to the
Administrative Agent such amounts in immediately available funds as the
Administrative Agent shall determine for the benefit of the other Lenders under
such Facility as being required in order to cause (after giving effect to such
increase and the use of such amounts to make payments to the other Lenders under
such Facility) each Lender’s portion of the outstanding Loans of all Lenders
under such Facility to equal its Commitment Percentage of such Loans, (B) the
Borrower shall be deemed to have repaid and reborrowed all outstanding Loans of
all the Lenders under such Facility to equal its Commitment Percentage of such
outstanding Loans as of the date of the applicable Facility Increase (with such
reborrowing to consist of the Types of Loans, with related Interest Periods, if
applicable, specified in a notice delivered by the Borrower in accordance with
the requirements of Section 4.3) and (C) the participations in Letters of Credit
shall be adjusted to reflect changes in the applicable Commitment Percentages.
The deemed payments made pursuant to clause (B) of the immediately preceding
sentence in respect of each Eurodollar Loan shall be subject to indemnification
by the Borrower pursuant to the provisions of Section 4.14 if the deemed payment
occurs other than on the last day of the related Interest Periods; provided,
that the Administrative Agent and each Lender shall cooperate with the Borrower
to reduce and/or eliminate any such indemnification payments to the extent
reasonably possible if such cooperation would not subject the Administrative
Agent or such Lender, as applicable, to any unreimbursed cost or expense and
would not otherwise be disadvantageous to the Administrative Agent or such
Lender.

(v) Upon the Requested Increase Effective Date with respect to any Facility,
Schedule 1.0 of the Increase and New Lender Agreement, which shall reflect the
Commitments and the Commitment Percentages of the Lenders under such Facility at
such time, shall be deemed to supersede Schedule 1.0 hereto without any further
action or consent of any party. The Administrative Agent shall cause a copy of
such revised Schedule 1.0 to be available to the Issuing Lenders and the
Lenders.

4.2 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate for such Eurodollar Loan determined for
such day plus the Applicable Margin.

(b) Each Base Rate Loan (including Swing Line Loans) shall bear interest at a
rate per annum equal to the Base Rate plus the Applicable Margin.

 

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(c) If all or a portion of the principal amount of any Loan or Reimbursement
Obligation shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), all outstanding Obligations (whether or not overdue)
(to the extent legally permitted) shall bear interest at a rate per annum that
is equal to (i) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus
2.00%, (ii) in the case of Reimbursement Obligations, the rate applicable to
Base Rate Loans in respect of the applicable Facility plus 2.00%, and (iii) in
the case of any interest payable on any Loan or Reimbursement Obligation or any
commitment fee or other amount payable hereunder, at a rate per annum equal to
the rate then applicable to Base Rate Loans under the Working Capital Facility
plus 2.00%, in each case, from the date of such nonpayment until such amount not
paid when due is paid in full (after as well as before judgment).

(d) Interest shall be payable in arrears on each Interest Payment Date or on the
applicable date with respect to interest payable pursuant to Section 4.2(c)
above.

4.3 Conversion and Continuation Options. (a) The Borrower may elect from time to
time to Convert Eurodollar Loans to Base Rate Loans by giving the Administrative
Agent at least two (2) Business Days’ prior irrevocable notice of such election
in the form attached hereto as Annex II (the “Continuation/Conversion Notice”),
such Continuation/Conversion Notice specifying the amount and the date such
Conversion is to be made; provided that any such Conversion of Eurodollar Loans
may only be made on the last day of an Interest Period with respect thereto. The
Borrower may elect from time to time to Convert Base Rate Loans to Eurodollar
Loans by giving the Administrative Agent irrevocable notice of such election (in
the form of a Continuation/Conversion Notice) prior to 1:00 p.m. (New York City
time) at its New York office, three (3) Business Days before the date of such
election. Any such notice of Conversion to Eurodollar Loans shall specify the
amount to be Converted, the date of such Conversion and the length of the
initial Interest Period or Interest Periods therefor. Upon receipt of any such
notice the Administrative Agent shall promptly notify each Lender thereof. All
or any part of outstanding Eurodollar Loans or Base Rate Loans may be Converted
as provided herein; provided that (i) no Base Rate Loan may be Converted into a
Eurodollar Loan when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Required Lenders have reasonably determined that
such a Conversion is not appropriate and (ii) no Base Rate Loan may be Converted
into a Eurodollar Loan after the date that is one (1) month prior to the
Termination Date.

(b) Any Eurodollar Loans may be Continued as such upon the expiration of the
then current Interest Period with respect thereto by the Borrower giving the
Administrative Agent irrevocable notice (in the form of a
Continuation/Conversion Notice) prior to 1:00 p.m. (New York City time), at its
New York office, in each case, three (3) Business Days before the date such
Eurodollar Loans are to be Continued, in accordance with the applicable
provisions of the term “Interest Period” set forth in Section 1.1, of the length
of the next Interest Period to be applicable to such Loans. If the Borrower
fails to give timely notice requesting a Continuation, then the applicable Loans
shall be converted to Base Rate Loans. Any automatic Conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Loans.

(c) During the existence of an Event of Default, no Loan may be requested as,
Converted to or Continued as Eurodollar Loans if the Required Lenders have
reasonably determined that such a request, Conversion or Continuation is not
appropriate.

4.4 Minimum Amounts of Tranches; Maximum Number of Tranches. (a) All borrowings,
Conversions and Continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Eurodollar Loans comprising each Tranche shall be equal to $1,000,000 or
a whole multiple of $100,000 in excess thereof.

 

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(b) No more than twenty (20) Tranches of Eurodollar Loans shall be outstanding
at any one time; provided that for each Facility Increase in an aggregate
principal amount of $50,000,000, two (2) additional Tranches of Eurodollar Loans
may be outstanding (up to a maximum of twenty-five (25) Tranches of Eurodollar
Loans) at any one time.

4.5 Repayment of Loans; Evidence of Debt. (a) The Borrower unconditionally
promises to pay to the Administrative Agent for the account of the appropriate
Lender or to the relevant Issuing Lender, as applicable, the then unpaid
principal amount of each Acquisition Facility Loan and each Working Capital
Facility Loan on the Maturity Date therefor. The Borrower hereby further agrees
to pay interest on the unpaid principal amount of the Loans and Reimbursement
Obligations of the Borrower from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 4.2.

(b) Each Lender shall maintain in accordance with its usual practice a record or
records setting forth all of the indebtedness of the Borrower to such Lender
resulting from each Loan or other Extension of Credit of such Lender from time
to time, including the amounts of principal and interest payable and paid to
such Lender from time to time under this Agreement.

(c) The Administrative Agent, on behalf of the Borrower, shall maintain the
Register required by Section 11.7(d), and shall include a subaccount therein for
each Lender, in which it shall record (i) the amount of each Loan and a copy of
the Note, if any, evidencing such Loan, the Type thereof and each Interest
Period applicable thereto, (ii) the amount of any principal or interest or fee
due and payable or to become due and payable from the Borrower to each Lender
hereunder, (iii) the amount of such Lender’s share of any Unreimbursed Amount
and (iv) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender’s share thereof.

(d) The entries made in the Register and the records of each Lender maintained
pursuant to Section 4.5(b) shall, to the extent permitted by applicable Law, be
prima facie evidence of the existence and amounts of the obligations of the
Borrower therein recorded (absent manifest error); provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans and
other extensions of credit hereunder made to the Borrower by such Lender in
accordance with the terms of this Agreement.

(e) The Borrower agrees that, upon the request to the Administrative Agent by
any Lender, the Borrower will execute and deliver to such Lender a promissory
note evidencing the Working Capital Facility Loans, the Swing Line Loans or the
Acquisition Facility Loans, as applicable, of such Lender, substantially in the
form of Exhibit A-1, A-2 or A-3, as applicable, with appropriate insertions as
to date and principal amount (individually, a “Note” and, collectively, the
“Notes”).

4.6 Optional Prepayments. The Borrower may at any time and from time to time
prepay the Loans made to it, in whole or in part, without premium or penalty,
upon notice by the Borrower in the form attached hereto as Annex III (the
“Notice of Prepayment”) delivered to the Administrative Agent (x) no later than
1:00 p.m. (New York City time) at least three (3) Business Days prior to the
proposed prepayment date in the case of Eurodollar Loans, (y) no later than 1:00
p.m. (New York City time) on the proposed prepayment date in the case of Base
Rate Loans, and (z) not later than 1:00 p.m. (New York City time) on the
proposed prepayment date in the case of Swing Line Loans, in each case, which
notice shall specify (x) the date and amount of prepayment, (y) which Loans
shall be prepaid and (z) whether the prepayment is of Base Rate Loans,
Eurodollar Loans or a combination thereof, and, if of a combination thereof, the
amount allocable to each; provided that if a Eurodollar Loan is prepaid on any
day other than the last day of the Interest Period applicable thereto, or the
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revokes any notice of prepayment previously delivered pursuant to this
Section 4.6 after the date/time specified above, the Borrower shall also pay any
amounts owing pursuant to Section 4.14. Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date specified therein, together with any amounts payable pursuant to
Section 4.14. Partial prepayments pursuant to this Section 4.6 shall be in an
aggregate principal amount of $100,000 or a whole multiple thereof. If the
Borrower shall make any prepayment of a Swing Line Loan after 1:00 p.m. (New
York City time) on the fifth Business Day following the making of such Swing
Line Loan and the Swing Line Lender shall have requested from the Lenders
Refunded Swing Line Loans in accordance with Section 2.6(a) on account of such
Swing Line Loan, the Administrative Agent shall apply such prepayment in the
following order: first, to any other Swing Line Loans outstanding at such time
and second, to any outstanding Working Capital Facility Loans that are Base Rate
Loans of the Borrower. If the amount of such prepayment is greater than the
outstanding amount of such Swing Line Loans and such Working Capital Facility
Loans that are Base Rate Loans at the time such prepayment is made, the
Administrative Agent shall promptly remit the excess to the Borrower.

4.7 Mandatory Prepayments. (a) If on any date, the sum of the Total Working
Capital Facility Extensions of Credit and the Acquisition Facility Working
Capital Extensions of Credit exceed the Borrowing Base, then (i) the Borrower
shall specify, at its sole discretion, one or more of the Working Capital
Facility Loans, the Acquisition Facility Working Capital Loans or the Swing Line
Loans of the Borrower to be prepaid and the Borrower shall prepay such Loan or
Loans, and/or (ii) the Borrower shall Cash Collateralize, replace or decrease
(if the beneficiary of such Letter of Credit agrees to such decrease) the amount
of outstanding Working Capital Facility Letters of Credit or Acquisition
Facility Working Capital Letters of Credit by an amount sufficient to eliminate
such excess, no later than three (3) Business Days immediately following such
date.

(b) If on any date (i) the Total Acquisition Facility Acquisition Extensions of
Credit shall exceed the Eligible Acquisition Asset Value, (ii) the Total
Acquisition Facility Extensions of Credit shall exceed the aggregate Acquisition
Facility Commitments, (iii) the Total Working Capital Facility Extensions of
Credit shall exceed the aggregate Working Capital Facility Commitments, and/or
(iv) any extension of credit under this Agreement shall result in any Applicable
Sub-Limit being exceeded, then (A) the Borrower shall specify, at its sole
discretion, one or more Loans of the Borrower to be prepaid and the Borrower
shall prepay such Loans and/or (B) the Borrower shall Cash Collateralize,
replace or decrease (if the beneficiary of such Letter of Credit agrees to such
decrease) the amount of outstanding Letters of Credit by an amount sufficient to
eliminate such excess, no later than three (3) Business Days immediately
following such date.

(c) Unless the Required Lenders shall otherwise agree, if on any date the
Borrower or any Guarantor shall receive Net Cash Proceeds from any individual
Asset Sale or Recovery Event, then, unless a Reinvestment Notice shall be
delivered in respect thereof within three (3) Business Days thereafter, 100% of
such Net Cash Proceeds shall be applied on such third Business Day toward the
prepayment of the relevant Loans (provided, however, that the Borrower shall
specify, at its sole discretion, the Loans of the Borrower to be so prepaid) and
Cash Collateralization of the relevant Letters of Credit in accordance with
Sections 4.7(d), (e) and (f); provided that, notwithstanding the foregoing, on
each Reinvestment Prepayment Date, an amount equal to the Reinvestment
Prepayment Amount with respect to the relevant Reinvestment Event shall be
applied toward the prepayment of the relevant Loans and Cash Collateralization
of the relevant Letters of Credit as set forth in Sections 4.7(d) and (e).

(d) Amounts prepaid pursuant to Section 4.7(c) from the proceeds of Asset Sales
or Recovery Events with respect to Acquisition Assets shall be applied, first,
to the prepayment of the Acquisition Facility Acquisition Loans that are Base
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Acquisition Facility Acquisition Loans that are Eurodollar Loans, third, to the
Cash Collateralization of the Acquisition Facility Acquisition Letters of
Credit, fourth, to the prepayment of the Swing Line Loans, fifth, to the
prepayment of Acquisition Facility Working Capital Loans that are Base Rate
Loans, sixth, to the prepayment of Acquisition Facility Working Capital Loans
that are Eurodollar Loans, seventh, to the Cash Collateralization of the
Acquisition Facility Working Capital Letters of Credit, eighth, to the
prepayment of Working Capital Facility Loans that are Base Rate Loans, ninth, to
the prepayment of Working Capital Facility Loans that are Eurodollar Loans, and
tenth, to the Cash Collateralization of the Working Capital Facility Letters of
Credit.

(e) Amounts prepaid pursuant to Section 4.7(c) from the proceeds of Asset Sales
or Recovery Events with respect to assets included in the Borrowing Base shall
be applied, first, to the prepayment of the Swing Line Loans, second, to the
prepayment of Acquisition Facility Working Capital Loans that are Base Rate
Loans, third, to the prepayment of Acquisition Facility Working Capital Loans
that are Eurodollar Loans, fourth, to the Cash Collateralization of the
Acquisition Facility Working Capital Letters of Credit, fifth, to the prepayment
of Working Capital Facility Loans that are Base Rate Loans, sixth, to the
prepayment of Working Capital Facility Loans that are Eurodollar Loans, seventh,
to the Cash Collateralization of the Working Capital Facility Letters of Credit,
eighth, to the prepayment of the Acquisition Facility Acquisition Loans that are
Base Rate Loans, ninth, to the prepayment of the Acquisition Facility
Acquisition Loans that are Eurodollar Loans, and tenth, to the Cash
Collateralization of the Acquisition Facility Acquisition Letters of Credit.

(f) The Borrower shall notify the Administrative Agent (and, in the case of
prepayment of a Swing Line Loan, the Swing Line Lender) by written notice of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Loan, not
later than 1:00 p.m. (New York City time), three (3) Business Days before the
date of the prepayment, (ii) in the case of prepayment of a Base Rate Loan, not
later than 1:00 p.m. (New York City time) on the date of the prepayment and
(iii) in the case of prepayment of a Swing Line Loan, not later than 1:00 p.m.
(New York City time) on the date of prepayment. Each such notice shall specify
the prepayment date, the principal amount of each Loan or portion thereof to be
prepaid and, in the case of a mandatory prepayment, a reasonably detailed
calculation of the required amount of such prepayment. Promptly following
receipt of any such notice (other than a notice relating solely to Swing Line
Loans), the Administrative Agent shall advise the Lenders of the contents
thereof. Each prepayment of an extension of credit shall be applied ratably to
the Loans included in the prepaid extension of credit and otherwise in
accordance with this Section 4.7(f). Prepayments shall be accompanied by accrued
interest to the extent required by Section 4.2.

(g) Any prepayment of Loans pursuant to this Section 4.7, and the rights of the
Lenders in respect thereof, are subject to the provisions of Section 4.9.

(h) For the avoidance of doubt, no amounts prepaid under this Section 4.7 shall
permanently reduce any Commitments.

4.8 Computation of Interest and Fees. (a) All fees and interest on Base Rate
Loans that are calculated using clauses (a) or (c) of the definition of “Base
Rate” and Eurodollar Loans shall be calculated on the basis of a 360-day year
for the actual days elapsed. Interest on Base Rate Loans calculated using clause
(b) of the definition of “Base Rate” shall be calculated on the basis of a
365/366-day year, as the case may be, for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of each Eurodollar Rate for any Eurodollar Loans
outstanding. Any change in the interest rate on a Loan resulting from a change
in the Base Rate shall become effective as of the opening of business on the day
on which such change becomes effective. The Administrative Agent shall as soon
as practicable notify the Borrower and the Lenders of the effective date and the
amount of each such change in interest rate.

 

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(b) Each determination of an interest rate by the Administrative Agent pursuant
to any provision of this Agreement shall be conclusive and binding on the
Borrower and the Lenders in the absence of manifest error. The Administrative
Agent shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in determining any
interest rate pursuant to Section 4.2(a).

4.9 Pro Rata Treatment and Payments. (a) Other than as expressly set forth
herein, each borrowing by the Borrower from the Lenders hereunder and any
reduction of the Commitments under any Facility shall be made pro rata according
to the respective Commitment Percentages, as applicable, of the Lenders under
such Facility. Other than as expressly set forth herein, each payment (including
each prepayment) by the Borrower on account of principal of and interest and
fees on the Loans and Reimbursement Obligations under any Facility shall be made
pro rata according to the respective outstanding principal amounts of the Loans
and Reimbursement Obligations under such Facility, respectively, then held by
the Lenders.

(b) All payments (including prepayments) to be made by the Borrower hereunder on
account of principal of Loans (other than Base Rate Loans on any day other than
the Maturity Date of such Loans) shall be accompanied by a payment in an amount
equal to all accrued and unpaid interest on such Loans. All payments (including
prepayments) to be made by the Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set-off or
counterclaim and shall be made prior to 1:00 p.m. (New York City time) on the
due date thereof to the Administrative Agent for the account of the applicable
Lenders at the Administrative Agent’s office specified in Section 11.2 in United
States Dollars in immediately available funds. The Administrative Agent shall
distribute such payments to the appropriate Lenders promptly upon receipt in
like funds as received. If any payment hereunder (other than payments on
Eurodollar Loans) becomes due and payable on a day other than a Business Day,
such payment obligation shall be extended to the next succeeding Business Day,
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month in
which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.

(c) Unless the Administrative Agent shall have been notified in writing by any
Lender prior to a borrowing that such Lender will not make the amount that would
constitute its Commitment Percentage of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent on demand such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this Section 4.9 shall be conclusive in the
absence of manifest error. If such Lender’s Commitment Percentage of such
borrowing is not made available to the Administrative Agent by such Lender
within three (3) Business Days of such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to Base Rate Loans on demand from the Borrower (without
duplication of the interest otherwise applicable thereto).

 

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(d) Subject to Sections 4.7(d) and (e) and Section 4.18, the application of any
payment of Loans (including optional and mandatory prepayments), along with the
application of any proceeds obtained upon the exercise of remedies by the Agents
for the Lenders hereunder or under any Loan Document, shall be made to each
Lender based upon its Commitment Percentage, first, to Base Rate Loans and,
second, to Eurodollar Loans. Each payment of the Eurodollar Loans shall be
accompanied by accrued interest to the date of such payment on the amount paid.

4.10 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender or the Administrative Agent with any request or directive (whether
or not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:

(i) does or shall subject any Lender or the Administrative Agent to any Tax or
increased Tax of any kind whatsoever with respect to this Agreement or any other
Loan Document, any Loan or any Letter of Credit made by it, or change the basis
of taxation of payments to such Lender or the Administrative Agent in respect
thereof (provided, however, that the foregoing shall not apply to (x) any U.S.
federal withholding Tax or Other Taxes, as to which Section 4.11 shall govern,
or (y) any Tax imposed on or measured by a Lender’s or the Administrative
Agent’s net income (to the extent it does not change the basis of taxation),
including any changes in the rate of net income Taxes (or franchise Taxes in
lieu thereof) imposed on a Lender or the Administrative Agent, as applicable);

(ii) does or shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against assets
held by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination of
the Eurodollar Rate; or

(iii) does or shall impose on such Lender any other condition, cost or expense
(provided, however, that the foregoing shall not apply to (x) any U.S. federal
withholding Tax or Other Taxes, as to which Section 4.11 shall govern, or
(y) any Tax imposed on or measured by a Lender’s net income (to the extent it
does not change the basis of taxation), including any changes in the rate of net
income Taxes (or franchise Taxes in lieu thereof) imposed on a Lender); and the
result of any of the foregoing is to increase the cost to such Lender or the
Administrative Agent of making, Converting into, Continuing or maintaining this
Agreement or any other Loan Document, any Loan or issuing, providing and
maintaining any Letter of Credit or holding an interest in any Issuing Lender’s
obligations thereunder, or to reduce any amount receivable by the Lender or the
Administrative Agent in respect thereof, then the Lender or the Administrative
Agent shall use reasonable efforts to designate a different Applicable Lending
Office for funding or booking Loans or issuing Letters of Credit if, in the
judgment of such Lender or the Administrative Agent, as applicable, such
designation (x) would eliminate or reduce amounts payable pursuant to this
Section 4.10 or eliminate the need to provide the notice specified in clause
(c) of this Section 4.10 and (y) would not subject such Lender or the
Administrative Agent to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender or the Administrative Agent;

then, in any such case, and to the extent that such cost is not fully
compensated for by an adjustment to the Eurodollar Rate, the Base Rate or any
fee on a Letter of Credit or mitigated pursuant to a change in such Lender’s
Applicable Lending Office, the Borrower shall promptly, after receiving notice
as specified in clause (c) of this Section 4.10, pay such Lender or the
Administrative Agent, as applicable, such additional amount or amounts as will
compensate such Lender or the Administrative Agent for such increased cost or
reduced amount receivable on a net after-Tax basis.

 

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(b) If any Lender shall have determined that the adoption of or any change in
any Requirement of Law regarding capital adequacy or liquidity or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy or liquidity (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof shall have the effect
of reducing the rate of return on such Lender’s or such corporation’s capital as
a consequence of its obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s or such corporation’s
policies with respect to capital adequacy and liquidity) by an amount deemed by
such Lender to be material, then from time to time, the Borrower shall promptly
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction on a net after-Tax basis.

(c) If any Lender becomes entitled to claim any additional amounts pursuant to
this Section 4.10, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.
A certificate prepared in good faith as to any additional amounts payable
pursuant to this Section 4.10 submitted by such Lender to the Borrower (with a
copy to the Administrative Agent) shall be conclusive in the absence of manifest
error. The agreements in this Section 4.10 shall survive the termination of this
Agreement and the payment of the Loans, Reimbursement Obligations and all other
amounts payable hereunder. No Lender shall be entitled to claim any additional
amounts pursuant to Section 4.10(a) and (b) for circumstances which occurred
more than 180 days prior to the date such Lender makes a request for payment
hereunder.

(d) It is agreed and understood that, for all purposes under this Agreement
(including for purposes of this Section 4.10 and Section 4.11) that (i) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines, requirements or directives thereunder or issued in connection
therewith on in implementation thereof and (ii) all requests, rules, guidelines,
requirements or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to be an adoption
or change in a Requirement of Law made subsequent to the date hereof, regardless
of the date enacted, adopted, implemented or issued.

4.11 Taxes. (a) Any and all payments by or on behalf of each Loan Party or any
Agent under or in respect of this Agreement or any other Loan Documents to which
such Loan Party is a party shall, unless otherwise required by law, be made free
and clear of, and without deduction or withholding for or on account of, any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities (including penalties, interest and additions
to tax) with respect thereto, whether now or hereafter imposed, levied,
collected, withheld or assessed by any taxation authority or other Governmental
Authority (collectively, “Taxes”). If any Loan Party or the Agent shall be
required under any Requirement of Law to deduct or withhold any Taxes from or in
respect of any sum payable under or in respect of this Agreement, the Loans, the
Letters of Credit or any of the other Loan Documents to any Agent or Lender
(including for purposes of this Section 4.11 and Section 4.10 any assignee,
successor or participant), as determined in good faith by the applicable Loan
Party or Agent, (i) such Loan Party or Agent shall make all such deductions and
withholdings in respect of Taxes, (ii) such Loan Party or Agent shall pay the
full amount deducted or withheld in respect of Taxes to the relevant taxation
authority or other Governmental Authority in accordance with any Requirement of
Law, and (iii) in the case of any Non-Excluded Taxes, the sum payable by such
Loan Party shall be increased as may be necessary so that after such Loan Party
or Agent has made all required deductions and withholdings (including deductions
and withholdings applicable to additional amounts payable under this
Section 4.11) such Lender or Agent receives an amount equal to the sum it would
have received had no such deductions or withholdings been made or required in
respect of Non-Excluded Taxes. For purposes

 

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of this Agreement the term “Non-Excluded Taxes” are Taxes other than, (i) in the
case of a Lender or Agent, Taxes that are imposed on it by the jurisdiction (or
political subdivision thereof) under the laws of which such Lender or Agent is
organized or has its applicable lending office, unless such Taxes are imposed
solely as a result of such Lender or Agent having executed, delivered or
performed its obligations or received payments under, or enforced, this
Agreement, the Loans, the Letters of Credit or any of the other Loan Documents,
in which case such Taxes will be treated as Non-Excluded Taxes, (ii) net income,
franchise or branch profit taxes imposed on a Lender or an Agent (A) by the
jurisdiction (or political subdivision thereof) under the laws of which such
Lender or Agent is organized or has its principal office or applicable lending
office or (B) that are Other Connection Taxes, (iii) any U.S. federal
withholding Tax imposed on any payment under the law as of the date hereof,
(iv) any Tax imposed on a Transferee (other than an assignee pursuant to a
request by the Borrower under Section 4.17) or successor Agent to the extent
that, under applicable Law in effect on the date of the transfer to such
Transferee or such successor Agent, the amount of such Tax exceeds the
Non-Excluded Taxes, if any, that were imposed on payments to the transferring
Lender or predecessor Agent, or (v) any U.S. federal withholding Tax imposed
under FATCA. For the avoidance of doubt, the exclusions described in the
preceding sentence will apply to the same effect to direct or indirect
beneficial owners of a Lender that is fiscally transparent.

(b) In addition, each Loan Party hereby agrees to pay any present or future
stamp, recording, documentary, excise, property or value-added taxes, or similar
Taxes, charges or levies that arise from any payment made under or in respect of
this Agreement or any other Loan Document or from the execution, delivery or
registration of, any performance under, or otherwise with respect to, this
Agreement or any other Loan Document (collectively, “Other Taxes”).

(c) Each Loan Party hereby agrees to indemnify each Lender that is not fiscally
transparent and, in the case of a Lender that is fiscally transparent, its
direct or indirect beneficial owners for which such Loan Party has received
proof of such ownership and entitlement to the benefits of this Section 4.11
(subject to the same conditions for, and exclusions from indemnification as are
applicable to a Lender that is not fiscally transparent), and each Agent for,
and to hold each harmless against, the full amount of Non-Excluded Taxes and
Other Taxes, and the full amount of Taxes of any kind imposed by any
jurisdiction on amounts payable under this Section 4.11 imposed on or paid by
such Lender or Agent, and any liability (including penalties, additions to tax,
interest and expenses) arising therefrom or with respect thereto. The indemnity
by the Loan Parties provided for in this Section 4.11(c) shall apply and be made
whether or not the Non-Excluded Taxes or Other Taxes for which indemnification
hereunder is sought have been correctly or legally asserted. Amounts payable by
any Loan Party under the indemnity set forth in this Section 4.11(c) shall be
paid within ten (10) days from the date on which the Lender or Agent makes
written demand therefor.

(d) Within thirty (30) days after the date of any payment of Taxes, the
applicable Loan Party (or any Person making such payment on behalf of the Loan
Parties) shall furnish to Lender and/or Agent for its own account a certified
copy of the original official receipt evidencing payment thereof or evidence of
such payment as is reasonably satisfactory to such Lender or Agent.

(e) For purposes of this Section 4.11(e), the terms “United States” and “United
States person” shall have the meanings specified in Section 7701 of the Code.
Each Lender (including for avoidance of doubt any assignee, successor or
participant) or Agent (including for the avoidance of doubt any successor)
(i) that is not incorporated under the laws of the United States, any State
thereof, or the District of Columbia or (ii) whose name does not include
“Incorporated”, “Inc.”, “Corporation”, “Corp.”, “P.C.”, “N.A.”, “National
Association”, “insurance company”, or “assurance company” (in the case of a
Lender, a “Non-Exempt Lender” and, in the case of an Agent, a “Non-Exempt
Agent”) shall on or prior to the Closing Date, or in the case of a Transferee of
a Lender or a successor to an Agent, on or prior to the date such Person becomes
a Transferee or Agent, deliver or cause to be delivered to each of the
Administrative Agent and the Borrower originals of the following properly
completed and duly executed documents:

 

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(i) in the case of a Non-Exempt Lender or Non-Exempt Agent that is not a United
States person or is a foreign disregarded entity for U.S. federal income tax
purposes that is entitled to provide such form, a complete and executed (x) U.S.
Internal Revenue Service Form W-8BEN with Part II completed in which Lender
claims the benefits of a tax treaty with the United States providing for a zero
or reduced rate of withholding (or any successor forms thereto), including all
appropriate attachments or (y) U.S. Internal Revenue Service Form W-8ECI (or any
successor forms thereto); or

(ii) in the case of a Non-Exempt Lender or Non-Exempt Agent that is an
individual, (x) a complete and executed U.S. Internal Revenue Service Form
W-8BEN (or any successor forms thereto) and a certificate substantially in the
form of the applicable Exhibit D-1, D-2, D-3 or D-4 (a “Section 4.11
Certificate”) or (y) a complete and executed U.S. Internal Revenue Service Form
W-9 (or any successor forms thereto); or

(iii) in the case of a Non-Exempt Lender or Non-Exempt Agent that is organized
under the laws of the United States, any State thereof, or the District of
Columbia, a complete and executed U.S. Internal Revenue Service Form W-9 (or any
successor forms thereto); or

(iv) in the case of a Non-Exempt Lender or Non-Exempt Agent that (x) is not
organized under the laws of the United States, any State thereof, or the
District of Columbia and (y) is treated as a corporation for U.S. federal income
tax purposes, a complete and executed U.S. Internal Revenue Service Form W-8BEN
(or any successor forms thereto) and a Section 4.11 Certificate; or

(v) in the case of a Non-Exempt Lender or Non-Exempt Agent that (A) is treated
as a partnership or other non-corporate entity and (B) is not organized under
the laws of the United States, any State thereof, or the District of Columbia,
(x)(i) a complete and executed U.S. Internal Revenue Service Form W-8IMY (or any
successor forms thereto) (including all required documents and attachments) and
(ii) a Section 4.11 Certificate, and (y) if the Non-Exempt Lender or Non-Exempt
Agent is not a withholding foreign partnership or withholding foreign trust,
without duplication, with respect to each of its beneficial owners and the
beneficial owners of such beneficial owners looking through chains of owners to
individuals or entities that are treated as corporations for U.S. federal income
tax purposes (all such owners, “beneficial owners”), the documents that would be
provided by each such beneficial owner pursuant to this Section 4.11(e) if each
such beneficial owner were a Lender; or

(vi) in the ease of a Non-Exempt Lender or Non-Exempt Agent that is disregarded
for U.S. federal income tax purposes, the document that would be provided by its
beneficial owner pursuant to this Section 4.11(e) if such beneficial owner were
the Lender; or

(vii) in the case of a Non-Exempt Lender or Non-Exempt Agent that (A) is not a
United States person and (B) is acting in the capacity of an “intermediary” (as
defined in U.S. Treasury Regulations), (x)(i) a U.S. Internal Revenue Service
Form W-8IMY (or any successor form thereto) (including all required documents
and attachments) and (ii) a Section 4.11 Certificate, and (y) if the
intermediary is a “non-qualified intermediary” (as defined in U.S. Treasury
Regulations), from each person upon whose behalf the “non-qualified
intermediary” is acting the documents that would be provided by such person
pursuant to this Section 4.11(e) if each such person were a Lender.

Each Lender that is not a Non-Exempt Lender or Non-Exempt Agent shall, at or
prior to the Closing Date, or in the case of a Transferee, on or prior to the
date such Person becomes a Transferee, deliver to each of the Administrative
Agent and the Borrower a complete and executed U.S. Internal Revenue Service
Form W-9 (or any successor forms thereto).

 

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If a payment made to a Lender under any Loan Document would be subject to U.S.
federal withholding Tax imposed by FATCA if such Lender were to fail to comply
with the applicable reporting requirements of FATCA (including those contained
in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall
deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
paragraph, “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

Each Person required to deliver any forms, certificates or other evidence with
respect to United States federal withholding tax matters pursuant to
Section 4.11(e) hereby agrees, from time to time after the initial delivery by
such Person of such forms, certificates or other evidence, whenever a lapse in
time or change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such Person, to
the extent it is entitled to do so, shall promptly (x) deliver to each of the
Administrative Agent and the Borrower new originals of any forms or other
certifications required under this Section 4.11(e), properly completed and duly
executed by such Person, together with any other certificate or statement of
exemption required in order to confirm or establish that such Person is entitled
to an exemption or reduction in the amount of United States federal income tax
required to be withheld from payments to such Person under this Agreement or any
other Loan Documents or (y) notify the Administrative Agent and the Borrower of
its inability to deliver any such forms, certificates or other evidence in which
case such Person shall not be required to deliver any such form or certificate
pursuant to this Section 4.11(e).

(f) For any period with respect to which a Lender has failed to provide the
Borrower with the appropriate form, certificate or other document described in
Section 4.11(e), if required (other than if such failure is due to a change in
any Requirement of Law, or in the interpretation or application thereof,
occurring after the date on which a form, certificate or other document
originally was required to be provided by such Lender), such Lender shall not be
entitled to indemnification or additional amounts under Section 4.11(a) or
(c) with respect to Non-Excluded Taxes imposed by the United States by reason of
such failure; provided, however, that should a Lender become subject to
Non-Excluded Taxes because of its failure to deliver a form, certificate or
other document required hereunder, the Borrower shall use commercially
reasonable efforts as such Lender shall reasonably request to assist such Lender
in recovering such Non-Excluded Taxes.

(g) Without prejudice to the survival of any other agreement of the Loan Parties
hereunder, the agreements and obligations of the Loan Parties contained in this
Section 4.11 shall survive the termination of this Agreement and the other Loan
Documents. Nothing contained in Section 4.10 or this Section 4.11 shall require
any Agent or Lender to make available any of its tax returns or any other
information that it deems to be confidential or proprietary.

4.12 Lending Offices. Loans of each Type made by any Lender shall be made and
maintained at such Lender’s Applicable Lending Office for Loans of such Type.

 

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4.13 Credit Utilization Reporting. Within five (5) Business Days after the end
of each calendar month, each Issuing Lender shall deliver a report to the
Administrative Agent, substantially in the form of Annex IV (a “Credit
Utilization Summary”), setting forth, for each Letter of Credit issued or
provided by such Issuing Lender, (i) the amount available to be drawn or
utilized under such Letters of Credit as of the end of such calendar month and
(ii) the amount of any drawings, payments or reductions of such Letters of
Credit during such month, in each case, on an aggregate and per Letter of Credit
basis. Upon receiving notice from the Borrower or the beneficiary under a Letter
of Credit issued or provided by such Issuing Lender of a reduction or
termination of such Letter of Credit, each Issuing Lender shall notify the
Administrative Agent thereof.

4.14 Indemnity. The Borrower agrees to indemnify each Lender and to hold each
Lender harmless from any actual loss or expense (other than, in the case of
expenses, any administrative, processing or similar fee in respect thereof
exceeding $100 for each affected Lender for each relevant event) which such
Lender sustains or incurs as a result of (a) default by the Borrower in making a
borrowing of, Conversion into or Continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of a Eurodollar Loan after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto. This covenant shall survive the termination of this
Agreement and the payment of the Loans, Reimbursement Obligations and all other
amounts payable hereunder. No Lender shall be entitled to claim any additional
amounts pursuant to this Section 4.14 for circumstances which occurred more than
180 days prior to the date such Lender makes a request for payment hereunder.

4.15 Inability to Determine Interest Rate. (a) If prior to the first day of any
Interest Period:

(i) the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means (including by means
of an Interpolated Rate) do not exist for ascertaining the relevant Eurodollar
Rate for such Interest Period; or

(ii) the Administrative Agent shall have received notice from the Majority
Facility Lenders in respect of any Facility that the relevant Eurodollar Rate
determined or to be determined for such Interest Period, as applicable, will not
adequately and fairly reflect the cost to such Lenders of making or maintaining
their affected Eurodollar Loans under such Facility during such Interest Period;
then the Administrative Agent shall give telecopy or telephonic notice thereof
to the Borrower and the relevant Lenders as soon as practicable thereafter.

(b) If such notice is given with respect to the Eurodollar Rate applicable to
Eurodollar Loans under any Facility, (x) any such Eurodollar Loan requested to
be made under such Facility on the first day of such Interest Period shall be
made as a Base Rate Loan, (y) any Base Rate Loans under such Facility that were
to have been Converted on the first day of such Interest Period to Eurodollar
Loans shall not be so Converted and shall continue as Base Rate Loans and
(z) any outstanding Eurodollar Loans under such Facility shall be Converted on
the first day of such Interest Period to Base Rate Loans. Until such notice has
been revoked by the Administrative Agent, no further Eurodollar Loans under such
Facility shall be made or Continued as such, nor shall the Borrower have the
right to Convert Loans under such Facility into such Type.

 

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(c) The Administrative Agent shall promptly revoke (i) any such notice pursuant
to clause (a)(i) above if the Administrative Agent determines that adequate and
reasonable means exist for ascertaining the relevant Eurodollar Rate for the
applicable Interest Period and (ii) any such notice pursuant to clause (a)(ii)
above upon receipt of notice from the requisite Lenders under the applicable
Facility necessary to give such notice in clause (a)(ii) that the relevant
circumstances described in such clause (a)(ii) have ceased to exist.

4.16 Illegality. Notwithstanding any other provision herein, if the adoption of
or any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Lender to make or maintain Eurodollar
Loans as contemplated by this Agreement, (a) the commitment of such Lender
hereunder to make Eurodollar Loans, Continue Eurodollar Loans as such and
Convert Base Rate Loans to Eurodollar Loans shall forthwith be suspended to the
extent necessary for such Lender to avoid any such unlawful action until such
Lender notifies the Administrative Agent that it is lawful to make or maintain
Eurodollar Loans as contemplated by this Agreement, provided, however, that
notwithstanding the suspension contemplated by this clause (a), the commitment
of such Lender hereunder to make Base Rate Loans shall continue to be in effect,
and (b) such Lender’s Loans then outstanding as Eurodollar Loans, if any, shall
be Converted automatically to available and lawful Interest Periods, if any, or
Base Rate Loans, at the option of the Borrower, 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 Loan
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Borrower shall pay to such Lender such amounts, if
any, as may be required pursuant to Section 4.14.

4.17 Replacement of Lenders. If (a)(i)(A) the Borrower is required to pay any
additional amount to or indemnify any Lender pursuant to Section 4.11 or (B) any
Lender requests compensation under Section 4.10, and (ii) in the case of
Section 4.11, a Lender has declined to designate a different Applicable Lending
Office, (b) any Lender invokes Section 4.16, (c) any Lender becomes a Defaulting
Lender, or (d) any Lender has failed to consent to a proposed amendment, waiver
or other modification that, pursuant to the terms of Section 11.1, requires the
consent of all the Lenders, or all affected Lenders, and with respect to which
the Required Lenders shall have granted their consent, then, in each case, so
long as no Default or Event of Default shall have occurred and be continuing,
the Borrower may, at the sole cost and expense of the Borrower, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
and obligations contained in Section 11.7), all of its interests, rights (other
than its existing rights to payments pursuant to Sections 4.10 and 4.11) and
obligations under this Agreement and the other Loan Documents (or all of its
interests, rights and obligations in respect of the Loans or Commitments that
are the subject of the related amendment, waiver or other modification) to an
assignee that shall assume such obligations and become a Lender pursuant to the
terms of this Agreement and the other Loan Documents; provided that (i) the
transferring Lender shall have received payment of an amount equal to (A) the
outstanding principal of its Loans, accrued interest thereon, and accrued fees
payable to it hereunder, from the Assignee and (B) any additional amounts
(including indemnity payments) payable to it hereunder from the Borrower and
(ii) in the case of a transferring Lender that is also an Issuing Lender, the
Letters of Credit issued by such transferring Lender shall have been cash
collateralized or backed by a letter of credit or other credit support from a
Non-Defaulting Lender or other bank reasonably acceptable to the transferring
Lender, in each case, on terms and conditions reasonably satisfactory to such
transferring Lender; provided, further, that, if, upon such demand by the
Borrower, such Lender elects to waive its request for additional compensation
pursuant to Sections 4.10 or 4.11, or consents to the proposed amendment, waiver
or other modification, the demand by the Borrower for such Lender to so assign
all of its rights and obligations under this Agreement shall thereupon be deemed
withdrawn. Nothing in this Section 4.17 shall affect or postpone any of the
rights of any Lender or any of the Obligations of the Borrower under any of the
foregoing provisions of Sections 4.10, 4.11 or 4.16 in any manner. Each Lender
hereby grants to the Administrative Agent an irrevocable power of attorney
(which power is coupled with an interest) to execute and deliver, on behalf of
such Lender as assignor, any Assignment and Acceptance necessary to effectuate
any assignment of such Lender’s interest hereunder in the circumstances
contemplated by this Section 4.17.

 

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4.18 Defaulting Lender. Notwithstanding any other provision in this Agreement to
the contrary, if at any time a Lender becomes a Defaulting Lender, the following
provisions shall apply so long as any Lender is a Defaulting Lender:

(a) If any Defaulting Lender (or a Lender who would be a Defaulting Lender but
for the expiration of the relevant grace period) as a result of the exercise of
a set-off shall have received a payment in respect of its Loans or its
participation interests in Swing Line Loans or Letters of Credit which results
in its Extensions of Credit under any Facility being less than its Commitment
Percentage of the Total Extensions of Credit under such Facility, then payments
(including principal, interest and fees) to such Defaulting Lender will be
suspended until such time as all amounts due and owing to the Lenders under such
Facility have been equalized in accordance with such Lenders’ Commitment
Percentages of the Total Extensions of Credit under such Facility. Further, if
at any time prior to the acceleration or maturity of the Obligations under any
Facility with respect to which a Defaulting Lender is a Lender at such time, the
Administrative Agent shall receive any payment in respect of principal of a Loan
or a reimbursement of a Letter of Credit under such Facility, the Administrative
Agent shall apply such payment first to the Loans and participations in Letters
of Credit and, if applicable, Swing Line Loans, under such Facility and for
which such Defaulting Lender shall have failed to fund its pro rata share to
non-Defaulting Lenders under such Facility until such time as such Defaulting
Lender’s obligation to fund such Loans and/or participations is satisfied in
full or each Lender under such Facility is paid its Commitment Percentage of the
Total Extensions of Credit under such Facility. After acceleration or maturity
of the Obligations under any Facility to which a Defaulting Lender is a Lender,
subject to the first sentence of this Section 4.18(a), all principal will be
paid ratably as provided in Section 4.9(a).

(b) Notwithstanding any provision of this Agreement to the contrary, if any
Lender becomes a Defaulting Lender, then the following provisions shall apply
for so long as such Lender is a Defaulting Lender:

(i) fees shall cease to accrue on the Available Commitments of such Defaulting
Lender pursuant to Section 2.8;

(ii) with respect to any L/C Participation Obligation, Refunded Swing Line Loan
or Swing Line Participation Amount (collectively, “Participation Obligations”)
of such Defaulting Lender that exists at the time a Lender becomes a Defaulting
Lender or thereafter:

(A) all or any part of such Defaulting Lender’s pro rata portion of all
Participation Obligations under each Facility to which such Defaulting Lender is
a Lender shall be reallocated among the Non-Defaulting Lenders under such
Facility in accordance with their respective Commitment Percentages (calculated
without regard to such Defaulting Lender’s Commitment under such Facility) but
only to the extent that (x) the sum of all Non-Defaulting Lenders’ Available
Commitments under such Facility is greater than zero and (y) each such
Non-Defaulting Lender’s Available Commitment under such Facility is greater than
zero;

(B) if the reallocation described in clause (ii)(A) above cannot, or can only
partially, be effected, then the Borrower shall within three (3) Business Days
following notice by the Administrative Agent to the Borrower (1) Cash
(100%) Collateralize such Defaulting Lender’s portion of the Letters of Credit
under the applicable Facility (after giving effect to any partial reallocation
pursuant to clause (ii)(A) above) for so long as such Letters of Credit are
outstanding and (2) after giving effect to any partial reallocation pursuant to
clause (ii)(A) above, if such Defaulting Lender is a Working Capital Facility
Lender, repay the non-reallocated amount of each Swing Line Loan for so long as
such Refunded Swing Line Loan and Swing Line Participation Amount are
outstanding;

 

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(C) if the Participation Obligations of the Non-Defaulting Lenders under the
relevant Facility are reallocated pursuant to clause (ii)(A) above or Cash
(100%) Collateralized or repaid pursuant to clause (ii)(B), then the fees
payable to the Lenders under such Facility pursuant to Section 2.8 shall be
adjusted or reduced, as applicable, in accordance with such Non-Defaulting
Lenders’ Commitment Percentages (calculated without regard to such Defaulting
Lender’s Commitment under such Facility); and

(D) if any Defaulting Lender’s portion of the Participation Obligations under
any Facility is neither Cash (100%) Collateralized nor reallocated pursuant to
this Section 4.18(b)(ii), then, without prejudice to any rights or remedies
hereunder of the Lenders and Issuing Lenders under such Facility and, in the
case of the Working Capital Facility, the Swing Line Lender, all commitment and
commission fees that otherwise would have been payable to such Defaulting Lender
(solely with respect to the portion of such Defaulting Lender’s Commitment under
such Facility that was utilized by the Participation Obligations under such
Facility) and letter of credit fees payable under Section 3.5(a) with respect to
such Defaulting Lender’s portion of the Letters of Credit under such Facility
shall be payable to the Issuing Lenders under such Facility and, in the case of
the Working Capital Facility, the Swing Line Lender, until such Participation
Obligations are Cash (100%) Collateralized, reallocated and/or repaid in full.

(c) So long as any Lender under any Facility is a Defaulting Lender, (i) no
Issuing Lender under such Facility shall be required to issue, amend or increase
any Letter of Credit under such Facility, unless it is satisfied that the
exposure of the L/C Participants in respect of such Letter of Credit will be
100% covered by the Commitments of the Non-Defaulting Lenders under such
Facility and/or cash collateral will be provided by the Borrower in accordance
with Section 4.18(b), and participating interests in any such newly issued or
increased Letter of Credit shall be allocated among Non-Defaulting Lenders under
such Facility in a manner consistent with Section 3.6 (and Defaulting Lenders
shall not participate therein), and (ii) if the Defaulting Lender is a Working
Capital Facility Lender, the Swing Line Lender shall not be required to advance
any Swing Line Loan, unless it is satisfied that the remaining Working Capital
Facility Lenders’ exposure in respect of such Swing Line Loan will be 100%
covered by the Working Capital Facility Commitments of the Non-Defaulting
Lenders under the Working Capital Facility.

(d) So long as any Lender is a Defaulting Lender, such Defaulting Lender shall
not be a Qualified Counterparty with respect to any Commodity OTC Agreements or
Financial Hedging Agreements, or a Qualified Cash Management Bank with respect
to a Cash Management Bank Agreement, entered into while such Lender is a
Defaulting Lender.

(e) In the event that the Administrative Agent, the Borrower and each Issuing
Lender under a Facility in which a Defaulting Lender is a Lender, and, in the
case of the Working Capital Facility, the Swing Line Lender, each agrees that a
Defaulting Lender has adequately remedied all matters that caused such Lender to
be a Defaulting Lender, then the Participation Obligations under such Facility
shall be readjusted to reflect the inclusion of such Defaulting Lender’s
Commitment under such Facility, and on such date each Lender under such Facility
shall purchase at par such of the Loans, funded Participation Obligations and
Commitments under such Facility as the Administrative Agent shall determine may
be necessary in order for such Lender to hold such Loans, funded Participation
Obligations and Commitments in accordance with its Commitment Percentage with
respect to such Facility.

 

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SECTION 5 REPRESENTATIONS AND WARRANTIES

To induce the Agents and the Lenders to enter into this Agreement and to make
the Loans and provide other extensions of credit hereunder and, with respect to
the Issuing Lenders, to issue the Letters of Credit, the Loan Parties hereby
jointly and severally represent and warrant to each Agent and each Lender as of
the Closing Date and each Borrowing Date that:

5.1 Financial Condition. (a) Each of the financial statements delivered pursuant
to Section 6.1(r) and Section 7.1 (other than the Annual Budgets, the Operating
Forecasts and the financial statements delivered pursuant to Sections 6.1(r)(iv)
and (v)) present fairly in all material respects the financial condition of the
Persons covered by such financial statements as at such date, and have been
prepared in accordance with GAAP or GAAP adjusted on an Economic Basis plus or
minus any Allowed Reserve, as applicable, in each case applied consistently
throughout the periods involved (except as approved by such accountants and as
disclosed therein and, with regard to the non-annual financial statements,
subject to normal year-end adjustments and the absence of footnotes).

(b) The Annual Budgets and the Operating Forecasts have been prepared in good
faith under the direction of a Responsible Person of the General Partner. The
Annual Budgets and the Operating Forecasts were based upon good faith estimates
and assumptions believed by the Loan Parties to be reasonable at the time made,
it being recognized by the Lenders that such financial information as it relates
to future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount.

(c) Except as set forth on Schedule 5.1(c) hereto, neither the MLP nor any of
its consolidated Subsidiaries has, at the date of the most recent balance sheet
referred to in Section 5.1(a), any material Guarantee Obligation, contingent
liability or liability for taxes, or any material long-term lease or unusual
forward or long-term commitment, including any material interest rate or foreign
currency swap or exchange transaction or other financial derivative which is not
reflected in the foregoing statements or in the notes thereto.

(d) The Pro Forma Financial Statements have been prepared giving effect (as if
such events had occurred on such date) to (i) the Extensions of Credit to be
made on the Closing Date and the use of proceeds thereof, (ii) the consummation
of the IPO and (iii) the payment of fees and expenses in connection with the
foregoing. The Pro Forma Financial Statements been prepared based on the best
information available to the Borrower as of the date of delivery thereof, and
presents fairly on a pro forma basis the estimated financial position of
Borrower and its consolidated Subsidiaries as at June 30, 2013, assuming that
the events specified in the preceding sentence had actually occurred at such
date

(e) The Projections have been prepared based upon good faith estimates and
assumptions believed by management of the Borrower to be reasonable at the time
made, it being recognized by the Lenders that such financial information as it
relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount.

(f) During the period from December 31, 2012 to and including the Closing Date,
there has been no sale, transfer or other disposition by any Loan Party or any
of their respective consolidated Subsidiaries of any material part of their
respective business or property and no purchase or other acquisition of any
business or property (including any Capital Stock of any other Person) material
in relation to the consolidated financial condition of such Loan Party and its
consolidated Subsidiaries at December 31, 2012, other than those sales,
transfers, dispositions and acquisitions listed on Schedule 5.1(f).

 

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5.2 No Change. Since December 31, 2012, there has been no Material Adverse
Effect.

5.3 Existence; Compliance with Law. Each of the Loan Parties (a) is duly formed
or organized, validly existing and in good standing under the Laws of the
jurisdiction of its organization, (b) has the corporate (or analogous) power and
authority, and the legal right, to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign entity and in good
standing under the Laws of each jurisdiction where such qualification is
required, except where the failure to be so qualified or in good standing could
not reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.

5.4 Power; Authorization; Enforceable Obligations. Each of the Loan Parties has
the corporate (or analogous) power and authority, and the legal right, to
execute, deliver and perform the Loan Documents to which it is a party and, if
applicable, to borrow hereunder, and, if applicable, has taken all necessary
corporate (or analogous) action to authorize the borrowings on the terms and
conditions of this Agreement and any Notes and to authorize the execution,
delivery and performance of the Loan Documents to which it is a party. Except
for (a) the filing of Uniform Commercial Code financing statements and
equivalent filings for foreign jurisdictions and the taking of applicable
actions referred to in Section 5.16 and (b) the filings or other actions listed
on Schedule 5.4 (and including such other authorizations, approvals,
registrations, actions, notices or filings as have already been obtained, made
or taken and are in full force and effect), no consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person, including the FERC, to which the Borrower or
other Loan Party is subject, is required in connection with the borrowings
hereunder or with the execution, delivery, validity or enforceability of the
Loan Documents to which the Loan Parties are a party; provided that approval by
the FERC may be required for the transfer of direct or indirect ownership or
control of FERC Contract Collateral; provided, further, that no approval of the
FERC is required for the granting of the security interest in the FERC Contract
Collateral to the Administrative Agent pursuant to the Security Documents. As of
the Closing Date, the only contracts comprising FERC Contract Collateral of the
Loan Parties and their respective Subsidiaries as to which further consent of
the FERC may be required in connection with the exercise of remedies by the
Administrative Agent under the Loan Documents are contracts for the
transportation and storage of certain Eligible Commodities. This Agreement has
been, and each other Loan Document to which any Loan Party is a party will be,
duly executed and delivered on behalf of such Loan Party. This Agreement
constitutes, and each other Loan Document to which it is a party when executed
and delivered will constitute, a legal, valid and binding obligation of each
Loan Party party thereto enforceable against such Loan Party in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.

5.5 No Legal Bar. The execution, delivery and performance of the Loan Documents
to which any of the Loan Parties is a party, the borrowings hereunder and the
use of the proceeds thereof (i) will not violate any Requirement of Law,
including any rules or regulations promulgated by the FERC, in any material
respect or where a waiver has not been obtained, in each case to the extent
applicable to or binding upon such Loan Party or its Properties, (ii) will not
violate a material Contractual Obligation (including, for the avoidance of
doubt, Governing Documents) of any of the Loan Parties, except where

 

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such violation could not reasonably be expected to have a Material Adverse
Effect and (iii) will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation (other than Liens created by the
Security Documents in favor of the Administrative Agent and Liens permitted by
Section 8.3).

5.6 No Material Litigation. No litigation or proceeding to which a Loan Party is
party before any arbitrator or Governmental Authority is pending or, to the
knowledge of any Loan Party, threatened by or against any Loan Party or against
any of their respective properties or revenues (a) with respect to any of the
Loan Documents, (b) with respect to any of the transactions contemplated by or
occurring simultaneously with the entering into of any of the Loan Documents in
which such litigation or proceeding is material and has a reasonable basis in
fact, or (c) which could, after giving effect to any insurance, bond or reserve,
reasonably be expected to have a Material Adverse Effect.

5.7 No Default. No Loan Party is in default under or with respect to any
Contractual Obligation in any respect which could reasonably be expected to have
a Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.

5.8 Ownership of Property; Liens. Except for matters disclosed on the title
reports and surveys, including minor defects in title that do not interfere with
its ability to conduct its business as currently conducted or to utilize such
properties and assets for their intended purposes and except where the failure
to have such title could not reasonably be expected to have a Material Adverse
Effect, each Loan Party has defensible title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its tangible personal property, and none of such
property is subject to any Lien except as permitted by Section 8.3.

5.9 Intellectual Property. Each Loan Party owns, is licensed to use or has a
common law or contractual right to access and use, all material trademarks,
tradenames, copyrights, patents, technology, know-how and processes necessary
for the conduct of its business as currently conducted (the “Intellectual
Property”) except for those the failure to own or license which could not
reasonably be expected to have a Material Adverse Effect. Except as set forth on
Schedule 5.9, no claim has been asserted nor is pending by any Person
challenging or questioning the use by any such Loan Party of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Loan Party know of any valid basis for any such claim,
except any claim that could not reasonably be expected to have a Material
Adverse Effect. The use of such Intellectual Property by the Loan Parties does
not infringe on the rights of any Person, except for such claims and
infringements that, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

5.10 No Burdensome Restrictions. No Requirement of Law or Contractual Obligation
of any Loan Party has or could reasonably be expected to have a Material Adverse
Effect.

5.11 Taxes. (a) Each Loan Party and each of its Subsidiaries has timely filed or
caused to be filed all material Tax returns required to be filed and has timely
paid all material Taxes due and payable by it or imposed with respect to any of
its property and all other material fees or other charges imposed on it or any
of its property by any Governmental Authority (other than any Taxes the amount
or validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the Loan Parties).

(b) There are no Liens for Taxes and no claim is being asserted with respect to
Taxes, except for statutory liens for Taxes not yet due and payable or for Taxes
the amount or validity of which are currently being contested in good faith by
appropriate proceedings and, in each case, with respect to which reserves in
conformity with GAAP have been provided on the books of the MLP.

 

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5.12 Federal Regulations. No part of the proceeds of any Loan or Letter of
Credit will be used for “purchasing” or “carrying” any “margin stock” within the
respective meanings of each of the quoted terms under Regulation U, or for any
purpose which violates, or which would be inconsistent with, the provisions of
the regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1 referred to in said Regulation U.

5.13 ERISA. Neither a Reportable Event nor a failure to satisfy the minimum
funding requirements of Section 412 or 430 of the Code has occurred during the
six-year period prior to the date on which this representation is made or deemed
made or is reasonably expected to occur with respect to any Single Employer
Plan, no Plan is reasonably expected to be in “at risk” status within the
meaning of Section 430 of the Code and each Plan (including, to the knowledge of
the Loan Parties, a Multiemployer Plan or a multiemployer welfare plan
maintained pursuant to a collective bargaining agreement) has complied in all
respects with the applicable provisions of ERISA, the Code and the constituent
documents of such Plan, except for instances of non-compliance that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
No termination of a Single Employer Plan has occurred during such six-year
period or is reasonably expected to occur (other than a termination described in
Section 4041(b) of ERISA), and no Lien in favor of the PBGC or a Plan has arisen
during such six-year period or is reasonably expected to arise. Except to the
extent that any such excess could not reasonably be expected to have a Material
Adverse Effect, the present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. Except to the extent that such liability could not
reasonably be expected to have a Material Adverse Effect, (i) neither the Loan
Parties nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan, and (ii) the Loan Parties would not
become subject to any liability under ERISA if a Loan Party or any Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as of
the valuation date most closely preceding the date on which this representation
is made or deemed made. To the knowledge of the Loan Parties, no such
Multiemployer Plan is in Reorganization, Insolvent or terminating or is
reasonably expected to be in Reorganization, become Insolvent or be terminated
or is, or is reasonably expected to be in endangered, seriously endangered or
critical status, in each case within the meaning of Section 432 of the Code.
Except to the extent that any such excess could not reasonably be expected to
have a Material Adverse Effect, the present value (determined using actuarial
and other assumptions which are reasonable in respect of the benefits provided
and the employees participating) of the aggregate liabilities of the Loan
Parties and each Commonly Controlled Entity for the provision of post-retirement
benefits to their current and former employees under Plans which are welfare
benefit plans (as defined in Section 3(1) of ERISA) do not, in the aggregate,
exceed the total assets under all such Plans allocable to such benefits except
as disclosed in the financial statements of the Loan Parties. Neither the Loan
Parties nor any Commonly Controlled Entity has engaged in a prohibited
transaction under Section 406 of ERISA and/or Section 4975 of the Code in
connection with any Plan that would subject any Loan Party to liability under
ERISA and/or Section 4975 of the Code that could reasonably be expected to have
a Material Adverse Effect. Except as could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect: (1) Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS covering such plan’s most recently
completed five-year remedial amendment cycle in accordance with Revenue
Procedure 2007-44, I.R.B. 2007-28, indicating that such Plan is so qualified and
the trust related thereto has been determined by the Internal Revenue Service to
be exempt from federal income tax under Section 501(a) of the Code or an
application for such a determination is currently pending before the Internal
Revenue Service and, to the

 

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knowledge of the Borrower, nothing has occurred subsequent to the issuance of
the most recent determination letter which would cause such Plan to lose its
qualified status; (2) no liability to the PBGC (other than required premium
payments) or the IRS with respect to any Plan, any Plan or Single Employer Plan
or any trust established under Title IV of ERISA has been or is expected to be
incurred by any Loan Party or any Commonly Controlled Entity; (3) no Event of
Default under Section 9.1(h) hereof has occurred and neither the Borrower nor
any Commonly Controlled Entity is aware of any fact, event or circumstance that
could reasonably be expected to constitute or result in an Event of Default; and
(4) each of the Loan Parties’ Commonly Controlled Entities have complied with
the requirements of Section 515 of ERISA with respect to each Multiemployer Plan
and are not in “default” (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan.

5.14 Investment Company Act; Other Regulations. None of the Loan Parties is
required to register as an “investment company”, or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940.
The Loan Parties are not subject to regulation under any Federal or State
statute or regulation (other than Regulation X of the Board) which limits their
ability to incur Indebtedness.

5.15 Subsidiaries. Schedule 5.15 sets forth as of the Closing Date the names of
all direct or indirect Subsidiaries of the MLP, their respective forms of
organization, their respective jurisdictions of organization, the total number
of issued and outstanding shares or other interests of Capital Stock thereof,
the classes and number of issued and outstanding shares or other interests of
Capital Stock of each such class, and with respect to the MLP, the name of each
holder of general partnership interests thereof and the number of general
partnership interests held by each such holder.

5.16 Security Documents. (a) The provisions of the Security Documents are
effective to create in favor of the Administrative Agent for the ratable benefit
of the Secured Parties a legal, valid and enforceable Lien in all right, title
and interest of each Loan Party party thereto in the “Collateral” described
therein, subject to any Liens permitted by Section 8.3.

(b) When any stock certificates representing Pledged Collateral are delivered to
the Administrative Agent, and proper financing statements or other applicable
filings listed in Schedule 5.16 have been filed in the offices in the
jurisdictions listed in Schedule 5.16, the Pledge Agreement shall constitute a
perfected first Lien on, and security interest in, all right, title and interest
of each Loan Party party thereto in the “Pledged Collateral” described therein,
subject to any Liens permitted by Section 8.3.

(c) When proper financing statements or other applicable filings listed in
Schedule 5.16 have been filed in the offices in the jurisdictions listed in
Schedule 5.16, the security interest granted under the Security Agreement shall
constitute a perfected first Lien on, and security interest in, all right, title
and interest of the Borrower and those Loan Parties party thereto in the portion
of the “Collateral” described therein that consists of assets included in the
Borrowing Base hereunder, which can be perfected by such filing, subject to any
Permitted Borrowing Base Liens.

(d) When an Account Control Agreement has been entered into with respect to each
Pledged Account, the Security Agreement shall constitute a perfected first Lien
on, and security interest in, all right, title and interest of the Loan Party
thereto in the portion of the “Collateral” described therein that consists of
Pledged Accounts, prior and superior in right to any other Person, subject to
any Permitted Cash Management Liens.

5.17 Accuracy and Completeness of Information. All factual information, reports
and other papers and data with respect to the Loan Parties furnished pursuant to
this Agreement and the other Loan Documents, and all factual statements and
representations made in writing, to the Agents, the

 

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Arrangers or the Lenders by any Loan Party or on behalf of any Loan Party at its
direction, were, at the time the same were so furnished or made, when taken
together with all such other factual information, reports and other papers and
data previously so furnished and all such other factual statements and
representations previously so made in writing, complete and correct in all
material respects, to the extent necessary to give the Agents, the Arrangers and
the Lenders true and accurate knowledge of the subject matter thereof in all
material respects, and did not, as of the date so furnished or made, contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements contained therein not materially misleading in
light of the circumstances in which the same were made. The projections and pro
forma information contained in the materials referenced above were based upon
good faith estimates and assumptions believed by the Loan Parties to be
reasonable at the time made, it being recognized by the Agents, the Arrangers
and the Lenders that such financial information as it relates to future events
is not to be viewed as fact and that actual results during the period or periods
covered by such financial information may differ from the projected results set
forth therein by a material amount; provided, however, that the representation
and warranty in this Section 5.17 shall not cover (x) the financial information
addressed in Section 5.1 or Section 7.1 or (y) any reports that were prepared by
any Agent, any Arranger, any Lender or any advisor thereof (whether or not such
advisor’s fees were paid by any Loan Party), but shall apply to any information,
reports, other papers or data that were approved by any Loan Party for inclusion
in any such report.

5.18 Labor Relations. No Loan Party is engaged in any unfair labor practice
which could reasonably be expected to have a Material Adverse Effect. Except as
could not reasonably be expected to have a Material Adverse Effect, there is
(a) no unfair labor practice complaint pending or, to the best knowledge of each
Loan Party, threatened against a Loan Party before the National Labor Relations
Board and no grievance or arbitration proceeding arising out of or under a
collective bargaining agreement is so pending or, to the knowledge of any Loan
Party, threatened, (b) no strike, labor dispute, slowdown or stoppage pending
or, to the knowledge of each Loan Party, threatened against a Loan Party, and
(c) no union representation question existing with respect to the employees of a
Loan Party and, to the knowledge of any Loan Party, no union organizing
activities are taking place with respect to any thereof.

5.19 Insurance. As of the Closing Date, each Loan Party has, with respect to its
properties and business, insurance covering the risks, in the amounts, with the
deductible or other retention amounts, and with the carriers, listed on Schedule
5.19, which insurance meets the requirements of Section 7.5 hereof and
Section 5(q) of the Security Agreement as of the Closing Date.

5.20 Solvency. (a) As of the Closing Date, and each other Borrowing Date,
immediately after giving effect to Loans and Letters of Credit to be made,
issued or provided on such date, (i) the amount of the “present fair saleable
value” of the assets of each of the MLP and its Subsidiaries, taken as a whole,
the MLP and the Borrower will, as of such time, exceed the amount of all
“liabilities of each of the MLP and its Subsidiaries, taken as a whole, the MLP
and the Borrower, contingent or otherwise”, such quoted terms are determined in
accordance with applicable federal and state Laws governing determinations of
the insolvency of debtors, (ii) the present fair saleable value of the assets of
each of the MLP and its Subsidiaries, taken as a whole, the MLP and the Borrower
will be greater than the amount that will be required to pay the liabilities of
each of the MLP and its Subsidiaries, taken as a whole, the MLP and the Borrower
on their respective debts as such debts become absolute and matured, (iii) none
of the MLP and its Subsidiaries, taken as a whole, the MLP or the Borrower will
have an unreasonably small amount of capital with which to conduct their
respective businesses, and (iv) each of the MLP and its Subsidiaries, taken as a
whole, the MLP and the Borrower will be able to pay their respective debts as
they mature. For purposes of this Section 5.20, “debt” means “liability on a
claim”, “claim” means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or

 

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unsecured, and (y) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.

5.21 Use of Letters of Credit and Proceeds of Loans. (a) The proceeds of the
Loans shall be used (x) on the Closing Date, to repay outstanding obligations
under the Existing Credit Agreement and the Wells Fargo Credit Agreement, and
(y) thereafter only (i) to finance the Loan Parties’ purchase, storage and sale
of Petroleum Products, Natural Gas Products, Coal Products, carbon credits,
RINs, wood pellets, asphalt and such other energy products as the Required
Lenders may approve from time to time (such approval not to be unreasonably
withheld) (collectively, “Product”), (ii) to finance (x) maintenance Capital
Expenditures, (y) solely with respect to Acquisition Facility Acquisition
Extensions of Credit, the acquisition of Acquisition Assets and (z) solely with
respect to the Working Capital Facility, and in an aggregate amount not to
exceed $10,000,000 expended for such purpose outstanding at any time (as to all
Working Capital Facility Extensions of Credit), non-maintenance Capital
Expenditures, (iii) for hedging related to the purchase, storage and sale of
Product, (iv) for the general working capital purposes of the Loan Parties,
(v) to finance the carrying of accounts receivable, (vi) for the payment of
contractual margin calls (with respect to exchange-traded contracts,
over-the-counter contracts and otherwise) or establishment of reserves in
connection therewith, (vii) for the making of Restricted Payments to the extent
permitted by Section 8.5 below, (viii) to support certain working capital
requirements related to the Loan Parties’ marketing activities and (ix) to pay
any fees and expenses payable to the Lenders, the Agents and any other Secured
Parties, and not for any other purpose.

(b) Letters of Credit shall be used only (i) for the general working capital
purposes of the Loan Parties, (ii) to facilitate and finance the purchase of
Product for resale or storage, (iii) to secure the obligations of any Loan Party
under any contract or agreement or in connection with any legal requirement or
governmental permit, such as transportation obligations, bonding obligations,
performance and margin-related obligations related to hedging of Product and
(iv) to support (x) maintenance Capital Expenditures, (y) solely with respect to
Acquisition Facility Acquisition Extensions of Credit, the acquisition of
Acquisition Assets and (z) solely with respect to the Working Capital Facility,
and in an aggregate amount not to exceed $10,000,000 for such purpose
outstanding at any time (with respect to all Working Capital Facility Extensions
of Credit), non-maintenance Capital Expenditures, and not for any other purpose.

5.22 Environmental Matters. Except as set forth on Schedule 5.22:

(a) To the best of each Loan Party’s knowledge and belief, such knowledge and
belief being that of a reasonable person who had conducted due diligence and
good faith inquiry, the facilities and properties owned, leased or operated by
the Loan Parties (the “Properties”) do not contain, and have not previously
contained, any Materials of Environmental Concern in amounts or concentrations
which (i) constitute or constituted a violation of, or (ii) could give rise to
liability under, any Environmental Law except in either case insofar as such
violation or liability, or any aggregation thereof, is not reasonably likely to
result in a Material Adverse Effect.

(b) To the best of each Loan Party’s knowledge and belief, such knowledge and
belief being that of a reasonable person who had conducted due diligence and
good faith inquiry, (i) except where the failure to be in compliance could not
reasonably be expected to have a Material Adverse Effect, the Properties and all
operations at the Properties are in compliance, and have, for the lesser of the
last five years or for the duration of their ownership, lease, or operation by
Loan Parties, been in compliance in all material respects with all applicable
Environmental Laws and Environmental Permits, and (ii) there is no contamination
at, under or about the Properties or violation of any Environmental Law or
Environmental Permit with respect to the Properties or the business at the
Properties operated by Loan

 

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Parties (the “Business”) which could materially interfere with the continued
operation of the Properties or materially impair the fair saleable value
thereof. All Environmental Permits necessary in connection with the ownership
and operation of each Loan Party’s business have been obtained and are in full
force and effect, except where any such failure to obtain and maintain in full
force and effect (individually or in the aggregate) has not had and is not
reasonably likely to result in a Material Adverse Effect. Without limiting the
foregoing, all material permits, registrations, licenses or similar
authorizations or notifications required to construct and operate bulk storage
tanks and other bulk storage facilities at the Properties are in effect.

(c) No Loan Party has received any written notice of violation, alleged
violation, non-compliance, liability or potential liability pursuant to
Environmental Laws or Environmental Permits with regard to any of the Properties
or the Business, nor do the Loan Parties have knowledge or reason to believe
that any such notice will be received or is being threatened, except insofar as
such notice or threatened notice, or any aggregation thereof, does not involve a
matter or matters that is or are reasonably likely to result in a Material
Adverse Effect.

(d) To the best of each Loan Party’s knowledge and belief, such knowledge and
belief being that of a reasonable person who had conducted due diligence and
good faith inquiry, Materials of Environmental Concern have not been transported
or disposed of from the Properties in violation of, or in a manner or to a
location which could give rise to liability under, any Environmental Law, nor
have any Materials of Environmental Concern been generated, treated, stored or
disposed of at, on or under any of the Properties in violation of, or in a
manner that could give rise to liability under, any applicable Environmental
Law, except insofar as any such violation or liability referred to in this
paragraph, or any aggregation thereof, is not reasonably likely to result in a
Material Adverse Effect.

(e) No judicial proceeding or governmental or administrative action is pending
or, to the knowledge of any Loan Party, threatened, under any Environmental Law
to which any Loan Party is or will be named as a party with respect to any of
the Properties or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements or liens outstanding under any
Environmental Law with respect to any of the Properties or the Business, except
insofar as such proceeding, action, decree, order or other requirement or lien,
or any aggregation thereof, is not reasonably likely to result in a Material
Adverse Effect.

(f) There has been no release or threat of release of Materials of Environmental
Concern at or from any of the Properties arising from or related to the
operations of any Loan Party in connection with any of the Properties or
otherwise in connection with the Business and, to the knowledge of each Loan
Party, no other Person has released Materials of Environmental Concern at or
from the Properties, in violation of or in amounts or in a manner that could
give rise to liability under Environmental Laws, except insofar as any such
violation or liability referred to in this paragraph, or any aggregation
thereof, is not reasonably likely to result in a Material Adverse Effect.

5.23 Risk Management Policy. The Risk Management Policy has been duly adopted in
accordance with the internal risk policies of the Borrower, is in full force and
effect with respect to all Loan Parties, and has been previously delivered to
the Administrative Agent (for distribution to the Lenders) and certified by a
Responsible Person of the Borrower as being a true and correct copy and in full
force and effect, and the Risk Management Policy in effect as of the Closing
Date is attached hereto as Exhibit I.

5.24 AML Laws. (a) None of the Loan Parties and none of their respective
Subsidiaries are, and to their knowledge none of their respective Affiliates
are, in violation of any Requirement of Law relating to terrorism or money
laundering (collectively, “AML Laws”), including, but not limited to, Executive
Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the
“Executive Order”), and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56 (“USA PATRIOT Act”).

 

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(b) None of the Loan Parties, none of their respective Subsidiaries and, to
their knowledge, none of their respective Affiliates and no broker or other
agent of any Loan Party, that is, in each case, acting or benefiting in any
capacity in connection with the Loans, is any of the following:

(i) a Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order or any other applicable the U.S. Treasury
Department Office of Foreign Assets Control (“OFAC”) regulation;

(ii) a Person owned or controlled by, or acting on behalf of, any Person that is
listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order or any other applicable OFAC regulation;

(iii) a Person with which any Lender is prohibited from dealing or otherwise
engaging in any transaction by any applicable AML Law;

(iv) a Person that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order or other applicable OFAC
regulations; or

(v) a Person that is named as a “specially designated national” or “blocked
person” on the most current list published by OFAC at its official website,
currently available at www.treas.gov/offices/enforcement/ofac/ or any
replacement website or other replacement official publication of such list.

(c) None of the Loan Parties, and to their knowledge no broker or other agent of
any Loan Party acting in any capacity in connection with the Loans, (i) conducts
any business or engages in making or receiving any contribution of funds, goods
or services to or for the benefit of any person described in paragraph
(b) above, (ii) deals in, or otherwise engages in any transaction relating to,
any property or interests in property blocked pursuant to the Executive Order or
other applicable OFAC regulations, or (iii) engages in or conspires to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
applicable AML Law.

If any Loan Party acquires or forms any Subsidiary, each of the foregoing
representations and warranties referring to any Subsidiary of a Loan Party shall
be thereafter deemed modified to cover, on a prospective basis, the Loan Parties
and their respective Subsidiaries (including such Loan Party’s newly acquired or
formed Subsidiary), mutatis mutandis.

SECTION 6 CONDITIONS PRECEDENT

6.1 Conditions Precedent. The effectiveness of this Agreement is subject to the
satisfaction or waiver of the following conditions precedent:

(a) Loan Documents. The Administrative Agent shall have received:

(i) this Agreement, executed and delivered by a duly authorized officer of the
Borrower, each Agent, the Co-Syndication Agents, the Co-Documentation Agents and
each Lender set forth on Schedule 1.0;

 

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(ii) the Guarantee, executed and delivered by a duly authorized officer of each
party thereto;

(iii) the Security Agreement, executed and delivered by a duly authorized
officer of each party thereto;

(iv) the Pledge Agreement, executed and delivered by a duly authorized officer
of each party thereto;

(v) [reserved];

(vi) [reserved];

(vii) a Mortgage and Security Agreement for each Mortgaged Property located in
the United States, executed and delivered by a duly authorized officer of the
applicable Loan Party securing the total amount of the Obligations, provided,
however, that with respect to any Mortgaged Property located in a jurisdiction
which imposes mortgage recording taxes or similar fees, that the amount secured
thereby may be limited to an amount not less than 100% of the appraised value of
the land and improvements constituting such Mortgaged Property which is subject
to the Mortgage and Security Agreement;

(viii) the Perfection Certificate, executed and delivered by a duly authorized
officer of each Loan Party;

(ix) for each Working Capital Facility Lender requesting the same, a Note of the
Borrower substantially in the form of Exhibit A-1 and conforming to the
requirements hereof and executed by a duly authorized officer of the Borrower;

(x) [reserved];

(xi) for each Swing Line Lender requesting the same, a Note of the Borrower
substantially in the form of Exhibit A-2 and conforming to the requirements
hereof and executed by a duly authorized officer of the Borrower;

(xii) for each Acquisition Facility Lender requesting the same, a Note of the
Borrower substantially in the form of Exhibit A-3 and conforming to the
requirements hereof and executed by an authorized officer of the Borrower; and

(xiii) each of the Account Control Agreements, executed and delivered by a duly
authorized officer of each party thereto; provided that, to the extent an
Account Control Agreement cannot be delivered with respect to any Pledged
Account on the Closing Date, such Account Control Agreement shall be delivered
in accordance with Section 7.17.

(b) Secretary’s Certificates. The Administrative Agent shall have received a
certificate of each Loan Party, dated the Closing Date, substantially in the
form of Exhibit E, with appropriate insertions and attachments, reasonably
satisfactory in form and substance to the Administrative Agent, executed by
(i) the President or any Vice President and the Secretary or any Assistant
Secretary on behalf of such Person, or, if applicable, of the general partner or
managing member or members of such Person, on behalf of such Person, or (ii) in
the case of any such Person that is a limited liability company or limited
partnership that does not have any such officers, the general partner, in the
case of a limited partnership, or, in the case of a limited liability company,
the managing member or members of such Person, on behalf of such Person.

 

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(c) Borrowing Base Report; Marked-to-Market Report; Position Report. The
Co-Collateral Agents shall have received a pro forma Borrowing Base Report
showing the Borrowing Base as of a date not greater than 20 calendar days prior
to the Closing Date, modified on a pro forma basis to give effect to the IPO,
the distribution of the IPO Distributed Assets and any Extensions of Credit to
be made or continued on the Closing Date, and the latest Marked-to-Market Report
and Position Report required to be delivered pursuant to the Existing Credit
Agreement as of the Closing Date, in each case, with appropriate insertions and
supporting schedules and dated the Closing Date, reasonably satisfactory in form
and substance to the Co-Collateral Agents, and executed by a Responsible Person
of the Borrower.

(d) Proceedings of the Loan Parties. The Administrative Agent shall have
received a copy of the resolutions, in form and substance reasonably
satisfactory to the Administrative Agent, of the Board of Directors (or
analogous body) of each Loan Party authorizing as applicable to such Person
(i) the execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party, (ii) the borrowings contemplated hereunder and
(iii) the granting by it of the Liens created pursuant to the Security
Documents, certified on behalf of such Person by the Secretary or an Assistant
Secretary of such Person, or, if applicable, of the general partner or managing
member or members of such Person, as of the Closing Date, which certification
shall be included in the certificate delivered in respect of such Person
pursuant to Section 6.1(b), shall be in form and substance reasonably
satisfactory to the Administrative Agent and shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded.

(e) Incumbency Certificates. The Administrative Agent shall have received a
certificate of each Loan Party, dated the Closing Date, as to the incumbency and
signature of the officers of such Person or, if applicable, of the general
partner or managing member or members of such Person, executing any Loan
Document, or having authorization to execute any certificate, notice or other
submission required to be delivered to the Administrative Agent or a Lender
pursuant to this Agreement, which certificate shall be included in the
certificate delivered in respect of such Person pursuant to Section 6.1(b),
shall be reasonably satisfactory in form and substance to the Administrative
Agent, and shall be executed by the President or any Vice President and the
Secretary or any Assistant Secretary of such Person, or, if applicable, of the
general partner or managing member or members of such Person, on behalf of such
Person.

(f) Organizational Documents. The Administrative Agent shall have received true
and complete copies of the Governing Documents of each Loan Party, certified as
of the Closing Date as complete copies thereof by the Secretary or an Assistant
Secretary of such Person, or, if applicable, of the general partner or managing
member or members of such Person, on behalf of such Person, which certification
shall be included in the certificate delivered in respect of such Person
pursuant to Section 6.1(b) and shall be in form and substance reasonably
satisfactory to the Administrative Agent.

(g) Good Standing Certificates. The Administrative Agent shall have received
certificates dated as of a recent date from the Secretary of State or other
appropriate authority, evidencing the good standing of each Loan Party (i) in
the jurisdiction of its organization and (ii) in each other jurisdiction where
its ownership, lease or operation of property or the conduct of its business
requires it to qualify as a foreign Person except, as to this subclause (ii),
where the failure to so qualify could not reasonably be expected to have a
Material Adverse Effect.

 

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(h) Consents, Licenses and Approvals. The Administrative Agent shall have
received a certificate of a Responsible Person of the Borrower either
(i) attaching copies of all consents, authorizations and filings referred to in
Section 5.4 (other than the Mortgage and Security Agreements and any Uniform
Commercial Code financing statement filed pursuant to the Security Documents),
and stating that such consents, licenses and filings are in full force and
effect or (ii) stating that no such consents, licenses or approvals are so
required.

(i) Borrower’s Certificate. The Administrative Agent shall have received a
certificate substantially in the form of Exhibit S signed by a Responsible
Person of the Borrower, stating on behalf of the Borrower that:

(i) The representations and warranties contained in Section 5 are true and
correct in all material respects on and as of such date, as though made on and
as of such date;

(ii) No Default or Event of Default exists; and

(iii) There has not occurred since December 31, 2012 a Material Adverse Effect.

(j) Fees. The Administrative Agent, the Co-Collateral Agents, the Arrangers and
the Lenders shall have received the fees (including reasonable fees,
disbursements and other charges of counsel to the Agents) to be received on the
Closing Date referred to herein and in the Fee Letter and, to the extent
invoiced at least two Business Days prior to the Closing Date (or such lesser
time as agreed by the Borrower) all reasonable out-of-pocket costs and expenses
incurred by the Agents and the Lead Arranger in connection with the negotiation
of the Loan Documents and due diligence with respect thereto.

(k) Legal Opinions. The Administrative Agent shall have received, with a
counterpart for each Lender, the following executed legal opinions:

(i) the executed legal opinion of Vinson & Elkins LLP, counsel to the Borrower,
in form and substance reasonably satisfactory to the Administrative Agent and in
accordance with customary opinion practice;

(ii) the executed legal opinion of the General Counsel of the Borrower, in form
and substance reasonably satisfactory to the Administrative Agent and in
accordance with customary opinion practice;

(iii) the executed legal opinion of Pillsbury Winthrop Shaw Pittman LLP with
respect to the Mortgaged Properties located in New York, in form and substance
reasonably satisfactory to the Administrative Agent and in accordance with
customary opinion practice; and

(iv) an executed legal opinion of local counsel to the Loan Parties with respect
to each Mortgaged Property, in form and substance reasonably satisfactory to the
Administrative Agent and in accordance with customary opinion practice.

Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require in accordance with customary opinion practice.

 

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(l) Collateral and Risk Management Practices. The Administrative Agent shall
have completed a satisfactory collateral and risk management practices review of
all of the assets of the Loan Parties that comprise each asset category set
forth in the definitions of “Borrowing Base” (which review shall be satisfied by
the delivery to the Administrative Agent of the collateral and risk management
practices review report performed by BNP Paribas with a borrowing base date of
January 31, 2013 and field visit of March 12-15, 2013).

(m) Risk Management Policy. The Administrative Agent and the Lenders shall have
received a copy of the Risk Management Policy, including position and other
limits, which shall be satisfactory in content and form to the Administrative
Agent.

(n) Lien Searches. The Administrative Agent shall have received the results of a
recent search by a Person reasonably satisfactory to the Administrative Agent,
under the Uniform Commercial Code and equivalent legislation in all relevant
jurisdictions and all customary judgment and tax Lien searches for financing
transactions of this nature in all applicable jurisdictions, which may have been
filed with respect to personal property of the Loan Parties, and the results of
such search shall be reasonably satisfactory to the Administrative Agent.

(o) Actions to Perfect Liens. All filings, recordings, registrations and other
actions, including the filing of financing statements on form UCC-1, necessary
or, in the opinion of the Administrative Agent, desirable to perfect the Liens
created by the Security Documents, shall have been filed, registered or recorded
or shall have been delivered to the Administrative Agent or the title insurance
company issuing the policy referred to in Section 6.1(u) (the “Title Insurance
Company”) in proper form for filing, registration or recordation.

(p) Pledged Collateral; Stock Powers; Pledged Interests; Pledged Notes; Pledged
Chattel Paper. The Administrative Agent shall have received:

(i) the certificates representing the shares or other equity interests (to the
extent such equity interests are certificated) pledged pursuant to the Pledge
Agreement, together with an undated stock power for each such certificate,
executed in blank by a duly authorized officer of the pledgor thereof;

(ii) all promissory notes, if any, and other instruments, in each case, in a
principal amount in excess of $2,500,000 and pledged pursuant to the Pledge
Agreement, each endorsed in blank by a duly authorized officer of the pledgor
thereof; and

(iii) the original counterpart of all chattel paper, if any, in a principal
amount in excess of $2,500,000 and pledged pursuant to the Security Agreement,
duly endorsed in a manner satisfactory to the Administrative Agent and
containing a legend, if required by the Administrative Agent, that it is the
original counterpart of such chattel paper.

(q) Issuer Consent. Each Issuer (as defined in the Pledge Agreement) referred to
in the Pledge Agreement shall have delivered an acknowledgement of and consent
to such Pledge Agreement, executed by a duly authorized officer of such Issuer,
in substantially the form appended to such Pledge Agreement.

(r) Financial Statements. The Administrative Agent and the Lenders shall have
received each of the following:

(i) the audited consolidated balance sheet of the Borrower and its Subsidiaries
for each of the fiscal years ended December 31, 2010, December 31, 2011 and
December 31, 2012 and the related consolidated statements of income,
stockholders’ equity and cash flows for the applicable Fiscal Year ended on each
such date, audited by Ernst & Young LLP, prepared in accordance with GAAP, in
each case applied consistently throughout the periods involved (except as
approved by such accountants and as disclosed therein);

 

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(ii) the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as at March 31, 2013 and June 30, 2013 and the related unaudited
consolidated statements of income, stockholders’ equity and cash flows for the
portion of the Fiscal Year ended on each such date, in each case prepared in
accordance with GAAP adjusted on an Economic Basis plus or minus any Allowed
Reserve, as applicable, certified by a Responsible Person of the Borrower, as
being fairly presented in all material respects (subject to normal year end
audit adjustments and the absence of footnotes);

(iii) the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of the last date of each calendar month ended subsequent to
June 30, 2013 and at least 30 days prior to the Closing Date, and the related
unaudited consolidated statements of income, stockholders’ equity and cash flows
for each such month and the portion of the Fiscal Year ending on each such date
in each case prepared in accordance with GAAP adjusted on an Economic Basis plus
or minus any Allowed Reserve, as applicable, certified by a Responsible Person
of the Borrower, as being fairly presented in all material respects (subject to
normal year end audit adjustments and the absence of footnotes);

(iv) a projected income statement and balance sheet (the “Projections”) for the
MLP and its consolidated Subsidiaries for each Fiscal Year ending after the
Closing Date and on or prior to December 31, 2018, in each case prepared in
accordance with GAAP adjusted on an Economic Basis plus or minus any Allowed
Reserve, and accompanied by such information as the Agent may reasonably request
to confirm the tax, legal and business assumptions made in such projections; and

(v) a pro forma consolidated balance sheet and related pro forma consolidated
statement of income (the “Pro Forma Financial Statements”) of the MLP and its
consolidated Subsidiaries for the twelve (12) month period ending on June 30,
2013, after giving effect to the IPO and any Extensions of Credit to be made on
the Closing Date (as if such transactions had occurred as of June 30, 2013 (in
the case of the balance sheet) or at the beginning of such period (in the case
of the statement of income)), in each case (A) prepared in accordance with GAAP
adjusted on an Economic Basis plus or minus any Allowed Reserve and
(B) satisfactory in content and form to the Administrative Agent.

(s) Insurance. The Administrative Agent shall have received (i) evidence in form
and substance reasonably satisfactory to it that all of the insurance-related
requirements of Section 7.5 hereof and Section 5(q) of the Security Agreement
shall have been satisfied and (ii) evidence that the premiums then due and
payable on each insurance policy have been paid.

(t) Appraisals; Surveys. The Administrative Agent shall have received (i) real
property appraisals with respect to each Mortgaged Property from an appraiser
reasonably acceptable to the Administrative Agent and (ii) current or existing
ALTA/ACSM surveys with respect to each Mortgaged Property reasonably acceptable
to the Administrative Agent and which is sufficient for the title insurance
company to remove the survey exception for each Mortgage Policy and to issue
such survey-dependent endorsements as are requested by the Administrative Agent.

(u) Title Insurance Policy. The Administrative Agent shall have received, with
respect to each Mortgage and Security Agreement intended to encumber Mortgaged
Property, a policy or policies of title insurance insuring the Lien of the
Mortgage and Security Agreement on such Mortgaged Property, in an amount equal
to, for any fee mortgage policy, the aggregate of the land value and insurable
building and improvements value of such Mortgaged Property (or such lesser
amount as may be acceptable to Administrative Agent), and for any leasehold
mortgage policy, an agreed upon value of the

 

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leasehold estate reasonably acceptable to Administrative Agent (the “Mortgage
Policies”), issued by a nationally recognized title insurance company insuring
the Lien of such Mortgage and Security Agreement as a valid first Lien on the
Mortgaged Property described therein, free of all other Liens that are not
expressly permitted under this Agreement, containing no general survey exception
or mechanics lien exception and issued together with such endorsements and
affirmative coverage as the Administrative Agent may reasonably request.

(v) Solvency. The Administrative Agent shall have received a solvency
certificate substantially in the form of Exhibit V from either the chief
financial officer of the MLP or the General Partner.

(w) Copies of Recorded Documents. The Administrative Agent shall have received a
copy of all recorded documents referred to, or listed as exceptions to title in,
the title policy or policies referred to in Section 6.1(u).

(x) Environmental Reports. An American Society for Testing & Materials E1527-05
compliant Phase I Environmental Site Assessment (“ESA”), inclusive of 40 CFR 312
representations for each Mortgaged Property, prepared by an environmental
consultant reasonably acceptable to the Administrative Agent, in form, scope,
and substance reasonably satisfactory to the Administrative Agent, together with
a letter from the environmental consultant permitting the Agents and the Lenders
to rely on the environmental assessment as if addressed to and prepared for each
of them.

(y) PATRIOT Act. The Administrative Agent shall have received, no later than
five (5) days prior to the Closing Date, all documentation and other information
requested by the Administrative Agent that are required by bank regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including the USA PATRIOT Act.

(z) Flood Determination. The Administrative Agent and Lenders shall have
received, in form and substance reasonably acceptable to the Administrative
Agent, (i) a “Life-of-Loan” Federal Emergency Management Agency Standard Flood
Hazard Determination with respect to each Mortgaged Property and (ii) for each
Mortgaged Property that is located in a flood zone, (A) flood acknowledgements
executed by the Borrower, (B) flood insurance, in an amount reasonably
satisfactory to the Administrative Agent, (1) maintained with a financially
sound and reputable insurer, (2) covering buildings and contents for such
Mortgaged Property and (3) naming the Administrative Agent, as mortgagee and
(C) evidence of the payment of premiums then due and payable for the flood
insurance required by clause (B).

(aa) Axel Johnson Acknowledgment. The Administrative Agent shall have received a
copy of the acknowledgment of Axel Johnson Inc. to the subordination provisions
applicable to any Axel Johnson Subordinated Indebtedness.

(bb) Concurrent Transactions. (i) The IPO shall have been, or shall be
concurrently with the effectiveness hereof, consummated yielding Net Cash
Proceeds to the MLP of not less than ninety-nine percent (99%) of the aggregate
face value of the IPO Distributed Assets at the time of the distribution
thereof.

(ii) The Indebtedness outstanding under the Existing Credit Agreement shall have
been, or shall be concurrently with the effectiveness hereof, paid in full (and
any letters of credit outstanding thereunder shall have becomes Letters of
Credit hereunder), the Administrative Agent shall have received a payoff letter
in respect thereof and any Liens in respect thereof shall have been, or shall be
concurrently with the effectiveness hereof, terminated.

 

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(iii) The Indebtedness outstanding under the Wells Fargo Credit Agreement shall
have been, or shall be concurrently with the effectiveness hereof, paid in full
and the Administrative Agent shall have received a payoff letter in respect
thereof.

(cc) Outside Date. The Closing Date shall occur on or before December 15, 2013.

(dd) Additional Matters. All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Agreement and the other Loan Documents shall be reasonably
satisfactory in form and substance to the Administrative Agent, and the
Administrative Agent shall have received such other documents and legal opinions
in respect of any aspect or consequence of the transactions contemplated hereby
or thereby as it shall reasonably request.

6.2 Conditions to Each Credit Extension. The obligation of each Lender to make
any Loan requested to be made by it on any date (including its initial Loan, if
any) and the agreement of the Issuing Lenders to issue or provide any Letter of
Credit (including the initial Letters of Credit, if any) is subject to the
satisfaction or waiver of the following conditions precedent:

(a) Borrowing Notice. The Administrative Agent shall have received a Borrowing
Notice or Letter of Credit Request pursuant to Section 2.5 or Section 3.3, as
the case may be.

(b) Representations and Warranties. Each of the representations and warranties
made by the Borrower and the other Loan Parties in or pursuant to the Loan
Documents shall be true and correct in all material respects (except that any
representation and warranty that is qualified by “materiality” or “Material
Adverse Effect” shall be true and correct in all respects as so qualified) on
and as of such date as if such representation and warranty was made on and as of
such date, except to the extent any such representation and warranty relates
solely to a specified prior date, in which case such representation and warranty
shall have been true and correct in all material respects as of such specified
date.

(c) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extensions of credit
requested to be made on such date.

(d) Borrowing Base Report. The Co-Collateral Agents shall have timely received a
Borrowing Base Report for the most recent period for which such Borrowing Base
Report is required to be delivered in accordance with Section 6.1(c) or
Section 7.2(c), as applicable.

(e) Borrowing Availability. After giving effect to such extension of credit
requested to be made on such date,

(i) the sum of the Total Working Capital Facility Extensions of Credit and the
Total Acquisition Facility Working Capital Extensions of Credit shall not exceed
the Borrowing Base as of such date,

(ii) the Total Acquisition Facility Acquisition Extensions of Credit shall not
exceed the Eligible Acquisition Asset Value,

(iii) the Total Acquisition Facility Extensions of Credit shall not exceed the
aggregate Acquisition Facility Commitments,

 

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(iv) the Total Working Capital Facility Extensions of Credit shall not exceed
the aggregate Working Capital Facility Commitments,

(v) such extension of credit shall not result in any Applicable Sub-Limit being
exceeded,

(vi) with respect to any such extension of credit under the Acquisition
Facility, the Loan Parties shall be in compliance with the covenants set forth
in Section 8.1 calculated on a Pro Forma Basis, and

(vii) the Administrative Agent shall have received a certificate of a
Responsible Person of the Borrower (such certificate, the “Availability
Certification”) certifying as to the satisfaction of each of the specific
conditions set forth in Sections 6.2(b) and (c) and clauses (i)-(vi) of
Section 6.2(e) as of such date.

(f) Working Capital Facility Extensions of Credit. If, at the time the Borrower
requests any Working Capital Facility Extension of Credit hereunder, the then
outstanding principal balance of all Working Capital Facility Extensions of
Credit (including the face amount of any Working Capital Facility Letters of
Credit) is less than $12,536,250 (such requested Working Capital Facility
Extension of Credit, a “Working Capital Taxable Advance”), then, with respect to
any Mortgage covering real property located in the State of New York which has a
Secured Amount (as defined in each such Mortgage) allocated to the Working
Capital Loans which is more than the then outstanding principal balance of all
Working Capital Facility Extensions of Credit (including the face amount of any
Working Capital Facility Letters of Credit), Borrower shall cause to be recorded
in the appropriate land records in which such Mortgage is recorded a
supplemental instrument in form and substance satisfactory to the Administrative
Agent which evidences that each such Mortgage secures such Working Capital
Taxable Advance, and Borrower shall pay all applicable mortgage recording tax on
that portion of the Working Capital Taxable Advance which equals the difference
between such then outstanding principal balance of the Working Capital Facility
Extensions of Credit prior to the Working Capital Taxable Advance and the
Secured Amount (as defined in each such Mortgage) of each such Mortgage which is
allocated to the Working Capital Loans. Before such Working Capital Taxable
Advance is made, the Borrower shall furnish the Administrative Agent with a
recorded, stamped copy of such supplemental instrument(s) and evidence
satisfactory to the Administrative Agent that all applicable mortgage recording
tax due in connection with such Working Capital Taxable Advance (and the
recording of such supplemental instrument(s) has been paid.

(g) Acquisition Facility Extensions of Credit. If, at the time the Borrower
requests any Acquisition Facility Extension of Credit hereunder, the then
outstanding principal balance of all Acquisition Facility Extensions of Credit
(including the face amount of any Acquisition Facility Letters of Credit) is
less than $4,178,750 (such requested Acquisition Facility Extension of Credit,
an “Acquisition Taxable Advance”), then, with respect to any Mortgage covering
real property located in the State of New York which has a Secured Amount (as
defined in each such Mortgage) allocated to the Acquisition Loans which is more
than the then outstanding principal balance of all Acquisition Facility
Extensions of Credit (including the face amount of any Acquisition Facility
Letters of Credit), Borrower shall cause to be recorded in the appropriate land
records in which such Mortgage is recorded a supplemental instrument in form and
substance satisfactory to the Administrative Agent which evidences that each
such Mortgage secures such Acquisition Taxable Advance, and Borrower shall pay
all applicable mortgage recording tax on that portion of the Acquisition Taxable
Advance which equals the difference between such then outstanding principal
balance of the Acquisition Facility Extensions of Credit prior to the
Acquisition Taxable Advance and the Secured Amount (as defined in each such
Mortgage) of each such Mortgage which is allocated to the Acquisition Loans.
Before such Acquisition

 

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Taxable Advance is made, the Borrower shall furnish the Administrative Agent
with a recorded, stamped copy of such supplemental instrument(s) and evidence
satisfactory to the Administrative Agent that all applicable mortgage recording
tax due in connection with such Acquisition Taxable Advance (and the recording
of such supplemental instrument(s) has been paid.

SECTION 7 AFFIRMATIVE COVENANTS

The Borrower hereby agrees that, commencing on the Closing Date and continuing
so long as any of the Commitments remain in effect or any amount is owing to any
Lender or the Agents hereunder or under any other Loan Document (except
contingent indemnification and expense reimbursement obligations for which no
claim has been made), each Loan Party shall:

7.1 Financial Statements. Furnish to the Administrative Agent (for distribution
to each Lender):

(a) as soon as available, but in any event within one hundred twenty (120) days
after the end of each Fiscal Year of the MLP commencing with the Fiscal Year
ending on December 31, 2013, a copy of the audited consolidated balance sheet of
the MLP and its consolidated Subsidiaries as at the end of such year, in each
case with the related consolidated statements of income and retained earnings
and cash flows for such year, prepared in accordance with GAAP and setting forth
in each case in comparative form the figures for the previous year (or, with
respect to the Fiscal Year ending on December 31, 2013, the figures for the
Borrower and its consolidated Subsidiaries), reported on without a “going
concern” or like qualification or exception, or qualification arising out of the
scope of the audit, by Ernst & Young LLP or other independent certified public
accountants of nationally recognized standing;

(b) as soon as available, but in any event not later than 45 days after (i) the
end of the fiscal quarter ending September 30, 2013, the unaudited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the end of
such fiscal quarter and the related unaudited consolidated statements of income
and retained earnings and cash flows for such quarter and the portion of the
fiscal year through the end of such quarter, prepared in accordance with GAAP
and setting forth in comparative form the figures for the previous year,
certified by a Responsible Person of the Borrower as being fairly presented in
all material respects (subject to normal year end audit adjustments and the
absence of footnotes) and (ii) the end of each subsequent fiscal quarter of the
MLP (except for the fiscal quarter ending on December 31 of each fiscal year),
the unaudited consolidated balance sheet of the MLP and its consolidated
Subsidiaries as at the end of such fiscal quarter and the related unaudited
consolidated statements of income and retained earnings and cash flows for such
quarter and the portion of the fiscal year through the end of such quarter (it
being understood that the financials for any portion of the year prior to the
Closing Date shall be for the Borrower and its consolidated Subsidiaries),
prepared in accordance with GAAP and setting forth, beginning with the fiscal
quarter ending on March 31, 2014, in each case in comparative form the figures
for the previous year (or, with respect to any fiscal quarter ending on or prior
to September 30, 2014, the figures for the Borrower and its consolidated
Subsidiaries for the previous year), certified by a Responsible Person of the
Borrower as being fairly presented in all material respects (subject to normal
year end audit adjustments and the absence of footnotes);

(c) as soon as available, but in any event not later than 30 days after the end
of each calendar month, the unaudited consolidated and consolidating balance
sheet of the MLP and its consolidated Subsidiaries as at the end of such
calendar month and the related unaudited consolidated and consolidating
statements of income and the unaudited consolidated retained

 

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earnings and cash flows for such month and the portion of the Fiscal Year
through the end of such month (it being understood that the financials for any
portion of the year prior to the Closing Date shall be for the Borrower and its
consolidated Subsidiaries), prepared in accordance with GAAP adjusted on an
Economic Basis plus or minus any Allowed Reserve, as applicable, and setting
forth, beginning with the first calendar month ending after the Closing Date, in
each case in comparative form the figures for the previous year (or, with
respect to any calendar month ending on or prior to the date that is the first
anniversary of the Closing Date, the figures for the Borrower and its
consolidated Subsidiaries for the previous year), certified by a Responsible
Person of the Borrower, as being fairly presented in all material respects
(subject to normal year-end audit adjustments and the absence of footnotes);

(d) as soon as available, but in any event not later than 60 days after the
commencement of each Fiscal Year of the Borrower, the Annual Budget for such
Fiscal Year;

(e) as soon as available, but in any event not later than 30 days after the end
of each calendar month, (i) the Operating Forecast for the next succeeding
calendar month and (ii) a comparison of actual performance (as to income) of the
MLP and its consolidated Subsidiaries against the Operating Forecast for such
calendar month;

(f) concurrently with the delivery of the financial statements referred to in
Section 7.1(a), a Reconciliation Summary for the annual financial statements
delivered pursuant to Section 7.1(a); and

(g) concurrently with the delivery of the financial statements referred to in
Section 7.1(c), a Reconciliation Summary for the monthly financial statements
delivered pursuant to Section 7.1(c).

All such financial statements (other than the Annual Budgets and the Operating
Forecasts) shall present fairly in all material respects the financial condition
of the Persons covered by such financial statements as at such date and shall be
prepared in reasonable detail and, except as noted herein, in accordance with
GAAP or GAAP adjusted on an Economic Basis plus or minus any Allowed Reserve, as
applicable, applied consistently throughout the periods reflected therein and
with prior periods (except as approved by such accountants or officer, as the
case may be, and disclosed therein and, with regard to the non-annual financial
statements, subject to normal year-end adjustments and the absence of
footnotes). The Annual Budgets and the Operating Forecasts shall have been
prepared in good faith under the direction of a Responsible Person of the
General Partner and based upon good faith estimates and assumptions believed by
the Loan Parties to be reasonable at the time made, it being recognized by the
Lenders that such financial information as it relates to future events is not to
be viewed as fact and that actual results during the period or periods covered
by such financial information may differ from the projected results set forth
therein by a material amount. Information required to be delivered pursuant to
this Section 7.1 shall be deemed to have been delivered if such information, or
one or more annual or quarterly or other reports or proxy statements containing
such information, shall have been posted and shall remain available on a website
maintained by the SEC (such reports or proxy statements, the “SEC Filings”),
provided that the Borrower shall have notified (which may be made by facsimile
or electronic mail) the Administrative Agent of the posting of any such
information pursuant to Section 7.7(l). In addition, and notwithstanding any
other provision of this Section 7.1, to the extent any SEC Filing shall have
been certified by a Responsible Officer of the MLP, no further certification by
the Borrower shall be required under this Section 7.1 with respect to the
information contained in such SEC Filing; provided, that the MLP hereby allows
the Administrative Agent and the Lenders to rely upon such certification as if
such certification had been made to the Administrative Agent and the Lenders.

 

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7.2 Certificates; Other Information. Furnish to the Administrative Agent (for
distribution to the Lenders, including, if requested by a Lender, through
posting on Intralinks or other web site in use to distribute information to the
Lenders):

(a) concurrently with the delivery of the financial statements referred to in
Section 7.1(a), a certificate of the independent certified public accountants
reporting on such financial statements, if such accountants are willing to
provide such certificate (provided, that if such independent certified public
accountants are unwilling to provide such certificate, and such certificate is
customarily given by independent certified public accountants of nationally
recognized standing in the market, the Loan Parties shall engage another
certified public accountant willing to provide such certificate), stating in
substance that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default arising out of the financial
covenants in Section 8.1, except as specified in such certificate;

(b) concurrently with the delivery of the financial statements referred to in
Section 7.1(c), a certificate of a Responsible Person of the Borrower
substantially in the form of Exhibit O (such a certificate, a “Compliance
Certificate”) (A) stating that such Responsible Person has obtained no knowledge
of any Default or Event of Default, in each case except as specified in such
certificate, (B) stating the Loan Parties are in material compliance with the
Risk Management Policy and (C) showing in detail the calculations supporting
such Person’s certification of the Loan Parties’ compliance with the
requirements of Sections 8.1(a) and 8.7 and, if such period ends on a date which
is also the end date of a fiscal quarter, the requirements of Sections 8.1(b),
(c) and (d);

(c) (w) within seven (7) Business Days after the last day of each calendar
month, a Borrowing Base Report for the Loan Parties dated the last day of such
calendar month, (x) within seven (7) Business Days after each Semi-Monthly
Reporting Date at any time that (i) either (A) the Borrowing Base Availability
or (B) the Acquisition Facility Working Capital Sub-Limit, plus, the aggregate
Working Capital Facility Commitments, minus, the Total Working Capital Facility
Extensions of Credit, minus, the Total Acquisition Facility Working Capital
Extensions of Credit is less than or equal to $35,000,000, (ii) both (A) the sum
of the Total Working Capital Facility Extensions of Credit and the Total
Acquisition Facility Working Capital Extensions of Credit exceeds $725,000,000
(or if a Working Capital Facility Increase has been effected, the Working
Capital Facility Commitments less $25,000,000) and (B) the Borrowing Base
Availability is less than or equal to $50,000,000 or (iii) an Event of Default
shall have occurred and be continuing, a Borrowing Base Report dated as of the
applicable Semi-Monthly Reporting Date, (y) within seven (7) Business Days
following any request by the Co-Collateral Agents, a Borrowing Base Report for
the Loan Parties dated the date of such request and (z) at any time and from
time to time, as the Borrower may determine in its sole, absolute discretion, a
Borrowing Base Report for the Loan Parties dated as of a date within the seven
(7) Business Days preceding delivery thereof to the Co-Collateral Agents;

(d) as soon as available, but in any event not later than seven (7) Business
Days after each Semi-Monthly Reporting Date, a Marked-to-Market Report and
Position Report, as of the applicable Semi-Monthly Reporting Date, in form
reasonably acceptable to the Co-Collateral Agents, certified by the Borrower;

(e) if any such report described in clauses (b), (c) or (d) above is not
reasonably satisfactory in form and substance to the Administrative Agent or the
Co-Collateral Agents, as applicable, the Borrower shall promptly deliver such
information supplementing such report as the Administrative Agent or the
Co-Collateral Agents, as applicable, may reasonably request;

 

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(f) concurrently with the delivery of the financial statements referred to in
Section 7.1, a written briefing on any material overdue Account Receivables or
any other material impairment in the value of the assets of the Loan Parties;

(g) upon request by the Administrative Agent, copies of any Employee Benefit
Plan and related documents, reports and correspondence;

(h) [reserved];

(i) promptly, and at least one (1) Business Day after the initial execution and
delivery thereof by the parties thereto, (i) notice of the entrance into any
document or agreement governing any Indebtedness incurred by any Loan Party
pursuant to Section 8.2(h) having a principal amount equal to or in excess of
$10,000,000 or that is a note (other than a promissory note evidencing
commercial Indebtedness), debenture, bond or other like obligation, together
with a certificate of a Responsible Person of the Borrower stating that such
Indebtedness complies with the terms of Section 8.2(h), and (ii) true, correct
and complete copies of any material documents and agreements governing any
Indebtedness incurred by any Loan Party pursuant to Section 8.2(h) having a
principal amount in excess of $50,000,000 or that is a note (other than a
promissory note evidencing commercial Indebtedness), debenture, bond or other
like obligation; and

(j) promptly, such additional financial and other information regarding the Loan
Parties as any Lender may from time to time reasonably request.

7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its material
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on its books.

7.4 Conduct of Business and Maintenance of Existence. (i) Continue to engage in
business of the same general type as now conducted by it or as described in
Section 8.13 and preserve, renew and keep in full force and effect its existence
and take all reasonable action to maintain all material rights, privileges and
franchises necessary or desirable in the normal conduct of its business except
as otherwise permitted pursuant to Section 8.4 or where the failure to do so
could not reasonably be expected to have a Material Adverse Effect; and
(ii) comply with all Contractual Obligations and Requirements of Law, except to
the extent that failure to comply therewith could not, in the aggregate, be
reasonably expected to have a Material Adverse Effect.

7.5 Maintenance of Property; Insurance. (i) Keep substantially all its property
useful and necessary in its business in good working order and condition in all
material respects (excepting ordinary wear and tear and the effect of events or
circumstances as to which such property is covered by insurance or as to which
funds have been reserved); (ii) maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business,
which insurance shall name the Administrative Agent for the ratable benefit of
the Secured Parties as lender loss payee, in the case of property insurance, as
an additional insured, in the case of liability insurance, and as an additional
insured and recipient of a mortgagee endorsement, in the case of environmental
liability insurance, as its interests may appear; (iii) furnish to the
Administrative Agent (for distribution to the Lenders through posting on
Intralinks or other web site in use to distribute information to the Lenders),
upon request, full information as to the insurance carried, evidence of the
underlying policy, the related cover note and all addenda thereto; and
(iv) promptly pay all insurance premiums.

 

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7.6 Inspection of Property; Books and Records; Discussions. At the sole expense
of the Loan Parties: (i) keep books of records and accounts in conformity with
GAAP that present fairly the financial condition of the MLP and its consolidated
Subsidiaries covered thereby and (ii) within three (3) Business Days of the date
agreed or requested therefor, permit representatives of the Agents to (x) visit
and inspect any of its properties and examine and make abstracts from any of its
books and records upon reasonable notice during normal business hours once
during each twelve (12) month period following the Closing Date (or more often
at the Co-Collateral Agents’ discretion exercised in good faith); provided that,
during the continuance of an Event of Default, such visits and inspections may
occur at any time, and (y) discuss the business, operations, properties and
financial and other condition of the Loan Parties with officers and employees of
the Loan Parties and with its independent certified public accountants to the
extent consistent with the national policies of such independent certified
public accountants, upon reasonable notice during normal business hours.
Information obtained by the Agents pursuant to this Section 7.6 shall be shared
with a Lender upon the request of such Lender.

7.7 Notices. Promptly give notice to the Administrative Agent (for distribution
to the Lenders, including, if requested by a Lender, through posting on
Intralinks or other web site in use to distribute information to the Lenders)
of:

(a) the occurrence of any Default or Event of Default;

(b) any (i) default or event of default under any Contractual Obligation of any
Loan Party or (ii) litigation, investigation or proceeding which may exist at
any time between any Loan Party and any Governmental Authority, which in either
case could reasonably be expected to have a Material Adverse Effect;

(c) (i) any litigation or administrative or arbitration proceeding to which any
Loan Party is a party in which the amount involved is $5,000,000 or more and not
covered by insurance, segregated cash reserves or bonds, or in which injunctive
or similar relief is sought or (ii) any Lien on any of the Collateral (other
than Liens created hereby or Liens permitted on Collateral pursuant to
Section 8.3);

(d) the following events: (i) the occurrence of any Reportable Event with
respect to any Single Employer Plan, a determination that a plan is in “at risk”
status within the meaning of Section 430 of the Code, a failure to make any
required contribution to a Plan when such contributions have become due, the
creation of any Lien in favor of the PBGC or a Plan, a determination that a
multiemployer plan is in endangered, seriously endangered or critical status, in
each case within the meaning of Section 432 of the Code, or any withdrawal from,
or the termination, Reorganization or Insolvency of, any Multiemployer Plan in
which the Borrower or any other Loan Party is reasonably expected to have a
liability in excess of $5,000,000 or (ii) the institution of proceedings or the
taking of any other action by the PBGC to terminate any Single Employer Plan;

(e) the Borrowing Base Availability becoming less than or equal to $35,000,000;

(f) the Acquisition Facility Working Capital Sub-Limit, plus, the aggregate
Working Capital Facility Commitments, minus, the Total Working Capital Facility
Extensions of Credit, minus, the Total Acquisition Facility Working Capital
Extensions of Credit becoming less than or equal to $35,000,000;

(g) the sum of the Total Working Capital Facility Extensions of Credit and the
Total Acquisition Facility Working Capital Extensions of Credit exceeding the
Borrowing Base;

 

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(h) the Total Acquisition Facility Acquisition Extensions of Credit exceeding
the Eligible Acquisition Asset Value;

(i) both (1) the sum of the Total Working Capital Facility Extensions of Credit
and the Total Acquisition Facility Working Capital Extensions of Credit
exceeding $725,000,000 (or if a Working Capital Facility Increase has been
effected, the Working Capital Facility Commitments less $25,000,000) and (2) the
Borrowing Base Availability becoming less than or equal to $50,000,000;

(j) the occurrence of any event which could reasonably be expected to have a
material adverse effect on the aggregate value of the Collateral;

(k) a Material Adverse Effect; and

(l) any filing made by the Borrower or any Guarantor with the SEC of any annual,
regular, periodic or special report or registration statement which the Borrower
or Guarantor files with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934.

Each notice pursuant to this Section 7.7 shall be accompanied by a statement of
a Responsible Person setting forth details of the occurrence referred to therein
and stating what action the Loan Parties propose to take with respect thereto.

7.8 Environmental Laws. (a) Comply with, and direct or obtain agreement, to the
extent that any lease existing as of the Closing Date allows and in all cases
pursuant to terms that shall be contained in all leases renewed or entered into
after the Closing Date, compliance by all tenants and subtenants, if any, with,
any and all applicable Environmental Laws and obtain and maintain, and direct
all tenants and subtenants to obtain and comply with and maintain, any and all
Environmental Permits required by applicable Environmental Laws, except to the
extent that failure to do so could not be reasonably expected to have a Material
Adverse Effect. Without limiting the foregoing, comply in all material respects
with all material permits, registrations, licenses or similar authorizations or
notifications required to construct and operate bulk storage tanks and other
bulk storage facilities at the Properties.

(b) Conduct and complete all investigations, studies, sampling and testing, and
all remedial, removal, compliance and other actions, required under
Environmental Laws, except to the extent the failure to do so could not
reasonably be expected to have a Material Adverse Effect, and promptly comply
with all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws, except to the extent that the same are being contested in
good faith by appropriate proceedings and the pendency of such proceedings could
not be reasonably expected to have a Material Adverse Effect.

7.9 Periodic Audit of Borrowing Base Assets. Permit the Co-Collateral Agents or
any other designee of the Co-Collateral Agents to perform, or to have an
independent inspector mutually reasonably acceptable to the Borrower and the
Required Lenders perform, a periodic due diligence inspection, test and review
of all of the assets of the Loan Parties that comprise each asset category set
forth in the definitions of “Borrowing Base” and the Borrower’s internal
controls, credit and risk practices and trading book on a mutually convenient
Business Day once during each twelve (12) month period following the Closing
Date (or more often at the Co-Collateral Agents’ discretion exercised in good
faith), the results of which shall be reasonably satisfactory to the
Co-Collateral Agents in all material respects and provided by the Co-Collateral
Agents to each Lender; provided, however, the Co-Collateral Agents or any other
designee of the Co-Collateral Agents shall be entitled to perform additional due
diligence inspections, tests and reviews of such inventory and accounts
receivable on Business Days at any time and/or frequency that the Co-Collateral
Agents or the Required Lenders deem necessary at any time during the occurrence
and continuance of an Event of Default; provided, further, that the expense of
all such due diligence inspections, tests and reviews shall be borne exclusively
by the Borrower.

 

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7.10 Risk Management Policy. (a) Keep the Risk Management Policy in full force
and effect and conduct its business in compliance with the Risk Management
Policy.

(b) The Borrower shall provide at least ten (10) Business Days’ prior written
notice to the Administrative Agent (for distribution to the Lenders through
posting on Intralinks) of any proposed amendment, modification, supplement or
other change to such Risk Management Policy, which proposed amendment,
modification, supplement or other change must be approved by the Administrative
Agent (which may require the approval of the Supermajority Lenders at its
reasonable discretion; provided, that (i) subject to the following clause (ii),
failure of a Lender to respond to any request by the Administrative Agent for
approval within ten (10) Business Days after receipt of such request shall be
deemed an approval of such proposed amendment, modification, supplement or other
change and (ii) the Administrative Agent may, in its sole discretion, extend
such ten (10) Business Day period if the Administrative Agent determines that
any such proposed amendment, modification, supplement or other change requires
additional review by any Lender) if it relates to modifications to stop loss
position limits, or contract or commodity traded limits (including outright
position limits). The Borrower shall provide to the Administrative Agent (for
distribution to the Lenders, including, if requested by a Lender, through
posting on Intralinks or other web site in use to distribute information to the
Lenders), within ten (10) days of the effectiveness of any such amendment,
modification, supplement or other change, such revised Risk Management Policy in
its entirety.

7.11 Collections of Accounts Receivable. Pursuant to and in accordance with
Section 3(c) of the Security Agreement, (i) instruct each Account Debtor of an
Account Receivable to make all payments to the applicable Loan Party in respect
of such Account Receivable to a Controlled Account, (ii) with respect to any
items sent directly to a Loan Party by an Account Debtor, hold such items in
trust for the Secured Parties and promptly deposit such items into a Controlled
Account and (iii) otherwise comply with Section 3 of the Security Agreement.

7.12 Taxes. Each Loan Party and each of its Subsidiaries shall timely file or
cause to be filed all material Tax returns required to be filed by it and shall
timely pay all material Taxes due and payable by it or imposed with respect to
any of its property and all other material fees or other charges imposed on it
or any of its property by any Governmental Authority (other than any Taxes, fees
or other charges, the amount or validity of which is being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of such Loan Party).

7.13 Additional Collateral; Further Actions.

(a) In the event that any such Loan Party acquires or forms any additional
Subsidiary (other than an Exempt CFC or any Subsidiaries thereof), shall:

(i) cause such additional Subsidiary to become a party to the applicable
Security Documents and Guarantee;

(ii) if such additional Subsidiary holds any Capital Stock of any Subsidiary
(other than an Exempt CFC or any Subsidiaries thereof), cause such additional
Subsidiary to execute such pledge agreements or addenda to the applicable Pledge
Agreement, each in form and substance satisfactory to the Administrative Agent,
and take such other action as shall be necessary or advisable (including the
filing of financing statements on Form UCC-1 and the delivery of pledge
agreements) in order to perfect the pledge of all of the Capital Stock of such
Subsidiary in favor of the Administrative Agent for the benefit of the Secured
Parties;

 

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(iii) cause such additional Subsidiary to deliver to the Administrative Agent
and the Lenders all documentation and other information required by bank
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations; including the USA PATRIOT Act;

(iv) if effective to perfect a Lien on such accounts in the applicable
jurisdiction or otherwise requested by the Administrative Agent in its sole
discretion, cause an Account Control Agreement for each Deposit Account (other
than any Excluded Account), Securities Account and Commodity Account of such
additional Subsidiary to be executed and delivered by such Subsidiary and the
bank, broker or other Person maintaining such Deposit Account, Securities
Account or Commodity Account to the extent required by the Security Agreement;

(v) at the request of the Administrative Agent, solely with respect to any real
property having a value equal to or in excess of $500,000, (A) cause any such
additional Subsidiary that owns a fee simple or material leasehold estate in
real property located in the United States to (i) prepare, execute and deliver a
mortgage or deed of trust, as applicable, (if and to the extent permissible
under the terms of the lease) in substantially the same form as the Mortgage and
Security Agreement together with any Form UCC-1 financing statements required by
the Administrative Agent and (ii) deliver a “Life-of-Loan” Federal Emergency
Management Agency Standard Flood Hazard Determination and with respect to each
such real property that is located in a flood zone, flood acknowledgements,
flood insurance and evidence of the payment of premiums then due and payable for
such flood insurance, in each case in form and substance reasonably satisfactory
to the Administrative Agent and subject to the requirements set forth in
Section 6.1(z), and (B) cause any such Subsidiary that owns a fee simple or
material leasehold estate in such real property located outside of the United
States to prepare, execute and deliver all mortgage or security documentation
determined by the Administrative Agent to be sufficient to create and/or perfect
a Lien in favor of the Administrative Agent on such real property, and to take
such other actions as the Administrative Agent shall request in order to create
and/or perfect a Lien in favor of the Administrative Agent on such real property
of such Subsidiary and cause such Subsidiary to deliver a mortgage title
insurance policy (only for such real property located in the United States),
survey (only for such real property located in the United States) and appraisal
of the real property, in each case in form and substance reasonably satisfactory
to the Administrative Agent subject to the matters and in the form required by
Sections 6.1(t) and (u); and

(vi) take any other action as shall be necessary or advisable (including the
filing of financing statements on Form UCC-1 and any other filing necessary to
maintain the perfection of the security interest in the applicable jurisdiction)
to cause such Lien described in this Section 7.13(a) to be a Perfected First
Lien on all right, title and interest of such Collateral.

(b) The Administrative Agent shall be entitled to receive legal opinions of one
or more counsel to the Borrower and such additional Subsidiary addressing such
matters as the Administrative Agent may reasonably request and as is customary
opinion practice, including the enforceability of each Security Document to
which such additional Subsidiary becomes a party and the pledge of the Capital
Stock of such Subsidiary, and the creation, validity and perfection of the Liens
so granted by such Subsidiary and the Borrower and/or other Loan Parties to the
Administrative Agent for the benefit of the Lenders.

(c) (i) With respect to any fee simple or material leasehold estate in real
property having a value equal to or in excess of $500,000 of any of the Loan
Parties located in the United States

 

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which were not Mortgaged Properties on the Closing Date, including pipelines,
identified by the Administrative Agent or with respect to any such property
acquired by any Loan Party after the Closing Date, the applicable Loan Party
shall, upon the request of the Administrative Agent, prepare, execute and
deliver a mortgage or deed of trust, as applicable (if and to the extent
permissible under the terms of the lease), in substantially the same form as the
Mortgage and Security Agreement together with any Form UCC-1 financing
statements required by the Administrative Agent, and with respect to any fee
simple or leasehold estate in real property of any of the Loan Parties (other
than an Exempt CFC or any Subsidiaries thereof) located outside the United
States, the applicable Loan Party shall prepare, execute and deliver all
mortgage or security documentation determined by the Administrative Agent to be
sufficient to create and/or perfect a Lien in favor of the Administrative Agent
on such real property, and take such other actions as the Administrative Agent
shall request in order to create and/or perfect a Lien in favor of the
Administrative Agent on any Mortgaged Property of such Loan Party; and (ii) with
respect to any Mortgaged Property having a value equal to or in excess of
$500,000 of any Loan Party (whether or not mortgaged on the Closing Date or
thereafter), the applicable Loan Party shall, upon the request of the
Administrative Agent, cause such Loan Party to deliver a mortgagee’s title
insurance policy (only for a Mortgaged Property located in the United States),
survey (only for a Mortgaged Property located in the United States) and
appraisal of such Mortgaged Property, in each case in form and substance
reasonably satisfactory to the Administrative Agent subject to the matters and
in the form required by Sections 6.1(t) and (u) hereof, (iii) upon the request
of the Administrative Agent, the Borrower shall deliver legal opinions of one or
more counsel to the applicable Loan Party with respect to each Mortgage and
Security Agreement and each non-United States mortgage and collateral document
(in each case, covering real property having a value equal to or in excess of
$500,000), addressing such matters as the Administrative Agent may reasonably
request and is customary opinion practice, including the enforceability of such
Security Documents, and the creation, validity and perfection of the Liens so
granted by the applicable Loan Party and (iv) with respect to any Mortgaged
Property located in the United States and having a value equal to or in excess
of $500,000 of any Loan Party (whether or not mortgaged on the Closing Date or
thereafter), the applicable Loan Party shall deliver, upon the request of the
Administrative Agent, a “Life-of-Loan” Federal Emergency Management Agency
Standard Flood Hazard Determination and if such Mortgaged Property is located in
a flood zone, flood acknowledgements, flood insurance and evidence of the
payment of premiums then due and payable for such flood insurance, in each case
in form and substance reasonably satisfactory to the Administrative Agent and
subject to the requirements set forth in Section 6.1(z).

(d) Upon request of the Administrative Agent (which request shall not be made
unless the Administrative Agent has a reasonable basis to make such request with
respect to one or more Mortgaged Properties), the Loan Parties shall promptly
order and, upon completion, provide the Administrative Agent, an American
Society for Testing & Materials E1527-05 compliant Phase I Environmental Site
Assessment (“ESA”), inclusive of 40 CFR 312 representations for each such
Mortgaged Property, prepared by an environmental consultant reasonably
acceptable to the Administrative Agent, in form, scope and substance reasonably
satisfactory to the Administrative Agent, together with a letter from the
environmental consultant permitting the Agents and the Lenders to rely on the
environmental assessment as if addressed to and prepared for each of them. The
Administrative Agent may, upon the receipt of a Phase I ESA and after
consultation with the Borrower regarding the results of such Phase I ESA and the
recommendations therein, require the delivery of further environmental
assessments or reports to the extent such further assessments or reports are
recommended in the Phase I ESA or the Administrative Agent has a reasonable
basis to require such further assessments or reports.

7.14 Use of Proceeds. Use the entire amount of the proceeds of the Loans and the
Letters of Credit as set forth in Section 5.21.

 

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7.15 Cash Management. Maintain all of the Pledged Accounts of the Loan Parties
at a Cash Management Bank.

7.16 New Business Valuations of Approved Acquisition Assets. If at any time any
Approved Acquisition Asset has been destroyed or damaged in any material respect
or any other event or condition has occurred that results in a material adverse
change in the value of any Approved Acquisition Asset, (a) the Borrower shall
promptly notify the Administrative Agent thereof, and permit the Administrative
Agent, in its sole discretion, and at sole expense of the Borrower and the other
Loan Parties, to obtain a new Business Valuation of such Approved Acquisition
Asset and (b) without derogating from the Borrower’s obligations to provide
notification pursuant to clause (a) above, if the Administrative Agent otherwise
becomes aware of any such destruction, damage, event or condition without
notification from the Borrower, the Administrative Agent shall be permitted, in
its sole discretion, upon notice to and at the sole expense of the Borrower and
the other Loan Parties, to obtain a new Business Valuation of such Approved
Acquisition Asset, provided that in the case of clause (a) or (b), a new
Business Valuation shall not be required if the Borrower has agreed to remove
the affected Approved Acquisition Asset from the calculation of the Eligible
Acquisition Asset Value.

7.17 Post-Closing Matters. Within 30 days of the Closing Date (or such longer
time as may be agreed by the Administrative Agent), deliver duly executed
Account Control Agreements with respect to each Pledged Account in existence on
the Closing Date.

7.18 AML Laws. Comply with each of representations and warranties under
Section 5.24.

SECTION 8 NEGATIVE COVENANTS

The Borrower hereby agrees that, commencing on the Closing Date and continuing
so long as any of the Commitments remain in effect or any amount is owing to any
Lender or any Agent hereunder or under any other Loan Document (except
contingent indemnification and expense reimbursement obligations for which no
claim has been made), no Loan Party shall, directly or indirectly:

8.1 Financial Condition Covenants.

(a) Minimum Consolidated Net Working Capital. Permit, as of the last day of any
calendar month (commencing with the first full calendar month ending after the
Closing Date), the Consolidated Net Working Capital to be less than the Minimum
Consolidated Net Working Capital Amount applicable as of such day in accordance
with the definitions thereof.

(b) Minimum Consolidated Fixed Charge Coverage Ratio. Permit, as of the last day
of any fiscal quarter (commencing with the fiscal quarter ending December 31,
2013), for the twelve (12) month period ending on such day, the Consolidated
Fixed Charge Coverage Ratio to be less than the Minimum Consolidated Fixed
Charge Coverage Ratio.

(c) Maximum Consolidated Senior Secured Leverage Ratio. Permit, as of the last
day of any fiscal quarter (commencing with the fiscal quarter ending
December 31, 2013), for the twelve (12) month period ending on such day, the
Consolidated Senior Secured Leverage Ratio to exceed the Maximum Consolidated
Senior Secured Leverage Ratio applicable as of such day in accordance with the
definition thereof.

(d) Maximum Consolidated Total Leverage Ratio. Permit, as of the last day of any
fiscal quarter (commencing with the fiscal quarter ending December 31, 2013),
for the twelve (12) month period ending on such day, the Consolidated Total
Leverage Ratio to exceed the Maximum Consolidated Total Leverage Ratio
applicable as of such day in accordance with the definition thereof.

 

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8.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, or permit any preferred stock to be issued or outstanding, except:

(a) Indebtedness of such Loan Party under this Agreement and the other Loan
Documents;

(b) (i) any Intercompany Subordinated Indebtedness and (ii) any Axel Johnson
Subordinated Indebtedness;

(c) Indebtedness in respect of purchase money security interests, Financing
Leases or Synthetic Leases; provided that the aggregate amount of Indebtedness
incurred pursuant to this Section 8.2(c) in any Fiscal Year shall not exceed
$30,000,000;

(d) Indebtedness outstanding on the date hereof and listed on Schedule 8.2, or
any refinancings, refundings, renewals or extensions thereof (such refinanced,
refunded, renewed or extended Indebtedness, “Permitted Refinancing
Indebtedness”); provided that (i) the stated amount of such Indebtedness is not
increased at the time of such refinancing, refunding, renewal or extension
(except to the extent of non-cash interest), (ii) such refinancing, refunding,
renewal or extended Indebtedness shall (A) not have a stated final maturity
prior to the final maturity date of the Indebtedness being refinanced, refunded,
renewed or extended and (B) have an average life to maturity equal to or greater
than such Indebtedness, (iii) the terms of such refinancing, refunding, renewal
or extension, taken as a whole, shall not be more restrictive than the terms of
such Indebtedness, (iv) any guarantee entered into in connection with such
refinancing, refunding, renewal or extension that is not a refinancing of an
existing guarantee of such Indebtedness shall not be permitted under this
Section 8.2(d) and (v) if the Indebtedness being refinanced, refunded, renewed
or extended is subordinated, such Permitted Refinancing Indebtedness shall be
subordinated to at least the same extent, and on terms at least as favorable to
the Lenders, as the Indebtedness being refinanced, refunded, renewed or
extended;

(e) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business or other cash management services in
the ordinary course of business; provided that such Indebtedness (other than
credit or purchase cards) is extinguished within one (1) Business Day after
notification to any Loan Party of its incurrence;

(f) Indebtedness under one or more Contango Facilities in an amount outstanding
at any time not to exceed $125,000,000 in the aggregate;

(g) limited recourse Indebtedness of the Borrower or any Loan Party to any
Governmental Authority in respect of a capital project financing provided by
such Governmental Authority, but only so long as (i) such funding accounts for
100% of the capital costs of such project in excess of any Investment by the
Borrower or such Loan Party, (ii) the recourse to the Borrower or such Loan
Party, as applicable, with respect to such Indebtedness is limited to its
interest in the project financed by such Indebtedness and proceeds from the
operation of such project, (iii) the aggregate principal amount of all such
Indebtedness at any time outstanding shall not exceed $20,000,000 and (iv) the
terms of such Indebtedness are reasonably satisfactory to the Administrative
Agent; and

 

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(h) additional unsecured Indebtedness of the Loan Parties in an aggregate
principal amount (for all Loan Parties) not to exceed $250,000,000 at any one
time outstanding; provided, that (i) the terms of such unsecured Indebtedness
shall not be more restrictive, in the aggregate to the Loan Parties, than the
terms, conditions, covenants and defaults contained in the Loan Documents,
(ii) the terms of such unsecured Indebtedness shall permit Obligations under the
Loan Documents in a principal amount at least equal to 115% of the combined
aggregate amount of the Working Capital Facility Commitments in effect as of the
date the documentation for any such unsecured Indebtedness is entered into and
the Acquisition Facility Commitments in effect as of the date the documentation
for any such unsecured Indebtedness is entered into without meeting any
financial ratio test (including any incurrence test) contained in the
documentation for such unsecured Indebtedness, (iii) the Weighted Average Life
to Maturity of such unsecured Indebtedness shall be at least ninety-one
(91) days after the Maturity Date, (iv) the maturity date of such unsecured
Indebtedness shall be at least six (6) months after the Maturity Date, (v) such
unsecured Indebtedness shall not be guaranteed by any Subsidiary of the MLP that
is not the Borrower or a Guarantor; and (vi) no Default or Event of Default
shall have occurred and be continuing as of the date of incurrence or
refinancing of such unsecured Indebtedness (or would occur as a result thereof)
and as of such date, the Loan Parties would be in compliance with the covenants
set forth in Section 8.1 calculated on a Pro Forma Basis as of such date
assuming the incurrence of such unsecured Indebtedness.

Notwithstanding the foregoing, in no event shall any Indebtedness of (i) any
Loan Party, on the one hand, owing to (ii) the MLP or any Subsidiary or any
Affiliate of the MLP, on the other hand, be permitted hereunder other than
pursuant to Section 8.2(b).

8.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, except for:

(a) Liens for taxes, assessments or governmental charges or levies not yet due
and payable or which are being contested in good faith by appropriate
proceedings; provided that adequate reserves with respect thereto are maintained
on the books of such Loan Party, in conformity with GAAP;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
landlord’s Liens, or other similar Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or which are
being contested in good faith by appropriate proceedings or which have been
bonded over or otherwise adequately secured against;

(c) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation or in connection with casualty
insurance;

(d) deposits or bonds to secure (i) the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds and (ii) indemnities, performance and similar bonds and other
obligations of a like nature incurred in the ordinary course of business;

(e) Permitted Cash Management Liens;

(f) easements, rights-of-way, restrictions and other similar title exceptions
and encumbrances, landlords’ and lessors’ Liens on rented premises and
restrictions on transfers of leases, each incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount, secure
obligations that do not constitute Indebtedness, and which do not in any case
materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Loan Parties;

 

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(g) Liens arising from precautionary or unauthorized Uniform Commercial Code
financing statements;

(h) Liens created pursuant to the Security Documents and the other Loan
Documents;

(i) First Purchaser Liens;

(j) netting and other offset rights granted by any Loan Party to counterparties
under Commodity Contracts and Financial Hedging Agreements on or with respect to
payment and other obligations owed by such Loan Party to such counterparties;

(k) Liens in existence on the Closing Date that are listed, and the property
subject thereto described, on Schedule 8.3;

(l) Liens on cash and short-term investments deposited as collateral by a Loan
Party under any Commodity Contract or Financial Hedging Agreement with the
counterparty (or counterparties) thereto;

(m) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 9.1(i) or securing appeal or other surety bonds related
to such judgments;

(n) Liens of the account bank on currency, Cash Equivalents, commodities or
Commodities Contracts of the Loan Parties deposited in, or credited to, any
Controlled Account that are subject to an Account Control Agreement; provided
that, such Liens are specifically permitted by such Account Control Agreement or
arise by operation of law;

(o) Liens securing Indebtedness of the Loan Parties permitted by Section 8.2(f);
provided that such Liens do not at any time encumber any property other than the
inventory, forward contracts and receivables related to the Cash and Carry
Transactions financed by such Indebtedness;

(p) Liens securing Indebtedness of the Loan Parties permitted by Section 8.2(g);

(q) restrictions under federal and state securities laws on the transfer of
securities;

(r) Liens constituting purchase money security interests (including mortgages,
conditional sales, Financing Leases and any other title retention or deferred
purchase devices) in real property, interests in leases or personal property
existing or created on the date on which such property is acquired; provided,
however, that (i) each such security interest shall attach solely to the
particular item of property so acquired, and the principal amount of
Indebtedness secured thereby shall not exceed the cost (including all such
Indebtedness secured thereby, whether or not assumed) of such item of property;
and (ii) the Indebtedness secured thereby was incurred, and permitted, pursuant
to Section 8.2(c);

(s) Liens securing the Maine Dock Liability Obligations and the Office Building
Obligations in connection with the incurrence of such liabilities; provided,
however, that each such Lien shall attach solely to the property acquired; and

(t) Liens on assets not included in the Borrowing Base securing obligations of
the Loan Parties in an amount not to exceed $2,500,000 in the aggregate at any
one time outstanding.

 

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Notwithstanding anything to the contrary contained in this Agreement or any
Security Document (including any provision for, reference to, or acknowledgement
of, any Lien or Permitted Borrowing Base Lien or Permitted Cash Management
Lien), nothing herein and no approval by the Administrative Agent or Lenders of
any Lien, Permitted Borrowing Base Lien or Permitted Cash Management Lien
(whether such approval is oral or in writing) shall be construed as or deemed to
constitute a subordination by the Administrative Agent or the Lenders of any
security interest or other right, interest or Lien in or to the Collateral or
any part thereof in favor of any Lien, Permitted Borrowing Base Lien or
Permitted Cash Management Lien or any holder of any Lien, Permitted Borrowing
Base Lien or Permitted Cash Management Lien.

8.4 Limitation on Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets of such Loan Party, except for the following, in each case so long as, at
the time thereof and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing:

(a) the merger, consolidation, amalgamation or liquidation of any Subsidiary
into the Borrower in a transaction in which the Borrower is the surviving or
resulting entity;

(b) the merger, consolidation, amalgamation or liquidation of any Wholly-Owned
Subsidiary into or with a Wholly-Owned Subsidiary or the merger, consolidation,
amalgamation or liquidation of any Person into a Wholly-Owned Subsidiary or
pursuant to which such Person will become a Wholly-Owned Subsidiary in a
transaction in which the resulting or surviving entity is a Wholly-Owned
Subsidiary (it being understood that if any Person involved is a Loan Party, the
surviving entity shall be a Loan Party);

(c) the conveyance, sale, lease, assignment, transfer or disposal of all, or
substantially all, of the property, business or assets of a Loan Party to
another Loan Party;

(d) sales or other Dispositions permitted under Section 8.6 (other than
Section 8.6(h)); and

(e) any inactive Subsidiary may be liquidated.

8.5 Restricted Payments. Declare or pay any dividend (other than distributions
payable solely in common Capital Stock of the MLP) on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of, any shares
of any class of Capital Stock of any Loan Party or any warrants or options to
purchase any such Stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or Property or in obligations of any Loan Party (such declarations, payments,
setting apart, purchases, redemptions, defeasances, retirements, acquisitions
and distributions, being herein called “Restricted Payments”); provided that:

(a) the MLP at any time may make Restricted Payments payable solely in common
Capital Stock of the MLP;

(b) any Loan Party that is a Subsidiary of the MLP may make Restricted Payments
to the MLP or any other Loan Party that owns Capital Stock of such Loan Party;

 

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(c) the MLP may make Restricted Payments up to the amount of Net Cash Proceeds
received by the MLP as a result of the underwriters’ exercise of the “green
shoe” option after the closing of, and with respect to, the IPO within five
(5) Business Days after receipt by the MLP of such Net Cash Proceeds;

(d) the MLP may (i) redeem, repurchase or otherwise acquire or retire for value
its Capital Stock or (ii) pay, settle, exercise, redeem, repurchase, or exchange
any other award constituting a Restricted Payment, in the case of clauses
(i) and (ii), that is held or received by current or former officers, directors
or employees (or their estates or beneficiaries under their estates or their
immediate family members), of the General Partner and the MLP or any of its
Subsidiaries pursuant to any equity subscription agreement, equity plan, equity
option agreement, unitholders’ agreement, incentive plan or similar agreement
under which such Capital Stock was issued or such award made; provided that the
aggregate cash consideration paid therefor in any calendar year after the
Closing Date does not exceed an aggregate amount of $2,500,000 (with unused
amounts in any calendar year being permitted to be carried over for the two
succeeding calendar years);

(e) the following shall be permitted: (i) any repurchase of Capital Stock deemed
to occur upon the exercise of units, options or other rights to the extent such
Capital Stock represents a portion of the exercise price of those units, options
or other rights; (ii) any repurchase or other acquisition of Capital Stock made
in lieu of withholding taxes in connection with any exercise or exchange of
equity options, warrants, incentives or other rights to acquire Capital Stock;
and (iii) any payment of cash made in lieu of the issuance of fractional units
upon the exercise of units, options, or other rights or the conversion or
exchange of Capital Stock of any such Person; provided that the aggregate cash
consideration paid pursuant to this clause (e) in any calendar year after the
Closing Date does not exceed an aggregate amount of $2,500,000; and

(f) the MLP may make Restricted Payments (including quarterly distributions
contemplated under the MLP Partnership Agreement) if at the time of such
Restricted Payment and after giving effect thereto, no Event of Default has
occurred and is continuing and the Loan Parties are in compliance with the
covenants set forth in Section 8.1 calculated on a Pro Forma Basis after giving
effect to such Restricted Payment.

8.6 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including Accounts
Receivable and leasehold interests), whether now owned or hereafter acquired,
or, in the case of any Subsidiary, issue or sell or permit the issuance or sale
of any shares of such Subsidiary’s Capital Stock to any Person other than any
Loan Party or any Wholly-Owned Subsidiary, except:

(a) the sale or other disposition of obsolete or worn out property in the
ordinary course of business;

(b) the sale or other disposition of any property in the ordinary course of
business;

(c) the sale of Eligible Commodities and Eligible RINs in the ordinary course of
business;

(d) sales or other dispositions of Investments permitted under Section 8.8 in
the ordinary course of business;

(e) leases or subleases of real property not material to the business of any
Loan Party entered into in the ordinary course of business;

 

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(f) the sale or discount without recourse of accounts receivable arising in the
ordinary course of business in connection with the compromise or collection
thereof;

(g) any Disposition of Acquisition Assets so long as at the time of and after
giving effect to such Disposition, Total Acquisition Facility Acquisition
Extensions of Credit (after giving effect to any repayment of the Acquisition
Facility occurring in connection with such Disposition) do not exceed the
Eligible Acquisition Asset Value, and no Default or Event of Default shall have
occurred and be continuing;

(h) sales or other Dispositions permitted under Section 8.4 (other than
Section 8.4(d));

(i) any Disposition by a Loan Party to another Loan Party;

(j) any Disposition occurring on the Closing Date pursuant to any agreement
listed on Schedule 8.10;

(k) any Restricted Payment permitted by Section 8.5;

(l) any of the following: (i) the termination or unwinding of any Financial
Hedging Agreement or Commodity OTC Agreement; (ii) the surrender, modification,
release or waiver of contract rights; or (iii) the settlement, release,
modification, waiver or surrender of contract, tort or other claims of any kind;
and

(m) any payment to an Axel Johnson Affiliate in amounts equal to the collections
received by the Borrower or any Subsidiary on any Accounts Receivable included
in the IPO Distributed Assets.

8.7 Limitation on Capital Expenditures. Make or commit to make (by way of the
acquisition of securities of a Person or otherwise): (i) Capital Expenditures
made with respect to the maintenance or improvement of assets or property then
owned by any Loan Party in excess of $25,000,000 in the aggregate in any Fiscal
Year; or (ii) Capital Expenditures made with respect to any acquisition of any
additional assets or property in a single transaction in excess of $55,000,000,
provided that the aggregate amount of such Capital Expenditures for all such
acquisitions of additional assets or property in any Fiscal Year shall not
exceed $100,000,000.

8.8 Limitation on Investments, Loans and Advances. Make any Investment in any
Person, except:

(a) extensions of trade credit in the ordinary course of business (including,
for the avoidance of doubt, ordinary course extensions of credit under Commodity
Contracts and Financial Hedging Agreements made in accordance with the Risk
Management Policy);

(b) Investments in Cash Equivalents;

(c) Investments by any Loan Party in any other Loan Party;

(d) Investments consisting of cash and Cash Equivalents posted as collateral to
satisfy margin requirements with counterparties of Commodity Contracts or
Financial Hedging Agreements of the Borrower or any Loan Party;

 

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(e) Investments (including debt obligations and equity securities) received in
connection with the bankruptcy, insolvency, arrangement or reorganization of
suppliers and customers and in settlement of delinquent obligations of, and
other disputes with, customers and suppliers arising in the ordinary course of
business;

(f) Investments in existence on the Closing Date and listed on Schedule 8.8,
together with any renewals and extensions thereof, so long as the principal
amount of such renewal or extension does not exceed the original principal
amount of such Investment;

(g) payroll, travel and other loans or advances to, or Guarantee Obligations
issued to support the obligations of, current or former officers, directors, and
employees of the General Partner, the MLP or any Subsidiary, in each case in the
ordinary course of business in an aggregate principal amount not to exceed
$5,000,000 at any one time outstanding;

(h) any Investment resulting from pledges and deposits permitted by
Section 8.3(c), (d), (l) and (m);

(i) any Investment using the proceeds of any issuance of common Capital Stock of
the MLP; and

(j) any other Investment if at the time of such Investment and after giving
effect thereto, no Default or Event of Default has occurred and is continuing
and the Loan Parties are in compliance with the covenants set forth in
Section 8.1 calculated on a Pro Forma Basis.

8.9 Limitation on Payments or Modifications of Junior Debt Instruments.
(a) Except as provided in clause (b) of this Section 8.9, amend, modify or
change, or consent or agree to any material amendment, modification or change to
any of the terms of any Intercompany Subordinated Indebtedness, any Axel Johnson
Subordinated Indebtedness, or any other Indebtedness that is subordinated in
right of payment to the Obligations, is secured on a junior Lien basis on the
Collateral or is unsecured (the foregoing Indebtedness, “Junior Indebtedness”)
(other than any such amendment, modification or change which would extend the
maturity or reduce the amount of any payment of principal thereof or which would
reduce the rate, increase the non-cash portion of the rate or extend the date
for payment of interest thereon or that would relax or waive any covenant
therein or (in the case of any Intercompany Subordinated Indebtedness or Axel
Johnson Subordinated Indebtedness) which would modify any term relating to such
Indebtedness not addressed in Exhibit H-1 or Exhibit H-2, as applicable, that
could not reasonably be expected to be adverse to the interests of the Lenders),
(b) amend the subordination provisions of any Intercompany Subordinated
Indebtedness, Axel Johnson Subordinated Indebtedness or any other Junior
Indebtedness that is subordinated in right of payment to the Obligations without
the consent of the Required Lenders, (c) make any voluntary payment, prepayment,
repurchase or redemption of, or otherwise optionally or voluntarily defease or
segregate funds with respect to, any Junior Indebtedness, provided that such
payments shall be permitted (subject to clause (d) of this Section 8.9) so long
as no Default or Event of Default has occurred and is continuing and the Loan
Parties are in compliance with the covenants set forth in Section 8.1 calculated
on a Pro Forma Basis or (d) make any payment on any Junior Indebtedness in
violation of any subordination provisions applicable thereto.

8.10 Limitation on Transactions with Affiliates. Engage in any transaction with
any Affiliate or Subsidiary unless such transaction is (i) otherwise permitted
under this Agreement and (ii) on terms no less favorable in all material
respects to such Loan Party than it would obtain in a comparable arm’s-length
transaction with a Person which is not an Affiliate or Subsidiary; provided,
however, that this Section 8.10 shall not apply to:

 

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(a) any payment or other transaction pursuant to any agreement in effect on the
Closing Date and listed on Schedule 8.10 (or any renewal thereof that is not
materially adverse to the Lenders);

(b) an Eligible Kildair Transaction;

(c) any payment or transaction by one Loan Party with one or more other Loan
Parties;

(d) any Restricted Payment that is permitted to be made pursuant to Section 8.5;

(e) any payment to an Axel Johnson Affiliate in amounts equal to the collections
received by the Borrower or any Subsidiary on Accounts Receivable included in
the IPO Distributed Assets;

(f) any issuance of common Capital Stock of the MLP; or

(g) any Axel Johnson Subordinated Indebtedness and any payment with respect
thereto permitted hereunder.

8.11 Accounting Changes. Make any significant change in its accounting treatment
or reporting practices, except as required by GAAP, or change its Fiscal Year
without the consent of the Required Lenders (such consent not to be unreasonably
withheld, conditioned or delayed). At the end of any calendar year during which
any such change has occurred, the affected Loan Party shall prepare and deliver
to the Administrative Agent (for distribution to the Lenders through posting on
Intralinks or other web site in use to distribute information to the Lenders) an
explanatory statement, in form and substance reasonably satisfactory to the
Administrative Agent, reconciling the previous treatment or practice with the
new treatment or practice.

8.12 Limitation on Negative Pledge Clauses. Enter into, or permit to exist, with
any Person any agreement which effectively prohibits or limits the ability of a
Loan Party to create, incur, assume or suffer to exist any Lien upon or
otherwise transfer any interest in any of its property, assets or revenues as
Collateral, whether now owned or hereafter acquired, other than:

(a) this Agreement;

(b) the Loan Documents;

(c) agreements evidencing Indebtedness permitted to be incurred under
Section 8.2(c) and (g), any industrial revenue bonds, purchase money security
interests or Financing Leases permitted by this Agreement, and agreements
relating to the Maine Dock Liability Obligations and the Office Building
Obligations (in which cases, any prohibition or limitation shall only be
effective against the assets financed thereby);

(d) leases, contracts and agreements containing restrictions on assignment
entered into in the ordinary course of business;

(e) licensing agreements or management agreements with customary provisions
restricting assignment, entered into in the ordinary course of business;

(f) joint venture agreements containing customary and standard provisions
regarding ownership and distribution of the assets or equity interests of such
joint venture;

 

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(g) agreements that neither restrict the Agents’ or any Secured Party’s ability
to obtain first priority liens on Collateral included in the Borrowing Base or
in the calculation of Eligible Acquisition Asset Value nor restrict in any
material respect the Agents’ or any Secured Party’s ability to exercise the
remedies available to them under applicable Law and the Security Documents,
subject to Liens permitted hereunder; provided that in no event shall such
agreements restrict the payment of the Loans and other Obligations;

(h) agreements entered into by a Loan Party with a third party customer or
supplier of such Loan Party in the ordinary course of business with respect to a
transaction that places restrictions on a portion of the cash of such Loan Party
in an amount reasonably related to the amount of such transaction on terms
consistent with the past practice of such Loan Party;

(i) Materials Handling Contracts and other agreements entered into in the
ordinary course of business with commodity storage, transportation and/or
processing facilities that prohibit Liens on the commodities that are the
subject thereof and which shall not be included in the Borrowing Base;

(j) Commodity Contracts and Financial Hedging Agreements not included in the
Borrowing Base and containing restrictions on the assignment thereof; provided
that, for the avoidance of doubt, to the extent any such prohibition,
restriction or limitation is ineffective as a matter of law, the account
receivable deriving from or the proceeds of such contract or agreement may be
included in the Borrowing Base;

(k) agreements purporting to prohibit the existence of any Liens upon, or
transferring of any interest in, any Excluded Asset (as such term is defined in
the Security Agreement); and

(l) agreements with respect to assets not included in the Borrowing Base, the
aggregate value of such assets at any one time outstanding not to exceed
$5,000,000.

8.13 Limitation on Lines of Business. Enter into any business except for those
lines of business in which the Loan Parties are engaged on the date of this
Agreement, and any activities reasonably related, complementary or incidental
thereto.

8.14 Governing Documents. Amend its Governing Documents in any manner that could
reasonably be expected to be materially adverse to the interests of the Lenders
and the Agents without the prior written consent of the Required Lenders, which
shall not be unreasonably withheld, conditioned or delayed.

8.15 Limitations on Clauses Restricting Subsidiary Distributions. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower or (b) make loans
or advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under this Agreement, (ii) any
restrictions existing under the other Loan Documents and (iii) any restrictions
with respect to a Subsidiary imposed pursuant to an agreement that has been
entered into in connection with the Disposition of all or substantially all of
the Capital Stock or assets of such Subsidiary.

 

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SECTION 9 EVENTS OF DEFAULT

9.1 Events of Default. If any of the following events shall occur and be
continuing:

(a) (i) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms thereof or
hereof, or (ii) any Loan Party shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or under any of
the other Loan Documents, when such interest or other amount becomes due in
accordance with the terms thereof or hereof, and in the case of this clause
(ii), the same shall remain unremedied for a period of three (3) Business Days;
or

(b) Any representation or warranty made or deemed made by any Loan Party herein
or in any other Loan Document or which is identified as such and contained in
any certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been incorrect in any material respect on or as of the date
made or deemed made; or

(c) Any Loan Party shall (i) default in the observance or performance of any
covenant contained in any of Sections 7.1(a) (annual financial statements),
(c) (monthly financial statements), (f) (annual Reconciliation Summary) and
(g) (monthly Reconciliation Summary), 7.2 (other than Sections 7.2(e), (g) and
(i)), 7.4, 7.6, 7.7(a), (b), (e)-(h) or 8 of the Agreement or Sections 5(a),
(c), (d), (g), (h), (i), (j), (n)(i), (n)(iii), (p) or (t) of the Security
Agreement or (ii) default in the observance or performance, in any material
respect, of any covenant contained in Section 5(q) of the Security Agreement; or

(d) Any Loan Party shall default in the observance or performance of any
covenant contained in Section 7.10 for a period of four (4) Business Days; or

(e) Any Loan Party shall default in the observance or performance of any other
obligation applicable to it contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a), (b), (c) and (d) of this
Section 9), and such default shall continue unremedied for a period of thirty
(30) days after the earlier of (x) such Loan Party having knowledge of such
default or (y) notice thereof from the Administrative Agent to the Borrower; or

(f) Any Loan Party shall (A) default in any payment of principal of or interest
on any Indebtedness (other than the Loans or Reimbursement Obligations) or in
the payment of any Guarantee Obligation, beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness or
Guarantee Obligation was created, if the aggregate amount of the Indebtedness
and/or Guarantee Obligations of any Loan Party in respect of which such default
or defaults shall have occurred is at least $10,000,000; (B) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or such Guarantee Obligation (in each case involving the
amounts specified in clause (A) above) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or permit the holder or holders of such Indebtedness or
beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or agent
on behalf of such holder or holders or beneficiary or beneficiaries) to cause,
with the giving of notice if required, such Indebtedness to become due prior to
its stated maturity (other than with respect to Indebtedness that is, by its
terms, callable upon demand) or such Guarantee Obligation to become payable; or
(C) default in the observance or performance of any obligation (payment or
otherwise) under a Financial Hedging Agreement or a Commodity OTC Contract that
would allow the counterparty thereof to exercise a right to terminate its
position under such Financial Hedging Agreement or Commodity OTC Contract, if
the aggregate net exposure with regard to all such positions is in excess of
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(g) (i) Any Loan Party shall commence any case, proceeding or other action
(A) under any existing or future Law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, arrangement, liquidation,
winding-up or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or
(B) seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or any
Loan Party shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against any Loan Party any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or appointment or
(B) remains undismissed, undischarged or unbonded for a period of sixty
(60) days; or (iii) there shall be commenced against any Loan Party any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief with
regard to all or any substantial part of its assets, which shall not have been
vacated, discharged, or stayed or bonded pending appeal within forty-five
(45) days from the entry thereof; or (iv) any Loan Party shall take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any
Loan Party shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due; or

(h) (i) Any Person that is a fiduciary, party-in-interest or disqualified person
with respect to a Plan shall engage in any non-exempt “prohibited transaction”
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving such
Plan; (ii) any failure to satisfy the minimum funding requirements of
Section 412 or 430 of the Code, whether or not waived, shall occur with respect
to any Plan, a Plan shall be determined to be “at risk” status within the
meaning of Section 430 of the Code or any Lien in favor of the PBGC or a Plan
shall arise on the assets of any Loan Party or any Commonly Controlled Entity;
(iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the reasonable
opinion of the Required Lenders, likely to result in the termination of such
Plan for purposes of Title IV of ERISA; (iv) any Single Employer Plan shall
terminate pursuant to Section 4041(c) or 4042 of ERISA; (v) the Loan Parties or
any Commonly Controlled Entity incur any liability in connection with a complete
or partial withdrawal from, or the Insolvency, Reorganization or termination of,
a Multiemployer Plan or a determination that any Multiemployer Plan is or is
expected to be endangered, seriously endangered or in critical status, in each
case within the meaning of Sections 431 or 432 of the Code or Sections 304 or
305 of ERISA, or any Loan Party or any Commonly Controlled Entity fails to make
any required contributions to a Multiemployer Plan pursuant to Sections 431 or
432 of the Code; (vi) the failure of any Plan to comply with any material
provisions of ERISA and/or the Code (and applicable regulations under either) or
with the material terms of such Plan; (vii) the failure by any Loan Party or any
of its Commonly Controlled Entities to pay when due (after expiration of any
applicable grace period) any installment payment with respect to Withdrawal
Liability under Section 4201 of ERISA; (viii) the withdrawal by any Loan Party
or any of their respective Commonly Controlled Entities from any Single Employer
Plan with two or more contributing sponsors or the termination of any such
Single Employer Plan resulting in liability to any Loan Party or any of their
respective Affiliates pursuant to Section 4063 or 4064 of ERISA; (ix) the
imposition of liability on any Loan Party or any of their respective Commonly
Controlled Entities pursuant to Section 4062(e) or 4069 of ERISA or by reason of
the application of Section 4212(c) of ERISA; (x) the occurrence of an act or
omission which could give rise to the imposition on any Loan Party or any of
their respective Commonly Controlled Entities of fines, penalties, taxes or
related charges under Chapter 43 of the Code or under Section 409,
Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Plan;
(xi) the assertion of a material claim (other than routine claims for benefits)
against any Plan other than a Multiemployer Plan or the assets thereof, or
against any Loan Party or any of their respective Commonly Controlled Entities
in connection with any Plan; (xii) receipt from the IRS of notice of the failure
of any Single Employer Plan (or any other Plan

 

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intended to be qualified under Section 401(a) of the Code) to qualify under
Section 401(a) of the Code, or the failure of any trust forming part of any
Single Employer Plan (or any other Plan) to qualify for exemption from taxation
under Section 501(a) of the Code; (xiii) the imposition of a Lien pursuant to
Section 430(k) of the Code or pursuant to ERISA with respect to any Single
Employer Plan; or (xiv) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through (xiv) above, such
event or condition, together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse Effect; or

(i) One or more judgments or decrees shall be entered against any Loan Party
involving in the aggregate a liability (to the extent not paid or covered by
insurance) of $10,000,000 or more, and all such judgments or decrees shall not
have been vacated, discharged, stayed or bonded pending appeal within sixty
(60) days from the entry thereof; or

(j) (i) Any of the Security Documents shall cease, for any reason, to be in full
force and effect, or any Loan Party shall so assert or (ii) the Lien created by
any of the Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby (other than, in each case,
by reason of the express release thereof pursuant to Section 11.5); or

(k) The Guarantee shall cease, for any reason (other than by reason of the
express release thereof pursuant to Section 11.5), to be in full force and
effect or any Loan Party shall so assert; or

(l) [Reserved];

(m) Any agreement or provision pertaining to the subordination of any Axel
Johnson Subordinated Indebtedness or Intercompany Subordinated Indebtedness
under a subordination agreement shall cease, for any reason, to be in full force
and effect, while such Indebtedness is outstanding; or

(n) Any Change of Control shall occur;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (g) of this Section 9 with respect to the
Borrower, the Commitments shall immediately and automatically terminate and the
Loans and Reimbursement Obligations (except as provided in the following
paragraph) hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower, declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans and, except as provided in the following
paragraph, Reimbursement Obligations hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement (including all amounts of L/C
Obligations) to be due and payable forthwith, whereupon the same shall
immediately become due and payable.

With respect to all outstanding Letters of Credit with respect to which demand
for payment shall not have occurred at the time of an acceleration pursuant to
the preceding paragraph, the Borrower shall at such time Cash Collateralize the
aggregate then-undrawn and unexpired amount of such Letters of Credit. The
Borrower hereby grants to the Administrative Agent, for the benefit of the
Issuing Lenders, the Lenders, the L/C Participants and the other Secured
Parties, a security interest in such Cash Collateral to secure all obligations
of the Borrower under this Agreement and the other Loan Documents and all other
Obligations. Cash Collateralized amounts shall be applied by the Administrative
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the payment of drafts drawn under such Letters of Credit, and fees owing with
respect to such Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay other obligations of the Borrower hereunder and under the Notes
and any other Obligations. After all such Letters of Credit shall have expired
or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Borrower hereunder and under the
Notes and all other Obligations shall have been paid in full, the balance, if
any, in such cash collateral account shall be returned to the Borrower. The
Borrower shall execute and deliver to the Administrative Agent, for the account
of the Issuing Lenders, the Lenders, the L/C Participants and the other Secured
Parties, such further documents and instruments as the Administrative Agent may
reasonably request to evidence the creation and perfection of the security
interest in such Cash Collateral account.

SECTION 10 THE AGENTS

10.1 Appointment. (a) Each Lender hereby irrevocably designates and appoints the
Agents as the agents of such Lender under this Agreement and the other Loan
Documents, and each such Lender irrevocably authorizes each Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent.

(b) Each Qualified Counterparty and each Qualified Cash Management Bank,
pursuant to the terms of the applicable Hedging Agreement Qualification
Notification and/or by accepting the grant by the Loan Parties of the security
interest in the Collateral pursuant to the Security Documents, hereby
irrevocably designates and appoints the Agents as the agents of such Qualified
Counterparty or Qualified Cash Management Bank under this Agreement and the
other Loan Documents, and each such Qualified Counterparty and Qualified Cash
Management Bank irrevocably authorizes each Agent, in such capacity, to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to such Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Qualified
Counterparty or Qualified Cash Management Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against any
Agent.

10.2 Delegation of Duties. Each Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. No Agent shall be responsible for the negligence or misconduct of
any agents or attorneys in-fact selected by it with reasonable care.

10.3 Exculpatory Provisions. No Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact, Subsidiaries or Affiliates (each, an
“Agent-Related Person”) shall be (i) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this
Agreement or any other Loan Document (except for its or such Person’s own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
any Loan Party or any officer thereof contained in this Agreement

 

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or any other Loan Document or in any certificate, report, statement or other
document referred to or provided for in, or received by such Agent under or in
connection with, this Agreement or any other Loan Document (including in any
audit prepared by the Administrative Agent’s internal auditor pursuant to
Section 6.1(l)) or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party to perform its obligations hereunder or
thereunder. The Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.

10.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including counsel to
the Borrower or any other Loan Party), independent accountants and other experts
selected by such Agent with reasonable care. The Agents may deem and treat the
payee of any Note as the owner thereof for all purposes unless a notice of
assignment, negotiation or transfer thereof shall have been filed with such
Agent. Each Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or such greater
percentage of Lenders as shall be required therefor under Section 11.1) as it
deems appropriate or as otherwise required by Section 11.1 or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. Each Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or such greater percentage of
Lenders as shall be required therefor under Section 11.1) and such request and
any action taken or failure to act pursuant thereto shall be binding upon all of
the Lenders and all future holders of the Loans and all other Obligations.

10.5 Notice of Default. No Agent shall be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless such Agent
has received notice from a Lender, or the Borrower or any other Loan Party
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”. In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Lenders. The Agents shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided that unless and until an Agent shall have received such
directions, such Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.

10.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that none of the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates has
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of the Borrower or any
Loan Party or any audit performed by the Administrative Agent’s internal auditor
pursuant to Section 6.1(l), shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and the other
Loan Parties and made its own decision to extend credit to the Borrower
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon any Agent or any other Lender, and
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shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower and other Loan Parties. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent or the Co-Collateral Agents hereunder or
under any of the other Loan Documents, no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower or any other Loan
Party which may come into the possession of such Agent or any of their
respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates. Without limiting the generality of the foregoing, no
Agent shall have any duty to monitor the Collateral used to calculate the
Borrowing Base or the reporting requirements or the contents of reports
delivered by the Borrower. Each Lender assumes the responsibility of keeping
itself informed at all times.

10.7 Indemnification. The Lenders agree to indemnify each Agent and each other
Agent-Related Person on an after-Tax basis in its capacity as such (to the
extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their respective Commitment Percentages
in effect on the date on which indemnification is sought, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including at any time following the payment of the Loans and
Reimbursement Obligations and the cash collateralization of the L/C Obligations)
be imposed on, incurred by or asserted against such Agent or such Agent-Related
Person in any way relating to or arising out of, the Commitments, this
Agreement, any of the other Loan Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by such Agent under or in connection with any of
the foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from such
Agent’s or such Agent-Related Person’s gross negligence or willful misconduct.
The agreements in this Section 10.7 shall survive the payment of the Loans,
Reimbursement Obligations and all amounts payable hereunder and the cash
collateralization of the L/C Obligations.

10.8 Agents in Their Individual Capacity. Each Agent and its Subsidiaries and
Affiliates may make loans and other extensions of credit to, accept deposits
from and generally engage in any kind of business with the Borrower and the
other Loan Parties and their Subsidiaries and Affiliates as though such Agent
were not an Agent hereunder and under the other Loan Documents. With respect to
the Loans and other extensions of credit made by it hereunder, each Agent shall
have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not an
Agent, and the terms “Lender” and “Lenders” shall include each Agent in its
individual capacity.

10.9 Successor Agents. (a) The Administrative Agent may resign as the
Administrative Agent upon thirty (30) days’ notice to the Co-Collateral Agents,
the Borrower and the Lenders. If the Administrative Agent shall resign as the
Administrative Agent under this Agreement and the other Loan Documents, then the
Required Lenders shall appoint from among the Lenders (unless no Lender is
willing to act as the Administrative Agent, in which case the Administrative
Agent may be any Person approved by the Required Lenders) a successor
Administrative Agent for the Lenders, which successor Administrative Agent shall
be approved by the Borrower (which approval shall not be unreasonably withheld
and shall not be required during the continuance of an Event of Default),
whereupon such successor Administrative Agent shall succeed to the rights,
powers and duties of the Administrative Agent and the term “Administrative
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Agent effective upon such appointment and approval, and the former
Administrative Agent’s rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans or other Obligations. After any retiring Administrative
Agent’s resignation as Administrative Agent, the provisions of this Section 10
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents. If no successor Administrative Agent has accepted appointment as
Administrative Agent by the date which is thirty (30) days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative
Agent’s resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of such Administrative Agent hereunder
and under the other Loan Documents until such time, if any, as the Required
Lenders appoint a successor agent as provided for above.

(b) Either or both Co-Collateral Agents may resign as a Co-Collateral Agent upon
thirty (30) days’ notice to the Administrative Agent, the other Co-Collateral
Agent (if any), the Borrower and the Lenders. Upon any such resignation, the
remaining Co-Collateral Agent (the “Sole Remaining Co-Collateral Agent”) shall
perform all of the functions of the Co-Collateral Agents and the retiring
Co-Collateral Agent shall be discharged from its duties and obligations
hereunder. If both Co-Collateral Agents shall resign substantially
simultaneously or the Sole Remaining Co-Collateral Agent shall resign, then the
Required Lenders shall appoint from among the Lenders (unless no Lender is
willing to act as a Co-Collateral Agent, in which case the Co-Collateral Agent
may be any Person approved by the Required Lenders) a successor Co-Collateral
Agent for the Lenders, who shall be the sole successor Co-Collateral Agent
hereunder (the “Sole Successor Co-Collateral Agent”) and which Sole Successor
Co-Collateral Agent shall be approved by the Borrower (which approval shall not
be unreasonably withheld and shall not be required during the continuance of an
Event of Default), whereupon such Sole Successor Co-Collateral Agent shall
succeed to the rights, powers and duties of the Co-Collateral Agents and the
term “Co-Collateral Agents” shall mean such Sole Successor Co-Collateral Agent
effective upon such appointment and approval, and the former Co-Collateral
Agents’ rights, powers and duties as Co-Collateral Agents shall be terminated,
without any other or further act or deed on the part of such former
Co-Collateral Agents or any of the parties to this Agreement or any holders of
the Loans or other Obligations. After any retiring Co-Collateral Agent’s
resignation as Co-Collateral Agent, the provisions of this Section 10 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Co-Collateral Agent under this Agreement and the other Loan Documents. If
no successor Co-Collateral Agent has accepted appointment as Co-Collateral Agent
by the date which is thirty (30) days following a retiring Sole Remaining
Co-Collateral Agent’s notice of resignation or the substantially simultaneous
retiring of both Co-Collateral Agents, the resignation of the retiring
Co-Collateral Agent(s) shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of such Co-Collateral Agent(s) hereunder
and under the other Loan Documents until such time, if any, as the Required
Lenders appoint a successor agent as provided for above.

10.10 Collateral Matters. (a) The Administrative Agent is authorized on behalf
of all of the Lenders, without the necessity of any notice to or further consent
from the Lenders, from time to time to take any action with respect to any
Collateral or the Loan Documents which may be necessary to perfect and maintain
perfected the security interest in and Liens upon the Collateral granted
pursuant to the Loan Documents.

(b) The Lenders, and each Qualified Counterparty and each Qualified Cash
Management Bank (pursuant to the terms of the applicable Hedging Agreement
Qualification Notification and/or by accepting the grant by the Loan Parties of
the security interest in the Collateral pursuant to the Security Documents),
irrevocably authorize the Administrative Agent, at its option and in its
discretion, to release any Lien granted to or held by the Administrative Agent
upon any Collateral (i) upon termination of the Commitments, and payment in full
of all Loans and all other Obligations known to the

 

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Administrative Agent and payable under this Agreement or any other Loan Document
(except indemnification obligations for which no claim has been made and of
which no Responsible Person of any Loan Party has knowledge or any obligations
owed under a Commodity OTC Agreement with a Qualified Counterparty, any
Financial Hedging Agreement with a Qualified Counterparty or any Cash Management
Bank Agreement with a Qualified Cash Management Bank); (ii) constituting
property sold or to be sold or disposed of as part of or in connection with any
sale, transfer or other disposition permitted hereunder; (iii) constituting
property in which the Loan Parties owned no interest at the time the Lien was
granted or at any time thereafter; (iv) constituting property leased to any Loan
Party under a lease which has expired or been terminated in a transaction
permitted under this Agreement or is about to expire and which has not been, and
is not intended by a Loan Party to be, renewed or extended; (v) consisting of an
instrument evidencing Indebtedness or other debt instrument, if the indebtedness
evidenced thereby has been paid in full; or (vi) if approved, authorized or
ratified in writing by the portion of the Lenders required by Section 11.1. Upon
request by the Administrative Agent at any time, the Lenders will confirm in
writing the Administrative Agent’s authority to release particular types or
items of Collateral pursuant to this Section 10.10; provided that the absence of
any such confirmation for whatever reason shall not affect the Administrative
Agent’s rights under this Section 10.10.

(c) The Administrative Agent may execute any of its duties under this Agreement
and the other Loan Documents by or through agents or attorneys in fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys in fact selected by it with reasonable
care.

10.11 The Co-Collateral Agents; Co-Documentation Agents and the Co-Syndication
Agents. (a) Notwithstanding anything to the contrary set forth herein, all
determinations of the Co-Collateral Agents under the Loan Documents shall be
made jointly by the Co-Collateral Agents, provided that, in the event that the
Co-Collateral Agents cannot agree on any matter to be determined by the
Co-Collateral Agents, the determination shall be made by the individual
Co-Collateral Agent asserting, in its discretion exercised in good faith, the
more conservative credit judgment or declining to permit the requested action
for which consent is being sought by the applicable Loan Party. This provision
shall be binding upon any successor to a Co-Collateral Agent.

(b) None of any Co-Documentation Agent or any Co-Syndication Agent, in their
respective capacities as such, shall have any duties or responsibilities, nor
shall any such Person in such capacity incur any liability under this Agreement
or the other Loan Documents.

SECTION 11 MISCELLANEOUS

11.1 Amendments and Waivers. Neither this Agreement nor any other Loan Document,
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of this Section 11.1. The Required Lenders
may, or, with the written consent of the Required Lenders, the Administrative
Agent may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents with the Loan Parties party
thereto for the purpose of adding any provisions to this Agreement or the other
Loan Documents or changing in any manner the rights and obligations of the
Lenders or of the Loan Parties party thereto hereunder or thereunder or
(b) waive or consent to any departure from, prospectively, concurrently or
retrospectively, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver or
consent and no such amendment, supplement or modification shall:

 

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(i) reduce the amount or extend the scheduled date of maturity of any Loan or
payment Obligation hereunder or any installment thereof (other than any such
Obligation to pay any interest or letter of credit commission at the rate set
forth in Section 4.2(c)), or extend the due date for any Reimbursement
Obligation, or reduce the stated rate of any interest or fee payable hereunder
(other than the rates of interest or fees set forth in Section 4.2(c)) or extend
the scheduled date of any payment thereof or increase the amount or extend the
expiration date of any Lender’s Commitment, in each case without the additional
written consent of each Lender affected thereby, or

(ii) increase any percentage in the definition of “Borrowing Base” or otherwise
amend or modify the definition of “Borrowing Base” or any direct or indirect
component definition thereof that has the effect of increasing the Borrowing
Base Availability, in each case without the written consent of the Supermajority
Lenders; or

(iii) amend or modify the definition of “Eligible Commodities” or any component
definition thereof that has the effect of adding commodities thereto without the
written consent of the Supermajority Lenders; or

(iv) consent to any changes to the Risk Management Policy which are materially
adverse to the Lenders without the written consent of the Supermajority Lenders;

(v) amend, modify or waive any provision of this Section 11.1 or change the
percentage specified in the definition of Required Lenders or Supermajority
Lenders, or consent to the assignment or transfer by any Loan Party of any of
their rights and obligations under this Agreement and the other Loan Documents,
in each case without the written consent of all of the Lenders, or

(vi) consent to the release by the Administrative Agent of all or substantially
all of the Collateral or release any guarantor from its Guarantee Obligations
under the Guarantee or provide for the Collateral or the Guarantee to no longer
secure or guarantee all Obligations ratably, without the written consent of all
of the Lenders, except to the extent such release is permitted or required under
this Agreement, or

(vii) amend, modify or waive any provision of Section 4.7(d) or (e),
Section 4.9(a) or (b) or Section 11.8, or Section 8(b) of the Security
Agreement, without the written consent of all the Lenders affected thereby, or

(viii) amend, modify or waive any provision of Section 10, or any other
provision affecting the rights, duties or obligations of any Agent, without the
written consent of any Agent directly affected thereby, or

(ix) amend, modify or waive any provision of Section 3, or any provision of
Section 11.7(c) affecting the right of the Issuing Lenders to consent to certain
assignments thereunder, without the written consent of the Issuing Lenders or
any other provision affecting the rights, duties or obligations of any Issuing
Lenders, without the additional written consent of any Issuing Lender directly
affected thereby.

Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans and other Obligations.
In the case of any waiver, the Loan Parties, the Lenders and the Agents shall be
restored to their former positions and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing, but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.

 

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Notwithstanding the foregoing, the Administrative Agent, with the consent of the
Borrower, may amend, modify or supplement any Loan Document without the consent
of any Lender or the Required Lenders in order to correct, amend or cure any
ambiguity, inconsistency or defect or correct any typographical error or other
manifest error in any Loan Document.

11.2 Notices.

(a) General. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by facsimile transmission)
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made (a) in the case of delivery by overnight courier or delivery
by hand, when delivered, (b) in the case of delivery by mail, three (3) Business
Days after being deposited in the mails, postage prepaid, or (c) in the case of
delivery by facsimile transmission, when sent and receipt has been
electronically confirmed, addressed as follows in the case of the Borrower, the
Administrative Agent and the Co-Collateral Agents, and as set forth in Schedule
1.0 in the case of the other parties hereto, or to such other address as may be
hereafter notified by the respective parties hereto:

 

  Borrower:   

Sprague Operating Resources LLC

Two International Drive

Suite 200

Portsmouth, New Hampshire 03801

Attention: Paul Scoff, Esq.

Fax: (603) 430-5324

  The Administrative Agent:   

JPMorgan Chase Bank, N.A., as

Administrative Agent

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

  The Co-Collateral Agents:   

If to JPMorgan Chase Bank, N.A., as Co-Collateral Agent:

JPMorgan Chase Bank, N.A., as Co-Collateral Agent

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

 

If to BNP Paribas, as Co-Collateral Agent:

 

BNP Paribas, as Co-Collateral Agent

787 Seventh Avenue, 9th Floor

New York, NY 10019

Attention: Anne-Catherine Mathiot

provided that any notice, request or demand to or upon any Agent, the Issuing
Lenders or the Lenders pursuant to Section 2.5, 2.6, 3.3, 3.6, 3.7, 4.1, 4.3,
4.6, 4.7, or 4.9 shall not be effective until received.

 

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(b) Limited Use of Electronic Mail. Electronic mail and internet and intranet
websites may be used only to distribute routine communications, such as
financial statements and other information, and to distribute Loan Documents for
execution by the parties thereto, and may not be used to deliver any notice
hereunder.

(c) The Platform. THE BORROWER HEREBY ACKNOWLEDGES THAT THE ADMINISTRATIVE AGENT
WILL MAKE AVAILABLE TO THE LENDERS MATERIALS AND/OR INFORMATION PROVIDED BY OR
ON BEHALF OF THE BORROWER HEREUNDER (COLLECTIVELY, “BORROWER MATERIALS”) BY
POSTING THE BORROWER MATERIALS ON INTRALINKS OR ANOTHER SIMILAR ELECTRONIC
SYSTEM (THE “PLATFORM”). THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”
THE AGENT-RELATED PERSONS DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY
AGENT-RELATED PERSON IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.
In no event shall any Agent or any other Agent-Related Person have any liability
to any Loan Party, any Lender or any other Person for losses, claims, damages,
liabilities or expenses of any kind (whether in tort, contract or otherwise)
arising out of the Borrower’s or any Agent’s transmission of Borrower Materials
through the internet, except to the extent that such losses, claims, damages,
liabilities or expenses are determined by a court of competent jurisdiction by a
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Agent-Related Person; provided, however, that in no
event shall any Agent-Related Person have any liability to any Loan Party, any
Lender or any other Person for indirect, special, incidental, consequential or
punitive damages (as opposed to direct or actual damages). Certain of the
Lenders (each, a “Public Lender”) may have personnel who do not wish to receive
material non-public information with respect to the Borrower, the Guarantors or
their respective Affiliates, or the respective securities of any of the
foregoing, and who may be engaged in investment and other market-related
activities with respect to such Persons’ securities. Each Public Lender agrees
to cause at least one individual at or on behalf of such Public Lender to at all
times have selected the “Private Side Information” or similar designation on the
content declaration screen of the Platform in order to enable such Public Lender
or its delegate, in accordance with such Public Lender’s compliance procedures
and applicable Law, including United States Federal and state securities Laws,
to make reference to Borrower Materials that are not made available through the
“Public Side Information” portion of the Platform and that may contain material
non-public information with respect to any Loan Party or its securities for
purposes of United States Federal or state securities laws.

(d) Reliance by Agents and Lenders. The Agents and the Lenders shall be entitled
to rely and act upon any notices (including telephonic notices) purportedly and
in good faith believed to be given by or on behalf of the Borrower even if
(i) such notices were not made in a manner specified herein, were incomplete or
were not preceded or followed by any other form of notice specified herein, or
(ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrower shall indemnify each Agent and each Lender
from all losses, costs, expenses and liabilities resulting from the reliance by
such Person on each notice purportedly and believed in good faith to be given by
or on behalf of the Borrower. All telephonic notices to and other communications
with any Agent may be recorded by such Agent, and each of the parties hereto
hereby consents to such recording.

11.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of any Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
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of any right, remedy, power or privilege hereunder or under any other Loan
Document preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein and in the other Loan Documents provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by Law.

11.4 Survival of Representations and Warranties. All representations and
warranties made herein, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.

11.5 Release of Collateral and Guarantee Obligations. (a) Upon any sale or other
transfer of any Collateral that is permitted under the Loan Documents by any
Loan Party or a sale of all of the assets of, or all of the Capital Stock of, a
Subsidiary in a transaction that is permitted under the Loan Documents (other
than a sale, transfer or other disposition to another Loan Party), or upon the
effectiveness of any written consent to the release of the security interest
granted hereby in any Collateral pursuant to Section 10.10 hereof, the security
interest in such Collateral shall automatically terminate and Administrative
Agent shall execute and a deliver a termination or satisfaction of any Mortgage
and Security Agreement affecting such Collateral, in proper form for recording.

(b) Upon any sale or other transfer of all of the Capital Stock of any Loan
Party that is permitted or consented to under the Loan Documents (other than a
sale or transfer to another Loan Party), the Guarantee of such Loan Party shall
automatically be released and terminated.

(c) Upon termination of the Commitments and payment in full of the Loans and all
other Obligations payable under this Agreement or any other Loan Document
(except indemnification obligations for which no claim has been made and of
which no Responsible Person of any Loan Party has knowledge) and the termination
or expiration of all Letters of Credit, the pledge and security interest granted
pursuant to this Agreement and the other Loan Documents shall automatically
terminate and all rights to the Collateral shall revert to the applicable Loan
Party. Upon any such termination or pursuant to any termination or release as
described in Section 11.5(a), the Administrative Agent will, at the applicable
Loan Party’s expense, execute and deliver to such Loan Party such documents as
such Loan Party shall reasonably request to evidence such termination.

11.6 Payment of Costs and Expenses. The Borrower agrees (a) to pay or reimburse
each Agent and the Lead Arranger for all its reasonable and documented
out-of-pocket costs and expenses incurred in connection with the syndication of
the Facilities and the development, preparation, negotiation, execution,
delivery and administration of, and any amendment, supplement or modification
to, this Agreement and the other Loan Documents and any other documents prepared
in connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including the reasonable and
documented fees and disbursements of one firm of counsel to the Agents and the
Lead Arranger, one regulatory counsel to the Agents and the Lead Arranger and a
single firm of local counsel in each applicable jurisdiction, (b) to pay or
reimburse each Lender, the Swing Line Lender, each Issuing Lender, each Agent
and the Lead Arranger, for all its documented costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
documented fees and disbursements of counsel to each Lender, the Lead Arranger,
the Swing Line Lender and each Issuing Lender and of counsel to the Agents,
(c) to pay or reimburse the Agents and the Lead Arranger for their documented
costs and expenses incurred in connection with inspections performed pursuant to
Section 7.9 and audits performed pursuant to Section 6.1(l), and any other due
diligence performed in connection with this Agreement and the other Loan
Documents, including the reasonable and documented fees and disbursements of
counsel to the Agents (including the fees and expenses of Simpson Thacher &
Bartlett

 

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LLP), (d) to pay, indemnify, and hold each Lender, the Swing Line Lender, the
Issuing Lenders, each Agent and the Lead Arranger harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other similar taxes
(except to the extent the Borrower has otherwise indemnified such Person for
such taxes under Section 4.11(b)), if any, which may be payable or determined to
be payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent (including the
determination of whether or not any such waiver or consent is required) under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (e) on a net after-Tax basis, to pay, indemnify, and hold each
Lender, the Issuing Lenders, the Agents and the Arrangers, and each of their
respective officers, employees, directors, trustees, agents, advisors,
affiliates, partners and controlling persons (each, an “Indemnitee”), harmless
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including the reasonable and documented fees and
expenses of one firm of counsel for all Indemnitees, taken as a whole, and if
necessary, one regulatory counsel and a single firm of local counsel in each
appropriate jurisdiction for all Indemnitees, taken as a whole (and in the case
of an actual or perceived conflict of interest, by another firm of counsel for
the affected Indemnitee)) other than Taxes (as to which Section 4.10 and
Section 4.11 shall govern) with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents, and
any such other documents or the use or proposed use of proceeds of the
Facilities, including any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of the Loan Parties and any of their Subsidiaries, or any of the
Properties, or any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory and regardless of whether any Indemnitee is a party thereto
(all the foregoing in this clause (e), collectively, the “Indemnified
Liabilities”); provided that the Borrower shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities (x) are found by a final, non-appealable judgment of a
court of competent jurisdiction to have resulted from the bad faith, gross
negligence or willful misconduct of such Indemnitee or any Related Person
thereof, (y) are found by a final, non-appealable judgment of a court of
competent jurisdiction to have resulted from a material breach of the
obligations of such Indemnitee or any Related Person thereof or (z) result from
any proceeding that is solely among Indemnitees (other than any proceeding
against any Agent or Arranger or Person fulfilling a similar role in respect of
the Facilities in its capacity or in fulfilling its role as such) and does not
involve an act or omission by the Borrower or any of its Affiliates. The
agreements in this Section 11.6 shall survive repayment of the Loans,
Reimbursement Obligations and all other amounts payable hereunder.

11.7 Successors and Assigns; Participations and Assignments. (a) This Agreement
shall be binding upon and inure to the benefit of the Borrower, the Lenders, the
Agents and their respective successors and assigns, except that the Borrower may
not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender (and any purported such
assignment or transfer by the Borrower without such consent of each Lender shall
be null and void).

(b) Any Lender may, in accordance with applicable Law, at any time sell to one
or more banks, financial institutions or other entities (other than the Borrower
or any of its Subsidiaries or Affiliates) (individually, a “Participant” and,
collectively, the “Participants”) (so long as no Default or Event of Default has
occurred and is continuing, only to a Person other than an Ineligible
Participant) participating interests in any Loan or Reimbursement Obligation
owing to such Lender, any Commitment of such Lender or any other interest of
such Lender hereunder and under the other Loan Documents (a “Participation”). In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender’s obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the

 

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holder of any such Loan, Reimbursement Obligation or other interest for all
purposes under this Agreement and the other Loan Documents, and the Borrower and
the Agents 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 Loan Documents, except with respect to Section 4.10 and 4.11, under
which the Participant has certain rights with respect thereto. In no event shall
any Participant under any such Participation have any right to approve any
amendment to or waiver of any provision of any Loan Document, or any consent to
any departure by any Loan Party therefrom, except to the extent that such
amendment, waiver or consent would reduce the principal of, or the stated rate
of interest on, the Loans, Reimbursement Obligation or any fees payable
hereunder, or postpone the date of the final maturity of the Loans or
Reimbursement Obligations, in each case to the extent subject to such
Participation (and, for the avoidance of doubt, the Borrower may exercise any
rights granted to it in Section 4.17 with respect to the Lender that sold a
Participation to such Participant to the extent that the direction by such
Participant to such Lender to not consent to any such amendment would cause the
applicable Lender to be subject to the provisions of Section 4.17). The Borrower
agrees that if amounts outstanding under this Agreement are due or unpaid during
an Event of Default, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall, to
the maximum extent permitted by applicable Law, be deemed to have the right of
setoff in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement; provided that in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in
Section 11.8(a) as fully as if it were a Lender hereunder. The Borrower also
agrees that each Participant shall be entitled to the benefits of, and be bound
by the obligations imposed on the Lenders in, Sections 4.10, 4.11 and 4.14 with
respect to its Participation in the Commitments and the Loans and other
extensions of credit hereunder outstanding from time to time as if it were a
Lender; provided, that no Participant shall be entitled to receive any greater
payments under Sections 4.10, 4.11 and 4.14, with respect to its participation,
than its participating Lender would have been entitled to receive, except to the
extent such entitlement to receive a greater payment results from change in Law
that occurs after the Participant acquired the applicable participation and the
Participant agrees to be subject to the provisions of Section 4.17, as if it
were an assignee under paragraph (c) of this Section. Each Lender that sells a
participation agrees to use reasonable efforts to cooperate with the Borrower to
effectuate the provisions of Section 4.17 with respect to any Participant. Each
Lender that sells a participation shall, acting solely for this purpose as
non-fiduciary agent of the Borrower, maintain a register on which it enters the
name and address of each Participant and the principal amounts (and stated
interest) of each Participant’s interest in the Loans or other obligations under
the Loan Documents (the “Participant Register”); provided that no Lender shall
have any obligation to disclose all or any portion of the Participant Register
(including the identity of any Participant or any information relating to a
Participant’s interest in any commitments, loans, letters of credit or its other
obligations under any Loan Document) to any Person except to the extent that
such disclosure is necessary to establish that such commitment, loan, letter of
credit or other obligation is in registered form under Section 5f.103-1(c) of
the United States Treasury Regulations. The entries in the Participant Register
shall be conclusive absent manifest error, and such Lender shall treat each
Person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to
the contrary. For the avoidance of doubt, the Administrative Agent (in its
capacity as Administrative Agent) shall have no responsibility for maintaining a
Participant Register.

(c) Any Lender may, in accordance with applicable Law, at any time and from time
to time assign to any Lender or any Subsidiary, Affiliate or Approved Fund
thereof, or, with the consent of the Administrative Agent, and, in the case of
an assignment of the Acquisition Facility Commitments, the Acquisition Facility
Issuing Lenders, and, in the case of an assignment of the Working Capital
Facility Commitment, the Working Capital Facility Issuing Lenders and the Swing
Line Lender, and, so long as no Event of Default has occurred and is continuing,
the Borrower (which consent shall not be

 

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unreasonably withheld or delayed), to any other Person (other than the Borrower
or any of its Subsidiaries or Affiliates) (the “Assignee”), all or any part of
its rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
F, appropriately completed (an “Assignment and Acceptance”), executed by such
Assignee, such assigning Lender (and, in the case of an Assignee that is not
then a Lender or any Subsidiary, Affiliate or Approved Fund thereof, by the
Administrative Agent, and, in the case of an assignment of the Acquisition
Facility Commitments, the Acquisition Facility Issuing Lenders, and, in the case
of an Assignment of the Working Capital Facility Commitment, the Working Capital
Facility Issuing Lenders and the Swing Line Lender, and, so long as no Event of
Default has occurred and is continuing and the Borrower is not deemed to consent
to such assignment, the Borrower) and attaching the Assignee’s relevant tax
forms, administrative details and wiring instructions, and delivered to the
Administrative Agent for its acceptance and recording in the Register; provided
that (i) each such assignment to an Assignee (other than any Lender) shall be in
an aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in
excess thereof (other than in the case of (A) an assignment of all of a Lender’s
interests under this Agreement or (B) an assignment to another Lender, a
Subsidiary, an Affiliate or an Approved Fund of such assigning Lender), unless
otherwise agreed by the Administrative Agent and, so long as no Event of Default
has occurred and is continuing, the Borrower (such amount to be aggregated in
respect of assignments by to any Lender and the affiliates or Approved Funds
thereof), (ii) in the case of an assignment by a Lender to a Bank CLO managed by
such Lender or an affiliate of such Lender, unless such assignment to such Bank
CLO has been consented to by the Administrative Agent, and in the case of an
assignment of the Acquisition Facility Commitments, the Acquisition Facility
Issuing Lenders, and, in the case of an Assignment of the Working Capital
Facility Commitment, the Working Capital Facility Issuing Lenders, and the Swing
Line Lender, and, so long as no Event of Default has occurred and is continuing
and the Borrower is not deemed to consent to such assignment, the Borrower (such
consent not to be unreasonably withheld or delayed), the assigning Lender shall
retain the sole right to approve any amendment, waiver or other modification of
this Agreement or any other Loan Document; provided that the Assignment and
Acceptance between such Lender and such Bank CLO may provide that such Lender
will not, without the consent of such Bank CLO, agree to any amendment,
modification or waiver that requires the consent of each Lender directly
affected thereby pursuant to Section 11.2, and (iii) each Assignee shall comply
with the provisions of Section 4.11(e). Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with Commitments as set forth
therein, and (y) the assigning Lender thereunder shall, to the extent provided
in such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender’s rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this paragraph (c) and paragraph (e) of this
Section 11.7, (x) the consent of the Borrower shall not be required, and, unless
requested by the Assignee and/or the assigning Lender, new Notes shall not be
required to be executed and delivered by the Borrower, for any assignment which
occurs at any time when any of the events described in Section 9.1(g) shall have
occurred and be continuing and (y) the Borrower shall be deemed to have
consented to any assignment that requires consent of the Borrower pursuant to
the terms hereof unless it shall object thereto by written notice to the
Administrative Agent within five (5) Business Days after having received notice
thereof. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Section 11.7 shall be treated for
purposes of this Agreement as a sale by such Lender of a Participation in such
rights and obligations in accordance with Section 11.7(b).

(d) The Administrative Agent, on behalf of the Borrower, shall maintain at the
address of the Administrative Agent referred to in Section 11.2 a copy of each
Assignment and Acceptance delivered to it and a register (the “Register”) for
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of the Lenders (including all Assignees and successors) and the Commitments of,
and principal amounts (and stated interest) of the Loans and other Obligations
owing to, each Lender from time to time. The entries made in the Register shall,
to the extent permitted by applicable Law, be prima facie evidence of the
existence and amounts of the obligations of the Borrower therein recorded
(absent manifest error), and the Borrower, the Administrative Agent and the
Lenders may (and, in the case of any Loan or other Obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other Obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary; provided, however, that the failure
of the Administrative Agent to maintain the Register, or any error therein,
shall not in any manner affect the obligation of the Borrower to repay (with
applicable interest) the Loans and other extensions of credit hereunder made to
the Borrower by such Lender in accordance with the terms of this Agreement. Any
assignment of any Loan or other Obligation hereunder, whether or not evidenced
by a Note, shall be effective only upon appropriate entries with respect thereto
being made in the Register. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice. The parties intend for the Loans or other Obligations
to be in registered form for tax purposes and this provision shall be construed
in accordance with that intent.

(e) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an Assignee (and, in the case of an Assignee that is not then a
Lender (or any Subsidiary, Affiliate or Approved Fund thereof), by the
Administrative Agent, and, in the case of an assignment of the Acquisition
Facility Commitments, the Acquisition Facility Issuing Lenders, and, in the case
of an assignment of the Working Capital Facility Commitment, the Working Capital
Facility Issuing Lenders and the Swing Line Lender and, so long as no Event of
Default has occurred and is continuing and the Borrower is not deemed to consent
to such assignment, the Borrower), together with payment to the Administrative
Agent by the assigning Lender of a registration and processing fee of $3,500,
the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the applicable Register and give notice of such
acceptance and recordation to the Lenders and the Borrower.

(f) The Borrower authorizes each Lender to disclose to any Participant or
Assignee (each, a “Transferee”) and any prospective Transferee (so long as no
Default or Event of Default has occurred and is continuing, other than an
Ineligible Participant) in each case, any and all financial information in such
Lender’s possession concerning the Borrower, the other Loan Parties and their
Subsidiaries and Affiliates which has been delivered to such Lender by or on
behalf of the Borrower or the other Loan Parties pursuant to this Agreement or
which has been delivered to such Lender by or on behalf of the Borrower or other
Loan Parties in connection with such Lender’s credit evaluation of the Borrower,
the other the Loan Parties and their Subsidiaries or Affiliates prior to
becoming a party to this Agreement; provided that such Transferee or prospective
Transferee shall have agreed to be bound by the provisions of Section 11.16
hereof.

(g) For avoidance of doubt, the parties to this Agreement acknowledge that the
provisions of this Section 11.7 concerning assignments of Loans and other
extensions of credit hereunder and Notes relate only to absolute assignments and
that such provisions do not prohibit assignments creating security interests,
including (i) any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable Law and (ii) any pledge or
assignment by a Lender which is a fund to its trustee for the benefit of such
trustee and/or its investors to secure its obligations under any indenture or
Governing Documents to which it is a party; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

 

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(h) Notwithstanding the foregoing, any Lender may, with notice to, but without
consent of, the Borrower and the Administrative Agent, and in accordance with
the definition of “Conduit Lender” set forth in Section 1.1 hereof and the terms
of this Section 11.7(h), designate a Conduit Lender and fund any of the Loans or
Unreimbursed Amounts which such Lender is obligated to make or pay hereunder by
causing such Conduit Lender to fund such Loans or Unreimbursed Amounts on behalf
of such Lender. Any Conduit Lender may assign any or all of the Loans or
Unreimbursed Amounts it may have funded hereunder to its designating Lender
without the consent of the Borrower or the Administrative Agent and without
regard to the limitations set forth in Section 11.7(c). The Borrower, each
Lender and each Agent hereby confirms that it will not institute against a
Conduit Lender or join any other Person in instituting against a Conduit Lender
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any state bankruptcy or similar Law in connection with any
obligation of such Conduit Lender under the Loan Documents, for one year and one
day after the payment in full of the latest maturing commercial paper note
issued by such Conduit Lender; provided, however, that each Lender designating
any Conduit Lender hereby agrees to indemnify, save and hold harmless each other
party hereto for any loss, cost, damage or expense arising out of its inability
to institute such a proceeding against such Conduit Lender during such period of
forbearance. In addition, notwithstanding the foregoing, any Conduit Lender may
(i) with notice to, but without the prior written consent of, the Borrower and
the Administrative Agent and without paying any processing fee therefor, assign
all or a portion of its interests in any Loans or Reimbursement Obligations to
any financial institutions (consented to by the Borrower and the Administrative
Agent) providing liquidity and/or credit support to or for the account of such
Conduit Lender to support the funding or maintenance of Loans or Reimbursement
Obligations by such Conduit Lender and (ii) disclose on a confidential basis any
non-public information relating to its Loans and its Reimbursement Obligations
to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such Conduit Lender. This clause
(h) may not be amended without the written consent of any Conduit Lender
directly affected thereby.

11.8 Adjustments; Set-off. (a) If any Lender (a “Benefited Lender”) shall at any
time receive any payment of all or part of its Loans or Reimbursement
Obligations with regards to either Facility, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 9.1(g),
or otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender under such Facility, if any, in respect of such
other Lender’s Loans or Reimbursement Obligations under such Facility, or
interest thereon, except to the extent specifically provided hereunder, such
Benefited Lender shall purchase for cash from the other Lenders under such
Facility a participating interest in such portion of each such other Lender’s
Loans or Reimbursement Obligations under such Facility, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such Benefited Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders
under such Facility; except that with respect to any Lender that is a Defaulting
Lender by virtue of such Lender failing to fund its Commitment Percentage of any
Loan or Participation Obligation, such Defaulting Lender’s pro rata share of the
excess payment shall be allocated to the Lender (or the Lenders, pro rata) that
funded such Defaulting Lender’s Commitment Percentage thereof; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest; provided further, that to the extent prohibited
by applicable law as described in the definition of “Excluded Swap Obligation,”
no amounts received from, or set off with respect to, any Guarantor shall be
applied to any Excluded Swap Obligations of such Guarantor . The Borrower agrees
that each Lender so purchasing a portion of another Lender’s Loans or
Reimbursement Obligations may exercise all rights of payment (including rights
of set-off) with respect to such portion as fully as if such Lender were the
direct holder of such portion.

 

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(b) In addition to any rights and remedies of the Lenders provided by Law, each
Lender shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable Law, during the existence of an Event of Default, upon any amount
becoming due and payable by the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the
Borrower. Each Lender agrees to promptly notify the Borrower and the
Administrative Agent after any such set-off and application made by such Lender;
provided that the failure to give such notice shall not affect the validity of
such set-off or application.

11.9 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by facsimile
transmission or electronic mail transmission in portable document format of
signature pages hereto), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of an executed
signature page of this Agreement by facsimile transmission or by electronic mail
in portable document format shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Borrower and the Administrative Agent.

11.10 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

11.11 Integration. This Agreement and the other Loan Documents represent the
agreement of the parties hereto with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties relative to
subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents.

11.12 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

11.13 Submission to Jurisdiction. Each Loan Party hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Loan Parties as the
case may be, at their address set forth in Section 11.2 or at such other address
of which the Administrative Agent shall have been notified pursuant thereto;

 

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(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by Law or shall limit the right to sue in
any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by Law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.

11.14 Acknowledgements. Each Loan Party hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents;

(b) none of the Agents nor any Lender has any fiduciary relationship with or
duty to the Loan Parties arising out of or in connection with this Agreement or
any of the other Loan Documents, and the relationship between the Borrower and
the other Loan Parties, on one hand, and Agents and Lenders, on the other hand,
in connection herewith or therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Loan Parties and the Lenders.

11.15 Waivers of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

11.16 Confidentiality. (a) Each Lender Party shall use its best efforts to
(i) keep confidential (and shall cause its directors, officers, employees,
representatives, agents, professional advisors or auditors (collectively,
“Representatives”) to keep confidential) all information that such Lender Party
receives from or on behalf of the Loan Parties other than information that is
identified by any of the Loan Parties as being non-confidential information (all
such information that is not so identified being “Confidential Information”);
provided that nothing in this Section 11.16 shall prevent any Lender Party from
(A) disclosing, subject to the terms and requirements of this Section 11.16,
such information to a Subsidiary or an Affiliate or its or their
Representatives, (B) disclosing Confidential Information in connection with the
exercise of any remedy hereunder, (C) using Confidential Information solely for
purposes of evaluating and administering the Loans and the Loan Documents,
(D) disclosing Confidential Information to a Participant, an Assignee or a
potential Transferee, in each case in accordance with Section 11.7(f) or (E) to
the National Association of Insurance Commissioners or any similar organization
and (ii) subject to Section 11.16(d), not disclose Confidential Information to
Representatives of its Trading Business. Any Person required to maintain the
confidentiality of Confidential Information as provided in this Section 11.16
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Confidential Information as such Person would accord to its own confidential
information.

(b) Notwithstanding anything in this Section 11.16 to the contrary, any
Confidential Information may be disclosed by any Lender Party or any
Representative (the affected Lender Party or Representative being the
“Disclosing Party”) if the Disclosing Party is compelled by judicial process or
is required by Law or regulation or is requested to do so by any examiner or any
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or recognized self-regulatory organization including the New York Stock
Exchange, the Federal Reserve Board, the New York State Banking Department and
the Securities & Exchange Commission, in each case having or asserting
jurisdiction over the Disclosing Party.

(c) The obligations of each Lender Party and its Representatives under this
Section 11.16 with respect to Confidential Information shall not apply to
(i) any Confidential Information which, as of the date of disclosure by such
Lender Party or its Representatives, is in the public domain or subsequently
comes into the public domain other than as a result of a breach of the
obligations of such Lender Party or its Representatives hereunder, or (ii) any
Confidential Information that was or becomes available to such Lender Party or
its Representatives from a person or source that is or was not, to the knowledge
of such Lender Party or its Representatives, bound by a confidentiality
agreement with any Loan Party or otherwise prohibited from transferring such
information to any other Person, or (iii) any Confidential Information which was
or becomes available to such Lender Party or its Representatives without any
obligation of confidentiality prior to its disclosure by or on behalf of the
Loan Parties or (iv) any Confidential Information that was developed by such
Lender Party or its Representative without the use of information provided by
any Loan Party.

(d) Notwithstanding anything herein to the contrary, any Lender Party may
disclose Confidential Information to those Representatives of its Trading
Business, solely to the extent (i) such disclosure is (A) advisable, in the good
faith discretion of such Lender Party, to assist such Lender Party in protecting
and enforcing its rights under any Loan Document and other credit facilities
which such Lender Party or any of its Subsidiaries or Affiliates has with the
applicable Loan Party (or any of its Subsidiaries or Affiliates) and
(B) relevant to such assistance, (ii) such Representatives have been advised of,
and agree to, the confidential nature, and restrictions on use, of such
Confidential Information and need to know same in connection with providing such
assistance, and (iii) such Confidential Information is not used for any purpose
other than that set forth in this Section 11.16.

(e) Each of the Lender Parties acknowledges that (a) the Confidential
Information may include material non-public information concerning the Loan
Parties and their related parties or their respective securities, (b) it has
developed compliance procedures regarding the use of material non-public
information and (c) it will handle such material non-public information in
accordance with applicable Law, including United States Federal and state
securities Laws.

11.17 Specified Laws. Each Lender and the Administrative Agent (for itself and
not on behalf of any Lender) hereby notifies the Borrower that pursuant to the
requirements of the Specified Laws, it is required to obtain, verify and record
information that identifies the Loan Parties, which information includes the
names and addresses of the Loan Parties and other information that will allow
such Lender or Administrative Agent, as applicable, to identify the Loan Parties
in accordance with the Specified Laws.

11.18 [Reserved].

11.19 Additional Borrowers. At any time and from time-to-time after the Closing
Date, the Borrower may request that any of its Subsidiaries become a borrower
under this Agreement (each Subsidiary which becomes a borrower pursuant to the
terms of this Section 11.19, an “Additional Borrower”). Such Subsidiary shall
become an Additional Borrower with effect on and from the date on which the
Administrative Agent notifies the Borrower that each of the following has been
satisfied (which date shall be within ten (10) Business Days after each Lender
has received the documents referred to in Section 11.19(e):

 

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(a) the Administrative Agent receives a duly completed and executed Joinder
Agreement, substantially in the form of Exhibit U;

(b) each Lender has approved of such Additional Borrower;

(c) the Borrower confirms that no Default or Event of Default is continuing or
would occur as a result of that Subsidiary becoming an Additional Borrower and
each of the representations and warranties relating to the Additional Borrower
and the Loan Parties (other than the representations and warranties set forth in
Sections 5.1, 5.4, 5.6, 5.7, 5.17 and 5.20) is true and not misleading in any
material respect (except that any representation and warranty that is qualified
by “materiality” or “Material Adverse Effect” shall be true and correct in all
respects as so qualified) as if made on date of accession of Additional
Borrower;

(d) the Subsidiary is incorporated, organized or formed in the United States of
America or another jurisdiction approved by the Supermajority Lenders;

(e) the Administrative Agent has received all of the documents and other
evidence referred to in Section 6.1(b) and Sections 6.1(d) through 6.1(g) in
relation to that Additional Borrower together with a legal opinion in respect of
the Additional Borrower from a law firm qualified to issue legal opinions with
respect to the jurisdiction of incorporation, organization or formation, each in
form and substance reasonably satisfactory to the Administrative Agent;

(f) the Administrative Agent shall have received the results of a recent search
by a Person reasonably satisfactory to the Administrative Agent, of the Uniform
Commercial Code (if relevant), judgment and tax Lien filings, and all customary
searches for financing transactions of this nature in all applicable
jurisdictions, which may have been filed with respect to personal property of
such Additional Borrower, and the results of such search shall be reasonably
satisfactory to the Administrative Agent;

(g) the Co-Collateral Agents and each Lender shall have received copies of a
collateral and risk management review (the “Additional Borrower Collateral Risk
Review”), in form and substance satisfactory to the Co-Collateral Agents, of all
of the assets of such Additional Borrower that would comprise each asset
category set forth in the definition of “Borrowing Base”, prepared by
Co-Collateral Agents’ internal or external collateral and risk manager;
provided, however, that (i) the Additional Borrower Collateral Risk Review shall
be completed (or in the event it is not completed, be deemed completed) by a
date no later than the date twenty-one (21) calendar days following the
Borrower’s request that a Subsidiary become an Additional Borrower, which such
request may not be made more than sixty (60) calendar days prior to the date
such Subsidiary shall become an Additional Borrower and (ii) prior to the
completion of the Additional Borrower Collateral Risk Review, the Co-Collateral
Agents may, in their sole discretion, count the assets of such Additional
Borrower in the calculation of the Borrowing Base;

(h) the Administrative Agent shall have received evidence in form and substance
reasonably satisfactory to it that all of the requirements of Section 7.5 hereof
and Section 5(q) of the Security Agreement shall have been satisfied with
respect to such Additional Borrower;

(i) each Lender shall have received all of the documents referred to in
Section 6.1(y) with respect to that Additional Borrower and has confirmed to the
Administrative Agent that such documents are in form and substance reasonably
satisfactory to such Lender;

 

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(j) such Additional Borrower becomes a Grantor; and

(k) such Additional Borrower appoints the Borrower to act on its behalf as the
agent for such Additional Borrower hereunder and under the other Loan Documents
and authorizes the Borrower to take such actions on its behalf and to exercise
such powers as are delegated to the Borrower by the terms hereof or thereof,
together with such actions and powers as are reasonably incidental thereto, and
the Borrower accepts such appointment (which appointment shall not be terminated
or revoked without the consent of the Administrative Agent and the Required
Lenders).

The Agents, the Borrower and any Additional Borrowers shall be permitted to
amend this Agreement and the other Loan Documents solely as necessary or
advisable to permit the Additional Borrower to borrow hereunder and as otherwise
required or advisable in connection therewith.

11.20 Joint and Several Liability. Upon entry into this Agreement by an
Additional Borrower, all Loans, upon funding, shall be deemed to be jointly
funded to and received by the Borrower Parties. Each Borrower Party jointly and
severally agrees to pay, and shall be jointly and severally liable under this
Agreement for, all Obligations, regardless of the manner or amount in which
proceeds of Loans are used, allocated, shared, or disbursed by or among the
Borrower Parties themselves, or the manner in which an Agent and/or any Lender
accounts for such Loans or other extensions of credit on its books and records.
Each Borrower Party shall be liable for all amounts due to an Agent and/or any
Lender under this Agreement, regardless of which Borrower Party actually
receives Loans or other Extensions of Credit hereunder or the amount of such
Loans and Extensions of Credit received or the manner in which such Agent and/or
such Lender accounts for such Loans or other Extensions of Credit on its books
and records. Each Borrower Party’s Obligations with respect to Loans and other
Extensions of Credit made to it, and such Borrower Party’s Obligations arising
as a result of the joint and several liability of such Borrower Party hereunder,
with respect to Loans and other Extensions of Credit made to the other Borrower
Parties hereunder, shall be separate and distinct obligations, but all such
Obligations shall be primary obligations of such Borrower Party. The Borrower
Parties acknowledge and expressly agree with the Agents and each Lender that the
joint and several liability of each Borrower Party is required solely as a
condition to, and is given solely as inducement for and in consideration of,
credit or accommodations extended or to be extended under the Loan Documents to
any or all of the other Borrower Parties and is not required or given as a
condition of Extensions of Credit to such Borrower Party. Each Borrower Party’s
obligations under this Agreement shall be separate and distinct obligations.
Each Borrower Party’s obligations under this Agreement shall, to the fullest
extent permitted by Law, be unconditional irrespective of (i) the validity or
enforceability, avoidance, or subordination of the Obligations of any other
Borrower Party or of any Note or other document evidencing all or any part of
the Obligations of any other Borrower Party, (ii) the absence of any attempt to
collect the Obligations from any other Borrower Party, any Guarantor, or any
other security therefor, or the absence of any other action to enforce the same,
(iii) the waiver, consent, extension, forbearance, or granting of any indulgence
by an Agent and/or any Lender with respect to any provision of any instrument
evidencing the Obligations of any other Borrower Party or any Guarantor, or any
part thereof, or any other agreement now or hereafter executed by any other
Borrower Party or any Guarantor and delivered to an Agent and/or any Lender,
(iv) the failure by an Agent and/or any Lender to take any steps to perfect and
maintain its security interest in, or to preserve its rights to, any security or
collateral for the Obligations of any other Borrower Party or any Guarantor,
(v) an Agent’s and/or any Lender’s election, in any proceeding instituted under
the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy
Code, (vi) any borrowing or grant of a security interest by any other Borrower
Party, as debtor-in-possession under Section 364 of the Bankruptcy Code,
(vii) the disallowance of all or any portion of an Agent’s and/or any Lender’s
claim(s) for the repayment of the Obligations of any other Borrower Party under
Section 502 of the Bankruptcy Code, or (viii) any other circumstances which
might constitute a legal or equitable discharge or defense of a guarantor or of
any

 

143

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other Borrower Party. With respect to any Borrower Party’s Obligations arising
as a result of the joint and several liability of the Borrower Parties hereunder
with respect to Loans or other Extensions of Credit made to any of the other
Borrower Parties hereunder, such Borrower Party waives, until the Obligations
shall have been paid in full and this Agreement shall have been terminated, any
right to enforce any right of subrogation or any remedy which an Agent and/or
any Lender now has or may hereafter have against any other Borrower Party, any
endorser or any guarantor of all or any part of the Obligations, and any benefit
of, and any right to participate in, any security or collateral given to an
Agent and/or any Lender to secure payment of the Obligations or any other
liability of any Borrower Party to an Agent and/or any Lender. Upon any Event of
Default, the Agents may proceed directly and at once, without notice, against
any Borrower Party to collect and recover the full amount, or any portion of the
Obligations, without first proceeding against any other Borrower Party or any
other Person, or against any security or collateral for the Obligations. Each
Borrower Party consents and agrees that the Agents shall be under no obligation
to marshal any assets in favor of any Borrower Party or against or in payment of
any or all of the Obligations. Each Borrower Party further acknowledges that
credit extended to each Borrower Party hereunder will directly or indirectly
benefit each other Borrower Party.

11.21 Contribution and Indemnification among the Borrower; Subordination. Each
Borrower Party is obligated to repay the Obligations as joint and several
obligor under this Agreement. To the extent that any Borrower Party shall, under
this Agreement as a joint and several obligor, repay any of the Obligations
constituting Loans made to another Borrower Party hereunder or other Obligations
incurred directly and primarily by any other Borrower Party (an “Accommodation
Payment”), then the Borrower Party making such Accommodation Payment shall be
entitled to contribution and indemnification from, and be reimbursed by, each of
the other Borrower Parties in an amount, for each of such other Borrower
Parties, equal to a fraction of such Accommodation Payment, the numerator of
which fraction is such other Borrower Party’s Allocable Amount (as defined
below) and the denominator of which is the sum of the Allocable Amounts of all
of the Borrower Parties. As of any date of determination, the “Allocable Amount”
of each Borrower Party shall be equal to the maximum amount of liability for
Accommodation Payments which could be asserted against such Borrower Party
hereunder without (a) rendering such Borrower Party “insolvent” within the
meaning of Section 101(31) of the Bankruptcy Code, Section 2 of the Uniform
Fraudulent Transfer Act (“UFTA”) or Section 2 of the Uniform Fraudulent
Conveyance Act (“UFCA”), (b) leaving such Borrower Party with unreasonably small
capital or assets, within the meaning of Section 548 of the Bankruptcy Code,
Section 4 of the UFTA, or Section 5 of the UFCA, or (c) leaving such Borrower
Party unable to pay its debts as they become due within the meaning of
Section 548 of the Bankruptcy Code or Section 4 of the UFTA, or Section 5 of the
UFCA. All rights and claims of contribution, indemnification, and reimbursement
under this Section 11.21 shall be subordinate in right of payment to the prior
payment in full of the Obligations. The provisions of this Section 11.21 shall,
to the extent expressly inconsistent with any provision in any Loan Document,
supersede such inconsistent provision.

11.22 Express Waivers by Borrower Parties in Respect of Cross Guaranties and
Cross Collateralization. Each Borrower Party agrees as follows:

(a) Each Borrower Party hereby waives: (i) notice of acceptance of this
Agreement; (ii) notice of the making of any Loans, the issuance of any Letter of
Credit or any other financial accommodations made or extended under the Loan
Documents or the creation or existence of any Obligations; (iii) notice of the
amount of the Obligations, subject, however, to such Borrower Party’s right to
make inquiry of the Administrative Agent to ascertain the amount of the
Obligations at any reasonable time; (iv) notice of any adverse change in the
financial condition of any other Borrower Party or of any other fact that might
increase such Borrower Party’s risk with respect to such other Borrower Party
under the Loan Documents; (v) notice of presentment for payment, demand,
protest, and notice thereof as to any promissory notes or other instruments
among the Loan Documents; and (vi) all other notices (except if such notice is
specifically required to be given to such Borrower Party hereunder or under any
of the other Loan Documents to which such Borrower Party is a party) and demands
to which such Borrower Party might otherwise be entitled.

 

144

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(b) Each Borrower Party hereby waives the right by statute or otherwise to
require an Agent or any other Secured Party to institute suit against any other
Borrower Party or to exhaust any rights and remedies which an Agent or any other
Secured Party has or may have against any other Borrower Party. Each Borrower
Party further waives any defense arising by reason of any disability or other
defense of any other Borrower Party (other than the defense that the Obligations
shall have been fully and finally performed and paid) or by reason of the
cessation from any cause whatsoever of the liability of any such Borrower Party
in respect thereof.

(c) Each Borrower Party hereby waives and agrees not to assert against an Agent
or any Lender: (i) any defense (legal or equitable), set-off, counterclaim, or
claim which such Borrower Party may now or at any time hereafter have against
any other Borrower Party or any other party liable under the Loan Documents;
(ii) any defense, set-off, counterclaim, or claim of any kind or nature
available to any other Borrower Party against an Agent or any Lender, arising
directly or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Obligations or any security
therefor; (iii) any right or defense arising by reason of any claim or defense
based upon an election of remedies by an Agent or any Lender under any
applicable law; and (iv) the benefit of any statute of limitations affecting any
other Borrower Party’s liability hereunder.

(d) Each Borrower Party consents and agrees that, without notice to or by such
Borrower Party and without affecting or impairing the obligations of such
Borrower Party hereunder, the Agents may (subject to any requirement for consent
of any of the Lenders to the extent required by this Agreement), by action or
inaction: (i) compromise, settle, extend the duration or the time for the
payment of, or discharge the performance of, or may refuse to or otherwise not
enforce the Loan Documents; (ii) release all or any one or more parties to any
one or more of the Loan Documents or grant other indulgences to any other
Borrower Party in respect thereof; (iii) amend or modify in any manner and at
any time (or from time to time) any of the Loan Documents; or (iv) release or
substitute any Person liable for payment of the Obligations, or enforce,
exchange, release, or waive any security for the Obligations or any Guarantee of
the Obligations.

(e) Each Borrower Party represents and warrants to the Agents and the Lenders
that, as of the date of entry of any Additional Borrower into this Agreement,
such Borrower Party is currently informed of the financial condition of all
other Borrower Parties and all other circumstances which a diligent inquiry
would reveal and which bear upon the risk of nonpayment of the Obligations. Each
Borrower Party further represents and warrants that, as of the date of entry of
such Borrower Party into this Agreement, such Borrower Party has read and
understands the terms and conditions of the Loan Documents. Each Borrower Party
agrees that none of the Agents or any Lender has any responsibility to inform
any Borrower Party of the financial condition of any other Borrower Party or of
any other circumstances which bear upon the risk of nonpayment or nonperformance
of the Obligations.

11.23 Limitation on Obligations of Borrower Parties. In the event that in any
action or proceeding involving any state or foreign corporate law, or any state,
Federal or foreign bankruptcy, insolvency, reorganization or other Law affecting
the rights of creditors generally, the obligations of any Borrower Party,
including for the obligations of any other Borrower Party, under this Agreement
shall be held or determined to be void, avoidable, invalid or unenforceable
(including because of Section 548 of the Bankruptcy Code or any applicable state
or Federal Law relating to fraudulent conveyances or transfers), then,
notwithstanding any other provision of this Agreement to the contrary, the
amount of such liability of a Borrower Party shall, without any further action
by any Loan Party, Agent or Lender,

 

145

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be automatically limited and reduced to the highest amount that is valid and
enforceable (such highest amount determined hereunder being the relevant
Borrower’s “Maximum Liability”); provided that nothing contained in this
Section 11.23 shall limit the liability of any Borrower Party to repay Loans
made directly or indirectly to or for the benefit of that Borrower Party or any
Subsidiary of that Borrower Party (including Loans advanced to any other
Borrower Party and then re-loaned or otherwise transferred to, or for the
benefit of, such Borrower Party or any of its Subsidiaries), Obligations
relating to Letters of Credit issued for the direct or indirect benefit of such
Borrower Party or any of its Subsidiaries, and all interest, fees, expenses and
other related Obligations under the Loan Documents with respect thereto, for
which such Borrower Party shall be primarily liable for all purposes hereunder.
This Section 11.23 with respect to the Maximum Liability of each Borrower Party
is intended solely to preserve the rights of the Agents and the Lenders to the
maximum extent not subject to avoidance under applicable Law, and no Loan Party
nor any other person or entity shall have any right or claim under this
Section 11.23 with respect to such Maximum Liability, except to the extent
necessary so that the obligations of any Borrower Party hereunder shall not be
rendered void, voidable, invalid or unenforceable under applicable Law.

[Signature Pages Follow]

 

146

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

 

SPRAGUE OPERATING RESOURCES LLC, as

    Borrower

By:   /s/ Kevin Henry   Name: Kevin Henry   Title: Vice President and Treasurer

 

[Signature Page to Credit Agreement]

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

AGENTS AND LENDERS:

JPMORGAN CHASE BANK, N.A.,

    as Administrative Agent and Co-Collateral Agent

By:   /s/ Dan Bueno   Name: Dan Bueno   Title: Vice President

JPMORGAN CHASE BANK, N.A.,

    as Working Capital Facility Issuing Lender

By:   /s/ Dan Bueno   Name: Dan Bueno   Title: Vice President

JPMORGAN CHASE BANK, N.A.,

    as Acquisition Facility Issuing Lender

By:   /s/ Dan Bueno   Name: Dan Bueno   Title: Vice President

JPMORGAN CHASE BANK, N.A.,

    as Swing Line Lender

By:   /s/ Dan Bueno   Name: Dan Bueno   Title: Vice President

JPMORGAN CHASE BANK, N.A.,

    as a Lender

By:   /s/ Dan Bueno   Name: Dan Bueno   Title: Vice President

 

[Signature Page to Credit Agreement]

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

BNP PARIBAS,

    as Co-Collateral Agent

By:   /s/ Janet Kochne   Name: Janet Kochne   Title: Director By:   /s/ A-C
Mathlot   Name: A-C Mathlot   Title: Managing Director

BNP PARIBAS,

    as a Lender

By:   /s/ Janet Kochne   Name: Janet Kochne   Title: Director By:   /s/ A-C
Mathlot   Name: A-C Mathlot   Title: Managing Director

 

[Signature Page to Credit Agreement]

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

RBS CITIZENS, NATIONAL ASSOCIATION,

    as a Co-Syndication Agent

By:   /s/ Donald A. Wright   Name: Donald A. Wright   Title: SVP

RBS CITIZENS, NATIONAL ASSOCIATION,

    as a Lender

By:   /s/ Donald A. Wright   Name: Donald A. Wright   Title: SVP

 

[Signature Page to Credit Agreement]

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

NATIXIS, NEW YORK BRANCH,

    as a Co-Syndication Agent

By:  

/s/ Carla Gray

  Name: Carla Gray   Title:   Director By:  

/s/ David Pershad

  Name: David Pershad   Title:   Managing Director

NATIXIS, NEW YORK BRANCH,

    as a Lender

By:  

/s/ Carla Gray

  Name: Carla Gray   Title:   Director By:  

/s/ David Pershad

  Name: David Pershad   Title:    Managing Director

[Signature Page to Credit Agreement]

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

 

WELLS FARGO BANK, N.A.,     as a Co-Syndication Agent By:  

/s/ Jeffrey Kinney

  Name: Jeffrey Kinney   Title:   Senior Vice President

WELLS FARGO BANK, N.A.,

    as a Lender

By:  

/s/ Jeffrey Kinney

  Name: Jeffrey Kinney   Title:   Senior Vice President

[Signature Page to Credit Agreement]

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

 

STANDARD CHARTERED BANK,

    as a Co-Documentation Agent

By:  

/s/ Brendan Herley

  Name: Brendan Herley   Title:   Director Capital Markets By:  

/s/ Robert K. Reddington

  Name: Robert K. Reddington   Title:   Credit Documentation Manager  

            Credit Documentation Unit, WB Legal

            Americas

STANDARD CHARTERED BANK,

    as a Lender

By:  

/s/ Brendan Herley

  Name: Brendan Herley   Title:   Director Capital Markets By:  

/s/ Robert K. Reddington

  Name: Robert K. Reddington   Title:   Credit Documentation Manager  
            Credit Documentation Unit, WB Legal               Americas

[Signature Page to Credit Agreement]

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

SOCIETE GENERALE,

    as a Co-Documentation Agent

By:  

/s/ Barbara Paulsen

  Name: Barbara Paulsen   Title:   Managing Director

SOCIETE GENERALE,

    as a Lender

By:  

/s/ Barbara Paulsen

  Name: Barbara Paulsen   Title:   Managing Director

[Signature Page to Credit Agreement]

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

COOPERATIEVE CENTRALIE RAIFFEISENBOERENLEENBANK, B.A., “RABOBANK NEDERLAND”, NEW
YORK BRANCH,

as a Co-Documentation Agent

By:  

/s/ Chan K. Park

  Name: Chan K. Park   Title:   Managing Director By:  

/s/ Xander Willemsen

  Name: Xander Willemsen   Title:   Executive Director

COOPERATIEVE CENTRALIE RAIFFEISENBOERENLEENBANK, B.A., “RABOBANK NEDERLAND”, NEW
YORK BRANCH,

as a Lender

By:  

/s/ Chan K. Park

  Name: Chan K. Park   Title:   Managing Director By:  

/s/ Xander Willemsen

  Name: Xander Willemsen   Title:   Executive Director

 

[Signature Page to Credit Agreement]

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

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

        as a Co-Documentation Agent

By:  

/s/ Richard Wernli

  Name: Richard Wernli   Title: Managing Director

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

        as a Lender

By:  

/s/ Richard Wernli

  Name: Richard Wernli   Title: Managing Director

 

[Signature Page to Credit Agreement]

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

SANTANDER BANK, N.A.,

        as a Lender

By:   /s/ William Maag  

Name: William Maag

Title:   Senior Vice President

 

[Signature Page to Credit Agreement]

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

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,

    as a Lender

By:  

/s/ Mark Lvoff

 

Name: Mark Lvoff

Title:   Managing Director

By:  

/s/ Zali Win

 

Name: Zali Win

Title:   Managing Director

 

[Signature Page to Credit Agreement]

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

BANK OF AMERICA, N.A.,

        as a Lender

By:   /s/ Michael Clayborne  

Name: Michael Clayborne

Title:   Vice President

 

[Signature Page to Credit Agreement]

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

BARCLAYS BANK PLC,

        as a Lender

By:   /s/ Sreedhar R. Kona  

Name: Sreedhar R. Kona

Title:   Vice President

 

[Signature Page to Credit Agreement]

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

BMO HARRIS BANK N.A.,

    as a Lender

By:   /s/ Kevin Utsey  

Name: Kevin Utsey

Title:   Director

 

[Signature Page to Credit Agreement]

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

TD BANK, N.A.,

    as a Lender

By:   /s/ David Perlman  

Name: David Perlman

Title:   Senior Vice President

 

[Signature Page to Credit Agreement]

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

RB INTERNATIONAL FINANCE (USA) LLC,

    as a Lender

By:   /s/ Astrid Wilke  

Name: Astrid Wilke

Title:   Group Vice President

By:   /s/ Nancy Remini  

Name: Nancy Remini

Title:   Vice President

 

[Signature Page to Credit Agreement]

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

PEOPLE’S UNITED BANK, N.A.,

    as a Lender

By:   /s/ Kim Lane  

Name: Kim Lane

Title:   SVP Commercial Lender

 

[Signature Page to Credit Agreement]

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

ROYAL BANK OF CANADA,

    as a Lender

By:   /s/ Sandya Benoist  

Name: Sandya Benoist

Title:   Director, National Client Group, Finance

 

[Signature Page to Credit Agreement]

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

RAYMOND JAMES BANK, N.A.,

as a Lender

By:   /s/ Alexander L. Rody   Name: Alexander L. Rody   Title:   Senior Vice
President

 

[Signature Page to Credit Agreement]

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

BLUE HILLS BANK,

as a Lender

By:   /s/ Kelley Keefe   Name: Kelley Keefe   Title:   Vice President

 

[Signature Page to Credit Agreement]

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

WEBSTER BANK,

as a Lender

By:   /s/ Carolyn Morrison   Name: Carolyn Morrison   Title:   Vice President

 

[Signature Page to Credit Agreement]

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

FIRST NIAGARA BANK, N.A.,

as a Lender

By:   /s/ William D. Checkosky   Name: William D. Checkosky   Title:   Vice
President

[Signature Page to Credit Agreement]

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

ISRAEL DISCOUNT BANK OF NEW YORK,

as a Lender

By:   /s/ James M. Morton   Name: James M. Morton   Title:   First Vice
President

 

[Signature Page to Credit Agreement]

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

Schedule 1.0

to Credit Agreement

LENDERS, COMMITMENTS AND APPLICABLE LENDING OFFICES

 

Lender

   Working
Capital Facility
Commitment      Acquisition
Facility
Commitment      Total
Commitment     

Applicable Lending

Office

JPMorgan Chase

Bank, N.A.

   $ 59,522,250.00       $ 19,840,750.00       $ 79,363,000.00       277 Park
Avenue,
22nd Floor
New York, NY
10172

BNP Paribas

   $ 59,522,250.00       $ 19,840,750.00       $ 79,363,000.00       787 Seventh
Avenue,
9th Floor
New York, NY
10019

RBS Citizens,

National

Association

   $ 59,522,250.00       $ 19,840,750.00       $ 79,363,000.00       1 Citizens
Dr.
Riverside, RI 02915

Natixis, New York

Branch

   $ 59,522,250.00       $ 19,840,750.00       $ 79,363,000.00       1251 6th
Avenue
New York, NY
10020

Wells Fargo Bank,

N.A.

   $ 59,522,250.00       $ 19,840,750.00       $ 79,363,000.00       101 Federal
Street,
Suite 2020
Boston, MA 02110

Standard

Chartered Bank

   $ 51,377,100.00       $ 17,125,700.00       $ 68,502,800.00       1095 Avenue
of the
Americas
New York, NY
10036

Societe Generale

   $ 51,377,100.00       $ 17,125,700.00       $ 68,502,800.00       245 Park
Avenue
New York, NY
10167

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

Lender

   Working
Capital Facility
Commitment      Acquisition
Facility
Commitment      Total
Commitment     

Applicable Lending

Office

Cooperatieve

Centralie

Raiffeisenboerenle enbank,

B.A. “Rabobank

Nederland”, New

York Branch

   $ 40,725,750.00       $ 13,575,250.00       $ 54,301,000.00       245 Park
Avenue
New York, NY
10167

The Bank of

Tokyo-Mitsubishi

UFJ, Ltd.

   $ 40,725,750.00       $ 13,575,250.00       $ 54,301,000.00      

1251 Avenue of the Americas
New York, NY

10020

Santander Bank,

N.A.

   $ 40,725,750.00       $ 13,575,250.00       $ 54,301,000.00       75 State
Street
Boston, MA
02109

Credit Agricole

Corporate and

Investment Bank

   $ 28,186,500.00       $ 9,395,500.00       $ 37,582,000.00       1301 Avenue
of the Americas
New York, NY
10019

Bank of America,

N.A.

   $ 25,062,000.00       $ 8,354,000.00       $ 33,416,000.00       700
Louisiana St,
TX 4-213-13-15
Houston, TX 77002

Barclays Bank

PLC

   $ 25,062,000.00       $ 8,354,000.00       $ 33,416,000.00       745 7th
Avenue,
New York, NY
10019

BMO Harris Bank

N.A.

   $ 25,062,000.00       $ 8,354,000.00       $ 33,416,000.00       111 West
Monroe,
Chicago, IL 60603

TD Bank, N.A.

   $ 23,182,350.00       $ 7,727,450.00       $ 30,909,800.00       31 52nd
Street,
New York, NY
10019

RB International

Finance (USA),

LLC

   $ 20,049,600.00       $ 6,683,200.00       $ 26,732,800.00       1133 Avenue
of the
Americas,
16th Floor,
New York, NY
10036

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

Lender

   Working
Capital Facility
Commitment      Acquisition
Facility
Commitment      Total
Commitment     

Applicable Lending

Office

People’s United

Bank, N.A.

   $ 15,000,000.00       $ 5,000,000.00       $ 20,000,000.00       467 Congress
Street,
Portland, ME 04104

Royal Bank of

Canada

   $ 13,877,100.00       $ 4,625,700.00       $ 18,502,800.00       20 King
Street West,
4th Floor
Toronto, Ontario
M5H 1C4

Raymond James

Bank, N.A.

   $ 12,531,000.00       $ 4,177,000.00       $ 16,708,000.00       710 Carillon
Parkway
St. Petersburg, FL
33716

Blue Hills Bank

   $ 11,250,000.00       $ 3,750,000.00       $ 15,000,000.00       1196 River
Street
Hyde Park, MA
02136

Webster Bank

   $ 9,398,250.00       $ 3,132,750.00       $ 12,531,000.00       145 Bank
Street
Waterbury, CT
06702

First Niagara

Bank, N.A.

   $ 9,398,250.00       $ 3,132,750.00       $ 12,531,000.00       726 Exchange
Street,
9th Floor
Buffalo, NY 14210

Israel Discount

Bank of New York

   $ 9,398,250.00       $ 3,132,750.00       $ 12,531,000.00       511 Fifth
Avenue
New York, NY
10017   

 

 

    

 

 

    

 

 

    

Total

   $ 750,000,000       $ 250,000,000       $ 1,000,000,000         

 

 

    

 

 

    

 

 

    

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

Schedule 1.1(A)

to Credit Agreement

APPROVED INVENTORY LOCATIONS

 

New Bedford Terminal    TRT Terminal    30 Pine Street    740 Washington Street
   New Bedford, MA 02740    Quincy, MA 02169    Portland Terminal       92
Cassidy Point Drive       Portland, Maine 04102      

Throughput Locations

 

Legal Name Per Throughput

Agreement

  

Physical Address

  

Office Address

121 Point Breeze Management Corporation    6310 West Passyunk Avenue,
Philadelphia, PA 19153   

6310 West Passyunk

Avenue, Philadelphia,

PA 19153

Arc Terminals Holding LLC (former Motiva Brooklyn)   

23 Paidge Avenue; Brooklyn,

NY 11222

  

3000 Research Forest Drive,

Suite 250; The Woodlands,

TX 77381

B & B Petroleum, Inc.   

1 Brownstone Avenue;

Portland CT 06480

  

1 Brownstone Avenue;

Portland CT 06480

Bigelow Oil Company, Inc.   

50 Tower Road; Newton

Upper Falls, MA 02164

  

50 Tower Road; Newton

Upper Falls, MA 02164

BP Products North America Inc.   

125 Apollo Street; Brooklyn,

NY 11222

  

28301 Ferry Road;

Warrenville, IL 60555

Buckeye Terminals, LLC   

50 Burbank Road,

Wethersfield, CT 06109

  

Five TEK Park,

9999Hamilton Blvd.;

Breinigsville, PA 18031

Buckeye Terminals, LLC   

County Route 37 & River

Road; Brewerton, NY 13029

  

5002 Buckeye Rd; Emmaus,

PA 18049

Buckeye Terminals, LLC   

5198 Buckeye Road;

Macungie, PA 18062

  

5002 Buckeye Rd; Emmaus,

PA 18049

Buckeye Terminals, LLC   

9586 River Road Route 49;

Marcy, NY 13403

  

5002 Buckeye Rd; Emmaus,

PA 18049

Buckeye Terminals, LLC   

37 Wurz. Avenue; Utica, NY

13502

  

5002 Buckeye Rd; Emmaus,

PA 18049

Buckeye Terminals, LLC   

3121 Shippers Road; Vestal,

NY 13850

  

5002 Buckeye Rd; Emmaus,

PA 18049

Carbo Industries Inc.   

1 Bay Boulevard; Lawrence,

NY 11559

  

1 Bay Boulevard; Lawrence,

NY 11559

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

Champagne’s Energy   

845 Old Post Road; Arundel,

ME 04046

  

845 Old Post Road;

Arundel, ME 04046

Citgo Petroleum Corporation   

4801 South Woods Ave;

Linden, NJ 07036

  

1293 Eldridge Parkway;

Houston, TX 77077

Depot Place Terminal, Inc.   

17 Depot Place; Unionville,

CT 06085

  

17 Depot Place; Unionville,

CT 06085

Dominion Energy Manchester Street, Inc.   

Manchester Street Station,

Providence, RI 02903

  

40 Point Street; Providence,

RI 02903

Duck Island Terminal, Inc.   

1463 Lamberton Road;

Trenton, NJ 08611

  

1463 Lamberton Road;

Trenton, NJ 08611

Dutch Hill Terminals, LLC   

568 Paulson Avenue; Clifton,

NJ 07011

  

568 Paulson Avenue;

Clifton, NJ 07011

Edgemont Garage & Oil Co.   

115 W. Main Street;

Merrimac, MA 01860

  

115 W. Main Street;

Merrimac, MA 01860

ExxonMobil Oil Corp.   

52 Beachum Street; Everett,

MA 02149

  

3225 Gallows Road;

Fairfax, VA 22037

Frank Bros. Fuel Corp.   

7 Belford Avenue; Bay

Shore, NY 11706

  

7 Belford Avenue; Bay

Shore, NY 11706

Fred M. Schildwachter & Sons, Inc.   

1400 Ferris Place, Bronx,

NY 10461

  

1400 Ferris Place, Bronx,

NY 10461

General Utilities, Inc.   

82 Arlington Ave.; St. James,

NY 11780

  

100 Fairfield Avenue;

Plainfield, NY 11803

General Utilities, Inc.   

48 Brooklyn Avenue;

Massapequa, NY 11758

  

100 Fairfield Avenue;

Plainfield, NY 11803

General Utilities, Inc.   

3 Washington Pkwy;

Hicksville, NY 11801

  

100 Fairfield Avenue;

Plainfield, NY 11803

General Utilities, Inc.   

201 Union Blvd.; West Islip,

NY 11795

  

100 Fairfield Avenue;

Plainfield, NY 11803

General Utilities, Inc.   

98 E. Montauk Highway;

Hampton Bays, NY 11946

  

100 Fairfield Avenue;

Plainfield, NY 11803

George T. Taylor &Son, Inc.   

152 Broad Brook Road;

Broad Brook, CT 06016

  

152 Broad Brook Road;

Broad Brook, CT 06016

Global Companies LLC (assigned from

Warex Terminals Corp)

  

1184 River Road, New

Windsor, NY 12553-6728

  

800 South Street, Suite 200,

Waltham, MA 02454-9161

Grafton Upton Rail Care, LLC   

25 Maple Avenue; Upton,

MA 01568

  

25 Maple Avenue; Upton,

MA 01568

Hess Corporation (assigned from

Stuyvesant Fuel Terminal Co, LLC)

  

1040 East 149th Street;

Bronx, NY 10455

  

1 Hess Plaza; Woodbridge,

NJ 07095

L.E. Belcher, Inc.   

615 St. James Avenue,

Springfield, MA 01109

  

615 St. James Avenue,

Springfield, MA 01109

Lewisy Fuel Oil, Inc.   

549 Larkfield Road, East

Northport, NY 11731

  

549 Larkfield Road, East

Northport, NY 11731

Motiva Enterprises LLC    111 State Street; Sewaren, NJ
07077-1440   

PO Box 2099; Houston, TX

77252-2099

New Hyde Park Oil Terminal, Inc.   

1900 Plaza Avenue; New

Hyde Park, NY 11040

  

1900 Plaza Avenue; New

Hyde Park, NY 11040

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

NuStar Logistics, L.P. & NuStar Pipeline

Operating Partnership L.P.

  

3700 South Wood Aveneu,

Linden, NJ 07036

  

2330 North Loop 1604

West, San Antonio, TX

78248

Oswego Oil Service Corporation   

45 Intersection Street,

Hempstead, NY 11550

  

45 Intersection Street,

Hempstead, NY 11550

Peterson Oil Service (should be Peterson’s

Oil Service, Inc.)

  

75 Crescent Street;

Worchester, MA 01604

14 Putnam Lane; Worchester,

MA 01604

  

75 Crescent Street;

Worchester, MA 10604

Plains Products Terminal LLC   

3rd Steet, Billings Road;

Paulsboro, NJ 08066

  

333 Clay Street, Suite 1600;

Houston, TX 77022

Plains Products Terminal LLC   

1630 S. 51st Steet;

Philadelphia, PA 19153

  

333 Clay Street, Suite 1600;

Houston, TX 77022

Romanelli & Son, Inc.   

88 East Hoffman Avenue;

Lindenhurst, NY 11757

  

88 East Hoffman Avenue;

Lindenhurst, NY 11757

Savage Sevices Corporation   

123 Rodman Road; Auburn,

ME 04210

  

6430 South 3000 East, Suite

600; Salt Lake City, UT

84121

Scalzo Utilities   

115 West 11th Street;

Huntington Station, NY

11746

  

115 West 11th Street;

Huntington Station, NY

11746

Shore Properties. LLC   

One Private Road; East

Moriches, NY 11940

  

Route 112; PO Box 684,

Patchogue, NY 11772

Sunoco Partners Marketing & Terminals L.P.   

436 Doremus Ave., Newark,

NJ 07105

  

1818 Market Street, Suite

1500, Phila. PA 19103

Swezey Fuel Co., Inc.   

51 Rider Avenue; Patchogue,

NY 11772

  

51 Rider Avenue;

Patchogue, NY 11772

Taylor & Murphy, Inc.   

188 Lexington Street;

Waltham, MA 02154

  

188 Lexington Street;

Waltham, MA 02154

Transflo Terminal Services, Inc.   

One Exchange Street

Extension; Albany, NY

12205

  

6735 Southpoint Drive

South, J-975; Jacksonville,

FL 32216

Transflo Terminal Services, Inc.   

454 York Street; Elizabeth,

NJ 07201

  

6735 Southpoint Drive

South, J-975; Jacksonville,

FL 32216

Transflo Terminal Services, Inc.   

19 Walkup Drive;

Westborough, MA 01581

  

6735 Southpoint Drive

South, J-975; Jacksonville,

FL 32216

Windsor Fuel Co., Inc.   

80 Windsor Ave.; Mineola,

NY 11501-1922

  

80 Windsor Ave.; Mineola,

NY 11501-1922

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

Schedule 1.1(B)

to Credit Agreement

CASH MANAGEMENT BANKS

JPMORGAN CHASE BANK, N.A.

J.P. MORGAN SECURITIES LLC

BNP PARIBAS

BNP PARIBAS PRIME BROKERAGE, INC.

CITIGROUP GLOBAL MARKETS INC.

NEWEDGE USA, LLC

RBS CITIZENS, NATIONAL ASSOCIATION

TD BANK, N.A.

SANTANDER BANK, N.A.

WELLS FARGO BANK, N.A.

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

Schedule 1.1(C)

to Credit Agreement

ELIGIBLE FOREIGN COUNTERPARTIES

A/S DAMPSKIBSSELSKABET TORM

AET INC LIMITED

ANCORA SHIPPING BV

ANDRIAKI SHIPPING

ARMADA (SINGAPORE) PTE LTD

BALTSHIP A/S

BARCLAYS BANK PLC

BBC CHARTERING & LOGISTICS

BEBEKA

BP AMOCO EXCHANGE

BP SHIPPING LIMITED

BRITISH AIRWAYS PLC

BSL AGENCIES MONACO SAM

BUNKERNET LTD.

CLIPPER GROUP AS

COCKETT MARINE OIL LTD

COLUMBIA SHIP MANAGEMENT

CSSA CHARTERING AND SHIPPING SERVICES SA

DALKIA ENERGY SERVICES LLC

DANNEBROG REDERI A/S

DELTA TANKERS LTD.

DONNELLY TANKER MANAGEMENT LTD

DYNACOM TANKER MANAGEMENT

EIGER SHIPPING S.A.

EITSEN BULK AS

EITZEN CHEMICAL A/S

ES BOCES-TRANS LOC #2

GAC BUNKER FUELS (USA) L.L.C.

GEARBULK (UK) LTD

GEMINI TANKERS, LLC

GORTHON LINES AB

GREENI TRADING OY

HAMPTON BERMUDA LTD.

INGENIO SAN RAFAEL DE PUCTE SA CV

LAURITZEN BULKERS A/S

MITSUI OSK LINES LTD.

MONJASA A/S

MST MINERALIEN SCHIFFART

 

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

NEREUS SHIPPING SA

NORWEGIAN OIL TRADING AS

ODFJELL SEACHEM AS

ONEGO SHIPPING & CHARTERING

ONEGO SHIPPING & CHARTERING B.V.

OSG SHIPMANAGEMENT (GR) LTD

OW BUNKER & TRADING AS

PACC CONTAINER LINE PTE LTD

PDVSA PETROLEO Y GAS S

PENINSULA PETROLEUM LTD

PP&L / SUNBURY

PRAXIS ENERGY AGENTS S.A.

PROJECTOR (UK) LIMITED

PT KALTIM PRIMA COAL

ROTTNEROS BRUK AB

RUDDER SAM

SBI SEA BUNKERING INTERNATIONAL BV

SCANDINAVIA BUNKERING

SCORPIO PARAMAX TANKER POOL LTD.

SHELL INTERNATIONAL TRADING & SHIPPING C

SKS TANKERS, LTD.

SMT SHIPMANAGEMENT & TRANSPORT LIMITED

SPLIETHOFF’S BEVRACHTINGSKANTOOR BV

ST SHIPPING & TRANSPORT INC.

STATOILHYDRO ASA

STENA OIL AB

TANKER PACIFIC MANAGEMENT

THENAMARIS, INC.

TORVALD KLAVENESS GROUP

TRAFIGURA BEHEER BV

TRAFIGURA DERIVATIES LTD

TRANSATLANTIC SERVICES AB

TRECAN COMBUSTION LIMITED

TTS SHIPPING, LTD.

U-SEA BULK AS

UTANSJO BRUK AB

VALLVIKS BRUK AB

WESTERN BULK CARRIERS KS

WINDSOR EXCHANGE

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

Schedule 1.1(D)

to Credit Agreement

INDEPENDENT ENTITY SCHEDULE

 

Customer

ID

  

Customer Name

  

Parent

Customer ID

  

Parent

Customer Name

80562000    BP CANADA ENERGY COMPANY    87006000    BP. PLC 80641000    BP
CANADA ENERGY MARKETING CORP.    87006000    BP. PLC 80690000    BP CORPORATION
NORTH AMERICA INC.    87006000    BP. PLC 80074000    BP ENERGY CO    87006000
   BP. PLC 65090000    BP NORTH AMERICA PETROLEUM    87006000    BP. PLC
46972000    BP SHIPPING LIMITED    87006000    BP. PLC 80134000    CARGILL
INCORPORATED    87013000    CARGILL, INC. 80705000    CARGILL LIMITED   
87013000    CARGILL, INC. 47025000    CHEVRON CANADA RESOURCES    87014000   
CHEVRON CORPORATION 60056000    Chevron Products Company    87014000    CHEVRON
CORPORATION 80702000    CHEVRON TEXACO NATURAL GAS    87014000    CHEVRON
CORPORATION 80636000    CONOCO CANADA LIMITED    87018000    CONOCOPHILLIPS
80111000    CONOCOPHILLIPS COMPANY    87018000    CONOCOPHILLIPS 21842000    Con
Edison Energy, Inc.    87093000    CONSOLIDATED EDISON, INC. 24588000    Con
Edison Kero & H2 Only    87093000    CONSOLIDATED EDISON, INC. 80565000   
CONSOLIDATED EDISON ENERGY, INC.    87093000    CONSOLIDATED EDISON, INC.
80119000    CONSTELLATION ENERGY COMMODITIES GROUP,    87019000    CONSTELLATION
GROUP, INC. 84824000    CONSTELLATION NEW ENERGY GAS DIV LLC    87019000   
CONSTELLATION GROUP, INC. 80729000    DYNEGY CANADA MARKETING AND TRADE   
87325000    Dynegy Holdings, Inc. 80777000    Dynegy Gas Imports    87325000   
Dynegy Holdings, Inc. 80017000    DYNEGY MARKETING AND TRADE    87325000   
Dynegy Holdings, Inc. 60010000    EXXON COMPANY USA (INC)    87782000   
Exxonmobil Corp 65017000    EXXONMOBIL OIL CORP    87782000    Exxonmobil Corp
20380000    Getty Petroleum Marketing, Inc.    87763000    OAO LUKOIL 21328000
   Getty Terminals/P.T. Petro    87763000    Getty Petroleum Marketing Inc
26284000    Lukoil North America LLC    87763000   
Getty Petroleum Marketing Inc 49477000    Kingston Oil Supply Corp.    87763000
   Getty Petroleum Marketing Inc 90423000    PT Petro Corp.    87763000    Getty
Petroleum Marketing Inc

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

Customer

ID

  

Customer Name

  

Parent

Customer ID

  

Parent

Customer Name

83260000    AMERADA HESS    87036000    HESS CORPORATION 60000000    Hess
Corporation    87036000    HESS CORPORATION 60048000    Hess Energy Trading Co.
LLC    87036000    HESS CORPORATION 47088000    IRVING OIL COMMERCIAL GP   
87282000    Irving Oil 20171000    Irving Oil Corp    87282000    Irving Oil
46986000    IRVING OIL LIMITED    87282000    Irving Oil 65067000    IRVING OIL
TERMINALS CORP    87282000    Irving Oil 24743000    NRG POWER MARKETING INC   
87106000    NRG POWER MARKETING, INC. 80683000    NRG POWER MARKETING LLC   
87106000    NRG POWER MARKETING, INC. 84243000    NRG Power Marketing LLC
(Oswego)    87106000    NRG POWER MARKETING, INC. 65216000    Shell Canada
Products Ltd    87290000    Royal Dutch Shell, plc 80762000    Shell Energy
North America    87290000    Royal Dutch Shell, plc 83303000    SHELL ENERGY
NORTH AMERICA (CANADA) INC.    87290000    Royal Dutch Shell, plc 46984000   
Shell International Trading & Shipping C    87290000    Royal Dutch Shell, plc
60113000    Shell Trading (US) Company    87290000    Royal Dutch Shell, plc
42697000    Santa Buckley Energy, Inc.    57645    Santa Holding Co 84129000   
Santa Fuel, Inc    57645    Santa Holding Co 83144000    SEMPRA ENERGY SOLUTIONS
   87068000    SEMPRA ENERGY 66202000    Sempra Oil Trading LLC    87068000   
SEMPRA ENERGY 44653000    Tambrands Manufacturing, Inc.    87056000    Proctor &
Gamble Company 83178000    The Gillette Company    87056000    Proctor & Gamble
Company

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

Schedule 1.1(E)

to Credit Agreement

MORTGAGED PROPERTY

 

1. Albany Terminal, NY

540 Riverside Avenue

East Greenbush, NY 12144

 

2. Rensselaer Terminal, NY

(Adjacent to Albany Terminal)

58 Riverside Avenue

Rensselaer, NY 12144

 

3. Avery Lane Terminal, NH

194 Shattuck Way

Newington, NH 03801

 

4. Bridgeport Terminal, CT

250 Eagles Nest Road

Bridgeport, CT 06607

241 Seaview Avenue Rear

Bridgeport, CT 06607

 

5. Everett Terminal, MA

43 Beacham Street

Everett, MA 02149

 

6. Merrill’s Marine Terminal, ME (leased)

92 Cassidy Point Drive

Portland, ME 04102

 

7. Mt. Vernon Terminal, NY

40 Canal Street

Mt. Vernon, NY 10550

 

8. Oswego Terminal, NY

One West Van Buren Street

Oswego, NY 13126

 

9. Providence Terminal, RI

144 Allens Avenue

Providence, RI 02903

 

10. Quincy Terminal, MA

728 Southern Artery

Quincy, MA 02169

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

11. River Road Terminal, NH

372 Shattuck Way

Newington, NH 03801

 

12. Searsport Terminal, ME

P.O. Box 435

Mack Point – Trundy Road

Searsport, ME 04974

 

13. South Portland Terminal, ME

59 Main Street

South Portland, ME 04106

 

14. Stamford Terminal, CT

10 Water Street

Stamford, CT 06902

 

15. TRT Terminal (Leasehold)1

740 Washington Street

Quincy, MA 02169

 

1  Leasehold mortgage will not be delivered as of the Closing Date; Borrower
will use commercially reasonable efforts to deliver the leasehold mortgage.

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

Schedule 2.2

to Credit Agreement

WIRE INSTRUCTIONS FOR WORKING CAPITAL FACILITY LOANS, ACQUISITION

FACILITY LOANS AND SWING LINE LOANS

Sprague Operating Resources LLC

Bank: JP Morgan Chase Bank

ABA: 021000021

Reference: Sprague Operating Resources LLC

Account #: 799760913

Swift: CHASUS33

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

Schedule 3.1

to Credit Agreement

EXISTING WORKING CAPITAL FACILITY LETTERS OF CREDIT

 

Issuing Bank

   Amount     

Issue Date

  

Expiration Date

Societe Generale

   $ 25,830,000       10/23/2013    11/25/2013

Societe Generale

   $ 9,713,000       10/01/2013    11/01/2013

Societe Generale

   $ 3,458,625.63       10/21/2013    11/21/2013

Societe Generale

   $ 8,242,500       10/25/2013    11/25/2013

Societe Generale

   $ 3,800,000       10/25/2013    11/25/2013

Societe Generale

   $ 3,458,301       10/25/2013    11/25/2013

BNP Paribas

   $ 500,000       06/14/2010    09/30/2014

BNP Paribas

   $ 3,000,000       06/09/2010    11/30/2013

BNP Paribas

   $ 180,000       04/22/2011    02/28/2014

BNP Paribas

   $ 4,600,000       02/04/2013    03/31/2014

BNP Paribas

   $ 500,000       02/28/2013    05/31/2014

BNP Paribas

   $ 1,100,000       06/01/2010    09/05/2014

BNP Paribas

   $ 1,050,000       06/16/2010    01/31/2014

BNP Paribas

   $ 75,000       04/02/2012    01/31/2014

BNP Paribas

   $ 146,000       07/09/2010    04/30/2014

BNP Paribas

   $ 142,000       08/27/2010    04/30/2014

BNP Paribas

   $ 50,000       07/09/2010    04/30/2014

BNP Paribas

   $ 1,035,000       06/08/2010    05/31/2014

BNP Paribas

   $ 75,000       07/08/2010    07/08/2014

BNP Paribas

   $ 16,000       10/04/2012    09/30/2014

BNP Paribas

   $ 15,000       10/04/2012    09/30/2014

BNP Paribas

   $ 500,000       06/23/2010    07/31/2014

BNP Paribas

   $ 559,616       08/11/2010    09/30/2014

Natixis

   $ 3,478,750       12/20/2010    12/28/2013

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

Schedule 3.2

to Credit Agreement

EXISTING ACQUISITION FACILITY LETTERS OF CREDIT

None.

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

Schedule 5.1(c)

to Credit Agreement

LIABILITIES

Sprague Operating Resources LLC Swap Exposures as of 10/28/2013:

 

     Net Interest Rate Swap Exposure  

Lender

   Asset      Liability  

RBS Citizens, N.A.

     —           (874,925 ) 

Wells Fargo Bank, N.A.

     —           (1,827,504 ) 

Santander Bank, N.A.

     —           (525,048 ) 

Natixis

     —           (654,970 ) 

Rabobank

     —           (316,627 ) 

Societe Generale

     —           (210,467 )    

 

 

    

 

 

 

Total

     —           (4,409,540 )    

 

 

    

 

 

 

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

Schedule 5.1(f)

to Credit Agreement

SALES, TRANSFERS, DISPOSITIONS AND ACQUISITIONS

I. As of the Closing Date, the Borrower is distributing to Axel Johnson, Inc. or
any Subsidiary thereof (excluding the Loan Parties) the assets set forth below:

 

  1. Employee-related assets, including office equipment, building and similar
overhead items

 

  2. IPO Distributed Assets

 

  3. 100% of the equity interests in Kildair Service Ltd.

 

  4. 100% of the equity interests in Ekotek Inc.

 

  5. 100% of the assets comprising the terminal located in Bucksport, Maine at
Route 15 River Road, Bucksport, ME 04416, Hancock County

 

  6. 100% of the assets comprising the terminal located in Portsmouth, New
Hampshire at 290 Gosling Road, Portsmouth, NH 03801, Rockingham County

 

  7. 100% of the assets comprising the terminal located in Oceanside, New York
at 3624 Hampton Road, Oceanside, NY 11572, Nassau County

 

  8. 100% of the equity interests in Sprague New York Properties LLC

 

  9. 100% of the equity interests in Sprague Massachusetts Properties LLC

 

  10. 100% of the assets comprising the terminal located in New Bedford,
Massachusetts at 30 Pine Street, New Bedford, Massachusetts, 02740, Bristol
County

 

  11. The note receivable for $71,600,0002 from Sprague Energy Canada, Ltd.
associated with its acquisition of equity interests in 9047-1137 Quebec Inc.
from Jean Delangis and Fiducie des Enfants Delangis.

II. Sprague Connecticut Properties LLC acquired the Bridgeport Terminal,
consisting of real and personal property located at 250 Eagles Nest Road,
Bridgeport, CT 06607 and 241 Seaview Avenue Rear, Bridgeport, CT 06607, as well
as related contracts and permits, in connection with the Purchase and Sale
Agreement, dated as of July 30, 2013, between Sprague Connecticut Properties LLC
and Motiva Enterprises LLC.

 

2  Amount including accrued interest as of July 31, 2013.

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

Schedule 5.4

to Credit Agreement

CONSENTS AND AUTHORIZATIONS

 

1. The filing of a Mortgage and Security Agreement in the applicable
jurisdiction for each Mortgaged Property listed on Schedule 1.1(E).

 

2. Payment of recording taxes in the State of New York.

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

Schedule 5.9

to Credit Agreement

INTELLECTUAL PROPERTY

None.

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

Schedule 5.15

to Credit Agreement

SUBSIDIARIES AND GENERAL PARTNER OF THE MLP

Subsidiaries:

 

Name

  

Form of

Organization

  

Jurisdiction of

Organization

   Total
Number of
Issued
Shares or
Other
Interests of
Capital
Stock    Total Number of
Outstanding
Shares or Other
Interests of
Capital Stock    Classes
of
Capital
Stock    Total
Number of
Issued
Shares or
Other
Interests of
Capital
Stock  of
Each Class    Total Number of
Outstanding
Shares or Other
Interests of
Capital Stock of
Each  Class

Sprague Operating Resources LLC

   Limited Liability Company    Delaware    N/A    N/A    N/A    N/A    N/A

Sprague Energy Solutions Inc.

   Corporation    Delaware    1,000    1,000    1    1,000    1,000

Sprague Terminal Services LLC

   Limited Liability Company    Delaware    N/A    N/A    N/A    N/A    N/A

Sprague Resources LP

   Limited Partnership    Delaware    N/A    N/A    N/A    N/A    N/A

Sprague Connecticut Properties LLC

   Limited Liability Company    Delaware    N/A    N/A    N/A    N/A    N/A

General Partnership Interests of the MLP:

Sprague Resources GP LLC owns 100% of the general partnership interests of
Sprague Resources LP.

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

Schedule 5.16

to Credit Agreement

FILING JURISDICTIONS

UCC-1 Financing Statements:

 

  1. Sprague Operating Resources LLC: Secretary of State of the State of
Delaware

 

  2. Sprague Energy Solutions Inc.: Secretary of State of the State of Delaware

 

  3. Sprague Terminal Services LLC: Secretary of State of the State of Delaware

 

  4. Sprague Connecticut Properties LLC: Secretary of State of the State of
Delaware

 

  5. Sprague Resources LP: Secretary of State of the State of Delaware

Copyright Security Interest Filings:

 

  1. Sprague Operating Resources LLC: United States Copyright Office

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

Schedule 5.19

to Credit Agreement

INSURANCE

1. Commercial General Liability

 

Carrier:    Zurich Policy Term:    June 1, 2013 to June 1, 2014 Policy No.:   
GLO 6516297 22 Coverages:    To pay those sums that the insured becomes legally
obligated to pay to third parties because of Bodily Injury, Property Damage,
Personal Injury and Advertising Injury resulting from a covered loss and
occurring during the policy period. Policy Limit:    $4,000,000 General
Aggregate Limit (Other than Products / Completed Operations)    2,000,000
Products/Completed Operations Aggregate Limit    2,000,000 Each Occurrence   
2,000,000 Each Person – Personal & Advertising Injury Limit    1,000,000 Any One
Fire – Damages to Premises Rented to You    10,000 Any One Person – Medical
Expense Limit    1,000,000 General Aggregate – Employee Benefits Liability   
1,000,000 Each Employee – Employee Benefits Liability Deductibles:    $2,000,000

2. Automobile Liability

 

Carrier:    Zurich Policy Term:    June 1, 2013 to June 1, 2014 Policy No.:   
BAP 6516296 22 Coverages:    To pay all sums the insured legally must pay as
damages because of third party bodily injury or third party property damage to
which this insurance applies, caused by an accident and resulting from the
ownership, maintenance or use of a covered auto. Physical damage to the vehicle
is self-insured. Policy Limit:    $2,000,000 Bodily Injury & Property Damage –
Coverage Symbol “1” – Combined Single Limit Bodily Injury & Property Damage
Personal Injury Protection – Coverage Symbol “5” – Minimum limits required by
law

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

   Uninsured Motorists – Coverage Symbol “6” – Minimum limits required by law
Underinsured Motorists – Coverage Symbol “6” – Minimum limits required by law
Deductible:    $250,000 Per Occurrence

3. Workers’ Compensation & Employer’s Liability

 

Carrier:    Zurich Policy Term:    June 1, 2013 to June 1, 2014 Policy No.:   
WC 6756088 21 (Deductible – All other States)    WC 6516131 23 (Retro – NJ, WI,
MA) Coverages:    Workers’ Compensation provides statutory medical and indemnity
benefits to employees of the Named Insured arising out of bodily injury
resulting from an accident or disease caused or aggravated by conditions of
employment occurring during the policy period. Employer’s Liability provides
protection for the employer from employee liability claims for injuries not
covered by statutory Workers’ Compensation Laws. Policy Limit:    Coverage A:
Workers Compensation    Statutory Benefits    Coverage B: Employer’s Liability
   $5,000,000 Each Accident – Bodily Injury by Accident    5,000,000 Policy
Limit – Bodily Injury by Disease    5,000,000 Each Employee – Bodily Injury by
Disease Deductible:    $500,000

4. Umbrella Liability

 

Carrier:    Zurich Policy Term:    June 1, 2013 to June 1, 2014 Policy No.:   
AUC 948585502 Coverages:    To pay on behalf of the insured, damages the insured
becomes legally obligated to pay by reason of liability imposed by law because
of bodily injury, property damage, personal injury or advertising injury
resulting from a covered loss and occurring during the policy period. Coverage
applies excess of primary liability policies, or excess of self-insured
retentions where no primary liability coverage exists, unless otherwise
excluded. Limits:    $10,000,000 Per Occurrence    10,000,000 Products Completed
Operations Aggregate   

10,000,000 General Aggregate

250,000 Casualty Business Crisis Aggregate Limit

Retention:    $25,000

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

5. Excess Bumbershoot Liability

 

Carrier:    Lloyd’s of London Policy Term:    June 1, 2013 to June 1, 2014
Policy No.:    PP1308095 Coverages:    This policy is to indemnify the insured
in respect of their legal and or contractual liability to third parties which
they may incur by reason of their operations as port authorities and/or terminal
operators and/or any companies as presently or hereinafter constituted over
which the insured exercises active management control and as per underlying
policy(ies) Limits:    $100,000,000 Each Occurrence    100,000,000 Aggregate
Where Applicable    Excess of underlying insurance and Self Insured Retentions
as listed on the lead umbrella and terminal operator’s legal liability policies.
Retention:    $25,000 Any One Accident

6. Excess Bumbershoot Liability

 

Carrier:    Lloyd’s of London Policy Term:    June 1, 2013 to June 1, 2014
Policy No.:    PP1308096 Coverages:    This policy is to indemnify the insured
in respect of their legal and or contractual liability to third parties which
they may incur by reason of their operations as port authorities and/or terminal
operators and/or any companies as presently or hereinafter constituted over
which the insured exercises active management control and as per underlying
policy(ies) Limits:    $100,000,000 Each Occurrence    100,000,000 Aggregate
Where Applicable    Excess of $100,000,000 which is in turn excess of underlying
insurance and Self Insured Retentions as listed on the lead umbrella and
terminal operator’s legal liability policies. Retention:    Nil

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

7. Marine Cargo / Stockthroughput

 

Carrier:    National Union Fire Insurance Company of Pittsburgh PA Policy Term:
   June 1, 2013 – June 1, 2014 (continuous until cancelled) Policy No.:   
051767769 Coverage:    Voyage: To cover all Shipments and / or Storage Risks
made by, for, or to the Assured for their own account as Principal, or as Agents
for others and in which they have an insurable interest; or for the account of
others from whom instructions to insure have been received prior to any known or
reported loss, damage, or accident, and prior to arrival of vessel. Conveyances:
   By all conveyances. Limits:    $30,000,000 Any one vessel or aircraft   
3,000,000 Any one vessel subject to an On-Deck bill of lading    17,500,000 Any
one steel barge, any one tow    1,000,000 Any one inland transit (not
connecting) conveyance    Per Schedule Per any one named Warehouse location on
file with these Assurers    1,000,000 Per any one unnamed Warehouse location
(not on file with these Assurers), but subject to an aggregate limit of
$5,000,000 and one occurrence.    15,000,000 Sub-limit flood, earthquake, earth
subsidence, and Named Windstorm per location Deductibles:    $50,000 Per
Occurrence each warehouse or oil storage tank    $2,500 Any one occurrence or
series of occurrences arising out of one event, with the exception of General
Averages and Salvage charges and total loss which are payable in full

8. Terminal Operators Legal Liability

 

Carrier:    Starr Indemnity & Liability Company Policy Term:    June 1, 2013 –
June 1, 2014 Policy No.:    MASILNY000343-13 Coverage:    To cover 100% interest
in the legal and /or contractual liability, subject to contract approval, of the
Assured arising out of the premises and/or operation, including products hazard
or completed operations hazard and independent contractors, of scheduled US
locations only. Including worldwide any associated operations, including
products and completed operations. Limits:    $3,000,000 Per Occurrence, CSL,
Inclusive of Legal Fees Deductibles:    $75,000 Per Occurrence

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

9. Aviation Products

 

Carrier:    Allianz Global Risk US Insurance Company Policy Term:    June 1,
2013 – June 1, 2014 Policy No.:    A1GA000544213AM Coverage:    Bodily Injury or
property damage arising out of the possession, use, consumption or handling of
any goods or products manufactured, constructed, altered, repaired, serviced,
treated, sold, supplied or distributed by the Insured or his employees after
such Aviation goods or Aviation products have ceased to be in the possession or
under the control of the Insured. Limits:    $2,000,000 Aircraft Liability   
2,000,000 War-Risk Liability Write-back    5,000 Medical Payments – Per
Passenger Deductible:    Nil

10. Aircraft Products / Completed Operations & Grounding Liability

 

Carrier:    Allianz Global Risk US Insurance Company Policy Term:    June 1,
2013 – June 1, 2014 Policy No.:    A1PR000124113AM Coverage:    Bodily Injury or
property damage arising out of the products hazard or the completed operations
hazard. Loss of use of completed aircraft occurring after delivery to and
acceptance for flight operations by a purchaser or operator of such aircraft,
and caused by a grounding following an occurrence arising out of the products or
completed operations hazard. Limits:    $100,000,000 Bodily Injury or Property
Damage per Occurrence    $100,000,000 Each Grounding and Annual Aggregate   
$100,000,000 Combined Aggregate Deductible:    Nil

11. Pollution Legal Liability

 

Carrier:    Navigators Specialty Insurance Company Policy Term:    June 1, 2012
– June 1, 2015 Policy No.:    CH12ECP0A2GDFNC

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

Coverage:    Third-party claims for on-site and off-site bodily injury, property
damage or clean-up costs for non-owned locations. Pollution conditions resulting
from transported cargo. Limits:    $5,000,000 Each Incident Limit    $6,000,000
Aggregate Deductible:    $100,000 Each Incident

12. Underground Storage Tank – Run-Off

 

Carrier:    Zurich Policy Term:    October 1, 2010 to April 1, 2014 Policy No.:
   USC 9425950 01 Coverages:    Protects owners and operators of underground
storage tanks (USTs) by providing financial resources to pay for cleanup of
spills and/or leaks from their tanks. Limits:    $2,000,000 Each Claim   
2,000,000 Total for All Claims Deductibles:    $5,000 Each Claim

13. Business Travel Accident Program (Sprague Operating Resources, LLC)

 

Carrier:    Zurich Policy Term:    January 1, 2013 to January 1, 2014 Policy
No.:    GTU 5464774 Eligible Classes:    Class I: All employees of the
Policyholder not included in any other Class. 5 x Base Annual Earnings to a
maximum of $500,000. Permanent Total Disability Benefit = 5 x base Annual
Earnings to a maximum of $500,000.    Class II: Outside Directors, Trustees and
Consultants on file with the Policyholder. $250,000. Enhanced Benefits:    All
Classes      Higher Education Benefit    All Classes      Accidental
Dismemberment    All Classes      Day Care Benefit    All Classes      Felonious
Assault Benefit    All Classes      Seat Belt Benefit    Class I &
II      Family Traveling With Employee on Business / Relocation Trips    All
Classes      Permanent and Total Disability Benefit

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

   All Classes      Extra-Ordinary Commutation Coverage    All Classes
     Travel Assistance Coverage   

All Classes      24 Hour Accident Protection While on Business Trip

Excluding Policyholder Owned or Leased Aircraft H-14

14. Property Insurance

 

Carrier:    Zurich American Insurance Policy Term:    June 1, 2013 to June 1,
2014 Policy #:    OGR 9245255-01

Coverages: Policy insures against direct physical loss of or damage caused by a
Covered Cause of Loss to

Covered Property, at an Insured Location.

Policy Limit: $50,000,000 total for all coverages

Sublimits:

 

$4,000,000    BUSINESS INTERRUPTION $2,000,000    ACCOUNTS RECEIVABLE
$10,000,000    COMPUTER SYSTEMS DAMAGE - EDP $5,000,000    CONTINGENT BUSINESS
INTERRUPTION NAMED $2,500,000    CONTINGENT BUSINESS INTERRUPTION UNNAMED
$5,000,000 or 25% whichever is greater    DEBRIS REMOVAL NCP    DECONTAMINATION
COSTS NCP    DEFERRED PAYMENTS $500,000    ERRORS AND OMISSIONS $5,000,000   
EXPEDITING COSTS $2,000,000    FINE ARTS $100,000    FIRE DEPARTMENT SERVICE
CHARGES $7,500,000    INCREASED COST OF CONSTRUCTION $100,000    LAND AND WATER
CONTAMINANT CLEANUP, REMOVAL AND DISPOSAL in the Annual Aggregate. $500,000   
LAND IMPROVEMENTS NCP    MISCELLANEOUS PERSONAL PROPERTY $2,000,000   
MISCELLANEOUS UNNAMED LOCATIONS (Excluding Named Wind, Flood in Zones A, V and
their subdivisions and High Hazard EQ) $5,000,000    SERVICE INTERRUPTION (PD/BI
combined) NCP    PROFESSIONAL FEES: Plus 50% of the amount Recoverable under
this Coverage in excess of $0.00 up to $0.00 NCP    RADIOACTIVE CONTAMINATION
NCP    RESEARCH ANIMALS in excess of $0.00 NCP    TENANTS PROHIBITED ACCESS
$2,000,000    INLAND TRANSIT (PD Only - excluding Inventory and Stock)
$1,000,000    VALUABLE PAPERS NCP    NEW CONSTRUCTION OR ADDITIONS NCP    OFF
PREMISES STORAGE FOR PROPERTY UNDER CONSTRUCTION NCP    CURRENCY DEVALUATION

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

NCP    DIFFERENCE IN CONDITIONS/DIFFERENCE IN LIMITS <Country Limits> NCP   
FINANCIAL INTEREST OF THE FIRST NAMED INSURED NCP    TAX LIABILITY NCP   
TENANTS AND NEIGHBORS LIABILITY NCP    BREAKDOWN OF EQUIPMENT not to exceed:
$0.00 for AMMONIA CONTAMINATION, $0.00 for SPOILAGE $50,000,000   

EARTH MOVEMENT <in the annual aggregate> except:

-$20,000,000 New Madrid Earth Movement (annual aggregate)

-$100,000 California Earth Movement (annual aggregate)

$50,000,000   

FLOOD including Storm Surge <annual aggregate> except:

-$10,000,000 Flood Zones A & V including Storm Surge (annual aggregate)

$50,000,000   

Windstorm <annual aggregate>

-$20,000,000 Tier I or 2, Gulf Of Mexico and Atlantic Seaboard Wind (annual
aggregate)

$10,000,000    Extra Expense $2,000,000    Mobile Equipment $5,000,000    Newly
Acquired Locations –120 Days Reporting (Excluding Named Wind, Flood in Zones A,
V and their subdivisions and High Hazard EQ) $100,000    Pollution/Contamination
Clean-up (annual aggregate) $500,000    Rental expenses $1,000,000    Property
In the Course of Construction (PD Only) $500,000    Leasehold Interest $100,000
   Exhibitions $1,000,000    Loss Adjustment Expenses $10,000,000    Piers,
Docks and Wharves $500,000    Unintentional Errors and Omissions $100,000   
Royalties

Policy Deductibles:

$250,000 except:

$100,000 EDP Equipment

$100,000 Transit

$100,000 Mobile Equipment

$100,000 Cranes

5% TIV subject to minimum of $1,000,000 per location as respects High Hazard
Flood including Flood Zones A & V except:

5% TIV minimum of $2,000,000 as respects Flood at Oceanside

5% TIV minimum of $1,000,000 as respects Named Wind Storm or Wind related losses
in Tier 1 and 2 Counties GOM/Atlantic Seaboard

5% TIV minimum of $500,000 as respects CA EQ

2% TIV with a minimum of $500,000 as respects New Madrid EQ

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

Schedule 5.22

to Credit Agreement

ENVIRONMENTAL MATTERS

None.

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

Schedule 8.2

to Credit Agreement

EXISTING INDEBTEDNESS

Indebtedness pursuant to Lease and Purchase Option dated as of November 8, 2004
between Merrill Industries Inc., as lessor, and Sprague Operating Resources LLC,
as lessee, in an approximate principal amount equal to $3,514,355 as of
August 31, 2013.

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

Schedule 8.3

to Credit Agreement

EXISTING LIENS

 

Debtor

  

Secured Party

  

Description of Collateral

   Filing Date   

Jurisdiction

Sprague Operating Resources LLC (f.k.a. Sprague Energy Corp.)

   Cisco Systems Capital Corporation    Certain software, appliances and systems
provided by Cisco    8/3/2009    Delaware

Sprague Operating Resources LLC

   De Lage Landen Financial Services    Hercules trackmobile rail car
movers, S/N LGN993160413    5/22/2013    Delaware

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

Schedule 8.8

to Credit Agreement

INVESTMENTS

Promissory Note dated as of March 21, 2009 by Patriot Fuels, Inc., as debtor and
Sprague Operating Resources LLC as payee, in an outstanding amount of $1,124,482
as of August 31, 2013.

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

Schedule 8.10

to Credit Agreement

TRANSACTIONS WITH AFFILIATES

1. Services Agreement, dated on or about the Closing Date, by and among Sprague
Resources GP LLC, Sprague Resources LP, Sprague Resources Holdings LLC and
Sprague Energy Solutions Inc.

2. Contribution, Conveyance and Assumption Agreement, dated on or about the
Closing Date, by and among Sprague Resources LP, Sprague Resources GP LLC, Axel
Johnson Inc., Sprague Resources Holdings LLC, Sprague Operating Resources LLC,
Sprague International Properties LLC, Sprague Massachusetts Properties LLC and
Sprague Canadian Properties LLC and the other transfer documents related
thereto.

3. First Amended and Restated Agreement of Limited Partnership of Sprague
Resources LP, dated on or about the Closing Date.

4. Terminal Operating Agreement, dated on or about the Closing Date, by and
among Sprague Massachusetts Properties LLC, Sprague Resources Holdings LLC and
Sprague Operating Resources LLC.

5. Omnibus Agreement, dated on or about the Closing Date, by and among Axel
Johnson Inc., Sprague Resources Holdings LLC, Sprague Resources LP and Sprague
Resources GP LLC.

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

Exhibit A-1

to Credit Agreement

FORM OF WORKING CAPITAL FACILITY NOTE

THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.

 

$                    New York, New York                         , 201    

FOR VALUE RECEIVED, SPRAGUE OPERATING RESOURCES LLC, a Delaware limited
liability company (the “Borrower”), hereby unconditionally promises to pay
to                         or its registered assigns (the “Working Capital
Facility Lender”), at the times specified in the Credit Agreement (referred to
below), in lawful money of the United States of America, in immediately
available funds, the principal amount of                     , or such lesser
principal amount of Working Capital Facility Loans made by the Working Capital
Facility Lender as may then be outstanding from time to time under the Credit
Agreement.

The undersigned further agrees to pay interest in like money on the unpaid
principal amount hereof from time to time commencing from the date of
disbursement at the rates per annum and on the dates as provided in the Credit
Agreement until paid in full (both before and after judgment).

The holder of this Note is authorized to record on the schedules attached hereto
and made a part hereof, the date, Type and amount of each Working Capital
Facility Loan made by the Working Capital Facility Lender pursuant to
Section 2.1 of the Credit Agreement, each Conversion of all or a portion thereof
to another Type pursuant to Section 4.3 of the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof. Each such recordation
shall constitute prima facie evidence of the accuracy of the information so
recorded; provided that, failure of the Working Capital Facility Lender to make
any such recordation (or any error in such recordation) shall not affect the
obligations of the Borrower under this Note or under the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement, dated as of
October 30, 2013 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Sprague Operating Resources LLC, as
Borrower, the Lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, and the other agents parties thereto, and the
Working Capital Facility Lender is entitled to the benefits thereof, is secured
as provided for therein, and is subject to optional and mandatory prepayment in
whole or in part as provided therein. Capitalized terms used herein but not
defined herein shall have the meanings provided in the Credit Agreement.

Upon the occurrence of any one or more of the Events of Default, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.

The Borrower expressly waives diligence, presentment, protest, demand and other
notices of any kind, except as required by the Credit Agreement.

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

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT
AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE
WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 11.7 OF THE CREDIT
AGREEMENT.

[SIGNATURE PAGE FOLLOWS]

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

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

 

SPRAGUE OPERATING RESOURCES LLC By:       Name:   Title:

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

Schedule A

to Working Capital Facility Note

LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS

 

Date

   Amount of
Base Rate Loans    Amount
Converted to
Base Rate Loans    Amount of
Principal of
Base Rate Loans
Repaid    Amount of Base Rate
Loans Converted to
Eurodollar Loans    Unpaid Principal
Balance
of Base Rate Loans    Notation
Made By

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

Schedule B

to Working Capital Facility Note

LOANS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS

 

Date

  

Amount of

Eurodollar

Loans

   Amount Converted
to
Eurodollar Loans    Amount of Principal of
Eurodollar Loans
Repaid    Amount of Eurodollar
Loans Converted to
Base Rate Loans    Unpaid Principal
Balance
of Eurodollar
Loans    Notation Made
By

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

Exhibit A-2

to Credit Agreement

FORM OF SWING LINE NOTE

THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.

 

$                    New York, New York                         , 201    

FOR VALUE RECEIVED, SPRAGUE OPERATING RESOURCES LLC, a Delaware limited
liability company (the “Borrower”), hereby unconditionally promises to pay to
JPMorgan Chase Bank, N.A. or its registered assigns (the “Swing Line Lender”),
at the times specified in the Credit Agreement (referred to below), in lawful
money of the United States of America, in immediately available funds, the
principal amount of                         , or such lesser principal amount of
Swing Line Loans as may then be outstanding from time to time under the Credit
Agreement.

The undersigned further agrees to pay interest in like money on the unpaid
principal amount hereof from time to time commencing from the date of
disbursement at the rates per annum and on the dates as provided in the Credit
Agreement until paid in full (both before and after judgment).

The holder of this Note is authorized to record on the schedules attached hereto
and made a part hereof, the date, and amount of each Swing Line Loan made by the
Swing Line Lender pursuant to Section 2.3 of the Credit Agreement, and the date
and amount of each payment or prepayment of principal thereof. Each such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded; provided that, failure of the Swing Line Lender to make
any such recordation (or any error in such recordation) shall not affect the
obligations of the Borrower under this Note or under the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement, dated as of
October 30, 2013 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Sprague Operating Resources LLC, ,
as Borrower, the Lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, and the other agents parties thereto, and the
Swing Line Lender is entitled to the benefits thereof, is secured as provided
for therein, and is subject to optional and mandatory prepayment in whole or in
part as provided therein. Capitalized terms used herein but not defined herein
shall have the meanings provided in the Credit Agreement.

Upon the occurrence of any one or more of the Events of Default, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.

The Borrower expressly waives diligence, presentment, protest, demand and other
notices of any kind, except as required by the Credit Agreement.

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

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT
AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE
WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 11.7 OF THE CREDIT
AGREEMENT.

[SIGNATURE PAGE FOLLOWS]

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

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

 

SPRAGUE OPERATING RESOURCES LLC By:       Name:   Title:

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

Schedule A

to Swing Line Note

LOANS AND REPAYMENTS OF SWING LINE LOANS

 

Date

   Amount of
Swing Line Loans    Amount of
Principal of
Swing Line Loans
Repaid    Unpaid Principal
Balance
of Swing Line Loans    Notation
Made By

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

Exhibit A-3

to Credit Agreement

FORM OF ACQUISITION FACILITY NOTE

THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.

 

$                    New York, New York                         , 201    

FOR VALUE RECEIVED, SPRAGUE OPERATING RESOURCES LLC, a Delaware limited
liability company (the “Borrower”), hereby unconditionally promises to pay to
                            or its registered assigns (the “Acquisition Facility
Lender”), at the times specified in the Credit Agreement (referred to below), in
lawful money of the United States of America, in immediately available funds,
the principal amount of                             , or such lesser principal
amount of Acquisition Facility Loans made by the Acquisition Facility Lender as
may then be outstanding from time to time under the Credit Agreement.

The undersigned further agrees to pay interest in like money on the unpaid
principal amount hereof from time to time commencing from the date of
disbursement at the rates per annum and on the dates as provided in the Credit
Agreement until paid in full (both before and after judgment).

The holder of this Note is authorized to record on the schedules attached hereto
and made a part hereof, the date, Type and amount of each Acquisition Facility
Loan made by the Acquisition Facility Lender pursuant to Section 2.4 of the
Credit Agreement, each Conversion of all or a portion thereof to another Type
pursuant to Section 4.3 of the Credit Agreement and the date and amount of each
payment or prepayment of principal thereof. Each such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded;
provided that, failure of the Acquisition Facility Lender to make any such
recordation (or any error in such recordation) shall not affect the obligations
of the Borrower under this Note or under the Credit Agreement.

This Note is one of the Notes referred to in the Credit Agreement, dated as of
October 30, 2013 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Sprague Operating Resources LLC, as
Borrower, the Lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, and the other agents parties thereto, and the
Acquisition Facility Lender is entitled to the benefits thereof, is secured as
provided for therein, and is subject to optional and mandatory prepayment in
whole or in part as provided therein. Capitalized terms used herein but not
defined herein shall have the meanings provided in the Credit Agreement.

Upon the occurrence of any one or more of the Events of Default, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.

The Borrower expressly waives diligence, presentment, protest, demand and other
notices of any kind, except as required by the Credit Agreement.

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

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT
AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE
WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 11.7 OF THE CREDIT
AGREEMENT.

[SIGNATURE PAGE FOLLOWS]

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

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

 

SPRAGUE OPERATING RESOURCES LLC By:       Name:   Title:

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

Schedule A

to Acquisition Facility Note

LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS

 

Date

  

Amount of

Base Rate Loans

   Amount
Converted to
Base Rate Loans    Amount of
Principal of
Base Rate Loans
Repaid    Amount of Base Rate
Loans Converted to
Eurodollar Loans    Unpaid Principal
Balance
of Base Rate Loans    Notation
Made By

 

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

Schedule B

to Acquisition Facility Note

LOANS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS

 

Date

  

Amount of

Eurodollar

Loans

   Amount Converted
to
Eurodollar Loans    Amount of Principal of
Eurodollar Loans
Repaid    Amount of Eurodollar
Loans Converted to
Base Rate Loans    Unpaid Principal
Balance
of Eurodollar
Loans    Notation Made
By

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

Exhibit B

to Credit Agreement

SECURITY AGREEMENT

SECURITY AGREEMENT, dated as of October 30, 2013, made by each party listed on
Schedule I hereto (together with each Person which may, from time to time,
become party hereto as a Grantor, each a “Grantor”, collectively, the
“Grantors”), in favor of JPMORGAN CHASE BANK, N.A., as Administrative Agent (,
in such capacity, the “Administrative Agent”) for the Secured Parties as
described and defined below.

RECITALS

WHEREAS, pursuant to the Credit Agreement, dated as of October 30, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among SPRAGUE OPERATING RESOURCES LLC, a Delaware limited
liability company (the “Borrower”), the several banks and other financial
institutions or entities from time to time parties thereto (the “Lenders”), the
Administrative Agent and the other agents parties thereto, the Lenders have
severally agreed to make loans to and participate in letters of credit issued on
behalf of, and certain Lenders (the “Issuing Lenders”) have agreed to issue
letters of credit for the account of, the Borrower upon the terms and subject to
the conditions set forth therein.

NOW, THEREFORE, in consideration of the premises and to induce the Lenders and
the Administrative Agent to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrower, and the
Issuing Lenders to issue their letters of credit, under the Credit Agreement,
and for other good, fair and valuable consideration and reasonably equivalent
value, the receipt and sufficiency of which are hereby acknowledged by each
Grantor, each Grantor hereby agrees with the Administrative Agent, on behalf of
and for the ratable benefit of the Secured Parties, as follows:

1. Defined Terms.

(a) Unless otherwise defined herein, capitalized terms which are defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement; the following terms which are defined in the UCC are used
herein as so defined: Accounts, Certificated Security, Chattel Paper, Commercial
Tort Claims, Commodity Account, Documents, Equipment, Farm Products, General
Intangibles, Goods, Instruments, Inventory, Investment Property,
Letter-of-Credit Rights, Proceeds, Securities Account and Supporting
Obligations; and the following terms shall have the following meanings:

“Account Control Agreement”: (i) with respect to any Deposit Account, a control
agreement in a form reasonably satisfactory to the Administrative Agent, as
amended, supplemented or otherwise modified from time to time; (ii) with respect
to any Securities Account, a control agreement in a form reasonably satisfactory
to the Administrative Agent, as amended, supplemented or otherwise modified from
time to time; and (iii) with respect to any Commodity Account, a control
agreement in a form reasonably satisfactory to the Administrative Agent, as
amended, supplemented or otherwise modified from time to time.

“Account Transaction”: as defined in Section 5(j).

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“Administrative Agent”: as defined in the Preamble hereto.

“Bankruptcy Code”: the provisions of Title 11 of the United States Code, 11
U.S.C. §§101 et seq.

“Bankruptcy Law”: the Bankruptcy Code and any other federal, state or foreign
bankruptcy, insolvency, receivership or similar law affecting creditors’ rights
generally.

“Borrower”: as defined in the Recitals hereto.

“Cash Management Account”: a Controlled Account maintained at a Cash Management
Bank.

“Collateral”: as defined in Section 2 of this Security Agreement.

“Collateral Account”: any collateral account established by the Administrative
Agent as provided in Section 3(c) or 8 of this Security Agreement.

“Contract”: any contract to which a Pledgor is a party, other than the Loan
Documents.

“Controlled Account”: each Pledged Account that is subject to an Account Control
Agreement.

“Copyrights”: as defined in the definition of “Intellectual Property” in this
Section 1(a).

“Credit Agreement”: as defined in the Recitals hereto.

“Deposit Account”: a “deposit account” as defined in the Uniform Commercial Code
of any applicable jurisdiction and, in any event, including, without limitation,
any demand, time, savings, passbook or like account maintained with any
depositary institution.

“DIP Financing”: as defined in Section 10(c)(ii).

“Enforcement Actions”: as defined in Section 9(b).

“Excluded Assets”: (i) Capital Stock of Exempt CFCs (or of any Subsidiaries of
Exempt CFCs) of any Grantor not pledged or required to be pledged pursuant to
the Pledge Agreement; (ii) any property to the extent that such grant of a
security interest is prohibited by any Requirements of Law, requires a consent
not obtained of any Governmental Authority or is prohibited by, or constitutes a
breach or default under or results in the termination of or requires any consent
not obtained under, any contract, license, agreement, instrument or other
document evidencing or giving rise to such property or, in the case of any
Investment Property (other than any of the foregoing issued by a Grantor), any
applicable shareholder or similar agreement, except to the extent that such
Requirement of Law or the term in such contract, license, agreement, instrument
or other document or shareholder or similar agreement providing for such
prohibition, breach, default or termination or requiring such consent is
ineffective under applicable law; (iii) any assets that are subject to a
purchase money Lien or capital lease permitted under the Credit Agreement to the
extent the documents relating to such purchase money Lien or capital lease do
not permit such assets to be subject to the security interests created hereby;
(iv) the Grantors’ office space leased in White Plains, New York, Lawrence, New
York and Portsmouth, New Hampshire; (v) the Newington Electric Pipeline;
(vi) Accounts Receivable included in the IPO Distributed Assets; and (vii) the
Excluded Accounts.

 

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“FERC Contract Collateral”: contracts of any Grantor and the books and records
related thereto, in each case, that constitute Collateral, that, by their
nature, require a filing with the FERC (whether such filing is made for notice
purposes only or is intended to receive acceptance by FERC of such filing or
approval by FERC of the requests set forth therein) in order for the
Administrative Agent to be able to exercise the remedies set forth in Section 9.

“FERC Sub-Agent”: as defined in Section 11(a).

“Grantors”: as defined in the Preamble hereto.

“Grantor’s Intellectual Property”: at any time, with respect to any Grantor, all
Intellectual Property used (but not owned) or licensed by such Grantor at such
time.

“Incidental Rights”: (a) all books and records relating to the Collateral,
(b) all indemnities, guaranties or warranties relating to any type of the
Collateral to the extent a security interest is permitted to be granted therein
pursuant to the UCC and (c) all governmental filings, permits, approvals or
licenses relating to the ownership, use or occupancy of the Inventory that
constitutes Collateral to the extent that (i) a security interest may be granted
therein under applicable Law, (ii) the granting of a security interest therein
would not result in the violation, termination, suspension or limitation thereof
or otherwise violate applicable Law and (iii) the granting of a security
interest therein would not require the prior approval of or prior notice to any
Governmental Authority under applicable Law, which notice or approval has not
been made or obtained.

“Insolvency Proceeding”: as to any Grantor, any of the following: (a) any case
or proceeding with respect to such Person under any Bankruptcy Law or any other
or similar proceedings seeking any stay, reorganization, arrangement,
composition or readjustment of the obligations and indebtedness of such Grantor,
(b) any proceeding seeking the appointment of any trustee, receiver, liquidator,
custodian or other insolvency official with similar powers with respect to such
Grantor or any of its assets, (c) any proceeding for liquidation, dissolution or
other winding up of the business of such Grantor, (d) any assignment for the
benefit of creditors or (e) any marshalling of assets of such Grantor.

“Intellectual Property”: all (i) trademarks, collective marks, certification
marks, trade names, corporate names, company names, business names, fictitious
business names, domain names, service marks, logos, brand names, trade dress,
designs and all other source identifiers, and the rights in any of the foregoing
which arise under applicable law, the goodwill of the business symbolized
thereby or associated with each of them, all registrations and applications in
connection therewith and all renewals of any of the foregoing, including
registrations and applications in the United States Patent and Trademark Office
or in any similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof (“Trademarks”);
(ii) inventions and discoveries whether patentable or not, invention
disclosures, patentable designs, all letters patent and design letters patent of
the United States or any other country and all applications for letters patent
or design letters patent of the United States or any other country, including
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country or
any political subdivision thereof, and all reissues, renewals, divisions,
continuations, continuations in part, revisions and extensions of any of the
foregoing (“Patents”); (iii) trade secrets or confidential information,
including confidential technical and business information, know-how, show-how,
processes, schematics, algorithms, concepts, ideas, inventions, business
methods, research and development, formulae, drawings, prototypes, models,
designs, customer and supplier information and lists, software, including source
code, object code, user interface, or other confidential proprietary
intellectual property, and all additions and improvements to, and books and
records describing or used in connection with, any of the foregoing (“Trade
Secrets”), (iv) all published and unpublished works of authorship whether
copyrightable or not,

 

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databases and other compilations of information, software, including source
code, object code, user interface, algorithms and the like, or other
confidential proprietary intellectual property, and all additions and
improvements to, and books and records describing or used in connection with,
any of the foregoing, including user manuals and other training documentation
related thereto, arising under the laws of the United States or any other
country, all registrations and applications for copyrights under the laws of the
United States or any other country, including registrations, recordings and
applications in the United States Copyright Office or in any similar office or
agency of the United States, any State thereof or any other country or any
political subdivision thereof, and all derivative works, renewals, extensions,
restorations and reversions of any of the foregoing (“Copyrights”), (v) all
other intellectual property to the extent entitled to legal protection as such,
including products under development and methodologies therefor, and (vi) all
claims for, and rights to sue for, past, present or future infringement,
misappropriation, dilution or other impairment or violation of any of the
foregoing and all income, royalties, damages and payments now or hereafter due
or payable with respect to any of the foregoing.

“Intellectual Property Licenses”: any and all agreements, whether written or
oral, to which any Grantor is a party and pursuant to which (i) any third Person
is granted a license in or right to use any Owned Intellectual Property, or
(ii) any Grantor is granted a license in or right to use any Intellectual
Property of a third Person.

“Issuing Lenders”: as defined in the Recitals hereto.

“Lenders”: as defined in the Recitals hereto.

“Material Contracts”: the contracts and agreements integral to operating the
business of the Loan Parties listed on Schedule IV hereto, as the same may from
time to time be amended, supplemented or otherwise modified, including, without
limitation, (i) all rights of any Grantor to receive moneys due and to become
due to it thereunder or in connection therewith, (ii) all rights of any Grantor
to damages arising out of, or for, breach or default in respect thereof and
(iii) all rights of any Grantor to perform and to exercise all remedies
thereunder.

“Owned Intellectual Property”: at any time, with respect to any Grantor, all
Intellectual Property owned by such Grantor at such time.

“Patents”: as defined in the definition of “Intellectual Property” in this
Section 1(a).

“Permitted Liens”: Liens permitted on the Collateral pursuant to the Credit
Agreement.

“Pledged Accounts”: all Commodity Accounts, Deposit Accounts (other than
Excluded Accounts) and Securities Accounts of any Grantor.

“Post-Petition Claims”: means interest, fees, costs, expenses and other charges
that, pursuant to the Loan Documents or any Cash Management Bank Agreement,
Commodity OTC Agreement or Financial Hedging Agreement, continue to accrue after
the commencement of an Insolvency Proceeding, to the extent such interest, fees,
expenses and other charges are allowed or allowable under Bankruptcy Law or in
an Insolvency Proceeding.

“Receivable”: any right to payment for goods sold, leased, licensed, assigned or
otherwise disposed of or for services rendered, whether or not such right is
evidenced by an Instrument or Chattel Paper and whether or not it has been
earned by performance (including, without limitation, any Account).

 

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“Security Agreement”: this Security Agreement, as amended, supplemented or
otherwise modified from time to time.

“Senior Obligations”: all Obligations other than the Subordinated Obligations.

“Senior Parties”: collectively, the Secured Parties, solely with respect to the
Senior Obligations.

“Subordinated Obligations”: the portion of the Obligations arising under any
(a) Cash Management Bank Agreement to a Qualified Cash Management Bank (other
than such Obligations to the extent secured by property of any Loan Party held
in a Cash Management Account with such Cash Management Bank), (b) Commodity OTC
Agreement to a Qualified Counterparty (other than such Obligations to the extent
secured by property of any Loan Party consisting of cash or short-term
investments deposited as collateral by such Loan Party with such Qualified
Counterparty pursuant to the terms of such Commodity OTC Agreement) or
(c) Financial Hedging Agreement to a Qualified Counterparty (other than such
Obligations to the extent secured by property of any Loan Party consisting of
cash or short-term investments deposited as collateral by such Loan Party with
such Qualified Counterparty pursuant to the terms of such Financial Hedging
Agreement).

“Subordinated Parties”: collectively, the Cash Management Banks and Qualified
Counterparties, solely in such capacities and with respect to Subordinated
Obligations.

“Trade Secrets”: as defined in the definition of “Intellectual Property” in this
Section 1(a).

“Trademarks”: as defined in the definition of “Intellectual Property” in this
Section 1(a).

“UCC”: the Uniform Commercial Code as from time to time in effect in the State
of New York or, as the context requires, any other applicable jurisdiction.

“Vehicles”: all cars, trucks, trailers, construction and earth moving equipment
and other vehicles owned by any Grantor and covered by a certificate of title
law of any State and all tires and other appurtenances to any of the foregoing.

(b) The words “hereof”, “herein”, “hereto” and “hereunder” and words of similar
import when used in this Security Agreement shall refer to this Security
Agreement as a whole and not to any particular provision of this Security
Agreement, and Section, Schedule, Annex and Exhibit references are to this
Security Agreement unless otherwise specified.

(c) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

2. Grant of Security Interest. As collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, each Grantor hereby grants to the
Administrative Agent on behalf and for the ratable benefit of the Secured
Parties a security interest in all of its right, title and interest in, to and
under all personal property and other assets, whether now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest (collectively, the
“Collateral”), including:

 

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  1. all Accounts;

 

  2. all Chattel Paper;

 

  3. all Commercial Tort Claims described on Schedule VI hereto (as such
Schedule VI may be from time to time supplemented pursuant to Section 5(l));

 

  4. all Commodity Accounts;

 

  5. all Contracts;

 

  6. all Deposit Accounts;

 

  7. all Documents;

 

  8. all Equipment;

 

  9. all General Intangibles;

 

  10. all Incidental Rights;

 

  11. all Instruments;

 

  12. all Intellectual Property and Intellectual Property Licenses;

 

  13. all Inventory;

 

  14. all Investment Property;

 

  15. all Letter-of-Credit Rights;

 

  16. all Payment Intangibles

 

  17. all Securities Accounts, and all Investment Property held therein or
credited thereto;

 

  18. all Vehicles;

 

  19. all Goods and other property not otherwise described above;

 

  20. all books and records pertaining to any and/or all of the Collateral; and

 

  21. to the extent not otherwise included, all Proceeds and products of any and
all of the foregoing, all Supporting Obligations in respect of any of the
foregoing, and all collateral security and guarantees given by any Person with
respect to any of the foregoing;

provided, that the Collateral shall not include the Excluded Assets.

3. Certain Matters Respecting Receivables and Material Contracts.

(a) Communication with and Notice to Receivable Obligors and Contracting
Parties. The Administrative Agent in its own name or in the name of any one or
more of the Grantors may, at any time in the course of any audit pursuant to
Section 7.9 of the Credit Agreement, in consultation with the Borrower,
communicate with Account Debtors on the Receivables and parties to the Material
Contracts to verify with them to the Administrative Agent’s satisfaction the
existence, amount and terms of any such Receivables or Material Contracts. Each
Grantor shall notify Account Debtors on the Receivables that the Receivables
have been collaterally assigned to the Administrative Agent on behalf and for
the ratable benefit of the Secured Parties.

(b) Analysis of Receivables. The Co-Collateral Agents shall have the right to
make test verifications of the Receivables in any manner and through any medium
that they reasonably consider advisable at any time during an Event of Default
or in the course of any audit pursuant to Section 7.9 of the Credit Agreement,
in consultation with the Borrower, and each Grantor shall furnish all such
assistance and information as the Co-Collateral Agents may require in connection
therewith. At any time during an Event of Default or in the course of any audit
pursuant to Section 7.9 of the Credit Agreement, in consultation with the
Borrower, upon the Co-Collateral Agents’ request and at the expense of the
relevant Grantor, such Grantor shall cause independent public accountants or
others satisfactory to the Administrative Agent to furnish to the Administrative
Agent reports showing reconciliations, aging and test verifications of, and
trial balances for, the Receivables.

 

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(c) Collections on Receivables. The Grantors shall instruct and shall use
commercially reasonable efforts to cause the Account Debtor on each Receivable
to remit all amounts owing in respect of such Receivable to a Cash Management
Account. Any amounts in respect of any Receivable collected by any Grantor,
(i) shall be promptly deposited by such Grantor in the exact form received, duly
endorsed by such Grantor to the Administrative Agent if required, in a Cash
Management Account, and (ii) until so turned over, shall be held by such Grantor
in trust for the Administrative Agent and the other Secured Parties, segregated
from other funds of such Grantor. All Proceeds constituting collections of
Receivables while held by the Administrative Agent (or by any Grantor in trust
for the Administrative Agent and the other Secured Parties) shall continue to be
collateral security for all of the Obligations and shall not constitute payment
thereof until applied as hereinafter provided. At the Administrative Agent’s
reasonable request, each Grantor shall deliver to the Administrative Agent all
original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to such Grantor’s Receivables, including, without
limitation, all original orders, invoices and shipping receipts.

4. Representations and Warranties. Each Grantor hereby represents and warrants
as of the Closing Date and each Borrowing Date that:

(a) Title; No Other Liens. Except for the Liens granted to the Administrative
Agent on behalf and for the ratable benefit of the Secured Parties pursuant to
this Security Agreement and the other Permitted Liens, such Grantor owns each
item of the Collateral pledged by it free and clear of any and all Liens or
claims of others. No security agreement, financing statement or other public
notice with respect to all or any part of the Collateral is on file or of record
in any public office, except such as may have been filed in favor of the
Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties, pursuant to this Security Agreement or as may be filed to secure a
Permitted Lien.

(b) Perfected First Priority Liens. Upon the filing of UCC-1 financing
statements in the applicable jurisdictions and, with respect to each Pledged
Account, upon the execution and delivery of an Account Control Agreement with
respect to such Pledged Account, the Liens granted pursuant to this Security
Agreement other than Liens on Vehicles shall constitute perfected Liens (with
respect to Intellectual Property, if and to the extent perfection may be
achieved by the filing of UCC-1 financing statements and/or security agreements
substantially in the form of Annex A, Annex B or Annex C, as applicable, in the
United States Patent and Trademark Office or the United States Copyright Office)
in favor of the Administrative Agent, on behalf and for the ratable benefit of
the Secured Parties, in the Collateral as collateral security for the
Obligations, which Liens will be prior to all other Liens on the Collateral of
such Grantor, subject to Permitted Borrowing Base Liens, Permitted Cash
Management Liens and First Purchaser Liens and which are enforceable as such
against all creditors of such Grantor and any Person purporting to purchase such
Collateral from such Grantor.

(c) Receivables. The amount represented by such Grantor to the Administrative
Agent from time to time as owing by each Account Debtor or by all Account
Debtors in respect of such Grantor’s Receivables will at such time be the
correct amount actually owing by such Account Debtor or Account Debtors
thereunder. No amount payable to such Grantor under or in connection with any
Receivable is evidenced by any Instrument or Chattel Paper in a principal amount
that is greater than $2,500,000 that has not been delivered to the
Administrative Agent. As of the Closing Date, the place where such Grantor keeps
its records concerning such Grantor’s Receivables is the address set forth
opposite such Grantor’s name on Schedule I.

(d) Material Contracts. No consent of any party (other than such Grantor) to any
Material Contract such Grantor is party to is required, or purports to be
required, in connection with the execution, delivery and performance of this
Security Agreement. Each Material Contract such Grantor is

 

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party to is in full force and effect and constitutes a valid and legally
enforceable obligation of the parties thereto, except as enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws affecting the enforcement of creditor’s rights
generally and general equitable principles (whether considered in a proceeding
in equity or at law). No consent or authorization of, filing with or other act
by or in respect of any Governmental Authority is required in connection with
the execution, delivery, validity or enforceability of any of the Material
Contracts such Grantor is party to by any party thereto other than those which
have been duly obtained, made or performed, are in full force and effect and do
not subject the scope of any such Material Contract to any material adverse
limitation, either specific or general in nature. Neither such Grantor nor (to
the best of such Grantor’s knowledge) any other party to any Material Contract
such Grantor is party to is in default or is likely to become in default in the
performance or observance or any of the terms thereof in any manner that, in the
aggregate, could reasonably be expected to have a Material Adverse Effect. Such
Grantor has fully performed all its material obligations under each Material
Contract such Grantor is party to. The right, title and interest of such Grantor
in, to and under each Material Contract such Grantor is party to are not subject
to any defense, offset, counterclaim or claim which could reasonably be expected
to have a Material Adverse Effect, nor have any of the foregoing been asserted
or alleged against such Grantor as to any such Material Contract. Such Grantor
has delivered to the Administrative Agent a complete and correct copy of each
Material Contract such Grantor is party to, including all amendments,
supplements and other modifications thereto. No amount payable to such Grantor
under or in connection with any Material Contract such Grantor is party to is
evidenced by any Instrument or Chattel Paper that has not been delivered to the
Administrative Agent.

(e) Inventory and Equipment. As of the Closing Date, the Inventory and the
Equipment of such Grantor as of the Closing Date are kept at the locations
listed on Schedule III hereto. All of said locations are owned by such Grantor
except for locations (i) which are leased by the Grantor as lessee and
designated in Part (b) of Schedule III and (ii) at which Inventory is held in a
public warehouse or is otherwise held by a bailee or on consignment or pursuant
to a throughput or other storage arrangement as designated in Part (c) of
Schedule III.

(f) Location. As of the Closing Date, such Grantor’s location (for purposes of
Section 9-307 of the UCC) is, and for the four (4) months preceding the Closing
Date has been, at the place specified for such Grantor on Schedule I. As of the
Closing Date, such Grantor, if not a “registered organization” as defined in the
UCC, is so designated on Schedule I and has only one place of business, the
location of which is at the place specified for such Grantor on Schedule I.

(g) Name; Type and Jurisdiction of Organization; Organizational and
Identification Number. As of the Closing Date, (i) the exact legal name of such
Grantor is as specified for such Grantor on Schedule I; (ii) such Grantor has
not done business under a previous name, assumed name or trade name or changed
its name in the prior twelve (12) months, except for the Borrower, which was
formerly known as Sprague Energy Corp and (iii) the type of entity of such
Grantor, its state of organization, the organizational number issued to it by
its state of organization and its federal employer identification number are set
forth on Schedule I.

(h) Farm Products. None of the Collateral of such Grantor constitutes, or is the
Proceeds of, Farm Products.

(i) Insurance Policies. As of the Closing Date, none of the Collateral of such
Grantor constitutes an interest or claim in or under any policy of insurance or
contract for annuity, except to the extent the same constitutes Proceeds.

 

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(j) Intellectual Property.

1. Schedule II is a true, correct and complete list setting forth all
Intellectual Property registered by, issued to, or applied for by each Grantor,
and, for each listed item (as applicable) the application or registration
numbers and dates, and the name of the current registered owner and/or registrar
of domain names;

2. Schedule II sets forth a true, correct and complete list of all material
written Intellectual Property Licenses of each Grantor and true and complete
copies of each such license have been made available by the Grantors to the
Administrative Agent prior to the Closing Date. Such Intellectual Property
Licenses are enforceable by the Grantors, either alone or in the aggregate, in
accordance with their terms, except to the extent that enforcement may be
limited by applicable law. No Grantor has in the past year received any written
notice alleging any breach or default by any Grantor of any such Intellectual
Property Licenses, and (A) no Grantor is in breach or default of any such
Intellectual Property Licenses, (B) to the knowledge of the Grantors, no
counterparty to any such Intellectual Property Licenses is in breach or default
of any such Intellectual Property Licenses and (C) no defense, offset, deduction
or counterclaim exists under any Intellectual Property License in favor of any
third party or such counterparty which could reasonably be expected to have a
Material Adverse Effect;

3. (A) all of each Grantor’s Owned Intellectual Property set forth on Schedule
II is subsisting, unexpired and has not been abandoned or allowed to lapse;
(B) to the knowledge of any Grantor, all of such Grantor’s Owned Intellectual
Property is valid and enforceable; and (C) no Grantor has within the past year
received any written notice or claim challenging the validity, enforceability,
registration or use of such Grantor’s Owned Intellectual Property;

4. all necessary registration, maintenance and renewal fees in connection with
such Grantor’s material Owned Intellectual Property have been paid and all
necessary documents and certificates in connection with such Grantor’s Owned
Intellectual Property have been filed with the relevant patent, copyright,
trademark or other authorities in the United States or applicable foreign
jurisdictions, as the case may be, for the purposes of prosecuting, maintaining
or renewing such Grantor’s Owned Intellectual Property;

5. the Grantors, either individually or in the aggregate, exclusively own free
and clear of all Liens (other than Permitted Liens) or have the right to use all
of each Grantor’s material Owned Intellectual Property. All of such Grantor’s
rights pertaining to such Grantor’s Intellectual Property shall survive
unchanged immediately following the applicable closing and the consummation of
the transactions contemplated by this Security Agreement;

6. with respect to Intellectual Property other than Patents, none of such
Grantor’s material Owned Intellectual Property nor the conduct of any Grantors’
business infringes, misappropriates, or otherwise violates Intellectual Property
owned by any third party. No Grantor has within the past three years received
any written notice or written claim asserting any of the foregoing;

7. with respect to Intellectual Property other than Patents, to the knowledge of
such Grantor, none of such Grantor’s material Owned Intellectual Property is
being infringed, misappropriated or otherwise violated by any third party. No
Grantor has (A) within the past three years received any written notice or
written claim asserting any of the foregoing, or (B) entered into any agreement
granting any other third party the exclusive right to bring infringement actions
with respect to, or otherwise exclusively to enforce rights with respect to, any
of such Grantor’s Owned Intellectual Property;

 

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8. to the knowledge of such Grantor, none of such Grantor’s Patents is being
infringed, misappropriated or otherwise violated by any third party and none of
such Grantor’s business infringes, misappropriates, or otherwise violates
Patents owned by any third party. No Grantor has within the past six years
received any written notice or written claim asserting infringement,
misappropriation, or other violations of the Intellectual Property owned by any
third party;

9. no holding, decision or judgment has been rendered by any Governmental
Authority which would limit, cancel, invalidate or question the validity of, or
any of such Grantor’s rights in, any of such Grantor’s Owned Intellectual
Property in any respect that could reasonably be expected to have a Material
Adverse Effect;

10. to the knowledge of any Grantor, no holding, decision or judgment has been
rendered by any Governmental Authority which would limit, cancel, invalidate or
question the validity of, or any of such Grantors’ rights in, any of such
Grantor’s Intellectual Property in any respect that could reasonably be expected
to have a Material Adverse Effect;

11. no action or proceeding is pending, or, to the knowledge of any Grantor,
threatened, on the date hereof (A) seeking to limit, cancel, invalidate or
question the validity of any of such Grantor’s material Owned Intellectual
Property or any Grantors’ ownership interest therein or use thereof, or
(B) which, if adversely determined, would have a Material Adverse Effect on the
use, transfer, licensing or value of any such Grantor’s Owned Intellectual
Property;

12. each Grantor has taken reasonable steps to protect its rights in, and
confidentiality of all material Trade Secrets, and any other confidential
information owned, used or held by such Grantor, including a policy that
employees, licensees, contractors, and other third parties with access to Trade
Secrets or other confidential information safeguard and maintain the secrecy and
confidentiality of such Trade Secrets and confidential information. To such
Grantor’s knowledge, such Trade Secrets have not been used, disclosed to or
discovered by any third party except pursuant to valid and appropriate
non-disclosure, license or any other appropriate contract which has not been
breached;

13. except as permitted under the Credit Agreement, none of the Grantors have
conveyed, pledged or otherwise transferred ownership of, or granted or agreed to
grant any exclusive license of or right to use, or granted joint ownership of,
any such Grantor’s Owned Intellectual Property to any third party; and

14. the consummation of the transactions contemplated by the Loan Documents will
not cause to be provided or licensed to any third party, or give rise to any
rights of any third party with respect to, any software source code that is such
Grantor’s Owned Intellectual Property. Grantors have implemented reasonable
disaster recovery and back-up plans with respect to information technology
systems that are included within such Grantor’s Intellectual Property.

(k) Vehicles. As of the Closing Date, the aggregate book value of all Vehicles
owned by all Grantors is less than $5,000,000.

(l) Governmental Obligors. As of the Closing Date, none of the obligors on any
Receivable that constitutes Collateral, and none of the parties to any Contract
that constitutes Collateral, is a Governmental Authority except for (i) with
respect to Receivables or Contracts not included in a Borrowing Base because all
actions required under all applicable Assignment of Claims Acts have not been
taken to approve and permit the assignment of rights to payment thereunder or
thereon to the

 

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Administrative Agent, the obligors thereon or parties thereto, (ii) with respect
to Receivables or Contracts included in a Borrowing Base as to which all actions
required under all applicable Assignment of Claims Acts have been taken to
approve and permit the assignment of rights to payment thereunder or thereon to
the Administrative Agent, for the ratable benefit of the Secured Parties, the
obligors thereon or parties thereto, and (iii) with respect to any other
Receivables or Contracts, in each case, that constitute Collateral, those
obligors and parties thereof so long as the requirements of Section 5(m) have
been satisfied with respect to such Receivables or Contracts.

(m) Deposit Accounts, Commodity Accounts and Securities Accounts. All Pledged
Accounts with respect to such Grantor are listed on Schedule V, including the
institution at which such Deposit Account, Securities Account or Commodity
Account is established, the purpose thereof, the name thereon, and the account
number thereof. Each Pledged Account is a Controlled Account.

(n) Additional Representations and Warranties. Each representation and warranty
set forth in Section 5 of the Credit Agreement and applicable to any Grantor is
incorporated herein by reference as if fully set forth herein.

5. Covenants. The Grantors hereby jointly and severally agree that, so long as
any of the Commitments remain in effect or any amount is owing to any Secured
Party hereunder or under any other Loan Document (except contingent
indemnification and expense reimbursement obligations for which no claim has
been made), each Grantor shall:

(a) Maintenance of Perfected Security Interests; Further Documentation; Pledge
of Instruments and Chattel Paper. Such Grantor shall maintain the security
interest created by this Security Agreement as a perfected security interest
having at least the priority described in Section 4(b) hereof and shall defend
such security interest against the claims and demands of all Persons whomsoever.
At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver such further instruments and documents and
take such further action as the Administrative Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Security
Agreement and of the rights and powers herein granted, including, without
limitation, (i) the filing of any financing statements, financing change
statements or amendments to financing statements or continuation statements
under the UCC or any similar personal property security legislation in effect in
any jurisdiction with respect to the Liens created hereby, (ii) the filing of
any recordation of security interest documents with the U.S. Patent and
Trademark Office, the U.S. Copyright Office and any other applicable office or
agency of another country or political subdivision thereof and (iii) in the case
of Investment Property, Deposit Accounts (other than Excluded Accounts) and any
other relevant Collateral, taking any actions (including, without limitation,
entering into, and using its best efforts to cause any relevant third party to
enter into, one or more Account Control Agreements) necessary to enable the
Administrative Agent to obtain “control” (within the meaning of the applicable
UCC) with respect thereto. Upon the request of the Administrative Agent during
the continuance of an Event of Default, each Grantor shall enable the
Administrative Agent to obtain control of each Letter-of-Credit Right of such
Grantor by (A) assigning such Letter-of-Credit Right to the Administrative
Agent, (B) causing the issuing bank of the related letter of credit to consent
to such assignment and (C) causing the related letter of credit to be advised by
the Administrative Agent. Each Grantor also hereby authorizes the Administrative
Agent to file any such financing statements, financing change statements or
amendments to financing statements or continuation statements without the
signature of such Grantor to the extent permitted by applicable law. Any such
financing statement may, at the option of the Administrative Agent, describe the
property covered thereby as “all assets” or “all personal property” of such
Grantor, or may use a similar description; provided, however, that the
Administrative Agent shall amend any such description to the extent reasonably
necessary to accommodate Excluded Assets. A carbon, photographic or other
reproduction of this Security Agreement

 

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shall be sufficient as a financing statement for filing in any jurisdiction. If
any amount payable under or in connection with any of the Collateral shall be or
become evidenced by any Instrument or Chattel Paper in a principal amount that
is greater than $2,500,000 or any Certificated Security, such Instrument,
Chattel Paper or Certificated Security shall be promptly delivered to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Security
Agreement; provided, however, that any other such Instrument or Chattel Paper
shall be held by such Grantor in trust for the Administrative Agent.

(b) Maintenance of Records. Such Grantor will keep and maintain at its own cost
and expense satisfactory and complete records of the Collateral, including,
without limitation, a record of all payments received and all credits granted
with respect to the Accounts.

(c) [Reserved].

(d) Compliance with Laws, etc. Such Grantor will comply with all Requirements of
Law applicable to the Collateral or any part thereof or to the operation of such
Grantor’s business except to the extent that failure to comply therewith could
not, in the aggregate, be reasonably expected to have a Material Adverse Effect;
provided, however, that each Grantor may obtain waivers or contest any
Requirement of Law in any reasonable manner which shall not, in the sole opinion
of the Administrative Agent, adversely affect the Administrative Agent’s, or the
Lenders’ or the Issuing Lender’s rights or the priority of its Liens on the
Collateral.

(e) Compliance with Terms of Material Contracts, etc. Such Grantor will perform
and comply with all its obligations under the Material Contracts and all its
other Contractual Obligations relating to the Collateral unless (i) the subject
of a good faith dispute or (ii) such failure to perform or comply could not
reasonably be expected to have a Material Adverse Effect.

(f) Payment of Obligations. Such Grantor will pay promptly when due all material
Taxes, assessments and governmental charges or levies imposed upon the
Collateral, as well as all material claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or with respect to
the Collateral, except that no such charge need be paid if (i) the validity
thereof is being contested in good faith by appropriate proceedings and
(ii) such charge is adequately reserved against on such Grantor’s books in
accordance with GAAP.

(g) Limitation on Liens on Collateral. Such Grantor will not create, incur or
suffer to exist, will defend the Collateral against, and will take such other
reasonable action as is necessary to remove, any Lien or claim on or to the
Collateral, other than the Liens created hereby and other than Permitted Liens,
and will defend the right, title and interest of the Secured Parties in and to
any of the Collateral against the claims and demands, other than in respect of
Permitted Liens, of all Persons whomsoever.

(h) Limitations on Dispositions of Collateral. Such Grantor will not sell,
transfer, lease or otherwise dispose of any of the Collateral, or attempt, offer
or contract to do so except for sales, transfers and other dispositions of
Collateral permitted under the Credit Agreement.

(i) Control of Pledged Accounts. Such Grantor agrees that, subject to
Section 8(a) or otherwise with the consent of the Administrative Agent in its
sole discretion (exercised in good faith), at no time shall it hold any funds or
any other assets in any Pledged Account that is not a Controlled Account.

 

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(j) Assets in Pledged Accounts. Such Grantor agrees that at any time after the
occurrence and during the continuance of an Event of Default in respect of which
the Administrative Agent has exercised any remedies in respect of any Collateral
in any Controlled Account, including without limitation, giving any instruction
to a bank, securities intermediary or other Person maintaining a Controlled
Account, such Grantor will not, and will not cause or permit any of its agents,
representatives or other Persons to withdraw any cash (or, with respect to any
Securities Account or Commodity Account, withdraw, transfer, sell, redeem,
pledge, rehypothecate or otherwise deliver or dispose of any assets in such
account) from any Controlled Account (each an “Account Transaction”) without the
prior written consent of the Administrative Agent. Upon the occurrence and
during the continuance of an Event of Default, (i) the Administrative Agent
shall be entitled to instruct the applicable bank, securities intermediary or
other Person maintaining any Controlled Account to not execute any Account
Transaction without the prior written consent of the Administrative Agent and
(ii) any amounts in any Controlled Account may be withdrawn by the
Administrative Agent and applied as provided in Section 8(b). Such Grantor
agrees that it will not transfer assets out of any Securities Accounts or
Commodity Accounts, or transfer any Securities Accounts or Commodity Accounts to
another securities intermediary, unless such Grantor, the Administrative Agent,
and the substitute securities intermediary have entered into an Account Control
Agreement. No arrangement contemplated hereby or by any Account Control
Agreement in respect of any Securities Accounts, Commodity Accounts or other
Investment Property shall be modified by such Grantor without the prior written
consent of the Administrative Agent (such consent to be exercised in good
faith). Upon the occurrence and during the continuance of an Event of Default,
the Administrative Agent may notify any securities intermediary to liquidate the
applicable Securities Accounts and/or Commodity Accounts or any related
Investment Property maintained or held thereby and remit the proceeds thereof to
an account specified by the Administrative Agent (including any Collateral
Account). For the avoidance of doubt, and notwithstanding anything to the
contrary in any Account Control Agreement or any other Loan Document, including
this Security Agreement, the Administrative Agent shall not exercise any
remedies in respect of any Collateral in any Controlled Account, including
without limitation, giving any instruction (including any shifting control, or
other like, notice) to a bank, securities intermediary or other Person
maintaining a Controlled Account, or withdrawing or transferring any funds or
assets from a Controlled Account, unless in each case an Event of Default has
occurred and is continuing.

(k) Inventory Evidenced by Documents.

(i) Such Grantor shall cause any negotiable Documents evidencing any Inventory
of such Grantor (A) if being held by the ultimate purchaser thereof, to be
(1) issued to the order of the Administrative Agent and (2) delivered to the
Administrative Agent and (B) if otherwise, to be duly endorsed in a manner
satisfactory to the Administrative Agent (provided that any bill of lading
issued for such Inventory shall be duly endorsed to the extent that it has been
issued to or endorsed to such Grantor (without further endorsement)), to be held
as Collateral pursuant to this Security Agreement.

(ii) Unless otherwise agreed by the Administrative Agent in its reasonable
discretion, such Grantor shall, within 60 days after the Closing Date, provide
to the bailee or consignee of any such Inventory of such Grantor that is
evidenced by a non-negotiable Document or that is not evidenced by any Document
a written notice of the Lien created by this Security Agreement, such notice to
be substantially in the form of Annex E or such other form otherwise acceptable
to the Administrative Agent and duly executed and delivered by such Grantor and
the Administrative Agent; provided that such Grantor shall use commercially
reasonable efforts to have such notices acknowledged by such bailee or consignee
as described therein; provided, further that, delivery of such a notice pursuant
to this Section (k)(ii) with respect to any contract for the storage of
Inventory that constitutes Collateral shall be deemed a delivery of such a
notice with respect to

 

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any and all Documents evidencing any additional Inventory that constitutes
Collateral, delivered to such bailee or consignee at any time pursuant to such
contract. The Administrative Agent hereby agrees not to deliver a “Control
Notice” (as defined in Annex E) to any bailee or consignee of any Inventory of
any Grantor pursuant to any notice referred to in the preceding sentence unless
an Event of Default has occurred and is continuing.

(l) Additional Commercial Tort Claims. If at any time such Grantor has any
Commercial Tort Claims for an amount in controversy in excess of $2,500,000 that
constitute Collateral which are not described on Schedule VI hereto, such
Grantor shall as soon as reasonably practicable provide to the Administrative
Agent a supplement to Schedule VI, describing such additional Commercial Tort
Claims. Upon delivery of such supplement, Schedule VI shall be deemed modified
to the extent provided in such supplement.

(m) Certain Government Receivables. With respect to Receivables or Contracts, in
each case, that constitute Collateral, to which the counterparty or obligor is
(i) a Governmental Authority, such Grantor shall, as soon as reasonably
practicable after the request by the Administrative Agent, take any commercially
reasonable actions under any Assignment of Claims Act required to permit or
approve the assignment of the rights to payment thereunder or thereon to the
Administrative Agent on behalf of and for the benefit of the Secured Parties;
provided, that the Administrative Agent shall not make such request with respect
to any Receivables or Contracts that are not included in the calculation of the
Borrowing Base to the extent that the value of all such Receivables and
Contracts to which the counterparty or obligor is a Governmental Authority that
have not been perfected under an Assignment of Claims Act is less than
$5,000,000 at any one time outstanding unless an Event of Default shall have
occurred and be continuing or (ii) a Governmental Authority of a State within
the United States, such Grantor shall, as soon as reasonably practicable, give
notice to the Administrative Agent if such Governmental Authority has not, or
has ceased to, waive all claims of sovereign immunity with respect to such
Receivable or Contract by statute, applicable case law, contract or otherwise.

(n) Limitations on Modifications of Material Contracts and Agreements Giving
Rise to Receivables; Exercise of Rights; Notices. Such Grantor will not
(i) other than in accordance with its standard operating practices and customary
market practice in markets similar to those in which such Grantor operates,
amend, modify, terminate or waive any provision of any Material Contract or any
agreement giving rise to a Receivable in any manner which could reasonably be
expected to materially adversely affect the value of such Material Contract or
such Receivable as Collateral, (ii) other than in accordance with its standard
operating practices and customary market practice in markets similar to those in
which such Grantor operates, fail to exercise promptly and diligently each and
every material right which it may have under each Material Contract and each
agreement giving rise to a Receivable (other than any right of termination) or
(iii) fail to deliver to the Administrative Agent a copy of each material
demand, notice or document received by it relating in any way to any Material
Contract or any agreement giving rise to a Receivable that questions the
validity or enforceability of such Material Contract or Receivables constituting
more than 5% of the aggregate amount of the Receivables indicated in the latest
Borrowing Base Report within three (3) Business Days after receipt by such
Grantor thereof.

(o) Maintenance of Equipment. Such Grantor will maintain each item of Equipment
in good operating condition, ordinary wear and tear and immaterial impairments
of value and damage by the elements excepted, and will provide all maintenance,
service and repairs in accordance with its standard operating practices and
customary market practice in markets similar to those in which such Grantor
operates.

 

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(p) Limitations on Discounts, Compromises, Extensions of Receivables. Other than
in accordance with its standard operating practices and customary market
practice in markets similar to those in which such Grantor operates, such
Grantor will not (i) grant any extension of the time of payment of any
Receivable, (ii) compromise, compound or settle any Receivable for less than the
full amount thereof, (iii) release, wholly or partially, any Person liable for
the payment of any Receivable, or (iv) allow any credit or discount whatsoever
on any Receivable.

(q) Maintenance of Insurance. Such Grantor will maintain, with financially sound
and reputable companies, insurance policies (i) insuring the Inventory,
Equipment and Vehicles against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Administrative Agent in
amounts comparable to amounts of insurance coverage obtained by similar
businesses of similar size acting prudently and (ii) insuring each Grantor and
the Administrative Agent (for the benefit of the Lenders, the Issuing Lenders
and the other Secured Parties) against liability for personal injury and
property damage relating to such Inventory, Equipment and Vehicles, such
policies to be in such form and amounts and having such coverage as shall be
comparable to forms, amounts and coverage, respectively, obtained by similar
businesses of similar size acting prudently, with losses payable to any Grantor
and the Administrative Agent (for the benefit of the Lenders, the Issuing
Lenders and the other Secured Parties) as their respective interests may appear
or, in the case of liability insurance, showing the Administrative Agent (for
the benefit of the Lenders, the Issuing Lenders and the other Secured Parties)
as additional insured parties. All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least thirty (30) days after receipt by the
Administrative Agent of written notice thereof (unless the policy of the
applicable insurance company shall be not to provide such assurance), (ii) name
the Administrative Agent as insured party and loss payee, (iii) include a breach
of warranty clause and (iv) be reasonably satisfactory in all other respects to
the Administrative Agent. Each Grantor shall deliver to the Administrative Agent
a report of a reputable insurance broker with respect to such insurance when
available during each calendar year and such supplemental reports with respect
thereto as the Administrative Agent may from time to time reasonably request.

(r) Further Identification of Collateral. Such Grantor will furnish to the
Administrative Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.

(s) Notices. Such Grantor will advise the Administrative Agent promptly, in
reasonable detail, at its address set forth in the Credit Agreement, (i) of any
Lien (other than Liens created hereby or Permitted Liens) on, or claim asserted
against, any of the Collateral and (ii) of the occurrence of any event which
could reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the Liens created hereunder.

(t) Changes in Locations, Name, etc. Such Grantor will not (i) without ten
(10) Business Days’ prior written notice to the Administrative Agent, change its
location (for purposes of Section 9-307 of the UCC) from that specified in
Section 4(f) or remove its books and records concerning the Receivables from the
location specified in Section 4(c), (ii) without ten (10) Business Days’ prior
written notice to the Administrative Agent, permit any of the Inventory or
Equipment to be kept at a location other than those listed on Schedule III
hereto or otherwise in such other locations in the United States as notified to
the Administrative Agent other than while in transit to such locations or for
repairs, (iii) without ten (10) Business Days’ prior written notice to the
Administrative Agent, change its name, identity or structure or (iv) unless
thirty (30) days written notice to such effect shall have been given and any
filing under the UCC as the Administrative Agent may reasonably request to
maintain the perfected security interest granted hereto has been made,
reorganize under the laws of another jurisdiction or as a different type of
entity. Notwithstanding the foregoing, no Grantor shall be required to give any
notice to the Administrative Agent in respect of its move after the Closing Date
to new office space located at 185 International Drive, Portsmouth, New
Hampshire.

 

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(u) Intellectual Property.

1. Each Grantor, as applicable, (either itself or through licensees) shall
(A) continue to use each material Trademark on each and every product or in
connection with each and every service identified in its respective applications
or registrations in order to maintain such Trademark in full force free from any
claim of abandonment for non-use, except such Trademarks that such Grantor
decides, in its reasonable good faith business judgment and consistent with its
past practices, to abandon, (B) maintain the quality of products and services
offered under such Trademark consistent with its best past standards, (C) use
such Trademark with the appropriate notice of registration and all other notices
and legends required by applicable Requirements of Law, and (D) not (and not
permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby such Trademark may become abandoned, invalidated or impaired
in any way.

2. Except as otherwise permitted herein, each Grantor (either itself or through
licensees) shall not do any act, or omit to do any act, whereby any of such
Grantor’s material Owned Intellectual Property may become forfeited, invalidated
or abandoned or dedicated to the public, or placed or fall in public domain.

3. Whenever any Grantor, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any applicable office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent within five Business Days after the last day
of the fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have recorded,
any and all agreements, instruments, documents, and papers as the Administrative
Agent may request to evidence and/or perfect the Administrative Agent’s security
interest in any applicable Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby.

4. Each Grantor, as applicable, shall take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any applicable
office or agency in any other country or political subdivision thereof, to
maintain, pursue and enforce each application relating to any of such Grantor’s
material Owned Intellectual Property (and to obtain the relevant registration)
and to maintain each registration of such Grantor’s material Owned Intellectual
Property, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability, except for applications
and registrations that such Grantor decides, in its reasonable good faith
business judgment and consistent with its past practices, to abandon or allow to
expire.

5. Each Grantor (either itself or through licensees) shall not perform any act
or use any of such Grantor’s Owned Intellectual Property to knowingly infringe
the intellectual property rights of any third party.

6. In the event that any Grantor’s material Owned Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall
(A) take such actions as such Grantor shall reasonably deem appropriate under
the circumstances to protect such Intellectual

 

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Property and (B) if such Grantor’s Owned Intellectual Property is of material
economic value, promptly notify the Administrative Agent after such Grantor
learns thereof and protect and/or enforce such Intellectual Property, including,
as applicable, by suing for infringement, misappropriation, or dilution, seeking
injunctive relief where appropriate and recovering any and all damages for such
infringement, misappropriation or dilution; provided that, the Grantors shall
not have any obligation to protect or enforce such Intellectual Property if the
Administrative Agent provides any Grantor with a written waiver of this
requirement.

(v) Vehicles. Such Grantor will maintain each Vehicle in good operating
condition, ordinary wear and tear and immaterial impairments of value and damage
by the elements excepted, and will provide all maintenance, service and repairs
necessary for such purpose in accordance with its standard operating practices
and customary market practice in markets similar to those in which such Grantor
operates. If an Event of Default shall occur and be continuing, at the request
of the Administrative Agent, such Grantor shall, within thirty (30) days after
such request, file applications for certificates of title indicating the
Administrative Agent’s first priority Lien on behalf and for the ratable benefit
of the Secured Parties on the Vehicles covered by such certificates, together
with any other necessary documentation, in each office in each jurisdiction
which the Administrative Agent shall deem advisable to perfect their Liens on
the Vehicles.

6. Agent’s Appointment as Attorney-in-Fact.

(a) Powers. Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of each Grantor and in the name of
each Grantor or in its own name, from time to time in the Administrative Agent’s
discretion, for the purpose of carrying out the terms of this Security
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Security Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of each Grantor, without notice to or assent by any Grantor, to
do the following:

1. in the name of each Grantor or its own name, or otherwise, to take possession
of and endorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Account, Instrument, Chattel
Paper, General Intangible or Material Contract or with respect to any other
Collateral and to file any claim or to take any other action or proceeding in
any court of law or equity or otherwise deemed appropriate by the Administrative
Agent for the purpose of collecting any and all such moneys due under any
Account, Instrument, Chattel Paper, General Intangible or Material Contract or
with respect to any other Collateral whenever payable;

2. to pay or discharge Taxes and Liens levied or placed on or threatened against
the Collateral, to effect any repairs or any insurance called for by the terms
of this Security Agreement and to pay all or any part of the premiums therefor
and the costs thereof;

3. in the case of any Grantor’s Intellectual Property, to execute and deliver
any and all agreements, instruments, documents and papers as the Administrative
Agent may request to evidence the Administrative Agent’s and the other Secured
Parties’ security interest in such Intellectual Property and the goodwill and
general intangibles of the Grantors relating thereto or represented thereby;

 

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4. to execute, in connection with any sale provided for in Section 9 hereof, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and

5. (A) to direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Administrative Agent or as the Administrative Agent shall direct; (B) to ask
or demand for, collect, receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (C) to sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in connection
with any of the Collateral; (D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (E) to defend any suit, action or proceeding brought
against any Grantor with respect to any Collateral; (F) to settle, compromise or
adjust any such suit, action or proceeding and, in connection therewith, to give
such discharges or releases as the Administrative Agent may deem appropriate;
(G) to assign any Patent or Trademark (along with the goodwill of the business
to which any such Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Administrative Agent shall
in its sole discretion determine; and (H) generally, subject to any applicable
FERC approvals, rules and regulations and any applicable tariffs, to sell,
transfer, pledge and make any agreement with respect to or otherwise deal with
any of the Collateral as fully and completely as though the Administrative Agent
was the absolute owner thereof for all purposes, and to do, at the
Administrative Agent’s option and the Grantors’ expense, at any time, or from
time to time, all acts and things which the Administrative Agent deems necessary
to protect, preserve or realize upon the Collateral and the Administrative
Agent’s Liens thereon on behalf of and for the ratable benefit of the Secured
Parties and to effect the intent of this Security Agreement, all as fully and
effectively as the Grantors might do.

Anything in this Section 6(a) to the contrary notwithstanding, (x) the
Administrative Agent agrees that it will not exercise any rights provided for in
this Section 6(a) unless an Event of Default has occurred and is continuing and
(y) Administrative Agent’s power of attorney over the FERC Contract Collateral,
and the delegation thereof to the FERC Sub-Agent pursuant to Section 11, shall
not be effective until the Administrative Agent delivers notice to such Grantor
that such power of attorney is effective.

Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and is irrevocable.

The power of attorney conferred hereby on the Administrative Agent is solely to
protect, preserve and realize upon its security interest in the Collateral. This
power of attorney shall neither create any agency on the part of the
Administrative Agent in favor of any Grantor, nor any fiduciary obligations or
relationship on the part of any Secured Party for the benefit of any Grantor.

(b) No Duty on Administrative Agent’s or other Secured Parties’ Part. The powers
conferred on the Administrative Agent and the other Secured Parties hereunder
are solely to protect the Administrative Agent’s and the other Secured Parties’
interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Secured Party to exercise any such powers. The
Administrative Agent and each Secured Party shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers,
and neither they nor any of their officers, directors, shareholders, employees
or agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for its own gross negligence or willful misconduct.

 

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7. Performance by Administrative Agent of Grantors’ Obligations; Use of
Collateral. If any Grantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, only upon the occurrence and during
the continuance of an Event of Default and at its option, but without any
obligation to do so, may itself perform or comply, or otherwise cause
performance or compliance, with such agreement. Notwithstanding anything herein
to the contrary, so long as none of (a) an Event of Default of the type
described in Section 9.1(g) of the Credit Agreement shall have occurred, (b) any
other Event of Default shall have occurred and be continuing pursuant to which
the Administrative Agent shall be exercising remedies pursuant to Section 9
hereof or (c) any other Event of Default shall have occurred and be continuing
and the Administrative Agent shall have provided notice to a Grantor, each
Grantor may use, commingle and dispose of all or any part of the Collateral in
the ordinary course of its business, subject to the provisions of the Credit
Agreement and the provisions of this Security Agreement.

8. Proceeds.

(a) In addition to the rights of the Administrative Agent and the Secured
Parties specified in Section 3(c) with respect to payments of Receivables, it is
agreed that all Proceeds received by any Grantor consisting of cash, checks and
other near-cash items shall be held by the Grantors in trust for the
Administrative Agent and the Secured Parties, segregated from other funds of the
Grantors, and shall, promptly upon receipt by any Grantor, be deposited and held
in a Controlled Account (or, to the limit allowed, in an Excluded Account). Any
and all such Proceeds held in a Controlled Account (or by any Grantor in trust
for the Administrative Agent and the Secured Parties) shall continue to be held
as collateral security for the Obligations and shall not constitute payment
thereof until applied as provided in Section 8(b). Cash or any other property
held in a Controlled Account shall not be transferred to any Deposit Account,
Securities Account or Commodity Account of any Grantor that is not a Controlled
Account or an Excluded Account.

(b) If an Event of Default shall have occurred and be continuing, at any time at
the Administrative Agent’s election (or at the direction of the Required
Lenders), the Administrative Agent shall apply all or any part of the Proceeds
constituting Collateral, whether or not held in any Collateral Account, and any
Proceeds of any Pledge Agreement, the Guarantee or any other Loan Document, or
otherwise received by the Administrative Agent, against the Obligations (whether
matured or unmatured), such application to be in the following order:

1. First, to pay incurred and unpaid fees and expenses of the Issuing Lenders
and Agents under the Loan Documents;

2. Second, to the Administrative Agent, for application by it towards payment of
all amounts then due and owing and remaining unpaid in respect of interest and
fees pro rata among the Secured Parties according to the amounts of such
Obligations (other than the Subordinated Obligations) then due and owing and
remaining unpaid to the Secured Parties;

3. Third, to the Administrative Agent, for application by it towards (i) payment
of all principal on all Loans then outstanding and all Unreimbursed Amounts then
outstanding and (ii) Cash Collateralizing any outstanding Letters of Credit, pro
rata among the Secured Parties according to the amounts of the Obligations to be
so paid or Cash Collateralized under this clause (iii) owing to the Secured
Parties;

 

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4. Fourth, to the Administrative Agent, for application by it towards payment of
all other amounts then due and owing and remaining unpaid in respect of the
Obligations (other than the Subordinated Obligations), pro rata among the
Secured Parties according to the amounts of such Obligations (other than the
Subordinated Obligations) then due and owing and remaining unpaid to the Secured
Parties;

5. Fifth, to the Administrative Agent, for application by it towards prepayment
of the Obligations (other than the Subordinated Obligations), pro rata among the
Secured Parties according to the amounts of the Obligations (other than the
Subordinated Obligations) being so prepaid then held by the Secured Parties;

6. Sixth, to the Administrative Agent, for application by it towards payment of
all amounts then due and owing and remaining unpaid in respect of the
Subordinated Obligations and prepayment of the remaining Subordinated
Obligations, pro rata among the Subordinated Parties according to the amounts of
the Subordinated Obligations then due and owing and remaining unpaid or being so
prepaid then held by the Subordinated Parties; and

7. Seventh, any balance of such Proceeds remaining after the Obligations shall
have been paid in full, no Letters of Credit shall be outstanding and the
Commitments shall have terminated, shall be paid over to the applicable Grantor
or to whomsoever else may be lawfully entitled to receive the same.

Notwithstanding the foregoing, no amounts received from any Guarantor shall be
applied to any Excluded Swap Obligations of such Guarantor.

9. Remedies.

(a) If an Event of Default shall occur and be continuing, the Administrative
Agent, on behalf of the Secured Parties, may exercise, in addition to all other
rights and remedies granted to it in this Security Agreement, the Loan Documents
(including all of the Security Documents) and in any other instrument or
agreement securing, evidencing or relating to any of the Obligations, all rights
and remedies of a secured party under the UCC. In such circumstances, without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may transfer all or any part of
the Collateral into the Administrative Agent’s name or the name of its nominee
or nominees, and/or may forthwith collect, receive, appropriate and realize upon
the Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Administrative Agent or any Secured Party or elsewhere
upon such terms and conditions (including by lease or by deferred payment
arrangement) as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk and/or may take such other actions as may be available under applicable
law. The Administrative Agent or any Secured Party shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, auction or closed tender, to purchase the whole or any
part of the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived or released. Each Grantor
further agrees, at the Administrative Agent’s request, to assemble the
Collateral and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select (on its behalf and on behalf of the
Secured Parties), whether at any Grantor’s premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any

 

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such collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
other Secured Parties arising out of the exercise by the Administrative Agent
hereunder, including, without limitation, documented fees and disbursements of
counsel, to the payment in whole or in part of the Obligations, in such order as
provided in Section 8(b), and only after such application and after the payment
by the Administrative Agent of any other amount required by any provision of
law, including, without limitation, Section 9-615 of the UCC, or required
pursuant to clause (vi) of Section 8(b), need the Administrative Agent account
for the surplus, if any, to the Grantors. To the extent permitted by applicable
law, each Grantor waives all claims, damages and demands it may acquire against
the Administrative Agent or any other Secured Party arising out of the exercise
by the Administrative Agent or any other Secured Party of any of its rights
hereunder. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition. Each Grantor shall
remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay the Obligations (including
the documented fees and disbursements of counsel employed by the Administrative
Agent or any Secured Party to collect such deficiency to the extent provided
therefor in Section 11.6 of the Credit Agreement).

(b) With respect to FERC Contract Collateral, (i) only the FERC Sub-Agent shall
take any of the actions described in Section 9(a) (“Enforcement Actions”),
(ii) the FERC Sub-Agent shall not take any Enforcement Actions until the FERC
Sub-Agent delivers a notice to the Administrative Agent and such Grantor that it
thereafter may take Enforcement Actions, (iii) the FERC Sub-Agent shall take
such Enforcement Actions at it determines are advisable, in consultation with
the Administrative Agent, but without obligation to follow direction of the
Administrative Agent or the Required Lenders and (iv) any such enforcement
actions shall be subject to any applicable FERC approvals, rules and regulations
and any applicable tariffs.

10. Subordination Provisions.

(a) Who May Exercise Remedies.

1. Subject to subsection (ii) below, until the date on which all Senior
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have been terminated, the Senior Parties
will have the exclusive right to:

(i) commence and maintain an Enforcement Action or exercise rights with respect
to a Lien, credit bid their debt, make any set-off, sue or participate in any
suit, action or proceeding to enforce payment or collection or enforce any
redemption or mandatory prepayment obligation, or commence any judicial
enforcement of rights and remedies;

(ii) subject to Section 19 hereof and Section 10.10 and 11.5 of the Credit
Agreement, make determinations regarding the release or Disposition of, or
restrictions with respect to, the Collateral; and

(iii) otherwise enforce the rights and remedies of a secured creditor under the
UCC and the Bankruptcy Laws of any applicable jurisdiction.

 

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2. Notwithstanding Section 10(a)(i), a Subordinated Party may:

(i) file a proof of claim or statement of interest, vote on a plan of
reorganization (including a vote to accept or reject a plan of partial or
complete liquidation, reorganization, arrangement, composition or extension),
and make other filings, arguments and motions, with respect to the Subordinated
Obligations and the Collateral in any Insolvency Proceeding commenced by or
against any Grantor, in each case in accordance with this Security Agreement;

(ii) take action to create, perfect, preserve or protect its Lien on the
Collateral, so long as such actions are not adverse to the priority status in
accordance with this Security Agreement of Liens on the Collateral securing the
Senior Obligations or Senior Parties’ rights to exercise remedies;

(iii) file necessary pleadings in opposition to a claim objecting to or
otherwise seeking the disallowance of a Subordinated Obligation or a Lien
securing the Obligation; and

(iv) join (but not exercise any control over) a judicial foreclosure or Lien
enforcement proceeding with respect to the Collateral initiated by the
Administrative Agent on behalf of the Senior Parties, to the extent that such
action could not reasonably be expected to materially interfere with the
Enforcement Action, but no Subordinated Party may receive any proceeds thereof
unless expressly permitted herein.

3. Except as otherwise expressly set forth in this Section 10(a), Subordinated
Parties may exercise rights and remedies as unsecured creditors, other than
initiating or joining in an involuntary case or proceeding under the Bankruptcy
Code with respect to a Grantor against a Grantor that has guaranteed or granted
Liens to secure the Subordinated Obligations, in accordance with the terms of
the Loan Documents and the Cash Management Bank Agreements, Commodity OTC
Agreements or Financial Hedging Agreements to which the Subordinated Party is a
party and applicable law; provided, that any judgment Lien obtained by a
Subordinated Party as a result such exercise of rights will be included in the
Collateral and be subject to this Security Agreement for all purposes (including
in relation to the Senior Obligations).

(b) Manner of Exercise.

1. Subject to the terms of the Loan Documents, a Senior Party may take any
Enforcement Action:

(i) in any manner in its sole discretion in compliance with applicable law;

(ii) without consultation with or the consent of any Subordinated Party;

(iii) regardless of whether an Insolvency Proceeding has been commenced;

(iv) regardless of any provision of any Cash Management Bank Agreement,
Commodity OTC Agreement or Financial Hedging Agreement; and

(v) regardless of whether such exercise is adverse to the interest of any
Subordinated Party.

 

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2. The rights of a Senior Party to enforce any provision of this Security
Agreement or any other Loan Document will not be prejudiced or impaired by:

(i) any act or failure to act of any Grantor, or

(ii) noncompliance by any Person other than such Senior Party with any provision
of this Security Agreement, any other Loan Document or any Cash Management Bank
Agreement, Commodity OTC Agreement or Financial Hedging Agreement,

regardless of any knowledge thereof that any Senior Party or the Administrative
Agent may have or otherwise be charged with.

3. No Subordinated Party will contest, protest or object to, or take any action
to hinder, and each waives any and all claims with respect to, any Enforcement
Action by a Senior Party.

4. Subject to the terms of the Loan Documents and the applicable Cash Management
Bank Agreements, Commodity OTC Agreements or Financial Hedging Agreements,
following the date on which the Senior Obligations shall have been paid in full,
no Letters of Credit shall be outstanding and the Commitments shall have been
terminated, a Subordinated Party may take any Enforcement Action:

(i) in any manner in its sole discretion in compliance with applicable law;

(ii) regardless of whether an Insolvency Proceeding has been commenced; and

(iii) regardless of any provision of any Loan Document (other than this Security
Agreement).

5. Following the date on which the Senior Obligations shall have been paid in
full, no Letters of Credit shall be outstanding and the Commitments shall have
been terminated, the rights of a Subordinated Party to enforce any provision of
this Security Agreement, any other Loan Document or any Cash Management Bank
Agreement, Commodity OTC Agreement or Financial Hedging Agreement to which it is
party to will not be prejudiced or impaired by:

(i) any act or failure to act of any Grantor or any other Subordinated Party; or

(ii) noncompliance by any Person other than such Subordinated Party with any
provision of this Security Agreement, any other Loan Document or any Cash
Management Bank Agreement, Commodity OTC Agreement or Financial Hedging
Agreement to which it is party;

regardless of any knowledge thereof that any Subordinated Party or the
Administrative Agent may have or otherwise be charged with.

(c) Use of Cash Collateral and DIP Financing.

1. Until the date on which the Senior Obligations shall have been paid in full,
no Letters of Credit shall be outstanding and the Commitments shall have been
terminated, if an Insolvency Proceeding has commenced, no Subordinated Party
will, or will direct the Administrative Agent to, contest, protest or object to,
any use, sale or lease of “cash collateral”

 

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(as defined in section 363(a) of the Bankruptcy Code) if the Administrative
Agent, on behalf of the Senior Parties, has consented in writing to such use,
sale or lease; provided, that the Subordinated Parties will have the right to
seek adequate protection permitted by Section 10(f) and if such adequate
protection is not granted, the Subordinated Parties will have the right to
object under this Section 10(c) solely on such basis.

2. Until the date on which the Senior Obligations shall have been paid in full,
no Letters of Credit shall be outstanding and the Commitments shall have been
terminated, if an Insolvency Proceeding has commenced, no Subordinated Party
will, or will direct the Administrative Agent to, contest, protest or object to,
the Borrower or any other Grantor obtaining credit or incurring debt secured by
Liens on the Collateral pursuant to section 364 of the Bankruptcy Code (or
similar Bankruptcy Law) (each, a “DIP Financing”) if the Administrative Agent,
on behalf of the Senior Parties, has consented in writing to such DIP Financing;
provided, that the Subordinated Parties will have the right to seek adequate
protection permitted by Section 10(f), and if such adequate protection is not
granted, the Subordinated Parties will have the right to object under this
Section 10(c) solely on such basis.

3. The amount of any customary “carve-out” or other similar administrative
priority expense or claim consented to in writing by the Administrative Agent,
on behalf of the Senior Parties, to be paid prior to the payment in full of the
Senior Obligations (i) will be deemed to be, for purposes of Section 10(c)(i), a
use of cash collateral at the time consented to by the Administrative Agent, on
behalf of the Senior Parties, and (ii) will not be deemed to be, for purposes of
Section 10(c)(ii), a principal amount of DIP Financing at the time consented to
by the Administrative Agent, on behalf of the Senior Parties.

4. No Subordinated Party may, directly or indirectly, seek to provide DIP
Financing to the Borrower or other Grantor secured by Liens equal or senior in
priority to the Liens securing any Senior Obligations; provided, that nothing in
this Section 10(c)(iv) shall prohibit any Subordinated Party which is also a
Senior Party from offering to provide or from providing a DIP Financing to the
extent permitted under Section 10(c)(ii); provided further that, if one or more
of Senior Parties do not offer to provide a DIP Financing to the extent
permitted under Section 10(c)(ii), then the Subordinated Parties may seek to
provide such DIP Financing permitted under Section 10(c)(ii), secured by Liens
equal or senior in priority to the Liens securing any Senior Obligations, and
the Senior Parties may object thereto.

(d) Sale of Collateral. In its capacity as the holder of a Lien on the
Collateral, no Subordinated Party will, or will direct the Administrative Agent
to, contest, protest or object to, and each Subordinated Party will be deemed to
have consented to, pursuant to section 363(f) of the Bankruptcy Code (or similar
Bankruptcy Law), a sale, lease, exchange, transfer or other disposition of any
Collateral free and clear of its Liens or other interests under section 363 of
the Bankruptcy Code (or similar Bankruptcy Law), if the Administrative Agent, on
behalf of the Senior Parties, has consented in writing to such Disposition;
provided, that the Liens of the Subordinated Parties attach to any net proceeds
of such Disposition with the same priority and validity as the Liens held by the
Subordinated Parties on the assets disposed of in such Disposition, and any such
Liens will remain subject to the terms of this Security Agreement.
Notwithstanding the foregoing, the Subordinated Parties may raise objections to
any Disposition of Collateral that could be raised in an Insolvency Proceeding
by unsecured creditors generally so long as not otherwise inconsistent with the
terms of this Security Agreement.

(e) Relief from the Automatic Stay. Until the date on which the Senior
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have been terminated, no Subordinated
Party will, or will direct the Administrative Agent on its behalf to, seek

 

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relief from the automatic stay or any other stay in any Insolvency Proceeding in
respect of the Collateral, without the prior written consent of the
Administrative Agent, on behalf of the Senior Parties, or oppose any request by
the Administrative Agent, on behalf of the Senior Parties, for relief from the
automatic stay or any other stay in any Insolvency Proceeding.

(f) Adequate Protection. No Subordinated Party will, or will direct the
Administrative Agent on its behalf to, contest, protest or object to (x) any
request by a Senior Party for “adequate protection” (within the meaning of the
Bankruptcy Code or any similar Bankruptcy Law); or (y) any objection by a Senior
Party to any motion, relief, action or proceeding based on a Senior Party
claiming a lack of adequate protection.

Notwithstanding the foregoing provisions in this Section 10(f), in any
Insolvency Proceeding:

1. except as permitted in this Section 10(f), the Subordinated Parties may not
seek or request adequate protection and may not seek relief from the automatic
stay imposed by section 362 of the Bankruptcy Code (or similar Bankruptcy Law)
or other relief based upon a lack of adequate protection;

2. if the Senior Parties (or any subset thereof) are granted adequate protection
in the form of additional Collateral in connection with any motion described in
Section 10(c), then the Administrative Agent, on behalf of the Subordinated
Parties, may seek or request adequate protection in the form of a Lien on such
additional or replacement Collateral for the benefit of the Subordinated
Parties, which Lien will be subordinated to the Liens at any time securing the
Senior Obligations and any DIP Financing (and all Obligations relating thereto)
on the same basis as the other Liens securing the Subordinated Obligations are
so subordinated to the Senior Obligations under this Security Agreement; and

3. any claim of any Subordinated Party under section 507(b) of the Bankruptcy
Code (or similar Bankruptcy Law) will be subordinate in right of payment to any
claim of the Senior Parties under section 507(b) of the Bankruptcy Code (or
similar Bankruptcy Law); provided, that the Subordinated Parties will be deemed
to have agreed pursuant to section 1129(a)(9) of the Bankruptcy Code (or any
similar Bankruptcy Law) that any such junior claims may be paid under any plan
of reorganization in any form, having a value on the effective date of such plan
equal to the allowed amount of such claims.

(g) No Waiver. Subject to Section 10(a)(i) and (iii), nothing contained herein
will prohibit or in any way limit a Senior Party from objecting in any
Insolvency Proceeding or otherwise to any action taken by a Subordinated Party,
including the seeking by any Subordinated Party of adequate protection or the
asserting by a Subordinated Party of any of its rights and remedies under the
Loan Documents or any Cash Management Bank Agreements, Commodity OTC Agreements
or Financial Hedging Agreements to which it is a party or otherwise.

(h) Post-Petition Claims.

1. Neither the Administrative Agent on behalf of any Subordinated Party, nor any
other Subordinated Party, will oppose or seek to challenge any claim by a Senior
Party for allowance or payment in any Insolvency Proceeding of Senior
Obligations consisting of Post-Petition Claims, to the extent of the value of
the Senior Parties’ Lien on the Collateral, without regard to the existence of
the Lien of the Administrative Agent for the benefit of the Subordinated Party
on the Collateral.

 

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2. Neither the Administrative Agent on behalf of any Senior Party, nor any other
Senior Party, will oppose or seek to challenge any claim by a Subordinated Party
for allowance and any payment permitted under Section 10(f) in any Insolvency
Proceeding of Subordinated Obligations consisting of Post-Petition Claims, to
the extent of the value of the Lien of the Administrative Agent for the benefit
of the Subordinated Party on the Collateral (after taking account of the
existence of the Lien of the Administrative Agent for the benefit of the Senior
Parties on the Collateral).

(i) Waiver. Each Subordinated Party waives any claim it may hereafter have
against any Senior Party arising out of the election of any Senior Party of the
application of section 1111(b)(2) of the Bankruptcy Code, and/or out of any cash
collateral or financing arrangement or out of any grant of a security interest
in connection with the Collateral in any Insolvency Proceeding.

(j) Separate Grants of Security and Separate Classification. Each Subordinated
Party and each Senior Party acknowledges and agrees that because of, among other
things, their differing rights in the Collateral, the Subordinated Obligations,
to the extent deemed to be “secured claims” within the meaning of section 506(b)
of the Bankruptcy Code (or any similar Bankruptcy Law), are fundamentally
different from the Senior Obligations and must be separately classified in any
plan of reorganization in an Insolvency Proceeding. No Subordinated Party will
seek in any Insolvency Proceeding to be treated as part of the same class of
creditors as Senior Parties and will not oppose or contest any pleading by
Senior Parties seeking separate classification of their respective secured
claims.

(k) Effectiveness in Insolvency Proceedings. The provisions of this Section 10,
which the Secured Parties agree constitutes a “subordination agreement” under
section 510(a) of the Bankruptcy Code, will be effective before, during and
after the commencement of an Insolvency Proceeding. All references herein to any
Grantor will include such Grantor as a debtor-in-possession and any receiver or
trustee for such Grantor in any Insolvency Proceeding. The relative rights of
the Senior Parties and the Subordinated Parties in respect of any Collateral or
proceeds thereof shall continue after the filing of such petition on the same
basis as prior to the date of such filing, subject to any court order approving
the financing of, or use of cash collateral by, any Grantor.

(l) No Third Party Beneficiaries. No Person (including, without limitation, any
Loan Party) is a third-party beneficiary of the provisions of this Section 10,
except that the Senior Parties and Subordinated Parties which are not parties
hereto shall be entitled to the benefits of the provisions of this Section 10.
This Section 10 shall be binding upon the Senior Parties and Subordinated
Parties and each Senior Party and Subordinated Party shall be deemed to have
agreed to the terms hereof, by virtue of its acceptance of the benefits of the
Senior Obligations and the Subordinated Obligations, respectively. No other
creditor of any Grantor has any rights under this Section 10, and no Grantor or
other Loan Party may rely on the terms hereof. Nothing in this Section 10
impairs the Obligations of the Borrower and the other Grantors to pay principal,
interest, fees and other amounts as provided in, or otherwise comply with the
provisions of, the Loan Documents, the Cash Management Bank Agreements, the
Commodity OTC Agreements or the Financial Hedging Agreements.

11. Appointment of FERC Sub-Agent.

(a) In connection with the FERC Contract Collateral, the Administrative Agent
may designate and appoint a sub-agent (in such capacity, the “FERC Sub-Agent”),
which appointment and designation shall be effective upon written notice of the
same to the Lenders and the Grantors, to take actions on behalf of the
Administrative Agent and, upon the effectiveness of such appointment and
designation, hereby authorizes the FERC Sub-Agent to take any action in
connection with the FERC Contract Collateral required under this Security
Agreement or otherwise permitted thereunder, without any further consent or
instruction of the Administrative Agent or the Required Lenders.

 

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(b) If at any time the FERC Sub-Agent determines in good faith that its status
as FERC Sub-Agent may adversely affect the FERC Sub-Agent or any of its
affiliates, the FERC Sub-Agent may resign and/or release the security interest
in the FERC Contract Collateral whether or not a new FERC Sub-Agent is
appointed. Any release of the security interest in the FERC Contract Collateral
pursuant to this Section 11 shall not constitute a Default or an Event of
Default or a breach of any representation, warranty, covenant or agreement made
by any Grantor in this Security Agreement or made by any Grantor in any other
Loan Document.

12. Grant of License to Use Patent, Trademark and Copyright Collateral. For the
purpose of enabling the Administrative Agent to exercise rights and remedies
under Section 9 hereof at such time as the Administrative Agent shall be
lawfully entitled to exercise such rights and remedies, each Grantor hereby
grants to the Administrative Agent an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to any Grantor) to
use, license or sublicense any of the Copyrights, Patents and Trademarks, now
owned or hereafter acquired by any Grantor, and wherever the same may be
located, and including in such license reasonable access to all media in which
any of the licensed items may be recorded or stored. The use of such license by
the Administrative Agent shall be exercised, at the option of the Administrative
Agent for any purpose appropriate in connection with the exercise of remedies
hereunder, only upon the occurrence and during the continuance of an Event of
Default; provided that any license, sublicense or other transaction entered into
by the Administrative Agent in accordance herewith shall be binding upon each
Grantor notwithstanding any subsequent cure of an Event of Default. The
Administrative Agent agrees to apply the net proceeds received from any license
as provided in Section 8 hereof.

13. Limitation on Duties Regarding Presentation of Collateral.

(a) The Administrative Agent’s sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the UCC or otherwise, shall be to deal with it in the same
manner as the Administrative Agent deals with similar property for its own
account. None of the Administrative Agent nor any Secured Party nor any of their
respective directors, officers, employees, agents or advisors shall be liable
for failure to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of any Grantor or any other
Person or to take any other action whatsoever with regard to the Collateral or
any part thereof. The powers conferred on the Administrative Agent and the other
Secured Parties hereunder are solely to protect the Administrative Agent’s and
the Secured Parties’ interests in the Collateral and shall not impose any duty
upon the Administrative Agent or any Secured Party to exercise any such powers.
The Administrative Agent and other Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees, agents or
advisors shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.

(b) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of the Receivables and Contracts (that constitute Collateral)
and neither the Administrative Agent nor any Secured Party shall have any
obligation or liability under any Receivable or under any Contract, in each
case, that constitutes Collateral, by reason of or arising out of this Security
Agreement or the receipt by the Administrative Agent or any Secured Party of any
payment relating to such Receivable or Contract pursuant hereto, nor shall the
Administrative Agent or any Secured Party be obligated in any manner to perform
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Receivable or under or pursuant to any Contract, in each case, that constitutes
Collateral, to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Receivable or under any Contract, in each
case, that constitutes Collateral, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.

14. Powers Coupled with an Interest. All authorizations and agencies herein
contained with respect to the Collateral are irrevocable and powers coupled with
an interest.

15. Notices. (a) Notices, requests and demands to or upon the Administrative
Agent or the Borrower shall be effected in the manner set forth in Section 11.2
of the Credit Agreement and (b) notices, requests and demands to or upon any
other Grantor shall be effected in the manner set forth in Section 14 of the
Guarantee.

16. Waivers by Grantor. Each Grantor waives, to the maximum extent permitted by
law, demand, presentment for payment, notice of non-payment, protest, notice of
protest, notice of intent to accelerate, notice of acceleration, or any other
notice or formalities of any kind (except notice of the time and place of public
or private sale of the Collateral and any notice specifically provided herein,
or in the other Loan Documents) to or upon such Grantor or any other Person (all
and each of which are hereby expressly waived) with respect to the Obligations,
and waives notice of the amount of the Obligations outstanding at any time.

17. Authority of Administrative Agent. Each Grantor acknowledges that the rights
and responsibilities of the Administrative Agent under this Security Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Security Agreement shall, as between the Administrative Agent and
the Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Secured Parties
with full and valid authority so to act or refrain from acting, and no Grantor
shall be under any obligation, or entitlement, to make any inquiry respecting
such authority.

18. Indemnification. Each Grantor agrees, jointly and severally, to (i) save the
Administrative Agent and each Secured Party harmless from, any and all
liabilities, costs and expenses (including, without limitation, reasonable and
documented fees and expenses of counsel) with respect to, or resulting from, any
delay in paying, any and all Other Taxes which may be payable or determined to
be payable with respect to any of the Collateral and (ii) indemnify each Secured
Party as set forth in Section 11.6(e) of the Credit Agreement (or as may be
applied to such Grantor pursuant to Section 12(b) of the Guarantee). The
agreements in this Section 18 shall survive the termination of this Security
Agreement and the payment of the Loans, Reimbursement Obligations and all other
amounts payable under the Loan Documents.

19. Termination and Release.

(a) In addition to, and not in limitation of, the release provisions contained
in Sections 10.10 and 11.5 of the Credit Agreement, this Security Agreement
(including as to any power of attorney, authorization or agency granted herein)
and all other security interests granted hereby shall terminate when all the
Obligations have been paid in full (other than inchoate claims in respect of
indemnities for which no claim has been made or is known to any Grantor at the
time all other Obligations have been paid in full), no Letters of Credit remain
outstanding (unless such Letters of Credit have been Cash Collateralized) and
the Commitments no longer remain in effect.

 

-28-

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

(b) In connection with any termination or release pursuant to paragraph (a) or
Sections 10.10 or 11.5 of the Credit Agreement, the Administrative Agent shall
promptly execute and deliver to each Grantor, at such Grantor’s expense, all UCC
termination statements and similar documents that such Grantor shall reasonably
request to evidence such termination or release, and will duly assign and
transfer to such Grantor, such of the Collateral that may be in the possession
of the Administrative Agent and has not theretofore been sold or otherwise
applied or released pursuant to this Security Agreement. Any execution and
delivery of documents pursuant to this Section 19 shall be without recourse to
or representation or warranty by the Administrative Agent or any other Secured
Party.

20. Severability. Any provision of this Security Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

21. Paragraph Headings. The paragraph headings used in this Security Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.

22. No Waiver; Cumulative Remedies. None of the Administrative Agent nor any
other Secured Party shall by any act (except by a written instrument pursuant to
Section 23 hereof), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Administrative Agent or any other Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or any other such Secured Party
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any rights or remedies provided by law.

23. Waivers and Amendments; Successors and Assigns; Governing Law. None of the
terms or provisions of this Security Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
each Grantor and the Administrative Agent (subject to the Administrative Agent’
obtaining the requisite consents of any applicable Secured Parties pursuant to
Section 11.1 of the Credit Agreement and, solely to the extent such instrument
waives, amends, supplements or otherwise modifies Section 10, the written
consent of each Subordinated Party adversely affected thereby); provided that
any provision of this Security Agreement may be waived by the Administrative
Agent in a written instrument executed by the Administrative Agent (subject to
the Administrative Agent’s obtaining the requisite consents of the applicable
Secured Parties pursuant to Section 11.1 of the Credit Agreement and, solely to
the extent such instrument waives, amends, supplements or otherwise modifies
Section 10, the written consent of each Subordinated Party adversely affected
thereby); provided further that, reasonable updates and modifications to the
schedules hereto shall not require the consent of the Administrative Agent or
any other Secured Party. This Security Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent, and the other Secured Parties and their respective
successors and assigns. THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

-29-

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

24. Additional Grantors. Each Subsidiary of any Loan Party which is required
pursuant to Section 7.13 of the Credit Agreement to become party to this
Security Agreement shall become a Grantor for all purposes of this Security
Agreement upon execution and delivery by such Subsidiary of a Supplement in the
form of Annex D hereto.

25. Submission to Jurisdiction; Waivers. Each Grantor hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Security Agreement and the other Loan Documents to which it is
a party, or for recognition and enforcement of any judgment in respect thereof,
to the exclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New
York, and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address set forth in (a) Section 11.2 of the Credit Agreement, with respect to
the Borrower or (b) Section 15 of the Guarantee, with respect to each other
Grantor, or at such other address of which the Administrative Agent shall have
been notified pursuant thereto; and

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction.

26. Waiver of Certain Damages. Each Grantor and the Administrative Agent (on
behalf of themselves and each Secured Party) hereby waives, to the maximum
extent not prohibited by law, any right it may have to claim or recover in any
legal action or proceeding referred to in Section 25 any special, exemplary,
punitive or consequential damages.

27. WAIVER OF JURY. EACH OF THE GRANTOR AND THE ADMINISTRATIVE AGENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.

28. Counterparts. This Security Agreement may be executed by one or more of the
parties to this Security Agreement on any number of separate counterparts
(including by facsimile transmission or other electronic transmission of
signature pages hereto), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of an executed
signature page of this Security Agreement by facsimile transmission or other
electronic transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Security Agreement signed by all
the parties shall be lodged with the Borrower and the Administrative Agent.

[SIGNATURE PAGE FOLLOWS]

 

-30-

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

IN WITNESS WHEREOF, each Grantor has caused this Security Agreement to be duly
executed and delivered as of the date first above written.

 

SPRAGUE OPERATING RESOURCES LLC, as a Grantor

By:      

Name:

Title:

SPRAGUE ENERGY SOLUTIONS INC., as a Grantor

By:      

Name:

Title:

SPRAGUE TERMINAL SERVICES LLC, as a Grantor

By:      

Name:

Title:

SPRAGUE CONNECTICUT PROPERTIES LLC, as a Grantor

By:      

Name:

Title:

SPRAGUE RESOURCES LP, as a Grantor By:      

Name:

Title:

Signature Page to Security Agreement

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

Schedule I

NAMES, FORM OF ORGANIZATION, AND LOCATION (AND JUSTIFICATION THEREFOR)

OF GRANTORS

 

Name of

Grantor

   Type of
Organization    Jurisdiction of
Organization/Formation    Organizational
Identification
Number    Location of
Records

 

 

-Sch. I-1-

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

Schedule II

INTELLECTUAL PROPERTY

 

-Sch. II-1-

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

Schedule III

INVENTORY AND EQUIPMENT

(a) Properties Owned by the Grantor:

(b) Properties Leased by the Grantor

(Include Landlord’s Name):

(c) Public Warehouses or other Locations pursuant to Bailment or Consignment
Arrangements

(include name of Warehouse Operator or other Bailee or Consignee):

 

-Sch. III -1-

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

Schedule IV

MATERIAL CONTRACTS

 

-Sch. IV-1-

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

Schedule V

DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITY ACCOUNTS

 

-Sch. V-1-

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

Schedule VI

COMMERCIAL TORT CLAIMS

 

-Sch. VI-1-

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

ANNEX A

FORM OF

PATENT SECURITY AGREEMENT

PATENT SECURITY AGREEMENT (this “Agreement”), effective as of             ,
20    , is made by each of the signatories hereto (the “Grantors”) in favor of
JPMORGAN CHASE BANK, N.A. ,having its principal place of business at
            , as Administrative Agent (in such capacity, the “Administrative
Agent”), under the Credit Agreement, dated as of October 30, 2013 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among SPRAGUE OPERATING RESOURCES LLC (the “Borrower”), the several
banks and other financial institutions or entities from time to time parties
thereto, the Administrative Agent and the other agents party thereto.

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make loans to, and the Issuing Lenders have agreed to issue letters of credit
for the account of, the Borrower upon the terms and subject to the conditions
set forth therein;

WHEREAS, the Grantors and the other grantors thereunder have executed and
delivered a Security Agreement, dated as of October 30, 2013, in favor of the
Administrative Agent (as amended, supplemented, restated or otherwise modified
from time to time, the “Security Agreement”);

WHEREAS, pursuant to the Security Agreement, the Grantors have granted to the
Administrative Agent a security interest in, inter alia, certain Intellectual
Property, including those Patents set forth on Exhibit A that constitute
Collateral; and

NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, each of the Grantors agrees, for the benefit of the
Administrative Agent, as follows:

1. Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided or provided by reference in the Credit Agreement and
the Security Agreement, as applicable.

2. Grant of Security Interest for Obligations. Each of the Grantors hereby
grants a continuing security interest in, all of such Grantor’s right, title and
interest in, to and under the Patents constituting Collateral (including,
without limitation, those items listed on Exhibit A hereto) (collectively, the
“Patent Collateral”), to the Administrative Agent, as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.

3. Purpose. This Agreement has been executed and delivered by the Grantors for
the purpose of recording the grant of security interest herein with the United
States Patent and Trademark Office. The security interest granted hereby has
been granted to the Administrative Agent in connection with the Security
Agreement and is expressly subject to the terms and conditions thereof. The
Security Agreement (and all rights and remedies of the Administrative Agent
thereunder) shall remain in full force and effect in accordance with its terms.

 

-Annex A-1-

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

4. Acknowledgment. Each of the Grantors does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Patent Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which (including
the remedies provided for therein) are incorporated by reference herein as if
fully set forth herein. In the event of any conflict between this Agreement and
the Security Agreement, the terms of the Security Agreement shall govern.

5. Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original, but all of which together constitute one and the
same original.

6. Governing Law. This Agreement and the right and obligations of the parties
hereunder shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.

 

-Annex A-2-

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers as of the day and year first
above written.

 

[GRANTOR] By:       Name:   Title:

 

[GRANTOR] By:       Name:   Title:

 

-Annex A-3-

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

Exhibit A

PATENTS

 

Serial No. or

Patent No.

  

Inventor

  

Issue or File Date

  

Title

PATENT LICENSES

 

United States Patent No.

  

Owner

  

Issue Date

PATENT APPLICATIONS

 

Serial No.

  

Owner

  

Nature of Interest

  

Filing Date

 

-Annex A-4-

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

ANNEX B

FORM OF

TRADEMARK SECURITY AGREEMENT

TRADEMARK SECURITY AGREEMENT (this “Agreement”), effective as of
                , 20    , is made by each of the signatories hereto (the
“Grantors”) in favor of JPMORGAN CHASE BANK, N.A., having its principal place of
business at                 , as Administrative Agent (in such capacity, the
“Administrative Agent”), under the Credit Agreement, dated as of October 30,
2013 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among SPRAGUE OPERATING RESOURCES LLC (the
“Borrower”), the several banks and other financial institutions or entities from
time to time parties thereto, the Administrative Agent and the other agents
party thereto.

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make loans to, and the Issuing Lenders have agreed to issue letters of credit
for the account of, the Borrower upon the terms and subject to the conditions
set forth therein;

WHEREAS, the Grantors and the other grantors thereunder have executed and
delivered an Security Agreement, dated as of October 30, 2013 in favor of the
Administrative Agent (as amended, supplemented, restated or otherwise modified
from time to time, the “Security Agreement”);

WHEREAS, pursuant to the Security Agreement, the Grantors have granted to the
Administrative Agent a security interest in, inter alia, certain Intellectual
Property, including those Trademarks set forth on Exhibit A that constitute
Collateral; and

NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, each of the Grantors agrees, for the benefit of the
Administrative Agent, as follows:

1. Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided or provided by reference in the Credit Agreement and
the Security Agreement, as applicable.

2. Grant of Security Interest for Obligations. Each of the Grantors hereby
grants a continuing security interest in, all of such Grantor’s right, title and
interest in, to and under the Trademarks constituting Collateral (including,
without limitation, those items listed on Exhibit A hereto and all goodwill
related thereto) (collectively, the “Trademark Collateral”), to the
Administrative Agent, as collateral security for the prompt and complete payment
and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.

3. Purpose. This Agreement has been executed and delivered by the Grantors for
the purpose of recording the grant of security interest herein with the United
States Patent and Trademark Office. The security interest granted hereby has
been granted to the Administrative Agent in connection with the Security
Agreement and is expressly subject to the terms and conditions thereof. The
Security Agreement (and all rights and remedies of the Administrative Agent
thereunder) shall remain in full force and effect in accordance with its terms.

 

-Annex B-1-

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

4. Acknowledgment. Each of the Grantors does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Trademark Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein. In the event of any conflict between this
Agreement and the Security Agreement, the terms of the Security Agreement shall
govern.

5. Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original, but all of which together constitute one and the
same original.

6. Governing Law. This Agreement and the right and obligations of the parties
hereunder shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.

[Remainder of page intentionally left blank]

 

-Annex B-2-

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers as if the day and year first
above written.

 

[GRANTOR] By:       Name:   Title:

 

[GRANTOR] By:       Name:   Title:

 

-Annex B-3-

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

Exhibit A

TRADEMARKS

 

Serial No.

or Registration No.

  

Issue or File Date

(Renewal Date, if Applicable)

  

Mark

TRADEMARK LICENSES

 

Serial No.

or Registration No.

  

Owner

  

Issue or File Date

(Renewal Date,

If Applicable

  

Mark

TRADEMARK APPLICATIONS

 

Serial Number

  

Filing Date

  

Mark

 

-Annex B-4-

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

ANNEX C

FORM OF COPYRIGHT SECURITY AGREEMENT

COPYRIGHT SECURITY AGREEMENT (this “Agreement”), effective as of
                , 20    , is made by each of the signatories hereto (the
“Grantors”) in favor of JPMORGAN CHASE BANK, N.A., having its principal place of
business at                 , as Administrative Agent (in such capacity, the
“Administrative Agent”), under the Credit Agreement, dated as of October 30,
2013 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among SPRAGUE OPERATING RESOURCES LLC (the
“Borrower”), the several banks and other financial institutions or entities from
time to time parties thereto, the Administrative Agent and other agents party
thereto.

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to
make loans to, and the Issuing Lenders have agreed to issue letters of credit
for, the account of the Borrower upon the terms and subject to the conditions
set forth therein;

WHEREAS, the Grantors and the other grantors thereunder have executed and
delivered an Security Agreement, dated as of October 30, 2013, in favor of the
Administrative Agent (as amended, restated , supplemented or otherwise modified
from time to time, the “Security Agreement”);

WHEREAS, pursuant to the Security Agreement, the Grantors have granted to the
Administrative Agent a security interest in, inter alia, certain Intellectual
Property, including those Copyrights set forth on Exhibit A that constitute
Collateral; and

NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, each of the Grantors agrees, for the benefit of the
Administrative Agent, as follows:

1. Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided or provided by reference in the Credit Agreement and
the Security Agreement, as applicable.

2. Grant of Security Interest for Obligations. Each of the Grantors hereby
grants a continuing security interest in, all of such Grantor’s right, title and
interest in, to and under the Copyrights constituting Collateral (including,
without limitation, those items listed on Exhibit A hereto) (collectively, the
“Copyright Collateral”), to the Administrative Agent, as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.

3. Purpose. This Agreement has been executed and delivered by the Grantors for
the purpose of recording the grant of security interest herein with the United
States Copyright Office. The security interest granted hereby has been granted
to the Administrative Agent in connection with the Security Agreement and is
expressly subject to the terms and conditions thereof. The Security Agreement
(and all rights and remedies of the Administrative Agent thereunder) shall
remain in full force and effect in accordance with its terms.

 

-Annex C-1-

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

4. Acknowledgment. Each of the Grantors does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Copyright Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein. In the event of any conflict between this
Agreement and the Security Agreement, the terms of the Security Agreement shall
govern.

5. Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original, but all of which together constitute one and the
same original.

6. Governing Law. This Agreement and the right and obligations of the parties
hereunder shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.

[Remainder of page intentionally left blank]

 

-Annex C-2-

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

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed
and delivered by its officer thereunto duly authorized, as of the date first
written above.

 

[NAME OF GRANTOR] By:       Name:   Title:

 

[NAME OF GRANTOR] By:       Name:   Title:

 

-Annex C-3-

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

Exhibit A

COPYRIGHTS

 

Registration No.

  

Country

  

Issue or File Date

  

Title of Work

COPYRIGHT LICENSES

 

Registration No.

  

Owner

  

Issue or File Date

  

Title of Work

COPYRIGHT APPLICATIONS

 

Title of Work

  

File Date

  

Application No.

 

 

-Annex C-4-

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

ANNEX D

ADDENDUM TO SECURITY AGREEMENT

Each of the undersigned, [NAME OF NEW SUBSIDIARY] (each a “New Grantor”,
together the “New Grantors”):

(A) agrees to all of the provisions of the Security Agreement, dated as of
October 30, 2013 (as amended, supplemented or otherwise modified prior to the
date hereof, the “Security Agreement”), made by SPRAGUE OPERATING RESOURCES LLC,
and each other party listed on Schedule I thereto (together with each Person
which may, from time to time, become party thereto as a Grantor, each a
“Grantor”, collectively, the “Grantors”), in favor of JPMORGAN CHASE BANK, N.A.,
as Administrative Agent (in such capacity, the “Administrative Agent”) for the
Secured Parties, made pursuant to the Credit Agreement, dated as of October 30,
2013, among SPRAGUE OPERATING RESOURCES LLC (the “Borrower”), the several banks
and other financial institutions or entities from time to time parties thereto,
the Administrative Agent and the other agents party thereto;

(B) effective on the date hereof, becomes a party to the Security Agreement, as
a Grantor, with the same effect as if the undersigned were an original signatory
to the Security Agreement and with the representations and warranties contained
therein being deemed to be made by it on and as of the date hereof;

(C) as additional collateral security for the prompt and complete payment when
due (whether at stated maturity, by acceleration or otherwise) of the
Obligations and in order to induce the Lenders to make and maintain outstanding
their Loans under the Credit Agreement and the other Loan Documents, hereby
grants to the Administrative Agent, for the benefit of the Secured Parties, a
security interest in all of the property listed in Section 2 of the Security
Agreement now owned or at any time hereafter acquired by such New Grantor or in
which such New Grantor now has or at any time in the future may acquire any
right, title or interest (collectively, the “New Grantor Collateral”);

(D) represents and warrants that the information provided on the attached
schedules disclose, with respect to it, all information that is required under
the Security Agreement to be disclosed by a Grantor; and

(E) the Schedules to the Security Agreement are hereby supplemented by (a) if a
supplement to any such Schedule is attached to this Supplement, by including the
items listed on such supplement to such Schedule in such Schedule, and (b) if
any such Schedule refers to the Collateral Certificate delivered by the Grantors
on the Closing Date, by deeming incorporated in such Collateral Certificate the
Supplement to Collateral Certificate delivered by the New Grantor to the
Administrative Agent on the date of this Supplement.

Terms defined in the Security Agreement and the Credit Agreement shall have such
defined meanings when used herein. This Addendum to Security Agreement and the
rights and obligations of the parties hereunder shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.

By its acceptance hereof, each undersigned New Grantor hereby ratifies and
confirms its respective obligations under the Security Agreement, as
supplemented hereby.

 

-Annex D-1-

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

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Addendum to Security Agreement, all as of the day and year written below.

 

[NAME OF NEW GRANTOR] By:       Name:   Title:

Dated:                         , 20    

 

ACCEPTED AND AGREED: JPMORGAN CHASE BANK, N.A.,     as Administrative Agent By:
      Name:   Title:

 

-Annex D-2-

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

Schedule I

NAME, FORM OF ORGANIZATION AND LOCATION OF NEW GRANTOR

 

-Annex D-3-

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

Schedule II

INTELLECTUAL PROPERTY

 

Registration No.

  

Country

  

Issue or File Date

  

Description/Title

  

Type of

Intellectual

Property

INTELLECTUAL PROPERTY LICENSES

 

Registration No.

  

Owner

  

Issue or File Date

  

Description/Title

  

Type of

Intellectual

Property

INTELLECTUAL PROPERTY APPLICATIONS

 

Description/Title

  

File Date

  

Application No.

 

 

-Annex D-4-

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

Schedule III

INVENTORY AND EQUIPMENT

 

-Annex D-5-

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

Schedule IV

MATERIAL CONTRACTS

 

-Annex D-6-

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

Schedule V

DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITY ACCOUNTS

 

-Annex D-7-

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

Schedule VI

COMMERCIAL TORT CLAIMS

 

-Annex D-8-

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

ANNEX E

INVENTORY ACKNOWLEDGMENT CERTIFICATE

[Date]

[NAME OF BAILEE/CONSIGNEE]

[ADDRESS]

Ladies and Gentlemen:

[NAME OF GRANTOR] (the “Grantor”) hereby notifies and acknowledges to [NAME OF
BAILEE/CONSIGNEE] (the “Company”) that it has granted to JPMORGAN CHASE BANK,
N.A. as Administrative Agent for the benefit of the Secured Parties (the
“Administrative Agent”) a security interest in all assets of the Grantor and the
proceeds thereof currently held or which may be delivered from time to time to
the Company at its facility located at [                            ] (the
“Product”).

The Grantor remains the owner of the Product and the Company can follow any and
all instructions of the Grantor until the Company shall have received written
notice from the Administrative Agent (a “Control Notice”) instructing the
Company to no longer take instruction from the Grantor. After receipt of a
Control Notice, the Grantor irrevocably authorizes and instructs the Company to
take instructions only from the Administrative Agent with respect to the Product
and any warehouse receipts or documents of title related thereto. The Company
shall be fully protected in relying upon any Control Notice and any subsequent
instructions from the Administrative Agent. The Grantor hereby irrevocably
agrees that delivery of any or all of the Product by the Company in accordance
with any such notification and instruction from the Administrative Agent shall
constitute delivery of such Product to a person whose receipt was rightful as
against the Grantor, notwithstanding that the Grantor is the holder or the
person to which delivery is to be made under or pursuant to any warehouse
receipt or other document of title.

By countersigning below, the Company (a) acknowledges the Administrative Agent’s
security interest in the Product and agrees to hold the Product for the benefit
of the Administrative Agent, (b) confirms that no party has advised the Company
that such party claims a security interest or lien in the Product or requested
the Company to hold the Product, or any portion thereof, for its benefit, and
(c) agrees that, without prior notice to the Administrative Agent, the Company
will not issue negotiable warehouse receipts or documents of title covering the
Product.

 

Sincerely, [GRANTOR], as Grantor By:       Name:   Title:

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ACKNOWLEDGED AND AGREED:

        JPMORGAN CHASE BANK, N.A., as

                Administrative Agent

        By:       Name:   Title:

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ACKNOWLEDGED AND AGREED:

 

[NAME OF BAILEE/CONSIGNEE] By:       Name:   Title:

INSERT CONTACT INFORMATION

 

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Exhibit C

to Credit Agreement

PLEDGE AGREEMENT

PLEDGE AGREEMENT, dated as of October 30, 2013, made by each party listed on
Schedule II hereto (each a “Pledgor” and, collectively, together with each
Person which may, from time to time, become party hereto as a Pledgor, the
“Pledgors”), in favor of JPMORGAN CHASE BANK, N.A., as administrative agent (in
such capacity, the “Administrative Agent”) for the Secured Parties defined in
the Credit Agreement referred to below.

RECITALS

WHEREAS, pursuant to the Credit Agreement, dated as of October 30, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among SPRAGUE OPERATING RESOURCES LLC (the “Borrower”), the
several banks and other financial institutions or entities from time to time
parties thereto (the “Lenders”), the Administrative Agent, the agents from time
to time parties thereto, the Lenders have severally agreed to make loans to and
participate in letters of credit issued on behalf of, and certain Lenders (the
“Issuing Lenders”) have agreed to issue letters of credit for the account of,
the Borrower upon the terms and subject to the conditions set forth therein.

NOW, THEREFORE, in consideration of the premises and to induce the Lenders and
the Administrative Agent to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrower, and the
Issuing Lenders to issue their letters of credit, under the Credit Agreement,
and for other good, fair and valuable consideration and reasonably equivalent
value, the receipt and sufficiency of which are hereby acknowledged by each
Pledgor, each Pledgor hereby agrees with the Administrative Agent, on behalf and
for the ratable benefit of the Secured Parties, as follows:

7. Defined Terms.

(a) Unless otherwise defined herein, capitalized terms which are defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

(b) The following terms shall have the following meanings:

“Additional Pledged LLC Interest”: as defined in any supplement to this Pledge
Agreement delivered pursuant to Section 5(e) hereof.

“Additional Pledged Partnership Interest”: as defined in any supplement to this
Pledge Agreement delivered pursuant to Section 5(e) hereof.

“Additional Pledged Stock”: as defined in any supplement to this Pledge
Agreement delivered pursuant to Section 5(e) hereof.

“Administrative Agent”: as defined in the Preamble hereto.

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“Borrower”: as defined in the Recitals hereto.

“Collateral Account”: any account established to hold money Proceeds, maintained
under the sole dominion and control of the Administrative Agent, subject to
withdrawal by the Administrative Agent for the account of the Secured Parties
only as provided in Section 8 hereof.

“Credit Agreement”: as defined in the Recitals hereto.

“Issuer”: each of the Persons identified on Schedule I or a supplement thereto
as an issuer of Pledged Stock, Pledged LLC Interests or Pledged Partnership
Interests.

“Issuing Lenders”: as defined in the Recitals hereto.

“Lenders”: as defined in the Recitals hereto.

“Limited Liability Company”: any Issuer identified as a limited liability
company on Part B of Schedule I hereto or in a supplement thereto.

“Limited Liability Company Agreement”: as to any Limited Liability Company, its
certificate of formation and operating agreement or other Governing Documents,
as each may be amended, supplemented or otherwise modified from time to time.

“LLC Interest”: any Limited Liability Company membership interest or economic
interest.

“Partnership”: any Issuer identified as a limited or general partnership on Part
C of Schedule I hereto or in a supplement thereto.

“Partnership Agreement”: as to any Partnership, its certificate of formation, if
applicable, and partnership agreement or other Governing Documents, as each may
be amended, supplemented or otherwise modified from time to time.

“Partnership Interest”: any partnership interest or economic interest in a
Partnership.

“Permitted Liens”: Liens permitted on the Pledged Collateral pursuant to the
Credit Agreement.

“Pledge Agreement”: this Pledge Agreement, as amended, supplemented or otherwise
modified from time to time.

“Pledged Collateral”: the Pledged Stock, the Pledged LLC Interests, the Pledged
Partnership Interests, and all Proceeds, except that the Pledged Collateral
shall not include more than 65% of the total combined voting power of all
classes of stock entitled to vote of any Exempt CFC.

“Pledged LLC Interest”: any and all of each Pledgor’s interests, including units
of membership interest, in the Limited Liability Companies as set forth in
Schedule I attached hereto and any Additional Pledged LLC Interest at any time
pledged pursuant to Section 5(e), including, without limitation, all its rights
to participate in the operation or management of the Limited Liability Companies
and all its rights to properties, assets, member interests and distributions
(except as otherwise provided herein) under the Limited Liability Company
Agreements in respect of such membership interests, together with all
certificates, options or rights of any nature whatsoever which may be issued or
granted by any of the Issuers to any of the Pledgors in respect of the Pledged
LLC Interests while this Pledge Agreement is in effect.

 

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“Pledged Partnership Interest”: any and all of each Pledgor’s interests,
including units of partnership interest, in the Partnerships as set forth in
Schedule I attached hereto and any Additional Pledged Partnership Interest at
any time pledged pursuant to Section 5(e), including, without limitation, all
its rights to participate in the operation or management of the Partnerships and
all its rights to properties, assets, partnership interests and distributions
(except as otherwise provided herein) under the Partnership Agreements in
respect of such Partnership Interests, together with all certificates, options
or rights of any nature whatsoever which may be issued or granted by any of the
Issuers to any of the Pledgors in respect of the Pledged Partnership Interests
while this Pledge Agreement is in effect.

“Pledged Stock”: the shares of Capital Stock listed on Part A of Schedule I
hereto, together with all stock certificates, options or rights of any nature
whatsoever which may be issued or granted by any of the Issuers to any of the
Pledgors in respect of the Pledged Stock while this Pledge Agreement is in
effect, together with any Additional Pledged Stock at any time pledged pursuant
to Section 5(e).

“Pledgors”: as defined in the Preamble hereto.

“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of
the UCC and, in any event, shall include, without limitation, all dividends,
distributions or other income from the Pledged Stock, Pledged LLC Interests,
Pledged Partnership Interests or collections with respect thereto.

“Securities Act”: the Securities Act of 1933, as amended.

“Security”: as defined in Article 8-102(15) of the UCC.

“Subordinated Obligations”: the portion of the Obligations arising under any
(a) Cash Management Bank Agreement to a Qualified Cash Management Bank (other
than such Obligations to the extent secured by property of any Loan Party held
in a Cash Management Account with such Cash Management Bank), (b) Commodity OTC
Agreement to a Qualified Counterparty (other than such Obligations to the extent
secured by property of any Loan Party consisting of cash or short-term
investments deposited as collateral by such Loan Party with such Qualified
Counterparty pursuant to the terms of such Commodity OTC Agreement) or
(c) Financial Hedging Agreement to a Qualified Counterparty (other than such
Obligations to the extent secured by property of any Loan Party consisting of
cash or short-term investments deposited as collateral by such Loan Party with
such Qualified Counterparty pursuant to the terms of such Financial Hedging
Agreement).

“Subordinated Parties”: collectively, the Cash Management Banks and Qualified
Counterparties, solely in such capacities and with respect to Subordinated
Obligations.

“UCC”: the Uniform Commercial Code from time to time in effect in the State of
New York or, as the context requires, any other applicable jurisdiction.

(c) The words “hereof”, “herein” and “hereunder” and words of similar import
when used in this Pledge Agreement shall refer to this Pledge Agreement as a
whole and not to any particular provision of this Pledge Agreement, and Section,
Schedule, Annex and Exhibit references are to this Pledge Agreement unless
otherwise specified.

 

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(d) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

8. Pledge; Grant of Security Interest. Subject to the terms hereof, each Pledgor
hereby delivers, pledges and assigns, and transfers, as appropriate, to the
Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties, all the Pledged Collateral in which it has any right, title or
interest, and hereby grants to the Administrative Agent, on behalf and for the
ratable benefit of the Secured Parties, a first priority security interest in
the Pledged Collateral, as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.

9. Transfer Powers. Concurrently with the delivery to the Administrative Agent
of each certificate representing one or more shares of the Pledged Stock,
Pledged LLC Interest or Pledged Partnership Interest which is a Security, each
Pledgor shall deliver an undated stock power or transfer power covering such
certificate, duly executed in blank with, if the Administrative Agent so
requests, signature guaranteed.

10. Representations and Warranties. Each Pledgor represents and warrants that:

(a) the shares of Pledged Stock listed on Part A of Schedule I, as supplemented
from time to time, constitute all the issued and outstanding shares of all
classes of the Capital Stock of the Issuers and are represented by the
certificates listed thereon;

(b) the Pledged LLC Interests listed on Part B of Schedule I, as supplemented
from time to time, constitute all the issued and outstanding LLC Interests of
all classes of the Issuers and are represented by the certificates listed
thereon, if such Pledged LLC Interests are Securities;

(c) the Pledged Partnership Interests listed on Part C of Schedule I, as
supplemented from time to time, constitute all the issued and outstanding
Partnership Interests of all classes of the Issuers owned by each Pledgor and
are represented by the certificates listed thereon, if such Pledged Partnership
Interests are Securities;

(d) all the shares of the Pledged Stock, the Pledged LLC Interests and the
Pledged Partnership Interests have been duly and validly issued and are fully
paid and, to the extent that such shares are assessable by their nature,
nonassessable;

(e) such Pledgor is the record and beneficial owner of, and has title to, the
Pledged Collateral, free of any and all Liens or options in favor of, or claims
of, any other Person, except the Lien created by this Pledge Agreement and
Permitted Liens;

(f) upon delivery to the Administrative Agent of the certificates evidencing the
Pledged Stock, the certificates evidencing the Pledged LLC Interests (to the
extent these certificates or the interests evidenced thereby constitute
Securities), if any, or the certificates evidencing the Pledged Partnership
Interests (to the extent these constitute Securities), if any (and assuming the
continuing possession by Administrative Agent of such certificates in accordance
with the requirements of applicable law), the Liens granted pursuant to this
Pledge Agreement shall constitute perfected Liens in favor of the Administrative
Agent, on behalf and for the ratable benefit of the Secured Parties, on the
Pledged Collateral as collateral security for the Obligations, which Liens will
be prior to all other Liens on the Pledged Collateral of such Pledgor, other
than Permitted Liens, and which are enforceable as such against all creditors of
such Pledgor and any Person purporting to purchase such Pledged Collateral from
such Pledgor;

 

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(g) upon the filing of UCC-1 (or equivalent) financing statements in the
jurisdictions referenced on Schedule II or in a supplement thereto, the Liens
granted pursuant to this Pledge Agreement on that portion of the Pledged
Collateral not perfected as described in Section 4(f) shall constitute perfected
Liens in favor of the Administrative Agent, on behalf and for the ratable
benefit of the Secured Parties, on such Pledged Collateral as collateral
security for the Obligations, which Liens will be prior to all other Liens on
such Pledged Collateral of such Pledgor and which are enforceable as such
against all creditors of such Pledgor and any Person purporting to purchase such
Pledged Collateral from such Pledgor;

(h) none of the Pledged LLC Interests or Pledged Partnership Interests (i) is
dealt in or traded on securities exchanges or in securities markets, (ii) is by
its terms expressly subject to Article 8 of the UCC, (iii) constitute an
investment company security or (iv) is held in a securities account (in each
case within the meaning of Section 8-103(c) of the UCC);

(i) all consents of each member in each Limited Liability Company or Partnership
to the grant of the security interests provided hereby and to the transfer of
the Pledged LLC Interests or Pledged Partnership Interests, as the case may be,
to the Administrative Agent or its designee pursuant to the exercise of any
remedies under Section 8 have been obtained and are in full force and effect;

(j) such Pledgor’s location (for purposes of Section 9-307 of the UCC) is, and
for the four (4) months preceding the date hereof has been, the place specified
for such Pledgor on Schedule II. Such Pledgor, if not a “registered
organization” as defined in the UCC, is so designated on Schedule II and has
only one place of business, the location of which is at the place specified for
such Pledgor on Schedule II; and

(k) (i) the exact legal name of such Pledgor is as specified for such Pledgor on
Schedule II; and (ii) such Pledgor has not changed its legal name in the twelve
(12) months preceding the date hereof.

11. Covenants. Each Pledgor covenants and agrees with the Administrative Agent
that, from and after the date of this Pledge Agreement until the Obligations are
paid in full, no Letters of Credit remain outstanding (unless such Letters of
Credit have been fully Cash Collateralized) and the Commitments have been
terminated:

(a) If any Pledgor shall, as a result of its ownership of any Pledged
Collateral, become entitled to receive or shall receive any stock certificate,
partnership interest certificate or membership interest certificate or similar
certificate evidencing such interest (including, without limitation, any
certificate representing a stock dividend or a distribution in connection with
any reclassification, increase or reduction of capital or any certificate issued
in connection with any reorganization), option or rights, whether in addition
to, in substitution for, as a conversion of, or in exchange for any shares of
any Pledged Collateral, or otherwise in respect thereof, such Pledgor shall
accept the same as the Administrative Agent’s and the Secured Parties’ agent,
hold the same as collateral in trust for the Administrative Agent and the
Secured Parties and deliver the same forthwith to the Administrative Agent in
the exact form received, and duly indorsed by such Pledgor to the Administrative
Agent, if required, together with an undated stock or transfer power covering
such certificate duly executed in blank and with, if the Administrative Agent so
requests, signature guaranteed, to be held by the Administrative Agent, on
behalf and for the ratable benefit of the Secured Parties, subject to the terms
hereof as additional collateral security for the Obligations. Any sums paid upon
or in respect of any Pledged Collateral upon the liquidation or dissolution of
any of the Issuers shall be paid over to the Administrative Agent to be held by
it hereunder on behalf and for the ratable benefit of the Secured Parties as
additional collateral security for the Obligations, and in case any distribution
of capital shall be

 

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made on or in respect of any Pledged Collateral or any property shall be
distributed upon or with respect to any Pledged Collateral pursuant to the
recapitalization or reclassification of the capital of any of the Issuers or
pursuant to the reorganization thereof, the property so distributed shall be
delivered to the Administrative Agent to be held by it on behalf and for the
ratable benefit of the Secured Parties, subject to the terms hereof, as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of any Pledged Collateral shall be
received by any Pledgor, such Pledgor shall, until such money or property is
paid or delivered to the Administrative Agent, hold such money or property in
trust for the Administrative Agent and the Secured Parties segregated from other
funds of such Pledgor, as additional collateral security for the Obligations.

(b) Without the prior written consent of the Administrative Agent, such consent
not to be unreasonably withheld and except as permitted under the Credit
Agreement, no Pledgor will (i) vote to enable, or take any other action to
permit, any of the Issuers to issue any stock or other equity securities of any
nature or to issue any other securities convertible into or granting the right
to purchase or exchange for any stock or other equity securities of any of the
Issuers, or (ii) sell, assign, transfer, exchange or otherwise dispose of, or
grant any option with respect to, any Pledged Collateral, or (iii) create, incur
or permit to exist any Lien or option in favor of, or any claim of any Person
with respect to, any of the Pledged Collateral, or any interest therein, except
for the Lien provided for by this Pledge Agreement and Permitted Liens, or
(iv) enter into any agreement or undertaking restricting the right or ability of
any Pledgor or the Administrative Agent to sell, assign or transfer any of the
Pledged Collateral.

(c) Each Pledgor shall maintain the security interest created by this Pledge
Agreement as a first, perfected security interest and shall defend such security
interest against the claims and demands of all Persons whomsoever. At any time
and from time to time, upon the written request of the Administrative Agent, and
at the sole expense of the Pledgors, each Pledgor will promptly and duly execute
and deliver such further instruments and documents and take such further actions
as the Administrative Agent may reasonably request for the purposes of obtaining
or preserving the full benefits of this Pledge Agreement and of the rights and
powers herein granted, including, without limitation, (i) the filing of any
financing statements, financing change statements or amendments to financing
statements or continuation statements under the UCC or any similar personal
property security legislation in effect in any jurisdiction with respect to the
Liens created hereby and (ii) taking any actions necessary to enable the
Administrative Agent to take delivery of the Pledged Collateral or to obtain
“control” (within the meaning of the UCC) with respect thereto. If any amount
payable under or in connection with any of the Pledged Collateral shall be or
become evidenced by any promissory note, other instrument or chattel paper, such
note, instrument or chattel paper shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Pledged Collateral pursuant to this Pledge
Agreement.

(d) Each Pledgor agrees, jointly and severally, to (i) pay, and to save the
Administrative Agent and each Secured Party harmless from, any and all
liabilities, costs and expenses (including, without limitation, reasonable and
documented fees and expenses of counsel) with respect to, or resulting from, any
delay in paying, any and all Other Taxes which may be payable or determined to
be payable with respect to any of the Pledged Collateral or in connection with
any of the transactions contemplated by this Pledge Agreement and (ii) indemnify
each Secured Party as set forth in Section 11.6 of the Credit Agreement. The
agreements in this Section 5(d) shall survive the termination of this Pledge
Agreement and the payment of the Loans, Reimbursement Obligations and all other
amounts payable under the Loan Documents.

(e) If any Pledgor shall at any time acquire any shares of Capital Stock of any
Subsidiary which is not an Issuer hereunder, such Pledgor shall (i) promptly
deliver such shares of Capital Stock, and all stock or other certificates
evidencing the same, to the Administrative Agent to be held as

 

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additional collateral security for the Obligations hereunder, except that no
more than 65% of the total combined voting power of all classes of Capital Stock
entitled to vote of any Exempt CFC and the stock or other certificates
evidencing the same must be delivered, (ii) promptly deliver to the
Administrative Agent a supplement to this Pledge Agreement, substantially in the
form of Exhibit A to this Pledge Agreement, duly completed, adding such shares
of Capital Stock to Schedule I hereto, and (iii) promptly cause such Subsidiary
to execute and deliver an acknowledgment and consent substantially in the form
appended as Annex I to Exhibit A to this Pledge Agreement. If any Wholly-Owned
Subsidiary (other than a Subsidiary that is an Exempt CFC or a Subsidiary
thereof) of a Pledgor which is not a Pledgor hereunder (a “New Pledgor”) shall
at any time acquire any shares of Capital Stock of any Subsidiary, such New
Pledgor shall (i) promptly deliver such shares of Capital Stock, and all stock
or other certificates evidencing the same, to the Administrative Agent to be
held as additional collateral security for the Obligations hereunder, except
that no more than 65% of the total combined voting power of all classes of
Capital Stock entitled to vote of any Exempt CFC or any Subsidiary thereof and
the stock or other certificates evidencing the same must be delivered,
(ii) promptly deliver to the Administrative Agent a supplement to this Pledge
Agreement, substantially in the form of Exhibit A to this Pledge Agreement, duly
completed, including such New Pledgor as a Pledgor hereunder and adding such
shares of Capital Stock to Schedule I hereto, and (iii) promptly cause such
Subsidiary to execute and deliver an acknowledgment and consent substantially in
the form appended as Annex I to Exhibit A to this Pledge Agreement.

(f) Such Pledgor will not (i) without ten (10) Business Days’ prior written
notice to the Administrative Agent, change its location (for purposes of
Section 9-307 of the UCC) from that specified in Section 4(j), (ii) without ten
(10) Business Days’ prior written notice to the Administrative Agent, change its
name, identity or structure or (iii) unless it shall give 30 days’ written
notice to such effect to the Administrative Agent and shall have made any filing
under the UCC as the Administrative Agent may reasonably request to maintain the
perfected security interest granted pursuant to this Pledge Agreement,
reincorporate or reorganize under the laws of another jurisdiction.

(g) Such Pledgor acknowledges and agrees that (i) to the extent each interest in
any Partnership controlled now or in the future by such Pledgor and pledged
hereunder is a Security, such interest shall be certificated and (ii) each such
interest shall at all times hereafter continue to be such a Security and
represented by such certificate. Such Pledgor further acknowledges and agrees
that with respect to any interest in any Partnership controlled now or in the
future by such Pledgor and pledged hereunder that is not a Security such Pledgor
shall at no time elect to treat any such interest as a “Security”, nor shall
such interest be represented by a certificate, unless such Pledgor provides
prior written notification to the Administrative Agent of such election and such
interest is thereafter represented by a certificate that is promptly delivered
to the Administrative Agent pursuant to the terms hereof.

12. Cash Dividends; Voting Rights.

(a) Unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice to the Pledgors of the
Administrative Agent’s intent to exercise its corresponding rights pursuant to
Section 7 below, each Pledgor shall be permitted to receive and retain all cash
distributions, dividends or preferred share redemption proceeds permitted to be
paid pursuant to the terms of the Credit Agreement and to exercise all voting,
corporate (with respect to Pledged Stock), member (with respect to Pledged LLC
Interests) and partnership (with respect to Pledged Partnership Interests)
rights with respect to the Pledged Collateral.

(b) Notwithstanding Section 6(a), each Pledgor agrees that no vote shall be cast
or corporate, partnership or member right exercised or other action taken which
would impair any Pledged Collateral or which would result in any violation of
any provision of the Credit Agreement, this Pledge Agreement or any other Loan
Document.

 

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13. Rights of the Administrative Agent.

(a) If an Event of Default shall occur and be continuing and the Administrative
Agent shall give notice of its intent to exercise such rights to any Pledgor:
(i) the Administrative Agent shall have the right to receive any and all cash
dividends or other cash distributions paid in respect of the Pledged Collateral
and make application thereof to the Obligations in the order provided in
Section 8(a) and (ii) at the request of the Administrative Agent, all shares of
the Pledged Stock, all Pledged LLC Interests and all Pledged Partnership
Interests shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise
(A) all voting, corporate or other rights pertaining to such shares of Pledged
Stock at any meeting of shareholders of any of the Issuers or otherwise; (B) all
members rights, powers and privileges with respect to the Pledged LLC Interests
to the same extent as a member under the applicable Limited Liability Company
Agreement; (C) all partnership rights, powers and privileges with respect to the
Pledged Partnership Interests to the same extent as a partner under the
applicable Partnership Agreement; and (D) any and all rights of conversion,
exchange, subscription and any other rights, privileges or options pertaining to
such shares of the Pledged Collateral as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its discretion any and
all of the Pledged Collateral upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or company
structure of any of the Issuers, or upon the exercise by any Pledgor or the
Administrative Agent of any right, privilege or option pertaining to such shares
or interests of the Pledged Collateral, and in connection therewith, the right
to deposit and deliver any and all of the Pledged Collateral with any committee,
depository, transfer agent, registrar or other designated agency upon such terms
and conditions as it may determine), all without liability except to account for
property actually received by it, but the Administrative Agent shall have no
duty to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.

(b) The rights of the Administrative Agent hereunder shall not be conditioned or
contingent upon the pursuit by the Administrative Agent of any right or remedy
against any of the Issuers or against any other Person which may be or become
liable in respect of all or any part of the Obligations or against any other
collateral security therefor, guarantee thereof or right of offset with respect
thereto. The Administrative Agent shall not be liable for any failure to demand,
collect or realize upon all or any part of the Pledged Collateral or for any
delay in doing so, nor shall it be under any obligation to sell or otherwise
dispose of any Pledged Collateral upon the request of any Pledgor or any other
Person or to take any other action whatsoever with regard to the Pledged
Collateral or any part thereof.

14. Remedies.

(i) If an Event of Default shall have occurred and be continuing, at any time at
the Administrative Agent’s election (or at the direction of the Required
Lenders), the Administrative Agent shall apply all or any part of the Proceeds
held in any Collateral Account in payment of the Obligations in the following
order:

3. First, to pay incurred and unpaid fees and expenses of the Issuing Lenders
and Agents under the Loan Documents;

4. Second, to the Administrative Agent, for application by it towards payment of
all amounts then due and owing and remaining unpaid in respect of interest and
fees pro rata among the Secured Parties according to the amounts of such
Obligations (other than the Subordinated Obligations) then due and owing and
remaining unpaid to the Secured Parties;

 

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5. Third, to the Administrative Agent, for application by it towards (i) payment
of all principal on all Loans then outstanding and all Unreimbursed Amounts then
outstanding and (ii) Cash Collateralizing any outstanding Letters of Credit, pro
rata among the Secured Parties according to the amounts of the Obligations to be
so paid or Cash Collateralized under this clause (iii) owing to the Secured
Parties;

6. Fourth, to the Administrative Agent, for application by it towards payment of
all other amounts then due and owing and remaining unpaid in respect of the
Obligations (other than the Subordinated Obligations), pro rata among the
Secured Parties according to the amounts of such Obligations (other than the
Subordinated Obligations) then due and owing and remaining unpaid to the Secured
Parties;

7. Fifth, to the Administrative Agent, for application by it towards prepayment
of the Obligations (other than the Subordinated Obligations), pro rata among the
Secured Parties according to the amounts of the Obligations (other than the
Subordinated Obligations) being so prepaid then held by the Secured Parties;

8. Sixth, to the Administrative Agent, for application by it towards payment of
all amounts then due and owing and remaining unpaid in respect of the
Subordinated Obligations and prepayment of the remaining Subordinated
Obligations, pro rata among the Subordinated Parties according to the amounts of
the Subordinated Obligations then due and owing and remaining unpaid or being so
prepaid then held by the Subordinated Parties; and

9. Seventh, any balance of such Proceeds remaining after the Obligations shall
have been paid in full, no Letters of Credit shall be outstanding and the
Commitments shall have terminated, shall be paid over to the applicable Pledgor
or to whomsoever else may be lawfully entitled to receive the same.

(b) If an Event of Default shall occur and be continuing, the Administrative
Agent, on behalf of the Secured Parties, may exercise, in addition to all other
rights and remedies granted to it in this Pledge Agreement, the Loan Documents
(including all of the Security Documents) and in any other instrument or
agreement securing, evidencing or relating to any of the Obligations, all rights
and remedies of a secured party under the UCC. In such circumstances, without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon any Pledgor, any of the Issuers or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may transfer
all or any part of the Pledged Collateral into the Administrative Agent’s name
or the name of its nominee or nominees, and/or may forthwith collect, receive,
appropriate and realize upon the Pledged Collateral, or any part thereof, and/or
may forthwith sell, assign, give option or options to purchase or otherwise
dispose of and deliver the Pledged Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, in the over-the-counter market, at any exchange, broker’s board or office
of the Administrative Agent or any Secured Party or elsewhere upon such terms
and conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk and/or may take such other actions as may be available under applicable
law. The Administrative Agent or any Secured Party shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Pledged
Collateral so sold, free of any right or equity of redemption in any Pledgor,
which right or equity

 

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is hereby waived or released. The Administrative Agent shall apply any Proceeds
from time to time held by it and the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental to
the care or safekeeping of any of the Pledged Collateral or in any way relating
to the Pledged Collateral or the rights of the Administrative Agent and the
other Secured Parties arising out of the exercise by the Administrative Agent
hereunder, including, without limitation, documented fees and disbursements of
counsel, to the payment in whole or in part of the Obligations, in such order as
is provided in Section 8(a), and only after such application and after the
payment by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-615 of the UCC, or
required pursuant to clause (vi) of Section 8(a), need the Administrative Agent
account for the surplus, if any, to any Pledgor. To the extent permitted by
applicable law, each Pledgor waives all claims, damages and demands it may
acquire against the Administrative Agent or any other Secured Party arising out
of the exercise by the Administrative Agent or any other Secured Party of any of
its rights hereunder. If any notice of a proposed sale or other disposition of
Pledged Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least ten (10) days before such sale or other
disposition. Each Pledgor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of Pledged Collateral are insufficient to pay
the Obligations(including the documented fees and disbursements of counsel
employed by the Administrative Agent or any Secured Party to collect such
deficiency to the extent provided therefor in Section 11.6 of the Credit
Agreement).

15. Registration Rights; Private Sales.

(a) If the Administrative Agent shall determine to exercise its right to sell
any or all of the shares of Pledged Stock, any or all of the Pledged LLC
Interests or any or all of the Pledged Partnership Interests pursuant to
Section 8 hereof, and if in the opinion of the Administrative Agent it is
necessary or advisable to have the Pledged Stock and/or the Pledged LLC
Interests and/or the Pledged Partnership Interests, or that portion thereof to
be sold, registered under the provisions of the Securities Act, each Pledgor
will cause any or all of the Issuers to (i) execute and deliver, and cause the
officers of such Issuers to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Administrative Agent, necessary or advisable to register the
shares of Pledged Stock and/or the Pledged LLC Interests and/or the Pledged
Partnership Interests or that portion of them to be sold, under the provisions
of the Securities Act, (ii) to use its best efforts to cause the registration
statement relating thereto to become effective and to remain effective for a
period of one year from the date of the first public offering of the shares of
Pledged Collateral, or that portion thereof to be sold, and (iii) to make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Pledgor agrees to
cause the Issuers to comply with the provisions of the securities or “Blue Sky”
laws of any and all jurisdictions which the Administrative Agent shall designate
and to make available to its security holders, as soon as practicable, an
earnings statement (which need not be audited) which will satisfy the provisions
of Section 11(a) of the Securities Act.

(b) Each Pledgor recognizes that the Administrative Agent may be unable to
effect a public sale of any or all the Pledged Collateral, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable to the Administrative Agent than if such sale
were a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to delay a sale of
any of the Pledged Collateral for the period of time necessary to permit the
Issuers to register such securities for public sale under the Securities Act, or
under applicable state securities laws, even if the Issuers would agree to do
so.

 

 

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(c) Each Pledgor further agrees to use its reasonable efforts to do or cause to
be done all such other acts as may be necessary to make any sale or sales of all
or any portion of the Pledged Collateral pursuant to this Pledge Agreement valid
and binding and in compliance with any and all other applicable Requirements of
Law. Each Pledgor further agrees that a breach of any of the covenants contained
in this Section will cause irreparable injury to the Administrative Agent and
the Secured Parties, that the Administrative Agent and the Secured Parties have
no adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section shall be specifically
enforceable against each Pledgor, and each Pledgor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is
continuing under the Credit Agreement.

16. Irrevocable Authorization and Instruction to Issuers. Each Pledgor hereby
authorizes and instructs each Issuer to comply with any instruction received by
it from the Administrative Agent in writing that (a) states that an Event of
Default has occurred and is continuing and (b) is otherwise in accordance with
the terms of this Pledge Agreement, without any other or further instructions
from any Pledgor, and each Pledgor agrees that each Issuer shall be fully
protected in so complying.

17. Agent’s Appointment as Attorney-in-Fact.

(a) Each Pledgor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent of the Administrative Agent, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of each Pledgor and in the name of
each Pledgor or in the Administrative Agent’s own name, from time to time in the
Administrative Agent’s discretion, for the purpose of carrying out the terms of
this Pledge Agreement, to take any and all appropriate action and to execute any
and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Pledge Agreement, including, without limitation,
any financing statements, endorsements, assignments or other instruments of
transfer.

(b) Each Pledgor hereby ratifies all that said attorneys shall lawfully do or
cause to be done pursuant to the power of attorney granted in Section 11(a). All
powers, authorizations and agencies contained in this Pledge Agreement are
coupled with an interest and are irrevocable until this Pledge Agreement is
terminated and the security interest created hereby is released.

(c) The power of attorney conferred hereby on the Administrative Agent is solely
to protect, preserve and realize upon its security interest in the Pledged
Collateral. This power of attorney shall neither create any agency on the part
of the Administrative Agent in favor of any Pledgor, nor any fiduciary
obligations or relationship on the part of any Secured Party for the benefit of
any Pledgor.

(d) Anything in this Section 11 to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights provided for in
this Section 11 unless an Event of Default has occurred and is continuing.

18. Limitation on Duties Regarding Pledged Collateral. The Administrative
Agent’s sole duty with respect to the custody, safekeeping and physical
preservation of the Pledged Collateral in its possession, under Section 9-207 of
the UCC or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar securities and property for its own
account, except that the

 

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Administrative Agent shall have no obligation to invest funds held in any
Collateral Account and may hold the same as demand deposits. None of the
Administrative Agent, any Secured Party or any of their respective directors,
officers, employees, agents or advisors shall be liable for failure to demand,
collect or realize upon all or any part of the Pledged Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Pledged Collateral upon the request of the Pledgors or any other Person
or to take any other action whatsoever with regard to the Pledged Collateral or
any part thereof. The powers conferred on the Administrative Agent and the other
Secured Parties hereunder are solely to protect the Administrative Agent’s and
the Secured Parties’ interests in the Collateral and shall not impose any duty
upon the Administrative Agent or any Secured Party to exercise any such powers.
The Administrative Agent and other Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees, agents or
advisors shall be responsible to any Pledgor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.

19. Authorization of Financing Statements. Each Pledgor hereby authorizes the
Administrative Agent to file financing statements with respect to the Pledged
Collateral in such form and in such filing offices as the Administrative Agent
reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Pledge Agreement.

20. Powers Coupled with an Interest. All authorizations and agencies herein
contained with respect to the Pledged Collateral are irrevocable and powers
coupled with an interest.

21. Notices. (a) Notices, requests and demands to or upon the Administrative
Agent or the Borrower shall be effected in the manner set forth in Section 11.2
of the Credit Agreement and (b) notices, requests and demands to or upon any
other Pledgor shall be effected in the manner set forth in Section 15 of the
Guarantee.

22. Authority of Administrative Agent. Each Pledgor acknowledges that the rights
and responsibilities of the Administrative Agent under this Pledge Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, right, request, judgment
or other right or remedy provided for herein or resulting or arising out of this
Pledge Agreement shall, as between the Administrative Agent and the Secured
Parties, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Pledgors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and neither the Pledgors
nor any Issuer shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.

23. Severability. Any provision of this Pledge Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

24. Paragraph Headings. The paragraph headings used in this Pledge Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.

25. No Waiver; Cumulative Remedies. The Administrative Agent or any Secured
Party shall not by any act (except by a written instrument pursuant to
Section 20 hereof), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have

 

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

acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Secured Party, any
right, power or privilege hereunder shall operate as a waiver thereof. No single
or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. A waiver by the Administrative Agent or any Secured Party of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Administrative Agent or any Secured Party would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights or remedies provided by law.

26. Waivers and Amendments; Successors and Assigns; Governing Law. None of the
terms or provisions of this Pledge Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
each Pledgor and the Administrative Agent (subject to the Administrative Agent
obtaining the requisite consents of any applicable Secured Parties pursuant to
Section 11.1 of the Credit Agreement), provided that any provision of this
Pledge Agreement may be waived by the Administrative Agent (subject to the
Administrative Agent obtaining the requisite consents of any applicable Secured
Parties pursuant to Section 11.1 of the Credit Agreement) in a letter or
agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent; provided further that, reasonable
updates and modifications to Schedule I hereto shall not require the consent of
the Administrative Agent or any other Secured Party and Schedule I shall be
deemed amended pursuant to any applicable Disposition permitted under the Credit
Agreement. This Pledge Agreement shall be binding upon the successors and
assigns of each Pledgor and shall inure to the benefit of the Administrative
Agent and the Secured Parties and their respective successors and assigns. THIS
PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.

27. Additional Pledgors. Each Subsidiary of a Pledgor which is required pursuant
to Section 5(e) to become party to this Pledge Agreement shall become a Pledgor
for all purposes of this Pledge Agreement upon execution and delivery by such
Subsidiary of a Supplement in the form of Exhibit A hereto.

28. Submission to Jurisdiction; Waivers. Each Pledgor hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Pledge Agreement and the other Loan Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to
the exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Pledgor at its
address set forth in (a) Section 11.2 of the Credit Agreement, with respect to
the Borrower or (b) Section 15 of the Guarantee, with respect to each other
Pledgor, or at such other address of which the Administrative Agent shall have
been notified pursuant thereto; and

 

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(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction.

29. Waiver of Certain Damages. Each Pledgor and the Administrative Agent (on
behalf of itself and each Secured Party) hereby waives, to the maximum extent
not prohibited by law, any right it may have to claim or recover in any legal
action or proceeding referred to in Section 22 any special, exemplary, punitive
or consequential damages.

30. WAIVER OF JURY TRIAL. EACH OF THE PLEDGORS AND THE ADMINISTRATIVE AGENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS PLEDGE AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.

31. Counterparts. This Pledge Agreement may be executed by one or more of the
parties to this Pledge Agreement on any number of separate counterparts
(including by facsimile transmission or other electronic transmission of
signature pages hereto), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of an executed
signature page of this Pledge Agreement by facsimile transmission or other
electronic transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Pledge Agreement signed by all
the parties shall be lodged with the Borrower and the Administrative Agent.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Pledge Agreement to
be duly executed and delivered as of the date first above written.

 

SPRAGUE OPERATING RESOURCES LLC By:       Name:   Title:

 

SPRAGUE RESOURCES LP By:       Name:   Title:

[Signature Page to Pledge Agreement]

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

ACKNOWLEDGMENT AND CONSENT

The undersigned, the Issuers referred to in the foregoing Pledge Agreement,
hereby acknowledge receipt of a copy thereof and agree to be bound thereby and
to comply with the terms thereof insofar as such terms are applicable to it. The
undersigned agree to notify the Administrative Agent promptly in writing of the
occurrence of any of the events described in Section 5(a) of the Pledge
Agreement. The undersigned further agree that the terms of Section 9(c) of the
Pledge Agreement shall apply to them, mutatis mutandis, with respect to all
actions that may be required of them under or pursuant to or arising out of
Section 9 of the Pledge Agreement.

 

SPRAGUE OPERATING RESOURCES LLC By:       Name:   Title:

 

SPRAGUE ENERGY SOLUTIONS INC. By:       Name:   Title:

 

SPRAGUE TERMINAL SERVICES LLC By:       Name:   Title:

 

SPRAGUE CONNECTICUT PROPERTIES LLC By:       Name:   Title:

[Signature Page to Acknowledgment and Consent to Pledge Agreement]

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

SCHEDULE I to

Pledge Agreement

A. DESCRIPTION OF PLEDGED STOCK

 

Name of

Issuer

 

Class of

Stock

 

Stock

Certificate

Number

 

Number of

Shares

 

Percentage

of Stock

Owned by

Pledgor

 

Pledgor

B. DESCRIPTION OF PLEDGED LLC INTERESTS

 

Name of

Issuer

 

Certificate

Number

 

Number of

Interests

 

Percentage of

LLC Interests

Owned by

Pledgor

 

Pledgor

C. DESCRIPTION OF PLEDGED PARTNERSHIP INTERESTS

 

Sch. I-1

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

SCHEDULE II to

Pledge Agreement

PLEDGORS, FILING OFFICES, LOCATION AND BASIS FOR DETERMINING LOCATION

 

Grantor

   Form of Organization    Location of Records

 

Sch. II-1

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

EXHIBIT A to

Pledge Agreement

PLEDGE AGREEMENT SUPPLEMENT

PLEDGE AGREEMENT SUPPLEMENT, [                ,         ] (this “Supplement”),
made by [NAME OF PLEDGOR], a              [corporation] and [NAME OF PLEDGOR], a
             [corporation] (each an “Existing Pledgor” and collectively, the
“Existing Pledgors”), [and by [NAME OF NEW PLEDGOR], a             
[corporation] and [NAME OF NEW PLEDGOR], a              [corporation] (each, a
“New Pledgor” and collectively, the “New Pledgors”]; collectively, the Existing
Pledgors and the New Pledgors are referred to herein as the “Pledgors”), in
favor of JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity,
the “Administrative Agent”) under the Credit Agreement (as defined in the Pledge
Agreement referred to below) for the benefit of the Secured Parties (as so
defined).

1. Reference is hereby made to that certain Pledge Agreement, dated as of
October 30, 2013 made by the Existing Pledgors in favor of the Administrative
Agent (as amended, supplemented or otherwise modified as of the date hereof, the
“Pledge Agreement”). Terms defined in the Pledge Agreement are used herein as
therein defined.

2. [Each Pledgor hereby confirms and reaffirms the security interest in the
Pledged Collateral granted to the Administrative Agent for the benefit of the
Secured Parties under the Pledge Agreement, and, as additional collateral
security for the prompt and complete payment when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations and in order to
induce the Lenders to make their respective extensions of credit to the
Borrower, and the Issuing Lenders to issue their letters of credit, under the
Credit Agreement and the other Loan Documents, each Pledgor hereby delivers to
the Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties, [all][65%] of the shares, membership or partnership interests of
Capital Stock of [INSERT NAME OF ADDITIONAL ISSUER], a             [corporation]
(each, an “Additional Issuer”, together the “Additional Issuers”) listed in
Schedule I hereto, together with all certificates, options, or rights of any
nature whatsoever which may be issued or granted by each Additional Issuer in
respect of such Capital Stock while the Pledge Agreement, as supplemented
hereby, is in force (the “Additional Pledged Stock”, “Additional Pledged LLC
Interests” or “Additional Pledged Partnership Interest”, as applicable, as
described on such Schedule I) and hereby grants to the Administrative Agent, on
behalf and for the ratable benefit of the Secured Parties, a first priority
security interest in the Additional Pledged Stock, the Additional Pledged LLC
Interests and the Additional Pledged Partnership Interests, as applicable, and
all Proceeds thereof. From and after the date of this Supplement, as used in the
Pledge Agreement as supplemented by this Supplement and for all purposes of the
Pledge Agreement as so supplemented, “Pledged Stock” shall be deemed to include
the Additional Pledged Stock, “Pledged LLC Interests” shall be deemed to include
the Additional Pledged LLC Interests, “Pledged Partnership Interests” shall be
deemed to include the Additional Pledged Partnership Interests and “Issuers”
shall be deemed to include each of the Additional Issuers.]

3. [Each New Pledgor agrees to all of the provisions of the Pledge Agreement and
effective on the date hereof, becomes a party to the Pledge Agreement, as a
Pledgor, with the same effect as if the undersigned were an original signatory
to the Pledge Agreement. Each New Pledgor, as additional collateral security for
the prompt and complete payment when due (whether at stated maturity, by
acceleration or otherwise) of the Obligations and in order to induce the Lenders
to make their respective extensions of credit to the Borrower, and the Issuing
Lenders to issue their letters of credit, under the Credit Agreement and the
other Loan Documents, hereby delivers to the Administrative Agent,

 

Exh. A-1

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

on behalf and for the ratable benefit of the Lenders, [all][65%] of the shares
or interests of Capital Stock of [INSERT NAME OF NEW ISSUER], a             
[corporation] (the “New Issuer”) listed in Schedule I hereto, together with all
certificates, options, or rights of any nature whatsoever which may be issued or
granted by the New Issuer in respect of such Capital Stock while the Pledge
Agreement, as supplemented hereby, is in force (the “New Pledged Stock”, “New
Pledged LLC Interests” or “New Pledged Partnership Interest”, as applicable, as
described on such Schedule I) and hereby grants to the Administrative Agent, on
behalf and for the ratable benefit of the Lenders, a first priority security
interest in the New Pledged Stock, the New Pledged LLC Interests and the New
Pledged Partnership Interests, as applicable, and all Proceeds thereof. From and
after the date of this Supplement, as used in the Pledge Agreement as
supplemented by this Supplement and for all purposes of the Pledge Agreement as
so supplemented, “Pledged Stock” shall be deemed to include the New Pledged
Stock, “Pledged LLC Interests” shall be deemed to include the New Pledged LLC
Interests, “Pledged Partnership Interests” shall be deemed to include the New
Pledged Partnership Interests and “Issuers” shall be deemed to include the New
Issuer. Each New Pledgor has set forth such New Pledgor’s name and the
applicable filing office for a financing statement covering the Pledged
Collateral owned by such New Pledgor on Schedule II attached hereto.]

4. Each Pledgor hereby represents and warrants that the representations and
warranties contained in Section 4 of the Pledge Agreement are true and correct
in all material respects on the date of this Supplement with references therein
to the “Pledged Stock” to include [the Additional Pledged Stock] and [the New
Pledged Stock], with references to “Pledged LLC Interests” to include [the
Additional Pledged LLC Interests] and [the New Pledged LLC Interests], with
references to “Pledged Partnership Interests” to include [the Additional Pledged
Partnership Interests] and [the New Pledged Partnership Interests], with
references to the “Issuers” therein to include each [New Issuer] and each
[Additional Issuer], and with references to the Pledge Agreement to mean the
Pledge Agreement as supplemented hereby.

5. This Supplement is supplemental to the Pledge Agreement, forms a part thereof
and is subject to the terms thereof. From and after the date of this Supplement,
[Schedule I to the Pledge Agreement shall be deemed to include each item listed
on Schedule I to this Supplement] [Schedule II to the Pledge Agreement shall be
deemed to include each item listed on Schedule II to this Supplement]. This
Supplement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York.

IN WITNESS WHEREOF, the undersigned has caused this Supplement to be duly
executed and delivered as of the date first above written.

 

[NAME OF PLEDGOR] By       Name:   Title:

 

Exh. A-2

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

SCHEDULE I to

Supplement

A. DESCRIPTION OF ADDITIONAL PLEDGED STOCK

 

Name of

Issuer

 

Class of

Stock

 

Stock

Certificate

Number

 

Number of

Shares

 

Percentage of

Stock Owned

by Pledgor

 

Pledgor

B. DESCRIPTION OF ADDITIONAL PLEDGED LLC INTERESTS

 

Name of

Issuer

 

Class of

LLC Interest

 

Certificate

Number

 

Number of

Interests

 

Percentage of

LLC Interest

Owned by

Pledgor

 

Pledgor

C. DESCRIPTION OF ADDITIONAL PLEDGED PARTNERSHIP INTERESTS

 

Name of

Issuer

 

Class of

Partnership

Interest

 

Certificate

Number

 

Number of

Interests

 

Percentage of

Partnership

Interest

Owned by

Pledgor

 

Pledgor

D. DESCRIPTION OF NEW PLEDGED STOCK

 

Name of

Issuer

 

Class of

Stock

 

Stock

Certificate

Number

 

Number of

Shares

 

Percentage of

Stock Owned

by Pledgor

 

Pledgor

 

Schedule I to Supplement-1

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

E. DESCRIPTION OF NEW PLEDGED LLC INTERESTS

 

Name of

Issuer

 

Class of

LLC Interest

 

Certificate

Number

 

Number of

Interests

 

Percentage of

LLC Interest

Owned by

Pledgor

 

Pledgor

F. DESCRIPTION OF NEW PLEDGED PARTNERSHIP INTERESTS

 

Name of

Issuer

 

Class of

Partnership

Interest

 

Certificate

Number

 

Number of

Interests

 

Percentage of

Partnership

Interest

Owned by

Pledgor

 

Pledgor

 

Schedule I to Supplement-2

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

SCHEDULE II to

Supplement

NEW PLEDGORS AND FILING OFFICES

 

Name of New Pledgor

  

Filing Office

 

Schedule II to Supplement-1

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

ANNEX I to

Supplement

ACKNOWLEDGMENT AND CONSENT

The undersigned, the [New] [Additional] Issuer referred to in the foregoing
Supplement to Pledge Agreement, hereby acknowledges receipt of a copy thereof
and of the Pledge Agreement referred to therein and agrees to be bound thereby
and to comply with the terms thereof insofar as such terms are applicable to it.
The undersigned agrees to notify the Administrative Agent promptly in writing of
the occurrence of any of the events described in Section 5(a) of the Pledge
Agreement. The undersigned further agrees that the terms of Section 9(c) of the
Pledge Agreement shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it under or pursuant to or arising out of
Section 9 of the Pledge Agreement.

 

[NAME OF NEW/ADDITIONAL ISSUER] By:       Name:   Title:

 

Schedule II to Supplement-1

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

Exhibit D-1

to Credit Agreement

FORM OF SECTION 4.11 CERTIFICATE

(For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement, dated as of October 30, 2013
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Sprague Operating Resources LLC, as Borrower, the
Lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, and the other agents parties thereto. All capitalized
terms used but not defined herein have the meanings ascribed to them in the
Credit Agreement.

Pursuant to the provisions of Section 4.11(e) of the Credit Agreement, the
undersigned hereby certifies that: (i) it is the sole record and beneficial
owner of the Loan(s) (as well as any promissory note(s) evidencing such Loan(s))
in respect of which it is providing this certificate, (ii) it is not a “bank”
within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a
“10-percent shareholder” of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code and (iv) it is not a “controlled foreign
corporation” related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Borrower and
the Administrative Agent, and (2) the undersigned shall have at all times
furnished the Borrower and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.

 

[NAME OF NON-EXEMPT [LENDER][AGENT]] By:       Name:   Title:

Date:                                  , 201    

 

Schedule II to Supplement-1

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

Exhibit D-2

to Credit Agreement

FORM OF SECTION 4.11 CERTIFICATE

(For non-U.S. Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement, dated as of October 30, 2013
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Sprague Operating Resources LLC, as Borrower, the
Lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, and the other agents parties thereto. All capitalized
terms used but not defined herein have the meanings ascribed to them in the
Credit Agreement.

Pursuant to the provisions of Section 4.11(e) of the Credit Agreement, the
undersigned hereby certifies that: (i) it is the sole record and beneficial
owner of the participation in respect of which it is providing this certificate,
(ii) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a “10-percent shareholder” of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a “controlled foreign
corporation” related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Lender in writing, and
(2) the undersigned shall have at all times furnished such Lender with a
properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

 

[NAME OF PARTICIPANT] By:       Name:   Title:

Date:                              , 201    

 

Schedule II to Supplement-2

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

Exhibit D-3

to Credit Agreement

FORM OF SECTION 4.11 CERTIFICATE

(For Non-U.S. Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement, dated as of October 30, 2013
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Sprague Operating Resources LLC, as Borrower, the
Lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, and the other agents parties thereto. All capitalized
terms used but not defined herein have the meanings ascribed to them in the
Credit Agreement.

Pursuant to the provisions of Section 4.11(e) of the Credit Agreement, the
undersigned hereby certifies that: (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect to such participation, neither the undersigned
nor any of its direct or indirect partners/members is a “bank” extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a “10-percent shareholder” of the
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a “controlled foreign corporation”
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Lender and (2) the undersigned shall have at all times furnished
such Lender with a properly completed and currently effective certificate in
either the calendar year in which each payment is to be made to the undersigned,
or in either of the two calendar years preceding such payments.

 

[NAME OF PARTICIPANT] By:       Name:   Title:

Date:                              , 201    

 

Schedule II to Supplement-3

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

Exhibit D-4

to Credit Agreement

FORM OF SECTION 4.11 CERTIFICATE

(For Non-U.S. Lenders That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement, dated as of October 30, 2013
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Sprague Operating Resources LLC, as Borrower, the
Lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, and the other agents parties thereto. All capitalized
terms used but not defined herein have the meanings ascribed to them in the
Credit Agreement.

Pursuant to the provisions of Section 4.11(e) of the Credit Agreement, the
undersigned hereby certifies that: (i) it is the sole record owner of the
Loan(s) (as well as any promissory note(s) evidencing such Loan(s)) in respect
of which it is providing this certificate, (ii) its direct or indirect
partners/members are the sole beneficial owners of such Loan(s) (as well as any
promissory note(s) evidencing such Loan(s)), (iii) with respect to the extension
of credit pursuant to this Credit Agreement or any other Loan Document, neither
the undersigned nor any of its direct or indirect partners/members is a “bank”
extending credit pursuant to a loan agreement entered into in the ordinary
course of its trade or business within the meaning of Section 881(c)(3)(A) of
the Code, (iv) none of its direct or indirect partners/members is a “10-percent
shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of the
Code and (v) none of its direct or indirect partners/members is a “controlled
foreign corporation” related to the Borrower as described in
Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from
each of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Borrower and the Administrative Agent, and (2) the
undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

[NAME OF NON-EXEMPT [LENDER][AGENT]] By:       Name:   Title:

Date:                              , 201    

 

Schedule II to Supplement-4

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

Exhibit E

to Credit Agreement

FORM OF SECRETARY’S CERTIFICATE

October [    ], 2013

The undersigned, the Secretary of [INSERT LOAN PARTY] (the “Company”), does
hereby certify in such capacity, and not individually, as follows pursuant to
the Credit Agreement, dated as of October 30, 2013 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Sprague Operating Resources LLC, as Borrower, the Lenders from time to
time parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and
the other agents parties thereto, that as of the date hereof:

(1) Certificate of Incorporation/Formation. Attached hereto as “Exhibit A” is a
true, correct and complete copy of the [Certificate of Incorporation/Formation]
of the Company, together with any and all amendments thereto, as on file with
the [Secretary of State of the State of [JURISDICTION]], and no action has been
taken to amend, modify or repeal such [Certificate of Incorporation/Formation],
the same being in full force and effect in the attached form as of the date
hereof.

(2) Bylaws/Governing Agreements. Attached hereto as “Exhibit B” is a true,
correct and complete copy of the [By-laws/Limited Liability Company Agreement]
of the Company, together with any and all amendments thereto, and no action has
been taken to amend, modify or repeal such [By-laws/ Limited Liability Company
Agreement], the same being in full force and effect in the attached form as of
the date hereof.

(3) Resolutions/Authority. Attached hereto as “Exhibit C” is a true and correct
copy of the resolutions that have been duly adopted by the unanimous written
consent of the [Board of Directors of the Company] dated [                    ,
        ], and such resolutions have not been amended, modified, revoked or
rescinded in any respect since their adoption and remain in full force and
effect on the date hereof.

(4) Incumbency. “Exhibit D” attached hereto sets forth the names, titles, and
specimen signatures of individuals who are duly elected, qualified and acting
officers of [the general partner of][the managing member of][the members of] the
Company as of the date hereof, each of whom is authorized to execute and deliver
on behalf of the Company the Credit Agreement and the other Loan Documents as
more particularly described and defined in the resolutions attached hereto as
“Exhibit C”, and any other agreements, documents, certificates or writings in
connection therewith which are required of the Company to effect or evidence the
Credit Agreement.

(5) Good Standing/Existence. Attached hereto as “Exhibit E” are copies of
recently dated certificates issued by the Secretary of State or other
appropriate authority of each jurisdiction in which the Company was formed or is
qualified to do business, such certificates evidencing the good standing and
existence of the Company in such jurisdictions.

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

IN WITNESS WHEREOF, the undersigned has hereunto executed this Secretary’s
Certificate as of the day and year first above written.

 

 

Name: Title: Secretary

The undersigned,                                              , does hereby
certify that [he][she] is the duly elected and presently incumbent
                                 of the Company referred to above, and in such
capacity does hereby certify to the Administrative Agent that
                                 is the duly elected and presently incumbent
Secretary of the Company.

 

 

Name: Title:

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

Exhibit A

[Certificate of Incorporation/Formation

and all amendments thereto]

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

Exhibit B

[By-laws/ Limited Liability Company Agreement]

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

Exhibit C

[Resolutions]

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

Exhibit D

Incumbency

 

Name

  

Office

  

Date

  

Signature

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

Exhibit E

[Good Standing Certificates]

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

Exhibit F

to Credit Agreement

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

This Assignment and Acceptance Agreement (the “Assignment and Acceptance”) is
dated as of the Effective Date set forth below and is entered into by and
between the Assignor named below (the “Assignor”) and the Assignee named below
(the “Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended,
restated, supplemented or otherwise modified from time to time, “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Acceptance as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent below (i) all of the Assignor’s rights and obligations in
its capacity as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including without limitation any letters of credit, guarantees and swing line
loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause
(i) above (the rights and obligations sold and assigned by the Assignor to the
Assignee pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Acceptance, without representation or warranty by the Assignor.

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

  22. Assignor:                         

 

  23. Assignee:                         

                   [and is [a][an] [Subsidiary] [Affiliate] [Approved Fund]of
[identify Lender]]1

 

  24. Borrower: Sprague Operating Resources LLC

 

  25. Administrative Agent: JPMorgan Chase Bank, N.A., as administrative agent
under the Credit Agreement

 

  26. Credit Agreement: The Credit Agreement, dated as of October 30, 2013 (as
amended, restated, supplemented or otherwise modified from time to time), among
Sprague Operating Resources LLC, as Borrower, the Lenders from time to time
parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the
other agents parties thereto.

 

  27. Assigned Interest:

 

Facility Assigned

   Aggregate
Amount of
Commitment/Loans/
Obligations for
all Lenders      Amount of
Commitment/Loans/
Obligations
Assigned      Percentage
Assigned of
Commitment/Loans/
Obligations2  

Working Capital Facility Commitment

   $                                    $                                     
                             % 

Acquisition Facility Commitment

   $                                    $                                     
                             % 

Effective Date:                     , 201     [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

The Assignee agrees to deliver to the Administrative Agent a completed
administrative questionnaire in which the Assignee designates one or more credit
contacts to whom all syndicate-level information (which may contain material
non-public information about the Borrower, the other Loan Parties and their
Affiliates or their respective securities) will be made available and who may
receive such information in accordance with the Assignee’s compliance procedures
and applicable laws, including federal and state securities laws.

 

1  Select as applicable.

2  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

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

The terms set forth in this Assignment and Acceptance are hereby agreed to:

 

ASSIGNOR [NAME OF ASSIGNOR] By:       Name:   Title: ASSIGNEE [NAME OF ASSIGNEE]
By:       Name:   Title:

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

Consented to and Accepted: JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

By:       Name:   Title: Consented to: [JPMORGAN CHASE BANK, N.A.,

as a Working Capital Facility Issuing Lender,

and Swing Line Lender

By:       Name:   Title: [     ],     as a Working Capital Facility Issuing
Lender, By:       Name:   Title: By:       Name:   Title:]3

 

3  Include for Assignments of Working Capital Facility Commitment.

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

[JPMORGAN CHASE BANK, N.A.,

as an Acquisition Facility Issuing Lender

By:       Name:   Title: [     ],     as an Acquisition Facility Issuing Lender,
By:       Name:   Title: By:       Name:   Title:]4 [Consented to: SPRAGUE
OPERATING RESOURCES LLC,

as Borrower

By:       Name:   Title:]5

 

4  Include for Assignments of Acquisition Facility Commitment.

5  Include if required by Section 11.7(c) of the Credit Agreement.

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

ANNEX 1

Credit Agreement, dated as of October 30, 2013 (as amended, supplemented or
otherwise modified from time to time (the “Credit Agreement”), among Sprague
Operating Resources LLC(the “Borrower”), the Lenders from time to time parties
thereto, JPMorgan Chase Bank, N.A., as administrative agent (in such capacity,
the “Administrative Agent”), and the other agents parties thereto. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement.

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT

AND ACCEPTANCE AGREEMENT

33. Representations and Warranties.

(a) Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
MLP, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the MLP,
any of its Subsidiaries or Affiliates or any other Person of any of their
respective obligations under any Loan Document.

(b) Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Acceptance and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 7.1 thereof, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender and (v) attached to the Assignment and Acceptance is any
documentation required to be delivered by it pursuant to the terms of the Credit
Agreement, duly completed and executed by the Assignee and (b) agrees that
(i) it will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

34. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

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

35. General Provisions. This Assignment and Acceptance shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and assigns. This Assignment and Acceptance may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Acceptance by
email or telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance. This Assignment and Acceptance
shall be governed by, and construed in accordance with, the law of the State of
New York.

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

Exhibit G

to Credit Agreement

FORM OF BORROWING BASE REPORT

 

Date:   

 

   Borrower:    Sprague Operating Resources LLC    For:    Credit Agreement
dated as of October 30, 2013   

This report, the schedule attached as Exhibit 1 hereto and the accompanying
supporting information (collectively, the “Report”) is delivered pursuant to the
Credit Agreement, dated as of October 30, 2013 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Sprague Operating Resources LLC, as Borrower, the Lenders from time to
time parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and
the other agents parties thereto. Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement.

The undersigned hereby certifies to the Administrative Agent that:

(1) such Responsible Person is the [insert title] of the Borrower;

(2) the amounts set forth on the schedule attached as Exhibit 1 hereto
constitute all Collateral which has been or is being used in determining
availability for an advance or letter of credit issued under the Credit
Agreement as of October 30, 2013;

(3) the sum of (i) the Total Working Capital Facility Extensions of Credit plus
(ii) the Acquisition Facility Working Capital Extensions of Credit, do not
exceed the Borrowing Base as of the date hereof; and

(4) the information contained in this Report is true and correct in all material
respects as of the date hereof, is based on information contained in the
Borrower’s financial accounting records, and is all of the information required
to be delivered pursuant to Section 7.2(c) of the Credit Agreement and the
definition of “Borrowing Base Report” under the Credit Agreement in relation to
the Borrowing Base.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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

EXHIBIT 1

CONSOLIDATED BORROWING BASE REPORT

As of [Borrowing Base Reporting Date]

 

COLLATERAL TYPE    Gross
Value     Advance
Rate     Borrowing Base
Value  

Eligible Cash and Cash Equivalents

     [             ]      100 %      [             ] 

Eligible Tier 1 Accounts Receivable

     [             ]      90 %      [             ] 

Eligible Unbilled Tier 1 Accounts Receivable

     [             ]      85 %      [             ] 

Eligible Tier 2 Accounts Receivable

     [             ]      85 %      [             ] 

Eligible Unbilled Tier 2 Accounts Receivable

     [             ]      80 %      [             ] 

Eligible Hedged Petroleum Inventory

     [             ]      85 %      [             ] 

Eligible Petroleum Inventory

     [             ]      80 %      [             ] 

Eligible Hedged Natural Gas Inventory

     [             ]      85 %      [             ] 

Eligible Natural Gas Inventory

     [             ]      80 %      [             ] 

Eligible Coal Inventory

     [             ]      70 %      [             ] 

Eligible Asphalt Inventory

     [             ]      70 %      [             ] 

Prepaid Purchases

     [             ]      75 %      [             ] 

Eligible Net Liquidity in Futures Accounts

     [             ]      85 %      [             ] 

Eligible Exchange Receivables

     [             ]      80 %      [             ] 

Eligible Short Term Unrealized Forward Gains

     [             ]      80 %      [             ] 

Eligible Medium Term Unrealized Forward Gains

     [             ]      70 %      [             ] 

Eligible Long Term Unrealized Forward Gains

     [             ]      60 %      [             ] 

Eligible Letters of Credit Issued for Commodities Not Yet Received

     [             ]      80 %      [             ] 

Paid But Unexpired Letters of Credit

     [             ]      100 %      [             ] 

Eligible RINs

     [             ]      70 %      [             ] 

Less

      

First Purchaser Lien Amount

     [             ]      100 %      [             ] 

Product Taxes

     [             ]      100 %      [             ] 

Swap Amounts due to Qualified Counterparties in excess of $20,000,000.00

     [             ]      110 %      [             ] 

Overcollateralization Amount

     [             ]      100 %      [             ] 

Total Borrowing Base

         [             ] 

Less

      

EXTENSIONS OF CREDIT

      

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

 

COLLATERAL TYPE    Gross
Value    Advance
Rate    Borrowing Base
Value  

Working Capital Facility Letters of Credit

           [             ] 

Working Capital Facility Loans

           [             ] 

Acquisition Facility Working Capital Letters of Credit

           [             ] 

Acquisition Facility Working Capital Loans

           [             ] 

Swing Line obligations

           [             ] 

Total Extensions of Credit for calculation

           [             ]    

 

  

 

  

 

 

 

AGGREGATE BORROWING BASE AVAILABILITY

           [             ]    

 

  

 

  

 

 

 

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

SPRAGUE OPERATING RESOURCES LLC, as Borrower

By:       Name:   Title:

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

Exhibit H-1

to Credit Agreement

FORM OF INTERCOMPANY SUBORDINATION AGREEMENT

INTERCOMPANY SUBORDINATION AGREEMENT, dated as of                      (as
amended, supplemented or otherwise modified from time to time, this
“Subordination Agreement”), by and among SPRAGUE OPERATING RESOURCES LLC, a
Delaware limited liability company (the “Company” and, together with each other
Loan Party (as defined in the Credit Agreement referred to below) listed on the
signature pages hereof or which becomes a party hereto, each an “Obligor” and,
collectively, the “Obligors”) and JPMorgan Chase Bank, N.A., as administrative
agent (together with its successors and assigns in such capacity, the
“Administrative Agent”) under the Credit Agreement (as hereinafter defined).

RECITALS

WHEREAS, pursuant to the Credit Agreement, dated as of October 30, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among the Company, as Borrower, the Lenders from time to
time parties thereto, the Administrative Agent, and the other agents parties
thereto, the Lenders have severally agreed to make Loans to and the Issuing
Lenders have agreed to issue or provide Letters of Credit for the account of the
Borrower upon the terms and subject to the conditions set forth therein, which
Loans may be evidenced by the Notes issued by the Borrower thereunder;

WHEREAS, each Obligor has made or may make from time to time certain loans,
advances or other extensions of credit to one or more of the other Obligors; and

WHEREAS, it is a covenant under Section 8.2(b) of the Credit Agreement that each
Obligor enter into this Subordination Agreement with the Administrative Agent in
respect of all amounts from time to time owing to such Obligor (including any
interest thereon) from any other Obligor.

NOW, THEREFORE, the parties hereto hereby agree as follows:

1. Defined Terms. Unless otherwise defined herein, the capitalized terms used
herein which are defined in, or by reference in, the Credit Agreement shall have
the meanings specified therein. In addition, as used in this Intercompany
Subordination Agreement, the following terms have the following meanings:

“Payment in Full of the Senior Obligations”: (a) the indefeasible payment in
full in cash of all amounts due or to become due (whether or not all or any of
the Senior Obligations have been declared due and payable prior to the date on
which such Senior Obligations would otherwise have become due and payable) on or
in respect of all Senior Obligations, and (b) the termination of the
Commitments.

“Senior Obligations”: the collective reference to the unpaid principal of and
interest on the Loans, unpaid Reimbursement Obligations and interest thereon and
all other Obligations (for the avoidance of doubt, including, without
limitation, interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to any Loan Party, whether or not a claim for post filing or post-petition
interest is allowed in such proceeding) of any Loan Party to the Lenders, the
Issuing Lenders, the Cash Management Banks, Qualified Cash Management Banks,
Qualified Counterparties and the Agents (collectively, the “Lender Parties”).

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“Subordinated Obligations”: with respect to any Obligor, any and all amounts
from time to time owing to such Obligor (including any interest thereon) from
any other Obligor.

“Subordination Event”: the Senior Obligations becoming due and payable in full,
whether upon maturity, acceleration or otherwise.

2. Subordination. (a) Each Obligor agrees that the Subordinated Obligations
shall be Subordinate and Junior in Right of Payment to all Senior Obligations.

(b) As used in this Subordination Agreement the term “Subordinate and Junior in
Right of Payment” shall mean that:

(i) no part of the Subordinated Obligations shall have any claim to the assets
of any Obligor on a parity with or prior to the claim of the Senior Obligations,
and payment of all of the Subordinated Obligations is and shall be subject,
subordinate and deemed junior in right of payment to the prior Payment in Full
of the Senior Obligations;

(ii) upon the occurrence and during the continuance of an Event of Default, and
following receipt by any Loan Party of a written notice from the Administrative
Agent prohibiting the following,

(A) no Obligor will take, demand or receive from any other Obligor and no
Obligor will make, give or permit, directly or indirectly, by set off,
redemption, purchase or in any other manner, any payment of or security for the
whole or any part of the Subordinated Obligations unless otherwise permitted by
the Credit Agreement or consented to in writing by the Administrative Agent, and

(B) no Obligor will accelerate for any reason the scheduled maturities of any
Subordinated Obligations unless permitted in writing by the Administrative
Agent;

provided that, upon the occurrence and during the continuance of an Event of
Default, no payments permitted pursuant to clause (A) above shall be made into
any Deposit Account, Securities Account or Commodity Account of any Loan Party
that is not a Controlled Account (in each case as defined in the Security
Agreement); provided, further, that so long as no Event of Default has occurred
and is continuing, each Obligor may make payments of interest on and principal
of the Subordinated Obligations, including, without limitation, any payments on
Subordinated Obligations consisting of customary revolving intercompany payables
consistent with past practice; and

(iii) in the event of any Subordination Event, any payment or distribution of
any kind or character, whether in cash, property or securities which, but for
the subordination provisions of this Subordination Agreement, and subject to the
proviso in the preceding subsection (ii) would otherwise be payable or
deliverable upon or in respect of the Subordinated Obligations, shall instead be
paid over or delivered to the Administrative Agent for application on account of
the Senior Obligations, and no Obligor shall receive any such payment or
distribution or any benefit therefrom.

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(c) Upon the occurrence of a Subordination Event arising pursuant to
Section 9.1(g) of the Credit Agreement, (i) if any Obligor shall have failed to
file claims or proofs of claim with respect to the Subordinated Obligations
earlier than thirty (30) days prior to the deadline for any such filing, such
Obligor shall execute and deliver to the Administrative Agent such powers of
attorney, assignments or other instruments as the Administrative Agent may
reasonably request to file such claims or proofs of claim and (ii) unless each
Lender Party shall otherwise agree in writing, until the Payment in Full of the
Senior Obligations, no Obligor shall be entitled to receive any payment on
account of principal of (or premium, if any) or interest on or other amounts
payable in respect of the Subordinated Obligations, and to that end, any payment
or distribution of any kind or character, whether in cash, property or
securities, which may be payable or deliverable in respect of Subordinated
Obligations in any such case, proceeding, receivership, dissolution, liquidation
or other winding up proceeding (such proceedings, collectively, “Insolvency
Proceedings”) shall instead be paid or delivered to the Administrative Agent for
application to the Senior Obligations that are due and payable until the Payment
in Full of the Senior Obligations shall have first occurred.

(d) If any Insolvency Proceeding is commenced by or against any Obligor:

(i) the Administrative Agent and each other Lender Party is hereby irrevocably
authorized and empowered (in its own name or in the name of the applicable
Obligor or otherwise), but shall have no obligation, to demand, sue for, collect
and receive every payment or distribution in respect of the Subordinated
Obligations above and give acquittance therefor and to file claims and proofs of
claim and take such other action (including voting the Subordinated Obligations
or enforcing any security interest or other lien securing payment of the
Subordinated Obligations) as such Lender Party may deem necessary or advisable
for the exercise or enforcement of any of the such Lender Party’s rights or
interests hereunder; and

(ii) each Obligor shall duly and promptly take such action as the Administrative
Agent or any other Lender Party may request in its good faith business judgment
(A) to collect the Subordinated Obligations for the account of the Lender
Parties and to file appropriate claims or proofs of claim in respect of the
Subordinated Obligations, (B) to execute and deliver to the Lender Parties such
powers of attorney, assignments, or other instruments as such Lender Parties may
request in order to enable them to enforce any and all claims with respect to,
and any security interests and other liens securing payment of, the Subordinated
Obligations and (C) to collect and receive any and all payments or distributions
which may be payable or deliverable upon or with respect to the Subordinated
Obligations.

(e) Should any payment or distribution or security, or the proceeds of any
thereof, be collected or received by any Obligor in respect of Subordinated
Obligations, and such collection or receipt is not expressly permitted hereunder
prior to the payment in full of the Senior Obligations, such Obligor will,
forthwith deliver the same to the Administrative Agent, to the extent
practicable in precisely the form received (except for the endorsement or the
assignment of the holder thereof where necessary) and, until so delivered, the
same shall be held in trust by such Obligor as the property of the Lender
Parties.

(f) Each Obligor waives any right that it may have to be subrogated to the
rights of the Lender Parties to receive payments or distributions of assets of
any other Obligor made on the Senior Obligations or to otherwise seek
reimbursement, indemnity or contribution or payment of any kind from any other
Obligor in respect of amounts paid to the Lender Parties in lieu of such Obligor
by operation of this Subordination Agreement, until such time as the Senior
Obligations have been indefeasibly paid in full in cash and the Commitments have
been terminated.

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(g) Each Obligor hereby waives any and all notices of renewal, extension or
accrual or increase of any of the Senior Obligations, present or future, and
agrees and consents that without notice to or assent by such Obligor:

(i) the obligations and liabilities of any other Obligor or any other party or
parties for or upon the Senior Obligations (and/or any promissory note(s),
security document or guaranty evidencing or securing any of the same) may, from
time to time, in whole or in part, be renewed, extended, modified, amended,
accelerated, compromised, supplemented, terminated, sold, exchanged, waived or
released or increased;

(ii) the Administrative Agent and each other Lender Party may exercise or
refrain from exercising any right, remedy or power granted by the Credit
Agreement, any other Loan Document or any other document creating, evidencing or
otherwise related to any of the Senior Obligations or at law, in equity, or
otherwise, with respect to any of the Senior Obligations or any collateral
security or lien (legal or equitable) held, given or intended to be given
therefor (including, without limitation, the right to perfect any lien or
security interest created in connection therewith); and

(iii) any and all Collateral or other collateral security and/or Liens (legal or
equitable) at any time, present or future, held, given or intended to be given
for any of the Senior Obligations, and any rights or remedies of any Lender
Party in respect thereof may, from time to time, in whole or in part, be
exchanged, sold, surrendered, released, modified, waived or extended by such
Lender Party;

in each case, as the Administrative Agent or any other Lender Party may deem
advisable and all without impairing, abridging, diminishing, releasing or
affecting the subordination to the Senior Obligations provided for herein.

(h) Each Obligor acknowledges and agrees that the Administrative Agent and each
other Lender Party has relied upon and will continue to rely upon the
subordination provided for herein in entering into the Credit Agreement.

3. Representations and Warranties. Each Obligor hereby represents and warrants
that, as of the date hereof, such Obligor has no material claims against any
other Obligor arising out of breach of contract or tort or otherwise.

4. Transfers of Subordinated Obligations. Each Obligor agrees that it will not
assign, transfer, sell or otherwise dispose of its right, title and interest in
any Subordinated Obligation to any other Person, other than an Affiliate or a
Subsidiary, which transferee shall agree to the terms of this Subordination
Agreement.

5. Miscellaneous. (a) No failure to exercise, and no delay in exercising, on the
part of the holders, assignees and beneficiaries from time to time of the Senior
Obligations, any right, power or privilege under this Subordination Agreement
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege under this Subordination Agreement preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The Administrative Agent shall not be prejudiced in its right to
enforce the subordination contained herein in accordance with the terms hereof
by any act or failure to act on the part of any Obligor. The rights and remedies
provided in this Subordination Agreement and in the other Loan Documents and in
all other agreements, instruments and documents referred to in any of the
foregoing are cumulative and shall not be exclusive of any rights or remedies
provided by law.

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

(b) Each Obligor agrees to execute and deliver such further documents and to do
such other acts and things as the Administrative Agent may reasonably request in
order to fully effect the purposes of this Subordination Agreement.

(c) All notices, requests and demands to or upon the respective parties hereto
to be effective shall be in writing (including by facsimile transmission) and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made (i) in the case of delivery by hand, when received, (ii) in the
case of delivery by mail, when received, or (iii) in the case of delivery by
facsimile transmission, when sent, and receipt has been electronically
confirmed, (1) to any Obligor, as set forth below its name on the signature
pages hereof, and (2) to the Administrative Agent, at its address specified in
Section 11.2 of the Credit Agreement.

(d) Each Obligor agrees to give the Administrative Agent prompt notice of any
default by any other Obligor in respect of the Subordinated Obligations.

(e) Each Obligor will cause each note and instrument (if any) evidencing the
Subordinated Obligations to be endorsed with the following legend:

“The indebtedness evidenced by this instrument is subordinated to the prior
indefeasible payment in full in cash of the Senior Obligations (as defined in
the Intercompany Subordination Agreement dated as of          by and among the
[Payor][Borrower][MLP], the [Payee][Lender], certain of their affiliates and
JPMorgan Chase Bank, N.A., as Administrative Agent, regarding subordination)
pursuant to, and to the extent provided in, such Intercompany Subordination
Agreement.”

(f) Each Obligor hereby agrees to mark its books of account in such a manner as
shall be effective to give proper notice of the effect of this Subordination
Agreement and will, in the case of any Subordinated Obligations not evidenced by
any note or instrument, following the occurrence and continuation of an Event of
Default, upon the Administrative Agent’s request, cause such Subordinated
Obligations to be evidenced by an appropriate note or instrument or instruments
endorsed with the above legend. Each Obligor will at its expense and at any time
and from time to time promptly execute and deliver all further instruments and
documents and take all further action that may be necessary or that the
Administrative Agent may request in its good faith business judgment to protect
any right or interest granted or purported to be granted hereunder or to enable
the Lender to exercise and enforce their rights and remedies hereunder.

(g) THIS SUBORDINATION AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE LENDER
PARTIES AND EACH OBLIGOR UNDER THIS SUBORDINATION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK. This Subordination Agreement shall be binding upon the Administrative
Agent, each Obligor and their respective successors, transferees and assigns and
shall inure to the benefit of the Administrative Agent, the other Lender
Parties, each Obligor and their respective successors, transferees and assigns;
provided, that no Obligor may assign its rights or obligations hereunder without
the prior written consent of the Administrative Agent.

(h) The subordination provisions contained herein are for the benefit of the
Administrative Agent, the other Lender Parties and their respective successors
and assigns as holders from time to time of Senior Obligations and may not be
rescinded or canceled or modified in any way, nor, unless otherwise expressly
provided for herein, may any provision of this Subordination Agreement be waived
or changed without the express prior written consent thereto of the Required
Lenders. Subject to the preceding sentence, this Subordination Agreement may be
amended or modified only by an instrument in writing signed by the parties
hereto.

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(i) This Subordination Agreement may be executed by one or more of the parties
to this Subordination Agreement on any number of separate counterparts and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have caused this Subordination Agreement
to be duly executed and delivered as of the day and year first above written.

 

[INSERT NAME OF OBLIGOR]   By:         Name:     Title:

 

[INSERT NAME OF OBLIGOR]   By:         Name:     Title:  

Address for Notices:

[ADDRESS]

 

JPMorgan Chase Bank, N.A., as Administrative Agent   By:         Name:    
Title:

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Exhibit H-2

to Credit Agreement

FORM OF AXEL JOHNSON SUBORDINATION AGREEMENT

AXEL JOHNSON SUBORDINATED NOTE

This Note has not been registered under the Securities Act of 1933, as amended,
and may not be sold or otherwise transferred in the absence of such registration
or an exemption therefrom under such Act. Furthermore, this Note may not be sold
or otherwise transferred other than in compliance with Section 1.4 of this Note.

This Note is, to the extent expressly described herein, subordinated to the
prior payment and satisfaction of all Senior Indebtedness, as defined herein.
[This Note is in satisfaction of the principal of that certain Note dated
                     with a maturity date of                      in the amount
of                      ($        ). That Note is hereby deemed to be fully
matured and satisfied, and no further payment obligation exists with respect to
the principal thereof.]

[SPRAGUE ENTITY]

 

U.S. $[        ]    [                 , 201    ]

FOR VALUE RECEIVED, the undersigned [Sprague Entity] (the “Company”) hereby
promises to pay to [Name of Axel Johnson Affiliate], a [jurisdiction of
formation] [entity type] (in such capacity as payee, the “Investor”), or its
registered assigns (collectively, the “Noteholder”), at the Company’s principal
office, or at such other place as the Noteholder shall from time to time have
designated to the Company in writing, on [                 , 201    ] (the
“Maturity Date”), [        ] United States Dollars (U.S. $[        ]). Interest
will accrue daily (computed on the basis of a 360-day year) on the principal
amount hereof from time to time unpaid to and including the maturity hereof at a
rate per annum equal to [    ]%. Interest shall be payable in arrears on
[                    ], [                    ], [                    ] and
[                    ], commencing on [                 , 201    ], on the date
of any prepayment of this Note (in whole or in part), and at maturity, whether
by acceleration or otherwise. Interest payable after maturity of this Note (by
acceleration or otherwise) shall be payable upon demand.

 

1. PAYMENT PROVISIONS.

The Company covenants that so long as this Note is outstanding:

1.1. Payment at Maturity of Note. Subject to the restrictions contained in the
Credit Agreement and in Section 3 below, on the Maturity Date, or on any
accelerated maturity of this Note, the Company will pay the entire principal
amount of this Note then outstanding, together with all accrued and unpaid
interest hereon.

1.2. Voluntary Prepayments. Subject to the restrictions contained in the Credit
Agreement and in Section 3 below, the Company may at any time and from time to
time prepay all or any part of the principal amount of this Note, without
premium or penalty. Upon each prepayment of this Note, in whole or in part, the
Company will pay to the Noteholder the principal amount to be prepaid and any
unpaid interest accrued thereon to the prepayment date. From and after the date
such payment is actually made, interest on the principal amount so prepaid shall
cease to accrue.

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

1.3. Manner and Time of Payment. All payments made by the Company pursuant to
this Note shall be made without defense, set off or counterclaim, in same day
funds and delivered to the holder of this Note not later than Noon (New York
time) on the date such payment is due, with such payment to be made in the same
manner as that provided for payment of interest herein; provided that funds
received by such holders after Noon (New York time) shall be deemed to have been
paid by the Company on the next succeeding Business Day. Whenever any payment to
be made hereunder shall be stated to be due on a day which is not a Business
Day, the payment shall be made on the next succeeding Business Day and such
additional period shall be included in the computation of the payment of
interest hereunder.

1.4. Transfer.

(a) Transfer of Note. The Noteholder shall have the right to sell, assign,
transfer or negotiate all or part of this Note to one or more of its Axel
Johnson Affiliates. In the case of any sale, assignment, transfer or negotiation
of all or part of this Note authorized under this Section 1.4, the assignee,
transferee or recipient shall have, to the extent of such sale, assignment,
transfer or negotiation, the same rights, benefits and obligations as it would
if it were the Noteholder with respect to such Note or the loans evidenced
thereby.

(b) Registration of Transfer. The Company shall keep at its principal office a
register in which the Company shall provide for the registration of this Note
and for the transfer of the same. Upon surrender for registration of transfer of
this Note at the principal office of the Company, the Company shall, at its
expense, promptly execute and deliver one or more new Notes of like tenor and of
a like principal amount, registered in the name of such transferee or
transferees and, in the case of a transfer in part, a new Note in the
appropriate amount registered in the name of such transferor.

(c) Transferee. In connection with any sale, assignment or transfer of this
Note, the transferor shall give notice to the Company and the Administrative
Agent of the identity of the transferee.

 

2. EVENTS OF DEFAULT.

If one or more of the following events (herein referred to as “Events of
Default”) shall occur and be continuing:

2.1. Payment Default. The Company shall fail to pay (i) any principal of this
Note when the same becomes due and payable, whether upon maturity, prepayment,
acceleration or otherwise or (ii) any interest on this Note, for a period of ten
days after the same shall become due and payable or (iii) any other amount due
hereunder within 30 days after demand therefore.

2.2. Bankruptcy, etc. The Company or any of its Subsidiaries (each, an
“Obligor”) shall: (a) commence a voluntary case under the Bankruptcy Code or
authorize, by appropriate proceedings of its board of directors or other
governing body, the commencement of such a voluntary case; (b) (i) have filed
against it a petition commencing an involuntary case under the Bankruptcy Code
that shall not have been dismissed within 90 days after the date on which such
petition is filed, or (ii) file an answer or other pleading within such 90-day
period admitting or failing to deny the material allegations of such a petition
or seeking, consenting to or acquiescing in the relief therein provided, or
(iii) have entered against it an order for relief in any involuntary case
commenced under the Bankruptcy Code; (c) seek relief as a debtor

 

-2-

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under any applicable law, other than the Bankruptcy Code, of any jurisdiction
relating to the liquidation or reorganization of debtors or to the modification
or alteration of the rights of creditors, or consent to or acquiesce in such
relief; (d) have entered against it an order by a court of competent
jurisdiction (i) finding it to be bankrupt or insolvent, (ii) ordering or
approving its liquidation or reorganization as a debtor or any modification or
alteration of the rights of its creditors or (iii) assuming custody of, or
appointing a receiver or other custodian for, all or a substantial portion of
its property; or (e) make an assignment for the benefit of, or enter into a
composition with, its creditors, or appoint, or consent to the appointment of,
or suffer to exist a receiver or other custodian for, all or a substantial
portion of its property,

then, (i) upon the occurrence of any Event of Default described in Section 2.2
with respect to the Company, the unpaid principal amount of this Note, together
with accrued interest thereon, shall automatically become immediately due and
payable, without presentment, demand, protest or other requirements of any kind,
all of which are hereby expressly waived by the Company, and (ii) upon the
occurrence of any other Event of Default the Noteholder may, upon prior written
notice to the Administrative Agent (if the Credit Agreement is then still in
effect), and upon written notice to the Company, declare this Note to be due and
payable, whereupon the principal amount of this Note, together with accrued
interest thereon, shall automatically become immediately due and payable,
without any other notice of any kind, and without presentment, demand, protest
or other requirements of any kind, all of which are hereby expressly waived by
the Company; provided, however, that the acceleration of principal and interest
with respect to this Note and the exercise of judicial and foreclosure remedies
shall be subject to the restrictions in Section 3 below.

 

3. SUBORDINATION

3.1. Obligations Subordinate to Senior Indebtedness. The Company covenants and
agrees, and the Noteholder by its acceptance of this Note, likewise covenants
and agrees, that this Note shall be subject to the provisions of this Section 3;
and the Noteholder, whether a holder upon original issue or upon transfer,
assignment or exchange of this Note, accepts and agrees (i) that the payment of
all Note Obligations shall be subordinated and junior in right of payment to the
prior payment in full of all of the Senior Indebtedness from time to time
outstanding, and the Note Obligations are subordinated as a claim against the
Company, any other Obligor, any guarantor of the Senior Indebtedness or any of
their respective assets to the prior payment in full of the Senior Indebtedness,
in each case, to the extent and in the manner hereinafter set forth and whether
such claim is (a) in the ordinary course of business or (b) in the event of any
Bankruptcy Event, (ii) that the subordination is for the benefit of, and shall
be enforceable directly by, each holder of such Senior Indebtedness, and
(iii) that each holder of such Senior Indebtedness, whether now outstanding or
hereafter created, assumed or guaranteed, shall be deemed to have acquired its
Senior Indebtedness in reliance upon the covenants and provisions contained in
this Note including, without limitation, this Section 3.

3.2. Payment Over of Proceeds Upon Bankruptcy Event. In the event of (i) any
insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization, adjustment, composition or other similar case or proceeding in
connection therewith, relative to the Company or any other Obligor or to their
respective creditors, as such, or to their respective assets, or (ii) any
liquidation, dissolution or other winding up of the Company or any other
Obligor, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (iii) any assignment for the benefit of creditors
or any other marshaling of assets and liabilities of the Company or any other
Obligor (collectively, “Bankruptcy Events”), then and in any such event:

(a) All obligations due or to become due under or with respect to all Senior
Indebtedness in such proceeding shall be paid in full, in cash, or payment
thereof in a form and manner satisfactory to the holders of Senior Indebtedness
then outstanding shall have been provided for, before the Noteholder is entitled
to receive any payment or distribution, whether in cash, securities or other
property, on account of the Note Obligations;

 

-3-

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

(b) Any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, by set-off or otherwise, to
which the Noteholder would be entitled but for the provisions of this Section 3,
including any such payment or distribution which may be payable or deliverable
by reason of the payment of any other Indebtedness of the Company being
subordinated to the payment of the Note Obligations shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the Administrative Agent, for the benefit of the
holders of the Senior Indebtedness, or its representative, ratably according to
the aggregate amounts remaining unpaid on account of the principal of, and
interest on, such Senior Indebtedness held or represented by each, for
application to the Senior Indebtedness to the extent necessary to make payment
in full of all such Senior Indebtedness remaining unpaid;

(c) In the event that, notwithstanding the foregoing provisions of this
Section 3.2, the Noteholder shall have received after any such Bankruptcy Event
any such payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, including any such payment
or distribution which may be payable or deliverable by reason of any other
Indebtedness being subordinated to the payment of the Note Obligations before
all such Senior Indebtedness is paid in full or payment thereof provided for in
a form and manner satisfactory to the holders of Senior Indebtedness, then and
in such event such payment or distribution shall be segregated and held in trust
by the Noteholder for the benefit of the holders of the Senior Indebtedness, and
shall forthwith be paid over and delivered (together with any necessary
endorsements) directly to the Administrative Agent, for the benefit of the
holders of such Senior Indebtedness, or its representative, ratably according to
the aggregate amounts remaining unpaid on account of the principal of, and
interest on, such Senior Indebtedness held or represented by each, for
application to the Senior Indebtedness to the extent necessary to pay all such
Senior Indebtedness in full; and

(d) The Administrative Agent, on behalf of the holders of the Senior
Indebtedness, shall have the right to request the Noteholder to file and, in the
event the Noteholder fails to do so within 10 days prior to any deadline fixed
in such proceeding for the filing of such a claim, is hereby authorized to file
a proof of claim in the form required in any Bankruptcy Event for and on behalf
of the Noteholder, to accept and receive any payment or distribution which may
be payable or deliverable at any time upon or in respect of the Note Obligations
in an amount not in excess of the Senior Indebtedness then outstanding,
including without limitation all interest and Post Petition Interest with
respect thereto, and to take such other action as may be reasonably necessary to
effectuate the foregoing. In any proceedings with respect to any Bankruptcy
Event, the Noteholder irrevocably authorizes the Administrative Agent, on behalf
of the holders of the Senior Indebtedness:

(a) to vote claims comprising any Note Obligations and to accept or reject on
behalf of the Noteholder any plan proposed in connection with any such
Bankruptcy Event; (b) to accept and execute receipts for any payment or
distribution made with respect to any such Note Obligations and to apply such
payment or distribution to the payment of the Senior Indebtedness; and (c) to
take any action and to execute any instruments necessary to effectuate the
foregoing, either in the name of the Administrative Agent or in the name of the
Noteholder as the attorney-in-fact of the Noteholder. The Noteholder shall
provide to the Administrative Agent all information and documents reasonably
necessary to present such claims or seek enforcement as aforesaid.

 

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3.3. Restricted Payments.

(a) Notwithstanding any other provision of this Note, the Company will not make,
and the Noteholder will not accept or receive, any payment of any Note
Obligations, whether in cash, securities or other property or by way of
conversion, exchange or set-off or otherwise, and no such payment shall become
due; provided, however, that the Company may make any payment of Note
Obligations, and the Noteholder may accept any such payment, if at the time of
such payment and after giving effect thereto, no “Default” or “Event of Default”
(each as defined and used in the Credit Agreement) has occurred and is
continuing and the Company is in compliance with the covenants set forth in
Section 8.1 of the Credit Agreement calculated on a Pro Forma Basis.

(b) In the event that any payment shall be received by the Noteholder which is
prohibited by the foregoing provisions of this Section 3.3, then in such event
such payment shall be segregated and held in trust by the Noteholder for the
benefit of the holders of Senior Indebtedness, and shall forthwith be paid over
and delivered (together with any necessary endorsements) directly to the
Administrative Agent or its representative, for the benefit of holders of the
Senior Indebtedness, ratably according to the aggregate amounts remaining unpaid
on account of the principal of, and interest on, such Senior Indebtedness held
or represented by each, for application to the Senior Indebtedness to the extent
necessary to pay all such Senior Indebtedness in full after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness. The provisions of this Section 3.3 shall not apply to any payment
with respect to which Section 3.2 would be applicable.

3.4. Manner of Exercise.

(a) Subject to the provisions of the Credit Agreement and the other Loan
Documents, the Administrative Agent may take any actions to enforce Obligations
under the Senior Indebtedness:

 

  (i) in any manner in its sole discretion in compliance with applicable law;

 

  (ii) without consultation with the Noteholder;

 

  (iii) regardless of whether a proceeding during a Bankruptcy Event has been
commenced; and

 

  (iv) regardless of whether such exercise is adverse to the interest of the
Noteholder.

 

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(b) The rights of the Administrative Agent to enforce any provision of this Note
will not be prejudiced or impaired by:

 

  (i) any act or failure to act of the Company; or

 

  (ii) noncompliance by any Person other than the Administrative Agent with any
provision of this Note,

regardless of any knowledge thereof that the Administrative Agent may have or
otherwise be charged with.

(c) The Noteholder, in such capacity, will not contest, protest or object to, or
take any action to hinder, and it waives any and all claims with respect to, any
action taken by the Administrative Agent to enforce Obligations under the Senior
Indebtedness.

3.5. Remedies Standstill. Without the Administrative Agent’s prior written
consent, the Noteholder shall not institute judicial or foreclosure proceedings
to enforce any Note Obligations and the Noteholder shall not commence or join
with any other creditor of the Obligors in commencing any proceeding against the
Obligors seeking to effect an involuntary bankruptcy, receivership or similar
arrangement until the acceleration of maturity of the Senior Indebtedness.

3.6. Restrictions on Acceleration. Notwithstanding any contrary provision of
this Note, any Note Obligations or any Note Agreement, (a) no Note Obligations
(other than payments permitted by Section 3.3(a)) shall become or be declared to
be due and payable prior to the date on which the Senior Indebtedness becomes or
is declared to be due and payable and (b) if any Senior Indebtedness shall have
become or been declared to be due and payable prior to its stated maturity, the
Note Obligations shall become immediately due and payable.

3.7. Subrogation to Rights of Holders of Senior Indebtedness. If the Noteholder
pays or distributes cash, property or other assets to the Administrative Agent
or another holder of Senior Indebtedness, the Noteholder will be subrogated to
the rights of the Administrative Agent and/or such other holder of Senior
Indebtedness, as applicable, with respect to the value of such payment or
distributions; provided, that the Noteholder agrees not to assert or enforce any
such rights of subrogation it may acquire as a result of any such payment or
distribution until the payment in full of all Senior Indebtedness. For purposes
of such subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the Noteholder would
be entitled except for the provisions of this Section 3, and no payments over
pursuant to the provisions of this Section 3 to the Administrative Agent, for
the benefit of the holders of such Senior Indebtedness, by the Noteholder shall,
as among the Company, its creditors (other than holders of such Senior
Indebtedness) and the Noteholder, be deemed to be a payment or distribution by
the Company to or on account of such Senior Indebtedness.

3.8. Provisions Solely to Define Relative Rights. The provisions of this
Section 3 are and are intended solely for the purpose of defining the relative
rights of the Noteholder on the one hand and the holders of Senior Indebtedness
on the other hand. Nothing contained in this Section 3 or elsewhere in this

 

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Note is intended to or shall (a) impair, as among the Company, its creditors
(other than holders of Senior Indebtedness) and the Noteholder, the obligation
of the Company, which is absolute and unconditional, to pay to the Noteholder
the principal of, and interest on, and any other amount payable by the Company
hereunder as and when the same shall become due and payable in accordance with
its terms; or (b) affect the relative rights against the Company of the
Noteholder and its creditors (other than the holders of Senior Indebtedness); or
(c) except to the extent provided in Section 3.5 and 3.6 above, prevent the
Noteholder from accelerating this Note and exercising all other remedies
otherwise permitted by applicable law upon default under this Note, in each case
subject to the notice requirements provided in Section 2 hereof, and to the
rights, if any, under this Section 3 of the holders of Senior Indebtedness with
respect to the turnover of assets received upon the exercise of any such remedy.

3.9. No Waiver of Subordination Provisions. No right of any present or future
holder of any Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Note, regardless of any knowledge thereof any
such holder may have or be otherwise charged with. Without in any way limiting
the generality of the foregoing, the holders of Senior Indebtedness may at any
time and from time to time, without the consent of or notice to the Noteholder,
without incurring responsibility to the Noteholder and without impairing or
releasing the subordination provided in this Section 3 or the obligations
hereunder of the Noteholder to the holders of Senior Indebtedness, do any one or
more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (iii) take
security in any form for the Senior Indebtedness; (iv) release any Person liable
in any manner for the collection of Senior Indebtedness; and (v) exercise or
refrain from exercising or waiving any rights, powers or remedies against the
Company or any other Person.

3.10. Reinstatement. The provisions of this Note shall continue to be effective
or be reinstated, as the case may be, if at any time, upon the occurrence of a
Bankruptcy Event or otherwise, any payment of any of the Senior Indebtedness is
rescinded, invalidated, avoided, declared to be fraudulent or preferential, set
aside or must otherwise be returned by any holder of Senior Indebtedness (a
“Recovery”), all as though such payment had not been made. If the provisions of
this Note are terminated prior to any such Recovery, the provisions of this Note
will be reinstated in full force and effect, and such prior termination will not
diminish, release, discharge, impair or otherwise affect the obligations of the
parties hereto from the date of reinstatement. Upon any such reinstatement, the
Noteholder will deliver to the Administrative Agent any proceeds or other
payments made by Company between the purported payment in full of the Senior
Indebtedness and their reinstatement in accordance with this Section 3. The
Noteholder may not benefit from any Recovery, and any distribution made to it as
a result of any Recovery will be paid over to the Administrative Agent for
application to the Senior Indebtedness in accordance with this Section 3.

3.11. Amendment. The subordination provisions of this Section 3 are solely for
the benefit of the holders of the Senior Indebtedness and may not be rescinded,
canceled, amended or modified in any way without the prior written consent of
the Required Lenders to be affected by such rescission, cancellation, amendment
or modification.

 

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3.12. Refinancing. If the Company issues other indebtedness in exchange or
replacement for the Senior Indebtedness, in whole or in part (a “Refinancing”),
then the Senior Indebtedness will automatically be deemed not to have been
discharged or paid in full for all purposes of this Section 3. Upon Noteholder’s
receipt of a notice stating that the Company has entered into a new loan or
credit document with respect to a Refinancing and identifying the new agent
thereunder (the “New Agent”),

(a) the indebtedness and obligations under such new credit or loan documents
will be treated as Senior Indebtedness for all purposes under this Note; and

(b) the New Agent under such new credit or loan documents will be Administrative
Agent for all purposes under this Note.

3.13. Remedies. The Administrative Agent, on behalf of the holders of Senior
Indebtedness, shall be entitled to enforce their rights under this Section 3
specifically, to recover damages by reason of any breach of any provision of
this Section 3 and to exercise all other rights existing in their favor. The
Noteholder and the Company each acknowledges and agrees that money damages may
not be an adequate remedy for any breach of the provisions of this Section 3 and
that the Administrative Agent, on behalf of holders of Senior Indebtedness, may
apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive relief in order to enforce or prevent any
violation of the provisions of this Section 3.

3.14. No Collateral. The Obligors shall not grant, and the Noteholder shall not
demand, accept or receive, any collateral, direct or indirect, for any Note
Obligation.

3.15. Payment in Full. For the purposes of this Note, no Senior Indebtedness
shall be deemed to have been paid in full unless the holder thereof shall have
received immediately available cash equal to the amount thereof then
outstanding, all commitments to extend credit that would be Senior Indebtedness
have been irrevocably terminated or have expired and the termination or cash
collateralization of all letters of credit that, if drawn upon, would constitute
Senior Indebtedness; provided, however, that if the holders of the Senior
Indebtedness are required by reason of a judgment or order of any court or
administrative authority having competent jurisdiction to repay any amounts or
property received by the Administrative Agent, on behalf of the holder of the
Senior Indebtedness, or the holders of the Senior Indebtedness, on account of
the Obligations, and the Administrative Agent, on behalf of the holders of the
Senior Indebtedness, or the holders of the Senior Indebtedness, repay or return
such amounts or property, then the subordination provisions of this Note shall
be reinstated retroactively with respect to the amounts so repaid or property so
returned as if such amounts or property had never been received by the
Administrative Agent, on behalf of the holder of the Senior Indebtedness, or the
holders of the Senior Indebtedness notwithstanding any termination thereof or
the cancellation of any instrument or agreement evidencing any of the
Obligations.

3.16. Effectiveness during Bankruptcy Event Proceedings. The provisions of this
Section 3, which the parties hereto expressly acknowledge constitute a
“subordination agreement” under section 510(a) of the Bankruptcy Code, will be
effective before, during and after the commencement of proceedings under a
Bankruptcy Event. All references in this Note to the Company will include such
Person as a debtor-in-possession and any receiver or trustee for such Person in
any proceedings during a Bankruptcy Event.

 

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3.17 Acknowledgment. The Company acknowledges that the Investor has executed
that certain Acknowledgment and Agreement, dated as of October [    ], 2013,
pursuant to which the Investor has acknowledged and agreed to the provisions of
this Section 3, and the Company shall use its best efforts to cause any
additional Noteholder to execute an Acknowledgment and Agreement in the form of
Exhibit A attached hereto.

 

4. DEFINITIONS.

Capitalized terms defined in the Credit Agreement and not otherwise defined in
this Note shall have the meanings provided in the Credit Agreement. The
following terms used in this Note shall have the following meanings:

“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent under the Credit Agreement, together with any successors or
assigns thereof.

“Bankruptcy Code” means Title 11 of the United States Code and any successor
statute.

“Business Day” means any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York or is a day on which
banking institutions located in New York, New York, are authorized or required
by law or other governmental action to close.

“Credit Agreement” shall mean the Credit Agreement, dated as of October 30, 2013
(as amended, restated, extended, renewed, increased, supplemented, refinanced,
replaced or otherwise modified and in effect from time to time), among Sprague
Operating Resources LLC, as Borrower, the lenders from time to time party
thereto, the Administrative Agent and the other agents parties thereto.

“Default” means any event, act or condition which with notice or lapse of time,
or both, would constitute an Event of Default.

“Note Agreement” means any agreement pursuant to which this Note was issued and
any other present or future agreement or instrument from time to time entered
into among the Company or any other Obligor relating to, amending or modifying
such agreement referred to above, each as from time to time in effect.

“Note Obligations” mean any and all obligations of the Company under this Note
or under any Note Agreement with respect to this Note, including without
limitation the obligation to pay principal, interest, expenses, attorneys’ fees
and disbursements, indemnities and other amounts payable thereunder or in
connection therewith or related thereto.

“Obligations” has the meaning ascribed thereto in the Credit Agreement.

“Post Petition Interest” means interest accruing in respect of Senior
Indebtedness after any Bankruptcy Event at the rate applicable to such Senior
Indebtedness pursuant to the Credit Agreement, whether or not such interest is
allowed as a claim enforceable against the Company or any other Loan Party in a
bankruptcy case under the Bankruptcy Code, and any other interest that would
have accrued but for the occurrence of such Bankruptcy Event.

 

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“Senior Indebtedness” means the Obligations and any other amounts owing to the
Administrative Agent or the Lenders (as defined in the Credit Agreement)
pursuant to the Credit Agreement or any other Loan Document and all interest,
including without limitation Post Petition Interest, with respect to the
Obligations and such other amounts.

 

5. GENERAL

5.1. Amendments and Waivers. Subject to the restrictions set forth in
Section 3.11, any provision of this Note may be amended, modified, terminated or
waived only with the written consent of the Noteholder, the Administrative Agent
and the Company. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on the Company in any case shall entitle the Company to any further
notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 5.1
shall be binding upon the Noteholder at the time outstanding and each future
holder thereof.

5.2. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitation of, another covenant shall not avoid
the occurrence of an Event of Default or Default if such action is taken or
condition exists.

5.3. Notices. All notices, requests, demands, claims and other communications
hereunder shall be in writing and shall be sent by facsimile, overnight courier,
registered mail or certified mail. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given, as applicable, (a) upon
confirmation of facsimile, (b) one business day following the date sent when
sent by overnight delivery or (c) five business days following the date mailed
when mailed by registered or certified mail return receipt requested and postage
prepaid at the following address:

If to the Company, to:

[Sprague Entity]

Two International Drive

Suite 200

Portsmouth, New Hampshire 03801

Attention: Paul Scoff, Esq.

Fax: (603) 430-5324

If to the Noteholder, to:

[Name of Axel Johnson Affiliate]

[Address of Axel Johnson Affiliate]

Attention: [                    ]

Telephone: [                    ]

Fax: [                    ]

 

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If to the Administrative Agent, to:

JPMorgan Chase Bank, N.A.

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

Notwithstanding the foregoing, the Company or the Noteholder may send any
notice, request, demand, claim, or other communication hereunder to the intended
recipient at the address set forth above using any other means (including
personal delivery, expedited courier, messenger service, facsimile, telex,
ordinary mail, or electronic mail); provided, however, that no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. The
Company and the Noteholder may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by
giving the other party notice in the manner herein set forth.

5.4. Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay
on the part of the Noteholder in the exercise of any power, right or privilege
hereunder or under this Note shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing under this Note are cumulative to and not exclusive
of, any rights or remedies otherwise available.

5.5. Severability. In the event that any provision of this Note would, under
applicable law, be invalid or unenforceable in any respect, such provision shall
(to the extent permitted by applicable law) be construed by modifying or
limiting it so as to be valid and enforceable to the maximum extent compatible
with, and possible under, applicable law. The provisions of this Note are
severable, and in the event any provision of this Note should be held invalid or
unenforceable in any respect, it shall not invalidate, render unenforceable or
otherwise affect any other provision of this Note.

5.6. Headings. The headings contained in this Note are inserted only as a matter
of convenience and for reference only and in no way define, limit or describe
the scope or intent of this Note.

5.7. Governing Law, etc. This Note shall be governed by and construed in
accordance with the laws of the State of New York. Each of the parties hereto
hereby irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of New York and of the United States of
America located in the Borough of Manhattan for any actions, suits or
proceedings arising out of or relating to this Note and the transactions
contemplated hereby, and each of the parties hereto agrees not to commence any
action, suit or proceeding relating hereto or thereto except in such courts.
Each of the parties hereto hereby irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Note or the transactions contemplated hereby or thereby, in the courts
of the State of New York or the United States of America located in the Borough
of Manhattan, and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
In any action or suit to enforce any right or remedy under this Note or to
interpret any provision of this Note, the prevailing party shall be entitled to
recover its costs, including reasonable attorneys’ fees.

 

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5.8. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, EACH OF THE PARTIES HERETO HEREBY WAIVES, AND COVENANTS THAT
IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO
TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF
ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR
INVESTIGATION ARISING OUT OF OR BASED UPON THIS NOTE OR THE SUBJECT MATTER
HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS
CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. ANY
PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 5.8 WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF
ITS RIGHT TO TRIAL BY JURY.

5.9. Delivery. Delivery of an executed signature page of this Note by facsimile
transmission or other electronic transmission shall be effective as delivery of
a manually executed counterpart hereof. A set of the executed copies of this
Note shall be lodged with the Borrower and the Administrative Agent.

[The rest of this page intentionally left blank]

 

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The undersigned has caused this Note to be executed by its duly authorized
officer as of the date first written above.

 

[SPRAGUE ENTITY] By:  

 

  Name:   Title:

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

EXHIBIT A

ACKNOWLEDGMENT AND AGREEMENT

Reference is made to that certain Credit Agreement, dated as of October 30, 2013
(as amended, restated, extended, renewed, increased, supplemented, refinanced,
replaced or otherwise modified and in effect from time to time, the “Credit
Agreement”), among Sprague Operating Resources LLC, as borrower (the
“Borrower”), the lenders from time to time party thereto, JPMorgan Chase Bank,
N.A., as administrative agent (in such capacity, together with its successors
and assigns, the “Administrative Agent”) and the other agents parties thereto.
Capitalized terms used herein not otherwise defined shall have the meaning
ascribed thereto in the Credit Agreement.

The undersigned, [Name of Axel Johnson Affiliate] (the “Noteholder”), hereby
acknowledges and agrees to the subordination provisions of Section 3 of each
note or instrument entered into by any of the Loan Parties with respect to any
Axel Johnson Subordinated Indebtedness. Further, the Noteholder shall cause each
successor or assign of any of the Noteholder’s rights or obligations under any
such note or instrument to execute an acknowledgment and agreement on
substantially the form hereof.

This Acknowledgment and Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns. This
Acknowledgment and Agreement may be executed in any number of counterparts,
which together shall constitute one instrument. Delivery of an executed
counterpart of a signature page of this Acknowledgment and Agreement by telecopy
or electronic transmission (in .pdf format) shall be effective as delivery of a
manually executed counterpart of this Acknowledgment and Agreement. THIS
ACKNOWLEDGMENT AND AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.

[Signature Page Follows]

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The terms set forth in this Acknowledgment and Agreement are hereby agreed to:

 

[NAME OF AXEL JOHNSON AFFILIATE] By:  

 

  Name:   Title:

 

ACKNOWLEDGED: SPRAGUE OPERATING RESOURCES LLC By:  

 

  Name:   Title: JPMORGAN CHASE BANK, N.A., as Administrative Agent By:  

 

  Name:   Title:

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

Exhibit I

to Credit Agreement

RISK MANAGEMENT POLICY

Sprague Operating Resources LLC

Risk Management Policy

December 5, 2011

- This information is confidential and proprietary to Sprague Operating

Resources LLC

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

Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -   12/5/2011        

 

TABLE OF CONTENTS

 

1.   RISK MANAGEMENT PHILOSOPHY, OBJECTIVES AND PROCESS      4   

1.1

 

OVERVIEW

     4   

1.2

 

RISK MANAGEMENT PHILOSOPHY

     5   

1.3

 

RISK MANAGEMENT OBJECTIVES AND PROCESS

     5    2.   ORGANIZATIONAL STRUCTURE ROLES AND RESPONSIBILITIES      7    2.1
  OVERVIEW      7    2.2   BOARD OF DIRECTORS      7    2.3   RISK MANAGEMENT
COMMITTEE      8    2.4   CHIEF RISK OFFICER      9    2.5   QUANTITATIVE
ANALYSIS      10    2.6   CREDIT RISK      11    2.7   MIDDLE OFFICE      11   
2.8   CONTRACT ADMINISTRATION      12    2.9   SUPPLY / TRADING AND MARKETING   
  13          2.9.1    

    Front Office

     13          2.9.2    

    Trading and Marketing Officers

     13          2.9.3    

    Pricing

     13          2.9.4    

    Trading Leaders

     14          2.9.5    

    Traders

     14          2.9.6    

    Market Leaders

     15          2.9.7    

    Marketers

     15   

2.10

 

SUPPORT FUNCTIONS

     16      2.10.1    

Back Office

     16      2.10.2    

Operations Accounting

     16      2.10.3    

Information Technology

     16      2.10.4    

Legal

     17      2.10.5    

Tax

     18      2.10.6    

Internal Audit

     18    3.   COMPLIANCE AND ENFORCEMENT      19   

3.1

 

REPORTING INCIDENTS OF NON-COMPLIANCE

     19   

3.2

 

SANCTIONS

     19      3.2.1    

Examples of Sanctions

     20      3.2.2    

Fraud or Willful Acts of Misrepresentation

     20    4.   VALUATION, RISK MEASUREMENT AND CONTROL      22    4.1  
VALUATION FREQUENCY      22    4.2   VALUATION DATA SOURCES      22    4.3  
VALUATION RESERVES      22    4.4   PORTFOLIO DEFINITIONS      22    4.5  
MARKET RISK LIMITS      24    4.6   POSITION LIMITS      25    4.7   STOP LOSS
LIMITS      28    4.8   VALUE AT RISK LIMITS      28    4.9   CREDIT LIMITS     
28   

 

2

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

Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -   12/5/2011        

 

5.   CREDIT RISK      29    6.   CONTROL PROCESSES      30      6.1   
MANAGEMENT REPORTING      30      6.2    OFF-PREMISES / AFTER HOURS TRANSACTIONS
     30      6.3    CONFIRMATIONS      30      6.4    PERSONAL ACCOUNTS      30
     6.5    CONTRACT SIGNATURE AUTHORIZATION      30    7.   PROCESSES FOR NEW
PRODUCTS, NON-STANDARD TRANSACTIONS, AND ELECTRONIC TRADING SYSTEMS      32   

7.1

 

NEW PRODUCT

     32      7.1.1    Definition of New Product      32      7.1.2    New
Product Objectives      32      7.1.3    New Product Approval Process      33   

7.2

 

NON-STANDARD TRANSACTION

     34      7.2.1    Definition of Non-Standard Transaction      34      7.2.2
   Non-Standard Transaction Approval Process      35      7.2.3    Electronic
Trading Systems      36    EXHIBIT 1 — APPROVED PRODUCTS LIST      38    EXHIBIT
1 — APPROVED PRODUCTS LIST (CONT.)      39    EXHIBIT 2 — PRODUCT DEFINITIONS   
  40    EXHIBIT 2 — PRODUCT DEFINITIONS (CONT.)      41    EXHIBIT 2 — PRODUCT
DEFINITIONS (CONT.)      42    EXHIBIT 3 — MARKET RISK LIMIT STRUCTURE      43
   EXHIBIT 4 — SAMPLE NEW PRODUCT APPROVAL FORM      44    EXHIBIT 4 — SAMPLE
NEW PRODUCT APPROVAL FORM (CONT.)      45    EXHIBIT 5 — EMPLOYEE CONFIRMATION
     46    EXHIBIT 6 — MANAGEMENT REPORTS & CONTROL PROCESSES      47    EXHIBIT
6 — MANAGEMENT REPORTS & CONTROL PROCESSES (CONT.)      48    ATTACHMENT 1 —
SPRAGUE RISK MANAGEMENT ORGANIZATION      49    ATTACHMENT 2 — APPROVED PHYSICAL
OIL PRODUCTS      50    ATTACHMENT 3 — AUTHORIZED OIL TRADERS AND INSTRUMENTS
LIST      61    ATTACHMENT 4 — AUTHORIZED NAT GAS TRADERS AND INSTRUMENTS LIST
     66    ATTACHMENT 5 — APPROVED MATERIALS HANDLING PRODUCTS      70   

 

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I. RISK MANAGEMENT PHILOSOPHY, OBJECTIVES AND PROCESS

 

  1.1 Overview

Sprague Operating Resources LLC (“Sprague” or “the Company”) is a Delaware
limited liability company engaged in the purchase, storage, distribution and
sale of refined petroleum products, and natural gas and also provides storage
and handling services for a broad range of materials. We are one of the largest
independent wholesale distributors of refined products in the Northeast United
States based on aggregate terminal capacity. We own and/or operate a large
network of 15 refined products and materials handling terminals strategically
located throughout the Northeast. We also have access to approximately 50
third-party terminals in the Northeast through which we sell or distribute
refined products.

Sprague operates its business and reports results under three business segments:
refined products, natural gas and materials handling. The refined products
segment purchases a variety of refined products, such as heating oil, diesel
fuel, residual fuel oil, kerosene, jet fuel and gasoline (primarily from
refining companies, trading organizations and producers) and sells them to our
customers. The wholesale customers resell the refined products we sell to them
and commercial customers consume the refined products we sell to them. The
wholesale customers consist largely of home heating oil retailers and diesel
fuel and gasoline resellers. The commercial customers include federal and state
agencies, municipalities, regional transit authorities, large industrial
companies, hospitals and educational institutions. Although for internal
purposes Sprague separates its refined products and natural gas businesses into
smaller components (e.g. Supply and Marketing), it consolidates results of these
groups for reporting purposes.

With respect to its refined products (a.k.a. oil) and natural gas businesses,
Sprague enters into a variety of transactions including exchange-traded futures
and options contracts and various over-the-counter derivative instruments that
may result in physical delivery or are settled financially. In order to manage
the risks associated with its core business activities, Sprague has centralized
its supply and trading activities into its Portsmouth, NH headquarters.

The Supply and Trading mandate consists of the following:

 

1. System Related Activities: Management of commodity supply requirements and
commitments (and the associated price risks) arising from the following core
business activities:

 

  a. Refined Products (Oil) Marketing: As indicated, Sprague has an extensive
network of refined products terminals along the U.S. East Coast, providing the
foundation for its refined products marketing activities. As indicated, in
addition to the Sprague-operated terminals, Sprague markets products from a
range of 3rd-party facilities. Sprague’s annual Oil Marketing sales are nearly
30 million barrels.

 

  b. Refined Products (Oil) Supply: The key role of the Oil Supply group is to
provide supply to support Sprague’s Oil Marketing system requirements. Included
is supply at the facilities owned or operated by Sprague as well as a large
number of third-party locations. A significant part of Sprague’s Oil Supply
profitability is typically related to meeting system supply requirements, e.g.
optimizing the timing of purchases in the physical (a.k.a. cash) markets when
oil product basis levels are lower than sales that have been or will be
completed by Oil Marketing. In addition, a key focus of Oil Supply is management
of the hedges and associated futures / swaps contract rolls associated with the
refined products inventory.

 

  c. Natural Gas Marketing: Sprague’s Natural Gas Marketing business is focused
on delivering natural gas to industrial and commercial customers, primarily in
the Northeast United States. Marketing obtains its supply exclusively from
Sprague’s Natural Gas Supply group and sells natural gas via a range of contract
types, including various kinds of forward contracts. Annual Natural Gas
Marketing sales are over 50 BCF.

 

  d. Natural Gas Supply: A primary role for the Natural Gas Supply group is to
procure and deliver the supply needed for Marketing’s industrial and commercial
customers. All of Natural Gas Marketing’s supply requirements are met by Natural
Gas Supply.

 

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2. Discretionary Trading: Entering into contracts with the objective of
generating profits on or from the exposure to shifts in market prices. In
general, this is a limited activity at Sprague, as described below.

 

  a. Oil Supply: Oil Supply can take discretionary positions, including both
physical and financial. These positions are generally based on capitalizing on
Sprague’s analysis and assessment of the fundamental supply / demand environment
and other pertinent market knowledge leading to a view of the forward market,
though are not specifically required to meet system supply requirements.

 

  b. Natural Gas Supply: In addition to meeting Natural Gas Marketing’s
requirements, Natural Gas Supply also sells natural gas to wholesale customers
(resellers) as well as to gas utilities and power generation facilities. Natural
Gas Supply does not undertake discretionary trading, rather focuses on meeting
wholesale supply commitments in a timely and cost effective manner.

 

  1.2 Risk Management Philosophy

It is the general philosophy of Sprague to hedge risks associated with its core
business activities. Additionally, Sprague may assume risk within approved
limits in order to grow the business and increase earnings. However, taking
risks outside of approved limits is not permitted without prior approval of the
Risk Management Committee (“RMC”).

 

  1.3 Risk Management Objectives and Process

The objective of the risk management program at Sprague is to identify, measure,
monitor, and control Sprague’s major risks (primarily market, credit and
operational risk, recognizing that physical operations risks, liquidity risks,
and business risks are not explicitly addressed in this policy) on a timely
basis to better manage the business, thereby optimizing the Company’s financial
performance. See Section 2.3 for definitions of the major risks.

Managing of these risks is achieved through determination of the Company’s
financial objectives and risk tolerance, optimal allocation of risk capital to
the Company’s business activities, an appropriate system of internal control
systems and processes and the prudent actions of Sprague’s management, traders
and staff.

Sprague’s Risk Management Policy and related documents i.e., policies,
procedures, model documentation, etc. (collectively the “Risk Management and
Control Documents”) establish standards for monitoring and controlling the
financial risks associated with Sprague’s core businesses. The policy includes
controls associated with asset optimization, hedging, marketing and
discretionary trading activities. These documents codify Sprague’s control
practices and therefore reduce the likelihood of sustaining material
unanticipated losses. It is expected that the policy will be updated as
necessary based on developments either within or outside the company. This
Policy does not constitute a contract or agreement with employees or contract
workers and may be modified or withdrawn at any time at the Risk Management
Committee’s sole discretion, consistent with any obligations contained in
Sprague’s credit facility.

The risk management process includes the following key elements:

 

  A. Identifying risks;

 

  B. Measuring and assessing risks;

 

  C. Establishing risk limits and guidelines;

 

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  D. Executing transactions and strategies properly, consistent with Sprague’s
risk tolerance;

 

  E. Recording positions and processing transactions properly;

 

  F. Validating policies, guidelines, procedures, methodologies, and models on
an ongoing basis; and

 

  G. Monitoring performance against approved limits and targets.

 

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2. ORGANIZATIONAL STRUCTURE ROLES AND RESPONSIBILITIES

 

  2.1 Overview

In accordance with prevailing industry practice, lines of authority and
responsibility for managing and controlling risk for trading, commercial and
operations are clearly delineated. In particular, the appropriate separation
between the transacting, risk monitoring/reporting and settlement/accounting
functions is maintained through a three-office structure (front, middle and back
offices). In addition, the Risk Analysis and Control function (“Middle Office”)
will report and monitor exposures and limits independent of the commercial
business functions. It is the responsibility of senior management and the RMC to
ensure that appropriate segregation of duties is maintained in the context of
organizational changes.

Risk monitoring of operational, health, safety and environmental matters is
divided between operational line management, senior management of Sprague and
the Legal Department.

Risk management and internal control are the responsibility of all Company
personnel. An essential element of a strong risk control framework is the
recognition by all employees of the need to carry out their responsibilities
effectively and to communicate to the appropriate level of management any
problems in operations, instances of non-compliance, or other violations. As it
relates to Sprague’s transacting activities, prohibited activities include, but
are not limited to the following:

 

  A. Wash sales2, roundtrip trades, offsetting transactions, or transactions
that attempt to artificially inflate volume or revenue;

 

  B. Transactions or strategies specifically prohibited by the various
regulatory agencies having jurisdiction over our business.

Any employee that becomes aware of such behavior or is contacted by a third
party and requested to engage in such behavior should report such incidents in
accordance with Section 3.1 of this Policy.

 

  2.2 Board of Directors

The Axel Johnson, Inc. (“AJI”) Board of Directors (“Board of Directors”) is
ultimately responsible for overseeing all activities of Sprague. In the context
of risk management oversight, this body will define the risk tolerance (overall
limits) of the Company and ensure that appropriate systems, processes and
internal controls are in place to measure, monitor and manage the Company’s risk
exposure, in particular market, credit and operational risk.

The Board of Directors has in turn delegated authority and responsibility to the
Risk Management Committee and certain Officers of the Company for the bulk of
the risk oversight function (see section 2.3). Changes in the overall risk
exposure limits (e.g., VaR, stop loss, outright positions) and maximum credit
limits must still be approved by the Board of Directors. Note that although
discussions and communication with the Board of Directors is referenced in this
policy, the common approach will be for Sprague to conduct the direct
communication with Axel Johnson, Inc. President or designee. Subsequent
communication with other Board of Directors members will be either done directly
or managed by the AJI President.

 

I This document refers to specific positions and titles currently in place
within Sprague. If the titles change due to factors such as promotions or
changes in scope, the title changes would not affect the defined roles,
responsibilities, etc.

2 FERC defines such transactions as those involving the intentional and
simultaneous purchase and sale of an energy product to another company at the
same price at the same delivery point

 

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  2.3 Risk Management Committee

The Risk Management Committee (“RMC”) maintains general oversight of all risk
taking and risk management activities of the Company, including:

 

  •   Market risk related to commodity prices, foreign exchange rates and
interest rates. The primary component of this risk for Sprague is the exposure
to commodity price volatility and the potential for financial losses;

 

  •   Credit risk. This risk reflects the exposure to credit quality of
Sprague’s counterparties and the potential for non-performance of their
obligations;

 

  •   Physical operations risk. This risk reflects the range of exposures that
are associated with Sprague’s physical operations, primarily within terminals
and trucking. Key exposures include health, safety, and environmental areas as
well as the risks associated with not meeting customer obligations;

 

  •   Operational risk. This risk refers to having inadequate systems and
control processes as well as explicit items such as fraud and human error;

 

  •   Liquidity risk. This is essentially a financial risk due to uncertain
liquidity, e.g., if cash outflows are too large relative to cash inflows and
available credit lines. Liquidity issues can also occur due to significant
ownership of assets with low liquidity; and

 

  •   Business risk. This reflects the range of standard risks of operating a
business, including factors such as uncertainty in product demand, legal risk,
and regulatory risk.

The RMC has authority and responsibility for:

 

  •   Monitoring all risk taking and risk management activities of the Company;

 

  •   Ensuring development and communication of appropriate Risk Management and
Control Policies and ensuring that such documents are updated periodically, as
needed;

 

  •   Ensuring that Risk Management and Control Documents are adhered to;

 

  •   Ensuring that appropriate internal control processes are established and
adhered to;

 

  •   Reviewing and approving new products, trading instruments and entry into
new markets;

 

  •   Reviewing and approving proposed interest rate risk management strategy,
e.g. proportion of fixed and floating instruments;

 

  •   Monitoring adequacy of staffing of resources devoted to commercial and
risk management activities and ensuring that clear lines of authority and
responsibility exist for assessing, measuring, and managing risks;

 

  •   Curtailing or suspending trading activities, if necessary due to out of
compliance actions, processes or results;

 

  •   Ensuring that RMC actions and decisions are properly documented and acted
upon in a timely manner;

 

  •   Ensuring the development of appropriate systems for recording, monitoring
and reporting the results of trading and exposure management activities; and

 

  •   Reviewing and approving all changes to the Risk Management Policy, with
the following exceptions.

RMC changes requiring approval of the Board of Directors:

 

  •   Overall risk exposure limits (e.g., VaR, stop loss, outright positions);
and

 

  •   Maximum credit limits.

The Sprague Operating Resources LLC President and CEO is authorized to appoint a
Chairperson and a Secretary to the Risk Management Committee to be confirmed by
the Board of Directors. The current makeup of the RMC is as follows:

 

  •   President and CEO (committee chairperson);

 

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  •   Chief Operating Officer / Chief Financial Officer (committee
vice-chairperson);

 

  •   General Counsel (committee secretary);

 

  •   VP, Oil Trading, Pricing and Customer Service

 

  •   VP, Sales

 

  •   VP, Operations,

 

  •   VP and Chief Information Officer; and

 

  •   Chief Risk Officer.

Other participants can be invited for particular meetings depending on the
planned topics. Potential participants include employees with direct
responsibility for key elements of risk within the Company such as the VP Oil
Trading, VP Natural Gas, and Managing Director(s) Sales. In addition, the AJI
President and CEO is expected to be a frequent participant, depending on
scheduling constraints and the planned discussion topics.

The RMC is expected to meet approximately bi-monthly, or more frequently as
needed. A meeting may be conducted in person or via conference call. Five RMC
members or their designees must be present in order to constitute a quorum. The
members required to be present in order to constitute a quorum are:

 

  •   Chief Risk Officer (CRO);

 

  •   President and CEO (or designee);

 

  •   Chief Operating Officer / Chief Financial Officer (COO / CFO) [or
designee];

 

  •   VP, Oil Trading, Pricing and Customer Service (or designee); and

 

  •   VP, Sales (or designee).

Note that any overlap in the designees is limited to a maximum of two of the
five “quorum” members, i.e. a minimum of three of the five members listed above
must participate in the bi-monthly meeting either in person or by phone. If
there are time sensitive issues that need to be addressed, the CRO can address
directly with the President / CEO and/or the COO / CFO outside of the regular
meetings. For these discussions other Sprague participants will be included as
appropriate.

Agendas for each RMC meeting are determined by its members. At any time, a
member has the right to call a meeting by giving advance notice to the other
members. A quorum must be present for any business of the RMC to take place. RMC
actions may be approved by a positive vote from the Chief Risk Officer along
with a simple majority vote of the quorum and shall be recorded in the minutes
of the meeting. Minutes will be taken by the Secretary and distributed to
Committee members and other appropriate personnel with a copy to be kept on file
in the Legal Department. If the General Counsel or a designee is not a
participant at the meeting, it is the responsibility of the Chief Risk Officer
to take and distribute minutes from the meeting.

 

  2.4 Chief Risk Officer

The Chief Risk Officer assists the RMC in fulfilling its responsibilities and
serves management and the Board of Directors through the following risk control
responsibilities:

 

  A. Providing risk management oversight including identifying and classifying
material risks facing the company;

 

  B. Establishing uniform standards within the Company for risk assessment and
measurement, including reporting requirements and valuation techniques
(excluding valuation standards of acquisitions / investments which are the
responsibility of the COO / CFO);

 

  C. Developing and implementing an effective and efficient risk control
infrastructure and improving the effectiveness and efficiency of internal
controls;

 

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  D. Designing and implementing market risk and credit risk measurement
methodologies, procedures, and report formats with the assistance of Front
Office, Back Office and Support personnel;

 

  E. Overseeing model development, validation and testing processes to ensure
that market and credit risks are appropriately quantified;

 

  F. Responding to risk assessment by assisting Front Office personnel in
devising strategies for mitigation and/or transfer of risk;

 

  G. Validating and approving (with assistance from third parties, if necessary)
valuation models/algorithms, forward price curves, price models (where market
quotes are not available) and related assumptions and providing independent
valuation of Supply / Trading and Marketing activities;

 

  H. Overseeing compliance with this Policy and related procedures and
communicating any deviations and limit breaches to the RMC as appropriate;

 

  I. Working with Trading Leaders, ensuring that appropriate immediate and
short-term portfolio actions are taken in the event that a risk limit is
exceeded;

 

  J. Presenting the status of risk management and risk monitoring systems and
processes to the RMC on a regular basis; and

 

  K. Leading the risk assessment of business opportunities such as acquisitions
/ divestments.

The Chief Risk Officer also leads the Risk Management Department (ATTACHMENT 1).
This group’s primary direct risk role is for the Middle Office activities,
though Insurance also reports into Risk as well as the Financial Planning and
Analysis function. In addition to the Sprague organization and reporting
structure, the Chief Risk Officer also has a direct reporting relationship to
the Board of Directors. In this structure, the Chief Risk Officer has the
ability to report any issues directly to the Board of Directors without
additional Sprague review if the Chief Risk Officer considers it necessary.

 

  2.5 Quantitative Analysis

The Supply / Trading and Marketing groups are expected to work with the Middle
Office and Quantitative Analysis to develop report formats and methodologies for
transaction valuation and risk measurement. The Chief Risk Officer will review
and approve such formats and methodologies. The Middle Office will, in turn, use
the approved methodologies and formats for accurate transaction valuation, risk
measurement, and reporting.

Responsibilities include the following:

 

  A. Facilitating development of reports of appropriate risk measures covering
Supply / Trading and Marketing activity including, but not limited to, Risk
positions, MTM, option Greeks, and VaR;

 

  B. Validating valuation models through backtesting and/or other reasonable
methods;

 

  C. Recommending improvements to risk measurement techniques;

 

  D. Providing independent analysis of Non-Standard deals as necessary;

 

  E. Developing pricing models including forward curves methodologies and new
product valuations;

 

  F. Providing analytical support as appropriate to support Company initiatives;

 

  G. Coordinating with IT, Front and Middle Offices and other relevant
stakeholders prior to utilizing new software to ensure stability of Information
Services infrastructure; and

 

  H. When necessary, participating in the formal review and approval process of
new products and trading instruments to ensure that they can be measured and
managed.

 

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  2.6 Credit Risk

The Credit Department is responsible for evaluating the creditworthiness of
potential and existing transacting partners and establishing counterparty credit
risk limits. Additional responsibilities include establishing credit risk
measurement methodologies and monitoring counterparty credit exposure on a daily
basis to ensure that counterparty credit limits are adhered to and utilized in a
manner consistent with the Company’s risk tolerance. Refer to Sprague’s Credit
Management Policy and related documentation for measurement, management and
reporting of Credit Risks. The Credit function reports to Treasury.

 

  2.7 Middle Office

The Middle Office provides a significant level of control and monitoring of the
Front Office’s activities and, therefore, is independent of the Front Office,
reporting to the Chief Risk Officer. The Middle Office function includes
assuring data integrity through deal validation and executing the risk
monitoring requirements authorized by the RMC. The important control areas and
responsibilities include the following:

 

  A. Collecting market data (prices, volatilities, interest rates, etc.) from
independent sources for mark-to-market assessment;

 

  B. Validating and modeling forward curves for all commodity exposures (market
analysis);

 

  C. Ensuring that the transactions in the Company’s Trading and Risk Management
System(s) accurately reflect each day’s activity by performing daily check out
with the daily transaction summary from Supply / Trading and Marketing personnel
and broker statements;

 

  D. Calculating mark-to-market and VaR on a daily basis;

 

  E. Monitoring compliance with risk limits;

 

  F. Reporting suspected violations of the Company’s Risk Management and Control
Documents to the Chief Risk Officer;

 

  G. Identifying weaknesses and opportunities for enhancement in the control
environment, developing solutions and implementing strategies;

 

  H. Managing the reporting of results by “book” structure to accomplish both
Front and Back Office objectives;

 

  I. Producing and distributing reports on a daily basis showing net positions;

 

  J. Reporting the realized and unrealized (forward mark-to-market) P&L of
executed transactions on a daily, month-to-date, and year-to-date basis; and

 

  K. Working with Accounting to ensure understanding of any differences in P&L
reported by Risk and Accounting results;

A strong segregation of duties must exist between Trading/Marketing and Middle
Office activities. The activities of the Middle Office do not replace the
traders’ and marketers’ primary responsibility for assessing the risks
associated with their positions and the timely and accurate recording of all
transactions with written confirmations and/or on recorded phone lines in
accordance with the Company’s Contract Administration and Confirmations
procedures.

 

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  2.8 Contract Administration

Contract Administration has primary responsibility for the administration and
maintenance of contracts and agreements related to the trading of all approved
commodities. These contracts and agreements include: (i) Master Agreements,
(ii) Confirmations based upon such Master Agreements, (iii) Stand-alone
Agreements, (iv) One-off Agreements, (v) ISDA Master Agreements for financial
derivatives, (vi) Confirmations based upon such ISDA Master Agreements, and
(vii) ISDA Long Form Confirmation Agreements for financial derivatives.
Additionally, Contract Administration is responsible for the development,
negotiation as appropriate, administration and maintenance of other Company
contracts and agreements including, but not necessarily limited to,
(i) Throughput and or Exchange Agreements, (ii) Electronic Trading Platform
Agreements, (iii) Natural Gas Transportation and Storage Agreements,
(iv) Assignment and Assumption Agreements, and (v) Other contracts and
agreements needed and requested by various Front Office departments. Contracts
Administration will work in conjunction with the Legal Department to ensure the
contracts conform to all Sprague requirements.

Primary responsibilities include:

 

  A. Ensuring implementation of the contractual terms and conditions developed
and negotiated by the Commercial and Legal departments (and consistent with
guidelines provided by the Credit Department) for the above-listed contracts and
ensuring the agreements are implemented in the final executed contracts;

 

  B. Confirming in writing all term transactions with assistance from Front
Office Traders and Marketers;

 

  C. Collecting and monitoring third-party trade confirmations, securing
assistance from the Front Office where necessary to obtain missing information;

 

  D. Coordinating communications and information flow between Sprague traders,
marketers, credit, accounting, billing and legal groups and from counterparties;

 

  E. Obtaining and maintaining signed copies of daily transactions from Supply
personnel confirming that all activity is complete and accurate;

 

  F. Initiating and monitoring the development, negotiations, review and
execution of agreements and contracts;

 

  G. Ensuring that new and existing counterparties have the proper documentation
in place;

 

  H. Developing and maintaining effective Contract Administration and
Confirmations practices;

 

  I. Maintaining copies of contracts and confirmations in accordance with the
document retention policy.

 

  J. Developing procedures for routing and approving counterparties’ contracts
and making changes to the company’s standard contracts; and

 

  K. Maintaining various data fields in the Company’s Risk Management and
Trading systems.

 

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  2.9 Supply / Trading and Marketing

 

  2.9.1 Front Office

Supply / Trading and Marketing (the “Front Office”) executes the Company’s risk
taking and risk mitigation strategies. The Front Office’s functions include deal
execution, buying and selling, and hedging of physical commodities or financial
instruments. The Front Office is responsible for the initial capturing and
logging of a transaction’s specific terms and conditions, as well as the support
role of scheduling. The duties and responsibilities of the Front Office are
described below under Trading and Marketing Officers, Pricing, Trading Leaders,
Traders, Marketing Leaders and Marketers. Note that the focus of these lists is
responsibilities with respect to risk management.

 

  2.9.2 Trading and Marketing Officers

The VP Oil Trading, Pricing and Customer Service, VP Natural Gas and VP Sales
(“Trading and Marketing Officers”) are responsible for overseeing and directing
Front Office line managers to ensure that day-to-day operations are in
compliance with the Company’s Risk Management and Control Documents. The VP
Trading, Pricing and Customer Service, VP Natural Gas and VP Sales report to the
Company President and CEO.

Responsibilities include the following:

 

  A. Ensuring that overall marketing, hedging and trading strategies are
consistent with the Company’s risk tolerance, profitability targets, limit
structure, and control policies;

 

  B. Managing and guiding Front Office line management to ensure that commodity
supply commitments and requirements are achieved;

 

  C. Ensuring that unwanted market risk is hedged in accordance with the
allocation of risk to the business;

 

  D. Reviewing the effectiveness of hedges on a regular basis;

 

  E. Directing the overall operations of various segments of the Front Office to
achieve defined objectives;

 

  F. Describing short and long-term market views, business strategies, and
corresponding risks to the Board of Directors and the RMC;

 

  G. Developing and communicating proposed aggregate risk limits and transacting
scope to the RMC for approval;

 

  H. Monitoring market conditions and proactively managing positions in the
context of market volatility; and

 

  I. Maintaining adequate depth and competency of personnel assigned to
operating groups.

2.9.3 Pricing

The Front Office pricing desks (oil marketing and natural gas marketing) are
responsible for creating a structure for origination deals that optimizes
risk-reward profile in accordance with corporate guidelines. This is
accomplished by characterizing risks (credit risk, price risk, volumetric risk,
etc.) and appropriately pricing transactions to the Company’s customers.

 

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Responsibilities of the Front Office pricing desks include:

 

  A. Ensuring the integrity of transaction pricing, contract structuring and
transaction confirmations;

 

  B. Capturing all transactions in the Company’s trade capture and risk
management systems in a timely manner; and

 

  C. Communicating openly with Traders, Middle Office and Credit to facilitate
exchange of critical information regarding markets or customers in a timely
fashion.

 

  2.9.4 Trading Leaders

Responsibilities of the V.P. Oil Trading, Pricing and Customer Service, VP Oil
Supply and V.P. Natural Gas include:

 

  A. Overseeing all trading activities in their respective departments;

 

  B. Ensuring that transactions are executed in accordance with approved
procedures;

 

  C. Ensuring the integrity of transaction pricing, contract structuring and
transaction confirmations;

 

  D. Capturing all transactions in the Company’s trade capture and risk
management systems in a timely manner;

 

  E. Implementing risk management strategies consistent with the Company’s
overall hedging policy and approved risk limits;

 

  F. Developing and implementing same-commodity and cross-commodity hedges and
trades to maximize profit potential within such approved limits;

 

  G. Ensuring traders verify and sign off on position and other appropriate risk
management reports;

 

  H. Ensuring traders remain within their limits; and

 

  I. Informing the CRO of any suspected violations.

2.9.5 Traders

Responsibilities of Traders include:

 

  A. Signing off on End of Day reports on a daily basis as required;

 

  B. Inputting all executed transactions in the Company’s Trading and Risk
Management System(s) on the calendar day of execution unless it is an approved
exception which can apply to non-discretionary trading activity only;

 

  C. Following up with floor brokers as necessary to address any outstanding
issues;

 

  D. Resolving transaction discrepancy notices received from the Middle Office
or Contract Administration by the end of the following business day;

 

  E. Adhering to all specified limits, e.g., individual transaction authority,
open position, VaR, Stop Loss, Credit;

 

  F. Transacting only with approved brokers and counterparties (approved credit
and contracts);

 

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  G. Checking with Contract Administration to ensure that proper documentation
is in place prior to trading; and securing approval from the Manager of Contract
Administration when documentation is not in place;

 

  H. Checking the Approved Product List and Authorized Instruments List prior to
trading to ensure that contemplated transaction falls within product or risk
type approved by the RMC;

 

  I. Ensuring the counterparty, broker (where applicable) and transaction type
have been approved for the respective counterparty;

 

  J. Conducting all trade execution and trade processing on Company premises
utilizing the standard transaction execution script unless the activity is part
of normal business practices or they are given explicit authority by their
Trading Leader to do otherwise; and

 

  K. Informing the CRO and the appropriate Trading Leader and Trading and
Marketing Officer of any known or suspected violation of this Risk Management
Policy.

2.9.6 Market Leaders

Responsibilities of the VP of Sales and Market Leaders include:

 

  A. Overseeing all marketing activities to ensure transactions are executed in
accordance with the Company’s Risk Management and Control Documents;.

 

  B. Establishing and optimizing a profitable portfolio of rack and contract
business utilizing approved commodities, products and locations;

 

  C. Avoiding any participation in outright or discretionary trading;

 

  D. Pursuing strategies with the objective of optimizing risk to reward for all
business activities;

 

  E. Providing sufficient advance notice of anticipated new customers, delivery
locations, products or instruments to Supply / Trading and Marketing Officers,
Chief Risk Officer and Middle Office;

 

  F. Ensuring that all marketing transactions are appropriately priced and
documented in accordance with the Company’s Contract Administration and
Confirmations practices; and

 

  G. Informing the CRO of any suspected violations.

2.9.7 Marketers

Responsibilities of Marketers include:

 

  A. Ensuring that all transactions are appropriately priced, taking into
account the best information available with respect to all material risk factors
including credit and volumetric risks. The Company recognizes that in
establishing this pricing the trade-off of prices and material risks may often
be based significantly on qualitative assessments;

 

  B. Ensuring that all transactions are appropriately documented in writing in
accordance with the Company’s Risk Management and Control Documents, including
the Contract Administration and Confirmations processes;

 

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  C. Ensuring that all transactions are executed only with pre-approved
counterparties, for pre-approved products and at pre-approved locations; and

 

  D. Informing the CRO and the appropriate Market Leader and Trading and
Marketing Officer of any known or suspected violation of this Risk Management
Policy.

 

  2.10 Support Functions

2.10.1 Back Office

The functions of the Back Office include performing processes in support of the
Front Office such as accounting, invoicing, dispute resolution, broker
reconciliation, accounts receivable and payable, tax reporting and management
reporting. The duties and responsibilities of the Back Office are described in
the support functions listed below.

2.10.2 Operations Accounting

The Operations Accounting group is responsible for management reporting,
transaction processing, billing, and invoice processing. To ensure proper
segregation of duties all cash settlements are processed by the Treasury
Department. Moreover, Operations Accounting does not control the recording in or
reconciliation of the general ledger, but provides assistance in a transparent
manner to the Financial Accounting Department which determines the appropriate
financial accounting treatment and disclosure for Supply / Trading and Marketing
transactions and related exposures. The responsibilities of Operations
Accounting encompass comprehensive support of Front Office transactional
activities other than position valuation, which is performed by the Middle
Office group as discussed earlier in Section 2.7. Specific responsibilities
include:

 

  A. Facilitating the Financial Accounting Department’s understanding of Middle
Office valuation and related reserves in a transparent manner;

 

  B. Reconciliation of broker statements with trade information captured in
Sprague’s systems including to support of month-end reporting requirements;

 

  C. Completing any hedge accounting requirements if applicable;

 

  D. Providing management report(s) of monthly P&L and supporting Financial
Planning and Analysis (FP&A) and Operating Groups as necessary to develop
narrative explanations of significant changes in volumes, margins and
mark-to-market amounts;

 

  E. Reviewing Risk Management & Trading System prior to billing and informing
the Middle Office of discrepancies; and

 

  F. Producing and processing invoices based upon Supply / Trading and Marketing
activity and reporting such activity to the Treasury Department for cash
collection/distribution.

2.10.3 Information Technology

Responsibilities of (“IT”) include:

 

  A. Providing business analysis of Front/Middle/Back Office system needs,
ensuring balance with the varied interests throughout the corporation;

 

  B. Developing business process flow, ensuring efficient, timely, and accurate
information to all applicable corporate business units;

 

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  C. Developing design requirements for Information Services (“IS”) software
development;

 

  D. Approving any software that interfaces or will interface with the Company’s
Risk Management and Trading Systems to ensure integration and enable successful
support of Supply / Trading and Marketing activities;

 

  E. Managing various system interfaces, providing focused direction of current
support and future needs, recognizing that the business continuity needs will
require adequate capital support;

 

  F. Ensuring all control features established in Risk Management and Trading
Systems are fully functional at all times and notifying the Chief Risk Officer
and appropriate Supply / Trading and Marketing Officer and Trading Leader when
any control feature is not fully functional;

 

  G. Supporting all IT applications regardless of whether they were involved in
the development or not; and

 

  H. Providing the RMC with updated timetables detailing system improvements
that are in development and expected completion dates for each item.

IT provides critical support to the Supply / Trading and Marketing and Risk
Management functions by providing:

 

  A. Voice and data networks;

 

  B. Data management;

 

  C. Software architecture development and support;

 

  D. Physical and logical security of networks, data and applications; and

 

  E. Business continuity:

 

  a) Change control;

 

  b) Redundancies; and

 

  c) Disaster recovery.

2.10.4 Legal

The Legal Department is responsible for oversight and direction of all legal
matters that impact the Company as well as providing advice to Senior
Management, business units and supporting departments regarding mergers,
acquisitions, divestitures, human resource matters, benefit issues, insurance,
contracts, litigation, regulatory compliance, legislative initiatives, new
business products and markets. The General Counsel is responsible for oversight
and direction of the Health, Safety and Environmental Department and developing
appropriate compliance training for the Company at all levels.

Primary responsibilities include:

 

  A. Ensuring the Company is in compliance with all laws and regulations in the
jurisdictions in which the Company operates;

 

  B. Ensuring the Company maintains adequate policies and procedures and
training programs to comply with relevant laws and regulations pertaining to the
Company’s Supply / Trading and Marketing businesses and it Operating, Financial
and Human Resource units;

 

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  C. Developing and overseeing the Company’s Document Retention Policy as it
relates to the Company’s Supply / Trading and Marketing businesses and other
departments;

 

  D. Participating in the preparation and review of regulatory filings to ensure
compliance with reporting requirements;

 

  E. Administering licensing programs, file renewals and new license
applications with the appropriate federal, state or local agencies or private
entities, e.g., marketing licenses;

 

  F. Drafting, negotiating and reviewing all trade agreements and contracts and
ensuring compliance with all laws, regulations, Sprague Policies and changes in
market practices;

 

  G. Advising the Contract Administration and Credit departments on applicable
bankruptcy or insolvency laws;

 

  H. Advising the Contract Administration and Credit departments regarding the
procedures necessary to ensure enforceable transactions and adequate
documentation;

 

  I. Developing and administering Confidentiality Agreements; and

 

  J. Advising Commercial groups and Sprague Management on key contractual
exposures.

2.10.5 Tax

Responsibilities and duties include:

 

  A. Determining the effect of changes in tax laws as it relates to the
Company’s Trading and Marketing businesses;

 

  B. Developing hedge identification procedures that meet tax documentation
requirements as needed;

 

  C. Determining the tax effect of transactions; and

 

  D. Determining the most efficient tax structure for transactions.

2.10.6 Internal Audit

Responsibilities and duties include:

 

  A. Working with management to understand and enhance as necessary key internal
controls;

 

  B. Coordinate efforts with external auditors, especially in relation to
compliance with requirements associated with Sarbanes-Oxley Act; and

 

  C. Lead efforts to complete independent internal financial and business
process audits.

 

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3. COMPLIANCE AND ENFORCEMENT

All corporate officers, members of the Supply and Trading groups, marketers
involved with futures / forward transactions, Middle Office staff and managerial
personnel in Back Office functions involved with risk management activities are
required to sign the Risk Management Policy. Signing the Employee Confirmation
form for this Risk Management Policy confirms that the employee has read and
understands the risk controls and standards as they relate to Sprague’s Supply /
Trading and Marketing business. Signing of new Employee Confirmations will be
required whenever a significant update of the Risk Management Policy is
completed. The CRO will work with the various applicable managers to ensure that
all pertinent staff members meet this requirement.

Compliance with these standards is an employment requirement and will be
considered in each individual’s overall performance evaluation. This includes
the execution of day-to-day responsibilities by all personnel discussed as
having energy risk management duties, as well as compliance with the Risk
Management and Control Documents in their entirety. Any incidence of
non-compliance with this Policy may be considered a violation, and subject to
possible sanctions as outlined in Section 3.2.

 

  3.1 Reporting Incidents of Non-Compliance

All incidents of non-compliance and misconduct are to be reported to the Chief
Risk Officer as soon as practicable after the incidence of non-compliance is
detected. Failure on the part of a leader to report an incidence of
non-compliance by a direct report will itself be considered a violation. Such
reports must document the reason why non-compliance occurred.

All violations will be reported to the Sprague President, COO / CFO, General
Counsel and Senior Commercial Manager. In addition, they will be reported to the
RMC. Those violations considered fraudulent, conscious, willful and/or
intentional violation of Company Policy or Procedures are considered severe and
must be communicated to the RMC immediately. Note that notification of the
President, COO / CFO and General Counsel meets this RMC notification
requirement. Examples of such violations are described in Section 3.2.2 below.

To the extent that the Chief Risk Officer does not feel that appropriate actions
have been taken to correct violations, the Chief Risk Officer is obligated to
communicate these concerns to the RMC. If the condition persists, the Chief Risk
Officer should concurrently notify the Sprague President and the Board of
Directors.

In the case of a credit risk limit violation, please refer to the Sprague’s
Credit Management Policy Manual and related documentation.

 

  3.2 Sanctions

Any violation of this Policy may result in an employees’ termination. Nothing
contained in these Guidelines alters the At-Will employment relationship between
an employee and the Company. The Management of Sprague may impose whatever
sanction it deems necessary for a violation of this Policy up to and including
termination. Lesser sanctions, such as those discussed in this section, are also
available to management for use at Sprague Management’s discretion.

In cases where non-compliance with this Policy is reported, the RMC may use an
independent party to determine whether the breakdown in compliance occurred, and
collect any evidence as to who was aware of the non-compliance. A meeting would
then be held with the employee’s supervisor prior to discussing the issue with
RMC.

 

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The Supply / Trading and Marketing Officers and Chief Risk Officer
(“Management”) are responsible for imposing sanctions on their respective
personnel for instances of non-compliance, considering recommendations by Human
Resources and the Legal Department. The Chief Risk Officer will inform the
Sprague President, COO / CFO, and General Counsel of all instances of
non-compliance and the planned sanctions. If there is a disagreement with the
planned sanctions, the Chief Risk Officer will coordinate a discussion leading
to agreement on the sanctions to be put in place. The outcome of the transaction
or situation is not relevant to the determination of sanctions or disciplines.
Following are examples of sanctions that could be used.

 

  3.2.1 Examples of Sanctions

Examples of possible sanctions include, but are not limited to the following:

 

  A. Verbal counseling to employee by supervisory personnel. A record of such
counseling will be maintained in the employee’s personnel file and consideration
given during annual performance evaluation process;

 

  B. Written warning and verbal counseling to the employee by supervisory
personnel. A record will be maintained in the employee’s personnel file and
consideration given during the annual performance evaluation process;

 

  C. Suspension from active trading for up to thirty (30) business days,
including pay adjustments if deemed appropriate;

 

  D. Pre-approval of all transacting activity prior to execution by designated
supervisory personnel;

 

  E. Suspension from participation in the bonus structure, incentive
compensation plan, etc.; and

 

  F. Termination.

 

  3.2.2 Fraud or Willful Acts of Misrepresentation

Certain severe violations are explicitly classified as such and must be reported
to the RMC immediately. Employees should be made aware that violations of this
magnitude would, subject only to the RMC’s discretion, result in immediate
termination. Examples include but are not limited to the following:

 

  A. Violating a Confidentiality Agreement willfully;

 

  B. Transacting in physical or financial transactions for the employee’s own
(or friends / family member’s) account or providing information to others for
transacting on the employee’s behalf. Note that this restriction is applicable
only to Sprague’s approved products, i.e. non-approved products and/or other
trading instruments are not part of this restriction;

 

  C. Engaging in transactions knowingly that are in violation of Federal or
State regulations (including but not limited to the Securities and Exchange
Commission, Commodity Futures Trading Commission and Federal Energy Regulatory
Commission);

 

  D. Falsifying transactions/positions or concealing losses deliberately; and

 

  E. Violating a position limit deliberately.

 

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Sprague may pursue legal action against those employees who conduct an illegal
or criminal act(s) while employed by Sprague which, directly or indirectly,
affects the Company and / or its reputation.

Notwithstanding these guidelines, management retains all rights as an At-Will
employer to terminate employment with or without cause.

 

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4. VALUATION, RISK MEASUREMENT AND CONTROL

 

  4.1 Valuation Frequency

The Middle Office performs daily valuation of the Company’s Supply portfolios by
marking-to-market each transaction. The valuation of those transactions that are
difficult to value or are valued outside of the Risk Management and Trading
Systems may be estimated for daily purposes. Such transactions must be valued at
least weekly. A list of all transactions that reside outside of the Risk
Management and Trading Systems will be distributed by the Middle Office Manager
on a monthly basis to the Chief Risk Officer, Supply / Trading and Marketing
Officers, Trading Leaders and Chief Financial Officer / Chief Operating Officer.
An example of a transaction that would fit into this category is a financial
derivative whose price is not readily available from standard publications or
other industry sources. A digital (a.k.a. binary) option with no published
pricing would be a specific example.

 

  4.2 Valuation Data Sources

Data used for mark-to-market calculations must be accurate and consistent. All
price and volatility information should be taken at approximately the same time
of day (e.g., close of day), preferably from a public data source. If such
information must be provided by the Front Office, it will be periodically
audited or checked by the Middle Office against the most readily available
reasonable proxy.

 

  4.3 Valuation Reserves

Market valuation reserves represent adjustments to estimates of value in order
to arrive at an amount that reflects fair market value. Reserves may be required
for positions in illiquid markets or for cases where subjective estimates are
required. In such cases an appropriate valuation reserve will be made
considering bid/ask spreads in nearby markets, the number of players in a given
market, etc. Valuation reserves may also be required for complex transactions to
consider fully the future costs required in fulfilling the obligations of the
transaction.

A form of valuation reserve is the Credit Reserve which is intended to provide a
cushion to protect against losses that may be incurred from the insolvency or
default of a trading counterparty. Refer to Sprague’s Credit Policy and related
documentation for more information.

The establishment of valuation reserves will be determined by the Chief Risk
Officer in conjunction with the Chief Operating Officer / Chief Financial
Officer.

 

  4.4 Portfolio Definitions

All transactions will be assigned to one of eight portfolios:

1) Natural Gas

a) Supply / Trading

 

  i) System Supply

 

  ii) System Optimization

 

  iii) Discretionary

b) Marketing

 

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2) Refined Products a)

Supply / Trading

 

  i) System Supply

 

  ii) System Optimization

 

  iii) Discretionary

 

  b) Marketing

 

  A. System Supply Portfolios: System supply transactions arise from Sprague’s
management of the volume and underlying price risk associated with its inventory
and/or marketing obligations. Included in this category are: Inventory;
Throughputs; Exchanges; 3rd Party Storage; Purchases, Sales; Buy/Sell
Transactions; Transportation Agreements and In-house transactions to balance the
Marketing Portfolios. Also included in the system supply portfolio are the
related financial hedges and forward spread transactions that are used to
“pre-roll” inventory or as precursors to subsequent “summerfill” transactions.

  B. System Optimization Portfolios: The system optimization portfolios include
a range of financial and physical transactions that are used to fine tune system
operations and performance. Included in this category can be financial
transaction types such as futures, swaps and options or physical activity such
as volumes transported by pipeline from the U.S. Gulf Coast. These transactions
can be done on either a stand-alone basis or in combinations such as spreads
that result in a net balanced volume position. An example would be a Gulf Coast
swap transaction put in place with the opportunity to lower the cost on an
expected future product delivery requirement. Currently, the System Optimization
Portfolio is only relevant for oil transactions, though if the natural gas
system (e.g. inventory) grows substantially in the future, there may be a
justification to isolate the system supply and optimization portfolio in natural
gas also.

  C. Discretionary Portfolios: Transactions and positions taken in anticipation
of profiting from a market view. In general, this is a limited activity at
Sprague with no discretionary trading currently undertaken in support of the
natural gas business and modest discretionary activity for oil. As discussed
above, there are various transactions undertaken to procure and optimize oil
supplies. There will remain some modest volume imbalances, however, since the
daily hedges are based on projected sales. In addition to these modest
imbalances, there may be some other positions taken within the specified
position limits that are not intended as part of a system or hedging
requirement. These discretionary positions can be characterized in two high
level categories:

 

  •   Outright positions, i.e. net positions that result in an unbalanced
position. Although Sprague tracks the outright positions on a daily basis, it
handles long and short positions differently when identifying discretionary
outright positions.

 

  •   Sprague has ongoing sales requirements as part of its sales activities. As
long as the outright long position remains within the risk limits (maximum of
500 KB or 500 NYMEX contract equivalents for oil and 250 NYMEX contract
equivalents for natural gas), this position is not considered discretionary, as
expected sales requirements can readily consume this volume in a relatively
short time period. Consistent with our understanding of tax regulations, these
outright long positions are considered part of Sprague’s system / system
optimization requirements.

 

  •   In contrast, outright short positions can be discretionary. If Sprague is
going to take a short discretionary position, the transaction(s) are identified
as discretionary on the day the positions are taken. The profitability
associated with these positions will be tracked separately as discretionary
until the positions are closed out.

 

  •   In addition to the discretionary short position trades undertaken as a
specific strategy, there can be modest short volume imbalances due primarily to
the projected daily sales not meeting actual customer volume requirements. These
resultant positions will not be part of the discretionary portfolio, as any
discretionary trades will be

 

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identified as such on the day the transactions are undertaken. For oil,
Sprague’s approach to assess any short imbalances is to separate the refined
products outright positions into three categories, i.e. distillates, gasolines,
and heavy oils (primarily residual fuels). For each of these three groups, an
allowable operating tolerance of 100,000 barrels is allowed. If this operating
tolerance is exceeded on any day (again noting that each product group is
treated separately), then Sprague will take all reasonable commercial steps to
promptly balance the position within the tolerance levels, with an expectation
that this balancing will generally occur by the close of the next business day.
However, if it isn’t practical to balance the positions during the next business
day due to market conditions or other factors, up to three business days is
allowed to get the short positions within the defined operating tolerances. All
positions that are part of this operating tolerance will remain part of the
system / system optimization portfolios as originally classified.

 

  •   Other discretionary oil positions are ones that are not associated with
either the system supply or system optimization portfolios. As an example, a
crack spread (net balanced position between crude oil and refined products such
as RBOB and / or heating oil) would generally not be part of a system
requirement and would be considered discretionary. Again, these positions will
be specifically identified as a discretionary position on the day the trade is
undertaken.

 

•   As indicated, there are no new discretionary natural gas positions now being
taken, with the exception of ones associated with a small legacy leased storage
position in the U.S. Gulf Coast. Since there are no new discretionary positions,
the full natural gas Supply / Trading portfolio is used when comparing positions
with the specified limits. Although no discretionary natural gas positions are
taken the positions are still tracked on a daily basis. If an outright short
position inadvertently exceeds 100 NYMEX contract equivalents on any day, the
same general approach as used for oil will be used to balance the position
within the operating tolerance. Again, the expectation is that the position will
be brought within the 100 contract tolerance by the close of the next business
day, with a maximum of three business days allowed to meet this requirement.

 

  D. Marketing Portfolios: The marketing portfolio houses all transactions
associated with the Company’s marketing directly to its customers. Transactions
in this portfolio include both the direct obligation to the customer as well as
the hedging transactions (in-house transactions between Supply and Marketing) to
maintain a balanced portfolio. The residual volume and price exposure of the
marketing portfolio will be a reflection of any mismatch of the customized
wholesale products, which the marketing customers require, and the standardized
products available in the wholesale market for hedging. These positions will be
minimal and only tracked for internal purposes, as the reported results are
consolidated at the Refined Products and Natural Gas levels.

 

  4.5 Market Risk Limits

The market risk measurement methodologies described in this section are the
agreed methods for measuring and assessing market risk by the RMC. Such
methodologies will be used to ensure that all significant sources of market risk
are identified, quantified and reported. Furthermore, the Company has
established a risk limit system consistent with the Company’s risk management
philosophy as defined in section 1.2.

The aggregate limit for the amount of risk to be incurred by Sprague Resources,
and the broad structure of the limits is approved by the Board of Directors. The
allocation of the aggregate limit to the business units and the structure of
more specific limits are approved by the RMC. The Supply / Trading and Marketing
Officers determine the further allocation of risk limits across trading and
marketing books.

If any of the aggregate limits of the Senior Commercial / Trading Managers are
exceeded without obtaining a waiver prior to the breach, a violation occurs and
the Chief Risk Officer or designee will notify the

 

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President and COO / CFO. Based on this discussion, the Chief Risk Officer will
determine whether to convene a special meeting of the total RMC or a subset of
this group to discuss a course of action with the appropriate senior commercial
/ trading manager(s). Depending on the results of this discussion, a
determination will be made regarding any specific steps to cure the violation,
either by getting the position within the approved limits (typically within the
next day) or by obtaining a waiver from the President/CEO up to his control
limit. As long as the aggregate level remains under the Sprague President’s
limit, there is no requirement that specific actions be taken to adjust the
position, though a waiver must always be granted until the position is brought
within limits. System Supply and System Optimization activities (refer to
Portfolio Definitions above) that are considered necessary to mitigate risk
and/or meet obligations can also continue without restriction. If the losses
exceed the President’s limit, the Board of Directors must also be notified.
Depending on the Board of Directors response, actions may or may not be
required. Any violation beyond the President/CEO’s limit must be cured by the
next day unless authorization is provided by the AJI Board of Directors’
President or designee.

The following table summarizes the limit authorizations that are required and
reporting frequency/responsibility:

 

Limit Structure

  

Approved By

  

Reporting
Responsibility

  

Reporting
Frequency

Position Limits    Board of Directors    Middle Office    Daily Stop Loss Limit
*    Board of Directors    Middle Office    Daily Value-at-Risk*    Board of
Directors    Middle Office    Daily Specific Portfolio Limits    RMC    Middle
Office    Daily Credit Limits    Board of Directors    Director of Credit   
Daily

 

  * Discretionary and system optimization trading only

 

  4.6 Position Limits

The oil position limits are divided into outright positions, as well as a range
of spread and individual position limits. The outright position limits refers to
the net risk position, i.e. includes all physical and financial (e.g. futures
and swaps) positions. Examples of outright oil positions would include the
following:

 

  •   Exchange transactions, such as Heating Oil, Gasoil, RBOB, Natural Gas, and
WTI;

 

  •   Over-the-Counter (OTC) swaps positions; and

 

  •   Cash (physical) positions.

The outright positions for both oil and natural gas are measured on a daily
basis, with the limits in place applying to the total portfolio, i.e. the
combination of system supply, system optimization and discretionary positions.
All of the other position limits in place apply to the combination of the system
optimization and discretionary portfolios.

As per of the determination of the positions, Sprague defines “standard” hedging
products. In general, basis refers to the price differential between the cash or
spot price of a commodity and the price of the nearest month futures or swaps
contract. Basis may reflect different time periods, qualities or locations.
Consistent with common market practice, for the oil business Sprague uses basis
to refer to quality differences. As indicated below, Sprague treats location
spreads for oil separate from basis (quality). Note that for the natural gas
business, basis typically refers to location, since quality differences are
generally not pertinent.

 

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Similar to the oil location spreads, Sprague treats system positions with
potential basis exposure differently than discretionary positions. Sprague
generally runs a balanced book with the system positions largely hedged with
what is considered to be the most appropriate trading instrument. The current
“base” hedging instruments are as indicated below, recognizing that they may
change in the future depending on product availability and considerations such
as liquidity.

 

Oil Product Group      Base Hedging Instrument Gasolines      NYMEX RBOB futures
contract* Ethanol      NYMEX RBOB future contract or CBOT ethanol futures
contract* Distillates      NYMEX Heating Oil (HO) futures contract* Fuel Oils
     NYH 1% Sulfur Residual Fuel Oil Swaps

 

  * Could also use comparable swaps contracts

There is no basis spread recorded for any system position hedged with the base
hedging instrument. For fuel oil there can also periodically be a strong
rationale to use an alternative instrument such as Gulf Coast 3% sulfur fuel oil
swaps or crude oil (either WTI or Brent futures or swaps) as a hedge. These
instruments could be preferred due to considerations such as liquidity or
quality differences. If these alternative instruments are used as a hedge then a
cross commodity as well as a location spread (if applicable) is recorded for the
position Note, however, that up to 500,000 barrels of residual fuel oil can be
hedged with crude oil without counting against the approved cross commodity and
location spread limits. Any positions beyond this 500,000 barrel limit would
count against the pertinent position limits.

Spreads are defined as offsetting positions which net to a balanced overall
position. Although the positions offset, there can still be substantial
exposure. As indicated, the oil spread position limits apply to the system
optimization and discretionary trading portfolios, i.e. any activities
associated with the system supply portfolio are not subject to these additional
spread limits. The most notable system supply example for Sprague is the use of
forward (a.k.a. deferred) spreads when the heating oil market is in a contango
or carry structure. These spreads are completed in anticipation of a subsequent
filling of a corresponding volume of oil inventory in the tanks, frequently
called summerfill. When the oil is purchased to put in the tanks, the long
position of the spread can be closed out, with the remaining short position
acting as the hedge on the physical inventory. Another example of a system
transaction is a “pre-roll” of the distillate inventory hedge. As indicated
earlier, Sprague operates with a substantially balanced book, with the inventory
hedged within limited tolerances. For light oil products, the base assumption is
that inventory is hedged with the prompt month NYMEX position of the most
appropriate oil commodity (see table above). As an example, during the month of
December, the base distillate inventory hedge would be a corresponding volume of
January NYMEX heating oil contracts. Since these January NYMEX contracts would
expire at the end of December, it is necessary to exit the positions prior to
month-end. The exit from these contracts is generally accomplished by either
closing the position if the hedge volume is no longer needed or “rolling” it to
the next month, e.g. in this case purchasing the short January contract(s) and
selling a corresponding volume of February contract(s). This process whereby the
prompt month hedges are “rolled” to the next month prior to expiration is
considered part of the requisite system activity and the positions are included
in the System Supply portfolio.

There can also be strong incentive to “pre-roll” an inventory hedge beyond the
next month. For example, if the inter-month price spreads appear attractive, a
pre-roll can either lock in a gain (when in contango) or limit a loss (when in
backwardation) to what is considered an acceptable level. Sprague can pursue
this strategy depending on the current and expected market conditions. Since
these pre-rolls are pursued in

 

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support of the system requirements, they are also included in the System Supply
positions. The position limits recognize this pre-roll option up to a maximum of
three million barrels (President’s limit) and up to two additional months
forward beyond the prompt month roll. Based on the example cited in the
paragraph above, the January inventory hedge could be pre-rolled up to April and
be considered a system supply pre-roll rather than a system optimization
position. Any pre-roll beyond this time frame is considered part of the System
Optimization portfolio and subject to the additional position limits imposed on
the combination Discretionary plus System Optimization positions.

Note that the pre-rolls are in concept quite similar to the forward spreads
discussed above. A key difference is that the pre-rolls refer to positions where
the “long” side of the spread is a cash position rather than a forward month
paper position.

The oil spread limits on the combination Discretionary plus System Optimization
positions are divided into four categories, again with potential positions on
the exchanges, OTC, or cash markets:

 

  •   Time spreads, i.e. based on the same commodity in different time periods;

 

  •   Location or geographical spreads, based on the same or similar (e.g.
heating oil and gasoil are considered similar) commodity in different locations;

 

  •   Basis spreads, based on a spread between the same or similar physical
commodity and futures or swaps contract; and

 

  •   Cross Commodity spreads, based on different commodities, e.g. heating oil
/ crude oil positions or a heating oil / natural gas spread. Note that if
residual fuel oil is hedged with crude oil (WTI or Brent), no cross commodity
spread is calculated as these instruments can be the preferred hedge instrument
due to liquidity or other considerations.

Option trading is approved for exchange (NYMEX or ICE) and OTC options for Oil
Supply / Trading. Natural Gas Supply / Trading has natural gas options trading
approval, though only for system transactions.

The Oil group is authorized to trade natural gas cross commodity spreads, though
only as part of a hedge. As an example, a residual fuel oil / natural gas spread
trade could be used to “lock in” the economics of a capital project designed to
convert fuel usage from residual fuel to natural gas. This type of transaction
would be measured as part of the system trading portfolio, though would need to
be specifically documented as such.

In addition to the total oil spread limits, Sprague recognizes individual spread
position limits on the System Optimization plus Discretionary positions. These
limits are put in place to help recognize that concentration in individual
spread positions can carry additional risk compared to a more diversified
portfolio.

Similar to many other companies, Sprague aggregates all forward natural gas
market risk into high level components for position management and hedging
purposes. This approach groups positions with similar risk profiles to establish
market exposure. The position limits are based on this breakdown:

 

  •   Fixed Position: All forward positions containing risk that is impacted by
the settlement of the NYMEX Natural Gas contract. This risk can be offset using
NYMEX Natural Gas futures or OTC look-alike instruments;

 

  •   Basis Positions: Forward positions that contain risk impacted by the
location differential between a published index point and the NYMEX natural gas
futures settlement; and

 

  •   Index Positions: Forward physical positions and swaps that are priced
relative to a published index, e.g. Platts IFERC.

The Company utilizes VaR limits (see section 4.8), but not as the sole measure
and control of market risk. In both oil and natural gas, the VaR limits are
based on the system optimization plus discretionary positions only (i.e. system
supply excluded). Note that the oil book can have a large system position due to
the substantial physical infrastructure. The VaR associated with the oil system
may not be routinely calculated, though the overall market risks are primarily
monitored through the use of items such as the outright and

 

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basis positions, inventory levels, forward sales commitments and the product mix
distribution. VaR limits are supplemented with additional risk measures and
position limits with respect to particular strategies and commodities. These can
include duration (tenor) limits, and limits related to specific stress tests.
The structure of specific market risk limits for oil and natural gas is
presented in EXHIBIT 3. In addition, the Company monitors the trends in the VaR
values to help assess any major changes in the level of market risk in place.
The Middle Office can propose additional or alternative limits as appropriate.
Any changes which potentially increase the level of overall risk will require
approval by the Board of Directors.

 

  4.7 Stop Loss Limits

For the Oil Supply / Trading business areas, an aggregate threshold is set on
cumulative margin losses for the combination of System Optimization and
Discretionary positions on a monthly basis. The System Supply activities that
directly support the oil system (primarily Sprague-owned terminals) requirements
are not subject to a daily VaR limit. In contrast, the complete Natural Gas
Supply / Trading positions are part of the daily VaR calculation, as they
essentially represent the existing imbalances that exist within the daily
position balancing activities, since there are no specific discretionary
positions taken. For the purposes of the above thresholds, losses (or reserves)
due to a counterparty’s failure to perform will be excluded. Both realized
losses and unrealized (“mark to market”) losses in the Supply / Trading
portfolios will be taken into account when computing the cumulative loss.

For purposes of the threshold, the losses will begin to accumulate on the first
day of a calendar month. A net loss from the prior calendar month will be
carried forward and added to the current month’s losses. However, gains in the
prior calendar month will not carry forward to the current month for stop loss
purposes. After a month occurs with a positive margin, all carryforward losses
from prior months for this calculation will be reset to zero. In addition, the
carryforward losses from prior months are reset to zero following any month when
a Stop Loss limit is breached (i.e. a MAT occurs).

In an instance when the aggregate Stop Loss limit exceeds the President’s
authority level, the Chief Risk Officer will also notify the AJI President on
the background of the losses and any remedial actions.

 

  4.8 Value at Risk Limits

In the Oil Supply area, Sprague currently applies a $1.5 million daily
“Value-at-Risk” (VaR) metric to the combination of the System Optimization and
Discretionary portfolios. This limit is based on a 95% confidence interval and a
one-day holding period to calculate daily VaR. The Natural Gas Supply group uses
a $0.75 million daily VaR for its daily Natural Gas Supply/ Trading positions,
again based on a 95% confidence interval and a one-day holding period. The
System Supply activities that support the Oil business (primarily Sprague-owned
terminals) requirements are not subject to a daily VaR limit. In contrast, the
complete Natural Gas Supply / Trading positions are part of the daily VaR
calculation, as they simply represent the existing imbalances that exist within
the daily position balancing activities, since there are no discretionary
positions taken. If there are any instances where the daily VaR calculation is
unavailable, the Middle Office will rely on the previous calculation and also
consider the approximate impact of any major position or market price changes
when assessing VaR compared to the approved limit.

 

  4.9 Credit Limits

Credit limits are established and approved as per the standard Sprague Credit
Management Policy and processes.

 

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  5. CREDIT RISK

In order to protect the capital allocated to its transacting activities, Sprague
Energy Corp. has developed guidelines for measuring, monitoring and managing the
inherent credit risks across the various activities of its Supply / Trading and
Marketing. Refer to the Sprague Credit Policy Manual and related documentation
for information pertaining to Credit Risk Management.

 

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6. CONTROL PROCESSES

 

  6.1 Management Reporting

The Board of Directors may request periodic reports prepared by the Chief Risk
Officer which indicate the levels of risk being undertaken by the Company, the
degree of compliance with policies, procedures and limits, and the financial
performance of the various physical and financial transacting activities.

In addition, internal or external audit reports covering the Supply / Trading
and Marketing and/or Risk Management functions may be reviewed by the Audit
Committee of the Board of Directors and, based upon their review significant
issues of concern should be drawn to the attention of the Board of Directors.

EXHIBIT 6 summarizes standard reports to be produced, their frequency,
responsibility for production, and distribution.

 

  6.2 Off-Premises / After Hours Transactions

All Natural Gas and Oil Supply Traders and Schedulers are granted authority to
complete transactions within their normal course of business outside of the
office and outside of normal business hours. This authority can also be extended
to specific Oil Marketers or Traders that would regularly conduct futures /
forward transactions outside of normal business hours. It is the responsibility
of the specific employee to ensure that all transactions are entered into the
appropriate commercial system as soon as practical, in all cases expected by at
least the end of the next business day.

If a trader or marketer who does not fit into the category identified above and
is not normally authorized to transact off-premises or after hours, he/she must
receive pre-authorization from his/her Trading Leader. The Trading Leader will
grant such authorization on a case by case basis and document the specific
exception to this procedure.

 

  6.3 Confirmations

The use of written confirmations and/or other appropriate documentation such as
e-mail or other on-line communication tools are generally used to confirm
transactions, supported if available by recorded phone lines. Exceptions must be
approved and documented by the responsible Trading Leader and reported to the
Chief Risk Officer. Unless there is an appropriate reason for an exception, the
standard protocol is for the signed confirmations from 3rd-parties to be sent to
the Contract Administration group.

 

  6.4 Personal Accounts

Traders must not engage in trading any of the commodities listed in EXHIBIT 1
outside of their responsibilities at Sprague Energy Corp. This policy does not
restrict trading of other instruments such as equities, equity options or
non-approved commodities and related trading instruments. It also does not
restrict trading in funds that utilize commodities in their portfolio of assets.

 

  6.5 Contract Signature Authorization

The following information identifies the signature authority typically
applicable for key contract types. Note that it is not intended to override any
signature authority already provided by the Board of Directors. Also note that
the Sprague President / CEO has authority to sign all of the contracts
identified below and the CRO can sign all contracts listed below with the
exception of ones that require COO / CFO or President / CEO approval.

 

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  A. Vice President of Oil Trading, Pricing and Customer Service: Signature
authority for all Oil Supply / Trading Agreements, with the exception of those
requiring AJI Guarantees (requires AJI signature) and margin (collateral)
provisions (requires COO / CFO signature). The VP of Oil Trading, Pricing and
Customer Service can delegate signature authority to the VP Oil Supply for
contracts in the Oil Supply area.

 

  B. Vice President of Sales: Signature authority for all Oil Marketing
Agreements, with the exception of those requiring AJI Guarantees (requires AJI
signature) and margin (collateral) provisions (requires COO / CFO signature).
The VP of Sales can delegate signature authority to the Managing Directors of
Oil Marketing for contracts in their respective areas.

 

  C. Vice President Marketing and Materials Handling: Signature authority for
all Materials Handling Agreements, with the exception of those requiring AJI
Guarantees (requires AJI signature) and margin (collateral) provisions (requires
COO / CFO signature).

 

  D. Manager of Contract Administration:3 Signature authority for all
confirmations, including ones which have been reconciled with the deal
information entered by the Front Office or are electronically generated based on
data entered by the appropriate member of the Front Office. Note that in
practice the confirmations will typically be signed by the appropriate Front
Office member with signature authority.

 

  E. Responsible Trader or Marketer: Review all Confirmations, including ISDA
Long Form Confirmation Agreements and One-off agreements, regardless of which of
the above individuals signs the agreement, which shall include a review/approval
and a related signature by the responsible Trader or Marketer.

 

3  For backup purposes, if the Manager of Contract Administration is not
available the Treasurer, Chief Risk Officer or Chief Operating Officer / Chief
Financial Officer can sign all agreements listed under the authority of the
Manager of Contract Administration.

 

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7. PROCESSES FOR NEW PRODUCTS, NON-STANDARD TRANSACTIONS, AND ELECTRONIC TRADING
SYSTEMS

 

  7.1 New Product

 

  7.1.1 Definition of New Product

A New Product is defined as any physical or financial transaction or exposure
that: 1) is not listed on EXHIBIT 1: APPROVED PRODUCTS LIST; or 2) exposes
Sprague to risks (e.g., Market, Liquidity, Credit, Operational, Legal,
Regulatory, Accounting, Tax) to which the Company has not been previously
exposed. Exposure to pre-existing approved risk types in significantly different
ways (e.g., significantly different geographic location, market structure, or
contract terms) would also constitute a New Product. For example, trading
refined products in Singapore would constitute a new geographic location, which
would require review through the new product process. Note that although adding
a new customer always exposes the company to new credit risk, this stand-alone
activity does not constitute a new product. An example form that can be used by
the sponsor of a new product is included as EXHIBIT 4.

The APPROVED PRODUCTS LIST as shown in EXHIBIT 1 is separated into Oil, Natural
Gas, and Materials Handling. In addition to the general listing of the products,
more detailed matrices are included in ATTACHMENTS 2 through 5. The oil and gas
product matrices in ATTACHMENTS 3 and 4 list approved instruments by trader or
marketer. The approved Materials Handling products matrix in ATTACHMENT 5 is
shown by terminal and based on products that have been previously, are
currently, or are now under consideration for handling at specific terminals.

 

  7.1.2 New Product Objectives

The Supply / Trading and Marketing Officers are responsible for identifying the
exposures of New Products and services and ensuring that the following
objectives have been met:

 

  A. The risks and rewards associated with the product or service are
identified, analyzed and understood;

 

  B. Any conflicts or overlaps with existing business are identified and
evaluated in relation to the new product or service before proceeding;

 

  C. The necessary support and control infrastructure can be put in place in a
timely manner to permit smooth and well-controlled operation; and

 

  D. The pace of expansion is consistent with the capacity to measure, monitor
and manage the associated risks.

The responsible Supply / Trading and Marketing Leader will review and consider
these and other pertinent issues. If, in his/her opinion, the request meets the
stated objectives and is consistent with the Company’s stated business vision
and strategies, the Supply / Trading and Marketing Leader will request approval
identifying the type of information included in the example New Product Approval
Form (EXHIBIT 4). The Chief Risk Officer will perform a high level review of the
New Product request to determine if the proposed New Product is not covered on
the Approved Products list and needs to go through the New Product Process. As
part of this review the CRO will discuss with the President and/or the COO / CFO
as deemed necessary. The guidelines defined below will be used if the proposed
product needs to go through a formal New Product Approval process.

 

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  7.1.3 New Product Approval Process

The appropriate Supply / Trading and Marketing Officer will sponsor any New
Product request. Once the sponsor has reviewed the request and desires to
proceed with a formal review and request for approval, it is the responsibility
of the Supply / Trading and Marketing Officer and the Chief Risk Officer to
coordinate the New Product Approval process.

The following departments will generally be required to review and understand
the New Product request, though in some cases the Chief Risk Officer may
determine that the review of a specific department(s) is not required. Each
department will be required to identify any concerns and, where appropriate,
identify necessary changes to address those concerns in order to accommodate the
new product:

 

  A. Credit

 

  B. Legal

 

  C. Tax

 

  D. Accounting (financial accounting, operations accounting, invoicing/billing,
tax)

 

  E. Contract Administration

 

  F. Trading Leader(s)

 

  G. Operations (logistics, scheduling, nominations)

 

  H. IT

 

  I. Treasury

 

  J. Insurance

 

  K. Middle Office

 

  L. Operations

 

  M. Health, Safety, and Environmental

If a representative of these departments has concerns with the New Product,
these concerns must be communicated to the sponsor of the transaction and the
Chief Risk Officer. Among the information that may be required on the New
Product Approval request are the following items:

 

  A. Product overview, features, benefits to Sprague (including target market,
expected/upside/downside scenarios);

 

  B. Start-up costs (infrastructure/system changes, new hires, licenses,
collateral);

 

  C. Description of risks (types of market risks, types of credit risks, etc.),
measurement and reporting methods and required controls;

 

  D. Proposed limit structure (e.g. volumetric, tenor, VaR, stress, other);

 

  E. Source(s) of physical supply, where applicable;

 

  F. Transportation and/or storage requirements, where applicable;

 

  G. Target market, list of potential counterparties;

 

  H. Credit issues;

 

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  I. Legal issues;

 

  J. Tax issues;

 

  K. Regulatory issues;

 

  L. Credit support requirements (guarantee, L/C, Collateral);

 

  M. Liquidity issues (including cash requirements);

 

  N. Hedging strategy; and

 

  O. Exit strategy.

The responsibility for initially suggesting appropriate risk measurement
methodologies, limits and controls (collectively referred to as “parameters”)
for a New Product lies with the New Product sponsor. The New Product sponsor and
the Chief Risk Officer will then review their understanding of the risks,
rewards, related assumptions and appropriate limits. If the sponsor and the CRO
are in agreement and all pertinent departments have reviewed and agreed to the
New Product, it is approved subject to concurrence by the President and COO /
CFO. The CRO will ensure that the President and COO / CFO are informed and in
conjunction with the sponsor address any questions or concerns. Following
approval by the President and COO / CFO, the product becomes part of the
Approved Products list. Once the product and any pertinent parameters have been
approved, the Chief Risk Officer should ensure that they are appropriately
considered in report formats, as well as transaction recording processes and
valuation methodologies. Some examples of offerings that would normally
constitute a New Product consistent with the definition above include:

 

  •   A marketing product that exposes the company to a different set of market
risks, e.g. Oil Marketing’s Heat Curve and Free Range products were new products
when first introduced. Similarly, the Natural Gas Accelerated Collar product was
a new product when introduced; and

 

  •   A Materials Handling product to be handled at a terminal that is
dissimilar to past Materials Handling experience.

Ultimate responsibility for verification that risks have been identified and,
mitigated where appropriate, rests with the Chief Risk Officer. This new product
requirement is only required when the product in question is not part of the
current portfolio, e.g., is not required when new marketing products are added
that are simply different blends of existing grades in inventory or minor
variations due to changing product quality regulations. Materials Handling
products that are comparable to ones previously or currently handled also do not
need to go through the new product approval process. In addition, if a new
product is added to Sprague’s portfolio via an acquisition or other third-party
mechanism (joint venture, etc.), a specific new product approval process is not
required. For these situations, the new products will be evaluated as part of
the transaction process.

 

  7.2 Non-Standard Transaction

 

  7.2.1 Definition of Non-Standard Transaction

A “Non-Standard transaction” will include multiple classes of transactions for
which approval will be required before execution. The various classes of
transactions falling into this category will be as follows:

 

  A. All transactions with tenor greater than: contract length of 24 months or
position duration of 32 months;

 

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  B. Transactions which are outside the authority levels of the Trading
Leader(s); and / or

 

  C. Transactions that cannot be automatically captured in Company’s Trading and
Risk Management System(s).

Examples of non-standard transactions would include:

 

  •   Natural Gas Supply Transportation deal covering five year period;

 

  •   Individual discretionary location spread position in Oil Supply of over
400 KB; and

 

  •   Transaction requiring mark-to-model approach (i.e. does not have
transparent arms-length pricing mechanism) to provide daily valuations.

Transactions that hedge the initial non-standard transaction do not require
explicit approval as long as the hedge is within the established credit and
market risk limits. Other transactions that are excluded from this category
include Material Handling deals (where tenor frequently exceeds the limits
indicated above) and bid opportunities covering longer time periods that obtain
Senior Management approval via an explicit bid process.

 

  7.2.2 Non-Standard Transaction Approval Process

Any trader or marketer seeking approval for a non-standard transaction will be
required to notify his/her Trading Leader or Market Leader. Once the responsible
Trading Leader or Market Leader concurs that they wish to submit the
Non-Standard Transaction for approval, either the Trading Leader or Market
Leader must notify the Chief Risk Officer. Note that the CRO can also be
notified directly by the trader or marketer. Depending on the details of the
proposed transaction, the Chief Risk Officer will determine what additional
information and review is required. The appropriate Middle Office Manager will
coordinate the Non-Standard Transaction Approval process as necessary in
conjunction with the Chief Risk Officer.

The requirements for assessment can vary from simply obtaining concurrence from
the person(s) with the appropriate authority level, e.g. the Sprague President
or the AJI President to completing a more detailed analysis. The Chief Risk
Officer will coordinate the approval process. For the opportunities that require
detailed analysis, the Middle Office Manager, in conjunction with the Senior
Quantitative Analyst, will provide a high level risk and valuation assessment
while the following departments will be included on an as needed basis as
determined by the Chief Risk Officer:

 

  A. Credit

 

  B. Legal

 

  C. Tax

 

  D. Accounting

 

  E. Contract Administration

 

  F. Trading Leader(s)

 

  G. Operations (logistics, scheduling, nominations)

 

  H. IT

 

  1. Treasury

 

  J. Insurance

 

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  K. Middle Office

 

  L. Operations

 

  M. Health, Safety, and Environmental

If concerns arise from representatives of these departments, they should be
communicated immediately to the Non-Standard Transaction Sponsor and the Chief
Risk Officer or Middle Office Manager. Types of information that may be required
to complete the Non-Standard Transaction evaluation include:

 

  A. Critical terms (term, price, volume, location, etc.)

 

  B. Description of transaction

 

  C. Notional value

 

  D. Cash flow analysis

 

  E. Source of physical supply

 

  F. Counterparty details

 

  G. Credit issues

 

  H. Legal issues

 

  I. Transmission or transportation requirements

 

  J. Effect on position limits

 

  K. Tax issues

 

  L. Regulatory issues

 

  M. Liquidity issues (including cash requirements)

 

  N. Hedging strategy

 

  0. Exit strategy

 

  P. Separate risk limits required

If concerns arise that cannot be resolved in a timely manner, the Supply /
Trading and Marketing Officer and Chief Risk Officer will attempt to find a
resolution and either: 1) proceed with the transaction; or 2) deny the request.
Ultimate responsibility for determination that material issues have been
adequately addressed rests with the Chief Risk Officer.

 

  7.2.3 Electronic Trading Systems

Contract Administration shall coordinate the review and approval of new
electronic trading systems by the Front Office. This approval will be granted
following review of the business case (developed by the Front Office) and the
control issues associated with the specific product. This process will include
review by the Credit, Contracts and Legal departments, as well as the
responsible Trading Leader(s), IT and the Middle Office Manager. Once approved
for use by the Front Office, the Credit department will be responsible for
maintaining control of the approved counterparty list and trading limits on
electronic systems. Procedures for the use of Electronic Trading Systems will be
maintained in the Front Office.

 

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EXHIBITS

 

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EXHIBIT 1 - APPROVED PRODUCTS LIST

I. Oil Supply and Marketing

Logistics

Barge / Ship

Pipeline

Truck

Railcar

Trading / Hedging

Futures (NYMEX and ICE)

EFPs

Fixed-for-Float Swaps

Basis Swaps

Options (Futures and OTC)

Sales / Marketing / System Supply

Buy / Sell

Thruputs

Exchange Agreements

3rd - Party Storage

Reseller

Fixed Forwards

Unpriced Guaranteed Differentials (UGDs)

Heat Curves

Downside Protection

Rack Sales

Prompts (including E-Commerce)

E-Commerce Forwards

Collars

Forward Basis

II. Natural Gas Supply and Marketing:

Logistics / Storage

Transportation

Storage

Trading / Hedging

Futures (NYMEX and ICE), Natural Gas and Oil Products

Index Swaps

Swing Swaps

Financial Basis (a.k.a. Basis Swaps)

Physical Basis

Fixed-for-Float Swaps

Options (futures and OTC)

Spreads (time, basis)

Cross Commodity Spreads

Note: ATTACHMENTS 2-5 provide more details on approved products breakdown

 

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EXHIBIT 1 — APPROVED PRODUCTS LIST (CONT.)

 

Marketing / Sales

Forwards (fixed, index, or basis)

Trigger

Caps

Collar

Accelerated Collar

III. Materials Handling

Product Name

Aggregates

Asphalt

Aviation Fuel

Calcium Chloride

Caustic Soda

Cement

China Clay

Coal

Furnace Slag

Government Petroleum

Gypsum

Heavy Lift

Iron Oxide

Logs

Lumber

Paper (rolled or bundled)

Petcoke

Pulp (baled)

Recycled Oil

Salt

Scrap

Seaweed

Sugar

Tallow

Tapioca

Urea

Veg Oil

Wood Pellets

Note: ATTACHMENTS 2-5 provide more details on approved products breakdown

 

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EXHIBIT 2 — PRODUCT DEFINITIONS

 

   Note that the following definitions are in some cases in reference to
specific Sprague offerings / terminology and are not considered general industry
definitions Accelerated Collar:    Specific product offered by Natural Gas to
its customers. Product is more complex than a standard collar deal (see below),
providing the customer upside price protection and downside price participation
with potential discounts to the market price. Basis:    Differential between the
cash or spot price of a commodity and the price of the nearest futures contract.
Basis may reflect different time periods, qualities / grades, or locations.   

•       Natural Gas Basis: Generally refers to location differences, i.e. the
price of natural gas at a physical location less the prompt month natural gas
futures contract.

 

•       Oil Basis: Generally refers to quality / grade and possibly location
differences, typically the price of the physical commodity less the prompt month
of the most similar futures contract.

Basis Swap:    A contract in which two parties exchange cash flows linked to the
difference between the price of a specific quantity of commodities at a
particular physical location or quality / grade and the price of the same
quantity of commodities on an organized exchange at a different physical
location or of a different quality/grade. Cap:    Contract which has a maximum
price. This is generally purchased by customers that want the opportunity to
benefit from expected future price declines, though want to limit their exposure
to future price increases. Collar:    Contract where the buyer is guaranteed a
maximum price and the seller a minimum price. These transactions are supported
by purchase and sale of options positions. A Costless Collar is where buying and
selling respectively the related Call and Put are used to finance the Collar.
Downside Protection:    Contract designed to allow the customer to benefit from
declining market prices. Sprague generally completes an option transaction(s) to
limit the risk associated with this offering. E-commerce    Contract offered by
Oil Marketing whereby the customer purchases oil either on a prompt or forward
basis via an electronic platform. EFP *    A transaction in which two parties
agree to exchange a specified amount of futures contracts for the same physical
quantity of commodities, with the price of the commodities determined by
reference to the market price of the futures. Forward:    Contract that commits
a party to buying or selling a specific quantity of commodities at a price
specified at the origination of the contract, with delivery and settlement at a
specified future date and location. Futures:    A standardized Forward that is
traded on a domestically regulated organized exchange such as the New York
Mercantile Exchange (NYMEX) or Intercontinental Exchange (ICE). Heat Curve:   
Contract offered by Oil Marketing whereby the customer purchases a specified
volume of heating oil over several forward months, with the monthly volume
distribution reflecting the typical seasonal demand pattern. Index:    Published
price that is intended to represent the market price for that particular
commodity and location for the specified time period. Different pricing services
used different methodologies to establish their pricing indices.

 

* Exchange of Futures for Physical

 

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EXHIBIT 2 — PRODUCT DEFINITIONS (CONT.)

 

Index Swap:    This contract essentially represents a combination of a fixed for
floating swap and basis swap, with the floating component being an index price.
Option:    A contract that gives the purchaser (holder) the right, but not the
obligation, to buy (call) or sell (put) a specific quantity of commodities at an
agreed-on price, during a specified period or at a specified date. There are a
range of option settlement alternatives, including:   

•      American Option: Option which may be exercised at any time during its
lifetime, up to and including the expiration date.

  

•      Asian Option: Option whose payoff depends on an average of prices for the
underlying commodity over a period of time, rather than the price of the
commodity on a single date. The averaging period may correspond to the entire
life of the option, or may be shorter.

  

•      European Option: Option which may only be exercised on its expiration
date.

Over-the-Counter:    Trading of financial instruments such as commodities or
derivatives directly between two parties. Regulations are more limited for OTC
transactions compared to trades completed on an organized exchange. Prompt:   
Contract offered by Oil Marketing for a specified volume of oil to be lifted
over a short time period (e.g. maximum of 10 days). Rack:    Oil Marketing
transaction where customer purchases oil on a non-delivered basis at a terminal
loading facility or “rack”. Spread:    Transaction that involves a corresponding
purchase and sale with volumes that offset to a net zero position. Spread
Option:    Option written on the differential between the prices of two
commodities, e.g.,   

A.     Basis (location) Spread: Based on the difference between the prices of
the same commodity at two different locations. As indicated above, this basis
definition is largely used in for natural gas transactions;

 

B.     Calendar or Time Spread: Based on the difference between the price of the
same commodity at two different points in time;

 

C.     Processing Spread: Based on the difference between the price of inputs
to, and outputs from, a production process (e.g. a crack spread);

 

D.     Quality or Grade Spread: Based on the difference between the prices of
different grades of the same commodity.

Swap:    A contract by which the parties agree to exchange one product for
another. The products can be either physical or financial. A common type of swap
is the fixed for floating swap, which can include various alternatives such as
futures, basis, index, and swing swaps. Swing Option:    Option which grants the
right to take more or less of a specified commodity. The opportunity to swing up
is effectively a call option on the commodity specified in the contract, and the
opportunity to swing down is a put option on the commodity, subject to
obligations to take certain quantities over the entire life of the contract.
Swing Swap:    Refers to a gas contract that is based on a fixed-for-floating
index swap that references an average of daily prices. This is generally used
for interruptible gas contracts. Trigger:    A physical transaction that is
priced at a differential to a futures or swap contract where the price can be
locked in or “triggered” at a later date.

 

41

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Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -   12/5/2011        

 

EXHIBIT 2 — PRODUCT DEFINITIONS (CONT.)

 

UGD:    Unpriced Guaranteed Differential contract offered by Oil Marketing. In
this contract, the customer agrees to purchase a specified volume of oil at an
agreed to price differential compared to a specified futures contract price(s).
The customer fixes (see trigger) the price of the futures component of the price
at some point prior to expiration of the relevant futures contract. Volatility:
   Typically refers to the standard deviation of the change in value of a
financial instrument with a specified time horizon. Volatility is tracked
heavily in options trading. Historical volatility is based on how much prices
have changed in the past, based on settlement levels. Implied volatility is a
theoretical value based on the premium of an option and is intended to represent
the expected level of price changes in the future. In general, increasing
volatility leads to higher options prices.

 

42

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Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -   12/5/2011        

 

EXHIBIT 3 — MARKET RISK LIMIT STRUCTURE

 

Control Levels1

  

President

 

Senior Commercial /

Trading Manager

Oil Supply Discretionary + System Optimization

    

*Contract Term

   60 months   24 months

Term of Positions

   68 months   32 months

Outright (Thousand Bbls)

   500   300

Total Spreads (Thousand Bhls)

    

Time

   2,500   1,750

Location

   1,5003   1,0003

Basis

   2,500   1,750

Cross Commodity

   5003   3003

Individual Spread Positions (Thousand Bbls)

    

Time

   1,2502   6002

Location

   8003   4003

Basis

   1,000   500

Cross Commodity (e.g. oil/gas, crude oil / resid)

   5003   3003

Daily VaR (Value at Risk)

   $1.5 million   $1.5 million

Oil Supply System

    

Seasonal Hedged Storage4

   4,000   2,000

Hedge Pre-Roll

   3,000   1,500

Natural Gas

    

Contract Term

   60 months   24 months

Term of Positions

   68 months   32 months

Total Position (10,000 MM BTU’s)

    

Fixed Price

   250   150

Basis

   2,000   1,000

Index

   4,000   3,000

Individual Month Positions (10,000 MM BTU’s)

    

Fixed Price

   125   75

Individual Month and Location Positions (10,000 MM BTU’s)

    

Basis

   400   200

Index

   700   350

Daily VaR

   $1.5 million   $0.75 million

Oil and Gas

    

Total $ Gross Margin Loss

    

 

Daily MAT (Mgm’t Action Trigger)

Monthly MAT

   $2 million

$3 million

  $500 K NG/ $500 K Oil

$1 million NG /$1 million Oil

 

1 Composite of overall group’s limits.

2  For distillates. Limits for other products are 50% of distillate levels.

3  Up to 500,000 barrels of residual fuel oil can be hedged with crude oil
without counting against the cross commodity and location spread limits.

4  Hedged storage strategy will be agreed to with Sprague management prior to
execution. Note: Other limits will be established as necessary in conjunction
with business requirements

 

43

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Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -   12/5/2011        

 

EXHIBIT 4 — SAMPLE NEW PRODUCT APPROVAL FORM

 

NAME OF PRODUCT:     CURRENT DATE:

 

   

 

Sponsor     Date

 

A.    PRODUCT OVERVIEW:   Describe features and benefits of this product to
business unit and Sprague Energy Corp. B.    RISK ASSESSMENT:  

Describe risks, measurement and reporting methods, risk mitigation strategies

and potential controls.

 

 

     

 

Credit       Date

 

     

 

Legal       Date

 

     

 

Tax       Date

 

     

 

Operations Accounting       Date

 

     

 

Contract Administration       Date

 

     

 

Trading Leader       Date

 

     

 

IT       Date

 

     

 

Treasury       Date

 

     

 

Insurance       Date

Note: Chief Risk Officer will determine which groups are required to sign-off on
a new product approval form

 

44

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Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -   12/5/2011        

 

EXHIBIT 4 - SAMPLE NEW PRODUCT APPROVAL FORM (CONT.)

 

 

     

 

Middle Office       Date

 

     

 

Physical Operations (logistics, scheduling, nominations)       Date

 

     

 

Terminals and Trucking       Date

 

     

 

Health, Safety, and Environmental       Date

 

C PROJECTED IMPACT:

 

  •   Start-up Cost:

 

  •   Price Schedule:

 

  •   Accounting Treatment and Tax Implications:

 

  •   Additional IT resource requirements

 

D.     RECOMMENDATION:   The proposed New Product meets the New Product
Objectives as outlined in the Risk Management Policy. All material risks have
been identified and addressed in this document. RMC approval of this New Product
request is recommended.

 

 

      

 

Trading and Marketing Officer        Date

 

      

 

Chief Operating Officer/ Chief Financial Officer        Date

 

      

 

Chief Risk Officer        Date

 

E. APPROVAL:

 

 

     

 

RMC Chairperson       Date

Note: Chief Risk Officer will determine which groups are required to sign-off on
a new product approval form

 

45

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Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -   12/5/2011        

 

EXHIBIT 5 — EMPLOYEE CONFIRMATION

Sprague Operating Resources LLC

Risk Management Policy

EMPLOYEE CONFIRMATION

As an employee of Sprague Operating Resources LLC (“Company”) or any successor
thereto, I hereby acknowledge that I:

 

1. Have received and read a copy of the Risk Management Policy dated December 5,
2011, and understand my responsibilities and required participation in the
procedures described;

 

2. Understand and agree to comply with the Risk Management Policy, as the same
may be amended from time to time, and will conduct business activities in a
manner consistent with its terms, philosophy and spirit;

 

3. Understand that my personal involvement or direct or indirect actions
resulting in violations of the Policies and Procedures constitute grounds for
termination of employment and or criminal prosecution; and

 

4. Agree to report all violations of the Risk Management Policy to the Chief
Risk Officer.

 

 

     

 

EMPLOYEE SIGNATURE       DATE

 

     

 

PRINTED EMPLOYEE NAME       DATE

 

     

 

VICE PRESIDENT       DATE

 

46

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Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -   12/5/2011        

 

EXHIBIT 6 — MANAGEMENT REPORTS & CONTROL PROCESSES

DAILY FREQUENCY

 

Report

  

Responsibility

  

Distribution

Daily Position Report

 

Open volume (nominal and delta adjusted) and daily change in open volume by
commodity and contract month.

   Middle Office Manager    Traders RMC1

Daily Profit & Loss Report

 

Includes daily, month-to-date and year-to-date profit and loss.

   Middle Office Manager    Traders RMC1

Daily Portfolio Risk Profile

 

VaR by risk group (i.e.

natural gas and oil).

   Middle Office Manager    Traders RMC1

 

1  Reports distributed to select RMC members

 

47

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Sprague Operating Resources LLC Risk Management Policy

 

Privileged and Confidential -   12/5/2011        

 

EXHIBIT 6 — MANAGEMENT REPORTS & CONTROL PROCESSES (CONT.)

 

MONTHLY FREQUENCY

 

Report

  

Responsibility

  

Distribution

Monthly Operations Review

 

Including month-to-date, year-to-date profit and loss, including narrative
explanations of significant changes in volumes and mark-to-market amounts

   Financial Planning and Analysis in conjunction with Operations Accounting
Manager    Traders RMC1

Manual Valuation Report

 

List of all transactions which reside and are valued outside the Risk Management
and Trading System

   Sr. Quantitative Analyst    Traders RMC1

Monthly Limit Notice

 

Statement of compliance or noncompliance with all limits

   Chief Risk Officer    Traders RMC1

AS NEEDED FREQUENCY

 

Report

  

Responsibility

  

Distribution

Stop-Loss Limit (MAT) Report    Chief Risk Officer    Traders RMC1 Violation
Report    Middle Office Manager    Traders RMC1 Other Reports as Necessary   
Chief Risk Officer    To Be Determined by Chief Risk Officer

 

1  Reports distributed to select RMC members

 

48

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ATTACHMENT 1 - Risk Management & Strategic Planning Org.

 

 

LOGO [g621809chart.jpg]

Effective Date: 12/5/2011

 

49

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ATTACHMENT 2 – APPROVED PHYSICAL OIL PRODUCTS

Table 1 - Data Warehouse Code #2

 

Product Name

  

Product Abbreviation

HEAT    200 #2 Diesel Fuel - Dyed    201 #2 H/S Wintrzd Dsl 50/50-Dyed    203 #2
H/S Marine Prem Dsl - Dyed    204 #2 H/S Diesel - Dyed    205 #2 H/S Premium
Diesel - Dyed    206 #2 H/S Wintrzd Heating Oil 70/30-Dyed    209 HeatForce Prem
Heating Oil    210 #2 H/S Wntrzd Diesel 60/40 Dyed    211 #2 Oil .25% Sulfur -
Dyed    214 #2 H/S Marine Dsl - Dyed    216 MGO    227 MDO    228 #2 Marine
Diesel .25S w/VT - Dyed    279 #2 HS GForce Prem Heating Oil    3034 #2 H/S
Heating Oil - Dyed    3039 GC Jet - HO Basis    GC Jet - HO GC No. 2 - HO Basis
   GC No. 2 - HO 30 Gallon Drum Heatforce    HF30 5 Gallon Pail Heatforce    HF5
55 Gallon Drum Heatforce    HF55 Russian Gas Oil    RGO Undyed Heating Oil   
Undyd Heat Oil

Table 2 - Data Warehouse Code #4

 

Product Name

  

Product Abbreviation

#4 Oil - 0.3% Sulfur    403 #4 Oil - 0.5% Sulfur    405 #4 Oil - 0.6% Sulfur   
406 #4 Oil - 1.0% Sulfur    410 #4 Oil - 1.3% Sulfur    413 #4 Oil - 1.5% Sulfur
   415 #4 Oil - 2.0% Sulfur    420 450 ( IFO 180 )    450 451 (IFO 380)    451
#4 Oil - .25 Nitrogen    4OIL-.25N #4 Oil - .28 Nitrogen    4OIL-.28N IFO 180   
IFO 180 IFO 380    IFO 380 IFO 40    IFO 40

 

50

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ATTACHMENT 2 - APPROVED PHYSICAL OIL PRODUCTS

Table 3 - Data Warehouse Code #5

 

Product Name

  

Product Abbreviation

#5 Oil - 0.5% Sulfur    505 #5 Oil - 0.6% Sulfur    506 #5 Oil - 0.7% Sulfur   
507 #5 Oil - 1.0% Sulfur    510 #5 Oil - 1.4% Sulfur    514

Table 4 - Data Warehouse Code #6

 

Product Name

  

Product Abbreviation

#6 Oil - 0.3%    603 #6 Oil - 0.5% Sulfur    605 #6 Oil - 0.7% Sulfur    607 #6
Oil - 1.0% Sulfur    610 #6 Oil - 1.3% Sulfur    613 #6 Oil - 1.5% Sulfur    615
#6 Oil - 1.6% Sulfur    616 #6 Oil - 1.7% Sulfur    617 #6 Oil - 1.8% Sulfur   
618 #6 Oil - 1.9% Sulfur    619 #6 Oil - 2.0% Sulfur    620 #6 Oil - 2.1% Sulfur
   621 #6 Oil - 2.2% Sulfur    622 #6 Oil - 3% Sulfur    630 #6 Oil - 3.5%
Sulfur    635 #6 Oil - 1.75% Sulfur    675 #6 Oil - 1.76% Sulfur    676 #6 Oil -
0.3% Sulfur High Pour    603HP #6 Oil - 0.3% Sulfur Low Pour    603LP #6 Oil -
0.5% Sulfur Low Pour    605LP #6 Oil - 1.5% Sulfur IP    615 IP NYH 6 1.0% - CL
Basis    NYH 610 - CL

Table 5 - Data Warehouse Code BIO

 

Product Name

  

Product Abbreviation

#2 Heating Oil Dyed B-20 Bio    207 #2 Heating Oil B-2 Bio Dyed    212 #2
Heating Oil Dyed B-5 Bio    213 #2 Heating Oil Dyed B-99.9 Bio    215 #2 Heating
Oil Dyed B-40 Bio    217 S15 USLD #2 40 / ULSK 40 / BIO 20    237 S500 #2 47.5
LS Dsl B-5 Clear    240 S500 #2 47.5 LS Dsl B-5 Dyed    241 S500 No.2 LS Diesel
B-10 Dyed    245

 

51

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

ATTACHMENT 2 - APPROVED PHYSICAL OIL PRODUCTS

 

S500 No.2 LS Diesel B-10 Clear    246 #2 Heating Oil B-10 Bio Dyed    247 S500
#2 Prm 47.5 LSD B-5 Clear    248 S500 #2 Prm 47.5 LSD B-5 Dyed    249 S500 No.2
LS Diesel B-40 Dyed    265 S500 No.2 LS Diesel B-40 Clear    266 HeatForce Prem
#2 Dyed B99.9 Bio    267 HeatForce Prem #2 Dyed B-2 Bio    269 HeatForce Prem #2
Dyed B-5 Bio    272 HeatForce Prem #2 Dyed B-20 Bio    275 HeatForce Prem #2
Dyed B-40 Bio    276 S15 #2 PRM ULSD CLEAR B-50    277 S15 #2 PRM ULSD DYED B-50
   278 S500 No.2 RFC Pr LSD B-5 Clr    283 S500 No.2 RFC Pr LSD B-2 Clr    284
S500 No.2 LS Diesel B-20 Dyed    285 S500 No.2 LS Diesel B-2 Dyed    286 S500
No.2 LS Diesel B-2 Clear    287 S500 No.2 RFC Pr LSD B-20 Clr    288 S500 No.2
LS Diesel B-5 Dyed    289 S500 No.2 LS Diesel B-5 Clear    293 Biodiesel B-100
   295 Bio Diesel (b20) - Dyed    296 S500 No.2 LS Diesel B-20 Clear    297 S500
LS Kero Dyed - B-2 Bio    300 S500 LS Kero Dyed - B-5 Bio    301 S500 LS Kero
Dyed - B-20 Bio    302 S500 LS Kero Clear - B-2 Bio    303 S500 LS Kero Clear -
B-5 Bio    304 S500 LS Kero Clear - B-20 Bio    305 S500 No.2 RFC Pr LSD B-2
Dyed    306 S500 No.2 RFC Pr LSD B-5 Dyed    307 S500 No.2 RFC Pr LSD B-20 Dyed
   308 S15 #1ULS Diesel - B-50 Bio Clear    309 S15 ULS Kero Dyed - B-2 Bio   
310 S15 ULS Kero Dyed - B-5 Bio    311 S15 ULS Kero Dyed - B-20 Bio    312 S15
ULS Kero Clear - B-2 Blo    313 S15 ULS Kero Clear - B-5 Bio    314 S15 ULS Kero
Clear - B-20 Blo    315 S15 No.2 RFC Pr ULSD B-2 Dyed    316 S15 No.2 RFC Pr
ULSD B-5 Dyed    317 S15 No.2 RFC Pr ULSD B-20 Dyed    318 S15 #2 ULSD Clear -
B-50    324 S500 LSD 50/50 B20 CLR    326 S500 LSD 50/50 B20 DYED    327 S15 #2
ULSD Dyed - B-50    328 S15 #1ULS Diesel - B-50 Bio Dyed    329

 

52

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ATTACHMENT 2 - APPROVED PHYSICAL OIL PRODUCTS

 

S15 Prem ULSD #2 B-20 Clear    337 S15 No.2 47.5 ULSD Clear B-5    340 S15 No.2
47.5 ULSD Dyed B-5    341 S15 No.2 ULS Diesel B-10 Dyed    345 S15 No.2 ULS
Diesel B-10 Clear    346 S15 No.2 ULS Diesel Clear B-99.9 Bio    347 S15 No.2
Prm 47.5 ULSD Clear B-5    348 S15 No.2 Prm 47.5 ULSD Dyed B-5    349 LSD / Kero
Clear B-20 Bio-blend    355 S15 #2 RdFrc Prm ULSD Clr B-10    359 S15 No.1 ULSD
Clear - B-10 Bio    365 S15 No.1 ULSD Dyed - B-10 Bio    366 S15 No.2 ULS Diesel
B-40 Dyed    367 S15 No.2 ULS Diesel B-40 Clear    368 S15 #2 RdFrc Prm ULSD Dyd
B-10    369 S15 No. 2 Prem ULSD B-5 Clear    372 S15 No.1 ULSD B-5 Bio Clear   
375 S15 No.1 ULSD Dyed - B-5 Bio    376 S15 No.1 ULSD B-20 Bio Clear    377 S15
No.1 ULSD Dyed - B-20 Bio    378 S15 No.1 ULSD Clear B-2 Bio    379 No. 1 ULS
Diesel Dyed B-2 Bio    380 515 No.2 RFC Pr ULSD B-5 Clr    383 S15 No.2 RFC Pr
ULSD B-2 Clr    384 S15 No.2 ULS Diesel B-20 Dyed    385 S15 No.2 ULS Diesel B-2
Dyed    386 S15 No.2 ULS Diesel B-2 Clear    387 S15 No.2 RFC Pr ULSD B-20 Clr
   388 S15 No.2 ULS Diesel B-5 Dyed    389 S15 No2 56/24/B-20 ULSD Clr    391
S15 No2 56/24/B-20 ULSD Dyed    392 S15 No.2 ULS Diesel B-5 Clear    393 S15 No2
Prm 56/24/B20 ULSD Clr    394 S15 No2 Prm 56/24/B20 ULSD Dyd    395 Diesel Fuel
- ULS Dyed B-20 Bio    396 S15 No.2 ULS Diesel B-20 Clear    397 S15 No2
66.5/28.5/B5 ULSD Clr    3001 S15 No2 66.5/28.5/B5 ULSD Dyed    3002 S15 No 1
ULSD Clr B-5 w/detergent    3003 S15 No. 2 ULS Diesel B-80 Clear    3004 S15
No. 2 ULS Diesel B-80 Dyed    3005 S500 NRLM Winter Dsl 25Isd/55kero/B20    3006
S15 NRLM WntrBld 25 ulsd/55 ulsk/B20    3009 HeatForce Prem #2 Dyed B-10 Bio   
3010 S15 No 1 ULSD Clr B-10 w/detergent    3014 B-99.9 Heating Fuel - Clear   
3015 B-99.9 Bio    3016 #2 Heating Oil .2% Dyed B-5 Bio    3017

 

53

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ATTACHMENT 2 — APPROVED PHYSICAL OIL PRODUCTS

 

#2 Heating Oil .2% Dyed B-20 Bio    3018 S15 No. 2 Prem ULSD B-5 Dyed    3020
S15 ULS Kero Dyed - B-10 Bio    3022 S15 ULS Kero Clear - B-10 Bio    3023 S15
No. 1 ULSD Clear B-10 Bio    3024 S15 No. 1 ULSD Dyed B-10 Bio    3025 S15 No2
66.5/28.5/B5 Prm ULSD Clr    3026 S15 No2 66.5/28.5/B5 Prm ULSD Dyed    3027 S15
No2 54/36/B10 ULSD Clr    3028 S15 No2 54/36/B10 ULSD Dyed    3029 S15 No2
57/38/B5 ULSD Clr    3033 S15 No2 Prm 48/32/B20 ULSD Clr    3037 S15 ULS Prm Clr
40 / 40 / B-20    3038 B 100 Renewable Diesel    B 100 Renew Dsl B 99.9
Blendstock    B 99.9 Bldsk B-100 Biodiesel    B-100 B-100 Blendstock    B100
Blendstock Retail BioDiesel    B2 B-5 Heating Oil    B-5 Heat B-5 ULSD    B-5
ULSD B-99.9 Biodiesel    B-99.9 B99.9 Renewable Diesel    B99.9 Rnw Dsl Bio
Blendstock    Bio Blendstock Bio Heavies    Bio Heavy Bio Heavies AFM    Bio
Heavy AFM BioHeat Blendstock    BioHeat Blndsk Renewable Diesel    Renew Dsl

Table 6 - Data Warehouse Code CON

 

Product Name

  

Product Abbreviation

CONV Reg Gas - 87Oct    103 CONV Reg Gas - 87Oct-7.8 RVP    108 CONV Plus Gas -
89Oct    132 CONV Plus Gas 89Oct - 7.8 RVP    138 CONV Prem Gas - 91 Oct - 9.0
RVP    147 CONV Prem Gas - 91 Oct - 7.8 RVP    149 CONV Prem Gas - 93Oct    164
CONV Gas - 93Oct-7.8 RVP    169 CONV Gas - 92Octane    179 100 Low Lead Aviation
Gasoline    199 CONV    CONV LS CONV    LS CONV MID CONV    MID CONV PREM CONV
   PREM CONV PREM LS CONV    PREM LS CONV

 

54

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ATTACHMENT 2 — APPROVED PHYSICAL OIL PRODUCTS

Table 7 - Data Warehouse Code DSL

 

Product Name

  

Product Abbreviation

S500 No.2 90/10 LSD Clear    218 S500 No.2 RdForce Pr LSD Clr    230 S500 No.2
RdForce Pr LSD Dyed    231 S500 No.2 Premium LSD Clear    232 S500 No.2 Premium
LSD Dyed    233 S500 No.2 Prm 80/20 LSD Clear    234 S500 No.2 Prm 50/50 LSD
Clear    235 S500 No.2 Prm 75/25 LSD Clear    236 S500 No.2 Prm 70/30 LSD Clear
   238 S500 No.2 Prm 70/30 LSD Dyed    239 S500 No.2 Prm 60/40 LSD Clear    242
S500 No.2 Prm 90/10 LSD Clear    243 S500 No.2 80/20 LSD Dyed w/add    244 LSD
   250 S500 No.2 LS Diesel Dyed    251 S500 No.2 LS Htg Fuel Dyed    252 S500
No.2 75/25 LS Diesel Clr    253 S500 No.2 80/20 LS Diesel Clr    254 S500 No.2
50/50 LS Diesel Clear    256 S500 No.2 70/30 LS Diesel Dyed    257 S500 No.2
70/30 LS Diesel Clr    258 S500 No.2 Winterized LSD Clr    260 S500 No.2 85/15
LSD Clear    261 S500 No.2 60/40 LSD Clear    262 S500 No.2 60/40 LSD Dyed   
263 S500 No.2 90/10 LSD Dyed    264 Marine Diesel - L/S - Clear    280 Marine
Diesel - L/S - Dyed    281 S500 No.2 Retail LS Diesel    290 S500 No.2 Wntrz
70/30 LSD Dyed    298 S500 No. 2 50/50 LS Diesel Dyed    2000 S500 HeatForce LS
Htg Fuel Dyed    3007 Marine Diesel - L/S Prem Dyed    3008 LSD - OFF ROAD   
LSD OFF RD

Table 8 - Data Warehouse Code ETH

 

Product Name

  

Product Abbreviation

5.7% RBOB - Summer    105 RFG/OXY 87Oct-10% Eth VOC CTRL    109 RFG/OXY
87Oct-10% Eth VT VOC CTRL    110 RFG/OXY 87Oct-10% Eth    111 RFG/OXY 87Oct-10%
Eth VT    112 RFG/OXY 87Oct-5.7%Eth VOC CTRL    114

 

55

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

ATTACHMENT 2 - APPROVED PHYSICAL OIL PRODUCTS

 

RFG/OXY 870ct-5.7% Eth W/VT VOC CTRL    115 RFG/OXY 870ct-5.7% Eth    116
RFG/OXY 870ct-5.7%Eth VT    117 5.7% RBOB - Winter    118 10% RBOB - Summer   
119 10% RBOB - Winter    120 RFG/OXY 890ct-10% Eth VOC CTRL    130 RFG RBOB Gas
- 890ct.-9.0 RVP    137 RFG/OXY 890ct-10% Eth VT VOC CTRL    139 RFG/OXY
890ct-10% Eth    140 RFG/OXY 890ct-10% Eth VT    141 RFG/OXY 890ct-5.7% Eth VT
VOC CTRL    142 RFG/OXY 890ct-5.7%Eth VT    143 RFG/OXY 890ct-5.7% Eth VOC CTRL
   144 RFG/OXY 890ct-5.7%Eth    145 RFG/OXY 910ct-10% Eth VOC CTRL    150
RFG/OXY 910ct-10%Eth VT VOC CTRL    151 RFG/OXY 920ct-10% Eth VOC CTRL    152
RFG/OXY 920ct-10% Eth VT VOC CTRL    153 RFG/OXY 930ct-10% Eth VOC CTRL    154
RFG/OXY 930ct-10% Eth VT VOC CTRL    155 RFG/OXY 930ct-10% Eth    156 RFG/OXY
930ct-10% Eth VT    157 RFG/OXY 920ct-10% Eth    158 RFG/OXY 920ct-10% Eth VT   
159 5.7% PBOB - Summer    165 RFG/OXY 910ct-10% Eth    174 RFG/OXY 910ct-10% Eth
VT    180 RFG/OXY 930ct-5.7% Eth VOC CTRL    181 RFG/OXY 930ct-5.7% Eth VT VOC
CTRL    182 RFG/OXY 920ct-5.7% Eth VOC CTRL    183 RFG/OXY 920ct-5.7% Eth VT VOC
CTRL    184 RFG/OXY 910ct-5.7% Eth VOC CTRL    185 RFG/OXY 910ct-5.7% Eth VT VOC
CTRL    186 RFG/OXY 930ct-5.7% Eth    187 RFG/OXY 930ct-5.7%Eth VT    188 E85
(85% Ethanol, 15% NL87)    191 RFG/OXY 920ct-5.7%Eth VT    192 RFG/OXY
910ct-5.7% Eth    193 RFG/OXY 910ct-5.7%Eth VT    194 5.7% PBOB - Winter    195
10% PBOB - Summer    196 10% PBOB - Winter    197 E70 (70% Ethanol, 30% NL87)   
198 Ethanol E-100    1000 CONV Reg 870ct - 10% Eth    1001 CONV Prem 930ct - 10%
Eth    1002 CONV MidGas 890ct - 10% Eth    1003

 

56

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ATTACHMENT 2 - APPROVED PHYSICAL OIL PRODUCTS

 

CONV PremGas 91Oct - 10% Eth    1004 CBOB    CBOB Retail #E70    E7 Retail #E85
   E8 Ethanol    Ethanol Gasoline Blendstock    Gas Blendstock GAS BLND    GAS
BLND MID RBOB    MID RBOB Retail Midgrade Gasoline    N+ Retail Regular Gasoline
   NL Retail Premium Gasoline    NP PBOB    PBOB Premium CBOB    PREM CBOB PREM
E-10    PREM E-10 RBOB    RBOB REG E-10    REG E-10

Table 9 - Data Warehouse Code JET

 

Product Name

  

Product Abbreviation

Jet Fuel    320 Jet Fuel JP-5    325 JET    JET

Table 10 - Data Warehouse Code KER

 

Product Name

  

Product Abbreviation

Kerosene - High Sulfur - Dyed    219 S500 No.1 LS Kero Dyed    220 S500 No.1 LS
Diesel Clear    221 S500 No.1 LS Kerosene Clear    222 S500 No.1 Prm LS Diesel
Dyed    223 Kerosene-Dyed Ultra-K    224 S500 No. 1 LS Kero/Heating Fuel Dyed   
3035 Retail Kerosene    KE KERO    KERO

Table 11 - Data Warehouse Code LCO

 

Product Name

  

Product Abbreviation

LCO    LCO LS LCO    LS LCO

 

57

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ATTACHMENT 2 — APPROVED PHYSICAL OIL PRODUCTS

Table 12 - Data Warehouse Code RFG

 

Product Name

  

Product Abbreviation

Base 87    100 RFG Reg Gas - 870ct-Oxy/MTBE    101 RFG Reg Gas-87 OCT    102 RFG
Reg Gas-870ct - W/VT    104 RFG Reg Gas-870ct-W/VT VOC CTRL    106 RFG Economy
Gas - 870ct    107 RFG Reg Gas-870ct-VOC CTRL    113 RFG Mid Gas -890ct-Oxy/MBTE
   131 RFG Mid Gas-890CT    133 RFG Mid Gas -890ct-W/VT    134 RFG
MidGas-890ct-W/VT VOC CTRL    135 RFG Mid Gas -890ct-VOC CTRL    136 Oxy RFG
Prem Gas-930ct-13.5RVP    160 Oxy RFG Prem Gas-930ct-9.0RVP    161 RFG Prem
Gas-930CT    162 RFG Prem Gas-92OCTa    163 RFG Prem Gas-920CT W/VT    166 RFG
PremGas-930ct-W/VT    167 RFG Ultra Gas - 940ct    168 RFG Prem Gas-910ct W/VT
   170 RFG Prem Gas-920CT    171 RFG PremGas-930ct-W/VT VOC CTRL    172 RFG
PremGas-910ct-VOC CTRL    173 RFG Prem Gas-91OCT    175 RFG Prem Gas-910CT W/VT
VOC CTRL    176 RFG PremGas920CT-W/VT VOC CTRL    177 RFG PremGas-930ct-VOC CTRL
   178 MID RFG    MID RFG PREM RFG    PREM RFG RFG    RFG

Table 13 - Data Warehouse Code ULK

 

Product Name

  

Product Abbreviation

S15 No 1 ULS Diesel Clr w/detergent    259 # 1 ULSD    270 Ultra Low Sulfur
Diesel - Dyed    271 Ultra LS Diesel w/add -Clear    273 Ultra LS Diesel w/add -
Dyed    274 S15 No.1 ULS Kero Dyed    319 No.1 ULS Diesel - Clear    321 S15
No.1 ULS Kerosene Clear    322 S15 No.1 Prm ULS Diesel Dyed    323 S15 No.1 ULS
Diesel Clear    370 S15 No.1 ULS Diesel Dyed    371 S15 No.1 ULS Diesel w/add
Clear    373 S15 No.1 ULS Diesel w/add Dyed    374 # 1 ULSK    ULSK #1

 

58

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ATTACHMENT 2 – APPROVED PHYSICAL OIL PRODUCTS

Table 14 - Data Warehouse Code ULS

 

Product Name

  

Product Abbreviation

S15 No.2 RdForce Pr ULSD Clr    330 S15 No.2 RdForce Pr ULSD Dyed    331 S15
No.2 Premium ULSD Clear    332 S15 No.2 Premium ULSD Dyed    333 S15 No.2 Prm
80/20 ULSD Clear    334 S15 No.2 Prm 50/50 ULSD Clear    335 S15 No.2 Prm 75/25
ULSD Clear    336 S15 No.2 Prm 70/30 ULSD Clear    338 S15 No.2 Prm 70/30 ULSD
Dyed    339 S15 No.2 Prm 60/40 ULSD Clear    342 S15 No.2 Prm 90/10 ULSD Clear
   343 S15 No.2 80/20 ULSD Dyed w/add    344 S15 No.2 ULS Diesel Clear    350
S15 No.2 ULS Diesel Dyed    351 S15 No.2 ULS Htg Fuel Dyed    352 S15 No.2 75/25
ULS Diesel Clr    353 S15 No.2 80/20 ULS Diesel Clr    354 S15 No.2 50/50 ULS
Diesel Clr    356 S15 No.2 70/30 ULS Diesel Dyed    357 S15 No.2 70/30 ULS
Diesel Clr    358 S15 No.2 Winterized ULSD Clr    360 S15 No.2 85/15 ULSD Clear
   361 S15 No.2 60/40 ULSD Clear    362 S15 No.2 60/40 ULSD Dyed    363 S15 No.2
90/10 ULSD Dyed    364 S15 No.2 Marine Diesel ULS Dyd    381 S15 No.2 Marine
Diesel ULS Clr    382 S15 No.2 Retail ULS Diesel    390 S15 No.2 Wntrz 70/30
ULSD Dyed    398 S15 No 2 RdFrc 70/30 ULSD Clear    3011 S15 No 2 RdFrc 70/30
ULSD Dyed    3012 S15 #2 Retl ULSD-Off Rd-Co Use    3013 S15 No 2 ULS Diesel Clr
w/detergent    3019 S15 No 2 ULS Dsl Dyed w/detergent    3021 S15 No 2 ULSD Clr
w/detrg & cold flow    3030 S15 No.2 Winterized ULSD Dyed    3031 S15 No 2 ULSD
Dyd w/detrg & cold flow    3032 S15 No.2 Wntrzd Retail ULS Diesel    3036 S15 #2
ULS Diesel Clear    3040 S15 #2 ULS Diesel Dyed    3041 S15 No. 2 80/20 ULS
Diesel Dyed    3042 S15 No. 2 90/10 ULS Diesel Clear    3043

 

59

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ATTACHMENT 2 — APPROVED PHYSICAL OIL PRODUCTS

 

Retail #2Diesel    D2 # 2 ULSD    ULSD #2 #2 ULSD Dyed    ULSD #2 Dyed

 

60

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Sprague Operating Resources LLC   ATTACHMENT 3 - Authorized Oil Traders and
Instruments List   Effective Date: 12/5/2011

 

                Logistics

Employee

 

Position

  Group   Commodity1   Barge   Pipeline   Truck   Railcar Steve Scammon   VP,
Trading, Pricing and Customer Service   Oil Trading, Pricing &
Customer Service   Oil/NG   X   X   X   X John Bischoff   VP, Oil Supply   Oil
Supply   Oil/NG   X   X   X   X Steve Dunn   Manager, USAC Light Products   Oil
Supply   Oil/NG   X   x   x   x Kevin Grant   Director, Business Development  
Oil Supply   Oil   X   X   X   X Shamus Martin   Manager, International
Petroleum   Oil Supply   Oil/NG   X   x   x   x Linda Theberge   Oil Trader  
Oil Supply   Oil   X   X   X   X Lindsay Perret   Scheduler   Oil Supply   Oil  
X   X   X   X Ken Fonseca   Senior Scheduler   Oil Supply   Oil   X   X   X   X
Kathy Trottner   Senior Scheduler   Oil Supply   Oil   X   X   X   X Tom
Flaherty2   VP, Sales   Oil Sales   Oil         David Daoust   Managing
Director, Sales & E-Com   Oil Sales   Oil         Jess Albert   Pricing Analyst
  Oil Sales   Oil         Natalie Hebert   Desk Marketing, E-Commerce   Oil
Sales   Oil         Taylor Hudson   Programs Development Manager   Oil Sales  
Oil         Hugh MacNaughton   Manager, Desk Marketing   Oil Sales   Oil        
Krislyn Schweitzer   Desk Marketing, E-Commerce   Oil Sales   Oil        
Kristine Sullivan   Desk Marketing Associate   Oil Sales   Oil         Bob
Gilleco   Managing Director, Sales   Oil Sales   Oil         Barry Botman  
Account Manager   Oil Sales   Oil         Steve Parise   Managing Director,
Wholesale Accounts   Oil Sales   Oil         Mike Zampano   Director, Industrial
& Asphalt Sales   Oil Sales   Oil         Burr Mosher   Director, Bid/Contract
Management   Pricing and Customer
Service   Oil         Torn Van De Water   Director, Pricing & Customer Service  
Pricing and Customer

Service

  Oil        

 

1  Nat Gas authorization only for specifically approved cross commodity
positions

2 Authorization for rack and forward sales can be provided to sales staff as
appropriate

3 In addition to 24 month contract term, term of forward positions limited to 32
months. Longer term contracts (25 to 60 months) require Sprague President (or
designee if President unavailable) approval.

 

61

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Sprague Operating Resources LLC   ATTACHMENT 3 - Authorized Oil Traders and
Instruments List   Effective Date: 12/5/2011

 

               

Trading / Hedging Instruments

Employee

 

Position

 

Group

 

Commodity1

 

NYMEX
Futures

 

ICE
Futures

 

EFP’s

 

Fixed-for-
Float Swap

 

Basis Swap

 

Futures
Options

 

OTC
Options

Steve Scammon   VP, Trading, Pricing and Customer Service  
Oil Trading, Pricing & Customer Service   Oil/NG   X   X   X   X   X   X   X
John Bischoff   VP, Oil Supply   Oil Supply   Oil/NG   X   x   x   x   x   x   x
Steve Dunn   Manager, USAC Light Products   Oil Supply   Oil/NG   X   X   X   X
  X   X   X Kevin Grant   Director, Business Development   Oil Supply   Oil   X
  X   X   X   X     Shamus Martin   Manager, International Petroleum   Oil
Supply   Oil/NG   X   X   X   X   X   X   X Linda Theberge   Oil Trader   Oil
Supply   Oil   X   x   x   x   x   x   x Lindsay Perret   Scheduler   Oil Supply
  Oil   X   X   X   X   X   X   X Ken Fonseca   Senior Scheduler   Oil Supply  
Oil               Kathy Trottner   Senior Scheduler   Oil Supply   Oil          
    Tom Flaherty2   VP, Sales   Oil Sales   Oil               David Daoust  
Managing Director, Sales & E-Com   Oil Sales   Oil   X     X         Jess Albert
  Pricing Analyst   Oil Sates   Oil   X     X         Natalie Hebert   Desk
Marketing, E-Commerce   Oil Sales   Oil   X     x         Taylor Hudson  
Programs Development Manager   Oil Sales   Oil   X     X        
Hugh MacNaughton   Manager, Desk Marketing   Oil Sales   Oil   X     X        
Kristyn Schweitzer   Desk Marketing, E-Commerce   Oil Sales   Oil   X     X    
    Kristine Sullivan   Desk Marketing Associate   Oil Sales   Oil   X     X    
    Bob Gillece   Managing Director, Sales   Oil Sales   Oil               Barry
Botman   Account Manager   Oil Sales   Oil               Steve Parise   Managing
Director, Wholesale Accounts   Oil Sales   Oil               Mike Zampano  
Director, Industrial & Asphalt Sales   Oil Sales   Oil               Burr Mosher
  Director, Bid/Contract Management   Pricing and Customer Service   Oil        
      Tom Van De Water   Director, Pricing & Customer Service   Pricing and
Customer Service   Oil   X     X        

 

1  Nat Gas authorization only for specifically approved cross commodity
positions

2  Authorization for rack and forward sales can be provided to sales staff as
appropriate

3  In addition to 24 month contract term, term of forward positions limited to
32 months. Longer term contracts (25 to 60 months) require Sprague President (or
designee if President unavailable) approval.

 

62

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Sprague Operating Resources LLC   ATTACHMENT 3 - Authorized Oil Traders and
Instruments List   Effective Date: 12/5/2011

 

               

Sales / Marketing / System Supply Instruments

Employee

 

Position

 

Group

 

Commodity1

 

Buy/Sell

 

Thruput

 

Exchange
Agreement

 

3rd Party
Storage

 

Reseller

 

Fixed
Forward

 

UGD

Steve Scammon   VP, Trading, Pricing and Customer Service  
Oil Trading, Pricing & Customer Service   Oil/NG   X   X   X   X       John
Bischoff   VP, Oil Supply   Oil Supply   Oil/NG   X   X   X   X       Steve Dunn
  Manager, USAC Light Products   Oil Supply   Oil/NG   X   X   X   X       Kevin
Grant   Director, Business Development   Oil Supply   Oil   X       X     X  
Shamus Martin   Manager, International Petroleum   Oil Supply   Oil/NG   X   X  
X   X       Linda Theberge   Oil Trader   Oil Supply   Oil   X   X   X   X      
Lindsay Perret   Scheduler   Oil Supply   Oil   X   X   X   X       Ken Fonseca
  Senior Scheduler   Oil Supply   Oil       X   X       Kathy Trottner   Senior
Scheduler   Oil Supply   Oil       X   X       Tom Flaherty2   VP, Sales   Oil
Sales   Oil   X   X   X   X   X   X   X David Daoust   Managing Director, Sales
& E-Com   Oil Sales   Oil   X   X     X   X   X   X Jess Albert   Pricing
Analyst   Oil Sales   Oil   X           X   X Natalie Hebert   Desk Marketing,
E-Commerce   Oil Sales   Oil   X           X   X Taylor Hudson   Programs
Development Manager   Oil Sales   Oil   X           X   X Hugh MacNaughton  
Manager, Desk Marketing   Oil Sales   Oil             X   X Kristyn Schweitzer  
Desk Marketing, E-Commerce   Oil Sales   Oil   X           X   X Kristine
Sullivan   Desk Marketing Associate   Oil Sales   Oil   X           X   X Bob
Gillece   Managing Director, Sales   Oil Sales   Oil   X   X   X   X   X   X   X
Barry Botman   Account Manager   Oil Sales   Oil   X           X   X Steve
Parise   Managing Director, Wholesale Accounts   Oil Sales   Oil   X         X  
X   X Mike Zampano   Director, Industrial & Asphalt Sales   Oil Sales   Oil   X
          X   X Burr Mosher   Director, Bid/Contract Management   Pricing and
Customer Service   Oil   X           X   Tom Van De Water   Director, Pricing &
Customer Service   Pricing and Customer Service   Oil             X   X

 

1  Nat Gas authorization only for specifically approved cross commodity
positions

2  Authorization for rack and forward sales can be provided to sales staff as
appropriate

3  In addition to 24 month contract term, term of forward positions limited to
32 months. Longer term contracts (25 to 60 months) require Sprague President (or
designee if President unavailable) approval.

 

63

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Sprague Operating Resources LLC   ATTACHMENT 3 - Authorized Oil Traders and
Instruments List   Effective Date: 12/5/2011

 

               

Sales / Marketing / System Supply Instruments

Employee

 

Position

 

Group

 

Commodity1

 

Heat Curve

 

Downside
Protection

 

Rack
and
Prompt

 

E-Commerce
Forwards

 

Collar

 

Forward
Basis

Steve Scammon   VP, Trading, Pricing and Customer Service  
Oil Trading, Pricing & Customer Service   Oil/NG             John Bischoff   VP,
Oil Supply   Oil Supply   Oil/NG             Steve Dunn   Manager, USAC Light
Products   Oil Supply   Oil/NG             Kevin Grant   Director, Business
Development   Oil Supply   Oil       X       Shamus Marlin   Manager,
International Petroleum   Oil Supply   Oil/NG             Linda Theberge   Oil
Trader   Oil Supply   Oil             Lindsay Perret   Scheduler   Oil Supply  
Oil             Ken Fonseca   Senior Scheduler   Oil Supply   Oil            
Kathy Trottner   Senior Scheduler   Oil Supply   Oil             Tom Flaherty2  
VP, Sales   Oil Sales   Oil   X   X   X     X   X David Daoust   Managing
Director, Sales & E-Com   Oil Sales   Oil   X   X   X   X   X   X Jess Albert  
Pricing Analyst   Oil Sales   Oil   X   X   X   X   X   X Natalie Hebert   Desk
Marketing, E-Commerce   Oil Sales   Oil   X   x   x   x   x   x Taylor Hudson  
Programs Development Manager   Oil Sates   Oil   X   X   X   X   X   X
Hugh MacNaughton   Manager, Desk Marketing   Oil Sales   Oil   X   X   X   X   X
  X Kristyn Schweitzer   Desk Marketing, E-Commerce   Oil Sales   Oil   X   x  
x   x   x   x Kristine Sullivan   Desk Marketing Associate   Oil Sales   Oil   X
  X   X   X   X   X Bob Gillece   Managing Director, Sales   Oil Sales   Oil   X
  x   x     x   x Barry Botman   Account Manager   Oil Sales   Oil   X   x   x  
  x   x Steve Parise   Managing Director, Wholesale
Accounts   Oil Sales   Oil   X   X   X     X   X Mike Zampano   Director,
Industrial & Asphalt Sales   Oil Sales   Oil   X   X   X     X   X Burr Mosher  
Director, Bid/Contract Management   Pricing and Customer Service   Oil       X  
X     X Tom Van De Water   Director, Pricing & Customer Service   Pricing and
Customer Service   Oil   X   X   X   X   X   X

 

1  Nat Gas authorization only for specifically approved cross commodity
positions

2  Authorization for rack and forward sales can be provided to sales staff as
appropriate

3  In addition to 24 month contract term, term of forward positions limited to
32 months. Longer term contracts (25 to 60 months) require Sprague President (or
designee if President unavailable) approval.

 

64

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Sprague Operating Resources LLC   ATTACHMENT 3 - Authorized Oil Traders and
Instruments List   Effective Date: 12/5/2011

 

               

Contract Term3

Employee

 

Position

 

Group

 

Commodity1

 

Balance

Next day

 

of Month

 

1 Month

Forward

 

2.8 Months

Forward

 

7-12

Months

Forward

 

13-18

Months

Forward

 

19-24

Months

Forward

Steve Scammon   VP, Trading, Pricing and Customer Service   Oil Trading, Pricing
& Customer Service   OiliNG     X   X   X   X   X   X John Bischoff   VP, Oil
Supply   Oil Supply   Oil/NG   X   X   X   X   X   X   X Steve Dunn   Manager,
USAC Light Products   Oil Supply   OiUNG   X   X   X   X   X   X   X Kevin Grant
  Director, Business Development   Oil Supply   Oil   X   X   X   X   X   X   X
Shamus Martin   Manager, International Petroleum   Oil Supply   OiUNG   X   X  
X   X   X   X   X Linda Theborge   Oil Trader   Oil Supply   Oil   X   X   X   X
  X   X   X Lindsay Perret   Scheduler   Oil Supply   Oil   X   X   X   X   X  
X   X Ken Fonseca   Senior Scheduler   Oil Supply   Oil   X   X   X   X      
Kathy Trottner   Senior Scheduler   Oil Supply   Oil   X   X   X   X       Tom
Flaherty2   VP, Sales   Oil Sales   Oil     X   X   X   X   X   X David Daoust  
Managing Director, Sales & E-Com   Oil Sales   Oil     X   X   X   X   X   X
Jess Albert   Pricing Analyst   Oil Sales   Oil     X   X   X   X   X   X
Natalie Hebert   Desk Marketing, E-Commerce   Oil Sales   Oil     X   X   X   X
  X   X Taylor Hudson   Programs Development Manager   Oil Sales   Oil     X   X
  X   X   X   X Hugh MacNaughton   Manager. Deck Marketing   Oil Sales   Oil    
X   X   X   X   X   X Kristyn Schweitzer   Desk Marketing, E-Commerce   Oil
Sales   Oil     X   X   X   X   X   X Kristine Sullivan   Desk Marketing
Associate   Oil Sales   Oil     X   X   X   X   X   X Bob Gilles°   Managing
Director, Sales   Oil Sales   Oil     X   X   X   X   X   X Barry Botman  
Account Manager   Oil Sales   Oil     X   X   X   X   X   X Steve Parise  
Managing Director, Wholesale Accounts   Oil Sales   Oil     X   X   X   X   X  
X Mike Zampano   Director, Industrial & Asphalt Sales   Oil Sales   Oil     X  
X   X   X   X   X Burr Mosher   Director, Bid/Contract Management   Pricing and
Customer Service   Oil     X   X   X   X   X   X Tom Van De Water   Director,
Pricing & Customer Service   Pricing and Customer Service   Oil     X   X  

X

  X   X   X

 

1  Nat Gas authorization only for specifically approved cross commodity
positions

2  Authorization for rack and forward sales can be provided to sales staff as
appropriate

3  In addition to 24 month contract term, term of forward positions limited to
32 months. Longer term contracts (25 to 60 months) require Sprague President (or
designee if President unavailable) approval.

 

65

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Sprague Operating Resources LLC   ATTACHMENT 3 - Authorized Oil Traders and
Instruments List   Effective Date: 12/5/2011

 

              

Logistics/ Storage

Employee

  

Position

  

Commodity

  

Transport

  

Storage1

Brian Weep    VP, Natural Gas    NG    X    x Sorter Pasalic    Director, Nat
Gas Pricing and Supply    NG    X    X Bill Nvahnv    Manager, Financial Trading
   NG    X    X Tom Withka    Trader    NG    X    X Shaun Kennedy    Trader   
NG    X    X Andrew Ronald2    Manager, Nat Gas Scheduling & Logistics    NG   
X    X Marlene Manning    Team Lender, Nat Goo Logistics    NG    X    X Elaine
Moron    Team Leader, Not Gas Logistics    NG    X    X Dan Smith    Director,
Not Gas Opt; & Business Analysis    NG    X    x Tana Ream    Manager, Nat Otis
Forecasting & Asset Mgmt    NO    X    x Mark Roberts    Managing Director, Not
Gas Sales & Marketing    NG       Claude Peyrot    Director. Nat Gas Mid Market
Sales    NG       Dave Pickens    Director, Nat Gas Commercial & Industrial
Stiles    NG       Kevin Piotrowski    Manager. Nat Gas Desk Sales    NG      

 

1   - Storage includes park and loans, firm or interruptible, leased or owned.

2   - Authority can be extended to staff as necessary

3   - Includes NYMEX look-a-likes and Gas Daily options

4   - Includes time, basis, and cross commodity Nat Gas / Oil futures spreads

5   - Transactions with contract term of more than 24 months (term of positions
more than 32 months) can be undertaken as hedges of transportation contracts or
customer sales commitments, noting that sales to customers with contract terms
of over 24 months (term of positions more than 32 months require Sprague
President (or designee if President unavailable) approval.

 

66

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Sprague Operating Resources LLC   ATTACHMENT 3 - Authorized Oil Traders and
Instruments List   Effective Date: 12/5/2011

 

 

            Trading I Hedging Instruments

Employee

 

Position

 

Commodity

  Index/
Fixed Price
Futures   Physical   Index
Physicals   Swing
Swaps   Financial
Basis   Physicals
Basis   Fixed-for-
Float
Swaps   Futures
Options   OTC
Options3   Spreads4 Brian Meg   VP, Natural Goa   NG   X   X   X   X   X   X   X
  X   X   X Senor Pasalic   Director, Nat Gus Pricing and Supply   NG   X   x  
x   x   X   X   X   X   X   X Bill Nvahay   Manager, Financial Trading   NG   X
  X   X   X       X   X   X   X Tom Wilhka   Trader   NG   X   X   X   X   X   X
  X   X   X   X Shaun Kennedy   Trader   NG   X   X   X   X   X   X   X   X   X
  X Andrew Ronald2   Manager, Nat Gas Scheduling & Logistics   NG     X   X    
X   X   X       Marlene Manning   Team Loader, Nat Gas Logistics   NG     X   X
              Elaine Moran   Team Leader, Nat Gas Logistics   NG     X   X      
        Dan Smith   Director, Nat Gas Cps & Business Analysis   NG     X   X    
          Tana Ream   Manager, Nat Gas Forecasting & Asset Wall   NG            
        Mark Roberts   Managing Director, Nat Gas Sales & Marketing   NC        
            Claude Peyrot   Director, NM Gas Mid Market Sales   NG              
      Dave Pickens   Director, Nat Gas Commercial & Industrial Sales   NG      
              Kevin Piotrowski   Manager, Nat Gas Desk Salon   NG              
     

 

1   - Storage includes park and loans, firm or interruptible, leased or owned.

2   - Authority can be extended to staff as necessary

3   - Includes NYMEX look-a-likes and Gas Daily options

4   - Includes time, basis, and cross commodity Nat Gas I Oil futures spreads

5   - Transactions with contract term of more than 24 months (term of positions
more than 32 months) can be undertaken as hedges of transportation contracts or
customer sales commitments, noting that sales to customers with contract terms
of over 24 months (term of positions more than 32 months require Sprague
President (or designee if President unavailable) approval.

 

67

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Sprague Operating Resources LLC   ATTACHMENT 3 - Authorized Oil Traders and
Instruments List   Effective Date: 12/5/2011

 

              

Sales / Marketing Instruments

Employee

  

Position

  

Commodity

  

Forwards

  

Index

  

Trigger

  

Cap

  

Collar

  

Accelerated

Collar

Brian Wengo    VP, Natural Gas    NC    X    x    x    x    X    x Senor Pasalic
   Director, Nat Goa Pricing and Supply    NG    x    x    x    x    x    x Bill
Nvahay    Manager. Financial Trading    NG                   Tom Withka   
Trader    NG                   Shaun Kennedy    Trader    NG                  
Andrew Ronald2    Manager, Not Gas Scheduling & Logistics    NG               
   Marlene Manning    Team Leader. Nat Gas; Logistics    NG                  
Elaine Moran    Team Leader, Nat Gas Logistics    NG                   Dan Smith
   Director, Nat Gas Opt; & Business Analysis    NG                   Tana Ream
   Pi/tanager, Nat Goa Forecasting & Asset Mgm’t    NG                   Mark
Roberto    Managing Director, Not Can Sales & Marketing    NG    x    x    x   
x    x    x Claude Peyrot    Director, Nat Gas Mid Market Sales    NG    x    x
   x    x    x    x Dave Pickens    Director, Nat Can Commercial & Industrial
Sales    NG    x    x    x    x    x    x Kevin Piotrowski    Manager, Nat Can
Desk Sales    NG    x    x    x    x    x    x

 

1 - Storage includes park and loans, firm or interruptible, teased or owned.

2 - Authority can be extended to staff as necessary

3 - Includes NYMEX look-a-likes and Gas Daily options

4 - Includes time, basis, and cross commodity Nat Gas / Oil futures spreads

5 - Transactions with contract term of more than 24 months (term of positions
more than 32 months) can be undertaken as hedges of transportation contracts or
customer sales commitments, noting that sales to customers with contract terms
of over 24 months (term of positions more than 32 months require Sprague
President (or designee if President unavailable) approval.

 

68

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Sprague Operating Resources LLC   ATTACHMENT 4 - Authorized Oil Traders and
Instruments List   Effective Date: 12/5/2011

 

               Contract Term5

Employee

  

Position

  

Commodity

  

Balance
Next Day

  

of
Month

  

1 Month
Forward

  

2.32
Months
Forward

Brian Weego    VP, Natural Gas    NG    X    X    X    X Senor Pasalic   
Director, Nat Gat; Pricing and Supply    NO    X    X    X    X Bill Nyahay   
Manager, Financial Trading    NO    X    X    X    X Tons Withka    Trader    NG
   X    X    X    X Shaun Kennedy    Trader    NG    X    X    X    X Andrew
Ronald2    Manager, Nat Otto Scheduling & Logistics    NO    X    X      
Marlene Manning    Team Leader, Nat Gat Logistics    NG    X    X       Elaine
Moran    Team Leader. Nat Gas Logistics    NG    X    X       Dan Smith   
Director, Nat Gas Opt & Business Analysis;    NO    X    X    X    X Tana Roam
   Manager, Nat Gas Forecasting & Asset Mgm’t    NO    X    X       Mark Roberts
   Managing Director, Nat One Sales & Marketing    NG    X    X    X    X Claude
Peyrot    Director, Nat GU Mid Market Sales    NO    X    X    X    X Dave
Pickens    Director, Nat Gas Commercial & Industrial Sales    NO    X    X    X
   X Kevin Piotrowski    Manager, Nat Gas Desk Sales    NG    X    x    x    x

 

1   - Storage includes park and loans, film or interruptible, leased or owned.

2   - Authority can be extended to staff as necessary

3   - Includes NYMEX look-a-likes and Gas Daily options

4   - Includes time, basis, and cross commodity Nat Gas I Oil futures spreads

5   - Transactions with contract term of more than 24 months (tens of positions
more than 32 months) can be undertaken as hedges of transportation contracts or
customer sales commitments, noting that sales to customers with contract terms
of over 24 months (term of positions more than 32 months require Sprague
President (or designee if President unavailable) approval.

 

69

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Sprague Energy Corp.   ATTACHMENT 5 - Approved Materials handling Products  
Effective Date: 12/5/2011

 

 

-PRODUCT NAME

  

Avery Lane

  

Everett

  

Oswego

  

Portland Merrill

  

Providence

  

Quincy

  

River Road

  

Searsport

  

South Portland

  

TRT

Aggregates             X             X       Asphalt    X    X    X       X   
   X    X    X    Aviation Fuel    X                         X    Calcium
Chloride          X                X       Caustic Soda                      X
   X       X Cement                      X    X       China Clay               
         X    X    Coal             X    X          X    X    Furnace Slag      
      X             X       Government Petroleum                   X          X
   Gypsum             X          X    X       Heavy Lift             X         
   X       Iron Oxide             X             X       Logs             X      
      X       Lumber             X             X       Paper (rolled or bundled)
            X             X       Petcoke             X             X       Pulp
(baled)             X             X       Recycled Oil                      X   
      Salt             X    X       X    X    X    Scrap             X         
   X       Seaweed             X             X       Sugar             X      
            Tallow                      X          Tapioca             X      
      X       Urea             X             X       Veg Oil                  
            X Wood Pellets - Bagged             X             X      
Wood Pellets - Bulk                         X       Wood Chips - Bulk         
            X    X      

 

70

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Exhibit J

to Credit Agreement

[Reserved]

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

Exhibit K

to Credit Agreement

FORM OF CASH COLLATERAL DOCUMENTATION FOR LETTERS OF CREDIT

FOR VALUE RECEIVED, the undersigned, SPRAGUE OPERATING RESOURCES LLC (the
“Borrower”) hereby assigns, transfers and pledges to JPMORGAN CHASE BANK, N.A.,
as administrative agent for the benefit of the Secured Parties (the
“Administrative Agent”) under the Credit Agreement, dated as of October 30, 2013
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Sprague Operating Resources LLC, as Borrower, the
Lenders from time to time parties thereto, the Administrative Agent, and the
other agents parties thereto, and grants to the Administrative Agent for the
ratable benefit of the Secured Parties a security interest in, all of the
Borrower’s right, title and interest in and to the following accounts maintained
by the Administrative Agent (the “Accounts”):

 

[                                         ]

   [                                         ]   
[                                         ]

[                                         ]

   [                                         ]   
[                                         ]

or such other number as may be subsequently assigned or maintained by the
undersigned with the Administrative Agent, together with any subaccounts
relating thereto and together with all monies or proceeds due or to become due
thereunder or deposited therein, any and all additional or renewed deposit of
said monies or proceeds, any and all property of whatever kind and nature in the
account or in which such monies or proceeds may be invested, and all sums due or
to become due on, or with respect to, such account by way of interest, dividend,
bonus, redemption or otherwise and the proceeds of all of the foregoing (all
hereinafter collectively known as the “Collateral”).

Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement.

This assignment, pledge, transfer and security interest is given and made to the
Administrative Agent by the Borrower as collateral security for the Obligations.

The Borrower represents, warrants and covenants that: (i) the Collateral is not
subject to any other security interest, except in favor of the Administrative
Agent and as permitted under the Credit Agreement; and (ii) the Borrower shall
not, at any time during which any Obligations are outstanding, assign, pledge or
grant a security interest in any of the Collateral, except as permitted under
the Credit Agreement.

The Borrower further represents and warrants that (a) it is the legal owner of
the Collateral, subject to this agreement and Liens permitted under the Credit
Agreement; (b) it has full power, authority and legal right to pledge and grant
the security interests in and liens upon the Collateral; (c) this agreement has
been duly authorized, executed and delivered by it and constitutes its legal,
valid and binding obligation enforceable in accordance with its terms; (d) no
consent of any other person (including, without limitation, its stockholders or
creditors) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority, domestic or foreign, is required to be obtained by
it in connection with the execution, delivery and performance of this agreement,
other than as set forth in Section 5.4 of the Credit Agreement; and (e) the
execution, delivery or performance of this agreement (i) will not violate any
Requirement of Law, including any rules or regulations promulgated by the FERC,
in each case to the

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

extent applicable to or binding upon the Borrower, except where such violation
could not reasonably be expected to have a Material Adverse Effect and except as
set forth in Section 5.4 of the Credit Agreement and (ii) will not result in, or
require, the creation or imposition of any Lien on any of its properties or
revenues pursuant to any such Requirement of Law or Contractual Obligation
(other than as created hereunder and Liens permitted by the Credit Agreement).

The Borrower hereby irrevocably authorizes and empowers the Administrative Agent
at any time, and from time to time, during the existence of any Event of
Default, either in its own name or in the name of the undersigned: (i) to apply,
demand, set-off, collect and receive payment of any and all monies, property or
proceeds due or to become due in respect of the Collateral; (ii) to execute any
and all instruments required for the application, withdrawal or repayment of the
same, or any part thereof; (iii) to insert in any instrument for the application
or withdrawal of funds signed by the undersigned, the date and amount due under
the Collateral or any part thereof and to complete such instrument in any
respect; and (iv) to have dominion and control over the Collateral in all
respects and to deal with the Collateral as the sole holder thereof, and the
undersigned hereby irrevocably constitutes and appoints the Administrative Agent
as its attorney-in-fact to do any and all of the aforesaid. The rights of the
Administrative Agent hereunder are in addition to the rights of the
Administrative Agent under any other security or similar agreement. Without
limitation of the foregoing, the Administrative Agent shall apply any of the
Collateral for the reimbursement of all or any portion of any (i) Reimbursement
Obligation with respect to any Letter of Credit that has been Cash
Collateralized or (ii) L/C Participation Obligation of any Defaulting Lender
with respect to any Letter of Credit that has been Cash (100%) Collateralized,
in each case, pursuant to the terms of the Credit Agreement and then to any
other Obligations.

The Borrower will, at its own expense, promptly execute and deliver all further
instruments and documents, and take all further action, including, without
limitation, the execution and filing of financing statements and amendments to
financing statements under the Uniform Commercial Code that the Administrative
Agent may from time to time reasonably deem necessary or desirable in order to
create, perfect and protect any security interest granted or purported to be
granted hereby or to enable the Administrative Agent to enforce its rights and
remedies hereunder with respect to any Collateral. The Administrative Agent may,
at its discretion and without the undersigned’s signature where permitted by
applicable law, file one or more financing statements and amendments to
financing statements under the Uniform Commercial Code naming the undersigned as
debtor and the Administrative Agent as secured party and indicating therein the
types or describing the items of Collateral herein specified; provided, however
that, the Administrative Agent shall, if practical under the circumstances,
provide to the Borrower three (3) Business Days prior written notice of the
right to review any such filings and the Administrative Agent shall provide the
Borrower with copies of such filings.

So long as no Default or Event of Default shall have occurred and be continuing,
the Administrative Agent shall release to the Borrower any cash from time to
time held in the Accounts not required to be Cash Collateralized or Cash
(100%) Collateralized pursuant to the Credit Agreement, including without
limitation, pursuant to Sections 3.4(b), 3.6(c), 4.7, 4.18 and 9, as applicable,
and upon the indefeasible payment in full in cash of all Obligations, the
termination of all Letters of Credit, and the termination of all Commitments,
the Administrative Agent shall release all cash held in the Accounts and
delivery of such cash shall discharge in full the Administrative Agent’s
obligations to the Borrower with respect to release and return of the
Collateral.

The Borrower agrees to indemnify the Administrative Agent for any costs and
expenses, including, without limitation, reasonable counsel’s fees and
disbursements, which the Administrative Agent may incur in connection with any
enforcement of its security interest, liens and other rights hereunder.

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

No delay on the Administrative Agent’s part in exercising any power or right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any power or right hereunder preclude other or further exercise
thereof or the exercise of any other power or right. The rights, remedies and
benefits herein expressly specified are cumulative and not exclusive of any
rights, remedies or benefits that the Administrative Agent may otherwise have.
This agreement shall be binding upon the assigns and successors of the Borrower
(except that the Borrower may not assign this agreement without the
Administrative Agent’s prior written consent) and shall constitute a continuing
agreement, applying to all future as well as existing transactions in connection
with the Credit Agreement or any Obligations, whether or not of the character
contemplated as of the date of this agreement.

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK. BY ITS EXECUTION HEREOF, THE BORROWER HEREBY SUBMITS TO THE
JURISDICTION OF THE FEDERAL AND STATE COURTS LOCATED IN THE COUNTY OF NEW YORK,
NEW YORK AND CONSENTS TO THE SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING
BROUGHT AGAINST IT BY THE ADMINISTRATIVE AGENT BY MEANS OF REGISTERED MAIL TO
THE ADDRESS OF THE UNDERSIGNED SET FORTH IN SECTION 11.2 OF THE CREDIT
AGREEMENT. NOTHING HEREIN, HOWEVER, SHALL PREVENT SERVICE OF PROCESS BY ANY
OTHER MEANS RECOGNIZED AS VALID BY LAW. NONE OF THE TERMS HEREOF MAY BE WAIVED,
ALTERED OR AMENDED EXCEPT BY A WRITING DULY SIGNED BY THE BORROWER. IF ANY TERMS
HEREOF SHALL BE HELD TO BE INVALID, ILLEGAL OR UNENFORCEABLE, THE VALIDITY OF
ALL OTHER TERMS SHALL IN NO WAY BE AFFECTED THEREBY.

THE BORROWER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING UNDER OR RELATING TO THIS AGREEMENT.

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

IN WITNESS WHEREOF, the Borrower has caused this agreement to be executed this
         day of             ,             .

 

SPRAGUE OPERATING RESOURCES LLC By:       Name:   Title:

ACKNOWLEDGED AND AGREED:

 

 

JPMORGAN CHASE BANK, N.A.,

  as Administrative Agent

  By:         Name:     Title:

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

Exhibit L

to Credit Agreement

FORM OF MORTGAGE AND SECURITY AGREEMENT

 

After recording please return to:

 

  

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Christopher Garcia

   Quincy, Massachusetts       

MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, AND FIXTURE FILING

made by

SPRAGUE OPERATING RESOURCES LLC (formerly known as SPRAGUE ENERGY CORP.), as
Mortgagor,

to

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and Mortgagee

Dated as of September     , 2013

 

 

 

  Location:  

 

      

 

      

 

      

 

  County   

[Maximum Principal Amount of Obligations. Notwithstanding anything contained
herein to the contrary, the maximum principal amount of Obligations secured by
this Mortgage at the time of execution hereof or which under any contingency may
become secured by this Mortgage at any time hereafter is                     
plus all interest payable on such principal amount under the Credit Agreement
and all amounts expended by Mortgagee in accordance with the Credit Agreement
and this Mortgage for the payment of (a) taxes, charges, or assessments which
may be imposed by law upon the premises; (b) premiums on insurance policies
covering the premises; (c) expenses incurred in upholding the lien of this
Mortgage, including, but not limited to (1) the expenses of any litigation to
prosecute or defend the rights and lien created by this Mortgage; (2) any
amount, cost or charges to which the Mortgage becomes subrogated, upon payment,
whether under recognized principles of law or equity, or under express statutory
authority and (3) interest at the rate of interest provided for in the Credit
Agreement.]

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

MORTGAGE, SECURITY AGREEMENT,

ASSIGNMENT OF LEASES AND RENTS, AND FIXTURE FILING

THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, AND FIXTURE
FILING, dated as of September     , 2013, is made by SPRAGUE OPERATING RESOURCES
LLC, a Delaware limited liability company (formerly known as SPRAGUE ENERGY
CORP.) (“Mortgagor”), whose address is Two International Drive, Portsmouth, New
Hampshire, to JPMORGAN CHASE BANK, N.A., as administrative agent under the
Credit Agreement referred to below (in such capacity, together with its
successors and assigns, “Mortgagee”), whose address is 277 Park Avenue, 22nd
Floor, New York, New York 10172. References to this “Mortgage” or “Security
Document” shall mean this instrument and any and all renewals, modifications,
amendments, supplements, extensions, consolidations, substitutions, spreaders
and replacements of this instrument.

BACKGROUND

A. Reference is made to that certain Credit Agreement, dated as of the date
hereof (as amended, supplemented or otherwise modified from time-to-time, the
“Credit Agreement”), with Mortgagor as Borrower, the several lenders party
thereto from time to time (the “Lenders”), JPMorgan Chase Bank, N.A., as
administrative agent, JPMorgan Chase Bank, N.A. and BNP Paribas, as
co-collateral agents, and certain other Persons named as agents therein as a
party thereto. The terms of the Credit Agreement are incorporated by reference
in this Mortgage as if the terms thereof were fully set forth herein. In the
event of any conflict between the provisions of this Mortgage and the provisions
of the Credit Agreement, the applicable provisions of the Credit Agreement shall
govern and control.

B. Pursuant to the Credit Agreement, the Lenders have severally agreed to make
loans to and participate in letters of credit issued for the account, and the
Issuing Lenders have agreed to issue letters of credit for the account of, the
Mortgagor upon the terms and subject to the conditions set forth therein.

C. It is a condition precedent to the obligation of the Lenders to make their
respective Loans and the Issuing Lenders to issue their Letters of Credit to or
for the account of the Mortgagor under the Credit Agreement that Mortgagor shall
have executed and delivered this Mortgage, as security for the Obligations, to
Mortgagee for the ratable benefit of the Secured Parties.

GRANTING CLAUSES

For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Mortgagor agrees that to secure complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations;

SUBJECT TO THE TERMS AND CONDITIONS HEREIN, MORTGAGOR DOES HEREBY IRREVOCABLY
MORTGAGE, GRANT, BARGAIN, SELL, PLEDGE, ASSIGN, WARRANT, TRANSFER AND CONVEY TO
MORTGAGEE, IN EACH CASE FOR THE RATABLE BENEFIT OF THE SECURED PARTIES, THE
FOLLOWING PROPERTY, RIGHTS, INTERESTS AND ESTATES NOW OWNED, OR HEREAFTER
ACQUIRED BY MORTGAGOR:

(a) All of the estate, right, title, claim or demand whatsoever of Mortgagor, in
possession or expectancy, in and to those certain tracts of land, described in
Exhibit A, attached hereto and made a part hereof (the “Land”);

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

(b) The rights, interests and estates created under those certain servitudes,
easements, rights of way, privileges, franchises, prescriptions, licenses,
leases, permits and/or other rights described in Exhibit A, attached hereto and
made a part hereof, and all of Mortgagor’s right, title and interest (whether
now owned or hereafter acquired by operation of Law or otherwise) in any
servitudes, easements, rights of way, privileges, franchises, prescriptions,
licenses, leases, permits and/or other rights in and to any land, in any county
and section shown on Exhibit A even though they may be incorrectly described in
or omitted from such Exhibit A relating to the Land, together with any
amendments, renewals, extensions, supplements, modifications or other agreements
related to the foregoing, and further together with any other servitudes,
easements, rights of way, privileges, prescriptions, franchises, licenses,
permits and/or other rights (whether presently existing or hereafter created and
whether now owned or hereafter acquired by operation of Law or otherwise) used,
held for use in connection with, or in any way related to the Land;

(c) All of Mortgagor’s right, title and interest (whether now owned or hereafter
acquired by operation of Law or otherwise) in and to any and all buildings,
improvements, structures, fixtures, or any other real property (collectively,
the “Improvements”; together with the Land, the “Real Estate”) located on the
Land;

(d) All rights, estates, powers and privileges appurtenant to the rights,
interests and properties set forth in clauses (a)-(c) above;

(e) without limiting any other provision of these granting clauses, all right,
title and interest of Mortgagor in, to and under all easements, rights of way,
licenses, operating agreements, abutting strips and gores of land, streets,
ways, alleys, passages, sewer rights, waters, water courses, water and flowage
rights, development rights, air rights, mineral and soil rights, plants,
standing and fallen timber, and all estates, rights, titles, interests,
privileges, licenses, tenements, hereditaments and appurtenances belonging,
relating or pertaining to the Real Estate, and any reversions, remainders,
rents, issues, profits and revenue thereof and all land lying in the bed of any
street, road or avenue, in front of or adjoining the Land to the center line
thereof;

(f) all right, title and interest of Mortgagor in, to and under all of the
fixtures, chattels, business machines, machinery, apparatus, equipment,
furnishings, fittings, appliances and articles of personal property of every
kind and nature whatsoever, and all appurtenances and additions thereto and
substitutions or replacements thereof (together with, in each case, attachments,
components, parts and accessories) currently owned or subsequently acquired by
Mortgagor and now or subsequently attached to, or contained in or used or usable
in any way in connection with any operation or letting of the Mortgaged Property
(as defined below), including but without limiting the generality of the
foregoing, all screens, awnings, shades, blinds, curtains,

 

-2-

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

draperies, artwork, carpets, rugs, storm doors and windows, furniture and
furnishings, heating, electrical, and mechanical equipment, lighting,
switchboards, plumbing, ventilating, air conditioning and air-cooling apparatus,
refrigerating, and incinerating equipment, escalators, elevators, loading and
unloading equipment and systems, stoves, ranges, laundry equipment, cleaning
systems (including window cleaning apparatus), telephones, communication systems
(including satellite dishes and antennae), televisions, computers, sprinkler
systems and other fire prevention and extinguishing apparatus and materials,
security systems, motors, engines, machinery, pipes, hoses, pumps, tanks,
loading racks, wharves, docks, pipelines, conduits, appliances, fittings and
fixtures of every kind and description held in connection with the operation of,
and located on, the Mortgaged Property, and all licenses and permits of whatever
nature, including, but not limited to, that now or hereafter used or held for
use in connection with the Mortgaged Property, and all renewals or replacements
of the foregoing or substitutions for the foregoing provided that the foregoing
items described in this clause (f) shall not include any rights or property
excluded as collateral in the Security Agreement or the Credit Agreement (all of
the foregoing non-excluded rights or property in this paragraph (f) being
referred to as the “Equipment”);

(g) all right, title and interest of Mortgagor in and to all substitutes and
replacements of, and all additions and improvements to, the Mortgaged Property
and the Equipment, subsequently acquired by Mortgagor (or released from the lien
of any equipment financing after the date hereof) or constructed, assembled or
placed by Mortgagor on the Mortgaged Property, immediately upon such
acquisition, release, construction, assembling or placement, including, without
limitation, any and all building materials whether stored at the Mortgaged
Property or offsite, and, in each such case, without any further deed,
conveyance, “assignment or other act by Mortgagor provided that the foregoing
items described in this clause (g) shall not include any rights or property
excluded as collateral in the Security Agreement or the Credit Agreement;

(h) all right, title and interest of Mortgagor in, to and under all leases,
subleases, underlettings, concession agreements, management agreements, licenses
and other similar agreements granting to a third party a right to use or
occupancy of the Mortgaged Property or the Equipment or any part thereof, now
existing or subsequently entered into by Mortgagor and whether written or oral
and all guarantees of any of the foregoing (collectively, as any of the
foregoing may be amended, restated, extended, renewed or modified from time to
time, the “Leases”), and all rights of Mortgagor in respect of cash and
securities deposited thereunder and the right to receive and collect the
revenues, income, rents, issues and profits thereof, together with all other
rents, royalties, issues, profits, revenue, income and other benefits arising
from the use and enjoyment of the Mortgaged Property (as defined below)
(collectively, the “Rents”);

(i) all unearned premiums under insurance policies now or subsequently obtained
by Mortgagor relating to the Mortgaged Property or Equipment and Mortgagor’s
interest in and to all proceeds of any such insurance policies (including title
insurance policies) including the right to collect and receive such proceeds,
subject to the provisions relating to insurance generally set forth below; and
all awards and other compensation, including the interest payable thereon and
the right to collect and receive the same, made to the present or any subsequent
owner of the Mortgaged Property or Equipment for the taking by eminent domain,
condemnation or otherwise, of all or any part of the Mortgaged Property or any
easement or other right therein subject to the provisions set forth below; and

 

-3-

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

(j) to the extent the grant of a Lien therein is not prohibited under the
applicable contract, consent, license or other item unless the appropriate
consent has been obtained and not prohibited by applicable law, all right, title
and interest of Mortgagor in and to (i) all contracts from time to time executed
by Mortgagor or any manager or agent on its behalf relating to the ownership,
construction, maintenance, repair, operation, occupancy, sale or financing of
the Mortgaged Property or Equipment or any part thereof and all agreements and
options relating to the purchase or lease of any portion of the Mortgaged
Property or any property which is adjacent or peripheral to the Mortgaged
Property which are appurtenant to the ownership of the Mortgaged Property,
together with the right to exercise such options and all leases of Equipment,
(ii) all consents, licenses, building permits, certificates of occupancy and
other governmental approvals relating to construction, completion, occupancy,
use or operation of the Mortgaged Property or any part thereof, and (iii) all
drawings, plans, specifications and similar or related items relating to the
Mortgaged Property.

(All of the foregoing property and rights and interests now owned or held or
subsequently acquired by Mortgagor and described in, and not excluded from, the
foregoing clauses (a) through (j) are collectively referred to as the “Mortgaged
Property”).

TO HAVE AND TO HOLD the Mortgaged Property and the rights and privileges hereby
granted unto Mortgagee, its successors and assigns for the uses and purposes set
forth, until the Obligations are fully paid and fully performed and the
Commitments no longer remain in effect.

TERMS AND CONDITIONS

Mortgagor further represents, warrants, covenants and agrees with Mortgagee and
the Secured Parties as follows:

1. Defined Terms. Capitalized terms used herein (including in the “Background”
and “Granting Clauses” sections above) and not otherwise defined herein shall
have the meanings ascribed thereto in the Credit Agreement. References in this
Mortgage to the “Default Rate” shall mean the interest rate applicable pursuant
to Section 4.2(c)(iii) of the Credit Agreement.

2. Warranty of Title. Mortgagor warrants that it has good record title in fee
simple to the Real Estate, and good title to the rest of the Mortgaged Property,
subject only to the matters that are set forth in Schedule B of the title
insurance policy or policies being issued to Mortgagee to insure the lien of
this Mortgage and any other lien or encumbrance as permitted by Section 8.3 of
the Credit Agreement (collectively, the “Permitted Exceptions”). Mortgagor shall
warrant, defend and preserve such title and the lien of this Mortgage against
all claims of all persons and entities (not including the holders of the
Permitted Exceptions). Mortgagor represents and warrants that it has the right
and authority to mortgage the Mortgaged Property.

 

-4-

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

3. Payment Pursuant to the Loan Documents. Mortgagor shall pay and perform the
Obligations which it is obligated to pay and perform at the times and places,
and in the manner specified, in the Loan Documents to which it is a party.

4. Requirements. (a) Subject to the applicable provisions of the Credit
Agreement, Mortgagor shall promptly comply with, or cause to be complied with,
and conform to all Requirements of Law of all Governmental Authorities which
have jurisdiction over the Mortgaged Property, and all covenants, restrictions
and conditions now or later of record which may be applicable to any of the
Mortgaged Property, or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration, repair or reconstruction of any of the
Mortgaged Property, except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b) From and after the date of this Mortgage, Mortgagor shall not by act or
omission permit any building or other improvement on any premises not subject to
the lien of this Mortgage or owned or operated by Mortgagor or any other Loan
Party to rely on the Mortgaged Property or any part thereof or any interest
therein in order to fulfill any Requirement of Law; provided, that the foregoing
shall not prevent, restrict or otherwise limit any such reliance to the extent
existing on of the date of this Mortgage to fulfill any Requirement of Law.
Mortgagor shall not by act or omission impair in any material respect the
integrity of any of the Real Estate as a single zoning lot(s) and tax lot(s)
separate and apart from all other premises not owned or operated by Mortgagor or
another Loan Party and are not covered by a mortgage or deed of trust in favor
of Mortgagee.

5. Payment of Taxes and Other Impositions. (a) Except as permitted by
Section 7.12 of the Credit Agreement, promptly when due or prior to the date on
which any fine, penalty, interest or cost may be added thereto or imposed,
Mortgagor shall pay and discharge all real property taxes and assessments of
every kind and nature, all charges for any easement or agreement maintained for
the benefit of any of the Mortgaged Property, all general and special real
property assessments, levies, permits, inspection and license fees, all water
and sewer rents and charges, vault taxes, and all other public charges even if
unforeseen or extraordinary, imposed upon or assessed against or which may
become a lien on any of the Mortgaged Property, or arising in respect of the
occupancy, use or possession thereof, together with any penalties or interest on
any of the foregoing (all of the foregoing are collectively referred to as
“Impositions”). If there is an Event of Default which is continuing, Mortgagor
shall within thirty (30) days after each due date deliver to Mortgagee
(i) original or copies of receipted bills and cancelled checks evidencing
payment of such Imposition if it is a real estate tax or other public charge and
(ii) evidence reasonably acceptable to Mortgagee showing the payment of any
other such Imposition. If by law any Imposition, at Mortgagor’s option, may be
paid in installments (whether or not interest shall accrue on the unpaid balance
of such Imposition), Mortgagor may elect to pay such Imposition in such
installments and shall be responsible for the payment of such installments with
interest, if any.

(b) If the Mortgagor has failed to pay an Imposition within thirty (30) days of
when it is due, Mortgagee with notice to Mortgagor may pay any such Imposition
at any time thereafter. Any sums paid by Mortgagee in discharge of any
Impositions shall be payable on demand by Mortgagor to Mortgagee and the amount
so paid shall be added to the Obligations.

 

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Any sums paid by Mortgagee in discharge of any Impositions shall be (i) a lien
on the Mortgaged Property secured hereby prior to any right or title to,
interest in, or claim upon the Mortgaged Property subordinate to the lien of
this Mortgage, and (ii) payable on demand by Mortgagor to Mortgagee together
with interest at the Default Rate.

(c) Mortgagor shall have the right before any delinquency occurs to contest or
object in good faith to the amount or validity of any Imposition by appropriate
legal proceedings, but such right shall not be deemed or construed with respect
to any material Imposition, in any way as relieving, modifying, or extending
Mortgagor’s covenant to pay any such material Imposition at the time and in the
manner provided in this Section unless (i) Mortgagor has given prior written
notice to Mortgagee of Mortgagor’s intent so to contest or object to a material
Imposition, and (ii) Mortgagor shall either (x) furnish a good and sufficient
bond or surety as requested by and reasonably satisfactory to Mortgagee or
(y) maintain adequate reserves in conformity with GAAP on Mortgagor’s books, in
each case in the amount of the material Imposition which is being contested plus
any interest and penalty which may be imposed thereon and which could become a
lien against the Real Estate or any part of the Mortgaged Property.

6. Insurance. (a) Subject to the applicable provisions of the Credit Agreement,
Mortgagor shall maintain or cause to be maintained on all of the Mortgaged
Property, in such form and in such amounts as, from time to time, shall be
acceptable to Mortgagee, in its sole reasonable discretion, the following
insurance:

(i) property insurance against loss or damage by fire, lightning, windstorm,
tornado, water damage, flood, earthquake and by such other further risks and
hazards as now are or subsequently may be covered by an “all risk” policy or a
fire policy covering “special” causes of loss, and the policy limits shall be
automatically reinstated after each loss in amounts customary for companies in
similar businesses similarly situated;

(ii) commercial general liability insurance under a policy including the “broad
form CGL endorsement” (or which incorporates the language of such endorsement),
covering claims for personal injury, bodily injury or death, or property damage
occurring on, in or about the Mortgaged Property with respect to injury and
property damage relating to any one occurrence in amounts customary for
companies in similar businesses similarly situated; and

(iii) such other insurance in such amounts as Mortgagee may reasonably request
from time to time against loss or damage by any other risk commonly insured
against by persons occupying or using like properties for similar businesses in
the locality or localities in which the Real Estate is situated.

(b) Each property insurance policy shall (x) be provided by insurance companies
which have a Best’s rating of at least “AXII”, (y) provide that it shall not be
cancelled, non-renewed or materially amended without at least thirty (30) days’
prior written notice to Mortgagee, and (z) with respect to all property
insurance, provide for deductibles in an amount reasonably satisfactory to
Mortgagee, and contain a “Replacement Cost Endorsement” without any deduction
made for depreciation and with no co-insurance penalty (or attaching an agreed
amount endorsement reasonably satisfactory to Mortgagee), without contribution,
under a

 

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“standard” or “New York” mortgagee clause reasonably acceptable to Mortgagee.
Liability insurance policies shall name Mortgagee for the ratable benefit of the
Secured Parties, as an additional insured and contain a waiver of subrogation
against Mortgagee and the other Secured Parties. Each policy of property
insurance shall expressly provide that any proceeds which are payable to
Mortgagee shall be paid by check payable to the order of Mortgagee only and
requiring the endorsement of Mortgagee only.

(c) Mortgagor shall deliver to Mortgagee a certificate of such insurance
reasonably acceptable to Mortgagee. Mortgagor shall (i) pay as they become due
all premiums for such insurance and (ii) not later than fifteen (15) days prior
to the expiration of each policy to be furnished pursuant to the provisions of
this Section, deliver a renewed policy or policies, or duplicate original or
originals thereof, marked “premium paid,” or accompanied by such other evidence
of payment reasonably satisfactory to Mortgagee.

(d) If Mortgagor is in default of its obligations to insure or deliver any such
prepaid policy or policies, then Mortgagee, at its option and with notice to
Mortgagor, may effect such insurance from year to year, and pay the premium or
premiums therefor, and Mortgagor shall pay to Mortgagee, within thirty (30) days
of Mortgagee’s demand therefor, such premium or premiums so paid by Mortgagee
with interest from the time of payment at the Default Rate.

(e) Mortgagor promptly shall comply with and conform to (i) all material
provisions of each such insurance policy, and (ii) all material requirements of
the insurers applicable to Mortgagor or to any of the Mortgaged Property or to
the use, manner of use, occupancy, possession, operation, maintenance,
alteration or repair of any of the Mortgaged Property. Mortgagor shall not use
or permit the use of the Mortgaged Property in any manner which would not allow
the Mortgagor to obtain the insurance policies required pursuant to this
Section 6.

(f) If the Mortgaged Property, or any material part thereof, shall be destroyed
or damaged, Mortgagor shall give notice thereof to Mortgagee. All insurance
proceeds shall be paid and applied pursuant to Section 4.7(c) of the Credit
Agreement (subject to any right set forth therein of Mortgagor to use the
proceeds to repair or replace the Mortgaged Property). Notwithstanding the
preceding sentence, provided that no Event of Default shall have occurred and be
continuing, but expressly subject to the provisions of Section 4.7(c) of the
Credit Agreement, Mortgagor shall have the right to adjust such loss, and the
insurance proceeds relating to such loss shall be paid over to Mortgagor.

(g) In the event of foreclosure of this Mortgage or other transfer of title to
the Mortgaged Property to the Mortgagee, all right, title and interest of
Mortgagor in and to any insurance policies, solely with respect to the Mortgaged
Property, then in force shall pass to the purchaser or grantee.

(h) Mortgagor may maintain insurance required under this Mortgage by means of
one or more blanket insurance policies maintained by Mortgagor; provided,
however, that (A) any such policy shall specify, or Mortgagor shall furnish to
Mortgagee a written statement from the insurer so specifying, the maximum amount
of the total insurance afforded by such blanket policy that is allocated to the
Mortgaged Property and the other Mortgaged Property

 

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and any sublimits in such blanket policy applicable to the Mortgaged Property
and the other Mortgaged Property, (B) each such blanket policy shall include an
endorsement providing that, in the event of a loss resulting from an insured
peril, insurance proceeds shall be allocated to the Mortgaged Property in an
amount equal to the coverages required to be maintained by Mortgagor as provided
above and (C) the protection afforded under any such blanket policy shall be no
less than that which would have been afforded under a separate policy or
policies as required hereunder relating only to the Mortgaged Property.

7. Restrictions on Liens and Encumbrances. Except for the lien of this Mortgage
and the Permitted Exceptions, and except as expressly permitted under the Credit
Agreement or this Mortgage, Mortgagor shall not, without the prior written
consent of Mortgagee, further mortgage, nor otherwise encumber the Mortgaged
Property nor create or suffer to exist any lien, charge or encumbrance on the
Mortgaged Property, or any part thereof, whether superior or subordinate to the
lien of this Mortgage and whether recourse or non-recourse.

8. Due on Sale and Other Transfer Restrictions. Except as expressly permitted
under the Credit Agreement, Mortgagor shall not, without the prior written
consent of Mortgagee, sell, transfer, convey or assign all or any portion of, or
any interest in, the Mortgaged Property. Notwithstanding anything herein to the
contrary, so long as no Event of Default has occurred and is continuing, the
Mortgagor may use, lease and dispose of all or any part of the Mortgaged
Property in the ordinary course of its business, subject to the terms of the
Credit Agreement and the provisions of this Mortgage.

9. Condemnation/Eminent Domain. Subject to the Credit Agreement, upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
Mortgaged Property, or any portion thereof, Mortgagor will notify Mortgagee of
the pendency of such proceedings. Mortgagee is hereby authorized and empowered
by Mortgagor to settle or compromise any claim in connection with such
condemnation and to receive all awards and proceeds thereof to be applied
pursuant to Section 4.7(c) of the Credit Agreement. Notwithstanding the
preceding sentence, provided no Event of Default shall have occurred and be
continuing, but expressly subject to the provisions of Section 4.7(c) of the
Credit Agreement (including any right set forth therein of Mortgagor to use the
proceeds to repair or replace the Mortgaged Property), (i) Mortgagor shall, at
its expense, diligently prosecute any proceeding relating to such condemnation,
(ii) Mortgagor may settle or compromise any claims in connection therewith and
(iii) Mortgagor may receive any awards or proceeds thereof, provided that
Mortgagor shall (a) in the event of a partial taking of an individual Mortgaged
Property and to the extent reasonably possible promptly repair and restore
Mortgaged Property to its condition prior to such condemnation, regardless of
whether any award shall have been received or whether such award is sufficient
to pay for the costs of such repair and restoration or (b) otherwise comply with
the provisions of the Credit Agreement relating to the disposition of Net Cash
Proceeds from a Recovery Event or otherwise.

10. Leases. Except as expressly permitted under the Credit Agreement, Mortgagor
shall not (a) execute an assignment or pledge of any Lease relating to all or
any portion of the Mortgaged Property other than in favor of Mortgagee, or
(b) during the continuance of an Event of Default, execute any Lease of any of
the Mortgaged Property without the written consent of Mortgagee. Mortgagor shall
deliver to Mortgagee copies of all leases promptly upon the request of
Collateral Agent.

 

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11. Further Assurances. To further assure Mortgagee’s rights under this
Mortgage, Mortgagor agrees upon written demand of Mortgagee to do any act or
execute any additional documents (including, but not limited to, security
agreements on any personalty included or to be included in the Mortgaged
Property and a separate assignment of each Lease in recordable form) as may be
reasonably required by Mortgagee to confirm the lien of this Mortgage and all
other rights or benefits conferred on Mortgagee by this Mortgage.

12. Mortgagee’s Right to Perform. If Mortgagor fails to perform any of the
covenants or agreements of Mortgagor contained herein, within the applicable
grace period, if any, provided for in the Credit Agreement, Mortgagee, without
waiving or releasing Mortgagor from any obligation or default under this
Mortgage may, (but shall be under no obligation to) at any time upon delivery of
written notice to Mortgagor pay or perform the same, and the amount or cost
thereof, with interest at the Default Rate, shall be due on demand from
Mortgagor to Mortgagee and the same shall be secured by this Mortgage and shall
be a lien on the Mortgaged Property prior to any right, title to, interest in,
or claim upon the Mortgaged Property attaching subsequent to the lien of this
Mortgage. No payment or advance of money by Mortgagee under this Section shall
be deemed or construed to cure Mortgagor’s default or waive any right or remedy
of Mortgagee.

13. Representations and Warranties.

(a) The Real Estate, and the use and operation thereof, comply in all material
respects with all Requirements of Law, including, without limitation, building
and zoning ordinances and codes and the Americans with Disabilities Act except
for such noncompliance as does not and will not, in the aggregate, result in any
Material Adverse Effect. There has not been committed by Mortgagor or, to
Mortgagor’s knowledge, any other Person in occupancy of or involved with the
operation or use of the Mortgaged Property any act or omission affording any
Governmental Authority the right of forfeiture as against the Mortgaged Property
or any part thereof.

(b) As of the date hereof, Mortgagor has not received notice of the commencement
of any condemnation or other eminent domain proceeding and, to Mortgagor’s
knowledge, no such proceeding is threatened or contemplated with respect to all
or any portion of the Real Estate or for the relocation of roadways providing
access to the Real Estate which would have a Material Adverse Effect.

(c) As of the date hereof, there are adequate rights of access to public ways
from the Real Estate and the Real Estate is served by water, sewer, sanitary
sewer and storm drain facilities adequate to service the Mortgaged Property for
full utilization of the Mortgaged Property for its intended uses. All public
utilities necessary to the full use and enjoyment of the Mortgaged Property as
currently used and enjoyed are located either in the public right-of-way
abutting the Real Estate (which are connected so as to serve the Real Estate
without passing over other property) or in recorded easements serving the Real
Estate and such easements are set forth in and insured by the Title Insurance
Policy. All roads necessary for the use of the Real Estate

 

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for its current purposes either (i) have been completed and dedicated to public
use and accepted by all Governmental Authorities or (ii) the use thereof is
provided by private easement adequate for the present use of the Mortgaged
Property. The Real Estate has, or to the knowledge of Mortgagor, is served by,
parking to the extent required to comply with all Requirements of Law.

(d) The Real Estate is assessed for real estate tax purposes as one or more
wholly independent tax lot or lots, separate from any adjoining land or
improvements not constituting a part of such lot or lots, and no other land or
improvement is assessed and taxed together with the Real Estate or any portion
thereof.

(e) As of the date hereof, to Mortgagor’s knowledge after due inquiry, there are
no pending or proposed special or other assessments for public improvements or
otherwise affecting the Mortgaged Property, nor are there any contemplated
improvements to the Mortgaged Property that may result in such special or other
assessments.

(f) All mortgage, mortgage recording, stamp, intangible or other similar tax
required to be paid by any Person under any Requirements of Law currently in
effect in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement of any of the Loan Documents, including,
without limitation, any Mortgage and Security Agreement, have been paid or will
be paid.

(g) As of the date hereof, except to the extent waived by Collateral Agent, the
survey for the Real Estate delivered to Lender in connection with this Mortgage
accurately reflects the Real Estate, and to the knowledge of the Mortgagor does
not fail to reflect any material matter affecting the Real Estate or the title
thereto, except as set forth in Exhibit B attached hereto.

(h) As of the date hereof, there are no Leases affecting the Mortgaged Property
except as provided on Schedule I hereof.

14. Covenants.

(a) Access to Property. Subject to the applicable provisions of the Credit
Agreement, the Mortgagor shall permit agents, representatives and employees of
the Collateral Agent to inspect the Mortgaged Property or any part thereof at
reasonable intervals upon reasonable advance notice during regular business
hours.

(b) Awards; Insurance Proceeds. The Mortgagor shall cooperate with the
Collateral Agent in obtaining for the Collateral Agent the benefits of any Net
Cash Proceeds lawfully or equitably payable in connection with any Recovery
Event to the extent required by the Credit Agreement, and the Collateral Agent
shall be reimbursed for any expenses incurred in connection therewith (including
reasonable, actual attorneys’ fees and disbursements, as to any Approved
Acquisition Asset, the payment by Mortgagor of the expense of an appraisal on
behalf of the Collateral Agent in case of a casualty or condemnation affecting
the Property or any part thereof) out of such Net Cash Proceeds.

(c) Zoning. Mortgagor shall not initiate or consent to any zoning
reclassification of any portion of the Real Estate or seek any variance under
any existing zoning

 

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ordinance or use or permit the use of any portion of the Real Estate in any
manner that could result in such use becoming a non-conforming use under any
zoning ordinance or any other applicable land use law, rule or regulation,
without the prior written consent of the Collateral Agent, which consent shall
not be unreasonably withheld, conditioned or delayed.

(d) No Joint Assessment. Mortgagor shall not suffer, permit or initiate the
joint assessment of the Real Estate with (a) any other real property
constituting a tax lot separate from the Real Estate, or (b) any portion of the
Real Estate which may be deemed to constitute personal property, or any other
procedure whereby the Lien of any taxes which may be levied against such
personal property shall be assessed or levied or charged to the Real Estate.

(e) Reciprocal Easement Agreements. Mortgagor shall not enter into, terminate or
modify any reciprocal easement agreement (“REA”) without the Collateral Agent’s
prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed. Mortgagor shall enforce, comply with, and cause each of
the parties to any REA to comply with all of the material economic terms and
conditions contained in the REA.

(f) Defense of Title. The Mortgagor will preserve its interest in and title to
the Mortgaged Property and shall cause this Mortgage, and each amendment,
modification or supplement hereto, to be recorded and filed and to be kept
recorded and filed in such manner and in such places, as may be required by law
in order to establish, preserve and protect the validity and priority of the
Lien and security interest created herein against the claims of all Persons
whomsoever claiming by, through or under the Mortgagor).

15. Remedies.

(a) Upon the occurrence and during the continuance of any Event of Default,
Mortgagee may immediately take such action, without notice or demand (except as
otherwise provided herein) only to the extent permitted by applicable law, it
deems reasonably necessary to protect and enforce its rights against Mortgagor
and in and to the Mortgaged Property, including, but not limited to, the
following actions, each of which may be pursued concurrently or otherwise to the
extent permitted by applicable law, at such time and in such manner as Mortgagee
may determine, in its sole discretion, without impairing or otherwise affecting
the other rights and remedies of Mortgagee:

(i) Mortgagee may at its option, in addition to other remedies provided at law
and to the extent permitted under the Credit Agreement, declare all sums secured
by this Mortgage immediately due and payable without presentment, demand,
protest, notice of protest and non-payment or other notice of default or notice
of acceleration or notice of intention to acceleration or other notice of any
kind, all of which are hereby waived by Mortgagor and all other parties
obligated in any manner whatsoever to pay and/or perform the Obligations (except
to the extent required hereunder or under the Credit Agreement or any other Loan
Document, or under any provision of applicable law that cannot be waived).

(ii) To the extent permitted under applicable law, Mortgagee may elect to sell
the Mortgaged Property or any part thereof to be at such place or places and
otherwise in

 

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the manner and upon such notice or notices as may be required under any
Requirements of Law (and Mortgagor hereby waives, to the extent permitted under
applicable law, any right it may have under Requirements of Law to direct the
order of sale); provided, however, that Mortgagee may offset its bid at any such
sale to the extent of the full amount owed to Mortgagee under the Credit
Agreement, including, without limitation, expenses of sale, and costs, expenses,
and attorney fees incurred by or on behalf of Mortgagee in connection with
collecting, litigating, or otherwise enforcing any right under the Credit
Agreement. Mortgagee may postpone the sale of all or any portion of the
Mortgaged Property by public announcement made at the initial time and place of
sale, and from time to time later by public announcement made at the time and
place of sale fixed by the preceding postponement. Mortgagee shall deliver to
the purchaser at such public auction its deed conveying the Mortgaged Property
sold, but without any covenant or warranty, express or implied. The recital in
such deed of any matter of fact shall be conclusive proof of its truthfulness.
Any person, including Mortgagor or Mortgagee, may purchase at such sale.

(iii) The proceeds or avails of any sale made under or by virtue of this
Mortgage, together with any other sums secured by this Mortgage, which then may
be held by the Mortgagee or any other person, shall be applied pursuant to
Section 15(e) hereof and the Credit Agreement.

(iv) Mortgagee may, to the extent permitted by applicable law, (A) institute and
maintain an action of judicial or non-judicial foreclosure against all or any
part of the Mortgaged Property, (B) institute and maintain an action on the
Credit Agreement, the Guarantee, or any other Loan Document, or (C) take such
other action at law or in equity for the enforcement of this Mortgage or any of
the Loan Documents as the law may allow. Mortgagee may proceed in any such
action to final judgment and execution thereon for all sums due hereunder,
together with interest thereon at the applicable Default Rate or a lesser amount
if required by law and all costs of suit, including, without limitation,
reasonable attorneys’ fees and disbursements. To the fullest extent permitted by
applicable law and the Credit Agreement, interest at the Default Rate shall be
due on any judgment obtained by Mortgagee from the date of judgment until actual
payment is made of the full amount of the judgment.

(v) Mortgagee may, to the extent permitted by applicable law, personally, or by
its agents, attorneys and employees and without regard to the adequacy or
inadequacy of the Mortgaged Property or any other collateral as security for the
Obligations enter into and upon the Mortgaged Property and each and every part
thereof and exclude Mortgagor and its agents and employees therefrom without
liability for trespass, damage or otherwise (Mortgagor hereby agreeing to
surrender possession of the Mortgaged Property to Mortgagee upon demand at any
such time) and use, operate, manage, maintain and control the Mortgaged Property
and every part thereof. Following such entry and taking of possession, Mortgagee
shall be entitled, without limitation, (x) to lease all or any part or parts of
the Mortgaged Property for such periods of time and upon such conditions as
Mortgagee may, in its discretion, deem proper, (y) to enforce, cancel or modify
any Lease subject to the rights of any existing tenants and (z) generally to
execute, do and perform any other act, deed, matter or thing concerning the
Mortgaged Property as Mortgagee shall deem appropriate as fully as Mortgagor
might do.

(vi) If Mortgagor remains in possession after demand by Mortgagee for surrender
of possession of the Mortgaged Property, such continued possession by Mortgagor
shall be as tenant of Mortgagee, and Mortgagor agrees to pay monthly in advance
to Mortgagee such rent for the Mortgaged Property so occupied as Mortgagee may
demand, and in default of doing so, Mortgagor may also be dispossessed by
summary proceedings or otherwise. In case of the appointment of a receiver of
the Rents, the foregoing agreement of Mortgagor to pay rent shall inure to the
benefit of such receiver.

 

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(b) In case of a foreclosure sale, the Mortgaged Property may be sold, at
Mortgagee’s election, in one parcel or in more than one parcel and Mortgagee is
specifically empowered (without being required to do so, and in its sole and
absolute discretion) to cause successive sales of portions of the Mortgaged
Property to be held as more particularly described in Section 15(a)(ii), to the
extent permitted under the terms of the Credit Agreement.

(c) In the event of any breach of any of the covenants, agreements, terms or
conditions contained in this Mortgage and the expiration of any applicable
notice and/or grace period, Mortgagee shall be entitled to enjoin such breach
and obtain specific performance of any covenant, agreement, term or condition
and Mortgagee shall have the right to invoke any equitable right or remedy as
though other remedies were not provided for in this Mortgage.

(d) To the extent permitted by applicable law, upon completion of any sale or
sales made by Mortgagee under or by virtue of this Mortgage and upon
satisfaction of any redemption period required by law, Mortgagee shall execute
and deliver to the purchaser or purchasers at such sale or sales a good and
sufficient instrument, or good and sufficient instruments, conveying, assigning
and transferring all estate, right, and title and interest of Mortgagor in and
to the property and rights sold. To the extent permitted by applicable law, any
such sale or sales made by virtue of nonjudicial or judicial proceedings or of a
judgment or decree of foreclosure and sale, shall operate to divest all the
estate, right, title, interest, claim and demand whatsoever, whether at law or
in equity, of Mortgagor in and to the properties and rights to be sold, and
shall be a perpetual bar both at law and in equity, of Mortgagor and against any
and all persons claiming or who may claim the same, or any part thereof from
through or under Mortgagor. To the extent permitted by applicable law, the
purchaser at any foreclosure sale hereunder may disaffirm any easement granted
or lease made in violation of any provision of this Mortgage, and may take
immediate possession of the Mortgaged Property free from, and despite the terms
of, such grant of easement or rental or lease agreement.

(e) It is agreed that if an Event of Default shall occur and be continuing, any
and all proceeds of the Mortgaged Property received by Mortgagee shall be held
by Mortgagee for the benefit of the Secured Parties as collateral security for
the Obligations (whether matured or unmatured), and shall be applied in payment
of the Obligations in the manner and in the order set forth in Section 8(b) of
the Security Agreement.

 

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16. Right of Mortgagee to Credit Sale. To the extent permitted under applicable
law, upon the occurrence of any sale made under this Mortgage in connection with
the exercise of remedies hereunder upon the occurrence and during the
continuation of any Event of Default, whether made by virtue of judicial or
nonjudicial proceedings or of a judgment or decree of foreclosure and sale,
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof. In
lieu of paying cash therefor, Mortgagee may make settlement for the purchase
price by crediting upon the Obligations or other sums secured by this Mortgage,
the net sales price after deducting therefrom the expenses of sale and the cost
of the action and any other sums which Mortgagee is authorized to deduct under
this Mortgage. In such event, this Mortgage, the Credit Agreement, the Guarantee
and the Security Documents evidencing expenditures secured hereby may be
presented to the person or persons conducting the sale in order that the amount
so used or applied may be credited upon the Obligations as having been paid.

17. Appointment of Receiver. If an Event of Default shall have occurred and be
continuing, Mortgagee as a matter of right and without notice to Mortgagor,
unless otherwise required by applicable law, and without regard to the adequacy
or inadequacy of the Mortgaged Property or any other collateral or the interest
of Mortgagor therein as security for the Obligations, shall have the right to
apply to any court having jurisdiction to appoint a receiver or receivers or
other manager of the Mortgaged Property, without requiring the posting of a
surety bond, and without reference to the adequacy or inadequacy of the value of
the Mortgaged Property or the solvency or insolvency of Mortgagor or any other
party obligated for payment of all or any part of the Obligations, and whether
or not waste has occurred with respect to the Mortgaged Property, and Mortgagor
hereby irrevocably consents to such appointment and waives notice of any
application therefor (except as may be required by law). Any such receiver or
receivers or manager shall have all the usual powers and duties of receivers in
like or similar cases and all the powers and duties of Mortgagee in case of
entry as provided in this Mortgage, including, without limitation and to the
extent permitted by law, the right to enter into leases of all or any part of
the Mortgaged Property, (subject to the rights of Tenants under the Leases) and
shall continue as such and exercise all such powers until the date of
confirmation of sale of the Mortgaged Property unless such receivership is
sooner terminated.

18. Extension, Release, etc. (a) Without affecting the lien or charge created by
this Mortgage upon any portion of the Mortgaged Property not then or theretofore
released as security for the full amount of the Obligations, Mortgagee may, from
time to time and without notice (but subject to the terms of the Credit
Agreement (including, without limitation, Section 11.2 thereof), agree to
(i) release any person liable for the indebtedness borrowed or guaranteed under
the Loan Documents, (ii) extend the maturity or alter any of the terms of the
indebtedness borrowed or guaranteed under the Loan Documents or any other
guaranty thereof, (iii) grant other indulgences, (iv) release or reconvey, or
cause to be released or reconveyed at any time at Mortgagee’s option any parcel,
portion or all of the Mortgaged Property, (v) take or release any other or
additional security for any obligation herein mentioned, or (vi) make
compositions or other arrangements with debtors in relation thereto.

(b) No recovery of any judgment by Mortgagee and no levy of an execution under
any judgment upon the Mortgaged Property or upon any other property of Mortgagor
shall affect the lien created by this Mortgage or any liens, rights, powers or
remedies of Mortgagee hereunder, and such liens, rights, powers and remedies
shall continue unimpaired.

 

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(c) If Mortgagee shall have the right to foreclose this Mortgage, Mortgagor
authorizes Mortgagee at its option to foreclose the lien created by this
Mortgage subject to the rights of any tenants of the Mortgaged Property, to the
extent permitted by applicable law. To the extent permitted by applicable law,
the failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights, or to provide notice to such tenants
as required in any statutory procedure governing a foreclosure of the Mortgaged
Property, or to terminate such tenant’s rights in such foreclosure will not be
asserted by Mortgagor as a defense to any proceeding instituted by Mortgagee to
collect the Obligations or to foreclose the lien created by this Mortgage.

(d) Unless expressly provided otherwise, in the event that Mortgagee’s interest
in this Mortgage and title to the Mortgaged Property or any estate therein shall
become vested in the same person or entity, this Mortgage shall not merge in
such title but shall continue as a valid lien on the Mortgaged Property for the
amount secured hereby.

19. Security Agreement under Uniform Commercial Code. (a) It is the intention of
the parties hereto that this Mortgage shall constitute a “security agreement”
within the meaning of the Uniform Commercial Code (the “UCC”) of the State in
which the Mortgaged Property is located. If an Event of Default shall occur and
be continuing, then in addition to having any other right or remedy available at
law or in equity, Mortgagee shall have the option of either (i) proceeding under
the UCC and exercising such rights and remedies as may be provided to a secured
party by the UCC with respect to all or any portion of the Mortgaged Property
which is personal property (including, without limitation, taking possession of
and selling such property) or (ii) to the extent permitted by applicable law,
treating such property as real property and proceeding with respect to both the
real and personal property constituting the Mortgaged Property in accordance
with Mortgagee’s rights, powers and remedies with respect to the real property
(in which event the default provisions of the UCC shall not apply). If Mortgagee
shall elect to proceed under the UCC, and unless otherwise required by the
Security Agreement, then ten (10) days’ notice of sale of the personal property
shall be deemed reasonable notice and the reasonable expenses of retaking,
holding, preparing for sale, selling and the like incurred by Mortgagee shall
include, but not be limited to, reasonable attorneys’ fees and legal expenses.
At Mortgagee’s request, Mortgagor shall assemble the personal property and make
it available to Mortgagee at a place designated by Mortgagee which is reasonably
convenient to both parties.

(b) Certain portions of the Mortgaged Property are or will become “fixtures” (as
that term is defined in the UCC) on the Mortgaged Property, and this Mortgage,
upon being filed for record in the real estate records of the county wherein
such fixtures are situated, shall operate also as a financing statement filed as
a fixture filing in accordance with the applicable provisions of said UCC upon
such portions of the Mortgaged Property that are or become fixtures. The
addresses of the Mortgagor, as debtor, and Mortgagee, as secured party, are set
forth in the first page of this Mortgage.

 

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(c) The real property to which the fixtures relate is described in Exhibit A
attached hereto. The name, type of organization and jurisdiction of organization
of the debtor for purposes of this financing statement are the name, type of
organization and jurisdiction of organization of the Mortgagor set forth in the
first paragraph of this Mortgage, and the name of the secured party for purposes
of this financing statement is the name of the Mortgagee set forth in the first
paragraph of this Mortgage. The mailing address of the Mortgagor/debtor is the
address of the Mortgagor set forth in the first paragraph of this Mortgage. The
mailing address of the Mortgagee/secured party from which information concerning
the security interest hereunder may be obtained is the address of the Mortgagee
set forth in the first paragraph of this Mortgage. Mortgagor’s organizational
identification number is 2140249.

20. Assignment of Rents. (a) Mortgagor hereby assigns to Mortgagee the Rents as
further security for the payment and performance of the Obligations, and
Mortgagor grants to Mortgagee the right to enter the Mortgaged Property for the
purpose of collecting the same and to let the Mortgaged Property or any part
thereof, (subject to the rights of tenants under the Leases) and to apply the
Rents on account of the Obligations. The foregoing assignment and grant is
present and absolute and shall continue in effect until the Obligations secured
hereby are paid in full and the Commitments no longer remain outstanding, but
Mortgagee hereby waives the right to enter the Mortgaged Property for the
purpose of collecting the Rents and Mortgagor shall be entitled to collect,
receive, use and retain the Rents until the occurrence and during the
continuation of an Event of Default; such right of Mortgagor to collect,
receive, use and retain the Rents may be revoked by Mortgagee upon the
occurrence and during the continuance of any Event of Default by giving not less
than ten (10) days’ written notice of such revocation to Mortgagor; in the event
such notice is given, Mortgagor shall pay over to Mortgagee, or to any receiver
appointed to collect the Rents, any lease security deposits and shall pay
monthly in advance to Mortgagee, or to any such receiver, the fair and
reasonable rental value as determined by Mortgagee for the use and occupancy of
such part of the Mortgaged Property as may be in the possession of Mortgagor or
any affiliate of Mortgagor, and upon default in any such payment Mortgagor and
any such affiliate will vacate and surrender the possession of the Mortgaged
Property to Mortgagee or to such receiver, and in default thereof may be evicted
by summary proceedings or otherwise. Mortgagor shall not accept prepayments of
installments of Rent to become due for a period of more than one month in
advance (except for security deposits and estimated payments of percentage rent,
if any).

(b) Mortgagor has not affirmatively done any act which would prevent Mortgagee
from, or limit Mortgagee in, acting under any of the provisions of the foregoing
assignment.

(c) Except for any matter disclosed in the Credit Agreement, no action has been
brought or, to Mortgagor’s knowledge, is threatened, which would interfere in
any way with the right of Mortgagor to execute the foregoing assignment and
perform all of Mortgagor’s obligations contained in this Section and in the
Leases.

21. Additional Rights. To the extent permitted by applicable law, the holder of
any subordinate lien or subordinate mortgage on the Mortgaged Property shall
have no right to terminate any Lease whether or not such Lease is subordinate to
this Mortgage nor shall Mortgagor consent to any holder of any subordinate lien
or subordinate mortgage joining any

 

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tenant under any Lease in any action to foreclose the lien or modify, interfere
with, disturb or terminate the rights of any tenant under any Lease. By
recordation of this Mortgage all subordinate lienholders and the trustees and
beneficiaries under subordinate mortgages are subject to and notified of this
provision, and any action taken by any such lienholder contrary to this
provision shall be null and void. Upon the occurrence and during the continuance
of any Event of Default, Mortgagee, in its sole discretion and without regard to
the adequacy of its security under this Mortgage, apply all or any part of any
amounts on deposit with Mortgagee under this Mortgage against all or any part of
the Obligations. Any such application shall not be construed to cure or waive
any Default or Event of Default or invalidate any act taken by Mortgagee on
account of such Default or Event of Default.

22. Notices. All notices, requests, demands and other communications hereunder
shall be given in accordance with the provisions of Section 11.2 of the Credit
Agreement to Mortgagor and to Mortgagee as specified therein.

23. No Oral Modification. This Mortgage may not be amended, supplemented or
otherwise modified except in accordance with the provisions of Section 11.1 of
the Credit Agreement. To the extent permitted by applicable law, any agreement
made by Mortgagor and Mortgagee after the date of this Mortgage relating to this
Mortgage shall be superior to the rights of the holder of any intervening or
subordinate lien or encumbrance.

24. Partial Invalidity. In the event any one or more of the provisions contained
in this Mortgage shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, but each shall be construed as if
such invalid, illegal or unenforceable provision had never been included.

25. Mortgagor’s Waiver of Rights. (a) Mortgagor hereby voluntarily and knowingly
releases and waives any and all rights to retain possession of the Mortgaged
Property after the occurrence and during the continuance of an Event of Default
and any and all rights of redemption from sale under any order or decree of
foreclosure (whether full or partial), pursuant to rights, if any, therein
granted, as allowed under any applicable law, on its own behalf, on behalf of
all persons claiming or having an interest (direct or indirectly) by, through or
under each constituent of Mortgagor and on behalf of each and every person
acquiring any interest in the Mortgaged Property subsequent to the date hereof,
it being the intent hereof that any and all such rights or redemption of each
constituent of Mortgagor and all such other persons are and shall be deemed to
be hereby waived to the fullest extent permitted by applicable law or
replacement statute. Each constituent of Mortgagor shall not invoke or utilize
any such law or laws or otherwise hinder, delay, or impede the execution of any
right, power, or remedy herein or otherwise granted or delegated to Mortgagee,
but shall permit the execution of every such right, power, and remedy as though
no such taw or laws had been made or enacted.

(b) To the fullest extent permitted by law, Mortgagor waives the benefit of all
laws now existing or that may subsequently be enacted providing for (i) any
appraisement before sale of any portion of the Mortgaged Property, (ii) any
extension of the time for the enforcement of the collection of the Obligations
or the creation or extension of a period of redemption from any sale made in
collecting such debt and (iii) exemption of the Mortgaged Property from

 

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attachment, levy or sale under execution or exemption from civil process. To the
full extent Mortgagor may do so, Mortgagor agrees that Mortgagor will not at any
time insist upon, plead, claim or take the benefit or advantage of any law now
or hereafter in force providing for any appraisement, valuation, stay,
exemption, extension or redemption, or requiring foreclosure of this Mortgage
before exercising any other remedy granted hereunder and Mortgagor, for
Mortgagor and its successors and assigns, and for any and all persons ever
claiming any interest in the Mortgaged Property, to the extent permitted by law,
hereby waives and releases all rights of redemption, valuation, appraisement,
stay of execution, notice of election to mature (except as expressly provided in
the Credit Agreement) or declare due the whole of the secured indebtedness and
marshalling in the event of a sale by Mortgagee, or other rights hereby created.
Mortgagor waives all rights of redemption.

26. Remedies Not Exclusive. Mortgagee shall be entitled to enforce payment of
the Obligations and performance of the Obligations and to exercise all rights
and powers under this Mortgage or under any of the other Loan Documents or other
agreement or any laws now or hereafter in force, notwithstanding some or all of
the Obligations may now or hereafter be otherwise secured, whether by deed of
trust, mortgage, security agreement, pledge, lien, assignment or otherwise.
Neither the acceptance of this Mortgage nor its enforcement, shall prejudice or
in any manner affect Mortgagee’s right to realize upon or enforce any other
security now or hereafter held by Mortgagee, it being agreed that Mortgagee
shall be entitled to enforce this Mortgage and any other security now or
hereafter held by Mortgagee in such order and manner as Mortgagee may determine
in its absolute discretion. No remedy herein conferred upon or reserved to
Mortgagee is intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute. Every power or remedy given by any of the Loan Documents
to Mortgagee or to which Mortgagee may otherwise be entitled, may be exercised,
concurrently or independently, from time to time and as often as may be deemed
expedient by Mortgagee as the case may be. To the extent permitted by applicable
law, in no event shall Mortgagee, in the exercise of the remedies provided in
this Mortgage (including, without limitation, in connection with the assignment
of Rents to Mortgagee, or the appointment of a receiver and the entry of such
receiver on to all or any part of the Mortgaged Property), be deemed a
“Mortgagee in possession,” and Mortgagee shall not in any way be made liable for
any act, either of commission or omission, in connection with the exercise of
such remedies.

27. Multiple Security. If (a) the Mortgaged Property shall consist of one or
more parcels, whether or not contiguous and whether or not located in the same
county, or (b) in addition to this Mortgage, Mortgagee shall now or hereafter
hold or be the beneficiary of one or more additional mortgages, liens, deeds of
trust, mortgages or other security (directly or indirectly) for the Obligations
upon other property in the State in which the Mortgaged Property are located
(whether or not such property is owned by Mortgagor or by others) or (c) both
the circumstances described in clauses (a) and (b) shall be true, then to the
fullest extent permitted by law, Mortgagee may, at its election, commence or
consolidate in a single foreclosure action all foreclosure proceedings against
all such collateral securing the Obligations (including the Mortgaged Property),
which action may be brought or consolidated in the courts of, or sale conducted
in, any county in which any of such collateral is located. Mortgagor
acknowledges that the right to maintain a consolidated foreclosure action is a
specific inducement to Lenders to

 

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extend the indebtedness borrowed pursuant to or guaranteed by the Loan
Documents, and Mortgagor expressly and irrevocably waives any objections to the
commencement or consolidation of the foreclosure proceedings in a single action
and any objections to the laying of venue or based on the grounds of forum non
conveniens which it may now or hereafter have. Mortgagor further agrees that if
Mortgagee shall be prosecuting one or more foreclosure or other proceedings
against a portion of the Mortgaged Property or against any collateral other than
the Mortgaged Property, which collateral directly or indirectly secures the
Obligations, or if Mortgagee shall have obtained a judgment of foreclosure and
sale or similar judgment against such collateral, then, whether or not such
proceedings are being maintained or judgments were obtained in or outside the
State in which the Mortgaged Property are located, Mortgagee may commence or
continue any foreclosure proceedings and exercise its other remedies granted in
this Mortgage against all or any part of the Mortgaged Property and Mortgagor
waives, to the extent permitted by applicable law, any objections to the
commencement or continuation of a foreclosure of this Mortgage or exercise of
any other remedies hereunder based on such other proceedings or judgments, and
waives, to the extent permitted by applicable law, any right to seek to dismiss,
stay, remove, transfer or consolidate either any action under this Mortgage or
such other proceedings on such basis. Neither the commencement nor continuation
of proceedings to foreclose this Mortgage, nor the exercise of any other rights
hereunder nor the recovery of any judgment by Mortgagee in any such proceedings
shall prejudice, limit or preclude Mortgagee’s right to commence or continue one
or more foreclosure or other proceedings or obtain a judgment against any other
collateral (either in or outside the State in which the Mortgaged Property are
located) which directly or indirectly secures the Obligations, and Mortgagor
expressly waives any objections to the commencement of, continuation of, or
entry of a judgment in such other sales or proceedings or exercise of any
remedies in such sales or proceedings based upon any action or judgment
connected to this Mortgage, and Mortgagor also waives any right to seek to
dismiss, stay, remove, transfer or consolidate either such other sales or
proceedings or any sale or action under this Mortgage on such basis. It is
expressly understood and agreed that to the fullest extent permitted by law,
Mortgagee may, at its election, cause the sale of all collateral which is the
subject of a single foreclosure action at either a single sale or at multiple
sales conducted simultaneously and take such other measures as are appropriate
in order to effect the agreement of the parties to dispose of and administer all
collateral securing the Obligations (directly or indirectly) in the most
economical and least time-consuming manner.

28. Successors and Assigns. All covenants of Mortgagor contained in this
Mortgage are imposed solely and exclusively for the benefit of Mortgagee and its
successors and assigns, and no other person or entity shall have standing to
require compliance with such covenants or be deemed, under any circumstances, to
be a beneficiary of such covenants, any or all of which may be freely waived in
whole or in part by Mortgagee at any time if in the sole discretion of either of
them such a waiver is deemed advisable. All such covenants of Mortgagor shall
run with the land and bind Mortgagor, the successors and assigns of Mortgagor
(and each of them) and all subsequent owners, encumbrancers and tenants of the
Mortgaged Property, to the extent permitted by applicable law, and shall inure
to the benefit of Mortgagee and its successors and assigns. The word “Mortgagor”
shall be construed as if it read “Mortgagors” whenever the sense of this
Mortgage so requires and if there shall be more than one Mortgagor, the
obligations of the Mortgagors shall be joint and several.

 

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29. No Waivers, etc. Any failure by Mortgagee to insist upon the strict
performance by Mortgagor of any of the terms and provisions of this Mortgage
shall not be deemed to be a waiver of any of the terms and provisions hereof,
and Mortgagee, notwithstanding any such failure, shall have the right thereafter
to insist upon the strict performance by Mortgagor of any and all of the terms
and provisions of this Mortgage to be performed by Mortgagor. Mortgagee may
release, regardless of consideration and without the necessity for any notice to
or consent by the beneficiary of any subordinate mortgage or the holder of any
subordinate lien on the Mortgaged Property, any part of the security held for
the obligations secured by this Mortgage without, as to the remainder of the
security, in any way impairing or affecting the lien of this Mortgage or the
priority of this Mortgage over any subordinate lien or mortgage.

30. Governing Law, etc. The Obligations secured hereby were incurred in
connection with a multi-state transaction governed by the laws of the State of
New York and pursuant to various documents which were executed and accepted by
the Mortgagee in the State of New York. This Mortgage and all substantive terms
and provisions hereof shall be governed by and construed according to the laws
of the State of New York, except with respect to perfection of security
interests and liens hereunder and enforcement thereof, which shall be governed
by the laws of the State in which the Real Estate is located.

31. Certain Definitions. Unless the context clearly indicates a contrary intent
or unless otherwise specifically provided herein, words used in this Mortgage
shall be used interchangeably in singular or plural form and the word
“Mortgagor” shall mean “each Mortgagor or any subsequent owner or owners of the
Mortgaged Property or any part thereof or interest therein,” the word
“Mortgagee” shall mean “Mortgagee or any successor collateral agent for the
Secured Parties,” and the word “person” shall include any individual,
corporation, partnership, limited liability company, trust, unincorporated
association, government, governmental authority, or other entity. Whenever the
context may require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns and pronouns
shall include the plural and vice versa. The captions in this Mortgage are for
convenience or reference only and in no way limit or amplify the provisions
hereof.

32. Release. All or a portion of the Mortgaged Property may be released in
accordance with Section 11.5 of the Credit Agreement.

33. Last Dollars Secured; Priority. To the extent that this Mortgage secures
only a portion of the Obligations owing or which may become owing by Mortgagor
to the Secured Parties, the parties agree that any payments or repayments of any
Extensions of Credit shall be and be deemed to be applied first to the portion
of the Extensions of Credit that are not secured hereby, it being the parties’
intent that the portion of the Extensions of Credit last remaining unpaid shall
be secured hereby. If at any time this Mortgage shall secure less than all of
the principal amount of the Obligations, it is expressly agreed that any
repayments of the principal amount of the Obligations shall not reduce the
amount of the lien of this Mortgage until such lien amount shall equal the
principal amount of the Obligations outstanding.

 

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34. Receipt of Copy. The Mortgagor acknowledges that it has received a true copy
of this Mortgage.

35. Maturity. The last of the Extensions of Credit (and therefore, the
Obligations) to mature is scheduled to mature on September     , 2018.

36. Maximum Principal Amount of Obligations. Notwithstanding anything contained
herein to the contrary, the maximum principal amount of Obligations secured by
this Mortgage at the time of execution hereof or which under any contingency may
become secured by this Mortgage at any time hereafter is                     
plus all interest payable on such principal amount under the Credit Agreement
and all amounts expended by Mortgagee in accordance with the Credit Agreement
and this Mortgage for the payment of (a) taxes, charges, or assessments which
may be imposed by law upon the premises; (b) premiums on insurance policies
covering the premises; (c) expenses incurred in upholding the lien of this
Mortgage, including, but not limited to (1) the expenses of any litigation to
prosecute or defend the rights and lien created by this Mortgage; (2) any
amount, cost or charges to which the Mortgage becomes subrogated, upon payment,
whether under recognized principles of law or equity, or under express statutory
authority and (3) interest at the rate of interest provided for in the Credit
Agreement.

37. State Specific Provisions. This Mortgage is granted with Mortgage Covenants
and upon the Statutory Condition, for any breach of which the Mortgagee shall
have the Statutory Power of Sale. Upon the occurrence and during the continuance
of any Event of Default, the Mortgagee shall have the Statutory Power of Sale.

38. Further Assurances. Should any deed, conveyance, or instrument of any nature
be required from Mortgagor by Mortgagee to more fully and certainly vest in and
confirm to the Mortgagee such estates rights, powers, and duties, then, upon
request by the Mortgagee, any and all such deeds, conveyances and instruments
shall be made, executed, acknowledged, and delivered and shall be caused to be
recorded and/or filed by Mortgagor.

39. Revolving Credit Loans. (a) The Indebtedness secured hereby includes, in
part, revolving credit loans. The outstanding balance of such revolving credit
loans may increase and decrease from time to time, and sums may be advanced,
repaid and readvanced thereunder until final maturity of such revolving credit
loans. This Mortgage is intended to secure all the Obligations, regardless of
such repayments and readvances and regardless of whether the balance of such
revolving credit loans may be reduced, from time to time, to zero.

(b) In addition to all other Indebtedness secured by this Mortgage, this
Mortgage shall also secure, and constitute a first lien on the Mortgaged
Property to secure, subject only to the Permitted Exceptions, all future
advances whether such advances are obligatory or are to be made at the option of
Mortgagee or the Lenders, or otherwise, made by Mortgagee or the Lenders under
the Credit Agreement for any purpose within twenty (20) years from the date of
this Mortgage (unless the Credit Agreement shall be earlier terminated) to the
same extent as if such advances were made on the date of the execution of this
Mortgage. The total amount of principal indebtedness, including future advances,
that is secured by this Mortgage, may increase or decrease from time to time,
but shall not exceed $         at

 

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any one time, together with interest thereon at the rates provided in the Credit
Agreement and any disbursement made by Mortgagee or any of the Lenders to
protect the security of this Mortgage, with interest on such disbursement at the
Default Rate.

40. No Assumption of Obligations. In the event of a foreclosure of this
Mortgage, neither Mortgagee nor any other Secured Party shall assume any
liability of Mortgagor for Mortgagor’s violation of any environmental laws,
statutes, codes, regulations, or practices relating to the Mortgaged Property
arising prior to the date of the foreclosure sale and Mortgagor’s
indemnifications as contained herein and in the other Loan Documents shall
survive said foreclosure, to the extent provided therein.

[No further text on this page. Signature page follows.]

 

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This Mortgage has been duly executed by Mortgagor as of the date first set forth
above.

 

SPRAGUE OPERATING RESOURCES LLC, a Delaware limited liability company By:  

 

  Name:   Title: By:  

 

  Name:   Title:

State of New Hampshire

County of Rockingham

On this      day of September, 2013, before me, the undersigned notary public,
personally appeared                     , proved to me through satisfactory
evidence of identification, which were New Hampshire driver’s license, to be the
person whose name is signed on the preceding or attached document, and
acknowledged to me that he signed it voluntarily for its stated purpose as
                     of SPRAGUE OPERATING RESOURCES LLC.

 

 

Notary Public My commission expires:

State of New Hampshire

County of Rockingham

On this      day of September, 2013, before me, the undersigned notary public,
personally appeared                     , proved to me through satisfactory
evidence of identification, which were New Hampshire driver’s license, to be the
person whose name is signed on the preceding or attached document, and
acknowledged to me that he signed it voluntarily for its stated purpose as
                     of SPRAGUE OPERATING RESOURCES LLC.

 

 

Notary Public My commission expires:

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SCHEDULE I

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Exhibit A

Applicable Legal Description(s)

See attached.

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EXHIBIT B

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Exhibit M

to Credit Agreement

FORM OF POSITION REPORT

JPMorgan Chase Bank N.A., as Administrative Agent

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

The Relationship Managers at each Lender

 

  Re: Position Report

Reference is made to the Credit Agreement, dated as of October 30, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Sprague Operating Resources LLC, as Borrower, the
Lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, and the other agents parties thereto. Capitalized terms
used herein but not defined herein shall have the meanings provided in the
Credit Agreement. This Position Report has been prepared pursuant to
Section 7.2(d) of the Credit Agreement and the undersigned hereby certifies on
behalf of the Borrower to the Administrative Agent and the Lenders, as follows:

1. attached hereto as Schedule A is the Position Report of the Loan Parties;

2. the Loan Parties are in compliance with the position limits in the Risk
Management Policy and attached hereto as Schedule B are the computations
supporting such certification; and

3. the information contained herein and scheduled hereto is true and correct in
all material respects as of the date hereof.

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

IN WITNESS WHEREOF, the undersigned has executed this Position Report as of the
date set forth below.

Dated: ________ __, 201_

 

SPRAGUE OPERATING RESOURCES LLC, as Borrower

By:      

Name:

Title:

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

Schedule A to

Position Report

Position Report

[See attached]

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

Schedule B to

Position Report

Calculations Supporting the Loan Parties’ Compliance

[See attached]

 

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Exhibit N

to Credit Agreement

GUARANTEE

GUARANTEE, dated as of October 30, 2013 (the “Guarantee”), made by each
signatory hereto (each a “Guarantor”, collectively, together with each Person
which may, from time to time, become party hereto as a Guarantor, the
“Guarantors”), in favor of JPMORGAN CHASE BANK, N.A., as administrative agent
(in such capacity, the “Administrative Agent”) for the Secured Parties as
defined in the Credit Agreement described below.

RECITALS

WHEREAS, pursuant to the Credit Agreement, dated as of October 30, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among SPRAGUE OPERATING RESOURCES LLC (the “Borrower”), the
several banks and other financial institutions or entities from time to time
parties thereto (the “Lenders”), the Administrative Agent and certain other
agents party thereto, the Lenders have severally agreed to make loans to and
participate in letters of credit issued on behalf of, and certain Lenders (the
“Issuing Lenders”) have agreed to issue letters of credit for the account of,
the Borrower upon the terms and subject to the conditions set forth therein;

WHEREAS, the Borrower and the Guarantors are engaged in related businesses, and
each Guarantor will derive substantial direct and indirect benefit from the
making of the extensions of credit to the Borrower; and

WHEREAS, it is a condition precedent to the obligation of the Lenders to make
their respective loans to and participate in letters of credit issued on behalf
of the Borrower, and of the Issuing Lenders to issue their letters of credit,
under the Credit Agreement that each Guarantor shall have executed and delivered
this Guarantee to the Administrative Agent on behalf and for the ratable benefit
of the Secured Parties.

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Lenders and the Issuing Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective loans to and
participate in letters of credit issued on behalf of the Borrower, and of the
Issuing Lenders to issue their letters of credit, under the Credit Agreement,
each Guarantor hereby agrees with the Administrative Agent, on behalf and for
the ratable benefit of the Secured Parties, as follows:

1. Defined Terms.

(a) Unless otherwise defined herein, capitalized terms which are defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

The following terms shall have the following meanings:

“Qualified Keepwell Provider”: in respect of any Swap Obligation, each Loan
Party that, at the time the relevant guarantee (or grant of the relevant
security interest, as applicable) becomes effective with respect to such Swap
Obligation, has total assets exceeding $10,000,000 or otherwise constitutes an
“eligible contract participant” under the Commodity Exchange Act or any
regulations promulgated thereunder and can cause another person to qualify as an
“eligible contract participant” with respect to such Swap Obligation at such
time by entering into a keepwell pursuant to section 1a(18)(A)(v)(II) of the
Commodity Exchange Act.

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“Subsidiary Guarantor”: each Guarantor other than the MLP.

(b) The words “hereof,” “herein” and “hereunder” and words of similar import
when used in this Guarantee shall refer to this Guarantee as a whole and not to
any particular provision of this Guarantee, and section and paragraph references
are to this Guarantee unless otherwise specified.

(c) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

2. Guarantee.

(a) Each Guarantor hereby, unconditionally and irrevocably, guarantees to the
Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties and their respective successors and permitted assigns, the prompt and
complete payment and performance by each of the Loan Parties when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations (other
than, with respect to any Guarantor, any Excluded Swap Obligations of such
Guarantor).

(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors and fraudulent conveyances or transfers.

(c) Each Guarantor further agrees (i) to pay any and all documented expenses
(including, without limitation, all documented fees and disbursements of
counsel) which may be paid or incurred by the Administrative Agent or any
Secured Party in enforcing, or obtaining advice of counsel in respect of, any
rights with respect to, or collecting, any or all of the Obligations and/or
enforcing any rights with respect to, or collecting against, any Guarantor under
this Guarantee and (ii) to indemnify each Secured Party as set forth in
Section 11.6 of the Credit Agreement. Except as otherwise provided in the
definition of “Obligations” contained in the Credit Agreement, this Guarantee
shall remain in full force and effect until the Obligations are paid in full, no
Letters of Credit remain outstanding (unless such Letters of Credit have been
fully Cash Collateralized) and the Commitments are terminated, notwithstanding
that from time to time prior thereto the Loan Parties may be free from any
Obligations.

(d) Each Guarantor agrees that the Obligations may at any time and from time to
time exceed the amount of the liability of such Guarantor hereunder without
impairing this Guarantee or affecting the rights and remedies of the
Administrative Agent or any Secured Party hereunder.

(e) No payment or payments made by the Borrower, any Guarantor, any other Loan
Party, any other guarantor or any other Person or received or collected by the
Administrative Agent or any Secured Party from the Borrower, any Guarantor, any
other Loan Party, any other guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of the
Guarantors hereunder which shall, notwithstanding any such payment or payments
other than payments made by any Guarantor in respect of the Obligations or
payments received or collected from any Guarantor in respect of the Obligations,
remain liable for the Obligations up to the maximum liability of each Guarantor
hereunder until the Obligations are paid in full, no Letters of Credit remain
outstanding (unless such Letters of Credit have been fully Cash Collateralized)
and the Commitments are terminated.

 

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(f) Each Guarantor agrees that whenever, at any time, or from time to time, it
shall make any payment to the Administrative Agent or any Secured Party on
account of its liability hereunder, it will notify the Administrative Agent in
writing that such payment is made under this Guarantee for such purpose.

(g) Each Guarantor shall pay additional amounts to, and indemnify, each Secured
Party (including for purposes of this Section 2, any assignee, successor or
participant) with respect to Taxes imposed on payments pursuant to this
Guarantee to the same extent as the Borrower would have paid additional amounts
and indemnified such Secured Party with respect to Taxes under Section 4.10 and
4.11 of the Credit Agreement, if such Guarantor were the Borrower under the
Credit Agreement. For the avoidance of doubt, any such payments are in addition
to each Guarantor’s obligation to pay any amounts required to be paid by the
Loan Parties to any Secured Party. The agreements in this Section 2(g) shall
survive the termination of this Guarantee and the payment of the Loans,
Reimbursement Obligations, the Obligations and all other amounts payable under
the Credit Agreement.

(h) Each Guarantor further agrees that any payment to the Administrative Agent
or any Secured Party on account of its liability hereunder will be made without
withholding for any Taxes, unless such withholding is required by law. If any
Guarantor determines, in its sole discretion exercised in good faith, that it is
so required to withhold Taxes, then such Guarantor may so withhold and shall
timely pay the full amount of withheld Taxes to the relevant Governmental
Authority in accordance with applicable law.

(i) Each Guarantor agrees to assume all responsibility for being and keeping
itself informed of the Borrower’s financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Obligations and
the nature, scope and extent of the risks that each Guarantor assumes and incurs
under this Guarantee, and agrees that neither the Administrative Agent, any
Issuing Lender nor any Lender shall have any duty to advise any Guarantor of
information known to it regarding those circumstances or risks.

3. Right of Contribution. Each Subsidiary Guarantor hereby agrees that, to the
extent a Subsidiary Guarantor shall have paid more than its proportionate share
of any payment made hereunder or in respect of the Obligations, such Subsidiary
Guarantor shall be entitled to seek and receive contribution from and against
any other Subsidiary Guarantor hereunder which has not paid its proportionate
share of such payment. The provisions of this Section 3 shall be subject to the
terms and conditions of Section 5. The provisions of this Section 3 shall in no
respect limit the obligations and liabilities of any Subsidiary Guarantor to the
Administrative Agent and the Secured Parties, and each Subsidiary Guarantor
shall remain liable to the Administrative Agent and the Secured Parties for the
full amount guaranteed by it hereunder.

4. Right of Set-off. In addition to any rights and remedies of the Secured
Parties provided by Law, each Secured Party shall have the right, without prior
notice to the Guarantors, any such notice being expressly waived by the
Guarantors to the extent permitted by applicable Law, during the existence of an
Event of Default, upon any amount becoming due and payable by any Guarantor
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Secured Party or any branch or agency thereof to or for
the credit or the account of such Guarantor. Each Secured Party agrees promptly
to notify the Guarantors and the Administrative Agent after any such set-off and
application made by such Secured Party; provided that the failure to give such
notice shall not affect the validity of such set-off and application.

 

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5. No Subrogation. Notwithstanding any payment or payments made by the
Guarantors hereunder or any set-off or application of funds of any Guarantor by
any Secured Party, no Guarantor shall be entitled to be subrogated to any of the
rights of the Administrative Agent or any Secured Party against any Loan Party
or any other guarantor or any collateral security or guarantee or right of
offset held by any Secured Party for the payment of any of the Obligations, nor
shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from any Loan Party or any other guarantor in respect of payments
made by any Guarantor hereunder, until all amounts owing to the Administrative
Agent and the Secured Parties by the Loan Parties on account of the Obligations
are paid in full and the Commitments are terminated. If any amount shall be paid
to any Guarantor on account of such subrogation rights at any time when all of
the Obligations shall not have been paid in full or any Letter of Credit remains
outstanding (other than any Letter of Credit which has been fully Cash
Collateralized), such amount shall be held by such Guarantor in trust for the
Administrative Agent and the Secured Parties, segregated from other funds of the
Guarantors unless on deposit in a Controlled Account, and shall, forthwith upon
receipt by such Guarantor, be turned over to the Administrative Agent in like
form received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Administrative Agent and the
Secured Parties may determine.

6. Amendments, etc. with respect to the Obligations; Waiver of Rights. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against such Guarantor and without notice to or further
assent by such Guarantor, any demand for payment of any of the Obligations made
by the Administrative Agent or any Secured Party may be rescinded by such party
and any of the Obligations continued, and any of the Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Secured Party, and the Credit Agreement, the Notes and the other
Loan Documents and any other documents executed and delivered in connection
therewith or in connection with any other Obligations may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent (or
the Required Lenders or other requisite Secured Parties, as the case may be) may
deem advisable from time to time in accordance with the provisions thereof, and
any collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any Secured Party for the payment of any of the
Obligations may be sold, exchanged, waived, surrendered or released in
accordance with the provisions of the Loan Documents. Neither the Administrative
Agent nor any Secured Party shall have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for any of the
Obligations or for this Guarantee or any property subject thereto. When making
any demand hereunder against any Guarantor, the Administrative Agent or any
Secured Party may, but shall be under no obligation to, make a similar demand on
any Loan Party, any other guarantor or any other Person, and any failure by the
Administrative Agent or any Secured Party to make any such demand or to collect
any payments from any such Loan Party, any such other guarantor or any such
other Person or any release of such Loan Party, such other guarantor or such
other Person shall not relieve any Guarantor of its obligations or liabilities
hereunder, and shall not impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Administrative Agent or any Secured Party
against such Guarantor. For the purposes hereof “demand” shall include the
commencement and continuance of any legal proceedings.

 

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7. Guarantee Absolute and Unconditional. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of reliance by the Administrative Agent or any Secured
Party upon this Guarantee or acceptance of this Guarantee, the Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between the Loan Parties and the Guarantors, on the
one hand, and the Administrative Agent and the Secured Parties, on the other
hand, likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Guarantee. Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Loan Parties, any Guarantor or any other Person with respect to the Obligations.
Each Guarantor understands and agrees that this Guarantee shall be construed as
a continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity, regularity or enforceability of the Credit Agreement, any
Note, any other Loan Document or any other document relating to any Obligations,
any of the Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Secured Party, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Loan Parties against the
Administrative Agent or any Secured Party, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of any Loan Party or any
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of any Loan Party or any other Person for any of the
Obligations, or of any Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent and any Secured Party may, but shall be
under no obligation to, pursue such rights and remedies as it may have against
any Loan Party or any other Person or against any collateral security or
guarantee for any of the Obligations or any right of offset with respect
thereto, and any failure by the Administrative Agent or any Secured Party to
pursue such other rights or remedies or to collect any payments from any such
Loan Party or any such other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
any such Loan Party or any such other Person or any such collateral security,
guarantee or right of offset, shall not relieve any Guarantor of any liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent
and the Secured Parties against any Guarantor.

8. Reinstatement. This Guarantee shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent or any Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Loan Party, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, any Loan Party or any substantial part of its
property, or otherwise, all as though such payments had not been made.

9. Not Affected by Bankruptcy. Notwithstanding any modification, discharge or
extension of any of the Obligations or any amendment, modification, stay or cure
of any Secured Party’s rights which may occur in any bankruptcy or
reorganization case or proceeding against any Loan Party or any other Guarantor,
whether permanent or temporary, and whether or not assented to by any of the
Secured Parties, each of the Guarantors hereby agrees that the Guarantors shall
be obligated hereunder to pay and perform the Obligations and discharge their
other obligations in accordance with the terms of the Obligations and the terms
of this Guarantee. Each Guarantor understands and acknowledges that, by virtue
of this Guarantee, it has specifically assumed any and all risks of a bankruptcy
or reorganization case or proceeding with respect to any Loan Party or any other
Guarantor. Without in any way limiting the generality of the foregoing, any
subsequent modification of any of the Obligations in any reorganization case
concerning any Loan Party shall not affect the obligation of any Guarantor to
pay and perform the Obligations in accordance with the original terms thereof.

 

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10. Payments. Each Guarantor hereby guarantees that payments hereunder will be
paid to the Administrative Agent without set-off or counterclaim in United
States Dollars at the office of the Administrative Agent specified in
Section 11.2 of the Credit Agreement.

11. Keepwell. Each Qualified Keepwell Provider hereby jointly and severally
absolutely, unconditionally, and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each other Loan Party to
honor all of its obligations under this Guarantee in respect of any Swap
Obligation (provided, however, that each Qualified Keepwell Provider shall only
be liable under this Section 11 for the maximum amount of such liability that
can be hereby incurred without rendering its obligations under this Section 11,
or otherwise under this Guarantee, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount).
The obligations of each Qualified Keepwell Provider under this Section 11 shall
remain in full force and effect until the Obligations are paid in full, no
Letters of Credit remain outstanding (except for Letters of Credit which have
been fully Cash Collateralized) and the Commitments are terminated. Each
Qualified Keepwell Provider intends that this Section 11 constitute, and this
Section 11 shall be deemed to constitute, a “keepwell, support, or other
agreement” for the benefit of each other Loan Party for all purposes of section
1a(18)(A)(v)(II) of the Commodity Exchange Act.

12. Representations and Warranties. Each Guarantor hereby represents and
warrants that:

(a) it (i) is duly formed or organized, validly existing and in good standing
under the Laws of the jurisdiction of its organization, (ii) has the corporate
(or analogous) power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (iii) is duly qualified as a foreign
entity and in good standing under the Laws of each jurisdiction where such
qualification is required, except where the failure to be so qualified or in
good standing could not reasonably be expected to have a Material Adverse Effect
and (iv) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect;

(b) it has the corporate (or analogous) power and authority, and the legal
right, to execute, deliver and perform the Loan Documents to which it is a party
and has taken all necessary corporate (or analogous) action to authorize the
execution, delivery and performance of this Guarantee and the other Loan
Documents to which it is a party. Except for (i) the filing of UCC financing
statements and equivalent filings for foreign jurisdictions and the taking of
applicable actions referred to in Section 5.16 of the Credit Agreement and
(ii) the filings or other actions listed on Schedule 5.4 to the Credit Agreement
(and including, without limitation, such other authorizations, approvals,
registrations, actions, notices, or filings as have already been obtained, made
or taken and are in full force and effect), no consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person, including without limitation the FERC, to which a
Guarantor or other Loan Party is subject, is required in connection with the
borrowings under the Credit Agreement or with the execution, delivery, validity
or enforceability of the Loan Documents to which each Guarantor is a party;
provided that approval by the FERC may be required for the transfer of direct or
indirect ownership or control of FERC Contract Collateral; provided, further,
that no approval of the FERC is required for the granting of the security
interest in the FERC Contract Collateral to the Administrative Agent pursuant to
the Security Documents. As of the Closing Date, the only contracts comprising
FERC Contract Collateral of the Guarantors and their Subsidiaries as to which
further consent of the FERC may be required in connection with the exercise of
remedies by the Administrative Agent under the Loan Documents are contracts for
the transportation and storage of certain Eligible Commodities;

 

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(c) this Guarantee (i) has been, and each other Loan Document to which such
Guarantor is a party will be, duly executed and delivered on behalf of the
Guarantors and (ii) constitutes, and each other Loan Document to which it is a
party when executed and delivered will constitute, a legal, valid and binding
obligation of such Guarantor enforceable against such Guarantor in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing;

(d) the execution, delivery and performance of this Guarantee and the other Loan
Documents to which such Guarantor is a party (i) will not violate any
Requirement of Law, including any rules or regulations promulgated by the FERC,
in any material respect or where a waiver has not been obtained, in each case to
the extent applicable to or binding upon such Guarantor or its Properties,
(ii) will not violate a material Contractual Obligation of any Guarantor, except
where such violation could not reasonably be expected to have a Material Adverse
Effect and (iii) will not result in, or require, the creation or imposition of
any Lien on any of such Guarantor’s properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation (other than Liens created by the
Security Documents in favor of the Administrative Agent and Liens permitted by
Section 8.3 of the Credit Agreement);

(e) no litigation or proceeding to which such Guarantor is party before any
arbitrator or Governmental Authority is pending or, to the knowledge of such
Guarantor, threatened by or against any Guarantor or against any of their
respective properties or revenues (i) with respect to any of the Loan Documents,
(ii) with respect to any of the transactions contemplated by or occurring
simultaneously with the entering into of any of the Loan Documents in which such
litigation or proceeding is material and has a reasonable basis in fact, or
(iii) which could, after giving effect to any insurance, bond or reserve,
reasonably be expected to have a Material Adverse Effect;

(f) except for matters disclosed on the title reports and surveys, including
without limitation, minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties and assets for their intended purposes, except where the failure to
have such title could not reasonably be expected to have a Material Adverse
Effect, it has defensible title in fee simple to, or a valid leasehold interest
in, all its real property, and good title to, or a valid leasehold interest in,
all its tangible personal property, and none of such property is subject to any
Lien except as permitted by Section 8.3 of the Credit Agreement; and

(g) it and each of its Subsidiaries has timely filed or caused to be filed all
material Tax returns required to be filed by it and has timely paid all material
Taxes due and payable by it or imposed with respect to any of its property and
all other material fees or other charges imposed on it or any of its property by
any Governmental Authority (other than any Taxes the amount or validity of which
are currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on its
books). There are no Liens for Taxes and no claim is being asserted with respect
to Taxes, except for statutory liens for Taxes not yet due and payable or for
Taxes the amount or validity of which are currently being contested in good
faith by appropriate proceedings and, in each case, with respect to which
reserves in conformity with GAAP have been provided on the books of such
Guarantor.

Each Guarantor agrees that the foregoing representations and warranties shall be
deemed to have been made by each Guarantor on the date of each borrowing by the
Borrower and the date of each issuance of a Letter of Credit under the Credit
Agreement on and as of such date of borrowing or issuance, as the case may be,
as though made hereunder on and as of such date.

 

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13. Covenants. Each Guarantor hereby covenants and agrees with the
Administrative Agent and each Secured Party that, from and after the date of
this Guarantee until the Obligations are paid in full, no Letters of Credit
remain outstanding (except for Letters of Credit which have been fully Cash
Collateralized) and the Commitments are terminated:

(a) if any Guarantor shall at any time acquire any shares of Capital Stock of
any direct or indirect Subsidiary (other than an Exempt CFC or any Subsidiary
thereof) which is not a Guarantor hereunder, such Guarantor and such Subsidiary
shall promptly deliver to the Administrative Agent an addendum to this
Guarantee, substantially in the form of Exhibit A to this Guarantee, duly
completed; and

(b) each Guarantor shall comply with each of the covenants and other obligations
applicable to the Borrower set forth in the Credit Agreement to the extent such
covenants and obligations relate to such Guarantor.

14. Authority of Administrative Agent. Each Guarantor acknowledges that the
rights and responsibilities of the Administrative Agent under this Guarantee
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, right, request, judgment
or other right or remedy provided for herein or resulting or arising out of this
guarantee shall, as between the Administrative Agent and the Secured Parties, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and each Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Guarantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.

15. Notices. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by facsimile transmission)
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made (a) in the case of delivery by overnight mail or delivery by
hand, when received, (b) in the case of delivery by mail, three (3) Business
Days after being deposited in the mails, postage prepaid, or (c) in the case of
delivery by facsimile transmission, when sent and receipt has been
electronically confirmed, addressed as follows:

(a) if to the Administrative Agent or any Secured Party, at its address or
transmission number for notices provided in Section 11.2 of the Credit
Agreement; and

(b) if to any Guarantor, at its address or transmission number for notices set
forth under its signature below or as provided in the addendum hereto pursuant
to which it was made a party hereto.

The Administrative Agent, each Secured Party and any Guarantor may change its
address and transmission numbers for notices by notice in the manner provided in
this Section.

16. Severability. Any provision of this Guarantee which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

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17. Integration. This Guarantee represents the agreement of each Guarantor with
respect to the subject matter hereof and there are no promises or
representations relative to the subject matter hereof not reflected herein.

18. Amendments in Writing; No Waiver; Cumulative Remedies.

(a) Neither this Guarantee nor any terms hereof may be amended, supplemented or
modified except in accordance with the provisions of Section 11.1 of the Credit
Agreement.

(b) No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any other Secured Party, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by Law.

19. Section Headings. The section headings used in this Guarantee are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

20. Successors and Assigns. This Guarantee shall be binding upon and inure to
the benefit of the Guarantors, the Administrative Agent and the other Secured
Parties and their respective successors and assigns, except that no Guarantor
may assign or transfer any of its rights or obligations under this Guarantee
without the prior written consent of the Administrative Agent and the requisite
Lenders pursuant to the Credit Agreement (and any purported such assignment or
transfer by a Guarantor without such consent of the Administrative Agent and
such requisite Lenders shall be null and void).

21. GOVERNING LAW. THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

22. Submission To Jurisdiction; Waivers. Each Guarantor hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Guarantee and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

 

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(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Guarantor at its
address set forth under its signature below or at such other address of which
the Administrative Agent shall have been notified pursuant hereto;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.

23. Acknowledgments. Each Guarantor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Guarantee and the other Loan Documents to which it is a party;

(b) neither the Administrative Agent nor any Secured Party has any fiduciary
relationship with or duty to any Guarantor arising out of or in connection with
this Guarantee or any of the other Loan Documents to which it is a party, and
the relationship between the Guarantors, the Borrower and the other Loan
Parties, on one hand, and the Administrative Agent and the Secured Parties, on
the other hand, in connection herewith or therewith is solely that of debtor and
creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Guarantors, the Borrower, any of the other Loan
Parties and the Secured Parties.

24. WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
GUARANTEE OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

25. Counterparts. This Guarantee may be executed by one or more of the parties
to this Guarantee on any number of separate counterparts (including by facsimile
transmission or other electronic transmission), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
Delivery of an executed signature page of this Guarantee by facsimile
transmission or other electronic transmission shall be effective as delivery of
a manually executed counterpart hereof. A set of the copies of this Guarantee
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.

[SIGNATURE PAGE FOLLOWS]

 

-10-

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

IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly
executed and delivered by its duly authorized officer as of the day and year
first above written.

 

SPRAGUE ENERGY SOLUTIONS INC., as a   Guarantor By:  

 

  Name:   Title: SPRAGUE TERMINAL SERVICES LLC, as a   Guarantor By:  

 

  Name:   Title: SPRAGUE CONNECTICUT PROPERTIES LLC, as   a Guarantor By:  

 

  Name:   Title: SPRAGUE RESOURCES LP, as a Guarantor By:  

 

  Name:   Title:

 

Signature Page to Guarantee

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

Address for Notice:

Sprague Resources LP

Two International Drive

Suite 200

Portsmouth, New Hampshire 03801

Attention: Paul Scoff, Esq.

Fax: (603) 430-5324

 

Signature Page to Guarantee

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

EXHIBIT A

To Guarantee

ADDENDUM TO GUARANTEE

Each of the undersigned,                                         , a
                     [corporation], (each, a “New Guarantor”, together the “New
Guarantors”):

(i) agrees to all of the provisions of the Guarantee, dated as of October 30,
2013 (as amended, supplemented or otherwise modified prior to the date hereof,
the “Guarantee”), made by signatories thereto as Guarantors (collectively, the
“Guarantors”), in favor of JPMORGAN CHASE BANK, N.A., as administrative agent
(in such capacity, the “Administrative Agent”), pursuant to the Credit
Agreement, dated as of October 30, 2013 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among SPRAGUE
OPERATING RESOURCES LLC, as the Borrower, the several banks and other financial
institutions or entities from time to time parties thereto, the Administrative
Agent, and the other agents party thereto; and

(ii) effective on the date hereof becomes a party to the Guarantee, as a
Guarantor, with the same effect as if each of the undersigned were an original
signatory to the Guarantee (with the representations and warranties contained
therein being deemed to be made by each New Guarantor on and as of the date
hereof).

Terms defined in the Guarantee and the Credit Agreement shall have such defined
meanings when used herein. This Addendum to Guarantee and the rights and
obligations of the parties hereunder shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.

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

By its acceptance hereof, each of the undersigned Guarantors hereby ratifies and
confirms its obligations under the Guarantee, as supplemented hereby.

 

[NAME OF NEW GUARANTOR] By:  

 

  Name:   Title:

 

Date: ACCEPTED AND AGREED: [                                         ] By:  

 

  Name:   Title: JPMORGAN CHASE BANK, N.A., as Administrative Agent By:  

 

  Name:   Title:

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

Exhibit O

to Credit Agreement

FORM OF COMPLIANCE CERTIFICATE

_________ __, 201_

This Compliance Certificate is delivered pursuant to Section 7.2(b) of the
Credit Agreement, dated as of October 30, 2013 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Sprague Operating Resources LLC, as Borrower, the Lenders from time to
time parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and
the other agents parties thereto. Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.

The undersigned, solely in his/her capacity as a Responsible Person of the
Borrower and not in his/her individual capacity, hereby certifies to the
Administrative Agent and the Lenders as follows:

1. I am a Responsible Person of the Borrower.

2. I have reviewed and am familiar with the contents of this Certificate.

3. I have reviewed the terms of the Credit Agreement and the Loan Documents and
have made or caused to be made under my supervision, a review in reasonable
detail of the transactions and conditions of each Loan Party during the
accounting period covered by the financial statements attached hereto as
Attachment 1 (the “Financial Statements”). Based on such review, I have no
knowledge of the existence, as of the date of this Certificate, of any condition
or event which constitutes a Default or Event of Default, in each case except as
disclosed on Schedule 1 hereto.

4. The Loan Parties are in material compliance with the Risk Management Policy.

5. Attached hereto as Attachment 2 are the computations showing compliance with
the financial covenants set forth in Section 8.1(a) [,(b), (c) and (d)]6 and
Section 8.7 of the Credit Agreement

6. The following information is true and correct in all material respects as of
the date hereof.

[SIGNATURE PAGE FOLLOWS]

 

 

6  Include in Compliance Certificates delivered for a period that ends on a date
which is also the end date of a fiscal quarter.

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

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
of the date set forth below.

Dated: ________ __, 201_

 

SPRAGUE OPERATING RESOURCES LLC, as     Borrower By:      

Name:

Title:

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

Attachment 1

Financial Statements

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

Attachment 2

Covenant Calculations

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

Exhibit P

to Credit Agreement

FORM OF INCREASE AND NEW LENDER AGREEMENT

This INCREASE AND NEW LENDER AGREEMENT, dated as of                      ,
201     (this “Agreement”), prepared pursuant to Section 4.1(b) of the Credit
Agreement, dated as of October 30, 2013 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among Sprague
Operating Resources LLC, as Borrower, the Lenders from time to time parties
thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other
agents parties thereto.

RECITALS

WHEREAS, pursuant to Section 4.1 of the Credit Agreement, the undersigned
Lenders party to the Credit Agreement (the “Increasing Lenders”) have agreed to
increase their [Working Capital Facility] [Acquisition Facility] Commitments as
governed by the Credit Agreement on the terms and subject to the conditions set
forth in this Agreement; and

WHEREAS, pursuant to Section 4.1 of the Credit Agreement, the undersigned
Persons not party to the Credit Agreement (the “New Lenders”) have agreed to
make [Working Capital Facility] [Acquisition Facility] Commitments under the
Credit Agreement on the terms and subject to the conditions set forth in this
Agreement;

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrower, the Administrative Agent, the Increasing Lenders and the New Lenders
hereby agree as follows:

1. Defined Terms. Unless otherwise defined herein, terms defined in the Credit
Agreement are used herein as therein defined.

2. Increase Agreement and New Lender Agreement.

(a) Each Increasing Lender party to this Agreement hereby agrees to increase its
respective [Working Capital Facility] [Acquisition Facility] Commitment, in the
amount set forth on Schedule 1.0, such increase to be effective as of
                     , 201     (the “Increase Effective Date”).

(b) Each New Lender party to this Agreement hereby agrees to make [Working
Capital Facility] [Acquisition Facility] Loans to the Borrower and participate
in [Working Capital Facility] [Acquisition Facility] Letters of Credit from
time-to-time in an aggregate principal amount at any one time outstanding not to
exceed its respective [Working Capital Facility] [Acquisition Facility]
Commitment (as set forth on Schedule 1.0), such agreement to be effective as of
the Increase Effective Date. From and after the Increase Effective Date, each
New Lender shall be a party to the Credit Agreement and, to the extent provided
in this Agreement, have the rights and obligations of a [Working Capital
Facility] [Acquisition Facility] Lender under the Credit Agreement and under the
other Loan Documents and shall be bound by the provisions thereof.

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

3. Maximum Credit Limit; Increasing Lenders; New Lenders. Effective upon the
Increase Effective Date, the [Working Capital Facility] [Acquisition Facility]
Commitment for each Increasing Lender and each New Lender shall be as set forth
on Schedule 1.01.

4. Conditions Precedent. This Agreement shall become effective upon the
satisfaction of the following conditions precedent:

(a) Increase Documents. The Administrative Agent shall have received (each of
the following documents being referred to herein as an “Increase Document”):

(i) this Agreement, executed and delivered by a duly authorized officer of the
Borrower, the Administrative Agent and each New Lender and Increasing Lender;

(ii) for the account of each such New Lender and Increasing Lender requesting
the same, a Note of the Borrower conforming to the requirements of the Credit
Agreement, and reflecting the [Working Capital Facility] [Acquisition Facility]
Commitment of such Lender after giving effect to this Agreement, executed by a
duly authorized officer of the Borrower;

(iii) a reaffirmation of the Guarantee, executed and delivered by a duly
authorized officer of each party thereto;

(iv) a reaffirmation of each Security Document, executed and delivered by a duly
authorized officer of each party thereto; and

(v) the Administrative Agent shall have received in respect of each Mortgaged
Property (A) such amendments to the Mortgage and Security Agreements as are in
form and substance reasonably satisfactory to the Administrative Agent, in each
case, executed and delivered by a duly authorized officer of the relevant Loan
Party to the extent necessary to reflect the increase in the Working Capital
Facility or the Acquisition Facility, as applicable, (it being understood that,
unless requested by the Administrative Agent, no amendment shall increase the
amount secured thereby if the same will result in the payment of additional
mortgage recording tax) and, (B) with respect to each such Mortgage and Security
Agreement, a date-down endorsement to the title insurance policy covering such
Mortgaged Property (or if a date-down is not available in a particular
jurisdiction, a new title insurance policy in the same insured amount as
originally issued or marked up unconditional title commitment, pro forma policy
or binder for such insurance) in each case in form and substance not materially
less favorable to the Administrative Agent or the Lenders as such title policies
or marked up unconditional title commitments, pro forma policies or binders
delivered on or prior to the Closing Date, (C) evidence satisfactory to it that
all premiums in respect of the related date-down endorsement or title policy (or
policies) have been paid, and (D) to the extent required by applicable Law a
standard flood hazard determination for each Mortgaged Property, and with
respect to any Mortgaged Property that is located in a special flood hazard
area, evidence of flood insurance in form and substance reasonably satisfactory
to the Administrative Agent.

(b) Increasing Lenders; New Lenders. The Administrative Agent shall have
received from each Increasing Lender and each New Lender the amounts required to
be paid by such Increasing Lenders and New Lenders pursuant to Section 4.1 of
the Credit Agreement.

 

1 The Working Capital Facility Increase Amount shall be in a minimum amount of
$5,000,000. Such amount shall not cause the aggregate respective facility
commitment to exceed (1) for the Working Capital Facility Commitment,
$950,000,000 or (2) for the Acquisition Facility Commitment, $450,000,000, in
each case in the aggregate during the Increase Period.

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

(c) Secretary’s Certificates. The Administrative Agent shall have received a
certificate of each Loan Party, dated as of the Increase Effective Date,
substantially in the form of Exhibit E to the Credit Agreement, with appropriate
insertions and attachments (provided that, any such Person may certify on such
certificate that its Governing Documents have not changed since the Closing Date
in lieu of attaching such Governing Documents to such certificate), reasonably
satisfactory in form and substance to the Administrative Agent, executed by the
President or any Vice President and the Secretary or any Assistant Secretary of
such Person, or, if applicable, of the general partner or managing member or
members of such Person, on behalf of such Person.

(d) Proceedings of the Loan Parties. The Administrative Agent shall have
received a copy of the resolutions, in form and substance reasonably
satisfactory to the Administrative Agent, of the Board of Directors (or
analogous body) of each Loan Party authorizing as applicable to such Person
(i) the execution, delivery and performance of this Agreement and the Notes
delivered on the Increase Effective Date and the other Increase Documents, and
the reaffirmations of the applicable Loan Documents to which it is a party, and
(ii) the reaffirmation by it of the Liens created pursuant to the Security
Documents, certified by the Secretary or an Assistant Secretary of such Person,
or, if applicable, of the general partner or managing member or members of such
Person as of the Increase Effective Date, which certification shall be included
in the certificate delivered in respect of such Person pursuant to Section 4(c),
shall be in form and substance reasonably satisfactory to the Administrative
Agent and shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.

(e) Incumbency Certificates. To the extent the following have been amended,
supplemented or otherwise modified since the Closing Date, the Administrative
Agent shall have received a certificate of each Loan Party, dated the Increase
Effective Date, as to the incumbency and signature of the officers of such
Person or, if applicable, of the general partner or managing member or members
of such Person, executing any Increase Document, or having authorization to
execute any certificate, notice or other submission required to be delivered to
the Administrative Agent or a Lender pursuant to this Agreement, which
certificate shall be included in the certificate delivered in respect of such
Person pursuant to Section 4(c) and shall be reasonably satisfactory in form and
substance to the Administrative Agent.

(f) Organizational Documents. To the extent the following have been amended,
supplemented or otherwise modified since the Closing Date, the Administrative
Agent shall have received true and complete copies of the Governing Documents of
each Loan Party, certified as of the date hereof as complete and correct copies
thereof by the Secretary or an Assistant Secretary of such Person, or, if
applicable, of the general partner or managing member or members of such Person,
on behalf of such Person, which certification shall be included in the
certificate delivered in respect of such Person pursuant to Section 4(c) and
shall be in form and substance reasonably satisfactory to the Administrative
Agent.

(g) Good Standing Certificates. The Administrative Agent shall have received
certificates (long form, if available) dated as of a recent date from the
Secretary of State or other appropriate authority, evidencing the good standing
of each Loan Party (i) in the jurisdiction of its organization and (ii) in each
other jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires it to qualify as a foreign Person except, as to
this subclause (ii), where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect.

(h) Consents, Licenses and Approvals. The Administrative Agent shall have
received a certificate of a Responsible Person of the Borrower either
(i) attaching copies of all consents, authorizations and filings referred to in
Section 5.4 of the Credit Agreement, and stating that such consents,
authorizations and filings are in full force and effect, and each such consent,
authorization and filing shall be in form and substance reasonably satisfactory
to the Administrative Agent or (ii) stating that no such consents,
authorizations or filings are so required.

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

(i) Legal Opinions. The Administrative Agent shall have received the executed
legal opinion of counsel to the Borrower, in form and substance reasonably
satisfactory to the Administrative Agent. The legal opinion shall cover such
matters incident to the transactions contemplated by this Agreement as the
Administrative Agent, the Increasing Lenders and the New Lenders may reasonably
require in accordance with customary opinion practice.

(j) Other Conditions. Each of the other conditions to the Increase Effective
Date provided in Section 4.1(b) of the Credit Agreement shall have been
satisfied.

5. Representations and Warranties. To induce the New Lenders and Increasing
Lenders to enter into this Agreement, the Borrower hereby represents and
warrants to the undersigned Lenders that, after giving effect to the increase of
the [Working Capital Facility][Acquisition Facility]Commitment and the other
modifications to the Credit Agreement provided for herein, the representations
and warranties contained in the Credit Agreement and the other Loan Documents
will be true and correct in all material respects as of the date hereof, except
for those representations and warranties that by their terms were made as of a
specified date which shall be true and correct on and as of such date, and that
no Default or Event of Default has occurred and is continuing.

6. Availability Certification. The undersigned hereby, solely in his capacity as
a Responsible Person of the Borrower and not in his individual capacity,
certifies that he is a Responsible Person of the Borrower and further certifies
as follows that, after giving effect to any extension of credit being made on
the Increase Effective Date:

 

  (a) the sum of the Total Working Capital Facility Extensions of Credit and the
Total Acquisition Facility Working Capital Extensions of Credit shall not exceed
the Borrowing Base as of such date;

 

  (b) the Total Acquisition Facility Acquisition Extensions of Credit shall not
exceed the Eligible Acquisition Asset Value;

 

  (c) the Total Acquisition Facility Extensions of Credit shall not exceed the
aggregate Acquisition Facility Commitments;

 

  (d) the Total Working Capital Facility Extensions of Credit shall not exceed
the aggregate Working Capital Facility Commitments;

 

  (e) such extension of credit shall not result in any Applicable Sub-Limit
being exceeded, and

 

  (f) with respect to any such extension of credit under the Acquisition
Facility, the Borrower shall be in compliance with the covenants set forth in
Section 8.1 of the Credit Agreement calculated on a Pro Forma Basis.

The foregoing certifications and the representations contained in Section 6
hereof shall collectively be deemed to constitute the Availability Certificate
required to be delivered in connection with this Agreement pursuant to
Section 4.1(b)(iii)(E) of the Credit Agreement, and such requirements shall be
deemed satisfied upon receipt of this Agreement by the Administrative Agent.

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

7. Disclaimer. Each New Lender and each Increasing Lender acknowledges and
agrees that no Lender party to the Credit Agreement (i) has made any
representation or warranty and shall have no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Loan Document or any other instrument or document furnished
pursuant thereto; or (ii) has made any representation or warranty and shall have
no responsibility with respect to the financial condition of the Borrower or any
other obligor or the performance or observance by the Borrower or any obligor of
any of their respective obligations under the Credit Agreement or any other Loan
Document or any other instrument or document furnished pursuant hereto or
thereto. Each Increasing Lender and each New Lender represents and warrants that
it is legally authorized to enter into this Agreement, and each New Lender
(i) confirms that it has received a copy of the Credit Agreement, together with
copies of the financial statements most recently delivered pursuant to
Section 7.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Agreement; (ii) agrees that it will, independently and without reliance upon the
Lenders, the Administrative Agent or any other 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 the Credit Agreement,
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (iii) appoints and authorizes each Agent to take such action
as agent on its behalf and to exercise such powers and discretion under the
Credit Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto as are delegated to such Agent by the terms
thereof, together with such powers as are incidental thereto; and (iv) agrees
that it will be bound by the provisions of the Credit Agreement and will perform
in accordance with its terms all the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender.

8. No Other Amendments or Waivers. Except as expressly amended or waived hereby,
the Credit Agreement, the Notes and the other Loan Documents shall remain in
full force and effect in accordance with their respective terms, without any
waiver, amendment or modification of any provision thereof.

9. Counterparts. This Agreement may be executed by one or more of the parties
hereto on any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.

10. Applicable Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

[SIGNATURE PAGES FOLLOW]

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.

 

SPRAGUE OPERATING RESOURCES LLC, as Borrower

By:      

Name:

Title:

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

LENDERS

 

[NAME OF LENDER]

By:      

Name:

Title:

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

By:      

Name:

Title:

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

Schedule 1.0

to Increase and New Lender Agreement

INCREASING LENDERS

 

Lender

   Commitment    Applicable Lending Office

NEW LENDERS

 

Lender

   Commitment    Applicable Lending Office

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

Exhibit Q

to Credit Agreement

FORM OF PERFECTION CERTIFICATE

PERFECTION CERTIFICATE

October [    ], 2013

Reference is made to (i) that certain Credit Agreement dated as of October 30,
2013 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Sprague Operating Resources LLC (the
“Borrower”), the Lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent (in such capacity, the “Administrative Agent”),
and the other agents parties thereto, (ii) that certain Security Agreement,
dated as of October 30, 2013 (as amended, restated, supplemented or otherwise
modified from time to time, the “Security Agreement”), among the Borrower and
the other Grantors (as defined in the Security Agreement) and the Administrative
Agent and (iii) that certain Pledge Agreement, dated as of October 30, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Pledge Agreement”), among the Pledgors (as defined in the Pledge Agreement) and
the Administrative Agent. Capitalized terms used but not defined herein have the
meanings assigned in the Credit Agreement , the Security Agreement and the
Pledge Agreement.

As of the date hereof, the undersigned hereby certify to the Administrative
Agent as follows:

1. Names; Jurisdiction; Current Locations.

(a) The full and exact legal name of each Grantor, as such name appears in its
respective certificate or articles of incorporation, limited liability
membership agreement or similar organizational documents, in each case as
amended to date, is set forth in Section I(A) of the Information Certificate
attached hereto (the “Information Certificate”). Also set forth in Section I(A)
is the type of organization, the jurisdiction of organization (or formation, as
applicable), and the organizational identification number of each Grantor.

(b) The chief executive office address and the preferred mailing address (if
different than chief executive office or reside) of each Grantor is set forth in
Section I(B) of the Information Certificate.

(c) All trade names or assumed names currently used by any Grantor or by which
any Grantor is known or is transacting any business are set forth in Section
I(C) of the Information Certificate.

(d) Except as set forth in Section I(D) of the Information Certificate, no
Grantor has changed its name, jurisdiction of organization or its corporate
structure in any way within the past five (5) years. Changes in identity or
corporate structure would include mergers, consolidations, changes in corporate
form and changes in jurisdiction of organization.

(e) Except as set forth in Section I(E) of the Information Certificate, no
Grantor has changed its chief executive office within the past five (5) years.

(f) Except as set forth in Section I(F) of the Information Certificate, no
Grantor has acquired the equity interests of another entity or substantially all
the assets of another entity within the past five (5) years.

(g) Exhibit A to the Information Certificate is a true and correct chart showing
the ownership relationship of the Borrower and all of its Subsidiaries and
Affiliates.

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

2. Tangible Personal Property; Real Property.

(a) Set forth in Section II(A) of the Information Certificate are all the
locations where any Grantor currently maintains or has maintained any material
amount of its tangible personal property (including but not limited to Goods,
Inventory and Equipment) whether or not in the possession of such Grantor within
the past five (5) years.

(b) Set forth in Schedule 1 to the Information Certificate is:

(i) each street address and county and state or similar jurisdiction where each
Grantor owns real property, the nature and current use of such property and
whether such property includes fixtures;

(ii) each street address and county and state or similar jurisdiction where each
Grantor leases real property, the name and current mailing address of the lessor
of such property, the nature and current use of such property, the scheduled
date of expiration of the lease with respect to such property and whether such
property includes fixtures; and

(iii) the name and current mailing address of each lessee or sublessee with
respect to all or any portion of any real property described in paragraphs
(i) or (ii) above, a description of the leased property, the scheduled date of
expiration of the lease with respect to such real property and the monthly
rental payments receivable by any Grantor with respect to such property.

(c) Except as set forth in Section II(C) of the Information Certificate, no
persons (including warehousemen and bailees) other than another Grantor have
possession of any material amount of assets of any Grantor.

3. Commercial Tort Claims. Set forth in Section II(D) of the Information
Certificate is a true and correct list of all commercial tort claims held by any
Grantor, including a brief description thereof.

4. Stock Ownership and Other Equity Interests. Set forth in Section III(A) of
the Information Certificate is a true and correct list, for each Grantor, of all
the issued and outstanding stock, partnership interests, limited liability
company membership interests or other equity interests owned, beneficially or of
record, by such Grantor, specifying (i) the issuer, (ii) the type of
organization of the issuer, (iii) the number of shares owned, (iv) the total
number of shares outstanding, (v) the percentage of interested pledged pursuant
to the Pledge Agreement, (vi) the certificate number (if any) and (vii) the par
value of such equity interests.

5. Securities Accounts and Deposit Accounts.

(a) Set forth in Section III(B) of the Information Certificate is a true and
correct list of all securities accounts in which each Grantor customarily
maintains securities or other assets, including the name and address of the
intermediary institution and the type of account.

(b) Set forth in Section III(C) of the Information Certificate is a true and
correct list of all depository accounts maintained by each Grantor, including
the name and address of the depository institution and the type of account.

6. Debt Instruments. Set forth in Section III(D) of the Information Certificate
is a true and correct list, for each Grantor, of all instruments (including,
without limitation, promissory notes) owed to any Grantor in a principal amount
that is greater than $1,000,000, specifying the issuer, the principal amount and
the maturity date, of the instrument and whether such instrument is secured or
unsecured.

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

7. Intellectual Property. Set forth in Section IV of the Information Certificate
is a true and correct list, with respect to each Grantor, of (i) all copyrights
and copyright applications, (ii) all patents and patent applications, (iii) all
trademark registration and applications and (iv) all other material intellectual
property owned or used, or hereafter adopted, held, licensed or used, by such
Grantor, including to the extent available, the filing date, status and the
registration, application or publication number, as applicable.

[The remainder of this page has been intentionally left blank]

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

IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate as of
the first date written above.

 

SPRAGUE OPERATING RESOURCES LLC By:  

 

  Name:   Title: SPRAGUE ENERGY SOLUTIONS INC. By:  

 

  Name:   Title: SPRAGUE TERMINAL SERVICES LLC By:  

 

  Name:   Title: SPRAGUE CONNECTICUT PROPERTIES LLC By:  

 

  Name:   Title: SPRAGUE RESOURCES LP By:  

 

  Name:   Title:

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

INFORMATION CERTIFICATE

 

I. CURRENT INFORMATION

A. Legal Names, Organizations, Jurisdictions of Organization and Organizational
Identification Numbers.

 

Name of Grantor

 

Type of
Organization (e.g.

corporation, limited liability
company, limited

partnership)

 

Jurisdiction of

Organization/

Formation

  

Organizational

Identification

Number

                    

B. Chief Executive Offices and Mailing Addresses.

 

Name of Grantor

 

Address of Chief Executive Office

 

Mailing Address

(if different than CEO)

           

C. Trade Names/Assumed Names.

 

Grantor

 

Trade/Assumed Name

     

D. Changes in Names, Jurisdiction of Organization or Corporate Structure.

 

Grantor

 

Date of Change

 

Description of Change

           

E. Prior Addresses.

 

Grantor

 

Prior Address/City/State/Zip Code

     

F. Acquisitions of Equity Interests or Assets.

 

Grantor

 

Date of Acquisition

 

Description of Acquisition

           

G. Corporate Ownership and Organizational Structure.

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

Attached as Exhibit A is a true and correct chart showing the ownership
relationship of the Borrower and all of its Subsidiaries and Affiliates.

 

II. ADDITIONAL INFORMATION

A. Tangible Personal Property.

 

Grantor

 

Address/City/State/Zip Code

 

County

           

B. Real Property. Please see Schedule 1 attached hereto.

C. Warehousemen and Bailees.

 

Grantor

 

Address/City/State/Zip Code

 

County

  

Description of Assets

and Value

                                  

D. Commercial Tort Claims.

 

Grantor

 

Claim

 

Description

           

 

III. INVESTMENT RELATED PROPERTY

A. Securities.

 

Grantor

 

Issuer

 

Type of
Organization

 

# of

Shares

Owned

 

Total

Shares
Outstanding

 

% of

Interest

Pledged

 

Certificate

No. (if
uncertificated,
please indicate
so

 

Par

Value

                           

B. Securities Accounts.

 

Grantor

 

Type of Account

 

Name & Address of

Financial Institutions

   

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

C. Deposit Accounts.

 

Grantor

 

Type of Account

 

Name & Address of

Financial Institutions

         

D. Instruments.

 

Grantor

 

Issuer of Instrument

 

Principal
Amount
of Instrument

 

Maturity Date

 

Secured/
Unsecured

               

 

IV. INTELLECTUAL PROPERTY

 

Grantor

 

Trademarks and
Trademark

Applications

 

Filing Date

  

Status

  

Registration No.

                                       

 

Grantor

 

Patents and Patent
Applications

 

Filing Date

  

Status

  

Registration No.

                                       

 

Grantor

 

Copyrights and

Copyright Applications

 

Filing Date

  

Status

  

Registration No.

                                       

 

Grantor

 

Licensed Intellectual

Property

 

Description of License Agreement

               

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

Exhibit A

[Attach Organizational Chart]

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

Schedule 1

Real Property

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

Exhibit R

to Credit Agreement

FORM OF MARKED-TO-MARKET REPORT

JPMorgan Chase Bank, N.A., as Administrative Agent

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

The Relationship Managers at each Lender

 

  Re: Marked-to-Market Report

Reference is made to the Credit Agreement, dated as of October 30, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Sprague Operating Resources LLC, as Borrower, the
Lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, and the other agents parties thereto. Capitalized terms
used herein but not defined herein shall have the meanings provided in the
Credit Agreement. This Marked-to-Market Report has been prepared pursuant to
Section 7.2(d) of the Credit Agreement and the undersigned, solely in his/her
capacity as a Responsible Person of the Borrower and not in his/her individual
capacity, hereby certifies on behalf of the Borrower to the Administrative Agent
and the Lenders, as follows:

1. attached hereto as Schedule A is a report identifying (i) all positions for
all future time periods, (ii) all instruments that create either an obligation
to purchase or sell Product or that generate price exposure and (iii) the
unrealized marked-to-market margin for the position considered; and

2. the information contained herein and scheduled hereto is true and correct in
all material respects as of the date hereof.

[SIGNATURE PAGE FOLLOWS]

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

IN WITNESS WHEREOF, the undersigned has executed this Marked-to-Market Report as
of the date set forth below.

Dated: ________ __, 201_

 

SPRAGUE OPERATING RESOURCES LLC, as Borrower

By:      

Name:

Title:

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

Schedule A

to Marked-to-Market Report

[To be provided]

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

Exhibit S

to Credit Agreement

FORM OF BORROWER’S CERTIFICATE

Pursuant to Sections 6.1(h), (i) and (m) of the Credit Agreement dated as of
October 30, 2013 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”; terms defined therein being used herein as
therein defined), among Sprague Operating Resources LLC, as Borrower, the
Lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent (in such capacity, the “Administrative Agent”), and the
other agents parties thereto, the undersigned, solely in his/her capacity as a
Responsible Person of the Borrower and not in his/her individual capacity,
hereby certifies as follows:

 

  (i) the representations and warranties contained in Section 5 of the Credit
Agreement and in each of the other Loan Documents are true and correct in all
material respects on and as of the date hereof, as though made on and as of such
date;

 

  (ii) no Default or Event of Default exists as of the date hereof;

 

  (iii) there has not occurred since December 31, 2012, a Material Adverse
Effect;

 

  (iv) attached as Exhibit A hereto is a true and correct copy of the Risk
Management Policy in full force and effect as of the Closing Date; and

 

  (v) except for the filing of Uniform Commercial Code financing statements and
equivalent filings for foreign jurisdictions and the taking of applicable
actions referred to in Section 5.16 of the Credit Agreement, [attached as
Exhibit B hereto is a list of all consents, authorizations and filings referred
to in Section 5.4 of the Credit Agreement, all of which are in full force and
effect as of the date hereof.][no consents, licenses, or approvals referred to
in Section 5.4 of the Credit Agreement are required.]

[SIGNATURE PAGE FOLLOWS]

 

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

IN WITNESS WHEREOF, the undersigned has executed this Borrower’s Certificate as
of the date and year first above written.

 

SPRAGUE OPERATING RESOURCES LLC, as Borrower

By:      

Name:

Title:

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

Exhibit A

to Borrower’s Certificate

RISK MANAGEMENT POLICY

[To be provided]

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

Exhibit B

to Borrower’s Certificate

CONSENTS, AUTHORIZATIONS AND FILINGS

[To be provided]

 

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

Exhibit T

to Credit Agreement

FORM OF HEDGING AGREEMENT QUALIFICATION NOTICE

_________ __, 201_

JPMorgan Chase Bank, N.A., as Administrative Agent

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

 

  Re: Hedging Agreement Qualification Notification

Reference is made to the Credit Agreement, dated as of October 30, 2013 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Sprague Operating Resources LLC, as Borrower, the
Lenders from time to time parties thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, and the other agents parties thereto. Capitalized terms
used herein but not defined herein shall have the meanings provided in the
Credit Agreement.

(a) This Hedging Agreement Qualification Notification is being delivered
pursuant to the terms of the Credit Agreement, and the undersigned (the “Hedging
Counterparty”) hereby represents to the Administrative Agent that:

 

  1. It is a counterparty to a [Financial Hedging][Commodity OTC] Agreement with
[                    ], dated as of                     , 20     (the “Hedging
Agreement”).

 

  2. At the time the Hedging Agreement was entered into, the Hedging
Counterparty was a Lender under the Credit Agreement or if the Hedging Agreement
was entered into prior to the Closing Date, the Hedging Counterparty was a
lender under the Existing Credit Agreement at the time the Hedging Agreement was
entered into and was a Lender on the Closing Date.

 

  3. It is not a Defaulting Lender under the Credit Agreement.

 

  4. The aggregate unrealized amounts due to it under the Hedging Agreement as
of the date hereof is:

  $                     .

(b) The Hedging Counterparty hereby acknowledges and agrees to the terms of the
Loan Documents, including, without limitation, Section 10 of the Credit
Agreement and Sections 8 and 10 of the Security Agreement.

The Hedging Counterparty hereby further acknowledges and agrees that:

This Hedging Agreement Qualification Notification shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. Delivery of an executed counterpart of a signature page of this Hedging
Agreement Qualification Notification by telecopy or

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

electronic transmission (in .pdf format) shall be effective as delivery of a
manually executed counterpart of this Hedging Agreement Qualification
Notification. THIS HEDGING AGREEMENT QUALIFICATION NOTIFICATION AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

Very truly yours,

 

[QUALIFIED COUNTERPARTY]

By:      

Name:

Title:

 

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

Exhibit U

to Credit Agreement

FORM OF JOINDER AGREEMENT

JOINDER AGREEMENT, dated as of                     , 20     (this “Agreement”),
among the Existing Borrower, the MLP, the Borrowers’ Agent, the New Borrower and
the Administrative Agent (as each such term is defined below).

RECITALS

Pursuant to Section 11.19 of that certain Credit Agreement, dated as of
October 30, 2013 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among Sprague Operating Resources LLC
(the “Existing Borrower”), the Lenders from time to time parties thereto,
JPMorgan Chase Bank, N.A., as Administrative Agent, and the other agents parties
thereto, the undersigned Person not party to the Credit Agreement (the “New
Borrower”) is a Subsidiary of the Existing Borrower and has agreed to become
party to the Credit Agreement on the terms and subject to the conditions set
forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Existing Borrower, the New Borrower and the Administrative Agent hereby agree as
follows:

1. Defined Terms. Unless otherwise defined herein, terms defined in the Credit
Agreement are used herein as therein defined.

2. Joinder.

(a) The New Borrower hereby agrees to be bound by all of the provisions of the
Credit Agreement, and effective on the date hereof becomes a party to the Credit
Agreement as a Borrower (the “Joinder Effective Date”) with the same effect as
if it were an original signatory to the Credit Agreement. All obligations of the
Borrowers under the Credit Agreement shall be joint and several. All references
to the “Borrower” in the Credit Agreement shall be deemed to refer to each of
the Existing Borrower and the New Borrower or the New Borrower, in each case as
necessary or advisable to permit the New Borrower to borrow Loans and request
Letters of Credit under the Credit Agreement and as otherwise required or
advisable in connection therewith. From and after the Joinder Effective Date,
the New Borrower shall have the rights and obligations of a Borrower under the
Credit Agreement and under the other Loan Documents and shall be bound by the
provisions thereof.

(b) All notices to the New Borrower required to be delivered pursuant to the
Credit Agreement and all other notices or correspondence shall be directed to
Sprague Operating Resources LLC (in such capacity, the “Borrowers’ Agent”),
acting as the designated agent of the Existing Borrower and the New Borrower for
receipt of all such notices. Each of the Borrower and the New Borrower hereby
appoints the Borrowers’ Agent to act on its behalf under the Credit Agreement
and the other Loan Documents and has authorized the Borrowers’ Agent to take
such actions on its behalf and to exercise such powers as are delegated to the
Borrowers’ Agent by the terms hereof, together with such actions and powers as
are reasonably incidental thereto, and that the Borrowers’ Agent hereby accepts
such appointment. Such appointment shall not be terminated or revoked without
the consent of the Administrative Agent and the Required Lenders.

 

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

3. Conditions Precedent. This Agreement shall become effective upon the
satisfaction of the following conditions precedent:

(a) Documents. The Administrative Agent shall have received (each of the
following documents being referred to herein as an “Additional Document”):

(i) this Agreement, executed and delivered by a duly authorized officer of the
Existing Borrower, the MLP, the Borrowers’ Agent and the New Borrower;

(ii) if the New Borrower is not a Grantor immediately prior to the effectiveness
of this Agreement, an Addendum to the Security Agreement in form and substance
substantially similar to Annex D to the Security Agreement, executed and
delivered by a duly authorized officer of the New Borrower, pursuant to which
the New Borrower becomes a Grantor;

(iii) if the New Borrower is not a Pledgor immediately prior to the
effectiveness of this Agreement, a Supplement to the Pledge Agreement in form
and substance substantially similar to Exhibit A to the Pledge Agreement,
executed and delivered by a duly authorized officer of the New Borrower,
pursuant to which the New Borrower becomes a Pledgor;

(iv) [reserved];

(v) for each Working Capital Facility Lender requesting the same, a Note of the
New Borrower substantially in the form of Exhibit A-1 and conforming to the
requirements of the Credit Agreement and executed by a duly authorized officer
of the New Borrower;

(vi) [reserved];

(vii) for each Swing Line Lender requesting the same, a Note of the New Borrower
substantially in the form of Exhibit A-2 and conforming to the requirements of
the Credit Agreement and executed by a duly authorized officer of the New
Borrower; and

(viii) for each Acquisition Facility Lender requesting the same, a Note of the
New Borrower substantially in the form of Exhibit A-3 and conforming to the
requirements of the Credit Agreement and executed by an authorized officer of
the New Borrower.

(b) Secretary’s Certificate. The Administrative Agent shall have received a
certificate of the New Borrower, dated as of the Joinder Effective Date,
substantially in the form of Exhibit E to the Credit Agreement, with appropriate
insertions and attachments, reasonably satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of the New Borrower, or, if applicable, of
the general partner or managing member or members of the New Borrower.

(c) Proceedings. The Administrative Agent shall have received a copy of the
resolutions in form and substance reasonably satisfactory to the Administrative
Agent, of the Board of Directors (or analogous body) of the New Borrower
authorizing the execution, delivery and performance of this Agreement [and any
Notes] delivered on the Joinder Effective Date and the other Additional
Documents.

(d) Incumbency Certificate. The Administrative Agent shall have received a
certificate of the New Borrower, dated as of the date hereof, as to the
incumbency and signature of the officers of the New Borrower executing any
Additional Document, which certificate shall be included in the certificate
delivered pursuant to Section 3(b), shall be reasonably satisfactory in form and
substance to the Administrative Agent, and shall be executed by the President or
any Vice President and the Secretary or any Assistant Secretary of the New
Borrower, or, if applicable, of the general partner or managing member or
members of the New Borrower.

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

(e) Organizational Documents. The Administrative Agent shall have received true
and complete copies of the Governing Documents of the New Borrower, certified as
of the date hereof as complete and correct copies thereof by the Secretary or an
Assistant Secretary of the New Borrower, or, if applicable, of the general
partner or managing member or members of the New Borrower, which certification
shall be included in the certificate delivered pursuant to Section 3(b) and
shall be in form and substance reasonably satisfactory to the Administrative
Agent.

(f) Good Standing Certificates. The Administrative Agent shall have received
certificates dated as of a recent date from the Secretary of State or other
appropriate authority, evidencing the good standing of the New Borrower (i) to
the extent relevant under applicable laws, in the jurisdiction of its
organization and (ii) in each other jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires it to qualify as a
foreign Person except, as to this subclause (ii), where the failure to so
qualify could not have a Material Adverse Effect.

(g) Consents, Licenses and Approvals. The Administrative Agent shall have
received a certificate of an authorized officer of the New Borrower either
(i) attaching copies of all consents, authorizations and filings referred to in
Section 5.4 of the Credit Agreement, and stating that such consents, licenses
and filings are in full force and effect, and each such consent, authorization
and filing shall be in form and substance reasonably satisfactory to the
Administrative Agent or (ii) stating that no such consents, licenses or
approvals are so required.

(h) Certification of the Borrowers’ Agent. The Borrowers’ Agent confirms that no
Default or Event of Default is continuing or would occur as a result of the New
Borrower becoming a Borrower and each of the representations and warranties
relating to the New Borrower and the Loan Parties in the Credit Agreement (other
than the representations and warranties set forth in Sections 5.1, 5.4, 5.6,
5.7, 5.17 and 5.20) is true and not misleading in any material respect (except
that any representation and warranty that is qualified by “materiality” or
“Material Adverse Effect” shall be true and correct in all respects as so
qualified) as if made on the date of accession of the New Borrower.

(i) Legal Opinions. The Administrative Agent shall have received an executed
legal opinion of counsel to the New Borrower with respect to the jurisdiction of
incorporation, organization or formation of the New Borrower, in form and
substance reasonably satisfactory to the Administrative Agent.

(j) PATRIOT Act. The Administrative Agent shall have received all documentation
and other information requested by it that are required by bank regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including the USA PATRIOT Act.

5. No Other Amendments or Waivers. Except as expressly amended or waived hereby,
the Credit Agreement, any Notes issued thereunder and the other Loan Documents
shall remain in full force and effect in accordance with their respective terms,
without any waiver, amendment or modification of any provision thereof.

6. Effect on Credit Agreement. From and after the Joinder Effective Date, the
New Borrower shall be a party to the Credit Agreement and, to the extent
provided in this Agreement, have the rights and obligations of a Borrower
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof.

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

7. Loan Document. Each of the parties hereto agree that this Agreement
constitutes a “Loan Document” for all purposes under the Credit Agreement and
the other Loan Documents.

8. Counterparts. This Agreement may be executed by one or more of the parties
hereto on any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.

9. Applicable Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

[SIGNATURE PAGES FOLLOW]

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.

 

[NAME OF NEW BORROWER], as a Borrower By:      

Name:

Title:

 

SPRAGUE OPERATING RESOURCES LLC, as a Borrower and as Borrower’s Agent

By:      

Name:

Title:

 

JPMORGAN CHASE BANK, N.A. as Administrative Agent

By:      

Name:

Title:

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

Exhibit V

to Credit Agreement

FORM OF SOLVENCY CERTIFICATE

October [    ], 2013

Pursuant to Section 6.1(v) of the Credit Agreement, dated as of October 30, 2013
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”; terms defined therein being used herein as therein defined),
among Sprague Operating Resources LLC, a Delaware limited liability company (the
“Borrower”), the Lenders from time to time parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent (in such capacity, the “Administrative Agent”) and
the other agents parties thereto, the undersigned Chief Financial Officer of
[Sprague Resources LP, a Delaware limited partnership (the “MLP”)] [Sprague
Resources GP LLC, a Delaware limited liability company (the “General Partner”)]
hereby certifies on behalf of the MLP and its Subsidiaries, in the undersigned’s
capacity as an officer of the [MLP] [General Partner] and not in any individual
capacity, as follows:

As of the date hereof, the MLP and its Subsidiaries, considered as a whole after
giving effect to the transactions contemplated by the Credit Agreement, are
Solvent. As used in this paragraph, “Solvent” means (a) the amount of the
“present fair saleable value” of the assets of the MLP and its Subsidiaries,
considered as a whole, as of the date hereof, exceed the amount of all
“liabilities of the MLP and its Subsidiaries, considered as a whole, contingent
or otherwise”, as of such date, as such quoted terms are determined in
accordance with applicable federal and state laws governing determinations of
the insolvency of debtors, (b) the present fair saleable value of the assets of
the MLP and its Subsidiaries, considered as a whole, as of the date hereof, is
greater than the amount that is required to pay the liabilities of the MLP and
its Subsidiaries, considered as a whole, on its debts as such debts become
absolute and matured, (c) the MLP and its Subsidiaries, considered as a whole,
do not have, as of the date hereof, an unreasonably small amount of capital with
which to conduct its business, and (d) the MLP and its Subsidiaries, considered
as a whole, are able to pay its debts as they mature. For purposes of this
definition, (i) “debt” means “liability on a claim”, and (ii) “claim” means any
(x) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (y) right to an equitable
remedy for breach of performance if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.

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

IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date
set forth above.

 

     

Name:

Title:

 

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

Annex I

to Credit Agreement

FORM OF BORROWING NOTICE8

COMPANY NAME/HEADER

 

Borrowing Notice    Date:

JPMorgan Chase Bank, N.A.

10 S. Dearborn Street, 22nd Floor

Chicago, IL 60603

Attention:                    - Operations

Ladies and Gentlemen:

This Borrowing Notice is furnished pursuant to Section 2.5 of that certain
Credit Agreement dated as of October 30, 2013 (as amended, modified, renewed or
extended from time to time, the “Credit Agreement”) among Sprague Operating
Resources LLC (the “Borrower”), the lenders party thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent for the Lenders (in such capacity, the
“Administrative Agent”), and the other agents parties thereto. Unless otherwise
defined herein, capitalized terms used in this Borrowing Notice have the
meanings ascribed thereto in the Credit Agreement. The Borrower represents that,
as of this date, the conditions precedent set forth in Section [6.1 and]9 6.2 of
the Credit Agreement have been satisfied.

 

1. Borrowing Notice. The Borrower hereby notifies the Administrative Agent of
its request for the following borrowing (the “Borrowing”):

 

  (1) The Borrowing shall be a[n] [Acquisition Facility] [Working Capital
Facility] [Swing Line] Loan

 

  (2) [The Borrowing shall [be] [not be] a Working Capital Facility
Non-Maintenance Cap-Ex Extension of Credit]10

 

  (3) [The Borrowing shall be an [Acquisition Facility Acquisition Extension of
Credit] [Acquisition Facility Working Capital Extension of Credit] [Acquisition
Facility Maintenance Cap-Ex Extension of Credit]]11

 

  (4) [The purpose of the Borrowing is [ ]]12

 

  (5) The Borrowing shall be a          Base Rate Loan or          Eurodollar
Loan or          Base Rate Loan in an aggregate amount of $                    
and Eurodollar Loan in an aggregate amount of $                    13

 

  (6) Borrowing Date of the Borrowing (must be a Business
Day):                    

 

  (7) Aggregate amount of the Borrowing: $                    

 

 

8  With respect ot the Loans to be made on the Closing Date, the form of
Borrowing Notice shall be as agreed by the Administrative Agent.

9  Applicable to initial Loans only.

10  To be completed if the Loan is a Working Capital Facility Loan.

11  To be completed if the Loan is an Acquisition Facility Loan.

12  To be completed if the Loan is a Working Capital Facility Loan or an
Acquisition Facility Loan.

13  If borrowing a Eurodollar Loan, please also complete Exhibit A attached
hereto.

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

  (8) If any portion of the Borrowing is a Eurodollar Loan, the duration of
Interest Period:

 

  One Month            Three Months           Two Months            Six Months
       

Bank Name

City, State

ABA#

Account Name

Account #

2. Availability Certification. The undersigned hereby, solely in his capacity as
a Responsible Person of the Borrower and not in his individual capacity,
certifies that he is a Responsible Person of the Borrower and further certifies
as follows that, after giving effect to the extension of credit required
pursuant to this Borrowing Notice:

 

  10. the sum of Total Working Capital Facility Extensions of Credit and the
Total Acquisition Facility Working Capital Extensions of Credit shall not exceed
the Borrowing Base as of such date;

 

  11. the Total Acquisition Facility Acquisition Extensions of Credit shall not
exceed the Eligible Acquisition Asset Value;

 

  12. the Total Acquisition Facility Extensions of Credit shall not exceed the
aggregate Acquisition Facility Commitments;

 

  13. the Total Working Capital Facility Extensions of Credit shall not exceed
the aggregate Working Capital Facility Commitments;

 

  14. such extension of credit shall not result in any Applicable Sub-Limit
being exceeded; and

 

  15. with respect to any such extension of credit under the Acquisition
Facility, the Loan Parties shall be in compliance with the covenants set forth
in Section 8.1 of the Credit Agreement calculated on a Pro Forma Basis.

The foregoing certifications and representations shall collectively be deemed to
constitute the Availability Certification required to be delivered in connection
with this Borrowing Notice pursuant to Section 6.2(e) of the Credit Agreement,
and such requirements shall be deemed satisfied upon receipt of this Borrowing
Notice by the Administrative Agent.

 

SPRAGUE OPERATING RESOURCES LLC By:       Name:   Title:

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

Do not write below. For bank purposes only

 

__Customer’s signature(s) verified

 

Holds

__CFC Used

__Hold Placed/Pre-Approved

__Same-day Credit/Pre-Approved

  

__Call-back performed

 

By:________________________________________

Phone Number:______________________________

Spoke to:___________________________________

Date:_______________________________________

Time:______________________________________

RECEIVED BY (Print Name/Phone(Request Only))    INITIALS   
PROCESSED BY (Print name)    INITIALS AUTHORIZED APPROVAL (Print Name)   
AUTHORIZED SIGNATURE AUTHORIZED APPROVAL (Print Name)    AUTHORIZED SIGNATURE

 

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

Exhibit A

to Borrowing Notice

[Request for Eurodollar Loan]

Please see attached.

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

Annex II

to Credit Agreement

FORM OF CONTINUATION/CONVERSION NOTICE

JPMorgan Chase Bank, N.A., as Administrative Agent

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

[Date]

Ladies and Gentlemen:

This Continuation/Conversion Notice is delivered to you pursuant to Section 4.3
of the Credit Agreement, dated as of October 30, 2013 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Sprague Operating Resources LLC, as Borrower, the Lenders from time to
time parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and
the other agents parties thereto. Unless otherwise defined herein or the context
otherwise requires, capitalized terms used herein have the meanings provided in
the Credit Agreement.

The Borrower hereby requests that on [            ](the “Continuation/Conversion
Date”),

1. $[            ] of the presently outstanding principal amount of the [Working
Capital Facility] [Acquisition Facility] Loans originally made on
[            ],

2. and all presently being maintained as [Base Rate Loans] [Eurodollar Loans
with an Interest Period of [one][two][three][six] months]14,

3. be [Converted into][Continued as],

4. [Base Rate Loans] [Eurodollar Loans with an Interest Period of
[one][two][three][six] months]15.

The undersigned, solely in his capacity as a Responsible Person of the Borrower
and not in his individual capacity, hereby certifies that the following
statements are true on the date hereof, and will be true on the proposed
Continuation/Conversion Date, both before and after giving effect thereto and to
the application of the proceeds therefrom:

(i) the foregoing Continuation or Conversion complies with the terms and
conditions of the Credit Agreement (including, without limitation, Section 4.3
and Section 4.4 of the Credit Agreement); and

(ii) no Default or Event of Default has occurred and is continuing, or would
result from such proposed continuation or conversion.

[Signature page follows]

 

 

14  If continuing a Eurodollar Loan, please also complete Exhibit A attached
hereto.

15  If converting to a Eurodollar Loan, please also complete Exhibit A attached
hereto.

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

The Borrower has caused this Continuation/Conversion Notice to be executed and
delivered, and the certification and warranties contained herein to be made, by
its duly authorized officer this                      day of
                        , 201    .

 

SPRAGUE OPERATING RESOURCES LLC, as Borrower

By:      

Name:

Title:

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

Exhibit A

to Continuation/Conversion Notice

[Request for Continuation of /Conversion to a Eurodollar Loan]

Please see attached.

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

Annex III to

Credit Agreement

FORM OF NOTICE OF PREPAYMENT

JPMorgan Chase Bank, N.A., as Administrative Agent

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

[Date]

Ladies and Gentlemen:

This Notice of Prepayment is delivered to you pursuant to Section 4.6 of the
Credit Agreement, dated as of October 30, 2013 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Sprague Operating Resources LLC, as Borrower, the Lenders from time to
time parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and
the other agents parties thereto. Unless otherwise defined herein or the context
otherwise requires, capitalized terms used herein have the meanings provided in
the Credit Agreement.

The Borrower hereby notifies the Administrative Agent that it shall prepay
[Working Capital Facility] [Acquisition Facility] [Swing Line] Loans, on
                    , 201    , in aggregate principal amount[s] of
[$[            ] of [Working Capital Facility] [Acquisition Facility] [Swing
Line] Loans outstanding as Base Rate Loans] [and][$[            ] of [Working
Capital Facility] [Acquisition Facility] Loans outstanding as Eurodollar Loans].

[Signature page follows]

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The Borrower has caused this Notice of Prepayment to be executed and delivered
by its duly authorized officer this          day of                     ,
201    .

 

SPRAGUE OPERATING RESOURCES LLC, as Borrower

By:      

Name:

Title:

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Annex IV to

Credit Agreement

FORM OF CREDIT UTILIZATION SUMMARY SCHEDULE

[INSERT LETTERHEAD OF ISSUING LENDER]

[Date]

JPMorgan Chase Bank, N.A.

277 Park Avenue, 22nd Floor

New York, New York 10172

Attention: Dan Bueno

Ladies and Gentlemen:

This Credit Utilization Summary Schedule is delivered to you pursuant to
Section 4.13 of the Credit Agreement, dated as of October 30, 2013 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Sprague Operating Resources LLC, as Borrower, the Lenders
from time to time parties thereto, JPMorgan Chase Bank, N.A., as Administrative
Agent, and the other agents parties thereto. Unless otherwise defined herein or
the context otherwise requires, capitalized terms used herein have the meanings
provided in the Credit Agreement.

The attached schedule sets forth the outstanding Letters of Credit issued by
[NAME OF ISSUING LENDER].16

 

[NAME OF ISSUING LENDER] By:      

Name:

Title:

 

16  Issuing Lender shall deliver this Credit Utilization Summary to the
Administrative Agent within five (5) Business Days of the end of each calendar
month.

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CREDIT UTILIZATION SUMMARY SCHEDULE

Name of Issuing Lender: ________

As of the last day of the calendar month ended ________:

WORKING CAPITAL FACILITY LETTERS OF CREDIT

 

Applicant

   Beneficiary    Reference    Issuing Bank
Ref. Number    Issuance
Date/Effective
Date    Expiry
Date    Amount
Available to be
Drawn    Drawings, Payment
and Reductions

ACQUISITION FACILITY LETTERS OF CREDIT

 

Applicant

   Beneficiary    Reference    Issuing Bank
Ref. Number    Issuance
Date/Effective
Date    Expiry
Date    Amount
Available to be
Drawn    Drawings, Payment
and Reductions